2014 EAC Annual Report by Estate Agents Co-operative

Annual Report 2014

Estate Agents Co-operative Limited ABN 52 079 055 637

Financial Statements For the Year Ended 30 June 2014

Estate Agents Co-operative Ltd and Controlled Entity Annual Report 2014

Estate Agents Co-operative Limited ABN 52 079 055 637

Contents For the Year Ended 30 June 2014

Notice of Annual General Meeting

Chairman’s Report 2014

Director’s Report

Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001

9 Page

Financial Statements Statement of Profit or Loss and Other Comprehensive Income Notice of Annual General Meeting Chairman's Report StatementReport of Financial Position Directors' Auditors Independence Declaration under Section 307C of the Corporations Act 2001 Statement or Loss and Other Comprehensive Income Statement of of Profit Changes in Equity Statement of Financial Position Statement of Changes in Equity Statement of Cash Flows Statement of Cash Flows Notes to the Financial Statements Notes to the Financial Statements Directors' Declaration Independent Auditor's Report Director’s Declaration

Independent Auditor’s Report

Estate Agents Co-operative Ltd and Controlled Entity Annual Report 2014

10 11 12 13 14 40 41

4 5 6 9 10 11 12 13 14 40 41

Estate Agents Co-operative Limited ABN 52 079 055 637

Notice of Annual General Meeting

Notice is hereby given that the fifty fourth Annual General Meeting of Shareholders of the Estate Agents Cooperative Limited will be held at: Estate Agents Co-operative Limited 2A/175 James Ruse Drive, Rosehill NSW 2142 On Wednesday 22nd October, 2014 at 10.00AM. BUSINESS · To confirm the Minutes of the 2013 Annual General Meeting. · To receive the report of the Board of Directors. · To receive the financial statements for the year ended 30 th June 2014 and the report of the auditors thereon. · To announce the appointment of Directors for the ensuing period and fix their remuneration. · To appoint the Co-operative Auditors for the ensuing year. · Any other business – notice of which has been given in accordance with the rules. Note: The financial statements and reports will be available for inspection as the registered office of the Cooperative seven days before the meeting and will be on the EAC website.

By order of the Board

David J Crombie Chief Executive Officer / Co-operative Secretary

Estate Agents Co-operative Ltd and Controlled Entity Annual Report 2014

Estate Agents Co-operative Limited ABN 52 079 055 637

Chairman's Report I am pleased to present the Co-operative's 2014 Annual Report. The loss of the Co-operative for the financial year after providing for income tax amounted to ($25,862), below forecast. Trading continued to be affected by a tight market which has impacted significantly upon all publications with page numbers down this year. This is due to the fact that nationally listing numbers have continued a downward trend and this shortage of stock has created a somewhat overheated market where days on market have reduced substantially. As a result the need for multiple ads on most properties is no longer necessary. The ongoing streamlining of processes has enabled the publications to still return a profit, all be it reduced, however we do not see the market changing in the short term and this is reflected in this year’s forecasts for EAC’s publications. The extra resources in development have seen some new products rolled out during the year, eForms is now in a What You See Is What You Get format that makes the whole process even easier than before and integration of data from 3rd parties into forms is also well advanced with MyDesktop users being the first to benefit. Our role as an affiliate member of the REIA grew stronger this year with another very successful NSW auctioneering Championships and recently, for the first time in 4 years, we have been able to run a NSW Awards of Excellence where the winners will finally get their chance to compete on the national stage for the ultimate price of “the best in the nation”. We feel this has been an important plus for our members and other affiliates who have previously not been able to enter these awards and show their talents. We wish all the NSW winners all the very best at the national awards to be held in Perth in March 2015. The board continued its trend of connecting with regional areas with board meetings held in Tamworth and Dubbo this year. In line with this desire to connect more with regional areas I am very pleased to announce that there will be an additional regional board member on the board this year. There have been a number of nominations for the casual vacancy that currently exists, however as at the time of writing this report, voting had not taken place. The mere fact that there will be competition for positions on the board is, I believe, is a great indicator that the Co-operative has a very strong future with increasing member connection. Our relationship with the State Government continued to be strong over the last year with a number of meetings with both Stuart Ayres and more recently with Mathew Mason-Cox in relation to a number of industry issues and our submissions on the review of the act. The year also included the retirement of EAC’s longest serving employee John Carson. John was with the Cooperative for a total of 43 years, starting from the mail room to become the CEO, a rare feat indeed in today’s corporate world. In closing I would like to thank and acknowledge the continuing efforts of our dedicated staff and the board for their support and efforts throughout the year.

Dale Whittaker Chairman

Estate Agents Co-operative Ltd and Controlled Entity Annual Report 2014

Estate Agents Co-operative Limited ABN 52 079 055 637 Directors' Report 30 June 2014

The directors of Estate Agents Co-operative Limited submit herewith the annual report of the Co-operative for the financial year ended 30 June 2014. In order to comply with the provisions of the Corporations Act 2001, the directors report as follows: Information about the directors The names of the directors of the Co-operative during or since the end of the financial year are: D. R. Whittaker (Chairman) P. A. Carmont (Vice Chairman) A. D. Chapman E. J. Hanson W. Herrmann J. P. Ronis J. F. Sercombe The above named directors held office during the whole of the financial year and since the end of the financial year. Principal activities The principal activity of Estate Agents Co-operative Limited during the financial year were: - Agency Practice Support - Information related services including: • Listing Management • Property Information • Current Market Information • Electronic Newsletters • CRM • Online Property Searches - Web services including: • Web Site Design and Creation • Web Site Hosting • Email Hosting • Social Media - realestateworld.com.au - realestateworld.com.au Publications; - Real Estate Forms and Stationery No significant changes in the nature of the Co-operative's activity occurred during the financial year.

