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Ann
ual R
epor
t 20
06
Contents
Report from the Board 4-7
ABL State Chamber Milestones 8-9
Sydney Chamber of Commerce 10-11
Policy 12-15
International Trade 16-17
Workplace Management 18-21
Sales & Marketing 22-23
Defence Industry 24-25
Australian Business Foundation 26-27
Regions 28-37
Regional Offices 38
Organisational Structure 39
Honorary Life Governors 40
ABL State Chamber Councillors 40
2006 Financials 41
Annual Report 2006 ABL State Chamber 3
CORPORATE STATEMENT
PURPOSE& VALUES
For over a century and a quarter, ABL State Chamber has served businesses within NSW. The organisation has been steadfast in its service to thousands of businesses over these years: it has also experienced the inevitability of change dictated by competitive market forces and the increasingly global economy.
What remains the same, however, is ABL State Chamber’s Purpose – its ‘reason for being’ – which is to: Champion the cause, growth, prosperity and, in particular, the sustainability of business. Sustainability has become key to the continuity of businesses in Australia.
ABL State Chamber has its own challenge – to be relevant and credible to business – and this requires us to show businesses the importance of seeking external advice to improve the way they operate.
And to support businesses in NSW, the ACT, and beyond, our Vision is to be the best and most influential business support organisation. Our
recent merger with the State Chamber of Commerce has put us on a Mission to be member and customer driven, to show thought leadership, to employ Best Practice, to apply commercial discipline, and be voice of business.
But we cannot go anywhere without Values. We need to continue to demonstrate integrity, to build on the trust shown in the organisation by various stakeholders and to be honest and ethical in our everyday business practices.
Only then will we have the respect and recognition of others so that we can deliver on our commitments to all of our members, partners, customers and staff.
Now is the time to pursue vigorously a program which makes ABL State Chamber more relevant and credible to its stakeholders and customers.
It is time to show the motivation and courage to aggressively promote our professionalism and expertise,
to actively spread our influence, to consciously boost our revenue and to ultimately strengthen our brand – as we strive to become a great company to work for and do business with.
For more information about ABL State Chamber call 13 26 96
4 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 5
Membership grows by 4,000
4 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 5
Last financial year was one of significant change and achievement for ABL State Chamber. The organisation gained several high profile wins in the policy arena, formed an historic merger with the State Chamber of Commerce (NSW), and further spread its advocacy within the business community.
Over 30,000 businesses received membership entitlements and support from ABL State Chamber’s twelve offices across NSW and the ACT.
Membership grew from 26,000 in the previous year to over 30,000 in 2005/2006 – 5,500 full members and over 25,000 associate members.
Almost 16,000 members and clients attended the wide range of events on workplace relations, human resources, International Trade and business improvement.
The Workplace Advice Line handled over 25,000 telephone, fax and email enquiries
The Business Navigation Centre (Member Services 13 26 96), handled over 25,000 calls from members for services other than Workplace Advice.
There were close to 3,500 hits on ABL’s State Chamber’s website for wage rate schedules.
The number of strategic alliances increased to almost fifty partners, including an alliance with ANZ which includes an exclusive banking package launched to members in September 2006.
Member satisfaction rating: 90 percent of full members recommend ABL State Chamber to others and 85 percent select ABL State Chamber as their preferred business support organisation.
International Trade helped approximately 1,000 companies to better succeed offshore.
In February 2006, Australian Business Limited merged with the State Chamber of Commerce (NSW). The merger marked the start of a new era in the representation and provision of services to the business communities of NSW and ACT.
The former State Chamber has changed its name to Sydney Chamber of Commerce, going back to its historic roots in 1826. Its flagship initiative SydneyFirst has been well received by the Sydney business community as it
focuses on Sydney operating as a Global City.
Combining the former State Chamber’s local chamber network, CBD presence and corporate value proposition with ABL’s financial strength, wide range of services and regional membership has created one of the strongest organisations representing business in Australia and one of Australia’s most influential business associations.
The year saw some significant achievements in the policy arena, some after many years of lobbying. Wins included:
three percent tariff on imported inputs to manufacturing abolished
Important changes to Workplace Fatalities legislation
Business costs cut by more than $430 million through a 15 percent reduction in Workers Compensation premiums
NSW State Government recurrent expenditure cut, and infrastructure spending boosted
Superannuation Surcharge abolished
NSW’s Occupational Health and Safety (OHS) draft Bill which reflects many of ABL State Chamber’s recommendations.
REPORT FROM THE BOARD
STRONGERUNIFIED VOICE
KarenWilson(President)
KevinMacDonald(CEO)
6 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 7
In January 2006, ABL State Chamber unveiled KickStart NSW, a $3.5 billion plan to reduce NSW State Government spending, improve service delivery and cut employment taxes. It also recommended cuts to the Government’s planned payroll tax collection increases.
ABL State Chamber welcomed the commencement of WorkChoices in March 2006 as the most significant industrial reform in Australia in a decade. Working closely with Government and the Australian Chamber of Commerce and Industry (ACCI), ABL State Chamber ensured the legislation provided meaningful change for small businesses.
An extensive member awareness campaign was conducted to minimise transition costs and confusion and over 5,000 businesses participated in educational seminars throughout NSW and the ACT.
The NSW Coalition’s small business policy adopted almost
all of the recommendations in ABL State Chamber’s contribution to the NSW IPART Inquiry into red-tape. These spanned the amendment of the NSW OHS Act, the development of an Australia-wide uniform definition of wages for payroll tax, income tax and workers compensation liability and ensuring a consistent application of State regulations to reduce the burden on business.
A plan to reform GST distributions was presented by ABL State Chamber and VECCI to the Commonwealth Government in April 2006. It recommended that the Federal Government request the Productivity Commission review the current GST formula with a view to simplifying the way distributions are calculated and identifying distortions and areas of inefficiency or ineffectiveness
Australian Business Limited Apprenticeships Centre performed well, achieving a 4 percent revenue growth.
Three contract Regions were secured from the Australian Government in NSW for the period 2007-2009 financial year necessitating the opening of additional offices in Sydney and Western NSW.
Australian Business Lawyers continued to grow and was again recognised as amongst the best in its field, ranked equal second in the Fuji Xerox 2005 Australian Law Awards – Legal Personnel Employment. The specialisation and depth of resources provided by Australian Business Lawyers was invaluable in helping to guide ABL State Chamber members through the WorkChoices legislation.
During the year the OHS Unit successfully tendered for four WorkCover funded initiatives. Each year-long initiative will assist specific groups better understand and adopt key requirements from OHS and Workers Compensation legislation in NSW.
In 2005/2006 ABL State Chamber continued to be the
largest private sector provider of Austrade’s TradeStart program. During 2005 two new Export Hub offices, in Tweed Heads and Bega, were opened after winning an Austrade tender to expand the program.
ABL State Chamber’s International Trade team continued to work in partnership with clients to achieve commercial export outcomes across the globe. Highlights for the year included contracts awarded by the Thai and Chinese governments, market visits to South America and a series of high-profile exporting events.
The ability to maintain ABL State Chamber’s financial strength is crucial to our long term ability to provide quality services to members. Over the course of the year ABL State Chamber’s net assets increased from $313 million to $364 million. This is largely attributed to growth of our investment portfolio and the timely sale of the North Sydney office building, its capital gain
REPORT FROM THE BOARD
Phone/fax/email enquiries over 50,000
6 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 7
and investment of proceeds in a buoyant sharemarket.
OneABL, an internal program launched in 2004, continued its charter to improve communication and understanding across the organisation. The initiative included a work experience program enabling staff to work in other business units as part of their professional career development. These initiatives played, and will continue to play, a vital role in the successful merger of Australian Business Limited and State Chamber, helping to embrace the cultures of both organisations and engage staff.
2005/2006 saw the retirement of ABL State Chamber’s former Managing Director, Mark Bethwaite, David Michaelis concluded his term as President and the retirement of immediate Past President, Gillis Broinowski from the Board. We thank them for their outstanding contribution to the organisation and its members.
We welcomed four former
State Chamber Directors, Professor Trevor Cairney, Mary Jo Capps, David Gilbert and Jeremy Bingham to the Board of ABL State Chamber.
On behalf of the Board, we thank the Council, Regional and Advisory Councils, our members, associates and staff for their loyalty and commitment which has enabled ABL State Chamber to face new challenges, adapt and grow during the course of 2005/2006.
We look forward to another year of achievement in 2006/2007.
Karen WilsonPresident
Kevin MacDonaldCEO
Ian Pollard
David Michaelis
DavidGilbert
TrevorCairney
GrahameHutchinson
ChrisBayliss
Roger Hood
Ian Penfold(Deputy President)
Mary JoCapps
Supporting members and customers 10 new products
8 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 9
MILESTONES
Membership grew to over 30,000 in 2005/2006 – 5,500 full members and over 25,000 associate members.
Over 67,000 businesses, local Chambers, institutes and associations, primarily across NSW and the ACT, benefited from the organisation’s portfolio of services.
Over 15,900 business
professionals attended 227 events throughout NSW and the ACT, including 2,000 members participating in WorkChoices seminars.
The Workplace Advice Line handled over 25,000 telephone, fax and email enquiries.
The Business navigation Unit handled an additional
25,000 calls from members and customers with a range of non-workplace enquiries.
There were almost 3,500 hits on ABL’s State Chamber’s website for wage rate schedules.
The number of strategic alliances increased to almost fifty partners, including an alliance with ANZ Bank.
ABL State Chamber’s website was redesigned to include online member payments, events registrations and viewing of entitlements
A range of business improvement products were launched including OHS Basics, the Business Vitality range and two new websites, HR Advance and Pay Office Companion.
Member satisfaction rating: 90 percent of full members recommend ABL State Chamber to others and 85 percent select ABL State Chamber as their preferred business support organisation.
International Trade
In 2005 ABL State Chamber won the Austrade tender to expand the TradeStart program opening two new Export Hub offices in Tweed Heads and Bega. These Export Hubs are two of only eight across Australia. The TradeStart program has generated in excess of $65 million in export revenue for its clients since 2002.
ABL State Chamber worked with Austrade to showcase new Australian exporters at Singapore’s Food & Hotel Asia which attracted 35,000 trade visitors.
RELEVANCE& MEMBER FOCUS
8 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 9
In November 2005 ABL State Chamber was commissioned by China’s Guangdong Provincial government to organise the Australian Guangdong Business Conference, 1,900 delegates attended making it the largest China-related business event held in Sydney to date.
In late 2005 ABL State Chamber, Australia Chile Chamber of Commerce and Australia Brazil Chamber of Commerce organised a highly successful market visit to Brazil and Chile.
In June 2006 International Trade was awarded a contract from the Board of Investment Thailand to promote bi- lateral trade and investment in Thailand.
Australian Business Lawyers
In June 2005, Australian Business Lawyers was ranked equal second in the Fuji Xerox 2005 Australian Law Awards – Legal Personnel Employment.
Played a key role in helping to guide ABL State Chamber members through the WorkChoice legislation, developing handbooks,
conducting training workshops and hosting strategic reviews.
Australian Business Limited Apprenticeships Centre
Australian Business Limited Apprenticeships Centre achieved a four percent growth and improved its financial performance by 16 percent over the previous year.
Three contract Regions were secured for the provision of Apprenticeships Support Services for the next three years across the Illawarra and South East NSW, Western NSW and Sydney regions.
Influencing government policy
The strength of ABL State Chamber’s voice was felt across a range of Federal and State policy initiatives, successful outcomes included:
- The abolition of three percent tariff on imported inputs to manufacturing
- The amendment of Workplace Fatalities legislation
- A 15 percent reduction in Workers Compensation premiums
- The NSW State Government delivering on ABL State Chamber’s 2004/2005 Mid
Term Report Card to conduct a NSW Expenditure Review, boost infrastructure spending and reform GST distribution.
- The abolition of Superannuation Surcharge
ABL State Chamber continued its campaign to help business face the skills shortage crisis with the appointment of four Regional Industry Career Advisers funded by the Australian Government’s Career Advice Australia initiative.
In February 2006, ABL State Chamber lodged a submission recommending the overhaul of NSW’s Occupational Health and Safety laws.
In association with the Victorian Employers’ Chamber of Commerce and Industry (VECCI) and Commerce Queensland, ABL State Chamber successfully tendered
for a Government funded WorkChoices awareness program which involved the roll-out of workshops across NSW and the ACT.
In January 2006 ABL State Chamber unveiled KickStart NSW, a $3.5 billion plan to reduce NSW State Government spending, improve service delivery and cut employment taxes.
ABL State Chamber contributed to the NSW IPART Inquiry into reducing red-tape.
A plan to reform GST distributions was presented by ABL State Chamber and VECCI to the Commonwealth Government in April 2006.
ABL State Chamber participated in two projects to increase employer opportunities to engage with skilled migration and people with a disability.
227 events 15,900 businesses attend
WorkChoices program 2,000 participants
10 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 11
Pollies for Small Business 80 Parliamentarians put to work
NSW Premier, Morris Iemma, served coffee and washed dishes at Money Talks Café, Five Dock
Member for Lindsay, Jackie Kelly, dropped into Natli Enterprises Motorcycle Store before riding away to her next appointment
Speaker of the NSW Legislative Assembly, John Aquilina, showed his versatility at Baker’s Delight, Stanhope Village Shopping Centre
10 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 11
CORPORATESTRENGTH
SYDNEY CHAMBER OF COMMERCE
2005/2006 was a momentous year for the Chamber featuring the historic merger with Australian Business Limited in February 2006 and subsequent name change back to the Sydney Chamber of Commerce.
The name-change signalled a shift in focus for the Chamber with efforts now concentrated solely on shaping Sydney’s future as a leading and well-rounded global city via our new flagship initiative Sydney First, which has been in development throughout the financial year. The concept has been well received by the Sydney business community to date and was launched in July.
Sydney First has been specifically designed for corporations with a significant presence, interest or stake in metropolitan Sydney. More specifically, we will be seeking to harness the skills and expertise of the CEO’s of these corporations to realise Sydney’s full potential as a leading and well-rounded global city.
Sydney First represents a new level of engagement and investment for members, and the Sydney Chamber will be focused on acquiring a founding membership base for the
initiatives throughout the next financial year.
This acquisition campaign will be supported by the development of policy and research focussed on the interests of a growing membership; a strong events program with frequent political access; and a progressively public position and profile for the initiative.
During 2005/2006 the Chamber also introduced a number of other new initiatives aimed at enhancing services to our members. Partnership relationships continued to provide a solid platform for those initiatives allowing us to offer a diverse range of new and existing programs enhancing the Chamber appeal and relevance to existing and prospective members.
Major partnerships were again renewed with Sydney Airport and Sydney Ports Corporation in support of the Sydney & Metro Business Forum – now in their 9th partnership year.
New partnerships were secured with Ross Human Directions to run a program of peer-level events for the Human Resource Directors of our member companies and Sony to establish a forum for Executive Assistants.
The Chamber also launched the inaugural SME Growth Summit with major partner Visa International held at the Sydney Convention and Visitors Bureau in April. The summit, which attracted almost 300 delegates, was a major success for the Chamber.
Pre-merger the Chamber again increased its public affairs and lobbying profile cementing its position as one of the most influential lobby groups in NSW. A cornerstone of this success was our annual Pollies for Small Business program which reached new heights in August 2005 putting over 80 State and Federal Parliamentarians to work in small businesses across the State for the day bringing them face to face with the challenges
The third edition of the Chamber’s Red Tape Register again highlighted the cost of compliance for business while our high-profile campaign calling for the Federal Government to review the funding formula used to distribute GST income to the
States gained the Chamber public prominence. Pollies for Small Business, the Red Tape Register and the SME Growth Summit will all continue but will be delivered by ABL State Chamber in 2006/07 due to their SME focus.
Other programs also transferred across to ABL State Chamber were the Enterprise Club and our Chamber Business Card and the relationship with the ANZ Bank.
Throughout the year our regular CityPolls continued to raise public awareness of issues affecting Sydney along with Vital Signs – our annual report card on the city.
Despite a year of significant change members have continued to respond well to the Chamber’s new and existing programs and the merger with the retention rate still consistent with previous years.
Our partners have also responded well with all major partners renewing their relationships.
Sydney First shaping Sydney’s future
12 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 13
Workers Compensation premiums 15 percent reduction – $430m reduction in business costs
$3.5 billion KickStart program to reduce government spending, improve service delivery, cut employment taxes
12 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 13
As the Voice of Industry, ABL State Chamber represents the concerns of business at all levels of government to create a more efficient business environment, save members’ time and money and improve access to new business opportunities.
Over the course of 2005/2006 the strength of ABL State Chamber’s voice was felt across a range of Federal and State policy initiatives. Successful outcomes were achieved in the following areas:
Abolition of three percent tariff on imported inputs to manufacturingJuly 2005 saw the successful conclusion to almost a decade of lobbying to abolish the three percent tariff on imported inputs to manufacturing helping to improve competitiveness for manufacturers.
Amendment of Workplace Fatalities legislation ABL State Chamber’s successful lobbying campaign on the Workplace Fatalities Bill resulted in the incorporation of four of the elements from ABL State Chamber’s Five Point Plan from July 2005.
15 percent reduction in Workers Compensation premiumsABL State Chamber has
consistently called for Workers Compensation reductions as part of its NSW Competitiveness campaign. As a result lobbying pressure, NSW workers compensation premiums were reduced by 15 percent during 2005/2006 resulting in a $430 million reduction in business costs.
NSW State Government delivers on ABL State Chamber’s 2004/2005 Mid Term Report Card to:- Conduct a NSW Expenditure Review
- Boost infrastructure spending to a record $45 billion over the next four years
- Implement reform to recover NSW’s fair share of GST revenues.
Abolition of Superannuation SurchargeDelivering on a long-held ABL State Chamber policy position the Superannuation Surcharge was abolished in the Federal Budget and will result in improved retirement incomes.
Other areas of focus during the year included:
Learning, education and training
Creation of two new Vocational Training Orders
There is considerable
complexity in adding new qualifications under the Vocational Training Order process. NSW is the only State with this system and it acts as a barrier to the development of training responsive to industry needs. In December 2005 ABL State Chamber overcame Union impediments to create two new vocational training orders able to be delivered in the workplace. The value of this activity for members is the creation of a precedent for industry applications in a range of sectors.
This is a big win, in particular for ABL State Chamber members in the Nambucca Shire who have been pursuing this issue for over two years.
More flexible vocational training
Over the last three years ABL State Chamber has lobbied for more flexible vocational training and education arrangements in NSW. The Council of Australian Governments decision in February 2006 to focus on human capital resulted in an action plan to increase quality, flexibility and responsiveness in Vocational Training and Education.
Workers Compensation premiums 15 percent reduction – $430m reduction in business costs
POLICY
EXPANDINGTHE VOICE OF INDUSTRY
14 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 15
POLICY
Skills Shortage
The skill shortage continued to be a major concern to businesses across NSW. In May 2006 the NSW Government released its Report on the Inquiry into Skills Shortages in Rural & Regional NSW. Many of the recommendations reflect ABL State Chamber’s long-standing position that the Government needs to better align skills and regional development to ensure increased responsiveness.
ABL State Chamber continued its campaign to help business face the skills shortage crisis with the appointment of four Regional Industry Career Advisers (RICAs), funded by the Australian Government’s Career Advice Australia initiative. The RICA program was developed to help young people make the transition from school, to further education or training and into the workforce.
Occupational Health and Safety
Review of Occupational Health & Safety Act 2000
In February 2006, ABL State Chamber lodged a submission
entitled Safer Workplaces – a new partnership which recommended, in conjunction with twenty three other associations, the overhaul of NSW’s complex Occupational Health and Safety (OHS) laws. The submission focused on the problems of the current absolute duty of care and defences, the imbalance between employers and employees under the Act, and problems with union prosecutions. Most of the recommendations of the submission have been included in the Government’s draft changes released for public comment.
Workplace reform
As a consistent advocate for a single national workplace relations system ABL State Chamber welcomed the introduction of WorkChoices.
Working closely with Government and the Australian Chamber of Commerce and Industry, ABL State Chamber played a key role in ensuring the legislation provided meaningful change for small businesses, successfully lobbying to:
Reduce record keeping regulations which were considered as unworkable and
an unnecessary burden for businesses.
Reduce incorporation fees as a means of encouraging smaller businesses to take advantage of the opportunities available through WorkChoices. In the May 2006 Budget, the federal government halved incorporation fees for business, saving businesses $216 million over three years.
Limit the capacity for practitioners other than doctors to issue sick leave certificates to workers.
