For personal use only › asxpdf › 20110930 › pdf › 421fv7l2jchc4l.pdf · independent valuations in the 2011 financial accounts. Herron Todd White Valuers (Mackay) were commissioned

ANNUAL REPORT2011

Trustees Australia Limited ACN 010 653 862

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Trustees Australia Limited Annual Report 2011 2

CONTENTS

DIRECTORS’ REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3

CORPORATE GOVERNANCE STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13

AUDITOR’S INDEPENDENCE DECLARATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

CONSOLIDATED STATEMENT OF FINANCIAL POSITION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21

CONSOLIDATED STATEMENT OF CASH FLOWS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . 24

DIRECTORS’ DECLARATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .71

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .72

SHAREHOLDER INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .74

CORPORATE DIRECTORY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .76

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DIRECTORS’ REPORT

The board of directors of Trustees Australia Limited (Trustees Australia) submits to members the Annual Report of the company and its controlled entities (the group) for the financial year ended 30 June 2011.

PRINCIPAL ACTIVITIES AND SIGNIFICANT CHANGES IN THE NATURE OF THOSE ACTIVITIES

The principal activities of the group during the year were:

Financial services activities comprising:

• custodial and responsible entity services through Trustees Australia;

• fixed interest broking and advisory through Rim Securities Limited (RIMsec)

• superannuation administration services through Administration Partners Pty Ltd (AdminPARTNERS)

• A 33% interest in APA Financial Services Limited (APA), an ASX listed entity with an interest in OneVue Holdings Limited, a portfolio administration platform provider for participants in the financial services industry.

Tourism and hospitality activities comprising:

• the ownership and operation of Magnums Airlie Beach Backpackers;

Property activities comprising:

• development property ownership in Trustees Australia; and

• a 43% interest in the Whitsunday Village Retail Property No 1 (WVRPT), a managed investment scheme holding retail shops at Airlie Beach .

There has been no significant change in the nature of the consolidated group’s activities during the financial year.

REVIEW OF OPERATIONS AND RESULTS

During the financial year to 30 June 2011, the group has continued with the development of its primary business strategy for the next decade to become a significant participant in the custody and responsible entity market in Australia.

Unfortunately, the results for the year to 30 June 2011, particularly the significant write-down in values of property assets, do not provide a good reflection of the hard work and effort that the management team at all levels of the company has put into positioning for future success .

The consolidated net loss attributed to members of Trustees Australia, after providing for income tax and eliminating outside equity interests, was $9,442,150 (2010: $1,189,328). The loss has resulted predominantly from asset value impairment expenses of $5,965,663 plus the reduction in current ma2rket valuation of the company’s 43% interest in WVRPT of $1,325,827. The group also suffered a revenue and other income decrease of $1,395,348, predominantly from its tourism and hospitality segment, which was offset by a reduction in business operating costs, employment, finance, property, and other expenses totalling $872,674.

The directors are of the view that publication of the specific revenues and results of individual entities in the group is likely to prejudice their market competitiveness and for this reason, those details have been omitted from this report.

There are several activities in progress, in relation to restructuring of existing business activities and preparations for restructure of the group that are confidently expected to result in improved shareholder value and return on investment as they are progressively implemented. The directors of Trustees Australia believe that despite the impairment of asset market values in response to changed market conditions, the last twelve months has been a pivotal year, which provides a base for growth in shareholder value in coming years .

FINANCIAL POSITION

The net assets of the group are $11,414,127 at 30 June 2011, a decrease of $9,427,963 from 30 June 2010. The net assets have decreased predominantly as a result of land and buildings impairment of $5,917,552; the reduction in current market valuation of the company’s 43% interest in WVRPT of $1,325,828; and deferred tax assets write back of $811,396.

Further details regarding property value impairments are included in the following section on property values .

REVIEW OF OPERATIONS AND BUSINESS SEGMENTS

• ProPertyValues

The most significant matter addressed in the results for the financial year concerns the diminution in carrying values of property assets of the company . These assets are all located at Airlie Beach . They comprise the property from which the Magnums Backpackers operations are conducted, the Airlie Central development land and a 43% interest in WVRPT, which holds retail shops adjacent to Airlie Central .

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DIRECTORS’ REPORT (cont’d)

• ProPertyValues(cont’d)

There has been widely published media commentary that tourism dependent locations around Australia have been significantly affected by the combination of unusually adverse weather conditions and their flow-on effects in early 2011 and the dramatic slowdown in tourism visitation, as a result of the high Australian dollar and deteriorating global economic conditions .

Airlie Beach depends heavily on tourism and much of the employment in the town and locality is tourism related . The group’s Magnums Backpackers property was valued independently at 30 June 2010 based on the “going concern” value of its operations. During the intervening twelve months, revenues of Magnums Backpackers reduced by approximately 28% year on year, with a 40% reduction in the January to June 2011 half-year compared with the corresponding period in 2010, exacerbated by the extreme and protracted weather conditions of cyclones and floods. These combined effects resulted in the worst performance for the backpacker business activity in over 20 years.

As a result, the directors decided the “going concern” valuation methodology was no longer appropriate and adopted land and building market value assessments by Herron Todd White at 30 June 2010. This resulted in an impairment of $5,917,552 being brought to account in the results for the year .

Similarly, the CBD of Airlie Beach, like other tourism related areas such as Noosa, Port Douglas and Cairns, has suffered from unprecedented vacancies and closing businesses with resultant negative effects on property values . An independent valuation of the WVRPT’s assets by Opteon / JD Dodds Property Valuers dated 17 August 2011 has resulted in a reduction in the current market valuation of $1,325,828 of the company’s 43% interest in the Trust. The directors adopted these independent valuations in the 2011 financial accounts.

Herron Todd White Valuers (Mackay) were commissioned to undertake a current market value assessment of the Airlie Central development property at 30 June 2010 and assessed the value to be $4,179,500. In recent years, there have been no reported sales of comparable property and despite favourable changes to the local authority’s planning scheme, market conditions for development remain depressed . Based on this advice the directors have assessed the value of the land at 30 June 2011 at $4,326,451, including capitalised costs of $146,951 in 2011, which relate to planning and development negotiations for development of the property, which remains prospective .

• MagnuMsairlieBeachBackPackers

While it remains the case that the Magnums Backpacker’s operation continues to be the market leader at Airlie Beach, tourism activity generally throughout Australia is experiencing the most difficult conditions since the national pilot’s strike in Australia in late 1988 and 1989. Tourism turnover at Magnums has fallen by 28% year on year to 30 June 2011. The primary causes are the combined effects of the very strong Australian dollar, which makes Australia a comparatively expensive tourist destination, and the global financial crisis, particularly as it affects Europe. Adverse weather had an additional cyclical effect .

A new marketing strategy aimed at the Australian domestic market for social groups, sporting clubs and specific employee groups such as those in nearby regional mining communities has been developed and its rollout commenced in August 2011 . This has involved a combination of traditional hard copy brochure distribution and mailings with new development of electronic media concentrating on social media network marketing.

• custody,resPonsiBleentityandtrusteeserVices

During the financial year, Trustees Australia has continued to build the systems and capability necessary to enable it to become a meaningful participant in the custody and administration of financial assets. A detailed evaluation of available third party software and service providers has been undertaken and negotiations are in progress with a short list of providers.

The efficient development of the custody segment of the business is dependent on the availability of electronic systems that are able to process transactions securely with minimum handling by personnel . For this reason Trustees Australia is concentrating its market involvement in asset custody and administration areas which are already substantially automated, complementing other business segments of group companies RIMsec and AdminPARTNERS . The directors are planning to be in a position to inform shareholders of progress on selection of an electronic platform in coming months .

• FixedinterestsPecialists(riMsec)

During the first half of the 2011 financial year, the directors undertook some initial restructure of resources focussing on cost reduction. Additional restructuring within the company was undertaken during the second half of financial year 2011, with the closure of the Adelaide office and reorganisation of personnel at Brisbane. As part of this process, Trustees Australia acquired the shareholding interests of three RIMsec shareholders to increase its holding from 66% to 97% at 30 June 2011.

The restructuring changes have had an immediately positive effect on the motivation and morale of RIMsec personnel, as well as on financial and operational performance, with commendable results in July and August 2011. The improved trading is expected to continue during the current financial year, assisted by recent increased market volatility.

Several initiatives are being implemented to capitalise on the increased market demand for fixed income investment options,

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primarily by targeting the financial planning and stockbroking community through established platforms traditionally focussed on equities.


• suPerannuationadMinistration(adMinPartners)

AdminPARTNERS has operated in line with expectations during the period. The company continues to provide superannuation administration infrastructure for pooled superannuation funds. An independent report on the quality of the products offered was completed in December 2010, finding that the systems and capabilities of MySuperSolution were of high standard and offer very competitive solutions to the marketplace.

AdminPARTNERS currently has a respectable pipeline of prospective clients, although the process of securing new administrators and changing software takes considerable time. The company is also working on separate partnering opportunities with other administration providers to build scale of turnover in the administration business .

• otherequityinterests(aPa)

Trustees Australia retains its strategic interest of 33% in APA Financial Services Limited (ASX code APP), which remains listed on ASX and holds assets comprising cash and an investment in OneVue Holdings Limited, a portfolio administration platform provider for participants in the financial services industry. APA reports separately to the ASX on its activities and results. Trustees Australia director, Michael Hackett is a director of APA.

STRATEGIC DIRECTION

The directors have previously advised shareholders of their intentions to restructure the company, at an appropriate time, into two separate listed entities, namely a Financial Services entity and a Property entity. At the 2010 AGM an in-principle approval of shareholders was obtained to further investigate this potential on the basis that the activities of financial services, property and tourism are not an ideal combination for a small company trying to maintain interest from existing and new investors.

Despite the deferral of demerger action in the financial year ended 30 June 2011, for the reasons previously advised to shareholders, the directors are committed to achieving this outcome at the earliest opportunity .

As previously advised, the desired outcomes from a demerger and splitting process for Trustees Australia include:

• clearly identifying the activity of each listed entity to appeal to its different potential investors;

• enhancing the investment profile of each listed entity to unlock the historical differential between Trustees Australia’s market price net asset backing;

• opening up options for the separate entities to raise additional capital to accelerate the growth of both segments and to develop specialist and independent management teams with exclusive focus on their separate market segment;

• providing a mechanism to improve share register liquidity, through a capital raising process to reduce the current concentration of ownership .

Discussions on a confidential basis are on-going with several parties that have the capacity to assist the company to achieve these goals; however, no specific outcomes are yet at a sufficiently advanced stage to be reported. The directors will be continuing their investigations regarding a possible demerger and its timing and will keep shareholders up to date with progress as it occurs.

SUMMARY

Despite the challenging economic times, Trustees Australia remains in a position from which it can grow and prosper and the Trustees Australia board and management will work diligently to ensure that this occurs in a planned and considered way.

As mentioned in the Review of Operations and Results section of this report, the results for the year and particularly the material write down in the value of assets do not reflect the underlying positive direction of the company or the very significant time and effort contributed by management and personnel at all levels within the company .

While it may not be evident to shareholders and it is certainly not able to be seen from these financial accounts, there is a real enthusiasm and commitment to succeed in every aspect of the company’s business activities . This is despite the relatively modest financial remuneration and benefit levels enjoyed by a loyal and dedicated team.

The directors wish to thank the Trustees Australia team and its shareholders for their continued support and patience during challenging times .

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INFORMATION ON DIRECTORS

The following persons held office as directors of Trustees Australia Limited during or since the end of the year. The names and details of the directors are:

Name Position Appointments/Resignations

Michael Hackett Managing Director / Acting ChairmanKerry Daly DirectorNathan Leman Director Appointed 24 November 2010Richard Green Chairman Resigned 24 November 2010Ian Jensen Director Resigned 24 November 2010

DIRECTORS

Michael Hackett Managing Director/Acting Chairman (Executive)

Qualifications Bachelor of Commerce - University of QueenslandFellow - Institute of Chartered Accountants in AustraliaACA Financial Planning SpecialistMember - Australian Institute of Company Directors

Directorships held in other listed entities in the past 3 years

APA Financial Services Ltd – Non-executive director from May 2009 to current

Interest in Trustees Australia shares & options

Michael Hackett has a relevant interest in 24,319,320 shares in Trustees Australia at 30 June 2011.

Michael was the founding chairman and managing director when the company was incorporated in 1986 and resigned as chairman in 1996 . Michael was reappointed chairman in November 2010 on reitrement of Mr Richard Green . Michael is an associate of the company’s majority shareholders through private company interests. He has had considerable experience in managing and operating a wide range of businesses and property developments and is responsible for the day-to-day activities of the company .

Kerry Daly Director (Non-Executive, Independent)

Qualifications Bachelor of Business (Accountancy) – Queensland University of TechnologyCertified Practicing Accountant


Tamawood Limited – chairman from Apr 2000 to currentAstiVita Renewables Limited – non-executive director from Sep 2009 to currentCollection House Limited – non-executive director from Oct 2009 to current


Kerry Daly has a relevant interest in 300,000 shares in Trustees Australia at 30 June 2011 and also holds 500,000 options expiring on 31 December 2011. The options are exercisable into fully paid ordinary shares at 40 cents per share.

Kerry was appointed as a director on 17 March 2009. He is an experienced senior executive and public company director with some 30 years experience in the financial services sector, including retail banking, equities and bond markets dealing, funds management, investment banking and corporate advisory. He has around twenty years experience at chief executive officer, managing director and executive director level.F

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DIRECTORS (cont’d)

Nathan Leman Director (Non-Executive)

Qualifications Commercial Builder and Project Manager


Nil


Nathan Leman has a relevant interest in 2,878,880 shares in Trustees Australia at 30 June 2011.

Nathan was appointed as a director on 24 November 2010. He is a qualified project manager with approximately 20 years hands-on experience in managing development, construction and technology acquisition and implementation projects. Since 1999, he has been responsible for the design and implementation of property and IT projects for the Trustees Australia group, including those relating to financial services technology platforms. As a director of Trustees Australia, Nathan has been appointed to the boards of most of its subsidiary entities .

COMPANY SECRETARIES

The following persons held office as a company secretary of Trustees Australia Limited during the financial year:

Elizabeth Hackett Company Secretary


Elizabeth Hackett has a relevant interest in 1,877,962 shares in Trustees Australia at 30 June 2011.

Elizabeth has worked for the group since 1996, initially as the resort general manager with direct day-to-day responsibility for all operations of Magnums. She is currently manager of operations and marketing. Elizabeth was appointed company secretary on 28 July 1999.

Richard Brennan (B .Sc, B .Bus) Company Secretary


Richard Brennan has no relevant interest in shares in Trustees Australia at 30 June 2011.

Richard has consulted to the group as special project manager and financial accountant for over 12 years, between 1994 and the date of this report . He previously held the role of company secretary in 1996 for a period of one year and was also appointed alternate company secretary on 3 November 2008 .

MEETINGS OF DIRECTORS

The board generally meets on at least a bi-monthly basis either in person or by telephone conference. Directors meet bi-annually with the group’s auditor to discuss relevant issues . On matters of corporate governance, the board retains its direct interest rather than through a separate committee structure which would be inappropriate for a company of the modest size and structure of Trustees Australia Limited .

Aside from formally constituted directors’ meetings, the non-executive directors are in regular contact with the managing director regarding the operation of the company and particular issues of importance . Written reports on trading activities and operating strategies are provided to the directors on a regular basis or as required by changing circumstances.

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MEETINGS OF DIRECTORS (cont’d)

The number of directors’ meetings and number of meetings attended by each of the company directors during the financial year are set out in the table below:

Directors Meetings eligible to attend Meetings attended

Michael Hackett 6 6Kerry Daly 6 6Nathan Leman 3 3Richard Green 3 3Ian Jensen 3 3

DIVIDENDS PAID OR RECOMMENDED

The directors have not recommended a dividend for the year ended 30 June 2011 (2010: $nil) at the date of this report.

OPTIONS

At the date of this report, the unissued ordinary shares of Trustees Australia under option are as follows:

Grant Date Date of Expiry Excercise Price Number under Option17/04/2009 31/12/2011 $0 .40 500,000

No shares were issued, nor options granted by the parent entity or any controlled entity and no options were exercised by any holder during the year ended 30 June 2011 or since that date. All shares issued are fully paid and no options were excercised by any holder .

For details of options held refer to the Remuneration Report and Note 20(b)(ii) . There have been no unissued shares or interests under option of any controlled entity within the group during, or since, the end of the reporting period .

Option holders do not have any right to participate in any issue of shares or other interests in the company or any other entity as a consequence of holding any option.

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

In the opinion of the directors there were no significant changes in the state of affairs of the group that occurred during the year under review that are not disclosed elsewhere in this report or in the accompanying financial statements.

SIGNIFICANT EVENTS AFTER BALANCE DATE

Other than as disclosed in Note 29 of this report, there have been no significant post balance date events peculiar to the Consolidated Group .

INDEMNIFICATION OF OFFICERS OR AUDITOR

During the financial year, the parent entity paid an insurance premium in respect of an insurance policy insuring the directors, the company secretary and all executive officers of the group against a liability incurred as a consequence of holding that office in the group to the extent permitted by the Corporations Act 2001 . The amount of the premium was $36,910 (2010: $32,900) for all directors and officers for the year commencing 22 June 2011.

The company has not otherwise, during or since the end of the financial year, indemnified or agreed to indemnify an officer or auditor of the company against a liability incurred as such by an officer or auditor.

FINANCIAL SERVICES LICENCES

Trustees Australia Limited, QTI Managed Funds Limited and Rim Securities Limited hold financial services licences under section 913B of the Corporations Act 2001 . These are Licences 260033, 260038 and 283119 respectively .

The AFS licences held contain a requirement to purchase an insurance policy for professional indemnity cover for fraud by officers and employees. As disclosed above, an insurance policy is in force and premiums have been paid for the requisitie cover as required.

ENVIRONMENTAL ISSUES

The company’s operations are not regulated by any significant environmental regulation under a law of the Commonwealth or of a State or Territory .

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PROCEEDINGS ON BEHALF OF COMPANY

As a normal part of its operations, the group from time to time becomes a party to various minor legal exchanges in relation to town planning, licensing and other operational matters and in minor disputes regarding amounts payable or receivable . No person has applied for leave of a court to bring proceedings against or on behalf of the group or to intervene in any significant proceedings to which any such entity is a party for the purpose of taking responsibility for all or any part of those proceedings. No proceeding has had or is likely to have a material impact on the financial position of the group or any of its controlled entities.

NON-AUDIT SERVICES

The board is satisfied that the provision of non-audit services during the year is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001 and is satisfied that the services disclosed below did not compromise the external auditor’s independence for the following reasons:

i) all non-audit services are reviewed and approved by the board prior to commencement to ensure they do not adversely affect the integrity and objectivity of the auditor; and,

ii) the nature of the services provided do not compromise the general principles relating to auditor independence in accordance with APES 110: Code of Ethics for Professional Accountants set by the Accounting Professional Ethical Standards board .

