2012 ANNUAL REPORT: THE YEAR IN REVIEW

3

Since 1985 UCA Funds Management has developed a strong investment performance record with funds under management now exceeding A$800 million.

We invest according to our values and yet we are consistently competitive.

Our product range is tailored to the needs of charities and not-for-profit organisations, as well as individual and institutional investors.

We see ourselves as custodians of our investors’ funds. And so performance and security are no less important than our rigorous standards of ethical investing.

In other words growth and the power to endure are things we take very seriously indeed.

UCA FUNDS MANAGEMENT FUND MANAGER WITH A CONSCIENCE™

We are always competitive, without ever compromising our values.

Now more than$800 million under management

• We continued to provide our investors with a sound investment strategy

• Charitable Funds

– UCA Cash Portfolio distributed 5.37%

– UCA Growth Portfolio returned 16.22%

– UCA Australian Equities Portfolio returned 16.25%

• Retail Funds

– Uniting Growth Fund returned 11.38%

– Development and Funeral Funds distributed 4.75%

• We changed our CEO. There was some disruption but our new CEO positions us strategically to achieve further success

• Nearly all of our surveyed customers rated our service as either excellent (70%) or above average (27%)

• Staff Satisfaction – 58% of staff are very satisfied

• Significant improvements in operations

– Disaster recovery time improved by 25%

– Website update increased access to information online

• Our sustainability reporting stepped-up from a Global Reporting Initiative Application Level of C+ to Application Level B+

• CO2 footprint down 29%

• Grant to Uniting Church of Australia Synod of Victoria and Tasmania $1.89 million

• We appointed two new female directors

2012 UNDER THE SPOTLIGHT

The twelve months of 2012 were not without their challenges. However at the start of the year we set ourselves a number of goals, all of which were achieved or surpassed.

Funds under management

grew by 9.67%

Strong ReturnsIncome to investors across all funds

increased by 16.68%

6 2012 ANNUAL REPORT: THE YEAR IN REVIEW

2012 Performance Page

Chairperson’s Statement 8

Chief Executive Officer’s Statement 9

Our Report 10

Our Performance 20

Auditor’s Report 32

GRI G3.1 Index Table 34

Feedback 153

Financial StatementS

UCA Cash Management Fund Limited 40

UCA Growth Fund Limited 70

UCA Funds Management Limited 98

Development Fund 118

Funeral Fund 136

2012 PerformanceGrI* SeLf DecLaraTIon B+

* The GRI provides a global sustainability reporting framework. Visit www.globalreporting.org for more information. This report fulfils the requirements for a GRI G3.1 Application Level B+

Repo

rt E

xter

nally

Ass

ured

G3 ProfileDisclosures

Management Approach Disclosures for each Indicator Category

Management ApproachDisclosures for each Indicator Category

Not Required

Report on a minimumof 10 PerformanceIndicators, includingat least one fromeach of: Economic,Social and Environmental.

Report on a minimumof 20 PerformanceIndicators, includingat least one fromeach of: Economic,Environmental, Human Rights, Labor, Society and Product Responsibility.

G3 ManagementApproach Disclosures

Repo

rt E

xter

nally

Ass

ured

Repo

rt E

xter

nally

Ass

ured

A+AB+BC+CStandard Disclosures

OUTP

UT

OUTP

UT

OUTP

UT

G3 Performance Indicatorsand Sector SupplementPerformance Indicators

Report on:1.12.1 – 2.103.1 – 3.8 3.10 – 3.124.1 – 4.4 4.14 – 4.15

Report on:1.1 – 1.22.1 – 2.103.1 – 3.134.1 – 4.17

Report on:1.1 – 1.22.1 – 2.103.1 – 3.134.1 – 4.17

Report on each core G3 and Sector SupplementIndicator with due regard to the Materiality Principle by either: a) reporting on the indicator or b) explaining the reason for its omission.

Report Application Level

8 2012 ANNUAL REPORT: THE YEAR IN REVIEW 9

UCA Funds Management occupies an enviable position in the funds management sector. Established in 1985 it is one of Australia’s most experienced ethical fund managers and in that time it has grown steadily and has established an excellent investment track record. I am enthusiastic about the potential for the future development of this pioneering organisation.

In an ongoing environment of global financial uncertainty the organisation underwent significant change in 2012 – from leadership to regulatory change. Despite this, it continued to deliver strong returns for our investors and grew funds under management by 9.67%. In addition, the funds delivered grants of $1.89 million to the Uniting Church. This is a stellar achievement.

Our investment strategy during 2012 was to focus on providing reliable income streams to our investors. Certainty of income is vitally important to enable the Uniting Church and its Agencies, as well as other not-for-profit investors, to continue delivering key community services. What’s more, a stable income stream has become a focus of investors generally.

While continuing to manage risks (those associated with an uncertain financial environment and regulatory reforms) we believe that with our expertise and reputation as a conservative and prudent fund manager we also have opportunities. We are excited by our opportunities for growth as outlined further on page 26 in Maximising our Opportunities for Growth.

Our remit is clear: to deliver competitive investment returns from conservatively managed portfolios that follow a clearly understood and articulated ethical investment policy. Our efforts in 2012 to increase business efficiencies, reduce risk and increase compliance, help provide the foundation for strategic growth. The organisation has invested in quality processes and systems, developing the operations team to further support the investment team and to better service our clients. We have a strong client service culture, which is reflected in the 2012 survey to which 8% of our client base responded. 70% of respondents rated UCA Funds Management’s service as excellent. A further 27% responded that it is above average.

In 2013 we look forward to building on these solid foundations to further develop our standing in the ethical funds sector and to continue to grow funds under management. We will continue to build our sustainability capabilities across all areas of our business with greater focus on our participation in the United Nations Principles for Responsible Investment (UNPRI) and enhancing the sustainability elements of our own business practices particularly in the areas of energy and waste management, employee engagement and education about ethical investing. We will also provide support for the investment team as the funds’ portfolios are positioned and refined to maintain competitive investment returns with a moderate level of risk. Growth will deliver not only economies of scale but also an increase in our annual contribution to the work of the Uniting Church in Victoria and Tasmania.

With key leadership positions bedded down, a clear business strategy, and a well-articulated investment strategy, we can establish a sound basis for new business growth. Most importantly, though, we have a dedicated team of staff – professionals who deliver on our commitment to strong investment returns, ethics and exceptional customer service.

Michael Walsh CEO 23 April 2013

CHAIRPERSON’S STATEMENT DICk CARTER

I’m pleased to deliver our 2012 Annual Report. It is shorter and more succinct and reflects our own efficiencies during the year. It also delivers more strategic management disclosure which we trust gives you more information upon which to base your judgements.

We have combined our annual and sustainability reporting deliberately. Having both in the same document demonstrates the degree to which sustainability is ingrained in what we do. We are ethical investors and we consider environmental, social and governance (ESG) issues seriously. We can’t expect others to report on their ESG performance, and to run sustainable businesses, without applying the same high standards to our own business.

funds Performed well With official cash rates averaging 3.70% and falling to 3% in December, the UCA Cash Portfolio returned a very competitive 5.37% for the 2012 year. As equity markets rebounded strongly, UCA Growth Portfolio returned a healthy 16.22% for the year. Refer to page 22 for more detailed performance figures.

We have been working through our strategy and it is producing results. Our funds under management grew by 9.67% this year to exceed $800m and we aim to have $1 billion funds under management in 2013. Detailed information on our 2013 strategies is outlined in the

section Our Strategy on page 10. These are substantial opportunities, but we shall have to work at it. Our goal will require targeted and systematic work whilst being cognisant of the risk of managing growth.

We recognise our role as a responsible, conservative, long-term investor. We plan to sustain our investment consistency to give confidence to our investors so they can meet their needs for a reliable income stream. For our clients, we need to be prudent and guard their funds. At the same time we also need to ensure that those funds are put to purposes compatible with a more sustainable world.

In part, because of our long-term view, our stakeholders intend to be with us for the long-term. As a result we feel less pressure to take risky decisions and stock picks. This has enabled us to deliver a strong result in 2012.

Graeme Rough, our CEO, stepped down in August. We thank Graeme for the substantial increases in funds, the important new client relationships and the development of major new products that occurred under his stewardship. I also wish to thank Sue Norman for filling the position so admirably in the last quarter. We conducted an extensive executive search for a CEO to take us expertly through the next stage and were delighted to welcome Michael Walsh to the role in early 2013. Michael has over 30 years’ funds and risk management experience, with outstanding skills in ethical investment.

I wish to thank the staff and fellow Board members for their professional and skilled input, and to thank our investors for their ongoing support through a sometimes challenging year. The Board’s desire to have gender balance on the Board was achieved with the appointment of kerrie Howard and Gayle Wilson. I would like to draw particular attention to my fellow Board member Roger Male, who concluded his ten-year tenure with the Board this year. Roger has served the Board admirably and UCA Funds has benefited hugely from his experience, good judgement and passion.

Dick Carter Director Chairperson 23 April 2013

CHIEF ExECUTIVE OFFICER’S STATEMENT MICHAEL WALSH


1

2

3

45

6

7

8

9

10

OUR REPORT

mission/Vision

Our mission is to support the Uniting Church, tax concession charities and the general community by providing efficient and ethical management of deposited funds.

Our vision is to improve returns to investors while increasing funds under management within our ethical investment policies. Our greatest social responsibility is to uphold our ethical mandate throughout our business.

who we areUCA Funds Management Limited (UCA Funds) is Australia’s most experienced ethical funds management company, with funds established in 1985. UCA Funds is a company limited by guarantee. It operates a funds management business on behalf of the Uniting Church in Australia, Synod of Victoria and Tasmania — our owner and major stakeholder. Our mission is to provide safe stewardship of investors’ money with reliable and competitive returns.

UCA Funds has a strong team of highly skilled and respected investment management professionals and a commitment to the core values of the Uniting Church through the Ethical Investment Policy, which informs our investment decisions.

At the close of 2012, our total workforce was 23. We are based at Level 5, 130 Little Collins Street, Melbourne, Victoria. Our corporate office and operations arm are located here.

UCA Funds is the manager / trustee for the following funds:

charitable• UCA Cash Portfolio;• UCA Growth Portfolio;• UCA Australian Equities Portfolio.

indiViduals and corPorate• Uniting Growth Fund;• Development Fund;• Home Endowment Fund (Ministers only); and the • Funeral Fund.

our strategyIn 2012 we continued to grow our funds under management, with an increase of 9.67% to $800 million. We hope to further grow funds under management to $1 billion in 2013. This will keep us competitive, allow us to take advantage of economies of scale, and will enable increased investment income for the Synod.

In 2013 our business development will focus on those Uniting Church agencies and bodies that are not yet investors, other charitable or not-for-profit organisations, and individuals with goals compatible to our ethical investing policies.

we will deliVer this by continuing to:• Offer a range of cash and equity products which are

appropriate to our clients;• Follow prudent and professional investment policies

which emphasise security, competitive returns and compliance with our strict ethical policy;

• Provide clients with a level of service that demonstrates a level of care and interest above the norm of the banking and finance industry; and

• Recruit, train and nurture a team of staff who are both professionally competent and share the company’s values and goals.

table 2 – source of inVestor funds as at 31/12/2012

table 1 – funds under management as at 31/12/2012 – $820 million

1

2

34

5

6 7 8

source

1. Congregations

2. Aged Care

3. Agencies

4. Schools/kinder

5. Other NFP Churches & Charities

6. Uniting Church Assembly & Other Synods

7. VIC/TAS Synod

8. Reserve

9. Development Fund and Funeral Fund

10. Uniting Growth Fund

source

1. UCA Cash Portfolio

2. UCA Growth Portfolio

3. Australian Equity Portfolio

4. Other Church Loans under administration

5. Development Fund

6. Home Endowment Fund

7. Uniting Growth Fund

8. Individually managed account


about the rePortThe UCA Funds Management Annual Report 2012 is our sixth annual sustainability report. This is the fourth year we are using the Global Reporting Framework (GRI) using G3.1 and Financial Sector Supplement guidelines (for more information on the framework and its methodology visit www.globalreporting.com). Previously reporting at GRI Application Level C+, we were determined to report more deeply and intently on our sustainability initiatives as required when moving to GRI Application Level B+. Our self-declaration of B+ is independently assured by Deloitte Touch Tohmatsu, and their independent limited assurance statement is printed on pages 32 and 33. UCA Funds believes independent assurance showcases transparency and provides additional external rigour to our business practices.

The annual reporting period is by calendar year – 1st January 2012 to 31st December 2012. The report is limited to UCA Funds Management – the activities of UCA Funds and its controlled entities. The basis for reporting is dictated by UCA Funds’ accounting policies as applied to the preparation of its financial statements. Our most recent prior report is the UCA Funds Management 2011 Sustainability Report.

In defining the report content, we applied the GRI Reporting Framework’s Guidance on defining report content and associated principles. This involved completing a materiality review to determine and prioritise topics – we have identified our stakeholders and reviewed main topics raised by stakeholders, sustainability risks and issues of importance to the organisation.

restatementsIn 2012 we have re-stated the ratios of salary between genders (p31), our total workforce profile (p29) and our staff travel (p28). In each case we changed measurement methods. We previously drew data from employees only, but now wish to incorporate data from our contractors as they constitute an ongoing 17% of the total workforce. We have not recalculated prior years.

determining materialityIn 2012 we undertook an extensive materiality review to ensure this report would reflect the organisation’s significant economic, environmental and social impacts, and covers areas of interest that may substantively influence the assessments and decisions of our stakeholders.

The process was two-phased. Team representation from management completed a detailed materiality questionnaire. A shortlist of possible GRI indicators was created, one that proposed both the inclusion and exclusion of current indicators. Additional inputs to this process are the customer survey, annual staff survey, interviews with the CEO, Chairperson, subject area experts and stakeholders from Uniting Church in Australia, Synod of Victoria and Tasmania. Assessments were also based on the marketplace, social and political environments, and risks.

The result determined that we would maintain reporting on most of our selected GRI indicators with the exception of FS3, which is more appropriate for providers of capital. This report is available on our website.

The importance of the social indicators and in particular anti-corruption was found to be highly material. This is reflected in our immediate inclusion of indicator SO3 and additional information on corruption this year (see page 16). We also intend to give greater attention to human rights and product responsibility.

Given there will be significant changes to the GRI reporting structure in 2013, we agreed to conduct another materiality review next year where the following GRI indicators will also be reviewed for inclusion; FS6, FS7, FS9, LA12, HR2, HR3, LA9, PR3, PR7, PR8, PR9 and SO5.

our stakeholdersThis report has been written for our stakeholders. The Uniting Church in Australia, Synod of Victoria and Tasmania (Synod) is our largest stakeholder with 70% of our Funds under Management stemming directly from the Synod and Agencies’ investments. The Synod created UCA Funds to provide a safe place for their money, to ensure its capital was working ethically and to provide income to enable the Church to continue its work. Many of our individual investors are church members, attracted to ethical investing and our competitive investment returns. Our investors are predominately domestic. (For further information on the Uniting Church in Australia visit www.uca.org.au) Other key stakeholders include not-for-profit entities, regulators, equity investors, employees, our suppliers, brokers and other fund managers.

A connection to the values-based investment strategy is what binds many of our investors and is mutually agreeable to all. Our connection with the Church and its values is what often draws in further investors. The transparency with which we communicate our ethical investments allows us to conduct our relationships with the remainder of our stakeholders in an accountable way.

We engage regularly and robustly with our stakeholders (refer to the Stakeholder Engagement Table 2012 on our website for a full listing of our stakeholder activities). In the preparation of the 2012 report we have conducted a materiality review which consolidates the views of our major stakeholders, clients and employees. Close communication and engagement with our clients is critical because investors need a clear understanding of our business, our vision and our strategic direction to help them make well-informed investment decisions. Two-way exchange is vital as our clients need to provide us with an understanding of what they are looking for, further aligning with the long-term strategic direction of the company.

client surVeyIn 2012 a survey inviting feedback on our service and communications was sent out to all clients, for all funds. Eight per cent (415) responded. Seventy per cent of respondents rated our service as excellent, above average (27%), average (2%) and below average (0.3%). Seventy-four per cent strongly agreed that service is always delivered in a timely and friendly manner. The same percentage said that they would refer UCA Funds to their family and friends.

When asked specifically about the layout and content of the 2011 Sustainability Report the result is still strong, but not quite as glowing. Thirty-four per cent strongly agreed that the most relevant issues were covered, 58 per cent agreed and 8% neither agreed nor disagreed. Clients had a few areas for improvement which are listed on page 14.

There was virtually no negative feedback about our customer service. Suggestions for improvement include online account balances, clearer and logical access to information on the website, and for statements to be sent earlier. Some suggested more information to help with making investment decisions. These will be reviewed in 2013 when we assess further ways to build our website capability and to determine how best we can facilitate greater financial literacy amongst clients and our stakeholders.

Our clients’ privacy is paramount and we have had no breaches of privacy this year. Our complaint process is well documented and accessible on our website. There were no investor complaints in 2012.

Since 1985 we have been investment stewards for charities, foundations and philanthropic organisations, as well as socially concerned retail investors.

We seek high standards from those companies in which we invest, and we impose equally high standards on ourselves. Those standards are reflected in this report.


social issuesEvery year the Synod undertakes a survey of its members to determine social issues of importance. It bases its annual social justice work plan on these priorities. We know that the following issues (listed in order) are important to 165 UCA members in Victoria and Tasmania. As such, they give insight into our investors (as they are primarily drawn from Church membership) and the Synod’s priorities. They enable us to track potentially important issues as they arise and to plan and respond accordingly in our Ethical Investment Policy.

in 2012 the top 10 social issues for church members were:

1. Asylum seekers and refugees 2. Combating people trafficking and slavery 3. Indigenous issues (Australian) 4. Poverty in Australia 5. Overseas poverty 6. Climate change, reducing emissions 7. Mental health 8. Supporting people with disabilities 9. Alcohol reform 10. Fair trade

why our inVestors trust us with their moneyIt’s not just about returns, or even our high standards of ethical investing. Many of our investors are not-for-profit organisations, which means, of course, that the vital work they do for the community does not generate income.

In other words they depend upon the funds they entrust to us, and we take the stewardship of those financial assets very seriously indeed.

goVernance

Our investors trust us with their money, and in return we aspire to the highest levels of good governance, transparency and accountability. Ensuring we have the processes in place to go beyond compliance paves the way for our sustainable future, delivering reliable and substantial returns on investment and upholding our values.

Our Board sets the mark, harnessing strategy and ensuring we are accountable to our stakeholders. The structure and composition of the Board is vital. With the exception of the Executive Director, all directors are non-executive and are independent of the activities of the funds (please see our website for a definition of independence). Non-executive directors may not serve for a continuous period of longer than ten years.

The Board’s Charter (visit www.ucafunds.com.au) is to provide strategic guidance and effective oversight of management. The Board has ultimate oversight of our sustainability practises, the most ubiquitous being our Ethical Investment Policy and this Report, which is signed off by the Board. We are establishing a compliance regime to monitor and report on our Sustainability performance to the Board via the Audit and Compliance Committee.

There are three committees of the Board: Audit & Compliance, Investment, and Remuneration & Nomination. The Board meets at least six times a year. The Audit & Compliance and Investment Committee meet at least quarterly and the Remuneration & Nomination Committees meets at least twice a year.

The Board annually reviews its own performance and in August completed self-review questionnaires. In response, the scope of the Nomination Committee was changed and renamed the Remuneration and Nomination Committee. It was enhanced to include greater transparency and fairness, with the performance reviews and remuneration

of the CEO and the management team included within its remit. Its Charter is available on our website and also includes the process for appointment to the Board, the criteria for Board membership, and the expertise and experience requirements. This is influenced by our Policy on the Appointment of Board Members – Director’s Role & Qualifications, and Selection Process.

In December 2012 Roger Male concluded his ten-year term on the Board. Roger has contributed a significant amount to the development of UCA Funds Management; he was chair for the Audit and Compliance Committee from October 2008, a member of the Remuneration and Nomination Committee, and in recent times the deputy chair of the Board of Directors. In 2012 as part of our succession planning we have appointed two new Board

members, kerrie Howard and Gayle Wilson. They bring additional financial services industry experience to the Board and also help us achieve greater gender diversity representation for women of 22%. This is a long-term goal of the Board and we wish to see a continuation of the upward trend.

An annual declaration of conflicts of interests is required by Board and staff, and is also a standing Board agenda item. Our Board can be engaged via a number of mechanisms. The Synod’s representatives are invited to attend two Board meetings each year and we have an all-staff and Board gathering annually for the exchange of views.

stakeholder issues

Clients: were looking for further information on products, clear and concise information, web accessibility, our actions with regards to ethical investments, and great stories about the Synod’s activities. They were interested in our ethos and standards, our professionalism and delivery of quality funds management. We have further updated our website and are planning a wider range of information through our newsletter.

Employees: looking for greater involvement in decision making and wider communication channels that keep them more informed. (See staff survey results page 31.) We have reinstated monthly CEO briefings and staff are invited to opt-in to a broader range of meetings if interested.

Owner: Discussed the importance of maintaining ethical investment outcomes, the issues of an ageing membership base and strategic directions for the Synod.

table 3 – board of directors

name time in office Position independent committee memberships

Richard Carter 6 years Chair, non-executive Yes Investment, Remuneration & Nomination (Chair)

John Etherington 5 years Director, non-executive Yes Audit & Compliance (Chair from December 2012)

Daryl Hawkey 6 years Director, non-executive Yes Audit & Compliance, Remuneration & Nomination

kerrie Howard5 months – from 1 July 2012

Director, non-executive Yes Audit & Compliance

Roger Male10 years – until 12 Dec 2012

Director, non-executive Yes Audit & Compliance (Chair to October 2012)

Richard Moore 7 years Director, non-executive Yes Audit & Compliance

Sue Norman16 Oct 2012 – until 6 Feb 2013

Director, executive No Remuneration & Nomination

Graeme Rough2 years – until 10 Aug 2012


John Simkiss 7 years Director, non-executive Yes Investment (Chair)

Stephen Taylor 9 years Director, non-executive Yes Investment, Remuneration & Nomination

Michael WalshAppointed 4 Feb 2013


Gayle Wilson6 months – from 1 June 2012

Director, non-executive Yes Investment


comPliance

Compliance presents an opportunity at UCA Funds, an opportunity to better our processes, assume greater transparency for our stakeholders, to increase our competitiveness and to learn more about our ongoing business. The key focus now, and in the future, is the increase in regulatory requirements. But this brings an opportunity to increase our growth, by continued improvement of effective systems, including risk and compliance management programs which assist with management, provide security and achieve efficiencies. A comprehensive compliance system provides comfort that we are a prudent place to invest. In 2012 we launched our Whistleblower Policy. Sixty five per cent of staff received training on discrimination, fraud and corruption as part of our ongoing program: 40% of these were managers, 60% non-managers. To the best of our knowledge there were no incidents of corruption.

UCA Funds has a comprehensive compliance and risk management program which reports to both the Board and Audit & Compliance Committee on a quarterly basis. Our program monitors internal controls around compliance with legislation, regulations and policies, including our Ethical Investment Policy. We comply with the Corporations Act 2001 and Regulations, the Anti-Money Laundering and Counter-Terrorism Financing Act 2006, and the Australian Accounting standards. We also adhere to the standards of the Financial Services Council (FSC), Responsible Investment Association of Australasia (RIAA) and the United Nations Principles of Responsible Investment (UNPRI).

In 2012, UCA Funds complied (to the best of our knowledge) with national codes, international codes and all relevant standards. There were three incidents of non-compliance; one was a unit pricing error, one was the key Person requirement of our Australian Financial Services Licence, and the other was an incorrect interest rate published in Crosslight, the Synod’s newsletter. All were swiftly rectified.

We undertake independent audit and assurance engagements as we believe it provides transparency and confidence in our reporting regime and is an investment in quality. We undertake regular, comprehensive audits of our financial statements, annual and sustainability reports, our unit price and operational procedures, which range from an initiation of trade to withdrawal or deposits by clients. Our auditors report directly through the Audit & Compliance Committee to the Board.

discrimination

At UCA Funds we believe that all individuals must be treated with dignity and respect and have a zero tolerance towards discrimination. Unfortunately this year we had two incidents of discrimination during the reporting period. Both incidents have been reviewed and resolved. We have a number of policies that address discrimination including equal opportunity, bullying, harassment and sexual harassment, code of conduct and appropriate use of email. Our process upon notification of a complaint is to advise Human Resources. They supply counselling and, if required, advise on any corrective action. Both of these incidents came to light as a direct result of the introduction of our new Whistleblower Policy in June 2012. We hope this continues to provide the impetus for staff to report any instances of discrimination, and illegal or unethical activity.

inVesting ethicallyOur Ethical Investment Policy plays a key role in providing good stewardship of investors’ funds and transparency and accountability to our actions. Each investment must adhere with the Policy, which aligns to the ethos of the Uniting Church in Australia.

In doing so we seek to consistently invest in companies which promote human welfare, dignity and respect to ensure that investors, including the Church, are not profiting from activities harmful to society. (Visit www.ucafunds.com.au for our Ethical Investment Policy.)

Policy foundations

Our Ethical Investment Policy and all investment policies are reviewed annually by the Investment Committee and Board, incorporating inputs from our Portfolio Management team and any changes that may stem from the Uniting Church. In July 2012 our Ethical Investment Policy was reviewed by the Investment Committee and then adopted by the Board of Directors. There were no changes made.

We have a number of investment policies, to be read in conjunction with the Ethical Investment Policy that deliver guidance to our investment strategies for each Fund. These are the UCA Australian Equities Portfolio Investment Policy, UCA Growth Portfolio Investment Policy, Uniting Growth Fund Investment Policy, UCA Cash Portfolio Investment Policy and the UCAFM Voting Policy. Collectively these investment and ethical policies set out a framework and process for our ethical investing.

They allow us to voice UCA Funds Management’s ethical agenda and to impact company decisions and strategy. The details of these can be found in our Funds’ product offer documents, all of which are located on our website.

our ethical investment Policy encourages investment in companies that produce goods or services which:

• Enhance the health and welfare of individuals and communities; and

• Preserve the environment.

we avoid investing in companies whose products, services or practices:

• Cause or perpetuate injustice and suffering;• Infringe human rights;• Cause unacceptable damage to the natural

environment; or• Have unacceptable occupational health and

safety practices.

We also avoid investing in companies that support oppressive regimes.

Prohibited industries are armaments, uranium, gambling, alcohol production, tobacco manufacturing and pornography.

comPliance, monitoring and breaches

We conduct ethical screening of the companies we invest in. We classify investments as positive, neutral and negative. The majority of our investments will be in companies which are considered to be neutral and investments are made on the basis of our investment criteria. As at 31/12/2012, 18.48% of the ASx 300 was subject to a negative screen. We do not invest in these stocks.

Our investment decision-making process is internally managed and exclusions are based on our ethical criteria. Generally a company will be reviewed by a member of the investment team when it becomes a member of the S&P/ ASx 300. The company will be researched to check if any of its current or proposed activities are inconsistent with our Ethical Investment Policy. We encourage companies to produce reports that consider ESG principles and support the Global Reporting Index as a framework tool for reporting. After UCA Funds has invested in a company, there are regular ongoing reviews to check that they still comply with our policy. We have a fluid portfolio and we have around 20-40 stocks held at any one time throughout the year. As at 31st December 2012 our top ten stock holdings in UCA Growth Portfolio were: Australia and New Zealand Banking Group, Commonwealth Bank of Australia, National Australia Bank Limited, Telstra Corporation Limited, Wesfarmers Limited, Bradken Limited,

ASx Limited, Suncorp Group Limited, InvoCare Limited, and Seek Limited. For a full listing of stocks in all funds visit our website.

We utilise a combination of our own, and external broker research, to monitor if there has been any change in the operations of a company which may be in breach of our Ethical Investment Policy. If a company is in breach of our Ethical Investment Policy, a research paper is prepared for the Portfolio Managers Meeting (a weekly meeting of the investment team and the CEO) outlining the reason the stock may be in breach. The Portfolio Managers Meeting will determine if the stock is to be excluded from our investment universe, placed on “watch” (if the breach is considered to be immaterial, that is less than 5% of activities), or that no action is required. If the Portfolio Managers Meeting decides to exclude the stock, or place it on “watch”, the recommendation is put to the next Investment Committee meeting. If ratified by the Board, the decision is effective from the start of the next month.

We recognise that there will be occasions when companies inadvertently breach some of the principles and where genuine efforts are made to rectify the breaches. We will not prohibit investment in a company where a breach of the principles, in relation to its products or services, constitutes no more than 5% of the company’s activities; the breach may be balanced by other positive actions. We acknowledge that decisions will always be complex involving a balance between positive and negative factors.

In 2012 there were no companies added to our exclusion list. Orica Limited was added to our watch list after it pleaded guilty to environmental breaches after leaking cyanide from its Yarwun facility near Gladstone, Queensland.

The company pleaded guilty to four breaches of the Environmental Protection Act, including the release of cyanide through stormwater and for not testing for the chemical for the 20 months up to February 2012.

Orica was fined $432,000 and consented to a court order for the undertaking of a comprehensive independent audit of the Yarwun site and has committed $30 million of investment to upgrade the facility.

The full exclusion and watch lists can be found on our website.

UCA Funds will continue with its current direction, preferring to modify that company’s behaviour where possible, rather than being quick to exclude them from our investable universe.


PositiVe screening

Positive screen stocks are selected for investment on a case-by-case basis in line with our positive screen definition. This is to invest in companies which promote human welfare, dignity and respect, and for the general good; and with regard to companies’ sustainability reporting and environmental, social and governance commitments.

An example of a current positive screen investment is Sims Metal Management Ltd: Sims Metal is a metal recycler that is an inherently sustainable company. It started sustainability reporting in 2006 and remains strongly committed to reporting on a number of key environmental, OH&S and community areas. The company was also recently selected as one of the “Global 100 Most Sustainable Corporations” at the 2012 World Economic Forum in Davos, Switzerland for the fourth year in a row.

engagement

We do not generally engage with companies that are excluded by the Ethical Investment Policy unless we are an investor. Where UCA Funds in an investor, we prefer to modify company behaviour where possible, rather than exclude them from our investable universe.

When internal or external research indicates an area of concern, we either engage directly with the company, or engage with a broker or through a responsible investment organisation. Engagement usually takes the form of writing to the company, meeting with executives, explaining our position and recommending a change in practice. UCA Funds may make our concerns public should the undesirable activity continue to take place.

The interactions/engagements are monitored at the weekly Portfolio Managers Meeting. If there are multiple company engagements at the one time then the Portfolio Managers will vote on which engagement holds priority. If it is decided that a current interaction/engagement is not progressing at the desired rate then an appropriate strategy will be decided on to remedy the situation. This strategy once again may take the form of writing to the company or meeting with executives to follow up on any progress.

In 2012 we did not engage in interactions with any company as there were no contentious issues.

Proxy Voting

The Board has established policies and procedures for voting on significant matters at Annual General Meetings of companies in which the funds invest. The Voting Record and Policy is available on our website and was reviewed and updated in 2012. The policy addresses environmental, social and governance (ESG) issues. In general the Funds have six categories it will consider: the election or re-election of directors, non-executive director remuneration, executive share and option schemes, remuneration reports, changes to the constitution, and operational issues including environment and social matters. All resolutions are considered by the Portfolio Managers and action is taken on any significant matters.

ian baster b econChief Investment Manager

With over 40 years’ experience and 19 years with UCA Funds, Ian Baster has a proven investment track record. Ian has also been instrumental in achieving the incorporation of the funds, the acquisition of AFS Licence, strategic portfolio construction, policy formation and development of good governance.

Ian had extensive experience prior to UCA Funds in funds management, stockbroking and mining including:

• Rivkin James Capel• Hambros Strauss Simon• AC Goode & Co• Wallace H Smith & Co.

Ian was also director of UC Super for seven years and taught stock market investment for many years.

noel bryant adV. diP oPtion theory [chicago], cta, ca [sa] Portfolio Manager

Noel has 40 years’ experience in funds management and stockbroking and has:

• Managed a multi-billion dollar portfolio at South African Mutual Life (Old Mutual)

• Managed the fixed interest component of the Life Fund at National Mutual Australia

• Managed both the multi-billion dollar Prime Asset Ratio portfolio and the one-billion dollar fixed interest and arbitrage trading portfolio of the ANZ Bank Ltd

• Advised the Managing Director and Asset & Liability Committee on global interest rate and foreign exchange hedging trends and positions at the ANZ Bank Ltd

• Designed, marketed and managed the first Australian Future Fund at the ANZ Bank Ltd.

tim starke b com, accredited deriVatiVes adVisor leVel 1&2Portfolio Manager

Tim has 10 years’ experience which includes:

• Specialist knowledge in investment instruments using complex option hedging strategies and trading scenarios to manage risk whilst maximising reward

• 2IC of $600m option hedged equity loan book at Merrill Lynch

• Establishing the Option Enhanced Investment Loan (OEIL) at BT Financial / Westpac, as well as the BT Financial Margin Lending Covered Call product.

our inVestment management team

From left to right: Noel Bryant, Ian Baster, Tim Starke

20 2012 annUaL rePorT THe Year In reVIeW 21

Dec-1

2

Oct-1

2

Aug-12

Jun-12

Apr-1

2

Feb-12

Dec-1

1

Oct-1

1

Aug-11

Jun-11

Apr-1

1

Feb-11

Dec-1

0

Oct-1

0

Aug-10

Jun-10

Apr-1

0

Feb-10

Dec-0

9

Oct-0

9

Aug-09

Jun-09

Apr-0

9

Feb-09

Dec-0

8

Oct-0

8

Aug-08

Jun-08

Apr-0

8

Feb-08

Dec-0

7

Oct-0

7

Aug-07

Jun-07

120

110

100

90

80

70

60

50

40

S&P/ASX300 Acc INDEX

UCA Ethical Acc INDEX

UCA Aust Equities

IND

EX

OUR PERFORMANCE

table 4 – financial Performance (oVerView of economic Value generated)

2012 $000’s

2011 $000’s

2010 $000’s

2009 $000’s

direct economic Value generated

INVESTMENT INCOME 65,161 53,603 47,274 41,498

OTHER INCOME (3,698) 53 (2,403) (3,139)

TOTAL DIRECT ECONOMIC VALUE GENERATED 61,463 53,656 44,871 38,359

economic Value distributed

EMPLOYEE WAGES AND BENEFITS (2,584) (2,188) (1,971) (1,778)

OPERATING COSTS (2,002) (1,922) (2,430) (2,271)

PAYMENTS TO PROVIDERS OF CAPITAL (54,985) (47,352) (38,298) (32,509)

PAYMENTS TO GOVERNMENT – – –

COMMUNITY INVESTMENTS (SYNOD) (1,892) (2,194) (2,172) (1,801)

TOTAL ECONOMIC VALUE DISTRIBUTED (61,463) (53,656) (44,871) (38,359)

TOTAL ECONOMIC VALUE FOR THE YEAR – – –

UCA Funds Management has a strong track record. Our ethical guidelines are clear and are rigorously applied. What’s more, our performance measures up strongly against other funds – not only ethical funds, but also those which have no ethical investment policy.

cumulatiVe Performance comParison

2012 continued to be challenging, with the impact of the sovereign debt/global financial crisis continuing to be felt. We focused on providing a high income stream through prudent investment strategies to enable increased community support through grants.

The grant to the Synod was $1,892,000 compared to

2011 which totalled $2,194,000, 2010 $2,172,000 and 2009 $1,801,000.

The income allocated to the investors in 2012 was $54,484,000, which was an increase of 16.68% compared to 2011 $46,696,000, 2010 $38,284,000 and 2009 $32,509,000.

statement of financial Position

2012 $000’s

2011 $000’s

2010 $000’s

2009 $000’s

TOTAL CURRENT ASSETS 769,000 701,305 693,302 665,047

TOTAL LIABILITIES ATTRIBUTABLE TO INVESTORS (769,000) (701,305) (693,302) (665,047)

Total assets and liabilities attributable to investors are based on bid value as per IFRS financial reporting standards to remain consistent with Financial Statements which are included in the report. This amount differs from the market valuation of total Funds Under Management on page 11. Based on the reporting entities administered and controlled by UCA Funds Management Limited. (IMAs and other administered funds are not included.)

reliable and comPetitiVe returns for inVestors


table 5 – summary of the Performance returns and rankings of the uca australian equity Portfolio Comparative performance history of UCA Australian Equity Portfolio relative to:• the S&P/ASx300 Accumulation Index as a benchmark• peer group, which is the Morningstar Equity Australia Large Blend

Periods to 31 December 20123 Months

Actual1 Year Actual

2 Years % p.a.

3 Years % p.a.

5 Years % p.a.

7 Years % p.a.

10 Years % p.a.

UCA AUST EQUITIES PORTFOLIO 3.65 16.25 0.47 2.40 -0.62 4.06 9.04

S&P ASx300 ACCUMULATION 6.77 19.74 3.25 2.80 -1.81 4.06 9.05

VALUE ADDED -3.12 -3.49 -2.77 -0.39 1.19 0.00 -0.01

MORNINGSTAR AUSTRALIAN EQUITY LARGE BLEND CATEGORY 6.66 18.19 2.42 1.65 -2.20 n/a 8.69

CONSUMER PRICE INDEx (CPI) 0.20 2.20 2.60 2.65 2.74 2.85 2.77

CPI + 3% P.A. 0.95 5.20 5.60 5.65 5.74 5.85 5.77

table 9 – annualised total returns to 31 december 2012

Comparative performance history of Uniting Growth Fund to:• the S&P/ASx300 Accumulation Index as a benchmark • peer group, which is the Morningstar Australia OE Multisector Aggressive

Retail

6 Months to December

2012 %

1 Year to December

2012 % p.a.

2 Years to December

2012 % p.a.

3 Years to December

2012 % p.a.

5 Years to December

2012 % p.a.

Since Inception to December

2012* % p.a.

UNITING GROWTH FUND 9.26 11.38 -0.47 2.88 0.08 7.57

MORNINGSTAR AUSTRALIA OE MULTISECTOR AGGRESSIVE CATEGORY 10.68 15.53 3.76 3.75 -1.75 n/a

S&P/ASx300 ACCUMULATION INDEx 16.10 19.74 3.25 2.80 -1.81 9.20

*Inception 7 July 2003

table 7 – summary of Performance returns

• Performance for the UCA Growth Portfolio and the Uniting Growth Fund is compared to several market benchmarks, although comparison with these benchmarks is not ideal, given that approximately 18.48% of the S&P/ASx300 index is excluded due to ethical constraints.

Past performance to 31 December 2012

1 year %

3 Years % p.a.

5 Years % p.a.

7 Years % p.a.

10 Years % p.a.

Since Inception % p.a. Inception Date

UCA CASH PORTFOLIO 5.38 5.60 5.66 5.94 5.71 7.88 1 Jul 1985

UCA GROWTH PORTFOLIO 16.22 3.05 -0.61 4.06 8.88 9.87 1 Jul 1985

DEVELOPMENT FUND 5.12 † † † † † #

FUNERAL FUND 5.12 † † † † † Feb 1997

UNITING GROWTH FUND 11.38 2.88 0.08 3.83 n/a 7.57 7 Jul 2003

† the Development Fund and Funeral Fund earn the UCA Cash Portfolio rate less a margin that is paid as a grant to the Synod to enable it to carry out its charitable activities. Changes to this margin may occur when adjustments to interest earned in the UCA Cash Portfolio rate are passed through to the Development Fund and Funeral Fund on a deferred basis. / # the inception of the Development Fund predates the union of the Congregational, Methodist and Presbyterian Churches in 1977 to form the Uniting Church in Australia.

table 8 – annualised total returns to 31 december 2012 Comparative performance history of UCA Growth Portfolio relative to:• the S&P/ASx300 Accumulation Index as a benchmark• peer group, which is the Morningstar Australia OE Equity Australia Large Blend

Churches and Charities

6 Months to December

2012 %

1 Year to December

2012 % p.a.

3 Years to December

2012 % p.a.

5 Years to December

2012 % p.a.

7 Years to December

2012 % p.a.

10 Years to December

2012 % p.a.

Since Inception to December

2012 % p.a.

UCA GROWTH PORTFOLIO 12.21 16.22 3.05 -0.61 4.06 8.88 9.87

MORNINGSTAR EQUITY AUSTRALIAN LARGE BLEND CATEGORY 15.54 18.19 1.65 -2.20 n/a 8.69 n/a

S&P/ASx300 ACCUMULATION INDEx 16.10 19.74 2.80 -1.81 4.06 9.05 10.7

Total assets and liabilities attributable to investors are based on bid value as per IFRS financial reporting standards to remain consistent with Financial Statements which are included in the report. This amount differs from the market valuation of total Funds Under Management on page 11.

table 6 – summary of the Performance returns of the uca cash Portfolio

Periods to 31 December 20121 Year Actual

3 Years % p.a.

5 Years % p.a.

7 Years % p.a.

10 Years % p.a.

20 Years % p.a.

UCA CASH PORTFOLIO (AFTER FEES) 5.38 5.60 5.66 5.94 5.71 5.91

CPI 2.20 2.65 2.74 2.85 2.77 3.48


community inVestorsDelivering reliable and competitive returns helps provide certainty to our investors in delivering their own community services. In times of economic uncertainty, when demands for not-for-profit organisations are heavier than ever, money to achieve their goals becomes much harder to find. In delivering a reliable income stream, we know that we are helping our investors to deliver vital community programs. Here are a range of activities undertaken by some investors in 2012.

wesley fire and clay

The ceramics team at Wesley Fire and Clay prove that it’s not just clay that evolves at this long-running social enterprise, but people. Clay is a malleable material; it changes shape, form, colour and hardness. It is something of great potential, whether in its humble form or exulted into spectacular colour and style. This daily metamorphosis is not the only one that happens at Fire and Clay, a disability enterprise run by Wesley Mission Victoria.

Positive changes occur each day for the 40+ potters and artists working at Fire and Clay, all of whom have been unable to sustain regular work.

People are working in small groups. There is plenty of eye contact, warm support and encouragement. Gerard McAdam, Coordinator at Fire and Clay explains, “There are many stages in our production, from greenware, to wheelwork, painting and glazing, each relying on the skill of those before them. Each person has their role to play in the creation of such lovely ceramics.” But he admits, “As delightful as our artwork is, by far our greatest success is enabling our staff to realise their own sense of worth.”

Wesley Mission Victoria has investments in the UCA Growth Portfolio and the UCA Cash Portfolio. For more information visit www.fireandclay.org.au

kildonan uniting care, energy and financial hardshiP exPerts

Celebrating its 130-year history in 2012, kildonan Uniting Care continues to establish programs that quietly address injustice and provide community services to address social and economic hardship through a suite of programs tailored to children, youth, families and individuals.

In 2012 they won a Victorian Premier’s Sustainability Award for their work. One such program is the Home Energy Saver Scheme (HESS).

In 2003 kildonan conceived and incubated a unique in-home energy visit. It focuses on how people interact with energy, how we can change behaviours, and low-cost activities to create long-term sustainable change for lower income households. Demand for the service continued and the vital experience from this time resulted in kildonan Uniting Care being selected as National Coordinator of the Australian Government’s Home Energy Saver Scheme becoming the delivery partner for Victoria.

HESS will provide energy efficiency services to around 100,000 low-income households, including in-depth assistance and home visits to about 50,000.

The home visit service empowers those facing hardship to feel in control of their situation and to take necessary steps to stabilise their energy use and to work towards financial stability. As a result of better energy management, those on marginal incomes can enjoy financial relief and reduced financial stress – especially stress caused by the threat of disconnection. This is achieved by helping households to lower their energy use and by providing help in understanding bills and payment alternatives.

kildonan Uniting Care has investments in the UCA Growth Portfolio and the UCA Cash Portfolio. To watch Vicky’s energy story or obtain more information, please visit www.kildonan.unitingcare.org.au

360 degree ethical inVesting – giVing back to the community In 2012 UCA Funds made a grant of $1.89 million to the Uniting Church in Australia Synod of Victoria and Tasmania (Synod). This grant provides a significant proportion of the income required by the Synod to further the mission of the Church and its agencies operating within the not-for-profit sector. This is the unique aspect of 360 degree ethical investing. It is a fundamental objective of UCA Funds that the returns from our ethically invested funds provide funds that are, in turn, used constructively and sustainably within society.

The Synod and its agencies had a positive year celebrating many new community initiatives established within Victoria and Tasmania, although the unscheduled closure of Acacia College in Melbourne was felt by all. The Synod is currently undertaking a review of events leading up to the closure to understand how it happened and to ensure that key lessons are learned and are applied throughout the Synod.

council of christians and Jews (ccJ)

The grant provided by UCA Funds supports a range of Synod projects, programs and initiatives designed to promote respect, tolerance and understanding across Christian and other faiths. One such organisation is the Council of Christians and Jews (CCJ). It is the oldest interfaith body in Australia and aims to foster close relationships and developments with people who have historically been adverse to each other.

“The council is made up of religious leaders from both faiths, across each spectrum and denomination,” said CCJ administrator Liz Parker.

“The continued funding we get facilitates a forum that educates people about what the faiths have in common, redressing historical relationships that have been fraught.”

She believes it’s the continuation of the historical trouble into contemporary times which shows the need for a broad debate between the faiths.

“This is really important as sadly there is a rise in anti-Semitism, particularly in Europe. There is increasingly a real need for meaningful interfaith dialogue, both one-on-one and from a broader perspective.

“This work could not continue without the wonderful financial support we receive – we are totally dependent on donations. The council is a model of what can be achieved when faiths want to work together,” said Ms Parker.

For more information visit www.ccj.org.au

UCA - 360 CAMPAIGN_CASE_V1-OL.ai 1 1/08/12 1:02 PM


In 2012 our growth stemmed from new investors including Church agencies, congregations and other not-for-profits. The Development Fund grew by $19 million, our Cash Portfolio grew as we continued to offer very competitive rates, and we experienced a natural rise as the share market improved, which underlies the growth in the Equities Portfolio and Growth Funds.

There are significant opportunities for us to further grow our funds under management, and we know that our aim of $1 billion is achievable.

Opportunities to expand our investment constituency beyond Victoria and Tasmania in the short to mid-term include:

• connecting with like-minded not-for-profit charities; • individuals looking for 360 degree ethical investing.

building our rePutation

As Australia’s most experienced ethical investor we have built a reputation on our performance and are proud to have repeatedly outperformed our peers. In late 2012 we appointed a new Marketing Manager, to help us share and build our reputation amongst existing and new audiences. In 2013 we will develop a marketing strategy to support our business strategy and increase awareness of our company with new audiences.

Our rating by independent research houses is also an important aspect for us to build upon in the medium term. They undertake an extensive review of internal company operations to ascertain their rankings which will list us amongst our peers and allow us greater exposure to potential investors worldwide.

industry recognition

We believe that participation, active advocacy and representation in global and local movements are an important part of demonstrating leadership in the ethical investment industry. We participate in regular forums, conferences and councils in order to share our expertise and to ensure we expose ourselves to best practice. In August 2012 our Portfolio Manager, Greg Chapman, spoke at the Responsible Investment Association Conference on ‘Building your Toolbox for Ethical Investment’. We also participated in the Morningstar Conference in Sydney and the ACSI conference.

sPonsorshiP

We sponsored the third Annual Environmental Social & Governance Research Australia (ESGRA) Award which was held in Melbourne on Friday 30 March 2012. The Awards are an acknowledgment of ESG-inclusive research conducted by stockbrokers in Australian equities, which resulted in the submission of 24 research papers from five broking firms. They cover a range of topics, with issues around coal seam gas, employee engagement, governance and corruption, all vying for top honours. The event also included a panel session between institutional, corporate and advice industry leaders where they discussed current ESG issues.

Award winners received the prize of an investment in a UCA Funds Management portfolio for the charity of their choice. Being a sponsor for these events raises the profile of UCA Funds Management.

During August 2012, UCA Funds Management was a key sponsor of the Responsible Investment Association of Australia (RIAA) International Investment Conference, held in Melbourne. The conference brought together a wide range of global participants in the responsible investment community to engage in dialogue relating to current issues.

Panel discussions and questions from the audience centred on the potential costs of responsible investing and whether the exclusion of non-ethical companies was detrimental to longer term investments.

Through active participation and sponsorship of events, UCA Funds Management raises its profile and leadership position within the investment industry, and capitalises on its ranking as the 6th largest responsible investment manager within Australia.

financial Planning

Another area of growth has been in the area of financial planning. Designed to support clients, our financial planning arm provides crucial financial education for those reaching significant stages in life. Our experienced financial planner has established 55 clients in 2012 and expects this to more than double in 2013. Providing information for consideration and the tools to support our clients in achieving their financial objectives is important to us.

our industry affiliationsWe voluntarily meet our obligations of membership for each group below. This includes maintaining annual declarations, checklists and surveys, and certification processes.

maximise oPPortunities for growth

Member since 2006 Member since 2007




table 10 – resource consumPtion

2012 2011 2010 2009 Change %

2012 Carbon footprint

tonnes of cO2

ELECTRICITY CONSUMPTION (MJ)* 179,495 226,922 176,043 140,169 21 73

GAS CONSUMPTION (MJ) 59,513 93,785 90,112 96,763 37 3

COMBINED GAS AND ELECTRICITY (MJ) 239,008 320,707 266,155 236,932 25 76

TOTAL WATER CONSUMPTION (kL) 179 201 93 117.94 11 –

AIR FLIGHTS (kM) 14,042 87,600 26,365 161,660 84 1

MOTOR VEHICLE (kM) 2,071 9,381 6,185 3,840 78 0.42

STAFF COMMUTING TO/FROM WORk (kM) 153,456 215,616 194,304 114,240 29 7

TOTAL CARBON FOOTPRINT 85 119 70 72 85

*Electricity purchased is from non-renewable sources. For further information on the basis of our calculations, see the Corporate Social Responsibility section of www.ucafunds.com.au

table 11 – total workforce

2012 2011 2010 2009

M % F % M % F % M % F % M % F %

TOTAL STAFF (TS) M 5 63 3 38 6 75 2 25 5 71 2 29 4 57 3 43

NM 6 40 9 60 5 36 9 64 4 33 8 67 4 44 5 56

T 11 48 12 52 11 50 11 50 9 47 10 53 8 50 8 50

TOTAL STAFF 23 22 19 16

TS – FULL TIME M 2 67 1 33 2 67 1 33 2 67 1 33 1 33 2 67

NM 6 55 5 45 5 45 6 55 4 40 6 60 4 57 3 43

T 8 57 6 43 7 50 7 50 6 46 7 54 5 50 5 50

TOTAL STAFF – FULL TIME 14 14 13 10

TS – PART TIME M 3 60 2 40 4 80 1 20 3 75 1 25 3 75 1 25

NM 0 0 4 100 0 0 3 100 0 0 2 100 0 0 2 100

T 3 33 6 67 4 50 4 50 3 50 3 50 3 50 3 50

TOTAL STAFF – PART-TIME 9 8 6 6

COLLECTIVE AGREEMENT (CA) M 2 40 3 60 2 50 2 50 2 50 2 50 1 33 2 67

NM 6 43 8 57 5 36 9 64 4 33 8 67 4 40 6 60

T 8 42 11 58 7 39 11 61 6 38 10 63 5 38 8 62

TOTAL CA 19 18 16 13

CA – FULL TIME M 2 67 1 33 2 67 1 33 2 67 1 33 1 33 2 67

NM 6 50 6 50 5 45 7 64 4 40 6 60 4 57 3 43

T 8 53 7 47 7 50 8 57 6 46 7 54 5 50 5 50

TOTAL CA – FULL TIME 15 15 13 10

CA – PART TIME M 0 0 2 100 0 0 1 100 0 0 1 100 0 0 1 100

NM 0 0 2 40 0 0 2 100 0 0 2 100 0 0 2 100

T 0 0 4 100 0 0 3 100 0 0 3 100 0 0 3 100

TOTAL CA – PART TIME 4 3 3 3

CONSULTANT M 3 100 0 0 4 100 0 0 3 100 0 0 3 100 0 0

NM 0 0 1 100 0 0 0 0 0 0 0 0 0 0 0 0

T 3 75 1 25 4 100 0 0 3 100 0 0 3 100 0 0

TOTAL CONSULTANT 4 4 3 3

m=Management. nm=Non Management. t=Total. ts=Total Staff. ca=Collective Agreement. *All staff and consultants are employed on a permanent and/or fixed term contract. All Consultants are contracted on a part time basis.

We deal in money. It’s our product. It’s vitally important to our business, and to the activities of our investors. But in the end money is merely one measure of human activity. And the success of any enterprise, ours included, depends upon the people who work in it and their interaction with the people that invest with us.

Our current focus is how to best match the right people with the right capacity to deliver on our strategy goals. Our human resource administration requirements are undertaken by the Synod. The key approach in 2012 was to enable managers to do their job, with a plan that supports their needs. Another key focus was recruitment,

ensuring that we get the right person for each job, through rigorous interviewing and reference checking.

Our longer term approach is to develop our characteristics as a values-based organisation. Our stated values include: compassion, justice, integrity, respect care and co-operation, inclusion, achieving through teams, wise stewardship and professional excellence. We will set high expectations around how these values manifest in our day to day activities, and how we use them to do our job and to excel at what we do. But most of all, we believe this will also provide for a workplace where our staff want to be, where they feel productive and valued.

