Annual Report 2002 Supporting Australian directors through our goals Contents Our 2001—2002 mission President and Chief Executive Australian Institute of Company Directors is Australia’s professional Officer’s Report 2 organisation for directors providing education, information, and advocacy.
National Office Reports Our 2001—2002 goals • Education 4 Australian Institute of Company Directors strives to: • State services and events 5 1. meet the information and education needs of directors • Policy and advocay 5 2. promote excellence in director performance • Operations 6 3. provide a valued directors’ network • Finance 6 4. attract and retain members National Councillors 7 5. be a successful advocate for directors’ issues, and State Division Reports 6. be a financially sound, efficient, and caring organisation. • New South Wales 8 • Victoria 9 AICD Five—year summary • Queensland 9 • Western Australia 10 2002 2001 2000 1999 1998 • South Australia and Northern Territory 10 Membership at yearend 16,365 15,687 14,765 14,087 13,417
• Australian Capital Territory 11 Membership growth 4.3% 6.2% 4.8% 5.0% 4.1% • Tasmania 11 Net surplus $2,021,245 $591,253 $506,874 $646,488 $503,188
Corporate Governance 12 Gross revenues $15,945,798 $13,620,423 $12,487,946 $10,771,825 $9,429,421
Division Councils 13 Net assets $5,080,079 $3,058,834 $2,467,581 $1,960,707 $1,314,219
AICD Committees 14 Cash investments $7,866,781 $5,476,106 $3,918,430 $3,310,398 $2,170,684 Net assets as a % of gross revenues 31.9% 22.5% 19.8% 18.2% 13.9% Financial Report 15 Cash investments as a % of gross revenues 49.3% 40.2% 31.4% 30.7% 23.0% Net surplus as a % of gross revenues 12.7% 4.3% 4.1% 6.0% 5.3%
Our goals
Kathryn Hudson, Senior Membership Pictured on the front cover from the top left are staff members: Valerie Landgrebe (WA Division Office), Executive, NSW Division Office Rosanna McDonald (SA-NT Division Office), Tim Booth (National Office), Anita Sawa (National Office), Ray Srodzinski (Tasmania Division Office), Karen Birkett (National Office). AICD Annual Report
Twelve years on AICD celebrates The beginnings of Australian Institute of Company Directors (AICD) can be traced back to the United Kingdom’s Institute its most successful year to date of Directors (IoD), formed by Royal Charter in 1906. Branches of the IoD appeared having delivered a record number in the Australian States in the 1960s. These branches were united in January 1971 under of Company Director Courses, The Institute of Directors in Australia, an autonomous body affiliated with the IoD in the core education programs, director United Kingdom. The challenge of servicing State branches brought the arrival of a briefings, and networking events. competitor, The Company Directors Association of Australia, in 1982. The two bodies merged on 1 January The financial year closed 1990 to form AICD. with AICD in a strong financial position which will enable an expansion of education and other services in the forthcoming year. The following pages record 2001 our success in the year and 2002 outline future initiatives to expand our role as the professional organisation for directors in Australia.
Lindy Chapman, Membership Services Data Analyst and Gliselle Quita, Assistant to National Finance Manager, 1 both of the National Office President and Chief Executive Officer’s Report
Goals of AICD ustralian Institute of Company Directors “Catch the Future” proved to be the most A (AICD) has continued to develop its successful Company Directors Conference to To meet the services to provide education, information, and date. A program of international and national professional support for Australian directors at speakers dealing with current issues attracted each stage of their career. 500 members. Delegate feedback showed a 20 information and Best practice in directorship, both per cent increase in satisfaction with key nationally and internationally, is continually elements of the event on last year’s conference. being researched and communicated by AICD’s education needs policy and advocacy department. Trends are Promoting excellence in directorship monitored and relevant education and of directors information is provided to assist directors and The delivery of new courses, the review of senior managers in making boards more existing course materials, and the launch of new effective. publications, are testimony to AICD’s This report provides highlights of AICD’s commitment to promote director excellence. year, focusing on its goals and the success in Coupled with this, there has been a five per cent achieving those goals. increase in the number of Company Directors 1 Course participants undertaking the non- compulsory course assessment. A total of 875 Achievements towards this goal during Meeting directors’ education needs participants sat the examination and completed 2001—2002 include: Demand for AICD courses continues to grow. the assignment task that led to the award of the During the past financial year there has been a Company Directors Course Diploma. • a 27 per cent increase in 27 per cent increase in enrolments, with more Library services and facilities at AICD have enrolments, with more than 27,000 than 27,000 participants in AICD courses and been upgraded to increase the availability of participants in AICD courses and training programs. More than 1,500 participants information on director issues and best practice training programs undertook the flagship course, the Company internationally. The seventeenth edition of Directors Course, a 25 per cent increase on last Duties and Responsibilities of Directors and Officers • a 25 per cent increase in year’s numbers. was released and all members received copies in enrolments in the Company To meet demand, five additional residential May 2002. This text is a comprehensive, plain Directors Course, with more than Company Directors Courses were scheduled English guide to the law affecting Australian directors and officers and the new edition details 1,500 participants bringing a record total of 18 residential courses for the year. Requests for tailored in-house the recent changes to the Corporations Act and recent court decisions. • a record total of 18 residential workshops has nearly doubled with 23 programs, involving 460 participants, conducted by AICD The Law Reporter pages, Australian courses State offices during the year. Securities and Investments Commission column, Asia-Pacific interest in AICD courses is and industry leader interviews featured in the • requests for tailored workshops growing with members of the Philippines Company Director journal inform members of doubled. Institute of Corporate Directors participating in director best practice. A Taylor Nelson Sofres two Company Directors Course residential Survey 2002 showed that 95 per cent of AICD courses. Discussions have been held with members “highly regarded” the journal. Another counterparts in China, Indonesia, and Papua initiative in promoting excellence was AICD’s New Guinea to explore ways in which AICD three-year commitment to be the principal education can be provided to assist their sponsor of the Australasian Annual Reporting corporate development. Awards. The awards promote and acknowledge During the year, the Company Directors excellence in reporting by companies, Course notes and other core education material government entities, and not-for-profit organi- were completely reviewed to include current sations. legislative developments and new case studies; communicate in plain English; and provide Providing a network for directors standardised tutor presentations. To ensure the continued quality of AICD A record number of 40 networking events and education services further investment was made 61 luncheons were hosted by AICD around in staff, course materials, specialised education Australia during the year. These activities allow programs, and the Company Directors members and business leaders to get together, to Conference. receive compliance and governance updates, Two new specialised programs, “Forensic and to share their experiences. investigation for directors” and “Implementing Database research conducted in June shows compliance”, were introduced. A further two AICD membership is made up of 51 per cent of new programs, “Company audits: lifting the veil” the directors sitting on the boards of the and “Handling difficult situations in the Australian Stock Exchange’s top 200 companies boardroom”, have been developed and will be and that 119 of those members hold the position offered to members in all States in the new of chairman of the board. financial year. The timely launch of three AICD texts, The Ms Marie Lucas and Mr Garry Hansen Twenty-First Century Board: selection, attending a Company Directors Course performance, and succession, Audit Committee residential held in Canberra (April 2002). Best Practice Guide, and 50 Matters to be considered before signing a company’s financial statements, brought sales that exceeded expectations as directors sought guidance in these important areas.
2 AICD Annual Report
Growing the membership National Council of AICD endorsed three Future strategy policy positions on the subjects of sustainability, Membership grew by 4.3 per cent during the year intangible assets, and the requisitioning of The strong financial result has enabled the to a total membership of 16,365 at the end of the company meetings. This policy work and allied National Council to provide additional financial financial year. Research was conducted to media releases have in turn led to a number of resources for expansion of our educational determine the needs of members. This research media interviews and increased public profile for activities in the new financial year. In addition led to: the first strategy session conducted by the the organisation. AICD research and information delivery National Education Committee in March 2002; capacities will be upgraded to enhance our role an enhanced membership database system; and Financial, efficient, and caring in developing corporate governance best development of a new website to enable online practice guidance. membership applications, event and course The statement of financial position Subsequent to the yearend the Australian bookings, and publication orders. demonstrates AICD’s success in meeting Stock Exchange announced the establishment New methods of involving members profitability targets for the past financial year. of a Corporate Governance Council and AICD introduced during the year include the An increased revenue of 17.1 per cent was will play a leading role in the work of the webcasting of the Company Directors achieved bringing a net surplus of $2,021,245. Council. Conference 2002 Federal Budget session and the To ensure this continuing success, a new Major initiatives already underway include introduction of a broadcast email survey to compliance program was developed. Staff the recruitment of three new education obtain members’ views on policy issues to assist training on risk management is to proceed early managers, development of an advanced course AICD to effectively respond to a number of in the new financial year. for graduates of the Company Directors Course, government inquiries. Growth in demand for AICD services the launch of the new website, and the review of during the past eighteen months has in turn the future resource requirements of the policy The directors’ advocate brought the need for increased resources. “The and advocacy department. Employee Support System” was introduced to We look forward to reporting growth in new Through the work of AICD’s four policy provide an AICD employee manual online and services for members in the Company Director committees—law, taxation and economics, personal advice with a consultant on-call. The journal and the website throughout the year. accounting and financial advisory, and sustain- National and New South Wales division offices ability—40 submissions have been presented to moved to Australia Square Tower in Sydney, in government and government authorities and the city’s commercial hub. These new offices three policy positions have been developed on offer staff and committee members more behalf of members. meeting rooms and more modern facilities. The policy efforts of AICD have concen- The efforts of a hardworking team of staff Elizabeth Alexander AM FAICD trated on: the independence of auditors; the have contributed substantially to AICD’s President liability of directors in the case of industrial success. We thank them for serving the death; simplification of taxation laws; the review membership and for encouraging increased of Australia’s international tax regime; the professionalism in directorship, good corporate review of the Australian Consumer and governance practices, and support to Australian Competition Commission’s powers; the business. shortcomings of Australia’s superannuation We particularly wish to thank the members John Hall FAICD system; the protection of employee entitlements; who so generously gave their time to serve on Chief Executive Officer the Australian Stock Exchange’s corporate National Council, Divisional Councils, the governance guidelines; and the federal National Education Committee, the Conference government’s review of the continuous Committee, the policy committees, and the task disclosure regulations. forces established by AICD. Their contributions This work has brought three successful have greatly assisted AICD in achieving success outcomes for Australian directors during the and further developing services to support year. These matters are listed below. Australian directors in the future.
