TPCHF Annual Financial Statements 2011 by The Prince Charles Hospital Foundation

Celebrating 25 years

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

Letter of Compliance

12 September 2011 The Honourable Mr Geoff Wilson MP Minister for Health GPO Box 48 Brisbane 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, Chairman The Prince Charles Hospital Foundation

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.

©The Prince Charles Hospital Foundation 2011 627 Rode Rd Chermside Qld 4032 phone: (07) 3139 4636 fax: (07) 3139 4002 email: tpch-foundation@health.qld.gov.au www.tpchfoundation.org.au

The Prince Charles Hospital Foundation

Annual 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:

â&#x20AC;˘ To provide an accounting for the custody and management of moneys and resources under the control of the Prince Charles Hospital Foundation; and â&#x20AC;˘ 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.

Annual Financial Statements for the year ended 30 June 2011

The Prince Charles Hospital Foundation

Statement of Comprehensive Income for the year ended 30 June 2011 Notes

2011 $

2010 $

3,344,058 68,203 1,214,298 511,843 525,373 79,600 205,433 349,706 171,291 1,906

3,207,074 66,299 1,126,710 418,836 509,851 75,600 162,977 280,905 11,892 -

6,471,711

5,860,144

44,714 1,811,640 436,638 1,626,085 343,044 490,474 1,138,620

17,041 3,030 1,639,075 432,200 1,675,216 346,455 388,660 644,157

5,891,215

5,145,834

580,496

714,310

580,496

714,310

580,496

714,310

Income from Continuing Operations Revenue Sales - Cafeteria Car park rental- Collocation Donations and bequests Functions and special events Collocation funding income Administration fees Investment income Interest income Increase in market value of investments Gain on sale of assets

Total Income from Continuing Operations Expenses from Continuing Operations Depreciation and amortisation Loss on sale of assets Employee expenses Collocation funding expenses Cost of goods sold - Cafeteria Functions and special events General and administration expenses Research grants expenditure

10 3

15d

Total Expenses from Continuing Operations

Surplus before Income Tax Income tax expense Operating Result from Continuing Operations Total Other Comprehensive Income for the Year Total Comprehensive Income

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 The Prince Charles Hospital Foundation

Statement of Financial Position as at 30 June 2011

Statement of Financial Position As at 30 June 2011 Notes Current Assets Cash and cash equivalents Trade and other receivables Inventories Other current assets

5 6 7 8

2011 $

2010 $

5,197,200 361,423 35,436 22,880

4,855,937 284,165 47,812 23,346

5,616,939

5,211,260

4,203,329 689,532

4,532,038 234,240

4,892,861

4,766,278

10,509,800

9,977,538

375,189 78,143

410,049 84,686

453,332

494,735

11,514

18,345

11,514

18,345

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

Total Current Assets Non Current Assets Other financial assets Property, plant and equipment

9 10

Total Non Current Assets Total Assets Current Liabilities Payables Accrued employee benefits

11 12a

Total Current Liabilities Non Current Liabilities Accrued employee benefits

12b

Total Non Current Liabilities Total Liabilities

The accompanying notes form part of these statements

The accompanying notes form part of these statements.

Annual Financial Statements for the year ended 30 June 2011 Annual Financial Statement for the year ended 30 June 2011

Page 3

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 Notes to and forming part of the Financial Statements for the year ended 30 June 2011 Statement of Changes in Equity

The Prince Charles Hospital Foundation For the Year Ended 30 June 2011 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 Note

Retained Surplus

2011 $ 2011

2010 $ 2010

Retained Surplus Balance 1 July

9,464,458

8,750,148

Balance 1 July Operating result from continuing operations Other Comprehensive Income operations Operating result from continuing

9,464,458 580,496 580,496-

8,750,148 714,310 714,310-

Other Comprehensive Income Balance 30 June

10,044,954

9,464,458

Balance 30 June

10,044,954

9,464,458

Statement of Cash Flows the Year Ended 30 June For Statement of Cash Flows2011

Statement of Cash Flows for the year ended 30 June 2011 For the Year Ended 30 June 2011