No fees for non-audit services were payable/paid to external auditors during the year ended 30 June 2011 (2010: $nil).

AUDITOR’S INDEPENDENCE DECLARATION

The auditor’s independence declaration for the year ended 30 June 2011 has been received and a copy can be found at page 19.

REMUNERATION REPORT (AUDITED)

A. Remuneration policies and practices

The group’s current remuneration policy is designed to align Key Management Personnel (KMP) objectives with shareholder and business objectives, and uses a fixed remuneration structure with a short term performance component. The group also uses, from time to time, options as a form of remuneration. However, as the senior management team is expanded the board intends to review remuneration policy so that it is appropriate and effective in its ability to attract and retain good quality executives and directors to run and manage the group, as well as create common goals between directors, executives and shareholders.

The board’s policy is to remunerate non-executive directors at market rates for comparable companies for time, commitment and responsibilities. Independent external advice is sought when required. The maximum aggregate amount of fees that can be paid to non-executive directors is subject to approval by shareholders in a general meeting. Fees for non-executive directors are not linked to the performance of the group. However, to align directors’ interests with shareholder interests, directors are encouraged to hold shares in the company. Directors are reimbursed at cost for travelling expenses and other costs and in respect of attendance at meetings .

The managing director, Michael Hackett, holds a significant interest in the equity of Trustees Australia which ensures he maintains a strong alignment with shareholders’ interests. Other employees and contractors are remunerated at market rates applicable to their qualifications, experience and contribution to the group.

An employee share scheme was approved by shareholders in 1988, although it has not operated since 1994 and currently no employee or director has a right to participation in any bonus scheme involving shares in the company . As part of the review of remuneration, the employee share scheme will also be reviewed .

All remuneration paid to directors and executives is valued at the cost to the company. Where applicable, part of such remuneration may be capitalised into the carrying value of long-term projects. Directors and executives receive a fixed salary and a minimum superannuation guarantee contribution required by the government, which is currently 9%, and any statutory retirement and long service leave benefits. Some individuals have chosen to sacrifice part of their salary to increase payments towards superannuation .

B. Performance-based remuneration

As the group expands in the near future, remuneration policy and practices will be designed to align director and executive objectives with shareholder and business objectives by providing a fixed remuneration component and offering specific long-term incentives based on key performance areas affecting the group’s financial results.

For RIMsec senior executives there is a short-term performance-based component that rewards executives with respect to their individual profit contribution to the company above a benchmark level that is reviewed annually in line with comparative performance based remuneration industry standards .

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REMUNERATION REPORT (AUDITED) (cont’d)

C. Relationship between remuneration policy and company performance

The maximum aggregate amount of directors’ fees that can be paid to directors is subject to approval by shareholders at the Annual General Meeting and is not linked to the performance of the company. Fees for non-executive directors are not linked to company performance. To align directors’ and shareholder interests, the directors are encouraged to hold shares in the company .

Some employees of RIMsec are eligible for commissions which are linked to predetermined individual profit benchmarks.

The current remuneration policy seeks to align director and executive objectives with those of shareholders by recognising the criticality of funds being utilised to achieve development objectives .

The following table shows some key performance data of the group for the last five years, together with the share price at the end of each respective year:

2007 2008 2009 2010 2011

$ $ $ $ $

Revenue 3,200,917 3,685,039 4,574,765 5,971,086 4,469,255Net profit / (loss) 1,604,929 (298,515) 466,181 (1,189,328) (9,442,150) Net assets 26,515,774 26,436,147 26,873,155 20,842,090 11,414,127 Share price at year end 0 .600 0 .425 0 .450 0 .340 0 .200 Dividends / return of capital paid nil nil nil nil nil

D. Employment details of members of key management personnel and other executives

The following table provides employment details of persons who, during the financial year, were members of key management personnel of the group and to the extent different, among the five group executives or company executives receiving the highest remuneration . No KMP remuneration was performance based . The table illustrates the proportion of remuneration that was non-performance based.

Name Position held Contract details

Non salary cash based incentives

Shares Options Fixed salary / fees

Total

Directors % % % % %

M Hackett Managing Director/ Acting Chairman N/A - - - 100 100

K Daly Non Executive Director N/A - - 27 73 100

N Leman Non Executive Director N/A - - - 100 100

R Green Chairman N/A - - - 100 100

I Jensen Non Executive Director N/A - - - 100 100

Executives

E Hackett Operations Manager N/A - - - 100 100

J Atabak CEO / Director (AdminPARTNERS)

No fixed term* - - - 100 100

A Healey Director (RIMsec) No fixed term* - - - 100 100

For senior executives of RIMsec and AdminPARTNERS, employment conditions are formalised in contracts of employment. Aside from RIMsec and AdminPARTNERS employees, there are no formal employment contracts for key management personnel in the group .

*For those key management personnel with an employment contract, performance benchmarks are reviewed annually. A minimum notice of one month is required prior to the termination of a contract. No termination payments are payable aside from standard award entitlements .

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E. Remuneration details for the year ended 30 June 2011

Details of the nature and amount of each major element of remuneration for key management personnel and other executives of the group during the financial year:

Key Management Personnel

Short Term Benefit Post Employment

Long Term Benefit Equity Based Payments

TotalSalary /

Director’s Fees

Bonus Super Contributions

Long ServiceLeave

Shares / Units

Options

2011 $ $ $ $ $ $ $M Hackett 113,500 - 50,000 2,855 - - 166,355

K Daly 50,000 - 14,500 - - 21,018 75,518

N Leman* 1 - - - - - - -

R Green2 - - 13,625 - - - 13,625

I Jensen2 - - 11,354 - - - 11,354

E Hackett 100,060 - 9,005 1,898 - - 110,963

A Healey3 146,477 20,824 13,499 (14,443) - - 166,357

J Atabak 157,822 - 14,204 - - - 172,026

Total 567,859 20,824 126,187 (9,690) - 21,018 726,198

* In addition to the remuneration above, an entity associated with Nathan Leman rendered professional services to the company . Refer to Note 20(g)(iii) .


Short Term Benefit Post Employment

Long Term Benefit Equity Based Payments

TotalSalary /

Director’s Fees

Bonus Super Contributions

Long ServiceLeave

Shares / Units

Options

2010 $ $ $ $ $ $ $M Hackett 113,500 - 50,000 3,127 - - 166,627

K Daly 39,651 - 14,849 - - 21,018 75,518

R Green2 - - 32,700 - - - 32,700

I Jensen2 - - 27,250 - - - 27,250

E Hackett 100 .060 - 9,005 2,021 - - 111,086

A Healey3 120,000 - 10,800 14,443 - - 145,243

Total 373,211 - 144,604 19,591 - 21,018 558,424

Securities received that are not performance related

On 7 April 2009, Kerry Daly was granted options to purchase 500,000 shares on appointment as director. Exercise of these options is not performance based .

1 Appointed -24 November 20102 Resigned - 24 November 20103 Resigned - 30 June 2011

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E. Remuneration details for the year ended 30 June 2011 (cont’d)

Cash bonuses, performance-related bonuses and share-based payments

The terms and conditions relating to options and bonuses granted as remuneration to key management personnel, and other executives during the year, are as follows:

Key management personnel

Remuneration type

Grant date / reason

Grant value

Percent paid / vested

during year

Percentage forfeited

during year

Expiry date for vesting /

payment

Range of possible values relating to future payment

$ % %

K Daly Options 07/04/020094 57,500 - - 31/12/2011 N/A

Options and Rights Granted

Key management personnel

Grant details For financial year 2011 Overall

Date No. Value No. Excercised

No. Vested

Vested %

Unvested %

Lapsed %

K Daly 07/04/2009 500,000 57,500 - - - 100 -

Descriptions of options/rights issued as renumeration

Details of the options granted as remuneration to those key management personnel and executives listed in the previous table are as follows:

Grant Date Issuer Entitlement onexercise

Dates exercisable Exercise price

Value peroption at

Grant Date

Amount paid/ payable by

recipient

$ $ $

07/04/2009 Trustees Australia Limited (TAU) 1:1 shares in TAU 31/12/2011 0 .40 cents 0 .115 5 200,000

4 Options granted to Kerry Daly will expire on the earlier of the expiry date or him ceasing to be a director. All options were issued by Trustees Australia and entitle the holder to one ordinary share in Trustees Australia for each option exercised. There have not been any alterations to the terms or conditions or any grants since grant date .

5 Options values at grant date were determined using the Binomial Method .

This report of the directors, incorporating the Remuneration Report, is signed in accordance with a resolution of the board of directors .

__________________Michael Leslie HackettManaging Director / Acting Chairman

__________________Kerry John DalyDirector

Brisbane

29 September 2011 .

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CORPORATE GOVERNANCE STATEMENT

Unless disclosed below, as per ASX Listing rule 4 .10 .3 all the recommendations of the ASX Corporate Governance Council have been applied for the entire financial year ended 30 June 2011. The company have adopted the Corporate Governance Statement to comply with the ASX’s revised Corporate Governance Principles and Recommendations which became effective on or after 1 January 2008.

Boardauthoritiesanddelegations

The board is ultimately responsible for all matters relating to the running of the group .

The board’s role is to govern the group rather than to manage it . In governing the group, the directors must act in the best interests of the group as a whole . It is the role of senior management to manage the group in accordance with the direction and delegations of the board and the responsibility of the board to oversee the activities of management in carrying out these delegated duties .

The board has the final responsibility for the successful operations of the group. In general, it is responsible for, and has the authority to determine, all matters relating to the policies, practices, management and operations of the group. It is required to do all things that may be necessary to be done in order to carry out the objectives of the group . In carrying out its governance role, the main task of the board is to drive the performance of the group. The board must also ensure that the group complies with all of its contractual, statutory and any other legal obligations, including the requirements of any regulatory body.

Without intending to limit this general role of the board, the principal functions and responsibilities of the board include the following:

A) Providing leadership to the group by:

i) guiding the development of appropriate culture and values for the group through the establishment and review of codes of conduct, rules and procedures to enforce ethical behaviour, and by providing guidance on appropriate work methods; and

ii) always acting in a manner consistent with the group’s culture .

B) Overseeing the development and implementation of an appropriate strategy by:

i) working with the senior management team to ensure that an appropriate strategic direction and array of goals are in place;

ii) regularly reviewing and amending - or updating - the group’s strategic direction and goals;

iii) ensuring that an appropriate set of internal controls are implemented and reviewed regularly;

iv) overseeing planning activities including the development and approval of strategic plans, annual corporate budgets and long-term budgets including operating budgets, capital expenditure budgets and cash flow budgets; and

v) reviewing the progress and performance of the group in meeting these plans and corporate objectives, including reporting the outcome of such reviews on at least an annual basis .

C) Ensuring corporate accountability to the shareholders primarily through adopting an effective shareholder communications strategy; encouraging effective participation at general meetings and, through the Chairman, being the key interface between the group and its shareholders .

D) Overseeing the control and accountability systems that ensure the group is progressing towards the goals set by the board and in line with the group’s purpose, the agreed corporate strategy, legislative requirements and community expectations.

E) Ensuring robust and effective risk management, compliance and control systems (including legal compliance) are in place and operating effectively .

F) Ensuring appropriate human resource systems (including OH&S systems) are in place to ensure the well-being and effective contribution of all employees .

G) Making all decisions outside the scope of these delegated powers including:

i) approving all operational expenditures more than 10% outside the approved budget;

ii) approving the details of all items of capital expenditure;

iii) approving all mergers, acquisitions or property disposals; and

(iv) approving and monitoring the progress of major capital expenditure, capital management and acquisitions and divestitures . The detail of some board functions may be handled through board committees . However, the board as a whole is responsible for determining the extent of powers residing in each committee and is ultimately responsible for accepting, modifying or rejecting committee recommendations .

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CORPORATE GOVERNANCE STATEMENT (cont’d)

directors’authoritiesanddelegations

Directors are responsible for any delegations of their responsibilities with regard to corporate operations . As such, they decide as a board what group matters are delegated to either specific directors or management. In addition, they outline what controls are in place to oversee the operation of these delegated powers .

Therefore, individual directors other than the managing director have no authority to participate in the day-to-day management of the group including making any representations or agreements with member companies, suppliers, customers, employees or other parties or organisations .

The exception to this principle occurs where the board through resolution explicitly delegates an authority to the director individually. Additionally, it is recognised that all executive directors will carry significant delegated authority by virtue of their management position as outlined in a relevant board resolution .

Similarly, committees and their members require specific delegations from the board as a whole and these will be contained in each committee’s respective terms of reference .

generaldelegations

In general, the board delegates all powers and authorities required to effectively and efficiently carry out the group’s business. Listed below are the exceptions to these delegations, whereby the board or appropriate committee reserves the powers as indicated:

decisionsrequiringBoardaPProVal

The following decisions must be referred to the board for approval:

i) acquiring or selling shares of the group;

ii) acquiring, selling or otherwise disposing of property;

iii) founding, acquiring or selling subsidiaries of or any company within the group, participating in other companies or dissolving or selling the group’s participation in other companies (including project joint ventures);

iv) acquiring or selling patent rights, rights in registered trademarks, licences or other intellectual property rights of the group;

v) founding, dissolving or relocating branch offices or other offices, plants and facilities;

vi) starting new business activities, terminating existing business activities or initiating major changes to the field of the group’s business activities;

vii) approving and / or altering the annual business plan (including financial planning) for the group or any part of the group;

viii) taking or granting loans including, without limitation, the placing of credit orders, issuing of promissory notes or loans against notes;

ix) granting securities of any type;

x) granting loans to group officers or employees and giving or taking over guarantees for the group’s officers and employees;

xi) determining the balance sheet strategy for the group or any part of the group;

xii) entering into agreements for recurring, voluntary, or additional social benefits, superannuation agreements or agreements for general wage and salary increases;

xiii) determining the total amount of bonuses and gratuities for group officers and employees;

xiv) determining the appointment, termination, prolongation of employment or amendment to conditions of employment of members of the board of directors; and

xv) granting or revoking a power of attorney or limited authority to sign and / or act on behalf of the group.

The composition of the board is reviewed and considered at least annually at a meeting of all directors . Shareholder approval is required on the composition of the board. Directors are elected by shareholders and remain accountable to them. The board meet formally on a regular basis .

The board presently comprises two non-executive directors and one executive director. The group policy regarding the terms and conditions for remuneration relating to the appointment and retirement of board members is approved at a meeting of all directors . The directors of the group, meeting as a board, determine the fees of individual directors within the aggregate limit established by shareholders in general meeting .

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decisionsrequiringBoardaPProVal(cont’d)

The remuneration and terms and conditions of executive officers are reviewed and approved by the board after seeking professional advice .

Non-executive members have the right to seek independent professional advice in the furtherance of their duties as directors at the group’s expense. The chairman’s approval of such expenditure is required.

Where any director has an interest of any kind in relation to any matter dealt with at a board or committee meeting that director abstains from participation in the decision process .

Directors and officers must inform the chairman, in advance, of any proposed dealing in associated company securities, refrain from buying or selling in the period of five days before, the day of, and the day after announcements and observe all legal requirements relating to dealing in securities. Directors and officers are prohibited from acting on material information until it has been released to the market and adequate time has been given for this to be reflected in the security’s prices.

coMMunicationstoshareholders

The board aims to ensure that the shareholders, on behalf of whom they act, are informed of all information necessary to assess the performance of the directors . Information is communicated to shareholders through:

i) the Annual Report which is distributed to those shareholders who request a copy;

ii) the Annual General Meeting and other meetings called to obtain approval for board action as appropriate;

iii) the appointment of a contact for shareholder liaison to respond to telephone and written shareholder enquiries; and

iv) the company’s website - www.trusteesau.com.au.

keePingtheMarketinForMed

The group follows ASX guidelines and listing rules in respect of communications and continuous disclosure procedures and practices. The board specifically addresses the issue of price sensitive information at each of its board meetings. The group’s secretary is responsible for the communication of administrative matters to the ASX .

auditcoMMittee

Given the small size of the company and the fact that the board comprises only three directors, the board has elected not to appoint an audit committee for this financial year.

riskManageMent

The board as a whole considers the major risks affecting the business. Trustees Australia has developed a risk management system to evaluate and control risks effectively to ensure opportunities are not lost, competitive advantage is enhanced, and management time is not spent unduly in reacting to issues or events. It is not intended to eliminate risk. This risk management system encompasses all financial, operational and compliance controls and risk management, and is subject to regular review.

Major business risks have been identified as:

• quality of due diligence of investment opportunities;

• actions by competitors;

• environment regulation; and

• government policy changes .

Procedures have been developed to minimise the effect of these risks wherever possible.

Financial controls and procedures are clearly defined with the operating and capital budgets used as key controls for business operations . The board considers regular reports comparing actual results against the budgets set by the board .F

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asxcorPorategoVernancecouncilguidelines

While the board is committed to maintaining high standards of corporate governance, the company advises that its practices are not entirely consistent with the recommendations of the ASX Corporate Governance Council . These recommendations are set out below and the company has indicated to what degree the recommendations have been adopted by the board:

Principle 1 – Lay solid foundations for management and oversight

Companies should establish and disclose the respective roles and responsibilities of board and management .

Recommendation 1.1 Companies should establish the functions reserved to the board and those delegated to senior executives and disclose those functions .

Recommendation 1.2 Companies should disclose the process for evaluating the performance of senior executives

Recommendation 1 .3 Reporting on Principle 1 .

The company’s formalised statement of matters documenting the role and responsibilities of the board and senior executives are reproduced in this Corporate Governance Report .

The performance evaluation of the company’s senior executives is undertaken periodically by the managing director, who reports to the board on outcomes .

Principle 2 – Structure the board to add value

Companies should have a board of an effective composition, size and commitment to adequately discharge its responsibilities and duties .

Recommendation 2 .1 A majority of the board should be independent directors .

Recommendation 2 .2 The chair should be an independent director .

Recommendation 2.3 The roles of chair and chief executive officer should not be exercised by the same individual

Recommendation 2 .4 The board should establish a nomination committee .

Recommendation 2 .5 Companies should disclose the process for evaluating the performance of the board, its committees and individual directors .

Recommendation 2 .6 Companies should provide the information indicated in the Guide to reporting on Principle 2 .

While the board strongly endorses the position that director’s need to exercise independence of judgment, it also recognizes that the need for independence is to be balanced with the need for skills, commitment and a workable board size. The board currenlty comprises one executive director and two non-executive directors. Michael Hackett is the managing director and acting chairman of the board and is also a substantial shareholder of the company. Nathan Leman is a non-executive director and is an associate of Michael Hackett and therefore is not regarded as an independent director. Kerry Daly is an independent, non-exective director. In view of the size of the company and the nature of its activities the board considers that the current board is a cost effective and practical method of directing and managing the company .

The acting chairman is an executive director and is not considered independent under the ASX definition. The company is mindful of the costs and availability of an experienced non-executive independent chairman and is satisfied the current board structure is appropriate for the size of the company and the nature of its activities .

