MTAQ 2010 Annual Report

Motor Trades Association of Queensland

Annual Report 2010

Contents 1.

President’s Report

5. Treasurer’s Report 6. Organisational Structure 8.

MTA Institute of Technology

10. Members Services and Support 14. Australian Automobile Dealers Association 16. Automotive Engineers Division 17. Automotive Parts Recyclers 18. Engine Reconditioners Association of Queensland 19. National Auto Collision Alliance 20. Queensland Farm and Industrial Machinery Dealers Division 22. Queensland Motorcycle Industry Division 23. Tyre and Undercar Division of Queensland 24. Rental Vehicle Industry Division 25. Service Station and Convenience Store Association of Queensland 27. Used Car Division 29. Financial Statements 56. Board Members 2007-2008

PresidentS Report

This is my first report as President of the Motor Trades Association of Queensland (MTA Queensland) following the retirement of former President Greg Klease after seven years of distinguished leadership. It has been a privilege to work over the past year with the MTA Queensland Board and staff, each of whom is dedicated to serving our diverse membership.

My stewardship commenced in the midst of the Global Financial Crisis (GFC). I’m pleased that this report coincides with well credentialed statements that the world’s economies are finally emerging from the shadows of the GFC.

The Economy

It is incumbent on each of us in an Executive position to be true to the constitutional objectives that underpin the establishment of the Motor Trades Association of Queensland.

David Fraser President MTA Queensland

For our Members across all twelve industry sectors comprising the automotive industry value chain we represent, the GFC legacy is likely to be a set of challenging economic conditions that include the rebuilding of inventories; adjusting to upward pressure on interest rates, tight credit availability, increasing business costs and volatile market conditions.

The automotive industry value chain, as indicated by recent Australian Bureau of Statistics and other supporting data, is slowly recovering from the GFC, having been assisted by the Federal Government’s Small Business and General Business Tax Break that operated from 1 July to 31 December 2009. Undoubtedly this was a timely measure and one that we initially sought on behalf of Members.

Compared with the economic recovery in the other States, Queensland’s economy to date has underperformed. Recent statistical data indicates that recovery in Queensland lags all other States in new vehicle, used vehicle and motorcycle sales. In fact Queensland’s automotive vehicle and motorcycle sales volume as of August 2010 on a full year basis are

below 2004 levels. These disappointing sales results for the last two years will be reflected in the performances of many businesses particularly automotive dealers for some years to come.

On the other hand, farm and industrial machinery dealers have reason to be somewhat confident with the mining sector experiencing a return to boom conditions and the agricultural sector experiencing the best season for some 15 years.

As a priority, the Association advises both the Federal and State Treasurers of the economic conditions facing the automotive industry value chain as they prepare their annual budgets. Despite submissions detailing the volatility of the conditions being experienced

by Queensland’s automotive value chain, a succession of State Budgets has subjected the motoring sector to adverse revenue raising measures.

In recent State Budgets, there have been increases to stamp duty on motor vehicle transfers, registration fees, driver’s license fees, a new fuel tax and changes to Compulsory Third Party.

These imposts mean that Queensland now has the reputation of being the most expensive state for motoring in Australia.

Our Organisation It is incumbent on each of us in an Executive position to be true to the constitutional objectives that underpin the establishment of the Motor Trades Association of Queensland: • to promote, advance and protect the interest of the motor vehicle industry and associated trades or businesses in Queensland and to conserve the interest of Members • to advocate, advance and protect the interests of employers connected with the motor vehicle industry and associated trades of businesses in Queensland Motor Trades Association of Queensland 1

President’s Report continued

• to consider and deal with any question relevant to the motor vehicle industry and associated trades or businesses • to participate in, promote and encourage all forms of education and training supportive of the development of the motor vehicle industry and associated trades of businesses in Queensland For these purposes, we are constantly adapting our communications, administrative, technical and operating systems to ensure they are conducive to delivering good outcomes for Members.

Our structure enables us to service Member’s needs by providing skilled and professional staff ranging from Member Services, Technical Services, Legal Advice and Consumer Complaint Resolution, Industrial Relations and representation and engagement across all levels of Government. Our officers and staff, support, serve and represent the 12 industry divisions and Members in the six districts with a high standard of professionalism.

There is an old saying that “information is knowledge”. Our Member Services Division is working towards increasing communication access with Members by electronic mediums to inform on industry news, policy issues, legislation requirements and corporate offers. It is important that Member details on MTA Queensland’s system are current to enable timely delivery of automotive value chain news and Association information.

Training As indicated in the Objects of our Constitution, education and training is a core activity for the development of skills for the automotive value chain across a range of industries. MTA Institute of Technology (MIT) under the leadership of Managing Director Brett Dale is 2 Motor Trades Association of Queensland

recognised for excellence by both the automotive and training industries.

MIT trains in excess of 1,400 apprentices and trainees each year with an annual average graduation rate of 400 new “tradies” for the automotive industry. The training model is a fulltime residential course where students attend MIT College for six months of training, which includes periodic vocational placement with an employer to consolidate their training.

MIT’s Diploma of Management course has significant appeal for employees seeking to enhance their management skills. Approximately 150 automotive industry employees have graduated.

Recently, MIT added Heavy Vehicle – Road Transport to its scope of registration and has commenced workplace delivery across the State.

This training product was developed in response to industry demand and a growth rate similar to that of Light Vehicle training numbers is anticipated.

Richard Payne’s report. The position of Principal Policy Director was an innovation introduced by now CEO Ian Field who appointed Richard because of the extensive automotive industry experience at the State, National and International levels he brings to the position. His exceptional contributions are highly valued.

Through the Principal Policy Director, our Association’s views and policy positions are articulated to many agencies including the Reserve Bank; The Australian Competition and Consumer Commission; the Australian Department of Treasury; Senate Committees; Australian Treasurer; the Queensland Treasurer; Queensland Transport; Motor Accident Insurance Commission; Fair Trading Queensland; and Queensland Department of Environment and Resources Management.

Brett and his team have worked hard to expand training products and services to ensure the sustainability of the automotive industry. MIT has maintained the three Gold Star rating for ‘excellence in trade’s skills training’ – the highest level awarded and the only automotive training provider in Queensland with the award.

Our Association has earned respect for well reasoned and constructed submissions that articulate the policy position or views of either a single industry sector or from a holistic Association perspective. Influencing policy is a challenging process and it is notable that we have achieved positive outcomes for our Members in a number of key policy areas such as the Franchise Code of Conduct, which took effect on July 1 2010. As an illustration, the Federal Government has announced significant amendments to the Franchise Code that parallel our submissions on behalf of our membership. Under the new regulations, franchisers are compelled to provide greater disclosure, transparency and mediation in their relationship with franchisees.

Advocacy and Representation

Industrial Relations

Our extensive advocacy and representations on behalf of Members is detailed in Principal Policy Director

A significant role of our Member Services Division is the provision of industrial relations advice to Members and 2009 -

MIT is the largest automotive training organisation in Queensland and is on the State Government’s preferred supplier list with contracts for User Choice and Skilling Solutions and the Pre-Apprenticeship Pathway. The demand for skills will continue to drive the direction of MIT ensuring that industry is provided with optimum training products.

10 was a year of dramatic changes. As of 1 January 2010 all businesses came under the Commonwealth industrial legislation referred to as “Fair Work”. I congratulate Ted Kowalski our Industrial Relations Manager, for assisting Members with the complexity of transiting from the “Work Choices” system to the new “Fair Work” scheme, which included award modernisation.

The process of modernising awards covering the motor industry involved the establishment of the Vehicle Manufacturing Repair Services and Retail Award and the Clerks Private Sector Award. Coinciding with the adoption of “modern awards” was the implementation of National Employment Standards (NES).

These are a set of 10 basic entitlements that apply to all employees in the Fair Work system that must be observed in conjunction with award provisions.

Initially the changes caused considerable confusion and uncertainty, but early indications are that most businesses have now adapted to the changes and are dealing well with the new industrial relations landscape.

Motor Show The aim was to hold the 2010 Brisbane Motor Show in the month of June.

Unfortunately, the impact of the GFC on the automotive industry caused its cancellation. We were conscious that motor enthusiasts would have been disappointed, but the commercial reality was that there were insufficient exhibitors to make the Show viable. Interestingly, in 2010 there will be only one Motor Show opportunity and that will be the Sydney Australian International Motor Show in October.

Ag Show As Chair of the Queensland Farm Industrial and Machinery Dealers’ Division (QFIMDD) I’m proud of our involvement with the Ag Show since 1992. It has the well-earned reputation

of being one of Australia’s premier agricultural field days attracting both international and domestic interest.

Ag Show is a joint venture of our QFIMDD, The Royal Agricultural Society of Queensland (Toowoomba) and Australian Provincial Newspaper’s Toowoomba Chronicle and the major long-term sponsor is The Heritage Building Society Toowoomba. It is held over three days in September each calendar year.

The 2010 Ag Show was held against the backdrop of rising confidence due to the best production season for 15 years following falls of plentiful rain across rural areas. All exhibitor places (some 700) were filled indicating the benefits associated with participating in Queensland’s largest agricultural field day. Over 116,000 visitors passed through the gates and exhibitors indicated solid sales for agricultural machinery and motor vehicles and some pavilion exhibitors reported a 40% increase in sales.

The QFIMDD has been proactive in support for the state’s agricultural industries and attendant communities concerned about the consequences of the irreversible diversion of strategically valuable agricultural land to extractive mining industries. We note that the policy thrust of our initial submission to the Department of Environment and Resource Management on protecting prime agricultural land was reflected in the Department’s proposed policy framework.

Former MTAQ House - Buchanan Street, West End The former MTA Queensland headquarters at Buchanan Street, West End, is currently tenanted and because of its location on the fringe of the Central Business District it meant it has been an attractive proposition for lease. Your Board has made the decision to sell the property and tenders have been called

for expressions of interest.

MTA Queensland Headquarters Wynnum Road Cannon Hill Our current premises at 1000 Wynnum Road, Cannon Hill that we share with the headquarters of GMH have served the purpose of bringing training and corporate operations under the one roof. For Members it has proved to be accessible and convenient for the present.

New Headquarters and Training Facility – Eight Mile Plains Your Board, after three years of planning, has resolved to approve the development of a land construction contract for the Headquarters of MTA Queensland and a ‘state of the art’ training facility for MIT at Eight Mile Plains – south of the Technology Park. It is accessible from all directions – from the north and south via the M1 and the Logan Motorway for western interests.

The total size of the building will be in excess of 3000 m², with 100 car parks.

The project investment of approximately $10 million will be the largest in MTA Queensland’s history.

The training facility has been designed with extensive industry consultation to ensure that its function simulates industry best practice and latest technology. It will incorporate the best available fit out for new training courses in those areas of industry that currently have limited options available to them such as the collision repair sector.

The planning process of the facility has led to significant partnering opportunities that will be announced in the new year and further add to the capacity of services that MTA Queensland can deliver to its Members. The facility is planned for completion in October 2011 and to be fully operational by December that year.

Motor Trades Association of Queensland 3

President’s Report continued

Australian Automotive Industry Association Under the untiring leadership of Chief Executive Officer Ian Field, a national motor dealer voice has been achieved with the appointment of Richard Dudley as Chief Executive Officer of the Australian Automotive Industry Association (AAIA). The new entity in the national capital will represent the automotive value chain’s interests of MTA Queensland, the Victorian Automobile Chamber of Commerce, Motor Trader’s Association New South Wales (including the Australian Capital Territory) and the Tasmanian Automobile Chamber of Commerce. An invitation has been extended to Western and South Australia and Northern Territory to join the new national body.

Our industry makes an important contribution to the Australian economy and needs professional advocacy to articulate the national motor agenda. The changed national political circumstances in the form of a minority Federal Government make it more important for the industry to have an advocate to represent the disparate needs of the separate State organisations.

Richard Dudley has had extensive experience in the Canberra bureaucracy. He will introduce a new focus on and advocacy for automotive value chain issues in contrast to our previous relationship with Motor Trades Association of Australia that now, predominantly, is the manager of the motor industry superfund.

Executive Team I thank our CEO Ian Field for his wise counsel on governance, administration and policy matters to me and the MTA Queensland Board. I thank too my fellow Board Members for their support and the leadership provided to their industry sectors. Your unconditional commitment to our Association and constructive and visionary input has enabled the Association to transit the GFC in fair shape.

I acknowledge the role of Paul Petersen as our Secretary Treasurer. Paul is also in his first year of duty following Ian Field’s resignation, who served the Association with distinction as Secretary Treasurer for many years.

I sincerely thank on behalf of MTA Queensland our External Directors – Paul Moni, Tom Barton and Steve Ghost who have given generously of their time and talents to our Association. Your professional guidance is valued.

Thank you Our Association is reliant on our corporate staff for administration and service delivery. To a great extent our staff presents our image to the public. I thank them for their pride in our Association, never failing courtesy, loyalty, high sense of duty and professionalism to the Board, the Executive and the Members.

Corporate Partners

I thank Kellie Dewar General Manager of Member Services and her team for providing the professional support to the Board of MTA Queensland, the Chair of each industry Division, Committee Members and importantly our Members.

Our Corporate Partners are important to us. In particular I mention the valued relationships with the Commonwealth Bank; Corporate Express; Dun and Bradstreet; MTAA Superannuation Fund; Capricorn Society Limited and Trinity Telecom Pty Ltd.