Cash Flow from Operating Activities Inflows: Flow from Operating Activities Cash Receipts Inflows: from customers Dividend and trust income received Receipts from customers Interest receipts Dividend and trust income received Outflows: Interest receipts Payments Outflows: of grants Payments to grants employees Payments of Payments to suppliers Payments to employees Net cash provided by operating activities Payments to suppliers

Note

2011 $ 2011

2010 $ 2010

Note

5,744,125 162,714 5,744,125 308,030 162,714

5,380,740 100,224 5,380,740 222,109 100,224

308,030 (1,138,620) (1,825,014) (1,138,620) (2,911,872) (1,825,014) 339,363 (2,911,872)

222,109 (644,157) (1,611,745) (644,157) (2,876,882) (1,611,745) 570,289 (2,876,882)

339,363

570,289

500,000 1,906 500,000

2,729,083 2,729,083-

1,906 (500,006) (500,006)-

(163,387) (3,170,000) (163,387)

Payments for investments Net cash used in investing activities

1,900

(3,170,000) (604,304)

Net cash used in investing activities

1,900

(604,304)

341,263 4,855,937 341,263

(34,015) 4,889,952 (34,015)

4,855,937

4,889,952

Net cash provided by operating activities Cash Flow from Investing Activities Inflows: Cash Flow from Investing Activities Proceeds Inflows: from disposal of investments Sales of property, plant and equipment Proceeds from disposal of investments Outflows: Sales of property, plant and equipment Payments Outflows: for property, plant and equipment Payments for property, investments Payments for plant and equipment

Net increase / (decrease) in cash and cash equivalents Net increase / (decrease) in cash and cash Cash and cash equivalents at beginning of year equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of financial year and cash equivalents at end of financial Cash

5,197,200

4,855,937

year

5,197,200

4,855,937

The accompanying notes form part of these statements.

Annual Financial Statement for the year ended 30 June 2011

Page 4

Annual Financial Statement for the year ended 30 June 2011

Page 4

The Prince Charles Hospital Foundation Notes to and forming part of the Financial Statements for the year ended 30 June 2011

Objectives and principal activities of The Prince Charles Hospital Foundation

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.

authoritative pronouncements applicable to not-for-profit entities. The Foundation as a statutory body has also complied with, where relevant, the Queensland Treasurerâ&#x20AC;&#x2122;s Financial Reporting Requirements.

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.

(b) The Reporting Entity

Except where stated, the historical cost convention is used.

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.

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

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.

Annual Financial Statements for the year ended 30 June 2011

The Prince Charles Hospital Foundation

The depreciable amount of plant and equipment and motor vehicle is depreciat value and prime cost basis, commencing from the time the asset is held r depreciation rates used for each class of depreciable assets based on their usefu

Notes to and forming part of the Financial Statements for the Note year1:ended 30 June 2011 accounting policies (continued) Summary of significant 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

(j) Depreciation of property, plant and equipment (continued)

depreciation and impairment losses. Class of Fixed Asset Depreciation Rate The carrying amount of plant and Range & Method equipment is reviewed annually by the Foundation to ensure it is not in Leasehold 2.5 - 50% PC excess of the recoverable amount Improvements from those assets. The recoverable Plant and Equipment 10 - 20% PC Motor vehicle 22.5% DV amount is assessed on the basis of the expected net cash flows which will be The assets useful lives reviewed and adjusted if appropriate at the end Theare assets’ useful lives are reviewed received from the assets’ period. employment and adjusted if appropriate at the end and subsequent disposal.Assets The under construction are not depreciated until they are completed and th eachfor reporting period. with its intended application expected net cash flows have not to use or is installedofready use in accordance then reclassified been discounted to present values in to the relevant classes within Property, Plant and Equipment. Gains and disposals are determined by comparing under construction are not proceeds with the determining recoverable amounts. losses onAssets These gains or lossesdepreciated are included until in thethey statement of comprehensive income. are completed and the asset is first put to use or is Minor Equipment (k) Impairment of Non-Current Assets installed ready for use in accordance All plant and equipment with a withassets its intended application. These non-current are assessed for indicators of impairment on an cost or other value below All $2,000 are physical indicator of possible impairment exists, the Foundation assets are then reclassified to the determines the a written off as an expense in the period amount. Any amount by which the asset’s carrying amount relevant classes within Property, Plantexceeds the reco in which they were acquired. recorded as an impairment loss. and Equipment.

