Annual Report 2011-2012 - Quotable Value Limited · Annual Report 2011-2012 Annual Report 2011-2012...

Annual Report 2011-2012


Quotable Value Limited







2

Our customers :

Printed on sustainably produced paper

For the year ended 30 June 2012

Phil Lough . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Director (Chair)

Raewyn Lovett . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Director (Deputy Chair from 1 May 2012)

Derek Walker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Director (Deputy Chair) (to 30 April 2012)

Bryan Hemi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Director (to 1 June 2012)

Gary Traveller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Director

Ian Holland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Director

Roger Bridge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Director

Kim Wallace . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Director (from 1 May 2012)

Bill Osborne . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Chief Executive

Jacquie Barker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Chief Operating Offi cer

Andrew Crocker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Chief Financial Offi cer

Alan Roskruge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . General Manager Customer Solutions

John Baillie . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . General Manager Human Resources and Corporate Services

Murray Stevens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .General Manager Property Services

Rob Hutchison . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .General Manager Valuations

Head Offi ce . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . QV House, 22 Nevis Street, Petone

Postal Address . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Private Bag 39818, Lower Hutt 5045

Telephone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .+64 4 576 4460

Facsimile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .+64 4 576 4485

Website . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www .qv .co .nz

Auditor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Audit New Zealand, Wellington New Zealand

on behalf of the Controller and Auditor-General

Bankers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Westpac Banking Corporation

Solicitors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . DLA Phillips Fox

Insurance Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Marsh Limited

Directory

We work with them to understand their needs, then apply our knowledge and technological expertise to develop the solutions they’re looking for. Our business is about delivering accuracy, efficiency, reliability, value for money and service excellence. As our customers’ partner of choice in the property valuation and information business, we focus on delivering to their needs.

Our customers are at the heart of everything we do.

our focus

Message from the Chair and the Chief Executive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2

Our environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4

Our company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6

Our Board of Directors and management team . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8

Our reponse and achievements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10

Financial Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14

Directors’ Responsibility Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15

Statement of Comprehensive Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16

Statement of Changes in Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17

Statement of Financial Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18

Statement of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19

Notes to and forming part of the Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20

Statement of Key Performance Indicators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .50

Statutory Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .51

Statement of Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55

Independent Auditor’s Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .57

Directory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .59


Message from the Chair and the Chief Executive

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We are pleased to report a very strong performance while operating in challenging market conditions. During 2011/12 QV performed strongly against its financial objectives.

We achieved a post-tax group profit of $3 .6 million for the year, which is 81% ahead of target . Our rating and valuations services continue to deliver excellent results . Darroch Limited lifted its operational performance, due to a revamped and improved business model . Our joint venture company PropertyIQ also performed strongly, elevating its presence in the banking and finance sector . These are very pleasing results, particularly given the ever-changing and stressed economic environment . The results represent a growth in revenue of 2 .2% and a return on equity of 15 .2% .

Our financial success reflects our agility and flexibility in adapting to changing business conditions . We maintain a constant focus on and dialogue with our customers and excellence in our property appraisal businesses in New Zealand and Australia, while taking a frontline role in leading industry change .

Technological developments continue to drive improvements in the QV business . Being an early adopter of technology reflects a culture of innovation and adaptability . The solutions launched during the year are a direct result of listening and responding to customer needs, working closely with them to deliver astute relevant responses . There is no better source of guidance; we thank all our customers for their ongoing support .

We would like to pay special tribute to our people, who were the key to this year’s outstanding financial result and have helped to position the company well for the future . We especially acknowledge our people in earthquake-ravaged Canterbury, whose resilience is a source of inspiration and pride for the whole company .

The Board and management have worked closely in the past year to ensure our strategy is constantly reviewed against the operating environment . Changes, where required, have been implemented efficiently and effectively, assisting in this year’s good performance .

During the year the Board bid farewell to Bryan Hemi and Derek Walker, who made outstanding contributions during their time as Directors . The company welcomes Kim Wallace, who joined the Board in May .

We believe that QV can look forward to a strong and vibrant future . The commitment of our people is underpinned by a determination to help our customers succeed in their business endeavours .

Phil Lough Bill OsborneChair Chief Executive

The past 12 months have delivered both challenges

and opportunities for those involved in New Zealand’s

property market.

Against a backdrop of ongoing uncertainty in the global economic environment, New Zealand has continued to experience slow economic growth. Building activity has remained weak and mortgagee sales have increased.

While this situation is expected to continue for the foreseeable future, consumer spending has increased and signs of improvement are evident in some parts of the property market . This is most notable in urban areas, particularly in Auckland and earthquake-affected Canterbury, where property buying and building trends have been similar to those seen in the 2007 peak .

In areas that are proving resilient to the economic downturn, a combination of low interest rates and property availability has driven up prices and buyer demand .

Changing times, changing needs

In this ever-evolving marketplace, our customers are looking for smarter, faster and more cost-effective ways to do business with us .

They are seeking tailored solutions to manage their risks, increase their business efficiency and achieve their strategic goals . Many are adopting new ways of working . Those in the commercial and industrial sector are implementing a more vertically integrated approach, the main focus being the better management of their perceived risks .

Our environment

5

Similarly, local and central government customers are streamlining their operations . They are reducing expenses and seeking economies of scale through shared services and amalgamation . The state sector is looking to cut the costs of property ownership while improving management practices, increasing rental revenue and achieving better value and returns from property sales . Local government organisations are also looking for cost efficiencies . Through regular tendering processes, and ‘clustering’ with other councils, they want to both minimise their risks and gain maximum value from their contracts and contractors .

In the residential market, ‘value for money’ continues to be the catch cry . This is accompanied by a demand for a more customer-focused (rather than valuer-oriented) approach . Straightforward, jargon-free valuation reports, faster response times and enhanced online access and services all aim to satisfy this need for our customers .

As for banks and other finance providers, in keeping with the changing financial services environment, they’re seeking to minimise the risks associated with property-related lending . They’re looking for robust valuation services that deliver quality and accuracy . This then enables them to analyse and use valuation data efficiently in their lending decisions .

Innovation for the future

This is the kind of environment in which QV thrives . We welcome opportunities to identify and implement new ways to meet our customers’ needs, whether it’s through innovative technology, more efficient service or a new approach to business . As individual entities and as a cohesive, collaborative group, we have the knowledge and experience to provide the latest value-added services . This in turn helps our customers to achieve their business goals .

QV is a commercially focused, market-driven organisation.

We specialise in providing value-added property

services and property-related information to customers in New Zealand and Australia. Our vision is to be the one

place where people go when they think about property.

Our company

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New Zealand’s 170-plus QV team provides rating and valuation services for central and local government, individuals and finance providers nationwide .

Rating valuations are a key tool in the local government rates-setting process . We have developed and continue to enhance our range of services to help councils respond to increasing government and ratepayer pressure to improve efficiency and reduce costs .

QV’s valuation services focus on residential property owners, tenants and managers – from organisations with large property portfolios to private individuals . Finance providers’ demand for greater compliance and transparency is signalling massive change for this market . In response we’re delivering industry-leading solutions .

QV Australia provides specialist rating and taxation services to local government organisations across the Tasman . Established in 2000 as a wholly owned subsidiary based in New South Wales, QV Australia now has the largest market share of rating contracts in the state and has extended into Victoria .

While each state in Australia has a unique rating service structure, all suppliers are expected to meet explicit compliance requirements . QV Australia is successfully meeting these requirements while also offering cost-effective alternative solutions .

Egan Australasia Pty Limited is a wholly owned subsidiary of QV that provides valuation services for Australia’s commercial and industrial property market . It has offices in New South Wales, Victoria and Australian Capital Territory .

Darroch is an independent property services and valuation company operating in New Zealand’s commercial and industrial property market . Founded more than 40 years ago, it has a proud reputation for transparency, impartiality and integrity .

Darroch helps its clients to make the best possible property-related decisions by providing relevant, up-to-date market information and analysis based on a thorough understanding of their business challenges and aspirations . By helping its clients to understand the implications of their decisions, Darroch is helping them to prepare for the future .

Darroch became a wholly owned subsidiary of QV in late 2009, and continues to provide strategic insights and practical valuation and property management services .

PropertyIQ – a joint venture between QV and CoreLogic – a market leading property information and data analytics company . PropertyIQ drives customers’ success by utilising in-depth knowledge and experience of New Zealand’s property market with leading technology to deliver insight and advantage .

PropertyIQ provides innovative solutions to a broad range of customers, including banks, insurance companies, real estate agents, valuers, property developers, government agencies, and everyday Kiwi consumers looking to buy or sell property . Our customers have a range of tailored, subscription and on-demand technical data delivery services customised to best meet their specific industry needs .

Our culture is driven by our customers. By understanding their aspirations, challenges and needs we can do more than deliver services. We are a true partner in their success and a better business for the future, with a strong sense of corporate and social responsibility.

Our Board of Directors and management team

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QV’s management team is responsible for overseeing the day to day running of the business with individual members, where relevant, accountable for the companies within QV .

It comprises:

• Bill Osborne – Chief Executive

• Jacquie Barker – Chief Operating Officer

• Andrew Crocker – Chief Financial Officer

• John Baillie – General Manager Corporate Services and Human Resources

• Alan Roskruge – General Manager Customer Solutions

• Murray Stevens – General Manager Darroch Property Services

• Rob Hutchison (absent) – General Manager Darroch Valuations

QV’s independent Board of Directors oversees the management of the business on behalf of the shareholding Ministers – the Minister of Finance and the Minister for State Owned Enterprises .

The Board is committed to best practice governance principles and practice . During 2011/12 it implemented a number of initiatives to strengthen QV’s governance processes .

The Board members are:

• Phil Lough – Chair

• Raewyn Lovett – Deputy Chair

• Gary Traveller

• Ian Holland

• Roger Bridge

• In May 2012 the Board welcomed Ms Kim Wallace as a Director .

In 2011/12 QV continued to lead change in the industry by

challenging the status quo. We explored and embraced new technology and different ways of working. In doing so, we set new

standards of service performance.

Our response and achievements

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For our customers, this focus delivered tangible benefits through reduced costs, better products and smarter ways of working. We now have a strong foundation on which to develop our capabilities further, and to build on our relationships with customers and other business partners.

Investing in technology to deliver better value

In the past few years we’ve made a significant investment in state-of-the-art technology . By developing a range of value-added innovations, we’ve enabled our customers to work more efficiently while saving time, money and resources .

Through mobile technology our valuers can access and record property-specific information . A combination of Windows-based tablets and ‘Fieldworker’ software enables them to link directly to the QV database, resources and tools . They can then write and download their reports and, where necessary, dispatch them for peer review . This enables the reports to be turned around in a faster time to our customers .

This technology provides a platform for further enhancements in the future, such as being able to address rating objections (on behalf of local government) in the field . This will build on the new ‘objection portal’, which enables home-owners to upload information and photographs, in turn saving the valuers considerable time on-site .

In another innovation, New Zealand’s major banks can now order residential property valuations directly from an independent online ‘panel’ of more than 45 valuation companies nationwide . QV was one of the first providers to join the panel, which offers the banks an unprecedented assurance of valuer independence . Banks receive valuation reports electronically that comply with their credit policies, while reducing risks for both lenders and borrowers, decreasing opportunities for fraud, and lowering the potential for inflated property values .

Developing stronger relationships with our customers

As part of our commitment to making life easier for our customers, in 2011/12 we launched a project to rewrite and redesign the QV valuation report . The new ‘customer-centric’ version, developed in consultation with regular report users, is easier to read and navigate and already receiving widespread positive feedback .

Our focus on providing in-depth insights and advice to our business customers has continued . With our access to a huge range of property-related information, we can help our customers to make well informed decisions that benefit their properties and empower them to reach their strategic goals .

We also took the opportunity to strengthen our business relationships by:

• Supporting the 2012 Rating Practitioner Regional Conference . This was held in October in Palmerston North, Rotorua, Christchurch and Gore and attended by more than 120 council staff

• Exhibiting and engaging with attendees at the Society of Local Government and the Association of Local Government Information Management conferences .

In addition, the Darroch team hosted a ‘Rent Review Seminar’ for its clients in partnership with DLA Phillips Fox . Darroch worked with Bank of New Zealand to integrate an asset management system with an existing upgraded property management operating system, resulting in better capital expenditure planning on a life cycle basis .

We were very pleased with the results of our work on the Auckland Council 2011 General Revaluation . This was the most extensive revaluation project ever undertaken in New Zealand . Delivered on time and within budget, it involved working with the Council’s valuation team to undertake more than 500,000 valuations, and included the provision of a dedicated call centre service .

At year’s end we were delighted to be awarded the contract for Christchurch’s rating valuation services through a competitive tender process . This will see us providing city-wide revaluations next year, a significant task given that many property values are likely to have been affected by the earthquakes .

