AUSTRALIAN KARTING ASSOCIATION LTD

ABN 97 160 100 265

FINANCIAL REPORT FOR THE PERIOD FROM INCORPORATION BEING 28 AUGUST 2012 TO THE FINANCIAL YEAR ENDED 31 DECEMBER 2013 AUSTRALIAN KARTING ASSOCIATION LTD ABN 97 160 100 265

DIRECTORS' REPORT

Your directors present this report on the company for the financial period ended 31 December 2013.

Directors The names of each person who has been a director during the period and to the date of this report are: MS Doohan Appointed 24 January 2013 BJ Collins Appointed 24 January 2013 PA Smith Appointed 24 January 2013 SE Moreton Appointed 24 January 2013 MK Holzberger Appointed 24 January 2013 C Denton Appointed 15 December 2013 - effective from 01 January 2014 P O'Neill Appointed 28 August 2012, ceased 05 June 2013 D Kissock Appointed 28 August 2012, ceased 24 January 2013 J McCleverty Appointed 28 August 2012, ceased 24 January 2013

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

Company Secretary The names of each person who has held the position of company secretary during the period and to the date of this report are: RE Mallett Appointed 05 June 2013 S King Appointed 28 August 2012, ceased 05 June 2013

Meetings of Directors Since incorporation, 12 meetings of directors were held. Attendances by each director were as follows: Director Number attended Number eligible to attend MS Doohan 11 11 BJ Collins 11 11 PA Smith 9 11 SE Moreton 10 11 MK Holzberger 11 11 C Denton 1 1 P O'Neill 1 2 D Kissock 1 1 J McCleverty 1 1

Operating Result The profit of the company amounted to $1,994. The company is exempt from income tax.

Principal Activities (Our Mission) To lead, govern, promote and grow the sport of sprint in .

The success of the company will ultimately be judged on our ability to grow, foster and encourage participation in karting and make the karting experience clearer, fairer and fun.

To have young members to aspire to leadership in the sport.

For the sport to become a feeder for elite in Australia

AKA will be the springboard for motorsport in Australia by encouraging a broad base of participation and competition in karting with clear pathways to the top level in motorsport.

Page 2 AUSTRALIAN KARTING ASSOCIATION LTD ABN 97 160 100 265

DIRECTORS' REPORT

Guiding Principles The Australian Karting Association Ltd (AKA) is the governing body for the sport of Karting in Australia.

The power and authority to organise and control the sport within Australia has been delegated to AKA by the FIA) through the Confederation of Australian Motorsport (CAMS).

The Board of AKA have as our broad based objectives to encourage competition from a young age at appropriate levels, to develop excellence and to increase participation in the sport of Karting.

The Board of AKA hold as an imperative that our sporting competitions should be fun, fair, well run, and provide the best value for money that is achievable, in a quality environment where people can participate for the simple enjoyment of sport and to be able to strive for success at elite levels.

Sound principles of Board governance, administrative responsibility, decision making for a fit and proper purpose at National, State and Club levels, respectful, fairness and transparency in officiating and the conduct of the sport at all levels are matters that should not be taken lightly as to do so will alienate those who have a right and a desire to compete in Karting on a level playing field.

At all times the sport of Karting should have as its primary objective the achievement of the following functions and responsibilities:

ā Increased participation in the sport through the development and implementation of proactive sport, club, community and member development programs;

ā Implement a deliberate strategy to develop a consistent national regulatory regime across all areas of activity which facilitates participation in any state without any additional requirements;

ā   ( V W D E O L V K  D Q G  I R V W H U  S D U W Q H U V K L S V  Z L W K  N H \  V W D N H K R O G H U V  I R U  W K H  E H W W H U P H Q W  R I  W K H  V S R U W  R I  . D U W L Q J 

ā Focus on increasing equity and diversity within the sport and organisation, including but not limited to youth, women, disabled, indigenous and culturally diverse groups;

ā Contribute to the development of a National Infrastructure and Facilities Strategy to ensure the sport has access to facilities and venues of an appropriate standard into the future;

ā Proactively engage with and contribute to the aims and objectives of the AKA as contained within the AKA Corporate Plan.

