ANNUAL REPORT 2012/13 - KeyInvest › uploads › files › Annual_Report_12_13.pdf · KeyInvest...

ANNUAL REPORT 2012/13

For more information visit keyinvest.com.au facebook.com/keyinvest twitter.com/key_invest 1300 658 904

Our Commitment to You

We are Genuine, Responsive and Successful in everything we do. These core values define how we help our

members achieve their goals.

We are committed to looking after the interests of our members to help them achieve their long term financial

goals and enjoy a comfortable and successful future.

We believe that our corporate and social responsibilities are essential to our long term success and that they

should complement our corporate aims.

We invest in our people to ensure they have the skills and training to deliver the best possible advice and

services to our members.

BOARD OF DIRECTORS

Back row L-R: Marcus La Vincente, Donny Walford, Geoff Vogt and Tim Sarah

Front row L-R: Ian Campbell (Managing Director), Roger Sexton AM (Chairman) and Daryl Stillwell (Deputy Chairman)

Front Cover: Chiton Retirement Living (www.chiton.com.au) KeyInvest’s innovative, sustainable retirement village on South Australia’s Fleurieu Peninsula has modern homes uniquely designed to optimise warming winter sunlight and minimise summer heat gain. Solar energy and hot water supply, convenient underground tanks for rainwater harvesting, double glazed windows and high levels of insulation provide a dramatic reduction in living costs and a level of comfort only intelligent design can provide. Private outdoor living areas with external shading create beautiful indoor/outdoor relationships with the 70 hectares of native gardens, wetlands, walking trails and wildlife surrounding Chiton. This is the future of retirement living.

CONTENTS

Chairman’s Report 1 Managing Director’s Report 3 Corporate Governance Statement 6 Financial Report 11 Company Information 58

CHAIRMAN’S REPORT

KeyInvest Ltd Group Annual Report 2012/13 1

To all our members and stakeholders, I am pleased to report that we have continued to prudently and successfully navigate KeyInvest through the considerable business challenges presenting themselves in both the worldwide and domestic markets during the 2012/13 financial year.

Over the course of 2012/13 we have witnessed the gradual easing of economic concerns from Europe, the United States has continued to show signs of improvement, whilst China, Australia’s major trading partner, appears to be managing its way through a softer period in its impressive long term growth trajectory.

Domestically, we spent much of the year in election mode, which impacted on consumer confidence and investment decisions. As the economy passed through the peak of the mining boom, the RBA eased interest rates in an effort to lift other sectors and re-ignite consumer spending so as to re-balance the economy. Unemployment edged higher and inflation remained low. The housing market has also been relatively subdued until recently. On the positive side, the weaker Australian dollar has provided some welcome relief for the export sectors of the economy.

Against this backdrop, the Australian share market staged a significant recovery during the year reaching its highest level in the post Global Financial Crisis period. Investors took advantage of excellent yield opportunities offered by dividend paying equities in a historically low interest rate environment where there were few rewards for savers in traditional bank deposits.

It is pleasing to report that despite ongoing difficult real estate market conditions, KeyInvest was able to achieve a record number of retirement village unit sales in the financial year, returning a significant amount of available cash to the Balance Sheet. Our reported financial performance has shown considerable improvement in underlying net profit. This improvement and other positive achievements within the business has not been fully reflected in the statutory accounts of the company, primarily due to the impact of retirement village valuations.

With relatively few sales of completed retirement villages Australia wide and almost all sales of partly completed villages being “distressed” sales, independent valuers are taking a highly conservative approach to assessing values for this unique asset class. Australian Accounting Standards require valuations of these “investment assets” to be prepared on a fair value basis (ie an “available for sale” basis) regardless of any intention to hold them for the long term.

Further write-downs in the value of two of our development sites were required this year despite achieving excellent sales results. With our ongoing development and management we expect significant value to emerge from these assets over the longer term. This has been the experience with our current and most advanced development site at Woodside Lodge this year and with our now completed and very successful site at McLaren Vale.

Our lending services business had another profitable year and as numerous product enhancement and marketing initiatives begin to take effect, we believe that our investment bonds are well positioned for future growth in the post Future of Financial Advice (FOFA) world.

Our achievements of this past year provide an insight into the positive future we are developing in each of KeyInvest’s major business segments:

• Our financial products are FOFA compliant and have been re-launched in the marketplace through financial planner groups - our primary distribution network.

• Our capital guaranteed investment bond products, provided positive and improved returns for our members and a record year in sales was achieved for our KeyInvest Funeral Bond.

• Our Life Events Bond continues to benefit from product improvement initiatives and is gaining greater exposure with financial planner groups via webinars, seminars, training days and presentations at industry and planner group conferences.

• We sold the first stage of six retirement units in our village in Horsham, Victoria and seven of the nine units built as part of the most recent stage of development of our retirement village at Woodside in the Adelaide Hills. Planning for further stages at both villages is well advanced.

• The first stage of our environmentally sustainable retirement development at Victor Harbor in South Australia was completed and we acquired a further 30% of this project taking our overall ownership interest to 81%.

• Within our lending services business we acquired the remaining 27.27% of KeyInvest Lending Pty Ltd from minority shareholders, attracted several new brokers, undertook a “brand refresh” project and continued to create and consider opportunities to acquire trail books at attractive prices throughout the year.

During this past year, an enormous amount of Management time and company resources has been devoted to complying with a multitude of new regulatory requirements emanating from various Local, State and Federal Government authorities.

While an increased level of supervision of the financial industry in Australia was to be expected in the aftermath of the Global Financial Crisis, much of the increased regulation has been imposed on the industry with little or no consultation and without due regard to the additional costs imposed on financial services companies or to the relative benefits to the customers of these companies.

CHAIRMAN’S REPORT


Following on from this period of significant change in the regulatory environment, it is important that our company, along with the financial services industry as a whole, now has an opportunity to draw breath and refocus our efforts and resources on growing our core business. We welcome the statements made by the new Coalition Government that it will slow down the pace of regulatory change to allow some balance to be restored between the allocation of resources to regulatory compliance in financial services companies and the allocation of resources to business development and growth.

Our Board of Directors and Executive Management team have put in many long hours in dealing with the workload of the company during this past year and remain fully focussed on growing KeyInvest and continuing to serve our members in the year ahead. We have highly skilled and extremely diligent people on our Board and in our Management team and I thank each and every one of them for their hard work, contributions and commitment during another demanding and challenging year for the company.

Yours sincerely

Dr Roger N Sexton AM Chairman

MANAGING DIRECTOR’S REPORT


Our goal remains to be a leading provider of

financial services and retirement living for mature Australians

The 2012/13 year continued to present many challenges, however there were also many achievements and opportunities which I am pleased to be able to share with our members.

We are here for our members

Since 1878, the welfare of our members has been a central tenet and today, through our businesses, we continue to keep this at the forefront of everything we do.

KeyInvest’s vision is to be a leading provider of financial services and retirement living for Australians. We offer a range of investment bonds, lending services, general insurance and retirement lifestyle options that are tailored towards mature Australians.

We remain unique, just like our members

We are proud to be one of the few remaining and actively growing Friendly Societies in Australia. Operating under the Life Insurance Act (1995) and regulated by the Australian Prudential Regulation Authority (APRA) we are uniquely placed to deliver on our commitments to our members and customers over the long term.

We continue to experience growth in members and customers and our national relationship network gives us access to thousands of financial planners through which we distribute our products and a growing national network of lending advisers.

Our Strategic Plan includes exciting initiatives to expand our range of products and services offered to leverage our member and customer relationships as well as our financial planner and lending adviser networks.

We are focussed on your future

KeyInvest’s future and the interests of our members and customers depends on effective management of our cash flow and the creation of additional revenue streams offering relevant products and services that meet our member and customer needs.

KeyInvest’s strategy is to grow the core areas of our business by:

• Attracting new members and customers by being a leading provider of long term savings, lending and insurance products and retirement lifestyle services.

• Internally developing or acquiring complementary businesses that offer improved services and financial benefits to our members and enhancement of our increasing customer base.

We have an experienced Board of Directors and strong Management team with the skills required to deliver our strategy and, with it, the future success and financial wellbeing of our members and customers.

OUR FINANCIAL PERFORMANCE

Our 2013 consolidated results have resulted in an excellent turnaround over the previous year’s performance with a profit before tax of $670,577 (2012: loss $2,141,007). After tax and after attribution of profits to Life Investment Contracts the net result was a profit of $337,143 (2012: loss $2,421,185).

Our financial results continue to reflect the conservative approach taken by independent valuers, particularly to partly completed retirement villages. It is difficult to accept asset write-downs in a year when sales of retirement units have bounced back strongly. Pleasingly, our completed and more established villages did not suffer the same volatility as our development sites. With an ageing population being one of the undisputable macro trends of the early 21st century we remain committed to the strategy of growing our retirement village portfolio for the long term returns that will emerge. We have pursued this strategy cautiously and comfortably within our balance sheet capacity so that we can remain focussed on our long term goals rather than be distracted by short term oscillations.

The real estate markets within which we operate have not yet recovered from the slow down in both volume of transactions and price levels however our sales of new and rollovers of existing retirement units exhibited a pleasing resurgence with a record 36 settled sales equating to an industry leading turnover rate of 12% of the portfolio.



In the retirement living business, despite an ongoing slow real estate market our buoyant sales result led to a 39% improvement in deferred management fees and development profits of $1,224,014, compared to $880,498 in the previous year. Independent valuations of the portfolio resulted in net valuation write-downs of $1,200,544 (2012: $1,991,390) which were primarily directed at the development sites.

Our investment bonds business interest revenue fell 22% after falling 33% the previous year reflecting the lower interest and yields available as the RBA exerted downward pressure on short term interest rates. This fall was offset by gains of $3,334,861 (2012: loss $1,857,714) on investments due to tightening of credit spreads on fixed interest assets and share market gains on the small equities positions in our funds.

Investment returns from our funds were either in line with or exceeded performance benchmarks set for each fund.

Commissions from settled loans in our lending services business were comparable to the previous year which was a positive outcome given market activity levels and transaction volumes have remained subdued.

FINANCIAL SERVICES - INVESTMENT BONDS

As a Friendly Society, KeyInvest has offered investment bonds for nearly 30 years with currently $170 million in funds in our own products under management. Our range of investment bonds are primarily distributed by financial planner networks across the country and are designed to assist with long term savings and investing for life’s major events.

Our most popular bond, a capital guaranteed Funeral Bond achieved record sales this year and is our biggest fund with over $68 million in funds under management.

Our Life Events Bond offers excellent tax advantages and a choice of seven investment options, making it a viable solution for long term savings such as children’s education or a tax effective alternative to superannuation that can be accessed before retirement.

In addition, the Income Security and Supersaver Bond Funds have many loyal investors who understand there is a place in every investment portfolio for steady capital guaranteed returns.

Throughout the year we have enhanced and re-launched our products to ensure that they meet the new Future of Financial Advice (FOFA) legislative requirements which came into force on 1 July 2013.

FINANCIAL SERVICES - LENDING SERVICES

The lending services business has been extremely resilient in the face of lower home sales and transaction volumes in residential real estate markets across the country.

With over 50 brokers spread throughout Australia, KeyInvest Lending Services has consolidated its position as one of the largest home loan broking groups in Australia. During the year we re-invigorated the brand under its own distinct colour scheme which is in keeping with its target market.

We continue to look for opportunities to attract more lending advisers to join our business.

RETIREMENT LIVING

Our retirement living portfolio is well positioned to benefit from very strong demographic fundamentals as the baby boomer generation heads towards their retirement years. KeyInvest has continued the development of its retirement village projects and this has been done under a measured and risk focussed approach.

Our largest village at McLaren Vale continues to enjoy strong demand. With the famous McLaren Vale wineries and beautiful Port Willunga and Aldinga beaches nearby, this village offers an enviable lifestyle, less than an hour from Adelaide.

The first stage comprising six homes and a Community Centre at our new site in Horsham, Victoria, is sold out. After a slow start, the local community awareness of the village is growing and some of our new residents are from neighbouring towns and districts. Horsham has a high percentage of retirees and is one of the largest towns in the Wimmera Region, making it the regional centre of choice for retirees.

At Woodside in the Adelaide Hills we now have 34 homes and this year we completed the construction of a caravan parking area and residents workshop. Woodside already has a large Community Centre offering indoor and outdoor dining areas, billiards room, gym, bar and kitchen facilities as well as a library and reading area. Woodside has excellent access to walking and cycling trails, outstanding wineries and is only 15 minutes by car or bus to the major South Australian growth centre of Mount Barker.



Our Gables and Garden Cottages Villages represent 64 homes across four separate sites in Adelaide’s eastern suburbs that continue to enjoy strong support from local retirees who wish to live in familiar surroundings when they retire.

KeyInvest’s Winzor village in Salisbury in Adelaide’s northern suburbs is a highly desirable place to live and is perfectly suited to retirees in the local area.

The first stage of 10 homes at “Chiton”, an environmentally sustainable retirement living development at Victor Harbor was completed during the year with the first residents already enjoying the many benefits of world class environmental design and outstanding energy efficiency together with the amenity of this outstanding seaside retirement destination.

INSURANCE SERVICES

KeyInvest’s general insurance offering, provides members with the opportunity to gain access to leading insurance policies at discounted rates. Insurance for home and contents including retirement village policies, car, caravan and travel are available to members and the general public. The KeyInvest website has further information about our member special offers.

IN THE COMMUNITY

KeyInvest was founded in 1878 as IOOF(SA) and retains its ethos of supporting the less advantaged in the community. For hundreds of years under the “Odd Fellow” tradition, members have cared for widows and orphans of members, long before Government welfare existed. We continue to protect and enhance that tradition by retaining links to those helping the less advantaged in the community and are delighted that many of our team share this passion.

KEYINVEST ODD FELLOWS FOUNDATION

KeyInvest has created the KeyInvest Odd Fellows Foundation with its mission to support the Odd Fellow ethos through the following charities with grants and fundraising activities:

Morialta Charitable Trust - As a founding partner of this charity in the 1930’s, KeyInvest continues to strongly support Morialta as they provide grants to support disadvantaged children in South Australia. In 2012/13 Morialta Trust granted well in excess of $400,000 in financial aid that directly benefited children in our community.

Julian Burton Burns Trust - Julian Burton was injured in the Bali bombings in 2002 which claimed the lives of many innocent people, including 88 Australians. Following his rehabilitation, Julian established the Burns Trust with a vision to be Australia's leading social enterprise committed to the prevention, care and research associated with burn injury. For several years the KeyInvest team have taken part in the annual City to Bay Fun Run to raise money for the Julian Burton Burns Trust.

In addition, a number of our staff actively support other charitable groups or are significantly involved in their local neighbourhoods via sporting, social or community groups.

KeyInvest welcomes their endeavours and where possible supports their efforts.

Yours sincerely

Ian Campbell Managing Director

CORPORATE GOVERNANCE STATEMENT


KeyInvest places great importance on its corporate governance framework. The Board regularly reviews and refines its corporate governance policies to ensure systems are in place to encourage and deliver sustainable and profitable financial performance with long term growth of members’ funds.

The Board - Roles and Responsibilities

The Board is responsible for the Company’s overall strategy, governance and performance. Under the Corporate Governance Policy, the Board has adopted a schedule of its roles and responsibilities. Broadly the Board’s role includes:

• deciding the objectives and strategic direction of the Group;

• reviewing and approving the Group’s statutory and regulatory accounts;

• adopting the Company’s annual budget;

• approving significant business decisions for the Company;

• understanding the Company’s business and the industry and environment within which it operates to effectively oversee the risk management and strategic direction of the Company;

• monitoring the achievement of all objectives and financial performance of the Company;

• approving branding, marketing and communication strategies;

• maintaining an adequate level and quality of capital commensurate with the scale, nature and complexity of its business and risk profile;

• monitoring the adequacy, appropriateness and operation of internal controls implemented by the Company; and

• appointing and reviewing the performance of the Company’s Managing Director.

