MPAQ Annual Report 2018-2019

Financial Report

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019

Contents

About MPAQ

3

President’s Report

4

Executive Director’s Report

6

Committee of Management Statement

10

Council Certificate

11

Consolidated Statement of Profit or Loss and Other Comprehensive Income

12

Consolidated Statement of Financial Position

13

Consolidated Statement of Changes in Equity

14

Consolidated Statement of Cash Flows

15

Notes to the FInancial Statements

16

NOTE 1: Summary of Significant Accounting Policies

16

NOTE 2: Revenue, Other Income and Expenses

22

NOTE 3: Trade and other receivables

23

NOTE 4: Property Plant & Equipment

24

NOTE 5: Intangible Assets

25

NOTE 6: Financial Assets

25

NOTE 7: Trade and Other Payables

26

NOTE 8: Income in Advance

26

NOTE 9: Employee Benefits - Provision

26

NOTE 10: Borrowings

26

NOTE 11: Total Funds

27

NOTE 12: Commitments

28

NOTE 13: Contingent Liabilities

28

NOTE 14: Reconciliation of Net Surplus for the Year to Net Cash Flows from Operations

29

NOTE 15: Fair Value Disclosures and Measurements

29

NOTE 16: Financial Instruments

30

NOTE 17: Related Party Transactions

32

Audit of the Financial Report

2019 Financial Report | 2

34

About MPAQ

Who we are The Master Plumbers’ Association of Queensland (MPAQ) is the peak industry body representing plumbing contractors throughout Queensland, from sole operators to medium sized businesses and large contracting firms.

Operating since 1900, MPAQ is one of Queensland’s most influential trade associations providing the industry with specialised training, advice and services to effectively strengthen and grow the businesses of our members.

We represent over 1200 members across Queensland, which equates to around 4,000 plumbing professionals.

As well as being the collective voice for the plumbing industry, the Association offers its members a full range of professional services, from

employment and workplace relations assistance to technical advice and training.

These services assist plumbers to establish and maintain their businesses and plan for the future.

Effective plumbing services are critical to maintain and enhance community health and safety and protect the environment. Our members are at the forefront of this essential service industry and we provide support to ensure the ongoing viability of their businesses.

Master Plumbers are installers of gas, water reticulation and irrigation systems, fire protection services, heating and cooling, mechanical services/air conditioning systems, sanitary disposal, drainage, metal roofing, wall cladding and other plumbing services.

Our Association Our Vision The peak industry body providing high quality services and support, delivering growth and prosperity to members.

Our Purpose To drive professionalism in the plumbing and gas industry to our members’ advantage.

Our Values Respect Accountability Teamwork Excellence Safety

3

President’s Report Operating Report Kent Vickers - President I, Kent Vickers, the 2019 President of the Master Plumbers Association of Queensland (the Association) hereby present the operating report of the Association for the year ended 30 June 2019.

Committee of Management The Committee of Management of the Association is a committee elected bi-annually by the members of the Association.

To be eligible to be nominated for a position on the Committee of Management the nominee must be a financial member (i.e. ordinary member) of MPAQ. During the year ended 30 June 2019 the following persons held membership of the Committee of Management of the Association for the entire year unless otherwise indicated:

Kent Vickers President

John Salmon Treasurer

William Watson Trustee

Robert Brouwers Committee Member

Donald Nunn Vice President

Kelvin Slade Past President

Harle Gall Committee Member

Benjaman Crew Committee Member

Robert Kimlin Trustee

Samuel Hannant Committee Member

Michael Ryan Committee Member

Patrick Robertson Vice President

Dennis Yarrow Committee Member For the purposes of section 254(2)(d) of the Registration and Accountability of Organisations (RAO) Schedule, we confirm that no officer or member of the Association is a trustee of a superannuation entity (or a directory of a company that is a trustee of a superannuation entity).

Review of Principal Activities The Association made a surplus for the financial year of $1,084,511 (2018: surplus of $526,086). Although the surplus was higher, $680,000 related to grant income associated to the new Beenleigh training facility and the funds have been spent within the facility and the expenditure have been capitalised.

The principal activities of the Association during the year were representing the interests of its members to Government, conducting training activities, providing technical resources and advancing the interests of the plumbing, gas and services industry to the community. The principal activities have been reviewed and there was no change to the nature of activities through the year.

Significant Changes in the Nature of Activities No significant changes in the Association’s nature of principal activities and no significant change to the financial affairs during the financial year.

Significant Changes in the State of Affairs There has been no significant change in the Association’s state of affairs during the financial year.

Details of Members As at 30 June 2019: There were 1,116 members of the Association (2018: 1,109 members).

2019 Financial Report | 4

Members have the right to resign their membership in accordance with Section 11 of the Rules of the Association.

Members must deliver written notice to the Association after which the resignation will take effect at the date and time of lodgement or such subsequent time and date nominated in the resignation.

Where a member ceases to be eligible to become a member of the Association, membership will cease immediately, unless they accept such other class of membership that may be offered.

Employees of the Association As at 30 June 2019: There were 16 full-time equivalent personnel employed by the Association. Summary of the remuneration of the key management personnel can be found in Note 17 in the notes to the financial statements. There were no payments made falling under s 764(2)(e) to be included in a remuneration register.

Loans, Grants and Donations Registers There were no loans, grants or donations made during the period required to be reported under s 764(2)(f).

After Financial Position Date Events Apart from the items disclosed in the notes to the financial statements, no other matters or circumstances have arisen since the end of the financial year which may significantly affect the operations of the Association, the results of those operations, or the state of affairs of the Association in subsequent years.

I would like to express my sincere thanks to our Council, Penny Cornah our Executive Director and her team for their hard work, dedication and support to members and the industry over the past 12 months.

The MPAQ Council is committed to ensure our members concerns and needs are heard and respected throughout all levels of government. Our MPAQ Council consists of the Past Presidents, legionella specialists, maintenance and hot water specialists, major contractors, backflow, drainage and fire industry professionals, pipe reliners and gas fitters.

Council members of the MPAQ are also represented by regional board members from Townsville, Toowoomba, Rockhampton and Goondiwindi. This vast array of experience, knowledge and regional representation at the board level allows the Association to discuss and make valid representation to all levels of Government.

Signed in accordance with a resolution of the Members of the Committee of Management.

President

Kent Vickers Dated

15 October 2019

5

Executive Director’s Report Penny Cornah - Executive Director The Master Plumbers’ Association of Queensland (MPAQ) is the peak industry body representing plumbing contractors throughout Queensland, from sole operators to medium sized plumbing businesses and large contracting firms. Operating since 1900, MPAQ is one of Queensland’s most influential trade associations providing the industry with specialised training, advice and services to effectively strengthen and grow the businesses of our members.

MPAQ is the only plumbing industry association for Queensland plumbing professionals, we represent the interests of the plumbing industry at both state and national levels.

MPAQ has the vision, commitment, strength and determination to: • Be a united voice on plumbing industry issues; • Provide excellent quality membership services; and • Promote and recognise outstanding plumbing industry standards whilst simultaneously targeting undesirable plumbing practices.

Our significant membership base means that we have political and lobbying strength, as well as the ability to advocate policy to all key stakeholders. We are also in a position to highlight the pivotal role that plumbing professionals play in the living standards of all Australians.

We have an incredible and passionate team at MPAQ. I would like to acknowledge and thank each and every staff member for their hard work, dedication and commitment during the year. Knowing that we are making a difference to those working in the industry makes it extremely worthwhile.

I simply couldn’t kick off without thanking our President, Kent Vickers. We could not be luckier than we are with Kent. He is passionate, inclusive and driven to empower us to give our all for the trade. Kent thank you for everything you do.

Kent is joined by the best team going around, and I would like to thank the MPAQ Council for their commitment and support. Our board members give up their time to put in for our trade and we are truly grateful for their commitment and passion.

Representation Recent years have seen some momentous achievements at MPAQ including our work with the Government which has resulted in a strong commitment to protecting our trade. Some of the key achievements include: 2019 Financial Report | 6

• Security of payment laws, ensuring that subcontractors and specifically our members are protected from non-payment • The Services Trades Council, ensuring that plumbing has an industry specific regulatory council with MPAQ as the Chair • Non-conforming building products legislation, including point of sale, passed and implemented • Occupational licensing, ensuring that our members that are business owners are only having to pay for one licence, rather than two • Obtaining funding from the Office of Small Business Advancing Women in Business Initiative to promote women in business and in trades and Construction Skills Queensland to promote workforce development and apprenticeships in the plumbing and gas industry MPAQ continues to have input to national matters as the Secretariat for Master Plumbers Australia Ltd (MPA Ltd), which represents Master Plumber Associations across Australia and New Zealand.

