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THE PUBLIC TRUSTEE DRAWS WILLS AND ACTS AS EXECUTOR, ADMINISTRATOR, TRUSTEE, AGENT, ATTORNEY.

GPO BOX 470, DARWIN NT 0801 FAX : (08) 8999 7882 TEL : (08) 8999 7271

NICHOLS PLACE, CNR BENNET & CAVENAGH STS, DARWIN NT 0800

PUBLIC TRUSTEE FOR THE NORTHERN TERRITORY

Telephone Contact: 8999 7271 Facsimile: 8999 7882

23 January 2009 The Hon Chris Burns MLA Attorney-General and Minister for Justice Parliament House State Square DARWIN NT 0800 Dear Attorney-General

ANNUAL REPORT - PUBLIC TRUSTEE FOR THE NORTHERN TERRITORY

In accordance with the requirements of section 18 of the Public Trustee Act, I submit this Report on the operations of the Public Trustee for the year ended 30 June 2008.

This Report should be read in conjunction with the 2007-08 Department of Justice Annual Report. That report includes information on those aspects of the operations of the Public Trustee’s Office that must be reported on pursuant to the Financial Management Act and the Public Sector Employment and Management Act.

Section 18(3) of the Public Trustee Act requires that you table a copy of the report in the Legislative Assembly within 6 sitting days after it is received. Yours sincerely

PETER SHOYER Public Trustee for the Northern Territory


ANNUAL REPORT 2007/2008

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CONTENTS

Public Trustee Overview ...................................................................................3 The Public Trustee and the Public Trustee Investment Board ..........................5 Corporate Planning ...........................................................................................6 Major Achievements 2007-2008 .......................................................................7 Strategic Directions 2008-2009.........................................................................7 Outputs .............................................................................................................8 Performance Measures...................................................................................11 Management and Investments........................................................................13 Fees .............................................................................................................22 Complaints ......................................................................................................23 Staffing Structure of the Office ........................................................................24 Financial Statements and Reports: Financial Report 2007-2008............................................................................25 Auditor-General’s Report to the Public Trustee for the Northern Territory 2007-2008.......................................26 Unclaimed Moneys and Moneys Deemed Bona Vacantia as at 30 June 2008 .....................................57



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PUBLIC TRUSTEE OVERVIEW

I am pleased to present the Annual Report and Financial Statements of the Public Trustee for the Northern Territory for the year ended 30 June 2008.

The 2007-08 financial year saw the beginning of a challenging period for trustees and for investors generally. The economic downturn which commenced in the latter part of 2007-08 has rapidly accelerated since the end of the reporting period. The reduction in returns that was evident at 30 June 2008 has continued and has created a new investment environment that is likely to persist for some time. Expectations that were built up over numerous years of bouyant market prices must be reassessed.

It will nonetheless remain the role of the Public Trustee, guided by the Public Trustee Investment Board, and with the benefit of professional advice, to pursue sound investment policies in the best interests of its clients. In doing so, the Public Trustee will continue to adhere to the “prudent person” model in the management of client funds.

Integral to the “prudent person” approach are the four Public Trustee Common Funds. The Common Funds, which provide a simple mechanism for diversified investment, are Cash, Conservative, Balanced and Growth. The Public Trustee uses the services of a Fund Manager and Fund Administrator to manage its investments on a day to day basis.

The range of Common Funds enables the Public Trustee to offer tailored investment portfolios giving clients a mix of capital growth, income returns and tax effectiveness, in keeping with their individual risk profiles. For clients with larger investments, independent professional advice is obtained annually on the appropriate investment mix.

The amount in the Common Funds at any one time varies not only according to market fluctuations but also depending on the makeup of the particular trusts and estates administered at that time. The value of the Common Funds at 30 June 2008 was $32.6 million. This is the same amount as at the end of 2005-06 but a reduction from the $35.3 held at the end of 2006-07. I wish to thank the other members of the Public Trustee Investment Board, John Montague and Alastair Shields, for their advice and assistance during the year.

Activity levels within the Office during the year were broadly similar to the two previous years, although there was a significant rise in the number of wills made, with 563 in the current year compared to 503 the previous year and 540 in 2005-06. This increase is in part due to visits by Office staff to Katherine, Elliot and Tennant Creek during the year. It is pleasing to see that, even with the increase in workload, a 97% client satisfaction rating was maintained for will preparation. At the end of the reporting period, the Office held 13,185 wills in its Wills Register.



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During the year, staff of the Office administered 739 trusts and finalised 171 deceased estates. I wish to commend staff on achieving a very high client satisfaction rate of 93% for their handling of estates.

In 2007-08, the Office paid $1,011,800 to Consolidated Revenue in Commissions, Fees and Levies. In addition, the Office paid over $835,975 in proceeds from forfeited property under the Criminal Property Forfeiture Act (the CPF Act).

The management of property restrained under the CPF Act and the disposal of forfeited property continues to raise many challenges for the Office, both in the interpretation and application of this relatively new legislation and in cases where property is restrained for some time due to ongoing legal proceedings. During the year two additional staff were appointed to focus on CPF.

In closing, I extend my thanks to my very able Deputy, Gail Fleay, and to the other staff of the Office for the positive attitude and commitment to the work of the Public Trustee that they unfailingly displayed throughout the year.

PETER SHOYER PUBLIC TRUSTEE



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THE PUBLIC TRUSTEE AND THE PUBLIC TRUSTEE INVESTMENT BOARD

Public Trustee services

The Office of the Public Trustee for the Northern Territory:

• manages trusts for children, aged, infirm and mentally incapacitated people;

• acts as attorney or agent for people when appointed by the person;

• provides a will-making service and maintains a register of wills;

• administers the estates of deceased persons when selected by them and in situations where there is nobody else willing or able to do so;

• manages restrained and forfeited property under the Criminal Property Forfeiture Act; and

• manages the Public Trustee Common Funds for client moneys.

The aim of the Office is to provide an independent, efficient, cost effective and comprehensive executor and trustee service at minimal cost to Government. The Office charges a range of competitive fees and commissions for its services.

The Public Trustee

The Public Trustee for the Northern Territory is a corporation sole established by section 9 of the Public Trustee Act. The Office is funded as an output within the Northern Territory Department of Justice budget.

The Public Trustee has functions and responsibilities under a large number of Acts, including the Public Trustee Act, the Trustee Act, the Administration and Probate Act, the Wills Act, the Aged and Infirm Persons’ Property Act and the Criminal Property Forfeiture Act, in addition to duties as a trustee and executor that arise under the general law.

In addition:

• the Financial Management Act regulates the expenditure and receipt of public moneys under the control of the Public Trustee as part of the Department of Justice; and

• the Public Sector Employment and Management Act regulates employment of the staff of the Office.

While Public Trustee staff carry out most day to day services, the Office relies on outsourced professional services for specialised legal, financial planning and accounting advice where required.



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Public Trustee Investment Board The Public Trustee Investment Board is established by section 12 of the Public Trustee Act. The function of the Board is to control the investment of money held on behalf of clients in the Common Funds. The Board comprises the Public Trustee or, in the absence of the Public Trustee, the Deputy Public Trustee, and two persons appointed by the Minister.

The Board is committed to acting prudently in accordance with the Public Trustee Act and Trustee Act to obtain the maximum return on the investments of Common Fund moneys commensurate with sound investment practices and to ensure that estates and trusts receive commercial rates of return on their funds. An Investment Policy has been developed to guide the Board and the Public Trustee’s Office in the management of its investments.

As at 30 June 2008, Investment Board Members were Mr Peter Shoyer, Public Trustee, Mr Alastair Shields, Department of the Chief Minister and Mr John Montague, Northern Territory Treasury. The Board is chaired by the Public Trustee.