The asset’s recoverable amount is determined as the higher of the asset’s fair (i) Revaluations of Non-Current sell and depreciated Gains replacement cost. on disposals are and losses Physical Assets determined by comparing proceeds An impairment loss is recognised immediately in the Statement of Comp the carrying amount. These Plant and equipment andunless motorthe asset is with carried at a revalued amount. When the asset is measu gainsloss or is losses included in the surplus of the re vehicles are measured at amount, cost. the impairment offsetare against the revaluation statement of comprehensive income. The carrying amounts forextent plantavailable. and equipment at cost should not Where an impairment subsequently the carrying amount of the as (k)loss Impairment of reverses, Non-Current materially differ from their fair value. the revised estimate of its recoverable amount, but so the increased carrying Assets exceed the carrying amount that would have been determined had no imp recognised ( j) Depreciation of Property, Plant for the asset in prior years. A reversal of an impairment loss is reco All non-current physical assets are asset is carried at a revalued amount, in which case the impairment loss is treat and Equipment increase. assessed for indicators of impairment on an annual basis. If an indicator The depreciable amount of Financial Instruments (l) plant of possible impairment exists, the and equipment and motor vehicle is Foundation determines the asset’s depreciated on diminishing value and Annual Financial Statement for the year ended 30 June 2011 recoverable amount. Any amount by prime cost basis, commencing from which the asset’s carrying amount the time the asset is held ready for exceeds the recoverable amount is use. The depreciation rates used for recorded as an impairment loss. each class of depreciable assets based on their useful lives are:

The Prince Charles Hospital Foundation Notes to and forming part of the Financial Statements for the year ended 30 June 2011 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 measurement Financial 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 Measurement Financial 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

Annual Financial Statements for the year ended 30 June 2011

The Prince Charles Hospital Foundation Notes to and forming part of the Financial Statements for the year ended 30 June 2011 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 receivables Loans and receivables are nonderivative 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 investments Held-to-maturity investments are non-derivative financial assets that have fixed maturities and fixed or determinable payments, and it is the Foundationâ&#x20AC;&#x2122;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 liabilities Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost using the effective interest rate method.

Fair value 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 armâ&#x20AC;&#x2122;s length transactions, reference to similar instruments and option pricing models. Derecognition Financial 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.

The Prince Charles Hospital Foundation Notes to and forming part of the Financial Statements for the year ended 30 June 2011 (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.

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

Executive Remuneration Key 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.

(q) Taxation

(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

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

Annual Financial Statements for the year ended 30 June 2011

The Prince Charles Hospital Foundation Notes to and forming part of the Financial Statements for the year ended 30 June 2011 Note 1: Summary of significant accounting policies (continued) (s) New and Revised Accounting Standards (continued) 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 20107 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

The Prince Charles Hospital Foundation Notes to and forming part of the Financial Statements for the year ended 30 June 2011 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.

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.

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

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.

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.

(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 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

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

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)

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.

Donations and bequests are recognised on receipt of the funds

Annual Financial Statements for the year ended 30 June 2011

The Prince Charles Hospital Foundation Notes to and forming part of the Financial Statements for the year ended 30 June 2011 Note 1: Summary of significant accounting policies (continued) (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 17 Contingencies - 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 Expenses Note 3: 3: Expenses

2011 $

2010 $

Employee Expenses Employee Benefits Wages and salaries Employer superannuation contributions

1,589,141 139,667

1,458,718 128,902

19,821 63,011 1,811,640

15,544 35,911 1,639,075

No.

Number of employees at year end

Auditorâ&#x20AC;&#x2122;s Fees

11,200

10,600

Employee Related Expenses Workerâ&#x20AC;&#x2122;s compensation premium Other employee related expenses Total Employee Expenses

Included in general and administrative expenses of the Foundation are audit fees for auditing of the accounts.