Estate Agents Co-operative Ltd and Controlled Entity Annual Report 2014

Estate Agents Co-operative Limited ABN 52 079 055 637 Directors' Report 30 June 2014 Review of operations The (loss)/income of the Co-operative after providing for income tax amounted to $ (25,863) (2013: $ 392,273). Dividends No dividends were paid or declared since the start of the financial year. No recommendation for payment of dividends has been made. Changes in the state of affairs There have been no significant changes in the state of affairs of the Co-operative during the year. Subsequent events There has not been any matter or circumstance occurring subsequent to the end of the financial year that has significantly affected or may significantly affect, the operations of the Co-operative, the results of those operations or the state of affairs of the Co-operative in future financial years. Future developments Likely developments in the operations of the Co-operative and the expected results of those operations in future financial years have not been included in this report as the inclusion of such information is likely to result in unreasonable prejudice to the Co-operative. Environmental regulations The Co-operative's operations are not regulated by any significant environmental regulations under a law of the Commonwealth or of a state or territory of Australia. Shares under option or issued on exercise of options No options over issued shares or interests in the Co-operative were granted during or since the end of the financial year and there were no options outstanding at the date of this report. No shares or interests in the Co-operative have been issued during or since the end of the financial year as a result of the exercise of an option over unissued shares or interests. Indemnification of officers or auditors During the financial year, the Co-operative paid a premium in respect of a contract insuring the directors of the Co-operative (as named above), the Co-operative's secretary, Mr David Crombie, and all executive officers of the Co-operative and of any related body corporate against a liability incurred as such a director, secretary or executive officer to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium. The Co-operative has not otherwise, during or since the end of the financial year, except to the extent permitted by law, indemnified or agreed to indemnify an officer or auditor of the Co-operative or of any related body corporate against a liability incurred as such an officer or auditor.

Estate Agents Co-operative Ltd and Controlled Entity Annual Report 2014

Estate Agents Co-operative Limited ABN 52 079 055 637 Directors' Report 30 June 2014 Insurance premiums paid for directors The Co-operative has paid premiums to insure each of the directors against liabilities for costs and expenses incurred by them in defending any legal proceedings arising out of their conduct while acting in the capacity of Director of the Co-operative, other than conduct involving a wilful breach of duty in relation to the Co-operative. Proceedings on behalf of Co-operative No person has applied for leave of court to bring proceedings on behalf of the Co-operative or intervene in any proceedings to which the Co-operative is a party for the purpose of taking responsibility on behalf of the Co-operative for all or any part of those proceedings. The Co-operative was not a party to any such proceedings during the year. Auditor's independence declaration The auditorâ&#x20AC;&#x2122;s independence declaration is included after this report. This directorsâ&#x20AC;&#x2122; report is signed in accordance with a resolution of directors made pursuant to s.298(2) of the Corporations Act 2001. On behalf of the Directors

Director: ......................................................... P A Carmont

Director: ................................................................ W. Herrmann

Dated this 13th day of October 2014

Estate Agents Co-operative Ltd and Controlled Entity Annual Report 2014

Estate Agents Co-operative Limited ABN 52 079 055 637 Statement of Profit or Loss and Other Comprehensive Income For the Year Ended 30 June 2014 2014 $ 5,026,772

2013 $ 5,765,888

102,007 (370,548) (214,650) (2,768,154) (17,178) (37,104) (1,093,403) (175,245)

74,105 (342,704) (199,670) (2,824,531) (17,239) (36,589) (1,411,894) (175,030)

(498,033)

(668,089)

(45,536) 19,674

164,247 228,026

(25,862)

392,273

Note 2

Revenue Other income Administration expenses Depreciation and amortisation expense Employee benefits expense Finance costs Raw materials and consumables used Realtor prepress, distribution and printing expenses Occupancy expenses

2 11

Other expenses Profit/(loss) before income tax Income tax expense

Profit/(loss) for the year Other comprehensive income, net of income tax Items that will not be reclassified subsequently to profit or loss Items that may be reclassified subsequently to profit or loss: Total comprehensive income/(loss) for the year

(25,862)

392,273

The accompanying notes form part of these financial statements Estate Agents Co-operative Ltd and Controlled Entity Annual Report 2014

Estate Agents Co-operative Limited ABN 52 079 055 637 Statement of Financial Position As At 30 June 2014

Note ASSETS CURRENT ASSETS Cash and cash equivalents Trade and other receivables Inventories Other financial assets Other assets

6 7 8 9 10

TOTAL CURRENT ASSETS NON-CURRENT ASSETS Other assets Property, plant and equipment Other intangible assets Deferred tax assets TOTAL ASSETS

NON-CURRENT LIABILITIES Deferred tax liabilities Borrowings Long-term provisions

491,844 639,559 36,163 1,838,223 113,414

2,943,015

3,119,203

12,180 122,748 401,471 484,152

12,180 154,241 428,343 520,090

1,020,551

1,114,854

3,963,566

4,234,057

760,873 113,523 430,857

925,341 117,805 466,983

1,305,253

1,510,129

52,961 140,942 73,719

108,573 139,950 58,852

267,622

307,375

1,572,875

1,817,504

2,390,691

2,416,553

1,370,477 1,020,214

1,370,477 1,046,076

2,390,691

2,416,553

14 15 16

TOTAL CURRENT LIABILITIES 13 15 16

TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS

EQUITY Reserves Retained Earnings

TOTAL EQUITY

2013 $

449,675 500,388 43,616 1,838,223 111,113

10 11 12 13

TOTAL NON-CURRENT ASSETS

LIABILITIES CURRENT LIABILITIES Trade and other payables Borrowings Short-term provisions

2014 $

The accompanying notes form part of these financial statements

Estate Agents Co-operative Ltd and Controlled Entity Annual Report 2014

Estate Agents Co-operative Limited ABN 52 079 055 637

Statement of Changes in Equity For the Year Ended 30 June 2014

Capital Profits Reserve $

Retained Earnings $

Comprehensive income Loss for the year Other comprehensive income for the year, net of income tax Total comprehensive income for the year Balance at 30 June 2014 Balance at 1 July 2012 Comprehensive income Profit for the year Other comprehensive income for the year, net of income tax Total comprehensive income for the year Balance at 30 June 2013

Total $

1,153,637 -

1,020,214

1,153,637

216,840 2,390,691

653,803

1,153,637

216,840 2,024,280

392,273

1,046,076

1,153,637

1,046,076 -

Balance at 1 July 2013

Asset Share Revaluation Redemption Reserve Reserve $ $

(25,862) (25,862)

216,840 2,416,553 (25,862) (25,862)

