ClearwaterGolfClubAnnualReport2018

CLEARWATER GOLF CLUB ANNUAL REPORT 2017/2018.

2017/2018

ANNUAL REPORT
CLEARWATER GOLF CLUB LIMITED

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CLEARWATER GOLF CLUB ANNUAL REPORT 2017/2018.

DIRECTORY

Contents

Page 3. Notice of the 15th Annual Meeting of the holders of Membership Shares of
Clearwater Golf Club.
Page 4. Notice of Meeting of the beneficiaries of Clearwater Member Trustee Limited.
Page 6. Chairman’s Report
Page 10. Club Captain’s Report
Page 12. General Manager’s Report
Page 14. Annual Financial Report

Board of Directors

John Hodge (Chairman)
William Brown (Club Captain elected Sept 2017)

Noel Chambers (retired Sept 2017)
John Durning (elected Sept 2017)

Kevin Eder (retired Sept 2017)
Bernard Marlow
Steve McNally
Kevin Simcock

Golf Committee

William Brown (Club Captain)
Stuart Brander
Simon Davis

Virginia Faass (retired November 2017)
Kean Mitchell

Maree Saunders (co-opted February 2018)
Elizabeth Signal

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CLEARWATER GOLF CLUB ANNUAL REPORT 2017/2018.

Notice of the 15th Annual Meeting of Holders of Membership Shares of Clearwater Golf Club
BACKGROUND: -

The Constitution of the Clearwater Golf Club Committee provides for an Annual Meeting of the holders of
membership shares. The purpose of the Annual Meeting is to enable holders of membership shares to discuss
matters of interest concerning Clearwater Golf Club as the board may determine. Accordingly the matters for
discussion are those detailed in the Notice set out below.

For the avoidance of doubt, Members are advised that this is a meeting of the Members of the Club. It is not a
Shareholders’ Meeting of Clearwater Golf Club Limited.
Pursuant to Rule 2.2 and 8.3 of the Constitution of the Clearwater Golf Club Committee, John Hodge (Board
Chairman) has been appointed to chair the meeting.

TAKE NOTICE that:
The Annual Meeting of the holders of Membership Shares of Clearwater Golf Club (“the Club”) is to be held in
the Members Lounge, Clearwater at 7:00pm on 25 September 2018 for the purposes of the following:

1. Appointing the Club Committee.

Notion of Motion : That the board shall invite direct applications from members to join a range of sub-
committees which will be advertised to all members from time to time.
Background : The board recognises the commitment required by golf committee members to cover a
wide range of activities, some of which are technical in nature, and the difficulties of making
substantial ongoing time commitments.
Most members are interested in assisting in specific projects when asked and are happy to be co-opted
in these cases.
The proposal is that members who wish to make themselves available for specific responsibilities such
as interclub golf management, match committee (rules) , golf events and calendars and social events
can make themselves known to the board. Appointments will be made which have defined time
commitments and responsibilities which it is believed will better suit a wider range of members in
committing to support the club.

2. General Business.
Any other permissible business. Notices of items of general business should be sent to Andrew Bell,
General Manager, no later than 5.00pm on Tuesday 18th September, 2018.

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CLEARWATER GOLF CLUB ANNUAL REPORT 2017/2018.

Notice of meeting of beneficiaries of The Clearwater Members Trust.
BACKGROUND: -

The ordinary shares in Clearwater Golf Club Limited are owned by Clearwater Members Trustee Limited (“the
Trustee”), as trustee of the Clearwater Members Trust (“the Trust”) – a trust established to own the ordinary
shares in Clearwater Golf Club Limited on trust for all Membership Shareholders in Clearwater Golf Club
Limited (“the Beneficiaries”).

Prior to the Trustee voting or signing any resolution as the owner of the ordinary shares in Clearwater Golf
Club Limited, the trust deed of the Trust requires the Trustee to obtain and follow the beneficiaries voting
direction from the Beneficiaries.

In accordance with the policy of the Board of Clearwater Golf Club Limited directors retire by rotation.
Bernard Marlow retires by rotation and will not seek re-election.

The Trustee wishes, by written resolution, to appoint new directors to Clearwater Golf Club Limited and is now
seeking a direction from the Beneficiaries as to who those directors should be.

TAKE NOTICE that: -
A meeting of the holders of Membership Shares of Clearwater Golf Club Limited, in their capacity as
Beneficiaries, is to be held in the Members Lounge, Clearwater immediately following the conclusion of the
Annual Meeting of the holders of Membership Shares being held at 7:00pm on 25th September 2018, for the
purposes of the following: -

1. Appointing of a Director.

Receiving nominations advised by way of the prescribed nomination form for a Director to be
appointed to the Board by the Trustee, following a vote to be held by the Beneficiaries at the said
meeting.

The purpose of including in the business of this meeting the calling of nominations, is to submit the
names of those so nominated to a voting process by Beneficiaries at the meeting to the intent that the
highest polling nominated member will then be appointed as a Director of Clearwater Golf Club
Limited by the Trustee, as owner of the ordinary shares in Clearwater Golf Club Limited.

Completed nomination forms should be sent to Andrew Bell, General Manager, no later than 5:00pm
on Tuesday September 18th, 2018. No nominations will be taken from the floor.

2. Appointment of Auditor
Notice of Motion: That the Board shall determine whether an auditor to the company is required for
the financial year ending 31 March 2019 and if so the Board is authorised to appoint the auditor and to
fix the remuneration for the auditor for the ensuing year.

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CLEARWATER GOLF CLUB ANNUAL REPORT 2017/2018.

3. Revoking status as an FMA Reporting Entity:
Notice of Motion: That the Beneficiaries of the Clearwater Members Trust instruct the Directors of
Clearwater Golf Club Limited to seek exemption from the reporting requirements of the Financial
Markets Conduct Act 2013.
Background : Clearwater Golf Club Limited, by virtue of its original capital structure, issued redeemable
preference shares under the Securities Act 1978 through registered prospectuses.
In 2017 Clearwater Golf Club Limited was automatically deemed to be a FMA Reporting Entity despite
having made no new share sales since 2009, and with no intention of raising funds in this way again in
the future.
The reporting requirements for an FMA entity are considerably more complex and detailed than those
for a normal company.
The financial cost of the Audit combined with the time spent on meeting new reporting standards
costs the company up to $20,000 (cash and time) to produce the multiple pages of notes within the
annual accounts.
The Board of Clearwater Golf Club Limited do not consider that Clearwater Golf Club Limited should be
classified as an FMA reporting entity and this position has been confirmed by our external auditors.
The Board have commenced a process to have the FMA apply an exemption from the reporting
requirements and have been advised that a resolution supporting the application from shareholders
would be helpful in this process.

4. General Business
Any other permissible business. Notices of items of general business should be sent to Andrew Bell,
General Manager, no later than 5.00pm on Tuesday September 18th, 2018.

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CLEARWATER GOLF CLUB ANNUAL REPORT 2017/2018.

Chairman’s Report

John Hodge.

I would like to thank my fellow board members John Durning, Bill Brown, Bernard Marlow, Steve McNally and
Kevin Simcock. The board has a range of skills that complement each other and they have assisted in dealing
with the issues we have encountered in the current year.

I would like to thank Bernard Marlow who is retiring from the board. Bernard gave valuable input to the board
over a long period of time. Bernard brought business skills, a strong passion for golf and insights from both
national and international leading golf courses to the board.

The board would also like to thank the members that give of their time to support the club from the committee
members (golf, 2025 and ladies etc.) through to volunteers whom help on interclub teams, events and projects.

The success of any club is dependent on its members and we thank members for their support of the club and
the events that are run.

The board’s key areas of focus for the year in 2018 were:

• Club operations and management
• Share buy- back and consideration given to converting the club membership structure
• Closer relationship with CROS
• 2025 Golf Course blue print – to ensure the course remains relevant to 2025 and beyond
• Communication – to members, stakeholders and related parties to the club.
• Health and safety – on and off course.

Staff

The board would like to thank Andrew Bell and the whole team at Clearwater Golf club for their hard work and
efforts thorough the year.

