THE KILMORE & DISTRICT HOSPITAL · The community sees The Kilmore & District Hospital and Nursing Home as the preferred provider and facilitator for its whole-of-life health related

THE KILMORE & DISTRICT HOSPITAL1 5 7 t h A N N U A L R E P O R T

Address: Rutledge Street, KilmoreP.O. Box 185, Kilmore 3764

Telephone: (03) 5734 2000

Facsimile: (03) 5782 2019 (Admin)(03) 5781 0219 (Clinical)

Web: www.kilmoredistricthospital.org.au

Design & Print by Kwik Kopy Thomastown

C O N T E N T S

Mission Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1

Strategic Themes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1

Report of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2

Statistical Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5

Audit Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5

Organisational Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6-7

Statutory Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8

E.E.O Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9

Service Activity Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11

Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10

Certification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12

Auditor General’s Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13-14

Finance Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15

Operating Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15

Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16

Changes in Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17

Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18

Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19

Disclosure Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .48

MISSION STATEMENT

The Kilmore & District Hospital and Nursing Home will provide thecommunity with high quality progressive health care and accommodation.

VALUESWe place a high value on…• Recognition of the dignity, integrity and rights of the individual• Excellence in all aspects of our work• Staff commitment and support• Accountability to all stakeholders• Visibility in the community• Co-operation with other health care providers

VISIONThe community sees The Kilmore & District Hospital and Nursing Home asthe preferred provider and facilitator for its whole-of-life health relatedservices.

ESTABLISHEDHospital 1860 and incorporated 7th November, 1864.Nursing Home 1986.Hostel 1997.

APPROVED BEDS30 Acute30 Nursing Home30 Hostel

SUMMARYComprehensive acute and aged care services are provided to our rapidlyincreasing catchment population of 25,000 that extends to Broadford andPyalong in the north, Wallan and Craigieburn in the south and Lancefieldand Romsey to the west. Today, over 2300 patients are treated, 60residents accommodated, 200 staff employed and operating expenditureamounts to in excess of $17.9 million.

1Annual Report 2012

1. Care and Development of Workforce

• Attract and support volunteers

• Provide opportunities for professional development

• Develop sustainable workforce models

• Promote the health and welfare of our workforce

• Provide a safe workplace

2. Business Continuity

• Maintain financial viability of agency

• Keep abreast of relevant developments in technology

• Maintain and develop infrastructure

• Review the service mix of our agency

• Maintain diligence in governance

• Operate on the basis of soundly researched and considered advice

• Identify new and alternative sources of funding

3. Quality of Care for our Patients,Residents & Clients

• Maintain appropriate accreditation status

• Engage appropriately qualified and skilled practitioners

• Maintain a safe practice framework

• Maintain a quality framework

• Recognise and respect the quality of life needs of our clients

• Maintain an appropriate physical environment

• Maintain an environment conducive to high standards of comfort and

acceptance

4. Connection with the Community

• Develop systems to identify community needs

• Provide opportunities for the community to improve their health and

well being

• Monitor and evaluate community perceptions

• Stay informed of the changing health environment

• Enable our community to easily access our facilities

5. Strategic Relationships

• Demonstrate leadership in health services

• Work constructively with other agencies

• Maintain effective relationships with Department of Health, Ministers

and Government.

• Develop and maintain strategic relationships with teaching hospitals,

universities and mentors

KILMORE AND DISTRICT HOSPITALSTRATEGIC THEMES

REPORT OF OPERATIONSOn behalf of the Board, and in accordance with the FinancialManagement Act 1994, it gives me great pleasure to present the Report of Operations for The Kilmore & District Hospital for the year ended 30th June 2012.It is fair to say that the year has not been without its challenges.

Significant AchievementsA number of initiatives continue or have come to fruition during 2011-12,including:

• Over past years we have continued to receive above averagefunding increases from the state health budget;

• Commitment of $10million from state government (matching theCommonwealth government) to $20million redevelopment;

• The redevelopment will provide additional inpatient and outpatientservices as well as student accommodation; this project has takenover 5 years to bring to this stage, and will be the foundation forfuture growth;

• Progressing “Mitchell South’ area health services plan through thework of our Implementation Committee;

• Continued subcontracting of surgical services for The NorthernHealth (approx $150,000 additional revenue in 2011/12);

• Attraction of $100,000 Commonwealth grant to increase skills ofnursing staff in our Urgent Care Centre;

• Admission of private inpatient has generated (approx $600,000)additional revenue while ensuring no out-of-pocket expenses forclients;

• Additional private/self-funded surgery lists (ENT and Endoscopy) toincrease services to our local community;

• Transitional Care packages to assist elderly hospital patients toregain independence skills;

• 30% increase in service provision and funding for Health andCommunity Care clients through the District Nursing Service;

• Successful tender for Meals-on-Wheels for all of Mitchell Shire;

• Infrastructure grant ($215,000) to replace Caladenia Nursing Homeroof.

GovernanceOver the last twelve months, the Board has continued its commitment togood governance of the Agency through the review of Board structureand operations. We have in place an annual timetable and agenda format,which ensures a focus on “policy” and “strategic direction”.

Key policy and strategic documents include:

• Strategic Plan to provide the overall direction for the agency. Theplan includes our mission and values and Key Result Areas for theagency. (See page 1 of this report, which also includes KeyPerformance Indicators to enable our performance to be monitored.)

• Corporate Financial Plan which provides the framework to guide theday-to-day decision making, and benchmarks our performance withlike sized agencies.

• Strategic Risk Management document which provides a frameworkfor risk management within the agency, as well as industrybenchmarks.

• Business Plan which is developed by the Senior Managers of ouragency each year, and includes our annual goals, with links to ourStrategic Plan.

• Marketing Plan particularly focuses on how and what informationwill be provided to our clients and the community in general.

• Facilities Master Plan to guide the future uses and development ofbuildings and infrastructure.

The Audit Committee remains the only standing committee of the Board,providing an oversight of the risk management practices for all theAgency’s operations, not only on financial matters. The Committee hasdeveloped a three-year (rolling) audit plan, and processes continue to beaudited in accordance with this plan. An outline of the Audit Committee’sachievements this year can be found on page 5 of this report. I thank ourAudit Committee Chair, Julia McGill and her fellow members for theircommitment to continued development of the role and function of thiscommittee.

The Board is committed to monitoring and improving its own performancethrough:

1. An annual self-appraisal (in August)

In general the Board is pleased with its general performance and thestrategic direction of our agency.

2. An annual “Skills Profile” (in March) that enables individual membersto:

• Indicate their competency within a range of eleven criteria, forexample; health issues/planning, finance/audit, law, or understandingof agency;

• Indicate a need for internal or external education

• Compare our board demographic with that of our community andclients.

In July 2011 we welcomed Dr Leonard Whitehouse to the Board;however, Sarah Durrant resigned due to ill health, leaving a casualvacancy on the Board.

I would like to thank my fellow Board Members for their due considerationto the many challenges that necessarily face the Board. I also thank themfor the many extra hours they have contributed to their roles outside ofthe monthly meetings. I thank the Executive Staff for the support theyhave provided to us during the year.

I also wish to recognise that we could not offer the high quality of servicewe do, without the skills of our 200 staff and doctors (GPs andspecialists), supported by contractors. These skills are not just in nursingand clinical care, but also maintenance, catering, cleaning, andadministration. On behalf of the Board of management, I extend mysincere thanks.

Quality ManagementQuality improvement continues to be a focus of all departments withinour agency. These activities are coordinated by our Director of Nursingand our Quality & Risk Management Committee. The Board receives anannual Quality Plan in August each year, with regular updates of progressthrough the year. On behalf of the Board, I extend our appreciation for the

2 THE KILMORE & DISTRICT HOSPITAL

3Annual Report 2012

continued commitment of all our staff to the improvement in and qualityof all our services.

In March 2012, we completed our ‘desk-top’ Accreditation Reviewconducted by the Australian Council of Healthcare Standards (ACHS) forour non-residential services, thereby retaining our maximum accreditationstatus. The standards of care in our aged care facilities (CaladeniaNursing Home and Dianella Hostel) continue at the very high level wehave come to expect, and our staff and the community in general can beproud of these facilities. In July 2012 the Aged Care Standards Agency(ACSA) conducted a scheduled survey. Satisfactory compliance wasnoted for all standards.

Hospital Services

Inpatients:

During the financial year we treated 2,349 acute inpatients. Thesepatients stayed for a 6,807 days, and generated 1,596 WIES. Surgicalservices (1,139 operations) and births (230) were both at record levelsthis year. Acute medical inpatients numbers however remain low. Whilesome of the fall in demand can be attributed to better management ofchronic diseases, much of the decrease can be attributed to how we carefor our elderly both in the community and in our aged care residences.

There continues to be potential to increase significantly the level ofservices provided to our community through the hospital. A review ofDepartment of Health (DoH) statistics for past years showed that only21% of public hospital admissions from our primary catchment areas(Kilmore, Wallan, Wandong and Broadford) came to our hospital. We alsohave the capacity with only 62% bed occupancy, and operating theatreused only three to four days per week.

Urgent Care Centre

Presentations to the Urgent Care centre stabilized in 2011/12 with 8,423attendances. A review of these attendances indicates that the vastmajority were appropriate for the agency. We have a number of systemsin place to control inappropriate attendances, so as not to put too muchstrain on our medical service providers. Our local GPs must also maintaintheir own practices. We are fortunate to have access to two local “bulkbilling” clinics that have agreed to take non-emergency referrals duringwork hours. We also receive excellent support from the EmergencyDepartment at The Northern Hospital, and from our local ambulanceservice. I thank all our (fifteen) GP’s for their commitment to our UCC, andthank our nurses who are always the first line of service.

District Nursing Service

Demand for our District Nursing Service fluctuated during the year, with afinal total of 4,465 home visits, substantially higher than any of the pastthree years. In addition to the standard district nurse service, additionalroles in post-acute care, palliative care, private dressings and postnatalvisits are also provided. Our nursing staff continue to work with otherhealth agencies to streamline service coordination and referral systems.

Residential Services

Occupancy rates have been of great concern during 2011/12 with up tosix vacancies at any one time in both our Hostel and Nursing Home. Theannual occupancy was down to 94% for Caladenia and 93% for Dianella,

when in past years have been around 99% and 98% respectively. Thereclearly has been an impact from the private eighty-bed aged careresidential facility in Kilmore and from Community Aged Care Packages(CAPs).

It is notable that 30% of our clients come from Local Government Areasother than Mitchell Shire. This is reflective of the increased population inour southern catchment, with younger families wishing to accommodateolder relatives closer to their homes. Demand is expected to increase infuture years with four retirement villages approved for development inKilmore township, and a number of others in neighbouring towns.

This year we commenced a new Transitional Care service in partnershipwith Goulbourn Valley Health. Transitional Care (hospital) beds have beenset up in Dianella Aged Care Hostel. This service assists elderly hospitalpatients to regain independence skills so they may more readily return toliving at home. The service has also helped with our occupancy levels inresidential services.

FinanceThe hospital and aged care facilities receive most of their funding fromState and Commonwealth governments. Aged care funding ispredominantly occupancy based (ie, number of bed-days) whilst thehospital funding is by ‘block’ grant.

The total Agency recorded an operating deficit of $583,000 mainly due to:

• An underlying deficit in aged care residential services (exacerbatedby low occupancy and lower than desired complexity of carerequirements for our clients); and

• Unfunded costs associated with state-negotiated pay rises for ourstaff.

The total Agency recorded a deficit of $1,299,000 (including depreciation)for the twelve months to 30th June 2012. While disappointing, this was avast improvement upon the prior year result. We did receive someadditional support from the Department of Health; however a large part ofthe improvement this year was due to a review of aged care billingpractices. The full year effect of the additional revenue will furtherimprove next financial year’s result.

From a capital perspective the agency spent $206,000 on new andreplacement equipment during 2011/12. This year we received $234,000in capital contributions from the state, the majority of which is to replacethe roof of Caladenia Nursing Home. We still however rely heavily oncommunity contributions and our capital reserves to ensure themaintenance of our quality service.

Fund RaisingThe Agency continues to receive wonderful support from its auxiliariesand members of our community. On behalf of the Board, staff, patientsand residents, I thank you for your ongoing support.

Our Auxiliaries are important to us, not only in the fundraising that theydo, but also in their public representation of our organization. They areexcellent ambassadors for us and help create a community ownership ofthe Hospital, Caladenia Nursing Home and Dianella Aged Care Hostel. TheLadies Auxiliary donated $4,700 for new equipment during 2011/12. TheGarden Party Auxiliary, who run the Hospital Op Shop, donated a further$74,400. I wish to congratulate our auxiliary members for their wonderfulcontribution and thank them on their efforts.

Once again we were ably supported by many community groups with thelocal Lions Clubs and Mechanics Institute all making contributions thisyear. This year we raised more than $6,500 as beneficiary of the KilmoreRacing Club’s Kids Day Out. We continue to receive many individualdonations to the Hospital and our aged care facilities. We thank you for allyour contributions large and small. Total donations of $88,000 werereceived during the year.

External RelationshipsWe continue to maintain close links with a range of groups and agencies.

Regular meetings are conducted with the Department of Health, both atthe regional level and with Central Office in Melbourne. Some of thesemeetings are opportunities to share information and experiences withpeer agencies. Other meetings such as monthly Close Watch are solelyfocused on opportunities to improve the performance of our agency. Iwish to thank our Department of Health colleagues for their supportthrough the past financial year.

The Mitchell Healthcare Network is a formal alliance between TheKilmore & District Hospital, Seymour Health, Mitchell Community HealthService, and Mitchell Shire with the aim of improving services and servicedelivery within the Mitchell Shire. The main focus of this group in 2011/12has been to implement the recommendations of the Mitchell South AreaServices Plan. Completion of the hospital redevelopment and the erectionof a proposed Wallan Superclinic will go a long way to achieving many ofthese recommendations.

Primary Care Partnerships continue to be a strong focus of the currentGovernment and Department of Health. Eighteen agencies from Mitchelland Murrindindi shires have formed the Lower Hume Primary CarePartnership. Member agencies have continued to work together over thelast twelve months particularly with health promotion and chronic diseasemanagement activities, as well as the development of a common referraland assessment tool. The revised Community Health Plan outlines ourcurrent and future direction, and funding requirements for theachievement of our Alliance objectives.

Our agency continues to be part of the Hume Rural Health Alliance whichis a joint venture arrangement with a primary focus on informationtechnology development within the Hume region. Membership of thealliance is made up of all public hospitals and many other healthcareproviders in the Hume Region. Historically, standardization of operatingsystems, office, finance, patient and payroll/HR systems has enabledaccess to technology that would otherwise be too costly for smallagencies such as ours. Establishment of a broadband network, viamicrowave links, has led to an improvement in the speed of data transferand allowed for cost savings in telecommunications.

During the year our senior staff maintained our working relationship withstaff from the other agencies, in particular, The Northern Hospital,Seymour Health, McIvor Health, Kyneton Health Service and our localAmbulance Service. Our senior staff also collaborate with theircounterparts at other agencies to develop common policies and practiceswhere appropriate. Through the Mitchell Emergency Services Committee,we also maintain an understanding of the service needs of agencies likeSES, CFA and local Police. These contacts allow us to better integrate aspart of a total service sector for our community

Our local political representatives continue to provide assistance to ouragency. I wish to thank our (Commonwealth) Minister Health & Ageingand the (State) Health Minister for their support during the year. During2011/12 we were fortunate to have a number of discussions with Hon.David Davis around service and funding issues as well as the VictorianGovernment’s commitment to our $20 million redevelopment. I also thankour local members of parliament, Cindy McLeish; Donna Petrovich; andRob Mitchell. We appreciate the time they have all taken time to listen toour issues, and particularly to support our submissions to government.

The Year AheadWe look forward to the next financial year with caution and hope. Ourinitial projections for 2012/13 are for a substantially smaller deficit thanpast years. We will continue to work with staff from the Department ofHealth (DoH) to try and address some funding issues, while reviewing ourinternal processes in an endeavour to provide more efficient servicedelivery.

Of great excitement to the Board and staff of our agency (and I am surefor our community) will be progression of the $20 million redevelopmentfor Kilmore Hospital. The redevelopment will see a doubling of ouragency’s acute service capacity and the provision of outpatient facilitieswhich will enable provision of services for the continuum of care in ourcommunity. In the next twelve months we hope to finalise drawings andcomplete the tender process for appointment of builders. This processwill include community and staff consultation. The project is expected tobe completed in late 2014.

Review of our strategic plan, renewal of the business plan and thecontinuing quality activities will provide a surety of direction for our staffand the Board. The continued support of staff and the community willenable the ongoing viability of our agency into the future, and themaintenance of the excellent service we do provide.

