TPCHF Annual Financial Statements 2011

25Celebrating 25 years

The Prince Charles Hospital Foundation Annual Financial Statements Year ended 30 June 2011

12 September 2011

The Honourable Mr Geoff Wilson MPMinister for HealthGPO Box 48Brisbane Qld 4001

Dear Minister,

I am pleased to present the Annual Report and Annual Financial Statements for the year ended 30 June 2011 for The Prince Charles Hospital Foundation.

I certify that these reports comply with:

• the prescribed requirements of the Financial Accountability Act 2009 and the Financial and Performance Management Standard 2009, and

• the detailed requirements set out in the Annual Report Requirements for Queensland Government Agencies.

A checklist outlining the annual reporting requirements can be accessed on our website at www.tpchfoundation.org.au in the Publications section.

Yours sincerely,

John Hamilton, ChairmanThe Prince Charles Hospital Foundation

Letter of Compliance

©The Prince Charles Hospital Foundation 2011627 Rode Rd Chermside Qld 4032phone: (07) 3139 4636 fax: (07) 3139 4002email: [email protected]

If you have difficulty in understanding this report, you can contact us on (07) 3139 4636 and we will arrange an interpreter to effectively communicate the report to you. The Annual Financial Statements and Annual Report are available online at www.tpchfoundation.org.au in the Publications section.

1Annual Financial Statements for the year ended 30 June 2011

Purpose and Scope

The Prince Charles Hospital Foundation is established by Order in Council under the Hospitals Foundations Act 1982 and is a statutory body within the meaning given in the Financial Accountability Act 2009.

In accordance with the provisions of the Financial Accountability Act 2009 and other prescribed requirements, these statements have been prepared:

The Prince Charles Hospital Foundation

Annual Financial Statements for the year ended 30 June 2011

• To provide an accounting for the custody and management of moneys and resources under the control of the Prince Charles Hospital Foundation; and

• To disclose the results of operations of the Prince Charles Hospital Foundation during the year and to indicate the financial position of the Prince Charles Hospital Foundation at the end of the year.

The Statements are general purpose in nature and reflect the whole of the activities of The Prince Charles Hospital Foundation.

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Statement of Comprehensive Income for the year ended 30 June 2011

2011 2010 Notes $ $ Income from Continuing Operations Revenue Sales - Cafeteria 3,344,058 3,207,074Car park rental- Collocation 2 68,203 66,299 Donations and bequests 1,214,298 1,126,710 Functions and special events 511,843 418,836 Collocation funding income 525,373 509,851 Administration fees 79,600 75,600 Investment income 205,433 162,977Interest income 349,706 280,905 Increase in market value of investments 171,291 11,892Gain on sale of assets 1,906 -

Total Income from Continuing Operations 6,471,711 5,860,144

Expenses from Continuing Operations Depreciation and amortisation 10 44,714 17,041Loss on sale of assets - 3,030Employee expenses 3 1,811,640 1,639,075 Collocation funding expenses 436,638 432,200 Cost of goods sold - Cafeteria 1,626,085 1,675,216 Functions and special events 343,044 346,455 General and administration expenses 490,474 388,660Research grants expenditure 15d 1,138,620 644,157

Total Expenses from Continuing Operations 5,891,215 5,145,834

Surplus before Income Tax 580,496 714,310

Income tax expense 1q - - Operating Result from Continuing Operations 580,496 714,310 Total Other Comprehensive Income for the Year - - Total Comprehensive Income 580,496 714,310

The accompanying notes form part of these statements.



THE PRINCE CHARLES HOSPITAL FOUNDATION Notes to and forming part of the Financial Statements for the year ended 30 June 2011

Annual Financial Statement for the year ended 30 June 2011 Page 3

Statement of Financial Position

As at 30 June 2011

2011 2010 Notes $ $ Current Assets Cash and cash equivalents 5 5,197,200 4,855,937Trade and other receivables 6 361,423 284,165 Inventories 7 35,436 47,812 Other current assets 8 22,880 23,346 Total Current Assets 5,616,939 5,211,260 Non Current Assets Other financial assets 9 4,203,329 4,532,038 Property, plant and equipment 10 689,532 234,240 Total Non Current Assets 4,892,861 4,766,278 Total Assets 10,509,800 9,977,538 Current Liabilities Payables 11 375,189 410,049 Accrued employee benefits 12a 78,143 84,686 Total Current Liabilities 453,332 494,735 Non Current Liabilities Accrued employee benefits 12b 11,514 18,345 Total Non Current Liabilities 11,514 18,345 Total Liabilities 464,846 513,080 Net Assets 10,044,954 9,464,458 Equity Retained surplus 10,044,954 9,464,458 Total Equity 10,044,954 9,464,458 The accompanying notes form part of these statements

Statement of Financial Position as at 30 June 2011



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Statement of Changes in Equity for the year ended 30 June 2011



Statement of Changes in Equity For the Year Ended 30 June 2011

Note 2011 2010 $ $ Retained Surplus Balance 1 July 9,464,458 8,750,148 Operating result from continuing operations 580,496 714,310 Other Comprehensive Income - - Balance 30 June 10,044,954 9,464,458

Statement of Cash Flows For the Year Ended 30 June 2011

2011 2010 Note $ $ Cash Flow from Operating Activities Inflows: Receipts from customers 5,744,125 5,380,740Dividend and trust income received 162,714 100,224Interest receipts 308,030 222,109Outflows: Payments of grants (1,138,620) (644,157)Payments to employees (1,825,014) (1,611,745)Payments to suppliers (2,911,872) (2,876,882)Net cash provided by operating activities 16 339,363 570,289 Cash Flow from Investing Activities Inflows: Proceeds from disposal of investments 500,000 2,729,083Sales of property, plant and equipment 1,906 -Outflows: Payments for property, plant and equipment (500,006) (163,387)Payments for investments - (3,170,000) Net cash used in investing activities 1,900 (604,304) Net increase / (decrease) in cash and cash equivalents 341,263 (34,015)Cash and cash equivalents at beginning of year 4,855,937 4,889,952 Cash and cash equivalents at end of financial year 5 5,197,200 4,855,937




Note 2011 2010 $ $ Retained Surplus Balance 1 July 9,464,458 8,750,148 Operating result from continuing operations 580,496 714,310 Other Comprehensive Income - - Balance 30 June 10,044,954 9,464,458

Statement of Cash Flows For the Year Ended 30 June 2011

2011 2010 Note $ $ Cash Flow from Operating Activities Inflows: Receipts from customers 5,744,125 5,380,740Dividend and trust income received 162,714 100,224Interest receipts 308,030 222,109Outflows: Payments of grants (1,138,620) (644,157)Payments to employees (1,825,014) (1,611,745)Payments to suppliers (2,911,872) (2,876,882)Net cash provided by operating activities 16 339,363 570,289 Cash Flow from Investing Activities Inflows: Proceeds from disposal of investments 500,000 2,729,083Sales of property, plant and equipment 1,906 -Outflows: Payments for property, plant and equipment (500,006) (163,387)Payments for investments - (3,170,000) Net cash used in investing activities 1,900 (604,304) Net increase / (decrease) in cash and cash equivalents 341,263 (34,015)Cash and cash equivalents at beginning of year 4,855,937 4,889,952 Cash and cash equivalents at end of financial year 5 5,197,200 4,855,937


Statement of Cash Flows for the year ended 30 June 2011



Objectives and principal activities of The Prince Charles Hospital Foundation

Notes to and forming part of the Financial Statements for the year ended 30 June 2011


The Prince Charles Hospital Foundation has the principal objective of generating income for medical research at The Prince Charles Hospital. The Foundation specialises in raising money for heart health, cardiac and thoracic research, lung cancer research, cystic fibrosis, mental illness and orthopaedics.

The Prince Charles Hospital Foundation has two additional principal activities, these being: 1. To raise the profile and awareness of The Prince Charles Hospital and its medical excellence.2. To support research work linked to The Prince Charles Hospital via an accountable framework.

Note 1: Summary of Significant Accounting Policies

(a) Statement of Compliance

These financial statements are a general purpose financial statement which have been prepared on an accrual basis in accordance with the Financial Accountability Act 2009, the Financial and Performance Management Standard 2009, Australian Accounting Standards and Interpretations, and other

authoritative pronouncements applicable to not-for-profit entities. The Foundation as a statutory body has also complied with, where relevant, the Queensland Treasurer’s Financial Reporting Requirements.

Except where stated, the historical cost convention is used.

(b) The Reporting Entity

The financial statements cover The Prince Charles Hospital Foundation as an individual entity. The Prince Charles Hospital Foundation is a Statutory Body, incorporated under the Hospitals Foundations Act 1982.

(c) Grants and Contributions

Grants, contributions, donations and gifts that are non-reciprocal in nature are recognised as revenue in the year in which the Foundation obtains control over them. Where grants are received that are reciprocal in nature, revenue is recognised over the term of the funding arrangements.

Contributed assets are recognised at their fair value. Contributions of services are recognised only when a fair value can be determined reliably

and the services would be purchased if they had not been donated.

(d) Cash and Cash Equivalents

For the purposes of the Statement of Financial Position and the Statement of Cash Flows, cash assets include all cash and cheques receipted but not banked at 30 June as well as deposits at call with financial institutions. It also includes cash equivalents that are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes. For an investment to qualify as a cash equivalent it must be readily convertible to a known amount of cash and be subject to an insignificant risk of changes in value.