Currently, Michael Hackett acts as both acting chairman and managing director of the company. The board is cognisant of the need to seperate the roles of chairman and managing director but is also mindful of the costs and availability of an experienced non-executive, independent chairman. the position of acting chairman is temporary and will be filled by a suitable candidate when appropriate .

The board considers that the selection and appointment of directors is such an important task that it should be the responsibility of the entire board to consider the nomination process . As the board consists of only three directors, this is considered best practice at this stage in the group’s development .

While the board of the group is committed to accountability, the process for performance evaluation of the board, its committees individual directors and senior executives have not yet been determined. As a result the board has used informal, ongoing assessments to evaluate performance .

The company’s formal statement of matters documenting the procedures undertaken for the selection and appointment of new directors are reproduced in this Corporate Governance report .

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asxcorPorategoVernancecouncilguidelines(cont’d)

Principle 3 – Promote ethical and responsible decision-making

Companies should actively promote ethical and responsible decision-making.

Recommendation 3 .1 Companies should establish a code of conduct and disclose the code or a summary code as to:

i) the practices necessary to maintain confidence in the company’s integrity;ii) the practices necessary to take into account their legal obligations and the reasonable

expectations of their stakeholders; iii) the responsibility and accountability of individuals for reporting and investigating reports of

unethical practices .

Recommendation 3 .2 Companies should establish a policy concerning trading in company securities by directors, senior executives and employees, and disclose the policy or a summary of that policy.

Recommendation 3 .3 Companies should provide the information in the guide to reporting on Principle 3 .

Due to the size of the group and the resources available to it, the board does not consider that a formal code of conduct for directors and the managing director is appropriate, rather it is agreed that all officers of the group will act ethically and in the best interest of the group .

The board has decided against the implementation of a code of conduct to guide compliance with legal and other obligations to legitimate shareholders, as it does not believe that it is in the best interests of its stakeholders for the group to operate to what purports to be a prescriptive code of conduct .

The company closely monitors the trading of its securities and brings to the board’s attention all trading activities undertaken by its directors, senior executives and employees. A summary statement of how the company addresses the issues surrounding the trading of company securities by directors and employees prior to public announcements is provided in this Corporate Governance Statement .

The company has a formal policy which sets out time restrictions on share dealings . The company policy is that of the Corporations Act 2001 and ASX Listing Rules which state that dealings are not permitted at any time whilst in the posession of price sensitive information not already available to the market.

Principle 4 – Safeguard Integrity in Financial Reporting

Companies should have a structure to independently verify and safeguard the integrity of their financial reporting.

Recommendation 4 .1 The board should establish an audit committee .

Recommendation 4 .2 The audit committee should be structured so that it:

i) consists only of non-executive directors;ii) consists of a majority of independent directors;iii) is chaired by an independent chair, who is not chair of the board;iv) has at least three members .

Recommendation 4 .3 The audit committee should have a formal charter .


The role of the Audit Committee for this financial year has been assumed by the board. The size and nature of the company’s activities does not justify the establishment of such a committee at this time . The Audit Committee will be established as and when the need for such a committee arises and when established, will be structured in accordance with ASX Corporate Governance Recommendations and will have a formal charter .

The selection and appointment of the external auditor and for the rotation of external audit engagement partners is managed through the company’s service contract obligations and in-house compliance program.F

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asxcorPorategoVernancecouncilguidelines(cont’d)

Principle 5 – Make timely and balanced disclosure

Companies should promote timely and balanced disclosure of all material matters concerning the company .

Recommendation 5 .1 Companies should establish written policies designed to ensure compliance with ASX Listing Rule disclosure requirements and to ensure accountability at a senior executive level for that compliance and disclose those policies or a summary of those policies .


The company abides by these recommendations and a summary statement of how these issues are addressed is contained in this Corporate Governance Statement .

Principle 6 – Respect the rights of shareholders

Companies should respect the rights of shareholders and facilitate the effective exercise of those rights.

Recommendation 6 .1 Companies should design a communications policy for promoting effective communication with shareholders and encouraging their participation at general meetings and disclose their policy or a summary of that policy


The group maintains a strategy to promote communication with shareholders and encourage effective participation at general meetings on an issue by issue basis, which is considered appropriate to the size of the group and the scale of its operations . A summary of the company’s communication procedures is contained within this Corporate Governance Statement .

Principle 7 – Recognise and manage risk

Companies should establish a sound system of risk oversight and management and internal control.

Recommendation 7.1 Companies should establish policies for the oversight, and management of material business risks and disclose a summary of those policies .

Recommendation 7.2 The board should require management to design and implement the risk management and internal control system to manage the company’s material business risks and report to it on whether those risks are being managed effectively . The board should disclose that management has reported to it as to the effectiveness of the company’s management of its material business risks.

Recommendation 7.3 The board should disclose whether it has received assurance from the chief executive officer (or equivalent) and the chief financial officer (or equivalent) that the declaration provided in accordance with section 295A of the Corporations Act is founded on a sound system of risk management and internal control and that the system is operating effectively in all material respects in relation to financial reporting risks.


The board believes that within practical limitations, the risk management framework adopted by the company is sufficient for a company of its size and risk exposure. A summary of the company’s risk management framework, internal compliance measures and controls is contained in this Corporate Governance Statement .

Principle 8 – Remunerate fairly and responsibly

Companies should ensure that the level and composition of remuneration is sufficient and reasonable and that its relationship to performance is clear .

Recommendation 8 .1 The board should establish a remuneration committee .

Recommendation 8.2 Companies should clearly distinguish the structure of non-executive directors’ remuneration from that of executive directors and senior executives.


The role of the remuneration committee is currently assumed by the board . The size and nature of the company’s activities does not justify the need to establish a remuneration committee at this time . The Committee will be established as and when the need for such a committee arises and when established, will be structured in accordance with ASX Corporate Governance Recommendations and will have a formal charter .

Details of the company’s remuneration policy are provided in the accompanying Directors’ Report and Annual Report .

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AUDITOR’S INDEPENDENCE DECLARATIONF

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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2011

2011 2010

Notes $ $Revenue 3(a)(i) 4,469,255 5,971,086 Other income 3(a)(iii) 199,001 92,518 Business operating expenses (1,011,435) (1,230,201)Employment expenses 3(b)(iii) (3,248,280) (3,860,577)Finance costs 3(b)(i) (28,427) (37,200)Property operating expenses (1,036,678) (1,028,270)Impairment expenses 3(b)(iv) (5,965,663) - Other expenses (687,528) (482,438)Share of net profit / (loss) from associate (1,325,827) 97,167 Profit / (loss) before income tax 3 (8,635,582) (477,915)Income tax benefit /(expense) 4 (811,396) (703,845)Profit / (loss) for the year (9,446,978) (1,181,760)

Other comprehensive income for the period, net of tax:Net gain / (loss) on revaluation of financial assets 40,990 57,155 Net gain / (loss) on revaluation of land & buildings - (4,927,478) Other comprehensive income for the period, net of tax 40,990 (4,870,323)

Total comprehensive income for the period, net of tax (9,405,988) (6,052,083)

Profit / (loss) attributable to:Members of the parent entity (9,442,150) (1,189,328)Non-controlling interest (4,828) 7,568

(9,446,978) (1,181,760)

Total comprehensive income / (loss) attributable to:Members of the parent entity (9,401,160) (6,059,651)Non-controlling interest (4,828) 7,568

(9,405,988) (6,052,083)

Earnings per share: 26 Cents CentsBasic earnings per share (28 .5) (3 .6)Diluted earnings per share (28 .5) (3 .6)

The accompanying notes form part of these financial statements.For

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CONSOLIDATED STATEMENT OF FINANCIAL POSITION

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2011

2011 2010

Notes $ $Current Assets Cash and cash equivalents 5 569,055 66,826Trade and other receivables 6 480,721 727,817Inventories 7 11,803 9,151Other current assets 8 118,005 104,518Total Current Assets 1,179,584 908,312

Non-Current Assets Inventories 7 4,326,451 4,179,500Deferred tax assets 9 - 909,493Other financial assets 10 134,274 1,257,364Intangibles 11 1,005,133 1,113,620Investments in associates 12 1,719,485 3,045,313Property, plant & equipment 13 4,858,660 10,895,123Total Non-Current Assets 12,044,003 21,400,413

Total Assets 13,223,587 22,308,725

Current Liabilities Trade and other payables 14 1,201,294 1,147,627Borrowings 15 74,109 82,426Current tax liabilities 9 - (44,810)Provisions 16 10,931 96,143Total Current Liabilities 1,286,334 1,281,386

Non-Current LiabilitiesTrade and other payables 14 352,797 -Borrowings 15 32,510 45,702Deferred tax liability 9 - 81,645Provisions 16 137,819 57,902Total Non-Current Liabilities 523,126 185,249

Total Liabilities 1,809,460 1,466,635

Net Assets 11,414,127 20,842,090

Equity Issued capital 17 4,058,525 4,058,525Reserves 18 49,508 (12,500)Retained earnings 7,301,934 16,668,963Parent entity interest 11,409,967 20,714,988Non-controlling interest 4,160 127,102Total Equity 11,414,127 20,842,090

The accompanying notes form part of these financial statements.

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CONSOLIDATED STATEMENT OF CASH FLOWS

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2011

2011 2010

Notes $ $

Cash Flows from Operating Activities Receipts from customers 5,077,029 6,347,763Payments to suppliers and employees (5,707,731) (6,753,451)Trust distributions - 163,561Interest received 31,088 77,354Dividend received 41,942 64,402Income tax received 44,810 - Finance costs (28,427) (37,200)Net operating cash flows 5(b) (541,289) (137,571) Cash Flows from Investing ActivitiesPayment for property, plant & equipment 25 (78,602) (194,394)Payment for development costs - AC2 land (146,951) (109,027)Payment for subsidiaries, net of cash acquired 22(C) - (474,751)Purchase of intangible assets - development software - (33,271)Proceeds from sale of financial investments 1,290,593 721,710Purchase of available for sale financial investments - (136,413)Net investing cash flows 1,065,041 (226,146)

Cash Flows from Financing Activities Proceeds from commercial bill facility - 350,000

Payment for acquisition of minority interests 22(B) (10) -

Proceeds from other borrowings 143,124 126,397Repayment of borrowings (164,636) (420,355)Net financing cash flows (21,522) 56,042Net increase / (decrease) in cash held 502,229 (307,675)Cash at the beginning of the period 66,826 374,501Cash at the end of the financial period 5(a) 569,055 66,826


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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2011

Issued Capital

Ordinary

Asset Revaluation

Reserve

Financial Asset

Revaluation Reserve

Option Reserve

Non-Controlling

Interests

Retained Earnings Total

$ $ $ $ $ $ $

Balance at 1 July 2010 4,058,525 - (38,386) 25,886 127,102 16,668,963 20,842,090

Profit / (loss) attributable to members of parent entity - - - - - (9,442,150) (9,442,150)

Profit / (loss) attributable to non-controlling interests - - - - (4,828) - (4,828)

Amortisation of options for period - - - 21,018 - - 21,018

Transfer (to) / from retained earnings - - - - (118,114) 75,121 (42,993)

Total other comprehensive income for the period - - 40,990 - - - 40,990

Balance at 30 June 2011 4,058,525 - 2,604 46,904 4,160 7,301,934 11,414,127

Balance at 1 July 2009 4,058,525 4,927,478 (95,541) 4,868 111,157 17,866,668 26,873,155

Profit / (loss) attributable to members of parent entity - - - - - (1,189,328) (1,189,328)

Profit / (loss) attributable to non-controlling interests - - - - 7,568 - 7,568

Amortisation of options for period - - - 21,018 - - 21,018

Transfer (to) / from retained earnings - - - - 8,377 (8,377) -

Total other comprehensive income for the period - (4,927,478) 57,155 - - - (4,870,323)

Balance at 30 June 2010 4,058,525 - (38,386) 25,886 127,102 16,668,963 20,842,090


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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 30 JUNE 2011

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

The financial report includes the consolidated financial statements and notes of Trustees Australia Limited (Trustees Australia) and controlled entities (the group) . Trustees Australia is a listed public company, incorporated and domiciled in Australia .

The separate financial statements of the parent entity, Trustees Australia Limited, have not been presented within this financial report as permitted by the Corporations Act 2001 .

BasisoFPreParation

The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards board and the Corporations Act 2001 .

Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a financial report containing relevant and reliable information about transactions, events and conditions . Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards. Material accounting policies adopted in the preparation of this financial report are presented below. They have been consistently applied unless otherwise stated .

The financial report has been prepared on an accruals basis and is based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities.

a.currentratio

The group’s net current asset deficiency arises primarily from the utilisation of cash reserves to fund business development and operations during the 2011 year. The group has access to $1 million of unused bank facilities, and these unused facilities will be utilised to fund any cash shortfall arising from the repayment of current liabilities .

B.Principlesofconsolidation

The consolidated financial statements incorporate the assets, liabilities and results of entities controlled by Trustees Australia at the end of the reporting period . A controlled entity is any entity over which Trustees Australia has the ability and right to govern the financial and operating policies so as to obtain benefits from the entity’s activities.

Where controlled entities have entered or left the group during the year, the financial performance of those entities is included only for the period of the year that they were controlled. A list of controlled entities is contained in Note 22 to the financial statements.

In preparing the consolidated financial statements, all inter-group balances and transactions between entities in the consolidated group have been eliminated in full on consolidation .

Non-controlling interests, being the equity in a subsidiary not attributable, directly or indirectly, to a parent, are reported separately within the equity section of the Statement of Financial Position and Statement of Comprehensive Income. The non-controlling interests in the net assets comprise their interests at the date of the original business combination and their share of changes in equity since that date.

Business combinations

Business combinations occur where an acquirer obtains control over one or more businesses.

A business combination is accounted for by applying the acquisition method, unless it is a combination involving entities or businesses under common control . The business combination will be accounted for from the date that control is attained, whereby the fair value of the identifiable assets acquired and liabilities (including contingent liabilities) assumed is recognised (subject to certain limited exemptions).

When measuring the consideration transferred in the business combination, any asset or liability resulting from a contingent consideration arrangement is also included. Subsequent to initial recognition, contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity. Contingent consideration classified as an asset or liability is remeasured each reporting period to fair value, recognising any change to fair value in profit or loss, unless the change in value can be identified as existing at acquisition date.

All transaction costs incurred in relation to the business combination are expensed to the Statement of Comprehensive Income.

The acquisition of a business may result in the recognition of goodwill or a gain from a bargain purchase.

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NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)

B.Principlesofconsolidation(cont’d)

Goodwill

Goodwill is carried at cost less accumulated impairment losses. Goodwill is calculated as the excess of the sum of:

(i) the consideration transferred;

(ii) any non-controlling interest; and

(iii) the acquisition date fair value of any previously held equity interest;

over the acquisition date fair value of net identifiable assets acquired.

The acquisition date fair value of the consideration transferred for a business combination plus the acquisition date fair value of any previously held equity interest shall form the cost of the investment in the separate financial statements.

Fair value uplifts in the value of pre-existing equity holdings are taken to the Statement of Comprehensive Income. Where changes in the value of such equity holdings had previously been recognised in other comprehensive income, such amounts are recycled to profit or loss.

The amount of goodwill recognised on acquisition of each subsidiary in which the group holds less than a 100% interest will depend on the method adopted in measuring the non-controlling interest. The group can elect in most circumstances to measure the non-controlling interest in the acquiree either at fair value (full goodwill method) or at the non-controlling interest’s proportionate share of the subsidiary’s identifiable net assets (proportionate interest method). In such circumstances, the group determines which method to adopt for each acquisition and this is stated in the respective notes to these financial statements disclosing the business combination .

Under the full goodwill method, the fair value of the non-controlling interest is determined using valuation techniques which make the maximum use of market information where available. Under this method, goodwill attributable to the non-controlling interests is recognised in the consolidated financial statements.

Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill on acquisition of associates is included in investments in associates .

Goodwill is tested for impairment annually and is allocated to the group’s cash-generating units or groups of cash-generating units, representing the lowest level at which goodwill is monitored not larger than an operating segment . Gains and losses on the disposal of an entity include the carrying amount of goodwill related to the entity disposed of .

Changes in the ownership interests in a subsidiary are accounted for as equity transactions and do not affect the carrying values of goodwill .

c.incometax

The income tax expense (revenue) for the year comprises current income tax expense (income) and deferred tax expense (income) .

Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using applicable income tax rates enacted, or substantially enacted, as at reporting date. Current tax liabilities (assets) are therefore measured at the amounts expected to be paid to (recovered from) the relevant taxation authority.

Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as well unused tax losses.

Current and deferred income tax expense (income) is charged or credited directly to equity instead of the profit or loss when the tax relates to items that are credited or charged directly to equity.

Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where amounts have been fully expensed but future tax deductions are available. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss.

Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates enacted or substantively enacted at reporting date. Their measurement also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or liability.

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c.incometax(cont’d)

Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.

Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures, deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be controlled and it is not probable that the reversal will occur in the foreseeable future .

Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and liabilities are offset where a legally enforceable right of set-off exists, the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur in future periods in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled.

Trustees Australia Limited and its wholly-owned Australian subsidiaries have formed an income tax consolidated group under the tax consolidation regime. Each entity in the group recognises its own current and deferred tax assets and liabilities, except for any deferred tax liabilities resulting from unused tax losses and tax credits, which are immediately assumed by the head entity. The current tax liability of each group entity is then subsequently assumed by the parent entity. The group notified the Australian Tax Office that it had formed an income tax consolidated group to apply from 1 July 2004. The tax consolidated group has entered a tax sharing agreement whereby each company in the group contributes to the income tax payable in proportion to their contribution to the net profit before tax of the tax consolidated group.

d.inventories

Inventories are measured at the lower of cost and net realisable value. Costs are assigned on the basis of first-in-first-out.

e.landfordevelopment

Land held for development and sale is valued at the lower of cost and net realisable value. Cost includes the cost of acquisition, development, borrowing costs and holding costs until completion of development .

Finance costs and holding charges incurred after development are expensed. Profits are brought to account on the signing of an unconditional contract of sale .

F.Property,Plantandequipment

Each class of property, plant and equipment is carried at cost or fair value less, where applicable, any accumulated depreciation and impairment losses .

Property

Freehold land and buildings are shown at their fair value (being the amount for which an asset could be exchanged between knowledgeable willing parties in an arm’s length transaction), based on periodic valuations by external independent valuers, less subsequent depreciation for buildings. Valuation assessments are also conducted by management using the same methodology applied in previous independent valuations, taking into account comparable rentals and capitalisation rates to recent new leases and sales achieved which reflect the prevailing economic conditions, to assess whether the book values represent fair values.

Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset .

Increases in the carrying amount arising on revaluation of land and buildings are credited to a revaluation reserve in equity. Decreases that offset previous increases of the same asset are charged against fair value reserves directly in equity, all other decreases are charged to the income statement .

Plant and equipment

Plant and equipment are measured on the cost basis.

The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the asset’s employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts .

The cost of fixed assets constructed within the group includes the cost of materials, direct labour, borrowing costs and an appropriate proportion of fixed and variable overheads.