John Dixon Bart Ruyter

Board President Chief Executive Officer

Kilmore

10th August 2012


5Annual Report 2012

STATISTICAL / RESIDENCES OF PATIENTS

HospitalAccommodation Available (Beds)Daily Bed AverageOccupancy Rate (%)Inpatients TreatedWIESInpatient DaysAverage Length of StayNumber of OperationsBirthsOutpatients AttendanceDistrict Nurse VisitsMeals on Wheels

Nursing HomeAccommodation Available (Beds)Daily Bed AverageOccupancy Rate (%)Residents AccommodatedResident DaysAverage Length of Stay

HostelAccommodation Available (Beds)Daily Bed AverageOccupancy Rate (%)Residents AccommodatedResident DaysAverage Length of Stay

201130

17.7659.212241155064482.89968201

886643626568

3028.9896.61

4910,579215.9

3026.6288.74

389,718255.7

201230

18.6562.162349159668072.90

1139230

842344655792

3028.2294.08

5110,302202.0

3027.9092.99

6110,182

166.9

2008 200930 30

20.86 18.9069.53 63.122295 22251733 15467613 69123.30 3.11

1045 1036214 228

7431 73304544 41818845 9979

30 3029.95 29.9599.84 99.82

45 3910,933 10,930243.0 280.3

30 3029.79 29.8299.30 99.42

38 3910,874 10,886286.2 286.5

201030

18.4661.542224152967393.03

1020224

813434326962

3028.5395.11

4410,414236.8

3028.6095.33

4310,439242.8

During the year the Committee comprised of five Hospital Board membersappointed by the Board. The Committee held six meetings and inaccordance with the Committee's 2011/12 Audit Plan carried out reviewsof a number of Hospital functions, namely:

• Emergency Dept.• Intellectual Property/IT Security• Midwifery Model• Internal Audit Options• ACFI Review• HR Strategic Plan• Payroll Audit• Year end external financial audit

OutcomesThe Committee found that in most cases policies and procedures are of ahigh standard and are such as to ensure the Hospital and Aged Care

facilities are conducted in accordance with Departmental and Legislativerequirements. In some instances, the committee made recommendationsto the executive for modification or improvement of procedures. Where applicable, the committee confirmed that information provided tothe Board by the executive staff was accurate.

Audit PlanAn interim audit plan will be developed for 20012/13.

On behalf of the Committee I express my appreciation for the supportprovided by Colin Clark, Director of Finance and Administration, during2011/12.

Julia McGillChairman

THE KILMORE AND DISTRICT HOSPITALAUDIT COMMITTEE2011/2012 ANNUAL REPORT


AUDIT COMMITTEE

STANDING COMMITTEES

Quality & Patient Care

Maternity Services

Palliative Care

Health Information

Education

Anesthetics

Quality & Patient Care

OH & S Credentials Committee

Infection Control

Waste Management

Risk Management Medical Appointments

PRESIDENTJOHN DIXON

VICE PRESIDENTWALLY ARNOTT

AUDIT CHAIRJULIA McGill

MINISTER FOR HEALTH (Vic)The Hon. Mr. D. Davis (MP)

MINISTER FOR AGED CARE (Vic)The Hon. Mr. D. Davis (MP)

AUDITORSRichmond, Sinnott & Delahunty

MINISTER FOR HEALTH (Com.)The Hon. Ms. T. Plibersek (MP)

MINISTER FOR AGING (Com.)The Hon. MR. M. Butler (MP)

BANKERSNational Australia BankCommonwealth Bank

SOLICITORI.B. Still & Co.Health Legal

D

Community Liaison Group

Medical Staff Group

BOARD OF MANAGEMENT

MEMBERS

JEFFERY ROBINSON

GEOFFREY SEKFY

ULLA LONNQVIST

LEONARD WHITEHOUSE

BERRY McSHERRY

SARAH DURRANTCHIEF EXECUTIVE OFFICER

BART RUYTER

7Annual Report 2012

Visiting Medical OfficersAcute Nursing Services

Theatre

Midwifery

Accident & Emergency

District Nursing

Nursing Home

Hostel

Palliative Care

Pharmacy

Quality Assurance

Volunteer Co-Ordinator

Accounts Payable/Receivable

Investments

Budgeting

Payroll

Reception

Stores

Computer Services

Insurance

Maintenance Services

Catering Services

Health Information Mgmt.

Cleaning Services

Human Resources

I

DIRECTOR OF MEDICAL SERVICESIAN BRAND

DIRECTOR OF NURSINGJENNIFER SALKELD

DIRECTOR OF FINANCE & ADMINISTRATIONCOLIN CLARK

C


STATUTORY INFORMATIONREQUIREMENTS

The Kilmore & District Hospital is incorporated under the Health ServicesAct 1988. The Kilmore & District Hospital’s Annual Report has beencompiled to meet the requirements of the Financial Management Act1994 (as amended), the Standing Directions of the Minister of Finance,and other acts. Information required by legislation – but not recordedelsewhere in this annual report is summarized below.

Staff Superannuation BenefitsEvery full-time, part-time and casual employee at the Kilmore & Districthospital automatically receives the non-contributory Basic Benefitsuperannuation as part of their employment package. This benefit isfinanced by the Hospital and managed by the Hospital’s Superannuationboard. The Basic Benefit includes:• A lump sum payment on retirement any time after age 55.

This grows each year at 9% of salary, with interest added annually atthe fund-earning rate.

• Personal disability insurance cover.• Death benefits for dependants.

Freedom of Information The agency has adhered to the requirements of the Freedom ofInformation Act 1982, as amended. During the year 2011/12 there was24 Freedom of Information requests.

Whistleblower Protection Act 2001In accordance with the Act, appropriate policy and procedures are inplace. Information about the policy has been widely distributed. Therehave been no notifications under this policy.

Competitive NeutralityThe agency has in place a plan for implementation of the VictorianGovernment’s policy on Competitive Neutrality.

Outsourcing of ServicesThe following Services are currently outsourced and represent less than1.0% of the Agency’s total expenditure:• Pathology• Allied Health Services• Non-core Cleaning • Non-core Engineering & Maintenance

Pecuniary InterestMembers of the Board of Management are required to notify thePresident of the Board of any pecuniary interest, which might give rise toa conflict of interest. Each member has completed a statement ofpecuniary interest.

PublicationsThe following publications dealing with functions, powers, duties, andactivities of the Agency were produced in 2011/12 and may be viewed atthe Hospital upon request.

• The Kilmore and District Hospital 2010/11 annual report.• Health Service Agreement 2011/12 between The Kilmore and

District Hospital, and the Hume Region of Department of HumanServices.

Overseas VisitsNil.

Time Lost through Industrial DisputesNil.

Cost of Consultants Engaged Under$10,000During 2011/12, one consultant was engaged for matters of financialreview, with a total cost less than $6,600.

Cost of Consultants Engaged Over$10,000Health Metrics were appointed to review aged care revenue at a cost of$37,000. The consultancy was completed within the 2011/2012 financialyear.

Michael Rhook was appointed to review the financial and services modelof the Kilmore & District Hospital at a cost of $22,000. The consultancywas completed within the 2011/2012 financial year.

Victorian Industry Participation PolicyThis Agency has no requirements of disclosures under Victorian IndustryParticipation Policy 2003 for the 2011/12 financial year.

Fees and ChargesThe Hospital and Aged Care Facilities charge fees in accordance with theDepartment of Health and Community Services directives issued underSection 9 of the Hospital’s and Charities (Fees) Regulations 1986, asamended.

Building StandardsIt is the aim of this agency to comply with all regulatory requirements.Certificate No.6 of Fire Safety Compliance was duly signed for 2011/12.

Equal OpportunityThe Kilmore & District Hospital, Nursing Home and Hostel are an equalopportunity employer. The Hospital’s Affirmative Action Policy ensuresthat all employees will work in an environment, which provides equalopportunity and supports E.E.O. standards. Our EEO program objectivesare:• To monitor current personnel practices and to endeavor to ensure

that the agency continues to recruit and promote staff gaining dueregard to the provisions of the Public Administration Act 2004 whilstimproving staff selection procedures.

• To ensure that the staff education policy allows all staff equal accessto in-service training and professional seminars and workshops

• To put in place workplace initiatives that promotes flexibility foremployees.

9Annual Report 2012

OH&SOur Occupational Health and Safety Committee comprise membershipsfrom all areas of our agency, and meets on a monthly basis. During theyear committee members performed regular Safety Audits and evaluateall reported accidents and incidents. OH&S training continues to beoffered to all staff, in particular for CPR, infection control, manual handlingand fire safety. Our Area Representatives undertook their one-dayupgrades with new representatives undertaking the five-day OH&Straining course.

Senior Appointments During 2011/12 there were three changes to Senior Management. Nurse Unit Manager in Urgent Care Centre, Denise Hunt was replaced byGary Wilson. Nurse Unit Manager in Acute Ward, Andrea Moore wasreplaced by Tracey Webster. Director of Nursing, Amanda Edwards wasreplaced by Jenny Salkeld. Of note the Assistant Director of Nursing position vacated by JennySalkelkd is yet to be replaced.

Medical StaffMedical services are provided by contracted Visiting Medical Officers. Wehave been fortunate in recent years to attract appropriate skilled GPs(now fifteen) to cover our acute medical service needs and our increasedrequirements in the Emergency Department. We are also fortunate tohave appointed seventeen specialist practitioners for surgical services,obstetrics, anesthetics and oncology.

TrainingOur Education Committee meets regularly each year to formally planeducation programs for the total agency. Senior management alsoidentifies general training needs for each department. The training needsof individual staff are identified and discussed as part of the annual StaffAppraisal process.

Succession PlanningSuccession Planning continues to be an important focus within ouragency. Each unit or department manager has in place a HumanResources Plan for their department. This plan includes an evaluation oftheir workforce need and strategies to assist with succession planning forall levels of staff within their areas.

Employment Statistics

As can be seen from the above tables, Kilmore & District Hospital ispredominately staffed by part time employees, the overwhelming majoritybeing female. The average employment is 24 hours per week. The tablebelow shows a slight increase in staffing levels over the last 12 months.

NNuummbbeerr ooff EEmmppllooyyeeeess @@ 3300tthh JJuunnee,, 22001122

2011/2012 2010/2011

2011/2012 2010/2011

MMaallee FFeemmaallee TToottaall MMaallee FFeemmaallee TToottaallFull Time 9 11 20 8 10 18Part Time 4 185 189 5 175 184

13 196 209 13 185 198TToottaallCasual Employees – 30 as at 30th June, 2012

EEqquuiivvaalleenntt FFuullll--ttiimmee SSttaaffff @@ 3300tthh JJuunnee,, 22001122

MMaallee FFeemmaallee TToottaall MMaallee FFeemmaallee TToottaallFull Time 9.00 11.00 20.00 8.00 10.00 18.00Part TimeTToottaall

3.5112.51

100.58111.58

104.09124.09

4.1512.15

96.85106.85

101.00119.00

Paid Equivalent Full Time Staff Classification 2011/2012 2010/2011 2009/2010 2008/2009 2007/2008 Nursing 75.24 72.57 71.42 67.16 67.80 Admin/Clerical 10.66 14.21 10.36 12.42 12.09 Medical Support 0.00 0.72 0.72 0.97 1.16 Hotel/Allied 38.19 31.50 34.47 34.74 35.95 Sess. Clinical 0.00

0.00

0.00 0.00 0.00

Total 124.09 119.00 116.97

115.29 117.00

Attestation on Data AccuracyI, Bart Ruyter certify that The Kilmore & District Hospital has put inplace appropriate internal controls and processes to ensure that theDepartment of Health is provided with data that reflects actualperformance. The Kilmore & District Hospital has critically reviewedthese controls and processes during the year.

Bart RuyterAccountable Officer

Kilmore10th August 2012

Attestation on Compliance withAustralian/New Zealand RiskManagement Standard

I, Bart Ruyter certify that The Kilmore & District Hospital has riskmanagement processes in place consistent with the Australian/NewZealand Standard and an internal control system is in place thatenables the executives to understand, manage and satisfactorilycontrol risk exposures. The Audit Committee verifies this assuranceand that the risk profile of The Kilmore & District Hospital has beencritically reviewed within the last 12 months.

Bart RuyterAccountable Officer

Kilmore10th August 2012


BACKGROUND

HospitalOn the 17th November 1864, The Kilmore Hospital was incorporatedunder the provisions of the Hospitals & Charities Act. Notice of thisincorporation was published in the Government Gazette No. 135/1864Page 2996.

On the 23rd November 1988, The Kilmore Hospital changed its name toThe Kilmore and District Hospital to reflect the growing area that itserves. Notice of this change was published in the Government GazetteNo. 45/1988 Page 3497.

In the year 1858 the community raised funds of 1269 pounds and theGovernment granted 500 pounds for the building of a hospital. In 1860the number of patients treated was 86. The original hospital is thesecond oldest of Victoria’s District Hospitals and the most intact.

In 1975 the Hospital 20-bed ward was completed and on the 29th July1984 the extensions including the services wing and clinical supportfacilities were officially opened.

A major redevelopment project costing $2.2 million was completed onthe 26th June 1995. Works included the renovations of existingoperating theatre, general administration, the provision of new birthingsuites, wards, a new accident and emergency area and 10 additionalacute patient beds. This has increased bed capacity by 50% from 20 to30 beds. Having 8 single, 3 double and 4 four-bed wards, most withensuite facilities, enhances flexibility in the placement of patients.

In 2002 an extension was build at the rear of the hospital toaccommodate a dedicated reception for our radiology service, and includecapacity for the new CT scanner and ultrasound service. 2007 saw arenovation of the Theatre Suite to ensure compliance with infectioncontrol standards and efficiency of patient service.

2008 saw the completion of a dedicated Oncology Unit andredevelopment of the administration area. Demand for oncology servicesand particularly chemotherapy has continues to grow in line with ourgrowing and ageing population. The reception area now houses all ourcentral administration staff, while providing a discreet office for theadmission of patients and privacy to the acute ward.

This year we treated 2,349 inpatients, and 8,423 A&E attendances.

“Caladenia” Nursing HomeOn the 8th January 1987, The Kilmore Nursing Home Society wasregistered as a benevolent society under the provisions of the Hospitaland Charities Act 1958 and this was subsequently repeated on the 14thMay 1989 with the proclamation of the Health Services Act 1988. As aresult, on and from the 31st October 1989, The Kilmore and DistrictNursing Home Society Inc., is incorporated under the Associationsincorporation Act 1981.

When approval in principle to build Caladenia was received on the 25thMay 1988, we had funds in hand of just $12,770. Following a massive

fundraising appeal and FANTASTIC community support, a total of$1,502,730 was received over a three year period in cash donations.$768,000 was received from the Commonwealth Government. The totalcost of the project was $2,740,000, and was broadly represented by$2,450,000 building construction costs, $248,000 plant, furniture andequipment, plus $42,000 fundraising, administrative and setting-upexpenses. The construction of our 30-bed Nursing Home was completedduring the 1990/91 financial year.

Caladenia provides long term nursing care and accommodation for agedor disabled persons from within our community. Accommodation hasbeen designed to provide care in a homely atmosphere, with allbedrooms overlooking a garden setting. The design of 16 single and sevendouble bedrooms further enhances privacy and flexibility in the placementof residents. A feature of the building is the large living/dining area andsmaller sitting areas specifically designed to encourage participation andinvolvement by relatives and friends with the resident.

On the 17th June 1991, the first of our elderly residents moved in,culminating several years of work, planning, fundraising, building andcaring. Caladenia was officially opened on the 11th August 1991. It ispleasing to provide a local service for our district residents. Occupancyhas fluctuated substantially in the past twelve months, though all 30 bedswere occupied at 30th June 2011.

“Dianella Village” Aged Care HostelOn the 20th December 1994, the Commonwealth Department of HumanServices and Health granted approval in principle for a 30-bed Aged CareHostel. The approval had followed two years of submissions based onneed, population growth, demographics, efficiency, and financial viability.The Hostel was to be an integral part of our overall development concept,being the final phase in the provision of comprehensive health care andaccommodation for our aged.

Again a major fundraising appeal was launched in 1995 and withmagnificent community support cash donations received to date total$707,000. Together with the Commonwealth Government $847,000,Department of Veterans Affairs $160,000, Hospital contribution andborrowings, the total project funding and cost was $2.1m. This wasbroadly represented as $1,846,000 building costs, landscaping andearthworks $50,000, furniture furnishings and equipment $125,000 plus$44,000 fundraising expenses.

Resident accommodation is enhanced by single bedrooms, which alongwith ensuite facilities ensure privacy and placement flexibility. Featuresinclude a bright and tastefully decorated main living/dining room, tea andsitting rooms in each of the three houses, spa bathroom with federationdome skylight, hairdressing salon, great kitchen for freshly cooked meals,gas burning log fireplaces in each of the sitting rooms and landscapedgardens. Personalized care and attention (including Respite Care) isprovided with every effort made to assist our aged and disabled residentsto feel “at home”.