Location of the Office of the Public Trustee

Street Address Postal Address Phone Fax

Nichols Place Cnr Cavenagh and Bennett Streets Darwin NT 0800

GPO Box 470 Darwin NT 0801

(08) 8999 7271 (08) 8999 7882

Agent for Public Trustee: Centrepoint Building Cnr Gregory Terrace and Hartley Street Alice Springs NT 0870

PO Box 8043 Alice Springs NT 0871

(08) 89515339 (08) 8951 5340

CORPORATE PLANNING

The Public Trustee contributes to the corporate planning processes of the Northern Territory Department of Justice, including development and implementation of strategic and risk management plans. The Office develops a comprehensive business plan each financial year to guide its operations. It should be noted that information relevant to planning and performance of the Office is also included in the Department of Justice Annual Report.



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MAJOR ACHIEVEMENTS 2007-08

• Advanced the marketing program by visiting Territory towns to provide an on-the-spot will making service and undertook presentations to community service organisations and initiatives such as law week, for the purposes of promoting and educating the public in the importance of making a will.

• Hosted the national Public Trustee meeting in Darwin in April and attended the combined Australian Guardianship and Administration Committee (AGAC) meeting held concurrently.

• Implemented alternative will storage facilities and processes to enhance the will preservation and retrieval processes in the Office.

• Advanced the development of a Warehouse Procedures Manual to ensure the Office of the Public Trustee complies with property management standards.

• Developed new workplace policies dealing with a range of issues concerning estate and trust administration such as locating beneficiaries and the distribution of small estates.

• Implemented two new positions in the Public Trustee’s Office responsible for the management of property restrained and forfeited under the Criminal Property Forfeiture Act.

• Initiated several structured learning programs involving staff, dealing with issues such as taxation and nursing home requirements.

STRATEGIC DIRECTIONS 2008-09

• Continue to monitor and assess investment strategies to mitigate the effects of the current world financial situation and to ensure that they meet the expectations of the Office and the prudential standards required.

• Arrange the renewal of contracts for estate and trust taxation and financial planning services procured by the Office.

• Set up regular liaisons with other organisations such as the Northern Territory Police and the Solicitor for the Northern Territory regarding the management of restrained and forfeited property under the Criminal Property Forfeiture Act.

• Continue to improve operational practices, procedures and overall service delivery and develop new, or update existing operational policies.

• Continue to refine the marketing program aimed at increasing the awareness of the services and functions of the Office of the Public Trustee.

• Continue to improve staff skills through relevant training and personal development.



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OUTPUTS

The following indicators for the various areas of activity represent an overview of the outputs of the Office in carrying out its functions.

Administration of the estates of deceased persons

The Public Trustee administers the estates of people who have appointed the Public Trustee as executor of their will and the estates of people who have died intestate if there is no-one willing or able to administer the estate.

The Table below details the progress of deceased estates through the Office of the Public Trustee from July 2004 to June 2008. Deceased Estates

2004-2005

2005-2006

2006-2007

2007-2008

Estates on hand at beginning of year 159 191 244 235

Estates Commenced during year 182 175 179 169

Estates finalised during year 150 122 188 171

Estates on hand at end of year 191 244 235 233

Management of trusts

The Public Trustee acts as attorney, agent or manager for persons who are minors, incapacitated or who are required to leave the Territory for some time. The Public Trustee also manages the estates of aged, infirm or mentally ill persons on appointment by the Supreme Court under the Aged and Infirm Person’s Property Act.

Additionally the Public Trustee manages property and moneys held under the Criminal Property Forfeiture Act as separate trusts.

The following table details the progress of trusts through the Office of the Public Trustee for the period from July 2004 to June 2008.



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Trusts (including the Aged, Infirm and Agencies)

2004-2005

2005-2006

2006-2007

2007-2008

Trusts on hand at beginning 588 648 649 626

Trusts received during the year 174 152 98 113

Trusts paid out during the year 114 151 121 103

Trusts on hand at end of the year 648 649 626 636

Preparation and execution of wills and maintenance of a Register of Wills

Wills prepared

The Public Trustee provides a low cost will making service to members of the public.

Number of Wills 2005-2006 2006-2007 2007-2008

Wills Prepared 540 503 563

10 Day Turn Around target met (%) 54 64 61

Register of Wills

Amendments to the Public Trustee Act changed the requirements in respect of the Wills Register. The new Wills Act which commenced in March 2001 provides that wills may be lodged with a person prescribed by the regulations, or if no such person has been prescribed, the Public Trustee. As at 30 June 2008, no such person had been prescribed, and the Public Trustee continued to provide a free, secure wills storage and retrieval service.

Registration of Wills 2007-2008

Number of wills registered at beginning of year 12,646

Amendments 210

New Wills registered (as distinct from prepared) 573

Wills revoked or taken 244

Number of wills registered at end of year 13,185

The number of wills in the Wills Register increased by approximately 4% over the year.



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Criminal Property Forfeiture

The Criminal Property Forfeiture Act came into effect on 1 June 2003. Under the Act, property that is crime used or crime derived can be seized, restrained under a court order and eventually forfeited. The Public Trustee’s role is to manage and dispose of restrained or forfeited property under the Act. The table below lists the main activity in the Office for the period from July 2005 to June 2008.

Matters under the Criminal Property Forfeiture Act

2005-2006 2006-2007 2007-2008

Number of new criminal property forfeiture matters dealt with by the Public Trustee

57 24 20

Number of vehicles restrained under the Act on hand as at 30 June

47 40 49

Real estate properties restrained under the Act on hand as at 30 June

10 7 11

Number of vehicles disposed of during the year 24 32 19

Value of Property restrained under the Act as at 30 June

6,087,836 5,665,973 6,129,617

Value of Property forfeited under the Act since inception (including unrealised property) as at 30 June

2,745,121 2,838,794 2,972,716

Amount of forfeited money paid to Consolidated Revenue in the year (1)

488,059 391,661 835,975

(1). The Public Trustee retains a minimum amount of $100,000 in the control account to meet the

costs and expenses associated with functions under the Criminal Property Forfeiture Act.



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PERFORMANCE MEASURES

The following performance indicators provide evidence of the Office of the Public Trustee’s effectiveness and efficiency in achieving its outcomes. Desired outcomes have been identified and linked to the services provided by the Office.

Finalisation of large estates

This indicator measures how efficient the Office has been in finalising large estates within an acceptable timeframe. Information on the actual number of estates on hand in each category continued to be reported on this year, as it is considered this provided a good indication of the achievements of the Office.

Of the current large estates, how long have they been on hand

30 June 2006

30 June 2007

30 June 2008

< 6 months 2 12 20

6 to 12 months 14 8 8

12 to 24 months 8 15 10

Over 2 years 8 9 15

The number of large estates on hand over 6 months was similar to the figures for 2006 and 2007, although there was an increase in longer term estates (over 2 years) on hand from 9 to 15. Delays in these cases are mainly attributed to the degree of difficulty in finalising files due to missing relatives, pending family provision claims and delays in Superannuation Fund decisions. Some estates require long term administration due to the nature of the estate assets, for example, long term royalty payments. Numbers in this category are likely to increase in the future with the advent of the Commonwealth’s resale royalty scheme.

Finalisation of small estates

This indicator measures how efficient the Office has been in finalising small estates within an acceptable timeframe. Information on the actual number of estates on hand in each category has again been reported on this year as it is considered this provided a good indication of the achievements of the Office.

Of the current small estates, how long have they been on hand

30 June 2006

30 June 2007

30 June 2008

< 6 months 78 73 56

6 to 12 months 50 29 34

12 to 24 months 51 47 42

Over 2 years 33 42 46

The number of small estates on hand over 6 months was similar to the figure for 2007. Delays in finalising files over 2 years are mainly attributed to missing relatives, taxation issues and delays in Superannuation Fund decisions.



