Annual Report 2012 - The Australian Property Institute

Annual Report 2012 - The Australian Property Institute

Annual Report 2012

The Australian Property Institute Annual Report | 2012IMAGE2

ContentsAPI’s Vision and Goals....................................................................................................... 5President’s Address ......................................................................................................... 8CEO | National Director’s Report ...................................................................................... 12National Education Board ................................................................................................ 13Professional & Technical Standards ................................................................................. 14Information Technology & Communications ..................................................................... 16Finance ............................................................................................................................ 18International ..................................................................................................................... 20Thanks and Acknowledgements ....................................................................................... 21Divisional Highlight Reports .............................................................................................. 22The Australian Capital Territory Division ............................................................................ 24The New South Wales Division ......................................................................................... 26The Queensland Division .................................................................................................. 30The South Australian Division ............................................................................................ 32The Tasmanian Division .....................................................................................................34The Victorian Division.........................................................................................................36The Western Australian Division .........................................................................................40API Overview .................................................................................................................... 44National Organisational Chart ........................................................................................... 46API Divisional Offices ........................................................................................................ 48Financials ......................................................................................................................... 50In Memoriam .................................................................................................................... 94

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The Australian Property Institute Annual Report | 2012API’s VisionThe Australian PropertyInstitute’s vision is to be thepremier property professionalorganisation in Australia.5

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The Australian Property Institute Annual Report | 2012In order to maintain the high level of educational standardsexpected of property professionals, the API has developedminimum standards which our partner universities exceed.Future Property Professionals(FPP) programThe FPP program has been developed by the API to furthercontextualise the knowledge gained by recent universitygraduates and to enable the practical application of theseskills in the workplace.The launch of the program has been a phenomenalsuccess for the API. In excess of 1500 modules wereenrolled in by about 200 applicants since its compulsoryinception in July 2012. The FPP program is continuallyunder development. Further modules are beingdeveloped, the delivery platform is being improvedand other modules are being updated and refined.Risk Management Module (RMM)The RMM was launched in July 2012 for members and nonmembersundertaking valuations. The module has been offeredextensively in face-to-face format by Divisions and online.Expansion of Membership PathwaysNEB has been requested by National Council to reviewand enhance membership pathways for those seeking APImembership. A formal review is currently occurring with thedevelopment of practical and logical pathways to membershipof the API for all property professionals.In excess of1500 modules wereenrolled in by about200 applicants11

The Australian Property Institute Annual Report | 2012CEO | National Director’s ReportThe evolution of an industry professional association such as the API ultimately serves to protectconsumers by raising the bar of accountability and ethical principles of all members, beyond therequirements of the law – ethical principles, practice standards and conduct rules that underpinprofessional property practice. It is these standards, rules and obligations that sit at the heartof any profession.As a national professional association, we will be measuredby the results that we produce. Some of our work is highlyvisible, but on the whole it’s mostly the quiet, behind thescenes action that brings about the kind of changes that willsee our Institute grow in stature over time.Independent Appointmentsfor Good Governance:Firstly, I would like to highlight the two key appointmentsin 2012: Lawyer Chris Shaw from Sydney has been appointedas a totally independent, non-API member to National Council;and the equally important appointment of independentnon-member Peter Worsnop from Canberra to the NationalFinance Board. Both will hopefully provide fresh viewpointswhile serving on their respective boards.Structure and Governance Review:Secondly, we are well underway with the API’s Structureand Governance Review process being undertaken byNational Council, with the assistance of John Buxton of DibbsBarker Lawyers in Canberra.All API governing instruments are being subjected to afull and comprehensive review in order to ensure compliancewith current legislation and case law in order that Directors(National Councillors) can be satisfied they can appropriatelydischarge their obligations on National Council. The API needsto create a commercial performance culture. We need toconstantly review and implement job specifications, appraisals,development plans and align API values with employee values.This can be achieved by implementing a new organisationalstructure that is aligned to a modern professional association,and removing the remaining silos.Industry-Leading Capped LiabilityScheme for Valuers (APIV):The recently formed APIV is now considered a benchmarkby the Professional Standards Council (PSC) among the otherprofessional service associations as the leading professionalindemnity program. The PSC administers similar programs forlawyers, accountants and other professions. The scheme nowhas more than 2500 members and has started to reap resultsin the reduction of some members’ premiums after the firstyear of operation.The Australian & New ZealandProperty Journal (ANZPJ):The ANZPJ is now one of the most read business journalsin Australia and is now available at selected newsstands, theQantas lounge and on iTunes. It is delivered each quarter toevery member, both nationally and internationally.Members First and MembershipEntry Pathways:Our continued member focus will ensure we build aprofessional community and professional solidarity. To thatend, we are working to broaden membership pathways intothe Institute and will evaluate every engagement point withmembers to ensure a relevant and engaged support structure.Engaging our member communities at a local level allows forreview and measurement of Divisional and National Officeperformance.In the end, our goal is to build a financially sustainableorganisation and maximise the use of member and nonmemberincome by improving operational efficiency.12

The Australian Property Institute Annual Report | 2012National Education BoardThe National Education Board (NEB) develops, implements and maintains the academicentry requirements for API members. The NEB is responsible for the development of suitablemembership pathways and the training that accompanies Institute membership. NEB has deviseda Charter to guide NEB into the future and provides a framework for NEB to work within.Members of the NEB for 2012 were: Mike Hefferan (Chair), Chris Eves, Vince Mangioni, Richard Feenaghty, Marcia Bowden,Richard Reed, Tim Grant, Clyde Eastaugh, Brooke Parish, Mario Palandri, Greg Costello and Andrew Cubbins as the NationalCouncil Representative.Accreditation / EndorsementThe National Accreditation Board accredits and endorsescourses offered by partner universities around Australia.In order to maintain the high level of educational standardsexpected of property professionals, the API has developedminimum standards which our partner universities exceed.In 2012, two accreditations were undertaken – theUniversity of Melbourne and the Queensland University ofTechnology. Accreditations planned for 2013 include BondUniversity, Central Queensland University, University ofTechnology Sydney and the University of New South Wales.Future Property Professionals(FPP) programThe Future Property Professionals (FPP) program has beendeveloped by the API to further contextualise the knowledgegained by recent university graduates and to enable thepractical application of these skills in the workplace. Theprogram was launched as compulsory for all those seekingProvisional Membership PMAPI with Residential PropertyValuer designation (RPV) and Associate Membership AAPIwith Certified Practising Valuer (CPV) in mid-2012.Risk Management Module (RMM)The Risk Management Module was launched in July 2012for members and non-members undertaking valuations.The module was offered extensively in face-to-face format byDivisions and online. The current 2012 version of RMM willcontinue to be available as face-to-face seminars and onlineuntil the end of 2014. The API developed a suite of modulesavailable for valuation members, targeting various areas ofprofessional practice.MembershipNEB has been requested by National Council to reviewmembership pathways for those seeking API membership.A formal review is currently occurring with practical and logicalpathways to membership and membership progression to bedeveloped.The launch of the program has been a phenomenalsuccess for the API. In excess of 1500 modules were enrolledin by about 200 applicants since its compulsory inception inJuly 2012. The FPP program is continually under development.Further modules are being developed, the delivery platformis being improved and other modules are being updated andrefined.13

The Australian Property Institute Annual Report | 2012Professional& Technical StandardsAustralian Property Standards BoardThe Australian Property Standards Board (APSB),established with effect from 1 January 2012, is responsible forthe development and implementation of property (excludingvaluation), technical and professional policy matters on behalfof members of the Institute, nationally.The APSB will develop and provide technical andprofessional policy advice on matters relating to the variousproperty disciplines (excluding valuation) represented withinthe Institute’s membership and any other business of theInstitute falling within the scope of the Board’s professionalexpertise as directed by National Council, including thefollowing matters:• Provide vision and leadership to industry in thearea of property related professional standards;• Promote the highest levels ofprofessionalism amongst members;• Anticipate and respond to future trends thatmay impact the property profession;• Participate with other relevant organisations ontechnical and professional property issues;• Provide clarity to members on technicaland professional property issues;• Develop property-related Practice Standards,Guidance Notes and Information Papers;• Professional and Technical property mattersimpacted by Commonwealth legislation;• Professional conduct.Australian ValuationStandards BoardThe Australian Valuation Standards Board (AVSB),established with effect from 1 January 2012, is responsible forthe development and implementation of valuation technicaland professional policy matters on behalf of members of theInstitute, nationally.The AVSB will develop and provide technical andprofessional policy advice on matters relating to valuationproperty disciplines represented within the Institute’smembership and any other business of the Institute fallingwithin the scope of the Board’s professional expertise asdirected by National Council, including the following matters:• Provide vision and leadership to industry in thearea of valuation professional standards;• Promote the highest levels ofprofessionalism amongst members;• Anticipate and respond to future trends thatmay impact the valuation profession;• Participate with other relevant organisations ontechnical and professional valuation issues;• Provide clarity to members on technicaland professional valuation issues;• Develop valuation-related Practice Standards,Guidance Notes and Information Papers;• Professional and Technical valuation mattersimpacted by Commonwealth legislation;• Professional conduct.APSB Members:Nick McDonald-Crowley (Chairman), Ian Dalgarno, PaulMautz (PINZ), Robyn Grosvenor, Robert Tew, John WebsterSC, Georgia Warren-Myers, Enzo Evangelista and JaneO’Connor.AVSB Members:Cameron Harris (Chairman), Roy Farthing, Chris Stanley(PINZ), Sue Lightfoot (AASB), Greg Cummins, Jason Oster,Sue Morley, Greg Preston, Bob Dupont, Matthew Page, NeilBray, David Leggatt and Richard Stewart (Business ValuersSpecial Interest Group).Both Boards are chaired by a representative from National Council with administrative support by National ProfessionalStandards Manager, Tony McNamara.14

The Australian Property Institute Annual Report | 2012The purpose of the codeis to ensure that highstandards of corporate andindividual behaviour areobserved by all membersPractice Standardsand Guidance NotesThe primary focus of both Boards in 2012 has been thecommencement of a review of the Professional PracticeManual, in particular as it relates to the various GuidanceNotes. The intent is that the guidance notes be reviewedand re-issued as Technical Information Papers in line withthe current International Valuation Standards Council (IVSC)documentation.IVSC Draft Discussion Paper – The Valuation ofTrade Related PropertyFollowing the release of the Draft Discussion Paper inAugust 2012 the Australian Property Institute provided aresponse to the issues raised.The Boards, together with the Future Valuations Taskforceheaded by Robert Hecek, has continued to provide guidanceto members through the national e-news and member alerts.Submissions were made in 2012 in response to thefollowing IVSC publications:IVSC Exposure Draft – A Competency Framework forProfessional ValuersFollowing the release of the Exposure Draft in December2011 the Australian Property Institute provided a responseto the issues raised.IVSC Exposure Draft – The Role of the ProfessionalValuer in the Audit ProcessFollowing the release of the Exposure Draft in June 2012the Australian Property Institute provided a response to theissues raised.IVSC Draft Discussion Paper – Valuations in theExtractive IndustriesFollowing the release of the Draft Discussion Paper in July2012 the Australian Property Institute provided a responseto the issues raised.15

The Australian Property Institute Annual Report | 2012Information Technology2012 saw the continued delivery of the National IT Strategy & Data Plan, the goal of whichis to increase reliability and performance of the Institute’s systems and processes.Further improvements are scheduled for 2013, confirming the API’s investment in revolutionisingthe API’s technology platform.The key deliverables of 2012 were:• Further investment into Cloud hosting solutions• Improved Coresoft Application delivery platform• Commencement of a unified technology/communications strategy• Technology infrastructure upgrades.The ongoing investment into Cloud technology continuesto deliver substantial cost savings and advanced security andprivacy measures to the API. The API employs both Saas andIaaS (Software as a Service, and Infrastructure as a Service)to deliver a comprehensive Cloud solution.The API’s data hosting solution, provided by AWS (AmazonWeb Services), ensures that member data is secure. The datahosting solution is Level 1 compliant, under the Payment CardIndustry (PCI) Data Security Standard (DSS).The data centres and services employed by the API datahosting solution has achieved ISO 27001 certification. ISO27001 is a global security standard that sets out requirementsand best practices for a systematic approach to managingcompany and customer information based on periodic riskassessments.In 2013, the API plans to move its data hosting solutionto Sydney from Singapore. This will assure a more reliableconnection to its servers and reduced latency issues.A national procurement policy for IT hardware, softwareand services has been in discussion for the last few years.The policy should be implemented by the beginning of 2013and the API expects a considerable reduction in IT costs anddramatically improved service delivery.16

The Australian Property Institute Annual Report | 2012CommunicationsContinued investment into member benefits saw the ongoing delivery of the communicationsstrategy. Committed to increasing member services, the API sustained its investment into the APIsuite of websites, products and services.The Find a Property Professional online directory wasimplemented in 2012. The service has dramatically grownto become the ‘go-to’ place to find API members and theirservices.A secure member area on the API website, the MemberPortal, began its development in 2012. The portal is aninteractive area of the website that permits members to loginand update their details, register for events and pay for APIservices.The first stage of the Member Portal has been delivered asthe ‘back end’ (login area) of the Find a Property Professionalonline directory. It is expected to be completely implementedby mid to end 2013.Development of the API Events website commenced in2012. The Events website promotes API events and permitsregistration and payment. Delivery of the online application isexpected in mid-2013, while implementation into the Institute isexpected by mid to end 2013.The new look Australia and New Zealand Property Journal(ANZPJ) was well received in 2012, for the first time appearingelectronically on iOS and Android platforms.In 2013, the ANZPJ will merge with the API e-News,forming a new property news channel for the API.Advertising sales were up in both publications from 2012,with the expected growth to continue through 2013. It isimportant to recognise the lack of advertising managementof the ANZPJ over the past decade, resulting in the continualdecline of advertising revenue.As through 2011, the API continued its social mediagrowth, gathering regular followers in excess of 5000 people.Facebook is the API’s most frequented social media platform,while LinkedIn is the API’s most utilised.You can join the discussion