On the 18th August 1997 the first of our elderly residents moved in andDianella Village was officially opened on the 21st August 1997. In thepast we have experienced only limited vacancies though in the past yearwe were only 93% occupied.

11Annual Report 2012

Admitted Patients Acute Health Aged Care Primary Care Total

SeparationsAcute Multi Day 1,448 0 0 1,448

Acute Same Day 898 0 0 898 Non Acute 3 52 0 55Total Separations 2,349 52 0 2,401 Emergency 274 0 0 274 Elective 1,612 0 0 1,612 Other Including Maternity 463 52 0 515Total Separations 2,349 52 0 2,401

Public Separations 1,709 0 0 1,709Total WIES 1,596 0 0 1,596Separations per Avail Bed 78.30 0.90 0.00 26.68Total Bed Days 6,807 20,484 0 27,291

Non Admitted Patients Acute Health Aged Care Primary Care Total

Emergency Medicine attendances 8,423 0 0 8,423 Other Services Occasions of Service 0 4,465 0 4,465Total Occasions of Service 8,423 4,465 0 12,888

Revenue Indicators

Average Days to Collect2011/12 2010/11

Private Inpatient Fees 75.35 43.42TAC Inpatient Fees 0.00 0.00VWA Inpatient Fees 0.00 0.00District Nursing 351.61 182.50Residential Services 5.38 3.62

Outstanding Debtors as at 30th June 2012

Under 30-60 61-90 Over Total Total30 Days Days Days 90 Days 30/06/12 30/06/11

Private Inpatient 75,300 8,400 0 43,500 127,200 59,000TAC Inpatient 0 0 0 0 0 0VWA Inpatient 0 0 0 0 0 0District Nursing 6,500 5,200 1,200 37,000 49,900 33,000Residential Services 10,300 2,700 400 0 13,400 5,000

Comparison of Financial Result to Prior Years

2011/12 2010/11 2009/10 2008/09 2007/08$,000 $,000 $,000 $,000 $,000

Total Expenses 17,869.0 17,337.0 16,083.0 14,714.0 13,975.0 Total Revenue 16,570.0 15,241.0 14,194.0 14,194.0 13,822.0Operating Surplus/(Deficit) (1,269.0) (2,096.0) (1,889.0) (520.0) (153.0)

Retained Earnings 1,283.0 2,582.0 4,678.0 6,234.0 6,754.0

Total Assets 14,142.0 14,878.0 16,821.0 18,649.0 16,287.0 Total Liabilities 6,094.0 5,531.0 5,378.0 5,650.0 4,218.0Net Assets 8,048.0 9,347.0 11,443.0 12,999.0 12,069.0

Total Equity 8,048.0 9,347.0 11,443.0 12,999.0 12,069.0

SERVICE ACTIVITY DATA 2011/2012


Certification

Auditor General’s Report


Auditor General’s Report



Financial Statements

Kilmore & District HospitalComprehensive Operating StatementFor the Year Ended 30 June 2012

NOTE Total Total

2012 2011$'000 $'000

Revenue from Operating Activities 2 15,072 13,972Revenue from Non-Operating Activities 2 894 944Employee Expenses 3 (11,279) (10,928)Non Salary Labour Costs 3 (1,576) (1,508)Supplies and Consumables 3 (1,235) (1,169)Other Expenses from Continuing Operations 3 (2,459) (2,398)Net Result Before Capital & Specific Items (583) (1,087)

Capital Purpose Income 2 604 325Depreciation 3 (1,320) (1,334)

(716) (1,009)

NET RESULT FOR THE YEAR (1,299) (2,096)

Other Comprehensive IncomeNet fair value revaluation on Non Financial Assets - -

COMPREHENSIVE RESULT FOR THE YEAR (1,299) (2,096)

This Statement should be read in conjunction with the accompanying notes.

Kilmore & District HospitalBalance SheetAs at 30 June 2012

Total Total

NOTE 2012 2011$'000 $'000

Current AssetsCash and Cash Equivalents 5 243 282Receivables 6 656 474Other Financial Assets 7 2,964 2,703Inventories 8 136 112Other Assets 9 6 10Total Current Assets 4,005 3,581

Non-Current AssetsReceivables 6 269 275Property, Plant & Equipment 10 9,868 11,022Total Non-Current Assets 10,137 11,297TOTAL ASSETS 14,142 14,878

Current LiabilitiesPayables 11 630 642Provisions 12 2,453 2,347Other Liabilities 13 2,544 2,153Total Current Liabilities 5,627 5,142

Non-Current LiabilitiesProvisions 12 467 389Total Non-Current Liabilities 467 389TOTAL LIABILITIES 6,094 5,531NET ASSETS 8,048 9,347

EQUITYProperty, Plant & Equipment Revaluation Surplus 14a 6,765 6,765Contributed Capital 14b 4,181 4,181Accumulated Surpluses/(Deficits) 14c (2,898) (1,599)TOTAL EQUITY 14d 8,048 9,347

Contingent Liabilities and Contingent Assets Note 18Commitments for Expenditure Note 17






Kilmore & District HospitalStatement of Changes in EquityFor the Year Ended 30 June 2012

Total Property, Plant& EquipmentRevaluation

Surplus

ContributedCapital

AccumulatedSurpluses/(Deficits)

Total

Note $'000 $'000 $'000 $'000Balance at 30 June 2010 6,765 4,181 497 11,443

Net result for the year 14 (c) - - (2,096) (2,096)

Balance at 30 June 2011 6,765 4,181 (1,599) 9,347

Net result for the year 14 (c) - - (1,299) (1,299)

Balance at 30 June 2012 6,765 4,181 (2,898) 8,048


Kilmore & District HospitalCash Flow StatementFor the Year Ended 30 June 2012

NoteTotal Total2012 2011$'000 $'000

CASH FLOWS FROM OPERATING ACTIVITIESOperating Grants from Government 13,180 12,013Patient and Resident Fees Received 1,528 1,448GST Received from/(paid to) ATO 457 387Recoupment from private practice for use of hospital facilities 20 21Other Receipts 1,186 1,428Employee Expenses Paid (11,312) (10,717)Fee for Service Medical Officers (1,506) (1,487)Payment for Supplies & Consumables (3,867) (3,540)Cash Generated from Operations (314) (447)

Capital Grants from Government 234 -Capital Donations and Bequests Received 88 54

NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES 15 8 (393)

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of Investments 150 450Disposal of Investments (20) (23)Purchase of Non Financial Assets (226) (295)Proceeds from Sale of Non-Financial Assets 26 32NET CASH INFLOW/(OUTFLOW) FROM INVESTING ACTIVITIES (70) 164

CASH FLOWS FROM FINANCING ACTIVITIESContributed Capital from Government - -NET CASH INFLOW/(OUTFLOW) FROM FINANCING ACTIVITIES - -NET INCREASE/(DECREASE) IN CASH HELD (62) (229)

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 246 475CASH AND CASH EQUIVALENTS AT END OF YEAR 5 184 246





Kilmore & District HospitalNotes to the Financial Statements

30 June 2012

NNoottee 11:: SSuummmmaarryy ooff SSiiggnniiffiiccaanntt AAccccoouunnttiinngg PPoolliicciieess

((aa)) SSttaatteemmeenntt ooff ccoommpplliiaannccee

These financial statements are general purpose financial statements which have been prepared in accordance with the Financial Management Act 1994 and applicable Australian

Accounting Standards (AASs) issued by the Australian Accounting Standards Board (AASB).

The financial statements also comply with relevant Financial Reporting Directions (FRDs) issued by the Department of Treasury and Finance, and relevant Standing Directions (SDs)

authorised by the Minister for Finance.

The Hospital is a not-for profit entity and therefore applies the additional Aus paragraphs applicable to “not-for-profit” Hospitals under the AASs.

((bb)) BBaassiiss ooff aaccccoouunnttiinngg pprreeppaarraattiioonn aanndd mmeeaassuurreemmeenntt

Accounting policies are selected and applied in a manner which ensures that the resulting financial information satisfies the concepts of relevance and reliability, thereby ensuring that the

substance of the underlying transactions or other events is reported.

The accounting policies set out below have been applied in preparing the financial statements for the year ended 30 June 2012, and the comparative information presented in these

financial statements for the year ended 30 June 2011.

The Financial Statements have been prepared on a Going Concern Basis. The Hospital has secured a letter of comfort from the Department of Health dated 16/08/2012, which details that

they will provide adequate cash flow support to enable the Hospital to meet its current and future obligations as and when they fall due up to September 2013, should it be required.

These financial statements are presented in Australian dollars, the functional and presentation currency of the Hospital.

The financial statements, except for cash flow information, have been prepared using the accrual basis of accounting. Under the accrual basis, items are recognised as assets, liabilities,

equity, income or expenses when they satisfy the definitions and recognition criteria for those items, that is they are recognised in the reporting period to which they relate, regardless of

when cash is received or paid.

The financial statements are prepared in accordance with the historical cost convention, except for the revaluation of certain non-financial assets and financial instruments, as noted.

Particularly, exceptions to the historical cost convention include:

Non-current physical assets, which subsequent to acquisition, are measured at valuation and are re-assessed with sufficient regularity to ensure that the carrying amounts do not

materially differ from their fair values;

Derivative financial instruments, managed investment schemes, certain debt securities, and investment properties after initial recognition, which are measured at fair value through

profit or loss; and

Available-for-sale investments which are measured at fair value with movements reflected in equity until the asset is derecognised.

The fair value of assets other than land is generally based on their depreciated replacement value

Historical cost is based on the fair values of the consideration given in exchange for assets.

In the application of AASs management is required to make judgments, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other

sources. The estimates and associated assumptions are based on professional judgements derived from historical experience and various other factors that are believed to be reasonable

under the circumstances. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision

affects only that period or in the period of the revision, and future periods if the revision affects both current and future periods. Judgments made by management in the application of AASs

that have significant effects on the financial statements and estimates, with a risk of material adjustments in the subsequent reporting period, relate to:The fair value of land, buildings, infrastructure, plant and equipment (refer to Note 1(j)Actuarial assumptions for employee benefit provisions based on likely tenure of existing staff , patterns of leave claims, future salary movements and future discount rates (refer

to Note 1 (k)).

((cc)) RReeppoorrttiinngg EEnnttiittyy

The financial statements include all the controlled activities of the Kilmore & District Hospital.

Its principal address is:

Rutledge St

Kilmore

Victoria 3764.

A description of the nature of the Kilmore & District Hospital’s operations and its principal activities is included in the report of operations, which does not form part of these financialstatements.

((dd)) PPrriinncciipplleess ooff CCoonnssoolliiddaattiioonn

Associates and joint ventures

Associates and joint ventures are accounted for in accordance with the policy outlined in Note 1(i) Financial Assets.

Details of the joint venture are set out in note 20.

The Kilmore & District HospitalNotes to the Financial Statements

30 June 2012

Jointly controlled assets or operations

Interests in jointly controlled assets or operations are not consolidated by the Kilmore & District Hospital, but are accounted for in accordance with the policy outlined in Note 1(i) Financial

Assets.

((ee)) SSccooppee aanndd pprreesseennttaattiioonn ooff ffiinnaanncciiaall ssttaatteemmeennttss

Fund Accounting

The Hospital operates on a fund accounting basis and maintains three funds: Operating, Specific Purpose and Capital Funds. The Hospital’s Capital and Specific Purpose Funds include

unspent capital donations and receipts from fund-raising activities conducted solely in respect of these funds.

Services Supported By Health Services Agreement and Services Supported By Hospital and Community Initiatives

Activities classified as Services Supported by Health Services Agreement (HSA) are substantially funded by the Department of Health and includes Residential Aged Care Services

(RACS) and are also funded from other sources such as the Commonwealth, patients and residents, while Services Supported by Hospital and Community Initiatives (H&CI) are

funded by the Hospital's own activities or local initiatives and/or the Commonwealth.

Residential Aged Care Service

The Residential Aged Care Service operations are an integral part of the Kilmore & District Hospital and shares its resources. An apportionment of land and buildings has been made based

on floor space. The results of the two operations have been segregated based on actual revenue earned and expenditure incurred by each operation in Note 2b to the financial statements.

The Residential Aged Care service is substantially funded from Commonwealth bed-day subsidies.

Comprehensive operating statement

The Comprehensive operating statement includes the subtotal entitled ‘Net Result Before Capital & Specific Items’ to enhance the understanding of the financial performance of the

Hospital. This subtotal reports the result excluding items such as capital grants, assets received or provided free of charge, depreciation, and items of an unusual nature and amount such

as specific income and expenses. The exclusion of these items is made to enhance matching of income and expenses so as to facilitate the comparability and consistency of results

between years and Victorian Public Health Services. The ‘Net Result Before Capital & Specific Items’ is used by the management of the Hospital, the Department of Health and the Victorian

Government to measure the ongoing performance of Health Services in operating hospital services.

Capital and specific items, which are excluded from this sub-total, comprise:

Capital purpose income, which comprises all tied grants, donations and bequests received for the purpose of acquiring non-current assets, such as capital works, plant and

equipment or intangible assets. It also includes donations of plant and equipment (refer Note 1 (f)). Consequently the recognition of revenue as capital purpose income is based on

the intention of the provider of the revenue at the time the revenue is provided.

Specific income/expense, comprises the following items, where material:

o Voluntary departure packages

o Write-down of inventories

o Non-current asset revaluation increments/decrements

o Diminution/impairment of investments

o Restructuring of operations (disaggregation/aggregation of Health Services)

o Litigation settlements

o Non-current assets lost or found

o Forgiveness of loans

o Reversals of provisions

o Voluntary changes in accounting policies (which are not required by an accounting standard or other authoritative pronouncement of the Australian Accounting Standards

Board)

Impairment of financial and non-financial assets, includes all impairment losses (and reversal of previous impairment losses), which have been recognised in accordance with Note

1 (i) and (g)

Depreciation as described in Note 1 (g)

Assets provided or received free of charge (refer to Note 1 (g) and (f))

Expenditure using capital purpose income, comprises expenditure which either falls below the asset capitalisation threshold or doesn’t meet asset recognition criteria and therefore

does not result in the recognition of an asset in the balance sheet, where funding for that expenditure is from capital purpose income.

Balance sheet

Assets and liabilities are categorised either as current or non-current.

Statement of changes in equity

The statement of changes in equity presents reconciliations of each non-owner and owner equity opening balance at the beginning of the reporting period to the closing balance at the end

of the reporting period. It also shows separately changes due to amounts recognised in the comprehensive result and amounts recognised in other comprehensive income related to other

non-owner changes in equity.

Cash flow statement

Cash flows are classified according to whether or not they arise from operating activities, investing activities, or financing activities. This classification is consistent with requirements under

AASB 107 Statement of Cash Flows.

For the cash flow statement presentation purposes, cash and cash equivalents includes bank overdrafts, which are included as current borrowings in the balance sheet.



30 June 2012


((ff)) IInnccoommee RReeccooggnniittiioonn

Income is recognised in accordance with AASB 118 Revenue and is recognised as to the extent that it is probable that the economic benefits will flow to the Hospital and the income can be

reliably measured. Unearned income at reporting date is reported as income received in advance.

Amounts disclosed as revenue are, where applicable, net of returns, allowances and duties and taxes.

Government Grants and other transfers of income (other than contributions by owners)

In accordance with AASB 1004 Contributions, government grants and other transfers of income (other than contributions by owners) are recognised as income when the Hospital gains

control of the underlying assets irrespective of whether conditions are imposed on the Hospital’s use of the contributions.

Contributions are deferred as income in advance when the Hospital has a present obligation to repay them and the present obligation can be reliably measured.

Indirect Contributions from the Department of Health

– Insurance is recognised as revenue following advice from the Department of Health.

– Long Service Leave (LSL) – Revenue is recognised upon finalisation of movements in LSL liability in line with the arrangements set out in the Metropolitan Health and Aged Care

Services Division Hospital Circular 14/2009.

Patient and Resident Fees

Patient fees are recognised as revenue at the time invoices are raised.

Private Practice Fees

Private practice fees are recognised as revenue at the time invoices are raised.

Donations and Other Bequests

Donations and bequests are recognised as revenue when received. If donations are for a special purpose, they may be appropriated to a surplus, such as the specific restricted purpose

surplus.

Dividend Revenue

Dividend revenue is recognised when the right to receive payment is established.

Interest Revenue

Interest revenue is recognised on a time proportionate basis that takes in account the effective yield of the financial asset.

Sale of investments

The gain/loss on the sale of investments is recognised when the investment is realised.

