AUSTRALIAN TIMESHARE & HOLIDAY OWNERSHIP - ATHOC

AUSTRALIAN TIMESHARE & HOLIDAY OWNERSHIP COUNCIL LIMITED

ABN 58 065 260 095

FINANCIAL REPORT

FOR THE YEAR ENDED 30 JUNE 2012

PAGE

Directors' Report 1 - 3

Auditor's Independence Declaration 4

Statement of Comprehensive Income 5

Statement of Financial Position 6

Statement of Changes in Equity 7

Statement of Cash Flows 8

Notes to the Financial Statements 9 - 20

Directors' Declaration 21

Independent Auditor's Report 22 - 23

ABN 58 065 260 095

CONTENTS

FINANCIAL REPORT



Directors

Ramy Filo Craig WoodBarry Robinson Charisse Cox

Jennifer Burns Stephanie Kewming

Carole Smith Joseph Hickman

Ivan Hill Kevin Sharp (appointed 11/9/2011)

Martyn Rix Stuart Ockendon (resigned 11/9/2011)

Principal Activities

Strategy and Objectives

Mission Statement-

-

-

Short and long term objectives of the entity

Strategy for achieving our objectives

How our activities assisted in achieving the entity’s objectives

Charisse Cox was the appointed Company Secretary for the year. Details of her professional qualifications are

listed below in the Information about Directors.

The principal activity of the company in the course of the financial year was to unite the timeshare industry and

advocate the needs and interests of the timeshare industry. No significant change in the nature of these

activities occurred during the year.


ABN 58 065 260 095

The names of the directors in office at any time during or since the end of the year are:

DIRECTORS' REPORT

The directors present their report on the company for the financial year ended 30 June 2012, and report in

accordance with a resolution of the directors as follows:

Directors have been in office since the start of the financial year to the date of this report unless otherwise

stated.

Laura Duesbury (Alternate Director for

Craig Wood)

Andrew Shields (Alternate Director for

Barry Robinson)

Foster a high standard of ethics and adherence to industry best practice amongst our Members and to

maintain good standing with all stakeholders.

Continually promote the benefits of the industry and to protect the goodwill of Members and consumers.

Assist all Members to achieve growth and profitability in an ever-changing business environment.

To be the leading voice for the Timeshare and Holiday Ownership Industry in the region with Governments

(local, state and federal), consumers and the general public.

To represent, unite and advance the timeshare and holiday ownership industry in Australia through the provision

of professional services, advocacy and lobbying programs thereby increasing industry and public awareness of

the timeshare and holiday ownership product and promoting a positive community understanding of the industry

as a whole. To ensure that members abide by the Industry Code of Practice and work within the parameters of

the regulatory environment.

Working closely with the membership to identify specific issues; Regular meetings with Regulatory bodies;

Monitor industry compliance; Conferences, seminars and training day to help educate industry staff and board;

Promote the industry through various Tourism Bodies Nationally; Lobby Government at all levels; Profile the

industry in media at all opportunities.

Positive relationships with Regulators and a new Code of Practice agreed with ASIC; Continued reduced cooling

off period; Resale benefits for sold out resorts; Annual compliance report provided; Good attendance for

conference/training provisions provided; ATHOC Board members and GM on Tourism Body Committees

increasing profile of industry sector.

Through issues raised by the regulators and the outcome of those issues as well as feedback from Regulators;

Number of complaints attracted by the industry overall; attendance numbers for events; member feedback;

timing of events versus planned; number of media articles and increase profile of industry; Value proposition for

members.

How the entity measures its performance, including any key performance indicators used by the entity

Page 1


Review of Operations

Significant Changes in the State of Affairs

Matters Subsequent to the End of the Financial Year

Information about the Directors

Ramy Filo, Vice President

Carole Smith, Treasurer

Charisse Cox, Company Secretary

Ivan Hill

Joseph Hickman

Jennifer Burns

Craig Wood

Executive Director Asia-Pacific for Interval International. 28 years experience in Asia-Pacific in the hospitality

industry holding senior management positions with Shangri-La, Westin and Conrad Hotels in Asia. Over 20

years in the vacation ownership industry with Hilton Grand Vacations, RCI and for the last 10 years, Interval.

There were no significant changes in the state of affairs of the company during the financial year.

Martyn Rix

CEO and Managing Director of Wyndham Vacation Resorts Asia Pacific - with Club Resorts in 23 locations and

almost 30 years in Hotel Management and Timeshare in Australia, Asia, New Zealand and China.

Stephanie Kewming

Principal of Monad Pacific Management, a New Zealand timeshare management company.

Chairman and founding member of the New Zealand Holiday Ownership Council. Over 25 years experience in

resort, hotel and timeshare management.

Manager and director Eastcoast Vacations Pty Ltd. 20 years industry experience with a certificate 3 in business

management.

Managing Director Korora Bay Village Ltd with over 20 years industry experience in timeshare exchange and

resort management.

