Ann: Appointment of Independent Non-Executive Director, page-23

No, they are not actively managing the funds themselves. They choose the fund managers by the looks of it.

"Performance of the FundWith all the global turmoil and markets at high levels the stronginvestment year was surprising but welcome. The fund return of10.51% was welcome and achieved during a period of transitionas we moved to a more diversified portfolio with less reliance onequities without sacrificing the growth objective. The fundingratio finished the year at 114.5% with the total fund exceeding$1.1 billion. Active management remains the Board’s preferredposition when selecting and reviewing fund managers and thesuccess of this approach is demonstrated by the majority ofour managers again exceeding their benchmarks over the year.

The policy of being a ‘manager of managers’ continued withstaff actively visiting and reviewing manager performance.Investment education is also critical to our management ofthe fund with directors and staff attending relevant investmenttraining, seminars and conferences.Table 1 on the following page shows the rate of return forCoINVEST for the twelve-month period under review, theprevious three years, five years and ten years, compared toAverage Weekly Ordinary Time Earnings for the constructionindustry in Victoria and the CPI.

With net assets of $1.16 billion and assessed long-term liabilitiesof $1.026 million at 30 June 2017, the increase in the long termfunding ratio from 106.4%to 114.5% over the year (allowing forworking subcontractor balances) was pleasing.The structure of the Fund’s asset allocation as at 30 June 2017is shown in table 2.

The table structure reflects the midpoint of a restructure of theportfolio over time to move away from the traditional way ofclassifying assets. This restructure again has been assisted bythe Board’s Asset consultant Willis Towers Watson.

As part of the restructure during the year we sold threeproperties, realised an emerging markets equities investmentand a global credit investment.

We also made new investmentsthe following funds:

• Oakhill – OHA Diversified Credit Fund

• Maple-Brown Abbott Listed Global Infrastructure

• AMP Wholesale Office Fund

• Barwon Healthcare Property FundWe also increased our investment in the Resolution Global ListedProperty Fund.

The full list of managers employed to manage the portfolio asat 30 June 2017 is as follows:

International Equities:

Wellington Global Research Equity

Veritas Asset Management

American Century Global Growth

Australian Equities

Perpetual Concentrated Australian Equities

Hyperion Asset Management

Northcape Capital

Ely Griffiths Group (EGG) (Small Cap Stocks)

"