216,840 2,416,553

The accompanying notes form part of these financial statements

Estate Agents Co-operative Ltd and Controlled Entity Annual Report 2014

Estate Agents Co-operative Limited ABN 52 079 055 637

Statement of Cash Flows

For the Year Ended 30 June 2014

2014 $

Note CASH FLOWS FROM OPERATING ACTIVITIES: Receipts from trading activities and subscriptions Payments to suppliers and employees Interest received Finance costs

5,453,069 (5,434,434) 100,495 (17,178)

2013 $ 6,261,436 (5,994,085) 92,800 (17,239)

Net cash provided by (used in) operating activities

101,952

342,912

CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from sale of plant and equipment Payments of property, plant and equipment Purchase of held to maturity financial assets

15,455 (156,286) -

21,451 (240,010) (38,223)

Net cash used by investing activities

(140,831)

(256,782)

CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from borrowings Repayment of borrowings

(3,290)

120,903 -

Net cash used by financing activities

(3,290)

120,903

(42,169) 491,844

207,033 284,811

449,675

491,844

Net increase (decrease) in cash and cash equivalents held Cash and cash equivalents at beginning of year Cash and cash equivalents at end of financial year

The accompanying notes form part of these financial statements

Estate Agents Co-operative Ltd and Controlled Entity Annual Report 2014

Estate Agents Co-operative Limited ABN 52 079 055 637 Notes to the Financial Statements For the Year Ended 30 June 2014 1

Summary of Significant Accounting Policies Statement of compliance These financial statements are general purpose financial statements which have been prepared in accordance with the Corporations Act 2001 and Australian Accounting Standards – Reduced Disclosure Requirements, and comply with other requirements of the law. For the purposes of preparing the financial statements, the Co-operative is a for-profit entity. The financial statements were authorised for issue by the directors on 13th October 2014. Basis of preparation The financial statements have been prepared on the basis of historical cost, except for certain properties and financial instruments that are measured at revalued amounts or fair values at the end of each reporting period, as explained in the accounting policies below. Historical cost is generally based on the fair values of the consideration given in exchange for assets. All amounts are presented in Australian dollars, unless otherwise noted. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Co-operative takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in the financial statements is determined on such a basis, except for share-based payment transactions that are within the scope of AASB 2, leasing transactions that are within the scope of AASB 117, and measurements that have some similarities to fair value but are not fair value, such as net realisable value in AASB 2 or value in use in AASB 136. In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows: •

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Co-operative can access at the measurement date;

• Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and •

Level 3 inputs are unobservable inputs for the asset or liability.

Estate Agents Co-operative Ltd and Controlled Entity Annual Report 2014

Estate Agents Co-operative Limited ABN 52 079 055 637 Notes to the Financial Statements For the Year Ended 30 June 2014 1

Summary of Significant Accounting Policies continued The principal accounting policies are set out below Accounting policies (a)

Revenue and other income Revenue is measured at the fair value of the consideration received or receivable. Revenue is reduced for rebates and other similar allowances. Sale of goods Revenue from the sale of goods is recognised at the point of delivery as this corresponds to the transfer of significant risks and rewards of ownership of the goods and the cessation of all involvement in those goods. Dividend revenue and interest income Dividend income from investments is recognised when the shareholderâ&#x20AC;&#x2122;s right to receive payment has been established (provided that it is probable that the economic benefits will flow to the Cooperative and the amount of income can be measured reliably). Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the Co-operative and the amount of revenue can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that assetâ&#x20AC;&#x2122;s net carrying amount on initial recognition.

(b)

Income tax Current income tax expense The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit before tax as reported in the statement of profit or loss and other comprehensive income because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Co-operativeâ&#x20AC;&#x2122;s current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period. Deferred tax Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

Estate Agents Co-operative Ltd and Controlled Entity Annual Report 2014

Estate Agents Co-operative Limited ABN 52 079 055 637 Notes to the Financial Statements For the Year Ended 30 June 2014 1

Summary of Significant Accounting Policies continued (b)

Income tax continued Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, except where the Co-operative is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Co-operative expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. Deferred tax liabilities and assets are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Co-operative intends to settle its current tax assets and liabilities on a net basis. Current and deferred tax for the year Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case the current and deferred tax are also recognised in other comprehensive income or directly in equity, respectively. Where current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination.

(c)

Inventories Inventories are measured at the lower of cost and net realisable value. Net realisable value represents the estimated selling price for inventories less all costs necessary to make the sale.

(d)

Property, plant and equipment Each class of property, plant and equipment is carried at cost or fair value as indicated less, where applicable, any accumulated depreciation and impairment losses.

Estate Agents Co-operative Ltd and Controlled Entity Annual Report 2014

Estate Agents Co-operative Limited ABN 52 079 055 637 Notes to the Financial Statements For the Year Ended 30 June 2014 1

Summary of Significant Accounting Policies continued (d)

Property, plant and equipment continued Plant and equipment Fixtures and equipment are stated at cost less accumulated depreciation and accumulated impairment losses. Depreciation Depreciation is recognised so as to write off the cost or valuation of asset less their residual values over their useful lives, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis. The depreciation rates used for each class of depreciable assets are:

Class of Fixed Asset Buildings Plant and Equipment Computer Equipment Computer Software Other Property, Plant and Equipment

Depreciation Rate 2.5% 5% - 40% 12.5% - 40% 12.5% - 40% 5% - 40%

Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets. However, when there is no reasonable certainty that ownership will be obtained by the end of the lease term, assets are depreciated over the shorter of the lease term and their useful lives. An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss.

Estate Agents Co-operative Ltd and Controlled Entity Annual Report 2014

Estate Agents Co-operative Limited ABN 52 079 055 637 Notes to the Financial Statements For the Year Ended 30 June 2014 1

Summary of Significant Accounting Policies continued (e)

Leases Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases. The Co-operative as lessee Assets held under finance leases are initially recognised as assets of the Co-operative at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included in the statement of financial position as a finance lease obligation. Lease payments are apportioned between finance expenses and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance expenses are recognised immediately in profit or loss, unless they are directly attributable to qualifying assets, in which case they are capitalised in accordance with the Co-operative’s general policy on borrowing costs. Contingent rentals are recognised as expenses in the periods in which they are incurred. Operating lease payments are recognised as an expense on a straight-line basis over the lease term, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. Contingent rentals arising under operating leases are recognised as an expense in the period in which they are incurred. In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability. The aggregate benefit of incentives is recognised as a reduction of rental expense on a straight-line basis, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

(f)

Financial instruments Financial assets and financial liabilities are recognised when the Co-operative becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss. Financial assets Financial assets are classified into the following specified categories: financial assets ‘at fair value through profit or loss’ (FVTPL), ‘held-to-maturity’ investments, ‘available-for-sale’ (AFS) financial assets and ‘loans and receivables’. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.

