Public Trustee Annual Report 2013-14
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Public Trustee 211 Victoria Square Adelaide SA 5000 www.publictrustee.sa.gov.au Tel: 08-8226 9200 Fax: 08-8226 9350 ABN: 72-906-921-697 ISSN: 1441-2799 (Print) ISSN: 1836-263X (Online)
Public Trustee Annual Report 2013–14
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TO: The Attorney-General cc. Rick Persse, Chief Executive, Attorney-General’s Department FROM: Debra Contala, Public Trustee
SUBJECT: Annual Report 2013–14
Pursuant to Section 51 of the Public Trustee Act 1995, I present the Annual Report on the operations of Public Trustee and the financial outcome for the year 2013–14. The report is provided to you in Parliamentary document format, suitable for presentation before both Houses of Parliament and also electronically. Once approved in Parliament, the report will be uploaded on Public Trustee‘s website in both a print-friendly format and in compliance with website disability access standards. Public Trustee will print and forward copies of the Parliamentary format version upon request to members of the South Australian community and others who do not have internet access. Pursuant to clause 31 (1) of the Public Trustee Act 1995, the Common Funds annual financial report, as contained within the Public Trustee Annual Report, will be distributed to investors by 31 October 2014. Original signed 30 September 2014 Debra Contala Public Trustee 30 September 2014
MINUTES forming enclosure to: PTCR14/074
Public Trustee Annual Report 2013–14
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Table of contents Our Commitment to South Australia ...................................................................................... 7 Relationship to the AGD Strategic Directions ........................................................................ 8 The Year in Review ............................................................................................................... 9 Our Performance Highlights .................................................................................................11 Our Corporate Governance ..................................................................................................17
Governance ......................................................................................................................17 Boards and Committees ...................................................................................................19
Service to Customers ...........................................................................................................23 2014 Customer Satisfaction Survey ..................................................................................23 Responding to Customer Feedback .................................................................................24 Preparing Wills and Powers of Attorney Documents .........................................................24 Deceased Estate Administration – Distributable Estate Services ......................................26 Deceased Estate Administration – Unclaimed Estates .....................................................27 Deceased Estate Administration – Trust Services ............................................................27 Personal Estates ..............................................................................................................28 Monitoring Private Administrators and Managers .............................................................29 Taxation Services .............................................................................................................31 Real Estate and Property Management ............................................................................31
Marketing Our Services ........................................................................................................33 Media Marketing Campaign 2014 .....................................................................................33 Marketing, Public Relations and Community Engagement ................................................33
Business Improvement .........................................................................................................35 Our People ...........................................................................................................................39
Organisational Structure ...............................................................................................39 Executive Team ............................................................................................................40 Executive Performance Appraisal .................................................................................41 Executive Remuneration ...............................................................................................41 Work Health and Safety ................................................................................................41 Supporting People with a Disability ...............................................................................42 Equal Opportunity and Fairness ...................................................................................42 Whistleblowers Protection Act 1993 ..............................................................................42 Staff Development and Training....................................................................................43 Human Resources Statistical Tables 2013-14 ..............................................................44
Organisational Support .........................................................................................................49 Corporate and Financial Services .....................................................................................49
Corporate Finance ........................................................................................................49 Consultancies ...............................................................................................................49 Employees’ Overseas Travel ........................................................................................49 Contracts exceeding $4 million .....................................................................................49 Environmental Impact and Energy Efficiency ................................................................49 Public Sector Fraud ......................................................................................................50 Account Payment Performance ....................................................................................50 Freedom of Information ................................................................................................50 Information Privacy Principles .......................................................................................51 Information and Communications Technology (ICT) .....................................................51
Client Financial Services Branch ......................................................................................52 Investment Services .........................................................................................................53
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Financial Performance..........................................................................................................55
Corporate Financial Overview 2013–14 ............................................................................55 Customer Investment Performance ..................................................................................57
Investment Overview ....................................................................................................57 2013–14 Asset Allocation .............................................................................................59 Manager of Funds ........................................................................................................60 Peer Group Comparisons .............................................................................................60
Corporate and Client Financial Information...........................................................................61 Officers’ Certification of the Financial Statements .............................................................61 Independent Audit Report .................................................................................................62 Public Trustee Corporate Financial Statements ................................................................64 Statement of Trusts being administered ...........................................................................87
Common Funds Financial Statements 2013–14 ...................................................................91 Appendix 1 Common Funds Statutory Information ............................................................. 131
The nature and amount of Common Fund fees. .......................................................... 131 Indirect Cost Ratios .................................................................................................... 131 Classes of investment in which Common Funds may invest ....................................... 134
Public Trustee Annual Report 2013–14
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Our Commitment to South Australia ‘The Public Trustee’ is a statutory officer pursuant to the Public Trustee Act 1995. ‘Public Trustee’ is a body corporate and has the powers of a natural person. Public Trustee is also a separate agency within the broader departmental organisation of the Attorney-General’s Department (AGD) and reports in the context of the Strategic Plan of the AGD. Our Vision To be seen as the people’s trustee of choice by customers, stakeholders and the public. Our Mission To provide South Australians with expert trustee services that offer security and peace of mind about financial and investment services, and their assets and affairs. Our Services Our services include a range of estate planning, administration and trustee services, Will making, estate administration, Enduring Power of Attorney, personal estate administration, taxation and funds management services. Our Customers and Stakeholders Customers and beneficiaries whose financial affairs we manage; Family members, carers, liaison persons and health professionals involved with
customers under our management; Guardians of customers; Private financial administrators and managers; Courts, tribunals and regulatory agencies; Peak disability, mental health and aged care advocacy groups; The Attorney-General and the Treasurer on behalf of the South Australian
Government; and Staff of Public Trustee.
Our Principles and Values for 2013–14 Public Trustee is committed to these values: We treat all our customers with dignity and respect; We care about our customers and administer their financial and legal affairs
courteously, promptly and professionally; We encourage feedback and act on it promptly, be it complaint or compliment; and We always act in the best interests of our customers.
Our Strategic Objectives for 2013–14 Achieve recognition for the provision of respectful, timely and expert services to all
customers; Encourage South Australians to have a valid Will; Grow our business through an increase in the number of South Australians who
choose to use our services; Manage our business well; and Invest in our people and create a rewarding place to work.
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Relationship to the AGD Strategic Directions Public Trustee aligns its business objectives and customer-focused services with the AGD Strategic Directions and with South Australia’s Strategic Plan. A particular focus is protecting and supporting vulnerable people by providing financial administration for those who are unable, through age or disability, to manage their own affairs. Public Trustee supports the AGD in achieving the following strategies: Strategic Goal 2 – To champion fair and transparent access to justice Strategy 2.1: Eliminate unnecessary delays in the justice system Strategy 2.4: Provide for the quick and efficient resolution of civil and administrative
disputes Strategic Goal 3 – To protect people’s rights and promote public confidence in our
institutions and services Strategy 3.2: Advocate for and protect the rights of people experiencing vulnerability Strategy 3.3: Educate and inform people about their rights and responsibilities Strategy 3.4: Support cultural diversity and promote equal opportunity Strategic Goal 4 - To be a high-performing organisation Strategy 4.1: Use technology to make it easier for people to do business with the
department Strategy 4.3: Live our core behaviours Strategy 4.4: Value staff diversity and invest in development and leadership opportunities Strategy 4.5: Set the scene for a productive and rewarding workplace
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The Year in Review In 2013–14 our focus in Public Trustee was again one of service improvement. During the year, we implemented a new investment planning tool which makes it easier for Public Trustee staff to budget and plan investments for customers. The new tool provides a number of significant enhancements and takes into account each customer’s personal and financial circumstances to develop the best possible budget and investment plan for them. In the past financial year, Public Trustee also improved arrangements for customers with superannuation. In line with a new national approach to the market, we entered into a contract with AustralianSuper which is one of Australia’s largest industry superannuation funds. The new arrangements have delivered lower costs and more streamlined services for customers. In 2013–14, we also undertook a review of the Estates Services Branch. That work has resulted in a range of improvements and the establishment of an Innovation Action Group. The Group has harnessed improvement ideas from staff and is working on a number of important change projects in the Branch. We surveyed more than 4 700 customers and received more than 1 500 responses this year. Overall, the results were again positive and indicated a high level of satisfaction across all service areas. On average, 86% of our customers would recommend Public Trustee to others. We also received valuable feedback about areas for improvement. This will be incorporated into our strategic plan for 2014–17. We continued to actively promote our services to the community this year with a program of community information, promotions at shopping centres and community events. A marketing campaign, with a ‘change of life circumstance’ message, targeted the 30–49 age range in the first part of 2014. There was a 3.5% increase in the number of new and revised Wills prepared during the financial year. Throughout 2013–14, Public Trustee undertook extensive work to examine options to improve the Information and Communications Technology systems that support our core business. This included an analysis of the feasibility of upgrading our core business systems, compared to replacement. Public Trustee continued work to improve information and data management. This has resulted in a strategy to improve our information standards and protocols. As a result, we have established an informal Data Governance Group and we are in the process of creating a Corporate Data Model. In 2013–14, Public Trustee’s profit, before income tax equivalent payments, was $2.749 million. This was an excellent result in a constrained economic environment. There were strong returns for Public Trustee’s investment strategies for the financial year. Four out of five of Public Trustee’s investment strategies outperformed their benchmarks, and all continue to exceed benchmark over the long term. This financial year returns ranged from 3.11% for cash to 18.31% for equities, net of fees.
Public Trustee Annual Report 2013-14
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In Australia and around the world interest rates remain low, which has been good for global share markets and helped Public Trustee’s more growth-orientated strategies. Over the last 12 months, Public Trustee has worked closely with our investment adviser on a Strategic Asset Allocation (SAA) review, with the aim of improving Public Trustee’s investment portfolio structure. In order to improve expected returns and reduce risk, the two key recommendations of this review were to increase weighting to overseas shares in each of the standard investment strategies, and to introduce unlisted assets (property, infrastructure) to the portfolio. As a result, in October 2013 we implemented a new SAA which increased the weighting to overseas shares within each of the strategies. With excellent returns on overseas shares, this benefited customers in 2013–14. Integral to the delivery of services is Public Trustee’s team of well-trained and skilled staff. In late 2013–14, we undertook a staff climate survey which was completed by 71% of staff. The results showed positive levels of morale, a clear level of satisfaction with customer services and strong confidence in our internal policies and processes. By and large, Public Trustee staff are confident in their ability to assist customers. Staff also suggested improvements in the survey and again these will be valuable in developing our next strategic plan. Training and development continued to be a priority, with a number of Public Trustee staff undertaking formal trust qualifications this year. In the past financial year, we developed a new approach to business improvement in Public Trustee by establishing business process improvement (BPI) teams to develop staff skills in this area. Staff based their improvement projects on current business processes as part of their BPI training program. The Year Ahead In the coming year, Public Trustee will move ahead with a new strategic plan. We have achieved much through our work on the 2011–14 plan and over the past few months have consulted with staff, customers and key stakeholders to develop a new plan for the coming three years. Our focus continues to be improving customer services, business improvements and supporting and developing our people. We plan to refresh our internet site early in 2014–15. With many customers wishing to access information online, we aim to improve the look and feel of our website. In response to customer and staff survey results, we will also continue to improve staff training and internal communication; the Senior Management Group is working on some innovative ideas. As we enter 2014–15, I am proud of the work we have done in the past year and I would like to take the opportunity to thank all the staff of Public Trustee for their continued hard work and support. Original signed 30 September 2014 Debra Contala Public Trustee 30 September 2014
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Our Performance Highlights Achievements against our Strategic Plan 2011–2014 Our Strategic Plan 2011–2014 outlines our vision, values and primary objectives. In 2013–14, we made the following achievements against the plan:
Primary Objective One
Achieve recognition for the provision of respectful, timely and expert services to all customers
Completed the replacement of our investment planning tool through the development of the Customer Investment Tool (CIT)
Implemented improved superannuation arrangements for customers
Began developing a new Strategic Plan for Public Trustee for 2014–17
Undertook a feedback survey of customers, with an overall response rate of 33%. 86% of customers who responded indicated they would recommend Public Trustee to others
Continued our work with our partners in the Alliance for the Prevention of Elder Abuse and presented at the World Elder Abuse Awareness Day (South Australian) Conference
Implemented the Contact and Task Management System (CTMS) in the Trust team
Supported 16 new customers as litigation guardian
Undertook a comprehensive review of the Estate Services Branch
Created a dedicated email address to improve communications with customers living in supported residential facilities
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Primary Objective Two
Encourage South Australians to have a valid Will
Undertook a media marketing campaign including radio and print media
Conducted a ‘Make a Will’ week for staff in the Attorney-General’s Department
Developed a digital promotional display for use in our foyer and other appropriate venues
Undertook promotions at a range of suburban shopping centres
Developed an eNewsletter to improve communications with key stakeholders
Primary Objective Three
Grow our business through an increase in the number of South Australians who choose to use our services
Undertook a range of promotions at relevant events, including a Super SA Open Day
Continued to engage the community through education forums and information sessions including Carers Support SA and at aged care facilities
Reviewed the monitoring of court-appointed financial managers
Held monthly information sessions for newly appointed financial administrators
Achieved an increase in the numbers of Wills written (new and revised)
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Primary Objective Four
Manage our business well
Investment returns for customers exceeded industry benchmarks
Continued to work on upgrading our core ICT systems
Documented key business processes, including regulatory and genealogy services
Significantly improved business continuity plans and tested our ICT disaster recovery processes
Progressed the implementation of the Information Security Management System in line with the State Government’s Information Security Management Framework
Undertook tenders for a range of contracted services
Achieved a profit, before income tax equivalents, of $2.776 million and paid an interim 2013–14 dividend to government of $655 000
Implemented a new Strategy Asset Allocation for investment strategies which, for the first time, includes non-listed assets
Undertook significant work to identify the Community Service Obligations Public Trustee provides
Recruited an additional Information and Communications Technology staff member to strengthen our skills base ahead of the core systems replacement
Finalised a range of internal service-level agreements between branches of Public Trustee to ensure we work seamlessly together to deliver services
Refreshed the membership of the Public Trustee Audit and Risk Management Committee
Approved a new three-year internal audit plan for Public Trustee, developed using a risk management framework
Implemented a range of efficiencies that reduced costs while maintaining customer service levels
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Primary Objective Five
Invest in our people and create a rewarding place to work
Refreshed the intranet to ensure staff are supported with current and easily accessible information
Supported several staff as they worked toward a Certificate IV in Personal Trust Administration through the University of Western Sydney
100% of current staff undertook Performance Development Reviews
Implemented an annual training plan for all staff that included tools such as business writing and conflict resolution
Ensured all relevant staff undertook mandatory training in disability awareness, Public Sector Code of Conduct, information security, Aboriginal cultural awareness and personal security
Conducted an audit of Public Trustee’s workplace security to ensure staff safety
Worked with an independent facilitator on team building
Established an Innovation Action Group in the Estate Services Branch to harness staff energy and ideas
Supported a number of business improvement teams that undertook ’lean thinking’ training and worked on business improvement projects
Developed an online induction program for new Estate Services staff
Continued to develop our future leaders by helping staff participate in the Attorney-General’s Department Frontline Management Certificate and ‘Accelerate’ leadership programs
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Priorities for 2014–15 In line with our new Strategic Plan 2014–17 our priorities for the coming year include:
Objective One – Customer Service Achieve service excellence by delivering services in a professional, consistent, coordinated and timely manner.
Ensure Public Trustee’s Service Standards remain current and effective
Improve our communication with customers
Improve communications and services to Aboriginal customers and those from other cultures
Objective Two – Governance & Leadership
Deliver good governance, strong leadership and sound risk management
Ensure our leaders are empowered to act and work as a team
Build and maintain the confidence of key stakeholders through a program of engagement
Build our internal capabilities in risk management
Ensure our future leaders are well supported to continue their development
Objective Three – Business Improvement
Identify opportunities to improve and enhance all areas of our business processes
Continue to upgrade our ICT systems to ensure they are modern and support our business processes
Simplify business processes to cut red tape
Improve records management to ensure customer information is easy to access
Continue to improve our contract management
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Objective Four – People and Culture
Invest in our people and create a rewarding environment in which to work
Ensure all staff are well inducted and trained
Build our capability to succeed in a major ICT upgrade project
Encourage staff to engage more actively in the communities we serve
Continue to build a culture based on mutual respect, personal accountability and support
Continually improve workplace health and safety
Objective Five – Financial Stability
Ensure the organisation remains profitable and meets agreed fiscal targets
Continually promote Public Trustee services
Develop new business initiatives
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Our Corporate Governance Governance Basis of Authority In performing its duties, the following legislation forms the basis on which Public Trustee services are delivered to customers, and how: Public Trustee Act 1995; Administration and Probate Act 1919; Aged and Infirm Persons’ Property Act 1940; Family Relationships Act 1975; Guardianship and Administration Act 1993; Inheritance (Family Provision) Act 1972; Powers of Attorney and Agency Act 1984; Trustee Act 1936; and Wills Act 1936.
Public Trustee’s Function Under the provisions of Section 5(2) of the Public Trustee Act 1995, Public Trustee may act as a trustee, executor of a Will, administrator of an estate (whether or not of a deceased person), manager, receiver, committee, curator, guardian, next friend, agent, attorney or stakeholder. Under the Legal Practitioners Act 1981, Public Trustee is also able to prepare Wills. Public Trustee is a Public Non-Financial Corporation under the Public Corporations Act 1993. It generates its own income, makes tax-equivalent payments annually, and pays a dividend to the South Australian Government out of its after-tax profits, as agreed by the South Australian Attorney-General and the Treasurer. Public Trustee Charter Under the Public Corporations Act 1993, a Charter must be prepared for a public corporation by its Minister and the Treasurer. The Charter, agreed by the Attorney-General, the Treasurer and the Public Trustee, describes the reporting and accountability requirements and sets out the responsibilities and expectations of both Public Trustee and the government. The Charter is reviewed annually. The Charter also requires an agreed Annual Performance Statement that outlines Public Trustee’s objectives for invested customer funds, and financial and other performance targets. Responsibility ‘The Public Trustee’ is a statutory officer pursuant to the Public Trustee Act 1995. ‘Public Trustee’ is a body corporate and has the powers of a natural person. Public Trustee is also a separate agency within the broader departmental organisation of the AGD and reports in the context of the Strategic Plan of the AGD.
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The Public Trustee has the full responsibilities of a trustee, in accordance with the Public Trustee Act 1995, in carrying out the roles and functions of the office. The Public Trustee is responsible for the strategic direction of the office and the management of service delivery. Risk Management Public Trustee has a risk management framework that assists with the management of strategic and business risk. This occurs through stringent risk assessment by senior management and the adoption of controls to manage identified risk. The framework covers reviews of all of Public Trustee’s investment, financial, operational and administrative responsibilities, at both customer and corporate level. Supporting this framework is an extensive system of control self-assessment. The system requires managers to report six-monthly to Public Trustee's Audit and Risk Management Committee on individual branch compliance with internal controls, instances of failure to comply and proposed corrective action. The process is comprehensive, ensuring each control is assessed in terms of its design and its effectiveness in managing that particular risk. The cycle of ongoing risk assessment helps in the development of Public Trustee’s annual internal audit plan. Public Trustee is a member of the Financial Services Council (FSC). The Council represents organisations undertaking funds management, superannuation, life insurance, financial advice, trustee and public trustee services, and has more than 130 members. External Audit The Auditor-General audits the operations and finances of Public Trustee annually. The Audit and Risk Management Committee receives and reviews all the Auditor-General’s findings, plus management’s response and the corrective actions taken. Internal Audit The Audit and Risk Management Committee oversees the preparation of an annual internal audit work plan. Public Trustee has engaged an external firm to undertake internal audits, consistent with an approved work plan. All internal audit reports and management responses are presented to this committee for consideration. Indemnity of Staff Pursuant to Section 49 of the Public Trustee Act 1995, any liability incurred by Public Trustee may be enforced against the Crown. Notwithstanding this, Public Trustee has comprehensive professional indemnity insurance through the South Australian Government Captive Insurance Corporation (SAICORP), covering all Public Trustee staff in the performance of their required duties.
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Boards and Committees Investment Advisory Committee The Investment Advisory Committee (IAC) ensures we maintain a sound and efficient system of customer investment. Chaired by the Public Trustee, the committee meets quarterly to provide appropriate advice, review the performance of Public Trustee’s investments, and make recommendations on investment matters. Public Trustee’s Investment Guidelines and Procedures clearly define the approved investment processes for internally managed portfolios, sub-portfolio allocation, asset allocation for Standard Investment Strategies (SIS) and the process for engaging external fund managers. The guidelines are regularly reviewed by the committee. Public Trustee engages an expert investment adviser to help the organisation to: Review the appropriateness of strategic asset allocation for all Public Trustee Standard
Investment Strategies; Provide portfolio structuring advice; Select fund managers and monitor their performance, and provide ongoing research into
new managers; Provide quarterly reporting, ad hoc special reports, and dynamic asset allocation advice; Attend meetings of the committee and provide advice associated with Public Trustee
investment activity to that committee and senior management; and Provide other specialist advice.
Members of the committee during 2013–14 were: Debra Contala, the Public Trustee (Chair); Frankie Anderson, General Manager, Customer Services, Public Trustee; Tony Brumfield, General Manager, Business and Client Financial Services, Public
Trustee; Nick Wiseman, Manager, Investment Services, Public Trustee; and Steven Gregor, Manager, Client Financial Services, Public Trustee.
Public Trustee’s expert investment adviser and a representative of the Department of Treasury and Finance attend meetings of the committee. Funds Management Forum A subset of members of the Investment Advisory Committee, and staff of the Funds Administration team, meet monthly in the Funds Management Forum to: Monitor investment performance of funds under management; Ensure compliance of the funds against Public Trustee’s Investment Guidelines and
procedures; Provide advice to the Public Trustee on systems, accounting, taxation, Customer
Investment Tool and investment issues; and Monitor implementation of actions arising from IAC meetings.
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Corporate Investment Committee The Corporate Investment Committee meets quarterly to review the performance of invested corporate funds and the associated asset allocation strategies. Membership of the committee comprises: Tony Brumfield, General Manager, Business & Client Financial Services (Chair); Debra Contala, the Public Trustee; Nick Wiseman, Manager Investment Services; and Sheila O’Reilly, Manager Corporate Services
The committee provides assurance and assistance to Public Trustee to ensure a sound, efficient and prudent system for the investment of corporate funds. Audit and Risk Management Committee The Audit and Risk Management Committee is responsible for providing independent scrutiny of Public Trustee’s risk, control and compliance framework, and its internal and external accountability responsibilities. The committee has a broad skill base, with an independent Chair, four independent members and one senior member of Public Trustee’s staff. All members are appointed by the Public Trustee following consultation with the Chief Executive, AGD. The committee had a turnover of membership from 1 February 2014. New members are: Virginia Hickey (Chair) - Ms Hickey has legal qualifications and is a fellow of the Institute
of Company Directors. Ms Hickey has extensive experience as a commercial litigation partner of a leading law firm, providing corporate governance advice to boards, and as a board member in a range of industries;
Steve Woolhouse - Mr Woolhouse is a fellow of CPA Australia and has extensive experience in finance roles. Earlier in his career, Mr Woolhouse worked in a financial institution (National Australia Bank) and in the Auditor-General’s Office; and
Tanya Brooks - Ms Brooks has excellent experience in financial accounting, has also had five years’ experience in the Auditor-General’s Department and gives the committee an important link to the Attorney-General’s Department.
Christine Locher and Frankie Anderson were reappointed to the Committee. Peter Whelan, Pamela Martin and Andrew Swanson retired from the Committee on 31 January 2014. The Public Trustee, the General Manager, Business and Client Financial Services, representatives of the Auditor-General, and a representative from the Department of Treasury and Finance also attend committee meetings. As at 30 June 2014, the committee comprised: Virginia Hickey, Director, @ the Board Table (Chair); Tanya Brooks, Principal Accountant, Treasury and Parliamentary Reporting, AGD; Christine Locher, Principal, Solutions@Locher Pty Ltd; Steven Woolhouse, Director, Finance, Corporate Services, Department of the Premier
and Cabinet; and Frankie Anderson, General Manager Customer Services, Public Trustee.
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The committee meets at least five times per year and reports annually to the Public Trustee and the Chief Executive, AGD, on its operations and activities. The report includes: A summary of Public Trustee’s progress in addressing the findings and recommendations
made in internal and external audit reports; An overall assessment of Public Trustee’s risk, control and compliance framework,
including details of any significant emerging risks or legislative changes that may have an impact on Public Trustee; and
The number of meetings held during the relevant period and the number of meetings attended by each member.
During 2013–14 the committee considered a comprehensive review of the organisation’s risk assessments, resulting in the approval of a revised internal audit program. The committee also conducts an annual self-assessment and uses that collective feedback to identify areas where it might improve. Public Trustee Strategic Plan 2014–17 Public Trustee’s previous Strategic Plan covered the period 2011–14. In March 2014 we began developing the next plan, covering 2014–17. As part of this, we reviewed and confirmed the organisation’s direction and priorities for the next three years. The new plan takes account of national issues, trends in business and customer numbers, as well as the views of staff and key stakeholders. The objectives of this plan are reflected in our priorities for 2014–15.
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Service to Customers 2014 Customer Satisfaction Survey In 2014, Public Trustee undertook its fourth customer satisfaction survey. We now survey customers as part of normal business practice. Each May we conduct a telephone survey of a sample of Personal Estates customers and/or their liaison persons, as we’ve found this is the best way to get their feedback. Overall, the 2014 Customer Satisfaction Survey found that satisfaction with services remained high and had improved for our Deceased Estates and Trust customers: The overall response rate was 33%, indicating the results are representative of customer
opinion; For all services, most respondents indicated they were receiving a high level of services; On average, 86% of our customers would recommend Public Trustee to others; and Customers also said that they would like to see clearer communication, more timely
services and process improvements.
