J61046 AICDar04b - Australian Institute of Company Directors

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AICD INFORMATION
ANNUAL REPORT
2003 / 2004
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CONTENTS
Chairman’s and Chief Executive Officer’s Report
1
AICD Board
4
National Division Reports
• Education highlights
• Finance highlights
• Policy and Advocacy highlights
• States and Marketing highlights
• Publications highlights
5
5
5
6
7
AICD Committees
7
State Division Reports
• New South Wales
• Victoria
• Queensland
• Australian Capital Territory
• South Australia and Northern Territory
• Western Australia
• Tasmania
8
8
9
9
10
10
11
Corporate Governance
12
Financial Report
• Independent Audit Report
• Directors’ Report
• Statement of Financial Position
• Statement of Financial Performance
• Statement of Cash Flows
• Notes to the Financial Statements
• Directors’ Declaration
14
15
17
17
18
18
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CHAIRMAN’S AND CHIEF EXECUTIVE OFFICER’S REPORT
In 2003 / 2004 the roles and responsibilities of directors in
Australia came under unprecedented scrutiny. Rules and regulations
affecting boards became more complex and demanding. Some of
the publicity on director matters was unfavourable.
AICD recognised that it needed to have a greater effect on the
debate in order to represent the interests of its members more
effectively. To this end, a significant review was undertaken,
resulting in a revision of AICD’s Constitution and a restructuring of
the policy and communications areas. This occurred in tandem
with significant investment in long-term infrastructure and IT to
streamline member services and to enable AICD to meet the
increasing challenges.
This report describes the main milestones of the year.
Membership and member services
AICD experienced a record year of membership growth.
Membership increased by 6.8 per cent, to just under 19,000. This
growth can be attributed to the relevance of events held by our
state divisions across the country and that of the refreshed
education product line, targeting directors at each stage of their
board careers.
The Directors’ Register, launched as a new service in July 2003,
allows members who wish to be appointed to boards to place their
details in a database that can be searched (under strict conditions).
It exceeded its first targets, with 1,035 AICD members registered by
30 June 2004 and more than 200 searches performed for director
positions. AICD expects services like this to be increasingly
important in the value proposition it offers to members over the
next few years.
AICD’s website (www.companydirectors.com.au) had record traffic,
averaging 480 users per day. To support growth in on-line
distribution of information and services to members, the website
structure and content management system has undergone an
intensive review. A program to build a new website has been
approved for the next financial year.
The network of directors that AICD provides is often cited by
members as a key benefit of membership. Record attendance at our
many events this year proved that this remains the case. A total of
447 events were held across the country, attended by 24,374 people.
These events varied greatly, reflecting the differing needs and
priorities of members in different parts of Australia. Overall, the mix
of events shifted, with increased emphasis on education rather than
networking alone. The average participation of our members in
AICD activities increased over the year by more than ten per cent.
A new “client management model” was implemented across AICD
in early 2004, with training of all member services staff and division
managers.
Education
AICD’s education team rewrote and repackaged the flagship
Company Directors Course for the 2004 calendar year. A record
enrolment of 1,884 participants was achieved, up seven per cent on
last year. Improvement in the quality of the Company Directors
Course was reflected in high levels of satisfaction recorded by
participants.
A new course was launched in July 2003 for people who have
already done the Company Directors Course and have significant
board experience. Called The Advanced Program - from Survival to
Mastery in the Boardroom, it achieved good initial satisfaction ratings
and will become a permanent part of AICD’s education offering.
In addition, 11 short courses were launched under the Directors
Essentials series. These are designed to be offered on a modular basis
and can be adapted, for example, to form tailored education
programs inside companies.
Conference
AICD’s Company Directors Conference in Port Douglas was once
again very successful. More than 550 participants listened to the
views of leading speakers and participated in workshops. Topics
ranged from those designed to develop independence of mind
among directors to practical advice on directorship and corporate
governance that could be taken away and applied directly by
participants in their boards.
Policy and Advocacy
During the 2003 / 2004 financial year, AICD renewed the focus of
its work on the key needs of directors in a period of change in
Australia. Corporate governance standards have attracted a great
deal of attention. Long-awaited legislative changes, partly in
1
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CHAIRMAN AND CHIEF EXECUTIVE OFFICER’S REPORT (CONTINUED)
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response to corporate disasters such as HIH, were drafted and
introduced as the financial year drew to a close.
A review was undertaken during the year of AICD’s policy
development, advocacy and public communication activities. The
aim was to increase the effect AICD has on areas most relevant to
directors with its limited resources. As a result, the advisory
committees were restructured, a practice of “triage” was adopted to
sharpen focus on the most critical issues and AICD’s
communications function was strengthened. A new Corporate
Governance Committee was established to work alongside the Law
Committee and the re-named Reporting Committee. These three
committees absorbed parts of the work of the former Economics
and Taxation and Sustainability Committees.
AICD wishes to acknowledge the work of the practising directors
and experts who form its committees and to thank them for the
very significant contributions they make.
The highest priority policy project undertaken this year was the
campaign to affect the drafting of the CLERP 91 legislation. This
was a complex and controversial Bill containing many amendments
to the corporations law and was the Government’s main response
to the HIH Royal Commission. AICD formed a special CLERP 9
Task Force, which assisted it to lobby on specific points that had
most effect on directors. One success (and AICD’s No. 1 objective)
was the inclusion of a “due diligence” defence against potential
liability of directors of companies accused of breaching the
continuous disclosure regime.
In the course of this project AICD held meetings with key
representatives from all major political parties and regulators to
ensure that the views of directors were understood, considered, and
were reflected in the drafting of the Bill. The next year will see a
key role for the AICD in assisting directors in implementing the
CLERP 9 Act, which was passed on 30 June 2004.
Communications
AICD’s corporate communications function was restructured and a
proactive communications strategy was developed for
implementation in the 2004/2005 financial year.
Late in 2003, AICD launched The Boardroom Report, an electronic
newsletter sponsored by KPMG. It was well received and now goes
to all AICD members every fortnight. The Boardroom Report covers
hot topics for directors and has links to more detailed reports or
articles.
AICD Publications Services continued to add to information
available to members with a new-look catalogue. Five new texts
were published offering guidance to directors on specific topics,
from sustainability to privacy legislation.
AICD staff
As a part of the streamlining of management for the benefit of both
members and staff, AICD put several new employee support
programs into place. An employee induction program and a
three-tier staff development program were introduced. Our new
online staff system, “TESS” (The Employee Support System), was
completed and rolled out across all offices. A staff satisfaction
survey was conducted with the findings recorded and subsequent
recommendations implemented throughout the year. A review of
the reward and recognition programs was also conducted with
anomalies and inequalities in commission structures for staff
highlighted and dealt with in June 2004.
We would like to acknowledge the contributions of AICD’s staff of
about 80 across Australia, whose work delivered all of the results
described here.
IT infrastructure
The past year has also been one of considerable investment in
AICD’s systems and infrastructure, for both members and staff. A
long-term IT roadmap for AICD was signed off in March 2004 to
ensure that the IT platforms for all AICD administrative,
membership, sales and web systems are updated. This investment
will provide for greater efficiency and improved services for members
in the areas of sales, communications and database management.
The increasing importance of the web as a channel was
demonstrated by revenue of $785,000 being earned through
web-based sales.
Finance
Growth in membership, event participation and attendance at
education courses is reflected in the year’s robust financial result.
AICD revenue for the year was $19.97 million, a growth of 6.7 per
cent, with a bottom-line surplus of $471,065.
D P Mercer FAICD
Chairman
Ralph Evans FAICD
Chief Executive Officer
1
Corporate Law Economic Reform Program No.9
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AICD BOARD
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Mr Don Mercer FAICD, Chairman
Chairman, Australia Pacific
Airports Ltd; Orica Ltd;
State Orchestra of Victoria.
Don has been a practising
director for the past 21 years.
Prior to full-time professional
directorship, he spent 19
years in the petroleum
industry and 13 years in the
banking sector, including five years as chief executive
officer of ANZ Bank.
Dr Helen Nugent AO FAICD, National Director
Chairman, Swiss Re
(Australia); Funds SA;
Director, Macquarie Bank;
Origin Energy; Carter Holt
Harvey; Unitab.
Helen is a full time company
director. Prior to 1999, she
was Director of Strategy at
Westpac Banking
Corporation and a member of the Bank’s Executive
Team. A former Partner at McKinsey and Company,
and Professor in Management and Director of the
MBA program at the Australian Graduate School of
Management, Helen is actively involved in the arts.
Mr Gerald Loughran FAICD, President,
Tasmania Division
Chairman, Crisp
Bros/Hayward Pty Ltd;
Peppermint Bay Pty Ltd;
Tasmania Community Fund;
Director, Aurora Energy Pty
Ltd; Webster Ltd; Loughrans
Investments Pty Ltd.
Gerald has been a practising
director for more than 21 years. Prior to full-time
professional directorship, Gerald was responsible for
building the business of one of Tasmania’s leading
retailers.
Mr Terence Budge FAICD, President, Western
Australia Division
Director, Leadership WA;
Visiting Professor and
Senator of Murdoch
University; Member, Federal
Government’s Financial
Sector Advisory Council.
Terry Budge has had over 30
years’ experience in the
Australian banking industry. Most recently he was
Managing Director of BankWest from December
1997 to May 2004. He previously worked at National
Australia Bank for 25 years in a number of senior
executive roles.
Mr Andrew Guy FAICD, National Director
Consultant, Allens Arthur
Robinson; Director, AVIVA
Australia Holdings Ltd;
Djerriwarrh Investments Ltd;
Paperlinx Ltd.
Mr John Massey FAICD, National Director
Chairman, AV Syntec Group
Ltd; Ventracor Ltd; Cardno
Limited; Director, Dairy
Australia Ltd; KR
Castlemaine Foods Group.
Andrew has been a practising
director for 21 years. A
former managing partner of
Arthur Robinson and
Hedderwicks, Andrew has extensive legal experience
in commercial and securities law.