(e) Receivables

Trade debtors are recognised at the amounts due at the time of sale or service delivery. Settlement of these amounts is required within 30 days from invoice date.

The collectability of receivables is assessed periodically with provision being made for impairment. All known bad debts were written-off as at 30 June.

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Note 1: Summary of significant accounting policies (continued)

(f) Inventories

Inventories held for sale are valued at the lower of cost and net realisable value. Cost is assigned on a weighted average basis and includes expenditure incurred in acquiring the inventories and bringing them to their existing condition, except for training costs which are expensed as incurred. Net realisable value is determined on the basis of the Foundation’s normal selling pattern.

(g) Acquisitions of Assets

Actual cost is used for the initial recording of all non-current physical and intangible asset acquisitions. Cost is determined as the value given as consideration plus costs incidental to the acquisition, including all other costs incurred in getting the assets ready for use, including architects' fees and engineering design fees. However, any training costs are expensed as incurred.

Assets acquired at no cost or for nominal consideration are recognised at their fair value at the date of acquisition.

(h) Property, Plant and Equipment

Plant and equipment is measured on the cost basis less accumulated

depreciation and impairment losses. The carrying amount of plant and equipment is reviewed annually by the Foundation to ensure it is not in excess of the recoverable amount from those assets. The recoverable amount is assessed on the basis of the expected net cash flows which will be received from the assets’ employment and subsequent disposal. The expected net cash flows have not been discounted to present values in determining recoverable amounts.

Minor EquipmentAll plant and equipment with a cost or other value below $2,000 are written off as an expense in the period in which they were acquired.

(i) Revaluations of Non-Current Physical Assets

Plant and equipment and motor vehicles are measured at cost. The carrying amounts for plant and equipment at cost should not materially differ from their fair value.

( j) Depreciation of Property, Plant and Equipment

The depreciable amount of plant and equipment and motor vehicle is depreciated on diminishing value and prime cost basis, commencing from the time the asset is held ready for use. The depreciation rates used for each class of depreciable assets based on their useful lives are:



Plant and equipment and motor vehicles are measured at cost. The carrying amounts for plant and equipment at cost should not materially differ from their fair value. (j) Depreciation of Property, Plant and Equipment The depreciable amount of plant and equipment and motor vehicle is depreciated on diminishing value and prime cost basis, commencing from the time the asset is held ready for use. The depreciation rates used for each class of depreciable assets based on their useful lives are: Note 1: Summary of significant accounting policies (continued) (j) Depreciation of property, plant and equipment (continued)

Class of Fixed Asset Depreciation Rate Range & Method

Leasehold

Improvements 2.5 - 50% PC

Plant and Equipment 10 - 20% PC Motor vehicle 22.5% DV

The assets useful lives are reviewed and adjusted if appropriate at the end of each reporting period. Assets under construction are not depreciated until they are completed and the asset is first put to use or is installed ready for use in accordance with its intended application. These assets are then reclassified to the relevant classes within Property, Plant and Equipment. Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains or losses are included in the statement of comprehensive income. (k) Impairment of Non-Current Assets All non-current physical assets are assessed for indicators of impairment on an annual basis. If an indicator of possible impairment exists, the Foundation determines the asset’s recoverable amount. Any amount by which the asset’s carrying amount exceeds the recoverable amount is recorded as an impairment loss. The asset’s recoverable amount is determined as the higher of the asset’s fair value less costs to sell and depreciated replacement cost. An impairment loss is recognised immediately in the Statement of Comprehensive Income, unless the asset is carried at a revalued amount. When the asset is measured at a revalued amount, the impairment loss is offset against the revaluation surplus of the relevant class to the extent available. Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised, unless the asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation increase. (l) Financial Instruments

The assets’ useful lives are reviewed and adjusted if appropriate at the end of each reporting period.

Assets under construction are not depreciated until they are completed and the asset is first put to use or is installed ready for use in accordance with its intended application. These assets are then reclassified to the relevant classes within Property, Plant and Equipment.

Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains or losses are included in the statement of comprehensive income.

(k) Impairment of Non-Current Assets

All non-current physical assets are assessed for indicators of impairment on an annual basis. If an indicator of possible impairment exists, the Foundation determines the asset’s recoverable amount. Any amount by which the asset’s carrying amount exceeds the recoverable amount is recorded as an impairment loss.




The asset’s recoverable amount is determined as the higher of the asset’s fair value less costs to sell and depreciated replacement cost. An impairment loss is recognised immediately in the Statement of Comprehensive Income, unless the asset is carried at a revalued amount. When the asset is measured at a revalued amount, the impairment loss is offset against the revaluation surplus of the relevant class to the extent available.

Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised, unless the asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation increase.

(l) Financial Instruments

Initial recognition and measurementFinancial instruments, incorporating financial assets and financial liabilities, are recognised when the Foundation becomes a party to the contractual provisions to the instrument. Trade date accounting is adopted for financial assets that are delivered within timeframes

established by marketplace convention. Financial instruments are initially measured at fair value plus transactions costs where the instrument is not classified ‘at fair value through profit or loss’. Transaction costs related to instruments classified as ‘at fair value through profit or loss’ are expensed to profit or loss immediately. Financial instruments are classified and measured as set out below.

Classification and Subsequent MeasurementFinancial instruments are subsequently measured at fair value, amortised cost using the effective interest rate method, or cost. Where available, quoted prices in an active market are used to determine fair value. In other circumstances, valuation techniques are adopted.

Amortised cost is the amount at which the financial asset or financial liability is measured at initial recognition less principal repayments and any reduction for impairment, and adjusted for any cumulative amortisation of the difference between that initial amount and the maturity amount calculated using the effective interest method.

The effective interest method is used to allocate interest income or interest expense over the relevant period and is equivalent to the rate that exactly discounts estimated future cash

payments or receipts (including fees, transaction costs and other premiums or discounts) through the expected life (or when this cannot be reliably predicted, the contractual term) of the financial instrument to the net carrying value of the financial asset or financial liability. Revisions to expected future net cash flows will necessitate an adjustment to the carrying value with a consequential recognition of an income or expense item in profit and loss.

Fair value is determined based on current bid prices for all quote investments. Valuation techniques are applied to determine the fair value for all unlisted securities, including recent arm’s length transactions, reference to similar instruments and option pricing models.

(i) Financial assets at fair value through profit or loss

Financial assets are classified at fair value through profit or loss when they are held for trading for the purpose of short term profit taking, where they are derivatives not held for hedging purposes, or designated as such to avoid an accounting mismatch or to enable performance evaluation where a group of financial assets is managed by key management personnel on a fair value basis in accordance with a documented risk management or investment strategy. Realised and unrealised gains and losses arising from changes in fair value are



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Note 1: Summary of significant accounting policies (continued)(l) Financial Instruments (continued)

included in profit or loss in the period in which they arise.

(ii) Loans and receivablesLoans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are subsequently measured at amortised cost using the effective interest rate method.

(iii) Held-to-maturity investmentsHeld-to-maturity investments are non-derivative financial assets that have fixed maturities and fixed or determinable payments, and it is the Foundation’s intention to hold these investments to maturity. They are subsequently measured at amortised cost using the effective interest rate method.

(iv) Available-for-sale financial assets

Available-for-sale financial assets are non-derivative financial assets that are either designated as such or that are not classified in any of the other categories. They comprise investments in the equity of other entities where there is neither a fixed maturity nor fixed or determinable payments.

They are subsequently measured at fair value with changes in such fair value (that is gains or losses) recognised in other comprehensive income (except for impairment losses and foreign exchange gains and losses). When the financial asset is derecognised, the cumulative gain or loss pertaining to that asset previously recognised in other comprehensive income is reclassified to profit and loss.

(v) Financial liabilitiesNon-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost using the effective interest rate method.

Fair valueFair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to determine the fair value for all unlisted securities, including recent arm’s length transactions, reference to similar instruments and option pricing models.

DerecognitionFinancial assets are derecognised where the contractual rights to receipt of cash flows expires or the asset is transferred to another party whereby the Foundation no longer has any significant continuing involvement in the risks and benefits associated with the asset. Financial liabilities are derecognised where the related

obligations are either discharged, cancelled or expired. The difference between the carrying value of the financial liability extinguished or transferred to another party and the fair value of consideration paid, including the transfer of non-cash assets or liabilities assumed is recognised in profit or loss.

Impairment At each reporting date, the Foundation assesses whether there is objective evidence that a financial instrument has been impaired. In the case of available-for-sale financial instruments, a prolonged decline in the value of the instrument is considered to determine whether impairment has arisen. Impairment losses are immediately recognised in the profit and loss. Also any cumulative decline in fair value previously recognised in other comprehensive income is reclassified to profit and loss at this point.

(m) Payables

Trade creditors are recognised upon receipt of the goods or services ordered and are measured at the agreed purchase/contract price, gross of applicable trade and other discounts. Amounts owing are unsecured and are generally settled on 30 day terms.




(n) Employee Benefits

Wages, Salaries, Annual Leave, Sick Leave and Long Service Leave

Wages and salaries due but unpaid at reporting date are recognised in the Statement of Financial Position at the nominal salary rates. Employer superannuation contributions are regarded as employee benefits. Workers’ compensation insurance is a consequence of employing employees, but is not counted in an employee’s remuneration package. It is not an employee benefit and is recognised separately as an employee- related expense.