Resources Received Free of Charge or for Nominal Consideration

Resources provided or received free of charge or for nominal consideration are recognised at their fair value when the transferee obtains control over them, irrespective of whether

restrictions or conditions are imposed over the use of the contributions, unless received from another Health Service or agency as a consequence of a restructuring of administrative

arrangements. In the latter case, such transfer will be recognised at carrying value. Contributions in the form of services are only recognised when a fair value can be reliably determined

and the services would have been purchased if not donated.

((gg)) EExxppeennssee rreeccooggnniittiioonn

Expenses are recognised as they are incurred and reported in the financial year to which they relate.

Cost of Goods Sold

Costs of goods sold are recognised when the sale of an item occurs by transferring the cost or value of the item/s from inventories.

Employee expenses

Employee expenses include:

Wages and salaries;

Annual leave;

Sick leave;

Long service leave; and

Superannuation expenses which are reported differently depending upon whether employees are members of defined benefit or defined contribution plans.

Defined contribution superannuation plansIn relation to defined contribution (i.e. accumulation) superannuation plans, the associated expense is simply the employer contributions that are paid or payable in respect of employees

who are members of these plans during the reporting period. Contributions to defined contribution superannuation plans are expensed when incurred.

Defined benefit superannuation plans

The amount charged to the comprehensive operating statement in respect of defined benefit superannuation plans represents the contributions made by the Hospital to the

superannuation plans in respect of the services of current Hospital staff during the reporting period. Superannuation contributions are made to the plans based on the relevant rules of

each plan, and are based on actuarial advice.

Employees of the Hospital are entitled to receive superannuation benefits and the Hospital contributes to both the defined benefit and defined contribution plans. The defined benefit

plan(s) provide benefits based on years of service and final average salary.


30 June 2012

The name and details of the major employee superannuation funds and contributions made by the Hospital are as follows:

Fund Contributions Paid or Payable for theyear

2012 2011$’000 $’000

Defined benefit plans:Health Super 70 69Defined contribution plans:Health Super 640 700Hesta 127 52Total 837 821

Depreciation

Assets with a cost in excess of $1,000 are capitalised and depreciation has been provided on depreciable assets so as to allocate their cost or valuation over their estimated useful lives.

Depreciation is generally calculated on a straight line basis, at a rate that allocates the asset value, less any estimated residual value over its estimated useful life. Estimates of the

remaining useful lives and depreciation method for all assets are reviewed at least annually and adjustments made where appropriate. This depreciation charge is not funded by the

Department of Health.

Depreciation is provided on property, plant and equipment, including freehold buildings, but excluding land and investment properties. Depreciation begins when the asset is available for

use, which is when it is in the location and condition necessary for it to be capable of operating in a manner intended by management.

The following table indicates the expected useful lives of non current assets on which the depreciation charges are based.

2012 2011Buildings- Structure Shell Building Fabric 45 to 60 years 45 to 60 years- Site Engineering Services and Central Plant 20 to 30 years 20 to 30 years

Central Plant- Fit Out 20 to 30 years 20 to 30 years- Trunk Reticulated Building Systems 30 to 40 years 30 to 40 years

Plant & Equipment Up to 10 years Up to 10 yearsMedical Equipment Up to 10 years Up to 10 yearsComputers and Communication 3 years 3 yearsFurniture and Fitting Up to 10 years Up to 10 yearsMotor Vehicles Up to 10 years Up to 10 years

As part of the Buildings valuation, building values were componentised and each component assessed for its useful life which is represented above.

Finance Costs

Finance costs are recognised as expenses in the period in which they are incurred.

Finance costs include:

– interest on bank overdrafts and short-term and long-term borrowings;

– amortisation of discounts or premiums relating to borrowings;

– amortisation of ancillary costs incurred in connection with the arrangement of borrowings; and

– finance charges in respect of finance leases recognised in accordance with AASB 117 Leases.

Resources Provided Free of Charge or for Nominal Consideration

Resources provided or received free of charge or for nominal consideration are recognised at their fair value when the transferee obtains control over them, irrespective of whether

restrictions or conditions are imposed over the use of the contributions, unless received from another Health Service or agency as a consequence of a restructuring of administrative

arrangements. In the latter case, such transfer will be recognised at carrying value. Contributions in the form of services are only recognised when a fair value can be reliably determined

and the services would have been purchased if not donated.

((hh)) FFiinnaanncciiaall IInnssttrruummeennttss

Financial instruments arise out of contractual agreements that give rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Due to the nature of the

Hospital’s activities, certain financial assets and financial liabilities arise under statute rather than a contract. Such financial assets and financial liabilities do not meet the definition of

financial instruments in AASB 132 Financial Instruments: Presentation. For example, statutory receivables arising from taxes, fines and penalties do not meet the definition of financial

instruments as they do not arise under contract.

Where relevant, for note disclosure purposes, a distinction is made between those financial assets and financial liabilities that meet the definition of financial instruments in accordance with

AASB 132 and those that do not.

The following refers to financial instruments unless otherwise stated.

Categories of non-derivative financial instruments

Financial assets and liabilities at fair value through profit or loss

Financial assets are categorised as fair value through profit or loss at trade date if they are classified as held for trading or designated as such upon initial recognition. Financial instrument

assets are designated at fair value through profit or loss on the basis that the financial assets form part of a group of financial assets that are managed by the entity concerned based on

their fair values, and have their performance evaluated in accordance with documented risk management and investment strategies.

Financial instruments at fair value through profit or loss are initially measured at fair value and attributable transaction costs are expensed as incurred. Subsequently, any changes in fair

value are recognised in the net result.

Financial assets held for trading purposes are classified as current assets and are stated at fair value, with any resultant gain or loss recognised in the net result. The net gain or loss

recognised in net result incorporates any dividend or interest earned on the financial asset. Fair value is determined in the manner described in Note 23.



30 June 2012


Loans and receivables

Loans and receivables are financial instrument assets with fixed and determinable payments that are not quoted on an active market. These assets are initially recognised at fair value plus

any directly attributable transaction costs. Subsequent to initial measurement, loans and receivables are measured at amortised cost using the effective interest method, less any

impairment.

Loans and receivables category includes cash and deposits (refer to Note 1(i)), term deposits with maturity greater than three months, trade receivables, loans and other receivables, but

not statutory receivables.

The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interest income over the relevant period. The effective interest rate is the

rate that exactly discounts estimated future cash receipts through the expected life of the financial asset, or, where appropriate, a shorter period.

Held-to-maturity investments

If the Hospital has the positive intent and ability to hold nominated investments to maturity, then such financial assets may be classified as held-to-maturity. Held-to-maturity financial assets

are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition held-to-maturity financial assets are measured at amortised cost using

the effective interest method, less any impairment losses.

The Hospital makes limited use of this classification because any sale or reclassification of more than an insignificant amount of held-to-maturity investments not close to their maturity,

would result in the whole category being reclassified as available-for-sale. The Hospital would also be prevented from classifying investment securities as held-to-maturity for the current and

the following two financial years.

The held-to-maturity category includes certain term deposits and debt securities for which the entity concerned intends to hold to maturity.

Available-for-sale financial assets

Available-for-sale financial instrument assets are those designated as available-for-sale or not classified in any other category of financial instrument asset. Such assets are initially

recognised at fair value. Gains and losses arising from changes in fair value are recognised directly in equity until the investment is disposed of or is determined to be impaired, at which

time the cumulative gain or loss previously recognised in equity is included in net result for the period. Fair value is determined in the manner described in Note 16.

Financial liabilities at amortised cost

Financial instrument liabilities are initially recognised on the date they are originated. They are initially measured at fair value plus any directly attributable transaction costs. Subsequent to

initial recognition, these financial instruments are measured at amortised cost with any difference between the initial recognised amount and the redemption value being recognised in profit

and loss over the period of the interest-bearing liability, using the effective interest rate method.

Financial instrument liabilities measured at amortised cost include all of the Hospital’s contractual payables, deposits held and advances received, and interest-bearing arrangements other

than those designated at fair value through profit or loss.

((ii)) FFiinnaanncciiaall aasssseettssCash and Cash Equivalents

Cash and cash equivalents comprise cash on hand and cash at bank, deposits at call and highly liquid investments with an original maturity of three months or less, which are held for the

purpose of meeting short term cash commitments rather than for investment purposes, which are readily convertible to known amounts of cash and are subject to insignificant risk of

changes in value.

Receivables

Receivables consist of:

- Contractual receivables, which includes mainly debtors in relation to goods and services, loans to third parties, accrued investment income, and finance lease receivables.

- Statutory receivables, which includes predominantly amounts owing from the Victorian Government and GST input tax credits recoverable; and

Receivables that are contractual are classified as financial instruments and categorised as loans and receivables. Statutory receivables are recognised and measured similarly to

contractual receivables (except for impairment), but are not classified as financial instruments because they do not arise from a contract.

Receivables are recognised initially at fair value and subsequently measured at amortised cost, using the effective interest method, less any accumulated impairment.

Trade debtors are carried at nominal amounts due and are due for settlement within 30 days from the date of recognition. Collectability of debts is reviewed on an ongoing basis, and debts

which are known to be uncollectible are written off. A provision for doubtful debts is recognised when there is objective evidence that an impairment loss has occurred. Bad debts are

written off when identified.

Investments and Other Financial Assets

Investments are recognised and derecognised on trade date where purchase or sale of an investment is under a contract whose terms require delivery of the investment within the

timeframe established by the market concerned, and are initially measured at fair value, net of transaction costs.

Investments are classified in the following categories:

- Financial assets at fair value through profit or loss;

- Loans and receivables; and

- Available-for-sale financial assets.

The Hospital classifies its other financial assets between current and non-current assets based on the purpose for which the assets were acquired. Management determines the

classification of its other financial assets at initial recognition.

The Hospital assesses at each balance sheet date whether a financial asset or group of financial assets is impaired.

All financial assets, except those measured at fair value through profit or loss are subject to annual review for impairment.


30 June 2012

Investments accounted for using the equity method

Associates are those entities over which the Hospital exercises significant influence, but not control.

Investments in associates are accounted for using the equity method of accounting. Under the equity method for accounting, the Hospital’s share of the of the post-acquisition profits or

losses of associates is recognised in the net result

and its share of post-acquisition changes in revaluation surpluses and any other reserves, are recognised in both the comprehensive operating statement and the statement of changes in

equity. The cumulative post acquisition movements are adjusted against the cost of the investment.

Joint ventures are contractual arrangements between the Hospital and one or more other party to undertake an economic activity that is subject to joint control. Joint control only exists

when the strategic financial and operating decisions relating to the activity require the unanimous consent of the parties sharing control (the venturers).

Interests in jointly controlled entities are accounted for in the financial statements using the equity method, as applied to investments in associates.

Details of the joint venture are set out in note 20.

Investments in jointly controlled assets and operations

In respect of any interest in jointly controlled assets, the Hospital recognises in the financial statements:its share of jointly controlled assets;

any liabilities that it had incurred;its share of liabilities incurred jointly by the joint venture;

any income earned from the selling or using of its share of the output from the joint venture; andany expenses incurred in relation to being an investor in the joint venture.

For jointly controlled operations the Hospital recognises:

the assets that it controls;the liabilities that it incurs

expenses that it incurs; and

the share of income that it earns from selling outputs of the joint venture

Derecognition of financial assets

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised when:the rights to receive cash flows from the asset have expired; or

the Hospital retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full without material delay to a third party under a ‘pass through’

arrangement; orthe Hospital has transferred its rights to receive cash flows from the asset and either:

(a) has transferred substantially all the risks and rewards of the asset; or

(b) has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

Where the Hospital has neither transferred nor retained substantially all the risks and rewards or transferred control, the asset is recognised to the extent of the Hospital’s continuing

involvement in the asset.

Impairment of Financial Assets

At the end of each reporting period the Hospital assesses whether there is objective evidence that a financial asset or group of financial asset is impaired. All financial instrument assets,

except those measured at fair value through profit or loss, are subject to annual review for impairment.

Receivables are assessed for bad and doubtful debts on a regular basis. Bad debts considered as written off and allowances for doubtful receivables are expensed.

The amount of the allowance is the difference between the financial asset’s carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate.

Where the fair value of an investment in an equity instrument at balance date has reduced by 20 percent or more than its cost price or where its fair value has been less than its cost price

for a period of 12 or more months, the financial asset is treated as impaired.

In order to determine an appropriate fair value as at 30 June 2012 for its portfolio of financial assets, the Hospital obtained a valuation based on the best available advice using an estimated

market value through a reputable financial institution. This value was compared against valuation methodologies provided by the issuer as at 30 June 2012. These methodologies were

critiqued and considered to be consistent with standard market valuation techniques.

In assessing impairment of statutory (non-contractual) financial assets, which are not financial instruments, professional judgement is applied in assessing materiality using estimates,

averages and other computational methods in accordance with AASB 136 Impairment of Assets.

Net Gain/(Loss) on Financial Instruments

Net gain/(loss) on financial instruments includes:

- realised and unrealised gains and losses from revaluations of financial instruments that are designated at fair value through profit or loss or held-for-trading;

- impairment and reversal of impairment for financial instruments at amortised cost; and

- disposals of financial assets.

Revaluations of Financial Instruments at Fair ValueThe revaluation gain/(loss) on financial instruments at fair value excludes dividends or interest earned on financial assets.



30 June 2012


((jj)) NNoonn--ffiinnaanncciiaall aasssseettssInventories

Inventories include goods and other property held either for sale, consumption or for distribution at no or nominal cost in the ordinary course of business operations. It includes land held for

sale and excludes depreciable assets.

Inventories held for distribution are measured at cost, adjusted for any loss of service potential. All other inventories, including land held for sale, are measured at the lower of cost and net

realisable value.

The bases used in assessing loss of service potential for inventories held for distribution include current replacement cost and technical or functional obsolescence. Technical obsolescence

occurs when an item still functions for some or all of the tasks it was originally acquired to do, but no longer matches existing technologies. Functional obsolescence occurs when an item

no longer functions the way it did when it was first acquired.

Cost is assigned to land for sale (undeveloped, under development and developed) and to other high value, low volume inventory items on a specific identification of cost basis.

Cost for all other inventory is measured on the basis of weighted average cost.

Inventories acquired for no cost or nominal considerations are measured at current replacement cost at the date of acquisition.

Non-financial Physical Assets Classified as Held for Sale

Non-financial physical assets and disposal groups and related liabilities are treated as current and are classified as held for sale if their carrying amount will be recovered through a sale

transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable, the asset’s sale (or disposal group) is expected to be completed

within 12 months from the date of classification, and the asset is available for immediate use in the current condition.

Non-financial physical assets (including disposal groups) classified as held for sale are treated as current and are measured at the lower of carrying amount and fair value less costs to sell,

and are not subject to depreciation.

Property, Plant and Equipment

All non-current physical assets are measured initially at cost and subsequently revalued at fair value less accumulated depreciation and impairment. Where an asset is acquired for no or

nominal cost, the cost is its fair value at the date of acquisition.

The initial cost for non-financial physical assets under finance lease is measured at amounts equal to the fair value of the leased asset or, if lower, the present value of the minimum lease

payments, each determined at the inception of the lease.

Crown Land is measured at fair value with regard to the property’s highest and best use after due consideration is made for any legal or constructive restrictions imposed on the asset,

public announcements or commitments made in relation to the intended use of the asset. Theoretical opportunities that may be available in relation to the asset(s) are not taken into account

until it is virtually certain that any restrictions will no longer apply.

Land and Buildings are recognised initially at cost and subsequently measured at fair value less accumulated depreciation and impairment.

Plant, Equipment and Vehicles are recognised initially at cost and subsequently measured at fair value less accumulated depreciation and impairment. Depreciated historical cost is

generally a reasonable proxy for fair value because of the short lives of the assets concerned.

Revaluations of Non-current Physical Assets

Non-current physical assets are measured at fair value and are revalued in accordance with FRD 103D Non-current physical assets. This revaluation process normally occurs at least every

five years, based upon the asset’s Government Purpose Classification, but may occur more frequently if fair value assessments indicate material changes in values. Independent valuers

are used to conduct these scheduled revaluations and any interim revaluations are determined in accordance with the requirements of the FRDs. Revaluation increments or decrements

arise from differences between an asset’s carrying value and fair value.

Revaluation increments are credited directly to the asset revaluation surplus, except that, to the extent that an increment reverses a revaluation decrement in respect of that same class of

asset previously recognised as an expense in net result, the increment is recognised as income in the net result.

Revaluation decrements are recognised immediately as expenses in the net result, except that, to the extent that a credit balance exists in the asset revaluation surplus in respect of the

same class of assets, they are debited directly to the asset revaluation surplus.

Revaluation increases and revaluation decreases relating to individual assets within an asset class are offset against one another within that class but are not offset in respect of assets in

different classes.

Revaluation surplus are normally not transferred to accumulated funds on derecognition of the relevant asset.