“As well as providing an extremely competitive price, QV has the

scale, experience and the expertise needed for this complex project.”

Paul Anderson Corporate Services General Manager

Christchurch City Council

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Working as a team

Where would QV be without its people? They are indeed the secret to our success .

During 2011/12 the team continued to work extremely hard to exceed customer expectations in a dynamic and often complex market .

The QV rating and valuations staff supported each other in meeting the challenges of often heavy workloads and managing some new large initiatives . The team showed their strength and flexibility, which enabled them to set industry benchmarks and surpass previous years’ achievements .

The Darroch management team continued to foster a strong organisational culture . This is already showing its worth, with increased productivity leading to a 12% increase in generated revenue per Darroch valuer during the year .

In Australia, QV Australia and Egan National Valuers continually identify changes to improve the way they work . They combine this business-building with leadership-building, through a course tailored to the management teams .

Our people are also committed to personal health and wellness . During the year many tested their fitness in competitive events, including the Auckland ‘Round the Bays’ charity run, the Sydney ‘City2Surf’ race, and local touch rugby competitions and cycling events . As well, ‘green’ initiatives such as the ‘reuse, reduce and recycle’ scheme continued .

Meanwhile, those affected by the Canterbury earthquakes were never far from our minds . In September QV held a ‘red and black’ day to raise money for the Christchurch office, which included the gift of a new television and Nintendo Wii .

We continued to offer our staff professional development opportunities . These included the QV Future Leaders programme, helping up-and-coming individuals to prepare for leadership roles, and a range of leadership courses to help our people to develop their management skills .

We’re pleased to report that at the end of the 2011/12 year our ‘employee engagement score’ showed a marked improvement on the results achieved in December 2012, when a new methodology was implemented . This score is a reflection of our employees’ overall commitment to the company, willingness to continue working here and motivation to ‘go the extra mile’ .

Contributing to a sustainable world

QV is committed to reducing its impact on the environment and protecting it for future generations .

With this in mind, we continued our drive to reduce our carbon emissions, save energy and reduce, reuse and recycle wherever and whenever we can . Our vehicle fleet is required to meet specific fuel consumption standards, and we aim to reduce our energy consumption and costs through co-locating QV and Darroch offices wherever it is possible and practical to do so .

Financial Performance

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The accompanying notes form part of these financial statements.

Directors’ Responsibility StatementFor the year ended 30 June 2012

The Directors are responsible for the preparation, in accordance with New Zealand law and generally accepted accounting practice, of the financial statements which give a true and fair view of the financial position of Quotable Value Limited (the Company) and the Group as at 30 June 2012 and the results of their operations and cash flows for the year ended 30 June 2012 . The Group comprises of Quotable Value Limited, New Zealand Valuation Limited, Darroch Limited, Quotable Value Australia Pty Limited and Egan Australasia Pty Limited .

The Directors consider that the financial statements of the Company and the Group have been prepared using accounting policies appropriate to the Company and Group circumstances, consistently applied and supported by reasonable and prudent judgements and estimates, and that all applicable New Zealand Equivalents to International Financial Reporting Standards have been followed .

The Directors have responsibility for the maintenance of a system of internal control designed to provide reasonable assurance as to the integrity and reliability of financial reporting . The Directors consider that adequate steps have been taken to safeguard the assets of the Company and Group and to prevent and detect fraud and other irregularities .

The Directors are pleased to present the financial statements of the Company and Group for the year ended 30 June 2012 .

This annual report is dated 17th September 2012 and is signed in accordance with a resolution of the Directors made pursuant to section 211(1)(k) of the Companies Act 1993 .

For and on behalf of the Directors

Phil Lough Raewyn LovettChair Director

Dated this 17th day of September 2012

The accompanying notes form part of these financial statements .

Statement of Comprehensive IncomeFor the year ended 30 June 2012

Group Parent Company

2012 Budget 2011 2012 Budget 2011

Notes $NZ’000 $NZ’000 $NZ’000 $NZ’000 $NZ’000 $NZ’000

Revenue

Trading revenue 2 (a) 45,977 47,220 45,983 22,947 21,665 21,288

Investment revenue 2 (b) 1,591 1,300 565 811 1,300 477

Total Income 47,568 48,520 46,548 23,758 22,965 21,765

Expenses

Personnel expenses 2 (c) (29,346) (30,562) (30,587) (13,950) (13,692) (12,480)

Operating expenses 2 (c) (5,934) (5,900) (6,420) (3,216) (3,098) (3,234)

Marketing expenses 2 (c) (244) (379) (368) (168) (308) (197)

Occupancy expenses 2 (c) (2,630) (2,774) (2,827) (984) (950) (880)

Administration expenses 2 (c) (1,253) (1,301) (1,307) (632) (678) (661)

Depreciation and amortisation expense 2 (c) (1,515) (1,094) (3,295) (776) (750) (788)

Finance costs 2 (c) (38) (509) (16) (19) (509) (16)

Consulting expense 2 (c) (232) (664) (348) (232) (395) (344)

Other expense 2 (c) (2,657) (2,538) (3,572) (1,769) (1,363) (1,672)

Total expenses (43,849) (45,721) (48,740) (21,746) (21,743) (20,272)

Profit (Loss) before taxation 3,719 2,799 (2,192) 2,012 1,222 1,493

Income tax expense 3 (406) (840) (6) 12 (342) (366)

Profit (Loss) for the year net of tax 3,313 1,959 (2,198) 2,024 880 1,127

Profit (Loss) for the year is attributable to:

Equity holders of the parent 3,313 1,959 (2,198) 2,024 880 1,127

22 3,313 1,959 (2,198) 2,024 880 1,127

Profit (Loss) for the year net of tax 3,313 1,959 (2,198) 2,024 880 1,127

Other Comprehensive Income

Translation of foreign operations 21 239 - 108 - - -

Other comprehensive income for the year net of tax 239 - 108 - - -

Total comprehensive income for the year, net of tax 3,552 1,959 (2,090) 2,024 880 1,127

Total comprehensive income is attributable to:

Equity holders of the parent 3,552 1,959 (2,090) 2,024 880 1,127

3,552 1,959 (2,090) 2,024 880 1,127

17


Statement of Changes in EquityFor the year ended 30 June 2012

Fully paid ordinary

sharesRetained earnings

Attributable to equity

holders of the parent Total

$NZ’000 $NZ’000 $NZ’000 $NZ’000

GroupBalance at 1 July 2010 4,600 15,471 2,070 22,141

4,600 15,471 2,070 22,141

Total comprehensive income for the year, net of tax - - (2,090) (2,090)

Payment of dividends - - - -

Balance at 1 July 2011 4,600 15,471 (20) 20,0514,600 15,471 (20) 20,051

Total comprehensive income for the year, net of tax - - 3,552 3,552


Balance at 30 June 2012 4,600 15,471 3,532 23,603

ParentBalance at 1 July 2010 4,600 15,925 113 20,638

4,600 15,925 113 20,638



Balance at 1 July 2011 4,600 15,925 1,240 21,7654,600 15,925 1,240 21,765



Balance at 30 June 2012 4,600 15,925 3,264 23,789

The accompanying notes form part of these financial statements .

Statement of Financial PositionAs at 30 June 2012

Group Parent Company2012 Budget 2011 2012 Budget 2011


Current assets

Cash and cash equivalents 5 5,112 154 2,437 4,547 69 1,707

Trade and other receivables 6 7,486 9,188 7,981 3,354 3,325 3,297

Deferred taxation 3 1,568 1,641 1,641 1,031 933 848

Taxation receivable 559 - 131 571 - 197

Total current assets 14,725 10,983 12,190 9,503 4,327 6,049

Non-current assetsInvestment in subsidiary companies 10, 11 - - - 7,651 11,275 8,775

Investment in joint venture 10, 12 13,472 12,709 12,127 10,946 10,946 10,946

Property, plant & equipment 7 616 2,365 974 369 2,065 607

Goodwill 8 2,739 7,731 3,167 159 159 159

Intangible assets 9 1,291 740 1,414 1,012 1,204 940

Total non-current assets 18,118 23,545 17,682 20,137 25,649 21,427

Total assets 32,843 34,528 29,872 29,640 29,976 27,476

Current liabilitiesTrade and other payables 17 2,186 3,406 2,301 1,124 1,288 1,011

Employment entitlements 18 4,275 1,808 3,668 2,348 703 1,608

Dividend provision 14 - 480 - - - -

Provisions 19 1,316 - 767 1,286 418 419

Taxation payable - 160 - - 33 -

Total current liabilities 7,777 5,854 6,736 4,758 2,442 3,038

Non-current liabilitiesBorrowings 15 - 5,000 500 - 5,000 500

Employment entitlements 18 374 426 426 93 103 103

Provisions 19 1,089 - 2,159 1,000 92 2,070

Deferred tax 3 - - - - - -

Total non-current liabilities 1,463 5,426 3,085 1,093 5,195 2,673

Total liabilities 9,240 11,280 9,821 5,851 7,637 5,711

Net assets 23,603 23,248 20,051 23,789 22,339 21,765

EquityIssued capital 4 4,600 4,600 4,600 4,600 4,600 4,600

Reserves 21 494 255 255 - - -

Retained earnings 20 18,509 18,393 15,196 19,189 17,739 17,165

Total equity 23,603 23,248 20,051 23,789 22,339 21,765

For and on behalf of the Board, who authorised the issue of these financial statements on 17th September 2012 .

Phil Lough Raewyn LovettChair Director

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Statement of Cash FlowsFor the year ended 30 June 2012

Group Parent Company2012 Budget 2011 2012 Budget 2011


Cash flows from operating activitiesCash was provided from:

Revenues from operations 48,043 47,039 47,337 22,890 22,160 21,617

Interest received 20 - 9 96 - 9

48,063 47,039 47,346 22,986 22,160 21,626 Cash was applied to:

Payments to employees and suppliers 38,753 41,864 42,992 18,346 21,257 18,340

Net GST paid 3,590 3,322 3,322 1,965 1,784 1,775

Interest paid 38 509 16 19 509 16

Income tax paid 744 782 999 545 400 355

43,125 46,477 47,329 20,875 23,950 20,486 Net cash flows from operating activities 22 4,938 562 17 2,111 (1,790) 1,140

Cash flows from investing activitiesCash was provided from

Dividends received - - 1 715 - 468

Investment in subsidiary company and joint venture - - 64 1,124 - 1,144

Sale of fixed assets 18 - - 18 - -

18 - 65 1,857 - 1,612 Cash was applied to:

Investment in subsidiary company and joint venture 1,093 - 89 77 2,500 -

Purchase of goodwill 19 2,500 - - - -

Purchase of fixed assets 669 1,700 194 551 1,558 54

1,781 4,200 283 628 4,058 54 Net cash flows from investing activities (1,763) (4,200) (218) 1,229 (4,058) 1,558

Cash flows from financing activitiesCash was provided from:

Loan advance - 4,000 - - 4,500 -

- 4,000 - - 4,500 - Cash was applied to:

Loans repaid 500 - 950 500 - 950

Purchase of share capital - - - - - 2,847

Dividends paid - 793 - - 290 -

500 793 950 500 290 3,797 Net cash flows from financing activities (500) 3,207 (950) (500) 4,210 (3,797)

Net increase (decrease) in cash and cash equivalents 2,675 (431) (1,151) 2,840 (1,638) (1,099)

Effect of exchange rate on translation of independent foreign operations - - 27 - - -

Plus cash and cash equivalents as at 1 July 2,437 585 3,561 1,707 1,707 2,806

Cash and cash equivalents as at 30 June 5,112 154 2,437 4,547 69 1,707

The GST (net) component of operating activities reflects the net GST paid and received with the Inland Revenue Department . The GST (net) component has been presented on a net basis, as the gross amounts do not provide meaningful information for financial statement purposes .

Notes to and forming part of the Financial StatementsFor the year ended 30 June 2012

1. Summary of Accounting Policies

Reporting EntityThese are the financial statements of Quotable Value Limited and Group which are State-Owned Enterprise entities in terms of the State-Owned Enterprises Act 1986 . The Group comprises of Quotable Value Limited, Darroch Limited, and New Zealand Valuation Limited, which are registered under the Companies Act 1993, and Quotable Value Australia Pty Limited and Egan Australasia Pty Limited, which are registered in Australia under the Corporations Law .

The Group became a State-Owned Enterprise on 25 January 2005, previously the Group was a Crown Entity . The Group is incorporated and domiciled in New Zealand . Its principal activity is the provision of property valuations and data . The Group have designated itself as a profit orientated entity for the purposes of New Zealand equivalent to International Financial Reporting Standards (NZ IFRS) .

The financial statements were authorised for issue by the Directors on 17th September 2012 .

