CHIEF EXECUTIVE OFFICER’S REPORT
As noted by Executive Chairman John Sanday, 2018 was a year of change and consolidation for the Pacific Balanced Fund. It has not been an easy year for us and our pathway to recovery during 2018 was turbulent. Importantly for Unit Holders it was also the 47th anniversary of this Fund.
This serves to remind me that in 1971 the National Parliament created the Investment Corporation of Papua New Guinea, whose objective was to provide for an equity holding, by eligible persons, in enterprises in Papua New Guinea in cases where it was in the long- term interest of the people of Papua New Guinea to do so; and to provide an avenue for a significant degree of equity holding by eligible persons who might not otherwise be able to achieve this.
One of the most astute investments was the Fund becoming a 24% shareholder in the licenced Toyota dealer, a company now known as Toyota Tsusho (PNG) Ltd. This enterprise has consistently performed very well over the past 45 years and continues to contribute to the incomes of unit holders. I feel that by retaining such investments we have continued to honour the original objective of the Fund.
As we have noted in previous years interest in purchasing units in the Fund grew quickly and workers all over PNG acquired more units through payroll deductions. An unfortunate lack of proper records when the Investment Corporation Fund transitioned to PBF means that an ongoing challenge continues to be us finding the owners of units, verifying their ownership, and including them in the payment of distributions. Ownership of 87% of the units issued has been verified and roadshow activities continue to identify missing investors and enable updating of their records.
This exercise was assisted by electronic document filing and the development of the PBF Unit Holders’ registry as a source of accurate records of details of the 20,000 PBF unit holders and it progressed in 2018. Success stories include a retired high school teacher from Bundi in Madang who we located through social media, and he has now received outstanding distribution payments. Another is a private businessman who retired to Sydney in the 1980s who was traced through the internet. Although he unfortunately had died our team helped estate administrators update records and make outstanding distribution payments to his estate.
As is detailed in this report some of the ‘foundation investments’ of the Fund continue to perform well and, whilst dealing with legal issues, has incurred a certain amount of additional operational expenditure, the value of the PBF and Unit Holders’ funds has been maintained during the year. Despite legalistic disruptions, the Fund continued to invest in Papua New Guineans through health, education, sports and empowerment of women and children in our communities.
Trading was introduced in secondary markets enabling unit holders to buy and sell units among themselves. The year saw the acquisition, through wholly owned subsidiary companies, of properties in Lae and Goroka and nearly 6,000 hectares of agricultural land in Sogeri.
We continue to be committed to our people and providing the best shelter for their savings by actively managing the Fund and building its financial strength in accordance with the Trust Deed and Capital Markets Act.
Chief Executive Officer
Melanesian Trustee Services Limited