Membership Services Apart from our lobbying and advocacy work, MPAQ is focussed on providing the support that our members need, MPAQ believes it is important that our members are given every opportunity to have a voice within the Association. MPAQ has developed a number of committees led by our members that provides a forum that allows them to represent their distinct and individual views. These groups include: • Maintenance and Construction Contractors Group - Members of this Group consist of the industry’s elite large maintenance and minor commercial work companies.

• MPAQ Corporates Associate Committee (MCAC) - the purpose of this committee is to address current and topical issues facing products and their supply in the plumbing and gas fitting industry in Queensland.

Membership of the committee is open to all financial MPAQ Corporate Associates.

• Women’s Plumbing Alliance (WPA) - We know that partners of plumbers who work within the business along with those working on the tools are the lifeblood of that business and they deserve our support as well.

• Major Contractors Group – this group consists of members that work on major capital infrastructure projects in Qld.

We are particularly proud of the work that all of our groups and committee’s do to help make a difference to the experiences of other members and the industry as a whole, and we believe these committees are the foundations of the work that we do as a member driven organisation.

Membership for MPAQ has continued to grow and so do our benefits and services. We have over 50 benefits available for members to be able to access.

Services Trades College We are excited to announce that stage 1 of the Plumbing Industry Climate Action Centre (PICAC) Beenleigh has opened for training. The Services Trades College of Australia (TSTCA), Fire Industry Training and CEPUTEC training will all operate out of PICAC Beenleigh. TSTCA is a training College, born from industry, owned by industry and run for industry. Apart from MPAQ its partners include the Plumbers Union Queensland, the National Fire Industry Association and the Plumbing Industry Climate Action Centre. It is a centre of excellence for trade training with state of the art facilities based in Beenleigh with a smaller facility at Brendale. The College has proudly achieved a 90% apprenticeship completion rate, which is well above the national average completion rate of 55%. This facility is world leading and should turbo charge the productivity of our industry’s future, our apprentices.

Penny Cornah, MPAQ’s Executive Director holds a position on the College Board to drive the strategic direction for the college. The college runs regular consultation sessions across the services trades welcoming direct feedback from employers. Genuine consultation, leads to improved training and service delivery outcomes for employers, apprentices and industry. TSTCA focusses on apprenticeship training and MPAQ continues to deliver post trade training for the industry.

In this significant venture we also have another key partner and that is the Queensland Government. The Government’s commitment of $4 million towards the Centre of Excellence has turned our dream into a reality. MPAQ has not been as involved in apprenticeship training in the past as we would have liked and this development marks a significant step towards our goal of achieving this. Although it will be the centre for our apprentice training it will not be limited to apprentices. This is a huge capital investment that has been made in a real estate growth area which provides a fantastic asset for the future of our association.

7

Technical and Training Services As a Registered Training Organisation, MPAQ has developed and delivered training courses specifically for plumbers and apprentices to up skill their knowledge and qualification. MPAQ has be successful in sourcing funding subsidies from Construction Skills Queensland to help the industry with the cost of training.

MPAQ has developed purpose built mobile training platforms to ensure we can bring our training to members in regional Queensland, not just in the South East corner.

We also offer the flexibility of online and correspondence courses for plumbers and gasfitters.

Last year our trainer Kelvin Slade delivered over 32 training courses to the industry.

Congratulations to Kelvin on this huge achievement and thank you for your commitment to train our industry.

Kelvin has also developed a legionella awareness course for plumbers and apprenctices which will be available from February 2020.

Events In conjunction with World Plumbing Day which was celebrated on 11 March we launched a new consumer campaign to promote the importance of using a licensed plumber and asked the public to consider what life would be like without plumbers.

In a survey to our members in 2018 we found that 65% of our members identified that unlicensed people completing plumbing work was one of the biggest challenges faced in our industry.

Through video and social media campaigns, MPAQ hopes to educate the community about the value of using a licensed plumber, particularly from a health and safety perspective, and how protecting the home and family safety should be at the forefront when consumers consider DIY plumbing work.

The MPAQ events team were responsible for over 35 key industry events in 2018 – 2019 focusing on the professional and personal development of our members and the wider industry. One of these events was the inaugural Trades Industry Conference, a joint initiative between MPAQ and the Air Conditioning and Mechanical Contractors Association (AMCA), the Association of 2019 Financial Report | 8

Hydraulic Service Consultants Australia (AHSCA), the Backflow Prevention Association of Australia (BPAA), the Institute of Plumbing Inspectors Queensland (IPIQ), the National Fire Industry Association (NFIA) and the Queensland Gas Association (QGA).

The purpose of this bi-annual event is to unite the service trades industries and address the importance of individuals and companies keeping pace in their industry by advancing their skills so they can accelerate to be a leader navigating the changing trends.

The event was the first of its kind in Queensland and exceeded targets on sponsors and delegates.

Another initiative that MPAQ undertakes is the appointment of plumbing and apprentice ambassadors.

These ambassadors take on a year-long role of promoting the plumbing and gas industry to students and future leaders through careers expos and school visits. Promoting the trade is essential to ensuring its longevity and continued professionalism. This year we appointed Natalie Christian and Patrick Wright, our two apprentice ambassadors, and Daniel McClinton, our plumbing ambassador, who were all appointed at World Plumbing Day.

Plumbing and Gas Industry Awards The premier event for the industry, the Plumbing and Gas Industry Awards presentation dinner was hosted in July.

This prestigious awards program consistently recognises the high level of professionalism and excellence in our industry. The awards program celebrates the apprentices, plumbers, gasfitters, hydraulic consultants, companies and other industry individuals who are leading the way in the plumbing and gas industry. I am proud that we continue to facilitate this program and all nominees should be delighted of the level of outstanding professionalism they display.

Communications MPAQ continues to publish and produce, the Master Plumber magazine bimonthly. It is a specialist publication providing valuable industry information, with a longstanding reputation of over 50 years as a high class magazine. As an industry specific publication for Queensland, it provides members with independent coverage of news, issues, changes and events which directly and indirectly affect the industry. It also provides a host of information on lifestyle, health and industry specific events which are engaging and relevant to the readership.

Sponsors / Partners It is MPAQ’s endeavour to develop our industry, which includes ensuring our members are working with the best of our industry in manufacturers, suppliers and service providers. We actively encourage our members to build relationships and utilise the products and services provided by our Corporate Supporters, sponsors and partners as they are actively involved in supporting our industry through our events and publications or by offering a specific benefit to members. Thank you to all of our partners, sponsors and corporate supporters who continue to support the Association year on year.

Advisory Services Our Workplace Relations Advisory team provides a full service consultancy practice that helps members with any of the employer-employee relationship queries. The service gives practical advice for employers regarding employment issues. The services are staffed by HR experts who know the needs of plumbers and who stay up to date with ongoing continuing education on all human

resource management and industrial relations matter.

MPAQ has hosted a number of different webinars this year to help upskill the industry in human resources and industrial relations support and advice.

Awards I would like to make a special mention to Bill Watson, MPAQ Trustee, Bill was awarded as a member of the Order of Australia general division for his services and commitment to our industry. Bill has contributed over 45 years to the trade in leadership roles as an apprentice, employee, employer, business operator, industry regulatory representative, government board appointee, and accredited trainer. Congratulations Bill on this prestigious honour.

I would also like to congratulate Bruce Wallace who was awarded the title of MPAQ’s Official Historian, in recognition of his ongoing support by providing information about the history of our Association. Bruce was also appointed in the Association’s Forum Hall of Fame, Bruce’s contribution has been invaluable, congratulations and thank you to Bruce.

Before I finish I would just like to acknowledge our team at MPAQ one more time. Plumbing is the most important trade in the world and is a lifesaving profession. Our members are on the front line and we as an association are on the front line. Thank you to each and every member for your hard work and dedication to the industry.

Penny Cornah Executive Director

Committee of Management Statement For the year ended 30 June 2019 John Salmon - Treasurer

In the opinion of the Committee of Management, the committee declares in relation to the general purpose financial statements that in its opinion: (a) the financial statements and notes comply with the Australian Accounting Standards; (b) the financial statements and notes comply with any other requirements imposed by the Reporting Guidelines or Part 3 of Chapter 8 of the Fair Work (Registered Organisations) Act 2009 (the RO Act); (c) the financial statements and notes give a true and fair view of the financial performance, financial position and cash flows of the reporting unit for the financial year to which they relate; (d) there are reasonable grounds to believe that the reporting unit will be able to pay its debts as and when they become due and payable; (e) during the financial year to which the general purpose financial statements relate and since the end of that year: i. meetings of the Committee of Management were held in accordance with the rules of the Association; ii. the financial affairs of the reporting unit have been managed in accordance with the rules of the association; iii. the financial records of the reporting unit have been kept and maintained in accordance with the Act; iv. where the information has been sought in any request by a member of the reporting unit or Registrar duly made under s 787 of the Act, that information has been provided to the member or Registrar; and v. where any order for inspection of financial records has been made by the Queensland Industrial Relations Commission under s 788 of the Act, there has been compliance. (f) The Association has complied with the requirements under s 741 of the Act, Financial Management Training, and in doing so confirm the following: i. John Salmon, Treasurer, is the current financial management officer; ii. Mr Salmon’s training was last completed on 17 April 2018; and iii. the name of the training course was DW IR Finance and Governance Training.