The board is aware that the team have been stretched during the year through widely variable weather, new
projects and changing staff mix. This set of factors has contributed to times which made hard work turn to very
challenging. The board acknowledge the team’s work ethic and their commitment to the club.

On behalf of the board and members I would like to acknowledge the work and efforts of Sam Langrope for the
club over the years and to wish him all the best in his new role. It has been satisfying seeing Sam’s development
and growth. He along with all other members of our staff rise to the challenges the club and course presents.

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CLEARWATER GOLF CLUB ANNUAL REPORT 2017/2018.

Assets

The resort and the club’s assets are now over 15 years old. As they age the level of maintenance has increased.
This is particularly the case with the Hotel building where we have had a series of maintenance issues from
leaking water pipes to blocked drains and numerous others in between.

The board has requested that a building review be undertaken so we have a detailed picture of the future
maintenance requirements. We want to ensure that any structural issues are identified before we commit to
any significant maintenance on the hotel buildings. As many will be aware the hotel operator was acquired by
the Accor group during the year. We have been advised that it will be business as usual from a club’s
perspective at this stage.

Share buy-back

In an effort to make Clearwater a more attractive proposition to new members, we are making good progress
on the share buy-back scheme.

While this may see the loss of some members, many of whom don’t actually play, it will open up opportunities
to attract new players. It also means the number of shares being listed for sale will reduce significantly and this
will alter the supply and demand.

Our membership level is capped and we will not go above this, thereby protecting your ease-of-access to
playing times.

We are pleased to report that we have signed up 11 new members in recent months. Most are assignment
members who have elected to take up an existing membership so have playing rights but have no shareholding.

2025 Golf Course

Golf designers Brett Thomson and Phil Tataurangi undertook a review of the golf course and this was presented
to members.

We also held an information evening with the designers and sought the feedback of the members. The board
took account of the feedback and a number of the designers’ recommendations will not proceed. It has been
agreed that the 11th hole will be the first to be reinvigorated.

The 2025 Advisory Committee will continue to advise the board on the implementation of the new blue print.
We would like to thank them for their contribution.

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CLEARWATER GOLF CLUB ANNUAL REPORT 2017/2018.

Some of the feedback we received related to course maintenance and we held a successful working bee which
helped to address some of these concerns. Ryan Adams and his green keeping team led the way with a series of
projects which many will have noticed over recent months. There is an ongoing plan to continue the
momentum.

CROS

The board is keen to continue to foster a closer relationship with CROS (Clearwater Resort Owner’s Society).
CROS formulated and then implemented a plan to improve the upkeep of the wider “resort”. You will have all
seen the massive clean-up of the stream on the entrance to the golf club as well as the entrance road side
areas. We are well informed of their plans. The board is supportive of CROS taking leadership to improve and
maintain the wider “resort”.
The board has formulated a social membership proposition and is working with CROS to implement it. We have
ensured it offers value to resident non-golfers, whilst being mindful that our members remain the core of our
club.

Communication

A formal communication plan was implemented, and the board has ensured it has kept members informed of
key initiatives. The board has had a programme of seeking member feedback both informally and formally such
as with the course design presentation.

Sponsorship

The board have asked management to look at a range of sponsorship options for the club. Interviews were held
with a number of members who have expertise in marketing and sponsorship to gain their insights. We are
however keen to ensure any such new sponsorship options are in keeping with the ethos of Clearwater.
Consequently, some forms of sponsorship which are common at many clubs locally were not advanced.
We would like to acknowledge and thank our existing sponsors for their support.

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CLEARWATER GOLF CLUB ANNUAL REPORT 2017/2018.

Financial

The club made a profit after depreciation and before changes in fair value of our investment assets of $18k a
better result than the $7k in 2017. After allowing for changes in the value of our investment property the final
loss for the year is $152K. This arose entirely from the downward revaluation of $170k of our investment
property assets which are required to be revalued each year under NZIFRS accounting standards. By
comparison in 2017 the investment property appreciated by $340k. These fluctuations relate to investment
yield rates and do not impact our cash operating position.
Revenue was in line with the prior year. Management and the board maintained a strong focus on expenditure
which was also held at a level similar to the prior year. The club needs to continue to focus on improving
profitability, so it can invest in the course, capital equipment and over time reduce debt.
The bank debt was renegotiated early in the year hence the change with the majority of debt being classified as
term debt rather than current as in 2017. The board has a desire to reduce term debt by $100k per annum
going forward and a repayment was made in May 2018. We acknowledge the support we receive from the
BNZ.
The club has a strong equity position built around the course and its associated assets along with our
investment properties. We are aware that some clubs in the Canterbury area are continuing to struggle
financially.

Finally

The board thanks the members for their support and looks forward to the year ahead.

John Hodge
Chairman.

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CLEARWATER GOLF CLUB ANNUAL REPORT 2017/2018.

Club Captains Report

Bill Brown.

My first year as Club Captain has been interesting to say the least.

I am sure that many members do not appreciate the limited role that the Committee plays at Clearwater which
is very different from the roles Committees play in the traditional Golf Clubs in Canterbury. It has certainly
involved a learning curve for me.

There are a number of highlights that stood out to me and these were, in no particular order:

- The hard work and the hours that have been put in by the Committee in what can sometimes be a thankless
task. Liz Signal does an enormous amount of work and she and Maree Saunders have done a wonderful job in
running the Ladies events and promoting golf to starters and potentially new members. Simon Davies, Stu
Brander and Kean Mitchell – thank you for your support. Both Simon and Stu are standing down from the
Committee after many years of service so they can concentrate on their respective roles with Simon in charge of
the 30/30 Competition and Stu managing the President’s Team.
- The Pairs Tournament. This was a great success and raised some $20,000 for new chairs and tables for the
members’ lounge which will soon be available. The tournament could not have happened without the
exceptional work of the sub-committee consisting of Tony Bastings, Richard Holden, Bill O’Brien and Stu Brander
as well as the support of the numerous sponsors. A special thanks also to Amanda from the Golf Ops team and
Wendy for ensuring things ran smoothly.
- The healthy debate sparked by the report with suggested changes to the golf course. If nothing else it has
shown the passion that many of the members have for the Club. I am sure that we will end up with acceptable
changes that will stand us in good stead for many years to come.
- The willingness of many members to participate in the working bee to carry out planting and tidy up certain
aspects of the course. This was a great success and will be repeated again shortly.

My thanks to Andrew, Matt and Ryan and all of our staff who do a great job with the best interest of the members
at heart.

Our Inter-Club Teams had a mixed year. Our success was again led by the ladies with the Women’s Silver 36
Hole team winning their championship, the Women’s Weekend team losing in the final and the Women’s 18-
hole team losing in the semi-finals.

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CLEARWATER GOLF CLUB ANNUAL REPORT 2017/2018.
Sadly, our Woodward team got relegated, the Blank team finished fifth and the President’s and the Metro A
teams are looking for a better year this year.

2018 Canterbury Golf Silver 36 Hole Champions - Julie, Liz, Victoria, Nicky, Maree, Linda and Virginia (absent Mary Hutton)

I have also enjoyed my experience on the Board over the last 12 months and I would like to recognise the long
hours put in by the Board members in an unpaid role. The Club has a very experienced Board expertly led by
John Hodge and I have no doubt the Club is in good hands.
We are fortunate to have a great golf facility which I believe will only improve. The Golf Operations team is
working on new initiatives to enhance the social side of the Club and build on our culture. While some of the
ideas may be different I would urge members to support these initiatives.
Bill Brown
Club Captain.

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CLEARWATER GOLF CLUB ANNUAL REPORT 2017/2018.

General Managers Report

Andrew Bell.

Looking back on the past year I think the overriding theme has been to look forward to the future and to set
out plans that position Clearwater Golf Club strongly in a changing golf environment, coupled with our changing
city dynamic.

Over the year the board have worked with management on solutions to our perceived membership barriers
and this culminated in the first stage of the buy back offer in March. Along with the board the management
team are working through further recommendations for change that will firmly position the Clearwater Golf
Club membership option as the best in Christchurch.