The Prince Charles Hospital Foundation Notes to and forming part of the Financial Statements for the year ended 30 June 2011 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).

Note 5: Cash and Cash Equivalents

Cash on hand Cash at bank Cash on deposit

2011 $ 5,700 519,213 4,672,287 5,197,200

2010 $ 5,400 1,793,374 3,057,163 4,855,937

Note 5: Cash and Cash Equivalents

Note 6: Trade and Other Receivables Trade receivables Sundry debtors – collocation payments Other miscellaneous receivables Provision for impairment of receivables

(i) Provision for impairment of

Balance at the beginning of the year receivables Amounts written off during the year Current trade receivables are Amounts recovered during the year generallyrecognised on 30-dayinterms. These Allowance profit and loss receivables are assessed for Balance at the end of the year

44,683 96,318 221,922 362,923 (1,500) 361,423

58,266 93,473 133,926 285,665 (1,500) 284,165

1,500 1,500

recoverability and a provision for impairment is recognised when there receivables is objective evidence that Trade 44,683 Sundry debtors trade – collocation payments 96,318 an individual receivable is Other miscellaneous receivables 221,922 impaired. These amounts have been 362,923 included in other expense items. Within

58,266 93,473 133,926 285,665 Provision for impairment of receivables (1,500) (1,500) > 30 Gross trade 361,423 284,165 terms Days Amount Movement in the provision for 2011 $ $ $ impairment of receivables: Trade receivables 31,884 12,799 44,683 Sundry Debtors – Collocation payments 48,159 48,159 96,318 Balance at the beginning of the year 1,500 Other Miscellaneous Receivables 221,922 1,500 221,922 Amounts written off during the year 301,965 60,958 362,923 Amounts recovered during the year Allowance recognised in profit and loss 2010 Trade receivables 53,240 1,500 5,026 58,266 Balance at the end of the year 1,500 Sundry Debtors – Collocation payments 93,473 93,473 Other Miscellaneous Receivables 133,926 133,926 280,639 5,026 285,665

Annual Financial Statements for the year ended 30 June 2011 Within

Amounts recovered during the year Allowance recognised in profit and loss Balance at the end of the year

1,500

The Prince Charles Hospital Foundation Notes to and forming part of the Financial Statements for the year ended 30 June 2011 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 Trade receivables Sundry Debtors – Collocation payments Other Miscellaneous Receivables 2010 Trade receivables Sundry Debtors – Collocation payments Other Miscellaneous Receivables

Note 7: Inventories Stock on hand - cafeteria - at cost Stock on hand – Foundation office - at cost

Within trade terms $ 31,884 48,159 221,922 301,965 53,240 93,473 133,926 280,639

> 30 Days

Gross Amount $ $ 12,799 44,683 48,159 96,318 221,922 60,958 362,923 5,026 5,026

58,266 93,473 133,926 285,665

2011 $

2010 $

32,214 3,222 35,436

40,187 7,625 47,812

7,894 14,986 22,880

14,746 8,600 23,346

1,000,000 1,000,000

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

Note 8: Other Current Assets Prepayments Dividend imputation credits refundable

Note 9: Other Financial Assets Held to maturity Financial Assets: Cash on deposit (Collocation) Cash on deposit

Financial assets at fair value through profit and loss Managed Funds 2,730,659 Shares in Listed Corporations 472,670 3,203,329

2,572,003 460,035 3,032,038

Total

4,532,038

4,203,329

The Prince Charles Hospital Foundation Notes to and forming part of the Financial Statements for the year ended 30 June 2011

Note 10: Property, Plant & Equipment Assets under Construction: At cost Less: Accumulated depreciation

163,387 163,387

532,136 (15,565) 516,571

316,079 (156,535) 159,544

184,823 (130,808) 54,015

33,953 (20,536) 13,417 689,532

33,953 (17,115) 16,838 234,240

Leasehold Improvements: At cost Less: Accumulated amortisation Plant and Equipment: At cost Less: Accumulated depreciation Motor Vehicle: At cost Less: Accumulated depreciation Total Assets under Construction

