rt annual report 2006

R&T Health Fund | Annual Report 2006

health fund

“ From a health point of view, joining R&T Health Fund was the best decision I ever made.

I wouldn’t be without it, especially now.”

Arthur Mealey R&T member since 1956

R&T Health Fund was started in 1889 to help transport industry people, and it’s what we’re still doing today.

Just as we did almost 120 years ago, we understand the health and wellbeing issues that are especially relevant to transport industry employees and we are at the leading edge of developing products, benefits, services and initiatives that will ensure we continue to meet your needs for another 120 years and beyond.

Contents Chairperson’s Report 2 CEO’s Report 6 Highlights 10 The Board of Directors 14 Corporate Governance 16 50 Year Member Honour Role 20

Chairperson’s Report It is my pleasure to present R&T Health Fund’s annual report for the year ending 30 June 2006.

This has been a busy and challenging year for R&T, a year of change, vision and opportunity and it has been a privilege for me to serve as the fund’s chairperson throughout this time. I believe that the steps taken by your board and management over the past twelve months have given the fund a strong foundation for its future.

Following an Australia-wide search, in April 2006 the fund recruited Glenn Campbell to the position of Chief Executive Officer (CEO). Glenn brings to R&T a wealth of senior executive business experience and a background in the health industry.

Since his arrival Glenn has introduced substantial change to R&T’s business processes with the development of a strategic plan that directly addresses the challenges facing the organisation and the environment in which it operates.

Key to the fund’s achievements over the past six months has been a comprehensive review of its operations and member services. As a result, a number of initiatives have been implemented that will enable the fund to more efficiently serve members’ needs with an even greater focus on the quality of member interactions. These will ensure that the fund provides members with the type and level of service that they expect and that it does so with professionalism and efficiency. Part of this process has been the introduction of a new organisational structure and the launch of a new Member Care Team dedicated to providing the highest quality of service and support to our members. These, and other strategies will lead R&T into the future and assist the fund to remain competitive in an increasingly challenging market.

Following the intervention of industry regulator, the Private Health Insurance Administration Council (PHIAC), in late 2005 the fund commissioned an independent review of its board effectiveness to improve its governance practices. As a result of the recommendations arising from the review, the board has begun implementing a number of measures and procedures to strengthen its corporate governance and director effectiveness.

As part of our ongoing commitment to transparency and good corporate governance this annual report includes a number of statements on the robust governance structure and risk management framework that now prevails throughout R&T. Your board will continue to refine its practices in this area over the coming year.

I would like to thank my fellow directors for their support and contribution to the fund over the past year. Each director brings different skills, experience and perspectives to the boardroom, and each has worked diligently to implement the recommendations made following the review

by PHIAC and KPMG; they are to be congratulated for their efforts.

The management and staff of R&T remain its core and most valuable asset. The result of the year’s work, as set out in this report, is a testament to the energy and dedication that each person brings to his or her role within the organisation.

On behalf of the board, I congratulate CEO Glenn Campbell and his management team on their commitment and leadership throughout what has been a demanding and challenging year.

VICTORIA REYNOLDS

Chairperson

R&T’s

Private Hospital Table appears to pay the best hospital benefits of any health fund in Australia. Seldom, if ever does the hospital portion of a claim on R&T require the payment by the patient of anything extra.

benefits

SOURCE: Independent actuarial report, June 2006

“ R&T has been looking after our family since 1966, and it still is today. They’re always there for us, and they couldn’t make it simpler.”

Fiona and Philip with Jessica, Daniel, Matthew and Luke Worsley R&T members since 1986 Bruce and Cynthia Worsley R&T members since 1966

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So many passionate and dedicated people have contributed to building the fund over almost 120 years. The board, management and staff are simply the current custodians of the fund – it is our responsibility to ensure that we protect what has been created and add to it so that when it comes time to hand it to the next generation it is

strong

and relevant to the transport community.

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CEO’s Report Since accepting the position of CEO in April 2006, one of my key priorities has been to develop a strategic plan for the future of the fund. In doing this, my focus has been on gaining an understanding of the fund’s history, the members it serves and the industry it operates within.

What I have discovered is an organisation with a rich and inspiring history, a strong foothold in the present and a bright and confident future. Above all, what I have learnt is that this is your health fund, and its priority must be to continue to serve the needs of its members, as it has done since it began in 1889.

In this, my first annual report to you as CEO, I overview some of the key measures of the fund’s performance during the past twelve months, and where the focus of your board, management and staff will be in the coming years. I also want to share with you why these plans are important and to give you a sense of certainty about the direction and future of your health fund.

Achievements during the 2006 financial year The 2006 financial year saw some very strong results for R&T, which have turned around the financial performance of recent years. The fund’s 2006 profit was $2,718,000, representing an exceptional recovery from the 2005 financial year loss of $1,140,000. During the year the fund returned benefits to members of $23,976,000 in hospital claims and $7,689,000 in ancillary claims. Management expenses have been reduced to 10.4% of revenues (from 11.3% in 2005 and 12.9% in 2004), and are now approaching the industry average of 9.6%. Total member funds have increased to $28,852,000 from $25,746,000 in 2005, exceeding the solvency requirements set down by industry regulator PHIAC. Some of these funds are being reinvested into R&T’s operations to implement long-overdue improvements to systems and facilities. The underlying objective of all these improvements is to better meet members’ needs while improving efficiency, reducing management expenses and continuing to offer excellent value health cover with some of the highest benefits available in the industry. Key areas of investment this year have been: • Introduction of HICAPS claiming. This facility gives members the convenience of being able to claim most ancillary health services on-the-spot with healthcare practitioners using a special R&T membership card (read more about this on page 8).

• Replacement of the fund’s outdated operating system with Paragon 21. The implementation of the system in late 2006 will see improvements in the management of member information, increased efficiencies (which will enable staff to assess claims faster and more accurately), and better access to information for members. Part of this system upgrade includes making a range of services and information available to members via a new website (read more about new online member services on page 8).

• Implementation of modern accounting and payroll systems to enable the fund to improve the management of its expenses and liabilities, and operate more efficiently.

• Appointment of a full-time internal auditor to ensure that the fund has appropriate internal controls in place to prevent the likelihood of fraud or other inappropriate behaviours.

• Investment in sales and marketing capability. In recent years awareness of the fund among transport industry employees has decreased. This, coupled with the fact that R&T has the second highest member age profile in the industry, means that strategies to reinvigorate awareness and growth are essential to the fund’s future viability.

• Purchase of a commercial investment property adjacent to the fund’s head office in Burwood NSW, which is currently returning 5.85% p.a. and provides for potential expansion of the fund’s premises.

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The fund has also introduced a number of management initiatives which are fundamental to its ability to operate professionally and prudentially. These include: • Development of a three-year strategic plan and budget. This plan addresses objectives and budget requirements for all areas of the business’s operations. The underlying objective of the plan is to lay the foundations that will enable the fund to improve member services, grow its membership and introduce new member programs and benefits over time.

• Development of clear policies and establishment of properly defined roles and responsibilities between the board and management, which complements the work that the board has done to introduce excellent corporate governance practices over the past twelve months.

• A new organisational structure has been implemented which is enabling the fund to better serve the needs of members. The working environment has also been restructured according to occupational health and safety guidelines to ensure that we are providing staff with a safe environment.

• The fund is taking a stronger role in industry leadership through participation in key industry groups such as the Australian Health Services Alliance and the Health Insurance Restricted Membership Association of Australia. It has also been active in re-establishing ties with key transport industry organisations.

• Removal of ‘ex gratia’ payments and free cover for life members. These two practices were determined to be illegal under the National Health Act and the fund has ceased both as a result.

The future Since 1889, R&T has been helping people in the transport industry – it was with an amazing pioneering spirit, vision and commitment to helping each other that the fund was created, and I am committed to ensuring that those values are retained within the fund today. My role as CEO is to ensure that the fund’s future is sound, that it meets the needs of its current members, that it makes itself relevant to a new generation of members, and that it remains financially able to keep helping members for another 120 years and beyond.

There are many aspects of the fund’s operations that require modernisation in order for it to not only continue serving its members, but to ensure its future through growth. I would like to assure you that we are not interested in creating change simply for the sake of change, nor do we desire or intend to discard the past. The future direction that has been set for the fund is about introducing appropriate and intelligent change, about respecting and honouring what has been created and about protecting and enhancing the legacy that exists within this organisation.

R&T

pays the best hospital and ancillary benefits of any of its competitors and it also pays very reasonable medical gap benefits.

best

SOURCE: Independent actuarial report, June 2006

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CEO’s Report (continued) Our people – celebrating our members

As a not-for-profit health fund, members are at the centre of all our activities. Our membership is a long-standing and loyal one, which is increasingly desirable yet uncommon in today’s marketplace, but it also presents two primary challenges for the organisation. First, how do we continue to improve our products and services so that they meet the changing needs of members as they reach the age of retirement and beyond? Second, how to we continue to attract a new generation of members to ensure the continuity of the fund? Both of these requirements are equally important to the fund fulfilling its purpose of helping transport industry families.

To address these issues, a number of initiatives have been identified as part of the fund’s new three-year strategic plan. Over the coming months you will begin to see the introduction of: • HICAPS (Health Industry Claims and Payment Services) HICAPS is a facility that is offered by many ancillary healthcare practitioners whereby health fund members simply ‘swipe’ a plastic membership card through a special terminal (similar to a credit card or EFTPOS terminal) – and their claim is instantly processed. The benefit to members is that they then only pay the difference (if any) between the amount of their health fund benefit and the consultation fee, removing the need to pay the full fee up front and submit a claim to the fund. R&T will begin issuing new HICAPS cards to members early in 2007.

