AGM 2009 – President’s address


CHAIRMAN’S ADDRESS – HAKOAH AGM 30/3/09

Not a day goes by without numerous people asking me about the future of the Club. Well, let

me say that I am very excited about the future. The Board are heading in a certain direction

that, once revealed, everyone should find exciting. We have identified a site and the

possibilities that exist for that site are far-reaching. I am extremely confident that, once

revealed, our plans will go well and truly beyond satisfying existing members – a new breed of

member will find the reinvention of Hakoah to be highly appealing.

The only thing that I deeply regret is that I am not in a position to reveal details tonight. I

would love to tell you the location, I would love to show you a model of the plans, I would love

to highlight the features that will be contained within our new facility and I would love to show

you how it will be financially viable.

Unfortunately the Board is not yet in a position to divulge these details. The last thing that I

would ever dream of doing would be to jeopardise the deal at hand and unquestionably

negotiations are of such a sensitive nature that to blurt anything tonight would severely

jeopardise the deal. However, I do believe that we are nearing the final stages of negotiation

and I do believe that all remaining obstacles can be overcome with expert and discreet

handling.

So I stand before you tonight to ask for your ongoing patience. Please be confident that we

will “deliver” for you. I know that this is a big ask, but please bear with us as we now enter the

home stretch of our negotiations.

Once the deal is done, I will of course immediately call an information evening for the benefit

of members past, present and inevitably future. In the meantime, when it comes to question-

time, please do not ask me: “Is it this particular site or that site?” I can tell you now that I am

obliged to say “no comment” to any question about a particular site and I don’t want any

conclusions reached or rumours starting on the basis a “no comment” answer.

Contained within the Annual Report, of which you all received a copy, are numerous Reports.

Included is my President’s Report and I do not intend reading this to you tonight. Hopefully

you will have already read it and I will be delighted to answer questions at the appropriate

time.

At this point I would like to supplement my report with some facts that hopefully overcome

some of the negativity that has appeared in recent articles published within the Jewish press.

There are certain assertions that require response and it is important that you know exactly

how the Board feels:

1. Firstly let me state that work performed by the Board is done so on an entirely

voluntary basis. Highly educated and qualified members of the Board give freely

of their time. Their work, especially over the last few years, has amounted to

hundreds of thousands of dollars worth of non-charged time. I’m not asking for

gratitude – I’m just stating a fact.

2. Those people who have made public criticisms do so without knowing the full

facts therebyexhibiting total disrespect for the people best placed to make

correct decisions. When it comes to the business of Hakoah, no Member is in a

better position than members of the Board or Management. Every vital statistic

required in order to make fully informed decisions is known within our Boardroom,

certainly moreso than any member can possibly lay claim to. One particular

example that I must take to task is an insinuation that our General Manager got it

wrong when it comes to our poker machines. To start with, let me say that no one

is putting a gun to anyone’s head for anyone to play the pokies. People play of

their own choice and if they didn’t play at Hakoah I can assure you that the

revenue generated would go elsewhere. Nevertheless, let me also assure you

that the analytical capabilities that John Cormio has at his disposal are very

extensive with the relevant analysis being used carefully for the benefit of

individuals and members alike. We should all believe John Cormio when he

states that problem gambling is at an extreme low at Hakoah. When John Cormio

indicates that any problem gamblers are dealt with promptly, we should all

believe him. Once again we have every reason to believe John Cormio when he

states that the majority of our poker machine players play the machines as their

form of entertainment. And we should all be grateful that poker machine proceeds

are being distributed in accordance with CDSE requirements soundly to

communal beneficiaries who themselves are very grateful. In the past year

beneficiaries of the CDSE Program include the State Zionist Council with their

Yom Haatzmaut celebrations, participants in the March-of-the Living Program,

participants at Camp Sababba – a specially organised retreat for disabled

children within the Jewish Community, Dov’s Place Foundation – a program that

provides supported low cost accommodation for people with intellectual

disabilities, an internship at the Sydney Jewish Museum, assistance towards

employing a Diversional Therapist at the Centre on Ageing, ongoing assistance

to the Maccabi sporting movement, and the list can go on.

3. Assertions have also been made about the Club diminishing its’ capital. By

profession, I am a chartered accountant with some 30 years experience dealing

with financial statements. So let me point out to all of you exactly how I interpret

Hakoah’s current financial statements. On pages 33 and 34 of the Annual Report

you will see the detailed Profit and Loss Statement that indicates an operating

loss of $165,560. To merely accept this figure as a sign that we are “digging into

our capital” is an extremely simplistic view. There are certain non-cash expenses

that, in Hakoah’s current position should be disregarded. As an example,

depreciation of $439,134 is purely academic due to the fact that we have sold the

Hall Street premises and do not intend to replace any major equipment prior to

moving out. Furthermore provision for redundancy of $201,000 is not

representative of one-years’ trading and should also be added back to provide a

more accurate reflection of Hakoah’s trading result for the past financial year.

Once one adds-back these non-cash expenses, the SURPLUS is indeed

$524,372. The financial statements are of course prepared on an accrual basis

which far more readily represents the real situation than on a cash basis.

Nevertheless on page 28 of the annual report you will find a Statement of Cash

Flows that indicates net cash provided by operating activities of $321,337. Quite

interestingly you can see that the cash flow in 2008 is a positive $321,337

compared to a negative $272,393 in 2007. Indeed the sale of the Hall Street

premises 18 months ago did exactly what it was intended to do – it “stopped the

bleeding”.

4. The Board has, in my opinion, handled the finances of the Club in an expert

manner. The Hall Street property was sold at the peak of the property market,

money was collected up front, proceeds from the sale were invested soundly in

interest bearing deposits where interest rates were at their highest level for over a

decade …not in the stock market or in property that unquestionably have

dramatically declined since December 2007 when we received the proceeds from

the Hall Street sale. With the benefit of hindsight, how many people right here

and now can lay claim to having invested their funds as wisely as Hakoah have?

Hakoah’s wealth has increased, not declined.

5. In the Jewish Press there was an opinion expressed that Hakoah should close its

doors and commence a program of giving its’ money away. To your Board, this is

almost unfathomable and would represent a very last resort. Furthermore and

putting it very simply, to give money to the organizations as listed would be

completely and totally inappropriate. This Club was founded for the benefit of its

members initially as a football club and then as a means of providing social

interaction for the Jewish and secular communities. Founders of the Club would

roll over in their graves if we were to give our money away for the benefit of

causes that have nothing to do with the reason for formation of the Club in the

first place. I should also indicate that, by law, all Clubs are established for the

benefit of their Members and any form of revenue is derived for the purpose of

providing benefits to those Members. Bearing in mind the declining poker

machine market, your Board had to find an alternate means of generating

revenue. In the last year, over $1m revenue was raised by means of earning

interest and this revenue was used for the benefit of the Members. That is exactly

what funds generated by Hakoah are to be used for …… the benefit of the

Members. Your Board are very proud in the knowledge that they have been able

to continue to provide services of an excellent standard to the Members. Within

the current market there are many Clubs that are not trading very well at all.

Recent results of Parramatta Leagues Club (loss $7.8m), St George Leagues

Club (loss $1.2m), Easts Leagues Club (loss $780,000) and many others is

testament to just how difficult trading has become. It is common knowledge that

the Club industry are suffering severely with many Clubs either amalgamating or

going out of business. Please have a look at the screen to see a listing of the

Clubs that are not so fortunate …… this list only relates to the past 12 months.

There were others before then and in the future this list is destined to grow.

Hakoah on the other hand have been pro-active in securing their capital,

continuing to provide for the benefit of their members out of the interest earned

on the capital, and are actively seekingthe future solution that I have every

confidence will come about. The idea that the Club should give its hard-earned

money away to non-member organizations needs to be categorically squashed.

6. As far as your Board is concerned, we have been entrusted to carry on the

traditions of this great Club. It is unquestionable that the current format of the

Club is going stale and becoming unsustainable. It was with this in mind that the

Members agreed with the decision to sell the Hall Street premises 18 months

ago. The real challenge placed upon the Board at that time was to find the

answer to creating a new vibrancy that is consistent with the ethos of the Club.

This necessarily takes time and considerable effort. It doesn’t happen overnight

and I can assure you that the effort put in has been gigantic. Aside from

numerous strategic sessions, the Board have examined well over 50 different

proposals and locations. I repeat my earlier comments that your Board believe

that they have now found the solution and they are working fervently to secure

and then implement it.

7. In the meantime, and in answer to some separate assertions made in a letter to

the Jewish Press, it is important that I outline some of the current achievements

and activities of the Club. To this day, the Hakoah Club continues to be open, as

it has for over 30 years, and there continue to be two fully functioning restaurants

serving food that is of a standard better than ever, a heated indoor swimming

pool that operates in an excellent manner for all to use, there is an outstanding

gymnasium, the bridge club conducts 3 sessions per week and there are 2 major

week-long bridge tournaments conducted by the NSW Bridge Association every

year. There is ongoing cards, dance, karate, table tennis, bingo, scrabble, trivia

and big-screen sports entertainment. During the course of the past year there

have been numerous communal events including Chanukah and Purim parties.

