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Joint Coal Board Reports 1999-2000


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Joint Coal Board

1999-2000

COAL MINES INSURANCE

Joint Coal Board

The Joint Coal Board is a body corporate w ith perpetual succession and a common seal

constituted under an arrangement between the Governor-General of Australia and the

Governor of New South Wales pursuant to the provisions of the Coal Industry Act 1946

(Commonwealth) and the Coal Industry Act, 1946 (NSW).

The main objectives of the Joint Coal Board are:

• To operate a fully funded, efficient, competitive and effective workers compensation

insurance scheme for the NSW coal mining industry.

• To provide the NSW coal mining industry w ith an occupational health service that

provides medical assessments, injury management, work environment monitoring

and health educational material.

• To provide a relevant user-pays statistical service on the NSW and Australian coal

industries.

• To provide international training/educational courses in coal production an utilisation

technology under the auspices of Australian aid programs and of international development agencies.

The Board maintains offices in Sydney, Singleton, Warners Bay, Corrimal and Lithgow -

see list of addresses on inside back cover. Further details on the Joint Coal Board may be found on its website at www.jcb.org.au

Our Vision

To be the best provider of integrated workers compensation insurance and occupational

health and rehabilitation services.

Our Mission

We shall deliver quality service that promotes health and welfare for our customers.

Year at a glance

Restructure The Commonwealth Government announced its intention to w ithdraw from the Joint Coal Board. The NSW Government has announced

its intention to create a new corporation to undertake the functions currently performed by the Board.

CMI Review A major review of Coal Mines Insurance was undertaken during the year. The review confirmed the fully funded position of CMI and recommended a number of initiatives to enhance CMI's service delivery.

Y2K

None of the Board's activities were affected by the "millennium bug".

GST

The Board developed an implementation plan that facilitated the smooth introduction of the GST to its operations.

Drug & Alcohol Program A seminar on random drug and alcohol testing was successfully conducted for Hunter Valley mines during the year and a series of posters produced.

Investment Portfolio The Board's investment portfolio returned 11.5% for the year.

Financial Result The Board incurred a loss of $7.6 million for the year. This was attributable to recognising, for the firs t time, superimposed inflation of $10 million in the outstanding claims provision.

Operating Results for the Year (year ended 30 June)

2000 $'000

1999 $’000

Premium income 51 958 45 923

Investment income 39 529 27 905

Total operating revenue 95 244 75 657

Claims payments 72 614 73 031

Increase in provision for Outstanding claims 12 696 10 742

Other operating expenses 14 965 14 774

Operating loss before abnormal items (5 031) (22 890)

Operating loss after abnormal items (7 647) (26 108)

Joint Coal Board 2 1 /4 4 Market Street Sydney NSW

October 2000

The M inister for Industry, Science and Resources

The Special Minister of State, M inister for Industrial Relations & Assistant Treasurer

In accordance with the Coal Industry Act 1946 (Commonwealth) and the Coal Industry Act, 1946 (NSW) the Joint Coal Board presents its 53rdAnnual Report, covering the year ended 30 June 2000. The report contains financial statements for the year.

The report of the Auditor-General of the Commonwealth required by the Coal Industry Act 1946 (Commonwealth) and the Coal Industry Act, 1946 (NSW) is attached to the financial statements in the report.

Ian L Farrar Chairman

Ronald P Land Member

Rodney J Ruston Member

Contents

Chairman's Overview

Business of the Board

The Organisation .....

Financials ...............

3

4

12

23

2

Chairmans Overview

The 1999/00 year produced new issues, challenges and opportunities for the Board.

The NSW coal industry continued its downturn. Employment fell by 5.4% to 9843 - down from 10400. While raw coal production increased 1.1% to 132.9 Mt, exports dropped 5.3% to 72.4 Mt. The major contributor to the downturn however, was the 17.7% decrease in the value of coal exports - down to $3,092 billion.

Premiums collected during 1999/00 increased to $51,9M despite industry declared wages (the figure on which our premium rates are calculated) reducing by 8.1% compared w ith the previous year. The main reason for the increase in premiums collected was the introduction of a 20% levy on policy holders from September 1999 to cover the $15 million increase in the cost of claims over the previous year.

Coal Mines Insurance, the Board’s insurance operation, reported a 7.5% decrease in the number of claims lodged during the year - down to 3285 from 3552. However, the claim rate - ie. the number of claims received per 100 people working in the industry - rose slightly to 32.4%. This is still unacceptably high. The average cost of each claim and the duration of absence continued to rise.

A major review of Coal Mines Insurance was undertaken during the year, at the request of the NSW Government. The main recommendations were to change reporting procedures and improve communication w ith stakeholders. These recommendations are currently being implemented. The financial state of CMI was also considered and I am pleased to report that

its fully funded position was not questioned by the reviewer's independent actuarial advice.

The Board incurred a loss of $7.6 million for the year. This was attributable to recognising, for the first time, the incidence of superimposed inflation on the projected value of outstanding claims as at 30 June 2000.

Board membership was constant throughout the year, w ith Ron Land, Northern District Secretary of the United Mine Workers Federation, representing the interests of coal mine workers and Rod Ruston, Executive General Manager - Coal for Savage Resources, representing the interests of coal proprietors on the Board. Rod Ruston's appointment ceased on 30 June 2000 and he is to be replaced by Ugo Cario, Managing Director, Austral Coal as the coal proprietors representative on the Board from 1 July 2000.

The Board was well prepared to cope w ith any "Y2K" impacts on its business and none of the Board's activities were affected by the "millennium bug".

Regrettably, there were three fatalities during the year - one each at Cooranbong, Tahmoor and Cumnock collieries. The Board extends its sympathy to the families of the three miners.

As reported last year the NSW Government has announced its intention to create a new corporation to undertake the activities currently performed by the JCB. This follows the Federal Government's announcement of its intention to w ithdraw from the JCB. The NSW Government is taking the opportunity to review the current fragmented arrangements surrounding the provision of health and welfare services to NSW coal miners. Consultations are continuing with all stakeholders in creating the new corporation.

Looking forward, I expect 2000-2001 to be a challenging year, for both the industry and the Board. The prime issues for the Board w ill include ensuring a smooth transition of the Board's activities to the new corporation, and the management of escalating claims' costs in the

midst of industry downsizing. For the industry, remaining competitive in a difficult economic climate w ill present a clear challenge.

I would like to acknowledge the support provided to the Board by our Federal Minister, Senator Minchin and our State Minister, Minister Shaw and their respective staffs during the past year. Following M inister Shaw's resignation from the NSW Parliament, M inister Della Bosca was appointed as the NSW M inister with responsibility for the JCB. We look forward to working with him.

Finally, I would like to thank the staff of the Board for their support during the year. Their efficiency and flexibility has enabled the Board to respond to a changing environment ensuring we deliver a quality service that promotes health and welfare for our customers.

J

M r Ian Farrar

Ian L Farrar Chairman

Business of the Board _

During 1999-00,

drugs and alcohol

and the health

effects of diesel

particulate

continued to be

investigated.

The Joint Coal Board's tw o major operating divisions are Coal Mines

Insurance and JCB Health.

Coal Mines Insurance provides workers compensation insurance services

to all coal mines in NSW.

JCB Health provides the occupational health services associated with

Coal Mines Insurance, and also those health related services that enable

the Board to discharge its legislated responsibilities for the health of

mine workers.

Between them, Coal Mines Insurance and JCB Health employ around

80% of the total staff of the Board, and provide the major interface

between the JCB and the industry.

This section of the Annual Report provides information about the major

activities of the Board's operations during the past year.

JCB Health Activities ..................................................................... 5

CMI Activities ................................................................................ 7

Year 2000 Plan ................................................................................ 8

Comparative Statistical Profile .................................................. 9

Board Members ............................................................................. 10

Organisation Chart ................................................................... 11

The Board's charter to promote health and welfare in the NSW coal industry requires that it provide occupational health services that deliver health assessments, injury management, work environment monitoring and health education services. To ensure that the services are provided professionally and competitively, the Board also reviews its policies and practices on a regular basis.

The routine health assessment service provided by JCB Health continued throughout the year. Periodic health assessments are focussed on obtaining medical surveillance data for the entire NSW coal industry', and for monitoring for health problems more likely among coal miners over an individual's working life. The protocol for periodic health assessments

reflects best practice in technical procedures and information collection, and is standardised across the four JCB Health offices. As w ell, JCB Health continued to perform a range of health assessments for the industry, as illustrated in Table (below right). The use of the mobile facility to conduct health assessments on site has increased from last year, and the van was utilised constantly throughout the year, mostly in the Upper Hunter and in the Western coal fields.

3 :

Health Assessments 1

During the year, JCB Health continued to focus on drug and alcohol issues in the industry. JCB Health provides the technical input to the Board's Drug and Alcohol Committee, and w ill be the primary implementer of the initiatives of the committee. A seminar on random drug and alcohol testing was conducted during the year for the Hunter Valley mines w ith a sim ilar seminar being planned for the southern and western coalfields in 2000-2001.

The first initiative of the committee involved an awareness raising campaign around the effects of use of drugs and alcohol on the workplace. Rosters were distributed to all mines in NSW for use by their occupational health and safety staff. As well, JCB Health is contracted to several mines to perform random drug and alcohol testing on their workforces.

