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Estate Agents Co-operative Limited Annual Report ABN 52 079 055 637
CONTENTS FOR YEAR ENDED 30 JUNE 2016 Notice of Annual General Meeting
2
Chairman's Report
3 4
Directors' Report
5 6
Auditor's Independence Declaration
7 8
Statement of Profit or Loss and Other Comprehensive Income
8 9
Statement of Financial Position
9 10
Statement of Changes in Equity
1011
Statement of Cash Flows
1112
Notes to the Financial Statements
1213
Directors' Declaration
29
Independent Audit Report
30
3
30 31
Estate Agents Co-operative Limited Annual Report ABN 52 079 055 637
NOTICE OF ANNUAL GENERAL MEETING Notice is hereby given that the fifty sixth Annual General Meeting of Shareholders of the Estate Agents Co-operative Limited will be held at: Estate Agents Co-operative Limited 2A/175 James Ruse Drive, Rosehill NSW 2142 BUSINESS On Wednesday 26th October, 2016 at 10.00AM: · To confirm the Minutes of the 2015 Annual General Meeting. · To receive the report of the Board of Directors. · To receive the financial statements for the year ended 30 June 2016 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 at 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
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Estate Agents Co-operative Limited Annual Report ABN 52 079 055 637
CHAIRMAN'S REPORT I am pleased to present the Co-operative's 2016 report. The financial result for the year was a somewhat disappointing loss of $333,329. A drop in revenue from the Illawarra realestateworld.com.au publication as a result of market conditions has again been the primary contributor to this result. The publication is still an important membership offering and changes have been made to the printing and distribution of the publication to arrest the situation. Carrying on from last year's strategic board meetings where it was determined that there were significant winds of change within the industry, EAC embarked on a number of key new projects. The board and management have been working to put the necessary structures and team in place to allow the Co-operative to achieve what needs to be done. From a team perspective we have made changes to ensure that we have the right people in the right roles. Based on member feedback, we now have Business Development Managers who are out in the field visiting members on a regular basis. We have reviewed our rules, which have been updated to reflect some of the changes that we have seen in the industry over past years in the way real estate agents operate, and to provide the Co-operative with the framework to increase membership by removing barriers to membership, including being limited to just New South Wales. Many of the new products that we will be introducing will see the Co-operative marketing these on a national basis. First and foremost among these new products is the new "Dashboard" which will totally replace Red Square. The design brief for the project was bold, bringing together all aspects that an agent would need and use into one platform with a level of mobility and data not previously available, as well as adding new elements to allow agents to easily comply with new legislative requirements. Many of you have seen preliminary demonstrations and have commented favourably on the concept and usability of the platform, however, as with most IT projects, particularly extremely complex ones such as this, there have been delays. The board and management continue to prioritise this project and hope to see it in beta testing shortly. It has been a long wait but I am positive the finished product will be well worth it. Alongside Dashboard will come a totally new website, providing websites to suit all business types and budgets from an individual sales agent or property manager, a small home office all the way up to a multiple office operation. The new website offering will offer stylish contemporary designs that are fully responsive with a focus on branding and introducing features not available within our current offerings. The other important new offering from EAC this year has been "EAC Video Marketing". The board and management were in agreement that video was going to be pivotal in the marketing mix going forward. The day of the still photo is being overtaken by video in the digital age and EAC is at the forefront of this new era. EAC has obtained exclusive rights for distribution of the "HouseLens" solution in Australia, and a national marketing campaign is now underway with endorsement agreements having already been signed with some of the franchise groups. Those who have not yet seen the solution will be amazed at the quality that is able to be produced simply, with no experience required, at a fraction of the cost of a professional. A YouTube account can also be established for our real estate agents. HouseLens is just the start, with research already commencing on virtual reality and equipment that will allow clients to do a virtual walk through of a property from anywhere in the world.
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Estate Agents Co-operative Limited Annual Report ABN 52 079 055 637
CHAIRMAN'S REPORT (CONT) We have continued to be involved in the political arena with our presence on the Minister's Real Estate Reference Group. As with all things political, exhaustive processes always need to be followed with seemingly review after review. However, EAC is pressing for a quick determination on the upcoming review of real estate training. We have had numerous meetings with both the Department of Fair Trading and the Minister and I feel we are getting close to a consensus on what is required to move the industry forward on a path towards professional recognition. I suspect there will be discussion papers and forums for comments from agents and the public at some time in the future so keep your eye out and make your thoughts known. The changing nature of the real estate industry is an ongoing challenge for us all, EAC will continue to offer services and new products to assist our agents in these changing times and values their ongoing support of the Co-operative. I would like to take this opportunity to thank the board and management for their continued support throughout the year.
