Royal Womens Hospital Annual Report 2008/2009 by TBJ Creative

ANNUAL REPORT 2008-2009

INVESTING IN OUR FUTURE

Contents Our Vision Our Mission Chair and Chief Executive's Report Board of Directors Governance and Compliance 2008/09 Financial Report

> > > > >

2 3 7 9 19

14 September 2009

The Hon. Daniel Andrews MP Minister for Health

Dear Minister Responsible Bodies Declaration In accordance with the Financial Management Act 1994, I am pleased to present the Report of Operations for the Royal Womenâ&#x20AC;&#x2122;s Hospital for the year ending 30 June 2009.

Rhonda Galbally, AO Chair The Royal Womenâ&#x20AC;&#x2122;s Hospital

Our vision Our mission Our vision To be the leading provider of health care that improves the health and wellbeing of women and newborn babies. Our mission To provide quality health services that meet the needs of women and newborn babies especially those requiring specialist care. These services are informed by research and are provided within an environment of innovation, education and advocacy. The contributions of our employees, consumers, diverse communities and other agencies that share our goals are fundamental to our success. Our resources are committed to health services that are ethically, socially and financially responsible.

Strategic Directions The Royal Women’s Hospital strategic plan 2005-2010 identifies six strategic directions including:

Statement of Priorities 2008/09 The Statement of Priorities is an annual commitment for all heath services and is the key accountability framework between the hospital and the Minister for Health. For the 2008/09 financial year the Women’s concentrated on transitioning its operations to the new site in Parkville – the focus was on: >> Ensuring the transition year is safe reliable

and sustainable; >> Supporting our staff during the transition year; >> Improving our financial position and performance; >> Strengthening community and stakeholder

engagement; >> Developing research culture and strengthening

research at the Women’s; >> Improving and developing new services; >> Utilising reliable contemporary technologies

to support health service delivery.

>> Delivering improved clinical outcomes

and service performance; >> Improving our consumers’ experience; >> Optimising access to our health services; >> Developing our workforce; >> Building our future; and >> Strengthening our leadership, research

and advocacy role.

YEAR IN REVIEW THE ROYAL WOMEN'S HOSPITAL ANNUAL REPORT 2009

CHAIR AND CHIEF EXECUTIVE'S REPORT YEAR IN REVIEW

It is with great pleasure that we present the Royal Women’s Hospital 2008/09 annual report.

OUR STAFF As always, the Women’s takes great pride in the expertise and achievements of our staff. In our first year in Parkville our staff have continued to provide exceptional services and, on behalf of the Board and Management team we thank all staff for their commitment to the important work of the Women’s. Particular recognition goes to those who were acknowledged for their achievements at the annual staff awards night. More than 15 prizes were awarded to staff for excellence in clinical and support services. Dr John McBain, Head of Reproductive Services and Lisa Dunlop, Director of Redevelopment, were awarded the prestigious Woodward Family Medal of Excellence for their significant and unique contribution to the Women’s over many years. The Woodward Family Medal of Excellence is awarded to outstanding individuals who demonstrate excellence in their field and within the hospital community. In winning this award, Dr McBain and Ms Dunlop were recognised by their peers and the hospital leadership team for their extraordinary achievements which have done so much to improve the health of women and newborn babies. The Chair’s Medal, awarded for integrity, professionalism, dedication, commitment and service was presented to two highly esteemed members of staff, Liz Chatham, Director of Women’s Services and Maxine Reid, Birth Suite Educator. We also acknowledge the wonderful efforts of our team of dedicated volunteers. The Women’s is uniquely enhanced by our vibrant and active volunteer community and over the past year there has been tremendous growth in the program. More than 70 volunteers provide invaluable support across clinical and administrative areas and we thank each of them for their work.

OUR COMMUNITY Throughout the Women’s history, a defining feature of the hospital has been the ability to identify and respond to the needs of those who come to us for specialist care. Today, consumer involvement remains integral to understanding our community’s needs, perspectives and expectations for us to deliver world-class services. The work of the Community Advisory Committee, and the integration of consumer engagement across all areas of the hospital, informs much of our work. As part of this, the hospital’s development of a comprehensive Diversity Plan that reflects and supports the needs of our multi-cultural, multi-faith community has been a significant highlight this year. This plan includes three key components: >> The Reconciliation Action Plan – this plan

articulates the Women’s ongoing commitment to improving the health and wellbeing of Indigenous women, builds our Indigenous workforce and ensures the services we provide to Indigenous women and their families are relevant and effective; >> The Disability Action Plan – under the direction

of the Community Advisory Committee this plan aims to strengthen access to employment and services, promote participation and reduce discrimination for those experiencing disability; >> The Cultural and Linguistic Diversity Plan –

in consultation with women from diverse language backgrounds we continue to provide high quality care that takes account of women’s individual language needs and circumstances.

year in review THE ROYAL WOMEN'S HOSPITAL ANNUAL REPORT 2009

ENHANCING SERVICE DELIVERY Our specialist care of women and newborn babies is built of unique, integrated programs and services that recognise the complex health and social needs of those who come to us for care.

LEADERSHIP AND INNOVATION The adoption of new technologies, the development of innovative programs and services as well as our international research initiatives is fundamental to the advancement of women’s and newborn health.

We provide comprehensive care across the core areas of gynaecology, oncology, maternity, mental health and newborn services and over the past year the Women’s has provided more than 79,794 days of inpatient care.

The inaugural Women’s Research Symposium showcased the breadth of projects underway across our core research streams.

The recent Accreditation review of the Women’s reaffirmed our expertise in providing high quality services. The main focus of the periodic Accreditation review was on clinical service delivery and the accreditors noted the outstanding achievements of the hospital in maintaining a high standard of care during the relocation to Parkville and throughout our transition year. Our commitment to developing innovative services and partnerships was recognised when the Royal Women’s Hospital and Royal Melbourne Breast Service won the Premier’s award at the 2008 Victorian Public Healthcare Awards. This prize is given for excellence in improving cancer care in Victoria. Our achievement recognises the critical role the Women’s plays in improving the provision of care for women with breast cancer and for facilitating the successful and cooperative integration of the two services into one last year. The breast services team has been responsible for improvements in theatre and outpatient clinic utilisation, reduced length of stay and enhanced psychosocial support for patients with breast cancer. The number of patients involved in research studies to progress the understanding and management of breast cancer has also increased as a result of this integrated service.

In June, the Women’s unveiled Australia’s first Magnetic Resonance (MRI) Guided Focused Ultrasound (MRgFUS) at the hospital’s Pauline Gandel Women’s Imaging Centre. This new technology provides worldclass treatment for women suffering uterine fibroids and has revolutionised the care available to women experiencing this serious gynaecological condition. The establishment of Australia’s only Chronic Pelvic Pain Clinic that provides multidisciplinary care for women suffering gynaecological pain is another example of the hospital’s leadership in developing unique, comprehensive services that respond to the needs of women. Our new hospital has also been recognised as an international centre of excellence in winning the Design & Health International Academy Award for a Healthcare Project at the Design & Health 6th World Congress this year. The award recognised the “outstanding acute healthcare building where patient-centred considerations are evident as clinical and managerial priorities”.

year in review THE ROYAL WOMEN'S HOSPITAL ANNUAL REPORT 2009

ADVANCING WOMEN'S HEALTH The Women’s is leading advocacy for improving health outcomes for women in the areas of sexual and reproductive health, violence against women, maternity care, indigenous health and mental health. Addressing the serious health issue of violence against women the hospital’s Sexual Assault Prevention Program for Secondary Schools (SAPPSS) focuses on developing young people’s skills in relation to talking about sex and issues of consent. The Women’s leadership in this important area of women’s health has been recognised by the Federal Government. The hospital was funded as part of the national Respectful Relationships Programme aimed at tackling the issue of violence against women by developing respectful behaviours and healthy relationships amongst young people. The Women’s is proud of the active role the hospital played in informing the recent parliamentary debate around Abortion Law Reform. By sharing clinical expertise and our unique insights as a service provider the Women’s contributed to legal reform that delivered an improved outcome for women’s reproductive rights in Victoria.

FINANCIAL VIABILITY For the year ending 30 June 2009, the Women’s recorded a net deficit of $21.019 million after taking into account the impact of capital, depreciation and net results from its controlled entities, the Royal Women’s Hospital Foundation Limited and Royal Women's Hospital Foundation Trust Fund. The Victorian Government provides separately for depreciation costs via capital payments, in response to submissions by health services. Excluding capital, depreciation and controlled entities results, the Women’s recorded an operational deficit of $786,033 compared to an operational deficit of $891,628 the previous year.

OUR SUPPORTERS Each year, the Women’s enjoys tremendous support from the philanthropic community. Through private, corporate, community and individual giving the Women’s continues to shape the future of women’s and newborn health by investing in innovative research initiatives, adopting new technologies and establishing distinctive clinical and social programs. In recognition of the generous support received, the Women’s recently unveiled the new ‘Supporter Wall’ on the ground floor of the hospital as an important way of saying thank you to those who generously give to help the Women’s provide the very best care to women and newborn babies of Victoria.

year in review THE ROYAL WOMEN'S HOSPITAL ANNUAL REPORT 2009

ACKNOWLEDGEMENTS On behalf of the Board and Executive management team we again thank all of the staff of the Royal Women’s Hospital for their outstanding performance throughout the 2008/09 year. We also recognise our committee members, management team and volunteers for their commitment to the organisation over the past year.

Rhonda Galbally, AO Chair The Royal Women’s Hospital

Dale Fisher Chief Executive The Royal Women’s Hospital

board of directors THE ROYAL WOMEN'S HOSPITAL ANNUAL REPORT 2009

Board of Directors RHONDA GALBALLY AO (Chair) Dr Rhonda Galbally AO has focussed her life’s work on making a difference for a more equitable and inclusive society. For 25 years Rhonda has been a CEO in the business, philanthropic, community and government sectors. Her previous CEO positions include the Myer Foundation and the Sidney Myer Fund (and Chair of Philanthropy Australia) and as Founding CEO of the Australian Commission for the Future (Department of Science and Technology), the Australian International Health Institute (now the Nossal Institute, University of Melbourne) and the Victorian Health Promotion Foundation (VicHealth). The common denominator in Rhonda’s varied career has been the search for innovative solutions to entrenched social and economic exclusion, a path that has culminated in her co-founding as the CEO the groundbreaking web-based organisation, www.ourcommunity.com.au – which provides the hub for resources, training and support for Australia’s 700,000 community organisations. In 1990 Rhonda was recognised with an Order of Australia for services to the community. In 1996 she was awarded the World Health Organisation (Asia Pacific) medal for Tobacco and Health. In 1998 Rhonda was awarded a Latrobe University degree of Doctor of Science (honoris causa), in 2006 the RMIT University Award of the degree Doctor of Social Science (honoris causa). Rhonda is currently Chair of the Royal Women’s Hospital, National People with Disabilities and Carer Council, the Disability Advisory Council of Victoria and the Patron of Compassionate Friends. STEWART LESLIE (Deputy Chair) Stewart Leslie is a Fellow of the Institute of Chartered Accountants in Australia. For 15 years he was a partner with accounting firm KPMG where he specialised in assurance and advisory services. Since retiring from that partnership he has been appointed to a number of governance roles in the public sector. He is Victorian chair of corporate advisory firm Leadenhall VRG Pty Ltd, a member of the board of the Australian Institute of Management–Victoria and Tasmania, and the Audit Committee of the Australian Red Cross Blood Service. He is also a member of SME advisory boards and provides strategic consulting services, principally to the automotive industry. ELLENI BEREDED-SAMUEL Elleni Bereded-Samuel is currently employed by Victoria University as the Community Engagement Coordinator and is the co-founder of the Horn of African Communities Network in Victoria. Her dynamic leadership in creating new solutions for community members to access and participate in the University community, and society in general, is consolidated by her excellent networking and advocacy skills. Ms Bereded-Samuel is a Commissioner with the Victorian Multicultural Commission, Australian Social Inclusion Board and was recently appointed to the SBS Board. Ms Bereded-Samuel has been included on the Victorian Honour Roll of Women and she is also included in the 2006/07 ‘Who is Who Australian Women’ among 6,000 remarkable women in Australia. Ms Bereded-Samuel has won the 2008 Diversity@Work Individual Champion Award for Diversity and Inclusion. She was presented with her award by Sir Bob Geldof at a gala dinner. AILEEN BERRY Aileen Berry is Corporate Communications Manager at the Herald & Weekly Times. In a 20-year career with News Limited, Ms Berry has held a range of senior positions, including Marketing Manager, HWT; Assistant Editor, Herald Sun; CEO, News Magazines and Managing Director of Broadsystem Ltd. From 1997 to 2000, she was Director, Corporate Affairs for News Limited nationally. Ms Berry, who now works part time to accommodate her young family, serves on the Community Advisory and Quality Committees of the Royal Women’s Hospital, is a board member of Open Family Australia, and is an inaugural member of the Federal Attorney-General’s National Advisory Group on inter-country Adoption.

board of directors THE ROYAL WOMEN'S HOSPITAL ANNUAL REPORT 2009

MARIA BUTERA Maria Butera is the Executive Manager, Marketing and Business Development for Cbus (Construction and Building Industries Superannuation Fund), a position she has held since 1998. Cbus has over $13 billion in funds under management with 600,000 members and 65,000 participating employers. Ms Butera has extensive experience in the public sector, specifically in the building and construction industries in industrial relations, workplace management and contract management. GEORGE MORSTYN George Morstyn has had a significant career in biotechnology and oncology. Until 2002, he was Senior Vice-President of Development and Chief Medical Officer of Amgen, a $70 billion biotechnology company in the US. Dr Morstyn holds a number of local and international Directorships including the Cancer Therapeutics CRC, RISS, Chemgenex, Proacta and Symbio. He is chairman of the Board of GBS Venture Partners. Dr Morstyn previously worked as Director of Medical Oncology at the Austin Hospital and as head of the clinical program at the Ludwig Institute for Cancer Research, Melbourne. ROBERT THOMAS Robert Thomas is a Melbourne academic surgeon with a special interest in oncology and gastrointestinal surgery. He is a graduate of University of Melbourne, trained and worked at the Royal Melbourne Hospital and in Europe and the USA. In 2000 he was appointed Professor and Director of Surgical Oncology at Peter MacCallum Cancer Centre. Past positions include Presidency of COSA, Chair of the National Guidelines committee for colorectal cancer, Professor of Surgery at Western Hospital and member of the Victorian Ministerial Task force for cancer. He is the Chief Clinical Advisor for Cancer for the Victorian Government and works to progress a cancer reform agenda across the State. JANET WHITING Janet Whiting is a partner of the national law firm, Corrs Chambers Westgarth, practicing as a commercial lawyer in litigious and non-litigious areas. In addition to full-time practice, Ms Whiting is actively involved in the not for profit sector. Previous appointments include being the inaugural Chair of the Royal Womenâ&#x20AC;&#x2122;s Hospital Foundation and the Harold Mitchell Foundation, Vice President of the Melbourne International Arts Festival and Director of the L'OrĂŠal Melbourne Fashion Festival. Her present appointments include Deputy Chair of Victorian Major Events Company, Trustee of the Victorian Arts Centre Trust and Director of Tourism Australia. Former Board Directors 2008/09 SHARON BUTLER Sharon Butler is principal consultant with Silent Partners and specialises in strategic planning, leadership coaching and development, organisational change and process consulting. She has a Graduate Diploma in Health Services Management, a Masters of Business Administration, a Diploma of Company Directorship and a Bachelor of Applied Science (Nursing). She is also a Churchill Fellow. Ms Butler was Chair of the Primary Care and Population Health Advisory Committee and a member of the Quality Committee and the Remuneration Committee until 31st December 2008.

governance and compliance THE ROYAL WOMEN'S HOSPITAL ANNUAL REPORT 2009

Governance and Compliance This section includes disclosures required by the Health Services Act 1988, Financial Management Act 1994, the Whistleblowers Protection Act 1982. It also includes voluntary disclosures of additional regulatory compliance information.

Manner of Establishment and Relevant Minister The Royal Women’s Hospital (the Women’s) has provided health services to women and newborn babies of Victoria since 1856. The Women’s is a public health service and is incorporated pursuant to the provisions of the Health Services Act 1988 (the Act). For nine years the hospital was part of Women’s and Children’s Health and its predecessor organisation, the Women’s and Children’s Health Care Network. The Victorian Parliament passed legislation disaggregating Women’s and Children’s Health and establishing the Women’s as an independent health service with its own Board of Directors from 1 July 2004. The Hon. Daniel Andrews MP was appointed the Minister for Health in August 2007 and was the responsible Minister during the 2008/09 financial year.

Nature and Range of Services The Royal Women’s Hospital is Australia’s largest specialist hospital dedicated to improving the health of women and newborn babies. It is an obstetric, gynaecological and neonatal paediatric hospital that provides tertiary and specialist public primary health care. The hospital is committed to a holistic philosophy of health and provides comprehensive health services, ranging from health promotion to clinical expertise and leadership in gynaecology, cancer, pregnancy care, mental health and specialist care of newborn babies. The Women’s has the largest Victorian Neonatal Intensive and Special Care Unit (NISC) and is one of the largest providers of outpatient services in the state. The Women’s is a major teaching hospital with academic affiliations with several universities and tertiary educational institutions, notably the University of Melbourne and La Trobe University. It is a key state provider of training programs for obstetricians, gynaecologists, neonatologists, nurses, midwives and allied health professionals.

The hospital draws on its academic links with a range of universities to provide leadership in clinical care, research and teaching. It is a recognised international leader in research in areas of women’s and newborn health including pregnancy, gynaecological disorders and infertility.

Objectives, Functions, Powers and Duties The core object of the Royal Women’s Hospital is to provide public health services in accordance with the principles established as guidelines for the delivery of public hospital services in Victoria under section 17AA of the Act. The other objectives of the Women’s as a public health service are to: a) provide high quality health services to the community which aim to meet community needs effectively and efficiently; b) integrate care as needed across service boundaries in order to achieve continuity of care and promote the most appropriate level of care to meet the needs of individuals; c) ensure that health services are aimed at improvements in individual health outcomes and population health status by allocating resources according to best practice health care approaches; d) ensure that the hospital strives to continuously improve quality and foster innovation; e) support a broad range of high quality health research to contribute to new knowledge and to take advantage of knowledge gained elsewhere; f) operate in a business-like manner which maximises efficiency, effectiveness and cost effectiveness and ensure the financial viability of the hospital; g) ensure that mechanisms are available to inform consumers and protect their rights and to facilitate consultation with the community; h) operate a public health service as authorised by or under the Act; and i) carry out any other activities that may be conveniently carried out in connection with the operation of a public health service or calculated to make more efficient any of the hospital’s assets or activities. The objectives of the Royal Women’s Hospital as a public health service are detailed in the by-laws of the Royal Women’s Hospital, copies of which are available upon request. The powers and duties of the Royal Women’s Hospital are prescribed by the Act.

governance and compliance THE ROYAL WOMEN'S HOSPITAL ANNUAL REPORT 2009

Board of Directors The functions of the Board of a public health service are prescribed by the Act. Some of those functions are detailed below:

BOARD COMMITTEES The following committees provided advice to the Royal Women’s Hospital Board of Directors during the 2008/09 financial year:

a) to develop statements of priorities and strategic plans for the operation of the public health service and to monitor compliance with those statements and plans; b) to develop financial and business plans, strategies and budgets to ensure accountable and efficient provision of health services by the public health service and the long term financial viability of the public health service; c) to establish and maintain effective systems to ensure that the health services provided meet the needs of the communities serviced by the public health service and that the views of users and providers of health services are taken into account; d) to monitor the performance of the public health service; and e) to facilitate health research and education.