Member's Guarantee The company is incorporated under the Corporations Act 2001 and is an entity limited by guarantee. If the company is wound up, the constitution states that each ordinary member is required to contribute a maximum of $20 each towards meeting any outstanding obligations of the company. At 31 December 2013, the total amount that the members of the company are liable to contribute if the company is wound up is $140.

Auditor's Independence Declaration The Independence Declaration for the period ended 31 December 2013 has been received and can be

Page 3 AUSTRALIAN KARTING ASSOCIATION LTD ABN 97 160 100 265

DIRECTORS' REPORT

Information on Directors MS Doohan Special Responsibilities: Chairman & Competition Director Experience: Australian Formula 1 Grand Prix Board, GM Honda Racing Corporation (6 years), Advisory Board DORNA (8 years) & Sole Director - The Doohan Group.

BJ Collins Special Responsibilities: Technical Director Experience: Mechanical Trade Operations Manager FPR V8SC Technical Advisory Panel (2007 - 14), Engine Development Specialist, & Committee Member of Melton Central Football Club.

PA Smith Qualifications: Bachelor of Business (Economics & Marketing), MBA Special Responsibilities: Finance Director Experience: Board Australian Red Cross & Member Australian Institute of Bankers.

SE Moreton Qualifications: Bachelor of Arts (Hons), LLB (UNSW) Special Responsibilities: Marketing Director Experience: Corporate Affairs - Campbell Page, Board member Government Relations Australia Advisory Pty Ltd (Clemenger Group), & Chief of Staff Minister for Roads, Commerce & Transport.

MK Holzberger Qualifications: Graduate Diploma in Legal Practice, Bachelor of Arts, Bachelor of Laws, Diploma in International Nuclear Law, Master of Laws, Company Directors Diploma Special Responsibilities: Administration Director Experience: ARPANSA Radiation Health and Safety Advisory Council, 2006 Telstra Young Business Women's Award (SA) & Australian New Zealand Sports Law Association.

C Denton Qualifications: Electronics Technician Special Responsibilities: Operations Director Experience: President Australian Karting Association Inc, CIK FIA Delegate for Australia & Chairman Monarto Karting Complex.

Page 4 AUSTRALIAN KARTING ASSOCIATION LTD ABN 97 160 100 265

DIRECTORS' REPORT

The financial report was authorised for issue by the directors on the same date as this report.

Signed in accordance with a resolution of the directors.

______MS Doohan Director

______PA Smith Director

Dated this 10th day of April 2014

Page 5 THE DIRECTORS AUSTRALIAN KARTING ASSOCIATION LTD 12 MACQUARIE AVENUE PENRITH NSW 2750

Dear Directors

CORPORATIONS ACT 2001

I declare that, to the best of my knowledge and belief, during the period ended 31 December 2013 there have been: i. no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and ii. no contraventions of any applicable code of professional conduct in relation to the audit.

CORPORATE AUDIT AND ASSURANCE SERVICES

IAN W BARFOOT REGISTERED COMPANY AUDITOR

Dated this 10th day of April 2014 Ashmore, Queensland

Page 6 AUSTRALIAN KARTING ASSOCIATION LTD ABN 97 160 100 265

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE PERIOD ENDED 31 DECEMBER 2013

Note 2013 $ REVENUE & EXPENSES Operations revenue 3 468,410 Other revenue 3 3,500 Depreciation of property, plant and equipment 4 (33,808) Employee expenses 4 (112,089) Finance costs 4 (3,203) Operations expenses 4 (320,816) 6 X U S O X V ? ' H I L F L W  E H I R U H  L Q F R P H  W D [  H [ S H Q V H 1,994 Income tax expense 1d 0 7 R W D O  6 X U S O X V ? ' H I L F L W  I R U  W K H  S H U L R G 1,994

OTHER COMPREHENSIVE INCOME Contributions 3 1,242,736 Total Other Comprehensive Income for the period 1,242,736