The Corporate Governance Policy also details the roles and responsibilities of the Board’s Committees.

The Company’s operating controlled entities all have separate Boards who are responsible for the strategy, governance and performance of those entities.

The Board has put in place a formal delegation structure that details specific authorities delegated to its Board Committees, the Managing Director, Management and those specifically retained by the Board.

Role of the Managing Director

The Board has specifically delegated responsibility for the day to day management of the Company, the achievement of all objectives and financial performance to the Managing Director. The Managing Director is responsible for the operational risk management and compliance with all policies and procedures laid down by the Board.

Role of the Chairman

The Chairman is responsible for leading the Board and facilitating effective discussions at the Board meetings. The Chairman also has delegated responsibility and authority from the Board to conduct annual individual performance assessments of all Non Executive Directors.

Board Size and Composition

In accordance with the Australian Prudential Regulation Authority’s (APRA) Prudential Standard - Governance (CPS 510) and the Company’s Constitution, the Board comprises:

• a majority of independent Non Executive Directors;

• the Chairman is an independent Non Executive Director;

• a minimum of five Directors; and

• an appropriate mix of skills, experience and personal attributes which allow the Directors individually, and the Board collectively, to discharge their role and responsibilities.



In accordance with APRA’s Prudential Standard - Fit and Proper (CPS 520) the Board membership must comprise Directors with the appropriate skills, experience and knowledge and who act with honesty and integrity. That is, they are considered to be fit and proper.

The current membership of the Board is set out in the Directors’ Report and comprises six independent Non Executive Directors and one Executive Director.

Board Renewal and Succession Planning

The Company’s Constitution requires the regular rotation of Non Executive Directors such that none serve for a period of more than three years without re-election.

A particular focus of the Board is to preserve continuity and have an appropriate pool of skills and experience, whilst achieving an orderly succession of the Board’s long serving members. The Directors have established a Board Renewal Plan that sets out how the Board intends to progressively and systematically renew its membership.

In accordance with the Company’s Constitution, Mr Daryl Stillwell and Mr Geoff Vogt will retire by rotation at the upcoming 2013 Annual General Meeting and offer themselves for re-election at that meeting. Further information on Mr Daryl Stillwell and Mr Geoff Vogt is available in the Explanatory Memorandum contained within the Notice of Annual General Meeting.

Board Performance Evaluation

The Board must ensure that Directors and Senior Management of the Company, collectively, have the full range of skills needed for the effective and prudent operation of the Company. This includes the requirement for Directors, collectively, to have the necessary skills, knowledge and experience to understand the risks of the Company, including its legal and prudential obligations and to ensure that the Company is managed in an appropriate way.

The Performance Evaluation assesses the performance of Non Executive Directors and the Managing Director relative to the Board’s objectives and their contribution to Board deliberations and processes.

The Remuneration and Nomination Committee, together with the Chairman, are responsible for evaluating the Board’s performance and each Director’s performance individually including that of the Chairman and Managing Director. An extensive Board performance self evaluation and review process was undertaken during 2013.

Training and Development

A Director induction programme is carried out for all new Non Executive Directors to ensure they are suitably equipped with information for their role and aware of the governance environment within which the Company operates.

Directors are required to participate in ongoing training and development programmes in order to remain current and enhance their knowledge about the Company and the industry within which it operates.

Board Practices

The Board holds regular meetings to receive reports on the Company’s progress and to review both the Company’s operating performance and strategies. The Board may meet on other occasions, as required, and the independent Non Executive Directors meet frequently in the absence of the Managing Director and the Executive Management team. In addition, corporate strategy meetings are held to assess and determine the strategic direction of the Company.

Details of the number of meetings held by the Board and its Committees during the 2012/13 financial year and attendance by Directors are set out in the Directors’ Report.

The Board is entitled to seek independent professional advice at the Company’s expense in respect of specific issues that arise from time to time.

Risk Management

KeyInvest considers risk management to be a fundamental part of the achievement of its strategic and operational objectives. KeyInvest maintains a strong risk culture that ensures the key risks inherent in the business are well understood, formally documented and managed.

KeyInvest is required under APRA Prudential Standard - Risk Management (LPS 220) to maintain a risk management framework and strategy that is appropriate to the nature and scale of its operations. An annual risk management statement is provided to APRA which is signed by two Directors. KeyInvest’s Appointed Actuary is also required to



submit an assessment on the suitability of the risk management practices of the business as part of the Financial Condition Report which is provided to APRA.

In accordance with the new APRA Prudential Standard - Capital Adequacy (LPS 110), KeyInvest has documented its Internal Capital Adequacy Assessment Process (ICAAP) and is implementing the requirements of the standard within its risk management framework.

Overall, the Board is responsible for the Company’s risk management framework and oversees the implementation of systems, processes, structures and policies designed to identify, assess, mitigate and monitor risks of the Company. The active identification of risks and implementation of mitigation measures are responsibilities of Senior Management. The Board has adopted a Risk Management Strategy that defines the responsibilities of the Board, Audit and Risk Committee, other Board Committees, the Managing Director, Senior Managers and Staff.

The Company’s risk registers, risk management practices and risk and compliance policies have been progressively reviewed and updated during the year.

The internal audit function has full and free access to the Audit and Risk Committee and the Chair of the Board.

Board Committees

To assist the Board in discharging its role and responsibilities it maintains four Board Committees.

Each Committee operates in accordance with a written Charter and it is the policy of the Board that a majority of the members of each Committee should be independent Non Executive Directors. Information on the Directors and their Committee memberships can be found in the Directors’ Report.

The role and function of each Committee is reviewed annually by the Board. During the year the Board made changes to reflect the introduction of the LAGIC Prudential Standards on Capital Adequacy and to reflect changes in the business structure.

Corporate Governance Committee

The Corporate Governance Committee has been established to advise on the Group’s corporate governance policies and procedures and its compliance obligations.

In particular, the Committee is responsible for ensuring the Company’s compliance with APRA’s Prudential Standard - Governance (CPS 510).

Remuneration and Nomination Committee

The Remuneration and Nomination Committee has been established to review and make recommendations to the Board on remuneration and incentives applicable to the Directors and Senior Management in accordance with APRA’s Prudential Standard - Governance (CPS 510).

This Committee is also responsible for making recommendations regarding nominations and appointments of Directors, the fitness and propriety of Directors, Senior Management, the External Auditor, the Internal Auditor and the Actuary, in accordance with APRA’s Prudential Standard - Fit and Proper (CPS 520).

Audit and Risk Committee

In accordance with APRA’s Prudential Standard - Governance (CPS 510) this Committee comprises a minimum of three Non Executive Directors, with a majority of the members of the Committee being independent.

The Audit and Risk Committee has been established to advise on financial reporting (including external audit), internal control systems (including internal audit) and the risk management framework of the Company.

In addition, this Committee is responsible for reviewing and monitoring the Company’s compliance with its risk management policies, obligations and recommending to the Board the Company’s Financial Statements.



Finance and Investment Committee

The Finance and Investment Committee has been established to advise the Board on the financial activities, investment policies and activities of the Company.

In particular, this Committee is responsible for reviewing and recommending for approval to the Board:

• the Annual Budgets of the Company;

• the bonus rates to be declared on the Investment Bonds;

• the financial viability of major projects; and

• the long term positioning and strategies of the Company.


This page has been left blank intentionally.

FINANCIAL REPORT


Directors’ Report 12 Auditor’s Independence Declaration 16 Financial Statements - Statement of Financial Position 17 - Statement of Comprehensive Income 18 - Statement of Changes in Equity 19 - Statement of Cash Flows 20 - Notes to the Financial Statements

Note 1: Statement of Significant Accounting Policies 21 Note 2: Cash and Cash Equivalents 28 Note 3: Other Financial Assets 28 Note 4: Receivables 29 Note 5: Controlled Entities 29 Note 6: Investments Accounted for Using the Equity Method 30 Note 7: Business Combinations 31 Note 8: Income Tax 32 Note 9: Investment Property 36 Note 10: Property, Plant and Equipment 36 Note 11: Life Investment Contracts 38 Note 12: Intangible Assets 41 Note 13: Payables 41 Note 14: Financial Liabilities 42 Note 15: Provisions 42 Note 16: Reserves 43 Note 17: Revenue 44 Note 18: Related Party Disclosure 46 Note 19: Economic Dependence 47 Note 20: Cash Flow Information 47 Note 21: Financial Risk Management 48 Note 22: Capital Management 54 Note 23: Capital and Leasing Commitments 55 Note 24: Company Details 55

Directors’ Declaration 56 Auditor’s Report 57

DIRECTORS’ REPORT


The Directors of KeyInvest Ltd (Company) present their report, together with the Financial Statements of the Group, being the Company and its controlled entities, for the year ended 30 June 2013.

Principal Activities

The Group’s principal activities during the financial year were the provision of financial products and services (specifically Life Investment Contracts to members), the development and management of Retirement Villages and the provision of lending services to the general public.

There were no significant changes to the Group’s principal activities during the year.

Review of the Group’s Operations and Results

A detailed overview of the Group’s operations is set out in the Managing Director’s section of the Annual Report.

The members’ entitlement to the Group’s net profit (loss) from ordinary activities after income tax for the financial year was $682,192 (2012: ($2,451,877)).

Operating revenue of the Group was $27,275,354 (2012: $21,736,742).

The total comprehensive income for the year was $337,143 (2012: ($2,421,185)).

The net assets of the Group as at 30 June 2013 were $27,443,949 (2012: $26,372,866).

Life Investment Funds

In an environment of historically low yields for investors, the investment performance in each of the Company’s Life Investment Funds was satisfactory with all funds exceeding their performance benchmarks.

Earnings of $10,703,970 (2012: $7,527,401) on Statutory Funds contributed strongly to the overall operating revenue of the Group.

Members’ funds at the end of the financial year were $170,760,044 (2012: $172,279,777).

Retirement Living

The Group’s Retirement Living division achieved strong unit sales at existing completed villages and progressed the sales and development of its three new villages with sales of all six units at Wimmera Lodge in Horsham and completion of nine further units at Woodside and 10 further units at the Chiton development at Victor Harbor.

Deferred management fees and development profits of $1,224,014 (2012: $880,498) from sale of Retirement Village units was a highlight notwithstanding the continuation of soft conditions in residential real estate markets during the year.

Lending Services

The KeyInvest Lending Services team continued to achieve strong results in difficult conditions from its nationwide network of over 50 Lending Advisers.

Commission revenue from lending services was $6,278,239 (2012: $6,338,466).

Significant Changes in State of Affairs

During the financial year the Group:

• completed the first stage of 10 new units at Chiton, and acquired a further 30% of the retirement village development project taking its overall ownership interest to 81%;

• completed construction of a further nine units at Woodside Lodge; and

• KeyInvest Property Loans Pty Ltd acquired 27.27% of the shares in KeyInvest Lending Pty Ltd taking its overall ownership interest to 100%.

Other than the above, there were no other significant changes in the state of affairs of the Group during the financial year.

DIRECTORS’ REPORT


After Balance Date Events

Since the end of the financial year there have been no matters or circumstances that have arisen, which significantly affected, or may significantly affect, the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial years.

Future Developments, Prospects and Business Strategies

Disclosure of information relating to future developments of the Group in future financial years is likely to result in unreasonable prejudice to the interests of the Group. Accordingly, this information has not been disclosed in this Report.

Directors

The names and particulars of the Directors of the Company during the financial year:

Dr Roger Sexton AM BEc (Hons), MEc, PhD (Econ), FAICD, FAIM, SF Fin, CPMgr, CUniv

Chairman (Independent Non Executive)

Appointed Director on 1 October 2003 and is the Chairman of the Remuneration and Nomination Committee. Dr Sexton is an Investment Banker with over 30 years experience and is a specialist in corporate reconstruction, financial planning and funds management. He is a Director of a number of private and public company Boards and organisations including the Australian Accounting Standards Board.

Daryl Stillwell BA Dip App Psych, Reg Psych, FAICD, CMC, MAHRI

Director (Independent Non Executive)

Appointed Director on 1 July 2005 and is a member of the Audit and Risk Committee and Remuneration and Nomination Committee. Mr Stillwell is Managing Director of a human resources consulting company and has over 30 years experience within that industry.

Donny Walford FAICD


Appointed Director on 1 July 2005 and is the Chairman of the Finance and Investment Committee and a member of the Remuneration and Nomination Committee. Ms Walford is CEO of a strategy consulting company and has extensive experience in financial management, human resources, strategic planning and project management.

Tim Sarah BEc, MBA (Exec), ACA, FAICD


Appointed Director on 1 July 2007 and is the Chairman of the Audit and Risk Committee and a member of the Finance and Investment Committee. Mr Sarah is Joint Managing Director of a private commercial construction group with 20 years experience. Previously he worked in a professional accounting firm.

Geoff Vogt BEc, FAICD, FCSA, SF Fin, CPA, ANZIF (Assoc), CTP, RFD


Appointed Director on 27 May 2010 and is the Chairman of the Corporate Governance Committee and a member of the Audit and Risk Committee. Mr Vogt is CEO of the Industry Leaders Fund Inc and a Director of Centennial Park Cemetery, United Way Australia and United Way South Australia. Previously he worked as a CEO and in other senior executive roles primarily in the finance and insurance industries.

DIRECTORS’ REPORT


Marcus La Vincente LLB, MBA, FAICD, FAIM, FANZCN, Notary Public Director

(Independent Non Executive)

Appointed Director on 15 November 2011 and is a member of the Corporate Governance Committee. Mr La Vincente was a Partner with the law firm Minter Ellison for 10 years ending in June 2013 and is now a Senior Legal Adviser to that law firm. Mr La Vincente has extensive commercial and corporate law experience as well as acting for a number of prominent not for profit organisations.

Ian Campbell Managing Director (Executive)

BBus (Acctg), GMQ, MBA, FAICD, FCPA, JP Appointed Director on 30 November 2004, Joint Managing Director in September 2006 and Managing Director in January 2007 and is a member of the Corporate Governance Committee and Finance and Investment Committee. Prior to joining the Company he successfully developed and operated two home loan companies nationally and is a former senior bank executive with an extensive corporate and business banking background.

Certain Directors are also Directors of the following controlled entities as at the date of this report:

• KeyInvest Retirement Living Pty Ltd • KeyInvest Gables Pty Ltd • KeyInvest Horsham Pty Ltd • KeyInvest Winzor Pty Ltd • Life Events Bond Pty Ltd

Roger Sexton (Chairman), Daryl Stillwell, Donny Walford, Tim Sarah, Geoff Vogt, Marcus La Vincente and Ian Campbell.

• KeyInvest Property Loans Pty Ltd • Australian Associated Advisers Pty Ltd • KeyInvest Lending Pty Ltd • Money Advisers Pty Ltd

Roger Sexton (Chairman), Donny Walford and Ian Campbell.

• Chiton RV Pty Ltd • Chiton RV Developments Pty Ltd

Ian Campbell.

Company Secretary

Ms Kristy A Huxtable ACSA (MBA, GradDip (Applied Corporate Governance), GradDip (Human Resource Management)) was appointed Company Secretary on 30 July 2012. Ms Huxtable has held senior group company secretarial positions including over five years at the Australian Securities Exchange (ASX).