ABL State Chamber conducted an extensive member awareness campaign aimed at minimising transition costs and confusion. Over 2,000 members participated in seminars throughout NSW and the ACT.
In association with the Victorian Employers’ Chamber of Commerce and Industry (VECCI) and Commerce Queensland (CQ), ABL State Chamber successfully tendered for a Government funded
WorkChoices awareness program which involved the roll-out of a large number of workshops across NSW and the ACT.
Building on its familiarity with WorkChoices legislation, the affiliate of ABL State Chamber, Australian Business Industrial, received transitional Federal registration as an industrial organisation within the new national workplace relations system. This strengthens the capacity of the organisation to represent members in the new Federal system.
NSW State Government reform
KickStart NSW
In January 2006 ABL State Chamber unveiled KickStart NSW, a $3.5 billion plan to reduce NSW State Government spending, improve service delivery and cut employment taxes. The plan detailed measures to bring the NSW Budget into balance, reduce State taxation levels and cut the Government’s
Superannuation Surcharge abolished
Workplace Fatalities legislation amended
14 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 15
planned payroll tax collection increases from $2.3 billion to $800 million.
Regulation and Red Tape Submission
ABL State Chamber contributed to the NSW IPART Inquiry into red-tape and advocated a ‘one in, one out’ strategy for regulation as well as recommending the Government reward public servants who cut red tape.
Key recommendations made include:
Amending the NSW OH&S Act to make workplace safety the responsibility of both employers and employees
Developing a uniform definition of wages for payroll tax, income tax and workers compensation liability within and between States and Territories
Ensuring local Governments do not create additional burdens for business through inconsistent application of State regulations on businesses.
The NSW Government’s final response to the IPART Inquiry is due in late 2006. The NSW Coalition has adopted in its small business policy almost all of the ABL State Chamber
recommendations in its IPART submission.
Taxation
Plan to reform GST distributions
A plan to reform GST distributions was presented by ABL State Chamber and VECCI to the Commonwealth Government in April 2006. It recommended that:
The Productivity Commission review the current GST formula to simplify distribution
The Productivity Commission make recommendations about NSW, Victoria, Queensland, Western Australia and the ACT as fully developed economies only needing per capita distributions of GST revenue, with the remaining States and Territory receiving payments based on horizontal fiscal equalisation
That financial assistance be provided over a five year transition period to States disadvantaged by reforms.
Workforce Participation
ABL State Chamber participated in two projects to increase employer opportunities to engage
with skilled migration and people with a disability. ABL State Chamber now hosts a part-time officer from the Department of Immigration & Multicultural Affairs whose role includes the development of employer information kits and conducting workshop sessions in consultation with ABLawyers.
A similar project focussing on education, training and increased employment outcomes for people with a disability has also been undertaken with ACCI and funded by DEST.
Sustainable Development plan
A twelve month project plan was developed to promote and educate members and the media about the benefits of sustainable development as well as improving ABL State Chamber’s own practices.
three percent tariff manufacturing imported inputs abolished
Annual Report 2006 ABL State Chamber 17
ACTINGGLOBALLYABL State Chamber’s International Trade team assists businesses to successfully export, establish an on-the-ground presence overseas, and source products internationally. The team covers the globe in industry and country experience and are specialists in helping Australian companies succeed abroad.
International Trade’s team of professionals work in partnership with clients to achieve commercial outcomes that result in sustainable long-term growth. The team’s 16 staff speak a total of 14 languages and provide an extensive network of business contacts in countries including Brazil, Chile, China, India, Malaysia, Thailand, UAE, and United States.
TradeStart
ABL State Chamber continues to be the largest private sector provider of Austrade’s TradeStart program with over $65 million generated in export revenue for its clients since
2002. 2005/2006 was again a year of high achievement and ongoing export development work, with strong growth seen in companies looking at exporting in industry sectors such as food and beverages, building products, IT and designer fashions.
In 2005, ABL State Chamber won the Austrade tender to expand the TradeStart program opening two new Export Hub offices in Tweed Heads and Bega. These Export Hubs are two of only eight across Australia and combine Austrade and AusIndustry services to assist local businesses with exporting.
One of the year’s major events was Food & Hotel Asia, in Singapore where ABL State Chamber worked with Austrade to showcase a number of new Australian exporters. The show attracted over 35,000 trade visitors and generated considerable interest with many Australian companies expected to secure new business in the Asian food market.
Enhancing Opportunities
China
As one of the world’s fastest growing economies, China continues to be a focus for Australian companies from an export, investment and outsourcing perspective.
One of the year’s highlights included the Australian Guangdong Business Conference held in November 2005. ABL State Chamber was commissioned by the Guangdong Provincial government to organise the event which attracted 1,900 participants, making it by far the largest China-related business event held in Sydney to date.
Other initiatives included the China High-tech Products Expo co-organised with Ministry of Commerce of People’s Republic of China and Don’t Miss the Boat to China, a China networking cruise on Sydney Harbour with over 200 attendees. ABL State Chamber co-organised this event with the
INTERNATIONAL TRADE
TradeStart generates $65 million since 2002
16 ABL State Chamber Annual Report 2006
Annual Report 2006 ABL State Chamber 17
Australian Guangdong Business Conference record 1900 delegates
USA
ABL State Chamber in partnership with the NSW Department of State and Regional Development worked with a number of food processing companies to help them penetrate the US market. Assistance provided though the Stepping Up program included tailored mentoring, strategy development and tradeshow preparation. It also included a visit to Fancy Foods New York where NSW companies displayed their products on the ABL State Chamber stand.
Increased Support
Along with the expansion of our trade offices brought the Export Hubs in Tweed Heads and Bega, the merger has increased our support for exporters with an expanded export documentation team with an office now located in Sydney’s CBD, clients can better access Australian Certificates of Origin, Certified Declaration of Origin and ATA Carnets.
business matching with their Australian counterparts in July 2006.
ABL State Chamber, ACCC and ABCC also jointly organised two interactive seminars, both funded by COALAR. Held in Sydney in 2006, the seminars focused on Agribusiness and Education, Tourism and Sport in the Mercosur markets – comprising Argentina, Brazil, Paraguay, Uruguay and Chile. Over 70 businesses learned about opportunities in selected sectors and received advice on doing business with local partners.
Thailand
In June 2006 ABL State Chamber was awarded a contract from the Board of Investment Thailand to promote bi- lateral trade and investment in Thailand.
ABL State Chamber will work with the Thai Government over the next 12 months and can provide in-depth information and introduce contacts for investment in Thailand.
Latin America
Latin America’s increasing strength in mining and manufacturing also continues to create opportunities for Australian businesses. In late 2005 ABL State Chamber, Australia Chile Chamber of Commerce (ACCC) and Australia Brazil Chamber of Commerce (ABCC) organised a market visit to Brazil and Chile. Funded by the Council on Australia Latin America Relations (COALAR), the visit provided the delegation of Australian mining suppliers with the opportunity to experience Brazil and Chile’s mining sectors, meet with local mining companies and their suppliers for business matching and to create bilateral commercial links.
Discussions held in September 2005 between ABL State Chamber and the Chilean economic development agency, CORFU, resulted in the co-organisation of a delegation of twenty mining supply companies from Chile to visit Sydney for
China Investment Promotion Agency.
India
With its growth outlook overshadowing most Asian economies, India represents enormous export potential. During the year, ABL State Chamber’s International Trade Unit assisted companies, in building products, medical devices, wine, mining and entertainment to establish business in India.
In June 2006, ABL State Chamber’s Country Manager India, SP Joshi, visited Australia and while here spoke on doing business in India at the annual CPA conference in Melbourne focussed on Australia – India trade. Joshi’s visit resulted in a number of successful export projects being secured.
Further networking ties in India were achieved when a representative ABL State Chamber was appointed to the management committee of the Australia India Business Council.
Export Hubs we win two out of eight export hubs in Australia
18 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 19
Australian Business Lawyers equal 2nd in Australian Law Awards
ABL Apprenticeships Centre four percent growth, 16 percent financial improvement
18 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 19
NSW and Sydney regions. As a result additional offices in Sydney and Western NSW were opened. The capability remains in place to service multi -site employers across the other parts of NSW and the ACT not covered by the contract. This greater geographic reach has been further enhanced by ABL State Chamber’s alliance with State Chambers of
and improving its financial performance by 16 percent over the previous year. NSW firms with a national employee base provided the primary source of growth.
Three contract regions were secured with the Australian Government for the provision of Apprenticeships Support Services for the next three years across the Illawarra and South East NSW, Western
Australian Business Limited New Apprenticeships Centre 2005/2006
After two years of decline 2005/2006 saw the market in traineeships and apprenticeships steady. Australian Business Limited New Apprenticeships Centre performed well, achieving a 4 percent growth which was ahead of the market
MANAGING& ADVISING
WORKPLACE MANAGEMENT
20 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 21
Newcastle PermanentAn icon within the city and a major employer in Newcastle, mutual building society Newcastle Permanent takes the training of its staff very seriously.
“Working closely with the Australian Business Apprenticeships Centre has made our tailor-made programs feasible and more cost effective overall,” said Newcastle Permanent’s chief executive officer, Fraser Read-
Smith. “It’s a terrific service and our experience of it has been first rate.”
What contributes to the organisation’s vigorous financial ratios is the building society’s focus on its people.
“While our primary objective is to offer our members value through attractive loans and deposits, competitive fees and charges and so on, financing the infrastructure and growth of the organisation is very much dependent on our training programs.”
Commerce in other states facilitating the provision of a more comprehensive national service model that has benefited larger companies.
Australian Business Lawyers
Throughout 2005/2006 Australian Business Lawyers continued to improved its service offering and was again
recognised as amongst the best in its field. In June 2005, Australian Business Lawyers was ranked equal second with Freehills in the Fuji Xerox 2005 Australian Law Awards – Legal Personnel Employment.
Australian Business Lawyers’ skills lie in understanding and applying the numerous and complex laws that govern
industrial relations, enterprise bargaining, employment, discrimination and occupational health and safety. With over 30 lawyers, Australian Business Lawyers’ practice is as large, or larger, than those found in Australia’s major national and international law firms.
This specialisation and depth of resources has been invaluable in helping to guide ABL State Chamber members through the Work Choice legislation enacted by the Federal Government in March 2006 and has enabled Australian Business Lawyers to:
work with ABL State Chamber members in identifying opportunities to use the reforms to add value to their businesses;
assist ABL State Chamber in its submissions to the Awards Review Taskforce; and
develop innovative products and activities to assist ABL State Chamber members including:
- publishing a handbook to support members as they navigate through the extensive Work Choices legislation;
- working with ABL State Chamber to educate members on the changes, conducting an extensive program of briefings and training workshops;
- hosting strategic reviews by industry sectors to educate industry leaders and human resources managers on the effects of Work Choices in their industries;
- producing a Work Choices Readiness Guide and distributing detailed updates for clients; and
- in association with ABL State Chamber’s Publishing Unit, launching HR Advance, a Work Choices compliance resource that allows small and medium businesses to create a large range of legally accurate. Work Choices compliant HR documents.
In response to the increased focus on alternative forms of dispute resolution emphasised by Work Choices, Australian Business Lawyers launched a new mediation/alternative dispute resolution practice. The mediators (accredited by the Australian Commercial Disputes Centre) assist clients to address workplace grievances and disputes.
Australian Business Lawyers’ specialist workplace training service also flourished during the year. Offering a highly successful public training program, Australian Business Lawyers conducted major training projects for clients
WORKPLACE MANAGEMENT
CASE STUDY
20 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 21
in all areas of workplace law, including EEO; Issues in Recruitment; Managing Performance and Termination; Investigating Employee Issues; Workplace Privacy; and OH&S.
In association with ABL State Chamber Events team, Australian Business Lawyers also conducted a successful Employment Law Seminar Series, covering unfair dismissals, parental leave, OH&S responsibilities, workplace surveillance and agreement making.
Australian Business Lawyers continued to invest in its Corporate and Commercial Practice. This is an expanded service providing advice on a wide range of corporate and commercial law matters, including commercial contracts, legal and regulatory compliance matters and corporate governance.
Occupational Health and Safety (OH&S)
Helping business comply with relevant OH&S legislation in order to make their workplaces safer remained the key function of ABL State Chamber’s Occupational Health and Safety Unit.
During the year the OH&S Unit successfully tendered for four
WorkCover funded initiatives (programs). Each year- long initiative aims to assist specific groups to better understand and adopt key requirements from OH&S and Workers Compensation legislation in NSW. Two of the initiatives involve alliances, one with the Institute of Chartered Accountants of Australia, the other with the Australian Rehabilitation Providers Association (NSW).
The Unit also developed OH&S Basics, a new program designed to help small businesses meet their OH&S obligations.
Publishing
ABL State Chamber’s publishing products had its most successful year since its inception in 2000 expanding its product range threefold.
New initiatives included the development and launch of two websites. HR Advance, developed in collaboration with AB Lawyers, features a wide range of documents designed to assist employers
in the new WorkChoices environment. Pay Office Companion is aimed at office personnel to help them cope with the new demands created by the changing employment environment.
A range of products for the SME market were also developed to assist with Human Resource Management, OH&S and general business management.
Whilst the emphasis on workplace relations, including HR and OH&S continues, the Publishing Unit has also produced business improvement products. These address business management generally and more focused topics such as marketing.
Workplace Advice Unit
The Workplace Advice Line remained a core service of ABL State Chamber and provided members with access to a wide range of information and advice on workplace and industrial relations matters.
In addition to handling over 25,000 telephone, fax and email enquiries during the year, the Workplace Advice Unit also guided members through award wage rates and other online information available from ABL State Chamber’s website. There have been close to 3,500 hits this year on the wage rate schedules that are prepared by the Unit.
The Workplace Advice Unit plays an integral part in providing members with practical and sensible solutions to workplace issues, including the impact of the new workplace laws on members. The introduction of Federal Government’s WorkChoices legislation in March 2006 is the most profound change ever to the regulation of workplace relations in Australia. The Workplace Advice Unit has, and continues to be, at the front- line helping members understand, comply with and use WorkChoices to better meet the needs of their businesses and workforces.
Wage rate inquiries 3,500 website hits
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ABL State Chamber’s membership base continued to strengthen in 2005/2006 growing to over 30,000 full and associate members.
The inclusion of ABL State Chamber’s non-member customer base sees this figure rise to a total of 67,000 businesses, local Chamber of Commerce, institutes and associations, primarily across NSW and the ACT, who benefited from the organisation’s portfolio of services.
A 4.5 percent increase in membership revenue over the previous year reflected
the increasing number of businesses seeking information, advice and advocacy from ABL State Chamber.
Member services – navigating business to solutions
ABL State Chamber’s Navigation Centre is a vital part of membership. In 2005/2006 the Centre responded to over 25,000 enquiries from members and customers with questions relating to every stage of the business cycle.
ABL State Chamber’s capable team of navigators assist members by way of either ABL State Chamber’s products and services, or by referring them to third parties – whether they be ABL State Chamber alliance partners, government bodies or other member companies – to find solutions to these needs.
Alliances – building strategic bridges
Strategic alliances are an integral part of ABL State Chamber’s strategy, providing enhanced services, shared organisational knowledge and value adding opportunities.
ABL State Chamber now
has almost 50 alliance partners representing diverse organisations such as banks, associations, institutes, telecommunications companies and local chambers of commerce. New alliance partners during 2005/2006 included ANZ Bank which provides an exclusive banking package launched to members in September 2006.
These alliances enable ABL State Chamber to bring additional value to its members and customers through networking and complementary services.
It also enables ABL State Chamber and its partners to work together in a variety of ways, from joint membership arrangements to co-branded products, events and seminars and shared content and information resources.
In the case of many associations, the alliances also help increase ABL State Chamber’s voice to Government on the numerous issues facing business today.
Marketing our services
ABL State Chamber marketing focused on delivering key initiatives to drive membership acquisition, retention and
67,000 businesses using our services
Enquiries more than 25,000
Alliance partners over 50
EXPANDINGMEMBERSHIP
SALES & MARKETING
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awareness of business support products in areas of workplace management, business improvement and OH&S.
The ABL State Chamber brand was significantly enhanced via the introduction of a newly designed website which makes the search for ABL State Chamber core competencies, products and events easier. The introduction of new online features including member payments, events registrations and viewing of entitlements along with easier access to services, benefits and membership information has increased site visitation by members and non-members alike.
The introduction of WorkChoices facilitated a large and integrated sales, product and marketing campaign that allowed members to assess their WorkChoices readiness online, receive an introductory guide, attend over eighty educational events and monitor their ongoing effectiveness using one of our three newly developed HR products – HR Advance, HR Basics and the HR Handbook.
Membership communications were segmented to add value via company size or industry. Specific retention
campaigns focused on regional or industry needs, particularly in manufacturing and an E-Networking newsletter was introduced following member feedback for the need to increase member to member networking.
A range of business improvement products were launched during Small Business Month in September 2005 including Business Vitality Check; Business Vitality Plus and two new Business Vitality tools in marketing and business planning. OHS Basics was also launched at the same time.
Two major information supplements were produced to support emerging policy platforms, promote membership and profile successful members in the skills shortage and manufacturing arenas. The thirty two page supplement Where will your business be in 2020? The changing face of Australian Manufacturing was launched during Manufacturing Week in June 2006.
Over 15,900 business professionals attended 227 events throughout NSW and the ACT. These events enabled many of ABL State Chamber members to network
and understand each others businesses as well as source potential business contacts.
Many of these events were organised in collaboration with ABL State Chamber’s alliance partners and affiliates to deliver appropriate training and information over a diverse range of business issues and topics, notably WorkChoices and the Business Vitality series.
Australian Made Campaign
ABL State Chamber is
a founding member and authorised agent of the Australian Made Campaign in NSW and ACT. To strengthen Australian Made’s presence in these markets, a NSW Business Development Manager, based in ABL State Chamber’s North Sydney office, was appointed in February 2006. The aim of the role is to interact with ABL State Chamber staff, increase awareness and encourage membership of the Campaign.
FelibaSpecialist refrigeration container engineers Feliba has operations in all but one of the major ports in Australia.
Like most companies, Feliba found managing their growth challenging. Recognising the need for help they turned to ABL State Chamber’s Business Vitality program.
“We started Business Vitality because we knew we weren’t performing as well as we could,” said Director Ray Munro.
Incite Management Group, specialist SME advisors, worked with the management team at Feliba on all the areas that were highlighted in the Business Vitality CHECK report. The program developed for them included strategies to increase their customer base; measurement and communication of customer satisfaction; regular client visits; research of opportunities in the market; and a formal marketing plan to include in the business plan.
CASE STUDY
Full and associate members over 30,000
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DEFENCE INDUSTRY UNIT
MAXIMISINGOPPORTUNITIESChampioning the cause of the defence industry
As well as representing the interests of Australia’s defence industry to both the Department of Defence and the Federal Government, ABL State Chamber’s Defence Industry Unit (DIU) continued its commitment to helping members maximise their business opportunities in this unique sector by providing specialist defence-related business advice.
As the Federal Government’s largest procurer of goods and services, the defence sector continues to offer significant opportunities for member companies and the DIU has been well placed to help members both understand and benefit from these opportunities.
Over the next ten years the potential exists for Australian industry to take on up to $48 billion worth of Defence work out of a total of $81 billion to be spent on acquisition and sustainment. More than $3 billion is forecast to be spent
annually in areas such as infrastructure development, information technology and support services.
During financial year 2005/2006, ABL State Chamber’s defence industry members benefited from the services of the DIU in a number ways:
Specialist defence business advice
The DIU remains the only defence industry group employing full -time defence industry specialists in Canberra.
ABL State Chamber’s defence business Advice Line continues to be highly regarded by members and is an invaluable source of information, advice and business intelligence. Advice line topics cover a range of business issues including ongoing and upcoming defence projects, policy guidance, contacts, business entry points, defence exports and contracting issues.
The DIU also conducts
regular defence business consultations with member companies throughout the year, assisting members to track emerging commercial opportunities and resolve issues of concern. This service is seen as an invaluable tool for companies seeking entry into the defence market.
Regular defence business intelligence
The ABL State Chamber Defence Update e-news is a unique source of defence business intelligence issued to members on a regular basis. Its relevance and value is evidenced by the increase in calls to the Defence Unit Advice Line after each publication.
In 2006, as a result of a member survey the DIU introduced a new weekly Tender Supplement covering all Defence tenders and selected Government tenders. The Tender Supplement has been extremely well received by members and is particularly valued by those with small to
medium enterprises. Members can access the Defence Industry Advice Line for further information, advice and assistance on specific items of interest.
Professional representation to Government
In representing the interest of its members to both the Department of Defence and the Federal Government the DIU has introduced a number of new initiatives during 2005/2006.