• Online Services While there won’t be any reduction in your ability to call the fund or drop into a branch to speak with our team, we will be launching a range of online services providing convenience for those members that choose to manage their health cover online. What will be most visible to members is a new website, rich with new functions and access to tools and information, including the ability to receive and file correspondence, change your personal or cover details and see what your remaining limits are for different benefit categories.

• Improved Communications We’ll be focusing on ensuring that we’re providing you with the information you need, when you need it. Behind the scenes our new operating system, Paragon 21, will greatly improve our processes and administration, giving our staff better access to information and vastly improving our efficiency and ability to provide you with even better service, whether in person, over the phone or online.

An important aspect of the way the fund communicates is how and what it presents to people who aren’t yet members. In order to compete with the bigger, more corporate funds and to communicate everything that is unique about R&T it is vital that we present the fund in a way that is appealing to potential new members. We have undertaken a project that has, in consultation with members, the industry, the staff and board, identified the aspects of the fund that are central to what makes R&T unique and we will be using these findings as the cornerstones of the project to review our member communications.

Your people – caring for the people that care for your needs

Our staff have always been central to caring for our members, and our commitment is to continue to provide genuine personal service, where you can call and speak to a real person, not a machine, or drop into a branch to speak with someone who will take as much time as you need. In order to continue providing this service, and to improve it, we are taking a number of steps to ensure that your team has access to all the information and resources they need to serve you better. We are investing in training and rewarding our people based on how well they serve you, our members.

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• Member Care We have implemented a new, dedicated Member Care Team to give you telephone access to a small group of people specifically trained to handle all aspects of your enquiries. Our goal is that the person who answers your call will be able to address your needs, without having to pass you on to others or requiring you to wait for a response.

Your community – the new R&T Families Foundation

Helping transport industry families has always been at the heart of what R&T exists to do.

Beyond providing health cover, the fund is offering a further level of assistance through its new Families Foundation. The Foundation is a registered charity that is run by staff on a volunteer basis to raise money to assist transport industry families in times of hardship and need. The Foundation is currently finalising its administration, operations and fundraising plan for the coming year.

Our fund’s future – new opportunities in the health industry

In 2007 a number of legislative changes will be introduced which will have a dramatic impact on the types of healthcare services that health funds can offer. We view these changes as being very positive and aligned with our goals as they are fundamentally about enabling funds to help members take better care of their health and wellbeing, rather than just helping them to cover the costs when they are unwell or injured. Among the coming changes are: • New provisions that will enable health funds to offer benefits for a broader range of preventative health treatments and services aimed at reducing the need for hospitalisation, which ultimately reduces the pressure on healthcare system costs and facilities.

• Health fund members who are subject to a Lifetime Health Cover Loading will have their loading removed after ten years’ continuous health fund membership under a program called the Lifetime Health Cover Loyalty Bonus.

R&T will be working to take a leadership role in the industry and to be at the forefront of these developments.

Thank you In many ways 2005/6 has been a challenging but positive year for the fund. Our new board of directors has worked tirelessly to introduce best practice governance to the organisation and to return the fund to usual operations. Our staff have experienced considerable challenges during this period and have enthusiastically continued to serve our members and embrace the many changes that have been introduced. I extend my most sincere thanks to the board and staff for their commitment to the fund and their extraordinary efforts over the past year. On behalf of R&T’s management and staff, I also thank you, our members, for your ongoing commitment to the fund – we look forward to continuing to be of service to you.

GLENN CAMPBELL CEO

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Caring For Our Members

Highest Hospital Benefits

R&T’s member retention of 89.6% is among the highest of all funds. We care about our members.

R&T pays the highest average hospital benefit in the industry.

Inexpensive Ancillary

R&T’s ancillary cover contributions are well below the industry average.

Great Ancillary Benefits

Excellent Customer Service

R&T’s ancillary benefits are well above the industry average.

R&T sets the benchmark with 100% of ancillary claims paid within five days.

MembershIp Growth

With 15,564 contributing members R&T ranks 24th out of Australia’s 38 registered private health funds.

highlights Top 10 Individual Hospital Claims 2005/6 No. Age

Medical Condition

1 2 3 4 5 6 7 8 9 10

Abdominal; intestinal removal and repair Cardiac Cancer; amputation of lower limbs MRSA; Soft tissue contamination; Staphylococcus Cardiac Cardiac Cardiac Total hip replacement Psychiatric Fracture of limb; rehabilitation

75 64 87 88 60 59 67 78 67 86

Benefit Paid ($)

105,315.34 90,590.00 85,499.68 82,933.11 80,974.90 78,635.00 77,698.13 73,540.27 70,018.00 66,525.00

R&T provides great peace of mind in a time of soaring medical costs.

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10

8

6

Strong Assets

The decline in members’ funds has been reversed.

Since 2002, hospital benefit payments have increased by 31%.

4

Strong HOSPITAL Benefits Profit Performance continue to grow The fund has

achieved one of its best ever profit performances.

AGE PROFILE (%)

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Ancillary Benefits Continue to Grow

Since 2002, ancillary benefit payments have increased by 39%.

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Ageing Membership

R&T is working to achieve a better balance of members in younger age groups for the ongoing health of the fund.

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R&T HEALTH FUND ALL FUNDS

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Top 10 Individual Ancillary Claims 2005/6 No.

Service

1 2 3 4 5 6 7 8 9 10

Major Dental; Chiro; Podiatry; Physio Major Dental; Orthopaedic Major Dental Major Dental; Chiro; Acupuncture Physio; Chiro; Pharmacy; Dental Dental (wisdom teeth); Dental splint Major Dental; Chiro Major Dental; Physio; Chiro; Pharmacy Major Dental; Chiro; Physio Major Dental; Physio; Chiro; Pharmacy

R&T’s ancillary cover provides great value to members even when you don’t need to go to hospital.

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Benefit Paid ($)

5,255.05 4,830.95 4,460.00 4,204.00 3,905.70 3,719.00 3,698.00 3,681.70 3,624.00 3,616.25

“ R&T has been in our family for three generations. The benefits are great and we like knowing that it’ll be there for everything we need throughout our lives.”

Megan and paul Manning R&T members since 2005

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As Australia’s first registered health fund, we have a role to play in contributing to, leading and influencing the industry – ensuring that we continue to deliver healthcare solutions for today and the future. We are addressing the needs of an ageing population and embracing the newest

thinking

in preventative healthcare for our members.

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The Board of Directors

Victoria Reynolds

Judith Blake

Chairperson

Deputy Chairperson

Victoria Reynolds has been in the rail industry for 22 years, and is currently General Manager Human Resources with Rail Infrastructure Corporation. Over the years she has been actively involved in community programs, working with disabled people and helping teenage mothers return to tertiary education. Victoria has been an R&T Health Fund member since 1997 and a member of the board since 2005.

Victoria’s objectives are to ensure that R&T continues to deliver the best outcomes for current and future members, while reducing management costs and improving services. Her goal is to lead the board in strengthening its corporate governance and building on the fund’s reputation and proud history to ensure that it is recognised as a leader among health funds.

Barry Dredge

Dennis Ellis

Judith Blake has been involved in the transport industry since 1991 and is currently a Passenger Information Officer with the NSW State Transit Authority, where she has been employed since 1994. Judith has been involved in community work for many years and is currently a volunteer with the Justice of the Peace Association. Judith has been an R&T Health Fund member since 1996 and a board member since 2005.

Barry Dredge began his career as a fitter and turner with Queensland Rail in 1964. He retired from his position as Maintenance Planner in Redbank in 2005.

Barry has had a keen involvement with transport industry organisations throughout his career, including the Australian Metal Workers Union at Redbank where he was the convenor for four years. Barry joined R&T Health Fund in 1992 and has been a member of the board since 2005.

Dennis Ellis has worked with Queensland Rail for 28 years, currently in the position of Pollution Operator.

Throughout his career Dennis has been active in the transport industry and is Senior Vice President of the RTBU. Dennis has been with R&T Health Fund since 1997 and a member of the board since 2005.

Judith’s vision for R&T is to see the fund further consolidate the many improvements that have been introduced to its governance and operations, and to see it grow to become the number one fund serving the needs of all transport employees.

Barry’s goal is to ensure that R&T continues to deliver good value to members through great products and generous rebates – while remaining price competitive.

Dennis is committed to ensuring that the board continues to operate under its new best practice standards of governance and provides support to the CEO, management and staff in helping the fund to achieve its strategic plan goals.

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Bob Glover

Robert Ledger

Michael Prior

Jeff Walton

Bob Glover joined the NSW Government Railways in 1971 as a fitter and turner at Wagon Centre, Clyde. Over the next 29 years he worked in the Chullora and Eveleigh workshops before retiring in 2000 having achieved the position of Production Manager.

Over the years Bob has been active in local junior sports, including coaching junior cricket and soccer. Bob has been a member of R&T Health Fund since 1976 (including ten years as a workshop representative for the fund) and has been a member of the board since 2004.

With over 40 years’ experience in engineering, Robert Ledger began his career as an electrical apprentice with the NSW Government Railways in 1965.

When he retired in 2006, Robert was Fleet Engineer in the Passenger Fleet Maintenance Section of the organisation, which by then had become State Rail.

Robert has been a member of R&T Health Fund since 1965 and a member of the board since 2005.

Michael Prior is a self-employed risk management consultant, appointed to the board as an independent director in 2006.

He has a wealth of risk management experience in the financial services sector, having been General Manager Operational Risk and Compliance with the Commonwealth Bank, an international consultant contracted to Accenture Singapore, and a senior finance executive with Westpac.

