Public Trustee Annual Report 2012–13...During 2012–13, we also undertook a media, radio and digital marketing campaign throughout metropolitan Adelaide and regional South Australia

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Public Trustee Annual Report 2012-13

Public Trustee Annual Report

2012–13

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Public Trustee 211 Victoria Square Adelaide SA 5000 www.publictrustee.sa.gov.au Tel: 08-8226 9200 Fax: 08-8226 9350 ABN: 72-906-921-697 ISSN: 1836-263X (On-line)

http://www.publictrustee.sa.gov.au/

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TO: The Attorney-General cc. Rick Persse, Chief Executive, Attorney-General’s Department FROM: Debra Contala, Public Trustee

SUBJECT: Annual Report 2012–13

Pursuant to Section 51 of the Public Trustee Act 1995, I present the Annual Report on the operations of Public Trustee and the financial income for the year 2012–13. The report is provided to you in Parliamentary document format, suitable for presentation before both Houses of Parliament and also electronically. Once approved in Parliament, the Report will be uploaded on Public Trustee‘s website in a print friendly format. Public Trustee will print and forward copies of the Parliamentary format version upon request to members of the South Australian community and other interested persons who do not have internet access. Pursuant to clause 31 (1) of the Public Trustee Act 1995, the Common Funds annual financial report, as contained within the Public Trustee Annual Report, will be distributed to investors by 31 October 2013. Original signed 30 September 2013 Debra Contala Public Trustee 30 September 2013

MINUTES forming enclosure to: PTCR13/039

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THIS PAGE IS BLANK

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Table of contents Our Commitment to South Australia ...................................................................................... 7 The Year in Review ............................................................................................................... 9 Our Performance Highlights .................................................................................................11 Our Corporate Governance ..................................................................................................17

Governance ......................................................................................................................17 Boards and Committees ...................................................................................................19

Service to Customers ...........................................................................................................21 2013 Customer Satisfaction Survey ..................................................................................21 Customer Service Standards ............................................................................................21 Responding to Customer Feedback .................................................................................22 Preparing Wills and Powers of Attorney Documents .........................................................23 Deceased Estate Administration – Executor Services ......................................................23 Deceased Estate Administration – Unclaimed Estates .....................................................24 Deceased Estate Administration – Trust Services ............................................................24 Personal Estates ..............................................................................................................25 Public Trustee as a Regulator...........................................................................................26 Legal Section ....................................................................................................................26 Taxation Services .............................................................................................................27 Real Estate and Property Management ............................................................................28

Marketing Our Services ........................................................................................................29 Media Marketing Campaign ..............................................................................................29 Marketing, Public Relations and Community Engagement ................................................29

Business Improvement .........................................................................................................31 Our People ...........................................................................................................................33

Organisational Structure ...............................................................................................33 Executive Team ............................................................................................................34 Executive Performance Appraisal .................................................................................35 Executive Remuneration ...............................................................................................35 Supporting People with a Disability ...............................................................................35 Equal Opportunity and Fairness ...................................................................................36 Whistleblowers Protection Act 1993 ..............................................................................36 Staff Development and Training....................................................................................36 Human Resources Statistical Tables 2011-12 ..............................................................37

Organisational Support .........................................................................................................41 Corporate and Financial Services .....................................................................................41

Corporate Finance ........................................................................................................41 Consultancies ...............................................................................................................41 Employees’ Overseas Travel ........................................................................................41 Contracts exceeding $4 million .....................................................................................41 Environmental Impact and Energy Efficiency ................................................................41 Public Sector Fraud ......................................................................................................42 Account Payment Performance ....................................................................................42 Freedom of Information ................................................................................................42 Information and Communications Technology (ICT) .....................................................43

Client Financial Services ..................................................................................................44 Investment Services .........................................................................................................45

Financial Performance..........................................................................................................47 Corporate Financial Overview 2012–13 ............................................................................47 Customer Investment Performance ..................................................................................50

Investment Overview ....................................................................................................50 Manager of Funds ........................................................................................................52 Peer Group Comparisons .............................................................................................52

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Corporate and Client Financial Information...........................................................................53

Certification ......................................................................................................................53 Independent Audit Report .................................................................................................54 Public Trustee Corporate Financial Statements ................................................................57 Statement of Trusts being administered ...........................................................................77 Common Funds Financial Statements 2012–13 ...............................................................82

Appendix 1 Common Funds Statutory Information ............................................................. 119 The nature and amount of any fee that Public Trustee charges in respect of investment in the Common Funds. ............................................................................................... 119 Indirect Cost Ratios .................................................................................................... 119 Classes of investment in which Common Funds may invest ....................................... 122

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Our Commitment to South Australia ‘The Public Trustee’ is a statutory officer pursuant to the Public Trustee Act 1995. ‘Public Trustee’ is a body corporate and has the powers of a natural person. Public Trustee is also a separate agency within the broader departmental organisation of the Attorney-General’s Department (AGD) and reports in the context of the Strategic Plan of the AGD Our Vision To be seen as the people’s trustee of choice by customers, stakeholders and the public. Our Mission To provide South Australians with expert trustee services that offer security and peace of mind about financial and investment services, and their assets and affairs. Our Services Our services to customers include a range of estate planning, administration and trustee services, Will making, estate administration, Enduring Power of Attorney, personal estate administration, taxation and funds management services. Our Customers and Stakeholders Customers and beneficiaries whose financial affairs we manage; Family members, carers, liaison persons and health professionals involved with

customers under our management; Guardians of customers; Private financial administrators and managers; Courts, tribunals and regulatory agencies; Peak disability advocacy groups; The Attorney-General and the Treasurer on behalf of the South Australian

Government; and Staff of Public Trustee.

Our Principles and Values Public Trustee is committed to these values: We treat all our customers with dignity and respect; We care about our customers and administer their financial and legal affairs

courteously, promptly and professionally; We encourage feedback and act on it promptly, regardless of whether it comes in the

form of complaints or compliments; and We always act in the best interests of our customers.

Our Strategic Objectives Achieve recognition for the provision of respectful, timely and expert services to all

customers; Encourage South Australians to have a valid Will; Grow our business through an increase in the number of South Australians who

choose to use our services; Manage our business well; and Invest in our people and create a rewarding place to work.

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Relationship to the Attorney-General’s Department Strategic Directions Public Trustee aligns its business objectives and customer-focused services with the AGD Strategic Directions and with South Australia’s Strategic Plan. A particular focus for Public Trustee is its work to protect and support vulnerable people through providing financial administration for those who are unable, through age or disability, to manage their own affairs. Public Trustee supports the AGD in achieving the following strategies, which our activities are reported against. Strategic Goal 2 – To champion fair & transparent access to justice Strategy 2.1: Eliminate unnecessary delays in the justice system Strategy 2.4: Provide for the quick and efficient resolution of civil and administrative

disputes Strategic Goal 3 – To protect people’s rights and promote public confidence in our

institutions and services Strategy 3.2: Advocate for and protect the rights of people experiencing vulnerability Strategy 3.3: Educate and inform people about their rights and responsibilities Strategy 3.4: Support cultural diversity and promote equal opportunity Strategic Goal 4 - To be a high-performing organisation Strategy 4.3 Live our core behaviours Strategy 4.4: Value staff diversity and invest in development & leadership opportunities Strategy 4.5: Set the scene for a productive and rewarding workplace

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The Year in Review

This year has been another of significant development for Public Trustee. We have undertaken a number of new initiatives aimed at improving our services to customers.

In 2012–13, we developed and launched new Standards of Service for Public Trustee. These were developed through the participation of all staff who enthusiastically embraced the process. The standards aim for us to get the ‘TICK of approval’ from our customers for the service they receive. Our commitment to the standard is encompassed in the TICK badge (shown below) that now appears on our publications and correspondence.

All staff members were trained in the standards, and performance against the standards is measured in their annual performance development discussions. In May 2013, we finalised our 2013 Customer Satisfaction Survey. The results demonstrate a very positive level of satisfaction, with 92% of respondents indicating they would recommend Public Trustee to others. The overall response rate of 59% indicates that the results reflect the general view of Public Trustee customers. This year, for the first time, we surveyed Trust customers and also those people who revoked their Will with us during 2012–13. The 2013 Customer Satisfaction Survey provides a strong indication of the highly valued service we provide our customers. We will build on this and work to further improve customer services in the year ahead. During 2012–13, we also undertook a media, radio and digital marketing campaign throughout metropolitan Adelaide and regional South Australia. To engage effectively with the community, Public Trustee also made presentations to a range of community and professional groups. To present a professional image and consistency in branding in support of this campaign, display material was developed and used at various events. Tailored fact sheets were also developed and distributed to the public at these events. Pleasingly, the number of Wills customers for Public Trustee increased in 2012–13. This is important for the South Australian community and for the future sustainability of Public Trustee. In response to customer requests for better information, there has been a comprehensive refresh of the Frequently Asked Questions (FAQs) published on the Public Trustee website. All FAQs are in a new PDF format so customers can print them out easily. They have also been simplified and are easier to navigate. One of our key strategic aims has been to visit more customers, in order to better communicate with them and to ensure their needs are being met. During 2012–13, we visited 881 Personal Estates customers – many of whom were new to our services. This represents a significant increase in visitations since last year and was appreciated by our many customers. Public Trustee produced a profit of $1.9 million, before income tax equivalent payments. This is a good result given a number of commercial challenges and reflects the prudent financial management of the organisation and improved investment returns during 2012–13.

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Financial markets have continued to experience volatility during 2012–13. Fortunately the overall share market performance was better than any other year since the global financial crisis. All of the Standard Investment Strategies (SIS) performed soundly and exceeded benchmark performance. This is a very pleasing result. Our preference for high-quality investments and our strict investment guidelines continue to serve customers well. Much work was done on our business systems and processes this year. We mapped our core business processes and upgraded key controls, undertook major feasibility reviews of our Information Communication Technology (ICT) systems, and began work on a new customer investment planning tool. We also began preparations to implement reforms to our current superannuation arrangements for customers. Significant improvements were made to the security of our information systems and to our plans for disaster recovery. Training and induction for staff continued as a focus, with the development and implementation of a comprehensive agency-wide training plan. In addition to corporate programs, a number of staff also pursued professional trust qualifications through the University of Sydney.

The Year Ahead Our aim is to build on our achievements from 2012–13 and continue to improve all areas of our business. Work is already underway to implement the upgrade of our investment planning system, and there will be a continued focus on systems upgrade in 2013–14. Additional resources have also been provided in the budget to begin an upgrade of our core ICT business systems. Improved arrangements for customer superannuation are expected to be implemented in early 2013–14. We are planning an intranet and website refresh to improve internal communication and the provision of information to the wider community. Training and support to staff will also continue to be a focus. Along with all other government agencies, Public Trustee will be required to make efficiency savings in 2013–14. This heightens the need to ensure that our staff are well trained and provided with the right resources to do their important work. As we embark on 2013–14, I am proud of our achievements and progress this year as outlined in this Annual Report. Our customers continue to remain our priority. I would like to take this opportunity to thank all the staff at Public Trustee, and the key stakeholders we partner with, for their continued hard work and support. Debra Contala Public Trustee 30 September 2013

Original signed 30 September 2013

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Our Performance Highlights Achievements against our Strategic Plan 2011–2014 Our Strategic Plan 2011–2014 outlines our vision, values and primary objectives. In 2012–13, we made the following achievements against the plan:

Primary Objective One

Achieve recognition for the provision of respectful, timely and expert services to all customers

Significantly reduced the cost of the quarterly financial reports sent to customers and the time spent on this.

Implemented a new Compliments and Complaints recording and monitoring system.

Implemented the Customer Visitation Program, including training for Personal Estates Branch staff, to improve visitation to customers. 881 visits to customers were made.

Developed an extensive set of Frequently Asked Questions (FAQs) documents, published on Public Trustee website.

Began collecting telephone call data to better serve our customers.

Undertook a feedback survey of customers through normal business practice, with an overall response rate of approximately 59%. 92% of customers responding to the survey indicated they would recommend Public Trustee to others.

Involved all Public Trustee staff in workshops to develop new Standards of Service and provided Standards training to staff.

Developed and published Public Trustee's commitment to its customers through the ‘Our Services’ brochure.

Began developing a new Investment Planning System to manage customer finances.

Collaborated with other key agencies in the development of the draft strategy for Safeguarding Older People, 2014–21.

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Primary Objective Two

Encourage South Australians to have a valid Will

Undertook a media marketing campaign including radio, print media and a refresh of the Public Trustee website.

Evaluated the results of the 2012 marketing campaign; it showed an increase of 35% in the numbers of Wills made when compared to the same period in 2011.

Redesigned and updated information brochures provided to the community.

Primary Objective Three

Grow our business through an increase in the number of South Australians who choose to use our services

Undertook a range of promotions at relevant events including the World Elder Abuse Awareness Day conference and the Alliance for the Prevention of Elderly Abuse Day Expo.

Continued to engage the community through education forums and information sessions, including at the Courts Open Day and a joint initiative with the Guardianship Board and the Office of the Public Advocate in the Iron Triangle (Port Pirie, Port Augusta and Whyalla).

Undertook a range of general promotions, including distribution of materials to emergency services offices and local councils promoting our Will-making services.

Partnered with Super SA to deliver presentations to public sector employees about the importance of having a Will and an Enduring Power of Attorney.

Public Trustee marketing material promoting our Will-making service is now included in ‘Baby Bounty Bags’ provided to new families.

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Primary Objective Four

Manage our business well

Investment returns for customers continued to exceed industry benchmarks.

Conducted a review of the feasibility of core ICT business systems with a view to either upgrade or replace.

Documented key business processes.

Reviewed key internal controls and updated the Control Self Assessment system.

Implemented a new Risk Management Framework.

Refreshed the ICT server infrastructure.

Improved business continuity of our ICT systems through the establishment of a new disaster recovery environment.

Implemented an Information Security Management System in line with the SA Government Framework.

Completed a review of fees which included comparison with competitors and other Australian Public Trustees, resulting in an updated and easier to understand Fees and Charges brochure.

Reviewed a number of major contracts and tenders and developed a forward procurement plan to monitor future contracts.

Implemented processes to track and monitor all Public Trustee case work in and out of the Supreme Court Probate Registry.

Restructured Public Trustee’s internal governance model.

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Primary Objective Five

Invest in our people and create a rewarding place to work

Supported several staff as they work toward a Certificate IV in Personal Trust Administration through the University of Western Sydney.

Ensured all staff were trained in Public Trustee’s new Customer Service Standards and embedded the standards’ requirements into performance review discussions.

Enabled staff in our Customer Services areas to attend training in Conflict Resolution, Managing Vexatious Complainants and Essential Business Writing.

Undertook ‘Workplace Health and Safety (WHS) for Managers’ training for all team leaders and managers.

Conducted training sessions on Code of Ethics and Workplace Conduct.

Improved personal security through the installation of CCTV in shopfronts and the installation of other measures to prevent unauthorised access.

Encouraged participation in the corporate health and wellbeing program, Global Corporate Challenge.

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Priorities for 2013–14 In line with our Strategic Plan 2011–2014 our priorities for the coming year include:

Objective One Achieve recognition for the provision of respectful, timely and expert services to all customers

Complete the replacement of our customer Investment Planning System (IPS).

Revise and implement new superannuation arrangements for customers.

Review and improve records management to support improved responsiveness to customers and ensure accuracy of estate work.

Complete the whole-of-government banking transition for Public Trustee customers.

Improve our ability to serve customers from diverse backgrounds.

Objective Two

Encourage South Australians to have a valid Will

♦ Promote Public Trustee through the media by marketing our services.

♦ Evaluate the use of Plain English Wills in other Australian jurisdictions.

Objective Three Grow our business through an increase in the number of South Australians who choose to use our services

Continue to actively promote Public Trustee through presentations, sponsorships and displays at community events.

Refresh and improve Public Trustee’s website.

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Objective Four

Manage our business well

Continue to review a range of key business processes and apply lean thinking to their operation to improve efficiency and reduce time taken.

Continue to work towards the upgrade and refresh of our core ICT business systems.

Conduct a review of property inspection and insurance procedures.

Negotiate a new ownership framework with the Department of Treasury and Finance (DTF) to include Community Service Obligations.

Objective Five

Invest in our people and create a rewarding place to work

Develop further online training to ensure all staff have consistent and relevant training for their roles.

Redevelop our intranet to ensure staff have the tools they need to undertake their work and can access accurate corporate information quickly and easily.

Develop a program of innovative projects to tap into staff ideas for continuous improvement.

Continue to encourage employees to participate in health and wellbeing programs.

Implement a Disclosure of Conflicts of Interest Policy across Public Trustee.

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Our Corporate Governance Governance Public Trustee’s Function Under the provisions of Section 5(2) of the Public Trustee Act 1995, Public Trustee may act as a trustee, executor of a Will, administrator of an estate (whether or not of a deceased person), manager, receiver, committee, curator, guardian, next friend, agent, attorney or stakeholder. Under the Legal Practitioners Act 1981, Public Trustee is also able to prepare Wills. Public Trustee is a Public Non-Financial Corporation under the Public Corporations Act 1993. It generates its own income, makes tax-equivalent payments annually, and pays a dividend to Government out of its after-tax profits as agreed by the South Australian Attorney-General and the Treasurer. Basis of Authority In performing its duties, the following legislation forms the basis of which Public Trustee services are delivered to customers, and how: Public Trustee Act 1995; Administration and Probate Act 1919; Aged and Infirm Persons’ Property Act 1940; Family Relationships Act 1975; Guardianship and Administration Act 1993; Inheritance (Family Provision) Act 1972; Powers of Attorney and Agency Act 1984; Trustee Act 1936; and Wills Act 1936.

Public Trustee Charter Under the Public Corporations Act 1993, a Charter must be prepared for a public corporation by its Minister and the Treasurer. The Charter, agreed by the Attorney-General, the Treasurer and the Public Trustee describes the reporting and accountability requirements and sets out the responsibilities and the expectations of both Public Trustee and the Government. The Charter is reviewed annually. The Charter also requires an agreed Annual Performance Statement that outlines Public Trustee’s objectives for invested customer funds, and financial and other performance targets. Responsibility As noted earlier, ‘The Public Trustee’ is a statutory officer pursuant to the Public Trustee Act 1995. ‘Public Trustee’ is a body corporate and has the powers of a natural person. Public Trustee is also a separate agency within the broader departmental organisation of the AGD and reports in the context of the Strategic Plan of the AGD.

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The Public Trustee has the full responsibilities of a trustee in accordance with the Public Trustee Act 1995 in carrying out the roles and functions of the office. The Public Trustee is responsible for the strategic direction of the office and the management of service delivery. Risk Management Public Trustee has a risk management framework that assists with the management of both strategic and business risk. This occurs through stringent risk assessment by senior management and the adoption of controls to manage identified risk. The framework covers reviews of all of Public Trustee’s investment, financial, operational and administrative responsibilities, at both customer and corporate level. Supporting this framework is an extensive system of control self-assessment; this requires managers to report six-monthly to Public Trustee's Audit and Risk Management Committee on individual branch compliance with internal controls, instances of failure to comply, and proposed corrective action. This is a comprehensive assessment process ensuring each control is assessed on the adequacy of its design and its effectiveness in managing that particular risk. The cycle of ongoing risk assessment helps in the development of Public Trustee’s annual internal audit plan. On 1 July 2012, following the wind-up of the Trustee Corporation of Australia, Public Trustee became a member of the Financial Services Council (FSC). The Council represents organisations undertaking funds management, superannuation, life insurance, financial advice, trustee and public trustee services, and has more than 130 members. External Audit The Auditor-General audits the operations and finances of Public Trustee annually. The Audit and Risk Management Committee receives and reviews all the Auditor-General’s findings, plus management’s response and the corrective actions taken. Internal Audit The Audit and Risk Management Committee oversees the preparation of an annual internal audit work plan. Public Trustee has engaged an external firm to undertake internal audits, consistent with the approved work plan. All internal audit reports and management responses are presented to this committee for consideration. Indemnity of Officers Pursuant to Section 49 of the Public Trustee Act 1995, any liability incurred by Public Trustee may be enforced against the Crown. Notwithstanding this, Public Trustee has comprehensive professional indemnity insurance through the South Australian Government Captive Insurance Corporation (SAICORP), covering all Public Trustee officers in the performance of their required duties.

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Boards and Committees Investment Advisory Committee The Investment Advisory Committee ensures that a sound and efficient system of customer investment is maintained. Chaired by the Public Trustee, the committee meets quarterly to provide appropriate advice, review the performance of Public Trustee’s investments, and make recommendations on investment matters. Public Trustee’s Investment Guidelines and Procedures clearly define investment processes for internally managed portfolios, sub-portfolio allocation, asset allocation for Standard Investment Strategies (SIS) and the process for engaging external fund managers. The guidelines are regularly reviewed by the committee. Public Trustee engages an expert investment adviser to: Review the appropriateness of strategic asset allocation for all Public Trustee Standard

Investment Strategies; Provide portfolio structuring advice; Assist in selecting fund managers and monitoring performance, and provide ongoing

research into new managers; Provide quarterly reporting, ad hoc special reports, and dynamic asset allocation advice; Attend meetings of the committee and provide advice associated with Public Trustee

investment activity to that committee and senior management; and Provide other specialist advice.

Members of the committee during 2012–13 were: Debra Contala, the Public Trustee; Frankie Anderson, General Manager, Customer Services, Public Trustee; Tony Brumfield, General Manager, Business and Client Financial Services, Public

Trustee; Nick Wiseman, Manager, Investment Services, Public Trustee; and Steven Gregor, Manager, Client Financial Services, Public Trustee.

A representative of the Department of Treasury and Finance attends meetings of the committee. Funds Management Forum A subset of members of the Investment Advisory Committee and staff of the Funds Administration team meets monthly in the Funds Management Forum to review and provide advice on: Accounting, taxation and system operations; Common Fund operations, performance and investment management issues; Standard Investment Strategy operations, performance and investment management

issues; and Common Fund and Standard Investment Strategy compliance and asset allocation

issues.

