annual report - the public trustee of queensland · this annual report is licensed by the state of...

The Public Trustee of Queensland

Annual Report

© The State of Queensland, The Public Trustee of Queensland 2012. Published by The Public Trustee of Queensland, September 2012, 444 Queen Street, Brisbane Qld 4000. Licence This annual report is licensed by the State of Queensland, The Public Trustee of Queensland under a Creative Commons Attribution (CC BY) 3.0 Australia licence.

CC BY Licence Summary Statement In essence, you are free to copy, communicate and adapt this annual report, as long as you attribute the work to the State of Queensland, The Public Trustee of Queensland. To view a copy of this licence, visit http://creativecommons.org/licenses/by/3.0/au/deed.en Attribution Content from this annual report should be attributed as: The State of Queensland, The Public Trustee of Queensland, Annual Report 2011–12. Copies of this publication can be obtained at www.pt.qld.gov.au/publications/corporate.html, by phoning (07) 3213 9288 or emailing [email protected] ISSN 1839 – 1451

The Queensland Government is committed to providing accessible services to Queenslanders from all culturally and linguistically diverse backgrounds. If you have difficulty in understanding the annual report, you can contact us on 1300 360 044 and we will arrange an interpreter to effectively communicate the report to you.

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http://www.pt.qld.gov.au/publications/corporate.htmlmailto:[email protected]

Contents Letter of Compliance .......................................................................................................................... 3

Year in Review ................................................................................................................................... 4

About The Public Trustee of Queensland .......................................................................................... 5

Highlights ................................................................................................................................... 6

External Scrutiny........................................................................................................................ 6

Strategic Direction ..................................................................................................................... 6

Future Priorities ......................................................................................................................... 7

Key Challenges.......................................................................................................................... 7

Non-Financial Performance................................................................................................................ 8

Objectives and Performance Indicators..................................................................................... 8

Community Service Obligations ................................................................................................ 9

Service Areas, Service Standards and Other Measures......................................................... 10

Financial Performance ..................................................................................................................... 13

Statement of Financial Position ............................................................................................... 14

Chief Finance Officer Statement ............................................................................................. 15

Governance – Management and Structure ...................................................................................... 16

Organisational Structure.......................................................................................................... 16

Executive Management ........................................................................................................... 17

Senior Management Committees ............................................................................................ 18

Boards and Committees with External Membership ............................................................... 21

Public Sector Ethics Act 1994 and Code of Conduct .............................................................. 22

Governance – Risk Management and Accountability ...................................................................... 23

Governance – Human Resources.................................................................................................... 24

Workforce Planning, Attraction and Retention ........................................................................ 24

Early Retirement, Redundancy, Retrenchment and Voluntary Separation Program .............. 24

Disclosure of Additional Information................................................................................................. 24

Legislation ........................................................................................................................................ 25

The Public Trustee of Queensland Financial Statements......................................... (FS 0 – FS 43) 26

The Public Trustee of Queensland Investment Funds Financial Statements .... (PTIF 0 – PTIF 36) 70

Glossary ......................................................................................................................................... 107

Office Locations.............................................................................................................................. 110

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Year in Review This year has seen a significant period of development for The Public Trustee of Queensland (PTQ) with a number of new initiatives being implemented that provide enhanced service to clients. Of particular note is the commissioning of the new Wills storage centre at Brendale to consolidate the safe custody of important documents for Queenslanders including over 950,000 Wills. In recognition of the client base diversity, our service delivery model has been enhanced with the introduction of Client Service Centres (CSCs) which focus on the specialised needs of particular client groups. These Centres provide a higher level of communication and consistency of service to meet those client group needs. The first of these Centres relate to Minors Trusts and Nursing Homes with further expansion of the model to continue based on demand. The provision of financial administration services for adults with incapacity for decision making continues to grow, with services currently being provided to some 8,000 clients. It is expected that this client group will grow by 5% in the coming year. As a self-funded organisation it is particularly pleasing that PTQ is able to continue to fund Community Service Obligations (CSOs) at no cost to government or the Queensland taxpayer. In 2011-12 we provided $27.2M representing an increase of 10% from the previous financial year. Our CSOs largely comprise rebate of fees for disadvantaged clients, provision of free Wills to Queenslanders, contribution to the Office of the Adult Guardian, and contributions and support to the Queensland Community Foundation and Civil Law Legal Aid. Focus has also been placed on improving business efficiency with a number of initiatives realising significant savings for PTQ. These include the closure of the Albion Auction Centre earlier this year and the introduction of unified communications across PTQ which together will deliver annual savings of approximately $1M. Auctioning client goods and chattels involve collaborative arrangements with the private sector which ensure value for clients and beneficiaries in the disposal of their assets. An expansion of this model is being considered in relation to disposal of real estate property. The past twelve months has also seen the development of a comprehensive and integrated workforce plan to support our service delivery and commercial outcomes. PTQ faces a number of challenges in continuing to meet the growth in its CSOs and to realise improved commercial returns by improving productivity and reducing costs. Critical to these objectives and PTQ’s future viability and sustainability is its people. The workforce plan provides overarching direction for investment in our people and provides priorities for a number of human resource initiatives which will assist us in achieving our strategic goal of meeting the current and future needs of clients. PTQ will see continued growth in the demand for services provided to those most vulnerable in our society. This is due to Queensland’s ageing population along with an expected increase in the number of people with decision-making incapacity requiring assistance to manage their financial affairs. We are committed to ensuring services provided are accessible, high quality and cost effective.

Peter Carne The Public Trustee of Queensland

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About The Public Trustee of Queensland PTQ has been serving Queenslanders since 1916 and is governed by the Public Trustee Act 1978. Operating as a corporation sole, we provide financial, trustee and legal services to the people of Queensland. This service is delivered through a network of sixteen regional offices in the following locations:

Brisbane Gladstone Mount Isa Southport

Brendale Ipswich Nambour Sunshine Coast

Bundaberg Mackay Redcliffe Toowoomba

Cairns Maryborough Rockhampton Townsville

For PTQ office locations and contact details please refer to page 110.

Delivery of these services outside of the above regional locations is supported by the Queensland Government Agent Program (QGAP) and the local court networks as our agents.

Our vision is to be Queensland’s best provider of trustee and administration services by providing professional and accessible services in:

Deceased Estates Trusts Will making Financial Management for those with impaired capacity for decision making Facilitating philanthropy.

Our Values are:

Accountability we are responsible for our actions, decisions and performance we strive for transparency in decision-making and relevant timely disclosure to our clients and

their carers.

Client Service striving for excellence in everything we do developing enduring, respectful and compassionate relationships with our clients responding to new and emerging client needs.

Integrity maintaining the highest standards of ethical practice as trustees administrators.

Our services aim to:

Meet a requirement by government to ensure prudent management of the financial assets of members of the community, with minimum recourse to the Queensland Civil and Administrative Tribunal (QCAT) or the Courts.

Ensure an orderly succession of property between generations with minimum recourse to the Court system.

Assist the Queensland community by making Wills free of charge and Enduring Powers of Attorney at an affordable cost.

Provide members of the community with the assurance that PTQ will act as their Attorney.

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In addition to our core services, PTQ also provides the following services:

Auctions and Sales Trustee Services for philanthropic foundations Unclaimed Moneys processing

The PTQ aims to achieve effective and efficient frontline service delivery by ensuring our business model is capable of meeting the increasing demand for core services available to all Queenslanders.

Highlights Key achievements of PTQ during 2011-12 included:

protection and financial management of disadvantaged clients’ interests provision of CSOs totalling $27.2M at no cost to government $2.5M investment in a new Wills storage centre and regional office at Brendale providing state

of the art facilities. This consolidates the safe custody of important documents for the people of Queensland (including some 950,000 Wills), while also providing an efficient frontline service to the community in this growing area

enhancement of the service delivery model by the introduction of CSCs to provide higher level communication and consistency of services to meet client needs (Minors Trusts and Nursing Homes)

promoted the importance of having a valid Will and Enduring Power of Attorney (EPA) for all Queenslanders over the age of 18.

External Scrutiny PTQ’s governance framework supports internal mechanisms to monitor and report on corrective actions taken to implement recommendations from external agencies concerning operations. The Public Trustee of Queensland reviewed findings and recommendations raised in these reports and has taken action to improve the department’s operations. Queensland Audit Office (QAO) commenced a performance audit in May 2012 on the management of fraud risk across the whole of government. This included a review of fraud control within PTQ.

Strategic Direction Our Clients

Meet the needs of current and future clients of The Public Trustee of Queensland in an ethical, professional and responsive way

Government objective: Revitalise frontline services for families

Continue to maintain our focus on frontline service delivery for our core purpose Integrate demographic analysis into future service delivery planning and implementation Provide professional and accessible services Plan business model to meet growing demand for frontline services Establish more effective and efficient delivery of resources to meet increasing stakeholder

demand Our Services

Develop innovative services in a client responsive manner

Government objective: Lower the cost of living for families

Continue to meet the growing demand for the delivery of services that assist the community Alleviate the cost to Queenslanders associated with administration of special purpose

functions and Unclaimed Moneys Ensure that investment strategies are prudent, competitive and ethical

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Our Business Maintain a viable business model and develop our internal operations to fund a broad range of services at no cost to government and in line with government objectives

Government objective: Grow a four pillar economy (focusing on agriculture, tourism, resources and construction) and Restoring accountability in government

Review the future capacity of office resources to assist all Queenslanders Develop opportunities to grow our business in areas that complement our core services Manage the business model through an efficient use of resources Investigate opportunities within existing business practices to guarantee the continued viability

of the organisation Raise the public image and profile of PTQ through sustained community engagement Promote openness and transparency in our decision‐making

Our People

Develop and maintain a committed workforce

Government objective: Revitalise frontline services for families

Attract and retain key personnel in a competitive labour market Enhance the skills of our people to promote higher levels of productivity Ensure that job satisfaction levels remain a priority Create opportunities for professional development Develop knowledge pathways to support future advancement of staff within the organisation

Each of these elements are necessary to maintain our frontline service delivery commitment to the people of Queensland and to promote the initiatives of the government.

Future Priorities The key 2012-13 priorities include:

continuing to protect disadvantaged clients’ interests and public education through the provision of CSOs at no cost to government

delivering a budget surplus to ensure all our services are provided at no cost to government investment in enhancing existing technology and the continual review of service delivery

models and locations to better meet the growing and changing demographic needs of Queenslanders

further investment in upgrading regional offices throughout the state to provide more efficient frontline service to the Queensland regional community

optimisation of our processes through the establishment of a Welcome Desk to assist in providing a more efficient and focused service delivery.

Key Challenges

1. Improving efficiency and effectiveness of frontline service delivery to meet increasing client expectations.

2. Further tightening of the economic conditions will impact the ability to maintain delivery of CSOs at the current rate of growth.

3. Growing reliance on our services to meet demand resulting from the changing socio- economic demographics.

4. Refining the business model to meet increasing complexity associated with client needs. 5. Maintaining community confidence in the services we provide.

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Non-Financial Performance

Objectives and Performance Indicators PTQ’s objectives for this reporting period related to the 2009-13 Strategic Plan. PTQ was in the process of updating this plan which now aligns with the government’s community objectives. The following is PTQ’s progress towards achieving its objectives in the reporting period: Ethical, professional and responsive services that meet the needs of our clients

Delivered over $27.2M in CSOs at no cost to the Queensland Government Increased our Wills by 15% and Enduring Powers of Attorney by 17% Provided financial administration services for 7,979 adults with incapacity for decision making Increased our outreach services so more Queenslanders can access our free Will making

service Continued to engage the community through education forums and information sessions

delivered across Queensland on the importance of having a legally binding Will and Enduring Power of Attorney

Innovative services provided in a client responsive manner

Implemented new CSCs to provide more efficient and cost effective service delivery Introduced an automated file review system to create improved efficiencies Delivered Speaker Talks across Queensland with strong and consistent messaging Expanded our services through outreach visits and increased our presence in the community

at shopping centres and courthouses Refined client investment strategies Reviewed the strategic approach to comply with the prudent person rule

A committed workforce

Developed and commenced the implementation of the Workforce Plan Provided state-wide workshops for staff on the Carer Recognition Act 2008 through Carer’s

Queensland Provided Indigenous Cultural Awareness training for staff Implemented a comprehensive approach towards stabilising the staffing structure of the

organisation Efficient and effective service delivery

Outsourced auction of client goods and chattels and reduced associated overheads delivering annual savings of approximately $500,000

Introduced unified communications which will deliver annualised savings of approximately $600,000

Streamlined taxation workflow enabling increased revenue Implemented Project Management methodology to ensure benefit realisation from initiatives Commissioning of new Wills storage centre and regional office at Brendale consolidating safe

custody of important documents for the people of Queensland including some 950,000 Wills Introduced an automated file review system to create improved efficiencies

The self-funded nature of the business is a primary driver in ensuring the efficiency and effectiveness of PTQ’s operations.

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Community Service Obligations PTQ is a self-funding organisation that receives no financial assistance from the Queensland Government. Additionally, in 2011-12 we provided $27.2M in CSOs at no cost to the government or the Queensland taxpayer. CSOs include works that the Queensland Government has directed PTQ to undertake which would be unlikely to occur on a commercial basis. This involves work for little or no fee. PTQ undertakes a wide variety of CSOs including:

financial administration for adults with impaired decision-making capacity where the cost of providing that service cannot be paid for in full from the adult’s own funds

a Will making service at no charge to Queenslanders (regardless of whether the Public Trustee is appointed Executor of the estate or not)

public education to the community and advice to courts and tribunals in the areas in which PTQ has some expertise

a cash contribution to the cost of the Office of the Adult Guardian financial assistance under the Civil Law Legal Aid Scheme to individuals who have civil actions

(mostly personal injury cases), but where those people do not have sufficient funds to pay for the outlays involved in advancing that litigation (for example the cost of medical reports).

For the 2011-12 financial year the total estimated cost of CSOs delivered by PTQ to Queenslanders at no cost to government was $27.2M representing an increase of 10% from the previous financial year. Community Service Obligations 2011-12 Fees rebated for disadvantaged clients (1) $17,316,174 Fees rebated for principal residence and other $628,391 Management of prisoners' criminal compensation and civil actions $82,524 Public education to the community and advice to the courts and tribunals in the areas in which PTQ has expertise $1,660,852 Provision of free Will making service to Queenslanders (27,834 free Wills made) $5,845,055 Grant to the Office of the Adult Guardian $1,020,500 Contributions and services to Queensland Community Foundation $338,854 Civil Law Legal Aid - outlays written-off, administrative support $333,510 Total $27,225,860

(1) Fees rebated represented fees and charges for Disability Services clients that have been rebated (this relates to

approximately 83.5% of all Disability Services clients) CSOs are reported in the Financial Statements in two areas:

deduction from fee revenue ($25.8M) where they are a rebate of fees or services provided at no charge

expenditure ($1.4M) as grants and contributions towards the other sector operations.

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Service Areas, Service Standards and Other Measures Client Services is the frontline interface with our clients and the community. We strive to make a positive difference in the lives of our clients while ensuring we fulfil our responsibilities. During 2011-12 we established two CSCs to target services to the following specialised groups:

Minors Trust Service Centre Nursing Home Service Centre

During the period the following service standards were achieved:

Service standards and other measures

2011-12Target/

estimate

2011-12Actual (1)

2012-13 Target/

estimate Number of deceased estate matters received for administration 2,464 2,359

2,390

Number of protective management matters under administration 7,841 7,979 8,024 Number of commercially uneconomical affairs of people with a disability managed at no cost to government 8,259 8,132 8,558 Number of Enduring Powers of Attorney prepared (2) 5,350 4,651 4,697 Number of Wills prepared (3) 30,375 27,834 28,112 Degree of compliance with Client Service Standards (as measured by Client Satisfaction Survey) (4) 80% -- -- Total cost of managing the commercially uneconomical affairs of people with a disability

$17.926M $17.316M $18.460M

Administration of Deceased Estates finalised within 12 months (5) 70% 65% 70% Appointment rate as financial administrator under the Guardianship and Administration Act as a % of total financial appointments made (6) 60% 65% 60% Re-appointment rate as financial administrator under the Guardianship and Administration Act as a % of total financial appointments made (7) 80% 77% 70%

(1) The 2011-12 actual is the same as the 2011-12 estimated actual published in the 2012-13 Service Delivery Statement. (2) While PTQ did not reach the 2011-12 estimate, it experienced significant growth of 666 (17%) in the number of Enduring

Powers of Attorney prepared during 2011-12. (3) While PTQ did not reach the 2011-12 estimate, it experienced significant growth of 3,666 (15%) in the number of Wills

prepared during 2011-12. (4) This performance measure does not comply with whole-of-government requirements for service standards. PTQ is

considering replacing this measure with a new effectiveness service standard about client satisfaction and is currently reviewing the most cost effective method to achieve this outcome. Therefore no estimated actual or target estimate is provided for this measure.

(5) This was the first year this item was reported and the target was set as a benchmark. Whilst the target was not achieved in 2011-12, we continue to drive process improvement and staff training initiatives to improve our service delivery in this area to meet the target.

(6) The QCAT appointment rate of PTQ as financial administrator is tracking above budget in percentage and also in real terms. Key drivers include the impact of the growing ageing demographic and the lack of willing and/or appropriate alternatives for the role of administrator. These factors have increased the number of hearings held and the appointment of PTQ as a willing and appropriate administrator.

(7) QCAT conducts reviews to determine whether it is appropriate for PTQ to continue to act as financial administrator based on current circumstances. Previously QCAT conducted random reviews, however these have now ceased and the focus has shifted to requested reviews and scheduled periodic reviews (these are largely private administrators). Almost all of the random reviews of PTQ resulted in the reappointment of PTQ, which consequently inflated the percentage result. Therefore, with the focus now shifted to requested reviews and periodic reviews due, this target has been revised down to 70% for 2012-13 to reflect the nature of the current reviews being undertaken.

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In addition PTQ:

received 720 new trusts for administration with 4,476 trusts under administration as at 30 June 2012

paid criminal confiscation proceeds of $9.15M to Queensland Treasury administered Unclaimed Moneys Fund and remitted $38.5M to Queensland Treasury.

In 2012-13 we will continue to evaluate our service delivery model to ensure that we are meeting evolving client needs and demographic changes. PTQ is Trustee for several of Queensland’s leading philanthropic charitable trusts and foundations as follows: Queensland Community Foundation (QCF) The Queensland Community Foundation was established in 1997 to provide a permanent source of philanthropic funding for charitable organisations to enable them to respond to the current and emerging community needs of Queenslanders. The Foundation continued to grow in 2011-12 and now has funds under management exceeding $46M and known pledged bequests through Queenslander’s Wills of almost $775M. Distributions to charitable organisations, during the year, totalled $2,065,541.37. For further information visit www.qcf.org.au Gulf Area Community Social Development Trust In 2000 the Gulf Area Community Social Development Trust was established under the management of the Queensland Community Foundation following agreement between the State of Queensland, Century Zinc Limited and Native Title Groups. The Gulf Area Community Social Development Trust provides funding that supports projects promoting cultural, educational, health and social development in the Lower Gulf Area. During 2011-12 funding of over $325,000 was provided for projects designed to strengthen local communities. For further information please contact QCF by phone 07 3360 3854 or email [email protected] Queensland Aboriginal and Torres Strait Islander Foundation The Foundation was established in 2008 and provides a secure, independent and perpetual funding source to advance the education and life opportunities of Aboriginal and Torres Strait Islander children and young people in Queensland through provision and promotion of Scholarships. Scholarships for 2011-12 of $819,363.92 were provided to 834 Indigenous students from 76 Queensland schools to assist them to complete their Queensland Certificate of Education. For further information visit www.qatsif.org.au Lady Bowen Trust Established in 2006, the Lady Bowen Trust aims to re-engage people experiencing chronic homelessness so they achieve genuine, positive and lasting outcomes. The Trust continued to support Mission Australia which maintains Roma House, a facility to enhance clients’ life skills, confidence and resilience while assisting them to find secure accommodation. During 2011-12 the Trust also supported eight charitable organisations through grant funding totalling $131,424. For further information visit www.ladybowentrust.org.au

http://www.qcf.org.au/http://www.qcf.org.au/##http://www.qatsif.org.au/http://www.ladybowentrust.org.au/

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Forde Foundation The Forde Foundation was established in August 2000 in response to the findings of the “Commission of Inquiry into Abuse of Children in Queensland Institutions”. The Foundation is designed to support former residents of Queensland Institutions. Funding support of former residents was provided to individuals for specific purposes such as dental care, education, training and personal development opportunities. Funding support was also provided to organisations that provide support services to groups of former residents. For further information visit www.fordefoundation.org.au Gladstone Foundation Established in early 2011, the Foundation allows for industry funds to be channelled into this perpetual Trust to provide social infrastructure and service needs in the Gladstone Region. Specific purposes of the Trust are for relieving poverty, assisting the aged, relieving sickness or distress, advancing religion and education, providing child care services on a non-profit basis and other purposes, which benefit the Gladstone Region. Recently the Foundation received inaugural funding totalling $13.5M from three industry proponents. For further information visit www.gladstonefoundation.org.au

http://www.fordefoundation.org.au/http://www.gladstonefoundation.org.au/

Financial Performance The PTQ Financial Statements are included from page 26. The operating result for 2011-12 has been a surplus of $2.2M. The operating surplus primarily relates to a growth in the client base and an increase in fees and charges (in line with the Consumer Price Index), coupled with one-off receipt of custodian fees impaired in previous financial years.

Revenue Sources Items 2010-11 2011-12Fees and Charges 59% 63%Investment Income 37% 35%Other Revenue 4% 2%Total Revenue 100% 100%

Gross revenue from fees and charges increased by 7.4% over the previous year. CSOs were deducted from gross fees to arrive at net fees and charges. This year, we provided $27.2M in CSOs at no cost to the Queensland community, representing a 10% increase over last year. As PTQ is self funded, these obligations were met from our own sourced revenue. Partially offsetting the growth in fees and charges has been a reduced investment income of 6.3%, due to the lower interest rates prevailing in the global financial market. Expenditure Items 2010-11 2011-12Employee Expenses 51% 56%Supplies and Services 25% 21%Interest Expense 16% 15%Depreciation and Amortisation 2% 3%Grants and Contributions 2% 2%Other Expenses 4% 3%Total Expenditure 100% 100%

Total expenses have decreased by $1.7M (2%) since the previous year. This has been the result of a decrease in non-employee expenses of 11.2%, resulting from tight control of expenditure and lower interest paid to clients due to the changes in the global financial market. Employee expenses increased 6.6% during the year due to Enterprise Bargaining Agreement arrangements and a strategic decision to increase resources to better support client service.

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Workforce planning was undertaken during 2011 and was partially implemented during 2011-12 financial year. This has resulted in a targeted increase in frontline service delivery roles, particularly in regional areas, based on demographic demand and changing models of service delivery. Other Comprehensive Income PTQ holds interests in financial assets and various land and buildings located throughout the state, from which its offices operate. These assets are recorded at market value and are revalued periodically in accordance with Australian Accounting Standards. The gains and losses that result from these revaluations are recorded as other comprehensive income in the statement of comprehensive income. The market value of PTQ’s financial assets recorded unrealised gains of $5.9M in a volatile market environment. In addition, revaluation of land and buildings during the year resulted in a decrease in value of $1M. These factors resulted in total other comprehensive income being recorded of $4.9M for 2011-12. Notably, these gains are unrealised and the valuations continue to be subject to market value movements. PTQ does not consider other comprehensive income to form part of any operating surplus that can be used to fund the operations until gains are realised.

Statement of Financial Position Total Assets Total assets comprise:

financial instruments (mainly short to medium term investments) cash property, plant and equipment.

As at 30 June 2012, PTQ held $618.1M in assets, an increase of $29.9M from 2011, due mainly to a change in investment strategy for clients with limited assets. New physical assets commissioned in 2011-12 New physical assets comprise:

Will storage and regional office Brendale $2.5M computer hardware, plant and equipment $1.0M refurbishments of regional offices $0.2M

Total Liabilities PTQ’s liabilities include amounts held for clients, amounts owing to employees for leave entitlements and amounts owed to suppliers. Total liabilities were $455.7M as at 30 June 2012, an increase of $22.7M since the previous year. The increase in liabilities is due mainly to the increase in amounts held on behalf of clients. Statement of changes in Common Fund reserves Total Common Fund reserves are $162.4M as at 30 June 2012, which is an increase of $7.1M from the prior year. This is primarily caused by unrealised gains on financial assets.

Prospective Outlook A small budgetary surplus is forecast for 2012-13 financial year. This accommodates full implementation of the workforce plan initiated in the current period, which is directly targeted at increasing resources for frontline service delivery.

Chief Finance Officer Statement Our Chief Finance Officer (CFO) has fulfilled the responsibility as required by the Financial Accountability Act 2009. The CFO has provided the Public Trustee of Queensland with a statement about financial controls, in accordance with Section 57 of the Financial and Performance Management Standard 2009. This statement was noted by the Audit and Risk Management Committee.

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Governance – Management and Structure Organisational Structure

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Executive Management Peter Carne Public Trustee of Queensland Peter Carne brings over 30 years of legal expertise to his statutory appointment as the Public Trustee of Queensland. In addition to managing his own legal practice, Peter has held a number of roles including Chief Executive Officer of the Queensland Law Society, Commissioner of the Queensland Legal Aid Commission, Director of the College of Law (QLD) and Director of Lexon Insurance Pte Ltd. He has also held a number of positions including President of the Queensland Law Society, Chair of the Queensland Law Society Specialist Accreditation Board and Director of the Queensland Law Foundation. In 2003, he was awarded the Centenary Medal for his contribution to the legal profession. Peter has a Bachelor of Arts and a Bachelor of Laws from the University of Queensland and is a Fellow of the Australian Institute of Company Directors and the Australian Institute of Management. From 1999 until 2007, he was a board member of Tarong Energy Corporation and is currently a board member of Australia Post. Peter is committed to ensuring the future sustainability of PTQ and achieving our vision – To be Queensland’s best provider of trustee and administration services. Mark Crofton Deputy Public Trustee and Official Solicitor Mark Crofton heads our in-house Legal Practice that provides legal support to PTQ and our clients. Mark has a Bachelor of Arts and a Bachelor of Laws (Hons) from the University of Queensland and a Masters of Laws from Queensland University of Technology and was a 2011 Churchill Fellow. He has extensive experience practising law in both the private and public sectors and has spent a large part of his career undertaking legal work in relation to succession, trusts and clients with a disability. Tony Steinmetz Executive Director Client Services Tony Steinmetz has been working in the Trustee field for over 35 years firstly with the Public Trustee NSW where he was Deputy Public Trustee and General Manager Client Services and now at PTQ where he is Executive Director Client Services. He brings a wealth of experience in the personal trustee field including investment management. He also holds tertiary qualifications in Law and Management.

In his current role, he directs the delivery of PTQ Client Services across Queensland through a network of sixteen regional offices together with associated agent representatives. Tony strongly supports the vital role trustees play in ensuring that the interests of clients are protected.

Tim Murphy Executive Director Investment Services and Chief Finance Officer Tim Murphy commenced in June 2012 as Executive Director Investment Services and Chief Finance Officer, and is responsible for the Financial Management and Investment frameworks of PTQ. Tim is a Chartered Accountant and has extensive experience in the financial services industry in leadership and management roles including audit, finance, investment management, financial planning and risk and compliance. Tim also has previous specific experience working in the trustee industry. During this time he held a number of senior management positions in finance, risk and compliance, investment management and general management.

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Christina Murdoch Executive Director Corporate Services Christina Murdoch commenced in September 2011 as the Executive Director Corporate Services and is responsible for the Human Resources, Information Services, Property and Marketing and Communications functions of PTQ. Christina contributes to the strategic direction of the organisation and supports the operational objectives through leadership and management of those functions. Christina has a Bachelor of Commerce from the University of Newcastle and is currently studying post graduate psychology at Charles Sturt University. Christina is also a Chartered Accountant. With extensive experience in both the public and private sectors across a broad range of industries including higher education, health, engineering, retail and chartered accounting, Christina brings considerable commercial experience to the organisation along with an appreciation and understanding of the public service context. Toni Farrell A/Director Governance and Executive Directorate Toni Farrell is the Acting Director Governance and Executive Directorate and is responsible for all matters relating to internal governance and external conformance of the organisation. Toni provides direction to support the strategic and operational objectives of the organisation through risk, planning and performance monitoring. In her role, she ensures that the ongoing accountability and necessary compliance framework is delivered within PTQ. Toni brings a wide range of experience in the financial sector. She has completed a Bachelor of Science (Hons) degree and is currently undertaking an Executive MBA through the University of New South Wales. She is committed to achieving better practice in governance within the organisation.

Senior Management Committees Executive Management Group The role of the Executive Management Group (EMG) is to provide leadership to PTQ by:

ensuring that the organisation continues to make a difference to the lives of Queenslanders and supports government community objectives

determining the corporate vision and strategic direction building organisational capability ensuring the future sustainability of the organisation being responsible for organisational governance including risk management.

Membership of the EMG is determined by the Public Trustee of Queensland. During the 2011-12 financial year, the core membership of the group was revised to reflect the new executive structure. The members of the group are:

The Public Trustee of Queensland (Chair) The Deputy Public Trustee and Official Solicitor Executive Director Client Services Executive Director Corporate Services Executive Director Investment Services and Chief Finance Officer Director Governance and Executive Directorate

The EMG met 49 times during 2011-12.

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Organisational Performance Group The terms of reference of The Public Trustee Strategic Governance Group were revised during 2011-12 and the committee was renamed to the Organisational Performance Group (OPG). This change was implemented to place greater emphasis on performance and accountability, and to align with the revised corporate management structure. The role of the OPG is to coordinate the development and review of the strategic plan and to monitor ongoing organisational performance. The members provide advice and recommendations to the OPG Chair and the group reports to EMG. The core functions of OPG include to:

monitor and review organisational performance against delivery of existing priorities and ensure appropriate action is being undertaken to address any performance issues

contribute to the ongoing development and implementation of the strategic plan undertake information gathering for future developments that may impact on the strategic

direction to inform future priorities promote and maintain links with other organisational committees to ensure the alignment of

planning activities. Membership of OPG is determined by the Public Trustee of Queensland and comprised:

The Public Trustee of Queensland (Chair) The Deputy Public Trustee and Official Solicitor Executive Director Client Services Executive Director Corporate Services Executive Director Investment Services and Chief Finance Officer Director Governance and Executive Directorate Director Finance Director Investment Services Director Property Chief Information Officer Director Client Services, Estate and Trust Management Director Client Services, Disability Services Director Client Services, Capability and Performance Director Human Resources Director Marketing and Communication Deputy Official Solicitor

OPG met ten times during 2011-12. Information Steering Committee The Information Steering Committee is responsible for:

providing whole-of-agency leadership, strategic direction and oversight in the planning and delivery of information and communications technology (ICT) related initiatives

providing assurance that information management and ICT is being appropriately governed to ensure return on investment through effective delivery of approved initiatives.

Members of the committee were:

Executive Director Corporate Services (Chair) Chief Information Officer Executive Management Group Client Services nominee Finance and Investment Services nominee Project Management Office (PMO) nominee

The committee met four times during the year.

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Marketing and Communication Committee The Marketing and Communication Committee provides advice on client relations, internal and external communications, marketing and media issues. Members of the committee were:

Executive Director Corporate Services (Chair) The Public Trustee of Queensland Director, Marketing and Communication Executive Director Investment Services and Chief Finance Officer Executive Director Client Services Deputy Official Solicitor Director Client Services, Estate and Trust Management Director Client Services, Capability and Performance Director Client Services, Disability Services Service Delivery Manager Manager Workplace Environment and Business Support

The committee met eight times during 2011-12. Workplace Health and Safety Committee The primary function of the committee is to ensure appropriate workplace health and safety and compliance with legislative obligations. Queensland Work Health and Safety Act 2011 commenced on 1 January 2012. Members of the committee were:

Manager Workplace Environment and Business Support (Chair) Director Human Resources Workplace Health and Safety Officer Rehabilitation and Return to Work Co-ordinator Property Representative Workplace Health and Safety Representatives (from each location)

The committee met six times during 2011-12. Building Committee The Building Committee provides advice on the management of corporate property. The key objective of the Committee is to balance financial returns on funds invested in property with the operational requirements of the organisation. Members of the committee were:

Director Investment Services (Chair) Executive Director Investment Services and Chief Finance Officer Executive Director Corporate Services Executive Director Client Services Director Finance Director Governance and Executive Directorate Director Property Managing Lawyer Investment Analyst Property Manager Graphic Designer

The committee met eleven times during 2011-12.

21

Boards and Committees with External Membership Public Trust Office Investment Board The Public Trust Office Investment Board (PTOIB) is responsible for controlling and managing the investments of the Common Fund, in terms of Section 21(1) of the Public Trustee Act 1978. PTOIB also provides advice to the Public Trustee on the investment management of the Public Trustee Investment Funds. During the year PTOIB:

approved a revised credit policy to take into consideration the increased credit risks in the global financial environment

approved a revised policy that allows for a reduction of risk during times when there is little value in taking interest rate or credit risk

endorsed a revised methodology in the Public Trustee Investment Funds for managing the allocation to Australian equities using the managed beta strategy.

The members of the PTOIB are:

Mr Peter Carne, Public Trustee of Queensland (Chair) Mr Walter Ivessa, Assistant Under Treasurer, Queensland Treasury Mr Henry Smerdon, Consultant and former Under Treasurer Ms Helen Davis, Consultant

In terms of the Public Trustee Act 1978, PTOIB will consist of at least three members one of who is the Public Trustee of Queensland and one of who is an officer of the department administered by the Treasurer. Remuneration payments to committee members Helen Davis $2,154 Strategic and Financial Consulting Services (Henry Smerdon) $2,089 Total $4,243

The PTOIB met six times during 2011–12. Audit and Risk Management Committee The Audit and Risk Management Committee (ARMC) is an independent advisory body to the Public Trustee of Queensland to assist him to fulfil his responsibilities as the Accountable Officer under the Financial Accountability Act 2009.

The committee operates under terms of reference established according to Queensland Treasury’s best practice guidelines. The committee has assisted with reviewing:

financial statement preparation processes and oversight the risk management framework corporate insurance coverage internal audit plans for endorsement actions from internal and external audit reviews.

Voting members of the committee are:

Mr Stephen Maitland, OAM, RFD (External Chair) Mr Len Scanlan (External Representative) Ms Lisa Dalton (External Representative) Mr Mark Crofton, Deputy Public Trustee and Official Solicitor

22

Standing invitees of the committee are:

The Public Trustee of Queensland Executive Director Investment Services and Chief Finance Officer Director Governance and Executive Directorate Queensland Audit Office Manager Audit and Evaluation

Remuneration payments to committee members Delphin Associates (Stephen Maitland) $15,000 Lisa Griffin (nee Dalton) $1,752 Scanlan Consulting Services (Len Scanlan) $8,400 Total $25,152

The committee met four times in 2011-12. Agency Consultative Committee

The purpose of the Agency Consultative Committee is to facilitate consultation between PTQ and relevant unions regarding industrial issues impacting, or which may impact upon the workforce. The committee provides advice on:

dispute resolution consultation of industrial issues implementation and revision of the Workforce Plan for the organisation agency implementation of other aspects of the certified agreement.

Members of the committee were:

Executive Director Corporate Services (Chair) Executive Director Client Services Director Human Resources Manager People and Capability Union Delegates Union Organiser

The committee met eight times during 2011-12.

Public Sector Ethics Act 1994 and Code of Conduct PTQ formally adopted the Code of Conduct for the Queensland Public Service following an approval process by the Public Service Commission. PTQ maintains the high ethical standards required by legislation and training has been provided to staff on the requirements of the Public Sector Ethics Act 1994. Human Resources has undertaken a systematic implementation of Code of Conduct and ethical decision making training throughout the organisation. The Code of Conduct and Ethics training is currently included in an overall competency framework within PTQ and provided at staff inductions and as refresher training. This training is also available online. Human Resource policies and procedures are aligned to the values of the Code of Conduct for the Queensland Public Service and are available to all staff through the office intranet. The values of PTQ included in the strategic plan align with the public sector ethics principles and the Code. PTQ’s values are a cornerstone of our organisation and are embedded in the Strategic Plan 2012-16, operational plans, individual performance plans, policies and procedures.

23

Governance – Risk Management and Accountability Governance and Executive Directorate The Governance and Executive Directorate was established in late 2011. The Directorate has responsibility for the essential components of effective governance within the organisation. The core elements of the unit are premised upon the following objectives:

reviewing and evaluating governance arrangements co-ordinating information and decision support ensuring internal conformance and accountability overall responsibility for assisting in planning and performance monitoring co-ordinating external compliance and accountability holding the responsibility for risk management and the project management office.

The Directorate has overall responsibility for the effective implementation of particular legislative imperatives within PTQ. These include:

Right to Information Act 2009 Information Privacy Act 2009 Public Interest Disclosure Act 2010

Audit and Evaluation Unit The Audit and Evaluation Unit provides independent, objective assurance and consulting activity to improve the operational performance of PTQ. The role of the Unit is defined in our Audit and Evaluation Charter, endorsed by the Audit and Risk Management Committee. The Unit operates in accordance with the Audit Committee Guidelines: Improving Accountability and Performance (Queensland Treasury), approved by the Public Trustee of Queensland. The charter has regard to the Financial and Performance Management Standard 2009 and the standards of auditing as promulgated by the Institute of Internal Auditors. Our Audit and Evaluation Unit is autonomous and reports directly to the Public Trustee of Queensland. Our strong links with the Queensland Audit Office provide the foundation for a collaborative audit approach to ensure optimal audit coverage across all facets of the organisation. During the year the Audit and Evaluation Unit conducted independent reviews and audits of our internal controls, business processes and management practices. Our Strategic and Annual Internal Audit Plan is developed in consultation with key stakeholders and takes into account the significant risks identified by management through the Risk Management Framework. Operations of Audit and Evaluation are overseen by the Audit and Risk Management Committee. Key achievements for 2011–12 included:

redevelopment of the Strategic and Annual Internal Audit Plan implementation of an online time management system that monitors time utilised per project,

and set specific tasks according to predefined milestones implementation of an online Audit Issues Tracking System to ensure appropriate management

actions have been taken to address audit findings (inclusive of issues raised by Queensland Audit Office)

strategic reviews that improved the efficiency of processes working closely with management to target higher risk areas providing advice, support and guidance to staff to assist them in satisfactorily discharging their

responsibilities in accordance with office policies and procedures.

24

Governance – Human Resources

Workforce Planning, Attraction and Retention Through the management of workforce planning and performance and development programs, Human Resources (HR) contributed to ensuring an appropriate resource management model and accountability framework for PTQ. PTQ employees are employed under the Public Service Act 2008 and related industrial instruments. PTQ’s HR policies and procedures align with Public Service Commission policies and directives. The Workforce Profile full-time equivalent (FTE) staff establishment is 557.69 (as per MOHRI Report for the quarter ending 30 June 2012). The following table provides a comparison between actual and budget FTEs for the current period and an estimate for the following year. Staffing

2011-12 Adjusted Budget

2011-12Actual

2012-13 Estimate

Total FTEs (1) 530 558 549 (1) The total staff profile is fully funded by PTQ at no cost to government. Permanent retention rate for 2011-12 was 86.55% (88.76%, 2010-11) and permanent separation rate was 13.60% (8.25%, 2010-11) for the same period. A Workforce Plan has been developed for PTQ, and is in the process of implementation. As part of this program of work, a number of high level projects have been identified. These include the following strategies to recruit, retain and build a skilled and capable workforce:

development of a competency framework recruitment to the new Client Services structure technical training and development leadership development framework supervisory and management development framework effective succession planning performance planning and development.

Recruitment to frontline service delivery roles has been undertaken to ensure alignment of resources with demographic demand. The training function for PTQ is being redeveloped with a focus on linkages to the competency framework for positions and individual development plans. Part-time and job share opportunities are available where mutually agreed between the employee and PTQ, along with flexible work arrangements.

Early Retirement, Redundancy, Retrenchment and Voluntary Separation Program There were no early retirements, redundancies or retrenchments nor did PTQ participate in the Voluntary Separation Program during the reporting period.

Disclosure of Additional Information As per the annual reporting requirements, PTQ has published additional information online. This can be accessed at www.pt.qld.gov.au/publications/corporate.html.

http://www.pt.qld.gov.au/publications/corporate.html

25

Legislation PTQ has a wide range of powers and functions and operates under many Acts including the following:

Accommodation Act 2008 Acquisition of Land Act 1967 Acts Interpretation Act 1954 Adoption Act 2009 Associations Incorporation Act 1981 Carer Recognition Act 2008 Charitable Funds Act 1958 Child Protection Act 1999 Child Protection (International Measures) Act 2003 Collections Act 1966 Companies (Acquisition of Shares) (Application of Laws) Act 1981 Corrective Services Act 2006 Criminal Proceeds Confiscation Act 2002 Disposal of Uncollected Goods Act 1967 Drugs Misuse Act 1986 Financial Accountability Act 2009 Gaming Machine Act 1991 Guardianship and Administration Act 2000 Information Privacy Act 2009 Land Sales Act 1984 Legal Profession Act 2007 Local Government Act 2009 Manufactured Homes (Residential Parks) Act 2003 Mineral Resources Act 1989 Mixed Use Development Act 1993 Motor Accident Insurance Act 1994 Personal Injuries Proceedings Act 2002 Police Powers and Responsibilities Act 2000 Powers of Attorney Act 1998 Property Agents and Motor Dealers Act 2000 Property Law Act 1974 Public Interest Disclosure Act 2010 Public Officers Superannuation Benefits Recovery Act 1988 Public Records Act 2002 Public Sector Ethics Act 1994 Public Service Act 2008 Public Trustee Act 1978 Relationships Act 2011 Residential Services (Accreditation) Act 2002 Residential Tenancies and Rooming Accommodation Act 2008 Retirement Villages Act 1999 Right to Information Act 2009 Second-hand Dealers and Pawnbrokers Act 2003 Storage Liens Act 1973 Succession Act 1981 Trust Accounts Act 1973 Trusts Act 1973 Water Act 2000 Workers Compensation and Rehabilitation Act 2003 Work Health & Safety Act 2011 Youth Justice Act 1992

The Public Trustee of Queensland

Financial Statements

2011-12

Contents

1 Statement of comprehensive income

2 Statement of financial position

3 Statement of changes in equity

4 Statement of cash flows

6 Notes to and forming part of the financial statements

41 Certification of The Public Trustee of Queensland

42 Independent audit report from the Auditor-General of Queensland

General Information The Public Trustee of Queensland is a corporation sole constituted under The Public Trustee Act 1978, and reports to Queensland Parliament through the Attorney-General. The Public Trustee of Queensland is an Accountable Officer pursuant to section 65(2) of the Financial Accountability Act 2009. For the purpose of this report, The Public Trustee of Queensland refers to the independent statutory individual and The Public Trustee refers to the organisation as a whole. The principal address of The Public Trustee: Trustee House 444 Queen Street Brisbane QLD 4000 For information in relation to The Public Trustee’s financial statements please call (07) 3213 9288, email [email protected] or visit the internet site at www.pt.qld.gov.au.

FS 0 26

The Public Trustee of Queensland Statement of comprehensive income for the year ended 30 June 2012

Notes 2012 2011 $'000 $'000 Revenue Fees 3 51,352 48,387 Investment revenue 28,583 30,499 Other revenue 4 2,038 2,835 Total revenue 81,973 81,721 Expenses Employee expenses 5 44,401 41,644 Supplies & services 6 16,677 20,345 Other expenses 7 2,783 3,435 Depreciation and amortisation 8 2,075 1,894 Interest expense 9 12,376 12,833 Grants & contributions 10 1,428 1,277 Total expenses 79,740 81,428 Operating result 2,233 293 Other comprehensive income Increase / (decrease) in asset revaluation surplus (1,026) -Net gain / (loss) on available-for-sale financial assets 5,919 (296) Total other comprehensive income 4,893 (296) Total comprehensive income 7,126 (3)

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

FS 1 27

The Public Trustee of Queensland Statement of financial position as at 30 June 2012

Notes 2012 2011 $'000 $'000 Assets Current assets Cash and cash equivalents 11 113,444 112,064 Receivables 12 16,960 18,539 Financial assets held at fair value through profit or loss 10,557 31,133 Available-for-sale financial assets 278,272 290,030 Held-to-maturity investments 50,393 29,891 Prepayments 947 655 470,573 482,312 Non current assets classified as held for sale 13 3,056 - Total current assets 473,629 482,312 Non current assets Held-to-maturity investments 97,194 56,192 Property, plant and equipment 14 46,791 49,310 Intangible assets 15 476 416Total non current assets 144,461 105,919 Total assets 618,090 588,230 Liabilities Current liabilities Payables 16 4,690 10,023 Deposits held in trust 17 438,293 410,753 Accrued employee benefits 18 5,160 4,504Total current liabilities 448,143 425,280 Non current liabilities Accrued employee benefits 18 7,531 7,660Total non current liabilities 7,531 7,660 Total liabilities 455,674 432,940 Net assets 162,416 155,290 Equity Reserves 162,416 155,290 Total equity 162,416 155,290

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

FS 2 28

The Public Trustee of Queensland Statement of changes in equity for the year ended 30 June 2012

General reserve

Asset revaluation

reserve

Investment revaluation

reserve Other

reserves Total

$'000 $'000 $'000 $'000 $'000 Balance at 1 July 2010 74,018 32,827 3,410 45,038 155,293 Profit for the year 293 - - - 293 Other comprehensive income - - (296) - (296) Transfer to / (from) reserves (5,129) (505) - 5,634 - Balance as at 30 June 2011 69,182 32,322 3,114 50,672 155,290 Profit for the year 2,233 - - - 2,233 Other comprehensive income - (1,026) 5,919 - 4,893 Transfer to / (from) reserves (719) - - 719 - Balance as at 30 June 2012 70,696 31,296 9,033 51,391 162,416

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

FS 3 29

The Public Trustee of Queensland Statement of cash flows for the year ended 30 June 2012

Notes 2012 2011 $'000 $'000 Cash flows from operating activities Fees received 47,332 50,312 Interest revenue 28,626 30,586 Other revenue received 1,660 2,707 GST collected from customers 8,389 4,876 GST input tax credits received - - Net amount accepted/(advanced) of deposits held in trust 27,940 55,552 Payments to suppliers and employees (62,632) (68,684) GST paid to suppliers (6,199) (3,085) GST remitted to ATO (2,888) (2,109) Interest expense (14,364) (10,844) Net cash provided by / (used in) operating activities 19 27,866 59,311 Cash flows from investing activities Sale of other financial assets 136,755 205,589 Sale of property, plant and equipment 984 2,543 Payments for other financial assets (159,543) (214,218) Payments for property, plant and equipment (4,682) (6,373) Net cash flow provided by / (used in) investing activities (26,486) (12,459) Net increase / (decrease) in cash held 1,380 46,852 Cash and cash equivalent at beginning of the financial year 112,064 65,212 Cash and cash equivalent at end of the financial year 11 113,444 112,064

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

FS 4 30

The Public Trustee of Queensland Notes to and forming part of the financial statements for the year ended 30 June 2012

Contents Objectives and principal activities of The Public Trustee Notes:

1. Authorisation date .................................................................................................................. FS 6 2. Summary of significant accounting policies............................................................................ FS 6 3. Fees ..................................................................................................................................... FS 17 4. Other revenue ...................................................................................................................... FS 17 5. Employee expenses............................................................................................................. FS 17 6. Supplies & services.............................................................................................................. FS 21 7. Other expenses.................................................................................................................... FS 21 8. Depreciation and amortisation.............................................................................................. FS 21 9. Interest expense................................................................................................................... FS 21 10. Grants & contributions.......................................................................................................... FS 22 11. Cash and cash equivalents ..................................................................................................FS 22 12. Receivables.......................................................................................................................... FS 22 13. Non current assets classified as held for sale ......................................................................FS 22 14. Property, plant and equipment ............................................................................................. FS 23 15. Intangible assets .................................................................................................................. FS 25 16. Payables .............................................................................................................................. FS 26 17. Deposits held in trust............................................................................................................ FS 26 18. Accrued employee benefits ..................................................................................................FS 26 19. Reconciliation of operating surplus to net cash from operating activities ............................. FS 27 20. Commitments for expenditure .............................................................................................. FS 27 21. Contingent liabilities ............................................................................................................. FS 28 22. Administered unclaimed monies .......................................................................................... FS 28 23. Other funds managed by The Public Trustee of Queensland .............................................. FS 30 24. Financial risk management ..................................................................................................FS 31 25. Events occurring after the reporting period .......................................................................... FS 40

FS 5 31


Objectives and principal activities of The Public Trustee The Public Trustee provides professional, accessible and reliable, trustee, financial and related services to Queenslanders. The Public Trustee Act 1978 (the Act) grants The Public Trustee broad and general powers in relation to the financial operations of The Public Trustee and its funds, particularly the Common Fund. The Act requires all moneys vested in or coming into the hands of The Public Trustee to be held in one or more Common Funds. All dealings that are transacted through the Common Fund are controlled by The Public Trustee and are not administered on behalf of the Government. The Public Trustee also provides custodian services in respect of a number of managed investment schemes and acts as trustee for a number of debenture issues by Companies, under Chapter 2L of the Corporations Act 2001. The Public Trustee is a self-funded organisation which provides its full range of services to the community at no cost to the Government. 1. Authorisation date The financial statements for the year ended 30 June 2012 were authorised for issue by The Public Trustee of Queensland, and the Executive Director Investment Services & CFO, on 23 August 2012. 2. Summary of significant accounting policies (a) Reporting entity The financial statements include the value of all assets, liabilities, equities, revenues and expenses controlled by The Public Trustee. The Public Trustee has a one third interest in the Queensland Community Fund Management Company. Because the amount of this entity is immaterial, it has not been included in these accounts. (b) Basis of preparation The financial statements are general purpose financial statements and have been prepared on an accruals basis in accordance with: Australian Accounting Standards and Interpretations; The requirements of The Public Trustee Act 1978 and section 42 of the Financial and Performance

Management Standard 2009; and Queensland Treasury’s Minimum Reporting Requirements. The Public Trustee is deemed to be a not-for-profit entity as profit is not its principal objective. Except where stated, the historical cost convention is used. (c) Administered transactions and balances Unclaimed Monies Fund The Public Trustee administers, but does not control, the Unclaimed Monies Fund on behalf of the Government. In doing so, The Public Trustee has responsibility and is accountable for administering

FS 6 32


related transactions and items but does not have the discretion to deploy these resources for the achievement of The Public Trustee's objectives. These transactions and balances are not significant in comparison to The Public Trustee’s overall financial performance or financial position. Unclaimed monies transactions and balances are disclosed in note 22. (d) Funds held outside of Common Fund and agency arrangements The Public Trustee has responsibility for the management of a range of client assets, such as property and investments, which held in specie do not form part of the Common Fund. These assets are reported in note 23. The Public Trustee has established a range of investment funds that have been designed to provide clients with investment options to better meet their individual financial requirements. (i) Public Trustee Investment Fund The Trusts (Investments) Amendment Act 1999 enables trustees to move away from a defined list of authorised trustee investments to an investment philosophy invoking the "Prudent Person Rule". The Public Trustee, through the operation of The Public Trustee of Queensland Investment Funds, has ensured that clients have access to tailored financial and investment plans to meet their lifestyle requirements. As at 30 June 2012 the total amount of client funds held in The Public Trustee of Queensland Investment Funds was $436 million (2011: $495 million). Financial results of The Public Trustee of Queensland Investment Funds do not form part of these financial statements, consistent with the treatment of all clients' assets held outside the Common Fund (refer Note 23a) (ii) Agency Funds The Public Trustee manages a number of Auctions and in this capacity holds deposits on behalf of clients. These are reported in note 23(b).

(e) Revenue recognition Revenue is measured at the fair value of the consideration received or receivable.

The Public Trustee recognises revenue when the amount of revenue can be reliably measured, if it is probable that future economic benefits will flow to the entity and specific criteria have been met for each of The Public Trustee’s major activities as described below: (i) Fees Fees for trust matters are recognised at the time the charges are levied. The rates and timing of charges are governed by The Public Trustee Act 1978. Fees from clients are recognised on an accruals basis, when the service is provided. Where due to financial circumstances a client is unable to pay the full amount of the fee, a rebate for all or part of the fee may be given in accordance with Community Service Obligation (CSOs) arrangements as determined by the Queensland Government. These CSOs are shown as an offset against revenue. Refer to note 3. The Public Trustee also receives trustee fees for acting as trustee of The Public Trustee of Queensland Investment Funds. The fee is set as a percentage of funds under management and is outlined in the Information Memorandum of the trusts. The trustee fee is recognised at the time the service is provided.

FS 7 33


(ii) Investment revenue Interest income is recognised using the effective interest method. When a receivable is impaired, The Public Trustee reduces the carrying amount to its recoverable amount, being the estimated future cash flows discounted at the original effective interest rate of the instrument and continues unwinding the discount as interest income. (iii) Other revenue Trust distributions are recognised on an entitlements basis.

(f) Impairment Assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets. Non-financial assets that suffered impairment are reviewed for possible reversal of the impairment at the end of each reporting period.

(g) Taxation Income Tax The Public Trustee is a State body as defined under the Income Tax Assessment Act 1936 and is exempt from Commonwealth Taxation with the exception of fringe benefits tax and goods and services tax (GST). Goods and services tax (GST) Revenues, expenses and assets (excluding receivables) are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense. Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the taxation authority is included with other receivables or payables in the balance sheet. (h) Cash and cash equivalents For the purpose of presentation in the statement of financial position and statement of cash flows, 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.

(i) Investments and other financial assets

Classification The Public Trustee classifies its financial assets in the following categories: financial assets at fair value through profit or loss, receivables, held-to-maturity investments and available-for-sale financial assets. The classification depends on the purpose for which the investments were acquired. Management determines the classification of its investments at initial recognition and, in the case of assets classified as held-to-maturity, re-evaluates this designation at the end of each reporting date.

FS 8 34


(i) Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this category if acquired principally for the purpose of selling within 12 months. Unit trust investments in QIC Limited are included in this classification. (ii) Receivables Receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for those with maturities greater than 12 months after the reporting period which are classified as non-current assets. (iii) Held-to-maturity investments Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturities that The Public Trustee management has the positive intention and ability to hold to maturity. If The Public Trustee were to sell other than an insignificant amount of held-to-maturity financial assets, the whole category would be tainted and reclassified as available-for-sale. Term deposits are categorised under this category. Held-to-maturity financial assets are included in non current assets, except for those with maturities less than 12 months from the end of the reporting period, which are classified as current assets. (iv) Available-for-sale financial assets Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories. All available-for-sale assets are classified as current. Recognition and derecognition The Public Trustee recognises financial assets on the date they become party to the contractual agreement (trade date). Financial assets are derecognised when the right to receive cash flows from the investments have expired or The Public Trustee has transferred substantially all risks and rewards of ownership. Measurement At initial recognition The Public Trustee measures a financial asset at its fair value. Subsequent recognition of financial assets is as follows:

i. Financial assets at fair value through profit or loss These instruments are measured at fair value with changes in their fair value recognised in the profit or loss. Interest income from financial assets at fair value through profit or loss is recognised in profit or loss using effective interest method.

ii. Receivables Receivables are carried at amortised cost using the effective interest method, less impairment losses, if any.

iii. Held-to-maturity investments Held-to-maturity investments are carried at amortised cost using the effective interest method, less impairment losses, if any. Interest income from held to maturity investments is recognised in profit or loss using effective interest method.

FS 9 35


iv. Available-for-sale financial assets

Available-for-sale financial assets are carried at fair value with changes in their fair value recognised in equity. Realised gains/losses recognised in equity is transferred to the profit or loss on de-recognition of the asset. Interest income from these financial assets is included in the profit or loss using effective interest rate method. Impairment The Public Trustee assesses at the end of each reporting period whether there is objective evidence that a financial asset or group of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a ‘loss event’) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.

(j) Property, plant and equipment

Recognition thresholds and bases, useful life, depreciation bases and revaluation bases are detailed in the table below.

Class Land Buildings Plant and Equipment

Recognition Threshold $1 $10,000 $5,000

Recognition Basis Cost Cost Cost

Useful Life Unlimited Useful Life 20 – 60 years 5 – 39 years

Depreciation Basis NA Straight Line Straight Line

Revaluation Basis Fair Value Fair Value NA

Acquisition Property, plant and equipment with a cost greater than the recognition threshold above are capitalised. Items with a lesser value are expensed in the year of acquisition. Cost is used for the initial recording of all property, plant and equipment acquisitions. Cost is determined as the value given as consideration plus costs incidental to the acquisition, including all other costs incurred in getting the assets ready for use, including architects' fees and engineering design fees. User training costs are expensed as they are incurred.

Depreciation Land is not depreciated as it has unlimited useful life. Buildings and plant and equipment are depreciated on a straight-line basis so as to allocate the net cost or re-valued amount of each asset, less its estimated residual value, progressively over its estimated useful life to The Public Trustee. Assets under construction (work-in-progress) are capitalised progressively however not depreciated until they reach service delivery capacity. Service delivery capacity relates to when construction is

FS 10 36


complete and the asset is first put to use or is installed ready for use in accordance with its intended application. Where assets have separately identifiable components that are subject to regular replacement, these components are assigned useful lives distinct from the asset to which they relate and are depreciated accordingly. Any expenditure that increases the originally assessed capacity or service potential of an asset is capitalised and the new depreciable amount is depreciated over the remaining useful life of the asset to The Public Trustee. Revaluations Land and buildings are measured at fair value in accordance with AASB116 – Property, Plant and Equipment and Queensland Treasury's Non-Current Assets Accounting Policies for the Queensland Public Sector. Non current physical assets measured at fair value are comprehensively re-valued at least once every five years. Separately identified components of assets are measured on the same basis as the assets to which they relate. Indices are applied annually between comprehensive revaluations where there has been a material variation in the index. The Public Trustee ensures that the application of such indices would result in a valid estimation of the asset’s fair value at reporting date. Any revaluation increment arising on the revaluation of an asset class is credited to the asset revaluation reserve of the appropriate class, except to the extent that it reverses a revaluation decrement for the class previously recognised as an expense. A decrease in the carrying amount on revaluation is charged as an expense, to the extent it exceeds the balance, if any, in the revaluation surplus relating to that asset class. On revaluation, accumulated depreciation is restated proportionately with the change in the carrying amount of the asset and any change in the estimated remaining useful life. All plant and equipment are measured at cost in accordance with Treasury’s Non-Current Asset Policies.

Disposals and gains When property, plant and equipment are disposed of, any difference between the consideration received and written down value of the asset at the time of sale is recognised in profit or loss.

Property, plant and equipment held for sale Non current assets held for sale consist of those assets that management has determined are available for immediate sale in their present condition, for which their sale is highly probably within the next twelve months. These assets are measured at the lower of the assets’ carrying amounts and their fair values less costs to sell. These assets are not depreciated. Impairment All non current physical assets are assessed for indicators of impairment on an annual basis. If an indicator of possible impairment exists, The Public Trustee determines the asset's recoverable amount. Any amount by which the asset's carrying amount exceeds the recoverable amount is recorded as an impairment loss and recognised immediately in the profit and loss, unless the asset is carried at a

FS 11 37


revalued amount. When the asset is measured at a re-valued amount, the impairment loss is offset against the asset revaluation reserve of the relevant class to the extent available. The asset's recoverable amount is determined as the higher of the asset's fair value less costs to sell and asset’s value in use.

Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised as income, unless the asset is carried at a re-valued amount, in which case the reversal of the impairment loss is treated as a revaluation increase. (k) Intangibles Information Technology development and software Costs incurred in developing products or systems and costs incurred in acquiring software and licenses that will contribute to future period financial benefits through revenue generation and/or cost reduction are capitalised to software and systems. Costs capitalised (subject to the threshold of $100,000) include external direct costs of materials and service and direct payroll and payroll related costs of employees’ time spent on the project. Amortisation is calculated on a straight-line basis over periods generally ranging from 4 to 8 years. IT development costs include only those costs directly attributable to the development phase and are only recognised following completion of technical feasibility and where the entity has an intention and ability to use the asset.

(l) Payables These amounts represent liabilities for goods and services provided to The P

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