Five specific Industry Focus Groups were established covering the following key areas:
1. Corporate Services and Infrastructure;
2. Information and Communications Technology;
3. The supply of support services to the Defence Materiel Organisation;
4. Education and Training services; and
5. Business machines.
Defence Industry – $3 billion annual spend development, technology and support
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The purpose of the Industry Focus Groups was to improve the relationship between defence and industry, provide an industry-specific forum for frank and open discussion and develop resolutions for matters of concern to industry. The results of the Focus Groups have been very positive by improving the relationship with Defence, in particular, the business environment for members. The DIU will continue to refine the Industry Focus Groups and look at expanding them on an as required basis.
Defence briefings and networking events
Through the year ABL State Chamber’s Defence Industry Unit conducted thirteen briefings involving key defence procurement decision makers targeting priority defence procurement issues.
Keynote speakers included, the Director General, Coastwatch and Joint Offshore Protection Command, Chief Operating Officer Defence
Materiel Organisation, Chief Information Officer Group, Deputy Secretary Corporate Services and Infrastructure Group, Deputy Chief Executive Officer, Defence Materiel Organisation, DSTO Business Offices, Deputy Secretary Department of Industry, Tourism and Resources and the Deputy Secretary Strategy Intelligence and Security.
The DIU also conducted a half day seminar with the Chief Information Officer Group (CIOG). This initiative was a result of an Information Communications Technology (ICT) Industry Issues Paper that was undertaken by the DIU on the behalf of the CIOG. Over one hundred industry members attended and the event was the basis for
ongoing interaction with CIOG by the ABL State Chamber ICT Industry Focus Group.
In addition, the DIU introduced a new training course to assist member companies who tender to Government maximise their opportunities. In 2006, three courses were conducted, attended by 35 members with more courses planned for 2007.
Defence Industry – $3 billion annual spend development, technology and support
Absolute filtersAbsolute Filters is a supplier of both general and specialised filtration systems for industrial and commercial applications.
Director, Les Briggs is proud of his company’s innovative approach to finding solutions. “Our predominant strength is in the automation of systems and controls to make them work around specific problems. Our specialised staff has the flexibility to engineer around a problem offering various solutions.”
To expand their customer base he has spoken to Paul Fisher at Australian Business Limited State Chamber’s Defence Industry Unit about further opportunities in the defence industry: a hard-to-crack market.
“We have been working closely with Paul who often provides us with contact information for further contracts.”
CASE STUDY
Next 10 years $48 billion business opportunity
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Debating Australia’s long term economic growth and prosperity 13 seminars 400 participants
26 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 27
AUSTRALIAN BUSINESS FOUNDATION
RESEARCHINSIGHTSAlmost a decade ago, Australian Business Limited founded the Australian Business Foundation (the Foundation), an independent business research think-tank which advances knowledge to boost Australia’s capabilities and global competitiveness. In its mission to strengthen Australian enterprise through research and policy innovation, the Foundation acts as an antenna to the business community, helping them to prepare for the future by exploring emerging issues likely to impact on competitiveness, innovation and profitability.
Since its inception, the Foundation has become known for its depth of knowledge and is widely called upon as an authoritative source of contemporary research intelligence on business innovation and competitiveness. The Foundation has the rare ability to marry rigorous academic
research and analysis with practical insights to help business executives and public policy makers improve their day to day decision making.
ABL State Chamber continues to benefit from access to the unique research intelligence provided by the Foundation, leveraging this knowledge to develop its own competitive strategies and positioning, and to better serve its members and the wider business community.
The highlights of the year included:
Launching the findings of three significant studies undertaken for the Foundation by internationally-recognised researchers. These are:
- Innovation and the Knowledge Economy in Australia by Professor Keith Smith of the Australian Innovation Research Centre, University of Tasmania and formerly at the European Commission Joint Research Centre.
- Success Factors in Australian Industries – observations on wine, mining and listed property trusts by Colin Ramsey and Robert Bladier of the Australian Stock Exchange.
- National Innovation Systems: Finland, Sweden and Australia Compared by Göran Roos, Lisa Fernström and Oliver Gupta of the UK based company, Intellectual Capital Services Limited.
Findings were also released from the study, No Simple Solutions: How Sectoral Innovation Systems Can Be Transformed in which the Foundation participated as industry partner. The study, conducted by an international team which was led by Don Scott-Kemmis of the Australian National University, charts Australia’s unusual patterns of innovation and delves into the drivers of innovation at the firm and sector level.
Successfully communicating these research findings via a program of thirteen seminars which reached almost 400 participants. This, together with the active engagement of Foundation members created a platform for broad-ranging debate on issues critical to Australia’s long term economic growth and prosperity and to the competitive success of local firms and industries.
Operating as a potent ‘thought leader’ to help shape the policy agenda and generate
practical initiatives to secure innovation-led growth in Australia. Key examples were the Foundation’s role in co-hosting a private Government-Business Roundtable of selected department heads and business chief executives; representing Australia at an IBM Global Innovation Outlook forum of global thought leaders in New Delhi; policy advisory roles to federal and state government departments; and being the leading commentator at international meetings in Australia of the Organisation for Economic Co-operation and Development and the Global Reporting Initiative.
Debating Australia’s long term economic growth and prosperity 13 seminars 400 participants
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NSW/ACT REGIONS
SPREADINGOUR ADVOCACYABL State Chamber members are grouped into ten key regions across NSW and the ACT. Each member has input into ABL State Chamber through ten Regional Councils, which in turn provide representatives to ABL State Chamber’s Council. The ABL State Chamber Council elects the majority of the ABL State Chamber Board, ensuring every member has a voice on issues critical to their business as well as the governance and operations of their organisation.
A key issue for every region during 2005/2006 was the introduction of WorkChoices. Events were held within each region to help members better understand the impact of the new workplace laws on their business. Regional staff also offered members a portfolio of products, including HR Advance and HR Basics, to assist with the transition.
Throughout the year ABL State Chamber continued to strive to find new ways to engage with more members, both new and existing. This was achieved through personal account management, holding topical events, providing practical information and advice (either in person or over the telephone) and by representing the interests of
members to both the media and government.
Murray / Riverina
The increased amount of business and industry moving into the Murray/Riverina area during 2005/2006, afforded ABL State Chamber the opportunity to increase its awareness and penetration within regional business communities. Whilst manufacturing represents the largest proportion of the region’s 300 plus members, retail and professional services businesses also benefited from ABL State Chamber’s range of products and services.
A key focus during the year was on building awareness of the full service range offered by ABL State Chamber ensuring members are familiar with all areas of specialisation. The year saw members and clients seek advice and information on topics ranging from Business Planning, Export, Energy Efficiency, Occupational Health and Safety through to matters relating to Employment Law. A highlight was the high success rate achieved in helping members access international markets through export initiatives such as TradeStart and Exporters Exchange.
The launch of HR Advance, a website featuring a wide range of documents designed to assist employers in the new WorkChoices environment, also received extremely positive feedback from members.
As with other regions, the crippling effect of the drought and the skills shortage continued to be major concerns for Murray / Riverina. Forums addressing the skills shortage and involving major employers were held across the region to discuss how best to tackle the problem.
Other common issues, such as upskilling workers, were also on the agenda during the year. ABL State Chamber was a catalyst in bringing together local Business Enterprise Centres, Chambers of Commerce, businesses and industries to disseminate information and discuss key issues.
The region’s event and seminar program was well attended. In particular a series of industrial relations seminars designed to help businesses better understand the WorkChoices legislation were quickly booked out.
ABL State Chamber’s involvement in local business communities and its profile
in the region continued to build during 2005/2006 with the ongoing sponsorship of Business Awards in Hay, Leeton, Cootamundra, Wagga Wagga and West Wyalong. These awards play a significant role in encouraging and rewarding local businesses in their endeavours and ABL State Chamber’s active participation was highly valued.
Northern Rivers
The Northern Rivers is one of the fastest growing regions in NSW and the increasing number of individuals and businesses relocating to the area has seen ABL State Chamber strengthen its membership base during 2005/2006.
While a skilled labour shortage affected the rest of the country, there was an increasing focus on employing mature aged workers in the Northern Rivers region. Classified as one of the largest ageing populations in Australia, 20 percent of the region’s population is aged sixty five years and over. To help employers tap into this invaluable resource, ABL State Chamber rolled out the Mature Aged Workers Program in July 2005.
28 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 29
Funded by the Department of Employment and Workplace Relations, the program focused on outlining the benefits of employing mature aged workers and encouraging employers to devise and implement mature age employment policies at their workplaces.
Exporting also proved a boon to the region during the year. In July 2005 ABL State Chamber established the Tweed Heads Export Hub as a result of a Federal Government initiative. Servicing the Northern Rivers region, the Export Hub played a pivotal role in guiding local businesses through the export process, including how to measure export capability, choose the right market and determine the optimum entry strategy.
ABL State Chamber’s Export Documentation service and Getting into Export events complemented the service. The Northern Rivers Exporters Exchange, held at Ballina in June 2006, attracted over 50 delegates and provided a forum for new exporters to access the experiences of existing exporters.
Great strides were made during the year in working collaboratively with other
business networks in the area. In late 2005 the Northern Rivers Chambers of Commerce and Business Houses joined forces with ABL State Chamber and developed a plan of action to work co-operatively together in order to deliver a more co-ordinated offering to local businesses.
2005/2006 also saw the Northern Rivers and Mid North Regional Councils coming together for the first time to discuss issues that affect both regions. A key outcome was the formation of a North Coast delegation to seek government action on the Pacific Highway.
In June 2006 a Regional Round Table was held on the Proposed Workers Compensation and Occupational Health and Safety Assistance for Accountants which attracted keen support.
Other regional events included a Red Tape Round Table to solicit member feedback on the current state government’s performance with feedback used to compile a report card.
Sydney North
The Sydney North region includes the area from Sydney Harbour to the lower
Sydney North over 1900 members and associates
30 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 31
NSW/ACT REGIONS
reaches of the Hawkesbury River, and stretches from the coast to north west Sydney. Regional enterprise activities vary widely from North Sydney’s business services heartland to industrial parks, with multinational manufacturers and ICT giants such as Microsoft, and the many SME’s†that operate along the northern beaches, North Ryde/Epping area, and Pacific Highway stretch from Artarmon to Hornsby. A large percentage of member businesses in the region are small to medium enterprises with a high proportion (30 percent) in services industries.
Because of the region’s geographic disparity the Sydney North Regional Advisory Council decided in March 2006 to establish three zones within the region, Northern Beaches, North Shore and Ryde/Epping/Macquarie. The re-zoning was designed to facilitate better engagement between ABL State Chamber and local Chambers of Commerce enabling both groups to work together and achieve a more meaningful interaction with local businesses.
Member and associate numbers in the region increased during the year to
over 1,900 and now include many Chambers of Commerce members in the ABL State Chamber network. In addition to a high level attendance at the region’s events and seminars there has been an enthusiastic take up by both members and clients of services and products including the workplace advice line, trade documentation, TradeStart for first time exporters, OHS and safety advice, apprenticeship and trainee placements.
The current lack of infrastructure and the failure to plan for the region’s future infrastructure needs, remains a major issue for Sydney North members. The Sydney North Advisory Council of ABL State Chamber continued to advocate and inform the community†of the urgent need for better infrastructure planning and financial commitment from governments.
In early 2006 ABL State Chamber Council members participated in the formation of the Sydney North 2030 Project, whose aim is to achieve better business outcomes and sustainable community development for Sydney’s North. In March 2006 around 50 businesses
attended the Sydney North 2030 participative forum held at Macquarie University, North Ryde which resulted in an action plan to help both the business community and local government address key issues.
During the year ABL State Chamber continued its campaign to assist business with the skills shortage crisis with the appointment of two Regional Industry Careers Advisers (RICAs) operating in the Sydney North region. Members are working with RICA’s to ensure employer engagement with careers advisers throughout the three year program.
Western Sydney
Greater Western Sydney is one of Australia’s fastest growing and largest economic regions. The Westlink M7 tollway, which opened in December 2005, provided the region with a transport infrastructure that will ensure business growth at a rate which justifies the area’s reputation as an economic powerhouse. The M7 tollway is estimated to generate an additional 24,000 jobs in Western Sydney within three years and is forecast to create
an additional $3 billion in economic output.
The region is the largest manufacturing area in Australia, it accounts for more of the area’s economy than any other sector, with 13,000 individual businesses generating over $30 billion annually in sales and service income. Approximately 40 percent of ABL State Chamber’s 1,700 members and associates in Greater Western Sydney are manufacturers or associated businesses.
During the year ABL State Chamber’s staff and the Western Sydney Regional Council focussed their efforts on assisting members involved in manufacturing and other sectors to grow and compete in competitive environment which is becoming increasingly international.
A key area of focus continued to be the national skills shortage. To assist in minimising the impact of the skills shortage on members, ABL State Chamber again ran the Schools Bizlink program, an initiative that commenced in 2005 in response to member needs. The program is designed to assist and encourage young people to
Western Sydney 1700 members and associates 40 percent manufacturers
30 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 31
take up traditional occupations through traineeships and apprenticeships. This year the program involved thirteen schools and businesses from industries as diverse as pharmaceutical manufacturing, construction services, real estate, textile manufacturing and electro technology.
Another key area of focus for ABL State Chamber’s Regional Council was the development of ongoing relationships with Chambers of Commerce in the region. Alliances with the Hills, Smithfield-Wetherill Park and Penrith Chambers of Commerce were formed to jointly promote products and services and better support business networks at local, state and national levels.
The region’s events and seminar program continued to be highly valued by members and clients. Responding to the changing legislative framework as well as a general business demand for innovative training packages, over 50 events were held in the region covering IR, HR, OHS and exporting assistance.
In 2005, as part of Western Sydney Manufacturing Week, ABL State Chamber sponsored Human Resources and Manufacturing Day in
Parramatta and the State of Manufacturing Forum at Sydney Olympic Park. Both initiatives were hosted by the Greater Western Sydney Economic Development Board and were well supported by regional business communities. Key outcomes included common approaches between manufacturers, innovation in process and operation, and agreement that the manufacturing sector can compete globally with improved access to markets and specialised product offerings.
Mid North Coast & New England
ABL State Chamber’s presence in the Mid North Coast and New England region continued to gather strength over the course of the year. Building on its success in the major towns of Port Macquarie and Coffs Harbour, a greater effort was made this year to engage members at a local level in other townships such as Kempsey, Macksville and Taree. This involved working collaboratively with like-minded organisations such as Chambers of Commerce, Business Enterprise Centres, Business Network International and Women in Business.
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NSW/ACT REGIONS
An example of this co-operation was evidenced in 2005 when regional businesses attended a series of roundtable discussions, to hear about changes to the draft Workplace Fatalities legislation. Involving local politicians, business leaders and other business groups the Mid North Coast office was highly effective in generating awareness about the issue within regional business communities.
The launch of Small Business Month in September 2005 was further example of the successful combination of ABL State Chamber’s networks and expertise with those of Port Macquarie Chamber of Commerce, Hastings Business Enterprise Centre and Hastings Business Women’s Network. The initiative involved a number of highly successful events including two Small Business Expo’s and provided a welcome opportunity for business owners to network with each other.
A comprehensive suite of events and seminars were rolled out across the region during the year including eleven Understanding WorkChoices seminars held as far a field as Gunnedah and Inverell. Other seminars, also held in townships throughout the Mid North Coast and New England, included topics as diverse as Sex, Drugs and Dismissal and Industrial Manslaughter.
Exporting continued to be a major focus for the area. A large number of the Mid North Coast’s 250 members are actively involved in exporting and regularly use ABL State Chamber’s International Trade services for advice. The Exporters Exchange continued to flourish, providing a forum for businesses already exporting to share their knowledge and experience with both existing and potential exporters. The initiative attracted highly positive feedback from participants with members mentoring, advising and assisting other
businesses through the intricacies of exporting.
Hunter Business Chamber
As Australia’s sixth largest market, the Newcastle/Hunter region is undergoing a dynamic transformation which will see the construction of a major industrial estate and multi -purpose terminal within the world’s largest coal exporting city.
The Hunter Business Chamber is ABL State Chamber’s affiliated organisation in the Hunter, with joint membership between both organisations.
Reflecting regional growth, the Chamber’s membership base increased to over 1,200 companies who employ in excess of 90,000 people or one third of the workforce in the Hunter.
During 2005/2006 the Chamber concentrated its lobbying efforts on issues that impact on business costs and on identifying opportunities for members. A
highlight of the year was the Chamber’s discovery of more than $60 million collected by local government in the Lower Hunter as developer contributions to community needs yet left unspent.
In February 2006 the Chamber was involved in promoting the region’s capabilities at Pacific 2006, a major international defence exposition that attracted over 10,000 visitors. The Chamber, along with ten of the Hunter’s leading defence contractors, won the Pacific 2006 Chairman’s Award for its contribution.
In response to business concerns that investment and employment were threatened by high state taxes and insufficient investment in infrastructure, the Chamber continued its campaign to lobby for greater public investment by the NSW Government.
A survey conducted by ABL State Chamber in March 2006 showed that more than 85 percent of businesses in the region wanted greater infrastructure investment and more than 95 percent wanted cuts to either the payroll or stamp duty taxes. Public transport was deemed below an acceptable standard with
Hunter Business Chamber 1200 members employing 90,000 people
32 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 33
many employers reporting employee difficulty in accessing work opportunities because of poor public transport links.
In response to its lobbying pressure the Chamber won a $20 million immediate commitment from the NSW Premier for an inner city rail service. The state government is still considering the Chamber’s call for the implementation of a hub and spoke transport system.
In June 2006 the Chamber successfully lobbied against the proposed introduction of an infrastructure levy by Newcastle City Council persuading the council to find the required $4 million within existing budgets. Despite this success most other councils in the region were granted increases in levies. The Chamber played a key role in reminding councils that rising costs including fuel, taxes and local government rates adversely impact on employment possibilities.
Among the 70 plus events organised for members over the year was the highly successful series of special guest speaker functions known as Trailblazers, in which outstanding Hunter region and other business leaders shared their inspirational stories.
In late 2006 the Chamber is looking forward to celebrating its 120th anniversary. A highlight will be a member sponsored publication of milestones and special events.
Sydney South
Sydney South is a dynamic business region covering sixteen Local Government Areas from Sydney CBD and eastern suburbs, west to Strathfield and south to Sutherland Shire.
Manufacturing still plays a large role in defining this region. Over 28 percent of ABL State Chamber members in South Sydney manufacture. The textile, clothing, footwear and leather (TCF&L) industry
Sydney South over 2000 members and associates 28 percent in textile industrty
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NSW/ACT REGIONS
in this region is one of the strongest and most active in Australia. Other industries in the region include retail, wholesale, warehousing, logistics and transport, property and business services, health, finance and insurance.
In response to the diverse range of businesses and industry sectors represented by the region’s 2,000 plus members, ABL State Chamber’s activities in Sydney South vary greatly. A strong lobbying program continued to work on key issues affecting business, including how regulatory burdens impact on business, business taxation, training and skills matters, as well as a continued focus on the industrial relations landscape.
The events program provided seminars on compliance issues such as OHS and WorkChoices legislation changes, along with opportunities for business improvement through networking evenings, sustainable development programs, and a strong international trade program.
To encourage innovation with the TCF&L sector, Sydney South Regional Council continued to support and
sponsor the ABL State Chamber TCF&L Award with the University of Technology, Sydney. The award was developed to assist entrepreneurial graduates in starting their own business. The 2005 winner, fashion label Kylie Hawkes, received cash prizes and “in-kind” support, including membership and a business support package from ABL State Chamber.
As part of its campaign to assist members with their skills shortages, the Sydney South region has a Regional Industry Careers Advisor funded by the Australian Government’s Career Advice Australia initiative. Operating from the Mascot office, the Adviser was appointed in January 2006 and has embarked on a three year program to work with employers and schools in the region.
Illawarra Business Chamber
The Illawarra’s proximity to Sydney, just 50 minutes to the international airport, combined with an enviable lifestyle means the region’s economy continues to diversify with a growing number of businesses relocating to the area. Industries such as Information
Communication and Technology, education, aviation and defence technology, wine, health and tourism are all emerging to share centre-stage with the area’s traditional strengths of steel, coal and heavy engineering.
Reflecting the area’s vibrant economy, the Illawarra Business Chamber (IBC) experienced close to a 10 percent growth in its membership base during 2005/2006.
The IBC is ABL State Chamber’s affiliated organisation in the Illawarra, with joint membership between both organisations.