Estate Agents Co-operative Ltd and Controlled Entity Annual Report 2014

Estate Agents Co-operative Limited ABN 52 079 055 637 Notes to the Financial Statements For the Year Ended 30 June 2014 1

Summary of Significant Accounting Policies continued (f)

Financial instruments continued Effective interest method The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees on points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the debt instrument, or (where appropriate) a shorter period, to the net carrying amount on initial recognition. Income is recognised on an effective interest basis for debt instruments other than those financial assets classified as at FVTPL. (i)

Financial assets at FVPTL

Financial assets are classified as at FVTPL when the financial asset is either held for trading or it is designated as at FVTPL. A financial asset is classified as held for trading if: •

it has been acquired principally for the purpose of selling it in the near term; or

•

on initial recognition it is part of a portfolio of identified financial instruments that the Cooperative manages together and has a recent actual pattern of short-term profit-taking; or

•

it is a derivative that is not designated and effective as a hedging instrument.

A financial asset other than a financial asset held for trading may be designated as at FVTPL upon initial recognition if: • such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or •

the financial asset forms part of a group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the Cooperative's documented risk management or investment strategy, and information about the grouping is provided internally on that basis; or

•

it forms part of a contract containing one or more embedded derivatives, and AASB 139 ‘Financial Instruments: Recognition and Measurement’ permits the entire combined contract to be designated as at FVTPL.

Financial assets at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any dividend or interest earned on the financial asset and is included in the ‘other gains and losses’ line item. Fair value is determined in the manner described in Note 21.

Estate Agents Co-operative Ltd and Controlled Entity Annual Report 2014

Estate Agents Co-operative Limited ABN 52 079 055 637 Notes to the Financial Statements For the Year Ended 30 June 2014 1

Summary of Significant Accounting Policies continued (f)

Financial instruments continued (ii)

Loans and receivables

Trade receivables, loans, and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as ‘loans and receivables’. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment. Interest income is recognised by applying the effective interest rate, except for short-term receivables when the effect of discounting is immaterial. (iii) Held-to-maturity investments Bills of exchange and debentures with fixed or determinable payments and fixed maturity dates that the Co-operative has the positive intent and ability to hold to maturity are classified as held-tomaturity investments. Held-to-maturity investments are measured at amortised cost using the effective interest method less any impairment. (iv) AFS financial assets Listed shares and listed redeemable notes held by the Co-operative that are traded in an active market are classified as AFS and are stated at fair value. Investments in unlisted shares that are not traded in an active market are also classified as AFS financial assets and stated at fair value. Fair value is determined in the manner described in Note 20. Gains and losses arising from changes in fair value are recognised in other comprehensive income and accumulated in the investments revaluation reserve, with the exception of impairment losses, interest calculated using the effective interest method, and foreign exchange gains and losses on monetary assets, which are recognised in profit or loss. Where the investment is disposed of or is determined to be impaired, the cumulative gain or loss previously accumulated in the investments revaluation reserve is reclassified to profit or loss. Dividends on AFS equity instruments are recognised in profit or loss when the Co-operative’s right to receive the dividends is established. (v)

Financial liabilities

Financial liabilities are classified as either financial liabilities ‘at FVTPL’ or ‘other financial liabilities’. Financial liabilities at FVTPL Financial liabilities are classified as at FVTPL when the financial liability is either held for trading or it is designated as at FVTPL. A financial liability is classified as held for trading if: • it has been incurred principally for the purpose of repurchasing it in the near term; or •

on initial recognition it is part of a portfolio of identified financial instruments that the Cooperative manages together and has a recent actual pattern of short-term profit-taking; or

•

it is a derivative that is not designated and effective as a hedging instrument.

Estate Agents Co-operative Ltd and Controlled Entity Annual Report 2014

Estate Agents Co-operative Limited ABN 52 079 055 637 Notes to the Financial Statements For the Year Ended 30 June 2014 1

Summary of Significant Accounting Policies continued (f)

Financial instruments continued A financial liability other than a financial liability held for trading may be designated as at FVTPL upon initial recognition if: • such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or • the financial liability forms part of a group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the Cooperative's documented risk management or investment strategy, and information about the grouping is provided internally on that basis; or •

Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any interest paid on the financial liability and is included in the ‘other gains and losses’ line item. Fair value is determined in the manner described in Note 21. Financial guarantee contract liabilities A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payments when due in accordance with the terms of a debt instrument. Financial guarantee contract issued by a Co-operative are initially measured at their fair values and, if not designated as at FVTPL, are subsequently measured at the higher of: •

the amount of the obligation under the contract, as determined in accordance with AASB 137‘Provisions, Contingent Liabilities and Contingent Assets’; and

• the amount initially recognised less, where appropriate, cumulative amortisation recognised in accordance with the revenue recognition policies set out at (a).

Estate Agents Co-operative Ltd and Controlled Entity Annual Report 2014

Estate Agents Co-operative Limited ABN 52 079 055 637 Notes to the Financial Statements For the Year Ended 30 June 2014 1

Summary of Significant Accounting Policies continued (f)

Financial instruments continued Other financial liabilities Other financial liabilities, including borrowings and trade and other payables, are initially measured at fair value, net of transaction costs. Other financial liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis. The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition. Derecognition of financial liabilities The Co-operative derecognises financial liabilities when, and only when, the Co-operative’s obligations are discharged, cancelled or they expire. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in profit or loss. Impairment of financial assets Financial assets, other than those at FVTPL, are assessed for indicators of impairment at the end of each reporting period. Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected. For certain categories of financial assets, such as trade receivables, assets that are assessed for impairment on a collective basis even if they were assessed not to be impaired individually. Objective evidence of impairment for a portfolio of receivables could include the Co-operative’s past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period of 60 days, as well as observable changes in national or local economic conditions that correlate with default on receivables. For financial assets carried at amortised cost, the amount of the impairment loss recognised is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate. For financial assets that are carried at cost, the amount of the impairment loss is measured as the difference between the asset’s carrying amount and the present value of the estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such impairment loss will not be reversed in subsequent periods. The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss.

