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2015Annual Report

Contents

Fast facts 2014-15

231 – average number of babies born each month

1,692 – average number of children (0-16 years) who attended our emergency departments each month

88,331 – people attended our emergency departments

74,563 – patients were admitted to our hospitals

31,515 – people were admitted to hospital from our emergency departments

6,288 – children (0-16 years) were admitted to hospital for treatment1

17,233 – people were admitted to hospital for surgery

5,058 – people were admitted to hospital for emergency surgery

11,833 – people were admitted to hospital for elective surgery

8,724 – average number of prescription items dispensed by our Pharmacy each month

11,083 – average number of X-rays and medical imaging procedures performed each month

29 – average number of daily Hospital in the Home visits

29,466 – dental courses of care were provided through Community Health

70,743 – hours of service were provided through the Home and Community Care Program

5,262 – hours of service were provided through our drug and alcohol program through the Community Health and Drug Program

15,736 – hours of service were provided by our Health Independence Programs based within Community Health (HARP, Residential Inreach, PAC)

5,117 – occasions of service were provided at our various diabetes clinics

Introduction: Chairperson and Chief Executive 1

Report of Operations 3

Responsible Bodies Declaration 3

Our Health Service 3

Objectives and Functions of Peninsula Health 3

Services Provided by Peninsula Health 4

Governance and Organisational Structure 6

Strategic Priorities 2014-15 9

Financial Summary 13

Performance Priorities 14

Activity and Funding 15

Other Disclosures 17

Alternate Presentation of Comprehensive Operating Statement 23

Disclosure Index 24

Financial Statements 26

1. Includes same children admitted multiple times (figure is based on monthly averages) Front cover: The Frankston Hospital F3/Emergency Department opened in February 2015.

Peninsula Health Annual Report 2015 Page 1

Chairperson & Chief ExecutiveIt is a pleasure to present the Annual Report 2014-15 to inform Government, the community and our staff about Peninsula Health’s operational and financial performance for the year ended 30 June 2015. It has been another year of outstanding achievement.

The Health Service operates across a number of sites providing a broad range of services including:

• Acute Care at Frankston Hospital and Rosebud Hospital • Sub–Acute Care, Rehabilitation, Palliative Care and

Residential services at Mornington, Frankston and Rosebud• Mental Health services at Frankston, Hastings and

Rosebud • Community Health services based at Frankston, Rosebud,

Mornington and Hastings.

Peninsula Health staff continued to provide quality patient-centred care to more people than ever before. Our services have been enhanced and expanded, and a small financial surplus, is being reinvested in equipment.

Presentations to the Emergency Departments at Frankston and Rosebud Hospitals continued to grow, with 88,331 people attending our two emergency departments – an increase of 4,250 attendances compared to the same period last year.

Mental Health, Community Health and Sub-Acute services also continued to see more patients and performed well against state-wide targets, with many services exceeding expectations.

Capital Works

There was substantial progress on capital projects worth more than $90 million.

Projects successfully concluded during the year included:

• At Frankston Hospital, the $81 million capital project to build three new wards and a new Emergency Department was completed on time and under budget. The new Emergency Department is significantly larger with improved workflow that enables patients to receive quicker treatment, while the new wards offer an improved patient care environment that is equipped with state-of-the-art technology.

• In October 2014, the Government announced that the surplus from the Frankston Hospital redevelopment project could be retained by Peninsula Health and be reinvested into the construction of a Hybrid DSA Operating Theatre and an upgrade of the Frankston Hospital kitchen. Both of these projects are well advanced with the new operating theatre scheduled to open in February 2016.

• A $500,000 expansion to the Rosebud Hospital Dental Services provided two additional dental chairs, improved patient amenities, waiting room and staff administrative areas.

• Also completed at Rosebud following a successful community fundraising program which raised $1.6 million was the installation of a CT scanner.

• A $700,000 refurbishment of Palliative Care Services at Golf Links Road made possible by a major bequest will comprise a new bariatric bedroom, expanded family meeting and interview room, and an expanded administration area.

New Emergency Department

Peninsula Health’s landmark $81 million expansion at Frankston Hospital, was officially opened in February by Minister for Health the Hon Jill Hennessy. The expansion will inject a major health boost to one of the busiest Emergency Departments in Victoria.

The opening of this new building marked an important milestone in Frankston Hospital’s history. The last five years have seen more than $150 million invested in capital works for critical care, emergency medicine, and general medical services. Known as Frankston Stage 3, the new Building A comprises a new Emergency Department, a Coronary Care Unit and two general wards. The new four-storey addition to the hospital was delivered on time and under budget.