Leasehold Improvement

Plant and Equipment

Motor Vehicle

69,794

21,131

90,925

163,387 -

(3,031) (12,748)

(4,293)

163,387 (3,031) (17,041)

163,387

54,015

16,838

234,240

(163,387) -

368,749 163,387 (15,565)

131,257 (25,728)

(3,421)

500,006 (44,714)

516,571

159,544

13,417

689,532

Movements in Carrying Values: Carrying amount at 1 July 2009 Acquisitions Disposals Depreciation and amortisation Carrying amount at 30 June 2010 Acquisitions Re-allocation of Assets Disposals Depreciation and amortisation Carrying Amount at 30 June 2011

Total

Note 10: Property, Plant & Equipment

Annual Financial Statements for the year ended 30 June 2011

The Prince Charles Hospital Foundation Notes to and forming part of the Financial Statements for the year ended 30 June 2011 Note 14: Lease Commitments Note 11:Trade Tradeand and Other Payables Note 11: Other Payables a) Current Trade Payables GST Payable Accrued Expenses Total Payables Trade Payables are expected to be paid as follows Less than 6 months 6 months to I year

2011 $

2010 $

209,559 33,412 132,218 375,189

289,993 12,266 107,790 410,049

375,189 375,189

410,049 410,049

59,764 18,379 78,143

76,004 8,682 84,686

11,514

18,345

89,657

103,031

Note 12: Employee Benefits Note 12:Accrued Accrued Employee Benefits a) Current Annual (Recreational) Leave Long Service Leave b) Non-Current Long Service Leave Total Accrued Employee Benefits Note 13: Capital Commitments

Note 13: Capital Commitments Capital expenditure commitments in relation to Breeze Café redevelopment: - not later than 12 months - later than 12 months but not later than 5 years - greater than 5 years

493,069 493,069

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

The Prince Charles Hospital Foundation Notes to and forming part of the Financial Statements for the year ended 30 June 2011 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 â&#x20AC;&#x201C; 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 â&#x20AC;&#x201C; Grants Awarded

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 Loss/(Gain) on disposal of plant and equipment Movement in market value of Units/Shares Dividend & Trust Income reinvested Changes in assets and liabilities: Decrease / (Increase) in receivables Decrease / (Increase) in inventories Decrease/ (Increase) in other current assets (Decrease) / Increase in payables (Decrease) / Increase in accrued employee benefits

44,714 (1,906) (171,291) -

17,041 3,030 (11,892) (20,722)

(77,259) 12,376 467 (34,860)

(139,809) (8,959) 10,308 (20,348)

(13,374)

27,330

Net cash provided by operating activities

339,363

570,289

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).

Annual Financial Statements for the year ended 30 June 2011

The Prince Charles Hospital Foundation Notes to and forming part of the Financial Statements for the year ended 30 June 2011 Note 17: Financial Instruments (a) Categorisation of Financial Instruments The Foundation has the following categories of financial assets and financial liabilities:

Category

context of the most recent economic conditions and forecasts.

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

2011 $

2010 $

Financial Assets Cash and Cash Equivalents Trade Receivables

5 6

Held to Maturity Cash Investments Financial assets at fair value through profit and loss

9 9

5,197,20 0 361,423 1,000,00 0 3,203,32 9 9,761,95 2

4,855,937 284,165 1,500,000 Category 3,032,038 Assets Financial

(i) Credit risk Credit 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 Note 2011 2010 group of receivables under financial $ $ instruments entered into by the Foundation.