With a geographic reach from Wollongong south to Nowra and west to the Southern Highlands, IBC members represent a diverse range of industry sectors.
As the Illawarra’s leading business organisation, IBC is committed to representing the interests of members to all levels of government. In addition to joining with ABL State Chamber in advocating for issues such as IR reform, payroll tax relief and OH&S reform, at a local level, IBC championed a range of concerns relating to local issues including upgrading
34 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 35
the Princes Highway, the launch and establishment of the Wollongong Stock Exchange, the Wollongong CBD revitalisation strategy and the ongoing re-development of The Port of Port Kembla.
A major highlight was the Integral Energy Illawarra Business Awards held in November 2005, which was the year’s largest business award event in regional NSW, with 900 people in attendance. The awards celebrate the many achievements and diversity of the region’s economy and promote the importance of business and industry to the future growth and development of the Illawarra.
As with many regions, the skills shortage was a major concern for many employers. The continued success of the Illawarra, Shoalhaven & Highlands Apprenticeship Project was again a major highlight. Funded by the Commonwealth’s Department of Education, Science and Training, along with support
from the NSW government and TAFE, the project was the initiative of IBC in conjunction with a range of local stakeholders. Since commencing in April 2004 the Project has been successful in placing over 230 young people into apprenticeships with local employers, across a broad range of trade areas.
Coinciding with the federal government’s WorkChoices reforms, the IBC joined with ABL State Chamber in delivering an extensive education program for the region’s business community, this included seminars and workshops held in Wollongong, Nowra and Mittagong.
Reflecting the strength of its membership base, attendance at IBC’s monthly networking function, Business After Hours, continued to grow over the year with more than 250 members regularly attending and benefiting from increased exposure and networking opportunities with fellow members.
Central Coast
The Central Coast region is represented by a vibrant and growing business community, an increasing population and a rapidly expanding industrial sector. It is home to a diverse mix of established international businesses such as Sanitarium, Halley & Mellows, Scholastic and Sara Lee as well as local SMEs and service providers.
In tandem with this growth, ABL State Chamber’s presence also continued to flourish with over 1,100 members and associates represented in the area in 2005/2006.
The work of the Central Coast Office of ABL State Chamber has been integral to raising the region’s profile. Forging its presence as a facilitator and a channel working with business, government, the community, and educational sectors – to think and act collaboratively.
In addition to the region’s training programs, networking
Illawarra Business Chamber Integral Energy/IBC Awards 900 attendees
36 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 37
NSW/ACT REGIONS
at night sessions and workshops, a number of initiatives were implemented during the course of the year focusing on the key issues of labour shortages, workplace relations, infrastructure and manufacturing.
A survey of ABL State Chamber members on the Central Coast region undertaken in 2006, found that 63 percent of businesses reported difficulty employing skilled employees and 48 percent indicated that a significant challenge for those businesses establishing or relocating was recruiting a workforce with appropriate skills. In response ABL State Chamber initiated a Manufacturers’ Forum involving a number of local manufacturers where business, government and ABL State Chamber representatives spoke openly about the labour shortage, the difficulties they face in attracting skilled workers to their businesses and its deleterious effect on the industry.
The spotlight on employment continued throughout the year with implementation of a number of practical initiatives to combat the skills shortage. These included the launch of the Central Coast Trainee and Apprenticeship Consultative
Andrews Neil
Gosford-based company Andrews Neil is a multi -disciplined design, planning, and environmental consultancy group. The company takes a client’s block of land, conducts an environmental review, designs the building, looks at landscape treatment, gains planning approvals and supervises all building.
Principal Garry O’Dell explains: “We are a ‘one stop shop’ that provides an integrated range of commercial, institutional and residential business services Australia-wide.”
In the late 1990s they struggled to find the right workers. One successful solution they settled on was to employ apprentices through the Australian Business Apprenticeships Centre.
Apart from working closely with ABL State Chamber which has provided the company with legal, workplace, OHS advice and products it also sees value in working closely with the local university and its Cooperative Research Centre.
CASE STUDY
36 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 37
the ACT Chief Ministers Export Awards which celebrates the success of Canberra’s exporters.
The region’s event program continued to be well attended with networking functions attracting large numbers. Seminars on Superannuation, WorkChoices and business efficiency received favourable attendance and feedback. A highlight of the region’s event calendar was the annual ABL State Chamber Federal Budget Breakfast, held at Parliament House in conjunction with the National Institute of Accountants and CPA Australia, which attracted close to 500 guests.
employees continued to be a major issue for members. Roundtable discussions took place over the year to seek improvements and solutions to issues facing business owners including the upskilling of workers which was identified as the region’s number one business priority in ABL State Chamber’s ACT Business Priorities Report 2004.
ABL State Chamber strengthened its profile in the region through its ongoing involvement with business groups such as the Canberra Business Council and Capital Region Business Enterprise Centre. ABL State Chamber was also a major supporter of
medium size businesses and represent a wide range of industry sectors including agriculture, Information Communications and Technology (ICT), fabrication, light manufacturing, wine, communications, education, employment and training, industry groups and defence.
The Capital regional office, based in Barton, is also home to ABL State Chamber’s Defence Industry Unit, the Australian Business Limited Apprenticeships Centre and TradeStart; all of which have become an integral and invaluable part of ABL State Chamber’s service offering in the region.
The Hon. Kevin Andrews, Minister for Employment and Workplace Relations addressed ABL State Chamber members at a breakfast meeting at Old Parliament House, Canberra on the day the new WorkChoices Legislation was passed by Parliament. Since then, the region has been busy delivering seminars, training courses and demonstrating workplace tools to support members in the understanding and application of the new legislation.
The general shortage of skilled
Committee which was given a mandate to foster employment opportunities in the area and the Skills for Growth Program backed by AusIndustry. During its operation, the program has helped 122 businesses in the area, created 35 new jobs and 29 apprenticeship roles.
A networking event at Newcastle University’s Ourimbah Campus was held in 2005 as part of a scheme to keep graduates and the region’s intelligence within the district. This was the first initiative of its kind held in the region and saw at least five graduates offered positions by Central Coast businesses.
A stand-out in the region’s event calendar was the highly successful series of CEO breakfasts which provided a forum for business leaders to learn from expert guest speakers and discuss issues that affect them both nationally and globally.
Capital
ABL State Chamber’s Capital Region represents a strong membership base spread as far afield as Bega, Batemans Bay, Goulburn and Young. The majority of members operate small to
Capital Federal Budget Breakfast 500 guests
38 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 39
REGIONAL OFFICES
REGIONALOFFICES
Northern Rivers
Sharon Cadwallader – business managerKim Vincent – regional coordinatorUnit 2/54 Tamar StreetBallina NSW 2478Ph: 6686 8282Fax: 6686 9090
Mid North/New England
Kellon Beard – regional managerMaree McEntyre – regional coordinator146-148 Gordon StreetPort Macquarie NSW 2444Ph: 6584 0910Fax: 6584 0930
Peter Bastian – business development manager6/26 -28 Orlando StreetCoffs Harbour NSW 2450Ph:0409 861 805Fax: 6650 9539
Hunter Business Chamber
Acting CEO – Jill WybornLisa Hatherly – business development managerErin Marney – regional coordinator99 Selwyn StreetMayfield East NSW 2304Ph: 4969 9698Fax: 4969 9620
Central Coast
Mary Doherty – regional managerSteven Weber – business managerLee Slater – regional coordinatorUnit 3, 19 Reliance DriveTuggerah Business Park NSW 2259Ph: 4353 0763Fax: 4353 0752
Illawarra Business Chamber
Mark Grimson- CEOMichelle Todd – business development managerFiona Napier – regional coordinatorLevel 1, 87-89 Market StreetWollongong NSW 2500Ph: 4229 4722Fax: 4229 6392
Western Sydney/Sydney South, Sydney North
John Pearson – regional managerGlen Triebel – membership accounts team manager
Western Sydney
Gerry Loon – account managerKerrie-Anne McLeod – regional coordinator19 Fennell StreetNorth Parramatta NSW 2151Ph: 8838 0400Fax: 9630 4641
Sydney North
David Wilkinson – business development managerDebbie Cooper – regional coordinatorLevel 12140 Arthur StreetNorth Sydney NSW 2060Ph: 9458 7433Fax: 9954 5030
Sydney South
Greg Chambiras – business development managerMurray Osborne – account managerDebbie Cooper – regional coordinatorSuite 13710 Botany StreetMascot NSW 2020Ph: 9313 5680Fax: 9313 4038
Capital
Alex Kruczaj – business managerKate Holland – regional coordinatorLevel 1, John McEwen House7 National CircuitBarton ACT 2600Ph: 6273 6555Fax: 6273 6611
Murray/Riverina
Ann Cooper (Murray) –business managerRebecca Nagle – regional coordinatorSuite 8, 620 Macauley StreetAlbury NSW 2640Ph: 6041 4867Fax: 6041 5617
Domenic Fondacaro (Riverina) –business manager86 Yambil StreetGriffith NSW 2680Ph: 6962 9890Fax: 6964 9701
38 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 39
ORGANISATIONALSTRUCTURE
Economics and Tax Policy
Education and Training Policy
Environment Policy
Innovation Policy
OHS/Workers Compensation
Policy
Work Relations Policy
Public Affairs
Workplace Advice
Award Servicing
Defence Industry
Regional Network
Corporate Markets
Marketing, Public Relations & Communications
Alliances
Navigation
New Product Service & Development (including Publishing)
International TradeGeneral ManagerChristine Gibbs-Stewart
International Growth Specialists
TradeStart
Export Documentation
Finance
Chief Financial OfficerCompany SecretaryDenise Lindfield
Treasury
Aivars Berzins
Human Resources
General ManagerGeri Rigg
Information technology
Policy & Membership
General Manager
Paul Orton
Sales, Marketing & DistributionGeneral ManagerJon Moyes
Australian Business Limited Apprenticeships CentreGeneral ManagerDarren Cocks
Support
Members and Councillors
Board of Directors
CEO – Kevin MacDonald
Australian Business Lawyers Australian Business Foundation
Annual Report 2006 ABL State Chamber 41
BALANCE SHEET MEMBERSHIP
Australian Business Limited and Controlled EntitiesConsolidated Financial Statements 30 June 2006
HONORARYLIFE GOVERNORS
ABL COUNCILLORS
David Michaelis(Immediate Past President)Karen Wilson(President)Ian Penfold(Deputy President)Chris BaylissTom BowersPaul BrennanEllie BrownLeigh BryantHeather CleverleyJanine CullenStephen DavidsonMaris DerumsFraser DuffDavid EdgerleyJohn FaheyJudith FieldWayne GealeRobbi GillardRoger HoodGrahame HutchinsonStephen JoyceDavid KingKyle LoadesDavid MallochBrian MansellJohn MasonMarion MikkelsonMegan MottoPaul Murphy OAMGarry PearcePeter ReadTina ReynoldsBrent SincockTerence (Terry) WetherallJeffrey White
Bradley WilsonKevin Wright
ABL BOARD COMMITTEES
Audit & ComplianceDavid Michaelis (Chairman)Chris Bayliss Trevor CairneyIan PollardInvestment
Ian Pollard (Chairman)Grahame HutchinsonDavid MichaelisIan Penfold
Human Resources & SuccessionIan Penfold (Chairman)Chris BaylissMary Jo CappsDavid GilbertRoger Hood
Membership Sub-CommitteeChris Bayliss (Chairman)Paul BrennanHeather CleverlyJanine CullenDavid EdgerleyWayne GealeRobbi GillardMarion MikkelsonPeter ReadTerry Wetherall Jeffrey WhiteGreg WhiteleyKevin Wright
ABL COUNCIL COMMITTEES
DefenceBrian Mansell (Chairman)Christine AllardMichael BlakeBob CowanAshley DeaconDavid GaulBruce HamiltonHutch Hutchinson David MallochAnthony PattersonJeremy Ranicar
EnvironmentMaris Derums (Chairman)Peter HutchinsonCharles T KochMichael LeggoFabian SackHarley WrightAndrew Doig
International TradeGrahame Hutchinson(Chairman)Brad AwerbuchRussell BarrettRodney BoothGail BradfordGillis BroinoswkiLeigh BryantFraser DuffAmanda HicksRalph HillmanWilliam HutchinsonDavid KingPeter MurphyPaul OrtonMatthew Park
Di RobinsonAditya SwarupChris Gibbs StewartDianne Tipping
Learning, Education & TrainingJudith BowlerDon ConnochieJohn FaheyDon MouldMax Player
Occupational Health & SafetyMaris Derums Sharon EhretGregory FlynnMichael HambrookAndrew HarveyRoger HoodDavid KenvynSylvia Kidziak AMCharles T KochRichard LentferGeoff MeehanKen McCallPhilip NewbyPaul OrtonGreg PattisonRobert SamsLouise ThomsonMarlene WalshAnnette Williams
TaxationPeter Read (Chairman)Tony CarrollGraeme DossetorJonathan DoyJohn FaheyMax Hendriks
Mark HoltonRobert HornAyyaz HussainDavid MichaelisKevin Willits
AUSTRALIAN BUSINESS INDUSTRIAL COUNCIL
Workplace RelationsRoger Hood (Chairman)Liam BurnsColin BosworthTom BowersSusan ButterworthJo CairnsDon ConnochiePat Donovan Brian EichhornNora FentonAmanda GillisJack GoluzdJeff HowardDavid LongGlenn SouthwardPeter SmithRichard TaitAlistair TomlinsonNigel WardKaren WilsonSandra Ventre
Mr Arch J White Mr Hugh A May My Geoff A Binkowski Mr Brian E Smith Mr Neville SawyerDate elected: Date elected: Date elected: Date elected: Date elected:September 1985 December 1987 August 1993 November 1999 November 2005
Mr Warren D Adcock Mr Patrick Donovan Mr Terry Hunt Mr John T CameronOBE AM RFD EDDate elected: Date elected: Date elected: Date elected:February 1986 October 1992 November 1999 November 1999
ABL STATE CHAMBER COUNCILLORS
40 Australian Business Limited Annual Report 2006
Annual Report 2006 ABL State Chamber 41
BALANCE SHEET MEMBERSHIP
Australian Business Limited and Controlled EntitiesConsolidated Financial Statements 30 June 2006
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42 ABL State Chamber Annual Report 2006
BALANCE SHEET MEMBERSHIP
Australian Business Limited and Controlled EntitiesConsolidated Financial Statements 30 June 2006
Annual Report 2006 ABL State Chamber 43
Australian Business Limited and Controlled EntitiesConsolidated Financial Statements 30 June 2006
Directors’ Report 43
Corporate Governance Statement 48
Auditor’s Independence Declaration 51
FINANCIAL REPORT
Income Statements 52
Balance Sheets 53
Statement of Changes in Equity 54
Cash Flow Statements 55
Notes to the Consolidated Financial Statements 56
Directors’ Declaration 89
Independent Audit Report to Members 90
Contents
This financial report covers both Australian Business Limited as an individual entity and the consolidated entity consisting of Australian Business Limited and its subsidiaries. The financial report is presented in Australian currency.
Australian Business Limited is a company limited by guarantee, incorporated and domiciled in Australia. Its registered office and principle place of business is:
Australian Business Limited140 Arthur StreetNorth Sydney NSW 2060
A description of the nature of the consolidated entity’s operations and its principle activities is included in the review of operations and activities on page 43 in the directors’ report which is not part of this financial report.
The financial report was authorised for issue by the directors on 17 October 2006. The company has the power to amend and reissue the financial report.
All press releases, financial reports and other information are available at our website: www.australianbusiness.com.au
42 ABL State Chamber Annual Report 2006
BALANCE SHEET MEMBERSHIP
Australian Business Limited and Controlled EntitiesConsolidated Financial Statements 30 June 2006
Annual Report 2006 ABL State Chamber 43
Australian Business Limited and Controlled EntitiesConsolidated Financial Statements 30 June 2006
Your directors present their report on the consolidated entity (referred to hereafter as the Group) consisting of Australian Business Limited and the entities it controlled at the end of or during the year ended 30 June 2006.
Directors
The following persons held office as directors of Australian Business Limited during the whole of the financial year and up to the date of this report:
C Bayliss I B Penfold
G D Hutchinson I A Pollard
D Michaelis K L Wilson
B G Baker was a director from the beginning of the financial year until his resignation on 18 November 2005.
F M Bethwaite was a director from the beginning of the financial year until his resignation on 9 June 2006.
J Bingham was a director from his appointment on 17 February 2006 until his resignation on 1 August 2006.
J G Broinowski was a director from the beginning of the financial year until his retirement on 18 November 2005.
D J Malloch was a director from the beginning of the financial year until his resignation on 2 August 2006.
R L Hood was appointed a director on 18 November 2005 and continues in office at the date of this report.
Messrs T H Cairney, D R Gilbert and Ms M J Capps were appointed as directors on 17 February 2006 and continue in office at the date of this report.
Company Secretary
The following person held the position of company secretary at the end of the financial year; Ms D P Lindfield – Bachelor of Business, Chartered Accountant, Grad. Dip. Chartered Secretarial Practice, MAICD. Ms Lindfield has been employed by Australian Business Limited for the past 6 years performing financial roles. Ms Lindfield was appointed Chief Financial Officer and Company Secretary on 26 July 2004.
Principal activities
Australian Business Limited is a public company limited by guarantee. The company has no issued capital and the liability of the members is limited to a total of $10 per member. The Constitution does not permit the return of capital or the distribution of surplus by way of dividend.
The continuing activities of the consolidated entity during the course of the year were principally to promote Australian industry via the provision of business services. Its major funding activity to support the principal activities involves the management of a portfolio of investments.
Review of operations
The consolidated operating profit from ordinary activities including movement in market value of investments was $50,423,000 compared with an operating profit of $12,423,000 in the previous year. Net movement in market value of investments contributed $21,064,000 of the profit ($16,672,000 profit last year).
Significant changes in the state of affairs
On 17 February 2006 the parent entity merged with the State Chamber of Commerce.
On 19 December 2005 the parent entity sold the property at 140 Arthur Street North Sydney for $44,687,500 recognising a gain on sale of $25,468,000.
In the opinion of the directors there were no other significant changes in the state of affairs of the consolidated entity that occurred during the financial year under review which have not otherwise been disclosed in this report or the consolidated accounts.
Matters subsequent to the end of the financial year
No matter or circumstance or event of a material and unusual nature has arisen since the end of the financial year and up until the date of this report which is likely to significantly affect the operations of the consolidated entity, the results of those operations or the state of affairs of the consolidated entity, in future financial years.
Directors’ Report
44 ABL State Chamber Annual Report 2006
Australian Business Limited and Controlled EntitiesConsolidated Financial Statements 30 June 2006
Annual Report 2006 ABL State Chamber 45
Australian Business Limited and Controlled EntitiesConsolidated Financial Statements 30 June 2006
Directors’ Reportcontinued
Likely developments and expected results of operations
Likely developments in the operations of the consolidated entity and the expected results of those operations in subsequent financial years have not been included in this report because in the opinion of the directors, it would prejudice the interests of the consolidated entity.
Environmental regulation
The consolidated entity is not subject to significant environmental regulation.
Directors’ meetings and committees of directors
The number of directors’ meetings and meetings of committees of directors held in the period each director held office
during the financial year and the number of meetings attended by each director were: -
Board Meetings Investment Audit & Compliance HR & Succession Council
Directors Possible Attended Possible Attended Possible Attended Possible Attended Possible Attended
Wilson K L (President) 8 8 4 3 2 0 2 2 4 4Penfold I B(Deputy President) 8 5 5 3 * * 2 1 4 4
Baker B G 3 2 2 1 1 1 * * 2 1
Bayliss C 8 6 * * 3 3 2 2 4 3
Bethwaite F M (Managing Director) 7 7 4 3 * * 1 1 4 4
Bingham, J 2 2 * * * * * * 1 1
Cairney, T 2 2 * * * * * * 1 1
Capps, M J 2 2 * * * * 1 1 1 1
Broinowski J G 3 2 2 2 * * * * 2 2
Gilbert, D 2 2 * * * * * * 1 1
Hood R L 5 5 * * * * 1 1 4 4
Hutchinson G D 8 5 5 3 * * * * 4 1
Malloch D 8 8 5 5 * * 1 1 4 4
Michaelis, D 8 8 5 5 3 3 * * 4 4
Pollard I A 8 8 5 5 3 2 * * 4 4
* Not a member of the relevant committee
The special purpose Governance and nomination committee met four times during the year.
The President is an ex officio member of all Committees.
The Managing Director was an ex officio member of all Committees except the Audit & Compliance Committee.