• In May, the Crimes (Workplace Death and Serious Injuries) Bill 2001 was defeated in the Upper House of the Victorian parliament. The bill sought to make directors and officers of companies criminally liable for the negligent acts or omissions of others. While AICD is committed to workplace safety and stringent safety laws, it cautioned the government on law reform having a punitive, rather than preventative, focus. • Also in May, the Board of Taxation made the decision to end all work on the Education Treasury’s proposed new model for 1 calculating taxable income, the tax value method that AICD argued would not simplify taxation laws. • The policy committees have worked hard in highlighting insolvency and corporate disclosure as issues to federal government. During the year, AICD was pleased to learn of the government’s announcement of two further stages to the Corporate Law Economic Reform Program, CLERP 8 on John Hall FAICD, Chief Executive Officer insolvency and CLERP 9 on accounting and and Elizabeth Alexander AM FAICD, President 3 auditing and corporate disclosure. National Office Reports
Goals of AICD he national office of AICD is structured to New education courses developed Tsupport AICD State divisions, deliver core In line with AICD strategy, two new education Promote education courses and events, develop policy on courses were developed—“Forensic investi- director issues, publish the Company Director gation for directors—recognising the warning journal and best practice texts for directors, and signs”, and “Implementing compliance”. Other excellence in represent the views of members nationally. The courses about to be launched are “Company national office shares its office with the New audits: lifting the veil” and “Handling difficult South Wales division at Australia Square Tower situations in the boardrooms”. director in Sydney. A consultant editor was hired to review all In its supportive role, the office is divided Company Directors Course and core education performance into five departments: education, State services materials to ensure uniformity of style and use of and events, policy and advocacy, operations, and plain English. Course tutors and leading finance. The work of these departments in directors reviewed all the course modules to meeting the strategy of AICD during the past update the text with the latest developments. financial year is detailed below. Three AICD texts were launched during the year—The Twenty-First Century Board: selection, 2 performance, and succession, Audit Committee Unprecedented demand for education Best Practice Guide, and 50 Matters to be Achievements towards this goal during considered before signing a company’s financial 2001—2002 include: The corporate climate and quality of AICD education has given rise to unprecedented statements. Sales of national and international demand for education and training courses. The texts, available to members at a 15 per cent • the delivery of two new specialised education department is responsible for discount, remained constant. education programs, “Forensic developing and maintaining the Company investigation for directors” and Directors Course as a residential, tutorial, and Education initiatives—past and future “Implementing compliance” correspondence program; for developing core A number of initiatives grew from the demand education programs; and for providing an up-to- and reputation of AICD courses and the first • the launch of four AICD corporate date catalogue of business texts to members at strategy meeting held by the National Education governance texts: The Twenty-First discounted prices. The strategy of the education Committee in March, they include: Century Board: selection, department is to develop new education courses •Two Company Directors Course residential performance, and succession, and to update and revise existing courses. Demand for AICD education is well- programs held for participants from the Audit Committee Best Practice Philippines Institute of Company Directors. Guide, 50 Matters to be considered documented in the President and Chief Executive Officer’s Report. Further details • Continued support to the Thai Institute of before signing a company’s follow: Directors with the delivery of the Company financial statements, and Duties Directors Course under licence. and Responsibilities of Directors • Eighteen Company Directors Course • The first rural residential Company and Officers (17th edition). residential programs were held, principally Directors Course held in Albury, with more in Canberra, involving a total of 426 planned for other regional centres. participants. • The Federal Department of Agriculture, • Forty-eight tutorial Company Directors Forestry and Fisheries Australia choosing Courses were conducted by the State the Company Directors Course as the divisions for 1,104 participants. Ninety-four vehicle for training young rural leaders. participants enrolled in the correspondence Fourteen young leaders from rural Australia program. were granted Company Directors Course In summary, there was a 14 per cent increase scholarships. More recently, the in the number of Company Directors Courses Parliamentary Secretary for Agriculture, delivered and a 25 per cent increase in the Fisheries and Forestry, Senator Judith number of course participants when compared Troeth, announced a similar program for with figures of the previous financial year. women working in Australian rural industries. • Eighty-three core education programs were • The recruitment of three new education conducted during the year with the most managers in the new financial year and the popular courses being “The new director development of a database of 100 tutors. program”, “Board, director and CEO assessment”, and “The role of the Liz Jeffrey MAICD chairman”. Core education courses involved National Manager, Education 1,902 participants. [email protected] •Twenty-three core education programs were direct line: + 61 2 8248 6620 tailored as in-house workshops and 460 participants took part. In summary, the number of programs conducted increased by 34 per cent on last year’s figures and a 43 per cent increase was recorded Ms Kate Joseph and Mr Wayne Munro in the number of tailored workshops. attending the Company Directors Course residential in Canberra (April 2002).
4 AICD Annual Report
Encouraging corporate governance AICD Executive team (as at 30 June 2002) discussion More time has been dedicated to presenting AICD policy positions to politicians, key bureaucrats, and other stakeholder groups. Representatives from AICD attended Parliamentary Joint and Senate Committee Public Hearings to reinforce AICD’s positions. Meetings on key issues were arranged with the Hon. Senator Ian Campbell, Senator Stephen Conroy, and the Hon. Senator Helen Coonan. For closer communication with government, Federal Treasury staff members are invited to join the law committee and accounting and financial advisory committee as ex-officio members. State services and events adding value Sponsorship of best practice in reporting Industry Liaison Committee meetings are New initiatives for the year include AICD’s hosted by AICD on a quarterly basis. These A restructure of the professional development major sponsorship of the Australasian Reporting meetings provide a forum for debate on a range department brought rise to its renaming to State Awards 2002 run by the not-for-profit organi- of issues affecting directors. The Australian services and events department at the beginning sation, the Australasian Reporting Awards Inc. Shareholders Association, Investment Financial of the financial year. Leading the agenda of the The awards foster excellence in corporate Services Association, Australian Employee state services and events department was the disclosure by setting criteria on good reporting Ownership Association, Australasian Investor task of conducting the Company Directors practices and awarding companies, not-for profit Relations Association, Securities Institute of Conference, researching means of attracting and organisations, and government entities, for Australia, Company Secretaries Association of retaining members, and creating cost efficiencies excellence in their reporting. At an awards Australia, and Australian Stock Exchange in producing marketing materials. dinner in May, 147 organisations were attended. Five hundred delegates attended the recognised for their excellence in reporting. An increase in demand for information on Company Directors Conference 2002 held from corporate governance and director best practice the 15 to 17 May on the Gold Coast. This record Pauline Green FAICD brought a 20 per cent increase in inquiries to the number of delegates, the quality of national and National Manager, State services and events AICD library during the year. The new AICD international speakers, and the topics they dealt [email protected] website, to be launched in the new financial with raised the revenue substantially on last direct line + 61 2 8248 6670 year, will publish the library’s catalogue and its year’s figures. “frequently asked questions” page will provide a A conference evaluation survey completed useful quick reference point. The website will by 167 delegates showed a 17 per cent increase An active policy and advocacy year also allow access to corporate governance in the overall satisfaction in topics, from 52 per databases worldwide through web hyperlinks. cent in 2001 to 69 per cent in 2002, and a 10 per International and national sentiment to further cent increase in satisfaction in the quality of regulate corporations and their directors has Rob Elliott MAICD speakers, from 52 per cent in 2001 to 62 per cent brought an active year for AICD policy National Manager, Policy and advocacy in 2002. committees and AICD in the policy and [email protected] All AICD members were offered a “free advocacy department. direct line: + 61 2 8248 6630 seat” to the Budget Session of the conference Policy of AICD is determined by the through the webcasting of the session on AICD’s National Council with the assistance of AICD’s website for a month after the conference. The four policy committees—law, accounting and webcast was viewed by 634 people and the financial advisory, taxation and economics, and popularity of the concept has led to the sustainability. Forty submissions were lodged webcasting of the conference debate on with government and authorities during the Corporate Social Responsibility early in the new year. All submissions dealt with director-related financial year. issues and are available on the AICD website. Their subject matter was broad ranging, from the Researching member services independence of auditors to international tax Understanding the role played by the AICD is the reform. title of the membership survey commissioned Representation on policy issues is a long- by AICD and presented by consultants, term endeavour often running over a number of Taylor Nelson Sofres, in May. A group of years. A number of issues were, however, Excellence about 750 members, lapsed members, and resolved during the year, including those issues 2 non-members were questioned through an documented in the President and Chief interview, by telephone, or focus-group Executive Officer’s Report. During the year the discussion. The survey results will be a valuable National Council announced policy positions aid in identifying initiatives for attracting and on a number of issues including, sustainability, retaining members and as a guide to AICD’s intangible assets, and the requisitioning of strategic direction. company meetings. Centralising core marketing activities The strategy of further communicating during the past eighteen months has led to policy work has led to a news page on AICD higher standards in AICD branding and print website and Members’ Voice page in the material and substantial cost-savings for the Company Director journal. In preparing smaller State divisions. New initiatives include submissions, a new method of canvassing the introduction of standard brochure templates member views has been introduced. It involves a for education courses and the coordination of broadcast email requesting feedback on issues print production. By adopting this process, a raised by the submission. Linda Carruthers, Executive Assistant, 50 per cent saving on printing brochures is ACT Division Office 5 possible. Goals of AICD Investment in operations for growth Most importantly, Company Director continues to be a major editorial and information vehicle Considerable investment in new office space, for members. A survey conducted in May by technology, and human resources took place consultants, Taylor Nelson Sofres, showed 95 Provide a during the year in response to AICD’s growth. per cent of members “highly regarded” the The expiry of the York Street office lease journal. valued directors’ prompted the decision to move the offices to level 25, Australia Square Tower in Sydney. A Ian Mackay FAICD redesign and refurbishment of the new open National Manager, Operations network plan office was undertaken and the move of [email protected] 47 staff took place in January 2002. direct line: + 61 2 8248 6640 Development and investment in new technology was set out in a strategy document— AICD IT Roadmap. This document maps A successful financial year AICD’s development strategy for technology infrastructure, internal technology applications, Through a combination of increased revenue of 3 and the website. 17.1 per cent during the previous financial year, An organisation-wide audit was conducted efficiency in variable costs and savings in Achievements towards this goal during to establish the technology needs of all AICD overhead expenditure, AICD had a very 2001—2002 include: offices. Personal computers and printers were successful year financially. A net surplus of upgraded and all offices were supplied with $2,021,245 was achieved compared to $591,253 • a record number of 40 networking laptop personal computers and data projectors the previous year. A culture of fiscal responsi- events and 61 luncheons hosted for course presentations, and digital cameras. bility and accountability and an efficient Uniform software applications are now in budgetary control system greatly contributed to • 500 delegates attended “Catch the use. Microsoft operating systems and Lotus this result. Future”, Company Directors Notes application software have been upgraded. Members’ funds at 30 June were $5,080,079 Conference 2002 The installation of ADSL broadband, Microsoft compared to $3,058,834 at the end of the 2000 network software, and other new previous financial year. Funds in excess of operating needs were invested in financial • 51 per cent of the directors of the technology has enabled faster email communi- instruments, for example, bank bills, commercial Australian Stock Exchange’s top cation and improved data security. A review of internal computer applications paper, and corporate bonds. The primary 200 companies are AICD members, initiated a data integrity program across all objective of AICD investment guidelines, as and 119 of those members are systems and two new staff members were approved by National Council, is to preserve chairmen. employed to manage the database and provide capital and to obtain the best yield from those training. investments. Maintaining a diversified portfolio is also an important criteria. The weighted New website for members average rate of return on AICD investment Members will soon receive the benefit of AICD’s portfolio during the year exceeded the going rate investment in its new website, due to be of return on 90-day bank bills at any one time. launched in the new financial year. The new As an independent organisation with no access website offers: to external financial support, AICD has an important need to maintain a good level of •Secure online membership application and reserves in order to protect itself from any payment; course and event booking and unexpected adverse event such as a prolonged payment; and ordering of publications. economic downturn. • Member access to a comprehensive list of Compliance and risk-management issues are “frequently asked questions”, library important elements of good management services, policy submissions, and media practice. During the year a compliance program releases. was developed and staff training will begin early Investment in human resources resulted in a in the new financial year. new AICD online employee manual and the availability of advice on call from an external Clark Chui MAICD consultant. National Manager, Finance [email protected] Company Director reports profit despite direct line: + 61 2 8248 6660 global downturn The past financial year was one of mixed fortune for Company Director journal. Last year’s global downturn in business confidence and activity was reflected in the national advertising market. Despite the downturn, Company Director was able to be profitable for the year. A major factor contributing to this result was the State features Networks Mr Nick Greiner AC and Mrs Kathryn run in the journal towards the end of the Greiner at the "Catch the Future" financial year. While these features are a source 3 Company Directors Conference 2002. of revenue they also provide an ideal editorial platform for individual States to showcase their economy, industries, and strategies that will contribute to future growth.
