C.28. Year ended 30 June 2016 ANNUAL REPORT Average House Price

Transcription

1 C.28 ANNUAL REPORT Year ended 30 June Average House Price

2

3 Annual Report Year ended 30 June 2016 Message from the Chair and CEO... 1 Financial Performance... 4 Directors Responsibility Statement... 4 Consolidated Statement of Comprehensive Income... 5 Consolidated Statement of Financial Position... 6 Consolidated Statement of Changes in Equity... 7 Consolidated Statement of Cash Flows... 8 Consolidated Notes to and forming part of the Financial Statements... 9 Statement of Key Performance Indicators...37 Statutory Information...38 Statement of Corporate Governance...42 Independent Auditor s Report Directory...48

4 Message from the Chair and CEO It has been an exciting year of change, primarily due to our new strategy that builds on what we have previously achieved and positions QV as a leading provider of property information. A new focus We are pleased to report a very strong performance that compares favourably against the Statement of Corporate Intent (SCI) for the year. We achieved a pre-tax profit before impairments and gain on disposal of investment of $2.994 million, and paid $ million in ordinary and special dividends to our shareholder. In New Zealand s ever-changing property market QV is recognised as a leading commentator delivering valuable and respected property insights. To remain a trusted voice of authority on property market matters, our new strategy is focused on strengthening our core business, deepening our understanding of what our customers want and growing our data capability. Our ambition is to revolutionise the way we share property insights so QV is an everyday conversation in homes and businesses. We want to help people make better decisions using property information. To achieve this we are concentrating on forging stronger customer relationships and developing key strategic partnerships. We re working with our customers and partners to understand the challenges they face and identify opportunities to develop innovative solutions. We are heightening our relevancy through the timeliness of services in more markets, and optimising our delivery, quality and competitiveness. Key to this strategy is engaging with and involving our people to drive improvement and growth. Taking our new strategy forward is Jacquie Barker, our new Chief Executive. Jacquie previously held the position of Chief Operating Officer at QV, is a registered valuer, and has a deep understanding of the business, our customers and emerging market opportunities. Her energy, creative approach and bold leadership will be vital in our next chapter as we look to share data and property insights that transform the customer experience. Investing in the future Data is an important asset to us, our partners and our customers, and during the year we started a programme of work Monarch, an investment in our business to support our growth and strategy. Through an agile approach we will replace some of our core systems, which will enhance our ability to respond to customers needs, pave the way for new products and services, grow our data insights and capability, and more efficiently deliver property information.

5 Celebrating our people We are lucky to have the experience, knowledge and loyalty of a great team of people. Thank you for contributing to making our business a success. Throughout the year we have celebrated some outstanding service milestones with a number of our people celebrating 20, 30 and 40 years with QV. Our internal structure has been redesigned to support and develop our future vision, and roles across the business have been refocused to align with product related business units. Just before Christmas we said farewell to our Chief Executive and Managing Director of Darroch, Bill Osborne. The innovative products and services launched under his guidance have transformed QV and the property sector. We d like to thank Bill for his major contribution and for leaving us in an extremely strong position. During the year Gary Traveller and Ian Holland left the Board after making an outstanding contribution to the business. We have welcomed Neil Barr and David Cameron-Brown to the Board. And lastly, a busy year of change has been made easier with the guidance of a dedicated Board; we d like to thank ours for their ongoing leadership and support. Raewyn Lovett Chair Jacquie Barker CEO

6

7 Financial Performance Directors Responsibility Statement For the year ended 30 June 2016 The Directors are responsible for the preparation, in accordance with New Zealand law and generally accepted accounting practice, of the financial statements which give a true and fair view of the financial position of Quotable Value Limited and its subsidiaries ( the Group ) as at 30 June 2016 and the results of their operations and cash flows for the year ended 30 June The Group comprises Quotable Value Limited, Darroch Limited, and Quotable Value Australia Pty Limited. The Directors consider that the financial statements of the Group have been prepared using accounting policies appropriate to the Group s circumstances, consistently applied and supported by reasonable and prudent judgements and estimates, and that all applicable New Zealand equivalents to International Financial Reporting Standards have been followed. The Directors have responsibility for the maintenance of a system of internal control designed to provide reasonable assurance as to the integrity and reliability of financial reporting. The Directors consider that adequate steps have been taken to safeguard the assets of the Group and to prevent and detect fraud and other irregularities. The Directors are pleased to present the financial statements of the Group for the year ended 30 June This annual report is dated 19 September 2016 and is signed in accordance with a resolution of the Directors made pursuant to section 211(1)(k) of the Companies Act For and on behalf of the Directors Raewyn Lovett Chair Kim Wallace Director Dated this 19th day of September

8 Consolidated Statement of Comprehensive Income For the year ended 30 June 2016 Notes $NZ 000 $NZ 000 Income Trading revenue 2 (a) 38,121 40,916 Investment revenue 2 (b) 57 8 Release of provision for insurance excess 17-1,899 Total income 38,178 42,823 Expenses Personnel expenses 2 (c) (23,419) (24,616) Operating expenses 2 (c) (4,874) (4,963) Marketing expenses (350) (573) Occupancy expenses (1,786) (2,035) Administration expenses (772) (769) Depreciation and amortisation expense 2 (c) (1,115) (780) Finance costs (101) (154) Consulting expenses (944) (774) Other expenses 2 (c) (2,916) (3,694) Total expenses (36,278) (38,358) Profit (loss) before associate share of income 1,900 4,465 Capital gain on sale of investments 11 13,523 - Share of associate profit/(loss) 11 1,094 1,459 Profit (loss) before taxation 16,517 5,924 Income tax expense 3 (544) (1,338) Profit (loss) for the year net of tax 15,973 4,586 Other comprehensive income Items that may be subsequently reclassified to profit or loss: Translation of foreign operations 18 (11) 21 Other comprehensive income for the year net of tax (11) 21 Total comprehensive income for the year 15,962 4,607 The accompanying notes form part of these financial statements.

9 Consolidated Statement of Financial Position As at 30 June 2016 Notes $NZ 000 $NZ 000 Current assets Cash and cash equivalents 5 3,905 1,558 Trade and other receivables 6 6,309 7,448 Vendor loan Total current assets 10,214 9,126 Non-current assets Investment in associate 11-13,175 Property and equipment assets Goodwill 8 1,148 1,148 Intangible assets 9 1,922 2,259 Deferred taxation Total non-current assets 3,994 17,602 Total assets 14,208 26,728 Current liabilities Trade and other payables 15 2,316 2,176 Borrowings 13-3,176 Employment entitlements 16 2,776 3,640 Provisions Taxation payable Total current liabilities 5,219 9,571 Non-current liabilities Employment entitlements Provisions Total non-current liabilities Total liabilities 5,661 10,029 Net assets 8,547 16,699 Equity Issued capital 4 4,600 4,600 Foreign currency translation reserve Retained earnings 19 3,698 11,839 Total equity 8,547 16,699 For and on behalf of the Board, who authorised the issue of these financial statements on 19 September Raewyn Lovett Chair Kim Wallace Director The accompanying notes form part of these financial statements. 6

10 Consolidated Statement of Changes in Equity For the year ended 30 June 2016 Fully paid ordinary shares Retained earnings Foreign currency translation reserve Total Notes $NZ 000 $NZ 000 $NZ 000 $NZ 000 Balance as at 1 July ,600 9, ,035 Total comprehensive income for the year net of tax - 4, ,607 Payment of dividends 19 - (1,943) - (1,943) Balance as at 1 July ,600 11, ,699 Total comprehensive income for the year net of tax - 15,973 (11) 15,962 Payment of dividends 19 - (24,114) - (24,114) Balance as at 30 June ,600 3, ,547 The accompanying notes form part of these financial statements.