44 ABL State Chamber Annual Report 2006
Australian Business Limited and Controlled EntitiesConsolidated Financial Statements 30 June 2006
Annual Report 2006 ABL State Chamber 45
Australian Business Limited and Controlled EntitiesConsolidated Financial Statements 30 June 2006
Karen L Wilson BA DipEd, FAICDAge 60President, Australian Business LimitedDirector, Angus & Coote Holdings LimitedDirector, ING Australia LimitedDirector, Ross Human Directions LimitedDirector, Sydney Chamber of CommerceDirector, Vision Group HoldingsFormer Managing Director, Estee Lauder Pty LimitedPast President, Chief Executive WomenPast President, Cosmetics, Toiletries & Fragrance Association of Australia
Christopher BaylissAge 55Director, Sydney Chamber of CommerceCouncillor since 1999Director, Institute of Trade Skills and ExcellenceCouncillor, Science Foundation Sydney UniversityWestern Sydney Councillor since 1997Western Sydney Regional President 2001-2003Managing Director, Brevini Australia Pty LtdChairman, Panbridge Pty LtdFormer Managing Director, Erico Industries Pty LimitedFormer General Manager, Pacific Waste
Special responsibilitiesMember, Audit & Compliance CommitteeMember, Human Resources & Succession Committee
Professor Trevor H Cairney BA, M. Litt, PhDAge 54Director, Greater West Development Fund LimitedChairman, Sydney Chamber of Commerce (since 2001), director since 1997Director, Southland College (since 2005)Chairman, CADRE Pty Limited (1997-2002)Director Westec Pty Limited (1997-2000)Director, Centre for Advanced Computing and Communication (2000-2002)
Special responsibilitiesMember, Audit & Compliance Committee
Mary Jo Capps MusBac, MAAge 51Director, Sydney Chamber of CommerceDirector, Victorian College of the ArtsDirector, Geraldine Pascall FoundationPast Deputy Chair, Australia Music CentreGeneral Manager, Musica Viva Australia
Special responsibilitiesMember, Human Resources & Succession Committee
David R GilbertAge 45Chief Executive Officer, NSW Cricket AssociationFormer Chief Executive Officer, Sussex County Cricket Club (UK)Director, Bradman FoundationDirector, Sydney Chamber of Commerce
Special responsibilitiesMember, Human Resources and Succession Committee
Roger L HoodAge 62Principal, Organisation ChangeWorksCouncillor since 2002President, Australian Business Industrial since 2001Director, Sydney Chamber of CommerceFormer Personnel Director, Unifoods Pty LtdFormer HR Director, Lever Rexona Division, Unilever Australia Limited
Special responsibilitiesChairman, Workplace Relations CommitteeMember, Human Resources and Succession Committee
Grahame Hutchinson B Tech, FAICDAge 64Councillor since 1991Director, Vulcanite Pty LimitedDeputy President Australian Business Limited 2002 – 2005
Special responsibilitiesChairman, International Trade CommitteeMember, Investment Committee
David Michaelis FAICD, FCISAge 62Deputy President 2001 - 2002Vice President 1990 - 2001President from 2003 - 2005Solicitor of the Supreme Court of England and Wales, & NSWCouncillor since 1988Chairman, ASSET LimitedDirector, John Young (Kelvinaugh) Pty LimitedDirector Australian Chamber of Commerce and IndustryDirector, Sydney Chamber of CommerceDirector, Australian Business Limited New Apprenticeships Centre Pty LimitedCommittee Member, Australian Council of Superannuation Investors (ACSI)
Special responsibilitiesChairman, Audit & Compliance CommitteeMember, Investment Committee
Profiles of each director of the Company and details of other interests are as follows:-
46 ABL State Chamber Annual Report 2006
Australian Business Limited and Controlled EntitiesConsolidated Financial Statements 30 June 2006
Annual Report 2006 ABL State Chamber 47
Australian Business Limited and Controlled EntitiesConsolidated Financial Statements 30 June 2006
Insurance of officers
During the financial year, Australian Business Limited (the company) paid a premium under a contract to insure directors, councillors and executive officers of the company and related bodies corporate. Disclosure of the premium payable under and a summary of the nature of liability covered by the insurance contract are prohibited by a confidentiality clause in the contract.
Proceedings on behalf of the company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the company, or to intervene in any proceedings to which the company is a party, for the purpose of taking responsibility on behalf of the company for all or part of those proceedings.
No proceedings have been brought or intervened in on behalf of the company with leave of the Court under section 237 of the Corporations Act 2001.
Non-audit services
The company may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor’s expertise and experience with the company and/or Group are important.
Details of the amounts paid or payable to the auditor (PricewaterhouseCoopers) for audit and non-audit services provided during the year are set out below.
The board of directors has considered the position and, in accordance with the advice received from the audit committee, is satisfied that the provision of the non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The directors are satisfied that the provision of non-audit services by the auditor, as set out below, did not compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons:
All non-audit services have been reviewed by the audit committee to ensure they do not impact the impartiality and objectivity of the auditor
None of the services undermine the general principles relating to auditor independence as set out in Professional Statement F1, including reviewing or auditing the auditor’s own work, acting in a management or a decision-making capacity for the company, acting as advocate for the company or jointly sharing economic risk and rewards.
Ian B Penfold ITESSA, FAICD
Age 52Deputy President Australian Business Limited 2005Councillor since 1997Managing Director Charles Parsons & Co Pty LimitedFormer Managing Director, Cork International Pty LimitedFormer Chairman & Managing Director, Speedo Australia Pty LimitedFormer President, Pentland Australia Pty LimitedFormer Chairman & Managing Director, Mitre Sports LimitedDirector, Sydney Chamber of Commerce
Special responsibilitiesChairman Human Resources & Succession CommitteeMember, Investment Committee
Ian A Pollard BA (Macq), MA (Oxon), DPhil (IMC), FIA, FIAA, DALF
Age 53Chairman, Corporate Express Australia LimitedDirector, DCA Group LimitedDirector, Milton Corporation LimitedChairman, RGA Reinsurance Australia (Group)Director, InTech Pty LimitedDirector, Just Group LimitedDirector, Sydney Chamber of CommerceMember, Advisory Council JP Morgan Australia
Special responsibilitiesChairman, Investment CommitteeMember, Audit & Compliance Committee
Directors’ Reportcontinued
46 ABL State Chamber Annual Report 2006
Australian Business Limited and Controlled EntitiesConsolidated Financial Statements 30 June 2006
Annual Report 2006 ABL State Chamber 47
Australian Business Limited and Controlled EntitiesConsolidated Financial Statements 30 June 2006
During the year the following fees were paid or payable for services provided by the auditor of the parent entity, its related practices and non-related audit firms: Consolidated 2006 2005 $000 $000
Assurance Services
1. Audit services
PricewaterhouseCoopers Australian firm: Audit and review of financial reports and other audit work under the Corporations Act 2001 130 110
Total remuneration for audit services 130 110
2. Other assurance services
PricewaterhouseCoopers Australian firm Audit of regulatory returns 2 2 Due diligence services 56 - AIFRS accounting services 9 - Other accounting services - 3
Total remuneration for other assurance services 67 5
Total remuneration for assurance services 197 115
Taxation Services
PricewaterhouseCoopers Australian firm: Taxation compliance services including review of income tax returns for entities in the group 10 7 Income tax review - ABF - 12 Income tax status review 15 -
Total remuneration for taxation services 25 19
Rounding of amounts
The company is of the kind referred to in Class Order 98/0100 issued by the Australian Securities and Investment Commission, relating to the “rounding off’ of amounts in the directors’ report and the financial report. Amounts in the directors’ report and financial report have been rounded off in accordance with that Class Order to the nearest thousand dollars, or in certain cases, to the nearest dollar.
Auditor’s Independence Declaration
A copy of the auditors’ independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 51.
Auditor
PricewaterhouseCoopers continues in office in accordance with Section 327 of the Corporations Act 2001.
Signed at Sydney in accordance with a resolution of directors.
17 October 2006
K Wilson I Penfold
President Deputy President
48 ABL State Chamber Annual Report 2006
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Annual Report 2006 ABL State Chamber 49
Australian Business Limited and Controlled EntitiesConsolidated Financial Statements 30 June 2006
This statement outlines the main Corporate Governance practices in place throughout the financial year (unless otherwise stated). These practices are dealt with under the following major headings: Board of Directors and its Committees, Risk Management and Internal Control Framework, Ethical Standards and Environment
Board of Directors and its Committees
Role of the Board
The Board of Directors acknowledges its primary role is the protection of total members’ equity and the creation of long term membership value. To fulfil this role, the Board has overall responsibility for the Corporate Governance of the Company including strategic direction, the establishment of objectives for management and monitoring the achievement of those objectives, the review of Chief Executive Officer and senior management performance, establishing a framework for the management of major business risk and ensuring that policies and procedures are in place to satisfy the Company’s legal and ethical responsibilities.
Board Processes
The powers of the Board of Directors are determined by the Company’s Constitution and the Corporations Act 2001.
The Directors meet as a Board on a regular basis throughout the year, and in 2005/06 met on eight occasions. The Directors also participated in additional Corporate Governance and strategy meetings. The table contained in the Directors’ Report at page 44 sets out the number of meetings of the Board and its Committees during the year and the attendance of Directors at those meetings.
An Audit & Compliance Committee, an Investment Committee and a Human Resources & Succession Committee are in place. These Committees operate under the charters approved by the Board. The Board has also established a special purpose Governance & Nomination Committee which meets as required.
The Chief Executive Officer, in consultation with the President, prepares the agenda for each Board meeting and papers are circulated in advance of each meeting.
The Board undertakes a review of its own performance and processes on a regular basis and the President conducts an individual Non-Executive Director performance evaluation, prior to the expiry of each Director’s term of appointment when consideration is being given to whether the Director should stand for re-election.
Periodically, Non-Executive Directors provide feedback to the President on her performance.
Composition of the Board
In accordance with the Constitution, the Board of Directors shall consist of not less than eight and not more than ten persons.
Currently there are ten Directors on the Board all of whom, including the President are Independent Non-Executive Directors.
Details of the Directors are set out on pages 45 to 46 of this Annual Report.
The composition of the Board is reviewed on a regular basis and at least every two years, to ensure that it contains the appropriate mix of experience and expertise. When it is considered that the Board would benefit from the services of a new director with particular skills, the Board determines the selection criteria. Potential candidates are identified. The Board then proposes to the ABL Council the most suitable candidate to join the Board. Under the Company’s Constitution, that appointee must stand for election at the next Annual General Meeting of members.
Regard is had to the following matters when considering the composition of the Board: the Board should contain an appropriate blend of skills, attributes and experience having regard to its needs at any given time the President of the Board should be an independent Non-Executive Director who has served on the Company’s Council the Board should comprise a majority of independent Non-Executive Directors the Company’s Constitution prescribes that all Board members shall retire biennially the ABL Council then elects the President, Deputy President and five Board Members. Board Members may elect the CEO as a director, who does not have to retire biennially, and up to two other Directors nominated by the
President.
Board Committees
Details, including function and membership of the Board Committees are set out below. Particulars of meetings held and attendances are shown in the Directors’ Report at page 44.
ABL Corporate GovernanceStatement
48 ABL State Chamber Annual Report 2006
Australian Business Limited and Controlled EntitiesConsolidated Financial Statements 30 June 2006
Annual Report 2006 ABL State Chamber 49
Australian Business Limited and Controlled EntitiesConsolidated Financial Statements 30 June 2006
Audit & Compliance Committee
The Committee is responsible for monitoring the management of operational, financial and business risks in the Group. It ensures the reliability of management and financial reports and compliance with the relevant legislation and regulations. It is also responsible for reviewing the efficiency and effectiveness of the external audit and internal controls.
All members of the Committee are independent Non-Executive Directors. Management, including the Chief Executive Officer and the Chief Financial Officer, and the relevant PricewaterhouseCoopers (PwC) partner, attend by invitation.
The responsibilities of the Committee include: ensuring the quality and accuracy of the financial report and other externally-distributed financial information; reviewing significant accounting issues and judgments; ensuring the maintenance of an appropriate internal control framework and where any deficiencies are identified, ensuring prompt
remedial action is taken by management; reviewing accounting policies to ensure compliance with all relevant Australian Accounting Standards, generally accepted accounting
principles and in future Australian equivalents to International Financial Reporting Standards; reviewing the annual external audit work plans; reviewing the performance of the external auditor and recommending appointment as appropriate; considering whether the non-audit services provided by the external audit firm are consistent with maintaining the external auditor’s
independence; ensuring any matters outstanding with the external auditor or regulatory authorities are appropriately addressed; reviewing its performance as an Audit Committee; reviewing the occupational health and safety procedures of the group; and reviewing the risk management procedures of the Group.
The Board has adopted a policy addressing the issue of audit independence and the undertaking of non-audit consultancy work by the Company’s external auditors, PwC, to ensure that at all times the external audit firm is independent of the Company and its management and directors. The policy identifies services which are considered to be in conflict with the role of the external auditor and as such should not be provided by the external audit firm. The external auditor is required to make an annual declaration of independence to the Board and submit a written statement to the Committee outlining the relationships with the Company.
External audit partners are now required to rotate after a maximum of five years.
The Audit Committee met three times during 2005/06. It is currently comprised of four independent Directors namely, D Michaelis (Chairman), C Bayliss, T Cairney and I Pollard.
The external auditor meets separately on a yearly basis with the Committee, without management present, to ensure full and frank discussion of audit issues. The external auditor is requested to attend the annual general meeting and be available to answer member questions about the conduct of the audit and the preparation and content of the audit report.
The Committee Chairman reports to the Board subsequent to each Committee meeting.
Investment Committee:
The Committee was established by the Board and is responsible for complying with the Investment Committee Charter.
The Committee is responsible for the management of the Company’s substantial investment portfolio to ensure strategic plan outcomes by maximising the return on investment and adherence to the Investment Policy.
The Investment Committee met five times during 2005/06. It is currently comprised of four independent Directors, namely I Pollard (Chairman), G Hutchinson, D Michaelis and I Penfold.
Human Resources & Succession Committee:
The Committee was established by the Board and is responsible for complying with the Human Resources & Succession Charter.
The Committee is responsible for the development and monitoring of the Company’s employment and remuneration policies.
The Human Resources & Succession Committee met twice during 2005/06. It is currently comprised of five independent Directors, namely I B Penfold (Chairman), C Bayliss, M J Capps, R Hood and D Gilbert.
ABL Corporate GovernanceStatement
50 ABL State Chamber Annual Report 2006
Australian Business Limited and Controlled EntitiesConsolidated Financial Statements 30 June 2006
Annual Report 2006 ABL State Chamber 51
Non-Executive Directors’ Remuneration
Non-Executive Directors’ fees are reviewed by the Human Resources & Succession Committee and determined by the Board, in accordance with the Company’s Constitution, within the maximum aggregate annual amount of $600,000 which was approved by members at the 2001 Annual General Meeting.
The fees for President, Committee Chairmen and the other Non-Executive Directors are determined by having particular regard to fees paid to non-executive directors of peer group companies and other similar organisations.
Conflict of Interest
Directors are required to keep the Board advised, on an on going basis, of any interests that could potentially conflict with those of the Company. The Board has adopted procedures covering disclosure of interests by Directors which establish how actual or potential conflicts of interest are to be addressed. In any instance where the Board believes that a conflict exists, the Director concerned would not receive the relevant Board papers and would not participate in that part of the meeting where the item is considered.
Independent Professional Advice and Access to Company Information
Each Director has the right of access to all relevant Company information and, subject to prior consultation with the President, is entitled to seek independent professional advice in relation to matters pertaining to the performance of their role, at the Company’s cost.
Risk management and internal control framework
Financial Risk Management
The Board acknowledges that it is responsible for the overall internal control and risk management framework of the Company. To assist in discharging this responsibility, the Board has put in place a control framework that can be described as follows:-
Financial Reporting - a comprehensive Budget is prepared annually by Management and approved by the Directors. Management reports results monthly against that Budget and revised forecasts are prepared regularly. The Company reports regularly to the ABL Council.
Investment Appraisal - The Company has clearly defined guidelines covering capital expenditure. These include annual Budgets, detailed appraisal and review procedures, and authority levels and structured due diligence procedures prior to business acquisitions or divestments and post audits of significant capital expenditure items.
Business Risk Management, Compliance and Control
Management of risk is an essential component of the Company’s strategy. This involves management of operational, financial and business risk.
The Company’s approach to investment risk overseen by the Investment Committee is as set out earlier in this Corporate Governance Statement and the exposure to risk is stated at Note 2 in the 2005/06 Annual Financial Report.
Comprehensive practices are in place in the following non-financial areas to ensure: occupational health, safety and environment, quality standards and management information systems deliver high standards of
performance and compliance with regulations; business transactions are properly authorised and executed; appropriate internal compliance and control procedures are operating effectively; appropriate retention and succession planning; trade practices and fair trading regulation compliance; and property loss control measures at business sites are effective.
Ethical standards
The Directors acknowledge the imperative of maintaining the highest standards of ethical conduct and legal compliance by all Directors and employees of the consolidated entity. The consolidated entity has in place a Code of Conduct and a number of codes and policies in areas such as discrimination, harassment and disclosure of interests.
No donations were made to any political party or candidate for political office during the year.
Environment
Australian Business Limited is committed to the protection of the environment, to the health and safety of its employees, customers and the public at large, and to compliance with all applicable environmental laws, rules and regulations in the jurisdictions in which it conducts its business.
The Company has determined that it complies with all relevant environmental legislation.
ABL Corporate GovernanceStatement
50 ABL State Chamber Annual Report 2006
Australian Business Limited and Controlled EntitiesConsolidated Financial Statements 30 June 2006
Annual Report 2006 ABL State Chamber 51
Australian Business Limited and Controlled EntitiesAuditor’s Independence Declaration
52 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 53
Consolidated Parent Entity
2006 2005 2006 2005
Notes $000 $000 $000 $000
Revenue from continuing operations 4 50,424 37, 646 39,222 29,202
Other income 5 47,136 17,211 47,130 17,188
Employee benefits expense (22,597) (22,005) (15,950) (16,934)
Depreciation and amortisation expense 6 (2,694) (3,600) (2,658) (3,587)
Advertising and marketing (1,912) (2,469) (1,817) (2,002)
Building expenses (691) (856) (560) (856)
Business establishment expense (188) - (188) -
Consultants (4,020) (2,673) (3,527) (2,421)
Impairment of Goodwill (1,970) - - -
Maintenance expense (557) (596) (554) (596)
Management fees – investments (2,738) (2,168) (2,738) (2,168)
Motor vehicle expense (1,076) (1,062) (43) (55)
Printing and stationery expense (310) (415) (113) (239)
Finance Costs 6 (734) - (734) -
Provision for non recovery of debt in controlled entities - - (1,951) (1,381)
Provision for non recovery of working capital loan to unrelated corporation - (200) - (200)
Provision for non recovery of retentions from sale of building (598) - (598) -
Provision for non recovery of WIP 134 35 - -
Sponsorship (542) (1,041) (540) (1,005)
Telephone and facsimile expense (1,088) (1,006) (626) (477)
Travel expense (760) (855) (510) (628)
Other expenses from ordinary activities (4,796) (3,119) (2,181) (762)
Profit before income tax expense 50,423 12,827 51,064 13,079
Income tax expense 7 - - - -
Net Profit from continuing operations 50,423 12,827 51,064 13,079
Loss from discontinued operations 8 - (404) - (404)
Net Profit attributable to members of Australian Business Limited 23 50,423 12,423 51,064 12,675
The above income statements should be read in conjunction with the accompanying notes
Income StatementsFor the year ended 30 June 2006
Australian Business Limited and Controlled EntitiesIncome Statements for the year ended 30 June 2006
52 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 53
Consolidated Parent Entity
2006 2005 2006 2005
Notes $000 $000 $000 $000
ASSETS
CURRENT ASSETS
Cash and cash equivalents 9 26,731 32,746 25,088 32,206
Trade and other receivables 10 10,732 12,307 10,399 11,258
Other financial assets at fair value through profit or loss 11 321,162 256,133 321,162 256,133
TOTAL CURRENT ASSETS 358,625 301,186 356,649 299,597
NON-CURRENT ASSETS
Receivables 12 10,743 1,300 10,743 1,300
Investments accounted for using the equity method 13 - - - -
Other financial assets 14 - - - -
Property, plant and equipment 15 1,987 20,457 1,894 20,457
Investment properties 16 733 - - -
Intangible assets 17 5,066 1,832 5,066 1,832
TOTAL NON-CURRENT ASSETS 18,569 23,589 17,703 23,589
TOTAL ASSETS 377,194 324,775 374,353 323,186
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 18 12,036 10,474 8,683 8,985
Borrowings 19 66 - 66 -
Provisions 20 614 395 614 395
TOTAL CURRENT LIABILITIES 12,716 10,869 9,363 9,380
NON-CURRENT LIABILITIES
Borrowings 21 65 - 65 -
Provisions 22 550 466 421 367
TOTAL NON-CURRENT LIABILITIES 615 466 486 367
TOTAL LIABILITIES 13,331 11,335 9,849 9,747
NET ASSETS 363,863 313,440 364,503 313,439
EQUITY
Reserves 23 - 104,379 - 104,379
Retained Profits 23 363,863 209,061 364,503 209,060
TOTAL EQUITY 363,863 313,440 364,503 313,439
The above balance sheets should be read in conjunction with the accompanying notes
Balance SheetsAs at 30 June 2006
Australian Business Limited and Controlled EntitiesBalance Sheets as at 30 June 2006
54 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 55
Consolidated Parent Entity
2006 2005 2006 2005
Notes $000 $000 $000 $000
Total Equity at the beginning of the financial year 209,061 301,017 209,060 300,764
Profit for year 50,423 12,423 51,064 12,675
Transfer from asset revaluation reserve from sale of building 23 2,900 - 2,900 -
Transfer from capital reserve 23 101,479 - 101,479 -
Total equity at the end of year 363,863 313,440 364,503 313,439
The above statement of changes in equity should be read in conjunction with the accompanying notes.