Signed in accordance with a resolution passed on 15 October 2019 Treasurer

John Salmon Dated

15 October 2019

2019 Financial Report | 10

Council Certificate For the year ended 30 June 2019 Industrial Relations Act 2019

We, the undersigned, being two members of the Council of the Master Plumbers’ Association of Queensland (Union of Employers), do state on behalf of the Council and in accordance with a resolution passed by the Council, that: i. In the opinion of the Council, the accounts show a true and fair view of the Association’s financial affairs at 30 June 2019, and for the year then ended. ii. The accounts were prepared under the Industrial Relations Act (2016) and in accordance with the Australian Accounting Standards and the Associations Incorporation Act 1981. iii. In the Council’s opinion, the Association was solvent during the whole of the year. iv. The Council’s meetings were held under the rules of Industrial Associations. v. The Audit Report and Accounts for the Association’s financial year, immediately before this year’s accounts, have been presented to the Council at the Annual General Meeting of the Association under Section 782 of the Act.

K. Vickers President

J. Salmon Treasurer

Date: 15 day of October 2019 Brisbane

Date: 15 day of October 2019 Brisbane

11

Master Plumbers’ Association of Queensland (Union of Employers)

Consolidated Statement of Profit or Loss and Other Comprehensive Income For the financial year ended 30 June 2019 Consolidated Group Notes

2019

2018

$

$

1,490,935

1,591,916

Education and other services

278,925

263,138

Exhibitions, conferences and seminars

758,265

470,329

351,829

372,581

112,669

109,681

2,992,623

2,807,645

138,554

113,868

Revenue from Continuing Operations Membership subscriptions and related revenue

Sales of goods and services

2a

Commissions received Total Revenue Other income Investment income

2b

Net gain/(loss) on disposal of non current assets

2b

11,806

(11)

Sundry income

2b

834,625

139,465

984,985

253,322

Costs of sales

236,856

259,166

Conferences and continuing education expenses

617,132

498,923

78,774

82,890

Advertising and promotions Property expenses Depreciation and amortisation expense Communication and postage Computer expenses Consultants Employee benefits expense

2c

63,878

73,166

166,526

163,788

44,767

47,218

103,972

98,531

62,199

71,432

1,272,514

1,180,418

Interest expense

49,291

44,817

Other expenses

208,162

184,940

Total expenses

2,904,071

2,705,289

Current year surplus/(deficit) before income tax

1,073,537

355,678

-

-

1,073,537

355,678

10,974

170,408

Income tax expense Net current year surplus/(deficit) attributable to members of the entity Other comprehensive income Items that will not be reclassified to profit or loss: Changes in the fair value of equity investments at fair value other comprehensive income Other comprehensive income for the year

10,974

170,408

Total comprehensive income for the year

1,084,511

526,086

Total comprehensive income attributable to members of the entity

1,084,511

526,086

The above Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes.

2019 Financial Report | 12

Master Plumbers’ Association of Queensland (Union of Employers)

Consolidated Statement of Financial Position For the financial year ended 30 June 2019 Consolidated Group Notes

2019

2018

$

$

Cash at bank

868,140

912,688

Term deposits

924,917

412,644

502,197

575,617

7,266

26,790

ASSETS Current assets

Trade and other receivables

3

Inventories Prepayments and deposits Total current assets

105,296

81,725

2,407,816

2,009,464

Non-current assets Property plant and equipment

4

3,267,605

2,657,448

Intangible assets

5

120,891

153,126

Financial assets

6

1,862,769

1,712,775

Total non-current assets

5,251,265

4,523,349

Total assets

7,659,081

6,532,813

LIABILITIES Current liabilities Trade and other payables

7

256,177

247,603

Income in advance

8

1,099,074

1,141,064

Employee benefits

9

109,656

98,308

Borrowings

10

Total current liabilities

861,551

9,569

2,326,458

1,496,544

Non-current liabilities Employee benefits

9

16,802

7,967

Borrowings

10

49,634

846,626

66,436

854,593

Total liabilities

2,392,894

2,351,137

Net assets

4,586,187

4,181,676

Total non-current liabilities

Members’ funds Division funds Accumulated funds Financial assets reserve Total members’ funds

11

84,509

86,364

4,337,646

3,893,254

164,032

202,058

4,586,187

4,181,676

The above Statement of Financial Position should be read in conjunction with the accompanying notes.

13

Master Plumbers’ Association of Queensland (Union of Employers)

Consolidated Statement of Changes in Equity For the financial year ended 30 June 2019 Accumulated funds

As at 1 July 2018

Consolidated Group Division funds assetsFinancial reserve

Total

$

$

$

$

3,893,254

86,364

202,058

4,181,676

1,073,537

-

-

1,073,537

-

-

10,974

10,974

1,073,537

-

10,974

1,084,511

Comprehensive income Surplus for the year Other comprehensive income for the year Total comprehensive income attributable to members of the entity for the year Transfers to/from reserves −− Transfer from Division funds to Accumulated funds −− Transfer from Financial Asset reserve to Accumulated funds"

1,855

(1,855)

-

-

49,000

-

(49,000)

-

Total transfers to/from reserves

50,855

(1,855)

(49,000)

-

As at 30 June 2019

5,017,646

84,509

164,033

5,266,187

As at 1 July 2017

3,490,463

89,626

75,501

3,655,590

355,678

-

-

355,678

-

-

170,408

170,408

355,678

-

170,408

526,086

3,262

(3,262)

-

-

43,851

-

(43,851)

-

47,113

(3,262)

(43,851)

-

3,893,254

86,364

202,058

4,181,676

Comprehensive income Surplus for the year Other comprehensive income for the year −− Net fair value gains on available-for-sale financial assets Total comprehensive income attributable to members of the entity for the year Transfers to/from reserves −− Transfer from Division funds to Accumulated funds −− Transfer from Financial Asset reserve to Accumulated funds Total transfers to/from reserves As at 30 June 2018

The above Statement of Changes in Equity should be read in conjunction with the accompanying notes.

2019 Financial Report | 14

Master Plumbers’ Association of Queensland (Union of Employers)

Consolidated Statement of Cash Flows For the financial year ended 30 June 2019 Consolidated Group Notes

2019

2018

$

$

3,490,808

3,365,712

(2,887,309)

(2,681,130)

27,849

5,917

Cash flows from operating activities Receipts from members' and non-members Payments to suppliers and employees Interest received Dividends received Interest paid Net cash flows from operating activities

14

Cash flows from investing activities

(i)

Proceeds from sale of investments

6

Proceeds from sale of property, plant and equipment

79,676

77,678

(49,291)

(44,817)

661,733

723,360

417,310

442,535

14,545

-

Payment for property, plant and equipment

4

(34,749)

(8,271)

Payments for intangibles

5

(8,800)

(32,382)

Payments into term deposits

(512,272)

-

Payments for investments

(556,331)

(867,935)

Net cash flows from investing activities

(680,296)

(466,052)

(25,986)

(9,439)

-

-

Net cash flows from financing activities

(25,986)

(9,439)

Net (decrease) / increase in cash and cash equivalents

(44,548)

247,869

Cash and cash equivalents at the beginning of the financial year

912,687

664,818

Cash and cash equivalents at the end of the financial year

868,140

912,687

Cash flows from financing activities Repayments of Borrowings Increase in borrowings

i.

Non-cash investment activities During the financial year, the Association acquired motor vehicles with an aggregate fair value of $80,974 (2018: Nil) by means of chattel mortgage agreements. These acquisitions had a non-cash impact and therefore are excluded from cash flow.

The above Statement of Cash Flows should be read in conjunction with the accompanying notes.

15

Master Plumbers’ Association of Queensland (Union of Employers)

Notes to the Financial Statements For the financial year ended 30 June 2019 The consolidated financial statements and notes represent those of Master Plumbers’ Association of Queensland (Union of Employers) (the Association) and its controlled entities. The Association is an Incorporated Association in the state of Queensland and governed by the Industrial Relations Act 2016.

over the entity.

The Association has 100% control over the Specialist Redundancy Contractors Fund (SCRF) and the Plumbing Industry Group Training Scheme Incorporated (PIGTS).

All inter-group balances and transactions between entities in the consolidated group have been eliminated in full on consolidation.