Estate Agents Co-operative Ltd and Controlled Entity Annual Report 2014

Estate Agents Co-operative Limited ABN 52 079 055 637 Notes to the Financial Statements For the Year Ended 30 June 2014 1

Summary of Significant Accounting Policies continued (f)

Financial instruments continued Impairment of financial assets continued When an AFS financial asset is considered to be impaired, cumulative gains or losses previously recognised in other comprehensive income are reclassified to profit or loss in the period. For financial assets measured at amortised cost, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised. In respect of AFS equity securities, impairment losses previously recognised in profit or loss are not reversed through profit or loss. Any increase in fair value subsequent to an impairment loss is recognised in other comprehensive income and accumulated under the heading of investments revaluation reserve. In respect of AFS debt securities, impairment losses are subsequently reversed through profit or loss if an increase in the fair value of the investment can be objectively related to an event occurring after the recognition of the impairment loss. Derecognition of financial assets The Co-operative derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party. If the Co-operative neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Cooperative recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Co-operative retains substantially all the risks and rewards of ownership of a transferred financial asset, the Co-operative continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received. On derecognition of a financial asset in its entirety, the difference between the asset's carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognised in other comprehensive income and accumulated in equity is recognised in profit or loss. On derecognition of a financial asset other than in its entirety (e.g. when the Co-operative retains an option to repurchase part of a transferred asset), the Co-operative allocates the previous carrying amount of the financial asset between the part it continues to recognise under continuing involvement, and the part it no longer recognises on the basis of the relative fair values of those parts on the date of the transfer. The difference between the carrying amount allocated to the part that is no longer recognised and the sum of the consideration received for the part no longer recognised and any cumulative gain or loss allocated to it that had been recognised in other comprehensive income is recognised in profit or loss. A cumulative gain or loss that had been recognised in other comprehensive income is allocated between the part that continues to be recognised and the part that is no longer recognised on the basis of the relative fair values of those parts.

Estate Agents Co-operative Ltd and Controlled Entity Annual Report 2014

Estate Agents Co-operative Limited ABN 52 079 055 637 Notes to the Financial Statements For the Year Ended 30 June 2014 1

Summary of Significant Accounting Policies continued (g)

Impairment of tangible assets At the end of each reporting period, the Co-operative reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the Co-operative estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified. Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease. When an impairment loss subsequently reverses, the carrying amount of the asset (or cashgenerating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

(h)

Employee benefits A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave, long service leave, and sick leave when it is probable that settlement will be required and they are capable of being measured reliably. Liabilities recognised in respect of short-term employee benefits, are measured at their nominal values using the remuneration rate expected to apply at the time of settlement. Liabilities recognised in respect of long term employee benefits are measured as the present value of the estimated future cash outflows to be made by the Co-operative in respect of services provided by employees up to reporting date.

Estate Agents Co-operative Ltd and Controlled Entity Annual Report 2014

Estate Agents Co-operative Limited ABN 52 079 055 637 Notes to the Financial Statements For the Year Ended 30 June 2014 1

Summary of Significant Accounting Policies continued (i)

Provisions Provisions are recognised when the Co-operative has a present obligation (legal or constructive) as a result of a past event, it is probable that the Co-operative will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (where the effect of the time value of money is material). When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

(j)

Cash and cash equivalents Cash and cash equivalents include cash on hand, deposits held at call with banks, and other shortterm highly liquid investments with original maturities of three months or less.

(k)

Trade and other payables Trade and other payables represent the liabilities outstanding for goods and services received by the Co-operative that remain unpaid at the end of the reporting period. The balance is recognised as a current liability with the amounts normally paid within 30 days of recognition of the liability.

(l)

Goods and services tax (GST) Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except: i.

where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as part of the cost of acquisition of an asset or as part of an item of expense; or

ii.

for receivables and payables which are recognised inclusive of GST.

The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables. Cash flows are included in the cash flow statement on a gross basis. The GST component of cash flows arising from investing and financing activities which is recoverable from, or payable to, the taxation authority is classified within operating cash flows. (m)

Comparative figures When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year.

Estate Agents Co-operative Ltd and Controlled Entity Annual Report 2014

Estate Agents Co-operative Limited ABN 52 079 055 637 Notes to the Financial Statements For the Year Ended 30 June 2014 1

Summary of Significant Accounting Policies continued (n)

Critical accounting judgments and key sources of estimation uncertainty In the application of the Co-operative’s accounting policies, the directors of the Co-operative are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. Critical judgements in applying accounting policies The following are the critical judgements, apart from those involving estimations, that the directors have made in the process of applying the Co-operative’s accounting policies and that have the most significant effect on the amounts recognised in the consolidated financial statements. Held-to-maturity financial assets The directors have reviewed the Co-operative’s held-to-maturity financial assets in the light of its capital maintenance and liquidity requirements and have confirmed the Co-operative’s positive intention and ability to hold those assets to maturity. The carrying amount of the held-to-maturity financial assets is $1.8 million (30 June 2013: $1.8 million). Details of these assets are set out in Note 9. Key sources of estimation uncertainty The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. Useful lives of property, plant and equipment As described at Note (e) above, the Co-operative reviews the estimated useful lives of property, plant and equipment at the end of each reporting period.