Audit and Corporate Risk Management Committee Chair: Ms Maria Butera Members: Professor Robert Thomas, Ms Christina Liosis

In performing its functions and exercising its powers, the Board of a public health service must have regard to: a) the needs and views of patients and other users of the health services that the public health service provides and the community that the public health service serves; b) the need to ensure that the public health service uses its resources in an effective and efficient manner; and c) the need to ensure that resources of the Victorian public health sector generally are used effectively and efficiently. The directors currently servicing on the Board of the Royal Women’s Hospital are: >> Dr Rhonda Galbally (Chair) >> Mr Stewart Leslie (Deputy Chair) >> Ms Aileen Berry >> Ms Elleni Bereded-Samuel >> Ms Maria Butera >> Dr George Morstyn >> Prof Robert Thomas >> Ms Janet Whiting

The following director served on the Board during the 2008/09 financial year but is no longer serving:

Finance Committee Chair: Mr Stewart Leslie Members: Dr George Morstyn, Ms Janet Whiting, Ms Christina Liosis Investment Committee Chair: Ms Maria Butera Members: Dr George Morstyn, Mr Ray King, Mr Michael Tilley Remuneration Committee Chair: Dr Rhonda Galbally Members: Mr Stewart Leslie, Ms Sharon Butler (until December 2008), Ms Janet Whiting Quality Committee Chair: Dr George Morstyn Members: Ms Aileen Berry, Ms Sharon Butler (until December 2008), Professor Robert Thomas, Ms Rhonda Brown

Advisory Committees Community Advisory Committee Chair: Ms Elleni Bereded Samuel Members: Ms Hala Abdelnour, Ms Aileen Berry, Ms Victoria Garner, Ms Angela Gesell, Ms Kate Graham, Ms Tricia Malowney, Ms Toni Mason Ms Mandy Eres, Ms Afshan Mantoo, Ms Anna Moo, Ms Serena Bridges (since December 2008)

Women’s Health Committee (Primary Care and Population Health Advisory Committee) Chair: Ms Sharon Butler (until December 2008), Prof Robert Thomas (present) Members: Ms Elleni Bereded-Samuel, Ms Fiona Beale, Ms Georgia Birch, Ms Di Couch, Ms Marianne Glen, Ms Debra Goldfinch, Professor Anne Kavanagh, Ms Tricia Malowney, Dr Helen McLachlan, Assoc. Professor Anne Mitchell

>> Ms Sharon Butler

governance and compliance THE ROYAL WOMEN'S HOSPITAL ANNUAL REPORT 2009

management and organisational structure

Chief Executive

Office of the Chief Executive >> Communications >> Legal Counsel

Clinical Governance

Research

clinical services

corporate and contracts

medical advisor

>> Gynaecology and Women’s Cancer

>> Public Private Partnership (PPP) – Contract Management

>> Peri-natal Emergency Referral Service (PERS)

>> Major Contract Management

>> Medical Workforce

>> Maternity >> Neonatal Services >> Women’s Health

>> Clinical Support Services

nursing and midwifery advisor

>> Neonatal Emergency Transport Service (NETS) >> Clinical Resources and Support

>> Non-Clinical Support Services

Chief Executive: Ms Dale Fisher Medical Advisor: Dr Christine Bessell Nursing and Midwifery Advisor: Ms Bobbie Carroll Executive Director, Corporate: Mr Carl Putt Executive Director Human Resources: Mr Chris Gamble Executive Director Strategy, Planning and Performance: Ms Nicole Tweddle Chief Finance Officer: Mr Zak Gruevski Legal Counsel: Ms Elizabeth Kennedy Communications Director: Ms Stephanie Boag

human resources

>> Accounts

Strategy, Planning and Performance (Allied Health Advisor)

>> Workforce Capability

>> Patient Accounts

>> Information Services

>> Workforce Performance

>> Business Analysis

>> Operational Planning and Performance

>> Workforce Capacity

finance and business support

>> Systems Administration >> Payroll

>> Strategy and Planning

WORKFORCE DATA ROYAL WOMEN’S HOSPITAL FULL TIME EQUIVALENT (FTE) EMPLOYEES JUNE 2009

JUNE JUNE JUNE LABOUR CATEGORY Current YTD FTE Current Month FTE Month Head Count

Nursing 617 Administration and Clerical 244 Medical Support 83 Hotel and Allied Services 18 Medical Officers 27 Hospital Medical Officers 101 Sessional Clinicians 43 Ancillary Staff (Allied Health) 53 Total 1,186

611 244 88 22 28 96 40 49 1,178

1226 414 142 45 38 186 215 113 2,379

governance and compliance THE ROYAL WOMEN'S HOSPITAL ANNUAL REPORT 2009

APPLICATION OF MERIT AND WORKPLACE EQUITY PRINCIPLES The Women’s is committed to the public sector values and workplace equity principles. This includes equal opportunity, freedom from all forms of discrimination and creating and maintaining a work environment where all employees are treated with dignity and respect, and where diversity is valued. It is the hospital’s objective to ensure that its procedures for dealing with grievances such as discrimination, sexual harassment and workplace bullying are consistent, fair and equitable. Decisions on all aspects of staff selection, promotion, transfer, training and retention are based on the principles of merit and equity. The hospital has reinforced the values by including them in all new position descriptions and will reinforce them in the coming 12 months through workforce ethics training and incorporation of the values in performance development tools.

patient data management The Royal Women’s Hospital is committed to ensuring the integrity of all of its data, including reportable information. Following a review of the hospital’s performance, in February this year, the hospital found that data was being inappropriately recorded in relation to the “not ready for care” waiting time as part of the Elective Surgery Information System (ESIS). Appropriate actions were immediately taken by the hospital to resolve this issue which affected at that time, around 62 patient records out of approximately 12,000 elective surgery patients seen annually. While a further review found that this practice had been in place for a long period of time, we determined that this issue had not caused any adverse outcomes or clinical concerns for patients classified as not ready for care. In addition, the hospital did not derive any financial benefit for this because the hospital’s ESIS targets were not subject to any bonus funding. Since finding the problem, the hospital has undertaken a data management reform program in order to improve data controls and processes to ensure the data reflects performance.

governance and compliance THE ROYAL WOMEN'S HOSPITAL ANNUAL REPORT 2009

OCCUPATIONAL HEALTH AND SAFETY During the 2008/09 financial year, the Women’s Occupational Health and Safety (OH&S) activities and safety plan focused on settling staff and patients into the new campuses in Parkville and providing appropriate support through the transition year. The post-relocation safety plan was developed and implemented to ensure safety related risks were addressed across all hospital campuses in the period after the move. Some of the key OH&S initiatives for 2008/09 include:

Prevention and Management of Workplace Aggression and Violence >> The new emergency code, ‘code grey', was introduced for staff when dealing with an unarmed/non physical threat of violence from patients, relatives and visitors; >> Continued monthly training sessions for staff

on the prevention and management of workplace aggression and violence; >> The introduction of a governance structure headed

by a reference group and supported by two working groups, to oversee an organisation-wide, integrated approach to managing behavioural emergencies. These groups address both OH&S and clinical issues associated with behavioural emergencies in the workplace. The multidisciplinary reference group will further develop the required policies, procedures and training for staff, and PPP service providers, to ensure the hospital continues to manage behavioural emergencies in an appropriate and timely manner; >> Participation in a National Compliance project

coordinated by WorkSafe Victoria to evaluate compliance with the latest Prevention and Management of Aggression in Health Services WorkSafe Guidelines. The evaluation demonstrated that the Women’s complies with the guidelines.

The Women’s Smoke Free initiative >> The Women’s joined the Parkville Precinct Smoke-free Committee to implement a range of activities aimed at creating an environment free of tobacco smoke within the hospital precinct. As part of the precinct-wide committee, the Women’s led a range of staff-focused health promotion activities for World No Tobacco Day in May 2009. >> In addition, the Women’s established a Smoke Free

Working Party in February 2009 to align with the work undertaken by the precinct-wide committee. The hospital is working toward becoming totally smoke free within the next 12 months.

Australian Council of Healthcare Standards (ACHS) Accreditation Survey >> A significant part of the Women’s safety program in the 2008/09 year was the ACHS periodic review accreditation survey in March 2009. The Women’s maintained its Extensive Achievement (EA) rating from the ACHS for safety management systems which includes the chemical management, manual handling and radiation safety programs. The Women’s was rated above its previous performance for Emergency Management for which the hospital received an EA rating. This was based on the emergency management plans developed for the relocation, the implemented emergency management plans for all campuses and the work done to ensure the new MRI safety and emergency management requirements were developed and implemented before the MRI was commissioned. The workers compensation claims experience has improved with the workers compensation premium payable decreasing by 11% in 2008/09 compared to the previous financial year. The hospital’s claims cost rate also improved by 21.9% in 2008/09 compared to the previous period. Our Employer Performance Rating improved by 16% and the Women's performed 53.22% better than other comparable Victorian health services. The main focus of the Women’s safety program for the coming year will include the Management of Behavioural Emergencies Project, the launch of a new manual handling training program for non clinical departments and a WorkCover systems continuous improvement project.

governance and compliance THE ROYAL WOMEN'S HOSPITAL ANNUAL REPORT 2009

FREEDOM OF INFORMATION The Victorian Freedom of Information (FOI) Act 1982 provides members of the public the right to apply for access to documents held by the Royal Women’s Hospital. The hospital has obstetric medical records from 1960 onwards and gynaecology records from 1968 onwards. Prior to 1960, minimal birth details (for example time of birth, weight and length) are available from Birth Registers.

WHISTLEBLOWER PROTECTION The Women’s has established procedures to facilitate disclosures about improper conduct and to provide protection for whistleblowers in accordance with the Whistleblowers Protection Act 2001 and the Guidelines issued by the Ombudsman Victoria. The Women’s Legal Counsel is the Protected Disclosure Officer for the purpose of the Act. There were no disclosures of corrupt or improper conduct as defined in the Act in the year under review and accordingly there were no referrals to or from the Ombudsman for investigation.

Nominated Officers Freedom of Information Officer: Ms Emma Beattie Medico-Legal Officer: Dr Christine Bessell Requests received

Total

2008/09 2007/08 2006/07

325

329

342

276 33 13

298 23 6

311 20 8

Outcome of request

Access No information available Withdrawn Denied in Full

PRIVACY The Women’s has been proactive in making employees aware of applicable privacy legislation and its implications in the workplace including regular presentations at orientation sessions. Nominated Officer Privacy Officer: Ms Emma Beattie

COMPLIANCE WITH THE BUILDING ACT The Occupancy Permit for the new hospital building was issued in March 2008 and commissioned for use in June 2008. The new hospital was built under the Government’s ‘Partnership Victoria’ policy with the contract requiring the State’s private sector partner, Royal Women’s Health Partnership (RWHP) to design, build and maintain the new building to the commissioning standards for a period of 25 years. The new hospital was opened in June 2008 and complies with all of the necessary legislative requirements, for example, the building code and fire regulations. Ongoing maintenance is the responsibility of United Group Services through its contractual obligations with RWHP. Performance is monitored via a suite of extensive key performance indicators. The new hospital is operated by the public sector and will revert to full public ownership at the end of the 25 year operating phase. At the hospital’s Carlton site there is an annual budget allocation that supports the operational maintenance activities and includes items associated in keeping with but not limited to these scheduled within the Building Act.

governance and compliance THE ROYAL WOMEN'S HOSPITAL ANNUAL REPORT 2009

ENVIRONMENTAL PERFORMANCE The Women’s waste management practices aim to minimise any potential environmental impact arising as a result of the hospital’s operations. The following guidelines and standards inform the hospital’s Waste Management strategy and policy:

COMPETITIVE NEUTRALITY The Royal Women’s Hospital has regard to the Competitive Neutrality Policy Victoria (the Policy) and integrates rigorous financial principles with a strong public interest test and transparency in its decision making.

>> National Guidelines for Waste Management

Competitive neutrality is about ensuring that the significant business activities of publicly owned entities compete fairly in the market when it is in the public interest for them to do so. It is about transparent cost identification and pricing in a way which removes net cost advantages arising from public ownership. Competitive neutrality does not apply to non-business, non-profit activities of government.

in the Health Care Industry – NHMRC >> Management of Clinical and Related Wastes

– AS/NZS 3816:1998 >> Code of Practice for the Management of Clinical

and related Wastes – Australian and New Zealand Waste Management Industry Group 4th Edition 2004 >> Infection control guidelines – for the prevention

of transmission of infectious diseases in the healthcare setting. Communicable Diseases Network Australia, Australian Health Ministers Advisory Group.

CONSULTANCIES The Royal Women’s Hospital did not utilise any consultancies in excess of $100,000 during the 2008/09 year. Throughout the financial year, the hospital engaged 25 consultancies at a total cost of $390,928.

The Government of Victoria is a party to the inter-governmental Competition Principles Agreement which is one of three agreements that collectively underpin National Competition Policy. The Victorian Government is committed to the ongoing implementation of the National Competition Policy in a considered and responsible manner. This means that public interest considerations should be taken into account explicitly in any government decisions on the implementation of this policy. Under the CPA, Victoria is obliged to apply competitive neutrality policy and principles to all significant business activities undertaken by government agencies and local governments where the benefits of applying competitive neutrality exceed the costs. Competitive Neutrality Policy Victoria (the Policy) sets out the Victorian approach to competitive neutrality.

governance and compliance THE ROYAL WOMEN'S HOSPITAL ANNUAL REPORT 2009

Summary of Financial Results The Royal Women’s Hospital and its controlled entitIES

Total Revenue Total Expenses

2008/09

2007/08

2006/07

2005/06

2004/05

$ ‘000

200,164 163,625 149,159 (221,183) (164,427) (156,108)

139,745 142,578

129,777 133,600

Operating Surplus /(Deficit) after Capital and Controlled EntitIES

(21,019)*

Retained surplus/accumulated deficit

(53,773)

(30,629)

(24,746) (132,233)

Total Assets Total Liabilities Net Assets Total Equity

406,357 311,762 94,595 94,595

396,146 286,534 109,612 109,612

113,414 38,419 74,995 74,995

(802)*

(6,949)*

(2,833)*

113,876 32,006 81,870 81,870

(3,823)*

(6,491) 102,241 29,802 72,439 72,439

* For 2008/09, comprise the net deficit from operations $786,033, net capital income, specific items and depreciation expense $20,104,752 and controlled entities deficit of $128,646. * For 2007/08, comprise the net deficit from operations $891,628, net capital income and depreciation expense $858,794 and controlled entities surplus of $947,891.

Summary of Financial Results In 2008/09 the Royal Women’s Hospital Foundation raised $2.8M compared to $2.9M the previous year. Throughout the financial year the Foundation disbursed $2.3M to support the various activities at the Women’s ranging from minor equipment purchases to major research projects.

FINANCIAL REPORTING DIRECTIONS The additional information listed in Financial Reporting Directions (22) ‘Standard Disclosures in the Report of Operations’ is available to the relevant Minister, Member of Parliament and the public on request.

The amount and timing of disbursements from the Foundation depends on the specific projects undertaken and the equipment needs of the individual hospital departments at any given time. In 2008/09 the amount disbursed from the Foundation together with the costs resulted in the Foundation recording a deficit of $128,646.

governance and compliance THE ROYAL WOMEN'S HOSPITAL ANNUAL REPORT 2009

SUMMARY OF SERVICE STATISTICS

2008/09

2007/08

2006/07

Births Inpatient stays Outpatient visits

6,589 28,371 132,921

6,466 29,956 167,871

6,360 31,687 162,895

ELECTIVE SURGERY PERFORMANCE

Category 1 proportion of patients admitted within 30 days Category 2 proportion of patients admitted within 90 days Category 3 proportion of patients admitted within 365 days Average waiting time for category 2 (days) Total patients on ESIS waiting list as at 30 June Hospital Initiated Postponements Elective surgery admissions (ESIS)

n/a n/a n/a n/a n/a n/a 2,752

n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a New SoP reporting requirement New SoP reporting requirement

Please note: Following completion of the independent audit of the Royal Womenâ&#x20AC;&#x2122;s Hospital elective surgery data in April 2009, DHS and RWH agreed that it was not possible to re-establish 2008/09 data with complete accuracy, thus it has been excluded including comparative years data. EMERGENCY DEPARTMENT PERFORMANCE Triage performance

Category 1 patients receiving immediate attention Category 2 patients receiving attention within 10 mins Category 3 patients receiving attention within 30 mins % patients admitted in 8 hours

100% 91% 90% 100%

100% 93% 91% 100%

100% 87% 76% 100%

ADMITTED PATIENT SEPARATIONS

Same-day Multi-day Total Separations Average Available Beds

11,306 17,065 28,371 236

NICU standard and flex operating capacity Proportion of women with prearranged postnatal home care Emergency Elective Other (including maternity) Total separations Public separations Total WIES Total bed days

18-20 97% 2,484 10,266 15,621 28,371 23,253 24,113 79,794

13,300 16,656 29,956 217

14,813 16,872 31,685 217

New SoP reporting requirement New SoP reporting requirement 2,299 2,026 11,789 12,285 15,868 17,374 29,956 31,685 24,815 26,560 24,168 23,656 84,931 86,631

governance and compliance THE ROYAL WOMEN'S HOSPITAL ANNUAL REPORT 2009

SUMMARY OF SERVICE STATISTICS continued

2008/09

2007/08

2006/07

NON ADMITTED PATIENTS

Emergency department presentations Outpatient services – occasions of service (VACS) Other services – occasions of service (non-VACS) Other services – occasions of service (MBS) Total occasions of service VACS – number of encounters

24,756 146,430 102,787 1,885 275,858 132,921

26,497 258,269 2,638 0 284,766 167,871

30,150 240,292 3,725 0 274,167 162,895

quality and safety

Accreditation status (%) Cleaning standards (%)* Submission of data to VICNISS (%) VICNISS Infection Surveillance Indicators Participation in Hand Hygiene Program

100% 97.3% 100% No outlier infection rates Yes

* As per external audit. "Births" is the number of women giving birth. ESIS – Elective Surgery Information System (DHS reporting). Data extracted 20/08/09.

Financial Report 2008/09

FINANCIAL REPORT 2008/09 The Royal Women’s Hospital and its controlled entities

Board member's, accountable officer's and chief finance and accounting officer's declaration We certify that the attached financial report for the Royal Women's Hospital and its Controlled Entities have been prepared in accordance with Part 4.2 of the Standing Directions of the Minister for Finance under the Financial Management Act 1994, applicable Financial Reporting Directions, Australian Accounting Standards, Australian Accounting Interpretations and other mandatory professional reporting requirements. We further state that, in our opinion, the information set out in the Operating Statement, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and notes to and forming part of the financial statements, presents fairly the financial transactions during the year ended 30 June 2009 and the financial position of the Royal Women's Hospital and its Controlled Entities as at 30 June 2009. We are not aware of any circumstances which would render any particulars included in the financial reports to be misleading or inaccurate. We authorise the attached financial report for issue on this day.

Rhonda Galbally, AO Chair The Royal Women’s Hospital Melbourne 14 September 2009

Dale Fisher Accountable Officer The Royal Women’s Hospital Melbourne 14 September 2009

Zak Gruevski Chief Finance and Accounting Officer The Royal Women’s Hospital Melbourne 14 September 2009

Attestation on Data Integrity I, Dale Fisher CEO certify that during the year the Royal Women’s Hospital has critically reviewed its internal controls and processes to ensure that DHS is provided with data that reflects actual performance. The Women’s will continue to review these controls and processes.