Dale Whittaker
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Estate Agents Co-operative Limited Annual Report ABN 52 079 055 637
DIRECTORS’ REPORT The directors of the Estate Agents Co-operative Limited (hereafter referred to as the Co-operative) submit herewith the annual report of the Co-operative for the financial year ended 30 June 2016. 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: Name of Directors D. R. Whittaker (Chairman) P. A. Carmont (Vice Chairman) - resigned 28 October 2015 A. D. Chapman (Vice Chairman) - commenced 28 October 2015 L. M. Buckett - commenced 28 October 2015 E. J. Hanson W. Herrmann - resigned 28 October 2015 J. Kaltoum J. P. Ronis J. F. Sercombe B. L. Styles - commenced 28 October 2015 G. Toner The above named directors held office during or part of the whole of the financial year and since the end of the financial year. Principal Activities The principal activity of The 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 - 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. Operating Results The Profit/(Loss) of operations including interest received was:
Operating Profit/(Loss)
Year ended 30-Jun-16 $ ($333,329)
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Year ended 30-Jun-15 $ ($23,921)
Estate Agents Co-operative Limited Annual Report ABN 52 079 055 637
DIRECTORS’ REPORT (Continued) 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 No other matters or circumstances have arisen since the end of the financial year that would significantly affect or may significantly affect the operations of the Co-operative or the results of those operations, or the state of affairs of the Cooperative in the future financial years. 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. 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 Cooperative, 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 lead auditor’s independence declaration for the year ended 30 June 2016 has been received and can be found on page 7 of the directors’ report. Signed in accordance with a resolution of the Board of Directors.
______________________ Director: A.B. Chapman
______________________ Director: E. J. Hanson
Dated this 28 September 2016
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Estate Agents Co-operative Limited Annual Report ABN 52 079 055 637
AUDITOR'S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001
To the Directors of Estate Agents Co-operative Limited:
I declare that, to the best of my knowledge and beliefs, there have been no contraventions of any applicable code of professional conduct in relation to the audit.
Ben Fock Registered Company Auditor Dated this 28 September 2016
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Estate Agents Co-operative Limited Annual Report ABN 52 079 055 637
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2016 Note
2016 $
2105 $
Revenue
2
3,535,322
4,528,701
Other income
2
90,366
97,811
(424,273)
(429,999)
(147,407)
(178,375)
(2,300,094)
(2,477,745)
Finance costs
(18,653)
(26,647)
Raw materials and consumables used
(36,112)
(36,394)
Realtor prepress, distribution and printing
(707,367)
(847,588)
Occupancy expense
(133,660)
(149,649)
Other expenses
(372,287)
(513,064)
Administration Expenses Depreciation and amortisation
3
Employee benefit expense
Profit before income tax
1
(514,165)
(32,949)
Income tax expense
4
180,836
9,028
(333,329)
(23,921)
Profit for the year Other comprehensive income Items that will not be classified subsequently to Profit and Loss Net gain on revaluation of non-current assets
-
-
Items that may be classified subsequently to Profit and Loss
-
-
Other comprehensive income for the year
-
-
Total comprehensive income for the year
(333,329)
(23,921)
Profit attributable to the members of the Co-operative
(333,329)
(23,921)
Total comprehensive income attributable to the members of the Co-operative
(333,329)
(23,921)
The accompanying notes form part of these financial statements
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Estate Agents Co-operative Limited Annual Report ABN 52 079 055 637
STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2016
ASSETS
Note
2016 $
2015 $
CURRENT ASSETS Cash assets Trade and other receivable Inventories Other assets Other Financial assets TOTAL CURRENT ASSETS
5 6 7 8 9
224,553 371,803 66,325 79,458 1,356,950 2,099,089
349,466 394,693 49,417 117,563 1,836,524 2,747,663
NON-CURRENT ASSETS Other assets Property, plant and equipment Other intangible assets Deferred tax assets TOTAL NON-CURRENT ASSETS
8 10 11 12
12,180 61,054 286,605 621,056 980,895
12,180 117,107 275,136 448,439 852,862
3,079,984
3,600,525
13 14 16
660,800 30,734 291,662 983,196
701,535 61,085 346,235 1,108,855
12 14 16
47,678 15,666 63,344
8,219 78,926 37,751 124,896
TOTAL LIABILITIES
1,046,540
1,233,751
NET ASSETS
2,033,444
2,366,774
EQUITY Retained earnings Reserves TOTAL EQUITY
662,967 1,370,477 2,033,444
996,296 1,370,477 2,366,773
TOTAL ASSETS LIABILITIES CURRENT LIABILITIES Payables Borrowings Short term provisions TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Deferred tax liabilities Borrowings Long term provisions TOTAL NON-CURRENT LIABILITIES
The accompanying notes form part of these financial statements
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Estate Agents Co-operative Limited Annual Report ABN 52 079 055 637
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2016
Retained Earnings
Capital profits Reserve
Asset revaluation reserve
Share Redemption Reserve
Total
$
$
$
$
$
1,020,217
1,153,637
Profit/(loss) attributable to the Cooperative
(23,921)
-
-
-
(23,921)
Total other comprehensive income for the year
(23,921)
-
-
-
(23,921)
996,296
1,153,637
216,840
2,366,773
Balance at 1 July 2014
-
2,390,694
216,840
Comprehensive Income
Total comprehensive income attributable to Balance at 30 June 2015
-
Comprehensive Income Profit/(loss) attributable to the Cooperative Total other comprehensive income for the year Total comprehensive income attributable to Balance at 30 June 2016
(333,329)
-
-
-
(333,329)
-
-
-
(333,329)
662,967
1,153,637
216,840
2,033,444
(333,329)
-
Capital profit reserve The capital profit reserve records gains on sale of properties purchased prior to 19 September 1985. Asset revaluation reserve The asset revaluation reserve records revaluation of non-current assets. Share redemption reserve The share redemption reserve records the entrance fees received by members prior to 1979.