I express appreciation to Managing Director of MIT Brett Dale, Principal Policy Director Richard Payne, Industrial Relations specialist Ted Kowalski, Technical Adviser Russell Sticklen, and Chief Financial Officer Kathy Winkcup for their individual and

4 Motor Trades Association of Queensland

collective contributions and to MTA Queensland and their high sense of duty and professionalism.

Thank you for the privilege of serving MTA Queensland as the 9th President since the inception of our Association.

2009 - 10 has been a successful year for MTA Queensland in spite of the difficulties to the automotive value chain caused by the GFC. 2010 -11 will bring further achievements for our dynamic Association and I trust a more rewarding year for all our Members.

I commend this Report to Members.

David Fraser President October 2010

Treasurer’s Report

This is my first Treasurer’s Report for the Association and it gives me great pleasure in presenting the 2009-2010 financial results for the Motor Trades Association of Queensland, which includes wholly owned subsidiaries MTAQ Ltd, the part owner of MTAA House in Canberra and MTA Institute of Technology Pty Ltd, our training organisation.

The organisation’s final result for 2009-10 was a net profit of $1,525,982; our total members funds remained strong at $15,272,465 and our cash position was $5,465,634.

The main highlights during the financial year were:

In the past few months we have finalised the management restructure of the Association and this should see considerable savings and improved member services.

Paul Peterson Treasurer/Secretary

Member Services • 2,022 members at June 2010 • New Divisional Executive based in Townsville; 18 new members signed in six months • Additional corporate deals for members with e2e for members recruitment solutions • 27 Advocacy submissions made by MTA Queensland

occupied with tenants by November 2010, netting a $275k per annum in rental return.

• The board approved to list our West End property for sale, this is currently under a tender process and all offers were due to close at the end of September 2010.

New Building Project • MTA Queensland Board has approved a purpose built MTA Queensland Headquarters at Eight Mile Plains, due to be completed 31st October 2011. MTA Queensland cash position at 30th June 2010 $5,465,634 places us in a great position to fund the majority of this project out of cash reserves.

Overall, MTA Queensland’s financial position remained very strong at 30th June 2010 and the Association is budgeting a profit $460k for the financial year 2010/11. The Executive Board and MTA Queensland Board continue to meet quarterly to review the investment performance and financial position of the Association.

Corporate • MTQ Insurance Shares sold ($1,341,000 profit on sale $1,060,000) • Wrote off Capital Building Expenses Acacia Ridge and West End $377,686

Mdocs • New online eStore for members to purchase their stationery requirements

MTA Institute of Technology • Training remains strong contributing a net profit $1,588,337 to the Association

West End Building • West End building will be fully Motor Trades Association of Queensland 5

Organisational Structure

Kellie Dewar General Manager, Members Services

Brett Dale Managing Director, MTA Institute of Technology

Emma Pires PA to Chief Executive Member Services

Katie Gould Administration Assistant Member Services

Commercial Business MTA Queensland

Tony Wilson Director Training Services

Ted Kowalski Manager Industrial Relations

Stationery

Neil Short Divisional Executive

Russell Sticklen Technical Advisor Stationery Manager

Aynslee Bell Divisional Executive

Publications

Rob Thompson Field Training Metropolitan

Field Trainers x17

Michael Taylor Publications Manager

Peter Richardson Art Direction Consultant

Jeff Dunlop Advertising Representative

6 Motor Trades Association of Queensland

Regional Queensland Field Trainers x15

Marcello Riotto Residential Training

Residential Trainers x3

Kathy Winkcup Chief Financial Officer

Richard Payne Principal Policy Director

Joe Newbery Learning and Development Consultant

Vacant Chief Operations Manager

Nicola Gardner-Smith Client Services Director

Kerry Cook Quality Manager

Training Compliance Officers x2

Anthony Smith Business Development Manager

Administrative Officers x3

Pranesh Deo IT Officer

Mirela Pribic Accounts Payable Clerk

Laura Houchen Accounts Receivable Clerk

Magda Gavriel Receptionist

Motor Trades Association of Queensland 7

MTA Institute of technology

MTA Institute of Technology’s (MIT) training model remains cutting edge in delivery and content and remains recognised for excellence by both automotive and training industries.

The year has presented great challenges and rewarding times for MIT. We have again achieved record results in performance, both in quality and financial position. New business has increased significantly and ongoing growth is anticipated in both our current scope and newly developed products and services.

Operations

In the past few months we have finalised the management restructure of the Association and this should see considerable savings and improved member services.

Brett Dale Managing Director

MIT has been actively involved in the delivery of the Automotive PreApprenticeship course, which aims to develop potential applicants for entry into the industry.

The training model is a fulltime residential course where students attend MIT College. During their six months of training they are periodically placed in vocational placements where the students work with an employer to consolidate their training. This arrangement provides an excellent opportunity for employers looking for the right apprentice. We extend our thanks to the committed employers who continue to provide support with vocational placement opportunities. This program prepares students for entry into the automotive industry so that they are job ready on commencement of employment, which instantly provides for productivity in the workplace from day one.

Since MIT registered our Diploma of Management course, we have had approximately 150 automotive industry employees graduate with the management skills to enhance their competitiveness for new roles and/or further develop their skills to contribute to their existing business.

8 Motor Trades Association of Queensland

The course continues to appeal greatly to businesses that strive to achieve a competitive advantage through investment in training. The Federal Government has provided incentives that support most applications for the course.

MIT continues to train in excess of 1400 apprentices and trainees each year with an annual average graduation rate of 400 new tradies to our industry. The demand across Queensland continues to grow and businesses that are watching the resource sector re-boom are preparing for the potential skills shortage; by commencing new apprentices, they are able to counteract potential impact on their operations.

MIT has recently added Heavy Vehicle - Road Transport to its scope of registration and has commenced workplace delivery across the state.

The training product was developed in response to industry demand and we anticipate a growth rate similar to that of the Light Vehicle.

The MIT and MTAQ Board have approved the development of our state of the art facility that will be fully operational in December 2011.

The design has taken into consideration the advice of Industry and the demand of the training market. It will complement our existing business and provide opportunities for alternate delivery models of training and new training in the area of paint and panel.

Our current operational structure is capable of an additional 20 percent capacity with limited investment, particularly our workplace delivery model. Our move to Cannon Hill has provided great capacity and accessibility to our clients and alternate models of delivery. Our

planned relocation to Eight Mile Plains has considered similar issues to ensure it provides accessibility to our valued clients and continued growth.

Achievements MIT has again achieved excellent results and recognition as a training provider committed to excellence and industry engagement. We have worked hard to expand our training products and services to ensure that we further contribute to the sustainability of the automotive industry.

These achievements include the following: • Maintained the three Gold Star rating for ‘excellence in trade’s skills training’ - the highest level awarded and the only automotive training provider in Queensland with the award.

• Numerous nominations for regional apprentices of the year.

• The overseas scholarship award was presented to one of our outstanding apprentices, Mr Adam Simmons, who has completed his mechanical training and is well on his way to completing his auto electrical qualification with MIT– a most inspiring individual who is most worthy of the reward.

• The development of training products and services aimed at up skilling current trades people for business management and new technical qualifications in Heavy Vehicle.

• Funding for recognition of prior learning and gap training services has been obtained and is suitable for industry personnel who are motivated to obtain part of full qualifications. This is particularly important for businesses that do not have qualified staff,

which prevents them from hiring apprentices under a government funded training arrangement.

MIT remains on the State Government’s preferred supplier list with contracts for UserChoice and Skilling Solutions and Pre-Apprenticeship Pathway.

Secured land and building contract for state of the art facility at Eight Mile Plains.

Completely reviewed all learning and assessment material, which will be implemented in October 2010.

Objectives MIT’s key focus is to remain flexible and responsive in order to adapt to the changing demands of Industry.

The demand for skills shortages will continue to drive the direction of MIT to ensure that Industry is provided optimum training products. We remain focused on the changing political environment and its impact on the commitment to skilling Australians and in particular the automotive industry.

practices as a commercial enterprise.

The Board of Directors consists of: • Mr Tom Barton – Chairman • Mr Glen Ford – Deputy Chairman • Mr Mark Brady – Director • Mr Steve Ghost – Director We also extend a welcome to our newly appointed Director, Mr Steve Ghost, who brings with him a wealth of experience from both the VET sector and the automotive industry.

On behalf of the Board and management team, I acknowledge the outstanding efforts of both the technical and support staff who work diligently to deliver high quality automotive training and administrative support. It is these people who are ultimately responsible for the success of the training operation and most importantly, the skilling of our industry.

We will relocate and offer extended services to Industry from our new location by the end of 2011. The team will continue to meet and exceed the expectations of our clients with the objective of extending our market position.

We will continue to develop new training products over the coming months and would welcome any request from Industry for consideration and validation.

Governance The management and staff at MIT acknowledge the dedication and commitment of the Board of Directors, all of whom work tirelessly to ensure that the strategic plan and corporate governance of MIT is aligned with the Association’s expectations and best

Motor Trades Association of Queensland 9

Members Services and Support

Communicating with our Members

• South East (North) – Bundaberg south to the greater Brisbane Border

Member Services want to increase communication access with our Membership base. We will focus on electronic mediums and upgrading some of these to keep members informed.

• South East (South) – from the New South Wales border north to the greater Brisbane border

It is vital that all your details are up to date on our system so you are receiving our correspondence and emails, keeping you informed on Policy issues, legislation requirements and corporate offers.

It is vital that all your details are up to date on our system so you are receiving our correspondence and emails, keeping you informed on Policy issues, legislation requirements and corporate offers.

Kellie Dewar General Manager, Members Services

Policy and the impacts on the automotive value chain continue to be a key focus when representing the Industry with relevant State and Federal Departments. All submissions can be viewed on our website in the public area – you do not need to log in.

Member Benefits We are looking at increasing our external Corporate Partners over the coming year with a focus on recruitment, energy and expanding our partnership with the Commonwealth Bank for the inclusions of general business banking products.

How to contact MTA Queensland Each member is assigned a Divisional Executive on staff as a point of contact.

If you are not sure who looks after you, please give us a call in Member Services and Katie or Emma will be able to assist with direct contact details.

In addition to staff contacts we have Division Office Holders for all our Divisions and District Representatives for each region of the State: • Far North – Cairns and environs • Northern – Townsville and environs • Central – Mackay, Gladstone Rockhampton and environs • South West – Toowoomba, Dalby Warwick and west to the Northern Territory border

10 Motor Trades Association of Queensland

Elections This was our second year of elections held under our amended Constitution by the Queensland Electoral Commission. The process has been very smooth this year as we are getting more familiar with the requirements.

Feedback We often request feedback for inclusion in submissions but the response is generally not adequate to provide real supporting data. I would encourage you to actively participate in these requests.

We welcome your feedback on any issues or suggestions at any time through our Member Services Department.

Merge of Divisions Automotive Undercar Division and Qld Tyre Dealers and Retreaders Division have merged and we look forward to announcing the new name when it has been accepted for registration.

These two groups have many common industry issues and a large portion of businesses do a cross section of work in both areas. The two groups have already had joint meetings including their AGM and will be working closely with our Automotive Engineers Division on common issues affecting the Mechanical Industry more broadly.

Member Services Support The Member Services Team provides administration support to all Divisions of MTA Queensland and the Board of MTA Queensland.

I would like to thank all my staff involved in the professional operation of our Member Services Department and the Chairman of each Division and Committee Members and the MTA Queensland Board for their valued input and assistance over the past year.

“Fair Work” replaced the previous “Work Choices” system and, as at 1st January 2010, all businesses came under Commonwealth industrial legislation.

Ted Kowalski Manager Industrial Relations

INDUSTRIAL RELATIONS REPORT The last twelve months to 30th June 2010 saw some dramatic changes on the industrial relations front. “Fair Work” replaced the previous “Work Choices” system and, as at 1st January 2010, all businesses came under Commonwealth industrial legislation.

(Sole traders and partnerships came under the national system when the Queensland government handed its industrial relations powers over the private sector to the Commonwealth from 1st January 2010.)

The process of award modernisation, which saw a multiplicity of both State and Federal awards reduced to a far smaller number (122) of “modern awards”, culminated in the establishment of the Vehicle Manufacturing Repair Services and Retail Award and the Clerks Private Sector Award to cover the motor industry from 1st January 2010. Sole traders and partnerships were given a twelve month transitional period before being bound by the rates of pay in these modern awards from 1st January 2011. National Employment Standards (NES) were also introduced as at 1st January 2010 to coincide with the adoption of the modern awards. The NES are a set of 10 basic entitlements that apply to all employees in the Fair Work system and these must be observed in conjunction with award provisions.

From 1st July 2009, the Fair Work unfair dismissal legislation did away with the previous blanket exemption for firms employing fewer than 100 employees, and, instead, only excluded employees from the legislation for their first 6 months of employment - if employed in a firm having 15 or more employees, and for 12 months if in a firm having fewer than 15 employees. (Hardly surprisingly, this extension of coverage for the legislation, lead to over 10,000 unfair dismissal claims being lodged in the first twelve months of operation.)

A less complicated procedure for terminations was also introduced for small business to allow for the fact that such businesses usually have less access to competent industrial relations advice.

Award wage fixation under Fair Work was standardised to occur once a year and to take effect from 1st July each year, whereas under the former arrangements, State Award wages usually increased from 1st September

each year and those under Work Choices from 1st October each year.