The development at Frankston Hospital was designed to address the acute health needs across the fast-growing Mornington Peninsula region. Not only are the facilities and equipment amongst the best available, the quality of care from a patient’s perspective remains at the heart of this project. The Emergency Department comprises 49 general treatment cubicles as well as specialist treatment rooms and consultation areas.

Advanced Technology for the new Emergency Department

Advances in technology are changing the way Emergency Services are offered to patients. The new Emergency Department at Frankston Hospital is more than double the size of the previous department, has its own separate radiology facilities including CAT scan, and features computers at every bed and treatment area.

Tablet-style computers and swipe-card access assists medical staff in monitoring the patient’s health at the touch of a button. New digital security measures ensure multiple staff can access this information while patient confidentiality is respected.

The resuscitation and treatment areas also feature mobile pendants with examination lights, cardiac monitors, and power and gas supply for critical care equipment. These highly sophisticated devices can be moved around the patient and enable more staff to access the patient at any time.

Clinical Services Plan

The Strategic Clinical Services Plan 2015-2025 was finalised earlier this year. The plan is designed to shape the services we provide to Frankston and the Mornington Peninsula over the next 10 years. The identified gaps in clinical service capability are being addressed through partnerships with Monash Health in the area of dermatology, the Eye and Ear Hospital for ophthalmology and Alfred Health for neurosurgery. Peninsula Health has also expanded its regional profile with the rotation of two interns to Bass Coast and the establishment of a referral pathway to improve the care of acute cardiac patients.

Introduction

Peninsula Health Annual Report 2015

Celebrating Research

Peninsula Health’s official research recognition program was launched in November 2014. Celebrating Research recognises the valuable research undertaken by clinicians across the Mornington Peninsula at the Peninsula Health campuses at Frankston, Mornington and Rosebud in partnership with Monash University.

The joint appointment of Dr Virginia Plummer between Monash University and Peninsula Health has been integral to the linking of research projects with facilities and clinicians. As a teaching health service, links with Monash University have contributed to the growth of our research program through the relationship we have held for more than 20 years.

Since 2007, more than 550 clinicians and students have participated. This relationship will be further enhanced following the endorsement by the Board for the development of a dedicated Research Strategy. The Research Strategy was completed in 2015 and a Professor of Medicine position has been advertised to lead the Research Strategy over the next five years. Ensuring tomorrow’s leading clinicians have the resources and facilities to undertake research into the key areas of care for residents is a key priority for Peninsula Health.

Reconciliation Action Plan

In October 2014, Peninsula Health launched a major plan to address the factors that contribute to poor health outcomes for Aboriginal and Torres Strait Islander people on the Mornington Peninsula.

The Reconciliation Action Plan is an important collaborative document, which outlines how the organisation will make healthcare for Aboriginal and Torres Strait Islander peoples more accessible. Frankston Hospital has the highest percentage (42%) of all Aboriginal and Torres Strait Islander hospital admissions in the Southern Metropolitan Region. Frankston and Rosebud hospitals also have the highest percentage (56%) of Aboriginal and Torres Strait Islander presentations to an emergency department in the region. Considerable actions have been achieved such as establishing two Aboriginal Traineeship positions, building staff skills through broad cultural awareness training, more visibly acknowledging our Aboriginal history (through art, flags, plaques and Aboriginal celebrations), supporting the Bay Mob Indigenous Health and Education Expo, and strengthening our service delivery to Aboriginal clients.

Inaugural Award Recognises Physiotherapist

Peter Hough, was the inaugural winner of the Noosh McGrath Excellence in Physiotherapy Award. This Peninsula Health award established in 2014 recognises the dedication and commitment of the late Noosh McGrath, a senior neurological physiotherapist at Golf Links Road.

Peter, who has worked at Peninsula Health for 27 years, is a Senior Inpatient Physiotherapist at the Mornington Centre. He received the award for his commitment to patient-centred care, excellence in physiotherapy service provision, and patient and staff advocacy.

Volunteers Give Decades Towards Building a Healthy Community

Twenty-one people across the Mornington Peninsula with a combined 325 years of serving the community were recognised at the Peninsula Health Volunteer Appreciation event in May. Two volunteers celebrated 25 years of service to Peninsula Health. Norman Summers, a member of the Men’s Auxiliary and a regular at the Frankston Integrated Health Centre help desk, as well as Frankston Hospital Pink Lady Margaret Jay were the longest serving volunteers.