TOTAL COMPREHENSIVE INCOME 1,244,730

AUSTRALIAN KARTING ASSOCIATION LTD ABN 97 160 100 265

STATEMENT OF CHANGES IN MEMBERS' FUNDS FOR THE PERIOD ENDED 31 DECEMBER 2013

Note 2013 $ MEMBERS' FUNDS RETAINED SURPLUS Balance at the beginning of the financial period 0 Surplus/(Deficit) for the period 1,994 Other comprehensive income for the period 1,242,736 Balance at the end of the financial period 1,244,730

The notes to the accounts are an integral part of these financial statements. Page 7 AUSTRALIAN KARTING ASSOCIATION LTD ABN 97 160 100 265

STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2013

Note 2013 $ ASSETS CURRENT ASSETS Cash and Cash Equivalents 5 987,281 Trade and Other Receivables 6 153,670 Inventories 7 41,719 Other Assets 8 14,634 Total Current Assets 1,197,304

NON-CURRENT ASSETS Trade and Other Receivables 6 150,348 Property, Plant and Equipment 9 68,435 Total Non-Current Assets 218,783

TOTAL ASSETS 1,416,087

LIABILITIES CURRENT LIABILITIES Trade and Other Payables 10 96,029 Borrowings 11 50,646 Total Current Liabilities 146,675

NON-CURRENT LIABILITIES Long-term Provisions 12 24,682 Total Non-Current Liabilities 24,682

TOTAL LIABILITIES 171,357

NET ASSETS 1,244,730

MEMBERS' FUNDS Retained Surplus 1,244,730

TOTAL MEMBERS' FUNDS 1,244,730

The notes to the accounts are an integral part of these financial statements. Page 8 AUSTRALIAN KARTING ASSOCIATION LTD ABN 97 160 100 265

STATEMENT OF CASH FLOWS FOR THE PERIOD ENDED 31 DECEMBER 2013

Note 2013 $ CASH FLOW FROM OPERATING ACTIVITIES Receipts from members & others 348,249 Interest received 1,650 Payments to suppliers & employees (420,206) Finance costs (3,203) Net cash generated from (used in) operating activities 2b (73,510)

Net increase (decrease) in cash held (73,510) Cash contribution from Australian Karting Association Inc 1,060,791 Cash at the beginning of the financial period 0 CASH AT THE END OF THE FINANCIAL PERIOD 2a 987,281

The notes to the accounts are an integral part of these financial statements. Page 9 AUSTRALIAN KARTING ASSOCIATION LTD ABN 97 160 100 265

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The financial report is for Australian Karting Association Ltd as an individual entity, incorporated under the Corporations Act 2001 and domiciled in Australia. Australian Karting Association Ltd is a company limited by guarantee.

Basis of Preparation Australian Karting Association Ltd has elected to early adopt the Australian Accounting Standards Reduced Disclosure Requirements as set out in AASB 1053: Application of Tiers of Australian Accounting Standards and AASB Amendments to Australian Accounting Standards arising from Reduced Disclosure Requirements. Accordingly, the entity has also early adopted AASB Amendments to Australian Accounting Standards arising from the Trans-Tasman Convergence Project Reduced Disclosure Requirements and AASB Amendments to Australian Accounting Standards arising from Reduced Disclosure Requirements in respect of AASB Amendments to Australian Accounting Standards Disclosures on Transfers of Financial Assets and AASB Amendments to Australian Accounting Standards Presentation of Items of Other Comprehensive Income.

The financial statements are general purpose financial statements that have been prepared in accordance with Australian Accounting Standards Reduced Disclosure Requirements of the Australian Accounting Standards Board (AASB) and the Corporations Act 2001. The company is a not-for-profit entity for financial reporting purposes under Australian Accounting Standards.

Australian Accounting Standards set out accounting policies that the AASB has concluded would result in financial statements containing relevant and reliable information about transactions, events and conditions. Material accounting policies adopted in the preparation of these financial statements are presented below and have been consistently applied unless stated otherwise.

The financial statements, except for the cash flow information, have been prepared on an accruals basis and are based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities. The amounts presented in the financial statements have been rounded to the nearest dollar.