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F.Property,Plantandequipment(cont’d)

Plant and equipment (cont’d)

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred .

Depreciation

The depreciable amount of all fixed assets including building and capitalised lease assets, but excluding freehold land, is depreciated on a straight-line basis over their useful lives to the group commencing from the time the asset is held ready for use. Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements .

The useful-life rates used for each class of depreciable assets are:

Class of Fixed Assets Depreciation Rate (years)

Buildings 40

Leasehold improvementes 10

Plant and equipment 10-15

Leased plant and equipment 2-8

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date . An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount .

Gains and losses on disposals are determined by comparing proceeds with the carrying amount . These gains and losses are included in the income statement . When revalued assets are sold, amounts included in the revaluation reserve relating to that asset are transferred to retained earnings .

g.leases

Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset, but not the legal ownership that is transferred to entities in the group, are classified as finance leases.

Finance leases are capitalised by recording an asset and a liability at the lower of the amounts equal to the fair value of the leased property or the present value of the minimum lease payments, including any guaranteed residual values . Lease payments are allocated between the reduction of the lease liability and the lease interest expense for the period.

Leased assets are depreciated on a straight-line basis over the shorter of their estimated useful lives or the lease term.

Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are charged as expenses in the periods in which they are incurred.

Lease incentives under operating leases are recognised as a liability and amortised on a straight-line basis over the life of the lease term .

h.Financialinstruments

Recognition and Initial Measurement

Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual provisions to the instrument. For financial assets, this is equivalent to the date that the company commits itself to either the purchase or sale of the asset (i .e . trade date accounting is adopted) .

Financial instruments are initially measured at fair value plus transaction costs, except where the instrument is classified ‘at fair value through profit or loss’, in which case transaction costs are expensed to profit or loss immediately.

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h.Financialinstruments(cont’d)

Classification and Subsequent Measurement

Financial instruments are subsequently measured at either of fair value, amortised cost using the effective interest rate method, or cost. Fair value represents the amount for which an asset could be exchanged or a liability settled, between knowledgeable, willing parties. Where available, quoted prices in an active market are used to determine fair value. In other circumstances, valuation techniques are adopted.

Amortised cost is calculated as:

a. the amount at which the financial asset or financial liability is measured at initial recognition;

b . less principal repayments;

c . plus or minus the cumulative amortisation of the difference, if any, between the amount initially recognised and the maturity amount calculated using the effective interest method; and

d . less any reduction for impairment .

The effective interest method is used to allocate interest income or interest expense over the relevant period and is equivalent to the rate that exactly discounts estimated future cash payments or receipts (including fees, transaction costs and other premiums or discounts) through the expected life (or when this cannot be reliably predicted, the contractual term) of the financial instrument to the net carrying amount of the financial asset or financial liability. Revisions to expected future net cash flows will necessitate an adjustment to the carrying value with a consequential recognition of an income or expense in profit or loss.

The group does not designate any interests in subsidiaries, associates or joint venture entities as being subject to the requirements of accounting standards specifically applicable to financial instruments.

Financial assets at fair value through profit or loss

Financial assets are classified at ‘fair value through profit or loss’ when they are either held for trading for the purpose of short-term profit taking, derivatives not held for hedging purposes, or when they are designated as such to avoid an accounting mismatch or to enable performance evaluation where a group of financial assets is managed by key management personnel on a fair value basis in accordance with a documented risk management or investment strategy. Such assets are subsequently measured at fair value with changes in carrying value being included in profit or loss.

i. Financial assets at fair value through profit or loss

Financial assets are classified at ‘fair value through profit or loss’ when they are either held for trading for the purpose of short-term profit taking, derivatives not held for hedging purposes, or when they are designated as such to avoid an accounting mismatch or to enable performance evaluation where a group of financial assets is managed by key management personnel on a fair value basis in accordance with a documented risk management or investment strategy. Such assets are subsequently measured at fair value with changes in carrying value being included in profit or loss.

ii. Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are subsequently measured at amortised cost.

Loans and receivables are included in current assets, except for those which are not expected to mature within 12 months after the end of the reporting period. (All other loans and receivables are classified as non-current assets).

iii. Held-to-maturity investments

Held-to-maturity investments are non-derivative financial assets that have fixed maturities and fixed or determinable payments, and it is the group’s intention to hold these investments to maturity. They are subsequently measured at amortised cost .

Held-to-maturity investments are included in non-current assets, except for those which are expected to mature within 12 months after the end of the reporting period. (All other investments are classified as current assets).

If during the period the group sold or reclassified more than an insignificant amount of the held-to-maturity investments before maturity, the entire held-to-maturity investments category would be tainted and reclassified as available-for-sale.

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h.Financialinstruments(cont’d)

Financial assets at fair value through profit or loss (cont’d)

iv. Available-for-sale financial assets

Available-for-sale financial assets are non-derivative financial assets that are either not suitable to be classified into other categories of financial assets due to their nature, or they are designated as such by management. They comprise investments in the equity of other entities where there is neither a fixed maturity nor fixed or determinable payments.

Available-for-sale financial assets are included in non-current assets, except for those which are expected to mature within 12 months after the end of the reporting period. (All other financial assets are classified as current assets).

v. Financial liabilities

Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost

Fair Value

Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to determine the fair value for all unlisted securities, including recent arm’s length transactions, reference to similar instruments and option pricing models .

Impairment

At each reporting date, the group assesses whether there is objective evidence that a financial instrument has been impaired. In the case of available-for-sale financial instruments, a prolonged decline in the value of the instrument is considered to determine whether an impairment has arisen . Impairment losses are recognised in the Statement of Comprehensive Income .

Financial Guarantees

Where material, financial guarantees issued, which require the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due, are recognised as a financial liability at fair value on initial recognition .

The guarantee is subsequently measured at the higher of the best estimate of the obligation and the amount initially recognised less, when appropriate, cumulative amortisation in accordance with AASB 118: Revenue . Where the entity gives guarantees in exchange for a fee, revenue is recognised under AASB 118.

The fair value of financial guarantee contracts has been assessed using a probability weighted discounted cash flow approach. The probability has been based on:

• the likelihood of the guaranteed party defaulting in a year period;

• the proportion of the exposure that is not expected to be recovered due to the guaranteed party defaulting; and

• the maximum loss exposed if the guaranteed party were to default.

Derecognition

Financial assets are derecognised where the contractual rights to receipt of cash flows expires or the asset is transferred to another party whereby the entity no longer has any significant continuing involvement in the risks and benefits associated with the asset. Financial liabilities are derecognised where the related obligations are either discharged, cancelled or expired. The difference between the carrying value of the financial liability extinguished or transferred to another party and the fair value of consideration paid, including the transfer of non-cash assets or liabilities assumed, is recognised in profit or loss.

i.impairmentofassets

At each reporting date, the group reviews the carrying values of its tangible and intangible assets to determine whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is compared to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed to the Statement of Comprehensive Income.

Impairment testing is performed annually for goodwill and intangible assets with indefinite lives.

Where it is not possible to estimate the recoverable amount of an individual asset, the group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

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J.investmentsinassociates

Associate companies are companies in which the group has significant influence through holding, directly or indirectly, 20% or more of the voting power of the company. Investments in associates are accounted for in the financial statements by applying the equity method of accounting whereby the investment is initially recognised at cost and adjusted thereafter for the post-acquisition change in the group’s share of net assets of the associate company. In addition the group’s share of the profit or loss of the associate company is included in the group’s profit or loss.

The carrying amount of the investment includes goodwill relating to the associate. Any excess of the group’s share of the net fair value of the associate’s identifiable assets, liabilities and contingent liabilities over the cost of the investment is excluded from the carrying amount of the investment and is instead included as income in the determination of the investor’s share of the associate’s profit or loss in the period in which the investment is acquired.

Profits and losses resulting from transactions between the group and the associate are eliminated to the extent of the relation to the group’s investment in the associate .

When the reporting dates of the group and the associate are different, the associate prepares, for the group’s use, financial statements as of the same date as the financial statements of the group with adjustments being made for the effects of significant transactions or events that occur between that date and the date of the investor’s financial statements.

When the group’s share of losses in an associate equals or exceeds its interest in the associate, the group discontinues recognising its share of further losses unless it has incurred legal or constructive obligations or made payments on behalf of the associate. When the associate subsequently makes profits, the group will resume the recognition of its share of those profits once its share of the profits equals the share of the losses not recognised.

Details of the group’s investments in associates are shown at Note 12 .

k.intangiblesotherthangoodwill

Trademarks

Patents and trademarks are recognised at cost of acquisition. Patents and trademarks have a finite life and are carried at cost less any accumulated amortisation and any impairment losses. Patents and trademarks are amortised over their useful life.

Software

Software which has been externally acquired is recognised at cost of acquisition. Once the software is fully operational, this expenditure will have a finite useful life and will be carried at cost less any accumulated amortisation and impairment losses.

l.employeeBenefits

Provision is made for the company’s liability for employee benefits arising from services rendered by employees to balance date. Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled. Employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits. Those cashflows are discounted using market yields on national government bonds with terms to maturity that match the expected timing of cash flows.

M.equity-settledcompensation

The fair value of the equity to which employees become entitled is measured at grant date and recognised as an expense over the vesting period, with a corresponding increase to an equity account. The fair value of shares is ascertained as the market bid price. The fair value of options is ascertained using a binomial pricing model which incorporates all market vesting conditions. The number of shares and options expected to vest is reviewed and adjusted at each reporting date such that the amount recognised for services received as consideration for the equity instruments granted shall be based on the number of equity instruments that eventually vest .

n.Provisions

Provisions are recognised when the group has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured.

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o.cashandcashequivalents

Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within short-term borrowings in current liabilities on the Statement of Financial Position .

P.revenueandotherincome

Revenue is measured at the fair value of the consideration received or receivable after taking into account any trade discounts and volume rebates allowed. Any consideration deferred is treated as the provision of finance and is discounted at a rate of interest that is generally accepted in the market for similar arrangements. The difference between the amount initially recognised and the amount ultimately received is interest revenue .

Revenue from the sale of goods is recognised at the point of delivery as this corresponds to the transfer of significant risks and rewards of ownership of the goods and the cessation of all involvement in those goods .

Interest revenue is recognised using the effective interest rate method, which, for floating rate financial assets, is the rate inherent in the instrument . Dividend revenue is recognised when the right to receive a dividend has been established .

Commission income is taken to account when payment is made to the service provider or the monies are satisfactorily accounted for to the service provider and settlement made .

Dividends received from associates and joint venture entities are accounted for in accordance with the equity method of accounting.

Revenue recognition relating to the provision of services is determined with reference to the stage of completion of the transaction at reporting date and where outcome of the contract can be estimated reliably .

All revenue is stated net of the amount of goods and services tax (GST).

q.tradeandotherPayables

Trade and other payables represent the liability outstanding at the end of the reporting period for goods and services received by the group during the reporting period which remains unpaid . The balance is recognised as a current liability with the amount being normally paid within 30 days of recognition of the liability .

r.Borrowingcosts

Borrowing costs directly attributable to the acquisition, construction or production of assets that necessarily take a substantial period of time to prepare for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale .

All other borrowing costs are recognised in income in the period in which they are incurred .

s.goodsandservicestax(gst)

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the Statement of Financial Position are shown inclusive of GST .

Cash flows are presented in the Statement of Cash Flows on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows.

t.governmentgrants

Government grants are recognised at fair value where there is reasonable assurance that the grant will be received and all grant conditions will be met. Grants relating to expense items are recognised as income over the periods necessary to match the grant to the costs they are compensating . Grants relating to assets are credited to deferred income at fair value and are credited to income over the expected useful life of the asset on a straight-line basis.

u.comparativeFigures

When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year.

When the group applies an accounting policy retrospectively, makes a retrospective restatement or reclassifies items in its financial statements, a Statement of Financial Position as at the beginning of the earliest comparative period will be disclosed .

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V.trustee/responsibleentityobligations

Trustees Australia acts as responsible entity for managed investment schemes registered with the Australian Securities and Investment Commission . A responsible entity is liable for limited obligations of its underlying trusts, and generally has a right of indemnity against the trusts’ assets. These financial statements do not recognise such liabilities except to the extent that the group has committed a breach of fiduciary duty, or the extent that an underlying trust might have insufficient assets to settle its obligations. Such circumstances have not arisen . Trustees Australia has no obligation in respect of any borrowing or other liability of any trust for which it acts as responsible entity .

The Directors’ Report contains a statement regarding the financial services licence to act as Responsible Entity.

The Consolidated Cash Flow Statement does not reflect any cash flows attributable to the activities of the group undertaken on behalf of the Trust. At balance date, there have been no breaches of fiduciary duty by the Responsible Entity to the directors’ knowledge and the assets of the Trust are sufficient to meet its liabilities.

Commissions and fees earned in respect of the Trust’s activities are included in the Statement of Comprehensive Income, which also includes commissions and fees earned or paid from fund management activities .

W.criticalaccountingestimatesandJudgments

The directors evaluate estimates and judgments incorporated into the financial report based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the group.

Key Estimates

(i) Impairment

The group assesses impairment at each reporting date by evaluating conditions and events specific to the group that may be indicative of impairment triggers. Recoverable amounts of relevant assets are reassessed using value-in-use calculations which incorporate various key assumptions.

With respect to cash flow projections for plant and equipment, growth rates of 5% have been factored into valuation models for the next five years on the basis of management’s expectations around the group’s continued ability to capture market share from competitors. The rates used incorporate allowance for inflation. Pre-tax discount rates of 18% have been used in all models .

No impairment has been recognised in respect of goodwill at reporting date .

(ii) Property Valuations

The directors make assessments of land and buildings and development property valuations on the basis outlined in Note 1 (E) & (F) .

Key Judgments

(i) Future Tax Benefit of Tax Losses

At 30 June 2011, the directors reassessed the recoverability of the future tax benefits of tax losses and consider there is no certainty that future taxable profit will be available to enable the benefit of tax losses to be realised. At each period end the directors will reassess the recoverability of the future tax benefit of these tax losses.

(ii) Available-for-sale investments

The group maintains a portfolio of securities with a carrying value of $134,274 at reporting date .

At 30 June 2011, the directors reviewed the carrying value of individual investments and determined that four investments had declined in value in the last financial year. The directors do not believe that the decline for two of the four investments constitutes a significant or prolonged decline below cost at this stage and hence no impairment has been recognised for these. Should share values decline to a significant level which is below cost or should prices remain at levels below cost for a prolonged period, the directors have determined that such investments will be considered impaired in the future . The directors believe the two investments with a decline are significant and as such have been impaired by $48,111 (2010: $nil).

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x.newaccountingstandardsforapplicationinfutureperiods

The AASB has issued new and amended Accounting Standards and Interpretations that have mandatory application dates for future reporting periods and which the company has decided not to early adopt. A discussion of those future requirements and their impact on the company is as follows:

AASB 9: Financial Instruments (December 2010) (applicable for annual reporting periods commencing on or after 1 January 2013).

This Standard is applicable retrospectively and includes revised requirements for the classification and measurement of financial instruments, as well as recognition and derecognition requirements for financial instruments. The company has not yet determined any potential impact on the financial statements.

The key changes made to accounting requirements include:

• simplifying the classifications of financial assets into those carried at amortised cost and those carried at fair value;

• simplifying the requirements for embedded derivatives;

• removing the tainting rules associated with held-to-maturity assets;

• removing the requirements to separate and fair value embedded derivatives for financial assets carried at amortised cost;

• allowing an irrevocable election on initial recognition to present gains and losses on investments in equity instruments that are not held for trading in other comprehensive income . Dividends in respect of these investments that are a return on investment can be recognised in profit or loss and there is no impairment or recycling on disposal of the instrument;

• requiring financial assets to be reclassified where there is a change in an entity’s business model as they are initially classified based on: (a) the objective of the entity’s business model for managing the financial assets; and (b) the characteristics of the contractual cash flows; and

• requiring an entity that chooses to measure a financial liability at fair value to present the portion of the change in its fair value due to changes in the entity’s own credit risk in other comprehensive income, except when that would create an accounting mismatch. If such a mismatch would be created or enlarged, the entity is required to present all changes in fair value (including the effects of changes in the credit risk of the liability) in profit or loss.

AASB 1053: Application of Tiers of Australian Accounting Standards and AASB 2010–2: Amendments to Australian Accounting Standards arising from Reduced Disclosure Requirements [AASB 1, 2, 3, 5, 7, 8, 101, 102, 107, 108, 110, 111, 112, 116, 117, 119, 121, 123, 124, 127, 128, 131, 133, 134, 136, 137, 138, 140, 141, 1050 & 1052 and Interpretations 2, 4, 5, 15, 17, 127, 129 & 1052] (applicable for annual reporting periods commencing on or after 1 July 2013).

AASB 1053 establishes a revised differential financial reporting framework consisting of two tiers of financial reporting requirements for those entities preparing general purpose financial statements:

• Tier 1: Australian Accounting Standards; and

• Tier 2: Australian Accounting Standards – Reduced Disclosure Requirements.

Tier 2 of the framework comprises the recognition, measurement and presentation requirements of Tier 1, but contains significantly fewer disclosure requirements.

The following entities are required to apply Tier 1 reporting requirements (i.e. full IFRS):

• for-profit private sector entities that have public accountability; and

• the Australian Government and state, territory and local governments .

Since the company is a for-profit private sector entity that has public accountability, it does not qualify for the reduced disclosure requirements for Tier 2 entities.

AASB 2010–2 makes amendments to Australian Accounting Standards and Interpretations to give effect to the reduced disclosure requirements for Tier 2 entities. It achieves this by specifying the disclosure paragraphs that a Tier 2 entity need not comply with as well as adding specific “RDR” disclosures.

AASB 2010–4: Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project [AASB 1, AASB 7, AASB 101 & AASB 134 and Interpretation 13] (applicable for annual reporting periods commencing on or after 1 January 2011) .

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x.newaccountingstandardsforapplicationinfutureperiods(cont’d)

This Standard details numerous non-urgent but necessary changes to Accounting Standards arising from the IASB’s annual improvements project . Key changes include:

• clarifying the application of AASB 108 prior to an entity’s first Australian-Accounting-Standards financial statements;

• adding an explicit statement to AASB 7 that qualitative disclosures should be made in the context of the quantitative disclosures to better enable users to evaluate an entity’s exposure to risks arising from financial instruments;

• amending AASB 101 to the effect that disaggregation of changes in each component of equity arising from transactions recognised in other comprehensive income is required to be presented, but is permitted to be presented in the statement of changes in equity or in the notes;

• adding a number of examples to the list of events or transactions that require disclosure under AASB 134; and

• making sundry editorial amendments to various Standards and Interpretations.

This Standard is not expected to impact the company.

AASB 2010–5: Amendments to Australian Accounting Standards [AASB 1, 3, 4, 5, 101, 107, 112, 118, 119, 121, 132, 133, 134, 137, 139, 140, 1023 & 1038 and Interpretations 112, 115, 127, 132 & 1042] (applicable for annual reporting periods beginning on or after 1 January 2011).