In accordance with FRD 103D, the Hospital’s non-current physical assets were assessed to determine whether revaluation of the non-current physical assets was required.

Other non-financial assets

Prepayments

Other non-financial assets include prepayments which represent payments in advance of receipt of goods or services or that part of expenditure made in one accounting period covering a

term extending beyond that period.

Disposal of Non-Financial AssetsAny gain or loss on the sale of non-financial assets is recognised in the comprehensive operating statement at the date that control of the asset is passed to the buyer and is determinedafter deducting from the proceeds the carrying value of the asset at that time.

Impairment of Non-Financial AssetsApart from intangible assets with indefinite useful lives, all other assets are assessed annually

for indications of impairment, except for:

inventories;

financial assets; and

non-current physical assets held for sale.

If there is an indication of impairment, the assets concerned are tested as to whether their carrying value exceeds their possible recoverable amount. Where an asset’s carrying value

exceeds its recoverable amount, the difference is written-off as an expense except to the extent that the write-down can be debited to an asset revaluation surplus amount applicable to that

same class of asset.


30 June 2012

If there is an indication that there has been a change in the estimate of an asset’s recoverable amount since the last impairment loss was recognised, the carrying amount shall be

increased to its recoverable amount. This reversal of the impairment loss occurs only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have

been determined, net of depreciation or amortisation, if no impairment loss had been recognised in

prior years.

It is deemed that, in the event of the loss or destruction of an asset, the future economic benefits arising from the use of the asset will be replaced unless a specific decision to the contrary

has been made. The recoverable amount for most assets is measured at the higher of depreciated replacement cost and fair value less costs to sell. Recoverable amount for assets held

primarily to generate net cash inflows is measured at the higher of the present value of future cash flows expected to be obtained from the asset and fair value less costs to sell.

((kk)) LLiiaabbiilliittiieessPayables

Payables consist of:

contractual payables which consist predominantly of accounts payable representing liabilities for goods and services provided to the Hospital prior to the end of the financial year

that are unpaid, and arise when the Hospital becomes obliged to make future payments in respect of the purchase of those goods and services.

The normal credit terms for accounts payable are usually Nett 30 days.

statutory payables, such as goods and services tax and fringe benefits tax payables.

Contractual payables are initially recognised at fair value, and then subsequently carried at amortised cost. Statutory payables are recognised and measured similarly to contractual

payables, but are not classified as financial instruments and not included in the category of financial liabilities at amortised cost, because they do not arise from a contract.

Borrowings

All borrowings are initially recognised at fair value of the consideration received, less directly attributable transaction costs. The measurement basis subsequent to initial recognition

depends on, whether the Hospital has categorised its borrowings as either, financial liabilities designated at fair value through profit or loss, or financial liabilities at amortised cost. Any

difference between the initial recognised amount and the redemption value is recognised in net result over the period of the borrowing using the effective interest method.

Provisions

Provisions are recognised when the Hospital has a present obligation, the future sacrifice of economic benefits is probable, and the amount of the provision can be measured reliably.

The amount recognised as a liability is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the risks and uncertainties

surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows, using

a discount rate that reflects the time value of money and risks specific to the provision.

When some or all of the economic benefits required to settle a provision are expected to be received from a third party, the receivable is recognised as an asset if it is virtually certain that

recovery will be received and the amount of the receivable can be measured reliably.

Employee Benefits

Wages and Salaries, Annual Leave, Sick Leave and Accrued Days Off

Liabilities for wages and salaries, including non-monetary benefits, annual leave, accumulating sick leave and accrued days off which are expected to be settled within 12 months of the

reporting date are recognised in the provision for employee benefits in respect of employee’s services up to the reporting date, and are classified as current liabilities and measured at

their nominal values.

Those liabilities that are not expected to be settled within 12 months are recognised in the provision for employee benefits as current liabilities, measured at present value of the amounts

expected to be paid when the liabilities are settled using the remuneration rate expected to apply at the time of settlement.

Long Service LeaveThe liability for long service leave (LSL) is recognised in the provision for employee benefits.

Current Liability – unconditional LSL (representing 10 or more years of continuous service) is disclosed in the notes to the financial statements as a current liability even where the

Hospital does not expect to settle the liability within 12 months because it will not have the unconditional right to defer the settlement of the entitlement should an employee take leave

within 12 months.

The components of this current LSL liability are measured at:

present value – component that the Hospital does not expect to settle within 12 months; and

nominal value – component that the Hospital expects to settle within 12 months.

Non-Current Liability – conditional LSL (representing less than 10 years of continuous service) is disclosed as a non-current liability. There is an unconditional right to defer the

settlement of the entitlement until the employee has completed the requisite years of service. Conditional LSL is required to be measured at present value.

Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using interest rates

of Commonwealth Government guaranteed securities in Australia.

Termination Benefits

Termination benefits are payable when employment is terminated before the normal retirement date or when an employee accepts voluntary redundancy in exchange for these benefits.

Liabilities for termination benefits are recognised when a detailed plan for the termination has been developed and a valid expectation has been raised with those employees affected that

the terminations will be carried out. The liabilities for termination benefits are recognised in other creditors unless the amount or timing of the payments is uncertain, in which case they are

recognised as a provision.

On-Costs

Employee benefit on-costs, such as payroll tax, workers compensation and superannuation are recognised together with provisions for employee benefits.

Superannuation liabilities

The Hospital does not recognise any unfunded defined benefit liability in respect of the superannuation plans because the Hospital has no legal or constructive obligation to pay future

benefits relating to its employees; its only obligation is to pay superannuation contributions as they fall due. The Department of Treasury and Finance administers and discloses the State’s

defined benefit liabilities in its financial statements.

Derecognition of financial liabilities

A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires.



30 June 2012

When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an

exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised as an

expense in the estimated consolidated comprehensive operating statement.

((ll)) EEqquuiittyy

Contributed Capital

Consistent with Australian Accounting Interpretation 1038 Contributions by Owners Made to Wholly-Owned Public Sector Entities and FRD 119 Contributions by Owners, appropriations for

additions to the net asset base have been designated as contributed capital. Other transfers that are in the nature of contributions or distributions that have been designated as contributed

capital are also treated as contributed capital.

Property, Plant & Equipment Revaluation Surplus

The asset revaluation surplus is used to record increments and decrements on the revaluation of non-current physical assets.

((mm)) CCoommmmiittmmeennttssCommitments for future expenditure include operating and capital commitments arising from contracts. These commitments are disclosed by way of a note (refer to note 17) at their nominal

value and are inclusive of the goods and services tax (“GST”) payable. In addition, where it is considered appropriate and provides additional relevant information to users, the net present

values of significant individual projects are stated. These future expenditures cease to be disclosed as commitments once the related liabilities are recognised on the balance sheet.

((nn)) CCoonnttiinnggeenntt aasssseettss aanndd ccoonnttiinnggeenntt lliiaabbiilliittiieessContingent assets and contingent liabilities are not recognised in the balance sheet, but are disclosed by way of note and, if quantifiable, are measured at nominal value. Contingent assets

and contingent liabilities are presented inclusive of GST receivable or payable respectively.

((oo)) GGooooddss aanndd SSeerrvviicceess TTaaxx ((““GGSSTT””))Income, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the taxation authority. In this case it is recognised as

part of the cost of acquisition of the asset or as part of the expense.

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the taxation authority is included with

other receivables or payables in the balance sheet.

Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the taxation authority,

are presented as an operating cash flow.

Commitments for expenditure and contingent assets and liabilities are presented on a gross basis.

((pp)) EEvveennttss aafftteerr tthhee rreeppoorrttiinngg ppeerriiooddAssets, liabilities, income or expenses arise from past transactions or other past events. Adjustments are made to amounts recognised in the financial statements for events which occur

after the reporting period and before the date the financial statements are authorised for issue, where those events provide information about conditions which existed in the reporting

period. Note disclosure is made about events between the end of the reporting period and the date the financial statements are authorised for issue where the events relate to conditions

which arose after the end of the reporting period and which may have a material impact on the results of subsequent reporting periods.

((qq)) RRoouunnddiinnggAll amounts shown in the financial statements are expressed to the nearest $1,000.

Minor discrepancies in tables between totals and sum of components are due to rounding.

((rr)) AAAASSss IIssssuueedd tthhaatt aarree nnoott yyeett eeffffeeccttiivveeCertain new Australian accounting standards and interpretations have been published that are not mandatory for the 30 June 2012 reporting period.

As at 30 June 2012, the following standards and interpretations had been issued by the AASB but were not yet effective. They become effective for the first financial statements for

reporting periods commencing after the stated operative dates as detailed in the table below. The Hospital has not and does not intend to adopt these standards early.

Standard/Interpretation Summary Applicable forannualreportingperiodsbeginning on

Impact on public sector entity financial statements

AASB 9 Financial instruments This standard simplifies requirements for the classification andmeasurement of financial assets resulting from Phase 1 of theIASB’s project to replace IAS 39 Financial Instruments: Recognitionand Measurement (AASB 139 Financial Instruments: Recognitionand Measurement).

1 Jan 2013 Detail of impact is still being assessed.

AASB 10 Consolidated FinancialStatements

This Standard establishes principles for the presentation andpreparation of consolidated financial statements when an entitycontrols one or more other entities and supersedes thoserequirements in AASB 127 Consolidated and Separate FinancialStatements and Interpretation 112 Consolidation – Special PurposeEntities.

1 Jan 2013 Not-for-profit entities are not permitted to apply thisStandard prior to the mandatory application date. TheAASB is assessing the applicability of principles inAASB 10 in a not-for-profit context.As such, impact will be assessed after the AASB’sdeliberation.



30 June 2012




AASB 11 Joint Arrangements This Standard requires entities that have an interest in arrangementsthat are controlled jointly to assess whether the arrangement is ajoint operation or joint venture. AASB 11 shall be applied for anarrangement that is a joint operation. It also replaces parts ofrequirements in AASB 131 Interests in Joint Ventures.


AASB 12 Disclosure of Interests inOther Entities

This Standard requires disclosure of information that enables usersof financial statements to evaluate the nature of, and risksassociated with, interests in other entities and the effects of thoseinterests on the financial statements. This Standard replaces thedisclosure requirements in AASB 127 and AASB 131.


AASB 13 Fair Value Measurement This Standard outlines the requirements for measuring the fair valueof assets and liabilities and replaces the existing fair value definitionand guidance in other AASs. AASB 13 includes a ‘fair valuehierarchy’ which ranks the valuation technique inputs into threelevels using unadjusted quoted prices in active markets for identicalassets or liabilities; other observable inputs; and unobservableinputs.

1 Jan 2013 Disclosure for fair value measurements usingunobservable inputs are relatively onerous comparedto disclosure for fair value measurements usingobservable inputs. Consequently, the Standard mayincrease the disclosures for public sector entities thathave assets measured using depreciated replacementcost.

AASB 119 Employee Benefits In this revised Standard for defined benefit superannuation plans,there is a change to the methodology in the calculation ofsuperannuation expenses, in particular there is now a change in thesplit between superannuation interest expense (classified astransactions) and actuarial gains and losses (classified as ‘Othereconomic flows – other movements in equity’) reported on thecomprehensive operating statement.

1 Jan 2013 Not-for-profit entities are not permitted to apply thisStandard prior to the mandatory application date.While the total superannuation expense is unchanged,the revised methodology is expected to have anegative impact on the net result from transactions ofthe general government sector and for those fewVictorian public sector entities that reportsuperannuation defined benefit plans.

AASB 127 Separate FinancialStatements

This revised Standard prescribes the accounting and disclosurerequirements for investments in subsidiaries, joint ventures andassociates when an entity prepares separate financial statements.


AASB 128 Investments in Associatesand Joint Ventures

This revised Standard sets out the requirements for the applicationof the equity method when accounting for investments in associatesand joint ventures.


AASB 1053 Application of Tiers ofAustralian Accounting Standards

This Standard establishes adifferential financial reportingframework consisting of twotiers of reporting requirementsfor preparing general purposefinancial statements.

1 July 2013 The Victorian Government is currently considering theimpacts of Reduced Disclosure Requirements (RDRs)for certain public sector entities and has not decided ifRDRs will be implemented in the Victorian publicsector.

AASB 2009-11 Amendments toAustralian Accounting Standardsarising from AASB 9 [AASB 1, 3, 4, 5,7, 101, 102, 108, 112, 118, 121, 127,128, 131, 132, 136, 139, 1023 and1038 and Interpretations 10 and 12]

This Standard gives effect to consequential changes arising from theissuance of AASB 9.

1 Jan 2013 No significant impact is expected from theseconsequential amendments on entity reporting.

AASB 2010-2 Amendments toAustralian Accounting Standardsarising from Reduced DisclosureRequirements

This Standard makes amendments to many Australian AccountingStandards, including Interpretations, to introduce reduced disclosurerequirements to the pronouncements for application by certain typesof entities.

1 July 2013 The Victorian Government is currently considering theimpacts of Reduced Disclosure Requirements (RDRs)for certain public sector entities and has not decided ifRDRs will be implemented in the Victorian public

AASB 2010-7 Amendments toAustralian Accounting Standardsarising from AASB 9 (December2010) [AASB 1, 3, 4, 5, 7, 101, 102,108, 112, 118, 120, 121, 127, 128,131, 132, 136, 137, 139, 1023 & 1038and Interpretations 2, 5, 10, 12, 19 &127]

These consequential amendments are in relation to the introductionof AASB 9.



30 June 2012




AASB 2010-8 Amendments toAustralian Accounting Standards –Deferred Tax: Recovery of UnderlyingAssets [AASB 112]

This amendment provides a practical approach for measuringdeferred tax assets and deferred tax liabilities when measuringinvestment property by using the fair value model in AASB 140Investment Property.

Beginning1 Jan 2012

This amendment provides additional clarificationthrough practical guidance.

AASB 2010-10 Further Amendmentsto Australian Accounting Standards –Removal of Fixed Dates for First-timeAdopters[AASB 2009-11 & AASB 2010-7]

The amendments ultimately affect AASB 1 First-time Adoption ofAustralian Accounting Standards and provide relief for first-timeadopters of Australian Accounting Standards from having toreconstruct transactions that occurred before their date of transitionto Australian Accounting Standards.

1 Jan 2013 No significant impact is expected on entity reporting.

AASB 2011-2 Amendments toAustralian Accounting Standardsarising from the Trans-TasmanConvergence Project – ReducedDisclosure Requirements[AASB 101 & AASB 1054]

The objective of this amendment is to include some additionaldisclosure from the Trans-Tasman Convergence Project and toreduce disclosure requirements for entities preparing generalpurpose financial statements under Australian Accounting Standards– Reduced Disclosure Requirements.

1 July 2013 The Victorian Government is currently considering theimpacts of Reduced Disclosure Requirements (RDRs)and has not decided if RDRs will be implemented in theVictorian public sector.

AASB 2011-3 Amendments toAustralian Accounting Standards –Orderly Adoption of Changes to theABS GFS Manual and RelatedAmendments [AASB 1049]

This amends AASB 1049 to clarify the definition of the ABS GFSManual, and to facilitate the adoption of changes to the ABS GFSManual and related disclosures.

1 July 2012 This amendment provides clarification to userspreparing the whole of government and generalgovovernment sector financial reports on the version ofthe GFS Manual to be used and what to disclose if thelatest GFS Manual is not used.No impact on departmental or entity reporting.

AASB 2011-4Amendments to AustralianAccounting Standards to RemoveIndividual Key ManagementPersonnel Disclosure Requirements[AASB 124]

This Standard amends AASB 124 Related Party Disclosures byremoving the disclosure requirements in AASB 124 in relation toindividual key management personnel (KMP).

1 July 2013 No significant impact is expected from theseconsequential amendments on entity reporting.

AASB 2011-6Amendments to AustralianAccounting Standards – ExtendingRelief from Consolidation, the EquityMethod and ProportionateConsolidation – Reduced DisclosureRequirements[AASB 127, AASB 128 & AASB 131]

The objective of this Standard is to make amendments to AASB 127Consolidated and Separate Financial Statements, AASB 128Investments in Associates and AASB 131 Interests in Joint Venturesto extend the circumstances in which an entity can obtain relief fromconsolidation, the equity method or proportionate consolidation.


AASB 2011-7 Amendments toAustralian Accounting Standardsarising from the Consolidation andJoint Arrangements Standards[AASB 1, 2, 3, 5, 7, 9, 2009-11, 101,107, 112, 118, 121, 124, 132, 133,136, 138, 139, 1023 & 1038 andInterpretations 5, 9, 16 & 17]

This Standard outlines consequential changes arising from theissuance of the five ‘new Standards’ to other Standards. Forexample, references to AASB 127 Consolidated and SeparateFinancial Statements are amended to AASB 10 ConsolidatedFinancial Statements or AASB 127 Separate Financial Statements,and references to AASB 131 Interests in Joint Ventures are deletedas that Standard has been superseded by AASB 11 and AASB 128(August 2011).