NOTE 1. SUMMARY OF SIGNIFICANT b. Significant accounting judgements, estimates and ACCOUNTING POLICIES assumptions Basis of accounting, preparation and measurement The preparation of financial statements requires The financial statements are general purpose financial management to make judgements, estimates and statements that have been prepared in accordance assumptions that affect the application of policies and with Australian Accounting Standards - Reduced reported amounts of assets, liabilities, income and Disclosure Requirements, Accounting Interpretations expenses. The estimates and associated assumptions and other authoritative pronouncements of the Australian are based on historical experience and various other Accounting Standards Board (AASB). The Association factors that are believed to be reasonable under the is a not-for-profit entity for financial reporting purposes circumstances, the results of which form the basis of under Australian Accounting Standards. making the judgements. Actual results may vary from these estimates.

All disclosures required under s765(1) Reporting Guidelines for the purposes of section 765 are contained The estimates and underlying assumptions are reviewed within the Report except where the activities identified in on an ongoing basis. Revisions to accounting estimates the guidelines have not occurred in the reporting period. are recognised in the period in which the estimate is The financial statements have been prepared on the basis revised if the revision affects only that period or in the period of the revision and future periods if the revision of historical cost except for the following: affects both current and future periods.

• Land and buildings are measured at fair value less The significant accounting estimates and assumptions accumulated depreciation on buildings and any made are as follows: impairment losses.

Key judgements: • Available-for-sale financial assets are measured at fair value Provision for Impairment of receivables The methods used to measure the fair values of these Included in the trade receivables at the end of the assets are discussed in notes 1(i) and 1(e). Cost is based reporting period is an amount receivable from the on the fair values and consideration given in exchange for members amounting to $444,862 (2018: $537,139). assets.

In accordance with AASB 9 Financial Instruments, the Association reviewed its debtors looking for any The Association elected to early adopt AASB 9 Financial impairment issues however as the majority of debtors Instruments in the 2016 financial year because the new are not yet recognised in the Income Statement, it was accounting policies provide more reliable and relevant determined that no impairment provision was required. information for users.

Refer to Note 3 for more details.

The financial statements are presented in Australian Provision for Employee benefits dollars, which is the association’s functional and presentation currency.

Provisions for employee benefits payable after 12 months The financial statements were approved by the Executive from the reporting date are based on future wage and salary levels, experience of employee departures and Council on 11 October 2019. periods of service. The amount of these provisions would a. Principles of consolidation change should any of these factors change in the next 12 The consolidated financial statements incorporate the months. assets, liabilities and results of entities controlled by Leases Master Plumbers’ Association of Queensland (Union The Association has entered into a lease of office of Employers) at the end of the reporting period. equipment as disclosed in Note 12. Management has Subsidiaries are entities the parent controls. The parent determined that all of the risks and rewards of ownership controls an entity when it is exposed to, or has rights to, of this equipment remain with the lessor and has therefore variable returns from its involvement with the entity and classified the lease as an operating lease. has the ability to affect those returns through its power 2019 Financial Report | 16

Master Plumbers’ Association of Queensland (Union of Employers) Significant accounting estimates and assumptions The key estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of certain assets and liabilities within the next annual reporting period are as follows: Useful life of and residual values of property, plant and equipment Property, plant and equipment are measured using the cost base less depreciation and impairment losses. The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

Impairment of Land and Buildings The Association assesses impairment at each reporting date by evaluating conditions specific to the Association that may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined. Impairment triggers may comprise a change in economic conditions, demand of land and building, change in interest rates or returns from commercial premises. Should fair value less costs to sell or current replacement cost calculations be required, estimated recoverable amounts would incorporate a number of key estimates.

Provisions, contingent Liabilities and contingent assets Provisions are measured at the estimated expenditure required to settle the present obligation, based on the most reliable evidence available at the reporting date, including the risks and uncertainties associated with the present obligation. Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. Provisions are discounted to their present values, where the time value of money is material.

Any reimbursement that the Group can be virtually certain to collect from the third party with respect to the obligation is recognised as a separate asset, However, this asset may not exceed the amount of the related provision.

No liability is recognised if an outflow of economic resources as a result of present obligation is not probable.

Such situations are disclosed as contingent liabilities, unless the outflow of resources is remote in which case no liability would be recognised. c. Revenue recognition Revenue is measured at the fair value of the consideration received or receivable.

The Association reviews recognition to ensure alignment taking into account contracts, performance obligations, transaction pricing, allocation of transaction pricing and revenue recognition. Amounts disclosed as revenue are net of returns, trade allowances, rebates and amounts

collected on behalf of third parties.

The Association recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and specific criteria have been met for each of the group’s activities as described below. The Association bases its estimates on historical results, taking into consideration the type of customers, the type of transaction and the specifics of each arrangement.

Revenue is recognised for the major business activities as follows: (i) Membership subscriptions and related revenue The Association’s membership usual subscription year is 1 July to 30 June and the majority of members have their membership within this period.

Fees are payable monthly and annually in advance. Only those receipts that are attributable to the current financial year are recognised as revenue.

Fee receipts relating to periods beyond the current financial year are shown, excluding any applicable taxes, in the Statement of Financial Position as income in advance, under the heading of current liabilities. (ii) Education, exhibitions, conferences, seminars and other services Fees and charges are recognised as income in the year of receipt, except to the extent that fees and charges relate to events or courses to be held in future periods.

Such income is treated as income in advance under the heading of current liabilities. (iii) Sale of goods The Association recognises revenue from the sale of goods when physical control of the goods was passed to the purchaser pursuant to an enforceable sales contract and the costs incurred or to be incurred in respect of the transaction can be reliably measured. Risks and rewards of ownership are considered to be passed to the buyer at the time of delivery of the goods to the customer.

The Association participates in a fuel scheme whereby members received a benefit from purchasing discounted fuel directly from suppliers through the use of loyalty fuel cards in the prior year. The suppliers charged the Association which was then on-charged to the members through the monthly billing process. The Association receives a rebate from the suppliers ranging from $0.01 to $0.025 per litre of fuel consumed by the members.

The rebate is credited to the Association when the fuel accounts became payable.

The Association now primarily has members join up directly with the fuel suppliers but under the Association’s agreement with the supplier. A rebate is still received by the Association from the suppliers but at a lower rate (around $0.01c a litre). (iv) Commissions received

Master Plumbers’ Association of Queensland (Union of Employers)

Notes to the Financial Statements CONTINUED The Association receives revenue in the form of trailing or upfront commissions on member-generated activities through its member benefit program offers. Income is accounted for on accruals basis. (v) Investment income Investment income comprises interest and dividends.

Interest revenue is recognised as it accrues, using the effective interest method.

Dividend revenue is recognised when the right to receive a dividend has been established. (vi) Sundry income Sundry income comprises of funding related to training as well as for the coordination and promotion of training programs as well as other small sundry items and is received in the form of grants and donations. Grants are recognised in accordance with deliverables or performance obligations as set out in each contract. If grants are deemed as non reciprocal in nature they are recognised as operating revenue in the year in which the Association obtains control over the funds. d. Expenditure All expenditures are accounted for on accruals basis and are classified under headings that aggregate all costs related to the category. Where costs cannot be directly attributed to a particular category, they would be allocated to activities on a basis consistent with the use of the resources. Overheads have been allocated on the basis of a head count. e. Financial instruments The Association elected to early adopt AASB 9 Financial Instruments for the year ended 30 June 2016 and subsequent financial years. Accordingly the Association would have no transitional disclosures in the current financial year. AASB 9 replaces the provisions of AASB 139 that relate to the recognition, classification and measurement of financial assets and financial liabilities; derecognition of financial instruments and impairment of financial assets. AASB 9 also significantly amends other standards dealing with financial instruments such as AASB 7 Financial Instruments: Disclosures.

Accounting policies applied from 1 July 2015 From 1 July 2015, the Association classifies its financial assets in the following measurement categories: • those to be measured at amortised cost, and • those to be measured subsequently at fair value (either through other comprehensive income, or through profit or loss).

The classification depends on the Association’s business model for managing the financial assets and the contractual terms of the cash flows.

Initial recognition, measurement and derecognition At initial recognition, the Association measures a financial 2019 Financial Report | 18

asset or liability at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed as surplus or deficit. Subsequent to initial recognition these instruments are measured as set out below.

Amortised cost

Assets are measured at amortised cost only if the asset is held within a business model with the objective of collecting contractual cash flows and the contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest. A gain or loss on a debt financial assets are derecognised when the contracted rights to the cash flows from the financial assets expire, or when the financial asset and investment that is subsequently measured at amortised cost is recognised in profit or loss when the asset is derecognised or impaired.

Interest income from these financial assets is included in interest income using the effective interest rate method.