John became a full time
professional director in 1997
after more than 20 years as a
chief executive with
extensive and broadly-based commercial experience
spanning a range of industries. He has been a
practising director since 1973.
Mr James Morris FAICD, President, Australian
Capital Territory Division
Director, Mirinjani;
Executive Director, National
Heart Foundation (ACT).
Dr Jane Wilson FAICD, President, Queensland
Division
Chairman, Horticulture
Australia Ltd; IMBcom Ltd;
Director, UQ Holdings Ltd;
Protagonist Ltd; Winston
Churchill Memorial Trust;
National Archives of
Australia Advisory Board.
James has been the Executive
Director for the National
Heart Foundation (ACT
Division) for over 5 years and
was formerly Managing
Director of a travel company. He has been a director
of aged care facility, Mirinjani, for 3 years and is
employed in the Defence Materiel Organisation as
Director, Customer Relations Management.
Mr Glenn Barnes FAICD, President Victoria
Division
Chairman, Baycorp
Advantage Ltd; Director,
Lion Nathan Ltd; Repco
Corporation Ltd; Reach
Foundation; Councillor,
Monash University;
Stronghold Pty Ltd; Barnes
Investments Pty Ltd.
Glenn has been a practising director for 13 years.
Prior to becoming a full time director in 2002, Glenn
spent twelve years at National Australia Bank as a
member of its senior executive team with various
roles in Australia and the Europe. Prior to joining
the National, Glenn spent 13 years at Mars Inc.
Mr Charles Bagot MAICD, President, South
Australia and Northern
Territory Division
Partner, Piper Alderman;
Director, Australian
Submarine Corporation Pty
Ltd; University of Adelaide;
Duck Island Pty Ltd;
Mordinyabe Pty Ltd;
Councillor, South
Australian Art Gallery
Foundation; St Marks College.
Charles has been a practising director for 11 years.
Currently a partner in corporate law, Charles has
had extensive legal experience in a number of
industries including mining, oil and gas, electricity,
retail, defence and food manufacturing.
Jane has been a practising
director for 16 years. Prior to full time professional
directorship, Jane was a doctor of medicine who then
entered the business areas of commercialising medical
research and biotechnology.
Mr M. James Green FAICD, President, New
South Wales Division
Chairman, AICD Audit
Committee; Executive
Director, Beerworth &
Partners Limited; Hayward
Pool Products (Australia) Pty
Ltd; Century Australia
Investments Ltd.
James has been a practising
director since 1989. He has more than 21 years of
business experience in the areas of commercial and
corporate law, commerce, and investment banking.
Mr Ralph Evans FAICD, CEO
Chairman A&B Venture
Fund Co Pty Ltd; Allen &
Buckeridge Fund III Advisory
Board; Deputy Chairman,
ICM Agribusiness ; Director,
Osteoporosis Australia; The
Marvin Bower Foundations.
Ralph has over 15 years’
experience as a professional
director. Formerly Managing Director of Austrade
from 1991-1996, Ralph has over 20 years’ experience
in management consultancy with McKinsey, Boston
Consulting Group and on a private basis, with a
focus on technically-based businesses such as mining
and manufacturing.
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NATIONAL DIVISION REPORTS
EDUCATION highlights
Margins
Educational participation
Overall margin from the provision of services, including sale of
books, remained fair at 42.3 per cent compared to the previous
year’s 46.8 per cent. This, together with increased costs for
initiatives in IT and increased structural support in order to better
service members, resulted in the surplus for the year of $471,065
compared to $1,385,341 for the previous year.
The backdrop of regulatory change and corporate governance
debate contributed to a growth in educational participation. There
was an overall increase of 22 per cent in continuing professional
development hours to 232,192 for the year, while participation in
the Company Directors Course grew by seven per cent to 1884
participants.
Refreshment of the product line
The Advanced Program, an experiential program aimed at the
experienced director who wishes to refine their boardroom skills,
was launched in July 2003. The Company Directors Course was
reviewed, rewritten and repackaged for the 2004 calendar year, and
15 new educational products were brought on line. These included
11 short courses under the Directors Essentials series, the 2004
Compliance Update, The ASX Principles and Your Board, High
Performance Boards and the Private Company Stream (the third
stream of the Advanced Program).
Satisfaction rates
Portfolio investments
Portfolio investments, which consist of a mix of fixed interest
securities, units in listed property trusts and managed equity funds,
posted an overall annualised return of 9.57 per cent. The total
amount invested increased by 11.19 per cent from $8,462,797 to
$9,410,379 at 30 June 2004.
Members’ funds
Members’ funds reached $6,936,485 as at 30 June 2004 placing
AICD in a stronger position to weather any severe downturn in the
Australian or global economy.
Accounting and reporting IT infrastructure
At the completion of each program, participants are asked to score
their satisfaction with the program they have attended. Overall the
Company Directors Course scored an average 90 per cent in 2003 /
2004. The Company Directors Course Residential Program in March
2004 scored 100 per cent, which is almost unknown in the industry.
The AICD accounting and reporting function was fully centralised
and revamped during the year with new accounting software
installed and processes surrounding it re-engineered. Part of the
project entailed the implementation of Bpay services, facilitating
the membership renewal process and providing members with an
added convenience.
All educational programs offered throughout the year exceeded the
75 per cent satisfaction score set as the benchmark.
Clark Chui FAICD
National Manager, Finance
Growth in revenue
Revenue from education and professional development reached
$8,958,321, achieving the ten per cent target for the year, a great
achievement.
POLICY AND ADVOCACY highlights
Partnerships
Restructure
As part of an ongoing strategy to seek agreements with appropriate
partners, AICD reached an agreement with CPA Australia to
provide director training to CPA members who wish to be included
on the CPA Directors Register.
AICD’s board has concluded a review of AICD policy committees.
The review arose out of the board’s desire to make AICD’s policy
activities more focussed on priority issues that are urgent and
important to directors, and on which AICD has a competitive
advantage in influencing change.
Pamela Murray-Jones GAICD
General Manager, National Education
y
e
g
Policy
The board’s view was that this focus would be best reflected by
maintaining the Reporting and Law Committees and establishing a
new Corporate Governance Committee.
FINANCE highlights
Submissions
Revenues
AICD continued developing policy and making submissions on
numerous issues relevant to members throughout the year.
AICD’s record membership growth and expanded educational
offering contributed to total revenue for the year hitting a high of
$19,971,233, to record an overall increase of 6.7 per cent over last
year’s $18,721,516. Revenue from education and professional
development, including networking events was $11,050,941, an
increase of 4.8 per cent over the previous year and revenue from
membership was $6,492,178, an increase of 13.9 per cent.
One example was the extensive advocacy and lobbying campaign
on the CLERP 9 legislation, which involved members of the AICD
board, Law and Accounting and Financial Advisory Committees
and members of a specially formed CLERP 9 Task Force. As part of
the lobbying efforts AICD made several major submissions and
appeared before the Parliamentary Joint Committee on
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NATIONAL DIVISION REPORTS (CONTINUED)
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Corporations and Securities. In addition, members of the AICD
board and the CLERP 9 Task Force held meetings with all major
political parties and Treasury on various aspects of the draft Bill.
A number of AICD’s members’ concerns were covered in the final
form of the Act, including the incorporation of a due diligence
defence into the infringement notice regime for breaches of the
continuous disclosure regime.
The Policy and Advocacy Department extends its sincere thanks to
all members of committees and task forces who assisted in drafting
material, answering queries and appearing before committees, often
under pressure and at short notice.
Advocacy
The AICD continued its extensive lobbying program on policy
issues with all relevant stakeholders including government,
bureaucracy, other peak organisations and the media.
Library
There has been a significant increase in both the size and use of
AICD’s library. The library catalogue, which is searchable on
AICD’s website, now contains more than 3600 records. Member
enquiries have increased by at least 500 requests over the past
twelve months.
Publication input
The Policy and Advocacy Department continues to provide the
content for many AICD publications including Boardrooms that
Work; Privacy and Boards of Directors: What You Don’t Know Can
Hurt You; A Guide to Sustainability in your Company; Draft
Guidelines on Proxies.
Rob Elliott MAICD
National Manager, Policy and Advocacy,
Legal Counsel and Joint Company Secretary
STATES AND MARKETING highlights
Events
AICD’s Company Directors Conference 2003 was the winner of the
Meetings Industry Association of Australia (MIAA) Award for
Meeting of the Year. With more than 500 Delegates attending the
conference the win was confirmation that the event continues to
be a high point for AICD members.
Leading on from the 2003 win, AICD’s Company Directors
Conference 2004 program held in Port Douglas in April 2004 was
the most successful to date, with the majority of delegates rating
their overall satisfaction as excellent.
A successful innovation for the year was the inaugural Harvard
Seminar with Professor Christopher Bartlett, of Harvard Graduate
School of Business Administration. The participation rate greatly
exceeded expectations and net revenue was $56,500, resulting in a
positive variance of $35,200.
A further success was the inaugural Boardroom Forum for directors
from the top 100 companies, held in Melbourne. Facilitated by
Colin Carter OAM, the forum addressed critical corporate
governance issues.
Marketing
Following the Company Directors Conference 2004, all members
were provided with a streamed webcast of Session 1 speaker Ray
Kurzweil. Online radio programs with keynote speakers began in
June and will conclude in September 2004. These services extend
the value of the conference to all members over several months.
Brand advertising continued throughout the financial year with
new creative designs being implemented in January. Advertising has
contributed to AICD’s membership growth in the last financial
year. Ad hoc advertising was placed in corporate governance
features in the Australian Financial Review and other Australian
newspapers. Advertising tracking mechanisms will be implemented
this year to track response rates allowing more effective placing of
future advertising.
This year, all education marketing material was redeveloped with
each program having its own sub-brand. This sub-branding system
will continue in the next financial year with material incorporating
a new look and feel and being re-written to enhance course
benefits.
The Directors Register was launched with the uploading of the
website on Monday 11 August 2003, and to date, we have 1059
profiles. AICD has received 251 search requests and has provided
results on 226 of these, sending a total of approximately 1023
profiles. Anecdotally, we know that members have been
approached and placed (two members were featured in the
Company Director journal—June 2004). A survey has been sent to
all those who used the search function and results are currently
being compiled.
Sales and business development
An audit was conducted of AICD membership teams
Australia-wide. Following this project a five-point plan was
implemented, focusing on vision and culture, management of the
sales process, the value proposition, and sales people.
A member retention task force was also formed to improve service
delivery to members.
State divisions
All state divisions performed extremely well this year, resulting in
records in membership growth, attendance at events and Company
Directors Course enrolments. Staff in all divisions are to be
congratulated on their efforts in achieving these record results.
During the year there were changes in management as follows:
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AICD COMMITTEES
WA
Sue Pepperell departed
Anthony Smith commenced June 2004
QLD
Louise Barnett departed
Richard Moore commenced June 2004
NSW
Julie Curran departed
Mark Carmichael commenced Sept 2003
SA
Angela Downs on maternity leave
Deb McBryde acting
Pauline Green FAICD
General Manager, States and Marketing
PUBLICATIONS
New texts and catalogue
AICD’s Publications Services continued to add to the
education and information available to members with the
production of five new texts offering guidance to directors on
specific topics such as sustainability and privacy, through to
more general issues such as board implementation,
performance management systems and achieving a
“boardroom that works”.
A new publications catalogue, assisting members with the
most up-to-date thinking on directorship and broader
business, political and cultural issues was also made available
in September 2003.
Boardroom Report
The launch of the Boardroom Report, AICD’s electronic
newsletter, sponsored by KPMG was a great success. Covering
the hot topics for directors each fortnight with links through
to more detailed reports or articles, the Boardroom Report has
been embraced by members as an easy-to-access update with
25 per cent of recipients reading the newsletter.
Company Director journal
AICD’s flagship publication, Company Director journal,
continued to be one of the benefits that our members rate
most highly. Following the topics, people, and issues that are
most critical to directors, it is one of the most important
means AICD has of ensuring that its membership base is kept
informed. Members and participants of AICD’s policy
committees are frequent contributors, offering a variety of
views, in addition to a dedicated editorial team.
Andrew Madry MAICD
Chief Operating Officer and joint Company Secretary
Reporting Committee
Chairman
Mr Michael Coleman FAICD
Deputy Chairman
Mr Mark Johnson FAICD
Miss Elizabeth Alexander AM FAICD
Mr John Allpass FAICD
Mr James Beecher FAICD
Mr Peter Cadwallader FAICD
Mr Gavin Campbell FAICD
Mr Geoff De Lacy FAICD
Mr Lloyd Draney FAICD
Mr Stuart Grant FAICD
Ms Fiona Harris FAICD
Mr Stephen Harrison AO FAICD
Mr Peter Housden FAICD
Mr John Lamble AO FAICD*
Mr Steven McClintock*
Mr Alex Malley
Mr John Massey FAICD
Ms Marian Micalizzi MAICD
Ms Catherine Mulcare
Ms Susan Oldmeadow-Hall Aff AICD
Mr Russell Philp MAICD
Ms Eva Plachta MAICD
Mr Tom Pockett
Mr Bruce Porter
Mr Keith Reilly
Mr Antony Robb FAICD
Mr David Smith MAICD
Mr James Service AM FAICD
Ms Kerstin Wijeyewardene**
Law Committee
Chairman
Prof Bob Baxt AO FAICD
Mr Charles Bagot MAICD
Mr Bill Beerworth FAICD
Mr Tom Bostock FAICD
Mr Bruce Cowley MAICD
Mr Quentin Digby MAICD
Prof John Farrar
Mr Ron Forster MAICD
Mr Andrew Guy FAICD
Mr Craig Henderson
Mr Tony Hulett
Mr Stephen Ipp
Mr Bill Koeck MAICD
Mr Michael Lishman MAICD
Mr Andrew Lumsden MAICD
Mr Peter Mansell FAICD*
Mr Ben McLaughlin MAICD
Mr Alan Morrison FAICD
Mr Jon North
Mr John O’Grady FAICD
Prof Ian Ramsay
Mr Michael Rawstron**
Mr Andrew Ray
Ms Jillian Segal FAICD
Mr Peter Shaw MAICD
Mr John Story FAICD
Ms Carolyn Stroud GAICD
Mr Paul Swifte FAICD*
Mr Brian Wilson FAICD
Mr Colin Wise FAICD*
Sustainability Committee
01/07/03 – 31/01/04
Chairman
Dr Keith Suter FAICD
Ms Sybella Blencowe MAICD
Ms Megan Cornelius AM FAICD
Mr Graeme Day MAICD
Mr Peter Emery FAICD
Mr Paul Flanagan GAICD
Mr Garry Fowler FAICD
Mr John Kenny MAICD
Mr John Lister MAICD
Mr Malcolm Macpherson FAICD
Mr Duncan McGregor MAICD
Ms Deborah Sutherland MAICD
Dr Alison Turner FAICD
Mr Hugh Wyndham Aff AICD
Ms Jackie Venning MAICD
Taxation and Economics
Committee 01/07/03 – 31/01/04
Chairman
Mr Simon Marks-Isaacs FAICD
Miss Elizabeth Alexander AM FAICD
Mr Hugh Anderson FAICD
Mr Philip Anderson
Mr Bill Beerworth FAICD
Mr Richard Bialkowski FAICD
Ms Cynthia Coleman
Mr Ross Cottrill FAICD
Mr Ashley Harris FAICD
Mr Stephen Hopley*
Mr Martin Kriewaldt FAICD
Mr Geoff Lehmann
Ms Ivy Loh Aff AICD
Ms Glenda Nixon FAICD
Mr John Randall
Ms Susan Rix GAICD
Mr John Wallace
Remuneration Task Force
Chairman
Mr Charles Bagot FAICD
Mr John H C Colvin FAICD
Mr David Crawford FAICD
Mr John Egan FAICD
Mr Peter Griffin FAICD
Mr Malcolm Irving FAICD
Mr Charles Macek FAICD
Dr Ken Moss FAICD
Mr Russell Philp MAICD
Mr Chris Thomas FAICD
Corporate Governance
Committee
Chairman
Mr John Ralph AC FAICD
Mr Anthony Berg AM FAICD
Mr Graham Bradley FAICD
Mr Colin Carter OAM FAICD
Mr David Clarke AO FAICD
Mrs Linda Nicholls FAICD
Dr Helen Nugent AO FAICD
Mr John Story FAICD
*
**
denotes retired during the year.
denotes ex officio members of
the committee.
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STATE DIVISION REPORTS
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New South Wales highlights
This growth took our total NSW membership to 6,162.
Strategic direction
We would like to thank all our members, sponsors, speakers and
participants as well as the wider business community for their
continued loyal support and encouragement.
2003 / 2004 proved a very successful year for NSW Division.
Building on the self assessment program undertaken in 2003 the
NSW Division Council continued its active involvement in
determining the overall direction and focus of the NSW Division.
During the year two new council members were welcomed. They
were Elizabeth Bryan FAICD and Rick Lee FAICD . At the same
time long serving councillors, Hugh Anderson FAICD and Anne
Riches FAICD retired. Thanks to both Mr Anderson and Ms
Riches for their strong commitment during their time on council.
Continuing education
Education remained a core activity during the year with 15
Company Directors Course offerings attracting 315 participants.
While the “tutorial” format of the CDC remains popular and was
offered in the City, North Sydney, North Ryde and Newcastle, the
“non residential” intensive format also grew in popularity and will
be expanded during the next year.
At the same time members’ commitment to the wide ranging
vocational education programs offered by the NSW Division
remained strong with a record 109 sessions being staged.
Key events included:
• 11 luncheons featuring a range of prominent speakers including
leading Australian directors David Gonski, Diane Grady, Ken
Moss and Charles Goode, along with Jeff Lucy of ASIC and
Graeme Samuel of ACCC. Our speakers provided a range of
opportunities for members to update their director knowledge
and expertise as well as broadening their contact and
networking base.
• 22 Directors’ Briefings on a very broad range of relevant topics
including, How to Get on a Company Board, Changing Role of the
Non Executive Director and CLERP 9 Changes were well received.
The briefing program also saw the continuation of the QANTAS
SME Series and the establishment of the KPMG Forensic
Accounting Series, all of which were well attended.
• A number of highly successful member networking and social
occasions were held. These included the December Long Lunch,
the Heritage Fine Wine Tasting and the Company Director
Graduation evenings. All of these were also very well attended.
In total, over 6,000 registrations were received for these various
activities.
A new educational offering entitled Directors Essentials was
launched. This is aimed at providing organisations with a
convenient and effective way of delivering continuous “in house”
director education. In total, 12 sessions were conducted for both
private and publicly listed companies, associations, government
boards and not-for-profit organisations.
Membership
During the year NSW enjoyed a 6 per cent increase in membership,
a clear sign that directors appreciate and value the importance of
being part of AICD and being able to utilise the services it offers.
James Green FAICD, President
Mark Carmichael MAICD, New South Wales Division Manager
New South Wales Division Council
Mr James Green FAICD, President
Mr Malcolm Irving AM FAICD, Vice President
Mr J Gilles Broinowski FAICD
Ms Elizabeth Bryan FAICD
Ms Megan Cornelius AM FAICD
Mr Geoff De Lacy FAICD
Mr Rick Lee FAICD
Dr Paul Scully-Power AM DSM NSM FAICD
Mr Brian Wilson FAICD
Ms Anne Riches FAICD (retired)
Mr Hugh Anderson FAICD (retired)
Victoria highlights
New membership
Victoria introduced 754 new members during the year—the highest
intake recorded for the Victorian Division and an indication of the
relevance of the AICD and its programs in this age of increased
corporate governance awareness. Retention of members was also at
a record high, resulting in an overall membership growth of 10.2
per cent for the year and with membership now standing at 4,651.
Company Directors Course
The Company Directors Course continues to be the cornerstone of
our education offering, with 313 people electing to undertake the
program in its various forms. The introduction of the
non-residential format met with the approval of participants, with
the two scheduled programs (November and April) being
oversubscribed. Three additional programs in this format
(September, November and April) are scheduled during 2004-2005.
Advanced director education
Victorian members embraced the Advanced Program introduced
during the year with 15 members, either Fellows of AICD or
graduates of the Company Directors Course, accepting the invitation
to participate in this challenging program, which tackles the issue
of boardroom dynamics.
Council leadership
Andrew Guy (former Victorian Division President) and Glenn
Barnes (Victorian Division President) joined AICD’s board as
directors. We welcomed Carol Schwartz and Ian Wightwick as state
councillors, farewelling Graham Kraehe and Patricia Cross, to
whom we offer our thanks for their contribution to the state
council during their term in office.
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Inaugural AICD Governance Forum
Melbourne played host to AICD’s Governance Forum in February,
convened by Chairman of AICD’s board, Don Mercer, and
moderated by Colin Carter. The forum was attended by directors of
Australia’s major companies and was designed to affirm and test the
issues confronting directors in the execution of their duties. From
the reports of all who attended, the forum was an overwhelming
success.
The year brought changes to the division, most notably the
departure of Louise Barnett as manager. The Queensland Division
thanks Louise for her significant efforts in building a solid
foundation from which to launch new initiatives and programs, and
we wish Louise the very best for her future career.
Through a year of challenge and change, all the achievements are a
direct result of the significant efforts of the division staff. Their
efforts are recognised and very much appreciated.
Glenn Barnes FAICD, President
Jane Wilson FAICD, President
Tony Harford MAICD, Victoria Division Manager
Richard Moore, Queensland Division Manager
Victoria Division Council
Queensland Division Council
Mr Glenn Barnes FAICD, President
Mr Laurie Cox AO FAICD
Mrs Marina Darling MAICD
Commissioner Douglas Davis MAICD
Mr Charles Macek FAICD
Ms Carol Schwartz MAICD
Mr Ian Wightwick MAICD
Ms Patricia Cross FAICD (retired)
Mr Graham Kraehe FAICD (retired)
Mr Andrew Guy FAICD
(resigned and re-appointed as National Director)
Dr Jane Wilson FAICD, President
Mr John Story FAICD, Vice President
Mr Ian Fraser MAICD, Treasurer
Hon Keith De Lacy FAICD
Mr Rob Hines MAICD
Mr Martin Kriewaldt FAICD
Mr John Lister MAICD
Mr John Lyons FAICD
Ms Marian Micalizzi MAICD
Ms Susan Rix GAICD
Mr John Massey (resigned and reappointed National Director)
Queensland highlights
Australian Capital Territory highlights
Membership
Education attendance
Membership of the Queensland Division increased 9 per cent
compared to a budget forecast of 5 per cent.
ACT Division held 12 Company Directors Courses in the 12-month
period of which 6 were held in-house for various public sector
agencies. In total more than 200 people attended the Company
Directors Course.
Innovative events
The division conducted its inaugural Christmas Long Lunch in
December. This was a highly successful networking event with 417
attendees and the division plans to make this an annual occurrence.
The Corporate Governance Forum in March was also a success,
drawing directors from all over the state to hear from a quality list
of presenters.
Education initiatives
In servicing members in regional centres the division conducted 22
regional presentations including three Company Directors Courses,
one workshop, 18 networking events including briefings, lunches,
and Queensland Business Stories presentations.
The division also piloted a new presentation titled High Performance
Boards, which scored a satisfaction rating of 4.7 out of 5, a great
result for a new program. As a result of this success the program will
now be rolled out nationally.
Special thanks
The Queensland Division thanks Dr Jane Wilson for her tireless
efforts for the AICD during her term in office and for her vision and
support. It is also important to recognise those Queensland members
who volunteer their effort in support of the operations of AICD’s
Queensland Division in the delivery of services to all members. It is
through this contribution that AICD truly represents members.
The Rural Women’s Award Winners attended the Company
Directors Course in Canberra, with participants from as far afield as
the Kimberley region in W.A., Cape York Peninsula in far north
Queensland, rural Tasmania, and the Limestone Coast of South
Australia. The Prime Minister, Mr John Howard, visited attendees
during the course.
The launch of the Directors Essentials modules has also enabled
ACT Division to offer a much broader range of education programs
to a much wider market sector.
Membership growth
The ACT membership growth rate of 12 per cent was the highest
in Australia, with the division now having more than 700
members, many from the public and not-for-profit sectors.
Free information sessions
As part of meeting the needs of our diverse membership, the free
information sessions held for the not-for-profit and small business
sectors attracted large audiences, with more than 120 attending the
not-for-profit sector session.
9
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STATE DIVISION REPORTS (CONTINUED)
10
James Morris FAICD, President
dynamic and diverse director education program. We are looking to
explore niche markets such as SMEs, not-for-profit entities and
aspiring directors. We are planning to proactively market in-house
training to accommodate boards who want to provide director
education in a confidential environment, and we continue to
explore ways of enhancing value of membership.
Phil Butler, Australian Capital Territory Division Manager
Charles Bagot MAICD, President
Australian Capital Territory Division Council
Deb McBryde, Acting South Australia and Northern Territory Division
Manager
Twilight networking
The popular twilight networking functions continued to attract
large numbers of members, with attendance averaging close to 150
for these popular quarterly functions.
Mr James Morris FAICD, President
Ms Carolyn Stroud, GAICD, Vice President
Mr Richard Bialkowski, FAICD
Mr Dale Budd, FAICD
Mr Ross Cottrill, FAICD
Ms Noela L’Estrange, FAICD
Mr Alan Galbraith, FAICD
Dr Dick Henley, FAICD
Mr Alan Morrison, FAICD
Ms June Grainger, FAICD (retired April 04)
South Australia and Northern Territory highlights
Membership
Membership has now eclipsed the 1500 level to record a total
membership of 1643 as at June 2004. Membership growth has been
better than expected with the branch recording a net 11 per cent
increase for the financial year.
Angela Downs, AAICD, South Australia and Northern Territory
Division Manager (on maternity leave)
South Australia and Northern Territory Division
Council
Mr Charles Bagot MAICD, President
Ms Virginia Hickey FAICD, Vice President
Mr Terry Evans MAICD
Mr Chris Fennell FAICD
Ms Janet Grieve FAICD
Mr Adam Keats FAICD
Mr Keith Smith FAICD
Mr Richard Thomson FAICD (retired)
Mr Bruce Trebilcock FAICD
Mr Alan Hewitt FAICD
Western Australia highlights
Innovative education programming
Gold medal award
The inaugural SA Corporate Governance Forum was held in May
and was well attended with a great line-up of national and
international speakers. The success of the event has ensured that it
will now be scheduled annually.
The tenth winner of the WA Gold Medal Award, Mr David Young,
was presented with his award at the annual Winter Dinner, attended
by 330 members and guests and addressed by Professor Fiona
Stanley AC, Australian of the Year and Director of the Telethon
Institute for Child Health Research.
In other additions to our educational offering, the session Board
Women was scheduled in both SA and the NT. Decision-Making
Across the Board, a new one day program was scheduled for the first
time in September and the Aspiring Directors Series was a great
success.
Regional director education
The first Company Directors Course for rural leaders was held in
Clare and was fully booked, with 28 participants. Running over four
months, the program received great feedback, with the division now
exploring an expansion of the regional program into other regions.
Northern Territory
With an active and supportive Northern Territory Committee,
Darwin was the first location in Australia to offer the Directors
Essentials program. Building on this start, NT is now expanding its
education program to include the Company Directors Course,
Directors Essentials and one day programs such as The Strategic Board
and Board Women. The NT Division will also continue to market
in-house workshops.
Looking forward
The division will continue to focus on the development of a
Outback forum
The seventh Outback Forum provided 92 members and guests an
opportunity to visit the Argyle Diamonds open pit mine, the
world’s largest supplier of rough diamonds by volume and primary
source of rare pink diamonds, located near Kununurra in the East
Kimberley region. The trip by chartered aircraft incorporated a
scenic flight over the Bungle Bungles and Lake Argyle.
Innovative events
An inaugural interview-style luncheon attracted 530 members and
guests, our largest luncheon function to date, to watch Michael
Chaney (MD) and Trevor Eastwood (Chairman) being interviewed
by ABC TV business reporter Tom Baddeley on The Evolution of
Wesfarmers.
Industry on location
The Royal Australian Navy hosted our Industry on Location site tour
this year, with 90 members and guests given a conducted tour of
HMAS Stirling at Garden Island. The largest industrial worksite in
WA, HMAS Stirling provides operations and logistics support;
trials and research facilities; training; and personnel and
maintenance support for RAN ships, submarines and aircraft based
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Page 13
in WA. Guided tours included the Submarine Training & Systems
Centre, the Submarine Escape Training Facility, the Collins Class
submarine HMAS Waller, and amenities at Fleet Base West.
Rottnest forum
The annual Rottnest Forum attracted 270 members and guests,
transported to Rottnest Island by a flotilla of private boats, to hear
AFL CEO Mr Andrew Demetriou address The Business behind the
Game. Morning tea and lunch were held in a marquee at the
Rottnest Lodge, and the formal address was conducted at the
Rottnest Picture Hall.
Gold medal award
A key highlight was the Gold Medal Award, presented to Denis
Rogers AM by the Governor of Tasmania, Mr Richard Butler, at a
luncheon at the Hotel Grand Chancellor. The luncheon was a sell
out, which is tribute to the recipient as well as to the quality of the
event. Denis is a well-known Tasmanian, and is widely known and
respected throughout Australia for his past role as Chairman,
Cricket Australia, a position he held for many years during
Australia’s rise to domination of world cricket.