As sick leave is non-vesting, an expense is recognised for this leave as it is taken.

Provision is made for the entity’s liability for employee benefits arising from services provided by employees to balance date. Employee benefits expected to be settled within one year together with benefits arising from wages, salaries and annual leave which may be settled after one year, have been measured at amounts expected to be paid when the liability is settled. Other employee benefits payable later than one year have been measured at the net present value.

The default superannuation fund for the Foundation is Sunsuper. All employees are given a choice where

their superannuation contributions are paid. Contributions to employee superannuation plans are charged as expense as the contributions are paid or become payable.

Executive RemunerationKey executive management personnel and remuneration disclosures are made in accordance with the section 5 Addendum (issued in May 2011) to the Financial Reporting Requirements for Queensland Government Agencies issued by Queensland Treasury. Refer to note 4 for the disclosures on key executive management personnel and remuneration.

(o) Provisions

Provisions are recorded when the Foundation has a present obligation, either legal or constructive as a result of a past event. They are recognised at the amount expected at reporting date for which the obligation will be settled in a future period. Where the settlement of the obligation is expected after twelve or more months, the obligation is discounted to the present value using an appropriate discount rate. (p) Insurance

The Foundation’s non-current physical assets and other risks are insured through Blue Broking Insurance, premiums being paid on

a risk assessment basis. In addition, the Foundation pays premiums to WorkCover Queensland in respect of its obligations for employee compensation.

(q) Taxation

The Foundation operates solely as a statutory body as defined under the ITAA 1936 and is exempt from Commonwealth taxation with the exception of Fringe Benefits Tax and Goods and Services Tax (GST).

(r) Issuance of Financial Statement

The financial statements are authorised for issue by the Chairperson and Secretary at the date of signing the Management Certificate.

(s) New and Revised Accounting Standards

The Foundation did not voluntarily change any of its accounting policies during 2010-11.

The Foundation is not permitted to early adopt a new or amended accounting standard ahead of the specified commencement date unless approval is obtained from the Treasury Department. Consequently, the Foundation has not applied any Australian accounting standards and interpretations that have been issued but are not yet effective. The



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Foundation applies standards and interpretations in accordance with their respective commencement dates.

At the date of authorisation of the financial report, significant impacts of new or amended Australian accounting standards with future commencement dates are as set out below.

AASB 2010-4 Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project [AASB 1, AASB 7, AASB 101 & AASB 134 and Interpretation 13] becomes effective from reporting periods beginning on or after 1 January 2011. The Foundation will then need to make changes to its disclosures about credit risk on financial instruments in note 17. No longer will the Foundation need to disclose amounts that best represent an entity’s maximum exposure to credit risk where the carrying amount of the instruments reflects this. If the Foundation holds collateral or other credit enhancements in respect of any financial instrument, it will need to disclose - by class of instrument - the financial extent to which those arrangements mitigate the credit

risk. There will be no need to disclose the carrying amount of financial assets for which the terms have been renegotiated, which would otherwise be past due or impaired.

Also, for those financial assets that are either past due but not impaired, or have been individually impaired, there will be no need to separately disclose details about any associated collateral or other credit enhancements held by the Foundation.

AASB 9 Financial Instruments (December 2010) and AASB 2010-7 Amendments to Australian Accounting Standards arising 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 & 1038 and Interpretations 2, 5, 10, 12, 19 & 127] become effective from reporting periods beginning on or after 1 January 2013. The main impacts of these standards on the Foundation are that they will change the requirements for the classification, measurement and disclosures associated with financial assets. Under the new requirements, financial assets will be more simply classified according to whether they are measured at either amortised cost or fair value. Pursuant to AASB 9, financial assets can only be measured at amortised cost if two conditions are met. One of these conditions is that the asset must be held within

a business model whose objective is to hold assets in order to collect contractual cash flows. The other condition is that the contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

On initial application of AASB 9, the Foundation will need to re-assess the measurement of its financial assets against the new classification and measurement requirements, based on the facts and circumstances that exist at that date. Assuming no change in the types of transactions the Foundation enters into, it is not expected that any of the Foundation’s financial assets will meet the criteria in AASB 9 to be measured at amortised cost. Therefore, as from the 2013-14 financial statements, all of the Foundation’s financial assets will be required to be classified as “financial assets required to be measured at fair value through profit or loss”. The same classification will be used for net gains/losses recognised in the Statement of Comprehensive Income in respect of those financial assets. In the case of the Foundation’s receivables, the carrying amount is considered to be a reasonable approximation of fair value.

AASB 1053 Application of Tiers of Australian Accounting Standards and MSB 2010-2 Amendments to Australian Accounting Standards



Note 1: Summary of significant accounting policies (continued)(s) New and Revised Accounting Standards (continued)


arising from Reduced Disclosure Requirements [AASB 1, Z 3, 5, 7, 8, 101, 102, 107, 108, 110, 111, 112, 116, 117, 119, 121, 123, 124, 127, 128, 131, 133, 134, 136, 137, 138, 140, 141, 1050 & 1052]. Interpretations 2, 4, 5, 15, 17, 127, 129, & 1052 apply to reporting periods beginning on or after 1 July 2013. AASB 1053 establishes a differential reporting framework for those entities that prepare general purpose financial statements, consisting of two tiers of reporting requirements — Australian Accounting Standards (commonly referred to as “tier 1”), and Australian Accounting Standards— Reduced Disclosure Requirements (commonly referred to as “tier 2”).

Tier 1 requirements comprise the full range of AASB recognition, measurement, presentation and disclosure requirements that are currently applicable to reporting entities in Australia. The only difference between the tier 1 and tier 2 requirements is that tier 2 requires fewer disclosures than tier 1. AASB 2010-2 sets out the details of which disclosures in standards and interpretations are not required under tier 2 reporting.

Pursuant to AASB 1053, public sector entities like The Prince Charles Hospital may adopt tier 2 requirements for their general purpose financial statements. However, AASB 1053 acknowledges the power of a regulator to require

application of the tier 1 requirements. In the case of The Prince Charles Hospital Foundation, the Treasury Department is the regulator. Treasury Department has advised that its policy decision is to require all statutory bodies to adopt tier 1 reporting requirements. In compliance with Treasury’s policy which prohibits the early adoption of new or revised accounting standards unless Treasury approval is granted, The Prince Charles Hospital Foundation has not early adopted AASB 1053.

All other Australian accounting standards and interpretations with future commencement dates are either not applicable to the Foundation’s activities, or have no material impact on the Foundation.

(t) Services Received Free of Charge

The Prince Charles Hospital provides office accommodation and associated services free of charge to the Foundation. It has not been practicable to estimate reliably the value of these services. (u) Revenue

Revenue from the sale of goods is recognised upon the delivery of goods to customers.

Donations and bequests are recognised on receipt of the funds

from the donor.Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial asset.

Dividend revenue is recognised when the Foundation has established that it has a right to receive a dividend.

All revenue is stated net of the amount of goods and services tax (GST).

(v) Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the Statement of Financial Position are shown inclusive of GST. GST credits receivable from and GST payable to the Australian Taxation Office are recognised in the statement of financial position.

Cash Flows are presented in the Statement of Cash Flows on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows.



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2011 2010 Note 3: Expenses $ $ Employee Expenses Employee Benefits Wages and salaries 1,589,141 1,458,718 Employer superannuation contributions 139,667 128,902 Employee Related Expenses Worker’s compensation premium 19,821 15,544 Other employee related expenses 63,011 35,911 Total Employee Expenses 1,811,640 1,639,075 No. No. Number of employees at year end 32 30 Auditor’s Fees $ $ Included in general and administrative expenses of the Foundation are audit fees for auditing of the accounts. 11,200 10,600

(w) Comparative Figures

Where required comparative figures have been restated to be consistent with disclosures in the current reporting period.

(x) Key Judgements

The preparation of financial statements necessarily requires the determination and use of certain critical accounting estimates, assumptions, and management judgements that have that potential to cause a material adjustment to the carrying amounts of assets and liabilities within the next financial year. Such estimates, judgements and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in future periods as relevant.

Estimates and assumptions that have a potential significant effect are outlined in the following financial statement notes:

Valuation of Financial Instruments - Note 17Contingencies - Note 15



Note 2: Car Park

The Prince Charles Hospital Car Park is operated under an agreement between Queensland Health and Parking International Group. Under the agreement the Foundation is entitled to a share of collocation revenue. For the year 2011 and in accordance with the collocation agreement this amount has been indexed to $68,203 (2010: $66,299).

Note 3: Expenses

Note 1: Summary of significant accounting policies (continued)


Note 4: Key executive management personnel and remuneration

Key executive management personnel include those positions within the Foundation that have authority and responsibility for planning, directing and controlling the activities of the Foundation. The remuneration and other terms of employment for the key executive management personnel are specified in employment contracts. Remuneration packages for key executive management personnel may comprise short term employee benefits, long term employee benefits, post employment benefits (superannuation) and performance bonuses. There are no non-monetary benefits, long term employee benefits or redundancy payments.