Statement of ComplianceThese financial statements have been prepared in accordance with Generally Accepted Accounting Practice in New Zealand (NZ GAAP), the requirements of the State-Owned Enterprises Act 1986, the Companies Act 1993, and the Financial Reporting Act 1993 .

They comply with the New Zealand equivalent to International Financial Reporting Standards (NZ IFRS) and other applicable Financial Reporting Standards . Compliance with NZ IFRS ensures that the consolidated financial statements also comply with International Financial Reporting Standards (IFRS) .

Basis of PreparationThe financial statements have been prepared on an historical cost basis .

The transition to NZ IFRS was accounted for in accordance with NZ IFRS-1 “First-time Adoption of New Zealand Equivalents to International Financial Reporting Standards”, with 1 July 2006 as the date of transition .

The accounting policies set out below have been applied in preparing the financial statements for the year ended 30 June 2012, the comparative information presented in these financial statements for the year ended 30 June 2011 .

Functional and Presentation CurrencyThese financial statements are presented in New Zealand dollars ($), which is Quotable Value Limited’s functional currency . All financial information presented in New Zealand dollars has been shown in thousands and are rounded to the nearest thousand dollar .

Changes in Accounting PoliciesThere have been no changes in accounting policies during the financial year .

Details of standards, amendments and interpretations that have been adopted are as follows:Quotable Value Limited and Group has adopted the following revisions to accounting standards during the financial year, which have had only a presentational or disclosure effect:

FRS 44 – New Zealand Additional Disclosures consolidates the additional disclosure requirements to IFRS in New Zealand . The disclosures under this standard are not new, but were relocated to a separate standard as part of the Harmonisation Amendments programme between Australian and New Zealand GAAP . The standard also amends the disclosure of audit fees to include auditor “network” firms .

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Details of standards, amendments and interpretations that have not been adopted are as follows:Standards, amendments and interpretations issued but not yet effective that have not been early adopted, and which are relevant to Quotable Value Limited and Group, are:

NZ IFRS 9 Financial Instruments will eventually replace NZ IAS 39 Financial Instruments: Recognition and Measurement . NZ IAS 39 is being replaced through the following three main phases:

“Phase 1 Classification and Measurement”,

“Phase 2 Impairment Methodology”, and

“Phase 3 Hedge Accounting” .

Phase 1 on the classification and measurement of financial assets has been completed and has been published in the new financial instrument standard NZ IFRS 9 . NZ IFRS 9 uses a single approach to determine whether a financial asset is measured at amortised cost or fair value, replacing the many different rules in NZ IAS 39 . The approach in NZ IFRS 9 is based on how an entity manages its financial instruments (its business model) and the contractual cash flow characteristics of the financial assets . The new standard also requires a single impairment method to be used, replacing the many different impairment methods in NZ IAS 39 . The new standard is required to be adopted for the year ended 30 June 2016 . The Company has not yet assessed the effect of the new standard and expects it will not be early adopted .

Specific Accounting Policies

The following accounting policies which materially affect the measurement of financial performance and financial position for the Parent and Group have been applied:

(a) Budget Figures

The budget figures are those approved by the Board at the beginning of the financial year .

The budget figures have been prepared in accordance with generally accepted accounting practice and are consistent with the accounting policies adopted by the Board for the preparation of the financial statements .

(b) Consolidation of Subsidiaries

Subsidiaries are those entities that are controlled by the company .

The group financial statements incorporate the financial statements of the company (Quotable Value Limited) and its 100% owned subsidiaries (Darroch Limited, Quotable Value Australia Pty Limited, Egan Australasia Pty Limited, and New Zealand Valuation Limited) . The subsidiaries are accounted for using the purchase method, which involves adding together corresponding assets, liabilities, revenues and expenses on a line by line basis . Details are disclosed in notes 10 and 11 .

The consolidated financial statements include the information and results of each subsidiary from the date on which the company obtains control and until such time as the company ceases to control the subsidiary .

All significant inter-company transactions, balances and unrealised profits are eliminated in full upon consolidation . In the parent company financial statements, the investments in the subsidiary are stated at cost .

(c) Accounting for Joint Ventures and Joint Venture Companies

PropertyInsight and PropertyIQ Limited are joint arrangements between the company and other parties in which there is a contractual agreement to undertake a specific business project in which the ventures share several liability in respect of the costs and liabilities of the project and share in any resulting output .

Jointly controlled assets and operationsInterests in jointly controlled assets and operations are accounted for under the equity method in the consolidated financial statements and the cost method in the company financial statements . From the date of acquisition the Group recognises 45% share of profit and dividends .

Jointly controlled entitiesInterests in jointly controlled entities are accounted for under the equity method in the consolidated financial statements and the cost method in the company financial statements . From the date of acquisition the Group recognises 50% share of profit and dividends .

(d) Revenue

Quotable Value Limited and Group derives revenue through the provision of services to third parties and income from investments .

Revenue is measured at the fair value of the consideration received/receivable . Partially completed services are valued on a time and cost basis excluding costs deemed not collectible .

Interest revenue 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 .

(e) Receivables

Accounts receivable are initially measured at fair value and subsequently measured at amortised cost using the effective interest method, less any provision for impairment .

(f) Property, Plant and Equipment

Property, plant and equipment asset classes consist of leasehold improvements, motor vehicles, office equipment, furniture and fittings, EDP equipment, general hardware and core application hardware .

Property, plant and equipment are stated at cost less depreciation and impairment losses .

AdditionsThe cost of an item of property, plant and equipment is recognised as an asset only when it is probable that future economic benefits or service potential associated with the item will flow to the entity and the cost of the property, plant or equipment can be measured reliably .

DisposalsGains and losses on disposals are determined by comparing the proceeds with the carrying amount of the asset . Any gains and losses on disposals are included in the surplus or deficit .

Subsequent costsCosts incurred subsequent to initial acquisition are capitalised only when it is probable that the future economic benefits or service potential associated with the item will flow to the entity and the cost of the property, plant and equipment can be measured reliably .

The day-to-day servicing costs of property, plant and equipment are recognised in the Statement of Comprehensive Income when they are incurred .

DepreciationProperty, plant and equipment are depreciated on a straight line basis that will write off the cost of the assets to their estimated residual value over their useful life .

The depreciation rates used in the preparation of these statements are as follows:

Asset Depreciation Rate

Furniture and fittings 15%

Motor vehicles 20%

Office equipment 33%

General hardware 25%

Leasehold improvements 33%

The residual value and useful life of an asset is reviewed, and adjusted if applicable, at each financial year end .

The cost of leasehold improvements is capitalised and depreciated over the unexpired period of the lease or the estimated remaining useful life of the improvements, whichever is the shorter .

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(g) Investments

At each balance sheet date Quotable Value Limited assesses whether there is any objective evidence that an investment is impaired .

Investments in bank deposits are initially measured at fair value plus transaction costs . After initial recognition investments in bank deposits are measured at amortised cost using the effective interest method . For bank deposits, impairment is established when there is objective evidence that Quotable Value Limited will not be able to collect amounts due according to the original terms of the deposit . Significant financial difficulties of the bank, probability that the bank will enter into bankruptcy, and default in payments are considered indicators that the deposit is impaired .

QVL’s investments in its subsidiary and joint venture company are held at cost .

Any write-downs are recognised in the Statement of Comprehensive Income .

(h) Work in Progress

Work in progress is work undertaken but not invoiced at month end . The value of work in progress is stated at the lower of cost or net realisable value .

(i) Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except for receivables and payables, which are recognised inclusive of GST . Where GST is irrecoverable as an input tax, then it is recognised as part of the related asset or expense . The net amount of GST recoverable from, or payable to, the IRD is included as part of receivables or payables in the Statement of Financial Position .

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 as operating cash flows .

Commitments and contingencies are disclosed exclusive of GST .

(j) Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax .

The tax currently payable is based on taxable profit for the year . Taxable profit differs from profit as reported in the Statement of Comprehensive Income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible . The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date .

Deferred tax is recognised on 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, and is accounted for using the balance sheet liability method . Deferred tax liabilities are generally recognised for all taxable temporary differences, and 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 assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other 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 Group 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 each balance sheet date 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 balance sheet date . The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities .

Deferred tax assets and liabilities 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 Group intends to settle its current tax assets and liabilities on a net basis .

Current and deferred tax are recognised as an expense or income in profit or loss, except when they relate to items credited or debited directly to equity, in which case the tax is also recognised directly in equity, or where they arise from the initial accounting for a business combination . In the case of a business combination, the tax effect is taken into account in calculating goodwill or in determining the excess of the acquirer’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities over the cost of the business combination .

(k) Borrowings

Borrowings are recorded initially at fair value, net of transaction costs . Subsequent to initial recognition, borrowings are measured at amortised cost using the effective interest method .

(l) Borrowing Costs

Interest expense is accrued on a time basis using the effective interest method .

Borrowing costsBorrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale .

To the extent that floating rate borrowings are used to finance a qualifying asset and are hedged in an effective cash flow hedge of interest risk, the effective portion of the derivative is recognised in other comprehensive income and accumulated as a separate component of equity, and is reclassified from equity to profit or loss (as a reclassification adjustment) when the qualifying asset impacts profit and loss . To the extent that fixed rate borrowings are used to finance qualifying asset and are hedged in an effective fair value hedge of interest rate risk, the capitalised borrowing costs reflect the hedged interest rate .

Investment income earned on temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation .

All other borrowing costs are recognised as an expense in the period in which the charge relates to .

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(m) Intangible Assets

GoodwillGoodwill on acquisition of subsidiaries is recognised as an asset and separately identified . Goodwill is not amortised, but tested for impairment annually and whenever there is an indication that the goodwill may be impaired . Any impairment is recognised immediately in Statement of Comprehensive Income and is not subsequently reversed .

Software acquisition and developmentAcquired computer software licenses are capitalised on the basis of the costs incurred to acquire and bring to use the specific software .

Costs that are directly associated with the development of software for internal use are recognised as an intangible asset . Direct costs include software development employee costs and an appropriate portion of relevant overheads .

Staff training costs are recognised as an expense when incurred .

Costs of maintaining computer software are recognised as an expense when incurred .

Costs of developing and maintaining the company website are recognised as an expense when incurred .

AmortisationThe carrying value of an intangible asset with a finite life is amortised on a straight line basis over its useful life . Amortisation begins when the asset is available for use and ceases the date the asset is derecognised . The amortisation charge for each financial year is recognised in the surplus or deficit .

The useful lives and associated amortisation rates of major classes of intangible assets have been estimated as follows:

Acquired computer software 3 years 33%

Developed computer software 4 years 25%

(n) Other Intangible Assets

Database and softwareThe QIVS II Database and software are recorded at cost less accumulated amortisation and impairment . Amortisation is charged on a straight-line basis over their estimated useful lives . The estimated useful life and amortisation method is reviewed at the end of each annual reporting period, with any changes being recognised as a change in accounting estimate .

The amortisation rates used in the preparation of these statements are as follows:

Asset Amortisation Rate

QIVS II Database 15%

Software 33%

(o) Non-Derivative Financial Instruments

Non-derivative financial instruments include trade and other receivables, cash and cash equivalents, loans and borrowings, and trade and other payables .

Non-derivative financial instruments are recognised initially at fair value on the date the entity becomes a party to the contractual provisions of the instrument .

Financial assets are derecognised if the entity contractual rights to the cash flows from the financial assets expire or if the entity transfers the financial asset to another party without retaining control or substantially all risks and rewards of the asset .

Financial liabilities are derecognised if the entity’s obligations specified in the contract expire or are discharged or cancelled .

(p) 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 .

Operating leasesLeases that do not transfer substantially all the risks and rewards incidental to ownership of an asset to Quotable Value Limited are classified as operating leases . Lease payments under an operating lease are recognised as an expense on a straight-line basis over the term of the lease in the Statement of Comprehensive Income .

(q) Foreign Currency Transactions

Foreign currency transactions (including those for which forward exchange contracts are held) are translated into New Zealand dollars using the exchange rates prevailing at the dates of the transactions . Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of Comprehensive Income .

(r) Translation of Financial Statements of Foreign Operations

Assets and liabilities of independent foreign operations are translated at the closing rate . Revenue and expense items are translated at Treasury mid month exchange rates over the year, as a surrogate for the spot rates at transaction dates . Exchange differences arising from the foregoing are taken to the Statement of Comprehensive Income and then accumulated to a foreign currency translation reserve in equity .

(s) Reserves

Foreign currency translation differences of independent foreign operations shall be recognised in equity in a foreign currency reserve .

(t) Research and Development

Development costs are recognised as an asset when all of the following criteria are met:

• the product or process is clearly defined and the costs attributable to the product or process can be identified separately and measured reliably;

• the technical feasibility of the product or process can be demonstrated;

• the company intends to produce and market, or use, the product or process;

• the existence of a market for the product or process or its usefulness to the company, if it is to be used internally, can be demonstrated; and

• adequate resources exist, or their availability can be demonstrated, to complete the project and market or use the product or process .