AASB 2011-8Amendments to AustralianAccounting Standards arising fromAASB 13[AASB 1, 2, 3, 4, 5, 7, 9, 2009-11,2010-7, 101, 102, 108, 110, 116, 117,118, 119, 120, 121, 128, 131, 132,133, 134, 136, 138, 139, 140, 141,1004, 1023 & 1038 andInterpretations 2, 4, 12, 13, 14, 17,19, 131 & 132]

This amending Standard makes consequentical changes to a rangeof Standards and Interpretations arising from the issuance of AASB13. In particular, this Standard replaces the existing definition andguidance of fair value measurements in other Australian AccountingStandards and Interpretations.

1 Jan 2013 Disclosures for fair value measurements usingunobservable inputs is potentially onerous, and mayincrease disclosures for assets measured usingdepreciated replacement cost.

AASB 2011-9Amendments to AustralianAccounting Standards – Presentationof Items of Other ComprehensiveIncome[AASB 1, 5, 7, 101, 112, 120, 121,132, 133, 134, 1039 & 1049]

The main change resulting from this Standard is a requirement forentities to group items presented in other comprehensive income(OCI) on the basis of whether they are potentially reclassifiable toprofit or loss subsequently (reclassification adjustments). Theseamendments do not remove the option to present profit or loss andother comprehensive income in two statements, nor change theoption to present items of OCI either before tax or net of tax.

1 July 2012 This amending Standard could change the currentpresentation of ‘Other economic flows- othermovements in equity’ that will be grouped on the basisof whether they are potentially reclassifiable to profit orloss subsequently.No other significant impact will be expected.

AASB 2011-10Amendments to AustralianAccounting Standards arising fromAASB 119 (September 2011)[AASB 1, AASB 8, AASB 101, AASB124, AASB 134, AASB 1049 & AASB2011-8 and Interpretation 14]

This Standard makes consequential changes to a range of otherAustralian Accounting Standards and Interpretaion arising from theissuance of AASB 119 Employee Benefits.



30 June 2012



AASB 2011-11Amendments to AASB 119(September 2011) arising fromReduced Disclosure Requirements

This Standard makes amendments to AASB 119 Employee Benefits(September 2011), to incorporate reduced disclosure requirementsinto the Standard for entities applying Tier 2 requirements inpreparing general purpose financial statements.


AASB 2011-12 Amendments toAustralian Accounting Standardsarising from Interpretation 20[AASB 1]

This Standard makes amendments to AASB 1 First-time Adoption ofAustralian Accounting Standards, as a consequence of the issuanceof IFRIC Interpretation 20 Stripping Costs in the Production Phase ofa Surface Mine. This Standard allows the first-time adopters to applythe transitional provisions contained in Interpretation 20.

1 Jan 2013 There may be an impact for new agencies that adoptAustralian Accounting Standards for the first time.No implication is expected for existing entities in theVictorian public sector.

2011-13 Amendments to AustralianAccounting Standard – Improvementsto AASB 1049

This Standard aims to improve the AASB 1049 Whole ofGovernment and General Government Sector Financial Reporting atthe operational level. The main amendments clarify a number ofrequirements in AASB 1049, including the amendment to allowdisclosure of other measures of key fiscal aggregates as long asthey are clearly distinguished from the key fiscal aggregates and donot detract from the the information required by AASB 1049.Furthermore, this Standard provides additional guidance andexamples on the classification between ‘transactions’ and ‘othereconomic flows’ for GAAP items without GFS equivalents.

1 July 2012 No significant impact is expected from theseconsequential amendments on entity reporting.

2012-1 Amendments to AustralianAccounting Standards - Fair ValueMeasurement - Reduced DisclosureRequirements[AASB 3, AASB 7, AASB 13, AASB140 & AASB 141]

This amending Standard prescribes the reduced disclosurerequirements in a number of Australian Accounting Standards as aconsequence of the issuance of AASB 13 Fair Value Measurement.

1 July 2013 As the Victorian whole of government and the generalgovernment (GG) sector are subject to Tier 1 reportingrequirements (refer to AASB 1053 Application of Tiersof Australian Accounting Standards), the reduceddisclosure requirements included in AASB 2012-1 willnot affect the financial reporting for Victorian whole ofgovernment and GG sector.

AASB Interpretation 20 StrippingCosts in the Production Phase of aSurface Mine

This Interpretation clarifies when production stripping costs shouldlead to the recognition of an asset and how that asset should beinitially and subsequently measured.

1 Jan 2013 No significant impact is expected on entity reporting.

((ss)) CCaatteeggoorryy ggrroouuppssThe Hospital has used the following category groups for reporting purposes for the current and previous financial years.

Admitted Patient Services (Admitted Patients) comprises all recurrent health revenue/expenditure on admitted patient services, where services are delivered in public hospitals, or free

standing day hospital facilities, or alcohol and drug treatment units or hospitals specialising in dental services, hearing and ophthalmic aids.

Mental Health Services (Mental Health) comprises all recurrent health revenue/expenditure on specialised mental Health Services (child and adolescent, general and adult, community

and forensic) managed or funded by the state or territory health administrations, and includes: Admitted patient services (including forensic mental health), outpatient services, emergency

department services (where it is possible to separate emergency department mental Health Services), community-based services, residential and ambulatory services.

Outpatient Services (Outpatients) comprises all recurrent health revenue/expenditure on public hospital type outpatient services, where services are delivered in public hospital outpatient

clinics, or free standing day hospital facilities, or rehabilitation facilities, or alcohol and drug treatment units, or outpatient clinics specialising in ophthalmic aids or palliative care.

Emergency Department Services (EDS) comprises all recurrent health revenue/expenditure on emergency department services that are available free of charge to public patients.

Aged Care comprises revenue/expenditure form Home and Community Care (HACC) programs, Allied Health, Aged Care Assessment and support services.

Primary Health comprises revenue/expenditure for Community Health Services including health promotion and counselling, physiotherapy, speech therapy, podiatry and occupational

therapy.

Off Campus, Ambulatory Services (Ambulatory) comprises all recurrent health revenue/expenditure on public hospital type services including palliative care facilities and rehabilitation

facilities, as well as services provided under the following agreements: Services that are provided or received by hospitals (or area Health Services) but are delivered/received outside a

hospital campus, services which have moved from a hospital to a community setting since June 1998, services which fall within the agreed scope of inclusions under the new system, which

have been delivered within hospital’s i.e. in rural/remote areas.

Residential Aged Care including Mental Health (RAC incl. Mental Health) referred to in the past as psychogeriatric residential services, comprises those Commonwealth-licensed

residential aged care services in receipt of supplementary funding from DH under the mental health program. It excludes all other residential services funded under the mental health

program, such as mental health funded community care units (CCUs) and secure extended care units (SECs).

Other Services excluded from Australian Health Care Agreement (AHCA) (Other) comprises revenue/expenditure for services not separately classified above, including: Public Health

Services including Laboratory testing, Blood Borne Viruses / Sexually Transmitted Infections clinical services, Kooris liaison officers, immunisation and screening services, Drugs services

including drug withdrawal, counselling and the needle and syringe program, Dental Health services including general and specialist dental care, school dental services and clinical

education, Disability services including aids and equipment and flexible support packages to people with a disability, Community Care programs including sexual assault support, early

parenting services, parenting assessment and skills development, and various support services. Health and Community Initiatives also falls in this category group.



30 June 2012

Note 2: Revenue

H.S.A. H.S.A. Non Non Total TotalH.S.A H.S.A

2012 2011 2012 2011 2012 2011$'000 $'000 $'000 $'000 $'000 $'000

Revenue from Operating ActivitiesGovernment Grants

- Department of Health 10,618 9,986 - - 10,618 9,986- State Government - Other- Commonwealth Government

- Residential Aged Care Subsidy 2,610 2,055 - - 2,610 2,055Total Government Grants 13,228 12,041 - - 13,228 12,041

Indirect Contributions by Department of Health- Insurance 24 252 - - 24 252- Long Service Leave 42 112 - - 42 112

Total Indirect Contributions by Department of Health 66 364 - - 66 364

Patient and Resident Fees (refer note 2b) 1,647 1,428 - - 1,647 1,428Hume Rural Health Alliance 111 118 - - 111 118Recoupment from Private Practice for Use of Hospital Facilities 20 21 - - 20 21Total Revenue from Operating Activities 15,072 13,972 - - 15,072 13,972

Commercial Activities & Specific Purpose FundsCatering - - 63 61 63 61Radiology - - 598 629 598 629Hostel - - - - - -Other - - 233 254 233 254Total Commercial Activities & Specific Purpose Funds - - 894 944 894 944

Capital Purpose IncomeState Government Capital Grants- Targeted Capital Works and Equipment - - 234 - 234 -Commonwealth Government Capital Grants - - - - - -Donation and Bequests - - 88 54 88 54Net Gain/(Loss) from Disposal of Non Current Assets (refer note 2c) - - (14) (20) (14) (20)Capital Interest 50 70 - - 50 70Accommodation Bond Revenue - - 246 221 246 221Total Capital Purpose Income 50 70 554 255 604 325

Total Revenue (refer to note 2a) 15,122 14,042 1,448 1,199 16,570 15,241

Indirect contributions by Department of Health:Department of Health makes certain payments on behalf of the hospital (Insurance). These amounts have been brought to account indetermining the operating result for the year by recording them as revenue and expenses.

Total


Note 2a: Analysis of revenue by source(based on the consolidated view of note 2)

RAC Incl.Admitted Mental Mental Aged PrimaryPatients Outpatients EDS Ambulatory Health Health Care Health Other Total

2012 2012 2012 2012 2012 2012 2012 2012 2012 2012$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000

Revenue from Services Supported by HealthServices Agreement

Government Grants- Department of Human Services 8,198 - 1,311 - - 895 214 - - 10,618- Commonwealth Government

- Residential Aged Care Subsidy - - - - - 2,610 - - - 2,610Indirect contributions by Department of HumanServices- Insurance 12 - - - - 12 - - - 24- Long Service Leave 28 - - - - 14 - - - 42Capital Purpose Income (refer note 2) 25 - - - - 25 - - - 50Patient and Resident Fees (refer note 2b) 628 - - - - 967 52 - - 1,647Recoupment from Private Practice for Use ofHospital Facilities 20 - - - - - - - - 20Hume Rural Health Alliance 111 - - - - - - - - 111Total Revenue from Services Supported by Health 9,022 - 1,311 - - 4,523 266 - - 15,122Services Agreement

Revenue from Services Supported by Hospitaland Community InitiativesBusiness Units- Diagnostic Imaging - - - - - - - - 598 598- Catering - - - - - - - - 63 63

Capital Purpose Income - - - - - - - - 308 308Donations & Bequests (non capital)Accommodation Bond Income - - - - - - - - 246 246Others - - - - - - - - 233 233Total Revenue from Services Supported by Hospitaland Community Initiatives - - - - - - - - 1,448 1,448

Total Revenue 9,022 - 1,311 - - 4,523 266 - 1,448 16,570


2011 2011 2011 2011 2011 2011 2011 2011 2011 2011$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000



- Residential Aged Care Subsidy - - - - - 2,055 - - - 2,055Indirect contributions by Department of HumanServices- Insurance 126 - - - - 126 - - - 252- Long Service Leave 70 - - - - 42 - - - 112Capital Purpose Income (refer note 2) 35 - - - - 35 - - - 70Patient and Resident Fees (refer note 2b) 496 - - - - 866 66 - - 1,428


30 June 2012


Note 2b: Patient & resident fees raisedTotal Total2012 2011

$'000 $'000Patient and Resident FeesAcute

-Inpatients 628 496Residential Aged Care

-District Nursing 52 66-Nursing Home 468 464-Hostel 440 402-TCP 59 -

Total Patient and Resident Fees 1,647 1,428

Note 2c: Net gain/(loss) on disposal of non-financial assetsTotal Total

2012 2011$'000 $'000

Proceeds from Disposals of Non-Current AssetsMotor Vehicles 26 32Total Proceeds from Disposal of Non-Current Assets 26 32

Less: Written Down Value of Non-Current Assets SoldMotor Vehicles (40) (52)Total Written Down Value of Non-Current Assets Sold (40) (52)

Net gain/(loss) on Disposal of Non-Financial Assets (14) (20)

- Diagnostic Imaging - - - - - - - - 598 598- Catering - - - - - - - - 63 63

Capital Purpose Income - - - - - - - - 308 308Donations & Bequests (non capital)Accommodation Bond Income - - - - - - - - 246 246Others - - - - - - - - 233 233Total Revenue from Services Supported by Hospitaland Community Initiatives - - - - - - - - 1,448 1,448

Total Revenue 9,022 - 1,311 - - 4,523 266 - 1,448 16,570


2011 2011 2011 2011 2011 2011 2011 2011 2011 2011$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000



- Residential Aged Care Subsidy - - - - - 2,055 - - - 2,055Indirect contributions by Department of HumanServices- Insurance 126 - - - - 126 - - - 252- Long Service Leave 70 - - - - 42 - - - 112Capital Purpose Income (refer note 2) 35 - - - - 35 - - - 70Patient and Resident Fees (refer note 2b) 496 - - - - 866 66 - - 1,428Recoupment from Private Practice for Use ofHospital Facilities 21 - - - - - - - - 21Hume Rural Health Alliance 118 - - - - - - - - 118Total Revenue from Services Supported by Health 8,435 - 1,271 - - 4,095 241 - - 14,042Services Agreement

Revenue from Services Supported by Hospitaland Community InitiativesBusiness Units- Diagnostic Imaging - - - - - - - - 629 629- Catering - - - - - - - - 61 61Capital Purpose Income - - - - - - - - 34 34Donations & Bequests (non capital)Accommodation Bond Income - - - - - - - - 221 221Others - - - - - - - - 254 254Total Revenue from Services Supported by Hospitaland Community Initiatives - - - - - - - - 1,199 1,199

Total Revenue 8,435 - 1,271 - - 4,095 241 - 1,199 15,241

Indirect contributions by Department of Health:Department of Health makes certain payments on behalf of the hospital (Insurance). These amounts have been brought to account indetermining the operating result for the year by recording them as revenue and expenses.

Note 2a: Analysis of revenue by source (Continued)


30 June 2012


Note 3: Expenses

H.S.A. H.S.A. Non H.S.A. Non H.S.A. Total Total2012 2011 2012 2011 2012 2011

$'000 $'000 $'000 $'000 $'000 $'000

Employee ExpensesSalaries & Wages 9,798 9,449 376 379 10,174 9,828WorkCover Premium 226 166 - 1 226 167Long Service Leave 42 112 - - 42 112Superannuation 836 820 1 1 837 821Total Employee Expenses 10,902 10,547 377 381 11,279 10,928

Non Salary Labour CostsFees for Visiting Medical Officers 1,367 1,350 - - 1,367 1,350Agency Costs-Nursing 209 158 - - 209 158Total Non Salary Labour Costs 1,576 1,508 - - 1,576 1,508

Supplies & ConsumablesDrug Supplies 225 215 - - 225 215Medical and Surgical Supplies 476 417 35 32 511 449Food Supplies 462 467 37 38 499 505Total Supplies & Consumables 1,163 1,099 72 70 1,235 1,169

Other ExpensesDomestic Services and Supplies 292 307 4 4 296 311Administrative Expenses 1,112 953 8 8 1,120 961Repairs and Maintenance 400 450 234 233 634 683Fuel, Light & Power 159 154 2 2 161 156Patient Transport 105 141 - - 105 141Bad & Doubtful Debts 5 - - - 5 -Hume Rural Health Alliance 126 134 - - 126 134Audit Fees - VAGO - Audit of Financial Statements 12 12 - - 12 12Depreciation 1,320 1,334 - - 1,320 1,334Total Other Expenses 3,531 3,485 248 247 3,779 3,732

Total Expenses 17,172 16,639 697 698 17,869 17,337

Total


30 June 2012

Note 3a: Analysis of Expenses by Source(based on the consolidated view) RAC Incl.