CEO of Accor Vacation Club. Over 20 years experience in the vacation ownership industry at the most senior

level. Over the last 16 years has been exclusively involved in branded vacation clubs, managing operations in 8

countries across Asia, including 13 years for Marriott Vacation Club and over 4 years with Accor.

The profit of the company for the year ended 30 June 2012 after providing for income tax amounted to $27,803

(2011 loss: ($1,989)).

No matters or circumstances have arisen since the end of the financial year that have significantly affected or

may significantly affect the operations of the company, the results of those operations or the state of affairs of

the company in the years subsequent to this financial year.

Particulars of Directors’ qualifications, experience and special responsibilities as at the date of this report, are as

follows:

Barry Robinson, President

ABN 58 065 260 095

DIRECTORS' REPORT (CONTINUED)

Member of Silver Sands Resort committee since 1989 and served as chairperson for seven years. Now serves

as the General Manager of the Silver Sands Timeshare Club and overseas the total running of this independent

Resort. Ivan has been on the ATHOC committee for more than ten years and was involved with the committee

that originally formed the ATHOC organisation. Director for the ATHOC Foundation Limited.

Bachelor of Mechanical Engineering. Fellow of the Australian Institute of Company Directors. CEO of the

Classic Group of Companies and director of nine timeshare resorts/clubs. Involved in all aspects of timeshare

including sales, exchange and resort management. Past president of ATHOC for 8 years. Director of ATHOC

Foundation Limited.

JP (qualified), Diploma Hospitality Management & Tourism Operations Management. Fellow of the Australian

Institute of Company Directors. Over 25 years timeshare management experience. Managing Director of

Classic Leisure Pty Ltd trading as Classic Holidays. Responsible for managing the day to day operations of 16

resorts/clubs within the group.

Managing Director - Group RCI Pacific. Vice Chairman of New Zealand Holiday Ownership Council.

25 years experience in the timeshare industry in Australia, New Zealand and Fiji. Member of the original

steering committee for the formation of ATHOC. Director of ATHOC Foundation Limited.

Page 2


Information about the Directors (cont)

Stuart Ockendon (resigned 11/9/2011)

Kevin Sharp (Appointed 11/9/2011)

Andrew Shields (Alternate Director for Barry Robinson)

Laura Duesbury, (Alternate Director for Craig Wood)

Meetings of Directors

Name

Barry Robinson

Carole Smith

Charisse Cox

Ramy FiloMartyn Rix

Ivan Hill

Stephanie Kewming

Joseph Hickman

Jennifer Burns

Craig WoodKevin Sharp

Auditors Independence Declaration

BARRY ROBINSONPresident

Signed at Cairns, September 2012

6

7

Signed in accordance with a resolution of the Board of Directors of Austraian Timeshare and Holiday Ownership

Council Ltd.

Laura Duesbury (Alternate Director for Craig Wood)

Senior Council Compliance (BA,LLB & MA) - with Wyndham Vacation Resorts South Pacific Ltd. Wyndham has

resorts in 23 locations in Australia, New Zealand and Fiji. Admitted as a Barrister to the High Court of Australia

since 1997 and Solicitor in Queensland since 2000.

During the financial year, 7 meetings of the company's directors were held. The number of meetings each

director of the company attended is as follows:

Number of Meetings

Attended

Legal Counsel, BA LLB.

Admitted as a solicitor to the Supreme Court of NSW and High Court of Australia. With Accor since 2010,

previously with Clayton Utz in Sydney.

The Lead Auditor's Independence Declaration under Section 307C of the Corporations Act 2001 is set out on

page 4 and forms part of the directors' report for the year ended 30 June 2012.

Andrew Shields (Alternate Director for Barry Robinson)

6

7

7

7

6

6 6

7

6 5

7 7

6

5

3

7

6

7

DIRECTORS' REPORT (CONTINUED)

7

5

ABN 58 065 260 095

Has worked in the Timeshare Industry since 1988 throughout Australia, Europe and Asia and has spent the past

8 years with ICE Asia Pacific.

Came from the hotel industry to holiday ownership some 25 years ago. Has managed several resorts and held

multiple executive positions in both Australia and Indonesia within the industry. CEO of ICE vacations for the

past 11 years.

Stuart Ockenden 1 0

Number of Meetings

Held while a Director

6

4

7

6

Page 3

Crowe Horwath Brisbane is a member of Crowe Horwath International, a Swiss verein (Crowe Horwath). Each member firm of Crowe Horwath is a separate and independent legal entity. Crowe Horwath Brisbane and its affiliates are not responsible or liable for any acts or omissions of Crowe Horwath or any other member of Crowe Horwath and specifically disclaim any and all responsibility or liability for acts or omissions of Crowe Horwath or any other Crowe Horwath member. © 2011 Crowe Horwath Brisbane Liability Limited by a scheme approved under Professional Standards Legislation other than for the acts or omissions of financial services licensees.