9,672,140 5,197,20 Financial Liabilities Cash and Cash EquivalentsCredit risk is managed 5 0 4,855,937 by the Payables 11 375,189 410,049 Trade Receivables 6 361,423 284,165 Foundation and reviewed regularly by 1,000,00 the finance committee. Note 17: Financial Instruments (continued) Held to Maturity Cash Investments 9 0 1,500,000 (b) Financial Risk Risk Management Management (continued) (b) Financial Financial assets at fair value through 3,203,32 interest rate risk and equity price risk. (i) Credit risk (continued) profit lossany 9 9 3,032,038 Note 6 to the financial statements The Foundation does notand have 9,761,95 The Foundationâ&#x20AC;&#x2122;s financial provides an analysis of the credit risk derivative instruments at 30 June 2011 2010 2 9,672,140 instruments consist mainly of exposure and ageing analysis of trade 2011. The Foundation is not exposed $ $ Financial Liabilities deposits with banks, local money and other receivables. to fluctuations in foreign currencies. 410,049 Payables 11 375,189 marketCash instruments, equity and Cash Equivalents 5,191,500 4,850,537 Held to Maturity Assets 1,000,000 Note 1,500,000 investments, accountsFinancial receivable and 17: Financial Instruments (continued) credit risk exposure The Foundation 6,191,500 6,350,537 Financial Risk Management (continued) (b) payable. in relation to other financial assets is: (i) Credit risk (continued)

Financial Risk Management Policies A 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

2011 $ Cash and Cash Equivalents Held to Maturity Financial Assets

5,191,500 1,000,000 6,191,500

2010 $ 4,850,537 1,500,000 6,350,537

The Prince Charles Hospital Foundation Notes to and forming part of the Financial Statements for the year ended 30 June 2011 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 risk The Foundation manages liquidity risk by monitoring forecast cash flows and ensuring that adequate funds are available to meet ongoing commitments.

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.

(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.

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:

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.

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.

Sensitivity analysis The Foundation has performed a sensitivity analysis relating to its

Surplus $ Year ended 30 June 2011 — +/- 2% in interest rates — +/- 10% in equity prices Year ended 30 June 2010 — +/- 2% in interest rates — +/- 10% in equity prices

THE PRINCE CHARLES HOSPITAL FOUNDATION

Notes to and forming part of the Financial Statements for the year ended 30 June 2011 Financial liability and financial asset maturity analysis: Financial liability and financial asset maturity analysis: Within 1 Year 2010 2011 $ $ Financial liabilities due for payment: Trade and other payables Financial assets – cash flows realisable: Cash and cash equivalents Trade receivables Total

375,189

1 to 5 Years 2011 2010 $ $

Over 5 Years 2011 2010 $ $

Total 2011 $

410,049

5,197,200 4,855,937 361,423 284,165 5,558,623 5,140,102

375,189

2010 $

Equity $

+/-129,302 +/-129,302 +/-332,754 +/-332,754

+/-127,137 +/-127,137 +/-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.

410,049

5,197,200 4,855,937 361,423 284,165 - 5,558,623 5,140,102

(iii) Market risk (a) Interest rate risk Annual Financial Statements for the year ended 30 June 2011 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

The Prince Charles Hospital Foundation Notes to and forming part of the Financial Statements for the year ended 30 June 2011 Note 17: Financial Instruments (continued)

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.

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.

(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

Financial assets Cash and cash equivalents Trade and other receivables Held to maturity financial assets Financial assets at fair value through profit and loss: - listed investments - managed funds

Financial liabilities Trade and Other Payables

2010

Carrying Value

Net Fair Value

Carrying Amount

Net Fair Value

5,197,200

4,855,937

361,423 1,000,000

284,155 1,500,000

472,670 2,730,659

460,035 2,572,003

9,761,952

9,672,130

375,189

410,049

375,189

410,049

The Prince Charles Hospital Foundation Notes to and forming part of the Financial Statements for the year ended 30 June 2011 (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:

Note 18: Events occurring after balance date

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

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

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

According to the above hierarchy, Level 1 – fair values that reflect THE PRINCE CHARLES HOSPITAL FOUNDATION the fair values of each class of asset/ unadjusted quoted prices in active Notes to and forming part of the Financial Statements for the year ended 30 June 2011 liability recognised at fair value are as markets for identical assets/ follows: 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 Level 1 Level 2 Level 3 $ $ $

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

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

Total Carrying Amount $

3,203,329

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.

Annual Financial Statements for the year ended 30 June 2011

The Prince Charles Hospital Foundation

Certificate of the Foundation

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.

