Public Trustee · Trustee will print and forward copies of the Parliamentary format version upon request to ... Training and Development ... Corporate Financial Overview 2014–15

Public Trustee Annual Report 2014–15

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P U B L I C TR U S T E E GPO Box 1338 Adelaide South Australia 5001 | T 08 8226 9200 | F 08 8226 9350

Country freecall 1800 673 119 | www.publictrustee.sa.gov.au


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Prepared by Public Trustee Corporate Services - Communications Public Trustee 211 Victoria Square Adelaide SA 5000 www.publictrustee.sa.gov.au Email: [email protected] Tel: 08-8226 9200 Fax: 08-8226 9350 ABN: 72-906-921-697 ISSN: 1441-2799 (Print) ISSN: 1836-263X (Online)

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

mailto:[email protected]


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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 2014–15

Pursuant to Section 51 of the Public Trustee Act 1995, I present the Annual Report on the operations of Public Trustee and the financial outcome for the year 2014–15. The report is provided to you in Parliamentary document format, suitable for presentation before both Houses of Parliament and also electronically. Once approved in Parliament, the report will be uploaded on Public Trustee‘s website in both a print-friendly format and in compliance with website disability access standards. Public Trustee will print and forward copies of the Parliamentary format version upon request to members of the South Australian community 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 2015. Original signed 23 September 2015 Debra Contala Public Trustee 23 September 2015

MINUTES forming enclosure to: PTCR15/009


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Table of contents The Year in Review ............................................................................................................... 7 Our Performance Highlights .................................................................................................. 9 Priorities for 2015–16 ...........................................................................................................13 Our Commitment to South Australia .....................................................................................15

Public Trustee Strategic Plan 2014–17 .............................................................................17 Relationship to the Attorney-General's Department (AGD) Strategic Directions ...................19 Customer Service .................................................................................................................21

2015 Customer Satisfaction Survey ..................................................................................21 Responding to Customer Feedback ..................................................................................24 Preparing Will and Power of Attorney Documents .............................................................24 Deceased Estate Administration – Unclaimed Money .......................................................26 Trust Services ...................................................................................................................26 Customer Relationships Team ..........................................................................................27 Personal Estates ...............................................................................................................27 Monitoring Private Administrators and Managers ..............................................................28 Legal Section ....................................................................................................................29 Taxation Services .............................................................................................................30 Real Estate and Property Management ............................................................................30

Governance and Leadership ................................................................................................31 Governance ......................................................................................................................31 Boards and Committees ...................................................................................................33 Organisation Chart ............................................................................................................36

Business Improvement .........................................................................................................37 People and Culture ...............................................................................................................39

Executive Team ................................................................................................................39 Executive Performance Appraisal .....................................................................................40 Executive Remuneration ...................................................................................................40 Work Health and Safety (WHS) ........................................................................................40 Supporting People with a Disability ...................................................................................41 Equal Opportunity and Fairness ........................................................................................41 Whistleblowers Protection Act 1993 ..................................................................................41 Internal Communications ..................................................................................................41

Staff Council ..................................................................................................................41 Human Resources Statistics 2014–15 ..............................................................................42

Leadership Development ...............................................................................................43 Training and Development ............................................................................................43

AGD Reconciliation Action Plan ........................................................................................44 Financial Sustainability .........................................................................................................45

Market Research ..............................................................................................................45 Public Relations and Community Engagement .................................................................45 Financial Performance ......................................................................................................46

Corporate Financial Overview 2014–15 .........................................................................46 Customer Investment Performance ...............................................................................48 2014–15 Asset Allocation ..............................................................................................50 Manager of Funds .........................................................................................................51 Peer Group Comparisons ..............................................................................................51

Organisational Support .........................................................................................................53 Corporate Services ...........................................................................................................53

Sustainability Reporting .................................................................................................53 Corporate Account Payment Performance ....................................................................53 Consultancies ................................................................................................................53 Overseas Travel ............................................................................................................53 Public Sector Fraud .......................................................................................................53


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Freedom of Information .................................................................................................54 Information Privacy Principles .......................................................................................54

Information and Communications Technology ..................................................................54 Client Financial Services Branch ......................................................................................55 Investment Services..........................................................................................................56

Corporate and Customer Financial Information ....................................................................57 Public Trustee Certification of Financial Statements .........................................................58 Auditor General’s Audit Certificate ....................................................................................59 Public Trustee Corporate Financial Statements ................................................................61 Statement of Trusts being Administered ...........................................................................82 Public Trustee Customer Financial Information .................................................................85

Common Funds Financial Statements 2014–15 ............................................................85 Appendix 1: Common Funds Statutory Information ............................................................ 121

The Nature and Amount of Any Fee that Public Trustee Charges in Respect of Investment in the Common Funds ..................................................................................................... 121 Indirect Cost Ratios ........................................................................................................ 121 Classes of Investment in which Common Funds May Invest ........................................... 124


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The Year in Review This year has been significant for Public Trustee as we continued to reform our business while maintaining focus on customer service. It was also the first year of Public Trustee’s 2014–17 Strategic Plan. Under the Plan we committed to reviewing our standards of service to ensure they are relevant and useful for both our customers and staff. This work involved staff and used the valuable customer feedback we receive through our annual customer survey. The review found that, by and large, our current customer service standards were relevant and achievable. There is a culture of wanting to meet our customer’s needs and deliver a high-quality service at Public Trustee. Areas for improvement were identified and the Senior Management Group of Public Trustee worked on these. We continued to reform our business and improved it by undertaking a range of projects. These include changes to the way we complete estates and strengthening our cyber security. We also developed more formal contracts for some of the key services we purchase on behalf of customers. There were changes to our external environment this year. Advance Care Directives were introduced in South Australia and Public Trustee assisted customers by providing a witness service for these important documents. The new South Australian Civil and Administrative Tribunal (SACAT) was also established on 30 March 2015. Public Trustee has a range of interactions with the Tribunal including being appointed by SACAT as the personal financial administrator of protected persons, and also monitors private financial administrators appointed by the Tribunal. We have worked well with the new Tribunal to ensure a smooth transition. In 2014–15, Public Trustee’s profit before income tax equivalent payments was $1.156 million. This was an excellent result as we continue to meet the expenditure reduction targets set by government. There were also good returns on Public Trustee’s investments this year. All five of Public Trustee’s investment strategies outperformed their benchmarks. Global markets continue to be volatile but Public Trustee’s defensive strategies are performing well for customer funds. At 30 June, we had more than $1 billion (including superannuation) invested. We have again continued to focus heavily on training and induction as key ways of ensuring we have highly skilled staff. All staff undertook an annual performance development and review discussion with their manager. An organisational training plan was developed and implemented to meet the training needs that arose from those reviews. We also introduced an internal Job Exchange Program in 2014–15, giving staff the opportunity to gain experience by working short term in different branches of Public Trustee, as vacancies arose. The program not only expanded the skills of participants but also increased their knowledge of the various parts of Public Trustee.


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In order to ensure we present up-to-date and easily accessible information online, we began work this year on the refresh of our website. We look forward to improving access to information in the new-look website, due for completion in September 2015. In the year ahead we will build on the work we have done this year. We are developing a new marketing strategy and plan to launch a media campaign in the coming calendar year to promote our services and the importance of making a Will. Financial sustainability is a priority for any organisation and we will continue to work closely with our investment adviser to maximise returns for our customers. We also plan to focus on an upgrade to our business systems this year in order to maximise efficiency and reduce red tape. We have gained from the input of staff providing innovation to projects; this will improve accuracy and efficiency. As 2014–15 concludes, I would like to take this opportunity to thank all staff of Public Trustee for their continued commitment, hard work and support. Original signed 23 September 2015 Debra Contala Public Trustee 23 September 2015


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Our Performance Highlights Achievements against our Strategic Plan 2014–2017 Our Strategic Plan 2014–17 outlines our vision, values and objectives. In 2014–15, we made the following achievements against the Plan:

Objective One – Customer Service

Achieve service excellence by delivering services in a professional, consistent, coordinated and timely manner

Reviewed our Customer Service Standards

Undertook a survey of customers with an overall response rate of 35%. 84% of customers responding to the survey indicated they would recommend Public Trustee to others

Continued our work with our partners in the Alliance for the Prevention of Elder Abuse and presented at the World Elder Abuse Awareness Day Conference

Worked with the new South Australian Civil and Administrative Tribunal on the implementation of a range of new processes

Supported 55 customers in the role of Litigation Guardian

Reviewed and improved our processes for monitoring of court-appointed financial managers

Started a refresh of our website

Redesigned brochures and marketing material

Continued to work on improvements to the Customer Investment Tool (CIT), our investment planning tool

Worked with the Legal Services Commission and the Aboriginal Legal Rights Movement on an Aboriginal Wills Project


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Objective Two – Governance and Leadership

Deliver good governance, strong leadership and sound risk management

Continued to develop our future leaders through supporting staff to participate in the Attorney-General’s Department (AGD) Frontline Management Certificate and Accelerate leadership programs

Hosted a national meeting of Public Trustees and the Australian Guardianship and Administration Council (AGAC)

Commenced regular Office of Public Advocate/Guardianship Board and SACAT/Public Trustee liaison sessions for team leaders

Reviewed Public Trustee’s Charter and Performance Statement with the Treasurer and Attorney-General

Objective Three – Business Improvement

Identify opportunities to improve and enhance all areas of our business processes

Continued to work on the feasibility of upgrading our core ICT systems

Significantly improved business continuity plans and tested our new ICT disaster recovery environment

Progressed the implementation of the Information Security Management System in line with the State Government’s Information Security Management Framework

Undertook tenders for contracted services including new panel contracts for funeral providers and conveyancing services

Began a project to improve the efficiency of deceased estates administration, utilising technology to develop the Electronic Document Generation for Estates (EDGE) system

Reviewed and updated the procedures and standards for Genealogy Services and implemented a new genealogy software program

Reviewed and rebuilt processes and documents to ensure compliance with new Supreme Court Probate Rules that came into effect on 1 July 2015

Implemented a range of e-commerce initiatives including the electronic transfer of funds for payments to estate beneficiaries

Introduced an automated system to update the data that controls recurring payments to and for customers

Reviewed and updated where necessary a range of Business Process Maps and related controls

Installed video-conferencing facilities to improve productivity and security for staff attending SACAT hearings


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Objective Four – People and Culture

Invest in our people and create a rewarding environment in which to work

Implemented an internal Job Exchange Program to improve skills and knowledge

Developed fresh approaches to internal training and development by introducing ‘Fast Training’ and ‘Hot Topics’

Established a Staff Recognition Program

Established a Workplace Wellbeing Program to enhance support for staff

Supported nine staff as they worked toward a Certificate IV in Personal Trust Administration through the University of Western Sydney

100% of staff in the workplace and not on extended leave undertook Performance Development Reviews

Implemented an annual training plan covering all business units of Public Trustee

Ensured relevant staff undertook mandatory training in disability awareness, code of conduct, information security, Aboriginal cultural awareness and personal security awareness


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Objective Five – Financial Stability

Ensure that the organisation remains profitable and meets agreed fiscal targets

Paid an interim dividend to government of $460 000 and a final dividend for 2013–14 of $980 000

Investment returns for customers continued to exceed industry benchmarks in all standard investment strategies

Held an Attorney-General’s Department ‘Make a Will’ week

Visited a range of suburban shopping centres to provide information to the community

Undertook a range of promotions at relevant industry events including Super SA Open Days and the World Elder Abuse Awareness Day Conference

Continued to engage the community through education forums and information sessions, e.g. through Carers Support SA and at aged care facilities

Held monthly information sessions for newly appointed financial administrators

Implemented a range of efficiencies that reduced costs while maintaining customer service levels

Undertook statewide market research to guide future marketing campaigns and the website refresh


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Priorities for 2015–16

Objective One – Customer Service

Achieve service excellence by delivering services in a professional, consistent, coordinated and timely manner

Finalise website refresh

Issue a regular Customer Newsletter

Implement the Contact and Task Management System (CTMS) across all estate teams

Develop a range of projects to improve communication and services to Aboriginal and culturally and linguistically diverse customers

Objective Two – Governance and Leadership

Deliver good governance, strong leadership and sound risk management

Continue to develop business continuity capability

Strengthen our cyber security

Objective Three – Business Improvement

Identify opportunities to improve and enhance all areas of our business processes

Continue to upgrade our ICT systems to ensure they are modern and support our business process

Further develop e-commerce initiatives to explore contemporary payment options for customers and vendors

Implement a range of projects to improve data management

Continue to improve contract management


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Objective Four – People and Culture

Invest in our people and create a rewarding environment in which to work

Continue the Workplace Wellbeing Program to support staff to improve their physical and mental health

Provide a program of relevant training that can be accessed by staff in line with their own development plans

Continue to deliver our program of awareness training in relevant disciplines such as mental health, disability, cultural awareness, and legal and taxation reforms

Review our ICT workforce to ensure we are equipped to implement systems enhancements

Continue to ensure all staff have a high level of personal security awareness

Objective Five – Financial Stability

We will ensure that the organisation remains profitable and meets agreed fiscal targets

Develop a comprehensive marketing plan and commence a new marketing campaign

Continue to meet our fiscal and investment targets as required under our agreed Annual Performance Statement and Charter in line with the Public Corporations Act 1993

Promote our 'good news' stories to demonstrate our important work and increase business opportunities

Complete a review of perpetual trusts to ensure compliance and to provide a sound base for business development


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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 trusted and respected for providing caring and professional services. Our Mission To support South Australians, including the most vulnerable, by providing excellent service in Will making, estate management and financial administration. Our Services Our services include a range of estate planning, administration and trustee services, Will making, estate administration, Enduring Power of Attorney, personal financial management, taxation and funds management services. Our Customers and Stakeholders Customers whose financial affairs we manage and beneficiaries in deceased estates; Family members, carers, liaison persons and health professionals involved with

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

and Staff of Public Trustee.

Our Principles and Values Public Trustee is committed to the Public Sector values of service, professionalism, trust, respect, collaboration and engagement, honesty and integrity, courage and tenacity, and sustainability. We treat all our customers with dignity and respect; We care about our customers and administer their financial and legal affairs courteously,

promptly and professionally; We encourage feedback and act on it promptly, be it a complaint or compliment; and We always act in the best interests of our customers.

Our Strategic Objectives for 2014–17 A commitment to achieving service excellence by delivering services in a

professional, consistent, coordinated and timely manner; Delivery of our objectives through good governance, strong leadership, and sound risk

management; Identify opportunities to improve and enhance all areas of our business processes; Invest in our people and create a rewarding environment in which to work; and Ensure the organisation remains profitable and meets agreed fiscal targets.


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Public Trustee Strategic Plan 2014–17

Vision

To be trusted and respected for providing caring

and professional services

Mission To support South

Australians, including the most vulnerable, by providing

excellent service in Will making, estate management and financial administration

Core Values Service, Professionalism,

Trust, Respect, Collaboration and Engagement, Honesty and Integrity, Courage and

Tenacity, Sustainability

Objectives Strategies

Customer Service We are committed to achieving service excellence by delivering

services in a professional, consistent, coordinated and

timely manner

• Ensure Public Trustee’s Service Standards remain current and effective

• Develop a streamlined customer-centric model of customer service

• Improve our communication to customers • Improve services to Aboriginal customers and

customers from other cultures

Governance and Leadership We will deliver our objectives through good

governance, strong leadership, and sound risk management

• Ensure our leaders are empowered to act and work as a team

• Build and maintain the confidence of key stakeholders

• Build our internal capabilities in risk management

• Ensure our future leaders are well-supported to continue their development

Business Improvement We will identify opportunities to improve and enhance all areas of our business processes

• Continue to upgrade our ICT systems to ensure they are modern and support our business processes

• Transform and simplify our business processes to cut red tape

• Improve records management to ensure customer information is easy to access

• Implement e-commerce improvements • Continue to improve our contract management • Write ‘plain English’ Wills

People and Culture We will invest in our people and create a rewarding environment

in which to work

• Ensure all staff are well inducted and trained • Ensure that the organisation has the capability

to succeed in a major ICT upgrade project • Encourage staff to engage more actively in the

communities we serve • Build a culture based on mutual respect,

personal accountability and support • Continually improve Workplace Health and

Safety

Financial Stability

We will ensure the organisation remains profitable and meets agreed fiscal targets

• Continually promote Public Trustee services • Develop new business initiatives • Improve the transparency of our financial

framework • Review perpetual trusts


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Relationship to the Attorney-General’s Department (AGD) Strategic Directions Public Trustee aligns its business objectives and customer-focused services with the AGD Strategic Directions and with South Australia’s Strategic Plan (SSP), in particular the second strategic priority of ‘keeping our communities safe and citizens healthy’. The two relevant targets for Public Trustee are: SSP Target 32 – Customer and client satisfaction with government services; and SSP Target 50 – People with a disability. A particular focus is protecting and supporting vulnerable people by providing personal financial administration services for those who are unable, through age or disability, to manage their own affairs. Public Trustee supports the AGD in achieving the following strategies: AGD Goal 2: Protecting rights and enforcing obligations AGD Strategy 2.2: Provide the information people need to protect their rights and understand their obligations Public Trustee contributes to this by:

Maintaining a comprehensive website which provides relevant information to the South Australian community, and informs it about and assists it with: Wills and Powers of Attorney and the importance of preparing and regularly

reviewing these important documents; Personal financial management services for those who have lost capacity to

manage their own affairs; and Deceased estate administration.