The Chief Executive Officer (CEO) was appointed on 11 February 2008 under a common law contract. The CEO is responsible for the efficient, effective and economic administration of the Foundation.Short term monetary benefits of $156,707 (2010: $142,346), superannuation benefits of $19,588 (2010: $17,783) giving total remuneration of $176,295 (2010: $160,129) were paid to the CEO. The CEO received a performance bonus payment of $8,130 for the achievement of required KPIs (2010: $0).



2011 2010 $ $ Cash on hand 5,700 5,400Cash at bank 519,213 1,793,374Cash on deposit 4,672,287 3,057,163 5,197,200 4,855,937

Note 5: Cash and Cash Equivalents


Note 6: Trade and Other Receivables

(i) Provision for impairment of receivablesCurrent trade receivables are generally on 30-day terms. These receivables are assessed for recoverability and a provision for impairment is recognised when there is objective evidence that an individual trade receivable is impaired. These amounts have been included in other expense items.

Movement in the provision for impairment of receivables:

Trade receivables 44,683 58,266Sundry debtors – collocation payments 96,318 93,473Other miscellaneous receivables 221,922 133,926 362,923 285,665Provision for impairment of receivables (1,500) (1,500) 361,423 284,165

Balance at the beginning of the year 1,500 1,500Amounts written off during the year - -Amounts recovered during the year - -Allowance recognised in profit and loss - -Balance at the end of the year 1,500 1,500

Within trade terms

> 30 Days

Gross Amount

2011 $ $ $ Trade receivables 31,884 12,799 44,683 Sundry Debtors – Collocation payments 48,159 48,159 96,318 Other Miscellaneous Receivables 221,922 - 221,922 301,965 60,958 362,923 2010 Trade receivables 53,240 5,026 58,266 Sundry Debtors – Collocation payments 93,473 - 93,473 Other Miscellaneous Receivables 133,926 - 133,926 280,639 5,026 285,665



Within trade terms

> 30 Days

Gross Amount


14



Note 6: Trade and Other Receivables (continued)

(ii) Credit Risk – Trade and other receivables The Foundation does not have any material credit risk exposure to any single receivable or group of receivables. The Foundation does not hold any collateral over any trade and other receivable.

The following table details the Foundation’s trade and other receivables exposed to credit risk with ageing analysis and impairment provided for thereon. 2011 2010

$ $ Stock on hand - cafeteria - at cost 32,214 40,187Stock on hand – Foundation office - at cost 3,222 7,625 35,436 47,812

Prepayments 7,894 14,746Dividend imputation credits refundable 14,986 8,600 22,880 23,346

Held to maturity Financial Assets:Cash on deposit (Collocation) 1,000,000 1,000,000Cash on deposit - 500,000 1,000,000 1,500,000 Financial assets at fair value through profit and loss Managed Funds 2,730,659 2,572,003Shares in Listed Corporations 472,670 460,035 3,203,329 3,032,038 Total 4,203,329 4,532,038

Note 7: Inventories

Note 8: Other Current Assets

Note 9: Other Financial Assets



Within trade terms

> 30 Days

Gross Amount





Assets under Construction: At cost - 163,387 Less: Accumulated depreciation - - - 163,387Leasehold Improvements: At cost 532,136 - Less: Accumulated amortisation (15,565) - 516,571 -Plant and Equipment: At cost 316,079 184,823 Less: Accumulated depreciation (156,535) (130,808) 159,544 54,015Motor Vehicle: At cost 33,953 33,953 Less: Accumulated depreciation (20,536) (17,115) 13,417 16,838Total 689,532 234,240

Assets under Construction

Leasehold Improvement

Plant and Equipment

Motor Vehicle

Total

$ $ $ $ $ Movements in Carrying Values:

Carrying amount at 1 July 2009

- - 69,794 21,131 90,925

Acquisitions 163,387 - - - 163,387Disposals - - (3,031) - (3,031)Depreciation and amortisation

- - (12,748) (4,293) (17,041)

Carrying amount at 30 June 2010

163,387 - 54,015 16,838 234,240

Acquisitions - 368,749 131,257 - 500,006Re-allocation of Assets (163,387) 163,387 - - -Disposals - - - - -Depreciation and amortisation

- (15,565) (25,728) (3,421) (44,714)

Carrying Amount at 30 June 2011

- 516,571 159,544 13,417 689,532

Note 10: Property, Plant & Equipment

Note 10: Property, Plant & Equipment

16

Note 11: Trade and Other Payables 2011 2010 $ $ a) Current Trade Payables 209,559 289,993 GST Payable 33,412 12,266 Accrued Expenses 132,218 107,790 Total Payables 375,189 410,049 Trade Payables are expected to be paid as follows Less than 6 months 375,189 410,049 6 months to I year - 375,189 410,049 Note 12: Accrued Employee Benefits a) Current Annual (Recreational) Leave 59,764 76,004 Long Service Leave 18,379 8,682 78,143 84,686 b) Non-Current Long Service Leave 11,514 18,345 Total Accrued Employee Benefits 89,657 103,031 Note 13: Capital Commitments Capital expenditure commitments in relation to Breeze Café redevelopment: - not later than 12 months - 493,069 - later than 12 months but not later than 5 years - - - greater than 5 years - - - 493,069

Note 11: Trade and Other Payables

Note 13: Capital Commitments

Note 12: Accrued Employee Benefits



Note 14: Lease Commitments

The Breeze Café premises are leased from The Prince Charles Hospital. The current lease is a five year term commencing on the 1/07/2009 to 30/06/2014. The rent payable is $1.00 (GST-inclusive) per annum. The Foundation’s remaining lease commitment is $3 payable over the next three years.

There is a five year lease renewal option and a holding over clause that states that “If the lessor consents, the lessee may remain in the premises after the end of the term”.

Note 15: Contingencies

(a) Contingent Liability

A payroll withdrawal limit for $60,000 (2010: $60,000) per fortnight has been provided to Westpac Bank in respect of the outsourcing bureau payroll service provided by Automatic Data Processing Pty Ltd T/A Payline.

(b) Contingent Asset

The Foundation is the beneficiary of an established fund held with the Queensland Community Foundation (QCF). All contributions made to this named fund within QCF are held in Trust and invested in perpetuity with net income distributed to the Foundation at the discretion




of the Trustee, in accordance with the Queensland Community Fund Declaration of Trust. The Prince Charles Hospital Foundation received a distribution of $224,940 in 2011 (2010: $190,423).

(c) Other Commitments – Collocation Funds

Balance of Collocation and Car Park Funding as of 30 June 2011 amounting to $2,553,727 (2010: $2,398,359) is to be expended in future years on Research Projects of The Prince Charles Hospital.

(d) Other Commitments – Grants Awarded

Grants that have been approved by the Board, but for which no claim has been made by the grant recipients at 30 June 2011 were $1,637,709 (2010:$1,365,119).

Grant monies drawn down by grant recipients during the year ended 30 June 2011 were $1,138,620 (2010: $644,157).

Note 16: Reconciliation of surplus after income tax to net operating activities

2011 2010 $ $

Surplus from Continuing Operations 580,496 714,310 Depreciation and amortisation expense 44,714 17,041Loss/(Gain) on disposal of plant and equipment (1,906) 3,030Movement in market value of Units/Shares (171,291) (11,892)Dividend & Trust Income reinvested - (20,722)Changes in assets and liabilities: Decrease / (Increase) in receivables (77,259) (139,809)Decrease / (Increase) in inventories 12,376 (8,959)Decrease/ (Increase) in other current assets 467 10,308(Decrease) / Increase in payables (34,860) (20,348)(Decrease) / Increase in accrued employee benefits (13,374) 27,330 Net cash provided by operating activities 339,363 570,289

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Note 17: Financial Instruments

(a) Categorisation of Financial Instruments

The Foundation has the following categories of financial assets and financial liabilities:

Category Note

2011 2010 $ $

Financial Assets

Cash and Cash Equivalents 5 5,197,20

0 4,855,937 Trade Receivables 6 361,423 284,165

Held to Maturity Cash Investments 9 1,000,00

0 1,500,000 Financial assets at fair value through profit and loss 9

3,203,329 3,032,038

9,761,95

2 9,672,140 Financial Liabilities Payables 11 375,189 410,049

Note 17: Financial Instruments (continued) (b) Financial Risk Management (continued) (i) Credit risk (continued)

2011 2010 $ $

Cash and Cash Equivalents 5,191,500 4,850,537 Held to Maturity Financial Assets 1,000,000 1,500,000 6,191,500 6,350,537



(b) Financial Risk Management

The Foundation’s financial instruments consist mainly of deposits with banks, local money market instruments, equity investments, accounts receivable and payable.

Financial Risk Management PoliciesA finance committee consisting of senior Board members meet on a regular basis to analyse financial risk exposure and to evaluate treasury management strategies in the

context of the most recent economic conditions and forecasts.

Specific Financial Risk Exposures and ManagementThe main risks the Foundation is exposed to through its financial instruments are credit risk, liquidity risk and market risk relating to

interest rate risk and equity price risk.The Foundation does not have any derivative instruments at 30 June 2011. The Foundation is not exposed to fluctuations in foreign currencies.

(i) Credit riskCredit risk exposure refers to the situation where the Foundation may incur financial loss as a result of another party to a financial instrument failing to discharge their obligation.

The maximum exposure to credit risk, at balance date to recognised financial assets, is the carrying amount, net of any provisions for impairment of those assets, as disclosed in the Statement of Financial Position and notes to the financial statements. The Foundation does not have any material credit risk exposure to any single receivable or group of receivables under financial instruments entered into by the Foundation.