Dale Fisher Chief Executive, The Royal Women’s Hospital 14 September 2009 Attestation on Compliance with Australian and New Zealand Risk Management (Chair) I, Rhonda Galbally, certify that the Royal Women’s Hospital has risk management processes in place consistent with the Australian/New Zealand Risk Management Standard and an internal control; system is in place that enables the executives to understand, manage and satisfactorily control risk exposures. The audit committee verifies this assurance and that the risk profile of the Royal Women’s Hospital has been critically reviewed within the last 12 months.

Rhonda Galbally, AO Chair, The Royal Women’s Hospital 14 September 2009

FINANCIAL REPORT 2008/09 The Royal Womenâ&#x20AC;&#x2122;s Hospital and its controlled entities

FINANCIAL REPORT 2008/09 The Royal Women’s Hospital and its controlled entities

Operating Statement For the Year Ended 30 June 2009

PARENT Entity 2009 2008

CONSOLIDATED 2009 2008

$‘000

NOTE

$‘000

Revenue from Operating Activities 2 Revenue from Non-operating Activities 2 Employee Benefits 3 Non Salary Labour Costs 3 Supplies and Consumables 3 Other Expenses from Continuing Operations 3 Net Result Before Capital and Specific Items

161,073 562 (118,916) (5,000) (17,217) (21,288) (786)

152,893 530 (112,052) (5,612) (15,562) (21,088) (891)

162,180 620 (119,293) (5,010) (17,225) (21,397) (125)

154,350 605 (112,337) (5,647) (15,589) (21,323) 59

Capital Purpose Income 2 Impairment of Financial Assets 3 Depreciation and Amortisation 4 Specific Expense 3c Finance Costs 5 Expenditure using Capital Purpose Income 3 Net Result for the Period

38,042 (2,352) (16,674) (2,561) (21,314) (15,246) (20,891)

8,671 – (7,742) – (993) (795) (1,750)

37,364 (2,460) (16,677) (2,561) (21,314) (15,246) (21,019)

8,670 – (7,743) – (993) (795) (802)

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

$‘000

FINANCIAL REPORT 2008/09 The Royal Women’s Hospital and its controlled entities

Balance Sheet as at 30 June 2009

PARENT Entity CONSOLIDATED 2009 2008 2009 2008

$‘000

NOTE

$‘000

Current Assets

Cash and Cash Equivalents 6 Receivables 7 Other Financial Assets 8 Inventories 9 Other Current Assets 10 Total Current Assets

2,074 4,672 1,000 265 333 8,344

1,703 6,518 1,174 168 369 9,932

2,527 4,530 1,000 265 333 8,655

2,758 6,420 1,174 168 369 10,889

Non-Current Assets

Receivables 7 Other Financial Assets 8 Property, Plant and Equipment 11 Intangible Assets 12 Other Non-Current Assets 10 Total Non-Current Assets Total Assets

1,589 12,150 357,423 24,672 808 396,642 404,986

251 14,439 369,081 1,029 – 384,800 394,732

1,589 13,167 357,439 24,699 808 397,702 406,357

251 14,894 369,082 1,030 – 385,257 396,146

Current Liabilities

Payables 13 Interest Bearing Liabilities 14 Employee Benefits and Related On-Costs Provisions 15 Other Liabilities 16 Total Current Liabilities

12,747 3,105 21,682 883 38,417

10,156 2,441 22,211 1,005 35,813

12,747 3,105 21,692 883 38,427

10,158 2,441 22,219 1,005 35,823

Non-Current Liabilities

Interest Bearing Liabilities 14 Employee Benefits and Related On-Costs Provisions 15 Total Non-Current Liabilities Total Liabilities Net Assets

268,091 5,243 273,334 311,751 93,235

246,999 3,712 250,711 286,524 108,208

268,091 5,244 273,335 311,762 94,595

246,999 3,712 250,711 286,534 109,612

EQUITY

Property, Plant & Equipment Revaluation Reserve Financial Assets Available for Sale Revaluation Reserve General Purpose Reserve Restricted Specific Purpose Reserve Contributed Capital Accumulated Surpluses/(Deficits) Total Equity Commitments Contingent Assets and Contingent Liabilities

17a 17a 17a 17a 17b 17c 17d

25,166 (146) 21,621 10,128 91,107 (54,641) 93,235

19,913 (811) 17,976 10,736 91,107 (30,713) 108,208

25,166 (115) 21,621 10,589 91,107 (53,773) 94,595

19,913 (864) 17,976 12,209 91,107 (30,729) 109,612

21 25

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

FINANCIAL REPORT 2008/09 The Royal Women’s Hospital and its controlled entities

Statement of Changes in Equity For the Year Ended 30 June 2009

PARENT Entity 2009 2008

CONSOLIDATED 2009 2008

NOTE

$‘000

Total Equity at Beginning of Financial Year Gain/(Loss) on Asset Revaluation 17a Available-for-sale Investments: Gain/(Loss) taken to Equity 17a Transferred to profit or loss for the period 17a Impairment Loss transferred to Operating Statement for the period 17a Net Income Recognised Directly In Equity Net Result for the Year Total Recognised Income and Expense for the Year Transactions with the State in its Capacity as Owner 17b Total Equity at the End of the Financial Year

108,208 5,253

74,486 7,648

109,612 5,253

74,995 7,648

(2,086) 399

(1,591) 707

(2,111) 399

(1,644) 707

2,352 5,918 (20,891) (14,973) – 93,235

– 6,764 (1,750) 5,014 28,708 108,208

2,461 6,002 (21,019) (15,017) – 94,595

– 6,711 (802) 5,909 28,708 109,612

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

FINANCIAL REPORT 2008/09 The Royal Women’s Hospital and its controlled entities

Cash Flow Statement For The Year Ended 30 June 2009

PARENT Entity 2009 2008

CONSOLIDATED 2009 2008

$‘000

NOTE

$‘000

CASH FLOWS FROM OPERATING ACTIVITIES

Operating Grants from Government Patient and Resident Fees Received Private Practice Fees Received Donations and Bequests Received GST Received from/(paid to) ATO Interest Received Other Receipts Employee Benefits Paid Payments for Supplies and Consumables Other Payments Cash Generated from Operations

130,504 4,811 1,781 1,704 1,610 117 21,089 (122,347) (17,888) (20,916) 465

131,093 2,616 1,451 1,571 1,875 304 13,788 (111,705) (16,947) (22,697) 1,349

130,504 4,811 1,781 2,239 1,616 145 21,148 (122,731) (17,899) (21,028) 586

131,093 2,616 1,451 2,829 1,912 337 14,019 (112,021) (16,975) (22,967) 2,294

Capital Grants from Government Capital Donations and Bequests Received Net Cash Inflow/(Outflow) from Operating Activities 18

2,180 747 3,392

1,968 294 3,611

2,180 69 2,835

1,968 294 4,556

(4,553) – 4,363 (1,485) – (1,675)

(3,427) (25,460) 99 (4,161) 5,334 (27,615)

(4,554) – 4,363 (1,985) – (2,176)

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of Non-Financial Assets Purchase of Intangibles Proceeds from sale of Non-Financial Assets 2c Purchase of Investments Proceeds from sale of Investments Net Cash Inflow/(Outflow) from Investing Activities

(3,412) (25,431) 99 (3,326) 4,500 (27,570)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from Borrowings Repayment of Borrowings Contributed Capital from Government Net Cash Inflow/(Outflow) from Financing Activities

24,490 (293) – 24,197

– (2,500) 1,208 (1,292)

24,490 (293) – 24,197

– (2,500) 1,208 (1,292)

Net Increase/(Decrease) in Cash Held Cash and Cash Equivalents at Beginning of Period Cash and Cash Equivalents at End of Period 6

19 1,172 1,191

644 528 1,172

(583) 2,227 1,644

1,088 1,139 2,227

Non-Cash Financing and Investing Activities

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

Notes to and forming part of the financial statements for the year ended 30 June 2009 The Royal Womenâ&#x20AC;&#x2122;s Hospital and its controlled entities

Notes to the Financial Statements Table of contents

Note1: Note 2: Note 2a: Note 2b: Note 2c: Note 2d: Note 3: Note 3a: Note 3b: Note 3C: Note 4: Note 5: Note 6: Note 7: Note 8: Note 9: Note 10: Note 11: Note 12: Note 13: Note 14: Note 15: Note 16: Note 17: Note 18: Note 19: Note 20: Note 21: Note 22A: Note 22B: Note 23: Note 24: Note 25:

> Statement of Significant Accounting Policies > Revenue > Analysis of Revenue by Source > Patient and Resident Fees Net Gain/(Loss) on Disposal of Non-Financial Assets > Assets Received Free of Charge or For > Nominal Consideration > Expenses > Analysis of Expenses by Source Analysis of Expenses by Internal and Restricted Specific Purpose Funds for Services Supported > by Hospital and Community Initiatives > Specific Expenses > Depreciation and Amortisation > Finance Costs > Cash and Cash Equivalents > Receivables > Other Financial Assets > Inventories > Other Assets > Property, Plant and Equipment > Intangible Assets > Payables > Interest Bearing Liabilities Employee Benefits and Related On-Costs Provision > > Other Liabilities > Equity Reconciliation of Net Result for the Year to Net Cash Inflow/(Outflow) from > Operating Activities > Non-Cash Financing and Investing Activities > Financial Instruments > Commitments > Responsible Persons Disclosures > Executive Officer Disclosures > Events Occurring after the Balance Sheet Date > Controlled Entities > Contingent Assets and Contingent Liabilities

28 37 39 41 42 42 43 47

48 49 49 50 50 51 52 52 52 53 57 58 58 59 60 61

63 63 64 70 73 75 75 76 76

Notes to and forming part of the financial statements for the year ended 30 June 2009 The Royal Women’s Hospital and its controlled entities

Note 1: Statement of Significant Accounting Policies (a) Statement of Compliance

The financial report is a general purpose financial report which has been prepared on an accrual basis in accordance with the Financial Management Act 1994, and applicable Australian Accounting Standards (AAS) and Australian Accounting Interpetations. AASs includes Australian equivalents to International Financial Reporting Standards.

The financial report includes all the controlled activities of the Royal Women’s Hospital.

The entity is a not-for-profit entity and therefore applies the additional Aus paragraphs applicable to "not-for-profit" entities under AAS's.

(e) Principles of Consolidation

(b) (i) Basis of Preparation The financial report is prepared in accordance with the historical cost convention, except for the revaluation of certain non-current assets and financial instruments, as noted. Cost is based on the fair values of the consideration given in exchange for assets. In the application of AASs management is required to make judgments, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgments. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision, and future periods if the revision affects both current and future periods. Accounting policies are selected and applied in a manner which ensures that the resulting financial information satisfies the concepts of relevance and reliability, thereby ensuring that the substance of the underlying transactions or other events is reported. The accounting policies set out below have been applied in preparing the financial report for the year ended 30 June 2009, and the comparative information presented in these financial statements for the year ended 30 June 2008.

(b) (ii) Going Concern The financial statements are prepared on a going concern basis. The Royal Women's Hospital is wholly dependant on the continued financial support of the State Government and in particular, the Department of Health. The Department of Health has provided confirmation that it will continue to provide the Royal Women's Hospital adequate cash flow support to meet its current and future obligations as and when they fall due for a period up to September 2010. This position is reviewed annually to ensure continuity under the going concern basis.

(d) Rounding of Amounts All amounts shown in the financial report have been rounded to the nearest thousand dollars. The assets, liabilities, incomes and expenses of all controlled entities of the Royal Women’s Hospital have been included at the values shown in their audited Annual Financial Reports. Subsidiaries are entities controlled by the Royal Women’s Hospital; control exists when the Royal Women’s Hospital has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are exercisable are taken into account. Any inter-entity transactions have been eliminated on consolidation. The consolidated financial statements include the audited financial statements of the controlled entities listed in note 24. The Royal Women’s Hospital Foundation Trust Fund is a controlled entity of the Royal Women's Hospital by virtue of the power to appoint or remove trustee of the Trust Fund. The Royal Women’s Hospital Foundation Limited is a controlled entity of the Royal Women's Hospital by virtue of the power to appoint or remove directors of the Company.

(f) Cash and Cash Equivalents Cash and cash equivalents comprise cash on hand and in banks and investments in money market instruments, which are readily convertible to known amounts of cash and are subject to insignificant risk of changes in value.

(g) Receivables Trade debtors are carried at nominal amounts due and are due for settlement within 30 days from the date of recognition. Collectability of debts is reviewed on an ongoing basis, and debts which are known to be uncollectible are written off. A provision for doubtful debts is raised where doubt as to collection exists. Bad debts are written off when identified.

(h) Inventories Inventories include goods and other property held either for sale or for distribution at no or nominal cost in the ordinary course of business operations. Inventories held for distribution are measured at cost, adjusted for any loss of service potential. All other inventories are measured at the lower of cost and net realisable value.

Notes to and forming part of the financial statements for the year ended 30 June 2009 The Royal Women’s Hospital and its controlled entities

(i) Other Financial Assets Other financial assets are recognised and derecognised on trade date where purchase or sale of an investment is under a contract whose terms require delivery of the investment within the timeframe established by the market concerned, and are initially measured at fair value, net of transaction costs. The Royal Women’s Hospital classifies its other financial assets between current and non-current assets based on the Board of Management’s intention at balance date with respect to the timing of disposal of each asset. The Royal Women’s Hospital assesses at each balance sheet date whether a financial asset or group of financial assets is impaired. The investment portfolio of the Royal Women's Hospital is managed by Victorian Funds Management Corporation through specialist fund managers and a Master Custodian. The Master Custodian holds the investments and conducts settlements pursuant to instructions from the specialist fund managers. Dividend revenue is recognised on a receivable basis. Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on the financial asset. Available-for-sale financial assets Other financial assets held by the entity are classified as being available-for-sale and are stated at fair value. Gains and losses arising from changes in fair value are recognised directly in equity until the investment is disposed of or is determined to be impaired, at which time the cumulative gain or loss previously recognised in equity is included in profit or loss for the period. Fair value is determined in note 20.

(j) Intangible Assets Intangible assets represent identifiable non-monetary assets without physical substance such as computer software and car park revenue recognition rights. Intangible assets are initially recognised at cost. Subsequently, intangible assets with finite useful lives are carried at cost less accumulated amortisation and accumulated impairment losses. Costs incurred subsequent to initial acquisition are capitalised when it is expected that additional future economic benefits will flow to the entity. Amortisation is allocated to intangible assets with finite useful lives on a systematic (typically straight-line) basis over the asset’s useful life. Amortisation begins when the asset is available for use, that is, when it is in the location and condition necessary for it to be capable of operating in the manner intended by management. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each annual reporting period. In addition, an assessment is made at each reporting date to determine whether there are indicators that the intangible asset concerned is impaired. If so, the assets concerned are tested as to whether their carrying value exceeds their recoverable amount.

Intangible assets with finite useful lives are amortised by the Royal Women’s Hospital over a 3 -25 year period (2008: 3 years).

(k) Property, Plant and Equipment Crown Land is measured at fair value with regard to the property’s highest and best use after due consideration is made for any legal or constructive restrictions imposed on the asset, public announcements or commitments made in relation to the intended use of the asset. Theoretical opportunities that may be available in relation to the asset(s) are not taken into account until it is virtually certain that any restrictions will no longer apply. Land and Buildings are recognised initially at cost and subsequently measured at fair value less accumulated depreciation and impairment. Plant, Equipment and Vehicles are recognised initially at cost and subsequently measured at fair value less accumulated depreciation and impairment. Cultural Assets are measured at fair value less impairment.

(l) Revaluations of Non-current Physical Assets Non-current physical assets measured at fair value are revalued in accordance with Financial Reporting Direction 103D (FRD103D). This revaluation process normally occurs every five years, based upon the asset's Government Purpose Classification, but may occur more frequently if fair value assessments indicate material changes in values. Revaluation increments or decrements arise from differences between an asset’s carrying value and fair value. Revaluation increments are credited directly to the asset revaluation reserve, except that, to the extent that an increment reverses a revaluation decrement in respect of that class of asset previously recognised as an expense in net result, the increment is recognised as income in the net result. Revaluation decrements are recognised immediately as expenses in the net result, except that, to the extent that a credit balance exists in the asset revaluation reserve in respect of the same class of assets, they are debited directly to the asset revaluation reserve. Revaluation increases and revaluation decreases relating to individual assets within an asset class are offset against one another within that class but are not offset in respect of assets in different classes. Revaluation reserves are not transferred to accumulated funds on derecognition of the relevant asset. In accordance with FRD103D the Royal Women's Hospital's non current physical assets were subjected to a detailed valuation in the current financial year.

Notes to and forming part of the financial statements for the year ended 30 June 2009 The Royal Women’s Hospital and its controlled entities

(m) Depreciation and Amortisation

(n) Net Gain/(Loss) on Non-Financial Assets

Assets with a cost in excess of $1,000 (2008-09 and 2007-08) are capitalised and depreciation has been provided on depreciable assets so as to allocate their cost or valuation over their estimated useful lives using the straight-line method. Estimates of the remaining useful lives and depreciation method for all assets are reviewed at least annually. This depreciation charge is not funded by the Department of Health.

Net Gain/(Loss) on non-financial assets includes realised and unrealised gains and losses from revaluations, impairment and disposals of all physical assets and intangible assets. Disposal of Non-Financial Assets Any gain or loss on the sale of non-financial assets is recognised at the date that control of the asset is passed to the buyer and is determined after deducting from the proceeds the carrying value of the asset at that time.

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

2008-09

Leased Buildings – Structure/ Shell/ Building Fabric 52 Years – Other: Site Engineering services and central plant, Fit out, Trunk Reticulated Building Systems 23 – 24 Years – Building Leasehold Improvements 25 Years

(o) Net Gain/ (Loss) on Financial Instruments

2007-08

50 Years

– –

Leased Plant and Equipment 6 to 20 Years 6 to 20 Years Leased Audiovisual 3 to 10 Years 3 to 10 Years Leased Computers and Communication Equipment 3 to 10 Years 3 to 10 Years Leased Furniture and Fittings 7 to 20 Years 7 to 20 Years Leased Medical Equipment 3 to 20 Years 3 to 20 Years Leased Scientific Equipment 7 to 10 Years 7 to 10 Years Buildings 50 Years 50 Years Leased Improvements 5 Years – Plant and Equipment 3 to 5 Years 3 to 5 Years Medical Equipment 7 to 10 Years 7 to 10 Years Computers and Communication 3 Years 3 Years Furniture and Fittings 13 Years 13 Years Motor Vehicles 10 Years 10 Years Intangible Assets 3 to 25 Years 3 Years As part of the Land and Building valuation conducted in June 2009 as required under FRD103D, the Leased Building values were componentised and each component assessed for its expected useful life which is represented above.

Net Gain/(Loss) on financial instruments includes realised and unrealised gains and losses from revaluations of financial instruments that are designated at fair value through profit or loss or held-for-trading, impairment and reversal of impairment for financial instruments at amortised cost, and disposals of financial assets. Revaluations of Financial Instruments at Fair Value The revaluation gain/ (loss) on financial instruments at fair value excludes dividends or interest earned on financial assets, which is reported as part of income from transactions. Impairment of Financial Assets Bad and doubtful debts are assessed on a regular basis. Those bad debts considered as written off are classified as an expense.

Financial assets have been assessed for impairment in accordance with Australian Accounting Standards. Where a financial asset's fair value at balance sheet date has reduced by 20 per cent or more than its cost price; or where its fair value has been less than its cost price for a period of 12 or more months, the financial instrument is treated as impaired. In order to determine an appropriate fair value as at 30 June 2009 for its portfolio of financial assets, the Royal Women's Hospital used the market value of individual units in the funds invested by Victorian Funds Management Corporation. The above valuation process was used to quantify the level of impairment on the portfolio of financial assets as at year end.