This Standard makes numerous editorial amendments to a range of Australian Accounting Standards and Interpretations, including amendments to reflect changes made to the text of IFRSs by the IASB. However, these editorial amendments have no major impact on the requirements of the respective amended pronouncements.

AASB 2010–6: Amendments to Australian Accounting Standards – Disclosures on Transfers of Financial Assets [AASB 1 & AASB 7] (applicable for annual reporting periods beginning on or after 1 July 2011).

This Standard adds and amends disclosure requirements about transfers of financial assets, especially those in respect of the nature of the financial assets involved and the risks associated with them. Accordingly, this Standard makes amendments to AASB 1: First-time Adoption of Australian Accounting Standards, and AASB 7: Financial Instruments: Disclosures, establishing additional disclosure requirements in relation to transfers of financial assets.

This Standard is not expected to impact the company.

AASB 2010–7: Amendments to Australian Accounting Standards arising from AASB 9 (December 2010) [AASB 1, 3, 4, 5, 7, 101, 102, 108, 112, 118, 120, 121, 127, 128, 131, 132, 136, 137, 139, 1023 & 1038 and Interpretations 2, 5, 10, 12, 19 & 127] (applies to periods beginning on or after 1 January 2013).

This Standard makes amendments to a range of Australian Accounting Standards and Interpretations as a consequence of the issuance of AASB 9: Financial Instruments in December 2010 . Accordingly, these amendments will only apply when the entity adopts AASB 9 .

As noted above, the company has not yet determined any potential impact on the financial statements from adopting AASB 9.

AASB 2010-8: Amendments to Australian Accounting Standards - Deferred Tax Recovery of Underlying Assets (AASB - 112) (applies to periods beginning on or after 1 January 2012).

This Standard makes amendments to AASB 112: Income Taxes.

The amendments brought in by this Standard introduce a more practical approach for measuring deferred tax liabilities and deferred tax assets when investment property is measured using the fair value model under AASB 140: Investment Property.

Under the current AASB 112, the measurement of deferred tax liabilities and deferred tax assets depends on whether an entity expects to recover an asset by using it or by selling it. The amendments introduce a presumption that an investment property is recovered entirely through sale . This presumption is rebutted if the investment property is held within a business model whose objective is to consume substantially all of the economic benefits embodied in the investment property over time, rather than through sale .

The amendments brought in by this Standard also incorporated Interpretation 121 into AASB 112 .

The potential impact of these amendments has not yet been determined .

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NOTE 2: PARENT INFORMATION

The following information has been extracted from the books and records of the parent and has been prepared in accordance with Accounting Standards .

2011 2010$ $

statementofFinancialPosition

AssetsCurrent Assets 106,992 46,817 Total Assets 20,617,980 25,239,252

LiabilitiesCurrent Liabilities 89,375 63,147 Total Liabilities 89,375 3,360,011

EquityIssued capital 4,058,525 4,058,525 Reserves 46,904 (9,249)Retained earnings 16,423,176 17,829,965 Total Equity 20,528,605 21,879,241

statementofcomprehensiveincome

Total profit / (loss) (1,406,789) (52,576)Total comprehensive income / (loss) (1,371,654) (87,711)

Contingent liabilities and guarantees

Since the last annual reporting period, there has been no material change in the contingent liabilities of Trustees Australia except for the following:

Trustees Australia and the following subsidiary companies have been parties to a Deed of Cross Guarantee since 17 June 1994 . The deed provided that all parties to the deed would guarantee each creditor payment in full of any debt of each company participating in the deed on the winding-up of that company.

• Queensland Resorts Pty Ltd

• Corporate Solutions Pty Ltd

• QTI Managed Funds Limited

• Australian Share Registers Pty Ltd

• Magnums Backpackers & Bar Pty Ltd

• Budget Traveller Group Pty Ltd

On 26 June 2011 all parties to the deed executed a Deed of Revocation of Cross Guarantee, which was lodged with the Australian Securities & Investment Commission on 30 June 2011 and advertised as required by the Corporations Act 2001 .

Contractual commitments

At 30 June 2011, Trustees Australia had not entered into any contractual commitments for the acquisition of property, plant and equipment (2010: $nil).

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NOTE 3: REVENUE AND EXPENSES(a) Revenue 2011 2010

(i)revenue Notes $ $Rendering of services 1,970,554 2,741,879 Financial services income 2,155,705 2,721,478 Management fees received 18,044 20,735 Sale of goods 78,562 161,940

4,222,865 5,646,032 (ii)otherrevenueDividends received - other corporations 44,094 66,775 Interest received (a)(iv) 31,088 101,895 Rental revenue - 3,900 Grant funding 9,232 8,456 Other revenue 161,976 144,028

246,390 325,054 Total Revenue 4,469,255 5,971,086

(iii)otherincomeGain on remeasurement of investment on conversion to associate - 70,986 Gain on acquisition of minority interests 42,981 - Net gain on disposal of non-current investments 156,020 21,532

199,001 92,518 (iv)interestincomeRelated party 15,153 65,455 Other persons 15,935 36,440

31,088 101,895 (b) Expenses

(i)FinancecostsBank loans and overdrafts (17,454) (28,063)Finance charges payable under finance leases (10,973) (9,137)

(28,427) (37,200)(ii)depreciationandamortisationofnon-currentassetsIntangibles (547) (548)Software (107,940) (80,291)Buildings (81,348) (90,298)Leasehold improvements (6,451) (6,375)Plant and equipment (99,935) (139,100)Leased plant and equipment (9,780) (9,780)

(306,001) (326,392)(iii)employeebenefitsexpenseWages and salaries costs (2,969,386) (3,426,813)Superannuation (254,329) (294,645)Employee benefits provisions (3,547) (118,101)Share based payments - options (21,018) (21,018)

(3,248,280) (3,860,577)

Rental expense on operating leases (349,563) (374,083)Foreign currency translation loss / (gain) (126) (9)Cost of sales (38,821) (85,792)Bad debt - trade receivables (1,340) -

(iv)othersignificantexpensesSoftware development costs (123,168)Impairment of financial assets (48,111) -Impairment of land and buildings (5,917,552) -

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NOTE 4: INCOME TAX EXPENSE

2011 2010Notes $ $

(a) The components of tax expense / (benefit) compriseCurrent tax - 8,594 Deferred tax 9 811,396 741,241 Recoupment of prior year tax losses - (53,842)Under / (over) provision prior year - 7,852

811,396 703,845

(b) The prima facie tax on profit before income tax is reconciled to the income tax as followsPrima facie tax payable / (benefit) on profit / (loss) from ordinary activities before income tax at 30% (2010: 30%): (2,590,675) (143,374)

Add /(less)Tax effect of:- current period tax losses not recognised 442,967 123,851 - non-deductible / (assessable) component of distribution from associate 416,412 (17,893)- franking credit tax loss offset (5,669) (38,934)- research and development claim - (44,811)- non-deductible option expense 6,305 6,306 - non-deductible impairment expense 1,789,699 -- other non-deductible items 341,936 (11,100)- other deductible items (446,933) -- recognition of prior year tax losses not previously brought to account - (53,842)- write-back of future income tax benefit of tax losses not recognised - 1,503,600 - write back of deferred tax liability of capitalised development costs - (627,810)- capital gains on sale of shares 46,806 -- prior year tax losses utilised (846) -- write-back of prior period deferred tax balances 811,396 7,852 Income tax expense / (benefit) attributable to entity 811,396 703,845

Applicable weighted average effective tax rates are as follows: 9 .4% 147%

The weighted average effective consolidated tax ratios in 2011 and 2010 have been effected by derecognition of deferred tax balances in both financial years.

(c) Tax losses

Unused tax losses for which no deferred tax asset has been recognised 3,801,924 2,331,871Potential tax benefit at 30% 1,140,577 699,561

(d) Write back of deferred tax

The directors have reviewed the carrying value of the deferred tax balances at 30 June 2011. There is no certainty that future taxable profit will be available to allow the deferred balances to be recovered in the immediate future. In accordance with AASB 112 Income Taxes the group has not recognised deferred tax in its financial report. The directors will continue to assess the application of AASB 112 at each future reporting date .

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NOTE 4: INCOME TAX EXPENSE (cont’d)

(e) Tax effects relating to each component of other comprehensive income

2011 2010

Before-tax

amount

Tax (expense)

benefit

Net-of-tax

amount

Before-tax

amount

Tax (expense)

benefit

Net-of-tax

amount$ $ $ $ $ $

Gain / (loss) on land and buildings revaluation - - - (6,424,324) 1,496,846 (4,927,478)

Financial assets revaluation 40,990 - 40,990 81,650 (24,495) 57,155

40,990 - 40,990 (6,342,674) 1,472,351 (4,870,323)

NOTE 5: CASH AND CASH EQUIVALENTS

Notes 2011 2010

$ $Cash at bank and in hand 468,855 66,782

Short-term deposit 100,200 44

27 569,055 66,826

Cash at bank earns interest at floating rates based on daily bank deposit rates.

Short-term deposits are made for varying periods of between one day and three months, depending on immediate cash requirements of the group, and earn interest at the respective short-term deposit rates.

Effective interest rates on short term deposits were 4 .55% (2010: 5 .76%) . These deposits are at call .

The group has a drawdown facility with the Commonwealth Bank of Australia Ltd of $1,000,000 (2010: $1,000,000) which was unutilised at 30 June 2011, and various guarantee facilities, which were utilised at 30 June 2011 to the extent of $80,000 (2010: $80,000) . All conditions precedent to the drawdown and guarantee facilities have been met .

The fair value of cash, cash equivalents and overdrafts is $569,055 (2010: $66,826).

(a) Reconciliation of Cash

For the purpose of the Cash Flow Statement, cash includes cash and cash equivalents comprising the following at 30 June 2011:

2011 2010$ $

Cash at bank and in hand 468,855 66,782

Short-term deposit 100,200 44

569,055 66,826

A floating charge over cash and cash equivalents has been provided to the CBA as part of security arrangements for current facilities . Refer Note 15(b) for further details .

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NOTE 5: CASH AND CASH EQUIVALENTS (cont’d)

(b) Reconciliation of Profit after Income Tax to Cash Flows from Operations

2011 2010

$ $Net profit / (loss) after income tax (pre minority interest share) (9,446,978) (1,181,760)Adjustment of non cash itemsAmortisation and depreciation 306,001 326,392 Bad debts 1,340 - Gain on remeasurement of investment on conversion to associate - (70,986)Gain on acquisition of minority interests (42,981) - Share of associated company’s net profit after income tax and dividends 1,325,827 66,394 (Profit) / Loss on sale of investments (156,020) (21,052)Employee options / expense 21,018 21,018 Dividend re-investment plan (2,152) (29,371)Interest on loan converted to equity in associate - (24,539)Impairment of financial assets 48,111 - Impairment of land and buildings 5,917,552 -

Changes in assets and liabilities, net of the effects of purchase of subsidiariesIncrease / (decrease) in provisions (5,295) 19,065 (Increase) / decrease in receivables and other assets 232,269 (6,208)(Increase) / decrease in inventories (2,652) 2,910 Increase / (decrease) in trade creditors 406,464 32,226 Increase / (decrease) in current tax payable 44,810 (44,810)(Increase) / decrease in deferred tax assets and liabilities 811,396 773,150 Net operating cash flows (541,289) (137,571)

(c) Non-cash financing and investing activities

(i) Dividend reinvestment

During the year the group acquired 947 ordinary shares valued at $2,152 in The Rock Building Society Limited (“ROK”), via a dividend reinvestment plan .

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NOTE 6: TRADE AND OTHER RECEIVABLES2011 2010

Notes $ $CurrentTrade debtors 199,817 344,671 Other receivables 181,389 185,229 Other receivables - key management personnel (a) 99,515 197,917 Total current receivables 480,721 727,817

(a) Key Management Personnel Loans

Refer Note 20(e) for Key Management Personnel loan details .

(b) Provision For Impairment of Receivables

Current trade and other receivables are non-interest bearing and generally on 30-day terms. Any non-current trade and term receivables are assessed for recoverability based on the underlying terms of the contract . A provision for impairment is recognised when there is objective evidence that an individual trade or term receivable is impaired .There are no balances within trade and other receivables that contain assets that are impaired .

creditrisk—tradeandotherreceiVaBles

The group has no significant concentration of credit risk with respect to any single counter party or group of counter parties other than those receivables specifically provided for and mentioned within Note 6. The class of assets described as Trade and Other Receivables is considered to be the main source of credit risk related to the group. On a geographical basis, the group has no significant credit risk exposures.

The following table details the group’s trade and other receivables exposed to credit risk (prior to collateral and other credit enhancements) with ageing analysis and impairment provided for thereon. Amounts are considered as ‘past due’ when the debt has not been settled, with the terms and conditions agreed between the group and the customer or counter party to the transaction . Receivables that are past due are assessed for impairment by ascertaining solvency of the debtors and are provided for where there are specific circumstances indicating that the debt may not be fully repaid to the group.

The balances of receivables that remain within initial trade terms (as detailed in the table) are considered to be of good credit quality.

Gross amount

Past due and impaired

Past due but not impaired (days overdue) Within

initial trade terms31-60 61-90 >90

2011 $ $ $ $ $ $Trade and term receivables 199,817 - 2,004 1,383 2,646 193,784

Other receivables 280,904 - - - - 280,904

Total 480,721 - 2,004 1,383 2,646 474,688

2010Trade and term receivables 344,671 - 1,939 5,944 357 336,431

Other receivables 383,146 - - - - 383,146

Total 727,817 - 1,939 5,944 357 719,577

The group does not hold any financial assets with terms that have been renegotiated, but which would otherwise be past due or impaired .

(c) Financial assets classified as loans and receivables2011 2010

Notes $ $Trade and other receivables Total current 480,721 727,817 Financial assets 27 480,721 727,817

(d) Collateral pledged

A floating charge over trade receivables has been provided for certain debt. Refer to Note 15(b) for further details.

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NOTE 7: INVENTORIES

2011 2010

Notes $ $CurrentStock in trade at cost 11,803 9,151

11,803 9,151

Non-CurrentDevelopment property at cost (a) 4,326,451 4,179,500

4,338,254 4,188,651

Movements during the year:Opening Balance as at 1 July 4,179,500 9,301,398 Write back of asset revaluation reserve (a) - (5,230,925)Development costs capitalised 146,951 109,027 Development property as at 30 June 4,326,451 4,179,500

(a) Included in inventories is the Airlie Central development property at Airlie Beach. In the year ended 30 June 2010, in view of adverse conditions in the real estate market globally and in Australia, the directors decided to write-back the property value to cost . The effect of this was to reduce the value of the property by $5,230,925, comprising asset revaluation reserve of $4,179,500 and deferred tax liability of $1,051,425. In recent years, there have been no reported sales of comparable property and despite favourable changes to the local authority’s planning scheme, market conditions for development remain depressed. Herron Todd White Valuers (Mackay) (HTW) were commissioned to undertake a current market value assessment of the property’s value on an in globo basis and assessed the value at 30 June 2010 to be $4,179,500. Based on this advice the directors have assessed the value of the land at 30 June 2011 at $4,326,451, including capitalised costs of $146,951 in 2011, which relate to planning and development negotations for development of the property, which remains prospective .

NOTE 8: OTHER ASSETS

2011 2010

$ $Current Prepayments 116,446 102,959 Bonds and deposits 1,559 1,559

118,005 104,518

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NOTE 9: TAX ASSETS AND LIABILITIES

2011 2010

(a) Liabilities $ $

CurrentIncome Tax - (44,810)

Non currentDeferred tax liability comprise:Revaluation of associates - 81,645Total deferred tax liability - 81,645

(b) AssetsNon currentDeferred tax assets comprise:Provisions & accruals - 221,027Revaluation of available for sale financial assets - 90,776Revenue losses - 403,286Revaluation of associates - 194,404Total deferred tax assets - 909,493

(c) Reconciliation of movements

Opening balance

Charged to income

Charged directly to

equity

Closing balance

Deferred tax liabilityRevaluation of associates 81,645 (81,645) - -Balance at 30 June 2011 81,645 (81,645) - -

Revaluation of land and buildings 1,496,784 - (1,496,784) - Revaluation of available for sale financial assets (41,624) - 41,624 -

Capital losses (1,503,600) 1,503,600 - - Revaluation of associates 64,053 17,592 - 81,645 Development costs capitalised 627,811 (627,811) - - Balance at 30 June 2010 643,424 893,381 (1,455,160) 81,645

Deferred tax assetsProvisions & accruals 221,027 (221,027) - -Revaluation of available for sale financial assets 90,776 (74,325) (16,451) -

Revenue losses 403,286 (403,286) - -Revaluation of associates 194,404 (194,404) - -Balance at 30 June 2011 909,493 (893,042) (16,451) -

Provisions & accruals 181,685 39,342 - 221,027 Revaluation of available for sale financial assets 182,021 (16,798) (74,447) 90,776

Revenue losses 319,699 83,587 - 403,286 Revaluation of associates 56,377 46,448 91,579 194,404 Balance at 30 June 2010 739,782 152,579 17,132 909,493

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NOTE 10: OTHER FINANCIAL ASSETS

2011 2010

Notes $ $

NON-CURRENTAvailable-for-sale financial assets (a) 133,274 1,256,364 Other investments (b) 1,000 1,000 Total other financial assets 134,274 1,257,364

(a) Available-for-sale financial assets comprise:Listed investments, at fair value- shares in listed corporations (i)(ii) 133,274 1,256,364 Total available for sale financial assets 133,274 1,256,364

(b) Other Investments, at costUnlisted investments, at cost- shares in other corporations (iii) 1,000 1,000 Total other investments 1,000 1,000

Total available-for sale financial assets 134,274 1,257,364

(i) At 30 June 2011, the directors reviewed the carrying value of individual investments and determined that four investments had declined in value in the last financial year. The directors do not believe that the decline for two of the four investments constitutes a significant or prolonged decline below cost at this stage and hence no impairment has been recognised for these. Should share values decline to a significant level which is below cost or should prices remain at levels below cost for a prolonged period, the directors have determined that such investments will be considered impaired in the future . The directors believe the two investments with a decline are significant and as such have been impaired by $48,111 (2010: $nil).

(ii) On 30 December 2010, the group sold 430,000 shares of its holding in the ROK Building Society Limited . Proceeds from the sale of $1,290,000 were received on 7 January 2011.

(iii) The fair value of unlisted shares in other corporations cannot be reliably measured as variability in the range of reasonable fair value estimates is significant. As a result, all unlisted investments are reflected at cost. Management has determined that the estimate of fair values for unlisted investments would be in the range of $500 to $2,000 at 30 June 2011 for the group.

NOTE 11: INTANGIBLE ASSETS

2011 2010$ $

Goodwill - at cost 253,878 253,878 less accumulated impairment losses (27,562) (27,562)

226,316 226,316

Software - at cost 964,857 964,857 less accumulated amortisation (188,231) (80,291)

776,626 884,566

Trademarks and patent - at cost 4,382 4,382 less accumulated amortisation (2,191) (1,644)

2,191 2,738

Total intangibles 1,005,133 1,113,620

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NOTE 11: INTANGIBLE ASSETS (cont’d)

Notes Goodwill Software Trademarks Total

$ $ $ $

Balance at 1 July 2010 226,316 884,566 2,738 1,113,620 Additions - - - -Disposals - - - - Amortisation charge - (107,940) (547) (108,487)Impairment losses - - - -Balance at 30 June 2011 226,316 776,626 2,191 1,005,133

Balance at 1 July 2009 226,316 431,079 3,286 660,681 Additions - 33,271 - 33,271 Additions through acquisition 22(C) 500,507 - 500,507 Disposals - - - - Amortisation charge - (80,291) (548) (80,839)Impairment losses - - - - Balance at 30 June 2010 226,316 884,566 2,738 1,113,620

Intangible assets other than goodwill have finite useful lives. The current amortisation charges for intangible assets are included under depreciation and amortisation expense per the Statement of Comprehensive Income. Goodwill has an indefinite life.

iMPairMentdisclosures

Goodwill is allocated to cash-generating units which are based on the group’s reporting segments. Goodwill relates to the acquisition of RIMsec. The recoverable amount of this goodwill has been assessed using “value in use” calculations for the financial services segment .

keyassuMPtionsusedFor‘Value-in-use’calculations

Value-in-use

The impairment test for the financial services segment is based on ‘value-in-use’ calculations, applying discounted cash flow projections, the 2012 budget and five year operating projections that have been approved by the board. Based on actual operating results the assumptions are consistent with past performance and expectations of future market activity.

growthanddiscountrates

Growth rates used were determined by factors such as industry sector growth, the size of the business, past performance and current growth trends . The long term growth rates used to estimate sales performance range between 3% and 5% per annum . Forecast expenses are anticipated to increase by 4% per annum attributed to core inflation estimates and anticipated increased input costs. Discount rates used reflect after-tax rates and are adjusted to incorporate risk premiums associated with industry sector and specific business risk assessments. An after-tax discount rate of 18% has been used.

impairment

No impairment for the 2011 financial year has been recorded for intangible assets in the financial services segment.

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NOTE 12: INVESTMENTS IN ASSOCIATES

2011 2010

$ $Non - currentInvestment in associates 1,719,485 3,045,313

Interests are held in the following associated entities:

Name Principal Activities

Country of

Incorp.Type

Ownership Interest Carrying amount of investment

2011 2010 2011 2010

% % $ $

unlisted:

Whitsunday Village Retail Property Trust No 1 .

Investment Property

ManagementAust Units 42 .92 42 .92 1,324,149 2,649,977

listed

APA Financial Services Ltd

Asset Investment

Portfolio Admin

Aust Shares 33 .58 33 .58 395,336 395,336

1,719,485 3,045,313

(i) Whitsunday Village Retail Property Trust No 1 (WVRPT)

The Group has a 42 .92% (2010: 42 .92%) interest in WVRPT, an unlisted property trust which holds retail property located in Airlie Beach. Income distributions from WVRPT have reduced during the current financial year to 30 June 2011 as a result of asset revaluations and the continuing difficult retail and tourism trading conditions at Airlie Beach.

(ii) APA Financial Services Limited (APA)

The Group has a 33 .58% (2010: 33 .58%) interest in APA, an ASX listed entity with an interest in One Vue Holdings Limited, a portfolio administration platform provider for participants in the financial services industry. Although APA recorded a small loss in 2011, the group will not record any change in the carrying value of this investment unless the group’s share of accumulated losses is greater than the equity accounted carrying value of the investment.

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NOTE 12: INVESTMENTS IN ASSOCIATES (cont’d)

(a) The following table illustrates summarised financial information relating to the group’s investments in associates:

2011 2010$ $

Summarised presentation of Aggregate Assets, Liabilities and Performance of Associates:Current assets 437,862 669,299 Non-current assets 6,500,875 9,765,706

6,938,737 10,435,005

Current liabilities 144,042 144,962 Non-current liabilities 2,851,834 3,201,199

2,995,876 3,346,161

Net assets 3,942,861 7,088,844

Revenue 699,205 1,139,098 Profit / (loss) after income tax of associates (110,951) 490,575

(b) Movements During the Year in Equity Accounted Investments in Associated Entities:

2011 2010$ $

Balance at beginning of the financial year 3,045,313 2,716,370 Add:New investments during the year - 395,336 Share of associates reserves as a result of asset revaluation (1,302,492) - Share of associates profit / (loss) after income tax (23,336) 97,167 Less:Distribution from associated entity - (163,561)Balance at end of the financial year 1,719,485 3,045,313

(c) Equity accounted profits of associates is broken down as follows:2011 2010

$ $

Share of associates profit / (loss) before tax (23,336) 97,167 Share of associates profit after tax (23,336) 97,167

(d) Market value of listed investment in associate

Notes 2011 2010$ $

Market value of listed investment in associate (a) 348,177 409,620

(a) The directors have shown the investment in APA Financial Services Limited at their estimate of carrying value of the company’s underlying net assets on the basis that this assessment more accurately reflects the fair value of the investment.

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NOTE 13: PROPERTY, PLANT AND EQUIPMENT

2011 2010

Notes $ $Land and buildingsFreehold land:- directors’ valuation 2011 1,870,052 -- Independent valuation 2010 - 7,307,432Total land 1,870,052 7,307,432

Buildings- directors’ valuation 2011 2,561,223 -- Independent valuation 2010 - 3,122,741 Total buildings 2,561,223 3,122,741

Total land and buildings, net (a) 4,431,275 10,430,173

Plant and equipment owned- at cost 1,781,430 1,753,719 less accumulated depreciation (1,430,847) (1,381,802)Total plant and equipment, net 350,583 371,917

Motor vehicles- at capitalised cost 65,200 65,200 less accumulated depreciation (21,355) (11,575)Total plant and equipment under lease, net 43,845 53,625

Leasehold improvements- at cost 59,916 59,916 Less accumulated amortisation (26,959) (20,508)Total Leasehold improvements, net 32,957 39,408

Total property, plant and equipment, net 25 4,858,660 10,895,123

(a) The group’s land and buildings were independently valued at 30 June 2010 by Herron Todd White (Mackay) (HTW).The valuation was assessed on a going concern, current market value basis. HTW’s assessment was $10,570,500 and the directors adopted $10,430,173 after other adjustments. The total write-down of that adjustment in 2010 was $1,193,399, comprising asset revaluation reserve of $747,978 and deferred tax liability of $445,421. In the current financial year, tourism revenue has declined significantly with commensurate adverse effect on the valuation of land and buildings on a going concern basis. Consequently, the directors have adopted the valuation of the land and buildings assessed on an in globo basis by HTW at 30 June 2010 of $4,431,275 and recorded an impairment expense of $5,917,552 in 2011 which is separately presented in the Statement of Comprehensive Income as impairment expense.

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NOTE 14: TRADE AND OTHER PAYABLES

2011 2010Notes $ $

Current – unsecuredTrade creditors 289,072 318,464 Sundry creditors and accrued expenses 912,222 829,163 Total current payables 1,201,294 1,147,627

Non-current – unsecuredAccrued expenses 352,797 -Total non-current payables 352,797 -

Total trade and other payables 1,554,091 1,147,627

Financial liabilities at amortised cost classified as trade and other payablesTrade and other payablesTotal current 1,554,091 1,147,627 Less leave entitlements (482,572) (473,735)Financial liabilities as trade & other payables 27 1,071,519 673,892

NOTE 15: BORROWINGS

2011 2010Notes $ $

CurrentBank Hire purchase loans - secured (a)(b) 13,192 13,192 Loans - unsecured 60,917 69,234 Total current borrowing 74,109 82,426

Non-currentBank Hire purchase loans – secured (a)(b) 32,510 45,702 Total non-current borrowings 32,510 45,702

Total borrowings 27 106,619 128,128

(a) At 30 June 2011 the group has unused facilities with the Commonwealth Bank of Australia Limited secured by registered mortgages over real estate and floating charges over other assets of the group. Included in the Commonwealth Bank of Australia facilities is a commercial bill facility of $1,000,000 unutilised at 30 June 2011 (2010: $nil) and a long-term $55,000 bank guarantee facility that is unutilised. (2010: $nil). The group’s bank facilities were reviewed on 9 November 2010 and are subject to an annual review .

Queensland Resorts Pty Ltd also has a $50,000 (2010: $50,000) overdraft facility which was unutilised at 30 June 2011 (2010: Unutilised) and a $25,000 (2010:$25,000) bank guarantee facility that is fully drawn.

(b) Collateral provided

2011 2010The carrying amounts of assets pledged as security are: $ $First mortgage over freehold land and buildings at market value (including development property) 8,757,726 14,609,673

Floating charge over assets, including unlisted investments 4,465,861 7,699,053 Total assets pledged as security 13,223,587 22,308,726

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NOTE 16: PROVISIONS

2011 2010$ $

Current Employee benefits 10,931 96,143 Total current provisions 10,931 96,143

Non-CurrentEmployee benefits 137,819 57,902 Total non-current provisions 137,819 57,902

Opening Balance 154,045 112,847 Additional provisions 5,478 22,834 Additions through acquisition of controlled entity - 22,129 Amounts used (10,773) (3,765)Closing Balance 148,750 154,045

Provision for long term employee benefits

A provision has been recognised for employee entitlements relating to long service leave . In calculating the present value of future cash flows in respect of long service leave, the probability of long service leave being taken is based on historical data.The measurement and recognition criteria relating to employee benefits have been included in Note 1 to this report.

NOTE 17: ISSUED CAPITAL

2011 2010(a) Contributed Equity $ $At the beginning of the reporting period 4,058,525 4,058,525 New share issues - - At the end of the reporting period 4,058,525 4,058,525

2011 2010Number of Ordinary Shares on Issue Number NumberAt the beginning of the reporting period 33,110,131 33,110,131 Shares issued during the period - - Shares cancelled during the period - - At the end of the reporting period 33,110,131 33,110,131

Effective 1 July 1998, the corporations legislation abolished the concept of authorised capital and par values of shares. Accordingly the company does not have authorised capital or par value in respect of issued shares .

Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in proportion to the number of shares held .

At shareholders’ meetings, each ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has one vote on a show of hands .

(b) Options

For information relating to share options issued to key management personnel during the financial year, refer to Note 28: Share Based Payments and the Remuneration Report .

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NOTE 17: ISSUED CAPITAL (cont’d)

(c) Capital Management (cont’d)

The group’s capital is managed by assessing the group’s financial risks and adjusting its capital structure in response to changes in those risks and in the market. Financial risk consideration includes the management of debt levels, distributions to shareholders and share issues. Given the recent volatility in financial markets and increased risks associated with high levels of gearing, the directors have elected to maintain low levels of borrowings. The gearing ratios for the year ended 30 June 2011 and 30 June 2010 are as follows:

2011 2010

Notes $ $Total borrowings 15 106,619 128,128 Less cash and cash equivalents 5 (569,055) (66,826)Net debt (462,434) 61,302

Total equity (less intangibles) 10,408,994 19,728,471 Total capital 9,946,560 19,789,773 Gearing ratio In funds In funds

Trustees Australia Limited, QTI Managed Funds Limited and Rim Securities Limited hold Australian financial services licences. Conditions of each licence authorisation, require each licensee to maintain a number of minimum financial standards as set out in Note 19(c) .

NOTE 18: RESERVES

natureandPurPoseoFreserVes

Asset revaluation reserveThe asset revaluation reserve is used to record revaluations in fair value of non-current assets.

Financial asset reserveThe financial assets reserve records revaluation of financial assets.

Option reserveThe option reserve records items recognised as expenses on valuation of employee share options.

NOTE 19: COMMITMENTS AND CONTINGENCIES

(a) Guarantees

Refer to Note 22 for details of the Deed of Cross Guarantee and its revocation at 30 June 2011.

(b) Trustee / Responsible Entity Obligations

Trustees Australia acts as responsible entity for managed investment schemes registered with the Australian Securities and Investment Commission . A responsible entity is liable for limited obligations of its underlying trusts, and generally has a right of indemnity against the trusts’ assets. These financial statements do not recognise such liabilities except to the extent that the group has committed a breach of fiduciary duty, or the extent that an underlying trust might have insufficient assets to settle its obligations. Such circumstances have not arisen . Trustees Australia has no obligation in respect of any borrowing or other liability of any trust for which it acts as responsible entity .

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NOTE 19: COMMITMENTS AND CONTINGENCIES (cont’d)

(c) AFS Licences

Trustees Australia Limited, QTI Managed Funds Limited and RIMsec hold financial services licences under section 913B of the Corporations Act 2001 . These are Licences 260033, 260038 and 283119 respectively . As a condition of licence authorisation, each licensee is required to maintain a number of base level financial requirements. The following table identifies these financial requirements and states whether each licensee has met these conditions for the 2011 financial year:

Licence Number

260033 260038 283119

Base level financial requirement Condition satisfied by licensee (Y / N)Has total assets that exceed total liabilities and have no reason to suspect that the licensee’s total assets would currently not exceed its total liabilities Yes N/A Yes

Meet the cash needs requirement of the licence by complying with the reasonable estimate projection plus cash buffer Yes N/A Yes

The licensee must ensure that the company has at least $50,000 in surplus liquid funds (SLF) Yes N/A Yes

The licensee must hold at least $5 million net tangible assets Yes N/A N/A

2011 2010

Notes $ $(d) Finance Lease Commitments

Payable-minimumleasepaymentsNot later than 12 months 16,423 16,423 Between 12 months and 5 years 34,934 51,357 Minimum lease payments 51,357 67,780 Less future finance charges (5,655) (8,886)Present value of minimum lease payments 15 45,702 58,894

(e) Operating Lease Commitments

Non-cancellable operating leases contracted for but not capitalised in the financial statements Payable-minimumleasepaymentsNot later than 12 months 202,876 200,467 Between 12 months and 5 years 749,307 768,234 Greater than 5 years - 183,949 Present value of minimum lease payments 952,183 1,152,650

(f) Capital Expenditure CommitmentsCapital expenditure commitments contracted - - F

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NOTE 20: KEY MANAGEMENT PERSONNEL (KMP) INTERESTS

Refer to the Remuneration Report contained in the Directors Report for details of the remuneration paid or payable to each member of the group’s KMP for the year ended 30 June 2011.

(a) Names and positions held of key management personnel in office at any time during the financial year are:

Name: Position Appointments/Resignations

Michael Hackett Managing Director / Acting Chairman Kerry Daly Director Nathan Leman Director Appointed 24 November 2010Richard Green Chairman Resigned 24 November 2010Ian Jensen Director Resigned 24 November 2010Elizabeth Hackett Operations Manager John Atabak Director (AdminPARTNERS) Alastair Healey Director (RIMsec) Resigned 30 June 2011

(b) Key Management Personnel Shareholdings and Options Holdings

The number of ordinary shares in Trustees Australia Limited held by each of the Key Management Personnel of the group during the financial year is as follows:

(i) Key Management Personnel Shareholdings1

Listed fully paid ordinary shares

30 June 2011 Balance at 01/07/2010

Granted as remuneration

Net change other

(Sold) / purchased on

market

Balance at 30/06/2011

Michael Hackett 24,264,320 - - 55,000 24,319,320Kerry Daly2 300,000 - - - 300,000 Nathan Leman3 - - 2,878,880 - 2,878,880Richard Green4 86,395 - (86,395) - -Ian Jensen4 180,100 - (180,100) - -Elizabeth Hackett5 1,877,962 - - - 1,877,962 John Atabak - - - - - Alastair Healey - - - - - Total 26,708,777 - 2,612,385 55,000 29,376,162

Listed fully paid ordinary shares

30 June 2010 Balance at 01/07/2009

Granted as remuneration

Net change other

(Sold) / purchased on

market

Balance at 30/06/2010

Michael Hackett 24,193,243 - - 71,077 24,264,320 Kerry Daly2 300,000 - - - 300,000 Richard Green 86,395 - - - 86,395 Ian Jensen 180,100 - - - 180,100 Elizabeth Hackett5 1,440,962 - - 437,000 1,877,962 John Atabak - - - - - Alastair Healey - - - - - Total 26,200,700 - - 508,077 26,708,777 1Represents shares held directly, indirectly or beneficially. The company does not issue shares as a form of remuneration.

2Kerry on appointment as director on 17 March 2009 was issued 500,000 options on 7 April 2009 expiring on 31 December 2011. The options are unvested and exercisable into fully paid ordinary shares at 40 cents per share. These options were granted as remuneration and the movements are shown in (ii) Key Management Personnel Option Holdings .

3Appointed 24 November 2010 .

4Resigned 24 November 2010 .

5Elizabeth has a relevant direct interest in 1,877,962 shares in Trustees Australia as at 30 June 2011 (2010: 1,877,962) and has an indirect interest as an associate through Michael Hackett’s relevant interest in shares.

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NOTE 20: KEY MANAGEMENT PERSONNEL (KMP) INTERESTS (cont’d)

(ii) Key Management Personnel Option Holdings

The number of options over ordinary shares held by each KMP of the group during the financial year is as follows:

2011 2010

No. No.Balance at beginning of year 500,000 500,000 Granted as remuneration during the year - - Exercised during the year - - Other changes during the year - - Balance at end of year 500,000 500,000

Vested during the year - -

Vested and exercisable - -

Vested and unexercisable - -

There are no other Key Management Personnel interests in options .

(c) Key Management Personnel Compensation by Category

Refer to the Remuneration Report contained in the Directors Report for details of the remuneration paid or payable to each member of the group’s Key Management Personnel for the year ended 30 June 2011.

The totals of remuneration paid to Key Management Personnel of the company and the group during the year are as follows:

2011 2010

$ $Short term 588,683 373,211 Post employment 126,187 144,604 Other long-term (9,690) 19,591 Termination benefits - - Share-based payments 21,018 21,018

726,198 558,424

(d) Key Management Personnel Other Equity Transactions

There have been no other transactions involving equity instruments other than those described in the tables above.

(e) Key Management Personnel Loans - Unsecured

2011 Opening balance

Closing balance

Interest charged

Interest not

charged

Provision for

impairment

Loans advanced /

(repaid)Amounts Receivable from:Michael Hackett 197,917 99,515 15,153 - - (113,555)

197,917 99,515 15,153 - - (113,555)

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NOTE 20: KEY MANAGEMENT PERSONNEL (KMP) INTERESTS (cont’d)

(e) Key Management Personnel Loans - Unsecured (cont’d)

2010 Opening balance

Closing balance

Interest charged

Interest not

charged

Provision for

impairment

Loans advanced /

(repaid)

Amounts Receivable from:Michael Hackett 519,370 197,917 65,455 - (386,908) Alastair Healey 25 - - - (25)

197,917 197,917 65,455 - (386,933)

Individuals with loans above $100,000 in reporting period

Michael Hackett:Fiduciary Nominees Pty Ltd 197,917 99,515 15,153 - - (113,555)

197,917 99,515 15,153 - - (113,555)

The above loan is an unsecured loan to a related entitiy of Michael Hackett and is reviewed in July on an annual basis. The loan attracts interest at 7 .4% (2010: 5 .75%) per annum . The balance of the loan was repaid on 19 August 2011 .