Public Trustee staff take pride in the professional services they provide and their contributions have resulted in the generally excellent survey results. The customer feedback was used in the development of the 2014–17 Public Trustee Strategic Plan and the business plan for the year ahead. Full details of the survey results are available on Public Trustee’s website (Publications) at www.publictrustee.sa.gov.au
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Customer Investment Tool (CIT) During 2013–14, Public Trustee developed a new online investment planning tool - the Customer Investment Tool (CIT). This new system assists Public Trustee staff to budget and plan investments for individual customers. CIT is modern a browser-based application. It enables staff to model a number of financial scenarios, including variations to expenses and major purchases, and to account for future monies that may become available. Staff can then discuss various options with the customer, or their carer, to ensure the best customised financial plan is completed. Overall, the new system takes into account each customer’s personal and financial circumstances when developing recommendations about the best investment strategy, and helps staff develop and document each customer’s budget management strategy. Responding to Customer Feedback During the year, Public Trustee continued to monitor and manage compliments and complaints through the database developed specifically for this purpose. At all times we seek opportunities to improve our services through the information provided via customer feedback. Table 1: 2013–14 Complaints Recorded
2013–14 2012–13 Complaints 56 82 In 2013–14, the Contact and Task Management System (CTMS) was extended to the Trusts, Customer Relationship and Wills teams. The CTMS provides on-screen tracking of customer contact and enables recording of all contact with customers. Preparing Will and Power of Attorney Documents The Wills Team provides a free Will and Power of Attorney drafting service for South Australians who nominate Public Trustee as the Executor in their Will or as their Attorney or immediate substitute Attorney. These services are provided from our Adelaide Office, six suburban locations and in 15 regional areas. Wills and Powers of Attorney are complex legal documents which require expertise to ensure they are valid and legally binding. Public Trustee has a team of professional staff well-skilled in drafting these documents. They have an excellent understanding of the property and asset ownership rules and the laws pertaining to Wills and Powers of Attorney. Table 2: 2013–14 Documents Prepared (including during home visits)
2013–14 2012–13 Wills (includes new and revised) 2153 2 080 Enduring Powers of Attorney (includes new and revised) 488 766
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Another important service provided by the Wills Team is the visitation service for infirm customers in hospitals and nursing homes, and those unable to walk or get about freely. This ensures that our customers have access to services which would not otherwise be available to them. Table 3: 2013–14 Documents Prepared during Home Visits (these numbers are included in Table 2, above)
2013–14 2012–13 Number of home visits 182 187 Wills (includes new and revised) 124 110 Enduring Powers of Attorney (includes new and revised) 24 34
Review of the Estate Services Branch During late 2013, Public Trustee undertook a review of the Estate Services Branch, excluding the Wills team. The Review looked at four key areas: Team processes; Case management; Communications; and Quality assurance.
The review finished in January 2014 and provided a number of recommendations to enhance customer service, leadership and team dynamics across the branch. As at 30 June, the majority of the recommendations had been implemented. Further recommendations are being advanced through the Innovation Action Group (IAG), which has been established to harness the energy and ideas of the branch staff. Members of the IAG received appropriate training to assist them with this work. Improved Communication with Customers Living in Supported Residential Facilities Public Trustee had previously received feedback from proprietors of Supported Residential Facilities (SRFs), that both managers and residents were having difficulty contacting individual staff members in Public Trustee. In order to improve customer service, a dedicated email address was created for the SRFs and their Public Trustee customers. This email account is reviewed daily to ensure that contact is made quickly, avoiding ‘phone tag’ and ensuring issues are addressed promptly. Feedback from some residential care staff is that the new process has greatly improved communication and increased customer satisfaction for SRF residents. Public Trustee’s role in reducing the prevalence of Elder Abuse Public Trustee is a member of the Alliance for the Prevention of Elder Abuse (APEA) whose members are key stakeholders in responding to the abuse and exploitation of older people. APEA comprises Public Trustee, the Legal Services Commission of South Australia, the Office of the Public Advocate, South Australia Police and the Aged Rights Advocacy Service. One of APEA’s main roles is to raise community awareness and respond to elder abuse through the promotion of intervention and prevention strategies. Public Trustee contributed to the high-level collaboration between key service providers and relevant state government agencies in the development of the South Australian Strategy for
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Safeguarding Older People 2014–2021. This strategy replaced Our Actions to Prevent the Abuse of Older People 2007 as the overarching whole-of-community and government framework to ensure older people are safeguarded and their rights protected. Key features of the strategy include: a newly developed South Australian Charter of the Rights and Freedoms of Older People
- the first of its kind in Australia; Safeguarding Older People - principles for intervention from a rights-based approach;
and Safeguarding Older People - a continuum model for service providers.
When Public Trustee is appointed as the financial administrator of a person’s affairs, at times we find they have been the victim of financial elder abuse and the effects of the abuse are often difficult to rectify. In June 2014, Public Trustee and the other APEA members held a forum on ’Safeguarding the Rights of Older People’ at the City of Onkaparinga’s Civic Centre. There have since been requests from parties who attended for further APEA presentations to other organisations and consumers dealing with vulnerable older South Australians. Deceased Estate Administration – Distributable Estate Services The Distributable Estates Services team undertakes the administration of deceased estates for people who have died with or without a Will. This involves managing the assets and liabilities of the estate and distributing the balance of the estate to beneficiaries. Staff may work closely with Public Trustee real estate panel agents, valuers and conveyancers during the sale or transfer of real estate. Staff may also need to work with solicitors during the course of the administration. The team is supported by a number of specialist staff, including a probate officer who prepares the appropriate court documents for probate and a genealogy officer who conducts research into beneficiaries (where required). Public Trustee acts independently in carrying out the instructions contained in Wills. Most importantly, staff carry out the deceased person’s wishes with sympathetic concern for their family and beneficiaries. Public Trustee is often selected by beneficiaries as the trustee of choice for estates where a person dies intestate - that is, when a person dies without a Will. Where beneficiaries are not known, however, Public Trustee must assume the role of administrator. In some instances, Public Trustee works closely with the South Australia Police and the Coroner’s Office to coordinate and assist with funeral arrangements and locating next of kin. Public Trustee is also selected as the trustee for many estates when the executor named in the Will renounces or is unable to fulfil their role. Public Trustee may also be appointed by an Order of the Supreme Court. However, the consent of the beneficiaries is obtained before we begin any administration of the estate.
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Table 4: 2013–14 Deceased Estate Administration 2013–14 2012–13
New cases 662 695 Completed estate matters 755 669 Estates currently under administration 1 108 1 201 Grants of probate received for the period 574 617 Informal estates administered 88 78 Deceased Estate Administration – Unclaimed Estates Even after extensive research, sometimes it is not possible to identify or locate some or all of the beneficiaries of an estate. Under these circumstances, the realised assets of the estate are held in an interest-bearing account for a statutory period of six years. After that, the funds must then be paid to the South Australian Department of Treasury and Finance. Where a beneficiary of any unclaimed monies can provide evidence of their entitlement to the funds, these can be reclaimed from the Department of Treasury and Finance. Table 5: 2013–14 Unclaimed Balances*
2013–14 2012–13 Number of unclaimed balances paid to Treasury 16 16 Value of unclaimed balances paid to Treasury $342 883 $598 474 * finalised at 30 June, payment early next period Deceased Estate Administration – Trust Services The Trust team manages court award trusts, trusts established by a Will and trusts under deed for minors. The other major type of trust we administer is a life interest trust, where the nominated beneficiary (the life tenant) receives a benefit during their life or for a specified time. The life tenant may have the right to live in a property or may receive the income from the investment of trust funds. In such cases the capital of the trust is preserved for the ultimate beneficiaries (the remaindermen). Other types of trusts under administration include Perpetual Charitable Trusts, Scholarship Trusts and the Community Foundation of South Australia. Table 6: 2013–14 Public Trustee Trust Activity
Activity 2013–14 2012–13 New trusts 67 83 New court-awarded trusts 40 36 New life interest trusts 29 21 Trust matters finalised 372 134 Trusts on hand at 30 June 1 682 1 918
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Public Trustee also administers trusts for children under the care of the Minister for Communities and Social Inclusion. Table 7: 2013–14 Public Trustee Trusts for Children under the care of the Minister
2013–14 2012–13 Trusts for children under the care of the Minister for Communities and Social Inclusion on hand at 30 June
31 39
Completed trusts for children under the care of the Minister for Communities and Social Inclusion 8 7
Customer Relationships Team The Customer Relationships Team (CRT) is usually the first point of contact for beneficiaries whose relatives and friends’ Wills have nominated Public Trustee as Executor. CRT also gives assistance and information to the relatives or friends of someone who has died without leaving a Will. Staff answer calls from members of the public, the police, South Australian Housing Trust, solicitors and others who have questions about deceased estates and trusts. Often the caller is grieving; the helpful, friendly team uses its knowledge and expertise to give callers guidance and information about deceased estate administration. The team also works closely with other departments, such as the Funeral Assistance Program (Department of Communities and Social Inclusion), the Coroner’s Court and police, to ensure every person receives a dignified funeral, irrespective of the size of their estate. Personal Estates Public Trustee provides services to customers under Administration Orders of the South Australian Guardianship Board, South Australian court orders, and for customers under their activated Enduring Power of Attorney. Public Trustee may also be appointed by a court to act as ‘next friend, litigation guardian’ for some customers unable to conduct their own legal proceedings. Public Trustee can be appointed to be legally responsible for making all, or some, of a person’s financial and legal decisions. Where Public Trustee is appointed to manage a person’s financial affairs, the services provided by staff of the Personal Estates Branch include the payment of accounts such as rates, taxes and utilities, payment of care providers, cleaning, repairs and renovations, as well as the sale and purchase of real estate for customers. Budgeting, investing funds for growth and supporting customers with their lifestyle choices are also part of the work undertaken for customers. The Personal Estates Branch provides services to manage the affairs of those who are vulnerable and therefore may be subject to financial and legal abuse. Public Trustee is an active member of the Alliance for the Prevention of Elder Abuse. We act as quickly as possible in matters involving the suspected financial abuse of customers. Many customers new to Public Trustee were greeted at the Guardianship Board and provided with a Welcome Pack that explains our services and gives an introduction to Public Trustee. Each customer has a communication plan as part of their overall case management, so that we know a customer’s preferred method of contact (e.g. telephone, personal visit or in writing).
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Personal Estate staff caseloads are reviewed regularly to ensure the provision of optimum service to our customers and to support our staff. Staff visited 594 customers during the 2013–14 financial year, providing information and support in a personal way. The National Standards for Financial Managers, developed by the Australian Guardianship and Administration Committee, were implemented during 2013–14. Staff projects included the development of ways to improve property insurance and inspections processes, and also the integrity of our data. A data integrity and improvement project began in 2013–14 to help ensure Public Trustee holds accurate information ahead of the transition to a proposed new system in coming years. Table 8: 2013–14 Personal Estates Matters
Activity 2013–14 2012–13 Total number of personal estates under administration 4005 4010
Number of next friend/litigation guardian matters on hand 56 49
Number of new customers under Guardianship Board orders 361 388
New court-award customers 27 14 Total funds received from new court awards $15.2 m $7.4 m New Power of Attorney customers 44 36 Number of home visits to Personal Estates branch customers 594 881
Court-awarded funds under administration** **$385.9 m $311.2 m No-fee threshold $4 650 $4 550 % of customers under administration from whom no fees were collected 16.2% 16.8%
** Includes $69.9 million of funds that were held in Self-Managed Superannuation Trusts as at 30 June 2013 that were transferred to industry superannuation arrangements during 2013. Monitoring Private Administrators and Managers Public Trustee is required by the Guardianship & Administration Act 1993 to examine and report on the activities of private financial administrators appointed by the Guardianship Board to manage the estates of individuals with mental incapacity. These private administrators of ‘protected’ estates must report annually to Public Trustee. We then examine and report to the Guardianship Board on the annual statements they provide. We may also recommend to the Board that expenditure by the administrator of the protected person’s funds be disallowed, if we are of the view that the administrator did not act in good faith, or with reasonable care, in incurring the expenditure. Public Trustee conducts monthly information sessions for newly appointed private administrators to assist, help and direct them in the discharge of their legislative financial reporting duties. During 2013–14, 115 private financial administrators attended our information sessions. Public Trustee is also required to examine the financial accounts submitted by administrators who have been appointed by the Supreme Court to administer intestacies or estates where an Executor is unwilling or unable to complete an administration.
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We also monitor private managers appointed under the Aged and Infirm Persons’ Property Act 940, pursuant to Supreme Court orders. We receive reports and accounts from estate managers, and report to the court on their content. A regulated fee is charged for the monitoring of private administrators and managers. Public Trustee began improving a number of work practices during 2013–14 and has documented work procedures into process maps in order to strengthen our monitoring role. Table 9: Private Administrators
2013–14 2012–13 Private administrators appointed under the Guardianship and Administration Act 1993 1 207 1 148
Private administrators appointed under the Aged and Infirm Persons’ Property Act 1940 149 136
Alternate executor administrations pursuant to a court order 256 224
Legal Section Public Trustee’s Legal Section is staffed by legal officers outposted from the Crown Solicitor’s Office. It handles a wide range of legal matters involving customers for whom Public Trustee has been appointed financial manager, attorney or litigation guardian. It also handles issues arising from deceased estates administered by Public Trustee or in respect of which Public Trustee has a regulatory role. As well, the section provides support for Public Trustee in conveyancing matters. The section conducts or supervises litigation in a range of South Australian and Federal courts and tribunals. In addition, legal officers draft documents and provide advice in relation to non-litigious matters. They also liaise with lawyers in private practice about a variety of issues. Liaison with external conveyancers is another significant activity undertaken by the Legal Section. As well as its real estate sales and transfers work, before checking and executing final documents, the Legal Section coordinates the preparation of caveats, discharges of caveats, transmission applications, applications to issue a substituted certificate of title, and any other instruments that might be required. Table 10: 2013–14 Legal Section Matters
2013–14 2012–13 New specific files 117 194 Ongoing files from previous year 288 374 Ad hoc advice matters 180 150 Acting as a litigation guardian is an important role performed by Public Trustee. A litigation guardian is a person appointed by a court to represent the interests of a minor, or a person with a disability, who cannot make their own decisions about the appropriate conduct of legal proceedings. As litigation guardian, Public Trustee makes decisions on behalf of the litigant about not just the conduct, but also perhaps ultimately the settlement, of legal proceedings. During 2013–14, Public Trustee acted as litigation guardian for 16 people who had no other dealings with Public Trustee.
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Table 11: 2013–14 Litigation Guardian Appointments 2013–14 2012–13
New litigation guardian customers 16 12 Taxation Services Public Trustee Taxation Services attend to income tax compliance issues for more than 7 700 customers, including deceased estates, trusts, personal estates and other customers wanting assistance with income tax and related matters. Public Trustee Taxation Services prepares income tax returns for deceased customers up to their date of death, deceased estates from date of death to closure of the estate, testamentary trusts, protected persons, Power of Attorney customers and court award customers. We also prepare statutory reports for the Australian Taxation Office and the Australian Charities and Not-for-Profits Commission, assist customers in providing information to Centrelink, coordinate and monitor customer superannuation, and attend to wages, Workcover and superannuation contributions for our customers’ paid carers. Table 12: 2013–14 Annual Taxation Returns
2013–14 2012–13 Taxation returns completed 7 761 7 421 Real Estate and Property Management Real estate is a significant asset in most estates. As at 30 June 2014, Public Trustee was responsible for more than 1000 properties. We undertake regular inspections and maintenance for these properties. Table 13: 2013–14 Properties under Management
2013–14 2012–13 Trust administration properties 170 173 Estate administration properties 235 277 Personal estates properties 606 620 Total properties under management 1 011 1 070 Public Trustee engages real estate agents and licensed valuers who work together to achieve the best results for customers requiring real estate services. Table 14: 2013–14 Property Sales
2013–14 2012–13 Properties sold – deceased estates 151 128 Properties sold – trusts 7 9 Properties sold – personal estates 53 56 Total number of properties sold 211 193 Total sales value** $58 628 996 $53 655 396 Average sales price** $277 863 $278 007 ** Public Trustee may be only a part-owner of some properties sold. These figures represent the gross & average sale figures for the properties (either wholly or partly owned).
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Marketing Our Services Media Marketing Campaign 2014 For six weeks from the beginning of February to the end of March 2014, Public Trustee conducted a media marketing campaign, using radio, print and digital media to promote the importance and benefits of having a Will. The target demographic of the campaign was people aged 30–49, who may not have previously considered the need for a Will. The campaign focused on changing life situations; ie people reaching life milestones such as moving in with a partner, getting married, having a baby or becoming part of a blended family. The campaign's objectives included: Attracting new Will customers; Increasing the number of enquiries to Public Trustee about making a Will; Encouraging people to revise their Will when their situation has changed; and Building positive relationships with the community.
The results of the campaign were: The number of new Wills written in the period February to May 2014 increased by 48.9%
compared to the same period in 2013; Will modifications grew by 2.7% when compared to the same period; The number of customers in the target age range of 30-49 years old grew by 2.0%; and The digital campaign material was viewed over 5.7 million times and over 12000 clicks
on the advertising directed the user to our Public Trustee website. New Promotional Presentation The Pubic Trustee ground floor main reception area provides introduction facilities to all visitors to the organisation. To inform visitors while they wait in the area for their appointments, a new short promotional presentation was produced to run on the large TV screen. The modern and stylish presentation presents an explanation of some of the roles that our staff undertake on behalf of customers. The four-minute presentation was produced with the assistance of the staff featured in its photographic highlights. The presentation will also be used to support external promotions by staff in shopping centres and during visits to community groups, nursing homes and retirement villages. Public Relations and Community Engagement Public relations and community engagement activities provide a very important opportunity for Public Trustee staff and members of the public to meet. Face-to-face contact gives people the opportunity to ask questions directly. It also allows Pubic Trustee staff to stress the importance of having a professionally prepared and up-to-date Will and Enduring Power of Attorney.
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Promotional and Community Events Over the past 12 months the Customer Relationships Team participated in 36 presentations and events across South Australia, reaching out to some 2300 individuals and carers groups. This community interaction included: Presenting to organisations whose members care for someone with a disability; Promotions at Westfield Shopping Centres at Marion, Tea Tree Plaza and West Lakes,
and at the Mitcham Village and the Adelaide Central Market; Holding the Attorney-General’s Department ‘Make a Will’ week in November 2013, so
AGD staff could use our services to make or update their Will and Enduring Power of Attorney;
Promotions at SuperSA Open Days in Adelaide, Mt Gambier and Port Augusta; Promotion at the 9th World Elder Abuse Awareness Day Conference at the Adelaide
Convention Centre, and wider involvement with other members of the Alliance for the Prevention of Elder Abuse (APEA);
Presenting to residents of independent living organisations, the University of the Third Age at Aldinga, the Jewish community, and Aboriginal Elders at the Tumake Yande Centre in Murray Bridge; and
Participating in the Elderly Citizens Homes Independent Retirement Living Expo at the Adelaide Entertainment Centre.
Our involvement in these community activities has allowed us to increase the public’s awareness of our services.
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Business Improvement Managing our business well is a primary objective of Public Trustee. During 2013–14 we undertook a range of initiatives aimed at business improvement, including: Superannuation Arrangements In the past financial year, Public Trustee improved arrangements for customers with superannuation. Following the adoption of a national approach to the market, we entered into a contract with AustralianSuper, one of Australia’s largest industry superannuation funds. The financial consequences of changing the superannuation arrangements were assessed prior to the transition to AustralianSuper, to ensure the change was in the best interests of each customer. Public Trustee’s standards, procedures and training for superannuation were revised, updated and strengthened as part of this work. Improvement of Information and Communications Technology (ICT) systems Public Trustee operates two core business systems – PeopleSoft Customer Relationship Management (CRM) and PeopleSoft Financials. In addition, a wide range of non-integrated peripheral systems has been developed to deliver functions not available from the core systems. Over 2013–14, Public Trustee examined options to address the ICT systems that support our core business. This included an analysis of the feasibility of upgrading our core business systems, compared to replacing them. A business case for the upgrade or replacement of the ICT systems is being developed. This year Public Trustee continued to work to improve its information and data management. This has resulted in better information standards and protocols. As a result, we have established a Data Governance Group and are in the process of creating a Corporate Data Model. Improved Business Continuity Plans and Disaster ICT Recovery Environment Business Continuity Plans were developed for branches that deliver or support critical services to Public Trustee customers. Further work is planned in 2014–15 to ensure that plans are finalised for all critical areas and to test our capability during a critical event. The Business Continuity Plans will ensure Public Trustee is well prepared should there be a disruption to business operations through restricted physical access to the office building or to ICT systems. Risk management also addressed a disaster scenario in which there is total cessation of ICT services. Public Trustee’s primary ICT infrastructure is hosted at a data centre that is strategically located away from our business premises and has strong control measures in place. To further strengthen the recovery plans, ICT back-up disaster recovery infrastructure was refreshed. In the event of a disaster, or similar situation that renders the primary infrastructure unavailable, the secondary infrastructure can be enabled and used within eight hours.
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Testing of the disaster recovery capability confirmed we would achieve our targets for resumption of business operations and activation of the alternate ICT infrastructure. Intranet Refresh The Public Trustee intranet was rejuvenated to ensure staff have the tools they need. The new intranet was completed in May 2014 and provides staff with a single access point for up-to-date information and tools. It supports staff in making decisions and managing day-to-day tasks, ensuring quick and easy access to accurate information. The new intranet contains updated and refreshed content and a reorganised structure. Implemented a new Strategic Asset Allocation for Investments Over the last 12 months, Public Trustee has worked closely with our investment adviser on a Strategic Asset Allocation (SAA) review, with the aim of improving the Common Fund investment portfolio structure. In order to improve expected returns and reduce risk, the two key recommendations of this review were; To increase the weighting to overseas shares in each of the standard investment
strategies; and To introduce unlisted property and infrastructure to the portfolio.
Accordingly, in October 2013 a new SAA was implemented, which increased the weighting to overseas shares in each of the standard investment strategies. This benefited customers as there were excellent returns for overseas shares this financial year. In addition, we completed a number of actions as we prepared to invest in unlisted property and infrastructure. Specifically, we: Informed customers of changes to the Listed Property Common Fund; Added unlisted property and infrastructure to our list of authorised investments; Changed the name of the Listed Property Common Fund to the Property Common Fund;
and Completed legal due diligence in preparation for investing in infrastructure funds.
In June 2014, following legal due diligence, Public Trustee began the formal process to purchase units in two Australian infrastructure funds. These investments will be finalised later in 2014, and will form part of the Property Common Fund. Our aim is to provide stable long-term returns for our customers.
Review of Ownership and Community Service Obligation Project During 2013–14 Public Trustee undertook in-depth analysis of our services to distinguish those activities that are commercial in nature from those which are a community service obligation. This work was carried out with the Department of Treasury and Finance.
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Business Improvement Teams In the past financial year, we implemented an initiative to develop business improvement project opportunities in Public Trustee. Under the new approach, Business Process Improvement (BPI) teams were established. The individual staff members appointed to the BPI teams received suitable training and used an identified business process, or part of an identified business process, as working examples to reflect and improve on as they went through the training. Members of the teams dedicated one day a week for 12 weeks, plus training time, to these projects. The projects undertaken focused on data integrity processes and the recommendations from those projects have already been implemented.
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Our People Organisational Structure At the end of 2012–13, the functions of the Business & Corporate Development Team were primarily transferred to Corporate Services. This was the only change to the organisation structure from the previous reporting period.
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Executive Team Debra Contala BA (Acc) FCPA Public Trustee The Public Trustee is a Statutory Officer within the Attorney-General’s Department (AGD). Debra Contala began as the Public Trustee in November 2010. Ms Contala had previously worked in the AGD for 10 years in a variety of finance and corporate roles, and was most recently the Executive Director of the Finance and Business Services Division. Ms Contala has extensive experience in State Government, including in the Department of Treasury and Finance and Arts SA. She has strong business credentials and expertise in a wide range of areas within government, including finance, project management, procurement and human resources. Ms Contala has also been a member of a range of government boards including the Superannuation Board and the Board of the SA Fire and Emergency Services Commission. She is a member of the State Procurement Board. Frankie Anderson BSocSc General Manager, Customer Services Frankie Anderson joined Public Trustee in August 2011 as General Manager, Customer Services. Ms Anderson had previously held the role of Director, Human Resources in the AGD. Ms Anderson has brought experience in customer service to Public Trustee. Her varied professional background has given her the opportunity to work closely with many areas of the community, including vulnerable people. Since December 2012, she has been a member of the Supported Residential Facilities Advisory Committee, pursuant to the provisions of the Supported Residential Facilities Act 1992. Tony Brumfield BEc (Acc) General Manager, Business and Client Financial Services Tony Brumfield began with Public Trustee in March 2012. He is an accountant with a Bachelor of Economics (Accounting) from Flinders University and a Graduate Certificate of Management from the University of South Australia. Mr Brumfield has experience in a range of executive positions within the South Australian Government and has a strong background in managing corporate and finance functions. He has held the roles of Director, Financial Services at the Department of Treasury and Finance, Director, Finance and Asset Management in the Department of Primary Industries and Resources, and General Manager, Corporate Services at Defence SA. Nick Wiseman, BEc, MPA, CIMA Manager, Investment Services (non-Executive) Nick Wiseman joined Public Trustee in 2006. As Manager, Investment Services, he is responsible for overseeing the development, implementation and monitoring of investment strategies for the funds Public Trustee manages. Before joining Public Trustee, Mr Wiseman worked at Elders and JP Morgan. He has more than 16 years’ experience in financial markets, ranging from money market dealing to institutional funds management.