Capitalisation is limited to that amount which, taken together with further related costs, is probable of recovery from related future benefits .

Development costs recognised as an asset are amortised on a straight line basis over the period of expected benefits .

All other development costs and all research costs are recognised as expenses in the period in which they are incurred .

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(u) Financial Instruments

Quotable Value Limited and Group is party to financial instruments as part of its normal operations . These financial instruments include bank accounts, short-term deposits, debtors, creditors and loans . All financial instruments are recognised in the balance sheet and all revenues and expenses in relation to financial instruments are recognised in the Statement of Comprehensive Income .

(v) Statement of Cash Flows

Cash means cash balances on hand, held in bank accounts, demand deposits and other highly liquid investments in which the Company and Group invests as part of its day-to-day cash management .

Operating activities include cash received from all income sources of the Company and Group and records the cash payments made for the supply of goods and services .

Investing activities are those activities relating to the acquisition and disposal of non-current assets .

Financing activities comprise the change in equity and debt capital structure .

(w) Cash and Cash Equivalents

Cash comprises cash on hand and demand deposits . Cash equivalents are short-term (less than three months), highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value . Bank overdrafts are shown with borrowing in current liabilities in the balance sheet .

(x) Payables

Trade payables and other accounts payable are recognised when the Company and Group becomes obliged to make future payments resulting from the purchase of goods and services .

(y) Impairment of Assets

The group reviews the carrying amounts of its finite life tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss . In that case the recoverable amount of the asset is estimated in order to determine the extent of impairment loss if any .

An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount . The recoverable amount is the higher of the asset’s fair value less the cost to sell and value in use .

Goodwill with indefinite useful life is tested for impairment annually and whenever there is an indication that the asset may be impaired . An impairment of goodwill is not subsequently reversed .

An impairment loss is recognised in the Statement of Comprehensive Income immediately, unless the relevant asset is carried at fair value, in which case the impairment loss is treated as a revaluation decrease .

(z) Provisions

Provisions are recognised when the group has a present obligation (either legal or constructive) as a result of a past event, the future sacrifice of economic benefits is probable, and the amount of the provision can be measured reliably .

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation . Where 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 .

(aa) Employee Entitlements

Short-term employee entitlementsProvision is made in respect of the Company and Group liability for wages and salaries, annual leave, long service leave and retirement leave . Annual leave and other entitlements that are expected to be settled within 12 months of reporting date, are measured at nominal values on an actual entitlement basis at current rates of pay .

Long-term employee entitlementsEntitlements that are payable beyond 12 months, such as long service leave and retirement leave, have been calculated on an actuarial basis based on the present value of the estimated future cash outflows to be made by the Group in respect of services provided by employees up to reporting date .

(ab) Superannuation Schemes

Defined contribution schemesObligations for contributions to KiwiSaver are accounted for as defined contribution superannuation scheme and are recognised as an expense in the Statement of Comprehensive Income as incurred .

Australian schemesThe Company contributed to a number of defined contribution superannuation plans . Contributions to superannuation plans are based on percentages of employee gross salaries .

(ac) Restructuring Provision

The parent company has completed a formal restructuring programme and provisions for last year have been fully paid .

(ad) Lease make good provision

The company has an obligation to return lease premises to the same condition as at the commencement of the lease . The amount recognised is the best estimate of the consideration required to settle this obligation .

Critical Accounting Judgements and Estimates

In preparing these financial statements Quotable Value Limited and Group has made estimates and assumptions concerning the future . These estimates and assumptions may differ from the subsequent actual results . Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances . The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:

Property, plant and equipment useful lives and residual valueAt each balance date Quotable Value Limited and Group reviews the useful lives and residual values of its property, plant and equipment . Assessing the appropriateness of useful life and residual value estimates of property, plant and equipment requires Quotable Value Limited and Group to consider a number of factors such as the physical condition of the asset, expected period of use of the asset by Quotable Value Limited and Group, and expected disposal proceeds from the future sale of the asset .

An incorrect estimate of the useful life or residual value will impact the depreciation expense recognised in the Statement of Financial Performance, and carrying amount of the asset in the Statement of Financial Position .

Quotable Value Limited and Group minimises the risk of this estimation uncertainty by:

• physical inspection of assets;

• asset replacement programmes;

• review of second hand market prices for similar assets; and

• analysis of prior asset sales .

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Quotable Value Limited and Group has not made significant changes to past assumptions concerning useful lives and residual values . The carrying amounts of property, plant and equipment are disclosed in note 7 .

Retirement and long service leaveNote 19 provides an analysis of the exposure in relation to estimates and uncertainties surrounding retirement and long service leave liabilities .

Critical judgements in applying Quotable Value Limited and Group’s accounting policies

Management has exercised the following critical judgements in applying Quotable Value Limited and Group’s accounting policies for the period ended 30 June 2012:

Leases classificationDetermining whether a lease agreement is a finance or an operating lease requires judgement as to whether the agreement transfers substantially all the risks and rewards of ownership to Quotable Value Limited and Group . Judgement is required on various aspects that include, but are not limited to, the fair value of the leased asset, the economic life of the leased asset, whether or not to include renewal options in the lease term and determining an appropriate discount rate to calculate the present value of the minimum lease payments . Classification as a finance lease means the asset is recognised in the Statement of Financial Position as property, plant and equipment, whereas for an operating lease no such asset is recognised .

Goodwill impairmentA review of goodwill is undertaken annually to determine that the carrying amount shown in the Statement of Financial Position is a fair value based on the cash generating units of the company . Note 8 provides an analysis of the carrying amount of goodwill in the company .

2. Income and Expenses

Revenue and expenses from continuing operations includes:

(a) Revenue

Group Parent Company2012 2011 2012 2011

$NZ’000 $NZ’000 $NZ’000 $NZ’000

Revenue from rendering services 45,977 45,983 22,947 21,288

45,977 45,983 22,947 21,288

(b) Investment revenue

Group Parent Company2012 2011 2012 2011

$NZ’000 $NZ’000 $NZ’000 $NZ’000

Interest Income 20 9 96 9

Share of Joint Venture Income 1,571 554 - -

Dividend Income - 2 715 468

1,591 565 811 477

(c) Personnel expenses

Group Parent Company 2012 2011 2012 2011

Notes $NZ’000 $NZ’000 $NZ’000 $NZ’000

Personnel expensesPersonnel expenses 27,687 29,410 12,416 11,637

KiwiSaver contributions 1,104 623 804 336

Movement in LSL (52) (192) (10) (1)

Movement in holiday pay 71 (185) 76 (20)

Movement in other employee entitlements 536 931 664 528

29,346 30,587 13,950 12,480 Operating expensesCommunication expenses 849 1,019 439 490

Computer operating expenses 3,833 3,840 1,960 1,785

Travel expenses 662 810 320 416

Vehicle expenses 590 751 497 543

5,934 6,420 3,216 3,234 Marketing expensesPromotional expenses 244 368 168 197

244 368 168 197 Occupancy expensesOccupancy expenses 2,630 2,827 984 880

2,630 2,827 984 880 Administration expensesAdministration expenses 1,253 1,307 632 661

1,253 1,307 632 661 Depreciation and amortisation expenseAmortisation of intangible assets 771 665 463 502

Impairment of goodwill and loans 434 2,100 77 -

Depreciation 310 530 236 286

1,515 3,295 776 788 Finance costsInterest on bank overdrafts and term lending 38 16 19 16

38 16 19 16 Consulting expenseConsultancy 232 348 232 344

232 348 232 344 Other expenseAudit fee 2 (d) 207 162 107 95

Board expenses 299 307 274 287

Government superannuation plan contributions 41 38 41 38

Insurance 1,206 1,704 628 779

Other costs (24) 438 102 (20)

Other valuation costs 862 892 551 462

Research & development 66 31 66 31

2,657 3,572 1,769 1,672

31

(d) Auditors Remuneration


Notes $NZ’000 $NZ’000 $NZ’000 $NZ’000

Fees paid to auditors for:Audit fees of financial statements 182 153 107 95

Other auditors’ fees for audit of Real Estate Trust Accounts 25 9 - -

Total audit fees 2 (c) 207 162 107 95

3. Income Tax Expense

(a) The prima facie income tax expenses on pre-tax accounting profit from operations reconciles to the income tax expenses in the financial statements as follows:


$NZ’000 $NZ’000 $NZ’000 $NZ’000

Relationship between tax expense and accounting profitProfit from operations 3,719 (2,192) 2,012 1,493

Income tax expense at 28% NZ (30% Aust) 1,041 (658) 563 448

Plus/(less) tax effect of:Non taxable income (635) (82) (172) (82)

Non deductible expenditure - 746 - -

Group loss offset - - (403) -

406 6 (12) 366 Components of tax expenseCurrent tax expense 371 - 160 234

Deferred tax 73 (298) (183) 138

Adjustment to current taxation on prior years (38) 304 11 (6)

Tax expense 406 6 (12) 366

(b) Imputation credit account


$NZ’000 $NZ’000 $NZ’000 $NZ’000

Imputation credits available for use in subsequent periods 5,551 4,404 3,900 2,824

(c) Deferred taxation

The following table shows the deferred tax liability for the year:


$NZ’000 $NZ’000 $NZ’000 $NZ’000

Balance as at 1 July (1,641) (1,343) (848) (986)

Movements during the year:

Temporary differences 73 (298) (183) 138

Balance as at 30 June (1,568) (1,641) (1,031) (848)

The following tables shows a breakdown of the deferred tax liability for the year . Table (i) is for the Group and table (ii) is for the Company .

(c)(i) Deferred tax assets/(liabilities) for the Group2011

Balance2012

income2012

equity2012

Balance $NZ’000 $NZ’000 $NZ’000 $NZ’000

Gross deferred tax liabilities:Property, plant and equipment (58) 45 - (13)

Other - - - -

(58) 45 - (13)Gross deferred tax assetEmployee entitlements 485 256 - 741

Doubtful debt and impairment losses 39 18 - 57

Tax loss c/f 479 (349) - 130

Provisions 696 (43) - 653

1,699 (118) - 1,581 Total 1,641 (73) - 1,568

(c)(ii) Deferred tax assets/(liabilities) for the Parent Company2011

Balance2012

income2012

equity2012

Balance $NZ’000 $NZ’000 $NZ’000 $NZ’000

Gross deferred tax liabilities:Property, plant and equipment (66) 64 - (2)

Other - - - -

(66) 64 - (2)Gross deferred tax assetEmployee entitlements 210 161 - 371

Doubtful debt and impairment losses 8 1 - 9

Provisions 696 (43) - 653

914 119 - 1,033 Total 848 183 - 1,031

33

4. Share Capital


$NZ’000 $NZ’000 $NZ’000 $NZ’000

Balance at 1 July 4,600 4,600 4,600 4,600

Balance at 30 June 4,600 4,600 4,600 4,600

At 30 June 2012 the Company has authorised and issued 4,600,000 shares fully paid (2011: 4,600,000) . The shares have no par value . All shares carry equal voting rights and the right to share in any surplus on winding up of the company . None of the shares carry fixed dividend rights . There is no right of redemption attached to these shares .

5. Cash and Cash Equivalents


$NZ’000 $NZ’000 $NZ’000 $NZ’000

Cash at bank 5,105 2,430 4,544 1,704

Petty Cash 7 7 3 3

5,112 2,437 4,547 1,707

The carrying value of the short-term deposits with maturity dates of three months or less approximates their fair value .

6. Trade and Other Receivables


$NZ’000 $NZ’000 $NZ’000 $NZ’000

Trade Receivables 5,586 5,978 2,689 2,648

Allowance for doubtful debts (252) (174) (34) (30)

5,334 5,804 2,655 2,618 Related party receivables - trade - 1 - 1

Other receivables 519 477 248 302

Work in progress 1,633 1,699 451 376

7,486 7,981 3,354 3,297

The average credit period on sales of services is 30 days . No interest is charged on the trade receivables . An allowance has been made for doubtful debts based on calculations made by management taking into account historical trends .

As at 30 June 2012 all overdue receivables have been assessed for impairment and appropriate provisions applied . Schedule (a) is the aged debtors schedule for the Group and schedule (b) is the aged debtors schedule for the Parent Company .

Aged debtors schedule for the Group2012 2011

Gross Impairment Net Gross Impairment Net$NZ’000 $NZ’000 $NZ’000 $NZ’000 $NZ’000 $NZ’000

Not past due 3,981 - 3,981 4,523 - 4,523

Past due 1-30 days 1,046 - 1,046 754 - 754

Past due 31-60 days 257 - 257 134 - 134

Past due 61-90 days 302 (252) 50 567 (174) 393

Total trade receivables for the Group 5,586 (252) 5,334 5,978 (174) 5,804

Aged debtors schedule for the Parent Company2012 2011

Gross Impairment Net Gross Impairment Net$NZ’000 $NZ’000 $NZ’000 $NZ’000 $NZ’000 $NZ’000

Not past due 2,310 - 2,310 2,211 - 2,211

Past due 1-30 days 274 - 274 208 - 208

Past due 31-60 days 52 - 52 38 - 38

Past due 61-90 days 53 (34) 19 191 (30) 161

Total trade receivables for the Parent Company 2,689 (34) 2,655 2,648 (30) 2,618

Movement in provision for doubtful debtsGroup Parent Company

2012 2011 2012 2011$NZ’000 $NZ’000 $NZ’000 $NZ’000

Balance at 1 July 174 158 30 26

Additional provisions made during the year 135 78 6 7

Receivables written off during the period (57) (62) (2) (3)

Balance at 30 June 252 174 34 30

7. Property, Plant and Equipment

The fair value of the property, plant and equipment is approximately equal to their carrying amount . In the year ended 30 June 2012 for the Company and Group there were no:

• items of property, plant or equipment which were not in current use .

• impairment losses recognised or reversed in the current period .

• borrowing costs capitalised .

• restriction in title relating to property, plant and equipment or items pledged as security for liabilities .

35

The following schedule shows the movements of property, plant and equipment for the year ended 30 June 2012 . Table (a) shows the movements for the Group and table (b) shows the movements for the Company .

(a) Movements in property, plant and equipment for the Group

Leasehold Improments

Motor Vehicles

Office Equipment

Furniture & Fittings WIP

General Hardware

Core Application

Hardware Total$NZ’000 $NZ’000 $NZ’000 $NZ’000 $NZ’000 $NZ’000 $NZ’000 $NZ’000

Gross carrying amountBalance as at 1 July 2010 1,153 368 189 644 - 617 93 3,064

Additions 102 34 36 4 - 134 4 314

Disposals (149) (37) (19) (29) - (126) - (360)

Balance as at 1 July 2011 1,106 365 206 619 - 625 97 3,018 Additions (43) - 2 15 27 19 1 21

Disposals (55) (15) (61) (97) - (122) (10) (360)

Balance as at 30 June 2012 1,008 350 147 537 27 522 88 2,679

Accumulated depreciation and impairment lossesBalance as at 1 July 2010 (506) (74) (148) (287) - (526) (92) (1,633)

Disposals (26) 29 (2) (8) - 131 (5) 119

Depreciation expense (206) (58) (18) (68) - (180) - (530)

Balance as at 1 July 2011 (738) (103) (168) (363) - (575) (97) (2,044)Disposals 43 3 55 58 - 122 10 291

Depreciation expense (135) (59) (20) (70) - (25) (1) (310)

Balance as at 30 June 2012 (830) (159) (133) (375) - (478) (88) (2,063)Net book valueAs at 30 June 2011 368 262 38 256 - 50 - 974

As at 30 June 2012 178 191 14 162 27 44 - 616

(b) Movements in property, plant and equipment for the Company

Leasehold Improments

Motor Vehicles

Office Equipment

Furniture & Fittings WIP

General Hardware

Core Application

Hardware Total$NZ’000 $NZ’000 $NZ’000 $NZ’000 $NZ’000 $NZ’000 $NZ’000 $NZ’000

Gross carrying amountBalance as at 1 July 2010 920 368 116 353 - 358 92 2,207

Additions - 2 19 4 - 1 - 26

Disposals (81) (37) (16) (17) - (29) - (180)

Balance as at 1 July 2011 839 333 119 340 - 330 92 2,053 Additions (44) - 2 12 27 19 - 16

Disposals (3) (15) (19) (30) - (35) (10) (112)

Balance as at 30 June 2012 792 318 102 322 27 314 82 1,957

Accumulated depreciation and impairment lossesBalance as at 1 July 2010 (455) (71) (101) (212) - (324) (92) (1,255)

Disposals 8 29 16 13 - 29 - 95


Balance as at 1 July 2011 (619) (93) (96) (237) - (309) (92) (1,446)Disposals 2 3 14 30 - 35 10 94


Balance as at 30 June 2012 (739) (138) (96) (241) - (292) (82) (1,588)Net book valueAs at 30 June 2011 220 240 23 103 - 21 - 607

As at 30 June 2012 53 180 6 81 27 22 - 369

8. Goodwill


$NZ’000 $NZ’000 $NZ’000 $NZ’000

Gross carrying amountBalance as at 1 July 10,192 10,161 3,239 3,239

Effects of foreign currency exchange differences (13) 31 - -

Plus goodwill on acquisition in New Zealand 19 - - -

Less goodwill on disposal in New Zealand - - - -

Balance as at 30 June 10,198 10,192 3,239 3,239

Accumulated impairment lossesBalance as at 1 July (7,025) (4,925) (3,080) (3,080)

Impairment loss for year (434) (2,100) - -

Balance as at 30 June (7,459) (7,025) (3,080) (3,080)

Net book value as at 1 July 3,167 5,236 159 159

Net book value as at 30 June 2,739 3,167 159 159

Impairment testing for cash generating units containing goodwill:For the purpose of impairment testing, goodwill is allocated to the Group’s cash generating units which represent the lowest level within the Group at which the goodwill is monitored for internal management purposes . Due to the nature and size of the company the cash generating unit is assumed to be the company in total .

The fair value of each cash generating unit was determined based on a DCF multiple, this was then compared to the carrying amount of each cash-generating unit . It was determined that $0 .434 million (2011: $2 .1 million) impairment losses for the reporting period should be recognised .

Fair value was based on the following key assumptions:

• Cash flows were projected based on a three year business plan as approved by the Board of Directors .

• The weighted average cost of capital was determined with reference to comparable entities with similar gearing positions .

9. Intangible Assets

The fair value of the intangible assets is approximately equal to their carrying amount . In the year ended 30 June 2012 for the Company and Group there were no:

• items of intangible assets which were not in current use .

• impairment losses recognised or reversed in the current period .

• borrowing costs capitalised .

• restriction in title relating to intangible assets or items pledged as security for liabilities .

The following schedule shows the movements of intangible assets for the year ended 30 June 2012 . Table (a) shows the movements for the Group and table (b) shows the movements for the Company .

37

(a) Movements in intangible assets for the Group

Computer Software QIVS II QIVS II WIP Total $NZ’000 $NZ’000 $NZ’000 $NZ’000

Gross carrying amountBalance as at 1 July 2010 3,055 5,718 133 8,906

Additions 425 3 (133) 295

Disposals - - - -

Balance as at 1 July 2011 3,480 5,721 - 9,201 Additions 260 198 144 602

Disposals (249) (6) - (255)

Balance as at 30 June 2012 3,491 5,913 144 9,548

Accumulated amortisation and impairment lossesBalance as at 1 July 2010 (2,451) (4,514) - (6,965)

Disposals (157) - - (157)

Amortisation (278) (387) - (665)

Balance as at 1 July 2011 (2,886) (4,901) - (7,787)Disposals 301 - - 301

Amortisation (384) (387) - (771)

Balance as at 30 June 2012 (2,969) (5,288) - (8,257)

Net book valueAs at 30 June 2011 594 820 - 1,414

As at 30 June 2012 522 625 144 1,291

(b) Movements in intangible assets for the Parent Company

Computer Software QIVS II QIVS II WIP Total $NZ’000 $NZ’000 $NZ’000 $NZ’000

Gross carrying amountBalance as at 1 July 2010 2,300 5,718 - 8,018

Additions 91 3 - 94

Disposals - - - -

Balance as at 1 July 2011 2,391 5,721 - 8,112 Additions 193 198 144 535

Disposals (189) (6) - (195)

Balance as at 30 June 2012 2,395 5,913 144 8,452

Accumulated amortisation and impairment lossesBalance as at 1 July 2010 (2,177) (4,512) - (6,689)

Disposals 19 - - 19

Amortisation (115) (387) - (502)

Balance as at 1 July 2011 (2,273) (4,899) - (7,172)Disposals 188 7 - 195

Amortisation (118) (345) - (463)

Balance as at 30 June 2012 (2,203) (5,237) - (7,440)

Net book valueAs at 30 June 2011 118 822 - 940

As at 30 June 2012 192 676 144 1,012

The Company has reviewed the value of the QIVS II database in accordance with the impairment test and as the database supports operational business processes, its value is estimated to be greater than the book value . The Company believes that the database holds its value on a going concern basis as revenue generating capacity continues .

10. Subsidiary and Joint Venture Companies

Quotable Value Limited has 4 subsidiary companies and 1 joint venture company (2011: 4 subsidiaries, 1 joint venture company)

Percentage of Holding Balance

DateName of Company 2012 2011 Principal Activities

SubsidiariesDarroch Limited 100 100 Property Valuation and Administration 30 June

New Zealand Valuation Limited 100 100 Name protection and investment company holding a 45% shareholding in PropertyInsight Limited and a 45% share of Property Insight Joint Venture

30 June

Egan Australasia Pty Limited 100 100 Property Valuation 30 June

(unaudited and incorporated)

Quotable Value Australia Pty Limited 100 100 Property Valuation 30 June

(unaudited and incorporated)

Joint venture companyPropertyIQ NZ Limited 50 50 Sale of Online Data Information 30 June

Country of Incorporation• PropertyIQ NZ Limited, Darroch Limited, and New Zealand Valuation Limited were all incorporated in New

Zealand .

• Egan Australasia Pty Limited was incorporated in Victoria, Australia .

• Quotable Value Australia Pty Limited was incorporated in New South Wales, Australia .

11. Investment In Subsidiary Companies


$NZ’000 $NZ’000 $NZ’000 $NZ’000

Investment - at cost - - 8,775 7,072

Plus: Investment in existing subsidiary - - - -

Purchase of new investment - share capital - - - 2,847

Working Capital Advance of investment - - - -

Purchase (repayment) of investment - - (1,124) (1,144)

Translation differences - - - -

- - 7,651 8,775

There were no further investments into subsidiary companies or further business purchases during the financial year under review .

39

12. Investment in Joint Venture Company


$NZ’000 $NZ’000 $NZ’000 $NZ’000

Balance at beginning of year 12,127 12,040 10,946 10,946

Plus: Investment in related party company - - - -

Change in accounting policy - - - -

Dividends (714) (467) - -

Share of profits in jointly controlled entities 2,059 554 - -

13,472 12,127 10,946 10,946

Quotable Value Limited has a 50% share holding in PropertyIQ NZ Limited . Quotable Value Limited purchased 50% of the company shares for $10,945,840 on 2 April 2008 .

The balance date of PropertyIQ NZ Limited is 30 June .

Quotable Value Limited has accounted for the investment in PropertyIQ NZ Limited using the equity method .

13. Related Party Information

Quotable Value Limited and Group are State-Owned Enterprise entities in terms of the State-Owned Enterprises Act 1986 . The New Zealand Government influences the roles of Quotable Value Limited and Group .

In conducting its activities, Quotable Value Limited and Group is required to pay various taxes and levies (such as GST, PAYE, FBT and ACC levies) to the Crown and entities related to the Crown . The payment of these taxes and levies is based on the standard terms and conditions that apply to all tax and levy payers .

Quotable Value Limited and Group also purchases goods and services from entities controlled, significantly influenced, or jointly controlled by the Crown . These purchases are detailed below:

2012 2011$NZ’000 $NZ’000

PurchasesGenesis 37,527 85,862

NZ Post 155,652 177,468

Meridian 3,680 11,659

Powershop 48,086 3,911

Air NZ 212,161 298,909

Quotable Value Limited and Group also provides goods and services to entities controlled, significantly influenced, or jointly controlled by the Crown . These services include provision of property valuations, supply of data and information as an arm’s length transaction .

Transactions between related subsidiaries include loans and advances to and from subsidiaries . These transactions were interest free and on demand .


$NZ’000 $NZ’000 $NZ’000 $NZ’000

Investment in related partyEgan Australasia Pty Limited - - - 220

Darroch Limited - - - 1,000

- - - 1,220 Loans from related partyDarroch Limited - - 154 -

New Zealand Valuation Limited - - 41 -

- - 195 -

Loans from Quotable Value Limited to Darroch Limited incur a daily interest charge of Quotable Value Limited’s total cost of borrowing plus 2% . Investment in Quotable Value is interest free . Both investments and loans are on demand .

Loans between other related party companies are interest free and on demand .

Other trading related transactions are:

• Trade creditors of $12,141 (2011: $7,655) are owing to Quotable Value Limited, the parent company of New Zealand Valuation Limited from PropertyInsight Joint Venture for licence fees in relation to data provided to the joint venture . This amount is due to be paid within 60 days .