Peninsula Health has a strong volunteer base of more than 750 people giving their time and energy to make a positive difference. More than 400 volunteers attended Peninsula Health’s Volunteer Appreciation event, held annually for National Volunteers Week.

Peninsula Health Volunteer Wins 2015 Minister for Health Volunteer Award

Julian Conlon, Chair of Peninsula Health’s Gay Lesbian Bisexual Transgender Intersex and Queer (GLBTIQ) Community Advisory Group, has won the Outstanding Individual Achievement by a Volunteer: Supporting Diversity Award at the 2015 Minister for Health Volunteer Award.

Ms Nancy Hogan Ms Sue WilliamsChairperson Chief ExecutivePeninsula Health Peninsula Health24 August 2015 24 August 2015

Introduction


Responsible Bodies DeclarationIn accordance with the Financial Management Act 1994, we are pleased to present the Report of Operations for Peninsula Health for the year ending 30 June 2015.

Ms Nancy Hogan Ms Sue WilliamsChairperson Chief ExecutivePeninsula Health Peninsula Health24 August 2015 24 August 2015

Our Health ServiceOur Vision

Building on our strong foundations of teamwork and continuous improvement we will be a recognised leader in the provision of person-centred care.

Our Mission

Building a healthy community, in partnership.

Our Values

Service

Caring for those in need; make a difference; being responsive; person-centred; listening.

Integrity

Open; honest; just and reasonable; ethical.

Compassion

Caring for our clients, patients, carers and families, and each other; showing empathy; being non-judgemental; accepting; taking time; showing humility.

Respect

Walking in the shoes of others; recognising individual needs; showing tolerance; treating others as equals; acknowledging worth.

Excellence

Giving our best; striving for the best results; putting in that little extra; aiming for better practice; being innovative; professional; providing quality services.

Objectives and Functions of Peninsula HealthPeninsula Health is one of 15 metropolitan public health services in Victoria. We embrace an integrated and collaborative view of health, working with community and service partners to promote health and healthy lifestyles and to plan for the future needs of the local community. It was formerly reconstituted on 1 July 2008 to amalgamate the previous Peninsula Health (originally constituted as a public health service in 2000) and the former Peninsula Community Health Service.

Peninsula Health is accountable to the:• Minister for Health• Minister for Ageing• Minister for Mental Health• Minister for Community Services• Minister for Disability Services and Reform.

Peninsula Health comprises:• Acute Care at Frankston Hospital and Rosebud Hospital• Sub-Acute Care, Rehabilitation, Palliative Care and

Residential services at Mornington, Seaford, Frankston and Rosebud

• Mental Health services at Frankston, Hastings and Rosebud

• Community Health services based at Frankston, Rosebud, Mornington and Hastings.

Peninsula Health is a major teaching centre, and works closely with Monash University and Deakin University to train health professionals in medicine, nursing and allied health. We also have links with other universities in postgraduate studies.

Our Catchment

The Frankston-Mornington Peninsula (F-MP) catchment is a mixed urban and semi-rural area of about 850 square kilometres stretching from Seaford, Carrum and Frankston, about an hour’s travel from the Melbourne CBD, south across the Mornington Peninsula to Sorrento and Portsea at the southern tip, and Cape Shank, Point Leo and the deep water Port of Hastings in the east. The Mornington Peninsula Shire comprises small urban areas, tourist towns, rural agricultural areas and national parks across 20 postcodes, while the City of Frankston, on the eastern shores of Port Phillip Bay, is more urban and comprises five postcodes. The area is bound by sea on three sides, with a thriving tourism industry and is a desirable retirement destination. The area also includes a number of vulnerable communities characterised by low income residents, high unemployment rates and poor access to services due to the lack of public transport, and the costs of petrol and car ownership.1

Report of Operations

1 Keleher H. 2014. FMPML Population Health Profile and Comprehensive Needs Assessment. Frankston Mornington Peninsula Medicare Local, Mornington. www.fmpml.org.au


Population and Demographic Features

Peninsula Health consists of 12 main sites and close to 900 beds, two emergency departments, 24 dental chairs and more than 90 consulting spaces located across the Frankston and Mornington Peninsula local government areas.2

The population of the combined Mornington Peninsula and Frankston LGAs in 2011 was 279,621 and this is forecast to grow to 330,119 by 2026-27. Eighty-one per cent of Peninsula Health’s acute inpatients are public patients and funded by the State and Commonwealth governments.3