The Association’s investments held at amortised cost comprise only of term deposits.

Fair value through other comprehensive income (FVOCI) Financial assets at fair value through other comprehensive income includes equity securities which are not held for trading, and for which the Association has made an irrevocable election at initial recognition to recognise changes in fair value through OCI rather than profit or loss.

Dividends from equity investments continue to be recognised in profit or loss as income when the Association’s right to receive payments is established.

Impairment losses (and reversal of impairment losses) on equity investments measured at FVOCI are not reported separately from other changes in fair value.

Impairment The Association assesses on a forward looking basis the expected credit losses associated with its assets carried at amortised cost and FVOCI. The impairment methodology applied depends on whether there has been a significant increase in credit risk as noted below.

For trade receivables only, the Association applies the simplified approach permitted by AASB 9, which requires expected lifetime losses to be recognised from initial recognition of the receivables.

The Association is exposed to credit risk if counterparties fail to make payments as they fall due in respect of: • loans provided to entities

Master Plumbers’ Association of Queensland (Union of Employers) • payment of trade receivables as invoices fall due • contractual cash flows of debt investments For financial assets originated from 1 July 2015, the following credit risk modelling applies: The Association considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase in credit risk, the Association compares the risk of a default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition. It considers available reasonable and supportive forwarding-looking information.

Financial assets are written off when there is no reasonable expectation of recovery.

Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are recognised initially at fair value plus any directly attributable transaction costs.

Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method of asset valuation, less any impairment losses.

Loans and receivables comprises cash and cash equivalents and trade and other receivables.

Available for sale financial assets Available for sale financial assets are non-derivative financial assets are either designated to this category or do not qualify for inclusion in any of the other categories of financial assets. The Master Plumbers’ Association of Queensland (Union of Employers) Available for sale financial assets includes listed securities.

All Available for sale financial assets are measured at fair value. Gains and losses are recognised in other comprehensive income and reported within the Available for sale reserve within equity.

When the asset is disposed of or is determined to be impaired the cumulative gain or loss recognised in other comprehensive income is reclassified from the equity reserve to accumulated funds and presented as a reclassification adjustment within other comprehensive income. Interest calculated using the effective interest method and dividends are recognised in profit or loss within “revenue” (see note 2b).

Reversals of impairment losses for Available for sale debt securities are recognised in profit or loss if the reversal can be objectively related to an event occurring after the impairment loss was recognised. For Available for sale equity investments impairment reversals are not recognised in profit loss and any subsequent increase in fair value is recognised in other comprehensive income.

Held-to-maturity investments Held-to-maturity investments are non-derivative

financial assets that have fixed maturities and fixed or determinable payments, and it is the Association’s intention to hold these investments to maturity. They are subsequently measured at amortised cost. Gains or losses are recognised in profit or loss through the amortisation process and when the financial asset is derecognised.

Financial liabilities The Master Plumbers’ Association of Queensland’s financial liabilities include borrowings and trade and other payables. Financial liabilities are measured subsequently at amortised cost using the effective interest method. f. Cash and cash equivalents Cash and cash equivalents in the Statement of Financial Position comprise cash at bank and in hand and shortterm deposits with an original maturity of three months or less where the investment is convertible to known amounts of cash and is subject to insignificant risk of changes in value. For the purposes of the Statement of Cash Flow, cash and cash equivalents consist of cash and cash equivalents as defined above, net of any outstanding bank overdrafts. g. Trade and other receivables Trade receivables and other receivables, include amounts due from membership fees, sales of merchandise and from services provided in the ordinary course of business.

Receivables are expected to be collected within 12 months of the end of the reporting period are classified as current assets. All other receivables are classified as non-current assets.

Normal terms of settlement are from 21 to 30 days. The carrying amount of the receivable is deemed to reflect fair value.

An allowance for impairment is made when there is objective evidence that the Association will not be able to collect the debts. Bad debts are written off when identified. h. Inventories Inventories comprise goods for resale including standards, merchandise and member stationery.

Inventories have been valued at the lower of cost and net realisable value. Cost is based on the latest purchase price. Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs necessary to make the sale. i. Property, Plant and Equipment Recognition and measurement Items of property, plant and equipment are measured on the cost basis and are therefore carried at cost less accumulated depreciation and any accumulated impairment losses. In the event that the carrying value of property, plant and equipment is greater than the estimated recoverable amount, the carrying amount is written down immediately to the estimated recoverable

Master Plumbers’ Association of Queensland (Union of Employers)

Notes to the Financial Statements CONTINUED amount and impairment losses are recognised through profit or loss.

The recoverable amount of property, plant and equipment is the higher of fair value less costs of disposal and value in use. Depreciated replacement cost is used to determine value in use where the assets are not held principally for cash generating purposes and would be replaced if the Association was deprived of it. Depreciated replacement cost is the current replacement cost of an item of plant and equipment less, where applicable, accumulated depreciation to date, calculated on the basis of such cost.

The cost of fixed assets constructed by the association includes the cost of materials and direct labour.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only where it is probable that future economic benefits associated with the item will flow to the Association and the cost of the item can be measured reliably.

Repairs and maintenance are recognised as expenses in profit or loss during the financial period in which they are incurred.

Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment and are recognised within profit or loss.

Depreciation Depreciation is recognised in profit or loss on a straightline basis or reducing balance method, over the estimated useful lives of each part of an item of property, plant and equipment. Land is not depreciated.

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

recognised following completion of technical feasibility and where the Association has an intention and ability to use the asset. k. Leased assets Lease payments for operating leases, where substantially all the risks and the benefits remain with the lessor, are recognised as expenses on a straight line basis over the lease term. Operating leases are not recognised in the Statement of Financial Position. l. Impairment of assets At the end of each reporting period, the Association assesses whether there is any indication that an asset may be impaired. The assessment will consider both external and internal sources of information. If such an indication exists, an impairment test is carried out on the asset by comparing the recoverable amount of that asset to the asset’s carrying amount. Any excess of the asset’s carrying amount over its recoverable amount, is immediately recognised in profit or loss. m. Trade and other payables Trade payables and other payables represent liabilities for goods and services provided to the Association before the end of the financial year that are unpaid. These amounts are usually settled within 30 days. The carrying amount of the creditors and payables is deemed to reflect fair value. n. Deferred income and income in advance The liability for deferred income is the unutilised amounts of income received for services to be provided in the following 12 months. o. Employee benefits Employee benefits comprise wages and salaries, annual, sick and long service leave, and contributions to superannuation plans.

Liabilities for wages and salaries expected to be settled within 12 months of the reporting date are recognised in Buildings 2.5% to 20% straight-line other payables in respect of employees’ services up to Plant and 10%-33% reducing balance/straightthe reporting date. Liabilities for annual leave in respect equipment line of employees’ services up to the reporting date in which the employees render the related services are recognised Motor vehicles 25.00% reducing balance under employee benefits in the Statement of Financial j. Intangible assets Poistion under annual leave.

Costs incurred in developing products or systems and Annual leave is measured at the amounts expected costs incurred in acquiring software and licenses that to be paid when the liabilities are settled and amounts will contribute to future period financial benefits through expected to be settled after 12 months from the end of revenue generation and/or cost reduction are capitalised to software. Costs capitalised include external direct costs the reporting period are discounted. All annual leave are recognised as current as the Association does not have of materials and service and direct payroll and payroll the unconditional right to defer payments for a period of related costs of employees’ time spent on the materials twelve months. and service and direct payroll and payroll related costs The liability for long service leave is recognised in of employees’ time spent on the project. Amortisation is employee benefits on the Statement of Financial Position calculated on a straight-line basis or reducing balance and measured as the present value of expected future method over periods ranging from 2 to 10 years. payments to be made in respect of services provided IT development costs include only those costs directly by employees up to the reporting date. Consideration attributable to the development phase and are only 2019 Financial Report | 20

Master Plumbers’ Association of Queensland (Union of Employers) is given to anticipated future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the reporting date on deep corporate bonds with terms to maturity and currencies that match, as closely as possible, the estimated future cash outflows. p. Taxation Income Tax Under Division 50.15 of the Income Tax Assessment Act 1997, the Association is exempt from income tax.

Goods and service tax (GST) Revenues, expenses and assets are recognised net of the amount of GST except where the amount of GST incurred is not recoverable from the Australian Taxation Office, in which case it is recognised as part of the cost of acquisition of an asset or as part of an item of expense.

Receivables and payables are recognised inclusive of GST. The net amount of GST recoverable from or payable to the Australian Taxation Office is included as part of receivables or payables.

Cash flow is included in the Statement of Cash Flow on a gross basis. The GST component of cash flow arising from investing and financing activities that is recoverable from or payable to the Australian Taxation Office is classified as operating cash flow. q. Comparatives When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year. r. New standards and interpretations not yet adopted The following standards, amendments to standards and interpretations have been identified as those that may significantly impact the Association in the period of initial application. (i) AASB 15 and 1058

contract modifications) and improve guidance for multipleelement arrangements.