JCB Health continued to be involved in preparing and presenting various tailored training and education programs in NSW coal mines. The programs concentrate on back care, hearing loss prevention, skin cancer detection and prevention, first aid, eye protection and accredited Occupational Health and Safety Coordinator training.

1996 1997 1998 1999 2000

North & North West special medical 72 81 66 59 220

pre-employment 991 1431 686 819 1010

| mines rescue 283 285 114 149 132

periodic - on site 1061 979 830 918 1262

periodic - off site 1281 785 796 921 579

Total - North3688 3561 2492 2866 3203

South & West special medical 94 45 59 190 105

pre-employment 578 388 304 346 255

mines rescue 246 234 203 176 142

periodic - on site 126 134 72 79 131

periodic - off site 1564 1352 1253 726 595

Total - South 2608 2153 1891 1517 1228 1

Total 6296 5714 4383 4383 4431

Following a review of the Board's Order No 34 guidelines regarding induction training programs during the year, the guidelines were amended to require that induction training be provided based on a competency model ie. to ensure the competence of persons to safely and effectively perform the tasks related to their work at the mine. Most coal mines in NSW have submitted to the Board for approval revised induction training programs based on competencies.

JCB Health's rehabilitation service operates in each NSW coal district. During 1999-2000 JCB Health maintained formal WorkCover Authority of NSW accreditation for our occupational rehabilitation service. The success of the service is illustrated by its ability to return injured coal miners to work, as shown in the table (right). There are occasions where injured workers are unable to return to work in the coal industry, and JCB Health runs a Vocational Retraining Program th a t may be available in those situations. The Board's physiotherapists perform a major role providing advice to injured mineworkers about prevention and treatment of injuries. Physiotherapy treatment is also provided to injured and retired mineworkers.

Rehabilitation Performance

Rehabilitation 1999-00

Performance JCB Health* 1999-00 All Providers*

Return to Work Rate 81% 74%

Average Cost of Rehab $1,175 $2,499

Average Duration of Rehab (months) 4.0 6.3

Average Delay from Injury to Referral (months) 4.0 5.2

I

* independent figures provided by WorkCover Authority of NSW

: Business of the Board

Industrial Hygiene The Board continues its active interest in industrial or occupational hygiene issues within the coal industry. The Board's Standing Committee on Dust Research and Control continued to meet during the year. This Committee is an expert advisory body comprising representatives of the colliery proprietors, mining unions, government departments and Joint Coal Board medical and technical personnel. The Committee meets regularly to monitor dust sampling results, evaluate dust hazards and encourage research to improve dust control methods. During the year the Committee visited Bengalla, Myuna, Wallarah and Hunter Valley No 1 collieries and participated in an Australian Coal Association Research Program (ACARP) funded workshop on Dust Measurement and Control in Thick Seam Mining.

Diesel

jj

Particulate

•«$s„

X

■ *

The Diesel Particulate Sub Committee of the Standing Dust Committee also continued to operate throughout the year and the video and booklets they produced continue to be sought by many organisations including overseas organisations in Canada, UK, USA & South Africa.

Pursuant to its Order No 40, the Board requires that new longwall developments be approved prior to their commencement. This enables the Board to ensure that adequate dust suppression and ventilation measures are in place to minimise workers' exposure to respirable dust. During

1999/2000 the Board consented to 24 requests for approval to commence longwall operations under Order No 40.

Respirable dust and diesel |n any year, goarc| staff, and in particular JCB Health staff, may be asked to research various particulate booklets and video topjcs reggrding coa, miners· hea|th

In the past, this has involved the Board in studies on electronic devices being used underground, clothing suitability during mines rescue, or the occurrence of cancer in coal miners when compared to the normal population.

JCB Health's Occupational therapists have continued to provide their services to various mines in the Newcastle and Hunter regions. Functional assessments and task analyses have been completed for various mines and individual miners.

Pneumoconiosis Prevalence

NSW Coal Industry 1970-2000

The ILO classification of x-rays is a method of grading based on x-ray appearance and may be interpreted as the following:-ILO+1 = People w ith diagnostic features of dust exposure but no clinical symptoms.

ILO+2 = People w ith more severe dust exposure than above and likely to have symptoms

|

70 71 72 73 74 75 76 77 78 70 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 06

Year

For the third year running, the Board has included in its report information about the prevalence of pneumoconiosis in the NSW coal industry. Rates of pneumoconiosis in NSW continue to be less than 0.5%. The tw in strategies of proper ventilation and dust suppression continue to control the disease in the NSW coal industry.

6

The Joint Coal Board continues to operate its workers compensation insurance business as a fully funded scheme.

During 1999-2000 there has been a modest decrease in claims numbers consistent with the smaller industry size. However, costs still remained higher than previous actuarial predictions as the accumulated liability of CMI's long-tailed business is paid out, especially in the areas of lump sum claims for old injuries and maintenance payments for partial incapacities.

Common law claims continue to rise w ith 72 registered this year, up from 57 last year. These are a major expense in the forward liabilities although the increased number of claims has, in part, been offset by a lower average cost.

CMI continues to optimise its ability to settle claims outside of the court process by its pretrial negotiation sessions. These were set up in conjunction w ith the CFMEU who support the plaintiff and their legal counsel. Usually clearance rates of about 70% are achieved which help relieve pressure on the currently stretched court sitting times.

During the year a major review of CMI, and to a lesser extent the Joint Coal Board, was undertaken by KRMG senior partner, M r Richard Grellman at the request of the NSW Government.

The main recommendation was to change reporting procedures and improve communication with stakeholders. It also recommended:

• promoting competition for those services provided to CMI by its suppliers; and

• identification of non-core activities which might be more cost effective if placed in a competitive out-sourced environment.

CMI's financial state was also considered as part of the exercise and its fully funded position was not questioned by the reviewer's independent actuarial advice.

CMI also embraced injury management, as defined in the 1998 WorkCover amendments, consistent with the purpose and the spirit of the new Act. It has been an expensive undertaking requiring the appointment of three medical professional staff as w ell as their support and infrastructure. Unfortunately the financial benefits of injury management are yet to be realised through the claims system or reflected in the outstanding claims provision.

CMI also adapted to shrinking employment in the NSW coal industry. It has nearly halved its staff numbers in the Sydney office and has also reduced staff in the Wollongong and Newcastle districts. Changes in the structure of the industry has meant that staffing levels needed to be moved to the Singleton area where a moderate increase was required, at least for the present.

The major challenges for CMI for the coming year w ill be to implement the agreed recommendations in the Grellman Review.

Coal M ines

Insurance (CM I)

Claims costs still

remain higher than

predicted despite a

reduction in the

numbers of claims.

■ H B B H H H i

j. Business of the Boari

International Coal Technology Training

Year 2000 Compliance

GST Compliance

During the year, the Board developed a revised international coal utilisation technology training program focussing on greenhouse gas reduction methodologies. However, this was not proceeded with due to a shift in emphasis to renewable energy technologies from the funding bodies.

The Board was well prepared to cope w ith any Ύ 2Κ " issues. None of the Boards activities were affected by what was colloquially known as the "millennium bug".

In October 1999 a GST committee was convened to examine the potential impact of a Goods and Services Tax (GST) on the various operations of the Joint Coal Board.

The committee was responsible for reviewing the GST legislation, and developed an implementation plan for the period leading up to the introduction of GST that addressed system changes and other relevant issues, including providing timely information to policyholders and customers.

During June, training and other relevant information was provided to staff in all Board I offices to prepare them for the introduction on 1 July 2000.

The Joint Coal Board is registered for GST w ith ABN 13 893 024 538.

Comparative Statistical Profile

Year Ended 30 June

Notes Units 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000*

Industry Declared Wages $m 850.0 883.0 847.0 799.0 813.0 875.0 946.0 887.9 754.9 693.7

Average Number Employed (a) No 1700016600 15100 14700 14300 14473 14793 13522 11064 10150 Premiums Received (b) $m 54.0 39.0 33.0 32.5 38.0 55.8 60.0 54.0 45.9 51.9#

Avg Industry Premium Rate (b) % 6.4 4.4 3.9 4.1 4.7 6.4 6.3 6.1 6.1 6.4

Premium Cost per Employee (b) $ 3176 2349 2185 2211 2657 3855 4056 4008 4140 5113

Workers Compensation Claims Lodged No 7510 6616 5903 5690 6231 5533 5095 4651 3552 3285

Claim Rate (c) % 44.2 39.9 39.1 38.7 43.6 38.2 34.4 34.0 32.1 32.4

Payments on Claims $m 70.0 80.0 77.0 72.4 68.1 64.9 69.1 57.8 73.0 72.6

Provision for Outstanding Claims$m 254.0 248.0 223.0 212.4 221.3 233.0 232.3247.7 261.7 277.0

Raw Coal Production mTonnes 96.7 101.2 102.9 101.9 107.8 113.1 123.6134.0 131.4 132.9

Premium Cost per Tonne of Coal Produced $ 0.56 0.39 0.32 0.32 0.35 0.49 0.49 0.400.35 0.39

Lost Time Injury Frequency Rate (d) No 143 108 78 68 73 56 48 52 39 34

Severity Rate (e) Days 2546 1878 1210 1128 1332 1050 999 1215 1079 954

No of Mines No 72 70 67 68 69 72 68 66 64 58

Days Lost per Employee due to Industrial Disputes Days 4.7 5.1 2.5 6.7 2.0 5.0 5.8 5.4 2.6 2.4

Days Lost per Employee due to Workers' Compensation Days 4.7 4.0 3.4 3.6 4.1 3.7 3.3 3.2 3.5 3.3

Fatalities No 9 7 4 1 2 2 6 2 3 3

Investment Income (f) $m 55.5 50.437.1 21.6 29.5 37.5 55.1 33.3 27.9 39.5

Total Assets (f) $m 396.0 382.0 352.0 312.5293.3 306.2 332.1 344.6 327.6 330.2

Accumulated Funds (f) $m 103.2 55.7 56.4 42.5 22.4 24.0 55.7 57.3 31.1 23.5

Staff (g) No 207 177 143 139 131 130 130131 123 114

Notes

(a) from 1991 this figure includes all employees exposed to risk, including mines rescue personnel, central office

staff etc.