Alison O’Meara, Administrative Officer, 6 WA Division Office AICD Annual Report
National Councillors
Australian Institute of Company Directors’ National President, Elizabeth Alexander AM FAICD, took office on 30 October 2000.
A listing of the names and board positions of the National Council as at 30 June 2002 follows.
Miss Elizabeth Alexander AM FAICD Dr Ken Moss FAICD Mr Don Mercer FAICD National President National Vice-President National Vice-President Director, Amcor Ltd; Director, Boral Ltd; Chairman, Australian Maritime Safety Chairman, Australia Pacific Airports Director, CSL Ltd; Director, Winston Authority; Chairman, Boral Ltd; Corporation Ltd; Chairman, Orica Ltd; Churchill Memorial Trust; Member of the Chairman, Centennial Coal Company Director, Australian Prudential Takeovers Panel and Financial Reporting Ltd; Director, Adsteam Marine Ltd; Regulation Authority; Director, CSIRO; Council; Chairman of the Board of Director, General Property Trust Chancellor, RMIT University; Chairman, Advice of the Salvation Army (Southern Management Ltd; Director, National Orchestra Victoria. Command). Australia Bank Ltd; Board member, Hunter Area Health Service.
Mr Graeme McGregor AO FAICD Mr Charles Bagot MAICD Mr M. James Green FAICD Mr Andrew Guy FAICD Treasurer President, South Australia and Northern President, New South Wales Division President, Victoria Division Director, Community Foundation Territory Division Executive Director, Beerworth & Partners Consultant, Allens Arthur Robinson; Network; Director, Foster’s Group Ltd; Partner, Piper Alderman; Director, Limited; Director, Hayward Industries Director, CGNU Australia Holdings Ltd; Director, Nufarm Ltd; Director, Santos Australian Submarine Corporation Pty (Australia) Pty Ltd; Hayward Pool Director, Datafast Telecommunications Ltd; Director, Were Securities Ltd; Ltd; Director, Duck Island Pty Ltd; Products (Australia) Pty Ltd. Ltd; Director, Djerriwarrh Investments Member, Financial Reporting Council. Director, Mordinyabe Pty Ltd; Director, Ltd; Director, Paperlinx Ltd. South Australian Art Gallery Foundation; Director, St Marks College affiliated with the University of Adelaide.
Mr Gerald Loughran FAICD Mr Peter Mansell FAICD Mr John Massey FAICD Mr Alan Morrison FAICD President, Tasmania Division President, Western Australia Division President, Queensland Division President, ACT Division Chairman, Crisp Bros/Haywards Pty Ltd; Partner, Freehills; Chairman, Hartleys Chairman, AV Syntec Group Ltd; Chairman and Chief Executive, Chairman, Tasmania Community Fund; Limited; Director, AngloGold Group Chairman, Ventracor Ltd; Director, CLANMOR Holdings Pty Ltd; Deputy Deputy Chairman, Aurora Energy Pty Companies in Australia; Director, Australian Dairy Corporation; Director, Chairman, Energy Council of Australia; Ltd; Director, Webster Ltd. Bunnings Property Management Limited; Darling Downs Foods Ltd; Director, Executive Director, Sydney World Energy Director, West Australian Newspapers Kerwee Pastoral Group Companies; Congress. Holdings Ltd; Committee member, Curtin Director, Voxson Ltd. University of Technology.
7 State Division Reports
Goals of AICD Members of AICD are served by their State •Twelve briefings focused on topical issues division office which reports to the national such as technology, risk management, dual- office on the effective running of the division. listed companies, lobbying government Each division has a council of 10 representatives effectively, the demise of Enron, Attract and elected by members in the State. In addition to outsourcing, cybercrime, and diversity in being involved in division activities, the boardroom skills and thinking. Speakers at division council elects a division representative these briefings included Wendy McCarthy retain to the National Council, the governing body of AO, Alan Cameron AM, Carolyn Hewson, the organisation that sets the policy for AICD. and the Hon. Craig Knowles. members Reports on the performance of each division • Innovative luncheon and breakfast events during the past financial year follow. featured international speakers including the US change management expert, Daryl New South Wales keeps abreast of best Connor; Joseph Plumeri, Chairman of the practice Willis Group; Keith Whitson, Global Chief Executive Officer, HSBC; international A busy calender of events designed for our diplomat Richard Butler AM; and interna- 4 members contributed to another very successful tional best-selling author, Chin-Ning Chu. year for the New South Wales division. The These events have been complemented by Achievements towards this goal during division is AICD’s largest, representing 34 per luncheons involving national business 2001—2002 include: cent of the membership nationally and the leaders such as Peter Smedley, Chief number of new members increased during the Executive Officer of Mayne Group; • a record number of members of year by two per cent, bringing the total number Linda Nicholls, Chairman of Australia 16,365 as at 30 June 2002 of members to 5,650. Post; and professional company directors, Of the record number of 98 events for Nick Greiner AC and Dick Warburton. • major investment in the members, there were: In all, 3,835 attendees have supported membership database system •Twenty-two national core education 13 luncheons during the year. programs, and a record number of • Specific networking events such as the • development of a new website 13 Company Directors Courses. There has evenings for new members, cocktail enabling online access to been unprecedented demand for programs evenings, graduation evenings, and the on corporate governance-related topics. Christmas Long Lunch. membership applications, events Customised in-house workshops continue to and course bookings, publication grow in popularity with programs commis- To continue this level of service, we have orders. sioned by public listed companies, co- recruited two new team members during the operatives, associations, private companies, year. I thank our dedicated staff for their and government boards. enthusiasm, energy and commitment and • Sixteen seminars on areas such as acknowledge the continued support of our commercial negotiation, powerful speech members, sponsors, and the wider New South and presentations, executive coaching, Wales business community. mergers and acquisitions, and strategic financial skills. James Green FAICD President
Julie Curran MAICD New South Wales Division Manager [email protected] direct line: + 61 2 8248 6680
Mr Ashley Harris, Ms Pauline Green and Mr Tony Newton at the "Catch the Future" Company Directors Conference 2002.
The AICD management team as at 30 June 2002 from left to right (back row) Ian Mackay, Pauline Green, 8 Carey Cox, Rob Elliott, Julie Curran, Andrew Madry,Graeme Burgess, Sue Jackson (front row) Angela Downs, Len Robertshaw, Liz Jeffrey, John Hall, Louise Barnett, Clark Chui. AICD Annual Report
Victorian members seize education Director education reaches across Leading director honoured opportunities Queensland Elizabeth Nosworthy was awarded our Gold Medal Award 2001 for her outstanding contri- A leading program of director education, With a vast area to cover, the Queensland bution to directorship. Since becoming a full- delivered through Company Directors Courses, division set out to make its programs more time company director in 1995, Ms Nosworthy briefings, seminars, the leaders’ luncheons, and accessible to directors statewide. During the past has been elected to 12 boards. Her current new suburban and regional events, has brought financial year more than 20 events were positions include the chairmanship of Stanwell continued growth in membership. Total conducted in regional centres including the Corporation and Prime Infrastructure and membership increased by six per cent to 3,958 at Gold Coast, Toowoomba, Sunshine Coast, directorships at David Jones, GPT Management, the end of June 2002 with both new members Townsville, and Cairns. This initiative has Ventracor, and board membership of the and renewals showing a healthy upward trend. reaped rewards with growth in number of Queensland Treasury Corporation. In addition to running eight fully-subscribed members of six per cent and total number of I thank our committed staff of five, the Company Directors Courses, the division’s members of 2,301. generosity of our sponsors, and a division council program included: Meeting the needs of members was also the that endeavours to deliver director education • Eighteen directors’ briefings and twilight continuing motivation for hosting the weekend across the State. seminars. delivery of the Company Directors Course at the • Sixteen national education programs Sunshine Coast, Toowoomba, Townsville, John Massey FAICD including “The role of the chairman”, Cairns, and Gold Coast. This mode of presen- President “Fundamentals of financial statements”, and tation proved to be a very popular alternative to “Board, director and CEO assessment”. the ten-week tutorial program. Louise Barnett Aff AICD •A formal dinner with guest speaker It has been a busy financial year with the Queensland Division Manager His Excellency the Governor-General division hosting eight Company Directors [email protected] The Right Reverend Dr Peter Hollingworth Courses, and: direct line: + 61 7 3221 4325 AC OBE speaking on corporate governance. •Twenty-seven education programs with • Six new member evenings to cater for our particular demand for tailored in-house increasing membership. training programs on governance, fundamentals in financial statements, and International speakers sourced the duties and responsibilities of directors. Fifteen leaders’ luncheons were hosted in A new program, “Board reporting”, was Melbourne featuring such guest speakers as: Paul booked out within 10 days of its launch. Anderson, then Chief Executive Officer of • Seven “Queensland Business Stories” BHP Billiton; Richard McCormick, World including Peplin Biotech, Darling Downs President of the International Chamber of Bacon, Yellow Cabs, Technology One, Commerce; as well as Alfred Berkeley III, Jupiters, and Stahmann Farms. President and Chairman of the Nasdaq Stock •Ten briefings, including the “Value journey Market Inc. Panel discussion lunches were also breakfast series”, “Corporate governance well-received. The first titled, “The twenty-first and the associated risk management issues”, century board”, was hosted by Linda Nicholls, “Value chain improvements”, and “Putting Chairman of Australia Post and the second, a value on governance - directors' fees and “Improving corporate productivity”, was hosted shareholder expectation”. by Rod Maddock, a former Chief Economist of • Six “Bourse talk” luncheons involving the Business Council of Australia. speakers such as The Hon Joe Hockey MP, The division also played a significant the-then Minister for Financial Services advocacy role in representing the views of and Regulation; John McFarlane of ANZ; members against the proposed Crimes Ted Kunkel of Foster’s Group; David (Workplace Death and Serious Injuries) Bill Knott of the Australian Securities and 2001 that was defeated in the Victorian Upper Investments Commission; Phillip Bullock of House. IBM Australia NZ Ltd; and Matthew Perrin In all, the division ran 84 courses and events of Billabong. Attracting culminating in the busiest year in its history, as • Eight discussion forums hosted in members well as the strongest financially. I would like to Toowoomba, Mackay, Cairns, Townsville, 4 thank the division council for its support during and Brisbane, attracted great interest. the year, our committed staff, the division’s These round-table sessions encourage sponsors, and the Victorian director and business members to discuss the challenges that they community that have contributed to this face and to seek advice from the more excellent result. experienced directors present. • Six networking events for members across Andrew Guy FAICD Queensland. President