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Corporate Investment Committee The Corporate Investment Committee meets quarterly to review the performance of invested corporate funds and the associated asset allocation strategies. The committee provides assurance and assistance to Public Trustee to ensure a sound, efficient and prudent system for the investment of corporate funds. Audit and Risk Management Committee The Audit and Risk Management Committee is responsible for providing independent scrutiny of Public Trustee’s risk, control and compliance framework, and its internal and external accountability responsibilities. The committee has a broad skill base, with an independent Chair, four independent members and one senior member of Public Trustee’s staff. All members are appointed by the Public Trustee following consultation with the Chief Executive of the Attorney-General’s Department. The Public Trustee, the General Manager, Business and Client Financial Services, representatives of the Auditor-General, and a representative from the Department of Treasury and Finance also attend meetings of the committee. During 2012–13 the committee comprised: Peter Whelan, Partner, PKF (Chair); Michael Barrett, Partner, Finlaysons (until August 2012); Andrew Swanson, Executive Director, Finance and Business Services, Attorney-

General’s Department; Christine Locher, Principal, Solutions@Locher Pty Ltd; Pamela Martin, Commercial Counsel, Department of the Premier and Cabinet; and Frankie Anderson, General Manager Customer Services, Public Trustee.

The committee meets at least five times per year and reports annually to the Public Trustee and the Chief Executive, AGD, on its operations and activities. The report includes: A summary of Public Trustee’s progress in addressing the findings and recommendations

made in internal and external audit reports; An overall assessment of Public Trustee’s risk, control and compliance framework,

including details of any significant emerging risks or legislative changes that may have an impact on Public Trustee; and

The number of meetings held during the relevant period and the number of meetings attended by each member.

The committee also conducts an annual Self Assessment and uses that collective feedback to determine areas where it might improve.

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Service to Customers 2013 Customer Satisfaction Survey Public Trustee began surveying customers in 2011. In 2012-13 we undertook our third survey. For the most part, we survey customers as part of normal business practice. Each year in May, we conduct a telephone survey of a sample of Personal Estates customers and/or their liaison persons, as we have found this the best way to gain their feedback. This year, for the first time, we surveyed Trust customers leaving our service (primarily minors who turned 18) and Wills customers who revoked their Wills. The overall response rate was approximately 59%, indicating the results are representative of the views of all Public Trustee customers. Key findings of the survey were: On average, respondents saw the services provided by Public Trustee as important; Respondents indicated they were receiving a high level of various services (where 5.00 =

strongly agree - the mean average was 4.3). This indicates a very positive level of satisfaction;

For all service areas, most respondents indicated that they would recommend Public Trustee to others. Overall, 92% of customers surveyed indicated they would recommend Public Trustee to others (a 20% increase since the 2012 survey); and

Suggested improvements included timeliness of service, and improved response and communication.

The 2013 Customer Satisfaction Survey results provide a strong indication of continued improvement across all areas of service delivery. Full details of the survey results are available on Public Trustee’s website (Publications) at www.publictrustee.sa.gov.au Customer Service Standards In 2012 we embarked on a review of our customer service charter. In 2013 this resulted in the development and publishing of service standards which took into account the results of the annual customer satisfaction survey. We implemented internal procedures and provided training to ensure staff meet the new service standards. External promotional material was updated for customers via a refreshed ‘Our Services’ brochure and on the public website. The performance of staff against the new service standards is now discussed with all staff during the preparation of individual performance review and development plans. The TICK badge (shown right), that now appears on our publications and correspondence, embodies our commitment to the new standards.


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Frequently Asked Questions (FAQs) The range of ‘Frequently Asked Questions’ (FAQs) published on the Public Trustee website was reviewed, revised and updated. The FAQs provide customers with a range of questions and answers to concerns they may have, and informs them about topics. The format of all FAQs was refreshed, making them more accessible and readable. We also wrote a number of new FAQs, covering a range of issues that are often raised with us by customers. These were also posted on our website. Bulk Financial Statements In March 2013 the time taken to issue customer financial statements was significantly reduced. This was achieved through reforms to our internal processes which focused on shortening the time taken to finalise the statements. In addition, the time taken to print and distribute statements was cut by approximately five days. These improvements will be implemented for all future financial statement distributions. New Customer Investment Tool (CIT) Public Trustee’s Customer Investment Tool is a computer-based methodology used to undertake investment planning for our customers. During 2012–13, Public Trustee worked with an external provider to begin developing a new model that meets our specific needs. The aim is to deliver a professional, up-to-date system which incorporates the features of the current model and provides enhanced functionality. Responding to Customer Feedback During the year, Public Trustee implemented a new database and process for recording, monitoring and managing compliments and complaints. Throughout the reporting period, Public Trustee’s website and corporate brochures were updated with the aim of simplifying and clearly explaining to customers how to provide feedback. Public Trustee will continue to improve its complaint-handling process to ensure complaints are resolved in a timely manner. Table 1: Complaints Recorded 2012–13 2011–12

Complaints 82 81

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Preparing Wills and Powers of Attorney Documents The Wills Branch provides Will and Power of Attorney document preparation services to the community free of charge when Public Trustee is appointed as Executor or Attorney. Appointments for these services are available at head office at 211 Victoria Square Adelaide, at 15 regional areas and eight suburban locations. Table 2: Documents Prepared (including during home visits) 2012–13 2011–12 Wills (includes new and revised) 2 080 1 977 Enduring Powers of Attorney (includes new and revised) 766 578

Public Trustee also provides a very important home visitation service for the infirm and non-ambulant (those unable to walk or move about freely), giving them access to services that may otherwise be unavailable to them. Table 3: Documents Prepared During Home Visits (included above) 2012–13 2011–12 Number of home visits 187 266 Wills (includes new and revised) 110 140 Enduring Powers of Attorney (includes new and revised) 34 53

Deceased Estate Administration – Executor Services One of the significant functions of Public Trustee is to administer deceased estates and trusts. The majority of estates we administer result from a Will that has appointed Public Trustee as the executor. An executor is the person or trustee organisation chosen to carry out the terms of a Will and is responsible for the entire administration of the estate until the final distribution of the assets is made to the nominated beneficiaries. This administration can be complex and often very demanding, and thus requiring a good understanding of the legal, accounting and taxation requirements. Public Trustee acts independently in carrying out the instructions contained in the Will. Most importantly, we carry out the deceased person’s wishes with sympathetic concern for their family and beneficiaries. Our estate administration business also comes from intestate estates; that is, when a person dies without a Will. Where the next of kin are known, Public Trustee requires their consent to administer the estate, but in circumstances where the beneficiaries are not known, Public Trustee must assume the role of administrator. In this regard, we work closely with South Australia Police and the Coroner’s Office to help find next of kin or make arrangements to administer estates. Public Trustee also administers estates on behalf of executors who choose to renounce their role in favour of Public Trustee. Again the consent of the beneficiaries is obtained before we begin administering the estate. As well as receiving advice of the death of a person from family members, our staff also monitor public death notices to cross-reference with Wills held by Public Trustee. Contact is made with beneficiaries of those Public Trustee customers whose death is published. Further

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monitoring is undertaken through the records of the Registrar for Births, Death and Marriages. Table 4: Deceased Estate Administration 2012–13 2011–12 New cases 695 723 Completed estate matters 669 1 035 Estates currently under administration 1 201 1 175 Grants of probate received for the period 617 648 Informal estates administered 78 83 Deceased Estate Administration – Unclaimed Estates If we are unable to locate next of kin, the realised assets of the estate are held in an interest-bearing account for a statutory period of six years. After that time, the funds must be paid to the South Australian Department of Treasury and Finance. At any time, however, if beneficiaries identify themselves and are proved to be the entitled beneficiaries, these funds can be reclaimed from the South Australian Department of Treasury and Finance, and paid out. Table 5: Unclaimed Balances (finalised at 30 June, payment early next period) 2012–13 2011–12 Number of unclaimed balances paid to Treasury 16 6 Value of funds paid from unclaimed balances $598 474 $290 000 Deceased Estate Administration – Trust Services The Trust team in Public Trustee is responsible for the management of perpetual charitable trusts, scholarship trusts and the Community Foundation of South Australia. The team also manages court award trusts, trusts for minors and trusts under deed. The team actively educates minors and their families about how to make prudent financial and life decisions. The other major type of trust we administer is a life interest trust, where the nominated beneficiary (the life tenant) receives a benefit during their life or for a specified time, and the capital of the trust is preserved for the remainder beneficiaries. The life tenant may have the right to live in a property or may receive the income from the investment of trust funds. Other types of trust under administration include Perpetual Charitable Trusts, Scholarship Trusts, and the Community Foundation of South Australia. Table 6: Public Trustee Trust Activity Activity 2012–13 2011–12 New trusts 83 52 New Court-awarded trusts 36 64 New Life interest trusts 21 9 Trusts for children under the care of the Minister for Communities and Social Inclusion (on hand) 39 46

Trust matters finalised 134 254 Trusts on hand at 30 June 1 918 1 912

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Personal Estates Public Trustee provides financial administration services to approximately 4 060 customers, many of whom are vulnerable members of the community needing help with the management of their financial affairs. Public Trustee may be appointed by the Guardianship Board or the Courts to manage the financial affairs of a customer. Additionally, customers are referred to Public Trustee by health professionals, legal practitioners, mental health groups, social workers and others. The majority of our personal estate customers are subject to Administration Orders issued by the Guardianship Board. Public Trustee also acts for customers as: Their attorney, pursuant to an Enduring Power of Attorney appointment; A manager, appointed by the Courts under the Aged and Infirm Persons’ Property Act

19401; A trustee under the Public Trustee Act 1995; or A litigation guardian2 when appointed by the Court.

During 2012-13, Personal Estates branch staff worked with a range of stakeholders from both government and non-government organisations. We built on our working relationships with the Department of Communities and Social Inclusion, the Department of Health, the Department of Health and Ageing (Commonwealth), and the Department of Human Services (Commonwealth), as well as working with a number of non-government partners including Anglicare and UnitingCare Wesley. Personal contact with our customers is important to us and during the period, our staff visited 881 customers to provide face-to-face contact, advice and support. Table 7: Personal Estates Matters 2012–13 2011–12 Total number of personal estates under administration 4 010 3 886

Number of Next Friend/Litigation Guardian matters on hand 49 #

Number of new Guardianship Board orders 388 346 New court award customers 14 27 Total funds received from new court awards $7.4m $9.9m New Powers of Attorney customers 36 36 Number of home visits to Personal Estates branch customers 881 280**

Court-award funds under administration $311.2m $282.3m No-fee threshold $4 650 $4 450 % of customers under administration from whom no fees were collected 16.8% 17.24%

# not separately identified in 2011–12 **six months’ comparative data for 2011-12

1 Refer to Legal Section report on following page. 2 Litigation guardian – refer to Legal Section report on following page.

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The following initiatives were implemented during 2012-13: A business process review was undertaken in our new estates area to ensure new

Personal Estates customers promptly receive financial management services; A case management plan was developed for all new customers; Online access to Centrelink business information was provided so staff can manage

customer accounts and liaise quickly with Centrelink to improve response times; A range of regular training presentations was conducted by senior technical staff to

develop staff skills in complex case management; All policies and procedures that impact on customers who leave Public Trustee were

reviewed and refreshed, to ensure a smoother transition for customers in managing their own affairs; and

A new file transfer process was introduced to ensure that customer service levels are maintained if staff changes occur.

Public Trustee as a Regulator – Monitoring Administrators and Managers Public Trustee is required by the Guardianship and Administration Act 1993 to examine and report on the activities of private financial administrators appointed by the Guardianship Board (the Board) to manage the estates of individuals with mental incapacity. These administrators of protected estates are required to report annually to Public Trustee. We examine and report to the Board on these annual statements and may initiate an audit of a statement. We may also recommend to the Board that expenditure by the administrator be disallowed, if we are of the view that he or she did not act in good faith or with reasonable care in incurring the expenditure. Public Trustee conducts monthly information sessions for newly appointed private administrators, to help them fulfil their legislative financial reporting requirements. A new ‘Frequently Asked Questions‘ section has been added to the Public Trustee website, explaining the role of a Financial Examiner for Private Administrators. Public Trustee is also required to examine the financial accounts submitted by administrators who have been appointed by the Supreme Court to administer intestacies or estates where an Executor is unwilling or unable to complete an administration. We also monitor private managers appointed under the Aged and Infirm Persons’ Property Act 1940 pursuant to Supreme Court orders. We receive reports and accounts from estate managers and report to the court on their content. A regulated fee is charged for these services. Table 8: Private Administrators 2012–13 2011–12 Private administrators appointed under the Guardianship and Administration Act 1993 1 148 1 138

Private administrators appointed under the Aged and Infirm Persons’ Property Act 1940 136 98

Alternate executor administrations pursuant to a Court order 224 201

Legal Section Public Trustee’s legal section, comprising staff out-posted from the Crown Solicitor’s Office, focuses on the legal issues affecting customers. The section deals with issues arising from deceased estates either administered by Public Trustee or in respect of which Public Trustee

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has a regulatory role. In addition, advice is provided about transactional and corporate issues covering the broad range of Public Trustee’s functions, including risk management and customer service. Legal officers draft documents and provide advice in relation to non-litigious matters, provide support in relation to Public Trustee’s conveyancing matters, and liaise with members of the legal profession in private practice in relation to a range of issues. The legal officers conduct or supervise litigation in a range of South Australian courts and tribunals, as well as in the Federal Circuit Court. Table 9: Legal Section Matters 2012–13 2011–12 New specific files 194 161 Ongoing files from previous year 374 274 Ad hoc advice matters 150 140 An important role for Public Trustee is to act as Litigation Guardian when appointed by the Court in a particular matter. We then represent the interests of a minor or a person who has a disability and is consequently not able to manage their own affairs or make decisions about the proper conduct of legal proceedings. As litigation guardian in an action, Public Trustee (in consultation with its legal team) is required to make decisions on behalf of the minor or protected person, regarding the conduct, and perhaps ultimately the settlement, of the proceedings. Table 10: Litigation Guardian Appointments 2012–13 2011–12 New litigation guardian customers 12 8 Taxation Services Public Trustee’s Taxation Services Branch attends to the taxation affairs of our customers. Our specialised taxation services include: Preparing income tax returns for individuals, partnerships and trusts; Maintaining wage records and issuing PAYG payment summaries for carers employed by

Public Trustee customers; Paying WorkCover levies and superannuation contributions for the employees of our

customers; Preparing annual taxable income summaries for investor customers; Requesting taxation rulings and amendments; Investigating capital gains tax matters; and Consulting with Wills customers on the income tax and capital gains tax consequences of

proposed Wills. In addition, staff provide advice to beneficiaries, other executors and the general public on their taxation obligations in relation to amounts received from deceased estates, testamentary trusts, court award trusts and other trusts. During the year, staff participated in the review of superannuation arrangements for customers. Table 11: Annual Taxation Returns 2012–13 2011–12 Taxation returns completed 7 421 7 566

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Real Estate and Property Management Real estate is a significant asset in most estates. As at 30 June 2013, Public Trustee was responsible for more than 1 070 properties. Public Trustee undertakes regular inspections and maintenance for the properties for which it is responsible. Table 12: Properties Under Management 2012–13 2011–12 Trust administration properties 173 176 Estate administration properties 277 294 Personal estates properties 620 663 Total properties under management 1 070 1 133 Public Trustee engages real estate agents and licensed valuers who work together to achieve the best results for customers requiring real estate services. Table 13: Property Sales 2012–13 2011–12 Properties sold – deceased estates 128 136 Properties sold – trusts 9 * Properties sold – personal estates 56 39 Total sales value** $53 655 396 $51 812 407 Average sales price** $278 007 $296 071 * Figure not previously reported ** Public Trustee may be only a part-owner of some properties sold. These figures represent the gross & average sale figures for the properties (either wholly or partly owned).

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Marketing Our Services Media Marketing Campaign From May to September 2012, using digital, radio and print media, Public Trustee undertook a marketing campaign to promote the benefits of having a Will. The target demographic of the campaign was people aged 30–49, who may not have previously considered the need for a Will. The campaign focused on those reaching life stage milestones such as moving in with a partner, getting married, having a baby or becoming part of a blended family. The campaign's objectives included: Attracting new Will customers; Increasing the number of enquiries to Public Trustee about making Wills; Encouraging people to revise their Will when their situation has changed; and Building positive relationships with the community.

The results of the campaign were: The number of new Wills written in the period May to September 2012 increased by

35% compared to the same period in 2011; Will modifications grew by 154% in the same period; Will bookings continued to be strong after the cessation of the campaign; and The digital campaign material was viewed 8.3 million times, generating a Public

Trustee website exploration rate of 0.11%, nearly doubling the industry standard of 0.06%.

Marketing, Public Relations and Community Engagement Promotional and community events provided a range of opportunities to engage with the community, to increase awareness of our services and promote the need to have a current, valid and professionally prepared Will. Promotion of Public Trustee services to the wider community was a significant activity during this period. The Customer Relationship Team and Wills Branch communicated with a range of organisations to promote our services and to stress the importance of having a valid Will. These included local government organisations, funeral directors, offices of the SA Ambulance Service and SA Metropolitan Fire Service, Defence SA and the Public Service Association. In a major initiative, our promotional information about making a Will was included in Baby Bounty Bags given to all new mothers in metropolitan public hospitals. In May 2013, Public Trustee participated in the Courts Administration Authority’s Courts Open Day, presenting the opportunity to: Promote our brand, products and services to those attending; Engage with the public directly, increasing the approachability and accessibility of Public

Trustee; and Show Public Trustee in a positive light by reinforcing our commitment to helping the

community. We also attended the “Building a National Approach to Prevent Abuse of Older Australians" conference, which explored how organisations and individuals can improve their response to abuse, by helping create a nationwide agenda to combat elder abuse. It was an opportunity

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for Public Trustee to raise awareness of the role we play in protecting and preventing the financial abuse of some of South Australia’s most vulnerable and elderly citizens. The prevention of elder abuse was also the main topic at the Alliance for Prevention of Elder Abuse event – ‘Safeguard Your Rights - an expo to explore your rights as an older person’. This gave Public Trustee the opportunity to: Explain the valuable role we play in helping South Australians protect their finances; Encourage the audience to contact us to make a Will and Enduring Power of Attorney;

and Encourage the audience to contact us to gain information about protecting the elderly

through the Guardianship Board process. This expo was organised by the members of the Alliance for the Prevention of Elder Abuse (APEA) group including Public Trustee, South Australia Police, Aged Rights Advocacy Service, Office of the Prevention of Elderly Abuse and Office of the Public Advocate. As part of Law Week 2013, Public Trustee staff working with the Office of the Public Advocate and Guardianship Board delivered a series of information seminars to service providers in the Iron Triangle (Port Pirie, Port Augusta and Whyalla). During the year, Public Trustee also presented information sessions to government, community and carers groups including South Australia Police, the Tailem Bend Community, Carers SA, Super SA and UnitingCare Wesley, as well as at community centres around the Adelaide metropolitan area.

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Business Improvement Managing our business well is a primary objective of Public Trustee. During 2012–13, we undertook a range of initiatives aimed at business improvement, including: Building Business Sustainability Public Trustee undertook a range of projects that aimed to ensure our business remains sustainable. We reviewed our fees and charges, which included by comparing them with other state Public Trustees and private sector providers. Some of the recommendations of this review were adopted by the Government in the 2013–14 State Budget. Public Trustee also began a process of identifying those activities provided as a community service. The aim is to improve transparency in our funding model and be in line with the funding models that are applied to other Government Business Enterprises. Refresh of Public Trustee’s Core ICT Systems During the year, Public Trustee management assessed our current position, with a view to improving the core ICT system. Public Trustee worked with the Office of the Chief Information Officer and independent consultants to assess options for an upgrade of our two core systems – the customer relationship management system and the customer financial system. This assessment included consideration of the current ICT environment and the potential costs, risks and operational impact of a future upgrade. Work continues on the detailed business priorities and on the high-level planning required for the next stage of the project. Review of Key Controls and Upgrade of Control Self-Assessment System Public Trustee undertook a major project to develop document maps for key business processes. These process maps have been developed through a series of workshops with relevant staff and through a review of the procedure documents. The primary objective of this was to identify our key internal control objectives and activities, in order to update our Control Self-Assessment (CSA) system. As well as reviewing, redesigning and simplifying the key controls, we identified opportunities for business process improvement through the application of lean thinking prior to any future system upgrades.

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Our People Organisational Structure During the reporting period, there were minor changes to the organisational structure to improve the effectiveness of the organisation. These included moving the marketing function and project resources to Corporate Services from 1 July 2013.

(As at 30 June 2013)

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Executive Team Debra Contala BA (Acc) FCPA Public Trustee The Public Trustee is a Statutory Officer within the AGD. Debra Contala commenced as the Public Trustee in November 2010. Ms Contala had previously worked in the AGD for 10 years in a variety of finance and corporate roles, and was most recently the Executive Director of Finance and Business Services Division. Ms Contala has extensive experience in State Government, including in the Department of Treasury and Finance and Arts SA. She has strong business credentials and expertise in a wide range of areas within Government, including finance, project management, procurement and human resources. Ms Contala has also been a member of a range of government boards including the Superannuation Board and the Board of the SA Fire and Emergency Services Commission. She is a member of the Divisional Council of the Institute of Public Administration (SA). Frankie Anderson BSocSc General Manager, Customer Services Frankie Anderson joined Public Trustee in August 2011 as General Manager, Customer Services. Ms Anderson had previously held the role of Director, Human Resources in the AGD. Ms Anderson has brought experience in customer service to Public Trustee. Her varied professional background has given her the opportunity to work closely with many areas of the community, including vulnerable people. Tony Brumfield BEc(Acc) General Manager, Business and Client Financial Services Tony Brumfield commenced with Public Trustee in March 2012. He is an accountant with a Bachelor of Economics (Accounting) from Flinders University and a Graduate Certificate of Management from the University of South Australia. Mr Brumfield has experience working in a range of executive positions in the South Australian Government and has a strong background in managing corporate and finance functions. He has held the roles of Director, Financial Services at the Department of Treasury and Finance, Director, Finance and Asset Management in the Department of Primary Industries and Resources, and General Manager, Corporate Services at Defence SA. Nick Wiseman, BEc, MPA, CIMA Manager, Investment Services (non-Executive) Nick Wiseman joined Public Trustee in 2006. As Manager, Investment Services, he is responsible for overseeing the development, implementation and monitoring of investment strategies for the funds Public Trustee manages. Before joining Public Trustee, Mr Wiseman worked at Elders and JP Morgan. He has more than 16 years’ experience in financial markets, ranging from money market dealing to institutional funds management.