11 Consolidated Statement of Cash Flows For the year ended 30 June 2016 Notes $NZ 000 $NZ 000 Cash flows from operating activities Cash was provided from: Revenues from operations 39,493 40,660 Interest received ,550 40,668 Cash was applied to: Payments to employees and suppliers 36,227 36,642 Net GST paid (received) 10 (36) Interest paid Income tax paid (received) ,840 37,141 Net cash flows from operating activities 20 2,710 3,527 Cash flows from investing activities Cash was provided from: Vendor loan Proceeds from sale of property and equipment assets 45 7 Disposal of investment in associate 27,792-27, Cash was applied to: Purchase of property and equipment assets, and intangible assets 1,028 2,084 1,028 2,084 Net cash flows from investing activities 26,929 (1,983) Cash flows from financing activities Cash was provided from: Loan advance Cash was applied to: Repayment of loan advance 3,176 - Dividends paid 24,116 1,943 27,292 1,943 Net cash flows from financing activities (27,292) (1,767) Net increase (decrease) in cash and cash equivalents 2,347 (223) Cash and cash equivalents as at 1 July 1,558 1,781 Cash and cash equivalents as at 30 June 5 3,905 1,558 The Net GST paid (received) component of operating activities reflects the net GST paid and received with the Inland Revenue Department. Other cash flows presented above exclude GST paid or received as the Group believes this provides more meaningful information for financial statement users. The accompanying notes form part of these financial statements. 8

12 Consolidated Notes to and forming part of the Financial Statements For the year ended 30 June Summary of Accounting Policies Reporting Entity These are the consolidated financial statements of Quotable Value Limited (the Parent) and its subsidiaries. Quotable Value Limited is a State-Owned Enterprise in terms of the State-Owned Enterprises Act The Group comprises Quotable Value Limited and Darroch Limited, which are registered under the Companies Act 1993, and Quotable Value Australia Pty Limited, which is registered in Australia under the Corporations Law. The Parent became a State-Owned Enterprise on 25 January 2005 and previously the Parent was a Crown Entity. The Parent is incorporated and domiciled in New Zealand. Its principal activity is the provision of property valuations and data. All the Companies in the Group are designated as for profit entities for the purposes of New Zealand equivalents to International Financial Reporting Standards (NZ IFRS). The financial statements were authorised for issue by the Directors on the date stated in the Consolidated Statement of Financial Position. Statement of Compliance These financial statements have been prepared in accordance with Generally Accepted Accounting Practice in New Zealand (NZ GAAP), the requirements of the State-Owned Enterprises Act 1986, the Companies Act 1993, and the Financial Reporting Act They comply with NZ IFRS and other applicable Financial Reporting Standards. Compliance with NZ IFRS ensures that the consolidated financial statements also comply with International Financial Reporting Standards (IFRS). Basis of Preparation The financial statements have been prepared on a historical cost basis. The accounting policies set out below have been applied in preparing the financial statements for the year ended 30 June 2016, and the comparative information presented in these financial statements for the year ended 30 June Functional and Presentation Currency These financial statements are presented in New Zealand dollars ($), which is the Parent s functional currency. All financial information presented in New Zealand dollars has been shown in thousands and is rounded to the nearest thousand dollar. Changes in Accounting Policies There have been no changes in accounting policies during the financial year. Details of standards, amendments and interpretations that have been adopted during the current period: The Group has adopted all new standards and amendments to standards that became mandatorily effective during the period and which had not previously been adopted. There was no impact from adoption of these standards and amendments.

13 Details of standards, amendments and interpretations that are not yet effective and have not been early adopted: Standards, amendments and interpretations issued, but not yet effective, that have not been early adopted, and which are or may be relevant to the Group, are: NZ IFRS 15 Revenue from Contracts with Customers NZ IFRS 9 Financial Instruments NZ IFRS 16 Leases 2015 Omnibus Amendments to NZ IFRSs Amendments to NZ IAS 16 and NZ IAS 38 Clarification of Acceptable Methods of Depreciation and Amortisation Annual Improvements to NZ IFRSs Cycle Disclosure Initiative (Amendments to NZ IAS 1) Recognition of Deferred Tax Assets for Unrealised Losses (amendments to NZ IAS 12) Disclosure Initiative (Amendments to NZ IAS 7). The Group has not yet analysed the impact, if any, of these changes. (a) (b) Significant Accounting Policies The following accounting policies which materially affect the measurement of financial performance and financial position for the Group have been applied: Foreign Currency Transactions Foreign currency transactions (including those for which forward exchange contracts are held) are translated into New Zealand dollars using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Consolidated Statement of Comprehensive Income. Research and Development Development costs are recognised as an asset when all of the following criteria are met: the product or process is clearly defined and the costs attributable to the product or process can be identified separately and measured reliably; the technical feasibility of the product or process can be demonstrated; the Group intends to produce and market, or use, the product or process; the existence of a market for the product or process or its usefulness to the Group, if it is to be used internally, can be demonstrated; and adequate resources exist, or their availability can be demonstrated, to complete the project and market or use the product or process. Capitalisation is limited to that amount which, taken together with further related costs, is probable of recovery from related future benefits. Development costs recognised as an asset are amortised on a straight-line basis over the period of expected benefits. All other development costs and all research costs are recognised as expenses in the period in which they are incurred. 10

14 (c) Impairment of Assets The Group reviews the carrying amounts of its finite life tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. In that case the recoverable amount of the asset is estimated in order to determine the extent of impairment loss if any. An impairment loss is recognised for the amount by which the asset s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of the asset s fair value less the cost to sell and value in use. Goodwill with indefinite useful life is tested for impairment annually and whenever there is an indication that the asset may be impaired. An impairment of goodwill is not subsequently reversed. An impairment loss is recognised in the Consolidated Statement of Comprehensive Income immediately, unless the relevant asset is carried at fair value, in which case the impairment loss is treated as a revaluation decrease. Critical Accounting Judgements and Estimates In preparing these financial statements the Group has made estimates and assumptions concerning the future. These estimates and assumptions may differ from the subsequent actual results. Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed within the notes referred to below: Property and Equipment Assets Useful Lives and Residual Value See note 7. Retirement and Long Service Leave Note 16 provides an analysis of the exposure in relation to estimates and uncertainties surrounding retirement and long service leave liabilities. Critical judgements in applying the Group s accounting policies Management has exercised the following critical judgements in applying the Group s accounting policies for the period ended 30 June 2016: Goodwill Impairment A review of goodwill is undertaken annually to determine that the carrying amount shown in the Consolidated Statement of Financial Position is a fair value based on the cash generating units of the Group. Note 8 provides an analysis of the carrying amount of goodwill. Capitalisation and Impairment of Intangible Assets Internally generated intangible assets can only be capitalised to the extent they meet the criteria outlined in our research and development accounting policy. Any expense not meeting the capitalisation criteria is recognised as research and development expense in profit or loss. Judgement is required in determining whether all the capitalisation criteria have been met and at what point, and this consideration is undertaken on a case by case basis for significant projects. Research and development expenditure is disclosed in note 2c and capitalised intangible assets in note 9.

15 2. Income and Expenses Trading Revenue The Group derives revenue through the provision of services to third parties and income from investments. Trading revenue is measured at the fair value of the consideration received/receivable. Partially completed services are valued on a time and cost basis excluding costs deemed not collectible. Interest revenue is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset s net carrying amount. Income and expenses from continuing operations includes: (a) Revenue $NZ 000 $NZ 000 (b) Revenue from rendering services 38,121 40,916 38,121 40,916 Investment Revenue $NZ 000 $NZ 000 (c) Interest income 57 8 Dividend income Expenses Notes $NZ 000 $NZ 000 Personnel expenses Personnel expenses 22,400 23,978 Superannuation contributions 1, ,419 24,616 Operating expenses Communication expenses Computer operating expenses 3,371 3,441 Travel expenses Vehicle expenses ,874 4,963 Depreciation and amortisation expense Amortisation of intangible assets Depreciation , Other expenses Audit fee 2 (d) Board expenses Insurance 1,057 1,093 Other costs Other valuation costs Research and development ,917 3,694 12