For the past 13 years Jeff Walton has been the Operations Manager of R&T Health Fund and is currently also Deputy CEO. Prior to joining R&T Jeff spent 24 years with the State Rail Authority working in personnel management, audit and industrial relations. Jeff has had a long involvement as the president of the local junior cricket club and continues to play cricket himself.

Jeff has been an R&T Health Fund member since 1968 and was appointed a casual director of the board in November 2005.

Bob’s objective is to see R&T develop innovative and valuable benefits that not only help members to stay well but reward them for their years of support for the fund.

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Robert’s vision for R&T is to see it expand to become the premier transport industry health fund serving the needs of all transport industry employees, all around Australia.

Michael’s objectives are to ensure that the fund’s standards of corporate governance are maintained, that its business risks are managed effectively and that it realises the maximum return on its investments.

Jeff’s goal is to see R&T continue to do what it does best, deliver great value health cover at excellent contribution rates to members, while ensuring that the future of the fund remains viable through membership retention and growth.

Corporate Governance The board of R&T is committed to ensuring that all of its policies, practices and procedures reflect good governance. The directors recognise that adherence to the fund’s governance framework is fundamental in demonstrating that they are accountable to its members and stakeholders, and that they are appropriately overseeing the future direction of the fund and managing its business risks.

Role of the board The board is responsible for the overall corporate governance of the fund including determining its strategic direction and financial wellbeing, and guiding and monitoring the business and affairs of R&T on behalf of the members by whom it is elected, and to whom it is accountable.

In summary, the board’s accountabilities and responsibilities include: • contributing to the development of and approving strategy, and monitoring the implementation of that strategy; • monitoring the financial state and performance of the fund; • approving the fund’s financial reporting, including annual reports; • delegating clear responsibility and authority to the committees of the board and the CEO, and monitoring and regularly reviewing the performance of those who hold delegated powers; • ensuring that R&T has effective processes and systems in place to enable the board to monitor its performance and capabilities; • promoting and maintaining organisational values and a culture where transparent and timely information is shared between management and the board; • overseeing R&T’s corporate governance framework and ensuring effective communication with members and stakeholders; • setting the overall direction, financial objectives and operational goals for the fund; • reviewing and approving the annual budget and business plan; • ensuring effective systems of internal control and internal audit; • identifying and mitigating any risks that may harm the fund; • reviewing the performance of the CEO. The board delegates responsibility for the day-to-day management of the fund to the CEO and senior managers, but remains responsible for overseeing the performance of the management team. To ensure that responsibility is clearly defined, the board has delegated a range of authorities to management through formal delegations. These include limited expenditure authority, and the authority to enter into certain contracts and to engage staff.

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Board performance A performance evaluation process has been established for the board, individual directors and key executives. A comprehensive board performance appraisal conducted by an independent external consultant was completed after the end of the reporting period. This focused on board and individual director effectiveness and is the first such review of the board in R&T’s history.

Conflicts of interest Directors are required to disclose, on an ongoing basis, any interest that could potentially conflict with those of R&T or its members. In accordance with the Corporations Act 2001, your board ensures that any director with a material personal interest in a matter being considered by the board must not be present when the matter is under discussion and may not vote on the matter.

Board committees In line with best practice corporate governance, the board has established standing committees as an efficient mechanism for considering detailed issues and making recommendations for consideration by the entire board. These committees adopt charters setting out the matters relevant to the composition, responsibilities and administration of each committee. Current committees of the board are: audit and Risk

• Provides a forum for regular communication between the board and R&T’s external and internal auditors.

• Focuses on key issues such as financial controls and systems, risk identification and management, and R&T’s annual financial statements.

Risk identification, measurement and mitigation strategies are key elements of all proposals considered by the board.

Remuneration and nomination

• Assists the board to achieve its objectives of ensuring that R&T has a board of effective composition, size and commitment to adequately discharge its responsibilities and duties.

• Establishes policies and procedures for the annual performance evaluation of the board, each director and management, and recommends performance and salary reviews for the CEO. • Reviews and discusses with the board and senior management plans for professional development and succession, and annual education programs for board members.

R&T

provides relatively better benefits for all of the major categories of ancillary services than each of the major funds and provides better benefits overall.

SOURCE: Independent actuarial report, June 2006

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better

“ My R&T cover gives me the security of knowing that I can make choices about when and where I’m treated if I ever do have to go into hospital.”

Sara Angeloni R&T member since 2005

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We never lose sight of why we’re here – to help our members.

We recognise that the world is constantly changing and that we need to make intelligent changes in order to continue to meet members’

needs,

to operate in an increasingly regulated environment, to serve the long-standing members that have invested so much of their lives in the fund and to remain relevant to a new generation.

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50 Year Member Honour Role We gratefully acknowledge and celebrate the contribution our long-standing members have made to R&T Health Fund, and the role that each and every one has played in helping this organisation to grow and continue far beyond what its forefathers surely could have ever imagined. We value all of our members, and in particular, we honour those members who in 2005 and 2006 celebrate an extraordinary 50 years of membership.

Adrienne Smith Alan Crook Alan Scott Albert Fry Albert Kemp Albert Leverton Alfred Mounsey Allan Byron Allan Graham Allan Whitby Allen Fish Allen Harbidge Allen Risby Annie McNamara Arnold Grima Arthur Hilder Arthur Jackson Arthur Mealey Arthur Steadman Barbara Painter Barry Field Barry McDonald Barry Walsh Basil Nolan Bernard McCudden Bernard McGrath Bessie Birkett Boris Daszkiewicz Brian Calvert Brian Channells Brian Hayne Brian Wade Brian Wood Bruce Murphy Bruce Robinson Caterina Sgro Cecil Nicholl Charles Becker Christianus Muschter Claire Brown Clare Brown Clifford Crowe Clifford Simmons Clive Chesham Colin Bright Colin Fogarty Colin Holmes Coral Nash Daphne Cummings Darryl Dunne Dennis Coleman Derrel Goldspink Donald Britnell Donald Burns Donald Chapman Donald Nash Donald Simpson

Donald Stewart Donald Waugh Doris Healey Dorothy Hollis Dorothy Lawrence Dorothy Sward Douglas Barry Dragutin Eiberger Edward Crick Edward Purssell Edward Stanton Eileen Feeney Elaine Rich Elwyn Humbley Endel Busch Eric Sills Ernest Smith Errol Cutting Evelyn Morris Ferenc Kovacs Francis Cowan Francis Hallinan Francis Hurst Frank Batten Frederick Chew Frederick Dihm Garry Harnish Geoffrey Kelly Geoffrey Treacy George Archibald George Burrows George Stockton Gerard Byrne Gertrude MacKenzie Giovanni Scopelliti Giuseppe Vartuli Gordon Harper Grahame Brindell Gregory McAleer Gunter Herms Hazel De Audney Henry Barr Henry Rosser Herbert Johnson Herbert Roberts Huburt Freeman Hughie Robertson Ian Griffith Irene Price Ivan Gale Ivan Hardwick Jack McDonald James Amos James Ivins James Quigley Janice Weldon Jeanette Kelkert Jeffrey Manser

Joan Dunn Joan Elkins Joan Fisher John Adams John Alford John Barnett John Bennett John Brogan John Brown John Chisholm John Crowe John Gardner John Halliday John Moffitt John Saville John Short John Squire John Sullivan John Waterhouse Joseph Jurans Judith Bowden Judith Wilson Judith Johnston Judith Spillard June Peacock June Reed Kathleen Bush Keith Doggett Keith Hardingham Keith Hargraves Keith Jones Keith Walker Keith Whinfield Kenneth Becker Kenneth Doyle Kenneth Frost Kenneth Roe Kerry Bourke Kevin Black Kevin Caffrey Kevin Kelly Kevin Penfold Lammert Devries Laurel Balcombe Laurence Parker Leigh Coskerie Leo Keough Leonard Wicks Leslie Cook Leslie McDonald Leslie Mitchell Leslie Nichelsen Lina Duncan Lois Yager Lorenzina Favotto Lorraine Stanley

Louise Rowston Malcolm Asplund Margaret Ashford Margaret Ryan Margaret Smith Marie Jagers Marie Lyndon Marilyn Sonter Marjorie Brown Marjorie Maloney Martin Callaghan Mary Forrester Maureen Kerwick Maxwell French Maxwell Hannon Maxwell McVean Mervyn Thomas Michael Duffy Michael Farrell Mona Chate Neta Aurisch Neville Fletcher Nicola Spinelli Nina Johnson Noel Adams Noel Ball Noel Johnstone Norma McTaggart Norma Hooper Norman Buckley Norris Morphett Pamela Browne Pamela McCormack Pamela Radley Patricia Brown Patricia Egan Patricia Miller Patricia Rowe Patrick Doughty Paul Brown Pauline Boss Peggy Adams Peter Holmes Peter Sawtell Rae Madden Ralph Matthews Raymond Platt Raymond Ramsay Raymond Swanson Richard Butcher Richard Stephenson Richard Stubis Rita Young Robert Bell Robert Byatt Robert Davey Robert Dicks

Robert Kelly Robert Lancaster Robert McDonald Robert Ryan Robert Sharp Robert Woolston Ronald Absolom Ronald Dempsey Ronald Dennis Ronald Sherring Rosaria Fiore Ross Jenkins Ross Tighe Rowland Pengilly Roy Colefax Rudolphus Allen Sandra Swadling Sheila Plater Shirley Piddington Sidney Watt Silas Banks Stanislaw Wieczorski Stanley Steed Terence Clare Terence Smith Thelma Williamson Thomas Lilley Thomas Sheather Trevor James Valda Christie Valda Stronge Valerie Best Vera Coble Victor Bonham Victor Pask Vonda Owers Walter Brennan Walter Dodd Warwick Aston William Cassidy William Chambers William Flynn William Mcelligott William McGrillen William Waters William Wheatley Yvonne Martin