The Australian Property Institute Annual Report | 2012FinanceThe National Finance Board (NFB) has the responsibility to ensure that all assets, liabilities,income and expenditure of the Institute are properly managed and accounted for, and that thefinancial impacts of all strategic plans and changes are properly assessed and budgeted. Inaddition, the NFB is entrusted with the financial management of the Institute’s Research TrustFund and Institute’s Awards Trust Fund.National Finance Board: Milton Cations (Chair), Philip Western, Tony Gorman, Robert Smyth, Peter Worsnop.The API Chief Financial Officer is Andrew Tregenza.The Australian Property Institute financial accounts for theyear ended 31 December 2012 have been finalised and havebeen audited by RSM Bird Cameron.During 2012, further investments have been made toenhance the functionality of the API Website including thelaunch of ‘Find a Property Professional’ online directory. Theonline education platform was further enhanced in 2012 withthe Institutes Risk Management Module being offered onlinefor the first time. Further enhancements were also made to theAPIV Limited CRM system.The 2012 net deficit after income tax expense for API Incwas $160,245. This includes amortisation and depreciationexpenses totaling $297,605.The 2012 net deficit for the Economic Entity (API Inc andControlled Entities) was $371,609. This includes amortisationand depreciation expenses totaling $381,482, which alsoincludes depreciation on API-owned buildings in ACT; NSW;QLD; VIC and WA.Scheme. Amortisation costs are also higher (up 25.3%) whichreflects the high level of capital project expenditure overthe last three years. This higher expenditure was offset byreduced expenditure on Professional Expenses (down 30.9%);Meeting and Travel (down 12.8%); and Project Expenses(down 6%).The main income streams for the Institute in 2012 weremembership subscriptions $4.28M, Education & TrainingIncome $2.5M, Publication Sales $0.31m.Major expenditure items for the year related to Employeerelatedexpenses $3.6M; Education & Training Costs $1.3M;Publications and Product Costs $0.38M.At the end of 2012, the Institute held net assets totaling$11,344,860, including cash holdings of $3,105,050.Total Income for 2012 increased by 9.3% from 2011, dueprimarily to an increase in Education and Training income (up22.9%) as a result of the updated Risk Management Modulereleased during the year. 2012 Members Services incomeincreased by 8% from 2011 as a result of significantly more APImembers joining the APIV Limited Capped Liability Schemeduring the year.Expenditure for 2012 increased by 7.2% from 2011. Thisreflects higher Member Service Costs (up 262.4%) paid tothe Professional Standards Council as a result of a significantincrease in members joining the APIV Limited Capped Liability18

The Australian Property Institute Annual Report | 2012InternationalThe International Committee (IC) is responsible for the Institute’s international affairs inaccordance with the terms of the terms of reference contained in the by-laws on behalfof members of the Institute on a national basis. During 2012, the IC met during February inMelbourne and this year was the lead organising Committee for the Pan Pacific Congressheld in Melbourne in October.International Committee: James Pledge (Chair), David Moore, John Martin, Greg McNamara and Chris Stanley.National Office support is through the National Director.2012 OutcomesThe API agreed to host the 26th Pan Pacific Congress ofReal estate Appraisers, Valuers and Councillors in Melbournein October 2012. The primary focus of the IC was to assist withthe formal hosting of international delegations and to providethe Chief Delegate as host for the Congress. David Moore,Past National President, IC Member and current member ofthe Western Australian Division successfully fulfilled this role.A distinguished selection of international and Australianspeakers took to the stage at the Pan Pacific Congress,enabling the Institute to host over 350 delegates from the region.The IVSC series of meetings held in Milan and attendedby John Martin, Past National President and member of theWestern Australian Division, were extremely productive andachieved a high level of engagement by those in attendance.More importantly, there is a real sense of achievement afterseveral positive actions concluded in 2012. The Board ofTrustees, Standards Board and Professional Board andthe Advisory Forum will be relying more on members andsponsors to drive the IVSC to achieve the aims and objectivesoutlined in the strategic plan.The appointment of Sir David Tweedie as Chair of the IVSCBoard of Trustees is seen as a very positive one given hiswealth of knowledge and experience.During 2012, the Institute continued with strengthening therelationship between the API and the Property Institute of NewZealand (PINZ). Special thanks goes to Chris Stanley fromPINZ for his support. Following on from the recommendationfrom the International Committee, the Institute will progressthe establishment of relationships with kindred organisationsacross South East Asia, both directly and indirectly throughthe ASEAN Valuers Association (AVA). David Moore, PastNational President, IC Member and current member of theWestern Australian Division, attended the AVA Conferenceheld in Brunei this year. The establishment of formalrelationships with kindred organisations in other countriesfacilitates the transportability of property professionalsbetween countries as well as providing a mechanism forestablishing a consistent approach to professional andtechnical standards.The Board of Trustees is now responsible for theappointment of the Advisory Forum chair. The bylaws havebeen amended so as to allow the Board of Trustees to beresponsible for the appointment of the Advisory Forum chairand up to 12 members on the working group. John Martin,Past National President and member of the Western AustralianDivision, has been appointed for a further term of 12 months asChairman of the Advisory Forum.20

The Australian Property Institute Annual Report | 2012Thanks & AcknowledgementI would like to thank all National Councillors: Tony Gorman (Senior Vice President), RobertHecek (Vice President), Nick McDonald Crowley (Immediate Past President), Andrew Cubbins(TAS), Cameron Harris (QLD), Milton Cations (VIC) and Mark Kay (SA) and Chris Shaw (LegalAdvisor) for their enormous contribution throughout the year.2012 was a year of challenges and changes. I am pleased to report that the API, throughNational Council, the National and Divisional Council teams as well as our dedicatedvolunteers, further cemented the Institute as the property industry’s peak professional body.As a result, the API is well positioned to meet the ongoing challenges of the future.During my 24 months as National President, I took the opportunity to visit all Divisions onnumerous occasions and engage face-to-face with the membership to better understand howwe can improve services and remain relevant to members’ needs and expectations.Some of the key points I gained from these discussions included: the need to ensure thatour CPD programs remain relevant to our diverse membership; that the Australia and NewZealand Property Journal has a more practical and wider orientation; that we ensure ourmembership is more conscious of the products and services available through API; and howthose services and API staff can better assist them.I’m confident that the steps we’ve taken over the past few years have helped ensure thelong term future of Australia’s premier property membership organisation.I’d like to thank all API team members – both permanent employees and volunteers – fortheir collaboration, dedication and support during my two years as National President. I amconfident that the API will continue leading the way, finding fresh ideas and smart solutions toensure the Institute preserves and enhances its relevance for Australia’s property professionals,both now, and for the future.Best wishes to all members, and thank you for the opportunity to serve the Institute.Thanks team!Philip Western, FAPI National President21

The Australian Property Institute Annual Report | 2012ACT DivisionIn 2012 Paul Powderley was resoundingly re-elected President of the ACT Division ofThe Australian Property Institute for a second term. His energy and commitment areacknowledged and appreciated by the ACT Divisional Council.The ACT Divisional Council produced anotherbudget surplus and with input from variousAPI Committee members, the CPD Committeearranged interesting and informative industryevents providing API members and non memberswith good networking opportunities.After 24 years of involvement with TheAustralian Property Institute and Divisional Council,Richard Swinbourne, Life Member retired from theCouncil. The API and the ACT Divisional Councilhave appreciated and benefitted greatly from hiscontribution.The ACT Division also give thanks to the hardworking CPD Committee, ACT Divisional Counciland Cathy Sirel the ACT Executive Officer.Continuing ProfessionalDevelopment (CPD)The 2012 Continuing Professional DevelopmentProgram had another successful year thanks tothe combined efforts of the Divisional Presidentand the new CPD chair Adam Howarth.The recent Industry Forum combined with theDivisional AGM had over 100 people in attendance.Speakers included John Miller, Executive Directorof the ACT Master Builders Association; St GeorgeBank Economist, Jano Chan; and Paul Weightman,Managing Director/CEO of the Cromwell PropertyGroup. Attendees were provided with a goodoverview of the global economy, issues affectingthe construction industry and property investmentissues particular to the ACT.Andrew Barr MLA, ACT Deputy Chief Ministeralso provided an update on current economicfactors specific to the ACT.The ACT Government, Economic DevelopmentDirectorate presented the transformational City toLake Plan that is now in the consultation phase.The 10 – 15 year plan for the West Basin of LakeBurley Griffin includes a stadium, convention centre,urban beach, parks, mixed use developments andassociated infrastructure including light rail, with apopulation of 15,000 to 20,000 people planned forthe new precinct.The API Christmas drinks combined with theCommercial Property Market Wrap presented byAndrew Balzanelli, Managing Director of JonesLang LaSalle, has become a popular fixture on theCPD calendar.The ACT Risk Management Module was heldon Saturday 11 August and presented by MrAndrew Sharpe, a partner of DLA Piper, with 74 inattendance.Excellence in Property AwardAnother successful API Excellence inProperty Awards function was held in 2012 withsponsorship from the Village Building Company;Meyer Vendenberg Lawyers and ACT Building& Construction Industry Training Authority muchappreciated.24

The Australian Property Institute Annual Report | 2012The Property Development Award wasawarded to 22 Lonsdale Street Pty Ltd fortheir Mode 3 development, a new mixed usedevelopment on the northern fringe of the CPD.The Property Industry Award was presentedto Meyer Vandenberg Lawyers, a long-standinglegal company very active in the ACT commercialproperty sector.The Young Achiever of the Year was AdamHowarth of CBRE for his achievements in theproperty valuations sector.Government & Industry LiasonThe ACT API Division have representativeson the Residential Advisory Committee and theCommercial Advisory Committee. The Committeesare made up of property industry leaders, industryrepresentatives and government representatives.Matters relevant to the commercial propertymarket and the residential market are discussedsuch as the supply of land, government land saleresults and upcoming land releases.ACT Government representatives providepresentations on current development pipelines,building approval data, land supply strategies andland release targets.Other matters of relevance include planningamendments. API Divisional representatives provideinput to the committees and back to the DivisionalCouncil.25

The Australian Property Institute Annual Report | 2012New South Wales Division2012 was a successful year for the NSW Division, with 477 membership applications,advancements and transfers processed, and 109 professional interviews conducted.An additional 13 people were inducted under the Property Leaders’ Program.The Divisional Council generously gave theirtime and support throughout the year to helpshape the NSW Division. The 2012 DivisionalCouncillors were:• Robert Dupont (President)• Tyrone Hodge (Senior Vice President)• Kyle Richardson (Junior Vice President)• Robert Hecek (Immediate Past President)• Philip Western (NSW National Councillor)• Camilla Bradley• Philip Lyons• Russell McKinnon• Ian Muir• Greg Preston• Geoff Robinson• Robert Rowlands• John Sheehan• John Talbot• Michael WardContinuing ProfessionalDevelopment (CPD)2012 was a very busy year for the CPDprogram. Well over 2,500 delegates attended 58events throughout the year, including 21 valuationrisk management modules.The annual Country Conference was held inNewcastle, with approximately 120 delegates.Luke Chandler, Global Head, AgriculturalCommodity Markets Research at Rabobank,presented the keynote address on Australia’seconomic outlook. Other speakers focused on thecarbon tax, mining and exploration compensation,and the effect of wind farms on property values.In August, approximately 250 delegatesattended the 48th Kiparra Day in Sydney. BillEvans, Managing Director and Global Head ofEconomics and Research at Westpac BankingCorporation, presented the keynote address, andtopics covered on the day included populationgrowth, climate change and institutionalinvestment.The fourth joint Profitable SustainabilityConference was held with the Property FundsAssociation of Australia, and focused on indoorenvironment quality and environmental upgradeagreements. The event was opened by the Hon.Robyn Parker MP, NSW Minister for Environmentand Heritage, and the keynote address waspresented by John Goins from the Universityof California, Berkeley, Centre for the BuiltEnvironment.26

The Australian Property Institute Annual Report | 2012Eureka Funds ManagementYoung Achiever of the YearCarina CowhamPayce Communities LocalGovernment AwardForbes Shire Council for 2012 developmentsThe Office of the ValuerGeneral Heritage AwardCity of Sydney for VictoriaPark Gardener’s LodgeDuring 2012, awards for academicachievement were presented to students fromall educational institutes offering API-accreditedcourses. These awards reward and acknowledgefuture property professionals, and reinforce theAPI’s commitment to best practice in all areas ofproperty.The winners were:University of Technology, SydneyBachelor of Business and Commerce(Property): Year 1 – David Hore; Year 2 –Matthew Shun Fa Yang; Year 3 – Kristie-AnnSpasevski and Lauren van Aanholt; Year4 – Michael Rogers; Gold Medal – NicholaWatson; project prize – Benjamin Geyer.OTEN TAFE NSWAdvanced Diploma ofProperty (Valuation):Best overall graduating student: CraigBarrass and Mark Museth (joint winners)University of Western SydneyMaster of Commerce (PropertyInvestment and Development):Best overall student – Timothy CooperBachelor of Business andCommerce (Property):Best project – Chasse Ede; Bestoverall student – Richard Ward; Year1 – Adam Gruchot; Year 2 – DominicHanna; Year 3 – Richard Ward.Several of our members were also presentedwith awards, recognising their outstanding careerachievements. Robert Hecek was awarded the SFWhittington Gold Medal; Norman Harker and WalDobrow received Meritorious Service Awards; andRalf Rendall was awarded the Brian Bowles GroupChairman’s Award.Master of Commerce (PropertyInvestment and Development) prize:William Mitchell28