(p) Payables These amounts consist predominantly of liabilities for goods and services. Payables are initially recognised at fair value, then subsequently carried at amortised cost and represent liabilities for goods and services provided to the hospital prior to the end of the financial year that are unpaid, and arise when the hospital becomes obliged to make future payments in respect of the purchase of these goods and services. The normal credit terms are usually Nett 60 days.

Notes to and forming part of the financial statements for the year ended 30 June 2009 The Royal Women’s Hospital and its controlled entities

(q) Provisions

(v) Employee Benefits

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

Wages and Salaries, Annual Leave, Sick Leave and Accrued Days Off Liabilities for wages and salaries, including non-monetary benefits, annual leave, and accrued days off expected to be settled within 12 months of the reporting date are recognised in the provision for employee benefits in respect of employee’s services up to the reporting date, classified as current liabilities and measured at nominal values.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.

(r) Resources Provided and Received Free of Charge or for Nominal Consideration Resources provided or received free of charge or for nominal consideration are recognised at their fair value when the transferee obtains control over them, irrespective of whether restrictions or conditions are imposed over the use of the contributions, unless received from another entity or agency as a consequence of a restructuring of administrative arrangements. In the latter case, such transfer will be recognised at carrying value. Contributions in the form of services are only recognised when a fair value can be reliably determined and the services would have been purchased if not donated.

(s) Interest Bearing Liabilities Interest bearing liabilities in the Balance Sheet are recognised at fair value upon initial recognition. Subsequent to initial recognition, interest bearing liabilities are measured at amortised cost with any difference between the initial recognised amount and the redemption value being recognised in profit and loss over the period of the interest bearing liability using the effective interest rate method. Fair value is determined in the manner described in note 20.

(t) Functional and Presentation Currency The presentation currency of the Royal Women’s Hospital is the Australian dollar, which has also been identified as the functional currency of the entity.

(u) Goods and Services Tax Income, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense. Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the taxation authority is included with other receivables or payables in the Balance Sheet. Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flow. Commitments and contingent assets and liabilities are presented on a gross basis.

Those liabilities that are not expected to be settled within 12 months are recognised in the provision for employee benefits as current liabilities, measured at present value of the amounts expected to be paid when the liabilities are settled using the remuneration rate expected to apply at the time of settlement. Long Service Leave Current Liability – unconditional LSL (representing 10 or more years of continuous service) is disclosed as a current liability even where the Royal Women’s Hospital does not expect to settle the liability within 12 months because it will not have the unconditional right to defer the settlement of the entitlement should an employee take leave within 12 months.

The components of this current LSL liability are measured at:

>> present value – component that the Royal Women’s Hospital does not expect to settle within 12 months; and

>> nominal value – component that the Royal Women’s Hospital expects to settle within 12 months. Non-Current Liability – conditional LSL (representing less than 10 years of continuous service) is disclosed as a non-current liability. There is an unconditional right to defer the settlement of the entitlement until the employee has completed the requisite years of service. Conditional LSL is required to be measured at present value. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using interest rates of Commonwealth Government guaranteed securities in Australia. Superannuation Defined contribution plans Contributions to defined contribution superannuation plans are expensed when incurred.

Defined benefit plans The amount charged to the Operating Statement in respect of defined benefit superannuation plans represents the contributions made by the hospital to the superannuation plan in respect of the services of current staff. Superannuation contributions are made to the plans based on the relevant rules of each plan. Employees of the Royal Women’s Hospital are entitled to receive superannuation benefits and the Royal Women’s Hospital contributes to both the defined benefit and defined contribution plans. The defined benefit plan(s) provide benefits based on years of service and final average salary.

Notes to and forming part of the financial statements for the year ended 30 June 2009 The Royal Women’s Hospital and its controlled entities

The name and details of the major employee superannuation funds and contributions made by the Royal Women’s Hospital are as follows: Fund Contributions Paid or Payable for the year

(x) Leased Property and Equipment Leases of property, plant and equipment are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

2009

2008

Finance Leases

$‘000

Entity as lessor Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease.

Defined benefit plans:

Health Super Scheme

949

714

Defined contribution plans:

Health Super Scheme Hesta

6,912 1,689

6,998 1,368

Total

9,550

9,080

The Royal Women’s Hospital does not recognise any defined benefit liability in respect of the superannuation plans because the entity has no legal or constructive obligation to pay future benefits relating to its employees; its only obligation is to pay superannuation contributions as they fall due. The Department of Treasury and Finance administers and discloses the State’s defined benefit liabilities in its financial report. Termination Benefits Liabilities for termination benefits are recognised when a detailed plan for the termination has been developed and a valid expectation has been raised with those employees affected that the terminations will be carried out. The liabilities for termination benefits are recognised in other creditors unless the amount or timing of the payments is uncertain, in which case they are recognised as a provision. On-Costs Employee benefits on-costs (payroll tax, workers compensation, superannuation, annual leave and LSL accrued while on LSL taken in service) are recognised separately from provision for employee benefits.

(w) Finance Costs Finance costs are recognised as expenses in the period in which they are incurred.

Entity as lessee Finance leases are recognised as assets and liabilities at amounts equal to the fair value of the lease property or, if lower, the present value of the minimum lease payment, each determined at the inception of the lease. The lease asset is depreciated over the shorter of the estimated useful life of the asset or the term of the lease. Minimum lease payments are allocated between the principal component of the lease liability, and the interest expense calculated using the interest rate implicit in the lease, and charged directly to the Operating Statement.

Contingent rentals associated with finance leases are recognised as an expense in the period in which they are incurred. The State of Victoria is obliged to fund Monthly Service Payments due under the Project Agreement for the life of that Agreement, a period of up to 25 years. The Royal Women's Hospital has an agreement with the State that it will continue to operate and control the hospital at the expiry of the lease. On this basis the asset is being amortised over its estimated useful life of 52 years. Operating Leases Operating lease payments, including any contingent rentals, are recognised as an expense in the Operating Statement on a straight lined basis over the lease term, except where another systematic basis is more representative of the time pattern of the benefits derived from the use of the leased asset.

Finance costs include:

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

>> amortisation of discounts or premiums relating to borrowings;

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

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

Notes to and forming part of the financial statements for the year ended 30 June 2009 The Royal Women’s Hospital and its controlled entities

Lease Incentives All incentives for the agreement of a new or renewed operating lease shall be recognised as an integral part of the net consideration agreed for the use of the leased asset, irrespective of the incentive's nature or form or the timing of payments.

In the event that lease incentives are received to enter into operating leases, such expenses are recognised as a liability. The aggregate benefits of incentives are recognised as a reduction of rental expense on a straight lined basis, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. Leasehold Improvements The cost of leasehold improvements are capitalised as an asset and depreciated over the remaining term of the lease or the estimated useful life of the improvements, whichever is the shorter.

(y) Income Recognition Income is recognised in accordance with AASB 118 Revenue and is recognised as to the extent it is earned. Unearned income at reporting date is reported as income received in advance. Amounts disclosed as revenue are, where applicable, net of returns, allowances and duties and taxes. Government Grants Grants are recognised as income when the entity gains control of the underlying assets in accordance with AASB 1004 Contributions. For reciprocal grants, the Royal Women’s Hospital is deemed to have assumed control when the performance has occurred under the grant. For non-reciprocal grants, the Royal Women’s Hospital is deemed to have assumed control when the grant is received or receivable. Conditional grants may be reciprocal or non-reciprocal depending on the terms of the grant. Indirect Contributions

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

>> Long Service Leave (LSL) – Revenue is recognised upon finalisation of movements in LSL liability in line with the arrangements set out in the Metropolitan Health and Aged Care Services Division Hospital Circular 34/2008. Patient and Resident Fees Patient fees are recognised as revenue at the time invoices are raised. Private Practice Fees Private practice fees are recognised as revenue at the time invoices are raised. Donations and Other Bequests Donations and bequests are recognised as revenue when received. If donations are for a special purpose, they may be appropriated to a reserve, such as specific restricted purpose reserve.

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

(z) Fund Accounting The Royal Women’s Hospital operates on a fund accounting basis and maintains three funds: Operating, Specific Purpose and Capital Funds. The Royal Women’s Hospital's Capital and Specific Purpose Funds include unspent capital donations and receipts from fund-raising activities conducted solely in respect of these funds.

(aa) Services Supported by Hospitals Agreement and Services Supported by Hospital and Community Initiatives Activities classified as Services Supported by Hospitals Agreement (HSA) are substantially funded by the Department of Health. Funding is also received from other sources such as the Commonwealth, patients and residents. On the other hand, Services Supported by Hospital and Community Initiatives (Non HSA) are funded by the Hospital's own activities or local initiatives and/or the Commonwealth Government.

(ab) Change in Accounting Policies In accordance with Victorian Government Financial Reporting Direction 103D 'Non-Current Physical Assets', the Royal Women's Hospital measures plant and equipment, and medical equipment assets at fair value from 1 July 2008. Previously these assets were measured at cost. This change in accounting policy is required to ensure that Victoria's Whole of Government financial report, to which the Royal Women's Hospital is consolidated, complies with the requirements of AASB1049 Whole of Government and General Government Sector Financial Reporting. As this change is the initial application of a policy to revalue assets in accordance with AASB116 Property, Plant and Equipment the change is treated as a revaluation in the current year.

(ac) Comparative Information There have been no changes to previous year's figures other than detailed below: Revenue and Equity classification Subsequent to the Financial Systems Upgrade, a re-alignment of cost centres and account codes in line with the Department of Health Common Chart of Accounts was undertaken in 2007-08 and 2008-09. The restatement was required due to cost centres and account codes not appropriately aligning to the Department of Health classifications.

Notes to and forming part of the financial statements for the year ended 30 June 2009 The Royal Women’s Hospital and its controlled entities

The table below shows at a consolidated level, the restatement of revenue items where changes have been material.

The table below shows at a consolidated level, the restatement of Salary related creditors between Employee Benefits (note 15) and Payables (note 13).

previously restatement reported difference 2007/08

$‘000

Commonwealth Grant Patient Fees

1,023 4,165

– 2,751

1,023 (1,414)

Total

1,340 – 434 4,699

2,298 317 1,457 4,838

958 317 (1,023) 139

11,661

–

The table below shows at a consolidated level, the restatement of Revenue By Source (note 2a).

$‘000

Admitted Patients Outpatients EDS Ambulatory Mental Health Primary Health Other

107,108 23,983 2,618 509 287 1,822 27,298

104,891 24,270 3,023 – 287 2,477 28,677

2,217 (287) (405) 509 – (655) (1,379)

Total Revenue

163,625

–

$‘000

Trade Payables 7,146 5,223 Employee Benefits – Other – 1,923

(1,923)

7,146

1,923

7,146

–

The Consolidated Accumulated Surplus/(Deficit) and Restricted Specific Purpose Reserve have been restated by $100,000 to better reflect whether or not funds are restricted or non restricted. previously restatement reported difference 2007/08 $‘000

$‘000

Accumulated Surplus/(Deficit) – Transfers to Restricted Specific Purpose Reserves (1,739) (1,639) Restricted Specific Purpose Reserve – Transfers to Restricted Specific Purpose Reserves 1,739 1,639 Total

–

$‘000

100

(100)

–

(ad) Property, Plant and Equipment Revaluation Reserve The asset revaluation reserve is used to record increments and decrements on the revaluation of non-current assets.

The table below shows at a consolidated level, the restatement of Expenditure By Source (note 3a). previously restatement reported difference 2007/08

$‘000

previously restatement reported difference 2007/08

Total

Business Units and Specific Purpose Funds:

– Other Revenue – Diagnostic Imaging – Pharmacy Other Income

previously restatement reported difference 2007/08

$‘000

Admitted Patients Outpatients EDS Ambulatory Mental Health Primary Health Other

113,730 21,679 3,762 4,839 1,104 1,418 17,894

113,722 21,922 8,358 – 1,103 2,738 16,583

8 (243) (4,596) 4,839 1 (1,320) 1,311

Total Expenditure

164,426

–

(ae) Financial Asset Available-for-Sale Revaluation Reserve The available-for-sale revaluation reserve arises on the revaluation of available-for-sale financial assets. Where a revalued financial asset is sold, that portion of the reserve which relates to that financial asset, and is effectively realised, is recognised in the Operating Statement. Where a revalued financial asset is impaired that portion of the reserve which relates to that financial asset is recognised in the Operating Statement.

(af) General Reserves The General Reserves represent the non-restrictive specific purpose reserve of the Royal Women’s Hospital where the hospital has discretion to amend or vary the restrictions and or conditions of the funds.

(ag) Specific Restricted Purpose Reserve The Specific Restricted Purpose Reserve is established where the Royal Women’s Hospital has possession or title to the funds and has no discretion to amend or vary the restrictions or the conditions of the funds.

Notes to and forming part of the financial statements for the year ended 30 June 2009 The Royal Women’s Hospital and its controlled entities

(ah) Contributed Capital

(aj) Category Groups

Consistent with Australian Accounting Interpretation 1038 Contributions by Owners Made to Wholly-Owned Public Sector Entities and FRD 119 Contributions by Owners, appropriations for additions to the net asset base have been designated as contributed capital. Other transfers that are in the nature of contributions or distributions or that have been designated as contributed capital are also treated as contributed capital.

The Royal Women’s Hospital has used the following category groups for reporting purposes for the current and previous financial years.

(ai) Net Result Before Capital and Specific Items The subtotal entitled ‘Net result Before Capital & Specific Items’ is included in the Operating Statement to enhance the understanding of the financial performance of the Royal Women’s Hospital. This subtotal reports the result excluding items such as capital grants, assets received or provided free of charge, depreciation, and items of unusual nature and amount such as specific revenues and expenses. The exclusion of these items is made to enhance matching of income and expenses so as to facilitate the comparability and consistency of results between years and Victorian Public Health Services. The Net result Before Capital & Specific Items is used by the management of the Royal Women’s Hospital, the Department of Health and the Victorian Government to measure the ongoing result of Health Services in operating hospital services. Capital and specific items, which are excluded from this sub-total, comprise:

>> Capital purpose income, which comprises all tied grants, donations and bequests received for the purpose of acquiring non-current assets, such as capital works, plant and equipment or intangible assets. It also includes donations of plant and equipment (refer note 1 (r)). Consequently the recognition of revenue as capital purpose income is based on the intention of the provider of the revenue at the time the revenue is provided. Specific income/expense, comprise the following items, where material:

>> Non current asset revaluation increments/decrements. >> Impairment of financial and non financial assets, including impairment losses which have been recognised in accordance with note 1(o) and 1(n).

>> Depreciation and amortisation, as described in note 1 (m). >> Assets provided or received free of charge, as described in note 1(r).

>> Expenditure using capital purpose income, comprises expenditure which either falls below the asset capitalisation threshold (note 1(m)), or doesn’t meet asset recognition criteria and therefore does not result in the recognition of an asset in the Balance Sheet, where funding for that expenditure is from capital purpose income.

Admitted Patient Services (Admitted Patients) comprises all recurrent health revenue/expenditure on admitted patient services, where services are delivered in public hospitals, or free standing day hospital facilities, or alcohol and drug treatment units or hospitals specialising in dental services, hearing and ophthalmic aids. Mental Hospitals (Mental Health) comprises all recurrent health revenue/expenditure on specialised mental hospitals (child and adolescent, general and adult, community and forensic) managed or funded by the state or territory health administrations, and includes: Admitted patient services (including forensic mental health), outpatient services, emergency department services (where it is possible to separate emergency department mental hospitals), community-based services, residential and ambulatory services. Outpatient Services (Outpatients) comprises all recurrent health revenue/expenditure on public hospital type outpatient services, where services are delivered in public hospital outpatient clinics, or free standing day hospital facilities, or rehabilitation facilities, or alcohol and drug treatment units, or outpatient clinics specialising in ophthalmic aids or palliative care. Emergency Department Services (EDS) comprises all recurrent health revenue/expenditure on emergency department services that are available free of charge to public patients. Primary Health comprises revenue/expenditure for Community Hospitals including health promotion and counselling, physiotherapy, speech therapy, podiatry and occupational therapy. Other Services excluded from Australian Health Care Agreement (AHCA) (Other) comprises revenue/expenditure for services not separately classified above, including: Public hospitals including Laboratory testing, Sexually Transmitted Infections clinical services, Kooris liaison officers, immunisation and screening services, Drugs services including drug withdrawal, counselling and the needle and syringe program, Community Care programs including sexual assault support, early parenting services, parenting assessment and skills development, and various support services. Health and Community Initiatives also falls in this category group.

Notes to and forming part of the financial statements for the year ended 30 June 2009 The Royal Women’s Hospital and its controlled entities

(ak) New Accounting Standards and Interpretations Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2009 reporting period. As at 30 June 2009, the following standards and interpretations had been issued but were not mandatory for financial years.

Applicable for reporting periods Standard / beginning on or Impact on Entities Interpretation Summary ending on Annual Statements

AASB 8 Operating Segments.

Supersedes AASB 114 Segment Reporting.

Beginning 1 January 2009

Not applicable.

AASB 2007-3 Amendments to An accompanying amending standard, Australian Accounting Standards also introduced consequential amendments arising from AASB 8 [AASB 5, AASB into other Standards. 6, AASB 102, AASB 107, AASB 119, AASB 127, AASB 134, AASB 136, AASB 1023 and AASB 1038]

Beginning 1 January 2009

Impact expected to be not significant.

AASB 2007-6 Amendments to Australian Accounting Standards arising from AASB 123 [AASB 1, AASB 101, AASB 107, AASB 111, AASB 116 and AASB 138 and Interpretations 1 and 12]

An accompanying amending standard, also introduced consequential amendments into other Standards.

Beginning 1 January 2009

All Australian government jurisdictions are currently still actively pursuing an exemption for government from capitalising borrowing costs.

AASB 2008-3 Amendments to AAS arising from AASB 3 and AASB 127 [AASB 1, 2, 4, 5, 7, 101, 107, 112, 114, 116, 121, 128, 131, 132, 133, 134, 136, 137, 138 and 139 and Interpretation 9 and 107]

This Standard gives effect to consequential changes arising from revised AASB 3 and amended AASB 127. The Prefaces to those Standards summarise the main requirements of those Standards.

Beginning 1 January 2009

Impact expected to be insignificant.

AASB 2008-5 Amendments to AASs arising from the Annual Improvements Project [AASBs 5, 7, 101, 102, 107, 108, 110, 116, 118, 119, 120, 123, 127, 128, 129, 131, 132, 134, 136, 138, 140, 141, 1023 & 1308]

A suite of amendments to existing standards Beginning following issuance of IASB Standard Improvements 1 January 2009 to IFRSs in May 2008. Some amendments result in accounting changes for presentation, recognition and measurement purposes.

Impact is being evaluated.

AASB 2008-6 Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project [AASB 1 and AASB 5]

The amendments require all the assets and liabilities of a for-sale subsidiary’s to be classified as held for sale and clarify the disclosures required when the subsidiary is part of a disposal group that meets the definition of a discontinued operation.

Beginning 1 January 2009

Impact expected to be insignificant.

Beginning 1 January 2009

Impact expected to be insignificant.