Crowe Horwath Brisbane ABN 79 981 227 862 Member Crowe Horwath International Level 16, 120 Edward Street Brisbane QLD 4000 Australia GPO Box 736 Brisbane QLD 4001 Australia Tel: +61 7 3233 3555 Fax: +61 7 3233 3567 www.crowehorwath.com.au

A WHK Group Firm

Auditor's Independence Declaration under Section 307C of the Corporations Act 2001 to the directors of Australian Timeshare & Holiday Ownership Council Limited

I declare that to the best of my knowledge and belief during the year ended 30 June 2012 there have been:

i. no contraventions of the auditor independence requirements as set out in the Corporations Act

2001 in relation to the audit; and

ii. no contraventions of any applicable code of professional conduct in relation to the audit.

Crowe Horwath Brisbane

Vanessa de Waal

Partner

Signed at Brisbane, September 2012

Page 4

NOTE 2012 2011

$ $

REVENUE

Membership fees 165,642 156,211

Training income 9,328 4,508

Conference and function income 155,932 130,627

Interest received 27,802 26,756

Other income - 2,084

TOTAL REVENUE 358,704 320,186

EXPENSES

Admin and other expenses 50,216 36,710

Conference and Function Costs 62,166 61,795

Depreciation expenses 3,328 3,549

Employee benefits expenses 156,054 164,318

Leasing and premises costs 36,205 34,634

Professional Services 20,303 15,477

RG 146 training and compliance costs 2,629 1,147

Research expenses - 4,545

TOTAL EXPENSES 330,901 322,175

Surplus/(Loss) before income tax 2 27,803 (1,989)

Income tax expense 3 - -

SURPLUS/(LOSS) FOR THE YEAR ATTRIBUTABLE TO MEMBERS 27,803 (1,989)

Other comprehensive income for the year - -

27,803 (1,989)

The above statement of comprehensive income should be read in conjunction with the accompanying notes.


STATEMENT OF COMPREHENSIVE INCOME


TOTAL COMPREHENSIVE INCOME/(LOSS) FOR THE YEAR

ATTRIBUTABLE TO MEMBERS

Page 5

NOTE 2012 2011

CURRENT ASSETS $ $

Cash and cash equivalents 4 50,239 120,023

Trade and other receivables 5 27,970 52,951

Financial assets 6 450,000 380,000

Other current assets 7 27,375 15,154

TOTAL CURRENT ASSETS 555,584 568,128

NON-CURRENT ASSETS

Property, plant and equipment 8 9,133 12,777

TOTAL NON-CURRENT ASSETS 9,133 12,777

TOTAL ASSETS 564,717 580,905

CURRENT LIABILITIES

Trade and other payables 9 51,383 99,495

Professional Services 10 10,958 9,517

TOTAL CURRENT LIABILITIES 62,341 109,012

NON-CURRENT LIABILITIES

Long-term provisions 10 15,064 12,383

TOTAL NON-CURRENT LIABILITIES 15,064 12,383

TOTAL LIABILITIES 77,405 121,395

NET ASSETS 487,313 459,510

EQUITY

Retained earnings 487,313 459,510

TOTAL EQUITY 487,313 459,510

The above statement of financial position should be read in conjunction with the accompanying notes.

AS AT 30 JUNE 2012

STATEMENT OF FINANCIAL POSITION


Page 6

STATEMENT OF CHANGES IN EQUITY

Retained

Earnings Total

$ $

Balance at 1 July 2010 461,499 461,499

Total comprehensive income:

Loss for the year (1,989) (1,989)

Other comprehensive income - -

Total comprehensive income/(loss) for the year (1,989) (1,989)

Transactions with owners in their capacity as owners - -

Balance at 30 June 2011 459,510 459,510

Balance at 1 July 2011 459,510 459,510

Total comprehensive income:

Surplus for the year 27,803 27,803

Conference and Function Costs

Total comprehensive income for the year 27,803 27,803

Transactions with owners in their capacity as owners - -

Professional ServicesBalance at 30 June 2012 487,313 487,313

The above statement of changes in equity should be read in conjunction with the accompanying notes.



Page 7

STATEMENT OF CASH FLOWS

NOTE 2012 2011

Inflows Inflows

(Outflows) (Outflows)

$ $

CASH FLOWS FROM OPERATING ACTIVITIES

Receipts from customers 348,799 360,484

Interest received 40,112 18,080

Payments to suppliers and employees (375,894) (310,676)

GST paid (12,801) (12,537)

NET CASH FROM OPERATING ACTIVITIES 11 216 55,351

CASH FLOWS FROM INVESTING ACTIVITIES

Investment in available-for-sale financial assets (70,000) (80,000)

Payments for property, plant and equipment - (3,178)

NET CASH FLOWS USED IN INVESTING ACTIVITIES (70,000) (83,178)

NET CASH FLOWS FROM FINANCING ACTIVITIES - -

Net decrease in cash and cash equivalents held (69,784) (27,827)

Cash and cash equivalents at the beginning of the year 120,023 147,850

CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 4 50,239 120,023

The above statement of cash flows should be read in conjunction with the accompanying notes.