Credit risk is managed by the Foundation and reviewed regularly by the finance committee.

Note 6 to the financial statements provides an analysis of the credit risk exposure and ageing analysis of trade and other receivables.

The Foundation credit risk exposure in relation to other financial assets is:

Category Note

2011 2010 $ $

Financial Assets

Cash and Cash Equivalents 5 5,197,20

0 4,855,937 Trade Receivables 6 361,423 284,165

Held to Maturity Cash Investments 9 1,000,00

0 1,500,000 Financial assets at fair value through profit and loss 9

3,203,329 3,032,038

9,761,95

2 9,672,140 Financial Liabilities Payables 11 375,189 410,049

Note 17: Financial Instruments (continued) (b) Financial Risk Management (continued) (i) Credit risk (continued)

2011 2010 $ $

Cash and Cash Equivalents 5,191,500 4,850,537 Held to Maturity Financial Assets 1,000,000 1,500,000 6,191,500 6,350,537




Credit risk in relation to these assets is managed by ensuring that amounts are only invested with financial institutions with a sound credit rating.

(ii) Liquidity riskThe Foundation manages liquidity risk by monitoring forecast cash flows and ensuring that adequate funds are available to meet ongoing commitments.

The table below sets out the liquidity risk of financial liabilities of the Foundation. It represents the contractual maturity of financial liabilities. The cash flows realised from financial assets reflects management’s expectation as to the timing of realisation. Actual timing may therefore differ from that disclosed.



Financial liability and financial asset maturity analysis: Within 1 Year 1 to 5 Years Over 5 Years Total 2011 2010 2011 2010 2011 2010 2011 2010 $ $ $ $ $ $ $ $ Financial liabilities due for payment:

Trade and other payables 375,189 410,049 - - - - 375,189 410,049

Financial assets – cash flows realisable:

Cash and cash equivalents 5,197,200 4,855,937 - - - - 5,197,200 4,855,937Trade receivables 361,423 284,165 - - - - 361,423 284,165Total 5,558,623 5,140,102 - - - - 5,558,623 5,140,102

(iii) Market risk (a) Interest rate risk The Foundation’s exposure to interest rate risk is the risk that a financial instruments value and future cash flows will fluctuate as a result of changes in market interest rates. Interest rate risk is managed by using a combination of fixed interest and variable interest rate investments. (b) Price risk The Foundation is exposed to securities price risk on investments held for medium to longer terms. Such risk is managed through diversification of investments across industries and geographic locations. Note 17: Financial Instruments (continued) (b) Financial Risk Management (continued) Sensitivity analysis The Foundation has performed a sensitivity analysis relating to its exposure to changes in interest rates and equity prices at balance date. This sensitivity analysis demonstrates the effect on current year results and equity which could result from a change in these risks. As at balance date, the effect on the surplus and equity as a result of these changes, with all other variables remaining constant, would be as follows: Surplus Equity $ $ Year ended 30 June 2011 — +/- 2% in interest rates +/-129,302 +/-129,302 — +/- 10% in equity prices +/-332,754 +/-332,754 Year ended 30 June 2010 — +/- 2% in interest rates +/-127,137 +/-127,137

— +/- 10% in equity prices +/-321,402 +/-321,402

No sensitivity analysis has been performed for foreign exchange risk, as the Foundation is not exposed to fluctuations in foreign exchange.

Financial liability and financial asset maturity analysis:

(iii) Market risk(a) Interest rate risk

The Foundation’s exposure to interest rate risk is the risk that a financial instruments value and future cash flows will fluctuate as a result of changes in market interest rates.

Interest rate risk is managed by using a combination of fixed interest and variable interest rate investments.

(b) Price riskThe Foundation is exposed to securities price risk on investments held for medium to longer terms. Such risk is managed through diversification of investments across industries and geographic locations.

Sensitivity analysisThe Foundation has performed a sensitivity analysis relating to its

exposure to changes in interest rates and equity prices at balance date. This sensitivity analysis demonstrates the effect on current year results and equity which could result from a change in these risks.

As at balance date, the effect on the surplus and equity as a result of these changes, with all other variables remaining constant, would be as follows:

Surplus Equity $ $ Year ended 30 June 2011 — +/- 2% in interest rates +/-129,302 +/-129,302— +/- 10% in equity

prices +/-332,754 +/-332,754

Year ended 30 June 2010 — +/- 2% in interest rates +/-127,137 +/-127,137

— +/- 10% in equity prices

+/-321,402 +/-321,402

No sensitivity analysis has been performed for foreign exchange risk, as the Foundation is not exposed to fluctuations in foreign exchange.

20

Note 17: Financial Instruments (continued)

(c) Net Fair Values

The net fair values of listed investments have been valued at the quoted market bid price at balance date adjusted for transaction costs expected to be incurred. For other assets and other liabilities the net fair value approximates their carrying value. No financial assets and financial liabilities are readily traded on organised markets in standardised form other than listed investments.



The fair values disclosed in the above table have been determined based on the following methodologies:

(i) Cash and cash equivalents, trade and other receivables, held to maturity assets and trade and other payables are short term instruments in nature whose carrying value is equivalent to fair value.

(ii) For listed financial assets closing quoted bid prices at the balance date are used. In determining fair value for unlisted investments, the exit or redemption values of the managed funds at balance date are used.

2011 2010

Carrying Value

Net Fair Value

Carrying Amount

Net Fair Value

$ $ $ $ Financial assets Cash and cash equivalents 5,197,200 5,197,200 4,855,937 4,855,937

Trade and other receivables 361,423 361,423 284,155 284,155

Held to maturity financial assets

1,000,000 1,000,000 1,500,000 1,500,000

Financial assets at fair value through profit and loss:

- listed investments 472,670 472,670 460,035 460,035

- managed funds 2,730,659 2,730,659 2,572,003 2,572,003

9,761,952 9,761,952 9,672,130 9,672,130

Financial liabilities Trade and Other Payables 375,189 375,189 410,049 410,049

375,189 375,189 410,049 410,049




(d) Fair Value

The recognised fair values of financial assets and liabilities are classified according to the following fair value hierarchy that reflects the significance of the inputs used in making these measurements:

Level 1 – fair values that reflect unadjusted quoted prices in active markets for identical assets/ liabilities;



According to the above hierarchy, the fair values of each class of asset/ liability recognised at fair value are as follows:

Classification according to fair value hierarchy

Class Level 1 $

Level 2 $

Level 3 $

Total Carrying Amount

$

2011 Financial Assets Financial assets at fair value through profit and loss

3,203,329 - - 3,203,329

Total 3,203,329 - - 3,203,329

2010 Financial Assets Financial assets at fair value through profit and loss

3,032,038 - - 3,032,038

Total 3,032,038 - - 3,032,038

Note 18: Events occurring after balance date There were no events affecting the financial position of the Foundation subsequent to 30 June.

Note 18: Events occurring after balance date

There were no events affecting the financial position of the Foundation subsequent to 30 June.

Level 2 – fair values that are based on inputs that are directly or indirectly observable for the asset/ liability (other than unadjusted quoted prices); and

Level 3 – fair values that are derived from data not observable in a market.

According to the above hierarchy, the fair values of each class of asset/ liability recognised at fair value are as follows:

22

These general purpose financial statements have been prepared pursuant to section 62(1) of the Financial Accountability Act 2009 (the Act), relevant sections of the Financial and Performance Management Standard 2009 and other prescribed requirements. In accordance with section 62(1)(b) of the Act we certify that in our opinion:

(a) the prescribed requirements for establishing and keeping the accounts have been complied with in all material respects; and

(b) the statements have been drawn up to present a true and fair view, in accordance with prescribed accounting standards, of the transactions of the Foundation for the financial year ended 30 June 2011 and of the financial position of the Foundation at the end of that year.

Certificate of the FoundationThe Prince Charles Hospital Foundation


Independent Audit ReportThe Prince Charles Hospital Foundation

To the Board of The Prince Charles Hospital Foundation

Report on the Financial Report

I have audited the accompanying financial report of The Prince Charles Hospital Foundation which comprises the statement of financial position as at 30 June 2011, and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year ended on that date, a summary of significant accounting policies, other explanatory notes and certificates given by the Board and officer responsible for the financial administration of The Prince Charles Hospital Foundation.

The Board’s Responsibility for the Financial Report

The Board is responsible for the preparation and fair presentation of the financial report in accordance with prescribed accounting requirements identified in the Financial Accountability Act 2009 and the Financial and Performance Management Standard 2009, including compliance with applicable Australian Accounting Standards.

The Board’s responsibility also includes such internal control as the Board determines is necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

My responsibility is to express an opinion on the financial report based on the audit. The audit was conducted in accordance with Auditor-General of Queensland Auditing Standards, which incorporate the Australian Auditing Standards. These auditing standards require compliance with relevant ethical requirements relating to audit engagements and that the audit is planned and performed to obtain reasonable assurance whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgment, including the assessment of risks of material misstatement in the financial report, whether due to fraud or error. In making those risk

assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control, other than in expressing an opinion on compliance with prescribed requirements. An audit also includes evaluating the appropriateness of accounting policies and the reasonableness of accounting estimates made by the Board, as well as evaluating the overall presentation of the financial report including any mandatory financial reporting requirements as approved by the Treasurer for application in Queensland.