AASB 2008-7 Amendments to AAS Changes mainly relate to treatment of dividends Cost of an Investment in a Subsidiary, from subsidiaries or controlled entities. Jointly Controlled Entity or Associate [AASB 1, AASB 118, AASB 121, AASB 127 and AASB 136] AASB 2008-8 Amendments to Australian Accounting Standards – Eligible Hedged Items [AASB 139]

The amendments to AASB 139 clarify how the Beginning principles that determine whether a hedged risk or 1 January 2009 portion of cash flows is eligible for designation as a hedged item, should be applied in particular situations.

Impact is being evaluated.

AASB 2008-9 Amendments to AASB Amendments to AASB 1049 for consistency 1049 for Consistency with AASB 101 with AASB 101 (September 2007) version.

Beginning 1 January 2009

Impact expected to be insignificant.

AASB 2009-1 Amendments to Australian Accounting Standards – Borrowing Costs of Not-for-Profit Public Sector Entities [AASB 1, AASB 111 and AASB 123]

Amendments to Australian Accounting Standards to allow borrowing costs of Not-for Profit Public Sector Entities to be expensed.

Beginning 1 January 2009

Impact expected to be insignificant.

AASB 2009-2 Amendments to Australian Accounting Standards – Improving Disclosures about Financial Instruments [AASB 4, AASB 7, AASB 1023 and AASB 1038]

Amendments to AASB 7 to enhance disclosures about fair value measurements and liquidity risk. Editorial amendments to AASB 4, AASB 1023 and AASB 1038 resulting from the amendments to AASB 7.

Beginning 1 January 2009

Impact expected to be insignificant.

Notes to and forming part of the financial statements for the year ended 30 June 2009 The Royal Women’s Hospital and its controlled entities

Note 2: Revenue parent

hsa hsa non hsa non hsa 2009 2008 2009 2008

$‘000

NOTE

$‘000

total Total 2009 2008 $‘000

$‘000

Revenue from Operating Activities

Government Grants – Department of Health 129,576 127,766 – – Commonwealth Government – Other 1,045 965 44 Total Government Grants 130,621 128,731 44 Indirect Contributions by Department of Health* – Insurance 4,062 4,087 – – Long Service Leave 1,338 (376) – Total Indirect Contributions by – Department of Health 5,400 3,711 Patient and Resident Fees – Patient and Resident Fees 2B 3,550 2,890 1,191 Total Patient and Resident Fees 3,550 2,890 1,191 Business Units and Specific Purpose Funds – Private Practice and Other Patient Activities Fees – – 1,781 – Diagnostic Imaging – – – – Pharmacy Services 240 207 229 – Cafeteria – 1,005 – – Car Park – – 4,032 – Property Income 223 266 1,903 – Research 148 250 825 – Other – – 1,673 Total Business Units and Specific Purpose Funds 611 1,728 10,443 Donations and Bequests 561 406 1,143 Recoupment from Private Practice for use of Hospital facilities 158 189 (158) Other Revenue from Operating Activities 7,509 4,701 – Sub-Total Revenue from Operating Activities 148,410 142,356 12,663

– 129,576 127,766 58 1,089 1,023 58 130,665 128,789 – –

4,062 1,338

4,087 (376)

–

5,400

3,711

1,275 1,275

4,741 4,741

4,165 4,165

1,684 1,781 1,684 – – – 227 469 434 – – 1,005 2,661 4,032 2,661 1,420 2,126 1,686 900 973 1,150 1,339 1,673 1,339 8,231 11,054 9,959 1,165 1,704 1,571 (192) – (3) – 7,509 4,701 10,537 161,073 152,893

Revenue from Non-Operating Activities

Interest and Dividends Sub-Total Revenue from Non-Operating Activities

562 562

530 530

– –

562 562

530 530

– 81 1,789 294 92 2,256

37,167 – 29 747 99 38,042

6,415 81 1,789 294 92 8,671

Revenue from Capital Purpose Income

State Government Capital Grants – Targeted Capital Works and Equipment 37,167 6,415 – Assets Received Free of Charge 2D – – – Net Gain/(Loss) on Disposal of Non-Financial Assets 2C – – 29 Donations and Bequests – – 747 Other Capital Purpose Income – – 99 Sub-Total Revenue from Capital Purpose Income 37,167 6,415 875 Total Revenue

2A 186,139 149,301

13,538

12,793 199,677 162,094

* Indirect contributions by the Department of Health: The Department of Health makes certain payments on behalf of the Royal Women's Hospital. These amounts have been brought to account in determining the operating result for the year by recording them as revenue and expenses.

Notes to and forming part of the financial statements for the year ended 30 June 2009 The Royal Women’s Hospital and its controlled entities

Note 2: Revenue continued CONSOLIDATED

hsa hsa non hsa non hsa 2009 2008 2009 2008

$‘000

NOTE

$‘000

total Total 2009 2008 $‘000

$‘000

Revenue from Operating Activities

Government Grants – Department of Health 129,576 127,766 – – Commonwealth Government – Other 1,045 965 44 Total Government Grants 130,621 128,731 44 Indirect Contributions by Department of Health* – Insurance 4,062 4,087 – – Long Service Leave 1,338 (376) – Total Indirect Contributions by Department of Health 5,400 3,711 – Patient and Resident Fees – Patient and Resident Fees 2B 3,550 2,890 1,191 Total Patient and Resident Fees 3,550 2,890 1,191 Business Units and Specific Purpose Funds – Private Practice and Other Patient Activities Fees – – 1,781 – Diagnostic Imaging – – – – Pharmacy Services 240 207 229 – Cafeteria – 1,005 – – Car Park – – 4,032 – Property Income 223 266 1,903 – Research 147 250 825 – Other – – 1,674 Total Business Units and Specific Purpose Funds 610 1,728 10,444 Donations and Bequests 561 406 2,250 Recoupment from Private Practice for use of Hospital facilities 158 189 (158) Other Revenue from Operating Activities 7,509 4,699 – Sub-Total Revenue from Operating Activities 148,409 142,354 13,771

– 129,576 127,766 58 1,089 1,023 58 130,665 128,789 – –

4,062 1,338

4,087 (376)

–

5,400

3,711

1,275 1,275

4,741 4,741

4,165 4,165

1,684 1,781 1,684 – – – 227 469 434 – – 1,005 2,661 4,032 2,661 1,420 2,126 1,686 900 972 1,150 1,340 1,674 1,340 8,232 11,054 9,960 2,623 2,811 3,029 (192) – (3) – 7,509 4,699 11,996 162,180 154,350

Revenue from Non-Operating Activities

Interest and Dividends Sub-Total Revenue from Non-Operating Activities

562 562

605 605

58 58

– –

620 620

605 605

– 81 1,789 294 91 2,255

37,167 – 29 69 99 37,364

6,415 81 1,789 294 91 8,670

Revenue from Capital Purpose Income

State Government Capital Grants – Targeted Capital Works and Equipment 37,167 6,415 – Assets Received Free of Charge 2D – – – Net Gain/(Loss) on Disposal of Non-Financial Assets 2C – – 29 Donations and Bequests – – 69 Other Capital Purpose Income – – 99 Sub-Total Revenue from Capital Purpose Income 37,167 6,415 197 Total Revenue

2A 186,138 149,374

14,026

14,251 200,164 163,625

Notes to and forming part of the financial statements for the year ended 30 June 2009 The Royal Women’s Hospital and its controlled entities

Note 2a: Analysis of Revenue by Source

(based on the consolidated view of note 2)

admitted Out- ambu- Mental Primary Patients patients eds latory Health Health Other Total

2009

$‘000

NOTE

Revenue from Services Supported by Health Services Agreement

Government Grants 99,235 25,191 2,787 503 300 1,875 730 130,621 Indirect contributions by Department of Health* 5,400 – – – – – – 5,400 Patient and Resident Fees 2B 2,968 561 – 21 – – – 3,550 Donations and Bequests (non capital) 553 2 – 6 – – – 561 Recoupment from Private Practice for Use of Hospital Facilities – – – – – – 158 158 Business Units and Specific Purpose Funds 35 26 – – – – 549 610 Other Revenue from Operating Activities 2,638 635 1 41 17 4 4,173 7,509 Interest and Dividends 562 – – – – – – 562 Capital Purpose Income 2 – – – – – – 37,167 37,167 Sub-Total Revenue from Services Supported by Health Services Agreement 111,391 26,415 2,788 571 317 1,879 42,777 186,138 Revenue from Services Supported by Hospital and Community Initiatives*

Donations and Bequests (non capital) – – Business Units and Specific Purpose Funds – – Government Grants – – Patient and Resident Fees 2B – – Interest and Dividends – – Recoupment from Private Practice for Use of Hospital Facilities – – Capital Purpose Income 2 – – Sub-Total Revenue from Services Supported by Hospital and Community Initiatives – – Total Revenue 111,391 26,415

–

2,250

– – – –

– 10,444 10,444 – 44 44 – 1,191 1,191 – 58 58

– –

– 2,788

– 571

– 317

(158) 197

2,250

(158) 197

– 14,026 14,026 1,879 56,803 200,164

* Indirect contributions by Department of Health: The Department of Health makes certain payments on behalf of the Royal Women’s Hospital. These amounts have been brought to account in determining the operating result for the year by recording them as revenue and expenses.

Notes to and forming part of the financial statements for the year ended 30 June 2009 The Royal Women’s Hospital and its controlled entities

Note 2a: Analysis of Revenue by Source continued

(based on the consolidated view of note 2)

admitted Out- ambu- Mental Primary Patients patients eds latory Health Health Other Total 2008 2008 2008 2008 2008 2008 2008 2008

NOTE

$‘000

Revenue from Services Supported by Health Services Agreement

Government Grants 98,959 23,910 2,617 481 287 1,801 676 128,731 Indirect contributions by Department of Health* 3,711 – – – – – – 3,711 Patient and Resident Fees 2B 2,591 8 – 13 – – 278 2,890 Donations and Bequests (non capital) 2 – – – – 3 401 406 Recoupment from Private Practice for Use of Hospital Facilities – – – – – – 189 189 Business Units and Specific Purpose Funds 1,083 – – – – 2 643 1,728 Other Revenue from Operating Activities 458 65 1 15 – 16 4,144 4,699 Interest and Dividends 304 – – – – – 301 605 Capital Purpose Income 2 – – – – – – 6,415 6,415 Sub-Total Revenue from Services Supported by Health Services Agreement 107,108 23,983 2,618 509 287 1,822 13,047 149,374 Revenue from Services Supported by Hospital and Community Initiatives*

Donations and Bequests (non capital) – – Business Units and Specific Purpose Funds – – Government Grants – – Interest and Dividends – – Recoupment from Private Practice for Use of Hospital Facilities – – Patient and Resident Fees 2B – – Other Revenue from Operating Activities – – Capital Purpose Income 2 – – Sub-Total Revenue from Services Supported by Hospital and Community Initiatives – – Total Revenue 107,108 23,983

–

2,623

– – –

8,232 58 –

– – – –

(192) 1,275 – 2,255

– 2,618

– 509

– 287

– 14,251 14,251 1,822 27,298 163,625

Notes to and forming part of the financial statements for the year ended 30 June 2009 The Royal Women’s Hospital and its controlled entities

Note 2b: Patient and Resident Fees

PARENT Entity CONSOLIDATED 2009 2008 2009 2008

$‘000

2,968 1,773 4,741

2,575 1,590 4,165

Patient and Resident Fees Raised Recurrent:

Acute – Inpatients 2,968 2,575 – Outpatients 1,773 1,590 Total Recurrent 4,741 4,165

Notes to and forming part of the financial statements for the year ended 30 June 2009 The Royal Women’s Hospital and its controlled entities

Note 2c: Net Gain/(Loss) on Disposal of Non-FINancial Assets

PARENT Entity CONSOLIDATED 2009 2008 2009 2008

$‘000

24 63 8 4 – – 99

– – 43 – 2,573 1,747 4,363

– 2 16 52 – – 70 29

– 1 61 – 765 1,747 2,574 1,789

Proceeds from Disposals of Non-financial Assets

Plant and Equipment Medical Equipment Motor Vehicles Computers and Communication Equipment Land Buildings Total Proceeds from Disposal of Non-Financial Assets

24 63 8 4 – – 99

– – 43 – 2,573 1,747 4,363

Less: Written Down Value of Non-Financial Assets Sold

Plant and Equipment Medical Equipment Motor Vehicles Computers and Communication Equipment Land Buildings Total Written Down Value of Non-Financial Assets Sold Net Gains/(Losses) on Disposal of Non-Financial Assets

– 2 16 52 – – 70 29

– 1 61 – 765 1,747 2,574 1,789

Note 2d: Assets Received Free of Charge or For Nominal Consideration

PARENT Entity CONSOLIDATED 2009 2008 2009 2008

$‘000

During the reporting period, the fair value of assets received free of charge, was as follows:

Motor Vehicles Total

– –

81 81

– –

81 81

Two motor vehicles were donated to/received by the Royal Women’s Hospital in the previous year.

Notes to and forming part of the financial statements for the year ended 30 June 2009 The Royal Women’s Hospital and its controlled entities

Note 3: Expenses parent NOTE

hsa hsa non hsa non hsa 2009 2008 2009 2008 $‘000 $‘000 $‘000 $‘000

total Total 2009 2008 $‘000 $‘000

Employee Benefits

Salaries and Wages 100,622 96,477 WorkCover Premium 677 765 Long Service Leave 3,820 1,497 Superannuation 8,839 9,302 Total Employee Benefits 113,958 108,041

4,478 43 184 253 4,958

3,725 105,100 100,202 37 720 802 15 4,004 1,512 234 9,092 9,536 4,011 118,916 112,052

Non Salary Labour costs

Agency Costs – Nursing Agency Costs – Other Total Non Salary Labour Costs

1,610 3,090 4,700

1,830 3,630 5,460

– 300 300

28 124 152

1,610 3,390 5,000

1,858 3,754 5,612

87 392 45 524

2,920 12,425 1,872 17,217

2,745 11,923 894 15,562

31 172 – 19 343 204 – 43 971 – – – 1,783

1,591 2,126 4,062 105 2,346 659 43 913 8,084 65 148 1,146 21,288

1,480 1,672 4,087 144 3,204 649 (16) 401 9,303 51 113 – 21,088

Supplies and Consumables

Drug Supplies Medical, Surgical Supplies and Prosthesis Food Supplies Total Supplies and Consumables

2,819 12,116 1,823 16,758

2,658 11,531 849 15,038

101 309 49 459

Other Expenses from Continuing Operations

Domestic Services and Supplies Fuel, Light, Power and Water Insurance costs funded by the Department of Health Motor Vehicle Expenses Repairs and Maintenance Patient Transport Bad and Doubtful Debts Lease Expenses Other Administrative Expenses Audit Fees – VAGO – Audit of Financial Statements – Other – Internal Audit Finance Costs Total Other Expenses from Continuing Operations

1,560 1,759 4,062 65 1,984 396 35 379 7,052 65 148 – 17,505

1,449 1,500 4,087 125 2,861 445 (16) 358 8,332 51 113 – 19,305

31 367 – 40 362 263 8 534 1,032 – – 1,146 3,783

Notes to and forming part of the financial statements for the year ended 30 June 2009 The Royal Women’s Hospital and its controlled entities

Note 3: Expenses continued parent (continued) NOTE

hsa hsa non hsa non hsa 2009 2008 2009 2008 $‘000 $‘000 $‘000 $‘000

total Total 2009 2008 $‘000 $‘000

Expenditure using Capital Purpose Income Employee Benefits

– Salaries and Wages – – 183 131 183 – WorkCover Premium – – 1 2 1 – Superannuation – – 7 12 7 – Long Service Leave – – – 6 – Total Employee Benefits – – 191 151 191 Other Expenses – Motor Vehicle Expenses – – 3 – 3 – Repairs and Equipment Purchases – – 3,435 – 3,435 – Administrative Expenses – – 804 (364) 804 – Other – – 10,813 1,008 10,813 Total Other Expenses – – 15,055 644 15,055 Total Expenditure using Capital Purpose Income – – 15,246 795 15,246

131 2 12 6 151 – – (364) 1,008 644 795

impairment of financial assets – Available-for-Sale Financial Assets – – 2,352 – 2,352 – Total Impairment of Financial Assets – – 2,352 – 2,352 – Depreciation and Amortisation – – 16,674 7,742 16,674 7,742 Specific Expense – – 2,561 – 2,561 – Finance Costs – – 21,314 993 21,314 993 Assets Provided Free-of Charge – – – – – – Total – – 42,901 8,735 42,901 8,735 Total Expenses 152,921 147,844 67,647 16,000 220,568 163,844

Notes to and forming part of the financial statements for the year ended 30 June 2009 The Royal Women’s Hospital and its controlled entities

Note 3: Expenses continued consolidated NOTE

hsa hsa non hsa non hsa 2009 2008 2009 2008 $‘000 $‘000 $‘000 $‘000

total Total 2009 2008 $‘000 $‘000

Employee Benefits

Salaries and Wages 100,622 96,477 WorkCover Premium 677 765 Long Service Leave 3,820 1,497 Superannuation 8,839 9,302 Total Employee Benefits 113,958 108,041

4,823 46 183 283 5,335

3,989 105,445 100,466 40 723 805 9 4,003 1,506 258 9,122 9,560 4,296 119,293 112,337

Non Salary Labour costs

Agency Costs – Nursing Agency Costs – Other Total Non Salary Labour Costs

1,610 3,090 4,700

1,830 3,630 5,460

– 310 310

41 146 187

1,610 3,400 5,010

1,871 3,776 5,647

87 392 72 551

2,920 12,425 1,880 17,225

2,745 11,923 921 15,589

31 172 – 19 347 204 – 43 1,198 4 – – 2,018

1,591 2,126 4,062 105 2,348 659 43 914 8,184 71 148 1,146 21,397

1,480 1,672 4,087 144 3,208 649 (16) 401 9,530 55 113 – 21,323

Supplies and Consumables

Drug Supplies Medical, Surgical Supplies and Prosthesis Food Supplies Total Supplies and Consumables

2,819 12,116 1,823 16,758

2,658 11,531 849 15,038

101 309 57 467

Other Expenses from Continuing Operations

Domestic Services and Supplies Fuel, Light, Power and Water Insurance costs funded by the Department of Health Motor Vehicle Expenses Repairs and Maintenance Patient Transport Bad and Doubtful Debts Lease Expenses Other Administrative Expenses Audit Fees – VAGO – Audit of Financial Statements – Other Finance Costs Total Other Expenses from Continuing Operations

1,560 1,759 4,062 65 1,984 396 35 379 7,052 65 148 – 17,505

1,449 1,500 4,087 125 2,861 445 (16) 358 8,332 51 113 – 19,305

31 367 – 40 364 263 8 535 1,132 6 – 1,146 3,892

Notes to and forming part of the financial statements for the year ended 30 June 2009 The Royal Women’s Hospital and its controlled entities

Note 3: Expenses continued consolidated (continued) NOTE

hsa hsa non hsa non hsa 2009 2008 2009 2008 $‘000 $‘000 $‘000 $‘000

total Total 2009 2008 $‘000 $‘000

Expenditure using Capital Purpose Income Employee Benefits

131 2 12 6 151 – – (364) 1,008 644 795

impairment of financial assets – Available-for-Sale Financial Assets – – 2,460 – 2,460 – Total Impairment of Financial Assets – – 2,460 – 2,460 – Depreciation and Amortisation – – 16,677 7,742 16,677 7,742 Specific Expense – – 2,561 – 2,561 – Finance Costs – – 21,314 993 21,314 993 Assets Provided Free-of Charge – – – – – – Total – – 43,012 8,735 43,012 8,735 Total Expenses 152,921 147,844 68,262 16,582 221,183 164,426

Notes to and forming part of the financial statements for the year ended 30 June 2009 The Royal Women’s Hospital and its controlled entities