Carey Cox FAICD Victoria Division Manager [email protected] direct line: + 61 3 9211 9281
Emma Carpenter, Administrative Assistant, Queensland Division Office 9 Goals of AICD Western Australia—stepping ahead in Serving members in South Australia and director education Northern Territory
From its Rottnest Forum to its AGM The South Australia and Northern Territory Be a successful Sundowner, the Western Australia division division is managed by a team of four staff in stands out for the individuality of its events and AICD’s Adelaide office. Support for Northern advocate for for its strong growth in members of 7.3 per cent. Territory members comes from the Northern The division achieved its highest level of Territory Committee, based in Darwin, reporting membership this year with 1,598 members to the South Australia and Northern Territory directors’ issues which reflects the success of its activities. Division Council in Adelaide. Forty events were conducted during the financial year including: Tailored director education programs • The annual Rottnest Forum, involving a grow in South Australia flotilla of boats transporting 275 members to The number of members has grown steadily at Rottnest Island to hear Rod Macqueen two per cent, with a total of 1,392 members in speak on “One step ahead—on the field and South Australia at the end of the financial year. 5 in the boardroom”. Thirty-five events were hosted for members • The fifth Outback Forum offering members during the year. A listing of those events follows. Achievements towards this goal during the opportunity to visit Port Hedland for a •There was strong demand for the Company 2001—2002 include: personal tour of BHP Billiton’s operations in Directors Course with the four courses the north-west of Western Australia. booked out. • forty submissions, compiled by AICD • The annual “Industry on Location”, a tour • Seven core national education courses were committees, presented to of the Peters & Brownes Group operations offered to members. government and government at Balcatta. • In-house tailored education courses were authorities •Ten national core education programs, and popular within the not-for-profit and three tailored programs delivered in-house. private sectors with five courses held during • policy positions on sustainability, • Three Company Directors Course tutorial the year. We also sought to assist directors intangible assets, and the programs. in country regions by conducting training requisitioning of company meetings, • Support for a Company Directors Course sessions in rural centres. endorsed by National Council. residential program run by the national • The success of the luncheon with guest office. speaker Richard Butler AM in late 2001, •Two rural Company Directors Course spawned the introduction of a “Thought residential programs conducted for the Leader Luncheon Series” in early 2002. Department of Agriculture. •A series of four “Bourse talk” luncheons •Ten luncheon events, four directors’ offered members the opportunity to hear a briefings, and the annual seminar conducted number of Australia’s business leaders jointly with the Business Law Section of the including: John Ellice-Flint, Chief Law Council of Australia. Executive Officer of Santos Ltd; Les Owen, Managing Director of AXA Ltd; Keith Professionalism in directorship Lambert, Managing Director of Southcorp recognised Ltd; and Allan Moss, Managing Director of At our annual Winter Dinner, managing Macquarie Bank Ltd. director of Wesfarmers, Michael Chaney, was recognised for his professionalism in directorship Great fun was had by all at an evening of wine and awarded the WA Gold Medal Award 2001. and jazz at the South Australia Annual Dinner Other networking opportunities were in the new National Wine Centre with guest provided through our AGM Sundowner speaker, Sir James Hardy OBE. function, offered on a complimentary basis to all Former president Richard Ryan AO stood members, and the “Xmas Sundowner” function. down as Division President after three years in Western Director, our quarterly newsletter, office. We extend our sincere thanks to Richard continues to inform members of coming events, for his effort and commitment in developing and and division and national office activities. growing the profile of AICD in both South This has been a most rewarding year due to Australia and the Northern Territory. the invaluable contributions received from supportive division council members, sponsors, Dramatic increase in membership in our dedicated staff, and the continued support Northern Territory received from members. An increasing presence through more educational courses in the Northern Territory Peter Mansell FAICD has brought a dramatic 23 per cent increase in President members, bringing a total of 142 members. In addition to the usual tutorial program, an Sue Pepperell Aff AICD additional intensive Company Directors Course Western Australia Division Manager was held in Darwin, both were fully booked. Mr John Hall FAICD, Chief Executive Officer, [email protected] Two national core education programs, “The at the "Catch the Future" Company Directors direct line: + 61 8 9322 7400 role of the chairman” and the “Skills update”, Conference 2002. were also well supported. The Annual Dinner held in Darwin in April offered the new Chief Minister of the Northern Territory, The Hon Clare Martin, the opportunity to address the 185 guests on the government’s vision for business. 10 AICD Annual Report
There was also a change in leadership of the The division welcomed the opportunity of Award for service to business Northern Territory committee with Peter chairing AICD’s sustainability committee task It was with great pleasure that the division Plummer retiring as chairman. We thank Peter force on climate change and of assisting in recognised AICD life membership and the for his support in growing AICD in the Territory developing policies in the area. leadership qualities and service to the business and we wish Deborah Fracaro well as the new By way of community service the division community of Ron Banks AM. The Gold Medal chairman. delivered complimentary briefings and Award was presented to Mr Banks by the State I look forward to the continuing support of workshops on governance to organisations such Governor, the Hon. Sir Guy Green AC KBE, at our hardworking staff, active Division Council, as the TPI Association, Aged Care Facilities, our Gold Medal Dinner. and loyal sponsors in the new financial year. and Australian Sports Commission (ACT). We This year we formed an alliance with also participated in community-based leadership Women Tasmania, an organisation devoted to Charles Bagot MAICD programs for the not-for-profit sector. the advancement of women in business. Several President I thank our staff team for their commitment, of their members attended our training courses our sponsors for their support, and the division during the year. We look forward to continuing Angela Downs Aff AICD council for their direction. the association. In northern Tasmania, a joint South Australia and Northern Territory Division Manager association with the Launceston Chamber of [email protected] Alan Morrison FAICD Commerce has brought valuable exchange of direct line: + 61 8 8211 8001 President information for both organisations. Exchange of information continues to take Graeme Burgess MBE MAICD place through our quarterly newsletter which Australian Capital Territory facilitates Australian Capital Territory Division Manager informs members of State news and opinions education scholarship programs [email protected] and division events. direct line: + 61 2 6248 5954 Our division staff must be congratulated in Australia’s capital continues to supply a steady assessing and meeting the needs of members and growth in demand for best practice in in continuing the momentum for new alliances directorship with a 10 per cent increase in New alliances bring greater exposure in and events for members. Thanks also to division membership growth experienced by the division, Tasmania councillors and our sponsors for their support. bringing a total of 534 members at the end of the financial year. New alliances with business associations and the Gerald Loughran FAICD Public and private sector interest in the success of our receptions for members has President Company Directors Course conducted by the brought steady growth of four per cent in the ACT division as a six-day non-residential number of members. The total number of Len Robertshaw MAICD continues to grow. In the past year we were members currently stands at 681. This Tasmania Division Manager pleased to: represents four per cent of the national total. lrobertshaw@companydirectors,com.au •Assist in facilitating the Young People in The division’s headquarters are based in Hobart direct line: + 61 3 6224 0559 Rural Industries Initiative of the with one part-time staff member based in Department of Agriculture, Fisheries and Launceston to serve members in that region. Forestry. The initiative provided Company Twenty-one events were held during the Directors Course scholarships to 14 young year, the highlights included: people from rural and regional Australia. A • Four fully-booked Company Directors similar program for young rural leaders has Courses held as five-day non-residential recently been announced by the department courses. and we look forward to assisting national •Nine national core education programs office with its implementation. including a record number of five “New • Host six national core education programs director” programs. All courses were fully and five programs tailored for in-house booked and demand appears to be growing. presentation. • Five luncheon events with the speakers Advocacy • Co-host the “White Pages Luncheon Series” David Knott, Chairman of ASIC and Saul with the Canberra Business Council. This Eslake, Chief Economist of ANZ Bank 5 popular information and networking attracting the largest followings in Hobart initiative has involved speakers such as Dr and Launceston, respectively. Garrett, Chief Executive Officer of CSIRO; • Three member receptions drawing more Malcolm Crompton, the Privacy than 100 guests on each occasion. Commissioner; Ross McDiarmid, Chief Executive Officer of Canberra Tourism and Events Corporation; and Mark Patterson, Secretary of Department of Industry Tourism and Resources. • Co-host breakfast functions with Australian Business Limited on small business topics.