Statement of Changes in EquityFor the year ended 30 June 2006
Australian Business Limited and Controlled EntitiesStatements of Changes in Equity for the year ended 30 June 2006
54 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 55
Consolidated Parent Entity
2006 2005 2006 2005
Notes $000 $000 $000 $000
Cash Flows from operating activities
Net withdrawal from/(additions to) managed investments 26,199 45,098 26,199 45,098
Receipts from other income 19,931 17,244 7,908 6,967
Receipts from members 4,393 3,049 3,766 3,049
Property rentals received 1,786 1,900 1,341 1,900
Other interest received 1,586 1,484 1,555 1,526
53,896 68,775 40,769 58,540
Payments to suppliers and employees (45,087) (39,596) (31,848) (28,832)
Net cash inflow/(outflow) from operating activities 33 8,809 29,179 8,921 29,708
Cash flows from investing activities
Payments for motor vehicles, office furniture and equipment (279) (621) (279) (621)
Proceeds from sale of plant and equipment 43,688 25 43,688 25
Net sale/(purchase) of managed investments (43,688) - (43,688) -
Investments in subsidiaries - - (179) -
Payments for intangibles (103) (237) (103) (237)
Funding of subsidiaries - - (1,809) (484)
Funding of related parties (13,900) - (13,900) -
Funding of unrelated parties 100 100 100 100
Borrowings 131 - 131 -
Payment for investment property (773) - - -
Net cash inflow(outflow) from investing activities (14,824) (733) (16,039) (1,217)
Net increase (decrease) in cash held (6,015) 28,446 (7,118) 28,491
Cash at the beginning of the financial year 32,746 4,300 32,206 3,715
Cash at the end of the financial year 9 26,731 32,746 25,088 32,206
The above cash flow statements should be read in conjunction with the accompanying notes.
Statements of Cash FlowsFor the year ended 30 June 2006
Australian Business Limited and Controlled EntitiesCash Flow Statements for the year ended 30 June 2006
56 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 57
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted in the preparation of the financial report are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. The financial report includes separate financial statements for Australian Business Limited as an individual entity and the consolidated entity consisting of Australian Business Limited and its subsidiaries.
(a) Basis of Preparation
This general purpose financial report has been prepared in accordance with Australian equivalents to International Reporting Standards (AIFRS), other authoritative pronouncements of the Australian Accounting Standards Board, Urgent Issues Group Interpretations and the Corporations Act 2001.
Compliance with IFRSs
Australian Accounting Standards include AIFRSs. Compliance with AIFRSs ensures that the consolidated financial statements and notes of Australian Business Limited comply with International Financial Reporting Standards (IFRSs). The parent entity financial statements and notes also comply with IFRSs.
Application of AASB 1 First-time Adoption of Australian Equivalents to International Financial Reporting Standards.
These financial statements are the first Australian Business Limited financial statements to be prepared in accordance with AIFRSs. AASB 1 First time Adoption of Australian Equivalents to International Financial Reporting Standards has been applied in preparing these financial statements.
Financial statements of Australian Business Limited until 30 June 2005 had been prepared in accordance with previous Australian Generally Accepted Accounting Principles (AGAAP). AGAAP differs in certain respects from AIFRS. When preparing Australian Business Limited 2006 financial statements, management has amended certain accounting, valuation and consolidation methods applied in AGAAP financial statements to comply with AIFRS. The comparative figures in respect of 2005 were restated to reflect these adjustments. The Group has taken the exemption under AASB 1 to only apply AASB 132 and AASB 139 from 1 July 2005.
Reconciliations and descriptions of the effect of transition from previous AGAAP to AIFRSs on the Group’s equity and its net income are given in note 33.
Historical cost convention
These financial statements are prepared under the historical cost convention, except for investments, which are at fair value through profit or loss. Unless stated otherwise the accounting policies described below are consistent with those applied in the prior year. Comparative information is reclassified where appropriate to enhance comparability.
(i) Principles of Consolidation
(a) Subsidiaries
The consolidated financial statements incorporate the assets and liabilities of all entities controlled by Australian Business Limited (“parent entity”) as at 30 June 2006 and the results of all controlled entities for the year then ended. Australian Business Limited and its controlled entities together are referred to in this financial report as the consolidated entity. The effects of all transactions between entities in the consolidated entity are eliminated in full.
Where control of an entity is obtained during a financial year, its results are included in the consolidated statement of financial performance from the date on which control commences. Where control of an entity ceases during a financial year its results are included for that part of the year during which control existed.
(b) Associates
Associates are all entities over which the Group has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for in the parent entity financial statements using the cost method and in the consolidated financial statements using the equity method of accounting, after initially being recognised at cost.
The Group’s share of its associates’ post-acquisition profit or losses is recognised in the income statement, and its share of post-acquisition movements in reserves is recognised in reserves. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment.
When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured long-term receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate.
Australian Business Limited and Controlled EntitiesNotes to Consolidated Financial Statements 30 June 2006
Notes to Consolidated Financial Statements
56 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 57
(ii) Revenue Recognition
Revenue is measured at fair value of the consideration received or receivable. Amounts disclosed as revenue are net of returns, trade allowances and amounts collected on behalf of third parties. Revenue is recognised for the major business activities as follows:
1. Membership fees comprise annual subscriptions for the year brought to account on an accruals basis
2. Publication subscription income comprises annual subscriptions and is brought to account on an accruals basis
3. Other publications’ income is brought to account when goods are despatched to a customer pursuant to a sales order and the associated risks have passed to the customer
4. Rental income is brought to account on receipt
5. Other business services income is brought to account on delivery of service in accordance with engagement letters or other relevant contracts or agreements
6. Sponsorship and grants are brought to account when control is obtained. A liability is recognised for any unearned amounts.
(iii) Income Tax
The parent entity as a non-profit organisation is exempt from the payment of income tax and capital gains tax.
In respect of non-exempt controlled entities, tax effect accounting procedures are followed whereby the income tax expense for the period is the tax payable on the current period’s taxable income based on the national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements, and to unused tax losses.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.
(iv) Depreciation of Property, Plant and Equipment
All property, plant and equipment are stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.
Increases in the carrying amounts arising on revaluation of land and buildings are credited, net of tax, to other reserves in members’ equity.
Depreciation is calculated using the straight line method to allocate their cost or re-valued amounts, net of their residual values, over their estimated useful lives, as follows:
Plant, equipment and fitout 3 - 10 years
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.
(v) Investments
The Group classifies its listed investment portfolio as fair value through profit or loss as it most accurately reflects the way management monitor and control these investments. Management determines the classification of its investments at the time of initial recognition.
Financial assets at fair value through profit or loss are financial assets held for trading which are acquired principally for the purpose of selling in the short term with the intention of making a profit. Financial assets carried at fair value through profit or loss, are initially recognised at fair value and transaction costs are expensed in the income statement. The fair value of quoted investments is based on current bid prices.
Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group have transferred substantially all the risks and rewards of ownership. Financial assets at fair value through profit or loss are subsequently carried at fair value. Gains or losses arising from changes in the fair value of the ‘financial assets at fair value through profit or loss’ category, including interest and dividend income, are presented in the income statement within other income or other expenses in the period in which they arise.
Investments in controlled entities are brought to account in the parent entity at cost less a provision for diminution where appropriate.
Notes to Consolidated Financial Statements
Australian Business Limited and Controlled EntitiesNotes to Consolidated Financial Statements 30 June 2006
58 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 59
(vi) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the Group provides money, goods or services directly to a debtor with no intention of selling the receivable. They are included in current assets, except for those with maturities greater than 12 months after the balance sheet date which are classified as non-current assets. Loans and receivables are included in receivables in the balance sheet.
(vii) Cash and cash equivalents
For cash flow statement presentation purposes, cash and cash equivalents includes cash on hand, deposits at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
(viii) Employee Entitlements
Wages, salaries and annual leave
Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled within 12 months of the reporting date are recognised in other payables in respect of employees’ services up to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled.
Long Service Leave
The liability for long service leave is recognised in the provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the reporting date on national government bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.
Superannuation
The consolidated entity contributes to a number of compliant superannuation plans in Australia. The employees and employer make contributions as percentages of salary and in accordance with the relevant legislation.
Performance Related Remuneration
A liability for employee benefits in the form of performance related remuneration plan is recognised in other creditors when there is no realistic alternative but to settle the liability and at least one of the following conditions is met:
there are formal terms in the plan for determining the amount of the benefit
the amounts to be paid are determined before the time of completion of the financial report, or
past practice gives clear evidence of the amount of the obligation.
Liabilities for the performance related remuneration plan is expected to be settled within 12 months and are measured at the amounts expected to be paid when they are settled.
Employee benefit on-costs
Employee benefit on-costs, including payroll tax, are recognised and included in employee benefit liabilities and costs when the employee benefits to which they relate are recognised as liabilities.
Termination benefits
Termination benefits are payable when employment is terminated before the normal retirement date, or when an employee accepts voluntary redundancy in exchange for these benefits. The Group recognises termination benefits when it is demonstrably committed to either terminating the employment of current employees according to a detailed format plan without possibility of withdrawal or providing termination benefits as a result of an offer made to encourage voluntary redundancy. Benefits falling due more than 12 months after balance sheet date are discounted to present value.
(ix) Trade Receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost, less provision for doubtful debts. Trade receivables are due for settlement no more than 30 days from the date of recognition.
Notes to Consolidated Financial Statements
Australian Business Limited and Controlled EntitiesNotes to Consolidated Financial Statements 30 June 2006
58 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 59
Collectibility of trade debtors is reviewed on an ongoing basis. Debts, which are known to be uncollectible, are written off. A provision for doubtful debts is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of receivables. The amount of the provision is recognised in the income statement.
(x) Trade and Other Payables
These amounts represent liabilities for goods and services provided to the consolidated entity prior to the end of the financial year and which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.
(xi) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of associated GST, unless GST incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the taxation authority is included with other receivables or payables in the balance sheet.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flow.
(xii) Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount has been readily estimated. Provisions are not recognised for future operating losses.
Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the balance sheet date. The increase in the provision due to the passage of time is recognised as interest expense.
(xiii) New accounting standards and UIG interpretations
Certain new accounting standards and UIG interpretations have been published that are not mandatory for 30 June 2006 reporting periods. The Group does not believe that these new standards and interpretations will impact the financial report of the Group had they been adopted for the current financial year. These standards and interpretations included:
1. UIG 4 Determining whether an Asset contains a Lease
2. UIG 5 Rights to interests arising from Decommissioning , Restoration and Environmental Rehabilitation Funds
3. AASB 2005-9 Amendments to Australian Accounting Standards [AASB 4, AASB 1023,AASB 139 & AASB 132]
4. AASB 7 Financial Instruments: Disclosures and AASB 2005-10 Amendments to Australian Accounting Standards [AASB 132, AASB 101, AASB 114, AASB 117, AASB 133, AASB 139, AASB 1, AASB 4, AASB 1023 & AASB 1038]
5. UIG 6 Liabilities arising from Participating in a Specific Market – Waste Electrical and Electronic Equipment
6. AASB 2005-6 Amendments to Australian Accounting Standards [AASB 121]
(xiv) Business combinations
The purchase method of accounting is used to account for all business combinations. Cost is measured as the fair value of the assets given, shares issued or liabilities incurred or assumed at the date of exchange plus costs directly attributable to the acquisition.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interest. The excess of the cost of acquisition over the fair value of the Group’s share of the identifiable net assets acquired is recorded as goodwill.
(xv) Investment property
Investment property, principally comprising a leasehold office building is held for long-term rental yields and is not occupied by the Group. Investment property is carried at fair value, representing open-market value determined annually by external valuers. Changes in fair values are recorded in the income statement.
Australian Business Limited and Controlled EntitiesNotes to Consolidated Financial Statements 30 June 2006
Notes to Consolidated Financial Statements
60 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 61
(xvi) Intangible assets - Goodwill
Goodwill represents the excess of the cost of acquisition over the fair value of the Group’s share of the net identifiable assets of the acquired subsidiary/associate at the date of acquisition. Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill is not amortised. Instead, goodwill is tested for impairment annually or more frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment losses.
(xvii) Leases
Leases of property, plant and equipment in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases (note 27). Payments made under operating leases (net of any incentives received from the lessor) are charged to the income statement on a straight line basis over the period of the lease.
Lease income from operating leases is recognised in income on a straight line basis over the lease term (note 16).
(xviii) Rounding of amounts
The company is of the kind referred to in Class Order 98/0100 issued by the Australian Securities and Investment Commission, relating to the “rounding off’ of amounts in the financial report. Amounts in the financial report have been rounded off in accordance with that Class Order to the nearest thousand dollars, or in certain cases, to the nearest dollar.
2. FINANCIAL RISK MANAGEMENT
The Group’s activities expose it to a variety of financial risks with respect to the investment portfolio market risk and cash flow interest rate risk. The Group’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the Group. Key features of the risk mitigation strategy adopted by the Board of Directors include:
(a) Market Risk
(i) Appointment of an investment committee As a sub-committee of the Board, the investment committee is responsible for monitoring the performance of the appointed
investment consultant, custodian and investment managers. The investment committee reviews the investment strategy to reduce the volatility of mix of investment classes within the portfolio and recommends action to the Board.
(ii) Appointment of custodian and investment consultant The appointment of a custodian and investment consultant is to enhance the security of the Group’s investments and to report on
the performance of the fund managers. (iii) Yale Formula The Board has implemented a strategy of drawdown from the investment portfolio to finance ongoing activities of the Group whilst
preserving the real value of the portfolio in perpetuity.
(b) Cash flow interest rate risk
As the Group has no significant interest-bearing assets, the Group’s income and operating cash flows are not materially exposed to changes in market interest rates.
3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under the circumstances.
(a) Critical accounting estimates and assumptions
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under the circumstances.
(i) Estimated impairment of goodwill The Group tests annually whether goodwill has suffered any impairment, in accordance with the accounting policy stated
in note 1 (xvi).
Australian Business Limited and Controlled EntitiesNotes to Consolidated Financial Statements 30 June 2006
Notes to Consolidated Financial Statements
60 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 61
Consolidated Parent Entity
2006 2005 2006 2005
$000 $000 $000 $000
4. REVENUE
From continuing operations
Fee for service and other income 16,910 13,748 4,012 2,328
Employee Assistance - - 2,441 2,997
Membership fees (note a) 3,404 2,939 3,095 2,939
20,314 16,687 9,548 8,264
Other revenue
Dividend income from managed investments 26,199 17,317 26,199 17,317
Interest income from managed investments 1,513 1,481 1,513 1,481
Interest income from other corporations 73 66 42 45
Interest income from other related parties 725 - 725 -
Royalties (24) 368 (24) 368
Rents and sub-lease rentals 1,624 1,727 1,219 1,727
30,110 20,959 29,674 20,938
Revenue from continuing operations 50,424 37,646 39,222 29,202
(a) Members of Illawarra and Hunter Business Chambers are also members of Australian Business Limited. 2006 membership fees excludes $1,009,586 (2005 $952,003) of membership fees received by these organisations.
From discontinued operations (note 8)
Fee for service and other income - 1,957 - 1,957
5. OTHER INCOME
Net gain on disposal of property, plant & equipment (note a) 25,468 125 25,468 125
Government Grants (note b) 604 414 598 391
Fair value gain on other financial assets at fair value through profit/(loss) (note 11)
Movement in market value of investments
- realised (gain)/loss 11,304 8,679 11,304 8,679
- unrealised (gain)/loss 9,760 7,993 9,760 7,993
47,136 17,211 47,130 17,188
In addition to the above revenue disclosure, the consolidated entity’s managed funds are traded by the appointed Fund Managers in the financial markets for the purpose of deriving further investment returns. The total proceeds arising were then reinvested into marketable securities.
(a) Net Gains on disposal of property, plant and equipment
The consolidated net gain on disposal of property, plant and equipment in 2006 includes a gain of $25,468,000 on sale of land and buildings.
(b) Government Grants
Grants of $603,661 (2005:$413,593) were recognised as other income by the Group during the financial year. A number of these grants extend into 2007 and will be acquitted in accordance with the terms of the grants. There are no unfulfilled conditions or contingencies relating to the 2006 year attached to these grants. The Group did not benefit from any other forms of government assistance.
Australian Business Limited and Controlled EntitiesNotes to Consolidated Financial Statements 30 June 2006
Notes to Consolidated Financial Statements
62 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 63
Consolidated Parent Entity
2006 2005 2006 2005
$000 $000 $000 $000
6. EXPENSES
Profit before income tax includes the following specific expenses:
Depreciation
- building 393 841 393 841
- plant and equipment 1,075 1,335 1,040 1,323
Total depreciation 1,468 2,176 1,433 2,164
Amortisation
- Development costs 1,226 1,424 1,225 1,423
Total amortisation 1,226 1,424 1,225 1,423
Finance costs
- General interest and finance charges paid/payable 9 - 9 -
- Capitalised interest now expensed (note 17) 725 - 725 -
Finance costs expensed 734 - 734 -
Rental expense relating to operating leases
- Minimum lease payments 2,767 1,731 1,114 1,007
Net loss on disposal of property, plant & equipment - 12 - 12
Fair value adjustment relating to investment property 67 - - -
Australian Business Limited and Controlled EntitiesNotes to Consolidated Financial Statements 30 June 2006
Notes to Consolidated Financial Statements
62 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 63
Consolidated Parent Entity
2006 2005 2006 2005
$000 $000 $000 $000
7. INCOME TAX EXPENSE
(a) There is no income tax attributable in either financial period for the parent entity. As a non-profit organisation it is exempt from the payment of Income Tax and Capital Gains Tax. All non-exempt controlled entities have accumulated carry forward tax losses and are not liable for the payment of Income Tax or Capital Gains Tax.
(b) Numerical reconciliation of income tax to prima facie tax payable
Profit from continuing operations before income tax expense (334) (1,663) - -
Tax at the Australian tax rate on 30% (2005 – 30%) (100) (490) - -
Tax effect of amount which are not deductible (taxable) in calculating taxable income
Legal Fees - - - -
Depreciation - 3 - -
Entertainment 6 7 - -
Employee benefits 61 3 - -
Sundry Items 2 (71) - -
(31) (548) - -
Tax effect of tax losses not recognised carried forward to future years 31 548 - -
Income tax expense - - - -
(c) Tax losses
Unused tax losses for which no deferred tax asset has been recognised 19,343 19,238 - -
Potential tax benefit @ 30% 5,803 5,771 - -
All unused tax losses were incurred by Australian entities
(d) Tax consolidation legislation
Australian Business Limited and its wholly owned controlled entities have decided not to implement tax consolidation as of 1 July 2003.
Australian Business Limited and Controlled EntitiesNotes to Consolidated Financial Statements 30 June 2006
Notes to Consolidated Financial Statements
64 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 65
Consolidated Parent Entity
2006 2005 2006 2005
$000 $000 $000 $000
8. DISCONTINUED OPERATIONS
(a) Description
On 2 December 2004, the parent entity announced its intention to sell its registered training organisation. The sale took place on 15 April 2005 and is reported in this financial report as a discontinuing operation.