Note 3a: Analysis of Expenses by Source

(based on the consolidated view)

admitted Out- ambu- Mental Primary Patients patients eds latory Health Health Other Total 2009 2009 2009 2009 2009 2009 2009 2009

NOTE

$‘000

Services Supported by Health Services Agreement

Employee Benefits Non Salary Labour Costs Supplies and Consumables Other Expenses from Continuing Operations Sub-Total Expenses from Services Supported by Health Services Agreement

89,452 12,637 4,003 3,077 717 173 8,259 8,253 127 16,209

4,633 307 105

873 425 –

1,193 – 7

1,167 113,958 1 4,700 7 16,758

701

290

101

84 17,505

116,997 22,308

4,393

5,335

1,328

1,301

1,259 152,921

Services Supported by Hospital and Community Initiatives

Employee Benefits Non Salary Labour Costs Supplies and Consumables Other Expenses from Continuing Operations Sub-Total Expense from Services Supported by Hospital and Community Initiatives

– – –

5,335 310 467

–

3,892

–

– 10,004 10,004

Employee Benefits – – Depreciation and Amortisation 4 – – Finance Costs 5 – – Impairment of Financial Assets 3 – – Specific Expenses 3C – – Other Expenses – – Sub-Total Expenses from Services Supported by Capital Resources – – Total Expenses 116,997 22,308

– – – – – –

– 191 191 – 16,677 16,677 – 21,314 21,314 – 2,460 2,460 – 2,561 2,561 – 15,055 15,055

– 4,393

– 5,335

– 1,328

– 58,258 58,258 1,301 69,521 221,183

Services Supported by capital sources

Notes to and forming part of the financial statements for the year ended 30 June 2009 The Royal Women’s Hospital and its controlled entities

Note 3a: Analysis of Expenses by Source continued

(based on the consolidated view)

admitted Out- ambu- Mental Primary Patients patients eds latory Health Health Other Total 2008 2008 2008 2008 2008 2008 2008 2008

NOTE

$‘000

Services Supported by Health Services Agreement

Employee Benefits Non Salary Labour Costs Supplies and Consumables Other Expenses from Continuing Operations Sub-Total Expenses from Services Supported by Health Services Agreement

85,238 11,893 3,495 3,954 873 81 6,692 8,117 102 17,846

4,217 233 106

736 316 –

1,243 3 16

1,219 108,041 – 5,460 5 15,038

796

283

156

88 19,305

113,730 21,679

3,762

4,839

1,104

1,418

1,312 147,844

Services Supported by Hospital and Community Initiatives

Employee Benefits Non Salary Labour Costs Supplies and Consumables Other Expenses from Continuing Operations Sub-Total Expense from Services Supported by Hospital and Community Initiatives

– – –

4,296 187 551

–

2,018

–

7,052

– – – –

7,742 151 993 644

– – 113,730 21,679

– 3,762

– 4,839

– 1,104

Services Supported by capital sources

Depreciation and Amortisation 4 Employee Benefits Finance Costs 5 Other Expenses Sub-Total Expenses from Services Supported by Capital Resources Total Expenses

– – – –

– 9,530 9,530 1,418 17,894 164,426

Note 3b: Analysis of Expenses by Internal and Restricted Specific Purpose Funds for Services Supported by Hospital and Community Initiatives

PARENT Entity CONSOLIDATED 2009 2008 2009 2008

$‘000

Private Practice and Other Patient Activities Laboratory Medicine Pharmacy Services Car Park Property Expenses

2,848 202 197 807 2,102

1,946 163 172 673 466

2,848 202 197 807 2,102

1,946 163 172 673 466

205 22 62 2,865 190 9,500

216 30 43 2,556 999 7,264

205 526 62 2,865 190 10,004

216 614 43 2,556 999 7,848

Other Activities

Education and Training Fundraising and Community Support Major Equipment Replacement Research and Scholarship Other Total

Notes to and forming part of the financial statements for the year ended 30 June 2009 The Royal Women’s Hospital and its controlled entities

Note 3c: specific expenses

PARENT Entity CONSOLIDATED 2009 2008 2009 2008

$‘000

Revaluation Decrement on Buildings Revaluation Decrement on Cultural Assets Total

2,234 327 2,561

– – –

2,234 327 2,561

– – –

Note 4: Depreciation and Amortisation

PARENT Entity CONSOLIDATED 2009 2008 2009 2008

$‘000

Depreciation

Buildings Building Leasehold Improvements Plant and Equipment Medical Equipment Computers and Communication Furniture and Equipment Motor Vehicles Leased – Building Leased – Building Leasehold Improvements Leased – Plant and Equipment Leased – Audiovisual Leased – Computer and Communication Equipment Leased – Furniture and Fittings Leased – Medical Leased – Scientific Total Depreciation

1,297 188 29 1,844 520 61 13 9,071 24 184 245 358 245 748 59 14,886

4,910 – 34 1,719 347 46 32 218 – 13 11 17 11 32 3 7,393

1,297 188 29 1,844 521 61 13 9,071 24 184 245 358 245 748 59 14,887

4,910 – 34 1,719 348 46 32 218 – 13 11 17 11 32 3 7,394

1,788 1,788 16,674

349 349 7,742

1,790 1,790 16,677

349 349 7,743

Amortisation

Intangible Assets Total Amortisation Total Depreciation and Amortisation

Notes to and forming part of the financial statements for the year ended 30 June 2009 The Royal Women’s Hospital and its controlled entities

Note 5: Finance Costs

PARENT Entity CONSOLIDATED 2009 2008 2009 2008

$‘000

Finance Charges on Finance Leases * Interest on Long Term Borrowings

21,314 1,146

993 –

21,314 1,146

993 –

Total

22,460

993

22,460

993

* Construction and fit out of the Royal Women's Hospital was funded as a Public Private Partnership under a Project Agreement between the State of Victoria and Royal Women's Health Partnerships Pty Ltd. This amount represents the interest payments made for the 2008/09 year (including any contingent rentals). The value of the contingent rental recognised as an expense in the operating statement for the period 2008/09 is $1.166 million (2007/08: nil). Refer to note 21, for the basis for calculation of contingent rentals.

Note 6: Cash and Cash Equivalents For the purposes of the Cash Flow Statement, cash assets includes cash on hand and at bank.

PARENT Entity CONSOLIDATED 2009 2008 2009 2008

$‘000

11 2,063 2,074

12 1,691 1,703

11 2,516 2,527

12 2,746 2,758

1,644 883 2,527

2,227 531 2,758

Cash on Hand Cash at Bank Total

Represented by:

Cash for Health Service Operations (as per Cash Flow Statement) Cash for Monies Held in Trust – Cash at Bank Total

1,191 883 2,074

1,172 531 1,703

Notes to and forming part of the financial statements for the year ended 30 June 2009 The Royal Women’s Hospital and its controlled entities

Note 7: Receivables

PARENT Entity CONSOLIDATED 2009 2008 2009 2008

$‘000

– 734 1,192 864 231 1,057

– 473 2,268 1,013 175 928

– 27 53 3,998

8 75 132 4,642

435 97 532 4,530

1,363 415 1,778 6,420

1,589 1,589 6,119

251 251 6,671

CURRENT Contractual

Controlled Entity Intercompany Inter Hospital Debtors Trade Debtors Patient Fees Accrued Investment Income Accrued Revenue – Other

154 734 1,192 864 222 1,054

358 473 2,140 1,013 175 796

LESS Allowance for Doubtful Debts

Inter Hospital Debtors Trade Debtors Patient Fees Total

– 27 53 4,140

8 75 132 4,740

statutory

Accrued Revenue – Department of Health GST Receivable Total Total Current Receivables

435 97 532 4,672

1,363 415 1,778 6,518

NON-CURRENT statutory 1,589 251 Department of Health – Long Service Leave

Total Non-Current Receivables Total Receivables

1,589 6,261

251 6,769

(a) Movement in the Allowance for doubtful debts

PARENT Entity CONSOLIDATED 2009 2008 2009 2008

$‘000

Balance at Beginning of Year Amounts Written off During the Year Increase/(Decrease) in Allowance Recognised in Profit or Loss Balance at End of Year

215 (178) 43 80

111 (43) 147 215

215 (178) 43 80

(b) Ageing analysis of receivables Please refer to note 20(c) for the ageing analysis of receivables. (c) Nature and extent of risk arising from receivables Please refer to note 20(c) for the nature and extent of credit risk arising from receivables.

$'000

111 (43) 147 215

Notes to and forming part of the financial statements for the year ended 30 June 2009 The Royal Women’s Hospital and its controlled entities

Note 8: Other Financial Assets

PARENT Entity CONSOLIDATED 2009 2008 2009 2008

$‘000

1,000 1,000

1,174 1,174

601 12,566 13,167 14,167

– 14,894 14,894 16,068

– 14,167 14,167

474 15,594 16,068

CURRENT Available-for-Sale Financial Assets

Investments – Managed Funds Total Current

1,000 1,000

1,174 1,174

NON-CURRENT Available-for-Sale Financial Assets

Shares Investments – Managed Funds Total Non-Current Total

– 12,150 12,150 13,150

– 14,439 14,439 15,613

Represented by:

Monies Held in Trust Hospital Investments Total

– 13,150 13,150

474 15,139 15,613

(a) Ageing analysis of other financial assets Please refer to note 20(c) for the ageing analysis of other financial assets. (b) Nature and extent of risk arising from other financial assets Please refer to note 20(c) for the nature and extent of credit risk arising from other financial assets.

Note 9: Inventories

PARENT Entity CONSOLIDATED 2009 2008 2009 2008

$‘000

Pharmaceuticals – At Cost commemorative books – At Cost

191 74 265

168 – 168

191 74 265

168 – 168

Total Inventories

Note 10: Other Assets

PARENT Entity CONSOLIDATED 2009 2008 2009 2008

$‘000

Prepayments Current

333 333

369 369

333 333

369 369

Prepayments Other – Deposits Non-Current Total

771 37 808 1,141

– – – 369

771 37 808 1,141

– – – 369

Notes to and forming part of the financial statements for the year ended 30 June 2009 The Royal Women’s Hospital and its controlled entities

Note 11: Property, Plant and Equipment

PARENT Entity CONSOLIDATED 2009 2008 2009 2008

$‘000

Land Land At Valuation

Crown (Carlton) Crown (Parkville) Freehold Total Land

48,668 – 29,393 78,061

18,225 27,500 19,968 65,693

48,668 – 29,393 78,061

18,225 27,500 19,968 65,693

27,719 – 27,719

53,057 (7,533) 45,524

27,719 – 27,719

53,057

Less Accumulated Depreciation

(7,533) 45,524

Leasehold improvements at cost Less Accumulated Depreciation

1,025 (188) 837

– – –

1,025 (188) 837

– – –

13 28,569

40 45,564

13 28,569

40 45,564

Buildings Buildings At FAIR VALUE

Building Work in Progress

Total Buildings

Plant And Equipment 3,601 3,647 Plant And Equipment at fair value*

Less Accumulated Depreciation Total Plant and Equipment Medical Equipment Medical Equipment at fair value*

Less Accumulated Depreciation Total Medical Equipment

(3,462) 139

(3,537) 110

3,601 (3,462) 139

3,647 (3,537) 110

23,806 (17,782) 6,024

23,484 (17,275) 6,209

23,806 (17,782) 6,024

23,484 (17,275) 6,209

Computers and Communication 5,638 5,625 Computers and Communication at fair value*

Less Accumulated Depreciation Total Computers and Communications Furniture and Fittings Furniture and Fittings at fair value*

Less Accumulated Depreciation Total Furniture and Fittings

(4,838) 800

(4,534) 1,091

5,661 (4,860) 801

5,625 (4,533) 1,092

966 (506) 460

1,260 (869) 391

982 (507) 475

1,260 (869) 391

116 (41) 75

195 (91) 104

Motor Vehicles 116 195 Motor Vehicles at fair value*

Less Accumulated Depreciation Total Motor Vehicles

(41) 75

(91) 104

Notes to and forming part of the financial statements for the year ended 30 June 2009 The Royal Women’s Hospital and its controlled entities

Note 11: Property, Plant and Equipment continued

PARENT Entity CONSOLIDATED 2009 2008 2009 2008

$‘000

Less Accumulated Depreciation

– – –

413 – 413

– – –

413 – 413

Cultural Assets At fair value Less Accumulated Depreciation Total Cultural Assets

140 – 140 140

– – – 413

140 – 140 140

– – – 413

Less Accumulated Depreciation

229,016 – 229,016

231,128 (218) 230,910

229,016 – 229,016

231,128 (218) 230,910

Leasehold Improvements at cost Less Accumulated Depreciation

556 (24) 532

263 – 263

556 (24) 532

263 – 263

PLant and equipment at fair value* Less Accumulated Depreciation

2,343 (271) 2,072

5,230 (13) 5,217

2,343 (271) 2,072

5,230 (13) 5,217

computers and communication equipment at fair value* Less Accumulated Depreciation

2,908 (358) 2,550

2,908 (17) 2,891

2,908 (358) 2,550

2,908 (17) 2,891

audiovisual equipment at fair value* Less Accumulated Depreciation

1,321 (245) 1,076

1,321 (11) 1,310

1,321 (245) 1,076

1,321 (11) 1,310

furniture and fittings at fair value* Less Accumulated Depreciation

2,805 (245) 2,560

2,805 (11) 2,794

2,805 (245) 2,560

2,805 (11) 2,794

medical equipment at fair value* Less Accumulated Depreciation

5,673 (748) 4,925

5,673 (32) 5,641

5,673 (748) 4,925

5,673 (32) 5,641

scientific equipment at fair value*

Less Accumulated Depreciation

483 (59) 424

483 (3) 480

483 (59) 424

483 (3) 480

Total Leased Assets Total

243,155 357,423

249,506 369,081

243,155 357,439

249,506 369,082

Cultural Assets Cultural Assets At Cost

Leased Assets Leased Buildings at valuation

* These assets were measured at cost in 2008 and measured at fair value in 2009.

Notes to and forming part of the financial statements for the year ended 30 June 2009 The Royal Women’s Hospital and its controlled entities

Note 11: Property, Plant and Equipment continued Consolidated

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

land Buildings Plant and medical computers & furniture Motor cultural Equipment Equipment Commnctns & fittings vehicles assets

Leased Total assets

$‘000

NOTE

$‘000

401 (1,747)

127 6,793 17 1,136 – (1)

488 952 –

228 209 –

89 479 (432)

194 – 91,048 219 249,811 280,724 – – (2,943)

2,211 (4,910) 45,564

– – – (34) (1,719) (348) 110 6,209 1,092

– (46) 391

– (32) 104

– – 7,648 – (305) (7,394) 413 249,506 369,083

consolidated Balance at 1 July 2007 33,520 49,609

Additions 27,500 Disposals (763) Revaluation increments / (decrements) 5,437 Depreciation and Amortisation 4 – Balance at 1 July 2008 65,694

Additions – 1,260 Disposals – – Revaluation increments / (decrements) 11,186 (15,590) Net Transfers between classes 1,181 (1,181) Depreciation and Amortisation 4 – (1,484) Balance at 30 June 2009 78,061 28,569

$‘000

58 1,689 – (30)

233 (2)

157 (12)

– (16)

64 292 3,753 (10) (3,131) (3,201)

– – – – (29) (1,844) 139 6,024

– – (522) 801

– – (61) 475

– – (13) 75

(327) 7,422 2,691 – – – – (10,934) (14,887) 140 243,155 357,439

Notes to and forming part of the financial statements for the year ended 30 June 2009 The Royal Womenâ&#x20AC;&#x2122;s Hospital and its controlled entities

Note 11: Property, Plant and Equipment continued

Land and Buildings Carried at Valuation In the year ended 30 June 2009 land and buildings of the Royal Women's Hospital were revalued by the Valuer General. The valuation was based on fair market value for continuing use. The remaining useful lives of all properties were reviewed. The revaluation at 30 June 2009 had the following effect on the financial statements for the year: (a) A revaluation increment of $11.1 Million was credited to the Asset Revaluation Reserve for Land.

(b) A revaluation decrement of $13.4 Million was credited to the Asset Revaluation Reserve for Buildings, and a further $2.2 Million decrement was booked against the Operating Statement. The properties at the Carlton site have been revalued on the basis that they will have a useful life of 50 years. No commitments have been entered into with respect to disposal of any of these properties. It is anticipated that properties selected for disposal will be sold as is and no restoration or demolition costs are contemplated. Leased Assets As part of the Land and Building valuation conducted in June 2009, the Leased Building values were componentised and each component assessed for its expected useful life (being between 23 to 52 years).

The revaluation at 30 June 2009 had the following effect on the financial statements for the year: (a) A revaluation increment of $7.4 Million was credited to the Asset Revaluation Reserve for Building Leasehold.

Notes to and forming part of the financial statements for the year ended 30 June 2009 The Royal Women’s Hospital and its controlled entities

Note 12: Intangible Assets

PARENT Entity CONSOLIDATED 2009 2008 2009 2008

$‘000

Software Less Accumulated Amortisation

2,737 (1,575) 1,162

1,801 (772) 1,029

2,766 (1,577) 1,189

1,802 (772) 1,030

revenue rights parkville car park Less Accumulated Amortisation Total Written Down Value

24,490 (980) 23,510 24,672

– – – 1,029

24,490 (980) 23,510 24,699

– – – 1,030

Reconciliation of the carrying amounts of intangible assets at the beginning and end of the previous and current financial year: revenue rights parkville software Car park TOTAL

NOTE

$‘000

Royal Women’s Hospital Balance at 1 July 2007 Additions Amortisation Balance at 30 June 2008

400 978 (349) 1,029

– – – –

400 978 (349) 1,029

Additions Amortisation 4 Balance at 30 June 2009

941 (808) 1,162

24,490 (980) 23,510

25,431 (1,788) 24,672

Additions Amortisation 4 Balance at 1 July 2008

400 979 (349) 1,030

– – – –

400 979 (349) 1,030

Additions Amortisation 4 Balance at 30 June 2009

969 (810) 1,189

24,490 (980) 23,510

25,459 (1790) 24,699

Consolidated Balance at 1 July 2007

Notes to and forming part of the financial statements for the year ended 30 June 2009 The Royal Women’s Hospital and its controlled entities

Note 13: Payables

PARENT Entity CONSOLIDATED 2009 2008 2009 2008

$‘000

7,984 3,912 15 836 12,747 12,747

7,145 2,941 70 – 10,156 10,156

7,984 3,912 15 836 12,747 12,747

7,146 2,942 70 – 10,158 10,158

Current

Contractual Trade Creditors Accrued Expenses Deposits Revenue in Advance Total Current Total (a) Maturity analysis of payables Please refer to note 20(d) for the ageing analysis of payables. (b) Nature and extent of risk arising from payables Please refer to note 20(d) for the nature and extent of risks arising from payables.

Note 14: Interest Bearing Liabilities

PARENT Entity CONSOLIDATED 2009 2008 2009 2008

note

$‘000

Current

Finance Lease Liability 21 Loan from TCV (Current) Total Borrowings Total Current

2,691 414 3,105 3,105

2,441 – 2,441 2,441

2,691 414 3,105 3,105

2,441 – 2,441 2,441

Non Current

Finance Lease Liability 21 Loan from TCV (Non Current) Total Borrowings Total Non-Current

244,308 23,783 268,091 268,091

246,999 – 246,999 246,999

244,308 23,783 268,091 268,091

246,999 – 246,999 246,999

Total Interest Bearing Liabilities

271,196

249,440

271,196

249,440

(a) Maturity analysis of interest bearing liabilities Please refer to note 20(d) for the ageing analysis of interest bearing liabilities. (b) Nature and extent of risk arising from interest bearing liabilities Please refer to note 20(d) for the nature and extent of risks arising from interest bearing liabilities.