The board also tasked the management team with providing input into the potential course alterations from an
operational viewpoint. Those changes have been debated and there is now a strategy in place to undertake
work as funds are available and with a logical path to follow.

The board approved budgets for remedial repair work which started with the complete rebuild of the 9th tee.
There has also been considerable work on renovating areas that had been neglected through priortisation of
course work, particularly the waterway edges. This work involves considerable man-hours and Ryan and his
team are to be congratulated for their efforts once the heat of Summer was behind us.

After the uncertainties of previous years we now know that the three key city projects that bring us the
opportunity to recover our lost visitor revenues are now at least have a possibly of completion : cruise boats
will be back in Lyttleton in late 2020, Conferences and Conventions will be back in mid 2020 and there is now
the money, if not a final plan, to have a covered events stadium in 2021.

We are well positioned reputationally to capture these future visitors through our marketing with the various
wholesale travel agents, and conference managers as well as being engaged with national and local
government tourism agencies. In fact, we have a cruise booking for 2020 for 100 Americans already. The board
have also tasked management with creating fresh initiatives for revenue opportunities that utilise our entire
asset base to further enhance both the member experience and our options for visitors.

Both locally and nationally the golf club landscape is intriguing. We remain oversupplied with courses and there
is a lot of competition to attract members. The next wave of potential golf club members is the much talked
about millennials (those born from 1984 to 2004) who have grown up with a mobile phone in their hands.

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CLEARWATER GOLF CLUB ANNUAL REPORT 2017/2018.

International data suggests that millennials love playing golf (participation is up everywhere) but they don’t like
commitments (their lives run on a monthly contract basis). One of the challenges the board has presented to
management is to bring solutions to the board that position the club as the best option for these future
members.

Our entire staff at Clearwater have worked to subtly move from providing exceptional service to creating
exceptional experiences. Perhaps the best example of that is the number of members who call the Golf Shop
from all over the world to enquire about their membership number as they haven’t had to print their own card
for so long.

From a visitor perspective you may be interested to read some of the reviews online of the positive experiences
at Clearwater. To me the most rewarding element of those reviews is that in most cases they name a staff
member who helped create their experience. I mention that because none of our staff wear name badges, they
simply put out their hand, introduce themselves and welcome people on your behalf to the Clearwater Golf
Club.

The team of staff are personally invested in creating the best experiences they can. They are all willing to put
forward new ideas that are hopefully welcomed by you. We can’t always satisfy the finer points of each
individuals issue’s, but we certainly try, and we don’t ever think we’ve reached that optimal point where no
more effort is needed.

Financially, it is pleasing to note that we are one of the few (possibly the only) golf club business operating at a
profit before depreciation or revaluations in Christchurch based on the most recent published annual accounts.
As John Hodge has stated, there are days when we work under a fair amount of pressure to fill the tills or to
complete tasks without overrunning costs. We have taken prudent steps as management rather than reckless
ones which at times can be frustrating for all of you as we must move slowly on some changes.

This year we had some staff changes and whilst it was post balance date the most significant was the loss of
Sam Langrope after 14 years of service to the membership. Sam’s life has evolved with the club and the
opportunity presented to him fitted all the goals he has developed, including spending more time with his wife
and daughter. It was a privilege to work alongside a dedicated and highly likeable member of our staff.

Over the past year we have worked with the board and the golf committee to provide our input into delivering
a well-managed business, alongside nurturing a happy (most days) membership option.

Our goal is to stimulate your collective use of the club’s facility. We will offer more ideas for consideration,
make a few more mistakes, and strive to be a little bit better each day.

Andrew Bell
General Manager.

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Clearwater Golf Club Limited
Directors' Report
For the Year Ended 31 March 2018

The Board of Directors present their Annual Report including financial statements of the Company for the year ended 31 March 2018.

The shareholders of the Company have exercised their right under section 211(3) of the Companies Act 1993 and agreed that this Annual
Report need not comply with any of the paragraphs (a) and (e) to (j) of section 211(1) of the Act.

The Annual Report and the financial statements presented on pages 4 to 21 are signed for and on behalf of the Board of Directors who
authorised the issue of these financial statements on 30 August 2018.

For and on behalf of the Board.

S.McNally K.Simcock

Director Director

Page 3

14

Clearwater Golf Club Limited Refer 2018 2017
Consolidated Statement of Comprehensive Income Note $ $
For the Year Ended 31 March 2018
8 316,855 359,646
Revenue 7 1,013,222 1,002,604
Green fees 2
Membership subscriptions 3 446,037 452,054
Golf Shop operation 276,638 272,646
Members Lounge Operation 226,186 237,997
Rental income 209,569 214,829
Landscaping Income 176,404 105,190
Other income 2,664,912 2,644,966
Total revenue
2,964 11,686
Expenses 292,332 289,335
Changes in inventories 196,725 188,494
Golf Shop apparel and consumables used 963,644 948,066
Members Lounge purchases and consumables used 143,704 162,043
Employee benefits expense 314,854 310,328
Operational expenses 354,152 351,681
Course maintenance 202,509 204,095
Administration costs 2,470,884 2,465,728
Finance costs
Total expenses 194,029 179,239
Earnings before change in fair value of investment property,
depreciation, amortisation and income tax expense 176,512 171,690

Depreciation and amortisation expense (170,000) 340,000

Gain/(Loss) in fair value of investment property (152,484) 347,548

Profit/(Loss) before income tax expense - -

Income tax expense (152,484) 347,548

Profit/(Loss) for the year - 242,734
- 242,734
Other Comprehensive Income (152,484) 590,282
Items that will not be reclassified subsequently to profit or loss
Change in fair value of non-operational buildings, net of tax

Total Other Comprehensive Income

Total Comprehensive Income/(Deficit)

Notes to the financial statements are included on pages 8 to 21 and should be read in conjunction with these financial statements. Page 4

Clearwater Golf Club Limited Refer 31 March 31 March
Consolidated Statement of Financial Position Note 2018 2017
As at 31 March 2018 $ $
5
Equity 6 640,000 640,000
Ordinary Shares 5 (1,695,750) (1,519,856)
Capital Development Fund 10,253,297 10,253,297
Membership Shares 10
Revaluation Reserve 13 1,025,752 1,025,752
Accumulated losses (230,918) (254,329)
Total Equity 13 9,992,381 10,144,864

Non Current Liabilities 10 100,485 93,695
Finance leases (long-term portion, secured) 3,400,000 150,000
Borrowings - Bank 9 100,000
Advance - Mahar Charitable Trust 90,000 343,695
Total Non Current Liabilities 8 3,590,485
7
Current Liabilities 383,865 445,047
Bank overdraft 100,000 3,045,000
Borrowings - Bank 230,967
Accounts payable 264,972
Revenue received in advance 7,132 121,651
Accrued expenses and other liabilities 32,378
Employee entitlements 83,805 90,883
Finance leases (current portion, secured) 102,724 86,789
Total Current Liabilities 940,872 81,055
Total Liabilities and Equity 14,523,737 4,135,397
14,623,956
Current Assets
Cash at bank 1,850 3,203
Accounts receivable 179,859 93,067
Prepayments and other receivables 66,454
Inventories 13,999 142,009
Shares (100) - Canterbury Golf Tourism Ltd 144,973
Total Current Assets 1,000
1,000 305,733
Non Current Assets 341,681
Property, plant and equipment
Investment Property 10,252,056 10,218,223
Total Non Current Assets 3,930,000 4,100,000
Total Assets
14,182,056 14,318,223
14,523,737 14,623,955

Notes to the financial statements are included on pages 8 to 21 and should be read in conjunction with these financial statements. Page 5

Clearwater Golf Club Limited Ordinary Membership Accumulated Capital Revaluation Total
Consolidated Statement of Changes in Equity Share Shares Losses Development Reserve
For the Year Ended 31 March 2018 Capital $
$ $ $ Fund $
Balance at 31 March 2016 $ 9,554,581

Profit for the year 640,000 10,253,297 (902,222) (1,219,511) 783,018 347,548
Other Comprehensive Income 242,734
Total Comprehensive Income - - 347,548 - - 590,282
Transfer (to) / from Capital Development Fund
Transfer from / (to) Capital Development Fund - - - - 242,734 -
on utilisation
Balance at 31 March 2017 - - 347,548 - 242,734 -
10,144,863
Profit/(Loss) for the year - - (145,234) 145,234 -
Other Comprehensive Income (152,484)
Total Comprehensive Income/(Deficit) - - 445,579 (445,579) - -
Transfer (to) / from Capital Development Fund 640,000 10,253,297 (254,329) (1,519,856) 1,025,752
Transfer from / (to) Capital Development Fund (152,484)
on utilisation - - (152,484) - -
Balance at 31 March 2018
- - -- - -
9,992,379
- - (152,484) - -

- - (128,129) 128,129 -

- - 304,023 (304,023) -
640,000 10,253,297 (230,918) (1,695,750) 1,025,752

Notes to the financial statements are included on pages 8 to 21 and should be read in conjunction with these financial statements. Page 6

Clearwater Golf Club Limited Refer 2018 2017
Consolidated Statement of Cash flows Note $ $
For the Year Ended 31 March 2018
16 2,419,468 2,720,728
Cash Flows from Operating Activities 402,097 361,083
Cash was provided from: 18,638 31,611
Golf Club revenue (receipts from customers)
Other income received 2,840,203 3,113,422
GST received
2,534,853 2,524,134
Cash was applied to: 196,400 209,239
Payments to suppliers and employees 202,509 204,095
GST paid
Interest and cost of finance paid 2,933,762 2,937,468
(93,560) 175,954
Net cash provided from operating activities
41,712 8,696
Cash Flows from Investing Activities 41,712 8,696
Cash was provided from:
Proceeds from sale of property, plant and equipment 221,783 349,450
- 1,000
Cash was applied to:
Purchase of property, plant and equipment 221,783 350,450
Purchase of Shares (180,070) (341,754)

Net cash (applied to) investing activities 3,500,000 150,000
- 100,000
Cash Flows from Financing Activities
Cash was provided from: 152,411 -
Term loan from BNZ 3,652,411 250,000
Advance Mahar Trust
Finance Lease 3,195,000 -
- -
Cash was applied to: 96,804
Repayment of term loan from BNZ 123,953 96,804
Net intercompany advances 3,318,953 153,196
Finance lease repayments
333,458 (12,604)
Net cash (applied to) financing activities (429,240)
59,829 (441,844)
Net increase / (decrease) in cash and cash equivalents (441,844)
Cash and cash equivalents at the beginning of the period (382,015)
Cash and cash equivalents at the end of the year
(383,865) (445,047)
Cash and cash equivalents comprises: 1,850 3,203
Bank overdraft
Cash at bank (382,015) (441,844)

Notes to the Financial Statements are included on pages 8 to 21 and should be read in conjunction with these financial statements. Page 7

Clearwater Golf Club Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 March 2018

1. Summary of Significant Accounting Policies
Reporting entity
Clearwater Golf Club Limited ("the company') is a limited liability company incorporated and domiciled in New Zealand. It is a registered under the
Companies Act 1993 with its registered Office at Clearwater, Clearwater Avenue, Harewood Christchurch.

The company has elected to report as a Tier 1 for-profit reporting entity as defined by the External Reporting Board's Accounting Framework
standards.
Nature of operations
Its principal purpose is the operation of the golf course at Clearwater Resort. The Company operates solely within New Zealand.

Basis of preparation
The consolidated financial statements presented are those of a profit orientated business, Clearwater Golf Club Limited ("the Company")
and its subsidiary ("collectively the Group") for the year ended 31 March 2018.

Statement of Compliance
The consolidated financial statements for the year ended 31 March 2018 have been prepared in accordance with Generally Accepted
Accounting Practice in New Zealand ('NZ GAAP'). For the purposes of complying with NZ GAAP, the group is for profit entity.
The financial statements comply with New Zealand equivalents to International Financial reporting Standards ('NZ IFRS). The financial
statements also comply with International Financial reporting standards (IFRS).

The consolidated financial statements were authorised for issue by the Directors on 30 August 2018.

The consolidated financial statements have been prepared on the basis of historical cost as modified by the revaluation of investment
property as detailed in note 7. These financial statements have been prepared on the assumption that the group is a going concern.
The reporting currency is New Zealand Dollars which is the groups functional currency.
All amounts disclosed in these consolidated financial statements have been rounded to the nearest dollar.
Cost is based on the fair value of the consideration given in exchange for assets.

Accounting policies are selected and applied in a manner which ensures that the resulting financial information satisfies the
concepts of relevance and reliability, thereby ensuring that the substance of the underlying transactions or other events is reported.

The accounting policies set out below have been applied in preparing the consolidated financial statements for the year ended 31 March 2018.
However, additional disclosures are required for the year ended 31 March 2018. The amendments to IAS7 statement of cash flows effective
1 January 2017, require the company to provide disclosures about the changes in liabilities from financing activities. The company categorises
those changes into changes arising from cash flows and non cash changes with further subcategories as required by NZ IAS 7 (see note 17).

Critical judgements in applying the Group's accounting policies
In the process of applying the Group's accounting policies, management has made no judgements that would be considered
to have had a significant effect on the amounts recognised in the financial statements other than to adopt the independent external
valuation of investment property and to consistently treat the redeemable preference shares as equity.

Going Concern
As at the reporting date the Group had net current liabilities of $599,191 (2017: $3,829,664). Subsequent to reporting date
(1 April 2018) the Company issued subscription notices to Membership Shareholders of $1,334,782 due for payment by 20 May 2018.
The Board continuously reviews its property, plant & equipment with the intention of realising the value of non-core assets through
disposal or through structured investment to enable the Group to continue to secure future positive cash flows.

The Board also has the constitutional right (Clause 3.7) to make a call on holders of Membership Shares in the event of a cash
shortfall in any year, or at any other time deemed necessary by the Board.
As such, the Group's funding position is considered to be secure and the Group will be able to pay its liabilities as and when they
fall due for the 12 months period following the date of signing the consolidated financial statements.

After making enquiries and having considered the Group's funding requirements, the directors have a reasonable expectation that
the Group has adequate financial resources to enable it to continue in operational existence for the foreseeable future. Accordingly,
the Group continues to adopt the going concern basis in preparing the financial statements.

Page 8

Clearwater Golf Club Limited
Notes to the Consolidated Financial Statements (Continued)
For the Year Ended 31 March 2018

1. Summary of Significant Accounting Policies (Continued)
Key sources of estimation uncertainty
The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the balance sheet
date, that have a significant risk of causing material adjustment to the carrying amounts of assets and liabilities within the next
financial year.

Valuation of investment property
Policy (l) and note 7.

Valuation of property, plant and Equipment
Policy (k) and note 8.

Significant Accounting Policies
The following significant accounting policies have been adopted in the preparation and presentation of the consolidated financial statements.

(a) Basis of consolidation
The consolidated financial statements are prepared by combining the financials statements of all the entities that comprise
the Group, being the Company (the parent entity) and its subsidiary as defined in NZ IFRS 10 'Consolidated Financial
Statements'.

All intra-group assets and liabilities, equity, income, expenses and cashflows relating to transactions between members of the group are
eliminated in full on consolidation.

(b) Accounts receivable
Trade receivables are measured at amortised cost less any impairment. This is equivalent to fair value being the receivable
face (or nominal) value, less appropriate allowances for estimated irrecoverable amounts (which are recognised in profit
or loss when there is objective evidence that the receivable is impaired). The allowance recognised is measured as the
difference between the asset's carrying amount and the present value of estimated future cash flows discounted at the
effective interest rate computed at initial recognition.

(c) Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, cash in banks, and investments in money market instruments with
the original maturities of three months or less and which are subject to an insignificant risk of changes in value, net of
outstanding bank overdrafts. Bank overdrafts are shown under current liabilities.

(d) Employee benefits
Provision is made for benefits accruing to employees in respect of wages and salaries, annual leave, long service leave
and sick leave when it is probable that settlement will be required and they are capable of being measured reliably.

Provisions made in respect of employee benefits expected to be settled within 12 months, are measured at the nominal
value using the remuneration rate expected to apply at the time of settlement.

(e) Financial instruments
Financial instruments recognised in the consolidated statement of financial position include cash and bank balances, receivables, payables
and accrued expenses, borrowing, and term loans. Financial assets are recorded initially at fair value and subsequently at amortised cost
less impairment. Financial liabilities are recorded initially at fair value and subsequently at amortised cost.Non-derivative financial instruments
comprise investments in shares, cash and cash equivalents, loans and borrowings, trade and other receivables, trade and other payables
and leases.
Non-derivative financial instruments are recognised initially at fair value plus, for instruments not at fair value through profit or loss, any directly
attributable transaction costs. Subsequent to initial recognition, non-derivative financial instruments are measured as described below.

A financial instrument is recognised if the Company becomes a party to the contractual provisions of the instrument. Financial assets are
derecognised if the Company’s contractual rights to the cash flows from the financial assets expire or if the Company transfers the financial
asset to another party without retaining control or substantially all risks and rewards of the asset.
Purchases and sales of financial assets are accounted for at trade date, being the date the Company commits itself to purchase or sell the asset.
Financial liabilities are derecognised if the Company’s obligations specified in the contract expire or are discharged or cancelled.

The Company classifies its investments under the category ‘financial assets at fair value through profit or loss - designated as such upon
initial recognition’.
(f) Goods and Services Tax (GST)
Revenues, expenses, liabilities and assets are recognised net of the amount of goods and services tax (GST), except for
receivables and payables which are recognised inclusive of GST.

Cash flows are included in the cash flow statement on a gross basis. The GST component of cash flows arising from Page 9
investing and financing activities which is recoverable from, or payable to, the taxation authority is classified as operating
cash flows.

Clearwater Golf Club Limited
Notes to the Consolidated Financial Statements (Continued)
For the Year Ended 31 March 2018

1. Summary of Significant Accounting Policies (Continued)

(g) Impairment of assets
At each reporting date, the Group reviews the carrying amount of its tangible assets to determine whether there is any
indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the
asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash
flows that are independent from other assets, the Group estimates the recoverable amount of the cash-generating unit to

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows
have not been adjusted.

If the recoverable amount of an asset (or cash generating unit) is estimated to be less than its carrying amount, the carrying
amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment is recognised in profit
and loss immediately, unless the relevant asset is carried at fair value, in which case the impairment loss is treated as a
revaluation decrease.

Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to
the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed
the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-
generating unit) in prior years. A reversal of an impairment loss is recognised in profit and loss immediately, unless the
relevant asset is carried at fair value, in which case the reversal of the impairment loss is treated as a revaluation increase.

(h) Income tax
Current tax
Current tax is calculated by reference to the amount of income taxes payable or recoverable in respect of the taxable profit
or tax loss for the period. It is calculated using tax rates and tax laws that have been enacted or substantively enacted by
reporting date. Current tax for current and prior periods is recognised as a liability (or asset) to the extent that it is unpaid
(or refundable).

Deferred tax
Deferred tax is accounted for using the liability method in respect of temporary differences arising from differences between
the carrying amount of assets and liabilities in the consolidated financial statements and the corresponding tax base of those items.

In principle, deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised
to the extent that it is probable that sufficient taxable amounts will be available against which deductible temporary
differences or unused tax losses and tax offsets can be utilised. However, deferred tax assets and liabilities are not
recognised if the temporary differences giving rise to them arise from the initial recognition of assets and liabilities, in a
transaction that affects neither taxable income nor accounting profit.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period(s) when the asset
and liability giving rise to them are realised or settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted by reporting date. The measurement of deferred tax liabilities and assets reflects the tax
consequences that would follow from the manner in which the entity expects, at the reporting date, to recover or settle the
carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the
Group intends to settle its current tax assets and liabilities on a net basis.

Current and deferred tax for the period
Current and deferred tax is recognised as an expense or income in the profit or loss, except when it relates to items
recognised in other comprehensive income or debited directly to equity, in which case the deferred tax or current tax is also
recognised in profit or loss or directly in other comprehensive income.

(i) Inventories
Inventories are recognised at the lower of cost, determined on a first-in-first-out basis, and net realisable value. Inventory
items are finished goods held for the purpose of resale in the golf shop, beverages and food held in the members lounge.

Page 10

Clearwater Golf Club Limited
Notes to the Consolidated Financial Statements (Continued)
For the Year Ended 31 March 2018

1. Summary of Significant Accounting Policies (Continued)
(j) Leases
Finance leases which effectively transfer to the Group substantially all of the risks and rewards incidental to ownership of
the leased items, are capitalised at the fair value of the leased property, or if lower, at the present value of the minimum
lease payments, each determined at the inception of the lease. The leased assets and the corresponding liabilities are
disclosed and the leased assets are depreciated over the shorter of the lease term or estimated useful life of the asset.
Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a
constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against profit or loss
within the Statement of Comprehensive Income.
Operating lease payments, where the lessors effectively retain substantially all the risks and rewards of ownership of the
leased items, are recognised as an expense on a straight-line basis over the lease term, except where another systematic
basis is more representative of the time pattern on which economic benefits from the leased asset are consumed.

(k) Property, plant and equipment
Property, plant and equipment, and equipment under finance lease, but excluding non operational buildings, are stated at cost less
accumulated depreciation and impairment. Cost includes expenditure that is directly attributable to the acquisition of the item.
Non operational buildings are those which may be made available for public external hire or lease from time to time.
The non operational (Members Lounge) building is measured at fair value, less any accumulated depreciation on the building and
impairment losses recognised at the date of valuation. Valuations are performed with sufficient frequency to ensure that the fair
value of a revalued asset does not differ materially from its carrying amount. All items are assessed for impairment at each reporting
date and where the carrying amount is assessed to be greater than its recoverable amount, the item is written down. The
write down is recognised in profit or loss within the Statement of Comprehensive Income unless the situation is assessed as a
reversal of a previously recognised gain that was initially recognised in the revaluation reserve.

Depreciation is provided on property, plant and equipment, including land improvements, but excluding land. Depreciation is
calculated on a diminishing value basis so as to write off the net cost of each asset over the expected useful life to its
estimated residual value. The estimated useful lives, residual values and depreciation method is reviewed at the end of
each annual reporting date.

Depreciation has been calculated using the following rates:
Buildings - 0% DV
Land improvements - 4-9% DV
Plant and machinery - 4-80% DV
Furniture, fittings and equipment - 4-60% DV

Diminishing value has been selected was a basis of depreciation because in the opinion of the directors it best reflects the decline in
service potential for each class of asset.

(l) Investment property
Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost including
related transaction costs. Subsequent to initial recognition investment properties are measured at fair value at the reporting date.
Gains or losses from the changes in the fair value of investment property are included in profit or loss within the Statement of Comprehensive
Income in the period in which they arise.

Independent valuations are used to determine the fair value of investment property. The most common and accepted method for
assessing the current market value of an investment property is the Income Capitalisation approach. This approach derives a value
based on contract rentals, expected future market rentals, income void assumptions, maintenance requirements and appropriate
discount rates.

In deriving a market value all assumptions are compared where possible, to market based evidence and transactions for properties
with similar locations, conditions, and quality of accommodation.

(m) Payables
Trade payables and other accounts payable are recognised when the Group becomes obliged to make future payments
resulting from the purchase of goods and services.

Page 11

Clearwater Golf Club Limited
Notes to the Consolidated Financial Statements (Continued)
For the Year Ended 31 March 2018

1. Summary of Significant Accounting Policies (Continued)
(n) Interest bearing loans and borrowings
Loans and borrowings are initially recorded at fair value, plus directly attributable transaction costs. Subsequent to initial
recognition, loans and borrowings are measured at amortised cost, with any differences from the initial amount recognised
and the redemption value being recognised in profit or loss within the Statement of Comprehensive Income using the effective
interest rate method. In practice thus means that Group interest bearing borrowings are recognised at face (or nominal) value due to
the repayment and cost of borrowing terms associated with them.