The first increase awarded in the new system was $26 per week, acrossthe-board, to all adult employees.

This raised a tradesman’s rate by just over 4% to $663.60 per week. The Fair Work legislation allowed for a fiveyear phasing-in of significant wage anomalies which occurred as a result of the change to modern awards notwithstanding that the introduction of modern awards was not supposed to increase costs for employers.

Various new administrative bodies also came into existence for the new system;• The Australian Industrial Relations Commission and the Australian Industrial Registry fully ceased operation from 31st December 2009 and Fair Work Australia commenced on 1st July 2009.

• The Australian Fair Pay Commission and its Secretariat ceased operation from 31st July 2009 and the wage setting responsibilities of these bodies was taken up by Fair Work Australia.

• The Workplace Authority fully ceased operation from 31st January 2010 with Fair Work Australia assuming the responsibility for collective agreement lodgement and approval from 1st July 2009.

• The Workplace Ombudsman ceased operation from30th June 2009 and the Office of the Fair Work Ombudsman commenced from 1st July 2009.

While these changes initially caused a great deal of confusion and uncertainty, early signs are that most businesses have absorbed the changes and are dealing well with the new industrial relations landscape.

Motor Trades Association of Queensland 11

Members Services and Support continued

finance for small businesses and made personal representations at the resultant Senate Enquiry.

• MTA Queensland’s recommendation for the preservation of strategic cropping land was adopted by the Queensland Government as the blueprint in their Policy Framework, which was released in August 2010 and is considered to be a best Government practice in Australia.

We are proud of our achievements this year and details of submissions and member bulletins may be read from the MTAQ website.

Richard Payne Principal Policy Director

• MTA Queensland supported the Property Council of Australia and other affected groups in opposing the Draft Legislation put forward by the Queensland Government, which resulted in positive amendments to the Bill.

A summary of 2010 Policy Topics communicated to members and Government bodies is detailed below.

Additionally, there have been some forty policy articles included in the Motor Trader Magazine. We are proud of our achievements this year and details of submissions and member bulletins maybe read from the MTAQ website.

Member Bulletins / emails All Members – General • 03/10 Proposed Changes to Land Valuation Legislation

POLICY 2010 has been a very busy year for submissions on behalf of members to all levels of Government and we have achieved many successes as a result of our submissions. Particular highlights are: • MTA Queensland made influential submissions in support of new Franchising Code of Conduct amendments and revisions to Standard Contract terms to eliminate unfair clauses, both of which became effective from July 1, 2010.

• MTA Queensland was the only automotive authority to make a submission on the availability of 12 Motor Trades Association of Queensland

• 05/10 Proposed Changes to Land Valuation Legislation • 06/10 Advertising – Clarity in Pricing • 07/10 Possible ATO Demand for Security Deposit • 08/10 Business Activity Statement to ATO • 14/10 Policelink Crime Reporting • 16/10 Department of Fair Trading Hotline • 17/10 Mandatory Standard Portable Ramps for Motor Vehicles New Car Dealers (AADA) • 04/10 GST Vehicle incentive Payments • 12/10 Credit Licensing & Luxury Car

Tax Increase from July 1, 2010 • 15/10 Motor Accident Insurance Amendment Bill Used Car Dealers • 01/10 Commercial Vehicle Statutory Warranty Clarification • 12/10 Credit Licensing • 15/10 Motor Accident Insurance Amendment Bill Farm Machinery Dealers • 04/10 GST Vehicle Incentive Payments • 10/10 Trailer Safety Certificate Inspections • 11/10 VIN Numbers on trailers • 12/10 Credit Licensing Mechanical Repairers • 10/10 Trailer Safety Certificate Inspections • 11/10 VIN Numbers on trailers Motor Cycle Dealers • 04/10 GST – Vehicle Incentive Payments • 12/10 Credit Licensing Rental Vehicle Businesses • 02/10 Fair Trading in the Rental Car Sector Industry Guidance • 13/10 DriveMyCar Rentals Service Station Businesses • May 27 email: 7-Eleven purchase of 295 Mobil retail outlets • 14/10 Policelink Crime Reporting • 14A/10 Policelink “Drive Off” Record Form

Government Submissions All Members – General • Ideas and Priorities for 2010/11 Federal Budget • Proposed Changes to Land Valuation Legislation • Inquiry into access of small business to finance • Possible ATO Demand for Security Deposit

• ABN Business Name Registration Project • Queensland’s Waste Strategy 2010 – 2020 Consultation Draft Auto Parts Recyclers • Written-off Vehicle Enhancements • Qld Minister Sub - Ban on repairable write-offs by NSW • Response to NMVTRC Review of Written-off Vehicles • Improving the Regulation of writtenoff vehicles – national consensus New Car Dealers (AADA) • Consultation Draft Bill – Proposed Amendments to PAMDA 2000 • Response to Treasurer on Delivery of CTP Insurance • 2010 – 2011 State Budget implications for the automotive value chain • Consequences of recent state budgets • Consultation Draft – Motor Accident Insurance Amendment Bill 2010 Used Car Dealers • Consultation Draft Bill – Proposed Amendments to PAMDA 2000 • Draft Bill – Motor Dealers and Chattel Auctioneers Bill 2010 Farm Machinery Dealers • Strategic Cropping Land, Policy and Planning Framework, Discussion Paper National Auto Collision Alliance • Written-off Vehicle Enhancements • Qld Minister Sub - Ban on repairable write-offs by NSW • Unfair terms in insurance contracts: Options Paper • Response to NMVTRC Review of Written-off Vehicles Service Station Businesses • 7-Eleven proposed acquisition of Mobil retail outlets • BP proposed acquisition of Centrel (Reliance) Motor Trades Association of Queensland 13

Australian automobile Dealers Association

This is my first report to members on the activities of the Australian Automotive Dealers’ Association (AADA) following my elevation to the role of President. I have “big boots to fill” following on from Ian Field who distinguished himself as an industry leader.

On behalf of the Association, we made pre-budget submissions for consideration to Federal and State Treasurers drawing attention to the continuing volatility in the new vehicle market and proposing ideas and priorities.

Len Daddow President AADA

14 Motor Trades Association of Queensland

The year 2009 – 10 has been one of challenges to which we responded with diligence on behalf of Members.

We have been assisted greatly by Ian Field’s innovation to appoint a Principal Policy Director with automotive industry experience at the State, National and International levels. Richard Payne fills this role with distinction contributing to the sound functionality of our Association.

His expertise and knowledge is appreciated.

Economically, it has been a difficult year for the automotive industry. To allay the aftershocks of the Global Financial Crisis (GFC), the Federal Government introduced the Small Business and General Tax Break from 1 July 2009, ceasing December 31 2009. This was a helpful measure spilling over to the first quarter of 2010 enabling the purchases of motor vehicles for business related purposes.

Overall, the economic environment for members has been “tough” as indicated by recent automotive statistical data that shows new vehicle sales figures represent the lowest result since 2003. Compared with other jurisdictions, Queensland lags in new vehicle, used vehicle and motorcycle post GFC recovery rates.

Queensland is going backwards, and the poor sales results for the last two years will be reflected in the front-end and fixed operation profit results of dealers in years to come.

On behalf of the Association, we made pre-budget submissions for consideration to Federal and State Treasurers drawing attention to the continuing volatility in the new vehicle market and proposing ideas and priorities. Our focus included that there should be no addition to the automotive industry’s taxation burden.

A succession of State Budgets has subjected the motoring sector to several revenue raising measures.

The most recent impost has been the elimination by law of any fee for service relating to Compulsory Third Party (CTP) which took effect from 1 October 2010. We objected to the changes by way of discussions and submissions with Queensland Treasury and the Motor Accident Insurance Commission.

The State Budget presented the changes as a saving to motorists achieved by a Government efficiency initiative. The factual position is that the State Government’s changes preclude a service provider from a legitimate fee. In other words, in the instance of CTP the user pays principle to which the State Government adheres, does not apply to the private sector.

We submitted that a fairer outcome to achieve the objective of reducing motoring costs in the current environment by at least the equivalent announced in the 2010/11 Budget would be to cap CTP commissions at no more than 5%, abolish trailing commissions, reduce the ceiling on CTP by $10 plus the $4.00 HIH Levy and freeze registration fees at the pre July 1, 2010 level for the next 3 years.

The Federal Budget also had tax increases for the automotive industry with the luxury car tax threshold for the financial year 2010-2011 deemed

a “luxury car” was one $57,466 – up from $57,180. The “fuel efficient” car threshold increased to $75,375, up from $75,000.

An important matter for Members was the 2008 Federal Court ruling (Kap Motors Pty Ltd v Commissioner of Taxation) deeming that Holdback transactions made by manufactures to dealers did not involve a supply within the meaning of the Goods and Services Tax Act (GST) and therefore, should not have attracted GST payments. As a result of this decision, the Australian Taxation Office was required to make a refund to dealers for GST that was incorrectly paid based on submissions from dealers.

This ruling, in principle, left the door open for dealers to seek a refund for other transactions where it is ultimately found that there was no supply at all but GST had been paid under existing laws.

Over the year, we have engaged in consistent policy work on several issues by way of submissions to Federal Government Inquiries. Chief of these - since 2008 - has been the submissions to amend the Franchise Code of Conduct under the Trade Practices Act 1974; the result of which has been the significant changes of benefit to Members.

For example, in our submission to the Parliamentary Joint Committee on Corporations and Financial Services Inquiry on the Franchise Code of Conduct, the “unilateral renegotiation” of the franchise agreement was specifically addressed. We submitted that “the expunging from agreements subject to the Code the right of either the franchisor or franchisee to unilaterally renegotiate the franchise fees or benefits of an agreement

requires attention.”

It was rewarding that the views of our Association was reflected in the new Franchise Code of Conduct which took effect on 1 July 2010. Under the new regulations, franchisors are required to ensure greater disclosure, transparency and mediation in their relationship with franchisees.

Finally, I thank Members for their many contributions to the Association and look forward to the coming year as we work together to address the challenges that confronts our sector.

Beyond this, franchisors are required now to make clear the future capital expenditure obligations of franchisees, and specify if there are requirements to pay a franchisor’s legal costs. Franchisors now must give a minimum of six months notice if a franchise agreement is going to be terminated. This is of particular importance as many franchisees were unaware that agreements were not necessarily ongoing.

Referring to the new Australian Consumer Law which took effect from 1 January 2010, we were disappointed that the new provisions relating to unfair contracts covered only business to consumer transactions excluding business to business contracts in standard form contracts. We hold hope that the new Federal Government will address this policy matter. We strongly supported the Consumer Credit Bill, providing exemption from licensing for point of sale retailers (such as car dealerships), where they act as an intermediary through an arrangement with a lender.

On behalf of AADA, I thank all Head Office staff for their professionalism and helpfulness which is appreciated and valued. I particularly thank Principal Policy Director Richard Payne and General Manager, Members Services Kellie Dewar and her staff.

Motor Trades Association of Queensland 15

Automotive Engineers Division

What a great year it has been! Stability has returned to our MTAQ organization with a year completed without major change, but more about that later. Some members would think that we work very slowly at trying to achieve changes in our motor industry, but it is not what it seems.

When changes are sought from state run entities, it is normally not the organization we are dealing with that resists change.

Motor vehicles today are a very necessary part of our society and they are also moving towards intricate complexity. This means that we need high quality tradesmen to maintain and repair the vehicles, but are we achieving this?

Charlie Serchen Chairman AED

When we request change from government departments, there are behind the scenes departments that demand all sorts of figures & stats that, to you and I may seem blatantly obvious.

The reason for this is that the government inherits many departments that deal with many different parts of our society and the government department must ensure that all stakeholders are satisfied with change.

Spare a thought for us when you begin to think that we are going too slow.

The thing that I have enjoyed this year is the fact that I have been working very closely with Richard Payne, our MTAQ Principal Policy Advisor and this has given me a greater understanding of government workings and the opportunity to learn various negotiating methods.

At this point in time, we are dealing with the Repair Register, Right to Repair and the charges for Safety Certificates. I can report that all negotiations are proceeding towards our preferred choice of result.

Member visits have continued throughout the year, with Tony (our Vice Chairman) joining me in the last few weeks. Our visits have included the Kingaroy to Brisbane area, Brisbane out to Roma, Southport, Sunshine Coast and the Warwick/ Stanthorpe areas. Members seem to enjoy our visits and the duration ranges from 5 minutes to an hour for smoko. We would like to visit all members, but we can only do what time permits. When we come to your area, please let us know if you are busy so our visit can be brief.

Now that the federal election has been completed we have a very different parliament to previous years and it may be

16 Motor Trades Association of Queensland

an opportunity to push for nationalisation of our industry and all things associated with it, such as licencing, registrations, fees, standards, etc. What do you think?

Perhaps it may be an opportunity to discuss your issues with your local member and see what can be achieved.

Motor vehicles today are a very necessary part of our society and they are also moving towards intricate complexity.

This means that we need high quality tradesmen to maintain and repair the vehicles, but are we achieving this?

Sometimes, I wonder! Two ingredients will produce the facility that will provide quality work for the vehicle owners and these are the availability of technical information and first class training. Right to Repair is the subject affecting the availability of technical information and we are working on a suitable system that protects the manufacturer and provides us with necessary technical information. Training is the other. The best advice that I can offer is for employers to ensure that they involve themselves in their apprenticeship training course. We all want first class tradespeople in our shop, so sit in on the testing procedure and show the apprentice your method of quality work. It will pay dividends.