Accounting Policies a. Critical Accounting Estimates and Judgments The directors evaluate estimates and judgments incorporated into the financial statements based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the company. b. Comparative Figures The company was incorporated on 28 August 2012 and commenced operations on 01 September 2013. Accordingly, the financial report discloses the transactions from 01 September 2013 to 31 December 2013, a period of four (4) months. c. Goods and Services Tax (GST) Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Taxation Office (ATO). Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the ATO is included with other receivables or payables in the Statement of Financial Position.

Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to, the ATO are presented as operating cash flows included in receipts from customers or payments to suppliers.

Page 10 AUSTRALIAN KARTING ASSOCIATION LTD ABN 97 160 100 265

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES d. Income Tax No provision for income tax has been raised as the company has self-assessed that it is exempt from income tax under Section 50-45 of the Income Tax Assessment Act 1997. e. Revenue Revenue from the sale of goods is recognised upon the delivery of goods to customers.

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

Interest revenue is recognised using the effective interest method, which for floating rate financial assets is the rate inherent in the instrument. Dividend revenue is recognised when the right to receive a dividend has been established.

All revenue is stated net of the amount of goods and services tax (GST). f. Leases Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are recognised as expenses. As at 31 December 2013, all operating leases were on a month-to-month basis. g. Cash and Cash Equivalents Cash and cash equivalents include cash on hand and deposits held at call with banks. h. Inventories Inventories are measured at the lower of cost and current replacement cost. Inventories acquired at no cost, or for nominal consideration, are valued at the current replacement cost as at the date of acquisition. i. Plant and Equipment Plant and equipment is measured on the cost basis and is therefore carried at cost less accumulated depreciation and any accumulated impairment losses. In the event the carrying amount of plant and equipment is greater than its estimated recoverable amount, the carrying amount is written down immediately to its estimated recoverable amount and impairment losses are recognised either in profit or loss or as a revaluation decrease if the impairment losses relate to a revalued asset. A formal assessment of recoverable amount is made when impairment indicators are present (refer to Note 1(n) for details of impairment).

Plant and equipment that have been contributed at no cost, or for nominal cost are valued at the fair value of the asset at the date it is acquired.

Revaluations There has been no revaluation of plant and equipment since the incorporation of the company.

Depreciation The depreciable amount of plant and equipment is depreciated on a straight line basis over the useful life to the company commencing from the time the asset is held ready for use. The depreciation rates used for each class of depreciable assets are:

Class of Fixed Asset Depreciation Rate Plant & equipment 0.00% to 66.66%

The residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

Page 11 AUSTRALIAN KARTING ASSOCIATION LTD ABN 97 160 100 265

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains or losses are included in the Statement of Profit or Loss and Other Comprehensive Income. When revalued assets are sold, amounts included in the revaluation reserve relating to that asset are transferred to retained surplus. j. Provisions Provisions are recognised when the company has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured. Provisions recognised represent the best estimate of the amounts required to settle the obligation at the end of the reporting period. k. Employee Benefits Provision is made for the liability for employee benefits arising from services rendered by employees to the end of the reporting period. Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled. Employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits. In determining the liability, consideration is given to employee wage increases and the probability that the employee may not satisfy vesting requirements. Those cash outflows are discounted using market yields on national government bonds with terms to maturity that match the expected timing of cash flows. l. Trade and Other Payables Trade and other payables represent the liabilities for goods and services received by the company during the reporting period that remain unpaid at the end of the reporting period. The balance is recognised as a current liability with the amounts normally paid within 30 days of recognition of the liability. m. Financial Instruments Initial recognition and measurement Financial assets and financial liabilities are recognised when the company becomes a party to the contractual provisions to the instrument. For financial assets, this is equivalent to the date that the company commits itself to either purchase or sell the asset (i.e. trade date accounting is adopted). Financial instruments are initially measured at fair value plus transactions costs except where the instrument is classified fair value through profit

Classification and subsequent measurement Financial instruments are subsequently measured at fair value, amortised cost using the effective interest method, or cost. Where available, quoted prices in an active market are used to determine fair value. In other circumstances, valuation techniques are adopted. Fair value is determined based on current bid prices for all quoted investments.

Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are subsequently measured at amortised cost. Gains or losses are recognised in profit or loss through the amortisation process and when the financial asset is derecognised.