(o) Revenue recognition
Revenue from golf shop and members lounge operations is recognised when the Group has transferred to the buyer the
significant risks and rewards of ownership of the goods.

Revenue from green fees and membership subscriptions paid by membership shareholders are recognised in the accounting
period in which the services are rendered.

Revenue from rental income from operating leases (net of any incentives given to the lessees) is recognised on a straight-line
basis over the lease term.

Interest revenues and expenses (if any) are recognised in the consolidated financial statements on a time basis using the effective
interest method.

(p) Changes in accounting policies
The Company has updated it's reporting requirements to meet amendments to NZ IAS 7 "Statements of Cash Flows'' which became
effective on 1 January 2017. There has been no other changes in accounting policies.

(q) Standards and Interpretations Effective in the Current Year
The amendments to NZ IAS 7 "Statements of Cash Flows" effective 1 January 2017 , require the Company to provide disclosures about
the changes in liabilities from financing activities. The Company categorises those changes into changes arising from cash-flow and
non-cash changes with further sub-categories as required by NZ IAS 7.

The Company has applied NZ IAS 7 for the first time in the current year, see Note 17.

Standards in issue but not yet effective
NZ IFRS 9 – Financial Instruments (proposed effective date for reporting periods beginning on or after 1 January 2018)
NZ IFRS 9 will replace IAS 39 Financial Instruments: Recognition and Measurement in its entirety. It sets out a different way to classify
and measure financial assets and financial liabilities, complete impairment test and how to undertake ledger accounting.

NZ IFRS 15 - Revenue from Contracts with Customers (proposed effective date for periods beginning on or after
1 January 2018)
NZ IFRS 15 establishes principles for reporting useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue
and cash flows arising from an entity's contracts with customers. The core principle of NZ IFRS 15 is that an entity recognises revenues to depict the transfer
of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods
or services.

NZ IFRS 16 - Leases (proposed effective date for periods beginning on or after 1 January 2019)
NZ IFRS 16 changes the relevant information to be reported by lessors and lessees with a view to faithful representation of information to the uses of the
financial statements so they can assess the effect leases have on cash flow, financial performance and the financial position of the entity. The standard
requires the lessee to recognise assets and liabilities for the rights and obligations created by those leases. Lessors reporting requirements are similar to the
previous standard NZ IAS 17 Leases.

The Directors have initially assessed the impact of these new standards on the consolidated financial position and financial performance of the Group and hold
the view that, apart from additional disclosures, the recognition and measurement of revenue, financial instruments and lease obligations will not be materially
different from what is currently being disclosed in these consolidated financial statements.

Page 12

Clearwater Golf Club Limited
Notes to the Consolidated Financial Statements (Continued)
For the Year Ended 31 March 2018

2. Profit/(Loss) Before Income Tax expense

2018 2017
$ $

Profit before income tax has been arrived at after
charging/(crediting):

Fees paid to auditors (solely for statutory audit) 13,500 12,600
Gain/(loss) on disposal of property, plant and equipment 41,712 6,034
Directors' Fees -
Operating lease costs -
Balance of provision for doubtful debts 67,672 70,087
Repairs and maintenance 8,276
Defined Contribution payments to employees -
128,875 92,337
12,302
18,930

The auditor of Clearwater Golf Club Limited is Grant Thornton New Zealand Audit Partnership.

3. Income Tax Expense

The prima facie income tax expense on pre-tax accounting profit from operations reconciles to the income tax expense in

the consolidated financial statements as follow:

31 March 31 March

2018 2017

$$

Profit/(Loss) before income tax expense (152,484) 347,548

Income tax credit calculated at 28% (42,695) 97,313
Non-deductible expenses - (9,842)
Deferred tax assets (87,471)
Income tax expense 42,695
- -

There is no income tax payable for the period (31 March 2017: Nil). Income tax losses have not been brought to account
as deferred tax assets, as it is not deemed probable that these losses will be utilised in the foreseeable future. The losses
available to carry forward are subject to confirmation from the Inland Revenue.

The Group has an unrecognised deferred tax asset balance of $182,697 at 31 March 2018 (2017: $140,304) as follows:

Unrecognised deferred tax balances 31 March 31 March
The following deferred tax assets have not been brought to 2018 2017
account as assets: $ $
Tax losses brought forward
Tax (profit)/losses for the year 121,330 208,801
42,695 (87,471)
Temporary differences: 121,330
- Doubtful debts 164,025
- Holiday pay provision (761)
- ACC accrual - 18,968
- Other accruals 19,189
669
- 98
-
183,214 140,304

Imputation Credit Account Balances 31 March 31 March
Balance at the end of the period 2018 2017
$ $
- 28

Page 13

Clearwater Golf Club Limited
Notes to the Consolidated Financial Statements (Continued)
For the Year Ended 31 March 2018

4. Ordinary Shares
Ordinary capital is made up of 640,880 ordinary shares (31 March 2017: 640,880) issued and fully paid, 1,000 of which have
been issued for nil consideration. The Par value is $1. Full voting rights are attached to all the shares except where the vote directly
affects Membership Shares and the Membership Shareholder's rights.

5. Membership Shares No. of No. of
Individual
Class of Membership Share Individual Membership
Individual Share Equiv.
Family 2018 No. of Membership 2017 No. of
One cardholder Corporate Shares 302
Two cardholder Corporate Shares Share Equiv. 302 558
Three cardholder Corporate 279
Four cardholder Corporate 302 302 9 9
Family (or Individual) Membership Shares reserved for 25 50
acquirers of land at Clearwater 279 558 4 12
8 32
99

25 50

4 12

8 32

93 186 93 186
720 1,149 720 1,149

All Membership Shares are fully paid.

Membership Shares are redeemable preference shares issued for a fixed term expiring 99 years from the official
opening date of the Clearwater Golf Club facilities, which was 28 March 2002. The shares have no voting rights, nor
entitlement to a dividend.

In accordance with the requirements of New Zealand law, Membership Shares have no par value, and will be redeemed on
the expiration of the membership term for a sum of $1.00. In the event that Clearwater Golf Club Limited is wound up prior
to the expiration of the membership term the Membership Shares will be redeemed by Clearwater Golf Club Limited in
accordance with the formula set out in Clearwater Golf Club Limited's constitution.

6. Capital Development Fund
The Capital Development Fund is a reserve to be maintained by the Group for the purpose of funding the replacement or
upgrade of course maintenance equipment, and significant upgrades or additions to the Golf Course or Clubhouse Facilities
in the future. The balance of this fund at each reporting date has been overdrawn and there are no plans to rectify this situation in
the foreseeable future.
As required by the Prospectus the transfer to the Capital Development Fund is no more than 5% of the Clearwater Golf Club's total
revenue including revenue from annual subscriptions and green fees. The transfer to or from the Capital Development Fund represent finance
lease repayments and additions and disposals of property, plant and equipment.

7. Investment Property 31 March 31 March
2018 2017
At Fair Value $ $
Opening Balance
Additions 4,100,000 3,760,000
Revaluation of Investment Property - -
Closing Balance
(170,000) 340,000
3,930,000 4,100,000

The investment properties comprise the clubhouse and levels one and two of the golf barn building.

The ground floor of the golf barn building is classified as property, plant and equipment - see note 8. Page 14
The investment properties were valued at 31 March 2018 by Colliers International Valuation (ChCh) Limited,
independent registered valuers. The valuations have been undertaken in accordance with International Valuation
Standards 2017, Property Institute of New Zealand NZVTIP2 - Valuations for use in New Zealand Financial Reports,
the NZICA , NZ IAS 16: Property, Plant and Equipment. NZ IAS 40: Investment Property and NZ IFRS 13: Fair Value
Measurement.