Terry Budge FAICD, President
We also express our thanks to the Governor and Mrs Butler for
attending the lunch. The continuing support of Government House
for this event is greatly appreciated.
Anthony Smith, Western Australia Division Manager
Social events
Western Australia Division Council
Mr Terry Budge FAICD, President
Ms Fiona Harris FAICD, Vice President
Ms Robyn Ahern MAICD
Mr Steven Cole FAICD
Mr David Eiszele FAICD
Mr Mike Horabin FAICD
Mr Tony Howarth FAICD
Mr Malcolm Macpherson FAICD
Mr Tim Moore MAICD
Mr Ian Constable FAICD (retired)
Tasmania highlights
Membership
Membership of the division continued to grow, increasing to 750.
Representing an annual increase of 5.5 per cent against a national
budgeted growth of 5 per cent, this was a great effort in a mature
and relatively small market.
Council leadership
The Tasmania Council met six times during the year plus the
AGM. All councillors contributed freely and willingly of their time
and input for which the division is grateful.
At the AGM the following councillors were welcomed:
Elected: Lyn Cox, FAICD ; Tony Harrison, MAICD
Re-elected: Gerald Loughran, FAICD
Retired: Ken Lawrie, FAICD; Clyde Eastaugh, MAICD.
The division is grateful to Mr Lawrie and Mr Eastaugh for the
contribution they made during their time on council.
Education
The division conducted 12 education programs during the year,
including three non-residential Company Directors Courses held at
the University of Tasmania, Hobart.
In addition, several member briefings on topics of interest were
held. The division also conducted a number of in-house specific
workshops for various organisations. In all, it was a positive year for
the division’s education activities.
In addition to the Gold Medal Lunch, the division again conducted
a series of lunches and evening social events in Hobart and
Launceston, which were well supported by members and guests.
Looking ahead
The division has again set an interesting program of educational
and social events designed to capture members’ interest. In addition
we have a budgeted membership increase that will see the division
grow even further during the year.
Gerald Loughran FAICD, President
Len Robertshaw MAICD, Tasmania Division Manager
Tasmania Division Council
Mr Gerald Loughran FAICD, President
Ms Eva Plachta MAICD, Vice President
Mr Lynley Cox FAICD
Mr Richard Ashley Harris FAICD
Mr Tony Harrison MAICD
Mr Scott Harvey FAICD
Mr Finian MacCana FAICD
Mr Graham Marshall FAICD
Mr Russell Paterson FAICD
Mr Paul Swifte FAICD
11
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CORPORATE GOVERNANCE STATEMENT
12
The governance of Australian Institute of Company Directors is
based on the AICD Constitution and Charters.
THE BOARD
The board is the governing body of AICD. Its powers are set out in
the AICD Constitution and the AICD Board Charter. The AICD
Constitution is regularly reviewed by the board. The adoption of
any proposed changes is subject to the approval of the membership
at an annual general meeting. The AICD Constitution and AICD
Board Charter are available on the AICD website
www.companydirectors.com.au
Composition of the board
The Board consists of twelve directors. There are four national
directors, one of whom is the chair, and seven division
representatives. The division representatives are nominated by each
division council and are normally division presidents. The division
representatives on the board appoint the chair and national
directors following each Annual General Meeting. In addition, the
chief executive officer was appointed managing director by
resolution of the board. The procedure for appointing directors can
be found in the AICD Constitution.
The revised board structure and the new AICD Constitution were
approved by members at the AGM on 14 November 2003.
Non-executive board remuneration and tenure
National directors and division representatives are members of
AICD and do not receive any remuneration for their services to
AICD. National directors may serve for two consecutive terms of
three years, or for a maximum of six years unless elected as chair,
when they may serve up to nine years in total.
No director of AICD, except for the CEO, has received or has
become entitled to receive a benefit from AICD during or since the
end of the financial year because of a contract with:
• the director, or
• a firm of which the director is a member, or
• an entity in which the director has a substantial financial
interest, or
• an entity that AICD controlled, or
• a company related to AICD when the contract was made or
when the director received or became entitled to receive a
benefit.
The CEO’s role is to lead the organisation. He or she develops a
business strategy in collaboration with the senior management team
and implements it once it is approved by the board. The CEO is
also responsible for the internal work culture of the organisation,
for the employment of staff and for financial management and
control. He or she is the primary spokesman for AICD and the lead
person in its key relationships with government and other
organisations.
The board determines the CEO’s performance goals and
remuneration on advice from the Human Resources and
Remuneration Committee. His or her remuneration consists of a
salary and an at-risk component. The amount of the latter is set by
the board on advice from the committee, which assesses the CEO’s
performance against the predetermined goals.
DIVISION COUNCILS
Division councils have from five to ten members elected by the
AICD members in their state or territory. Each council elects a
president, who becomes a division representative on the AICD
board. The rules for election and retirement of division council
members are set out in the AICD constitution and by-laws.
The division councils advise the board, AICD and the relevant
division on the conduct of AICD’s activities and give effect to
powers of the directors delegated to them. This role will normally
focus on:
• Developing the most effective contact with the director
community, the state or territory government and other
authorities with influence on directors’ affairs
• Communicating AICD policy positions and providing comment
and advice to the AICD board on policy issues
• Advising the division manager on management matters and on
the most effective events
• Performing the function of membership committee for
applications received in their state or territory, deciding on
admission of members to the various AICD membership grades
on the basis of criteria in the by-laws.
The division managers report through the General Manager, States
and Marketing, to the CEO. The Division Council Charter is
available on the AICD website www.companydirectors.com.au.
Role of the board
The board is responsible for the overall corporate governance of
AICD. This includes setting and periodically reviewing the
strategic direction, monitoring the achievements and financial
performance of the organisation, and deciding on key policy
positions for AICD to take on behalf of Australian directors. Seven
meetings of the board were held during the fiscal year.
The Board and the chief executive officer
The board is responsible for the appointment and employment
contract of the CEO.
COMMITTEES
To improve its efficiency, the board delegates roles to the Audit and
Compliance Committee and to the Human Resources and
Remuneration Committee. In addition, AICD is advised on policy
matters by three committees of senior practising directors and
technical experts—the Law Committee, the Reporting Committee
and the Corporate Governance Committee. The board reviews and
ratifies the terms of reference of these committees and their
membership annually. The charters for these committees1 are
available on the AICD website www.companydirectors.com.au.
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Audit and Compliance Committee
13
The Audit and Compliance Committee reviews and monitors the
compliance program and the financial systems operating within
AICD. It provides a link between the board, the external auditors,
and AICD management.
The committee ensures procedures are in place to safeguard
AICD’s assets and interests, including accounting and financial
reporting in compliance with applicable laws, regulations,
standards, and best practice guidelines. It also oversees the
continuing independence of the external auditor.
During the fiscal year, all new staff members received training in
AICD’s Compliance Program. The program covers risk oversight
and management policies on contract law, trade practices,
intellectual property, privacy, occupational health and safety and
anti-discrimination.
The Audit and Compliance Committee comprises three members
appointed by the board—see the Directors’ Report on page 15. It
is chaired by James Green.
Human Resources and Remuneration Committee
The Human Resources and Remuneration Committee monitors
human resources management, staff remuneration and benefits,
and staff policies and procedures. The committee has approved
remuneration policies on the payment of commissions and
bonuses.
The Human Resources and Remuneration Committee comprises
three members appointed by the board—see the Directors’ Report
on page 15. It is chaired by the board chairman.
Policy Committees
AICD’s policy committees consist of senior practising directors
and professional experts, who give their time free of charge. The
role of each policy committee is to develop policies, guidelines,
issues papers and submissions on key director-related issues. AICD
management provides their secretariat. Key policy initiatives are
reviewed and ratified by AICD’s board. In the last financial year,
the policy committee structure was reviewed and restructured into
three key committees to refocus on policy areas that were most
important to directors: Law, Reporting, and Corporate
Governance. There is a national director on each of the three
policy committees, who maintains liaison with the board.
ADHERENCE TO ETHICAL STANDARDS
All AICD members and the board agree to be bound by the
principles contained in AICD’s Code of Conduct. A copy of the
eleven points of the code is provided to all members. The
principles call for honesty, due care and diligence, and adherence
to the spirit, as well as the letter, of the law.
All AICD staff are bound by a code of conduct set out in the
AICD Values. This statement sets out 10 core values that outline
the staff’s commitment to members, team work, excellence, sound
financial management, recognition of achievement, and
enjoyment of their roles.
The Taxation and Economics Committee and the Sustainability
Committee were discontinued in February 2004. The Accounting
and Financial Advisory Committee was renamed the Reporting
Committee on 3 February 2004. The newly established Corporate
Governance Committee held its first meeting on 11 June 2004.
Committee meetings are generally held monthly. The chair of
each committee is appointed by the board annually. The
membership of the committees is listed on page 7.
The Corporate Governance Committee was established in June 2004. Its
charter is yet to be ratified, but will be consistent with those of the other two
policy committees.
1
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DIRECTORS’ REPORT
The Board of the Australian Institute of Company Directors (AICD) submit their report in respect of the financial year ended 30 June 2004.