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Executive Performance Appraisal The Public Trustee and other senior officers at executive level are subject to an employment contract with the Chief Executive, AGD. Each employment contract specifies performance criteria. Executives are subject to an annual appraisal against the performance criteria contained in their contract and the specification of the position. Executive Remuneration The executive classification structure is determined by the Commissioner for Public Sector Employment and sets the parameters for executive remuneration within the Government of South Australia. The Chief Executive, AGD, is responsible for determining the appropriate remuneration within the classification structure (refer also to Human Resources statistics later in this report). Work Health and Safety (WHS) Public Trustee is committed to ensuring that employees and contractors are safe from injury and risks to health and welfare while at work. Public Trustee is also committed to a health and safety culture throughout the office and aims to be a model employer in its handling of health, safety and welfare. While Public Trustee does not have its own WHS Committee, it is represented on the AGD WHS Committee. There are consultative arrangements within Public Trustee to address any relevant issues. Health, safety and wellbeing initiatives for the year included: Influenza and H1N1 vaccinations were offered to all staff; WHS representatives, first aid officers and fire wardens attended training sessions; A number of staff attended a forum on the new Work Health and Safety Act 2012; Training was conducted in WHS for managers; Workstations were assessed for new and a number of current employees; A number of staff attended a defensive driving course; and Eight teams participated in the Global Corporate Challenge, an international initiative

aimed at health and wellbeing in the workplace. Public Trustee had no critical or notifiable incidents during 2012–13. Supporting People with a Disability As part of the Government’s Promoting Independence strategy, Public Trustee has a number of processes to ensure equity for people with disabilities. These include a strong commitment to a workplace culture that fosters a positive environment, free from discriminatory behaviours. Public Trustee continues to work collaboratively with Disability Works Australia and other advocates to support people in the workforce. In 2012–13, Public Trustee employed three people with a disability from Disability Works Australia and will continue in this positive direction. All new staff completed Online Disability Awareness Training as part of their induction to Public Trustee in 2012–13.

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Equal Opportunity and Fairness Through induction and ongoing training, Public Trustee promotes compliance with the AGD Workplace Conduct Policy and the South Australian Public Sector Code of Ethics. A Workplace Conduct Contact Officer is available to assist and advise staff as needed. Public Trustee conducts refresher training in the Code of Ethics for all staff every three years. Whistleblowers Protection Act 1993 Under Section 7 of the Public Sector Act 2009, ‘Each public sector agency must ensure that a public sector employee (with qualifications determined by the Commissioner) is designated as a responsible officer for the agency for the purposes of the Whistleblowers Protection Act 1993’. Public Trustee has access, through the AGD, to: A number of responsible officers, whose details are available to staff via the intranet; Whistleblowers’ Protection Policy; and Whistleblowers’ Protection Guidelines and Procedures.

Staff Council The Staff Council provides Public Trustee staff with a forum that allows them to exchange and share ideas and issues with senior management, including the Public Trustee. The Council consists of elected staff representatives across all classification levels from each of the different customer service areas, together with a human resources representative. It meets bi-monthly to discuss ideas and concerns from staff members and to consider and make recommendations to the management of Public Trustee. Council activities include a monthly staff casual day, with donations collected for selected South Australian charities. Staff Development and Training Public Trustee continued its commitment to training and development in 2012–13. Human Resources provided a range of professional development activities for all staff and continued to promote a strong performance culture. Performance management discussions were closely linked to the identification of training needs. Training needs were generally addressed through attendance at training activities delivered by external providers and in-house trainers. In 2012–13, 181 Public Trustee staff undertook training and development in: Certificate IV in Personal Trust Administration Records Management & File Records Management Taxation and Capital Gains Tax for Estate Management Managing Vexatious Complainants Managing Conflict Managing Staff Performance Essential Business Writing Writing Ministerial Correspondence Information Security Awareness Microsoft Excel WHS for Managers Occupational Health Safety and Welfare ongoing training for OHS officers

Public Trustee continues to support staff undertaking undergraduate and postgraduate study, through the provision of study leave and financial assistance. In 2012–13, seven employees received assistance to pursue external studies. Study leave and fee assistance entitlements are available to staff at all levels.

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Human Resources Statistics 2012–13 Agency Public Trustee Persons 184 FTE's 173.94

Gender % Persons % FTE Male 39.1 40.4

Female 60.9 59.6 Number of Persons Separated from the agency during the last 12 months 23 Number of Persons Recruited to the agency during the 2012-13 financial year 31 Number of Persons Recruited to the agency during the 2012-13 financial year AND who were active/paid at June 2013 22 Number of Persons on Leave without Pay at 30 June 2013 3

NUMBER OF EMPLOYEES BY SALARY BRACKET

Salary Bracket Male Female Total $0 - $53 199 11 37 48

$53 200 - $67 699 25 48 73 $67 700 - $86 599 29 20 49

$86 600 - $109 299 6 5 11 $109 300+ 1 2 3

Total 72 112 184 STATUS OF EMPLOYEES IN CURRENT POSITION

FTE’s

Gender Ongoing Short-term

contract Long-term contract Casual Total

Male 65.9 2 2 0.3 70.2 Female 90.6 10 3 0.1 103.7

Total 156.5 12 5 0.4 173.9 STATUS OF EMPLOYEES IN CURRENT POSITION

Persons

Gender Ongoing Short-term

contract Long-term contract Casual Total

Male 67 2 2 1 72 Female 97 11 3 1 112

Total 164 13 5 2 184

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NUMBER OF EXECUTIVES BY STATUS IN CURRENT POSITION, GENDER AND CLASSIFICATION

Cla

ssifi

catio

n

Ong

oing

Te

rm

Tenu

red

Term

U

nten

ured

O

ther

(In

c. C

asua

l) Total

Mal

e

Fem

ale

Mal

e

Fem

ale

Mal

e

Fem

ale

Mal

e

Fem

ale

Mal

e

% o

f tot

al

Exec

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Fem

ale

% o

f tot

al

Exec

s

Tota

l

SAES1 0 0 0 0 1 1 0 0 1 33 1 33 2 SAES2 0 0 0 0 0 1 0 0 0 0 1 33 1

Total 0 0 0 0 1 2 0 0 1 33 2 66 3 NUMBER OF ABORIGINAL AND/OR TORRES STRAIT ISLANDER EMPLOYEES

Salary Bracket Aboriginal Employees

Total employees

% Aboriginal employees

$0 - $53 199 1 48 2.1 $53 200 - $67 699 1 73 1.4 $67 700 - $86 599 0 49 0

$86 600 - $109 299 0 11 0 $109 300+ 0 3 0

Total 2 184 1.1 CULTURAL AND LINGUISTIC DIVERSITY

Name Male Female Total % of Agency Number of Employees born

overseas 5 8 13 7.1 Number of Employees who

speak language(s) other than English at home 1 1 2 1.1

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NUMBER OF EMPLOYEES BY AGE BRACKET BY GENDER Age Bracket Male Female Total % of Total

15 – 19 0 0 0 0 20 – 24 1 3 4 2.2 25 – 29 3 11 14 7.6 30 – 34 9 11 20 10.9 35 – 39 8 12 20 10.9 40 – 44 10 12 22 11.9 45 – 49 8 15 23 12.5 50 – 54 10 16 26 14.1 55 – 59 11 16 27 14.7 60 – 64 10 13 23 12.5

65+ 2 3 5 2.7 Total 72 112 184 100

TOTAL NUMBER OF EMPLOYEES WITH DISABILITIES (ACCORDING TO COMMONWEALTH DDA DEFINITION)

Male Female Total % of Agency 3 6 9 4.9

TYPES OF DISABILITY (WHERE SPECIFIED)

Disability Male Female Total % of Agency Disability Requiring

Workplace Adaptation 2 1 3 1.6 Physical 2 2 4 2.2

Intellectual 1 0 1 0.5 Sensory 1 1 2 1.1

Psychological/Psychiatric 0 0 0 0 NUMBER OF EMPLOYEES USING VOLUNTARY FLEXIBLE WORKING ARRANGEMENTS BY GENDER

Leave Type Male Female Total Purchased Leave 1 0 1

Flexitime 70 109 179 Compressed Weeks 2 1 3

Part-time 5 25 30 Job Share 1 2 3

Working from Home 0 0 0 LEAVE MANAGEMENT - AVERAGE DAYS LEAVE PER FULL-TIME EQUIVALENT EMPLOYEE

Leave Type 2010–11 2011–12 2012–13 Sick Leave 10.7 10.5 9.1

Family Carer’s Leave 1.1 1.1 0.9 Miscellaneous Special Leave 1.2 0.5 0.5

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DOCUMENTED REVIEW OF INDIVIDUAL PERFORMANCE MANAGEMENT

Documented Review of Individual Performance

Management Total % Reviewed within the

last 12 months 90 % review older than

12 months 2 % Not reviewed 8

LEADERSHIP AND MANAGEMENT TRAINING EXPENDITURE

Training and Development Total Cost

% of Total Salary

Expenditure Total training and development

expenditure $203 000 1.4 Total Leadership and

Management Development $15 000 0.1 ACCREDITED TRAINING PACKAGES BY CLASSIFICATION

Classification Number of Accredited

Training Packages ASO2 3 ASO3 3 ASO4 1 ASO6 1

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Organisational Support Corporate Services The Corporate Services Branch is responsible for the implementation of policies and procedures relating to the management of corporate assets and resources, financial and management accounting, human resources, procurement, accommodation and facilities, records and fleet management, telephone network services, inspecting and insuring estate properties and general administrative services. Corporate Finance The Corporate Finance Branch is responsible for financial and management accounting, and the implementation of policies and procedures relating to the management of corporate assets. The Branch provides Public Trustee with information to assist in corporate resource allocation. Consultancies Public Trustee acquired the following consultancy advice in 2012–13: Table 14: Consultants

Consultant Purpose of consultancy Number Total

Dymond Foulds & Vaughan Self-managed super funds assistance 1 $57 000

PricewaterhouseCoopers Customer Relationship Management system feasibility study

1 $90 000

PricewaterhouseCoopers Customer Financial systems feasibility study 1 $86 000

TOTAL 3 $233 000 Employees’ Overseas Travel No overseas travel was undertaken during 2012–13. Government Contracts Exceeding $4 million No contracts exceeding $4 million were procured during the year. Environmental Impact and Energy Efficiency Public Trustee is a tenant of 211 Victoria Square. The building owner has provided a base building rating of 4.5 stars. This is in line with the Greening of Government Operations (GoGO) Framework.

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Public Sector Fraud Public Trustee builds control points and mechanisms into its policies and procedures to mitigate the risk of fraud. A review of key controls was completed during the year with assistance from Public Trustee’s internal auditor. The review enabled Public Trustee to identify any control gaps that posed immediate risks. Policies and procedures were updated to include any additional controls necessary to mitigate or reduce risk. These additional controls were embedded into the Control Self Assessment process. No incidents of fraud were reported during the reporting period Corporate Account Payment Performance ‘Treasurer’s Instruction 11’ requires all undisputed accounts to be paid within 30 days of the date of the invoice or claim, unless there is a discount or a written agreement between the agency and the creditor. As indicated in the table below, Public Trustee paid 97% of all invoices by the due date. Table 15: Corporate Account Payment Performance

Number of Corporate Accounts

Paid

% of Corporate Accounts Paid by Number

Value in $A of Corporate

Accounts Paid

% of Corporate Accounts

Paid by Value

Paid by Due Date 1 983 97.5% $8 872 387 96.8% Paid Late and Paid 30 Days or Less From Due Date 45 2.2% $292 096 3.2%

Paid Late and Paid More Than 30 Days From Due Date 5 0.3% 6 101 0.1%

Freedom of Information Public Trustee is an agency within the provisions of the Freedom of Information Act 1991 (the Act). The following details are provided as part of the information statement required by the Act. The role and functions of Public Trustee are set out in this Annual Report. Under Schedule 2 of the Act, Public Trustee is exempt from the provisions of the Act with respect to functions exercised as executor, administrator or trustee. Accordingly, only corporate operations of the office are subject to the provisions of the Act. There is no charge for requests, where information can be obtained by producing existing reports. For more complex requests, Public Trustee levies such fees and charges as prescribed in the current regulations under the Act. Public Trustee received 10 requests for information during the 2012–13 financial year. All applications under the Act in relation to Public Trustee's corporate operations should be made in writing to:

The Accredited FOI Officer Attorney-General’s Department GPO Box 464 ADELAIDE SA 5001

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Information Privacy Principles The State Government of South Australia is committed to protecting the privacy of a customers’ personal information and, in doing so, Public Trustee must comply with a set of Information Privacy Principles (IPPs). These are issued as a Government administrative instruction and regulate the way personal information can be collected, used, stored and disclosed. The IPPs also provide a right for an individual to access and amend their personal information. For access to documents, including amendments of documents relating to personal affairs, please contact the Office of the Public Trustee during normal office hours (8.45 am to 5.00 pm) at 211 Victoria Square, Adelaide. Access to these documents is coordinated by the General Manager, Business and Client Financial Services. Enquiries can be made using the Public Trustee email ([email protected] ), by phoning 08 8226 9200 or via our website www.publictrustee.sa.gov.au (click on the ‘Contact Details’ section in the top right-hand menu bar). Information and Communications Technology (ICT) The Information and Communications Technology (ICT) Services Branch provides information, communications and technology management services to all areas of Public Trustee. This includes managing the ICT infrastructure, providing helpdesk, application and desktop support services, implementing information security strategies and providing database and software development services. Public Trustee has a rolling, planned four-year program to refresh ICT assets. In 2012-13 the ICT server infrastructure was refreshed and disaster recovery infrastructure was designed and installed. The latter will be fully tested and operational in early 2013–14. During the reporting period, we: Began preparation and planning for the roll-out of Microsoft Office 2010 to all staff; Began analysing options to upgrade or replace Public Trustee’s core business

information system; Developed and started operating an Information Security Management System (ISMS) as

required by SA Government policy; Created an ISMS information asset register, a risk register, and a review of incidents and

actions register, policies and procedures; Provided information security awareness training for all staff; Completed a range of projects to improve business operations, including upgrading the

Unit Registry System, the HiTrust software, the Client Funds Accounting system – HiPortfolio, and the MYOB systems used by the Taxation service; and

Replaced hardware as part of a cyclical program to ensure personal computers and multi-function printer devices remain reliable and functional.

Public Trustee’s ICT Committee worked to advise and make recommendations to the Public Trustee on the priorities, planning and management of ICT, in the context of the Public Trustee Strategic Plan. The Committee oversees the development and implementation of a long-term sustainment plan to ensure stable and reliable ICT infrastructure.

mailto:[email protected]


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Client Financial Services The Client Financial Services Branch provides administration, accounting and asset management services for customers. The Funds Administration Section is responsible for performance, accounting, reporting and taxation outcomes that relate to the management of the Standard Investment Strategies and Common Funds administered by Public Trustee. Public Trustee managed customer funds valued at $866.5 m as at 30 June 2013 The Client Accounting Section receives funds for and makes payments, including critical regular payments for food, accommodation and other living expenses, to customers who may be unable to manage their own financial affairs. Last year the section made 348 000 payments worth $264 million. This section also receipted funds, such as customer Centrelink benefits, to the value of $245 million for the financial year. Public Trustee also provides asset management services for customers with assets under administration (in addition to managed funds), totalling $382 million. Table 16: Client Financial Services Activity

Key Statistics 2012–13 2011–12 Funds under administration $866.5 m $794.3 m New funds invested for the reporting period $34.5 m $36.9 m

Funds redeemed for the reporting period $38.0 m $36.0 m Total Common Fund trades for the reporting period $1 381.5 m $1 543.2 m

Distributions to customers $16.4 m $19.9 m Total number of payments made 347 700 349 300 Total value of payments made $264.1 m $262.3 m Value of payments for food, clothing, accommodation and other living expenses $29.6 m $30.7 m

Value of payments for personal living expenses $6.3 m $6.0 m

Total customer funds receipted value of pensions included

$245.1 m $57.8 m

$241.0 m $55.3 m

Total value of real estate properties held $291.6 m $307.2 m Total value of managed customer assets $1 239.9m $1 169.8 m Number of payments for food, clothing, accommodation and other living expenses 150 150 155 400

Number of payments for personal living expenses 73 689 69 287

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Investment Services Public Trustee is responsible for the management of more than $866.5 million of customers’ funds and $382 million of other assets. The bulk of the investments are managed through five Standard Investment Strategies (refer to the Corporate & Client Financial Information section of this report for details). Public Trustee manages investment of the funds through a combination of in-house expertise and the appointment of carefully selected external investment fund managers. Regular expert advice is also received from our external investment advisor. Key investment highlights include: Excellent investment returns; Out-performance from benchmarks for all strategies over 1, 3 and 5 years; A strong stable of complementary investment managers; and Well-diversified investment strategies, with funds spread over all investment classes:

cash, fixed interest, property and shares (international and Australian).

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Financial Performance Corporate Financial Overview 2012–13 Public Trustee achieved an operating surplus before tax of $1.895 million. The operating surplus after income tax equivalents was $1.327 million compared to a budgeted operating loss of $400 000. Revenue from core business activities was lower than anticipated but this was offset by favourable market returns on corporate investments and savings in expenditure. Financial Outcomes The following tables and figures provide summaries of the Statement of Comprehensive Income, Statement of Financial Position and Statement of Cash flows, showing comparisons between either ‘actual to budget’ and/or ‘actual to prior year’ performance. Detailed financial reports covering Public Trustee Certification of the Financial Statements, the Independent Auditor-General’s report, and Corporate Financial Statements are presented in the Corporate and Customer Financial Information section of this report.

Summary of Statement of Comprehensive Income Table 17: Operating activities

Actual Budget Actual 2012–13 2012–13 2011–12 $000s $000s $000s Revenue from Ordinary Activities 21 843 21 483 21 419 Expenses from Ordinary Activities and Income Tax Equivalents 20 516 21 883 20 914 Net Operating Surplus from Operating Activities after Income Tax Equivalents 1 327 (400) 505 Total changes in equity (before dividend payment) 1 327 (400) 505 Total changes in equity (after dividend payment) 1 105 (400) (179)

The revenue return from core business services was $1 million below budget. This was primarily due to a lower than expected number of deceased estates being administered. Returns on investments were $1.4 million higher than budgeted. Savings in expenses totalled $1.9 million against the ‘expenditure before tax’ budget. Factors contributing to this result include:

A decrease in salaries and associated on-costs due to the change in how long service leave is calculated;

A conscious effort to exercise restraint with expenditure during 2012–13, given that our core business revenue had decreased; and

Savings in depreciation due to a review of capital expenditure requirements and timing of expenditure.

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Table 18: Summary Statement of Cash Flows

Actual Actual 2012–13 2011–12

$000s $000s Operating Activities Receipts 22 437 24 544 Payments (20 619) (22 064) Net Cash from Operating Activities 1 818 2 480 Investing Activities Receipts 2 000 - Payments (672) (693) Net Cash used in Investing Activities 1 328 (693) Financing Activities Receipts - - Payments - 684 Net Cash used in Financing Activities - 684 Net increase in Cash Held 3 146 1 103 Cash at beginning of reporting period 8 741 7 638 Cash at end of reporting period 11 887 8 741

The major changes in the statement of cash flow are due to: Movement of financial assets to cash equivalents; and Increase in payables and provisions compared to the previous year.

Table 19: Comparison of Total Assets to Total Liabilities 2012–13

As highlighted in the table above, the value of Public Trustee assets has increased over the last year as a consequence of the unrealised gains on financial assets.

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The following table highlights the key performance indicators for 2012–13: Table 20: Summary of Key Performance Indicators

Actual Budget Actual 2012–13 2012–13 2011–12

Profit Before Tax ($000's) $1 895 000 -$400 000 $722 000 Profit Margin Ratio 8.67% -1.86% 3.37% Return on Assets 5.61% -1.26% 2.27% Current Ratio 3.3 2.4 4.1 Capital Adequacy Ratio 2.39% 2.00% 1.98% Cost-to-Revenue Ratio 91.33% 101.86% 96.63% Dividend Payout Ratio 16.76% 0.00% 135.51%

Return on assets is a measure of profit before tax in relation to the gross assets invested in the business, while the cost-to-revenue ratio is a measure of the cost of sales. The cost-to-revenue ratio has decreased this year due to the concerted effort to reduce expenditure and the increase in unrealised gains on financial investments. The capital adequacy ratio defines an appropriate level of funding to meet working capital, as well as the long-term capital expenditure requirements of the office. A capital adequacy ratio of 2% has been agreed as appropriate by the Department of Treasury and Finance. Public Trustee pays a dividend in accordance with section 48 of the Public Trustee Act 1995. The dividend that arises from the 2012–13 operating result is paid following finalisation of the audited financial statements, in 2013–14.