The accompanying notes form part of these financial statements
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Estate Agents Co-operative Limited Annual Report ABN 52 079 055 637
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2016 Note CASH FLOWS FROM OPERATING ACTIVITIES Receipts from trading activities and subscriptions Payments to suppliers & employees Interest received Finance costs Net cash provided by operating activities
2016 $
2015 $
3,602,801 (3,596,523) 40,746 (18,653) 28,371
4,520,820 (4,503,103) 71,463 (26,647) 62,533
(108,168)
(131,590)
10,636
15,455
(97,532)
(116,135)
Proceeds from borrowing Payment of borrowing
(55,752)
(46,608)
Net cash provided by from financing activities
(55,752)
(46,608)
(124,913)
(100,211)
349,465 224,553
449,675 349,465
21(b)
CASH FLOWS FROM INVESTING ACTIVITIES Payment for plant & equipment Proceeds from sale of assets Net cash provided by investing activities CASH FLOWS FROM FINANCING ACTIVITIES
NET INCREASE IN CASH HELD Cash at beginning of the year CASH AT THE END OF THE YEAR
21(a) 21(a)
The accompanying notes form part of these financial statements
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Estate Agents Co-operative Limited Annual Report ABN 52 079 055 637
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016 NOTE 1: STATEMENT 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. Basis of preparation The Co-operative applies Australian Accounting Standards – Reduced Disclosure Requirements as set out in AASB 1053: Application of Tiers of Australian Accounting Standards and AASB 2010-2: Amendments to Australian Accounting Standards arising from Reduced Disclosure Requirements. The financial statements are general purpose financial statements that have been prepared in accordance with Australian Accounting Standards – Reduced Disclosure Requirements of the Australian Accounting Standards Board (AASB) and the Corporations Act 2001. The Co-operative is a for-profit entity for financial reporting purposes under Australian Accounting Standards. Australian Accounting Standards set out accounting policies that the AASB has concluded would result in financial statements containing relevant and reliable information about transactions, events and conditions. Material accounting policies adopted in the preparation of these financial statements are presented below and have been consistently applied unless stated otherwise. The financial statements, except for the cash flow information, have been prepared on an accruals basis and are based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities. The amounts presented in the financial statements have been rounded to the nearest dollar. The financial statements were authorised for issue on 28 September 2016 by the directors of the Co-operative. 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 shareholder’s right to receive payment has been established (provided that it is probable that the economic benefits will flow to the Co-operative 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 Cooperative 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 asset’s net carrying amount on initial recognition. All revenue is stated net of the amount of goods and services tax (GST).
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Estate Agents Co-operative Limited Annual Report ABN 52 079 055 637
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016 NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT) (b) Inventory Inventories are measured at the lower of cost and current replacement cost. Net realisable value represents the estimated selling price for inventories less all costs necessary to make the sale. (c) Property Plant and Equipment Each class of property, plant and equipment is carried at cost or fair value as indicated, less where applicable, accumulated depreciation and impairment losses. Plant and Equipment Plant and equipment is measured on a cost basis less depreciation and impairment losses. 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 asset's employment and subsequent disposal. Depreciation The depreciable amount of all fixed assets, including buildings and capitalised lease asset, but excluding freehold land, is depreciated on a straight line basis over the asset’s useful life to the Co-operative commencing from the time the asset is held ready for use. Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements. The depreciation rates used for each class of depreciable assets are: Class of Fixed Asset Plant and Equipment Computer equipment Computer software Other Plant and Equipment
Depreciation Rate 5% to 25% 10% to 40% 12.5% to 40% 5% to 25%
The assets’ residual values and useful lives are reviewed and adjusted, if appropriate, at each reporting period. Asset classes 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. 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. (d) Cash and Cash Equivalents Cash and cash equivalents include cash on hand, deposits held at-call with banks and other short-term highly liquid investments with original maturities of six months or less.