Directors
The names of the directors in office during or since the end of the financial year are:
Ms Elizabeth Anne Alexander AM FAICD
(retired 14/11/2003)
Mr Donald Penn Mercer FAICD
(appointed 4/12/2000)
Mr Andrew Frank Guy FAICD
(appointed 16/10/2001)
Mr John Clarence Massey FAICD
(appointed 07/02/2003)
Dr Helen Marion Nugent AO FAICD
(appointed 19/12/2003)
Mr Charles Neville Bagot MAICD
(appointed 29/10/2001)
Mr Christopher Robert Fennell FAICD
(appointed 31/03/2004/retired 01/04/2004)
Mr Glenn Lawrence Lord Barnes FAICD
(appointed 04/02/2004)
Mr Terence Budge FAICD
(appointed 09/09/2003)
Mr Maxwell James Green FAICD
(appointed 25/02/2002)
Mr Gerald Norman Loughran FAICD
(appointed 01/10/2001)
Mr Peter John Mansell FAICD
(retired 08/09/2003)
Mr Wilfred Alan Morrison FAICD
(retired 14/11/2003)
Mr Antony James Morris FAICD
(appointed 14/11/2003)
Dr Elizabeth Jane Wilson FAICD
(appointed 15/11/2002)
Mr John Douglas Story FAICD
(appointed/retired 24/07/2003)
Mr Ralph John Lancaster Evans FAICD
(appointed 04/02/2004)
Past Chairman
Chairman
National Director
National Director
National Director
President, SA & NT
Alternate to Mr Charles Bagot
President, Victoria
President, WA
President, NSW
President, Tasmania
Past President, WA
Past President, ACT
President, ACT
President, Queensland
Alternate to Dr Jane Wilson
Chief Executive & Managing Director
Details of directors are included on page 4 of the Annual Report.
Meeting attendances
The Meeting attendance of Directors during the year 1 July 2003 to 30 June 2004 is noted below.
Director
Ms Elizabeth Alexander AM
Mr Charles Bagot
Mr Glenn Barnes
Mr Terence Budge
Mr Ralph Evans
Mr Christopher Fennell
Mr Robert Graham *
Mr James Green
Mr Andrew Guy
Ms Fiona Harris *
Mr Gerald Loughran
Mr Peter Mansell
Mr John Massey
Mr Don Mercer
Mr James Morris
Mr Alan Morrison
Dr Helen Nugent AO
Mr John Story
Dr Jane Wilson
*
Board Meeting
4
6
3
6
2
1
of
of
of
of
of
of
4
7
3
6
2
1
7 of 7
7 of 7
7
1
7
7
5
2
2
1
6
of
of
of
of
of
of
of
of
of
7
1
7
7
5
2
3
1
7
Audit & Compliance
Committee
Human Resources
& Remuneration Committee
2 of 2
2 of 2
2
2
2
2
of
of
of
of
2
2
2
2
2 of 2
1 of 1
4 of 4
4 of 4
Independent member of Audit & Compliance Committee
Principal activities
The principal activities of the AICD, constituted through its national office and seven divisions, during the financial year, were the conduct of
educational activities including the Company Directors Course, Advanced Program, Company Directors Conference, panel discussions, seminars,
breakfasts, luncheons and dinners; the publication of articles and statements on matters of interest to directors; liaison with other professional bodies
and the Stock Exchange on matters affecting directors and companies; consultations with, and submissions to, government particularly on the
Corporations Act (2001), commissions of inquiry and other public authorities about the framing of laws and regulations of concern to directors and
the corporate system in Australia. During the financial year there was no significant change in the nature of those activities.
15
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DIRECTORS’ REPORT (CONTINUED)
16
Financial results
The net amount of the AICD’s profit for the financial year was $471,065. This represents a decrease on the 2003 result of $1,385,341. The AICD is a
company limited by guarantee and no dividends are payable.
C
C
O
O
Review of operations
T
A review of the operations of the AICD during the financial year and the results of those operations is contained in the report by the Chairman and
Chief Executive Officer, contained on pages 1 and 2 of the Annual report.
Significant changes in state of affairs
O
During the financial year there was no significant change in the state of affairs of the AICD.
T
Indemnification of officers and auditors
T
During the financial year, the company paid a premium in respect of a contract insuring the directors of the company (as named above), the
company secretary and all executive officers of the company and of any related body corporate against a liability incurred as such a director,
secretary or executive officer to the extent permitted by the Corporations Act (2001). The contract of insurance prohibits disclosure of the nature of
the liability and the amount of the premium.
The company has not otherwise, during or since the financial year, indemnified or agreed to indemnify an officer or auditor of the company or of any
related body corporate against a liability incurred as such an officer or auditor.
C
O
O
T
Directors’ and officers’ remuneration
The non executive directors of the company are appointed on an honorary basis and as a result do not receive any remuneration either directly or
indirectly in their capacity as a director from the company or any related party. The Chief Executive Officer has been appointed by the Board as an
executive director and is remunerated as an employee of the company as set out in Note 16 to the Financial Statements
No other director of the AICD has received or become entitled to receive a benefit from AICD during or since the end of the financial year because of
a contract with:
• the director, or
• a firm of which the director is a member, or
• an entity in which the director has a substantial financial interest, or
• an entity that AICD controlled, or
• a company related to AICD when the contract was made or when the director received or became entitled to receive a benefit.
Remuneration of senior executives of the company is established by the Human Resources & Remuneration Committee. Remuneration is determined
as part of an annual performance review, having regard to market factors, a performance evaluation process and independent remuneration advice.
For executive officers, remuneration packages generally comprise salary, a performance-based bonus and superannuation.
Significant Events after Year End
There has not been any matter or circumstance that has arisen since the end of the financial year, that has significantly affected, or may significantly
affect, the operations of the AICD, the results of those operations, or the state of affairs of the AICD in financial years after this financial year.
Likely Developments and Future Results
There are no likely developments in the operations of the AICD which would affect the results of future operations.
Signed in accordance with a resolution of the directors made pursuant to section 298(2) of the Corporations Act (2001).
On behalf of the Directors
D P Mercer FAICD
Chairman
M J Green FAICD
Director
Sydney
16 September 2004
O
T
T
T
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Page 19
STATEMENT OF FINANCIAL
STATEMENT OF FINANCIAL
POSITION
PERFORMANCE
AT 30 JUNE 2004
YEAR ENDED 30 JUNE 2004
CURRENT ASSETS
Cash assets
Receivables
Other financial assets
Inventories
Other assets
Note
2004
$
2003
$
20(a)
3
4
5
6
561,731
445,196
6,132,712
133,865
391,203
244,720
538,943
8,462,797
106,768
571,370
7,664,707
9,924,598
484,441
3,277,667
756,608
-
3,762,108
756,608
11,426,815
10,681,206
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Plant and equipment
Other financial assets
7
8
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Payables
Other provisions
Other liabilities
9
10
11
Note
2004
$
2003
$
2
395,400
312,978
Cost of sales
262,936
191,187
Gross (loss)/profit from sale of goods
132,464
121,791
11,050,941
6,492,178
1,381,668
57,825
10,541,199
5,700,707
1,528,394
55,600
2 18,982,612
17,825,900
Revenue from Ordinary Activities
- Sale of goods
Revenue from Ordinary Activities
- Provision of services
Education, professional
development and events
Membership
Publishing
Licences
1,930,533
699,611
1,759,269
2,097,510
627,181
1,435,842
4,389,413
4,160,533
100,917
55,253
100,917
55,253
TOTAL LIABILITIES
4,490,330
4,215,786
Net profit
NET ASSETS
6,936,485
6,465,420
6,936,485
6,465,420
Total changes in equity other than
those resulting from transactions
with owners as owners attributable
to members of Australian Institute
of Company Directors
6,936,485
6,465,420
TOTAL CURRENT LIABILITIES
NON CURRENT LIABILITIES
Other provisions
12
TOTAL NON-CURRENT LIABILITIES
MEMBERS’ FUNDS
Retained profits
TOTAL MEMBERS’ FUNDS
14
17
- Other revenue
Expenses from ordinary activities
Education, professional
development and events
Membership
Publishing
Administration
Other
2
593,221
582,638
7,451,667
2,778,729
1,413,970
7,582,786
10,080
19,237,232
471,065
6,562,613
2,257,234
1,409,660
6,907,755
7,726
17,144,988
1,385,341
471,065
1,385,341
J61046 AICDar04b
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Page 20
STATEMENT OF CASH FLOWS
NOTES TO THE FINANCIAL
STATEMENTS
YEAR ENDED 30 JUNE 2004
FOR THE YEAR ENDED 30 JUNE 2004
Note
18
2004
$
2003
$
1. Summary of Accounting Policies
CASH FLOWS FROM OPERATING
ACTIVITIES
Receipts from activities and donors
Payments to suppliers and employees
GST Paid
Interest received
Net cash provided by
operating activities
20(b)
18,784,550 17,969,728
(16,951,573) (16,351,144)
(775,123)
(655,407)
354,509
434,356
1,412,363
1,397,533
CASH FLOWS FROM INVESTING
ACTIVITIES
Financial reporting framework
(
The financial statements are those of an individual entity and have
been prepared as a general purpose financial report which complies
with the requirements of the Corporations Act (2001), Australian
Accounting Standards and Urgent Issues Group Consensus Views.
The financial statements have been prepared in accordance with the
historic cost convention and do not take account of changes in either
the purchasing power of the dollar or in the prices of specific assets.
C
A
D
a
Significant accounting policies
Payment for plant and equipment
Purchase of other financial assets
Proceeds from sale of plant
and equipment
(147,770)
(3,277,667)
(556,935)
-
-
138
Net cash used in investing activities
(3,425,437)
(556,797)
Net increase/(decrease) in cash held
(2,013,074)
840,736
Cash at the beginning of the
financial year
8,707,517
7,866,781
Cash at the end of the financial year 20(a)
6,694,443
8,707,517
Accounting policies are selected and applied in a manner which
ensures that the resultant financial information satisfies the concepts
of relevance and reliability, thereby ensuring that the substance of the
underlying transactions and other events are reported. The accounting
policies used are consistent with those adopted in the previous year.
The following significant accounting policies have been adopted in the
preparation and presentation of the financial report:
(a) Cash and cash equivalents
Cash on hand and in banks and short-term deposits are stated at
nominal value.
For the purposes of the Statement of Cash Flows, cash includes cash
on hand and in banks, and money market investments readily
convertible to cash within 2 working days, net of outstanding bank
overdrafts.
(b) Receivables
Trade receivables are recognised and carried at original invoice
amount less a provision for any uncollectible debts. An estimate for
doubtful debts is made when collection of the full amount is no longer
probable. Bad debts are written-off as incurred.