Page 8

NOTE 1 - STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

●

Statement of Compliance


NOTES TO THE FINANCIAL STATEMENTS


Reporting Entity

The financial report is presented in Australian dollars.

Reporting Basis and Conventions

The financial report of Australian Timeshare & Holiday Ownership Council Limited (the company) for the year

ended 30 June 2012 was authorised for issue in accordance with a resolution of the directors on September

2012. The Board of Directors have the power to amend the financial report after issue.

The financial report is a general purpose financial report, which has been prepared in accordance with the

requirements of the Corporations Act 2001 , Australian Accounting Standards and other authoritative

pronouncements of the Australian Accounting Standards Board.

The financial report complies with International Financial Reporting Standards (IFRS) as issued by the

International Accounting Standards Board.

The company is an unlisted public company limited by guarantee incorporated and domiciled in

Australia. The financial report covers the company as an individual entity.

The company primarily represents and acts as an advocate for the timeshare industry in Australia.

Basis of Preparation

Critical Accounting Estimates and Judgements

The estimates and judgements incorporated into the financial report are based on historical experiences and

the best available current information on current trends and economic data, obtained both externally and

The preparation of the financial report in conformity with Australian Accounting Standards requires management

to make judgements, estimates and assumptions that effect the application of policies and the reported amounts

of assets, liablities, revenue and expenses.

● Key Estimates — Impairment

the best available current information on current trends and economic data, obtained both externally and

within the company. The estimates and judgements made assume a reasonable expectation of future

events but actual results may differ from these estimates.

The company assesses impairment at each reporting date by evaluating conditions specific to the company

that may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the

asset is determined. Value-in-use calculations performed in assessing recoverable amounts incorporate a

number of key estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates

are recognised in the period in which the estimate is revised if the revision effects only that period, or in the period

of the revision and future periods if the revision affects both current and future periods. There were no key

adjustments during the year which required accounting estimates and judgements.

The financial statements have been prepared on an accruals basis and are 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.

Page 9




NOTE 1 - STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(a) Property, plant and equipment

Plant and equipment

Plant and equipment are measured on the cost basis.

Subsequent costs

Depreciation

The depreciation rates used for each class of depreciable assets are:

The depreciable amount of all fixed assets including building and capitalised lease assets, but excluding freehold

land, is depreciated on a straight-line basis over their useful lives to the company commencing from the time the

asset is held ready for use.

The following is a summary of the material accounting policies adopted by the company in the preparation of the

financial statements. The accounting policies have been consistently applied, unless otherwise stated.

The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the

recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net

cash flows which will be received from the assets employment and subsequent disposal. The expected net cash

flows have not been discounted to their present values in determining recoverable amounts.

Each class of property, plant and equipment is carried at cost or fair value less, where applicable, any

accumulated depreciation and impairment losses.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate,

only when it is probable that future economic benefits associated with the item will flow to the company and the

cost of the item can be measured reliably. All other repairs and maintenance are charged to the statement of

comprehensive income during the financial period in which they are incurred.

The depreciation rates used for each class of depreciable assets are:

Class of Asset Depreciation Rate

Furniture & Equipment 7.5% - 75%

(b) Income tax

The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date. An

asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is

greater than its estimated recoverable amount.

Deferred tax is accounted for using the liability method in respect of temporary differences arising between the tax

bases of assets and liabilities and their carrying amounts in the financial report. No deferred income tax will be

recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no

effect on accounting or taxable profit or loss.

Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or

liability is settled. Deferred tax is credited in the statement of comprehensive income except where it relates to

items that may be credited directly to equity, in which case the deferred tax is adjusted directly against equity.

Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available

against which deductible temporary differences 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 law.

Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains or

losses are included in the statement of comprehensive income in the period in which they arise.

The charge for current income tax expense is based on the profit/(loss) for the year adjusted for any non-

assessable or disallowed items. It is calculated using tax rates that have been enacted or are substantively

enacted at the reporting date.

Page 10





(b) Income tax (continued)

(c) Employee entitlements

(d) Cash and cash equivalents

(e) Financial instrumentsRecognition

Provision is made for the company’s liability for employee entitlements arising from services rendered by

employees to reporting date. Employee benefits expected to be settled within one year together with entitlements

arising from wages and salaries, annual leave and sick leave which will be settled after one year, have been

measured at the amounts expected to be paid when the liability is settled, plus related on-costs. Other 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.

No provision for employee's entitlements to sick leave has been made or considered necessary, as the amount

expected to be taken in future periods will not be greater than entitlements which are expected to accrue in those

periods.

Contributions are made by the company to employee superannuation funds and are charged as expenses when

incurred.

Financial instruments are initially measured at fair value on trade date, which includes transaction costs, when the

related contractual rights or obligations exist. Subsequent to initial recognition these instruments are measured as

Because of the principal of mutuality, only income arising from non-member activities is subject to income tax.

The company is able to identify all non-member income.

Cash and cash equivalents includes 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.