Peninsula Health’s catchment has some unique demographic features including:• low levels of forecast population growth and higher rates

of population ageing • a mix of wealth and extreme disadvantage • specific local indicators of disadvantage including higher

rates of vulnerable children, homelessness and family violence

• higher risk factors such as obesity and smoking• higher prevalence of chronic diseases • higher rates of injury when compared to the

Victorian average.4

High-volume Services

High-volume services provided at Peninsula Health include dental services, community health and rehabilitation services, maternity, orthopaedic, renal dialysis, chemotherapy and emergency department services. Maternity and obstetric services and orthopaedic services collectively account for 47% of all acute specialist clinics provided at Peninsula Health.5

Diverse Health Conditions

Peninsula Health emergency department performance is influenced by a range of factors. Seasonal variations impact on the health and wellbeing of elderly community members. Holidaymakers experience a range of poor health experiences, including injuries many of which are caused by drug and alcohol abuse.

The diversity of patients creates challenges in providing appropriate experiences and includes children 0-3 years, people with mental health, alcohol and drug conditions and people aged 85+.

Diverse conditions diagnosed on presentation include chest pain injuries and breaks, abdominal pain, and fainting or collapse. More than 15% of presentations are for diagnosis linked to chronic and complex conditions and 3% relate to mental health and behavioural disorders.6

Peninsula Health’s emergency departments are supported by after-hours GP services. Frankston Hospital is located on site and Rosebud Hospital is nearby.

Services Provided by Peninsula HealthWorking in partnership with other key organisations and our community, Peninsula Health is committed to providing high-quality healthcare services that are integrated, easily accessible, caring, and person centred.

For further information about the services provided by Peninsula Health, see www.peninsulahealth.org.au.

Aged Care

Advance Care PlanningAged Care Assessment ServiceCognitive, Dementia and Memory ServiceContinence ClinicFalls Prevention ServiceGeneral Rehabilitation Review ClinicGeriatric Evaluation & Management Inpatient ServicesGeriatric MedicineGeriatric Medicine Clinic Restorative CareTransition Care Program

Allied Health

AudiologyDiversional TherapyExercise PhysiologyInterpreters NeuropsychologyNutrition & DieteticsOccupational TherapyPhysiotherapyPodiatryPsychologySocial WorkSpeech Pathology

Clinical Systems (electronic medical record)

Community Health

Aboriginal & Torres Strait Islander HealthACCESS Service Addiction MedicineAged Care ServicesAlcohol and Other Drugs ServicesChildren’s ServicesChronic Disease ServicesCommunity KitchensCounsellingDental ServicesDiabetes EducationDieteticsDomiciliary Care Services (Physiotherapy, Occupational Therapy, Speech Pathology, Carpentry)Exercise PhysiologyFamily Violence ServicesHealth PromotionHome Care Packages Homeless OutreachHospital Admission Risk Program (HARP)Needle Syringe ProgramNutritionOccupational TherapyPhysiotherapyPlanned Activity Groups


2 Peninsula Health, 2015 Peninsula Health Strategic Clinical Service Plan 2015-2026.3 Ibid.4 Ibid.5 Ibid.6 Ibid.


PodiatryPost Acute CareRegional Communication Service (Adult)Residential In-reachResponse Access and Discharge Service (RAD)Self Help and Support GroupsSexual HealthSmoking CessationSupporting Vulnerable Victorians in Residential ServicesVolunteer ServicesYouth Services

Community Participation

Continuing Education and Development Unit

Nursing Research

Emergency Medicine

Frankston Hospital Emergency DepartmentRosebud Hospital Emergency Department Emergency Department Short Stay Unit

Medical Services

Acute Care of the ElderlyAmbulatory ServicesCardiology (Heart)Clinical Haematology (Blood)Diabetes EducationEndocrinology & Diabetes (Hormones)Gastroenterology (Stomach and Intestines)General MedicineHospital in the Home (HITH)Infectious DiseasesIntensive Care MedicineMedical Oncology (Cancer)Neurology (Brain and Nerves)Pain MedicinePalliative MedicineRenal Medicine (Kidneys)Respiratory & Sleep MedicineRheumatology

Mental Health Services

Consultation Liaison ServiceEnhanced Crisis Assessment Treatment Team and Psychiatric TriageMental Health Hospital Admission Reduction Program (MH-HARP)