Estate Agents Co-operative Ltd and Controlled Entity Annual Report 2014

Estate Agents Co-operative Limited ABN 52 079 055 637 Notes to the Financial Statements For the Year Ended 30 June 2014 1

Summary of Significant Accounting Policies continued (o)

Adoption of new and revised accounting standards New and revised AASBs affecting amounts reported and/or disclosures in the financial statements In the current year, the has applied a number of new and revised AASBs issued by the Australian Accounting Standards Board (AASB). Impact AASB 1053 ‘Application of Tiers of Australian AASB 1053 establishes a differential financial Accounting Standards’ and AASB 2010-2 reporting framework consisting of two tiers of ‘Amendments to Australian Accounting reporting requirements for general purpose Standards arising from Reduced Disclosure financial statements, comprising Tier 1: Requirements' Australian Accounting Standards and Tier 2: Australian Accounting Standards – Reduced Disclosure Requirements (RDR). AASB 2010-2 makes amendments to each Standard and Interpretation indicating the disclosures not required to be made by ‘Tier 2’ entities or inserting ‘RDR’ paragraphs requiring simplified disclosures for ‘Tier 2’ entities. The adoption of these standards has resulted in significantly reduced disclosures, largely in respect of income tax, segments, impairment, related parties, share-based payments, financial instruments and cash flows. AASB 2011-2 ‘Amendments to Australian AASB 2011-2 establishes reduced disclosure Accounting Standards arising from the Transrequirements for entities preparing general Tasman Convergence Project – Reduced purpose financial statements under Australian Disclosure Requirements’ Accounting Standards – Reduced Disclosure Requirements in relation to the Australian additional disclosures arising from the TransTasman Convergence Project. The adoption of this amending standard does not have any material impact on the financial statements. AASB 2012-2 ‘Amendments to Australian The Co-operative has applied the amendments Accounting Standards – Disclosures – Offsetting to AASB 7 ‘Disclosures – Offsetting Financial Financial Assets and Financial Liabilities’ Assets and Financial Liabilities’ for the first time in the current year. The amendments to AASB 7 require entities to disclose information about rights of offset and related arrangements (such as collateral posting requirements) for financial instruments under an enforceable master netting agreement or similar arrangement. The amendments have been applied retrospectively. As the Cooperative does not have any offsetting arrangements in place, the application of the amendments does not have any material impact on the financial statements. Standard Name

Estate Agents Co-operative Ltd and Controlled Entity Annual Report 2014

Estate Agents Co-operative Limited ABN 52 079 055 637 Notes to the Financial Statements For the Year Ended 30 June 2014 1

Summary of Significant Accounting Policies continued (o)

Adoption of new and revised accounting standards continued New and revised AASBs affecting amounts statements continued AASB 2012-5 ‘Amendments to Australian Accounting Standards arising from Annual Improvements 2009-2011 Cycle’

reported and/or disclosures in the financial

The Annual Improvements to AASBs 2009 2011have made a number of amendments to AASBs. Amendments made to AASB 1, AASB 101, AASB 116, AASB 132 and AASB 134. The application of these amendments does not have any material impact on the financial statements. AASB 2012-9 ‘Amendment to AASB 1048 arising This standard makes amendment to AASB from the Withdrawal of Australian Interpretation 1048 ‘Interpretation of Standards’ following the 1039’ withdrawal of Australian Interpretation 1039 ‘Substantive Enactment of Major Tax Bills in Australia’. The adoption of this amending standard does not have any material impact on the financial statements. AASB CF 2013-1 ‘Amendments to the Australian This amendment has incorporated IASB’s Conceptual Framework’ and AASB 2013-9 Chapters 1 and 3 Conceptual Framework for ‘Amendments to Australian Accounting Financial Reporting as an Appendix to the Standards – Conceptual Framework, Materiality Australian Framework for the Preparation and and Financial Instruments’ (Part A Conceptual Presentation of Financial Statements. The Framework) amendment also included not-for-profit specific paragraphs to help clarify the concepts from the perspective of not-for-profit entities in the private and public sectors. As a result the Australian Conceptual Framework now supersedes the objective and the qualitative characteristics of financial statements, as well as the guidance previously available in Statement of Accounting Concepts SAC 2 ‘Objective of General Purpose Financial Reporting’. The adoption of this amending standard does not have any material impact on the financial statements.

Estate Agents Co-operative Ltd and Controlled Entity Annual Report 2014

Estate Agents Co-operative Limited ABN 52 079 055 637 Notes to the Financial Statements For the Year Ended 30 June 2014 1

Summary of Significant Accounting Policies continued (o)

Adoption of new and revised accounting standards continued New and revised Standards on consolidation, joint arrangements, associates and disclosures In August 2011, a package of five standards on consolidation, joint arrangements, associates and disclosures was issued comprising AASB 10 ‘Consolidated Financial Statements’, AASB 11 ‘Joint Arrangements’, AASB 12 ‘Disclosure of Interests in Other Entities’, AASB 127 (as revised in 2011) ‘Separate Financial Statements’ and AASB 128 (as revised in 2011) ‘Investments in Associates and Joint Ventures’. Subsequent to the issue of these standards, amendments to AASB 10, AASB 11 and AASB 12 were issued to clarify certain transitional guidance on the firsttime application of the standards. As the Co-operative does not have any investments in subsidiaries, associates and joint arrangements, the application of these new and revised standards does not have any impact on the disclosures or on the amounts recognised in the financial statements. New accounting standards and interpretations The AASB has issued new and amended Accounting Standards and Interpretations that have mandatory application dates for future reporting periods. The directors have decided against early adoption of these Standards, but does not expect the adoption of these standards to have any impact on the reported position or performance of the Co-operative.

Estate Agents Co-operative Ltd and Controlled Entity Annual Report 2014

Estate Agents Co-operative Limited ABN 52 079 055 637 Notes to the Financial Statements For the Year Ended 30 June 2014 2

Revenue and Other Income The following is an analysis of the Co-operativeâ&#x20AC;&#x2122;s revenue for the year from continuing operations (excluding investment income). 2014 $ Sales revenue - provision of services - member subscriptions Other revenue - other trading revenue - interest received - entrance fees

4,456,353 379,833

5,151,492 422,151

4,836,186

5,573,643

82,827 100,495 7,264

88,028 92,800 11,416

190,586

192,244

5,026,772

5,765,887

13,174 13,203 60,205 15,455 26,375

16,784 14,681 23,779 21,451 26,772

102,006

74,105

100,495

92,800

100,495

92,800

(a)

Total Revenue

Other Income Commissions Discounts & Rebates Received Training & Compliance Service Fees Gain on Sale of Property, Plant & Equipment Sundry Income Total other income (a)

2013 $

The following is an analysis of investment income by category of asset.