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Executive Performance Appraisal The Public Trustee and other executives are subject to an employment contract with the Chief Executive, Attorney-General’s Department (AGD). Each employment contract specifies performance criteria. Executives are subject to an annual appraisal against the performance criteria contained in their contract and the specification of the position. Executive Remuneration The executive classification structure is determined by the Commissioner for Public Sector Employment and sets the parameters for executive remuneration within the Government of South Australia. The Chief Executive, AGD is responsible for determining the appropriate remuneration within the classification structure (refer also to Human Resources statistics later in this report). Staff Climate Survey In May 2014, Public Trustee undertook a staff climate survey. The aim of the survey was to measure staff perceptions about working at Public Trustee. We also sought specific feedback about the matters staff thought should be addressed in developing the 2014–17 Public Trustee Strategic Plan. The survey included questions about morale, customer service issues and policies and processes. About 71% of staff completed the survey. In line with previous years, the survey results demonstrated positive staff morale and showed improved staff satisfaction levels towards customer services and policies and processes. Staff identified priority areas for improvement as being training, system improvements and better internal communication. Public Trustee management has developed strategies to address these priorities in the coming year. Work Health and Safety (WHS) Public Trustee is committed to ensuring that employees and contractors are safe from injury and risks to health and welfare while at work. We are committed to providing a safe and healthy work environment where active contribution and personal responsibility for health and safety by all workers is encouraged. As employees of the AGD, Public Trustee adopts and implements the AGD Health Safety and Welfare plan, policies and programs. Public Trustee has manager and employee representation on the AGD Health and Safety Committee which provides a consultative forum to support and continuously improve work health, safety and wellbeing systems and practices. As part of our commitment to the safety of our employees, half-yearly floor inspections are conducted to identify any hazards or risks requiring administrative or corrective actions. All employees and managers have access to an Employee Assistance Program, which continues to be used. Health and safety initiatives for the year included: Influenza and H1N1 vaccinations offered to all staff, free of charge; Information made available to all staff detailing continued access to the Employee
Assistance Program for staff and their immediate families;
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WHS representatives, first aid officers and fire wardens attended training sessions; WHS Managers’ training was conducted; Employees attended Mental Health Information Sessions; A number of workstation assessments were conducted for new and existing employees;
and Wellbeing initiatives such as the Corporate Cup and Global Corporate Challenge were
supported. Public Trustee had no critical or notifiable incidents in 2013–14. Supporting People with a Disability As part of the Government’s Promoting Independence Strategy, Public Trustee has a number of processes in place to ensure equity for people with disabilities. These include a strong commitment to a workplace culture which fosters a positive environment free from discriminatory behaviours. We continue to work collaboratively with Disability Works Australia to provide opportunities and support the introduction or return to the workforce of people with a disability. During 2013–14, 155 employees undertook Disability Awareness Training. This training is also included in the induction for all new Public Trustee employees. Equal Opportunity and Fairness Through induction and ongoing training, Public Trustee promotes compliance with the AGD Workplace Conduct Policy and the Code of Ethics for the South Australian Public Sector. A Workplace Conduct Contact Officer is available to assist and advise staff as required. Public Trustee ensures all employees attend a refresher session on the Code of Ethics every three years. Whistleblowers Protection Act 1993 Under Section 7 of the Public Sector Act 2009, ‘Each public sector agency must ensure that a public sector employee (with qualifications determined by the Commissioner) is designated as a responsible officer for the agency for the purposes of the Whistleblowers Protection Act 1993. Public Trustee has access, through the AGD, to: A number of responsible officers, whose details are available to staff via the intranet; Whistleblowers Protection Policy; and Whistleblowers Protection Guidelines and Procedures.
Internal Communications An important internal communications vehicle is the monthly staff newsletter – Big Picture – containing contributions from staff about team and branch activity, as well as material about new policies and procedures or changes within the organisation. The refreshed intranet site aided internal communications by improving access to corporate information, policies, procedures, standards, delegations and staff announcements.
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Staff Council The Staff Council is a forum that promotes the exchange and sharing of ideas and issues between Public Trustee staff and senior management The council consists of elected staff representatives across all classification levels from each of the different customer service areas, together with a human resources representative. It meets quarterly to discuss ideas and matters raised by staff members, and to consider and make recommendations to the management of Public Trustee. Council activities include a monthly staff casual day with donations collected for selected South Australian charities. In 2013–14, the staff of Public Trustee raised more than $2 500 for several charities. Staff Development and Training Public Trustee continued its commitment to the training and development of employees. In 2013–14, except for those on extended absences, all staff undertook a performance review discussion, in line with the AGD Performance Development Process. This performance process is being used as the basis for developing the 2014–15 Public Trustee Training Plan. In 2013–14, 179 Public Trustee employees undertook training and development in a range of topics including: Accountants’ Tax Training Building Resilience Business Continuity Management Certificate IV in Personal Trust
Administration Chartered Accountants’ Tax Training Customer Investment Tool (CIT) Code of Ethics Develop SQL Server 2012 Essential Business Writing Fire Warden Training Information Security Awareness
Training Legal Training Managing Vexatious Complainants
Microsoft Excel – Intermediate and Advanced
Ministerial Correspondence National Tax Training Office 2010 Training Office Security Awareness Ongoing training for Work Health
Safety (WHS) officers Procurement and Contract
Management Selection Panel Techniques Financial Statement Preparation Supporting Your People to Win at
Work WHS for Managers
Two employees completed the AGD Leadership and Management Development ‘Accelerate’ program and two employees have commenced the AGD Leadership and Management Development ‘Ignite’ program. Public Trustee encourages and supports employees who wish to further their education through university, TAFE or external studies, by offering learning and development leave and/or financial assistance. Eight employees received assistance to pursue external studies during 2013–14.
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Human Resources Statistics 2013–14
Agency Public Trustee Persons 181
FTEs 171.4
Gender % Persons % FTE Male 38.12 39.73 Female 61.88 60.27
Number of Persons Separated from the agency during the last 12 months
29
Number of Persons Recruited to the agency during the 2013–14 financial year
27
Number of Persons Recruited to the agency during the 13/14 financial year AND who were active/paid at June 2014
12
Number of Persons on Leave without Pay at 30 June 2014 3
NUMBER OF EMPLOYEES BY SALARY BRACKET (Classification) Salary Bracket Male Female Total $0 - $54,799 8 37 45 $54,800 - $69,699 26 48 74 $69,700 - $89,199 27 21 48 $89,200 - $112,599 7 4 11 $112,600+ 1 2 3 Total 69 112 181
STATUS OF EMPLOYEES IN CURRENT POSITION FTEs
Gender Ongoing
Short-term
contract
Long-term
contract Casual Total Male 63.1 1 4 0 68.10 Female 89.18 7.6 5 1.52 103.30 Total 152.28 8.6 9 1.52 171.40
Persons
Gender Ongoing
Short-term
contract
Long-term
contract Casual Total Male 64 1 4 0 69 Female 96 9 5 2 112 Total 160 10 9 2 181
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NUMBER OF EXECUTIVES BY STATUS IN CURRENT POSITION, GENDER AND CLASSIFICATION
Classification
Ongoing Term
Tenured Term
Untenured
Other (Inc.
Casual) Other Total M
ale
Fem
ale
Mal
e
Fem
ale
Mal
e
Fem
ale
Mal
e
Fem
ale
Mal
e
Fem
ale
Mal
e %
of t
otal
Ex
ecs
Fem
ale
% o
f tot
al
Exec
s
Tota
l
SAES1 0 0 0 0 1 1 0 0 0 0 1 33 1 33 2 SAES2 0 0 0 0 0 1 0 0 0 0 0 0 1 33 1 Total 0 0 0 0 1 2 0 0 0 0 1 33 2 67 3
LEAVE MANAGEMENT- AVERAGE DAYS LEAVE PER FULL-TIME EQUIVALENT EMPLOYEE
Leave Type 2013–14 2012–13 2011–12 2010–11 Sick Leave 8.68 9.1 10.5 10.7 Family Carer’s Leave 1.04 0.9 1.1 1.1 Miscellaneous Special Leave 0.69 0.5 0.5 1.2
NUMBER OF ABORIGINAL AND/OR TORRES STRAIT ISLANDER EMPLOYEES
Salary Bracket Aboriginal Employees
Total employees
% Aboriginal employees
$0 - $54,799 1 45 2.22 $54,800 - $69,699 2 74 2.7 $69,700 - $89,199 0 48 0 $89,200 - $112,599 0 11 0 $112,600+ 0 3 0 Total 3 181 1.66
CULTURAL AND LINGUISTIC DIVERSITY
Name Male Female Total % of
Agency Number of Employees born overseas 14 14 28 15.47
Number of Employees who speak language(s) other than English at home
8 5 13 7.18
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NUMBER OF EMPLOYEES BY AGE BRACKET BY GENDER
Age Bracket Male Female Total % of Total
15 - 19 0 0 0 0 20 - 24 0 2 2 1.10 25 - 29 1 9 10 5.52 30 - 34 6 14 20 11.05 35 - 39 9 11 20 11.05 40 - 44 9 11 20 11.05 45 - 49 7 14 21 11.60 50 - 54 11 15 26 14.36 55 - 59 13 20 33 18.23 60 - 64 11 11 22 12.15 65+ 2 5 7 3.87 Total 69 112 181 100%
TOTAL NUMBER OF EMPLOYEES WITH DISABILITIES (ACCORDING TO COMMONWEALTH DDA DEFINITION)
Male Female Total % of
Agency 3 3 6 3.3
TYPES OF DISABILITY (WHERE SPECIFIED)
Disability Male Female Total % of
Agency Disability Requiring Workplace Adaptation 3 3 6 3.31
Physical 3 3 6 3.31 Intellectual 0 0 0 0 Sensory 0 0 0 0 Psychological/Psychiatric 0 0 0 0
NUMBER OF EMPLOYEES USING VOLUNTARY FLEXIBLE WORKING ARRANGEMENTS BY GENDER Leave Type Male Female Total Purchased Leave 0 0 0 Flexitime 67 108 175 Compressed Weeks 1 0 1 Part-time 3 27 30 Job Share 1 3 4 Working from Home 0 0 0
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DOCUMENTED REVIEW OF INDIVIDUAL PERFORMANCE MANAGEMENT Documented Review of Individual Performance Management Total % Reviewed within the last 12 months 93.93 % Review older than 12 months 2.76 % Not reviewed 3.31
LEADERSHIP AND MANAGEMENT TRAINING EXPENDITURE
Training and Development Total Cost % of Total Salary
Expenditure Total training and development expenditure $171 670.86 1.24%
Total Leadership and Management Development $45 085.00 0.32%
ACCREDITED TRAINING PACKAGES BY CLASSIFICATION
Classification
Number of Accredited
Training Packages
ASO1 0 ASO2 1 ASO3 2 ASO4 2 ASO5 0 ASO6 0
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Organisational Support Corporate Services The Corporate Services Branch is responsible for the implementation of policies and procedures relating to the management of corporate assets and resources, financial and management accounting, human resources, marketing, project management, procurement, accommodation and facilities, records and fleet management, telephone network services, inspecting and insuring estate properties, and general administrative services. The branch also helps with risk management throughout the office. Public Trustee places great importance on managing security risks and continues to improve strategies which promote the security of our staff and the organisation. Personal security awareness training was provided to staff during 2013–14, and an independent workplace Security Risk Review was undertaken in June 2014 by the Police Security Services Branch (PSSB). The PSSB review included analysing our office’s physical barriers, duress systems, access systems and CCTV, as well as corporate security policies and procedures. Corporate Finance The Corporate Finance Branch is responsible for financial and management accounting, and the implementation of policies and procedures relating to the management of corporate assets. The branch provides Public Trustee with information to assist in corporate resource allocation. Consultancies Public Trustee engaged two consultancies during 2013–14. Table 15: 2013–14 Consultants
Consultant Purpose of consultancy Number Total Value between $10 000 - $50 000
Dymond Foulds & Vaughan Oztrain Pty Ltd
Self-managed superannuation funds Estates Services Review
1
1
Total 2 $61 000
Employees’ Overseas Travel No overseas travel was undertaken during 2013–14. Government Contracts exceeding $4 million No contracts exceeding $4 million were procured during the year. Environmental Impact and Energy Efficiency Public Trustee is a tenant of 211 Victoria Square. The building owner has provided a base building rating of 4.5 stars. This is in line with the Greening of Government Operations (GoGO) Framework.
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Public Sector Fraud Public Trustee builds control points and mechanisms into its policies and procedures to mitigate the risk of fraud. As part of the ongoing internal audit program, with the assistance of Deloitte, internal controls are regularly reviewed. This enables Public Trustee to identify any control gaps that may expose the organisation to immediate risk. Policies and procedures are regularly reviewed and updated to include any additional controls necessary to mitigate or reduce risk. Any additional controls are embedded into the control self-assessment program. No incidents of fraud were reported during the reporting period Corporate Account Payment Performance Treasurer’s Instruction 11 requires all undisputed accounts to be paid within 30 days of the date of the invoice or claim unless there is a discount or a written agreement between the agency and the creditor. Public Trustee paid 99% of all invoices by the due date. Table 16: 2013–14 Corporate Account Payment Performance
Number of Corporate Accounts
Paid
% of Corporate Accounts Paid by Number
Value in $AUD of Corporate
Accounts Paid
% of Corporate Accounts Paid by Value
Paid by Due Date 1 963 98.99% $12 254 843 99.48% Paid Late and Paid 30 Days or Less From Due Date 17 0.86% $57 938 0.47%
Paid Late and Paid More Than 30 Days From Due Date 3 0.15% $6 697 0.05%
Freedom of Information Public Trustee is an agency within the provisions of the Freedom of Information Act 1991 (the Act). The following details are provided as part of the information statement required by the Act. The role and functions of Public Trustee are set out in this Annual Report. Under Schedule 2 of the Act, Public Trustee is exempt from the provisions of the Act with respect to functions exercised as executor, administrator or trustee. Accordingly, only corporate operations of the office are subject to the provisions of the Act. There is no charge for requests, where information can be obtained by producing existing reports. For more complex requests, Public Trustee levies such fees and charges as prescribed in the current regulations under the Act. Public Trustee received 3 requests for information during the 2013–14 financial year. All applications under the Act in relation to Public Trustee's corporate operations should be made in writing to:
The Accredited FOI Officer Attorney-General’s Department GPO Box 464 ADELAIDE SA 5001
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Information Privacy Principles The State Government of South Australia is committed to protecting the privacy of customers’ personal information and in doing so Public Trustee must comply with a set of Information Privacy Principles (IPPs). These are issued as a Government administrative instruction and regulate the way personal information can be collected, used, stored and disclosed. The IPPs also provide a right for an individual to access and amend their personal information. For access to documents, including amendments of documents relating to personal affairs, please contact the Office of the Public Trustee during normal office hours (8.45 am to 5.00 pm) at 211 Victoria Square, Adelaide. Access to these documents is coordinated by the General Manager, Business and Client Financial Services. Enquiries can be made using the Public Trustee email ([email protected]), by phoning 08 8226 9200 or via our website www.publictrustee.sa.gov.au (click on the ‘Contact Details’ section in the top right-hand menu bar). Information and Communications Technology (ICT) The Information and Communications Technology (ICT) Services Branch provides information, communication and technology management services, including infrastructure and desktop support services. Other roles include the implementation of information security strategies and providing database and software development services. The provision of technical support to major initiatives and projects is a key role for ICT staff. In this regard, technical work was undertaken for the: Implementation of the Customer Investment Tool (CIT); Rollout of MS Office 2010 to all staff; and Development of the new intranet.
During 2013–14 Public Trustee significantly improved its ICT business continuity plans and ICT disaster recovery capacity. Office hardware was replaced as part of a cyclical program to ensure personal computers and multi-function print devices remain reliable and functional. Our rolling, planned four-year program to refresh ICT assets included the rejuvenation of the development and disaster recovery server infrastructure for the Core Business Information System (CBIS). Further analysis of the options to improve and refresh Public Trustee’s Core Business Information System was also undertaken in this reporting period. We strengthened our staff skills ahead of the replacement of the core systems and management of peripheral systems, with the recruitment of an additional ICT staff member. We also began a program of activities to improve the management and quality of data held by existing information systems. During the reporting period, ICT helped extend the use of the Contact and Task Management System (CTMS) to the Trusts, Customer Relationship and Wills teams. The CTMS gives staff on-screen tracking of customer contact. Other significant projects that improved the ICT systems in 2013–14 included: The establishment of the Data Governance Group to drive better management of Public
Trustee’s data assets; The upgrade of the MYOB system used by Taxation Services; The development of a new system to report to the courts on our financial administration;
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The enhancement of the system used by the Regulatory Team to extract data from the main database;
Improvements to the Personal Estates Branch Annual Review system; The strengthening of Information Security Policies to align them to specific requirements
for Public Trustee; and The introduction of information classification for emails.
Client Financial Services Branch The Client Financial Services Branch provides professional accounting and administration support to customer service staff and Public Trustee customers. The Funds Administration Section is responsible for performance, accounting, reporting and taxation outcomes that relate to the management of the Standard Investment Strategies and Common Funds administered by Public Trustee. As at 30 June 2014, Public Trustee managed customer funds valued at $874.6 million. The Client Accounting Section receives funds for, and makes payments to, Public Trustee’s customers. Payments include critical regular payments for food, accommodation and other living expenses; these are made to, and for, customers unable to manage their own financial affairs. For the financial year to 30 June 2014, the accounts payable function made 380 058 payments to the value of $324.1 million and the accounts receivable function receipted $257.1 million. Asset management services are also provided for customers with assets under administration (in addition to managed funds), totalling $1 304.1 million. Table 17: 2013–14 Client Financial Services Activity
Key Statistics 2013–14 2012–13 Funds under administration $874.6 m $866.5 m New funds invested for the reporting period $40.0 m $34.5 m
Funds redeemed for the reporting period $85.5 m $38.0 m Total Common Fund trades for the reporting period $1 232.5 m $1 381.5 m
Distributions to customers $18.4 m $16.4 m Total number of payments made 380 058 347 700 Total value of payments made $324.1 m $264.1 m Number of payments for food, clothing, accommodation and other living expenses 161 327 150 150
Value of payments for food, clothing, accommodation and other living expenses $33.9 m $29.6 m
Number of payments for personal living expenses 91 400 73 689
Value of payments for personal living expenses $7.7 m $6.3 m
Total customer funds receipted value of pensions included
$257.1 m $62.5 m
$245.1 m $57.8 m
Total value of real estate properties held $283.7 m $291.6 m Total value of managed customer assets $1 304.1 m $1 239.9 m
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The whole-of-government change from Westpac Banking Corporation (WBC) to the Commonwealth Bank of Australia (CBA) was successfully completed by Public Trustee in both the corporate and customer accounting areas. Investment Services Public Trustee is responsible for the management of more than $874.6 million of customers’ funds and approximately $438 million of other customer assets. The bulk of the investments are managed through five Standard Investment Strategies (refer to the Corporate & Financial Information section of this report for details.) Public Trustee manages investment of the funds through a combination of in-house expertise, expert advice from our external investment advisor and the appointment of carefully selected external investment fund managers. Key investment highlights include:
Excellent returns across all investment strategies; Long term outperformance against benchmarks for all strategies (3 and 5 years); New strategic asset allocations for each of the investment strategies; and A strong stable of complementary investment managers, with funds spread over cash,
fixed interest, property, infrastructure and shares (international and Australian).
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Financial Performance Corporate Financial Overview 2013–14 Public Trustee achieved an operating surplus before tax of $2.749 million. The operating surplus after income tax equivalents was $1.924 million compared to a budgeted operating surplus of $90 000. Financial Outcomes The following tables and figures provide summaries of the Statement of Comprehensive Income, Statement of Financial Position and Statement of Cash flows, showing comparisons between either ‘actual to budget’ and/or ‘actual to prior year’ performance. Detailed financial reports covering Public Trustee Certification of the Financial Statements, the Independent Auditor-General’s report, and Corporate Financial Statements are presented in the Corporate and Customer Financial Information section of this report. Summary of Statement of Comprehensive income Table 18: 2013–14 Operating activities Actual Budget Actual 2013–14 2013–14 2012–13 $000s $000s $000s Revenue from Ordinary Activities 23 600 21 902 21 843 Expenses from Ordinary Activities and Income Tax Equivalents
21 676
21 819 20 516
Net Operating Surplus from Operating Activities after Income Tax Equivalents
1 924
90 1 327
Total changes in equity (before dividend payment)
1 924
90 1 327
Total changes in equity (after dividend payment)
618
10 1 105
Commissions and fees from core business activities were in line with budget. Favourable outcomes against budget in both management fees ($352 000 favourable) and investment returns ($1.353 million favourable) were due primarily to buoyant market returns and in particular equities markets. Savings in expenditure totalling $0.93 million when compared to budget contributed to the favourable outcome. Factors contributing to this result include: A concerted effort to exercise expenditure restraint during 2013–14; and Savings in depreciation due to timing of capital expenditure.
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Table 19: 2013–14 Summary Statement of Cash Flows
Actual Actual
2013–14 2012–13 $000s $000s Operating Activities Receipts 24 252 22 437 Payments (23 068) (20 619) Net Cash from Operating Activities 1 184 1 818 Investing Activities
Receipts
1
2,000 Payments ( 239) ( 672) Net Cash used in Investing Activities ( 238) 1 328 Financing Activities Receipts - - Payments (1 528) - Net Cash used in Financing Activities (1 528) - Net increase in Cash Held (582) 3 146 Cash at beginning of Reporting Period 11 887 8 741 Cash at end of Reporting Period 11 305 11 887 The major changes in the statement of cash flow are due to: Increase in payables and provisions compared to the previous year; and Dividend distributions to State Government.
Table 20: 2013–14 Comparison of Total Assets to Total Liabilities
As highlighted in the table above, the value of Public Trustee assets is at a similar level with the previous year. Although financial assets have increased in value due to unrealised gains, this has been offset by reduction in the value of plant and equipment due to depreciation/amortisation of these assets.
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
2011-12 2012-13 2013-14
$000
s
Years
Assets
Liabilities
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Table 21: 2013–14 Summary of Key Performance Indicators Actual Budget Actual 2013–14 2013–14 2012–13
Profit Before Tax ($000s) $2 749 $130 $1 895 Profit Margin Ratio 11.65% 0.59% 8.67% Return on Assets 8.11% 0.41% 5.61% Current Ratio 3.5 3.7 3.3 Capital Adequacy Ratio 2.34% 2.00% 2.07% Cost to Revenue Ratio 88.35% 99.41% 91.33% Dividend Payout Ratio 67.87% 86.62% 16.74%
Return on assets is a measure of profit before tax in relation to the gross assets invested in the business, while the cost-to-revenue ratio is a measure of the cost of sales. The cost-to-revenue ratio has decreased this year due to our concerted effort to reduce expenditure and the increase in unrealised gains on financial investments. The capital adequacy ratio defines an appropriate level of funding to meet working capital and the long-term capital expenditure requirements of the office. A capital adequacy ratio of 2% has been agreed as appropriate by the Department of Treasury and Finance. In 2011–12, the dividend paid to government exceeded the requirement that arose from the audited profit, resulting in a $254 000 downward adjustment to the interim dividend payable in 2012–13. As a result, a dividend of $222 000 provided for in 2012–13 was paid in August 2013. An additional final 2012–13 dividend of $651 000 was approved and paid in October 2013. An interim dividend of $655 000 for 2013–14 was also paid to the government in June 2014. Customer Investment Performance Investment Overview For the year ended 30 June 2014, Public Trustee’s investment strategies achieved solid returns. Strong equity markets were the biggest contributor, while returns from fixed interest were more subdued. Equity markets across most regions delivered strong gains, with overseas shares generating 20.1% (unhedged). Australian shares also performed well, returning 17.3%. Global listed property and infrastructure assets benefited from growing confidence in investment markets, adding 15.4% and 24.6% respectively. Over the course of the financial year, global interest rates fell, providing a stimulus for equity markets and boosting returns for bond markets. Global government bonds returned 7.2% (in hedged terms). In Australia, the Reserve Bank of Australia cut interest rates in August 2013 to 2.5%, and rates have remained on hold since that time. The Australian dollar appreciated against the US dollar, finishing the financial year at $0.94 US. Public Trustee’s cash, capital stable, balanced and growth investment strategies outperformed their respective benchmarks, with returns ranging from between 3.11% for cash to 18.31% for the equities strategy (net of fees). The investment returns for five years demonstrate that our long-term performance is strong, stable and continues to exceed benchmarks.
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Table 22: 2013–14 Standard Investment Strategies’ 5-year performance
2013–14 Performance
Last 12 months annualised
3 years annualised
5 years annualised
Cash 3.11% 4.03% 4.39% benchmark 1.66% 2.55% 2.90%
variance 1.45% 1.48% 1.49%
Capital Stable 7.68% 6.65% 6.86% benchmark 6.94% 6.22% 6.53%
variance 0.74% 0.43% 0.33%
Balanced 11.62% 9.11% 9.14% benchmark 11.04% 8.82% 9.09%
variance 0.58% 0.29% 0.05%
Growth 14.21% 10.63% 10.54% benchmark 13.72% 10.06% 10.23%
variance 0.49% 0.57% 0.31%
Equities 18.31% 12.39% 12.09% benchmark 18.60% 11.64% 11.25%
variance -0.29% 0.75% 0.84%
Public Trustee continues to explore opportunities for customers to benefit from economic conditions. One such opportunity is unlisted infrastructure, which has the potential to provide steady long-term returns for our customers and reduce risk in the portfolio. After successfully completing due diligence on an Australian Infrastructure Fund this financial year, we will enter into new investment arrangements in July 2014. Overall the performance of the funds has been extremely successful this financial year. Our bias towards quality investments and long-term focus continues to add value for our customers. Public Trustee takes a highly active role in managing customer funds. We regularly engage with our fund managers, consultants and industry professionals to ensure customer portfolios are managed prudently. We continue to monitor developments in Australia and global trends to ensure adequate protection is in place for our investors. Public Trustee investment funds provide income, growth and security for customers through diversification across asset sectors, and in accordance with Public Trustee’s obligations under the Public Trustee Act 1995 and the Trustee Act 1936. In 2013–14, beneficiaries in estates administered by Public Trustee and other investors chose to invest $279 million ($260 million in 2012–13) of their funds with Public Trustee. Details of the 2013–14 Asset Allocation, Manager of Funds Statement, the Peer Group Comparisons, the Common Funds Statutory Information of Indirect Cost Ratios, Fees and the Classes of Investment in which the Common Funds may invest are contained in the Corporate and Financial Information section of this report. The Public Trustee certification of the Financial Statements, the independent Auditor-General’s report of the financial statements, the Statement of Trusts being administered as at 30 June 2014 and the Common Funds Financial Report are contained in the Corporate and Financial Information section of this report.