(b) these figures do not take into account special premium rates

(c) the claims rate is arrived a t as follow s number of claims during the period x 100_ _ _ _ _ _ _

number of employees exposed to risk during period

(d) number of lost tim e injuries per m illion hours worked

(e) days lost due to absences on workers compensation per m illion hours worked

(f) the figures from 1992 onwards are not directly comparable w ith previous years due to changes in

accounting standards

(g) staff numbers as a t 30 June 2000

(*) preliminary

I#) ?nnn flnure includes 20% le w

Board Members

The Current Board Appointments to the Board are for terms of up to three years. The terms of the Chairman and Members expired on 30 June 2000. Members have w id e

ranging experience in

the fields of business

management, coal

mining and industrial

relations.

1 f

IAN FARRAR, B.Comm; FCPA; FCIS; FAIM; FAICD

Ian Farrar was appointed Chairman and Chief Executive Officer of the Joint Coal Board in July 1992.

Prior to this Ian was Senior Principal Advisor to the Commonwealth Scientific and Industrial Research Organisation (CSIRO), Australia's largest research organisation and has extensive experience in research management.

An accountant and economist by training, Ian is a Fellow of the Society of Certified Practising Accountants, a Fellow of the Chartered Institute of Secretaries and Administrators, a Fellow of the Australian Institute of Management and a Fellow of the

Australian Institute of Secretaries and Administrators.

ROD RUSTON, B.Eng (Mining), MBA

Rod Ruston was the Executive General Manager for Savage Resources w ith responsibility for the Company's coal operations at Liddell in the Hunter Valley and Togara in the Bowen Basin and the copper/gold operations at Ernest Henry in Central Queensland.

Rod is a mining engineer w ith a business degree and 25 years experience in the coal industry. His experience has included managing both Darkes Forest and West Cliff coal mines in the Southern District of NSW, General Manager of Coalex which operated Clarence l| and Baal Bone Collieries in the Western District of NSW and Managing Director of Wambo in the Northern District prior to taking up his current role.

Rod was appointed the employers' representative on the Board in May1997.

RON LAND

Ron Land is the Secretary of the Northern Branch of the United Mine Workers Federation. Ron is also Deputy Chairman of CoalSuper, Company Secretary of United Mining Services Limited, and is a Trustee of the Joint Coal Board Health and Safety Trust and the United Collieries Trust Fund.

Ron has extensive experience as an underground mine worker, w ith 14 years experience working for a variety of coal mines in the northern coal district, before becoming Northern District Secretary of the CFMEU in 1985.

Ron was appointed the employees' representative on the Board in February 1998.

Our Organisation

Board

i

CEO

j 1

§

Bill Kirby

Sharon Buckley

Peter Flemming :

Kay Jones

claim s management injury management litigation underw riting

statistics

m edical

rehabilitation industrial hygiene training research

Coal Mines Insurance

Bill Kirby

Bill O Shannessy

Carol Mische

JCB Health

Sharon Buckley

Bill Pollock

Darren Croese

Judy Keller

Denis Glover

Ken Cram

adm inistration finance investm ents

nformation technology

Coal Technology Training

Paul Junee

Corporate Support

Kay Jones

Peter Flemming

Eric Doldissen

As at

30th June 2000

The Organisation

This section of the

Annual Report

provides information

about the organisa­

tion, its staff and the

internal systems of

the Board.

The Board performs optimally when the right people, structures and

systems are in place to manage, train, support and appropriately

resource its business. The Board manages its accounting, human

resources and information technology functions centrally.

Considerable effort is expended each year in planning for all areas of

the Board's operations. Strategic and operational plans provide

guidance to managers and staff, and appropriate financial, computing

and human resource professionals support the businesses.

The Board, its powers and functions ............................................... 13

Corporate Activities ........................................................................ 15

Corporate Governance Statement ................................................... 17

Associated Groups, Committees and Appendices ........................... 19

Financials ...................................................................................... 23

12

The Organisation

The Joint Coal Board is constituted under an arrangement between the Governor- General of Australia and the Governor of New South Wales made pursuant to the provisions of the Coal Industry Act 1946 (Commonwealth) and the Coal Industry Act, 1946 (NSW).

The powers and functions of the Board are stated in identical provisions of the Commonwealth Act, sections 23 to 27, and the New South Wales Act, sections 24 to 28, and are as follows:

- to provide occupational health and rehabilitation services for workers engaged in the coal industry including providing preventive medical services, monitoring workers' health and investigating related health matters;

- to collect, collate and disseminate accident and other statistics related to the health and welfare of workers engaged in the coal industry;

- to refer matters relating to the safety of workers engaged in the coal industry, as it thinks fit, to the Chief Inspector of Coal Mines or the Commonwealth M inister and the State M inister for consideration;

- to provide courses in the production and utilisation of coal under international development assistance programs sponsored or administered by the Commonwealth Government or approved by the Commonwealth Minister and the State Minister;

- to report to the Commonwealth Minister and the State M inister as it thinks fit, or when requested by either Minister, on matters related to the health or welfare of workers engaged in the coal industry, or on any other matter concerning or arising out of the Board's powers or functions;

- to publish reports or information of public interest concerning or arising out of the Board's powers or functions; and

- to promote the welfare of workers and former workers in the coal industry in the State, their dependants, and communities in coal mining areas.

Until such time as the Commonwealth Minister and the State M inister direct, the Board has the following powers and functions:

- to monitor, promote and specify adequate training standards relating to health and safety for workers engaged in the coal industry; to monitor dust in coal mines; and to collect, collate and disseminate statistics related to the coal industry, other than statistics related to the health and welfare of workers.

The Board has power to establish workers' compensation insurance schemes and to require any employer in the coal industry in the State to effect w ith or through the Board all workers' compensation insurance in respect of the employer's employees in that industry.

Powers and Functions of the Board

13

The Organisation

The Coal Industry Act 1946 (Commonwealth) is administered by the Commonwealth Minister for Industry, Science and Resources. The Coal Industry Act, 1946 (NSW) is administered by the NSW Special Minister of State, M inister for Industrial Relations and Assistant Treasurer.

The Coal Industry Acts provide that the Board must by 31 May each year submit to Ministers an annual operating plan for the year commencing on the following 1 July. The plan must address the strategy the Board proposes to adopt in exercising its powers and functions.

The Board is subject to the joint control and direction of the Commonwealth Minister and the State Minister. Either M inister may, with the agreement of the other Minister, issue written directions to the Board and it is the duty of the Board to carry out any direction given. When requested by either Minister, the Board must furnish reports to both Ministers on matters of policy. No direction or requirement has been issued during 1999-2000.

Member Eligible to Attend Attended

Mr Farrar 11 11

Mr Ruston 11 10

Mr Land 11 11

ipigi

p i !

X

k m

Responsible M inister

Annual

Operating Plan

Direction on M atters of Policy

' i l l

Board M eetings During the Year

14

The Organisation

The Board is committed to attracting, training and developing quality staff. It has a commitment to equal opportunity in employment and to industrial democracy based firmly on human rights principles. During the year the NSW Industrial Relations Commission approved an Industrial Award and Enterprise Agreement for Board staff.

The Board has in place a performance review and development program where personal objectives are set for each staff member relating to the performance of their particular job. Staff and supervisors agreed on the training and resources required to achieve the

objectives set out in the Board's operational plan.

The Joint Coal Board recently published a new Human Resources Strategic Plan. The plan provides a focus for human resources activities for the next 3-5 years, with an emphasis on providing services to assist divisions to remain competitive and adapt to our changing

environment.

The format is based on the identification of human resources roles and functions and acknowledges the impact of both internal and external factors in this area. Our strengths, weaknesses, threats and opportunities were also examined to help devise appropriate strategies to focus human resources functions.

Salary Female % of total Male % of total TOTAL

Under $30,000 15 13 0 0 15

$30,000 - $40,000 45 39 7 6 52

$40,000 - $50,000 12 11 6 5 18

$50,000 - $60,000 10 9 8 7 18

$60,000 - $80,000 2 2 1 1 3

$80,000 and above 2 2 6 5 8

Total 86 76 28 24114

Note: Figures do not include casual staff

Richard Addinall, Renae Alam, Janet Alania, Gai Alder, Anne Anderson, Frances Arjonilla, Maria Arsenovic, Cindy Atkinson, Belinda Bailey, Tammy Ballard, Kerrie Barnett, Tony Bezzina, Cena Biscocho, Craig Bloomfield, Lillian Bond, Kym Bright, Sharon Buckley, Margaret Butler, Wendy Cairns, Sue Calvert, Natalie Card, Judy Carlisle, Victoria Catimbang, Helen Chung, Wendy Cordell, Ken Cram, Darren Croese, Jill Davidson, Julie Delves, Rebecca Dicks, Eric Doldissen, Julie Evans, Katrina Evans, Anne Evers, Sandra Felder, Lyn Ferguson, Peter Flemming, Leisa Floyd, Belinda Frandsen, Jo Garey, Stephanie Gilfillan, Sue Gilroy, Antony Gloss, Denis Glover, Glenn Goodwin, Kay Grew, Sarah Hamilton, Stella Hardas, Ros Harding, James Hardy, Moya Harper, Julie Heuston, Fiona Holman, Tanya Howe, Eva Hua, Suzanne Johnson, Anissa Jones, Anita Jones, Kay Jones, Paul Junee, David Kane, Judy Keller, Chris Kelly, Jody Kerr, Kim Kerr, Bill Kirby, Kerry Klaus, Diane Lamb, Allen Lee, Ruth Liou, Paul Livingston, Dana MacPherson, Fernando Mariano, Karina Mason, Graeme McDonald, Freda Meenaghan, Connie Merritt, Carol Mische, Narelle Morsillo, Ellen Mungoven, Gerald Nairn, Gail Narvo, Maree Newton, Danny Ngo, Kirsten Nicholls, Nola O'Connor, Bill O'Shannessy, Tom Packovski, Ron Phillis, Lynette Pike, Bill Pollock, Ellen Prescott, Geoff Pritchard, Sarah Pryor, Karen Quinn, Robyn Quinn, Maria Reynolds, Liz Rienstra, Alison Roach, Cheryl Roach, Karen Rock, Rebecca Rumbel, Amanda Shultz, Melinda Scott, Alison Sedman, Lynn Sinclair, Luisa Solari, Jacqui Solomon, Chris Sparsis, Sandra Speakman, Donna Stocks, Pauline Suhr, Henry Swan, Debbie Tancred, Sally Taylor, Sandy Thai, Belinda Thomas, Peter Thurgood, Lyn Tran, Kylie Vanderlely, Shamali Viswakula, Scott Wasted, Bruce Whyburn, Paula Wickham, Kim Wilkinson-Kerin, Sharyn Williams, Denise W illis, Elaine Winterbine, Renia Woodard, David Wu.

The Board ensures that

its level of service

matches the industry's

demand through

appropriate training

and development.

1

Staff Salaries (as at 30 June 2000)

Our Staff (as at 30 June 2000)

=

The Organisation

Finance and investment

W hilst premium income for the year of $52.0 million and investment income of $39.5 million are higher than the previous year, payments on claims remained above $72.0 million and the liability for outstanding claims increased a further $12.7 million to $277.0 million. Total equity at 30 June 2000 was $23.5 million.

The investment portfolio produced solid returns from all asset classes for the twelve months ending 30 June 2000, particularly Australian and overseas equities where all fund managers outperformed the benchmark indices.

In order to ensure the Board's investment strategy provides security and performance, an investment committee regularly reviews the asset allocations w ithin the portfolio.

The consolidated financial statements for the Joint Coal Board for the year ended 30 June 2000 appear on pages 23 -52 of this report. They show an operating loss for the twelve months of $7.6 million.

The following table shows the current asset allocations of the Board's investment portfolio:

Asset Classes

:

Asset Class Approved Asset Allocation Range (%)

30/6/99 $(000)

(%) 30/6/00 $('000) (%)

Cash and Money Market 0-25 1 845 0.6 8 356 2.6

Fixed Interest 15-50 107 277 33.6 86 668 27.1

Australian Equities

10-35 90 58628.4 99 369 31.0

Property Trusts 0-5 14 246 4.5 10 026 3.1 :

Overseas Equities

5-15 22 325 7.0 32176 10.0

Property 15-30 82 444 25.8 83 147 26.0

Other 1.0 457 0.1 162 0.1

Unsettled Transactions

(32) (0.0) 358 0.1

Total 319148 100.0 320 262 100.0

Corporate Governance Statement

The Board is responsible for the business of the economic entity, including its strategic direction within the parameters established by its governing legislation, establishing goals for management and monitoring achievement of those goals. The Board has established a framework for corporate governance which includes an Audit Committee, a process for the

identification of risk and its management through a system of internal control and the establishment of appropriate ethical standards.

The Board consists of three people: an independent Chairperson, a Member representative of coal industry employers, and a Member representative of coal industry employees.

The Audit Committee comprises the tw o Members of the Board representing the coal industry's employers' and employees' interests and a retired general manager of the Board.

The role of the Committee is to review all aspects of the internal and external audit processes, including the monitoring of the identification and management of risk. Details of systems reviewed by the Audit Committee during 1999-2000 are listed on page 23 of this report.

"

Board

1 Audit Committee

The Board acknowledges that it is responsible for the overall internal control framework. To assist in discharging this responsibility the Board has instigated an internal control framework which includes:

Risk Management and Internal Control System

The risks involved in achieving the Board's objectives and the system of internal control in place to ensure that those risks are kept within acceptable limits are monitored by the Audit Committee through Internal Audit.

Financial Reporting

A comprehensive budgeting system is in place with an annual budget approved by the Board. Monthly actual results against budget are reported to the Board and variations examined.

Fraud Control

The Board has a fraud control plan in place and it is updated on a regular basis. The current assessment of the plan is that the potential for fraud at the Board is low.

Internal Audit

An internal auditor reports directly to the Chairman of the Audit Committee and is responsible for monitoring, investigating and reporting on the system of internal control and the risks that this system mitigates.

Risk M anagem ent and Control

The Board recognises the importance to good corporate governance of a high standard of conduct by the Board and its people. The Board has developed ethical standards and a Code of Conduct for its Members.

Ethical Standards and Code of Conduct

Code of Conduct

Ethical Standards

Board M em bers

I

§

Our first responsibility is to the people who comprise the NSW coal industry; the workers and the management of the coal mining companies to whom we provide a service. In meeting their needs everything we do must be of high quality. W ithout compromising quality we must constantly strive to reduce our costs to ensure premiums are minimised and services we provide on a "user pays" basis are provided at reasonable prices. Services we provide to our stakeholders must be provided efficiently and be of a high quality. Advice to Ministers must be timely and unbiased. Suppliers of goods and services to the Board must have an opportunity to compete for our business on an equitable and fair basis, and we must recognise their legitimate aim is to make a fair profit.

We are responsible to our employees; each must be considered as an individual.

We must respect the dignity and recognise the merit of each employee. Remuneration must be fa ir and adequate, and working conditions clean, orderly and safe. Employees must feel free to communicate and to make suggestions and complaints. There must be equal opportunity for employment, development and advancement for those qualified. We must provide competent management and the actions of management must be just and equitable.

The Board has instituted a code of conduct for the Chairman and Members to ensure they act in good faith, with appropriate skill, care and diligence in the interests of the NSW coal industry. They have a fiduciary duty of loyalty to the Joint Coal Board as a whole and to meet these requirements the Chairman and Members must:

• at all times act honestly

• exercise due care in the performance of their duties

• be diligent, attend Board meetings and make themselves knowledgeable about the operation of the JCB

• ensure that systems are established within the JCB to provide sufficient and accurate data on a regular and timely basis

• act in the interests of the JCB as a whole

• avoid conflicts of interest

• be independent in their judgements and actions

• maintain confidentiality of information provided and not disclose it unless there is agreement of the Board to do so.

18

Associated Groups, Committees and Appendices

The Joint Coal Board is represented on several coal related organisations. The strategic alliances created allow for the Board's expertise to be utilised to the benefit of the NSW coal industry.

Structure of the Trust

The Joint Coal Board Health and Safety Trust, formed by the Board in 1991, has as its objects the funding of research aimed at improving health and safety of coal miners at work. The Trustees during 1999-2000 were:

Trustees

Ian Farrar Chairman, Joint Coal Board

Ron Land Member, Joint Coal Board; Member Coal Super

John Maitland National Secretary - CFMEU

Dick Austen A0 former Mining Executive

Peter Hayes General Manager Operations, Coal Operations Australia Ltd.

Papers on several projects funded by the Trust have been presented at industry and scientific conferences in Queensland and NSW throughout the year. The Trust also exhibited the results of its research efforts at the 1999 AIMEX exhibition in Sydney.

During the year the Trust evaluated its research priorities to ensure that they remain up to date and expanded the priorities to include stress and fatigue, and altitudinal factors.

Final reports were released for tw o of the major projects completed during the year viz. the Protective Footwear Study conducted by Ms Shirley Marr and the Remote Control Vehicle project conducted by Professor Jean Cross.

Further information about the Trust and its activities can be obtained from Sharon Buckley, Trust Secretary, Telephone: (02) 9291 5658; Email: buckley@jcb.org.au or from Ken Cram, Project Liaison Officer, Telephone: (02) 4222 9023; Email: cram@corrim.jcb.org.au

Joint Coal Board Health and Safety Trust

!

1 Exposure to Whole Body Vibration for Drivers and Passengers in Mining Vehicles Part 1 - Open Cut Mines and a Coal Loading Terminal

2 Investigation into the Problems Associated w ith the Wearing of W ork Boots in the NSW Underground Coal Mining Industry

3 Sudden and Uncontrolled Roof Failures

4 Hazards of Remote Control in Mining

5 Feasibility of Simulation Technology for Training in the Coal Industry

6 National Workplace Health Project

Projects completed during 1999-2000

:

:

19

Associated Groups, Committees and Appendices

Hunter V alley Coal Chain Council

Priority Areas for Research Funding

The Trust has links w ith the major research funding bodies in the Coal Industry, and it targets its research at health and safety issues for the industry. It sets its priority areas after consultation with the other major funding bodies to ensure that minimal duplication occurs in the research funded. The Trust also examines relevant statistical information on accident

and injury trends in the industry prior to setting its priority areas.

Currently, the Trust has six priority areas. There are three broad areas, which are separated into tw o specific categories each. They are as follows: -Research Priority Areas

Injury Sprains and Strains

Manual Handling

Disease Noise, and Noise Induced Hearing Loss

Other Occupational Disease

Human Factors Fatigue and Stress

A ttitudinal Factors Affecting OHS Outcomes

The Trust wants to fund research that has the most potential to have an impact on the health and safety of workers in the Australian coal industry. New applications were called in June 2000.

The Joint Coal Board chairs the Hunter Valley Coal Chain Council and provides its Secretariat. The Council meets quarterly to discuss issues and resolve problems arising across the coal chain in the Hunter Valley. Membership of the Council is drawn from organisations including PWCS, Newcastle Trades Hall Council, FreightCorp, CFMEU, Department of Mineral Resources, Department of Industrial Relations (State), the Newcastle

Port Corporation and the Maritime Union of Australia. The Council's wide representation from organisations across the coal chain helps to identify potential problems before they arise, and provides a forum for addressing issues of concern to the Members.

Associated Groups, Committees and Appendices

The Joint Coal Board established the Audit Committee to assist it to meet its responsibility for good corporate governance and accountability. During 1999-2000, membership of the committee was as follow s:-

Rod Ruston Board Member Chairman of the Committee

Ron Land Board Member Member of the Committee

Lloyd O'Brien Past General Manager Member of the Committee

Representatives from the Board's Internal Audit function and relevant managers attend meetings of the committee, whose function is to review and guide the internal audit process. During 1999-2000, the Audit Committee reviewed reports from the Board's Internal Auditor on the follow ing systems:-

- premium rate setting - premium income - claims and related systems - miners' group certificates - statistics and publications - investments and reserves - purchasing and creditors - accounting systems - tax compliance review - human resources and payroll inch Employees' group certificates - Funeral Benefits Trust - Health and Safety Trust - fraud control plan - A udit Committee performance review - A udit Committee preparations - External Audit recommendations

The committee also meets periodically w ith delegates from the Australian National Audit Office to coordinate the total audit function and to receive any reports from them relating to internal control. The Board's financial statements are reviewed by a separate committee.

Audit Committee

The Joint Coal Board Occupational Health and Safety Committee comprises a representative from each Board office and a management representative. The purpose of the committee is to help identify, report on and monitor issues relating to the occupational health and safety of the Board's staff.

Occupational Health and Safety Committee

Committee meetings were held on four occasions throughout the year at different district locations.

The management representative on the Committee, M r Ken Thorne, resigned his position during 1999 and was initially replaced by Ms Sharon Buckley and then by Mr Peter Flemming.

21

· Η Η · Η · Ι .

Freedom of Information

Statistical Publications

(See the JCB Website at

www.jcb.org.au

for price information and order forms)

Associated Groups, Committees and Appendices

The Board's statement for the purposes of the Freedom of Information Act 1982 appears in accordance with Section 8 of the Act as follows.

FOI Procedures and Initial Contact Points

All enquiries for access to documents under FOI should be made to the Human Resources Officer, Joint Coal Board, 44 Market Street, Sydney, telephone (02) 9291 5666. Board publications may be obtained and inspected at this address.

Arrangements for Outside Participation

As the Board is set up under essentially identical Acts of the New South Wales and Commonwealth Parliaments, the right of the New South Wales Government to participate in the Board is the same as that of the Commonwealth Government. There is no other formal arrangement for outside participation.

Categories of Documents

Publications produced by the Board are listed elsewhere in this report. The Board maintains files containing documents relating to its functions and responsibilities and to its internal administration. Documents include personnel records, reports, minutes, correspondence and accounting records. Other categories of documents held are medical data on coal mine workers, accident statistics, Board Orders and Alnewcol Circulars.

The Board's business records, accounting records, statistical data and accident data are accessible by computer. No requests for information under FOI were made in 1999-2000 for information held by the Board.

New South Wales Coal Statistics

Annual publication containing comprehensive statistical information on production, employment, productivity, exports and domestic consumption of New South Wales coal.

Australian Black Coal Statistics

Annual publication produced in co-operation w ith the Department of Mines & Energy, Queensland. Contains a wide range of industry statistics for the 1999 calendar year, resource data and producers directory

Lost-Time Injuries and Fatalities. New South Wales Coal Mines

Annual publication containing lost-time injury and fatality statistics for NSW coal mines.

Injury and Disease Claims. New South Wales Coal Mines

Annual publication containing injury and disease claim data for NSW coal mines.

Australian Lonawall Quarterly Report

Production, productivity and equipment information on an individual mine basis to assist the underground longwall industry to gauge performance. 4 issues - March, June, September and December quarters plus a copy of

Australia's Lonawalls

Annual publication co-produced w ith Australia's Mining Monthly - comprehensive profiles on longwall mines, new projects and a statistical review of the calendar year.

Visit the JCB Website for a complete list of available publications, reports and spreadsheets.

Joint Coal Board Financial SlfUlHIl

year ended 30 June 2000

ilated (losses) profits at beginning of financial year

ailable for appropriation

ilated losses at end of financial year

ive p ro fit and loss statements should be read in conjunction with the accompanying notes.

m ! wm

23

Joint Coal Board

STATEMENTS OF CASH FLOWS

for year ended 30 June 2000

Note Consolidated Parent entity

2000

$'000

1999

$'000

2000

$'000

1999

$'000

Operating activities

Cash received

Premiums received 51 179 46 311 51 179 46 311

Rent received 8 882 7 857 8 882 7 857

Interest received 4 373 7 710 4 366 7 704

Dividends received 1 038 832 1 038 832

Other investment income 6 479 9 230 6 479 9 230

Joint Coal Board Health and Safety Trust 130 60 130 60

Other operating receipts 1 460 1 516 1 459 1 514

Total cash received 73 541 73 516 73 533 73 508

Cash used

Claims paid 72 859 73 065 72 846 73114

Reinsurance paid 192 192 192 192

Other underwriting expenses paid 591 519 591 519

Joint Coal Board Health and Safety Trust - - ~ -

Interest paid - - - -

Miners' pension fund payments 4 745 5 021 4 745 5 021

Other operating payments 12 785 12 394 12 789 12 346

Total cash used 91 172 91 191 91 163 91 192

Net cash used by operating activities 31 (17 631) (17 675) (17 630) (17 684)

Investing activities

Cash received

Proceeds from sale of fixed interest securities 32 088 88 433 32 088 88 433

Proceeds from maturity of fixed interest securities 477 484 477 484

Proceeds from sale of property 726 - 726 -

Proceeds from sale of shares 34 890 49 525 34 890 49 525

Proceeds from sale of plant and equipment 612 592 612 592

Total cash received 68 793 139 034 68 793 139 034

Cash used

Payments for fixed interest securities 10717 94 068 10717 94 068

Payments for property 271 839 271 839

Payments for shares 32 454 50 362 32 454 50 362

Payments for plant and equipment 803 823 803 823

Total cash used 44 245 146 092 44 245 146 092

Net cash provided (used) by investing activities 24 548 (7 058) 24 548 (7 058)

Net increase (decrease) in cash held 6917 (24 733) 6918 (24 741)

Cash at beginning of reporting period 2 436 27 169 2 433 27 174

Cash at end of reporting period 7 9 353 2 436 9 351 2 433

The above statements of cash flows should be read in conjunction with the accompanying notes. 27

Joint Coal Board

SCHEDULE OF COMMITMENTS

as at 30 June 2000

Consolidated

2000 1999

$'000 $'000

Parent entity

2000 1999

$'000 $'000

Capital commitments

Plant and equipment 17 - 17

Other commitments

Operating leases in respect of buildings:

One year or less 402 510 402 510

From one to two years 379 129 379 129

From two to five years 853 - 853 -

1 634 639 1 634 639

All commitments in the current year are GST inclusive where relevant. The comparatives have not been adjusted to reflect

the GST.

Joint Coal Board

SCHEDULE OF CONTINGENCIES

as at 30 June 2000

As at balance date there were no contingent liabilities.

The above schedules of commitments and contingencies should be read in conjunction with the accompanying notes.

28

Note 1 Summary of Significant Accounting Policies

(a) Basis of preparation

The financial statements are a general purpose financial report and have been prepared in accordance with Schedule 2 to

Orders issued by the Finance Minister under the Commonwealth Authorities and Companies Act 1997.

The financial statements have been prepared in accordance with Australian Accounting Standards, other authoritative

pronouncements of the Accounting Standards Board (Accounting Guidance Releases) and the Consensus Views of the

Urgent Issues Group, and having regard to Statements of Accounting Concepts.

The financial statements have been prepared on an accrual basis and are in accordance with historical cost convention,

except where otherwise stated.

Accounting policies adopted are consistent with those of the previous years.

(b) Principles of consolidation

The consolidated financial statements are those of the economic entity comprising the Joint Coal Board (the parent entity) and

Coal Mines Insurance Pty Limited, a controlled entity.

The effects of all transactions between entities in the economic entity are eliminated in full.

(c) Premium revenue

Workers compensation insurance policies are written by the parent entity on an annual basis. Premium revenue is recognised

by the parent entity as soon as the amount can be reliably measured. This predominately occurs each month, as policyholders

make their monthly installment payments. These installments are calculated at the appropriate premium rate on the wages

actually paid during the preceding calendar month.

The earned portion of premiums received and receivable is recognised as revenue. Any unearned premiums are determined

by apportioning the premiums received during the year on a daily pro-rata basis.

(d) Outwards reinsurance

Premium paid to reinsurers is recognised as an expense in accordance with the pattern of reinsurance service received.

(e) Claims

The liability for outstanding claims covers claims reported but not yet paid, claims incurred but not yet reported (IBNR) and

the anticipated direct and indirect costs of settling those claims.

Claims outstanding are assessed on the basis of statutory obligations and accident pay agreements. Long term claims,

temporary claims, legal expenses, lump sum payments under sections 66 and 67 of the Workers Compensation Act, medical

only expenses and IBNR have been assessed on an actuarial basis. Common law and other provisions are valued by case

estimate.

The liability for outstanding claims is measured as the present value of the expected future payments reflecting the fact that all

the claims will be paid out in the immediate future. These payments are estimated on the basis of the expected ultimate cost

of settling claims, which is affected by factors arising during the period to settlement. The expected future payments are

discounted to present value at the balance date using long term, market-determined, risk-adjusted inflation and discount rates.

Details of inflation and discount rates adopted are included in note 18.

(f) Income tax

The operations of the Joint Coal Board are not subject to income tax.

The operations of Coal Mines Insurance Pty Limited are subject to income tax, where those operations are conducted as

principal and not as delegate of the Joint Coal Board. Tax effect accounting procedures are followed whereby the income tax

expense in the profit and loss statement is matched with the accounting profit (after allowing for permanent differences).

Income tax on net cumulative timing differences is set aside to the deferred income tax and future income tax benefit

accounts at the rates which are expected to apply when those timing differences reverse. The future tax benefit relating to

tax losses is not carried forward as an asset unless the benefit can be regarded as being virtually certain of realisation. This

benefit will only be obtained if:

(i) the taxable entity derives future assessable income of a nature and of an amount sufficient to enable the benefit from the

deductions for the losses to be realised;

(ii) the taxable entity continues to comply with the conditions for deductibility imposed by tax legislation; and

(iii) no changes in tax legislation adversely affect the taxable entity in realising the benefit from the deductions for the losses.

(g) Depreciation of plant and equipment

Items of plant and equipment at cost are depreciated at rates based upon their expected economic lives. The minimum limit

for the capitalisation of expenditure is $ 1 000.

(h) Maintenance and repairs

Maintenance and repair costs are charged as expenses.

(i) investments and investment income

Investments are taken up in the financial statements at net market value at balance date. Investments include all land and

buildings owned by the Board.

Changes in the net market values of investments at the balance date from their net market values at the previous balance date

(or cost of acquisition, if acquired during the financial year) are recognised as revenue or expense in the profit and loss

statement.

Net market values are determined as follows:

Land and buildings - by Board officers based on assessments provided by independent registered valuers

Fixed interest securities - by reference to market quotations

Australian shares - by reference to market quotations

Equity trust units - by reference to unit redemption prices

Property trust units - by reference to market quotations

Gunnedah rail loop and loader - by Board officers based on expected future income

Where material, estimated costs of realisation are deducted.

Investment revenue is brought to account on an accruals basis. Dividends on quoted shares are deemed to accrue on the

date the shares are quoted ex-dividend.

30

(j) Cash

For purposes of the statement of cash flows, cash includes deposits at call which are readily convertible to cash on hand and

which are used in the cash management function on a day-to-day basis, net of outstanding bank overdrafts.

(k) Operating Leases

Operating lease payments are charged to the profit and loss statement in the periods in which they are incurred, as this

represents the pattern of benefits derived from the leased assets.

(l ) Employee entitlements

(i) Annual and long service leave

A liability for annual and long service leave is recognised and measured in respect of services provided by employees up to

balance date.

The liability for annual leave is measured at its nominal value and is expected to be settled within twelve months.

The liability for long service leave is measured as the present value of estimated future cash outflows. In estimating future

payments, regard is had to expected future salary levels and experience of employee departures and periods of service.

The expected future payments are discounted to present value at the balance date using a discount rate of 7%.

(ii) Superannuation

A liability or an asset in respect of defined benefit superannuation is recognised and measured based on an assessment made

by the NSW Government Actuary for schemes administered by the SAS Trustee Corporation. These schemes include State

Superannuation Scheme, State Authorities Superannuation Scheme and State Authorities Non Contributory Superannuation

Scheme.

(m) Comparative Figures

Figures for the last financial year, where appropriate, have been reclassified so as to be comparable with the figures

presented for the current financial year.

(n) Rounding

Figures have been rounded to the nearest $1000 with the following exceptions:

- remuneration of Board members

- remuneration of executives

- remuneration of auditors

and where included as part of the narrative of a note.

The symbol has been used for amounts greater than zero and less than $500.

31

Consolidated Parent entity

2000 1999 2000 1999

$'000 $'000 $'000 $'000

Note 2

Operating Revenues

(a) Premiums

Premium income

(b) Investment income

Dividends

Equity and Property trust distributions

Fixed Interest trust distributions

Interest - shortterm investments

Interest - long term investments

Interest - other

Rental income

Changes in net market value of investments:

Fixed interest investments

Property

Australian listed shares and equity trust units

Property trust units

Realised profits:

Fixed interest investments

Property

Australian listed shares and equity trust units

Property trust units

Other investment income

(c) Net gains from sales of assets

Profit arising from disposal of non-current assets

(d) Transfers from provisions

Reduction in provision for superannuation benefits

Reduction in provision for doubtful debts

(e) Other income

Other

Total operating revenues

51 958 45 923 51 958 45 923

1 103 873 1 103 873

8 400 5 873 8 400 5 873

3 175 2010 3 175 2010

317 1 269 310 1 264

3 975 4 809 3 975 4 809

33 50 33 50

8 766 8 392 8 766 8 392

(1 047) (2 925) (1 047) (2 925)

1 103 (262) 1 103 (262)

13214 12 605 13 214 12 605

338 (842) 338 (842)

(296) (430) (296) (430)

44 - 44 -

(300) (4 145) (300) (4 145)

683 608 683 608

21 20 21 20

39 529 27 905 39 522 27 900

2 477 276 2 477 276

25 - 25 -

2 502 276 2 502 276

1 255 1 553 1 260 1 556

95 244 75 657 95 242 75 655

32

Consolidated Parent entity

Note 3 Operating Expenses (a) Claims expense

Payments on claims

Movement in provision

(b) Employees expense

Salaries and wages

Annual leave/long service leave provision

Superannuation and staff related costs

(c) Depreciation and amortisation

Depreciation of plant and equipment

(d) Net losses from sales of assets

Loss arising from disposal of non-current assets

(e) Transfers to provisions

Provision for doubtful debts

If) Other

Rental expense relating to operating leases

Cleaning and other property costs

Welfare expenditure - direct

Investment property operating and management expenses

Auditors' fees for audit of accounts

Other underwriting expenses

Miners' pensions expense under Joint Coal Board indemnity

Bad debts expense

Other expenses

Total operating expenses

2000 1999 2000 1999

$'000 $'000 $'000 $'000

72 614 73 031 72 600 73 081

12 696 10 742 12 708 10 722

85 310 83 773 85 308 83 803

5 047 5 282 5 047 5 282

586 610 586 610

709 1 000 709 1 000

6 342 6 892 6 342 6 892

364 360 364 360

8 75 8 75

151 151

436 386 436 386

174 157 174 157

197 195 197 195

2184 1 660 2 184 1 660

67 60 66 58

826 753 826 753

1 417 1 339 1 417 1 339

149 1 149 1

2 801 2 745 2 800 2 744

8 251 7 296 8 249 7 293

100 275 98 547 100 271 98 574

33 «

Consolidated

Note 4 Operating Loss (a) Operating loss before abnormal item and income tax

Premium revenue

Reinsurance premium expense

Claims expense (excluding claims discount expense)

Acquisition costs

Claims management expense

Other underwriting expense

Underwriting result

Investment revenue

Claims discount expense

Miners' pension expense

Sundry income

General and administration expenses

Operating loss before abnormal item & income tax

(b) Abnormal Item

Increase in claims expense arising from A New Tax System

and Goods and Services Tax

Note 5 Claims Expense Payments on claims

Movement in provision

Claims expense (including claims discount expense)

Claims discount expense

Claims expense (excluding claims discount expense)

Parent entity

2000 1999 2000 1999

$'000 $'000 $'000 $'000

51 958 45 923 51 958 45 923

192 194 192 194

51 766 45 729 51 766 45 729

56 716 61 353 56 714 61 383

20 20 20 20

3 108 4 689 3 108 4 689

634 559 634 559

60 478 66 621 60 476 66 651

(8 712) (20 892) (8 710) (20 922)

39 529 27 905 39 522 27 900

(28 594) (22 420) (28 594) (22 420)

(1 417) (1 339) (1 417) (1 339)

3 757 1 830 3 762 1 833

(9 594) (7 974) (9 592) (7 971)

(5 031) (22 890) (5 029) (22 919)

2 616 3218 2 616 3 218

2 616 3 218 2616 3 218

72 614 73 031 72 600 73 081

12 696 10 742 12 708 10 722

85 310 83 773 85 308 83 803

(28 594) (22 420) (28 594) (22 420)

56 716 61 353 56 714 61 383

The claims discount expense represents that portion of the increase in the liability for outstanding claims arising during the

year from the passage of time as the claim payments discounted in the prior year come closer to settlement.

