Treasury and Investment Services

Presentation 2013 1

Uniting for the Common GoodNeil KingExecutive Director

Treasury and Investment Services

Presentation 2013 2

Treasury and Investment

Services Umbrella

Investing and Managing funds with advisory, authorisation and oversight in

matters relating to investments and borrowing in all parts of the Synod

• Uniting Financial Services (Brand name)

• Compulsory Borrowing through UCTAL (minute 114/09SC)

• Community of Faith Investments (UCAPT)

• Investment Services

• UCTAL • Treasury Services

• Ethical Investing • Property Development Advice to Church Orgs

• Compulsory Deposits (minute 52/00C) • Financial Risk Advisory Services

Investments must involve numbers …

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280 11k

5

1

152m

165m

722m1.019bn

100m

225m

171m

30m

3

4.8m

9

5+1

421, 950

540

35m110m

300m

Our Story…

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Regulatory: APRA, ACNC, (UBIT) Aged Care, Gonski( Schools), WHS, IFRS

How we respond:Faith, Hope, Love, Stewardship, Integrity and Honour

Economic & Other: T and I beliefs:

GFC lingering, Europe, Election, Resources, Basel 3, Investment Returns

To be Purposeful, Prudent, Inclusive and Generous

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Synod 2011 mentioned challenges and re-imagining …

Presentation 2013 6

1 Cor. 12:15-23 15 Now if the foot should say, “Because I am not a hand, I do not belong to the body,” it would not for that reason stop being part of the body. 16 And if the ear should say, “Because I am not an eye, I do not belong to the body,” it would not for that reason stop being part of the body. 17 If the whole body were an eye, where would the sense of hearing be? If the whole body were an ear, where would the sense of smell be? 18 But in fact God has placed the parts in the body, every one of them, just as he wanted them to be. 19 If they were all one part, where would the body be? 20 As it is, there are many parts, but one body.21 The eye cannot say to the hand, “I don’t need you!” And the head cannot say to the feet, “I don’t need you!” 22 On the contrary, those parts of the body that seem to be weaker are indispensable, 23 and the parts that we think are less honourable we treat with special honour.

Synod 2013 re-imagining …

OR

Why a smaller distribution?

• Distribution suspended after distributing average of $12m

since start of GFC – generously continued in spite of lower

profitability average of $1.8m over same period.

• Banking Covenants required “Net Worth of $30m” against

our net worth at June (capital=retained earnings etc.) of

$35m

• We should have capital closer to $100m for our business

activities.

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• Through the new restructure, as approved by SSC, UR & UCTAL

Boards, the Property Trust and UCTAL will borrow $150m as

contributory capital and liquidity.

• Borrowing peaked at $300m with the facility now at $225m which is

guaranteed by the Property Trust.

• Of the $225m, we have borrowed an average of $171m for the last

3 years.

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Presentation 2013 9

The amount that the Property Trust is borrowing is not for distribution but

allows for a liquidity and capital position relative to business activities.

It should also assist in possibly allowing a distribution in 2013/2014.

What else might help to allow a distribution?

Presentation 2013 10

We are improving and revitalising our ….

Processes, Partnerships, Prudential and Portfolio Management

Introducing some Structural Changes….

• Since shortly before last Synod we have had significant changes to the

Board with new appointments and a new Chair

•The Board has recruited directors with risk management and credit skills to form

nucleus of a new look Credit Committee

•Internal audit functionality outsourced to KPMG

•New Executive Director

•Imminent change to structure, capital position and banking facilities

•New team with property lending skills to improve management of loan portfolio

•3 new team combinations with a Prudential team, a Portfolio and a Partnership

team ….

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Commercial Mortgages Church Loans Equities Property Cash & Liquid Securities High Yield Investments$0

$100

$200

$300

$400

$500

$600

$700

$800

Commercial Lending reduction of $111m

Equities reduction of $23m

Property Portfolio reduced by $31m

$111

$34

Sep-11Mar-13

De-risking and re-risking ….

By helping our Partners to develop ….

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We also need your help ….

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30-Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

UCAPT Investments 178.1 176.985 171.763 163.85 163.2 160.318 158.217305

156.091 153.97 152.405 NaN NaN NaN

137.5

142.5

147.5

152.5

157.5

162.5

167.5

172.5

177.5

182.5

Monthly UCAPT Investment Liability Balances ($M)

We also need your help ….

•Your investment can, and will make a difference

•Community of Faith Debentures are invested in the Property Trust

•Our team offers a caring service and is ready to assist

•Hopefully you visited our UFS stall or will make suggestions via our feedback

forms on your table

•By filling in these feedback forms you can help direct us to where we go next.

Presentation 2013 15

So that’s our Story…

Presentation 2013 16

To conclude ....

Presentation 2013 17

1,950

42

280

5

9

540

1

110