Ms Kerry M Waiblinger was Company Secretary during the financial year and resigned from the position to take on a different role within KeyInvest upon her return from parental leave.

Directors’ Meetings

The table below shows the number of Directors’ meetings of the Company held (including meetings of Board Committees) and the number of meetings attended by each of the Directors of the Company during the year:

Board of Directors

Audit and Risk

Corporate Governance

Finance and Investment

Remuneration and Nomination

Held Attended Held Attended Held Attended Held Attended Held Attended R N Sexton 10 10 - - - - - - 4 4 D L Stillwell 10 9 5 4 - - - - 4 3 D Walford 10 9 - - - - 6 6 4 4 T H Sarah 10 10 5 5 - - 6 5 - -

G T Vogt 10 9 5 5 6 6 - - - -

M D La Vincente 10 10 - - 6 6 - - - -

I J Campbell 10 10 - - 6 6 6 6 - -

In addition a number of Directors’ meetings were held during the year for the KeyInvest Property Loans Group.

DIRECTORS’ REPORT


Indemnification of Officers or Auditors

During the financial year the Group paid a premium in respect of a contract insuring the Directors, the Company Secretary and all Officers of the Group, against liabilities incurred in their capacity as a director, secretary or officer to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liabilities covered and the amount of premium.

During or since the end of the financial year the Group has not indemnified or made a relevant agreement to indemnify the Group’s Auditor against a liability arising out of their conduct while acting as the Group’s Auditor. In addition, the Group has not paid, or agreed to pay, a premium in respect of a contract insuring against a liability incurred by the Group’s Auditor.

Proceedings

No person has applied for leave of Court to bring proceedings on behalf of the Group or intervene in any proceedings to which the Group is a party for the purpose of taking responsibility on behalf of the Group for all or any part of those proceedings. The Group was not a party to any such proceedings during the year.

Environmental Issues

The Group’s operations are not regulated by any significant environmental regulation under a law of the Commonwealth or of a State or Territory.

Company Structure and Dividend Policy

The Company is a public company, limited by shares and guarantee:

• No shares have been issued with respect to the Company and the Directors have no intention to issue shares or declare any dividends in the next financial year.

• The guarantee provided by members acts as both the means of membership of the Company and the means of limiting the members’ liability (the amount of each member’s guarantee is up to a maximum of $1).

Options

No options over interests in the Group were granted during or since the end of the financial year and there were no options outstanding at the date of this report.

Auditor’s Independence Declaration

The Auditor’s Independence Declaration as required under section 307C of the Corporations Act 2001 follows the Directors’ Report.

Signed in accordance with a resolution of the Board of Directors.

On behalf of the Board of Directors.

Dr Roger N Sexton Chairman

Date: 30 September 2013

STATEMENT OF FINANCIAL POSITIONAs at 30 June 2013

Note 2013$

2012$

2013$

2012$

ASSETSCash and cash equivalents 2 3,620,947 999,935 2,996,961 288,893 Other financial assets 3 1,333,493 1,962,472 3,855,429 4,484,408 Receivables 4 1,034,116 1,364,660 9,436,975 11,174,126 Investments accounted for using the equity method 6 - 2,869,247 - - Current tax assets 8 1,447,514 913,862 1,301,408 948,003 Deferred tax assets 8 1,829,811 676,772 1,462,798 340,614 Investment property 9 21,991,216 21,627,267 13,349,993 14,427,267 Property, plant and equipment 10 9,326,823 5,081,346 3,037,002 2,469,583 Life Investment Contract policyholder assets 11 170,760,044 172,279,777 170,760,044 172,279,777 Intangible assets 12 3,647,536 3,651,776 - -

Total Assets 214,991,500 211,427,114 206,200,610 206,412,671

LIABILITIESPayables 13 1,901,530 1,652,082 1,756,441 1,424,087 Current tax liabilities 8 84,942 - - - Financial liabilities 14 3,877,163 862,139 31,697 101,409 Provisions 15 4,526,331 4,945,069 4,423,945 4,858,774 Life Investment Contract policyholder liabilities 11 170,760,044 172,279,777 170,760,044 172,279,777 Deferred tax liabilities 8 6,397,541 5,315,181 6,305,440 5,280,502

Total Liabilities 187,547,551 185,054,248 183,277,567 183,944,549

NET ASSETS 27,443,949 26,372,866 22,923,043 22,468,122

EQUITYReserves 16 300,000 300,000 300,000 300,000 Retained earnings 23,968,892 23,286,700 22,623,043 22,168,122

Parent interest 24,268,892 23,586,700 22,923,043 22,468,122 Minority equity interest 3,175,057 2,786,166 - -

Total Equity 27,443,949 26,372,866 22,923,043 22,468,122

Consolidated Group Parent Entity

The accompanying notes form part of these Financial Statements. KeyInvest Ltd Group Annual Report 2012/13 17

AUDITOR’S INDEPENDENCE DECLARATION


STATEMENT OF FINANCIAL POSITIONAs at 30 June 2013

Note 2013$

2012$

2013$

2012$

ASSETSCash and cash equivalents 2 3,620,947 999,935 2,996,961 288,893 Other financial assets 3 1,333,493 1,962,472 3,855,429 4,484,408 Receivables 4 1,034,116 1,364,660 9,436,975 11,174,126 Investments accounted for using the equity method 6 - 2,869,247 - - Current tax assets 8 1,447,514 913,862 1,301,408 948,003 Deferred tax assets 8 1,829,811 676,772 1,462,798 340,614 Investment property 9 21,991,216 21,627,267 13,349,993 14,427,267 Property, plant and equipment 10 9,326,823 5,081,346 3,037,002 2,469,583 Life Investment Contract policyholder assets 11 170,760,044 172,279,777 170,760,044 172,279,777 Intangible assets 12 3,647,536 3,651,776 - -

Total Assets 214,991,500 211,427,114 206,200,610 206,412,671

LIABILITIESPayables 13 1,901,530 1,652,082 1,756,441 1,424,087 Current tax liabilities 8 84,942 - - - Financial liabilities 14 3,877,163 862,139 31,697 101,409 Provisions 15 4,526,331 4,945,069 4,423,945 4,858,774 Life Investment Contract policyholder liabilities 11 170,760,044 172,279,777 170,760,044 172,279,777 Deferred tax liabilities 8 6,397,541 5,315,181 6,305,440 5,280,502

Total Liabilities 187,547,551 185,054,248 183,277,567 183,944,549

NET ASSETS 27,443,949 26,372,866 22,923,043 22,468,122

EQUITYReserves 16 300,000 300,000 300,000 300,000 Retained earnings 23,968,892 23,286,700 22,623,043 22,168,122

Parent interest 24,268,892 23,586,700 22,923,043 22,468,122 Minority equity interest 3,175,057 2,786,166 - -

Total Equity 27,443,949 26,372,866 22,923,043 22,468,122



STATEMENT OF COMPREHENSIVE INCOMEFor the year ended 30 June 2013

Note 2013$

2012$

2013$

2012$

Revenue 17 27,275,354 21,736,742 19,316,280 14,590,777

Expenses 17 (26,604,777) (23,746,770) (18,680,236) (17,159,158)

Share of net profit (loss) of joint venture entities 6b - (130,979) - -

Profit (loss) before income tax expense 670,577 (2,141,007) 636,044 (2,568,381)

Income tax expense 8d (201,740) (538,991) (49,429) (685,171)

Net profit (loss) after related income tax expense 468,837 (2,679,998) 586,615 (3,253,552)

Net (profit) loss attributable to Life Investment Contracts - unallocated policyholder benefits 11 (131,694) 258,813 (131,694) 258,813 Transfers from (to) Life Funds - - - -

Net profit (loss) after profit (loss) attributable to Life Investment Contracts 337,143 (2,421,185) 454,921 (2,994,739)

Other comprehensive income after income tax - - - -

Total comprehensive income for the year 337,143 (2,421,185) 454,921 (2,994,739)

Profit (loss) attributable to:Members of the Parent Entity 682,192 (2,451,877) 454,921 (2,994,739)Minority equity interests (345,049) 30,692 - - Net profit (loss) after profit (loss) attributable to Life Investment Contracts 337,143 (2,421,185) 454,921 (2,994,739)

Total comprehensive income attributable to:Members of the Parent Entity 682,192 (2,451,877) 454,921 (2,994,739)Minority equity interests (345,049) 30,692 - -

Total comprehensive income for the period 337,143 (2,421,185) 454,921 (2,994,739)



STATEMENT OF CHANGES IN EQUITYFor the year ended 30 June 2013

RetainedEarnings

$

GeneralReserves

$

MinorityEquity

Interests$

Total

$

Consolidated Group

BALANCE AT 30 JUNE 2011 25,738,577 300,000 2,972,786 29,011,363

Initial recognition of minority interest - - - - Profit (loss) attributable to members of the Parent Entity (2,451,877) - - (2,451,877)Profit (loss) attributable to minority interests - - 30,692 30,692

Sub-total (2,451,877) - 30,692 (2,421,185)

Dividends paid or provided for - - (217,312) (217,312)

BALANCE AT 30 JUNE 2012 23,286,700 300,000 2,786,166 26,372,866

Initial recognition of minority interest - - 629,505 629,505 Profit (loss) attributable to members of the Parent Entity 682,192 - - 682,192 Profit (loss) attributable to minority interests - - 165,523 165,523 Disposal of minority interest - - (343,234) (343,234)

Sub-total 682,192 - 451,794 1,133,986

Dividends paid or provided for - - (62,903) (62,903)

BALANCE AT 30 JUNE 2013 23,968,892 300,000 3,175,057 27,443,949

Parent Entity

BALANCE AT 30 JUNE 2011 25,162,861 300,000 - 25,462,861

Profit (loss) attributable to members of the Parent Entity (2,994,739) - - (2,994,739)

BALANCE AT 30 JUNE 2012 22,168,122 300,000 - 22,468,122

Profit (loss) attributable to members of the Parent Entity 454,921 - - 454,921

BALANCE AT 30 JUNE 2013 22,623,043 300,000 - 22,923,043


STATEMENT OF CASH FLOWSFor the year ended 30 June 2013

Note 2013$

2012$

2013$

2012$

Cash flows from operating activitiesOperating receipts from customers 8,202,848 9,443,648 2,069,264 2,532,897 Interest and investment management fee receipts 3,641,230 3,496,877 3,379,588 3,649,265 Net receipts from issue of Retirement Village loans and licences 1,003,175 476,508 524,750 157,573 Net GST recovered (paid) (41,876) (71,138) 106,809 48,506 Payments to suppliers and employees (13,777,411) (13,349,177) (6,531,780) (6,656,044)Finance costs (130,240) (218,330) (19,564) (24,012)Income tax reimbursed (paid) 1,331,819 827,844 980,540 978,206

Net cash provided by operating activities 20 229,545 606,232 509,607 686,391

Cash flows from investing activitiesSale (purchase) of investment securities 954,523 661,964 954,523 661,964 Purchase of property, plant and equipment (472,638) (211,351) (435,606) (165,930)Capital expenditure on Retirement Villages (435,705) (3,666,372) (417,870) (2,980,838)Capital expenditure on buildings (301,550) (90,875) (301,550) (90,875)Receipts from sale of Retirement Village buybacks and new units 4,343,220 1,083,396 3,345,380 1,083,396 Receipts from sale of non-current assets 55,942 2,107 55,942 2,107 Sales (purchase) of business (1,287,222) (3,051,088) - 20,000

Net cash provided by (used in) investing activities 2,856,570 (5,272,219) 3,200,819 (1,470,176)

Cash flows from financing activitiesProceeds from borrowing - 139,000 - - Repayment of borrowing (415,003) - - - Loans to subsidiaries - - (1,002,358) (3,955,908)Dividends paid (50,100) (207,266) - -

Net cash provided by (used in) financing activities (465,103) (68,266) (1,002,358) (3,955,908)

Net increase (decrease) in cash held 2,621,012 (4,734,253) 2,708,068 (4,739,693)Cash held at beginning of year 999,935 5,734,188 288,893 5,028,586

Cash held at end of year 2 3,620,947 999,935 2,996,961 288,893



NOTES TO THE FINANCIAL STATEMENTS 30 June 2013


NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

The Financial Statements are General Purpose Financial Statements that have been prepared in accordance with Australian Accounting Standards, including Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board (AASB), the Corporations Act 2001 and the Life Insurance Act 1995.

Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a Financial Report containing relevant and reliable information about transactions, events and conditions to which they apply. Compliance with Australian Accounting Standards ensures that the Financial Statements and Notes also comply with International Financial Reporting Standards (IFRS). Material accounting policies adopted in the preparation of the Financial Statements are presented below and have been consistently applied unless otherwise stated.

The Financial Statements have been prepared on an accruals basis and are based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities.

a Presentation of Financial Statements: Prior to 31 December 2007 APRA Prudential Rule No 47 required that “regulatory financial statements”, separate to the General Purpose Financial Report, be prepared and submitted to APRA. From 1 January 2008 Prudential Rule No 47 was replaced by Life Reporting Standards which apply the same requirement of “annual audited returns”, separate to the General Purpose Financial Report, be prepared and submitted to APRA. Friendly Society Financial Statements for general purpose reporting have been aligned with the requirements of the Australian Accounting Standards as they apply to Life Companies.

The accounting policies have been consistently applied to all years presented.

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

b Principles of Consolidation: The consolidated Financial Statements incorporate the assets, liabilities and results of entities controlled by KeyInvest Ltd at the end of the reporting period. A controlled entity is any entity over which KeyInvest Ltd has the power to govern the financial and operating policies so as to obtain benefits from its activities. In assessing the power to govern, the existence and effect of holdings of actual and potential voting rights are considered.

As at reporting date, the assets and liabilities of all controlled entities have been incorporated into the consolidated Financial Statements as well as their results for the year then ended. Where controlled entities have entered (left) the Consolidated Group during the year, their operating results have been included (excluded) from the date control was obtained (ceased).

A list of controlled entities is contained in Note 5 to the Financial Statements.

In preparing the Financial Statements all inter-group balances and transactions between entities in the Consolidated Group, including any unrealised profits or losses, have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with those adopted by the Parent Entity.

Minority interests, being that portion of the profit or loss and net assets of subsidiaries attributable to equity interests held by persons outside the Group, are shown separately within the Equity section of the consolidated Statement of Financial Position and in the consolidated Statement of Comprehensive Income.

The Parent Entity column represents the amounts that relate to KeyInvest Ltd and its members, the Statutory column represents the amounts in respect of the Life Investment Contract policyholders and the Non-Statutory column represents that component of the Parent Entity not related to its members, commonly referred to as the Management Fund.

Business Combinations: Business combinations occur where control over another business is obtained and results in the consolidation of its assets and liabilities. All business combinations, including those involving entities under common control, are accounted for by applying the purchase method.

The purchase method requires an acquirer of the business to be identified and for the cost of the acquisition and fair values of identifiable assets, liabilities and contingent liabilities to be determined as at acquisition date, being the date that control is obtained. Cost is determined as the aggregate of fair values of assets given, equity issued and liabilities assumed in exchange for control together with costs directly attributable to the business combination. Any deferred consideration payable is discounted to present value using the entity’s incremental borrowing rate.

Goodwill is recognised initially at the excess of cost over the acquirer’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised. If the fair value of the acquirer’s interest is greater than cost, the surplus is immediately recognised in profit or loss.

Non-controlling interest is measured at its proportionate interest in the identifiable net assets of the acquiree.

c Income Tax: The income tax expense (revenue) for the year comprises current income tax expense (income) and deferred tax expense (income).