The Prince Charles Hospital Foundation

Independent Audit Report

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

Annual Financial Statements for the year ended 30 June 2011

The Prince Charles Hospital Foundation

Independent Audit Report (continued)

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 AuditorGeneral’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

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.

The Prince Charles Hospital Foundation Trust

Annual Financial Statements for the year ended 30 June 2011

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:

â&#x20AC;˘ To provide an accounting for the custody and management of moneys and resources under the control of the Prince Charles Hospital Foundation Trust; and â&#x20AC;˘ 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.

Annual Financial Statements for the year ended 30 June 2011

The Prince Charles Hospital Foundation Trust THE PRINCE CHARLES HOSPITAL FOUNDATION TRUST Statement of Comprehensive Income for the year ended 30 June 2011 Notes to and forming part of the Financial Statements for the year ended 30 June 2011 Statement of Comprehensive Income For the Year Ended 30 June 2011

Note

2011 $

2010 $

Income from Continuing Operations Revenue Donations and research income Interest

Total Income from Continuing Operations

875,105 86,723

417,872 49,146

961,828

467,018

263 15,200 2,250 448,647

124 13,200 2,726 490,617

466,360

506,667

495,468

(39,649)

495,468

(39,649)

495,468

(39,649)

Expenses from Continuing Operations Bank charges Administration charges Audit fees Specific purpose payments

Total Expenses from Continuing Operations

Surplus/(Deficit) before Income Tax Income Tax Expense Operating Result from Continuing Operations Total Other Comprehensive Income Total Comprehensive Income

The accompanying notes form part of these statements

The Prince Charles Hospital Foundation Trust THE PRINCE CHARLES HOSPITAL FOUNDATION TRUST Statement of Financial Position as at Notes to and forming part of the Financial Statements for the year ended 30 June 2011

30 June 2011

Statement of Financial Position As at 30 June 2011 Note

2011 $

2010 $

1,779,000 23,274

1,124,531 134,781

Total Current Assets

1,802,274

1,259,312

Total Assets

1,802,274

1,259,312

159,880

112,386

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

Current Assets Cash and cash equivalents Trade and other receivables

4 5

Current Liabilities Trade and other payables

Total Current Liabilities

The accompanying notes form part of these statements

Annual Financial Statements for the year ended 30 June 2011

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

Note

2010 $

2011 $

Retained Surplus Balance 1 July Operating Result from Continuing Operations

1,146,926

1,186,575

495,468

(39,649)

1,642,394

1,146,926

Other comprehensive income Balance 30 June

Statement of Cash Flows for the year ended 30 June 2011 Statement of Cash Flows For the Year Ended 30 June 2011 Note Cash Flow from Operating Activities Inflows: Donations and research income Interest receipts Outflows: Specific purpose payments Supplies and services Net cash provided by (used in) operating activities

Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the year Cash and cash equivalents at end of financial year

The accompanying notes form part of these statements

2011 $

2010 $

994,231 97,737

324,558 36,000

(419,886) (17,613)

(415,462) (16,050)

654,469

(70,954)

654,469

(70,954)

1,124,531

1,195,485

1,779,000

1,124,531

The Prince Charles Hospital Foundation Trust Notes to and forming part of the Financial Statements for the year ended 30 June 2011

Objectives and principal activities of The Prince Charles Hospital Foundation Trust

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.

Interpretations, the Trust has applied those requirements applicable to notfor-profit entities.

These are: 1. to support immediate patient needs; 2. to participate in health promotion and prevention; and 3. to support program-specific research, equipment and education requirements.

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.

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 Trustâ&#x20AC;&#x2122;s or issuer's option and that are subject to a low risk of changes in value.

(e) Receivables

Note 1: Summary of Significant Accounting Policies

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.

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.

(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

Except where stated, the historical cost convention is used.

(b) The Reporting Entity

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

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 measurement Financial instruments, incorporating financial assets and financial

Annual Financial Statements for the year ended 30 June 2011

The Prince Charles Hospital Foundation Trust Notes to and forming part of the Financial Statements for the year ended 30 June 2011 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.

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.