I believe that the audit evidence obtained is sufficient and appropriate to provide a basis for my audit opinion.

Independence

The Auditor-General Act 2009 promotes the independence of the Auditor General and all authorised auditors. The Auditor-General is the auditor of all Queensland public

24

sector entities and can only be removed by Parliament.

The Auditor-General may conduct an audit in any way considered appropriate and is not subject to direction by any person about the way in which audit powers are to be exercised. The Auditor-General has for the purposes of conducting an audit, access to all documents and property and can report to Parliament matters which in the Auditor-General’s opinion are significant.

Auditor’s Opinion

In accordance with s.40 of the Auditor General Act 2009 –(a) I have received all the information and explanations which I have required; and(b) in my opinion – (i) the prescribed requirements in respect of the establishment and keeping of accounts have been complied with in all material respects; and (ii) the financial report has been drawn up so as to present a true and

Independent Audit Report (continued)The Prince Charles Hospital Foundation

fair view, in accordance with the prescribed accounting standards of the transactions of The Prince Charles Hospital Foundation for the financial year 1 July 2010 to 30 June 2011 and of the financial position as at the end of that year.


Purpose and Scope

The Prince Charles Hospital Foundation Trust was created in accordance with the Trust Deed dated 21st September 1998.

In accordance with the provisions of the Trust Deed and other prescribed requirements, these statements have been prepared:

Annual Financial Statements for the year ended 30 June 2011The Prince Charles Hospital Foundation Trust

• To provide an accounting for the custody and management of moneys and resources under the control of the Prince Charles Hospital Foundation Trust; and

• To disclose the results of operations of The Prince Charles Hospital Foundation Trust during the year and to indicate the financial position of The Prince Charles Hospital Foundation Trust at the end of the year.

The Statements are general purpose in nature and reflect the whole of the activities of The Prince Charles Hospital Foundation Trust.

26

The Prince Charles Hospital Foundation TrustTHE PRINCE CHARLES HOSPITAL FOUNDATION TRUST



Statement of Comprehensive Income For the Year Ended 30 June 2011

2011 2010 Note $ $ Income from Continuing Operations Revenue Donations and research income 2 875,105 417,872Interest 86,723 49,146 Total Income from Continuing Operations 961,828 467,018 Expenses from Continuing Operations Bank charges 263 124Administration charges 15,200 13,200Audit fees 2,250 2,726Specific purpose payments 3 448,647 490,617 Total Expenses from Continuing Operations 466,360 506,667 Surplus/(Deficit) before Income Tax 495,468 (39,649)

Income Tax Expense 1h - - Operating Result from Continuing Operations 495,468 (39,649) Total Other Comprehensive Income - - Total Comprehensive Income 495,468 (39,649) The accompanying notes form part of these statements

Statement of Comprehensive Income for the year ended 30 June 2011

The accompanying notes form part of these statements


The Prince Charles Hospital Foundation Trust

THE PRINCE CHARLES HOSPITAL FOUNDATION TRUST Notes to and forming part of the Financial Statements for the year ended 30 June 2011


Statement of Financial Position As at 30 June 2011

Note 2011 2010 $ $ Current Assets Cash and cash equivalents 4 1,779,000 1,124,531Trade and other receivables 5 23,274 134,781 Total Current Assets 1,802,274 1,259,312 Total Assets 1,802,274 1,259,312 Current Liabilities Trade and other payables 6 159,880 112,386 Total Current Liabilities 159,880 112,386 Net Assets 1,642,394 1,146,926 Equity Retained surplus 1,642,394 1,146,926 Total Equity 1,642,394 1,146,926


Statement of Financial Position as at 30 June 2011


28




2011 2010 Note $ $ Retained Surplus Balance 1 July 1,146,926 1,186,575 Operating Result from Continuing Operations 495,468 (39,649) Other comprehensive income - - Balance 30 June 1,642,394 1,146,926

Statement of Cash Flows

For the Year Ended 30 June 2011 Note 2011 2010 $ $ Cash Flow from Operating Activities Inflows: Donations and research income 994,231 324,558Interest receipts 97,737 36,000 Outflows: Specific purpose payments (419,886) (415,462)Supplies and services (17,613) (16,050) Net cash provided by (used in) operating activities 7 654,469 (70,954) Net increase (decrease) in cash and cash equivalents 654,469 (70,954)Cash and cash equivalents at the beginning of the year 1,124,531 1,195,485 Cash and cash equivalents at end of financial year 4 1,779,000 1,124,531

Statement of Cash Flows for the year ended 30 June 2011

Statement of Changes in Equity for the year ended 30 June 2011




The Prince Charles Hospital Foundation Trust is an associated Trust of The Prince Charles Hospital Foundation, which has 3 objectives implemented across 34 different hospital medical program areas.

These are:1. to support immediate patient needs; 2. to participate in health promotion and prevention; and3. to support program-specific research, equipment and education requirements.

Note 1: Summary of Significant Accounting Policies

(a) Basis of Accounting

These financial statements are a general purpose financial statement, which have been prepared on an accrual basis in accordance with Australian Accounting Standards and interpretations adopted by the Australian Accounting Standards Board and other authoritative pronouncements.

With respect to compliance with Australian Accounting Standards and



Interpretations, the Trust has applied those requirements applicable to not-for-profit entities.

Except where stated, the historical cost convention is used.

(b) The Reporting Entity

The financial statements cover The Prince Charles Hospital Foundation Trust as an individual entity. The Prince Charles Hospital Foundation Trust is established pursuant to the Trust Deed dated 21 September 1998.

(c) Grants and Contributions

Grants, contributions, donations and gifts that are non-reciprocal in nature are recognised as revenue in the year in which the Trust obtains control over them. Where grants are received that are reciprocal in nature, revenue is accrued over the term of the funding arrangements.

Contributed assets are recognised at their fair value. Contributions of services are recognised only when a fair value can be determined reliably and the services would be purchased if they had not been donated.

(d) Cash and Cash Equivalents

For the purposes of the Statement of Financial Position and the Statement of Cash Flows, cash assets include all cash and cheques receipted but not banked at 30 June as well as deposits at call with financial institutions. It also includes investments with a maturity date of less than 90 days after year end that are readily convertible to cash on hand at the Trust’s or issuer's option and that are subject to a low risk of changes in value.

(e) Receivables

Trade debtors are recognised at the amounts due at the time of sale or service delivery. Settlement of these amounts is required within 30 days from invoice date.

The collectability of receivables is assessed periodically with provision being made for impairment. All known bad debts were written-off as at 30 June.

(f) Financial Instruments

Initial recognition and measurementFinancial instruments, incorporating financial assets and financial

Objectives and principal activities of The Prince Charles Hospital Foundation Trust

30



Note 1: Summary of Significant Accounting Policies (continued)(f) Financial Instruments (continued)

liabilities, are recognised when the Trust becomes a party to the contractual provisions to the instrument. Trade date accounting is adopted for financial assets that are delivered within timeframes established by marketplace convention. Financial instruments are initially measured at fair value plus transactions costs where the instrument is not classified ‘at fair value through profit or loss’. Transaction costs related to instruments classified as ‘at fair value through profit or loss’ are expensed to profit or loss immediately. Financial instruments are classified and measured as set out below.

Classification and Subsequent MeasurementFinancial instruments are subsequently measured at fair value, amortised cost using the effective interest rate method, or cost. Where available, quoted prices in an active market are used to determine fair value. In other circumstances, valuation techniques are adopted.

Amortised cost is the amount at which the financial asset or financial liability is measured at initial recognition less principal repayments and any reduction for impairment,

and adjusted for any cumulative amortisation of the difference between that initial amount and the maturity amount calculated using the effective interest method.

The effective interest method is used to allocate interest income or interest expense over the relevant period and is equivalent to the rate that exactly discounts estimated future cash payments or receipts (including fees, transaction costs and other premiums or discounts) through the expected life (or when this cannot be reliably predicted, the contractual term) of the financial instrument to the net carrying value of the financial asset or financial liability. Revisions to expected future net cash flows will necessitate an adjustment to the carrying value with a consequential recognition of an income or expense item in profit and loss.

Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to determine the fair value for all unlisted securities, including recent arm’s length transactions, reference to similar instruments and option pricing models.


Financial assets are classified at fair value through profit or loss when they are held for trading for the purpose of short term profit taking, where they

are derivatives not held for hedging purposes, or designated as such to avoid an accounting mismatch or to enable performance evaluation where a group of financial assets is managed by key management personnel on a fair value basis in accordance with a documented risk management or investment strategy. Realised and unrealised gains and losses arising from changes in fair value are included in profit or loss in the period in which they arise.


(iii) Held-to-maturity investmentsHeld-to-maturity investments are non-derivative financial assets that have fixed maturities and fixed or determinable payments, and it is the Trust’s intention to hold these investments to maturity. They are subsequently measured at amortised cost using the effective interest rate method.


Available-for-sale financial assets are non-derivative financial assets that are either designated as such or that are not classified in any of


the other categories. They comprise investments in the equity of other entities where there is neither a fixed maturity nor fixed or determinable payments.

They are subsequently measured at fair value with changes in such fair value (that is gains or losses) recognised in other comprehensive income (except for impairment losses and foreign exchange gains and losses). When the financial asset is derecognised, the cumulative gain or loss pertaining to that asset previously recognised in other comprehensive income is reclassified to profit and loss.