(c) Investments
All investments are carried at the lower of cost and recoverable
amount.
(d) Inventories
Inventories are valued at the lower of cost and net realisable value.
Costs are assigned to inventory on hand on a first-in-first-out basis.
(e) Recoverable amount of non-current assets
Non-current assets that are carried at cost are written down to
recoverable amount where the carrying value of any non-current asset
exceeds recoverable amount. In determining the recoverable amount
of non-current assets, the expected net cash flows have not been
discounted to their present value.
e
O
(
O
e
(
A
c
T
c
(
c
t
a
(
e
c
(
(
(
J61046 AICDar04b
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Page 21
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2004
(iv) Licences
Revenue from Licences consists of income from licensing the
Company Directors Course to other organisations. Revenue is
recognised when licence fees are received.
1. Summary of Accounting Policies (continued)
(f) Property, plant and equipment
Cost
All classes of property, plant and equipment are measured at cost.
Depreciation
Depreciation is provided on plant and equipment and is calculated on
a straight line basis so as to write off the net cost of each asset during
its useful economic life. Assessments of remaining useful economic
lives are made on a regular basis for all assets. Leasehold
improvements are depreciated over the period of the lease or
estimated useful life, whichever is the shorter, as follows.
Life
Office plant and equipment
Leasehold improvements
Method
2-6 years Straight Line
4-5 years Straight Line
(g) Leases
Operating lease assets are not capitalised and rental payments are
expensed in the period in which they are incurred.
(h) Accounts payable
Accounts payable are carried at cost, which is the fair value of the
consideration to be paid in the future for goods and services received.
Trade payables and other accounts payable are recognised when the
company becomes obliged to make future payments resulting from
purchases of goods and services.
(i) Provisions
Provisions are recognised when the company has a legal, equitable or
constructive obligation to make a future sacrifice of economic benefits
to other entities as a result of past transactions or other past events, it
is probable that a future sacrifice of economic benefits will be required
and a reliable estimate can be made of the amount of the obligation.
(j) Revenue recognition
Revenue is recognised to the extent that it is probable that the
economic benefits will flow to the company and the
revenue can be reliably measured. The following specific recognition
criteria must also be met before revenue is recognised:
(i) Membership
New members’ Annual Membership Subscriptions are recognised
as revenue when received. The date of payment of the initial
Annual Membership Subscription becomes the renewal date.
Subsequent receipts of Annual Membership subscriptions for a
member are recognised as revenue on the renewal date.
Subscriptions are not refundable.
(ii) Functions, Education and Professional Development
Revenue from functions, education and professional development
activities is recognised when the function or course is held.
(iii) Publishing
Revenue from the Company Director journal and other
membership services is recognised on the provision of the
service.
(v) Publications
Revenue from publications is recognised when control of the
goods has passed to the buyer.
(vi) Interest and Dividend
Interest and dividend revenue is recognised when the company
has control of the right to receive the interest or dividend
payment.
(k) Unearned revenue
(i) Subscriptions in advance
Membership subscription receipts attributable to renewals
occurring in the current financial year for the current financial year
are brought to account as revenue. Subscription receipts wholly
relating to the next financial year are shown in the Statement of
Financial Position as subscriptions in advance.
(ii) Income in advance
Income received in advance consists of fees received during the
year of income for courses and functions that are to be held after
balance date.
(l) Income tax
Section 50 of the Income Tax Assessment Act 1997 provides that
certain institutions will be exempt from income tax. Australian Institute
of Company Directors falls specifically under Section 50-5 of the Act.
(m) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of
GST except receivables and payables which are stated with the
amount of GST included.
(n) Provision for employee entitlements
Provision is made for employee benefits accumulated as a result of
employees rendering services up to the reporting date. These benefits
include wages and salaries, annual leave and long service leave.
Liabilities arising in respect of wages and salaries, annual leave, and
any other employee benefits expected to be settled within twelve
months of the reporting date are measured at their nominal amounts
based on remuneration rates which are expected to be paid when the
liability is settled. All other employee benefit liabilities are measured at
the present value of the estimated future cash outflow to be made in
respect of services provided by employees up to the reporting date. In
determining the present value of future cash outflows, the market yield
as at the reporting date on national government bonds, which have
terms to maturity approximating the terms of the related liability, are
used.
Employee benefit expenses and revenues arising in respect of the
following categories:
- wages and salaries, annual leave, long service leave and other
leave benefits; and
- other types of employee benefits
are recognised against profits on a net basis in their respective
categories.
19
J61046 AICDar04b
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NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2004
Note
20
2004
$
2003
$
2004
$
2003
$
6,132,712
8,462,797
5. Inventories
Publications (at cost)
133,865
106,768
6. Other Assets
Accrued income
Prepayments
49,143
342,060
189,919
381,451
Total other assets
391,203
571,370
7. Plant and Equipment
Plant and equipment at cost:
Leasehold Improvements
Cost
Opening balance
Additions
Disposals
207,577
6,727
-
159,813
47,764
-
Closing balance
214,304
207,577
Accumulated amortisation
Opening balance
Amortisation for the year
Disposals
36,949
171,249
-
11,737
25,212
-
Closing balance
208,198
36,949
6,106
170,628
Office Plant and Equipment
Cost
Opening balance
Additions
Disposals
1,204,093
141,454
(145,680)
765,748
514,550
(76,205)
Closing balance
1,199,867
1,204,093
618,113
247,547
(144,128)
509,146
180,751
(71,784)
Closing balance
721,532
618,113
Net Book Value
478,335
585,980
Total plant and equipment, net
484,441
756,608
2,868,767
408,900
-
3,277,667
-
4. Other Financial Assets (current)
Short term money market deposits
2. Net Profit
Profit from ordinary activities includes the following items of revenue
and expense:
Short term investments consist of
money market investments readily
convertible to cash.
Operating revenue
Revenue from core activities:
Sale of goods
Publications
395,400
312,978
Provision of services
Education and professional
development
Membership
Publishing
Licences
11,050,941
6,492,178
1,381,668
57,825
10,541,199
5,700,707
1,528,394
55,600
Other revenue
18,982,612
17,825,900
238,712
354,509
138
148,144
434,356
593,221
582,638
19,971,233
18,721,516
25,799
-
4,903
3,418
247,506
171,289
180,753
25,216
791,225
694,960
87,041
31,053
71,852
13,320
Gross proceeds on sale of plant
and equipment
Other income
Interest and dividends received
Note
(a)
Total operating revenue
Profit from ordinary activities is after
charging the following expenses:
Bad and doubtful debts
Obsolete inventory
Depreciation and amortisation:
Plant and equipment - depreciation
- amortisation
Operating lease rental expense:
- minimum lease payments
Transfers to provisions:
- Long service leave
- Annual leave
Specific disclosure items above:
(a) Revenue from sale of plant and
equipment
Expense from sale of plant and
equipment
Gain/(loss) on sale or disposal of
plant and equipment
3. Receivables
Current:
Trade receivables
Provision for doubtful debts
Other receivables
Total receivables
Trade receivables are non-interest bearing.
-
138
(1,142)
(1,241)
(1,142)
(1,103)
408,935
(31,884)
499,222
(6,000)
377,051
493,222
68,145
45,721
445,196
538,943
Net book value
Accumulated Depreciation
Opening balance
Depreciation for the year
Disposals
8. Other Financial Assets
(non-current)
Listed equity investments
Fixed term bonds
a)
Terms and conditions relating to the above financial assets include
i) Fixed term bonds mature between August 2005 and August
2008 with interest rates ranging from 4% to 8.75%
ii) The listed equity investments include managed equity funds,
listed property trusts and convertible notes.
J61046 AICDar04b
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Page 23
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2004
Note
2004
$
2003
$
16. Remuneration of Officers
9. Payables (Current)
Trade payables
Other creditors and accruals
10. Other Provisions (Current)
Employee entitlements:
Annual leave
Long service leave
11. Other Liabilities (Current)
Income received in advance
Subscriptions in advance
12. Other Provisions (Non-current)
Employee entitlements:
Long service leave
70,069
1,860,464
594,781
1,502,729
1,930,533
2,097,510
355,676
343,935
324,623
302,558
699,611
627,181
Income of Directors
The non executive directors of the company are appointed on an
honorary basis and as a result do not receive any remuneration either
directly or indirectly in their capacity as a director from the company or
any related party. The Chief Executive Officer has been appointed by
the Board as an executive director and is remunerated as an
employee of the company.
Income of executives
The number of executive officers whose total income for the year falls
within the following bands, were:
$
1,558,694
200,575
1,279,547
156,295
1,759,269
1,435,842
100,917
55,253
100,917
55,253
13. Members’ Funds
The use of the description “Members’ Funds” is a departure from the
title “Contributed Equity” contained in AASB 1040, ‘Statement of
Financial Position’. Members’ Funds more appropriately reflects the
fact the company is a company limited by guarantee.
If the company is wound up, the articles of association state that each
member is required to contribute a maximum of $20 towards meeting
any outstanding obligations of the company. At 30 June 2004 the
number of members was 18,832 (2003: 17,331).
21
100,000
120,000
140,000
150,000
160,000
180,000
190,000
210,000
220,000
-
$
2004
2003
109,999
129,999
149,999
159,999
169,999
189,999
199,999
219,999
229,999
2
1
1
2
1
1
1
1
1
3
1
1
1
$1,512,289
$1,388,681
The aggregate income of the executives
referred to above:
The above table includes bonus payments allocated in accordance
with AICD policy.
Income of executives comprises amounts paid or payable to executive
officers domiciled in Australia, directly or indirectly, by the company or
any related party in connection with the management of the affairs of
the entity or economic entity, whether as executive officers or
otherwise.