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Head Office Sydney 46 Burwood Road

BURWOOD NSW 2134

Branches Sydney 46 Burwood Road

BURWOOD NSW 2134

BRISBANE 59A Melbourne Street

SOUTH BRISBANE QLD 4101

WOLLONGONG 200 Crown Street

WOLLONGONG NSW 2500

NEWCASTLE Shop 2, 28 Donald Street HAMILTON NSW 2303

Contact Us Tel 1300 886 123 FaX 1300 887 123

contact@rthealthfund.com.au www.rthealthfund.com.au

R&T Health Fund

R&T Health Fund | Financial Report 2006

Head Office Sydney 46 Burwood Road

BURWOOD NSW 2134

Branches Sydney 46 Burwood Road

BURWOOD NSW 2134

BRISBANE 59A Melbourne Street

SOUTH BRISBANE QLD 4101

WOLLONGONG 200 Crown Street

WOLLONGONG 2500

NEWCASTLE Shop 2, 28 Donald Street HAMILTON NSW 2303

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health fund

R&T Health Fund

Contents Directors’ Report 1 Auditors’ Independence Declaration 6 Directors’ Declaration 7 Income Statement 8 Balance Sheet 9 Statement of Changes in Equity 10 Cash Flow Statement 11 Notes to the Financial Statements 12 Independent Audit Report 28 RAILWAY & TRANSPORT HEALTH FUND LIMITED ABN 93 087 648 744

9

RAILWAY & TRANSPORT HEALTH FUND LIMITED ABN 93 087 648 744

Directors’ Report The Directors present their report together with the Financial Statements of the Railway & Transport Health Fund Limited for the year ended 30 June 2006 and the Auditors Report thereon.

Directors The following persons were directors during the whole of the financial year and up to the date of this report, unless otherwise stated: Name

Position Held

Date Appointed

V Reynolds Chair 21/09/2005 J Blake Vice Chair 21/09/2005 R Glover Director 22/09/2004 R Ledger Director 21/09/2005 B Dredge Director 21/09/2005 D Ellis Director 21/09/2005 M Prior Director 25/05/2006 J Walton Director 7/12/2005 V Wulf President J Whyte Director C Haigh Director F Fontana Director V Russo Director A Wilson Director H Lewocki Director R Le-Andrews Director

Date Resigned

17/11/2005 13/02/2006 17/11/2005 26/10/2005 21/09/2005 21/09/2005 21/09/2005 20/07/2005

The principal activity of the Fund during the course of the financial year was the provision of Private Health Insurance. There were no significant changes in the activities of the Fund during the year.

Result The operating profit/(loss) amounted to

The financial year ending 30 June 2006 resulted in a profit for the Fund. The 2006 profit was $2,718,000.

The Fund has continued to pay 100% for accommodation, theatre fee, prosthesis and pharmaceutical items used. Hospital benefits paid went from $24,650,000 to $23,976,000. This is a decrease in payments of benefits by $674,000 or (3%).

Ancillary claims have increased from $6,412,000 to $7,689,000. This is an increase in payment of benefits of $1,277,000 or 20%.

Membership

Principal Activities

Review of Operations

2006

2005

$2,718,000 ($1,140,000)

RAILWAY & TRANSPORT HEALTH FUND LIMITED ABN 93 087 648 744

The Fund’s hospital membership now totals 14,931, which is an increase on last year’s count of 14,762.

Ancillary membership now totals 9,675 which is an increase on last year’s count of 9,311. Total number of persons covered in 2006 amounted to 34,259.

Membership Statistics

2006

2005

Gain / (Loss)

NSW: Hospital

Ancillary

10,522 5,974

10,600 5,813

(78) 161

QLD: Hospital

Ancillary

4,409 3,701

4,162 3,498

247 203

Finances Total income for the year was $39,095,000 including $1,493,000 from invested funds. Expenditure for the year totalled $36,377,000 resulting in a net profit of $2,718,000.

Management expenses for the year were $3,987,000 (net of Ambulance Levy) or 10.4% of the total operating revenue.

As the Fund is a not for profit organisation, we continually monitor members funds. This year, total equity increased from $25,746,000 to $28,852,000.

The present level of equity more than meets the statutory requirements.

Directors’ Report (continued) Ambulance Levy A total of $724,000 was paid to the State Government during the year. This levy, represents an amount of $1.10 per week single unit or $2.20 per family.

Ancillary Total benefits of $7,689,000 were paid for 133,087 services, representing an average benefit return of 67% per service up from 60.18% in 2005.

Qualifications of the Current Board of Directors as at 30 June 2006 V Reynolds Dip. HR Mgt, GAICD, MAHRI, MWOB

Chair

J Blake

Vice Chair Experience and expertise – Passenger Information Officer, State Transit Sydney Buses for eleven years R Ledger B Elec

Director Experience and expertise – Engineering Manager with Passenger Fleet Maintenance in NSW State Rail Authority for forty one years Special Responsibilities – Chair of the Audit and Risk Management Committee R Glover

Director

Experience and expertise – Senior Executive, Rail Infrastructure Corporation for seven years – General Manager, Human Resources, Rail Infrastructure Corporation for three years – Regional Manager Projects and Support, RIC for three years – Manager, Resources Group NORTH for four years

Experience and expertise – Production Unit Manager with Air Brakes in NSW State Rail Authority for thirty years

Special Responsibilities – Chair of the Board – Chair of the Remuneration and Nominations Committee

Director

Special Responsibilities – Member of the Audit and Risk Management Committee D Ellis

Experience and expertise – Pollution Operator in QLD Railway for twenty eight years Special Responsibilities – Member of the Remuneration and Nominations Committee

RAILWAY & TRANSPORT HEALTH FUND LIMITED ABN 93 087 648 744

B Dredge

S Saffo B Comm CA

Director

Acting Company Secretary

Experience and expertise – Maintenance Planner with Queensland Rail for forty three years

Experience and expertise – Currently the Finance Manager and Acting Company Secretary of the Fund – Senior Auditor at BDO for three years

Special Responsibilities – Member of the Remuneration and Nominations Committee J Walton

Director Experience and expertise – Operations Manager with Railway & Transport Health Fund Limited for fourteen years – Audit Manager with NSW State Rail Authority for six years Special Responsibilities – Member of the Audit and Risk Management Committee M Prior M Com, Grad Dip (Applied Finance), CPA, FTIA

Director Experience and expertise – Self Employed Risk Management Consultant for two years – General Manager Operational Risk and Compliance, CBA for two years – Project Director, Accenture Singapore for two years – Senior Finance Executive, Westpac for twenty three years Special Responsibilities – Member of the Audit and Risk Management Committee

RAILWAY & TRANSPORT HEALTH FUND LIMITED ABN 93 087 648 744

Special Responsibilities – Acting Company Secretary of the Board – Acting Company Secretary of the Audit and Risk Committee – Acting Company Secretary of the Remuneration and Nominations Committee

Directors’ Report (continued) Executive Meetings During the year a total of 24 Executive Board meetings were convened. The number of meetings attended by each Director and Company Secretary is listed below. Non-attendance was due to illness, annual leave or departmental duties.

V Reynolds J Blake R Glover C Haigh R Ledger B Dredge D Ellis M Prior V Russo F Fontana R LeAndrews J Walton H Lewocki A Wilson V Wulf J Whyte G Campbell S Tizzone S Saffo

(Chair) (appointed 21.9.05) (Vice Chair) (appointed 21.9.05) (Director) (appointed 22.9.04) (Director) (resigned 17.11.05) (Director) (appointed 21.9.05) (Director) (appointed 21.9.05) (Director) (appointed 21.9.05) (Director) (appointed 25.5.06) (Director) (term concluded 21.9.05) (Director) (resigned 26.10.05) (Director) (resigned 20.7.05) (Executive Director) (appointed 7.12.05) (Director) (term concluded 21.9.05) (Director) (term concluded 21.9.05) (President) (resigned 17.11.05) (Director) (resigned 13.2.06) (CEO) (appointed 24.4.06) (Company Secretary) Voluntary Redundant 20.12.05) (Acting Company Secretary appointed 20.12.05)

No. Eligible to Attend

No. Attended

12 12 19 9 12 12 12 2 7 9 1 10 7 7 10 14 3 13 8

12 12 18 8 12 12 12 1 7 9 1 10 3 7 10 8 3 10 8

During the year a total of two Remuneration and Nominations Committee meetings were convened. The number of meetings attended by each Director is listed below.

V Reynolds D Ellis B Dredge S Saffo

Chair Director Director Acting Company Secretary

No. Eligible to Attend

No. Attended

2 2 2 2

2 2 2 1

During the year a total of four Audit and Risk Management Committee meetings were convened. The number of meetings attended by each Director and Manager is listed below. Non-attendance was due to illness, annual leave or departmental duties.

R Ledger R Glover M Prior J Blake J Walton S Tizzone C Haigh J Whyte S Saffo

Chair Director Director Director Director General Manager Director Director Acting Company Secretary

No. Eligible to Attend

No. Attended

3 4 2 1 4 1 1 1 3

3 4 1 1 4 1 1 1 2

RAILWAY & TRANSPORT HEALTH FUND LIMITED ABN 93 087 648 744

State of Affairs In the opinion of the Directors, there were no significant changes in the affairs of the Fund that occurred during the financial year under review not otherwise disclosed in this report or the financial statement.