• Trade creditors of $12,141 (2011: $7,655) are owing to Geological Surveys (New Zealand) Limited, a joint venture partner, from PropertyInsight Joint Venture for licence fees in relation to data provided to the joint venture . This amount is due to be paid within 60 days .

• Trade creditors of $2,698 (2011: $1,700) are owing to Niu Pacific Limited, a joint venture partner, from PropertyInsight Joint Venture for service fees in relation to data information sales . This amount is due to be paid within 60 days .

• Management fees of $AUD60,000 were paid by Quotable Value Australia Pty Limited .

• Payment of licence fees to New Zealand Valuation Limited of $16,174 (2011: $24,881) in relation to licence fees of the joint venture .

• Payment of licence fees to Geological Surveys (New Zealand) Limited of $16,174 (2011: $24,881) in relation to licence fees of the joint venture .

• Payment of service fees to Niu Pacific Limited of $3,595 (2011: $5,528) in relation to licence fees of the joint venture .

• Trade debtors of $10,518 (2011: $12,340) are outstanding from PropertyIQ NZ Limited, a company which is owned 50% by Quotable Value Limited, the parent company of New Zealand Valuation Limited for data information sales . These debtors are paid on normal trading terms .

• $108,917 (2011: $71,075) of revenue has been invoiced through PropertyIQ NZ Limited, a company owned 50% by Quotable Value Limited, the parent company of New Zealand Valuation Limited . PropertyInsight Joint Venture then invoices PropertyIQ NZ Limited for the same amount .

• Short-term advances to PropertyIQ NZ Limited joint venture partners bear interest at 2% above the 90 day bill rate . As at June 2012 these loans were paid in full (2011: $Nil) .

• During the year PropertyIQ NZ Limited purchased services from the joint venture partners to the value of $655,000 (2011: $946,000) and as at June 2012 owed the joint venture partners $158,000 (2011: $86,000) . Transactions with related parties are priced on an arm’s length basis .

• Trade debtors of $20,798 (2011: $14,431) are outstanding from Quotable Value Limited, the parent company, to Darroch Limited for expenses paid on behalf . These debtors are paid on normal trading terms .

• Trade creditors of $72,283 (2011: $39,445) are owing to Quotable Value Limited, the parent company of Darroch Limited, for valuations undertaken on behalf of Darroch Limited and external contractor payments made by Quotable Value Limited . This amount is due to be paid within 60 days .

• The joint venture partners of PropertyIQ NZ Limited have royalty agreements .The amounts paid to Quotable Value Limited during the year amounted to $109,000 (2011: $18,000) .

• Share of profit/dividend from PropertyIQ NZ Limited amounts to $1,550,000 (2011: $554,000) .

• Share of profit/dividend from New Zealand Valuation Limited amounts to $21,152 (2011: $31,801) .

41

• $1,239,966 (2011: $2,295,095) of expenses has been invoiced to Darroch Limited, the subsidiary company of Quotable Value Limited, for IT and management services . These transactions are on normal trade terms .

• $1,150 (2011: $14,644) of expenses has been invoiced to Darroch Limited from Property IQ Limited, a 50% joint venture company owned by Quotable Value Limited, the parent company of Darroch Limited, for data and information services . These transactions are on normal trade terms .

• $3,579 (2011: $503) of expenses has been invoiced to Darroch Limited from Egan Australasia Pty Limited, a 100% owned company of Quotable Value Limited, the parent company of Darroch Limited, for data and information services . These transactions are on normal trade terms .

• NZ Valuation Limited, the subsidiary company, has advanced $41,628 (2011: $31,128) . This advance is interest free and on demand .

• PropertyInsight Joint Venture owes NZ Valuation Limited $43,267 (2011: $44,677) . This amount owing is interest free and on demand .

• $1,439,267 of tax losses were transferred to Quotable Value Limited from Darroch Limited, the 100% owned subsidiary company .

• Valuation work undertaken for parties related to directors and employees at an arm’s length are:

Livestock Improvement $0 (2011: $6,900)

2 Degrees $47,959 (2011: $Nil)

Port Nelson $8,924 (2011: $23,000)

Quotable Value Limited (Darroch Limited) $169,653 (2011: $140,276)

Egan Australasia Limited (Darroch Limited) $0 (2011: $22,601)

Third Bearing Limited $39,569 (2011: $Nil)

PropertyInsight $13,441 (2011: $Nil)

All other transactions between entities and Directors within the Group were on an arm’s length basis both at normal market prices and on normal commercial terms . There are no guarantees to or from any related parties .

At balance date, the Group has not made any allowance for impairment losses relating to amounts owed by related parties as the payment history has been excellent (2011: nil) . An impairment assessment is undertaken each year by examining the financial position of the related party and the market in which the related party operates to determine whether there is objective evidence that a related party receivable is impaired . When such objective evidence exits, the Group recognises an allowance for the impairment loss .

Key management personnel include all board members, the Chief Executive and the 6 (2011: 4) members of the management team . Compensation paid to these members is as follows:

2012 2011 $NZ’000 $NZ’000

Salaries and short-term benefits 1,815 1,585

Post-employment benefits - -

Other long-term benefits - -

Termination benefits - -

Total key management personnel compensation 1,815 1,585

14. Dividend Provision


$NZ’000 $NZ’000 $NZ’000 $NZ’000

Balance as at 1 July - - - -

Additional provision recognised - - - -

Provision for special dividend - - - -

Reductions arising from payments - - - -

Balance as at 30 June - - - -

No dividends were provided for or paid in this financial year .

15. Borrowings


$NZ’000 $NZ’000 $NZ’000 $NZ’000

Non-current

Westpac Money Market - 500 - 500

- 500 - 500

The bank overdraft is made available only subject to the terms of an unsecured negative pledge . The facility available totals $1,000,000 (2011: $1,000,000) .

The interest rate is determined at the time of borrowing . The year end rate was 4 .05% per annum (2011: 3 .65% per annum) . The average interest rate for the year was 4 .02% per annum (2011: 3 .93% per annum) .

Borrowings consists of the bank term loan made available only subject to the terms of an unsecured negative pledge . The facility currently available totals $4,500,000 (2011: $4,500,000) . There are no fixed repayment terms .

Of the available facility $Nil (2011: $500,000) has been used at balance date it is classed as a non-current borrowings .

A commitment fee of 0 .05% per month is paid on the total facility of $5,500,000 (2011: $5,500,000) .

At balance date there is a business mastercard facility of $71,500 (2011: $71,500), of which $5,480 (2011: $10,514) is drawn down .

As confirmed with Westpac Banking Group, no banking covenants have been breached .

The fair value of the Westpac Money Market is approximately equal to their carrying amount .

16. Financial Instruments

Interest rate risk managementThe Parent Company and Group are exposed to interest rate risk as the entities borrow funds at both fixed and floating interest rates . The risk is managed by the Group by maintaining an appropriate mix between fixed and floating rate borrowings .

Sensitivity analysisAs at 30 June 2012, if the 90 day bank bill rate had been 50 basis points higher or lower, with all other variables held constant, the profit (loss) for the year could have been adjusted $2,250 (2011: $2,000) .

43

Currency riskCurrency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in foreign exchange rates . The Company and the Group operates in Australia, which requires the entities to enter into transactions denominated in Australian dollars . The Company and the Group holds small balances of Australian dollars at call with international banks . As a result of these activities, exposure to currency risk arises .

Sensitivity analysisAs at 30 June 2012, if the New Zealand dollar had weakened / strengthened by 5% against the Australian dollar with all other variables held constant, the profit (loss) for the year would have remained constant as profits remain in the country of origin (2011: $nil) .

Credit riskCredit risk is the risk that a counterparty will default on its contractual obligation to the Company and the Group, resulting in financial loss to the Company and the Group . The Company and the Group has adopted a policy of only dealing with creditworthy counterparties .

QVL’s maximum credit exposure for each class of financial instrument is represented by the total carrying amount of cash and cash equivalents (note 5), and net trade and other receivables (note 6) .

This risk has been reduced with the Westpac Bank entering the Crown Retail Deposit Guarantee Scheme, which guarantees deposits up to $1 million per depositor . While this does not cover full deposits it does partially reduce the risk exposure .

Trade receivables consist of a large number of customers, spread across diverse geographical areas . Ongoing credit evaluation is performed on the financial condition of trade receivables . The Company and the Group has no significant concentration of credit risk, as its credit customers are relatively small .

QVL only invests funds with registered banks with specified Standard and Poor’s credit ratings of AA and above .

Liquidity riskLiquidity risk is the risk that the Company and the Group will encounter difficulty to meet their short-term commitments as they fall due . The Company and Group manages liquidity risk by maintaining sufficient cash by preparing monthly cash flow reports and budgets . The debtors collection process and cash position is monitored daily .

The carrying amount of financial assets and liabilities are as follows:


$NZ’000 $NZ’000 $NZ’000 $NZ’000

Loans and receivables

Cash and cash equivalents 5,112 2,437 4,547 1,707

Debtors and other receivables 7,486 7,981 3,354 3,297

Investments - - - -

Total loans and receivables 12,598 10,418 7,901 5,004

Financial Liabilities at amortised cost

Creditors and other payables 2,186 2,301 1,124 1,011

Borrowings - secured loans - 500 - 500

2,186 2,801 1,124 1,511

17. Trade and Other Payables


$NZ’000 $NZ’000 $NZ’000 $NZ’000

Trade payables 712 267 340 65

Other payables 866 1,315 522 641

Goods and services tax (GST) payable 608 719 262 305

2,186 2,301 1,124 1,011

The average credit period on invoices is 30 days . The Group have financial risk management policies in place to ensure that all payables are paid within the credit timeframe .

18. Employment Entitlements


$NZ’000 $NZ’000 $NZ’000 $NZ’000

Employment entitlements consists of:

Holiday pay 1,503 1,432 722 646

Accrued salaries and wages 2,772 2,236 1,626 962

Other employee entitlements 374 426 93 103

4,649 4,094 2,441 1,711 Payable in the following period:

Current employment entitlementsWithin one year 4,275 3,668 2,348 1,608

Non-current employment entitlementsAfter one year 374 426 93 103

4,649 4,094 2,441 1,711

The present value of retirement and long service leave obligations depend on a number of factors that are determined on actuarial basis . Two key assumptions used in calculating this liability include the discount rate and the salary inflation factor . Any changes in these assumptions will affect the carrying amount of the liability .

Expected future payments are discounted using forward discount rates prescribed by Treasury and calculated as at 31 January 2012 . The discount rates have maturities that match, as closely as possible, the estimated future cash outflows . The salary inflation factor has been determined after considering historical salary inflation patterns and after obtaining advice from an independent actuary . A salary inflation factor of 2 .5% was used .

19. Provisions

Movements in provisions for the GroupInsurance

ExcessMake Good Restructuring Total

$NZ’000 $NZ’000 $NZ’000 $NZ’000

Gross carrying amountBalance as at 1 July 2010 2,818 212 - 3,030

Provisions made 725 - - 725

Provisions reversed - (29) - (29)

Amounts used (800) - - (800)

Balance as at 1 July 2011 2,743 183 - 2,926 Provisions made - - - -


Amounts used (475) - - (475)

Balance as at 30 June 2012 2,268 137 - 2,405

45

Movements in provisions for the ParentInsurance

ExcessMake Good Restructuring Total

$NZ’000 $NZ’000 $NZ’000 $NZ’000

Gross carrying amountBalance as at 1 July 2010 2,818 92 - 2,910

Provisions made 401 - - 401


Amounts used (800) - - (800)

Balance as at 1 July 2011 2,419 70 - 2,489 Provisions made - - - -


Amounts used (157) - - (157)

Balance as at 30 June 2012 2,262 24 - 2,286

Current provisions are represented by:Group Parent Company

2012 2011 2012 2011$NZ’000 $NZ’000 $NZ’000 $NZ’000

Restructuring - - - -

Insurance excess 2,268 2,743 2,262 2,419

Lease make good 137 183 24 70

2,405 2,926 2,286 2,489 Payable in the following period:

Current provisionsWithin one year 1,316 767 1,286 419

Non-current provisionsAfter one year 1,089 2,159 1,000 2,070

2,405 2,926 2,286 2,489

In many cases, QVL has the option to renew leases, which impacts on the timing of expected cash outflows to make good the premises . Assuming this is not exercised the cash flows associated with this occur between 2012 and 2014 .

The Company is subject to professional indemnity claims in the course of its business . The level of claims has increased in the industry in the current economic environment and accordingly the Company has provided for these . Determination of the provision is subjective, with the settlement of claims being dependent on a number of factors including whether or not the claimant suffered loss .