Financial assets at fair value through profit and loss

Loans and receivables

Held-to-maturity investments

Available-for-sale financial assets

Financial liabilities

Fair value

Available-for-sale financial assets include any financial assets not included in the above categories. Available-for-

sale financial assets are reflected at fair value. Unrealised gains and losses arising from changes in fair value are

taken directly to equity.

Non-derivative financial liabilities are recognised at amortised cost, comprising original debt less principal

payments and amortisation.

Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied

to determine the fair value for all unlisted securities, including recent arm’s length transactions, reference to

similar instruments and option pricing models.

related contractual rights or obligations exist. Subsequent to initial recognition these instruments are measured as

set out below.

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.

These investments have fixed maturities, and it is the company’s intention to hold these investments to maturity.

Any held-to-maturity investments held by the company are stated at amortised cost using the effective interest

rate method.

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: Recognition and Measurement of

Financial Instruments. 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.

Page 11





(e) Financial instruments (continued)Impairment

(f) Impairment of assets

(g) Revenue

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

financial assets.

At each reporting date, the company reviews the carrying value of tangible and intangible assets to determine

whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable

amount of the asset, being the higher of the asset's fair value less costs to sell and value in use, is compared to

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

the statement of comprehensive income.

At each reporting date, the company assesses whether there is objective evidence that a financial instrument has

been impaired. In the case of available-for-sale financial instruments, a prolonged decline in the value of the

instrument is considered to determine whether an impairment has arisen. Impairment losses are recognised in the

statement of comprehensive income in the period in which they arise. Where it is not possible to estimate the

recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating

unit to which the asset belongs.

Sponsorship fees are recognised when the commitment to received the fees have been established.

Revenue is measured at the fair value of consideration received or receivable, and is recognised when the

amount of revenue is reliably measured and it is probably that economic benefits will flow to the company.

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

All revenue is stated net of the amount of goods and services tax.

(h) Goods and Services Tax (GST)

(i) Trade and other receivables

(j) Leases

(k) Provisions

(l) Trade creditors and accruals

(m) Comparative figures

Provisions are recognised when the company 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.

A liability is recorded for goods and services received prior to reporting date, whether invoiced or not. Trade

creditors are settled in accordance with supplier payment terms.

Where required by Accounting Standards comparative figures have been adjusted to conform with changes in

presentation for the current financial year.

Lease payments for operating leases, where substantially all risks and benefits remain with the lessor, are

charged as expenses in the periods in which they are incurred as this represents the pattern of benefits derived

from the leased assets. Lease incentives under operating leases are recognised as a liability and amortised on a

straight-line basis over the life of the lease term.

Trade receivables, which generally have 31 day terms, are recognised at fair value. Collectability of trade

receivables is reviewed on an ongoing basis.

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST

incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part

of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the

statement of financial position are shown inclusive of GST.

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.

Page 12





(n) New Accounting Standards and Interpretations

•

• AASB 13: Fair value measurement: AASB 13 replaces the existing IFRS guidance on fair value

measurement and disclosure (applicable for annual reporting periods commencing 1 January 2013). It

applies whenever another standard permits or requires the use of fair value measurements. It sets out a

fair value hierarchy for such measurements: Level 1 – quoted prices in active markets for identical assets

and liabilities, which can be accessed at the measurement date. Level 2 – inputs other than quoted

market prices included within Level 1, which are observable for the asset or liability, either directly or

indirectly. Level 3 – unobservable inputs for the asset or liability. There are also extensive disclosure

requirements relating to each of the three levels within the hierarchy.

Certain new accounting standards and interpretations have been published that are not mandatory for

January 2012 reporting periods. The company's assessment of the impact of the relevant new standards

and interpretations is set out below.

AASB 9: Financial Instruments and AASB 2009-11: Amendments to Australian Accounting Standards

arising from AASB 9 (applicable for annual reporting periods commencing 1 January 2013). AASB 9:

Financial Instruments addresses the classification and measurement of financial assets. The standard is

not applicable until 1 January 2013 but is available for early adoption. The company is yet to assess the

full impact of the new standard however, initial indications are that the standard is not expected to have

any impact on the company's financial statements.

Page 13




2012 2011

NOTE 2 - PROFIT/(LOSS) BEFORE INCOME TAX $ $

Loss before income tax has been determined after:

Expenses

Depreciation expenses 3,328 3,549

Rental expense on operating leases

- minimum lease payments 33,005 30,677

Auditors' Remuneration

- Audit or review of financial report 3,317 3,440

- Assistance with financial report preparation 1,950 1,950

Superannuation expense 12,336 12,373

NOTE 3 - INCOME TAX

8,341 (597)

Adjustment for tax effect of:

- Amounts excluded under principal of mutuality (4,743) (4,096)

- Deferred tax assets not brought to account (3,598) 4,693 - -

The prima facie tax on surplus/(loss) before income tax is reconciled to the income

tax expense is as follows:

Prima facie tax payable on surplus/(loss) before income tax at 30%:

Tax losses 62,152 49,728

Potential tax benefit 18,645 14,918

Temporary differences

Provisions 26,022 21,900

Potential tax benefit 7,807 6,570 Total deferred tax benefits not brought to account 26,452 21,488

NOTE 4 - CASH AND CASH EQUIVALENTS

Cash on hand 250 250

Cash at bank 49,989 119,773

50,239 120,023

Reconciliation of cash

Cash and cash equivalents 50,239 120,023

Cash at the end of the financial year as shown in the statement of cash flows is

reconciled to items in the statement of financial position as follows:

Deferred Tax Assets not brought to account, the benefits of which will only be

realised if the conditions for deductibility of tax losses set out in Note 1 occur based

on corporate tax rate of 30% (2011: 30%).