Events Subsequent to Balance Date There has not arisen in the interval between the end of the financial year and date of this report any item, transaction or event of a material unusual nature likely in the opinion of the Directors, to affect significantly the operations of the Fund, the results of those operations, or the state of affairs of the Fund in subsequent financial years.

Likely Developments There are no likely developments that will significantly affect the operations of the Fund.

Environmental Regulations

ii) paid or agreed to pay a premium in respect of a contract insuring against a liability incurred as an officer for the costs or expenses to defend legal proceedings. with the exception of the following matter: during or since the end of the financial year, the Fund has paid or agreed to pay a premium insuring it’s directors and officers against liability, for which cover includes the current financial year. In accordance with normal commercial practice, disclosure of the amount of premium payable under, and the nature of liabilities covered by, the insurance contract is prohibited by a confidentiality clause in the contract.

Auditors’ Independence Declaration A copy of the auditor’s independence declaration as required under section 307c of the Corporation Act 2001 is set on page 6.

This statement is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the Directors.

There are no environmental regulations that impact on the Fund.

Directors’ Benefits Since the end of the previous financial year, no Director of the Fund has received or become entitled to receive any benefit (other than a benefit included in the aggregate amount of remuneration received or due and receivable by Directors shown in Note 22 of the financial statements) by reason of a contract made by the Fund with a Director or with a firm of which a Director is a member, or with an entity in which a Director has a substantial interest.

Indemnifying Officers and Auditor The Fund has not during or since the end of the financial year in respect of any person who is or has been an officer or auditor of the Fund: i) indemnified or made any relevant agreement for indemnifying against a liability incurred as an officer, including costs and expenses in successfully defending legal proceedings; or

RAILWAY & TRANSPORT HEALTH FUND LIMITED ABN 93 087 648 744

V REYNOLDS

Chair

J BLAKE

Vice Chair Dated at Sydney 20th day of September, 2006

Auditors’ Independence Declaration

RAILWAY & TRANSPORT HEALTH FUND LIMITED ABN 93 087 648 744

Directors’ Declaration The directors of the Fund declare that: 1. The financial statements, comprising the Income Statement, Balance Sheet, Cashflow Statement and the Statement of Changes in Equity, and accompanying notes are in accordance with the Corporations Act 2001 and: a) comply with Accounting Standards and the Corporations Regulations 2001 and b) g ive a true and fair view of the financial position of the Fund as at 30 June 2006 and performance for the year ended on that date of the Fund.

2. In the directors’ opinion, there are reasonable grounds to believe that the Fund will be able to pay its debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the directors by:

V REYNOLDS

Chair

J BLAKE

Vice Chair Dated at Sydney 20th day of September, 2006

RAILWAY & TRANSPORT HEALTH FUND LIMITED ABN 93 087 648 744

Income Statement For the Year Ending 30 June 2006

Note

2006 $’000

Revenue from continuing operations

5

Other Income

6

84

–

Employee benefits expense

(1,916)

(1,859)

Depreciation and amortisation expense

39,011

2005 $’000

34,248

7

(156)

(125)

Commission expenses

(212)

(218)

Membership expenses

(177)

(163)

Computer expenses

(77)

(86)

Postage and telephone expenses

(243)

(172)

Printing and stationery expenses

(129)

(96)

Property expenses

(252)

(311)

Audit and accounting expenses

(424)

(225)

Financial charges and taxes

(105)

(88)

Hospital benefit expenses

(23,976)

(24,650)

Ancillary benefit expenses

(7,689)

(6,412)

State levies

(724)

(639)

Other expenses

(297)

(344)

Profit / (loss) before income tax

2,718

(1,140)

Income tax expense

–

–

19

2,718

(1,140)

Profit / (loss) attributable to members of the Fund The above income statements should be read in conjunction with the accompanying notes.

RAILWAY & TRANSPORT HEALTH FUND LIMITED ABN 93 087 648 744

Balance Sheet As at 30 June 2006

Note

2006 $’000

2005 $’000

ASSETS Current assets Cash and cash equivalents

9

11,531

9,685

Trade and other receivables

10

2,596

3,170

Held-to-maturity investments

11

5,032

–

Other Financial assets

12

–

9,634

Total current assets

19,159

22,489

Non-current assets Held-to-maturity investments

11

9,098

–

Other financial assets

12

–

4,067

Property, plant and equipment

13

5,192

4,595

Investment Property

14

1,400

1,316

Total non-current assets

15,690

9,978

Total assets

34,849

32,467

190

175

LIABILITIES Current liabilities Trade and other payables

15

Interest-bearing liabilities

16

–

778

Provisions

17

3,002

2,645

Other liabilities

18

2,727

2,960

Total current liabilities

5,919

6,558

78

163

Non-current liabilities Provisions

Total non-current liabilities

78

163

Total liabilities

5,997

6,721

Net assets

28,852

25,746

EQUITY Reserves

19

1,213

609

Retained earnings

19

27,639

25,137

Total equity

28,852

25,746

The above balance sheets should be read in conjunction with the accompanying notes.

17

RAILWAY & TRANSPORT HEALTH FUND LIMITED ABN 93 087 648 744

Statement of Changes in Equity For the Year Ending 30 June 2006

Note

Retained earnings Reserves

At 1 July 2004

26,277

609

26,886

Total income and expense for the year recognised directly in equity

26,277

609

26,886

Loss for the year

(1,140)

–

(1,140)

Total income and expense for the year

25,137

609

25,746

At 30 June 2005

25,137

609

25,746

17, 19

(216)

–

(216)

Restated total equity at beginning of the financial year

24,921

609

25,530

Increase in fair value of land and buildings

–

604

604

Total income and expense for the year recognised directly in equity

24,921

1,213

26,134

Adjustment on adoption of AASB 1023

Total equity

Profit for the year

2,718

–

2,718

Total income and expense for the year

27,639

1,213

28,852

At 30 June 2006

27,639

1,213

28,852

The above statements of changes in equity should be read in conjunction with the accompanying notes.

RAILWAY & TRANSPORT HEALTH FUND LIMITED ABN 93 087 648 744

10

Cash Flow Statement For the Year Ending 30 June 2006

Note

2006 $’000

2005 $’000

Cash flows from operating activities Cash receipts from customers

37,583

33,495

Cash paid to suppliers and employees

(36,125)

(33,682)

Interest received

1,636

1,341

Rent received

108

135

21

3,202

1,289

Purchase of property, plant and equipment

(148)

Net cash inflow from operating activities Cash flows from investing activities

Purchase of investment property

–

(92) (1,316)

Purchase of held to maturity investments

(10,138)

(1,626)

Proceeds from held to maturity investments

9,708

1,541

Net cash outflow from investing activities

(578)

(1,493)

Net cash inflow/(outflow) from financing activities

–

–

Net increase / (decrease) in cash and cash equivalents

2,624

(204)

Cash flows from financing activities

Cash and cash equivalents at beginning of year

8,907

9,111

9

11,531

8,907

Cash and cash equivalents at end of year The above cash flow statements should be read in conjunction with the accompanying notes.

11

RAILWAY & TRANSPORT HEALTH FUND LIMITED ABN 93 087 648 744

Notes to the Financial Statements Note 1 Corporate Information The financial report of Railway & Transport Health Fund Limited for the year ended 30 June 2006 was authorised for issue in accordance with a resolution of the directors on 20 September 2006 and covers Railway & Transport Health Fund Limited as an individual entity.

The financial report is presented in the Australian currency.

Railway & Transport Health Fund Limited is a company limited by guarantee incorporated and domiciled in Australia. The address of the registered office and principal place of business is 46 Burwood Road, Burwood 2134.

Note 2 Summary of Significant Accounting Policies (a) Basis of Preparation

The financial report is a general purpose financial report which has been prepared in accordance with Australian equivalents to International Financial Reporting Standards (AIFRS), other authoritative pronouncements of the Australian Accounting Standards Board, Urgent Issues Group Interpretations and the Corporations Act 2001.

The financial report has also been prepared on a historical cost basis, except for investment properties, land and buildings, that have been measured at fair value.

Compliance with Australian equivalents to International Financial Reporting Standards (AIFRS) ensures that the financial report, comprising the financial statements and notes thereto, complies with International Financial Reporting Standards (IFRS).

This is the first financial report prepared under AIFRS and AASB 1 First-Time Adoption of Australian Equivalents to International Financial Reporting Standards has been applied in preparing these financial statements. Comparatives for the year ended 30 June 2005 have been restated accordingly.

Reconciliation of AIFRS equity and loss for the year ended 30 June 2005 to the balances reported in the 30 June 2006 financial report are detailed in Note 27 below. (b) Income Recognition

Contribution Income Contributions have been calculated on an accruals basis, bringing to account contributions in arrears and in advance at year end. For those amounts in arrears, collectibility has been assessed.

Rental Income Rental income is accounted for on a straight-line basis over the lease term. Contingent rentals are recognised as income in the periods when they are earned. (c) Impairment of Assets

At each reporting date the Fund assesses the amount of impairment of assets by determining the recoverable amount as the depreciable replacement cost. (d) Cash and Cash Equivalents

For the purposes of the Cash Flow Statement, cash and cash equivalents includes cash on hand and at bank, deposits held at call with financial institutions, other short term, highly liquid investments with maturities of three months or less, that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value and bank overdrafts. (e) Investments and Other Financial Assets

All investments and other financial assets are initially stated at cost, being the fair value of consideration given plus acquisition costs. Purchases and sales of investments are recognised on trade date which is the date on which the Fund commits to purchase or sell the asset. Accounting policies for each category of investments and other financial assets subsequent to initial recognition are set out below.