Manu Ramachandran, Account Executive, Company Director journal, National Office 11 Corporate Governance
Goals of AICD he governance of Australian Institute of Audit Committee T Company Directors is founded on various The role of the Audit Committee is documented Be a financially charters. The key charters are those for in a charter which is approved by National National Council, the Division Councils, the Council. The committee reviews and monitors Audit Committee, the Human Resources and the compliance program and financial systems sound, efficient, Remuneration Committee, the National operating in AICD providing a direct link Education Committee, and the policy between National Council and the external committees. auditors and management. and caring The committee ensures there are procedures National Council in place to safeguard AICD’s assets and interests, organisation The National Council is the board of directors including accounting, financial reporting, and governing body of AICD. Its powers are set expenditure and investment policies, in by the Articles of Association. compliance with applicable laws, regulations, standards, and best practice guidelines. It also Composition of National Council oversees the continuing independence of the The National Council consists of 11 non- external auditor. 6 The Audit Committee comprises three executive directors being, the National members appointed by the National Council Achievements towards this goal during President, two National Vice-Presidents, the and is chaired by the National Treasurer. 2001—2002 include: National Treasurer, and seven representatives, one from each division. All directors are Members of the committee over the past members of AICD and do not receive any financial year were the National Treasurer • membership funds stand at remuneration for their services to AICD. No Mr Graeme McGregor AO FAICD, National $5,080,079 as at 30 June 2002 office bearer may be in office for more than eight Councillor Mr John Massey FAICD, and consecutive years and no President, or Vice- Mr Robert Graham FAICD, a recently retired • a new compliance program President, may hold office for more than three National Councillor. developed and to be implemented in consecutive years. Six meetings of the committee were held the next financial year during the year addressing the change of auditors Role of National Council from Andersen to Ernst & Young, the • introduction of “The Employee The National Council is responsible for the development of the new AICD compliance Support System” providing an AICD overall corporate governance of AICD. This programme, the review of AICD privacy policy, the review of AICD insurance arrangements, employee manual online and includes setting and periodically reviewing the and matters relating to financial reporting and personal advice with a consultant on strategic direction, making policy decisions on behalf of Australian directors, and monitoring performance of the entity. call. the achievements and financial performance of the organisation. Human Resources and Remuneration To assist in the performance of their duties, Committee the directors may seek independent professional Monitoring of the human resources, staff advice, at AICD’s expense. remuneration and benefits, and staff policies and Seven meetings of the National Council procedures of AICD is undertaken by have been held during the fiscal year. The the Human Resources and Remuneration National President acts as chairman. Committee. Four council members sit on the committee and the National President acts as Division Councils chairperson. Its members during the past financial year were: National President, The role of the Division Council is to Miss Elizabeth Alexander AM FAICD; National administer the divisions. In most States and Vice-Presidents, Mr Don Mercer FAICD and Terroritories the divisions consist of 10 elected Dr Ken Moss FAICD; National Treasurer, members who elect a President, Deputy Mr Graeme McGregor AO FAICD; and former President, and a Treasurer/Secretary. As a Council member Mr Robert Graham FAICD. primary interface with members, the Division Mr Graham retired from the committee on Council is involved in the organisation of State 29 October 2001. Two meetings were convened activities and communicates member views on during the year at which matters such as the new policy and education initiatives through the Employee Support System and remuneration Divisional Representative who also sits on were discussed. National Council. National Education Committee Committees The role of the National Education Committee (NEC) is to ensure the relevance and quality of To improve its efficiency, National Council the Company Directors Course and other core delegates roles to various committees and education programs is maintained. It is taskforces. Those committees include the Audit constituted by experienced directors, academics, Committee, the Human Resources and and consultants. The committee reports and Remuneration Committee, the National makes recommendations to National Council. Education Committee, the Company Directors The position of chairman is reviewed annually Conference Commitee, and the four policy and during the past financial year the position committees—law, accounting and financial was held by Mr John Dugas MAICD. advisory, taxation and economics, and sustain- ability. National Council annually reviews and ratifies the terms of reference of these committees and their membership.
12 AICD Annual Report
Division Councils
Company Directors Course Assessment Australian Capital Territory Division Tasmania Division Council Review Committee Council As a subcommittee of the NEC, the Company Mr Gerald Loughran FAICD, President Directors Course Assessment Review Mr Alan Morrison FAICD, President Committee periodically reviews and updates the Ms Eva Plachta MAICD, Vice-President assessment component of the Company Mr James Morris FAICD, Vice-President Mr William Downie FAICD* Directors Course and makes recommendations Mr Richard Bialkowski FAICD Mr Clyde Eastaugh MAICD to the NEC on the assessment process, and Mr Ross Cottrill FAICD Mr Miles Hampton FAICD materials. Directors, tutors, examiners, and Ms June Grainger FAICD Mr Ashley Harris FAICD AICD members who have recently completed Dr Dick Henley FAICD Mr Ken Lawrie FAICD the Company Directors Course sit on the Mr Derek Lark FAICD* Mr Graham Marshall FAICD committee. The position of chairman is Ms Noela L‘Estrange FAICD Mr Mick Morris FAICD reviewed annually and during the past financial Mr Denis O’Brien MAICD* Mr Russell Paterson FAICD year the position was held by Mr John Dugas Ms Carolyn Riley GAICD Mr Val Smith FAICD* MAICD. Ms Deborah Robinson FAICD Mr Paul Swifte FAICD Dr Alison Turner FAICD * Retired during the year Company Directors Conference * Retired during the year Committee Victoria Division Council The continuing relevance of the Company New South Wales Division Council Directors Conference program is monitored by Mr Andrew Guy FAICD, President the Company Directors Conference Committee. Mr James Green FAICD, President Directors, academics, and business leaders sit on Mr Glenn Barnes FAICD the committee. The chairman during the past Mr Malcolm Irving AM FAICD, Vice-President Mr Cliff Breeze FAICD* financial year was Ms Linda Nicholls FAICD. Mr Hugh Anderson FAICD, Treasurer Mr Laurie Cox AO FAICD Mr J Gillis Broinowski FAICD Ms Patricia Cross FAICD Policy Committees Mr Gavin Campbell FAICD* Mrs Marina Darling MAICD The four policy committees—law, accounting Mr Robert Chaloner FAICD* Commissioner Douglas Davis MAICD and financial advisory, taxation and economics, Ms Megan Alexander Cornelius AM FAICD Mr Russell Fynmore AO FAICD* and sustainability—develop policy and best Mr Geoff De Lacy FAICD Mr Graham Kraehe MAICD practice guidelines on director-related issues Mr Robert Graham FAICD* Mr Charles Macek FAICD arising in their respective fields. A large part of Mr Rob Hines MAICD* Mr David Stewart FAICD committee time is spent on preparing Prof Dame Leonie Kramer AC DBE FAICD* Mr Rob Wylie MAICD submissions in response to various government Dr Helen Nugent FAICD* * Retired during the year inquiries. Policies, guidelines, and submissions Ms Anne Riches FAICD developed by the committees are then ratified by Ms Ouma Sananikone MAICD Western Australia Division Council National Council. Dr Paul Scully-Power DSM DSC FRAeS Committee or taskforce meetings are held FAICD Mr Peter Mansell FAICD, President on a monthly basis and the position of chairman Mr Brian Wilson FAICD is reviewed by National Council on an annual * Retired during the year Mr Terry Budge FAICD, Vice-President basis. Committee chairmen during the past Ms Fiona Harris FAICD, Treasurer financial year were Professor Bob Baxt FAICD of Queensland Division Council Ms Robyn Ahern MAICD the law committee, Mr Michael Coleman Prof. Ian Constable FAICD FAICD of the accounting and financial advisory Mr John Massey FAICD, President Mr David Eiszele FAICD committee, Mr Simon Marks-Isaacs FAICD of Dr Jim Gill FAICD* the taxation and economics committee, and Dr Jane Wilson FAICD, Vice-President Mr Mike Horabin FAICD Dr Keith Suter FAICD of the sustainability Mr Ian Fraser MAICD, Treasurer Mr Tony HowarthMAICD committee. Mr Rob Hines MAICD Mr Malcolm Macpherson Mr Ben Kehoe FAICD FAICD Adherence to ethical standards Mr Martin Kriewaldt FAICD Mr Tim Moore FAICD Mr John Lister MAICD * Retired during the year All members abide by the principles contained Ms Marian Micalizzi MAICD in the AICD publication, Code of Conduct. This Ms Susan Rix GAICD code for directors was introduced in 1996 to Mr John Story FAICD promote the highest ethical and professional Mr Greg Swindon FAICD* standards in directorship of Australian * Retired during the year Caring companies and other bodies. 6 National Council has adopted the code and South Australia and Northern Territory all members follow the principles set out in the code. Those principles call for honesty, due care Mr Charles Bagot MAICD, President and diligence, and adherence to the spirit, as well as the letter of the law. Mr Sam Walters FAICD, Vice-President Members involved in governing AICD are Mr Nicholas Begakis AM FAICD* aware that their core responsibility is to act in Mr Morris Crosby GAICD the interests of members. Mr Brian Guthleben FAICD A similar code of conduct statement titled, Ms Virginia Hickey FAICD AICD Values, is followed by AICD staff. This Mr Adam Keats GAICD statement sets out 10 core values outlining the Ms Alice McCleary FAICD staff’s commitment to members, team work, Mr Ray Michell FAICD excellence, sound financial management, Mr Richard Ryan AO FAICD recognition of achievement, and enjoyment of Mr Richard Thomson FAICD their role. Mr Stephen Young FAICD* Judith Winn, Membership & Education Manager, * Retired during the year Queensland Division Office 13 AICD Committees
Australian Institute of Company Sustainability Committee Company Directors Course Directors sincerely thanks the Assessment Review Committee following members for their time in Chairman developing government submissions Dr Keith Suter FAICD Chairman and policy statements or quality Mr John Dugas MAICD education courses and publications. Ms Sybella Blencowe MAICD Mr Graeme Day MAICD Mr Geoff Allanson FAICD Accounting and Financial Mr Peter Emery FAICD Mr Richard Dixon-Hughes FAICD Advisory Committee Mr Paul Flanagan GAICD Mr Martin Donnelly GAICD Mr Robert Foster MAICD* Ms Carol Gilchrist GAICD Chairman Mr Garry Fowler FAICD Mr Richard Harris FAICD Mr Michael Coleman FAICD Dr Richard Henley FAICD Mr Luke Heath FAICD Mr John Kenny MAICD Mr Mervyn Hill FAICD Deputy Chairman Mr Kenneth Lawrie FAICD Ms Susan Lenehan FAICD Mr Mark Johnson FAICD Mr John Lister MAICD Mr Gavin May GAICD Mr Damien Lynch FAICD* Ms Bronwyn Morgan FAICD Mr Kevin Adams FAICD Mr Malcolm Macpherson FAICD Mrs Alice Oppen FAICD Miss Elizabeth Alexander AM FAICD Mr Duncan McGregor MAICD Ms Anne Riches FAICD Mr John Allpass FAICD Ms Ouma Sananikone MAICD Mr David Shearwood GAICD Mr James Beecher FAICD Dr Alison Turner FAICD Mr Craig Tapper FAICD Mr Peter Cadwallader FAICD Mr Hugh Wyndham Aff AICD Mr Gavin Campbell FAICD Company Directors Conference Mr Geoff De Lacy FAICD Taxation and Economics Committee Mr Jim Dixon Committee Mr Lloyd Draney FAICD Chairman Mr Stuart Grant FAICD Chairman Ms Linda Nicholls FAICD Mr Frank Haly AO FAICD* Mr Simon Marks-Isaacs FAICD Mr Stephen Harrison AO FAICD Mr Peter Carre MAICD Mr Mike Kooymans** Miss Elizabeth Alexander AM FAICD Mr Michael Coleman FAICD Mr John Lamble AO FAICD Mr Hugh Anderson FAICD Mr Bryan Ericson MAICD Ms Marian Micalizzi MAICD Mr Philip Anderson Ms Elizabeth Johnstone* Ms Susan Oldmeadow-Hall Aff AICD Mr Bill Beerworth FAICD Mr John Massey FAICD* Mr Russell Philp MAICD Mr Richard Bialkowski FAICD Mr David Pumphrey MAICD Ms Eva Plachta MAICD Mr Terry Budge FAICD* Prof. Michael Vitale MAICD Mr Tom Pockett Mr Ross Cottrill FAICD Mr Bruce Porter Mr Ashley Harris FAICD *denotes retired during the year Mr Keith Reilly Mr Stephen Hopley **denotes ex officio members of the committee Mr Antony Robb FAICD Mr Martin Kriewaldt FAICD Mr James Service AM FAICD Mr Geoff Lehmann Ms Ivy Loh Aff AICD Law Committee Ms Alice McCleary FAICD Ms Glenda Nixon FAICD Chairman Mr David Stewart FAICD* Prof Bob Baxt FAICD Ms Suit Fun Tham* Dr Neil Warren Mr Charles Bagot MAICD Mr Bill Beerworth FAICD Remuneration Task Force Mr Tom Bostock FAICD Mr Quentin Digby MAICD Chairman Prof. John Farrar Dr Ken Moss FAICD Mr Ian Harper AM FAICD Mr Rob Heferen** Mr Charles Bagot MAICD Mr Tony Hulett Mr John Colvin FAICD Mr Stephen Ipp Mr David Crawford FAICD Prof. Dimity Kingsford-Smith Mr John Egan FAICD Mr Bill Koeck MAICD Mr Peter Griffin FAICD Mr Michael Lishman MAICD Mr Charles Macek FAICD Mr Andrew Lumsden MAICD Ms Anne Riches FAICD Mr Peter Mansell FAICD Mr Chris Thomas FAICD Dr Ian McEwin MAICD Mr Ben McLaughlin MAICD National Education Committee Mr Alan Morrison FAICD Prof. Ian Ramsay Chairman Mr Andrew Ray Mr John Dugas MAICD Ms Carolyn Riley GAICD Mr Peter Shaw MAICD Mr Bill Bickford FAICD Dr Geof Stapledon Mrs Kate Costello FAICD Mr John Story FAICD Mr Barry Hicks Mr Paul Swifte FAICD Mr Mike Horabin FAICD Mr Brian Wilson FAICD Prof. Geoff Kiel FAICD Mr Colin Wise FAICD Ms Bronwyn Morgan FAICD Mrs Alice Oppen FAICD Ms Anne Riches FAICD Prof. Peter Sheldrake FAICD
14 AICD Annual Report
Financial Report for the year ended 30 June 2002
Independent Audit Report 16
Directors’ Report 16
Statement of Financial Position 18
Statement of Financial Performance 18
Statement of Cash Flows 18
Notes to the Financial Statements 19
1. Summary of accounting policies 19 2. Net profit 20 3. Receivables 20 4. Other financial assets 20 5. Inventories 20 6. Other assets 20 7. Plant and equipment 20 8. Payables (current) 21 9. Interest-bearing liabilities (current) 21 10. Other provisions (current) 21 11. Other liabilities (current) 21 12. Other provisions (non-current) 21 13. Members’ funds 21 14. Retained profits 21 15. Commitments under non-cancellable operating leases 21 16. Remuneration of officers 21 17. Remuneration of auditors 21 18. Finance lease commitments 22 19. Related party disclosures 22 20. Financial reporting by segments 22 21. Notes to the statement of cash flows 22 22. Financial instruments 22 23. Employee entitlements 23 24. Contingent liabilities 23
Directors’ Declaration 24
15 Independent Audit Report Directors’ Report
To the members of Australian Institute of Company Directors The National Councillors (the directors) of Australian Institute of Company Directors (AICD) submit their report in respect of the financial year ended 30 Scope June 2002.