Impairment At the end of each reporting period, the company assesses whether there is objective evidence that a financial asset has been impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence that impairment as a result of one or more events (a has occurred, which has an impact on the estimated future cash flows of the financial asset(s).

Page 12 AUSTRALIAN KARTING ASSOCIATION LTD ABN 97 160 100 265

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES n. Impairment of Assets At the end of each reporting period, the company assesses whether there is any indication that an asset may be impaired. If such an indication exists, an impairment test is carried out on the asset by comparing the recoverable amount of the asset, being the higher of the fair value less costs to sell and value in use, to the carrying amount. Any excess of the carrying amount over its recoverable amount is recognised immediately in profit or loss, unless the asset is carried at a revalued amount in accordance with another Standard (e.g. in accordance with the revaluation model in AASB 116). Any impairment loss of a revalued asset is treated as a revaluation decrease in accordance with that other Standard.

Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Note 2013 $ NOTE 2: CASH FLOW INFORMATION a. Reconciliation of Cash Cash at bank 987,081 Cash on hand 200 Cash at the end of the financial period 987,281 b. Reconciliation of Cashflow from Operations with 6 X U S O X V ? ' H I L F L W  D I W H U  , Q F R P H  7 D [ 6 X U S O X V ? ' H I L F L W  I R U  W K H  S H U L R G 1,994 Non cash flows Depreciation 33,808 Changes in assets and liabilities: (Increase)/Decrease in trade and other receivables (153,670) (Increase)/Decrease in inventories (41,719) (Increase)/Decrease in other assets (14,634) Increase/(Decrease) in trade and other payables 96,029 Increase/(Decrease) in provisions 24,682 Net cash generated from (used in) operating activities (53,510) c. Credit Stand-by Arrangement and Loan Facilities The company has the following facilities available to it from the Commonwealth Bank of Australia:

A credit card facility of $25,000. The amount availalble to be called upon as at 31 December 2013 was $21,870. d. Non-Cash Financing and Investing Activities There was no non-cash financing or investing activities during the period.

Page 13 AUSTRALIAN KARTING ASSOCIATION LTD ABN 97 160 100 265

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013

Note 2013 $ NOTE 3: REVENUE Operations revenue Advertising 7,100 CIK national series 19,391 Freight 753 Levies & fees 42,169 Licence fees 299,393 Royalty - mufflers / airbox 2,359 Royalty - tyres 83,759 Sales 12,831 Sundry 655 Total operations revenue 468,410

Other revenue Insurance recoveries 1,850 Interest received from other persons 1,650 Total other revenue 3,500

Contributions Net assets contributed by Australian Karting Association Inc 1,242,736 Total Contributions 1,242,736

NOTE 4: EXPENSES Depreciation of property, plant and equipment 33,808 Employee expenses 112,089 Finance costs 3,203

Operations expenses Accountancy fees 5,750 Advertising & promotion 1,470 Audit fees 3,000 Bank fees & charges 626 CIK national series 21,127 Computer expenses 5,909 Consultancy services 6,500 FIA & CIK expenses 2,873 Government charges 1,272 Insurance 182,769 Legal fees 11,152 Office expenses 17,666 Officials training schools 9,469 Other expenses 1,227 Printing, postage & stationery 5,268 Purchases for resale 12,172 Smart card expenses 7,950 Telephone 5,671 Travel, accommodation & conference 18,945 Total operations expenses 320,816

Page 14 AUSTRALIAN KARTING ASSOCIATION LTD ABN 97 160 100 265

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013

Note 2013 $ NOTE 5: CASH AND CASH EQUIVALENTS Cash at bank 987,081 Cash on hand 200 Total Cash and Cash Equivalents 987,281

NOTE 6: TRADE AND OTHER RECEIVABLES Current Trade receivables 152,397 Other receivables 1,273 Total Current Trade and Other Receivables 153,670

Non-Current Loans to related entities 6a 150,348 Total Non-Current Trade and Other Receivables 150,348

Total Trade and Other Receivables 304,018 a. The loan receivable is from a Trust Fund related to Australian Karting Association Inc and is secured by the real property at 12 Macquarie Avenue, Penrith, .