The Australian Property Institute Annual Report | 20122012 was avery successfulyear for the YPPYoung PropertyProfessionals (YPP)2012 was a very successful year for the YPP,with four successful events held. Many speakersvolunteered their time to educate young NSWproperty professionals, providing industry insightsand bolstering the calibre of the YPP program. Thefirst three events of the year focused on foreigninvestment, new precincts within inner Sydney,and women in property, while the final event for2012 was the always popular end of year drinks.The student presence at all events rose in 2012,which is a reflection on the committee’s work inincreasing the YPP presence at tertiary campuses.The NSW Division would like to thank allmembers of boards and committees whogenerously contributed their time and expertiseduring 2012 for the benefit of API members.29

The Australian Property Institute Annual Report | 2012Queensland Division2012 has been another active and successful year for the Queensland Division.The Divisional Council has continued to work throughout the last year on improvingmembership services and the profile of the API for the benefit of members.Our Division once again conducted two of thelargest events run by the API across the country:our Economic Indicators Lunch in February (cobrandedwith Finsia) and our annual QueenslandProperty Conference. Our CPD events continue toattract record numbers of attendees and provide avariety of subject material and enjoyable fellowshipfor members.These events are also continuing to attractlarge numbers of non-members, which is astrong endorsement of the quality of the contentand speakers at these events. The QueenslandDivision is very proud of the quality and diversityof our CPD program. The engagement level acrossa state with such a scattered membership baseproves how well our program is received.There were a number of particular issues thatarose throughout the year on behalf of membersand it is important that all members are aware ofthe ongoing activities that are completed on theirbehalf.These are as follows:• Members of the API who are active in thevaluation of residential properties have beensubject to ongoing comments from thedevelopment sector about the accuracy ofresidential valuations. The API has addressedthese concerns throughout 2012 by assistingthe Australian Bankers Association withthe drafting of the new standard residentialvaluation instructions which have now beenapproved for use by the ABA. The API hasalso met with representatives of the PropertyCouncil of Australia, The Urban DevelopmentInstitute of Australia, The Master BuildersAssociation and Housing Industry Associationto outline the role of members of the APIin this field. The API undertook to addressthe issues affecting this market sector andhas included a module on this subject inthe compulsory RMM course conducted in2012. The API has also conducted specificresidential valuation seminars in South EastQueensland in 2012. The API has advisedthese other Professional Associations of itsactivities and that it has met its undertakingsin this regard. The API has held discussionswith State Treasury and State Development inrelation to ongoing professional developmentand education of members who are active inthis market sector.• The mentoring program for our youngprofessional and student members wasintroduced in 2011 and continued in 2012and now into 2013. This program involvesa number of senior and junior members ofthe API throughout the state. The successof the 2013 program will be reviewed by theYPP Committee to ensure that this programcontinues to meet the needs of youngermembers.30

The Australian Property Institute Annual Report | 2012• A constant concern to members has beenthe lack of disclosure of GST within salestransactions in searchable State Governmentand other public records. An approachhas been made by the API together withrepresentatives of the Queensland StateValuation Service to the Queensland Officeof State Revenue (OSR) to request anamendment to relevant property sales transferdocuments in an attempt to identify GSTwithin all transactions. Continued discussionsand submissions are being made to theOSR, the State Valuation Service and theQueensland Law Society to progress thisissue in the public interest and to assistvaluers in the correct analysis of propertysales evidence. It is hoped that this may reachfinalisation in 2013 after more than 12 monthsof negotiations and discussions.• Three API members were elected to StateParliament at the 2012 elections. Thesemembers were Anne Maddern and SteveMinnikin on behalf of the LNP in the seatsof Maryborough and Chatsworth, and RobKatter on behalf of Katter’s Australia Party inthe seat of Mt Isa. We congratulate each ofthese API members on their election to StateParliament.31

The Australian Property Institute Annual Report | 2012South Australian Division2012 was one of significant change and evolution for the SA API. The year started on ahigh, with the exciting and long awaited relocation of the South Australian Divisional officeto 22 Beulah Road Norwood. The new office features a large contemporary boardroom,dedicated interview room, library area and refurbished administrative area with substantialcar parking. We now have premises that allow for future growth while also providing onsiteresource facilities for members and opportunities to hold training in-house.We continue to receive support from a numberof our business partners, with these relationshipsproving to be vital in providing ongoing benefit toour members. We partnered with the Real EstateInstitute of South Australia (REI), Law Society ofSA and Australian Institute of Conveyancers towork through a consultative process with theLand Services Group (LSG). Our main goal wasto achieve cost savings for members in relation toonline historical property searches, tools which arevital to the research for many property operators.We cannot forget that our local API plays avital part of a larger, national organisation withmany of the services and resources available toour members initiated and supported through ournational body. In turn, our local Division continuesto work tirelessly as part of the national API withdivisional councillors elected to various boardssuch as the National Education Board, AustralianValuation Standards and Australian PropertyStandards Boards and National Council.From 1 July 2012, the National Future PropertyProfessionals Program became compulsory for allnew members seeking Provisional Membershipwith Residential Property Valuer and AssociateMembership with Certified Practising Valuerdesignations. Members have clearly embracedthe Program with more than 1,350 online modulescompleted since that time. Feedback fromparticipants has been excellent and the FPPProgram will ensure that our membership hasthe prerequisite skills and knowledge to ensurethat the profession remains at the forefront of theproperty industry.July also saw the introduction of the RiskManagement Module 2012 and, for the firsttime, specialised modules for volume residentialmortgage purposes, government acquisitions andrating valuations, plant and machinery valuationsand an advanced workshop designed specificallyfor CEOs and senior management within financialinstitutions.In October 2012 the Pan Pacific Congress ofReal Estate Appraisers, Valuers and Counsellorswas hosted by the API in Melbourne. Thecongress provided an opportunity for membersof property professional associations from aroundthe region to meet, exchange information andprovide insight into the culture and real estatemarket of Australia. The South Australian Divisioncontributed funding to assist in hosting thisevent and was represented by a number of ourmembers.This diverse range of professional developmentoptions unfortunately saw a reduction in thenumber of registrants at our local CPD events andState Conference. One needs to look no furtherthan the recurring news headlines to gain a senseof the economic uncertainty that pervades ourlandscape and the challenges that we all facein being able to commit funds to professionaldevelopment. It is testimony to the hard work anddiligence of our CPD and Conference Committeesthat they have continued to deliver successfulprograms which appeal to our membership andbroader property community despite the difficulteconomic conditions of the last few years. I thankMembers for their continued support of these32

The Australian Property Institute Annual Report | 2012events and the firms that so generously providesponsorship to ensure the success of these twoimportant functions of the Institute.During 2012, National Office continued todevelop its communication and technologystrategy. The API website, that began developmentin 2011, will feature ongoing improvements, suchas an API events website and an innovativemember interaction portal. The Find A Practitioneron-line directory has been finalised and providesan opportunity for API Members to showcase andpublicise their services.Improvement to the website is just one areawhere we have placed greater focus on expandingthe level of exposure of the API to property andbusiness professionals outside of our membershipbody. Locally we have sent newsletters andnotifications of CPD events to the broaderbusiness community, attracting non-membersto our events. By having a wider reach, the valueof the sponsorship dollar has improved while ourmembers are able to network with a variety ofprofessionals at API events. The API, with severalother property sector associations, also joinedthe ‘Property On Track’ campaign, which aims toreinforce the importance of the property sector tothe state, the state’s economy and our collectivefuture.Our younger members continue their strongsupport of the Young Property ProfessionalsGroup (YPP) and Committee organised threewell attended and successful events during theyear. In August, a group of YPP representativesfrom across Australia met in Sydney for a nationalYPP Summit to discuss issues and provide theirperspective on the property profession. As aresult of these discussions, there will be YPPrepresentation at National Council and otherNational Boards in the future.In talking to members, property practitionersand their clients throughout a year of continuedeconomic and financial challenges, there clearlyhas never been a greater need for accurate,credible and professional property advice. Therole of the API is therefore critical in reinforcing theprofessional practice, education, standards, ethicsand professional conduct of its members withinthis environment.What sets the API apart is a membershipbody that represents all sectors of the propertyprofession who are involved in every aspect ofproperty-related transactions – whether that beleasing, valuation, sales, management or advisory.With this in mind, the Divisional Council hasrecently set its strategic goals for 2013 with a clearobjective to promote and elevate the standing ofour members within the property community andreinforce the vital role that the API plays as part ofthe whole property community.Tracy Gornall FAPIPresident33

The Australian Property Institute Annual Report | 2012Tasmanian DivisionTasmania’s economic and property market conditions continued to soften across theboard in 2012, as State Government financial retraction is adversely impacting on thelocal economy, investment and sentiment. Despite tough economic and property marketconditions, the Tasmanian Division of the Australian Property Institute (API) enjoyed asuccessful year.The Division made a conscience effort tomarket itself more broadly to other propertyprofessionals in an attempt to increasemembership and income from ContinuingProfessional Development (CPD) sessions. Thisachieved good results, and despite tougheconomic conditions both our membership andattendance to our CPD sessions increased. Thisassisted in the Division recording a healthy profit of$26,812.Despite a number of our more senior membersceasing practicing in recent years, it is hearteningto see their continued support of the API andattendance at various events creating a goodsense of community. The increased availabilityof tertiary property courses being able to beundertaken externally has assisted the Divisionto replenish its membership in recent yearswith student members doubling in the past3 years. It was great to see our membershipincrease, in particular student members, ensuringthe continued entry of graduates in the fullmembership ranks in the years ahead. Numerousmembers also upgraded their qualificationsthroughout the year, auguring well for the future ofthe Institute.Our CPD sessions covered a broad range oftopics and were spread in all geographic locationsthroughout Tasmania, ensuring sessions wereaccessible to all, and the travel burden was shared.Sessions included Farm Forestry Field Day atBonde Pastoral in the north west of the state, apresentation by the Executive Commissioner of theTasmanian Planning Commission to discuss theproposed Statewide Planning Scheme templatesheld in the historic township of Campbell Townin the north of the State, a presentation by MrDavid Kernke, National Director CB Richard Ellisdiscussing Risk from a Valuers Perspective andbest practice procedures as well as a presentationfrom of Tim Frazer, Property Services Leader,Genworth. A half day session was also held inHobart towards the end of the year which was wellattended by a broad mix of property professionalsand participants covering the impendingimplementation of the State Government GreenLeasing policy. This year the Division was ableto provide the Risk Management Module in bothHobart and Launceston for the first time, to limittravelling of our members.34

The Australian Property Institute Annual Report | 2012Despite continued lobbying by the API inassociation with a number of other professionalbodies in Tasmania, the Tasmanian ProfessionalStandards Act 2005 in its current form doesnot permit the limitation of professional liabilitydue to Section 27 (C), and thus since enactingthe legislation not one single Scheme has beenregistered by a single person/organisation of anyprofession in Tasmania. The inclusion of Section27 (C) is inconsistent with like legislation in all otherStates and Territories. Despite this obvious failurein the legislation, the State Government continuesto show an unwillingness to amend the legislation.Clyde Eastaugh LFAPI was awarded thecoveted SF Whittington award. He is only the thirdTasmanian to receive the award, the others beingRay Westwood LFAPI, and Greg McNamara LFAPI.Amongst a long list of Clyde’s contributions tothe Institute, it was perhaps his term as NationalPresident in 2004/5 that stands out. He workedhard in stabilising many areas of the Institute’saffairs at a very contentious time. In more recenttimes, he has been instrumental in developingand implementing the API Future PropertyProfessionals Program.We would like to take this opportunity to thankall the members who have donated their time tothe various committees and boards to ensure theInstitute continues to run effectively and remainsrelevant to the property industry. We wouldalso like to thank our Executive Officer, MelanieMcMeekin, who works tirelessly on a part timebasis with a full time load, in a somewhat isolatedenvironment. We also thank the Valuer General’soffice for allowing the Division to occupy adedicated office within their offices.35

The Australian Property Institute Annual Report | 2012Victorian DivisionThe Victorian Division achieved a healthy financial position in 2012. Membership levels wereretained, with a spike in the number of people seeking non CPV certifications. The CPDand Events program was significantly modified, with the API hosting the 2012 Pan PacificCongress, which attracted a number of interstate and international delegates.The Victorian Division’s commitment tothe Congress, both financial and in terms oforganisation and administration, meant thatexpenses were kept at a minimum. As such it isespecially pleasing that the Division continuedto deliver excellent member services, raisethe Institute’s profile in the public sphere, withgovernment and with financial institutions, and wasable to embark upon a number of projects detailedlater in this report.These achievements are a testament to theenthusiasm of all involved: staff, Councillors, inparticular Justine Jacono for her stewardship asVictorian President, and the numerous Board,Committee and Panel members for their ongoingdedication. The Victorian Division extendsits gratitude to Andrew Bell, the QueenslandExecutive Officer, who generously took over thefacilitation of the Pan Pacific Congress from June2012.“Business as Usual”MembershipThe API has a history of member basedservices and a commitment to providingleadership in its industry sector in bothprofessionalism and education.Membership numbers have been maintainedover the past few years because of activitiesincluding CPD, specialist certificates, networkingevents, professional standards and the LimitedLiability Scheme for valuer Members. The VictorianDivision is focused on encouraging new membersand creating a hierarchy for advancement andgrowth. Non-valuers need diverse programmesand resources which marry the new certificationsavailable. It is important that the internationalaffiliations of the API are recognised and promotedby the universities, which will encourage youngproperty professionals to join the API.Professional CertificatesSpecialist programmes have been developedin response to the public need for independentexperts in particular asset classes. The VictorianDivision will introduce programmes in addition tothe Specialist Water Valuer, Specialist Retail Valuerand the Giving Expert Evidence ProfessionalCertificate Program, designed to fulfil a marketdemand and to add value to API membership.Young ProfessionalsSupporting and developing our youngproperty professionals is crucial to the growthand relevance of the API. The Young PropertyProfessionals (YPP) consistently host fullysubscribed events and provide numerousopportunities for students and young professionals36

