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Directors Report

Minister for Veterans and Defence Personnel

Dear Minister

The Directors of the AAF Company have the honour to submit their report of operations for the year ended 30 June 2019.

Enabling legislation and responsible Minister

The AAF Company was incorporated on 17 July 1987, to administer the assets of the Army Amenities Fund and the Messes Trust Fund, and is subject to the Corporations Act 2001.

The AAF Company operates within the Defence portfolio, reporting to the Minister for Veterans and Defence Personnel (the Minister), at the date of this report.

Public Governance, Performance and Accountability Act 2013 and Australian Charities and Not-for-profits Commission Act 2012

The AAF Company also complies with the requirements of the Public Governance, Performance and Accountability Act 2013 (PGPA) and Not-for-profits Commission Act 2012 with respect to:

  • reporting to Ministers and Parliament;
  • contents of Annual Report;
  • audit of the AAF Company’s financial statements by the Auditor- General;
  • banking and investment powers of authority;
  • general policies of the Australian Government; and
  • conduct of directors and officers, including the civil consequences of any breach of their duties by the directors and officers.

Accountable Authority

The following persons formed the accountable authority (Board) of the AAF Company during or since the end of the financial year:

Board of Directors

Appointed Date

Resigned Date

Mr G.E. Warner

27 Jan 2016

23 Aug 2018

Brigadier C. Pearce

29 Mar 2017

19 Nov 2018

Brigadier L.S. Wilton (Chair)

15 Feb 2016

21 Jan 2019

Colonel J. King

16 Jun 2016

21 Jan 2019

Mr K. Morris

13 Sep 2018

15 Mar 2019

Brigadier W.B. Stothart(Chair)

21 Jan 2019

Colonel A.R. Fielding

20 Jun 2016

Colonel M.R. Kennedy

05 May 2017

Colonel F.C. Curtis

16 Apr 2019

Colonel K.M. Skinner

16 Apr 2019

Warrant Officer G.S. McFarlane

27 Aug 2018

Warrant Officer Class One K. Felmingham

16 Apr 2019

Statement of Intent

The Board of Directors of the AAF Company will:

  • manage the assets of the AAF Company in a manner which ensures financial independence and long term sustainability;
  • encourage continuous improvement practices to maximise opportunities that will ensure its long term sustainability;
  • provide the Minister with annual financials and compliance reports, with copies to be provided to the Secretary for Defence, the Chief of the Defence Force and the Chief of Army;
  • adopt best practice governance principles and implement risk management strategies as determined by the Commonwealth, as appropriate for the operation of small agencies;
  • identify and manage all actual and perceived conflicts of interest, advising the Minister of any significant issues as they arise; and
  • demonstrate compliance with appropriate government policy and directions.

Organisational structure

The AAF Company is a Commonwealth Company and is managed by the Board of Directors (the Board), in accordance with the Company’s Constitution, appointed by the Chief of Army and the Chair of the Board. The AAF Company head office is located in Canberra, ACT.

Review of operations and future prospects

Operations comprised the provision of discounted holiday accommodations for Army members, their families and other eligible persons. Also to provide financial support to units to assist in the provision of amenities to Army members.

There have not been any significant activities or changes that have occurred during this reporting period that have significant affected or may affect the AAF Company operations.

Reviews by outside bodies

The AAF Company financial statements are subject to audit by the Australian National Audit Office.

Significant non-compliance issues with finance law

Section 17AG and 17BE of the PGPA Rule require that Commonwealth entities’ annual reports must include a statement of any significant non-compliance issues notified to the responsible Minister under paragraph 19(1)(e) of the PGPA Act during the reporting period and outline the actions taken to remedy the non-compliance. There have not been any non-compliance issues in this reporting period.

Board of Directors

  • The Board comprises serving members of the Army and Defence Australian Public Service employee.
  • Board members are not entitled to any remuneration.
  • Directors are expected to comply with the conflict of interest policy and declare any potential conflict according to the policy at the start of each Board meeting.

During 2018-19 the Board met four times including an AGM. These meetings were held in Canberra.

Table 1: Board member’s attendance at meetings

Name

Responsibility

Meeting

Attended

Mr G.E. Warner

Chair Audit Committee

0#

Brigadier C. Pearce

Director

1#

Brigadier L.S. Wilton

Board Chair

3#

Colonel J. King

Director

3#

Mr K. Morris

Director

0#

Brigadier W.B. Stothart

Board Chair

1

Colonel A.R. Fielding

Director

4

Colonel M.R. Kennedy

Director

4

Colonel F.C. Curtis

Director

1

Colonel K.M. Skinner

Director

1

Warrant Officer G.S. McFarlane

Director

3

Warrant Officer Class One K. Felmingham

Director

1

# Resigned during the 2018-19 financial year.

Audit Committee

In accordance with the requirements of the PGPA Act the Company has established an Audit Committee. The primary objectives of the Audit Committee are:

  • improving the effectiveness and efficiency of the Company’s internal control framework;
  • ensuring that the Company has appropriate risk identification and management practices in place;
  • improving the objectivity and reliability of financial reporting;
  • ensuring that the Company has adequate procedures on matters of audit independence’ and
  • ensuring the Board complies with all governance and other obligations.

Freedom of Information (FOI)

There have not been any FOI enquiries were received during the reporting period.

Indemnities and insurance premiums for officers

The AAF Company has coverage with COMCOVER for Association Liability Insurance. Where applicable, the insurance cover is provided for all Directors, staff and contractors. No indemnity has been provided to an officer against any potential liability for legal costs.

Risk management and fraud control

The Directors have established a risk management and fraud control plan in line with the Commonwealth’s endeavours to make risk management an integral part of everyday business practice. The AAF Company does not receive any funding from the Commonwealth and therefore not to apply the promulgated Commonwealth Risk Management Policy. However, the Directors have adopted the Policy as best practice standards for fraud control and have implemented fraud control arrangements commensurate with the AAF Company’s activities.

Work Health and Safety (WH&S)

Staff supporting the operations of the AAF Company are employed by the Commonwealth - Department of Defence and, as such, fall within the policies and procedures of the Department for WH&S purposes.