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Percentage of wills that nominate the Public Trustee as Executor

A testator may nominate an executor to carry out the terms of the will and to attend to the administration of the estate. This indicator measures the success of securing those persons making a will into selecting the Public Trustee as executor.

Naming Public Trustee as Executor 2005-2006 2006-2007 2007-2008

Percentage 43% 37% 33%

Client satisfaction

This indicator measures client satisfaction with the deceased estate and wills services provided by the Public Trustee.

Extent to Which Clients are Satisfied 2005-2006 2006-2007 2007-2008

Deceased Estates 79% 86% 93%

Wills 95% 95% 97%

Number of wills / estates finalised per Trust Officer.

This indicator is calculated by dividing the total number of wills drawn up together with those estates finalised in the reporting period by the number of trust officers. In addition, the number of trusts on hand provides a more complete view of the efficiency of the Office. The greater number per trust officer compared to previous years would indicate improved efficiency.

Items per Trust Officer based on 7 FTE Trust Officers

2005-2006 2006-2007 2007-2008

Number of wills prepared 77 72 80

Number of estates finalised 17 27 25

Number of trusts on hand 93 89 91

TOTAL 187 188 196



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MANAGEMENT AND INVESTMENTS

Common Funds Management

The Trustee Act requires all trustee organisations to consider a range of matters in regard to the investment of capital held in trust. Effectively, this means that capital held in certain trusts must be managed in accordance with the short, medium and long-term investment objectives pertaining to the circumstances of the ultimate beneficiary. Estate and trust moneys are now invested in one or more of these funds.

Amendments to the Public Trustee Act and Regulations that allowed for the Public Trustee to undertake this process by enabling the establishment of multiple Common Funds, each with a discrete investment profile, commenced in 2002. The Public Trustee now oversees the management of four Common Funds, a function that is undertaken on advice from the Public Trustee Investment Board.

The Common Funds allow for the effective management of assets held within each fund in accordance with the specific investment mandate. Based upon the development of personal investment plans, the Public Trustee makes the allocation of the capital of an estate or trust into one or more Common Funds.

This process of investing capital enables the Office of the Public Trustee to maximise investments, according to need and circumstances, on behalf of clients.

Coinciding with the establishment of these funds, amendments were provided for the deduction of levies and management fees to account for the cost of maintaining the funds. The following table indicates the activity of the funds from July 2005 to June 2008.



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Common Fund 2005-2006 2006-2007 2007-2008

Common Fund 1 balance ($m) 17.3 20.8 17.0




Total of Funds 32.6 35.3 32.6

% invested in mortgage loans in Common Fund 1

4.2 3.3 2.8

Commission and Fees paid to Consolidated Revenue ($,000)

479.0 549.0 543.3

Management Fees paid to Consolidated Revenue ($,000)

258.7 339.2 244.6

Levy paid to Consolidated Revenue ($,000)

172.7 176.1 223.9

The total of assets in the Common Funds vary from year to year because of variation in the trusts and estates administered and variations in market conditions. Total payments to Consolidated Revenue were down 5% from 2006-07 but up 11% from 2005-06.

Note: A separate amount of $835,975 for Criminal Property Forfeiture Funds was paid into consolidated revenue during 2007-08.

The Public Trustee Investment Board maintained its strategy of “no new lending” during 2007-08. No new loans were approved. The one remaining loan is being monitored by the Investment Board.



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Standard Investment Strategies

The primary investment objective of the Public Trustee for the Northern Territory is to consider on each trust and estate, the return on investment before fees and charges on a basis considered consistent with its needs and objectives.

This is equal to the prevailing relevant indices against which the sub-sectors of each individual fund are benchmarked, so as to achieve the stated purpose of each investment profile whilst at the same time:

a) maximising the investment rate of return within the nominal risk constraints;

b) minimising the volatility of returns within each asset sector;

c) investing within legislative constraints;

d) managing the funds in an economic and efficient manner, ensuring the preservation of the Public Trustee’s reputation as a professional administrator; and

e) managing the funds in accordance with section 8 of the Trustee Act.

The Common Funds are managed on a fund to fund basis under a formal Investment and Financial Service Association standard mandate. A financial service custodian and financial accountant manage the accounts on an outsourced basis.

The Public Trustee Investment Board guides the Public Trustee in matters pertaining to the investment mandate, strategic and tactical allocation of assets, appointment of fund managers and general management of funds.

The Public Trustee acts as a manager and investor on behalf of represented clients. There is a clear delineation between these functions within the Office of the Public Trustee. The Public Trustee approves investment allocations into each fund on a client basis with the guidance of a Financial Planner appointed by the Public Trustee.

The following is a description of the asset allocations pertaining to the Common Funds.



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CONSERVATIVE PORTFOLIO

Investment Profile:- Conservative, stable return, medium term. The Conservative investment portfolio has been constructed to offer moderate levels of capital growth and thereby outperform inflation, whilst at the same time limiting capital volatility such that the historical incidence of the probability of a negative return in any one year is 12%, and to provide sound income yield. This fund distributes income on a quarterly basis.

Sector

Asset Allocation

30 June 2008

Net Asset Value

30 June 2008

Tolerance

(%)

Australian Shares 16% $584,495 15.0% 14-18

International Shares 10% $361,989 9.3% 9-11

Listed Property Securities 4% $136,780 3.5% 3-5

Total Growth 30% $1,083,264 27.8% 28-32

Australian Fixed Interest 14% $542831 13.9% 12-16

International Fixed Interest 14% $593,118 15.2% 12-16

Cash 42% $1,679,763 43.1% 40-44

Total Income 70% $2,815712 72.2% 68-72

Total 100% $3,898,976 100.0%

*Includes distributions switched into another fund (in order to rebalance the Portfolio) and management fees rebates

The Growth sector was outside of tolerance limits as at 30 June 2008. The portfolio was rebalanced on 3 July 2008.



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PERFORMANCE

Performance before fees, taxes and transaction costs

Year ended 30 June 2008 Portfolio (%)

Benchmark (%)

Deviation (%)

3 Months -0.58 -0.85 0.27

6 Months -3.48 -3.80 0.32

12 Months -1.23 -1.60 0.37

3 Years (pa) 6.03 5.84 0.19

Since Inception (1 October 2002) 7.16 7.01 0.15

The Benchmark index is as follows:

Australian shares: S&P ASX 300 Index International shares: MSCI World ex-Australia (net dividends reinvested)

unhedged Listed property securities: S&P ASX 300 Property securities index Australian fixed interest: UBS Australian composite bond index International fixed interest: Citigroup world government bond index hedged into AUD Cash: UBS Australian bank bill index



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BALANCED PORTFOLIO

Investment Profile:- Some scope for risk, Medium outlook. The portfolio is diversified and protects the investor from inflation seeking reasonable rates of growth whilst seeking some tax efficiency and an income return. The portfolio will display some level of risk in that the historical incidence of the probability of a negative return in any one year is 20%. This fund distributes income on a quarterly basis.

Sector

Asset Allocation

30 June 2008

Net Asset Value 30 June 2008

Tolerance

(%)

Australian Shares 26% $1,416,563 27.1% 24-28

International Shares 17% $815,538 15.6% 15-19


Emerging Markets Shares 1% $ 58,745 1.1% 0.5-1.5

Total Growth 50% $2,557,435 48.9% 48-52

Australian Fixed Interest 14% $757,899 14.5% 12-16


Cash 22% $1,186,167 22.7% 20-24

Total Income 50% $2,669,095 51.1% 48-52

Total 100% $5,226,530 100.0%


The Portfolio weightings were all within the defined tolerance limits as at 30 June 2008; so there was no need to rebalance at that time.