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Estate Agents Co-operative Limited Annual Report ABN 52 079 055 637
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016 NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT) (e) Goods and Services Tax (GST) Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Taxation Office. 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 statement of financial position are shown inclusive of GST. (f) 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-operative’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. 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.
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Estate Agents Co-operative Limited Annual Report ABN 52 079 055 637
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016 NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT) (g)
Employee Provisions
Short-term employee provisions Provision is made for the Co-operative’s obligation for short-term employee benefits. Short-term employee benefits are benefits (other than termination benefits) that are expected to be settled wholly before 12 months after the end of the annual reporting period in which the employees render the related service, including wages, salaries and sick leave. Short-term employee benefits are measured at the (undiscounted) amounts expected to be paid when the obligation is settled. Other long-term employee provisions Provision is made for employees’ long service leave and annual leave entitlements not expected to be settled wholly within 12 months after the end of the annual reporting period in which the employees render the related service. Other long-term employee benefits are measured at the present value of the expected future payments to be made to employees. Expected future payments incorporate anticipated future wage and salary levels, durations of service and employee departures, and are discounted at rates determined by reference to market yields at the end of the reporting period on government bonds that have maturity dates that approximate the terms of the obligations. Upon the remeasurement of obligations for other long-term employee benefits, the net change in the obligation is recognised in profit or loss as a part of employee benefits expense. The Co-operative’s obligations for long-term employee benefits are presented as non-current employee provisions in its statement of financial position, except where the Co-operative does not have an unconditional right to defer settlement for at least 12 months after the end of the reporting period, in which case the obligations are presented as current provisions. (h) Financial Instruments Initial Recognition and Measurement Financial assets and financial liabilities are recognised when the Co-operative becomes a party to the contractual provisions to the instrument. For financial assets, this is equivalent to the date that the Co-operative commits itself to either purchase or sell the asset (ie trade date accounting is adopted). Financial instruments are initially measured at fair value plus transaction costs except where the instrument is classified ‘at fair value through profit or loss’ in which case transaction costs are expensed to profit or loss immediately. Classification and Subsequent Measurement Finance instruments are subsequently measured at either fair value, amortised cost using the effective interest rate method or cost. Fair value represents the amount for which an asset could be exchanged or a liability settled, between knowledgeable, willing parties. Where available, quoted prices in an active market are used to determine fair value. In other circumstances, valuation techniques are adopted. Amortised cost is calculated as: 1. the amount at which the financial asset or financial liability is measured at initial recognition; 2. less principal repayments; 3. plus or minus the cumulative amortisation of the difference, if any, between the amount initially recognised and the maturity amount calculated using the effective interest method; and 4. less any reduction for impairment. The effective interest method is used to allocate interest income or interest expense over the relevant period and is equivalent to the rate that exactly discounts estimated future cash payments or receipts (including fees, transaction costs and other premiums or discounts) through the expected life (or when this cannot be reliably predicted, the contractual term) of the financial instrument to the net carrying amount of the financial asset or financial liability. Revisions to expected future net cash flows will necessitate an adjustment to the carrying value with a consequential recognition of an income or expense in profit or loss.
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Estate Agents Co-operative Limited Annual Report ABN 52 079 055 637
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016 NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT) Loans and Receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are subsequently measured at amortised cost. Held-to-Maturity Investments Held-to-maturity investments are non-derivative financial assets that have fixed maturities and fixed or determinable payments and it is the Co-operative's intention to hold these investments to maturity. They are subsequently measured at amortised cost. Financial Liabilities Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost. (i)
Impairment of 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 cash- generating 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. (j) Critical Accounting Estimates and Judgments 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.
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Estate Agents Co-operative Limited Annual Report ABN 52 079 055 637
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016 NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT) Critical judgements in applying 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 $1,356,950 (30 June 2015: $1.8 million). Details of these assets are set out in Note 9. Key sources of estimation 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. Employee benefits For the purpose of measurement, AASB 119: Employee Benefits (September 2011) defines obligations for short-term employee benefits as obligations expected to be settled wholly before 12 months after the end of the annual reporting period in which the employees render the related services. The Co-operative expects most employees will take their annual leave entitlements within 24 months of the reporting period in which they were earned, but this will not have a material impact on the amounts recognised in respect of obligations for employees’ leave entitlements. (k) 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. (l) 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.