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Customer Investment Performance Investment Overview For the year ended 30 June 2013, Public Trustee’s investment strategies have performed soundly, with the growth-oriented strategies outperforming our more conservative fund strategies. Each of our investment strategies outperformed their respective benchmarks, with returns ranging from between 3.95% for cash to 24.32% for the equities strategy (after fees). The investment returns for three and five years have also exceeded benchmark, demonstrating that Public Trustee’s long-term performance is strong and stable. Public Trustee emphasises that it is the long-term returns which are the best indicator of performance and that a realistic approach to investment accepts short-term market fluctuations. Table 21: Five-year Investment returns

2012–13 Performance

Last 3 months

Last 12 months annualised

3 years annualised

5 years annualised

Cash 0.90% 3.95% 4.83% 4.92% benchmark 0.50% 2.25% 3.32% 3.46% variance 0.40% 1.70% 1.51% 1.46%

Capital Stable 0.27% 8.06% 6.77% 5.52% benchmark 0.17% 7.00% 6.10% 4.89% variance 0.10% 1.06% 0.67% 0.63%

Balanced 0.71% 12.97% 8.75% 5.92% benchmark 0.49% 11.88% 8.10% 4.85% variance 0.22% 1.09% 0.65% 1.07%

Growth 1.37% 17.33% 9.94% 5.70% benchmark 1.07% 16.39% 8.95% 4.07% variance 0.30% 0.94% 0.99% 1.63%

Equities 1.88% 24.32% 10.80% 4.78% benchmark 1.53% 23.65% 9.42% 2.71% variance 0.35% 0.67% 1.38% 2.07%

Equities were the best-performing asset class this financial year. International equities and other growth assets (Australian shares and listed property) performed well, achieving returns in excess of 20%. Returns from fixed interest and cash were more subdued. In Australia, the Reserve Bank of Australia cut official interest rates from 3.5% to 2.75%, citing below-trend growth and a cooling of the resources boom. The Australian dollar depreciated against most major currencies other than the Japanese Yen. Public Trustee continues to explore opportunities to add value for its customers. This financial year we initiated an investment in global-listed infrastructure, which has performed well. Our preference for high-quality investments and reliable income streams has benefitted customers. As always, we continue to monitor markets for new developments and put in place strategies which aim to mitigate risks. Public Trustee takes a highly active role in managing customer funds. We regularly engage with our fund managers, consultants and industry professionals to ensure customer portfolios are managed prudently.

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Public Trustee’s investment funds provide income, growth and security for customers, through diversification across asset sectors and in accordance with our obligations under the Public Trustee Act 1995 and the Trustee Act 1936. A disciplined investment process continues to emphasise value, quality and effective risk management. It is a philosophy that comes from our long investment experience in understanding the financial needs of our customers and the opportunities and risks of financial markets. Details of the 2012–13 Asset Allocation, Manager of Funds Statement, and the Peer Group Comparisons follow. The Common Funds Statutory Information of Indirect Cost Ratios is contained in Appendix 1. The Public Trustee certification of the Financial Statements, the independent Auditor-General’s report of the financial statements, the Statement of Trusts being administered as at 30 June 2013, and the Common Funds Financial report are contained in the Corporate & Financial Information section of this report. The fees and the Classes of Investment in which the Common Funds may invest are contained in Appendix 1. 2012–13 Asset Allocation Table 22: 2012–13 Asset Allocation Capital Stable Standard Investment Strategy Common Fund Allocation (%) 2013 Allocation (%) 2012

Neutral Period End $m Neutral Period End $m

Australian Shares 15.0% 14.4% $9.17 15.0% 13.0% $8.23 Overseas Shares 5.0% 6.1% $3.88 5.0% 4.9% $3.07 Listed Property Securities 5.0% 5.9% $3.78 5.0% 5.3% $3.37 Long-term Fixed Interest 15.0% 15.0% $9.58 15.0% 15.6% $9.86 Short-term Fixed Interest 30.0% 29.7% $18.99 30.0% 30.9% $19.50 Overseas Fixed Interest 10.0% 9.3% $5.97 10.0% 9.8% $6.19 Cash 20.0% 19.6% $12.55 20.0% 20.5% $12.91

TOTAL 100% 100% $63.92 100.0% 100.0% $63.12 Balanced Standard Investment Strategy Common Fund Allocation (%) 2013 Allocation (%) 2012 Neutral Period End $m Neutral Period End $m

Australian Shares 25.0% 23.3% $48.80 25.0% 22.1% $41.46 Overseas Shares 15.0% 17.6% $37.02 15.0% 14.9% $27.84 Listed Property Securities 10.0% 11.5% $24.10 10.0% 10.9% $20.36 Long-term Fixed Interest 25.0% 24.2% $50.80 25.0% 26.5% $49.64 Short-term Fixed Interest 10.0% 9.6% $20.14 10.0% 10.5% $19.65 Overseas Fixed Interest 10.0% 9.1% $19.01 10.0% 10.0% $18.71 Cash 5.0% 4.8% $10.00 5.0% 5.2% $9.76 TOTAL 100.0% 100.0% $209.87 100.0% 100.0% $187.42

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Growth Standard Investment Strategy Common Fund Allocation (%) 2013 Allocation (%) 2012 Neutral Period End $m Neutral Period End $m

Australian Shares 35.0% 31.9% $63.56 35.0% 31.6% $57.12 Overseas Shares 25.0% 28.8% $57.51 25.0% 25.3% $45.62 Listed Property Securities 10.0% 11.3% $22.47 10.0% 11.1% $20.02 Long-term Fixed Interest 15.0% 14.2% $28.41 15.0% 16.2% $29.30 Short-term Fixed Interest 5.0% 4.7% $9.39 5.0% 5.4% $9.66 Overseas Fixed Interest 5.0% 4.4% $8.86 5.0% 5.1% $9.20 Cash 5.0% 4.7% $9.31 5.0% 5.3% $9.60 TOTAL 100.0% 100.0% $199.51 100.0% 100.0% $180.51

Equities Standard Investment Strategy Common Fund Allocation (%) 2013 Allocation (%) 2012

Neutral Period End $m Neutral Period

End $m

Australian Shares 60.0% 54.2% $42.20 60.0% 57.3% $36.11 Overseas Shares 40.0% 45.8% $35.63 40.0% 42.7% $26.92 TOTAL 100.0% 100.0% $77.83 100.0% 100.0% $63.04

Manager of Funds During 2012–13, Public Trustee continued its policy of engaging external fund managers for all funds except cash and Australian fixed interest. Investment assessment of external fund managers requires ongoing monitoring and performance review. This process provides Public Trustee with access to expert advice, without sacrificing control over the style and balance of the common funds. Peer Group Comparisons - Comparative returns to 30 June 2013 (after fees) Table 23: Peer Group comparisons 1 year % 3 year % 5 year %

Public

Trustee Peer

Group Public

Trustee Peer

Group Public

Trustee Peer

Group Cash 3.95 2.90 4.83 3.80 4.92 4.00 Capital Stable 8.06 9.15 6.77 6.65 5.52 5.10 Balanced 12.97 13.20 8.75 7.65 5.92 4.50 Growth 17.33 17.00 9.94 8.25 5.70 3.95 Equities 24.32 19.95 10.80 8.60 4.78 3.20 * Note, the peer group returns are based on a survey of multi-sector unit trusts, which have similar asset allocations to Public Trustee strategies

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Public Trustee 2012–13 Corporate and Client Financial Information Certification PUBLIC TRUSTEE 2012–13 FINANCIAL STATEMENTS



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Independent Audit Report

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THIS PAGE IS BLANK

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Public Trustee Corporate Financial Statements Statement of Comprehensive Income Note 2013 2012for the year ended 30 June 2013 $'000 $'000

Income

Fees and charges 4(a) 19 220 19 881Interest 4(b) 987 1 171Gain from the disposal of financial assets 1 - Unrealised gains on financial assets 1 235 1 Other income 4(c) 400 366

Total income 21 843 21 419

Expenses

Employee benefits 5(a), 5(b), 5(c), 5(d) 13 555 13 990Supplies and services 5(e) 5 669 5 879Loss from the disposal of fixed assets 4 - Depreciation and amortisation 720 828

Total expenses 19 948 20 697

Profit before income tax equivalents 1 895 722

Income tax equivalent 2(c) 568 217

1 327 505

1 327 505

The above statement should be read in conjunction with the accompanying notes

Profit after income tax equivalents

Total comprehensive result

The profit after income tax equivalents and total comprehensive result are attributable to the SA Government as owner

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Statement of Financial Position Note 2013 2012As at 30 June 2013 $'000 $'000

Assets:

Current assets

Cash and cash equivalents 17 11 887 8 741Receivables 6 853 1 347Financial assets 7, 8 - 1 998

Total current assets 12 740 12 086

Non-current assets

Financial assets 7, 8 15 929 14 692Plant and equipment 9 4 842 5 164Intangible assets 10 265 17

Total non-current assets 21 036 19 873

Total assets 33 776 31 959

Liabilities:

Current liabilities

Payables 11 2 128 1 435Lease Incentive 268 268 Employee benefits 12 1 188 1 233Provisions 13 246 -

Total current liabilities 3 830 2 936

Non-current liabilities

Payables 11 405 404Lease Incentive 1 584 1 851Employee benefits 12 3 718 3 634

Total non-current liabilities 5 707 5 889

Total liabilities 9 537 8 825

Net assets 24 239 23 134

Equity:

Reserves 15 - 285Retained earnings 24 239 22 849

Total equity 24 239 23 134

Contingent assets and liabilities 14

Unrecognised contractual commitments 18


Total equity is attributable to the SA Government as owner

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Statement of Changes in Equity Note

Reserves Retained Earnings

Total

for the year ended 30 June 2013 $'000 $'000 $'000

Balance as at 30 June 2011 285 23 028 23 313

Profit/(Loss) after income tax equivalent - 505 505Total comprehensive result for 2011/12 - 505 505

Transactions with State Government as ownerDividend provided for 13 - ( 684) ( 684)

- ( 179) ( 179)

Balance as at 30 June 2012 285 22 849 23 134

Transfer reserve to retained earnings 15 ( 285) 285 - Profit/(Loss) after income tax equivalent - 1 327 1 327Total comprehensive result for 2012/13 - 1 327 1 327

Transactions with State Government as ownerDividend provided for 13 - ( 222) ( 222)

- 1 105 1 105

Balance as at 30 June 2013 - 24 239 24 239


All changes in equity are attributable to the SA Government as owner

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Statement of Cash Flows Note 2013 2012for the year ended 30 June 2013 Inflows Inflows

(Outflows) (Outflows)$'000 $'000

Cash flows from operating activities:

Cash inflowsFees and charges 21 052 21 861Sundry income 98 169Interest 1 030 1 124Distributions 257 1 390

Cash generated from operations 22 437 24 544Cash outflowsEmployee benefits (13 518) (12 989)Supplies and services (5 809) (6 629)Tax equivalents - (1 041)GST remitted to ATO (1 292) (1 405)

Cash used in operations (20 619) (22 064)

Net cash provided by operating activities 16 1 818 2 480

Cash flows from investing activites:

Cash inflowsProceeds from sales/maturities of financial assets 2 000 -

Cash generated from investing activities 2 000 - Cash outflowsFinancial assets ( 2) ( 504)Purchase of plant and equipment ( 413) ( 189)Purchase of intangibles ( 257) -

Cash used in investing activities ( 672) ( 693)

Net cash used in investing activities 1 328 ( 693)

Cash flows from financing activities:

Cash outflowsDividend distribution to State Government - ( 684)

Net cash used in financing activities - ( 684)

Net increase/(decrease) in cash and cash equivalents 3 146 1 103

Cash and cash equivalents at 1 July 8 741 7 638

Cash and cash equivalents at 30 June 17 11 887 8 741


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Public Trustee NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 1 Objectives of Public Trustee

The office of the Public Trustee was established in 1881 and is constituted under the provisions of the Public Trustee Act 1995. The Public Trustee is a statutory officer pursuant to the Public Trustee Act 1995. Public Trustee is a body corporate with the powers of a natural person.

The role of the Public Trustee is to provide all South Australians with access to will making services, powers of attorney preparation and deceased estate and trust administration. Public Trustee also has a role in managing the financial affairs of those people in the community who lack the capacity to manage their own affairs as determined by the courts, the Guardianship Board or through activation of powers of attorney.

2 Summary of significant accounting policies

The corporate statements present the financial performance, financial position and cash flows of Public Trustee as at 30 June 2013 together with the supporting notes. Financial statements relating to funds administered by Public Trustee are prepared separately, detailing Trusts being Administered and Common Funds under Management.

2(a) Basis of accounting

Statement of Compliance The financial statements are general purpose financial statements and have been prepared in accordance with relevant Australian Accounting Standards and comply with Treasurer’s Instructions and Accounting Policy Statements promulgated under the provisions of the Public Finance and Audit Act 1987. Australian accounting standards and interpretations that have recently been issued or amended but are not yet effective have not been adopted by Public Trustee for the reporting period ending 30 June 2013. Refer to Note 3. Basis of preparation The preparation of the financial statements require: the use of certain accounting estimates and requires management to exercise its judgement in the

process of applying the Public Trustee’s accounting policies. The areas involving a higher degree of judgement or where assumptions and estimates are significant to the financial statements, are outlined in the applicable notes;

accounting policies are selected and applied in a manner which ensures that the resulting financial information satisfies the concepts of relevance and reliability, thereby ensuring that the substance of the underlying transactions or other events are reported; and

compliance with accounting policy statements issued pursuant to section 41 of the Public Finance and Audit Act 1987. In the interest of public accountability and transparency the accounting policy statements require the following note disclosures, which have been included in these financial statements: (i) revenues, expenses, financial assets and liabilities where the counter-party/transaction is with

an entity within the SA Government as at reporting date, classified according to their nature. A threshold of $100 000 for separate identification of these items applies;

(ii) expenses incurred as a result of engaging consultants;

(iii) employee targeted voluntary separation packages (TVSP) information;

(iv) employees whose normal remuneration is equal to or greater than the base executive remuneration level and the aggregate of the remuneration paid or payable or otherwise made available, directly or indirectly by the entity to those employees; and

(v) board/committee member and remuneration information, where a board/committee member is entitled to receive income from membership other than a direct out-of-pocket reimbursement.

The Public Trustee Statement of Comprehensive Income, Statement of Financial Position and Statement of Changes in Equity have been prepared on an accrual basis and are in accordance with historical cost

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convention, except for certain assets that were valued in accordance with the valuation policy applicable. The Statement of Cash Flows has been prepared on a cash basis.

The financial statements have been prepared based on a twelve month operating cycle and presented in Australian currency. The accounting policies set out below have been applied in preparing the financial statements for the year ended 30 June 2013 and the comparative information presented for the year ended 30 June 2012.

2(b) Comparative information

The presentation and classification of items in the financial statements are consistent with prior periods except where specific accounting standards and/or accounting policy statements have required a change.

Where presentation or classification of items in the financial statements has been amended comparative amounts have been reclassified unless reclassification is impracticable. The restated comparative amounts do not replace the original financial statements for the preceding period.

For the year ended 30 June 2013 Public Trustee has not applied an accounting policy retrospectively or made a retrospective restatement of items or reclassified items in the financial statements.

2(c) Taxation and dividend

The Public Trustee Act 1995, through the provisions of Sections 47 and 48, provides for the payment to Government of taxation equivalents and dividends. The income tax liability is based on the Treasurer’s accounting profit method, which requires that the corporate income tax rate be applied to the net profit. The Public Trustee consults with the Minister as to whether a dividend should be paid to the Treasurer for that financial year and, if so, as to the amount of the dividend.

Public Trustee is also liable for payroll tax, fringe benefits tax and goods and services tax.

2(d) Events after the reporting period

Where an event occurs after 30 June but provides information about conditions that existed at 30 June, adjustments are made to amounts recognised in the financial statements. Note disclosure is made about events between 30 June and the date the financial statements are authorised for issue where the events relate to a condition which arose after 30 June and which may have a material impact on the results of subsequent years.

2(e) Basis of valuation

Non-current assets and liabilities with the exception of Plant and Equipment are carried at deemed fair value.

Plant and Equipment Plant and equipment are brought to account at cost less, where applicable, any accumulated depreciation or amortisation. The carrying amount of plant and equipment is reviewed annually to ensure it is not in excess of the recoverable amounts from these assets. The recoverable amount is assessed on the basis of the expected net cash flows, which will be received from the assets’ employment and subsequent disposal. The expected net cash flows have not been discounted to their present values in determining the recoverable amount. An amount by which the asset’s carrying amount exceeds the recoverable amount is recorded as an impairment loss.

Intangible Assets An intangible asset is an identifiable non-monetary asset without physical substance. The acquisition of software is capitalised when the expenditure meets the definition and recognition criteria of an asset and when the amount of expenditure is greater than or equal to $5,000. Software is measured at cost unless the asset is acquired for no cost or for a nominal amount and then the asset’s fair value is deemed to be cost. All research and development costs that do not meet the capitalisation criteria outlined in AASB 138 Intangible Assets are expensed.

Plant and equipment and intangible assets are depreciated or amortised on a straight-line basis over their estimated useful lives, commencing from the time the asset is held ready for use. Amortisation is

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used in relation to intangible assets such as software, while depreciation is applied to physical assets such as plant and equipment.

The depreciation/amortisation rates used for each class of depreciable assets are:

Class of fixed asset Depreciation rate

Plant and equipment 20% - 27% Software 20% - 27% Accommodation fit out 10%

Financial Instruments Financial instruments are carried at fair value determined as below: Cash and cash equivalents: are valued at nominal amounts. This asset consists of cash at bank, on

hand and short term money market deposits that are readily converted to cash and which are subject to insignificant risk of changes in value.

Investments: on acquisition are brought to account at cost and subsequently revalued at the balance date to fair value. Fixed interest investments are classified as held at fair value through the profit or loss and valued at market value based on independently obtained market yields applying at the balance date. Australian and International equities currently held in pooled funds are valued at the fair value prices established by the managers of the collective investment vehicles in which Public Trustee has invested.

Financial Instruments - Recognition Public Trustee recognises financial assets and financial liabilities on the date it becomes party to the contractual agreement (trade date) and recognises changes in fair value of the financial assets or financial liabilities from this date. Financial Instruments – Measurement Financial assets and liabilities held at fair value through the profit or loss are measured initially at fair value excluding any transaction costs that are directly attributable to the acquisition or issue of the financial asset or financial liability. Transaction costs on financial assets and financial liabilities at fair value through profit or loss are expensed immediately. Subsequent to initial recognition, all instruments held at fair value through profit or loss are measured at fair value with changes in their fair value recognised in the Statement of Comprehensive Income. Fair value of financial instruments are classified, according to fair value hierarchy, at level 2 –fair values that are based on inputs that are directly or indirectly observable for the asset/liability. Fair value in an active market

The fair value of financial assets and liabilities traded in active markets is based on their quoted market prices at the reporting date without any deduction for estimated future selling costs. Financial assets are priced at current bid prices, while financial liabilities are priced at current asking prices.

Fair value of unlisted unit trusts Investments in other unlisted unit trusts are recorded at the fair value as reported by the managers of such funds.

Financial Instruments – Classification Investments in financial assets such as equities and units in unlisted schemes have been classified as ‘Fair value through the profit or loss’ and recognised in the Statement of Financial Position at fair value, with changes in fair value during the period recognised in the Statement of Comprehensive Income. If any indication of impairment exists, an impairment loss is recognised in the Statement of Comprehensive Income as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the original effective interest rate. If in a subsequent period the amount of an impairment loss recognised on a financial asset carried at amortised cost decreases and the decrease can be linked objectively to an event occurring after the write-down, the write-down is reversed through the Statement of Comprehensive Income.

Receivables and Payables are valued on a historical cost basis and it is considered that carrying value approximates market value.

Distributions from trust investments are recognised on a present entitlement basis.

2(f) Rounding

All amounts in the financial statements have been rounded to the nearest thousand dollars ($’000).

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2(g) Income and expenses

Income and expenses are recognised in Public Trustee’s Statement of Comprehensive Income when and only when the flow or consumption or loss of economic benefits has occurred and can be reliably measured. Income and expenses have been classified according to their nature and have not been offset unless required or permitted by a specific accounting standard or where offsetting reflects the substance of the transaction or other event. Revenue from disposal of non-current assets is recognised when control of the asset has passed to the buyer and is determined by comparing proceeds with carrying amounts.

2(h) Employee benefits

Provision has been made in the Financial Statements, where stated, for Public Trustee’s liability for employee benefits arising from services rendered by employees to balance date that remain unpaid. Related on-costs consequential to the employment of employees (payroll tax and superannuation contributions) have been included under “Payables” (Refer Note 11).

Salaries and wages Liability for salaries and wages are measured as the amount unpaid at the reporting date at remuneration rates current at reporting date. Superannuation Public Trustee makes contributions to several superannuation schemes operated by the State Government. These contributions are treated as an expense when they occur. There is no liability for payment to beneficiaries as the South Australian Superannuation Board (SASB) has assumed this liability. The only liability outstanding at balance date relates to any contributions due but not yet paid to the SASB. Annual leave Provision has been made for the unused component of annual leave to balance date. The provision has been calculated at nominal amounts based on current salary rates plus 4% inflation rate as recommended in Accounting Policy Framework IV, paragraphs 5.4 and 5.5.

Skills and experience retention leave Skills and experience retention leave is recognised on a pro-rata basis up to balance date in respect of services provided by Public Trustee employees with greater than 15 years service. The skills and experience retention leave is expected to be payable within twelve months and is measured at the undiscounted amount expected to be paid.

Long service leave Long service leave is recognised on a pro-rata basis in respect of services provided by Public Trustee employees up to balance date. This year the liability was measured by an actuarial assessment performed by the Department of Treasury and Finance based on Public Trustee employee data rather than the short hand method used in previous years. Expected future payments are discounted using market yields at the end of the reporting period on government bonds with durations that match, as closely as possible, the estimated future cash outflows. This calculation is consistent with Public Trustee’s experience of employee retention and leave taken. The current liability portion has been based on the past history of annual payments. Sick leave No provision has been made in respect of sick leave, as entitlements are non-vesting. As sick leave taken by employees is considered to be taken from the current year’s accrual, no liability is recognised.

2(i) Leases

The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement. Public Trustee has assessed whether the fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset. Public Trustee has entered into operating leases.

Operating lease payments are recognised as an expense in the Statement of Comprehensive Income on a straight-line basis over the lease term. The straight-line basis is representative of the pattern of benefits derived from the leased assets.

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All incentives for the agreement of a new or renewed operating lease are recognised as an integral part of the net consideration agreed for the use of the leased asset. Incentives received to enter into operating leases are recognised as a liability. The aggregate benefits of lease incentives received by the Public Trustee in respect of operating leases are recorded as a reduction of rental expense over the lease term, on a straight line basis. Lease incentives in the form of leasehold improvements are capitalised as an asset and depreciated over the remaining term of the lease or estimated useful life of the improvement, whichever is shorter.

2(j) Insurance

Public Trustee has insured for risks through the State Government’s insurers, SAICORP, a division of South Australian Government Financing Authority. The excess payable under this arrangement varies depending on each class of insurance held.

2(k) Current and non-current items

Assets and liabilities are characterised as either current or non-current in nature. Public Trustee has a clearly identifiable operating cycle of 12 months. Therefore assets and liabilities that will be realised as part of the normal operating cycle will be classified as current assets or current liabilities. All other assets and liabilities are classified as non-current.

2(l) Receivables

Receivables comprise debtors, accrued investment income and prepayments. Debtors arise in the normal course of selling goods and services to the public and other agencies. Trade receivables are payable within 30 days after the issue of an invoice or the services have been provided under a contractual arrangement.

2(m) Payables

Payables include creditors, accrued expenses, employment on-costs, income tax equivalents and Goods and Services Tax (refer Note 2(o)).

Creditors represent the amounts owing for goods and services received but not paid prior to the end of the reporting period. Creditors include all unpaid invoices received relating to the normal operations of Public Trustee. Accrued expenses represent goods and services provided by other parties during the period that are unpaid at the end of the reporting period and where an invoice has not been received. All amounts are measured at their nominal amount and are normally settled within 30 days after Public Trustee receives an invoice. Employment on-costs include superannuation contributions and payroll tax with respect to outstanding liabilities for salaries and wages, long service leave and annual leave.

2(n) Provisions

The workers compensation provision is an actuarial estimate of the outstanding liability as at 30 June 2013 provided by a consulting actuary engaged through the Public Sector Workforce Relations Division of the Department of the Premier and Cabinet. The provision is for the estimated cost of ongoing payments to employees as required under current legislation. Public Trustee is responsible for the payment of workers compensation claims.

2(o) Accounting for the Goods and Services tax (GST)

Income, expenses and assets are recognised net of the amount of GST except that: The amount of GST incurred by Public Trustee as a purchaser that is not recoverable from the

Australian Taxation Office is recognised as part of the cost of acquisition of an asset or as part of an item of expense; and

Receivables and payables are stated with the amount of GST included.

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The net GST payable to, or recoverable from, the Australian Taxation Office has been recognised as a payable or receivable in the Statement of Financial Position. Cash flows are reported on a gross basis in the Statement of Cash Flows. The GST component of the cash flows arising from investing or financing activities, which is recoverable from, or payable to, the Australian Taxation Office is classified as operating cash flows. Unrecognised contractual commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the Australian Taxation Office. If GST is not payable to, or recoverable from, the Australian Taxation Office, the commitments and contingencies are disclosed on a gross basis.

2(p) Disaggregated reporting

Disaggregated reporting has been deemed not appropriate for Public Trustee, as assets, liabilities, income and expenses attributable to different activities cannot be reliably determined.

2(q) Impairment

All assets are assessed annually for evidence of impairment at reporting date, where there is an indication of impairment, the recoverable amount is estimated. Any amount by which the carrying amount exceeds the recoverable amount is recorded as an impairment loss.

3 New and revised accounting standards

Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet effective, have not been adopted by the Public Trustee for the period ending 30 June 2013. The Public Trustee has assessed the impact of the new and amended standards and interpretations and considers there will be no impact on the accounting policies or the financial statements.

4 Income

4(a) Fees and charges

2013 2012 $’000 $’000 Fees and charges from entities external to the SA Government

Commissions1 9 683 10 886 Fees and charges1 1 619 1 620 Management Fees2 7 918 7 375 Total fees and charges 19 220 19 881

1Commissions and fees are charged against estates pursuant to Sections 44 and 45 of the Public Trustee Act 1995 and other Acts.

2A management fee is charged against common funds at the rate of one-twelfth of one percent of the value of each fund as at the first business day of the month.

p. 67 of 127


4(b) Interest

2013 2012 $’000 $’000 Interest from entities within the SA Government Interest on operating and reserve accounts 61 107 Total interest SA Government entities 61 107 Interest from entities external to the SA Government Interest on fixed term investments 926 1 064 Total interest non SA Government entities 926 1 064 Total interest 987 1 171

4(c) Other income

2013 2012 $’000 $’000 Other income from entities within the SA Government Recoupment of salaries and oncosts 73 149 Total other income SA Government entities 73 149 Other income from entities external to the SA Government

Sundry income 25 20 Distributions from trusts 302 197 Total other income non SA Government entities 327 217 Total other income 400 366

5 Expenditure

5(a) Superannuation

During 2012-13 Public Trustee paid an amount of $1.3 million ($1.3 million) to the Department of Treasury and Finance towards the accruing Government liability for superannuation in respect of its employees.

5(b) Remuneration of employees

The number of employees whose remuneration received or receivable fell within the following bands:- 2013 2012 Number of

Employees Number of

Employees $188 000 - $197 999 - 2 $228 000 - $237 999 2 - $268 000 - $277 999 - 1 $278 000 - $287 999 1 - 3 3

The table includes all employees who received remuneration equal to or greater than the base executive remuneration level during the year. Remuneration of employees reflects all costs of employment including salaries and wages, payments in lieu of leave, superannuation contributions, fringe benefits tax and any other salary sacrifice benefits. Total remuneration received or due and receivable by these employees was $751 000 ($659 000).

5(c) Targeted voluntary separation packages (TVSPs)

Public Trustee provided for no TVSPs during 2012-13 or the previous year.

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5(d) Remuneration of board and committee members

Members that were entitled to receive remuneration for membership during the 2012-13 financial year were:

Public Trustee Audit and Risk Management Committee Mr Peter Whelan Ms Christine Locher

The number of members whose remuneration received or receivable fell within the following band:-

2013 2012 Number of

Members Number of

Members $0 - $9 999 1 2 $10 000 - $19 999 1 1 2 3

The total remuneration received or receivable by members was $23 000 ($34 000).

Unless otherwise disclosed, transactions between members are on conditions no more favourable than those that it is reasonable to expect the entity would have adopted if dealing with the related party at arm's length in the same circumstances.

In accordance with the Department of Premier and Cabinet Circular No. 016, government employees did not receive any remuneration for board/committee duties during the financial year.

5(e) Supplies and services

2013 2012 $’000 $’000 Supplies and services provided by entities within the SA Government

Insurance 182 165 Information technology 397 445 Accommodation and telecommunication 1 680 1 619 Legal expenses 79 35 Service contractors 631 595 Other Supplies and services where value to entity is less than $100,000

126 130

Auditors remuneration1 168 171 Total supplies and services SA Government entities 3 263 3 160

Supplies and services provided by entities external to the SA Government

Personal services contractors 114 353 Other service contractors 165 416 Information technology 955 831 Minor works, maintenance and equipment 10 10 Accommodation and telecommunication 38 27 Other services and supplies 891 1 082 Consultancies2 233 - Total supplies and services non SA Government entities

2 406 2 719

Total supplies and services 5 669 5 879

1Audit fees paid/payable to the Auditor General’s Department relating to the audit of financial statements

2Public Trustee procured three consultancies over $50,000 in 2012-13 for the review of the agency’s core business information systems and to provide advice regarding improvements to client superannuation arrangements. There were no consultancies in 2011-12.

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6 Receivables 2013 2012 $’000 $’000

Current receivables Debtors 101 306 Accrued investment income 377 376 Income tax equivalent refund due 235 235 Prepayments 140 430 853 1 347 Government/Non Government receivables Receivables from SA Government entities Debtors 80 290 Accrued investment income 5 7 Income tax equivalent refund due 235 235 Total receivables from SA Government entities 320 532 Receivables from Non SA Government entities Debtors 21 16 Accrued investment income 372 369 Prepayments 140 430 Total receivables from Non SA Government entities 533 815

Total Receivables 853 1 347

Receivables are generally settled within 30 days after the issue of an invoice.

7 Financial assets

Public Trustee is required, pursuant to section 46(2)(c) of the Public Trustee Act 1995, to obtain the Treasurer’s approval as to the manner of investment of corporate funds.

2013 2012 $’000 $’000

Current financial assets Current financial assets with entities other than SAFA Australian fixed interest - 1 998

Short term financial assets - 1 998

Non-current financial assets Non-current financial assets with entities other than SAFA Australian fixed interest (pooled funds) 6 943 7 141 International equities (pooled funds) 3 510 2 833 Australian listed property (pooled funds) 1 284 1 075 Australian equities (pooled funds) 4 192 3 643 Long term financial assets 15 929 14 692 Total financial assets 15 929 16 690

8 Financial instruments

8(a) Fair value of financial assets and liabilities

Financial instruments are readily tradeable and carried at fair value based upon the valuation policies set out in Note 2(e). The aggregate carrying amounts for each class of financial instrument are as disclosed within the notes to the financial statements.

8(b) Investment in collective investment vehicles

In addition to holding financial instruments directly, Public Trustee has invested in collective investment vehicles for the purpose of gaining exposure to Australian and International assets. The managers of such vehicles have invested in a variety of financial instruments, which expose Public Trustee to investment risks, including market risk, credit risk, interest risk and currency risk. The Public Trustee has

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assessed the investment rules of these collective investments and determined their suitability as investments.

8(c) Financial risk management

Public Trustee’s activities expose it to a variety of financial risks: market risk (including interest rate risk and price risk), credit risk and liquidity risk. The overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of Public Trustee. Only Australian domiciled pooled funds are used for investments in overseas assets. These funds are not directly exposed to foreign exchange risk as the pooled funds are fully hedged against currency risk.

Management of risk is focused on both strategic and business process risk. Annually, an analysis of strategic risk is undertaken which is comprehensive and covers investment, financial, operational and administrative responsibilities of Public Trustee. Business processes are documented, key risks are identified and management strategies used to control these risks are in place.

8(d) Market risk

Price risk Public Trustee is exposed to equity securities price risk. This arises from investments held by Public Trustee and classified on the Statement of Financial Position as financial assets at fair value through the profit or loss. Public Trustee is not exposed to commodity price risk, as the classes of investments include Australian shares, International shares and listed properties. To manage its price risk arising from investments, Public Trustee diversifies its portfolio. Diversification of the portfolio is done in accordance with its Investment Guidelines. The analysis detailed below is based on the assumption that the market indexes had increased/decreased by a set percentage with all other variables held constant and all instruments moving according to the historical correlation with the index. Cash flow and interest rate risk Public Trustee’s interest rate risk arises from cash investments, short term investments and Australian fixed interest investments. Instruments issued at fixed interest rates expose Public Trustee to fair value interest rate risk and variable rate instruments expose Public Trustee to cash flow interest rate risk. Public Trustee invests in short term money market instruments with maturities less than one year and with credit ratings that satisfy the credit rating requirements of Public Trustee’s Cash Common Fund. A sensitivity analysis is provided below, outlining the exposure to each type of market risk at reporting date, showing how profit or loss would be affected by the changes in the relevant risk variable that were reasonably possible at that date. All instruments are designated as financial assets at fair value through the profit or loss; therefore there is no direct impact on equity.

Sensitivity analysis – 30 June 2013

Interest Rate Risk Price Risk - + - +

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Financial assets Cash and cash equivalents 11 887 (119) 119 - -

Financial assets at fair value through profit or loss: Australian fixed interest

(pooled funds) 6 943 (69) 69 - -

International equities (pooled funds)

3 510 - - (702) 351

Australian listed property (pooled funds)

1 284 - - (257) 129

Australian equities (pooled funds)

4 192 - - (838) 419

Total (decrease)/increase (188) 188 (1 797) 899

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Sensitivity analysis – 30 June 2012

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Financial assets Cash and cash equivalents

8 741 (87) 87 - -

Financial assets at fair value through profit or loss: Australian fixed interest 1 998 (20) 20 - - Australian fixed interest

(pooled funds) 7 141 (71) 71 - -

International equities (pooled funds)

2 833 - - (567) 283

Australian listed property (pooled funds)

1 075 - - (215) 108

Australian equities (pooled funds)

3 643 - - (729) 364

Total (decrease)/increase (178) 178 (1 511) 755

8(e) Credit risk

Credit risk is managed at the corporate level. Credit risk arises from cash and cash equivalents, deposits with banks and financial institutions, as well as credit exposures to outstanding receivables and committed transactions. Public Trustee has no direct exposure to derivative instruments, thus credit risk arises primarily through investments with banking corporations. Short-term money market instruments must have a short-term Standard & Poor’s (S&P) rating of A1 or in the case of the issuer being a bank under the Banking Act 1959 a rating of A2 is accepted. Floating rate instruments must have a long-term S&P credit rating of A+ or better or where the counter party is a bank under the Banking Act 1959 a rating of BBB or better is accepted. If there is no independent rating, Public Trustee assesses the credit quality of the customer, taking into account its financial position and past experience. Pooled investment funds are not rated; however, Public Trustee has made a thorough assessment of all pooled funds managers in regard to credit and other risks prior to investing funds with each manager. The credit risk lies with the pooled fund manager responsible for the management of the underlying investments. Public Trustee continually monitors these assessments. The maximum exposure to credit risk at the reporting date is the carrying amount of the financial assets. The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external credit ratings (if available) or to historical information about counterparty default rates. Public Trustee has no direct exposure to derivative instruments.

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Credit risk (continued) 2013 2012

$’000 $’000 Cash at bank, short-term bank deposits and floating rate notes

A1+ 3 387 4 241 A1 2 500 2 000 A2 6 000 2 500 BBB+ - 1 998 Total cash at bank, short-term bank deposits and floating rate notes

11 887

10 739

2013 2012

$’000 $’000 Trade receivables Counterparties with external ratings

A1 38 39 A1+ 18 52 A2 34 26 BBB+ - 7 Counterparties without external ratings Existing customers with no defaults in the past 763 1 223 Total trade receivables 853 1 347

8(f) Liquidity risk

Public Trustee has working capital policies in place in order to maintain liquidity. Short-term investment analysis assists in determining the amount, if any, to be invested or reinvested in order to maintain working capital. Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, and the ability to close out market positions. Public Trustee manage the liquidity risk by continuously monitoring forecast and actual cash flows and matching maturity profiles of financial assets and liabilities. All financial assets held to maturity have a maturity date within 12 months. Pooled Funds investments have no maturity date.

9 Plant and equipment

2013

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$’000 $’000 $’000 $’000 $’000 $’000 Plant and equipment at cost 1 026 - (79) - - 947 Accommodation fit-out 6 217 101 - - - 6 318 Work in progress

at cost - 293 - - - 293

Total plant and equipment 7 243 394 (79) - - 7 558 Less: accumulated depreciation Plant and equipment (845) - 75

(89) - (859)

Accommodation fit-out (1 234) - - (623) - (1 857) Total accumulated depreciation

(2 079)

-

75

(712)

-

(2 716)

Net plant and equipment 5 164 394 (4) (712) - 4 842

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2012

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$’000 $’000 $’000 $’000 $’000 $’000 Plant and equipment at cost 1 863 - (837) - - 1 026 Accommodation fit-out 6 155 61 - - 1 6 217 Total plant and equipment 8 018 61 (837) - 1 7 243

Less: accumulated depreciation Plant and equipment (1 521) - 837 (161) - (845) Accommodation fit-out (617) - - (617) - (1 234) Total accumulated depreciation

(2 138) - 837 (778) - (2 079)

Net plant and equipment 5 880 61 - (778) 1 5 164 10 Intangible assets

2013

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$’000 $’000 $’000 $’000 $’000 $’000 Software at cost 6 100 - - - - 6 100 Work in progress at cost - 257 - - - 257 Less: Accumulated ammortisation

(6 083) - - (9) - (6 092)

Total intangible assets 17 257 - (9) - 265 Work in progress items are transferred to intangible assets when ready for use.

2012

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$’000 $’000 $’000 $’000 $’000 $’000 Software at cost 7 614 - (1 514) - - 6 100 Work in progress at cost 93 - - - (93) - Less: Accumulated ammortisation

(7 547) - 1 514 (50) - (6 083)

Total intangible assets 160 - - (50) (93) 17

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11 Payables

2013 2012 $’000 $’000 Current liabilities Trade creditors and accrued expenses 1 069 943 Income tax equivalents 568 - GST payable 267 241 Employment on-costs 224 251 2 128 1 435 Non-current liabilities Employment on-costs 405 404 2013

$’000 2012

$’000 Government/Non Government payables Payables to SA Government entities Trade creditors and accrued expenses 409 603 Income tax equivalents 568 - On-costs on employee benefits 302 324 Total payable to SA Government entities 1 279 927 Payables to Non SA Government entities Trade creditors and accrued expenses 661 340 Goods and services tax 267 241 On-costs on employee benefits 326 331 Total payable to Non SA Government entities1 1 254 912 Total payables 2 533 1 839

1The total includes payables to SA Government entities where the amount payable to the SA Government entity was less than $100,000.

12 Employee benefits

2013 2012 $’000 $’000 Current Liabilities Long service leave2 142 290 Accrued salaries 123 82 Recreation leave1 840 861 Skills and experience retention leave1 83 - 1 188 1 233 Non-current liabilities Long service leave2 3 718 3 634 3 718 3 634 Total employee benefits 4 906 4 867

1 An actuarial assessment performed by the Department of Treasury and Finance set the salary inflation rate at 4%. This rate is unchanged from last year.

2Treasury Accounting Policy Framework IV, paragraph 5.24, confirms the long service leave taken percentage is unchanged from 2012 at 40%. The yield on long term Commonwealth Bonds used as the discount rate in calculating long service leave by the actuarial is 3.75% (3%). The change in methodology and actuarial assumptions in the current financial year have the effect of decreasing the long service leave liability by $246,000 in 2012-13.

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13 Provisions 2013 2012

$’000 $’000 Current Liabilities Provision for dividend to State Government1 222 -

Provision for workers’ compensation2 24 - Total provisions 246 -

2013 2012

$’000 $’000 Movement in current provisions for dividend Provision for dividend to State Government at 1 July1 (254) - Add: additional provision recognised 476) 684 Less: payments to State Government - (684) Provision for dividend at 30 June 222 -

1In accordance with the Public Trustee Charter, agreed by the Attorney-General and Treasurer, any differences between forecast profit and audited profit will be addressed through an adjustment to the final dividend in the following financial year. In 2011-12 the dividend paid to the Government exceeded the requirement that arose from the audited profit, resulting in a $254,000 downwards adjustment to the dividend payable in 2012-13. Public Trustee intends to recommend to the Minister that an additional dividend of $651,000 be paid in 2013-14. 2A liability has been reported to reflect unsettled workers compensation claims. The workers’ compensation provision is based on an actuarial assessment performed by the Public Sector Workforce Relations Division of the Department of Premier and Cabinet. These claims are expected to be settled within the next twelve months.

14 Contingencies

Public Trustee had no known contingent assets or liabilities as at balance date. 15 Reserves

Workers Compensation Reserve1

$’000 Balance as at 30 June 2011 285 Payments from reserves - Balance as at 30 June 2012 285 Payments/transfers from reserves (285) Total reserves as at 30 June 2013

-

1Public Trustee established a reserve to meet the cost of workers’ compensation claims. Payments amounting to $nil ($nil) were made from the reserve. This reserve has been transferred to retained earnings and a provision established for workers’ compensation.

16 Cash flow reconciliation

16(a) Reconciliation of cash and cash equivalents 2013 2012 $’000 $’000 Cash and cash equivalents disclosed in the Statement of Financial Position

11 887 8 741

Balance as per the Statement of Cash Flows 11 887 8 741

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16(b) Reconciliation of profit/loss after income tax equivalents to net cash provided by operating activities

2013 2012 $’000 $’000 Profit for the year after income tax equivalent 1 327 505

Add/Less non cash items:- Depreciation and amortisation 720 828 Lease incentive (267) (288) Unrealised gain on financial assets (1 235) - Realised gain on financial assets (1) (1) Loss on disposal of equipment 4 - Change in assets and liabilities:- Decrease (Increase) in receivables 494 787 Increase (Decrease) in payables 146 432 Increase (Decrease) in employee benefits and on-costs

12 1 001

Increase in provisions 24 - Increase (Decrease) in capital written off - 93 Increase (Decrease) in income tax equivalents 568 (824) (Decrease) Increase in GST liability 26 (53) Net cash provided by operating activities 1 818 2 480

17 Cash and cash equivalents

2013 2012 $’000 $’000 Cash and cash equivalents

Cash 2 387 1 241 Short term financial assets held to maturity 9 500 7 500

11 887 8 741 18 Unrecognised contractual commitments

Public Trustee has no capital contractual arrangements for 2011-12 or 2012-13.

2013 2012 $’000 $’000 Remuneration commitments

One year or less 696 820 Later than one year but no longer than five years 1 852 1 760 Total remuneration commitments 2 548 2 580

Amounts disclosed include commitments arising from executive service contracts. Public Trustee does not offer remuneration contracts greater than 5 years.

2013 2012 $’000 $’000 Operating lease commitments

One year or less 1 759 1 696 Later than one year but no longer than five years Later than five years

7 722 4 123

7 443 6 162

Total operating lease commitments 13 604 15 301

Public Trustee’s operating leases are for office accommodation. Office accommodation is leased from the Department of Planning, Transport and Infrastructure. The leases are non-cancellable and expire in May 2020. Rent is payable monthly in advance.

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Statement of Trusts being administered

As at 30 June 20132013 2012

Note ($’000) ($’000)Trust funds under administration 3

Deceased Estates 156 432 160 999 Trusts 117 079 113 609 Administration Matters 87 024 83 164 Court Award Orders 311 283 282 329 Protected Estates 246 925 236 486 Workers Compensation Awards 177 242 Power of Attorney 60 656 60 100 Investors 260 364 232 890

Total funds 1 239 940 1 169 819

Represented byInvestment in Common Funds 1(c), 2

Non current assetsAustralian equities 157 028 134 595 International equities 129 658 98 193 Listed property securities 48 569 42 966 Australian fixed interest investments 217 968 177 094 International fixed interest investments 23 617 23 704

576 840 476 552 Current assets

Cash and cash equivalents 5 110 5 049 Australian fixed interest investments 276 686 306 992 Advances to estates 5 364 6 401 Other assets 12 146 13 705

299 306 332 147 Current liabilities

Bank overdraft - 1 713 Income distribution payable 9 549 12 652 Other liabilities 77 21

9 626 14 386 Net Comon Fund assets 866 520 794 313

Estate assets 1(b)

Non current assetsReal estate 291 614 307 188 Personal chattels 42 287 34 997 Equities 18 598 14 535 Fixed interest and cash assets 17 199 13 166 Mortgages 176 193

369 874 370 079 Current assets

Other assets 12 416 14 206

Current liabilitiesOther liabilities 8 870 8 779

Net estate assets 373 420 375 506 Total net assets 1 239 940 1 169 819

* The above statement should be read in conjunction with the notes.

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Public Trustee Trusts being Administered NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 1. Statement of Principal Accounting Policies

1(a) Format of the Accounts

The Statement of Trusts Being Administered (the ‘Statement’) and related notes are special purpose financial statements that provide information on the value and nature of trusts being administered. The Statement consolidates all trusts being administered by Public Trustee. Accordingly, no Accounting Standards and other mandatory reporting requirements are applied in the preparation and presentation of this Statement.

Public Trustee has prepared the Statement, where appropriate, based on the general principles outlined in Australian Accounting Standards. The Statement of Trusts Being Administered has been prepared using the accrual basis of accounting. Dividend income is recognised on the date that shares are quoted as ex-dividend. Distributions from trusts are recognised on a present entitlement basis.

1(b) Basis of valuation for estate assets

Real Estate: For deceased estates, valuation is at date of death; in other matters, valuation is at the date Public Trustee being appointed manager, administrator or new trustee. Public Trustee revalues all real estate (except deceased estates) other than accommodation bonds every three years wherever a current valuation is not held. Such revaluations are determined by reference to valuations established by the South Australian Valuer-General, with a revaluation last being carried out as at 30 June 2013. Accommodation bonds are valued annually at cost less retention amount until the retention terms have expired.

Personal Chattels: For deceased estates, valuation is at date of death; in other matters, valuation is at the date of Public Trustee being appointed manager, administrator or new trustee. In the case of some sundry minor assets, nominal values are used for valuation purposes.

Investment by Estates in Common Funds: Valuation of estate investment in common funds is based on the underlying fair value of common funds as at balance date.

Other Estate Investments: Investments other than equities are shown at their face value. Valuation is performed at the date of the Public Trustee being appointed manager, administrator or new trustee or at the date of death in the case of deceased estates. Equities are valued at net fair value as at balance date.

1(c) Basis of valuation of common fund assets and liabilities

For the 2012/2013 reporting period, assets for the Australian Shares Common Fund, Overseas Fixed Interest Common Fund, Overseas Shares Common Fund and the Listed Property Securities Common Fund are reported at market value to comply with current accounting standards.

Australian Fixed Interest Investments: Are valued at market value based on independently obtained market yields applying at balance date. Advances to Estates: Are carried at their nominal amounts. Public Trustee is authorised by the Public Trustee Act 1995 to advance monies where an estate has insufficient monies to make payments as authorised or required to administer the estate, usually on a short term basis. Funds advanced are a first charge on the estate's property vested under the control of Public Trustee. The interest rate applicable on advances at 30 June 2013 was 3.50% (4.60%). Cash at Bank and Cash Equivalents: Are carried at nominal amounts, translated at prevailing exchange rates where applicable. This asset consists of cash at bank and on hand, as well as other short term, highly liquid investments with original maturities of three months or less. Other assets and other liabilities: Are carried at their nominal amounts.

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2. Operation of the Common Funds

Common Funds managed by Public Trustee have been established pursuant to Section 29 of the Public Trustee Act 1995 or its predecessor legislation. Financial Statements for each common fund operated by Public Trustee are presented within the annual report of Public Trustee. Investment in Common Funds (with the exception of direct investment in the Cash Common Fund) are by way of notional unit holdings in the common funds. Contributors may invest in the Cash Common Fund or alternately invest in a selection of common funds in proportions determined by one or more of the following standard investment strategies provided by Public Trustee:

Capital Stable Growth Balanced Equities

3 Trust Funds under Administration

Number Value2013 2012 2013 2012

Deceased Estates $’000 $’000

Monies and assets held under the administration of the Public Trustee pursuant to the provisions of the Public Trustee Act 1995 1 264 1 308 156 432 160 999

Trusts

Monies and assets held under the administration of the Public Trustee pursuant to the terms of a Will or a Deed of Trust 1 407 1 473 117 079 113 609

Administration MattersMonies paid and assets transferred to the Public Trustee on account of minor beneficiaries pursuant to the Public Trustee Act 1995 434 460 87 024 83 164

Court Award Orders

Monies directed by the Court to be paid to the Public Trustee on behalf of clients and invested and applied by the Public Trustee as the Court directs and monies administered by the Public Trustee under the Aged and Infirm Persons Property Act 1940 813 832 311 283 282 329

Protected EstatesMonies administered by the Public Trustee under the Guardianship and Administration Act 1993 3 272 3 141 246 925 236 486

Workers Compensation AwardsMonies directed by the Court to be paid to the Public Trustee on behalf of widows and minors and invested and applied by the Public Trustee as the Court directs 4 4 177 242

Powers of Attorney

Monies and assets held on behalf of donors who have appointed the Public Trustee to act on their behalf 351 383 60 656 60 100

InvestorsMonies invested in Common Funds pursuant to Section 29 (1) of the Public Trustee Act 1995 by classes of persons approved by the Minister 294 328 260 364 232 890

7 839 7 929 1 239 940 1 169 819

4 Unclaimed Monies

During the reporting period, unclaimed monies totalling $598 000 ($290 000) in respect of estates is expected to be paid to the Consolidated Account pursuant to Section 32 (1) of the Public Trustee Act 1995.

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Common Funds Financial Statements 2012–13 Cash Common Fund

Statement of Comprehensive Income Notes 2013 2012For the year ended 30 June 2013 $'000 $'000

Investment incomeInterest 2(e) 19 793 23 744 Net gain on financial assets held at fair value through profit or loss 2(b),3(d) 2 369 181 Other income 5 -

Total investment income 22 167 23 925

Expenses Public Trustee management fees 2(f) 4 180 4 082 Legal and advisory expenses 112 146 Other expenses 29 30


Net operating profit 17 846 19 667

Financing costs attributable to unitholdersUndistributed income brought forward 1 966 2 066 Distributions to unitholders 2(h),4 (15 946) (19 586) Transfers (to) net assets to determine distributable income 2(i) (2 369) ( 181)

Total financing costs attributable to unitholders (16 349) (17 701)

(Increase) in net assets attributable to unitholders (1 497) (1 966)

Total comprehensive income for the year - -

The above Statement of Comprehensive Income should be read in conjunction with the accompanying notes

Year ended

Cash Common Fund

Statement of Financial Position Notes 2013 2012As at 30 June 2013 $'000 $'000

AssetsCash and cash equivalents 5 5 110 5 049 Advances to estates 5 364 6 401 Financial assets held at fair value through profit or loss 6 388 172 383 991 Other assets 4 451 5 078

Total assets 403 097 400 519

LiabilitiesIncome distribution payable 1 497 1 966 Bank overdraft 5 - 1 713 Funds deposited by other Common Funds 55 146 64 789 Other liabilities 49 19

Total liabilities (excluding net assets attributable to unitholders) 56 692 68 487

Net assets attributable to unitholders - liability 3 346 405 332 032

Represented by:Fair value of outstanding units based on net asset value 346 405 332 032

The above Statement of Financial Position should be read in conjunction with the accompanying notes

Year ended

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Cash Common Fund

Statement of Cash Flows Notes 2013 2012For the year ended 30 June 2013 Inflows Inflows


Cash flows from operating activitiesCash inflowsInterest received 20 249 23 680 Other Income - - Cash generated from operations 20 249 23 680 Cash outflowsPayments for expenses (4 331) (4 291) Cash used in operations (4 331) (4 291)

Net cash provided by operating activities 10(b) 15 918 19 389

Cash flows from investing activitiesCash inflows

337 385 315 034 Net repayments of advances to estates 1 037 2 201 Cash generated from investing activities 338 422 317 235 Cash outflowsPurchase of financial assets held at fair value through profit or loss (339 114) (311 221) Cash used in investing activities (339 114) (311 221)

Net cash (used in) provided by investing activities ( 692) 6 014

Cash flows from financing activitiesCash inflows

12 136 23 959

(9 642) (25 469) Cash generated from financing activities 2 494 (1 510) Cash outflowsDistributions paid (15 946) (19 586) Cash used in financing activities (15 946) (19 586)

Net cash (used in) financing activities (13 452) (21 096)

Net increase in cash and cash equivalents 1 774 4 307

Cash and cash equivalents at beginning of the period 3 336 ( 971)

Cash and cash equivalents at the end of the period 5 5 110 3 336

The above Statement of Cash Flows should be read in conjunction with the accompanying notes

Net proceeds/payments from applications/redemptions from/(to) other Common Funds

Year ended

Proceeds from the sale of financial assets held at fair value through profit or loss

Net proceeds/payments from applications/redemptions from/(to) unitholders

p. 84 of 127


Short Term Fixed Interest Common Fund


Investment incomeInterest 2(e) 2 299 2 848 Net gain on financial assets held at fair value through profit or loss 2(b),3(d) 84 381 Other Income 3 -


Expenses Public Trustee management fees 2(f) 367 327 Legal and advisory expenses 10 11

Total expenses 377 338


Financing costs attributable to unitholdersUndistributed Income brought forward 1 185 1 074 Distributions to unitholders 2(h),4 (2 218) (2 399) Transfers (to) net assets to determine distributable income 2(i) ( 84) ( 381)


(Increase) in net assets attributable to unitholders ( 892) (1 185)



Year ended



AssetsCash and cash equivalents 5 21 478 15 339 Financial assets held at fair value through profit or loss 6 27 602 34 168 Other assets 409 557


LiabilitiesIncome distribution payable 892 1 185 Other liabilities 2 -

Total liabilities (excluding net assets attributable to unitholders) 894 1 185




Year ended

p. 85 of 127





Cash flows from operating activitiesCash inflowsInterest received 2 480 2 537 Cash generated from operations 2 480 2 537 Cash outflowsPayments for expenses ( 376) ( 341) Cash used in operations ( 376) ( 341)



21 000 22 000 Cash generated from investing activities 21 000 22 000 Cash outflowsPurchase of financial assets held at fair value through profit or loss (14 378) (29 720) Cash used in investing activities (14 378) (29 720)

Net cash provided by (used in) investing activities 6 622 (7 720)

Cash flows from financing activitiesCash inflowsProceeds from applications by unitholders 3 752 3 466 Cash generated from financing activities 3 752 3 466 Cash outflowsPayments for redemptions by unitholders (4 121) (4 221) Distributions paid (2 218) (2 399) Cash used in financing activities (6 339) (6 620)


Net increase / (decrease) in cash and cash equivalents 6 139 (8 678)

Cash and cash equivalents at beginning of the period 15 339 24 017



Year ended


p. 86 of 127


Long Term Fixed Interest Common Fund


Investment incomeInterest 2(e) 4 428 4 990

2(b),3(d) ( 45) 1 905 Other Income 3 -





Financing costs attributable to unitholdersUndistributed Income brought forward 2 053 2 231 Distributions to unitholders 2(h),4 (3 953) (4 488) Transfers from (to) net assets to determine distributable income 2(i) 45 (1 905)





Year ended

Net (loss) gain on financial assets held at fair value through profit or loss



AssetsCash and cash equivalents 5 10 849 24 128 Financial assets held at fair value through profit or loss 6 78 880 65 927 Other assets 938 931


LiabilitiesIncome Distribution Payable 1 739 2 053 Other liabilities 5 -





Year ended

p. 87 of 127





Cash flows from operating activitiesCash inflowsInterest received 4 507 4 775 Cash generated from operations 4 507 4 775 Cash outflowsPayments for expenses ( 792) ( 686) Cash used in operations ( 792) ( 686)



13 000 47 424 Cash generated from investing activities 13 000 47 424 Cash outflowsPurchase of financial assets held at fair value through profit or loss (26 075) (61 173) Cash used in investing activities (26 075) (61 173)

Net cash (used in) investing activities (13 075) (13 749)



Net (decrease) increase in cash and cash equivalents (13 279) (13 559)




Year ended


p. 88 of 127


Overseas Fixed Interest Common Fund


Investment incomeTrust Distributions 1 160 1 309 Interest 2(e) 425 563

2(b),3(d) ( 236) 1 174 Other Income 149 144





Financing costs attributable to unitholdersUndistributed Income brought forward 1 434 3 764 Distributions to unitholders 2(h),4 (2 058) (4 086) Transfers from (to) net assets to determine distributable income 2(i) 236 (1 174)

Total Financing costs attributable to unitholders ( 388) (1 496)




Year ended

Net (loss) gain on financial assets held at fair value through profit or loss



AssetsCash and cash equivalents 5 10 488 10 639 Financial assets held at fair value through profit or loss 6 23 617 23 704 Other assets 609 1 215


LiabilitiesIncome distribution payable 839 1 434 Other liabilities 3 2





Year ended

p. 89 of 127





Cash flows from operating activitiesCash inflowsTrust distributions received 1 757 3 338 Interest received 434 572 Other income - - Cash generated from operations 2 191 3 910 Cash outflowsPayments for expenses ( 271) ( 262) Cash used in operations ( 271) ( 262)



- - Cash generated from investing activities - - Cash outflowsPurchase of financial assets held at fair value through profit or loss - - Cash used in investing activities - -

Net cash (used in) / provided by investing activities - -



Net (decrease) in cash and cash equivalents ( 151) ( 398)




Year ended


p. 90 of 127


Australian Shares Common Fund



2(b),3(d) 20 746 (17 347) Other Income 1 687 870

Total investment income 28 596 (10 088)

Expenses Public Trustee management fees 2(f) 1 607 1 472 Legal and advisory expenses 43 54


Net operating profit (loss) 26 946 (11 614)

Financing costs attributable to unitholdersUndistributed Income brought forward 2 952 7 913 Distributions to unitholders 2(h),4 (5 869) (10 694) Transfers (to) from net assets to determine distributable income 2(i) (20 746) 17 347

Total financing costs attributable to unitholders (23 663) 14 566




Year ended

Net gain (loss) on financial assets held at fair value through profit or loss



AssetsCash and cash equivalents 5 6 454 8 436 Financial assets held at fair value through profit or loss 6 157 028 134 595 Other assets 2 864 2 784

Total assets 166 346 145 815

LiabilitiesIncome Distribution Payable 3 283 2 952 Other liabilities 10 -





Year ended

p. 91 of 127





Cash flows from operating activitiesCash inflowsTrust distributions received 5 729 12 196 Interest received 364 522 Other income received - - Cash generated from operations 6 093 12 718 Cash outflowsPayments for expenses (1 651) (1 536) Cash used in operations (1 651) (1 536)



- - Cash generated from investing activities - - Cash outflowsPurchase of financial assets held at fair value through profit or loss - - Cash used in investing activities - -

Net cash (used in) provided by investing activities - -



Net (decrease) / increase in cash and cash equivalents (1 982) 1 287




Year ended


p. 92 of 127


Overseas Shares Common Fund



2(b),3(d) 31 203 ( 196) Other Income 262 289


Expenses Public Trustee management fees 2(f) 1 149 996 Legal and advisory expenses 31 36

Total Expenses 1 180 1 032


Financing costs attributable to unitholdersUndistributed Income brought forward 1 846 5 222 Distributions to unitholders 2(h),4 (1 962) (5 222) Transfers (to) net assets to determine distributable income 2(i) (32 109) ( 6)

Total financing costs attributable to unitholders (32 225) ( 6)




Year ended

Net gain (loss) on financial assets held at fair value through profit or loss



AssetsCash and cash equivalents 5 4 350 4 986 Financial assets held at fair value through profit or loss 6 129 658 98 193 Other assets 1 868 2 320

Total assets 135 876 105 499






Year ended

p. 93 of 127





Cash flows from operating activitiesCash inflowsTrust distributions received 2 829 6 229 Interest received 233 307 Cash generated from operations 3 062 6 536 Cash outflowsPayments for expenses (1 181) (1 040) Cash used in operations (1 181) (1 040)



- 36 785 Cash generated from investing activities - 36 785 Cash outflowsPurchase of financial assets held at fair value through profit or loss - (36 000) Cash used in investing activities - (36 000)

Net cash provided by investing activities - 785


Net cash (used in) provided by financing activities (2 517) (4 739)

Net increase / (decrease) in cash and cash equivalents ( 636) 1 542




Year ended


p. 94 of 127


Listed Property Securities Common Fund


Investment incomeTrust Distributions 2 804 2 250 Interest 2(e) 47 134 Net gain on financial assets held at fair value through profit or loss 2(b),3(d) 5 619 1 560 Other Income 146 154





Financing costs attributable to unitholdersUndistributed Income brought forward 1 214 3 232 Distributions to unitholders 2(h),4 (1 724) (4 130) Transfers (to) net assets to determine distributable income 2(i) (6 958) (1 560)

Total Financing costs attributable to unitholders (7 468) (2 458)




Year ended



AssetsCash and cash equivalents 5 1 527 1 261 Financial assets held at fair value through profit or loss 6 48 569 42 966 Other assets 1 007 820







Year ended

p. 95 of 127





Cash flows from operating activitiesCash inflowsTrust distributions received 2 619 2 410 Interest received 46 154 Other Income 8 - Cash generated from operations 2 673 2 564 Cash outflowsPayments for expenses ( 510) ( 431) Cash used in operations ( 510) ( 431)



26 155 - Cash generated from investing activities 26 155 - Cash outflowsPurchase of financial assets held at fair value through profit or loss (26 000) (4 000) Cash used in investing activities (26 000) (4 000)

Net cash provided by / (used in) investing activities 155 (4 000)



Net increase / (decrease) in cash and cash equivalents 266 (5 663)




Year ended


p. 96 of 127


PUBLIC TRUSTEE COMMON FUNDS NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

1. General information The Common Funds have been established pursuant to the Public Trustee Act 1995 or its predecessor legislation. The following Common Funds were active for the whole of the current and comparative reporting periods: Cash Common Fund; Short Term Fixed Interest Common Fund; Long Term Fixed Interest Common Fund; Australian Shares Common Fund; Overseas Fixed Interest Common Fund; Overseas Shares Common Fund; and Listed Property Securities Common Fund.

The Inflation Linked Investments Common Fund was dormant throughout 2012/2013, has nil assets and liabilities and has not been reported. Investment in Common Funds (with the exception of direct investment in the Cash Common Fund) is by way of notional unit holdings in the Common Funds. Unitholders may invest in the Cash Common Fund or alternately invest in a selection of Common Funds in proportions determined by one or more of the following standard investment strategies provided by Public Trustee:

Capital Stable Growth Balanced Equities

Management of Common Fund investments is undertaken by Public Trustee. An Investment Advisory Committee consisting of senior Public Trustee personnel, with attendance by external investment advisors, assists the Public Trustee in ensuring a sound and prudent system for investing client funds. Australian and International Equity investments, Listed Property Securities investments together with Overseas Fixed Interest investments are made using Australian domiciled pooled funds.

2. Summary of significant accounting policies

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all years presented, unless otherwise stated.

(a) Basis of accounting

Statement of Compliance The Public Trustee Common Funds financial statements are general purpose financial statements and have been prepared in accordance with relevant Australian Accounting Standards and comply with Treasurer’s Instructions issued pursuant to the provisions of the Public Finance and Audit Act 1987.

Basis of Preparation The Public Trustee Common Funds financial statements have been prepared on the basis of fair value measurement of assets and liabilities except where otherwise stated. The statements have also been prepared on the basis that all funds are distributable to unitholders resulting in zero residual equity. On this basis, the Statement of Changes in Equity has not been included for reporting purposes as the changes in equity is zero.

(b) Financial instruments

(i) Classification

The Funds’ investments are classified as at fair value through profit or loss.

These include financial assets that are not held for trading purposes and which may be sold. These are investments in exchange traded debt and equity instruments, unlisted trusts, unlisted equity instruments and commercial paper.

Loans and receivables/payables comprise amounts due to or from the Common Funds.

p. 97 of 127


2. Summary of significant accounting policies (continued) (ii) Recognition

The Fund recognises financial assets and financial liabilities on the date it becomes party to the contractual agreement (trade date) and recognises changes in fair value of the financial assets or financial liabilities from this date.

(iii) Measurement

(a) Financial Assets held at fair value through the profit or loss

Financial assets and liabilities are held at fair value through the profit or loss. Investments in pooled funds are recorded at fair value as reported by the managers of such funds. Public Trustee has determined the fair value of financial assets to be market value of these investments at balance date. Accounting Standard AASB 7 Financial Instruments: Disclosures requires disclosure of the measurement methodology used to value financial instruments. Public Trustee invests though fund managers and utilises pricing data provided by those managers which is indirectly derived from the pricing of the underlying securities. Consistent with the definitions in AASB 7 this methodology is classified as level 2 of the fair value hierarchy.

(b) Loans and receivables

Loan assets are measured initially at fair value and subsequently amortised using the effective interest rate method, less impairment losses if any. Such assets are reviewed at each Statement of Financial Position date to determine whether there is objective evidence of impairment for example when there has been a significant or prolonged decline in the fair value below cost.

If any such indication of impairment exists, an impairment loss is recognised in the Statement of Comprehensive Income as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the original effective interest rate.

If in a subsequent period the amount of an impairment loss recognised on a financial asset carried at amortised cost decreases and the decrease can be linked objectively to an event occurring after the write-down, the write-down is reversed through the Statement of Comprehensive Income.

(c) Net assets attributable to unitholders

Units are redeemable at the unitholders' option and are therefore classified as financial liabilities. The units can be returned into the Common Funds at any time for cash equal to a proportionate share of the Common Funds’ net asset values. The fair value of redeemable units is measured at the redemption amount that is payable (based on the redemption unit price) at the Statement of Financial Position date if unitholders exercise their right to return the units back to the Common Funds. For financial reporting purposes and compliance with Australian Accounting Standards assets are recorded at net asset value.

(d) Cash and cash equivalents

For Statement of Cash Flows presentation purposes, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short term highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within liabilities on the Statement of Financial Position.

For all Common Funds (other than Cash Common Fund) cash equivalents include the Funds’ investments in and borrowings from the Cash Common Fund.

Payments and receipts relating to the purchase and sale of investment securities are classified as investing cash flows because the core activity of the Public Trustee is the administration of Trustee Services.

(e) Investment income

Interest income and expenses are recognised in the Statement of Comprehensive Income for all debt instruments using the effective interest method. Other changes in fair value for such instruments are recorded in accordance with the policies described in note 2(b).

p. 98 of 127


2. Summary of significant accounting policies (continued)

The effective interest method is a method of calculating the amortised cost of a financial asset or financial liability and of allocating the interest income or interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts throughout the expected life of the financial instrument, or a shorter period where appropriate, to the net carrying amount of the financial asset or liability. When calculating the effective interest rate, the Fund estimates cash flows considering all contractual terms of the financial instrument (for example, prepayment options) but does not consider future credit losses. The calculation includes all fees between the parties to the contract that are an integral part of the effective interest rate, transaction costs and all other premiums or discounts.

Dividend income is recognised on the ex-dividend date with any related foreign withholding tax recorded as an expense. Dividends declared on securities sold short are recorded as a dividend expense on the ex-dividend date.

Trust distributions are recognised when the right to receive payment is established.

(f) Expenses

All expenses, including management fees, are recognised in the Statement of Comprehensive Income on an accruals basis.

Management fees are charged against each Common Fund at a rate of one-twelfth of one percent of the value of the fund as at the first business day of each month as authorised by the Public Trustee Act 1995.

(g) Income tax

Under current legislation, the Common Funds are not subject to income tax provided the taxable income of the Fund is fully distributed either by way of cash or reinvestment (i.e. unitholders are presently entitled to the income of the Fund).

Financial instruments held at fair value may include unrealised capital gains. Should such a gain be realised, the portion of the gain that is subject to capital gains tax will be distributed so that the Fund is not subject to capital gains tax.

Realised capital losses are not distributed to unitholders but are retained in the Fund to be offset against any realised capital gains. If realised capital gains exceed realised capital losses, the excess is distributed to unitholders.

The benefits of imputation credits and foreign tax paid are passed on to unitholders.

The Fund currently incurs withholding tax imposed by certain countries on investment income. Such income is recorded net of withholding tax in the Statement of Comprehensive Income.

(h) Distributions

Public Trustee distributes Common Fund income and capital based on the financial results at 31 December and 30 June.

Public Trustee recognises Common Fund distributions to client accounts on the date they are paid by Public Trustee. Public Trustee charges clients with income and capital commission on the date the common funds makes a distribution to client accounts and interest earned is credited when received.

The items above are accrued as appropriate in the statutory accounts under Australian Accounting Standards and the distributions are recognised in the Statement of Comprehensive Income as finance costs attributable to unitholders.

(i) Transfers (to)/from net assets to determine distributable income

Non-distributable income is included in net assets attributable to unitholders and may consist of unrealised changes in the net fair value of financial instruments held at fair value through profit or loss, accrued income not yet assessable, expenses provided or accrued for which are not yet deductible, and net capital losses. Net capital gains on the realisation of any financial instruments and accrued income not yet assessable will be included in the determination of distributable income in the same year in which it becomes assessable for tax. Movements in net assets attributable to unitholders are recognised in the Statement of Comprehensive Income as financing costs.

p. 99 of 127


2. Summary of significant accounting policies (continued) (j) Foreign currency translation

i) Functional and presentation currency

Items included in the Common Funds’ financial statements are measured using the currency of the primary economic environment in which it operates (the “functional currency”). This is the Australian dollar, which reflects the currency of the economy in which the Common Funds compete for funds and is regulated. The Australian dollar is also the Fund’s presentation currency.

ii) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translations at year-end exchange rates, of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of Comprehensive Income.

The Funds do not isolate that portion of gains or losses on security financial instruments which is due to changes in foreign exchange rates from that which is due to changes in the market price of securities. Such fluctuations are included with the net gains or losses on financial instruments at fair value through profit or loss.

(k) Receivables

Receivables may include amounts for dividends, interest and trust distributions. Dividends and trust distributions are accrued when the right to receive payment is established. Interest is accrued at the end of each reporting period from the time of last payment using the effective interest rate method. Amounts are generally received within 30 days of being recorded as receivables.

(l) Payables

Payables include liabilities and accrued expenses owing by the Funds which are unpaid as at balance date.

The distribution amount payable to unitholders as at the end of each reporting period is recognised separately on the Statement of Financial Position as unitholders are presently entitled to the distributable income as at 30 June 2013 under the Trust Deed.

(m) Applications and redemptions

Applications received for units in the Common Funds are recorded net of any entry fees payable prior to the issue of units in the Fund. Redemptions from the Fund are recorded gross of any exit fees payable after the cancellation of units redeemed.

(n) Goods and services tax (GST)

The Common Funds are registered entities under the Goods and Services Tax (GST) legislation. Investments in Public Trustee Common Funds are classified as input taxed financial supplies and no GST is charged on such supplies. The GST incurred on the costs of various services provided to the Common Funds by third parties such as management fees have been passed onto the Common Funds. The Common Funds qualify for Reduced Input Tax Credits (RITC) at a rate of 75% hence investment management fees and other expenses have been recognised in the Statement of Comprehensive Income net of the amount of GST recoverable from the Australian Taxation Office (ATO). Accounts payable are inclusive of GST. The net amount of GST recoverable from the ATO is included in receivables in the Statement of Financial Position.

(o) Use of estimates

The Common Funds financial statements include estimates and assumptions that affect the reported amounts of assets and liabilities within the financial year. Estimates are continually evaluated and based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

(p) New accounting standards and interpretations

There are no new accounting standards and interpretations that have been identified that will have a material impact on the Common Funds’ financial statements for the 30 June 2013 reporting period.

p. 100 of 127


2. Summary of significant accounting policies (continued) (q) Rounding of amounts

The Funds are an entity of the kind referred to in Class Order 98/0100 (as amended), issued by the Australian Securities and Investments Commission, relating to the ''rounding off'' of amounts in the financial statements. Amounts in the financial statements have been rounded off to the nearest thousand dollars in accordance with that Class Order, unless otherwise indicated.

3. Net assets attributable to unitholders

Movements in number of units and net assets attributable to unitholders during the year were as follows:

Each unit represents a right to an individual share in the Fund and does not extend to a right to the underlying assets of the Fund. There are no separate classes of units and each unit has the same rights attaching to it as all other units of the Fund.

(a) Common Fund unit prices2013 2012

Common Fund unit prices Purchase Redemption Purchase Redemption at 30 June Price Price Price Price

Short Term Fixed Interest $1.0122 $1.0092 $1.0102 $1.0072Long Term Fixed Interest $1.0458 $1.0426 $1.0461 $1.0429Overseas Fixed Interest $0.8442 $0.8422 $0.8500 $0.8480Australian Shares $1.5035 $1.4951 $1.3146 $1.3073Overseas Shares $1.0620 $1.0563 $0.8117 $0.8073Listed Property Securities $0.9292 $0.9237 $0.8032 $0.7984

(b) Movements in units

Common Fund

2013 2012 2013 2012 2013 2012No. of No. of No. of No. of No. of No. ofunits units units units units units000's 000's 000's 000's 000's 000's

Opening balance 48 456 49 214 85 142 84 555 40 197 40 098 Applications 3 705 3 455 6 585 7 429 3 173 3 442 Redemptions (4 080) (4 213) (6 568) (6 842) (3 189) (3 343) Closing balance 48 081 48 456 85 159 85 142 40 181 40 197

Common Fund

2013 2012 2013 2012 2013 2012No. of No. of No. of No. of No. of No. ofunits units units units units units000's 000's 000's 000's 000's 000's

Opening balance 109 002 108 614 128 144 127 608 54 800 54 429 Applications 6 831 7 430 7 738 8 523 3 792 4 466 Redemptions (7 069) (7 042) (8 126) (7 987) (4 078) (4 095) Closing balance 108 764 109 002 127 756 128 144 54 514 54 800







p. 101 of 127


3. Net assets attributable to unitholders (continued)

(c) Movements in funds employed

Common Fund

2013 2012 2013 2012 2013 2012 2013 2012$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000

Opening balance 332 032 307 796 48 879 49 253 88 933 86 439 34 122 32 908 Applications 12 005 24 055 3 752 3 466 6 935 7 626 2 771 2 865 Redemptions 1 - - (4 120) (4 221) (6 900) (7 037) (2 785) (2 825) Increase/(decrease) in net assets attributable to unitholders 2 368 181 84 381 ( 45) 1 905 ( 236) 1 174 Closing balance 346 405 332 032 48 595 48 879 88 923 88 933 33 872 34 122

Common Fund

2013 2012 2013 2012 2013 2012$'000 $'000 $'000 $'000 $'000 $'000

Opening balance 142 863 159 411 103 653 103 164 43 833 41 939 Applications 9 983 10 468 6 857 6 773 3 292 3 418 Redemptions (10 539) (9 669) (7 412) (6 290) (3 620) (3 084) Increase/(decrease) in net assets attributable to unitholders 20 746 (17 347) 32 109 6 6 958 1 560 Closing balance 163 053 142 863 135 207 103 653 50 463 43 833

Overseas Fixed Interest Common

Fund



Listed Property Securities Common

Fund

Cash Common Fund Short Term Fixed Interest Common

Fund

Long Term Fixed Interest Common

Fund

1 A net movement in net assets attributable to unitholders funds is reported for the Cash Common Fund. This fund is the primary working account for trust administration operations. Movements in net assets attributable to unitholders are typically high volume, low value transactions.

(d) Net realised and unrealised gains (losses) on financial assets

2013 2012 2013 2012$'000 $'000 $'000 $'000

Cash 2 360 190 9 (9) Short Term Fixed Interest 129 382 (45) (1) Long Term Fixed Interest ( 29) 2 019 (16) (114) Overseas Fixed Interest ( 236) 1 174 - - Australian Shares 20 746 (17 347) - - Overseas Shares 31 203 4 322 - (4,518) Listed Property Securities 4 139 1 560 1 480 -

58 312 (7 700) 1 428 (4 642)

Net Unrealised Gains (Losses)

Net Realised Gains (Losses)

p. 102 of 127


4. Distributions to unitholders

Timing of distributionsThe distributions, including cents per unit (CPU), were paid/payable as follows:

Cash Common Fund2013 2013 2012 2012$'000 CPU $'000 CPU

Distributions paid 15 946 0.0464 19 586 0.0502 Undistributable income brought forward (1 966) - (2 066) - Distributions payable 1 497 - 1 966 -

15 477 19 486

Short Term Fixed Interest Common Fund2013 2013 2012 2012$'000 CPU $'000 CPU

Distributions paid 2 218 0.0461 2 399 0.0495 Undistributable income brought forward (1 185) - (1 074) - Distributions payable 892 - 1 185 -

1 925 2 510

Long Term Fixed Interest Common Fund2013 2013 2012 2012$'000 CPU $'000 CPU


3 639 4 310

Overseas Fixed Interest Common Fund2013 2013 2012 2012$'000 CPU $'000 CPU


1 463 1 756

Australian Shares Common Fund2013 2013 2012 2012$'000 CPU $'000 CPU


6 200 5 733

p. 103 of 127


4. Distributions to unitholders (continued)

Overseas Shares Common Fund2013 2013 2012 2012$'000 CPU $'000 CPU


778 1 846

Listed Property Securities Common Fund2013 2013 2012 2012$'000 CPU $'000 CPU


1 147 2 112 In accordance with the Public Trustee Act 1995, investors received a proportionate distribution of net income depending on the number of days units were held. Included in the distribution at 30 June 2013 were net realised capital gains of 0.0102 (2012: 0.0049) cents per unit which was distributed to unitholders based on the number of units held as at 30 June 2013 for the Australian Shares Common Fund.

p. 104 of 127


5. Cash and cash equivalents

Cash Common Fund 2013 2012$'000 $'000

Cash at bank 110 49 Money market instruments 5 000 5 000 Bank overdraft - (1 713)

5 110 3 336

Short Term Fixed Interest Common Fund 2013 2012$'000 $'000

Deposits in Cash Common Fund 21 478 15 339 21 478 15 339

Long Term Fixed Interest Common Fund 2013 2012$'000 $'000


Australian Shares Common Fund 2013 2012$'000 $'000


Overseas Fixed Interest Common Fund 2013 2012$'000 $'000


Overseas Shares Common Fund 2013 2012$'000 $'000


Listed Property Securities Common Fund 2013 2012$'000 $'000


p. 105 of 127


5. Cash and Cash Equivalents (continued)

(a) Cash at bank and on hand

The cash deposit is held with a financial institution and is interest bearing at 2.61% (2012:3.41%) per annum as at 30 June 2013 available at call.

(b) Bank overdraft

There was no bank overdraft held as at 30 June 2013. The reported bank overdraft as at 30 June 2012 ($1.71 million) is a total of the bank balance less the unpresented cheques. Public Trustee actively manages the Westpac banking account to ensure a positive balance is maintained.

(c) Money market instruments

These investments bear floating interest rates between 3.67% and 8.14% (2012: 4.67% and 8.14%). These investments are available at call.

(d) Deposits in Cash Common Fund

Deposits in the Cash Common Fund act as operating cash accounts for the other Common Funds, and are interest bearing. These investments are available at call.

(e) Advances to other Common Funds / borrowings from Cash Common Fund

There were no advances from the Cash Common Fund to other Common Funds for the period to 30 June 2013.

p. 106 of 127


6. Financial assets held at fair value through profit and loss

2013 2012 2013 2012Fair Value Fair Value Fair Value Fair Value

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

Designated as at fair value through profit or lossFixed interest securities 1 388 172 383 991 27 602 34 168 Unlisted unit trusts - - - - Total designated as at fair value through profit or loss 388 172 383 991 27 602 34 168


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

Designated as at fair value through profit or lossFixed interest securities 78 880 65 927 - - Unlisted unit trusts - - 157 028 134 595 Total designated as at fair value through profit or loss 78 880 65 927 157 028 134 595


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

Designated as at fair value through profit or lossFixed interest securities - - - - Unlisted unit trusts 23 617 23 704 129 658 98 193 Total designated as at fair value through profit or loss 23 617 23 704 129 658 98 193

2013 2012Fair Value Fair Value

$'000 $'000

Designated as at fair value through profit or lossFixed interest securities - - Unlisted unit trusts 48 569 42 966 Total designated as at fair value through profit or loss 48 569 42 966

An overview of the risk exposures relating to financial assets at fair value through profit or loss is included in note 9.

Common FundsCash Short Term Fixed Interest

Listed Property Securities

Long Term Fixed Interest Australian Shares

Overseas Fixed Interest Overseas Shares

1 Includes other common funds deposits in cash common fund of $55 146 (2012: $64 789).

p. 107 of 127


7. Revenue and assets for entities within the SA Government

2013 2012$'000 $'000

Public Trustee Common Fund Distributions 7 900 8 989 Refunds & Reimbursements 599 529 Gain / (Loss) on Public Trustee Common Funds - - Total revenue for entities within SA Government 8 499 9 518

Public Trustee Common Funds 225 951 196 685 Total assets for entities within SA Government 225 951 196 685 Public Trustee administers funds on behalf of a number of government entities that invest in the Common Funds. 8. Derivative financial instruments

Public Trustee did not invest in derivative investments for the year ended 30 June 2013.

9. Financial risk management

Public Trustee’s Common Fund activities expose it to a variety of financial risks: market risk (including interest rate risk and price risk), credit risk and liquidity risk. The overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on financial performance. Only Australian domiciled pooled funds are used for overseas asset purchases. In terms of currency exposure, the Overseas Fixed Interest Common Fund is 100% hedged and the Overseas Shares Common Fund is 50% hedged which reduces currency volatility. The Manager, Investment Services is responsible for ensuring that all investments entered into are within the guidelines specified by Public Trustee’s Investment Guidelines and Procedures Manual. The Manager, Investment Services may recommend to the Public Trustee and the Public Trustee may, after consultation with the Investment Advisory Committee, approve investments outside of Public Trustee Investment Guidelines.

(a) Credit risk

Credit risk arises from cash and cash equivalents, deposits with banks and financial institutions, as well as credit exposures to outstanding receivables and committed transactions.

Short-term money market instruments must have a short-term Standard and Poors (S&P) rating of A1 or in the case of the issuer being a bank under the Banking Act 1959 a rating of A2 is accepted. Floating rate instruments must have a long-term S&P credit rating of A+ or better or where the counter party is a bank under the Banking Act 1959, a rating of BBB or better is accepted. Long-term investments must have long-term S&P credit ratings of A+ or better or be an investment in a Commonwealth or Semi-government bond. If there is no independent rating, Public Trustee assesses the credit quality of the provider, taking into account its financial position and past experience.

Credit risk arises primarily with the following classes of instruments and counterparties:

Sovereign debt of the Australian Commonwealth and State Governments Sovereign debt of the foreign governments Banking corporations Corporate debt of investment grade Pooled Investment Funds

The maximum exposure to credit risk at the end of each reporting period is the carrying amount of the financial assets.

The credit quality of financial assets that are neither past due nor impaired are assessed by reference to external credit ratings (if available) or to historical information about counterparty default rates.

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9. Financial risk management (continued) Pooled Fund Investments are not rated, however, Public Trustee makes a thorough assessment of all Pooled Fund Managers in regard to credit and other risks prior to the investment of funds with each manager. The credit risk lies with the Pooled Fund Manager responsible for the management of the underlying investments. Public Trustee continually monitors these assessments.

Credit Risk Analysis2013 2012

$'000 $'000Cash Common FundCash and short term investmentsA1+ 81 500 168 977 A1 128 033 79 000 A2 44 500 35 997 Cash at bank 5 110 5 049

259 143 289 023 Long term investmentsAA 4 524 7 392 AA- 103 845 69 776 A- 10 250 9 795 A - 6 065 A+ 15 003 6 989 BBB+ 517 -

134 139 100 017

Short Term Fixed Interest Common FundCash and short term investmentsAAA 2 027 - AA2 - 2 000 A1+ - 3 518 A1 2 513 3 006 A+ - - A2 2 000 7 497 BBB+ - - Cash at Bank 21 478 15 339

28 018 31 360 Long term investments

AAA 2 000 5 426 AA+ 2 109 - AA 5 424 2 000 AA- 7 965 8 210 A - 2 511 A- 2 013 - BBB+ 1 551 -

21 062 18 147

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9. Financial risk management (continued)

Long Term Fixed Interest Common FundCash and short term investmentsAAA 7 090 - AA2 - 2 000 A1+ 3 014 4 997 A1+ 2 000 - A2 2 000 - Cash at Bank 10 849 24 128

24 953 31 125 Long term investmentsAAA 17 763 10 641 AA+ 20 165 10 762 AA 14 408 14 494 AA- 12 440 16 976 A+ - 3 998 A - 1 000 BBB+ - 1 059

64 776 58 930

2013 2012$'000 $'000

Overseas Fixed Interest Common FundCash 10 488 10 639

Australian Shares Common FundCash 6 454 8 436

Overseas Shares Common FundCash 4 350 4 986

Listed Property Securities Common FundCash 1 527 1 261

(b) Market risk

(i) Price risk

The Australian Shares Common Fund, Overseas Shares Common Fund and the Listed Property Securities Common Fund are exposed to equity securities price risk. This arises from investments held by Public Trustee and classified in the Statement of Financial Position as financial assets at fair value through the profit or loss. Public Trustee is not exposed to commodity price risk.

To manage its price risk arising from investments in equity securities, Public Trustee diversifies its portfolio. Diversification of the portfolio is in accordance with Public Trustee’s Investment Guidelines. Irrespective of what type of investment vehicle is used, the primary focus is to ensure the risk/reward objectives of Public Trustee’s investment approach are met. The Common Funds comprise a number of sub-portfolios which invest in different sectors of the equity market.

The Australian Shares Common Fund invests primarily in Top 300 ASX Companies. The remaining investments are in companies outside of the Top 100, with the Australian Shares Common Fund portfolio consisting of listed shares, convertible notes, instalment receipts, preference shares and options. No derivative products are permitted under Public Trustee’s Investment Guidelines. Equities in the Overseas Shares Common Fund consist of investments through Australian domiciled-pooled funds that obviate exposure to currency price risk. An “active” approach is used by the fund utilising a variety of fund managers with different investment styles. This provides diversification benefits and reduces the overall level of risk.

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The Listed Property Securities Common Fund primarily invests in listed securities including exchange traded options from the Property Trust sector of any Australian or overseas stock exchange or any listed company whose major activity is in real properties.

(ii) Cash flow and interest rate risk

Public Trustee is exposed to interest rate risk arising from cash investments, short term investments and Australian fixed interest investments. Instruments issued at fixed interest rates expose Public Trustee to fair value interest rate risk and variable rate instruments expose Public Trustee to cash flow interest rate risk.

The Cash Common Fund can invest in short term money market instruments with up to one year maturity, floating rate investment instruments with maturity terms up to 10 years if the counterparty is a bank with a credit rating of A- or better or fixed interest instruments with maturity terms up to 3 years. Securities with greater than one year maturity are restricted to make up less than 20% of the overall fund.

The Short Term Fixed Interest Common Fund can invest in fixed interest securities with maturity terms of three years if the credit rating is A+ or better, or a maturity term of up to 6 years for Commonwealth bonds, Semi-government bonds. The Long Term Fixed Interest Common Fund invests in securities with maturities ranging from 5 years to 25 years.

(iii) Foreign exchange risk

The Overseas Fixed Interest Common Fund and the Overseas Shares Common Fund are indirectly exposed to foreign exchange risk as a result of their investments in other unit trusts which in turn invest in financial instruments that are denominated in foreign currencies. A sensitivity analysis is provided below, outlining the exposure to each type of market risk at the end of each reporting period, showing how profit or loss and equity would have been affected by the changes in the relevant risk variable that was reasonably possible at that date. All instruments are designated as financial assets at fair value through the profit or loss; resulting in no impact on equity.

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9. Financial risk management (continued) - sensitivity analysis

Cash Common Fund

- + - +1% 1% 20% 10%

Carrying Amount

Profit & Loss

Profit & Loss

Profit & Loss

Profit & Loss

$'000 $'000 $'000 $'000 $'000Financial assetsCash & cash equivalents 5 110 ( 51) 51 - - Financial assets held at fair value through profit or loss 388 172 (3 882) 3 882 - -

Financial liabilitiesBank overdraft - - - - - Total (decrease) increase (3 933) 3 933 - -

- + - +1% 1% 20% 10%

Carrying Amount

Profit & Loss

Profit & Loss

Profit & Loss

Profit & Loss

$'000 $'000 $'000 $'000 $'000Financial assetsCash & cash equivalents 5 049 ( 50) 50 - - Financial assets held at fair value through profit or loss 383 991 (3 840) 3 840 - -

Financial liab ilitiesBank overdraft 1 713 17 ( 17) - - Total (decrease) increase (3 873) 3 873 - -


- + - +1% 1% 20% 10%

Carrying Amount

Profit & Loss

Profit & Loss

Profit & Loss

Profit & Loss

$'000 $'000 $'000 $'000 $'000Financial assetsDeposits with Cash Common Fund 21 478 ( 215) 215 - - Financial assets held at fair value through profit or loss 27 602 ( 276) 276 - - Total (decrease) increase ( 491) 491 - -

- + - +1% 1% 20% 10%

Carrying Amount

Profit & Loss

Profit & Loss

Profit & Loss

Profit & Loss


Interest Rate Risk Price Risk

Interest rate risk


Price risk2013

2012

2013

2012

Interest rate risk Price risk

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- + - +1% 1% 20% 10%

Carrying Amount

Profit & Loss

Profit & Loss

Profit & Loss

Profit & Loss


- + - +1% 1% 20% 10%

Carrying Amount

Profit & Loss

Profit & Loss

Profit & Loss

Profit & Loss



- + - +1% 1% 20% 10%

Carrying Amount

Profit & Loss

Profit & Loss

Profit & Loss

Profit & Loss

$'000 $'000 $'000 $'000 $'000Financial assetsDeposits with Cash Common Fund 10 488 ( 105) 105 - - Financial assets held at fair value through profit or loss 23 617 - - (4 723) 2 362 Total (decrease) increase ( 105) 105 (4 723) 2 362

- + - +1% 1% 20% 10%

Carrying Amount

Profit & Loss

Profit & Loss

Profit & Loss

Profit & Loss




2012

2012


2013

Interest Rate Risk Price Risk2013

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- + - +1% 1% 20% 10%

Carrying Amount

Profit & Loss

Profit & Loss

Profit & Loss

Profit & Loss


- + - +1% 1% 20% 10%

Carrying Amount

Profit & Loss

Profit & Loss

Profit & Loss

Profit & Loss



- + - +1% 1% 20% 10%

Carrying Amount

Profit & Loss

Profit & Loss

Profit & Loss

Profit & Loss


- + - +1% 1% 20% 10%

Carrying Amount

Profit & Loss

Profit & Loss

Profit & Loss

Profit & Loss


2012Interest Rate Risk Price Risk

2013

Interest Rate Risk Price Risk2013



2012

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- + - +1% 1% 20% 10%

Carrying Amount

Profit & Loss

Profit & Loss

Profit & Loss

Profit & Loss


- + - +1% 1% 20% 10%

Carrying Amount

Profit & Loss

Profit & Loss

Profit & Loss

Profit & Loss



2013Interest Rate Risk Price Risk

2012

(c) Liquidity risk

Public Trustee has working capital policies in place in order to maintain liquidity for clients. Short-term investment analysis assists in determining the amount, if any, to be invested or reinvested in order to maintain working capital. Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, and the ability to close out market positions. Public Trustee manages the liquidity risk by continuously monitoring forecast and actual cash flows and matching maturity profiles of financial assets and liabilities.

(d) Fair value estimation

The fair value of financial assets and financial liabilities are estimated for recognition and measurement or for disclosure purposes. The fair value of these assets and liabilities is equal to their carrying amount.

Cash and cash equivalents are valued at nominal amounts. This asset consists of cash at bank, on hand and short-term money market deposits with maturities of three months or less that is readily converted to cash and which are subject to insignificant risk of changes in value.

Financial assets and liabilities are held at fair value through the profit or loss. Investments in pooled funds are recorded at fair value as reported by the managers of such funds. Public Trustee has determined the fair value of financial assets to be market value of these investments at balance date. Accounting Standard AASB 7 Financial Instruments: Disclosures requires disclosure of the measurement methodology used to value financial instruments. Public Trustee invests though fund managers and utilises pricing data provided by those managers which is indirectly derived from the pricing of the underlying securities. Consistent with the definitions in AASB 7 this methodology is classified as level 2 of the fair value hierarchy. Receivables and payables are valued on a historical cost basis and Public Trustee considers that the carrying value approximates market value.

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10. Cash flow reconciliation

Cash Common Fund 2013 2012$'000 $'000

(a) Reconciliation of cash and cash equivalentsStatement of Cash Flows 5 110 3 336 Statement of Financial Position 5 110 3 336

(b) Reconciliation of profit/loss to net cash provided by (used in) operating activities:Net operating profit for the year 17 846 19 667 Non-cash operating activitiesNet (gains) on financial instruments held at fair value through profit or loss (2 369) ( 181) Amortisation of discounts and premiums ( 83) ( 325) Movement in assets and liabilitiesDecrease in receivables and other assets 627 241 Increase/(decrease) in payables and other liabilities 30 ( 15) Adjustment for balance day transactions ( 132) 2 Net cash provided by operating activities 15 919 19 389

Short Term Fixed Interest Common Fund 2013 2012$'000 $'000


(b) Reconciliation of profit/loss to net cash provided by (used in) operating activities:Net operating profit for the year 2 009 2 891 Non-cash operating activitiesNet (gains) on financial instruments held at fair value through profit or loss ( 84) ( 381) Amortisation of discounts and premiums 29 ( 70) Movement in assets and liabilitiesDecrease/(increase) in receivables and other assets 148 ( 240) Increase/(decrease) in payables and other liabilities 2 ( 4) Net cash provided by operating activities 2 104 2 196

Long Term Fixed Interest Common Fund 2013 2012$'000 $'000


(b) Reconciliation of profit/loss to net cash provided by (used in) operating activities:Net operating profit for the year 3 594 6 215 Non-cash operating activitiesNet losses/(gains) on financial instruments held at fair value through profit or loss 45 (1 905) Amortisation of discounts and premiums 78 ( 58) Movement in assets and liabilities(Increase) in receivables and other assets ( 7) ( 157) Increase/(decrease) in payables and other liabilities 5 ( 6) Net cash provided by operating activities 3 715 4 089

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10. Cash flow reconciliation (continued)

Overseas Fixed Interest Common Fund 2013 2012$'000 $'000


(b) Reconciliation of profit/loss to net cash provided by (used in) operating activities:Net operating profit for the year 1 227 2 930 Non-cash operating activitiesNet losses/(gains) on financial instruments held at fair value through profit or loss 236 (1 174) Income reinvested and not received in cash ( 150) ( 144) Movement in assets and liabilitiesDecrease in receivables and other assets 606 2 038 Increase/(decrease) in payables and other liabilities 1 ( 2) Net cash provided by operating activities 1 920 3 648

Australian Shares Common Fund 2013 2012$'000 $'000


(b) Reconciliation of profit/loss to net cash provided by (used in) operating activities:Net operating profit/(loss) for the year 26 946 (11 614) Non-cash operating activitiesNet (gains)/losses on financial instruments held at fair value through profit or loss (20 746) 17 347 Income reinvested and not received in cash (1 688) ( 869) Movement in assets and liabilities(Increase)/decrease in receivables and other assets ( 80) 6 332 Increase/(decrease) in payables and other liabilities 10 ( 14) Net cash provided by operating activities 4 442 11 182

Overseas Shares Common Fund 2013 2012$'000 $'000


(b) Reconciliation of profit/loss to net cash provided by (used in) operating activities:Net operating profit for the year 32 887 1 852 Non-cash operating activitiesNet (gains)/losses on financial instruments held at fair value through profit or loss (31 203) 196 Income reinvested and not received in cash ( 262) ( 284) Movement in assets and liabilitiesDecrease in receivables and other assets 452 3 740 Increase/(decrease) in payables and other liabilities 7 ( 8) Net cash provided by operating activities 1 881 5 496

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10. Cash flow reconciliation (continued)

Listed Property Securities Common Fund 2013 2012$'000 $'000


(b) Reconciliation of profit/loss to net cash provided by (used in) operating activities:Net operating profit for the year 8 105 3 672 Non-cash operating activitiesNet (gains) on financial instruments held at fair value through profit or loss (5 619) (1 560) Income reinvested and not received in cash ( 139) ( 154) Movement in assets and liabilities(Increase)/decrease in receivables and other assets ( 187) 179 Increase/(decrease) in payables and other liabilities 3 ( 4) Net cash provided by operating activities 2 163 2 133

11. Events occurring after balance date

Public Trustee has initiated the closure of Self Managed Superannuation Funds (SMSF’s) managed on behalf of clients. These funds will be transferred to a registered superannuation provider during the 2013/14 financial year.

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Appendix 1: Common Funds Statutory Information Section 30(3) of the Public Trustee Act 1995 requires certain information about each Common Fund operated by the Public Trustee to be included within the Annual Report. Below are the locations of the required information (where the information is not included in this Appendix): Audited Statement of Accounts in respect of each Common Fund Refer to the Corporate and Customer Financial Information section of this report. The Auditor-General’s Report upon the Statements of Account Refer to the Corporate and Customer Financial Information section of this report. The nature and amount of any fee that Public Trustee charges in respect of investment in the Common Funds Management fee A management fee is charged against money invested in each Common Fund at the rate of one-twelfth of 1.025% (inc. of GST) of the value of the fund as at the first business day of each month. Management fees attract GST at a reduced rate as there is an entitlement to claim a reduced input tax credit. Goods and Services Tax An investment in Public Trustee’s common funds is classified as an input-taxed financial supply and no GST is charged on such supplies. Simply put, investments made in common funds and investor withdrawals from those funds are not subject to GST; nor are entry fees subject to GST. If a supply is input-taxed, the supplier will not usually receive a tax credit for any GST incurred in connection with the supplier’s expenses. However, for financial supplies, the supplier is able to claim a tax credit for three quarters of the liability incurred in respect of certain expenses (this is called a reduced input tax credit). The majority of expenses incurred by Public Trustee’s common funds, including Public Trustee management fees, brokerage charges and custody fees, are eligible for the reduced input tax credit. The net impact of the GST on expenses incurred by the common funds is therefore approximately 2.5% rather than the full 10% rate. Indirect Cost Ratios (formerly Management Expense Ratio) The total funds management costs for Common Funds and Standard Investment Strategies, as represented by Indirect Cost Ratios, are shown in the following table. These figures are inclusive of the net impact of GST.

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Table 24: Standard Investment Strategies Indirect Cost Ratios 2012–13 Standard Investment Strategies

Indirect Cost Ratios (ICR)

Standard Investment Strategies ICRs

Strategy ICR 2012–13 ICR 2011–12

Cash 1.08% 1.09%

Capital Stable 1.25% 1.24%

Balanced 1.40% 1.39%

Growth 1.52% 1.52%

Equities 1.72% 1.72%

Common Fund ICR 2012–13 ICR 2011–12

Cash 1.08% 1.09%

Long-term Fixed Interest 1.09% 1.10%

Short-term Fixed Interest 1.08% 1.09%

Overseas Fixed Interest 1.16% 1.16%

Australian Shares 1.68% 1.69%

Listed Property Securities 1.62% 1.66%

Overseas Shares 1.77% 1.77%

Fees In accordance with the Public Trustee Act 1995, Section 29, investors pay the following fees when investing in Common Funds (NB no fees are charged on entry or exit from the Cash Common Fund): All other standard investment strategies For beneficiaries of estates administered by Public Trustee, where there is a change of

ownership of the assets and when funds would otherwise be distributed: Amounts up to $500 000 0.5% Additional amounts from $500 000 to $2 million 0.375% Additional amounts from $2 million to $5 million 0.25% Additional amounts above $5 million 0%

For beneficiaries of estates administered by Public Trustee where there is no change of ownership of the assets and when funds would otherwise be distributed: No entry fee will apply except to additional funds invested, in which case the above reduced scale for the beneficiary investors will apply.

For all other investors:

Amounts up to $500 000 1.0% Additional amounts from $500 000 to $2 million 0.75% Additional amounts from $2 million to $5 million 0.5% Additional amounts above $5 million 0%

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The above fees will also apply to distributed income and realised capital gains when they are re-invested in a strategy other than cash. No exit fees are charged. No switching fees will be charged except when moving monies from the Cash Strategy to another investment strategy. The above fees will then apply. Deposits Public Trustee does not accept cash deposits. Investments in Investment Strategies may be made by either cheque, direct credit or by transfer of funds from an existing estate being administered by Public Trustee. Identification When establishing an investment account with Public Trustee, customers may be required to provide satisfactory proof of identity. A Public Trustee contact officer will explain identification requirements. The extent to which a capital sum invested may be reduced to defray losses from investment of a Common Fund Realised or unrealised losses of a capital nature of an investment of a Common Fund shall be received or borne by investors, in proportion to the capital sums invested in the fund. Rights of an investor in a Common Fund to withdraw all or part of a person’s investment in the fund Investors may withdraw all or part of their investment in a fund at any time. Part withdrawals must be in amounts of $1 000 or greater, or the balance of the funds being managed, if the amount to be withdrawn reduces the remaining balance to less than $5 000. Proceeds of withdrawals from the Cash Common Fund of amounts less than $1 million will be available on the next business day. Proceeds of withdrawals of amounts greater than $1 million may not be available until the thirtieth business day.

Proceeds of withdrawals from Investment Strategies, other than the Cash Investment Strategy Fund, will not be available until 15 business days after the next exit day (currently the first day of each month). Proceeds of withdrawals of amounts greater than $1 million from these Investment Strategies may not be available until the thirtieth business day after the next exit day. Terms governing distribution of income and profit or loss of a capital nature attributable to each investment in a Common Fund The net income and realised capital gains of each fund are calculated to 30 June and 31 December and will be distributed to the investor in July and January of each year, unless the investor has given instructions to reinvest the money.

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Classes of investment in which Common Funds may invest Introduction Section 29 of the Public Trustee Act 1995 (‘the Act”) requires the Public Trustee to determine the classes of investments in which a Common Fund may be invested, and provides for these classes to be varied from time to time. The Act does not define classes of investment. Determination of the classes of investment in which Public Trustee Common Funds may invest Cash Common Fund The permitted classes of investment are: a. Cash b. Fixed Interest Qualifications on these investment classes:

i. All investments shall be denominated in Australian dollars. ii. Fixed rate securities shall not exceed three years to maturity. iii. Floating rate securities shall not exceed 10 years to maturity.

The following class of investment is explicitly excluded: Derivatives. The fund may invest in collective investment schemes operated by organisations approved by the relevant government agencies, provided that the rules of the collective investment schemes restrict the schemes’ investments to the permitted classes of investment of the Common Fund. Short-term Fixed Interest Common Fund The permitted classes of investment are: a. Cash b. Fixed Interest Qualifications on these investment classes:

i. All investments shall be denominated in Australian dollars. The fund’s liquidity requirements will be managed by an investment in the Cash Common Fund.

ii. Fixed rate securities shall not exceed five years to maturity. iii. Floating rate securities shall not exceed 10 years to maturity.

Security lending arrangements in relation to authorised investments are permitted. The following class of investment is explicitly excluded: Derivatives. The fund may invest in collective investment schemes operated by organisations approved by the relevant government agencies, provided that the rules of the collective investment schemes restrict the schemes' investments to the permitted classes of investment of the Common Fund. Long-term Fixed Interest Common Fund The permitted classes of investment are: a. Cash b. Fixed Interest c. Inflation-linked Securities

p. 123 of 127


Qualifications on these investment classes: i. All investments shall be denominated in Australian dollars. ii. The fund's liquidity requirements will be met by investment in the Cash Common

Fund. iii. Fixed rate securities and inflation-linked securities shall not exceed 15 years and 25

years to maturity, respectively. iv. Inflation-linked securities shall be restricted to consumer inflation or average weekly

earnings-linked securities issued by the Commonwealth Government, State Governments or the Government of Northern Territory, and securities issued by other parties where the payments to holders of the securities are guaranteed by these governments.

v. Security lending arrangements in relation to authorised investments are permitted. The following class of investment is explicitly excluded: Derivatives The fund may invest in collective investment schemes operated by organisations approved by the relevant government agencies, provided that the rules or the collective investment schemes restrict the schemes' investments to the permitted classes of investment of the Common Fund. Australian Shares Common Fund The classes of investment are: a. Cash b. Australian equities c. Derivatives Qualifications on these investment classes:

i. Fund liquidity requirements shall be met by investment in the Cash Common Fund. ii. Investments in Australian Equities shall be limited to securities of companies and

trusts listed on the Australian Stock Exchange, and to unlisted securities in companies and trusts where the intention is for these securities to be listed within six months of investment.

iii. Small capitalisation companies, defined as those outside the Top 100 Sector of the Australian Stock Exchange's All Ordinaries Index, shall not exceed 20% of the fund's assets.

iv. Underwriting is permitted only where Public Trustee has made a firm subscription to a new issue and the amount underwritten does not exceed the subscription amount.

v. Underwriting as an investment instrument is prohibited. vi. Security lending arrangements in relation to authorised investments is permitted. vii. Investments in financial derivatives specifically relating to the investments of the fund

are permitted for the purpose of: investment of funds; or hedging or otherwise managing the risk of the fund.

The fund may invest in collective investment schemes operated by organisations approved by the relevant government agencies, provided that the rules of the collective investment schemes restrict the schemes' investments to the permitted classes of investment of the Common Fund. Listed Property Securities Common Fund The classes of investment are: a. Cash b. Property.

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Qualifications on these investment classes: i. Fund liquidity requirements shall be met by investment in the Cash Common Fund. ii. Investments in property shall be limited to securities of companies and trusts listed on

the Australian and overseas stock exchanges, and to unlisted securities in companies and trusts where the intention is for these securities to be listed within six months of investment.

iii. Underwriting is permitted only where Public Trustee has made a firm subscription to a new issue and the amount underwritten does not exceed the subscription amount.

iv. Security lending arrangements in relation to authorised investments are permitted. The following class of investment is explicitly excluded: Derivatives. The fund may invest in collective investment schemes operated by organisations approved by the relevant government agencies, provided that the rules of the collective investment schemes restrict the schemes' investments to the permitted classes of investment of the Common Fund. Overseas Shares Common Fund The classes of investment are: a. Cash b. International Equities c. Derivatives. Qualifications on these investment classes:

i. Fund liquidity requirements shall be met by investment in the Cash Common Fund. ii. Cash, where held other than by investment in the Cash Common Fund, shall be held

as bank deposits, bank-guaranteed securities or short-term sovereign debt instruments.

iii. Trading in inter-bank or over-the-counter markets shall occur only in those markets which have been approved by the relevant government agencies of the country in which the market is conducted.

iv. Investments in collective investment schemes, the primary mandates of which are the holdings of smaller companies and emerging markets securities, shall not exceed 25% and 15% of the assets of this Common Fund, respectively.

v. Underwriting is permitted only where Public Trustee (either directly or via an appointed custodian) has made a firm subscription to a new issue and the amount underwritten does not exceed the subscription amount.

vi. Security lending arrangements in relation to authorised investments are permitted. vii. Investments in financial derivatives specifically relating to the investments of the fund

are permitted for the purpose of: investment of funds; or hedging or otherwise managing the risk of the fund.

The fund may invest in collective investment schemes operated by organisations approved by the relevant government agencies, provided that the rules of the collective investment schemes restrict the schemes' investments to the permitted classes of investment of the Common Fund. Overseas Fixed Interest Common Fund The permitted classes of investment are: a. Cash b. International Fixed Interest c. Derivatives

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Qualifications on these investment classes: i. The fund's liquidity requirements shall be met by investment in the Cash Common

Fund. ii. Cash, where held other than by investment in the Cash Common Fund, shall be held

as bank deposits, bank-guaranteed securities or short-term sovereign debt instruments.

iii. All fixed income securities must be rated by recognised rating agencies and at least 90% of the fund shall comprise investment-grade securities.

iv. Investments in financial derivatives specifically relating to the investments of the fund are permitted for the purpose of: investment of funds; or hedging or otherwise managing the risk of the fund.

The fund may invest in collective investment schemes operated by organisations approved by the relevant government agencies, provided that the rules of the collective investment schemes restrict the schemes' investments to the permitted classes of investment of the Common Fund. [Report ends]

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Public Trustee

211 Victoria Square Adelaide SA 5000

www.publictrustee.sa.gov.au

Tel: 08-8226 9200 Fax: 08-8226 9350