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2013–14 Asset Allocation Table 23: 2013–14 Asset Allocation Capital Stable Standard Investment Strategy Common Fund Allocation (%) 2014 Allocation (%) 2013
Neutral Period End $m Neutral Period End $m
Australian Shares 12.0% 11.6% $7.98 15.0% 14.4% $9.17 Overseas Shares 8.0% 8.1% $5.61 5.0% 6.1% $3.88 Listed Property Securities 5.0% 5.3% $3.62 5.0% 5.9% $3.78 Long-term Fixed Interest 15.0% 14.9% $10.29 15.0% 15.0% $9.58 Short-term Fixed Interest 30.0% 30.0% $20.70 30.0% 29.7% $18.99 Overseas Fixed Interest 10.0% 10.1% $7.00 10.0% 9.3% $5.97 Cash 20.0% 20.0% $13.81 20.0% 19.6% $12.55
TOTAL 100.0% 100.0% $69.01 100% 100% $63.92 Balanced Standard Investment Strategy Common Fund Allocation (%) 2014 Allocation (%) 2013 Neutral Period End $m Neutral Period End $m
Australian Shares 24.0% 23.1% $47.57 25.0% 23.3% $48.80 Overseas Shares 16.0% 16.2% $33.32 15.0% 17.6% $37.02 Listed Property Securities 10.0% 10.5% $21.57 10.0% 11.5% $24.10 Long-term Fixed Interest 25.0% 25.2% $51.98 25.0% 24.2% $50.80 Short-term Fixed Interest 10.0% 10.0% $20.52 10.0% 9.6% $20.14 Overseas Fixed Interest 10.0% 10.0% $20.82 10.0% 9.1% $19.01 Cash 5.0% 5.0% $10.27 5.0% 4.8% $10.00 TOTAL 100.0% 100.0% $206.05 100.0% 100.0% $209.87
Growth Standard Investment Strategy Common Fund Allocation (%) 2014 Allocation (%) 2013 Neutral Period End $m Neutral Period End $m
Australian Shares 35.0% 33.8% $68.63 35.0% 31.9% $63.56 Overseas Shares 25.0% 25.4% $51.48 25.0% 28.8% $57.51 Listed Property Securities 10.0% 10.5% $21.34 10.0% 11.3% $22.47 Long-term Fixed Interest 15.0% 15.2% $30.85 15.0% 14.2% $28.41 Short-term Fixed Interest 5.0% 5.0% $10.15 5.0% 4.7% $9.39 Overseas Fixed Interest 5.0% 5.1% $10.30 5.0% 4.4% $8.86 Cash 5.0% 5.0% $10.16 5.0% 4.7% $9.31 TOTAL 100.0% 100.0% $202.91 100.0% 100.0% $199.51
Equities Standard Investment Strategy Common Fund Allocation (%) 2014 Allocation (%) 2013
Neutral Period End $m Neutral Period
End $m
Australian Shares 55.0% 53.8% $42.36 60.0% 54.2% $42.20 Overseas Shares 45.0% 46.2% $36.44 40.0% 45.8% $35.63 TOTAL 100.0% 100.0% $78.80 100.0% 100.0% $77.83
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Manager of Funds During 2013–14, Public Trustee continued its policy of engaging external fund managers for all funds except for cash and Australian fixed interest. Investment assessment of external fund managers requires ongoing monitoring and performance review. This process provides Public Trustee with access to expert advice, without sacrificing control over the style and balance of the common funds. Peer Group Comparisons - Comparative returns to 30 June 2014 (after fees) Table 24: 2013–14 Peer group Comparisons
1 YR % 3 YR % 5 YR % Public Trustee Peer Group Public Trustee Peer Group Public Trustee Peer Group
Cash 3.11% 2.70% 4.03% 3.10% 4.39% 3.30% Capital Stable 7.68% 8.05% 6.65% 6.90% 6.86% 7.55% Balanced 11.62% 10.85% 9.11% 8.50% 9.14% 9.05% Growth 14.21% 12.70% 10.63% 9.70% 10.54% 9.75% Equities 18.31% 14.95% 12.39% 10.15% 12.09% 10.45%
* Note: the peer group returns are based on a survey of multi-sector unit trusts that have similar asset allocations to Public Trustee strategies.
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Public Trustee 2013–14 Corporate and Client Financial Information
Certification of the Financial Statements
We certify that the:-
• accompanying Public Trustee Corporate Statements, Common Fund Statements and Statement of Trusts being Administered and the notes thereto:-
o are in accordance with the accounts and records of Public Trustee; and
o comply with relevant Treasurer’s instructions; and
o comply with relevant accounting standards; and
o present a true and fair view of the financial position of Public Trustee at the end of the financial year and the result of its operations and cash flows for the financial year.
• Internal controls employed by Public Trustee over its financial reporting and its preparation of the financial statements have been effective throughout the financial year.
Original signed 30 September 2014 Original signed 30 September 2014
Debra Contala Tony Brumfield
Public Trustee General Manager, Business and Client Financial Services
Date:- 16 September 2014
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PUBLIC TRUSTEE 2012–13 FINANCIAL STATEMENTS Independent Audit Report
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Audit report page 2
Original signed 24 September 2014
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Public Trustee Corporate Financial Statements
Statement of Comprehensive Income Note 2014 2013for the year ended 30 June 2014 $'000 $'000
Income
Fees and charges 4(a) 20 956 19 220Interest 4(b) 773 987Gain from the disposal of fixed assets 1 - Gain from the disposal of financial assets - 1 Unrealised gains on financial assets 1 486 1 235Other income 4(c) 384 400
Total income 23 600 21 843
Expenses
Employee benefits 5(a), 5(b), 5(c), 5(d) 14 352 13 555Supplies and services 5(e) 5 722 5 669Loss from the disposal of fixed assets - 4 Depreciation and amortisation 777 720
Total expenses 20 851 19 948
Profit before income tax equivalents 2 749 1 895
Income tax equivalent 2(c) 825 568
1 924 1 327
1 924 1 327
The above statement should be read in conjunction with the accompanying notes
Profit after income tax equivalents
Total comprehensive result
The profit after income tax equivalents and total comprehensive result are attributable to the SA Government as owner
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Total equity is attributable to the SA Government as owner
Statement of Financial Position Note 2014 2013As at 30 June 2014 $'000 $'000
Assets:
Current assets
Cash and cash equivalents 17 11 305 11 887Receivables 6 612 853
Total current assets 11 917 12 740
Non-current assets
Financial assets 7, 8 17 419 15 929Plant and equipment 9 4 150 4 842Intangible assets 10 415 265
Total non-current assets 21 984 21 036
Total assets 33 901 33 776
Liabilities:
Current liabilities
Payables 11 1 793 2 128Lease Incentive 268 268 Employee benefits 12 1 314 1 188Provisions 13 15 246
Total current liabilities 3 390 3 830
Non-current liabilities
Payables 11 421 405Lease Incentive 1 316 1 584Employee benefits 12 3 881 3 718Provisions 13 36 -
Total non-current liabilities 5 654 5 707
Total liabilities 9 044 9 537
Net assets 24 857 24 239
Equity:
Reserves 15 - - Retained earnings 24 857 24 239
Total equity 24 857 24 239
Contingent assets and liabilities 14
Unrecognised contractual commitments 18
The above statement should be read in conjunction with the accompanying notes
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Statement of Changes in Equity Note
Reserves Retained Earnings
Total
for the year ended 30 June 2014 $'000 $'000 $'000
Balance as at 30 June 2012 285 22 849 23 134
Transfer reserve to retained earnings 15 ( 285) 285 - Profit/(Loss) after income tax equivalent - 1 327 1 327Total comprehensive result for 2012/13 - 1 327 1 327
Transactions with State Government as ownerDividends provided for 13 - ( 222) ( 222)
Balance as at 30 June 2013 - 24 239 24 239
Transfer reserve to retained earnings 15 - - - Profit/(Loss) after income tax equivalent - 1 924 1 924Total comprehensive result for 2013/14 - 1 924 1 924
Transactions with State Government as ownerDividends paid 13 - (1 306) (1 306)
Balance as at 30 June 2014 - 24 857 24 857
The above statement should be read in conjunction with the accompanying notes
All changes in equity are attributable to the SA Government as owner
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Statement of Cash Flows Note 2014 2013for the year ended 30 June 2014 Inflows Inflows
(Outflows) (Outflows)$'000 $'000
Cash flows from operating activities:
Cash inflowsFees and charges 23 090 21 052Sundry income 25 98Interest 858 1 030Distributions 279 257
Cash generated from operations 24 252 22 437Cash outflowsEmployee benefits (14 049) (13 518)Supplies and services (7 174) (5 809)Tax equivalents ( 475) - GST remitted to ATO (1 370) (1 292)
Cash used in operations (23 068) (20 619)
Net cash provided by operating activities 16 1 184 1 818
Cash flows from investing activites:
Cash inflowsProceeds from disposal of plant and equipment 1 -Proceeds from sales/maturities of financial assets - 2,000
Cash generated from investing activities 1 2,000 Cash outflowsFinancial assets ( 4) ( 2)Purchase of plant and equipment ( 67) ( 413)Purchase of intangibles ( 168) ( 257)
Cash used in investing activities ( 239) ( 672)
Net cash used in investing activities ( 238) 1 328
Cash flows from financing activities:
Cash outflowsDividend distribution to State Government 16 (1 528) -
Net cash used in financing activities (1 528) -
Net increase/(decrease) in cash and cash equivalents ( 582) 3 146
Cash and cash equivalents at 1 July 11 887 8 741
Cash and cash equivalents at 30 June 17 11 305 11 887
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Public Trustee Corporate Financial Statements NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 1 Objectives of Public Trustee
The office of the Public Trustee was established in 1881 and is constituted under the provisions of the Public Trustee Act 1995. The Public Trustee is a statutory officer pursuant to the Public Trustee Act 1995. Public Trustee is a body corporate with the powers of a natural person.
The role of the Public Trustee is to provide all South Australians with access to will making services, powers of attorney preparation and deceased estate and trust administration. Public Trustee also has a role in managing the financial affairs of those people in the community who lack the capacity to manage their own affairs as determined by the courts, the Guardianship Board or through activation of powers of attorney.
2 Summary of significant accounting policies
The corporate statements present the financial performance, financial position and cash flows of Public Trustee as at 30 June 2014 together with the supporting notes. Financial statements relating to funds administered by Public Trustee are prepared separately, detailing Trusts being Administered and Common Funds under Management.
2(a) Basis of accounting Statement of Compliance The financial statements are general purpose financial statements and have been prepared in accordance with relevant Australian Accounting Standards and comply with Treasurer’s Instructions and Accounting Policy Statements promulgated under the provisions of the Public Finance and Audit Act 1987. Australian accounting standards and interpretations that have recently been issued or amended but are not yet effective have not been adopted by Public Trustee for the reporting period ending 30 June 2014. Refer to Note 3.
Basis of preparation The preparation of the financial statements require: − the use of certain accounting estimates and requires management to exercise its judgement in
the process of applying the Public Trustee’s accounting policies. The areas involving a higher degree of judgement or where assumptions and estimates are significant to the financial statements, are outlined in the applicable notes;
− accounting policies are selected and applied in a manner which ensures that the resulting financial information satisfies the concepts of relevance and reliability, thereby ensuring that the substance of the underlying transactions or other events are reported; and
− compliance with accounting policy statements issued pursuant to section 41 of the Public
Finance and Audit Act 1987. In the interest of public accountability and transparency the accounting policy statements require the following note disclosures, which have been included in these financial statements:
(i) revenues, expenses, financial assets and liabilities where the counter-party/transaction is
with an entity within the SA Government as at reporting date, classified according to their nature.
(ii) expenses incurred as a result of engaging consultants;
(iii) employee targeted voluntary separation packages (TVSP) information;
(iv) employees whose normal remuneration is equal to or greater than the base executive remuneration level and the aggregate of the remuneration paid or payable or otherwise made available, directly or indirectly by the entity to those employees; and
(v) board/committee member and remuneration information, where a board/committee
member is entitled to receive income from membership other than a direct out-of-pocket reimbursement.
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Public Trustee Corporate Financial Statements NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
The Public Trustee Statement of Comprehensive Income, Statement of Financial Position and Statement of Changes in Equity have been prepared on an accrual basis and are in accordance with the historical cost convention, except for certain assets that were valued in accordance with the valuation policy applicable. The Statement of Cash Flows has been prepared on a cash basis. The financial statements have been prepared based on a twelve month operating cycle and presented in Australian currency. The accounting policies set out below have been applied in preparing the financial statements for the year ended 30 June 2014 and the comparative information presented for the year ended 30 June 2013.
2(b) Comparative information
The presentation and classification of items in the financial statements are consistent with prior periods except where specific accounting standards and/or accounting policy statements have required a change.
Where presentation or classification of items in the financial statements has been amended comparative amounts have been reclassified unless reclassification is impracticable. The restated comparative amounts do not replace the original financial statements for the preceding period. For the year ended 30 June 2014 Public Trustee has not applied an accounting policy retrospectively or made a retrospective restatement of items or reclassified items in the financial statements.
2(c) Taxation and dividend
The Public Trustee Act 1995, through the provisions of Sections 47 and 48, provides for the payment to Government of taxation equivalents and dividends. The income tax liability is based on the Treasurer’s accounting profit method, which requires that the corporate income tax rate be applied to the net profit. The Public Trustee consults with the Minister as to whether a dividend should be paid to the Treasurer for that financial year and, if so, as to the amount of the dividend.
Public Trustee is also liable for payroll tax, fringe benefits tax and goods and services tax.
2(d) Events after the reporting period
Where an event occurs after 30 June 2014 but provides information about conditions that existed at 30 June, adjustments are made to amounts recognised in the financial statements. Note disclosure is made about events between 30 June and the date the financial statements are authorised for issue where the events relate to a condition which arose after 30 June and which may have a material impact on the results of subsequent years.
2(e) Basis of valuation
Non-current assets and liabilities with the exception of Employee Benefits, are carried at deemed fair value. Fair Value measurement AASB 13 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants, in the principal or most advantageous market, at the measurement date. Public Trustee classifies fair value measurement using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements, based on the data and assumptions used in the most recent revaluation. • Level 1 – traded in active markets and is based on unadjusted quoted prices in active markets
for identical assets or liabilities that the entity can access at measurement date. • Level 2 – not traded in an active market and are derived from inputs (inputs other than quoted
prices included within level 1) that are observable for the asset, either directly or indirectly. • Level 3 – not traded in an active market and are derived from unobservable inputs.
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Public Trustee Corporate Financial Statements NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Plant and Equipment
Plant and equipment are brought to account at cost less, where applicable, any accumulated depreciation or amortisation. The carrying amount of plant and equipment is reviewed annually to ensure it is not in excess of the recoverable amounts from these assets. The recoverable amount is assessed on the basis of the expected net cash flows, which will be received from the assets’ employment and subsequent disposal. The expected net cash flows have not been discounted to their present values in determining the recoverable amount. An amount by which the asset’s carrying amount exceeds the recoverable amount is recorded as an impairment loss.
Intangible Assets An intangible asset is an identifiable non-monetary asset without physical substance. The acquisition of software is capitalised when the expenditure meets the definition and recognition criteria of an asset and when the amount of expenditure is greater than or equal to $5,000. Software is measured at cost unless the asset is acquired for no cost or for a nominal amount and then the asset’s fair value is deemed to be cost. All research and development costs that do not meet the capitalisation criteria outlined in AASB 138 Intangible Assets are expensed.
Plant and equipment and intangible assets are depreciated or amortised on a straight-line basis over their estimated useful lives, commencing from the time the asset is held ready for use. Amortisation is used in relation to intangible assets such as software, while depreciation is applied to physical assets such as plant and equipment. The depreciation/amortisation rates used for each class of depreciable assets are: Class of fixed asset Depreciation rate Plant and equipment 20% - 27% Software 20% - 27% Accommodation fit out 10%
Financial Instruments Financial instruments are carried at fair value determined as below:
Cash and cash equivalents: are valued at nominal amounts. This asset consists of cash at
bank, on hand and short term money market deposits that are readily converted to cash and which are subject to insignificant risk of changes in value.
Investments: on acquisition are brought to account at cost and subsequently revalued at the
balance date to fair value. Fixed interest investments are classified as held at fair value through the profit or loss and valued at market value based on independently obtained market yields applying at the balance date. Australian and International equities currently held in pooled funds are valued at the fair value prices established by the managers of the collective investment vehicles in which Public Trustee has invested.
Financial Instruments - Recognition Public Trustee recognises financial assets and financial liabilities on the date it becomes party to the contractual agreement (trade date) and recognises changes in fair value of the financial assets or financial liabilities from this date. Financial Instruments – Measurement Financial assets and liabilities held at fair value through the profit or loss are measured initially at fair value excluding any transaction costs that are directly attributable to the acquisition or issue of the financial asset or financial liability. Transaction costs on financial assets and financial liabilities at fair value through profit or loss are expensed immediately. Subsequent to initial recognition, all instruments held at fair value through profit or loss are measured at fair value with changes in their fair value recognised in the Statement of Comprehensive Income. Fair value of financial instruments are classified, according to fair value hierarchy, at level 2 - fair values that are based on inputs that are directly or indirectly observable for the asset/liability. Fair value in an active market
The fair value of financial assets and liabilities traded in active markets is based on their quoted market prices at the reporting date without any deduction for estimated future selling costs. Financial assets are priced at current bid prices, while financial liabilities are priced at current asking prices.
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Fair value of unlisted unit trusts Investments in other unlisted unit trusts are recorded at the fair value as reported by the managers of such funds.
Financial Instruments – Classification Investments in financial assets such as equities and units in unlisted schemes have been classified as ‘Fair value through the profit or loss’ and recognised in the Statement of Financial Position at fair value, with changes in fair value during the period recognised in the Statement of Comprehensive Income. If any indication of impairment exists, an impairment loss is recognised in the Statement of Comprehensive Income as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the original effective interest rate. If in a subsequent period the amount of an impairment loss recognised on a financial asset carried at amortised cost decreases and the decrease can be linked objectively to an event occurring after the write-down, the write-down is reversed through the Statement of Comprehensive Income.
Receivables and Payables are valued on a historical cost basis and it is considered that carrying value approximates market value.
Distributions from trust investments are recognised on a present entitlement basis.
2(f) Rounding
All amounts in the financial statements have been rounded to the nearest thousand dollars ($’000).
2(g) Income and expenses
Income and expenses are recognised in Public Trustee’s Statement of Comprehensive Income when and only when the flow or consumption or loss of economic benefits has occurred and can be reliably measured. Income and expenses have been classified according to their nature and have not been offset unless required or permitted by a specific accounting standard or where offsetting reflects the substance of the transaction or other event. Revenue from disposal of non-current assets is recognised when control of the asset has passed to the buyer and is determined by comparing proceeds with carrying amounts.
2(h) Employee benefits
Provision has been made in the Financial Statements, where stated, for Public Trustee’s liability for employee benefits arising from services rendered by employees to balance date that remain unpaid. Related on-costs consequential to the employment of employees (payroll tax and superannuation contributions) have been included under “Payables” (Refer Note 11). Salaries and wages Liability for salaries and wages are measured as the amount unpaid at the reporting date at remuneration rates current at reporting date. Superannuation Public Trustee makes contributions to several superannuation schemes operated by the State Government. These contributions are treated as an expense when they occur. There is no liability for payment to beneficiaries as the South Australian Superannuation Board (SASB) has assumed this liability. The only liability outstanding at balance date relates to any contributions due but not yet paid to the SASB. Annual leave Provision has been made for the unused component of annual leave to balance date. The provision has been calculated at nominal amounts based on current salary rates plus 4% inflation rate as recommended in Accounting Policy Framework IV, paragraphs 5.7 and 5.8.
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Skills and experience retention leave Skills and experience retention leave is recognised on a pro-rata basis up to balance date in respect of services provided by Public Trustee employees with greater than 15 year’s service. The skills and experience retention leave is expected to be payable within twelve months and is measured at the undiscounted amount expected to be paid. Long service leave Long service leave is recognised on a pro-rata basis in respect of services provided by Public Trustee employees up to balance date. The liability was measured by an actuarial assessment performed by the Department of Treasury and Finance based on Public Trustee employee data. Expected future payments are discounted using market yields at the end of the reporting period on government bonds with durations that match, as closely as possible, the estimated future cash outflows. This calculation is consistent with Public Trustee’s experience of employee retention and leave taken. The current liability portion has been based on the past history of annual payments.
Sick leave No provision has been made in respect of sick leave, as entitlements are non-vesting. As sick leave taken by employees is considered to be taken from the current year’s accrual, no liability is recognised.
2(i) Leases
The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement. Public Trustee has assessed whether the fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset. Public Trustee has entered into operating leases. Operating lease payments are recognised as an expense in the Statement of Comprehensive Income on a straight-line basis over the lease term. The straight-line basis is representative of the pattern of benefits derived from the leased assets.
All incentives for the agreement of a new or renewed operating lease are recognised as an integral part of the net consideration agreed for the use of the leased asset. Incentives received to enter into operating leases are recognised as a liability. The aggregate benefits of lease incentives received by the Public Trustee in respect of operating leases are recorded as a reduction of rental expense over the lease term, on a straight line basis. Lease incentives in the form of leasehold improvements are capitalised as an asset and depreciated over the remaining term of the lease or estimated useful life of the improvement, whichever is shorter.
2(j) Insurance
Public Trustee has insured for risks through the State Government’s insurers, SAICORP, a division of South Australian Government Financing Authority. The excess payable under this arrangement varies depending on each class of insurance held.
2(k) Current and non-current items
Assets and liabilities are characterised as either current or non-current in nature. Public Trustee has a clearly identifiable operating cycle of 12 months. Therefore assets and liabilities that will be realised as part of the normal operating cycle will be classified as current assets or current liabilities. All other assets and liabilities are classified as non-current.
2(l) Receivables
Receivables comprise debtors, accrued investment income, income tax equivalent refund due and prepayments. Debtors arise in the normal course of selling goods and services to the public and other agencies. Trade receivables are payable within 30 days after the issue of an invoice or the services have been provided under a contractual arrangement.
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2(m) Payables
Payables include creditors, accrued expenses, employment on-costs, income tax equivalents and Goods and Services Tax (refer Note 2(o)). Creditors represent the amounts owing for goods and services received but not paid prior to the end of the reporting period. Creditors include all unpaid invoices received relating to the normal operations of Public Trustee. Accrued expenses represent goods and services provided by other parties during the period that are unpaid at the end of the reporting period and where an invoice has not been received. All amounts are measured at their nominal amount and are normally settled within 30 days after Public Trustee receives an invoice. Employment on-costs include superannuation contributions and payroll tax with respect to outstanding liabilities for salaries and wages, long service leave and annual leave.
2(n) Provisions
The workers compensation provision is an actuarial estimate of the outstanding liability as at 30 June 2014 provided by a consulting actuary engaged through the Public Sector Workforce Relations Division of the Department of the Premier and Cabinet. The provision is for the estimated cost of ongoing payments to employees as required under current legislation. Public Trustee is responsible for the payment of workers compensation claims.
2(o) Accounting for the Goods and Services tax (GST)
Income, expenses and assets are recognised net of the amount of GST except that:
- The amount of GST incurred by Public Trustee as a purchaser that is not recoverable from the Australian Taxation Office is recognised as part of the cost of acquisition of an asset or as part of an item of expense; and
- Receivables and payables are stated with the amount of GST included.
The net GST payable to, or recoverable from, the Australian Taxation Office has been recognised as a payable or receivable in the Statement of Financial Position. Cash flows are reported on a gross basis in the Statement of Cash Flows. The GST component of the cash flows arising from investing or financing activities, which is recoverable from, or payable to, the Australian Taxation Office is classified as operating cash flows.
Unrecognised contractual commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the Australian Taxation Office. If GST is not payable to, or recoverable from, the Australian Taxation Office, the commitments and contingencies are disclosed on a gross basis.
2(p) Disaggregated reporting
Disaggregated reporting has been deemed not appropriate for Public Trustee, as assets, liabilities, income and expenses attributable to different activities cannot be reliably determined.
2(q) Impairment
All assets are assessed annually for evidence of impairment at reporting date, where there is an indication of impairment, the recoverable amount is estimated. Any amount by which the carrying amount exceeds the recoverable amount is recorded as an impairment loss.
3 New and revised accounting standards
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet effective, have not been adopted by the Public Trustee for the period ending 30 June 2014. The Public Trustee has assessed the impact of the new and amended standards and
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Public Trustee Corporate Financial Statements NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
interpretations and considers there will be no impact on the accounting policies or the financial statements other than AASB 13 Fair Value Measurement. In accordance with the new AASB 13 Fair Value Measurement, which became effective for the first time in 2013-14, Public Trustee has:
reviewed its fair value valuation techniques for non-financial assets to ensure they are consistent with the standard. Previously, the Public Trustee has used the cost approach or the market approach to determine fair value. The department will continue to measure its non-financial assets using either the cost or market approach. The application of AASB 13 has not had a material impact on the fair value measurements; and
included additional disclosures where required to assist users in assessing the valuation techniques and inputs used to ascertain fair value measurements used for asset and liability measurements.
Fair value hierarchy and other information is provided in Note 9. 4 Income
4(a) Fees and charges 2014 2013 $’000 $’000 Commissions1 10 900 9 683 Fees and charges1 1 946 1 619 Management Fees2 8 110 7 918 Total fees and charges 20 956 19 220
1 Commissions and fees are charged against estates pursuant to Sections 44 and 45 of the Public Trustee Act 1995 and other Acts.
2 A management fee is charged against common funds at the rate of one-twelfth of one percent of the value of each fund as at the first business day of the month.
4(b) Interest
2014 2013 $’000 $’000 Interest on operating and reserve accounts 53 61 Interest on fixed term investments 720 926 Total interest 773 987
4(c) Other income
2014 2013 $’000 $’000 Recoupment of salaries and oncosts 2 73 Sundry income 23 25 Distributions from trusts 359 302 Total other income 384 400
5 Expenditure
5(a) Superannuation During 2013-14 Public Trustee paid an amount of $1.3 million ($1.3 million) to the Department of Treasury and Finance towards the accruing Government liability for superannuation in respect of its employees.