Consolidated Parent entity

2000 1999 2000 1999

$'000 $'000 $'000 $'000

Note 7 Current Assets - Cash Cash 1 305 848 1 303 845

Deposits at call 7 051 1 000 7 051 1 000

8 356 1 848 8 354 1 845

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 8 356 1 848 8 354 1 845

Add: Deposit with investment managers (Note 9) 997 588 997 588

Balances per statements of cash flows 9 353 2 436 9 351 2 433

The parent entity has a bank overdraft facility of $600 000 which was unused as at 30 June 2000.

Note 8 Current Assets - Receivables Trade debtors 750 606 750 605

Other debtors 502 221 508 221

1 252 827 1 258 826

Less: provision for doubtful debts 127 151 127 151

1 125 676 1 131 675

Accrued income

Interest and rent 730 841 730 841

Dividends 419 433 419 433

Premiums 4 410 3 770 4 410 3 770

Other 19 78 19 78

6 703 5 798 6 709 5 797

36

2000

$'000

1999

$'000

Note 9 Current Assets - Investments (Consolidated and parent entity) Loan 1 017 -

Australian bond trust units 48 199 48 917

Australian listed shares 41 690 30 944

Australian equity trust units 56 681 59 054

Overseas equity trust units 32 176 22 325

Property trust units 10 026 14 246

Deposit with investment managers 997 588

Mortgage bonds 84 154

Gunnedah rail loop and loader - long term lease 162 295

Note 10 Current Assets - Other (Consolidated and parent entity)

191 032 176 523

Deposits paid ~ ~

Prepayments 218 203

218 203

37

Consolidated Parent entity

2000 1999 2000 1999

Note 17

Non-Current Liabilities - Provisions

$'000 $'000 $'000 $'000

Outstanding claims 214 474 201 673 214 444 201 619

Miners' pension fund - indemnity 21 999 24 827 21 999 24 827

Employee entitlements 944 2015 944 2015

Common user facility - deferred maintenance 115 124 115 124

237 532 228 639 237 502 228 585

Note 18 Outstanding Claims (a) Expected future claims payments (undiscounted) 413 714 421 431 413 649 421 362

Discount to present value (136 714) (159 744) (136 705) (159 743)

Liability for outstanding claims 277 000 261 687 276 944 261 619

Current 62 526 60 014 62 500 60 000

Non-current 214 474 201 673 214 444 201 619

277 000 261 687 276 944 261 619

(b) The following average inflation rates and discount rates were used in the measurement of outstanding claims:

2000 1999 2000 1999

For the succeeding year

Inflation rate - normal 3.5% 3% 3.5% 3%

Inflation rate - superimposed 3.5% - 3.5% -

Discount rate 7% 7% 7% 7%

For subsequent years

Inflation rate - normal 3.5% 3% 3.5% 3%

Inflation rate - superimposed 3.5% - 3.5% -

Discount rate 7% 7% 7% 7%

(c) The weighted average expected term to settlement of the outstanding claims from the balance date is estimated to be

4.4 years (1999 4.5 years).

40

Note 19 Net Claims Incurred (Consolidated) Current year claims relate to risks borne in the current financial year.

Prior year claims relate to a reassessment of the risks borne in all previous financial years.

2000 1999

$'000 $'000

Current Year

Prior Years

Total Current

Year

Prior Years

Total

Gross claims incurred and

related expenses

Reinsurance and other

recoveries

Gross claims net of

reinsurance and

68 499 19 660 88159 78 239 34 994 113 233

recoveries 68 499 19 660 88159 78 239 34 994 113 233

Discount on gross

claims incurred

Discount associated with

reinsurance and

other recoveries

14 623 (11 774) 2 849 22 219 7 241 29 460

Net discount movement 14 623 (11 774) 2 849 22 219 7 241 29 460

53 876 31 434 85 310 56 020 27 753 83 773

41

2000 1999

$'000 $'000

Note 24 Welfare Expenditure (Consolidated and parent entity)

During the year the Board made the following payments from welfare funds:

Welfare grants 128 126

Funeral benefits 69 69

Administrative expenditure 10 10

207 205

The financial status of welfare funds at year end reconciles as follows:

Funds available at beginning of year 2 558 2 570

Welfare expense (207) (205)

Allocated investment revenue 282 193

Funds available at end of year 2 633 2 558

The above balance of $2 633 000 (1999 - $2 558 000) is included in the equity component for other services (refer Note 23).

Consolidated Parent entity

2000 1999 2000 1999

$ $ $ $

Note 25 Remuneration of Auditors Amounts received, or due and receivable by the auditors

for auditing the accounts of the Joint Coal Board and

Coal Mines Insurance Pty Limited 67 383 60 000 66 000 58 000

67 383 60 000 66 000 58 000

45

2000 1999

$ $

Note 26 Remuneration of Board Members (Consolidated and parent entity)

Remuneration received or due and receivable from the organisation 272 538 268 187

The number of Board Members included in these figures are shown

below in their relevant remuneration bands:

Remuneration between:

$20 000 and $29 999

$30 000 and $39 999

Number Number

- 1

1 -

$50 000 and $59 999

$180 000 and $189 999

1 1

1 1

The above remuneration amounts include $82 092 (1999 $83 987) relating to payments made to a superannuation scheme in

connection with the retirement of Board Members.

2000 1999

Note 27 Remuneration of Executives (Consolidated and parent entity)

$ $

Remuneration received or due and receivable by executives who earn

$100 000 or more in a total remuneration package in connection with

the management of the organisation 475 702 364 993

The number of executives included in these figures are shown below

in their relevant remuneration bands:

Remuneration between:

$100 000 and $109 999

$110 000 and $119 999

Number Number

1 1

1 -

$120 000 and $129 999

$130 000 and $139 999

1 2

1 -

The above remuneration amounts include $ 49 464 (1999 - $50 302) relating to payments made to a superannuation scheme in

connection with the retirement of executives. The amount for 2000 also includes termination payments to one executive

totalling $73 350.

The Chairman of the Board, who is also the Chief Executive Officer, has not been included here, but is included at Note 26.

46

Note 28 Related Parties (Consolidated and parent entity)

Board Members

The names of the persons who were Board Members at any time during the financial year were as follows:

I L Farrar (Chairman); R J Ruston; R P Land.

Each member, acting as a nominee of the Joint Coal Board, held a $ 1 ordinary share in Coal Mines Insurance Pty Limited at 30

June 2000.

IL Farrar and RP Land were trustees of the Joint Coal Board Health and Safety Trust. The Trust is independent of the entity.

All transactions with the Trust are shown in the cash flow statement.

(a) Remuneration

The aggregate remuneration (including superannuation payments) of Board Members is disclosed at Note 26.

(b) Transactions with Board Member related entities

(i) Income transactions

R P Land is a director of United Mining Pty Ltd. During the year Joint Coal Board provided Workers Compensation

insurance services to United Mining Pty Ltd. All transactions were conducted under normal commercial terms and

conditions.

R P Land is a director of Coalsuper Services Pty Ltd. During the year Joint Coal Board provided office space for rental to

Coalsuper Services Pty Ltd. All transactions were conducted under normal commercial terms and conditions.

R J Ruston was a director of Liddell Coal Operations Pty Limited for part of the year. During the year Joint Coal Board

provided Workers Compensation insurance services to Liddell Coal Operations Pty Limited. All transactions were

conducted under normal commercial terms and conditions.

Aggregate amounts of each of the above income transactions with director and

their director related entities are

Premium Income

Rental Income

(ii) Other transactions

R P Land is a director of Coalsuper Pty Ltd.

The parent entity has indemnified Coalsuper Pty Ltd for its liability to pre-1978 pensioners in the Statutory Fund.

Details of the indemnity are disclosed at Note 20.

Controlled entity

All claims on policies issued by the controlled entity are managed by staff of the parent entity.

Other Related Parties

The parent entity holds a nominee directorship in Mount Thorley Coal Loading Limited.

The parent entity has made a loan to Mount Thorley Coal Loading Limited which is secured by a bank guarantee. As at 30

June the amount outstanding on the loan was $1 010 000. During the year, the parent entity received $87 112 interest on this

loan.