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Estate Agents Co-operative Limited Annual Report ABN 52 079 055 637
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016 NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT) 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 Cooperative’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. (m) Fair Value 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.
(n) Comparative Figures Where required by Accounting Standards, comparative figures have been adjusted to conform with changes in presentation for the current financial year. When the Co-operative applies an accounting policy retrospectively, makes a retrospective restatement or reclassifies items in its financial statements, a statement of financial position as at the beginning of the earliest comparative period must be disclosed. (o) Adoption of New and Revised Accounting Standards The AASB has issued a number of new and amended Accounting Standards that have mandatory application dates for future reporting periods, some of which are relevant to the Co-operative. The Co-operative has decided not to early adopt any of the new and amended pronouncements. The Co-operative's assessment of the new and amended pronouncements that are relevant to the company but applicable in future reporting periods is set out below:
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Estate Agents Co-operative Limited Annual Report ABN 52 079 055 637
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016 NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT) AASB 16: Leases (applicable to annual reporting periods beginning on or after 1 January 2019) When effective, this Standard will replace the current accounting requirements applicable to leases in AASB 117: Leases and related Interpretations. AASB 16 introduces a single lessee accounting model that eliminates the requirement for leases to be classified as operating or finance leases. The main changes introduced by the new Standard include: recognition of a right-to-use asset and liability for all leases (excluding short-term leases with less than 12 months of tenure and leases relating to low-value assets); - depreciation of right-to-use assets in line with AASB 116: Property, Plant and Equipment in profit or loss and unwinding of the liability in principal and interest components; - variable lease payments that depend on an index or a rate are included in the initial measurement of the lease liability using the index or rate at the commencement date; - by applying a practical expedient, a lessee is permitted to elect not to separate non-lease components and instead account for all components as a lease; and - additional disclosure requirements. The transitional provisions of AASB 16 allow a lessee to either retrospectively apply the Standard to comparatives in line with AASB 108: Accounting Policies, Changes in Accounting Estimates and Errors or recognise the cumulative effect of retrospective application as an adjustment to opening equity on the date of initial application. Although the directors anticipate that the adoption of AASB 16 will impact the Co-operative's financial statements, it is impracticable at this stage to provide a reasonable estimate of such impact. AASB 15: Revenue from Contracts with Customers (applicable to annual reporting periods beginning on or after 1 January 2018, as deferred by AASB 2015-8: Amendments to Australian Accounting Standards – Effective Date of AASB 15) When effective, this Standard will replace the current accounting requirements applicable to revenue with a single, principlesbased model. Except for a limited number of exceptions, including leases, the new revenue model in AASB 15 will apply to all contracts with customers as well as non-monetary exchanges between entities in the same line of business to facilitate sales to customers and potential customers. The core principle of the Standard is that an entity will recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for the goods or services. To achieve this objective, AASB 15 provides the following five-step process: - identify the contract(s) with a customer; - identify the performance obligations in the contract(s); - determine the transaction price; - allocate the transaction price to the performance obligations in the contract(s); and - recognise revenue when (or as) the performance obligations are satisfied. The transitional provisions of this Standard permit an entity to either: restate the contracts that existed in each prior period presented per AASB 108: Accounting Policies, Changes in Accounting Estimates and Errors (subject to certain practical expedients in AASB 15); or recognise the cumulative effect of retrospective application to incomplete contracts on the date of initial application. There are also enhanced disclosure requirements regarding revenue. Although the directors anticipate that the adoption of AASB 15 may have an impact on the Co-operative’s financial statements, it is impracticable at this stage to provide a reasonable estimate of such impact.