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Public Trustee Corporate Financial Statements NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
5(b) Remuneration of employees The number of employees whose remuneration received or receivable fell within the following bands:-
2014 2013 Number of
Employees Number of
Employees $141 500 - $151 4991 1 - $231 500 - $241 499 1 2 $241 500 - $251 499 1 - $281 500 - $291 499 1 1 4 3 1One officer received payments for accrued long service leave in lieu of leave. The table includes all employees who received remuneration equal to or greater than the base executive remuneration level during the year. Remuneration of employees reflects all costs of employment including salaries and wages, payments in lieu of leave, superannuation contributions, fringe benefits tax and any other salary sacrifice benefits. Total remuneration received or due and receivable by these employees was $924 000 ($751 000).
5(c) Targeted voluntary separation packages (TVSPs) Public Trustee provided for no TVSPs during 2013-14 or the previous year.
5(d) Remuneration of board and committee members
Members that were entitled to receive remuneration for membership during the 2013-14 financial year were:
Public Trustee Audit and Risk Management Committee Mr Peter Whelan (7 months) Ms Christine Locher (full year) Ms Virginia Hickey (5 months)
The number of members whose remuneration received or receivable fell within the following bands:- 2014 2013 Number of
Members Number of
Members $0 - $9 999 3 1 $10 000 - $19 999 - 1 3 2
The total remuneration received or receivable by members was $18 000 ($23 000). Unless otherwise disclosed, transactions between members are on conditions no more favourable than those that it is reasonable to expect the entity would have adopted if dealing with the related party at arm's length in the same circumstances. In accordance with the Department of Premier and Cabinet Circular No. 016, government employees did not receive any remuneration for board/committee duties during the financial year.
5(e) Supplies and services 2014 2013 $’000 $’000 Personal services contractors 41 114 Other service contractors 201 165 Minor works, maintenance and equipment 15 10 Insurance 202 182 Information technology 1 552 1 352 Accommodation and telecommunication 1 773 1 718 Legal expenses 71 79 Service contractors 615 631 Other Supplies and services 1 018 1 017 Auditors remuneration1 173 168 Consultancies2 61 233 Total supplies and services 5 722 5 669
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Public Trustee Corporate Financial Statements NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
1 Audit fees paid/payable to the Auditor General’s Department relating to the audit of financial statements. No other services were provided by the Auditor General’s Department. 2 Public Trustee paid for two consultancies between $10 000 and $50 000 in 2013-14 for a review of the Estate Services function and to provide advice regarding improvements to client superannuation arrangements. There were three consultancies in 2012-13 in excess of $50 000.
6 Receivables 2014 2013 $’000 $’000
Current receivables Debtors 39 101 Accrued investment income 373 377 Income tax equivalent refund due - 235 Prepayments 200 140 Total Receivables 612 853
Receivables are generally settled within 30 days after the issue of an invoice. 7 Financial assets
Public Trustee is required, pursuant to section 46(2)(c) of the Public Trustee Act 1995, to obtain the Treasurer’s approval as to the manner of investment of corporate funds.
2014 2013 $’000 $’000
Non-current financial assets Australian fixed interest (pooled funds) 7 077 6 943 International equities (pooled funds) 4 263 3 510 Australian listed property (pooled funds) 1 354 1 284 Australian equities (pooled funds) 4 725 4 192 Total financial assets 17 419 15 929
8 Financial instruments
8(a) Fair value of financial assets and liabilities
Financial instruments are readily tradeable and carried at fair value based upon the valuation policies set out in Note 2(e). The aggregate carrying amounts for each class of financial instrument are as disclosed within the notes to the financial statements.
8(b) Investment in collective investment vehicles
In addition to holding financial instruments directly, Public Trustee has invested in collective investment vehicles for the purpose of gaining exposure to Australian and International assets. The managers of such vehicles have invested in a variety of financial instruments, which expose Public Trustee to investment risks, including market risk, credit risk, interest risk and currency risk. Public Trustee has assessed the investment rules of these collective investments and determined their suitability as investments.
8(c) Financial risk management
Public Trustee’s activities expose it to a variety of financial risks: market risk (including interest rate risk and price risk), credit risk and liquidity risk. The overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of Public Trustee. Only Australian domiciled pooled funds are used for investments in overseas assets. These funds are not directly exposed to foreign exchange risk as the pooled funds are fully hedged against currency risk. Management of risk is focused on both strategic and business process risk. Annually, an analysis of strategic risk is undertaken which is comprehensive and covers investment, financial, operational and administrative responsibilities of Public Trustee. Business processes are documented, key risks are identified and management strategies used to control these risks are in place.
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Public Trustee Corporate Financial Statements NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
8(d) Market risk Price risk Public Trustee is exposed to equity securities price risk. This arises from investments held by Public Trustee and classified on the Statement of Financial Position as financial assets at fair value through the profit or loss. Public Trustee is not exposed to commodity price risk, as the classes of investments include Australian shares, International shares and listed properties. To manage its price risk arising from investments, Public Trustee diversifies its portfolio. Diversification of the portfolio is done in accordance with its Investment Guidelines. The analysis detailed below is based on the assumption that the market indexes had increased/decreased by a set percentage with all other variables held constant and all instruments moving according to the historical correlation with the index. Cash flow and interest rate risk Public Trustee’s interest rate risk arises from cash investments, short term investments and Australian fixed interest investments. Instruments issued at fixed interest rates expose Public Trustee to fair value interest rate risk and variable rate instruments expose Public Trustee to cash flow interest rate risk. Public Trustee invests in short term money market instruments with maturities less than one year and with credit ratings that satisfy the credit rating requirements of Public Trustee’s Cash Common Fund. A sensitivity analysis is provided below, outlining the exposure to each type of market risk at reporting date, showing how profit or loss would be affected by the changes in the relevant risk variable that were reasonably possible at that date. All instruments are designated as financial assets at fair value through the profit or loss; therefore there is no direct impact on equity. Sensitivity analysis – 30 June 2014 Interest Rate Risk Price Risk - + - +
Carrying Amount
$'000
1% State-
ment of Compre-hensive Income $’000
1% State-
ment of Compre-hensive Income $’000
20% State-
ment of Compre-hensive Income $’000
10% State-
ment of Compre-hensive Income $’000
Financial assets Cash and cash equivalents
11 305 (113) 113 - -
Financial assets at fair value through profit or loss: Australian fixed interest
(pooled funds) 7 077 (71) 71 - -
International equities (pooled funds)
4 263 - - (853) 426
Australian listed property (pooled funds)
1 354 - - (271) 135
Australian equities (pooled funds)
4 725 - - (945) 473
Total (decrease)/increase (184) 184 (2 069) 1 034
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Sensitivity analysis – 30 June 2013
Interest Rate Risk Price Risk - + - +
Carrying Amount
$'000
1% State-
ment of Compre-hensive Income $’000
1% State-
ment of Compre-hensive Income $’000
20% State-
ment of Compre-hensive Income $’000
10% State-
ment of Compre-hensive Income $’000
Financial assets Cash and cash equivalents
11 887 (119) 119 - -
Financial assets at fair value through profit or loss: Australian fixed interest
(pooled funds) 6 943 (69) 69 - -
International equities (pooled funds)
3 510 - - (702) 351
Australian listed property (pooled funds)
1 284 - - (257) 129
Australian equities (pooled funds)
4 192 - - (838) 419
Total (decrease)/increase (188) 188 (1 797) 899
8(e) Credit risk
Credit risk is managed at the corporate level. Credit risk arises from cash and cash equivalents, deposits with banks and financial institutions, as well as credit exposures to outstanding receivables and committed transactions. Public Trustee has no direct exposure to derivative instruments, thus credit risk arises primarily through investments with banking corporations. Short-term money market instruments must have a short-term Standard & Poor’s (S&P) rating of A1 or in the case of the issuer being a bank under the Banking Act 1959 a rating of A2 is accepted. Floating rate instruments must have a long-term S&P credit rating of A+ or better or where the counter party is a bank under the Banking Act 1959 a rating of BBB or better is accepted. If there is no independent rating, Public Trustee assesses the credit quality of the customer, taking into account its financial position and past experience. Pooled investment funds are not rated; however, Public Trustee has made a thorough assessment of all pooled funds managers in regard to credit and other risks prior to investing funds with each manager. The credit risk lies with the pooled fund manager responsible for the management of the underlying investments. Public Trustee continually monitors these assessments. The maximum exposure to credit risk at the reporting date is the carrying amount of the financial assets. The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external credit ratings (if available) or to historical information about counterparty default rates. Public Trustee has no direct exposure to derivative instruments.
2014 2013 $’000 $’000 Cash at bank, short-term bank deposits and floating rate notes
A1+ 2 805 3 387 A1 - 2 500 A2 8 500 6 000 Total cash at bank, short-term bank deposits and floating rate notes
11 305 11 887
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2014 2013
$’000 $’000 Trade receivables Counterparties with external ratings
A1+ 11 38 A1 - 18 A2 46 34 Counterparties without external ratings Existing customers with no defaults in the past 555 763 Total trade receivables 612 853
8(f) Liquidity risk
Public Trustee has working capital policies in place in order to maintain liquidity. Short-term investment analysis assists in determining the amount, if any, to be invested or reinvested in order to maintain working capital. Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, and the ability to close out market positions. Public Trustee manage the liquidity risk by continuously monitoring forecast and actual cash flows and matching maturity profiles of financial assets and liabilities. All financial assets held to maturity have a maturity date within 12 months. Pooled Funds investments have no maturity date.
9 Plant and equipment
2014 Opening Balance
Addit-ions
Dispos-als
Deprec-iation
Revaluation / Other
Closing Balance
$’000 $’000 $’000 $’000 $’000 $’000 Plant and equipment at cost
947 360 (84) - - 1 223
Accommodation fit-out
6 318 - - - - 6 318
Work in progress at cost
293 (293) - - - -
Total plant and equipment
7 558 67 (84) - - 7 541
Less: accumulated depreciation Plant and equipment
(859) - 84
(134) - (909)
Accommodation fit-out
(1 857) - - (625) - (2 482)
Total accumulated depreciation
(2 716) - 84 (759) - (3 391)
Net plant and equipment 4 842 67 - (759) - 4 150
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2013 Opening Balance
Addit-ions
Dispos-als
Deprec-iation
Revaluation / Other
Closing Balance
$’000 $’000 $’000 $’000 $’000 $’000 Plant and equipment at cost
1 026 - (79) - - 947
Accommodation fit-out
6 217 101 - - - 6 318
Work in progress at cost
- 293 293
Total plant and equipment
7 243 394 (79) - - 7 558
Less: accumulated depreciation
Plant and equipment
(845) - 75 (89) - (859)
Accommodation fit-out
(1 234) - - (623) - (1 857)
Total accumulated depreciation
(2 079) - 75 (712) - (2 716)
Net plant and equipment 5 164 394 (4) (712) - 4 842
Plant and Equipment assets are classified as Level 3 assets for fair value purposes as valuation is based on management’s assessment of useful life and condition. The significant input to the valuation is management’s assessment of useful life which is disclosed in Note 2(e). There have been no movements in the fair value of Plant and Equipment other than movements as a result of additions, disposals and current year depreciation as shown above.
10 Intangible assets
2014 Opening Balance
Addit-ions
Dispos-als
Amort-isation
Revaluation / Other
Closing Balance
$’000 $’000 $’000 $’000 $’000 $’000 Software at cost 6 100 425 - - - 6 525 Work in progress at cost
257 (257) - - - -
Less: accumulated
ammortisation
(6 092) - - (18) - (6 110)
Total intangible assets
265 168 - (18) - 415
Work in progress items are transferred to intangible assets when ready for use. 2013 Opening
Balance Addit-ions
Dispos-als
Amort-isation
Revaluation / Other
Closing Balance
$’000 $’000 $’000 $’000 $’000 $’000 Software at cost 6 100 - - - - 6 100 Work in progress at cost
- 257 - - - 257
Less: accumulated ammortisation
(6 083) - - (9) - (6 092)
Total intangible assets
17 257 - (9) - 265
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Public Trustee Corporate Financial Statements NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 11 Payables
2014 2013 $’000 $’000 Current liabilities Trade creditors and accrued expenses 601 1 069 Income tax equivalents 683 568 GST payable 314 267 Employment on-costs 195 224 1 793 2 128 Non-current liabilities Employment on-costs 421 405 Total payables 2 214 2 533
12 Employee benefits
2014 2013 $’000 $’000 Current Liabilities Long service leave1,2 254 142 Accrued salaries 149 123 Recreation leave1 800 840 Skills and experience retention leave1 111 83 1 314 1 188 Non-current liabilities Long service leave1,2 3 881 3 718 3 881 3 718 Total employee benefits 5 195 4 906 1 An actuarial assessment performed by the Department of Treasury and Finance left the salary inflation rate at 4%. As a result, there is no net financial effect resulting from changes in the salary inflation rate.
2 Treasury Accounting Policy Framework IV, paragraph 5.24, confirms the long service leave taken percentage is unchanged from 2013 at 40%. The yield on long term Commonwealth Bonds used as the discount rate in calculating long service leave by the actuarial is 3.5% (3.75%). The change in methodology and actuarial assumptions in the current financial year have had minimal effect on the long service leave liability.
13 Provisions
2014 2013 $’000 $’000 Current Liabilities Provision for dividend to State Government1 - 222
Provision for workers’ compensation2 15 24 15 246 Non-current Liabilities Provision for workers’ compensation2 36 - Total provisions 51 246
2014 2013
$’000 $’000 Provisions for dividend Provision for dividend to State Government at 1 July1 222 - Add: additional provision recognised1 1 306 222 Less: payments to State Government (1 528) - Provision for dividend at 30 June - 222
1 In accordance with the Public Trustee Charter, agreed by the Attorney-General and Treasurer, any differences between forecast profit and audited profit will be addressed through an adjustment to the final dividend in the following financial year. In 2012-13 an interim dividend of $222,000
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(2012-13 interim dividend of $476,000 less credit of $254,000 arising from 2011-12) was paid to the Government. An additional final 2012-13 dividend of $651,000 was approved and paid in October 2013. An interim dividend of $655,000 for 2013-14 has been paid to the Government.
2 A liability has been reported to reflect unsettled workers compensation claims. The workers’ compensation provision is based on an actuarial assessment performed by the Public Sector Workforce Relations Division of the Department of Premier and Cabinet.
14 Contingencies
Public Trustee had no known contingent assets or liabilities as at balance date. 15 Reserves
Workers compensation reserve1 2014 2013 $’000 $’000 Balance as at 1 July - 285 Payments/transfers from reserves - (285) Total reserves as at 30 June - -
1 Public Trustee established a reserve to meet the cost of workers’ compensation claims. This reserve was transferred to retained earnings in 2012-13 and a provision established for workers’ compensation (see Note 13).
16 Cash flow reconciliation
16(a) Reconciliation of cash and cash equivalents 2014 2013 $’000 $’000 Cash and cash equivalents disclosed in the Statement of Financial Position
11 305 11 887
Balance as per the Statement of Cash Flows 11 305 11 887
16(b) Reconciliation of profit/loss after income tax equivalents to net cash provided by operating activities 2014 2013 $’000 $’000 Profit for the year after income tax equivalent 1 924 1 327 Add/Less non cash items:- Depreciation and amortisation 777 720 Lease incentive (268) (267) Unrealised gain on financial assets (1 486) (1 235) Realised gain on financial assets - (1) Loss (Gain) on disposal of equipment (1) 4 Change in assets and liabilities:- Decrease (Increase) in receivables 6 494 Increase (Decrease) in payables (468) 146 Increase (Decrease) in employee benefits and on-costs
276 12
Increase (Decrease) in provisions 27 24 Increase (Decrease) in capital written off - - Increase (Decrease) in income tax equivalents 350 568 (Decrease) Increase in GST liability 47 26 Net cash provided by operating activities 1 184 1 818
Public Trustee Annual Report 2013–14
Page 83 of 6
Public Trustee Corporate Financial Statements NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
16(c) Reconciliation of dividend paid to State Government 2014 2013 $’000 $’000 Interim dividend paid for 2012-13 222 - Final dividend paid for 2012-13 651 - Interim dividend paid for 2013-14 655 - Total dividend paid 1 528 -
17 Cash and cash equivalents
2014 2013 $’000 $’000 Cash and cash equivalents
Cash 1 805 2 387 Short term financial assets held to maturity 9 500 9 500
11 305 11 887 18 Unrecognised contractual commitments Public Trustee has no capital contractual arrangements for 2012-13 or 2013-14.
2014 2013 $’000 $’000 Remuneration commitments
One year or less 714 696 Later than one year but no longer than five years 715 1 852 Total remuneration commitments 1 429 2 548
Amounts disclosed include commitments arising from executive service contracts. Public Trustee does not offer remuneration contracts greater than 5 years. 2014 2013 $’000 $’000 Operating lease commitments
One year or less 2 004 1 759 Later than one year but no longer than five years Later than five years
8 796 2 204
7 722 4 123
Total operating lease commitments 13 004 13 604
Public Trustee’s operating leases are for office accommodation. Office accommodation is leased from the Department of Planning, Transport and Infrastructure. The leases are non-cancellable and expire in May 2020. Rent is payable monthly in advance.
Public Trustee Annual Report 2013-14
Page 84 of 138
Public Trustee Corporate Financial Statements NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
19 Transactions with SA Government
SA Government Non-SA Government Total Note 2014 2013 2014 2013 2014 2013 $’000 $’000 $’000 $’000 $’000 $’000 Income Fees and charges 4(a) - - 20 956 19 220 20 956 19 220
Interest 4(b)
Interest on operating account
- - 53 61 53 61
Interest on fixed term investments
- - 720 926 720 926
Other income 4(c)
Recoupment of salaries and oncosts
2 73 - - 2 73
Sundry Income - - 23 25 23 25 Distributions from trusts
359 302 359 302
Gain from disposal of fixed assets
- - 1 - 1 -
Gain from disposal of financial assets
- - - 1 - 1
Unrealised gains on financial assets
- - 1 486 1 235 1 486 1235
Total income 2 73 23 598 21 770 23 600 21 843
SA Government Non-SA Government Total
Note 2014 2013 2014 2013 2014 2013 $’000 $’000 $’000 $’000 $’000 $’000 Supplies and services
Supplies and services
5(e)
Insurance 202 182 - - 202 182 Information technology
560 397 992 955 1 552 1 352
Accommodation and telecommunication
1 743 1 680 30 38 1 773 1 718
Legal expenses 71 79 - - 71 79 Personal service contractors
- - 41 114 41 114
Service contractors
615 631 201 165 816 796
Other supplies and services
122 126 896 891 1 018 1 017
Auditors remuneration
173 168 - - 173 168
Minor works, maintenance and equipment
- - 15 10 15 10
Consultancies - - 61 233 61 233
Total supplies and services
3 486
3 263
2 236
2 406
5 722
5 669
Public Trustee Annual Report 2013–14
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Public Trustee Corporate Financial Statements NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS Financial Assets
Current assets Cash 17 Cash and cash equivalents
1 805 2 387 9 500 9 500 11 305 11 887
Receivables 6
Debtors 11 80 28 21 39 101 Accrued investment income
- - 373 377 373 377
Income tax equivalent due
- 235 - - - 235
Prepayments - - 200 140 200 140 Total Current Assets 1 816 2 702 10 101 10 038 11 917 12 740
Non-current assets Financial assets 7,8 - - 17 419 15 929 17 419 15 929 Total financial assets
1 816
2 702 27 520
25 967 29 336
28 669 Financial Liabilities Payables 11 Trade creditors 425 409 176 661 601 1 070 Income tax equivalents
683 568 - - 683 568
On-costs on employee benefits
269 302 347 326 616 628
Goods and services tax
- - 314 267 314 267
Total financial liabilities
1 377 1 279 837 1 254 2 214 2 533
Public Trustee Annual Report 2013–14
Page 87 of 6
Statement of Trusts being administered Statement of Trusts Being AdministeredAs at 30 June 2014
2014 2013Note $’000 $’000
Trust funds under administration 3Deceased Estates 155 059 156 432 Trusts 119 829 117 079 Administration Matters 38 978 87 024 Court Award Orders 385 965 311 283 Protected Estates 266 684 246 925 Workers Compensation Awards 200 177 Power of Attorney 58 877 60 656 Investors 278 770 260 364
Total funds 1 304 362 1 239 940
Represented byInvestment in Common Funds 1(b), 2
Non current assetsAustralian equities 157 686 157 028 International equities 121 013 129 658 Property Securities 42 079 48 569 Australian fixed interest investments 215 195 217 968 International fixed interest investments 24 726 23 617
560 699 576 840 Current assets
Cash and cash equivalents 5 000 5 110 Australian fixed interest investments 298 748 276 686 Advances to estates 4 894 5 364 Other assets 17 897 12 146
326 539 299 306 Current liabilities
Bank overdraft 64 - Income distribution payable 12 577 9 549 Other liabilities 19 77
12 660 9 626 Net Comon Fund assets 874 578 866 520
Estate assets 1(c)
Non current assetsReal estate 283 699 291 614 Superannuation 84 376 - Personal chattels 18 245 42 287 Equities 21 893 18 598 Fixed interest and cash assets 13 738 17 199 Mortgages 138 176
422 089 369 874 Current assets
Other assets 15 719 12 416
Current liabilitiesOther liabilities 8 024 8 870
Net estate assets 429 784 373 420 Total net assets 1 304 362 1 239 940
Public Trustee Annual Report 2013-14
Page 88 of 138
Public Trustee Trusts Being Administered NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENT 1. Statement of Principal Accounting Policies
(a) Format of the Accounts
The Statement of Trusts Being Administered (the ‘Statement’) and related notes are special purpose financial statements that provide information on the value and nature of trusts being administered. The Statement consolidates all trusts being administered by Public Trustee. Accordingly, no Accounting Standards and other mandatory reporting requirements are applied in the preparation and presentation of this Statement. Public Trustee has prepared the Statement, where appropriate, based on the general principles outlined in Australian Accounting Standards. The Statement of Trusts Being Administered has been prepared using the accrual basis of accounting. Dividend income is recognised on the date that shares are quoted as ex-dividend. Distributions from trusts are recognised on a present entitlement basis.
(b) Basis of valuation of common fund assets and liabilities
For the 2013/2014 reporting period assets for the Australian Shares Common Fund, Overseas Fixed Interest Common Fund, Overseas Shares Common Fund and the Property Common Fund are reported at market value to comply with current accounting standards. Australian Fixed Interest Investments: Are valued at market value based on independently obtained market yields applying at balance date. Advances to Estates: Are carried at their nominal amounts. Public Trustee is authorised by the Public Trustee Act 1995 to advance monies where an estate has insufficient monies to make payments as authorised or required to administer the estate, usually on a short term basis. Funds advanced are a first charge on the estate's property vested under the control of Public Trustee. The interest rate applicable on advances at 30 June 2014 was 2.90% (3.50%). Cash at Bank and Cash Equivalents: Are carried at nominal amounts, translated at prevailing exchange rates where applicable. This asset consists of cash at bank and on hand, as well as other short term, highly liquid investments with original maturities of three months or less. Other assets and other liabilities: Are carried at their nominal amounts.
(c) Basis of valuation for estate assets
Real Estate: For deceased estates, real estate is initially valued as at date of death. In other matters, the initial valuation is at the date Public Trustee is being appointed manager, administrator or new trustee. Public Trustee revalues all South Australian real estate other than accommodation bonds annually. All other real estate is revalued to current value where these values can be ascertained. Such revaluations are determined by reference to valuations established by the South Australian Valuer-General, with a revaluation last being carried out as at 30 June 2014. Accommodation bonds are valued annually at cost less retention amount until the retention terms have expired. Superannuation: During the 2013/2014 reporting period client moneys were moved from self- managed superannuation funds (SMSF's), invested in common funds, to an approved superannuation provider. These moneys were reported as Investments in Common Funds in the 2012/2013 reporting period. A number of direct customer investments in superannuation were also moved to the approved provider. These funds were reported as personal chattels in the 2012/2013 reporting period. The funds are valued daily and are reported at market value as at 30 June 2014. Personal Chattels: For deceased estates, valuation is at date of death; in other matters, valuation is at the date of Public Trustee being appointed manager, administrator or new trustee. In the case of some sundry minor assets, nominal values are used for valuation purposes. Investment by Estates in Common Funds: Valuation of estate investment in common funds is based on the underlying fair value of common funds as at balance date.
Public Trustee Annual Report 2013–14
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Public Trustee Trusts Being Administered NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENT
Other Estate Investments: Investments other than equities are shown at their face value. Valuation is performed at the date of the Public Trustee being appointed manager, administrator or new trustee or at the date of death in the case of deceased estates. Equities are valued at net fair value as at balance date.
2. Operation of the Common Funds
Common Funds managed by Public Trustee have been established pursuant to Section 29 of the Public Trustee Act 1995 or its predecessor legislation. Financial Statements for each common fund operated by Public Trustee are presented within the annual report of Public Trustee.