(b) Financial performance
The financial performance relating to the discontinued operation for the period 1 July 2004 to 15 April 2005 is as follows:
Revenue - 1,957 - 1,957
Expenses - (2,361) - (2,361)
Profit before income tax - (404) - (404)
Income tax expense - - - -
Net Profit after income tax of discontinued operation - (404) - (404)
The carrying amounts of assets and liabilities of the discontinued division at the date of sale were:
Total assets - (73) - (73)
Total liabilities
Net assets/(liabilities) - (73) - (73)
Details of the sale which have been incorporated into the prior year’s result are as follows:
Consideration received - 52 - 52
Carrying amount of liabilities assumed - 73 - 73
Profit on sale after income tax - 125 - 125
Income tax expense - - - -
Profit on sale after income tax - 125 - 125
Details of an earn out agreement entered into as part of the sale are described in note 26
(c) Put and call option agreement
During the year ended 30 June 2005 the parent entity entered into a put and call option agreement with respect to its shares in Small Business Training Company (SBTC). The agreement grants the parent entity a put option to require the purchaser to purchase the parent entity’s shares for the purchase price of $500K. A call option also requires the parent entity to sell to the purchaser the shares for $500K. Profit on sale will be recognised in the income statement if and when the option is exercised. At present fair value of this option is $nil.
In the event of the Put option being exercised the parties agreed that the purchaser will only be liable to pay the purchase price out of dividends received by the purchaser in its capacity as shareholder of SBTC. The purchaser reserves the right to pay the purchase price for the shares in cash.
Australian Business Limited and Controlled EntitiesNotes to Consolidated Financial Statements 30 June 2006
Notes to Consolidated Financial Statements
64 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 65
Consolidated Parent Entity
2006 2005 2006 2005
$000 $000 $000 $000
9. CURRENT ASSETS – CASH AND CASH EQUIVALENTS
Cash at bank and in hand 2,675 771 1,032 231
Deposits at call 86 82 86 82
Cash equivalents 23,970 31,893 23,970 31,893
26,731 32,746 25,088 32,206
Cash equivalents represent monies invested in the short term by fund managers
(a) Reconciliation to cash at end of year
The above figures are reconciled to cash at the end of the financial year as shown in the statement of cash flows as follows:
Balances as above 26,731 32,746 25,088 32,206
Balances as per Statement of Cash Flows 26,731 32,746 25,088 32,206
(b) Cash at bank and on-hand
The effective interest rate on short-bank deposits was 5.98% (2005: 5.67%)
(c) Deposits on call
The deposits are bearing floating interest rates between 5.93% and 6.03% (2005 – 5.61% to 5.67%)
(d) Cash Equivalents
Cash equivalents represent monies invested in the short term by fund managers
Australian Business Limited and Controlled EntitiesNotes to Consolidated Financial Statements 30 June 2006
Notes to Consolidated Financial Statements
66 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 67
Consolidated Parent Entity
2006 2005 2006 2005
$000 $000 $000 $000
10. CURRENT ASSETS – TRADE AND OTHER RECEIVABLES
Trade receivables 3,635 3,700 3,220 3,645
Less Provision for doubtful receivables (note c) (163) (355) (127) (321)
3,472 3,345 3,093 3,324
Investment income receivable 250 219 250 219
Unsettled investment sales 5,418 6,097 5,418 6,097
Loans to unrelated Entities 100 100 100 100
Prepayments 341 223 334 218
Other receivables 1,725 1,221 1,477 1,014
Provision for non-recovery (798) (200) (798) (200)
7,036 7,660 6,781 7,448
Work in progress 224 1,302 - -
Less provision for non recovery of WIP - - - -
224 1,302 - -
Amounts due from controlled entities - - 12,809 11,000
Provision for non-recovery - - (12,284) (10,514)
- - 525 486
10,732 12,307 10,399 11,258
(a) Other Receivables
These amounts generally arise from transactions outside the normal operating activities of the group.
(b) Effective interest rates and credit risk
Information concerning the effective interest rate and credit risk of both current and non-current receivables is set out in the non-current receivables note (note 12).
(c) Reconciliation of provision for doubtful debts
Carrying amount at the start of the year (355) (892) (321) (870)
Provision utilised during the year 233 380 219 372
Additional provision taken up (41) 156 (25) 176
Carrying amount at the end of the year (163) (355) (127) (321)
Australian Business Limited and Controlled EntitiesNotes to Consolidated Financial Statements 30 June 2006
Notes to Consolidated Financial Statements
66 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 67
Consolidated Parent Entity
2006 2005 2006 2005
$000 $000 $000 $000
11. CURRENT ASSETS – OTHER FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT AND LOSS
Commonwealth and Semi-government bonds 11,188 13,501 11,188 13,501
Shares and Units in Public Companies 250,035 190,521 250,035 190,521
Shares and Units in Unrelated Corporations (incl. Equity & pool trusts) 16,596 15,089 16,596 15,089
Other Investments (incl. Corporate Bonds and Investment Trust) 43,343 37,022 43,343 37,022
321,162 256,133 321,162 256,133
12. NON-CURRENT ASSETS - RECEIVABLES
Loans to unrelated entities 1,200 1,300 1,200 1,300
Loans to other related parties 9,543 - 9,543 -
10,743 1,300 10,743 1,300
(a) Fair Values
The fair values and carrying values of non-current receivables of the group are as follows:
2006 2005 Carrying Fair Carrying Fair amount value amount value
$000 $000 $000 $000
Loans to unrelated Entities 1,200 1,300 1,200 1,300
Loans to other related parties 9,543 - 9,543 -
10,743 1,300 10,743 1,300
The fair values are based on cash flows discounted using current capital rates of 5.1% (2005:5.4%)
(b) Interest Rate Risk
The Group’s exposure to interest rate risk and the effective weighted average interest rate by maturity periods is set out in the following tables:
Floating Non-interest Total Interest bearing Rate
2006 $000 $000 $000
Trade Receivables - 3,472 3,472
Unrelated parties receivables 1,200 - 1,200
Other related parties receivables - 9,543 9,543
Other receivables - 7,257 7,257
1,200 20,272 21,472
Australian Business Limited and Controlled EntitiesNotes to Consolidated Financial Statements 30 June 2006
Notes to Consolidated Financial Statements
68 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 69
Consolidated Parent Entity
2006 2005 2006 2005
$000 $000 $000 $000
12. NON-CURRENT ASSETS - RECEIVABLES – CONTINUED
2005
Trade receivables - 3,345 3,345
Unrelated parties receivables 1,300 - 1,300
Other receivables - 8,962 8,962
1,300 12,307 13,607
Weighted average interest rate 0% -
(c) Credit Risk
With the exception of other related party receivables there is no concentration of credit risk with respect to current and non-current receivables, as the Group has a large number of regionally dispersed customers. Refer to note 2 for more information on the risk management policy of the Group. Receivables from other related parties is fully secured by a fixed and floating charge over a portfolio of listed securities.
13. NON-CURRENT ASSETS – INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD
Shares in associates (note 31) - 40 - 40
- 40 - 40
(a) Shares in associates
Investments in associates are accounted for in the consolidated financial statements using the equity method of accounting and are carried at cost by the parent entity (refer note 14)
(c) Put and call option agreement (refer note 8)
14. NON-CURRENT ASSETS – OTHER FINANCIAL ASSETS
Shares in subsidiaries (Note 30) - - 15,480 15,300
Less provision for diminution in value - - (15,480) (15,300)
- - - -
These financial assets are carried at cost
Australian Business Limited and Controlled EntitiesNotes to Consolidated Financial Statements 30 June 2006
Notes to Consolidated Financial Statements
68 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 69
15. NON-CURRENT ASSETS – PROPERTY, PLANT AND EQUIPMENT
Furniture Freehold Freehold Motor Fittings and Leasehold Total Land Building Vehicles Equipment Improvements
$’000 $’000 $’000 $’000 $’000 $’000
Consolidated
At July 2004
Cost or fair value 8,000 16,787 243 9,485 6,944 41,460
Accumulated depreciation - (7,086) (105) (8,245) (4,113) (19,548)
Net book amount 8,000 9,701 138 1,241 2,832 21,911
Year ended 30 June 2005
Opening net book amount 8,000 9,701 138 1,241 2,832 21,911
Additions - - - 181 566 747
Disposals - - (38) - - (38)
Depreciation charge - (841) (27) (668) (627) (2,164)
Closing net book amount 8,000 8,8860 73 753 2,771 20,457
At 30 June 2005
Cost or fair value 8,000 16,787 152 6,504 7,511 38,955
Accumulated depreciation - (7,928) (79) (5,751) (4,740) (18,498)
Net book amount 8,000 8,860 73 753 2,771 20,457
Year ended 30 June 2006
Opening net book amount 8,000 8,860 73 753 2,771 20,457
Acquisition of subsidiary - - - 106 - 106
Additions - - - 152 127 279
Disposals (8,000) (8,466) - (15) (961) (17,442
Depreciation charge - (393) (19) (492) (509) (1,413)
Closing net book amount - - 55 504 1,428 1,987
At 30 June 2006
Cost or fair value - - 152 7,407 4,610 12,169
Accumulated depreciation - - (98) (6,903) (3,182) (10,182)
Net book amount - - 55 504 1,428 1,987
Australian Business Limited and Controlled EntitiesNotes to Consolidated Financial Statements 30 June 2006
Notes to Consolidated Financial Statements
70 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 71
15. NON-CURRENT ASSETS – PROPERTY, PLANT AND EQUIPMENT – CONTINUED
Furniture Freehold Freehold Motor Fittings and Leasehold Total Land Building Vehicles Equipment Improvements
$’000 $’000 $’000 $’000 $’000 $’000
Parent Entity
At July 2004
Cost or fair value 8,000 16,787 243 9,485 6,944 41,460
Accumulated depreciation - (7,086) (105) (8,425) (4,113) (19,548)
Net book amount 8,000 9,701 138 1,241 2,832 21,911
Year ended 30 June 2005
Opening net book amount 8,000 9,701 138 1,241 2,832 21,911
Additions - - - 181 566 747
Disposals - - (38) - - (38)
Depreciation charge - (841) (27) (668) (627) (2,164)
Closing net book amount 8,000 8,860 73 753 2,771 20,457
At 30 June 2005
Cost or fair value 8,000 16,787 152 6,504 7,511 38,955
Accumulated depreciation - (7,928) (79) (5,751) (4,740) (18,498)
Net book amount 8,000 8,860 73 753 2,771 20,457
Year ended 30 June 2006
Opening net book amount 8,000 8,860 73 753 2,771 20,457
Additions - - - 152 127 279
Disposals (8,000) (8,466) - (15) (961) (17,442)
Depreciation charge - (393) (19) (479) (509) (1,399)
Closing net book amount - - 55 412 1,428 1,894
At 30 June 2006
Cost or fair value - - 152 6,641 4,610 11,403
Accumulated depreciation - - (98) (6,230) (3,182) (9,509)
Net book amount - - 55 412 1,428 1,894
(a) Valuation of Land and Building
The land and buildings sold on 19 December 2005 was valued at its deemed cost.
The Asset Revaluation Reserve was transferred to Retained Profits on the sale of the building on 19 December 2005.
Australian Business Limited and Controlled EntitiesNotes to Consolidated Financial Statements 30 June 2006
Notes to Consolidated Financial Statements
70 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 71
Consolidated Parent Entity
2006 2005 2006 2005
$000 $000 $000 $000
16. NON-CURRENT ASSETS – INVESTMENT PROPERTIES
At Fair Value
Opening balance at 1 July - - - -
Acquisitions of subsidiary 840 - - -
Net gain (loss) from fair value adjustment (67) - - -
Closing balance at 30 June 773 - - -
(a) Operating amounts recognised in profit and loss for investment property
Rental income 193 - - -
Direct operating expenses from property that generated rental income (159) - - -
34 - - -
(b) Valuation basis
The basis of valuation of investment properties is fair value being the amount for which the properties could be exchanged between willing parties in an arm’s length transaction, based on current prices in an active market for similar properties in the same location and condition and subject to similar leases. The valuation was performed by the managing agent of the property.
(c) Contractual obligations
Refer note 27 for disclosure of any contractual obligation to purchase, construct or develop investment property or for repairs, maintenance or enhancements
(d) Leasing arrangements
The investment properties are leased to tenants under long-term operating leases with rentals payable monthly. Minimum lease payments receivable on leases of investment properties are as follows:
Minimum lease payments under non- cancellable operating leases of the investment property not recognised in the financial statements are receivables as follows:
Within one year 559 - - -
Later than one year but not later than five years 1,686 - - -
Later than five years - - - -
2,245 - - -
Australian Business Limited and Controlled EntitiesNotes to Consolidated Financial Statements 30 June 2006
Notes to Consolidated Financial Statements
72 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 73
Software Development Goodwill Capitalised Tatal Costs Interest
$000 $000 $000 $000
17. NON-CURRENT ASSETS – INTANGIBLE ASSETS
Consolidated
At July 2004
Cost 5,187 - - 5,187
Accumulated amortisation and impairment (2,198) - - (2,198)
Net book amount 2,989 - - 2,989
Year ended 30 June 2005
Opening net book amount 2,989 - - 2,989
Additions 237 - - 237
Amortisation charge (1,394) - - (1,394)
Closing net book amount 1,832 - - 1,832
At 30 June 2005
Cost 5,424 - - 5,424
Accumulated amortisation and impairment (3,592) - - (3,592)
Net book amount 1,832 - - 1,832
Year ended 30 June 2006
Opening net book amount 1,832 1,832
Additions 103 1,970 5,082 7,155
Impairment - (1,970) - (1,970)
Amortisation charge (1,226) - (725) (1,951)
Closing net book amount 709 - 4,357 5,066
At 30 June 2006
Cost 5,527 1,970 5,082 12,579
Accumulated amortisation and impairment (4,818) (1,970) (725) (7,513)
Net book amount 709 - 4,357 5,066
Australian Business Limited and Controlled EntitiesNotes to Consolidated Financial Statements 30 June 2006
Notes to Consolidated Financial Statements
72 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 73
Software Development Goodwill Capitalised Tatal Costs Interest
$000 $000 $000 $000
17. NON-CURRENT ASSETS – INTANGIBLE ASSETS – CONTINUED
Parent Entity
At July 2004
Cost 5,187 - - 5,187
Accumulated amortisation and impairment (2,198) - - (2,198)
Net book amount 2,989 - - 2,989
Year ended 30 June 2005
Opening net book amount 2,989 - - 2,989
Additions 237 - - 237
Amortisation charge (1,394) - - (1,394)
Closing net book amount 1,832 - - 1,832
At 30 June 2005
Cost 5,424 - - 5,424
Accumulated amortisation and impairment (3,592) - - (3,592)
Net book amount 1,832 - - 1,832
Year ended 30 June 2006
Opening net book amount 1,832 - - 1,832
Additions 103 1,970 5,082 7,155
Impairment - (1,970) - (1,970)
Amortisation charge (1,226) - (725) (1,951)
Closing net book amount 709 - 4,357 5,066
At 30 June 2006
Cost 5,527 1,970 5,082 12,579
Accumulated amortisation and impairment (4,818) (1,970) (725) (7,513)
Net book amount 709 - 4,357 5,066
The impairment charge arose with respect to the goodwill recognised on the merger with the State Chamber of Commerce following a decision to realign the strategy to focus on membership and events initiatives for the Sydney city region.
Australian Business Limited and Controlled EntitiesNotes to Consolidated Financial Statements 30 June 2006
Notes to Consolidated Financial Statements
74 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 75
Consolidated Parent Entity
2006 2005 2006 2005
$000 $000 $000 $000
18. CURRENT LIABILITIES – TRADE AND OTHER PAYABLES
Other receivables
Trade payables 895 1,224 820 1,002
Unsettled investment transactions 188 104 188 104
Grants unearned 139 198 139 198
Other payables 6,154 5,934 4,434 4,881
Deferred income 99 338 99 126
Membership fees and other income in advance 3,264 2,674 3,003 2,674
Refundable carnet premiums 1,297 2 - -
12,036 10,474 8,683 8,985
19. CURRENT LIABILITIES - BORROWINGS
Secured
Other Loans (refer note 21 (b)) 66 - 66 -
Total current borrowings 66 - 66 -
20. CURRENT LIABILITIES – PROVISIONS
Employee benefits – long service leave 614 395 614 395
614 395 614 395
Australian Business Limited and Controlled EntitiesNotes to Consolidated Financial Statements 30 June 2006
Notes to Consolidated Financial Statements
74 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 75
Consolidated Parent Entity
2006 2005 2006 2005
$000 $000 $000 $000
21. NON-CURRENT LIABILITIES – BORROWINGS
Secured
Other Loans 65 - 65 -
Total non-current borrowings 65 - 65 -
(a) Total secured liabilities
The total secured liabilities (current and non-current) are as follows:
Other Loans 131 - 131 -
Total secured liabilities 131 - 131 -
(b) Other Loans
Other loans are hire purchase agreements repayable over the next two years. These loans are secured by a fixed charge over the assets purchased via the loan.
(c) Interest rate risk exposure
The following table sets out the Group’s exposure to interest rate risk
Fixed Interest maturing in two years or less Total
2006 $000 $000
Other Loans 131 131
131 131
Weighted average interest rate 5.16%
Other Loans
(d) Fair Value
The carrying amount and fair value of borrowings at balance date are: 2006 2005 Carrying Carrying amount Fair value amount Fair value
$000 $000 $000 $000
On-balance sheet
Other Loans 131 131 - -
131 131 - -
None of the classes are readily traded on organised markets in standardised form
Fair value is inclusive of costs which would be incurred on settlement of a liability
(1) On-balance sheet
The fair value of borrowings is based upon the market prices where a market exists or by discounting the expected future cash flows by the current interest rate for liabilities with similar risk profiles.
Australian Business Limited and Controlled EntitiesNotes to Consolidated Financial Statements 30 June 2006
Notes to Consolidated Financial Statements
76 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 77
Consolidated Parent Entity
2006 2005 2006 2005
$000 $000 $000 $000
22. NON-CURRENT LIABILITIES – PROVISIONS
Employee benefits – long service leave 550 466 421 367
550 466 421 367
23. RESERVES AND RETAINED PROFITS
(a) Reserves
Property, plant and equipment reserve - 2,900 - 2,900
Capital reserve - 101,479 - 101,479
- 104,379 - 104,379
Movements
Property, plant & equipment revaluation reserve
Balance 1 July 2,900 2,900 2,900 2,900
Sale of asset – transfer to retained profits (2,900) - (2,900) -
Balance 30 June - 2,900 - 2,900
Capital Reserve
Balance 1 July 101,479 101,479 101,479 101,479
Transfer to retained profits (101,479) - (101,479) -
Balance 30 June - 101,479 - 101,479
(b) Retained profits
Movements in retained profits are as follows:
Balance 1 July 209,061 196,638 209,060 196,385
Transfer from PP&E revaluation reserve on sale of asset 2,900 - 2,900 -
Transfer from capital reserve 101,479 - 101,479 -
Net profit for the year 50,423 12,423 51,064 12,675
Balance 30 June 363,863 209,061 364,503 209,060
(c) Nature and purpose of reserves
(i) Property, plant and equipment revaluation reserve
The property, plant and equipment revaluation reserve is used to record increments and decrements on the revaluation of non-current assets, as describe in note 1(iv)
(ii) Capital Reserve
The capital reserve was maintained to fund future strategic initiatives of the group and has been transferred to retained profits
Australian Business Limited and Controlled EntitiesNotes to Consolidated Financial Statements 30 June 2006
Notes to Consolidated Financial Statements
76 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 77
Consolidated Parent Entity
2006 2005 2006 2005
$000 $000 $000 $000
24. KEY MANAGEMENT PERSONNEL DISCLOSUES
(a) Directors
The following persons were directors of Australian Business Limited during the financial year:
(i) President - non-executive
K L Wilson - elected President 18 November 2005
(ii) Deputy President - non-executive
I B Penfold - elected Deputy President 18 November 2005
(iii) Executive director
F M Bethwaite - Managing Director - (resigned 9 June 2006)
(iv) Non-executive directors
C Bayliss R L Hood - appointed 18 November 2005
J Bingham appointed 16 February and resigned 1 August 2006 G Hutchinson
Prof. T H Cairney - appointed 17 February 2006 D J Malloch - resigned 2 August 2006
M J Capps - appointed 17 February 2006 D Michaelis
D Gilbert - appointed 17 February 2006 I A Pollard
(b) Other key management personnel
Name Position
K J MacDonald Chief Executive Officer (from 11 June 2006) & General ManagerManager Operations (until 10 June 2006)
D P Lindfield Chief Financial Officer/Company Secretary
P H Orton General Manager Policy
G B Pattison General Manager Workplace Solutions
C Gibbs Stewart General Manager International Trade
D J Cocks General Manager Australian Business Apprenticeships Centre Pty Limited
D C Hirsch General Manager Information Technology
G A Rigg General Manager Human Resources
M H Osmond Chief Executive Officer - Sydney Chamber of Commerce(resigned 27 July 2006)
Short term employee benefits 1,962 1,741 1,962 1,741
Post-employment benefits - - - -
1,962 1,741 1,962 1,741
Australian Business Limited and Controlled EntitiesNotes to Consolidated Financial Statements 30 June 2006
Notes to Consolidated Financial Statements
78 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 79
Consolidated Parent Entity
2006 2005 2006 2005
$000 $000 $000 $000
25. REMUNERATION OF AUDITOR
During the year the following fees were paid or payable for services provided by the auditors of the parent entity, its related practices and non-related audit firms.
(a) Assurance Services
Audit Services
PricewaterhouseCoopers Australian firm
Audit and review of financial reports and other audit work under the Corporations Act 2001 130 110 130 110
Total remuneration for audit services 130 110 130 110
Other assurance services
PricewaterhouseCoopers Australian firm
Audit of regulatory returns 2 2 2 2
Due diligence Services 56 - 56 -
AIFRS accounting services 9 - 9 -
Other accounting services - 3 - 3
Total remuneration for other assurance services 67 5 67 5
Total remuneration for assurance services 197 115 197 115
(b) Taxation Services
PricewaterhouseCoopers Australian firm
Taxation compliance services including review of income tax returns for entities in the group 10 7 10 7
Income tax status review – Australian Business Foundation - 12 - 12
Income tax status review 15 - 15 -
Total remuneration for taxation services 25 19 25 19
It is the Group’s policy to employ PricewaterhouseCoopers on assignments additional to their statutory audit duties where PricewaterhouseCoopers’ expertise and experience with the Group are important. These assignments are principally tax advice and due diligence reporting on acquisitions, or where PricewaterhouseCoopers is awarded assignments on a competitive basis. It is the Group’s policy to seek competitive tender for all major consulting work.
26. CONTINGENCIES
(a) Contingent assets
Australian Business Limited has entered into an earn out agreement in connection with the disposal of 60% of the Small Business Training Company division (note 8). Additional cash consideration of up to $625,000 will be receivable by the consolidated entity if the operations of SBTC Pty Limited achieve specified performance criteria.
The contingent asset has not been recognised as a receivable at 30 June 2006 as the amount of the earn out is dependent on the future performance of the operations over the period from 15 April 2005 to 15 April 2012 and cannot be reliably measured at this stage.
Australian Business Limited and Controlled EntitiesNotes to Consolidated Financial Statements 30 June 2006
Notes to Consolidated Financial Statements
78 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 79
Consolidated Parent Entity
2006 2005 2006 2005
$000 $000 $000 $000
27. COMMITMENTS
(a) Capital commitments
Capital expenditure contracted for at the reporting date but not recognised as liabilities is as follows:
Investment property
Within one year 32 - 32 -
32 - 32 -
(b) Lease commitments
Commitments in relation to leases contracted for at the reporting date but not recognised as liabilities, payable:
Within one year 3,124 1,071 572 477
Later than one year but not later than five years 9,644 199 1,233 193
Later than five years 9,804 - 953 -
22,572 1,270 2,758 670
Representing:
Non-cancellable operating leases 22,572 1,270 2,758 670
Future finance charges on finance leases - - - -
22,572 1,270 2,758 670
(1) Operating leases
The Group leases various offices under non-cancellable operating leases expiring within one to ten years. The leases are for varying terms, escalation clauses and renewal rights. On renewal, the terms of the lease are negotiable.
The Group leases various motor vehicles, office and computer equipment under non-cancellable operating leases expiring within one to three years. These leases are for varying terms. On renewal, the terms of the leases are negotiable.
Commitments for minimum lease payments in relation to non-cancellable operating leases are payable as follows:
Within one year 3,124 1,071 572 477
Later than one year but not later than five years 9,644 199 1,233 193
Later than five years 9,804 - 953 -
22,572 1,270 2,758 670
Future minimum lease payments expected to be received in relation to non-cancellable sub-leases of operating leases 263 - - -
(c) Repairs and maintenance: Investment properties
Contractual obligations for future repairs and maintenance – not recognised as a liability 36 - 36 -
(d) Investing Commitments
A commitment for an investment in securities pursuant to the provisions of Trust Deeds dated 3 February 1998 and 24 September 2003 and 5 May 2006 managed by Macquarie Bank Limited
Due after one year dependent upon drawdowns 37,321 19,442 27,321 19,442
37,321 19,442 27,321 19,442
Australian Business Limited and Controlled EntitiesNotes to Consolidated Financial Statements 30 June 2006
Notes to Consolidated Financial Statements
80 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 81
Consolidated Parent Entity
2006 2005 2006 2005
$000 $000 $000 $000
28. RELATED PARTY TRANSACTIONS
(a) Parent entity
The parent entity and ultimate controlling party within the Group is Australian Business Limited
(b) Subsidiaries
Interests in subsidiaries are set out in note 30.
(c) Key management personnel
Disclosures relating to key management personnel are set out in Note 24
(d) Transactions with related parties
The following transactions occurred with related parties:
Sale of goods and services
Sale of human resource and support services to subsidiaries - - 1,072 1,514
Sale of human resource and support services to other related parties 165 134 165 134
Other transactions:
Remuneration paid to directors of the ultimate Australian parent entity 875 807 875 807
(e) Loans to/from related parties
Loans to subsidiaries
Beginning of the year - - 11,000 10,515
Loans advanced - - 6,001 4,556
Loan repayments received - - (4,192) (4,071)
Interest charged - - - -
Interest received - - - -
End of year - - 12,809 11,000
Loans to other related parties
Beginning of the year - - - -
Loans advanced 13,900 - 13,900 -
Loan repayments received - - - -
Interest charged 725 - 725 -
Interest received (725) - (725) -
End of year 13,900 - 13,900 -
Australian Business Limited and Controlled EntitiesNotes to Consolidated Financial Statements 30 June 2006
Notes to Consolidated Financial Statements
80 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 81
29. BUSINESS COMBINATIONS
(a) Summary of acquisition
On 16 February 2006 the parent entity acquired a controlling interest in State Chamber of Commerce
The acquired business contributed revenues of $995,000 and net loss of $286,000 to the Group for the period from 16 February 2006 to 30 June 2006.
Details of the fair value of the assets and liabilities acquired and goodwill are as follows:
Purchase consideration $000
Cash paid -
Direct costs relating to acquisition 179
Total purchase consideration 179
Fair value of net identifiable liabilities assumed 1,791
Goodwill 1,970
(b) Purchase consideration
Consolidated Parent Entity
2006 2005 2006 2005
$000 $000 $000 $000
Outflow of cash to acquire subsidiary, net of cash acquired
Cash consideration (179) - (179) -
Overdraft assumed (142) - (142) -
Outflow of cash (321) - (321) -
Acquiree’s Carrying Amount Fair value
$000 $000
(c) Assets and liabilities acquired
The assets and (liabilities) arising from the acquisition are as follows:
Cash (142) (142)
Trade receivables 185 185
Other receivables 198 198
Intercompany payable (531) (531)
Prepayments 11 11
Plant and equipment 105 105
Trade payables (100) (100)
Accruals (348) (435)
FFS in advance (1,066) (1,066)
York St lease 840 840
Carnet premiums (855) (855)
Net liabilities (1,703) (1,790)
The disclosures required under AASB 3 paragraph 70 can not be made following the decision to realign the State Chamber of Commerce strategy to focus on membership and events initiatives for the Sydney city region.
Australian Business Limited and Controlled EntitiesNotes to Consolidated Financial Statements 30 June 2006
Notes to Consolidated Financial Statements
82 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 83
30. SUBSIDIARIES
The consolidated financial statements incorporate the assets, liabilities and the results of the following subsidiaries in accordance with the accounting policy described in note 1 (a).
COUNTRY OF EQUITY HOLDING
INCORPORATION ACTIVITY 2006 2005
% %
Parent Entity
Australian Business Limited Australia Industry and Business Services Organisation
Controlled Entities
Australian Chambernet Pty Limited Australia Non Trading * 100 100
Australian Business Limited Apprenticeship Centre Pty Limited Australia Apprenticeship supplier 100 100
Workplaceinfo Pty Limited Australia Non Trading * 100 100
Australian Business Edge Pty Limited Australia Professional Services Industry and Business 100 100
Sydney Chamber of Commerce Australia Services Organisation # -
* These entities are not required to prepare audited statutory accounts
# Sydney Chamber of Commerce is a company limited by guarantee and Australian Business Limited (ABL) owns a special membership which entitles ABL to control of Sydney Chamber of Commerce.
Australian Business Limited and Controlled EntitiesNotes to Consolidated Financial Statements 30 June 2006
Notes to Consolidated Financial Statements
82 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 83
31. INVESTMENTS IN ASSOCIATES
(a) Carrying amounts
Information relating to associates is set out below:
Name of Company Principal Ownership activity interests Consolidated Parent Entity
2006 2005 2006 2005 2006 2005
% % $ $ $ $ Unlisted
Small Business Training Company 40 40 - 40 - 40
The above associate is incorporated in Australia
(b) Movement in carrying amounts
Carrying amount at thebeginning of the
financial year 40 40 40 40
Share of losses for year (40) - (40) -
Carrying amount at the end of the financial year - 40 - 40
c) Share of associate’s profit or losses
Profit (Loss) before income tax (420,193)
Income tax expense -
Profit (Loss) after income tax (420,193)
It is not expected that the associate will make a profit therefore according to the rules contained in AASB 128 no further losses are recognised where losses exceed the interest in the associate.
Australian Business Limited and Controlled EntitiesNotes to Consolidated Financial Statements 30 June 2006
Notes to Consolidated Financial Statements
Consolidated Parent Entity
2006 2005 2006 2005
$000 $000 $000 $000
32. RECONCILIATION OF OPERATING PROFIT/LOSS AFTER INCOME TAX TO NET CASH INFLOWS FROM OPERATING ACTIVITIES
Operating profit/(loss) after income tax 50,424 12,343 51,065 12,602
Depreciation and amortisation 2,693 3,570 2,658 3,558
Loss/(Profit) on sale of plant and equipment (25,468) (125) (25,468) (113)
Provision for non recovery of debt in controlled entity - - 1,951 1,379
Decrease/(increase) in trade debtors 65 837 423 852
Decrease/(increase) in other receivables 1,702 (1,686) 667 (2,387)
Decrease/(increase) in investments net of transfers (22,021) 14,261 (22,151) 14,261
Increase/(decrease) in creditors 1,303 1,386 (303) 870
Increase/(decrease) in other provisions 303 (870) 273 (765)
Provision for doubtful debts (192) (537) (194) (549)
Net cash inflow/(outflow) from operating activities 8,809 29,179 8,921 29,708
84 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 85
Parent
Consolidated Previous Entity
Previous transition to AIFRS AGAAP transition AIFRS
AGAAP AIFRS to AIFRS
Notes $000 $000 $000 $000 $000 $000
33. EXPLANATION OF TRANSITION TO AUSTRALIAN EQUIVALENTS TO IFRSs
(1) Reconciliation of equity reported under previous Australian Generally Accepted Accounting Principles (AGAAP) to equity under Australian equivalents to IFRSs (AIFRS)
(a) At the date of transition of AIFRS: 1 July 2004
ASSETS
CURRENT ASSETS
Cash and cash equivalents 4,300 - 4,300 3,715 - 3,715
Trade and other receivables 10,821 - 10,821 9,970 - 9,970
Other financial assets at fair value through profit or loss 270,394 - 270,394 270,394 - 270,394
TOTAL CURRENT ASSETS 285,515 - 285,515 284,079 - 284,079
NON-CURRENT ASSETS
Property, plant and equipment 24,901 - 24,901 24,901 - 24,901
TOTAL NON-CURRENTASSETS 24,901 - 24,901 24,901 - 24,901
TOTAL ASSETS 310,416 - 310,416 308,980 - 308,980
CURRENT LIABILITIES
Trade and other payables 7,588 - 7,588 6,616 - 6,616
Provisions (a) 1,070 81 1,151 866 71 937
TOTAL CURRENTLIABILITIES 8,658 81 8,739 7,482 71 7,553
NON-CURRENT LIABILITIES
Provisions (a) 661 1 662 661 4 665
TOTAL NON-CURRENTLIABILITIES 661 1 662 661 4 665
TOTAL LIABILITIES 9,319 82 9,401 8,143 75 8,218
NET ASSETS 301,097 (82) 301,015 300,837 (75) 300,762
EQUITY
Reserves 104,379 - 104,379 104,379 - 104,379
Retained earnings (c) 196,718 (82) 196,636 196,458 (75) 196,383
TOTAL EQUITY 301,097 (82) 301,015 300,837 (75) 300,762
Australian Business Limited and Controlled EntitiesNotes to Consolidated Financial Statements 30 June 2006
Notes to Consolidated Financial Statements
84 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 85
Parent
Consolidated Previous Entity
Previous transition to AIFRS AGAAP transition AIFRS
AGAAP AIFRS to AIFRS
Notes $000 $000 $000 $000 $000 $000
33. EXPLANATION OF TRANSITION TO AUSTRALIAN EQUIVALENTS TO IFRSs – CONTINUED
(b) At the date of last reporting period under previous AGAAP: 30 June 2005
ASSETS
CURRENT ASSETS
Cash and cash equivalents 32,746 - 32,746 32,206 - 32,206
Trade and other receivables (b) 12,307 - 12,307 11,260 (2) 11,258
Other financial assets at fair value through profit or loss 256,133 - 256,133 256,133 - 256,133
TOTAL CURRENT ASSETS 301,186 - 301,186 299,599 (2) 299,597
NON-CURRENT ASSETS
Receivables 1,300 - 1,300 1,300 - 1,300
Property, plant and equipment 20,457 - 20,457 20,457 - 20,457
Intangible Assets 1,832 - 1,832 1,832 - 1,832
TOTAL NON-CURRENT ASSETS 23,589 - 23,589 23,589 - 23,589
TOTAL ASSETS 324,775 - 324,775 323,188 (2) 323,186
CURRENT LIABILITIES
Trade and other payables 9,215 - 9,215 8,044 - 8,044
Provisions (a) 1,565 88 1,653 1,261 74 1,335
TOTAL CURRENT LIABILITIES 10,781 88 10,869 9,306 74 9,380
NON-CURRENT LIABILITIES
Provisions (a) 472 (6) 466 362 5 367
TOTAL NON-CURRENT LIABILITIES 472 (6) 466 362 5 367
TOTAL LIABILITIES 11,254 82 11,335 9,667 79 9,746
NET ASSETS 313,521 (82) 313,440 313,520 (81) 313,439
EQUITY
Reserves 104,379 - 104,379 104,379 - 104,379
Retained earnings (c) 209,142 (82) 209,061 209,141 (81) 209,060
TOTAL EQUITY 313,521 (82) 313,440 313,520 (81) 313,439
Australian Business Limited and Controlled EntitiesNotes to Consolidated Financial Statements 30 June 2006
Notes to Consolidated Financial Statements
86 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 87
Parent
Consolidated Previous Entity
Previous transition to AIFRS AGAAP transition AIFRS
AGAAP AIFRS to AIFRS
Notes $000 $000 $000 $000 $000 $000
33. EXPLANATION OF TRANSITION TO AUSTRALIAN EQUIVALENTS TO IFRSs – CONTINUED
(2) Reconciliation of profit for the year ended 30 June 2005
Revenue from continuing operations 37,646 - 37,646 29,202 - 29,202
Other income 17,211 - 17,211 17,188 - 17,188
Annual and long service leave accrual (a) (703) (1) (704) (397) (7) (404)
Employee benefits expense (21,302) - (21,302) (16,531) - (16,531)
Depreciation and amortisation expense (3,600) - (3,600) (3,587) - (3,587)
Advertising and marketing (2,469) - (2,469) (2,002) - (2,002)
Building expenses (855) - (855) (855) - (855)
Consultants (2,673) - (2,673) (2,421) - (2,421)
Maintenance agreements (596) - (596) (596) - (596)
Management fees – investments (2,168) - (2,168) (2,168) - (2,168)
Motor vehicle (1,062) - (1,062) (55) - (55)
Printing and stationery (415) - (415) (239) - (239)
Provision for non recovery of debt in controlled entities (b) - - - (1,379) (2) (1,381)
Provision for non recovery of working capital loan to unrelated corporation (200) - (200) (200) - (200)
Provision for non recovery of WIP 35 - 35 - - -
Sponsorship (1,041) - (1,041) (1,005) - (1,005)
Telephone and facsimile (1,006) - (1,006) (477) - (477)
Travel (855) - (855) (628) - (628)
Other expenses from ordinary activities (3,118) - (3,118) (762) - (762)
Profit/(Loss) before income tax expense 12,829 (1) 12,828 13,088 (9) 13,079
Income tax expense - - - - - -
Net profit(Loss) from continuing operations 12,829 (1) 12,827 13,088 (9) 13,079
Profit from discounted operations (404) - (404) (404) - (404)
Net Profit/(Loss) attributable to members of Australian Business Limited 12,425 (1) 12,423 12,684 (9) 12,675
Australian Business Limited and Controlled EntitiesNotes to Consolidated Financial Statements 30 June 2006
Notes to Consolidated Financial Statements
86 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 87
33. EXPLANATION OF TRANSITION TO AUSTRALIAN EQUIVALENTS TO IFRSs – CONTINUED
(3) Reconciliation of cash flow statement for the year ended 30 June 2005
The adoption of AIFRS has not resulted in any material adjustments to the cash flow statement.
(4) Notes to the reconciliation
(a) Annual and long service leave provisions
Under AASB 119 Employee Entitlements, short term benefits such as annual leave are accounted for without actuarial assumptions to measure the obligation and the cost and are measured on an undiscounted basis. As the average salary increase for the year ended 30 June 2006 was 4.5%, the provision for annual leave was increased by 4.5% plus on costs of 18.5% to appropriately account for this liability. Long term benefits such as long service leave under AASB 119 are required to be discounted to present value. Long service leave entitlements increased by 4.5% plus on costs of 18.5% and have been discounted to present value using the Australian government bond rate of 5.5%. The effect is:
(i) At 1 July 2004
For the Group there was an increase in employee benefits provisions of $82,000 and the parent entity $75,000
(ii) At 30 June 2005
There was no effect on the Group for employee benefits expense, the parent entity had an increase of $7,000
(b) Trade and other receivables
Due to AIFRS adjustments of employee entitlements at 30 June 2005 in a subsidiary, the parent entity increased the provision for non recovery of debt in controlled entities. The effect is:
(i) At 1 July 2004
There is no effect on the Group or the parent entity
(ii) At 30 June 2005
There was no effect on the group and the parent entity had an increase in provision for non recovery of debt in controlled entities of $2,000.
(c) Retained earnings
The effect on retained earnings of the changes set out above are as follows:
1 July 2006 30 June 2005 Consolidated Parent Consolidated Parent Entity Entity
Notes $000 $000 $000 $000
Employee benefits provision (a) 82 75 - 7
Provision for non recovery of debt in controlled entities (b) - - - 2
82 75 - 9
Attributable to:
Members of the parent 82 82 - 9
82 82 - 9
Australian Business Limited and Controlled EntitiesNotes to Consolidated Financial Statements 30 June 2006
Notes to Consolidated Financial Statements
88 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 89
In the directors’ opinion:
(a) the financial statements and notes set out on pages 52 to 87 are in accordance with the Corporations Act 2001, including:
(i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and
(ii) giving a true and fair view of the company’s and consolidated entity’s financial position as at 30 June 2006 and of its performance, as represented by the results of their operations, changes in equity and their cash flows, for the financial year ended on that date; and
(b) there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.
The directors have been given the declaration by the Chief Executive Officer and Chief Financial Officer as defined by Section 295A of the Corporations Act (2001).
This declaration is made in accordance with a resolution of the directors.
K L Wilson I Penfold
President Deputy President
Sydney
17 October 2006
Australian Business Limited and Controlled EntitiesNotes to Consolidated Financial Statements 30 June 2006
Directors’Declaration
88 ABL State Chamber Annual Report 2006 Annual Report 2006 ABL State Chamber 89
Australian Business Limited and Controlled EntitiesIndependent Auditor’s Report
90 ABL State Chamber Annual Report 2006
Australian Business Limited and Controlled EntitiesIndependent Auditor’s Report
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