AASB 1058 supersedes all the income recognition requirements relating to private sector NFP entities, and the majority of income recognition requirements relating to public sector NFP entities, previously in AASB 1004 Contributions. The timing of income recognition depends on whether such a transaction gives rise to a liability or other performance obligations (a promise to transfer a good or service), or a contribution by owners related to an asset (such as cash or another asset) received by an entity.

In relation to Grants recieved, once the company has been notified of the successful grant application, the terms and conditions of each grant will be reviewed in accordance with AASB Revenue from Contracts with Customers, to determine the deliverables and performance obligations and pricing and when to recognise the income associated to the grant.

In relation to Membership Income, this will continue to be recognised evenly over the payment period as amortisation is applicable to reflect the support and other services provided over the period. (ii) AASB 16 Leases

AASB 16 will cause the majority of leases of an entity to be brought onto the statement of financial position. There are limited exceptions relating to short-term leases and low value assets which may remain off-balance sheet.

The calculation of the lease liability will take into account appropriate discount rates, assumptions about lease term and increases in lease payments. A corresponding right to use asset will be recognised which will be amortised over the term of the lease. Rent expense will no longer be shown, the profit and loss impact of the leases will be through amortisation and interest charges.

Effective Date Annual reporting periods beginning on or after 1 January 2019.

The impact on the reported financial position and These new standards are effective for annual reporting performance have not yet been determined. periods beginning on or after 1 January 2019 (i.e. 30 June s. Information to be given to members or registrar 2020 reporting date for the Association). The Association has not assessed the impact of changes that may result Under s787 of IRA 2016: from the implementation of AASB15. (i) a member of the Association, or the registrar, AASB 15 introduces a five step process for revenue may apply to the Association for stated recognition with the core principle of the new standard information, prescribed by regulation, about the being for entities to recognise revenue to depict the Association to be made available to the person transfer of goods and services to customers in amounts making the application. that reflect the consideration (that is, payment) to which (ii) The application must be in writing; and state the entity expects to be entitled in exchange for those the period, which must be at least 14 days goods or services. after the application is made, within which the Account policy changes will arise in timing of revenue information must be made available; and state recognition, treatment of contracts which contain a the way in which the information must be made financing element. AASB 15 will also result in enhanced available. disclosures about revenue, provide guidance for (iii) The Association must ensure it complies with transactions that were not previously addressed the application. comprehensively (for example, service revenue and

Master Plumbers’ Association of Queensland (Union of Employers)

Notes to the Financial Statements CONTINUED For the financial year ended 30 June 2019 NOTE 2. REVENUE, OTHER INCOME AND EXPENSES Consolidated Group 2019

2018

$

$

a. Revenue Sale of goods and services Fuel sales (including rebate)

39,666

45,496

Sales to members

161,707

162,049

Advertising sales

150,456

165,036

Total sales of goods

351,829

372,581

b. Other income Investment income Interest

27,849

5,917

Dividends

79,676

77,678

Rental Income Total investment income Net gain/(loss) on disposal of available for sale financial investments

31,029

30,273

138,554

113,868

11,806

(11)

14,545

-

(86,681)

(285,649)

80,942

285,638

11,806

(11)

803,535

116,617

-

127

Disposal of property, plant and equipment Proceeds on disposal Cost of assets (Including selling cost) Accumulated depreciation

Sundry income Grants Donations Other sundry income

31,090

22,721

154,625

139,465

Grant income for the year ended 30 June 2019 includes a 20% share of the funds received by PICAC, as agent on behalf of the landowners, for the construction of a new training facility at Beenleigh. c. Expenses Finance charges included in lease payments

4,918

1,303

Operating lease payments

19,322

12,600

Auditors remuneration

23,850

25,324

Meeting allowances paid to Council members

15,982

9,473

Legal costs - other legal matters

17,828

19,532

Remuneration paid to President

8,851

7,812

1,104,081

1,032,203

104,435

96,897

6,922

5,616

20,183

(7,573)

-

24,014

Employee expenses - employees other than holders of office Wages and salaries Superannuation Workers' compensation Movements in employee benefits provisions Separation and redundancies Other Employee related costs Total (other than holders of office) 2019employee Financialbenefits Report expense | 22

36,893

29,261

1,272,514

1,151,157

Master Plumbers’ Association of Queensland (Union of Employers) NOTE 3. TRADE AND OTHER RECEIVABLES Consolidated Group 2019

2018

$

$

484,039

537,139

Current Trade receivables Other receivables

18,158

38,478

502,197

575,617

Total

Unearned at 30 June

$

$

Training invoices receivable

33,948

29,167

Events invoices receivable

83,131

78,068

Grants invoices receivable

131,409

73,874

Membership invoices receivable

236,148

239,515

(397)

-

18,158

-

502,197

420,624

Total trade and other receivables

MPAQ has a portfolio of trade receivables of $444,862 at 30 June 2019.

3.1 Breakdown of Receivables

Other income receivable Investment income receivable

As demonstrated on the above table, the majority of the balances recognised in trade and other receivables are related to services invoiced in advance and therefore a corresponding liability is recognised. In addition, $18,158 relates to investment income received subsequent to 30 June 2019. The remaining $24,238 is the total receivable subject to an impairment assessment at 30 June 2019.

Master Plumbers’ Association of Queensland (Union of Employers)

Notes to the Financial Statements CONTINUED For the financial year ended 30 June 2019 NOTE 4. PROPERTY PLANT & EQUIPMENT Consolidated Group Freehold land at cost

Buildings at cost

Work in Progress

Plant & equipment at cost

Motor Vehicles at cost

Total

$

$

$

$

$

$

1,115,711

2,082,707

-

209,002

280,513

3,687,933

Additions

-

-

-

7,667

604

8,271

Disposals

-

-

-

(6,031)

-

(6,031)

1,115,711

2,082,707

-

210,638

281,117

3,690,173

Additions

-

11,465

622,665

18,914

85,344

738,388

Disposals

-

-

-

(23,827)

(57,977)

(81,804)

1,115,711

2,094,172

622,665

205,725

308,484

4,346,757

60,694

492,219

-

160,888

200,762

914,563

Charge for the Year

-

63,993

-

22,779

37,410

124,182

Impairment Loss

-

-

-

-

-

-

Disposals

-

-

-

(6,020)

-

(6,020)

60,694

556,212

-

177,647

238,172

1,032,725

Charge for the Year

-

64,122

-

13,120

48,250

125,492

Disposals

-

-

-

(23,519)

(55,546)

(79,065)

60,694

620,334

-

167,248

230,876

1,079,152

at 30 June 2019

1,055,017

1,473,838

622,665

38,477

77,608

3,267,605

at 30 June 2018

1,055,017

1,526,495

-

32,991

42,945

2,657,448

Cost At 30 June 2017

At 30 June 2018

At 30 June 2019 Accumulated depreciation and impairment At 1 July 2017

At 30 June 2018

At 30 June 2019 Net carrying amount

The Association engaged Taylor Byrne Valuers, independent accredited valuers, to determine the fair value of its land and buildings at Bradman Street. Fair value is amount that the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The highest and best use of the land and buildings are considered in determining the valuation.

The effective date of the valuation was 18 May 2017.

The result was a valuation of the Acacia Ridge building and land of $1,820,000. An impairment loss of $185,813 was recognised to record the carrying value at an amount equivalent to the valuation.

The Association has determined, after appropriate review of market conditions recent sales in the area, that the current carrying value remains fair and is not impaired.

In November 2016 MPAQ purchased a building located in Beenleigh in partnership with service trades organisations to deliver a centre of excellence for training. Construction on this facility commenced late in the 2019 financial year and was in progress at 30 June 2019.

2019 Financial Report | 24

Master Plumbers’ Association of Queensland (Union of Employers) NOTE 5. INTANGIBLE ASSETS Consolidated Group Computer software at cost

Total

$

$

211,350

211,350

Cost At 30 June 2018 Additions

8,800

8,800

Disposals

(1,877)

(1,877)

218,273

218,273

At 30 June 2018

58,224

58,224

Charge for the year

41,035

41,035

Disposals

(1,877)

(1,877)

At 30 June 2019

97,382

97,382

at 30 June 2019

120,891

120,891

at 30 June 2018

153,126

153,126

At 30 June 2019 Accumulated Amortisation

Net carrying amount

NOTE 6. FINANCIAL ASSETS Consolidated Group 2019

2018

$

$

1,862,759

1,712,765

Investments at fair value in: Financial assets at fair value through other comprehensive income −− Shares - listed −− Shares - unlisted

10

10

1,862,769

1,712,775

1,712,775

1,516,967

556,330

467,935

(417,310)

(442,535)

Movement in available-for-sale financial assets Balance at 1 July Purchases Disposals Revaluation increment Balance at 30 June

10,974

170,408

1,862,769

1,712,775

All financial assets are quoted on the Australian Stock Exchange, with the exception of $10 investment in MPA Ltd (Master Plumbers Australia Limited). The Master Plumbers’ Association of Queensland have engaged Elston Partners to manage the investment portfolio. The portfolio is invested within the parameters laid out in the Master Plumbers’ Association of Queensland Investment policy statement.