Investment in Common Funds (with the exception of direct investment in the Cash Common Fund) are by way of notional unit holdings in the common funds. Contributors may invest in the Cash Common Fund or alternately invest in a selection of common funds in proportions determined by one or more of the following standard investment strategies provided by Public Trustee:
Capital Stable Growth Balanced Equities
3 Trust Funds under Administration
Number Value2014 2013 2014 2013
Deceased Estates $’000 $’000 Monies and assets held under the administration of the Public Trustee pursuant to the provisions of the Public Trustee Act 1995 1 299 1 264 155 059 156 432
TrustsMonies and assets held under the administration of the Public Trustee pursuant to the terms of a Will or a Deed of Trust 1 344 1 407 119 829 117 079
Administration MattersMonies paid and assets transferred to the Public Trustee on account of minor beneficiaries pursuant to the Public Trustee Act 1995 371 434 38 978 87 024
Court Award OrdersMonies directed by the Court to be paid to the Public Trustee on behalf of clients and invested and applied by the Public Trustee as the Court directs and monies administered by the Public Trustee under the Aged and Infirm Persons Property Act 1940 790 813 385 965 311 283
Protected EstatesMonies administered by the Public Trustee under the Guardianship and Administration Act 1993 3 252 3 272 266 684 246 925
Workers Compensation AwardsMonies directed by the Court to be paid to the Public Trustee on behalf of widows and minors and invested and applied by the Public Trustee as the Court directs 4 4 200 177
Powers of Attorney
Monies and assets held on behalf of donors who have appointed the Public Trustee to act on their behalf 322 351 58 877 60 656
InvestorsMonies invested in Common Funds pursuant to Section 29 (1) of the Public Trustee Act 1995 by classes of persons approved by the Minister 293 294 278 770 260 364
7 675 7 839 1 304 362 1 239 940
Public Trustee Trusts Being Administered
Public Trustee Annual Report 2013-14
Page 90 of 138
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENT 4 Unclaimed Monies
During the reporting period, amounts totalling $343 000 ($598 000) in respect of estates became/were identified as unclaimed monies. Payment of these amounts to the Consolidated Account pursuant to Section 32 (1) of the Public Trustee Act 1995 is expected to occur in the next financial year.
Public Trustee Annual Report 2013–14
Page 91 of 6
Common Funds Financial Statements 2013–14Cash Common Fund
Statement of Comprehensive Income Notes 2014 2013For the year ended 30 June 2014 $'000 $'000
Investment incomeInterest 2(e) 16 358 19 793 Net (loss) gain on financial assets held at fair value through profit or loss 2(b),3(d) ( 333) 2 369 Other income - 5
Total investment income 16 025 22 167
Expenses Public Trustee management fees 2(f) 4 119 4 180 Legal and advisory expenses 98 112 Other expenses 26 29
Total expenses 4 243 4 321
Net operating profit 11 782 17 846
Financing costs attributable to unitholdersUndistributed income brought forward 1 497 1 966 Distributions to unitholders 2(h),4 (12 369) (15 946) Transfers from (to) net assets to determine distributable income 2(i) 333 (2 369)
Total financing costs attributable to unitholders (10 539) (16 349)
(Increase) in net assets attributable to unitholders (1 243) (1 497)
Total comprehensive income for the year - -
The above Statement of Comprehensive Income should be read in conjunction with the accompanying notes
Cash Common Fund
Statement of Financial Position Notes 2014 2013As at 30 June 2014 $'000 $'000
AssetsCash and cash equivalents 5 5 000 5 110 Advances to estates 4 894 5 364 Financial assets held at fair value through profit or loss 6 403 930 388 172 Other assets 3 742 4 451
Total assets 417 566 403 097
LiabilitiesIncome distribution payable 1 243 1 497 Bank overdraft 5 64 - Funds deposited by other Common Funds 62 655 55 146 Other liabilities 40 49
Total liabilities (excluding net assets attributable to unitholders) 64 002 56 692
Net assets attributable to unitholders - liability 3 353 564 346 405
Represented by:Fair value of outstanding units based on net asset value 353 564 346 405
The above Statement of Financial Position should be read in conjunction with the accompanying notes
Public Trustee Annual Report 2013-14
Page 92 of 138
Cash Common Fund
Statement of Cash Flows Notes 2014 2013For the year ended 30 June 2014 Inflows Inflows
(Outflows) (Outflows)$'000 $'000
Cash flows from operating activitiesCash inflowsInterest received 17 087 20 249 Other Income - - Cash generated from operations 17 087 20 249 Cash outflowsPayments for expenses (4 251) (4 331) Cash used in operations (4 251) (4 331)
Net cash provided by operating activities 10(b) 12 836 15 918
Cash flows from investing activitiesCash inflows
161 367 337 385 Net repayments of advances to estates 470 1 037 Cash generated from investing activities 161 837 338 422 Cash outflowsPurchase of financial assets held at fair value through profit or loss (177 499) (339 114) Cash used in investing activities (177 499) (339 114)
Net cash (used in) investing activities (15 662) ( 692)
Cash flows from financing activitiesCash inflows
7 514 12 136
7 507 (9 642) Cash generated from financing activities 15 021 2 494 Cash outflowsDistributions paid (12 369) (15 946) Cash used in financing activities (12 369) (15 946)
Net cash provided by (used in) financing activities 2 652 (13 452)
Net (decrease) / increase in cash and cash equivalents ( 174) 1 774
Cash and cash equivalents at beginning of the period 5 110 3 336
Cash and cash equivalents at the end of the period 5 4 936 5 110
The above Statement of Cash Flows should be read in conjunction with the accompanying notes
Net proceeds/payments from applications/redemptions from/(to) other Common Funds
Proceeds from the sale of financial assets held at fair value through profit or loss
Net proceeds/payments from applications/redemptions from/(to) unitholders
Public Trustee Annual Report 2013–14
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Short Term Fixed Interest Common Fund
Statement of Comprehensive Income Notes 2014 2013For the year ended 30 June 2014 $'000 $'000
Investment incomeInterest 2(e) 1 879 2 299 Net gain on financial assets held at fair value through profit or loss 2(b),3(d) 57 84 Other Income - 3
Total investment income 1 936 2 386
Expenses Public Trustee management fees 2(f) 336 367 Legal and advisory expenses 8 10
Total expenses 344 377
Net operating profit 1 592 2 009
Financing costs attributable to unitholdersUndistributed Income brought forward 892 1 185 Distributions to unitholders 2(h),4 (1 679) (2 218) Transfers (to) net assets to determine distributable income 2(i) ( 57) ( 84)
Total financing costs attributable to unitholders ( 844) (1 117)
(Increase) in net assets attributable to unitholders ( 748) ( 892)
Total comprehensive income for the year - -
The above Statement of Comprehensive Income should be read in conjunction with the accompanying notes Short Term Fixed Interest Common Fund
Statement of Financial Position Notes 2014 2013As at 30 June 2014 $'000 $'000
AssetsCash and cash equivalents 5 18 649 21 478 Financial assets held at fair value through profit or loss 6 33 178 27 602 Other assets 359 409
Total assets 52 186 49 489
LiabilitiesIncome distribution payable 748 892 Other liabilities 1 2
Total liabilities (excluding net assets attributable to unitholders) 749 894
Net assets attributable to unitholders - liability 3 51 437 48 595
Represented by:Fair value of outstanding units based on net asset value 51 437 48 595
The above Statement of Financial Position should be read in conjunction with the accompanying notes
Public Trustee Annual Report 2013-14
Page 94 of 138
Short Term Fixed Interest Common Fund
Statement of Cash Flows Notes 2014 2013For the year ended 30 June 2014 Inflows Inflows
(Outflows) (Outflows)$'000 $'000
Cash flows from operating activitiesCash inflowsInterest received 2 020 2 480 Cash generated from operations 2 020 2 480 Cash outflowsPayments for expenses ( 345) ( 376) Cash used in operations ( 345) ( 376)
Net cash provided by operating activities 10(b) 1 675 2 104
Cash flows from investing activitiesCash inflows
18 506 21 000 Cash generated from investing activities 18 506 21 000 Cash outflowsPurchase of financial assets held at fair value through profit or loss (24 117) (14 378) Cash used in investing activities (24 117) (14 378)
Net cash (used in) provided by investing activities (5 611) 6 622
Cash flows from financing activitiesCash inflowsProceeds from applications by unitholders 8 795 3 752 Cash generated from financing activities 8 795 3 752 Cash outflowsPayments for redemptions by unitholders (6 010) (4 121) Distributions paid (1 678) (2 218) Cash used in financing activities (7 688) (6 339)
Net cash provided by (used in) financing activities 1 107 (2 587)
Net (decrease) / increase in cash and cash equivalents (2 829) 6 139
Cash and cash equivalents at beginning of the period 21 478 15 339
Cash and cash equivalents at the end of the period 5 18 649 21 478
The above Statement of Cash Flows should be read in conjunction with the accompanying notes
Proceeds from the sale of financial assets held at fair value through profit or loss
Public Trustee Annual Report 2013–14
Page 95 of 6
Long Term Fixed Interest Common Fund
Statement of Comprehensive Income Notes 2014 2013For the year ended 30 June 2014 $'000 $'000
Investment incomeInterest 2(e) 3 896 4 428
2(b),3(d) 1 545 ( 45) Other Income - 3
Total investment income 5 441 4 386
Expenses Public Trustee management fees 2(f) 803 772 Legal and advisory expenses 19 20
Total expenses 822 792
Net operating profit 4 619 3 594
Financing costs attributable to unitholdersUndistributed Income brought forward 1 739 2 053 Distributions to unitholders 2(h),4 (3 328) (3 953) Transfers (to) from net assets to determine distributable income 2(i) (1 308) 45
Total financing costs attributable to unitholders (2 897) (1 855)
(Increase) in net assets attributable to unitholders (1 722) (1 739)
Total comprehensive income for the year - -
The above Statement of Comprehensive Income should be read in conjunction with the accompanying notes
Net gain (loss) on financial assets held at fair value through profit or loss
Long Term Fixed Interest Common Fund
Statement of Financial Position Notes 2014 2013As at 30 June 2014 $'000 $'000
AssetsCash and cash equivalents 5 17 239 10 849 Financial assets held at fair value through profit or loss 6 76 834 78 880 Other assets 887 938
Total assets 94 960 90 667
LiabilitiesIncome Distribution Payable 1 722 1 739 Other liabilities - 5
Total liabilities (excluding net assets attributable to unitholders) 1 722 1 744
Net assets attributable to unitholders - liability 3 93 238 88 923
Represented by:Fair value of outstanding units based on net asset value 93 238 88 923
The above Statement of Financial Position should be read in conjunction with the accompanying notes
Public Trustee Annual Report 2013-14
Page 96 of 138
Long Term Fixed Interest Common Fund
Statement of Cash Flows Notes 2014 2013For the year ended 30 June 2014 Inflows Inflows
(Outflows) (Outflows)$'000 $'000
Cash flows from operating activitiesCash inflowsInterest received 4 092 4 507 Cash generated from operations 4 092 4 507 Cash outflowsPayments for expenses ( 823) ( 792) Cash used in operations ( 823) ( 792)
Net cash provided by operating activities 10(b) 3 269 3 715
Cash flows from investing activitiesCash inflows
25 394 13 000 Cash generated from investing activities 25 394 13 000 Cash outflowsPurchase of financial assets held at fair value through profit or loss (21 952) (26 075) Cash used in investing activities (21 952) (26 075)
Net cash provided by (used in) investing activities 3 442 (13 075)
Cash flows from financing activitiesCash inflowsProceeds from applications by unitholders 15 937 6 934 Cash generated from financing activities 15 937 6 934 Cash outflowsPayments for redemptions by unitholders (12 929) (6 900) Distributions paid (3 329) (3 953) Cash used in financing activities (16 258) (10 853)
Net cash (used in) financing activities ( 321) (3 919)
Net increase / (decrease) in cash and cash equivalents 6 390 (13 279)
Cash and cash equivalents at beginning of the period 10 849 24 128
Cash and cash equivalents at the end of the period 5 17 239 10 849
The above Statement of Cash Flows should be read in conjunction with the accompanying notes
Proceeds from the sale of financial assets held at fair value through profit or loss
Public Trustee Annual Report 2013–14
Page 97 of 6
Overseas Fixed Interest Common Fund
Statement of Comprehensive Income Notes 2014 2013For the year ended 30 June 2014 $'000 $'000
Investment incomeTrust Distributions 644 1 160 Interest 2(e) 300 425
2(b),3(d) 959 ( 236) Other Income 150 149
Total investment income 2 053 1 498
Expenses Public Trustee management fees 2(f) 255 264 Legal and advisory expenses 6 7
Total expenses 261 271
Net operating profit 1 792 1 227
Financing costs attributable to unitholdersUndistributed Income brought forward 839 1 434 Distributions to unitholders 2(h),4 (1 397) (2 058) Transfers (to) from net assets to determine distributable income 2(i) ( 959) 236
Total Financing costs attributable to unitholders (1 517) ( 388)
(Increase) in net assets attributable to unitholders ( 275) ( 839)
Total comprehensive income for the year - -
The above Statement of Comprehensive Income should be read in conjunction with the accompanying notes
Net gain (loss) on financial assets held at fair value through profit or loss
Overseas Fixed Interest Common Fund
Statement of Financial Position Notes 2014 2013As at 30 June 2014 $'000 $'000
AssetsCash and cash equivalents 5 13 668 10 488 Financial assets held at fair value through profit or loss 6 24 726 23 617 Other assets 33 609
Total assets 38 427 34 714
LiabilitiesIncome distribution payable 275 839 Other liabilities 2 3
Total liabilities (excluding net assets attributable to unitholders) 277 842
Net assets attributable to unitholders - liability 3 38 150 33 872
Represented by:Fair value of outstanding units based on net asset value 38 150 33 872
The above Statement of Financial Position should be read in conjunction with the accompanying notes
Public Trustee Annual Report 2013-14
Page 98 of 138
Overseas Fixed Interest Common Fund
Statement of Cash Flows Notes 2014 2013For the year ended 30 June 2014 Inflows Inflows
(Outflows) (Outflows)$'000 $'000
Cash flows from operating activitiesCash inflowsTrust distributions received 1 222 1 757 Interest received 297 434 Other income - - Cash generated from operations 1 519 2 191 Cash outflowsPayments for expenses ( 262) ( 271) Cash used in operations ( 262) ( 271)
Net cash provided by operating activities 10(b) 1 257 1 920
Cash flows from investing activitiesCash inflows
- - Cash generated from investing activities - - Cash outflowsPurchase of financial assets held at fair value through profit or loss - - Cash used in investing activities - -
Net cash (used in) / provided by investing activities - -
Cash flows from financing activitiesCash inflowsProceeds from applications by unitholders 8 125 2 772 Cash generated from financing activities 8 125 2 772 Cash outflowsPayments for redemptions by unitholders (4 805) (2 785) Distributions paid (1 397) (2 058) Cash used in financing activities (6 202) (4 843)
Net cash provided by (used in) financing activities 1 923 (2 071)
Net increase / (decrease) in cash and cash equivalents 3 180 ( 151)
Cash and cash equivalents at beginning of the period 10 488 10 639
Cash and cash equivalents at the end of the period 5 13 668 10 488
The above Statement of Cash Flows should be read in conjunction with the accompanying notes
Proceeds from the sale of financial assets held at fair value through profit or loss
Public Trustee Annual Report 2013–14
Page 99 of 6
Australian Shares Common Fund
Statement of Comprehensive Income Notes 2014 2013For the year ended 30 June 2014 $'000 $'000
Investment incomeTrust Distributions 8 410 5 812 Interest 2(e) 144 351
2(b),3(d) 21 150 20 746 Other Income 508 1 687
Total investment income 30 212 28 596
Expenses Public Trustee management fees 2(f) 1 713 1 607 Legal and advisory expenses 41 43
Total expenses 1 754 1 650
Net operating profit (loss) 28 458 26 946
Financing costs attributable to unitholdersUndistributed Income brought forward 3 283 2 952 Distributions to unitholders 2(h),4 (6 124) (5 869) Transfers (to) net assets to determine distributable income 2(i) (19 310) (20 746)
Total financing costs attributable to unitholders (22 151) (23 663)
(Increase) in net assets attributable to unitholders (6 307) (3 283)
Total comprehensive income for the year - -
The above Statement of Comprehensive Income should be read in conjunction with the accompanying notes
Net gain on financial assets held at fair value through profit or loss
Australian Shares Common Fund
Statement of Financial Position Notes 2014 2013As at 30 June 2014 $'000 $'000
AssetsCash and cash equivalents 5 8 936 6 454 Financial assets held at fair value through profit or loss 6 157 686 157 028 Other assets 5 598 2 864
Total assets 172 220 166 346
LiabilitiesIncome Distribution Payable 6 307 3 283 Other liabilities - 10
Total liabilities (excluding net assets attributable to unitholders) 6 307 3 293
Net assets attributable to unitholders - liability 3 165 913 163 053
Represented by:Fair value of outstanding units based on net asset value 165 913 163 053
The above Statement of Financial Position should be read in conjunction with the accompanying notes
Public Trustee Annual Report 2013-14
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Australian Shares Common Fund
Statement of Cash Flows Notes 2014 2013For the year ended 30 June 2014 Inflows Inflows
(Outflows) (Outflows)$'000 $'000
Cash flows from operating activitiesCash inflowsTrust distributions received 5 670 5 729 Interest received 142 364 Other income received - - Cash generated from operations 5 812 6 093 Cash outflowsPayments for expenses (1 755) (1 651) Cash used in operations (1 755) (1 651)
Net cash provided by operating activities 10(b) 4 057 4 442
Cash flows from investing activitiesCash inflows
21 000 - Cash generated from investing activities 21 000 - Cash outflowsPurchase of financial assets held at fair value through profit or loss - - Cash used in investing activities - -
Net cash provided by investing activities 21 000 -
Cash flows from financing activitiesCash inflowsProceeds from applications by unitholders 16 369 9 984 Cash generated from financing activities 16 369 9 984 Cash outflowsPayments for redemptions by unitholders (32 820) (10 539) Distributions paid (6 124) (5 869) Cash used in financing activities (38 944) (16 408)
Net cash (used in) financing activities (22 575) (6 424)
Net increase / (decrease) in cash and cash equivalents 2 482 (1 982)
Cash and cash equivalents at beginning of the period 6 454 8 436
Cash and cash equivalents at the end of the period 5 8 936 6 454
The above Statement of Cash Flows should be read in conjunction with the accompanying notes
Proceeds from the sale of financial assets held at fair value through profit or loss
Public Trustee Annual Report 2013–14
Page 101 of 6
Overseas Shares Common Fund
Statement of Comprehensive Income Notes 2014 2013For the year ended 30 June 2014 $'000 $'000
Investment incomeTrust Distributions 3 836 2 374 Interest 2(e) 66 228
2(b),3(d) 19 474 31 203 Other Income 381 262
Total investment income 23 757 34 067
Expenses Public Trustee management fees 2(f) 1 376 1 149 Legal and advisory expenses 33 31
Total Expenses 1 409 1 180
Net operating profit 22 348 32 887
Financing costs attributable to unitholdersUndistributed Income brought forward 662 1 846 Distributions to unitholders 2(h),4 ( 662) (1 962) Transfers (to) net assets to determine distributable income 2(i) (22 143) (32 109)
Total financing costs attributable to unitholders (22 143) (32 225)
(Increase) in net assets attributable to unitholders ( 205) ( 662)
Total comprehensive income for the year - -
The above Statement of Comprehensive Income should be read in conjunction with the accompanying notes
Net gain on financial assets held at fair value through profit or loss
Overseas Shares Common Fund
Statement of Financial Position Notes 2014 2013As at 30 June 2014 $'000 $'000
AssetsCash and cash equivalents 5 2 770 4 350 Financial assets held at fair value through profit or loss 6 121 013 129 658 Other assets 3 506 1 868
Total assets 127 289 135 876
LiabilitiesIncome distribution payable 205 662 Other liabilities - 7
Total liabilities (excluding net assets attributable to unitholders) 205 669
Net assets attributable to unitholders - liability 3 127 084 135 207
Represented by:Fair value of outstanding units based on net asset value 127 084 135 207
The above Statement of Financial Position should be read in conjunction with the accompanying notes
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Overseas Shares Common Fund
Statement of Cash Flows Notes 2014 2013For the year ended 30 June 2014 Inflows Inflows
(Outflows) (Outflows)$'000 $'000
Cash flows from operating activitiesCash inflowsTrust distributions received 2 185 2 829 Interest received 72 233 Cash generated from operations 2 257 3 062 Cash outflowsPayments for expenses (1 409) (1 181) Cash used in operations (1 409) (1 181)
Net cash provided by operating activities 10(b) 848 1 881
Cash flows from investing activitiesCash inflows
28 500 - Cash generated from investing activities 28 500 - Cash outflowsPurchase of financial assets held at fair value through profit or loss - - Cash used in investing activities - -
Net cash provided by investing activities 28 500 -
Cash flows from financing activitiesCash inflowsProceeds from applications by unitholders 10 249 6 856 Cash generated from financing activities 10 249 6 856 Cash outflowsPayments for redemptions by unitholders (40 515) (7 411) Distributions paid ( 662) (1 962) Cash used in financing activities (41 177) (9 373)
Net cash (used in) financing activities (30 928) (2 517)
Net (decrease) in cash and cash equivalents (1 580) ( 636)
Cash and cash equivalents at beginning of the period 4 350 4 986
Cash and cash equivalents at the end of the period 5 2 770 4 350
The above Statement of Cash Flows should be read in conjunction with the accompanying notes
Proceeds from the sale of financial assets held at fair value through profit or loss
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Property Common Fund (formerly Listed Property Securities Common Fund)
Statement of Comprehensive Income Notes 2014 2013For the year ended 30 June 2014 $'000 $'000
Investment incomeTrust Distributions 4 360 2 804 Interest 2(e) 33 47 Net gain on financial assets held at fair value through profit or loss 2(b),3(d) 3 382 5 619 Other Income 128 146
Total investment income 7 903 8 616
Expenses Public Trustee management fees 2(f) 494 498 Legal and advisory expenses 12 13
Total expenses 506 511
Net operating profit 7 397 8 105
Financing costs attributable to unitholdersUndistributed Income brought forward 637 1 214 Distributions to unitholders 2(h),4 ( 956) (1 724) Transfers (to) net assets to determine distributable income 2(i) (5 000) (6 958)
Total Financing costs attributable to unitholders (5 319) (7 468)
(Increase) in net assets attributable to unitholders (2 078) ( 637)
Total comprehensive income for the year - -
The above Statement of Comprehensive Income should be read in conjunction with the accompanying notes
Property Common Fund (formerly Listed Property Securities Common Fund)
Statement of Financial Position Notes 2014 2013As at 30 June 2014 $'000 $'000
AssetsCash and cash equivalents 5 1 393 1 527 Financial assets held at fair value through profit or loss 6 42 079 48 569 Other assets 3 774 1 007
Total assets 47 246 51 103
LiabilitiesIncome distribution payable 2 078 637 Other liabilities - 3
Total liabilities (excluding net assets attributable to unitholders) 2 078 640
Net assets attributable to unitholders - liability 3 45 168 50 463
Represented by:Fair value of outstanding units based on net asset value 45 168 50 463
The above Statement of Financial Position should be read in conjunction with the accompanying notes
Public Trustee Annual Report 2013-14
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Property Common Fund (formerly Listed Property Securities Common Fund)
Statement of Cash Flows Notes 2014 2013For the year ended 30 June 2014 Inflows Inflows
(Outflows) (Outflows)$'000 $'000
Cash flows from operating activitiesCash inflowsTrust distributions received 1 589 2 619 Interest received 34 46 Other Income - 8 Cash generated from operations 1 623 2 673 Cash outflowsPayments for expenses ( 506) ( 510) Cash used in operations ( 506) ( 510)
Net cash provided by operating activities 10(b) 1 117 2 163
Cash flows from investing activitiesCash inflows
10 000 26 155 Cash generated from investing activities 10 000 26 155 Cash outflowsPurchase of financial assets held at fair value through profit or loss - (26 000) Cash used in investing activities - (26 000)
Net cash provided by investing activities 10 000 155
Cash flows from financing activitiesCash inflowsProceeds from applications by unitholders 3 364 3 292 Cash generated from financing activities 3 364 3 292 Cash outflowsPayments for redemptions by unitholders (13 659) (3 620) Distributions paid ( 956) (1 724) Cash used in financing activities (14 615) (5 344)
Net cash (used in) financing activities (11 251) (2 052)
Net (decrease) / increase in cash and cash equivalents ( 134) 266
Cash and cash equivalents at beginning of the period 1 527 1 261
Cash and cash equivalents at the end of the period 5 1 393 1 527
The above Statement of Cash Flows should be read in conjunction with the accompanying notes
Proceeds from the sale of financial assets held at fair value through profit or loss
Public Trustee Common Funds
Public Trustee Annual Report 2013–14
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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 1. General information
The Common Funds have been established pursuant to the Public Trustee Act 1995 or its predecessor legislation. The following Common Funds were active for the whole of the current and comparative reporting periods:
Cash Common Fund; Short Term Fixed Interest Common Fund; Long Term Fixed Interest Common Fund; Australian Shares Common Fund; Overseas Fixed Interest Common Fund; Overseas Shares Common Fund; and Property Common Fund.
The Inflation Linked Investments Common Fund was dormant throughout 2013–14, has nil assets and liabilities and has not been reported. Investment in Common Funds (with the exception of direct investment in the Cash Common Fund) is by way of notional unit holdings in the Common Funds. Unitholders may invest in the Cash Common Fund or alternately invest in a selection of Common Funds in proportions determined by one or more of the following standard investment strategies provided by Public Trustee:
Capital Stable Growth Balanced Equities
Management of Common Fund investments is undertaken by Public Trustee. An Investment Advisory Committee consisting of senior Public Trustee personnel, with attendance by external investment advisors, assists the Public Trustee in ensuring a sound and prudent system for investing client funds. Australian and International Equity investments, Property investments together with Overseas Fixed Interest investments are made using Australian domiciled pooled funds. During the reporting period the Property Common Fund (formerly the Listed Property Securities Common Fund) introduced unlisted property and infrastructure as authorised investments.
2. Summary of significant accounting policies
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all years presented, unless otherwise stated.
(a) Basis of accounting
Statement of Compliance The Public Trustee Common Funds financial statements are general purpose financial statements and have been prepared in accordance with relevant Australian Accounting Standards and comply with Treasurer’s Instructions issued pursuant to the provisions of the Public Finance and Audit Act 1987.
Basis of Preparation The Public Trustee Common Funds financial statements have been prepared on the basis of fair value measurement of assets and liabilities except where otherwise stated. The statements have also been prepared on the basis that all funds are distributable to unitholders resulting in zero residual equity. On this basis, the Statement of Changes in Equity has not been included for reporting purposes as the changes in equity is zero.
(b) Financial instruments
(i) Classification
The Funds’ investments are classified as at fair value through profit or loss.