The current income tax expense is based on the profit for the year adjusted for any non-assessable or disallowed items. It is the tax payable on taxable income and is calculated using tax rates that have been enacted or are substantively enacted by the Statement of Financial Position date. Current tax liabilities (assets) are therefore measured at the amounts expected to be paid to (recovered from) the relevant taxation authority.



NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (cont)

c Income Tax (cont):

Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as well as unused tax losses.

Current and deferred income tax expense (income) is charged or credited directly to equity instead of the profit or loss when the tax relates to items that are credited or charged directly to equity.

Deferred tax is accounted for using the Statement of Financial Position liability method in respect of temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the Financial Statements. Deferred tax assets and liabilities are recognised at the tax rates expected to apply when the asset is realised or the liability settled. Their measurement also reflects the manner in which Management expects to recover or settle the carrying amount of the related asset or liability. Deferred income tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that future tax profits will be available against which the benefits of the deferred tax asset can be utilised.

The amount of benefits brought to account or which may be realised in the future is based on the assumption that no adverse change will occur in income taxation legislation, and the anticipation that the Company will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law.

d Tax Consolidation: KeyInvest Ltd and its wholly owned Australian subsidiaries have formed an income tax Consolidated Group under tax consolidation legislation. Each entity in the Group recognises its own current and deferred tax assets and liabilities. Such taxes are measured using the ‘stand alone taxpayer’ approach to allocation. Current tax liabilities (assets) and deferred tax assets arising from unused tax losses and tax credits in the subsidiaries are immediately transferred to the head entity. The Group notified the Australian Taxation Office that it had formed an income tax Consolidated Group to apply from 1 July 2008. The tax Consolidated Group has entered a tax funding arrangement whereby each company in the Group contributes to the income tax payable by the Group in proportion to their contribution to the Group’s taxable income. Differences between the amounts of net tax assets and liabilities derecognised and the net amounts recognised pursuant to the funding arrangement are recognised as either a contribution by, or distribution to, the head entity.

e Retirement Villages: (Refer Note 9b and Note 10) The Group is involved in the construction and management of Retirement Villages. During acquisition and construction, Retirement Villages will be recognised under Property, Plant and Equipment at cost and tested for impairment. Work in progress represents development and construction and will be held at cost. When units become available for occupancy, Retirement Villages will be reclassified as Investment Property and re-valued annually. Internal administrative costs are expensed in the year in which they are incurred.

The Retirement Villages are re-valued annually as at 30 June on the basis of a discounted cash flow evaluation of the Group’s ongoing interest in the Retirement Villages. These valuations are carried out by Certified Practising Valuers. The increment or decrement resulting from the valuation is added to or deducted from the Retirement Village asset account (Note 9b). The Group’s interest, net of residents’ interests, is shown in Note 9b and the movement in the total increment or decrement resulting from the revaluation is reflected in the Statement of Comprehensive Income.

Long Term Maintenance Funds have been established from resident contributions for the purpose of maintenance, repair, replacement or renovation of large cost items generally with an effective life of more than one year. Capital Replacement Funds have been established from the retention of a percentage of the resident loan amount generally for the purpose of capital improvement, upgrade and maintenance of specific infrastructure.

f Property, Plant and Equipment: Each class of Property, Plant and Equipment is carried at cost or fair value, less where applicable, any accumulated depreciation and impairment losses.

Property: Land and buildings, are shown at their fair value, being the amount for which an asset could be exchanged between knowledgeable willing parties in an arm’s length transaction based on annual valuations by external independent valuers. Changes to fair value are recorded in the Statement of Comprehensive Income.

Plant and Equipment: Assets are measured on a cost basis less accumulated depreciation and accumulated impairment losses, if any. Assets are reviewed for impairment annually by Directors to ensure that the carrying amount is not in excess of the recoverable amount from these assets. Recoverable amounts are determined as the net amounts expected to be recovered through the net cash inflows arising from the assets’ continued use and subsequent disposal. In determining the recoverable amounts expected net cash inflows have been discounted to their present value.

Depreciation of Property, Plant and Equipment: (Refer Note 10) All fixed assets, excluding freehold land, are depreciated at rates deemed to be appropriate to their useful lives to the Group commencing from the time the asset is held ready for use. These rates are:

Class of Asset Straight Line % pa

Buildings 2.5

Office equipment 3.0 to 40.0

Furniture and fittings 1.0 to 18.0 Buildings held for investment purposes are not subject to depreciation for accounting purposes.




g Investment Property: Investment Property comprises a freehold office complex and Retirement Villages. The office is held to generate long term rental yields and the Retirement Villages are held to provide long term yields from deferred management fees. All tenant leases and loan contracts are on an arm’s length basis. Investment Property is carried at fair value, determined annually by independent valuers. Changes to fair value are recorded in the Statement of Comprehensive Income.

h Leases: Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset, but not the legal ownership that is transferred to entities in the Consolidated Group, are classified as finance leases.

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

Leased assets are depreciated on a straight line basis over the shorter of their estimated useful lives or the lease term.

Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are charged as expenses in the periods in which they are incurred.

i Financial Instruments - Recognition: Financial instruments, incorporating financial assets and financial liabilities, are recognised when the entity becomes a party to the contractual provision of the instrument. Trade date accounting is adopted for financial assets that are delivered within timeframes established by marketplace convention.

The Group does not designate any interests in subsidiaries entities as being subject to the requirements of Accounting Standards specifically applicable to financial instruments.

Classification and Subsequent Measurement

Financial instruments are subsequently measured at either fair value, amortised cost using the effective interest rate method or cost. Fair value represents the amount for which an asset could be exchanged or a liability settled, between knowledgeable, willing parties. Where available, quoted prices in an active market are used to determine fair value. In other circumstances, valuation techniques are adopted.

Amortised cost is calculated as: (i) the amount at which the financial asset or financial liability is measured at initial recognition; (ii) less principal repayments; (iii) plus or minus the cumulative amortisation of the difference, if any, between the amount initially recognised and the maturity amount calculated using the effective interest method; and (iv) less any reduction for impairment.

The effective interest method is used to allocate interest income or interest expense over the relevant period and is equivalent to the rate that exactly discounts estimated future cash payments or receipts (including fees, transaction costs and other premiums or discounts) through the expected life (or when this cannot be reliably predicted, the contractual term) of the financial instrument to the net carrying amount of the financial asset or financial liability. Revisions to expected future net cash flows will necessitate an adjustment to the carrying value with a consequential recognition of an income or expense in profit or loss.

The Group does not designate any interests in subsidiaries, associates or joint venture entities as being subject to the requirements of Accounting Standards specifically applicable to financial instruments.

Financial Assets at Fair Value through Profit and Loss: A financial asset is classified in this category if acquired principally for the purpose of selling in the short term or if so designated by Management and within the requirements of AASB 139: Financial Instruments: Recognition and Measurement. Derivatives are also categorised as held for trading. Realised and unrealised gains and losses arising from changes in the fair value of these assets are included in the Statement of Comprehensive Income in the period in which they arise.

Loans and Receivables: Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are stated at amortised cost using the effective interest rate method.

Financial Liabilities: Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost using the effective interest rate method.

Derivative Instruments: Derivative instruments are measured at fair value. Gains and losses arising from changes in fair value are taken to the Statement of Comprehensive Income in the period they arise.

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

Impairment: At each reporting date, the Group assesses whether there is objective evidence that a financial instrument has been impaired. Impairment losses are recognised in the Statement of Comprehensive Income in the period they arise.




j Impairment of Assets: At each reporting date, the Group reviews the carrying values of its tangible and intangible assets to determine whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is compared to the asset’s carrying value. Any excess of the asset’s carrying value over the recoverable amount is immediately expensed to the Statement of Comprehensive Income.

k Interests in Joint Ventures: The Consolidated Group’s share of the assets, liabilities, revenue and expenses of joint venture operations are included in the appropriate items of the consolidated Financial Statements. Details of the Consolidated Group’s interests are shown in Note 6.

The Consolidated Group’s interests in joint venture entities are brought to account using the equity method of accounting in the consolidated Financial Statements.

l Goodwill: Goodwill is initially recorded at the amount by which the purchase price for a business or for an ownership interest in a controlled entity exceeds the fair value attributed to its net assets at date of acquisition. Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses.

m Cash and Cash Equivalents: Cash and cash equivalents include cash on hand, deposits held at call with banks, other short term highly liquid investments with original maturities of three months or less and bank overdrafts. Bank overdrafts are shown within short term borrowing in current liabilities on the Statement of Financial Position.

n Life Business - Disclosure: The Financial Statements recognise the assets, liabilities, income and expenses of the life insurance business conducted by the Group in accordance with AASB 139: Financial Instruments: Recognition and Measurement and AASB 1038: Life Insurance Contracts which apply to investment contracts and assets backing insurance liabilities respectively. These amounts represent the total life business of the Group.

Investment Assets: Investment assets are carried at fair value through profit and loss. Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to determine the fair value of all unlisted securities, including recent arm’s length transactions, reference to similar instruments and option pricing models. Changes in fair values are recognised in the Statement of Comprehensive Income in the financial period in which the changes occur.

Restriction on Assets: Assets held in the Life Funds can only be used within the restrictions imposed under the Life Insurance Act 1995. The main restrictions are that the assets in a fund can only be used to meet the liabilities and expenses of the fund, acquire investments to further the business of the fund or pay distributions when solvency and capital adequacy requirements allow. Policyholders can only receive a distribution when the capital adequacy requirements of the Life Insurance Act 1995 are met.

Policy Liabilities: Life insurance liabilities are measured as the accumulated benefits to policyholders in accordance with AASB 139 and AASB 1038, which apply to investment contracts and assets backing insurance liabilities respectively.

o Employee Benefits: Provision is made for the Group’s liability for employee benefits arising from services rendered by employees to balance date. Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled, plus related on costs. Employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits. In determining the liability, consideration is given to employee wage increases and the probability that the employee may not satisfy vesting requirements. Those cash flows are discounted using market yields on national Government bonds with terms to maturity that match the expected timing of cash flows.

Contributions are made by the Group to employee superannuation funds and are charged as expenses when incurred. Contributions are the percentage of employees’ salaries required under the Superannuation Guarantee Levy Legislation. For 2013 these were 9% (2012: 9%).

p Provisions: Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured.

Provisions are measured using the best estimate of the amounts required to settle the obligation at the end of the reporting period.

q Revenue Recognition: All revenue stated is net of the amount of Goods and Services Tax (GST). All revenue received arises from the operating activities of the Group.

Interest: Interest income is recognised on an accruals basis. The discount on securities such as bills of exchange, being the difference between cost and face value of the security, is recognised progressively over the life of the investment.

Changes in Net Fair Values: Changes in net fair values of investment assets, being the movement from one balance date to the next, are reported in the Statement of Comprehensive Income.

Income Distribution from Trusts: Distributions from investment trusts are recognised within the financial year that the distribution is allocated.

Property Rental: Rental income from tenancy leases is recognised on an accruals basis. Any lease incentives are usually provided via rental holidays or rental discounts. Rental, or maintenance fees, from Retirement Village residents, is brought to account over the period of accommodation.




q Revenue Recognition (cont):

Management Fees: The Parent Entity receives various fees from the Life Investment Contracts. These fees are recognised and brought to account in accordance with the Rules of the respective Benefit Funds and the Constitution.

Commission Revenue: Origination commission arising from loan settlements is brought to account once the provision of service has occurred, generally in the month following settlement.

Income from Sale of Property, Plant and Equipment: The profit or loss on the sale of Property, Plant and Equipment used for operational purposes is recognised upon the sale of the asset.

Retirement Village Unit and Apartment Sales: Revenue on sales of Retirement Village units and apartments are recognised on the execution of a loan contract and receipt of the loan proceeds (refer Note 1e for more details).

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

All other borrowing costs are recognised in the Statement of Comprehensive Income in the period in which they are incurred.

s Goods and Services Tax (GST): Revenue, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Taxation Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of the expense.

Cash flows are presented in the Statement of Cash Flows on a gross basis, except for the GST component of investing and financing activities which are disclosed as operating cash flows.

t Comparative Figures: Where required by Australian Accounting Standards, comparative figures have been adjusted to conform with changes in presentation for the current financial year.

u Critical Accounting Estimates and Judgements: The Directors evaluate estimates and judgements incorporated into the Financial Report based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the Group.

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

Determining whether goodwill is impaired requires an estimation of the value in use of the cash generating units to which goodwill has been allocated. The value in use calculation requires the entity to estimate the future cash flows expected to arise from the cash generating unit and a suitable discount rate in order to calculate present value.

The carrying amount of goodwill at balance date was $3,647,536, details of which are provided in Note 12.

v New Accounting Standards for Application in Future Periods

The AASB has issued a number of new and amended Accounting Standards and Interpretations that have mandatory application dates for future reporting periods, some of which are relevant to the Group. The Group has decided not to early adopt any of the new and amended pronouncements. The Group’s assessment of the new and amended pronouncements that are relevant to the Group but applicable in future reporting periods is set out below:

AASB 9: Financial Instruments (December 2010) and AASB 2010-7: Amendments to Australian Accounting Standards arising from AASB 9 (December 2010). These Standards are applicable retrospectively and include revised requirements for the classification and measurement of financial instruments, as well as recognition and derecognition requirements for financial instruments.

The key changes made to accounting requirements include:

• simplifying the classifications of financial assets into those carried at amortised cost and those carried at fair value; • simplifying the requirements for embedded derivatives; • removing the tainting Rules associated with held to maturity assets; • removing the requirements to separate and fair value embedded derivatives for financial assets carried at amortised cost; • allowing an irrevocable election on initial recognition to present gains and losses on investments in equity instruments that are

not held for trading in other comprehensive income. Dividends in respect of these investments that are a return on investment can be recognised in profit or loss and there is no impairment or recycling on disposal of the instrument;

• requiring financial assets to be reclassified where there is a change in an entity’s business model as they are initially classified based on: (a) the objective of the entity’s business model for managing the financial assets; and (b) the characteristics of the contractual cash flows; and

• requiring an entity that chooses to measure a financial liability at fair value to present the portion of the change in its fair value due to changes in the entity’s own credit risk in other comprehensive income, except when that would create an accounting mismatch. If such a mismatch would be created or enlarged, the entity is required to present all changes in fair value (including the effects of changes in the credit risk of the liability) in profit or loss.




v New Accounting Standards for Application in Future Periods (cont):

These Standards were mandatorily applicable for annual reporting periods commencing on or after 1 January 2013. However, AASB 2012-6: Amendments to Australian Accounting Standards - Mandatory Effective Date of AASB 9 and Transition Disclosures (issued September 2012) defers the mandatory application date of AASB 9 from 1 January 2013 to 1 January 2015. In light of this change to the mandatory effective date, the Group is expected to adopt AASB 9 and AASB 2010-7 for the annual reporting period ending 30 June 2016. Although the Directors anticipate that the adoption of AASB 9 and AASB 2010-7 may have an impact on the Group’s financial instruments, it is impracticable at this stage to provide a reasonable estimate of such impact.

AASB 1053: Application of Tiers of Australian Accounting Standards and AASB 2010-2: Amendments to Australian Accounting Standards arising from Reduced Disclosure Requirements (applicable for annual reporting periods commencing on or after 1 July 2013).

AASB 1053 establishes a revised differential financial reporting framework consisting of two tiers of financial reporting requirements for those entities preparing general purpose financial statements:

• Tier 1: Australian Accounting Standards; and • Tier 2: Australian Accounting Standards - Reduced Disclosure Requirements.

Tier 2 of the framework comprises the recognition, measurement and presentation requirements of Tier 1, but contains significantly fewer disclosure requirements.