17. Remuneration of Auditors
14. Retained Profits
2004
$
2003
$
40,000
35,000
Retained profits at the beginning
of the financial year
Net profit
6,465,420
471,065
5,080,079
1,385,341
Retained profits at the end of the
financial year
6,936,485
6,465,420
15. Commitments under Noncancellable Operating Leases
Premises:
Not later than 1 year
315,501
Later than 1 year but not later than 5 years 496,456
659,728
2,519,270
18. Related Party Disclosures
(i) The directors of the company during all of the past two financial
years (except as noted) were:
811,957
3,178,998
•
Operating leases are in respect of office premises. Rental agreements
for some premises are on a monthly basis. Other operating leases are
for fixed periods with generally fixed rental payments and have
inflation escalation clauses.
•
Amounts received, or due and receivable,
for the audit of the financial report
- Ernst & Young
In addition to the amounts described above, the company paid
expenses for rent to Ernst & Young of $16,210 (2003: $25,387). All
transactions were on normal arms length terms and conditions.
•
•
No operating leases contain restrictions on financing.
•
Ms Elizabeth Anne Alexander AM FAICD
(appointed 25/11/1996 / retired 14/11/2003)
Mr Donald Penn Mercer FAICD
(appointed 4/12/2000)
Dr Kenneth John Moss FAICD
(appointed 07/08/2000 / retired 15/11/2002)
Mr Graeme William McGregor AO FAICD
(appointed 28/03/2000 / retired 07/02/2003)
Mr Andrew Frank Guy FAICD
(appointed 16/10/2001)
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NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2004
Note
22
18. Related Party Disclosures (continued)
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Mr John Clarence Massey FAICD
(appointed 30/10/2000 / retired 15/11/2002)
(appointed 07/02/2003)
Dr Helen Marion Nugent AO FAICD
(appointed 19/12/2003)
Mr Charles Neville Bagot MAICD
(appointed 29/10/2001)
Mr Christopher Robert Fennell FAICD
(appointed 31/03/2004 / retired 01/04/2004)
Mr Glenn Lawrence Lord Barnes FAICD
(appointed 04/02/2004)
Mr Terence Budge FAICD
(appointed 09/09/2003)
Ms Virginia Sue Hickey FAICD
(appointed/retired 21/03/2003)
Mr Maxwell James Green FAICD
(appointed 25/02/2002)
Mr Gerald Norman Loughran
(appointed 01/10/2001)
Mr Peter John Mansell FAICD
(appointed 27/09/2001 / retired 08/09/2003)
Ms Eva Maria Plachta MAICD
(appointed/retired 07/02/2003)
Mr Wilfred Alan Morrison FAICD
(appointed 30/10/2000 / retired 14/11/2003)
Mr Antony James Morris FAICD
(appointed 14/11/2003)
Dr Elizabeth Jane Wilson FAICD
(appointed 15/11/2002)
Mr John Douglas Story FAICD
(appointed/retired 24/07/2003)
Mr Ralph John Lancaster Evans FAICD
(appointed 04/02/2004)
Registered Office
Level 25, Australia Square
264-278 George Street
Sydney NSW 2000
Australia
Incorporated and domiciled in Australia
19. Financial Reporting by Segments
The company’s activities include conducting educational activities,
publication of articles and statements of interest to directors and
consultation with and submissions to government. The company
operates predominantly in one business segment being the provision
of member services and in one geographical segment being Australia.
2004
$
2003
$
20. Notes to the Statement of Cash Flows
(a) Reconciliation of cash
For the purpose of the Statement of Cash Flows, cash includes cash
on hand and in banks and investments in money market instruments.
Cash at the end of the financial year as shown in the Statement of
Cash Flows is reconciled to the related items in the Statement of
Financial Position as follows:
Cash
Short Term Investments
2
(
T
561,731
6,132,712
244,720
8,462,797
6,694,443
8,707,517
2
471,065
1,385,341
C
T
S
418,795
1,142
205,969
(1,103)
118,094
80,324
Net cash provided by operating activities
before changes in net assets and liabilities 1,009,096
1,670,531
(b) Reconciliation of Net Cash provided
by Operating Activities to Net Profit
Net profit
Depreciation/amortisation of
non-current assets
Loss/(gain) on sale of plant and equipment
Transfers to provisions:
Provision for employee entitlements
Changes in net assets and liabilities
(Increase)/Decrease in:
Current trade receivables
Current other receivables and
prepayments
Current inventories
Increase/(Decrease) in:
Current trade creditors
Other current creditors and accruals
T
116,171
(130,582)
157,743
(27,097)
(186,712)
(4,164)
(524,712)
681,162
132,569
(84,109)
1,412,363
1,397,533
21. Financial Instruments
2
C
S
T
T
Terms and conditions of debtors
The Australian Institute of Company Directors extends 30 day credit
terms to debtors generally, subject to compliance with the company
credit policy.
Credit risk
Credit risk refers to the risk that a counterparty will default on its
contractual obligations resulting in financial loss to the company. The
company has adopted the policy of only dealing with creditworthy
counterparties as appropriately credentialed as a means of mitigating
the risk of financial losses from defaults.
The carrying amount of financial assets and liabilities as shown on the
face of the Statement of Financial Position represents the maximum
credit risk to which the company is exposed.
Net fair value
The carrying amount of the financial assets and liabilities as shown on
the face of the Statement of Financial Position represents the net fair
value of the financial assets and liabilities at the reporting date except
for non-current investments. For non-current investments fair value is
the current quoted market bid price adjusted for transaction costs
necessary to realise the asset.
(
A
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NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2004
23
21. Financial Instruments (continued)
(a) Interest rate risk exposures
The following table summarises interest rate risk for the company, together with effective interest rates as at balance date.
Fixed interest rate maturing in
Floating
interest
rate (i)
$
1 year or
less
$
561,731
-
Average interest rate
Over 1 to
5 years
$
Noninterest
bearing
$
Total
$
Floating
%
fixed
%
6,132,712
-
408,900
408,935
2,868,767
-
561,731
408,935
6,132,712
2,868,767
408,900
4.00%
N/A
N/A
N/A
N/A
N/A
N/A
5.48%
N/A
6.75%
561,731
6,132,712
408,900
3,277,702
10,381,045
-
-
-
70,069
70,069
N/A
N/A
-
-
-
70,069
70,069
244,720
-
8,462,797
-
-
499,222
244,720
8,462,797
499,222
3.60%
N/A
N/A
N/A
5.12%
N/A
244,720
8,462,797
-
499,222
9,206,739
-
-
-
594,781
594,781
N/A
N/A
-
-
-
594,781
594,781
2004
Financial assets
Cash
Trade debtors
Short term money market investments
Listed equity investments
Fixed term bonds
Financial liabilities
Trade creditors
2003
Financial assets
Cash
Short term money market investments
Trade debtors
Financial liabilities
Trade creditors
(i)
Floating interest rates represent the most recently determined rate applicable to the instrument at balance date.
(b) Net Fair Values
All financial assets and liabilities have been recognised at the balance date at their net fair values, except for the following:
Total carrying amount as per the statement
of financial position
2004
2003
$
$
Aggregate net fair value
2004
$
2003
$
Financial assets
Listed equity investments
Fixed term bonds
2,868,767
408,900
-
3,138,197
411,321
-
3,277,667
-
3,549,518
-
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NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
DIRECTORS’ DECLARATION
FOR THE YEAR ENDED 30 JUNE 2004
24
22. Employee Entitlements
The directors declare that:
2004
2003
a)
The number of full-time equivalents
employed as at 30 June are:
Aggregate employee entitlement liability
(Refer to Notes 10 &12)
87
82
2004
$
2003
$
800,528
682,434
23. CONTINGENT LIABILITIES
The company has bank guarantees in respect of leased properties to
the amount of $287,990 (2003: $267,628) at year end. The bank
guarantees do not impose any restrictions on the use of cash.
the financial statements and associated notes comply with the
accounting standards and Urgent Issues Group Consensus
Views;
b) the financial statements and notes give a true and fair view of the
financial position as at 30 June 2004 and performance of the
company for the year then ended;
c) in the directors’ opinion:
i) there are reasonable grounds to believe that the company will
be able to pay its debts as and when they become due and
payable; and
ii) the financial statements and notes are in accordance with the
Corporations Act (2001), including Sections 296 and 297.
Made in accordance with a resolution of the directors.
24. International Accounting Standards
The Australian Institute of Company Directors has commenced
transitioning its accounting policies and financial reporting from current
Australian Standards to Australian equivalents of International Financial
Reporting Standards (IFRS). The company has allocated internal
resources to conduct impact assessments to isolate key areas that
will be affected by the transition to IFRS. As the Australian Institute of
Company Directors has a 30 June period end, priority has been given
to considering the preparation of an opening balance sheet in
accordance with AASB equivalents to IFRS as at 1 July 2004. This will
form the basis of accounting for Australian equivalents of IFRS in the
future, and is required when the Australian Institute of Company
Directors prepares its first fully IFRS compliant financial report for the
comparative year ended 30 June 2005. Set out below are the key
areas where accounting policies will change and may have an impact
on the financial report of the company. At this stage the company has
not been able to reliably quantify the impacts on the financial report.
Classification of Financial Instruments
Under AASB 139 Financial Instruments: Recognition and
Measurement, financial instruments will be required to be classified
into one of five categories which will, in turn, determine the accounting
treatment of the item. The classifications are loans and receivablesmeasured at amortised cost, held to maturity – measured at
amortised cost, held for trading – measured at fair value with fair value
changes charged to the net profit and loss, available for sale –
measured at fair value with fair value changes taken to equity and
non-trading liabilities – measured at amortised cost. This will result in a
change in the current accounting policy that does not classify financial
instruments into the five categories noted above. The future financial
effect of this change in accounting policy is not yet known as the
classification and measurement process has not yet been fully
completed.
D P Mercer FAICD
Chairman
M J Green FAICD
Director
Sydney
16 September 2004
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AICD SPONSORS
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25
J61046 AICDar04b
26/10/04
11:27 AM
Page 28
AICD ADDRESSES
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Level 2, National Australia Bank House
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Telephone: 02 8248 6600
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