This year will see changes in our real estate and we will be back to owning and operating out of our own building at Eight Mile Plains in the near future.

We have a committee of twelve in our Automotive Engineers Division and two new members on our committee. I look forward to the coming twelve months as a productive period for achieving results for our industry. I have been elected Chairman, Tony Bonanno will take up Vice-Chairman and Ross Pickering will be our Secretary. Once we have our meeting dates set, I will email them to you all. In closing, I invite any of you to attend our Automotive Engineers Divisional meetings at Cannon Hill, generally on a Monday night.

Automotive Parts Recyclers

2010 has been another interesting year. Firstly, I would like to thank our new president Mr. David Fraser and my fellow board members and staff for a very productive year which members will soon see the results. Also, I would like to thank the committee members for their input on current issues.

The main topic for this year is still statuary write-offs with NSW RTA set to commence on the 31st of October, this will mean that most insurance write-offs will be statuary write-offs except for hail and a few exclusions for classic models in NSW pending legislation passing!

End of life vehicles and or ‘Cash for Clunkers’ is back on the agenda with the current Federal Government and we will be endeavouring to have our opinions on this subject heard at the highest level.

Glen Ford Chairman ARPD

we will be endeavouring to have our opinions on this subject heard at the highest level.

Feedback from fellow QLD recyclers has indicated that we are recovering from the impact of the GFC. Although we suffered from a sluggish start to the new financial year, current trends indicate that our industry sales are recovering. This is reflected in the price of scrap metal and stock as both are on the increase.

QLD Transport has indicated that they do not intend to follow the same path but are looking at the new recommendations from the National Theft Reduction Council regarding the criteria for repairable write-offs and statuary write-offs. The committee’s main concern about this is the time it might take to implement these new proposed regulations. How these changes will affect our industry nobody knows for certain, but, we will be monitoring recyclers in NSW for changes in sales and cost of goods as well as interstate traffic of salvage vehicles. NSW recyclers tell us that the number of repairable write-offs awaiting inspection in NSW has increased eight fold.

I would advise all recyclers to attend a recycling conference in Newcastle from November 18th to November 20th, 2010. Even though this conference is being conducted by Pinnacle, it is open to all recyclers and would be advantageous for all to attend.

The program includes sales training, inventory and management breakout sessions as well as an AAPRA sponsored Gala Dinner.

End of life vehicles and or ‘Cash for Clunkers’ is back on the agenda with the current Federal Government and Motor Trades Association of Queensland 17

Engine Reconditioners Association of Queensland

Over the past year there have been some significant changes in our industry and industry association.

Since MTA Queensland split from the MTAA, it has been very difficult for most divisions to be able to work with the other states.

Meetings for the year have been growing in attendance, with some lively discussions. It was decided at the last meeting that we would conduct an independent workshop pricing benchmark survey.

Mark Bryers Chairman ERAQ

A few months ago, our Association along with the MTA NSW, VACC and VACC Tasmania started a new industry body called the AAIA (Australian Automotive Industry Association) hopefully soon to have the MTA WA and MTA SA joining. This would give all divisions a national representation again. The AAIA as it now stands represents approximately 80% of the industry. Our Division (ERAQ) can now openly work together with the other states again.

There have been some growing concerns over the year on the viability of the ERAQ and we have been working hard on improving attendance at meetings and better communications with our members.

Meetings for the year have been growing in attendance, with some lively discussions. It was decided at the last meeting that we would conduct an independent workshop pricing benchmark survey - offered to all members, and the findings shared with those members that participate.

The benchmark survey will be totally anonymous.

This year we have produced two new publications, Recommended Running In Procedures and Cylinder Head Warranty and Service Record.

The Member Services team for our Association will be sending out samples shortly. These forms are available at MTA Queensland House now and are an excellent way to promote your business in a positive and professional manner. We are currently working on a new Engine Warranty and

18 Motor Trades Association of Queensland

Service Record form to be available in the near future.

The committee had considered organising a national ERA conference this calendar year, but with the time constraints and disruptions in the Association, this was not realised. We are certainly setting our sites on having a conference in 2011.

National Auto Collision Alliance

As in my 2009 Chairman’s Report I said that I would not be nominating for the next committee. I have held the position of Chairman since 2001 and during my tenure and that of the committee members we have influenced huge change within the collision repair industry.

I would like to express my sincere thanks to all the committee members past and present for having the faith and trust in me as your Chairman.

David Weatherall Chairman NACA

This would not be possible without the support given to us by the management and staff of MTAQ, past and present. In particular, Kellie Dewar, Neil Short, Emma Pires and our very patient Katie Gould. I also so extend my gratitude to Richard Payne and Wendy Armstrong for the stirling submissions and representations they master to State and Federal Governments for our cause.

During the era of my Chairmanship, MTAQ / NACA have been instrumental in the following: • 2002 - The ACCC clarified that Insurance Companies own Lifetime Warranties not repairers.

• 2003 - Roundtable meeting with the ACCC about the introduction of an Industry Code.

• 2005 - Chairman’s appointment to Industry Code of Conduct by the Federal Government.

• 2005 - Alternative meetings in Melbourne and Sydney every fortnight for 9 months to establish the Industry Code of Conduct. Also in Canberra when required.

• 2006 - Implementation of the Smash Repair and Insurance Company Code of Conduct and recommendations by QLD accepted.

• 2006 - I-CAR Foundation established and hosted. Training programs now ongoing.

• 2007 - Participation with Ted Kowalski on a WPHS awareness program .

• 2008 - Invited by the Australian Tax Office to assist in the development of a standard Depreciation Schedule for the national Body Repair Industry.

• 2008 - National Body Repair Forums to establish a realist time manual.

• 2009 - Introduction by the ATO of a standard Depreciation Schedule as recommended by those committee members and repairers who participated in the discussions.

• 2009 - Submission and attendance before the independent External Code Review Committee.

• 2009/2010 - Invitation by Transport QLD to help review the Repairable Write Off process and what would be the criteria for major collision repairs.

• 2010 - Attend a National Body Repair Summit in Perth.

• 2010 - Attend a National Body Repair Summit in Adelaide.

This is a snap shot of some achievements made on the behalf of industry. To help, QLD had the fortune to be the National Chair of the Australian Motor Body Association between 2002 and 2005.

Within this period and with the help of my fellow committee members and with the permission of the MTAQ Executive Board, change was influenced.

In closing I would like to express my sincere thanks to all the committee members past and present for having the faith and trust in me as your Chairman. Being a divisional Chairman allows me to serve on the MTAQ Board and in turn this has enhanced my business knowledge; so to all those fellow Board Members, Presidents and the CEO I thank you for all the generous support you have given NACA. I would like now to congratulate the new committee and office bearers and thank the past committee for the huge contributions they have made in the past in the interest of the members. A special thanks to Mark Brady for being involved in training and to Graham Winter, Dean Turner and Steve Eaton who are District Reps and Board Members.

Motor Trades Association of Queensland 19

Queensland Farm and Industrial Machinery Dealers Division

Business and Industry

As Chairman of the QFIMDD, I commend the management committee in continually producing an Agricultural Machinery exhibition that offers and displays the widest range of equipment to all sectors of the agricultural community in this country.

David K Fraser JP Qualified.

Chairman QFIMDD

Although the investment allowances made our agricultural industry sector more buoyant than it had been for many years, it also left many machinery businesses with the staggering long lasting effect of large second hand inventory levels that many dealers are now just realizing some movement. The Australian cotton industry saw a surge in area plantings last summer due to a return of good commodity pricing after a long period of over stocked warehouses and low pricing on the overseas market which drove down areas planted throughout the cotton areas of Queensland and Northern/ Central New South Wales in the prior 3 seasons. This coming summer (planting rain dependent) will see much larger areas of the Darling Downs trend toward dry land cotton plantings, as there is a full profile of moisture ready for good summer crop results.

This current year’s wheat prices at planting time were quite low, but currently due to crop failures caused by the drought in Russia and the Canadian crop failures due to too much rain, the wheat and canola prices have increased dramatically. Unfortunately many Queensland farmers were unable to jump on the back of these now high pricing due to not receiving planting rain in May through to the end of July.

The next 12 month period in the agricultural machinery business will prove to be challenging, due to: • High second hand inventory levels, along with inflated values of inventory, mainly caused by the rising Australian dollar against US and Euro currencies.

• Many dealers being over stocked with new inventory, riding on the back of a lack of supply in previous years.

• The trend toward increasing interest rates and therefore higher costs of holding floor stock.

20 Motor Trades Association of Queensland

With these factors upon us, machinery dealers will need to rise to the challenge and manage their assets to ensure success of their businesses going forward.

The industrial machinery business industry sector continues to be slow as many machinery dealers still contend with high new stock levels, this is due to stock over ordering of inventory as the slow down followed a period where many manufacturers had an inventory ordering lead time of close to 12 months. Industrial machine sale volumes remained at low levels during the 2009/10 FY, but the industry is hopeful and anticipates a rise in sales numbers after the election results are realised and government funding is released for infrastructure spending.

Queensland Transport This year through the persistence of MTAQ’s Principal Policy Officer Mr. Richard Payne, we were able to get trade plates reinstated for use to dealers in the agricultural industry.

Richard was also instrumental in bring to the attention of the government the plight of our farming customers along with the flow on effect it would have on our industry if the use of prime agricultural farming land was set aside for open cut coal mining.

The submission points put forward by Richard were adopted by government, and therefore created a victory in the retention of some of the best farming land in Australia, that it will be kept for the production of food.

Ag Show 2010 The close association between the Queensland Farm and Industrial Machinery Dealers Division (QFIMDD) of MTA Queensland, the Royal Agricultural Society of Queensland (RASQ) Toowoomba, and Toowoomba Newspapers over the past 18 years has proved to be a very beneficial alliance to all parties involved. The alliance has been successful in staging one of the

most successful, renowned agricultural machinery exhibits in this country.

This year’s exhibit (31 August – 2 September) was again an outstanding event that delivered a show unequalled anywhere in Australia. The standard of exhibits continued to amaze all who attended. As Chairman of the QFIMDD, I commend the management committee in continually producing an Agricultural Machinery exhibition that offers and displays the widest range of equipment to all sectors of the agricultural community in this country.

each and every day of the show, the Heritage Ag Show in 2010 was a great success and the 2011 Show will again be an event not to be missed!

The Heritage Ag Show draws people not only from all over Australia, but continues to draw and foster relationships with manufacturers, farming groups and exhibitors from all over the world. Our visitors from overseas were overwhelmed with the diversity and wide varying range of agricultural equipment on display that suited all differing types of farming practices. Many exhibitors reported record sales achieved over the 3-day show.

Again the event kept to its promise that the Heritage Ag Show would offer something different to the farming community, as it is now well recognised as being the event where major new machinery releases are held. The show was an excellent opportunity for farming people to inspect differing makes and models and compare like machines to enable informed decisions to be made on major farming purchases. Every year at the Heritage Ag Show we see the newest farming aid inventions displayed to the public for the very first time. The level of competition in the Australian New Farm Invention in previous years has been fierce and again this year it was no different.

With the excellent facilities and venue of the Toowoomba RASQ, the largest machinery display in the country, and such a diverse array of differing events that continually happened throughout Motor Trades Association of Queensland 21

Queensland Motorcycle Industry Division

Firstly as chairman I would like to thank on behalf of the committee the Staff of MTAQ especially Kellie and Aynslee who helped keep the issues of the motorcycle industry alive and for representing us at government and industry meetings that I was unable to attend.

It is important that the QMID stay abreast of the issues faced by its members and the industry and this can only occur if members voice their opinions through this forum.

Paul Peterson Chairman QMID

22 Motor Trades Association of Queensland

The QMID and the industry, again had a fairly issue free year. Sales numbers are still well down on previous years but the market is steady. We again this year have seen several dealerships either close or get closed down due weak sales and uncertain times. The State Government is looking with QMSWG at motorcycle fatalities, safety and licensing. Issues arising from this will include alcohol levels, dress standards, new less graphic advertising campaigns and general public awareness, driver education etc.

Over the next 12 months the industry will be no doubt faced with more beaucratic issues relating to road safety, similar levels of sales volumes and distributers trying to get more unit sales by introducing more dealers. It is important that the QMID stay abreast of the issues faced by its members and the industry and this can only occur if members voice their opinions through this forum.

Tyre and undercar division of queenland

I am pleased to advise that with the merging of the Automotive Undercar Division and the Queensland Tyre Dealers & Retreaders Division, we now have stronger membership numbers with 195 business and an additional 32 locations for these members giving us a total membership base of 227.

John Ruddick Chairman TUDQ

I started this years’ report feeling a little déjà vu as it only seems like it was yesterday that I was sitting in front of the computer reflecting the year that had passed, and while the previous year was filled with the doom and gloom of the GFC, it feels like this one has been filled with politics.

On that topic, I’m sure many of you will have seen the television program highlighting the exporting of scrap tyres to Asia, to which there has now been a formal statement from the AIAA calling for the State & Federal governments to get behind a fully domestic market for recycled waste tyres.

This year saw our sitting Prime Minister deposed as leader and we now have our first elected female Prime Minister, I feel that it is going to be an interesting time in Federal politics for the foreseeable future.