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PERFORMANCE

Performance before fees, tax and transaction costs


Benchmark (%)

Deviation (%)

3 Months -2.20 -2.22 0.02

6 Months -8.08 -8.28 0.20

12 Months -6.55 -6.75 0.20

3 Years (pa) 6.13 5.95 0.18

Since Inception (pa) 8.00 7.86 0.14



unhedged Listed property securities: S&P ASX 300 Property securities index Australian fixed interest: UBS Australian composite bond index International fixed interest: Citigroup world government bond index hedged into AUD Cash: UBS Australian bank bill index Emerging market shares: MSCI emerging markets free index (net dividend

reinvestment) unhedged



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GROWTH PORTFOLIO

Investment Profile:- Growth expected, higher risk, long-term investment. The portfolio invests in a broad range of quality investments predominantly in assets that provide for growth in capital returns. The portfolio is of a higher risk in nature in that the historical incidence of the probability of a negative return in any one year is 25%. The portfolio is designed for the investor who seeks a higher rate of return and is able to invest for a greater length of time so as to contend with the cyclical nature of growth oriented asset classes. This fund distributes income on a quarterly basis.

Sector

Asset Allocation

30 June 2008

Net Asset Value 30 June 2008

Tolerance (%)

Australian Shares 37% $2,476,658 37.9% 35-39

International Shares 23% $1,388,124 21.3% 21-25


Emerging Markets Shares 2% $ 117,451 1.8% 1.5-2.5

Total Growth 70% $4,475,048 68.5% 68-72

Australian Fixed Interest 14% $945,622 14.5% 12-16


Cash 2% $148,257 2.3% 1-3

Total Income 30% $2,057,111 31.5% 28-32

Total 100% $6,532,159 100.0%


The Portfolio weightings were all within the defined tolerance limits as at 30 June 2008; so there was no need to rebalance at that time.



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PERFORMANCE

Performance before fees, tax and transaction costs


Benchmark (%)

Deviation (%)

3 Months -3.58 -3.56 -0.02

6 Months -12.40 -12.61 0.21

12 Months -11.41 -11.66 0.25

3 Years (pa) 6.34 6.10 0.24

Since Inception (pa) 9.01 8.79 0.22



unhedged Listed property securities: S&P ASX 300 Property securities index Australian fixed interest: UBS Australian composite bond index International fixed interest: Citigroup world government bond index hedged into AUD Cash: UBS Australian bank bill index Emerging market shares: MSCI emerging markets free index (net dividend

reinvestment) unhedged



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COMMON FUND FEES TABLE FOR THE PUBLIC TRUSTEE FOR THE NORTHERN TERRITORY

Fees and Expenses Table

Fund Fee Type Fee pa Management Expense Ratio

Public Trustee Common Fund No 1: Cash Common Fund

Management Fee Levy

Not More than 2.2% (GST Inclusive) 1.21%(GST Inclusive)

2.03% (GST Inclusive)

Public Trustee Common Fund No 2: Conservative portfolio

Management Fee Levy

Not More than 2.2% (GST Inclusive) .11%(GST Inclusive)


Public Trustee Common Fund No 3: Balanced Portfolio

Management Fee Levy



Public Trustee Common Fund No 4: Growth Portfolio

Management Fee Levy



Calculated in accordance with the Investment and Financial Services Association Policy No 4 (2000) as at 30 June 2007 (GST inclusive). Levy and Management Fees are combined.

Management expense ratio

The Management expense ratio measures the total fees and expenses charged annually to the Trust excluding transaction costs. It is calculated on the total of the management fee, underlying asset management fee, custodial fees and other expenses divided by average fund size.

Unit price valuation

The net asset value representing the foundation for the unit price for each fund is valued on a weekly basis. The majority asset under each asset sector within each fund is valued daily. The Public Trustee reserves the right to calculate the net asset value for each fund as required.



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Fee Calculation basis

All fees are charged daily against the net asset value of each fund, accumulated and distributed to the Public Trustee for the Northern Territory on a quarterly basis.

ADMINISTRATIVE FEES AND CHARGES

The fees charged by the Public Trustee are set by Determination notified in the Gazette in accordance with S74(2) of the Public Trustee Act. The fees were amended during 2002/03 and are GST exclusive. The main elements of the fee schedule are as follows:

• $35 for wills if naming Public Trustee as Executor

• $70 for wills where Public Trustee is not named as Executor

• $20 for amendments to wills prepared by Public Trustee

• $100 for ‘complex’ wills

• $400 for administration work where grant of representation is not obtained

• In respect of the administration of estates

- $150 for the first $1000 worth of assets administered,

- 4% for the next $199,000 worth of assets administered



- 1% for assets in excess of $600,000

- commission of 6% on income received.

• In respect of the administration of trusts

- 1% of the capital and a commission of 6% on income received.

- Levy not to exceed 1.1% per annum

- Management fee not to exceed 2% per annum

COMPLAINTS

During the year under consideration there were no formal complaints registered with the Ombudsman.



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STAFFING STRUCTURE OF THE OFFICE

Public Trustee

Deputy Public Trustee

Principal Trust Officer & Senior Property Manager

x 2 FTE

Trust/Wills Officers x 2 FTE

Executive Assistant &

Administration Officer

Warehouse Manager & Storeperson/Custodian

x 2 FTE

Finance Officer

Assistant Finance Officer

Senior Trust Officer x 2 FTE

Assistant Trust Officer x 1 FTE



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FINANCIAL REPORT

FOR THE YEAR ENDED 30 JUNE 2008



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STATEMENT BY PUBLIC TRUSTEE FOR THE NORTHERN TERRITORY

In my opinion, the accompanying Financial Report of the Common Funds comprising Income Statements for Common Funds 1 to 4, Balance Sheets for Common Funds 1 to 4, Statements of Changes in Equity for Common Funds 1 to 4, Cash Flows Statement for Common Funds 1 to 4 and Notes to the Financial Statements are based on proper accounts and records and have been properly drawn up so as to present fairly the transactions of the Public Trustee Common Funds for the year ended 30 June 2008 and their financial position at that date.

Peter Shoyer

Public Trustee For the Northern Territory

Dated:-



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COMMON FUND 1 : THE CASH COMMON FUND

INCOME STATEMENT


Note 2008 2007

$ $

INCOME

Interest – Bank and Loans 139,576 165,335

Interest – Managed Funds 1,035,498 813,962

Change in Net Market Value of Investments 12 234,837 (60,051)

Other Income 3 337,003 339,044

1,746,914 1,258,290

EXPENDITURE

Government Management Fees and Levy 2(q) 502,374 634,635

Legal and Advisory Expenses 9,138 9,380

Other Expenses 4 120,576 112,414

632,088 756,429

SURPLUS FOR THE YEAR 1,114,826 501,861

To be read in conjunction with the accompanying notes to the accounts.



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BALANCE SHEET

AS AT 30 JUNE 2008

Note 2008 $

2007 $

ASSETS

Current

Cash and Cash Equivalents 973,070 2,319,205

Investments 5 15,696,659 16,962,801

Receivables 2(h) 28,809 47,110

16,698,538 19,329,116

Non Current

Coonawarra Store – Valuation 2007 2(d) 360,000 210,000

TOTAL ASSETS

17,058,538 19,539,116

LIABILITIES

Accrued Expenses 62,036 75,140

NET ASSETS 16,996,502 19,463,976

EQUITY

Funds under Administration 7 16,633,310 19,355,629

Undistributed Surplus 8 363,192 108,347

TOTAL EQUITY 16,996,502 19,463,976




30

COMMON FUND 1 : THE CASH COMMON FUND STATEMENT OF CHANGES IN EQUITY


Note 2008 $

2007 $

Balance of Equity at 1 July 19,463,976 18,293,355

Funds Under Administration

Balance at 1 July 19,355,629 18,039,082

Proceeds from client activity 29,069,283 21,383,064

Payments made on behalf of clients (31,791,602) (20,066,517)

Balance at 30 June 16,633,310 19,355,629

Undistributed Surplus

Balance at 1 July 108,347 254,273

Surplus for the Period 1,114,827 501,861

Less Distribution Paid (859,982) (647,787)

Balance at 30 June 8 363,192 108,347

BALANCE OF EQUITY AT 30 JUNE 16,996,502 19,463,976




31


CASH FLOWS STATEMENT


Notes 2008

$

2007 $

Cash Flows From Operating Activities

Income 1,519,748 854,203

Expenses (645,194) (731,326)

Net Cash Provided by operating activities 9(a) 874,554 122,877

Cash Flows from Investing Activities

Payments for investments (1,819,040) (4,266,959)

Proceeds from sale of investments 3,180,651 2,847,357

Net cash provided by (used in) investing activities 1,361,611 (1,419,602)

Cash Flows from Financing Activities

Proceeds received from clients activity 28,209,302 22,150,873

Payments made on behalf of clients (31,791,602) (20,191,173)

Net cash (used in) provided by financing activities (3,582,300) 1,959,700

Net increase (decrease) in cash held (1,346,135) 662,975

Cash and cash equivalents at the beginning of the period

2,319,205 1,656,230

Cash and cash equivalents at the end of the period 973,070 2,319,205




32

COMMON FUND 2 : THE CONSERVATIVE FUND

INCOME STATEMENT


Note 2008 2007

$ $

INCOME

Interest - Bank 9,226 6,165

Trust distributions 243,345 181,005

Changes in net market value of investments 12 (339,407) 244,520

(86,836) 431,690

EXPENDITURE

Management fees 2(l) 75,715 84,554

Other expenses 86 76

75,801 84,630

SURPLUS(LOSS) FOR THE YEAR (162,637) 347,060




33


BALANCE SHEET

AS AT 30 JUNE 2008

Note 2008 2007

$ $

ASSETS

Current

Cash and cash equivalents 18,199 18,764

Investments 5 3,897,738 3,908,374

TOTAL ASSETS 3,915,937 3,927,138

LIABILITIES

Current

Payables 6,514 6,479

TOTAL LIABILITIES 6,514 6,479

NET ASSETS 3,909,423 3,920,659

EQUITY

Funds Under Administration 7 3,909,423 3,920,659

TOTAL EQUITY 3,909,423 3,920,659




34


STATEMENT OF CHANGES IN EQUITY


Note 2008 2007

$ $

As at 1 July 3,920,659 4,347,651

Surplus(Loss) for the year (162,637) 347,060

Distributions to unitholders (487,732) (103,329)

Application for units 2,855,467 2,051,591

Redemption of units (2,216,334) (2,722,314)


To be read in conjunction with the accompanying notes to the accounts



35




Note 2008 2007

$ $

Cash flows from operating activities

Interest received 9,226 6,165

Management fees (81,105) (91,735)

Other expenses (86) (76)

Net cash used in operating activities 9(a) (71,965) (85,646)

Cash flows from investing activities


Proceeds from sale of investments 2,120,000 2,605,000

Net cash provided by (used in) investing activities (80,000) 1,020,000

Cash flows from financing activities

Proceeds from unit applications 2,879,403 2,051,592

Payments on redemptions (2,240,271) (2,722,314)

Income distributed (487,732) (263,883)

Net cash provided by (used in) financing activities 151,400 (934,605)

Net increase(Decrease) in cash held (565) (251)

Cash and cash equivalents at the beginning of the period 18,764 19,015

Cash and cash equivalents at the end of the period 18,199 18,764




36

COMMON FUND 3 : THE BALANCED FUND

INCOME STATEMENT


Note 2008 2007

$ $

INCOME



Changes in net market value of investments 12 (692,590) 494,296

(387,194) 677,662

EXPENDITURE



99,206 103,313





37

.COMMON FUND 3 : THE BALANCED FUND

BALANCE SHEET

AS AT 30 JUNE 2008

Note 2008 2007

$ $

ASSETS

Current


Investments 5 5,223,832 5,296,173

TOTAL ASSETS 5,239,306 5,307,013

LIABILITIES

Current

Payables 8,802 8,778


NET ASSETS 5,230,504 5,298,235

EQUITY


5,230,504 5,298,235




38

COMMON FUND 3 : THE BALANCED FUND



Note 2008 2007

$ $

As at 1 July 5,298,235 5,608,927

Surplus for the year (486,400) 574,349


Application for units 2,139,369 956,336

Redemption of units (1,179,757) (1,748,219)





39

COMMON FUND 3 : THE BALANCED FUND CASH FLOWS STATEMENT


Note 2008 2007

$ $







Payments for investments (1,059,537) (195,000)

Proceeds from sale of investments 744,537 1,505,000

Net cash provided by (used in) investing activities (315,000) 1,310,000


Proceeds from unit applications 2,139,369 956,336

Payments on redemptions (1,179,756) (1,748,218)


Net cash provided by (used in) financing activities 418,670 (1,227,423)

Net increase (decrease) in cash held 4,634 (25,229)






40

COMMON FUND 4 : THE GROWTH FUND

INCOME STATEMENT


Note 2008 2007

$ $

INCOME



Changes in net market value of investments 12 (1,198,352) 716,494

(828,788) 876,326

EXPENDITURE



(129,173) (111,415)





41


BALANCE SHEET

AS AT 30 JUNE 2008

Note 2008 2007

$ $

ASSETS

Current


Investments 5 6,527,576 6,660,521

TOTAL ASSETS 6,544,598 6,685,235

LIABILITIES

Current

Payables 11,152 11,067


NET ASSETS 6,533,446 6,674,168

EQUITY


6,533,446 6,674,168




42




Note 2008 2007

$ $

As at 1 July 6,674,168 4,653,006

Surplus(loss) for the year (957,961) 764,911


Application for units 1,933,125 1,987,500

Redemption of units (747,409) (654,024)





43




Note 2008 2007

$ $








Proceeds from sale of investments 316,000 600,000

Net cash provided for (used in) investing activities (693,000) (881,000)


Proceeds from unit applications 1,933,125 1,987,500

Payments on redemptions (747,409) (654,025)


Net cash provided by (used in) financing activities 817,239 989,475

Net increase(decrease)in cash held (7,692) (2,914)






44

NOTES TO THE FINANCIAL STATEMENTS


1. ACTIVITIES OF THE PUBLIC TRUSTEE

The functions of the Public Trustee are defined in the Public Trustee Act 1985 and include the administration of deceased estates and trusts and the preparation of wills. The Public Trustee also acts as financial manager under order from the court under the Aged and Infirmed Act. This financial report shows the value of trust and estates and management funds under administration at the year-end.

2 STATEMENT OF ACCOUNTING POLICIES (a) Basis of Accounting

The financial report is a general purpose financial report which has been prepared in accordance with the Australian Accounting Standards (including Australian Accounting Interpretations).

The financial report is prepared on an accrual basis and is based on the historical cost convention, except for the valuation of managed fund investments and the Coonawarra Store, which are recorded at fair value.

(b) Operation of the Common Funds

The common funds have been established pursuant to the Public Trustee Act. The Common Fund was separated into four Common Funds on 1 October 2002. Three of the Common Funds are managed by an external financial manager and reported separately from Common Fund 1 which is managed internally.

External advisers have been appointed to assist with the management of Common Funds 2, 3 and 4. The external advisers appointed are Sandhurst Trustees Limited.

(c) Valuation of investments

The net market value of managed investment schemes (unlisted unit trusts) is determined by reference to the last available sales price of the scheme, as quoted on the day of valuation, which inherently includes transaction costs. Changes in the net market value of investments are recognised in the Income Statement and transferred to unit holders’ funds reserve until realisation.

(d) Valuation of Coonawarra Road Store

The investment in Coonawarra Store is measured on a fair value basis. At each reporting date, the fair value of the asset is reviewed to ensure that it does not differ materially from the asset’s fair value at that date. The last valuation was conducted on the 1

st November 2007

and will be conducted every 3 years; the next valuation will be due in 2010.

(e) Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the entity and the revenue can be reliably measured. Specific revenues are recognised as follows:

Trust distributions

Trust distributions from managed investment funds are recognised on an accrual basis up to balance date.



45

2. STATEMENT OF ACCOUNTING POLICIES (continued)

Interest income

Income from cash on deposit is recognised on an accrual basis.

Change in the net market value of investments

Gains and losses on investments are calculated as the difference between the net market value at sale, or at the year end, and the net market value at the previous valuation point. This includes both realised gains and losses and unrealised gains and losses.

(f) Cash and Cash Equivalents

For the purpose of the Cash Flow Statement, cash and cash equivalents includes notes and coins held, advances made and any deposits with a bank or financial institution held at call or with an original maturity of three months or less that are readily convertible to known amounts of cash and subject to insignificant risk of change in value.

(g) Investments and other financial assets

Investments and other financial assets are categorised as either financial assets at fair value through profit and loss, or loans and receivables. The classification depends on the purpose for which the financial asset was acquired.

Financial assets are recognised and derecognised upon trade date. When financial assets are recognised initially, they are measured at fair value. In the case of assets not at fair value through profit and loss, directly attributable transaction costs are taken into account.

Financial assets are derecognised when the contractual rights to the cash flow from the financial assets expire or the asset is transferred to another entity. In the case of transfer to another entity, it is necessary that the risks and rewards of ownership are also transferred.

Financial assets at fair value through profit and loss

Investments designated as fair value through profit and loss are shares in managed investment funds (unlisted unit trusts).

The investment portfolio for each of the Common Funds is managed in accordance with a documented investment strategy on a fair value basis. The portfolio’s performance was managed and evaluated on a fair value basis, and information about the portfolio was provided internally on a fair value basis to the Public Trustee and Public Trustee Investment Board.

Investments designated as fair value through profit and loss are initially measured at their fair value at settlement date. After initial recognition, financial assets at fair value through profit and loss are measured at their fair value. The fair value is determined in accordance with unit prices at the balance date as advised by the managers of the funds. The unrealised increment (decrement) in the fair value (market value) of the portfolio is recognised in the Income Statement.



46

Loans and receivables

Financial instruments designated as loans and receivables are short term deposits with major banks, trade and other receivables and mortgage loans receivable. Subsequent to initial recognition such assets are carried at amortised cost using the effective interest rate method.

Impairment of financial assets

Financial assets are assessed for impairment at each balance date.

If there is objective evidence that an impairment loss has been incurred for financial assets held at amortised cost, the amount of the impairment loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the asset’s original effective interest rate. The carrying amount is reduced by way of an allowance account. The loss is recognised in the Income Statement.

Additional disclosures in relation to financial instruments are provided at Note 10.

(h) Receivables

Receivables represent the amounts due but not yet received from the underlying investments of Common Funds 1 to 4.

(i) Payables

Payables are carried at amortised cost using the effective interest rate method. Due to their short term nature they are not discounted. Liabilities are recognised to the extent that the goods and services have been received (and irrespective of having been invoiced). The amounts are unsecured and usually paid within 30 days of recognition

(j) Income Tax

Under current income tax legislation, no income tax is payable by any of the Common Funds provided their taxable income is fully distributed.

(k) Distributions

Common fund distributions are made to contributors on a quarterly basis. Such distributions are determined by reference to the surplus of the Common Funds. Payment is not made until after the balance date as advice of distribution entitlements from underlying investments is not received by the Public Trustee until after the balance date.

Unrealised gains and losses on investments are not assessable and distributable until realised.

(l) Management fees

A management fee is charged against the Cash Common Fund at a rate of no more than 2.2% of the value of the Common Fund as at the first business day of each month.

(m) Transfer to/from unit holders’ funds

Unrealised gains and losses in the net market value of investments accrued income not yet assessable, expenses provided for or accrued but not yet deductible, and net capital losses are transferred to unit holders’ funds, and are not included in the determination of distributions to unit holders.



47

2. STATEMENT OF ACCOUNTING POLICIES (continued)

(n) Goods and Services Tax (GST)

The Common Funds are not registered entities under the Goods and Services Tax (“GST”) legislation. Expenses incurred and incomes earned by the Common Funds are recognised as inclusive of the amount of GST.

(o) Terms and conditions on units

With the exception of the Cash Common Fund each unit issued confers upon the unit holder an equal interest in the Common Funds, and is of equal value. A unit does not confer a right to any particular asset or investment of the Common Funds. Unit holders have various rights, including the right to:

* have their units redeemed, * receive income distributions, * attend and vote at meetings of unit holders, and * participate in the termination and winding up of the Common Funds.

The rights, obligations and restrictions attached to each unit holder are identical in all respects.

The Cash Common Fund does not issue units.

(p) Unit Prices

Unit Prices are determined in accordance with the Common Funds’ Constitution and are calculated on the net assets of the Common Funds adjusted for any transaction costs, divided by the number of units on issue.

(q) Commission, Levy and Management Fees

Levies and Management fees are charged to the Trusts and Estates in accordance with sections 24 and 28 of the Public Trustee Act and associated regulations.

(r) Accounting Standards Issued But Not Yet Effective

Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2008 reporting periods. The Board's assessment of the impact of these new standards and interpretations is set out below.

Revised AASB101 Presentation of Financial Statements and AASB 2007-8 Amendments to Australian Accounting Standards arising from AASB101 A revised AAS B101 was issued in September 2007 and is applicable for annual reporting periods beginning on or after 1 January 2009. It requires the presentation of a statement of comprehensive income and makes changes to the statement of changes in equity, but will not affect any of the amounts recognised in the financial statements. If the entity has made prior period adjustment or has reclassified items in the financial statements, it will need to disclose a third balance sheet (statement of financial position), this one being as at the beginning of the comparative period.



48

(s) Critical accounting estimates and judgements

The Public Trustee Investment Board evaluates estimates and judgements incorporated into the financial report based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data.

Key estimates – impairment

The Public Trustee assesses impairment at each reporting date by evaluating conditions specific to the Company that may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined. Value-in-use calculations performed in assessing recoverable amounts incorporate a number of key estimates.

Key judgements – provision for impairment of receivables

The Public Trustee Investment Board believes that all receivables are recoverable and no

provision for impairment of receivables has been made at 30 June 2008.

3. OTHER INCOME

2008

$

2007

$

Receipts from Fund Managers 317,003 321,660

Rent Received 20,000 17,384

Total 337,003 339,044

4. OTHER EXPENSES

2008

$

2007

$

Bank Charges 1,732 1,870

Property Expenses 20,105 13,337

Fund Management Fees 98,739 97,207

Total 120,576 112,414



49

5. INVESTMENTS

The funds in which the Common Funds invest hold various direct investments but the individual Common Funds have no direct control over these underlying investments. A break down of the investments as at 30 June 2008 is as follows:

Common Fund 1 Common Fund 2

2008 2007 2008 2007

$ $ $ $

Australian cash 15,213,427 16,329,247 1,679,763 1,654,561

Australian shares - 584,495 625,092

Australian fixed interest - 542,830 542,758

Australian property - 136,496 165,370

International shares - 361,609 380,484

International fixed Interest - 592,545 540,109

Mortgage Loans 483,232 633,554 - -

15,696,659 16,962,801 3,897,738 3,908,374


2008 2007 2008 2007

$ $ $ $

Australian cash 1,186,166 1,162,412 148,257 139,027

Australian shares 1,416,563 1,468,110 2,476,658 2,672,536

Australian fixed interest 757,899 739,124 945,622 924,730

Australian property 266,036 292,532 491,793 498,236

International shares 872,839 891,070 1,502,944 1,489,935

International fixed Interest 724,329 742,925 962,302 936,057

Mortgage Loans - - - -

5,223,832 5,296,173 6,527,576 6,660,521

6(a) UNITHOLDERS’ FUNDS Units on Issue

Movements during the period in the number of units on issue were:


2008 2007 2008 2007

Units Units Units Units

Balance at the beginning of the period

3,461,077 4,062,456 4,207,667 4,857,410

Applications 2,821,966 1,844,299 1,862,466 787,717

Redemptions (2,209,995) (2,445,678) (1,031,175) (1,437,460)

Balance at the end of the period 4,073,048 3,461,077 5,038,958 4,207,667



50

Common Fund 4

2008 Units

2007 Units

Balance at the beginning of the period 4,840,506 3,796,124

Applications 1,489,063 1,550,145

Redemptions (576,698) (505,763)

Balance at the end of the period 5,752,871 4,840,506

The Cash Common Fund 1 does not issue units.

(b) Components of unit holders' funds

Included within closing unit holders' funds are unrealised gains/ (losses) on investments.

2008 $

2007 $

Common Fund 2 (413,565) (98,148)

Common Fund 3 (745,999) 136,041

Common Fund 4 (1,232,261) 559,891

7. Funds under Administration

Common Fund 1

Common Fund 1

Common Fund 2

Common Fund 2

2008 $

2007 $

2008 $

2007 $

Deceased Estates 5,966,673 8,572,307 - -

Beneficial Trusts 2,529,600 1,689,338 446,492 1,159,148

Legal Trusts 4,915,263 4,985,900 1,403,813 1,707,154

Aged, Infirmed and Mental Health Trusts 2,333,870 3,225,346 2,059,118 1,054,357

Crimes Property Forfeiture 305,496 414,470 - -

Miscellaneous Trusts 582,408 468,268 - -

Total Funds 16,633,310 19,355,629 3,909,423 3,920,659

Common Fund 3

Common Fund 3

Common Fund 4

Common Fund 4

2008 $

2007 $

2008 $

2007 $

Deceased Estates - - - -

Beneficial Trusts 987,362 1,451,711 829,502 814,174

Legal Trusts 3,457,768 3,424,265 5,243,075 5,478,046

Aged, Infirmed and Mental Health Trusts 785,374 422,259 460,869 381,948

Crimes Property Forfeiture - - - -

Miscellaneous Trusts - - - -

Total Funds 5,230,504 5,298,235 6,533,446 6,674,168



51

Total Total

2008 $

2007 $

Deceased Estates 5,966,673 8,572,307

Beneficial Trusts 4,792,956 5,114,371

Legal Trusts 15,019,919 15,595,365

Aged, Infirmed and Mental Health Trusts 5,639,231 5,083,910

Crimes Property Forfeiture 305,496 414,470

Miscellaneous Trusts 582,408 468,268

Total Funds 32,306,683 35,248,691

8. UNDISTRIBUTED SURPLUS

Undistributed surplus is income received but not yet distributed to the Trusts and Estates.

9. NOTES TO THE STATEMENT OF CASH FLOWS

(a) Reconciliation of surplus to net cash provided by operating activities

Common Fund 1

2008 $

2007 $

Surplus for the year 1,114,826 501,861

- Changes in net market value of investments – unrealised (180,433) 189,741

- Movements in receivables 7,669 (566,832)

- Movements in payables (13,104) 25,104

- Realised gain on sale of investments (note 12) (54,404) (26,997)

Net Cash used in operating activities 874,554 122,877

Common Fund 2


- Changes in net market value of investments – unrealised 500,715 193,242

- Movements in dividends receivable - (44,778)

- Movements in payables 35 (939)


- Non cash dividends received from investments (244,622) (237,563)

Net Cash used in operating activities (71,965) (85,646)



52

Common Fund 3


- Changes in net market value of investments – unrealised 770,159 8,452


- Movements in payables 24 (953)




Common Fund 4


- Changes in net market value of investments – unrealised 1,222,310 (355,525)


- Movements in payables 86 3,054




10. FINANCIAL RISK MANAGEMENT

(a) Risk Management Objectives and Policies

The Common Funds have exposure to the following financial risks through the use of financial instruments:

• Market risk (interest rate risk and price risk)

• Credit risk

• Liquidity risk

Exposure to these financial risks is managed in accordance with the Investment Policy of the Public Trustee. The Public Trustee Investment Board, established under section 12 of the Public Trustee Act, is responsible for controlling the investment of money held on behalf of clients in the Common Funds.

The principal investment objective is to consider on each trust and estate, the return on investment having regard to the level of risk appropriate to the needs and objectives of the client. This includes maximising the investment rate of return within the nominal risk constraints and minimising the volatility of returns within each asset sector.

Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to movements in market interest rates.

The Common Funds are primarily exposed to interest rate risk from cash and cash equivalents and mortgage loan assets. As these are held in floating interest arrangements, the Common Funds are exposed to movements in the amount of interest it may earn on these assets.



53

Other than Common Fund 1, the common funds cash flows are not significantly dependant on interest earned from cash and cash equivalents, a sensitivity analysis of the interest rate risk has not been performed.

The table below details the interest rate sensitivity analysis of Common Fund 1 at the reporting date holding all other variables constant. As the operating cash flows of the other Common Funds are not significantly dependant on interest earned from cash and cash equivalents and mortgage loans, a sensitivity analysis of the interest rate risk for these funds has not been performed. A 100 basis point change is deemed to be possible change and is used when reporting interest rate risk.

Common Fund 1 Effect On Effect On

Change in Interest

Rate Profit or

(loss) Equity Profit or

(loss) Equity

2008 $

2008 $

2007 $

2007 $

- - - -

Interest Rate Risk + 100 basis points

14,563 14,563 29,527 29,527

- 100 basis points

(14,563) (14,563) (29,527) (29,527)

- - - -

The following tables disclose the interest rate repricing dates and effective weighted average interest rate on classes of financial assets and financial liabilities, is as follows:

Common Fund 1

Variable Interest Rate Within 1 Year

Non Interest Bearing

Total

Weighted Average Effective Interest

Rate

2008

$ 2007

$ 2008

$ 2007

$ 2008

$ 2007

$

Financial Assets

Cash 7.3%

Receivables

Mortgage Loan 9%

Investment

983,070

-

483,232

-

2,319,205

-

633,554

-

-

28,809

-

15,213,427

-

47,110

-

16,329,247

973,070

28,809

483,232

15,213,427

2,319,205

47,110

633,554

16,329,247

1,456,302 2,952,759 15,242,236 16,376,357 16,698,538 19,329,116

Common Fund 2

Variable Interest Rate

Non Interest Bearing Total

Weighted Average

Effective Interest Rate 2008

$ 2007

$ 2008

$ 2007

$ 2008

$ 2007

$

18,199

-

18,764

-

-

3,897,738

-

3,908,374

18,199

3,897,738

18,764

3,908,374

Financial Assets

Cash 7.3%

Investments

18,199 18,764 3,897,738 3,908,374 3,915,937 3,927,138



54

-

-

6,514

6,479

6,514

6,479

Financial Liabilities

Payables

- - 6,514 6,479 6,514 6,479

Common Fund 3


Non Interest Bearing Total Weighted Average

Effective Interest Rate

2008 $

2007 $

2008 $

2007 $

2008 $

2007 $

15,474

-

10,840

-

-

5,223,832

-

5,296,172

15,474

5,223,832

10,840

5,296,172

Financial Assets

Cash 7.3%

Investments

15,474 10,840 5,223,832 5,296,172 5,239,306 5,307,012

-

-

8,802

8,778

8,802

8,778


Payables

- - 8,802 8,778 8,802 8,778

Common Fund 4


Non Interest Bearing Total Weighted Average

Effective Interest Rate

2008 $

2007 $

2008 $

2007 $

2008 $

2007 $

Financial Assets

Cash 7.3%

Investments

17,022

-

24,714

-

-

6,527,576

-

6,660,521

17,022

6,527,576

24,714

6,660,521

17,022 24,714 6,527,576 6,660,521 6,544,598 6,685,235


Payables

-

-

11,152

11,067

11,152

11,067

- - 11,152 11,067 11,152 11,067

Sensitivity Analysis

As the Board's investments with Vanguard Investments are in the form of units in a unit trust, it is not possible to perform an effective sensitivity analysis as it is not possible to identify the proportion of the shares held by the trust which relate directly to the Board. The movement in the price of the units is a combination of the underlying shares invested and the overheads accruing to the trust. Credit Risk

Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Common Funds' maximum credit risk exposure at balance date in relation to each class of recognised financial assets is the carrying amount as disclosed in the Balance Sheet and notes to the financial statements.



55

The Common Fund 1 mortgage loan is past due but not impaired. There is security in place that fully covers the outstanding amount. An instituted payment plan is in place which has been consistently complied with by the client.

The Common Funds do not have any material credit risk exposure to a single debtor or group of debtors under financial instruments entered into by the Common Funds.

In order to manage credit risk the Common Funds bank accounts are held with an Australian “Big 4” bank, a diversified portfolio of managed funds is held and the Public Trustee Investment Board has a policy of “no new lending”.

Liquidity Risk

Liquidity risk is the risk that the Common Funds will encounter difficulty in realising assets or otherwise raising funds to meet commitments associated with financial instruments.

To control liquidity and cash flow risk, the Common Funds invest in financial instruments, which under normal market conditions are readily convertible into cash. The Public Trustee ensures that funds are available to meet client needs and also ensures that at any particular point in time there are sufficient current financial assets to meet current financial liabilities.

All financial liabilities have maturities of less than 3 months.

(b) Net Fair Values

The carrying amounts of financial assets and liabilities approximate their fair value. The fair value of assets and liabilities equate to the net market values.

11. SEGMENTAL INFORMATION

The principal activity of the Common Funds is the investment in one market segment, being unlisted wholesale funds all domiciled in one geographic segment, being Australia.

12. CHANGES IN NET MARKET VALUE OF INVESTMENTS

2008

$

2007

$

Common Fund 1

Realised capital gains during the period 54,404 26,997

Revaluation of investments to market value – Unrealised 180,433 (87,048)

234,837 (60,051)

Common Fund 2


Revaluation of investments to market value – Unrealised (432,898) (98,148)

(339,407) 244,520



56

Common Fund 3


Revaluation of investments to market value – Unrealised (777,574) 136,041

(692,590) 494,296

Common Fund 4


Revaluation of investments to market value – Unrealised (1,232,261) 559,891

(1,198,352) 716,494

13. CONTINGENT LIABILITIES

No contingent liabilities existed at 30 June 2008 or have arisen since balance date.

14. SUBSEQUENT EVENTS

As a result of the continued volatility in the financial markets, the common funds invested with the Vanguard Investments Australia decreased after the end of 2007-2008 year. At 31 October 2008 the net movement in the investment values were as follows:

Common Fund 1 - $ 175,458

Common Fund 2 - $ (168,643)

Common Fund 3 - $ (431,133)

Common Fund 4 - $ (788,706)

Total - $(1,213,024)



57

UNCLAIMED MONEYS

AND

MONEYS DEEMED

BONA VACANTIA



58

UNCLAIMED MONEYS AND MONEYS DEEMED BONA VACANTIA

(IN EXCESS OF $500) HELD BY THE PUBLIC TRUSTEE

AS AT JUNE 2008

DECEASED ESTATE NAME BENEFICIARY NAME AMOUNT

$

ESTATE:- GUISEPPE PALCICH 101,060.97

ESTATE:- JOHNNY BUFFALO PATRICIA LEHMAN 71,049.91

ESTATE:- CHIUSIU CHAN 38,717.47

ESTATE:- FRANK BEER 38,364.07

TRUST:- KELLIE BAKER 15,956.20

ESTATE:- ROBERT ALLEN SHANE ROBERT ALLEN 12,755.70

ESTATE:- GEORGE JAMDIJINGA 12,007.29

ESTATE:- JAMES RALPH REEVES 10,818.99

ESTATE:- MAIN MOE LAY 10,595.21

TRUST:- ALBERT WALPOLE 9,704.16

ESTATE: JAMES FARRELL 8,464.03

ESTATE: JENNY TIGER BAKER 7,195.20

ESTATE:- FRED BUTLER 6,985.81

ESTATE:- HELEN D TAYLOR EDWARD COLQUHOUN 6,804.14

ESTATE:- ROY WILLIAMS FRANCIS CUNNINGHAM 6,097.52

ESTATE: DAWNA BRAEDON WARREN BRAEDON 5,972.05

ESTATE: DAWNA BRAEDON RICKY BRAEDON 5,972.05

ESTATE: DAWNA BRAEDON JACQUELINE BRAEDON 5,972.05

ESTATE:- AT TRANBY RHONDA TRANBY 5,144.74

ESTATE:- ROY CUMMINS MAX AKA MAXIE CUMMINS 4,764.61

ESTATE:- HANSAKE HELLBERG 4,678.78

ESTATE:- JOSEPH N DOOLAN 3,461.69

ESTATE:- ELIZABETH NED JEREMY DODD 3,084.65

ESTATE:- FREDERICK KRIEGAR 2,989.02

ESTATE:- JAMES LIDDY 2,753.57

ESTATE:- ALI KAYAOGLU HULYA CIL 2,631.99

ESTATE:- ALI KAYAOGLU HUKUMRAN CIL 2,631.98

ESTATE:- ALI KAYAOGLU HAKAN CIL 2,631.99

ESTATE:- ALI KAYAOGLU HURRIYET CIL 2,631.99

ESTATE:- GERARD SMITH 2,479.72

ESTATE:- DON JAMES 2,084.16

ESTATE:- DINO VALLORANI ANTONETTE VALLORANI 1,872.24

ESTATE:- DOREEN ZAMMIT BARRY COFFIELD 1,753.52

ESTATE:- PADDY DIXON LEO DIXON 1,532.48

ESTATE:- WILLIAM WILLIAMS HEINZ EDWARDS 1,373.07

TRUST:- JONAS BRAZIER 1,312.47

ESTATE: ALMA GIBBS CHARLIE WAGAMAN 1,250.97

ESTATE:- FERDINAND DUFFY MARGARET DUFFY 1,238.36

ESTATE:- PAUL BARRY STEWART 1,152.24



59

UNCLAIMED MONEYS AND MONEYS DEEMED BONA VACANTIA

(CONTINUED)

(IN EXCESS OF $500)

HELD BY THE PUBLIC TRUSTEE

AS AT JUNE 2008

DECEASED ESTATE NAME BENEFICIARY NAME AMOUNT

$

ESTATE:- ROBERT WANAT OLGA STROSIKOVA 1,063.54

ESTATE:- ROY CUMMINS ROSS BOB AKA CHUNGALOO 953.84

ESTATE:- BARRY ROGERS 911.77

ESTATE:- T HEALEY JOHN GREENING 890.81

ESTATE:- RUBY BURTON HUGHI BURTON 883.89

ESTATE:- H ANDREWS ROBERT ANDREWS 854.61

TRUST:- ANTONETTE MASON 846.77

ESTATE:- W ROBERTSON CELESTE ROBERTSON 829.69

ESTATE:- J J HOLDEN ROBERT SEWELL 729.39

ESTATE:- J LONG DIANNE WILLIAMS NUNGALA 714.95

ESTATE:- JOSEPH LONG RODERICK JUNGARRAYI DECEASED 714.95

ESTATE:- BRIAN GAVIN LLOYD 543.25

ESTATE:- BRIAN LYLE HILL 543.24

ESTATE:- BRIAN KYLE HILL 543.24

TOTAL 438,971.00

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