NOTE 7: INVENTORIES Finished Goods at Cost Stock for sale 41,719 Total Inventories 41,719

NOTE 8: OTHER ASSETS Prepayments 14,634 Total Other Current Assets 14,634

NOTE 9: PROPERTY, PLANT AND EQUIPMENT Plant & equipment 102,243 Less accumulated depreciation (33,808) Total Property, Plant and Equipment 68,435

Movements in Carrying Amounts Movements in the carrying amounts for each class of property, plant and equipment between the beginning and the end of the current financial period, are presented as follows:

Plant & equipment Additions 9a 102,243 Depreciation expense (33,808) Carrying amount at the end of period 68,435 a. The additions were received from the Australian Karting Association Inc that is in the process of being wound up. The amount received was recognised at the 'closing written down value' as recorded in the books of the Australian Karting Association Inc as at 31 August 2013.

Page 15 AUSTRALIAN KARTING ASSOCIATION LTD ABN 97 160 100 265

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013

Note 2013 $ NOTE 10: TRADE AND OTHER PAYABLES Trade payables 11,001 GST payable 19,080 PAYG payable 6,259 Superannuation payable 1,400 Income in advance 5,000 Employee benefits 13,830 Employee on-costs 1,279 Accrued expenses 38,180 Total Trade and Other Payables 96,029 a. Financial Liabilities within Trade and Other Payables Trade and other payables 96,029 Less payables that are non interest bearing (46,848) Financial liabilities as trade and other payables 49,181

NOTE 11: BORROWINGS Current Loan from related entity 11a 47,786 Credit cards 2c 2,860 Total Current Borrowings 50,646 a. The loan payable is to the AKA Track Development Fund. The amount was recognised as a liability in this company upon receipt of the net assets of the Australian Karting Association Inc.

NOTE 12: PROVISIONS Long-term Provisions Employee benefits 12a 4,285 Bonds held in trust 12b 20,000 Employee on-costs 397 Total Long-term Provisions 24,682

Number of employees (full-time, part-time or casual) at period end 5

Movements in Provisions: Balance at the beginning of period 0 Additional provisions raised/(used) during period 24,682 Carrying amount at the end of period 24,682 a. A provision has been recognised for employee entitlements relating to long service leave. The measurement and recognition criteria relating to employee benefits have been included in Note 1k. b. The bonds held in trust relate to performance guarantees that may be claimed upon if certain events occur. It is expected that the bonds will be returned to the supplier pursuant to the terms of the agreement.

Page 16 AUSTRALIAN KARTING ASSOCIATION LTD ABN 97 160 100 265

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013

Note 2013 $ NOTE 13: COMPANY DETAILS The principal place of business and registered office of the company is: Australian Karting Association Ltd 12 Macquarie Avenue Penrith NSW 2750

NOTE 14: CAPITAL AND LEASING COMMITMENTS Finance Lease Commitments The company is not a party to any finance leases.

Operating Lease Commitments The company is not a party to any non-cancellable operating leases. The company has entered into agreements with suppliers of goods and services. Generally these agreements can be cancelled at short notice.

Capital Expenditure Commitments At the end of the financial period there were no commitments for capital expenditure.

NOTE 15: AUDITOR'S REMUNERATION Remuneration of the auditor of the company for: auditing of financial report 3,000 Total Auditor's Remuneration 3,000

NOTE 16: KEY MANAGEMENT PERSONNEL COMPENSATION Any person(s) having authority and responsibility for planning, directing and controlling the activities of the company, directly or indirectly, including any director (whether executive or otherwise) of the company is considered key management personnel (KMP).

No remuneration has been paid to KMP's who are directors during the period.

The remuneration paid to KMP's who are employees during the period has not been disclosed as it is considered commercial-in-confidence. To disclose the remuneration would be to disclose the salary paid to the Chief Executive Officer as no other employee is considered a KMP.

NOTE 17: OTHER RELATED PARTY TRANSACTIONS Other related parties include close family members of KMP and entities that are controlled or jointly controlled by those KMP individually or collectively with their close family members.