DerecognitionFinancial assets are derecognised where the contractual rights to receipt of cash flows expires or the

asset is transferred to another party whereby the Trust no longer has any significant continuing involvement in the risks and benefits associated with the asset. Financial liabilities are derecognised where the related obligations are either discharged, cancelled or expire. The difference between the carrying value of the financial liability extinguished or transferred to another party and the fair value of consideration paid, including the transfer of non-cash assets or liabilities assumed is recognised in profit or loss.

Impairment At each reporting date, the Trust assesses whether there is objective evidence that a financial instrument has been impaired. In the case of available-for-sale financial instruments, a prolonged decline in the value of the instrument is considered to determine whether impairment has arisen. Impairment losses are immediately recognised in the profit and loss. Also any cumulative decline in fair value previously recognised in other comprehensive income is reclassified to profit and loss at this point.

Classification and Subsequent Measurement


Financial assets are classified at fair value through profit or loss when they are held for trading for the purpose of

short term profit taking, where they are derivatives not held for hedging purposes, or designated as such to avoid an accounting mismatch or to enable performance evaluation where a group of financial assets is managed by key management personnel on a fair value basis in accordance with a documented risk management or investment strategy. Realised and unrealised gains and losses arising from changes in fair value are included in profit or loss in the period in which they arise.


(iii) Held-to-maturity investmentsHeld-to-maturity investments are non-derivative financial assets that have fixed maturities and fixed or determinable payments, and it is the Trust’s intention to hold these investments to maturity. They are subsequently measured at amortised cost using the effective interest rate method.



32



Note 1: Summary of Significant Accounting Policies (continued)(f) Financial Instruments -Classification and Subsequent Measurement (continued)


Available-for-sale financial assets are non-derivative financial assets that are either designated as such or that are not classified in any of the other categories. They comprise investments in the equity of other entities where there is neither a fixed maturity nor fixed or determinable payments. They are subsequently measured at fair value with changes in such fair value (ie gains or losses) recognised in other comprehensive income.



DerecognitionFinancial assets are derecognised where the contractual rights to receipt of cash flows expires or the asset is transferred to another party whereby the Trust no longer has any significant continuing involvement in the risks and benefits associated with the asset. Financial liabilities are derecognised where the related obligations are either discharged, cancelled or expire. The difference between the carrying value of the financial liability extinguished or transferred to another party and the fair value of consideration paid, including the transfer of non-cash assets or liabilities assumed is recognised in profit or loss.

ImpairmentAt each reporting date, the Trust assesses whether there is objective evidence that a financial instrument has been impaired. In the case of available-for-sale financial instruments, a prolonged decline in the value of the instrument is considered to determine whether impairment has arisen. Impairment losses are recognised in the Statement of Comprehensive Income.

(g) Payables

Trade creditors are recognised upon receipt of the goods or services ordered and are measured at the agreed purchase/contract price, gross of applicable trade and other

discounts. Amounts owing are unsecured and are generally settled on 30 day terms. (h) Taxation

The Trust operates solely as a non-for-profit entity and is exempt from Commonwealth taxation with the exception of Fringe Benefits Tax and Goods and Services Tax (GST).

(i) Issuance of Financial Statement

The financial statements are authorised for issue by the President and Secretary at the date of signing the Management Certificate.

( j) Services Received Free of Charge

The Prince Charles Hospital provides office accommodation and associated services free of charge to the Foundation Trust. It has not been practicable to estimate reliably the value of these services.

(k) Revenue

Revenue from the sale of goods is recognised upon the delivery of goods to customers.

Donations are recognised on receipt of the funds from the donor.Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial asset.




All revenue is stated net of the amount of goods and services tax (GST).

(l) Distribution of Funds

Funds are distributed to various hospital departments after receiving an approved purchase requisition signed by both a Medical Director and the Chairperson of The Prince Charles Hospital Foundation Trust.

(m) Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the Statement of Financial Position are shown inclusive of GST. GST credits receivable from and GST payable to the Australian Taxation Office are recognised in the statement of financial position (refer notes 5 and 6).

Cash Flows are presented in the Statement of Cash Flows on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows.

(n) Comparative Figures

Where required comparative figures have been restated to be consistent with disclosures in the current reporting period.

(o) New and Revised Accounting Standards

The Trust did not voluntarily change any of its accounting policies during 2010-11.

Consequently, the Trust has not applied any Australian accounting standards and interpretations that have been issued but are not yet effective. The Trust applies standards and interpretations in accordance with their respective commencement dates.

At the date of authorisation of the financial report, the only significant impacts of new or amended Australian accounting standards with future commencement dates are as set out below.

AASB 2010-4 Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project [AASB 1, AASB 7, AASB 101 & AASB 134 and Interpretation 13] becomes effective from reporting periods beginning on or after 1 January 2011. The Trust will then need to make changes to its disclosures about credit risk on

financial instruments in note 5 and 9. No longer will the Trust need to disclose amounts that best represent an entity’s maximum exposure to credit risk where the carrying amount of the instruments reflects this. If the Trust holds collateral or other credit enhancements in respect of any financial instrument, it will need to disclose - by class of instrument - the financial extent to which those arrangements mitigate the credit risk. There will be no need to disclose the carrying amount of financial assets for which the terms have been renegotiated, which would otherwise be past due or impaired.

Also, for those financial assets that are either past due but not impaired, or have been individually impaired, there will be no need to separately disclose details about any associated collateral or other credit enhancements held by the Trust.

AASB 9 Financial Instruments (December 2010) and AASB 2010-7 Amendments to Australian Accounting Standards arising 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 & 1038 and Interpretations 2, 5, 10, 12, 19 & 127] become effective from reporting periods beginning on or after 1 January 2013. The main impacts of these standards on The Trust are that they will change the requirements for the classification, measurement and

34



Note 1: Summary of Significant Accounting Policies (continued) (o) New and Revised Accounting Standards (continued)

disclosures associated with financial assets. Under the new requirements, financial assets will be more simply classified according to whether they are measured at either amortised cost or fair value. Pursuant to AASB 9, financial assets can only be measured at amortised cost if two conditions are met. One of these conditions is that the asset must be held within a business model whose objective is to hold assets in order to collect contractual cash flows. The other condition is that the contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

On initial application of AASB 9, the Trust will need to re-assess the measurement of its financial assets against the new classification and measurement requirements, based on the facts and circumstances that exist at that date.

AASB 1053 Application of Tiers of Australian Accounting Standards and MSB 2010-2 Amendments to Australian Accounting Standards arising from Reduced Disclosure Requirements [AASB 1, Z 3, 5, 7, 8, 101, 102, 107, 108, 110, 111, 112, 116, 117, 119, 121, 123, 124, 127, 128, 131, 133, 134, 136,

137, 138, 140, 141, 1050&1052.Interpretations 2, 4, 5, 15, 17, 127, 129, & 1052) apply to reporting periods beginning on or after 1 July 2013. AASB 1053 establishes a differential reporting framework for those entities that prepare general purpose financial statements, consisting of two tiers of reporting requirements — Australian Accounting Standards (commonly referred to as “tier 1”), and Australian Accounting Standards— Reduced Disclosure Requirements (commonly referred to as “tier 2”).

Tier 1 requirements comprise the full range of AASB recognition, measurement, presentation and disclosure requirements that are currently applicable to reporting entities in Australia. The only difference between the tier 1 and tier 2 requirements is that tier 2 requires fewer disclosures than tier 1. AASB 2010-2 sets out the details of which disclosures in standards and interpretations are not required under tier 2 reporting. It is the intention of the Trust to adopt the requirements of tier 2 reduced disclosure requirements.

All other Australian accounting standards and interpretations with future commencement dates are either not applicable to the Trust’s activities, or have no material impact on the Trust.




(i) Provision for impairment of receivables

The Trust does not hold any receivables that would be considered impaired.

(ii) Credit Risk – Trade and other receivables

The Trust does not have any material credit risk exposure to any single

Within trade terms

> 30 Days

Gross Amount

2011 $ $ $ Trade receivables - 16,491 16,491 - 16,491 16,491 2010 Trade receivables 90,990 - 90,990 90,990 - 90,990



Note 2: Donations and research income

Note 3: Specific purpose payments


Note 5: Trade and Other Receivables

2011 2010 $ $ Donations 339,404 176,106Research and grant income 535,701 241,766 875,105 417,872 Research and equipment expenditure 448,647 490,617 448,647 490,617 Cash management accounts 1,260,971 98,622At Call account - 525,909Short term deposits 518,029 500,000 1,779,000 1,124,531 Trade receivables 16,491 90,990Accrued revenue 4,939 15,952GST receivable 1,844 27,839 23,274 134,781

Note 2: Donations and research incomeNote 3: Specific purpose payments Note 4: Cash and Cash EquivalentsNote 5: Trade and Other Receivables

receivable or group of receivables.

The following table details the Trust’s trade and other receivables exposed to credit risk with ageing analysis.