Cash at bank and cash on deposit earns interest at the current variable and short-

term deposit rates. The company holds all funds with Westpac Banking

Corporation.

Page 14




2012 2011

NOTE 5 - TRADE AND OTHER RECEIVABLES $ $

Current

Trade debtors 23,738 30,477

Other receivables 4,232 22,474

27,970 52,951

NOTE 6 - FINANCIAL ASSETS

Current

Held to maturity investments- Term deposits 450,000 380,000

NOTE 7 - OTHER ASSETS

Current

Prepayments and deposits 27,375 15,154

NOTE 8 - PROPERTY, PLANT AND EQUIPMENT

The company by its nature and location has a concentration of credit risk in that the

majority of its trade debtors are due from customers in Australia operating in or

associated with the timeshare industry.

Plant and Equipment, at cost 45,218 47,483

Less accumulated depreciation (36,085) (34,706)

9,133 12,777

Total property, plant and equipment 9,133 12,777

Movements in carrying amounts

At 30 June 2012

Furniture &

Equipment Total

Balance at the start of the year 12,777 12,777

Disposals (316) (316)

Depreciation expense (3,328) (3,328)

Carrying amount at end of the year 9,133 9,133

At 30 June 2011

Balance at the start of the year 13,148 13,148

Additions 3,178 3,178

Depreciation expense (3,549) (3,549)

Carrying amount at end of the year 12,777 12,777

Movement in the carrying amounts for each class of property, plant and equipment

between the beginning and end of the current financial year:

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2012 2011

NOTE 9 - TRADE AND OTHER PAYABLES $ $

Current

Trade creditors 6,044 11,425

Sundry creditors and accruals 12,608 24,720

Income received in advance 30,441 12,150

Advanced memberships received in advance 2,290 51,200 51,383 99,495

NOTE 10 - PROVISIONS

Current

Employee benefits 10,958 9,517

Non-Current

Employee benefits 15,064 12,383

26,022 21,900

Number of employees at year end 2 2

Provision for Long-term Employee Entitlements

A provision has been recognised for non-current employee entitlements relating to

long service leave for employees.

In calculating the present value of future cash flows in respect of long service leave,

the probability of long service leave being taken is based upon historical data. The

measurement and recognition criteria for employee entitlements has been included

NOTE 11 - CASH FLOW INFORMATION

Surplus/(loss) after income tax 27,803 (1,989)

Non-cash flows

- Depreciation expense 3,328 3,549

- Loss on disposal of non-current assets 316 -

Changes in assets and liabilities

- Trade and other receivables 25,996 (27,339)

- Other current assets (12,221) 11,125

- Trade and other payables (18,509) 6

- Unearned income (30,619) 57,393

- Provision for employee benefits 4,122 12,606

Net cash from operating activities 216 55,351

measurement and recognition criteria for employee entitlements has been included

in Note 1.

Reconciliation of net cash from operating activities to operating loss after income

tax.

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NOTE 12 - RELATED PARTIES

Transactions with directors and director related entities:

(a)

(b)

(c)

NOTE 13 - FINANCIAL RISK MANAGEMENT

Treasury Risk management

Entities associated with directors are members of the company and are entitled to the same benefits as all

other members.

The company’s financial instruments consist mainly of deposits with banks, short-term investments, accounts

receivable and accounts payable.

The directors’ overall risk management strategy seeks to assist the company in meeting its financial targets, whilst

minimising potential adverse effects on financial performance.

The directors of the company meet on a regular basis to review interest rates and to evaluate treasury

management strategies in the context of the most recent economic conditions and forecasts.

Risk management policies are approved and reviewed by the Board of Directors on a regular basis. These include

the credit risk policies and future cash flow requirements.

Fees for services totalling $7,069 (2011: $6,728) were paid in the ordinary course of business to Classic

Leisure Pty Ltd, a company of which Ramy Filo and Carole Smith are directors.

RG146 commission totalling $2,703 (2010: $1,781) was received in the ordinary course of business from

One Step Further Pty Ltd, a company of which Ramy Filo and Carole Smith are directors.