Transactions between KMP and related parties are on normal commercial terms and conditions no more favourable than those available to other persons or employees unless otherwise stated.

The company has not made any payments to close family members of KMP for goods and/or services during the period.

Page 17 AUSTRALIAN KARTING ASSOCIATION LTD ABN 97 160 100 265

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2013

Note 2013 $ NOTE 18: EVENTS AFTER THE BALANCE DATE No events have occurred subsequent to balance date which require disclosure in this report.

NOTE 19: FINANCIAL RISK MANAGEMENT The company's financial instruments consist mainly of deposits with banks, local money market instruments, short-term investments, accounts receivable and payable and loans payable.

The totals for each category of financial instruments, measured in accordance with AASB 139 as detailed in the accounting policies to these financial statements, are as follows:

Financial Assets Cash and cash equivalents 5 987,281 Total trade and other receivables 6 304,018 Total Financial Assets 1,291,299

Financial Liabilities Trade payables 10 49,181 Total borrowings 11 50,646 Total Financial Liabilities 99,827

Net Fair Values For listed available-for-sale financial assets and financial assets at fair value through profit or loss the fair values have been based on closing quoted bid prices at the end of the reporting period.

NOTE 20: CONTINGENT LIABILITIES AND ASSETS There are no contingent liabilities or assets that may become payable or receivable by the Australian Karting Association Ltd requiring disclosure in the financial report.

Page 18 AUSTRALIAN KARTING ASSOCIATION LTD ABN 97 160 100 265

DIRECTORS' DECLARATION

In accordance with a resolution of the directors of Australian Karting Association Ltd, the directors of the company declare that:

1. the financial statements and notes, comprising of Statement of Profit or Loss and Other Comprehensive Income, Statement of Changes in Members' Funds, Statement of Financial Position, Statement of Cash Flows and Notes to the Financial Statements, are in accordance with the Corporations Act 2001 and: a. comply with Australian Accounting Standards; and b. give a true and fair view of the financial position as at 31 December 2013 and of the performance for the period ended on that date of the company.

2. In the opinion there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

______MS Doohan Director

______PA Smith Director

Dated this 10th day of April 2014

Page 19 INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF AUSTRALIAN KARTING ASSOCIATION LTD ABN 97 160 100 265

Report on the Financial Report We have audited the accompanying financial report of Australian Karting Association Ltd (the company) which comprises the Statement of Financial Position as at 31 December 2013 and the Statement of Profit or Loss and Other Comprehensive Income, Statement of Changes in Members' Funds and Statement of Cash Flows for the period ended, a summary of significant accounting policies and other explanatory notes and the Directors' Declaration.

Directors' Responsibility for the Financial Report The directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards - Reduced Disclosure Requirements and the Corporations Act 2001 and for such internal control relevant as the directors determine is necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error.

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the judgment, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the preparation of the financial report that gives a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Independence In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of Australian Karting Association

Page 20 INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF AUSTRALIAN KARTING ASSOCIATION LTD ABN 97 160 100 265 (continued)

Matters Relating to the Electronic Presentation of the Audited Financial Report This audit report relates to the financial report of the Australian Karting Association Ltd for the period ended 31 December 2013 which may be included on the company's website. We have not been engaged to report on the integrity of this website. This audit report refers only to the financial report identified above. It does not provide an opinion on any other information which may have been hyperlinked to/from the financial report. If users of this report are concerned with the inherent risks arising from electronic data communications they are advised to refer to the hard copy of the audited financial report to confirm the information included in the audited financial report presented on the company's website. Opinion In our opinion, the financial report of Australian Karting Association Ltd is in accordance with the Corporations Act 2001, including:

(i) giving a true and fair view of the financial position as at 31 December 2013 and of its performance for the period ended on that date; and

(ii) complying with Australian Accounting Standards Reduced Disclosure Requirements and the Corporations Regulations 2001.

CORPORATE AUDIT AND ASSURANCE SERVICES

IAN W BARFOOT REGISTERED COMPANY AUDITOR

Dated this 10th day of April 2014 Ashmore, Queensland

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