AgedAged Acute In-Patient UnitAged Persons Mental Health TeamCarinya Residential Aged Care Unit Intensive Community Treatment Team

AdultAcute Inpatient UnitAdult Prevention & Recovery Care Service (APARC)Community Care UnitCommunity Mental Health Service

Youth (16 to 25 years)Youth Mental Health TeamYouth Prevention & Recovery Care Service (YPARC)

MEPACS Personal Alarm Call Service

Paediatrics (Children’s Health)

Child & Adolescent HealthNeonates (Newborn babies)Home & Community CareAsthma EducationPaediatric Integrated Cancer Service

Pathology, Haematology and Microbiology

Radiology and Nuclear Medicine

CT (Computerised Tomography)FluoroscopyInterventional RadiologyMRI (Magnetic Resonance Imaging)Nuclear MedicinePlain FilmUltrasound

Rehabilitation

Elective Orthopaedic Pathways ProgramMovement Disorders ProgramNeuro Review ClinicProsthetics ClinicRehabilitation Inpatient Services Spasticity ClinicStroke Detours ProgramChronic Pain Management ServiceCommunity Rehabilitation Programs

Surgical and Anaesthetic Services

Anaesthesia & Perioperative MedicineGastrointestinal EndoscopyGeneral SurgeryMaxillo Facial SurgeryOrthopaedic SurgeryOtolaryngology and Head & Neck Surgery (Ear, Nose and Throat)Plastic & Reconstructive Surgery (Skin)Skin Integrity – Wound CareStomal TherapyBreast careThoracic Surgery (Chest)Urology (Bladder and Kidneys)Vascular Surgery (Veins and Arteries)

Women’s Health

GynaecologyObstetrics

Services not provided by Peninsula Health

Cardiac SurgeryChild PsychiatryDermatologyMajor TraumaNeonatal & Paediatric Intensive Care Neuro SurgeryOphthalmologyOrgan TransplantationSpinal RehabilitationSpinal Surgery




Governance and Organisational StructureBoard Governance

Peninsula Health’s Board of Directors is appointed by the Governor in Council on the recommendation of the Minister for Health. Directors are usually appointed for a term of three years, with members eligible to apply for reappointment. The Minister for Health requires the Board to develop a Strategic Plan for the Health Service and to ensure accountable and efficient provision of health services.

The Board of Directors is responsible for the governance and strategic direction of the Health Service and is committed to ensuring that the services provided by Peninsula Health comply with the requirements of the Health Services Act 1988 and the mission, vision and goals of the service.

During 2014/15, the Minister for Health and the Chair of Peninsula Health signed a Statement of Priorities of agreed funding, activity and service performance.

The Board held 11 meetings in the financial year 1 July 2014 to 30 June 2015. At these meetings, members of the Peninsula Health Executive regularly presented reports on their areas of responsibility.

Board of Directors as at 30 June 2015

Ms Nancy Hogan BA (Hons) Poli Sci GradDipRehab Studies MBA FACHSE AAICD

Chairperson

Appointed 1 July 2008

Executive Director Health and Aged Care Galante Business Solutions; former CEO of public, not-for-profit organisations and private hospitals and aged care organisations; former President of Aged and Community Care Australia and Australian College of Health Service Executives; former Board Director HESTA and Industry Funds Management Advisory Board; current Board Chair Melbourne General Practice Network.

Mr Michael Carroll BBus (Economics and Management) DipFS (Financial Planning)


Senior Financial Advisor Perpetual Private to its high net worth clients; past Board member Big Brothers Big Sisters (Melbourne) Incorporated; specialist in aged care, estate and philanthropic planning issues; and advisor on structured giving options.

Professor Henry Ekert AM MBBS MD FRACP


Clinical paediatric haematologist/oncologist; former Director Division of Medicine, Royal Children’s Hospital; Past President Clinical Oncological Society of Australia; advisor on haematology to Commonwealth Department of Health and Ageing.

Mr Geoffrey Rankin BBus (Accountancy) FCPA


Former CEO CPA Australia; former CEO Australian Leisure and Hospitality Group; senior executive experience in listed companies and not for profit sector.

Mr Michael Tiernan LLB


Consultant Legal Management and OHS, Rehabilitation and Risk Management; Legal Practice management consultant; Member Law Institute of Victoria; nationally accredited Specialist Mediator Law Institute of Victoria; Member Law Institute of Victoria WorkCover Committee and Accident Compensation Committee; Chair Law Institute of Victoria Practice Management Committee.