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Estate Agents Co-operative Limited Annual Report ABN 52 079 055 637
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016 NOTE 2: REVENUE AND OTHER INCOME
2016 $
Revenue and Other Income Included in operating profit are the following items of operating revenue: Sales revenue - provision of service - member subscription Other revenue - other trading revenue - interest received - entrance fees
Total Revenue from customers Other income Commission & sponsorship Discounts and rebates Training & compliance service fee Profit on disposal of fixed assets Sundry income Total other income
2015 $
3,032,800 370,120 3,402,920
3,953,840 372,933 4,326,773
84,681 40,746 6,975 132,402
120,526 71,463 9,938 201,927
3,535,322
4,528,701
27,431 (9,733) 45,358 10,636 16,674 90,366
9,094 (13,202) 59,450 13,536 28,933 97,811
(a) The following is an analysis of investment income by category of asset Loans and receivables (including cash and bank balances ) and Held-to-maturity
40,746
71,463
Total interest income earned on financial assets that are not designated as at fair value
40,746
71,463
36,112
36,394
18,653
26,647
147,407
178,375
2,300,094
2,477,745
Bad debts written off
-
-
Loss on disposal of fixed assets
-
1,919
NOTE 3: PROFIT BEFORE INCOME TAX Expenses: Cost of sales Interest expense on financial liabilities not at fair value through profit or loss Depreciation of property, plant and equipment Employee benefits
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Estate Agents Co-operative Limited Annual Report ABN 52 079 055 637
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016 NOTE 4: INCOME TAXES
Note
2016 $ (a) Income tax recognised in profit or loss, in respect of the current year Current tax Deferred tax
4(b)
Total income tax expense recognised in the current year
2015 $
180,836
9,028
180,836
9,028
(154,249)
(9,884)
(b) Reconciliation of income tax to accounting profit: Prima facie tax payable on profit/(loss) from ordinary activities before income tax at 30% (2015: 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 Additional losses brought to account in current year
Income tax expense
44,222 110,406 379
53,513 135,276 178,905
149,899
191,676
(149,881)
(12,771)
18
178,905
-
-
The tax rate used for the 2016 and 2015 reconciliations above is the corporate tax rate of 30% payable by Australian corporate entities on taxable profits under Australian tax law. NOTE 5: CASH ASSETS CURRENT Cash at bank and in hand
21
224,553
349,466
224,553
349,466
348,233 33,571 (10,001) 371,803
384,251 13,103 (2,661) 394,693
NOTE 6: RECEIVABLES CURRENT Trade debtors Other receivables Provision for impairment
6(a) 23
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Estate Agents Co-operative Limited Annual Report ABN 52 079 055 637
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016 NOTE 6: RECEIVABLES (CONT)
Note
2016 $
2015 $
(a) Provision for impairment of receivables The average credit period on sales of goods is 30 days. Interest is charged on outstanding trade receivables at a rate of 10% PA or a minimum of $10. 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 counterparty’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
2,661 13,454 (6,114) 10,001
13,030 1,676 (12,045) 2,661
66,325 66,325
49,417 49,417
78,338 1,120 79,458
116,443 1,120 117,563
12,180 12,180
12,180 12,180
1,356,950
1,836,524
1,356,950
1,836,524
NOTE 7: INVENTORIES CURRENT Merchandise - at cost
NOTE 8: OTHER ASSETS CURRENT Prepayments Share Capital Unpaid NON-CURRENT Refundable Deposit NOTE 9: FINANCIAL OTHER ASSETS CURRENT Held-to-maturity financial investments carried at amortised cost
23
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Estate Agents Co-operative Limited Annual Report ABN 52 079 055 637
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016 NOTE 10: PROPERTY, PLANT & EQUIPMENT At cost Furniture, fixture and fittings Less: accumulated depreciation
Note
2016 $
At cost Motor vehicles Under lease Accumulated depreciation
At cost Office equipment Accumulated depreciation At cost Computer equipment Less: accumulated depreciation Total Property, Plant & Equipment
2015 $
43,708 (42,277) 1,431
43,708 (41,079) 2,629
35,255 122,243 (122,569) 34,929
54,669 122,243 (111,423) 65,489
20,229 (19,246) 983
20,229 (18,663) 1,566
237,073 (213,362) 23,711
232,236 (184,813) 47,423
61,054
117,107
(a) Movements in Carrying Amounts Movements in the carrying amounts for each class of property plant and equipment between the beginning and the end of the current financial year. Motor Total Furniture, Office Computer vehicles fixture and equipment equipment fittings Balance at the end/start of the year (2015) Additions - at cost Additions - at replacement cost Disposals (net) Depreciation Balance at the end of the year (2016)
2,629 1,198 1,431
65,489 30,560 34,929
1,566 583 983
47,423 8 23,704 23,711
NOTE 11: OTHER INTANGIBLE ASSETS Cost Computer software Accumulated amortisation and impairment Net carrying value
1,586,318 (1,299,713) 286,605 Computer software
Balance at the end/start of the year (2015) Additions - at cost Additions - at replacement cost Disposals (net) Depreciation Balance at the end of the year (2016)
275,136 99,172 3,658 (91,361) 286,605
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1,487,554 (1,212,418) 275,136
117,107 8 56,045 61,054
Estate Agents Co-operative Limited Annual Report ABN 52 079 055 637
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016 NOTE 12: TAX Opening Balance
Deferred tax assets
Charged to Income
Closing Balance
Provisions Provisions - Employee benefits Tax losses Other Balance at 30 June 2015
12,882 151,372 305,026 14,872 484,152
(3,279) (36,176) 13,917 (10,175) (35,713)
9,603 115,196 318,943 4,697 448,439
Provisions Provisions - Employee benefits Tax losses Property, plant and equipment Other Balance at 30 June 2016
9,603 115,196 318,943 4,697 448,439
2,397 (22,997) 148,736 35,953 8,528 172,617
12,000 92,199 467,679 35,953 13,225 621,056
Opening Balance
Deferred tax liability Property, plant and equipment Other Balance at 30 June 2015
Closing Balance 8,219 8,219
52,961
(52,961) 8,219 (44,742)
Other
8,219
(8,219)
-
Balance at 30 June 2016
8,219
(8,219)
-
NOTE 13: PAYABLES CURRENT Unsecured liabilities Trade creditors & accruals EAC Zone advertising account Related party payables Sundry payables and accrued expenses
52,961
Charged to Income
Note
2016 $ 221,556 123,531 91,840 223,873 660,800
23
2015 $ 247,196 101,084 97,530 255,725 701,535
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.