We were informed earlier in the year that the National Code of Practice (NCOP) was accepted by Western Australia, however we still have the Tyre Fitment vs. Axle Load issue on our radar and will continue to work with Industry and Government at all levels to ensure that Members and Consumers interests and concerns are heard.

On to Divisional and Association news and matters, and with only two meetings this year it would be easy to say that not much has happened, however I am pleased to advise that with the merging of the Automotive Undercar Division and the Queensland Tyre Dealers & Retreaders Division (we are awaiting approval of our new divisional name – Tyre & Undercar Division of Queensland), we now have stronger membership numbers with 195 business and an additional 32 locations for these members giving us a total membership base of 227.

Earlier this year we also saw the formation of the new Australian Automotive Industry Association (AAIA). As many of you will recall the MTAQ ceased being a financial member of the MTAA several years ago and since then, both the VACC and MTANSW also ceased being financial members of the MTAA and with an open invitation to the other state associations; we have formed the new national industry body, the AAIA. On the local front, the Undercar members have seen legislation passed interstate, and then retracted, in relation to the lowering and raising of vehicles. Our policy team have had discussions with Queensland Transport to see if they are intending to call for submissions on this issue and on emissions legislation similar to that in NSW. There has been one meeting relating to the EPHC Product Stewardship Initiative with a second planned for November.

From site visits and conversations with tyre dealers throughout Australia I’m pleased to say that while there have been some slower periods throughout the year, in general business has been steady to strong.

On corporate news, at a recent Board meeting, the property committee was given approval to enter into negotiations with a commercial property developer to construct our new home at Eight Mile Plains. This state of the art administration and training facility will make the MTAQ Training department the premier automotive training facility in Australia.

As always, if you would like any further information on these and any other issues that are discussed at committee meetings, please log onto the MTAQ website to view and download all Member Bulletins or you could contact the MTAQ directly for a copy to be sent to you.

I would also like to remind all members that the MTAQ and this committee are here for you, so should you feel that there are any industry issues you would like addressed, please feel free to contact us so we can work with you to have your issues addressed.

In closing I would like take this opportunity to thank the staff at MTAQ and the Committee Members for their support throughout the year, I look forward to the challenges which lie ahead in 2011.

Motor Trades Association of Queensland 23

Rental Vehicle Industry Division

Rental Vehicle Industry Information Seminars were held by the office of Fair Trading across QLD during June with the Divisional Executive and some of the RVID committee members attending the Brisbane Seminar.

May 2009 saw the introduction of the ACCC’s Trade Practices Amendment “clarity in pricing”. Members at that time were invited to provide us with their experiences and the guidance document was finalised by the ACCC taking into account our members recommendations. The document was made available on the ACCC website and a link from the MTAQ Website in January 2010.

Rental Vehicle Industry Information Seminars were held by the office of Fair Trading across QLD during June with the Divisional Executive and some of the RVID committee members attending the Brisbane Seminar. The Seminars were held to inform those in the Industry of their Responsibilities under the Fair Trading Act 1989. Topics discussed included bait advertising, component pricing, unconscionable conduct, unfair contracts and the roles and functions of Fair Trading As the Division has had a quiet year we are expecting renewed activity and involvement of the Committee in the coming year.

24 Motor Trades Association of Queensland

Service Station and Convenience Store Association of Queensland

Ag Show 2010 This past year has been yet another difficult year for anyone involved on the Petroleum Retail Market, as we have all seen some of the major companies vie for market share through below cost selling and shopper docket systems.

We will be monitoring and evaluating the various policy positions that may affect us as a result of the recent Federal Election that saw the ALP form a minority government in a tightly contested campaign.

I have compiled below the issues that the Committee, MTAQ Staff and Myself have been working on over the past year.

The Police Link system has only come together after many years of hard work and lobbying from the MTAQ and is a great win for us Service Station Operators.

Tim Kane Chairman SSCSAQ

Award Changes Ted Kowalski has worked tirelessly on our behalf on the new Federal Award which was introduced in January of this year.

Of note the most significant change in the new award to effect our Division is the change which allows our staff the opportunity to become permanent rather than casual.

This is available to staff who have been employed for six months & must be provided in writing within 4 weeks of the 1st of July 2010. Ted Kowalski suggests reproducing Clause 13.3 and giving it to staff members.

Casual Rates are currently less in QLD compared to other states; the transitional amount between states will be phased out over 5 years. A bulletin has been sent out regarding this when the National Wage decision came down.

The final version of the new award is available on our website.

Australian Automotive Industry Association (AAIA) In the coming months, I am looking forward to working closely with the

other State bodies under the umbrella of the AAIA in formulating a National Agenda for the Service Station Industry, now that we have a National Body to work under.

Drive Offs Police Link System The reporting system of Drive-offs with the QPS has been changed, Senior Sergent Craig Powell of the QPS has worked on a new system for Service Stations to report Drive Offs. The new system is called Police Link and was commenced in August 2010.

Police Link will allow our members to call an operator service to report fuel theft & will be provided with a reference number. The new system will disseminate drive offs from other thefts.

MTAQ has released a member bulletin on how to access the Police Link system.

I must say this has only come together after many years of hard work and lobbying from the MTAQ and is a great win for us Service Station Operators.

ACCC and the sale of Mobil’s retail assets We provided submissions that the MTAQ’s view that any consideration of the trade sale of the Mobil retail assets to 7-Eleven should involve assessment of 7-Eleven’s business model and the consequences for competition and consumer outcomes in the event it is successful in acquiring the Mobil retail assets.

MTAQ did not object to the trade sale of the Mobil retail assets to 7-Eleven if the business model envisages independent retail price setting at the bowser and shelf level. If however, the business model envisages centralised intervention in retail pricing at the bowser and shelf levels, which implies cross subsidisation, MTAQ was concerned that in the longer term such a model could damage independent Motor Trades Association of Queensland 25

Service Station and Convenience Store Association of Queensland continued

and franchised fuel operators in the same market catchment causing a loss of real competition and to the detriment to the consumer.

The Australian Competition and Consumer Commission announced that it did not propose to intervene in the sale of Mobil’s retail assets to 7-Eleven and the on-sale of the South Australian assets to Peregrine Corporation, conditional on receiving undertakings from each acquirer to divest certain assets.

The ACCC has received confirmation from 7-Eleven that it will undertake to divest three sites, and also from Peregrine that it will undertake to divest one site.

The ACCC considers that the proposed acquisitions by 7-Eleven and Peregrine, when viewed with the proposed divestitures, will not substantially lessen competition in the relevant markets.

The ACCC is in ongoing discussions with 7-Eleven and Peregrine regarding the undertakings that each has agreed to provide and will provide further detail in due course.

ACCC – Woolworths and Coles In October 2009, we reacted to the excessive fuel discount offer by Coles Express, quickly emulated by Woolworths, of up to 40 cents per litre discounts subject to cross-subsidised store purchases of a specific value. We considered that the economic power of these duopolies discriminated against the independent operators and would be anti-competitive over the long term.

The ACCC acted decisively based on our submission and immediately made the supermarkets withdraw their offers.

Franchise Code of Conduct We provided submissions to amend the Franchise Code of Conduct under the Trade Practices Act 1974, which resulted in amendments that 26 Motor Trades Association of Queensland

became effective from July 1, 2010.

Under the new regulations that apply for new and renewed contracts, franchisees will have more protection and greater certainty in their dealings with franchisors. Amendments include requirements for franchisors to disclose more information on unilateral contract variations or confidentiality agreements and future capital expenditure obligations.

We have also provided submissions on the new Australian Consumer Law, which became effective from January 1, 2010. We strongly support the law being extended to business to business contracts and will continue to push this recommended provision with the new Federal Government.

I would like to thank all the MTAQ staff especially Kellie, Richard and Wendy, that without their constant support this organisation and division would not function to the high standards that it does.

I would also like to thank all the Committee, past and present members for their support and their input during the past year. I am looking forward to working with them again in the future, as the significant changes to the MTAQ in 2011 will prove to be beneficial for all members.

Used Car Division

Much has happened in the past year in the Used Car Industry.We’ve managed to achieve some positive changes with the Auctions, making them more accountable and in line with Dealer Industry standards.

I would like to give my best wishes to our staff at MTAQ and to all our members and look forward to a productive year ahead.

We are also in the process of negotiations with the Government concerning the status of Written Off Vehicles in Queensland and the legislative differences between Qld and NSW at present. We are pushing for uniform laws between the states, as NSW brought in new laws on 1st October, declaring that all Written Off vehicles will be declared Statutory Write Offs and unable to be sold again.

Certainly in the volatile economic climate that we now find ourselves in, business “adaptability” is a word that comes to mind.

Being able to change direction to meet consumer demands and expectations has never been more important.

Daryll Searle Chairman UCD

The push is still on for annual Safety Certificates (RWCs). We have had discussions with Qld Transport regarding this, which is obviously always going to be a contentious issue.

We’ve developed over the past year a very good open line of communication with the Office of Fair Trading through our well informed representative, Richard Payne, who has been a great asset to our division.

We, as members of MTAQ, need to be observant of our own industry and communicate with our Association when there are issues that need raising and addressing. It is only through the involvement of our members that things can be achieved.

Certainly in the volatile economic climate that we now find ourselves in, business “adaptability” is a word that comes to mind. Being able to change direction to meet consumer demands and expectations has never been more important.

We would certainly love to see a bigger turn out at our Used Car Division meetings. We need input to get fresh ideas and to formulate new policies.

Motor Trades Association of Queensland 27

Motor Trades Association Of Queensland Industrial Organisation Of Employers Financial Report For The Year Ended 30 June 2010

Statement Of Comprehensive Income

30

Statement Of Financial Position

31

Statement Of Cash Flows

32

Statement Of Changes In Equity

33

Notes To And Forming Part Of The Financial Statements Declaration By Members Of The Board Of MTA Queensland Independent Audit Report

34-49 50 51-52

Accounting Officer’s Certificate

53

Certificate By Members Of The Board Of MTA Queensland

54

Auditors Independence Declaration

55

STATEMENT OF COMPREHENSIVE INCOME For the year ended 30 June 2010

Note

2010 $

2009 $

2

10,001,310 7,821,272

Employee benefits expense

3

(4,813,083)

(4,973,061)

Freight and cartage

3

(43,751)

(46,004)

Depreciation and amortisation expenses

3

(231,564)

(236,292)

Commissions paid

3

(55,847)

(41,232)

Finance costs

3

(9,586)

(17,457)

Other expenses

3

(3,321,497)

(2,950,993)

8,475,328

(8,265,039)

Revenues EXPENSES

Total Expenses

PROFIT BEFORE INCOME TAX

1(b)

INCOME TAX EXPENSE

PROFIT/(LOSS) FOR THE YEAR

1,525,982 (443,767) - 1,525,982

(443,767)

(1,302,027)

(501,334)

OTHER COMPREHENSIVE INCOME Revaluation of available for sale investment Total comprehensive income/(loss) for the year

223,955

(945,101)

Profit attributable to: Members of the Organisation

1,525,982 (443,767)

Total Comprehensive Income attributable to : Members of the Organisation

The accompanying notes form part of the financial report

30 Motor Trades Association of Queensland Industrial Organisation of Employers

223,955

(945,101)

STATEMENT OF FINANCIAL POSITION As at 30 June 2010

Note

2010 $

2009 $

ASSETS Current assets Cash and cash equivalents

4

3,965,634

3,261,469

Short Term Deposit

5

1,500,000

615,450

Trade and other receivables

6

1,513,479

1,069,786

Inventories

7

88,399 55,293

Other

8

135,878 80,357

Total Current Assets

7,203,390

5,082,355

Non-current assets Other

9

- 369,347

Intangible asset

10

58,444

41,899

Other financial assets

11

3,442,074

4,884,101

Property, Plant & Equipment

12

5,952,130

6,088,853

Total non-current assets

9,452,648

11,384,200

TOTAL ASSETS

16,656,038

16,466,555

835,796

LIABILITIES Current liabilities Trade and other payables

13

809,289

Provisions

14

109,638 62,140

Other liability

15

250,663

100,620

Financial liability

16

43,517

247,375

Total current liabilities

1,213,107

1,245,931

Non-current liabilities Provisions

14

103,384 61,515

Financial liability

16

67,082

110,599

Total non-current liabilities

170,466

172,114

TOTAL LIABILITIES

1,383,573

1,418,045

NET ASSETS

15,272,465

15,048,510

MEMBERS’ FUNDS Reserves

17

4,078,928 5,380,955

Retained Earnings

18

11,193,537

9,667,555

TOTAL MEMBERS’ FUNDS

15,272,465

15,048,510

The accompanying notes form part of the financial report Motor Trades Association of Queensland Industrial Organisation of Employers 31

Statement of Cash Flow For the year ended 30 June 2010

Note

2010 $

2009 $

Cash receipts from customers

11,261,490

10,551,363

Dividends received

242,250

306,424

Interest received

175,050

244,640

Cash Flows From Operating Activities

Cash paid to suppliers and employees NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES 20 (b)

(11,096,545)

z(10,937,684)

582,245

164,743

Proceeds - sale of other non-current assets

26,250

-

Proceeds – sale of investments

1,341,002

-

Cash Flows From Investing Activities

Purchase of property, plant and equipment

(69,216)

Payment for investments

(44,192)

Payment for short term deposit

(884,550)

(101,570) (615,450)

Payment for capital expenditure

-

(141,009)

Proceeds from sale of property plant and equipment

-

20,864

369,294

(837,165)

Repayment of borrowings

(247,375)

(88,754)

NET CASH INFLOW/(OUTFLOW) FROM FINANCING ACTIVITIES

(247,375)

(88,754)

Net Increase / (Decrease) in cash and cash equivalents

704,164

(761,176)

Cash and cash equivalents at the beginning of the period

3,261,469

4,022,645

CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD 20 (a)

3,965,633

3,261,469

NET CASH INFLOW/(OUTFLOW) FROM INVESTING ACTIVITIES

Cash Flows From Financing Activities

The accompanying notes form part of the financial report

32 Motor Trades Association of Queensland Industrial Organisation of Employers

Statement of Changes in Equity For the year ended 30 June 2010

Note

BALANCE AT 1 JULY 2008 Net loss

Asset Revaluation Retained Reserve Earnings

Total

5,882,289 10,111,322 15,993,611 -

(443,767)

(443,767)

Other comprehensive income

(501,334)

Total comprehensive income

(501,334) (443,767) (945,101)

BALANCE AT 30 JUNE 2009

17,18

BALANCE 1 JULY 2009 Net Profit

5,380,955

-

9,667,555

(501,334)

15,048,510

5,380,955 9,667,555 15,048,510 - 1,525,982 1,525,982

Other comprehensive income

(1,302,027)

Total comprehensive income

(1,302,027) 1,525,982

BALANCE AT 30 JUNE 2010

17,18

4,078,928

-

11,193,537

(1,302,027) 223,955

15,272,465

The accompanying notes form part of the financial report

Motor Trades Association of Queensland Industrial Organisation of Employers 33

Notes to and Forming Part of the Financial Statements For the year ended 30 June 2010

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES The financial report is a general purpose financial report that has been prepared in accordance with Accounting Standards, including Australian Accounting Interpretations and other authoritative pronouncements of the Australian Accounting Standards.