Mr Jonathan Tribe BA MAdmin


Former Chief Executive Western Hospital and Royal Melbourne Hospital; former Managing Director Delaware North Companies International; former CEO Southern Metropolitan CemeteriesTrust; currently Chief Operating Officer Victoria University.

Ms Erika Wilke BA GradDipSoc DipFinPlanning CFP®


Director PrimeCare Financial Planning; experience in aged care sector; co-author Retirement Living and Aged Care – the Australian Master Financial Planning Guide.

Dr Laurie Warfe MBBS DRANZCOG FRACGP


Chair Victorian Board of the Medical Board of Australia; member of panel of examiners for Royal Australian College of General Practitioners; Honorary Colonel Royal Australian Army Medical Corps; past President Frankston Sunrise Rotary Club.

Ms Bronwyn Lewis RN BA MA Admin MAICD MFIA

Appointed 1 October 2014

General Manager, Strategic Change and Development Carers Australia, experience in administration and marketing across government, not-for-profit and private sectors.



Board Committees as at 30 June 2015

Nine committees provide specialist advice and support to the Board. The committees also assist the Board and senior management to meet all statutory, regulatory and operational requirements for the Health Service.

Finance & Resources Committee

The Finance & Resources Committee reviews all financial matters, management information and internal control systems, and considers and makes recommendations to the Board on major and minor works.

Board members: Geoffrey Rankin (Chair), Michael Carroll, Nancy Hogan, Jonathan Tribe, Erika Wilke.

Audit & Risk Committee

The Audit & Risk Committee meets quarterly and at any other time as requested by the Peninsula Health Board, any Committee member, the internal auditor or the Auditor-General. The Committee liaises with the internal and external auditors, reviews and approves audit programs and evaluates the adequacy and effectiveness of the overall governance framework operating within Peninsula Health. The Committee receives reports via the compliance monitoring framework and monitors all risk management activities for Peninsula Health.

Board members: Jonathan Tribe (Chair), Geoffrey Rankin, Bronwyn Lewis.

Quality & Clinical Governance Committee

The Quality & Clinical Governance Committee meets regularly to monitor outcomes and improve the quality and effectiveness of the Health Services provided by Peninsula Health. The Committee is also responsible for the clinical risk management activities of Peninsula Health, which are integrated with its quality systems.

Board members: Michael Tiernan (Chair), Bronwyn Lewis, Henry Ekert, Nancy Hogan, Laurie Warfe.

Medical Staff Association / Board Executive

The Board Executive considers clinical matters brought forward through the Chairman of the Medical Staff Association. Meetings are held quarterly between the Board Executive and the Chair of the Medical Staff Association, with the Deputy Chair Medical Staff Association, the Chief Executive and the Executive Director Medical Services Peninsula Health in attendance.

Board members: Nancy Hogan (Chair), Henry Ekert, Michael Tiernan.

Human Research Ethics Committee

The Human Research Ethics Committee considers and advises the Board of Peninsula Health on all ethical matters arising from relevant research activity. It considers the ethical and scientific aspects of research projects submitted for approval and monitors approved research, through regular reports submitted by researchers in relation to ongoing and completed projects.

Board members: Laurie Warfe (Chair), Henry Ekert.

Community Advisory Committee

The Community Advisory Committee brings the voices of the community and consumers into the decision-making processes of Peninsula Health to ensure that the Health Service develops services that are responsive to our diverse community. Members provide information and advice on needs, demands, and service developments from a community perspective. The Committee is supported by 13 Community Advisory Groups, including the Cultural and Linguistic Diversity Community Advisory Group and the Disability Community Advisory Group.

Board members: Michael Carroll, Bronwyn Lewis.

Primary Care & Population Health Committee

The Primary Care & Population Health Committee assists in creating effective linkages between the Health Service and other primary care providers to coordinate the delivery of care in the community. The committee oversees catchment-wide primary care coordination through implementation of The Peninsula Model.

Board members: Michael Tiernan (Chair), Erika Wilke.

Remuneration Committee

The Remuneration Committee meets as required to review performance and determine remuneration of executive management.

Board members: Nancy Hogan (Chair), Geoffrey Rankin, Michael Tiernan.

Senior Medical & Dental Staff Appointments Committee

The Senior Medical & Dental Staff Appointments Committee makes recommendations to the Board of Directors in relation to the appointment of senior medical or dental staff.