We have audited the financial report of Australian Institute of Company Directors Directors for the financial year ended 30 June 2002, as set out on pages 18 to 23. The company’s directors are responsible for the financial report. We have The names of the directors in office during or since the end of the financial year conducted an independent audit of the financial report in order to express an are: opinion on it to the members of the company. Ms Elizabeth Alexander AM FAICD National President Our audit has been conducted in accordance with Australian Auditing Dr Kenneth Moss FAICD National Vice President Standards to provide reasonable assurance whether the financial report is free Mr Donald Mercer FAICD National Vice President of material misstatement. Our procedures included examination, on a test basis, Mr Graeme McGregor AO FAICD National Treasurer of evidence supporting the amounts and other disclosures in the financial Mr Charles Neville Bagot MAICD (appointed 29.10.2001) report, and the evaluation of accounting policies and significant accounting Mr Clifford Breeze FAICD (retired 16.10.2001) estimates. These procedures have been undertaken to form an opinion whether, Mr Robert Eyton Chaloner FAICD (appointed 29.10.2001, retired 25.02.2002) in all material respects, the financial report is presented fairly in accordance Dr James Gill FAICD (retired 24.09.2001) with Accounting Standards, other mandatory professional reporting Mr Robert Graham FAICD (retired 29.10.2001) requirements and statutory requirements in Australia, so as to present a view Mr Maxwell James Green FAICD (appointed 25.02.2002) which is consistent with our understanding of the company’s financial position Mr Andrew Frank Guy FAICD (appointed 16.10.2001) and performance as represented by results of its operations and its cash flows. Mr Gerald Norman Loughran FAICD (appointed 01.10.2001) Mr Peter John Mansell FAICD (appointed 27.09.2001) The audit opinion expressed in this report has been formed on the above basis. Mr John Massey FAICD (appointed 30.10.2000) Mr Alan Morrison FAICD (appointed 30.10.2000) Audit opinion Mr Richard Ryan AO FAICD (retired 29.10.2001) Mr Valentine Roy Smith FAICD (retired 01.10.2001) In our opinion, the financial report of Australian Institute of Company Directors is in accordance with: Details of directors are included on page 7 of the annual report.
(a) the Corporations Act 2001, including: Meeting attendances
(i) giving a true and fair view of the company’s financial position as at The meeting attendance of the National Councillors during the year 1 July 30 June 2002 and its performance for the year ended on that date; and 2001 to 30 June 2002 is noted below.
(ii) complying with Accounting Standards in Australia and the National Audit Remuneration Corporations Regulations 2001; and Councillor Council Committee Committee Ms Elizabeth Alexander AM 7 of 7 2 of 2 (b) other mandatory professional reporting requirements in Australia. Mr Don Mercer 7 of 7 1 of 2 Dr Ken Moss 5 of 7 2 of 2 Mr Graeme McGregor AO 5 of 7 6 of 6 2 of 2 Mr Cliff Breeze 1 2 of 2 Mr Andrew Guy 2 5 of 5 Mr Jim Gill3 2 of 2 Mr Robert Graham 2 of 24 6 of 6 1 of 14 Ernst & Young Mr John Massey 7 of 7 6 of 6 Chartered Accountants Mr Alan Morrison 7 of 7 Mr Richard Ryan AO 5 1 of 2 Mr Valentine Smith6 1 of 2 Mr Gerald Loughran7 4 of 5 Mr Peter Mansell 8 5 of 5 Mr Robert Chaloner 9 3 of 3 Karen Ray Mr Charles Bagot 10 5 of 5 Partner Mr James Green 11 2 of 2
Sydney, 12 September 2002 1. Retired 16.10.01, 2. Appointed 16.10.01, 3. Retired 24.09.01, 4. Retired 29.10.01, 5. Retired 29.10.01, 6. Retired 01.10.01, 7. Appointed 01.10.01, 8. Appointed 27.09.01, 9. Retired 25.02.02, 10. Appointed 29.10.01, 11. Appointed 25.02.02
Principal activities
The principal activities of AICD, constituted through its National Office and seven divisions, during the financial year, were the conduct of educational activities including the Company Directors Course, 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. 16 AICD Annual Report
Financial results Likely developments and future results
The net amount of AICD’s profit for the financial year was $2,021,245. This There are no likely developments in the operations of AICD which would represents a significant increase on the 2001 result of $591,253. Australian affect the results of future operations. Institute of Company Directors is a company limited by guarantee and no Signed in accordance with a resolution of the directors made pursuant to dividends are payable. section 298(2) of the Corporations Act 2001.
Review of operations On behalf of the directors
A review of the operations of AICD during the financial year and the results of those operations is contained in the report by the President and Chief Executive Officer, contained on pages 2 and 3 of the annual report.
Significant changes in state of affairs E A Alexander AM FAICD National President During the financial year there was no significant change in the state of affairs of AICD.
Indemnification of officers and auditors
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, G W McGregor AO FAICD and all executive officers of the company and of any related body corporate, National Treasurer 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 Melbourne, 12 September 2002 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.
Directors’ and officers’ remuneration
The directors of the company are appointed on a honorary basis and as a result do not receive any remuneration either directly or indirectly from the company or any related party. No director can hold an interest in AICD as it is a company limited by guarantee. Each director, being a member, is liable to the extent of the guarantee given under the Memorandum and Articles of Association. No director of AICD has received or become entitled to receive a benefit during or since the end of the financial year because of a contract that the director or a firm of which the director is a member or an entity in which the director has a substantial financial interest made with the company or an entity that the company controlled, or a body corporate that was related to the company 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 and 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 AICD, the results of those operations, or the state of affairs of AICD in financial years after this financial year.