Loans and receivables (including cash and bank balances) and Held-to-maturity investments Total interest income earned on financial assets that are not designated as at fair value through profit or loss

Estate Agents Co-operative Ltd and Controlled Entity Annual Report 2014

Estate Agents Co-operative Limited ABN 52 079 055 637 Notes to the Financial Statements For the Year Ended 30 June 2014 3

Profit Before Income Tax Expenses 2014 $ 37,104

2013 $ 36,589

17,178

17,239

Income tax recognised in profit or loss, in respect of the current year 4(b) Current tax 13 Deferred tax

19,674

228,026

Total income tax expense recognised in the current year

19,674

228,026

(13,661)

49,274

64,395 169,812

59,901 177,488

220,546

286,663

193,299

223,739

27,247

62,924

220,546 -

286,663 -

Note Cost of sales Interest expense on financial liabilities not at fair value through profit or loss 4

Income Taxes (a)

(b)

Reconciliation of income tax to accounting profit: Prima facie tax payable on profit/(loss) from ordinary activities before income tax at 30% (2013: 30%) Add: Tax effect of: - non-deductible depreciation and amortisation - other non-allowable items Less: Tax effect of: - other deductible items Recoupment of prior year tax losses not previously brought to account Income tax expense

The tax rate used for the 2014 and 2013 reconciliations above is the corporate tax rate of 30% payable by Australian corporate entities on taxable profits under Australian tax law. 5

Key Management Personnel Compensation The total remuneration paid to key management personnel of the Co-operative is $ 992,574 (2013: $ 986,982).

Estate Agents Co-operative Ltd and Controlled Entity Annual Report 2014

Estate Agents Co-operative Limited ABN 52 079 055 637 Notes to the Financial Statements For the Year Ended 30 June 2014 6

Cash and Cash Equivalents

Note

2014 $

2013 $

449,675

491,844

CURRENT Cash at bank and in hand

Reconciliation of cash and cash equivalents For the purposes of the statement of cash flows, cash and cash equivalents include cash on hand and in banks. Cash and cash equivalents at the end of the reporting period as shown in the statement of cash flows can be reconciled to the related items in the statement of financial position as follows:

Cash and cash equivalents 7

449,675

491,844

490,028 (13,030)

573,007 (10,000)

476,998 23,390

563,007 76,552

500,388

639,559

Trade and Other Receivables CURRENT Trade receivables Provision for impairment

Other receivables 21 Provision for impairment of receivables

The average credit period on sales of goods is 30 days. No interest is charged on trade receivables. The Co-operative has recognised an allowance for doubtful debts of 100% against all receivables over 120 days because historical experience has been that receivables that are past due beyond 120 days are not recoverable. Allowances for doubtful debts are recognised against trade receivables between 60 days and 120 days based on estimated irrecoverable amounts determined by reference to past default experience of the counterparty and an analysis of the counterpartyâ&#x20AC;&#x2122;s current financial position. Movement in provision for impairment of receivables is as follows: Opening Balance Charge for the year Amounts written off Balance at end of the year

Estate Agents Co-operative Ltd and Controlled Entity Annual Report 2014

10,000 14,190 (11,160)

55,455 85,417 (130,872)

13,030

10,000

Estate Agents Co-operative Limited ABN 52 079 055 637 Notes to the Financial Statements For the Year Ended 30 June 2014 8

Inventories 2014 $

Note CURRENT Merchandise - at cost

44,500

Provision for stock

2013 $ 36,163

(884)

Other Financial Assets CURRENT Held-to-maturity financial investments carried at amortised cost

43,616

36,163

1,838,223

108,443 2,670

110,444 2,970

111,113

113,414

12,180

10 Other Assets CURRENT Prepayments Share Capital Unpaid

NON-CURRENT Refundable Deposit

Estate Agents Co-operative Ltd and Controlled Entity Annual Report 2014

Estate Agents Co-operative Limited ABN 52 079 055 637 Notes to the Financial Statements For the Year Ended 30 June 2014

11 Property, Plant and Equipment 2014 $

2013 $

PLANT AND EQUIPMENT Furniture, fixture and fittings At cost Accumulated depreciation Motor vehicles At cost Under lease Accumulated depreciation Office equipment At cost Accumulated depreciation Computer equipment At cost Accumulated depreciation

44,437 (32,213)

44,437 (22,306)

12,224

22,131

88,122 122,243 (111,170)

35,255 188,783 (106,185)

99,195

117,853

23,891 (21,404)

23,891 (20,391)

2,487

3,500

180,208 (171,366)

Total property, plant and equipment

119,559 (108,802)

8,842

10,757

122,748

154,241

Movements in Carrying Amounts Movement in the carrying amounts for each class of property, plant and equipment between the beginning and the end of the current financial year: Furniture, Fixtures and Motor Office Computer Fittings Vehicles Equipment Equipment Total $

Year ended 30 June 2014 Balance at 30 June 2013

22,131

117,853

3,500

10,757

154,241

26,472

4,320

30,792

Depreciation expense

(9,907)

(45,130)

(1,013)

(6,235)

(62,285)

Balance at the end of the year

12,224

99,195

2,487

8,842

122,748

Estate Agents Co-operative Ltd and Controlled Entity Annual Report 2014

Estate Agents Co-operative Limited ABN 52 079 055 637 Notes to the Financial Statements For the Year Ended 30 June 2014 12 Other Intangible Assets 2014 $ Computer software Cost Accumulated amortisation and impairment

2,451,143 (2,049,672)

Net carrying value

401,471

Movements in Carrying Amounts

2,382,074 (1,953,731) 428,343

Computer software

Total

Balance at 30 June 2013 Additions Amortisation expense Closing value at 30 June 2014 13 Tax

2013 $

428,343 125,393 (152,265)

401,471

Opening Charged Balance to Income $ $

Closing Balance $

Deferred tax assets Provisions Provisions - employee benefits Tax losses Other

12,840 157,559 20,136

(588) 191 334,243 (4,291)

12,252 157,750 334,243 15,845

Balance at 30 June 2013

190,535

329,555

520,090

Provisions Provisions - employee benefits Tax losses Other

12,252 157,750 334,243 15,845

630 (6,378) (29,217) (973)

12,882 151,372 305,026 14,872

Balance at 30 June 2014

520,090

(35,938)

484,152

Opening Charged Balance to Income $ $

Closing Balance $

Deferred tax liability Property, plant and equipment Balance at 30 June 2013

108,573

Property, plant and equipment

108,573

(55,612)

52,961

Balance at 30 June 2014

108,573

(55,612)