Admitted Mental Mental Aged PrimaryPatients Outpatients EDS Ambulatory Health Health Care Health Other Total

2012 2012 2012 2012 2012 2012 2012 2012 2012 2012$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000

Services Supported by Health Services AgreementEmployee Expenses

Salaries and Wages 4,456 - 1,181 - - 3,885 276 - - 9,798WorkCover 104 - 24 - - 92 5 - - 225Long Service Leave 28 - - - - 14 - - - 42Superannuation 454 - 106 - - 253 23 - - 836

Non Salary Labour CostsFee for Visiting Medical Officers 1,175 - 140 - - 52 - - - 1,367Agency Costs Nursing 88 - 57 - - 64 - - - 209

Supplies & ConsumablesDrug Supplies 215 - 5 - - - 5 - - 225Medical and Surgical Supplies 432 - 12 - - 26 7 - - 477Food Supplies 126 - - - - 336 - - - 462

Other Expenses from Continuing OperationsDomestic Services and Supplies 192 - 6 - - 94 - - - 292Administrative Expenses 1,029 - 6 - - 68 14 - - 1,117Repairs and Maintenance 260 - 2 - - 135 3 - - 400Fuel, Light & Power 101 - - - - 58 - - - 159Patient Transport 105 - - - - - - - - 105Hume Rural Health Alliance 126 - - - - - - - - 126Audit Fees - VAGO 12 - - - - - - - - 12

Total Expenses from Services Supported by Health ServicesAgreement 8,903 - 1,539 - - 5,077 333 - - 15,852

Services Supported by Hospital and Community InitiativesEmployee Benefits

Salaries and Wages - - - - - - - - 376 376WorkCover - - - - - - - - 1 1Superannuation - - - - - - - - 1 1

Supplies & ConsumablesMedical and Surgical Supplies - - - - - - - - 34 34Food Supplies - - - - - - - - 37 37

Other Expenses from Continuing OperationsDomestic Services and Supplies - - - - - - - - 4 4Administrative Expenses - - - - - - - - 8 8Repairs and Maintenance - - - - - - - - 234 234Fuel, Light & Power - - - - - - - - 2 2

Total Expenses from Services Supported by Hospital andCommunity Initiatives - - - - - - - - 697 697

Depreciation (refer note 4) - - - - - - - - 1,320 1,320

Total Expenses 8,903 - 1,539 - - 5,077 333 - 2,017 17,869


2011 2011 2011 2011 2011 2011 2011 2011 2011 2011$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000

Services Supported by Health Services AgreementEmployee Benefits

Salaries and Wages 4,154 - 1,115 - - 3,931 249 - - 9,449WorkCover 93 - 21 - - 47 5 - - 166Long Service Leave 70 - - - - 42 - - - 112Superannuation 451 - 98 - - 250 21 - - 820

Non Salary Labour CostsFee for Visiting Medical Officers 1,196 - 127 - - 27 - - - 1,350Agency Costs Nursing 67 - 26 - - 65 - - - 158

Supplies & ConsumablesDrug Supplies 197 - 13 - - - 5 - - 215Medical and Surgical Supplies 348 - 32 - - 30 7 - - 417Food Supplies 127 - - - - 339 - - - 466

Other Expenses from Continuing OperationsDomestic Services and Supplies 206 - 1 - - 100 - - - 307Administrative Expenses 779 - 6 - - 166 2 - - 953Repairs and Maintenance 291 - 3 - - 153 - - - 447Fuel, Light & Power 98 - - - - 56 - - - 154Patient Transport 141 - - - - - - - - 141Loss from Hume Rural Health Alliance 134 - - - - - - - - 134Audit Fees - VAGO 12 - - - - - - - - 12

Total Expenses from Services Supported by Health ServicesAgreement 8,364 - 1,442 - - 5,206 289 - - 15,301

Services Supported by Hospital and Community InitiativesEmployee Benefits

Salaries and Wages - - - - - - - - 379 379WorkCover - - - - - - - - 1 1Superannuation - - - - - - - - 1 1

Supplies & ConsumablesMedical and Surgical Supplies - - - - - - - - 32 32Food Supplies - - - - - - - - 39 39

Other Expenses from Continuing OperationsDomestic Services and Supplies - - - - - - - - 4 4Administrative Expenses - - - - - - - - 8 8Repairs and Maintenance - - - - - - - - 236 236Fuel, Light & Power - - - - - - - - 2 2

Total Expenses from Services Supported by Hospital andCommunity Initiatives - - - - - - - - 702 702

Depreciation (refer note 4) - - - - - - - - 1,334 1,334

Total Expenses 8,364 - 1,442 - - 5,206 289 - 2,036 17,337



30 June 2012


Note 3b: Analysis of expenses by internally managed and restricted specific purpose funds forservices supported by hospital and community initiatives

Total Total

2012 2011$'000 $'000

Catering 63 61Radiology 598 629

TOTAL 661 690

Note 4: Depreciation Total Total

2012 2011$'000 $'000

Buildings 1,057 1,057Plant & Equipment 244 259Motor Vehicles 19 18

Total Depreciation 1,320 1,334

Note 5: Cash and cash eqivalents

For the purposes of the Cash Flow Statement, cash assets includes cash on hand and in banks, and short-term deposits which are readilyconvertible to cash on hand, and are subject to an insignificant risk of change in value, net of outstanding bank overdrafts.

Total Total

2012 2011$'000 $'000

CASH IN CONTROL OF THE HOSPITALCash at Bank 36 29Deposits at Call 207 253TOTAL CASH IN CONTROL OF THE HOSPITAL 243 282

Represented by:Cash for Hospital Operations (as per Cash Flow Statement) 184 246Cash - Hume Rural Health Alliance 59 36Total Cash and Cash Equivalents 243 282


30 June 2012

Note 6: ReceivablesTotal Total

2012 2011$'000 $'000

CURRENTContractualInpatient Fees 127 59District Nursing Fees 50 33Aged Care Fees 14 5Simplified Billing 30 5Trade Debtors 233 102Hume Rural Health Alliance 59 100Accrued Revenue 52 48Less Allowance for Doubtful Debts (8) (3)

557 349StatutoryGST Receivable 99 125

99 125TOTAL CURRENT RECEIVABLES 656 474

NON-CURRENTStatutoryLong Service Leave - Department of Health 269 275

TOTAL NON-CURRENT RECEIVABLES 269 275TOTAL RECEIVABLES 925 749

(a) Movement in the Allowance for doubtful debtsTotal Total

2012 2011$'000 $'000

Balance at beginning of year 3 3Amounts written off during the year - -Amounts recovered during the year - -Increase/(decrease) in allowance recognised in net result 5 -Balance at end of year 8 3

(b) Ageing analysis of receivablesPlease refer to note 16(b) for the ageing analysis of receivables

(c ) Nature and extent of risk arising from receivablesPlease refer to note 16(b) for the nature and extent of credit risk arising from contractual receivables



30 June 2012


Note 7: Other financial assets

2012 2011 2012 2011 2012 2011 2012 2011$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000

CURRENT

Australian Dollar Term Deposits > 3 months - - - - 2,964 2,703 2,964 2,703TOTAL OTHER FINANCIAL ASSETS - - - - 2,964 2,703 2,964 2,703

Represented by:Investments - - - - 420 550 420 550Money Held in Trust (refer note 7a) - - - - 2,544 2,153 2,544 2,153TOTAL OTHER FINANCIAL ASSETS - - - - 2,964 2,703 2,964 2,703

(b) Ageing analysis of other financial assetsPlease refer to note 16(b) for the ageing analysis of other financial assets

(c ) Nature and extent of risk arising from other financial assetsPlease refer to note 16(b) for the nature and extent of credit risk arising from other financial assets

TotalOperating Fund Specific Purpose Fund Capital Fund

Note 7a: Monies Held in TrustTotal Total

2012 2011$'000 $'000

CurrentRefundable Entrance Fees 2,544 2,153TOTAL 2,544 2,153

Represented by the following:Investment - Commonwealth Bank Term Deposit 2,544 2,153Total Monies held in trust 2,544 2,153

Note 8: InventoriesTotal Total

2012 2011$'000 $'000

Pharmaceuticals - at cost 38 35Catering Supplies - at cost 20 21Medical and Surgical Lines - at cost 78 56TOTAL INVENTORIES 136 112


30 June 2012

Note 9: Other assetsTotal Total

2012 2011$'000 $'000

Prepayments 4 8Prepayments - Hume Rural Health Alliance 2 2TOTAL OTHER ASSETS 6 10

Note 10: Property, Plant & Equipment

Total Total

2012 2011$'000 $'000

Land

Land at valuation 469 469Less Impairment - -

Total Land 469 469

Buildings

Buildings at valuation 27,347 27,347Less Accumulated Depreciation 19,503 18,446

Total Buildings 7,844 8,901

Plant & Equipment

Plant & Equipment at Fair Value 4,532 4,380Less Accumulated Depreciation 3,134 2,890

Total Plant & Equipment 1,398 1,490

Motor Vehicles

Motor Vehicles at fair value 203 201Less Accumulated Depreciation 46 39

Total Motor Vehicles 157 162

TOTAL PROPERTY, PLANT & EQUIPMENT 9,868 11,022



30 June 2012


Note 10 : Property, plant & equipment (continued)

Reconciliations of the carrying amounts of each class of asset at the beginning and end of the current and previous financial year are set out below.

Crown Freehold Buildings Plant & Motor TotalLand Land Equipment Vehicles

$'000 $'000 $'000 $'000 $'000 $'000Balance at 1 July 2010 469 - 9,958 1,558 156 12,141Additions - - - 191 77 268Disposals - - - - (53) (53)Depreciation expense (note 4) - - (1,057) (259) (18) (1,334)Balance at 1 July 2011 469 - 8,901 1,490 162 11,022Additions - - - 152 54 206Disposals - - - - (40) (40)Depreciation expense (note 4) - - (1,057) (244) (19) (1,320)Balance at 30 June 2012 469 - 7,844 1,398 157 9,868

Land and buildings carried at valuationAn independent valuation of the Hospital's land and buildings was performed by the Valuer-General Victoria to determine the fair value of the land and buildings.The valuation which conforms to Australian Valuation Standards, was determined by reference to the amounts for which assets could be exchanged betweenknowledgable willing parties in an arm's length transaction. The valuation was based on independent assessments.

The effective date of the valuation is 30 June 2012

Plant and Equipment at fair valueA valuation of the hospitals plant and equipment was undetaken by management to determine fair value of the plant and equipment. The effective date of thevaluation is 30 June 2012.

Crown LandThe land upon which the Hospital and Nursing Home is sited was originally granted to the Hospital by the Queen in 1889.It is Crown land permanently reserved for "hospital and offices and conveniences connected therewith".

Note 11: PayablesTotal Total

2012 2011CURRENT $'000 $'000ContractualTrade Creditors 349 424Department of Human Services Wrap Up 47 95Accrued Expenses 178 62Hume Rural Health Alliance 56 61

TOTAL PAYABLES 630 642

(a) Maturity analysis of payablesPlease refer to note 16(c) for the ageing analysis of payables

(b) Nature and extent of risk arising from payablesPlease refer to note 16(c) for the nature and extent of risks arising from contractual payables


30 June 2012

NOTE 12: ProvisionsTotal Total

2012 2011$'000 $'000

Current ProvisionsEmployee Benefits (i)Unconditional and expected to be settled within 12 months (ii) 1,200 961Unconditional and expected to be settled after 12 months (iii) 1,253 1,386Total Current Provisions 2,453 2,347

Non Current ProvisionsEmployee Benefits (i) 467 389Total Non-Current Provisions 467 389Total Provisions 2,920 2,736

(a) Employee Benefits and Related On-Costs

Current Employee Benefits and Related On-CostsUnconditional LSL Entitlement 967 1,003Annual Leave Entitlements 949 1,024Accrued Wages and Salaries 513 295Accrued Days Off 24 25Non-Current Employee Benefits and Related On-CostsConditional Long Service Leave Entitlements 467 389Total Employee Benefits and Related On-Costs 2,920 2,736

(b) Movement in Provisions

Movement in Long Service Leave:Balance at start of year 1,392 899Provisions made during the year 237 595Settlement made during the year (195) (102)Balance at end of year 1,434 1,392

Notes:(i) Provisions for employee benefits consist of amounts for annual leave and long service leave accrued by employeesnot including on-costs.(ii) The amounts disclosed are nominal amounts(iii) The amounts disclosed are discounted to present values

Note 13: Other LiabilitiesTotal Total

2012 2011$'000 $'000

CURRENTMonies Held In TrustAccommodation Bonds 2,544 2,153Total Other Liabilities 2,544 2,153



30 June 2012


Note 14: EquityTotal Total

2012 2011$'000 $'000

(a) SurplusesProperty, Plant & Equipment Revaluation SurplusBalance at the beginning of the reporting period 6,765 6,765Revaluation Increment/(Decrements)- Buildings - -- Land - -

Balance at the end of the reporting period 6,765 6,765

Represented by:Land 469 469Buildings 6,296 6,296

Total Reserves 6,765 6,765

(b) Contributed CapitalBalance at the beginning of the reporting period 4,181 4,181Capital contribution received from Victorian Government - -Capital Repayments - -Balance at the end of the reporting period 4,181 4,181

(c) Accumulated Surpluses/(Deficits)Balance at the beginning of the reporting period (1,599) 497Net Result for the Year (1,299) (2,096)Transfers to and from Surplus - -Balance at the end of the reporting period (2,898) (1,599)

(d) EquityTotal Equity at the beginning of the financial year 9,347 11,443Total Changes in Equity Recognised in the Statement of Recognised Income and Expense (1,299) (2,096)Transactions with the State Government - -Total Equity at the end of financial year 8,048 9,347

Note 15: Reconciliation of net result for the year to net cash inflow/(outflow) from operating activitiesTotal Total

2012 2011$'000 $'000

Net Result for the Year (1,299) (2,096)

Depreciation 1,320 1,334Hume Rural Health Alliance 15 16Net (Gain)/Loss from Sale of Plant and Equipment 14 21Change in Operating Assets & Liabilities

(Increase)/Decrease in Receivables (217) 99(Increase)/Decrease in Other Assets 4 (7)Increase/(Decrease) in Payables 11 (77)Increase/(Decrease) in Provisions 184 328(Increase)/Decrease in Inventories (24) (11)

NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES 8 (393)


30 June 2012

Note 16: Financial Instruments

(a) Financial risk management objectives and policies

The Kilmore and Distict Hospital's financial instruments comprise of:- Cash Assets- Term Deposits- Receivables (excluding statutory receivables)- Payables (excluding statutory payables)- Accommodation Bonds

The main purpose of holding financail instruments is to prudently manage The Kilmore and District Hospital financial risks within the government policy parameters.

Carrying CarryingAmount Amount

2012 2011$'000 $'000

Financial AssetsCash and Cash Equivalents 243 246Trade debtors and accruals 498 249Deposits 2,964 2,703Total Financial Assets (i) 3,705 3,198

Financial LiabilitiesTrade creditors and accruals 574 581Monies Held In Trust 2,544 2,153Total Financial Liabilities (ii) 3,118 2,734

(i) The total amount of financial assets disclosed here excludes statutory receivables (i.e. GST input tax credit recoverable)

(ii) The total amount of financial liabilities disclosed here excludes statutory payables (i.e. Taxes payable)

(b) Credit Risk

Credit quality of contractual financial assets that are neither past due nor impaired

2012 $'000 $'000 $'000 $'000 $'000Financial Assets

Cash and Cash Equivalents 243 - - - 243Receivables -

- Trade Debtors - - - 498 498- Other Receivables (i) - - - -

Other Financial Assets -

- Term Deposit 2,964 - - - 2,964

- Shares in Other Entities - - - - -Total Financial Assets 3,207 - - 498 3,705

2011

Financial Assets

Cash and Cash Equivalents 246 - - - 246Receivables -

- Trade Debtors - - - 249 249

- Other Receivables - - - - -

Other Financial Assets -

- Term Deposit 2,703 - - - 2,703

- Shares in Other Entities - - - - -Total Financial Assets 2,949 - - 249 3,198

Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis onwhich income and expenses are recognised, with respect to each class of financial asset, financial liability and equity instrument are disclosed in note 1to the financial statements.

Categorisation of financial instrumentsDetails of each categories in accordance with AASB 139, shall be disclosed either on the face of the balance sheet or in the notes.

Total

(i) The total amounts disclosed here exclude statutory amounts (e.g. amounts owing from Victorian Government and GST input taxcredit recoverable).

Financialinstitutions(AAA credit

rating)

Governmentagencies

(AAA creditrating)

Governmentagencies

(BBB creditrating)

Credit risk arises from the contractual financial assets of the Hospital, which comprise cash and deposits, non-statutory receivablesand available for sale contractual financial assets. The Hospital’s exposure to credit risk arises from the potential default of a counterparty on their contractual obligations resulting in financial loss to the Hospital. Credit risk is measured at fair value and is monitoredon a regular basis.

Credit risk associated with the Hospital’s contractual financial assets is minimal because the main debtor is the VictorianGovernment. For debtors other than the Government, it is the Hospital’s policy to only deal with entities with high credit ratings of aminimum Triple-B rating and to obtain sufficient collateral or credit enhancements, where appropriate.

In addition, the Hospital does not engage in hedging for its contractual financial assets and mainly obtains contractual financial assetsthat are on fixed interest, except for cash assets, which are mainly cash at bank. As with the policy for debtors, the Hospital’s policyto only deal with banks with high credit ratings.