The financial report covers the Motor Trades Association of Queensland as an individual entity. Motor Trades Association of Queensland is a Union of Employers governed by the Industrial Organisations Act 1997 within Queensland and the Workplace Relations Act at a national level.

The financial report of Motor Trades Association of Queensland complies with all Australian equivalents to International Financial Reporting Standards (AIFRS) in their entirety.

The following is a summary of the material accounting policies adopted by the Association in the preparation of the financial report. The accounting policies have been consistently applied, unless otherwise stated.

Basis of Preparation The accounting policies set out below have been consistently applied to all years presented.

Reporting Basis and Conventions The financial report has been prepared on an accruals basis and is based on historical costs modified by the revaluation of selected non-current assets, financial assets and financial liabilities for which the fair value basis of accounting has been applied.

Accounting Policies a. Associated Entities Motor Trades Association of Queensland owns and controls a number of associated entities.

The following are the associated entities: MTAQ Ltd MTA Institute of Technology Pty Ltd All entities have a June financial year end. Transactions which relates to these entities are conducted on trust for Motor Trades Association of Queensland and are brought to account by the Motor Trades Association of Queensland. b. Income Tax The association is exempt from income tax under section 50-40 of the Australian Income Tax assessment Act 1999. c. Inventories Inventories are measured at the lower of cost and net realisable value. Costs are assigned on the basis of weighted average costs. d. Property, Plant and Equipment Each class of property, plant and equipment is carried at cost or fair value less, where applicable, any accumulated depreciation and impairment losses.

Property Freehold land and buildings are shown at their fair value (being the amount for which an asset could be exchanged between knowledgeable willing parties in an arm’s length transaction), based on periodic, but at least triennial, valuations by external independent valuers, less subsequent depreciation for buildings.

Increases in the carrying amount arising on revaluation of land and buildings are credited to a revaluation reserve in equity.

Decreases that offset previous increases of the same asset are charged against fair value reserves directly in equity; all other decreases are charged to the income statement. Each year the difference between depreciation based on the revalued carrying amount of the asset charged to the income statement and depreciation based on the asset’s original cost is transferred from the revaluation reserve to retained earnings. Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset.

Plant and equipment Plant and equipment are measured on the cost basis less depreciation and impairment losses.

34 Motor Trades Association of Queensland Industrial Organisation of Employers

The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the assets’ employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.

Depreciation The depreciable amount of buildings is depreciated on a straight line basis with all other fixed assets and capitalised lease assets, but excluding freehold land, is depreciated on a diminishing value basis over their useful lives to the Association commencing from the time the asset is held ready for use. Leased assets are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the assets.

The depreciation rates used for each class of depreciable assets are: Class of Fixed Asset Depreciation Rate

Buildings 5% Plant and equipment 15 – 60% Motor Vehicles 30% Leased Assets 20% Fixtures and Fittings 20% The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains or losses are included in the income statement. When revalued assets are sold, amounts included in the revaluation reserve relating to that asset are transferred to retained earnings. e. Financial Instruments Recognition Financial instruments are initially measured at cost on trade date, which includes transaction costs, when the related contractual rights or obligations exist. Subsequent to initial recognition these instruments are measured as set out below.

Financial assets at fair value through profit and loss A financial asset is classified in this category if acquired principally for the purpose of selling in the short term or if so designated by management and within the requirements of AASB 139: Financial Instruments: Recognition and Measurement. Realised and unrealised gains and losses arising from changes in the fair value of these assets are included in the income statement in the period in which they arise.

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 stated at amortised cost using the effective interest rate method.

Held-to-maturity investments These investments have fixed maturities, and it is the group’s intention to hold these investments to maturity. Any held-tomaturity investments held by the group are stated at amortised cost using the effective interest rate method.

Available-for-sale financial assets Available-for-sale financial assets include any financial assets not included in the above categories. Available-for-sale financial assets are reflected at fair value. Unrealised gains and losses arising from changes in fair value are taken directly to equity.

Motor Trades Association of Queensland Industrial Organisation of Employers 35

Notes to and Forming Part of the Financial Statements For the year ended 30 June 2010

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES continued

Financial liabilities Non-derivative financial liabilities are recognised at amortised cost, comprising original debt less principal payments and amortisation.

Fair value Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to determine the fair value for all unlisted securities, including recent arm’s length transactions, reference to similar instruments and option pricing models.

Impairment At each reporting date, the group assesses whether there is objective evidence that a financial instrument has been impaired. In the case of available-for-sale financial instruments, a prolonged decline in the value of the instrument is considered to determine whether an impairment has arisen. Impairment losses are recognised in the income statement. f. Impairment of Assets At each reporting date, the group reviews the carrying values of its tangible and intangible assets to determine whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is compared to the asset’s carrying value.

Any excess of the asset’s carrying value over its recoverable amount is expensed to the income statement.

Where it is not possible to estimate the recoverable amount of an individual asset, the group estimates the recoverable amount of the cash-generating unit to which the asset belongs. g. Employee Benefits Provision is made for the company’s liability for employee benefits arising from services rendered by employees to balance date. 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, plus related on-costs. 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. h. Provisions Provisions are recognised when the group 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. i. Cash and Cash Equivalents Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within shortterm borrowings in current liabilities on the balance sheet. j. Revenue Revenue from the sale of goods is recognised upon the delivery of goods to customers.

Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets.

Dividend revenue is recognised when the right to receive a dividend has been established. Dividends received from associates and joint venture entities are accounted for in accordance with the equity method of accounting.

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

All revenue is stated net of the amount of goods and services tax (GST). k. Borrowing Costs Borrowing costs directly attributable to the acquisition, construction or production of assets that necessarily take a substantial period of time to prepare for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use of sale.

All other borrowing costs are recognised in income in the period in which they are incurred.

36 Motor Trades Association of Queensland Industrial Organisation of Employers

l. 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 Tax Office. In these circumstances, the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the balance sheet are shown inclusive of GST. Cash flows are presented in the cash flow statement on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows. m. Leases Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset, but not the legal ownership that are transferred to entities in the association, are classified as finance leases.

Finance leases are capitalised by recording an asset and a liability at the lower of the amounts equal to the fair value of the leased property or the present value of the minimum lease payments, including any guaranteed residual values. Lease payments are allocated between the reduction of the lease liability and the lease interest expense for the period.

Leased assets are depreciated on a straight-line basis over the shorter of their estimated useful lives or the lease term. n. Comparative Figures When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year. o. Capital Management The directors of the Association control the capital to ensure that the Association can fund its operations and continue as a going concern. The Association manages capital primarily through receipt of membership and training revenue and profits generated from business activities. There has been no change in the current year to this approach. p. Critical Accounting Estimates and Judgments The directors evaluate estimates and judgments incorporated into the financial report 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 group

Key estimates — Impairment The group assesses impairment at each reporting date by evaluating conditions specific to the group that may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined. Value-in-use calculations performed in assessing recoverable amounts incorporate a number of key estimates.

The financial report was authorised for issue on the 6th day of October 2010 by the board of directors.

Motor Trades Association of Queensland Industrial Organisation of Employers 37

Notes to and Forming Part of the Financial Statements For the year ended 30 June 2010

2010 $

2009 $

40,000

45,000

133,035

150,978

70,787

36,475

6,421,371

5,856,009

Sale of publications

324,523

303,996

Sale of stationery

321,541

314,727

Interest from other persons

214,455

228,402

Members subscriptions & entrance fees

848,783

821,983

50,000

35,000

MTAA House dividend

152,250

226,424

Rent

180,037 62,675

NOTE 2: REVENUES Revenues From Operating Activities Agricultural Show Distribution Commissions received Industrial services income Training services

MTQ Insurance dividend

Sundry income

17,278

23,528

NET REVENUE FROM OPERATING ACTIVITIES

8,774,060

8,105,197

Gain/(loss) on disposal of asset

1,227,250

(283,925)

10,003,310

7,821,272

Accounting & Audit Fees

33,728

43,249

Advertising & Promotion

42,005

39,156

-

6,668

Bad & Doubtful Debts

33,204

20,188

Bank Charges

23,776

17,493

378,626

164,647

TOTAL REVENUE FROM OPERATING ACTIVITIES

NOTE 3: EXPENSES Expenses From Operating Activities

Affiliation Fees

Building Relocation Cleaning

30,692 44,914

Cost of goods sold – Publications

171,840

132,600

Cost of goods sold – Stationery

159,530

161,758

Cost of goods sold - Training

282,171

193,766

Commissions

55,847 41,232

Computer Upgrades

68,046

91,911

Consultants fees

305,207

251,827

Depreciation & Amortisation

231,564

236,292

38 Motor Trades Association of Queensland Industrial Organisation of Employers

Director Fees

2010 $

2009 $

273,456

37,000

Donations

3,727 23,167

Entertainment

3,246 4,934

Fees

13,988 13,197

Fringe Benefits Tax

25,831

Insurance

70,861 58,617

Interest Legal Costs

36,176

9,586 17,457 254,440

141,024

Light & Power

21,741

27,542

Meetings - Catering Board

16,917

26,561

Travel Staff – Airfares/Accommodation

59,629

56,297

5,386

6,145

49,866

51,446

-

640,477

119,442

93,351

Office Supplies

59,480

31,560

Packaging & Posting

43,751

46,004

218,321

218,722

Personnel – Engagement

10,098

17,905

Personnel – Long Service

103,358

23,890

3,950,811

3,932,369

Personnel – Salary Sacrifice

69,984

72,799

Personnel – Superannuation

470,609

725,281

Personnel – Uniforms

14,632

12,633

Personnel – Training

46,934

28,856

Printing & Stationery

14,429

23,565

Rates & Taxes

38,405

36,765

Rental on operating leases

52,316

35,656

Meetings – Catering Staff Travel Board – Airfares/Accommodation Motor Show Expenses Motor Vehicle - Fuel

Payroll Tax

Personnel – Salaries & Wages

Rental Repairs & Maintenance Other Security Special Projects Sponsorships

353,656 101,833 26,875

42,061

4,623 2,579 339

564

7,180 4,231

Motor Trades Association of Queensland Industrial Organisation of Employers 39

Notes to and Forming Part of the Financial Statements For the year ended 30 June 2010

2010 $

2009 $

Staff Amenities

18,079

16,165

Subscriptions

48,820 18,855

Technical Journals

11,290

NOTE 3: EXPENSES continued

Telecommunications

17,888

130,062 122,700

Web Site

23,433

29,970

-

9,213

13,491

13,360

8,475,328

8,265,039

Cash on hand

700

1,300

Cash at Bank

290,771

494,408

Cash on deposit

3,674,163

2,765,761

3,965,634

3,261,469

1,500,000

615,450

Accounts Receivable

511,364

322,117

Less: Provision for impairment of trade receivables

(29,347)

482,017

317,323

Sundry Debtors

917,146

687,200

GST Receivable

62,987

53,340

Unearned Interest on Investments

51,329

11,923

1,513,479

1,069,786

2009 Amount Impaired $’000

Amount not impaired $’000

Workshop Supplies Workers Compensation TOTAL EXPENSES FOR OPERATING ACTIVITIES

NOTE 4: CASH AND CASH EQUIVALENTS (CURRENT)

NOTE 5: SHORT TERM DEPOSIT Term Deposits greater than 3 months

NOTE 6: TRADE AND OTHER RECEIVABLES (CURRENT)

Total Receivables

Total

$’000

2010 Amount Impaired $’000

Amount not impaired Total $’000 $’000

(4,794)

Not past due

154,376

154,376

155,352

155,352

Past due [30] days

127,504

127,504

62,885

62,885

Past due [30-60] days

24,518

24,518

28,310

28,310

Past due [60-90] days

87,755

87,755

81,818

77,024

(6,248)

Past due [>90] days

117,211

29,347

87,864

Total

511,364

29,347

482,017

40 Motor Trades Association of Queensland Industrial Organisation of Employers

322,117

4,794

4,794

(6,248) 317,323

2010 $

2009 $

Opening Balance

4,794

35,950

Provisions for doubtful receivables

33,204

4,986

Receivables written off during the year

(8,651)

(5,571)

Analysis of Impairment Account

Reversal of amounts provided

-

-

Closing balance

29,347

4,794

(i) Provision for Impairment of Receivables Current trade receivables are on 30 day terms except for the apprenticeship tuition fees. The total amount for tuition fees as at 30th June 2010 was $244,018, these debts are generally on a six month terms basis. These receivables are assessed for recoverable and provision for impairment is recognised based on historical levels of bad debts.