52,961

Estate Agents Co-operative Ltd and Controlled Entity Annual Report 2014

Estate Agents Co-operative Limited ABN 52 079 055 637 Notes to the Financial Statements For the Year Ended 30 June 2014 14 Trade and Other Payables

Note CURRENT Unsecured liabilities Trade payables EAC Zone advertising account Related party payables Sundry payables and accrued expenses 21

2014 $

2013 $

266,416 134,176 93,700

395,792 166,364 89,160

266,581

274,025

760,873

925,341

No interest is charged on the trade payables. The Co-operative has financial risk management policies in place to ensure that all payables are paid within the pre-agreed credit terms. 15 Borrowings CURRENT Secured - at amortised cost Finance lease NON-CURRENT Finance lease Paid up capital

113,523

117,805

110,772 30,170

107,640 32,310

140,942

139,950

254,465

257,755

224,295 30,170

225,445 32,310

254,465

257,755

160,665

144,045

Total non-current borrowings 21

Total borrowings (a)

(b)

Total current and non-current secured liabilities Finance lease obligations Paid up capital

The carrying amounts of non-current assets pledged as security are: - leased plant and equipment

Lease liabilities are secured by the underlying leased assets. The borrowings are a mix of variable and fixed interest rate debt with repayment periods not exceeding 4 years.

Estate Agents Co-operative Ltd and Controlled Entity Annual Report 2014

Estate Agents Co-operative Limited ABN 52 079 055 637 Notes to the Financial Statements For the Year Ended 30 June 2014 16 Provisions 2014 $

2013 $

Employee benefits

504,576

525,835

Analysis of total provisions Current Non-current

430,857 73,719

466,983 58,852

504,576

525,835

The provision for employee benefits represents annual leave and vested long service leave entitlements accrued and compensation claims made by employees. 17 Reserves (a)

Capital profit reserve The capital profit reserve records gains on sale of properties purchased prior to 19 September 1985.

(b)

Asset revaluation reserve The asset revaluation reserve records revaluation of non-current assets.

(c)

Share redemption reserve The share redemption reserve records the entrance fees received by members prior to 1979.

18 Capital and Leasing Commitments (a)

Finance lease and Hire Purchase Commitments Payable - minimum lease payments: - not later than 12 months - between 12 months and 5 years Minimum lease payments Less: finance changes minimum lease payments

Estate Agents Co-operative Ltd and Controlled Entity Annual Report 2014

125,842 117,863

144,728 100,726

243,705 (19,410)

245,454 (20,009)

224,295

225,445

Estate Agents Co-operative Limited ABN 52 079 055 637 Notes to the Financial Statements For the Year Ended 30 June 2014

18 Capital and Leasing Commitments continued (a)

Finance lease and Hire Purchase Commitments continued Commercial hire purchases in place for motor vehicle and computer equipment have a term of 3 years. The motor vehicle and computer equipment are being leased with lease payment paid monthly. Finance is also in place for the Co-operative's insurance premiums with repayments paid monthly.

(b)

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

Note Payable - minimum lease payments: - not later than 12 months - greater than 5 years

(b)

2014 $

2013 $

119,658 9,972

119,658 129,630

129,630

249,288

The property lease is a non-cancellable lease with a three-year term with an option to renew for another three years and with rent payable monthly in advance. 19 Related Party Transactions Key management personnel Any person having authority and responsibility for planning, directing and controlling the activities of the Co-operative, directly or indirectly, including any director (whether executive or otherwise) of that is considered key management personnel. For details of disclosures relating to key management personnel, refer to Note 5: Key Management Personnel Compensation. 20 Events after the reporting period No matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the Co-operative, the results of those operations, or the state of affairs of the Co-operative in future financial years.

Estate Agents Co-operative Ltd and Controlled Entity Annual Report 2014

Estate Agents Co-operative Limited ABN 52 079 055 637 Notes to the Financial Statements For the Year Ended 30 June 2014 21 Financial Risk Management Categories of financial instruments 2014 $

Note Financial Assets Cash and cash equivalents Trade and other receivables Held-to-maturity investments

6 7 9

Total financial assets Financial Liabilities Financial liabilities at amortised cost - Trade and other payables - Borrowings

2013 $

449,675 500,389 1,838,223

491,844 639,558 1,838,223

2,788,287

2,969,625

266,581 254,465

925,341 257,755

521,046

1,183,096

14 15

Total financial liabilities 22 Co-operative Details The registered office of and principal place of business of the Co-operative is: Estate Agents Co-operative Limited 2A/175 James Ruse Drive Rosehill NSW 2142

Estate Agents Co-operative Ltd and Controlled Entity Annual Report 2014

Estate Agents Co-operative Limited ABN 52 079 055 637

Directors' Declaration The directors declare that: a.

in the directorsâ&#x20AC;&#x2122; opinion, there are reasonable grounds to believe that the Co-operative will be able to pay its debts as and when they become due and payable; and

in the directorsâ&#x20AC;&#x2122; opinion, the attached financial statements and notes thereto are in accordance with the Corporations Act 2001, Co-operatives(Adoption of National Law) Act 2012, Co-operatives National Regulation, including compliance with accounting standards and giving a true and fair view of the financial position and performance of the Co-operative.

In the directors' opinion, there are reasonable grounds to believe that the Co-operative be able to meet any obligations or liabilities to which it is or may become due and payable.

Director .................................................................. P A Carmont

Director .................................................................. W. Herrmann

Dated this 13th day of October 2014

Estate Agents Co-operative Ltd and Controlled Entity Annual Report 2014

Page 2 13 October 2014

Auditor’s Independence Declaration In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of Estate Agents Co-operative Limited, would be in the same terms if given to the directors as at the time of this auditor’s report. Opinion In our opinion, the financial report of Estate Agents Co-operative Limited is in accordance with the Corporations Act 2001, including: a.

giving a true and fair view of the entity’s financial position as at 30 June 2014 and of its performance for the year ended on that date; and

complying with Australian Accounting Standards – Reduced Disclosure Requirements, the Co-operatives (Adoption of National Law) Act 2012, and the Co-operatives National Regulation.

DELOITTE TOUCHE TOHMATSU

Stewart Thompson Partner Chartered Accountants Parramatta Dated: 13 October 2014

Estate Agents Co-operative Ltd and Controlled Entity Annual Report 2014