Held-to-maturity investments Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturities that the Fund has the positive intention and ability to hold-to-maturity and are measured at amortised cost subsequent to initial recognition using the effective interest method.

RAILWAY & TRANSPORT HEALTH FUND LIMITED ABN 93 087 648 744

12

(f) Fair Values

Fair values may be used for financial asset and liability measurement as well as for sundry disclosures.

Fair values for financial instruments traded in active markets are based on quoted market prices at balance sheet date. The quoted market price for financial assets is the current bid price and the quoted market price for financial liabilities is the current ask price.

The fair value of financial instruments that are not traded in an active market are determined using valuation techniques. Assumptions used are based on observable market prices and rates at balance date. The fair value of long-term debt instruments is determined using quoted market prices for similar instruments. Estimated discounted cash flows are used to determine fair value of the remaining financial instruments.

The fair value of trade receivables and payables is their nominal value less estimated credit adjustments. (g) Property, Plant and Equipment

Land and buildings are measured at fair value less accumulated depreciation. Any accumulated depreciation at revaluation date is eliminated against the gross carrying amount of the asset and the net amount is restated as the revalued amount of the asset. A revaluation surplus is credited to the asset revaluation reserve included within members’s equity unless it reverses a revaluation decrease on the same asset previously recognised in the income statement. A revaluation deficit is recognised in the income statement unless it directly offsets a previous revaluation surplus on the same asset in the asset revaluation reserve. On disposal, any revaluation reserve relating to sold assets is transferred to retained earnings. Independent valuations are performed regularly to ensure that the carrying amounts of land and buildings does not differ materially from the fair value at the balance sheet date.

All other plant and equipment is stated at historical cost, including costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management, less depreciation and any impairments.

13

RAILWAY & TRANSPORT HEALTH FUND LIMITED ABN 93 087 648 744

Land is not depreciated. Depreciation on other assets is calculated on a diminishing value basis over the estimated useful life of the asset as follows: Class of Fixed Asset

Depreciation Rate %

Buildings Computer Equipment Vehicles Plant and equipment Leasehold Improvements

4 20 20 10 20

The assets’ residual values and useful lives are reviewed and adjusted, if appropriate, at each balance sheet date.

Gains and losses on disposals are calculated as the difference between the net disposal proceeds and the asset’s carrying amount and are included in the income statement in the year that the item is derecognised. (h) Investment Properties

Investment properties are initially measured at cost including transaction costs. Subsequent to initial recognition, investment properties are carried at fair value, representing market conditions at balance sheet date. Gains or losses arising from changes in fair values of investment properties are included in the income statement as part of other income in the year in which they arise. (i) Trade and Other Payables

Trade and other payables represent liabilities for goods and services provided to the Fund prior to the year end and which are unpaid. These amounts are unsecured and have 30-60 day payment terms. (j) Other Liabilities

Other liabilities comprises of contributions in advance and employee benefits provisions in respect of annual leave.

Contributions in advance represent receipt in advance of contributions for the ensuing year.

This therefore represents the balance of contribution income received which have been calculated on an accrual basis.

Notes to the Financial Statements (continued) (k) Outstanding Claims Provisions

(m) Rounding of Amounts

The Fund currently assesses the amount of the outstanding claim provision on a statistical model utilising previous claims history. The statistical model used by the Fund is a chain ladder model as prescribed by PHIAC. Under Australian equivalents to IFRSs, AASB 1023 General Insurance Contracts, from 1 July 2005 the Fund is required to show that amount of the outstanding claims provision including a risk margin. The margin is to be based on some statistical level of confidence. The margin of $157,000 as calculated by the funds actuary, assumes a confidence level of 75%. 75% is the standard adopted by the general insurance industry in Australia.

The company is of a kind referred to in Class Order 98/0100 issued by the Australian Securities and Investments Commission relating to rounding of amounts in the financial report. Amounts have been rounded to the nearest thousand dollars ($’000) unless otherwise stated.

(l) Employee Benefit Provisions

Wages and Salaries, Annual Leave and Sick Leave Liabilities for wages and salaries, including nonmonetary benefits, annual leave and accumulating sick leave expected to be settled within 12 months of balance sheet date are recognised in respect of employees’ services rendered up to balance sheet date and measured at amounts expected to be paid when the liabilities are settled. Liabilities for nonaccumulating sick leave are recognised when leave is taken and measured at the actual rates paid or payable. Liabilities for wages and salaries and annual leave are included as part of Other Liabilities.

Long Service Leave Liabilities for long service leave are recognised as part of the provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees to the balance sheet date using the projected unit credit method.

Consideration is given to expected future salaries and wages levels, experience of employee departures and periods of service. Expected future payments are discounted using national government bond rates at balance sheet date with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.

(n) Comparatives

Where required by Accounting Standards, comparative figures have been adjusted to conform with changes in presentation for the current financial year.

Note 3 Critical Accounting Estimates And Judgements (A) Actuarial assumptions and methods

The actuarial valuation model used to calculate the outstanding claims is a modified chain ladder model.

This model, and variants of it, is used by health insurers and general insurers to calculate outstanding claims liabilities by using the relationships between the claims paid at each time interval in the past, for each past period incurred, to predict the extent of incurred claims for each recent period for which claim payments have not yet been completed.

The model produces claims incurred for each month of the previous 2 years, and outstanding claims provisions (by class of claim) for the latest month and for each of the twelve previous months.

As the run-off of health insurance claims is relatively rapid, the claims to be paid in the future were not discounted. That is, a discount rate of zero was assumed.

The reinsurance component is calculated as 19% of the total hospital and medical claims outstanding.

The percentage was estimated from past experience.

RAILWAY & TRANSPORT HEALTH FUND LIMITED ABN 93 087 648 744

14

The risk margin was determined from the assumption that there is a normal distribution of the differences between the calculated provisions required for past periods of time greater than 1 year ago, and the finally determined actual requirements for those periods.

The standard deviation of these differences lead to a risk margin of 5.52% providing for a 75% likelihood that the outstanding claims provision set at any particular date, and based on the reported claim payments made to that date, will be adequate.

Note 4 Risk Management Policies and Objectives Activities undertaken by Railway & Transport Health Fund Limited may expose the Fund to market risk, credit risk, liquidity risk and fair value and cash flow interest rate risk. The Funds’ risk management policies and objectives are therefore designed to minimise the potential impacts of these risks on the results of the Fund where such impacts may be material.

The Fund has a central treasury function which implements the risk management policies approved by the board of directors. (a) Credit Risk Exposure

Credit risk is the risk that counter parties to a financial asset will fail to discharge their obligations, causing the Fund to incur a financial loss.

The Fund does not expect any counter parties to fail to meet their obligations given their high credit ratings and therefore does not require collateral or other security to support credit risk exposures.

15

RAILWAY & TRANSPORT HEALTH FUND LIMITED ABN 93 087 648 744

(b) Fair Value and Interest Rate Risk

The Fund’s interest rate risk arisies from financial assets held with fixed interest rates.

To manage their fair value interest rate risk, the Fund keeps a certain portion of financial assets at fixed rates to counteract a fall in interest rates, and a certain portion of financial assets at floating rates to allow for increases in interest rates. (c) Market Risk

This comprises foreign exchange risk and price risk.

The Fund only invests in Australian cash funds and is therefore not significantly exposed to market risk. (d) Liquidity Risk

Liquidity risk is the risk that the Fund may encounter difficulties raising funds to meet commitments.

It is the policy of the Board of Directors to maintain adequate available funds at call.

Notes to the Financial Statements (continued) Note 5 Revenue from Continuing Operations

Rendering of services Rental income Interest

2006 $’000

2005 $’000

37,518 108 1,385 39,011

32,720 135 1,393 34,248

Fair value gains on investment properties

84

–

84

–

14

9

67 71 4 142

51 65 – 116

18 23 41

38 12 50

1,916

1,859

241

187

Note 6 Other Income

Note 7 Expenses Profit/(loss) before income tax includes the following specific expenses: Amortisation expense Leasehold improvements Depreciation expense Buildings Plant and equipment Motor vehicles

Rental expenses in operating leases Wollongong office rental expense Newcastle office rental expense

Employee benefits expense Defined contribution superannuation

RAILWAY & TRANSPORT HEALTH FUND LIMITED ABN 93 087 648 744

16

Note 8 Auditors’ Remuneration

2006 $’000

2005 $’000

Assurance Services Audit services Amounts paid/payable to BDO for audit or review of the financial report for the Fund.

76 Amounts paid/payable to non-BDO audit firms for audit or review of the financial report for the Fund. 56

132

51 – 51

Note 9 Cash and Cash Equivalents Cash at bank and in hand Deposits with banks and credit unions

1 11,530 11,531

1 9,684 9,685

(a) Cash at Bank Cash at bank and in hand is non-interest bearing. Deposits at call bear floating interest rates between 3.00% and 6.00% (2005 3.00% and 6.10%). These deposits have an average maturity of 30 days. (b) Reconciliation of Cash The above figures are reconciled to the cash at the end of the financial year as shown in the statement of cash flows as follows:

Balances as above Bank overdrafts (note 16) Balances per statement of cash flows

2006 $’000

2005 $’000

11,531 – 11,531

9,685 (778) 8,907

1,070 1,526 2,596

1,135 2,035 3,170

Note 10 Trade and Other Receivables (Current) Trade receivables Other receivables

(a) Effective Interest Rate and Credit Risk Information concerning the effective interest rate and credit risk of both current and non current receivables is set out in note 20.