The Australian Property Institute Annual Report | 2012to interact with senior professionals. The APIcontinues to meet with secondary school studentsto promote careers in property via the APIVICBack to Schools Initiative.The API works collaboratively with the threeaccredited Victorian universities to ensure thatthe best possible balance exists between tertiarystudy and professional practice. We providestudent awards to each of the universities, asa means of directly supporting our futureprofessionals.Excellence inProperty AwardsHigh calibre nominations were receivedin all categories in 2012 for the Victorian andTasmanian Excellence in Property Awards. The APIcontinued its alliance with the Property IndustryFoundation in support of its fund raising efforts tohelp homeless youth. The API is also the IndustryPartner at the PIF Charity Sailing Challenge, ahighlight of the annual property calendar.“Opportunities for growth”The Victorian Divisional Council has investedin a Governance and Strategy Review. The goal ofthis project is to ensure that the Victorian Divisionalis optimally placed, in terms of organisationalstructure, governance processes, vision andstrategy, to assist Members to meet the dynamicchallenges they face in a changing industry, andthat the API remains relevant to the membershipas the peak body.An independent advisor was appointed to workwith the VDC to achieve a comprehensive reviewwith recommendations for consideration. As partof the process, all Councillors and staff wereinterviewed and a number of focus groups withrepresentation from across the members wereheld, in both Melbourne and rural Victoria.Professional CompetenceCPD is recognised as important for theongoing development and maintenance ofstandards. Our educational programmes aresophisticated and diverse and associatedaccreditations are undertaken with the utmostrigour. The API is the Australian standard forproperty and valuation standards.The Division is reviewing course content tobetter engage all Members in the program. It isrecognised that delivery needs to enable accessfor our rural Members. Educational roadshowsand virtual based learning are being explored withthe API Discussion Groups being the cornerstoneof these initiatives.37

The Australian Property Institute Annual Report | 2012CommunicationThe API Victorian Division’s public profilecontinues to improve through a number ofinitiatives. Our Media Adviser and panel ofspokespeople ensure that the Division is regularlycalled upon to comment on property issues. Ourpartnership with online property news provider,Property Review Australia, continues to be wellreceived and our ability to respond to topicalissues and to provide considered submissions andreports based on sound data and statistics willbe enhanced by the appointment of a ResearchConsultant.Internal communication is being improved sothat Member’s issues are elevated more efficientlyand effectively and so that Members know andcelebrate the many great things that the API isactually doing. Discussion Groups are an effectivemeans for members to meet, network, shareknowledge and talk through common issues andconcerns. Consideration will be given to howthey operate so that they are a valuable vehiclefor communication to and from the Divisionaland National Councils. Our web presence andelectronic communications will be revisited so asto entice Members to visit and read the multitudeof information they each contain.Adviser and introduced a Property FinanceCommittee to further advance Members’ interests.We will work with the major financial institutionsand regulators in regards to the changes in theuse, standards and fees for valuers as well as beproactive in regards to the apparent shifting of riskin relation to mortgage valuations.In acknowledging the past and recognisingwhat we do well, but also planning andimplementing for the future, we can support ourmembership to be successful and sustainable. TheVictorian Division will be a vibrant and effectiverepresentative body structured and resourced so asto advocate for the profession, provide professionaldevelopment and support and grow the professionfor its Members in their chosen career.AdvocacyThe Victorian Division represented members toa number of stakeholder groups and governmentbodies. Submissions were made to numerousgovernment departments, meetings held with anumber of Ministerial Offices and VCAT and theongoing input of Members is achieved via regularmeetings of our Major Employers Groups, ourstakeholders (lenders, universities, governmentand regulators) and the media.Members have made it clear that there is aneed for an increased role of advocacy. We willendeavour to support the National Council inachieving this at the federal level and the VictorianDivision has engaged a Government Liaison38

Discussion groupsare an effectivemeans for membersto meet, network, andshare knowledge

The Australian Property Institute Annual Report | 2012Western Australian DivisionI have great pleasure in presenting the 81st annual report ofThe Australian Property Institute (Inc) Western Australian Division.For many reasons, 2012 has been a significantyear for the Australian Property Institute. It hasseen the WA Division deliver its 11th straight profit,witnessed yet another rise in our cash reserves,and marked one of the most important changes indecades with the move to 215 Hay Street Subiaco.In the 1980s, API Western Australian Divisionalmembers showed excellent foresight when theycontributed their own funds toward the purchaseof our Charles Street premises, envisaging thatthe API would need its own property if we were toserve the membership well.They were right and we did — so for 30 yearswe used 27 Charles Street as a base to providethe training and services our membership required.But in 2012, the Divisional Council again stood ata critical moment and looked to the future, and wesaw the need for a change.The city has consolidated, there are greaterdemands on our members than ever beforeand there are challenges that membershiporganisations such as API need to face. So whenthe opportunity arose to co-locate with REIWA, wetook it and I believe this decision will have positiveramifications for many years to come.We now have the opportunity to retainCharles Street as a flexible asset of the divisionalmembership, in the knowledge that there are bigplans for South Perth in the future.We have also been able to join with REIWA,the Planning Institute of Australia and StrataCommunities WA in a single building for the firsttime. This gives us the chance to bring the keyrepresentative groups for property professionalstogether, in one central, visible location, which canonly strengthen the work we do.The move has been part of our concertedeffort to elevate the profile of the Institute andto expand the services we can offer both toconsumers and members.Already, we can see the benefits of the closerworking relationship through API Pricefinder, anapp developed in collaboration with REIWA thatwill become the preferred data system for all APImembers in Western Australia.With the economy and property marketrecovering in 2012, we also took advantage ofthe improved sentiment to expand the servicewe provide to our members through our CPDProgram.By developing the program of events and bybuying in the expertise we needed to promotethem properly, we have increased our turnoutamong members and a wide cross-section ofthe business community – who see value in theexcellence and expertise on offer.Lastly, 2012 was another year in which ourCouncillors, staff and volunteers continued in theirtireless work.40

The Australian Property Institute Annual Report | 2012I’d like to extend my personal thanks to allinvolved for this effort, as it ensures API remainsfocused on delivering services and the needs ofmembers.We acknowledge the passing in 2012 of twoDivisional Past Presidents: Kevin Quinn, who wasPresident from 1967 to 1969, and Joe Moylan whowas President from 1985 to 1987. Additionally wereflect on the passing of John Worthington whowas instrumental in developing the course of studyfor Valuers, firstly as a Diploma Course and until itbecame a University Degree in 1988.but as we go forward, we need to recognise thatwhat we offer the consumers and the propertyindustry as an Institute is important, and weshould value our services accordingly.Dennis VolkPresidentAustralian Property Institute (WA Division)So what can we expect looking forward in2013? While we can see that confidence hasreturned to the market, a little foresight warns usthat conservatism is riding shotgun.Our chief goal for 2013, therefore, is to providecontinued stability in a time when stability isuncertain.It demands that we work to improve andincrease the services to members and to ensurethey get value for their money. It requires us tomaintain member equity and continue to workhard on their behalf.Most importantly, I believe that 2013 should bea year when we again place the right value on ourown professional services.It has been too easy in the past to undervalueour skills, expertise, knowledge and experience,41

The Australian PropertyInstitute is committedto implementing andmaintaining an effectiveand comprehensiveCorporate GovernancePolicy, and in turn,practices and procedures

The Australian Property Institute Annual Report | 2012API OverviewBackground and RoleThe Australian Property Institute (API) was originally formed in 1926 as the Commonwealth Institute of Valuers. The Institutehas undergone several name changes over the last century as the array of services offered for its members expanded.Today, the API represents the interests of more than 8,000 property professionals throughout Australia. API membersinclude residential, commercial and plant and machinery valuers, property analysts and investment advisors, property fundand asset managers, property and facility managers, property lawyers, property researchers and academics.The Institute’s primary role is to set and maintain the highest standards of professional practice, education, ethics andprofessional conduct for its members and the broader property profession.API GovernanceAPI Corporate Governance StatementThe Australian Property Institute is committed to implementing and maintaining an effective and comprehensive CorporateGovernance Policy, and in turn, practices and procedures. The policy, practices and procedures have been developed inaccordance with the Australian Standard ‘Good Governance Principles’ (AS 8000-2003). This statement has been publishedin the Annual Report to ensure transparency in this Policy.API StructureEstablished on 5th November 1926 in Adelaide under the name of the Commonwealth Institute of Valuers, the AustralianProperty Institute is incorporated under Associations Incorporation Act 1985 (SA).The Australian Property Institute is a not-for-profit organisation with individuals as members. Councils, Boards, Committeesand Staff are responsible to the membership for the financial management of the Institute.The API operates in a federated environment under a national structure, comprising a single legal entity API Incorporated(API Inc) with seven Divisions located across six States and one Territory. API Inc. is also the controlling entity for API Ltd, APIEducation Awards Trust and the API Research Trust.The Institute’s Board of Directors is comprised of members of API’s National Council. National Council is the supremepolicy making body of the Institute, responsible for overseeing the management and operation of the Institute as a whole.API Limited (API Ltd) is a Company Limited by Guarantee, established in 1995 by API Inc. The Directors of API Ltd are theNational Councillors of API Inc.API Inc has established two trusts as enabled in its Constitution. These Trusts are as follows:• API Education Awards Trust established in 1994 for the education, trainingand development in the fields of valuation and land economy• API Research Trust established in 1994 to facilitate the undertaking of scientificresearch in the fields of valuation and land economy.National Council is the supreme policy making body of the Institute, and oversees the management and operation of theInstitute as a whole. Its board members are directors of the API, and therefore, National Council is effectively the Institute’sboard of directors.44

The Australian Property Institute Annual Report | 2012National Council has (through the Constitution) the authority to delegate functional roles to other Boards or Committees,and does so for the API’s National Boards and Committees, in the key areas identified in the Institute’s Strategic Plan:communication, education, finance, governance, international, membership and professionalism. National Council isrepresented on all of the Institute’s National Boards and Committees.Institute Divisions are established to manage the business of the Institute at the State and Territory level. Divisions exercisethe powers, duties and discretions set out in the By-Laws, subject to the control and policies of the National Council.DutiesBoard and Committee member’s duties:• To fulfil their role in good faith with the best interests of the Institute as a whole• To act with care and diligence• To exercise independence of judgment on all matters• Where a member becomes aware of a conflict of interest, they are to declare that conflict tothe Board, and to refrain from participating in any matters where that conflict arises• To serve the interest of the particular Board of which they are a member• To preserve the interests of the Institute nationally when considering issues• To be aware and supportive of the Institute’s values and strategies• To ensure compliance with applicable laws. One such law with particular and ongoingrelevance, due to the Institute being a member serving organisation, is the Privacy Act1988 (Cth), which sets requirements for dealing with personal information• To ensure compliance with the Institute’s Constitution, By-Laws, Code of Ethics and Rules of Conduct• Within the applicable area of responsibility to the member, make reasonable inquiries to ensurethe Institute is operating efficiently, effectively and legally towards achieving its goals.The specific roles, responsibilities, and composition of each of the Institute’s Boards are detailed in the Institute’sConstitution and By-Laws, which are available through the Institute’s website. Additionally, the individual members of NationalCouncil and the National Executive are detailed in this Annual Report.Operating Guidelines for each of the National Boards have been developed which outline the role of the Board, and theresponsibilities of its members. These Operating Guidelines are accompanied by a Declaration, which each Board membersigns, agreeing to abide by the Operating Guidelines.Disclosure, Transparency and AccountingThe Institute maintains disclosure and transparency in its financial situation by including accurate Financial Reports in eachAnnual Report. The Financial Reports are accompanied by an Independent Audit Report, and Director’s Report.The Annual Report also discloses the Institute’s key objectives for the year ahead, and any issues that may be of concernor material to the membership.45


The Australian Property Institute Annual Report | 2012The API is anot-for-profitorganisationPerformance ReviewThe API has a formal and systematic process in place to review the performance of senior managementand all staff. Performance reviews are conducted annually. The National Executive reviews the NationalDirector’s performance based on both national goals, and personal objectives that have been set.Each Board has a duty to periodically report on its goals, achievements, and activities. Theperformance of each Board is assessed on the achievement of objectives from its Strategic Plan.For any further information on the Institute’s Governance, please contact the National Director.Customers and StakeholdersThe API’s primary stakeholders are the Institute’s members. Other stakeholders include propertyprofessionals, kindred organisations, industry, investors and the general community.Funding ArrangementsThe API is a not-for-profit organisation. Revenue is generated from a numberof sources including membership fees and product sales.47