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Estate Agents Co-operative Limited Annual Report ABN 52 079 055 637
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016 NOTE 14: BORROWINGS
Note
CURRENT Secured - at amortised cost Finance lease Total current borrowings NON-CURRENT Secured - at amortised cost Finance lease Paid up capital Total non current borrowings
2016 $
2015 $
30,734 30,734
61,085 61,085
18,938 28,740 47,678
49,686 29,240 78,926
Total borrowings
23
78,412
140,011
(a) Total current and non-current secured liabilities Finance lease obligations Paid up capital
15
49,672 28,740 78,412
110,771 29,240 140,011
47,029 47,029
100,283 100,283
(b)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. NOTE 15: CAPITAL AND LEASING COMMITMENTS (a) Finance lease and Hire Purchase Commitments Payable – minimum lease payments - not later than 12 months - later than 12 months but not later than five
54,882 -
116,617 -
Minimum lease payments Less: finance changes Minimum lease payments
54,882 (5,210) 49,672
116,617 (5,846) 110,771
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 payments 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 Payable – minimum lease payments - not later than 12 months - later than 12 months but not later than five
133,660 280,928
144,733 289,466
Minimum lease payments
414,588
434,199
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.
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Estate Agents Co-operative Limited Annual Report ABN 52 079 055 637
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016 NOTE 16: PROVISIONS
Note
CURRENT Employee entitlements NON-CURRENT Employee Entitlements Total employee entitlements
2016 $
2015 $
291,662 291,662
346,235 346,235
15,666 15,666
37,751 37,751
307,328
383,987
Employee Provisions Employee provisions represent amounts accrued for annual leave and Long Service Leave. The current portion for this provision includes the total amount accrued for annual leave entitlements. Based on past experience, the Co-operative does not expect the full amount of annual leave balances classified as current liabilities to be settled within the next 12 months. However, these amounts must be classified as current liabilities since the Co-operative does not have an unconditional right to defer the settlement of these amounts in the event employees wish to use their leave entitlement. The non-current portion for this provision includes amounts accrued for long service leave entitlements that have not yet vested in relation to those employees who have not yet completed the required period of service. 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 have been discussed in Note 1(g). Long-term Employee Benefits Opening balance at beginning of the year Additional provisions raised during year Amounts used Balance at end of year
221,395 16,802 (45,676) 192,521
NOTE 17: RELATED PARTIES Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other persons unless otherwise stated. There were no related party transactions during the year. NOTE 18: KEY MANAGEMENT PERSONNEL Key Management is defined as those persons having authority and responsibility for planning, directing and control of the activities of the Co-operative directly or indirectly, including any director (whether executive or otherwise) of the Co-operative. Total Compensation
921,786
NOTE 19: CONTINGENT LIABILITY There are no contingent liabilities at 30 June 2016 (2015: $Nil).
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992,435
Estate Agents Co-operative Limited Annual Report ABN 52 079 055 637
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016 NOTE 20: EVENTS AFTER BALANCE DATE No other matters or circumstances have arisen since the end of the financial year that would significantly affect or may significantly affect the operations of the Co-operative or the results of those operations, or the state of affairs of the Cooperative in the future financial years. NOTE 21: STATEMENT OF CASH FLOWS RECONCILIATION (a) Reconciliation of Cash 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: Note Cash at bank and in hand
2016 $ 224,553
2015 $ 349,466
(b) Reconciliation of Cash Flow from Operations with Profit after Income tax Operating profit after income tax Non cash flows in operating profit: - Depreciation - Provision for doubtful debts - (Profit)/Loss on disposal of assets Changes in Assets & Liabilities: Decrease (Increase) in receivables Decrease (Increase) in inventory Decrease (Increase) in other assets Decrease (Increase) in investment Increase (Decrease) in accounts payable Increase (Decrease) in other liabilities Increase (Decrease) in provisions Decrease (Increase) in tax assets/liability provisions Net cash provided by operating activities
(333,329)
(23,921)
147,407 (10,636)
178,375 (13,536)
22,890 (16,908) 38,105 479,574 (40,738) (500) (76,658) (180,836)
105,695 (5,801) (6,450) (59,338) (930) (120,590) 9,029
28,371
62,533
NOTE 22: FAIR VALUE MEASUREMENT The Co-operative has no assets that are measured at fair value on a recurring basis after their initial recognition. The Cooperative does not subsequently measure any liabilities at fair value on a recurring basis and has no assets or liabilities that are measured at fair value on a non-recurring basis.