Next week we will host over 200 persons for their Pesach Seder night. 2 shuls

operate Rosh Hashanah and Yom Kippur services with one of those shuls being

active for every Shabbat and Yom Tov during the year. Most communal

organizations do utilise Hakoah and I can advise that recently or in the immediate

future we will have hosted the UIA AGM for their women’s division, a UIA

fundraiser for their women’s division, a Clean-up-Israel fundraiser, Magen David

Adom AGM, WIZO AGM, numerous Wolper Hospital guest speakers, JNF

Federal Congress, JNF Blue Box Appeal, State Zionist Council functions

including guest speakers and a Yitzhak Rabin Memorial, March-of-the-Living

participants convened to relate their experiences, Centre on Ageing held its’

annual Chanukah party, there was a Hebrew University fundraiser, Moriah

College will be conducting a Leadership seminar, Mt Sinai College held a Trivia

Quiz, Maccabi conducts Club, State and Federal Meetings as well as

presentation evenings, Maccabiah fundraisers and the list can go on. It is very

gratifying to see some communal organizations treating Hakoah like a second

home, none moreso than Maccabi who even have their offices within the

premises. Needless to say the Goldstar and other rooms continue to be available

and used for parties of all descriptions, bar and bat mitzvahs. Shows and

entertainment continue to be planned and a show featuring Dahlia Dior and

Robert Teicher is currently scheduled to take place on 26 April. Indeed life still

goes on at Hakoah and I am very proud to Preside over this great Club that

continues to provide so professionally for its Members as well as our Community.

One thing that I am extremely happy about is Hakoah’s association with its’ foundation

purpose. I speak of course about the sport of football and the fact that the name Hakoah is

once again synonymous with quality football albeit at a level that does not represent a drain

on our finances. Last year an application was made and entry was granted into the NSW

Soccer Federation’s Youth Development League. Otherwise known as “rep football” we now

have teams playing under the Hakoah brand at Under 13, Under 14, Under 15, Under 16 and

Under 18 levels. Jon Marcuson has done an amazing job in getting this going and this will, in

due course, act as a feeder to the already existing Hakoah teams that play in the NSW

Soccer Federation’s State League 2nd Division. We are very proud of our association with

these “Hakoah” teams who represent exactly what this Club was created for – a bunch of

Jewish boys striving to be the best possible footballers.

Back to the Club premises and you will all be aware that the Board recently decided to extend

its’ lease at these Hall Street premises until 4 November 2009. I would like to publicly

acknowledge and thank our landlords, the Vidor Family of the Toga Group, for their incredible

generosity and communal spirit in all our dealings particularly as they relate to our ongoing

use of these Hall Street premises. The decision to extend our lease until 4 November 2009

was taken particularly bearing in mind that we are not quite yet in position to advise on the

future Hakoah. However I must forewarn that we are starting to push the boundaries

somewhat in terms of future financial viability at these premises. Bearing in mind the interest

that has substituted for our declining poker machine revenue will itself decline due to

decreased interest rates, certain cost-cutting will become necessary so as to ensure our

ongoing financial viability. I want to make it perfectly clear that no guarantees can be given

that there will be any further lease extensions beyond 4 November 2009.

My Chairman’s Address would not be complete without thanking some people who have been

incredible in their support. This is arguably one of the toughest times in the history of Hakoah.

But support, advice and assistance has been openly forthcoming from the highest of sources.

Of our Governors, no one could provide better Counsel than my confidant Mr Frank Lowy.

Frank your experience, wealth of knowledge, connections and friendship are something that I

cherish. I know that you see your role as that of a consultant and I’m sure that everyone will

agree that to obtain free consultancy from someone who is widely acknowledged as

Australia’s most successful businessman is invaluable. Bernie Jacoby and Andrew Kemeny

also continue as valued Governors that, whenever called upon, give of their experience

willingly and freely.

I know that I rave about them, but each and every member of the Board brings something

unique to the table. Whether it is of a legal nature particularly specialising in the club industry,

whether it be of a construction or development nature, whether it be of a finance nature,

whether it be of an accounting nature, whether it be of a marketing nature, whether it be of a

communal nature or whether it be of a general business nature, each and every member of

the Board brings dedication, expertise and cohesiveness to the table.

And finally there is management and I refer in particular to our General Manager Mr John

Cormio. In John we have a gem. No task is ever too much for him. Ever since I have known

him, John has gone over and above the boundaries of expectation. He marshals his staff as

well as our contractors firmly but fairly, establishes positive rapport with Members, provides

the Board with every possible piece of information necessary for accurate decision-making,

implements policy and still finds the extra time necessary to administer the requirements put

upon us in our quest for suitable relocation. John, your honesty, reliability and integrity are

truly appreciated.

I conclude by hoping fervently that I will soon be in position to call a special information

meeting that will elaborate fully on our future.