Notes to and forming part of the financial statements for the year ended 30 June 2009 The Royal Women’s Hospital and its controlled entities

Note 15: employee benefits and related on-costs provision

PARENT Entity CONSOLIDATED 2009 2008 2009 2008

$‘000

Current provisions Employee Benefits – Unconditional and Expected to be Settled within 12 Months 9,233 9,334 9,243 10,598 11,034 10,598 – Unconditional and Expected to be Settled after 12 Months Provisions related to employee benefit on-costs Unconditional and Expected to be Settled within 12 Months (Nominal Value) 727 677 727 1,124 1,166 1,124 Unconditional and Expected to be Settled after 12 Months (Present Value)

Total Current Provisions

21,682

22,211

$‘000

9,342 11,034

21,692

677 1,166 22,219

4,673 571 5,244

3,312 400 3,712

NON-CURRENT provisions

Employee Benefits Provisions Related to Employee Benefit On-Costs Total Non-Current Provisions

4,672 571 5,243

3,312 400 3,712

CURRENT employee benefits

Unconditional Long Service Leave Entitlements Annual Leave Entitlements Accrued Wages and Salaries Accrued Days Off

9,258 7,975 2,310 288

9,335 7,939 2,820 274

9,258 7,983 2,312 288

9,335 7,944 2,823 274

NON-CURRENT employee benefits

Conditional Long Service Leave Entitlements (Present Value) Total Employee Benefits

4,672 24,503

3,312 23,680

4,673 24,514

3,312 23,688

Current On-Costs Non-Current On-Costs Total On-Costs Total Employee Benefits and Related On-Costs

1,851 571 2,422 26,925

1,843 400 2,243 25,923

1,851 571 2,422 26,936

1,843 400 2,243 25,931

14,046 4,007 (2,561) 15,492

14,391 1,504 (1,849) 14,046

Movement in Long Service Leave:

Balance at Beginning of Year Provision Made During the Year Settlement Made During the Year Balance at End of Year

14,046 4,007 (2,561) 15,492

14,386 1,508 (1,848) 14,046

Notes to and forming part of the financial statements for the year ended 30 June 2009 The Royal Women’s Hospital and its controlled entities

Note 16: Other Liabilities

PARENT Entity CONSOLIDATED 2009 2008 2009 2008

note

$‘000

883 883 883

1,005 1,005 1,005

– 883 883

474 531 1,005

CURRENT Monies Held in Trust

Other Monies Held in Trust* Total Current Total Other Liabilities

883 883 883

1,005 1,005 1,005

* Total Monies Held in Trust Represented by the following assets:

Other Financial Assets Cash and Cash Equivalents Total

8 6

– 883 883

474 531 1,005

Notes to and forming part of the financial statements for the year ended 30 June 2009 The Royal Women’s Hospital and its controlled entities

Note 17: Equity

PARENT Entity CONSOLIDATED 2009 2008 2009 2008

$‘000

(a) Reserves Property, Plant & Equipment Revaluation Reserve (1)

Balance at the Beginning of the Reporting Period 19,913 12,265 Revaluation Increment/(Decrements) – Land 11,187 5,437 – Buildings (13,356) 2,211 – Leased Building 7,422 – Balance at the End of the Reporting Period * 25,166 19,913

19,913

12,265

11,187 (13,356) 7,422 25,166

5,437 2,211 – 19,913

* Represented by: – Land 17,744 6,557 – Buildings – 13,356 – Leased Building 7,422 – 25,166 19,913

17,744 – 7,422 25,166

6,557 13,356 – 19,913

74 (1,645)

Financial Assets Available-for-Sale Revaluation Reserve (2)

Balance at the Beginning of the Reporting Period Valuation Gain/(Loss) Recognised Cumulative (Gain)/Loss transferred to Operating Statement on sale of financial assets Cumulative (Gain)/Loss transferred to Operating Statement on impairment of financial assets Balance at End of the Reporting Period

(811) (2,086)

74 (1,592)

(864) (2,111)

399

707

399

707

2,352 (146)

– (811)

2,461 (115)

– (864)

17,976 3,645 21,621

14,534 3,442 17,976

12,209 (1,620) 10,589 57,261

10,470 1,739 12,209 49,234

91,107 – 91,107

62,399 28,708 91,107

General Purpose Reserve

Balance at the Beginning of the Reporting Period Transfer from Accumulated Surpluses/(Deficits) Balance at the End of the Reporting Period

17,796 3,645 21,621

14,534 3,442 17,976

Restricted Specific Purpose Reserve

Balance at the Beginning of the Reporting Period Transfer from Accumulated Surpluses/(Deficits) Balance at the End of the Reporting Period Total Reserves

10,736 (608) 10,128 56,769

10,125 611 10,736 47,814

(b) Contributed Capital

Balance at the Beginning of the Reporting Period Capital Contribution Received from Victorian Government Balance at the End of the Reporting Period

91,107 – 91,107

62,399 28,708 91,107

Notes to and forming part of the financial statements for the year ended 30 June 2009 The Royal Women’s Hospital and its controlled entities

Note 17: Equity continued

PARENT Entity CONSOLIDATED 2009 2008 2009 2008

$‘000

Balance at the Beginning of the Reporting Period Net Result for the Year Transfers to General Purpose Reserve Transfers to Restricted Specific Purpose Reserve Balance at the End of the Reporting Period

(30,713) (20,891) (3,645) 608 (54,641)

(24,910) (1,750) (3,442) (611) (30,713)

(30,729) (21,019) (3,645) 1,620 (53,773)

(24,746) (802) (3,442) (1,739) (30,729)

(d) Total Equity at end of financial year

93,235

108,208

94,595

109,612

(1) The Property, Plant and Equipment Revaluation Reserve arises on the revaluation of Property, Plant & Equipment. (2) The financial assets available-for-sale revaluation reserve arises on the revaluation of available-for-sale financial assets. Where a revalued financial asset is sold, that portion of the reserve which relates to the financial asset, is effectively realised, and is recognised in the operating statement. Where a revalued financial asset is impaired that portion of the reserve which relates to that financial asset is recognised in the operating statement.

Notes to and forming part of the financial statements for the year ended 30 June 2009 The Royal Women’s Hospital and its controlled entities

Note 18: Reconciliation of Net Result for the Year to Net Cash Inflow/(Outflow) from Operating Activities

PARENT Entity CONSOLIDATED 2009 2008 2009 2008

$‘000

Net Result for the year

(20,891) 16,674 2,352 2,561 (2,767) (135) – – (97) – (29) 3,131 399 (796)

(1,750) 7,742 – – – 104 – – 79 (81) (1,789) – 707 (1,111)

(21,019) 16,677 2,460 2,561 (2,767) (135) (572) 4 (97) – (29) 3,131 399 (817)

(802) 7,743 – – – 104 – – 79 (81) (1,789) – 707 (1,122)

(2,501) (88) 1,892 407 – 3,611

688 (772) 1,755 1,006 362 2,835

(2,464) (88) 1,893 376 – 4,556

Depreciation and Amortisation Impairment of Financial Assets Non-Financial Asset Revalulation Net Movement in Finance Lease Provision for Doubtful Debts Bequest received in the form of Shares Management Fees for Managed Investments Change in Inventories Resources/Assets Provided Free of Charge Net (Gain)/Loss from Sale of Plant and Equipment Net (Gain)/Loss from Sale of Leased Plant and Equipment Net (Gain)/Loss from Sale of Investments Income from Managed Funds Reinvested

Change in Operating Assets and Liabilities

– (Increase)/Decrease in Receivables – (Increase)/Decrease in Prepayments – Increase/(Decrease) in Payables – Increase/(Decrease) in Employee Benefits – Increase/(Decrease) in Other Liabilities Net Cash Inflow/(Outflow) from Operating Activities

642 (772) 1,755 1,003 362 3,392

Note 19: Non-Cash Financing and Investing Activities

PARENT Entity CONSOLIDATED 2009 2008 2009 2008

$‘000

– –

249,548 249,548

– –

249,548 249,548

Acquisition of Building, Plant and Equipment by Means of Finance Leases – Parkville Facility Total

Notes to and forming part of the financial statements for the year ended 30 June 2009 The Royal Womenâ&#x20AC;&#x2122;s Hospital and its controlled entities

Note 20: Financial Instruments (a) Significant Accounting Policies Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, with respect to each class of financial asset, financial liability and equity instrument are disclosed in Note 1 to the financial statements.

(b) Categorisation of Financial Instruments Consol'd Consol'd Carrying Carrying Amount 2008 Amount 2009

$000

Cash and Cash Equivalents 2,527 Loans and Receivables 3,998 Available-for-Sale 14,167 Total Financial Assets (i) 20,692

2,758 6,256 16,068 25,082

Financial Assets

Financial Liabilities

At amortisated Cost 284,826 Total Financial Liabilities 284,826

260,603 260,603

(i) The carrying amount excludes statutory receivables (i.e. GST receivable).

Net Holding Gain/(Loss) on Financial Instruments by Category

Consol'd Consol'd Carrying Carrying Amount 2009 Amount 2008

$000

Financial Assets

Cash and Cash Equivalents (133) Available-for-sale at fair value through Operating Statement (1,982) Total Financial Assets (i) (2,115)

169 414 583

Financial Liabilities

At amortisated Cost 22,460 Total Financial Liabilities (ii) 22,460

993 993

(i) For cash and cash equivalents, loans or receivables and available-for-sale financial assets, the net gain or loss is calculated by taking the interest revenue, plus or minus foreign exchange gains or losses arising from revaluation of the financial assets, and minus any impairment recognised in the net result; (ii) For financial liabilities measure at amortised cost, the net gain or loss is calculated by taking the interest expense, plus or minus foreign exchange gains or losses arising from the revaluation of financial liabilities measured at amortised cost.

Notes to and forming part of the financial statements for the year ended 30 June 2009 The Royal Women’s Hospital and its controlled entities

Note 20: Financial Instruments continued

(c) Credit Risk Credit risk arises from the financial assets of the Royal Women's Hospital, which comprise cash and cash equivalents and trade and other receivables. The exposure to credit risk arises from the potential default of a counter party on their contractual obligations resulting in financial loss to the Hospital. The Royal Women's Hospital’s maximum exposure to credit risk at balance date in relation to each class of financial asset is the carrying amount of those assets as indicated in the Balance Sheet. The Hospital minimises concentrations of credit risk in relation to accounts receivable by undertaking transactions with a large number of customers. However, the majority of customers are concentrated in Australia. Credit risk in trade receivables is managed in the following ways:

>> for patient receivables validity checks are performed to verify patient prior to commencing treatment >> for certain patients deposits are required in advance of treatment >> for non-patient receivables other checks are performed prior to delivering services >> an aging analysis of all receivables is performed on a monthly basis and this is reviewed by management >> payment terms are 30 days for the Department of Health and large corporate clients, 7 days for all others >> debt collection policies and procedures, including use of debt collection agency after 90 days. The Royal Women's Hospital exposure to credit risk and effective weighted average interest rate by ageing periods is set out in the following table. For interest rates applicable to each class of asset refer to individual notes to the financial statements. Ageing analysis of financial asset as at 30 June

Not Past Past Due But Not Impaired consol'd Due and Less 3 Impaired carrying Not than 1 1–3 Months 1–5 over 5 Financial amount Impaired Month Months – 1 year years years Assets $‘000

$‘000

Cash and Cash Equivalents 2,527 Receivables – Trade Debtors 1,899 – Patient Fees 811 – Other Receivables 1,288 Available-for-Sale Financial Assets 14,167 Total Financial Assets 20,692

2,527

–

1,169 600 1,288 14,167 19,751

495 92 – – 587

235 84 – – 319

– 35 – – 35

– – – – –

2,758

–

1,356 229 2,717 16,068 23,128

1,063 317 – – 1,380

239 335 – – 574

– – – – –

2009 Financial Assets

2008 Financial Assets

Cash and Cash Equivalents 2,758 Receivables – Trade Debtors 2,658 – Patient Fees 881 – Other Receivables 2,717 Available-for-Sale Financial Assets 16,068 Total Financial Assets 25,082

Ageing analysis of financial assets excludes statutory receivables (i.e. GST input tax credit).

Notes to and forming part of the financial statements for the year ended 30 June 2009 The Royal Women’s Hospital and its controlled entities

Note 20: Financial Instruments continued

(d) Liquidity Risk Liquidity risk arises from the Royal Women’s Hospital being unable to meet financial obligations as they fall due. The Royal Women's Hospital manages its liquidity risk by: Cash flow Forecast A full year cash flow forecast is prepared and regularly adjusted to reflect actual and anticipated cash inflows and outflows. Cash Advances from the Department of Health Cash advances are sought from the Department of Health to assist with cash flow. Withdrawal of Investments Withdrawal of investments can be made on short notice to meet outflows that are outside the Department of Health funding or not part of the current years budget.

The following table discloses the contractual maturity analysis for the Royal Women's Hospital's financial liabilities. For interest rates applicable to each class of liability refer to individual notes to the financial statements. Maturity analysis of financial liabilities as at 30 June Maturity Dates consol'd carrying contructual Less than 1–3 3 Months 1–5 over 5 amount cash flows 1 Month Months – 1 year years years

$‘000

2009 Payables:

Trade Payables Other Payables Interest Bearing Liabilities Other Financial Liabilities Total Financial Liabilities

7,984 4,763 271,196 883 284,826

3,109 1,311 252 – 4,672

4,040 2,864 761 883 8,548

835 588 2,093 – 3,516

– – 15,804 – 15,084

– – 252,286 – 252,286

7,146 3,012 249,440 1,005 260,603

3,732 1,044 198 – 4,974

2,463 1,420 395 – 4,278

951 548 1,848 474 3,821

– – 16,534 – 16,534

– – 230,465 531 230,996

2008 Payables:

Trade Payables Other Payables Interest Bearing Liabilities Other Financial Liabilities Total Financial Liabilities

PPP Arrangement In relation to the PPP arrangement, although the hospital has assumed the finance assets and liabilities in its accounts, the payments to the private provider are being made by the Department of Health direct on a monthly basis, hence there is no cash flow impact on the Royal Women's Hospital. The Royal Women's Hospital will record the non-cash entries in its accounts in accordance with a financial model that has been developed by the Department of Health. Ageing analysis of financial liabilities excludes statutory financial liabilities (i.e. GST payable).

Notes to and forming part of the financial statements for the year ended 30 June 2009 The Royal Women’s Hospital and its controlled entities

Note 20: Financial Instruments continued

(e) Market Risk Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Since the Royal Women's Hospital does not have any significant transactions in foreign currencies, market risk for the Hospital comprises interest rate risk and price risk. While the Royal Women's Hospital holds units in funds which may themselves hold investments in foreign securities, the Royal Women's Hospital does not have any direct foreign current exposure to these securities. Interest Rate Risk The Hospital's exposure to interest rate risk and effected weighted average interest rate by maturity periods is set out in the above table in note 20(c) for credit risk and note 20(d) for liquidity risk. For interest rates applicable to each class of asset or liability refer to individual notes to the financial statements. Exposure arises predominantly from cash holdings at variable interest rates.

Interest Rate Risk is managed by the hospital maintaining minimum cash balances to meet working capital needs. Excess funds are invested in managed investment schemes where interest rate risk is managed as part of the portfolio investment risk. In addition interest bearing liabilities have fixed interest rates and therefore no interest rate risk. Other Price Risk (Investments) The following measures are in place at the Royal Women's Hospital to reduce the impact price risk on Investments.

Investment Committee Role The Investment Committee is a Board sub-Committee with delegated responsibility from the Board for overseeing the development, monitoring and review of the Royal Women's Hospital Investment strategy and policies. It has an agreed Terms of Reference which covers its objectives, membership, term of membership and meeting schedule and related information. The Committee meets on a quarterly basis (or more frequently if required). Investment Objectives The broad direction for the Royal Women’s Hospital’s investments established by the Committee and endorsed by the Board is to:

>> Structure investments to be in a position to meet the hospitals short term capital needs; >> Grow the investments over time to fund non-operational requirements (e.g. capital and research); >> Comply with relevant legislative requirements applicable to government agencies; and >> Invest in a prudent manner that diversifies the spread of risk whilst maximising the potential for capital appreciation and income. Role of Victorian Funds Management Corporation The role of Victorian Funds Management Corporation is to:

>> provide strategic investment advice to the Royal Women’s Hospital; and >> provide management and investment services to the hospital in accordance with: >> established investment objectives and guidelines; >> proper instructions given by the Royal Women’s Hospital; and >> relevant laws applicable from time to time. To mitigate operational risk, Victorian Funds Management Corporation is required to:

>> maintain proper internal control structures and compliance systems; >> ensure that there is a separation of powers, functions and responsibilities between the officers and staff of Victorian Funds Management Corporation; and

>> provide annual independent external audits of compliance with, and the effectiveness of, the structures and systems referred to above. Role of approved Fund Managers The Royal Women's Hospital does not interact direct with fund managers. Under the arrangements with Victorian Funds Management Corporation, that role is performed by Victorian Funds Management Corporation staff. Monthly Performance report (Performance v Benchmarks/investment objectives) Victorian Funds Management Corporation provides monthly and quarterly performance reports which measure performance against industry benchmarks and provide details such as:

>> Fund performance >> Asset allocation, with details of performance of each category >> Compliance. These reports are provided to the Royal Women's Hospital senior management and subsequently to members of the Investment Committee for review and comment.

Notes to and forming part of the financial statements for the year ended 30 June 2009 The Royal Women’s Hospital and its controlled entities

Note 20: Financial Instruments continued

In addition, to enable the Royal Women's Hospital to properly account for movements in investments, a monthly reconciliation report is provided which include details such as:

>> The book value of investments >> The market value of investments >> Realised gains/losses >> Unrealised gains/losses >> Income earned in the period. This provides regular (detailed) monitoring of performance of the funds invested. Interest rate exposure of financial assets and liabilities as at 30 June

Interest Rate Exposure

*Weighted Average Effective Interest Rates (%)

Consol’d Fixed Variable Non Carrying Interest Interest Interest Amount Rate Rate Bearing $‘000

$‘000

Cash and Cash Equivalents 6.60 2,527 – 1,644 Receivables – Trade Debtors 1,899 – – – Patient Fees 811 – – – Other Receivables 1,288 – – – Available-for-Sale Financial Assets 14,167 2,086 – Total Financial Assets 20,692 2,086 1,644

883

2009 Financial Assets

1,899 811 1,288 12,081 16,962

2009 Financial liabilities

Trade Payables Other Payables Interest Bearing Liabilities 8.24 Other Financial Liabilities Total Financial Liabilities

7,984 – 4,763 – 271,196 271,196 883 – 284,826 271,196

– – – – –

7,984 4,763 – 883 13,630

2008 Financial Assets

Cash and Cash Equivalents 5.48 Receivables – Trade Debtors – Patient Fees – Other Receivables – Available-for-Sale Financial Assets Total Financial Assets

2,758

–

2,227

531

2,658 881 2,717 16,068 25,082

– – – 2,331 2,331

– – – – 2,227

2,658 881 2,717 13,737 20,524

7,146 – 3,012 – 249,440 249,440 1,005 – 260,603 249,440

– – – – –

7,146 3,012 – 1,005 11,163

2008 Financial liabilities

Trade Payables Other Payables Interest Bearing Liabilities 9.79 Other Financial Liabilities Total Financial Liabilities *Weighted average effective interest rates for each class of assets.