The company does not have any derivative instruments at 30 June 2012.

i. Interest rate risk

Effective

interest rate

Floating

Interest

Rate

Non

Interest

Bearing

Fixed

Interest

Rate Total

% $ $ $ $

1.60 49,989 250 - 50,239

- - 27,970 - 27,970

4.70 - - 450,000 450,000 49,989 28,220 450,000 528,209

- - 18,652 - 18,652

Total Financial Liabilities - 18,652 - 18,652

The company's exposure to interest rate risk, which is the risk that an financial instrument's value will fluctuate as

a result of changes in market interest rates and the effective average interest rates on those financial assets and

financial liabilities, is as follows:

30 June 2012

The main risks the company is exposed to through its financial instruments are interest rate risk, liquidity risk and

credit risk.

Interest rate risk is managed through floating rate bank accounts.

Cash and cash equivalents

management strategies in the context of the most recent economic conditions and forecasts.

Financial Risk exposures and management

Trade and other receivables

Trade and other payables

Other financial assets

Total Financial Assets

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NOTE 13 - FINANCIAL RISK MANAGEMENT (CONTINUED)

Effective

interest rate

Floating

Interest

Rate

Non

Interest

Bearing

Fixed

Interest

Rate Total

% $ $ $ $

3.24 119,773 250 - 120,023

- - 46,665 - 52,951

5.80 - - 380,000 380,000 119,773 46,915 380,000 552,974

- - 36,145 - 36,145

Total Financial Liabilities - 36,145 - 36,145

The companies interest rate risk policies remain unchanged from the prior year.

Cash flow sensitivity analysis for variable rate instruments

Trade and other receivables

Cash and cash equivalents

Trade and other payables

Total Financial Assets

30 June 2011

The sensitivity analysis has been determined based on the exposure of the company to interest rates for non-

derivative financial instruments at the reporting date and the stipulated change taking place at the beginning of the

financial year and held constant throughout the reporting period. A 100 basis point increase or decrease is used

when reporting interest rates internally to key management personnel and represents management’s assessment

of the possible change in interest rates.

At 30 June 2012, if the interest rates had changed by 100 basis points from the period-end rates with all other

variables held constant, post-tax profit for the year for the company would have been $2,453 (2011: $1,252)

lower/higher mainly as a result of lower/higher interest interest income on cash and cash equivalents and other

Other financial assets

ii. Foreign currency risk

iii Liquidity risk

Carrying

amount

Contractual

cash flows

Less than

one year 1-5 years over 5 years

$ $ $ $ $Trade and other payables 18,652 18,652 18,652 - -

Carrying

amount

Contractual

cash flows

Less than

one year 1-5 years over 5 years

$ $ $ $ $Trade and other payables 36,145 36,145 36,145 - -

Trade payables are short term in nature.

The liquidity risk policies remain unchanged from the previous year.

The following are contractual maturities of financial liabilities:

30 June 2012

30 June 2011

lower/higher mainly as a result of lower/higher interest interest income on cash and cash equivalents and other

current financial assets.

The company is not exposed to fluctuations in foreign currencies.

The company is not exposed to any significant liquidity risk.

The company manages liquidity risk by monitoring forecast and actual cash flows and ensuring that adequate

cash reserves are maintained.

Page 18





iv Credit risk

Gross Impairment Gross Impairment$ $ $ $

Not Past due (current) 26,532 - 42,572 -

Past due 0-30 days ( 30 day ageing) - - - -

Past due 31-60 days ( 60 day ageing) - - 3,475 -

1,258 - 6,904 - 27,790 - 52,951 -

None of the past due receivables at 30 June 2012 were impaired. These receivables relate to a number of

Past due over 60 days (+90 day ageing)

Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to

the company. The company does not have any significant credit risk exposure to any single counterparty or any

group of counterparties having similar characteristics.

The company does not have any material credit risk exposure to any single receivable or group of receivables.

The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date to

recognised financial assets, is the carrying amount, net of any provisions for impairment of those assets, as

disclosed in the statement of financial position and notes to the financial statements.

The ageing of the company's receivables at the reporting date was:

There are no material amounts of collateral held as security at 30 June 2012.

Credit risk is managed and reviewed regularly by the Board of Directors. It arises from exposures to customers

as well as through deposits with financial institutions.

2012 2011

v Price risk

The company is not exposed to any material commodity price risk.

vi Capital risk management

None of the past due receivables at 30 June 2012 were impaired. These receivables relate to a number of

independent members for whom there is no recent history of default. It is expected that these amounts will be

received in full.

The other classes of other receivables do not contain impaired assets and are not past due. Based on the credit

history of the receivables, it is expected that these amounts will be received when due.

Capital risk management policies remain unchanged from the prior year.

The credit risk policies remain unchanged from the previous year.

The board reviews this structure and the risks associated with each class of capital on a regular basis.

The directors manage the capital to ensure that the company will be able to continue as a going concern and to be

able to satisfy future capital needs of the company, through the optimisation of debt and equity balances.

The capital structure of the company consists of cash and cash equivalents and equity comprising retained

earnings.