Valuing PeoPle

In 2012 we achieved significant operations improvement, particularly by maximising the capacity of our operations and investment teams and their interdependence.

We have designed a new business process whereby operations provide integral information into our investment team, which then feeds into our marketing operations and provides greater information to our clients. This includes such things as analysis of portfolios, listing of portfolios, statistical analysis on our investment portfolios, and monitoring and presentation tools for attracting new business.

Continued investment in our IT systems is designed to facilitate better compliance and also to enable constructive information flows. Our business reporting has improved with the shift away from manual inputs to systems generated reports. In September 2012 we launched the new website, a major improvement for our clients and other stakeholders in accessing information and interacting with us. It enables all forms to be downloaded and provides for timely and efficient communications.

Business risk was also ameliorated with our disaster recovery time being reduced from 4 hours to 3 hours. This is the time it would take us to fully recover our IT systems offsite.

We generated 29% less carbon dioxide emissions this year, with reduced consumption across electricity, gas, water and travel. Most of this reduction reflects that our 2011 figure was inflated by additional power and water usage drawn down from our accounts by external companies (which were rectified in 2012). We also reduced our air travel by 84%, motor travel by 78% and staff commuting footprint by 29%. Most of this reduction centred around reduced opportunities for conference and training activities, and less of our staff now drive to work than ever before with just one employee driving within a car pool.

Our building owner has announced it plans to reduce CO2 emissions by 20% by 2020. We look forward to working constructively on their initiatives to help lower our own footprint wherever possible.

increasing business efficiency


turnoVerWith five departures during the year our turnover was 22%. In 2011 our turnover was zero. In 2010 the turnover was 4.7% with the retirement of one employee. Whilst we recognise we could not maintain a rate of zero per cent turnover indefinitely, 2012 has seen significant turnover. There was a change in leadership, one young staff member decided to pursue a career in compliance, and to our great sorrow we had a valued colleague pass away. Five appointments made during the year were primarily replacements for those leaving. Four males and one female left and four males and one female were hired.

Fifty-seven per cent of our workforce is 51 or older and the remaining 43% are between 30 – 50 years of age. Our succession planning is underway, with key positions being filled with a view to professional development opportunities, mentoring and career planning.

training and reViewOur commitment to training and professional development has intensified across the year. We recognise that increased compliance to our policies and procedures requires an ongoing commitment to the professionalisation of our organisation and industry in general. Our induction process ensures that all new employees are fully aware of their responsibilities with regards to company policies and policy updates are communicated to all staff. This offers a unique opportunity to continually update our skills. Two of our staff are studying to be CPAs and every request for training in 2012 was approved. We aim to embed this further into our culture through the performance review process.

In 2012 training hours decreased, due mainly to limited conference opportunities which raised training levels in 2011. In 2012 our managers averaged 27 hours of training and non-managers averaged 4 hours. Women averaged 10 hours and males averaged 15 hours.

Performance reviews were completed with the majority of employees with 17 reviews undertaken (74%). The remaining employees all report directly to the interim CEO and it was mutually agreed to postpone the review in order for the incoming CEO to undertake a more detailed development review.

oh&s inJuries and incidents In 2012 there were no workplace injuries. One staff member twisted her ankle, she was on lunch break and some distance from the office. In the previous three years there have been no injuries or incidents. We continue our vigilance and recognise our responsibility to sustain these levels through periodical inspections and regular training sessions offered by the Synod’s OH&S Manager.

Staff accrue 10 sick days annually. During 2012, the average time taken for sick leave was 7 days per employee while in 2011 it was 5.20 days per employee, in 2010 it was 8.63 days and in 2009 it was 2.46 days per employee.

emPloyee satisfactionEach year we survey staff to determine their satisfaction with their workplace. The questions address job satisfaction, opportunities for development, training and decision making. In 2011 and 2012 we identified a decline in overall staff satisfaction from previous years. We did expect the 2012 results to remain lower due to the staff turnover this year, which has destabilised some staff. However many staff feel that with a new leadership team satisfaction levels will increase and change will be a positive way to build morale. We hope in 2013 to have a more positive outcome. The Board is encouraging staff to have confidence in the staff survey as they use it as a tool to monitor performance of management and as a direct mechanism to hear staff feedback.

human rights UCA Funds do not employ children, or forced or compulsory labour and take all reasonable steps to ensure that we do not engage suppliers who employ children, or forced or compulsory labour. We do not operate in any countries where these practices are condoned. In 2012 we did not receive any complaints of child, forced or compulsory labour.

We have policies in place to ensure reasonable working hours and conditions and minimum age for employment. The Ethical Investment Policy also dictates that we do not invest in companies that infringe human rights.

In 2013 we will be reviewing the area of human rights to determine if an audit of our suppliers is necessary to expose any human rights infringements through our supply chain.

table 13 – salary information by gender

2012 2011 2010 2009

Male Female Male Female Male Female Male Female

$ 0 – $50,000 – – – 1 – 1 – 1

$ 50,001 – $100,000 8 6 4 8 4 8 4 5

$100,001 – $150,000 2 1 – 2 – 1 2 1

$150,001 plus 4 2 2 – 2 – – –

table 12 – staff training

2012 2011 2010 2009

Male (hours)

Female (hours)

Male (hours)

Female (hours)

Male (hours)

Female (hours)

Male (hours)

Female (hours)

ExTERNAL TRAINING 149 113 215 128 80 107 5 55

INTERNAL TRAINING 20 17 48 24 17 21 5 4

table 14 – staff surVey results

2012* %

2011 %

2010 %

2009 %

a B c D a B c D a B c D a B c D

JOB SATISFACTION 58 42 – – 68 21 11 – 84 16 – – 80 20 – –

ADEQUATE WORk FACILITIES 79 21 – – 63 26 11 – 84 16 – – 86 13 – –

OPPORTUNITY FOR DEVELOPMENT 65 38 15 – 58 38 5 – 73 26 – – 73 26 – –

TRAINING 61 33 6 – 74 16 11 – 84 16 – – 86 13 – –

BENEFITS 53 42 5 – 58 38 5 – 79 16 – – 66 26 6 –

INVOLVED IN DECISION MAkING 26 58 16 – 42 42 16 – 63 31 5 – 60 26 13 –

A – Very satisfied | B – Somewhat satisfied | C – Somewhat dissatisfied | D – Very dissatisfied | *The 2012 survey was completed by 83% of the staff


G3.1 STANDARD DISCLOSURES / PERFORMANCE INDICATORS

1 strategy and analysis

1.1 Statement from the most senior decision-maker of the organisation (e.g. CEO, chair, equivalent senior position) about the relevance of sustainability to the organisation and its strategy


CEO’s Statement 9

1.2 Description of key impacts, risks and opportunities Chairperson’s Statement 8

CEO’s Statement 9

2 organisational Profile

2.1 Name of the organisation Who we are 10

2.2 Primary brands, products, and/or services Who we are 10

2.3 Operational structure of the organisation, including main divisions, operating companies, subsidiaries, and joint ventures

Who we are We have no operating companies, subsidiaries or joint ventures

10

2.4 Location of organisation’s headquarters Who we are 10

2.5 Number of countries where the organisation operates, and names of countries with either major operations or that are specifically relevant to the sustainability issues covered in the report

Who we are 10

2.6 Nature of ownership and legal form Who we are 10

2.7 Markets served (including geographic breakdown, sectors served, and types of customers/beneficiaries)

Who we are 10

Our Strategy 10

Tables 1 & 2 11

Our Stakeholders 13

2.8 Scale of reporting organisation Under the Spotlight 5

Who we are 10

Table 4 - Financial Performance. 20

For full financial statements visit our website

2.9 Significant changes during the reporting period regarding size, structure, or ownership

There were no significant changes during the reporting period

2.10 Awards received in the reporting period Nil

3 report and Parameters

3.1 Reporting period (e.g. fiscal/calendar year) for information provided About the Report 12

3.2 Date of most recent previous report (if any) About the Report 12

3.3 Reporting cycle (annual, biennial, etc.) About the Report 12

3.4 Contact point for questions regarding the report Feedback 38

3.5 Process for defining report content Determining Materiality 12

Our Stakeholders 13

3.6 Boundary of the report About the Report 12

3.7 Limitations on the scope or boundary of the report Nil

3.8 Basis for reporting on joint ventures, subsidiaries, leased facilities, outsourced operations and other entities that can significantly affect comparability from period to period and/or between organisations

There are no joint ventures, subsidiaries, leased facilities, outsourced operations or other entities that affect comparability

3.9 Data measurement techniques and the bases of calculations, including assumptions and techniques underlying estimations applied to the compilation of the indicators and other information in the report

We applied the GRI Indicator methodology in preparing data. The bases of preparation for all estimates can be found in the Corporate Social Responsibility section of www.ucafunds.com.au

3.10 Explanation of the effect of any restatements of information provided in earlier reports, and the reasons for such (e.g. M&A, change of base years/periods, nature of business, measurement methods)

Restatements 12

3.11 Significant changes from previous reporting periods in the scope, boundary, or measurement applied in the report

There have been no significant changes from the previous reporting period

3.12 GRI Content index table identifying the location of the Standard Disclosures in the report

This table 34

3.13 Policy and current practice with regard to seeking external assurance for the report

About the Report 12

4 governance, commitments and engagement

4.1 Governance structure of the organisation, including committees under the highest governance responsible for specific tasks, such as setting strategy organisational oversight

Governance 14/15

4.2 Indicate whether the Chairman is also an executive officer Governance 15

4.3 For organisations that have a unitary board structure, state the number of members of the highest governance body that are independent and/or non-executive members

Governance 15

4.4 Mechanisms for shareholders and employees to provide recommendations or direction to highest governance body

Governance 15

4.5 Link compensation for members of the highest governance body and organisation’s performance

There is no compensation for Board members based on organisational performance

4.6 Processes in place for the highest governance body to ensure conflicts of interest are avoided

Governance 15

4.7 Process for determining composition, qualifications and expertise of the members of the highest governance body and its committees

Governance 14/15

Reference Page Reference Page



4.8 Internally developed statements of mission or values. Codes of conduct and principles relevant to ESG performance

Introduction 3

Mission/Vision 10

Investing Ethically 16

4.9 Procedures of the highest governance body for overseeing the organisation’s identification and management of environmental, economic and social performance

Governance 15

Industry Affiliations 27

4.10 Process for evaluating the highest governance body’s own performance Governance 14/15

4.11 Explanation of whether and how the precautionary principle is addressed by the organisation

We have not explicitly applied the precautionary principle

4.12 Externally developed economic, environmental and social charters to which the organisation subscribes or endorses

Industry Affiliations 27

4.13 A membership in associations, has governance positions, participates in committees, provides substantive funding for, and views membership as strategic

We have no governance positions or committee engagement within our industry affiliations

4.14 List of stakeholder groups engaged by the organisation Our Stakeholders 13

4.15 Basis for identification and selection of stakeholders with whom to engage

Our Stakeholders Stakeholder Engagement 2012, www.ucafunds.com.au

13

4.16 Approaches to stakeholder engagement Our Stakeholders Stakeholder Engagement 2012, www.ucafunds.com.au

13

4.17 key topics that have been raised through stakeholder engagement and how we’ve responded

Our Stakeholders 13

Client Survey 13

Social Issues 14

Stakeholder Issues 14

economic

DMA EC Disclosure on Management Approach: Economic Chairperson’s Statement 8

Mission Statement 10

360 degree ethical investing 24

Training and Review 30

For performance go to: Table 4 – Financial Performance

20

EC1 Direct economic value generated and distributed, including revenues, operating costs, employee compensation, donations and other community investments, retained earnings, and payments to capital providers and governments

Financial Performance 20

Product and service impact section

DMA PS Disclosure on Management Approach: Product Service Investing Ethically 16

Governance 14

Compliance 16

Policy Foundations 16/17


For performance go to: Compliance Monitoring and Breaches

17

Engagement 18

Proxy Voting 18

FS1 Policies with specific environmental and social components applied to business lines

Policy Foundations 16

FS2 Procedures for assessing and screening environmental and social risks in business lines

Compliance, Mentoring and Breeches Screening

17

18

FS5 Interactions with clients/investees/business partners regarding environmental and social risks and opportunities

Industry Engagement 18

FS10 Percentage and number of companies held in UCA Funds’ portfolio with which we have interacted on environmental or social issues


FS11 Percentage of assets subject to positive and negative environmental or social screening


FS12 Voting policies applied to environmental or social issues for shares over which UCA Funds holds the right to vote shares or advises on voting


environmental

DMA EN Disclosure on Management Approach: Environment Chairperson’s Statement 8

Ethical Investment Policy 17

Governance 14


Increasing business efficiency 28

For performance and specific monitoring procedures go to: Table 10 – Resource Consumption

29

Standard Disclosure 4.11 38

EN4 Indirect energy consumption by primary source Resource Consumption 28

EN5 Energy saved due to conservation and efficiency improvements Resource Consumption 28

EN16 Total direct and indirect greenhouse gas emissions by weight Resource Consumption 28

Business Efficiency 28



labour Practices and decent work

DMA LA Disclosure on Management Approach: Labour Practices and Decent Work Chairperson’s Statement 8


Governance 14

Valuing People 29


For performance go to: OH&S injuries and incidents

30

Table 12 – Staff Training 31

Table 13 – Salary Information by Gender

31

LA1 Total workforce by employment type, employment contract and region Valuing People 29

Total Workforce 29

LA2 Total number and rate of new employee hires and employee turnover by age group, gender and region

Turnover 30

LA3 Benefits provided to full-time employees that are not provided to temporary or part-time employees

All entitlements are the same

LA4 Percentage of employees covered by collective bargaining agreements Eighty-three per cent

LA7 Rates of injury, occupational diseases, lost days and absenteeism and work related fatalities by region and gender

OH&S 30

LA10 Average hours of training per year, per employee, by gender and by employee category


LA12 Percentage of employees receiving regular performance and career development reviews, by gender


LA14 Ratio of basic salary and remuneration of women to men by employee category

Salary by Gender 31

society

DMA SO Disclosure on Management Approach: Society Chairperson’s Statement 8


Governance 14


Vision 10

For performance and specific monitoring go to: Compliance

16

society Performance indicators

SO3 Percentage of employees trained in organisational anti-corruption policies and procedures

Compliance 16

human rights Performance indicators

DMA HR Disclosure on Management Approach: Human Rights Chairperson’s Statement 8


Governance 14


For performance go to: Discrimination

16

Compliance 16

Compliance, Monitoring and Breaches

17

Human Rights (including risk assessment approach)

30

HR4 Total number of incidents of discrimination and actions taken Discrimination 16

Human Rights 30

Product responsibility Performance indicators

DMA PR Disclosure on Management Approach: Product Responsibility Funds Manager with a Conscience 3


Governance 14


For performance and specific monitoring go to: Client Survey

13

Our stakeholders 13

PR4 Total number of incidents of non-compliance with regulations and voluntary codes concerning product and service information and labelling, by type of outcomes

Nil

PR5 Practices related to customer satisfaction, including results of survey measuring customer satisfaction

Client Survey 13

PR8 Total number of substantiated complaints regarding breaches of customer privacy and losses of customer data

Client Survey 13



41UCA Cash Management Fund Limited

UCA Cash Management Fund Limited ABN 41 075 948 444

Annual report for the year ended 31 December 2012

uca cash management fund limited A company limited by guarantee and domiciled in the State of Victoria in Australia.

The company is incorporated in Australia.

The registered office is: 130 Little Collins Street Melbourne, Victoria 3000 Australia

Auditor: Deloitte Touche Tohmatsu 550 Bourke Street Melbourne, Victoria 3000 Australia

42 2012 ANNUAL REPORT: THE YEAR IN REVIEW 43UCA Cash Management Fund Limited

directors’ reportThe Directors present their report on the financial statements of the UCA Cash Management Fund Limited for the year ended 31 December 2012.

general informationUCA Cash Management Fund is the investment vehicle that operates within the legal entity UCA Cash Management Fund Limited (the “Company”). Investment in the Company is available to Uniting Church congregations, organisations and agencies and other not–for–profit organisations with a religious, educational or charitable purpose that are registered as Tax Concession Charities. The Company seeks to operate at a low cost and to provide both competitive returns to investors and an annual grant to The Uniting Church in Australia, Synod of Victoria and Tasmania. All investments are made within the ethical investment guidelines of the Uniting Church in Australia, Synod of Victoria and Tasmania.

The Company is exempt from the fundraising, managed investment and licensing provisions of the Corporations Act under Class Order 02/184. The Company has been accordingly registered by the Australian Securities and Investments Commission. The Company is also exempt from the Banking Act 1959 by virtue of APRA Banking Exemption No 1 of 2006.

Principal activitiesThe Company’s principal and continuing activities during the year consisted of:

a) Providing an investment medium for congregations, programs, presbyteries and agencies of The Uniting Church in Australia; and

b) Providing an investment medium for other non–profit organisations with a religious, charitable or educational purpose.

There were no significant changes in the nature of the Company’s activities during the year.

company constitution/investment strategyThe Company is structured to provide a higher interest yield than traditional cash management trusts.

The Company may hold short term money market securities, discount securities, securities that are issued and guaranteed by the Commonwealth or any state or territory government, corporate debt and cash at bank. The Company may also hold longer dated securities including debentures, corporate bonds, preference shares, convertible preference shares, commercial mortgages and loans to church bodies on a secured or guaranteed basis.

Investor funds are intended to be accepted into the Company for a reasonable period of time. The Company is not designed for use as an ‘overnight’ money market operation.

resultsNet operating profit of the Company for the year ended 31 December 2012 was $27,400,000 (2011: $25,126,000) prior to distributing $25,529,000 (2011: $26,546,000) to investors.

review of operationsFunds under management increased by 11.2% during the year to $492,361,000 at 31 December 2012 (2011: $442,670,000). Interest was distributed to investors at the rate of 5.75% per annum at 30 June 2012 and 5.00% per annum at 31 December 2012.

The total management fee charged during the reporting period was $3,539,000 (2011: $3,222,000) which is calculated at 0.75% per annum (2011: 0.75%) of the net funds under management at the end of each month. The management fee comprised of the following; operating costs of the Company were $2,651,000 (2011: $2,600,000) and a grant of $888,000 (2011: $622,000) was paid to The Uniting Church in Australia, Synod of Victoria and Tasmania during the year ended 31 December 2012. The grant is a contribution to the mission of the Church and forms part of the management fee.

significant changes in the state of affairsIn the Directors’ opinion, there were no significant changes in the state of affairs of the Company that occurred during the year not otherwise disclosed in this report or the financial statements.

matters subsequent to the end of the yearOther than the loan to UCA Growth Fund Limited, there we no other matter or circumstance has arisen since 31 December 2012 that has significantly affected, or may significantly affect the operations of the Company, the results of those operations or the state of affairs of the Company in future years.

likely developments and expected resultsFurther information on likely developments in the operations of the Company and the expected results of operations of the Company has not been included in this report because the directors believe it would be likely to result in unreasonable prejudice to the Company.

environmental regulationThe Company is not subject to any particular or significant environmental regulation under Commonwealth, State or Territory law.

directorsThe following directors held office at the date of this report and have held office throughout the financial year (except where indicated) and since the end of the financial year up to the date of this report.

r J carter Non–Executive Director – Chairperson – Board of Directors and Remuneration & Nomination Committee

J etherington Non–Executive Director – Chairperson – Audit & Compliance Committee from 4 December 2012

r e male Non–Executive Director – Chairperson – Audit & Compliance Committee to 25 September 2012, Retired 12 December 2012

d f hawkey Non–Executive Director

k a howard Non–Executive Director – Appointed 1 July 2012

r g moore Non–Executive Director

J c simkiss Non–Executive Director – Chairperson – Investment Committee

s J taylor Non–Executive Director

g e wilson Non–Executive Director – Appointed 1 June 2012

g V rough Executive Director – Resigned 10 August 2012

s c norman Executive Director – Appointed 16 October 2012 & Resigned 6 February 2013

m walsh Executive Director – Appointed 4 February 2013


information on directorsmr richard John carter CitWA, B Com, FTSE, FAusIMM, FAIM, FAICD

Non–executive Director and Chairperson. He is the former Chair of Prahran Mission–UnitingCare, a former Director of BHP Gold Mines Ltd, North Ltd, Orbital Engine Group, Marion Energy Ltd and ERA Ltd, Chair of Consolidated Minerals Ltd, Macmahon Holdings Ltd, Ticor Ltd and a former Chief Executive Officer of BHP Minerals. He is an active member of the Uniting Church and is Chair of the Church Council at Ewing Memorial UC, East Malvern.

mr John etherington B Ec, FCA, FAICD

Non–executive Director. He is a Partner of Non Executive Management, a Director of Pental Limited, Director and Treasurer of the National Heart Foundation of Australia (Victorian Division), a member of the Audit and Compliance Committee of the Uniting Church in Australia (Synod of Victoria and Tasmania), a member of the Audit and Risk Committee of the University of Melbourne and a co–trustee of the Ian Rollo Currie Foundation. He is a former Assurance and Advisory Partner of Deloitte.

mr daryl f hawkey FFin

Non–executive Director. He is Chair of UnitingCare Prahran Mission and a member of the Compliance Committee of Antares Capital Partners Ltd. He is a former Executive Director of Rothschild Australia Asset Management Limited, a former principal of Cameron Ralph Pty Ltd and a former Director of Hancock Natural Resources Group Australasia Pty Limited, Intech Fiduciaries Limited, the Financial Services Council (FSC), the Financial Industry Complaints Service Limited and State Trustees Limited. He is also a former member of the Compliance Committees of Principal Global Investors (Australia) Limited and Spark Infrastructure Group and Chair of the BlackRock Investment Management (Australia) Limited, Compliance Committee. He is an active member of the Uniting Church, a member of the Forest Hill Church Council and the Finance & Property Committee, and a member of the VicTas Synod.

ms kerrie howard BA, LLB, MBA, MLIV, MACLA, MAICD (Appointed 1 July 2012)

Non–executive Director. She currently is General Counsel and Secretary of Victorian Funds Management Corporation. She was a former Director of Yarra Bend Park Trust, BlackRock Investment Management (Australia) Ltd, Foundation Boroondara, Housing Guarantee Fund Limited, National Foundation for Australian Women, Investment Funds Association and Merrill Lynch Staff Super Fund. She was also a Regulatory Affairs Board Committee Member of Investment and Financial Services Association (now Financial Services Council).

mr roger e male LL.B, Dip Ac (Retired 12 December 2012)

Non–executive Director. He is a former managing partner of Coopers & Lybrand. He is a non–executive Director of Goldman Sachs & Partners Australia Pty Ltd and The Walter and Eliza Hall Institute of Medical Research, a former member of the Compliance Committee of Almond Orchards Australia Limited, and a member of the Audit Committee of Nillumbik Shire Council.

mr richard g moore BA Hons, FCA

Non–executive Director. He is Chair of the City of Melbourne Audit Committee, Consulting Director at Grant Thornton, the former Group General Manager, Audit of Australia and New Zealand Banking Group Limited and a former non–executive Director of ANZ Pension (Uk) Limited. He is a former partner of PricewaterhouseCoopers, where he specialised in Corporate Governance, Risk Management and Internal Audit advisory services.

ms suzanne c norman BBus, BA, CPA, FAICD (From 16 October 2012 to 6 February 2013)

Executive Director. She was responsible for the management of the day to day operations of UCA Funds Management. She is a director of Wesley Mission Victoria, a member of the MCD University of Divinity Council, and a Trustee of Environment Victoria Trust.

mr graeme V rough B. Com, FFin, FCPA (Resigned 10 August 2012)

Executive Director. He is a former Natural Person Participant of the Australian Stock Exchange (ASx) and a former Managing Director of a Corporate Participant of the ASx (TIR Securities Australia Limited). He has in excess of 30 years experience in funds management and stockbroking with Colonial Mutual Life, Australian International Finance Corporation, Jardine Fleming (Australia) Pty Limited, Citicorp Scrimgeour Vickers Limited, and the Credit Lyonnais group of companies. He is a Member of the Advisory Council of Responsible Investment Academy.

mr John c simkiss BCom, CA, FCPA, SA Fin

Non–executive Director . He is a Director of Prime Value Asset Management Ltd, a former Investment Manager of Telstra Super Pty Ltd, a former Director of the Potter Warburg Group and former Group Treasurer of CRA. He is a former External Consultant member of the Investment Committee of EquipSuper.

mr stephen J taylor B Ec, CFA

Non–executive Director. He is also a Director of the Goodman Australia Industrial Fund, and was formerly CEO of Victorian Funds Management Corporation and JP Morgan Investment Management Australia. He is a past president of the Melbourne Society of Financial Analysts and has experience with a number of investment institutions in Australia and overseas.

mr michael walsh M Com (Appointed 4 February 2013)

Executive Director. He is the former Risk Manager, Head of Responsible Investment Research and Interim Chief Executive Officer of Hunter Hall International Limited. He has over 35 years combined business and financial services experience and possesses more than 13 years in the responsible investment sector as a consultant, publisher, director and senior executive. He is a Non Executive Director of Smallco Investment Manager Limited and Executive Director of Lifecraft Pty Ltd.

ms gayle wilson MBus Mktg, Grad Dip Mktg, Dip T (Appointed 1 June 2012)

Non–executive Director. She is a Partner of Non Executive Management. She was a former Chief Executive Officer of Berndale Securities Limited (a subsidiary of Merrill Lynch Australia), former Director of Merrill Lynch Australia and Citigroup Australia. She is a member of the Finance and Investment Committee for the Brotherhood of St Laurence.

directors’ shareholdingsNo director held shares or invested in the Company during the years ended 31 December 2012 (2011: Nil).


meetings of directors

meeting OF DirectOrS

auDit & cOmpliance cOmmittee

inveStment cOmmittee

remuneratiOn & nOminatiOnS

cOmmittee

a B a B a B a B

R J Carter 8 7 * * 4 3 8 8

J Etherington 8 8 5 5 * * * *

D F Hawkey 8 7 5 4 * * 8 6

k A Howard 5 5 2 2 * * * *

R E Male 8 8 5 5 * * 8 8

R G Moore 8 8 5 2 * * * *

S C Norman 2 2 * * * * 2 1

G V Rough 4 3 * * * * 4 4

J C Simkiss 8 8 * * 4 4 * *

S J Taylor 8 7 * * 4 4 3 2

M Walsh * * * * * * * *

G E Wilson 6 5 * * 2 2 * *

A = Number of meetings held during the time the director held office or was a member of the committee during the year

B = Number of meetings attended

* = Not a member of the relevant committee

information on company secretariesmr John w k taylor FCPA, MAICD, AACI, Grad Dip Compliance

Joint Company Secretary. Mr Taylor also fills the role of Risk & Compliance Manager.

ms leeanne lukaitis B Bus, ASA

Joint Company Secretary. Ms Lukaitis also fills the role of Financial Accountant.

insurance of officers and auditorsDuring the year The Uniting Church in Australia paid a premium of $122,000 (2011: $112,000) to insure all officers of the Church (in the Synod of Victoria and Tasmania), of which the officers of the Company and related bodies corporate form a part. An amount of $2,050 (2011: $1,850) was charged to the Company, representing the Company’s allocation of the premium.