The carrying amount excludes statutory financial assets and liabilities (i.e. GST input tax credit and GST payable).

Notes to and forming part of the financial statements for the year ended 30 June 2009 The Royal Women’s Hospital and its controlled entities

Note 20: Financial Instruments continued

Sensitivity Disclosure Analysis Taking into account past performance, future expectations, economic forecasts, and management's knowledge and experience of the financial markets, the Royal Women's Hospital believes the following movements are 'reasonably possible' over the next 12 months (Base rates for Interest Rate Risk are sourced from the Commonwealth Bank of Australia and base rates for Other Price Risk are sourced from the Reserve Bank of Australia).

>> A parallel shift of +1.25% and -1.25% in market interest rates (AUD); >> A parallel shift of +10% and -10% in managed investment fund prices. The following table discloses the impact on net operating result and equity for each category of financial instrument held by the Royal Women's Hospital at year end as presented to key management personnel, if changes in the relevant risk occur. Interest Rate Risk

O ther Price Risk

consol'd

Carrying -1.25% +1.25% -10% +10% Amount Profit Equity Profit Equity Profit Equity Profit Equity

$‘000

2009 Financial Assets 2,527 (32) (32) 32 32 – – – – Cash and Cash Equivalents (i) Other Financial Assets 14,167 – – – – (1,357) (60) – 1,417

consol'd Interest Rate Risk O ther Price Risk -0.5% +0.5% -10% +10% Carrying Amount Profit Equity Profit Equity Profit Equity Profit Equity $‘000

$‘000

2008 Financial Assets

Cash and Cash Equivalents (i) Other Financial Assets

2,758 16,068

(14) –

14 –

– – – (1,607)

– – – 1,607

(i) eg.: Sensitivity of cash and cash equivalents to a +1.25% movement in interest rates. Similar for a -1.25% movement in interest rate. Impact is calculated using the following formula: (Carrying value * Current Weighted Average Interest Rate plus 1.25%) – (Carrying value * Current Weighted Average Interest Rate) The carrying amount excludes statutory financial assets and liabilities (i.e. GST input tax credit and GST payable).

Notes to and forming part of the financial statements for the year ended 30 June 2009 The Royal Women’s Hospital and its controlled entities

Note 21: Commitments

PARENT Entity CONSOLIDATED 2009 2008 2009 2008

$‘000

13 427 1,113 1,553

– 1,178 – 1,178

13 – – 13

– – – –

427 – – 427

1,178 – – 1,178

1,113 – – 1,113

– – – –

411,381 27,466 438,847

422,458 27,478 449,936

12,024 49,208 350,149 411,381

11,078 48,957 362,423 422,458

66 2,408 24,992 27,466

13 1,872 25,593 27,478

Capital Expenditure Commitments

Land and Buildings Plant and Equipment Intangibles – Software Total

13 427 1,113 1,553

– 1,178 – 1,178

Land and buildings Payable:

Not later than one year Later than 1 year and not later than 5 years Later than 5 years Total

13 – – 13

– – – –

plant and equipment Payable:

Not later than one year Later than 1 year and not later than 5 years Later than 5 years Total

427 – – 427

1,178 – – 1,178

Intangibles – Software Payable:

Not later than one year Later than 1 year and not later than 5 years Later than 5 years Total

1,113 – – 1,113

– – – –

public private partnership Commitments (*)

Facilities Management Asset Replacement Total

411,381 27,466 438,847

422,458 27,478 449,936

facilities management (*) Payable:

Not later than one year Later than 1 year and not later than 5 years Later than 5 years Total

12,024 49,208 350,149 411,381

11,078 48,957 362,423 422,458

asset replacement (*) Payable:

Not later than one year Later than 1 year and not later than 5 years Later than 5 years Total

66 2,408 24,992 27,466

13 1,872 25,593 27,478

Notes to and forming part of the financial statements for the year ended 30 June 2009 The Royal Women’s Hospital and its controlled entities

Note 21: Commitments continued

PARENT Entity CONSOLIDATED 2009 2008 2009 2008

$‘000

Commitments in relation to leases contracted for at the reporting date: Operating Leases 5,252 375 5,252 Finance Leases (*) 246,999 249,440 246,999 Total Lease Commitments 252,251 249,815 252,251

375 249,440 249,815

lease commitments

Operating Leases

Payable as follows: Cancellable Not later than one year 1,250 190 Later than 1 year and not later than 5 years 4,002 185 Later than 5 years – – Total 5,252 375 Total Commitments for expenditure (inclusive of GST) Less GST recoverable from the Australian Tax Office Total Commitments for expenditure (exclusive of GST)

692,651 (6,186) 686,465

700,929 (1,412) 699,517

1,250 4,002 – 5,252

190 185 – 375

692,651 (6,186) 686,465

700,929 (1,412) 699,517

22,915 94,241 530,039 647,195 (400,196) 246,999

22,669 93,195 554,000 669,864 (420,424) 249,440

2,691 244,308 246,999

2,441 246,999 249,440

(*) All amounts shown are exempt from GST. Finance Leases

Commitments in relation to finance leases are payable as follows: Not later than one year 22,915 22,669 Later than 1 year and not later than 5 years 94,241 93,195 Later than 5 years 530,039 554,000 Minimum lease payments 647,195 669,864 Less future finance charges (400,196) (420,424) Total 246,999 249,440 Representing Lease Liabilities Current (note 14) 2,691 2,441 244,308 246,999 Non-current (note 14)

Total

246,999

249,440

The weighted average interest rate implicit in leases is 9.79%. The State of Victoria is obliged to fund Monthly Service Payments due under the Project Agreement for the life of that Agreement, a period of up to 25 years. The Royal Women's Hospital has an agreement with the State that it will continue to operate and control the hospital at the expiry of the lease. The building has been componentised into 4 major asset classes, of which their estimated useful lives are between 23 to 52 years.

Notes to and forming part of the financial statements for the year ended 30 June 2009 The Royal Women’s Hospital and its controlled entities

Note 21: Commitments continued

Basis for calculation of Contingent Rental on Finance Lease The contract with the Royal Women's Health Partnerships Pty Ltd provides for adjustments to the monthly finance lease payments. The adjustments are based upon the movement in the Australian Bureau of Statistics measurement of quarterly price changes. The ABS CPI data series Index Numbers; All groups; Australia – Ref A2325846C is used. The initial base quarter index is December 2004 (146.5). The schedule of future payments (unadjusted) are as at time of financial close (June 2005).

The finance lease schedule is broken into three components which reflect the consortium's financing arrangements. One component (fixed bond debt service) is not indexed by any means. The two other components (indexed annuity bonds and the consortium's own costs and provisions) are indexed by ABS data series as above. The value of the contingent rental recognised as an expense in the operating statement for the period 2008/09 is $1.166million (2007/08: nil).

PARENT Entity CONSOLIDATED 2009 2008 2009 2008

$‘000

1,882 7,503 6,783 16,168

1,882 7,529 8,639 18,050

1,540 6,160 5,518 13,218

1,540 6,160 7,058 14,758

26 78 – 104

26 104 – 130

Lease Receivable Commitments

Commitments in relation to leases receivable are as follows: Not later than one year 1,882 1,882 Later than 1 year and not later than 5 years 7,503 7,529 Later than 5 years 6,783 8,639 Total 16,168 18,050 Ramsey Health Rental Agreement

Not later than one year Later than 1 year and not later than 5 years Later than 5 years Total

1,540 6,160 5,518 13,218

1,540 6,160 7,058 14,758

Zouki Coffee Box Rental Agreement

Not later than one year Later than 1 year and not later than 5 years Later than 5 years Total

26 78 – 104

26 104 – 130

Melbourne Health – Retail Precinct Rental

Not later than one year Later than 1 year and not later than 5 years Later than 5 years Total

316 1,265 1,265 2,846

316 1,265 1,581 3,162

316 1,265 1,265 2,846

316 1,265 1,581 3,162

Total Receivable Commitments (inclusive of GST) Less GST payable to the Australian Tax Office Total Receivable Commitments (exclusive of GST)

16,168 1,470 14,698

18,050 1,641 16,409

16,168 1,470 14,698

18,050 1,641 16,409

Notes to and forming part of the financial statements for the year ended 30 June 2009 The Royal Women’s Hospital and its controlled entities

Note 22a: Responsible Persons Disclosures In accordance with the Ministerial Directions issued by the Minister for Finance under the Financial Management Act 1994, the following disclosures are made regarding responsible persons for the reporting period.

Total remuneration received or due and receivable by Responsible Persons from the reporting entity amounted to:

Responsible Ministers:

The Honourable Daniel Andrews, MLA, Minister for Health

period

1/07/2008 – 3/06/2009

Governing Boards

Dr Rhonda Galbally AO (Chair) Mr Stewart Leslie (Deputy Chair) Ms Elleni Bereded-Samuel Ms Aileen Berry Ms Maria Butera Ms Sharon Butler Dr George Morstyn Professor Robert Thomas OAM Ms Janet Whiting

1/07/2008 – 30/06/2009 1/07/2008 – 30/06/2009 1/07/2008 – 30/06/2009 1/07/2008 – 30/06/2009 1/07/2008 – 30/06/2009 1/07/2008 – 31/12/2008 1/07/2008 – 30/06/2009 1/07/2008 – 30/06/2009 1/07/2008 – 30/06/2009

Accountable Officers

Ms Dale Fisher (Chief Executive) 1/07/2008 – 30/06/2009

Remuneration of Responsible Persons The number of Responsible Persons are shown in their relevant income bands;

PARENT Entity CONSOLIDATED 2009 2008 2009 2008

Income Band

$0 – $9,999* $10,000 – $19,999 $20,000 – $29,999 $30,000 – $39,999 $40,000 – $49,999 $330,000 – $339,999 $340,000 – $349,1000 Total Numbers

No.

1 7 – – 1 – 1 10

– – 8 – 1 1 – 10

11 7 – – 1 – 1 20

10 – 8 – 1 1 – 20

* Consolidated position includes Directors of the Royal Women's Hospital Foundation (RWHF) who are not paid for their services.

PARENT Entity 2009 2008

CONSOLIDATED 2009 2008

$542,080 $547,248 $544,080 $547,248

Amounts relating to Responsible Ministers are reported in the financial statements of the Department of Premier and Cabinet.

Other Transactions of Responsible Persons and their Related Parties As Chair of the Royal Women's Hospital, Dr Rhonda Galbally is Chief Executive Officer for Our Community Pty Ltd. Our Community renders services to the Royal Women's Hospital. All dealings between Our Community and the Royal Women's Hospital are in the ordinary course of business and are on normal commercial terms and conditions. Total payments made to Our Community for 2009 were $349.99 (2008:$180.00). A Director of the Royal Women's Hospital, Ms Aileen Berry is Corporate Communication Manager for News Custom Publishing, a division of Herald and Weekly Times Pty Ltd (HWT). HWT renders services to the Royal Women's Hospital. All dealings between the Herald and Weekly Times and the Royal Women's Hospital are in the ordinary course of business and are on normal commercial terms and conditions. Total payments made to The Herald and Weekly Times for 2009 were $249.24 (2008:$423.68). A Director of the Royal Women's Hospital, Ms Janet Whiting is a partner of the Melbourne office of law firm Corrs Chambers Westgarth. This firms renders services to the Royal Women's Hospital. All dealings between Corrs Chambers Westgarth and The Royal Women's Hospital are in the ordinary course of business and are on normal commercial terms and conditions. There were no payments made to Corrs Chambers Westgarth during 2009 (2008:$827.42).

Notes to and forming part of the financial statements for the year ended 30 June 2009 The Royal Women’s Hospital and its controlled entities

Note 22a: Responsible Persons Disclosures continued

Controlled Entities Related Party Transactions The Royal Women’s Hospital Foundation The Chief Executive of the Royal Women’s Hospital, Ms Dale Fisher, is also a Director of the Royal Women’s Hospital Foundation.

Dr Rhonda Galbally (Chair) and Mr Stewart Leslie (Deputy Chair) are Directors of the Royal Women’s Hospital and the Royal Women’s Hospital Foundation. The transactions between the two entities relates to reimbursements made by the Royal Women's Hospital Foundation to the Royal Women's Hospital for goods and services and the transfer of funds by way of distributions made to the Hospital. All dealings are in the normal course of business and are on normal commercial terms and conditions. parent parent 2009 2008

Distribution of funds by the Royal Women’s Hospital Foundation 2,337,049

1,408,753

Reimbursements by the Royal Women’s Hospital Foundation for salary and non-salary costs.

153,932

357,929

Notes to and forming part of the financial statements for the year ended 30 June 2009 The Royal Women’s Hospital and its controlled entities

Note 22b: Executive Officer Disclosures Executive Officers’ Remuneration The numbers of executive officers, other than Ministers and Accountable Officers, and their total remuneration during the reporting period are shown in the first two columns in the table below in their relevant income bands. The base remuneration of executive officers is shown in the third and fourth columns. Base remuneration is exclusive of bonus payments, long-service leave payments, redundancy payments and retirement benefits. PARENT Entity

Total Remuneration

2009

2008

2009

No.

$70,000 – $79,999* $90,000 – $99,999* $100,000 – $109,999 $110,000 – $119,999 $120,000 – $129,999 $130,000 – $139,999 $140,000 – $149,999 $150,000 – $159,999 $160,000 – $169,999 $170,000 – $179,999 $180,000 – $189,999 $190,000 – $199,999 $200,000 – $209,999 $210,000 – $219,999 $220,000 – $229,999 $230,000 – $239,999 $240,000 – $249,999 $250,000 – $259,999 Total Total Remuneration

CONSOLIDATED

Base Remuneration Total Remuneration Base Remuneration

2008

2009

2008

– – – – 1 – 1 – – 1 – 1 – 1 – 1 – – – – – – – – – – – – – – – – 1 1 1 1 1 1 1 1 1 – 2 – 1 – 2 – 1 1 – 1 1 1 – 1 – – – – – – – – – – 2 – – – 2 – 2 – – 1 2 – – 1 1 1 2 – 1 1 2 – 1 – – – 1 – – – – – – – – – – – – – 1 – – – 1 – – – – 1 – – – 1 1 – – – 1 – – – – – – – – – – – – 1 – – – 1 – – 8 5 8 5 9 5 9 5 $1,372,023 $813,929 $1,289,478 $770,062 $1,447,423 $813,929 $1,364,878 $770,062

* Pro-rata payments made to Executive Officers.

Note 23: Events Occurring after the Balance Sheet Date There are no events occurring after Balance Sheet Date.

2009

No.

Notes to and forming part of the financial statements for the year ended 30 June 2009 The Royal Women’s Hospital and its controlled entities

Note 24: Controlled Entities Name of entity

Country of incorporation

Equity Holding

Australia Australia

n/a Limited by Guarantee

The Royal Women's Hospital Foundation Trust Fund The Royal Women's Hospital Foundation Limited CONTROLLED ENTITIES CONTRIBUTION TO THE CONSOLIDATED RESULTS NET RESULT FOR THE YEAR

2009

2008

$‘000

The Royal Women's Hospital Foundation Trust Fund The Royal Women's Hospital Foundation Limited

(129) –

948 –

Note 25: Contingent Assets and Contingent Liabilities

PARENT Entity CONSOLIDATED 2009 2008 2009 2008

$‘000

contingent liability

Recallable Capital Grant – Department of Health – Healthsmart Patient and Client Management System Recallable Capital Grant – Department of Health – for purchase of Units at 55 Flemington Road Recallable Capital Grant – Department of Health – Carlton Support Site Costs Contribution to Parkville facility Total Contingent Liabilities

554

831

554

831

680

–

680

–

1,000 61,400 63,634

– – 831

1,000 61,400 63,634

– – 831

Recallable Capital Grants The above contingent liabilities relate to Recallable Capital Grants provided by the Department of Health to the Royal Women's Hospital. Decisions about whether recallable capital grants are to be repaid are solely at the discretion of the Department of Health in consideration of the outcomes arising from the expenditure of the grants funds and other policy decisions. As such, the Royal Women's Hospital at this time, has no obligation to repay the recallable capital grants unless the Department of Health determines at some point in the future that a cash flow adjustment in respect of the recallable grant is warranted. Contribution to Parkville facility During the year ended 30 June 2008, the Royal Women's Hospital relocated to a new facility. Construction and fit out of the new Royal Women's Hospital was funded as a Public Private Partnership under a Project Agreement between the State of Victoria and Royal Women's Health Partnerships Pty Ltd. The Hospital has recognised the Leased Assets (note 11) and associated Interest Bearing Lease Liabilities (note 14). The State of Victoria has an expectation that the Royal Women's Hospital will contribute $61.4M (in cash or in kind) from the sale of properties at the Carlton site to the cost of constructing the Parkville facility. Settlement of the contingent liability is dependant upon the timing and manner of the disposal of certain properties at the Carlton Site.

There were no contingent assets for the Royal Women's Hospital or its Controlled Entities as at 30 June 2009 (2007/2008: Nil).

disclosure index The Annual Report of the Royal Women’s Hospital is prepared in accordance with all relevant Victorian legislation. This index has been prepared to facilitate identification of the Department's compliance with statutory disclosure requirements.

Legislation

Ministerial Directions

Report of Operations

Page

Charter and Purpose Manner of establishment and the relevant Ministers Objectives, functions, powers and duties Nature and range of services provided

> 9 > 9 > 9

FRD 22B

Management and structure Organisational structure

> 11

FRD 10 FRD 11 FRD 21A FRD 22B FRD 22B FRD 22B FRD 22B FRD 22B FRD 22B FRD 22B FRD 22B FRD 22B FRD 22B FRD 22B FRD 22B FRD 22B FRD 22B FRD 22B FRD 22B SD 4.2(j) SD 4.5.5

Financial and other information Disclosure Index Disclosure of ex-gratia payments Responsible person and executive officer disclosures Application and operation of Freedom of Information Act 1982 Application and operation of Whistleblowers Protection Act 2001 Compliance with building and maintenance provisions of Building Act 1993 Details of consultancies over $100,000 Details of consultancies under $100,000 Major changes or factors affecting performance Occupational health and safety Operational and budgetary objectives and performance against objectives Significant changes in financial position during the year Statement of availability of other information Statement of merit and equity Statement of National Competition Policy Subsequent Events Summary of the financial results for the year Workforce Data Disclosures Victorian Industry Participation Policy disclosures Report of Operations, Responsible Body Declaration Attestation on Compliance with Australia/New Zealand Risk Management Standard

> 77 > n/a > 20 > 14 > 14 > 14 > 15 > 15 > 2-6 > 13 > 2-6 > n/a > 16 > 12 > 15 > 75 > 16 > 11 > n/a > 1-6 > 20

FRD 22B FRD 22B FRD 22B

Financial Statements

SD 4.2 (a) SD 4.2 (b) SD 4.2 (b) SD 4.2 (b) SD 4.2 (b) SD 4.2 (c) SD 4.2 (c) SD 4.2 (d)

Financial statements required under Part 7 of the FMA Compliance with Australian accounting standards and other authoritative pronouncements Operating Statement Balance Sheet Statement of Changes in Equity Cash Flow Statement Accountable officer’s declaration Compliance with Ministerial Directives Rounding of amounts

Legislation Freedom of Information Act 1982 Whistleblowers Protection Act 2001 Victorian Industry Participation Policy Act 2003 Building Act 1993 Financial Management Act 1994

> 28 > 23 > 24 > 25 > 26 > 20 > 28 > 28 > 14 > 14 > n/a > 14 > 28

D08–131 design@thewomen’s October 2009

Requirement

Design: Suzi Donovan, Natasha Jerrard Photography: Gil Meydan Print: Impress Print Management