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Estate Agents Co-operative Limited Annual Report ABN 52 079 055 637
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016 NOTE 23: FINANCIAL RISK
Note
2016 $
2015 $
The Co-operative's financial instruments consist mainly of deposits with banks, short-term investments, accounts receivable and payable. The totals for each category of financial instruments, measured in accordance with AASB 139 as detailed in the accounting policies to these financial statements, are as follows: Financial Assets Cash and cash equivalents Trade receivables Held to maturity investments Financial Liabilities Financial liabilities at amortised cost Trade and other payables Borrowings
5 6
224,553 371,803 1,356,950 1,953,306
349,466 394,693 1,836,524 2,580,683
13 14(a)
660,800 78,412 739,212
701,535 140,011 841,546
The Co-operative did not have any derivative instruments as at 30 June 2016.
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Estate Agents Co-operative Limited Annual Report ABN 52 079 055 637
DIRECTORS’ DECLARATION
The Directors of the Estate Agents Co-operative Limited declare that in the directors’ opinion: a. The financial statements and notes thereto are in accordance with the requirements of the Corporations Act 2001, Co-operatives (Adoption of National Law) Act 2012, Co-operatives National Regulation, including compliance with accounting standards - Reduced Disclosure Requirements and giving a true and fair view of the financial position and performance of the Co-operative. b. 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. Signed in accordance with a resolution of the board.
______________________ Director: A.B. Chapman
______________________ Director: E. J. Hanson
Dated this 28 September 2016
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Estate Agents Co-operative Limited Annual Report ABN 52 079 055 637
INDEPENDENT AUDIT REPORT To the Members of Estate Agents Co-operative Limited, I have audited the accompanying financial report of the Estate Agents Co-operative Limited (the "Co-operative"), which comprises the statement of financial position as at 30 June 2016 and the profit or loss and other comprehensive income statement, statement of changes in equity and cash flow statement for the year ended on that date, a summary of significant accounting policies and other explanatory notes and the directors’ declaration of the Co-operative as set out on pages 9 to 29. Directors’ Responsibility for the Financial Report The directors of the Co-operative are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards - Reduced disclosure Requirement and the Co-operatives (Adoption of National Law) Act 2012 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. Auditor’s Responsibility My responsibility is to express an opinion on the financial report based on my audit. I conducted my audit in accordance with Australian Auditing Standards. These Auditing Standards require that I 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 Co-operative’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 Cooperative’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. My audit did not involve an analysis of the prudence of business decisions made by directors or management. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion. Independence In conducting our audit, we have complied with the independence requirements of the Co-operatives (Adoption of National Law) Act 2012 and the Corporations Act 2001. Matters Relating to the Electronic Presentation of the Audited Financial Report This Auditor's Report also relates to the financial report of the Co-operative for the financial year ended 30 June 2016 included on the Co-operative's website. The Co-operative's directors are responsible for the integrity of the Co-operative's website. We have not been engaged to report on the integrity of this website. The audit report refers only to the financial report identified above. It does not provide an opinion on any other information which may have been hyperlinked to/from the financial report. If users of this report in an electronic presentation of the financial report are concerned with the inherent risks arising from electronic data communications they are advised to refer to the hard copy of the audited financial report to confirm the information included in the audited financial report presented on this website.
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Estate Agents Co-operative Limited Annual Report ABN 52 079 055 637
Auditor’s Opinion In my opinion, the financial report of The Estate Agents Co-operative Limited has been prepared in accordance the Cooperatives (Adoption of National Law) Act 2012 including: 1. giving a true and fair view of Co-operative’s financial position as at 30 June 2016 and of their performance for the year ended on that date; and 2. complying with Australian Accounting Standards - Reduced Disclosure Requirements and the Co-operatives National Regulations.
Ben Fock Registered Company Auditor Wollongong NSW Dated this 28 September 2016
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