17 Statement of Financial Position Statement of Financial Performance At 30 June 2002 Year ended 30 June 2002
Notes 2002 2001 Notes 2002 2001
$$ $$ Current assets Revenue from ordinary activities Cash assets 22 445,653 1,123,954 - Sale of goods 2 265,114 310,856 Receivables 3 448,662 482,566 Other financial assets 4 7,421,128 4,352,152 Cost of sales 168,859 123,975 Inventories 5 102,604 107,037 Other assets 6 344,356 332,674 Gross profit from sale of goods 96,255 186,881 Total current assets 8,762,403 6,398,383 Revenue from ordinary activities - Provision of services Non-current assets Education, professional development, Plant and equipment 7 404,678 167,743 and events 8,649,152 6,677,307 Membership 5,377,259 4,807,237 Total non-current assets 404,678 167,743 Publishing 1,110,687 1,247,563 Projects 76,074 132,053 Total assets 9,167,081 6,566,126 2 15,213,172 12,864,160 Current liabilities Payables 8 1,662,513 1,547,731 - Other revenue 2 467,512 445,407 Interest bearing liabilities 9 - 93 Other provisions 10 386,004 237,597 Expenses from ordinary activities Other liabilities 11 1,822,379 1,544,422 Education, professional development, and events 5,912,231 5,308,704 Total current liabilities 3,870,896 3,329,843 Membership 1,919,979 1,358,441 Publishing 1,082,215 1,336,148 Non-current liabilities Administration 4,822,352 4,888,206 Other provisions 12 216,106 177,449 Other 18,917 13,696 Total non-current liabilities 216,106 177,449 13,755,694 12,905,195 Total liabilities 4,087,002 3,507,292 Net profit 2,021,245 591,253 Net assets 5,080,079 3,058,834
Members’ funds Retained profits 14 5,080,079 3,058,834 Statement of Cash Flows Total members’ funds 5,080,079 3,058,834 Year ended 30 June 2002
Notes 2002 2001
$$ Cash flows from operating activities
Receipts from activities and donors 15,654,186 13,449,347 Payments to suppliers and employees (12,574,189) (11,441,044) GST paid (641,002) (587,840) Interest received 313,834 253,123 Interest paid - (209)
Net cash provided by operating activities 21(b) 2,752,829 1,673,377
Cash flows from investing activities Payment for plant and equipment (362,061) (117,570) Proceeds from sale of plant and equipment - 4,545
Net cash used in investing activities (362,061) (113,025)
Cash flows from financing activities Repayment of lease principal (93) (2,676)
Net increase in cash held 2,390,675 1,557,676
The accompanying notes form an integral part of these Cash at the beginning of the financial year 5,476,106 3,918,430 statements of financial position, financial performance, Cash at the end of the and cash flows. financial year 21(a) 7,866,781 5,476,106
18 AICD Annual Report
Notes to the Financial Statements For the year ended 30 June 2002
1. Summary of accounting policies (f) Leased assets
Financial reporting framework Operating lease assets are not capitalised and rental payments are expensed in the period in which they are incurred. The financial statements have been prepared as a general purpose financial report which complies with the requirements of the Corporations Act 2001, (g) Recoverable amount of non-current assets Australian Accounting Standards and Urgent Issues Group Consensus Views. The financial statements have been prepared in accordance with the historic Non-current assets are written down to recoverable amount where the carrying cost convention and do not take account of changes in either the purchasing value of any non-current asset exceeds recoverable amount. In determining the power of the dollar or in the prices of specific assets. recoverable amount of non-current assets, the expected net cash flows have not been discounted to their present value. Significant accounting policies (h) Accounts payable Accounting policies are selected and applied in a manner which ensures that the resultant financial information satisfies the concepts of relevance and Trade payables and other accounts payable are recognised when the company reliability, thereby ensuring that the substance of the underlying transactions becomes obliged to make future payments resulting from purchases of goods and and other events is reported. The accounting policies used are consistent with services. those adopted in the previous year. (i) Provision for employee entitlements The following significant accounting policies have been adopted in the preparation and presentation of the financial report: Provision has been made in the financial statements for benefits accruing to employees in relation to annual leave and long service leave. No provision is (a) Depreciation made for non-vesting sick leave as the anticipated pattern of future sick leave taken indicates that accumulated non-vesting leave will never be paid. Depreciation is provided on plant and equipment and is calculated on a straight All on-costs, including payroll tax, workers’ compensation premiums, and line basis so as to write off the net cost of each asset during its useful economic fringe benefits tax are included in the determination of provisions. Annual life. Assessments of remaining useful economic lives are made on a regular basis leave and the current portion of long service leave and workers’ compensation for all assets. Leasehold improvements are depreciated over the period of the provisions are measured at their nominal amounts. lease or estimated useful life, whichever is the shorter, as follows. The measurement of the long term portion of long service leave at nominal value is a departure from AASB 1028 “Accounting for Employee Entitlements”. Life Method The directors are of the opinion that the estimates relating to the rate of Office furniture and equipment 2-6 years Straight line increase in employee wages and salary rates together with the uncertainty as to Leasehold improvements 6-7 years Straight line when the entitlements will be paid, are such that they do not justify the calculations for the value of the information provided and that in any event, (b) Inventories the bringing to account of this portion of long service leave at its nominal value will provide an estimate not materially different from that derived using the Inventories are valued at the lower of cost and net realisable value. Costs are present value basis of measurement. assigned to inventory on hand and on a first in first out basis. Employee bonuses are recognised in the financial year in which the performance related to the bonus occurred. (c) Income tax (j) Financial instruments Section 50 of the Income Tax Assessment Act 1997 provides that certain institutions will be exempt from income tax. Australian Institute of Company Financial instruments are included in assets. Directors falls specifically under Section 50-5 of the Act. Trade receivables are initially recorded at the amount of contracted proceeds. (d) Revenue recognition Provision for doubtful debts is recognised to the extent that recovery of the (i) Membership outstanding receivable balance is considered less than likely. A specific Annual membership subscription revenue is recognised on renewal date. provision is maintained for identified doubtful debts, and a general provision is (ii) Functions, education and professional development maintained in respect of receivables which are doubtful of recovery but which Revenue from functions, education, and professional development have not been specifically identified. activities are recognised when the function or course is held. (iii) Membership services and Company Director Revenue from the Company Director journal and other member publications are recognised on issue of the publication. (iv) Projects Revenue from projects is recognised when incurred. (v) Publications Revenue from publications is recognised at the time of sale.
(e) Unearned revenue
(i) Subscriptions in advance Membership subscription receipts attributable to renewals occurring in 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. Subscriptions are not refundable. (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. 19 Notes to the Financial Statements for the year ended 30 June 2002
2002 2001 2002 2001
$$ $$ 2. Net profit 4. Other financial assets
Profit from ordinary activities includes the following items of revenue and Short-term investments 7,421,128 4,352,152 expense: 5. Inventories Operating revenue Publications (at cost) 102,604 107,037 Revenue from core activities: Sale of goods 6. Other assets Publications 265,114 310,856 Accrued income 133,604 195,779 Provision of services Prepayments 210,752 136,895 Education, professional development, & events 8,649,152 6,677,307 Membership 5,377,259 4,807,237 Total other assets 344,356 332,674 Publishing 1,110,687 1,247,563 Projects 76,074 132,053 7. Plant and equipment
15,213,172 12,864,160 Plant and equipment at cost: Leasehold improvements Other revenue Cost Opening balance 75,660 73,708 Gross proceeds on sale of plant and equipment (a) - 4,545 Additions 157,861 1,952 Other income 153,678 187,739 Disposals (73,708) - Interest received 313,834 253,123 Closing balance 159,813 75,660 467,512 445,407 Accumulated amortisation Total operating revenue 15,945,798 13,620,423 Opening balance 74,094 33,941 Amortisation for the year 11,566 40,153 Profit from ordinary activities is after charging the following expenses: Disposals (73,923) -
Obsolete inventory 16,846 5,899 Closing balance 11,737 74,094
Depreciation and amortisation: Net book value 148,076 1,566 Plant and equipment - depreciation 100,923 122,236 - amortisation 11,566 42,399 Office furniture and equipment Operating lease rental expense: Cost - Premises 564,090 329,124 Opening balance 782,156 807,290 Finance leases: Additions 204,200 115,613 - Finance charge - 209 Disposals (220,608) (140,747) Transfers to provisions: - Long-service leave 126,944 61,721 Closing balance 765,748 782,156 - Annual leave 15,296 28,405 Bad and doubtful expense - 6,386 Accumulated depreciation Opening balance 615,979 630,378 Specific disclosure items above: Depreciation for the year 100,923 122,232 (a) Revenue from sale of plant and equipment - 4,545 Disposals (207,756) (136,631) Expense from sale of plant and equipment (12,637) (4,136) Closing balance 509,146 615,979 Gain/(loss) on sale or disposal of plant and equipment (12,637) 409 Net book value 256,602 166,177
3. Receivables Plant and equipment under lease: Cost Current: Opening balance - 8,975 Trade receivables 368,639 303,558 Provision for doubtful debts (6,000) (6,000) Closing balance - 8,975
362,639 297,558 Accumulated depreciation Opening balance - 6,731 Other receivables 86,023 185,008 Amortisation for the year - 2,244
Total receivables 448,662 482,566 Closing balance - 8,975
Net book value - -
Total plant and equipment, net 404,678 167,743
20 AICD Annual Report
Notes to the Financial Statements for the year ended 30 June 2002
2002 2001 2002 2001
$$ $$ 8. Payables (current) 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 Trade payables 462,212 135,011 with generally fixed rental payments and have inflation escalation clauses. Other creditors and accruals 1,200,301 1,412,720 A renewal option exists for one property for a period of three years that can be 1,662,513 1,547,731 exercised at the company’s discretion.
9. Interest-bearing liabilities (current) No operating leases contain restrictions on dividends or financing.
Secured: 16. Remuneration of officers Finance lease liabilities (note 18) - 93 Income of directors -93 The directors of the company are appointed on an honorary basis and as a result The implicit interest rate on the finance lease is 13.86%. The lease is secured do not receive any remuneration either directly or indirectly from the company by the assets leased. or any related party.
10. Other provisions (current) Income of executives
Employee entitlements: The number of executive officers whose total income for the year falls within Annual leave 268,991 202,103 the following bands, were: Long-service leave 117,013 28,726 2002 2001 Rent-free equalisation - 6,768 $ $ 100,000 - 109,999 - 1 386,004 237,597 120,000 - 129,999 3 4 130,000 - 139,999 2 1 11. Other liabilities (current) 140,000 - 149,999 1 1 150,000 - 159,999 1 - Income received in advance 1,660,074 1,379,759 210,000 - 219,999 - 1 Subscriptions in advance 162,305 164,663 330,000 - 339,999 1 -
1,822,379 1,544,422 The aggregate income of the executives referred to above: $1,270,348 $1,092,297 12. Other provisions (non-current) The above table includes bonus payments allocated in accordance with the Employee entitlements: policy set out in Note 1(i). Long-service leave 216,106 177,449 Income of executives comprises amounts paid or payable to executive officers domiciled in Australia, directly or indirectly, by the company or any related 216,106 177,449 party (but excluding amounts disclosed later in this note under ‘’retirement benefits’’) in connection with the management of the affairs of the entity or 13. Members’ funds economic entity, whether as executive officers or otherwise.