Provision of impairment for contractual financial assets is recognised when there is objective evidence that the Hospital will not beable to collect a receivable. Objective evidence includes financial difficulties of the debtor, default payments, debts which are morethan 60 days overdue, and changes in debtor credit ratings.

Except as otherwise detailed in the following table, the carrying amount of contractual financial assets recorded in the financialstatements, net of any allowances for losses, represents the Kilmore & District Hospital's maximum exposure to credit risk withouttaking account of the value of any collateral obtained.

Other(min BBB credit

rating)



30 June 2012


Ageing analysis of financial assets as at 30 June

Consol'd Not Past Due Less Than 1-3 3 months - 1-5 ImpairedCarrying and Not 1 Month Months 1 Year Years Financial

Amount Impaired Assets2012 $'000 $'000 $'000 $'000 $'000 $'000 $'000

Financial AssetsCash and Cash Equivalents 243 243 - - - - -Trade debtors and accruals 498 425 19 54 - - -Other receivables 269 269 - - - - -Deposits 2,964 2,964 - - - - -Total Financial Assets 3,974 3,901 19 54 - - -

2011Financial AssetsCash and Cash Equivalents 246 246 - - - - -Trade debtors and accruals 249 232 8 9 - - -Deposits 2,703 2,703 - - - - -

Total Financial Assets 3,198 3,181 8 9 - - -

There are no material financial assets which are individually determined to be impaired. Currently the Hospital does not hold any collateral as security nor credit enhancementsrelating to any of its financial assets.

There are no financial assets that have had their terms renegotiated so as to prevent them from being past due or impaired, and they are stated at the carrying amounts as indicated.The ageing analysis table above discloses the ageing only of contractual finacial assets that are past due but not impaired.

(c) Liquidity Risk

The Kilmore and District Hospital's maximum exposure to liquidity risk is the carrying amounts of financial liabilities as disclosed in the face of the balance sheet.The Hospital managesits liquidity risk as follows:

The Kilmore & District Hospital manages liquidity risk by monitoring cashflows to ensure sufficient funds are maintained in thetransitional bank account to meet liabilities as they fall due. Management monitor liquidity with monthly reports to the Board regarding cashflow position.

The following table discloses the contractual maturity analysis of the Hospital's finacial liabilities. For interest rates applicable to each class of liability refer to individualnotes to the fianacial statements.Maturity analysis of financial liabilities as at 30 June

Contractual Less Than 1-3 3 months - 1-5Carrying Cash Flows 1 Month Months 1 Year Years

Amount2012 $'000 $'000 $'000 $'000 $'000 $'000Financial LiabilitiesTrade creditors and accruals 574 574 574 - - -Monies Held In Trust 2,544 2,544 - - 2,544 -Total Financial Liabilities 3,118 3,118 574 - 2,544 -

2011Financial LiabilitiesTrade creditors and accruals 581 581 581 - - -Monies Held In Trust 2,153 2,153 - - 2,153 -Total Financial Liabilities 2,734 2,734 581 - 2,153 -

(d) Market RiskThe Kilmore & District Hospital's exposures to market risk are primarily through interest rate risk with only insignificant exposure to foreign currency and other price risks. Objectives, policies andprocesses used to manage each of these risks are disclosed in the paragraph below.Currency RiskThe Kilmore & District Hospital is exposed to insignificant foreign currency risk through its payables relating to purchases of supplies and consumables from overseas. This is because of a limitedamount of purchases denominated in foreign currencies and a short timeframe between commitment and settlement.Interest Rate RiskExposure to interest rate risk might arise primarily through the Hospital's interest bearing liabilities. Minimisation of risk is achieved by mainly undertaking fixed rate or non-interest bearing financialinstruments. For financial liabilities,the Hospital mainly undertake financial liabilities with relatively even maturity profiles.

Interest rate exposure of financial assets and liabilities as at 30 JuneWeighted

Average Fixed Variable NonEffective Carrying Interest Interest InterestInterest Amount Rate Rate Bearing

2012 Rates (%) $'000 $'000 $'000 $'000

Financial AssetsCash and Cash Equivalents 4.00% 243 - 243 -Trade debtors and accruals 0.00% 498 - - 498Deposits 4.50% 2,964 2,964 - -

3,705 2,964 243 498

Financial LiabilitiesTrade creditors and accruals 0.00% 574 - - 574Monies Held In Trust 4.50% 2,544 - - 2,544

3,118 - - 3,1182011Financial AssetsCash and Cash Equivalents 4.00% 246 - 246 -Trade debtors and accruals 0.00% 249 - - 249Deposits 5.40% 2,703 2,703 - -

3,198 2,703 246 249

Financial LiabilitiesTrade creditors and accruals 0.00% 581 - - 581Monies Held In Trust 5.40% 2,153 - - 2,153

2,734 - - 2,734

Liquidity risk is the risk that the Hospital would be unable to meet its financial obligations as and when they fall due.

Maturity Dates

Interest Rate Exposure

Past Due But Not Impaired


30 June 2012

Sensitivity Disclosure AnalysisTaking into account past performance, future expectations, economic forecasts, and management's knowledge and experience of the financial markets, the Hospital believes the following movements arereasonably possible' over the next 12 months.- A parallel shift of +1% and -1% in market interest rates (AUD) from year end rates of 6%;- A parallel shift of +1% and -1% in inflation rate from year end rates of 2%

The following table discloses the impact on net operating result and equity for each category of financial instrument held by the Hospital at year end as presented to key management personnel, if changes inrelevant risk occur.

CarryingAmount

Profit Equity Profit Equity2012 $'000 $'000 $'000 $'000Financial AssetsCash and Cash Equivalents 243 (2) (2) 2 2Trade debtors and accruals 498 (5) (5) 5 5Other receivables 269 (3) (3) 3 3Deposits 2,964 (30) (30) 30 30Financial LiabilitiesTrade creditors and accruals 574 (6) (6) 6 6Monies Held In Trust 2,544 (25) (25) 25 25

(71) (71) 71 71Carrying

AmountProfit Equity Profit Equity

2011 $'000 $'000 $'000 $'000Financial AssetsCash and Cash Equivalents 246 (2) (2) 2 2Trade debtors and accruals 249 (2) (2) 2 2Deposits 2,703 (27) (27) 27 27Financial LiabilitiesTrade creditors and accruals 581 (6) (6) 6 6Monies Held In Trust 2,153 (22) (22) 22 22

(59) (59) 59 59

(e) Fair Value

Comparison between carrying amount and fair valueCarrying Fair Value Carrying Fair Value

Amount Amount2012 2012 2011 2011

$'000 $'000 $'000 $'000Financial AssetsCash and Cash Equivalents 243 243 246 246Trade debtors and accruals 498 498 249 249Deposits 2,964 2,964 2,703 2,703Total Financial Assets 3,705 3,705 3,198 3,198

Financial LiabilitiesTrade creditors and accruals 574 574 581 581Monies Held In Trust 2,544 2,544 2,153 2,153Total Financial Liabilities 3,118 3,118 2,734 2,734

The fair values and net fair values of financial instrument assets and liabilities are determined as follows:• Level 1 - the fair value of financial instrument with standard terms and conditions and traded in activeliquid markets are determined with reference to quoted market prices;• Level 2 - the fair value is determined using inputs other than quoted prices that are observable for thefinancial asset or liability, either directly or indirectly; and• Level 3 - the fair value is determined in accordance with generally accepted pricing models based ondiscounted cash flow analysis using unobservable market inputs.

The Hospital considers that the carrying amount of financial instrument assets and liabilities recorded in thefinancial statements to be a fair approximation of their fair values, because of the short-term nature of thefinancial instruments and the expectation that they will be paid in full.

The following table shows that the fair values of most of the contractual financialassets and liabilities are the same as the carrying amounts.

Interest Rate Risk+1%

Interest Rate Risk-1% +1%

-1%

Note 17: Commitments for expenditure

There are no capital or lease commitments at 30 June 2012.

Note 18: Contingent assets & contingent liabilities

There are no known contingent liabilities or assets at balance date that will have a material effect on thefinancial statements.



30 June 2012

Note 19: Operating segments

2012 2011 2012 2011 2012 2011$'000 $'000 $'000 $'000 $'000 $'000

REVENUEExternal Segment Revenue 4,498 4,060 12,022 11,111 16,520 15,171 Total Revenue 4,498 4,060 12,022 11,111 16,520 15,171EXPENSESExternal Segment Expenses 5,077 5,206 12,792 12,131 17,869 17,337 Total Expenses 5,077 5,206 12,792 12,131 17,869 17,337Net Result from ordinary activities (579) (1,146) (770) (1,020) (1,349) (2,166)

Interest Income 25 35 25 35 50 70 Net Result for Year (554) (1,111) (745) (985) (1,299) (2,096)

OTHER INFORMATIONSegment Assets 6,675 7,545 7,467 7,333 14,142 14,878 Unallocated Assets - - - - - - Total Assets 6,675 7,545 7,467 7,333 14,142 14,878

Segment liabilities 3,784 2,982 2,310 2,549 6,094 5,531 Unallocated Liabilities - - - - - - Total Liabilities 3,784 2,982 2,310 2,549 6,094 5,531

Acquisition of property, plant & equipment 77 92 129 179 206 271 Depreciation expense 619 611 701 712 1,320 1,323

The major products/services from which the above segments derive revenue are:

Business Segments ServicesResidential Aged Care Services (RACS) Nursing Home, Hostel & Respite residential aged care services.

Other (Acute Health) Inpatient & outpatient acute health services.

Geographical SegmentThe Kilmore and District Hospital operates predominantly in Kilmore, Victoria. More than 90% of revenue,net surplus from ordinary activities and segment assets relate to operations in Kilmore, Victoria.

RACS Other Total



30 June 2012

Note 20: Jointly controlled operations and assets

Name of Entity Principal Activity 2012 2011% %

Hume Rural Health Alliance Information Systems 4.63 4.58

The Kilmore & District Hospital interest in assets employed in the above jointly controlled operations, assets andliabilities is detailed below. The amounts are included in the financial statements under their respective categories:

2012 2011$'000 $'000

Current AssetsCash and Cash Equivalents 59 36Receivables 59 100Prepayments 2 2Total Current Assets 120 138

Non Current AssetsProperty, Plant and Equipment 2 4Total Non Current Assets 2 4Total Assets 122 142

Current LiabilitiesPayables 56 61Total Current Liabilities 56 61Total Liabilities 56 61

The Kilmore & District Hospital interest in revenues and expenses resulting from jointly controlled operations isdetailed below:

2012 2011$'000 $'000

RevenuesRevenue From Operating Activities 108 115Revenue From Non-Operating Activities 2 3Capital Purpose Income - -Total Revenue 110 118

ExpensesEmployee Benefits 84 72Other Expenses From Continuing Operations 161 177Depreciation 2 1Expenditure Using Capital Funds 9 -Total Expenses 256 250Profit/(Loss) (146) (132)

Ownership Interest


Note 22: Events Occurring after Balance Sheet Date

There were no events occurring after balance date which would have a material effect on the financial statements.

In May 2011 the Member for McEwan announced that $10m would be provided by the Commonwealth towards a $20m redevelopment of the agency with the remaining $10m to be funded by the Victorian Government. The VictorianGovernment is yet to formally commit to funding, though they have advised that it is their intention to do so. It is notexpected that any works will be undertaken in the 2011/2012 financial year.


30 June 2012


Note 21a: Responsible Person Disclosures

In accordance with the Ministerial Directions issued by the Minister for Finance under the Financial Management Act 1994 , the followingdisclosures are made regarding responsible persons for the reporting period.

PeriodResponsible Ministers:The Honourable David Davis, MLC, Minister for Health and Ageing 1/07/2011 - 30/06/2012The Honourable Mary Wooldridge, MLA, Minister for Mental Health 1/07/2011 - 30/06/2012

Governing BoardsJ. Dixon (Chairman) 1/07/2011 - 30/06/2012J. Robinson 1/07/2011 - 30/06/2012S. Durrant 1/07/2011 - 30/06/2012J. McGill 1/07/2011 - 30/06/2012L. Whitehouse 1/07/2011 - 30/06/2012W.R. Arnott 1/07/2011 - 30/06/2012U. Lonnqvist 1/07/2011 - 30/06/2012B. McSherry 1/07/2011 - 30/06/2012G. Sekfy 1/07/2011 - 30/06/2012Accountable OfficerB.G. Ruyter (Chief Executive Officer) 1/07/2011 - 30/06/2012

Remuneration of Responsible Persons:No members of the Governing Board received any remuneration.The number of Responsible Persons are shown in their relevant income bands.

2012 2011Income Band No. No.$180,000 - $189,999 - 1$190,000 - $199,999 1 -Total Numbers 1 1Total remuneration received or due and receivable byResponsible Persons from the Reporting Entity amounted to: $190,234 $181,509Amounts relating to Responsible Ministers are reported in the financial statements of the Department of Premier and Cabinet.

Other Transactions of Responsible Persons and their Related PartiesNo other transactions have been paid by the reporting entity in connection with Responsible Persons and their Related Parties.

Note 21b: Executive officer disclosuresThe numbers of executive officers, other than Ministers and Accountable Officers, and their total remuneration during the reporting period areshown in the first two columns in the table below in their relevant income bands. The base remuneration of executive officers is shown in thethird and fourth columns. Base remuneration is exclusive of bonus payments, long service leave payments, redundancy payments andretirement benefits.

2012 2011 2012 2011No. No. No. No.

$110,000 - $119,999 1 2 1 2$120,000 - $129,999 1 - 1 -Total 2 2 2 2Total Remuneration $238,026 $233,853 $238,026 $233,853

Total

Total Remuneration Base Remuneration

Note 22: Events occurring after balance sheet date

There were no events occurring after balance date which would have a material effect on thefinancial statements.

Note 23: Economic Dependency

The Kilmore & District Hospital is wholly dependent on the continued financial support of the State Government and in particular, the Department of HealtThe Department of Health has provided confirmation that it will continue to provide the Kilmore & District Hospital adequate cash flow support to meetits current and future obligations as and when they fall due for a period up to September 2013.


30 June 2012


DISCLOSURE INDEXThe Annual Report of The Kilmore & District Hospital is prepared in accordance with all Victorian legislation. This index has been prepared to facilitate identification of compliance with statutory disclosure requirements.

Charter and Purpose PageFRD 22C Manner of establishment and the relevant Ministers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6,8FRD 22C Objectives, functions, powers and duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3,4FRD 22C Nature and range of services provided . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3,5

Management StructureFRD 22C Organisational structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6,7

Financial and other informationFRD 10 Disclosure index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .48FRD 11 Disclosure of exgratia payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47FRD 15B Executive officer disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47FRD 21B Responsible person and executive officer disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47FRD 22C Application and operation of Freedom of Information Act 1982 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8FRD 22C Application and operation of Whistleblowers Protection Act 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8FRD 22C Compliance with building and maintenance provisions of Building Act 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8FRD 22C Details of consultancies over $10,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8FRD 22C Details of consultancies under $10,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8FRD 22C Major changes or factors affecting performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2-4FRD 22C Occupational health and safety . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9FRD 22C Operational and budgetary objectives and performance against objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2-4FRD 22C Significant changes in financial position during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2-4,5FRD 22C Statement of availability of other information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .48FRD 22C Statement on National Competition Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8FRD 22C Subsequent events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47FRD 22C Summary of the financial results for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2-4FRD 22C Workforce Data Disclosures including a statement on the application of employment and conduct principles . . . . . . . . . . . . . . . . . . .9FRD 25 Victorian Industry Participation Policy disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8SD 4.2(j) Sign-off requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4SD 3.4.13 Attestation on Data Integrity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8SD 4.5.5 Attestation on Compliance with Australian/New Zealand Risk Management Standard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8

Financial statements required under Part 7 of the Financial Management Act 1994

SD 4.2(a) Statement of changes in equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17SD 4.2(b) Operating statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15SD 4.2(b) Balance sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16SD 4.2(b) Cash flow statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18

Other requirements under Standing Directions 4.2SD 4.2(a) Compliance with Australian accounting standards and other authoritative pronouncements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19SD 4.2(c) Accountable officer’s declaration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12SD 4.2(c) Compliance with Ministerial Directions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19SD 4.2(d) Rounding of amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19

LegislationFreedom of Information Act 1982 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8Whistleblowers Protection Act 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8Victorian Industry Participation Policy Act 2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8Building Act 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8Financial Management Act 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19

Further information may be obtained by contacting this ageny. Contact details are on the cover of the Annual Report


Notes

Documents

THE KILMORE & DISTRICT HOSPITAL · The community sees The Kilmore & District Hospital and Nursing Home as the preferred provider and facilitator for its whole-of-life health related