17

RAILWAY & TRANSPORT HEALTH FUND LIMITED ABN 93 087 648 744

Notes to the Financial Statements (continued) Note 11 Held-to-Maturity Investments

2006 $’000

2005 $’000

CURRENT Bonds Floating rate notes

2,022 3,010 5,032

– – –

NON CURRENT Bonds Floating rate notes

6,080 3,018 9,098

– – –

The bonds and floating rate notes are carried at amortised cost. They are to be held until their maturity between one and three years and carry fixed interest rates of 5% and 8%. The carrying value of the bonds and floating rate notes approximate to their fair value.

(A) Transition to AASB 132 and AASB 139 The Fund has taken the exemption available in AASB 1 to apply AASB 132 Financial Instruments: Disclosure and Presentation and AASB 139 Financial Instruments: Recognition and Measurement from 1 July 2005. As these instruments were carried at amortised cost under AGAAP there has been no adjustment at the transition date.

Note 12 Other Financial Assets

2006 $’000

2005 $’000

CURRENT Investments comprise: Other short term investments, at cost

–

9,634

NON-CURRENT Investments comprise: Other long term investments, at cost

–

4,067

These investments represent fixed interest rates securities and bonds (with interest rates between 5.5% and 8%) and terms of up to 3 years.

(A) Transition to AASB 132 and AASB 139 The Fund has taken the exemption available in AASB 1 to apply AASB 132 Financial Instruments: Disclosure and Presentation and AASB 139 Financial Instruments: Recognition and Measurement from 1 July 2005. At the date of transition to these standards on 1 July 2005 for the Fund: – other investments, with a carrying value of $13,701,000 under previous AGAAP, were designated and reclassified as held-to-maturity investments (refer to note 11).

Note 13 Property, Plant and Equipment

Land At cost

2006 $’000

2005 $’000

876 876

876 876

1,250 1,250

1,800 1,800

Land At fair value

RAILWAY & TRANSPORT HEALTH FUND LIMITED ABN 93 087 648 744

18

2006 $’000

2005 $’000

2,658 – 2,658

1,546 – 1,546

102 (46) 56 2,714 4,840

141 (72) 69 1,615 4,291

949 (612) 336

854 (551) 304

20 (4) 16 5,192

– – – 4,595

Buildings At fair value Accumulated depreciation

Leasehold improvements At cost Accumulated amortisation

Total buildings Total land and buildings Plant and equipment At cost Accumulated depreciation

Motor Vehicles At cost Accumulated amortisation

Total non-current property, plant and equipment

(A) Revaluations Land and Buildings at fair values were determined by independent valuations as at 30 June 2006. The valuation basis of land and buildings at fair value is the amount for which the assets could be exchanged between willing parties in an arms length transaction, based on current prices in an active market for similar properties in the same location and condition.

(B) Reconciliations Reconciliations of the carrying amounts of each class of property, plant and equipment at the beginning and end of the current and previous financial year are set out below:

2006 $’000

2005 $’000

Total Land Carrying amount at beginning of financial year Net revaluation increases/(decreases) Carrying amount at end of financial year

2,676 (550) 2,126

2,676 – 2,676

Total Buildings Carrying amount at beginning of financial year Additions Net revaluation increases/(decreases) Depreciation Carrying amount at end of financial year

1,546 25 1,155 (67) 2,659

1,597 – – (51) 1,546

68 1 (14) 55

52 25 (9) 68

Total Leasehold Improvements Carrying amount at beginning of financial year Additions Depreciation Carrying amount at end of financial year

19

RAILWAY & TRANSPORT HEALTH FUND LIMITED ABN 93 087 648 744

Notes to the Financial Statements (continued) Note 13 Property, Plant and Equipment (continued)

2006 $’000

2005 $’000

Total Plant and Equipment Carrying amount at beginning of financial year Additions Disposals Depreciation Carrying amount at end of financial year

305 102 – (71) 336

330 67 (27) (65) 305

– 20 (4) 16

– – – –

1,316 – 84 1,400

– 1,316 – 1,316

Total Motor Vehicles Carrying amount at beginning of financial year Additions Depreciation Carrying amount at end of financial year

Note 14 Investment Property At fair value Balance at beginning of year Acquisitions Fair value adjustments Balance at end of year

Land and Buildings are disclosed at fair values determined by independent valuations as at 30 June 2006. The valuation basis of land and buildings at fair value is the amount for which the assets could be exchanged between willing parties in an arms length transaction, based on current prices in an active market for similar properties in the same location and condition, and subject to similar leases. No impairment losses have incurred during the year.

The following amounts have been recognised in the income statement:

2006 $’000

Rental income Direct operating expenses arising from investment property that generated rental income during the year

2005 $’000

9

–

57

–

190 190

175 175

–

778

There are no restrictions on the realisability of investment property or the remittance of income and proceeds of disposal.

Note 15 Trade and Other Payables Other payables

(a) Interest rate risk Details of funds exposure to interest rates change are set out in note 20.

Note 16 Interest-bearing Liabilities CURRENT Unsecured Bank overdrafts (a) Interest rate risk Details of funds exposure to interest rates change are set out in note 20.

RAILWAY & TRANSPORT HEALTH FUND LIMITED ABN 93 087 648 744

20

Note 17 Provisions

CURRENT Outstanding claims provision Risk margin

NON-CURRENT Employee benefits

2006 $’000

2005 $’000

2,845 157 3,002

2,645 – 2,645

78

163

(a) Movement In Provisions

Outstanding claims provision $’000

Balance at beginning of the year Adjustment on adoption of AASB 1023 Movement in outstanding claims provision

Total $’000

2,645

–

– 200

216 –

216 200

–

(59)

(59)

2,845

157

3,002

Movement in risk margin Balance at end of the year

Risk margin $’000

2,645

(B) Interest rate risk Details of funds exposure to interest rates change are set out in note 20.

Note 18 Other Liabilities

CURRENT Deferred income Employee benefits

2006 $’000

2005 $’000

2,594 133 2,727

2,809 151 2,960

1,213 1,213

609 609

609 604 1,213

609 – 609

Note 19 Reserves and Retained Earnings Asset revaluation reserve

Movements in reserves Asset Revaluation Reserve Balance at start of year Revaluation Balance at the end of year The asset revaluation reserve records increments and decrements on the revaluation of individual parcels of land and buildings.

Movements in retained earnings Retained Earnings Balance at start of year 25,137 26,277 Adjustment on adoption of AASB 1023 (216) – Net profit / (loss) for the year 2,718 (1,140) Balance at end of year 27,639 25,137

21

RAILWAY & TRANSPORT HEALTH FUND LIMITED ABN 93 087 648 744

Notes to the Financial Statements (continued) Note 20 Financial Instruments Risk Management Policies Interest Rate Risk The Fund’s exposure to interest rate risk, which is the risk that the financial instruments value will fluctuate as a result of changes in market interest rates and the effective weighted average interest rate for each class of financial assets and financial liabilities is set out below:

Fixed interest rate maturing

Floating Interest 1 year or Over 1 to 2 Over 2 to 5

Rate less years years

$ ‘000 $ ‘000 $ ‘000 $ ‘000

None Interest Bearing $ ‘000

Total $ ‘000

Year ended 2006 Financial Assets Cash and cash equivalents Receivables Held to maturity investments

Effective weighted average interest rate

11,530 – 2,006 13,536

– – 3,026 3,026

– – 3,996 3,996

5.1%

6.5%

7.0%

– – 5,102 5,102

1 1,070 – 1,071

11,531 1,070 14,130 26,731

Financial Liabilities Overdraft Trade and other payables

– – –

– – –

– – –

– – –

– 190 190

– 190 190

13,536

3,026

3,996

5,102

881

26,541

Fixed interest rate maturing

Floating Interest 1 year or Over 1 to 5 More than 5

Rate less years years

$ ‘000 $ ‘000 $ ‘000 $ ‘000

None Interest Bearing $ ‘000

Total $ ‘000

Year ended 2005 Financial Assets Cash and cash deposits Receivables Other financial assets

Effective weighted average interest rate

164 – – 164 5.1%

7,688 – 9,634 17,322

– – 4,067 4,067

6.5%

7.0%

– – – 17,322

– – – 4,067

– – – –

1,833 1,135 – 2,968

9,685 1,135 13,701 24,521

– – – –

– 175 175 2,793

778 175 953 23,568

Financial Liabilities Overdraft Trade and other creditors

778 – 778 (614)

Fair Values The carrying amounts of financial assets and liabilities approximate to their net fair value.