Due to a significant change in the value of the investments, a fair value gain of $10,974 (2018: gain of $170,408) was recognised in other comprehensive income during the year.

Master Plumbers’ Association of Queensland (Union of Employers)

Notes to the Financial Statements CONTINUED For the financial year ended 30 June 2019 NOTE 7. TRADE AND OTHER PAYABLES Consolidated Group 2019

2018

$

$

Trade payables

94,312

78,202

Legal payables

-

3,245

161,865

166,156

256,177

247,603

741,206

806,524

Other creditors and accruals

NOTE 8. INCOME IN ADVANCE Member's subscription fees Event sponsorship and registration in advance

357,868

334,540

1,099,074

1,141,064

Annual leave

46,538

42,885

Long service leave

63,118

55,423

109,656

98,308

16,802

7,967

16,802

7,967

NOTE 9. EMPLOYEE BENEFITS - PROVISION Employees other than holders of office Current

Non-current Long service leave

A portion of long service leave and the entire annual leave balance have been classified as a current liability since the Association does not have an unconditional right to defer settlement of these liabilities for at least 12 months after the end of the reporting period. The Association expects that the majority of the long service liability will be paid after 12 months following the end of the reporting period.

NOTE 10. BORROWINGS Current Motor vehicle lease

26,551

9,569

National Australia Bank Business Markets - Fixed Rate Loan

400,000

-

National Australia Bank Business Markets - Floating Rate Loan

435,000

-

861,551

9,569

49,634

11,626

National Australia Bank Business Markets - Fixed Rate Loan

-

400,000

National Australia Bank Business Markets - Floating Rate Loan

-

435,000

49,634

846,626

Non-current Motor vehicle lease

The NAB Business Markets facility was secured by a registered mortgage over the property situated at 243 Bradman Street, Acacia Ridge.

The NAB loan is an interest only loan and interest is payable monthly in arrears. The facility limit is $835,000 with an expiry date of 30 November 2019. The Association expects to refinance all or part of the loan prior to that date.

The Motor vehicles are leased with St George Bank over a period of 4 years with interest and principle payable monthly in arrears.

2019 Financial Report | 26

Master Plumbers’ Association of Queensland (Union of Employers) NOTE 11. TOTAL FUNDS a. Movement in funds Details of the movement in the division funds are provided in the statement of changes in equity. b. Details of the division funds included in total members’ funds in the statement of changes in equity Division funds As at 30 June the following funds were held in reserve as a result of fund-raising activities by the Divisions of the Association, and reserved for related expenditure for advertising and promotion of the Association by the relevant Divisions.

Consolidated Group 2019

2018

$

$

1,627

1,627

17,802

19,381

Far North Queensland

2,916

2,916

Gold Coast

5,805

5,805

Brisbane South

6,935

6,935

13,638

13,638

35

35

839

839

Brisbane Central

Mackay North Queensland Redcliffe/Pine Rivers Sunshine Coast

282

282

Toowoomba

10,505

10,780

Golf club

24,126

24,126

84,509

86,364

The Golf Club has facilitated fundraising and social golf events for members and other parties. c. Details of reserves included in statement of changes in funds Financial assets reserve - this reserve records fair value changes in available-for-sale investments. These are unrealised gains and losses.

Master Plumbers’ Association of Queensland (Union of Employers)

Notes to the Financial Statements CONTINUED For the financial year ended 30 June 2019 NOTE 12. COMMITMENTS Capital and leasing commitments Capital commitments Consolidated Group

Within one year

2019

2018

$

$

977,335

-

After one year but not more than five years

-

-

More than five years

-

-

977,335

-

Total commitments under operating leases

Capital commitments related to the new training facility at Beenleigh. At this date it is expected that this will be covered

by Grant funding.

Operating lease commitments Non-cancellable operating leases contracted for but not recognised in the financial statements Payable - minimum lease payments Within one year After one year but not more than five years More than five years Total commitments under operating leases

29,617

13,860

111,065

11,550

-

-

140,682

25,410

The Association entered into a commercial lease of office equipment. This lease has a life of five years with no renewal option included in the contract. There was no restrictions placed upon the lessee when entering into these leases. The monthly cost includes some printing and stationery costs.

Finance lease commitments Finance leases contracted and recognised on the statement of financial position: Payable - minimum lease payments Within one year

33,703

10,731

After one year but not more than five years

49,634

11,626

-

-

Less - future finance charges

(7,152)

(1,159)

Total commitments under finance leases

76,185

21,198

More than five years

The Association has leased Motor Vehicles under Chatell Mortgage finance agreements for a period of 4 years.

The Association has a Lease receivable arrangement and receives $2,638 per month for partial use of the Bradman St premises. The lease term ends 31 March 2020 with an option for a further two years.

NOTE 13. CONTINGENT LIABILITIES The group has a maximum claim exposure under the Specialist Contractors Redundancy Fund, as at 30 June 2019 of $56,522 (2018: $36,598). This contingency relates to the liability of the fund to pay out redundancy claims to employees of currently contributing employers under the Fund. This exposure is secured with cash reserves of $110,392 (2018: $93,711) and accumulated funds of $124,027 (2018: $118,800).

2019 Financial Report | 28

Master Plumbers’ Association of Queensland (Union of Employers) NOTE 14. RECONCILIATION OF NET SURPLUS FOR THE YEAR TO NET CASH FLOWS FROM OPERATIONS Consolidated Group

Net surplus (deficit) for the year

2019

2018

$

$

1,073,537

355,678

Non cash flows in operating surplus / (deficit) Depreciation and amortisation expense

166,526

163,788

(680,000)

-

(11,806)

11

(Increase)/Decrease in receivables

130,755

(461,305)

(Increase)/Decrease in inventories

19,524

(4,863)

Grant revenue (Gain)/loss on disposal of non current assets Movement in Assets and Liabilities

(Increase)/Decrease in prepayments

(23,571)

(1,350)

Increase/(Decrease) in income in advance

(41,990)

574,341

8,575

104,634

Increase/(Decrease) in payables Increase/(Decrease) in employee benefits Net cash from operating activities

20,183

(7,574)

661,733

723,360

NOTE 15. FAIR VALUE DISCLOSURES AND MEASUREMENTS The Association carries the following assets at fair value: • Freehold land and buildings - $1,055,017 • Available-for-sale financial instruments - $1,862,759 Valuation techniques Fair values of freehold land and buildings have been determined by an independent valuer using the valuation indexes for similar sites and buildings to obtain a representative capitalisation rate. Recent sales have also been considered.

Valuation policies The market conditions around the freehold land and buildings are assessed at the end of each reporting date, and if the Councillors believe there has been a material movement in the value of the assets an independent valuation is obtained.

Measurement of Freehold land and buildings The association carries its land and building at amortised cost, however when there is an indication of impairment compared to the market value, the cost is adjusted to reflect the loss of value in the assets.

Fair value measurement of financial instruments The following table shows the financial assets measured at fair value on a recurring basis at 30 June 2019 and 30 June 2018: 30 June

2019

2018

Listed securities

1,862,759

1,712,765

Net fair value

1,862,759

1,712,765

Assets

Given that all available-for-sale investments held are quoted on the Australian Securities Exchange, the fair value hierarchy level used is level 1 (quoted prices in active markets).

Master Plumbers’ Association of Queensland (Union of Employers)

Notes to the Financial Statements CONTINUED For the financial year ended 30 June 2019 NOTE 16. FINANCIAL INSTRUMENTS Financial risk management - objectives and policies The Association’s financial instruments compromise cash and cash equivalents, available-for-sale financial investments and financial lease liabilities. In addition the Association has amounts receivable in respect of its members and subscriptions and amounts payable to trade and other creditors.

The main risks arising from the Association’s financial instruments are liquidity risk, credit risk and market price risk.

The Association does not use derivative instruments to manage risks associated with its financial instruments.

The Councilors have overall responsibility for risk management, including risks associated with financial instruments.

The Finance Committee is responsible for monitoring the effectiveness of the Association’s risk management and processes and reviewing risk management policies and processes and systems, taking into account changes in market conditions and the Association’s activities. The Finance Committee is responsible for developing and monitoring investment policies.