(f) Key Management Personnel Contracts for Services

Alastair Healey: Employment conditions were detailed in an employment contract with RIMsec, which included provision for commission remuneration based on his individual contribution to the profit of RIMsec. Alastair ceased employment on 30 June 2011 in accordance with the terms of the contract .

John Atabak: Employment conditions are detailed in an employment contract .

There are no other formal employment contracts in place for any other key management personnel in the group.

(g) Transactions with Key Management Personnel

From time to time Key Management Personnel of Trustees Australia may purchase or supply goods or services from or to Controlled Entities . These purchases or supplies are on the same terms and conditions as those entered into by other group employees or arms length contractors .

The managing director, Michael Hackett, and companies of which he is a director have transactions with the controlled entities Queensland Resorts Pty Ltd and Corporate Solutions Pty Ltd. These transactions are on an arms-length commercial basis and are outlined below:

i) Fiduciary Nominees Pty Ltd (Fiduciary) owns a leasehold backpacker and hotel business on Magnetic Island known as Arkies on Magnetic which combines with Magnums in tour packages sold by both Fiduciary and Queensland Resorts Pty Ltd and their agents . At balance date there was a net balance owing by Fiduciary to the group of $99,515 (2010: $197,917) . The activities are in accordance with a trading agreement which provides for interest charged and paid at a commercial rate on monthly balances and for any outstanding amounts to be settled on termination of the agreement . Balances generally fluctuate in accordance with the level of transactions. The balance of the loan was repaid on 19 August 2011.

ii) Jabane Pty Ltd (Jabane) is the owner of a freehold shop tenancy at Airlie Beach in which Queensland Resorts Pty Ltd operates a tour sales office as a tenant. The tenancy is subject to a five-year lease with a five-year renewal option on commercial terms, which commenced in July 2001. During the 2011 year rent and outgoings paid to Jabane by Queensland Resorts Pty Ltd was $96,183 (2010: $91,369). At 30th June 2011 the balance of the loan account was nil (2010: $nil).

iii) Mikko Constructions Pty Ltd (Mikko) was established with the intention of being an interposed building company between the group and any direct building activity. Mikko is an associate of Michael Hackett and Nathan Leman, who are both directors of Mikko. Mikko undertakes all project management, town planning and IT establishment and maintenance work for the group on a cost recovery only basis . This provides, amonst other things, a level of liability separation for construction activities of the group. During the 2011 year, $153,750 was paid by the group to Mikko for project management and IT expenses (2010: $186,000). At balance date, the group owed Mikko $nil (2010: $nil).

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NOTE 21: AUDITOR’S REMUNERATION

The following total remuneration was received or is receivable by the auditor of Trustees Australia Limited in respect of:

2011 2010

$ $Audit and review of the financial statements 72,355 64,373 Non audit services - -

NOTE 22: CONTROLLED ENTITIES

2011 2010

(A) Particulars in relation to controlled entities Note Class of Equity

Percentage Owned

Percentage Owned

Parent Entity: % %

Trustees Australia Limited (a)

Wholly Owned Controlled Entities

Corporate Solutions Pty Ltd (b) (c) ordinary 100 100QTI Managed Funds Limited (c) ordinary 100 100Budget Traveller Group Pty Ltd (b) (c) ordinary 100 100Australian Share Registers Pty Ltd (c) ordinary 100 100Queensland Resorts Pty Ltd (b) (c) ordinary 100 100Magnums Backpackers & Bar Pty Ltd (c) ordinary 100 100Corporate Queensland Pty Ltd ordinary 100 100Online Super Australia Pty Ltd ordinary 100 100Australian Fixed Interest Securities Exchange Pty Ltd ordinary 100 100Administration Partners Pty Ltd ordinary 100 100My Super Solution Pty Ltd ordinary 100 100Airlie Central Two Property Trust units 100 100

Other Controlled Entities % %Rim Securities Limited 22 (B) ordinary 97 66 Rimsec Unit Trust units - 72Best Deposits Pty Ltd ordinary - 65

The financial year of all controlled entities is the same as that of the holding company. All controlled entities are incorporated in Australia .

(a) Ultimate Controlling Entity

The directors believe that the ultimate controlling entity of the group is Trustees Australia Limited (Trustees Australia) .

(b) Corporate Solutions Pty Ltd, Queensland Resorts Pty Ltd and Budget Traveller group Pty Ltd are joint and several guarantors to the Commonwealth Bank of Australia in respect of borrowing facilities for Trustees Australia and Queensland Resorts Pty Ltd . Queensland Resorts Pty Ltd provided collateral security by way of registered mortgages over real property to the Commonwealth Bank of Australia in respect of the same borrowing facilities.

(c) These companies have been parties to a Deed of Cross Guarantee since 17 June 1994. The deed provided that all parties to the deed would guarantee each creditor payment in full of any debt of each company participating in the Deed on the winding-up of that company. On 26 June 2011 all parties to the deed executed a Deed of Revocation of Cross Guarantee, which was lodged with the Australian Securities & Investment Commission on 30 June 2011 and advertised as required by the Corporations Act 2001 .

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NOTE 22: CONTROLLED ENTITIES (cont’d)

(d) Parties to Deed of Cross Guarantee

2011 2010$ $

(i) Statement of Comprehensive IncomeProfit / (loss) before income tax (8,253,730) (3,026,415)Income tax benefit / (expense) (211,669) (900,175)Profit / (loss) after tax (8,465,399) (3,926,590)

(ii) Other Comprehensive IncomeNet gain/(loss) on revaluation of financial assets 40,990 57,155 Net gain/(loss) on revaluation of land and buildings - (4,927,478)Total comprehensive income for the period 40,990 (4,870,323)

(iii) Retained EarningsRetained earnings at the beginning of the period 12,706,099 16,632,689 Profit / (loss) after tax (8,465,399) (3,926,590)Retained earnings at the end of the period 4,240,700 12,706,099

(iii) Statement of Financial PositionCurrent AssetsCash and cash equivalents 305,991 23,137 Trade and other receivables 168,977 489,674 Inventories 11,803 9,151 Other current assets 93,093 89,859 Total Current Assets 579,864 611,821

Non-Current AssetsTrade and other receivables 175,781 2,352,544 Inventories 4,326,451 2,858,761 Deferred tax assets - 852,255 Other financial assets 1,230,081 2,310,252 Intangibles 2,191 12,221 Investments in associates 1,964,877 3,045,313 Property, plant & equipment 4,808,016 10,856,842 Total Non-Current Assets 12,507,397 22,288,188 Total Assets 13,087,261 22,900,009

Current LiabilitiesTrade and other payables 866,220 776,622 Borrowings 74,109 82,426 Current tax liabilities - (23,568)Provisions 112,075 96,142 Total Current Liabilities 1,052,404 931,622 F

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(d) Parties to Deed of Cross Guarantee (cont’d)

2011 2010$ $

Non-Current LiabilitiesTrade and other payables - 1,287,856 Borrowings 32,510 45,702 Deferred tax liabilities - 211,800 Provisions 26,165 43,456 Total Non-Current Liabilities 58,675 1,588,814 Total Liabilities 1,111,079 2,520,436 Net Assets 11,976,182 20,379,573

EquityIssued Capital 4,058,525 4,058,525 Reserves 3,676,957 3,614,949 Retained earnings 4,240,700 12,706,099 Total Equity 11,976,182 20,379,573

(B) Loss or gain of control over other entities

(a) On 30 June 2011 Trustees Australia acquired an additional 31% of the equity in Rim Securities Limited from other sharholders, raising its total holding from 66% to 97% for a purchase consideration of $10 and releases from restrictive covenants .

Of the 31% acquired, 25% was acquired from a related party of Alastair Healey for a total consideration of $10 plus a release by RIMsec of restructure covenants in respect of a number of RIMsec customers .

The remaining 6% was acquired for no consideration other than a mutual release from restructure covenants.

Fair Value

$(i) Rim Securities Limited identifiable net assetsCurrent assets 525,151 Non-current assets 389,631 Current liabilities (765,592)Non-current liabilities (10,509)

138,681

(ii) Fair value calculations:Purchase consideration settled in cash 10 Fair value of Trustees Australia interest pre-acquisition (66%) 91,530 Non-controlling interest post acquisition (3%) 4,160

95,700

(iii) Gain on acquisition of minority interests 42,981

(b) On 10 November 2010, Trustees Australia voluntarily deregistered wholly owned dormant controlled entities Best Deposits Pty Ltd and RIMsec Unit Trust .

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(C) Acquisition of Controlled Entities

On 11 September 2009 Corporate Solutions Pty Ltd, a wholly owned subsidiary of the Parent Entity, acquired 100% of the issued capital and control of Gpen Pty Ltd and Hookswood Pty Ltd, for a purchase consideration of $514,819. As a result of the acquisition, Gpen Pty Ltd and Hookswood Pty Ltd became subsidiaries of the parent. Subsequent to the acquisition, on 10 November 2009 Gpen Pty Ltd changed its name to Administration Partners Pty Ltd and on 19 July 2010 Hookswood Pty Ltd changed its name to My Super Solution Pty Ltd. This acquisition is part of the Group’s overall strategy to expand its financial services business into the administration service for superannuation and other pooled managed funds .

Fair Value

Acquiree's Carrying amount

Purchase consideration: $ $Cash 514,819

514,819 Less:Cash and cash equivalents 40,068 40,068 Deferred tax assets 7,854 - Receivables 11,717 11,717 Property, plant & equipment 5,447 5,447 Intangible Assets - Software 500,507 - Payables (28,645) (28,645)Employee leave provisions (22,129) (22,129)Identifiable assets acquired and liabilities assumed 514,819 6,458

Cash flow reconciliation:Purchase consideration settled in cash 514,819 Cash and cash equivalents in subsidiary acquired (40,068)Cash outflow on acquisition 474,751

The assets and liabilities arising from the acquisition are recognised at fair value, which are equal to their carrying value at acquisition date.

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NOTE 23: RELATED PARTY TRANSACTIONS

transactionsWithrelatedParties

The following information provides the details of transactions with related parties for the financial year. For information regarding outstanding balances at year-end refer to Notes 6, 14, 20(e) and 20(g).

Subsidiaries

There were no transactions, other than loan transfers, between the parent and its subsidiaries or between subsidiaries during the financial year (2010: $nil).

Entity with significant influence over the group

Interests associated with the Managing director, Michael Hackett, own 73.45% of the ordinary shares in Trustees Australia and Investment Limited (2010: 73 .28%) .

Associates

The group has a 42 .92% interest in the Whitsunday Village Retail Property Trust No1 (2010: 42 .92%) .

The group has a 33.58% interest in APA Financial Services Pty Ltd (“APP”) (2010: 33.58%).


Note 20 details transactions with key management personnel.

Terms and conditions of transactions with related parties

Sales to and purchases from related parties are made at arm’s length at normal market prices and on normal commercial terms. Outstanding balances at year-end are unsecured and settlement occurs in cash. Guarantees provided or received for any related party receivables or payables have been disclosed in Note 22(A)(b) and (c) .

NOTE 24: SEGMENT INFORMATION

segMentinForMation

identificationofreportablesegments

The group has identified its operating segments based on the internal reports that are reviewed by the board in assessing performance and determining the allocation of resources .

The group is managed primarily on the basis of product category and service offerrings since the diversification of the group’s operations inherently have notably different risk profiles and performance assessment criteria. Operating segments are therefore determined on the same basis .

Reportable segments disclosed are based on aggregating operating segments where the segments are considered to have similar economic characteristics and are also similar with respect to the following:

• the products sold and/or services provided by the segment;

• the type or class of customer for the products or service; and

• external regulatory requirements.

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NOTE 24: SEGMENT INFORMATION (cont’d)

segMentinForMation(cont’d)

typesofproductsandservicesbysegment

Financial Services

The financial services segment includes:

• custodial and responsible entity services through Trustees Australia;

• fixed income broking and advisory through RIMsec;

• superannuation administration services through AdminPARTNERS;

• a 33% interest in APA, an ASX listed entity with an interest in OneVue Holdings Limited, a portfolio administration platform for participants in the financial services industry; and

• the group’s portfolio holding of listed investments .

Tourism & Hospitality

The tourism and hospitality segment includes the ownership and operation of Magnums Airlie Beach Backpackers, offering various grades of backpacker hostel style accommodation and services including a tour sales outlet. The operations are located at Airlie Beach in the Whitsundays, Queensland .

Property

The property segment includes development land and buildings at Airlie Beach, suitable for providing retail shopping facilities, accommodation or held for resale in Trustees Australia and a 43% interest in WVRPT, a managed investment scheme holding retail shops at Airlie Beach .

Basisofaccountingforpurposesofreportingbyoperatingsegments

Accounting policies adopted.

Unless otherwise stated, all amounts reported to the board with respect to operating segments are determined in accordance with accounting policies that are consistent to those adopted in the annual financial statements of the group.

In 2011 the directors reviewed the classification of all assets and are of the opinion that classifying the 43% interest in WVRPT as property rather than financial services provides more relevant and reliable information. The 2010 comparative has been adusted accordingly .

Segment assets

If an asset is used across multiple segments, it is allocated to the segment that receives the majority of economic value from it . Segment assets are generally clearly identifiable on the basis of their nature and physical location.

Segment liabilities

Liabilities are allocated to segments where there is a direct nexus between the incurrence of the liability and the operations of the segment . Borrowings are considered to relate to the group as a whole and are not allocated . Segment liabilities include trade and other payables .

Unallocated items

The following items of expense are not allocated to operating segments as they are not considered part of the core operations of any segment:

• income tax expense

• finance costs

• corporate charges

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(i) Segment Performance

30 June 2011

Tourism & Hospitality Services

Property Financial Services Total

Revenue $ $ $ $External sales 2,171,213 - 2,465,955 4,637,168Inter-segment sales - - - - Interest revenue 28,107 - 2,981 31,088Total segment revenue 2,119,320 - 2,468,936 4,668,256

Reconciliation of segment revenue to group revenueInter-segment elimination - - - - Total group revenue - - - 4,688,256

Segment net profit before tax (6,002,311) (1,325,828) (166,764) (7,494,903)

Reconciliation of segment result to group net profit/(loss) before tax

(i) Amounts not included in segment result but reviewed by the board:Depreciation and amortisation (179,422) - (126,579) (306,001)

(ii) Unallocated itemsCorporate charges - - - (214,006)Finance costs - - - (11,154)Other - - - (609,518)

Net profit before tax - - - (8,635,582)

30 June 2010RevenueExternal sales 3,080,445 - 2,788,746 5,869,191 Inter-segment sales - - - - Interest revenue 68,268 - 33,627 101,895 Total segment revenue 3,148,713 - 2,822,373 5,971,086

Reconciliation of segment revenue to group revenueInter-segment elimination - - - - Total group revenue - - - 5,971,086

Segment net profit before tax 637,930 97,167 61,478 796,575

Reconciliation of segment result to group net profit/(loss) before tax

(i) Amounts not included in segment result but reviewed by the board:Depreciation and amortisation (236,110) - (90,283) (326,393)

(ii) Unallocated itemsCorporate charges (246,171)Finance costs (24,818)Other (677,108)

Net profit before tax (477,915)

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(ii) Segment Assets

Tourism & Hospitality Services

Property Financial Services Total

As at 30 June 2011 $ $ $ $Segment assets 5,234,311 5,650,600 2,338,675 13,223,587

Segment asset increases for the period:Capital expenditure 78,602 146,951 - 225,553Acquisitions - - 10 10

78,602 146,951 10 225,563

Included in segment assets areEquity accounted associates - 1,719,485 - 1,719,485

Reconciliation of segment assets to group assetsUnallocated assets - Total group assets 13,223,587

As at 30 June 2010Segment assets 12,004,866 6,829,477 3,474,382 22,308,725

Segment asset increases for the periodCapital expenditure 194,393 109,027 136,413 439,833Acquisitions - - 474,751 474,751

194,393 109,027 611,164 914,584

Included in segment assets areEquity accounted associates - 3,045,313 - 3,045,313

Reconciliation of segment assets to group assetsUnallocated assets - Total group assets 22,308,725

(iii) Segment Liabilities

As at 30 June 2011Segment liabilities 1,003,231 - 699,610 1,702,841

Reconciliation of segment liabilities to group liabilitiesUnallocated liabilitiesOther liabilities 106,618 Total group liabilities 1,809,460

As at 30 June 2010Segment liabilities 755,042 - 583,465 1,338,507

Reconciliation of segment liabilities to group liabilitiesUnallocated liabilitiesOther liabilities 128,128 Total group liabilities 1,466,635

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(iv) Revenue by geographic region

Revenue attributable to external customers is disclosed below, based on the location of the external customer2011 2010

$ $Australia 4,653,103 5,905,631 Other foreign countries - - Total revenue 4,653,103 5,905,631

(v) Assets by geographic region

The location of segment assets is disclosed below by geographical location of the assets2011 2010

$ $Australia 13,263,836 22,308,725 Other foreign countries - - Total assets 13,263,836 22,308,725

(vi) Major customers

There are no large individual customers who can be regarded as a significant client of the group.

NOTE 25: MOVEMENTS IN PROPERTY PLANT AND EQUIPMENT

Movements in the Carrying Amounts

Movements in the carrying amounts for each class of property, plant and equipment between the beginning and the end of the current financial year.:

Land Buildings Plant & equipment

Leased plant &

equipment

Leasehold improve-

ments

Capital work in

progressTotal

2011 $ $ $ $ $ $ $Balance beginning of the financial year 7,307,432 3,122,741 371,917 53,625 39,409 - 10,895,124

Additions - - 78,602 - - - 78,602 Disposals - - - - - - - Impairment expense (5,437,379) (480,173) - - - - (5,917,552)Depreciation expense - (81,348) (99,935) (9,780) (6,451) - (197,514)Balance at end of financial year 1,870,052 2,561,223 350,583 43,845 32,958 - 4,858,660

2010Balance beginning of the financial year 8,142,768 3,571,042 318,753 63,405 38,207 - 12,134,175

Additions - - 186,818 - 7,577 - 194,395 Additions through acquisition of controlled entity - - 5,447 - - - 5,447

Asset Revaluation (835,336) (358,003) - - - - (1,193,339)Depreciation expense - (90,298) (139,101) (9,780) (6,375) - (245,554)Balance at end of financial year 7,307,432 3,122,741 371,917 53,625 39,408 - 10,895,124

No borrowing costs were capitalised in the 2011 year (2010: $nil) .