The officers of the Company covered by the insurance policy include the directors: R J Carter, J Etherington, D F Hawkey, k A Howard, R E Male, R G Moore, S C Norman, G V Rough, J C Simkiss, S J Taylor, M Walsh and G E Wilson. The Company has not otherwise, during or since the financial year, indemnified or agreed to indemnify an officer or auditor of the Company or of any related body corporate against liability incurred as an officer or auditor.

The liabilities insured include costs and expenses that may be incurred in defending civil or criminal proceedings that may be brought against the officers in their capacity as officers of the Company or a related body corporate.

rounding of amounts The Company is of a kind referred to in Class Order 98/100 issued by the Australian Securities and Investments Commission, relating to the rounding off of amounts in the directors’ reports and financial statements. Amounts have been rounded off in accordance with that Class Order to the nearest thousand dollars, or in certain cases, to the nearest dollar.

auditors’ independence declarationAuditors’ Independence declaration as required by section 307C of the Corporations Act 2001 is set out on page 48.

Signed in Melbourne on 23 April 2013 in accordance with a resolution of directors’.

R J Carter Director

M Walsh Director


Liability limited by a scheme approved under Professional Standards Legislation.

Member of Deloitte Touche Tohmatsu Limited

Deloitte Touche Tohmatsu ABN 74 490 121 060 550 Bourke Street Melbourne VIC 3000 GPO Box 78 Melbourne VIC 3001 Australia DX: 111 Tel: +61 (0) 3 9671 7000 Fax: +61 (0) 9691 8021 www.deloitte.com.au

Independent Auditor’s Report to the Investors of UCA Cash Management Fund Limited

We have audited the accompanying financial report of UCA Cash Management Fund Limited (the “Company”), which comprises the statement of financial position as at 31 December 2012, the statement of comprehensive income, the statement of cash flows and the statement of changes in equity for the year ended on that date, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration as set out on pages 12 to 31.

Directors’ Responsibility for the Financial Report The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In Note 2, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that the financial statements comply with International Financial Reporting Standards.

Auditor’s Responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control, relevant to the Company’s preparation of the financial report that gives a true and fair view, in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Auditor’s Independence Declaration

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of UCA Cash Management Fund Limited, would be in the same terms if given to the directors as at the time of this auditor’s report.

Opinion In our opinion:

(a) the financial report of UCA Cash Management Fund Limited is in accordance with the Corporations Act 2001, including:

(i) giving a true and fair view of the Company’s financial position as at 31 December 2012 and of its performance for the year ended on that date; and

(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001; and

(b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 2.

DELOITTE TOUCHE TOHMATSU

Neil Brown Partner Chartered Accountants Melbourne, 23 April 2013





The Board of Directors UCA Cash Management Fund Limited 130 Little Collins Street MELBOURNE VIC 3000

23 April 2013

Dear Board Members

UCA Cash Management Fund Limited

In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration of independence to the directors of UCA Cash Management Fund Limited.

As lead audit partner for the audit of the financial statements of UCA Cash Management Fund Limited for the financial year ended 31 December 2012, I declare that to the best of my knowledge and belief, there have been no contraventions of:

(i) the auditor independence requirements of the Corporations Act 2001 in relation to the audit and

(ii) any applicable code of professional conduct in relation to the audit .

Yours sincerely


Neil Brown Partner Chartered Accountants

directors’ declarationIn the Directors’ opinion:

a) the financial statements and notes of the Company set out on pages 52 to 68:

i) comply with Australian Accounting Standards, the Corporations Act 2001, and other mandatory professional reporting requirements;

ii) present fairly the Company’s financial position as at 31 December 2012 and its performance, as represented by the results of its operations, changes in equity and its cash flows, for the financial year ended on that date; and

iii) comply with International Financial Reporting Standards.

b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the directors.

R J Carter Director

M Walsh Director

Melbourne 23 April 2013


Statement of Comprehensive Income

nOteS2012

$’0002011

$’000

INVESTMENT INCOME

INTEREST INCOME 4 29,618 29,507

NET (LOSSES)/GAINS ON FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS 1,374 (1,142)

TOTAL INVESTMENT INCOME 30,992 28,365

ExPENSES

MANAGEMENT FEE – RELATED PARTY 7a 3,539 3,222

OTHER OPERATING ExPENSES 53 17

TOTAL OPERATING ExPENSES 3,592 3,239

NET OPERATING PROFIT BEFORE FINANCE COSTS 27,400 25,126

FINANCE COSTS

INTEREST PAID TO INVESTORS 5 25,529 26,546

NET (LOSS)/PROFIT FOR THE YEAR 1,871 (1,420)

OTHER COMPREHENSIVE INCOME FOR THE YEAR

OTHER COMPREHENSIVE INCOME FOR THE YEAR – –

TOTAL COMPREHENSIVE INCOME FOR THE YEAR 1,871 (1,420)

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

Statement of Financial Position

nOteS2012

$’0002011

$’000

ASSETS

CASH AND CASH EQUIVALENTS 10a 216,168 157,836

ACCRUED INCOME 4,258 4,424

FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

MORTGAGE BACkED SECURITIES 16,270 25,094

FLOATING RATE NOTES 13,959 23,573

HYBRID SECURITIES 132,209 114,969

RECEIVABLES

SECURED MORTGAGES 81,600 97,051

LOANS TO CHURCH BODIES 20,160 19,723

RELATED PARTY LOAN 7d 7,737 –

TOTAL ASSETS 492,361 442,670

LIABILITIES

AMOUNTS PAYABLE TO INVESTORS:

ExTERNAL INVESTORS 355,870 322,421

RELATED PARTIES 7b 127,170 112,799

TOTAL LIABILITIES 483,040 435,220

NET ASSETS 9,321 7,450

EQUITY

CONTRIBUTED EQUITY – –

ACCUMULATED RESERVES 6 9,321 7,450

TOTAL EQUITY 9,321 7,450

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


Cash Flow Statement

nOteS2012

$’0002011

$’000

CASH FLOWS FROM OPERATING ACTIVITIES

INTEREST INCOME 29,613 28,133

PROCEEDS FROM THE SALE OF FINANCIAL ASSETS 151,879 504,111

PAYMENTS FOR THE PURCHASE OF FINANCIAL ASSETS (141,860) (414,042)

MANAGEMENT FEE PAID (3,539) (3,222)

OTHER OPERATING ExPENSES PAID (53) (17)

NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES 10b 36,040 114,963

CASH FLOWS FROM FINANCING ACTIVITIES

INTEREST PAID TO INVESTORS (11,433) (467)

INVESTOR DEPOSITS RECEIVED 440,116 466,916

INVESTOR WITHDRAWALS PAID (406,391) (472,468)

NET CASH (OUTFLOW)/INFLOW FROM FINANCING ACTIVITIES 22,291 (6,019)

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 58,332 108,944

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 157,836 48,892

CASH AND CASH EQUIVALENTS AT END OF YEAR 10a 216,168 157,836

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

Statement of changes in equity

Share capital

$’000

accumulateD reServe

$’000tOtal $’000

BALANCE AT 1 JANUARY 2011 _ 8,870 8,870

NET LOSS FOR THE YEAR _ (1,420) (1,420)

OTHER COMPREHENSIVE INCOME FOR THE YEAR _ – –

TOTAL COMPREHENSIVE INCOME FOR THE YEAR _ (1,420) (1,420)

BALANCE AT 1 JANUARY 2012 _ 7,450 7,450

NET PROFIT FOR THE YEAR 1,871 1,871

OTHER COMPREHENSIVE INCOME FOR THE YEAR _ – –

TOTAL COMPREHENSIVE INCOME FOR THE YEAR _ 1,871 1,871

BALANCE AT 31 DECEMBER 2012 _ 9,321 9,321

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


note 1 – general informationa) This general purpose financial report covers the legal

entity of UCA Cash Management Fund Limited (the “Company”). The registered office is 130 Little Collins Street, Melbourne, Victoria 3000. The financial statements were authorised for issue by the Directors on 23 April 2013. The Directors have the power to amend and reissue the financial report.

b) Investors Related investors include UCA Growth Fund Limited, Uniting Growth Fund, the Development Fund and the Funeral Fund, which are managed by UCA Funds Management. External investors represent Uniting Church bodies and other not–for–profit organisations. Investor funds are at call and are therefore classified as financial liabilities. Investor funds can be redeemed by investors at the value of their capital account which is guaranteed by the Uniting Church in Australia Property Trust (Victoria).

c) Loans All loans from the UCA Cash Management Fund Limited are guaranteed by The Uniting Church in Australia Property Trust (Victoria).

Loans are non–derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the Fund provides money directly to a debtor with no intention of selling the receivable. These loans are interest bearing.

Loans are valued at the amount provided less any principal repayments adjusted for the amortised cost using the effective interest rate and impairment losses.

note 2 – summary of significant accounting PoliciesThe principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all periods presented, unless otherwise stated.

a) Basis of Preparation This general purpose financial report has been prepared in accordance with Australian Accounting Standards and Interpretations and other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001.

Compliance with International Financial Reporting Standards (IFRS)

Australian Accounting Standards include Australian equivalents to International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the financial report of the Company, comprising the financial statements and notes hereto complies with International Financial Reporting Standards (IFRS).

The financial statements have been prepared under the historical cost convention, as modified by the revaluation of financial assets held at fair value with changes in fair value recognised through the statement of comprehensive income.

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

c) Investments (other than receivables)ClassificationCertain financial instruments are designated at fair value through profit or loss. These include financial assets that are not held for trading purposes and which may be sold. Financial assets designated at fair value through profit or loss at inception are those that are managed and their performance evaluated on a fair value basis in accordance with the Company’s documented investment strategy.

MeasurementFinancial assets held at fair value through profit or loss are measured initially at fair value excluding any transaction costs that are directly attributable to the

acquisition or issue of the financial asset. Transaction costs on financial assets at fair value through profit or loss are expensed immediately. Subsequent to initial recognition, all instruments held at fair value through profit or loss are measured at fair value with changes in their fair value recognised in the statement of comprehensive income. The following represents the basis of valuation for financial reporting purposes:

The fair value of financial assets traded in active markets is based on their quoted market prices at the balance sheet date without any deduction for future selling costs. Financial assets are priced at bid prices. In the absence of quoted values financial assets are valued by other financial institutions using appropriate redemption yields.

Recognition/derecognitionThe Company recognises financial assets on the date it becomes party to the contractual agreement (trade date) and recognises changes in fair value of the financial assets from this date. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or the Company has transferred substantially all risks and rewards of ownership.

d) Receivables Receivables comprise loans and secured mortgages advanced to congregations and other Church organisations. They are non–derivative financial assets with fixed or determinable payments that are not quoted in an active market. Receivables are measured at amortised cost using the effective interest rate method.

Interest income is accrued at the balance sheet date from the date of last payment, using the effective interest method.

e) Impairment of financial assets Financial assets, other than those at fair value through profit and loss, are assessed for indicators of impairment at the end of each reporting period. Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected.

f ) Cash and cash equivalents Cash and cash equivalents include cash on hand, deposits held at call at banks and other short–term highly liquid investments.

Payments and receipts relating to the purchase of investment securities are classified as cash flows from operating activities, as movements in the fair value in these securities represent the Company’s main income generating activity.

g) Foreign currency translation Functionalandpresentationcurrency Items included in the Company’s financial statements are measured using the currency of the primary economic environment in which it operates its functional currency. This is the Australian dollar, which reflects the currency of the economy in which the Company operates. The Australian dollar is also the Company’s presentation currency.

TransactionsandbalancesForeign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translations at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the statement of comprehensive income.

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

h) Interest paid to investors The Company pays interest to investors at the rate determined by the Board. Interest is recognised as an expense in the statement of comprehensive income. Interest is payable to investors on 30 June and 31 December.

i) Income Tax UCA Cash Management Fund Limited is exempt from Income Tax under Section 50–5 of the Income Tax Assessment Act 1997.


j) Goods and Services Tax (GST) Where applicable, GST incurred by the Company, that is not recoverable from the Australian Taxation Office, has been recognised as part of the expense to which it applies. Receivables and payables are stated with any applicable GST in their value.

The amount of any GST recoverable from, or payable to, the Australian Taxation Office is included as a receivable or payable in the balance sheet. Cash flows relating to GST are included in the cash flow statement on a gross basis.

k) Use of estimates The Company makes estimates and assumptions that affect the reported amounts of assets and liabilities within the next financial year. Estimates are continually evaluated and based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

l) New accounting standards and interpretations The Company has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to its operation and that are effective for the current reporting period.

New Accounting Standards that have been issued but are not yet effective have not been adopted during the reporting period.

A number of Australian Accounting Standards and Interpretations are in issue but are not effective for the current year end. The reported results and position of the Company will not change on adoption of these pronouncements as they do not result in any changes to the Company’s existing polices. The Company does not intend to adopt any of these pronouncements before their effective dates. They include;

AASB9FinancialInstruments(December2010),AASB2010–7AmendmentstoAustralianAccountingStandardsarisingfromAASB9 AASB 9 is applicable for annual reporting periods beginning on or after 1 January 2013. A revised version of AASB 9 incorporating revised requirements for the classification and measurement of financial liabilities, and carrying over the existing requirements derecognition from AASB 139. This has not affected any of the amounts recognised in the financial statements nor has there been any impact on the presentation in the financial statements.

AASB13FairValueMeasurementandrelatedAASB2011–8AmendmentstoAustralianAccountingStandardsarisingfromAASB13 AASB 13 is applicable for annual reporting periods beginning on or after 1 January 2013. AASB 13 does not change the requirements regarding which items should be measured or disclosed at fair value. This has not affected any of the amounts recognised in the financial statements nor has there been any impact on the presentation in the financial statements.

AASB1053ApplicationofTiersofAustralianAccountingStandardsandAASB2010–2AmendmentstoAustralianAccountingStandardsarisingfromReducedDisclosureRequirements AASB 1053 is applicable for annual reporting periods beginning on or after 1 January 2013. AASB 1053 establishes a differential financial reporting framework consisting of two tiers of reporting requirements for general purpose financial statements. This has not affected any of the amounts recognised in the financial statements nor has there been any impact on the presentation in the financial statements.

m) Critical accounting judgments and key sources of estimation uncertainty There have not been any critical accounting judgments or estimations made in preparing the financial statements for the year ended 31 December 2012.

note 3 – company commencementThe Company commenced operating in July 1985 to provide a low cost financial product to tax concession charities and not–for–profit organisations. On 11 October 1996 UCA Cash Management Fund Limited was created as the legal entity of the Company.

note 4 – interest income

2012 $’000

2011 $’000

INTEREST INCOME IS IN RESPECT OF THE FOLLOWING FINANCIAL ASSETS

CASH AND CASH EQUIVALENTS 9,912 8,929

MORTGAGE BACkED AND FLOATING RATE NOTES 4,533 5,455

HYBRIDS 6,690 6,055

SECURED MORTGAGES & LOANS 8,483 9,068

29,618 29,507

note 5 – interest Paid

2012 $’000

2011 $’000

INTEREST PAID FOR THE SIx MONTHS ENDED 30 JUNE 13,181 12,792

INTEREST PAID FOR THE SIx MONTHS ENDED 31 DECEMBER 12,348 13,754

TOTAL FOR THE YEAR ENDED 31 DECEMBER 25,529 26,546

note 6 – accumulated reserve reconciliation

2012 $’000

2011 $’000

THE ACCUMULATED RESERVE COMPRISES THE FOLLOWING:

ACCUMULATED NON–DISTRIBUTED INCOME 14,342 12,288

ACCUMULATED LOSS DUE TO CUMULATIVE NET UNREALISED FAIR VALUE CHANGES (5,021) (4,838)

ACCUMULATED RESERVE AS AT 31 DECEMBER 9,321 7,450

This amount represents interest income and unrealised changes in fair value of financial assets not yet allocated to investors. The interest is held in cash and is represented by a deposit within UCA Cash Management Fund. The amount held in cash meets the objective of holding a minimum of 2% of the Company’s assets, before adjustments, in unallocated assets to investors, which could be used to compensate for any fall in market value of securities or any loss arising from impaired loans. It is the intention of the Directors to hold the financial assets giving rise to the unrealised losses arising from fair value to maturity. In this event the unrealised losses will reverse and not crystallise.

note 7 – related Partiesa) Management fee

The management fee comprises a share of the cost of operating UCA Funds Management and a contribution to the Uniting Church in Australia, Synod of Victoria and Tasmania. The management fee is not to exceed 1% per annum of the net value of the funds under management. UCA Funds Management operating cost component of the management fee is based on the budgeted cost of operations. The management fee expense is recorded on an accruals basis.

2012 $’000

2011 $’000

UCA FUNDS MANAGEMENT OPERATING COSTS 2,651 2,600

CONTRIBUTION TO UCA SYNOD OF VICTORIA AND TASMANIA 888 622

3,539 3,222


b) Investments in UCA Cash Management Fund Limited The UCA Growth Fund Limited, Uniting Growth Fund, the Development Fund and the Funeral Fund invest their cash holdings in the UCA Cash Management Fund Limited. The sole member of UCA Cash Management Fund Limited is The Uniting Church in Australia Property Trust (Victoria).

FUNDS INVESTED2012

$’0002011

$’000

UCA GROWTH FUND LIMITED 1,261 9,024

UNITING GROWTH FUND 5,767 6,184

DEVELOPMENT FUND 116,008 93,865

FUNERAL FUND 4,134 3,726

127,170 112,799

c) Interest paid

2012 $’000

2011 $’000

INTEREST PAID TO RELATED ENTITIES

UCA GROWTH FUND LIMITED 852 852

UNITING GROWTH FUND 505 432

DEVELOPMENT FUND 5,867 5,699

FUNERAL FUND 209 216

TOTAL 7,433 7,199

d) Loan to UCA Growth Fund Limited UCA Cash Management Fund Limited provided a loan for $5,736,918 to The Uniting Church in Australia Property Trust (Victoria). In addition UCA Cash Management Fund provided a loan for $2,000,000 to UCA Growth Fund Limited on 31 December 2012, which was repaid in full on 10th January 2013.

e) key Management Personnel Compensation The Company has no employees. All key management personnel are employed by the Uniting Church in Australia, Synod of Victoria and Tasmania.

a) Directors The names of the persons who were the directors of UCA Funds Management Limited at any time during the year and up to the date of this report were:

r J carter Non–Executive Director – Chairperson – Board of Directors and Remuneration & Nomination Committee

J etherington Non–Executive Director – Chairperson – Audit & Compliance Committee from 4 December 2012

r e male Non–Executive Director – Chairperson – Audit & Compliance Committee to 25 September 2012, Retired 12 December 2012

d f hawkey Non–Executive Director

k a howard Non–Executive Director – Appointed 1 July 2012

r g moore Non–Executive Director

J c simkiss Non–Executive Director – Chairperson – Investment Committee

s J taylor Non–Executive Director

g e wilson Non–Executive Director – Appointed 1 June 2012

g V rough Executive Director – Resigned 10 August 2012

s c norman Executive Director – Appointed 16 October 2012 & Resigned 6 February 2013

m walsh Executive Director – Appointed 4 February 2013

Since 1 January 2012, no director of the Company has received or has become entitled to receive, a benefit (other than a remuneration benefit included in this note) because of a contract that the director, a firm of which the director is a member, or an entity in which the director has a substantial interest, has made (during the year ended 31 December 2012 or any other time) with the Company.

Directors’ remuneration is paid by The Uniting Church in Australia, Synod of Victoria and Tasmania for the management of UCA Funds Management, which in turn provides management services to UCA Cash Management Fund Limited, UCA Growth Fund Limited, UCA Funds Management Limited, Uniting Growth Fund, Development Fund and Funeral Fund.

The remuneration of the executive director and non–executive directors of UCA Funds Management Limited is set out in the following table:

2012 $

2011 $

INCOME PAID OR PAYABLE TO DIRECTORS OF THE COMPANY BY THE COMPANY AND RELATED PARTIES

SHORT–TERM EMPLOYEE BENEFITS 325,640 324,973

OTHER LONG–TERM BENEFITS 770 8,365

TOTAL 326,410 333,338

Short term employee benefits include salary, superannuation, the value of a motor vehicle inclusive of fringe benefits tax (FBT), accrued annual leave and sick leave entitlements.

Other long–term benefits include accrued long service leave entitlements.

There are no post–employment benefits, termination benefits or share–based payments applicable.

b) Other key management personnel Except for UCA Cash Management Fund Limited, there were no other persons with responsibility for planning, directing and controlling the activities of the Fund,

directly or indirectly during the financial year. During the reporting period, no Director held an account in the Fund (2011: nil).

note 8 – financial risk managementThe Company’s activities expose it to a variety of financial risks: market risk (including interest rate risk and price risk), credit risk, and liquidity risk. The Company’s risk management strategies seek to minimise potential adverse effects of market movements on the Company’s financial performance.

Financial risk management is the responsibility of the Chief Investment Manager; this responsibility is discharged having regard to policies approved by the Board of Directors. Compliance with Board policies is monitored by the Board’s Investment Committee and reported to the Board of Directors quarterly.

The objectives of the Company are to provide an income stream to investors, to protect their capital and to provide competitive returns. The Uniting Church in Australia Property Trust (Victoria) guarantees the capital invested in the Company.

a) Market risk Market risk is the risk that the value of the Company’s investments will fluctuate as a result of changes in market values. The Company manages this risk by:

• Diversification of investments within specified limits for individual asset classes. Hence the Company invests in a mix of fixed and floating interest rate securities. The strategic asset allocation for both the reporting period and the prior period is as follows:

tactical range

%

Strategic allOcatiOn

%

2012 actual allOcatiOn

%

2011 actual allOcatiOn

%

CASH AND LIQUID SECURITIES (INCLUDING AT LEAST 3% CASH) 20-100 25 44.3 36.4

MONEY MARkET SECURITIES 0-80 15 0.0 0.1

FIxED INTEREST SECURITIES 0-60 25 33.3 36.8

FIRST MORTGAGES 0-35 25 16.7 22.2

LOANS TO CHURCH BODIES 0-15 10 5.7 4.4


• Unallocated investor interest. The Company’s objective is to hold 2% in cash of the value of the Company in unallocated investor interest, which could be used to compensate for any fall in market value of securities or any loss arising from impaired loans.

The capital invested in the Company is guaranteed by The Uniting Church in Australia, Property Trust (Victoria).

The universe of securities available for investment is restricted by the ethical investment policy of the Uniting Church in Australia, Synod of Victoria and Tasmania. UCA Funds Management invests within the ethical guidelines of The Uniting Church in Australia Synod of Victoria and Tasmania. This may have an impact on market risk.

The Church avoids investments in companies whose products, services or practices cause injustice and suffering, infringe human rights or cause unacceptable damage to the natural environment.

The Chief Investment Manager monitors the Company’s investments with the aid of a specialised software package as well as other resources which can facilitate the identification of investments that do not meet the investment guidelines. A report is presented to the Board of Directors regularly which monitors the compliance of investments with the Uniting Church’s ethical investment guidelines. The Board has also established policies and procedures for voting on significant matters at annual general meetings of companies in which the Company invest. The Voting Register is available on our website.

The Company is not exposed to foreign exchange risk.

i) InterestrateriskThe Company’s interest–bearing assets expose it to risks associated with the effects of fluctuations in the prevailing levels of market interest rates on its financial position and cash flows. The Company’s assets are a mixture of fixed and floating rate interest bearing investments; its liabilities are all at a fixed interest rate. The risk of fluctuations in interest rates is limited to the income payable to investors. The possible mismatch in interest rates (between earning at a floating interest rate and paying a fixed interest rate) is monitored by calculating a weighted average running yield, which is assessed on a monthly basis. To mitigate the possible mismatch, the Company has the ability to change the interest rate paid to investors at any time during the reporting period. The table in note 8 (e) summarises the impact of an increase / decrease in interest rates on the Company’s net assets attributable to investors.

Interest rate risk is managed by focusing on the duration of the Company’s investments. The policy is to limit interest rate risk by restricting the investments to an average duration of between 0 and 1 year. During the reporting period, in which official interest rates were falling, the duration of the Company’s investment has been less than the benchmark duration of 0.75 years. In addition the yield of the Company is measured six monthly. The Board, through its Investment Committee, monitors these measures quarterly.

The Company’s interest bearing financial assets expose it to risks associated with the effects of fluctuations in the prevailing levels of market interest rates on its financial position and cash flows.

The interest rate risk disclosures have been prepared on the basis of the Company’s direct investments and not on a look–through basis.

The following table sets out the Company’s exposure to interest rate risks:

2012

FlOating intereSt

rate $’000

FixeD intereSt

$’000

nOn–intereSt bearing

$’000tOtal $’000

FINANCIAL ASSETS

CASH AND CASH EQUIVALENTS 19,168 197,000 – 216,168

ACCRUED INCOME – – 4,258 4,258

FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT & LOSS

MORTGAGE BACkED & FLOATING RATE NOTES 30,229 – – 30,229

HYBRIDS 132,209 – – 132,209

SECURED MORTGAGES – 81,600 – 81,600

LOANS 27,726 171 – 27,897

TOTAL 209,332 278,771 4,258 492,361

2011

FlOating intereSt

rate $’000

FixeD intereSt

$’000


$’000tOtal $’000

FINANCIAL ASSETS

CASH AND CASH EQUIVALENTS 12,836 145,000 – 157,836

ACCRUED INCOME – – 4,424 4,424


MORTGAGE BACkED & FLOATING RATE NOTES 48,667 – – 48,667

HYBRIDS 102,162 12,807 – 114,969

SECURED MORTGAGES – 97,051 – 97,051

LOANS 17,682 2,041 – 19,723

TOTAL 181,347 256,899 4,424 442,670


Investor interests represent the only financial liability of the Company. The interest paid to investors is fixed periodically. The weighted average interest rate paid to investors for the year ended 31 December 2012 was 5.38% (2011: 6.13%).

The table below analyses the Company’s financial assets and liabilities into their relevant maturity groupings based on the remaining period at balance date to the contractual maturity date.

maturity analySiS 2012

3 mOnthS Or leSS

$’000

4–12 mOnthS

$’000

1–5 yearS

$’000

Over 5 yearS

$’000


$’000tOtal $’000

FINANCIAL ASSETS

CASH AND CASH EQUIVALENTS 179,168 37,000 – – – 216,168

ACCRUED INCOME – – – – 4,258 4,258


MORTGAGE BACkED & FLOATING RATE NOTES 3,516 – 10,443 16,270 – 30,229

HYBRIDS 10,001 8,476 56,050 57,683 – 132,209

SECURED MORTGAGES 6,088 7,837 67,675 – – 81,600

LOANS 2,000 1,935 6,610 17,352 – 27,897

TOTAL 200,773 55,248 140,777 91,305 4,258 492,361

maturity analySiS 2011

3 mOnthS Or leSS

$’000

4–12 mOnthS

$’000

1–5 yearS

$’000

Over 5 yearS

$’000


$’000tOtal $’000

FINANCIAL ASSETS

CASH AND CASH EQUIVALENTS 7,836 40,000 – – – 157,836

ACCRUED INCOME – – – – 4,424 4,424


MORTGAGE BACkED & FLOATING RATE NOTES 5,842 5,029 7,654 30,142 – 48,667

HYBRIDS 4,231 27,104 65,387 18,247 – 114,969

SECURED MORTGAGES 13,739 25,896 57,416 – – 97,051

LOANS 597 11 2,471 16,644 – 19,723

TOTAL 142,245 98,040 132,928 65,033 4,424 442,670

ii)OtherpriceriskThe Company is not exposed to other price risk.

b) Credit Risk Credit risk is the risk that a counterparty will fail to perform contractual obligations, either in whole or in part. Concentrations of credit risk are minimised primarily by:

• ensuring counterparties, together with the respective credit limits, are approved, and

• ensuring that transactions are undertaken with a number of counterparties.

The maximum credit risk on financial assets of UCA Cash Management Fund Limited is the carrying value of these assets on the balance sheet.

i) Cashandcashequivalents,andfinancialassetsatfairvaluethroughprofitorloss The Company invests in cash and cash equivalents and financial assets at fair value through profit or loss, which have an investment grade as rated by a well–known rating agency. For unrated assets a credit analysis is conducted for each investment and approved by the Chief Investment Manager.

cOmpany by rating categOry 2012 2011

RATING

AAA 4% 8%

AA 0% 31%

AA– 68% 28%

A+ 22% 12%

A 2% 2%

A– 1% 11%

BBB+ 2% 0%

BBB 0% 3%

BBB– 0% 1%

UNRATED 1% 4%

TOTAL 100% 100%

The ratings of each of the financial assets are measured

against updates issued by Commonwealth Bank of Australia, UBS and Westpac Banking Corporation on a monthly basis and reported to the Board, through its Investment Committee, quarterly.

ii)SecuredmortgagesThese loans are secured by a registered first mortgage over commercial property. The Company does not lend against owner–occupied residential property. Loans are limited to 66% of the value of the property as ascertained by a valuation issued by a licensed property valuer or by reference to the land value detailed on the most recent municipal rates notice. Loans are provided for fixed terms not exceeding five years. Borrowers are required to demonstrate their ability to service the loan. This is assessed by analysis of the interest cover, normally provided by the rental income from the secured property. Where appropriate, borrowers provide personal guarantees and rental redirections in favour of the Company.

The Board, through its Investment Committee, also analyses the loan portfolio by sector (commercial, retail or industrial) and by geographic location to ensure adequate diversity of security properties. This is monitored regularly by the Chief Investment Manager and reported to the Board annually. The Company is not permitted to make loans to one entity (or related entities) which exceed 5% of the value of the investment portfolio without the approval of the Investment Committee.

During the reporting period and the prior period the Company has not experienced any losses due to impairment. The risk of losses is mitigated by the conservative lending practices outlined above.

As at 31 December 2012 there were no loans that were past due and payable or impaired (31 December 2011: $0).

For the reasons outlined above the Directors believe that the Company’s exposure to credit risk in relation to the secured mortgages is very limited.


iii)LoansLoans to church bodies not secured by a registered first mortgage are secured by a guarantee from The Uniting Church in Australia Property Trust (Victoria) or The Uniting Church in Australia Property Trust (Tasmania). Loans are normally provided for terms of up to fifteen years on a principal and interest basis, with a variable (floating) or fixed interest rate. Borrowers are required to demonstrate their ability to service the loan. This is assessed by analysis of the interest cover, normally provided by operating cash flow and, in some cases, assisted by government grants.

Interest payments are monitored regularly; arrears are measured monthly and reported to the Investment Committee quarterly.

During the reporting period and the prior period, the Company has not experienced any losses due to impairment. The risk of losses is mitigated by the conservative lending practices outlined above.

As at 31 December 2012 there were no loans that were past due and payable or impaired (31 December 2011: $0).

For the reasons outlined above the Directors believe that the Company’s exposure to credit risk in relation to the loans to church bodies is very limited.

c) Liquidity and cash flow risk Liquidity risk is the risk that the Company will experience difficulty in either realising assets or raising sufficient funds to satisfy commitments to investors. Cash flow risk is the risk that the future cash flows derived from holding financial instruments will fluctuate. The risk management guidelines adopted are designed to minimise liquidity and cash flow risk through:

• Ensuring that there is no significant exposure to illiquid or thinly traded financial instruments, and

• Applying limits to ensure there is no concentration of liquidity risk to a particular counterparty or market.

The table in section note 8 (e) summarises the impact of increases / decreases in official interest rates on the Company’s net assets attributable to unitholders at 31 December 2012. The analysis is based on the assumption that official interest rates increased / decreased by 75 basis points (2011:75 basis points) with all other variables held constant and that the Company’s cash and fixed interest securities and loans moved according to the historical correlation with official interest rates.

Liquidity risk is measured and monitored regularly by analysis of securities and loans and the Company’s asset allocation. Liquidity risk is reported quarterly to the Board through its Investment Committee.

d) Fair value measurement The carrying amounts of the Company’s financial assets and financial liabilities at the balance sheet date approximated their fair values as all financial assets and liabilities not fair valued are short–term in nature.

e) Sensitivity analysis The following table summarises the impact of increases / decreases in interest rates on the Company’s assets attributable to investors at 31 December 2012 and 31 December 2011:

2012 2011

Total $’000

Level 1 $’000

Level 2 $’000

Level 3 $’000

Total $’000

Level 1 $’000

Level 2 $’000

Level 3 $’000


CASH AND CASH EQUIVALENTS 216,168 216,168 – – 157,836 157,836 – –

MORTGAGE BACkED SECURITIES 16,276 – 16,276 – 25,094 – 25,094 –

FLOATING RATES NOTES 13,959 – 13,959 – 23,573 – 23,573 –

HYBRID SECURITIES 132,209 128,689 3,520 – 114,968 102,001 2,967 –

378,612 344,857 33,755 – 321,471 259,837 51,634 –

Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities.Level 2 fair value measurements are those derived from inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).Level 3 fair value measurements are those derived from valuation techniques that included inputs for the assets or liability that are not based on observable market data (unobservable inputs).

impact On Operating prOFit/ net aSSetS attributable tO inveStOrS 2012 2011

carrying amount

Interest rate riskcarrying amount

Interest rate risk

$’000 $’000 $’000 $’000 $’000 $’000

–75 bps +75 bps –75 bps +75 bps

CASH AND CASH EQUIVALENTS 216,168 (144) 144 157,836 (96) 96

ACCRUED INCOME 4,258 – – 4,425 – –


MORTGAGE BACkED AND FLOATING RATE NOTES 30,229 (227) 227 48,667 (365) 365

HYBRIDS 132,209 (992) 992 114,968 (766) 766

SECURED MORTGAGES 81,600 – – 97,051 – –

LOANS 27,897 (209) 209 19,723 (133) 133

TOTAL INCREASE/(DECREASE) 492,361 (1,571) 1,571 442,670 (1,360) 1,360


note 9 – auditor remuneration

2012 $

2011 $

AUDIT SERVICES

AUDIT OF FINANCIAL REPORT 20,066 19,294

OTHER ASSURANCE SERVICES

OTHER 30,200 57,000

50,266 76,294

The auditor for the year was Deloitte Touche Tohmatsu. During the reporting period fees were paid to the auditor of the Company in relation to non–audit services. This was $13,000 for the assurance of the Annual and Sustainability report. In addition, the Company paid amounts of $11,466 (2011: $13,160) on behalf of the Development Fund and $5,734 (2011: $6,580) on behalf of the Funeral Fund in relation to the annual audit of those financial statements.

note 10 – note to cash flow statementa) Reconciliation of Cash

For the purposes of the cash flow statement, cash includes deposits held at call with a financial institution and amounts which are readily convertible to cash. Cash at the end of the year comprises the following cash and cash equivalents:

2012 $’000

2011 $’000

CASH AT BANk 5,168 4,836

SHORT TERM DEPOSIT AT CALL 14,000 8,000

FIxED TERM DEPOSITS 197,000 145,000

TOTAL CASH AND CASH EQUIVALENTS 216,168 157,836

b) Reconciliation of net profit/(loss) for the year to net cash inflow/(outflow) from operating activities

2012 $’000

2011 $’000

NET (LOSS)/PROFIT FOR THE YEAR 1,871 (1,420)

INTEREST PAID TO INVESTORS 25,529 26,546

CHANGE IN OPERATING ASSETS AND LIABILITIES

(INCREASE)/DECREASE IN LOANS & SECURED MORTGAGES 7,276 (6,406)

(INCREASE)/DECREASE IN FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS 1,198 97,964

(INCREASE)/DECREASE IN ACCRUED INCOME 166 (1,721)

NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES 36,040 114,963

c) Non–cash financing activities During the year distributions to members totalling $14,095,000 (2011: $26,078,000) were satisfied through the distribution reinvestment plan.

note 11 – events occurring after balance sheet dateOther than the loan to UCA Growth Fund Limited, there we no other matter or significant events have occurred since balance date which would impact on the financial position of the Company disclosed in the balance sheet at 31 December 2012, or the results and cash flows of the Company for the year ended on that date.

note 12 – contingent assets and liabilities and commitmentsThere were no outstanding contingent assets and liabilities or commitments as at 31 December 2012 or at 31 December 2011.

70 2012 ANNUAL REPORT: THE YEAR IN REVIEW 71UCA Growth Fund Limited

UCA Growth Fund LimitedABN 39 075 948 435


uca growth fund limited A company limited by guarantee, domiciled in the State of Victoria in Australia.


The registered office is: 130 Little Collins Street Melbourne, Victoria 3000 Australia

Auditor: Deloitte Touche Tohmatsu 550 Bourke Street Melbourne, Victoria 3000 Australia


directors’ reportfor the year ended 31 December 2012

The directors present their report on the financial statements of the UCA Growth Fund Limited (the “Company”) for the year ended 31 December 2012.

general informationInvestment in the Company is available to Uniting Church congregations, organisations and agencies. The Company is also open to other not for profit organisations with a religious, educational or charitable purpose that are registered as Tax Concession Charities.

The Company is exempt from the fundraising, managed investment and licensing provisions of the Corporations Act under Class Order 02/184. The Company has been accordingly registered by the Australian Securities and Investments Commission. The Company is also exempt from the Banking Act 1959 by virtue of APRA Banking Exemption No 1 of 2006.

The Company seeks to operate at a low cost and to provide both competitive returns to investors and an annual grant to The Uniting Church in Australia, Synod of Victoria and Tasmania. All investments are made within the ethical investment guidelines of the Uniting Church in Australia, Synod of Victoria and Tasmania.

Principal activitiesThe Company’s principal and continuing activities during the year consisted of:

a) Providing an investment medium for congregations, programs, presbyteries and agencies of The Uniting Church in Australia; and

b) Providing an investment medium for other non-profit organisations with a religious, charitable or educational purpose.

There were no significant changes in the nature of the Company’s activities during the year.

resultsNet profit of the Company was $35,557,000 (2011: net loss $33,558,000) prior to distributing $21,001,000 (2011: $13,262,000) to investors.

review of operationsFunds under management increased by 4.14% during the year to $239,495,000 at 31 December 2012 (2011: $228,062,000).

The total management fee charged during the reporting period was $1,838,000 (2011: $2,050,000) which is calculated at 0.75% per annum (2011: 0.75%) of the net funds under management at the end of each month. The management fee comprised of the following; operating costs of the Company were $1,419,000 (2011: $1,593,000) and a grant of $419,000 (2011: $457,000) was paid to The Uniting Church in Australia, Synod of Victoria and Tasmania during the year ended 31 December 2012. The grant is a contribution to the mission of the Church and forms part of the management fee.

significant changes in the state of affairsIn the directors’ opinion, there were no significant changes in the state of affairs of the Company that occurred during the year not otherwise disclosed in this report or the financial statements.

matters subsequent to the end of the yearOther than the loan from UCA Cash Management Fund Limited, no other matter or circumstance has arisen since 31 December 2012 that has significantly affected, or may significantly affect the operations of the Company, the results of those operations or the state of affairs of the Company in future years.

likely developments and expected resultsFurther information on likely developments in the operations of the Company and the expected results of operations of the Company has not been included in this report because the directors believe it would be likely to result in unreasonable prejudice to the Company.

environmental regulationThe Company is not subject to any particular or significant environmental regulation under a Commonwealth, State or Territory law.

directorsThe following persons were directors of the Company during the whole of the year and up to the date of this report:

r J carter Non-Executive Director - Chairperson – Board of Directors and Remuneration & Nomination Committee

J etherington Non-Executive Director - Chairperson – Audit & Compliance Committee from 4 December 2012

r e male Non-Executive Director - Chairperson – Audit & Compliance Committee to 25 September 2012, Retired 12 December 2012

d f hawkey Non-Executive Director

k a howard Non-Executive Director - Appointed 1 July 2012

r g moore Non-Executive Director

J c simkiss Non-Executive Director - Chairperson – Investment Committee

s J taylor Non-Executive Director

g e wilson Non-Executive Director - Appointed 1 June 2012

g V rough Executive Director - Resigned 10 August 2012

s c norman Executive Director - Appointed 16 October 2012 & Resigned 6 February 2013

m walsh Executive Director - Appointed 4 February 2013


information on directors

mr richard John carter CitWA, B Com, FTSE, FAusIMM, FAIM, FAICD

Non-executive Director and Chairperson. He is the former Chair of Prahran Mission-UnitingCare, a former Director of BHP Gold Mines Ltd, North Ltd, Orbital Engine Group, Marion Energy Ltd and ERA Ltd, Chair of Consolidated Minerals Ltd, Macmahon Holdings Ltd, Ticor Ltd and a former Chief Executive Officer of BHP Minerals. He is an active member of the Uniting Church and is Chair of the Church Council at Ewing Memorial UC, East Malvern.


Non-executive Director. He is a Partner of Non Executive Management, a Director of Pental Limited, a Director and Treasurer of the National Heart Foundation of Australia (Victorian Division), a member of the Audit and Compliance Committee of the Uniting Church in Australia (Synod of Victoria and Tasmania), a member of the Audit and Risk Committee of the University of Melbourne and a co-trustee of the Ian Rollo Currie Foundation. He is a former Assurance and Advisory Partner of Deloitte.


Non-executive Director. He is Chair of UnitingCare Prahran Mission and a member of the Compliance Committee of Antares Capital Partners Ltd. He is a former Executive Director of Rothschild Australia Asset Management Limited, a former principal of Cameron Ralph Pty Ltd and a former Director of Hancock Natural Resources Group Australasia Pty Limited, Intech Fiduciaries Limited, the Financial Services Council (FSC), the Financial Industry Complaints Service Limited and State Trustees Limited. He is also a former member of the Compliance Committees of Principal Global Investors (Australia) Limited and Spark Infrastructure Group and Chair of the BlackRock Investment Management (Australia) Limited Compliance Committee. He is an active member of the Uniting Church, a member of the Forest Hill Church Council and the Finance & Property Committee, and a member of the VicTas Synod.


Non-executive Director. She currently is General Counsel and Secretary of Victorian Funds Management Corporation. She was a former Director of Yarra Bend Park Trust, BlackRock Investment Management (Australia) Ltd, Foundation Boroondara, Housing Guarantee Fund Limited, National Foundation for Australian Women, Investment Funds Association and Merrill Lynch Staff Super Fund. She was also a Regulatory Affairs Board Committee Member of Investment and Financial Services Association (now Financial Services Council).


Non-executive Director. He is a former managing partner of Coopers & Lybrand. He is a non-executive Director of Goldman Sachs & Partners Australia Pty Ltd and The Walter and Eliza Hall Institute of Medical Research, a former member of the Compliance Committee of Almond Orchards Australia Limited, and a member of the Audit Committee of Nillumbik Shire Council.


Non-executive Director. He is Chair of the City of Melbourne Audit Committee, Consulting Director at Grant Thornton, the former Group General Manager, Audit of Australia and New Zealand Banking Group Limited and a former non-executive Director of ANZ Pension (Uk) Limited. He is a former partner of PricewaterhouseCoopers, where he specialised in Corporate Governance, Risk Management and Internal Audit advisory services.

ms suzanne c norman BBus, BA, CPA, FAICD

(From 16 October 2012 to 6 February 2013)





Non-executive Director. He is a Director of Prime Value Asset Management Ltd, a former Investment Manager of Telstra Super Pty Ltd, a former Director of the Potter Warburg Group and former Group Treasurer of CRA. He is a former External Consultant member of the Investment Committee of EquipSuper.


Non-executive Director. He is also a Director of the Goodman Australia Industrial Fund, and was formerly CEO of Victorian Funds Management Corporation and JP Morgan Investment Management Australia. He is a past president of the Melbourne Society of Financial Analysts and has experience with a number of investment institutions in Australia and overseas.




Non-executive Director. She is a Partner of Non Executive Management. She was a former Chief Executive Officer of Berndale Securities Limited (a subsidiary of Merrill Lynch Australia), former Director of Merrill Lynch Australia and Citigroup Australia. She is a member of the Finance and Investment Committee for the Brotherhood of St Laurence.

directors’ shareholdingsNo director holds shares or invests in the Company.







cOmmittee

a B a B a B a B

R J Carter 8 7 * * 4 3 8 8


D F Hawkey 8 7 5 4 * * 8 6

k A Howard 5 5 2 2 * * * *

R E Male 8 8 5 5 * * 8 8

R G Moore 8 8 5 2 * * * *

S C Norman 2 2 * * * * 2 1

G V Rough 4 3 * * * * 4 4

J C Simkiss 8 8 * * 4 4 * *

S J Taylor 8 7 * * 4 4 3 2

M Walsh * * * * * * * *

G E Wilson 6 5 * * 2 2 * *








insurance of officersDuring the year The Uniting Church in Australia paid a premium of $122,000 (2011: $117,000) to insure all officers of the Church (in the Synod of Victoria and Tasmania), of which the officers of the Company and related bodies corporate form a part. An amount of $976 (2011: $950) was charged to the Company representing the Company’s allocation of the premium.

The officers of the Company covered by the insurance policy include the directors: R J Carter, J Etherington, D F Hawkey, k A Howard, R E Male, R G Moore, S C Norman, G V Rough, J C Simkiss, S J Taylor, M Walsh and G E Wilson. All employees of the Company (employed by the Synod of Victoria and Tasmania) are covered by the insurance policy. The Company has not otherwise, during or since the financial year, indemnified or agreed to indemnify an officer or auditor of the Company or of any related body corporate against liability incurred as an officer or auditor.


rounding of amounts The Company is of a kind referred to in Class Order 98/100 issued by the Australian Securities and Investments Commission, relating to the rounding off of amounts in the directors’ reports and financial statements. Amounts have been rounded off in accordance with that Class Order to the nearest thousand dollars, or in certain cases, to the nearest dollar.

auditors’ independence declarationAuditors’ Independence declaration as required by section 307C of the Corporations Act 2001 is set out on page 78.


R J Carter Director

M Walsh Director





Independent Auditor’s Report to the Investors of UCA Growth Fund Limited

We have audited the accompanying financial report of UCA Growth Fund Limited (the “Company”), which comprises the statement of financial position as at 31 December 2012, the statement of comprehensive income, the cash flow statement and the statement of changes in equity for the year ended on that date, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration of the Company as set out on pages 12 to 29.

Directors’ Responsibility for the Financial Report

The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error. In Note 2, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that the financial statements comply with International Financial Reporting Standards.






In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of UCA Growth Fund Limited, would be in the same terms if given to the directors as at the time of the auditor’s report.

Opinion

In our opinion:

(a) the financial report of UCA Growth Fund Limited is in accordance with the Corporations Act 2001, including:










The Board of Directors UCA Growth Fund Limited 130 Little Collins Street MELBOURNE VIC 3000

23 April 2013

Dear Board Members

UCA Growth Fund Limited

In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration of independence to the directors of UCA Growth Fund Limited.

As lead audit partner for the audit of the financial statements of UCA Growth Fund Limited for the financial year ended 31 December 2012, I declare that to the best of my knowledge and belief, there have been no contraventions of:



Yours sincerely



directors’ declarationIn the directors’ opinion:



ii) present fairly the Company’s financial position as at 31 December 2012 and its performance, as represented by the results of its operations, changes in equity and its cash flows, for the financial year ended on that date; and




R J Carter Director

M Walsh Director




nOteS2012

$’0002011

$’000

INCOME

MANAGEMENT FEE RECEIVED FROM RELATED PARTY 9a – 174

INTEREST RECEIVED 9c 535 858

DIVIDENDS RECEIVED 4 18,398 11,643

FRANkING CREDITS RECEIVED 7,730 3,639

NET GAIN ON FOREIGN ExCHANGE – 235

NET (LOSS)/GAIN ON FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT AND LOSS 5 11,294 (47,331)

TOTAL INCOME 37,957 (30,782)

ExPENSES

MANAGEMENT FEE PAID TO RELATED PARTY 9a 1,838 2,050

TRANSACTION COSTS 548 726

OTHER OPERATING ExPENSES 14 –

TOTAL OPERATING ExPENSES 2,400 2,776

PROFIT/(LOSS) ATTRIBUTABLE TO INVESTORS 35,557 (33,558)

FINANCING COSTS ATTRIBUTABLE TO INVESTORS

DISTRIBUTIONS TO INVESTORS 8 21,001 13,262

(DECREASE)/INCREASE IN NET ASSETS ATTRIBUTABLE TO INVESTORS 7 14,556 (46,820)

NET PROFIT – –



TOTAL COMPREHENSIVE INCOME FOR THE YEAR – –


Statement of Financial Position

nOteS2012

$’0002011

$’000

ASSETS

INVESTMENT IN UCA CASH PORTFOLIO AT CALL 9c 1,262 9,024

ACCRUED INCOME 6,115 2,872


EQUITY SECURITIES 6 232,108 216,156

LOANS TO RELATED PARTIES 9b 10 10

TOTAL ASSETS 239,495 228,062

LIABILITIES (ExCLUDING NET ASSETS ATTRIBUTABLE TO INVESTORS)

RELATED PARTY LOAN 9e (2,000) –

LIABILITIES ATTRIBUTABLE TO INVESTORS 7 (237,494) (228,062)

NET ASSETS – –

EQUITY

CONTRIBUTED EQUITY – –

Total equity – –

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


Cash Flow Statement

nOteS2012

$’0002011

$’000


MANAGEMENT FEE RECEIVED FROM RELATED PARTY 9a – 174

INTEREST RECEIVED 9c 535 858

PURCHASES OF FINANCIAL ASSETS (400,067) (258,481)

SALE OF FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS 403,171 243,339

DIVIDENDS RECEIVED 18,405 11,751

FRANkING CREDITS REFUND RECEIVED 4,480 3,344

MANAGEMENT FEE PAID TO RELATED PARTY 9a (1,838) (2,050)

TRANSACTION COSTS PAID (548) (726)

OTHER OPERATING ExPENSES PAID (14) –

NET CASH OUTFLOW FROM OPERATING ACTIVITIES 13a 24,124 (1,791)


DISTRIBUTIONS PAID TO INVESTORS (15,517) (9,927)

APPLICATIONS RECEIVED FROM INVESTORS 7 4,966 26,079

REDEMPTIONS PAID TO INVESTORS 7 (15,573) (14,361)

NON-RECOURSE SHORT TERM LOAN FROM RELATED PARTY 9e 2,000 –

NET CASH INFLOW FROM FINANCING ACTIVITIES (24,124) 1,791

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS – –

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR – –

CASH AND CASH EQUIVALENTS AT END OF YEAR – –



nOteS2012

$’0002011

$’000

TOTAL EQUITY AT THE BEGINNING OF THE YEAR – –

NET PROFIT – –



TOTAL EQUITY AT THE END OF THE YEAR – –



note 1 – general informationThis general purpose financial report covers UCA Growth Fund Limited (the “Company”) as an individual entity.

The financial statements were authorised for issue by the directors on 23 April 2013. The Directors have the power to amend and reissue the financial report.

The Company does not guarantee an income stream or return on capital.





The financial statements have been prepared under the historical cost convention, as modified by the revaluation of financial assets held at fair value with changes in fair value recognised through the statement of comprehensive income.

b) Dividends Dividends from financial assets are reported on a receivable basis.

c) Financial Assets at fair value through Profit or Loss ClassificationThe Company’s investments in equities are classified as financial instruments designated at fair value through profit or loss. These include financial assets that are not held for trading purposes and which may be sold.

Financial assets designated at fair value through profit or loss at inception are those that are managed and their performance evaluated on a fair value basis in accordance with the Company’s documented investment strategy.

Measurement Financial assets held at fair value through profit or loss are measured initially at fair value excluding any transaction costs that are directly attributable to their acquisition or issue. Transaction costs on financial assets at fair value through profit or loss are expensed immediately. Subsequent to initial recognition, all instruments held at fair value through profit or loss are measured at fair value with changes in their fair value recognised in the statement of comprehensive income. The following represents the basis of valuation for financial reporting purposes:

• The fair value of financial assets traded in active markets is based on their quoted market prices at the balance sheet date without any deduction for future selling costs. Financial assets are priced at bid prices. In the absence of quoted values financial assets are valued by other financial institutions using appropriate redemption yields.

• Equity securities and listed property trusts

Securities that are listed or traded on an exchange are fair valued based on quoted “bid” prices on long securities.

• Investment in UCA Cash Management Fund

The Company’s investment in UCA Cash Fund Limited is at call. The capital of UCA Cash Management Fund Limited is guaranteed by The Uniting Church in Australia Property Trust (Victoria).

Recognition/derecognition

The Company recognises financial assets on the date it becomes party to the contractual agreement (trade date) and recognises changes in fair value of the financial assets from this date. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or the Company has transferred substantially all risks and rewards of ownership.

d) Cash and cash equivalents Cash and cash equivalents include cash on hand, deposits held at call at banks and other short-term highly liquid investments.

Payments and receipts relating to the purchase of investment securities are classified as cash flows from operating activities, as movements in the fair value in these securities represent the Company’s main income generating activity.

e) Foreign currency translation FunctionalandpresentationcurrencyItems included in the Company’s financial statements are measured using the currency of the primary economic environment in which it operates (the “functional currency”). This is the Australian dollar, which reflects the currency of the economy in which the Company operates. The Australian dollar is also the Company’s presentation currency.

TransactionsandbalancesForeign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translations at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the statement of comprehensive income.

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

f ) Distributions The Company distributes its distributable income to investors. The distributions are recognised as a finance cost in the statement of comprehensive income. Distributions are allocated to investors on 30 June and 31 December each year.

g) Income Tax The Company is exempt from Income Tax under Section 50-5 of the Income Tax Assessment Act 1997.

h) Receivables Receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. The value of the receivable is measured at amortised cost using the effective interest rate method.

Interest income is accrued at the balance sheet date from the date of last payment, using the effective interest method.

i) Goods and Services Tax (GST) Where applicable, GST incurred by the Company, that is not recoverable from the Australian Taxation Office, has been recognised as part of the expense to which it applies. Receivables and payables are stated with any applicable GST in their value.


j) Increase/decrease in net assets attributable to investors Non-distributable income may consist of unrealised changes in the net fair value of investments, accrued income not yet assessable, expenses provided or accrued for which are not yet deductible, net capital losses and tax free or tax deferred income. Net capital gains on the realisation of any investments (including any adjustments for tax deferred income previously taken directly to investors’ funds) and accrued income not yet assessable will be included in the determination of distributable income in the same year in which it becomes assessable for tax. Movements in net assets attributable to investors are recognised in the statement of comprehensive income as financing costs.

k) Net assets attributable to investors In accordance with AASB 132, investors’ funds are classified as a financial liability and disclosed as such in the Statement of Financial Position as “Liabilities attributable to investors”.

l) Use of estimates The Company makes estimates and assumptions that affect the reported amounts of assets and liabilities within the next financial year. Estimates are continually evaluated and based on historical experience and other factors, including expectations of future


events that are believed to be reasonable under the circumstances.

m) Rounding off amounts to nearest thousand dollars The Company is of a kind referred to in Class Order 98/100 (as amended) issued by the Australian Securities and Investments Commission, relating to the rounding off of amounts in the directors’ report and financial statements. Amounts have been rounded off in accordance with that Class Order to the nearest thousand dollars, or in certain cases, to the nearest dollar.

n) New accounting standards and interpretations The Company has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to its operation and that are effective for the current reporting period.


A number of Australian Accounting Standards and Interpretations are in issue but are not effective for the current year end. The reported results and position of the Company will not change on adoption of these pronouncements as they do not result in any changes to the Company’s existing polices. The Company does not intend to adopt any of these pronouncements before their effective dates. These include;

AASB9FinancialInstruments(December2010),AASB2010-7AmendmentstoAustralianAccountingStandardsarisingfromAASB9AASB 9 is applicable for annual reporting periods beginning on or after 1 January 2013. A revised version of AASB 9 incorporating revised requirements for the classification and measurement of financial liabilities, and carrying over the existing requirements derecognition from AASB 139. This has not affected any of the amounts recognised in the financial statements nor has there been any impact on the presentation in the financial statements.

AASB13FairValueMeasurementandrelatedAASB2011-8AmendmentstoAustralianAccountingStandardsarisingfromAASB13 AASB 13 is applicable for annual reporting periods beginning on or after 1 January 2013. AASB 13 does not change the requirements regarding which items should be measured or disclosed at fair value. This has not

affected any of the amounts recognised in the financial statements nor has there been any impact on the presentation in the financial statements.

AASB1053ApplicationofTiersofAustralianAccountingStandardsandAASB2010-2AmendmentstoAustralianAccountingStandardsarisingfromReducedDisclosureRequirements AASB 1053 is applicable for annual reporting periods beginning on or after 1 January 2013. AASB 1053 establishes a differential financial reporting framework consisting of two tiers of reporting requirements for general purpose financial statements. This has not affected any of the amounts recognised in the financial statements nor has there been any impact on the presentation in the financial statements.

o) Critical accounting judgements and key sources of estimation uncertainty There have not been any critical accounting judgements or estimations made in the preparation of the financial statements for the year ended.

note 3 – company commencementThe Company commenced operating in July 1985 to provide a low cost financial product to tax concession charities and not for profit organisations. On 11 October 1996 UCA Growth Fund Limited was created as the legal entity of the Company.

note 4 – dividend income

2012 $’000

2011 $’000

LISTED EQUITIES

AUSTRALIAN EQUITIES 18,398 11,314

INTERNATIONAL EQUITIES – 329

18,398 11,643

note 5 – realised and unrealised gain/(loss)

a) Net Unrealised Gain/(Loss) On Financial Assets Held At Fair Value Through Profit Or Loss

2012 $’000

2011 $’000

LISTED EQUITIES

ASx LISTED EQUITIES 30,401 (41,818)

30,401 (41,818)

b) Net Realised Gain/(Loss) On Financial Assets Held At Fair Value Through Profit Or Loss

2012 $’000

2011 $’000

LISTED EQUITIES

ASx LISTED EQUITIES (19,107) (2,876)

NYSE LISTED EQUITIES – (2,637)

(19,107) (5,513)

TOTAL REALISED AND UNREALISED GAIN ON FINANCIAL ASSETS HELD AT FAIR VALUE 11,294 (47,331)

note 6 – financial assets at fair Value through Profit or loss

2012 $’000

2011 $’000

LISTED EQUITIES

ASx LISTED EQUITIES 232,108 216,156

232,108 216,156


note 7 – movement in net assets attributable to investorsMovements in investors’ funds during the year were:

2012 2011

No. of Units $’000 No. of Units $’000

OPENING BALANCE AT 1 JANUARY 59,227,867 228,062 57,455,906 259,829

APPLICATIONS

CASH 383,155 4,966 3,767,963 26,079

DISTRIBUTIONS REINVESTED 1,428,164 5,484 866,866 3,335

REDEMPTIONS (945,305) (15,573) (2,862,868) (14,361)

INCREASE IN NET ASSETS ATTRIBUTABLE TO INVESTORS – 14,556 – (46,820)

CLOSING BALANCE AT 31 DECEMBER 60,093,881 237,495 59,227,867 228,062

note 8 – distributions Paid and Payable

2012 2011

$’000 cPU $’000 cPU

THE DISTRIBUTIONS WERE MADE AS FOLLOWS

JUNE 6,417 10.24 4,445 7.70

DECEMBER 14,584 24.31 8,817 14.26

TOTAL 21,001 13,262

note 9 – related Partiesa) Management Fee

The management fee expense covers a share of the cost of operating UCA Funds Management (“Funds Management”) and a contribution to the Synod of Victoria and Tasmania. The management fee is not to exceed 1% per annum of the net value of the funds under management. The Funds Management operating cost component of the management fee is based on the budgeted cost of operations. The management fee expense is recorded on an accruals basis.

2012 $’000

2011 $’000

FUNDS MANAGEMENT OPERATING COSTS 1,419 1,593

CONTRIBUTION TO UCA SYNOD OF VICTORIA AND TASMANIA 419 457

GROSS MANAGEMENT FEE ExPENSE 1,838 2,050

RECEIVED FROM UNITING GROWTH FUND – (174)

Net management fee expense 1,838 1,876

b) Loan to Uniting Growth Fund Limited The loan of $10,000 was granted to Uniting Growth Fund Limited to satisfy the requirements under its Australian Financial Services Licence of the Uniting Growth Fund Limited. The loan is interest free and has not fixed repayment date.

c) UCA Growth Fund investments in UCA Cash Management Fund Limited UCA Growth Fund invests its cash holdings in UCA Cash Management Fund Limited, which is at call.

2012 $’000

2011 $’000

FAIR VALUE OF FUNDS INVESTED 1,262 9,024

INTEREST RECEIVED 535 858

d) UCA Growth Fund Limited investment in Uniting Growth Fund Limited UCA Growth Fund Limited was the sole shareholder of Uniting Growth Fund Limited, which ceased on 11 May 2011. UCA Growth Fund Limited earned no fees during the reporting period. (2011: $174,163 for providing investment management and administration services to Uniting Growth Fund Limited).

e) Loan from UCA Cash Management Fund Limited UCA Cash Management Fund Limited provided a loan for $2,000,000 on 31 December 2012. The loan was repaid in full on 10th January 2013.

f ) key Management Personnel Compensation The Company has no employees. All key management personnel are employed by the Uniting Church in Australia, Synod of Victoria and Tasmania.

i) Directors The names of the persons who were the directors of UCA Funds Management Limited at any time during the year and up to the date of this report were:
















The remuneration of the executive director and non-executive directors of UCA Funds Management Limited is set out in the following table:

2012 $

2011 $


SHORT-TERM EMPLOYEE BENEFITS 325,640 324,973

OTHER LONG-TERM BENEFITS 770 8,365

TOTAL 326,410 333,338


Other long-term benefits include accrued long service leave entitlements.

There are no post-employment benefits, termination benefits or share-based payments applicable.

ii)Otherkeymanagementpersonnel Except for UCA Growth Fund Limited, there were no other persons with responsibility for planning, directing and controlling the activities of the Fund, directly or indirectly during the financial year. During the reporting period, no Director held an account in the Fund (2011: nil).

note 10 – financial risk managementThe Company’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk. The Company’s risk management strategies seek to minimise potential adverse effects of market movements on the Company’s performance. Financial risk management is the responsibility of the Chief Investment Manager; this responsibility is discharged having regard to policies approved by the Board of Directors. Compliance with Board policies is monitored by the Board’s Investment Committee and reported to the Board of Directors on a quarterly basis.

The objective of the Company is to provide a tax effective income stream to investors and to achieve capital growth through investing in a diversified portfolio of Australian and international equities, cash and fixed interest securities. The Company aims to produce a total return of 3-5% in excess of inflation over any five year period.

a) Market risk

Market risk is the risk that the value of the Company’s investments in domestic equities, cash and fixed interest will fluctuate as a result of changes in market values.

i) InterestrateriskThe Company’s interest-bearing assets expose it to risks associated with the effects of fluctuations in the prevailing levels of market interest rates on its financial position and cash flows. 0.53% (2011: 3.96%) of the Company’s financial assets are floating rate interest bearing investments in UCA Cash Management Fund Limited. The capital invested in UCA Cash Management Fund Limited is guaranteed by The Uniting Church in Australia Property Trust (Victoria). As a result the risk of fluctuations in interest rates is limited to the interest payable to the Company. The table in note 10 (e) summarises the impact of an increase / decrease in interest rates on the Company’s net assets attributable to investors.

The interest rate risk disclosures are prepared on the basis of the Company’s direct investments and not on a look-through basis for investments held indirectly through other funds.

2012 2011

Floating interest

rate $’000

Non-interest bearing

$’000Total $’000

Floating interest

rate $’000


$’000Total $’000

FINANCIAL ASSETS

INVESTMENT IN UCA CASH MANAGEMENT FUND AT CALL 1,262 – 1,262 9,024 – 9,024

ACCRUED INCOME – 6,115 6,115 – 2,872 2,872

EQUITY SECURITIES – 232,108 232,108 – 216,156 216,156

LOANS – 10 10 – 10 10

TOTAL 1,262 238,233 239,495 9,024 219,038 228,062

Interest rate risk is measured by calculating the yield on the UCA Cash Management Fund Limited, which is reported to the Investment Committee. The Chief Investment Manager also monitors movements in interest rates regularly and the Board of Directors, through its Investment Committee, monitors movements in interest rates quarterly.

Since the Fund’s interest-bearing securities are all at floating rates, they are exposed to risks associated with the effects of fluctuations in the prevailing levels of market interest rates. The table in note 10(e) summarises the impact of increases / decreases in official interest rates on the Portfolio’s net assets attributable to unitholders at 31 December 2012. The analysis is based on the assumption that official interest rates increased / decreased by 75 basis points (2011: 75 basis points)

ii)Otherpricerisk Other price risk is the risk that the fair value of a financial instrument will fluctuate because of changes in market prices. The maximum risk resulting from financial instruments is determined by the fair value of the financial instruments.

The Company is exposed to equity security price risk. All equities present a risk of loss of capital. This risk is moderated through appropriate diversification and careful stock selection within specified limits for

individual asset classes. The following measures have been adopted to manage this risk:

The strategic asset allocation approved by the Board is as follows:

tactical range

%

Strategic allOcatiOn

%

TOTAL SHARES & LISTED PROPERTY 80-100 95

FIxED INTEREST & CASH 0-20 5

The strategic asset allocation has not changed during the reporting period or the prior year. The actual asset allocation is measured regularly and is monitored by the Board of Directors, through the Investment Committee, quarterly.

• Not more than 10% of the shares portfolio will be invested in any one company in the S&P/ASx 300 and not more than 5% of the shares portfolio will be invested in any one company outside the S&P/ASx 300.


• The total investment in any shares or other securities (including options) issued by one company shall not exceed 5% of the issued capital of that company.

• At least 50% of the portfolio must be in companies making up the S&P/ASx 50 Leaders index.

During the reporting period the Company was overweight in the materials and banking sectors and underweight capital goods and diversified finance.

The following techniques are employed to measure risk: portfolio tracking error by sector and by stock, the alpha and beta analysis of the portfolio, liquidity versus the benchmark S&P/ASx 300 and the proportion of stocks held in the top S&P/ASx 50. These measurements are monitored on a regular basis with data provided by Goldman Sachs JB Were and IRESS.

In addition performance of the portfolio is measured against the S&P/ASx 300 Accumulation Index and the CPI.

Due to constraints imposed by the ethical investment policy of The Uniting Church in Australia, Synod of Victoria and Tasmania, approximately 22% of the S&P/ASx 300 is not available for investment. This restriction of the investment universe poses a potential risk because it limits diversification and excluded sectors may out-perform the market.

The Company is managed on an after-tax-basis (in particular to take advantage of franking credits) and this may increase the risk profile of the Fund.

The Chief Investment Manager takes active positions with respect to both sectors and individual stocks.

The Company’s market positions are monitored and performance against benchmarks (with the exception of international equities) is tracked on a daily basis. The Board of Directors, through the Investment Committee, reviews the portfolios and performance against benchmarks on a quarterly basis.

The table in note 10 (e) summarises the impact of increases / decreases of the S&P/ASx 300 Accumulation Index on the Company’s net assets attributable to investors at 31 December 2012. The analysis is based on the assumption that the index increased / decreased by 10% (2011: 10%) with all other variables held constant and that the Company’s equity securities moved according to the historical correlation with the index.

b) Credit Risk Exposure Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. 99.00% (2010: 96.04%) of the Company’s assets are non interest bearing with the Company’s exposure to credit risk being limited to its investment in UCA Cash Management Fund. The capital invested in UCA Cash Management Fund is guaranteed by The Uniting Church in Australia Property Trust (Victoria). Accordingly credit risk exposure is considered to not be significant.

c) Liquidity and cash flow risk Liquidity risk is the risk that the Company will experience difficulty in either realising assets or raising sufficient funds to satisfy commitments associated with individual financial instruments. Cash flow risk is the risk that the future cash flows derived from holding financial instruments will fluctuate. The risk management guidelines adopted are designed to minimise liquidity and cash flow risk through:

• Ensuring that there is no significant exposure to illiquid or thinly traded financial instruments, and

• Applying limits to ensure there is no concentration of liquidity risk to a particular counterparty or market.

The Company is exposed to daily cash redemptions of investor funds. It therefore invests the majority of its assets in investments that are traded in an active market and can be readily disposed of.

Liquidity and cash flow risk is monitored and measured regularly by analysis of the equities portfolio, including the proportion of cash held in UCA Cash Management Fund Limited. The asset allocation of the Company is also measured monthly. All of the measures outlined are reported to the Board of Directors quarterly through its Investment Committee.

The Company’s listed securities are considered readily realisable, as they are listed on the Australian Stock Exchange.

The capital invested in the Company is guaranteed by The Uniting Church in Australia Property Trust (Victoria).

d) Fair values of financial assets The carrying amounts of all the Company’s assets at reporting date approximated their fair values as all financial assets not fair valued are short term in nature. The accounting policies in note 2(c) set out how the fair values for the Company’s investments are determined.

e) Sensitivity analysis

2012 impact On Operating prOFit/ net aSSetS attributable tO inveStOrS

carrying amOunt intereSt rate riSk price riSk

–75 bps +75 bps –10% +10%

$’000 $’000 $’000 $’000 $’000

INVESTMENT IN UCA CASH MANAGEMENT FUND AT CALL 1,262 (9) 9 – –

ACCRUED INCOME 6,115 – – – –

FINANCIAL ASSETS THROUGH PROFIT OR LOSS

ASx LISTED EQUITIES 232,108 – – (23,211) 23,211

LOANS 10 – – – –

TOTAL INCREASE/(DECREASE) 239,495 (9) 9 (23,211) 23,211

2011 impact On Operating prOFit/ net aSSetS attributable tO inveStOrS

carrying amOunt intereSt rate riSk price riSk

-75 bps +75 bps -10% +10%

$’000 $’000 $’000 $’000 $’000

INVESTMENT IN UCA CASH MANAGEMENT FUND AT CALL 9,024 (68) 68 – –

ACCRUED INCOME 2,872 – – – –

FINANCIAL ASSETS THROUGH PROFIT OR LOSS

ASx LISTED EQUITIES 216,156 – – (21,616) 21,616

LOANS 10 – – – –

TOTAL INCREASE/(DECREASE) 228,062 (68) 68 (21,616) 21,616


f ) Fair value measurement

2012 2011

Total $’000

Level 1 $’000

Level 2 $’000

Level 3 $’000

Total $’000

Level 1 $’000

Level 2 $’000

Level 3 $’000

FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT AND LOSS

INVESTMENT IN CASH MANAGEMENT FUND AT CALL 1,262 1,262 – – 9,024 9,024 – –

LISTED SECURITIES 232,108 232,108 – – 216,156 216,156 – –

TOTAL 233,370 233,370 – – 225,180 225,180 – –

Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 fair value measurements are those derived from inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 fair value measurements are those derived from valuation techniques that included inputs for the assets or liability that are not based on observable market data (unobservable inputs).

note 12 – auditor’s remuneration During the year, the following fees were paid or payable for services provided by the auditor.

2012 $

2011 $

AUDIT SERVICES


NON-AUDIT SERVICES

TAxATION SERVICES – –

OTHER 28,000 72,000

48,066 91,294

The auditor for the year was Deloitte Touche Tohmatsu. During the reporting period fees were paid to the auditor of the Company in relation to non-audit services. These were $15,000 for an internal review of systems and procedures and $13,000 for the assurance of the Annual and Sustainability report. The Company paid $15,000 (2011: $15,000) on behalf of Uniting Growth Fund for an internal review of systems and procedures, $6,580 (2011: $6,580) on behalf of UCA Funds Management Limited in relation to the annual audit of the financial statements

and $2,750 (2011: $2,750) in relation to the audit of the Australian Financial Services Licence. In addition, the Company paid $0 (2011: $47,000 for a feasibility study to scope a possible merger and/or a strategic alliance with Uniting Financial Services (UFS).

note 13 – note to cash flow statementa) Reconciliation of net profit to net cash inflow from

operating activities

2012 $’000

2011 $’000

(LOSS)/PROFIT ATTRIBUTABLE TO INVESTORS 35,557 (33,558)

DECREASE/(INCREASE) IN INVESTMENT IN UCA CASH MANAGEMENT FUND LIMITED 7,762 5,108

(INCREASE) IN ACCRUED INCOME (3,242) (187)

DECREASE/(INCREASE) IN FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (15,953) 26,846

NET CASH FLOW FROM OPERATING ACTIVITIES 24,125 (1,791)

b) Non- cash financing activities During the year distributions to investors totalling $5,484,000 (2011: $3,335,000) were satisfied through the distribution reinvestment plan.

note 14 – events occurring after balance sheet dateOther than the loan from UCA Cash Management Fund Limited, no other significant events have occurred since balance date which would impact on the financial position of the Company disclosed in the balance sheet at 31 December 2012, or the results and cash flows of the Company for the year ended on that date.

note 15 – contingent assets and liabilities and commitmentsThere were no outstanding contingent assets and liabilities or commitments as at 31 December 2012 or 31 December 2011.

98 2012 ANNUAL REPORT: THE YEAR IN REVIEW 99UCA Funds Management Limited

UCA Funds Management Limited ABN 46 102 469 821


uca funds management limited Name changed from Uniting Growth Fund Limited 24 May 2011

A company limited by guarantee, domiciled in the State of Victoria in Australia.


The registered office is:130 Little Collins Street Melbourne, Victoria 3000 Australia

Auditor: Deloitte Touche Tohmatsu550 Bourke Street Melbourne, Victoria 3000 Australia


directors’ reportThe Directors’ present their report on the financial statements of the UCA Funds Management Limited (the “Company”) for the year ended 31 December 2012. The Company has no share capital since it is incorporated as a company limited by guarantee.

directorsThe following persons were directors of the Company during the whole of the year and up to the date of this report:













Principal activitiesThe Company’s principal activity is to act as corporate trustee for the Uniting Growth Fund, which has a financial year ending 30 June. The Company holds an Australian Financial Services Licence (AFSL).

dividendsNo dividends were paid during the year and no dividends have been recommended for payment at year end.

review of operationsNet profit of the Company was nil (2011: nil). The Company earned income from the Uniting Growth Fund of $321,373 (2011:394,325) and paid management fees of $321,373 (2011: $394,325) to The Uniting Church in Australia, Synod of Victoria and Tasmania for administration and investment services provided to the Company. In addition, the Company earned interest of $617 (2011: $600) on an investment which was donated to Uniting Care Share Australia.

significant changes in the state of affairsIn the opinion of directors, there were no significant changes in the state of affairs of the Company that occurred during the year not otherwise disclosed in this report or the financial statements.

matters subsequent to the end of the yearNo matter or circumstance has arisen since 31 December 2012 that has significantly affected, or may significantly affect the operations of the Company, the results of those operations or the state of affairs of the Company in future years.

likely developments and expected resultsFurther information on likely developments in the operations of the Company and the expected results of operations of the Company has not been included in this report as it would be likely to result in unreasonable prejudice to the Company.

environmental regulationThe Company is not subject to any particular or significant environmental regulation under a Commonwealth, State or Territory law.

information on directors

mr richard John carter CitWA, B Com, FTSE, FAusIMM, FAIM, FAICD

Non-executive Director and Chairperson. He is the former Chair of Prahran Mission-UnitingCare, a former Director of BHP Gold Mines Ltd, North Ltd, Orbital Engine Group, Marion Energy Ltd and ERA Ltd, Chair of Consolidated Minerals Ltd, Macmahon Holdings Ltd, Ticor Ltd and a former Chief Executive Officer of BHP Minerals. He is an active member of the Uniting Church and is Chair of the Church Council at Ewing Memorial UC, East Malvern.


Non-executive Director. He is a Partner of Non Executive Management, a Director of Pental Limited, a Director and Treasurer of the National Heart Foundation of Australia (Victorian Division), a member of the Audit and Compliance Committee of the Uniting Church in Australia (Synod of Victoria and Tasmania), a member of the Audit and Risk Committee of the University of Melbourne and a co-trustee of the Ian Rollo Currie Foundation. He is a former Assurance and Advisory Partner of Deloitte.


Non-executive Director. He is Chair of UnitingCare Prahran Mission and a member of the Compliance Committee of Antares Capital Partners Ltd. He is a former Executive Director of Rothschild Australia Asset Management Limited, a former principal of Cameron Ralph Pty Ltd and a former Director of Hancock Natural Resources Group Australasia Pty Limited, Intech Fiduciaries Limited, the Financial Services Council (FSC), the Financial Industry Complaints Service Limited and State Trustees Limited. He is also a former member of the Compliance Committees of Principal Global Investors (Australia) Limited and Spark Infrastructure Group and Chair of the BlackRock Investment Management (Australia) Limited Compliance Committee. He is an active member of the Uniting Church, a member of the Forest Hill Church Council and the Finance & Property Committee, and a member of the VicTas Synod.


Non-executive Director. She currently is General Counsel and Secretary of Victorian Funds Management Corporation. She was a former Director of Yarra Bend Park Trust, BlackRock Investment Management (Australia) Ltd, Foundation Boroondara, Housing Guarantee Fund Limited, National Foundation for Australian Women, Investment Funds Association and Merrill Lynch Staff Super Fund. She was also a Regulatory Affairs Board Committee Member of Investment and Financial Services Association (now Financial Services Council).


Non-executive Director. He is a former managing partner of Coopers & Lybrand. He is a non-executive Director of Goldman Sachs & Partners Australia Pty Ltd and The Walter and Eliza Hall Institute of Medical Research, a former member of the Compliance Committee of Almond Orchards Australia Limited, and a member of the Audit Committee of Nillumbik Shire Council.


Non-executive Director. He is Chair of the City of Melbourne Audit Committee, Consulting Director at Grant Thornton, the former Group General Manager, Audit of Australia and New Zealand Banking Group Limited and a former non-executive Director of ANZ Pension (Uk) Limited. He is a former partner of PricewaterhouseCoopers, where he specialised in Corporate Governance, Risk Management and Internal Audit advisory services.

ms suzanne c norman BBus, BA, CPA, FAICD

(From 16 October 2012 to 6 February 2013)






Non-executive Director . He is a Director of Prime Value Asset Management Ltd, a former Investment Manager of Telstra Super Pty Ltd, a former Director of the Potter Warburg Group and former Group Treasurer of CRA. He is a former External Consultant member of the Investment Committee of EquipSuper.


Non-executive Director. He is also a Director of the Goodman Australia Industrial Fund, and was formerly CEO of Victorian Funds Management Corporation and JP Morgan Investment Management Australia. He is a past president of the Melbourne Society of Financial Analysts and has experience with a number of investment institutions in Australia and overseas.




Non-executive Director. She is a Partner of Non Executive Management. She was a former Chief Executive Officer of Berndale Securities Limited (a subsidiary of Merrill Lynch Australia), former Director of Merrill Lynch Australia and Citigroup Australia. She is a member of the Finance and Investment Committee for the Brotherhood of St Laurence.

directors’ shareholdingsNo director holds shares in the Company.






cOmmittee

a B a B a B a B

R J Carter 8 7 * * 4 3 8 8


D F Hawkey 8 7 5 4 * * 8 6

k A Howard 5 5 2 2 * * * *

R E Male 8 8 5 5 * * 8 8

R G Moore 8 8 5 2 * * * *

S C Norman 2 2 * * * * 2 1

G V Rough 4 3 * * * * 4 4

J C Simkiss 8 8 * * 4 4 * *

S J Taylor 8 7 * * 4 4 3 2

M Walsh * * * * * * * *

G E Wilson 6 5 * * 2 2 * *








insurance of officersDuring the year the Uniting Church in Australia paid a premium of $122,000 (2011: $117,000) to insure all officers of the Church of which the officers of the Company and related bodies corporate form a part.

The officers of the Company covered by the insurance policy include the directors: R J Carter, J Etherington, D F Hawkey, k A Howard, R E Male, R G Moore, S C Norman, G V Rough, J C Simkiss, S J Taylor, M Walsh and G E Wilson. All employees of the Company (who are all employed by the Synod of Victoria and Tasmania) are covered by the insurance policy too. The Company has not otherwise, during or since the financial year, indemnified or agreed to indemnify an officer or auditor of the Company or of any related body corporate against liability incurred as an officer or auditor.



auditors’ independence declarationThe Auditors Independence Declaration as required by Section 307C of the Corporations Act 2001 is set out on page 105.


R J Carter Director

M Walsh Director




Independent Auditor’s Report to the Members of UCA Funds Management Limited

We have audited the accompanying financial report of UCA Funds Management Limited (the “Company”), which comprises the statement of financial position as at 31 December 2012, the statement of comprehensive income, the statement of cash flows and the statement of changes in equity for the year ended on that date, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration as set out on pages 12 to 22.

Directors’ Responsibility for the Financial Report The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In Note 2, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that the financial statements comply with International Financial Reporting Standards.






In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of UCA Funds Management Limited, would be in the same terms if given to the directors as at the time of this auditor’s report.



(a) the financial report of UCA Funds Management Limited is in accordance with the Corporations Act 2001, including:









The Board of Directors UCA Funds Management Limited 130 Little Collins Street MELBOURNE VIC 3000

23 April 2013

Dear Board Members

UCA Funds Management Limited

In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration of independence to the directors of UCA Funds Management Limited.

As lead audit partner for the audit of the financial statements of UCA Funds Management Limited for the financial year ended 31 December 2012, I declare that to the best of my knowledge and belief, there have been no contraventions of:



Yours sincerely




directors’ declarationIn the Directors’ opinion:



(ii) present fairly the Company’s financial position as at 31 December 2012 and its performance, as represented by the results of its operations, changes in equity and its cash flows, for the financial year ended on that date; and

(iii) comply with International Financial Reporting Standards.



R J Carter Director

M Walsh Director



nOteS2012

$2011

$

INCOME


MANAGEMENT FEE RECEIVED FROM RELATED PARTY 3 321,373 394,325

TOTAL INCOME 321,990 394,925

ExPENSES

DONATION TO UNITING CARE SHARE AUSTRALIA 617 600

MANAGEMENT FEE PAID TO RELATED PARTY 3 321,373 394,325

TOTAL ExPENSES 321,990 394,925

NET PROFIT FOR THE YEAR – –






Statement of Financial Position nOteS

2012 $

2011 $

ASSETS

CASH AND CASH EQUIVALENTS 10,000 10,000

TOTAL ASSETS 10,000 10,000

LIABILITIES

SUBORDINATED LOAN FROM RELATED PARTY 10,000 10,000

TOTAL LIABILITIES 10,000 10,000

NET ASSETS – –

EQUITY – –

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

Cash Flow StatementnOteS

2012 $

2011 $



DONATION PAID TO UNITING CARE SHARE AUSTRALIA (617) (600)

MANAGEMENT FEE RECEIVED FROM RELATED PARTY 3 353,510 434,417

MANAGEMENT FEE PAID FROM RELATED PARTY 3 (353,510) (434,417)

NET CASH FLOW FROM OPERATING ACTIVITIES – –

NET CHANGE IN CASH AND CASH EQUIVALENTS – –

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 10,000 10,000

CASH AND CASH EQUIVALENTS AT END OF YEAR 7 10,000 10,000

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


Statement of Changes in Equity

nOteS2012

$2011

$


NET PROFIT – –




The above Statement of changes in equity should be read in conjunction with the accompanying notes

note 1 – general informationThis general purpose financial report covers UCA Funds Management Limited (the “Company”) as an individual entity.

The financial statements were authorised for issue by the Directors on 23 April 2013. The Directors have the power to amend and reissue the financial report.





The financial statements have been prepared under the historical cost convention, as modified by the revaluation of certain financial assets held at fair value with changes in fair value recognised through the statement of comprehensive income.

b) Investment Income Interest income is calculated using the effective interest rate basis. The effective interest method is a method of calculating the amortised cost of a financial asset or financial liability and of allocating the interest income or interest expense over the relevant period.

c) Goods and Services Tax (GST) Where applicable, GST incurred by the Company, that is not recoverable from the Australian Taxation Office, has been recognised as part of the expense to which it applies. Receivables and payables are stated with any

applicable GST in their value.


d) Income Tax The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based on the national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements, and to unused tax losses.

e) Cash and cash equivalents Cash and cash equivalents include cash on hand, deposits held at call at banks and other short-term highly liquid investments.

f ) Functional and presentation currency Items included in the Company’s financial statements are measured using the currency of the primary economic environment in which it operates (the “functional currency”). This is the Australian dollar, which reflects the currency of the economy in which the Company operates. The Australian dollar is also the Company’s presentation currency.

g) New accounting standards and interpretations The Company has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to its operation and that are effective for the current reporting period.


A number of Australian Accounting Standards and Interpretations are in issue but are not effective for the current year end. The reported results and position of the Company will not change on adoption of these pronouncements as they do not result in any changes to the Company’s existing polices. The Company does not intend to adopt any of these pronouncements before their effective dates. These include;


AASB9FinancialInstruments(December2010),AASB2010-7AmendmentstoAustralianAccountingStandardsarisingfromAASB9 AASB 9 is applicable for annual reporting periods beginning on or after 1 January 2013. A revised version of AASB 9 incorporating revised requirements for the classification and measurement of financial liabilities, and carrying over the existing requirements derecognition from AASB 139. This has not affected any of the amounts recognised in the financial statements nor has there been any impact on the presentation in the financial statements.

AASB13FairValueMeasurementandrelatedAASB2011-8AmendmentstoAustralianAccountingStandardsarisingfromAASB13 AASB 13 is applicable for annual reporting periods beginning on or after 1 January 2013. AASB 13 does not change the requirements regarding which items should be measured or disclosed at fair value. This has not affected any of the amounts recognised in the financial statements nor has there been any impact on the presentation in the financial statements.


h) Critical accounting judgements and key sources of estimation uncertainty There have not been any critical accounting judgements or estimations made in the preparation of the financial statements for the year ended.

note 3 – related PartiesInvestors in the retail fund, Uniting Growth Fund, are charged a fee of 1.255% per annum. This fee is collected by UCA Funds Management Limited and transferred (in full) to The Uniting Church in Australia Synod of Victoria and Tasmania as a fee for administration and investment services, in accordance with the management agreement

between these parties, dated 4 April 2003. All transactions between the three entities are considered to be related party transactions.

The loan of $10,000 from UCA Growth Fund Limited is a set amount in order to comply with the Australian Financial Services Licence Number 294147, which was granted to the Company by the Australian Securities and Investments Commission on 11th November 2005. The loan is interest free and is invested in a term deposit with Westpac Banking Corporation.

2012 $

2011 $

MANAGEMENT FEE RECEIVED FROM UNITING GROWTH FUND 321,373 394,325

MANAGEMENT FEE PAID TO UCA GROWTH FUND LIMITED 321,373 394,325

note 4 – key management Personnel compensationThe Company has no employees. All key management

personnel are employed by the Uniting Church in Australia, Synod of Victoria and Tasmania.

a) Directors The names of the persons who were the directors of UCA Funds Management Limited at any time during the year and up to the date of this report were:















The remuneration of the executive director and non-executive directors of UCA Funds Management Limited is set out in the following table:

2012 $

2011 $


OTHER LONG-TERM BENEFITS 325,640 324,973

OTHER LONG-TERM BENEFITS 770 8,365

TOTAL 326,410 333,338


Other long-term benefits include accrued long service leave entitlements.

There are no post-employment benefits, termination benefits or share-based payments applicable.

b) Other key management personnel Except for UCA Funds Management Limited, there were no other persons with responsibility for planning, directing and controlling the activities of the Fund, directly or indirectly during the financial year. During the reporting period, no Director held an account in the Fund (2011: nil).


note 5 – financial risk managementThe Company is exposed to interest rate risk, credit risk and liquidity risk. The Company’s only assets are invested in a term deposit with Westpac Banking Corporation.

The objective of the Company is to act as a Trustee for Uniting Growth Fund. As a condition of holding Australian Financial Services Licence Number 294147, the Company holds a term deposit with Westpac Banking Corporation. The Company also holds a financial liability of equal amount as a result of a subordinated loan provided by UCA Growth Fund Limited (as outlined in Note 3).

a) Interest rate risk The Company’s financial assets are interest-bearing, which expose it to risks associated with the effects of fluctuations in the prevailing levels of market interest rates on its financial position and cash flows. Changes in interest rates will have an impact on the income earned on the term deposit. As the interest is donated to the Uniting Care Share Appeal, changes in interest received will not have any impact on the Company’s net profit. The loan from UCA Growth Fund Limited is non-interest bearing, so that changes in interest rates

will not have an impact on the Company’s financial position. Consequently the Company does not bear any significant interest rate risk.

b) Credit risk The Company is exposed to credit risk through its deposit with Westpac Banking Corporation. The term deposit with Westpac is rated AA.

c) Liquidity risk The deposit with Westpac Banking Corporation is invested for a term of 12 months. The loan from UCA Growth Fund Limited is for an indefinite term. Should the Company be required to repay the loan, the term deposit could be redeemed on demand with a penalty. The penalty is calculated on portion of the term completed and the rate earned can be reduced by up to 3%.

impact On Operating prOFit/net aSSetS attributable tO inveStOrS 2012 2011

Carrying Amount

Interest Rate RiskCarrying Amount

Interest Rate Risk

$ $ $ $ $ $

-75 bps +75 bps -75 bps +75 bps

CASH AND CASH EQUIVALENTS 10,000 (75) 75 10,000 (75) 75

d) Fair values The carrying amounts of the Company’s assets and liabilities at the balance sheet date approximate their fair values.

note 6 – auditors’ remuneration During the year, the following fees were paid or payable for services provided by the auditor.

2012 $

2011 $

AUDIT SERVICES


AUDIT OF THE AUSTRALIAN FINANCIAL SERVICES LICENCE 2,860 2,750

NON-AUDIT SERVICES

OTHER – –

8,594 8,263

The auditor for the year was Deloitte Touche Tohmatsu. The audit fees were paid by UCA Growth Fund Limited, on behalf of UCA Funds Management Limited.

note 7 – note to cash flow statementReconciliation of Cash

For the purposes of the cash flow statement, cash includes deposits held at call with a financial institution and amounts which are readily convertible to cash. Cash at the end of the year comprises the following cash and cash equivalents:

2012 $

2011 $

TERM DEPOSITS 10,000 10,000

TOTAL CASH AND CASH EQUIVALENTS 10,000 10,000

note 8 – events occurring after balance sheet dateNo significant events have occurred since balance date which would impact on the financial position of the Company disclosed in the balance sheet at 31 December 2012, or the results and cash flows of the Company for the year ended on that date.

note 9 – contingent assets and liabilities and commitmentsThere were no outstanding contingent assets and liabilities or commitments as at 31 December 2012 or 31 December 2011.

118 2012 ANNUAL REPORT: THE YEAR IN REVIEW 119Development Fund

Development Fund Uniting Church in Australia – Synod of Victoria and Tasmania


the uniting church in australia – synod of Victoria and tasmania development fund

The head office is: 130 Little Collins Street Melbourne, Victoria 3000 Australia


The Financial Statements are prepared by UCA Cash Management Fund Limited as manager of the Fund on behalf of the Uniting Church in Australia Property Trust (Victoria). The Fund is managed in accordance with a management agreement between UCA Cash Management Fund Limited and The Uniting Church in Australia Property Trust (Victoria). The agreement was renewed on 2 June 2005.





Independent Auditor’s Report to the Investors of The Uniting Church in Australia – Synod of Victoria and Tasmania Development Fund

We have audited the accompanying financial report of The Uniting Church in Australia – Synod of Victoria and Tasmania Development Fund (“the Fund”), which comprises the statement of financial position as at 31 December 2012, the statement of comprehensive income, the cash flow statement and the statement of changes in equity for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and directors’ declaration as set out on pages 5 to 20.

Directors’ Responsibility for the Financial Report

The directors of UCA Cash Management Fund Limited, to whom this responsibility has been delegated by the Uniting Church in Australia Property Trust (Victoria) are responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations), and for such internal control as directors determine is necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error. In Note 2, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that the financial statements comply with International Financial Reporting Standards.

Auditor’s Responsibility Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.



(a) the financial report of The Uniting Church in Australia – Synod of Victoria and Tasmania Development Fund presents fairly, in all material respects, the Fund’s financial position as at 31 December 2012 and its financial performance for the year then ended in accordance with Australian Accounting Standards (including Australian Accounting Interpretations); and

(b) the financial statements also comply with International Financial Reporting Standards as disclosed in Note 2.




statement in relation to development fundIn the opinion of the directors’ of UCA Cash Management Fund Limited:

a) the financial statements and notes set out on pages 123 to 135:

i) comply with Australian Accounting Standards and other mandatory professional reporting requirements;

ii) give a true and fair view of the Fund’s financial position as at 31 December 2012 and its performance for the year ended on that date; and

iii) comply with International Financial Reporting.

b) there are reasonable grounds to believe that the Fund will be able to pay its debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the directors of UCA Cash Management Fund Limited, to whom this responsibility has been delegated by the Uniting Church in Australia Property Trust (Victoria).

R J Carter Director

M Walsh Director



nOteS2012

$’0002011

$’000

INVESTMENT INCOME

INTEREST RECEIVED FROM RELATED PARTIES 7g 5,867 5,699

INTEREST ON LOANS 1,053 669


ExPENSES

LOAN FEE 75 46

DONATION TO SYNOD 7a 482 627

TOTAL ExPENSES 557 673

PROFIT ATTRIBUTABLE TO INVESTORS 6,363 5,695



INCREASE/(DECREASE) IN NET ASSETS ATTRIBUTABLE TO INVESTORS – –








2012 $’000

2011 $’000

ASSETS

INVESTMENT IN UCA CASH MANAGEMENT FUND LIMITED AT CALL 7g 116,008 93,870

ACCRUED INCOME 423 362

GENERAL LOANS 14,377 17,535

EARMARkED LOANS 195 251

RELATED PARTY LOAN 7h 2,340 2,321

TOTAL ASSETS 133,343 114,339

LIABILITIES (ExCLUDING NET ASSETS ATTRIBUTABLE TO INVESTORS) – –

NET ASSETS ATTRIBUTABLE TO INVESTORS 133,343 114,339

LIABILITIES ATTRIBUTABLE TO INVESTORS 4 (133,343) (114,339)

NET ASSETS –


Cash Flow Statement

nOteS2012

$’0002011

$’000


INCOME RECEIVED FROM LOANS 992 693

INTEREST RECEIVED FROM UCA CASH MANAGEMENT FUND LIMITED DEPOSIT 5,867 5,699

LOAN FEE PAID (75) (46)

NET LOAN (ADVANCES)/REPAYMENT 3,196 (8,416)

INVESTMENT IN UCA CASH MANAGEMENT FUND LIMITED (44,263) (30,824)

PROCEEDS FROM DISPOSAL OF INVESTMENT IN UCA CASH MANAGEMENT FUND LIMITED 22,124 22,511

DONATION TO SYNOD (482) (627)

NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES 9a (12,641) (11,010)



WITHHOLDING TAx DEDUCTED (FROM DISTRIBUTIONS PAID TO INVESTORS) (3) (6)

DEPOSITS RECEIVED FROM INVESTORS 49,438 40,663

WITHDRAWALS PAID TO INVESTORS (35,322) (28,214)

NET CASH INFLOW/(OUTFLOW) FROM FINANCING ACTIVITIES 12,641 11,010


CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR – –

CASH AND CASH EQUIVALENTS AT END OF THE YEAR – –




nOteS2012

$’0002011

$’000


NET PROFIT – –




Under Australian Accounting Standards, ‘Net assets attributable to investors’ is classified as a financial liability rather than equity. As a result there was no equity at the start or end of the year.


note 1 – general informationThis general purpose financial report includes the financial statements and notes of the Development Fund (the “Fund”) as an individual entity for the year ended 31 December 2012. The Fund is managed in accordance with a management agreement between UCA Cash Management Fund Limited and The Uniting Church in Australia Property Trust (Victoria). The agreement was renewed on 2 June 2005.

The financial statements were authorised by the Directors’ of UCA Cash Management Fund Limited, to whom this responsibility has been delegated by the Uniting Church in Australia Property Trust (Victoria) on 23 April 2013.

a) Vesting of Assets All assets referred to in these accounts are vested in The Uniting Church in Australia Property Trust (Victoria) which was established under Act 9021 of the Victorian Parliament, effective from 22 June 1977.

b) Investors The Fund is available to Uniting Church members, adherents, congregations and programs and any other individual or organisation that wishes to promote the work of the Church by investing in the Fund.

The objectives of the Fund are to provide an income stream to investors, to protect their capital and to provide competitive returns. The Uniting Church in Australia Property Trust (Victoria) guarantees the capital invested in the Fund.

c) Loans All loans from the Development Fund are guaranteed by The Uniting Church in Australia Property Trust (Victoria).

Loans are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the Fund provides money directly to a debtor with no intention of selling the receivable. These loans are interest bearing. Loans are recorded at amortised cost less any impairment losses

General loans: Made to congregations and programs of the Uniting Church. Loans are for capital works, such as the purchase of land or equipment, construction or renovation of church centres, manses and halls.

Earmarked loans: Any Uniting Church body may arrange for amounts to be deposited in the Development Fund which are earmarked for that body and corresponding

loans can be made as per the conditions above.

note 2 – summary of significant accounting PoliciesThe principal accounting policies applied in the

preparation of these financial statements are set out below. These policies have been consistently applied to all periods presented, unless otherwise stated.

a) Basis of Preparation This general purpose financial report has been prepared in accordance with Australian Accounting Standards and Interpretations and other authoritative pronouncements of the Australian Accounting Standards Board.


Australian Accounting Standards include Australian equivalents to International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the financial report of the Fund, comprising the financial statements and notes hereto complies with International Financial Reporting Standards (IFRS).


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


c) Investments (other than loans)

Classification The Fund’s investments are classified as financial instruments designated at fair value through profit or loss. These include financial assets that are not held for trading purposes and which may be sold. Financial assets designated at fair value through profit or loss at inception are those that are managed and their performance evaluated on a fair value basis in accordance with the Fund’s documented investment strategy.

MeasurementFinancial assets held at fair value through profit or loss are measured initially at fair value excluding any transaction costs that are directly attributable to the acquisition or issue of the financial asset. Transaction costs on financial assets at fair value through profit or loss are expensed immediately. Subsequent to initial recognition, all instruments held at fair value through profit or loss are measured at fair value with changes in their fair value recognised in the statement of comprehensive income. The following represents the basis of valuation for financial reporting purposes:

InvestmentinUCACashManagementFundLimitedThe Fund’s investment in UCA Cash Management Fund Limited is at call. The capital of UCA Cash Management Fund Limited is guaranteed by The Uniting Church in Australia Property Trust (Victoria).

Recognition/derecognition The Fund recognises financial assets on the date it becomes party to the contractual agreement (trade date) and recognises changes in fair value of the financial assets from this date. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or the Fund has transferred substantially all risks and rewards of ownership.


Payments and receipts relating to the purchase of investment securities are classified as cash flows from operating activities, as movements in the fair value in these securities represent the Fund’s main income generating activity.

e) Loans Loans are recorded at amortised cost less any impairment losses.

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

g) Distributions The Fund fully distributes its distributable income to investors. The distributions are recognised as a finance cost in the statement of comprehensive income. Distributions are allocated to investors on 30 June and 31 December each year.

h) Income Tax The Fund is exempt from Income Tax under Section 50-5 of the Income Tax Assessment Act 1997.

i) Goods and Services Tax (GST) Where applicable, GST incurred by the Fund, that is not recoverable from the Australian Taxation Office, has been recognised as part of the expense to which it applies. Receivables and payables are stated with any applicable GST in their value.


j) Donation to Synod The Fund is managed on behalf of The Uniting Church in Australia Property Trust of Victoria and Tasmania. The donation is calculated as the residual of the net amount of interest earned and the amount of interest distributed to investors.

k) Loan Fees The annual loan fee is calculated at 0.50% on the loan balance outstanding at 30 November each year. The fee is paid to The Uniting Church in Australia, Synod of Victoria and Tasmania, as a contribution towards the payment of operating expenses by UCA Cash Management Fund Limited.

l) Impairment All loans from the Development Fund are guaranteed by The Uniting Church in Australia Property Trust (Victoria). Any loans that are impaired are paid out from property settlement monies or directly from The Uniting Church in Australia Synod of Victoria and Tasmania.

m) Rounding off amounts to nearest thousand dollars The Fund is of a kind referred to in Class Order 98/100 (as amended) issued by the Australian Securities and Investments Commission, relating to the rounding off of amounts in the directors’ report and financial statements. Amounts have been rounded off in accordance with that Class Order to the nearest thousand dollars, or in certain cases, to the nearest dollar.

n) New accounting standards and interpretations The Fund has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to its operation and that are effective for the current reporting period.


A number of Australian Accounting Standards and Interpretations are in issue but are not effective for the current year end. The reported results and position of the Fund will not change on adoption of these pronouncements as they do not result in any changes to the Company’s existing polices. The Company does not intend to adopt any of these pronouncements before their effective dates. These include;

AASB9FinancialInstruments(December2010),AASB2010-7AmendmentstoAustralianAccountingStandardsarisingfromAASB9 AASB 9 is applicable for annual reporting periods beginning on or after 1 January 2013. A revised version of AASB 9 incorporating revised requirements for the classification and measurement of financial liabilities, and carrying over the existing requirements derecognition from AASB 139. This has not affected any of the amounts recognised in the financial statements nor has there been any impact on the presentation in the financial statements.

AASB13FairValueMeasurementandrelatedAASB2011-8AmendmentstoAustralianAccountingStandardsarisingfromAASB13AASB 13 is applicable for annual reporting periods beginning on or after 1 January 2013. AASB 13 does not change the requirements regarding which items should be measured or disclosed at fair value. This has not affected any of the amounts recognised in the financial statements nor has there been any impact on the presentation in the financial statements.

AASB1053ApplicationofTiersofAustralianAccountingStandardsandAASB2010-2AmendmentstoAustralianAccountingStandardsarisingfromReducedDisclosureRequirementsAASB 1053 is applicable for annual reporting periods beginning on or after 1 January 2013. AASB 1053 establishes a differential financial reporting framework consisting of two tiers of reporting requirements for general purpose financial statements. This has not affected any of the amounts recognised in the financial statements nor has there been any impact on the presentation in the financial statements.

o) Use of estimates The Fund makes estimates and assumptions that affect the reported amounts of assets and liabilities within the next financial year. Estimates are continually evaluated and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

p) Critical accounting judgments and key sources of estimation uncertainty There have not been any critical accounting judgments or estimations made in the preparation of the financial statements for the year ended.

note 3 – fund operationThe Fund is managed in accordance with a management agreement between UCA Cash Management Fund Limited and The Uniting Church in Australia Property Trust (Victoria). The agreement was renewed on 2 June 2005.


note 4 – net assets attributable to investorsMovements in investor funds during the year were:

2012 $’000

2011 $’000

OPENING BALANCE 114,339 97,633

DEPOSITS 49,438 40,664

WITHDRAWALS (35,322) (28,214)

DISTRIBUTIONS REINVESTED 4,888 4,256

CLOSING BALANCE 133,343 114,339

During the year distributions to investors of $4,888,000 (2011: $4,256,000) were satisfied through the distribution reinvestment plan, $1,472,000 (2011: $1,433,000) was paid to investors and withholding tax deducted from distributions paid to investors was $3,000 (2011: 6,000).

There were no distributions payable at 31 December 2012 (2011: nil).

note 5 – distributions

2012 $’000

2011 $’000

DISTRIBUTION FOR THE SIx MONTHS ENDED 30 JUNE 3,218 2,631

DISTRIBUTION FOR THE SIx MONTHS ENDED 31 DECEMBER 3,145 3,064

TOTAL DISTRIBUTIONS PAID TO INVESTORS 6,363 5,695

note 6 – financial risk managementThe Fund is exposed to a variety of financial risks: market risk (including interest rate risk and other price risk), credit risk and liquidity risk. 87% of the Fund’s assets as at 31 December 2012 are invested in UCA Cash Management Fund Limited (2011:82%); these risks (including measuring and monitoring of the risks) are managed by UCA Cash Management Fund Limited. The remaining 13% (2011: 18%) of the Fund’s assets are loans to congregations and agencies of the Uniting Church in Australia; these risks (including measuring and monitoring of the risks) are managed by the Fund with the policies and procedures approved by management. In addition, the

assets of the Fund (including the loans) is guaranteed by The Uniting Church in Australia Property Trust (Victoria).

The objective of the Fund is to provide investors with competitive returns and to protect their capital by investing in UCA Cash Management Fund Limited.

a) Market Risk Market price risk is the risk that the value of the Fund’s investment in UCA Cash Management Fund Limited will fluctuate as a result of changes in market values. Investors’ capital in the Development Fund is guaranteed by The Uniting Church in Australia Property Trust (Victoria), accordingly market risk is appropriately minimised to investors.

i) Interest rate risk Since the Fund’s interest-bearing securities are all at floating rates, they are exposed to risks associated with the effects of fluctuations in the prevailing levels of market interest rates. The table in note 6 (e) summarises the impact of increases / decreases in official interest rates on the Portfolio’s net assets attributable to unitholders at 31 December 2012. The analysis is based on the assumption that official interest rates increased / decreased by 75 basis points (2011: 75 basis points) with all other variables held constant and that the Fund’s cash and fixed interest securities and loans moved according to the historical correlation with official interest rates.

The interest rate risk disclosures have been prepared on the basis of the Fund’s direct investments and not on a look-through basis for investments held indirectly through other funds. Consequently, the disclosure of interest rate risk in the note may not represent the true interest rate risk profile of the Fund.

The table below summarises the Fund’s exposure to interest rate risks and analyses the Fund’s interest bearing investments into relevant maturity groupings based on the remaining period to the contractual maturity date at the year end date.