2000 1999

$'000 $'000

1 590 1 871

119 99

47

Consolidated

2000 1999

__________________________________________________________ $Ό00_______ WOO

Note 31 Reconciliation of Operating Loss after Income Tax with Net Cash Flow from Operations

Parent entity

2000 1999

$'000 $'000

Operating loss after income tax

Depreciation and amortisation

(Profits) losses on realisation of investments

Unrealised profits on investments

Net loss on sale of plant and equipment

(Decrease) increase in provision for doubtful debts

Bad debts written off

Increase in trade debtors

Decrease (increase) in other receivables

(Increase) decrease in accrued income

Increase in prepayments and deposits

Decrease (increase) in trade creditors

Increase in accrued expenses

Increase (decrease) in other operating liabilities

Increase in claims provision

Decrease in other provisions

Net cash outflow from operating activities

(7 647) (26 108) (7 645) (26 137)

364 360 364 360

(132) 3 967 (132) 3 967

(13 608) (8 576) (13 608) (8 576)

8 75 8 75

(25) 149 (25) 149

149 1 149 1

(293) (300) (294) (299)

115 (173) 109 (167)

(5 637) 3 241 (5 637) 3 241

(1 196) (119) (1 196) (119)

(368) 81 (398) 111

17 156 41 156

247 (183) 247 (181)

15312 13 961 15 324 13 940

(4 937) (4 207) (4 937) (4 207)

(17 631) (17 675) (17 630) (17 686)

Note 32 Subsequent Events

The future of the Joint Coal Board is currently under review by both the federal and state governments with a view to future

activities being undertaken by a new corporate structure owned by the industry.

49

Note 33 Financial Instruments (Consolidated) a) Terms conditions and accounting policies

Financial Instrument Accounting Policies and Methods Nature of underlying instrument

Financial assets

Deposits at call Deposits are recognised at their nominal

amounts. Interest is credited to revenue as it accrues

Temporarily surplus funds are placed in call money market investments awaiting further investment opportunities. Interest is earned on the daily balance and is paid at month end.

Receivables Receivables are recognised at the

nominal amounts due less any provision for bad and doubtful debts.

Credit terms are between 7 and 30 days depending on the nature of the receivable

Equity Loan Equity Loan is valued according to

market quotations

Loan is secured by a letter of credit. Interest payable monthly

Loan Loan is recognised at the principal payable Loan is unsecured. Interest and principal

are payable annually. Final payment is due on 31 December 2000

Government securities Securities issued by Governments and their authorities are valued according to market quotations

These securities are guaranteed by the issuing government and traded in active markets. Interest is payable half-yearly.

Bank Securities Securities issued by Banks are valued

according to market quotations

These securities are traded in active markets. Interest is payable half-yearly.

Mortgage Bonds Securities issued are valued according to market quotations These securities are guaranteed by the New South Wales government and traded

in active markets. Interest and capital repayments are made half-yearly.

Short Term Deposits The deposit is recognised at cost. Interest is accrued as it is earned Surplus funds held in short term deposits maturing in July 2000.

Shares in listed companies

These shares are carried at market value. Movements in these values are recognised in accordance with AAS26 'Financial reporting of general insurance activities'. Dividend income is recognised when declared by the investee.

The shares held are ordinary shares.

Units in listed property trusts These units are carried at market value. Movements in these values are recognised

in accordance with AAS26 'Financial reporting of general insurance activities'. Distribution income is recognised when declared by the trust.

The units held are ordinary units

Managed Funds Units in managed funds are carried at

market value. Movements in these values are recognised in accordance with AAS26 'Financial reporting of general insurance activities'. Distributions are recognised when declared

The units held are ordinary units backed by Australian shares, Overseas shares or Fixed interest securities. Distributions are made quarterly or annually at the discretion of the fund manager.

Financial Liabilities

Trade creditors Creditors and accruals are recognised at

their nominal amounts, being the amounts at which the liabilities will be settled. Liabilities are recognised to the extent that the goods or services have been received (and irrespective of having been invoiced).

Settlement is usually made in accordance with the creditor's trading terms.

50

Indemnity The indemnity is measured as the present Payments are made in monthly installments, value of the expected future payments. Further details are disclosed at note 20.

Joint Coal Board Statement by Board Members

In the opinion of the Board members, the accompanying statements of the Joint Coal Board and of the Group give a true and fair view of the matters required by Schedule 2 to the Finance Minister's Orders made under the Commonwealth Authorities and Companies Act 1997 for the year ended 30 June 2000.

The financial statements of the Joint Coal Board and of the Group are drawn up to show fairly:

- the operating result of the Board and of the Group for the year ended 30 June 2000; - the financial position of the Board and of the Group as at that date; and - the cash flows of the Board and of the Group during the year ended on that date.

At the date of this statement there are reasonable grounds to believe that the Board w ill be able to pay its debts as and when they fall due.

Signed in accordance with a w ritten resolution of the Board.

Ron Land Member

Ian Farrar Chairman

15 September 2000

A A u d rtO ffk e

INDEPENDENT AUDIT REPORT

To the Commonwealth Minister for Industry, Science and Resources ai South Wales Special Minister for State, Minister for Industrial F Assistant Treasurer Assistant Treasi

oncmic entity comprising the Joint Coal the year’s end or from time to time during the year. The statements comprise:

• Statement by Directors;

• Profit and loss statements;

• Balance sheets;

• Statements of cash flows;

• Schedules of Commitments;

• Schedules of Contingencies; and

• Notes to and forming part of the financial statements.

The members of the Board are responsible for the preparation and presentation of the financial statements and the information they contain. I have conducted an independent audit of the financial statements in order to express an opinion on them

The audit has been conducted in accordance with Australian National Audit Office Auditing Standards, which incorporate the Australian Auditing Standards, to provide reasonable assurance as to whether the financial statements are free of material misstatement. Audit procedures included examination, on a test basis, of evidence supporting the amounts and other disclosures in the financial statements, and the evaluation of accounting policies and significant accounting estimates. These procedures have been undertaken to form an opinion whether, in all material respects, the financial statements are presented fairly in accordance with Australian

my understanding of the Joint Coal Board position, the results of their operations and their cash flows.

The audit opinion expressed in this report has been formed on the above basis.

G PO Box 707 C AN BER R A ACT 2601 Centenary House 19 National Circuit Phone (02) 6203 7300 Fax (02) 6203 7777

Audit Opinion

In my opinion.

) the financial statements have been prepared in accordance with the Schedule 2 of the finance Minister's Orders

nee with applicable

Coal Board and the economic entity as at 30 June 2000 operations and their cash flows for the year then ended.

Australian National Audit Office

/ L 2(^ιλ^τχ—r— o L M a ^J Edward Hay Group Executive Director

Delegate of the Auditor-General

15 September 2000

Location of Offices

SYDNEY

Joint Coal Board 21/44 Market St Sydney NSW GPO Box 3842 Sydney NSW 1042

TEL (02) 9291 5666 FAX (02) 9262 6090 EMAIL admin@jcb.org.au

Coal Mines Insurance 21/44 Market St Sydney NSW GPO Box 5319 Sydney NSW 1008 TEL(02)9291 5600

FAX(02) 9262 6107 EMAIL sparsis@jcb.org.au

CORRIMAL

JCB Health Princes Hwy Corrimal NSW P0 Box 42 Corrimal NSW 2518 TEL(02)4222 9000

FAX(02) 4285 4144 EMAIL bond@corrim.jcb.org.au

Coal Mines Insurance Princes Flwy Corrimal NSW P0 Box 212 Corrimal NSW 2518 TEL(02)4222 9030

FAX(02) 4283 7163 EMAIL hardas@corrim.jcb.org.au

WARNERS BAY

JCB Health 472 The Esplanade Warners Bay NSW P0 Box 516 Warners Bay NSW 2282 TEL (02) 4948 3100 FAX(02) 4948 9198 EMAIL croese@warner.jcb.org.au

Coal Mines Insurance 472 The Esplanade Warners Bay NSW PO Box 276 Warners Bay NSW 2282 TEL (02) 4948 3150

FAX (02) 4948 6158 EMAIL meenaghan@warner.jcb.org.au EMAIL evans@warner.jcb.org.au

SINGLETON

JCB Health 1 Civic Ave Singleton NSW PO Box 317 Singleton NSW 2330

TEL (02) 6570 3800 FAX (02) 6572 2667 EMAIL croese@single.jcb.org.au

Coal Mines Insurance 1 Civic Ave Singleton NSW P0 Box 566 Singleton NSW 2330 TEL (02)6570 3830 FAX (02) 6571 1258

EMAIL bezzina@single.jcb.org.au

LITHGOW

JCB Health 52 Eskbank St Lithgow NSW P0 Box 72 Lithgow NSW 2790 TEL (02) 6351 2331

FAX (02) 6352 3170 EMAIL keller@jcb.org.au

CONTACT OFFICER

Kay Jones Manager Finance and Administration

Sydney Office GPO Box 3842 Sydney NSW 1042 TEL (02) 9291 5666 FAX (02) 9262 6090 email: . ,

kayj@jcb.org.au

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

PARLIAMENTARY PAPER No. 363 of 2000 ORDERED TO BE PRINTED

ISSN 0727-4181

linking health with industry