NOTE 7: INVENTORIES (CURRENT) Finished Goods - Stationery

88,399

55,293

General Prepayments

135,878

80,357

135,878

80,357

-

369,347

NOTE 8: OTHER ASSETS (CURRENT)

NOTE 9:OTHER ASSETS (NON-CURRENT) Capitalised Development Costs

NOTE 10: INTANGIBLE ASSETS Software

147,601 103,409

Less: Accumulated Amortisation

(89,157)

Written Down Value

58,444

41,899

Total Written down Value of Intangible Assets

58,444

41,899

(a) Movement in carrying amounts

-

-

Balance at the beginning of the year

41,899

51,534

Additions

44,192 -

(61,510)

Software

Amortisation/Write offs

(27,647)

(9,635)

Carrying amount at the end of the year

58,444

41,899

Motor Trades Association of Queensland Industrial Organisation of Employers 41

Notes to and Forming Part of the Financial Statements For the year ended 30 June 2010

2010 $

2009 $

Units MTAA House Unit Trust at directors’ valuation, 2009

-

3,679,101

Units MTAA House Unit Trust at directors’ valuation, 2010

3,437,074

-

Shares QASA at cost

5,000

5,000

Shares MTQ Insurance at directors’ valuation

-

1,200,000

3,442,074

4,884,101

NOTE 11: OTHER FINANCIAL ASSETS (NON-CURRENT) Investments in Unlisted Entities classified as available for sale

The basis of valuation of Units held in MTAA House is at fair value based net assets as at June 2009. MTAQ Ltd holds 21 units of a total 115 units. The valuation is based on 18.26% of net assets held by MTAA Unit Trust.

The basis of valuation of shares in QASA is at cost.

NOTE 12: PROPERTY, PLANT & EQUIPMENT (NON-CURRENT) Land & Buildings at valuation (2008)

5,800,000

Less: Accumulated Depreciation

(159,099)

(74,362)

Written Down Value

5,640,901

5,725,638

111,264

107,989

Less: Accumulated Depreciation

(78,475)

(65,693)

32,789

42,296

504,878

438,936

Less: Accumulated Depreciation

(337,302)

(266,553)

167,576

172,383

Motor Vehicles at cost

47,885

78,125

Less: Accumulated Depreciation

(38,153)

(56,961)

9,732

21,164

Leased Assets at cost

161,868

161,868

Less: Accumulated Depreciation

(60,736)

(34,496)

Written Down Value

101,132

127,372

6,625,895

6,586,918

Less: Accumulated Depreciation

(673,765)

(498,065)

TOTAL WRITTEN DOWN VALUE OF PROPERTY, PLANT & EQUIP.

5,952,130

6,088,853

Fixtures & Fittings at cost

Written Down Value Plant & Equipment at cost

Written Down Value

Written Down Value

Total Property, Plant & Equipment

5,800,000

The basis of valuation of Land & Buildings at valuation (2008) undertaken by an independent valuer in June 2008 by Taylor Byrne Valuers (073815 registered valuation number) MTA Queensland board approved management to list West End property for sale from 1st July 2010. a) Movement in carrying amounts.

42 Motor Trades Association of Queensland Industrial Organisation of Employers

Movement in the carrying amounts for each class of property, plant and equipment between the beginning and the end of the current financial year.

Land and

Buildings

Fixtures & Fittings

Plant & Equipment

42,296

172,383

5,725,638

Motor Leased Vehicles Assets

21,164

127,372

6,088,853

Additions

- 3,275 65,941

Disposals

-

Revaluations

- - - - - -

Depreciation Carrying amount at the end of the year

-

32,789

- 69,216

- (2,022)

(84,737) (12,782) (70,748) 5,640,901

-

Total

167,576

- (2,022)

(9,410) (26,240) (203,917) 9,732

101,132

5,952,130

b) MTAQ has an over draft facility for an amount of $500,000 which remained unused at 30 June 2010. The overdraft facility is secured by the land and buildings which has a written down value of $5,640,901 at 30 June 2010. c) MTAQ has a bank guarantee with Westpac for $181,720 on the sublease of office premises in Cannon Hill from GM Holden Ltd.

2010 $

2009 $

NOTE 13: TRADE AND OTHER PAYABLES (CURRENT) Creditors

89,309 206,938

Accrued Expenses

379,346

311,835

Annual Leave (Note 14a)

340,634

317,023

809,289

835,796

109,638

62,140

103,384

61,515

553,656

440,678

58

58

Long-term Employee Benefits

Annual leave Current Non-current

$ $ $

Total $

NOTE 14: EMPLOYEE BENEFIT PROVISION Current Provision for Long Service Leave (a) Non Current Provision for Long Service Leave (a) (a) Aggregate employee entitlement liability.

Average number of employees during the reporting period

Opening balance at 1 July 2009

317,023

62,140

61,515

440,678

Additional provisions raised during the year

252,000

65,037

41,869

358,906

Amounts used Amounts reversed Balance at 30 June 2010

(228,389)

(13,991)

-

- (3,548) 340,634

109,638

(242,380)

- (3,548)

103,384

553,656

Provision for Long-term Employee Benefits A provision has been recognised for employee benefits relating to long service leave for employees. In calculating the present value of future cash flows in respect of long service leave, the probability of long service leave being taken is based upon historical data. The measurement and recognition criteria for employee benefits has been included in Note 1(g).

Motor Trades Association of Queensland Industrial Organisation of Employers 43

Notes to and Forming Part of the Financial Statements For the year ended 30 June 2010

2010 $

2009 $

Other Payables

34,812

34,719

Subscriptions and Unearned Income Received in advance

215,851

65,901

250,663

100,620

Current Lease Liability

43,517

247,375

Non-current Lease Liability

67,082

110,599

110,599

357,974

Balance at beginning of financial year

5,380,955

5,882,290

Revaluation increment in investments

(1,302,027)

(501,335)

4,078,928

5,380,955

Accumulated surpluses at the beginning of the year

9,667,555

10,111,323

Reclassification of Asset Reserves

-

-

Net profit attributable to the association

1,525,982

(443,768)

11,193,537

9,667,555

Motor Trades Association – Queensland

9,011,802

7,530,181

Australian Automobile Dealers Association (Qld)

1,331,227

1,315,403

Queensland Motorcycle Industry Division

18,005

17,150

Rental Vehicle Industry Division

529

89

Automotive Engineers Division

97,614

92,714

Engine Reconditioners Association of Queensland

3,737

2,626

National Auto Collision Alliance

11,141

10,309

Queensland Tyre Dealers and Retreaders Division

34,700

31,908

Used Car Division

128,912

127,593

Auto Electrical Specialists Division

32,392

30,632

Auto Parts Recyclers Division

28,077

7,553

Automotive Undercar Division

8,333

27,126

NOTE 15: OTHER LIABILITIES (CURRENT)

NOTE 16: INTEREST BEARING LIABILITIES

NOTE 17: RESERVES

Asset Revaluation Reserve

NOTE 18: ACCUMULATED SURPLUSES / (DEFICIT)

Accumulated surpluses at the end of the year Represented By Division

Service Station & Convenience Store Association of Queensland

191,219

201,190

Queensland Farm & Industrial Machinery Dealers Division

295,849

273,081

11,193,537

9,667,555

44 Motor Trades Association of Queensland Industrial Organisation of Employers

NOTE 19: CONTINGENT ASSETS/LIABILITIES Contingent Liabilities MTAQ Limited, a wholly owned subsidiary, holds units representing 18.3% of all voting entitlements in MTAA Unit Trust (Trust).

During the year MTAQ Limited initiated legal action to have the Trustee reverse the allotment of units to a non-unit holder in contravention of the Trust Deed. On 4 June 2010 the Supreme Court of Queensland ordered that the allotment of units be reversed and that MTAQ Limited’s legal costs be paid out of the Trust’s assets on an indemnity basis as agreed between the parties. No allowance for the recovery of these legal costs has been made in the Financial Report at 30 June 2010 as the parties have not agreed on the quantum of costs to be paid.

During the year MTAQ Limited joined with other unit holders who collectively held 60% of all voting entitlements in the Trust to replace the Trustee. At a unit holder meeting held on 21 June 2010 the majority unit holders voted to replace the Trustee.

The Trustee, despite a covenant in the Trust Deed requiring then to resign upon the passing of an ordinary resolution by unit holders, refuses to resign. MTAQ Limited and other unit holders are considering their options. Under the Trustee Deed the costs of replacing the Trustee are recoverably out of Trust assets. No allowance for the recovery of these legal costs has been made in the Financial Report at 30 June 2010.

2010 $

2009 $

Within one year

335,214

323,878

After one year, but not more than five years

465,949

801,163

803,173

1,127,051

Cash on hand

700

1,300

Cash at bank

290,771

494,408

Cash on deposit

3,674,163

2,765,761

3,965,634

3,261,469

1,525,982

(443,767)

Commitments Operating lease commitments Non-cancellable operating leases contracted for but not capitalised in the financial statements:

NOTE 20: CASH FLOW INFORMATION a) Reconciliation of Cash

b) Reconciliation of net cash provided by operating activities to operating surplus after income tax: Operating Surplus / (Deficit) Non-cash flows in operating profit: Depreciation

231,564 236,292

Decrease/ Increase in Doubtful Debts: Loss (Profit) on sale of assets

(1,225,228)

283,925

Decrease / (Increase) in receivables

(404,288)

60,315

Decrease / (Increase) in inventory

(33,106)

32,325

Increase / (decrease) in interest receivable

(39,405)

16,238

Changes in assets and liabilities:

Motor Trades Association of Queensland Industrial Organisation of Employers 45

Notes to and Forming Part of the Financial Statements For the year ended 30 June 2010

2010 $

2009 $

NOTE 20: CASH FLOW INFORMATION continued Increase/ (decrease) in other assets

(55,522)

7,929

Increase/ (decrease) in payables

(26,510)

80,547

Increase/(decrease) in Capital costs

369,347

-

Increase / (decrease) in provisions

89,368

24,569

Increase/ (decrease) in unearned income

150,043

-

Increase / (decrease) in other liabilities

-

(133,631)

582,245

164,743

Net cash provided by / (used in) operating activities c) Credit-Standby Arrangement & Loan Facilities

MTAQ has a bank overdraft facility amounting to $500,000. At 30 June 2010 the facility remained unused. The facility is reviewed annually and interest rates are variable.

NOTE 21: RELATED PARTIES a) Officers’ Remuneration and Other Transactions The Board Members’ businesses are all current members of the association and also purchase Stationary from the association which are on standard terms.

MTQ Insurance Services Limited paid Motor Trades Association of Queensland dividends to the value of $50,000 in the 2010 financial year while Mr Ian Field was the Treasurer for MTA-Q and a Director of MTQ Insurance. These shares were sold during the financial year 2010 to the value of $1,341,000, profit on sale of asset $1,060,000 included in the accounts.

Gregory Klease was paid $39,337 and David Weatherall was paid $1,650 for providing consulting services to the group.

Director fees paid during the financial year 2009-10 were $273,456.

Apart from the above, there was no other Related Party Transaction during the financial year ended 30th June 10.

Names of Officers who held office during the year are: Gregory Klease

Len Daddow

Rodney Pether

David Weatherall

Dean Turner

John Ruddick

Ian Field

Glen Ford

Daryll Searle

Charlie Serchen

Ian Goble

Paul Peterson

Graham Winter

Steve Eaton

David Fraser

Tim Kane

Mark Bryers

Mark Bryers

Les Tickell

Stephen Ghost

Craig Harris

Mark Brady

Thomas Barton

2010 $

2009 $

a) Amounts contributed / allocated by MTA-Q Corporate to other MTA-Q divisions representing $20 membership renewal.

29,280

25,720

b) Success fees at the rate of 36% paid to Corporate division of MTA-Q for monies raised by divisions’ activities.

32,400

14,400

NOTE 22: INTER-DIVISION CONTRIBUTIONS AND PAYMENTS

The above amounts are eliminated upon consolidation of the Corporate division with other divisions and are not disclosed in revenues and expenses disclosed in Notes 2 and 3 respectively. Refer Note 18 for list of divisions.

46 Motor Trades Association of Queensland Industrial Organisation of Employers

NOTE 23: FINANCIAL RISK MANAGEMENT a. General objectives, policies and processes Motor Trades Association of Queensland (MTAQ) is exposed to risks that arise from its use of financial instruments. This note describes the company’s objectives, policies and processes for managing those risks and the methods used to measure them.

Further quantitative information in respect of these risks is presented throughout these financial statements.