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. (ii) Loans and receivables Loans and receivables are nonderivative 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.

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.

(iii) Held-to-maturity investments Held-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.

(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

(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 Prince Charles Hospital Foundation Trust Notes to and forming part of the Financial Statements for the year ended 30 June 2011 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 liabilities Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost using the effective interest rate method.

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

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. (ii) Loans and receivables Loans and receivables are nonderivative 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 investments Held-to-maturity investments are non-derivative financial assets that have fixed maturities and fixed or determinable payments, and it is the Trustâ&#x20AC;&#x2122;s intention to hold these investments to maturity. They are subsequently measured at amortised cost using the effective interest rate method.

(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

Annual Financial Statements for the year ended 30 June 2011

The Prince Charles Hospital Foundation Trust Notes to and forming part of the Financial Statements for the year ended 30 June 2011 Note 1: Summary of Significant Accounting Policies (continued) (f) Financial Instruments Classification and Subsequent Measurement (continued) (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 (ie gains or losses) recognised in other comprehensive income. (v) Financial liabilities Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost using the effective interest rate method.

Derecognition Financial 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.

discounts. Amounts owing are unsecured and are generally settled on 30 day terms.

(h) Taxation The Trust operates solely as a nonfor-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 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 recognised in the Statement of Comprehensive Income.

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.

(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

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.

The Prince Charles Hospital Foundation Trust Notes to and forming part of the Financial Statements for the year ended 30 June 2011 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.

(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.

(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.

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 entityâ&#x20AC;&#x2122;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 20107 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

Annual Financial Statements for the year ended 30 June 2011

The Prince Charles Hospital Foundation Trust Notes to and forming part of the Financial Statements for the year ended 30 June 2011 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.

The Prince Charles Hospital Foundation Trust Notes to and forming part of the Financial Statements for the year ended 30 June 2011 2011 $

2010 $

339,404 535,701 875,105

176,106 241,766 417,872

448,647 448,647

490,617 490,617

1,260,971 518,029 1,779,000

98,622 525,909 500,000 1,124,531

Note 2: Donations and research income Donations Research and grant income

Note 3: Specific purpose payments Research and equipment expenditure

Note 4: Cash and Cash Equivalents Cash management accounts At Call account Short term deposits

Note 5: Trade and Other Receivables Trade receivables Accrued revenue GST receivable

16,491 4,939 1,844 23,274

90,990 15,952 27,839 134,781

Note 5: Trade and Other Note 2: Donations and research income Receivables (continued) Note 3: Specific purpose payments receivable or group of receivables.

(i) Provision for impairment of receivables Note 4: Cash and Cash Equivalents The following table details The Trust does not hold any Note 5: Trade and Other Receivables the Trustâ&#x20AC;&#x2122;s trade and other receivables that would be considered receivables exposed to credit impaired. risk with ageing analysis. (ii) Credit Risk â&#x20AC;&#x201C; Trade and other receivables The Trust does not have any material credit risk exposure to any single

2011 Trade receivables

2010 Trade receivables

Within > 30 Gross trade terms Days Amount $ $ $ - 16,491 16,491 16,491 - 16,491 90,990 90,990

90,990 90,990

Note 5: Trade and Other Receivables (continued)

Annual Financial Statements for the year ended 30 June 2011

The Prince Charles Hospital Foundation Trust Notes to and forming part of the Financial Statements for the year ended 30 June 2011 2011 2011 $ $ Trade and other payables 142,382 Trade and other payables 142,382 Accrued expenses 17,498 Accrued expenses 17,498 159,880 159,880 Trade Payables are expected to be paid as follows: Trade Payables are expected to be paid as follows: Less than 6 months 159,880 Less than 6 months 159,880 6 months to I year 6 months to I year 159,880 159,880 Note 6: Trade and other payables Note 6: Trade and other payables

Note 6: Trade and other payables

2010 2010 $ $ 110,086 110,086 2,300 2,300 112,386 112,386

112,386 112,386 112,386 112,386

Note 9: Financial Instruments (a) Categorisation of Financial Instruments The Trust has the following categories of financial assets and financial liabilities: