CONSTRUCTION INDUSTRY LONG SERVICE LEAVE BOARD 2012 … · 3 Construction Industry Long Service Leave Board ⎜ 2012 Annual Report OperatiOnal Record number of claims processed (1735)

2012 ANNUAL REPORT

CONSTRUCTION INDUSTRY LONG SERVICE LEAVE BOARD

CONSTRUCTION BENEFIT SERVICES

The business name of the Construction Industry Long Service Leave Board.

Address:

Level 2, 191 Fullarton Road, Dulwich, SA 5065

Telephone: (08) 83326111

Toll Free Telephone: 1800182124

Facsimile: (08) 83334314

E-mail: [email protected]

Internet: www.cbserv.com.au

Board Members:

Margaret Sexton (Presiding Officer)

Ben Carslake

Bob Donnelly

Colin Fenney

Rick Cairney

Steven Hall

Jim Whiting

Chief Executive Officer:

Ian Hopkins

Actuary:

DeeDeeRa Actuaries

GPO Box 4216

Sydney NSW 2001

Auditor:

PKF

Level 2, 139 Frome St.

Adelaide SA 5000

Solicitors:

Kelly & Co.

GPO Box 286

Adelaide SA 5001

Asset Consultant:

MLC Implemented Consulting/Jana Investment Advisors

255 George Street

Sydney NSW 2000

CONTENTS

Vision, Mission, Business Objectives, Staff Values

Charter

The Year at a Glance

Scheme Summary

Presiding Officer and Chief Executive Officer’s Report

Financial Performance

Operations

Corporate Governance

Financial Statements

1

2

3

4

5

6

10

14

18

Construction Industry Long Service Leave Board ⎜ 2012 Annual Report1

VISIONTo be and be recognised as a professional, innovative, progressive client driven worker benefit scheme

administrator contributing to the prosperity of the construction industry in South Australia.

MISSION In accordance with statutory requirements, we will deliver a range of worker benefit services of the highest

order to the construction industry through professional administration and service delivery and prudential fund

management.

BUSINESS OBJECTIVES • Maintain the financial viability of the scheme.

• Utilise technology in a cost effective manner that supports optimum operational performance.

• Maximise worker registration levels and industry compliance through awareness raising programs.

• Monitor workplace reforms and liaise with industry in the formulation of policy.

• Implement innovative strategies that promote the scheme.

• Develop strategies and programs to provide ethical and superior customer service.

• Introduce processes and training initiatives to build organisational capability, promote self

development and a culture of continuous improvement.

• Seek new business opportunities to leverage existing infrastructure and skills.

• Pursue opportunities to work with other portable long service leave schemes which lead to

efficiencies, better client outcomes or that better align scheme design.

STAFF VALUES • Identify our clients and be totally committed to providing quality service.

• Display pride in all that we do and be accountable for our actions.

• Be enthusiastic and motivated in the performance of our duties.

• Act with integrity and honesty at all times.

• Be understanding and respectful in conducting business with clients.

• Be innovative and proactive in pursuit of the Board’s statutory and corporate goals.

Construction Industry Long Service Leave Board ⎜ 2012 Annual Report 2

CHARTER

The Construction Industry Long Service Leave Board was

established under the Construction Industry Long Service

Leave Act to support the South Australian construction

industry through the provision of an equitable and efficient

portable long service leave scheme. Under the scheme,

workers are able to accrue service across the industry rather

than with the one employer. This portability also extends

across state and territory borders through the National

Reciprocal Agreement.

Apart from the benefits of portability, the scheme’s existence

protects workers’ entitlements in the event of an employer’s

financial failure and assumes an employer’s responsibility

for long service leave entitlements for defined construction

industry workers.


OperatiOnal

Record number of claims processed (1735) representing benefits paid of $9.83 million. 129 claims involved interstate service.

Staffing level increased to 13.2 to meet IT work demands and to support NT Build (one-off special project).

Work continued on first stage of National Cooperation project. Objective is to assess the operational feasibility of developing a common back office function.

Legislative amendments identified to address modern award coverage. Draft Amendment Bill now undergoing consultation process.

Board initiative to conduct risk management workshop and develop risk management framework, register, and policy.

Financial

Levy income at record level of $14.13 million.

Operating surplus of $0.06 million in 2011/12.

Construction Industry Fund accumulated deficit of $2.38 million at 30th June 2012.

Investment return of 1.9%. Value of funds under management decreased to $70.6 million.

Review of investment strategy recommends de-risking of portfolio by increasing exposure to cash.

Tenders invited for the provision of implemented consulting services to the Board.

The scheme’s accrued liability increased by $4.46 million to $87.84 million.

Average ordinary weekly pay increased by 5.2% ($68) to $1,110. Wage growth contributed $2.84 million towards the increased liability.

Actuary recommends levy rate be retained at current level of 2.25%.

Scheme operational cost of $47.33 per client.

StakehOlderS

Further redevelopment of internet returns system with 50% employer take up at 30th June 2012.

18,918 workers accrued service in 2011/12 (3.49 million days).

264 new employers and 5,985 new workers were registered during the year. Total client base of 27,950 (2010/11-27,220).

Continued provision of IT support services to NT Build.

Contribution rate and rate of return reviewed for contractors and working directors registered under the voluntary investment scheme. New rates of $200 (contribution payable per bi-monthly billing cycle) and 3.5% (rate of interest payable on account balance) respectively, are to operate from 1st July 2012.

THE YEAR AT A GLANCE


SCHEME SUMMARY

2009 2010 2011 2012

Clients Active registered workers (Employed or less than allowable absence)

23,070 24,020 24,620 25,350

Currently employed registered workers

14,677 16,920 18,545 19,250

Registered employers 1,931 2,030 2,085 2,085

Contractors/Working directors registered

533 540 515 515

Operations Salaries & Related $618,000 $720,000 $817,000 $1,003,000

Administration $462,000 $501,000 $455,000 $445,000

Total Administration Costs $1,080,000 $1,221,000 $1,272,000 $1,448,000

Claims No of long service leave claims

1,205 1,205 1,286 1,735

Value of long service leave claims

$6.4m $6.7m $7.6m $9.82m

Financial Asset base $58.75m $69.63m $80.93m $85.46m

Future benefits liabilities $67.13m $73.57m $83.38m $87.84m

Investment Income ($11.9m) $6.65m $6.20m $1.5m

Investment return on fundsunder management

(12.8%) 10.1% 9.1% 1.9%

Levy Rate 2.25% 2.25% 2.25% 2.25%

Levies $10.9m $12.04m $13.85m $14.13m

Fund Surplus/(Deficit) ($8.38m) ($3.94m) ($2.45m) ($2.38m)


The Construction Industry Long Service Leave Board’s overarching vision is to be and be recognised as a professional, innovative, progressive client driven worker benefit scheme administrator contributing to the prosperity of the construction industry in South Australia. It is a vision that is strongly instilled within our organisation and it underpins all that we do.

We have a strong belief in the capacity of our staff and our organisational values - customer service, accountability, pride, innovation, integrity and respect - to help achieve this vision.

The past year has been challenging for the construction industry. Economic uncertainty stemming from global economic concerns has exacerbated weaknesses in building and construction. While levy income exceeded previous levels, the numbers and $value of claims processed was at a record level. At 30th June 2012, 2085 employers, 25,350 workers and 515 self employed contractors, were registered under the scheme. Since the inception of the scheme in 1977, $113.7 million has been paid out to workers.

At the 30th June 2012 the state of the Construction Industry Fund was $85.46 million. With liabilities of $87.84 million, the long term funding ratio was 97.3%, a small increase on the previous year.

On the investment front, the Board acted on an investment strategy review recommendation to de-risk the investment portfolio. Increased exposure to cash through investments in term deposits saw the Board adopt a more conservative 55%growth:45%defensive asset mix. The investment return of 1.9% and long term funding solvency level of 97.3%, compares favourably with other state long service leave schemes.

During the year KPMG were contracted to provide investment advisory services to the Board in the conduct of an implemented consulting tender. Submissions were invited from five implemented consultants with interviews scheduled to occur early 2012/13.

The Board and management continued to work with other state schemes on the National Cooperation Project. The first stage of the Project involves assessing the operational feasibility of developing a common operating system. Implementation will significantly reduce operating costs and ensure employers and workers who work across state and territory boundaries,

are not disadvantaged through differences in business rules and loss of service respectively.

Governance was also a major focus for 2011/12. The Board held a risk management workshop to identify operational risk. The workshop was a forerunner to adopting a strategic approach to developing a risk register, matrix and risk management framework. The Board is also working closely with its auditors on internal controls to prevent fraud. A proposed review of the Board’s vision, mission and business objectives was deferred pending the appointment of a new Board from the 1st July 2012.

Work commenced on the 2012-15 Corporate Plan and Information Technology Strategic Plan.

At the 30th June 2012 the Government was consulting with industry on proposed amendments to the Construction Industry Long Service Leave Act. The Board is anticipating the draft Bill will soon be submitted to Cabinet for approval to introduce in to Parliament. The amendments include clarifying the Act’s predominance rule, giving the Board the power to determine the levy rate within prescribed parameters and ensuring the level of coverage does not increase under modern awards.

The Board is a relatively small organisation with much responsibility. The dynamics of the scheme we administer is constantly changing through external economic influences.

Maintaining our momentum in 2012/13 will be dependent on continuing to build the capacity of staff to meet industry demands. A workforce that is keen to challenge themselves is vital if the Board is to improve service delivery and make a positive difference for the industry.

We will strive for excellence in our business of providing portable long service leave. We are ready for the challenge.

On behalf of the Board and management, we thank our professional and dedicated staff, whose contributions continue to build a better construction industry in this state.

PRESIDING OFFICER ANDCHIEF EXECUTIVE OFFICER REPORT

Margaret SextonPresiding Officer

Ian HopkinsChief Executive Officer


FINANCIAL PERFORMANCE

investments

The Board’s investment strategy is driven by the need to ensure the Construction Industry Fund is able to meet future long service leave entitlements while maintaining the levy rate at the lowest possible level. Investment income is therefore paramount to the financial viability of the scheme. Maximising investment returns (while minimising risk) is the key investment objective subject to:

• A high probability the net return exceeds the inflation rate (CPI) by at least 3% per annum over rolling five year periods;

• Limiting the probability of a negative annual return to one year in every four years, on average; and

• A high probability of at least achieving 100% solvency within three to five years.

Intense market volatility during the year saw investors moving funds to lower risk asset classes such as cash. Acting on the recommendation of MLC Implemented Consulting, (contained in a report on the annual review of investment strategy considered in February) the Board transferred $10 million from the investment portfolio to term deposits in March.

Although the return of funds under management did not meet the Board’s investment objective over the rolling five year period 2007/12, it was however pleasing to achieve a positive return of 1.9% in 2011/12 in the difficult investment market.

In dollar terms investment earnings equated to $1.52 million against a budgeted $6.28 million for 2011/12. The latter figure was calculated using the actuary’s assumed long term rate of return of 7.5%.

In February MLC Implemented Consulting merged with Jana Investment Advisers. The Board continued to use MLC/Jana to manage the investment portfolio. At the 30th June 2012, funds under their management totalled $70.57 million, a decrease of $7.0 million or 9.0% on 2011/12. This figure however excludes the $10 million term deposit investments. The Antares Enhanced Cash Trust, used for the purposes of the Registered Contractors Fund, returned 4.9%. This was marginally under the 5.0% interest rate paid on contributions from

working directors and self employed contractors.

The Board has had discussions with MLC/Jana with a view to further diversifying the investment portfolio through the inclusion of alternative asset classes. This is likely to occur in 2012/13.

In March, with the consultancy support of KPMG, the Board invited tenders from MLC/Jana, Mercer, Russell Investments, AMP Capital and Ibbotson Associates to provide implemented consultancy services. At 30th June 2012, all proposals had been evaluated and a shortlist endorsed for interview in July.

investment income ($million)

The current strategic asset allocation as at 30th June 2012 is detailed below.

2007/08$

2008/09$

2009/10$

2010/11$

2011/12$

Funds UnderManagement 57.00 53.36 66.95 77.57 70.57

Investment Income (4.35) (7.01) 6.65 6.2 1.5

Asset ClassStrategic

Allocation %

Australian Shares 24

Global Shares 14

Global Shares (hedged) 14

Property Securities 3

Total Growth Assets 55

All-Maturity Diversified Debt 14

Short-Maturity Diversified Debt 17.9

Term Deposits 13.1

Total Defensive Assets 45


FINANCIAL PERFORMANCE continued

The following table provides details of investment returns matched against wage growth and the CPI for the five years. Negative returns have occurred on three occasions during the last fifteen years (i.e. 2002, 2008, and 2009).

actUarial SerViceS

The Board’s actuary DeeDeeRa Actuaries presented three reports to the Board in 2011/12. In October 2011 the Board received a report on the future funding of the scheme’s liability. The report provided medium term projections of cash flows, liabilities and assets and the financial position of the Construction Industry Fund given various scenarios. The report’s data is also made available to MLC/Jana to assist in the annual review of investment strategy.

In June the actuary recommended to the Board the bi-monthly contribution rate and interest payable on account balances under the voluntary working director/self employed contractor investment scheme be set at $200 and 3.5% respectively in 2012/13 (1st July 2011- $190 and 5%). The scheme enables working directors and contractors to retain prior service and make provision for their long service leave.

More recently the actuary reported on a review of the Construction Industry Fund as at 30th June 2012. The purpose of this review is to determine the state and sufficiency of the Fund and adequacy of the levy rate. The review identified a liability of $87.49 million. When matched against assets of $84.95 million, the Fund’s deficit was $2.54 million.

The actuary has projected an increase in the scheme’s liability of $7.8 million in 2012/13. This compares with 2011/12 forecasts of $8.1 million and the increase realised of $4.46 million.

The actuary also reported on the Leaving Industry Vested Benefit liability of $60.58 million. This is the $value of the liability of those workers with an entitlement and who may leave the industry.

The actuary reported to the Board the current levy rate of 2.25% was adequate to fund the identified shortfall in assets below accrued liabilities as well as the ongoing accrual of workers’ entitlements.

The Board anticipated the proposed amendments to the Act discussed in a later section of the report, would be passed prior to 30th June 2012 thereby providing the power to act on the actuary’s recommendation and determine the levy rate rather than forward a recommendation to the Minister.

The actuary’s report also identified average ordinary weekly pay had increased by 5.2% to $1,110 at 30th June 2012. Wage growth alone contributed $2.84 million towards the scheme’s $4.46 million increase in total liability.

2008 2009 2010 2011 2012

Investment Return %

(7) (12.8) 10.1 9.1 1.9

Industry Wage Growth %

4.6 5.8 3.6 4.2 5.2

CPI % 4.5 1.5 2.4 3.6 1.2

0 10 20 30 40 50 60 70 80 90

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

$m

Scheme Liabilities

Average Weekly Earnings

0

300

600

900

1200

$

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012


Financial OperatiOnS

revenue and expenditure

During the financial year, revenue from all sources amounted to $15.83 million while expenditure amounted to $15.77 million. This resulted in an operating surplus of $0.06 million for the year. This was below budgetary expectations of a $0.63 million surplus. The main factors contributing to this shortfall were:

• Investment income of $1.52 million

• Worker payments of $9.82 million.

• Salaries and related costs of $1.00 million

construction industry Fund

The Construction Industry Fund’s total assets at 30th June 2012 were $85.45 million. The Fund’s accumulated equity position improved from a deficit of $2.45 million in 2010/11 to a deficit of $2.38 million.

registered contractor Fund

At the 30th June 2012, the balance of the Registered Contractor Fund was $4.03 million. It is established

practice to regularly transfer funds to the MLC/Jana Antares Enhanced Cash Fund. This is to ensure there are sufficient cash assets available within the investment portfolio to match the amounts owing to contractors and working directors contributing to this voluntary investment scheme. In 2011/12 net contributions totalled $0.24million. The interest paid on the balance of all accounts was $0.18 million.

The Registered Contractors Fund (MLC Enhanced Cash Trust) has returned 5.6% since its inception in January 2005. This compares with an average rate of return on account balances of 5.5%.

assets and liabilities

The graphs below detail the Fund’s asset/liability position and reserve position since 2001.

REVENUEACTUAL 2011/12$ million

BUDGET 2011/12$ million

Investments (including cashholdings and term deposits)

1.52 6.28

Levies 14.13 12.06

Other 0.18 0.12

Total 15.83 18.46

EXPENDITURE

Long Service Leave Payments 9.82 8.0

Increase in accrued liability 4.26 8.25

Salaries/Related Costs 1.00 0.96

Operating Costs 0.69 0.62

Total 15.77 17.83

Operating Surplus (Deficit) 0.06 0.63

0 10 20 30 40 50 60 70 80 90

$m

Assets and Liabilities

2010 2011 2012200920082007200620052004200320022001

-10000

-5000

0

5000

10000

Fund Reserve

$'000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012


FINANCIAL PERFORMANCE continued

payment of claims

A key function of the Board is to process workers’ claims for payment. A record 1735 claims were processed in 2011/12. This represents an increase of 33% on 2010/11. 129 claims were processed under the National Reciprocal Agreement.

South Australia is represented on a national working group set up to work through the identified issues of the National Back Office Project. In the area of claims, the group is in the process of mapping an optimum common payment process utilising the national Ausleave website.

keY perFOrMance indicatOrS

Scheme Administration Costs per Client.

Management Expense Ratio (Administrative expenses to total assets)

Benefits Expense Ratio

YEAR 2005 2006 2007 2008 2009 2010 2011 2012

SA Costs/Client

$37.65 $37.63 $38.46 $39.00 $41.98 $40.48 $46.73 $47.33

YEAR 2005 2006 2007 2008 2009 2010 2011 2012

MER 1.96% 1.49% 1.33% 1.53% 1.83% 1.75% 1.57% 1.63%

YEAR 2008 2009 2010 2011 2012

93% 93% 92% 93% 93%


OPERATIONS

legislation

During the year, the Board continued to progress the Construction Industry Long Service Leave (Miscellaneous) Amendment Bill 2011 in consultation with Government and industry representatives.

The Bill replaces former State and Federal awards listed in the schedule of the Act with their Modern Award equivalent. It also incorporates industry endorsed amendments to remove the ambiguity of the predominance rule and give the Board powers to vary the levy rate upon actuarial advice within predetermined parameters. These latter amendments have been before Government for several years.

At the 30th June 2012, the Board is anticipating the draft Bill will soon be submitted to Cabinet for approval to introduce in to Parliament.

A feature of the recently approved 2012-15 Corporate Plan is a proposed review of the Act. The last major review occurred in 1995. Several provisions have been identified as outdated and requiring amendment to accommodate changes that have occurred within the construction industry.

national cooperation

The national cooperation initiative is driven by a commitment by all state Boards to operate more efficiently and to improve operational consistencies between the schemes.

Work undertaken in 2011/12 included mapping all key processes to identify “best practice”, developing a project risk management framework, a draft statement of the purpose and goals of the project, a draft non binding Memorandum of Understanding, cost sharing formula and national issues register.

This work program is essential in the lead up to an assessment of the commercial (cost/benefit analysis) and technical feasibility of the project. This is scheduled to occur in 2014.

Strategic planning

During the year the Board received reports from management on the outcomes of the 2009-12 Corporate Plan “Making a Difference.” A new 2012-15 Corporate Plan and 2009-12 IT Strategic Plan will be submitted to the Board in July. The focus of the Corporate Plan is to achieve a sustainable and financially viable scheme through the provision of high level services to the industry in an environment of proactive and prudent corporate governance and managed exposure to risk.

information Systems

The Board has continued to enhance operational business systems in order to achieve better outcomes for industry clients.

During the year, the Board continued with the implementation of the 2009 – 2012 Information Technology Strategic Plan. ie.

• Replace remaining legacy Newtech applications (ongoing),

• Improve application functionality,

• Integrate Newtech with the TRIM records management system (as directed by State Records SA),

The Board continued to work with the NTBuild long service leave scheme in the areas of administrative and IT support. Redevelopment of their web based NTBuilder application was completed and significant work undertaken to enhance the system to accommodate the new Inpex project where service days need to be accounted for separately. Additional resources were required to complete this project.

Other major initiatives for 2011/12 included:

• Continued storage of administrative and scheme documents in the TRIM records management system.

• Enhancement of the online services function of our website based on feedback from industry clients.


• The release of a content management system website with improved access to scheme information.

Marketing and communication

The following initiatives were part of the Board’s 2011/12 work program.

• Maintained our relationships with TAFE Colleges and industry group training schemes. A total of 41 presentations were given to apprentices.

• Regularly updated employers and workers on scheme issues via the Board’s corporate publications.

• Distributed promotional merchandise during building site visits, TAFE presentations, Union picnic etc.

• Implemented a strategic approach to promoting the Board’s website as the portal for industry access to scheme information.

• Provided incentives for employers to lodge employer returns using our website’s online services area. At 30th June approximately 50% of registered employers were lodging their returns electronically. The Board will seek to significantly increase industry take-up of this facility in 2012/13 through awareness raising strategies and provision of improved and more extensive online services.

• Using data provided by Traineeship and Apprenticeship Services, contacted employers of new apprentices commencing in the industry to provide information about the scheme.

• Provided information to workers and employers as to individual accrued service and entitlements and workforce status respectively.

client Services

Key activities undertaken during 2011/12 include:

• Enquiries helpline operating from 8.30am-5.00pm Monday to Friday.

• Provided expert advice on operational and legislative matters to the industry, Board and Government.

• Attended building sites to conduct lunchroom presentations for workers and employers.

• Provided continued administrative and system support to NT Build long service leave scheme.

• Advised workers of impending leave entitlements and the potential to lose service credits due to extended absences from the industry.

• Field advisory services provided by Industry Liaison Officers.

• Regular information exchange between interstate schemes via the National Forum.

• The timely processing of workers’ claims for payment.

registrations

At the 30th June 2012 there were 2,085 employers registered (2010/11 – 2,083) and 19,250 active workers registered (2010/11 – 18,545.) These numbers are pleasing in that despite economic factors, worker membership numbers increased by 3.8%. The construction industry is indeed resilient.

Since its inception in 1995, the self-employed contractor and working director voluntary scheme have attracted nearly 2,000 members. During the year, 86% of current members contributed to the scheme.

Also in 2011/12, 264 employers and 5,985 workers registered with the scheme for the first time.

18,918 workers accrued 3.49 million service days in 2011/12. This represents 75% of the total active workers and is up 31% on 2010/11.

Employer Registrations

2000

1500

1000

500

02002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

OPERATIONS continued


compliance

Compliance under the Act is pursued on several fronts. Field staff target registration compliance while finance and administration staff are responsible for ensuring employer returns and levies are lodged by the statutory due date. Failure to be proactive in this important area can result in workers being denied a long service leave entitlement and employers accumulating debts to the Board. In 2011/12, staff carried out 647 inspections. A total of $0.76 million unpaid levies were identified. Penalty interest of $26,800 was also identified and applied.

During the year the Board approved the write off of bad debts totalling $166,000 involving 35 employers.

Although the total number of outstanding returns for 2011/12 (1724 at 30th June ) was pleasing in that it represented a reduction on 2010/11, the number of late returns each billing cycle remains unacceptably high. On average approximately 440 Final Notices are issued per billing cycle to expedite the lodgement of returns and

payment of levies. 38% of the Final Notices issued were followed up by a late payment fine of $75.00. The $value of these fines was $47,000. The proposed review of the Act reported on earlier, will consider the effectiveness of the $75 late payment fine as a deterrent.

A summary of the litigation activity for 2011/12 is set out in the table below

Employer response to the Notice of Intent to Prosecute letters significantly reduces litigation. A major review of all aspects of compliance will be undertaken in 2012/13.

human resources

At the 30th June 2012, the Board’s staffing level was 13.2FTE, including two contract staff employed to provide IT support.

During the period February to May the Board considered a consultant/management report on staff remuneration and organisation structure. The latter was submitted to the Board to improve the organisation’s culture and address risk management issues. The organisation structure as at 30th June 2012 is set out below.

Active Worker Registrations

0

4000

8000

12000

16000

20000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Matters referred to Solicitors 3

Summons Issued 9

Prosecutions 2

ANALYSTPROGRAMMER

BUSINESS DEVELOPMENT MANAGER

FINANCE MANAGER

THE BOARD

CHIEF EXECUTIVE OFFICER

PROGRAMMER PROGRAMMER(CONTRACT x 2)

ANALYSTPROGRAMMER(CONTRACT)

ADMINISTRATIVE OFFICER/PERSONAL

ASSISTANT

INDUSTRY LIAISON OFFICERS (3)

ADMINISTRATIONOFFICER

CLIENT LIAISON OFFICER

RECORDS SYSTEMSCOORDINATOR


OPERATIONS continued

Also in February, the Board approved a new instrument of delegation. The new delegated powers took into account audit requirements, investment practices and restructuring of duties and responsibilities.

The Board continues to be proactive in providing a healthy and safe workplace for all employees. Occupational health policies and procedures are in place to effectively manage workplace safety as advocated in occupational health and safety legislation. There were no incidents reported throughout 2011/12.

The Board’s capability to administer the scheme is dependent on the values of staff, their professionalism and their performance. The Board recognises the need to recruit, retain and continuously develop a dynamic well motivated workforce. Budget allocations have been made for the training and development of staff.

Staff have been directly involved in the ongoing development of policy. A staff project team worked with management in developing a Code of Conduct. This was approved by the Board in April.


CORPORATE GOVERNANCE

The Construction Industry Long Service Leave Board is responsible for the administration of the portable long service leave scheme under the Construction Industry Long Service Leave Act 1987.

The corporate governance processes established by the Board ensures that it is able to fulfil its statutory obligations, guide the affairs of the organisation and oversee its performance.

The Board, with the support of senior management, is responsible to clients within the industry for overall business performance. It approves corporate goals and objectives, strategic plans and performance targets. The Board ensures appropriate policies, procedures and systems are in place to manage risk, optimise business performance and maintain high standards of ethical behaviour and statutory compliance.

Board composition

The membership of the Board is determined in accordance with Section 7 of the Act and comprises three members appointed to represent employers (nominated by Business SA, Engineering Employers Association, BISCA and the Master Builders Association) and three members selected from nominations by SA Unions to represent workers. The Presiding Officer is appointed by the Minister for Industrial Relations.

The current Board was appointed on the 13th September 2007 for a term concluding 30th June 2012.

The membership of the Board is as follows:

The Deputy Board members are:

A new Board will be appointed from the 1st July 2012. Current member Mr Ben Carslake has informed the Minister he will not be seeking a further term on the Board. Ben was first appointed in July 1990 making him the longest serving member over the history of the scheme. A strong supporter of the concept of portable long service leave, Ben has overseen many positive changes to a scheme which now rates highly for its contribution to the prosperity of the construction industry.

Board committees

To assist in the execution of its responsibilities, the Board establishes sub committees on an as required basis (finance/audit, management performance review etc). When in operation these committees strengthen the governance framework enabling the Board to give closer attention to important issues facing the organisation than is possible for the full Board at a scheduled meeting. The role (and possible expansion) of such committees will be reviewed in 2012/13.

remuneration of Board Members

Board members receive fees as determined by the Government. The level of fees are categorised having regard to such matters as the degree of policy and operational advice provided to Government and the private sector, the size of the operation under management, annual budget etc. Details of remuneration are tabled in Parliament.

Ms Margaret Sexton Presiding Officer

Mr Rick Cairney Business SA

Mr Steven Hall Building Industry Specialist

Contractors Association

Mr Jim Whiting Master Builders Association

Mr Ben Carslake SA Unions

Mr Colin Fenney SA Unions

Mr Bob Donnelly SA Unions

Mr Kevin Kelly

Mr Steven Minuzzo

Mr Martin O’Malley

Mr John Camillo

Mr Doug Buchanan


attendance at Board Meetings

During 2011/12 the Board met on 11 occasions.

In February the Board adopted a 2012 Calendar which provided a timeline for the calendar year’s work program. The regular business considered by the Board includes the following areas:

• Chief Executive Overview Report

• Finance and investment

• Scheme administration (policy and general)

• Management and operational issues

• Risk management

Board members were provided with iPads during the year to achieve efficiencies through the distribution and viewing of agenda papers electronically.

Overseas travel

During the 2011/12 year members of the Board did not engage in any overseas travel in the capacity as a member of the Board.

Board training

A training and development policy for Board members is supported by a separate budget provision. In 2011/12, the Presiding Officer attended a training seminar conducted by the Centre for Investor Education. In June all Board members attended a further risk management workshop. This was a forerunner to the identification of risks, the development of a risk management framework and policy etc. In September the new Board will hold a further workshop to review the current vision and mission statement.

Major issues in 2012/13

• Work with MLC/Jana to increase diversification of the investment portfolio while monitoring financial market volatility and the Fund’s solvency objective.

• Passage of the Construction Industry Long Service Leave (Miscellaneous) Amendment Bill 2012 through Parliament and implementation.

• Undertake a review of the Construction Industry Long Service Leave Act.

• Continued support and involvement in projects associated with Stage 1 of the National Cooperation Project.

• Organise and host the 2013 National Conference of Construction Industry Long Service Leave Authorities.

• Implement risk and fraud management policies.

• Improve the level and range of online services available to the industry 24/7.

Strategic planning

The Corporate Plan is the Board’s primary planning tool and provides the framework within which we develop our strategies, business objectives and work practices. It outlines our vision, mission and values, the factors that we perceive to be critical to our success, our key strategies for the coming year and targeted outcomes.

Board MemberMeetingsAttended

M Sexton 11

B Carslake 9

M O’Malley(Dept. to Carslake) 1

C Fenney 5

J Camillo (Dept. to Fenney) -

B Donnelly 6

D Buchanan (Dept. to Donnelly) 1

R Cairney 10

K Kelly (Deputy to Cairney) -

S Hall 10

J Whiting -

S Minuzzo (Dept. to Whiting) 9


risk Management

The Board currently identifies and monitors financial, business and operational risks. Strategies include a disaster recovery plan for key information systems and business continuity, investment processes and policy, the provision of adequate and skilled resources, interest rate and credit risk controls, the provision of an ongoing safe working environment, ensuring policies and controls are applied in an appropriate manner, promoting and enforcing industry compliance under the Construction Industry Long Service Leave Act and operating within the ambit of other relevant legislation.

The Board’s recent in-house workshop focussed on a risk management framework and policy. As advised in other sections of this report, risk management will become an integral feature of all agendas as the Board and management work towards formalising a position on risk, implementation of policy and future reporting and monitoring.


FINANCIAL STATEMENTS


FINANCIAL STATEMENTS


CONSTRUCTION INDUSTRY LONG SERVICE LEAVE BOARDSTATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED30 JUNE 2012

Note 2012 2011$000's $000's

Revenue From Ordinary ActivitiesLevies 2(e) 14,132 13,846 Realised Investment Income 2(e) 228 73 Unrealised Investment Income 2(e) 1,294 6,122 Other 2(e) 184 226 TOTAL INCOME 15,838 20,267

Expenses From Ordinary ActivitiesWorker Payments 11 13,906 17,135 Contractor Interest 176 129 Salaries & Related Costs 14 1,003 817 Depreciation 2(j) 74 80 Bad & Doubtful Debts 2(h) 131 102 Administration 445 455 NT Contract Expenses 37 62 TOTAL EXPENSES 15,772 18,780

TOTAL COMPREHENSIVE SURPLUS / (DEFICIT) 66 1,487

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


CONSTRUCTION INDUSTRY LONG SERVICE LEAVE BOARDSTATEMENT OF FINANCIAL POSITION

AS AT30 JUNE 2012

Note 2012 2011$000's $000's

ASSETS

Current AssetsCash and Cash Equivalents 4 3,441 1,169 Investments 6 9,000 -Receivables 5 2,292 2,008 TOTAL CURRENT ASSETS 14,733 3,177

Non-Current AssetsInvestments 6 70,565 77,571 Property, Plant & Equipment 7 157 180 TOTAL NON-CURRENT ASSETS 70,722 77,751

TOTAL ASSETS 85,455 80,928

LIABILITIES

Current LiabilitiesPayables 9 4,135 3,787 Provisions 10 10,239 8,214 TOTAL CURRENT LIABILITIES 14,374 12,001

Non-Current LiabilitiesProvisions 10 73,464 71,376 TOTAL NON-CURRENT LIABILITIES 73,464 71,376

TOTAL LIABILITIES 87,838 83,377

NET ASSETS (2,383) (2,449)

EQUITY

Deficiency of net assets (2,383) (2,449)



CONSTRUCTION INDUSTRY LONG SERVICE LEAVE BOARDSTATEMENT OF CASH FLOWS


Note 2012 2011$000's $000's

Inflows Inflows(Outflows) (Outflows)

Cash Flows From Operating Activities :Receipts From Levies & Operations 13,941 13,634 Payments to Workers (9,825) (7,616) Payments to Suppliers & Employees (1,467) (1,377) Interest Received 228 73 Net Cash Provided By (Used In) Operating Activities 16 2,877 4,714

Cash Flows From Investing Activities :Redemption of InvestmentsNet Change in Investments (700) (4,500)

Registered Contractors Fund 138 142 Payments for Plant & Equipment (59) (64) Proceeds from Sale of Plant & Equipment 16 27

- Net Cash Provided By (Used In) Investing Activities (605) (4,395)

Net Increase (decrease) in Cash Held 2,272 319

Cash at the beginning of the year 1,169 850

Cash at the end of the year 4 3,441 1,169



Retained Earnings Total Equity

$000's $000's

Balance at 30 June 2010 (3,936) (3,936) Surplus for 2010/2011 1,487 1,487 Balance at 30 June 2011 (2,449) (2,449) Surplus for 2011/2012 66 66 Balance at 30 June 2012 (2,383) (2,383)


CONSTRUCTION INDUSTRY LONG SERVICE LEAVE BOARDSTATEMENT OF CHANGES IN EQUITY



CONSTRUCTION INDUSTRY LONG SERVICE LEAVE BOARDNOTES TO THE FINANCIAL STATEMENTS


1 OBJECTIVES OF THE CONSTRUCTION INDUSTRY LONG SERVICE LEAVE BOARD

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) BASIS OF ACCOUNTING

##

(b) REPORTING ENTITY

(c) COMPARATIVE INFORMATION

(d) TAXATION

This financial report is a general purpose financial report which has been prepared in accordance with applicable Australian Accounting Standards and Treasurer's Instructions and Accounting Policy Statements promulgated under the provisions of the Public Finance and Audit Act, 1987. The accounting policies have been consistently applied.

The financial report covers the Construction Industry Long Service Leave Board, a statutory scheme created pursuant to the Long Service Leave (Building Industry) Act, 1987. The Board operates in the State of South Australia.

The Board's Statement of Comprehensive Income, Statement of Financial Position and Statement of Changes in Equity have been prepared on an accruals basis and are in accordance with historical cost convention, except for certain assets that have been valued in accordance with the valuation policy applicable.

The Cash Flow Statement has been prepared on a gross basis.

The financial report has been prepared based on a twelve month operating cycle and presented in Australian currency and rounded to the nearest thousand dollars ($,000).

The Construction Industry Long Service Leave Board is responsible for administering the Construction Industry Fund which controls levies collected from employers to provide portable long service leave for employees in the construction industry.

The Reporting entity comprises the Construction Industry Long Service Leave Board.

The Construction Industry Long Service Leave Board is liable for fringe benefits tax (FBT) and goods and services tax (GST).

Income, expenses and assets are recognised net of the amount of GST except where the amount of GST incurred is not recoverable from the Australian Taxation Office. Receivables and payables are stated with the amount of GST included.

The presentation and classification of items in the financial report are consistent with prior periods except where a specific Accounting Policy Statement or Australian Accounting Standard have required change.




(e) REVENUE

(f) CURRENT AND NON-CURRENT CLASSIFICATION

(g) CASH AND CASH EQUIVALENTS

(h) RECEIVABLES

(i) INVESTMENTS

The levy rate prescribed in accordance with regulations under the Act for the Construction Industry Fund is 2.25% of employees' gross wage. Levies are recognised when received with an accrual at year end to acknowledge service periods used by the actuary in determining the provision for worker payments as at 30 June 2012.

Investment income consists of movements in the market value of investments, distributions of income during the year and interest received from cash held on deposit. Interest is brought to account in the period it is earned.

Other income includes profit on the sale of property, plant and equipment and income received from NTBuild for the provision of administration services to the Northern Territory long service leave fund.

Cash and cash equivalents recorded in the Balance Sheet and Cash Flow Statement include cash on hand and cash which is held in current accounts at banks and is used in the cash management function on a day to day basis. Cash is measured at nominal value.

Receivables include amounts receivable from trade debtors, prepayments, accruals and employer debtors (levies) less any allowance for doubtful debts.

Employer debtors arise in the normal course of collecting levies from employers and are generally receivable 21 days following the end of the two monthly billing cycle. The Board determines the provision for doubtful debts based on a review of balances within employer debtors that are unlikely to be collected.

Accrued contributions are levies received from employers after balance date but relating to the May/June billing cycle. These contributions are included in the actuarial assessment of worker payment liabilities.

Managed funds are classified as financial assets held for trading. A gain or loss arising from a change in the fair value of investments is recognised as a profit or loss in the Income Statement. They are treated as long term investments and valued to reflect their current market value at year end.

Assets and liabilities are characterised as either current or non-current in nature. The Construction Industry Long Service Leave Board has a clearly identifiable operating cycle of twelve months. Assets and liabilities that are sold, consumed or realised as part of the normal operating cycle have been classified as current assets or current liabilities. All other assets and liabilities are classified as non-current.

Where asset and liability line items combine amounts expected to be realised within twelve months and more than twelve months, the Board has separately disclosed the amounts expected to be recovered or settled after more than twelve months.




(j) PROPERTY, PLANT AND EQUIPMENT

Depreciation of assets is determined as follows:Estimated

Class of Asset Depreciation Basis Useful LifePlant & Equipment Diminishing Value 4-5 yearsMotor Vehicles Diminishing Value 3 yearsFurniture & Fittings Diminishing Value 4-5 yearsLeasehold Improvements Prime Cost 5 years

(k) PAYABLES

(l) LEASES

(m) PROVISION FOR WORKER PAYMENTS

Payables include registered contractor funds, trade creditors, worker payments and accruals, including goods and services received prior to the end of the reporting period that are unpaid at the end of the period. Payables are measured at their nominal value and are normally settled within the terms of payment stipulated by the supplier.

Registered contractor funds are voluntary contributions by registered contractors and working directors to fund their own long service leave and include accrued interest that is credited quarterly.

Accrued worker payments are payments to workers after the balance date but not included in the actuarial assessment of worker payment liabilities.

Items of property, plant and equipment are initially recorded at cost, and all such assets having a limited useful life are systematically depreciated over their useful lives in a manner that reflects the consumption of their economic potential.

The useful lives of all major assets held by the company are reassessed on an annual basis.

Leasehold improvements are amortised over their estimated useful life or the unexpired portion of the relevant lease, whichever is the shorter.

All items of property, plant and equipment are tested for indications of impairment at the reporting date. Impairment is generally limited to where an asset's depreciation is materially understated or where the replacement cost is falling.

Provision is made for amounts due to construction industry employees under the current legislation based on an annual independent actuarial assessment of worker payment liabilities. The actuarial assessment is based on information as at 30 June 2012 and uses a "best estimate" method based on expected actual investment returns and wage inflation.

Operating LeasesIn respect of operating leases, the lessor effectively retains substantially the entire risks and benefits incidental to ownership of the leased assets. Operating lease payments are recognised as an expense on the basis that it is representative of the pattern of benefits derived from the leased assets.




(n) EMPLOYEE ENTITLEMENTS

3 FINANCIAL RISK MANAGEMENT

The number of employees at 30 June 2012 was 14 (2011: 13).

Employee benefits accrue for employees as a result of services provided up to the reporting date that remain unpaid, and include annual leave and long service leave entitlements.

Annual leave liability is expected to be paid within twelve months and is measured at nominal amounts expected to be paid, including an allowance for superannuation on-cost.

Long service leave benefits are assessed at balance date having regard to current employee remuneration rates, on-costs and other factors including accumulated years of employment and experience of employee departure per year of service.

The unconditional portion of the long service leave provision is classified as current as the Board does not have an unconditional right to defer settlement of the liability for at least 12 months after reporting date.

The unconditional portion of long service leave relates to an unconditional legal entitlement to payment arising after 7 years service and measured at nominal value.

The liability for long service leave for employees who do not have an unconditional right to payment has been measured at the present value of the future cash outflows to be made for these benefits accrued to balance date and recorded as a non-current liability.

No provision has been made for sick leave as all sick leave is non-vesting.

The Board faces a number of risks in performing its statutory functions. The Board has implemented policies and processes to manage risk across all sectors of its operations.

The Board invests in financial assets for the purpose of obtaining income which is critical in the context of increasing scheme liability and the levy rate.

The investments of the Fund are managed by MLC Implemented Consulting (Australian and global equities, fixed interest, property, fixed interest securities). As a manager of managers, MLC is required to invest the assets under management in accordance with an investment mandate approved by the Board.

The Fund’s investments are subject to interest rate risks and the return on investments will fluctuate in accordance with movements in the market interest rate.

The inclusion of global equities in the investment portfolio subjects the Board to currency risk. The Board has determined 50% of the investments in this asset class are currency hedged. This ensures risks associated with currency exposure are minimised.

The Board has no significant concentration of credit risk. Operational practices ensure transactions occur with clients with a strong capacity to meet their financial commitments.

An actuarial review of the state and sufficiency of the Fund is conducted annually. This review confirms the current position and predicts whether income (levy and investment) will provide sufficient monetary reserves to meet future liabilities.




Note 2012 2011$000's $000's

4 CASH AND CASH EQUIVALENTS 2(g)

Commonwealth Bank 2,441 1,169 Short term deposit 1,000 - TOTAL CASH AND CASH EQUIVALENTS 3,441 1,169

5 RECEIVABLES 2(h)Employer Debtors 421 584 Provision for Doubtful Debts (115) (150)

306 434 Accrued Contributions 1,817 1,543 Sundry Debtors & Prepayments 169 31 TOTAL RECEIVABLES 2,292 2,008

6 INVESTMENTS 2(i)CurrentTerm deposits 9,000 -

Non-currentManaged Funds 70,565 77,571 TOTAL INVESTMENTS 70,565 77,571

7 PROPERTY, PLANT & EQUIPMENT 2(j)

Leasehold Improvements at Cost 82 82 less Accumulated Depreciation (60) (44)

22 38

Office Equipment at Cost 232 219 less Accumulated Depreciation (204) (183)

28 36

Office Furniture & Fittings at Cost 36 36 less Accumulated Depreciation (26) (25)

10 11

Motor Vehicles at Cost 161 156 less Accumulated Depreciation (64) (61)

97 95

For the purpose of the Cash Flow Statement, cash includes all bank balances and term deposits of less than 90 days. Cash at the end of the reporting period as shown in the Cash Flow Statement is reconciled to the related items in the Balance Sheet as follows :

The value of the Board's managed investments is subject to the Australian share market . At 10 September 2012 (the most recent date for which market valuation was available prior to the signing of these accounts) the market value of the Board's managed funds was $73,101,307 which indicated an unrealised gain of $2,536,420 in the realisation value of the managed funds since balance date.




Total Plant & Equipment at Cost 511 493 less Accumulated Depreciation (354) (313) TOTAL PLANT & EQUIPMENT 157 180

Leasehold Improve-

ments Office

Equipment Office

Furniture Motor

Vehicles Total $000's $000's $000's $000's $000's

Balance at Beginning of Year 38 36 11 95 180 Additions - 12 - 59 71 Disposals - - - (20) (20) Depreciation Expense (16) (20) (1) (37) (74) Balance at End of Year 22 28 10 97 157

ImpairmentThere were no indications of impairment of property, plant or equipment at 30 June 2012.

2012 2011$000's $000's

8 NET GAIN FROM DISPOSAL OF ASSETSPlant and Equipment Proceeds From Disposal - - Less net book value of assets disposed - (2) Net Gain (Loss) From Disposal of Plant & Equipment - (2)

Motor Vehicles Proceeds From Disposal 28 27 Less net book value of assets disposed (20) (18) Net Gain (Loss) From Disposal of Motor Vehicles 8 9

Leasehold Improvements Proceeds From Disposal - - Less net book value of assets disposed - - Net Gain (Loss) From Leasehold Improvements - -

Total Assets Proceeds From Disposal 28 27 Less net book value of assets disposed (20) (20) Net Gain (Loss) From Disposal of Assets 8 7

9 PAYABLES 2(k)Registered Contractor Contribution Fund 4,032 3,718 Accrued Worker Payments - - Trade Creditors 50 39 Sundry and Other Creditors 53 30 TOTAL PAYABLES 4,135 3,787

Movements in the carrying amounts of each class of plant and equipment between the beginning and the end of the financial year were as follows:




2012 2011$000's $000's

10 PROVISIONS 2(m)(n)CURRENT PROVISIONSProvision for Annual Leave 64 54 Provision for Long Service Leave 175 160 Provision for Worker Payments 10,000 8,000 TOTAL CURRENT PROVISIONS 10,239 8,214

NON-CURRENT PROVISIONSProvision for Long Service Leave 11 4 Provision for Worker Payments 73,453 71,372 TOTAL NON-CURRENT PROVISIONS 73,464 71,376

Annual Leave

Long Service Leave

Worker Payments

Doubtful Debts

$000's $000's $000's $000's

Carrying Amount at Beginning of Year 54 164 79,372 150 Provision Used (56) 10 (9,825) (35) Additional Provisions Recognised 66 12 13,906 - Carrying Amount at End of Year 64 186 83,453 115

2012 2011$000's $000's

11 WORKER PAYMENTSActuarial Assessment of 30 June Liability 83,453 79,372 Accrued Worker Payments as at 30 June - - Worker Payments during the Year 9,825 7,616 Actuarial Assessment in Previous Year (79,372) (69,853) Accrued Worker Payments In Previous Year - - WORKER PAYMENTS 13,906 17,135

12 AUDITOR'S REMUNERATIONAmounts received, or due and receivable by the auditors Auditing the Accounts 17 16 Other Services 1 1

18 17




2012 2011$000's $000's

13 OPERATING LEASE COMMITMENTS 2(l)Office lease commitments are as follows:0 to 1 year 135 130 1 to 5 years - 135 over 5 years - - Total 135 265

14 REMUNERATION OF EMPLOYEES 2(n)Salaries and Wages 853 689 Long Service Leave 22 8 Annual Leave 11 9 Employment on-costs - Superannuation 79 66 Employment on-costs - Other 25 34 Board Fees 13 11 Total Employee Benefit Costs 1,003 817

$140,000 to $149,999 1 1 Total Number Of Employees 1 1

15 BOARD MEMBERS' REMUNERATIONTotal income received, or due and receivable, by Board Members or their employerswas $13,000 (2010/2011: $11,000).All other transactions with Board Member related parties are on normal commercial terms and conditions no more favourable than those available to other parties.

The number of Board Members whose income from the entity falls within the following band is : No. Of

Members No. Of

Members Band$0 to $9,999 12 12

The names of Board/Deputy Members who have held office during the financial year are :

Margaret Sexton Steven Hall Bob DonnellyBentley Carslake James Whiting Colin FenneyMartin O'Malley Steven Minuzzo John CamilloRick Cairney Doug Buchanan Kevin Kelly

The following table includes all employees who received remuneration of $100,000 or more during the year. Remuneration of employees reflects all costs of employment including salaries and wages, superannuation contributions, fringe benefits tax and any other salary sacrifice benefits.




16 RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIESTO OPERATING SURPLUS

2012 2011$000's $000's

Operating Surplus 66 1,487

Non Cash Flow Items in Operating Surplus (Deficit): Depreciation 74 80 Loss (Profit) on Sale of Plant & Equipment (8) (7) Changes to Provisions 4,113 9,536 Registered Contractors' Interest 176 129 Investment (Gain) Loss (1,294) (6,122)

Changes in Assets and Liabilities Increase (Decrease) in Worker Payments Creditors - - Increase (Decrease) in Creditors 34 2 (Increase) Decrease in Receivables (284) (391)

Net Cash Provided By Operating Activities 2,877 4,714

17 FINANCIAL INSTRUMENTS : INTEREST RATE RISK ANDCREDIT RISK EXPOSURES

The Board manages its exposure to interest rate fluctuations through a formal set of policiesand procedures approved by the Board.

The Board does not engage in any significant transactions that are speculative in nature.

(a) Interest Rate Risk Exposure

The Board has exposures to interest rate risks on financial assets. The Board has cash at bankas at 30 June 2012 of $2,441,000 (2010/2011: $1,169,000), which bears variable interest rates.The effective weighted average interest rate as at 30 June 2012 was 4.93% (2010/2011: 4.63%).

The Board's only exposure to interest rate risk on financial liabilities is in relation to the Registered Contractor Contribution Fund as at 30 June 2012 of $4,032,000 (2010/2011: $3,718,000), which bears variable interest rates. The interest rate applicable to the year ending 30 June 2013 is 3.5% (2011/2012: 5.0%).

(b) Credit Risk Exposures

The maximum credit risk exposure of financial assets of the Board is represented by the carryingamount of assets recognised in the Balance Sheet, net of any provisions for losses.

Receivables are due from employers in the construction industry.

Apart from the foregoing the Board had no significant concentrations of credit risk with anysingle counterparty or group of counterparties.




2012 ANNUAL REPORT

Address: Level 2, 191 Fullarton Road,

Dulwich, SA 5065

Telephone: (08) 8332 6111

Toll Free Telephone: 1800 182 124

Facsimile: (08) 8333 4314

E-mail: [email protected]

Internet: www.cbserv.com.au

Documents

CONSTRUCTION INDUSTRY LONG SERVICE LEAVE BOARD 2012 … · 3 Construction Industry Long Service Leave Board ⎜ 2012 Annual Report OperatiOnal Record number of claims processed (1735)