Maintaining a range of information brochures to promote the various services Public

Trustee provides and the importance of having a current valid Will.

Offering a witnessing service for Advance Care Directives.

Undertaking a range of public speaking engagements to educate the community about Wills and other relevant information.

AGD Goal 2: Protecting rights and enforcing obligations AGD Strategy 2.6: Safeguard vulnerable people through appropriate service environments and settings Public Trustee contributes to this by:

Providing a range of services for vulnerable people. These include: Litigation Guardian Services – Managing legal matters in the courts for those who

are unable to give instructions to solicitors; Regulatory Services – Reviewing the financial statements of Private Administrators

appointed by SACAT or the courts; Managing small trusts and intestacies for the benefit of individuals with limited

means. Managing Minor’s Trusts for people under the age of 18 years of age; and The provision of personal financial management services for those who have lost

capacity to manage their own affairs.


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AGD Goal 4: Working Together AGD Strategy 4.1: Measure what we do and be held accountable for our performance Public Trustee contributes to this by:

Meeting the requirements of our Charter under the Public Corporations Act 1993, which is agreed between the Attorney-General and the Treasurer.

Obtaining regular feedback from customers by way of annual customer satisfaction

surveys.

Undertaking staff Performance Development Reviews and surveys; and

Maintaining a database feedback system and using lessons learnt to make continuous improvements in customer service.

AGD Strategy 4.4: Give our people the skills and tools they need to do their best work and get results Public Trustee contributes to this by:

Actively pursuing development opportunities for all staff, linked to their individual Performance Reviews; and

Conducting programs of awareness training for staff in relevant disciplines (mental health, disability, cultural awareness, tax reforms, and legal reforms).


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Customer Service 2015 Customer Satisfaction Survey In 2015, Public Trustee undertook its fifth customer satisfaction survey. Public Trustee has incorporated survey data collection into normal business practice since the end of 2012. This will continue into the future as a way of providing customers with a ‘voice’, gathering important feedback and using this to develop strategies for ongoing service improvement. We have found the best way to get feedback from our Personal Estates customers and/or their liaison person is to conduct a sample survey by telephone each May. Overall, the 2015 Customer Satisfaction Survey found that satisfaction with services remained high and had improved, particularly for our Deceased Estates customers: The overall response rate was 35%, a slight increase on 2013–14, indicating the results

are representative of customer opinion; For all services, most respondents indicated they were receiving a high level of service; 29% of estate beneficiaries complimented the service they received( rather than suggest

any improvement to the service); On average, 84% of our customers would recommend Public Trustee to others; and Customers said that they would like to see improved communication, more timely

services and process improvements.

The excellent survey results reflect the pride taken by Public Trustee staff in the professional services they provide on a daily basis. Our customer feedback continues to underpin the work of Public Trustee in Will making, executor services and personal financial management for protected persons. Full details of the survey results are available on the Public Trustee website (Publications) at www.publictrustee.sa.gov.au or click here Review of Service Standards Public Trustee reviewed its Customer Service Standards to ensure they remain relevant and useful for both customers and staff. The review found that the Standards, developed in 2012, remain relevant in 2015. The main initiatives that we continued to build on were increased and improved communications both internally with staff and with our customers. For staff this meant regular and structured team meetings, performance development reviews and staff training (both formal and on-the-job). For customers it meant prompt and informative telephone and email contact, assisted by the refresh of the website. We are also working on a customer newsletter to be distributed in 2015–16. The review found that there is a staff culture of wanting to meet customer needs and deliver a high-quality service. It was evident that staff at Public Trustee are genuinely committed and passionate about providing the best customer service they can.




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Public Trustee Website Refresh A rebuild of the website commenced this year with the aim of presenting a more contemporary and user-friendly interface for site users wanting to access information. With the help of key staff, the website content has been reviewed and rewritten, to ensure that the type of information site users are searching for is presented more simply and in plain English. Other key improvements have ensured the website meets disability accessibility guidelines and is accessible through mobile devices, and that forms can be submitted online. The technical solution selected meets our current and future functional requirements, and meets the industry standard. The new website will be launched in the first quarter of 2015-16. Customer Investment Tool The Customer Investment Tool (CIT) is software that was implemented in April 2014; it continues to provide Public Trustee with a robust system for managing customer funds and investment strategies. This year, minor refinements were made to the system including the improvement of the ‘goal seek’ function. This function enables estate officers to estimate commissions, fees and charges in relation to proposed court awards for customers. Staff are able to provide this information to customers prior to them making a decision about whether to choose Public Trustee as manager of the court award. During 2014–15, staff processed 1607 CIT investment models for customers. Aboriginal Legal Rights Movement (ALRM) Wills Project Working with the Legal Services Commission and the Aboriginal Legal Rights Movement, Public Trustee staff presented information sessions to Aboriginal people about Wills, Advance Care Directives and funerals. Disputes over funeral services can be a source of conflict in families. This initiative encouraged Aboriginal people to make a Will and an Enduring Power of Attorney, to help their families avoid contested funerals and manage their affairs should disability or ill-health strike. Design Refresh of Public Trustee Marketing Materials The design of the range of marketing materials has continued this year. Early in 2015, work began to refresh the overall look and feel of our full range of brochures to make them more contemporary and attractive. The new materials were released in July 2015. Public Trustee’s Role in Reducing the Prevalence of Elder Abuse Public Trustee is a member of the Alliance for the Prevention of Elder Abuse (APEA) whose members are key stakeholders in responding to the abuse and exploitation of older people. APEA comprises Public Trustee, the Legal Services Commission of South Australia, the Office of the Public Advocate, South Australia Police and the Aged Rights Advocacy Service Inc.


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APEA’s main role is to raise community awareness of, and respond to, elder abuse through the promotion of intervention and prevention strategies. Public Trustee contributed to the collaboration between key service providers and other relevant state government agencies in the development of the Action Plan supporting the South Australian Strategy for Safeguarding Older People 2014–2021. The Action Plan was released by the Government at the 10th anniversary World Elder Abuse Awareness Day Conference in June 2015. Public Trustee helps to protect older people from financial abuse using our expertise to manage people’s affairs pursuant to a Power of Attorney or Administration Order. When we are appointed as the financial administrator of a person’s affairs, at times we find they have been the victim of financial elder abuse and the effects of the abuse are often difficult to rectify. In June 2015, Public Trustee and the other APEA members held a forum on ’Safeguarding the Rights of Older People’ at the City of Burnside Civic Centre. A representative of each of the five Alliance organisations gave a short presentation to the elderly local residents on the different ways that they can protect themselves from abuse, including financial abuse. Witnessing Advance Care Directives On 1 July 2014, Advance Care Directive laws came into force in South Australia. A completed Advance Care Directive replaces a pre-existing Enduring Power of Guardianship, Medical Power of Attorney and/or Anticipatory Direction, leaving only one document for the expression of a person’s (non-financial) wishes. Existing Enduring Powers of Guardianship, Medical Powers of Attorney or Anticipatory Directions, completed prior to 1 July 2014, continue to have legal effect. An Advance Care Directive gives those who care for someone a clear understanding of that person’s needs and wishes should they lose the ability to communicate. Full details about the Advance Care Directive can be found at: www.advancecaredirective.sa.gov.au or at www.sahealth.sa.gov.au To assist the community, in 2014–15 Public Trustee began a witnessing service for Advance Care Directive documents. Working with the South Australian Civil and Administrative Tribunal (SACAT) SACAT commenced operation on 30 March 2015 and has, through the passing of the South Australian Civil and Administrative Tribunal Act 2013, taken over from the former Guardianship Board of South Australia. Hearings for the new tribunal continue in the premises located at Collinswood, just north of the Adelaide city centre. Public Trustee has worked closely with SACAT to ensure a smooth transition for customers, for example by developing improved electronic management of orders through an electronic portal within the SACAT system. We began regular liaison meetings with SACAT staff and staff of the Office of the Public Advocate in 2014–15.

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

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


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Australian Research Council Project Over the past five years, Public Trustee together with its interstate counterparts has sponsored an Australian Research Council research project undertaken jointly by the University of Queensland and the Queensland University of Technology. The project concluded with the issue of the final report in 2014–15. The research, ‘Families and generational asset transfers: making and challenging Wills in contemporary Australia’, aimed to shed light on why some people make a Will while others do not, and how individuals go about making such decisions. A national survey explored the prevalence of Will making in Australia, the reasons for making, changing or not making a Will, advice sought and asset distribution in Wills. The project team’s final report entitled ‘Having the Last Word? Will making and contestation in Australia’ was released in Canberra in March 2015. A copy of the report can be found at www.uq.edu.au/swahs/Having the last word.pdf or click here Responding to Customer Feedback During the year, Public Trustee continued to monitor and manage compliments and complaints about our services. Complaints cover all customer expressions of dissatisfaction with our services that require a response from us and includes complaints made to members of Parliament and external parties such as the Ombudsman. At all times we seek opportunities to improve our services through the information provided via customer feedback. Table 1: 2014–15 Complaints 2014–15 2013–14 Total Complaints 70 56 Preparing Will and Power of Attorney Documents The Wills team provides a free Will and Power of Attorney drafting service for all South Australians who nominate Public Trustee as their executor, attorney or substitute attorney. Wills and Powers of Attorney are complex legal documents which should be professionally drafted to ensure they are valid and legally binding. Staff in the Wills team have extensive knowledge and skills pertaining to Wills and Powers of Attorney and are able to provide a professional service from the Adelaide Office or at one of eight suburban or 14 regional locations. During the period, a new suburban office location was secured at Toorak Gardens to help Wills Officers respond to demand from residents of the eastern suburbs of the metropolitan area. Table 2: 2014–15 Documents Prepared (including during home visits) 2014–15 2013–14 Wills (includes new and revised) 1 818 2 153* Enduring Powers of Attorney (includes new and revised) 298 488

*Included 17 sub-executor Wills no longer included in data total Another important service provided by the team is a visitation service for those customers who are infirm, in hospitals or nursing homes and are non-ambulant (unable to walk or get about freely). This ensures that our customers have access to services that would not otherwise be available to them.

http://www.uq.edu.au/swahs/Having%20the%20last%20word.pdf

http://www.uq.edu.au/swahs/Having%20the%20last%20word.pdf


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Table 3: 2014–15 Documents Prepared During Home Visits 2014–15 2013–14 Number of home visits 237 182 Wills (includes new and revised) 147* 124 Enduring Powers of Attorney (includes new and revised) 21* 24

(*These numbers are included in Table 2, above) Deceased Estate Administration – Distributable Estate Services The Distributable Estate Services team undertakes the administration of deceased estates for people who have died with or without a Will. This involves managing the assets and liabilities of the estate and distributing the balance of the estate to beneficiaries. Staff may work closely with Public Trustee real estate panel agents, valuers and conveyancers during the sale or transfer of real estate. Staff may also need to work with solicitors during the course of the administration. The team is supported by a number of specialist staff, including a probate officer who prepares the appropriate court documents for probate, and a genealogy officer who conducts research into beneficiaries when required. Public Trustee acts independently in carrying out the instructions contained in Wills. Most importantly, staff carry out the deceased person’s wishes with sympathetic concern for their family and beneficiaries. Public Trustee is often selected by beneficiaries as the trustee of choice for estates when a person dies intestate - that is, when a person dies without a Will. Where beneficiaries are not known, however, Public Trustee must assume the role of administrator. Public Trustee is also selected as the trustee for many estates when the executor named in the Will renounces or is unable to fulfil their role. However, the consent of the beneficiaries is obtained before we begin any administration of the estate. Public Trustee may also be appointed by an Order of the Supreme Court. In 2014–15 business processes were simplified to reduce red tape and enable all payments to estate beneficiary customers to be made by electronic funds transfer. We also reviewed and rebuilt documentation to ensure compliance with new Supreme Court Probate rules that came into effect on 1 July 2015. During the year, we also replaced our genealogy software as well as updating the relevant standards, procedures and business process maps. Table 4: 2014–15 Deceased Estate Administration 2014–15 2013–14 New cases 604 662 Completed estate matters 682 755 Estates currently under administration 1 030 1 108 Grants of probate and administration received for the period 524 574

Informal estates administered 80 88


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Deceased Estate Administration – Unclaimed Money Even after extensive research, sometimes it is not possible to identify or locate some or all of the beneficiaries of an estate. Under these circumstances, the realised assets of the estate are held in an interest-bearing account for a statutory period of six years. After that, the funds must then be paid to the South Australian Department of Treasury and Finance. Where a beneficiary of any unclaimed money can provide evidence of their entitlement to the funds, these can be reclaimed from the Department of Treasury and Finance. Table 5: 2014–15 Unclaimed Balances* 2014–15 2013–14 Number of unclaimed balances paid to Treasury 95 16 Value of unclaimed balances paid to Treasury $628 872 $342 883 * Finalised at 30 June, payment early next period

Trust Services The Trust team manages court award trusts, trusts established by a Will and trusts under deed for minors as well as perpetual charitable trusts and scholarship trusts. The other major type of trust we administer is a life interest trust, where the nominated beneficiary (the life tenant) receives a benefit during their life or for a specified time. The life tenant may have the right to live in a property or may receive the income from the investment of trust funds. In such cases the capital of the trust is preserved for the ultimate beneficiaries (the remaindermen). Table 6: 2014–15 Public Trustee Trust Activity Activity 2014–15 2013–14 New trusts 79 67 New court-awarded trusts 32 40 New life interest trusts 12 29 Trust matters finalised 361 372 Trusts on hand at 30 June 1 444 1 682 Table 7: 2014–15 Public Trustee Trusts for Children Under the Care of the Minister 2014–15 2013–14 Trusts for children under the care of the Minister for Communities and Social Inclusion on hand at 30 June

29 31

Completed trusts for children under the care of the Minister for Communities and Social Inclusion 3 8

Perpetual and Charitable Trusts Public Trustee manages more than 70 Perpetual and Charitable Trusts, providing benefits to the community that would otherwise not be achievable. The Cedric Arnold Seth Ferry Scholarship Trust and the Lillian de Lissa Fund, for example, have provided opportunities for numerous students and academics in two quite diverse fields. The Ferry Scholarship is awarded annually to students at Honours level for study of and/or research into the scientific fields of physics and/or chemistry. The scholarship has provided financial support to some of South Australia's most successful, award-winning scientists. The Lillian de Lissa Fund supports innovative research into preschool education, including PhD scholarships and annual action grants awarded to students and practitioners working in early educational settings.


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Research funded by the Lillian de Lissa Fund is considered groundbreaking, with South Australia being seen as a leader in this particular area of research both nationally and internationally. The research and publications made possible by the Fund have gone on to influence policy, legislation and urban design, amongst other things. The publication of ‘Children’s Voices’ by a recent awardee, for example, received both national and international recognition. Public Trustee is also the trustee of the Dame Roma Mitchell Trust for Children and Young People, the Dame Roma Mitchell Trust for Children and Young People with a Disability, and the Dame Roma Mitchell Foundation. Grants from these trusts are awarded to children and young people who are or have previously been under the guardianship of the Minister. Funds awarded can be used to assist with the achievement of personal goals, for health and wellbeing or for personal development opportunities. In 2014–15 approximately 160 grants were awarded from all three of the Dame Roma Mitchell trusts to support children and young people and to help them gain skills to become independent and self-sufficient. Customer Relationships Team The Customer Relationships Team promotes the services of the Public Trustee to the community. The team coordinates promotional events, attends to enquiries about new business opportunities, and is the first point of contact for many customers. The team is also responsible for liaising with South Australia Police, the Coroner and the Department of Communities and Social Inclusion for the arrangement of dignified funerals for those in the community who have no family able to assist. Personal Estates Public Trustee provides services to customers under SACAT administration orders, South Australian court orders, and for customers under their activated Enduring Power of Attorney. Public Trustee may also be appointed by a court to act as ‘next friend, litigation guardian’ for some customers unable to conduct their own legal proceedings. Public Trustee can be appointed to be legally responsible for making all, or some, of a person’s financial and legal decisions. Where Public Trustee is appointed to manage a person’s financial affairs, the services provided by staff of the Personal Estates Branch include arranging for the payment of accounts such as rates, taxes and utilities, payment of care providers, cleaning, repairs and renovations, as well as the sale and purchase of real estate for customers. Investing and budgeting funds and on behalf of our customers are also part of this work. Where a court appoints Public Trustee to manage court-awarded funds for a customer, Public Trustee does so prudently in the best interests of the customer and according to the terms of the court order.


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Table 8: 2014–15 Personal Estates Matters Activity 2014–15 2013–14 Total number of personal estates under administration 4 086 4 005

Number of next friend/litigation guardian matters on hand 55 56

Number of new customers under SACAT Orders 355 361 New court-award customers 40 27 Total funds received from new court awards $11.5m $15.2m New Power of Attorney customers 40 44 Number of in-person meetings with Personal Estates Branch customers 468 594

Court-awarded funds under administration $398.2m **$385.9m No-fee threshold $4750 $4650 % of customers under administration from whom no fees were collected 16.6% 16.2%

** Includes $69.9 million of funds that were held in Self-Managed Superannuation Trusts as at 30 June 2013 and that were transferred to industry superannuation arrangements during 2013. Acting as a litigation guardian continues to be an important role undertaken by Public Trustee, particularly where no other party is available to undertake this task. A litigation guardian is someone who is appointed by the court in a particular matter. They 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 litigant regarding the conduct, and perhaps ultimately the settlement, of claims. Table 9: 2014–15 Litigation Guardian Appointments 2014–15 2013–14 New litigation guardian customers 12 16 Monitoring Private Administrators and Managers Public Trustee is required under the Guardianship and Administration Act 1993 to examine and report on the activities of private financial administrators appointed by SACAT to manage the estates of individuals with a mental incapacity. Private financial administrators of protected estates are required to report annually to Public Trustee on the administration of those estates. We examine annual statements and report to SACAT on them, and may seek a statement to be audited. We may also recommend to SACAT that expenditure by the administrator be disallowed, if we are of the view that an administrator did not act in good faith, or with reasonable care, in incurring the expenditure. Public Trustee conducts monthly information sessions for newly appointed private administrators to help and direct them in their role and to advise them of the required financial reporting. We are also required to examine the financial accounts submitted by private 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. Public Trustee also monitors 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.


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Public Trustee has continued a process of improving work practices in the Regulatory Unit. This has included the development of process maps and a review of procedures to strengthen the control environment, as well as changing correspondence standards to improve the quality of interaction with private managers and private administrators. Table 10: 2014–15 Private Administrators and Private Managers 2014–15 2013–14 Private administrators appointed under the Guardianship and Administration Act 1993 1 261 1 207

Private managers appointed under the Aged and Infirm Persons’ Property Act 1940 148 149

Alternate executor administrations pursuant to a court order 334 256

Legal Section Public Trustee’s Legal Section is staffed by solicitors outposted from the Crown Solicitor’s Office. It handles a wide range of legal matters arising from the estates of customers for whom Public Trustee is financial manager, attorney or litigation guardian. Such matters include pursuing allegations of financial misappropriation, recovery of debts, matrimonial or de facto property division, personal injury claims, inheritance claims and applications for court approval for various transactions including sale of a residence. The section also handles issues arising from deceased estates administered by Public Trustee. In intestate estates, Public Trustee has a regulatory role, including monitoring compliance with the statutory requirement to deliver it the share of a non sui juris beneficiary (someone lacking the legal competence to act for themselves), generally a minor or surviving spouse with dementia. There has been an increase in applications to the Supreme Court by administrators who do not wish to be bound by this requirement; in such matters solicitors appear in court and negotiate with applicants to ensure that beneficiaries’ interests are safeguarded appropriately. The work of the Legal Section encompasses both litigious and non-litigious matters. The section conducts or supervises litigation in a range of South Australian and Federal courts and tribunals. In addition, solicitors draft documents and provide commercial and general advice in relation to the risk management and customer service aspect of Public Trustee’s operations. They also liaise with lawyers in private practice about a variety of issues. Liaison with external conveyancers is a significant activity of the Legal Section. This involves organising the preparation, checking and execution of a range of real estate instruments with respect to the sale or protection of property in deceased and protected estates, including transfers, transmission applications and caveats. This year, a comprehensive review of the conveyancing function was undertaken. As a result, internal processes were streamlined and significant improvements made. Table 11: 2014–15 Legal Section Matters 2014–15 2013–14 New specific files 146 117 Ad hoc advice matters 172 180 Files closed 109 n/a Real estate instruments checked and executed 655 n/a


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Taxation Services The Taxation Services Branch attends to the income tax compliance issues for approximately 7 300 customers, including deceased estate matters, trusts, personal estates and other customers requesting assistance with income tax and related matters. Income tax returns are prepared for a range of customers including customers up to their date of death, and for deceased estates from date of death to closure of the estate, testamentary trusts (trusts established in the Will of a deceased person), protected persons, Power of Attorney customers, court award customers. We also prepare statutory reports for the Australian Taxation Office and the Australian Charities and Not-for-Profits Commission; assist customers in providing information to Centrelink; coordinate and monitor customer superannuation; and attend to wages, WorkCover and superannuation contributions for our customers’ carers. Table 12: 2014–15 Annual Taxation Returns 2014–15 2013–14 Taxation returns completed 7 256 7 761 Real Estate and Property Management Real estate is a significant asset in many estates. As at 30 June 2015, Public Trustee was responsible for more than 950 properties. We undertake regular inspections and maintenance for these properties. Our software systems were improved in 2014–15 to enable better monitoring of customer property inspection schedules. Table 13: 2014–15 Properties Under Management 2014–15 2013–14 Trust administration properties 181 170 Estate administration properties 235 235 Personal estates properties 536 606 Total properties under management 952 1 011 Public Trustee engages real estate agents and licensed valuers who work together to achieve the best results for customers requiring real estate services. A rigorous process is always applied to real estate sales to ensure a fair market price is obtained when selling estate properties. Table 14: 2014–15 Property Sales 2014–15 2013–14 Properties sold – deceased estates 134 151 Properties sold – trusts 11 7 Properties sold – personal estates 51 53 Total number of properties sold 196 211 Total sales value** $63 237 524 $58 628 996 Average sales price** $322 640 $277 863 ** Public Trustee may be only a part-owner of some properties sold. These figures represent the gross and average sale figures for the properties (either wholly or partly owned).


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Governance and Leadership 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 how and which Public Trustee services are delivered to customers: 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 detailed 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. Internal Service Level Agreements Internal service standards between branches are important to ensure our business runs smoothly. Service Level Agreements have been formalised between branches they establish a clear commitment to work in partnership to provide reliable and timely services to each other. Covering the various interrelating functions between branches, the agreements are reviewed annually to ensure relevance and currency. 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. The control self-assessment is a structured process to review the effectiveness of internal controls across our key functions that includes two levels of assessment: initial assessor and secondary reviewer. The ratings of these assessments provide insight into whether remedial actions are required. 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. Public Trustee is a member of the Financial Services Council (FSC). The council represents organisations undertaking funds management, superannuation, life insurance, financial advice, trustee and public trustee services, and has more than 130 members. Control Self-Assessment Training During 2014–15, Public Trustee conducted refresher training for staff in the Control Self-Assessment system. This training focused on how risk management is applied in the workplace. Through a better understanding of our internal controls, and the need to regularly assess the effectiveness of controls, staff are able to be more effective when performing the half-yearly control self-assessment process. The training also covered the relationship between procedures, process maps and the controls assessed using the ControlTrack System.


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Fraud and Corruption In 2014–15, Public Trustee collaborated with interstate counterparts to strengthen fraud risk management and control. This has coincided with a fraud and corruption risk assessment, delivery of mandatory fraud and corruption awareness training to all staff, and development of a fraud control plan. Improved Controls over Financial Statements During the 2014–15 reporting period, Public Trustee continued to improve financial reporting to customers. Additional system reconciliations were introduced to improve quality assurance. 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 the 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. 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;


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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 2014–15 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 is provided with a copy of the formal meeting papers and is invited to attend meetings of the committee. Funds Management Forum A sub-group of members of the Investment Advisory Committee and staff of the Funds Administration team meet 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. 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.


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As at 30 June 2015, the committee comprised: Virginia Hickey, Director, @ the Board Table (Chair); Maddie Turner, Director Business Services, Office of the Director Public Prosecutions,

Attorney-General’s Department; Christine Locher, Principal, Solutions@Locher Pty Ltd; Steven Woolhouse, Chief Finance Officer, 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.

During 2014–15, the committee considered a number of internal audit and management reports. The internal audit program was based on a comprehensive assessment of the organisation’s key risks. The committee also conducted an annual self-assessment and used that collective feedback to determine areas where it might improve. Public Trustees’ National Meeting and the Australian Guardianship and Administration Council (AGAC) Meeting In October 2014, Public Trustee hosted a meeting of the Public Trustees from around Australia, and they then attended the Australian Guardianship and Administration Council (AGAC) meeting along with the Public Advocates/Guardians and Heads of Tribunals from around Australia. Review of Public Trustee’s Charter and Performance Statement with the Treasurer and Attorney-General On an annual basis as a Government Business Enterprise, Public Trustee is required to enter into a Charter and Performance Statement. Under the terms of the Charter, Public Trustee, in consultation with the Attorney-General and the Treasurer, must review the Charter and prepare a Performance Statement setting out the targets for the coming year. Public Trustee’s Charter and Performance Statement for 2015-16 was agreed and signed by the Attorney-General and Treasurer in June 2015


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Public Trustee Organisation Chart


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Business Improvement Managing our business well and continually improving processes is a primary objective of Public Trustee. During 2014–15, Public Trustee worked on a range of initiatives to improve business. New Supplier Panel – Funeral Services From time to time in our role as trustee, Public Trustee is required to arrange funerals on behalf of our customers. In order to improve our contract arrangements and obtain good value for money, Public Trustee has established a panel contract for funeral service providers in the metropolitan area. The metropolitan area has been divided into two zones, North East Metropolitan and South West Metropolitan.

The new contracts became operational on 1 July 2015. Changes to the Completions Process During 2014–15, Public Trustee reviewed the management of customers who cease being a customer due to their SACAT Administration Orders being revoked, rescinded or in the event of their death. Efficiencies were made by streamlining and standardising processes. These changes reduced risk and ensured the completion of an estate as quickly as possible. Electronic Document Generation for Estates (EDGE) The EDGE project originated from the Estate Services Staff Innovation Action Group, that was established early in 2014 to harness the energy and ideas of the branch staff for process and business improvement. The aim of the EDGE project was to create a single source of electronic input for data from which all forms and correspondence would be produced. User-acceptance testing of the program began in June 2015. Corporate Services Review In order to ensure that Public Trustee is supported by an efficient Corporate Services team, a review of its functions was undertaken in 2014–15. That work resulted in a range of reforms that improved processes and realised efficiencies. Information Security Management Public Trustee’s information security program is overseen by the Information Security Management System Security Steering Group (SSG), which ensures a common understanding across the organisation of security issues, and provides a coordinated planning body focused on information security. This year a security training framework that defined training requirements for selected target audiences was developed. A range of technical improvements to reduce the risk of cyber security incidents was also implemented.


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Business Continuity Planning and Testing Business Continuity Plans (BCPs) that cover critical business processes within Public Trustee were further developed in 2014–15. A workshop and simulation of the BCPs was undertaken to assess activation of the plans, and to test components of Public Trustee’s business resilience in a simulated emergency scenario. This exercise demonstrated that the BCPs and ICT recovery plans were comprehensive, that staff were aware of their responsibilities and that they had a good understanding of their various roles in implementing the BCPs. Review of the Way We Monitor Private Financial Administrators During 2014–15, Public Trustee continued work to improve the process for examining and reporting on the activities of private financial administrators appointed by SACAT. This included the development of process maps and strengthening the relevant controls. We also changed correspondence standards to improve the quality of our communication with private managers and private administrators. Recurring Payments There are a number of recurring payments that Public Trustee makes each week or fortnight on behalf of and to our many customers, e.g. accommodation, rent, council rates, utility accounts and other expenses. At the end of March 2015, an automated system to make recurring payments was introduced to replace the former manual method. As part of the automation, management controls were also strengthened. E-Commerce In 2014–15, all payments to beneficiaries in deceased estates were shifted to the electronic funds transfer system. This provided better security and meant that beneficiaries received their funds as soon as practicable. Customer Purchase Cards Public Trustee has increased the use of purchase cards to make payments on behalf of customers in instances where cheques are not accepted and vendors choose not to provide banking details for electronic funds transfers. The purpose of this reform was to ensure quick and efficient payments on behalf of customers in cases when our standard payment system is not practical.


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


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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. Executive Performance Appraisal The Public Trustee and other executives are subject to an employment contract with the Chief Executive, Attorney-General’s Department (AGD). Each employment contract specifies performance criteria. Executives are subject to an annual appraisal against the performance criteria contained in their contract and the specifications 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. Work Health and Safety (WHS) Public Trustee is committed to ensuring that employees and contractors are safe from injury and risks to health and welfare while at work. We are committed to providing a safe and healthy work environment where active contribution and personal responsibility for health and safety by all workers is encouraged. As employees of the AGD, Public Trustee adopts and implements the Department’s Health Safety and Welfare plan, policies and programs. Public Trustee has manager and employee representation on the AGD Health and Safety Committee which provides a consultative forum to support and continuously improve work health, safety and wellbeing systems and practices. As part of our commitment to the safety of employees, six-monthly floor inspections are conducted to identify any hazards or risks requiring administrative or corrective actions. All employees and managers have access to an Employee Assistance Program, which continues to be used. Health and safety initiatives for the year included: Influenza and H1N1 vaccinations were offered to all staff; WHS representatives, first aid officers and fire wardens attended training sessions; WHS Managers’ training was conducted; Employees attended Mental Health Awareness sessions; A number of workstation assessments were conducted for new and existing employees; The majority of employees attended training on Workstation Ergonomics and Manual

Handling Procedures; Managers and Team Leaders attended training on Hazard and Incident Reporting

Module (HIRM) Reporting and Return to Work Management; Wellbeing initiatives such as the Life Be In It Corporate Cup were supported, and we

instituted a Workplace Wellbeing Committee; and Information was made available to all staff about access to the Employee Assistance

Program. Public Trustee had one notifiable incident in 2014–15. This incident was independently reviewed and the review’s recommendations implemented.


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Supporting People with a Disability In support of the Government’s Promoting Independence Strategy, Public Trustee always seeks to ensure equity for people with disabilities. We have a strong commitment to a workplace culture that fosters a positive environment free from discriminatory behaviours. We continue to work collaboratively with Disability Works Australia to provide opportunities and support the recruitment, or return, to the workforce of people with a disability. In 2014–15, Public Trustee recruited one person, through Disability Works Australia. All staff new to Public Trustee complete the Online Disability Awareness Training as part of their induction process. Equal Opportunity and Fairness Through induction and ongoing training, Public Trustee promotes compliance with the AGD Workplace Conduct Policy and the Code of Ethics for the South Australian Public Sector. A Workplace Conduct Contact Officer is available to assist and advise staff as required. Public Trustee ensures all employees attend a refresher session on the Code of Ethics every three years. The Whistleblowers Protection Act 1993 Under Part 3 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.

During 2014–15, training was provided to staff on this topic as part of the Fraud and Corruption Awareness program. Internal Communications Internal communications were strengthened this year through regular team and branch meetings to ensure staff were aware of and can contribute to relevant matters. There is a range of standard agenda items addressed in all team and branch monthly meetings. Another important communications vehicle is the monthly staff newsletter, Big Picture, which informs staff about initiatives in the organisation. Through the intranet, staff have access to corporate information, policies, procedures, standards, delegations and staff announcements. Staff Council The Staff Council is a forum that promotes the exchange and sharing of ideas and issues between Public Trustee staff and management. The Council consists of elected staff representatives across a range of classification levels from each of the different customer service areas, together with a human resources


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representative. It meets quarterly to discuss ideas and matters raised by staff members, and to consider and make recommendations to Public Trustee management. The Public Trustee Workplace Wellbeing Committee is a sub-group of the Staff Council, and in 2014–15 it formulated specific wellbeing programs for staff. Activities such as the Life Be In It Corporate Cup were supported, with work underway on a range of other initiatives. An initiative of the Staff Council has been to host a quarterly official welcome event for all new staff, to ensure their sense of inclusion in the organisation. Council activities also include a monthly staff casual day with donations collected for selected South Australian charities. In 2014–15, the staff of Public Trustee raised more than $2 400 for several charities. Human Resources Statistics 2014–15 Further human resources information is available from the Commissioner for Public Sector Employment website at www.dpc.sa.gov.au/commissioner-public-sector-employment or click here NUMBER OF EXECUTIVES BY STATUS IN CURRENT POSITION, GENDER AND CLASSIFICATION

Classification

Ongoing Term Tenured

Term Untenured

Other (Inc. Casual) Total

Mal

e

Fem

ale

Mal

e

Fem

ale

Mal

e

Fem

ale

Mal

e

Fem

ale

Mal

e

% o

f tot

al

Exec

s

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 67 3

LEAVE MANAGEMENT- AVERAGE DAYS LEAVE PER FULL-TIME EQUIVALENT EMPLOYEE Leave Type 2014–15 2013–14 2012–13 2011–12 2010–11 Sick Leave 10.5 8.7 9.1 10.5 10.7

Family Carer’s Leave 1.0 1.0 0.9 1.1 1.1 Miscellaneous Special Leave 0.4 0.7 0.5 0.5 1.2

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

Male Female Total % of Agency 4 3 7 4.1

http://www.dpc.sa.gov.au/commissioner-public-sector-employment




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TYPES OF DISABILITY (WHERE SPECIFIED) Disability Male Female Total

% of Agency

Disability Requiring Workplace Adaptation 4 3 7 4.1

Physical 3 3 6 3.6

Intellectual 0 0 0 0

Sensory 1 0 1 0.6

Psychological/Psychiatric 0 0 0 0 DOCUMENTED REVIEW OF INDIVIDUAL PERFORMANCE MANAGEMENT

(including those staff on extended leave) Total

% Reviewed within the last 12 months 96% % Review older than 12 months 3% % Not reviewed 1%

Leadership Development Public Trustee encourages and supports employees who wish to further their education through university, TAFE or external studies, by offering learning and development leave and/or financial assistance. Fourteen employees received assistance to pursue external studies during 2014–15. One employee completed the AGD Leadership and Management Development ‘Ignite’ Program, and another commenced the AGD Leadership and Management Development ‘Accelerate’ Program. Public Trustee engaged one trainee on a 12-month traineeship through the ‘Jobs4Youth’ Program. Training and Development In 2014–15, Public Trustee continued its commitment to the development of employees. Except for those on extended absences, all staff undertook a performance review discussion, in line with the AGD Performance Development Process. The training needs identified during the performance review process will be used as the basis for developing the 2015–16 Public Trustee Training Plan. Fresh approaches to training and development were also initiated during the year. These included creating a job exchange register whereby staff can register to work in a position at the same level as their own position to gain a greater knowledge and understanding of the Public Trustee business. In 2014–15, 176 Public Trustee employees undertook training and development in a range of topics including professional development, business skills development, customer service, ICT matters, workplace health and wellbeing, marketing and communication and leadership courses. In addition, ‘Fast Training’ and ‘Hot Topics’ (internal training topics) were developed to share and increase the corporate knowledge of staff through specific sessions or attendance at branch meetings.


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Feedback from our Staff Climate Survey, conducted in 2014, indicated that staff of the Public Trustee supported a rewards and recognition program. Staff were consulted and a Public Trustee Staff Recognition Program was implemented early in 2015. The program allows any staff member to be nominated for outstanding service, whether they are serving Public Trustee’s customers directly or providing service to other staff internally. Nominated staff, whose managers agree they should be recognised, will be invited to receive their recognition at a quarterly meeting of managers from across the organisation. AGD Reconciliation Action Plan July 2014 – June 2017 The AGD sponsors a Reconciliation Action Plan Committee chaired by the Equal Opportunity Commissioner. Public Trustee has representation on this committee. The work of the committee reflects the AGD’s commitment to acknowledging and respecting Aboriginal people. One of the strategies of the Reconciliation Action Plan is to install Aboriginal artworks in prominent locations in the department or its agencies. To this end, Public Trustee purchased Ripples in the Dunes by Samantha Snow, an Indigenous artist. Samantha was born in Adelaide and is a descendant of a member of the Stolen Generation. A talented young artist, Samantha has won multiple awards for her paintings. The painting hangs in the main reception area of Public Trustee at Shop 1, 211 Victoria Square, Adelaide.

Debra Contala and Samantha Snow, the artist.


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Financial Sustainability Market Research In May 2015, Public Trustee conducted market research to support future planning for marketing our services and community engagement. The research included feedback from focus groups and an online questionnaire. The results of the research indicate that an area of focus should be to raise community awareness of: What happens if people die without having a Will; The importance of having a professionally prepared Will; and Public Trustee as a maker of Wills.

This feedback will be addressed in our ongoing community engagement program and through the marketing campaign to be developed in the coming year. Public Relations and Community Engagement Public Trustee aims to inform the community about the importance of having a valid Will and an Enduring Power of Attorney, and to this end delivered a range of tailored presentations across the state during 2014–15. Over the past 12 months, staff attended 46 different talks and events providing targeted information about specific issues for groups such as carers, aged care workers, and other stakeholders. Staff also provided general advice and guidance to the community enquiring about Wills, deceased estates and other trustee services through telephone, internet and written enquiries. Promotional and Community Events The Disability and Lifestyle Expo held at Wayville and the World Elder Abuse Awareness Day Conference held at the Adelaide Convention Centre, featured information booths staffed by Public Trustee this year. We undertook three and five-day promotions at six shopping centres in Victor Harbor, Munno Para, Mt Barker, West Lakes, Tea Tree Plaza and Marion. Face-to-face community interaction continued to be a most important way of raising community awareness about Public Trustee and our services.


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Financial Performance Corporate Financial Overview 2014–15 Public Trustee achieved an operating surplus before tax of $1.156 million. The operating surplus after income tax equivalents was $809 000 compared to a budgeted operating surplus of $252 000. Financial Outcomes The following tables and figures provide summaries of the Statement of Comprehensive Income 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. Table 15: 2014–15 Summary of Statement of Comprehensive Income Actual Budget Actual 2014–15 2014–15 2013–14 $000s $000s $000s Revenue from Ordinary Activities 22 646 22 358 23 600 Expenses from Ordinary Activities 21 837 22 106 21 676 Net Operating Surplus from Operating Activities 809 252 1 924 Total Changes in Equity (before dividend payment) 809 252 1 924 Total Changes in Equity (after dividend payment) (631) (942) 618

Commissions and fees from core business activities were $590 000 below with budget. Favourable outcomes against budget in both management fees ($377 000 favourable) and investment returns ($500 000 favourable) were due primarily to buoyant market returns and in particular equities markets. Savings in expenditure totalling $508 000 when compared to budget contributed to the favourable outcome. Factors contributing to this result include: A concerted effort to exercise expenditure restraint during 2014–15; and Savings in depreciation due to timing of capital expenditure.


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Table 16: 2014–15 Summary Statement of Cash Flows

Actual Actual

2014–15 2013–14 $000s $000s Operating Activities

Receipts 24 044 24 252 Payments (23 303) (23 068) Net Cash from Operating Activities 741 1 184 Investing Activities Receipts 1 1 Payments (3 848) ( 239) Net Cash used in Investing Activities (3 847) ( 238) Financing Activities Receipts - - Payments (1 440) (1 528) Net Cash used in Financing Activities (1 440) (1 528) Net increase in Cash Held (4 546) (582) Cash at Beginning of Reporting Period 11 305 11 887 Cash at End of Reporting Period 6 759 11 305 The major movements in the statement of cash flow are as follows:- the movement in operating activities reflects the outcomes in the Statement of

Comprehensive Income; cash outflows in investing activities reflect the payment for fixed interest notes, additional

purchase of units in Australian equities pooled funds and fixed assets; and cash outflows in financing activities reflects the payment of a final dividend for 2013–14

and an interim dividend for 2014–15 to the State Government. Table 17: 2014–15 Comparison of Total Assets to Total Liabilities

As highlighted in the table above, the value of Public Trustee assets is lower than the previous year. This primarily due to the reduction in the value of plant and equipment through depreciation/amortisation.


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Table 18: 2014–15 Summary of Key Performance Indicators Actual Budget Actual 2014–15 2014–15 2013–14

Profit Before Tax ($000s) 1 156 360 $2 749

Profit Margin Ratio 5.1% 1.6% 11.7%

Return on Assets 3.5% 1.1% 8.1%

Current Ratio 2.5 3.6 3.5

Capital Adequacy Ratio 2.2% 2.0% 2.3%

Cost-to-Revenue Ratio 94.9% 98.4% 88.4%

Dividend Payout Ratio 178.1% 473.4% 67.9%

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 increased this year due to:- unrealised gains in 2014–15 being $1.16 million less than in the previous year; and an overall increase in expenditure of 3%.

A concerted effort to reduce expenditure has resulted in savings of $269 000 when compared to budget. The capital adequacy ratio defines an appropriate level of funding to meet working capital and the long-term capital expenditure requirements of the office. A capital adequacy ratio of 2% has been agreed as appropriate by the Department of Treasury and Finance. An additional final dividend for 2013–14 of $$980 000 was approved and paid to Government in October 2014. An interim dividend of $460 000 for 2014–15 was also paid to Government in June 2015. Customer Investment Performance For the year ended 30 June 2015, Public Trustee’s investment strategies performed well. Overseas shares were the best-performing asset class delivering 25.2% on an unhedged basis. The Australian share market delivered a respectable return of 5.6% for the year, despite a poor month in June. Australian-listed property was a standout for the year, returning 20.2%. During the financial year, the Australian dollar depreciated notably against most major currencies finishing the financial year at $0.77 US, 18% lower than a year earlier. In May 2015, the Reserve Bank of Australia cut interest rates to an all-time low of 2%, whilst over the course of the financial year global interest rates generally declined. All of Public Trustee’s investment strategies outperformed their respective benchmarks, with returns ranging from between 2.72% for cash to 10.99% for the equities strategy (net of fees). The investment returns for five years demonstrate that our long-term performance is strong and stable and continues to exceed benchmarks.


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Table 19: 2014–15 Standard Investment Strategies’ 5-year performance

2014–15 Performance

Last 12 Months Annualised

%

3 Years Annualised

%

5 Years Annualised

%

Cash 2.7 3.3 4.1 benchmark 1.6 1.9 2.7 variance 1.1 1.4 1.4 Capital Stable 4.9 6.9 6.6 benchmark 4.5 6.1 5.9 variance 0.4 0.8 0.7 Balanced 7.0 10.5 9.0 benchmark 6.9 9.9 8.4 variance 0.1 0.6 0.6 Growth 8.5 13.3 10.5 benchmark 8.1 12.7 9.7 variance 0.4 0.6 0.8 Equities 11.0 17.8 12.3 benchmark 10.1 17.3 11.3 variance 0. 9 0.5 1.0

Public Trustee takes a highly active role in managing customer funds. We regularly engage with our fund managers, consultants and industry professionals to ensure customer portfolios are managed prudently. We continue to monitor developments in Australia and global trends to ensure adequate protection is in place for our investors. During the financial year, Public Trustee made some enhancements to our suite of investment managers. A new specialist infrastructure manager was appointed, whose investments comprise a quality, diversified portfolio, including airports, toll roads, utilities and seaports. Another appointment was a specialist fixed-income manager, whose aim is to seek out the best return potential in the current market environment. Their investment style is very well aligned with Public Trustee’s objective, which is to deliver consistent positive absolute returns, capital stability and an income stream for our customers. Public Trustee believes this manager is well placed to navigate the challenging low interest rate environment coupled with the possibility of potential interest rate rises in the United States. Public Trustee continues to closely monitor global economic conditions and asset class valuations to ensure customer funds are managed prudently. Wherever possible we seek to add value for customers through sound asset allocation decisions and responsible risk management. A disciplined investment process continues to emphasise value, quality and effective risk management. It is a philosophy that has come from our long investment experience in understanding the financial needs of our customers and the opportunities and risks of financial markets. Overall, the performance of the funds has been more than satisfactory this financial year. Our bias towards quality investments and long-term focus continues to be beneficial. Set out below is the performance of Public Trustee’s Standard Investment Strategies (SIS) versus their targets.


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Table 20: 2014–15 SIS Performance versus CPI Objectives (as at 30 June 2015) Investment

Strategy CPI Objective Investment Horizon

Target Return % pa

Actual Return % pa

Over (+)/Under(-)

Outperformance % pa

Capital Stable CPI + 2% pa 3 Years 4.3% 6.9% + 2.6%

Balanced CPI + 3% pa 5 Years 5.3% 9.0% + 3.6% Growth CPI + 3.5% pa 7 Years 5.8% 7.3% + 1.5% Equities CPI + 4% pa 10 Years 6. 7% 7.3% + 0.7%

The Corporate and Financial Information section of this report contains details of the 2014-15 Asset Allocation, Manager of Funds Statement, the Peer Group Comparisons, the Common Funds Statutory Information of Indirect Cost Ratios, Fees and the Classes of Investment in which the Common Funds may invest. 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 2015 and the Common Funds Financial Report are also contained in the Corporate and Financial Information section of this report. 2014–15 Asset Allocation Table 21: 2014–15 Asset Allocation Capital Stable Standard Investment Strategy

Common Fund Allocation (%) - 2015 Allocation (%) - 2014

Neutral

Period End $m Neutral

Period End $m

Australian Shares 12.0% 11.3% $8.07 12.0% 11.6% $7.99 Overseas Shares 8.0% 9.4% $6.68 8.0% 8.1% $5.61 Listed Property Securities 5.0% 5.0% $3.55 5.0% 5.3% $3.63 Long Term Fixed Interest 15.0% 15.0% $10.68 15.0% 14.9% $10.29 Short Term Fixed Interest 30.0% 29.5% $20.99 30.0% 30.0% $20.70 Overseas Fixed Interest 10.0% 10.2% $7.25 10.0% 10.1% $7.00 Cash 20.0% 19.7% $14.03 20.0% 20.0% $13.81

100.0% 100.0% $71.24 100.0% 100.0% $69.01 Balanced Standard Investment Strategy Common Fund Allocation (%) - 2015 Allocation (%) - 2014

Neutral


Period End $m


100.0% 100.0% $208.78 100.0% 100.0% $206.05


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Growth Standard Investment Strategy Common Fund Allocation (%) - 2015 Allocation (%) - 2014

Neutral


Period End $m


100.0% 100.0% $209.21 100.0% 100.0% $202.91 Equities Standard Investment Strategy Common Fund Allocation (%) - 2015 Allocation (%) - 2014

Neutral


Period End $m

Australian Shares 55.0% 49.7% $39.67 55.0% 53.8% $42.36 Overseas Shares 45.0% 50.3% $40.19 45.0% 46.2% $36.44

100.0% 100.0% $79.86 100.0% 100.0% $78.80 Manager of Funds During 2014–15, Public Trustee continued its policy of engaging external fund managers for all funds except for cash and Australian fixed interest. Investment assessment of external fund managers requires ongoing monitoring and performance review. This process provides Public Trustee with access to expert advice, without sacrificing control over the style and balance of the common funds. Peer Group Comparisons - Comparative returns to 30 June 2015 (after fees) Table 22: 2014–15 Peer Group Comparisons 1 YR % 3 YR % 5 YR %

Public Trustee Peer Group Public Trustee Peer Group Public Trustee Peer Group

Cash 2.7 2.4 3.3 2.9 4.1 3.0 Capital Stable 5.0 5.8 6.9 7.8 6.6 6.9 Balanced 7.0 8.1 10.5 10.8 9.0 8.5 Growth 8.5 9.0 13.3 13.2 10.5 9.6 Equities 11.0 10.5 17.8 15.3 12.3 10.2

* Note: the peer group returns are based on a survey of multi-sector unit trusts that have similar asset allocations to Public Trustee strategies.


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Organisational Support Corporate Services The Corporate Services Branch is responsible for the implementation of policies and procedures relating to the management of corporate assets and resources, financial and management accounting, human resources, marketing, project management, procurement, accommodation and facilities, records and fleet management, telephone network services, inspecting and insuring estate properties and general Administrative services. The branch also assists in management of risk mitigation across the organisation through management and reporting of the Control Self-Assessment process, general office security and by membership of the Security Steering Group (SSG). Sustainability Reporting 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. Public Trustee is continually looking to improve the environmental sustainability of its operations. The offices are equipped with low-emission furniture and carpet as well as low-voltage lighting. Current processes include recycling programs for paper and toner cartridges, use of recycled paper, movement-detector lights after hours, and separation of waste for recycling purposes. Public Trustee endeavours to ‘buy green’ when making purchases. Corporate Account Payment Performance Treasurer’s Instruction 11 requires all undisputed accounts to be paid within 30 days of the date the invoice is first received by the public authority, unless there is a discount or a written agreement between the agency and the creditor. In 2014–15, Public Trustee paid 99% of all invoices by the due date. Details of Public Trustee’s performance outcome can be found on the Department of Treasury and Finance (DTF) website at www.treasury.sa.gov.au or click here Consultancies Public Trustee did not engage any consultants during the year. Overseas Travel Details about overseas travel can be found on the Attorney-General’s Department website www.agd.sa.gov.au/about-agd/public-online-access-government-information#mtd or click here Public Sector Fraud Public Trustee builds control points and mechanisms into its policies and procedures to mitigate the risk of fraud. As part of the ongoing internal audit, with the assistance of our internal auditor, current key internal controls have been compared with better practice financial controls. This enables Public Trustee to identify any control gaps that expose the organisation to immediate risks. Policies and procedures are continually reviewed and updated to include any additional controls necessary to mitigate or reduce risk. Any additional controls are embedded into the control self-assessment program.

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

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

http://www.agd.sa.gov.au/about-agd/public-online-access-government-information#mtd

http://www.agd.sa.gov.au/about-agd/public-online-access-government-information#mtd


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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 the 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 the operations of the Corporate Services Division and the general management of the office are open to scrutiny under the provisions of the Act. There is no charge for requests, where information can be obtained by producing existing reports. For more complex requests, fees and charges will be levied as prescribed in the current regulations under the Act. Public Trustee received three requests for information during the 2014–15 financial year. All applications under the Act in relation to Public Trustee should be made in writing to: The Accredited FOI Officer Attorney-General’s Department GPO Box 464 Adelaide South Australia 5001 Information Privacy Principles The State Government of South Australia is committed to protecting the privacy of a customer’s 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 ICT Services Branch provides information, communication and technology management services to Public Trustee including managing the IT infrastructure; providing helpdesk, application and desktop support services; implementing information security strategies; and providing database and software development services. Supporting the Public Trustee Strategic Plan 2014–17, an ICT Strategic Plan for the period 2015–17 was developed and approved. We made considerable progress against that Plan in 2014–15.


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This year, governance and security were given particular emphasis by the branch, including the following activities: Our ICT Committee comprised of senior managers and team leaders assisted with

setting priorities; Key technology governance controls areas were reviewed. The review produced a series

of actions to be implemented; An assessment was completed and we subsequently strengthened the security of the

network; Our Information Security Management System was assessed for compliance against

government standards; and Disaster recovery and business continuity arrangements were further strengthened.

The future of Public Trustee’s core business systems remains under consideration and the Department of Treasury and Finance and the Office of Digital Government were consulted on possible future system requirements. There will be further work on this in 2015-16. Improving the quality of data that is stored in our systems has remained a priority and Public Trustee’s Data Governance Group provided leadership over the management of data assets. A range of projects to improve data management practices was undertaken, including data integrity and cleansing activities. To improve productivity and staff security associated with attendance at off-site meetings, in particular for SACAT hearings, video-conferencing facilities were installed and relevant staff trained in the use of the system. Public Trustee also commissioned the development of an ICT Workforce Plan to establish the current capability of the ICT team and the improvements needed to team structures and roles to meet future business requirements. ICT infrastructure was appropriately maintained and replaced in accordance with an infrastructure sustainment plan. Upgrades for aged ICT network infrastructure and aged desktop computers and printers were undertaken to ensure a stable, sustainable ICT environment for the organisation. Client Financial Services Branch The Client Financial Services Branch provides professional accounting and administration support to customer services staff and Public Trustee customers. The Funds Administration Section is responsible for performance, accounting, reporting and taxation outcomes that relate to the management of the Standard Investment Strategies and Common Funds administered by Public Trustee. Managed customer funds, including superannuation investments, were valued at $1001.0 million, as at 30 June 2015. The Client Accounting Section receives funds for, and makes payments to, Public Trustee customers. Payments include critical regular payments for food, accommodation and other living expenses to customers who are unable to manage their own financial affairs. For the financial year to 30 June 2015, the accounts payable function made 397 806 payments to the value of $289.1 million and the accounts receivable function receipted $265.9 million. Public Trustee also provides asset management services for customers with assets under administration (in addition to managed funds), totalling $378 million.


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Table 23: 2014–15 Client Financial Services Activity Key Statistics 2014–15 2013–14 Funds under administration (including superannuation) $1 008.0 m *$959.0 m

New funds invested for the reporting period $44.4 m $40.0 m

Funds redeemed for the reporting period $52.1 m $85.5 m Total Common Fund trades for the reporting period $1 682.7 m $1 232.5 m

Distributions to customers $19.6 m $18.4 m Total number of payments made 397 806 380 058 Total value of payments made $289.1 m $324.1 m Number of payments for food, clothing, accommodation and other living expenses 166 069 161 327

Value of payments for food, clothing, accommodation and other living expenses $35.9 m $33.9 m

Number of payments for personal living expenses 102 281 91 400

Value of payments for personal living expenses $8.7 m $7.7 m

Total customer funds receipted value of pensions included

$265.9 m $64.4 m

$257.1 m $62.5 m

Total value of real estate properties held $308.5 m $283.7 m Total value of managed customer assets $1 379.1 m $1 304.1 m *adjusted to include superannuation Investment Services Public Trustee is responsible for the management of more than $902 million of customers’ funds and $106 million of superannuation assets. The majority of the investments are managed through five Standard Investment Strategies (refer to the Corporate and Customer 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 adviser. Key investment highlights for the year included: The achievement of excellent returns across all investment strategies; Out-performance against industry benchmarks for all strategies (one, three and five

years); The addition of new specialist investment managers for infrastructure and fixed income

investments; and Surpassing $1billion in funds (includes superannuation) under management.

Public Trustee investment funds provide income, growth and security for customers through diversification across asset sectors, and in accordance with Public Trustee’s obligations under the Public Trustee Act 1995 and the Trustee Act 1936. Beneficiaries of estates administered by Public Trustee and other investors chose to invest $301 million ($279 million in 2013–14) of their funds with Public Trustee.


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Corporate and Customer Financial Information


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Public Trustee Certification of Financial Statements

Original signed 9 September 2015 Debra Contala

Original signed 9 September 2015 Tony Brumfield


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Auditor General’s Audit Certificate Page 1


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Page 2

Original signed 16 September 2015

Public Trustee CORPORATE

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Public Trustee Corporate Financial Statements

Note 2015 2014$'000 $'000

Income

Fees and charges 4(a) 20 820 20 956Interest 4(b) 728 773Gain from the disposal of fixed assets 1 1 Unrealised gains on financial assets 331 1 486Other income 4(c) 766 384

Total income 22 646 23 600

Expenses

Employee benefits 5(a), 5(b), 5(c), 5(d) 14 753 14 352Supplies and services 5(e) 5 845 5 722Depreciation and amortisation 892 777

Total expenses 21 490 20 851

Profit before income tax equivalents 1 156 2 749

Income tax equivalent 2(c) 347 825

809 1 924

809 1 924

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

Statement of Comprehensive Incomefor the year ended 30 June 2015


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Note 2015 2014$'000 $'000

Assets:

Current assets

Cash and cash equivalents 16 6 759 11 305Receivables 6 931 612

Total current assets 7 690 11 917

Non-current assets

Financial assets 7, 8 21 361 17 419Plant and equipment 9 3 474 4 150Intangible assets 10 436 415

Total non-current assets 25 271 21 984

Total assets 32 961 33 901

Liabilities:

Current liabilities

Payables 11 1 289 1 793Lease Incentive 268 268 Employee benefits 12 1 444 1 314Provisions 13 16 15

Total current liabilities 3 017 3 390

Non-current liabilities

Payables 11 419 421Lease Incentive 1 048 1 316Employee benefits 12 4 216 3 881Provisions 13 35 36

Total non-current liabilities 5 718 5 654

Total liabilities 8 735 9 044

Net assets 24 226 24 857

Equity:

Retained earnings 24 226 24 857

Total equity 24 226 24 857

Contingent assets and liabilities 14

Unrecognised contractual commitments 17


Statement of Financial Positionas at 30 June 2015


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Note

Reserves

Retained Earnings

Total

$'000 $'000 $'000

Balance as at 30 June 2013 - 24 239 24 239

Profit/(Loss) after income tax equivalent - 1 924 1 924Total comprehensive result for 2013/14 - 1 924 1 924

Transactions with State Government as ownerDividends provided for 13 - (1 306) (1 306)


Profit/(Loss) after income tax equivalent - 809 809Total comprehensive result for 2014/15 - 809 809

Transactions with State Government as ownerDividends paid 13 - (1 440) (1 440)



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

Statement of Changes in Equityfor the year ended 30 June 2015


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Note 2015 2014Inflows Inflows

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

Cash flows from operating activities:

Cash inflowsFees and charges 22 893 23 090Sundry income 27 25Interest 727 858Distributions 397 279

Cash generated from operations 24 044 24 252Cash outflowsEmployee benefits (14 279) (14 049)Supplies and services (6 685) (7 174)Tax equivalents ( 889) ( 475)GST remitted to ATO (1 450) (1 370)

Cash used in operations (23 303) (23 068)

Net cash provided by operating activities 15(b) 741 1 184

Cash flows from investing activites:

Cash inflowsProceeds from disposal of plant and equipment 1 1

Cash generated from investing activities 1 1 Cash outflowsFinancial assets (3 611) ( 4)Purchase of plant and equipment ( 101) ( 67)Purchase of intangibles ( 136) ( 168)

Cash used in investing activities (3 848) ( 239)

Net cash used in investing activities (3 847) ( 238)

Cash flows from financing activities:

Cash outflowsDividend distribution to State Government 15(c) (1 440) (1 528)

Net cash used in financing activities (1 440) (1 528)

Net increase/(decrease) in cash and cash equivalents (4 546) ( 582)

Cash and cash equivalents at 1 July 11 305 11 887

Cash and cash equivalents at 30 June 16 6 759 11 305

Statement of Cash Flowsfor the year ended 30 June 2015


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Public Trustee Corporate Financial Statements NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

1 Objectives of Public Trustee

The office of the Public Trustee was established in 1881 and is constituted under the provisions of the Public Trustee Act 1995. The Public Trustee is a statutory officer pursuant to the Public Trustee Act 1995. Public Trustee is a body corporate with the powers of a natural person. The role of the Public Trustee is to provide all South Australians with access to will making services, powers of attorney preparation and deceased estate and trust administration. Public Trustee also has a role in managing the financial affairs of those people in the community who lack the capacity to manage their own affairs as determined by the courts, the South Australian Civil and Administrative Tribunal (SACAT) 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 2015 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.

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. Public Trustee has applied Australian Accounting Standards that are applicable to not-for-profit entities, as Public Trustee is a not-for-profit entity. Except for AASB 2015-7 which has been early adopted, 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 2015. Refer to Note 3.

Basis of preparation The preparation of the financial statements require: − the use of certain accounting estimates and requires management to exercise its judgement in the process

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

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

− compliance with accounting policy statements issued pursuant to section 41 of the Public Finance and

Audit Act 1987. In the interest of public accountability and transparency the accounting policy statements require the following note disclosures, which have been included in these financial statements:

(i) revenues, expenses, financial assets and liabilities where the counter-party/transaction is with an

entity within the SA Government as at reporting date, classified according to their nature;

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

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

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

(v) board/committee member and remuneration information, where a board/committee member is

entitled to receive income from membership other than a direct out-of-pocket reimbursement.


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The Public Trustee Statement of Comprehensive Income, Statement of Financial Position and Statement of Changes in Equity have been prepared on an accrual basis and are in accordance with the historical cost convention, except for certain assets that were valued in accordance with the valuation policy applicable. The Statement of Cash Flows has been prepared on a cash basis. The financial statements have been prepared based on a twelve month operating cycle and presented in Australian currency. The accounting policies set out below have been applied in preparing the financial statements for the year ended 30 June 2015 and the comparative information presented for the year ended 30 June 2014.

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 2015 Public Trustee has not applied an accounting policy retrospectively or made a retrospective restatement of items or reclassified items in the financial statements.

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.

d) Events after the reporting period

Where an event occurs after 30 June 2015 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.

e) Basis of valuation

Non-current assets and liabilities with the exception of Employee Benefits, are carried at deemed fair value. Fair Value measurement AASB 13 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants, in the principal or most advantageous market, at the measurement date. Public Trustee classifies fair value measurement using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements, based on the data and assumptions used in the most recent revaluation. • Level 1 – traded in active markets and is based on unadjusted quoted prices in active markets for

identical assets or liabilities that the entity can access at measurement date. • Level 2 – not traded in an active market and are derived from inputs (inputs other than quoted prices

included within level 1) that are observable for the asset, either directly or indirectly. • Level 3 – not traded in an active market and are derived from unobservable inputs.

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


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

Plant and equipment and intangible assets are depreciated or amortised on a straight-line basis over their estimated useful lives, commencing from the time the asset is held ready for use. Amortisation is used in relation to intangible assets such as software, while depreciation is applied to physical assets such as plant and equipment. The depreciation/amortisation rates used for each class of depreciable assets are: Class of fixed asset Depreciation rate Plant and equipment 20% - 27% Software 20% - 27% Accommodation fit out 10%

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

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

• Investments: on acquisition are brought to account at cost and subsequently revalued at the balance date

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

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

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

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.


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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.

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

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.

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 3% inflation rate as recommended in Accounting Policy Framework IV, paragraphs 5.7 and 5.8. 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. The liability was measured by an actuarial assessment performed by the Department of Treasury and Finance based on Public Trustee employee data. Expected future payments are discounted using market yields at the end of the reporting period on government bonds with durations that match, as closely as possible, the estimated future cash outflows. This calculation is consistent with Public Trustee’s experience of employee retention and leave taken. The current liability portion has been based on the past history of annual payments.

Sick leave No provision has been made in respect of sick leave, as entitlements are non-vesting. As sick leave taken by employees is considered to be taken from the current year’s accrual, no liability is recognised.


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i) Leases The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement. Public Trustee has assessed whether the fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset. Public Trustee has entered into operating leases. Operating lease payments are recognised as an expense in the Statement of Comprehensive Income on a straight-line basis over the lease term. The straight-line basis is representative of the pattern of benefits derived from the leased assets.

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

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

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.

l) Receivables

Receivables comprise debtors, accrued investment income, income tax equivalent refund due, prepayments and doubtful debts. 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. Collectability of receivables is reviewed on an ongoing basis. An allowance for doubtful debts is raised when there is objective evidence that Public Trustee will not be able to collect the debt. Bad debts are written off when identified.

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, skis and experience retention leave and annual leave.


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n) Provisions

The workers compensation provision is an actuarial estimate of the outstanding liability as at 30 June 2015 provided by a consulting actuary engaged through the Office for the Public Sector. 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.

o) Accounting for the Goods and Services tax (GST) Income, expenses and assets are recognised net of the amount of GST except that: - The amount of GST incurred by Public Trustee as a purchaser that is not recoverable from the Australian

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

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

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.

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

Except for AASB 2015-7 which Public Trustee has early adopted, 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 2015. 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

a) Fees and charges

2015 2014 $’000 $’000 Commissions1 10 610 10 900 Fees and charges1 1 842 1 946 Management Fees2 8 368 8 110 Total fees and charges 20 820 20 956

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.


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b) Interest 2015 2014 $’000 $’000 Interest on operating and reserve accounts 38 53 Interest on fixed term investments 690 720 Total interest 728 773

c) Other income

2015 2014 $’000 $’000 Recoupment of salaries and oncosts - 2 Sundry income 27 23 Distributions from trusts 739 359 Total other income 766 384

5 Expenditure

a) Superannuation

During 2014-15 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.

b) Remuneration of employees

The number of employees whose remuneration received or receivable fell within the following bands:- 2015 2014 Number of

Employees Number of

Employees $141 500 - $151 4991 1 1 $221 500 - $231 499 1 - $231 500 - $241 499 - 1 $241 500 - $251 499 1 1 $281 500 - $291 499 1 1 4 4

1One officer received payments for accrued long service leave in lieu of leave in 2013-14.

The table includes all employees who received remuneration equal to or greater than the base executive remuneration level during the year. The executive base level remuneration rate for 2014-15 is the same as the 2013-14 rate (ie there has been no increase in executive remuneration since 1 July 2013). Remuneration of employees reflects all costs of employment including salaries and wages, payments in lieu of leave, superannuation contributions, salary sacrifice benefits and any fringe benefits tax paid or payable in respect of those benefits. Total remuneration received or due and receivable by these employees was $901 000 ($924 000).

c) Targeted voluntary separation packages (TVSPs)

Public Trustee provided for no TVSPs during 2014-15 or the previous year.

d) Remuneration of board and committee members Members that were entitled to receive remuneration for membership during the 2014-15 financial year were:

Public Trustee Audit and Risk Management Committee Ms Christine Locher Ms Virginia Hickey

The number of members whose remuneration received or receivable fell within the following bands:- 2015 2014 Number of

Members Number of

Members $0 - $9 999 1 3 $10 000 - $19 999 1 - 2 3 The total remuneration received or receivable by members was $19 000 ($18 000).


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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.

e) Supplies and services

2015 2014 $’000 $’000 Minor works, maintenance and equipment 13 15 Insurance 206 202 Information technology 1 493 1 552 Accommodation and telecommunication 1 850 1 773 Legal expenses 37 71 Service contractors 905 857 Other Supplies and services 1 164 1 018 Auditors remuneration1 177 173 Consultancies2 - 61 Total supplies and services 5 845 5 722 1Audit fees paid/payable to the Auditor General’s Department relating to the audit of financial statements. No other services were provided by the Auditor General’s Department. 2Public Trustee paid for no consultancies in 2014-15. There were two consultancies in 2013-14 for amounts of between $10 000 and $50 000.

6 Receivables

2015 2014 $’000 $’000

Current receivables Debtors 20 39 Doubtful debts (3) - Accrued investment income 716 373 Prepayments 198 200 Total Receivables 931 612

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.

2015 2014 $’000 $’000

Non-current financial assets Australian fixed interest 3 000 - Australian fixed interest (pooled funds) 7 106 7 077 International equities (pooled funds) 4 420 4 263 Australian listed property (pooled funds) 1 575 1 354 Australian equities (pooled funds) 5 260 4 725 Total financial assets 21 361 17 419


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8 Financial instruments

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.

b) Investment in collective investment vehicles In addition to holding financial instruments directly, Public Trustee has invested in collective investment vehicles for the purpose of gaining exposure to Australian and International assets. The managers of such vehicles have invested in a variety of financial instruments, which expose Public Trustee to investment risks, including market risk, credit risk, interest risk and currency risk. Public Trustee has assessed the investment rules of these collective investments and determined their suitability as investments.

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.

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 directly 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.


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Sensitivity analysis – 30 June 2015 Interest Rate Risk Price Risk - + - +

Carrying Amount

$'000

1% State-

ment of Compre-hensive Income $’000

1% State-


20% State-


10% State-


Financial assets Cash and cash equivalents

6759 (68) 68 - -

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

FRN 3 000 (30) 30 - -

Australian fixed interest (pooled funds)

7 106 (71) 71 - -

International equities (pooled funds)

4 420 - - (884) 442

Australian listed property (pooled funds)

1 575 - - (315) 157

Australian equities (pooled funds)

5 260 - - (1 052) 526

Total (decrease)/increase (169) 169 (2 251) 1 125

Sensitivity analysis – 30 June 2014 Interest Rate Risk Price Risk - + - +

Carrying Amount

$'000

1% State-


1% State-


20% State-


10% State-


Financial assets Cash and cash equivalents

11 305 (113) 113 - -

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

(pooled funds) 7 077 (71) 71 - -

International equities (pooled funds)

4 263 - - (853) 426

Australian listed property (pooled funds)

1 354 - - (271) 135

Australian equities (pooled funds)

4 725 - - (945) 473

Total (decrease)/increase (184) 184 (2 069) 1 034

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.


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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.

2015 2014 $’000 $’000 Cash at bank, short-term bank deposits and floating rate notes A1+ 1 759 2 805 A2 5 000 8 500 Total cash at bank, short-term bank deposits and floating rate notes 6 759 11 305

2015 2014 $’000 $’000 Long-term bank deposits A 3 000 - Total long-term bank deposits 3 000 -

2015 2014 $’000 $’000 Trade receivables Counterparties with external ratings

A1+ 3 11 A2 31 46 A 7 - Counterparties without external ratings Existing customers with no defaults in the past 890 555 Total trade receivables 931 612

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 current financial assets held to maturity have a maturity date within 12 months. Pooled Funds investments have no maturity date.


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9 Plant and equipment 2015 Opening

Balance Addit-ions

Dispos-als

Deprec-iation

Revaluation / Other

Closing Balance

$’000 $’000 $’000 $’000 $’000 $’000 Plant and equipment at cost

1 287 34 (13) - - 1 308

Accommodation fit-out

6 254 - - - - 6 254

Work in progress at cost

- 67 - - - 67

Total plant and equipment 7 541 101 (13) - - 7 629

Less: accumulated depreciation Plant and equipment

(909) - 13

(152) - (1 048)


(2 482) - - (625) - (3 107)

Total accumulated depreciation (3 391) - 13 (777) - (4 155)

Net plant and equipment 4 150 101 - (777) - 3 474

2014 Opening Balance

Addit-ions

Dispos-als

Deprec-iation

Revaluation / Other

Closing Balance

$’000 $’000 $’000 $’000 $’000 $’000 Plant and equipment at cost

1 011 360 (84) - - 1 287


6 254 - - - - 6 254

Work in progress at cost

293 (293) - - - -

Total plant and equipment 7 558 67 (84) - - 7 541

Less: accumulated depreciation Plant and equipment

(859) - 84

(134) - (909)


(1 857) - - (625) - (2 482)

Total accumulated depreciation (2 716) - 84 (759) - (3 391)

Net plant and equipment 4 842 67 - (759) - 4 150

Plant and Equipment assets are classified as Level 3 assets for fair value purposes as valuation is based on management’s assessment of useful life and condition. The significant input to the valuation is management’s assessment of useful life which is disclosed in Note 2(e). There have been no movements in the fair value of Plant and Equipment other than movements as a result of additions, disposals and current year depreciation as shown above.


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10 Intangible assets

2015 Opening

Balance Addit-ions

Dispos-als

Amort-isation

Revaluation / Other

Closing Balance

$’000 $’000 $’000 $’000 $’000 $’000 Software at cost 6 525 6 - - - 6 531 Work in progress at cost

- 130 - - - 130

Less: accumulated

ammortisation

(6 110) - - (115) - (6 225)

Total intangible assets 415 136 - (115) - 436

Work in progress items are transferred to intangible assets when ready for use. 2014 Opening

Balance Addit-ions

Dispos-als

Amort-isation

Revaluation / Other

Closing Balance

$’000 $’000 $’000 $’000 $’000 $’000 Software at cost 6 100 425 - - - 6 525 Work in progress at cost

257 (257) - - - -

Less: accumulated ammortisation

(6 092) - - (18) - (6 110)

Total intangible assets 265 168 - (18) - 415

11 Payables

2015 2014 $’000 $’000 Current liabilities Trade creditors and accrued expenses 616 601 Income tax equivalents 141 683 GST payable 326 314 Employment on-costs 206 195 1 289 1 793 Non-current liabilities Employment on-costs 419 421 Total payables 1 708 2 214

12 Employee benefits

2015 2014 $’000 $’000 Current Liabilities Long service leave1 279 254 Accrued salaries 196 149 Recreation leave2 820 800 Skills and experience retention leave2 149 111 1 444 1 314 Non-current liabilities Long service leave1 4 216 3 881 Total employee benefits 5 660 5 195 1The actuarial assessment performed by the Department of Treasury and Finance has provided the basis for the calculation of the long service leave liability. AASB 119 requires the use of the yield on long-term Commonwealth Government bonds as the discount rate in the measurement of the long service leave liability. The yield on long-term Commonwealth Government bonds has decreased to 3% (3.5%). The net financial effect of the decrease in the bond yield is an increase in the long service leave liability of $134 000 and employee benefits expense of $146 000. The actuarial assessment did not change the salary inflation rate


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assumption of 4 % for long service leave liability. As a result, there is no net financial effect resulting from changes in the salary inflation rate. Accounting Policy Framework IV outlines that the proportion of long service estimated to be taken as leave has decreased to 37% (40%). 2The actuarial assessment performed by the Department of Treasury and Finance revised the salary inflation rate down by 1% from 2014 (4%) to 2015 (3%) for annual leave and skills, experience and retention leave liability. The net financial effect of the changes in the current financial year are a decrease in the annual leave liability by $7 900, skills, experience and retention leave liability of $1400 and employee benefits expense of $10 800.

13 Provisions 2015 2014

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

Provision for workers’ compensation2 16 15 16 15 Non-current Liabilities Provision for workers’ compensation2 35 36 Total provisions 51 51

2015 2014 $’000 $’000 Provisions for dividend Provision for dividend to State Government at 1 July1 - 222 Add: additional provision recognised1 1 440 1 306 Less: payments to State Government (1 440) (1 528) Provision for dividend at 30 June - -

2015 2014

$’000 $’000

Provision for workers’ compensation Provision for workers’ compensation at 1 July2 51 24 Add: Increase in provision 190 27 Less: payments from provision (190) - Provision for workers’ compensation at 30 June 51 51

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 2014-15 an interim dividend of $460,000 (2013-14 interim dividend of $655,000) was paid to the Government. An additional final 2013-14 dividend of $980,000 was approved and paid in October 2014.

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.

14 Contingencies Public Trustee had no known contingent assets or liabilities as at balance date.

15 Cash flow reconciliation

a) Reconciliation of cash and cash equivalents 2015 2014 $’000 $’000 Cash and cash equivalents disclosed in the Statement of Financial Position

6 759 11 305

Balance as per the Statement of Cash Flows 6 759 11 305


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b) Reconciliation of profit/loss after income tax equivalents to net cash provided by operating activities 2015 2014 $’000 $’000 Profit for the year after income tax equivalent 809 1 924 Add/Less non-cash items:- Depreciation and amortisation 892 777 Lease incentive (268) (268) Unrealised gain on financial assets (331) (1 486) Realised gain on financial assets - - Loss (Gain) on disposal of equipment (1) (1) Change in assets and liabilities:- Decrease (Increase) in receivables (319) 6 Increase (Decrease) in payables 15 (468) Increase (Decrease) in employee benefits and on-costs

474 276

Increase (Decrease) in provisions - 27 Increase (Decrease) in income tax equivalents (542) 350 (Decrease) Increase in GST liability 12 47 Net cash provided by operating activities 741 1 184

c) Reconciliation of dividend paid to State Government

2015 2014 $’000 $’000 Interim dividend paid for 2012-13 - 222 Final dividend paid for 2012-13 - 651 Interim dividend paid for 2013-14 - 655 Final dividend paid for 2013-14 980 - Interim dividend paid for 2014-15 460 - Total dividend paid 1 440 1 528

16 Cash and cash equivalents

2015 2014 $’000 $’000 Cash and cash equivalents

Cash 1 759 1 805 Short term financial assets held to maturity 5 000 9 500

6 759 11 305 17 Unrecognised contractual commitments Public Trustee has no capital contractual arrangements for 2013-14 or 2014-15.

2015 2014 $’000 $’000 Remuneration commitments

One year or less 722 714 Later than one year but no longer than five years 1 443 715

Total remuneration commitments 2 165 1 429 Amounts disclosed include commitments arising from executive service contracts. Public Trustee does not offer remuneration contracts greater than 5 years.


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2015 2014 $’000 $’000 Operating lease commitments

One year or less 2 079 2 004 Later than one year but no longer than five years Later than five years

8 921 -

8 796 2 204

Total operating lease commitments 11 000 13 004 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. In accordance with the lease agreement an independent rent assessment is currently underway.

18 Transactions with SA Government SA Government Non-SA Government Total Note 2015 2014 2015 2014 2015 2014 $’000 $’000 $’000 $’000 $’000 $’000 Income Fees and charges 4(a) - - 20 820 20 956 20 820 20 956

Interest 4(b)

Interest on operating account

- - 38 53 38 53

Interest on fixed term investments

- - 690 720 690 720

Other income 4(c)

Recoupment of salaries and oncosts

- 2 - - - 2

Sundry Income - - 27 23 27 23 Distributions from trusts

- - 739 359 739 359

Gain from disposal of fixed assets

- - 1 1 1 1

Unrealised gains on financial assets

- - 331 1 486 331 1 486

Total income - 2 22 646 23 598 22 646 23 600


Page 81 of 128

SA Government Non-SA Government Total Note 2015 2014 2015 2014 2015 2014 $’000 $’000 $’000 $’000 $’000 $’000 Expenses Employee Benefit Expenses

5 649 642 14 104 13 710 14 753 14 352

Supplies and services

5(e)

Insurance 206 202 - - 206 202 Information technology

473 560 1020 992 1 493 1 552

Accommodation and telecommunication

1 815 1 743 35 30 1 850 1 773

Legal expenses 37 71 - - 37 71 Service contractors 616 615 289 242 905 857 Other supplies and services

117 122 1 047 896 1 164 1 018

Auditors remuneration

177 173 - - 177 173

Minor works, maintenance and equipment

- - 13 15 13 15

Consultancies - - - 61 - 61 Total supplies and services

3 441 3 486 2404 2 236 5 845 5 722

Total Expenses 4 090 4 128 16 508 15 946 20 598 20 074 SA Government Non-SA Government Total Note 2015 2014 2015 2014 2015 2014 $’000 $’000 $’000 $’000 $’000 $’000 Financial Assets Current assets Cash 16 Cash and cash equivalents

1 759 1 805 5 000 9 500 6 759 11 305

Receivables 6 1 11 19 28 20 39 Doubtful debts - - (3) - (3) - Accrued investment income

3 4 713 369 716 373

Prepayments - - 198 200 198 200 Total Current Assets 1 763 1 820 5 927 10 097 7 690 11 917

Non-current assets Financial assets 7,8 - - 21 361 17 419 21 361 17 419 Total financial assets 1 763 1 820 27 288 27 516 29 051 29 336 SA Government Non-SA Government Total Note 2015 2014 2015 2014 2015 2014 $’000 $’000 $’000 $’000 $’000 $’000 Financial Liabilities Payables 11 Trade creditors 321 425 295 176 616 601 Income tax equivalents 141 683 - - 141 683 On-costs on employee benefits

292 269 333 347 625 616

Goods and services tax - - 326 314 326 314 Total financial liabilities

754 1 377 954 837 1 708 2 214

Public Trustee

STATEMENT OF TRUSTS BEING ADMINISTERED

Page 82 of 128

Statement of Trusts being Administered

2015 2014Note $’000 $’000

Trust funds under administration 3

Deceased Estates 161 754 155 059 Trusts 123 760 119 829 Administration Matters 40 620 38 978 Court Award Orders 398 241 385 965 Protected Estates 292 454 266 684 Workers Compensation Awards 203 200 Power of Attorney 60 905 58 877 Investors 301 116 278 770

Total funds 1 379 053 1 304 362

Represented byInvestment in Common Funds 1(b), 2

Non current assets

Australian equities 158 450 157 686 International equities 127 229 121 013 Property securities 42 131 42 079 Australian fixed interest investments 189 830 215 195 International fixed interest investments 34 862 24 726

552 502 560 699 Current assets

Cash and cash equivalents 13 014 5 000 Australian fixed interest investments 316 659 298 748 Advances to estates 4 626 4 894 Other assets 29 318 17 897

363 617 326 539 Current liabilities

Bank overdraft 109 64 Income distribution payable 13 929 12 577 Other liabilities 47 19

14 085 12 660 Net Comon Fund assets 902 034 874 578

Estate assets 1(c)Non current assets

Real estate 310 626 283 699 Superannuation 105 726 84 376 Personal chattels 19 277 18 245 Equities 19 956 21 893 Fixed interest and cash assets 15 525 13 738 Mortgages 59 138

471 169 422 089 Current assets

Other assets 16 557 15 719

Current liabilities

Other liabilities 10 707 8 024 Net estate assets 477 019 429 784 Total net assets 1 379 053 1 304 362

Statement of Trusts Being Administeredas at 30 June 2015

Public Trustee


Page 83 of 128

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

(a) Format of the Accounts

The Statement of Trusts Being Administered (the ‘Statement’) and related notes are special purpose financial statements that provide information on the value and nature of trusts being administered. The Statement consolidates all trusts being administered by Public Trustee. Accordingly, no Accounting Standards and other mandatory reporting requirements are applied in the preparation and presentation of this Statement. Public Trustee has prepared the Statement, where appropriate, based on the general principles outlined in Australian Accounting Standards. The Statement of Trusts Being Administered has been prepared using the accrual basis of accounting. Dividend income is recognised on the date that shares are quoted as ex-dividend. Distributions from trusts are recognised on a present entitlement basis.

(b) Basis of valuation of common fund assets and liabilities

For the 2014-15 reporting period assets for the Australian Shares Common Fund, Overseas Fixed Interest Common Fund, Overseas Shares Common Fund and the Property Common Fund are reported at market value to comply with current accounting standards. Australian Fixed Interest Investments: Are valued at market value based on independently obtained market yields applying at balance date. Advances to Estates: Are carried at their nominal amounts. Public Trustee is authorised by the Public Trustee Act 1995 to advance monies where an estate has insufficient monies to make payments as authorised or required to administer the estate, usually on a short term basis. Funds advanced are a first charge on the estate's property vested under the control of Public Trustee. The interest rate applicable on advances at 30 June 2015 was 2.30% (2.90%). Cash at Bank and Cash Equivalents: Are carried at nominal amounts, translated at prevailing exchange rates where applicable. This asset consists of cash at bank and on hand, as well as other short term, highly liquid investments with original maturities of three months or less. Other assets and other liabilities: Are carried at their nominal amounts.

(c) Basis of valuation for estate assets

Real Estate: For deceased estates, real estate is initially valued as at date of death. In other matters, the initial valuation is at the date Public Trustee is being appointed manager, administrator or new trustee. Public Trustee revalues all South Australian real estate other than accommodation bonds annually. All other real estate is revalued to current value where these values can be ascertained. Such revaluations are determined by reference to valuations established by the South Australian Valuer-General, with a revaluation last being carried out as at 30 June 2015. Accommodation bonds are valued annually at cost less retention amount until the retention terms have expired.

Superannuation: During the 2014-15 reporting period client moneys were invested within an approved superannuation provider and were valued at fair value. 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.

Public Trustee


Page 84 of 128

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

4 Unclaimed Monies

During the reporting period, amounts totalling $628 872 ($343 000) in respect of estates became/were identified as unclaimed monies. Payment of these amounts to the Consolidated Account pursuant to Section 32 (1) of the Public Trustee Act 1995 is expected to occur in the next financial year.

Number Value2015 2014 2015 2014

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 1 234 1 299 161 754 155 059

TrustsMonies and assets held under the administration of the Public Trustee pursuant to the terms of a Will or a Deed of Trust 1 313 1 344 123 760 119 829

Administration MattersMonies paid and assets transferred to the Public Trustee on account of minor beneficiaries pursuant to the Public Trustee Act 1995 356 371 40 620 38 978

Court Award OrdersMonies directed by the Court to be paid to the Public Trustee on behalf of clients and invested and applied by the Public Trustee as the Court directs and monies administered by the Public Trustee under the Aged and Infirm Persons Property Act 1940 794 790 398 241 385 965

Protected EstatesMonies administered by the Public Trustee under the Guardianship and Administration Act 1993 3 332 3 252 292 454 266 684

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 3 4 203 200

Powers of Attorney

Monies and assets held on behalf of donors who have appointed the Public Trustee to act on their behalf 311 322 60 905 58 877

InvestorsMonies invested in Common Funds pursuant to Section 29 (1) of the Public Trustee Act 1995 by classes of persons approved by the Minister 283 293 301 116 278 770

7 626 7 675 1 379 053 1 304 362

Public Trustee

COMMON FUNDS

Page 85 of 128

Common Funds Financial Statements 2014–15

Note 2015 2014$'000 $'000

Investment income

Interest 2(e) 15 826 16 358 Net (loss) on financial assets held at fair value through profit or loss 2(b),3(d) ( 987) ( 333)

Total investment income 14 839 16 025

Expenses

Public Trustee management fees 2(f) 4 407 4 119 Legal and advisory expenses 105 98 Other expenses 29 26


Net operating profit 10 298 11 782

Financing costs attributable to unitholders

Undistributed income brought forward 1 243 1 497 Distributions to unitholders 2(h),4 (11 501) (12 369) Transfers from net assets to determine distributable income 2(i) 987 333

Total financing costs attributable to unitholders (9 271) (10 539)

(Increase) in net assets attributable to unitholders (1 027) (1 243)

Total comprehensive income for the year - -

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

Cash Common FundStatement of Comprehensive Income

for the year ended 30 June 2015

Note 2015 2014$'000 $'000

Assets:

Cash and cash equivalents 5 13 014 5 000 Advances to estates 4 626 4 894 Financial assets held at fair value through profit or loss 6 408 132 403 930 Other assets 3 316 3 742

Total assets 429 088 417 566

Liabilities:

Income distribution payable 1 027 1 243 Bank overdraft 5 109 64 Funds deposited by other Common Funds 61 681 62 655 Other liabilities 45 40

Total liabilities (excluding net assets attributable to unitholders) 62 862 64 002

Net assets attributable to unitholders - liability 3 366 226 353 564

Represented by:

Fair value of outstanding units based on net asset value 366 226 353 564

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

Cash Common FundStatement of Financial Position

as at 30 June 2015

Public Trustee Customer Financial Information

Public Trustee

COMMON FUNDS

Page 86 of 128




Cash inflowsInterest received 16 393 17 087

Cash generated from operations 16 393 17 087 Cash outflowsPayments for expenses (4 536) (4 251)


Net cash provided by operating activities 10(b) 11 857 12 836

Cash flows from investing activities:

Cash inflows171 059 161 367

Net repayments of advances to estates 268 470 Cash generated from investing activities 171 327 161 837

Cash outflowsPurchase of financial assets held at fair value through profit or loss (176 396) (177 499)

Cash used in investing activities (176 396) (177 499)

Net cash (used in) investing activities (5 069) (15 662)



( 972) 7 507 Cash generated from financing activities 12 682 15 021

Cash outflowsDistributions paid (11 501) (12 369)

Cash used in financing activities (11 501) (12 369)

Net cash provided by financing activities 1 181 2 652

Net increase / (decrease) in cash and cash equivalents 7 969 ( 174)



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

Cash Common Fund


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

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

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

Statement of Cash Flows

Public Trustee

COMMON FUNDS

Page 87 of 128

Note 2015 2014$'000 $'000

Investment income

Interest 2(e) 1 816 1 879 Net (loss) gain on financial assets held at fair value through profit or loss 2(b),3(d) ( 72) 57


Expenses

Public Trustee management fees 2(f) 345 336 Legal and advisory expenses 8 8

Total expenses 353 344



Undistributed Income brought forward 748 892 Distributions to unitholders 2(h),4 (1 524) (1 679) Transfers from (to) net assets to determine distributable income 2(i) 72 ( 57)

Total financing costs attributable to unitholders ( 704) ( 844)

(Increase) in net assets attributable to unitholders ( 687) ( 748)



Short Term Fixed Interest Common FundStatement of Comprehensive Income


Note 2015 2014$'000 $'000

Assets:

Cash and cash equivalents 5 19 484 18 649 Financial assets held at fair value through profit or loss 6 32 250 33 178 Other assets 312 359


Liabilities:

Income distribution payable 687 748 Other liabilities 1 1

Total liabilities (excluding net assets attributable to unitholders) 688 749


Represented by:



Short Term Fixed Interest Common FundStatement of Financial Position

as at 30 June 2015

Public Trustee

COMMON FUNDS

Page 88 of 128





Cash generated from operations 1 985 2 020 Cash outflowsPayments for expenses ( 353) ( 345)

Cash used in operations ( 353) ( 345)

Net cash provided by operating activities 10(b) 1 632 1 675



Cash generated from investing activities 16 234 18 506 Cash outflowsPurchase of financial assets held at fair value through profit or loss (15 500) (24 117)


Net cash provided by (used in) investing activities 734 (5 611)


Cash inflowsProceeds from applications by unitholders 4 024 8 795

Cash generated from financing activities 4 024 8 795 Cash outflowsPayments for redemptions by unitholders (4 031) (6 010) Distributions paid (1 524) (1 678)


Net cash (used in) provided by financing activities (1 531) 1 107

Net increase / (decrease) in cash and cash equivalents 835 (2 829)





Statement of Cash FlowsShort Term Fixed Interest Common Fund


Public Trustee

COMMON FUNDS

Page 89 of 128

Note 2015 2014$'000 $'000

Investment income

Interest 2(e) 3 708 3 896 2(b),3(d) 727 1 545


Expenses





Undistributed Income brought forward 1 722 1 739 Distributions to unitholders 2(h),4 (3 503) (3 328) Transfers (to) net assets to determine distributable income 2(i) ( 431) (1 308)





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

Long Term Fixed Interest Common FundStatement of Comprehensive Income


Note 2015 2014$'000 $'000

Assets:



Liabilities:

Income Distribution Payable 1 459 1 722



Represented by:



Long Term Fixed Interest Common FundStatement of Financial Position

as at 30 June 2015

Public Trustee

COMMON FUNDS

Page 90 of 128






Cash used in operations ( 764) ( 823) Net cash provided by operating activities 10(b) 3 290 3 269



Cash generated from investing activities 21 271 25 394 Cash outflowsPurchase of financial assets held at fair value through profit or loss (10 000) (21 952)


Net cash provided by investing activities 11 271 3 442





Net cash (used in) financing activities (4 222) ( 321)

Net increase in cash and cash equivalents 10 339 6 390





Long Term Fixed Interest Common FundStatement of Cash Flows


Public Trustee

COMMON FUNDS

Page 91 of 128

Note 2015 2014$'000 $'000

Investment income

Trust Distributions 559 644 Interest 2(e) 176 300

2(b),3(d) 732 959 Other Income 102 150


Expenses





Undistributed Income brought forward 275 839 Distributions to unitholders 2(h),4 ( 461) (1 397) Transfers (to) net assets to determine distributable income 2(i) ( 732) ( 959)

Total Financing costs attributable to unitholders ( 918) (1 517)





Overseas Fixed Interest Common FundStatement of Comprehensive Income


Note 2015 2014$'000 $'000

Assets:



Liabilities:

Income distribution payable 308 275 Other liabilities 1 2



Represented by:



Overseas Fixed Interest Common FundStatement of Financial Position

as at 30 June 2015

Public Trustee

COMMON FUNDS

Page 92 of 128




Cash inflowsTrust distributions received 217 1 222 Interest received 202 297

Cash generated from operations 419 1 519 Cash outflowsPayments for expenses ( 344) ( 262)

Cash used in operations ( 344) ( 262) Net cash provided by operating activities 10(b) 75 1 257


Cash inflows13 698 -

Cash generated from investing activities 13 698 - Cash outflowsPurchase of financial assets held at fair value through profit or loss (23 000) -

Cash used in investing activities (23 000) - Net cash (used in) investing activities (9 302) -



Cash generated from financing activities 3 270 8 125 Cash outflowsPayments for redemptions by unitholders (3 492) (4 805) Distributions paid ( 461) (1 397)

Cash (used in) financing activities (3 953) (6 202)

Net cash (used in) / provided by financing activities ( 683) 1 923

Net (decrease) / increase in cash and cash equivalents (9 910) 3 180





Overseas Fixed Interest Common FundStatement of Cash Flows


Public Trustee

COMMON FUNDS

Page 93 of 128

Note 2015 2014$'000 $'000

Investment income

Trust Distributions 8 593 8 410 Interest 2(e) 143 144

2(b),3(d) 229 21 150 Other Income 535 508


Expenses

Public Trustee management fees 2(f) 1 717 1 713 Legal and advisory expenses 41 41


Net operating profit (loss) 7 742 28 458


Undistributed Income brought forward 6 307 3 283 Distributions to unitholders 2(h),4 (8 675) (6 124) Transfers (to) net assets to determine distributable income 2(i) ( 229) (19 310)






Australian Shares Common FundStatement of Comprehensive Income


Note 2015 2014$'000 $'000

Assets:

Cash and cash equivalents 5 3 717 8 936 Financial assets held at fair value through profit or loss 6 158 450 157 686 Other assets 5 655 5 598

Total assets 167 822 172 220

Liabilities:

Income Distribution Payable 5 145 6 307



Represented by:



Australian Shares Common FundStatement of Financial Position

as at 30 June 2015

Public Trustee

COMMON FUNDS

Page 94 of 128




Cash inflowsTrust distributions received 8 522 5 670 Interest received 157 142


Cash used in operations (1 758) (1 755) Net cash provided by operating activities 10(b) 6 921 4 057

Cash flows from investing activities:Cash inflows

- 21 000 Cash generated from investing activities - 21 000

Cash outflowsPurchase of financial assets held at fair value through profit or loss - -

Cash used in investing activities - - Net cash provided by investing activities - 21 000




Cash used in financing activities (24 680) (38 944) Net cash (used in) financing activities (12 140) (22 575)

Net (decrease) / increase in cash and cash equivalents (5 219) 2 482





Australian Shares Common FundStatement of Cash Flows


Public Trustee

COMMON FUNDS

Page 95 of 128

Note 2015 2014$'000 $'000

Investment income

Trust Distributions 17 406 3 836 Interest 2(e) 87 66

2(b),3(d) 5 707 19 474 Other Income 509 381


Expenses

Public Trustee management fees 2(f) 1 379 1 376 Legal and advisory expenses 33 33

Total Expenses 1 412 1 409



Undistributed Income brought forward 205 662 Distributions to unitholders 2(h),4 ( 205) ( 662) Transfers (to) net assets to determine distributable income 2(i) (21 514) (22 143)






Overseas Shares Common FundStatement of Comprehensive Income


Note 2015 2014$'000 $'000

Assets:


Total assets 146 377 127 289

Liabilities:

Income distribution payable 783 205



Represented by:



Overseas Shares Common FundStatement of Financial Position

as at 30 June 2015

Public Trustee

COMMON FUNDS

Page 96 of 128







Net cash provided by operating activities 10(b) 4 578 848


Cash inflows- 28 500

Cash generated from investing activities - 28 500 Cash outflowsPurchase of financial assets held at fair value through profit or loss - -

Cash used in investing activities - -

Net cash provided by investing activities - 28 500



Cash generated from financing activities 9 832 10 249 Cash outflowsPayments for redemptions by unitholders (12 836) (40 515) Distributions paid ( 205) ( 662)


Net cash (used in) financing activities (3 209) (30 928)

Net increase / (decrease) in cash and cash equivalents 1 369 (1 580)





Overseas Shares Common FundStatement of Cash Flows


Public Trustee

COMMON FUNDS

Page 97 of 128

Note 2015 2014$'000 $'000

Investment income

Trust Distributions 4 304 4 360 Interest 2(e) 50 33 Net gain on financial assets held at fair value through profit or loss 2(b),3(d) 940 3 382 Other Income 112 128


Expenses





Undistributed Income brought forward 2 078 637 Distributions to unitholders 2(h),4 (2 725) ( 956) Transfers from (to) net assets to determine distributable income 2(i) 259 (5 000)

Total Financing costs attributable to unitholders ( 388) (5 319)




Property Common FundStatement of Comprehensive Income


Note 2015 2014$'000 $'000

Assets:



Liabilities:

Income distribution payable 4 520 2 078



Represented by:



Property Common FundStatement of Financial Position

as at 30 June 2015

Public Trustee

COMMON FUNDS

Page 98 of 128






Cash used in operations ( 498) ( 506) Net cash provided by operating activities 10(b) 3 677 1 117



Cash generated from investing activities 4 500 10 000 Cash outflowsPurchase of financial assets held at fair value through profit or loss (3 500) -

Cash used in investing activities (3 500) -

Net cash provided by investing activities 1 000 10 000



Cash generated from financing activities 4 100 3 364 Cash outflowsPayments for redemptions by unitholders (4 440) (13 659) Distributions paid (2 725) ( 956)


Net cash (used in) financing activities (3 065) (11 251)

Net increase / (decrease) in cash and cash equivalents 1 612 ( 134)





Property Common FundStatement of Cash Flows


Public Trustee

COMMON FUNDS

Page 99 of 128

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 • Property Common Fund. The Inflation Linked Investments Common Fund was dormant throughout 2014-15, has nil assets and liabilities and has not been reported. Investment in Common Funds (with the exception of direct investment in the Cash Common Fund) is by way of notional unit holdings in the Common Funds. Unitholders may invest in the Cash Common Fund or alternately invest in a selection of Common Funds in proportions determined by one or more of the following standard investment strategies provided by Public Trustee:

• Capital Stable • Growth • Balanced • Equities

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

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

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. 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 are zero.

Public Trustee

COMMON FUNDS

Page 100 of 128

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

(ii) Recognition

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

(iii) Measurement

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

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

(b) Loans and receivables

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

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

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

(c) Net assets attributable to unitholders

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

(d) Cash and cash equivalents

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

Public Trustee

COMMON FUNDS

Page 101 of 128

2. Summary of significant accounting policies (continued)

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).

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

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

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

(f) Expenses

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

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

(g) Income tax

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

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

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

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

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

(h) Distributions

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

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

Public Trustee

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2. Summary of significant accounting policies (continued) The items above are accrued as appropriate in the statutory accounts under Australian Accounting Standards and the distributions are recognised in the Statement of Comprehensive Income as finance costs attributable to unitholders.

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

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

(j) Foreign currency translation

i) Functional and presentation currency

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

ii) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translations at year-end exchange rates, of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of Comprehensive Income. The Funds do not isolate that portion of gains or losses on 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 2015 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.

Public Trustee

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2. Summary of significant accounting policies (continued)

(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 2015 reporting period.

(q) Rounding of amounts

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

3. Net assets attributable to unitholders

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

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

(a) Common Fund unit prices2015 2014

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

Short Term Fixed Interest $1.0125 $1.0095 $1.0137 $1.0107Long Term Fixed Interest $1.0667 $1.0635 $1.0614 $1.0582Overseas Fixed Interest $0.8854 $0.8833 $0.8680 $0.8659Australian Shares $1.6916 $1.6822 $1.6871 $1.6777Overseas Shares $1.4711 $1.4632 $1.2537 $1.2470Property $1.0282 $1.0221 $1.0330 $1.0268

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3. Net assets attributable to unitholders (continued)

(b) Movements in units

Common Fund

2015 2014 2015 2014 2015 2014No. 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 50 816 48 081 87 977 85 159 44 023 40 181 Applications 3 967 8 690 7 446 15 205 3 683 9 516 Redemptions (3 986) (5 955) (8 154) (12 387) (3 959) (5 674) Closing balance 50 797 50 816 87 269 87 977 43 747 44 023

Common Fund

2015 2014 2015 2014 2015 2014No. 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 98 622 108 764 101 718 127 756 43 900 54 514 Applications 7 020 9 546 7 085 8 552 3 642 3 407 Redemptions (9 173) (19 688) (9 477) (34 590) (4 021) (14 021) Closing balance 96 469 98 622 99 326 101 718 43 521 43 900

Property

Overseas Fixed InterestLong Term Fixed InterestShort Term Fixed Interest

Australian Shares Overseas Shares

Public Trustee

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1 The Cash Common Fund is the primary working account for trust administration operations. Movements in net assets

attributable to unitholders are typically high volume, low value transactions.

3. Net assets attributable to unitholders (continued)

(c) Movements in funds employed

Common Fund

2015 2014 2015 2014 2015 2014 2015 2014$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000

Opening balance 353 564 346 405 51 437 48 595 93 238 88 923 38 150 33 872 Applications 2 608 6 302 4 024 8 795 7 991 15 937 3 270 8 124 Redemptions (2 600) (3 915) (4 031) (6 010) (8 710) (12 930) (3 492) (4 805) Increase/(decrease) in net assets attributable to unitholders 1 12 654 4 772 ( 72) 57 431 1 308 732 959 Closing balance 366 226 353 564 51 358 51 437 92 950 93 238 38 660 38 150

Common Fund

2015 2014 2015 2014 2015 2014$'000 $'000 $'000 $'000 $'000 $'000

Opening balance 165 913 163 053 127 084 135 207 45 168 50 463 Applications 12 540 16 369 9 832 10 249 4 100 3 364 Redemptions (16 005) (32 819) (12 836) (40 515) (4 440) (13 659) Increase/(decrease) in net assets attributable to unitholders 229 19 310 21 514 22 143 ( 259) 5 000 Closing balance 162 677 165 913 145 594 127 084 44 569 45 168

Overseas Fixed Interest

Australian Shares Overseas Shares Property

CashShort Term Fixed

InterestLong Term Fixed

Interest

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

Common Fund 2015 2014 2015 2014 2015 2014$'000 $'000 $'000 $'000 $'000 $'000

Cash ( 798) ( 285) (189) (48) (987) (333) Short Term Fixed Interest ( 70) 92 (2) (35) (72) 57 Long Term Fixed Interest 793 1 616 (66) (71) 727 1,545 Overseas Fixed Interest 478 959 254 - 732 959 Australian Shares 229 18 759 - 2,391 229 21,150 Overseas Shares 5 707 16 720 - 2,754 5,707 19,474 Property 605 2 808 335 574 940 3,382 6 944 40 669 332 5 565 7 276 46 234

Net Unrealised Gains (Losses)

Net Realised Gains (Losses) Total Gains (Losses)

Public Trustee

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4. Distributions to unitholders

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

Cash Common Fund2015 2015 2014 2014$'000 CPU $'000 CPU

Distributions paid 11 501 0.0319 12 369 0.0352 Undistributable income brought forward (1 243) - (1 497) - Distributions payable 1 027 - 1 243 -

11 285 12 115

Short Term Fixed Interest Common Fund2015 2015 2014 2014$'000 CPU $'000 CPU

Distributions paid 1 524 0.0300 1 679 0.0330 Undistributable income brought forward ( 748) - ( 892) - Distributions payable 687 - 748 -

1 463 1 535

Long Term Fixed Interest Common Fund2015 2015 2014 2014$'000 CPU $'000 CPU


3 240 3 311

Overseas Fixed Interest Common Fund2015 2015 2014 2014$'000 CPU $'000 CPU

Distributions paid 461 0.0105 1 397 0.0317 Undistributable income brought forward ( 275) - ( 839) - Distributions payable 308 - 275 -

494 833

Australian Shares Common Fund2015 2015 2014 2014$'000 CPU $'000 CPU


7 513 9 148

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In accordance with the Public Trustee Act 1995, investors received a proportionate distribution of net income depending on the number of days units were held. Included in the distributions at 30 June 2015 were the following net realised capital gains which were distributed to unitholders based on the number of units held as at 30 June 2015:

4. Distributions to unitholders (continued)

Overseas Shares Common Fund2015 2015 2014 2014$'000 CPU $'000 CPU

Distributions paid 205 0.0021 662 0.0065 Undistributable income brought forward ( 205) - ( 662) - Distributions payable 783 - 205 -

783 205

Property Common Fund2015 2015 2014 2014$'000 CPU $'000 CPU

Distributions paid 2 725 0.0626 956 0.0218 Undistributable income brought forward (2 078) - ( 637) - Distributions payable 4 520 - 2 078 -

5 167 2 397

Common Fund Capital Distributions Paid2015 2015 2014 2014$'000 CPU $'000 CPU

Long Term Fixed Interest 742 0.0085 210 0.0024 Australian Shares 4 001 0.0415 5 913 0.0600 Property 4 628 0.1063 1 466 0.0334

9 371 7 589

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5. Cash and cash equivalents

Cash Common Fund 2015 2014$'000 $'000

Cash at bank 14 - Money market instruments 13 000 5 000 Bank overdraft ( 109) ( 64)

12 905 4 936

Short Term Fixed Interest Common Fund 2015 2014$'000 $'000

Deposits in Cash Common Fund 19 484 18 649 19 484 18 649

Long Term Fixed Interest Common Fund 2015 2014$'000 $'000


Overseas Fixed Interest Common Fund 2015 2014$'000 $'000


Australian Shares Common Fund 2015 2014$'000 $'000


Overseas Shares Common Fund 2015 2014$'000 $'000


Property Common Fund 2015 2014$'000 $'000


Public Trustee

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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 2.20% (2014: 2.70%) per annum as at 30 June 2015 available at call. During 2014-15 Public Trustees customer banking operations were provided by the Commonwealth Bank of Australia (CBA) as part of the whole of Government banking strategy, implemented in the previous reporting period. Public Trustee also continued to manage a Westpac Banking Corporation (WBC) account during 2014-15 where a small number of deposits continue to be received. The CBA cash rate is the Reserve Bank target rate plus 20 basis points.

(b) Bank overdraft

The reported bank overdraft held as at 30 June 2015 was $0.109 million (2014: $0.064 million) being a total of Public Trustees CBA Cash Common Fund banking account balance of $1.724 million less unpresented cheques of $1.751 million and deposits to the CBA Cash Common Fund banking account that cannot be attributed to specific customers as at 30 June 2015 of $0.082 million.

(c) Money market instruments

These investments bear floating interest rates between 2.85% and 6.40% (2014: 3.50% and 7.00%). 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 2015.

Public Trustee

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1 Includes other common funds deposits in the Cash Common Fund of $61 681 (2014: $62 655).

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

2015 2014 2015 2014Fair Value Fair Value Fair Value Fair Value

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

Designated as at fair value through profit or lossFixed interest securities 1 408 132 403 930 32 250 33 178 Total designated as at fair value through profit or loss 408 132 403 930 32 250 33 178


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

Designated as at fair value through profit or lossFixed interest securities 66 107 76 834 - - Unlisted unit trusts - - 34 862 24 726 Total designated as at fair value through profit or loss 66 107 76 834 34 862 24 726


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

Designated as at fair value through profit or lossUnlisted unit trusts 158 450 157 686 127 229 121 013 Total designated as at fair value through profit or loss 158 450 157 686 127 229 121 013

2015 2014Fair Value Fair Value

$'000 $'000

Designated as at fair value through profit or lossUnlisted unit trusts 42 131 42 079 Total designated as at fair value through profit or loss 42 131 42 079

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

Common FundsCash Short Term Fixed Interest

Property

Long Term Fixed Interest

Australian Shares Overseas Shares

Overseas Fixed Interest

Public Trustee

COMMON FUNDS

Page 111 of 128

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 2015. 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 maintains a 50% hedged benchmark position which reduces currency volatility. Overseas currency exposure in the Property Common Fund is 100% hedged.

The Manager, Investment Services is responsible for ensuring that all investments are within the guidelines specified by Public Trustee’s Investment Guidelines and Procedures Manual. The Manager, Investment Services may recommend to the Public Trustee and the Public Trustee may, after consultation with the Investment Advisory Committee, approve investments outside of Public Trustee’s Investment Guidelines.

(a) Credit risk

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

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

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

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

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

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.

7. Revenue and assets for entities within the SA Government

2015 2014$'000 $'000

Public Trustee Common Fund Distributions 8 004 7 719 Refunds & Reimbursements 695 650 Gain / (Loss) on Public Trustee Common Funds - ( 484) Total revenue for entities within SA Government 8 699 7 885

Public Trustee Common Funds 262 155 241 942 Total assets for entities within SA Government 262 155 241 942

Public Trustee

COMMON FUNDS

Page 112 of 128

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 Analysis2015 2014

$'000 $'000Cash Common FundCash and short term investmentsA+ 5 025 - A1+ 139 053 126 617 A1 95 000 78 500 A2 65 017 76 567 Cash at bank 13 014 5 000

317 109 286 684 Long term investmentsAA 4 535 - AA- 76 740 105 042 A- 5 523 6 172 A 6 000 - A+ 11 239 11 032

104 037 122 246

Short Term Fixed Interest Common FundCash and short term investmentsA1+ 2 500 2 000 A2 7 031 7 000 Cash 19 484 18 649

29 015 27 649 Long term investments

AA+ 2 116 2 125 AA 5 375 5 429 AA- - 11 538 A- 1 510 5 086 A1 3 000 - A1+ 9 715 - A2 1 003 -

22 719 24 178

Long Term Fixed Interest Common FundCash and short term investmentsA1+ 1 000 6 043 A2 2 000 2 021 Cash 27 578 17 239

30 578 25 303 Long term investmentsAAA 7 219 9 335 AA+ 24 210 34 598 AA 11 989 13 938 AA- 14 364 10 899 A1+ 5 325 -

63 107 68 770

Public Trustee

COMMON FUNDS

Page 113 of 128

9. Financial risk management (continued)

(b) Market risk

(i) Price risk

The Australian Shares Common Fund, Overseas Shares Common Fund, Property Common Fund and the Overseas Fixed Interest Common Fund are exposed to price risk. Public Trustee is not directly 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 ASX 300 Companies. The Australian Shares Common Fund portfolio consists of listed shares, convertible notes, instalment receipts, preference shares and options. No derivative products are permitted under Public Trustee’s Investment Guidelines. Equities in the Overseas Shares Common Fund consist of investments through Australian domiciled-pooled funds that obviate exposure to currency price risk. An “active” approach is used by the fund utilising a variety of fund managers with different investment styles. This provides diversification benefits and reduces the overall level of risk.

The Property Common Fund 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. Investments in this class also comprise un-listed unit trusts where the holding of property or infrastructure is the primary business activity of the issuer.

(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.

Public Trustee

COMMON FUNDS

Page 114 of 128

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 13 014 ( 130) 130 - - Financial assets held at fair value through profit or loss 408 132 (4 081) 4 081 - -

Financial liabilitiesBank overdraft ( 109) ( 1) 1 - - Total (decrease) increase (4 212) 4 212 - -

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

Carrying Amount

Profit & Loss

Profit & Loss

Profit & Loss

Profit & Loss

$'000 $'000 $'000 $'000 $'000Financial assetsCash & cash equivalents 5 000 ( 50) 50 - - Financial assets held at fair value through profit or loss 403 930 (4 039) 4 039 - -

Financial liabilitiesBank overdraft ( 64) ( 1) 1 - - Total (decrease) increase (4 090) 4 090 - -

Short Term Fixed Interest Common Fund

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

Carrying Amount

Profit & Loss

Profit & Loss

Profit & Loss

Profit & Loss

$'000 $'000 $'000 $'000 $'000Financial assetsDeposits with Cash Common Fund 19 484 ( 195) 195 - - Financial assets held at fair value through profit or loss 32 250 ( 323) 323 - - Total (decrease) increase ( 518) 518 - -

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

Carrying Amount

Profit & Loss

Profit & Loss

Profit & Loss

Profit & Loss


Interest rate risk Price risk

2015

2014

2015

2014


Interest rate risk


Price risk

Public Trustee

COMMON FUNDS

Page 115 of 128


Long Term Fixed Interest Common Fund

- + - +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


Overseas Fixed Interest Common Fund

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

Carrying Amount

Profit & Loss

Profit & Loss

Profit & Loss

Profit & Loss

$'000 $'000 $'000 $'000 $'000Financial assetsDeposits with Cash Common Fund 3 758 ( 38) 38 - - Financial assets held at fair value through profit or loss 34 862 - - (6 972) 3 486 Total (decrease) increase ( 38) 38 (6 972) 3 486

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

Carrying Amount

Profit & Loss

Profit & Loss

Profit & Loss

Profit & Loss



Interest rate risk Price risk2015

2014


2015Interest rate risk Price risk

2014

Public Trustee

COMMON FUNDS

Page 116 of 128


Australian Shares Common Fund

- + - +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


Overseas Shares Common Fund

- + - +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



2015

Interest rate risk Price risk2015



2014

Public Trustee

COMMON FUNDS

Page 117 of 128

(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.


Property Common Fund

- + - +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




2014

Public Trustee

COMMON FUNDS

Page 118 of 128

10. Cash flow reconciliation

Cash Common Fund 2015 2014$'000 $'000

(a) Reconciliation of cash and cash equivalentsStatement of Cash Flows 12 905 4 936 Statement of Financial Position 12 905 4 936

(b) Reconciliation of profit/loss to net cash provided by (used in) operating activities:Net operating profit for the year 10 298 11 782 Non-cash operating activitiesNet losses/(gains) on financial instruments held at fair value through profit or loss 987 333 Amortisation of discounts and premiums 146 ( 40) Movement in assets and liabilitiesDecrease in receivables and other assets 426 709 (Decrease)/increase in payables and other liabilities 5 ( 9) Adjustment for balance day transactions ( 5) 61 Net cash provided by operating activities 11 857 12 836

Short Term Fixed Interest Common Fund 2015 2014$'000 $'000


(b) Reconciliation of profit/loss to net cash provided by (used in) operating activities:Net operating profit for the year 1 391 1 592 Non-cash operating activitiesNet (gains) on financial instruments held at fair value through profit or loss 72 ( 57) Amortisation of discounts and premiums 122 91 Movement in assets and liabilitiesDecrease in receivables and other assets 47 50 (Decrease)/increase in payables and other liabilities - ( 1) Net cash provided by operating activities 1 632 1 675

Long Term Fixed Interest Common Fund 2015 2014$'000 $'000


(b) Reconciliation of profit/loss to net cash provided by (used in) operating activities:Net operating profit for the year 3 671 4 619 Non-cash operating activitiesNet (gains)/losses on financial instruments held at fair value through profit or loss ( 727) (1 545) Amortisation of discounts and premiums 183 149 Movement in assets and liabilitiesDecrease/(increase) in receivables and other assets 163 51 (Decrease)/increase in payables and other liabilities - ( 5) Net cash provided by operating activities 3 290 3 269

Public Trustee

COMMON FUNDS

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10. Cash flow reconciliation (continued)

Overseas Fixed Interest Common Fund 2015 2014$'000 $'000


(b) Reconciliation of profit/loss to net cash provided by (used in) operating activities:Net operating profit for the year 1 226 1 792 Non-cash operating activitiesNet (gains)/losses on financial instruments held at fair value through profit or loss ( 732) ( 959) Income reinvested and not received in cash ( 102) ( 151) Movement in assets and liabilitiesDecrease in receivables and other assets ( 316) 576 (Decrease)/increase in payables and other liabilities ( 1) ( 1) Net cash provided by operating activities 75 1 257

Australian Shares Common Fund 2015 2014$'000 $'000


(b) Reconciliation of profit/loss to net cash provided by (used in) operating activities:Net operating profit for the year 7 742 28 458 Non-cash operating activitiesNet (gains) on financial instruments held at fair value through profit or loss ( 229) (21 150) Income reinvested and not received in cash ( 535) ( 507) Movement in assets and liabilities(Increase) in receivables and other assets ( 57) (2 734) (Decrease)/increase in payables and other liabilities - ( 10) Net cash provided by operating activities 6 921 4 057

Overseas Shares Common Fund 2015 2014$'000 $'000


(b) Reconciliation of profit/loss to net cash provided by (used in) operating activities:Net operating profit for the year 22 297 22 348 Non-cash operating activitiesNet (gains) on financial instruments held at fair value through profit or loss (5 707) (19 474) Income reinvested and not received in cash ( 509) ( 381) Movement in assets and liabilities(Increase)/decrease in receivables and other assets (11 503) (1 638) (Decrease)/increase in payables and other liabilities - ( 7) Net cash provided by operating activities 4 578 848

Public Trustee

COMMON FUNDS

Page 120 of 128

11. Events occurring after balance date

Nil

Property Common Fund 2015 2014$'000 $'000


(b) Reconciliation of profit/loss to net cash provided by (used in) operating activities:Net operating profit for the year 4 908 7 397 Non-cash operating activitiesNet (gains) on financial instruments held at fair value through profit or loss ( 940) (3 382) Income reinvested and not received in cash ( 112) ( 128) Movement in assets and liabilities(Increase) in receivables and other assets ( 179) (2 767) (Decrease)/increase in payables and other liabilities - ( 3) Net cash provided by operating activities 3 677 1 117


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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 following figures are inclusive of the net impact of GST.


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2014–15 Standard Investment Strategies

Indirect Cost Ratios (ICR)

Standard Investment Strategies ICRs

Strategy ICR 2014–15 ICR 2013–14

Cash 1.08% 1.08%

Capital Stable 1.26% 1.26%

Balanced 1.41% 1.42%

Growth 1.52% 1.55%

Equities 1.69% 1.73%

Common Fund ICR 2014–15 ICR 2013–14

Cash 1.08% 1.08%

Long-term Fixed Interest 1.08% 1.09%

Short Term Fixed Interest 1.09% 1.08%

Long Term Fixed Interest 1.08% 1.15%

Australian Shares 1.67% 1.68%

Property 1.62% 1.64%

Overseas Shares 1.72% 1.78%

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

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

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

For all other investors:

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


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The above fees will also apply to distributed income and realised capital gains when they are reinvested in a strategy other than cash. No exit fees are charged. No switching fees will be charged except when moving monies from the Cash Investment Strategy to another Strategy. The entry fees as disclosed above will then apply. Deposits Public Trustee does not accept cash deposits. Investments in Investment Strategies may be made either by cheque, direct credit or by transfer of funds from an existing estate being administered by Public Trustee. Identification When establishing an investment account with Public Trustee, customers will 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 for beneficiary investors or $20 000 for other investors. All withdrawal requests must be made in writing. Cash Common Fund Proceeds of withdrawals from the Cash Common Fund of amounts less than $1 million will be available on the next business day (subject to the request being received by 12pm). Proceeds of withdrawals of amounts greater than $1 million may not be available for up to thirty business days. Other Investment Strategies 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.


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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. 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. Australian 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. Australian 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.


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Long-term Fixed Interest Common Fund The permitted classes of investment are: a. Cash b. Australian Fixed Interest c. Inflation-linked Securities Qualifications on these investment classes:

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

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

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

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

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

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

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

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

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

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

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

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


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Property Common Fund The classes of investment are: a. Cash b. Property c. Infrastructure Qualifications on these investment classes:

i. Fund liquidity requirements shall be met by investment in the Cash Common Fund. ii. Investments in property comprise securities of companies and trusts that are either

listed or unlisted. iii. Investments in listed and unlisted infrastructure trusts are permitted in the fund. iv. Underwriting is permitted only where Public Trustee has made a firm subscription to a

new issue and the amount underwritten does not exceed the subscription amount. v. Security lending arrangements in relation to authorised investments are permitted.

Investments in financial derivatives specifically relating to the investments of the fund are

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

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

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

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

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

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

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

vi. Security lending arrangements in relation to authorised investments are permitted. The fund may invest in collective investment schemes operated by organisations approved by the relevant government agencies, provided that the rules of the collective investment schemes restrict the schemes' investments to the permitted classes of investment of the Common Fund.


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Overseas Fixed Interest Common Fund The permitted classes of investment are: a. Cash b. International Fixed Interest and inflation linked securities c. Derivatives 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.


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