20. Retained Earnings and Dividends


$NZ’000 $NZ’000 $NZ’000 $NZ’000

Balance as at 1 July 15,196 17,394 17,165 16,038

Profit for the year and attributable to the equity holders 3,313 (2,198) 2,024 1,127

Dividends provided for or paid (note 14) - - - -

Balance as at 30 June 18,509 15,196 19,189 17,165

21. Reserves


$NZ’000 $NZ’000 $NZ’000 $NZ’000

Components of other comprehensive incomeForeign currency translation reserveBalance as at 1 July 255 147 - -

Arising on translation of independent foreign operations 239 108 - -

Balance as at 30 June 494 255 - -

Exchange differences relating to the translation of Australian dollars, being the financial currency of the consolidated Group’s foreign controlled entities in Australia, into New Zealand dollars are brought to account by entries made directly to the foreign currency translation reserve .

22. Reconciliation of Profit for the Period to Net Cash Flows from Operating Activities


$NZ’000 $NZ’000 $NZ’000 $NZ’000

Profit for the period 3,313 (2,198) 2,024 1,127

Depreciation 310 488 230 286

Amortisation of intangible assets 771 665 463 502

Amortisation of goodwill/loans 434 2,100 77 -

Movement in provision for doubtful debts (78) 1 (4) (4)

Loss (gain) on sale of property, plant and equipment 51 55 6 11

Exchange movement on related party loans - - - -

Dividends Received - - (715) (468)

Changes in net assets and liabilities:Decrease (increase) in receivables 573 706 (53) 329

Increase (decrease) in payables (4) (1,303) 156 (721)

Increase (decrease) in provisions (521) (421) (203) (421)

Increase (decrease) in employee entitlements 555 732 730 408

Increase in GST Payable (111) 185 (43) 80

Increase (decrease) in tax payable (355) (993) (557) 11

Net cash from operating activities 4,938 17 2,111 1,140

47

23. Contingent Liabilities

BondsThe Group has performance bonds for contracts undertaken in Australia together with rental bonds on properties occupied . The table below details the values associated with the Group for these bonds:

2012 2011 $NZ’000 $NZ’000

Contract performance bonds 393 406

Rental bonds 513 397

Total bond value 906 803

Un-quantified claimsThere are unquantifiable contingent claims not exceeding $5 .2 million as at 30 June 2012 (2011: $5 .2 million) .

The Company is subject to professional indemnity claims in the course of its business . The level of claims has increased in the industry in the current economic environment and accordingly the Company has provided for these . In addition, insurance cover for these claims is less certain . Determination of the potential liability is subjective, with the settlement of claims being dependent on a number of factors including whether or not the claimant actually suffered loss . Management has used its judgement in determining the expected cash outflows but considered that to provide further information would be prejudicial to the Company .

Quantified claimsThere are no quantified claims as at 30 June 2012 (2011: $Nil) .

24. Contingent Assets

There are no contigent assets as at 30 June 2012 (2011: $Nil)

25. Budget Variance

Statement of Comprehensive IncomeVariance to budget reflects the impact of strong management controls of costs and better return from investment in personnel .

Statement of Financial PositionVariance to budget arose from over budget operating performance including the impact of reduced capital expenditure and maintenance of a conservative gearing position .

Statement of Cash FlowsDuring the year the Group maintained a conservative gearing position and did not make any acquisitions or pay dividends . Operating cash flows reflect the above budget operating performance .

26. Commitments Statement

Group - 2012 Tenancy Vehicles IT Total $NZ’000 $NZ’000 $NZ’000 $NZ’000

Operating lease as lesseeNon-cancellable operating lease commitments, payable:

Not later than one year 1,291 - - 1,291

Later than one year and not later than five years 1,422 - - 1,422

Later than five years - - - -

Total commitments 2,713 - - 2,713

Operating lease as lessorNon-cancellable operating lease commitments, payable:

Not later than one year 46

Later than one year and not later than five years 50

Later than five years -

Total commitments 96

Commitments for expenditureCommitments for the acquisition of property, plant and equipment 149

Group - 2011Tenancy Vehicles IT Total $NZ’000 $NZ’000 $NZ’000 $NZ’000


Not later than one year 1,651 17 50 1,718

Later than one year and not later than five years 1,643 1 - 1,644

Later than five years 6 - - 6

Total commitments 3,300 18 50 3,368


Not later than one year 25

Later than one year and not later than five years -


Total commitments 25

Parent - 2012Tenancy Vehicles IT Total $NZ’000 $NZ’000 $NZ’000 $NZ’000


Not later than one year 572 - - 572

Later than one year and not later than five years 720 - - 720

Later than five years - - - -

Total commitments 1,292 - - 1,292


Not later than one year -



Total commitments -

Commitments for expenditureCommitments for the acquisition of property, plant and equipment 149

49

Parent - 2011Tenancy Vehicles IT Total $NZ’000 $NZ’000 $NZ’000 $NZ’000


Not later than one year 532 7 50 589

Later than one year and not later than five years 808 - - 808

Later than five years 29 - - 29

Total commitments 1,369 7 50 1,426


Not later than one year -



Total commitments -

Quotable Value Limited and Group has lease commitments primarily in relation to office rents, with smaller amounts outstanding for vehicle leases and office equipment leases .

Most properties have the option of extending leases although these are reviewed at the time of renewal for necessity and continuation .

There are no restrictions placed on Quotable Value Limited and Group by its leasing arrangements .

27. Capital Management

Quotable Value (QV) capital is equity, which comprises accumulated funds and other reserves . Equity is represented by net assets .

QV is subject to the financial management and accountability of the State-Owned Enterprises Act 1986 .

QV manages its equity as a by-product of prudently managing revenues, expenses, assets, liabilities, investments and general financial dealings to ensure QV achieves its objectives and purpose whilst remaining a going concern .

28. Subsequent Events

The Group financial statements incorporate the financial statements of Egan Australasia Pty Limited, a fully owned subsidiary of Quotable Value Limited .

The Board approved the sale of Egan Australasia Pty Limited on 16 July 2012 . The divestment occurred in the 2012/13 financial year and any impact of the sale will be reflected in the financial statements for the year ending 30 June 2013 .

The PropertyInsight Joint Venture Board resolved to wind up the joint venture on 24 July 2012 .

Statement of Key Performance IndicatorsFor the year ended 30 June 2012

Financial Performance Indicators

The Board agreed the following financial targets with the Minister at the beginning of the year:

Specified Financial Performance SCI TargetGroup

Achievement

Surplus after tax, impairment and amortisation before dividends ($000) $2,021 $3,313

Interest Cover (EBIT/Interest) 3 .00 98

Interest Cover (EBITDA/Interest) 7 .46 138

Shareholder Return 9 .53% 17 .7%

Dividend Yield 4 .65% 0 .00%

Dividend Payout -58 .08% 0 .00%

Operating Margin 7 .41% 10 .19%

Current ratio 192 .38% 189 .34%

Term debt/Term debt + equity ratio (maximum 30%) 19 .11% 0 .00%

Return on equity 9 .31% 15 .2%

Return on equity adjusted for IFRS fair value movements and asset revaluations 9 .31% 15 .2%

Return on capital employed (EBIT/Ave Debt + Equity) 12 .14% 14 .0%

The Group operating results have been adversly impacted due to an extra ordinary item being provided for .

Non Financial Performance Indicators

The Board agreed the following non financial targets with the Minister at the beginning of the year:

Specified Non Financial Performance SCI TargetGroup

Achievement

QV Customer Net Promoter Score is improved year on year Improve Decrease

Employee Engagement Scores (EES) are improved year on year Improve Improve

Other non performance indicators for Corporate Social Responsibility are:

Target Savings

Achieved Savings

Power consumption Reduce Reduce

Fuel consumption Reduce Reduce

51

Statutory InformationFor the year ended 30 June 2012

1. Directors’ Remuneration

Directors of the Group during the year and remuneration and other benefits paid to the Directors by the companies were $195,000 (Parent) (2011: $181,000), Subsidiaries NZ$50,000 (2011: NZ$36,000) and JV’s NZ$11,000 (2011: NZ$15,000) .

Director Period Board 2012 2011 $NZ’000 $NZ’000

William Osborne (CEO) Full year Quotable Value Australia Pty Ltd NZ$0 NZ$0

Full year Egan Australasia Pty Limited

Full year PropertyInsight Joint Venture

Full year New Zealand Valuation Limited

Full year Darroch Limited

Full year PropertyIQ NZ Limited

George Reedy Quotable Value Limited NZ$0 NZ$19

(Appointed November 2002) Egan Australasia Pty Limited NZ$0 NZ$2

(Resigned April 2011) Quotable Value Australia Pty Ltd NZ$0 NZ$2

Derek Walker (Deputy Chair) Part year Quotable Value Limited NZ$24 NZ$29

(Appointed January 2005) Part year Egan Australasia Pty Limited NZ$4 NZ$5

(Resigned April 2012) Part year Quotable Value Australia Pty Ltd NZ$4 NZ$5

Bryan Hemi Part year Quotable Value Limited NZ$21 NZ$23

(Appointed November 2006) Part year PropertyIQ NZ Limited NZ$13 NZ$15

(Resigned June 2012)

Sir Barry Curtis Quotable Value Limited NZ$0 NZ$19

(Appointed July 2008)

(Resigned April 2011)

Phil Lough (Chair) Full year Quotable Value Limited NZ$46 NZ$46

(Appointed May 2009) Full year Egan Australasia Pty Limited NZ$5 NZ$1

Full year New Zealand Valuation Limited

Full year Quotable Value Australia Pty Ltd NZ$5 NZ$1

Full year Darroch Limited NZ$10 NZ$10

Gary Traveller Full year Quotable Value Limited NZ$23 NZ$33

(Appointed July 2009) Full year Darroch Limited NZ$10 NZ$10

Raewyn Lovett (Deputy Chair) Full year Quotable Value Limited NZ$23 NZ$4

(Appointed May 2011)

Ian Holland Full year Quotable Value Limited NZ$23 NZ$4

(Appointed May 2011) Part year PropertyIQ Limited NZ$1

Roger Bridge Full year Quotable Value Limited NZ$23 NZ$4


Director Period Board 2012 2011 $NZ’000 $NZ’000

Andrew Crocker (CFO) Full year Darroch Limited NZ$0 NZ$0

Jacquie Barker (COO) Full year Quotable Value Australia Pty Ltd NZ$0 NZ$0

Ben Driller (Egan GM) Full year Quotable Value Australia Pty Ltd NZ$0 NZ$0

Egan Australasia Pty Limited

Kim Wallace Part year Quotable Value Limited NZ$4 NZ$0


2. Employees’ Remuneration

Remuneration and other benefits of $100,000 per annum or more received by employees in their capacity as employees were:

Group Parent2012 2011 2012 2011

$100,000 - $109,999 14 14 3 3

$110,000 - $119,999 8 9 3 1

$120,000 - $129,999 7 6 3 1

$130,000 - $139,999 7 3 2 -

$140,000 - $149,999 3 6 1 2

$150,000 - $159,999 2 5 - 2

$160,000 - $169,999 6 8 1 4

$170,000 - $179,999 4 5 3 1

$180,000 - $189,999 1 1 1 -

$190,000 - $199,999 1 1 - -

$200,000 - $209,999 2 2 2 1

$210,000 - $219,999 2 1 - -

$240,000 - $249,999 1 - 1 -

$250,000 - $259,999 - 2 1 1

$260,000 - $269,999 1 - - -

$300,000 - $310,999 1 - - -

$460,000 - $469,999 1 - 1 -

$480,000 - $489,999 - 1 - 1

The Chief Executive’s remuneration and benefits is in the $460,000 - $469,000 band (2011: $480,000 - $489,999) .