Management believes that the Group qualifies for the reduced disclosure requirements for Tier 2 entities. However, it is yet to determine whether to adopt the reduced disclosure requirements.

AASB 10: Consolidated Financial Statements, AASB 11: Joint Arrangements, AASB 12: Disclosure of Interests in Other Entities, AASB 127: Separate Financial Statements (August 2011) and AASB 128: Investments in Associates and Joint Ventures (August 2011) (as amended by AASB 2012-10: Amendments to Australian Accounting Standards - Transition Guidance and Other Amendments), and AASB 2011-7: Amendments to Australian Accounting Standards arising from the Consolidation and Joint Arrangements Standards (applicable for annual reporting periods commencing on or after 1 January 2013).

AASB 10 replaces parts of AASB 127: Consolidated and Separate Financial Statements (March 2008, as amended) and Interpretation 112: Consolidation - Special Purpose Entities. AASB 10 provides a revised definition of control and additional application guidance so that a single control model will apply to all investees. This Standard is not expected to significantly impact the Group’s Financial Statements.

AASB 11 replaces AASB 131: Interests in Joint Ventures (July 2004, as amended). AASB 11 requires joint arrangements to be classified as either “joint operations” (where the parties that have joint control of the arrangement have rights to the assets and obligations for the liabilities) or “joint ventures” (where the parties that have joint control of the arrangement have rights to the net assets of the arrangement).

AASB 12 contains the disclosure requirements applicable to entities that hold an interest in a subsidiary, joint venture, joint operation or associate. AASB 12 also introduces the concept of a “structured entity”, replacing the “special purpose entity” concept currently used in Interpretation 112, and requires specific disclosures in respect of any investments in unconsolidated structured entities. This Standard will affect disclosures only and is not expected to significantly impact the Group’s Financial Statements.

To facilitate the application of AASBs 10, 11 and 12, revised versions of AASB 127 and AASB 128 have also been issued. The revisions made to AASB 127 and AASB 128 are not expected to significantly impact the Group’s Financial Statements.

AASB 13: Fair Value Measurement and AASB 2011-8: Amendments to Australian Accounting Standards arising from AASB 13 (applicable for annual reporting periods commencing on or after 1 January 2013).

AASB 13 defines fair value, sets out in a single Standard a framework for measuring fair value, and requires disclosures about fair value measurement.

AASB 13 requires:

• inputs to all fair value measurements to be categorised in accordance with a fair value hierarchy; and • enhanced disclosures regarding all assets and liabilities (including, but not limited to, financial assets and financial liabilities) to

be measured at fair value.

These Standards are expected to result in more detailed fair value disclosures, but are not expected to significantly impact the amounts recognised in the Group’s Financial Statements.

AASB 119: Employee Benefits (September 2011) and AASB 2011-10: Amendments to Australian Accounting Standards arising from AASB 119 (September 2011) (applicable for annual reporting periods commencing on or after 1 January 2013).

These Standards introduce a number of changes to accounting and presentation of defined benefit plans. The Group does not have any defined benefit plans and so is not impacted by the amendments.



NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (cont) v New Accounting Standards for Application in Future Periods (cont):

AASB 119 (September 2011) also includes changes to:

• require only those benefits that are expected to be settled wholly before 12 months after the end of the annual reporting period in which the employees render the related service to be classified as short term employee benefits. All other employee benefits are to be classified as other long term employee benefits, post-employment benefits or termination benefits, as appropriate; and

• the accounting for termination benefits that require an entity to recognise an obligation for such benefits at the earlier of:

(i) for an offer that may be withdrawn - when the employee accepts; (ii) for an offer that cannot be withdrawn - when the offer is communicated to affected employees; and (iii) where the termination is associated with a restructuring of activities under AASB 137: Provisions, Contingent Liabilities

and Contingent Assets, and if earlier than the first two conditions - when the related restructuring costs are recognised.

These Standards are not expected to significantly impact the Group’s Financial Statements.

AASB 2012-2: Amendments to Australian Accounting Standards - Disclosures - Offsetting Financial Assets and Financial Liabilities (applicable for annual reporting periods commencing on or after 1 January 2013).

AASB 2012-2 principally amends AASB 7: Financial Instruments: Disclosures to require entities to include information that will enable users of their financial statements to evaluate the effect or potential effect of netting arrangements, including rights of set-off associated with the entity’s recognised financial assets and recognised financial liabilities, on the entity’s financial position.

This Standard is not expected to significantly impact the Group’s Financial Statements.

AASB 2012-3: Amendments to Australian Accounting Standards - Offsetting Financial Assets and Financial Liabilities (applicable for annual reporting periods commencing on or after 1 January 2014).

This Standard adds application guidance to AASB 132: Financial Instruments: Presentation to address potential inconsistencies identified in applying some of the offsetting criteria of AASB 132, including clarifying the meaning of “currently has a legally enforceable right of set-off” and that some gross settlement systems may be considered equivalent to net settlement.


AASB 2012-5: Amendments to Australian Accounting Standards arising from Annual Improvements 2009-2011 Cycle (applicable for annual reporting periods commencing on or after 1 January 2013).

This Standard amends a number of Australian Accounting Standards as a consequence of the issuance of Annual Improvements to IFRSs 2009-2011 Cycle by the International Accounting Standards Board, including:

• AASB 1: First-time Adoption of Australian Accounting Standards to clarify the requirements in respect of the application of AASB 1 when an entity discontinues and then resumes applying Australian Accounting Standards;

• AASB 101: Presentation of Financial Statements and AASB 134: Interim Financial Reporting to clarify the requirements for presenting comparative information;

• AASB 116: Property, Plant and Equipment to clarify the accounting treatment of spare parts, stand-by equipment and servicing equipment;

• AASB 132 and Interpretation 2: Members’ Shares in Co-operative Entities and Similar Instruments to clarify the accounting treatment of any tax effect of a distribution to holders of equity instruments; and

• AASB 134 to facilitate consistency between the measures of total assets and liabilities an entity reports for its segments in its interim and annual financial statements.


The Group has not early adopted the above reporting requirements and does not expect these requirements to have any material effect on the Group’s Financial Statements.


2013$

2012$

2013$

2012$

NOTE 2: CASH AND CASH EQUIVALENTS

Cash at bank and in hand 503,837 264,115 453,045 (63,849)Short term money market 3,117,110 735,820 2,543,916 352,742

3,620,947 999,935 2,996,961 288,893 Maturity Analysis0-3 months 3,620,947 999,935 2,996,961 288,893

NOTE 3: OTHER FINANCIAL ASSETS

Available for sale financial assets 755,523 1,384,502 755,523 1,384,502 Held to maturity financial assets 577,970 577,970 577,970 577,970 Other investments - - 2,521,936 2,521,936

1,333,493 1,962,472 3,855,429 4,484,408

a Available for Sale Financial Assets CompriseUnlisted investments at fair value- units in unit trusts 755,523 1,384,502 755,523 1,384,502

Total available for sale financial assets 755,523 1,384,502 755,523 1,384,502

b Held to Maturity Investments Comprise- term deposits 577,970 577,970 577,970 577,970

c Other InvestmentsUnlisted investments at cost - shares in controlled entities- shares in controlled entities - - 2,521,936 2,521,936

Maturity Analysis0-3 months 755,523 1,962,472 3,277,459 4,484,408 3-12 months 577,970 - 577,970 - 1-5 years - - - -

1,333,493 1,962,472 3,855,429 4,484,408

Available for sale financial assets comprise investments in the ordinary issued capital of various entities and units in unit trusts. There are no fixed returns or fixed maturity dates attached to these investments. No intention to dispose of any unlisted available for sale financial assets existed at 30 June 2013.




2013$

2012$

2013$

2012$

NOTE 4: RECEIVABLESLoans to controlled entities - unsecured - - 8,613,950 10,052,581 Fees receivable from Benefit Funds 497,633 520,072 497,633 520,072 Interest receivable 11,706 23,171 11,110 23,171 Prepayments 68,838 43,813 53,666 36,613 Other 455,939 777,604 260,616 541,689

Current receivables 1,034,116 1,364,660 9,436,975 11,174,126

NOTE 5: CONTROLLED ENTITIES 2013 2012Controlled Entities ConsolidatedSubsidiaries of KeyInvest Ltd:Life Events Bond Pty Ltd Australia 100 100KeyInvest Retirement Living Pty Ltd Australia 100 100KeyInvest Gables Pty Ltd Australia 100 100KeyInvest Horsham Pty Ltd Australia 100 100KeyInvest Winzor Pty Ltd Australia 100 100KeyInvest Property Loans Pty Ltd Australia 51.1 51.1Australian Associated Advisers Pty Ltd Australia 51.1 51.1KeyInvest Lending Pty Ltd Australia 51.1 37.7Money Advisers Pty Ltd Australia 51.1 51.1Aussie Unit Trust Australia 51.1 51.1Chiton RV Pty Ltd ATF Chiton Unit Trust Australia 80 **Chiton RV Unit Trust Australia 81 **Chiton RV Develpments Pty Ltd Australia 80 *** Percentage of voting power is in proportion to ownership** not controlled

Country of Incorporation Percentage Owned (%)*




2013$

2012$

2013$

2012$

NOTE 6: INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

Interest in joint venture entities - 2,869,247 - -

- 2,869,247 - -

Interest in Joint Ventures

Total Assets

$

Total Liabilities

$

Net Assets

$

Income

$

Expenditure

$

Profit (Loss)

$

Balance at 30 June 2011 - - - - - -

50 - 50 - - - 3,952,241 1,083,094 2,869,147 2,002 132,981 (130,979)1,083,744 1,083,694 50 - - -

Balance at 30 June 2012 5,036,035 2,166,788 2,869,247 2,002 132,981 (130,979)

- - - - - - - - - - - - - - - - - -

Balance at 30 June 2013 - - - - - -


A controlled entity, KeyInvest Retirement Living Pty Ltd, had a 50% interest in the Chiton RV Joint Venture, whose principal activity is the development of a Retirement Village until 5 April 2013.

Until 5 April 2013 the interest in the Chiton RV Joint Venture had been accounted for in the consolidated Financial Statements using the equity method of accounting. KeyInvest Retirement Living Pty Ltd acquired an additional 30% in this entity on 5 April 2013. From that date the entity became consolidated into the Financial Statements as a subsidiary.

The Consolidated Group's financial interest employed in the joint venture is:

Chiton RV Pty Ltd as trustee for Chiton RV Unit Trust

Chiton RV Pty Ltd as trustee for Chiton RV Unit TrustChiton RV Unit TrustChiton RV Developments Pty Ltd

Chiton RV Unit TrustChiton RV Developments Pty Ltd



NOTE 7: BUSINESS COMBINATIONS

Details of the purchase consideration, the net assets acquired and goodwill are as follows.$

Purchase consideration:Amount paid 991,253Acquisition date fair value of the previously held equity interest 1,689,723

Total purchase consideration 2,680,976

The assets and liabilities recognised as a result of the acquisition are as follows. Fair Value$

Cash and cash equivalents 18,745Receivables 14,632Investment property 2,744,547Property, plant and equipment 4,050,000Payables (2,701)Financial liabilities (3,514,742)

Net identifiable assets acquired 3,310,481

Less: Non-controlling interest (629,505)

Net assets acquired 2,680,976

Acquisition related costs: Acquisition related costs of $88,070 are primarily statutory transaction costs and are included in other expenses in the Statement of Comprehensive Income and in operating cash flows in the Statement of Cash Flow.

Remeasurement of previously held equity interest to its acquisition date fair value: The Group recognised a gain of $62,738 as a result of measuring at fair value its equity interest in the Chiton RV Group held prior to the acquisition date. This gain has been included in other income.

Non-controlling interest: In accordance with the accounting policy set out in Note 1b, the Group has elected to recognise the non-controlling interests at their fair value for this acquisition. The fair value of the non-controlling interest in Chiton RV Group, an unlisted company, was measured after applying an independent valuation of the underlying assets carried out by CBRE Valuations Pty Limited.

Revenue and profit contribution: The acquired business contributed revenues of $262,336 and net losses of $278,273 to the Group for the period from 5 April 2013 to 30 June 2013.

On 5 April 2013 KeyInvest Retirement Living Pty Ltd acquired an additional 30% of the issued capital of Chiton RV Pty Ltd as trustee for Chiton RV Unit Trust, Chiton RV Unit Trust and Chiton RV Developments Pty Ltd (Chiton RV Group), a developer of Retirement Villages. Prior to 5 April 2013, KeyInvest Retirement Living Pty Ltd owned shares and units in Chiton RV Group representing 50% of the voting rights. The acquisition has provided growth in KeyInvest Group's core Retirement Living business.



2013$

2012$

2013$

2012$

NOTE 8: INCOME TAX

a Current Tax Assets 1,447,514 913,862 1,301,408 948,003

b Current Tax Liabilities 84,942 - - -

OpeningBalance

$

Charged toIncome

$

ClosingBalance

$c Deferred Tax Assets and Deferred Tax Liabilities Details

Consolidated Group

Deferred Tax Asset

2012Fair value loss 213,955 (569) 213,386 Investment property revaluation loss 43,392 300,164 343,556 Employee benefit and payables movement 117,762 2,068 119,830

375,109 301,663 676,772

2013Fair value loss 213,386 (97,663) 115,723 Investment property revaluation loss 343,556 22,408 365,964 Employee benefit and payables movement 119,830 1,228,294 1,348,124

676,772 1,153,039 1,829,811

Parent Entity

Deferred Tax Asset

2012Fair value loss 178,258 25,372 203,630 Employee benefit and payables movement 139,652 (2,668) 136,984

317,910 22,704 340,614

2013Fair value loss 203,630 (97,663) 105,967 Employee benefit and payables movement 136,984 1,219,847 1,356,831

340,614 1,122,184 1,462,798




OpeningBalance

$

Charged toIncome

$

ClosingBalance

$

NOTE 8: INCOME TAX (cont)

c Deferred Tax Assets and Deferred Tax Liabilities Details (cont)

Consolidated Group

Deferred Tax Liability

2012Fair value gain (31,323) - (31,323)Investment Property revaluation gain 4,527,886 818,618 5,346,504

4,496,563 818,618 5,315,181

2013Fair value gain (31,323) - (31,323)Investment Property revaluation gain 5,346,504 1,082,360 6,428,864

5,315,181 1,082,360 6,397,541

Parent Entity

Deferred Tax Liability

2012Fair value gain (31,323) - (31,323)Investment Property revaluation gain 4,491,376 820,449 5,311,825

4,460,053 820,449 5,280,502

2013Fair value gain (31,323) - (31,323)Investment Property revaluation gain 5,311,825 1,024,938 6,336,763

5,280,502 1,024,938 6,305,440

Deferred tax assets not brought to account, the benefits of which will only be realised if the conditions for deductibility set out in Note 1c occur 2013: nil (2012: nil).



Parent Entity Non-Statutory Statutory

2013$

2013$

2013$

2013$


d Income Tax ExpenseThe components of tax expense comprise:Current tax (443,985) (565,377) (1,462,837) 897,460 Deferred tax 512,480 485,914 (97,246) 583,160 Under (over) provided prior year 133,245 128,892 128,892 -

201,740 49,429 (1,431,191) 1,480,620

e The prima facie tax on profit from before income tax is reconciled to the income tax as follows:

Profit from operations before income tax expense 670,577 636,044 (976,270) 1,612,314 Inter-group transactions eliminated on consolidation (4,344,771) - (3,420,276) 3,420,276

Less:(Surplus) deficit from revaluation of investment properties 1,200,544 (1,789,411) (1,789,411) - Net capital losses allowed 2,593,559 2,430,989 2,430,989 - Loss (profit) on initial sale of Retirement Village units (105,339) (83,775) (83,775) - Retirement Village licence and construction cost deductions (2,017,032) (1,886,810) (1,886,810) - Net occupancy and business capital cost deductions (231,056) (230,197) (230,197) - Allowable deductions of Life Investment Contracts (net) (2,081,658) (2,081,658) - (2,081,658)Non-assessable and exempt income from Life Investment Contracts (net) (3,223,714) (3,223,714) (1,182) (3,222,532)

Add:Non-deductible expenses 7,916,633 7,888,915 2,491,267 5,397,648 Surplus from Life Investment Contracts assessable 96,097 96,097 96,097 - Retirement Village Residents' Long Term Maintenance (Sinking Fund) surplus (383,227) (158,894) (158,894) - Tax deferred expense (income) (327,129) (763,215) (763,215) - Loss from operations on which there is no tax benefit 2,054,862 - - - Other non-allowable items (258,591) - - -

Taxable income 1,559,755 834,371 (4,291,677) 5,126,048

Tax expense (credit) @ 30% 467,927 250,311 (1,287,504) 1,537,815 Imputation credits (132,942) (71,990) (14,795) (57,195)Under (over) provided prior year (133,245) (128,892) (128,892) -

Income tax expense (credit) 201,740 49,429 (1,431,191) 1,480,620

Consolidated Group




2012$

2012$

2012$

2012$


d Income Tax ExpenseThe components of tax expense comprise:Current tax 545,774 418,903 (875,496) 1,294,399 Deferred tax (15,361) 265,429 797,745 (532,316)Under (over) provided prior year 8,578 839 839 -

538,991 685,171 (76,912) 762,083

e The prima facie tax on profit from before income tax is reconciled to the income tax as follows:

Profit from operations before income tax expense (2,141,007) (2,568,381) (3,071,651) 503,270 Inter-group transactions eliminated on consolidation (2,016,839) - (3,498,772) 3,498,772

Less:(Surplus) deficit from revaluation of investment properties 1,991,390 46,129 46,129 - Net capital losses allowed 3,082,227 2,569,063 2,569,063 - Loss (profit) on initial sale of Retirement Village units (157,990) (157,990) (157,990) - Retirement Village licence and construction cost deductions (1,643,545) (1,583,713) (1,583,713) - Net occupancy and business capital cost deductions (150,801) (147,011) (147,011) - Allowable deductions of Life Investment Contracts (net) (4,020,301) (4,020,301) - (4,020,301)Non-assessable and exempt income from Life Investment Contracts (net) (470,979) (470,979) (1,852) (469,127)

Add:Non-deductible expenses 5,809,180 5,653,565 2,399,697 3,253,868 Surplus from Life Investment Contracts assessable 105,668 105,668 105,668 - Retirement Village Residents' Long Term Maintenance (Sinking Fund) surplus 105,459 74,227 74,227 - Tax deferred expense (income) 2,284,717 3,285,262 3,285,262 - Other non-allowable items (624,491) (171,383) (171,383) -

Taxable income 2,152,688 2,614,156 (152,326) 2,766,482

Tax expense (credit) @ 30% 645,806 784,247 (45,698) 829,945 Imputation credits (98,237) (98,237) (30,375) (67,862)Under (over) provided prior year (8,578) (839) (839) -

Income tax expense (credit) 538,991 685,171 (76,912) 762,083

Consolidated Group



2013$

2012$

2013$

2012$

NOTE 9: INVESTMENT PROPERTY

a Land and BuildingsOpening balance 4,900,000 4,800,000 4,900,000 4,800,000 Additions 47,892 90,876 47,892 90,876 Fair value adjustments 102,108 9,124 102,108 9,124

Closing balance 5,050,000 4,900,000 5,050,000 4,900,000

b Retirement VillagesInvestments in Retirement Villages as at 30 June were:Development and acquisition costs 85,303,383 79,513,183 45,938,591 44,400,060 Add: Revaluation- Group interests 3,793,308 2,695,012 5,209,645 3,708,677 - Residents' interests 350,180 5,129,498 (557,528) 2,904,605

89,446,871 87,337,693 50,590,708 51,013,342 Less: Residents' interests (72,505,655) (70,610,426) (42,290,715) (41,486,075)

Total Net Investment 16,941,216 16,727,267 8,299,993 9,527,267

Total Investment Property 21,991,216 21,627,267 13,349,993 14,427,267

NOTE 10: PROPERTY, PLANT AND EQUIPMENT

a Land and BuildingsFreehold land and buildings 9,439,640 3,992,476 1,983,831 1,983,831 Less: Accumulated depreciation (65,000) (52,000) - - Add: Revaluation 440,000 721,979 440,000 - Less: Accumulated impairment losses (1,208,809) (178,624) - -

8,605,831 4,483,831 2,423,831 1,983,831

b Work-in-ProgressDevelopment at cost - - - -

c Furniture, Equipment and SoftwareAt cost 2,180,055 1,846,651 2,032,612 1,722,660 Less: Accumulated depreciation (1,530,943) (1,341,885) (1,464,298) (1,294,787)

649,112 504,766 568,314 427,873 d Motor Vehicles

At cost 176,614 176,614 79,956 79,956 Less: Accumulated depreciation (104,734) (83,865) (35,099) (22,077)

71,880 92,749 44,857 57,879

Total Property, Plant and Equipment 9,326,823 5,081,346 3,037,002 2,469,583

The 2013 valuations were conducted by a panel of independent valuers including Knight Frank Valuations, Colliers International Consultancy and Valuations Pty Limited and CBRE Valuations Pty Limited. The fair value model is applied to all Investment Property. Values are based on an active liquid market. Retirement Village valuations are carried out using discounted cash flow methodology.




NOTE 10: PROPERTY, PLANT AND EQUIPMENT (cont)

Land andBuildings

$

Work-in-Progress

$

Furniture, Equipment

and Software$

Motor Vehicles

$

Total

$

Consolidated Group

Balance at 30 June 2011 4,430,705 2,548,409 491,124 81,712 7,551,950

Acquisitions - - 164,783 33,490 198,273

(500,799) (3,179,961) - - (3,680,760)Additions 23,570 2,189,892 - - 2,213,462 Disposals - - (2,107) - (2,107)Valuation movement 543,355 (1,558,340) - - (1,014,985)Depreciation expense (13,000) - (149,034) (22,453) (184,487)

Balance at 30 June 2012 4,483,831 - 504,766 92,749 5,081,346

Acquisitions - - 385,633 - 385,633 Acquisition through business combinations 5,549,047 2,352,288 - - 7,901,335

(645,238) (2,303,458) - - (2,948,696)Additions - 1,329,643 - - 1,329,643 Disposals - - (52,230) - (52,230)Valuation movement (768,809) (1,378,473) - - (2,147,282)Depreciation expense (13,000) - (189,057) (20,869) (222,926)

Balance at 30 June 2013 8,605,831 - 649,112 71,880 9,326,823

Parent Entity

Balance at 30 June 2011 1,702,608 729,044 431,658 36,719 2,900,029

Acquisitions - - 132,440 33,490 165,930

(377,858) (1,301,719) - - (1,679,577)Additions 23,570 1,509,209 - - 1,532,779 Disposals - - (2,107) - (2,107)Valuation movement 635,511 (936,534) - - (301,023)Depreciation expense - - (134,118) (12,330) (146,448)

Balance at 30 June 2012 1,983,831 - 427,873 57,879 2,469,583

Acquisitions - - 362,182 - 362,182

- - - - - Additions - - - - - Disposals - - (52,230) - (52,230)Valuation movement 440,000 - - - 440,000 Depreciation expense - - (169,511) (13,022) (182,533)

Balance at 30 June 2013 2,423,831 - 568,314 44,857 3,037,002

Reclassified as Investment Property on completion of development

Movements in carrying amounts for each class of property, plant and equipment during the financial year:


Movement in Carrying Amounts





2013$

2012$

2013$

2012$

NOTE 11: LIFE INVESTMENT CONTRACTS

Supersaver Bond Fund 44,323,587 48,971,543 44,323,587 48,971,543 Life Events Bond Fund 4,268,335 3,531,021 4,268,335 3,531,021 Pre-Arranged Funeral Fund 47,036,888 50,273,554 47,036,888 50,273,554 KeyInvest Funeral Bond 68,078,090 61,082,571 68,078,090 61,082,571 Income Security Fund 5,729,355 6,812,248 5,729,355 6,812,248

Policyholder balances and unallocated benefits 169,436,255 170,670,937 169,436,255 170,670,937 Other policyholder liabilities 1,323,789 1,608,840 1,323,789 1,608,840

Total policyholder liabilities 170,760,044 172,279,777 170,760,044 172,279,777

Actuarial Report


The effective date of the actuarial report on the policy liabilities and solvency reserves is 30 June 2013. The actuarial report for KeyInvest Ltd was prepared by Mr Bruce Watson, FIAA, and was dated 26 September 2013. The actuarial report indicates that

Watson is satisfied as to the accuracy of the data upon which the policy liabilities have been determined.Mr



NOTE 11: LIFE INVESTMENT CONTRACTS (cont)

Policyholder assets and liabilities 2013Supersaver Bond Fund

Life Events Bond Fund

Pre-Arranged Funeral

Fund

KeyInvest Funeral

Fund

Income Security

Fund

Total Life Investment Contracts

$ $ $ $ $ $Cash and cash equivalents 900,913 466,196 3,543,558 1,631,484 698,333 7,240,484 Financial assets 43,704,946 3,798,090 43,576,366 66,362,539 4,990,701 162,432,642 Loans and advances 90,720 - - - - 90,720 Receivables 250,978 7,501 299,049 366,795 31,149 955,472 Current tax benefit - - 1,840 - 11,489 13,329 Deferred tax assets - 26,884 - - 513 27,397

Total assets 44,947,557 4,298,671 47,420,813 68,360,818 5,732,185 170,760,044

Payables 62,871 5,394 345,777 136,389 2,830 553,261 Current tax liability 451,997 1,674 - 123,626 - 577,297 Deferred tax liability 109,102 23,268 38,148 22,713 - 193,231 Policyholder liabilities 42,746,119 4,268,335 46,293,993 66,872,285 5,629,053 165,809,785 Unallocated policyholder benefits 1,577,468 - 742,895 1,205,805 100,302 3,626,470

Total liabilities 44,947,557 4,298,671 47,420,813 68,360,818 5,732,185 170,760,044

Net assets - - - - - -

Policyholder income and expenses 2013Supersaver Bond Fund



Fund

KeyInvest Funeral

Fund

Income Security

Fund


$ $ $ $ $ $Investment income 2,816,718 340,530 3,360,759 3,964,697 221,266 10,703,970 Investment expenses (97,053) - (64,130) (98,181) (13,831) (273,195)Management fees (802,778) (43,008) (1,344,065) (1,122,005) (108,957) (3,420,813)Allocated to policyholders (1,314,205) (224,040) (1,906,676) (1,816,081) (136,646) (5,397,648)Profit (loss) before tax 602,682 73,482 45,888 928,430 (38,168) 1,612,314 Income tax benefit (expense) (723,221) (73,482) (185,244) (510,123) 11,450 (1,480,620)Profit (loss) after tax (120,539) - (139,356) 418,307 (26,718) 131,694 Transfer from (to) other funds - - - - - - Unallocated policyholder benefits at beginning of the year 1,698,007 - 882,251 787,498 127,020 3,494,776 Unallocated policyholder benefits at end of the year 1,577,468 - 742,895 1,205,805 100,302 3,626,470

Movement of policyholder liabilities 2013

Value of policyholder liabilities at beginning of the year 47,273,536 3,531,021 49,391,303 60,295,073 6,685,228 167,176,161 Deposits 1,026,269 1,273,492 33,325 8,020,066 8,507 10,361,659 Allocation to policyholders 1,314,205 224,040 1,906,676 1,816,081 136,646 5,397,648 Withdrawals (6,867,891) (760,218) (5,037,311) (3,258,935) (1,201,328) (17,125,683)Transfer from (to) other funds - - - - - -

Value of policyholder liabilities at end of the year 42,746,119 4,268,335 46,293,993 66,872,285 5,629,053 165,809,785

Policyholder liabilities and unallocated benefits 2013

Policyholder liabilities and unallocated benefits 44,323,587 4,268,335 47,036,888 68,078,090 5,729,355 169,436,255

Solvency requirements for the Life Investment Contracts were met at all times during the financial year. As at 30 June 2013 the Life Investment Contracts had investment assets in excess of policyholder liabilities of $3,626,470 (2012: $3,494,776).



NOTE 11: LIFE INVESTMENT CONTRACTS (cont)

Policyholder assets and liabilities 2012Supersaver Bond Fund



Fund

KeyInvest Funeral

Fund

Income Security

Fund


$ $ $ $ $ $Cash and cash equivalents 781,996 935,627 3,424,099 837,807 790,434 6,769,963 Financial assets 48,606,932 2,531,338 46,923,725 60,153,411 5,971,074 164,186,480 Loans and advances 90,720 - - - - 90,720 Receivables 216,174 2,827 257,822 282,354 55,839 815,016 Deferred tax assets 41,167 69,802 61,540 244,537 552 417,598

Total assets 49,736,989 3,539,594 50,667,186 61,518,109 6,817,899 172,279,777

Payables 81,742 6,216 370,602 115,292 5,421 579,273 Current tax liability 683,704 2,086 23,030 320,246 230 1,029,296 Deferred tax liability - 271 - - - 271 Policyholder liabilities 47,273,536 3,531,021 49,391,303 60,295,073 6,685,228 167,176,161 Unallocated policyholder benefits 1,698,007 - 882,251 787,498 127,020 3,494,776

Total liabilities 49,736,989 3,539,594 50,667,186 61,518,109 6,817,899 172,279,777

Net assets - - - - - -

Policyholder income and expenses 2012Supersaver Bond Fund



Fund

KeyInvest Funeral

Fund

Income Security

Fund


$ $ $ $ $ $Investment income 2,622,438 (26,577) 1,967,564 2,623,401 340,575 7,527,401 Investment expenses (100,335) - (67,227) (88,265) (15,664) (271,491)Management fees (867,866) (35,016) (1,440,598) (1,032,207) (123,085) (3,498,772)Allocated to policyholders (980,727) 32,491 (864,298) (1,240,442) (200,892) (3,253,868)Profit (loss) before tax 673,510 (29,102) (404,559) 262,487 934 503,270 Income tax benefit (expense) (659,146) 29,102 100,072 (231,819) (292) (762,083)Profit (loss) after tax 14,364 - (304,487) 30,668 642 (258,813)Transfer from (to) other funds - - - - - - Unallocated policyholder benefits at beginning of the year 1,683,643 - 1,186,738 756,830 126,378 3,753,589 Unallocated policyholder benefits at end of the year 1,698,007 - 882,251 787,498 127,020 3,494,776

Movement of policyholder liabilities 2012

Value of policyholder liabilities at beginning of the year 50,296,669 2,615,120 53,943,080 56,210,530 7,365,563 170,430,962 Deposits 931,596 1,213,221 35,488 6,308,585 30,692 8,519,582 Allocation to policyholders 980,727 (32,491) 864,298 1,240,442 200,892 3,253,868 Withdrawals (4,935,456) (264,829) (5,451,563) (3,464,484) (911,919) (15,028,251)Transfer from (to) other funds - - - - - -

Value of policyholder liabilities at end of the year 47,273,536 3,531,021 49,391,303 60,295,073 6,685,228 167,176,161

Policyholder liabilities and unallocated benefits 2012

Policyholder liabilities and unallocated benefits 48,971,543 3,531,021 50,273,554 61,082,571 6,812,248 170,670,937

Solvency requirements for the Life Investment Contracts were met at all times during the financial year. As at 30 June 2012 the Life Investment Contracts had investment assets in excess of policyholder liabilities of $3,494,776 (2011: $3,753,589).



2013$

2012$

2013$

2012$

NOTE 12: INTANGIBLE ASSETS

Goodwill 4,579,045 4,583,285 - - Less: Accumulated impairment losses and disposals (931,509) (931,509) - -

Total intangibles 3,647,536 3,651,776 - -

Reconciliation of Goodwill:Balance at the beginning of the year 3,651,776 4,177,471 - - Additions - 15,762 - - Disposals (4,240) (28,293) - - Less: Current year impairment losses - (513,164) - -

Closing carrying value at the end of the year 3,647,536 3,651,776 - -

Goodwill is allocated to a cash generating unit which is based on the Company's lending services 3,647,536 3,651,776 - -

2013$

2012$

2013$

2012$

NOTE 13: PAYABLES

Accrued expenses 121,397 177,880 114,351 170,945 Trade creditors 700,539 776,625 615,471 705,164 Construction costs - Retirement Villages - 39,194 - 39,194 Creditors and accrued expenses 589,903 183,759 789,242 293,553 Retirement Villages Residents' Long Term Maintenance Funds and Capital Replacement Funds liability 489,691 474,624 237,377 215,231

1,901,530 1,652,082 1,756,441 1,424,087 Maturity AnalysisCurrent 1,411,839 1,177,458 1,519,064 1,208,856 Non-current 489,691 474,624 237,377 215,231

1,901,530 1,652,082 1,756,441 1,424,087



Impairment Tests for GoodwillGoodwill acquired through business combinations is allocated to Cash Generating Units (CGU's), with 100% being allocated to the Lending Services division. The recoverable amount of the CGU's are determined based on value in use by reference to the discounted net cash flows expected to be derived from the continuing use of the asset. The future cash flows are based on projections of financial budgets approved by management covering a five year period.

Discount RateThe discount rate applied to future cash flows for 2013 is 10% (2012: 10%). The discount rate reflects the Lending Services division's weighted average cost of capital including the risks specific to the CGU.



2013$

2012$

2013$

2012$

NOTE 14: FINANCIAL LIABILITIES

Bank loan - secured 3,800,435 702,119 - - Lease liability 76,728 160,020 31,697 101,409

3,877,163 862,139 31,697 101,409 Maturity AnalysisCurrent 643,788 787,350 31,697 26,620 Non-current 3,233,375 74,789 - 74,789

3,877,163 862,139 31,697 101,409

Long TermEmployee Benefits

$

UnearnedIncome

$

Dividends

$

Total

$

NOTE 15: PROVISIONS

Consolidated Group

Balance at 30 June 2011 471,231 3,990,164 14,658 4,476,053

Additional provisions raised during the year 197,015 1,000,000 - 1,197,015 Amounts used (161,240) (557,354) (9,405) (727,999)

Balance at 30 June 2012 507,006 4,432,810 5,253 4,945,069

Additional provisions raised during the year 268,830 - - 268,830 Amounts used (215,541) (471,445) (582) (687,568)

Balance at 30 June 2013 560,295 3,961,365 4,671 4,526,331

Parent Entity

Balance at 30 June 2011 416,535 3,990,164 - 4,406,699

Additional provisions raised during the year 152,078 1,000,000 - 1,152,078 Amounts used (142,649) (557,354) - (700,003)

Balance at 30 June 2012 425,964 4,432,810 - 4,858,774

Additional provisions raised during the year 222,092 - - 222,092 Amounts used (185,476) (471,445) - (656,921)

Balance at 30 June 2013 462,580 3,961,365 - 4,423,945


Bank loans are secured by a registered first mortgage over freehold property and a registered charge over the assets and undertakings of two Subsidiary Companies.



2013$

2012$

2013$

2012$

NOTE 15: PROVISIONS (cont)

Maturity Analysis of Total ProvisionsCurrent 732,293 892,476 668,963 849,027 Non-current 3,794,038 4,052,593 3,754,982 4,009,747

4,526,331 4,945,069 4,423,945 4,858,774

The number of employees at year end 41 41 35 34

NOTE 16: RESERVES

CompanyCapital Replacement Reserve 300,000 300,000 300,000 300,000

This reserve recognises amounts set aside for future capital replacement costs in the Group's Retirement Villages.





2013$

2013$

2013$

2013$

NOTE 17: REVENUE

RevenueInterest revenue 7,158,238 7,144,908 71,232 7,073,676 Distribution from non-related entities 334,004 334,004 38,571 295,433 Dividends from related entities - - - - Dividends from non-related entities - - - - Commission from lending activities 6,278,239 23,480 23,480 - Deferred management fees and development profit on sale of Retirement Village loans and licences 1,224,014 724,025 724,025 - Surplus from revaluation of investment properties 2,452,363 1,940,961 1,940,961 - Management fees 3,420,813 3,420,813 3,420,813 -

20,867,671 13,588,191 6,219,082 7,369,109

Other IncomeRealised gains (losses) on investments 204,167 204,167 (151,028) 355,195 Unrealised gains (losses) on investments 3,305,210 3,305,210 325,544 2,979,666 Accommodation fees from Retirement Village residents 1,447,836 898,345 898,345 - Rental income 573,835 528,748 528,748 - Other 876,635 791,619 791,619 -

6,407,683 5,728,089 2,393,228 3,334,861

27,275,354 19,316,280 8,612,310 10,703,970

ExpensesAuditor's remuneration:- Audit fees 75,951 56,715 56,715 - - Taxation and advisory services - - - - Actuarial fees 77,902 77,902 77,902 - Depreciation 222,945 179,566 179,566 - Regulatory supervision fees 15,145 15,145 15,145 - Personnel costs:- Salaries, wages and on costs 2,956,973 1,934,885 1,934,885 - - Employee benefits 268,831 214,997 214,997 - - Superannuation contributions 296,419 212,137 212,137 - Commissions 4,769,980 286,672 286,672 - Impairment from revaluations 3,652,907 2,592,539 2,592,539 - Goodwill impairment - - - - Management fees 3,420,813 3,420,813 - 3,420,813 Investment management fees 273,195 273,195 - 273,195 Life Investment Contracts distribution to policyholders 5,397,648 5,397,648 - 5,397,648 Outsourced arrangements 1,002,296 1,002,296 1,002,296 - Rates and taxes 986,062 567,727 567,727 - Marketing 526,017 263,880 263,880 - Other operating expenses 2,661,693 2,184,119 2,184,119 -

26,604,777 18,680,236 9,588,580 9,091,656

Share of net loss of joint venture entities - - - -

26,604,777 18,680,236 9,588,580 9,091,656

Profit (loss) before tax and profit (loss) of minority interests 670,577 636,044 (976,270) 1,612,314

Consolidated Group




2012$

2012$

2012$

2012$

NOTE 17: REVENUE (cont)

RevenueInterest revenue 9,150,915 9,131,916 90,298 9,041,618 Distribution from non-related entities 423,013 423,013 79,516 343,497 Dividends from related entities - 171,387 171,387 - Dividends from non-related entities - - - - Commission from lending activities 6,338,466 32,295 32,295 - Deferred management fees and development profit on sale of Retirement Village loans and licences 880,498 561,563 561,563 - Surplus from revaluation of investment properties 678,918 678,918 678,918 - Management fees 3,498,772 3,498,772 3,498,772 -

20,970,582 14,497,864 5,112,749 9,385,115

Other IncomeRealised gains (losses) on investments 843,149 843,149 (190,708) 1,033,857 Unrealised gains (losses) on investments (2,976,143) (2,976,143) (84,572) (2,891,571)Accommodation fees from Retirement Village residents 1,361,631 821,165 821,165 - Rental income 601,839 573,039 573,039 - Other 935,684 831,703 831,703 -

766,160 92,913 1,950,627 (1,857,714)

21,736,742 14,590,777 7,063,376 7,527,401

ExpensesAuditor's remuneration:- Audit fees 59,561 57,897 57,897 - - Taxation and advisory services 22,087 17,087 17,087 - Actuarial fees 58,156 58,156 58,156 - Depreciation 184,504 141,035 141,035 - Regulatory supervision fees 15,152 15,152 15,152 - Personnel costs:- Salaries, wages and on costs 3,006,391 2,067,668 2,067,668 - - Employee benefits 237,646 151,595 151,595 - - Superannuation contributions 278,403 209,892 209,892 - Commissions 4,566,720 260,678 260,678 - Impairment from revaluations 2,670,308 3,304,110 3,304,110 - Goodwill impairment 513,164 - - - Management fees 3,498,772 3,498,772 - 3,498,772 Investment management fees 271,491 271,491 - 271,491 Life Investment Contracts distribution to policyholders 3,253,868 3,253,868 - 3,253,868 Outsourced arrangements 1,633,813 1,073,551 1,073,551 - Rates and taxes 500,231 459,202 459,202 - Marketing 454,614 279,327 279,327 - Other operating expenses 2,521,889 2,039,677 2,039,677 -

23,746,770 17,159,158 10,135,027 7,024,131

Share of net loss of joint venture entities 130,979 - - -

23,877,749 17,159,158 10,135,027 7,024,131

Profit (loss) before tax and profit (loss) of minority interests (2,141,007) (2,568,381) (3,071,651) 503,270

Consolidated Group



NOTE 18: RELATED PARTY DISCLOSURE

a Key Management Personnel Compensation

2013$

2012$

2013$

2012$

Salary and fees 1,555,226 1,370,533 1,366,324 1,184,186 Performance related remuneration - 45,000 - 35,000 Non-monetary benefits 9,118 8,105 - 96

Short term employee benefits 1,564,344 1,423,638 1,366,324 1,219,282

Superannuation benefits 139,427 131,045 123,346 115,422

Total Benefits 1,703,771 1,554,683 1,489,670 1,334,704

b Transactions with Related Parties

Key Management PersonnelMr I J Campbell is a Director of a company that receives payments for information technology supplies provided to the Group. 5,036 49,925 5,036 49,925

Mr D L Stillwell is a Director of a human resource management consultancy that receives fees for human resources services provided to the Group. 13,828 41,980 13,828 41,980

Mr T Sarah is a Director of a construction company that receives payments for construction services provided to the Group. 272,059 - 272,059 -

Mr F Wilkie is a Director of a business whose assets were purchased by KeyInvest Lending Pty Ltd. 310,682 29,438 - -

Other Related PartiesManagement and Business Services Fees paid by Australian Associated Advisers Pty Ltd, a related party of KeyInvest Ltd. 39,602 49,013 39,602 49,013

Management and Business Services Fees paid by KeyInvest Lending Pty Ltd, a related party of KeyInvest Ltd. 29,947 39,080 29,947 39,080

Project Management and Business Services Fees paid by Chiton RV, a related party of KeyInvest Ltd. 58,779 - 58,779 -

Identification of Related Parties' Ultimate Parent Entity

The key management personnel of the consolidated entity consisted of the following 13 (2012: 13) positions: Managing Director, Chief Financial Officer, Company Secretary, General Manager Business Services, Manager Accounting Services, Chief Executive Officer (KeyInvest Property Loans Pty Ltd) and Non Executive Directors (7).

The Parent Entity is KeyInvest Ltd which is incorporated in Australia.

Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated.


KeyInvest Ltd's Director fees are set by members at the Annual General Meeting. Non Executive Directors receive annual fees of $49,500, Chairman $120,417 and the Deputy Chairman $82,500. In recognition of the additional workload resulting from participating on various Board Committees, Non Executive Directors are paid $5,500 annually for undertaking the role of Chairman of a Committee. Non Executive Directors of KeyInvest Property Loans Pty Ltd receive annual fees of $19,586 and the Chairman $24,474. Superannuation Guarantee Levy obligations for Non Executive Directors are additional to Directors' fees paid.

Total remuneration of the key management personnel is set out below:



NOTE 19: ECONOMIC DEPENDENCE

2013$

2012$

2013$

2012$

NOTE 20: CASH FLOW INFORMATION

a Reconciliation of Cash Flow from Total Comprehensive Income for the YearTotal comprehensive income for the year 337,143 (2,421,185) 454,921 (2,994,739)Cash flows excluded from profit attributable to operating activities- Investing and financing activities 1,046,065 (334,443) (394,420) (321,527)Non-cash flows in profit (loss)- Depreciation 222,926 184,487 182,533 146,448 - Impairment (revaluation) of investment property (976,671) 851,139 (1,789,411) (254,894)- Impairment (revaluation) of property, plant and equipment (186,342) 1,014,985 (186,342) 301,023 - Impairment of investment in subsidiary companies - - 2,440,989 2,579,063 - Impairment of goodwill - 513,164 - - - Net (gain) loss on disposal of property, plant and equipment 55,942 2,107 55,942 2,107 Changes in assets and liabilities, net of the effects of purchase and disposal of subsidiaries- Decrease (increase) in debtors 318,351 (150,149) 298,517 (167,950)- Increase (decrease) in creditors 57,464 (137,047) 332,358 43,491 - Increase (decrease) in current tax liability 12,253 (48,797) - - - Decrease (increase) in current tax asset (207,299) 103,549 (353,405) 103,549 - Increase (decrease) in deferred tax liability 1,120,908 851,664 1,024,938 820,449 - Decrease (increase) in deferred tax asset (1,153,039) (301,663) (1,122,184) (22,704)- Increase (decrease) in provisions 53,289 35,775 36,616 9,429 - Increase (decrease) in unearned income (471,445) 442,646 (471,445) 442,646

Cash flow from operations 229,545 606,232 509,607 686,391

b Loan Facilities

Loan facilities 8,555,000 3,300,000 2,500,000 2,500,000 Amount utilised (3,800,435) (702,119) - -

4,754,565 2,597,881 2,500,000 2,500,000

Arrangements between these parties are on normal commercial terms and conditions.

The Group has economic dependency on Corporate Information Management Pty Ltd for the provision of information technology services in relation to the Group's Benefit Fund membership system and on Pennley Pty Ltd as trustee for the Pennley Unit Trust trading as Choice Aggregation Services relating to aggregation systems provided for mortgage broking services.

The loan facilities comprise three loans; a $0.8m line of credit, a $5.255m fixed term loan maturing December 2014 and a $2.5m fixed term loan maturing May 2015. Interest rates on all facilities are variable.




NOTE 21: FINANCIAL RISK MANAGEMENT

a

Insurance contracts (Statutory Funds) as defined in AASB 4: Insurance Contracts are exempted from disclosure requirements under AASB 7: Financial Instruments Disclosures. Financial risk management disclosures in this Note relate to the Group's financial instruments only.

Financial Risk Management Policies: The Group complies with the APRA Prudential Standard - Capital Adequacy (LPS 110) which prescribes specific reserves to be established to meet a range of adverse but reasonably possible conditions including the requirement that the Group be able to meet its obligations in respect of any business it carries on that is not life insurance business as those obligations fall due.

The Group's financial instruments consist mainly of deposits with banks and local money markets, short term investments, listed shares, unlisted unit trusts, accounts receivable and payable.

The main purpose of non-derivative financial instruments is to raise finance for Group operations. The Group does not have any derivative instruments at 30 June 2013.

Price Risk - Equity: The Group's exposure to changes in the price and volatility of individual equities and equity indices affect the value of investments in financial assets held by the Group. This risk is primarily managed by investment diversification with different businesses within the Group operating across different markets. For further details on equity price risk refer to Note 21d.

Interest Rate: Interest rate risk is the risk that the value of financial assets will fluctuate due to movements in interest rate and credit markets. The Group mitigates its exposure to interest rate risk by maintaining predominantly liquid financial assets and limited exposure to fixed interest loans. Interest rate risk also refers to the risk to earnings and capital arising from movements in interest rates in respect of borrowings. At 30 June 2013 the Group had borrowings of $3,800,435 (2012: $702,119). For further details on interest rate risk refer to Note 21d.

Investment Risk Management: On a regular basis the Management Investment Committee assesses and evaluates financial risk exposure and investment management strategies in the context of the most recent economic conditions and forecasts.

Management's overall risk management strategy seeks to assist the Group in meeting its strategic goals and financial targets, whilst minimising potential adverse effect on financial performance.

The Management Investment Committee operates under the policies approved by the Board of Directors and reports regularly to the Board. Risk Management policies are approved and reviewed by the Board on a regular basis. These include liquidity, market and credit risk policies.

Financial Risk Exposures and Management: The main risks the Group is exposed to through the financial instruments are liquidity risk, market risk and credit risk.

Liquidity Risk: Liquidity risk is the risk that the Group is unable to promptly meet its obligations as they fall due.

The Group manages liquidity risk by monitoring forecast cash flows modelled on a 12 month timeframe and applying limits to concentration of illiquid assets and counterparties. Non-committed capital is assessed regularly to determine the liquidity profile.

Market Risk: Market risk is the risk that the value of assets of the Group will decline as a result of changes in market conditions. The Group is exposed to the following risks:



NOTE 21: FINANCIAL RISK MANAGEMENT (cont)

2013$

2012$

2013$

2012$

ReceivablesAA- rated counterparties 5,244 715 5,244 715 Counterparties not rated 48,404 843,873 320,148 600,758 Internal receivable from Benefit Funds 497,633 520,072 497,633 520,072

Total 551,281 1,364,660 823,025 1,121,545


Credit Risk: Credit risk is the risk of counterparty default resulting in financial loss to the Group. The maximum exposure of the Group to credit risk, at balance date, to assets that have been recognised in the Balance Sheet, is the carrying amount, net of any allowance for impairment of those assets.

There are no amounts of collateral held as security at 30 June 2013.

The Group's credit risk arises from exposure to deposits with financial institutions. The Management Investment Committee, which reports to the Board, reviews credit risk regularly taking into account rating quality and liquidity of counterparties.

The majority of the Group's short term deposits are held with APRA regulated financial institutions. Unlisted available for sale financial assets are not rated by external credit agencies. These are reviewed regularly to ensure that credit exposure is minimised.

The table reflects the credit risk of the Group's receivables.




b

Financial Instruments Fixed interest rate

1 year or less

$

Fixed interest rate

1-5 years

$

Fixed interest rate

5 years

$

Variable interest rate

$

Non-interest bearing

$

Total

$Financial AssetsCash assets - - - 3,620,947 - 3,620,947 Term deposits 577,970 - - - - 577,970 Unlisted share trusts - - - - 755,523 755,523 Receivables - - - - 1,034,116 1,034,116

Total Financial Assets 577,970 - - 3,620,947 1,789,639 5,988,556

Financial LiabilitiesPayables - - - - 1,901,530 1,901,530 Bank loans secured - - - - 3,800,435 3,800,435 Lease liability - - - - 76,728 76,728

Total Financial Liabilities - - - - 5,778,693 5,778,693


1 year or less

$

Fixed interest rate

1-5 years

$

Fixed interest rate

5 years

$


$


$

Total

$Financial AssetsCash assets - - - 2,996,961 - 2,996,961 Term deposits 577,970 - - - - 577,970 Unlisted share trusts - - - - 755,523 755,523 Shares in controlled entities - - - - 2,521,936 2,521,936 Loans to controlled entities - - - - 8,613,950 8,613,950 Receivables - - - - 823,025 823,025

Total Financial Assets 577,970 - - 2,996,961 12,714,434 16,289,365

Financial LiabilitiesPayables - - - - 1,756,441 1,756,441 Lease liability - - - - 31,697 31,697


2013

Financial Instruments Composition and Maturity Analysis: The tables below reflect the undiscounted contractual settlement terms for financial instruments of a fixed period of maturity, as well as Management's expectations of the settlement period for all other financial instruments. For this reason, the amounts may not reconcile to the Statement of Financial Position.

Consolidated Group2013

Parent Entity




b


1 year or less

$

Fixed interest rate

1-5 years

$

Fixed interest rate

5 years

$


$


$

Total

$Financial AssetsCash assets - - - 999,935 - 999,935 Term deposits 577,970 - - - - 577,970 Unlisted share trusts - - - - 1,384,502 1,384,502 Receivables - - - - 1,364,660 1,364,660

Total Financial Assets 577,970 - - 999,935 2,749,162 4,327,067

Financial LiabilitiesPayables - - - - 1,652,082 1,652,082 Bank loans secured - - - - 702,119 702,119 Lease liability - - - - 160,020 160,020



1 year or less

$

Fixed interest rate

1-5 years

$

Fixed interest rate

5 years

$


$


$

Total

$Financial AssetsCash assets - - - 288,893 - 288,893 Term deposits 577,970 - - - - 577,970 Unlisted share trusts - - - - 1,384,502 1,384,502 Shares in controlled entities - - - - 2,521,936 2,521,936 Loans to controlled entities - - - - 10,052,581 10,052,581 Receivables - - - - 1,121,545 1,121,545

Total Financial Assets 577,970 - - 288,893 15,080,564 15,947,427

Financial LiabilitiesPayables - - - - 1,424,087 1,424,087 Lease liability - - - - 101,409 101,409


2012

Financial Instruments Composition and Maturity Analysis: The tables below reflect the undiscounted contractual settlement terms for financial instruments of a fixed period of maturity, as well as Management's expectations of the settlement period for all other financial instruments. For this reason, the amounts may not reconcile to the Statement of Financial Position.

Consolidated Group2012

Parent Entity




c

Carrying Amount

$

Net Fair Value

$

Carrying Amount

$

Net Fair Value

$

Consolidated Group

Financial AssetsAvailable for sale financial assets at fair value 755,523 755,523 1,384,502 1,384,502 Held to maturity financial assets 577,970 577,970 577,970 577,970 Receivables 1,034,116 1,034,116 1,364,660 1,364,660

Total Financial Assets 2,367,609 2,367,609 3,327,132 3,327,132

Financial LiabilitiesPayables 1,901,530 1,901,530 1,652,082 1,652,082 Bank loan secured 3,800,435 3,800,435 702,119 702,119 Lease liability 76,728 76,728 160,020 160,020

Total Financial Liabilities 5,778,693 5,778,693 2,514,221 2,514,221

Parent Entity

Financial AssetsAvailable for sale financial assets at fair value 755,523 755,523 1,384,502 1,384,502 Held to maturity financial assets 577,970 577,970 577,970 577,970 Receivables 823,025 823,025 1,121,545 1,121,545

Total Financial Assets 2,156,518 2,156,518 3,084,017 3,084,017

Financial LiabilitiesPayables 1,756,441 1,756,441 1,424,087 1,424,087 Lease liability 31,697 31,697 101,409 101,409

Total Financial Liabilities 1,788,138 1,788,138 1,525,496 1,525,496

Net Fair Values: The net fair values of listed investments have been valued at the quoted market bid price at balance date adjusted for transaction costs expected to be incurred. For other assets and other liabilities the net fair value approximates their carrying value. No financial assets and financial liabilities are readily traded on organised markets in standardised form other than listed investments. Financial assets where the carrying amount exceeds net fair values in 2013: nil (2012: nil) have not been written-down as the Group intends to hold these assets to maturity.

The aggregate net fair values and carrying amounts of financial assets and financial liabilities are disclosed in the Statement of Financial Position and in the Notes to the Financial Statements. Aggregate net fair values and carrying amounts of financial assets and financial liabilities at balance date:

2013$

2012$




d Sensitivity Analysis

2013$

2012$

2013$

2012$

Movementin Equity Price

%

Unlisted Australian unit trusts +10 75,552 138,450 75,552 138,450

Unlisted Australian unit trusts -10 (75,552) (138,450) (75,552) (138,450)

2013$

2012$

2013$

2012$

Change inInterest Rate

%

Financial AssetsCash at bank and in hand +2 10,077 5,282 9,061 (1,277)Short term money market +2 62,342 14,716 50,878 7,055 Held to maturity financial assets +2 11,559 11,559 11,559 11,559

Cash at bank and in hand -2 (10,077) (5,282) (9,061) 1,277 Short term money market -2 (62,342) (14,716) (50,878) (7,055)Held to maturity financial assets -2 (11,559) (11,559) (11,559) (11,559)

Financial LiabilitiesBank loan secured -2 76,009 14,042 - -

Bank loan secured +2 (76,009) (14,042) - -

Equity Price Risk Sensitivity Analysis: The table below indicates the equity instruments to which the Group had exposure at 30 June. The effect on the Statement of Comprehensive Income and the fair value of equity instruments, due to a reasonably probable change in equity prices, and the resulting change in the fair value of equity instruments, with all other variables held constant, is as follows:

Interest Rate Sensitivity Analysis: The Group has performed a sensitivity analysis relating to the exposure to interest rate risk at balance date. This sensitivity analysis demonstrates the effect on the current year results and equity which could result from a change in this risk. At 30 June, the effect on profit and equity as a result of changes in the interest rate, with all other variables remaining unchanged would be as follows:

Sensitivityof Profit (before tax) and Fair Value of Equity Instrument

Sensitivity of profit and equity (before tax)





NOTE 22: CAPITAL MANAGEMENT

Fund Net Assets Member Balances and Unallocated Surpluses

Deductions from Capital

Base

Capital BaseAll Tier 1

Prescribed Capital Amount

Capital Surplus

2013$

2013$

2013$

2013$

2013$

2013$

Management Fund 22,923,043 - (1,716,000) 21,207,043 (10,000,000) 11,207,043 Supersaver Bond Fund 44,323,587 (44,323,587) - - - - Life Events Bond Fund 4,268,335 (4,268,335) - - - - Pre-Arranged Funeral Fund 47,036,888 (47,036,888) - - - - KeyInvest Funeral Bond 68,078,090 (68,078,090) - - - - Income Security Fund 5,729,355 (5,729,355) - - - -

Measurement of Capital Base and Capital Adequacy as per APRA Prudential Standard - Capital Adequacy LPS 110

The Management Fund Capital Adequacy Multiple is 2 times the Prescribed Capital Amount.

KeyInvest Ltd is a public company, limited by shares and guarantee. No shares have been issued. The guarantee acts as both the means of membership of KeyInvest Ltd and the means of limiting the members' liability. The Group's debt and capital includes financial liabilities supported by financial assets.

Management effectively manages the Group's capital within the APRA Prudential Standard - Capital Adequacy (LPS 110) which became effective 1 January 2013. The Standard requires the Board to ensure that the Group maintains an adequate level and quality of capital commensurate with the scale, nature and complexity of its business and risk profile, such that it is able to meet its obligations under a wide range of circumstances.

Management controls the capital of the Group in order to ensure that the Group can fund its operations and continue as a going concern. There have been no changes in the strategy adopted by management to control the capital of the Group since the prior year. At 30 June 2013 the Group had borrowings of $3,800,435 (2012: $702,119).



2013$

2012$

2013$

2012$

NOTE 23: CAPITAL AND LEASING COMMITMENTS

a Capital Expenditure Commitments

Capital expenditure commitments contracted for

Construction of Retirement Villages - 370,969 - 370,969 Replacement of lifts 399,982 - 399,982 -

399,982 370,969 399,982 370,969

PayableNot later than 12 months 399,982 370,969 399,982 370,969 Between 12 months and 5 years - - - - Greater than 5 years - - - -

399,982 370,969 399,982 370,969

b Finance Lease Commitments

Payable - minimum lease paymentsNot later than 12 months 76,728 85,231 31,697 26,620 Between 12 months and 5 years - 74,789 - 74,789 Greater than 5 years - - - -

76,728 160,020 31,697 101,409

c Joint Venture

Capital commitments contracted for arising from interest in joint venture:Construction of Retirement Village - 705,916 - -

PayableNot later than 12 months - 705,916 - - Between 12 months and 5 years - - - - Greater than 5 years - - - -

- 705,916 - -

NOTE 24: COMPANY DETAILS

The registered office of the Group is KeyInvest Building, 49 Gawler Place, Adelaide South Australia 5000.The principal place of business is KeyInvest Building, 49 Gawler Place, Adelaide South Australia 5000.

The Group's joint venture interests terminated on 5 April 2013 when the Group increased its ownership of the entity to 81%.


The Group's lease commitments are comprised of motor vehicle leasing commencing in 2008 for five years, computer equipment leases commencing 2012 for one year. Lease payments are monthly in advance.


DIRECTORS’ DECLARATION


In the Directors’ opinion:

(a) the consolidated Financial Statements of KeyInvest Ltd and its controlled entities are in accordance with the Corporations Act 2001, including:

(i) giving a true and fair view of the financial position of the company and consolidated group as at 30 June 2013 and of its performance, as represented by the results of its operations and cash flows for the year ended on that date; and

(ii) complying with the Australian Accounting Standards and the Corporations Regulations 2001, and

(b) there are reasonable grounds to believe that KeyInvest Ltd will be able to pay its debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the Board of Directors.

On behalf of the Board of Directors.

Dr Roger N Sexton Chairman

Date: 30 September 2013

AUDITOR’S REPORT


COMPANY INFORMATION


KeyInvest Ltd ABN 74 087 649 474 AFSL 240667 Registered Office Level 5, 49 Gawler Place Adelaide SA 5000 Communications PO Box 3340 Rundle Mall SA 5000 t 08 8213 1100 f 08 8231 4079 e [email protected] www.keyinvest.com.au Appointed Actuary Brett & Watson Pty Ltd ABN 65 060 568 676 Auditor Edwards Marshall Chartered Accountants ABN 38 238 591 759

Our Commitment to You

We are Genuine, Responsive and Successful in everything we do. These core values define how we help our

members achieve their goals.

We are committed to looking after the interests of our members to help them achieve their long term financial

goals and enjoy a comfortable and successful future.

We believe that our corporate and social responsibilities are essential to our long term success and that they

should complement our corporate aims.

We invest in our people to ensure they have the skills and training to deliver the best possible advice and

services to our members.

BOARD OF DIRECTORS

Back row L-R: Marcus La Vincente, Donny Walford, Geoff Vogt and Tim Sarah

Front row L-R: Ian Campbell (Managing Director), Roger Sexton AM (Chairman) and Daryl Stillwell (Deputy Chairman)

Front Cover: Chiton Retirement Living (www.chiton.com.au) KeyInvest’s innovative, sustainable retirement village on South Australia’s Fleurieu Peninsula has modern homes uniquely designed to optimise warming winter sunlight and minimise summer heat gain. Solar energy and hot water supply, convenient underground tanks for rainwater harvesting, double glazed windows and high levels of insulation provide a dramatic reduction in living costs and a level of comfort only intelligent design can provide. Private outdoor living areas with external shading create beautiful indoor/outdoor relationships with the 70 hectares of native gardens, wetlands, walking trails and wildlife surrounding Chiton. This is the future of retirement living.

ANNUAL REPORT 2012/13

For more information visit keyinvest.com.au facebook.com/keyinvest twitter.com/key_invest 1300 658 904

ANNUAL REPORT 2012/13 - KeyInvest › uploads › files › Annual_Report_12_13.pdf · KeyInvest...

Documents

Transcript of ANNUAL REPORT 2012/13 - KeyInvest › uploads › files › Annual_Report_12_13.pdf · KeyInvest...