These include financial assets that are not held for trading purposes and which may be sold. These are investments in exchange traded debt and equity instruments, unlisted trusts, unlisted equity instruments and commercial paper. Loans and receivables/payables comprise amounts due to or from the Common Funds.
Public Trustee Common Funds
Public Trustee Annual Report 2013-14
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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 2. Summary of significant accounting policies (continued)
(ii) Recognition
The Fund recognises financial assets and financial liabilities on the date it becomes party to the contractual agreement (trade date) and recognises changes in fair value of the financial assets or financial liabilities from this date.
(iii) Measurement
(a) Financial Assets held at fair value through the profit or loss
Financial assets and liabilities are held at fair value through the profit or loss. Investments in pooled funds are recorded at fair value as reported by the managers of such funds. Public Trustee has determined the fair value of financial assets to be the market value of these investments at balance date. Accounting Standard AASB 7 Financial Instruments: Disclosures requires disclosure of the measurement methodology used to value financial instruments. Public Trustee invests though fund managers and utilises pricing data provided by those managers which is indirectly derived from the pricing of the underlying securities. Consistent with the definitions in AASB 7 this methodology is classified as level 2 of the fair value hierarchy.
(b) Loans and receivables
Loan assets are measured initially at fair value and subsequently amortised using the effective interest rate method, less impairment losses if any. Such assets are reviewed at each Statement of Financial Position date to determine whether there is objective evidence of impairment for example when there has been a significant or prolonged decline in the fair value below cost. If any such indication of impairment exists, an impairment loss is recognised in the Statement of Comprehensive Income as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the original effective interest rate. If in a subsequent period the amount of an impairment loss recognised on a financial asset carried at amortised cost decreases and the decrease can be linked objectively to an event occurring after the write-down, the write-down is reversed through the Statement of Comprehensive Income.
(c) Net assets attributable to unitholders
Units are redeemable at the unitholders' option and are therefore classified as financial liabilities. The units can be returned into the Common Funds at any time for cash equal to a proportionate share of the Common Funds’ net asset values. The fair value of redeemable units is measured at the redemption amount that is payable (based on the redemption unit price) at the Statement of Financial Position date if unitholders exercise their right to return the units back to the Common Funds. For financial reporting purposes and compliance with Australian Accounting Standards assets are recorded at net asset value.
(d) Cash and cash equivalents
For Statement of Cash Flows presentation purposes, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short term highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts, where applicable, are shown within liabilities on the Statement of Financial Position.
For all Common Funds (other than Cash Common Fund) cash equivalents include the Funds’ investments in and borrowings from the Cash Common Fund.
Payments and receipts relating to the purchase and sale of investment securities are classified as investing cash flows because the core activity of the Public Trustee is the administration of Trustee Services.
Public Trustee Common Funds
Public Trustee Annual Report 2013–14
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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 2. Summary of significant accounting policies (continued)
(e) Investment income
Interest income and expenses are recognised in the Statement of Comprehensive Income for all debt instruments using the effective interest method. Other changes in fair value for such instruments are recorded in accordance with the policies described in note 2(b).
The effective interest method is a method of calculating the amortised cost of a financial asset or financial liability and of allocating the interest income or interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts throughout the expected life of the financial instrument, or a shorter period where appropriate, to the net carrying amount of the financial asset or liability. When calculating the effective interest rate, the Fund estimates cash flows considering all contractual terms of the financial instrument (for example, prepayment options) but does not consider future credit losses. The calculation includes all fees between the parties to the contract that are an integral part of the effective interest rate, transaction costs and all other premiums or discounts.
Dividend income is recognised on the ex-dividend date with any related foreign withholding tax recorded as an expense. Dividends declared on securities sold short are recorded as a dividend expense on the ex-dividend date.
Trust distributions are recognised when the right to receive payment is established.
(f) Expenses
All expenses, including management fees, are recognised in the Statement of Comprehensive Income on an accrual basis.
Management fees are charged against each Common Fund at a rate of one-twelfth of one percent of the value of the fund as at the first business day of each month as authorised by the Public Trustee Act 1995.
(g) Income tax
Under current legislation, the Common Funds are not subject to income tax provided the taxable income of the Fund is fully distributed either by way of cash or reinvestment (i.e. unitholders are presently entitled to the income of the Fund).
Financial instruments held at fair value may include unrealised capital gains. Should such a gain be realised, the portion of the gain that is subject to capital gains tax will be distributed so that the Fund is not subject to capital gains tax.
Realised capital losses are not distributed to unitholders but are retained in the Fund to be offset against any realised capital gains. If realised capital gains exceed realised capital losses, the excess is distributed to unitholders.
The benefits of imputation credits and foreign tax paid are passed on to unitholders.
The Fund currently incurs withholding tax imposed by certain countries on investment income. Such income is recorded net of withholding tax in the Statement of Comprehensive Income.
(h) Distributions
Public Trustee distributes Common Fund income and capital based on the financial results at 31 December and 30 June.
Public Trustee recognises Common Fund distributions to client accounts on the date they are paid by Public Trustee. Public Trustee charges clients with income and capital commission on the date the common funds makes a distribution to client accounts and interest earned is credited when received.
Public Trustee Annual Report 2013-14
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Public Trustee Common Funds NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 2. Summary of significant accounting policies (continued)
The items above are accrued as appropriate in the statutory accounts under Australian Accounting Standards and the distributions are recognised in the Statement of Comprehensive Income as finance costs attributable to unitholders.
(i) Transfers (to)/from net assets to determine distributable income
Non-distributable income is included in net assets attributable to unitholders and may consist of unrealised changes in the net fair value of financial instruments held at fair value through profit or loss, accrued income not yet assessable, expenses provided or accrued for which are not yet deductible, and net capital losses. Net capital gains on the realisation of any financial instruments and accrued income not yet assessable will be included in the determination of distributable income in the same year in which it becomes assessable for tax. Movements in net assets attributable to unitholders are recognised in the Statement of Comprehensive Income as financing costs.
(j) Foreign currency translation
i) Functional and presentation currency
Items included in the Common Funds’ financial statements are measured using the currency of the primary economic environment in which it operates (the “functional currency”). This is the Australian dollar, which reflects the currency of the economy in which the Common Funds compete for funds and is regulated. The Australian dollar is also the Fund’s presentation currency.
ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translations at year-end exchange rates, of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of Comprehensive Income. The Funds do not isolate that portion of gains or losses on security financial instruments which is due to changes in foreign exchange rates from that which is due to changes in the market price of securities. Such fluctuations are included with the net gains or losses on financial instruments at fair value through profit or loss.
(k) Receivables
Receivables may include amounts for dividends, interest and trust distributions. Dividends and trust distributions are accrued when the right to receive payment is established. Interest is accrued at the end of each reporting period from the time of last payment using the effective interest rate method. Amounts are generally received within 30 days of being recorded as receivables.
(l) Payables
Payables include liabilities and accrued expenses owing by the Funds which are unpaid as at balance date.
The distribution amount payable to unitholders as at the end of each reporting period is recognised separately on the Statement of Financial Position as unitholders are presently entitled to the distributable income as at 30 June 2014 under the Trust Deed.
(m) Applications and redemptions
Applications received for units in the Common Funds are recorded net of any entry fees payable prior to the issue of units in the Fund. Redemptions from the Fund are recorded gross of any exit fees payable after the cancellation of units redeemed.
(n) Goods and services tax (GST)
The Common Funds are registered entities under the Goods and Services Tax (GST) legislation. Investments in Public Trustee Common Funds are classified as input taxed financial supplies and no GST is charged on such supplies. The GST incurred on the costs of various services provided to the Common
Public Trustee Annual Report 2013–14
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Public Trustee Common Funds NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 2. Summary of significant accounting policies (continued)
Funds by third parties such as management fees have been passed onto the Common Funds. The Common Funds qualify for Reduced Input Tax Credits (RITC) at a rate of 75% hence investment management fees and other expenses have been recognised in the Statement of Comprehensive Income net of the amount of GST recoverable from the Australian Taxation Office (ATO). Accounts payable are inclusive of GST. The net amount of GST recoverable from the ATO is included in receivables in the Statement of Financial Position.
(o) Use of estimates
The Common Funds financial statements include estimates and assumptions that affect the reported amounts of assets and liabilities within the financial year. Estimates are continually evaluated and based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
(p) New accounting standards and interpretations
There are no new accounting standards and interpretations that have been identified that will have a material impact on the Common Funds’ financial statements for the 30 June 2014 reporting period.
(q) Rounding of amounts
All the amounts in the financial statements have been rounded to the nearest thousand dollars (‘000).
3. Net assets attributable to unitholders
Movements in number of units and net assets attributable to unitholders during the year were as follows:
Each unit represents a right to an individual share in the Fund and does not extend to a right to the underlying assets of the Fund. There are no separate classes of units and each unit has the same rights attaching to it as all other units of the Fund.
(a) Common Fund unit prices2014 2013
Common Fund unit prices Purchase Redemption Purchase Redemption at 30 June Price Price Price Price
Short Term Fixed Interest $1.0137 $1.0107 $1.0122 $1.0092Long Term Fixed Interest $1.0614 $1.0582 $1.0458 $1.0426Overseas Fixed Interest $0.8680 $0.8659 $0.8442 $0.8422Australian Shares $1.6871 $1.6777 $1.5035 $1.4951Overseas Shares $1.2537 $1.2470 $1.0620 $1.0563Property (formerly Listed Property Securities) $1.0330 $1.0268 $0.9292 $0.9237
Public Trustee Annual Report 2013-14
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Public Trustee Common Funds NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 3. Net assets attributable to unitholders (continued)
(b) Movements in units
Common Fund
2014 2013 2014 2013 2014 2013No. of No. of No. of No. of No. of No. ofunits units units units units units000's 000's 000's 000's 000's 000's
Opening balance 48 081 48 456 85 159 85 142 40 181 40 197 Applications 8 690 3 705 15 205 6 585 9 516 3 173 Redemptions (5 955) (4 080) (12 387) (6 568) (5 674) (3 189) Closing balance 50 816 48 081 87 977 85 159 44 023 40 181
Common Fund
2014 2013 2014 2013 2014 2013No. of No. of No. of No. of No. of No. ofunits units units units units units000's 000's 000's 000's 000's 000's
Opening balance 108 764 109 002 127 756 128 144 54 514 54 800 Applications 9 546 6 831 8 552 7 738 3 407 3 792 Redemptions (19 688) (7 069) (34 590) (8 126) (14 021) (4 078) Closing balance 98 622 108 764 101 718 127 756 43 900 54 514
Property (formerly Listed Property Securities)
Overseas Fixed InterestLong Term Fixed InterestShort Term Fixed Interest
Australian Shares Overseas Shares
Public Trustee Annual Report 2013–14
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Public Trustee Common Funds NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
1 A net movement in net assets attributable to unitholders funds is reported for the Cash Common Fund for
2013. For 2014 and future periods applications and redemptions have been reported separately. This fund is the primary working account for trust administration operations. Movements in net assets attributable to unitholders are typically high volume, low value transactions.
3. Net assets attributable to unitholders (continued)
(c) Movements in funds employed
Common Fund
2014 2013 2014 2013 2014 2013 2014 2013$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Opening balance 346 405 332 032 48 595 48 879 88 923 88 933 33 872 34 122 Applications 6 302 12 005 8 795 3 752 15 937 6 935 8 124 2 771 Redemptions 1 (3 915) - (6 010) (4 120) (12 930) (6 900) (4 805) (2 785) Increase/(decrease) in net assets attributable to unitholders 4 772 2 368 57 84 1 308 ( 45) 959 ( 236) Closing balance 353 564 346 405 51 437 48 595 93 238 88 923 38 150 33 872
Common Fund
2014 2013 2014 2013 2014 2013$'000 $'000 $'000 $'000 $'000 $'000
Opening balance 163 053 142 863 135 207 103 653 50 463 43 833 Applications 16 369 9 983 10 249 6 857 3 364 3 292 Redemptions (32 819) (10 539) (40 515) (7 412) (13 659) (3 620) Increase/(decrease) in net assets attributable to unitholders 19 310 20 746 22 143 32 109 5 000 6 958 Closing balance 165 913 163 053 127 084 135 207 45 168 50 463
Overseas Fixed Interest
Australian Shares Overseas Shares Property (formerly
Listed Property Securities)
Cash Short Term Fixed Interest
Long Term Fixed Interest
Public Trustee Annual Report 2013-14
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Public Trustee Common Funds NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS (d) Net realised and unrealised gains (losses) on financial assets
Common Fund 2014 2013 2014 2013$'000 $'000 $'000 $'000
Cash ( 285) 2 360 (48) 9 Short Term Fixed Interest 92 129 (35) (45) Long Term Fixed Interest 1 616 ( 29) (71) (16) Overseas Fixed Interest 959 ( 236) - - Australian Shares 18 759 20 746 2,391 - Overseas Shares 16 720 31 203 2,754 - Property (formerly Listed Property Securities) 2 808 4 139 574 1 480
40 669 58 312 5 565 1 428
Net Unrealised Gains (Losses)
Net Realised Gains (Losses)
Public Trustee Annual Report 2013–14
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Public Trustee Common Funds NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 4. Distributions to unitholders
Timing of distributionsThe distributions, including cents per unit (CPU), were paid/payable as follows:
Cash Common Fund2014 2014 2013 2013$'000 CPU $'000 CPU
Distributions paid 12 369 0.0352 15 946 0.0464 Undistributable income brought forward (1 497) - (1 966) - Distributions payable 1 243 - 1 497 -
12 115 15 477
Short Term Fixed Interest Common Fund2014 2014 2013 2013$'000 CPU $'000 CPU
Distributions paid 1 679 0.0330 2 218 0.0461 Undistributable income brought forward ( 892) - (1 185) - Distributions payable 748 - 892 -
1 535 1 925
Long Term Fixed Interest Common Fund2014 2014 2013 2013$'000 CPU $'000 CPU
Distributions paid 3 328 0.0378 3 953 0.0464 Undistributable income brought forward (1 739) - (2 053) - Distributions payable 1 722 - 1 739 -
3 311 3 639
Overseas Fixed Interest Common Fund2014 2014 2013 2013$'000 CPU $'000 CPU
Distributions paid 1 397 0.0317 2 058 0.0512 Undistributable income brought forward ( 839) - (1 434) - Distributions payable 275 - 839 -
833 1 463
Australian Shares Common Fund2014 2014 2013 2013$'000 CPU $'000 CPU
Distributions paid 6 124 0.0621 5 869 0.0540 Undistributable income brought forward (3 283) - (2 952) - Distributions payable 6 307 - 3 283 -
9 148 6 200
Public Trustee Annual Report 2013-14
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Public Trustee Common Funds NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 4. Distributions to unitholders (continued)
Overseas Shares Common Fund2014 2014 2013 2013$'000 CPU $'000 CPU
Distributions paid 662 0.0065 1 962 0.0154 Undistributable income brought forward ( 662) - (1 846) - Distributions payable 205 - 662 -
205 778
Property Common Fund (formerly Listed Property Securities Common Fund)2014 2014 2013 2013$'000 CPU $'000 CPU
Distributions paid 956 0.0218 1 724 0.0316 Undistributable income brought forward ( 637) - (1 214) - Distributions payable 2 078 - 637 -
2 397 1 147
In accordance with the Public Trustee Act 1995, investors received a proportionate distribution of net income depending on the number of days units were held. Included in the distributions at 30 June 2014 were the following net realised capital gains which were distributed to unitholders based on the number of units held as at 30 June 2014: Common Fund Capital Distributions Paid 2014 2014 2013 2013
$'000 CPU $'000 CPULong Term Fixed Interest 210 0.0024 - - Australian Shares 5 913 0.0600 1 112 0.0102 Property 1 466 0.0334 - -
7 589 1 112
Public Trustee Annual Report 2013–14
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Public Trustee Common Funds NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 5. Cash and cash equivalents
Cash Common Fund 2014 2013$'000 $'000
Cash at bank - 110 Money market instruments 5 000 5 000 Bank overdraft ( 64) -
4 936 5 110
Short Term Fixed Interest Common Fund 2014 2013$'000 $'000
Deposits in Cash Common Fund 18 649 21 478 18 649 21 478
Long Term Fixed Interest Common Fund 2014 2013$'000 $'000
Deposits in Cash Common Fund 17 239 10 849 17 239 10 849
Australian Shares Common Fund 2014 2013$'000 $'000
Deposits in Cash Common Fund 8 936 6 454 8 936 6 454
Overseas Fixed Interest Common Fund 2014 2013$'000 $'000
Deposits in Cash Common Fund 13 668 10 488 13 668 10 488
Overseas Shares Common Fund 2014 2013$'000 $'000
Deposits in Cash Common Fund 2 770 4 350 2 770 4 350
Property Common Fund (formerly Listed Property 2014 2013Securities Common Fund) $'000 $'000
Deposits in Cash Common Fund 1 393 1 527 1 393 1 527
Public Trustee Annual Report 2013-14
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Public Trustee Common Funds NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 5. Cash and Cash Equivalents (continued)
(a) Cash at bank and on hand
The cash deposit is held with a financial institution and is interest bearing at 2.70% (2013: 2.61%) per annum as at 30 June 2014 available at call. During 2013/2014 Public Trustee changed banking institutions from Westpac Banking Corporation (WBC) to Commonwealth Bank of Australia (CBA) as part of the whole of Government banking strategy. The WBC account remains open to finalise a small amount of outstanding cheques. The target closure date is 30 September 2014. The CBA cash rate negotiated is the Reserve Bank target rate plus 20 basis points.
(b) Bank overdraft
The reported bank overdraft held as at 30 June 2014 ($0.064 million) is a total of the bank balance less unpresented cheques and transaction timing differences. The actual balance of the bank accounts as at 30 June 2014 was $4.701 million. Unpresented cheques amounting to $4.634 million and minor unallocated customer transactions account for the reported deficit. There was no bank overdraft held as at 30 June 2013. Public Trustee actively manages the bank accounts to ensure a positive balance is maintained.
(c) Money market instruments
These investments bear floating interest rates between 3.50% and 7.00% (2013: 3.67% and 8.14%). These investments are available at call.
(d) Deposits in Cash Common Fund
Deposits in the Cash Common Fund act as operating cash accounts for the other Common Funds, and are interest bearing. These investments are available at call.
(e) Advances to other Common Funds / borrowings from Cash Common Fund
There were no advances from the Cash Common Fund to other Common Funds for the period to 30 June 2014.
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Public Trustee Common Funds NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 6. Financial assets held at fair value through profit and loss
2014 2013 2014 2013Fair Value Fair Value Fair Value Fair Value
$'000 $'000 $'000 $'000
Designated as at fair value through profit or lossFixed interest securities 1 403 930 388 172 33 178 27 602 Unlisted unit trusts - - - - Total designated as at fair value through profit or loss 403 930 388 172 33 178 27 602
2014 2013 2014 2013Fair Value Fair Value Fair Value Fair Value
$'000 $'000 $'000 $'000
Designated as at fair value through profit or lossFixed interest securities 76 834 78 880 - - Unlisted unit trusts - - 157 686 157 028 Total designated as at fair value through profit or loss 76 834 78 880 157 686 157 028
2014 2013 2014 2013Fair Value Fair Value Fair Value Fair Value
$'000 $'000 $'000 $'000
Designated as at fair value through profit or lossFixed interest securities - - - - Unlisted unit trusts 24 726 23 617 121 013 129 658 Total designated as at fair value through profit or loss 24 726 23 617 121 013 129 658
2014 2013Fair Value Fair Value
$'000 $'000
Designated as at fair value through profit or lossFixed interest securities - - Unlisted unit trusts 42 079 48 569 Total designated as at fair value through profit or loss 42 079 48 569
An overview of the risk exposures relating to financial assets at fair value through profit or loss is included in note 9.
Common FundsCash Short Term Fixed Interest
Property (formerly Listed Property Securities)
Long Term Fixed Interest Australian Shares
Overseas Fixed Interest Overseas Shares
1 Includes other common funds deposits in the Cash Common Fund of $62 655 (2013: $55 146).
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Public Trustee Common Funds NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 7. Revenue and assets for entities within the SA Government
2014 2013$'000 $'000
Public Trustee Common Fund Distributions 7 719 7 900 Refunds & Reimbursements 650 599 Gain / (Loss) on Public Trustee Common Funds ( 484) - Total revenue for entities within SA Government 7 885 8 499
Public Trustee Common Funds 241 942 225 951 Total assets for entities within SA Government 241 942 225 951 Public Trustee administers funds on behalf of a number of government entities that invest in the Common Funds. 8. Derivative financial instruments
Public Trustee did not invest in derivative investments for the year ended 30 June 2014.
9. Financial risk management
Public Trustee’s Common Fund activities expose it to a variety of financial risks: market risk (including interest rate risk and price risk), credit risk and liquidity risk. The overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on financial performance. Only Australian domiciled pooled funds are used for overseas asset purchases. In terms of currency exposure, the Overseas Fixed Interest Common Fund is 100% hedged and the Overseas Shares Common Fund is 50% hedged which reduces currency volatility. The Manager, Investment Services is responsible for ensuring that all investments entered into are within the guidelines specified by Public Trustee’s Investment Guidelines and Procedures Manual. The Manager, Investment Services may recommend to the Public Trustee and the Public Trustee may, after consultation with the Investment Advisory Committee, approve investments outside of Public Trustee’s Investment Guidelines.
(a) Credit risk
Credit risk arises from cash and cash equivalents, deposits with banks and financial institutions, as well as credit exposures to outstanding receivables and committed transactions.
Short-term money market instruments must have a short-term Standard and Poors (S&P) rating of A1 or in the case of the issuer being a bank under the Banking Act 1959 a rating of A2 is accepted. Floating rate instruments must have a long-term S&P credit rating of A+ or better or where the counter party is a bank under the Banking Act 1959, a rating of BBB or better is accepted. Long-term investments must have long-term S&P credit ratings of A+ or better or be an investment in a Commonwealth or Semi-government bond. If there is no independent rating, Public Trustee assesses the credit quality of the provider, taking into account its financial position and past experience.
Credit risk arises primarily with the following classes of instruments and counterparties:
Sovereign debt of the Australian Commonwealth and State Governments Sovereign debt of the foreign governments Banking corporations Corporate debt of investment grade Pooled Investment Funds
The maximum exposure to credit risk at the end of each reporting period is the carrying amount of the financial assets.
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Public Trustee Common Funds NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 9. Financial risk management (continued)
The credit quality of financial assets that are neither past due nor impaired are assessed by reference to external credit ratings (if available) or to historical information about counterparty default rates.
Pooled Fund Investments are not rated, however, Public Trustee makes a thorough assessment of all Pooled Fund Managers in regard to credit and other risks prior to the investment of funds with each manager. The credit risk lies with the Pooled Fund Manager responsible for the management of the underlying investments. Public Trustee continually monitors these assessments.
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Public Trustee Common Funds NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
9. Financial risk management (continued)
Credit Risk Analysis2014 2013
$'000 $'000Cash Common FundCash and short term investmentsA1+ 126 617 81 500 A1 78 500 128 033 A2 76 567 44 500 Cash at bank 5 000 5 110
286 684 259 143 Long term investmentsAA - 4 524 AA- 105 042 103 845 A- 6 172 10 250 A+ 11 032 15 003 BBB+ - 517
122 246 134 139
Short Term Fixed Interest Common FundCash and short term investmentsAAA - 2 027 A1+ 2 000 - A1 - 2 513 A2 7 000 2 000 Cash at Bank 18 649 21 478
27 649 28 018 Long term investments
AAA - 2 000 AA+ 2 125 2 109 AA 5 429 5 424 AA- 11 538 7 965 A- 5 086 2 013 BBB+ - 1 551
24 178 21 062
Long Term Fixed Interest Common FundCash and short term investmentsAAA - 7 090 A1+ - 3 014 A1+ 6 043 2 000 A2 2 021 2 000 Cash at Bank 17 239 10 849
25 303 24 953 Long term investmentsAAA 9 335 17 763 AA+ 34 598 20 165 AA 13 938 14 408 AA- 10 899 12 440
68 770 64 776
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Public Trustee Common Funds NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
9. Financial risk management (continued)2014 2013
$'000 $'000Overseas Fixed Interest Common FundCash 13 668 10 488
Australian Shares Common FundCash 8 936 6 454
Overseas Shares Common FundCash 2 770 4 350
Property Common Fund (formerly Listed Property Securities Common Fund)Cash 1 393 1 527
(b) Market risk
(i) Price risk
The Australian Shares Common Fund, Overseas Shares Common Fund and the Property Common Fund are exposed to equity securities price risk. This arises from investments held by Public Trustee and classified in the Statement of Financial Position as financial assets at fair value through the profit or loss. Public Trustee is not exposed to commodity price risk.
To manage its price risk arising from investments in equity securities, Public Trustee diversifies its portfolio. Diversification of the portfolio is in accordance with Public Trustee’s Investment Guidelines. Irrespective of what type of investment vehicle is used, the primary focus is to ensure the risk/reward objectives of Public Trustee’s investment approach are met. The Common Funds comprise a number of sub-portfolios which invest in different sectors of the equity market.
The Australian Shares Common Fund invests primarily in Top 300 ASX Companies. The remaining investments are in companies outside of the Top 100, with the Australian Shares Common Fund portfolio consisting of listed shares, convertible notes, instalment receipts, preference shares and options. No derivative products are permitted under Public Trustee’s Investment Guidelines. Equities in the Overseas Shares Common Fund consist of investments through Australian domiciled-pooled funds that obviate exposure to currency price risk. An “active” approach is used by the fund utilising a variety of fund managers with different investment styles. This provides diversification benefits and reduces the overall level of risk.
The Property Common Fund (formerly Listed Property Securities Common Fund) primarily invests in listed securities including exchange traded options from the Property Trust sector of any Australian or overseas stock exchange or any listed company whose major activity is in real properties.
(ii) Cash flow and interest rate risk
Public Trustee is exposed to interest rate risk arising from cash investments, short term investments and Australian fixed interest investments. Instruments issued at fixed interest rates expose Public Trustee to fair value interest rate risk and variable rate instruments expose Public Trustee to cash flow interest rate risk.
