Annual Performance Statement 2018-19
Introductory statement
We, the Board of Directors of the AAF Company, as the accountable authority of the Trust Funds present the Company’s Annual Performance Statement 2018-19. The reporting of the actual performance of the Company, in the annual report against the planned performance information outlined in its corporate plan is an important part of the Commonwealth’s performance framework, established under the PGPA Act 2013.
Purpose
The purpose outlined in the AAF Company Corporate Plan 2018-19 is to provide amenity and related services to Army members and their families not normally provided at Departmental level. It is achieved through amenity grants, loans, affordable holiday accommodations, and sound financial investment for self sustainment.
Results
Amenity related services
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Performance criterion Provide financial assistance through a loan or grant to fund unit amenity initiatives not normally provided at Departmental level. |
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Criterion source Corporate Plan 2018-19. Activity 1 |
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Results against performance criterion 1.During the reporting period Army Amenities Fund sponsored 30 grant bids from units totalling $84,358. The grants ranged from $2,000 up to $19,000 and overall were well within available funds. The newly launched Grant Committee in July 2018 has promoted the availability of amenity funding and resulted in an increase in grant applications. 2.For this reporting period funds have been used to support sponsor the amenity costs for sporting and adventure training activities, purchase of new social club equipment and sponsorship support for social events attended by Army members, their families and Defence communities. |
Holiday facilities
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Performance criterion Provide below market price quality accommodation for Army members and eligible persons through Trust-owned holiday properties. |
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Criterion source Corporate Plan 2018-19. Activity 2 |
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Results against performance criterion
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Location |
Target occupancy % |
Actual occupancy % |
Army occupancy % |
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Coogee |
65 |
51 |
56 |
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Goolwa |
60 |
51 |
24 |
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Docklands |
80 |
61 |
71 |
Financial Investment
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Performance criterion Conduct sound financial investment strategies that ensures sufficient capital is available to meet the operational goals and the Trusts remain self-sustaining. |
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Criterion source Corporate Plan 2018-19. Activity 3 |
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Results against performance criterion 1.The Company’s (as trustee for the Army Amenity Funds) investment portfolio currently totals $8,905,860 compared to $8,715,948 in 2017-18. Overall, the operational goals have been met and income generated from the investment portfolio will ensure available cash for future years of operation. a)The investment strategy approach is to split the investment portfolio between 70 per cent growth and 30 per cent defensive components. b) The ‘Administrative’ component of the investment portfolio is to generate sufficient income to fund 'normal' operations. $200,000 was withdrawn for operations and this amount has been transferred from Fiducian portfolio to cover future operational withdrawals. Fiducian growth was reported at $16,052 in this reporting period. While Asgard reported a strong capital growth in the amount of $173,860 equates to an annual net return of 10 per cent. 2.The Company’s (as trustee for the Messes Trust Fund) term deposit provided an interest return of $16,970 at this reporting period. Total deposit balance is $701,856 as at 30 June 2019. |
Analysis of performance against purpose
Holiday facilities recorded an operational loss and, as such, a negative return on accommodation investment. However, a 3 per cent land appreciation was reported for the Goolwa’s properties. The Company’s financial investment portfolio experienced downward pressure in the second quarter and third quarter, however a bounce back in the final quarter. Overall a positive return for the Company’s investment portfolio for the reporting period.
Positive returns from the investment portfolio and asset appreciation were offset by a negative return of holiday operations. With proactive and targeted marketing, it is anticipated operational outcomes for holiday facilities will move towards a positive outcome.
The Messes Trust Fund was non-operational in this reporting period and its closure will be explored in 2019-20.
Other contributing factors that have enabled the performance of the Company to achieve its purpose as set out in its Corporate Plan 2018-19 are:-
- strategic direction and decisions of the Board, and the oversight of the Audit Committee;
- the delivery of its activities through the secretariat’s management of operations ensured;
- self-sustainment achieved through investment portfolio continuing to generate growth to cover annual operational costs with reserves for the future needs of the Trusts;
- the environment that the Company as the trustee operates in has not experienced any changes that would significantly impact on operations; and
- the ability to mitigate any risk during the reporting period.
Conclusion
The Directors are responsible under the PGPA Act 2013 for the preparation and content of the report of operations in accordance with the Public Governance, Performance and Accountability (Financial Reporting) Rule 2015. This report of operations is made in accordance with a resolution of the Directors and is signed for and on behalf of the Directors.
Visit
https://www.transparency.gov.au/annual-reports/aaf-company/reporting-year/2018-2019-6