Page 19





Net Fair Values

NOTE 14 - KEY MANAGEMENT PERSONNEL REMUNERATION

NOTE 15 - FUTURE COMMITMENTS

2012 2011

Operating lease commitments $ $

Payable - minimum lease payments:

- Within one year 30,136 27,397

- Later than one year but not later than 5 years 7,624 36,044

The net fair values of financial assets and liabilities approximate their carrying value. No financial assets and

financial liabilities are readily traded on organised markets in standardised form.

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.

The directors of the company are directly accountable and responsible for the strategic direction and operational

management of the company. Refer to the Directors' Report for information about the Directors and their

qualifications.

During the year there were no executives of the company.

The directors act in an honorary capacity and did not receive any remuneration during the 2012 year (2011: $nil).

Non-cancellable operating leases contracted for but not capitalised in the financial

statements.

- Later than one year but not later than 5 years 7,624 36,044 - Minimum lease payments 37,760 63,441

NOTE 16 - CONTINGENT LIABILITIES

NOTE 17 - EVENTS AFTER THE REPORTING DATE

NOTE 18 - COMPANY DETAILS

Level 2 HWC Accountants

2 Holden Place Suite 101 Bermuda Point

Bundall QLD 4217 20 Lake Orr Drive

Varsity Lakes QLD 4227

The registered office of the company is:

The option to renew the lease that came to an end on 12 September 2010 was taken up and the lease renewed

for a further period of three years, terminating on 12 September 2014.

Australian Timeshare & Holiday

Ownership Council Limited

Australian Timeshare &

Holiday Ownership Council

The principal place of business is:

No events have occurred subsequent to reporting date and up to the date of this report that will have a material

effect on the financial position or performance of the company.

The company is currently the defendant in a Supreme Court Proceeding. The claim brought against the company

is in an early phase and it is presently too difficult to estimate the Company's liability to the Plaintiff including costs

(if any). The claim against the Company is for $130,406 plus interest and costs.

The Company maintains a Management Liability Policy of Insurance and has made a claim for indemnity pursuant

to the Policy in relation to the claim brought against it in the Proceeding. The Insurer has not formally advised the

Company of the response of the Policy to the claim for indemnity and indemnity is presently reserved.

Page 20

The directors of the company declare that:

1

a.

b.

2

BARRY ROBINSON

President

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

and Holiday Ownership Council Ltd.


DIRECTORS' DECLARATION

ABN 58 065 260 095

give a true and fair view of the company’s financial position as at 30 June 2012 and of its

performance for the year ended on that date;

comply with Accounting Standards, which, as stated in Note 1 to the financial report, constitutes

explicit and unreserved compliance with International Financial Reporting Standards (IFRS); and

the financial statements and notes, as set out on pages 5 to 20 are in accordance with the Corporations

Act 2001 and:

in the directors’ opinion, there are reasonable grounds to believe that the company will be able to pay its

debts as and when they become due and payable.

Page 21

Crowe Horwath Brisbane is a member of Crowe Horwath International, a Swiss verein (Crowe Horwath). Each member firm of Crowe Horwath is a separate and independent legal entity. Crowe Horwath Brisbane and its affiliates are not responsible or liable for any acts or omissions of Crowe Horwath or any other member of Crowe Horwath and specifically disclaim any and all responsibility or liability for acts or omissions of Crowe Horwath or any other Crowe Horwath member. © 2011 Crowe Horwath Brisbane

Liability Limited by a scheme approved under Professional Standards Legislation other than for the acts or omissions of financial services licensees.

Crowe Horwath Brisbane ABN 79 981 227 862 Member Crowe Horwath International Level 16, 120 Edward Street Brisbane QLD 4000 Australia GPO Box 736 Brisbane QLD 4001 Australia Tel: +61 7 3233 3555 Fax: +61 7 3233 3567 www.crowehorwath.com.au

A WHK Group Firm

Page 22

Independent Auditor’s Report

To the members of Australian Timeshare & Holiday Ownership Council Limited

We have audited the accompanying financial report of the Australian Timeshare & Holiday Ownership Council Limited (the company), which comprises the statement of financial position as at 30 June 2012 and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration.

Directors Responsibility for the Financial Statements

The directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error. In Note 1, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that the financial statements comply with International Financial Reporting Standards. Auditor’s Responsibility Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance about whether the financial report is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation of the financial report that gives a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Independence

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of Australian Timeshare & Holiday Ownership Council Limited, would be in the same terms if provided to the directors as at the date of this auditor’s report.

Auditor's Opinion

1. In our opinion:

a) the financial report of Australian Timeshare & Holiday Ownership Council Limited is in

accordance with the Corporations Act 2001, including: i. giving a true and fair view of the company’s financial position as at 30 June 2012 and of

its performance for the year ended on that date; and ii. complying with Australian Accounting Standards and the Corporations Regulations 2001;

and

b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 1.

Crowe Horwath Brisbane Vanessa de Waal Partner Signed at Brisbane, September 2012

AUSTRALIAN TIMESHARE & HOLIDAY OWNERSHIP - ATHOC

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