There have been no substantive changes in the entity’s exposure to financial instrument risks, its objectives, policies and processes for managing those risks or the methods used to measure them from previous periods unless otherwise stated in this note.

The principal financial instruments from which financial instrument risk arises are: - Trade receivables - Cash at bank - Trade payables - Leased liability The Board of MTAQ has overall responsibility for the determination of the MTAQ risk management objectives and polices as well as designing and operating processes that ensure the effective implementation of the objectives and policies to the entity.

MTAQ’s risk management policies and objectives are therefore designed to minimise the potential impacts of these risks on the results where such impacts may be material. The Board receives bi annual reports from the Finance Manager of MTAQ, through which it reviews the effectiveness of the processes put in place and the appropriateness of the objectives and policies it sets. The overall objective of the Board is to set polices that seek to reduce risk as far as possible without unduly affecting MTAQ competitiveness and flexibility. Further details regarding these policies are set out below:

b. Credit Risk Credit risk is the risk that the other party to a financial instrument fails to discharge their obligation resulting in MTAQ incurring a financial loss. This usually occurs when debtors fail to settle their obligations owing to MTAQ.There is no concentration of credit risk with respect to receivables. The group does not have any material credit risk exposure to any single debtor or group of debtors under financial instruments entered into by the company.

The maximum exposure to credit risk at balance date is as follows:

2010 $

Receivables

2009 $

511,363 322,117

The company’s most significant customer accounts for trade receivables at 30 June 2010 was $58,500 (2009: $24,994).

c. Liquidity Risk Liquidity risk is the risk that the entity may encounter difficulties raising funds to meet commitments associated with financial instruments. It is the policy of the Board of Directors of MTAQ, to maintain adequate committed credit facilities. The unused bank overdraft credit facility at balance date was $500,000. The bank overdraft facilities may be drawn down at any time but may be terminated by the bank without notice.

Carrying Contractual Amount Cash flows < 6 mths 6- 12 mths

1-3 years

Maturity Analysis - 2010 Financial Liabilities Trade and other payables

809,289

809,289

Lease liability

110,599 110,599 23,664 23,664 63,271

TOTAL

919,888

919,888

809,289

832,953

-

23,664

-

63,271

Motor Trades Association of Queensland Industrial Organisation of Employers 47

Notes to and Forming Part of the Financial Statements For the year ended 30 June 2010

NOTE 23: FINANCIAL RISK MANAGEMENT contiinued

Carrying Contractual Amount Cash flows < 6 mths 6- 12 mths

1-3 years

Maturity Analysis - 2009 Financial Liabilities Trade and other payables

835,796

835,796

835,796

-

-

Lease liability

357,974

357,974

226,291

15,136

116,547

1,193,770 1,193,770

1,062,087

15,136

116,547

TOTAL

d. Interest Rate Risk The companyâ&#x20AC;&#x2122;s exposure to interest rate risk, which is the risk that a financial instrumentâ&#x20AC;&#x2122;s value will fluctuate as a result of changes in market interest rates and the effective weighted average interest rates on those financial assets and financial liabilities, is as follows: Weighted Average Effective Interest Rate

2010 2009

% %

Floating Interest Rate Non-Interest Bearing 2010 2009 2010 2009 $ $ $ $

2010 $

Total

2009 $

Financial Assets Cash

6.23 3.96

Receivables Total Financial Assets

5,465,634

3,876,919

-

-

5,465,634

3,876,919

-

-

5,465,634 3,876,919

1,513,479 1,069,786

1,513,479 1,069,786

1,513,479 1,069,786

6,979,113 4,946,705

Financial Liabilities Trade & other payables Lease liability

-

-

809,289

835,796

809,289

835,796

4.20

4.29

110,599

357,974

-

-

110,599

357,974

110,599

357,974

809,289

835,796

919,888

1,193,770

Total Financial Liabilities

e. Net Fair Values The net fair values for all assets and liabilities approximates their carrying values. No financial assets and financial liabilities are readily traded on organised markets in a standardised form. Financial assets where the carrying amount exceeds net fair values have not been written down as the company intends to hold these assets to maturity.

f. Sensitivity Analysis Management has performed a sensitivity analysis relating to its exposure to interest rate risk at balance date. The only borrowings are in the form of finance leases for which the interest rate is fixed for the term of the lease, therefore there is no risk to the increase of interest rates to the profit and loss position of the entity.

Short-term

benefit

Post employment benefits

NOTE 24: KEY MANAGEMENT PERSONNEL COMPENSATION 2010 Total compensation

681,562

93,610

569,373

268,374

2009 Total compensation

48 Motor Trades Association of Queensland Industrial Organisation of Employers

2010 $

2009 $

34,500

33,000

385

30,238

NOTE 25: AUDITORS REMUNERATION Audit Audit of the financial report

Non-audit services Other services

The directors are satisfied that the provision of non-audit services, during the year, by the auditor (or another person or firm on behalf of the auditor), is compatible with general standard of independence for auditors imposed by corporations Act 2001.

Key management personnel include directors and five key executives of the organisation.

Note

2010 $

2009 $

— not later than 12 months

47,328

270,802

— between 12 months and five years

69,219

116,547

Minimum lease payments

116,547

387,349

Less future finance charges

5,948

29,375

110,599

357,974

NOTE 26: CAPITAL AND LEASING COMMITMENTS Finance Lease Commitments Payable — minimum lease payments

Present value of minimum lease payments

16

The finance lease on office equipment comprises a 5 year lease which commenced in October 2007 for $222,054.81.

The equipment is being leased directly from the manufacturer with lease payments paid monthly. The interest rate implicit in that lease is 4.20%.

NOTE 27: ACCOUNTING STANDARDS ISSUED NOT YET EFFECTIVE There are a number of accounting standards that have been issued but are not yet effective. The organisation does not expect any material impact on financial statements from the impending changes. However, various additional disclosures will be required in the financial statements in future periods.

NOTE 28: EVENTS AFTER BALANCE SHEET DATE Subsequent to the balance date, MTA Queensland board approved management to list West End property for sale from 1st July 2010.

NOTE 29: REGISTERED OFFICE Motor Trades Association – Queensland 1000 Wynnum Road CANNON HILL QLD 4170

Motor Trades Association of Queensland Industrial Organisation of Employers 49

Declaration by Members of the Board Of MTA Queensland

In the opinion of the board of MTA-Q the financial report as set out on pages 30 to 49: 1. Present fairly the financial position of the Motor Trades Association of Queensland Industrial Organisation of Employers as at 30 June 2010 and the results and cash flows of the Association for the year ended on that date in accordance with Australian Accounting Standards and other mandatory professional reporting requirements.

2. At the date of this statement, there are reasonable grounds to believe that Motor Trades Association of Queensland Industrial Organisation of Employers will be able to pay its debts as and when they fall due.

This statement is made in accordance with a resolution of the board of MTA-Q and is signed for and on behalf of the Committee by:

David Fraser President

Paul Peterson Treasurer Dated this 6th day of October 2010

50 Motor Trades Association of Queensland Industrial Organisation of Employers

Independent Audit Report

To the Members of Motor Trades Association of Queensland Industrial Organisation of Employers

Report on the Financial Report We have audited the accompanying financial report of MTAQ, which comprises the statement of financial position as at 30 June 2010, and statement of comprehensive income, statement of changes in equity and statement of cash flows for the year ended on that date, a summary of significant accounting policies, other explanatory notes and the directors’ declaration by the Members of the Board.

Directors’ Responsibility for the Financial Report The directors are responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Industrial Organisations Act 1997. This responsibility includes establishing and maintaining internal controls relevant to the preparation and fair presentation of the financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditor’s Responsibility 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. These Auditing 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 auditor’s judgement, 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 entity’s preparation and fair presentation of the financial report 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 entity’s 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.

The financial statements have been prepared for distribution to members for the purpose of fulfilling the financial reporting requirements under the Industrial Relations Act 199. We disclaim any assumption of responsibility for any reliance on this report or on the financial statements to which it relates to any person other than the members, or for any purpose other than that for which it was prepared.

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

Motor Trades Association of Queensland Industrial Organisation of Employers 51

Independent Audit Report continued

Independence In conducting our audit, we have complied with the independence requirements of the Australian professional accounting bodies.

Auditorâ&#x20AC;&#x2122;s Opinion In our opinion the financial report presents fairly, in all material respects, the financial position of Motor Trades Association Queensland Industrial Organisation of Employers as of 30 June 2010 and of its financial performance and cash flows for the year then ended in accordance with accounting policies described in Note 1 to the financial statements.

BDO Audit (QLD) Pty Ltd

D P Wright Director Brisbane Dated this 6th day of October 2010

52 Motor Trades Association of Queensland Industrial Organisation of Employers

Accounting Officerâ&#x20AC;&#x2122;s Certificate

I, Kathy Winkcup, being the officer responsible for keeping the accounting records of the Motor Trades Association of Queensland Industrial Organisation of Employers, certify that as at 30 June 2010 the number of financial members of the Association was 1,497, and the number of non-financial members was nil.

In my opinion: (i) the attached financial report shows a true and fair view of the financial affairs of the Association as at 30 June 2010; (ii) a record has been kept of all moneys paid by, or collected from, members and all moneys so paid and collected have been credited to the bank account to which those moneys are to be credited, in accordance with the rules of the Association; (iii) expenditure incurred by the Association was approved under the Associationâ&#x20AC;&#x2122;s Rules before it was incurred. (iv) with regard to the funds of the Association raised by compulsory levies from members, or funds other than the General Fund operated in accordance with the rules, no payments were made of any such fund for purposes other than those for which the fund was operated; (v) all financial benefits granted to employees were allowed under the Associations rules. There were no loans or financial benefits given to persons holding office in the Association; (vi) the register of members of the Association was maintained in accordance with the Act.

Kathy Winkcup Chief Financial Officer Dated this 6th day of October 2010

Motor Trades Association of Queensland Industrial Organisation of Employers 53

Certificate by Members of the Board of MTA Queensland

In the opinion of the board of management the financial report: 1. Presents fairly the financial position of the Motor Trades Association of Queensland Industrial Organisation of Employers as at 30 June 2010 and the results and cash flows of the Association for the year ended on that date in accordance with Australian Accounting Standards and the Industrial Relations Act. 2. At the date of this statement, there are reasonable grounds to believe that Motor Trades Association - Queensland Industrial Organisation of Employers will be able to pay its debts as and when they fall due.

3. Meetings of the Board of MTA-Q were held during the year ended 30 June 2010, in accordance with the rules of the association.

4. To the knowledge of the Board of Management, there have been no instances where records, rules or copies of them have not been given to the Associationâ&#x20AC;&#x2122;s members under the Act. 5. The Audit report and accounts for the Associationâ&#x20AC;&#x2122;s financial year ended 30 June 2010 have been presented to an annual general meeting of the Association, and given to all financial members at that time.

This statement is made in accordance with a resolution of the board of MTA-Q and is signed for and on behalf of the Committee by:

David Fraser President

Paul Peterson Treasurer Dated this 6th day of October 2010

54 Motor Trades Association of Queensland Industrial Organisation of Employers

Auditors Independence Declaration

Declaration of Independence by D P Wright to the Directors of Motor Trades Association of Queensland Limited (MTAQ Ltd) In relation to our audit of the Financial Report of MTAQ Ltd for the year ended 30 June 2010, to the best of my knowledge and belief, there have been: â&#x20AC;˘ No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and â&#x20AC;˘ No contraventions of any applicable code of professional conduct in relation to the audit.

This declaration is in respect of MTAQ Ltd.

Damian Wright Director BDO Audit (QLD) Pty Ltd Brisbane Dated this 6th day of October 2010

Motor Trades Association of Queensland Industrial Organisation of Employers 55

Board Members 2009-2010

David Fraser President Chairman, Queensland Farm and Industrial Machinery Dealer Division (QFIMDD)

Paul Peterson Treasurer/Secretary Chairman, Queensland Motorcycle Industry Division (QMID)

Mark Bryers Vice President Chairman, Engine Reconditioners Association Qld (ERAQ)

Steve Eaton Vice President representing Far North Queensland region

Len Daddow Chairman, Australian Automobile Dealers Association (AADA(Q)

Glen Ford Chairman, Auto Parts Recyclers Division (APRD)

Tim Kane Chairman, Service Station & Convenience Store Association Qld (SSCSAQ)

John Ruddick Chairman, Tyre & Undercar Division of Qld (TUDQ)

Charlie Serchen Chairman, Automotive Engineers Division (AED)

Daryll Searle Chairman, Used Car Division (UCD)

Casual Vacancy Chairman, Rental Vehicle Industry Division (RVID)

David Weatherall Chairman, National Auto Collision Alliance (NACA)

Craig Harris representing Central Queensland region

Graham Winter representing South West region

Rod Pether representing North Queensland region

Dean Turner representing South East (North) region

56 Motor Trades Association of Queensland Industrial Organisation of Employers

1000 Wynnum Road, Cannon Hill Queensland 4170 PO Box 560, Morningside Queensland 4170 p: (07) 3237 8777 f: (07) 3844 4488 tf: 1800 177 951 www.mtaq.com.au

MTA Institute of Technology 1000 Wynnum Road, Cannon Hill Queensland 4170 PO Box 560, Morningside Queensland 4170 p: (07) 3722 3000 f: (07) 3722 3030 tf: 1800 884 137 www.mtaq.com.au