The Cash Common Fund can invest in short term money market instruments with up to one year maturity, floating rate investment instruments with maturity terms up to 10 years if the counterparty is a bank with a credit rating of A- or better or fixed interest instruments with maturity terms up to 3 years. Securities with greater than one year maturity are restricted to make up less than 20% of the overall fund.
The Short Term Fixed Interest Common Fund can invest in fixed interest securities with maturity terms of three years if the credit rating is A+ or better, or a maturity term of up to 6 years for Commonwealth bonds, Semi-government bonds. The Long Term Fixed Interest Common Fund invests in securities with maturities ranging from 5 years to 25 years.
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Public Trustee Common Funds NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
9. Financial risk management (continued) (iii) Foreign exchange risk
The Overseas Fixed Interest Common Fund and the Overseas Shares Common Fund are indirectly exposed to foreign exchange risk as a result of their investments in other unit trusts which in turn invest in financial instruments that are denominated in foreign currencies. A sensitivity analysis is provided below, outlining the exposure to each type of market risk at the end of each reporting period, showing how profit or loss and equity would have been affected by the changes in the relevant risk variable that was reasonably possible at that date. All instruments are designated as financial assets at fair value through the profit or loss; resulting in no impact on equity.
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9. Financial risk management (continued) - sensitivity analysis
Cash Common Fund
- + - +1% 1% 20% 10%
Carrying Amount
Profit & Loss
Profit & Loss
Profit & Loss
Profit & Loss
$'000 $'000 $'000 $'000 $'000Financial assetsCash & cash equivalents 5 000 ( 50) 50 - - Financial assets held at fair value through profit or loss 403 930 (4 039) 4 039 - -
Financial liabilitiesBank overdraft ( 64) ( 1) 1 - - Total (decrease) increase (4 090) 4 090 - -
- + - +1% 1% 20% 10%
Carrying Amount
Profit & Loss
Profit & Loss
Profit & Loss
Profit & Loss
$'000 $'000 $'000 $'000 $'000Financial assetsCash & cash equivalents 5 110 ( 51) 51 - - Financial assets held at fair value through profit or loss 388 172 (3 882) 3 882 - -
Financial liab ilitiesBank overdraft - - - - - Total (decrease) increase (3 933) 3 933 - -
Short Term Fixed Interest Common Fund
- + - +1% 1% 20% 10%
Carrying Amount
Profit & Loss
Profit & Loss
Profit & Loss
Profit & Loss
$'000 $'000 $'000 $'000 $'000Financial assetsDeposits with Cash Common Fund 18 649 ( 186) 186 - - Financial assets held at fair value through profit or loss 33 178 ( 332) 332 - - Total (decrease) increase ( 518) 518 - -
- + - +1% 1% 20% 10%
Carrying Amount
Profit & Loss
Profit & Loss
Profit & Loss
Profit & Loss
$'000 $'000 $'000 $'000 $'000Financial assetsDeposits with Cash Common Fund 21 478 ( 215) 215 - - Financial assets held at fair value through profit or loss 27 602 ( 276) 276 - - Total (decrease) increase ( 491) 491 - -
2014
2013
2014
2013
Interest rate risk Price risk
Interest rate risk
Interest rate risk Price risk
Price risk
Interest rate risk Price risk
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Public Trustee Common Funds NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 9. Financial risk management (continued) - sensitivity analysis
Long Term Fixed Interest Common Fund
- + - +1% 1% 20% 10%
Carrying Amount
Profit & Loss
Profit & Loss
Profit & Loss
Profit & Loss
$'000 $'000 $'000 $'000 $'000Financial assetsDeposits with Cash Common Fund 17 239 ( 172) 172 - - Financial assets held at fair value through profit or loss 76 834 ( 768) 768 - - Total (decrease) increase ( 940) 940 - -
- + - +1% 1% 20% 10%
Carrying Amount
Profit & Loss
Profit & Loss
Profit & Loss
Profit & Loss
$'000 $'000 $'000 $'000 $'000Financial assetsDeposits with Cash Common Fund 10 849 ( 108) 108 - - Financial assets held at fair value through profit or loss 78 880 ( 789) 789 - - Total (decrease) increase ( 897) 897 - -
Overseas Fixed Interest Common Fund
- + - +1% 1% 20% 10%
Carrying Amount
Profit & Loss
Profit & Loss
Profit & Loss
Profit & Loss
$'000 $'000 $'000 $'000 $'000Financial assetsDeposits with Cash Common Fund 13 668 ( 137) 137 - - Financial assets held at fair value through profit or loss 24 726 - - (4 945) 2 473 Total (decrease) increase ( 137) 137 (4 945) 2 473
- + - +1% 1% 20% 10%
Carrying Amount
Profit & Loss
Profit & Loss
Profit & Loss
Profit & Loss
$'000 $'000 $'000 $'000 $'000Financial assetsDeposits with Cash Common Fund 10 488 ( 105) 105 - - Financial assets held at fair value through profit or loss 23 617 - - (4 723) 2 362 Total (decrease) increase ( 105) 105 (4 723) 2 362
Interest rate risk Price risk
Interest rate risk Price risk2014
2013
Interest rate risk Price risk
2014Interest rate risk Price risk
2013
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Public Trustee Common Funds NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 9. Financial risk management (continued) - sensitivity analysis
Australian Shares Common Fund
- + - +1% 1% 20% 10%
Carrying Amount
Profit & Loss
Profit & Loss
Profit & Loss
Profit & Loss
$'000 $'000 $'000 $'000 $'000Financial assetsDeposits with Cash Common Fund 8 936 ( 89) 89 - - Financial assets held at fair value through profit or loss 157 686 - - (31 537) 15 769 Total (decrease) increase ( 89) 89 (31 537) 15 769
- + - +1% 1% 20% 10%
Carrying Amount
Profit & Loss
Profit & Loss
Profit & Loss
Profit & Loss
$'000 $'000 $'000 $'000 $'000Financial assetsDeposits with Cash Common Fund 6 454 ( 65) 65 - - Financial assets held at fair value through profit or loss 157 028 - - (31 406) 15 703 Total (decrease) increase ( 65) 65 (31 406) 15 703
Overseas Shares Common Fund
- + - +1% 1% 20% 10%
Carrying Amount
Profit & Loss
Profit & Loss
Profit & Loss
Profit & Loss
$'000 $'000 $'000 $'000 $'000Financial assetsDeposits with Cash Common Fund 2 770 ( 28) 28 - - Financial assets held at fair value through profit or loss 121 013 - - (24 203) 12 101 Total (decrease) increase ( 28) 28 (24 203) 12 101
- + - +1% 1% 20% 10%
Carrying Amount
Profit & Loss
Profit & Loss
Profit & Loss
Profit & Loss
$'000 $'000 $'000 $'000 $'000Financial assetsDeposits with Cash Common Fund 4 350 ( 44) 44 - - Financial assets held at fair value through profit or loss 129 658 - - (25 932) 12 966 Total (decrease) increase ( 44) 44 (25 932) 12 966
2013Interest rate risk Price risk
2014
Interest rate risk Price risk2014
Interest rate risk Price risk
Interest rate risk Price risk
2013
Public Trustee Annual Report 2013-14
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Public Trustee Common Funds NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 9. Financial risk management (continued) - sensitivity analysis
Property Common Fund (formerly Listed Property Securities Common Fund)
- + - +1% 1% 20% 10%
Carrying Amount
Profit & Loss
Profit & Loss
Profit & Loss
Profit & Loss
$'000 $'000 $'000 $'000 $'000Financial assetsDeposits with Cash Common Fund 1 393 ( 14) 14 - - Financial assets held at fair value through profit or loss 42 079 - - (8 416) 4 208 Total (decrease) increase ( 14) 14 (8 416) 4 208
- + - +1% 1% 20% 10%
Carrying Amount
Profit & Loss
Profit & Loss
Profit & Loss
Profit & Loss
$'000 $'000 $'000 $'000 $'000Financial assetsDeposits with Cash Common Fund 1 527 ( 15) 15 - - Financial assets held at fair value through profit or loss 48 569 - - (9 714) 4 857 Total (decrease) increase ( 15) 15 (9 714) 4 857
Interest rate risk Price risk
2014Interest rate risk Price risk
2013
(c) Liquidity risk
Public Trustee has working capital policies in place in order to maintain liquidity for clients. Short-term investment analysis assists in determining the amount, if any, to be invested or reinvested in order to maintain working capital. Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, and the ability to close out market positions. Public Trustee manages the liquidity risk by continuously monitoring forecast and actual cash flows and matching maturity profiles of financial assets and liabilities.
(d) Fair value estimation
The fair value of financial assets and financial liabilities are estimated for recognition and measurement or for disclosure purposes. The fair value of these assets and liabilities is equal to their carrying amount.
Cash and cash equivalents are valued at nominal amounts. This asset consists of cash at bank, on hand and short-term money market deposits with maturities of three months or less that is readily converted to cash and which are subject to insignificant risk of changes in value.
Financial assets and liabilities are held at fair value through the profit or loss. Investments in pooled funds are recorded at fair value as reported by the managers of such funds. Public Trustee has determined the fair value of financial assets to be market value of these investments at balance date. Accounting Standard AASB 7 Financial Instruments: Disclosures requires disclosure of the measurement methodology used to value financial instruments. Public Trustee invests though fund managers and utilises pricing data provided by those managers which is indirectly derived from the pricing of the underlying securities. Consistent with the definitions in AASB 7 this methodology is classified as level 2 of the fair value hierarchy. Receivables and payables are valued on a historical cost basis and Public Trustee considers that the carrying value approximates market value.
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Public Trustee Common Funds NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 10. Cash flow reconciliation
Cash Common Fund 2014 2013$'000 $'000
(a) Reconciliation of cash and cash equivalentsStatement of Cash Flows 4 936 5 110 Statement of Financial Position 4 936 5 110
(b) Reconciliation of profit/loss to net cash provided by (used in) operating activities:Net operating profit for the year 11 782 17 846 Non-cash operating activitiesNet losses/(gains) on financial instruments held at fair value through profit or loss 333 (2 369) Amortisation of discounts and premiums ( 40) ( 83) Movement in assets and liabilitiesDecrease in receivables and other assets 709 627 (Decrease)/increase in payables and other liabilities ( 9) 30 Adjustment for balance day transactions 61 ( 132) Net cash provided by operating activities 12 836 15 919
Short Term Fixed Interest Common Fund 2014 2013$'000 $'000
(a) Reconciliation of cash and cash equivalentsStatement of Cash Flows 18 649 21 478 Statement of Financial Position 18 649 21 478
(b) Reconciliation of profit/loss to net cash provided by (used in) operating activities:Net operating profit for the year 1 592 2 009 Non-cash operating activitiesNet (gains) on financial instruments held at fair value through profit or loss ( 57) ( 84) Amortisation of discounts and premiums 91 29 Movement in assets and liabilitiesDecrease in receivables and other assets 50 148 (Decrease)/increase in payables and other liabilities ( 1) 2 Net cash provided by operating activities 1 675 2 104
Long Term Fixed Interest Common Fund 2014 2013$'000 $'000
(a) Reconciliation of cash and cash equivalentsStatement of Cash Flows 17 239 10 849 Statement of Financial Position 17 239 10 849
(b) Reconciliation of profit/loss to net cash provided by (used in) operating activities:Net operating profit for the year 4 619 3 594 Non-cash operating activitiesNet (gains)/losses on financial instruments held at fair value through profit or loss (1 545) 45 Amortisation of discounts and premiums 149 78 Movement in assets and liabilitiesDecrease/(increase) in receivables and other assets 51 ( 7) (Decrease)/increase in payables and other liabilities ( 5) 5 Net cash provided by operating activities 3 269 3 715
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Public Trustee Common Funds NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 10. Cash flow reconciliation (continued)
Overseas Fixed Interest Common Fund 2014 2013$'000 $'000
(a) Reconciliation of cash and cash equivalentsStatement of Cash Flows 13 668 10 488 Statement of Financial Position 13 668 10 488
(b) Reconciliation of profit/loss to net cash provided by (used in) operating activities:Net operating profit for the year 1 792 1 227 Non-cash operating activitiesNet (gains)/losses on financial instruments held at fair value through profit or loss ( 959) 236 Income reinvested and not received in cash ( 151) ( 150) Movement in assets and liabilitiesDecrease in receivables and other assets 576 606 (Decrease)/increase in payables and other liabilities ( 1) 1 Net cash provided by operating activities 1 257 1 920
Australian Shares Common Fund 2014 2013$'000 $'000
(a) Reconciliation of cash and cash equivalentsStatement of Cash Flows 8 936 6 454 Statement of Financial Position 8 936 6 454
(b) Reconciliation of profit/loss to net cash provided by (used in) operating activities:Net operating profit for the year 28 458 26 946 Non-cash operating activitiesNet (gains) on financial instruments held at fair value through profit or loss (21 150) (20 746) Income reinvested and not received in cash ( 507) (1 688) Movement in assets and liabilities(Increase) in receivables and other assets (2 734) ( 80) (Decrease)/increase in payables and other liabilities ( 10) 10 Net cash provided by operating activities 4 057 4 442
Overseas Shares Common Fund 2014 2013$'000 $'000
(a) Reconciliation of cash and cash equivalentsStatement of Cash Flows 2 770 4 350 Statement of Financial Position 2 770 4 350
(b) Reconciliation of profit/loss to net cash provided by (used in) operating activities:Net operating profit for the year 22 348 32 887 Non-cash operating activitiesNet (gains) on financial instruments held at fair value through profit or loss (19 474) (31 203) Income reinvested and not received in cash ( 381) ( 262) Movement in assets and liabilities(Increase)/decrease in receivables and other assets (1 638) 452 (Decrease)/increase in payables and other liabilities ( 7) 7 Net cash provided by operating activities 848 1 881
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Public Trustee Common Funds NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 10. Cash flow reconciliation (continued)
Property Common Fund (formerly Listed Property Securities Common Fund) 2014 2013$'000 $'000
(a) Reconciliation of cash and cash equivalentsStatement of Cash Flows 1 393 1 527 Statement of Financial Position 1 393 1 527
(b) Reconciliation of profit/loss to net cash provided by (used in) operating activities:Net operating profit for the year 7 397 8 105 Non-cash operating activitiesNet (gains) on financial instruments held at fair value through profit or loss (3 382) (5 619) Income reinvested and not received in cash ( 128) ( 139) Movement in assets and liabilities(Increase) in receivables and other assets (2 767) ( 187) (Decrease)/increase in payables and other liabilities ( 3) 3 Net cash provided by operating activities 1 117 2 163
11. Events occurring after balance date
The Property Common Fund invested $3.5 million in an unlisted infrastructure fund which comprises a quality portfolio of long life assets on 8 July 2014.
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Appendix 1: Common Funds Statutory Information Section 30(3) of the Public Trustee Act 1995 requires certain information about each Common Fund operated by the Public Trustee to be included within the Annual Report. Below are the locations of the required information (where the information is not included in this Appendix): Audited Statement of Accounts in respect of each Common Fund Refer to the Corporate and Customer Financial Information section of this report. The Auditor-General’s Report upon the Statements of Account Refer to the Corporate and Customer Financial Information section of this report. The nature and amount of any fee that Public Trustee charges in respect of investment in the Common Funds Management fee A management fee is charged against money invested in each Common Fund at the rate of one-twelfth of 1.025% (inc. of GST) of the value of the fund as at the first business day of each month. Management fees attract GST at a reduced rate as there is an entitlement to claim a reduced input tax credit. Goods and Services Tax An investment in Public Trustee’s common funds is classified as an input-taxed financial supply and no GST is charged on such supplies. Simply put, investments made in common funds and investor withdrawals from those funds are not subject to GST; nor are entry fees subject to GST. If a supply is input-taxed, the supplier will not usually receive a tax credit for any GST incurred in connection with the supplier’s expenses. However, for financial supplies, the supplier is able to claim a tax credit for three quarters of the liability incurred in respect of certain expenses (this is called a reduced input tax credit). The majority of expenses incurred by Public Trustee’s common funds, including Public Trustee management fees, brokerage charges and custody fees, are eligible for the reduced input tax credit. The net impact of the GST on expenses incurred by the common funds is therefore approximately 2.5% rather than the full 10% rate. Indirect Cost Ratios (formerly Management Expense Ratio) The total funds management costs for Common Funds and Standard Investment Strategies, as represented by Indirect Cost Ratios, are shown in the following table. These figures on the following page are inclusive of the net impact of GST.
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Table 25: Standard Investment Strategies Indirect Cost Ratios 2013–14 Standard Investment Strategies
Indirect Cost Ratios (ICR)
Standard Investment Strategies ICRs
Strategy ICR 2013–14 ICR 2012–13
Cash 1.08% 1.08%
Capital Stable 1.26% 1.25%
Balanced 1.42% 1.40%
Growth 1.55% 1.52%
Equities 1.73% 1.72%
Common Fund ICR 2013–14 ICR 2012–13
Cash 1.08% 1.08%
Long-term Fixed Interest 1.09% 1.09%
Short-term Fixed Interest 1.08% 1.08%
Overseas Fixed Interest 1.15% 1.16%
Australian Shares 1.68% 1.68%
Property 1.64% 1.62%
Overseas Shares 1.78% 1.77%
Fees In accordance with Section 29 of the Public Trustee Act 1995, investors pay the following fees when investing in Common Funds (NB no fees are charged on entry or exit from the Cash Common Fund): All other standard investment strategies For beneficiaries of estates administered by Public Trustee, where there is a change of
ownership of the assets and when funds would otherwise be distributed: Amounts up to $500 000 0.5% Additional amounts from $500 000 to $2 million 0.375% Additional amounts from $2 million to $5 million 0.25% Additional amounts above $5 million 0%
For beneficiaries of estates administered by Public Trustee where there is no change of ownership of the assets and when funds would otherwise be distributed: No entry fee will apply except to additional funds invested, in which case the above reduced scale for the beneficiary investors will apply.
For all other investors:
Amounts up to $500 000 1.0% Additional amounts from $500 000 to $2 million 0.75% Additional amounts from $2 million to $5 million 0.5% Additional amounts above $5 million 0%
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The above fees will also apply to distributed income and realised capital gains when they are reinvested in a strategy other than cash. No exit fees are charged. No switching fees will be charged except when moving monies from the Cash Strategy to another investment strategy. The above fees will then apply. Deposits Public Trustee does not accept cash deposits. Investments in Investment Strategies may be made either by cheque, direct credit or by transfer of funds from an existing estate being administered by Public Trustee. Identification When establishing an investment account with Public Trustee, customers may be required to provide satisfactory proof of identity. A Public Trustee contact officer will explain identification requirements. The extent to which a capital sum invested may be reduced to defray losses from investment of a Common Fund Realised or unrealised losses of a capital nature of an investment of a Common Fund shall be received or borne by investors, in proportion to the capital sums invested in the fund. Rights of an investor in a Common Fund to withdraw all or part of a person’s investment in the fund Investors may withdraw all or part of their investment in a fund at any time. Part withdrawals must be in amounts of $1 000 or greater, or the balance of the funds being managed, if the amount to be withdrawn reduces the remaining balance to less than $5 000. Proceeds of withdrawals from the Cash Common Fund of amounts less than $1 million will be available on the next business day. Proceeds of withdrawals of amounts greater than $1 million may not be available until the thirtieth business day.
Proceeds of withdrawals from Investment Strategies, other than the Cash Investment Strategy Fund, will not be available until 15 business days after the next exit day (currently the first day of each month). Proceeds of withdrawals of amounts greater than $1 million from these Investment Strategies may not be available until the thirtieth business day after the next exit day. Terms governing distribution of income and profit or loss of a capital nature attributable to each investment in a Common Fund The net income and realised capital gains of each fund are calculated to 30 June and 31 December and will be distributed to the investor in July and January of each year, unless the investor has given instructions to reinvest the money.
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Classes of investment in which Common Funds may invest Introduction Section 29 of the Public Trustee Act 1995 (‘the Act') requires the Public Trustee to determine the classes of investments in which a Common Fund may be invested, and provides for these classes to be varied from time to time. The Act does not define classes of investment. Determination of the classes of investment in which Public Trustee Common Funds may invest Cash Common Fund The permitted classes of investment are: a. Cash b. Fixed Interest Qualifications on these investment classes:
i. All investments shall be denominated in Australian dollars. ii. Fixed rate securities shall not exceed three years to maturity. iii. Floating rate securities shall not exceed 10 years to maturity.
The following class of investment is explicitly excluded: Derivatives. The fund may invest in collective investment schemes operated by organisations approved by the relevant government agencies, provided that the rules of the collective investment schemes restrict the schemes’ investments to the permitted classes of investment of the Common Fund. Short-term Fixed Interest Common Fund The permitted classes of investment are: a. Cash b. Fixed Interest Qualifications on these investment classes:
i. All investments shall be denominated in Australian dollars. The fund’s liquidity requirements will be managed by an investment in the Cash Common Fund.
ii. Fixed rate securities shall not exceed five years to maturity. iii. Floating rate securities shall not exceed 10 years to maturity.
Security lending arrangements in relation to authorised investments are permitted. The following class of investment is explicitly excluded: Derivatives. The fund may invest in collective investment schemes operated by organisations approved by the relevant government agencies, provided that the rules of the collective investment schemes restrict the schemes' investments to the permitted classes of investment of the Common Fund. Long-term Fixed Interest Common Fund The permitted classes of investment are: a. Cash b. Fixed Interest c. Inflation-linked Securities
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Qualifications on these investment classes: i. All investments shall be denominated in Australian dollars. ii. The fund's liquidity requirements will be met by investment in the Cash Common Fund. iii. Fixed rate securities and inflation-linked securities shall not exceed 15 years and 25
years to maturity, respectively. iv. Inflation-linked securities shall be restricted to consumer inflation or average weekly
earnings-linked securities issued by the Commonwealth Government, State Governments or the Government of the Northern Territory, and securities issued by other parties where the payments to holders of the securities are guaranteed by these governments.
v. Security lending arrangements in relation to authorised investments are permitted. The following class of investment is explicitly excluded: Derivatives The fund may invest in collective investment schemes operated by organisations approved by the relevant government agencies, provided that the rules or the collective investment schemes restrict the schemes' investments to the permitted classes of investment of the Common Fund. Australian Shares Common Fund The classes of investment are: a. Cash b. Australian equities c. Derivatives Qualifications on these investment classes:
i. Fund liquidity requirements shall be met by investment in the Cash Common Fund. ii. Investments in Australian Equities shall be limited to securities of companies and trusts
listed on the Australian Stock Exchange, and to unlisted securities in companies and trusts where the intention is for these securities to be listed within six months of investment.
iii. Small capitalisation companies, defined as those outside the Top 100 Sector of the Australian Stock Exchange's All Ordinaries Index, shall not exceed 20% of the fund's assets.
iv. Underwriting is permitted only where Public Trustee has made a firm subscription to a new issue and the amount underwritten does not exceed the subscription amount.
v. Underwriting as an investment instrument is prohibited. vi. Security lending arrangements in relation to authorised investments is permitted. vii. Investments in financial derivatives specifically relating to the investments of the fund
are permitted for the purpose of: investment of funds; or hedging or otherwise managing the risk of the fund.
The fund may invest in collective investment schemes operated by organisations approved by the relevant government agencies, provided that the rules of the collective investment schemes restrict the schemes' investments to the permitted classes of investment of the Common Fund. Property Common Fund The classes of investment are: a. Cash b. Property. Qualifications on these investment classes:
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i. Fund liquidity requirements shall be met by investment in the Cash Common Fund. ii. Investments in property comprise securities of companies and trusts that are either
listed or unlisted. iii. Investments in listed and unlisted infrastructure trusts are permitted in the fund. iv. Underwriting is permitted only where Public Trustee has made a firm subscription to a
new issue and the amount underwritten does not exceed the subscription amount. v. Security lending arrangements in relation to authorised investments are permitted.
Investments in financial derivatives specifically relating to the investments of the fund are
permitted for the purpose of: investment of funds; or hedging or otherwise managing the risk of the fund.
The fund may invest in collective investment schemes operated by organisations approved by the relevant government agencies, provided that the rules of the collective investment schemes restrict the schemes' investments to the permitted classes of investment of the Common Fund. Overseas Shares Common Fund The classes of investment are: a. Cash b. International Equities c. Derivatives. Qualifications on these investment classes:
i. Fund liquidity requirements shall be met by investment in the Cash Common Fund. ii. Cash, where held other than by investment in the Cash Common Fund, shall be held
as bank deposits, bank-guaranteed securities or short-term sovereign debt instruments.
iii. Trading in inter-bank or over-the-counter markets shall occur only in those markets which have been approved by the relevant government agencies of the country in which the market is conducted.
iv. Investments in collective investment schemes, the primary mandates of which are the holdings of smaller companies and emerging markets securities, shall not exceed 25% and 15% of the assets of this Common Fund, respectively.
v. Underwriting is permitted only where Public Trustee (either directly or via an appointed custodian) has made a firm subscription to a new issue and the amount underwritten does not exceed the subscription amount.
vi. Security lending arrangements in relation to authorised investments are permitted. The fund may invest in collective investment schemes operated by organisations approved by the relevant government agencies, provided that the rules of the collective investment schemes restrict the schemes' investments to the permitted classes of investment of the Common Fund. Overseas Fixed Interest Common Fund The permitted classes of investment are: a. Cash b. International Fixed Interest c. Derivatives Qualifications on these investment classes:
i. The fund's liquidity requirements shall be met by investment in the Cash Common Fund.
Public Trustee Annual Report 2013–14
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ii. Cash, where held other than by investment in the Cash Common Fund, shall be held as bank deposits, bank-guaranteed securities or short-term sovereign debt instruments.
iii. All fixed income securities must be rated by recognised rating agencies and at least 90% of the fund shall comprise investment-grade securities.
iv. Investments in financial derivatives specifically relating to the investments of the fund are permitted for the purpose of: investment of funds; or hedging or otherwise managing the risk of the fund.
The fund may invest in collective investment schemes operated by organisations approved by the relevant government agencies, provided that the rules of the collective investment schemes restrict the schemes' investments to the permitted classes of investment of the Common Fund.