Dr Fergus KerrExecutive Director Medical Services

Ms Jan ChildChief Operating Officer

Mr Brendon GardnerChief Operating Officer

Board of Directors

Chief ExecutiveMs Sue Williams

Executive Directors

Mr David AndersonExecutive Director Finance

Mr Simon BrewinExecutive Director Planning and Infrastructure

MedicalDr Fergus Kerr

NursingMs Jan Child

Allied HealthMs Jan Child

LegalMr David Goldberg

Corporate and Community RelationsMr Andrew Heslop

Professional issues

Ms Kelly GilliesExecutive Director Human Resources

Peninsula HealthOrganisational Structure

as at 30 June 2015

Senior OfficersMs Sue Williams BBus MBA

Chief Executive Officer (CEO)

Ms Williams commenced as CEO in August 2014 and has responsibility for leading the development and execution of Peninsula Health’s long-term strategy and organisational goals.

Executive Directors

Dr Fergus Kerr MBBS FACEM FRACMA MPH

Executive Director Medical Services

Dr Fergus Kerr commenced as Executive Director Medical Services on 11 May 2015.

Dr Kerr’s operational role includes Medical Workforce; Medical Education; Simulation Centre; Library; Pharmacy; Radiology; Pathology; Research; and GP Liaison.

His strategic responsibilities include the Peninsula Clinical School and the Peninsula Health Medical Workforce Plan.

Ms Jan Child RN GradDip (Behavioural Sc) MSc (HlthAdmin) GAICD

Chief Operating Officer

Ms Child’s operational role includes Mental Health; Aged Care; Rehabilitation; Community Health; Rosebud Hospital; Allied Health; Residential Care; Pastoral Care; Nursing Services; Palliative Care; Clinical Information System Implementation.

Her strategic responsibilities include Primary Care and Population Health; Community Participation.

Mr Brendon Gardner BAppSc (HIM) MHA UNSW AFCHSM

Chief Operating Officer

Mr Gardner’s operational role includes Frankston Hospital Acute Inpatient Services; Intensive Care Unit; Emergency Medicine; Medicine; Surgery; Women’s, Children’s & Adolescent Health; Outpatients; Health Information Services; Management Information Services.

Mr David Anderson BCom MCom FAHSFMA GAICD

Executive Director Finance

Mr Anderson’s operational role includes Finance; Payroll; Printing; MEPACS; Supply.

His strategic responsibilities include Risk Management and Strategic Procurement.

Mr Simon Brewin MBL Grad Dip HSM Grad Cert HE BBus FCHSM

Executive Director Planning, Infrastructure and Information Technology

Mr Brewin’s operational role includes Planning; Infrastructure; Capital Works; Facilities Management; Support Services; Information Technology & Communications; Transport; Emergency Management.

His strategic responsibilities include the development and implementation of Peninsula Health’s Strategic and Clinical Service Plan.

Ms Kelly Gillies Grad Cert HR CAHRI

Executive Director Human Resources

Ms Kelly Gillies commenced as Executive Director Human Resources on 9 March 2015.

Ms Gillies operational role includes Employee Relations; HR Services; Learning and Organisational Development; Occupational Health and Safety; Employee Health and Wellbeing; and Rehabilitation and Return to Work of injured employees.

Her strategic responsibilities include Workforce Planning.



Strategic Priorities 2014-15The Victorian Health Priorities Framework 2012-2022 outlines the Victorian Government’s priorities and policy directions.

The seven priority areas in this framework are:

• Developing a system that is responsive to people’s needs • Improving every Victorian’s health status and experiences • Expanding service, workforce and system capacity • Increasing the system’s financial sustainability and

productivity • Implementing continuous improvements and innovation

• Increasing accountability and transparency • Improving utilisation of e-health and communications

technology.

Over the past year, Peninsula Health has worked towards achievement of these priorities as described in the 2014-15 Statement of Priorities agreed with the Minister for Health.

Our activities and achievements against these priorities are outlined as follows.

Priority Action Deliverable Progress

Developing a system that is responsive to people’s needs.

Develop an organisational policy for the provision of safe, high-quality end-of-life care in acute and subacute settings, with clear guidance about the role of, and access to, specialist palliative care.

Further expand the ACP model to increase the number of clinicians who complete an ACP.

Completed and ongoing.

Clinicians now trained in MEACAS, TCP, Sub-Acute Inpatients and HARP. Training also provided to General Practices, Private and Not-for-Profit Residential Care Services and HACC workers in Local Government.

Facilitate consumer led training on the Advance Care Planning and Life Prolonging Treatment policies.