3. Key Management Personnel

Key management personnel include all board members, the Chief Executive and the 6 (2010: 4) members of the management team . Compensation paid to these members is as follows:

2012 2011 $NZ’000 $NZ’000

Salaries and short-term benefits 1,815 1,585

Post-employment benefits - -

Other long-term benefits - -

Termination benefits - -

Total key management personnel compensation 1,815 1,585

53

4. Interests Register

A directors’ interests register is maintained by the Board as listed below:

Phil Lough Chairman, Methven Limited

Deputy Chairman, Port Nelson Limited

Director, Livestock Improvements Corporation

Director, Dairy Equities Limited

Director, New Zealand Valuation Limited

Director, Darroch Limited

Director, Egan Australasia Pty Ltd & QV Australia Pty Ltd

Director, Fisher & Paykel Appliances Holdings Limited

Derek Walker Director, Palmerston North Airport Ltd

Director, NZ Wind Farms Ltd & subsidiaries

Chair, The Bio Commerce Centre Ltd & subsidiaries

Director, Egan Australasia Pty Ltd & QV Australia Pty Ltd

Director/Shareholder, Third Bearing Ltd (TBL)

Director/Shareholder, TBL Investments Ltd

Director/Shareholder, Elmira Consulting Ltd

Director/Shareholder, Elmira 41 Ltd

Trustee, Central Energy Trust

Director, Manawatu Healthy Homes Limited

Director, Speirs Group Limited

Director, Computercare NZ Limited

Bryan Hemi Director/Shareholder, JNB Investments Ltd

Trustee, Hempire Whanau Trust

Shareholder, iTools Ideas Ltd

Shareholder, Direction Software Ltd

iTools Online Ltd, wholly owned subsidiary of iTools Ideas

Shareholder, iTools APSS

Director, PropertyIQ NZ Limited

Gary Traveller Chair, Apollo Pac Limited

Chair, Ply City Limited

Director, GDT Properties Limited

Director, Darroch Limited

Director, Suncourt Plaza Limited

Director, Clever Hands Limited

Director, Rave Events Management

Chair, Crown Asset Management Limited

Raewyn Lovett Chair of Partners, Duncan Cotterill, Lawyers

Chair, Netball New Zealand

Chair, Trans Tasman Netball League (TTNL) (ANZ Championship)

Director, Obex Medical Limited

Ian Holland Director, Dairy Investment Limited

Director, PropertyIQ NZ Limited

Roger Bridge Director, NZ Venture Investment Fund

Director, NZ National Party

Director, National Mortgage Underwriters Limited

Managing Director, Oxbridge Limited

Director, Allstor Self Storage Limited

Director, Britannia Management Limited

Director, Waterman Investments Limited

Director, Allstor Self Storage (NZ) Limited

Trustee, Christchurch Arts Festival

Trustee, Canterbury Community Trust

Kim Wallace Director, Westland Milk Products Investments Ltd

Director, Westland Farm Centre

Director, Arendal Investments Limited

Director, Fresh Food Systems Limited

(NB: all of above 100% wholly owned subsidiaries of Westland Co-operative Dairy Company Limited)

The Board of Directors acknowledges that the Company and Group holds Directors’ and Officers’ liability insurance arranged through Marsh for up to NZ$20 million limit of liability through Vero Liability Insurance (80%) and QBE (20%) .

5. Donations

Donations made by the Company and Group during the year ended 30 June 2012 totalled $35 (2011: $42,000) .

6. Actual Achievements

Ratio of Consolidated Shareholders’ Funds to Total AssetsThe table below shows the ratio of Consolidated Shareholders’ Funds to Total Assets for the planning period:

Numbers in $000’s 2011/12 Achieved 2012/13 Budget 2013/14 Budget 2014/15 Budget

Consolidated after Shareholders’ Funds 23,603 22,794 24,038 24,987

Total Assets 32,843 32,747 34,988 36,168

Ratio 71 .87% 69 .61% 68 .70% 69 .09%

7. Changes in Business of Company

During the year ended 30 June 2012 there were no changes in the nature of business of the company which includes the provision of property valuations, data and information .

55

Statement of Corporate GovernanceFor the year ended 30 June 2012

Financial StatementsThe Directors of Quotable Value Limited (QVL) are responsible for preparing financial statements that give a true and fair view of the financial position of the Company as at the end of the financial year and the results of operations and cash flows for the year . The external auditors are responsible for expressing an opinion on the financial statements, based on their review and assessment of the conclusions drawn from evidence obtained in the course of the external audit .

The financial statements set out in this report have been prepared by management in accordance with generally accepted accounting practice . They are based on appropriate accounting policies which have been consistently applied and which are supported by reasonable judgements and estimates .

Board of DirectorsThe Board of Directors retains full and effective control over the Company, monitors executive management and ensures that decisions on material matters are in the hands of the Board . The Chair of the Board of Directors is Phil Lough .

During the year, Bryan Hemi and Derek Walker resigned as Directors .

Shareholding Ministers appointed Director Kim Wallace during the reporting period .

The Company had 11 full Board meetings during the year . Most full Board meetings take place in either Wellington or Auckland . In conjunction with these meetings, the Board and executive management team usually meet twice a year to review the Company’s strategy and progress .

Subsidiary CompaniesQuotable Value Limited (QVL) has a 100%-owned operating subsidiary, Quotable Value Australia Pty Limited (QVA) incorporated in New South Wales, Australia . The Directors of QVA are Phil Lough (Chair of QVL), William Osborne (CEO of QVL), Jacquie Barker (COO of QV) and Australian resident company Director, Ben Driller (GM of EGAN) .

QVL had a 100%-owned operating subsidiary, Egan Australasia Pty Limited (EGAN) incorporated in Victoria, Australia . The Directors of EGAN were Phil Lough (Chair of QVL), William Osborne (CEO of QVL) and Australian resident company Director, Ben Driller (GM of EGAN) .

QVL has a 100%-owned operating subsidiary, Darroch Limited incorporated in New Zealand . The Directors of Darroch Limited are Phil Lough (Chair of QVL), Gary Traveller (Director of QVL), William Osborne (CEO of QVL) and Andrew Crocker (CFO of QVL) .

QVL has a 45% share of PropertyInsight Joint Venture (PIJV) through its subsidiary company New Zealand Valuation Limited (NZVL) . The Directors of NZVL are Phil Lough (Chair of QVL) and William Osborne (CEO of QVL) . The Director of PIJV is William Osborne (CEO of QVL) .

QVL has a 50% share of PropertyIQ NZ Limited (PIQ) . The Directors of PIQ are Ian Holland (Director of QVL), William Osborne (CEO of QVL) and Andrew Crocker (CFO of QVL) .

Internal Control To fulfil its responsibilities, management maintains adequate accounting records and has developed and continues to maintain an appropriate system of internal controls .

• Directors acknowledge that they are responsible for the Company’s system of internal financial control .

• Internal financial controls implemented by management can provide only reasonable and not absolute assurance against material misstatement or loss .

The Directors constantly review the effectiveness of the system of internal financial control . No major breakdowns were identified during the year in the system of internal control .

After reviewing internal management financial reports and budgets the Directors believe that the Company and the Group will continue to be a going concern in the foreseeable future . For this reason they continue to adopt the going concern basis in preparing the financial statements .

Committees of the BoardThe Company had two standing committees during the year . They are:

1. The Finance, Audit and Risk Committee The Finance, Audit and Risk Committee comprises Gary Traveller (Chair), Kim Wallace and Ian Holland . The purpose of this committee is to oversee the financial management, external and internal audit functions and the overall risk management of the Company . The committee usually meets three times per year .

2. The Remuneration CommitteeThe Remuneration Committee comprised Raewyn Lovett (Chair) and Roger Bridge . It takes responsibility for the remuneration policy, executive remuneration and in consultation with the Board takes responsibility for the Chief Executive’s performance review .

Director and Board Appraisal The Board has a policy of formally evaluating its own performance, and that of the individual Directors, annually .

Director Development The Board believes it is in the best interest of the Company to ensure that directors will remain current with best corporate governance practice . The Company budgets a small amount each year to support the continued professional development of Directors .

57

Independent Auditors ReportTo the readers of Quotable Value Limited and Group’s financial statements for the year ended 30 June 2012

The Auditor-General is the auditor of Quotable Value Limited (the Company) and Group . The Auditor-General has appointed me, John O’Connell, using the staff and resources of Audit New Zealand, to carry out the audit of the financial statements of the Company and Group, on her behalf .

We have audited the financial statements of the Company and Group on pages 16 to 49, that comprise the Statement of Financial Position as at 30 June 2012, the Statement of Comprehensive Income, Statement of Changes in Equity and Statement of Cash Flows for the year ended on that date and the Notes to the Financial Statements that include accounting policies and other explanatory information .

OpinionFinancial statements

In our opinion the financial statements of the Company and Group on pages 16 to 49:

• comply with generally accepted accounting practice in New Zealand;• comply with International Financial Reporting Standards; and• give a true and fair view of the Company and Group’s:

- financial position as at 30 June 2012; and - financial performance and cash flows for the year ended on that date .

Other legal requirements

In accordance with the Financial Reporting Act 1993 we report that, in our opinion, proper accounting records have been kept by the Company and Group as far as appears from an examination of those records .

Our audit was completed on 17 September 2012 . This is the date at which our opinion is expressed .

The basis of our opinion is explained below . In addition, we outline the responsibilities of the Board of Directors and our responsibilities, and explain our independence .

Basis of opinion

We carried out our audit in accordance with the Auditor-General’s Auditing Standards, which incorporate the International Standards on Auditing (New Zealand) . Those standards require that we comply with ethical requirements and plan and carry out our audit to obtain reasonable assurance about whether the financial statements are free from material misstatement .

Material misstatements are differences or omissions of amounts and disclosures that would affect a reader’s overall understanding of the financial statements . If we had found material misstatements that were not corrected, we would have referred to them in our opinion .

An audit involves carrying out procedures to obtain audit evidence about the amounts and disclosures in the financial statements . The procedures selected depend on our judgement, including our assessment of risks of material misstatement of the financial statements whether due to fraud or error . In making those risk assessments, we consider internal control relevant to the preparation of the Company and Group’s financial statements that give a true and fair view of the matters to which they relate . We consider internal control 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 Company and Group’s internal control .

An audit also involves evaluating:

• the appropriateness of accounting policies used and whether they have been consistently applied;• the reasonableness of the significant accounting estimates and judgements made by the Board of Directors;• the adequacy of all disclosures in the financial statements; and• the overall presentation of the financial statements .

We did not examine every transaction, nor do we guarantee complete accuracy of the financial statements . In accordance with the Financial Reporting Act 1993, we report that we have obtained all the information and explanations we have required . We believe we have obtained sufficient and appropriate audit evidence to provide a basis for our audit opinion .

Responsibilities of the Board of Directors

The Board of Directors is responsible for preparing financial statements that:

• comply with generally accepted accounting practice in New Zealand; and• give a true and fair view of the Company and Group’s financial position, financial performance and cash flows .

The Board of Directors is also responsible for such internal control as it determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error .

The Board of Directors’ responsibilities arise from the State-Owned Enterprises Act 1986 and the Financial Reporting Act 1993 .

Responsibilities of the Auditor

We are responsible for expressing an independent opinion on the financial statements and reporting that opinion to you based on our audit . Our responsibility arises from section 15 of the Public Audit Act 2001 and section 19(1) of the State-Owned Enterprises Act 1986 .

Independence

When carrying out the audit we followed the independence requirements of the Auditor-General, which incorporate the independence requirements of the New Zealand Institute of Chartered Accountants .

Other than the audit, we have no relationship with or interests in the Company or any of its subsidiaries .

John O’ConnellAudit New ZealandOn behalf of the Auditor-GeneralWellington, New Zealand

Matters relating to the electronic presentation of the audited financial statements

This audit report relates to the financial statements of Quotable Value Limited and group for the year ended 30 June 2012 included on the company’s website . The Board of Directors is responsible for the maintenance and integrity of the company‘s website . We have not been engaged to report on the integrity of the company’s website . We accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website .

The audit report refers only to the financial statements named above . It does not provide an opinion on any other information which may have been hyperlinked to or from the financial statements . If readers of this report are concerned with the inherent risks arising from electronic data communication they should refer to the published hard copy of the audited financial statements and related audit report dated 17 September 2012 to confirm the information included in the audited financial statements presented on this website .

Legislation in New Zealand governing the preparation and dissemination of financial information may differ from legislation in other jurisdictions .

2

Our customers :

Printed on sustainably produced paper

For the year ended 30 June 2012

Phil Lough . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Director (Chair)

Raewyn Lovett . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Director (Deputy Chair from 1 May 2012)

Derek Walker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Director (Deputy Chair) (to 30 April 2012)

Bryan Hemi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Director (to 1 June 2012)

Gary Traveller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Director

Ian Holland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Director

Roger Bridge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Director

Kim Wallace . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Director (from 1 May 2012)

Bill Osborne . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Chief Executive

Jacquie Barker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Chief Operating Offi cer

Andrew Crocker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Chief Financial Offi cer

Alan Roskruge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . General Manager Customer Solutions

John Baillie . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . General Manager Human Resources and Corporate Services

Murray Stevens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .General Manager Property Services

Rob Hutchison . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .General Manager Valuations

Head Offi ce . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . QV House, 22 Nevis Street, Petone

Postal Address . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Private Bag 39818, Lower Hutt 5045

Telephone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .+64 4 576 4460

Facsimile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .+64 4 576 4485

Website . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www .qv .co .nz

Auditor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Audit New Zealand, Wellington New Zealand

on behalf of the Controller and Auditor-General

Bankers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Westpac Banking Corporation

Solicitors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . DLA Phillips Fox

Insurance Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Marsh Limited

Directory

Annual Report 2011-2012 - Quotable Value Limited · Annual Report 2011-2012 Annual Report 2011-2012...

Documents

Transcript of Annual Report 2011-2012 - Quotable Value Limited · Annual Report 2011-2012 Annual Report 2011-2012...