Clearwater Golf Club Limited
Consolidated Notes to the Financial Statements (Continued)
For the Year Ended 31 March 2018

7. Investment Property (continued)
Valuations are determined by reference to observable market data such as sales of properties in the same location
and condition and with similar lease profiles. The capitalisation approach uses market rentals and capitalisation rates.
The inputs are considered to be Level 2 in hierarchy. Investment property is classified as level 3 in the fair value hierarchy.

The investment properties have been valued using the Market Income approach.
The value of the clubhouse was established at $3,080,000 (2017: $3,230,000) and the value of levels one and two of the golf barn
has been established as $850,000 (2017: $870,000).

Key assumptions and inputs used in measuring the fair value of the investment properties are as follows:

2018 2018 2017 2017

Clubhouse Golf Barn Clubhouse Golf Barn

Levels 1 & 2 Levels 1 & 2

Capitalisation rate 7.50% 7.00% 7.75% 7.25%

Occupancy 100% 72% 100% 72%

Contract rental $ 170,000 $ 51,400 $ 170,000 $ 76,020

Market rental for vacant areas $ 23,437 $ 21,070 $ 25,414 $ -

Yield on valuation (market rental) 7.50% 7.36% 7.76% 7.49%

8. Property, Plant and equipment

Land Non Plant and Equipment

Improve- Operational Operational equipment under

Land at ments at Buildings Buildings & Intangibles finance lease

cost cost at cost at fair value at cost at cost Total
$
$$ $ $$ $
12,436,651
Gross carrying amount 349,451

Balance at 31 March 2016 7,137,000 1,585,499 376,405 1,009,154 1,230,335 1,098,258 (5,694)
242,734
Additions 124,807 175,291 49,353 13,023,142
221,783
Transfer 2,821 (2,821)
(41,712)
Disposals (5,694) -

Revaluation 242,734 13,203,212

Balance at 31 March 2017 7,137,000 1,710,306 376,405 1,430,000 1,271,173 1,098,258

Additions - - 221,783

Transfer --

Disposals (41,712)

Revaluation -

Balance at 31 March 2018 7,137,000 1,710,306 376,405 1,430,000 1,451,243 1,098,258

Accumulated depreciation/amortisation - 965,687 85,726 - 1,087,271 497,577 2,636,261
Balance at 31 March 2016 - (6,033) (6,033)
Disposals - 52,267 - 31,829 171,690
Depreciation and amortisation expense 1,017,954 85,726 - 87,594 529,406
Balance at 31 March 2017 - 1,168,832 2,801,918
Disposals 50,534 - 46,388 (27,275)
Depreciation and amortisation expense 1,068,489 85,726 (27,275) 575,794 176,512
Balance at 31 March 2018 - 79,590
- 1,221,147 2,951,155

Net Book Value

As at 31 March 2016 7,137,000 619,812 290,679 1,009,154 143,064 600,681 9,800,390

As at 31 March 2017 7,137,000 692,352 290,679 1,430,000 102,341 568,852 10,221,224

As at 31 March 2018 7,137,000 641,817 290,679 1,430,000 230,096 522,464 10,252,056

Encumbrances

The Company has entered into an agreement with Clearwater Land Holdings Limited ("CLHL"), which allows CLHL to encumber

golf course land to facilitate future development of Clearwater Resort as a whole.

The Company has entered secured outstanding finance lease agreements for equipment totalling $447,527.

The outstanding balance of the finance lease agreement as at 31 March 2018 was $203,209.

Page 15

Clearwater Golf Club Limited
Consolidated Notes to the Financial Statements (Continued)
For the Year Ended 31 March 2018

8. Property, Plant and equipment (continued)

Independent Valuation
The original carrying value of property, plant and equipment was supported by an independent valuation of the golf course
land of $9,800,000 by CB Richard Ellis Limited dated 28 July 2003. No subsequent valuation of the golf course has been performed with
the transition to NZ IFRS.

The non operational buildings carried at fair value, being the members lounge was revalued at 31 March 2018 by Colliers International
Valuation (Chch) Limited, independent registered valuers. The valuation has been undertaken in accordance with
International Valuation Standards 2013, the Australia and New Zealand Valuation and Property Standards and in
accordance with the provisions of NZ IAS 16: Property, Plant and Equipment and NZ IFRS 13: Fair Value Measurement.

Valuations are determined by reference to observable market data such as sales of properties in the same location
and condition and with similar lease profiles. The capitalisation approach uses market rentals and capitalisation rates.
The inputs are considered to be Level 2 in hierarchy. Building valuations are classified as level 3 hierarchy.
The value of the Members Lounge was established at $1,430,000 (2017 : $1,430,000)

Key assumptions and inputs used in measuring the fair value of the buildings at 31 March 2018 are as follows:

Capitalisation rate 2018 2017
Occupancy Members Lounge Members Lounge
Contract rental
Market rental for vacant areas 7.25% 7.25%
Yield on valuation (market rental) 0% 0%

$- $-
$ 156,100 $ 156,100

6.98% 6.98%

9. Accounts Receivable 31 March 31 March
2018 2017
$ $

Total accounts receivable 179,859 102,585
Less: Allowance for doubtful debts - (9,518)
Accounts receivable 93,067
179,859

Included in the Group's accounts receivable balance are debtors with a carrying value of $296 (2017: $46,995) which
are past due at the reporting date. The Group still considered receivables to be recoverable and the Constitution allows for the sale of
membership shares to settle unpaid subscription fees.

Aging of past due but not impaired 31 March 31 March
2018 2017
30-60 days $ $
60 + days 296
- 4,035
296 42,960
46,995

Page 16

Clearwater Golf Club Limited
Notes to the Consolidated Financial Statements (Continued)
For the Year Ended 31 March 2018

Accounts Receivable (continued)

9. In determining the recoverability of trade receivables, the Group considers any change in the credit quality of
the trade receivable from the date credit was initially granted up to the reporting date.
Accordingly the Directors believe that there is no further credit provision required in excess of the
allowance for doubtful debts.
The carrying value of the accounts receivable approximates their fair values at each reporting date.

Information about major customers

There were no customers who individually comprised 10 per cent or more of total revenue during the period (2017: Nil)

10. Finance Leases
Finance leases have been entered into which are secured over the relevant golf course plant and equipment. Repayments
are monthly at a weighted average interest rate of 2.01% (31 March 2017: 4.01%).

Minimum future lease Present value of minimum

payments future lease payments

2018 2017 2018 2017

$$ $ $

No later than 1 year 100,485 84,713 99,500 81,055

Later than 1 year and no later than 5 years 102,724 95,115 101,619 83,712

Later than 5 years -- - -

Minimum lease payments 203,209 179,828 201,119 164,767

Less future finance charges - (5,078)
Minimum lease payments 203,209 174,750

Included in the financial statements as:

Current portion 100,485 81,055

Non-current portion 102,724 93,695
203,209 174,750

11. Operating Leases

(a) Leasing Arrangements

Operating leases relate to golf carts with a lease term of 4 years. The Group does not have an option to purchase the

leased asset at the expiry of the lease period.

(b) Non-cancellable operating lease payments 31 March 31 March
2018 2017
Not longer than one year $ $
Longer than 1 year and not longer than 5 years
Longer than 5 years 66,554 57,924
Total operating lease commitments 119,375 80,328
No liabilities have been recognised in respect of the non-cancellable operating leases.
- -
185,928 138,253

Related Parties
12. (a) Transactions with related parties

Honorary Members have the same rights, privileges and restrictions as Individual Membership Shareholders with the
following exceptions:
- they are not required to pay annual subscription fees;
- they do not hold a Membership Share; and
- their rights are not transferable.
Clearwater Golf's constitution provides that there will be no more than 15 Honorary Members at any time. At present there
are two Honorary Members.

Page 17

Clearwater Golf Club Limited
Notes to the Consolidated Financial Statements (Continued)
For the Year Ended 31 March 2018

Related Parties (continued)
12. (b) Directors & Office holders

Clearwater Golf Club Ltd contracts to provide or receive goods and services with directors and office holders, or their external
companies in the normal course of its business. All transactions are conducted at the normal commercial rates and without
preference. These include annual golf subscriptions, lawn and other maintenance services.