36

2011

2010 $ $ Trade and other payables 142,382 110,086Accrued expenses 17,498 2,300 159,880 112,386 Trade Payables are expected to be paid as follows: Less than 6 months 159,880 112,3866 months to I year - - 159,880 112,386

Note 6: Trade and other payables

Note 7: Reconciliation of Operating Surplus to Net Cash Provided by Operating Activities

Surplus from continuing operations 495,468 (39,649) Changes in assets and liabilities:

(Increase) / decrease in receivables 111,507 (106,460)Increase / (decrease) in payables 47,494 75,155

654,469 (70,954)Net cash provided by operating activities



2011

2010 $ $ Trade and other payables 142,382 110,086Accrued expenses 17,498 2,300 159,880 112,386 Trade Payables are expected to be paid as follows: Less than 6 months 159,880 112,3866 months to I year - - 159,880 112,386



Surplus from continuing operations 495,468 (39,649) Changes in assets and liabilities:

(Increase) / decrease in receivables 111,507 (106,460)Increase / (decrease) in payables 47,494 75,155

654,469 (70,954)Net cash provided by operating activities


Note 8: Contingencies

Predominantly all of the Retained Surplus is to be expended for specific purposes in the future. There were no other contingent liabilities as at 30 June 2011.

Note 9: Financial Instruments

(a) Categorisation of Financial Instruments

The Trust has the following categories of financial assets and financial liabilities:

Category Note 2011 2010 $ $ Financial Assets Cash and cash equivalents 4 1,779,000 1,124,531Receivables 5 23,274 134,781 Financial Liabilities Payables 6 159,880 112,386

(b) Financial Risk Management The Trust’s financial instruments consist mainly of deposits with banks, local money market instruments, short-term investments, accounts receivable and payable.

(i) Financial Risk Management Policies

A finance committee consisting of senior committee members meet on a regular basis to analyse financial risk exposure and to evaluate treasury management strategies in the context of the most recent economic conditions and forecasts.





(ii) Specific Financial Risk Exposures and Management

The main risks the Trust is exposed to through its financial instruments are market risk in relation to interest rate risk, liquidity risk and credit risk. The Trust does not have any derivative instruments at 30 June 2011. The Trust is not exposed to fluctuations in foreign currencies.

(a) Credit riskThe maximum exposure to credit risk, at balance date to recognised financial assets, is the carrying amount, net of any provisions for impairment

2011 $

2010 $

Cash and cash equivalents $1,779,000 $1,124,531

Credit risk in relation to these assets is managed by ensuring that amounts are only invested with financial institutions with a sound credit rating.

(b) Liquidity riskThe table below sets out the liquidity risk of financial liabilities of the Trust. It represents the contractual maturity of financial liabilities of the Trust. The cash flows realised from financial assets reflects management’s expectation as to the timing of realisation. Actual timing may therefore differ from that disclosed.



Credit risk in relation to these assets is managed by ensuring that amounts are only invested with financial institutions with a sound credit rating. Note 9: Financial Instruments (continued) (b) Liquidity risk The table below sets out the liquidity risk of financial liabilities of the Trust. It represents the contractual maturity of financial liabilities of the Trust. The cash flows realised from financial assets reflects management’s expectation as to the timing of realisation. Actual timing may therefore differ from that disclosed. Financial liability and financial asset maturity analysis: Within 1 Year 1 to 5 Years Over 5 Years Total 2011 2010 2011 2010 2011 2010 2011 2010 $ $ $ $ $ $ $ $ Financial liabilities due for payment

Trade and other payables 159,880 112,386 - - - - 159,880 112,386

Total 159,880 112,386 - - - - 159,880 112,386 Financial assets – cash flows realisable

Cash and cash equivalents 1,779,000 1,124,531 - - - - 1,779,000 1,124,531 Trade and other receivables 23,274 134,781 - - - - 23,274 134,781 Total 1,802,274 1,259,312 - - - - 1,802,274 1,259,312

(c) Market Risk The trust has minimal exposure to price risk as its holdings are in interest bearing investments. Interest rate risk The Trust’s exposure to interest rate risk is the risk that a financial instruments value will fluctuate as a result of changes in market interest rates. Sensitivity analysis: Interest rate risk The Trust has performed a sensitivity analysis relating to its exposure to interest rate risk at balance date. This sensitivity analysis demonstrates the effect on current year results and equity which could result from a change in this risk. As at balance date, the effect on the surplus and equity as a result of changes in the interest rate, with all other variables remaining constant, would be as follows:

of those assets, as disclosed in the Statement of Financial Position and note 5 to the financial statements. The Trust does not have any material credit risk exposure to any single receivable or group of receivables under financial instruments entered into by the Trust.

Note 5 to the financial statements provides an analysis of the credit risk exposure and ageing analysis of trade and other receivables.

The Trust credit risk exposure in relation to other financial assets is:

38



Note 9: Financial Instruments (continued)

ii. Specific Financial Risk Exposures and Management (continued)

(c) Market RiskThe trust has minimal exposure to price risk as its holdings are in interest bearing investments.

Interest rate riskThe Trust’s exposure to interest rate risk is the risk that a financial instruments value will fluctuate as a result of changes in market interest rates.

Sensitivity analysis:Interest rate riskThe Trust has performed a sensitivity analysis relating to its exposure to interest rate risk at balance date. This sensitivity analysis demonstrates the effect on current year results and equity which could result from a change in this risk.

As at balance date, the effect on the surplus and equity as a result of changes in the interest rate, with all other variables remaining constant, would be as follows:

Surplus Equity $ $



2011 2010

Carrying Amount

Net FairValue

CarryingAmount

Net Fair Value

$ $ $ $

Financial assets 1,802,274 1,802,274 1,259,312 1,259,312

Financial liabilities 159,880 159,880 112,386 112,386

Surplus Equity $ $



2011 2010

Carrying Amount

Net FairValue

CarryingAmount

Net Fair Value

$ $ $ $

Financial assets 1,802,274 1,802,274 1,259,312 1,259,312

Financial liabilities 159,880 159,880 112,386 112,386

This sensitivity analysis has been performed on the assumption that all other variables remain unchanged.

No sensitivity analysis has been performed for foreign exchange risk, as the Trust is not exposed to fluctuations in foreign exchange.

(c) Net Fair ValuesThe net fair values of financial assets and financial liabilities are presented in the following table and can be compared to their carrying value as presented in the statement of financial position. Fair values are those amounts at which an asset could be exchanged, or a liability settled, between knowledgeable willing parties in an arms length transaction.

Fair values are in line with carrying values.

Note 10: Events Occurring After Balance Date

There were no events affecting the financial position of the Trust subsequent to 30 June.



The trustees of The Prince Charles Hospital Foundation Trust declare that:

1. The financial statements and notes present fairly the Trust’s financial position as at 30 June 2011 and its performance for the year ended on that date in accordance with the requirements of The Trust Deed, Australian Accounting Standards an other mandatory professional reporting requirements; and

2. At the date of this declaration there are reasonable grounds to believe that the Trust will be able to pay its debts as and when they become due and payable.

Trustees’ Declaration

40

To the Trustees and Members of The Prince Charles Hospital Foundation Trust

Report on the Financial Report

I have audited the accompanying financial report of The Prince Charles Hospital Foundation Trust which comprises the statement of financial position as at 30 June 2011, and the statement of comprehensive income, statement of changes in equity and the statement of cash flows for the year ended on that date, a summary of significant accounting policies, other explanatory notes and certificates given by the Trustees and officer responsible for the financial administration of The Prince Charles Hospital Foundation Trust.

The Trustees’ Responsibility for the Financial Report

The Trustees are responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards and the requirements of the Trust Deed of The Prince Charles Hospital

Foundation Trust, dated 21 September 1998. The trustees’ responsibility also includes such internal control as the trustees determine is necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

My responsibility is to express an opinion on the financial report based on the audit. The audit was conducted in accordance with Auditor-General of Queensland Auditing Standards, which incorporate the Australian Auditing Standards. Those standards require compliance with relevant ethical requirements relating to audit engagements and that the audit is planned and performed to obtain reasonable assurance whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s

judgment, including the assessment of risks of material misstatement in the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies and the reasonableness of accounting estimates made by the Trustees, as well as evaluating the overall presentation of the financial report.

I believe that the audit evidence obtained is sufficient and appropriate to provide a basis for my audit opinion.

Independence

The Auditor-General Act 2009 promotes the independence of the Auditor General and all authorised auditors. The Auditor-General is

Independent Audit ReportThe Prince Charles Hospital Foundation Trust


the auditor of all Queensland public sector entities and can only be removed by Parliament.

The Auditor-General may conduct an audit in any way considered appropriate and is not subject to direction by any person about the way in which audit powers are to be exercised.

The Auditor-General has for the purposes of conducting an audit, access to all documents and property and can report to Parliament matters

which in the Auditor-General’s opinion are significant.

Auditor’s Opinion

In accordance with the provisions of the Trust Deed of The Prince Charles Hospital Foundation Trust dated 21 September 1998, I have audited the financial report of The Prince Charles Hospital Foundation Trust, and –a) I have received all of the information and explanations which I have required; and


Independent Audit Report (continued)

b) In my opinion the financial report presents fairly, in all material respects, the financial position of The Prince Charles Hospital Foundation Trust as at 30 June 2011, and its financial performance and cash flows for the year ended 30 June 2011 in accordance with Australian Accounting Standards.

The Prince Charles Hospital Foundation627 Rode Rd Chermside Qld 4032www.tpchfoundation.org.au

Documents

TPCHF Annual Financial Statements 2011