16 (d) Auditors Remuneration $NZ 000 $NZ 000 Fees paid to auditors for: Audit fees of financial statements RSM Hayes auditors fees for audit of Real Estate Trust Accounts Total audit fees Income Tax (a) Income Tax Expense Income tax expense represents the sum of the tax currently payable and deferred tax. The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the Statement of Comprehensive Income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. The prima facie income tax expense on pre-tax accounting profit from operations reconciles to the income tax expense in the financial statements as follows: $NZ 000 $NZ 000 Relationship between tax expense and accounting profit Profit from operations 16,517 5,924 Income tax expense at 28% 4,625 1,659 Plus/(less) tax effect of: Non taxable income (4,096) (409) Non deductible expenditure Timing differences - - Prior period adjustment (13) 11 Impact of tax rates in different jurisdictions 17 - Tax losses brought forward ,338 Components of tax expense Current tax expense Deferred tax Prior period adjustment - - Tax expense 544 1,338 (b) Imputation Credit Account $NZ 000 $NZ 000 Imputation credits available for use in subsequent periods 966 1,436 Franking credits QVA 1,254 1,122

17 (c) Deferred Taxation Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences, and deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the balance sheet date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities. Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis. The following table shows the deferred tax liability for the year: $NZ 000 $NZ 000 Balance as at 1 July Movements during the year: Temporary differences (39) (522) Balance as at 30 June The following tables show a breakdown of movements in deferred tax assets and liabilities for the year: (c)(i) Deferred tax assets/(liabilities) 2015 Opening Balance 2016 Charged to Income 2016 Charged to Equity 2016 Closing Balance $NZ 000 $NZ 000 $NZ 000 $NZ 000 Gross deferred tax liabilities Property and equipment assets 105 (25) - 80 WIP (480) (309) (375) (229) Gross deferred tax assets Employee entitlements 512 (203) Doubtful debt and impairment losses Imputation credits converted to losses Tax losses carried forward Provisions (185) Total 234 (39)

18 2014 Opening balance 2015 Charged to income 2015 Charged to equity 2015 Closing balance $NZ 000 $NZ 000 $NZ 000 $NZ 000 Gross deferred tax liabilities Property and equipment assets WIP (299) (181) - (480) (229) (146) - (375) Gross deferred tax assets Employee entitlements Doubtful debt and impairment losses 39 (27) - 12 Imputation credits converted to losses Tax losses carried forward Provisions 536 (451) (376) Total 756 (522) Share Capital $NZ 000 $NZ 000 Balance at 1 July 4,600 4,600 Balance at 30 June 4,600 4,600 At 30 June 2016 the Group has authorised and issued 4,600,000 shares fully paid (2015: 4,600,000). The shares have no par value. All shares carry equal voting rights and the right to share in any surplus on winding up of the Company. None of the shares carry fixed dividend rights. There is no right of redemption attached to these shares. 5. Cash and Cash Equivalents Cash comprises cash on hand and demand deposits. Cash equivalents are short-term (less than three months), highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value. Bank overdrafts are shown with borrowings in current liabilities in the balance sheet. $NZ 000 $NZ 000 Cash at bank 3,900 1,554 Petty cash 5 4 3,905 1,558 The carrying value of short-term deposits in cash at bank with maturity dates of three months or less approximates their fair value.

19 6. Trade and Other Receivables Accounts receivable are initially measured at fair value and subsequently measured at amortised cost using the effective interest method, less any provision for impairment. Work in progress is work undertaken but not invoiced at month end. $NZ 000 $NZ 000 Trade receivables 4,401 4,045 Allowance for doubtful debts (50) (42) 4,351 4,003 Related party receivables trade Prepayments Work in progress 1,370 2,758 6,309 7,448 The average credit period on sales of services is 30 days. No interest is charged on the trade receivables. An allowance has been made for doubtful debts based on calculations made by management taking into account historical trends. As at 30 June 2016 all overdue receivables have been assessed for impairment and appropriate provisions applied. (a) Aged Debtors Schedule for the Group Past due 61+ days Past due days Past due 1 30 days Not past due Gross Impairment Net Gross Impairment Net $NZ 000 $NZ 000 $NZ 000 $NZ 000 $NZ 000 $NZ 000 Not past due 3,483-3,483 3,272-3,272 Past due 1 30 days Past due days 168 (19) (9) 314 Past due 61+ days 204 (31) (33) 111 Total trade receivables for the Group 4,401 (50) 4,351 4,045 (42) 4,003 16

20 Movement in provision for doubtful debts $NZ 000 $NZ 000 Balance at 1 July Additional provisions made/(released) during the year 7 (70) Bad debts recovered - - Receivables written off during the period 1 - Balance at 30 June Property and Equipment Assets Property and equipment asset classes consist of leasehold improvements, motor vehicles, office equipment, furniture and fittings, general and core application hardware. Property and equipment assets are stated at cost less depreciation and impairment losses. Additions The cost of an item of property and equipment assets is recognised as an asset only when it is probable that future economic benefits or service potential associated with the item will flow to the entity and the cost of the property or equipment assets can be measured reliably. Disposals Gains and losses on disposals are determined by comparing the proceeds with the carrying amount of the asset. Any gains and losses on disposals are included in the surplus or deficit. Subsequent Costs Costs incurred subsequent to initial acquisition are capitalised only when it is probable that the future economic benefits or service potential associated with the item will flow to the entity and the cost of the property and equipment assets can be measured reliably. The day-to-day servicing costs of property and equipment assets are recognised in the Statement of Comprehensive Income when they are incurred. Depreciation Property and equipment assets are depreciated on a straight-line basis that will write off the cost of the assets to their estimated residual value over their useful life. Asset Depreciation rate Furniture and fittings 15% Motor vehicles 20% Office equipment 33% General hardware 25% Leasehold improvements 33% The residual value and useful life of an asset is reviewed, and adjusted if applicable, at each financial year end. The cost of leasehold improvements is capitalised and depreciated over the unexpired period of the lease or the estimated remaining useful life of the improvements, whichever is the shorter. In the year ended 30 June 2016 there were no: items of property or equipment assets which were not in current use; impairment losses recognised or reversed in the current period; borrowing costs capitalised; restriction in title relating to property and equipment assets or items pledged as security for liabilities.

21 The following schedule shows the movements of property and equipment assets for the year ended 30 June 2016: Leasehold improvements Motor vehicles Office equipment Furniture and fittings WIP General hardware Core application hardware Total $NZ 000 $NZ 000 $NZ 000 $NZ 000 $NZ 000 $NZ 000 $NZ 000 $NZ 000 Gross carrying amount Balance as at 1 July , ,382 Additions Disposals (80) (15) (3) (35) - (77) - (210) Balance as at 1, , June 2015/1 July 2015 Additions Transfers (255) 5-5 Effect of foreign exchange (1) - (1) (2) (4) Disposals (89) (128) (8) (44) - (26) - (295) Balance as at 30 June , ,624 Accumulated depreciation and impairment losses Balance as at 1 July 2014 (836) (212) (87) (303) - (297) (77) (1,812) Disposals Depreciation expense (137) (47) (13) (53) - (4) - (254) Balance as at (893) (248) (97) (324) - (224) (77) (1,863) 30 June 2015/1 July 2015 Disposals Effect of foreign exchange Depreciation expense (180) (31) (14) (49) - (6) - (280) Balance as at 30 June 2016 (984) (184) (103) (340) - (207) (77) (1,895) Net book value As at 1 July As at 30 June As at 30 June Property and Equipment Assets Useful Lives and Residual Value At each balance date the Group reviews the useful lives and residual values of its property and equipment assets. Assessing the appropriateness of useful life and residual value estimates of property and equipment assets requires the Group to consider a number of factors such as the physical condition of the asset, expected period of use of the asset by the Group, and expected disposal proceeds from the future sale of the asset. An incorrect estimate of the useful life or residual value will impact the depreciation expense recognised in the Consolidated Statement of Comprehensive Income, and carrying amount of the asset in the Consolidated Statement of Financial Position. The Group minimises the risk of this estimation uncertainty by: physical inspection of assets; asset replacement programmes; review of second hand market prices for similar assets; and analysis of prior asset sales. The Group has not made significant changes to past assumptions concerning useful lives and residual values. 18

22 8. Goodwill Goodwill Goodwill on acquisition of subsidiaries is recognised as an asset and separately identified. Goodwill is not amortised, but tested for impairment annually and whenever there is an indication that the goodwill may be impaired. Any impairment is recognised immediately in the Consolidated Statement of Comprehensive Income and is not subsequently reversed. $NZ 000 $NZ 000 Gross carrying amount Balance as at 1 July 10,007 10,007 Balance as at 30 June 10,007 10,007 Accumulated impairment losses Balance as at 1 July (8,859) (8,859) Impairment loss for year - - Balance as at 30 June (8,859) (8,859) Net book value as at 1 July 1,148 1,148 Net book value as at 30 June 1,148 1,148 Allocated to the following cash generating units (CGUs): Quotable Value Darroch ,148 1,148 Impairment testing for CGUs containing goodwill: For the purpose of impairment testing, goodwill is allocated to the Group s CGUs which represent the lowest level within the Group at which the goodwill is monitored for internal management purposes. Quotable Value CGU: The recoverable value of the Quotable Value CGU was based on a Value in Use (VIU) calculation using the Discounted Cash Flow (DCF) methodology. The recoverable value was in excess of the carrying value of the CGU and therefore no impairment has been recognised (2015: Nil). The key assumptions in the VIU calculation were: Cash flows were projected based on a three year business plan as approved by the Board of Directors. Revenue is forecast to increase by 12.4% over the three year period relative to FY16 actual revenue (2015: 9.7% relative to FY15 revenue). Cash flows beyond a three year period have been extrapolated using a growth rate of 2% (2015: 2%) which reflects long-term inflation expectations. A discount rate of 11.2% (2015:9.34%) per annum has been applied to the cash flows. Darroch CGU: for the year ended 30 June 2016 The recoverable value of the Darroch CGU was based on a Value in Use calculation using the Discounted Cash Flow (DCF) methodology. The recoverable value was in excess of the carrying value of the CGU and therefore no impairment has been recognised. The key assumptions in the VIU calculation were: Cash flows were projected based on a three year business plan as approved by the Board of Directors. Revenue is expected to increase by 31.5% over the three year period relative to FY16 actual revenue. Cash flows beyond a three year period have been extrapolated using a growth rate of 2% which reflects long-term inflation expectations. A discount rate of 20% per annum has been applied to the cash flows.

23 Darroch CGU: for the year ended 30 June 2015 The recoverable value of the Darroch CGU was based on a Fair Value less costs to sell calculation. Fair value is calculated using the capitalisation of earnings approach, applying a multiple to the future maintainable EBITDA of the CGU.The recoverable value was in excess of the carrying value of the CGU and therefore no impairment has been recognised. Key assumptions in the calculation were: Future Maintainable EBITDA being broadly consistent with the result for FY15; and An EBITDA multiple of 3.5 based on consideration of public companies with similar characteristics to Darroch, recent acquisitions involving similar companies and a capital asset pricing model derived multiple. 9. Intangible Assets (Finite) Software Acquisition and Development Acquired computer software licenses are capitalised on the basis of the costs incurred to acquire and bring to use the specific software. Costs that are directly associated with the development of software for internal use are recognised as an intangible asset. Direct costs include software development employee costs and an appropriate portion of relevant overheads. Staff training costs are recognised as an expense when incurred. Costs of maintaining computer software are recognised as an expense when incurred. Costs of developing and maintaining the Group website are recognised as an expense when incurred. Database and Software The QIVS II Database and software are recorded at cost less accumulated amortisation and impairment. Amortisation is charged on a straight-line basis over their estimated useful lives. The estimated useful life and amortisation method is reviewed at the end of each annual reporting period, with any changes being recognised as a change in accounting estimate. The amortisation rates used in the preparation of these statements are as follows: Asset Amortisation rate QIVS II database 15% Software 33% Amortisation The carrying value of an intangible asset with a finite life is amortised on a straight-line basis over its useful life. Amortisation begins when the asset is available for use and ceases the date the asset is derecognised. The amortisation charge for each financial year is recognised in the surplus or deficit. The useful lives and associated amortisation rates of major classes of intangible assets have been estimated as follows: Acquired computer software 3 years 33% 20

24 The Group owns and operates its own proprietary software supporting the operations of the business. An example of this type of software is the QIVS platform which is integral to many of its operational processes. The fair value of the intangible assets is approximately equal to their carrying amount. In the year ended 30 June 2016 for the Group there were no: impairment losses recognised or reversed in the current period; borrowing costs capitalised; and restriction in title relating to intangible assets or items pledged as security for liabilities. The following schedule shows the movements of intangible assets for the year ended 30 June 2016: (a) Movements in Intangible Assets Computer software QIVS WIP Total $NZ 000 $NZ 000 $NZ 000 $NZ 000 Gross carrying amount Balance as at 1 July ,250 6, ,465 Additions 1, ,824 Disposals (97) (26) - (123) Balance as at 30 June 2015/1 July ,376 6, ,166 Additions Transfers (1,077) - Disposals (68) - - (68) Balance as at 30 June ,173 6,422-12,595 Accumulated amortisation and impairment losses Balance as at 1 July 2014 (3,739) (5,765) - (9,504) Disposals/adjustments Amortisation (399) (127) - (526) Balance as at 30 June 2015/1 July 2015 (4,040) (5,867) - (9,907) Disposals/adjustments Effect of foreign exchange Amortisation (609) (226) - (835) Balance as at 30 June 2016 (4,585) (6,088) - (10,673) Net book value As at 1 July As at 30 June , ,259 As at 30 June , ,922 The Group has reviewed the value of the QIVS database in accordance with the impairment test and as the database supports operational business processes, its value is estimated to be greater than the book value. The Group believes that the database holds its value on a going concern basis as revenue generating capacity continues. WIP in the table above relates to significant items purchased or committed to at balance date for projects being undertaken. They will be allocated to specific capital items in QIVS or software on completion.

25 10. Subsidiaries Business Combinations Acquisitions of subsidiaries and businesses are accounted for using the purchase method. The cost of the business combination is measured as the aggregate of the fair values (at the date of exchange) of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree, plus any costs directly attributable to the business combination. The acquiree s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under NZ IFRS 3 Business Combinations are recognised at their fair values at the acquisition date, except for non-current assets (or disposal groups) that are classified as held for sale in accordance with NZ IFRS 5 Non-current Assets Held for Sale and Discontinued Operations, which are recognised and measured at fair value less costs to sell. Goodwill arising on acquisition is recognised as an asset and initially measured at cost, being the excess of the cost of the business combination over the Group s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised. If, after reassessment, the Group s interest in the net fair value of the acquiree s identifiable assets, liabilities and contingent liabilities exceeds the cost of the business combination, the excess is recognised immediately in profit or loss. The Group s goodwill accounting policy is set out in note 8. The interest of minority shareholders in the acquiree is initially measured at the minority s proportion of the net fair value of the identifiable assets, liabilities and contingent liabilities recognised. The consolidated financial statements incorporate the financial statements of the Company (Quotable Value Limited) and entities controlled by the Company and its subsidiaries. Control is achieved when the Company: has power over the investee; is exposed, or has rights, to variable returns from its involvement with the investee; and has the ability to use its power to affect its returns. The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above. When the Company has less than a majority of the voting rights of an investee, it has power over the investee when the voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Company considers all relevant facts and circumstances in assessing whether or not the Company s voting rights in an investee are sufficient to give it power, including: the size of the Company s holding of voting rights relative to the size and dispersion of holdings of the other vote holders; potential voting rights held by the Company, other vote holders or other parties; rights arising from other contractual arrangements; and any additional facts and circumstances that indicate that the Company has, or does not have, the current ability to direct the relevant activities at the time that decisions need to be made, including voting patterns at previous shareholders meetings. Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during the year are included in the Consolidated Statement of Comprehensive Income from the date the Company gains control until the date when the Company ceases to control the subsidiary. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group s accounting policies. 22

26 All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation. Quotable Value Limited has 2 subsidiary companies (2015: 2 subsidiaries). Percentage of holding at balance date Name of company Principal activities Balance date Subsidiaries Darroch Limited Property Valuation and Management 30 June Quotable Value Australia Pty Limited Property Valuation 30 June (unaudited and incorporated) Country of Incorporation Darroch Limited is incorporated in New Zealand; and Quotable Value Australia Pty Limited is incorporated in New South Wales, Australia. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group s accounting policies. All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation. 11. Investment in Associate Company An associate is an entity over which the Group has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies. The results and assets and liabilities of associates are incorporated in these consolidated financial statements using the equity method of accounting. Under the equity method, an investment in an associate is initially recognised in the Consolidated Statement of Financial Position at cost and adjusted thereafter to recognise the Group s share of the profit or loss and other comprehensive income of the associate. When a group entity transacts with an associate of the Group, profits and losses resulting from the transactions with the associate are recognised in the Group s consolidated financial statements only to the extent of interests in the associate that are not related to the Group. Percentage of holding at balance date Name of associate company Principal activities Balance date CoreLogic NZ Limited (CLNZ) 0 40 Sale of data and information 31 December CLNZ is incorporated in New Zealand.

27 Reconciliation of movement in investment in CLNZ $NZ 000 $NZ 000 Balance at beginning of year 13,175 11,716 Share of profits in associate company 1,094 1,459 Dividends received - - Disposal of Investment (14,269) ,175 The Group disposed of its remaining shares in CLNZ for cash proceeds of $27.8m on 1 January 2016 following the exercise of a call option over those shares by the controlling shareholder of CLNZ. A gain on disposal of $13.5 million has been recorded in profit or loss. In addition, the Group recognised $1.1 million for its share of the profit of CLNZ for the period from 1 July 2015 to 31 December The following schedule summarises the associate s performance and position at 30 June 2015 and performance for the six month period to 31 December This summary represents the gross amounts. As the CLNZ investment was disposed of on 1 January 2016, the revenue, profit and comprehensive income values are for the six month period to 31 December 2015 with no balance sheet data required. (a) Dividends Received from CLNZ $NZ 000 $NZ 000 Dividends received from CLNZ - - (b) Summarised Financial Information for CLNZ $NZ 000 $NZ 000 Current assets - 9,172 Non-current assets - 43,478 Current liabilities - (9,175) Non-current liabilities - (10,537) Revenue 16,162 29,440 Profit or (loss) from continuing operations 2,735 3,648 Total comprehensive income 2,735 3,648 Reconciliation of summarised financial information to carrying amount of investment in CLNZ: $NZ 000 $NZ 000 Net assets of CLNZ - 32,938 Proportion of Group's ownership in CLNZ - 40% - 13,175 24

28 12. Related Party Information Quotable Value Limited and Group are State-Owned Enterprise entities in terms of the State-Owned Enterprises Act (a) Related Party Transactions with the Ultimate Shareholder of the Parent In conducting its activities, Quotable Value Limited and the Group are required to pay various taxes and levies (such as GST, PAYE, FBT and ACC levies) to the Crown and entities related to the Crown. The payment of these taxes and levies is based on the standard terms and conditions that apply to all tax and levy payers. The Group also purchases goods and services from entities controlled, significantly influenced, or jointly controlled by the Crown. The Group also provides goods and services to entities controlled, significantly influenced, or jointly controlled by the Crown. These services include provision of property valuations and supply of data and information as an arm s length transaction. Details of significant transactions are listed below: Group $NZ $NZ $NZ $NZ Received Paid Received Paid Significant transactions: Land Information New Zealand 4,050, ,788 4,041, ,153 Ministry of Business, Innovation and Employment 252, ,633 - Ministry of Education 672, ,021 - New Zealand Transport Authority 1,502,468-1,401,632 - District Health Boards 73, ,208 - Accident Compensation Corporation - 56,738 5,540 46,392 Housing New Zealand 455, ,014 - New Zealand Post 27, , ,879 Landcorp 170, ,250 - All others 714,406 55, ,595 21,216 7,919, ,845 8,050, ,640 Loans between other related party companies are interest free and repayable on demand. (b) Related Party Transactions with Entities Related to Key Management Personnel and Directors $NZ $NZ Duncan Cotterill valuation Sales 5,008 5,177 Duncan Cotterill legal services Purchases 30, ,837 NZ Institute of Valuers Purchases - 1,339 Crown Asset Management Sales Massey University Purchases Property Institute of NZ Purchases 135, ,315 Talent International Purchases 27,413 - Yellow Pages Group Purchases 13,795 - All transactions between entities and Directors within the Group were on an arm s length basis both at normal market prices and on normal commercial terms. There are no guarantees to or from any related parties.

29 (c) Balances Arising from Sales/Purchases of Goods and Services of Related Parties $NZ $NZ Payables to related parties CoreLogic NZ Limited - 15,562 Receivables from related parties (note 6) CoreLogic NZ Limited - 230,714 Purchases of services CoreLogic NZ Limited 53, ,207 Sales of services CoreLogic NZ Limited 1,461,549 2,379,759 Sales to related parties are made at terms equivalent to those that prevail in arm s length transactions. Outstanding balances at the year end are unsecured, interest free and settlement occurs in cash. There are no guarantees provided or received for any related party receivable or payable. There is no provision held against receivables from related parties (2015: Nil). (d) Compensation of Key Management Personnel Key management personnel include all Board members, the Chief Executive and the 4 (2015: 4) other members of the executive team. Compensation paid to these members is as follows: $NZ 000 $NZ 000 Salaries and short term benefits 1,805 1,868 Post-employment benefits (e.g. Kiwisaver) Other long term benefits Termination benefits Total key management personnel compensation 2,577 1,916 26

30 13. Borrowings Borrowings are recorded initially at fair value, plus transaction costs. Subsequent to initial recognition, borrowings are measured at amortised cost using the effective interest method. Borrowing Costs Interest expense is accrued on a time basis using the effective interest method. All borrowing costs are recognised as an expense in the period to which the charge relates. $NZ 000 $NZ 000 Current Westpac New Zealand Money Market - 3,176-3,176 The bank overdraft is made available only subject to the terms of an unsecured negative pledge. The facility available totals $1,000,000 (2015: $1,000,000). No overdraft is drawn down on balance date. The bank term loan is made available only subject to the terms of an unsecured negative pledge. The facility currently available totals $4,500,000 (2015: $4,500,000). There are no fixed repayment terms. The loan is due to expire on 31 July Of the available facility nil (2015: $3,176,000) has been used at balance date. The interest rate for the bank term loan is determined at the time of borrowing. The year end rate was 3.70% per annum (2015: 4.70% per annum). The average interest rate for the year was 4.01% per annum (2015: 4.93% per annum). A commitment fee of 0.05% per month is paid on the total facility of $5,500,000 (2015: $5,500,000). At balance date there is a business MasterCard facility of $74,500 (2015: $47,100) of which $11,867 (2015: $9,752) is drawn down. No banking covenants have been breached. The fair value of the bank term loan is approximately equal to its carrying amount. 14. Financial Instruments The Group is a party to financial instruments as part of its normal operations. These financial instruments include bank accounts, short-term deposits, debtors, creditors and loans. All financial instruments are recognised in the balance sheet and all revenues and expenses in relation to financial instruments are recognised in the Consolidated Statement of Comprehensive Income. Non-Derivative Financial Instruments Non-derivative financial instruments include trade and other receivables (excluding prepayments), cash and cash equivalents, loans and borrowings, and trade and other payables. Non-derivative financial instruments are recognised initially at fair value on the date the entity becomes a party to the contractual provisions of the instrument. Financial assets are derecognised if the entity s contractual rights to the cash flows from the financial assets expire or if the entity transfers the financial asset to another party without retaining control or substantially all risks and rewards of the asset. Financial liabilities are derecognised if the entity s obligations specified in the contract expire or are discharged or cancelled.

31 Currency Risk Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in foreign exchange rates. The Group operates in Australia, which requires the entities to enter into transactions denominated in Australian dollars (AUD). The Group holds small balances of AUD on call with international banks. As a result of these activities, exposure to currency risk arises. Sensitivity Analysis As at 30 June 2016, if the NZD had strengthened by 10% against the AUD with all other variables held constant, the profit for the year would have been $8,733 lower. An identical increase in profit would have been recorded if the NZD had weakened 10% against the AUD. Credit Risk Credit risk is the risk that a counterparty will default on its contractual obligation to the Group, resulting in financial loss to the Group. The Group has adopted a policy of only dealing with creditworthy counterparties. The Group s maximum credit exposure for each class of financial instrument is represented by the total carrying amount of cash and cash equivalents (note 5), and net trade and other receivables (note 6). Trade receivables consist of a large number of customers, spread across diverse geographical areas. Ongoing credit evaluation is performed on the financial condition of trade receivables. The Group has no significant concentration of credit risk, as its credit customers are relatively small. The Group only invests funds with registered banks with specified Standard and Poor s credit ratings of AA- and above. Liquidity Risk Liquidity risk is the risk that the Group will encounter difficulty meeting its short-term commitments as they fall due. The Group manages liquidity risk by maintaining sufficient cash by preparing monthly cash flow reports and budgets. The debtors collection process and cash position is monitored daily. The carrying amounts of financial assets and liabilities are as follows: $NZ 000 $NZ 000 Loans and receivables Cash and cash equivalents 3,905 1,558 Trade and other receivables (excluding prepayments) 5,721 6,993 Total loans and receivables 9,626 8,551 Financial liabilities at amortised cost Creditors and other payables 2,223 2,176 Borrowings secured loans - 3,176 Total financial liabilities at amortised cost 2,223 5,352 Contractual cash flow, which equates to the carrying amount, for all the financial liabilities will be payable within 12 months. 28

32 15. Trade and Other Payables Payables Trade payables and other accounts payable are recognised when the Group becomes obliged to make future payments resulting from the purchase of goods and services. Goods and Services Tax Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except for receivables and payables, which are recognised inclusive of GST. Where GST is irrecoverable as an input tax, then it is recognised as part of the related asset or expense. The net amount of GST recoverable from, or payable to, the IRD is included as part of receivables or payables in the Consolidated Statement of Financial Position. $NZ 000 $NZ 000 Trade payables Income in advance 93 - Accruals 890 1,008 Goods and services tax (GST) payable ,316 2,176 The average credit period on invoices is 30 days. The Group has financial risk management policies in place to ensure that all payables are paid within the credit timeframe. 16. Employment Entitlements Short-term Employee Entitlements Provision is made in respect of the Group s liability for wages and salaries, annual leave, long service leave and retirement leave. Annual leave and other entitlements that are expected to be settled within 12 months of reporting date are measured at nominal values on an actual entitlement basis at current rates of pay. Long-term Employee Entitlements Entitlements that are payable beyond 12 months, such as long service leave and retirement leave, have been calculated on an actuarial basis based on the present value of the estimated future cash outflows to be made by the Group in respect of services provided by employees up to reporting date. Superannuation Schemes Defined Contribution Schemes Obligations for contributions to KiwiSaver are accounted for as a defined contribution superannuation scheme and are recognised as an expense in the Consolidated Statement of Comprehensive Income as incurred. Australian Schemes The Group contributed to a number of defined contribution superannuation plans. Contributions to superannuation plans are based on percentages of employee gross salaries. Obligations for contributions are recognised as an expense in the Statement of Comprehensive Income as incurred.

33 $NZ 000 $NZ 000 Employment entitlements consists of: Holiday pay 1,178 1,127 Accrued salaries and wages 1,589 2,501 Other employee entitlements ,928 3,819 Current 2,776 3,640 Non-current ,928 3,819 The present value of retirement and long service leave obligations depend on a number of factors that are determined on an actuarial basis. Two key assumptions used in calculating this liability include the discount rate and the salary inflation factor. Any changes in these assumptions will affect the carrying amount of the liability. Expected future payments are discounted using discount rates prescribed by Treasury and calculated as at 30 June The salary inflation factor has been determined after considering historical salary inflation patterns and after obtaining advice from an independent actuary. A salary inflation factor of 2.5% was used. 17. Provisions Provisions Provisions are recognised when the Group has a present obligation (either legal or constructive) as a result of a past event, the future sacrifice of economic benefits is probable, and the amount of the provision can be measured reliably. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows. Make Good The Group has an obligation to return lease premises to the same condition as at the commencement of the lease. The amount recognised is the best estimate of the consideration required to settle this obligation. In many cases, the Group has the option to renew leases, which impacts on the timing of expected cash outflows to make good the premises. Assuming this is not exercised the first cash flows associated with this would occur in Insurance Excess The Group is subject to professional indemnity claims in the course of its business. The Group reassesses the likelihood of successful claims at least annually. The Group s current assessment is that the likelihood of an outflow is remote. Accordingly, the Group has reversed its previous provisions. Determination of any provision is subjective, with the settlement of claims being dependent on a number of factors including whether or not the claimant suffered loss. Restructuring The Group commenced a formal restructuring programme during the year ended 30 June 2015 and recognised a provision of $450,000. The restructuring programme was completed during the current period. 30

34 Restructuring Insurance excess Movement in provisions $NZ 000 $NZ 000 $NZ 000 $NZ 000 Gross carrying amount Balance as at 1 July , ,008 Amount reversed - (1,899) - (1,899) Amount provided Amount utilised - - (80) (80) Balance as at 30 June 2015 / 1 July Amount reversed - - (17) (17) Amount provided Amount utilised (450) - - (450) Balance as at 30 June Make good Total $NZ 000 $NZ 000 Current Non-current Foreign Currency Translation Reserve Foreign currency translation differences of foreign operations are recognised through other comprehensive income and accumulated in equity in a foreign currency translation reserve. Assets and liabilities of foreign operations are translated at the closing rate. Revenue and expense items are translated at Treasury mid month exchange rates over the year, as a surrogate for the spot rates at transaction dates. Exchange differences arising from the foregoing are taken through comprehensive income and then accumulated to a foreign currency translation reserve in equity. $NZ 000 $NZ 000 Balance as at 1 July Arising on translation of foreign operations (11) 21 Balance as at 30 June Exchange differences relating to the translation of AUD being the functional currency of Quotable Value Australia Limited into NZD are brought to account by entries made directly to the foreign currency translation reserve.

35 19. Retained Earnings and Dividends $NZ 000 $NZ 000 Balance as at 1 July 11,839 9,196 Profit for the year and attributable to the equity holders 15,973 4,586 Dividends paid during the year normal (2,114) (1,943) Dividends paid during the year special (22,000) - Balance as at 30 June 3,698 11, Reconciliation of Profit for the Period to Net Cash Flows from Operating Activities Cash means cash balances on hand, held in bank accounts, demand deposits and other highly liquid investments in which the Group invests as part of its day-to-day cash management. Operating activities include cash received from all income sources of the Group and record the cash payments made for the supply of goods and services. Investing activities are those activities relating to the acquisition and disposal of non-current assets. Financing activities comprise the change in equity and debt capital structure. $NZ 000 $NZ 000 Profit for the period 15,973 4,586 Depreciation Amortisation of intangible assets Foreign exchange movement (11) 21 Movement in provision for doubtful debts - (70) Loss (gain) on sale of property and equipment assets - - Share of profit of associate (1,094) (1,459) Reversal of provision for insurance excess - (1,899) Deferred tax Changes in net assets and liabilities: Decrease (increase) in receivables 1, Increase (decrease) in payables 427 (16) Increase (decrease) in provisions (444) 656 Increase (decrease) in employee entitlements (891) (412) Increase (decrease) in GST payable (23) (272) Increase (decrease) in tax payable Items classified as investing or financing: Gain on disposal of investment in associate (13,523) - Net cash from operating activities 2,710 3,527 32

36 21. Contingent Liabilities Bonds The Group has performance bonds for contracts undertaken in Australia together with rental bonds on properties occupied. The table below details the values associated with the Group for these bonds: $NZ 000 $NZ 000 Rental bonds Contract performance bonds 951 1,034 Total bond value 1,111 1,260 Professional Indemnity Claims The Group is not currently subject to any quantified or unquantified professional indemnity claims. The previous provisions recognised for these claims have been reversed (note 17). The Group may be liable to such claims in the future in the ordinary course of its business. Contract Dispute In the normal course of business the Group is involved in a legal dispute in respect of the performance of a supplier under contract. The company has made a counter claim and does not consider any liabilities will arise but as with all litigation this is uncertain. 22. Contingent Assets There are no contingent assets as at 30 June 2016 (2015: $Nil).

37 23. Commitments Statement Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases. Operating Leases Leases that do not transfer substantially all the risks and rewards incidental to ownership of an asset to Quotable Value Limited are classified as operating leases. Lease payments under an operating lease are recognised as an expense on a straight-line basis over the term of the lease in the Consolidated Statement of Comprehensive Income. Later than five years Later than one year and not later than five years Not later than one year $NZ 000 $NZ 000 Property leases payable Non-cancellable operating lease commitments payable: Not later than one year 1, Later than one year and not later than five years 1,627 1,584 Later than five years Total commitments 2,792 2,711 The Group has lease commitments primarily in relation to office rents, with smaller amounts outstanding for vehicle leases and office equipment leases. Most properties have the option of extending leases although these are reviewed at the time of renewal for necessity and continuation. There are no restrictions placed on the Group by its leasing arrangements. 34

38 24. Capital Management The Group s capital is equity, which comprises accumulated funds and other reserves. Equity is represented by net assets. QVL is subject to the financial management and accountability of the State-Owned Enterprises Act QVL manages its equity as a by-product of prudently managing revenues, expenses, assets, liabilities, investments and general financial dealings to ensure QVL achieves its objectives and purpose while remaining a going concern. 25. Subsequent Events There are no significant events subsequent to balance date.

39 36

40 Statement of Key Performance Indicators For the year ended 30 June 2016 Financial Performance Indicators The Board agreed the following financial targets with the Minister at the beginning of the year: Specified financial performance Group achievement SCI target Surplus after tax, impairment and amortisation before dividends ($000) $15,973 $2,206 Surplus after taxation and impairment/revenue 41.90% 5.52% EBIT/tangible assets % 23.85% Interest cover (EBITDA/interest) Shareholder return 66.51% 7.55% Dividend yield % 5.40% Dividend payout % % Operating margin 46.52% 10.84% Current ratio % % Net debt/net debt + equity ratio (maximum 30%) % 13.41% Return on equity 126.5% 17.25% Return on equity adjusted for IFRS fair value movements and asset revaluations 126.5% 17.25% Return on capital employed (EBIT/ave debt + equity) 163.4% 34.77% Non Financial Performance Indicators The Board agreed the following non financial targets with the Minister at the beginning of the year: Specified non financial performance Group achievement SCI target QV Customer Net Promoter Score is improved year on year Not Improved Improve Employee Engagement Scores (EES) are improved year on year Improved Improve Other non financial performance indicators for corporate social responsibility are: Achieved savings Target savings Power consumption Reduced Reduce Fuel consumption Reduced Reduce

41 Statutory Information For the year ended 30 June Directors Remuneration Directors of the Group during the year and remuneration and other benefits paid to the Directors by the Companies were $189,000 (Parent) (2015: $185,000), Subsidiaries NZ$39,000 (2015: NZ$26,000) and Associates NZ$7,000 (2015: NZ$10,000). Director Period Board $NZ 000 $NZ 000 Raewyn Lovett Full year Quotable Value Limited (Appointed Chair 1 May 2015) Full year Quotable Value Australia Pty Ltd 5 - Full year Darroch Limited 10 - Roger Bridge Full year Quotable Value Limited (Appointed Deputy Chair 1 May 2016) Full year Darroch Limited 10 2 Kim Wallace Full year Quotable Value Limited (Appointed 1 May 2012) Stephen Panckhurst Full year Quotable Value Limited (Appointed 1 March 2014) Candace Kinser Full year Quotable Value Limited 23 4 (Appointed 1 May 2015, Resigned 31 July 2016) Gary Traveller Part year Quotable Value Limited (Resigned 30 April 2016) Part year Darroch Limited 8 10 Ian Holland Part year Quotable Value Limited (Resigned 30 April 2016) Part year CoreLogic NZ Limited 7 10 William Osborne Part year Quotable Value Australia Pty Ltd - - (Resigned CEO 5 January 2016) Part year Darroch Limited - - Part year CoreLogic NZ Limited - - David Cameron-Brown Part year Quotable Value Limited 4 - (Appointed 1 May 2016) Neil Barr Part year Quotable Value Limited 4 - (Appointed 1 May 2016) Part year Darroch Limited 2 Jacquie Barker Full year Quotable Value Australia Pty Ltd - - (Appointed CEO 6 January 2016) Part year Darroch Limited - Greg Cate Full year Darroch Limited - - (Appointed 18 December 2014) Ben Driller Full year Quotable Value Australia Pty Ltd 4 3 (Appointed 1 July 2013) 38

42 2. Employees Remuneration Remuneration and other benefits of $100,000 per annum or more received by employees in their capacity as employees were: Group $100,000 $109, $110,000 $119, $120,000 $129, $130,000 $139, $140,000 $149, $150,000 $159, $160,000 $169, $170,000 $179, $200,000 $209, $210,000 $219, $220,000 $229, $230,000 $239, $240,000 $249,999-1 $250,000 $259,999-2 $260,000 $269, $280,000 $289, $300,000 $309, $340,000 $349,999-1 $430,000 $439, $680,000 $689,999-1 $1,260,000 $ 1,269, The Chief Executive to 5 January 2016 had remuneration and benefits (including a long-term incentive benefit) in the $1,260,000 $1,269,999 band (2015: $680,000 $689,000). The current Chief Executive had remuneration and benefits in the $430,000 $439,999 band. This includes remuneration and benefits earnt prior to her appointment as Chief Executive.

43 3. Interests Register A Directors interests register is maintained by the Board as listed below: Raewyn Lovett (Chair) Partner, Duncan Cotterill, Lawyers Chair, Auckland Sport Trustee, Christian Healthcare Trust Chair, Dunedin Venues Management Limited Director, Darroch Limited Trustee, Medicine Mondiale Charitable Trust Roger Bridge (Deputy Chair) Director, NZ Venture Investment Fund Director, NZ National Party Director, National Mortgage Underwriters Limited Managing Director, Oxbridge Limited Director, Allstor Self Storage Limited Director, Britannia Management Limited Director, Waterman Investments Limited Director, Allstor Self Storage (NZ) Limited Trustee Christchurch Arts Festival Trustee, ReStart the Heart Trust Chair, Rata Foundation Trustee, Community Involvement Trustee, Te Papa Directors, Advisory Board of Morrison Social Infrastructure Fund Hon Counsel General of Philippines (South Island) (Appointed 1 Aug 2015) Director, Darroch Limited Trustee, The Church Property Trustees Kim Wallace Director, Westland Milk Products Investments Limited (NB: all of following 100% wholly owned subsidiaries of Westland Co-operative Dairy Company Limited) Director, EasiYo Products (Aust) Limited Director, EasiYo Products (UK) Limited Director, EasiYo Products Limited (USA) Director, Westland Milk Products (Shanghai) Company Limited Stephen Panckhurst Shareholder & Director, Prestige Vehicle Importers Limited Shareholder, Lewis Road Creamery Limited Director, Ringa Matau Limited Director, Tahumatua Limited Director, Thode Knife & Saw 40

44 Candace Kinser Advisor, Palantir Technologies Director, EROAD Director, McCashins Brewing (Resigned 21 Mar 2016) Director, Talent International Board Trustee, Well Foundation Advisor, Superb Herb Company Advisory Board Member, University of Waikato Cyber Security Lab Director, Cloud Security Alliance (NZ Chapter) Advisory Board Member, Massey University School of Business (Resigned 17 Aug 2015) Director, Kinser Trustees Ltd Independent Director, Livestock Improvement Corporation (LIC) Neil Barr Director, Ignite Architects Ltd Director, Stratus Ltd, Management and Strategic Property Planning Consultants Trustee, Kilmour Properties Ltd, Property Investment Trustees Queen Street Trust Family Interests Director, Darroch Ltd David Cameron-Brown Trustee, Zolander Family Trust Director & Principal, Cameron-Brown Corporate Advisory Observer, Yellow Pages Group Director, Ringa Matau Limited Director, Tahumatua Limited The Board of Directors acknowledges that the Group holds Directors and Officers liability insurance arranged through Marsh for up to NZ$20 million limit of liability through Vero Liability Insurance (80%) and QBE (20%). 4. Donations Donations made by the Company and Group during the year ended 30 June 2016 were $Nil (2015: $Nil). 5. Actual Achievements Ratio of consolidated shareholders funds (equity) to total assets The table below shows the ratio of consolidated shareholders funds (equity) to total assets for the planning period: $NZ 000 $NZ 000 $NZ 000 $NZ 000 Actual SCI Group position Consolidated shareholders funds (equity) 8,547 8,393 10,260 11,810 Total assets 14,208 12,919 16,209 18,399 Ratio 60.16% 64.97% 63.30% 64.19% 6. Changes in Business of Company During the year ended 30 June 2016 there were no changes in the nature of business of the Company, which includes the provision of property valuation services, data and information.

45 Statement of Corporate Governance For the year ended 30 June 2016 Financial Statements The Directors of Quotable Value Limited (QVL) are responsible for preparing financial statements that give a true and fair view of the financial position of the Company as at the end of the financial year and the results of operations and cash flows for the year. The external auditors are responsible for expressing an opinion on the financial statements, based on their review and assessment of the conclusions drawn from evidence obtained in the course of the external audit. The financial statements set out in this report have been prepared by management in accordance with generally accepted accounting practice. They are based on appropriate accounting policies which have been consistently applied and which are supported by reasonable judgements and estimates. Board of Directors The Board of Directors retains full and effective control over the Company, monitors executive management and ensures that decisions on material matters are in the hands of the Board. The Chair of the Board of Directors is Raewyn Lovett. The Company had 11 full Board meetings during the year. Most full Board meetings take place in either Wellington or Auckland. In conjunction with these meetings, the Board and executive management team usually meet twice a year to review the Company s strategy and progress. Subsidiary Companies Quotable Value Limited (QVL) has a 100%-owned operating subsidiary, Quotable Value Australia Pty Limited (QVA) incorporated in New South Wales, Australia. The Directors of QVA are Raewyn Lovett (Chair of QVL), Jacquie Barker (CEO of QVL) and Australian resident company Director, Ben Driller. QVL has a 100%-owned operating subsidiary, Darroch Limited incorporated in New Zealand. The Directors of Darroch Limited are Raewyn Lovett (Chair of QVL), Neil Barr (Director of QVL), Roger Bridge (Director of QVL), Jacquie Barker (CEO of QVL) and Greg Cate (CFO of QVL). Internal Control To fulfil its responsibilities, management maintains adequate accounting records and has developed and continues to maintain an appropriate system of internal controls. The Directors acknowledge that they are responsible for the company s system of internal financial control. Internal financial controls implemented by management can provide only reasonable and not absolute assurance against material misstatement or loss. The Directors constantly review the effectiveness of the system of internal financial control. No major breakdowns were identified during the year in the system of internal control. After reviewing internal management financial reports and budgets the Directors believe that the Company and the Group will continue to be a going concern in the foreseeable future. For this reason they continue to adopt the going concern basis in preparing the financial statements. 42

46 Committees of the Board The Company has two standing committees during the year. They are: 1. The Finance, Audit and Risk Committee The Finance, Audit and Risk Committee comprised Kim Wallace (Chair), Stephen Panckhurst and David Cameron-Brown. The purpose of this committee is to oversee the financial management, external and internal audit functions and the overall risk management of the Company. The committee usually meets four times per year. 2. The Remuneration Committee The Remuneration Committee comprised Candace Kinser (Chair), Raewyn Lovett and Roger Bridge. It takes responsibility for the remuneration policy, executive remuneration and, in consultation with the Board, the CEO s performance review. Director and Board Appraisal The Board has a policy of formally evaluating its own performance, and that of the individual Directors, annually. Director Development The Board believes it is in the best interest of the Company to ensure that Directors will remain current with best corporate governance practice. The Company budgets a small amount each year to support the continued professional development of Directors.

47 44

48

49 Independent Auditor s Report To the readers of Quotable Value Limited group s financial statements for the year ended 30 June 2016 The Auditor-General is the auditor of Quotable Value Limited and its New Zealand domiciled subsidiaries and other controlled entities (collectively referred to as the Group ). The Auditor-General has appointed me, Stephen Lucy, using the staff and resources of Audit New Zealand, to carry out the audit of the financial statements of the Group on her behalf. Opinion We have audited the financial statements of the Group on pages 4 to 35, that comprise the statement of financial position as at 30 June 2016, the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year ended on that date and the notes to the financial statements that include accounting policies and other explanatory information. In our opinion the financial statements of the Group: present fairly, in all material respects: - its financial position as at 30 June 2016; and - its financial performance and cash flows for the year then ended; and comply with generally accepted accounting practice in New Zealand in accordance with New Zealand Equivalents to International Financial Reporting Standards and International Financial Reporting Standards. Our audit was completed on 19 September This is the date at which our opinion is expressed. The basis of our opinion is explained below. In addition, we outline the responsibilities of the Board of Directors and our responsibilities, and explain our independence. Basis of Opinion We carried out our audit in accordance with the Auditor-General s Auditing Standards, which incorporate the International Standards on Auditing (New Zealand). Those standards require that we comply with ethical requirements and plan and carry out our audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. Material misstatements are differences or omissions of amounts and disclosures that, in our judgement, are likely to influence readers overall understanding of the financial statements. If we had found material misstatements that were not corrected, we would have referred to them in our opinion. An audit involves carrying out procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgement, including our assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the preparation of the Group s financial statements 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 Group s internal control. 46

50 An audit also involves evaluating: the appropriateness of accounting policies used and whether they have been consistently applied; the reasonableness of the significant accounting estimates and judgements made by the Board of Directors; the adequacy of the disclosures in the financial statements; and the overall presentation of the financial statements. We did not examine every transaction, nor do we guarantee complete accuracy of the financial statements. Also we did not evaluate the security and controls over the electronic publication of the financial statements. We believe we have obtained sufficient and appropriate audit evidence to provide a basis for our audit opinion. Responsibilities of the Board of Directors The Board of Directors is responsible for the preparation and fair presentation of financial statements for the Group that comply with generally accepted accounting practice in New Zealand. The Board of Directors responsibilities arise from the State-Owned Enterprises Act The Board of Directors is also responsible for such internal control as it determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. The Board of Directors is also responsible for the publication of the financial statements, whether in printed or electronic form. Responsibilities of the Auditor We are responsible for expressing an independent opinion on the financial statements and reporting that opinion to you based on our audit. Our responsibility arises from the Public Audit Act Independence When carrying out the audit, we followed the independence requirements of the Auditor-General, which incorporate the independence requirements of the External Reporting Board. Other than the audit, we have no relationship with or interests in the Group. S B Lucy Audit New Zealand On behalf of the Auditor-General Wellington, New Zealand

51 Directory For the year ended 30 June 2016 Raewyn Lovett Director (Chair) Gary Traveller (to 30 April 2016) Director (Deputy Chair) Ian Holland (to 30 April 2016) Director Roger Bridge Director Kim Wallace Director Stephen Panckhurst Director Candace Kinser (to 31 July 2016) Director Neil Barr (from 1 May 2016) Director David Cameron-Brown (from 1 May 2016) Director Jacquie Barker (from 6 January 2016) Chief Executive Officer Greg Cate Chief Financial Officer John Baillie General Manager Human Resources and Corporate Services Justin Snarski Chief Marketing Officer Head Office QV House, 22 Nevis Street, Petone Postal Address Private Bag 39818, Lower Hutt 5045 Telephone Facsimile Website QVgroup.qv.co.nz Auditor Audit New Zealand, Wellington, New Zealand on behalf of the Controller and Auditor-General Bankers Westpac Banking Corporation Solicitors DLA Piper New Zealand Insurance Brokers Marsh Limited Printed on sustainably produced paper