The use of the description “Members’ Funds” is a departure from the title 17. Remuneration of auditors “Contributed Equity” contained in the Corporations Act 2001. Members’ Funds more appropriately reflects the fact the company is a company limited by Amounts received, or due and receivable, for the audit of the financial report guarantee. 2002 2001 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 - Ernst & Young 14,500 - outstanding obligations of the company. At 30 June 2002, the number of - Andersen 9,500 24,300 members was 16,365 (2001: 15,687). 24,000 24,300 14. Retained profits Amounts received, or due and receivable by the auditor of other services Retained profits at the beginning of the - Ernst & Young financial year 3,058,834 2,467,581 Preparation of financial report 2,500 - Net profit 2,021,245 591,253 Compliance report (a) 11,200 - - Andersen Retained profits at the end of the financial year 5,080,079 3,058,834 Preparation of financial report - 2,500
15. Commitments under non-cancellable operating leases In addition to the amounts described above, the entity received sponsorship income for commercial events and advertising revenue from Ernst & Young of Premises: $41,364 and Andersen of $18,936, and the entity paid expenses for rent and Not later than 1 year 410,559 242,826 tutoring services to Ernst & Young of $41,085 and $568 to Andersen for Later than 1 year but not later than 5 years 469,223 141,090 tutoring services. All transactions were on normal arms length terms and conditions. 879,782 383,916 (a) The compliance report was completed by Ernst & Young prior to the integration with Andersen. 21 Notes to the Financial Statements for the year ended 30 June 2002
2002 2001 2002 2001
$$ $$ 18. Finance lease commitments 21. Notes to the Statement of Cash Flows
Office furniture and equipment: (a) Reconciliation of cash Not later than 1 year - 93 Later than 1 year but not later than 2 years - - 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 Minimum finance lease payments - 93 financial year as shown in the Statement of Cash Flows is reconciled to the Deduct future finance charges - - related items in the Statement of Financial Position as follows:
Finance lease liabilities -93Cash 445,653 1,123,954 Short-term investments 7,421,128 4,352,152 Included in accounts as: Interest-bearing liabilities 7,866,781 5,476,106 current (note 9) - 93 (b) Reconciliation of net cash provided by operating activities to net profit -93 Net profit 2,021,245 591,253 19. Related party disclosures Depreciation/amortisation of non-current assets 112,489 164,635 Gain/(loss) on sale of plant and equipment 12,637 (429) The directors of the company during all of the past two financial years (except as noted) were: Transfers to provisions: Provision for employee entitlements 193,832 122,314 Ms Elizabeth Alexander AM FAICD (appointed 25.11.1996) Rent-free equalisation - (8,290) Mr Richard Warburton FAICD (retired 30.10.2000) Dr Kenneth Moss FAICD (appointed 07.08.2000) Net cash provided by operating activities before changes in net assets and Mr Don Mercer FAICD (appointed 04.12.2000) liabilities 2,340,203 869,483 Mr Graeme McGregor AO FAICD (appointed 13.03.2000) Mr Clifford Breeze FAICD (retired 16.10.2001) Changes in net assets and liabilities Dr James Gill FAICD (retired 24.09.2001) (Increase)/decrease in: Mr Robert Graham FAICD (retired 29.10.2001) Current trade receivables (65,081) 233,944 Mr John Massey FAICD (appointed 30.10.2000) Current other receivables and prepayments 87,303 (112,807) Mr Alan Morrison FAICD (appointed 30.10.2000) Current inventories 4,433 (38,080) Mr Robert Nattey LVO FAICD (retired 30.10.2000) Mr Richard Ryan AO FAICD (retired 29.10.2001) Increase/(decrease) in: Mr Valentine Roy Smith FAICD (retired 01.10.2001) Current trade creditors 327,201 21,713 Mr Gregory Swindon FAICD (retired 30.10.2000) Other current creditors and accruals 65,538 699,124 Mr Charles Neville Bagot MAICD (appointed 29.10.2001) Other provisions (6,768) - Mr Maxwell James Green FAICD (appointed 25.02.2002) Mr Peter John Mansell FAICD (appointed 27.09.2001) 2,752,829 1,673,377 Mr Robert Eyton Chaloner FAICD (appointed 29.20.2001 / retired 25.02.2002) 22. Financial instruments Mr Andrew Frank Guy FAICD (appointed 16.10.2001) Mr Gerald Norman Loughran FAICD (appointed 01.10.2001) Terms and conditions of debtors
No director has personally received any financial benefit during the financial Australian Institute of Company Directors extends 30-day credit terms to year. Payments to any director-related entities are conducted on an arm’s length debtors generally, subject to compliance with the company credit policy. basis in the normal course of business and on commercial terms and conditions. The total amount paid during the financial year to a director-related entity Credit risk was $1,400. Credit risk refers to the risk that a counterparty will default on its contractual 20. Financial reporting by segments obligations resulting in financial loss to the company. The company has adopted the policy of only dealing with creditworthy counterparties as The company’s activities include conducting educational activities, publication appropriately credentialed as a means of mitigating the risk of financial losses of articles and statements of interest to directors, and consultation with and from defaults. submissions to government. The company operates in one geographical location, being Australia. 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. All of these assets and liabilities are of such a nature that they are not readily traded.
22 AICD Annual Report
Notes to the Financial Statements for the year ended 30 June 2002
Interest rate risk exposures
The following table summarises interest rate risk for the economic entity, together with effective interest rates as at balance date.
2002 Floating Fixed interest rate maturing in Non- Average interest rate interest 1 year or Over 1 to interest rate (a) less 5 years bearing Total Floating Fixed $$$$$%%
Financial assets Cash 445,653 - - - 445,653 3.70 Short-term bank deposits - 7,421,128 - - 7,421,128 5.07 Trade debtors - - - 368,639 368,639
445,653 7,421,128 - 368,639 8,235,420
Financial liabilities
Trade creditors - - - 462,212 462,212
---462,212 462,212
2001 Floating Fixed interest rate maturing in Non- Average interest rate interest 1 year or Over 1 to interest rate (a) less 5 years bearing Total Floating Fixed $$$$$%%
Financial assets
Cash 1,123,954 - - - 1,123,954 3.54 Short-term bank deposits - 4,352,152 - - 4,352,152 5.21 Trade debtors - - - 303,558 303,558
1,123,954 4,352,152 - 303,558 5,779,664
Financial liabilities
Trade creditors - - - 135,011 135,011 Finance lease liabilities - 93 - - 93 13.86
-93-135,011 135,104
(a) Floating interest rates represent the most recently determined rate applicable to the instrument at balance date.
23. Employee entitlements
2002 2001
The number of full-time equivalents employed as at 30 June are: 63 51
Aggregate employee entitlement liability (Refer to Notes 10 &12) 602,110 408,278
24. Contingent liabilities
The company has a bank guarantee in respect of leased property to the amount of $260,000 (2001: $Nil) at year-end.
23 Directors’ Declaration
The directors declare that:
a) 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 2002 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.
E A Alexander AM FAICD National President
G W McGregor AO FAICD National Treasurer
Melbourne, 12 September 2002
24 Sponsors
Australian Institute of Company Queensland Division Victoria Division Peters & Brownes Group Directors sincerely thanks the ABN AMRO Morgans Allens Arthur Robinson Plan B Financial Services Ltd following companies for their Alitek Andersen PricewaterhouseCoopers generous sponsorship of our State Allens Arthur Robinson Australian Corporate Governance Royal Automobile Club of WA (Inc) divisions and the Company Directors BDO Kendalls Berringer Blass Sons of Gwalia Ltd Conference 2002 during the past Blake Dawson Waldron Boyden Global Executive Search TRUDO financial year. Competitive Dynamics Chubb Insurance United Group Limited Corporate Renewal Coin Advisory Water Corporation Australian Capital Territory Corrs Chambers Westgarth Deacons Wesfarmers Limited Division Davidson Recruitment Deloitte Touche Tohmatsu Western Australian Government Madew Wines Deacons eTick Limited Railways Minter Ellison Lawyers Diners Club International Fuji Xerox Western Power Corporation Pacific Access Pty Ltd Ernst & Young Gantz Wiley Asia Pacific Woodside Energy Ltd PricewaterhouseCoopers Griffith University Grundig Dictation Machines Pty Ltd SMS Consulting Group Horwath Partnership InterBiz Company Directors JP Morgan IPI Conference 2002 New South Wales Division Jupiters Limited KPMG Allens Arthur Robinson KPMG Macpherson & Kelley Corporate Partners Aramis & Co Mercer Cullen Egan Dell Mallesons Stephen Jaques Blake Dawson Waldron Australian Spirit Sailing Metro Ford Masterpiece Diners Club International Company Pty Ltd Minter Ellison Lawyers Melbourne IT Heidrick & Struggles Aveda Peplin Biotech Ltd 90 East KPMG Baltimore Technologies Pty Ltd PRD Realty Novell Oracle Corporation Australia Bankers Trust PricewaterhouseCoopers Oakvale Capital Limited Qantas Airways Limited Becks QUT Faculty of Business PRO:NED Australia Pty Ltd BT Funds Management Limited School of Management QUT Reddin Partners Supporting Partners Business Catalyst International Stahmann Farms Roy Morgan Research Audi Australia Pty Ltd Suncorp Metway Ltd St George Bank BigStream Pty Limited Cafe Sydney The Harrington Partnership TATA Consultancy Services Heritage Fine Wines Centre for Professional Development The Harrington Partnership J.A. Wales Printers Pty Ltd Chief Marketing Officer Forum South Australia and Northern Unity Development Pty Ltd Suncorp Metway Limited Diners Club International Territory Division Waite Group Taylor Nelson Sofres Four Seasons Hotel Kronberger & Associates Waite InterSearch Fuji Xerox Australia Pty Limited - major annual sponsor William M Mercer Goss Right Management Consultants Vintage Cellars Grapefoodwine Restaurant - gold sponsor Hazelton Airlines Coopers Brewery Western Australia Division Heinz Wattie’s Australasia Henry Walker Eltin Alcoa World Alumina Australia Heritage Fine Wines Pty Ltd Woodstock Winery & Coterie AlintaGas Limited HSBC Bank Australia Limited - silver sponsor Allens Arthur Robinson Hyatt Hotel Canberra Andersen AlphaWest Pty Ltd Hyatt Hotels & Resorts Cridlands Lawyers (NT) Andersen IBM Australia Limited Defence Reserves Support Council Australia and New Zealand Banking J.A. Wales Printers Pty Ltd Deloitte Touche Tohmatsu (NT) Group Limited Jaguar Racing Department of Business, Industry, Australian Stock Exchange KPMG and Resource Development (NT) Bank of Western Australia Ltd Lilianfels Blue Mountains Ernst & Young Brambles Western Australia Macquarie Marketing Group Pty Ltd Finlaysons Bristile Ltd Minter Ellison Lawyers Halliburton KBR Burswood Limited Museum of Contemporary Art HomeStart Finance Clayton Utz National Gallery of Australia KPMG Clough Limited Neostrata Optus (NT) Commonwealth Bank of Australia 90 East Piper Alderman Co-operative Bulk Handling Limited Novell Pty Ltd PricewaterhouseCoopers Deloitte Touche Tohmatsu Oakvale Capital Ltd The Teleran Group Ernst & Young Pacific Access Pty Ltd Thomson Playford Freehills PricewaterhouseCoopers Hartleys PRO:NED Australia Pty Ltd Tasmania Division HBF Health Funds Inc Quay Bar Cafe Australia Post Henry Walker Eltin Contracting Recruitment Solutions Deloitte Touche Tohmatsu Pty Ltd Pictured on the back cover from the top left Sydney BridgeClimb Hotel Grand Chancellor Heytesbury Pty Ltd are staff members: Georgina Isbell, Sydney Glass Island Pty Ltd J Boag & Son Homestake Gold of Australia Limited Membership Executive and Kathryn Hudson, TATA Consultancy Services Searson Buck Jardine Lloyd Thompson Pty Ltd Senior Membership Executive, both of the The Australian Transend Networks JBWere NSW Division Office The Jordan Templeman Group John Coombes and Company Pty Ltd The Ready Group KPMG Thompson Legal Regulatory Mallesons Stephen Jaques TPI Asia Pacific Minter Ellison Lawyers Trademark Events National Australia Bank Ltd Printed on recycled stock Unity Development Pty Ltd Norgard Clohessy Vive Magazine Paterson Ord Minnett 25 Financial Report
AICD addresses
National Office Tasmania
Level 25, Australia Square Hobart 264-278 George Street PO Box 1090 Sydney NSW 2000 Sandy Bay Tas 7006 Telephone: 02 8248 6600 Telephone: 03 6224 0559 Facsimile: 02 8248 6633 Facsimile: 03 6223 1468 [email protected] [email protected]
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South Australia
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