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NOTE 26: EARNINGS PER SHARE

2011 2010

$ $Basic profit / (loss) per share (28 .5) (3 .6)Diluted profit / (loss) per share (28 .5) (3 .6)

Reconciliation of earnings to profit or lossProfit / (loss) (9,446,978) (1,181,760)Profit / (loss) attributable to minority equity interest 4,828 (7,568)Redeemable and converting preference share dividends - - Earnings used to calculate basic EPS (9,442,150) (1,189,328)

Number of Shares

Number of Shares

Weighted average number of ordinary shares outstanding during the year used in calculating basic EPS 33,110,131 33,110,131

Weighted average number of options outstanding - 78,548 Weighted average number of ordinary shares outstanding during the year used in calculating dilutive EPS 33,110,131 33,188,679

Options to acquire ordinary shares in the parent entity are the only securities considered as potential ordinary shares in determination of diluted EPS .

Options issued are not presently dilutive and have been excluded from the calculation of diluted EPS.

NOTE 27: FINANCIAL RISK MANAGEMENT

The group’s principal financial instruments consist mainly of deposits with banks, investments, accounts receivable and payable, bills and leases .

The totals for each category of financial instruments, measured in accordance with AASB 139 as detailed in the accounting policies to these financial statements, are as follows:

2011 2010

Notes $ $Financial assetsCash and cash equivalents 5 569,055 66,826 Loans and receivables 6 480,721 727,817 Bonds and deposits 8 1,559 1,559 Available-for-sale financial assets:At fair value• Listed investments 10(a) 133,274 1,256,364 At cost• Unlisted investments 10(b) 1,000 1,000 Total available-for-sale financial assets 134,274 1,257,364 Total financial assets 1,185,609 2,053,566

Financial liabilitiesFinancial liabilities at amortised cost:Trade and other payables 14 1,071,517 673,892 Borrowings 15 106,619 128,128 Total financial liabilities 1,178,136 802,020

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NOTE 27: FINANCIAL RISK MANAGEMENT (cont’d)

(a) Financial Risk Management Policies

The main purpose of the financial instruments listed is to raise finance for the group’s operations when the board considers it appropriate. The group has various other financial assets and liabilities such as trade receivables and trade payables, which arise directly from its operations. Risks arising from the group’s financial instruments include interest rate risk, liquidity risk, share price risk and credit risk. The board reviews and agrees policies for managing each of these risks and they are summarised below. Overall these risks are considered to be minimal.

(i) Treasury Risk Management

The board considers financial risk exposure to evaluate treasury management strategies in the context of the most recent economic conditions and forecasts. The overall risk management strategy seeks to assist the group in meeting its financial targets, while minimising potential adverse effects on financial performance. Risk management policies are reviewed by the board when necessary. These include the use of credit risk policies and future cash flow requirements.

(ii) Financial Risk Exposures and Management

Interest rate risk

The group currently has limited debt exposure through a $106,619 fixed rate facility. The group’s exposure to cash flow interest rate risk is considered minimal.

Commodity Price risk

The group’s exposure to commodity price risk is considered nil.

Credit risk

The group trades only with parties that it believes to be creditworthy . It is the group’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures. In addition, receivable balances are monitored on an ongoing basis with the result that the group’s exposure to bad debts is not significant. There are no significant concentrations of credit risk within the group .

With respect to credit risk arising from the other financial assets of the group, which comprise cash and cash equivalents, available-for-sale assets and certain derivative instruments, the group’s exposure to credit risk arises from default of the counter party, with a maximum exposure equal to the carrying amount of those instruments. The group generally does not require third party collateral.

Liquidity risk

Liquidity risk arises from the possibility that the group might encounter difficulty in settling its debts or otherwise meeting its obligations related to financial liabilities. The group manages this risk through the following mechanisms:

• preparing forward looking cash flow analysis in relation to its operational, investing and financing activities;

• monitoring undrawn credit facilities;

• obtaining funding from a variety of sources;

• maintaining a reputable credit profile;

• managing credit risk related to financial assets;

• investing surplus cash with appropriately regulated financial institutions; and

• comparing the maturity profile of financial liabilities with the realisation profile of financial assets.

Cash flows realised from financial assets reflect management’s expectation as to the timing of realisation. Actual timing may therefore differ from that disclosed. The timing of cash flows presented in the table to settle financial liabilities reflects the earliest contractual settlement dates taking into consideration management expectations that group banking facilities will be extended.F

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(a) Financial Risk Management Policies (cont’d)

Liquidity risk (cont’d)

Financial liability and financial asset maturity analysis

Within 1 year 1 to 5 years Over 5 years Total

2011 2010 2011 2010 2011 2010 2011 2010

$ $ $ $ $ $ $ $

Financial liabilities due for payment

Borrowings (74,109) (82,426) (32,510) (45,702) - - (106,619) (128,128)

Trade & other payables (1,071,517) (673,892) - - - - (1,071,517) (673,892)

Total contractual outflows (1,145,626) (756,318) (32,510) (45,702) - - (1,178,136) (802,020)

Total expected outflows (1,145,626) (756,318) (32,510) (45,702) - - (1,178,136) (802,020)

Financial assets - cash flows realisable

Cash 569,055 66,826 - - - - 569,055 66,826

Bonds & deposits 1,559 1,559 - - - - 1,559 1,559

Trade receivables and loans 480,721 727,817 - - - - 480,721 727,817

Available for sale financial assets - - - - 134,274 1,257,364 134,274 1,257,364

Total anticipated inflows 1,051,335 796,202 - - 134,274 1,257,364 1,185,609 2,053,566

Net (outflows) / inflows on financial instruments (94,291) 39,886 (32,510) (45,702) 134,274 1,257,364 7,473 1,251,547

Price risk

The group’s has exposure to market price risk through its investment in the WVRPT.

Share price risk

The company and the group have investments in the following ASX listed company sectors at the end of the reporting period:

• Information technology

• Agriculture

• Banking and finance

These are long term shareholdings, however exposure exists to movements in the market price.

Interest Rate Risks

The group is exposed to interest rate risk through financial assets and liabilities.

The following tables set out the carrying amount, by maturity, of the financial instruments exposed to interest rate risk.

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(a) Financial Risk Management Policies (cont’d)

Interest Rate Risks (cont’d)

Floating interest

rate

1 year or less

1 to 5 years

Over 5 years

Non - interest bearing

Total

Weighted average effective interest

rate

2011 $ $ $ $ $ $ %

Financial assets

Cash on hand / at bank 569,055 - - - - 569,055 4 .55

Trade debtors - 99,515 - - 381,206 480,721 7 .40

Bonds and deposits - - - - 1,559 1,559 -

569,055 99,515 - - 382,765 1,051,335

Financial liabilitiesTrade creditors (excluding leave accruals) - - - - 1,071,517 1,071,517 -

Other Loans - 74,109 32,510 - - 106,619 6 .45

- 74,109 32,510 - 1,071,517 1,178,136

2010

Financial assets

Cash on hand / at bank 44 - - - 66,782 66,826 5 .76

Trade debtors - 197,917 - - 529,901 727,818 5 .75

Bonds and deposits - - - - 1,559 1,559 -

44 197,917 - - 598,241 796,204

Financial liabilitiesTrade creditors (excluding leave accruals) - - - - 673,892 673,892 -

Other Loans - 82,426 45,702 - - 128,128 4 .20

- 82,426 45,702 - 673,892 802,020

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(b) Net Fair values

Set out below is a comparison by category of carrying amounts and fair values of all of the group’s financial instruments recognised in the financial statements.

Market bid or last sale price at balance date, adjusted for transaction costs, have been used to determine the fair value of listed available-for-sale investments.

Carrying Amount Fair Value

Footnote 2011 2010 2011 2010

$ $ $ $Financial assetsCash and cash equivalents (i) 569,055 66,826 569,055 66,826 Trade and other receivables (i) 381,206 344,670 381,206 344,670 Loans and advances - related parties (ii) 99,515 383,147 99,515 383,147 Bonds and deposits (i) 1,559 1,559 1,559 1,559 Available for sale financial assetsatfairvalue• listed investments 133,274 1,256,364 133,274 1,256,364 atcost• unlisted investments 1,000 1,000 1,000 1,000 Total available-for-sale financial assets (iii) 134,274 1,257,364 134,274 1,257,364 Total financial assets 1,185,609 2,053,566 1,185,609 2,053,566

Financial liabilitiesTrade creditors (excluding leave accruals) (i) 1,071,517 673,892 1,071,517 673,892 Interest bearing liabilities (iv) 106,619 128,128 106,619 128,128 Total financial liabilities 1,178,136 802,020 1,178,136 802,020

The fair values disclosed in the above table have been determined based on the following methodologies:

(i) Cash and cash equivalents, trade and other receivables and trade and other payables are short-term instruments in nature whose carrying value is equivalent to fair value. Trade and other payables exclude amounts provided for annual leave, which is not considered a financial instrument.

(ii) Discounted cash flow models are used to determine the fair values of loans and advances. Discount rates used on the calculations are based on interest rates existing at the end of the reporting period for similar types of loans and advances. Differences between fair values and carrying values largely represent movements in the effective interest rate determined on initial recognition and current market rates.

(iii) For listed available-for-sale and held-for-trading financial assets, closing quoted bid prices at the end of the reporting period are used. In determining the fair values of the unlisted available-for-sale financial assets, the directors have used inputs that are observable either directly (as prices) or indirectly (derived from prices) .

The directors have determined that the fair values of the available-for-sale financial assets carried at cost and at recoverable amount cannot be reliably measured as variability in the range of reasonable fair value estimates is significant. Consequently, such assets are recognised at cost and their fair values have also been stated at cost in the table above . However, the directors estimate that such investments could have fair values in the range of $500 to $2,000 at the end of the reporting period. There is no active market for these investments, and there is no present intention to dispose of such investments.

(iv) Fair values are determined using a discounted cash flow model incorporating current commercial borrowing rates. The fair values of fixed rate bank debt will differ to the carrying values.

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(b) Net Fair values (cont’d)

FinancialinstrumentsMeasuredatFairValue

The financial instruments recognised at fair value in the Statement of Financial Position have been analysed and classified using a fair value hierarchy reflecting the significance of the inputs used in making the measurements. The fair value hierarchy consists of the following levels:

2011 Level 1 Level 2 Level 3 Total

$ $ $ $Financial assets:Available-for-sale financial assets• listed investments 133,274 - - 133,274 • unlisted investments - - 1,000 1,000

133,274 - 1,000 134,274

2010Financial assets:Available-for-sale financial assets• listed investments 1,256,364 - - 1,256,364 • unlisted investments - - 1,000 1,000

1,256,364 - 1,000 1,257,364

Included within Level 1 of the hierarchy are listed investments. The fair values of these financial assets have been based on the closing quoted bid prices at reporting date, excluding transaction costs.

In valuing unlisted investments, included in Level 2 of the hierarchy, valuation techniques such as those using comparisons to similar investments for which market observable prices are available have been adopted to determine the fair values of these investments .

(c) Contingencies

The company and certain controlled entities have potential financial liabilities that may arise from certain contingencies disclosed in Note 19. As explained in that note, no material losses are anticipated in respect of any of those contingencies and the fair value disclosed above is the directors’ estimate of amounts that would be payable by the group as consideration of the assumption of those contingencies by another party .

(d) Sensitivity Analysis

The group has performed sensitivity analysis relating to its exposure to interest rate risk at balance date. This sensitivity analysis demonstrates the effect on the current year results and equity which could result from a change in this risk.

(i) Interest rate sensitivity analysis

At 30 June 2011, the effect on profit and equity as a result of changes in the interest rate, with all other variables remaining constant would be as follows:

2011 2010

Change in profit $ $ - Increase in interest rate by 2.5% 14,226 1,671 - Decrease in interest rate by 2.5% (14,256) (1,671)Change in equity - Increase in interest rate by 2.5% 14,226 1,671 - Decrease in interest rate by 2.5% (14,256) (1,671)

(ii) Price risk sensitivity analysis

At 30 June 2011, the net effect on profit and equity of a 20% change in listed investments, with all other variables remaining constant is $26,655 up / down (2010: $251,273 up / down) for the group .

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NOTE 28: SHARE BASED PAYMENTS

On 7 April 2009, 500,000 share options were granted to Key Management Personnel under a share option agreement to take up ordinary shares at an exercise price of $0.40 each. These options are exercisable on or before 31 December 2011, hold no voting or dividend rights unless excercised and are transferable. Further details are provided in the Directors’ Report. These options may be exercised at anytime during the option term.

Number

Weighted average exercise

price# $

Options outstanding as at 30 June 2010 500,000 0 .40 Granted - - Options outstanding as at 30 June 2011 500,000 0.40

Options exercisable as at 30 June 2011 500,000 Options exercisable as at 30 June 2010 500,000

The weighted average remaining contractual life of options outstanding at 30 June 2011 was 0.5 years.

The fair value of the options granted to employees is deemed to represent the value of the employee services received over the vesting period .

The weighted average fair value of options granted during the year was $nil (2010: $nil) .

Historical volatility has been the basis for determining expected share price volatility as it is assumed that this is indicative of future movements .

The life of the options is based on the historical exercise patterns, which may not eventuate in the future.

NOTE 29: EVENTS AFTER THE BALANCE DATE

The financial report was authorised for issue on 29 September 2011.

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DIRECTORS’ DECLARATION

DIRECTORS’ DECLARATION

For the year ended 30 June 2011

In the opinion of the directors of Trustees Australia Limited:

(a) the financial statements and notes of the company and of the group are in accordance with the Corporations Act 2001, and:

(i) give a true and fair view of the company’s and group’s financial position as at 30 June 2011 and of their performance for the year ended on that date; and

(ii) complying with Accounting Standards, which, as stated in accounting policy Note 1 to the Financial Statements, constitutes explicit and unreserved compliance with International Financial Reporting Standards (IFRS); and

(b) there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable; and

This declaration has been made after receiving the declarations required to be made to the directors in accordance with Sections 295A of the Corporations Act 2001 for the financial year ending 30 June 2011.

In the opinion of the directors, as at the date of this declaration, there are reasonable grounds to believe that the company and the companies to which the ASIC Class Order 98/1418 applies as identified in Note 22 as a group will be able to meet any obligations or liabilities, which they are, or may become, subject by virtue of the Deed of Cross Guarantee .

This declaration is made in accordance with a resolution of the board of directors .

__________________________________

Michael Leslie HackettChairman

__________________________________

Kerry John DalyChairman

Brisbane

29 September 2011

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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERSF

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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERSF

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SHAREHOLDER INFORMATION

The following information was extracted from Trustees Australia’s Register of Shareholders on 16 September 2011:

tWentylargestshareholders

Fully Paid SharesShares Held % of Issued

1 Costine Pty Ltd 14,460,044 43 .67%2 Mikko Constructions Pty Ltd 2,878,880 8 .69%3 Fiduciary Nominees Pty Ltd 2,569,719 7 .76%4 The Trustee Elizabeth Mersh Superannuation Fund 1,877,962 5 .67%5 G Echo Pty Ltd 1,529,323 4 .62%6 Book Now Online Pty Ltd 958,526 2 .89%7 Wenola Pty Limited 763,968 2 .31%8 Mr Milton Yannis 470,098 1 .42%9 Norman Colburn Mayne 450,000 1 .36%10 Malo Investments Pty Ltd 328,479 0 .99%11 Peter Cecil Newman 302,393 0 .91%12 Kreskin Pty Ltd 300,200 0 .91%13 Adalora Pty Limited 300,000 0 .91%14 Flexiplan Management Pty Ltd 200,000 0 .60%15 Jig Investments Pty Ltd 150,100 0 .45%16 Phillip Dickinson 150,000 0 .45%17 Loratron Pty Ltd 150,000 0 .45%18 Ian Henderson 148,193 0 .45%19 Mr Ross George Yannis 140,000 0 .42%20 Linton Rise Pty Ltd 125,000 0 .38%

Total of Top Twenty Shareholdings 28,252,885 85.31%Total Shares on issue 33,110,131 100.00%

distriButionoFshareholdings

Size of Holding Number of Shareholders

Total Units %

1 - 1000 69 27,981 0 .081,001 - 5,000 173 380,880 1 .155,001 - 10,000 75 564,761 1 .7110,001 - 100,000 101 3,465,822 10 .48100,001 or greater 28 28,670,687 86 .58

446 33,110,131 100.00

MarketaBleParcels

At 16 September 2011, using the last traded share price of $0 .21 per share, there were 173 holdings, which were of less than a marketable parcel ($500).

Votingrights

On a show of hands, every member present in person or by proxy or attorney or being a corporation by its authorised representative shall have one vote. On a poll, every member who is present in person or by proxy or attorney, or being a corporation, by its authorised representative, shall have one vote for every share of which he is the holder .

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SHAREHOLDER INFORMATION

holderoFreleVantinterest

The number of shares held either directly or indirectly by substantial shareholders listed in the holding company’s register on 16 September 2011 was

OrdinaryCostine Pty Ltd ATF The Hackett Super Fund 14,460,044Mikko Constructions Pty Ltd 2,878,880Fiduciary Nominees Pty Ltd 2,584,719Trustee for Elizabeth Mersh Super Fund 1,877,962G . Echo Pty Ltd 1,529,323Book Now Online Pty Ltd 958,526Michael Leslie Hackett 22,948Jabane Pty Ltd 5,000Cotrace Pty Ltd 1,000Estate of Phyllis Mary Hackett 918Total 24,319,320

Percentage of shares on issue in category 73 .45%

unquotedsecurities

Options over unissued shares

A total of 500,000 options are on issue to Kerry Daly, a director of Trustees Australia .

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CORPORATE DIRECTORY

Board of Directors Company Secretaries

Michael Hackett (B .Com, FCA) Managing Director / Acting Chairman

Elizabeth HackettCompany Secretary

Kerry Daly (B .Bus, CPA) Director

Richard Brennan (B .Sc, B .Bus) Company Secretary

Nathan Leman Director

Registered Office Corporate Office

Level 1, 41 Edward StreetBrisbane QLD 4000

Level 1, 41 Edward StreetBrisbane QLD 4000

Telephone: (07) 3020 3020 GPO Box 6Facsimile: (07) 3020 3080 Brisbane QLD 4001Email: Shareholders@trusteesau .com .auWeb: www .trusteesau .com .au Telephone: (07) 3020 3020

Facsimile: (07) 3020 3080Email: mail@trusteesau .com .auWeb: www .trusteesau .com .au

Share Register Auditor

Boardroom Limited Hayes Knight Audit (Qld) Pty LtdPO Box R67Royal ExchangeSydney NSW 1223

Level 19127 Creek StreetBrisbane QLD 4000

Telephone: (02) 9290 9600 Telephone: (07) 3229 2022Facsimile: (02) 9279 0664 Facsimile: (07) 3229 3277Email: registries@registries .com .au Email: [email protected]: www .boardroomlimited .com .au Web: www.hayesknightqld.com.au

Stock ExchangeTrustees Australia is listed on the official List of the Australian Securities Exchange Limited (ASX)

The ASX Code is “TAU”.

Trustees Australia Limited ACN 010 653 862

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Documents

For personal use only › asxpdf › 20110930 › pdf › 421fv7l2jchc4l.pdf · independent valuations in the 2011 financial accounts. Herron Todd White Valuers (Mackay) were commissioned