This note presents information about the Association’s exposure to liquidity, credit and market price risk and its objectives, policies and processes for measuring and managing risk. Further quantitative disclosures are included throughout these financial statements.

Liquidity Risk Liquidity risk is the risk that the Association will not be able to fund its obligations as they fall due.

The Association manages liquidity risk by monitoring forecast cash flows and ensuring that adequate liquid funds are available to meet normal operating expenses for 120 days. When necessary, cash for unforeseen events can be sourced from liquidation of available-for-sale financial instruments which were valued at $1,862,759 at 30 June 2019.

The following are the contractual maturities of financial liabilities including estimated interest payments: Carrying amount

Contractual cash flows (undiscounted)

6 months or less

6-12 months

1-2 years

2-5 years

More than 5 years

76,185

83,937

16,947

16,947

24,058

25,984

-

Loan facility (Note 10)

835,000

853,310

853,310

-

-

-

-

Trade and other payables (Note 7)

256,177

256,177

256,177

-

-

-

-

1,167,362

1,193,424

1,126,434

16,947

24,058

25,984

-

21,195

22,357

5,366

5,366

10,732

893

-

Loan facility (Note 10)

835,000

897,254

21,972

21,972

853,310

-

-

Trade and other payables (Note 7)

247,603

247,603

247,603

-

-

-

-

1,103,798

1,167,214

274,941

27,338

864,042

893

-

At 30 June 2019 Financial lease liabilities (Note 10)

Total financial liabilities At 30 June 2018 Financial lease liabilities (Note 10)

Total financial liabilities

Note that the Loan facility term ends 30 November 2019 and the Councillors anticipate the loan will be renegotiated at that time.

Credit Risk Credit risk is the risk of financial loss to the Association if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The Association is exposed to two sources of credit risk - amounts receivable in respect of membership or sponsorship and counterparty risk in respect of funds deposited with banks and other financial institutions.

The majority of amounts receivable are in respect of membership subscriptions from the Association’s members. Any amounts outstanding beyond the contracted period are followed up.

Funds are deposited only with those banks and financial institutions approved by Council. Such approval is only given in respect of banks that hold AA ratings from Standard & Poors or an equivalent rating from another reputable ratings agency. At the reporting date, the Association did not have any material credit risk exposures to any single receivable or group of receivables or any bank or financial institution.

2019 Financial Report | 30

Master Plumbers’ Association of Queensland (Union of Employers) Exposure to credit risk The carrying amount of the Association’s financial assets best represents its maximum credit risk exposure. The Association’s maximum exposure to credit risk at the reporting date was: Note

Carrying amount 2019

Cash and cash equivalents Trade debtors

3

Other current receivables

3

2018

$

$

1,793,057

1,325,332

484,039

537,139

18,158

38,478

2,295,254

1,900,949

Other current receivables are analysed in Note 3. None of the other current receivables are past due at the reporting date. Trade debtors comprise amounts due in respect of membership subscriptions. The aging of these debtors at reporting date was: 2019

2018

Gross

Impairment

Gross

Impairment

Not past due

233,991

-

415,689

-

Past due 0-30 days

192,145

-

75,136

-

567

-

46,314

-

-

-

-

-

426,704

-

537,139

-

Past due 31-120 days Past due 121 days to one year

Market Price Risk Market price risk is the risk that changes in market prices such as foreign exchange rates, interest rates and equity prices will affect the Association’s income or the value of its holdings of financial instruments. The Association is exposed to two sources of market price risk - fluctuations in interest rates and fluctuations in the value of its availablefor-sale investments.

Interest Rate Risk Interest rate risk refers to the risk that the value of financial instruments or cash flows associated with the instrument will fluctuate due to changes in market interest rates.

The Association is exposed to interest rate fluctuations on its cash and on term deposit. The Association actively monitors interest rates for cash at bank and on term deposit to maximise interest income.

The following table summaries the interest rate profile of the Association’s interest-bearing financial instruments.

Note

Carrying amount 2019

Fixed rate instruments Term Deposit

2018

$

$

924,917

412,644

Finance lease liabilities

10

(76,185)

(21,195)

Loan facility

10

(400,000)

(400,000)

448,732

(8,551)

Variable rate instruments Cash at bank and in hand Loan Facility

10

868,140

912,688

(435,000)

(435,000)

433,140

477,688

Master Plumbers’ Association of Queensland (Union of Employers)

Notes to the Financial Statements CONTINUED For the financial year ended 30 June 2019 Sensitivity Analysis A 0% decrease in interest rates and 0.5% increase in interest rates has been determined to be a reasonably possible movement in interest rates over a 12-month period based on information from various financial institutions, review of movements over the last two years and economic forecasters’ expectations. If this change had occurred at the reporting date, it would, with all other variables held constant, have increased or decreased the association’s surplus and funds by the amounts shown below.

Surplus

Funds

0.5% increase

0.5% (decrease)

0.5% increase

0.5% (decrease)

2,166

(2,166)

2,166

(2,166)

2,388

-

2,388

-

2019 Variable rate instruments 2018 Variable rate instruments

Equity price risk Equity price risk arises from fluctuations in the market values of available-for-sale securities.

The Association has engaged Elston Partners to advise on the management of its investment portfolio. The Council has approved risk and return parameters for investment in available-for-sale investments and receives reports from management and Elston Partners on a monthly basis regarding the performance on the investment portfolio. Buy, sell and portfolio rebalancing decisions are made by Elston Partners under a managed discretionary account advisory service.

At the reporting date, the market value of available-for-sale investments and the impact of a 10% movement in the market value of the investments was: Shares

Market Value

+10% impact

-10% impact

1,862,769

186,277

(186,277)

It should be noted that the full impact of movements in market value would not necessarily be immediately reflected in the statement of profit or loss and other comprehensive income and the association’s funds as these investments are deemed to be available-for-sale investments.

NOTE 17. RELATED PARTY TRANSACTIONS a. Key Management Personnel

Any person(s) having authority and responsibility for planning, directing and controlling the activities of the Association, directly or indirectly, including its Council members, is considered key management personnel.

Consolidated Group

Short-term employee benefits Post employment employee benefits Total key management personnel compensation:

2019 Financial Report | 32

2019

2018

$

$

190,255

155,609

14,040

12,103

204,295

167,712

Master Plumbers’ Association of Queensland (Union of Employers) b. Other related parties The Association made payments of a nature detailed below to certain parties, including partners or employees of Council member-related entities. The payments were made to all parties on the same terms and conditions: • Fees to trainers to provide training and development courses.

The Association also received the following fees from certain parties, including director-related entities. The fees were received from all parties under the same terms and conditions: The following table provides the total amount of transactions that were entered into with director-related entities for the relevant financial year. All transactions were carried out on normal terms and conditions and at arms lengths basis.

Director

Director-related entity

Transaction detail

2019 $

2018 $

William Watson

Connectors Plumbing Pty Ltd

Repairs and maintenance Bradman Street

1,587

1,141

Kelvin Slade

Slade Brothers Plumbing Pty Ltd Qld Industrial Gasfitting Services

Preparation and presentation of education courses

65,338

50,611

Repairs and maintenance Bradman Street

138

897

Kent Vickers

The names of each person holding the position of Councillor and Director during the financial year are: Councillors: Master Plumbers' Association of Queensland

Directors: Specialist Contractor Redundancy Fund

B. Watson

B. Kimlin

J. Salmon

R. Brouwers

K. Vickers

W. Watson

D. Nunn

S. Hannant

D. Yarrow

M. Ryan

Trustees: Specialist Contractor Redundancy Fund

J. Salmon

P. Robertson

W. Watson

K. Slade

H. Gall

B. Crew

MPAQ Meetings attended and entitles to be attended: Council Meetings entitled to be attended

K. Slade K. Vickers

Finance Committee

Remuneration Committee Meetings entitled Attendance to be attended

Governance & Policy Committee Meetings entitled Attendance to be attended

Attendance

Meetings entitled to be attended

Attendance

7

6

7

4

1

1

-

-

7

7

7

7

1

1

6

6

D. Nunn

7

7

7

7

1

1

-

-

J. Salmon

7

7

7

7

1

1

6

6

B. Kimlin

7

6

7

5

1

1

-

-

W. Watson

7

7

7

6

-

-

-

-

D. Yarrow

7

6

-

-

-

-

-

-

S. Hannant

7

6

-

-

-

-

6

6

M. Ryan

7

7

-

-

-

-

-

-

R. Brouwers

7

4

-

-

-

-

6

3

P. Robertson

7

5

7

3

-

-

6

6

H. Gall

7

7

-

-

-

-

6

2

B. Crew

7

3

-

-

-

-

-

-

Councillor

07 3273 0800 info@mpaq.com.au www.mpaq.com.au