RAILWAY & TRANSPORT HEALTH FUND LIMITED ABN 93 087 648 744

22

Note 21 Cash Flow Information

Reconciliation of profit / (loss) after income tax to net cash flow from operating activities Profit / (Loss) for the year Depreciation Amortisation Net gain on sale of property, plant and equipment Fair value adjustment to investment property

2006 $’000

2005 $’000

2,718 156 130 – (84)

(1,140) 125 227 27 –

199 121 65 15 (103) 200 (215) 3,202

(52) (52) 619 20 62 626 827 1,289

Change in operating assets: decrease / (increase) in other receivables decrease / (increase) in interest receivables decrease in other assets increase in other payables (decrease) / increase in employee provisions decrease / (increase) in provisions for outstanding claims (decrease) / increase in deferred income Net cash flow from operating activities

Note 22 Key Management Personnel Disclosures (a) Key management personnel The following persons were key management personnel of the Fund during the financial year:

23

Name

Position Held

V Reynolds

Chair

Date Appointed Date Resigned

21/9/05

J Blake

Vice Chair

21/9/05

R Glover R Ledger

Director Director

22/9/04 21/9/05

B Dredge

Director

21/9/05

D Ellis

Director

21/9/05

M Prior

Director

25/5/06

J Walton

Director

7/12/05

G Campbell

CEO

24/4/06

V Wulf

President

17/11/05

J Whyte

Director

13/2/06

C Haigh

Director

17/11/05

F Fontana

Director

26/10/05

V Russo

Director

21/9/05

A Wilson

Director

21/9/05

H Lewocki

Director

21/9/05

R Le-Andrews

Director

20/7/05

S Tizzone

General Manager

20/12/05

RAILWAY & TRANSPORT HEALTH FUND LIMITED ABN 93 087 648 744

Notes to the Financial Statements (continued) Note 22 Key Management Personnel Disclosures (continued) (b) Compensation Details of compensation key management personnel of Fund are set out below:

V Reynolds $

J Blake $

R Glover $

R Ledger $

B Dredge $

D Ellis $

M Prior $

2006 Short-term benefits Cash salary and fees

22,916

15,666

9,549

14,999

11,833

11,333

1,750

Other short-term employee benefits

–

–

–

–

–

–

–

2,100

1,485

2,543

1,387

1,103

2,603

158

Long service leave Termination Benefits

– –

– –

– –

– –

– –

– –

– –

Total

25,016

17,151

12,092

16,386

12,936

13,936

1,908

J Whyte $

C Haigh $

V Wulf $

A Wilson¹ $

S Tizzone² $

Post-Employment Benefits Pension and Superannuation Other long-term employee benefits

(continued)

G Campbell $

Short-term benefits Cash salary and fees 28,306 Other short-term employee benefits 2,072

5,000 –

1,041 –

8,336 –

2,333

450

–

321

Long service leave Termination Benefits

– –

– –

– –

– –

Total

32,711

5,450

1,041

8,657

J Walton $

Total $

– 38,640 100,801 270,170 – – 6,691 8,763

Post-Employment Benefits Pension and Superannuation

7,222

5,555

10,391

37,651

Other long-term employee benefits – 1,739 – 145,951

3,345 5,084 – 145,951

7,222 191,885 121,228

467,619

¹ A Wilson was paid final salary sacrifice of $7,222 further to his resignation during the period on 21 September 2005. ²S Tizzone was paid an eligible termination payment of $145,951, and unused annual leave and long service leave entitlements of $21,115 and $67,500 respectively.

RAILWAY & TRANSPORT HEALTH FUND LIMITED ABN 93 087 648 744

24

A Wilson $

C Haigh $

R Glover $

F Fontana $

H Lewocki $

J Whyte $

2005 Short-term benefits Cash salary and fees Other short-term employee benefits

5,800 –

41,486 –

6,201 –

20,744 –

40,580 –

25,022 –

–

3,733

559

1,867

3,639

2,252

Long service leave Termination Benefits

– –

– –

– –

– –

– –

– –

Total

5,800

45,219

6,760

22,611

44,219

27,274

R Arnold³ R Leandrews $ $

V Russo $

V Wulf $

S Tizzone $

Post-Employment Benefits Pension and Superannuation Other long-term employee benefits

(continued)

Short-term benefits Cash salary and fees Other short-term employee benefits

Total $

17,571 –

19,338 –

29,490 –

73,659 –

116,551 10,300

396,442 10,300

1,581

1,784

2,655

6,632

36,538

61,240

Long service leave Termination Benefits

– –

– –

– –

– –

3,668 –

3,668 –

Total

19,152

21,122

32,145

80,291

Post-Employment Benefits Pension and Superannuation Other long-term employee benefits

³ R Arnold repaid $4,384 of his honoraria on his retirement on 17 May 2005.

25

RAILWAY & TRANSPORT HEALTH FUND LIMITED ABN 93 087 648 744

167,057

471,650

Notes to the Financial Statements (continued) Note 23 Contingencies Contingent Liabilities At 30 June 2006, Railway & Transport Health Fund Limited had no contingent liabilities.

Note 24 Commitments Capital commitments

2006 $’000

Property, plant and equipment Payable: Within one year Later than one year but not later than 5 years

2005 $’000

129 – 129

– – –

37 – 37

18 8 26

Lease commitments Non-cancellable operating leases – future minimum lease payments Within one year Later than one year but not later than 5 years

The Fund leases various premises under non-cancellable operating leases expiring within one year. All leases have annual CPI escalation clauses. The above commitments do not include any turnover rentals which are contingent upon the Fund achieving defined sales levels. Nor do they include commitments for any renewal options on leases. Lease terms usually run for 5 years with a 5 year renewal option.

Note 25 Phiac Solvency Requirement

Note 27 Explanation of Transition to Australian Equivalents to IFRS

Under the requirements of the Health Benefits Organisations – Solvency Standard, 2003 the Railway & Transport Health Fund Limited solvency requirement for the year ended 30 June 2006 is $8,649,000 (2005: $8,080,000).

As stated in Note 2, this is the first time that the financial statements of the Fund have been prepared using Australian equivalents to IFRS. The following information summarises the impact of the transition from previous GAAP at the end of the previous financial year:

Note 26 Subsequent Events No material events subsequent to the reporting date.

(a) AASB 1 Transitional Exemptions

The Fund has elected to use the following transitional exemptions allowed by AASB 1 First-Time Adoption of Australian Equivalents to International Financial Reporting Standards:

RAILWAY & TRANSPORT HEALTH FUND LIMITED ABN 93 087 648 744

26

Exemption from requirements to restate financial instrument comparatives under AASB 132 and AASB 139 The Fund has elected to apply the exemption available in AASB 1 to restate comparatives for financial instruments. This means that the transition date for financial instruments becomes 1 July 2005 instead of 1 July 2004. Under previous GAAP, noncurrent investments were previously recognised at their cost, being $9,634,000 and $4,067,000 respectively until 30 June 2005. (b) Note on comparatives under AGAAP and those presented under AIFRS

As the Fund has applied the above exemptions, there has been no restatements to the 2005 comparatives. (c) Other notes

i) Property plant and equipment The Fund offsets revaluation increments and decrements within each class of non-current asset.

The Fund is a not for profit organisation. Under Australian equivalents to IFRSs, not for profit organisations can continue to offset revaluation increments and decrements against one another within a class of non current assets.

On review of the Asset Revaluation Reserve, it was noted that the balance of $609,000 at 30 June 2005 in entirely made up of increments to Land and buildings, relating to 46 Burwood Road.

The balance of the asset revaluation surplus was not required to be recalculated on transition to an assetby-asset basis. As a result there was no increase / decrease to the asset revaluation surplus or to the opening balances of retained earning at 1 July 2004. ii) Impairment of Assets The Fund previously assessed the amount of impairment of assets by determining the recoverable amount on the basis of undiscounted cash flows.

Under Australian equivalents to IFRSs, AASB 116 Impairment of Assets, the Fund was required to determine the recoverable amount as the depreciable replacement cost.

27

RAILWAY & TRANSPORT HEALTH FUND LIMITED ABN 93 087 648 744

The review of all assets had been undertaken by management and no impairments had been identified. In particular, properties owned by the Fund, and held as Land and Buildings or as Investment property have all had recent independent valuations, which support recoverable amounts greater than the carrying values. iii) Financial Assets The Fund has financial assets in the form of fixed interest deposits and fixed interest bonds, which are held to maturity. The premium on such bonds was amortised on a straight line basis over the life of the bond. Under Australian equivalents to IFRSs, the Fund’s bonds are classified as held to maturity investments and their value is calculated using the amortised cost method utilising the effective interest rate. iv) Outstanding Claims Provision The Fund assesses the amount of the outstanding claims provision on a statistical model utilising previous claims history. The statistical model used by the Fund is a chain ladder model as prescribed

by PHIAC. Under Australian equivalents to IFRSs, AASB 1023 General Insurance Contracts, from 1 July 2005 the Fund is required to show that amount of the outstanding claims provision including a risk margin. The margin is to be based on some statistical level of confidence. The margin of $216,000 was calculated by the funds actuary, assuming a confidence level of 75%. 75% is the standard adopted by the general insurance industry in Australia. This amount was provided as an adjustment to opening reserves at 1 July 2005, and disclosed under the adoption of AASB 1023 in the statement of changes in equity, and Note 19.

Independent Audit Report

RAILWAY & TRANSPORT HEALTH FUND LIMITED ABN 93 087 648 744

28

Contents Directors’ Report 1 Auditors’ Independence Declaration 6 Directors’ Declaration 7 Income Statement 8 Balance Sheet 9 Statement of Changes in Equity 10 Cash Flow Statement 11 Notes to the Financial Statements 12 Independent Audit Report 28 RAILWAY & TRANSPORT HEALTH FUND LIMITED ABN 93 087 648 744

9

RAILWAY & TRANSPORT HEALTH FUND LIMITED ABN 93 087 648 744

R&T Health Fund | Financial Report 2006

Head Office Sydney 46 Burwood Road

BURWOOD NSW 2134

Branches Sydney 46 Burwood Road

BURWOOD NSW 2134

BRISBANE 59A Melbourne Street

SOUTH BRISBANE QLD 4101

WOLLONGONG 200 Crown Street

WOLLONGONG 2500

NEWCASTLE Shop 2, 28 Donald Street HAMILTON NSW 2303

Contact Us Tel 1300 886 123 FaX 1300 887 123

contact@rthealthfund.com.au www.rthealthfund.com.au

health fund

R&T Health Fund