2012 FlOating intereSt

3 months or less

$’000

4–12 months

$’000

1–5 years $’000

Over 5 years $’000


$’000Total $’000

FINANCIAL ASSETS

INVESTMENT IN THE UCA CASH MANAGEMENT FUND LIMITED AT CALL 116,008 – – – – 116,008

ACCRUED INCOME – – – – 423 423

GENERAL LOANS 272 975 12 13,118 – 14,377

EARMARkED LOANS – – 75 120 – 195

RELATED PARTY LOAN 2,340 2,340

TOTAL 116,280 975 87 15,578 423 133,343

WEIGHTED AVERAGE INTEREST RATE 5.30% 7.00% 4.87% 6.71% 0.00% 5.36%

2011 FlOating intereSt

3 months or less

$’000

4–12 months

$’000

1–5 years $’000

Over 5 years $’000


$’000Total $’000

FINANCIAL ASSETS

INVESTMENT IN THE UCA CASH MANAGEMENT FUND LIMITED AT CALL 93,870 – – – – 93,870

ACCRUED INCOME – – – – 362 362

GENERAL LOANS 1,716 65 1,992 16,083 – 19,856

EARMARkED LOANS – – 90 161 – 251

RELATED PARTY LOAN 2,321 2,321

TOTAL 95,586 65 2,082 16,244 362 114,339

WEIGHTED AVERAGE INTEREST RATE 5.32% 7.25% 6.97% 6.71% 0.00% 5.52%


ii) Other price risk Other price risk is the risk that the fair value of a financial instrument will fluctuate because of changes in market prices. The Fund is not exposed to other price risk as (a) loans are not subject to other price risk; and (b) the Fund’s investments in the UCA Cash Management Fund Limited are redeemable at par value and the capital investment in the UCA Cash Management Fund Limited is guaranteed by The Uniting Church in Australia Property Trust (Victoria).

b) Credit risk Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. For the reasons outlined below the Directors consider that the Fund’s exposure to credit risk in relation to the loan portfolio is not significant.

Loans which are advanced from the Fund are approved by the Board of Mission and Resourcing (BOMAR) in accordance with the management agreement with UCA Cash Management Fund Limited. The capital of the loans is guaranteed by The Uniting Church in Australia Property Trust (Victoria). Any shortfall in income is normally capitalised and repaid on the maturity of the loan.

Loan to value ratios are not measured because the loans are normally of relatively low values. Arrears are monitored regularly and reported to BOMAR monthly.

As at 31 December 2012 there were 6 loans amounting

to $696,230 (2011: 5 loans amounting to $1,205,183) that were past due or impaired. These loans will be repaid from property settlement monies. As at 31 December 2012 there were a further 4 loans amounting to $509,095 (2011: 5 loans amounting to $2,336,718) that would otherwise be past due or impaired that have renegotiated their terms.

No loans were written down in the current reporting period or the prior period.

c) Liquidity risk Liquidity risk is the risk that the Fund will not be able to meet its liabilities (redemptions from the Fund) as they fall due. Redemptions are payable at call and the funds required are at call from UCA Cash Management Fund Limited. As the majority of the Fund’s investments are in the UCA Cash Management Fund Limited and as these are at call, the Directors consider that the Fund should be able to meet expected levels of withdrawal. This risk is mitigated by the capital in UCA Cash Management Fund Limited being guaranteed by The Uniting Church in Australia Property Trust (Victoria). Refer to table note 6 (a) (i).

d) Fair values The carrying amounts of the Fund’s assets and liabilities at the balance sheet date approximated their fair values.

e) Sensitivity analysis The following table summarises the sensitivity of the Fund’s financial assets to interest rate risk.

impact On Operating prOFit/net aSSetS attributable tO inveStOrS 2012 2011

Carrying Amount Interest Rate Risk


-75 bps +75 bps -75 bps +75 bps

$’000 $’000 $’000 $’000 $’000 $’000

INVESTMENT IN THE UCA CASH MANAGEMENT FUND LIMITED AT CALL 116,008 (870) 870 93,870 (704) 704

GENERAL LOANS 16,717 (125) 125 19,856 (149) 149

EARMARkED LOANS 195 (1) 1 251 (2) 2

TOTAL INCREASE/(DECREASE) 132,920 (996) 996 113,977 (855) 855


2012 2011

Total $’000

Level 1 $’000

Level 2 $’000

Level 3 $’000

Total $’000

Level 1 $’000

Level 2 $’000

Level 3 $’000


INVESTMENT IN CASH PORTFOLIO AT CALL 116,008 116,008 – – 93,870 93,870 – –

TOTAL 116,008 116,008 – – 93,870 93,870 – –


note 7 – related Partiesa) Donation

The Development Fund pays donations to the Synod for the purpose of making grants to congregations. Donations are paid on 30 June and 31 December. The donation is based on the net amount of interest received and the distribution to investors. The amount donated for this reporting period was $482,000 (2011: $627,000).

b) Manager of the Fund The Development Fund is managed in accordance with a management agreement between UCA Cash Management Fund Limited and The Uniting Church in Australia Property Trust (Victoria). The agreement was renewed on 2 June 2005.

c) key management personnel

Directors

The names of the persons who were the Directors of UCA Cash Management Fund Limited at any time during the year and up to the date of this report were:














Other key management personnel

Except for UCA Funds Management, there were no other persons with responsibility for planning, directing and controlling the activities of the Fund, directly or indirectly during the financial year. During the reporting period, no Director held an account in the Fund (2011: nil).

d) key management personnel compensation key Management personnel are remunerated by the Uniting Church in Australia Property Trust (Victoria). Payments made from the Fund to either this entity or the Manager, UCA Cash Management Fund Limited; do not include any amounts attributable to compensation of key management personnel.

e) Other transactions within the Fund Apart from those details disclosed in this note, no key management personnel have entered into any material contract with the Fund since the end of the previous financial year and there were no material contracts involving directors’ interests existing at year end.

f ) Management fees The Development Fund does not pay UCA Cash Management Fund Limited any fees for the administration of the fund.

g) Investment in UCA Cash Management Fund Limited at call The Development Fund invests its cash holdings in UCA Cash Management Fund Limited.

2012 $’000

2011 $’000

INVESTMENT IN UCA CASH MANAGEMENT FUND LIMITED AT CALL 116,008 93,870

INTEREST RECEIVED 5,867 5,699

Maturity analysis: The amount invested with UCA Cash Management Fund Limited is at call.

h) Related party loan The Development Fund provided a loan to The Uniting Church in Australia Property Trust (Victoria).

note 8 – auditors’ remuneration

2012 $

2011 $

AUDIT SERVICES


NON-AUDIT SERVICES

OTHER – –

11,466 11,025

The auditor for the year was Deloitte Touche Tohmatsu. The audit fees were paid by UCA Cash Management Fund Limited, on behalf of the Development Fund.

note 9 – note to the cash flow statement a) Reconciliation of net profit/(loss) to net cash inflow/

(outflow) from operating activities

2012 $’000

2011 $’000


CHANGE IN OPERATING ASSETS AND LIABILITIES

(INCREASE)/DECREASE IN INVESTMENT IN UCA CASH MANAGEMENT FUND LIMITED (22,138) (8,313)

DECREASE/(INCREASE) IN ACCRUED INCOME (61) 24

DECREASE/(INCREASE) IN LOANS 3,195 (8,416)

NET CASH FLOW FROM OPERATING ACTIVITIES (12,641) (11,010)

b) Non-cash financing activities During the year distributions to investors totalling $4,888,000 (2011: $4,262,000) were satisfied through the distribution reinvestment plan.

note 10 – events occurring after balance sheet dateNo significant events have occurred since balance date which would impact on the financial position of the Fund disclosed in the balance sheet at 31 December 2012, or the results and cash flows of the Fund for the year ended on that date.


136 2012 ANNUAL REPORT: THE YEAR IN REVIEW 137Funeral Fund

Funeral Fund Uniting Church in Australia – Synod of Victoria and Tasmania Funeral Fund (the “Fund”)


the uniting church in australia – synod of Victoria and tasmania

The head office is:

130 Little Collins Street Melbourne, Victoria 3000 Australia


The financial statements are prepared by UCA Cash Management Fund Limited as manager of the Fund on behalf of the Uniting Church in Australia Property Trust (Victoria). The Fund is managed in accordance with a management agreement between UCA Cash Management Fund Limited and The Uniting Church in Australia Property Trust (Victoria). The agreement was renewed on 2 June 2005.





Independent Auditor’s Report to the Investors of The Uniting Church in Australia – Synod of Victoria and Tasmania Funeral Fund

We have audited the accompanying financial report of The Uniting Church in Australia – Synod of Victoria and Tasmania Funeral Fund (the “Fund”), which comprises the statement of financial position as at 31 December, 2012, the statement of comprehensive income, the statement of cash flows and the statement of changes in equity for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and director’s declaration as set out on pages 5 to 18.

Director’s Responsibility for the Financial Report

The directors of UCA Cash Management Fund Limited, to whom this responsibility has been delegated by the Uniting Church in Australia Property Trust (Victoria) are responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations), and for such internal control as the Director’s determine is necessary to enable the preparation and fair presentation of the financial report that is free from material misstatement, whether due to fraud or error. In Note 2, the Director’s also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that the financial statements comply with International Financial Reporting Standards.

Auditor’s Responsibility Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Director’s, as well as evaluating the overall presentation of the financial report.



(a) the financial report of The Uniting Church in Australia – Synod of Victoria and Tasmania Funeral Fund presents fairly, in all material respects, the Fund’s financial position as at 31 December 2012 and its financial performance for the year then ended in accordance with Australian Accounting Standards (including Australian Accounting Interpretations); and

(b) the financial statements also comply with International Financial Reporting Standards as disclosed in Note 2.




statement in relation to funeral fundIn the opinion of the directors’ of UCA Cash Management Fund Limited:

a) the financial statements and notes set out on pages 141 to 151:

i) comply with Australian Accounting Standards and other mandatory professional reporting requirements;

ii) give a true and fair view of the Fund’s financial position as at 31 December 2012 and its performance for the financial year ended on that date; and


b) there are reasonable grounds to believe that the Fund will be able to pay its debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the directors of UCA Cash Management Fund Limited, to whom this responsibility has been delegated by the Uniting Church in Australia Property Trust (Victoria).

R J Carter Director

M Walsh Director



nOteS2012

$2011

$

INVESTMENT INCOME

INTEREST RECEIVED FROM RELATED PARTIES 7g 208,704 215,980


ExPENSES

DONATION TO SYNOD 7a 18,721 29,412

TOTAL ExPENSES 18,721 29,412




INCREASE/(DECREASE) IN NET ASSETS ATTRIBUTABLE TO INVESTORS – –








2012 $

2011 $

ASSETS

INVESTMENT IN UCA CASH MANAGEMENT FUND LIMITED AT CALL 7g 4,134,111 3,726,447

TOTAL ASSETS 4,134,111 3,726,447

LIABILITIES (ExCLUDING NET ASSETS ATTRIBUTABLE TO INVESTORS) – –

NET ASSETS ATTRIBUTABLE TO INVESTORS 4,134,111 3,726,447

LIABILITIES ATTRIBUTABLE TO INVESTORS 4 (4,134,111) (3,726,447)

NET ASSETS – –


Cash Flow Statement

nOteS2012

$2011

$


INTEREST RECEIVED FROM UCA CASH MANAGEMENT FUND LIMITED 208,704 215,980

INVESTMENT IN UCA CASH MANAGEMENT FUND LIMITED (569,360) (495,845)

PROCEEDS FROM THE DISPOSAL OF INVESTMENT IN UCA CASH MANAGEMENT FUND LIMITED 161,696 175,624

DONATION TO SYNOD (18,721) (29,412)

NET CASH OUTFLOW FROM OPERATING ACTIVITIES 9a (217,681) (133,653)




DEPOSITS RECEIVED FROM INVESTORS 411,594 364,532

NET CASH INFLOW FROM FINANCING ACTIVITIES 217,681 133,653


CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR – –

CASH AND CASH EQUIVALENTS AT END OF THE YEAR – –




nOteS2012

$2011

$


NET PROFIT – –




Under Australian Accounting Standards, ‘Net assets attributable to investors’ is classified as a financial liability rather than equity. As a result there was no equity at the start or end of the year.


note 1 – general informationThis general purpose financial report includes the financial statements and notes of the Funeral Fund (the “Fund”) as an individual entity for the year ended 31 December 2012. The Fund is managed in accordance with a management agreement between UCA Cash Management Fund Limited and The Uniting Church in Australia Property Trust (Victoria). The agreement was renewed on 2 June 2005.

The financial statements were authorised by the Directors’ of UCA Cash Management Fund Limited, to whom this responsibility has been delegated by the Uniting Church in Australia Property Trust (Victoria) on 23 April 2013.

The objectives of the Fund are to provide an income stream to investors, to protect their capital and to provide competitive returns. The Uniting Church in Australia Property Trust (Victoria) guarantees the capital invested in the Fund.

a) Vesting of Assets All assets referred to in these accounts are vested in The Uniting Church in Australia Property Trust (Victoria) which was established under Act 9021 of the Victorian Parliament, effective from 22 June 1977.

b) Investors Under Centrelink and the Department of Veterans’ Affairs, individuals are entitled to invest up to $11,250 prior to 31 December 2011 and $11,500 after 1 July 2012 in a funeral fund, subject to certain conditions, with the amount being exempt from Centrelink and the Department of Veterans’ Affair’s income and assets tests. The threshold is adjusted each July in line with movements in the cost of living.

The Fund is available to Uniting Church members, adherents and any other individuals who wish to save for funeral expenses and to promote the work of the Church by investing in the Fund.

Investors’ funds mature on the date of death. The amount due to be distributed to investors is calculated daily and allocated to the members’ accounts half-yearly.


a) Basis of Preparation This general purpose financial report has been prepared in accordance with Australian Accounting Standards and Interpretations and other authoritative pronouncements of the Australian Accounting Standards Board.


Australian Accounting Standards include Australian equivalents to International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the financial report of the Fund, comprising the financial statements and notes hereto complies with International Financial Reporting Standards (IFRS).


b) Investment Income Interest income is calculated using the effective interest rate basis. The effective interest method is a method of calculating the amortised cost of a financial asset or financial liability and of allocating the interest income or interest expense over the relevant period.


c) Financial Assets held at fair value through profit or loss

ClassificationThe Fund’s investments are classified as financial instruments designated at fair value through profit or loss. These include financial assets that are not held for trading purposes and which may be sold. Financial assets designated at fair value through profit or loss at inception are those that are managed and their performance evaluated on a fair value basis in accordance with the Fund’s documented investment strategy.

MeasurementFinancial assets held at fair value through profit or loss are measured initially at fair value excluding any transaction costs that are directly attributable to the acquisition or issue of the financial asset. Transaction costs on financial assets at fair value through profit or loss are expensed immediately. Subsequent to initial recognition, all instruments held at fair value through profit or loss are measured at fair value with changes in their fair value recognised in the statement of comprehensive income. The following represents the basis of valuation for financial reporting purposes:

InvestmentinUCACashManagementFundLimited The Fund’s investment in UCA Cash Management Fund Limited is at call. The capital of UCA Cash Management Fund Limited is guaranteed by The Uniting Church in Australia Property Trust (Victoria).

Recognition/derecognition The Fund recognises financial assets on the date it becomes party to the contractual agreement (trade date) and recognises changes in fair value of the financial assets from this date. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or the Fund has transferred substantially all risks and rewards of ownership.


Payments and receipts relating to the deposit of funds into UCA Cash Management Fund Limited are classified as cash flows from operating activities, as movements in the fair value in these securities represent the Fund’s main income generating activity.

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

f ) Distributions The Fund fully distributes its distributable income to investors and reinvests these amounts into the Fund. The distributions are recognised as a finance cost in the statement of comprehensive income. Distributions are allocated to investors on 30 June and 31 December each year. The distributions are paid to investors upon full redemption from the Fund.

g) Income Tax The Fund is exempt from Income Tax under Section 50-5 of the Income Tax Assessment Act 1997.

h) Goods and Services Tax (GST) Where applicable, GST incurred by the Fund, that is not recoverable from the Australian Taxation Office, has been recognised as part of the expense to which it applies. Receivables and payables are stated with any applicable GST in their value.


i) Donation to Synod The Fund is managed on behalf of The Uniting Church in Australia, Synod of Victoria and Tasmania (the “Synod”). The donation is calculated as the residual of the net amount of interest earned from the UCA Cash Management Fund Limited and the amount of interest distributed to investors.

j) New accounting standards and interpretations The Fund has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to its operation and that are effective for the current reporting period.


A number of Australian Accounting Standards and Interpretations are in issue but are not effective for the current year end. The reported results and position of the Fund will not change on adoption of these pronouncements as they do not result in any changes to the Company’s existing polices. The Company does not intend to adopt any of these pronouncements before their effective dates. These include;

AASB9FinancialInstruments(December2010),AASB2010-7AmendmentstoAustralianAccountingStandardsarisingfromAASB9AASB 9 is applicable for annual reporting periods beginning on or after 1 January 2013. A revised version of AASB 9 incorporating revised requirements for the classification and measurement of financial liabilities, and carrying over the existing requirements derecognition from AASB 139. This has not affected any of the amounts recognised in the financial statements nor has there been any impact on the presentation in the financial statements.

AASB13FairValueMeasurementandrelatedAASB2011-8AmendmentstoAustralianAccountingStandardsarisingfromAASB13 AASB 13 is applicable for annual reporting periods beginning on or after 1 January 2013. AASB 13 does not change the requirements regarding which items should be measured or disclosed at fair value. This has not affected any of the amounts recognised in the financial statements nor has there been any impact on the presentation in the financial statements.


k) Use of estimates The Fund makes estimates and assumptions that affect the reported amounts of assets and liabilities within the next financial year. Estimates are continually evaluated and other factors, including expectations of future events that are believed to be reasonable under

the circumstances.

l) Critical accounting judgments and key sources of estimation uncertainty There have not been any critical accounting judgments or estimations made in the preparation of the financial statements for the year ended.

note 3 – fund operationThe Fund is managed in accordance with a management agreement between UCA Cash Management Fund Limited and The Uniting Church in Australia Property Trust (Victoria). The agreement was renewed on 2 June 2005.

note 4 – net assets attributable to investorsMovements in investors’ funds during the year were:

2012 $

2011 $

OPENING BALANCE 3,726,447 3,406,226

DEPOSITS 411,594 364,532

DISTRIBUTIONS REINVESTED 188,506 184,564


CLOSING BALANCE 4,134,111 3,727,447

During the year distributions paid to investors of $188,506 (2011: $184,564) were satisfied through the distribution reinvestment plan and $1,477 (2011: $2,004) paid to deceased accounts.


note 5 – distributions allocated to investors

2012 $

2011 $

THE DISTRIBUTIONS WERE ALLOCATED AS FOLLOWS:

DISTRIBUTION FOR THE SIx MONTHS ENDED 30 JUNE 98,190 87,354

DISTRIBUTION FOR THE SIx MONTHS ENDED 31 DECEMBER 91,793 99,214

TOTAL DISTRIBUTIONS ALLOCATED TO INVESTORS 189,983 186,568

There were no distributions payable at 31 December 2012 (2011: nil)

note 6 – financial risk managementThe Fund is exposed to a variety of financial risks: market risk (including interest rate risk), credit risk and liquidity risk. As the total assets of the Fund are invested in UCA Cash Management Fund Limited, these risks (including measuring and monitoring of the risks) are managed by UCA Cash Management Fund Limited. In addition the assets of the Funeral Fund is invested in UCA Cash Management Fund Limited which is guaranteed by The Uniting Church in Australia Property Trust (Victoria).

The Fund’s objective is to enable investors to save for their funeral expenses and to protect their capital by investing in UCA Cash Management Fund Limited, a capital guaranteed product.

a) Market Risk Market price risk is the risk that the value of the Fund’s investment in UCA Cash Management Fund Limited will fluctuate as a result of changes in market values. Investors’ capital in the Funeral Fund are guaranteed by The Uniting Church in Australia Property Trust (Victoria), accordingly market risk is appropriately minimised to investors.

i) Interest rate risk The Fund’s interest-bearing assets expose it to risks associated with the effects of fluctuations in the prevailing levels of market interest rates on its financial position and cash flows. The Fund’s assets are all floating rate interest bearing investments. The risk of fluctuations in interest rates is limited to

the income payable to investors. The table in note 6 (e) summarises the impact of increases / decreases in official interest rates on the Portfolio’s net assets attributable to unitholders at 31 December 2012. The analysis is based on the assumption that official interest rates increased / decreased by 75 basis points (2011: 75 basis points) with all other variables held constant, and that the Fund’s cash and fixed interest securities and loans moved according to the historical correlation with official interest rates.

The interest rate risk disclosures have been prepared on the basis of the Fund’s direct investments and not on a look-through basis for investments held indirectly through other funds. Consequently, the disclosure of interest rate risk in the note may not represent the true interest rate risk profile of the Fund (on a look through basis).

The Fund’s exposure to interest rate risk and the weighted average effective interest rate is set out below:

2012 $

2011 $

FINANCIAL ASSETS 4,134,111 3,726,447

WEIGHTED AVERAGE EFFECTIVE INTEREST RATE 5.25% 5.91%

All of the Fund’s assets have floating interest rates and all of the assets are at call.

ii) Other price risk Other price risk is the risk that the fair value of a financial instrument will fluctuate because of changes in market prices. The Fund is not subject to other price risk because the Fund’s assets are invested in UCA Cash Management Fund Limited and all investments are redeemable at par value. The capital investment in the UCA Cash Management Fund Limited is guaranteed by The Uniting Church in Australia Property Trust (Victoria).

b) Credit risk Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The Fund’s exposure to credit risk is limited to its investment in UCA Cash Management Fund Limited. The capital is guaranteed by The Uniting Church in Australia Property Trust (Victoria).

c) Liquidity risk Liquidity risk is the risk that the Fund will not be able to meet its liabilities (redemptions from the Fund) as they fall due. Redemptions are payable on the death of an investor and the funds required to meet such redemptions are at call from UCA Cash Management

Fund Limited. This risk is mitigated by all investments in UCA Cash Management Fund Limited being at call and the capital being guaranteed by The Uniting Church in Australia Property Trust (Victoria).

d) Fair values The carrying amounts of the Fund’s assets and liabilities at the balance sheet date approximated their fair values.

e) Sensitivity analysis The following table summarises the sensitivity of the Fund’s financial assets and financial liabilities to interest rate risk. Sensitivity has been determined on the assumption that all other variables remain constant.

impact On Operating prOFit/lOSS net aSSetS attributable tO inveStOrS 2012 2011



-75 bps +75 bps -75 bps +75 bps

$ $ $ $ $ $

INVESTMENT IN UCA CASH MANAGEMENT FUND LIMITED AT CALL 4,134,111 (31,006) 31,006 3,726,447 (27,948) 27,948


2012 2011

Total $

Level 1 $

Level 2 $

Level 3 $

Total $

Level 1 $

Level 2 $

Level 3 $


INVESTMENT IN UCA CASH MANAGEMENT FUND LIMITED AT CALL 4,134,111 4,134,111 – – 3,726,447 3,726,447 – –

TOTAL 4,134,111 4,134,111 – – 3,726,447 3,726,447 – –



note 7 – related Partiesa) Donations

The Funeral Fund pays donations to the Synod for the purpose of making grants to congregations. Donations are paid on 30 June and 31 December. The donation is based on the net amount of interest received and the distribution to investors. The amount donated for this reporting period was $18,721 (2011: $29,412).

b) Manager of the Fund The Funeral Fund is managed in accordance with a management agreement between UCA Cash Management Fund Limited and The Uniting Church in Australia Property Trust (Victoria). The agreement was renewed on 2 June 2005.

c) key management personnel

Directors

The names of the persons who were the directors of UCA Cash Management Fund Limited at any time during the year and up to the date of this report were:













Other key management personnel

Except for UCA Cash Management Fund Limited, there were no other persons with responsibility for planning, directing and controlling the activities of the Fund, directly or indirectly during the financial year. During the reporting period, no Director held an account in the Fund (2011: nil).

d) key management personnel compensation key management personnel are remunerated by the Uniting Church in Australia Property Trust (Victoria). Payments made from the Fund to either this entity or the Manager, UCA Cash Management Fund Limited do not include any amounts attributable to compensation of key management personnel.

e) Other transactions within the Fund Apart from those details disclosed in this note, no key management personnel have entered into any material contract with the Fund since the end of the previous financial year and there were no material contracts involving directors’ interests existing at year end.

f ) Management fees The Funeral Fund does not pay UCA Cash Management Fund Limited any fees for the administration of the Fund.

g) Investment in UCA Cash Management Fund Limited at call The Funeral Fund invests its cash holdings in UCA Cash Management Fund Limited.

2012 $

2011 $

INVESTMENT IN UCA CASH MANAGEMENT FUND LIMITED AT CALL 4,134,111 3,726,447

INTEREST RECEIVED 208,704 215,980

Maturity analysis: The amount invested with UCA Cash Management Fund Limited is at call.

note 8 – auditors’ remuneration

2012 $

2011 $

AUDIT SERVICES


NON-AUDIT SERVICES

OTHER – –

5,733 5,513

The auditor for the year was Deloitte Touche Tohmatsu. The audit fees were paid by UCA Cash Management Fund Limited, on behalf of the Funeral Fund.

note 9 – note to cash flow statement a) Reconciliation of net profit/(loss) to net cash inflow/

(outflow) from operating activities

2012 $

2011 $


CHANGES IN OPERATING ASSETS AND LIABILITIES:

(INCREASE) IN UCA CASH MANAGEMENT FUND LIMITED AT CALL (407,664) (320,221)

NET CASH OUTFLOW FROM OPERATING ACTIVITIES (217,681) (133,653)

b) Significant non-cash items

2012 2011

DISTRIBUTION REINVESTED 188,506 184,564

During the year distributions paid to investors were $189,983 (2011: $186,568) of which $188,506 (2011: $184,564) was satisfied through the distribution reinvestment plan and $1,477 (2011: $2,004) was paid to deceased accounts.

note 10 – events occurring after balance sheet dateNo significant events have occurred since balance date which would impact on the financial position of the fund disclosed in the balance sheet at 31 December 2012, or the results and cash flows of the fund for the year ended on that date.



Central to our philosophy is a commitment to open dialogue between ourselves and our stakeholders, which is why your feedback is important to us.

So please contact:

leeanne lukaitis

Telephone (03) 9521 5453 or email [email protected]

FEEDBACk

154 2012 ANNUAL REPORT: THE YEAR IN REVIEW

UCA Funds Management 130 Little Collins Street Melbourne Victoria Australia 3000

Telephone (03) 9251 5450 Toll Free 1800 996 888 Facsimile (03) 9650 7074 Email [email protected]

2012 ANNUAL REPORT: THE YEAR IN REVIEW - U Ethical · 2019-04-12 · a commitment to the core...

Documents

Transcript of 2012 ANNUAL REPORT: THE YEAR IN REVIEW - U Ethical · 2019-04-12 · a commitment to the core...