(b) Key Management Personnel Compensation 2018 2017
Key management personnel consists of senior management and the Directors. $ $
The remuneration of key management during the period was as follows:

Short term benefits 120,000 120,000
120,000 120,000

The remuneration of key management is determined by the Board of Directors having regard to the performance of
individuals and market trends.

13. Borrowings - BNZ 31 March 31 March
2018 2017
$ $

Loan from Bank of New Zealand (BNZ) 3,500,000 3,045,000
Less amount classified as current (100,000) (150,000)
Total non-current borrowings 3,400,000 3,195,000

Maturity profile of non-current borrowings payable:
The interest rates applicable to borrowings at 31 March 2018 is 5.07% (2017: 5.83%).

The BNZ facility is pursuant to a loan facility master agreement dated 16 August 2017, repayable 28 January 2021.
Security provided to the bank comprises the ordinary shares in the Company, mortgages over the various properties owned by the
Company together with their chattels, fixtures and fittings, and mortgages over all the plant and equipment owned by the
Company (other than secured by finance lease - see note 10).

Pursuant to the BNZ bank loan agreement, Clearwater Golf Club Limited is required to operate within defined covenants. Page 18
The covenants are:

(a) Financial
- An undertaking not to change ownership or key management without the prior written consent of the Bank
- A cash deficit recorded during any year end results to be an event of review
- An undertaking by the board to manage a net cash positive position on an annual basis
- In the event that 38 Clearwater Avenue is sold , the club is to repay term debt held with BNZ by an amount equal to 75% of the
sale proceeds
- Should sale of any other land or buildings which from part of BNZ's security take place, 60% of the proceeds will be
used in BNZ term debt reduction.

(b) Reporting
- 6 monthly Management Accounts to be provided within 45 days of period end
- Annual Financial Accounts are to be provided within 120 days of annual reporting
- Annual Budget to be provided by 31st March annually
The Group has complied with all of their requirements during the reporting period and at the period end.
The carrying value of these borrowings approximate their fair value at each reporting date.

Clearwater Golf Club Limited
Notes to the Consolidated Financial Statements (Continued)
For the Year Ended 31 March 2018

Financial Instruments
14. (a) Categories of financial instruments

The Group manages its capital to ensure that it will be able to continue as a going concern while maximising the return to
stakeholders through the optimisation of the debt and equity balance. The Group's strategy remains unchanged from 2017.

The capital structure of the Group consists of cash and cash equivalents, borrowings and equity, comprising issued
capital, membership shares and accumulated losses.

The Group's activities expose it primarily to the financial risks of changes in interest rates, due to the finance leases and
loans it has entered into and its bank borrowings. The way in which the risk is managed is described below.

The Club's constitution entitles the Board of Directors to set subscription fees and special levies at a level to cover the estimated
operating expenses and operating cash flows of the Club, including any previous shortfalls to ensure the validity of the
going concern assumption.

(b) Financial risk management objectives
The Directors manage the financial risks relating to the operations of the Group. These risks include market risk, credit risk,
and liquidity risk.

Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
Group. To the extent the Group has a receivable from another party there is a credit risk in the event of non-performance
by that counter-party. Financial instruments which potentially subject the Group to credit risk principally consist of the bank
balance and receivables. The Group has a credit policy which is used to manage its exposure to credit risk from third
party receivables. The maximum exposure to credit risk is the amount shown in the consolidated statement of financial position.
No collateral is held on any of these amounts.

Liquidity Risk
Ultimate responsibility for liquidity risk management rests with the Board of Directors, who have built an appropriate
liquidity risk management framework for the management of the Group's short, medium and long-term funding and liquidity
management requirements. The Group manages liquidity risk by maintaining adequate reserves, banking facilities and by
continuously monitoring forecast and actual cash flows.

The Club's constitution entitles the Board to set subscription fees and special levies at a level to cover the estimated
operating expenses and operating cash flows of the Club, including any previous shortfalls.

The Directors consider that the carrying amount of all financial assets and financial liabilities recorded in the Consolidated Financial
Statements approximates their fair values. In addition, when comparing rates applying to finance lease liabilities with
market rates, finance lease liabilities are considered to approximate to fair value.

(c) Interest rate risk
The Group is exposed to interest rate risk on bank loans (refer Note 13 ). The risk is regularly reviewed to determine
if any interest rate swap should be entered into to protect future cash flows and profit levels. No such instruments have
been entered into at each reporting date (2017: Nil).

A 1% increase in interest rates would result in an increase in interest expense of $36,747 for the year to 31 March 2018
(2017: $35,197).
A 1% decrease in interest rates would result in a decrease in interest expense of $36,747 for the year to 31 March 2018
(2017: $35,197).

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Clearwater Golf Club Limited
Notes to the Consolidated Financial Statements (Continued)
For the Year Ended 31 March 2018
15. Commitments for Expenditure, Contingent Liabilities and Contingent Assets

Finance liabilities and non-cancellable operating lease commitments are disclosed in Notes 10 and 11 to the consolidated financial statements.

The Company is party to a Post Settlement Deed dated 8 September 2003 with Clearwater Land Holdings Limited ("CLHL").
The purpose of the deed is to facilitate further development of Clearwater Resort as a whole and allows for CLHL to alter
land boundaries, swap small pieces of land and encumber land for security purposes on the Company's behalf, as long as
it does not materially adversely affect the Company.

There have been charges given over the assets or the undertakings of the Group in the year to 31 March 2017 and 2018.
For more details refer to Note 13.

16. Reconciliation of Net Profit for the Year with Net Cash Flow from Operating Activities

31 March 31 March

2018 2017

$$

Profit for the Year (152,484) 590,282

Add non-cash items: 176,512 171,690
Depreciation & Amortisation

Gain on disposal of property, plant and equipment (30,273) (6,034)

Revaluation of Investment Property 170,000 (340,000)

Revaluation of Property, Plant and Equipment - (242,734)

release of Mahar trust (10,000) -

Movement in working capital: (86,792) 18,773
(Increase)/Decrease in accounts receivable

(Increase)/Decrease in inventories (2,964) (11,686)

Decrease / (increase) in prepayments and other receivables 52,455 17,267

Increase/(decrease) in accounts payable (34,007) (77,888)

Increase / (decrease) in revenue received in advance (114,518) 32,224

Increase / (decrease) in accrued expenses and other liabilities (58,504) 42,237

Increase/(decrease) in employee entitlements (2,985) (18,177)
Net cash flows from operating activities (93,560) 175,954

17 Reconciliation of liabilities arising from financing activities.
The changes in the Company's liabilities arising from financing activities can be classified as follows:

Long-term Short-term Lease Total
Borrowings Borrowings Liabilities

1-Apr-17 250,000 3,045,000 174,750 3,469,750
Cash flows: (2,945,000)
-Repayments (150,000) (123,953) (3,218,953)
-Proceeds 3,400,000 152,411 3,552,411
Non-cash:
-Acquisition (10,000) 100,000 203,208 (10,000)
-Fair value 3,490,000 3,793,208
-Reclassification

31-Mar-18

1-Apr-16 3,045,000 271,554 3,316,554
3,045,000 (96,804)
Cash flows: (96,804)
250,000
-Repayments

-Proceeds 250,000

Non-cash:

-Acquisition

-Fair value

-Reclassification

31-Mar-17 250,000 174,750 3,469,750 Page 20

Clearwater Golf Club Limited

Notes to the Consolidated Financial Statements (Continued)

For the Year Ended 31 March 2018

18 Investment in Subsidiary
The Company owns 100% (2017: 100%) of the ordinary shares in Clearwater Sales Limited.
Clearwater Sales Limited has a 31 December balance date and operates solely within New Zealand but its financial statements to
31 March have been consolidated into the consolidated financial statements.

19 Subsequent events
The Company undertook a buyback of membership share by ballot which resulted in a net decrease in membership
for the year commencing 1 April 2018 ( settled 14 April 2018) with a financial impact for 2018/19 of $62,000.
The Company is undertaking a full constitutional review which will be subject to a vote prior to 31 March 2019.

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