The Australian Property Institute Annual Report | 2012API Divisional OfficesNational OfficeLevel 1, 6 Campion St, Deakin. ACT 2600API – ACT DivisionPostal Address:PO Box 145,Curtin. ACT 2605Street Address:Level 1, 6 Campion Street,Deakin. ACT 2600Tel: (02) 6282 5541Fax: (02) 6282 5536Email: – NSW DivisionStreet Address:Level 3, 60 York Street,Sydney NSW 2000Tel: (02) 9299 1811Fax: (02) 9299 1490Email: – QLD DivisionPostal Address:PO Box 106,Spring Hill. QLD 4004Street Address: Suite 202, Level 2, 131 Leichhardt St,Spring Hill QLD 4000Tel: (07) 3832 3139Fax: (07) 3839 0438Email: – SA DivisionPostal Address:PO Box 246,Kent Town. SA 5071Street Address:22 Beulah Road,Norwood, SA 5067Tel: (08) 8132 0092Fax: (08) 8132 0480Email: – TAS DivisionPostal Address:PO Box 745,Hobart. TAS 7001Street Address: Level 5, 144 Macquarie St,Hobart TAS 7000Tel: (03) 6223 3011Fax: (03) 6223 3022Email: – VIC DivisionStreet Address: 10 Beach Street,Port Melbourne VIC 3207Tel: (03) 9644 7500Fax: (03) 9646 4635Email: – TAS DivisionPostal Address:PO Box 502South Perth WA 6951Street Address:27 Charles StreetSouth Perth, WA 6151Tel: (08) 9474 2784Fax: (08) 9474 1157Email:



The Australian Property Institute Annual Report | 2012Councillor’s ReportYour council members submit the financial report of the Australian Property InstituteIncorporated and controlled entities for the financial year ended 31 December 2012.Council MembersThe names of council members throughout the year and at the date of this report are:Phillip WesternTony GormanDavid HaythornNick McDonald CrowleyRobert HecekCameron HarrisAndrew CubbinsPresidentSenior Vice PresidentCompany SecretaryImmediate Past PresidentVice PresidentCouncillor (Queensland)Councillor (Tasmania)Mark Kay Councillor (South Australia) Appointed 10 May 2012Milton Cations Councillor (Victoria) Appointed 10 May 2012Chris Shaw Councillor (Queensland) Appointed 7 December 2012Chris Plant Senior Vice President Resigned 5 October 2012James Eager Councillor (New South Wales) Resigned 11 May 2012James Pledge Councillor (South Australia) Resigned 10 May 2012David Moore Councillor (Western Australia) Resigned 10 May 2012John Forsyth Councillor (Victoria) Resigned 10 May 201252

The Australian Property Institute Annual Report | 2012Principal ActivitiesThe principal activities of the Institute during the financial year were:• To represent the interests of its members throughout Australia;• The provision of professional education and training/development services; and• To provide social/networking facilities to members of the Institute.Significant ChangesNo significant change in the nature of these activities occurred during the year.Operating ResultThe loss after providing for income tax amounted to $371,609.This councillor’s report is signed in accordance with a resolution of the Council members.PHILIP WESTERNAPI National PresidentTONY GORMANAPI Senior Vice PresidentDated this 3rd day of May 201353

The Australian Property Institute Annual Report | 2012Statement by CouncillorsIn the opinion of the Council, the financial report comprising the statement of comprehensive income, balance sheet,statement of changes in equity, statement of cash flows and notes thereto:1. Presents a true and fair view of the financial position of the Australian Property Institute Incorporated and its controlledentities as at 31 December 2012 and its performance for the year ended on that date in accordance with AustralianAccounting Standards, mandatory professional reporting requirements and other authoritative pronouncements of theAustralian Accounting Standards Board.2. At the date of this statement, there are reasonable grounds to believe the Australian Property Institute Incorporated andits controlled entities will be able to pay its debts as and when they fall due.This statement is made in accordance with a resolution of the Council and is signed for and on behalf of the Council by:PHILIP WESTERNAPI National PresidentTONY GORMANAPI Senior Vice PresidentDated this 3rd day of May 201354

The Australian Property Institute Annual Report | 2012Statement of Comprehensive Incomefor the Year Ended 31 December 2012ECONOMIC ENTITYPARENT ENTITYNOTE 2012 2011 2012 2011$ $ $ $Revenues 2 7,522,947 6,884,803 7,037,373 6,575,908Education and training costs (1,226,132) (1,233,646) (1,226,132) (1,233,646)Member services costs (245,935) (67,862) (19,295) (16,741)Publication & Product costs (380,842) (287,815) (380,842) (287,815)Administration expenses (818,054) (735,752) (758,812) (710,464)Employee related expenses (3,571,146) (3,324,474) (3,319,172) (3,173,551)Bank & Merchant Fees (92,479) (91,881) (88,557) (89,607)Meeting and travel expenses (494,871) (567,673) (466,383) (538,592)Depreciation and amortisation expenses (381,482) (304,420) (297,605) (218,438)Professional expenses (225,745) (326,750) (190,684) (254,809)Public relations expenses (236,753) (185,054) (236,753) (177,520)Project expenses (201,604) (214,393) (201,604) (214,393)Other expenses (19,513) (21,687) (11,779) –Profit before income tax expense 3 (371,609) (476,604) (160,245) (339,668)Income tax expense – – – –Net profit after income tax expense (371,609) (476,604) (160,245) (339,668)Other comprehensive incomeNet fair value gain of investmentsfinancial assets available for saleNet gain on revaluation ofland and buildingsTotal comprehensive incomeattributable to the members48,814 (52,950) – –342,832 – 204,500 –(20,037) (529,554) 44,255 (339,668)55

The Australian Property Institute Annual Report | 2012Balance Sheet as at 31 December 2012ECONOMIC ENTITYPARENT ENTITYNOTE 2012 2011 2012 2011$ $ $ $ASSETSCurrent assetsCash and cash equivalents 4 3,105,050 2,899,234 2,971,682 2,746,930Accounts receivable and other debtors 5 229,801 80,125 205,582 204,614Other current assets 6 447,245 494,726 442,589 469,796Inventories on hand 7 42,820 39,454 42,820 39,454Total current assets 3,824,916 3,513,539 3,662,673 3,460,794Non-current assetsLoan to Australian Property Institute Ltd - - 2,186,852 1,907,951Financial assets 397,261 287,401 - -Property, plant and equipment 8 9,269,346 8,946,623 5,662,915 5,396,238Intangible assets 9 747,350 704,869 718,521 704,869Total non-current assets 10,413,957 9,938,893 8,568,288 8,009,058TOTAL ASSETS 14,238,873 13,452,432 12,230,961 11,469,852LIABILITIESCurrent liabilitiesAccounts payable and other payables 10 2,414,492 1,640,292 2,349,441 1,613,273Provisions 11 411,210 439,149 391,031 428,737Total current liabilities 2,825,702 2,079,441 2,740,472 2,042,010Non-current liabilitiesProvisions 11 68,311 48,556 66,663 47,859Total non-current liabilities 68,311 48,556 66,663 47,859TOTAL LIABILITIES 2,894,013 2,127,997 2,807,135 2,089,869NET ASSETS 11,344,860 11,324,435 9,423,826 9,379,983EQUITYReserves 7,613,073 7,221,426 5,225,483 5,020,981Retained earnings 3,731,787 4,103,009 4,198,343 4,359,002TOTAL EQUITY 11,344,860 11,324,435 9,423,826 9,379,98356

The Australian Property Institute Annual Report | 2012Statement of Changes in Equity forthe Year Ended 31 December 2012ECONOMIC ENTITYRetainedEarningsAssetRevaluationReserveCapitalProfitsReserveFinancialAssetsReserveTotal$ $ $ $ $Balance at 31 December 2010 4,580,001 6,546,609 674,380 53,387 11,854,377Profit attributable to members (476,604) - - - (476,604)Revaluation increment/ (decrement) - - - (52,950) (52,950)Balance at 31 December 2011 4,103,397 6,546,609 674,380 437 11,324,823Profit / (loss) attributable to members (371,609) - - (371,609)Revaluation increment - 342,832 - 48,814 391,646Balance at 31 December 2012 3,731,788 6,889,441 674,380 49,251 11,344,860RetainedEarningsPARENT ENTITYAssetRevaluationReserveCapital ProfitsReserveTotal$ $ $ $Balance at 31 December 2010 4,698,258 4,346,601 674,380 9,719,239Profit attributable to members (339,668) - - (339,668)Revaluation increment - - - -Balance at 31 December 2011 4,358,590 4,346,601 674,380 9,379,571Profit / (loss) attributable to members (160,245) - - (160,245)Revaluation increment - 204,500 - 204,500Balance at 31 December 2012 4,198,345 4,551,101 674,380 9,423,82657

The Australian Property Institute Annual Report | 2012Statement of Cash Flows for theYear Ended 31 December 2012ECONOMIC ENTITYPARENT ENTITYNOTE 2012 2011 2012 2011$ $ $ $CASH FLOWS FROM OPERATING ACTIVITIESReceipts from members and customers 8,009,258 8,273,740 7,629,371 7,817,713Payments to suppliers and employees (7,554,073) (9,062,658) (7,131,512) (8,679,952)Interest received 105,734 161,561 100,327 134,290Net cash provided by operating activities 15(b) 560,919 (627,357) 598,186 (727,949)CASH FLOWS FROM INVESTING ACTIVITIESProceeds from sale of investments 51,967 19,962 - 15,509Purchase of investments (32,045) (30,742) - -Payment for property, plant,equipment and intangibles(375,025) (325,960) (373,434) (319,960)Net cash (used in) investing activities (355,103) (336,740) (373,434) (304,451)Net increase/(decrease) in cash held 205,816 (964,097) 224,752 (1,032,400)Cash at the beginning of the financial year 15(a) 2,899,234 3,863,331 2,746,930 3,779,331Cash at the end of the financial year 15(a) 3,105,050 2,899,234 2,971,682 2,746,93058

The Australian Property Institute Annual Report | 2012Notes To and Forming Part Of theFinancial Statements for the YearEnded 31 December 20121. Statement of Significant Accounting PoliciesThe financial statements are general purpose financial statements that have been prepared in accordance withAustralian Accounting Standards (including Australian Accounting Interpretations) and the Institutes Incorporation Act1981. The entity is a not-for-profit entity for financial reporting purposes under Australian Accounting Standards.Australian Accounting Standards set out accounting policies that the AASB has concluded wouldresult in financial statements containing relevant and reliable information about transactions, events andconditions to which they apply. Material accounting policies adopted in the preparation of these financialstatements are presented below and have been consistently applied unless stated otherwise.The financial statements, except for the cash flow information, have been prepared on an accruals basis and are basedon historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financialassets and financial liabilities. The amounts presented in the financial statements have been rounded to the nearest dollar.The financial statements were authorised for issue on 30 April 2013 by the members of the Committee.(a)Principles of consolidationThe consolidated financial statements incorporate the assets, liabilities and results of the entities controlled by AustralianProperty Institute Incorporated at the end of the reporting period.A controlled entity is any entity over which Australian Property Institute Incorporated has the powerto govern the financial and operating policies so as to obtain benefits from its activities.Where controlled entities have entered or left the group during the year, the financial performanceof those entities is included only for the period of the year that they were controlled. Alist of controlled entities is contained in Note 17 to the financial statements.In preparing the consolidated financial statements, all intragroup balances and transactionsbetween entities in the consolidated group have been eliminated in full on consolidation.(b)Inventories on handInventories consist of publications and are measured at the lower of cost and net realisable value. Overheads areapplied on the basis of normal operating capacity. Costs are assigned on the basis of weighted average costs.Inventories held for distribution are measured at the lower of cost and current replacement cost. Inventories acquiredat no cost or for nominal consideration are measured at the current replacement cost at the date of acquisition.(c)Property, plant and equipmentEach class of property, plant and equipment is carried at cost or fair value less, whereapplicable, any accumulated depreciation and impairment losses.59

The Australian Property Institute Annual Report | 2012Notes To and Forming Part Of theFinancial Statements for the YearEnded 31 December 2012 (Cont’d)1. Statement of Significant Accounting Policies (continued)(c)Property, plant and equipment (continued)PropertyFreehold land and buildings are carried at their fair value (being the amount for which an asset could be exchangedbetween knowledgeable willing parties in an arm’s length transaction), based on periodic, but at least triennial, valuationsby external independent valuers, less accumulated depreciation for buildings. Increases in the carrying amount arisingon revaluation of land and buildings are credited to a revaluation reserve in equity. Decreases that offset previousincreases of the same asset are charged against the fair value reserves directly in equity; all other decreases arerecognised in profit or loss. Each year the difference between depreciation based on the carrying amount of the assetcharged to the statement of comprehensive income and depreciation based on the asset’s original cost is transferredfrom the revaluation surplus to retained earnings. Any accumulated depreciation at the date of revaluation is eliminatedagainst the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset.Plant and equipmentPlant and equipment are measured on the cost basis less any accumulated depreciation and impairment losses. Inthe event the carrying amount of plant and equipment is greater than the estimated recoverable amount, the carryingamount is written down immediately to the estimated recoverable amount and impairment losses are recognised eitherin profit or loss or as a revaluation decrease if the impairment losses relate to a revalued asset. A formal assessment ofrecoverable amount is made when the impairment indicators are present (refer to Note 1(i) for details of impairment).Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, asappropriate, only when it is probable that future economic benefits associated with the item will flow to thegroup and the cost of the item can be measured reliably. All other repairs and maintenance are recognised asexpenses in the statement of comprehensive income during the financial period in which they are incurred.DepreciationThe depreciable amount of all fixed assets, including buildings and capitalised lease assets but excludingfreehold land is depreciated on a straight-line basis over the asset’s useful life to the consolidated groupcommencing from the time the asset is held ready for use. Leasehold improvements are depreciated overthe shorter of either the unexpired period of the lease or the estimated useful lives of the improvements.The depreciation rates used for each class of depreciable asset are:Class of fixed assetDepreciation rateBuildings 2.5%Furniture, fixtures and fittings 10% - 20%Leasehold improvements 16%Plant and equipment 5% - 37.5%Computer equipment and software 33%60

The Australian Property Institute Annual Report | 2012Notes To and Forming Part Of theFinancial Statements for the YearEnded 31 December 2012 (Cont’d)1. Statement of Significant Accounting Policies (continued)(c)Property, plant and equipment (continued)The assets’ residual values and useful lives are reviewed and adjusted if appropriate at the end of each reporting period.An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount isgreater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceedswith the carrying amount. These gains or losses are included in the statement of comprehensive income. When revaluedassets are sold, amounts included in the revaluation surplus relating to that asset are transferred to retained earnings.(d)Intangible assetsCapitalised software development costs are amortised on a systematic basis matchedto the future economic benefits over the useful life of the project.(e)Impairment of assetsAt the end of each reporting period, the Institute assesses whether there is any indication that an asset may beimpaired. The assessment will consider both external and internal sources of information and internal sourcesof information. If such an indication exists, an impairment test is carried out on the asset by comparing therecoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use to theasset’s carrying amount. Any excess of the asset’s carrying amount over its recoverable amount is recognisedimmediately in profit or loss. Where the future economic benefits of the asset are not primarily dependent uponthe asset’s ability to generate net cash inflows and when the entity would, if deprived of the asset, replace itsremaining future economic benefits, value in use is determined as the depreciated replacement cost of an asset.Where it is not possible to estimate the recoverable amount of an individual asset, the Institute estimates therecoverable amount of the cash-generating unit to which the asset belongs. Impairment testing is performedannually for intangible assets with indefinite lives. Where an impairment loss on a revalued asset is identified,this is recognised against the revaluation surplus in respect of the same class of asset to the extent thatthe impairment loss does not exceed the amount in the revaluation surplus for that class of asset.(f)Employee benefitsProvision is made for the Institute’s liability for employee benefits arising from services rendered byemployees to balance date. Employee benefits expected to be settled within one year have been measuredat the amounts expected to be paid when the liability is settled, plus related on-costs. Employee benefitspayable later than one year have been measured at the present value of the estimated future cashoutflows to be made for those benefits. In determining the liability, consideration is given to employeewage increases and the probability that the employee many not satisfy any vesting requirements.61

The Australian Property Institute Annual Report | 2012Notes To and Forming Part Of theFinancial Statements for the YearEnded 31 December 2012 (Cont’d)1. Statement of Significant Accounting Policies (continued)(g)ProvisionsProvisions are recognised when the Institute has a legal or constructive obligation, as a result of past events, for whichit is probable that an outflow of economic benefits will result and that outflow can be reliably measured. Provisionsrecognised represent the best estimate of the amounts required to settle the obligation at the end of the reporting period.(h)Income taxThe income tax expense (income) for the year comprises current income tax expense (income). Current incometax expense charged to profit or loss if the tax payable on taxable income. Current tax liabilities (assets) aremeasured at the amounts expected to be paid to (recovered from) the relevant taxation authority. Current incometax expense is charged or credited outside profit or loss when the tax relates to items that are recognised outsideprofit or loss. Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and itis intended that net settlement or simultaneous realisation and settlement of the respective asset and liability willoccur. From 1 January 1993, the Australian Property Institute Incorporated became liable to pay income tax.(i)LeasesLeases of property, plant and equipment where substantially all the risks and benefits incidental to the ownershipof the asset, but not the legal ownership, are transferred to the Institute are classified as finance leases. Financeleases are capitalised, recording an asset and a liability equal to the present value of the minimum lease payments,including any guaranteed residual values. Lease payments are allocated between the reduction of the leaseliability and the lease interest expense for the period. Leased assets are depreciated on a straight-line basisover their estimated useful lives where it is likely that the Institute will obtain ownership of the asset or ownershipover the term of the lease. Lease payments for operating leases, where substantially all the risks and benefitsremain with the lessors are recognised as expenses on a straight-line basis over the life of the lease term.(j)Cash and cash equivalentsCash and cash equivalents include cash on hand, deposits held at call with banks, other short-termhighly liquid investments with original maturities of three months or less and bank overdrafts. Bankoverdrafts are shown within borrowings in current liabilities in the statement of financial position.(k)RevenueRevenue from the sale of goods is recognised upon the delivery of goods to customers.Interest revenue is recognised using the effective interest rate method, which for floating rate financial assets isthe rate inherent in the instrument. Dividend revenue is recognised when the institute has established that it has aright to receive a dividend. Revenue from the rendering of a service is recognised upon the delivery of the serviceto the customers. Other revenue is recognised when the right to receive the revenue has been established.All revenue is stated net of the amount of goods and service tax (GST).62

The Australian Property Institute Annual Report | 2012Notes To and Forming Part Of theFinancial Statements for the YearEnded 31 December 2012 (Cont’d)1. Statement of Significant Accounting Policies (continued)(l)Accounts receivable and other debtorsAccounts receivable and other debtors include amounts due from members as well as amounts receivable fromcustomers for goods sold in the ordinary course of business. Receivables expected to be collected within 12 months ofthe end of the reporting period are classified as current assets. All other receivables are classified as non-current assets.Accounts receivable are initially recognised at fair value and subsequently measured at amortisedcost using the effective interest rate method, less any provision for impairment.(m) Accounts payable and other payablesAccounts payable and other payables represent the liability outstanding at the end of the reporting period forgoods and services received by the Institute during the reporting period that remain unpaid. The balance isrecognised as a current liability with the amounts normally paid within 30 days of recognition of the liability.(n)Goods and services tax (GST)Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GSTincurred is not recoverable from the Australian Tax Office (ATO). Receivables and payables are stated inclusiveof the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the ATO isincluded with other receivables or payables in the balance sheet. Cash flows are presented on a gross basis. TheGST components of cash flows arising from investing or financing activities, which are recoverable from or payableto the ATO, are presented as operating cash flows included in receipts from customers or payments to suppliers.(o)Comparative figuresWhen required by Accounting Standards, comparative figures have been adjustedto conform to changes in presentation for the current financial year.(p)Critical accounting estimates and judgmentsThe councillors evaluate estimates and judgments incorporated into the financial report based on historicalknowledge and best available current information. Estimates assume a reasonable expectation of future eventsand are based on current trends and economic data, obtained both externally and within the Institute.Key estimates – ImpairmentThe Institute assesses impairment at each reporting date by evaluating conditions specific to the Institute thatmay lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset isdetermined. Value-in-use calculations performed in assessing recoverable amounts incorporate further estimates.63

The Australian Property Institute Annual Report | 2012Notes To and Forming Part Of theFinancial Statements for the YearEnded 31 December 2012 (Cont’d)1. Statement of Significant Accounting Policies (continued)(q)Financial instrumentsInitial recognition and measurementFinancial instruments, incorporating financial assets and financial liabilities, are recognised when the entitybecomes a party to the contractual provisions of the instrument. For financial assets, this is equivalent to thedate that the Institute commits itself to either purchase or sell the asset (i.e. trade date accounting is adopted)`Financial instruments are initially at fair value plus transactions costs where the instrument is not classified “atfair value through profit or loss”, in which case transaction costs are expensed to profit or loss immediately.Classification and subsequent measurementFinancial instruments are subsequently measured at fair value, amortised cost using the effectiveinterest method, or cost. Fair value represents the amount for which an asset could be exchanged or aliability settled, between knowledgeable, willing parties. Where available, quoted prices in an activemarket, are used to determine fair value. In other circumstances, valuation techniques are adopted.Amortised cost is calculated as the amount at which the financial asset or financial liability is measured at initialrecognition less principal repayments and any reduction for impairment and adjusted for any cumulative amortisationof the difference between that initial amount and the maturity amount calculated using the effective interest method.The effective interest method is used to allocate interest income or interest expense over the relevant period and isequivalent to the rate that discounts estimated future cash payments or receipts (including fees, transaction costsand other premiums or discounts) over the expected life (or when this cannot be reliably predicted, the contractualterm) of the financial instrument to the net carrying amount of the financial asset or financial liability. Revisionsto expected future net cash flows will necessitate an adjustment to the carrying amount with a consequentialrecognition of income or expense to the profit or loss. The Institute does not designate any interests in subsidiariesas being subject to the requirements of Accounting Standards specifically applicable to financial instruments.(i) Financial assets at fair value through profit or lossFinancial assets are classified at fair value through profit or loss when they are held for trading purposeof short term profit taking, where they are derivatives not held for hedging purposes, or designatedas such to avoid an accounting mismatch or to enable performance evaluation where a group offinancial assets is managed by key management personnel on a fair value basis in accordance witha documented risk management or investment strategy. Such assets are subsequently measured atfair value with changes in fair value (i.e. gains and losses) recognised included in profit or loss.(ii) Loans and receivablesLoans and receivables are non-derivative financial assets with fixed or determinable payments, not quoted in an activemarket and are subsequently measured at amortised cost using the effective interest rate method. Gains or lossesare recognised in profit or loss through the amortisation process and when the financial asset is derecognised.64

The Australian Property Institute Annual Report | 2012Notes To and Forming Part Of theFinancial Statements for the YearEnded 31 December 2012 (Cont’d)1. Statement of Significant Accounting Policies (continued)(q)Financial instruments (continued)(iii) Held-to-maturity investmentsHeld-to-maturity investments are non-derivative financial assets that have fixed maturities andfixed or determinable payments, and it is the entity’s intention to hold these investments to maturity.They are subsequently measured at amortised cost. Gains or losses are recognised in profit orloss through the amortisation process and when the financial asset is derecognised.(iv) Available-for-sale financial assetsAvailable-for-sale financial assets are non-derivative assets that are either designated as such or that are notclassified in any of the other categories. They comprise investments in the equity of other entities where there isneither a fixed maturity nor fixed or determinable payments. They are subsequently measured at fair value withany re-measurements other than impairment losses and foreign exchange gains and losses recognised in othercomprehensive income. When the financial asset is derecognised, the cumulative gain or loss pertaining to thatasset previously recognised in other comprehensive income is reclassified into profit or loss. Available-for-salefinancial assets are classified as non-current assets when they are expected to be sold within 12 months afterthe end of the reporting period. All other available-for-sale financial assets are classified as current assets.(v) Financial liabilitiesNon-derivative financial liabilities, other than financial guarantees are subsequently measured at amortised cost. Gains orlosses are recognised in profit or loss through the amortisation process and when the financial liability is derecognised.ImpairmentAt the end of each reporting period, the Institute assesses whether there is objective evidence that a financial assethas been impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, thereis objective evidence of impairment as a result of one or more events (i.e. a “loss event”) that has occurred, whichhas an impact on the estimated future cash flows of the financial asset(s). In the case of available-for-sale financialassets, a significant or prolonged decline in the market value of the instrument is considered to constitute a lossevent. Impairment losses are recognised in profit or loss immediately. Also, any cumulative decline in fair valuepreviously recognised in other comprehensive income is reclassified to profit or loss at this point. In the case offinancial assets carried at amortised cost, loss events may include indications that the debtors or a group of debtorsis experiencing significant financial difficulty, default or delinquency in interest or principal payments, indicationsthat they will enter bankruptcy or other financial reorganisation and charges in arrears or economic conditions thatcorrelate with defaults. For financial assets carried at amortised cost (including loans and receivables), a separateallowance account is used to reduce the carrying amount of financial assets impaired by credit losses. After havingtaken all possible measures of recovery, if the management establishes that the carrying amount cannot be recoveredby any means, at that point the writing off amounts are charged to the allowance account or the carrying amount ofimpaired financial assets is reduced directly if no impairment amount was previously recognised in the allowanceaccounts. When the terms of financial assets that would otherwise have been past due or impaired have beenrenegotiated, the Institute recognises the impairment for such financial assets by taking into account the originalterms as if the terms have not been renegotiated so that the loss events that have occurred are duly considered.65

The Australian Property Institute Annual Report | 2012Notes To and Forming Part Of theFinancial Statements for the YearEnded 31 December 2012 (Cont’d)1. Statement of Significant Accounting Policies (continued)DerecognitionFinancial assets are derecognised where the contractual rights to receipt of cash flows expiresor the asset is transferred to another party whereby the entity no longer has any significantcontinuing involvement in the risks and benefits associated with the asset. Financial liabilities arederecognised where the related obligations are either discharged, cancelled or expire.2. RevenueECONOMIC ENTITYPARENT ENTITY2012 2011 2012 2011$ $ $ $Education and training income 2,501,779 2,035,257 2,501,779 2,035,257Member services income 4,283,598 3,965,901 3,845,043 3,812,721Presidential appointment income 175,629 169,702 175,629 169,702Publications income 305,439 313,032 305,439 313,032Interest income 105,733 161,561 100,327 134,290Other income 150,769 239,350 109,156 110,906Total 7,522,947 6,884,803 7,037,373 6,575,90866

The Australian Property Institute Annual Report | 2012Notes To and Forming Part Of theFinancial Statements for the YearEnded 31 December 2012 (Cont’d)3. Profit From Ordinary ActivitiesECONOMIC ENTITYPARENT ENTITY2012 2011 2012 2011$ $ $ $PROFIT FROM ORDINARY ACTIVITIESProfit before income tax hasbeen determined after:Expenses:Depreciation of property, plant, equipment 381,482 304,420 297,605 218,438and amortisation of intangiblesRemuneration of auditor –- audit fees current year 72,128 68,910 63,805 61,349Rental expense on operating leases 31,325 30,892 31,325 30,8924. Cash and Cash EquivalentsECONOMIC ENTITYPARENT ENTITY2012 2011 2012 2011$ $ $ $Cash at bank 2,972,830 1,853,028 2,888,374 1,747,031Cash on deposit 132,220 1,046,206 83,308 999,8993,105,050 2,899,234 2,971,682 2,746,93067

The Australian Property Institute Annual Report | 2012Notes To and Forming Part Of theFinancial Statements for the YearEnded 31 December 2012 (Cont’d)5. Accounts Receivable and Other DebtorsECONOMIC ENTITYPARENT ENTITY2012 2011 2012 2011$ $ $ $Trade receivables 162,197 62,455 137,959 52,888less: Provision for doubtful debts (9,725) (9,172) (9,725) (9,172)Other receivables and accrued income 77,348 26,842 77,348 160,898229,801 80,125 205,582 204,6146. Other AssetsECONOMIC ENTITYPARENT ENTITY2012 2011 2012 2011$ $ $ $Other receivables 447,245 494,726 442,589 469,796447,245 494,726 442,589 469,79668

The Australian Property Institute Annual Report | 2012Notes To and Forming Part Of theFinancial Statements for the YearEnded 31 December 2012 (Cont’d)7. Inventories On HandECONOMIC ENTITYPARENT ENTITY2012 2011 2012 2011$ $ $ $Stock of publications at cost 42,820 39,454 42,820 39,45442,820 39,454 42,820 39,45469

The Australian Property Institute Annual Report | 2012Notes To and Forming Part Of theFinancial Statements for the YearEnded 31 December 2012 (Cont’d)8. Property, Plant and EquipmentECONOMIC ENTITYPARENT ENTITYPROPERTY2012 2011 2012 2011$ $ $ $Strata title building at independent valuation800,000 820,000 800,000 820,000– Queensland – refer (b) belowLess: Accumulated depreciation - (20,500) - (20,500)Freehold property at valuation1,930,000 1,700,000 1,930,000 1,700,000– WA – refer (c) belowLess: Accumulated depreciation - (1,750) - (1,750)Freehold property at valuation– VIC – refer (d) below2,450,000 2,500,000 2,450,000 2,500,000Property – at independent valuation – API Limited 1,800,000 1,750,000 - -- Strata title building, NSW – refer (e) belowLess: Accumulated depreciation - (46,053) - -- Buildings, ACT – refer (f) below 1,200,000 890,000 - -Less: Accumulated depreciation - (23,421) - -- Land, ACT – refer (f) below 550,000 910,000 - -Total property 8,730,000 8,478,276 5,180,000 4,997,750PLANT AND EQUIPMENTPlant and equipment – at cost 869,248 960,412 757,550 850,305Less: Accumulated depreciation (704,963) (771,747) (632,405) (710,769)164,285 188,665 125,145 139,536Furniture, fixtures and fittings – at cost 1,185,437 903,785 1,157,044 875,392Less: Accumulated depreciation (810,376) (624,103) (799,274) (616,440)375,061 279,682 357,770 258,952Total Plant and equipment 539,346 468,347 482,915 398,488Total Property, plant and equipment 9,269,346 8,946,623 5,662,915 5,396,23870

The Australian Property Institute Annual Report | 2012Notes To and Forming Part Of theFinancial Statements for the YearEnded 31 December 2012 (Cont’d)8. Property, Plant and Equipment (continued)LAND ANDBUILDINGSPLANT ANDEQUIPMENTFURNITURE,FIXTURESANDFITTINGSFREEHOLDPROPERTY(VALUATION)TOTAL$ $ $ $ $Balance at the beginning of year 799,500 139,536 258,952 4,198,250 5,396,238Additions - 44,288 144,609 - 188,897Depreciation expense (20,500) (58,679) (45,791) (1,750) (126,720)Revaluations 21,000 - 183,500 204,500Carrying amount at the end of year 800,000 125,145 357,770 4,380,000 5,662,915(a)Movements in carrying amountsMovements in the carrying amounts for each class of property, plant and equipmentbetween the beginning and the end of the current financial year.ECONOMIC ENTITYSTRATATITLEBUILDINGSPLANT ANDEQUIPMENTFURNITURE,FIXTURESANDFITTINGSFREEHOLDPROPERTY(VALUATION)TOTAL$ $ $ $ $Balance at the beginning of year 799,500 188,664 279,683 7,678,776 8,946,623Additions - 45,880 144,609 - 190,489Depreciation expense (20,500) (70,259) (49,230) 67,723 (72,266)Revaluations 21,000 - - 183,500 204,500Carrying amount at the end of year 800,000 164,285 375,062 7,929,999 9,269,34671

The Australian Property Institute Annual Report | 2012Notes To and Forming Part Of theFinancial Statements for the YearEnded 31 December 2012 (Cont’d)8. Property, Plant and Equipment (continued)(b)(c)(d)(e)(f)The building, being located at Suite 202, 131 Leichhardt Street, Spring Hill, was inspectedby Scott Campbell AAPI of McGees Property on 15 January 2013. The valuation of theproperty as at 31 December 2012 has been determined on a ‘market value’ basis.The land and building, being located at 27 Charles Street, South Perth, was inspected by Kate BinghamAAPi and Ross Lambert AAPI of Independent Valuers of Western Australia on 23 January 2013. Thevaluation of the property as at 31 December 2012 has been determined in on a ‘market value’ basis.The land and building, being located at 10 Beach Street, Port Melbourne, was inspected by Trent Weir AAPI ofCBRE Valuations Pty Limited on 15 January 2013. The valuation of the property as at 31 December 2012 hasbeen determined on ‘market value’ basis. This is equivalent to fair value and in accordance with AASB 116.The strata plan being located at 60 York Street, Sydney, New South Wales was valuedby James Burney, AAPI, (Certified Practicing Valuer) of Knight Frank as at 31 December2012. The valuation of strata plan as at 31 December 2012 has been determined on currentmarket value of the freehold interest in the property, assuming vacant possession.The property being located at 6 Campion Street, Deakin, ACT was valued by Phil Harding FAPI CPP (CertifiedPracticing Valuer) of Savills Valuations Pty Limited as at 31 December 2012. The valuation of leasehold propertyas at 31 December 2010 has been determined on a “current market value” basis for financial reporting purposes.9. Intangible AssetsECONOMIC ENTITYPARENT ENTITY2012 2011 2012 2011$ $ $ $Software development costs – PropertyPro, website, AMPL and FPP/RMM online951,886 711,922 923,057 711,922Coresoft database 435,436 462,036 435,436 462,036Less: Accumulated amortisation (639,972) (469,089) (639,972) (469,089)Total intangibles 747,350 704,869 718,521 704,86972

The Australian Property Institute Annual Report | 2012Notes To and Forming Part Of theFinancial Statements for the YearEnded 31 December 2012 (Cont’d)9. Intangible Assets (continued)(a)Movements in carrying amountsMovements in the carrying amounts intangible assets between the beginning and the end of the current financial year.CORESOFT DATABASE AND SOFTWAREDEVELOPMENT COSTS – PROPERTY PRO,WEBSITE, AMPL, FMP/RMM ONLINE$Balance at the beginning of year 704,869Additions – Software development costs 213,365Amortisation expense (170,884)Carrying amount at the end of year 747,35010. PayablesECONOMIC ENTITYPARENT ENTITY2012 2011 2012 2011$ $ $ $Trade payables 950,160 207,010 904,839 186,294Sundry creditors and accruals 331,350 335,442 311,620 329,139Subscription in advance 1,132,982 1,097,840 1,132,982 1,097,8402,414,492 1,640,292 2,349,441 1,613,27373

The Australian Property Institute Annual Report | 2012Notes To and Forming Part Of theFinancial Statements for the YearEnded 31 December 2012 (Cont’d)11. ProvisionsECONOMIC ENTITYPARENT ENTITY2012 2011 2012 2011$ $ $ $CURRENT Employee benefits 411,210 439,149 391,031 428,737NON-CURRENT Employee benefits 68,311 48,556 66,663 47,85912. Leasing Commitments2012 2011$ $Operating lease commitmentsNon-cancellable operating leases contracted for butnot capitalised in the financial statementsPayable- Not later than 1 year 165,602 8,676- Later than 1 year but not later than 5 years 583,503 25,932- Greater than 5 years 51,071 -800,176 34,60874

The Australian Property Institute Annual Report | 2012Notes To and Forming Part Of theFinancial Statements for the YearEnded 31 December 2012 (Cont’d)12. Leasing Commitments (continued)2012 2011$ $Capital expenditure commitmentsCapital expenditure contracted for but not capitalised in the financial statementsPayable- Not later than 1 year 237,083 -237,083 -Operating lease commitments comprise of non-cancellable leases over the rental ofthe premises and photocopiers. Capital expenditure commitments pertain to the officerefurbishment, fit-out of the new premises and corporate fees for strategic review.13. Events Subsequent To Balance DateNo matters or circumstances have arisen since the end of the financial year which significantly affected the operationsof the Institute, the results of these operations, or state of affairs of the Institute in the subsequent financial years.75

The Australian Property Institute Annual Report | 2012Notes To and Forming Part Of theFinancial Statements for the YearEnded 31 December 2012 (Cont’d)14. Related Party TransactionsTransactions between related parties are on normal commercial terms andconditions no more favourable than those available to other parties.Transactions with related parties:(a)API Limited2012 2011$ $At year end API had a loan with its controlled entity - API Limited 1,907,951 1,907,951- APIV Limited 278,901 -2,186,852 1,907,951(b)Councillors’ related entitiesCouncillors and/or their related entities are required to pay membership feeson the same terms and conditions as all other members.(c)Councillor’s remunerationPresidents’ honorarium 15,000 15,000 15,000 15,000No other councillors of Australian Property Institute Incorporated received remuneration.76

The Australian Property Institute Annual Report | 2012Notes To and Forming Part Of theFinancial Statements for the YearEnded 31 December 2012 (Cont’d)15. Cash Flow Information (continued)(b)Reconciliation of net cash provided by operating activities to operating profitECONOMIC ENTITYPARENT ENTITY2012 2011 2012 2011$ $ $ $Operating loss for the year (371,609) (476,604) (160,245) (339,669)Non – cash flowsDepreciation and amortisation(Profit)/ Loss on disposal of assets381,482 304,41919,723297,605 218,437-Change in operating assets and liabilities(Increase)/Decrease in receivables (149,676) (3,062) (1,380) (146,302)(Increase)/Decrease in other assets 47,481 (33,882) 27,207 (9,793)(Increase)/Decrease in inventories (3,366) 17,626 (3,366) 17,626Increase/(Decrease) in payables 664,790 (509,428) 457,266 (510,992)Increase/(Decrease) in provisions (8,183) 53,851 (18,901) 42,743Net cash provided by operating activities 560,919 (627,357) 598,186 (727,949)78

The Australian Property Institute Annual Report | 2012Notes To and Forming Part Of theFinancial Statements for the YearEnded 31 December 2012 (Cont’d)NOTE 16. Financial Risk ManagementThe Institute’s financial instruments consist mainly of deposits with bank, short terminvestments, and investments in listed shares, receivables and payables.The totals for each category of financial instruments, measured in accordance with AASB 139as detailed in the accounting policies to these financial statements, are as follows:ECONOMIC ENTITY$ $Financial assetsCash and cash equivalents 4 3,105,050 2,899,234Accounts receivable and other debtors 5 229,801 80,125Available-for-sale financial assets- Shares in listed companies 397,261 287,4013,732,112 3,266,760Financial assetsFinancial liabilities at amortised cost- Accounts payable and other payables102,414,492 1,640,292Financial risk management policiesThe Institute’s Treasurer is responsible for, among other issues, monitoring and managing financial riskexposures of the Institute. The Treasurer monitors the Institute’s transactions and reviews the effectivenessof controls relating to credit risk, financial risk and interest rate risk. Discussions on monitoring and managingfinancial risk exposures are held bi-monthly and minuted by the committee of management.The Treasurer’s overall risk management strategy seeks to ensure that the Institute meets itsfinancial targets, whilst minimising potential adverse effects of cash flow shortfalls.79

The Australian Property Institute Annual Report | 2012Notes To and Forming Part Of theFinancial Statements for the YearEnded 31 December 2012 (Cont’d)NOTE 16. Financial Risk Management (continued)Specific financial risk exposures and managementThe main risks the entity is exposed to through its financial instruments are interest rate risk, liquidity risk and creditrisk. There have been no substantive changes in the types of risks the Institute is exposed to, how these risks arise, orthe Institute’s objectives, policies and processes for managing or measuring the risks from the previous period.Credit riskExposure to credit risk relating to financial assets arises from the potential non-performance by counterparties ofcontractual obligations that could lead to a financial loss to the Institute. Credit risk is managed through maintainingprocedures (such as the utilisation of systems for the approval, granting and removal of credit limits, regularmonitoring of exposure against such limits and monitoring of the financial stability of significant customers andcounterparties) ensuring, to the extent possible, that members and counterparties to transactions are of soundcredit-worthiness. Risk is also minimised through investing surplus funds in financial institutions that maintainsa high credit rating or in entities that the committee has otherwise assessed as being financially sound.Credit risk exposuresThe maximum exposure to credit risk by class of recognised financial assets at the end of the reporting period isequivalent to the carrying amount and classification of those financial assets (net of any provisions) as presented in thestatement of financial position. There is no collateral held by the Institute securing trade and other receivables. Accountsreceivable and other debtors that are neither past due nor impaired are considered to be high credit quality. TheInstitute has no significant concentrations of credit risk with any single counterparty or group of counterparties.Liquidity riskLiquidity risk arises from the possibility that the Institute might encounter difficulty in settling its debts or otherwisemeeting its obligations related to financial liabilities. The Institute manages its risk through the following mechanisms:• Preparing forward-looking cash flow analysis in relation to its operational, investing and financing activities• Only investing surplus cash with major financial institutions.The table below reflects an undiscounted contractual maturity analysis for non-derivative financialliabilities. The Institute does not hold directly any derivative financial liabilities.Cash flows realised from financial assets reflect management’s expectation as to the timing ofrealisation. Actual timing may therefore differ from that disclosed. The timing of cash flows presentedin the table to settle financial liabilities reflects the earliest contractual settlement dates.80

The Australian Property Institute Annual Report | 2012Notes To and Forming Part Of theFinancial Statements for the YearEnded 31 December 2012 (Cont’d)NOTE 16. Financial Risk Management (continued)Financial liability and financial asset maturity analysisWithin 1 year 1 to 5 years Over 5 years Total2012 2011 2012 2011 2012 2011 2012 2011$ $ $ $ $ $ $ $Financial liabilitiesdue for paymentAccounts payable and otherpayables (excluding annual leave) 2,414,492 1,640,292 - - - - 2,414,492 1,640,292Total expected outflows 2,414,492 1,640,292 - - - - 2,414,492 1,640,292Financial assets – cashflows realisableCash and cash equivalents 3,105,050 2,899,234 - - - - 3,105,050 2,899,234Accounts receivableand other debtors229,801 80,125 - - - - 229,801 80,125Available-for-sale investments 397,261 287,401 - - - - 397,261 287,401Total anticipated inflows 3,732,112 3,266,760 - - - - 3,732,112 3,266,760Net (outflow)/inflow onfinancial instruments1,317,620 1,626,468 - - - - 1,317,620 1,626,46881

The Australian Property Institute Annual Report | 2012Notes To and Forming Part Of theFinancial Statements for the YearEnded 31 December 2012 (Cont’d)NOTE 16. Financial Risk Management (continued)Net fair valuesFair value estimationThe fair values of financial assets and financial liabilities are presented in the following table and can be comparedto their carrying values as presented in the balance sheet. Fair values are those amounts at which an asset couldbe exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction.Fair values derived may be based on information that is estimated or subject to judgment, where changes in assumptions mayhave a material impact on the amounts estimated. Areas of judgment and the assumptions have been detailed below. Wherepossible, valuation information used to calculate fair value is extracted from the market, with more reliable information availablefrom markets that are actively traded. In this regard, fair values for listed securities are obtained from quoted market bid prices.2012 2011FootnoteNet CarryingValueNet FairValueNet CarryingValueNet FairValue$ $ $ $Financial assetsCash and cash equivalents (i) 3,105,050 3,105,050 2,899,234 2,899,234Accounts receivable and other debtors (i) 229,801 229,801 80,125 80,125Available-for-sale financial assets– in listed share investments(ii) 397,261 397,261 287,401 287,401Total financial assets 3,732,112 3,732,112 3,266,760 3,266,760Financial liabilitiesAccounts payable and other payables 2,414,492 2,414,492 1,640,292 1,640,292Total financial liabilities 2,414,492 2,414,492 1,640,292 1,640,29282

The Australian Property Institute Annual Report | 2012Notes To and Forming Part Of theFinancial Statements for the YearEnded 31 December 2012 (Cont’d)NOTE 16. Financial Risk Management (continued)The fair values disclosed in the above table have been determined based on the following methodologies:(i)Cash and cash equivalents, accounts receivable and other debtors and accounts payable and other payablesare short-term instruments in nature whose carrying value is equivalent to fair value. Accounts payable and otherpayables exclude amounts relating to the provision for annual leave, which is outside the scope of AASB 139.(ii)For listed available-for-sale and held-for-trading financial assets, closingquoted bid prices at reporting date are used.Sensitivity analysisThe following table illustrates sensitivities to the Institute’s exposures to changes in interest rates and equityprices. The table indicates the impact on how profit and equity values reported at balance date would havebeen affected by changes in the relevant risk variable that management considers to be reasonably possible.These sensitivities assume that the movement in a particular variable is independent of other variables.FINANCIAL ASSETSProfit Equity$ $Year ended 31 December 2012+/- 1% in interest rates 31,050 31,050+/- 10% in listed investments 39,726 39,726Year ended 31 December 2011+/- 1% in interest rates 28,992 28,992+/- 10% in listed investments 28,740 28,740No sensitivity analysis has been performed on foreign exchange risk as theInstitute has no significant exposure to currency risk.There have been no changes in any of the assumptions used to prepare the above sensitivity analysis from the prior year.83

The Australian Property Institute Annual Report | 2012Notes To and Forming Part Of theFinancial Statements for the YearEnded 31 December 2012 (Cont’d)17. Institute DetailsThe principal place of business of the Institute is:Australian Property Institute Incorporated.6 Campion StreetDEAKIN ACT 2600.18. Controlled EntitiesSubsidiary :Australian Property Institute LimitedCountry of incorporation: AustraliaPercentage consolidated: 100% (2011 100%)Trusts controlled by parent : Educational Awards Trust* / Research Trust*Percentage consolidated: 100% (2011 100%)Subsidiary :Australian Property Institute Valuers Limited**Country of incorporation: AustraliaPercentage consolidated: 100% (2011: 100%)* Both entities were consolidated for the first time in the year ended 31 December 2007.** The entity was incorporated in 2010 for the first time.84

The Australian Property Institute Annual Report | 2012Notes To and Forming Part Of theFinancial Statements for the YearEnded 31 December 2012 (Cont’d)19. New Standards and Interpretations Issued but Not Yet EffectiveAt the date of this financial report the following standards and interpretations, which may impactthe entity in the period of initial application, have been issued but are not yet effective:Reference Title SummaryAASB 92009-112010-7AASB 102011-7AASB 132011-82012-1AASB 1192011-10FinancialInstrumentsAmendmentsto AustralianAccountingStandards arisingfrom AASB 9Amendmentsto AustralianAccountingStandards arisingfrom AASB 9(December 2010)ConsolidatedFinancialStatementsAmendmentsto AustralianAccountingStandards arisingfrom AASB10,11,12,127,128Fair ValueMeasurementAmendmentsto AustralianAccountingStandards arisingfrom AASB 13Amendmentsto AustralianAccountingStandards – FairValue Measurement– ReducedDisclosureRequirementsEmployee BenefitsAmendmentsto AustralianAccountingStandards arisingfrom AASB 119Replaces the requirements of AASB 139 for the classificationand measurement of financial assets. This is the result of thefirst part of Phase 1 of the IASB’s project to replace IAS 39.Amends AASB 1, 3, 4, 5, 7, 101, 102, 108, 112, 118, 121, 127,128, 131, 132, 136, 139, 1023 and 1038 and Interpretations 10and 12 as a result of the issuance of AASB 9.Amends AASB 1, 3, 4, 5, 7, 101, 102, 108, 112, 118, 120,121, 127, 128, 131, 132, 136, 137, 139, 1023 & 1038 andInterpretations 2, 5, 10, 12, 19 & 127 for amendments to AASB9 in December 2010Replaces the requirements of AASB 127 and Interpretation 112pertaining to the principles to be applied in the preparation andpresentation of consolidated financial statements.Amends AASB 1,2,3,5,7,9,2009-11,101,107,112,118,121,124,132,133,136,138,139,1023 & 1038and Interpretations 5,9,16 & 17 as a result of the issuance ofAASB 10, 11, 12, 127 and 128Provides a clear definition of fair value, a framework formeasuring fair value and requires enhanced disclosures aboutfair value measurement.Amends AASB 1, 2, 3, 4, 5, 7, 9, 101, 102, 108, 110, 116, 117,118, 119, 120, 121, 132, 133, 134, 136, 138, 139, 140, 141, 1004,1023 & 1038 and Interpretations 2, 4, 12, 13, 14, 17, 19, 131 &132 as a result of issuance of AASB 13 Fair Value Measurement.This Standard makes amendments to AASB 3, 7, 13, 140and 141 to establish reduced disclosure requirements forentities preparing general purpose financial statements underAustralian Accounting Standards – Reduced DisclosureRequirements for additional and amended disclosuresarising from AASB 13 and the consequential amendmentsimplemented through AASB 2011-8 Amendments to AustralianAccounting Standards arising from AASB 13.The amendments to this Standard eliminates the option fordefined benefit plans to use the corridor approach to deferthe recognition of actuarial gains and losses and introduceenhanced disclosures about defined benefit plans. Theamendments also incorporate changes to the accounting fortermination benefits.Amends AASB 1, 8, 101, 124, 134, 1049, 2011-8 &Interpretation 14 as a result of the issuance of AASB 119Employee Benefits.Application Date(Financial YearsBeginning)1-Jan-151-Jan-151-Jan-151-Jan-131-Jan-131-Jan-131-Jan-131-Jul-131-Jan-131-Jan-13Expected ImpactNot expected to have amaterial impact on the entity.Not expected to have amaterial impact on the entity.Not expected to have amaterial impact on the entity.Not expected to have amaterial impact on the entity.Not expected to have amaterial impact on the entity.Not expected to have amaterial impact on the entity.Not expected to have amaterial impact on the entity.Disclosure onlyNot expected to have amaterial impact on the entity.Not expected to have amaterial impact on the entity.85

The Australian Property Institute Annual Report | 2012Notes To and Forming Part Of theFinancial Statements for the YearEnded 31 December 2012 (Cont’d)20. New Standards and Interpretations Issuedbut Not Yet Effective (continued)2011-42011-92012-62012-7Amendmentsto AustralianAccountingStandards toRemove IndividualKey ManagementPersonnelDisclosureRequirementsAmendmentsto AustralianAccountingStandards –Presentation ofItems of OtherComprehensiveIncomeAmendmentsto AustralianAccountingStandards –MandatoryEffective Dateof AASB 9and TransitionDisclosuresAmendmentsto AustralianAccountingStandards arisingfrom ReducedDisclosureRequirementsThis Standard amends AASB 124 Related Party Disclosuresto remove all the individual key management personnel (KMP)disclosures contained in Aus paragraphs 29.1 to 29.9.3.Amends AASB 1, 5, 7, 101, 112, 120, 121, 132, 133, 134,1039 & 1049 as a consequence of the issuance of AASB 101Presentation of Items of Other Comprehensive Income.This Standard amends the mandatory effective date of AASB 9Financial Instruments so that AASB 9 is required to be appliedfor annual reporting periods beginning on or after 1 January2015 instead of 1 January 2013.This Standard adds to or amends the Australian AccountingStandards – Reduced Disclosure Requirements for AASB 7, 12,101 and 127.1-Jul-131-Jul-121-Jan-131-Jul-13Disclosure onlyPresentation onlyNot expected to have amaterial impact on the entity.Disclosures only86

The Australian Property Institute Annual Report | 2012Notes To and Forming Part Of theFinancial Statements for the YearEnded 31 December 2012 (Cont’d)DETAILED PROFIT AND LOSSFOR THE YEAR ENDED 31 DECEMBER 2012ECONOMIC ENTITYPARENT ENTITY2012 2011 2012 2011$ $ $ $INCOMEEducation and training costs 2,501,779 2,035,257 2,501,779 2,035,257Member services costs 4,283,598 3,965,901 3,845,043 3,812,721Other API services income 175,629 169,702 175,629 169,702Publications & Products income 305,439 313,032 305,439 313,032Bank interest income 105,733 161,561 100,327 134,290Rental income 99,985 95,417 9,750 8,749Other income 50,784 143,933 99,406 102,157Total income 7,522,947 6,884,803 7,037,373 6,575,908EXPENSESEducation and training costs 1,226,132 1,233,646 1,226,132 1,233,646Member services costs 245,935 67,862 19,295 16,741Publication & Product costs 380,842 287,815 380,842 287,815Administration expenses 818,054 735,752 758,812 710,464Employee related expenses 3,571,146 3,324,474 3,319,172 3,173,551Bank & Merchant Fees 92,479 91,881 88,557 89,607Meeting and travel expenses 494,871 567,673 466,383 538,592Depreciation and amortisation expenses 381,482 304,420 297,605 218,438Professional expenses 225,745 326,750 190,684 254,809Public relations expenses 236,753 185,054 236,753 177,520Project expenses 201,604 214,393 201,604 214,393Other expenses 19,513 21,687 11,779 -Total expenses 7,894,556 7,361,407 7,197,618 6,915,576Net loss after income tax expense (371,609) (476,604) (160,245) (339,668)87

The Australian Property Institute Annual Report | 2012Management Representation Letter88

The Australian Property Institute Annual Report | 2012Management Representation Letter (Cont’d)89

The Australian Property Institute Annual Report | 2012Independent Auditor’s Report90

The Australian Property Institute Annual Report | 2012Independent Auditor’s Report (Cont’d)91

92Audit Disclaimer

The Australian Property Institute Annual Report | 2012

The Australian Property Institute Annual Report | 2012In MemoriamSouth AustraliaFrank (Ian) Rothe, AAPIClark Ingham, FAPIVictoriaMax CarrJohn LeighAdrian McGladeEddy NortheastTrevor PenryKen NorthmoreJack StanfordJoan PotengerMichael RedfernDavid WilkinsonReverend Ralph CohenDoug CumminsVicki BrownDennis KellyNew South WalesDon Smith, Honorary Member94

The Australian Property Institute Annual Report | 201295

The Australian Property Institute Annual Report | 2012Level 1, 6 Campion StDeakin ACT 260096Telephone (02) 6282 2411Fax (02) 6285 2194Email

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