Consumer stories have been effectively incorporated into staff education. Two consumers have participated in the making of a short video to promote the importance of ACP in person-centred care. The video will be incorporated in an online training module currently being developed for clinicians.

A series of talks has been delivered to five Planned Activity and Carer Support Consumer Groups on ACP.

Review and monitor metrics that evaluate policy implementation across the organisation.


The Advanced Care Planning Steering Committee regularly reviews and monitors the ACP KPI workbook. Relevant KPIs are reported up to the Executive.

Implement a formal Medical Champion role to support End-of-Life Care.


There are three medical champions who provide support in the area of end of life care. These champions work in Acute, Subacute and Hospital Admission Risk Program (HARP) / Community.

Work collaboratively with Ambulance Victoria to achieve timely transfer of patients.

Chair and convene the monthly Ambulance Liaison meetings (incorporating consumer involvement) to review and monitor performance.

Complete – meetings are held every month and are chaired by Peninsula Health.

Facilitate a joint review of AV data to compare metrics and support / improve data accuracy.

Ambulance arrival board implemented.

Implement STAT model of care within the new ED which will maintain AV off stretcher performance.

Complete.

Progress partnerships with other services to improve outcomes for regional and rural patients.

Establish a memorandum of understanding with Bass Coast Regional Health Services and Leongatha Health Service to support care of patients requiring cardiac investigations and interventions.

Referral pathways for cardiac patients established.

Engage with local service systems to support integrated client care and service continuity for people affected by mental illness.

Actively participate in the Mental Health Alliance to facilitate catchment-wide care pathways for key mental health issues.

Complete and ongoing.

The Clinical Director and Operations Director participate in Alliance executive meetings with other MH staff engaged in working groups. The Alliance has focused on catchment-wide action plans for Homelessness, Rooming Houses, Youth Suicide and Peer workforce.




Review the Mental Health Model of Care and implement recommended changes.

Completed.

The Mental Health Model of Care was evaluated and resulted in an increase in acute clinicians, decrease in recovery clinicians, and reduction of four teams to three. All changes have been successfully implemented.

Support the effective implementation of reforms to alcohol and other drug treatment services.

Deliver catchment-wide intake and assessment service for recommissioned adult AOD treatment services.

Peninsula Health has worked with its consortium partners to implement a new AOD intake and assessment service for the catchment which is a component part of the new AOD model of care. The service has performed at 111% since implementation in August, demonstrating a high demand for services. This has extended waiting times for some clients. However issues are constantly monitored and addressed though the consortium partnership.

Develop catchment-wide metrics which monitor Drug Treatment Activity Units (DTAUs).

A catchment-wide AOD Working Group continues to meet monthly to review metrics which include performance against targets, waiting times and referral flows.

Develop and implement the Alcohol and Drug Catchment Alliance to facilitate strategic planning for AOD services.

An AOD Alliance has been developed as part of the Peninsula Model, and includes multi-sectorial representation, including strong representation from PH. The Alliance has achieved a significant amount in a short space to time including delivering broad communication and education about the reforms and changes in the AOD sector.

Improving every Victorian’s health status and experiences.

Use consumer feedback to improve person and family- centred care, health service practice and patient experience.

Incorporate the Person Centred Care model as part of the Frankston Hospital Stage 3 commissioning process.


Patient and staff experience program undertaken in the commissioning of FS3, involving consumers. Nominee for 2015 Minister for Health Volunteer Awards.

Expand consumer representative roles to support direct patient and carer feedback into service delivery, and clinician training.


A model has been implemented which has expanded consumer representative roles into specific departments or wards, targeting recruitment from recent service users.

Review and enhance quality metrics to better reflect person-centred care and patient experience.


Data continues to be reported against the existing Community Participation KPIs while awaiting the release of the new DHHS consumer participation policy.

Reduce unplanned re-admissions.

Using the Dr Foster Business Intelligence system and redesign principles, continue to reduce unplanned re-admissions to below peer hospital average.

For Dr Foster we have joined focus groups for fractured neck of femur, sepsis and stroke. These groups have allowed us to look at the profiles of these groups and develop better understandings of the different groups. For the fractured NOF cohort, we have been able to drill down into this group to have a better understanding of the profile of the patient who is most likely to readmit to the Health Service.

Identify services users who are marginalised or vulnerable to poor health, and develop interventions that improve their outcomes relative to other groups, for example, Aboriginal people, people affected by mental illness, people at risk of elder abuse, people with disability, homeless people, refugees and asylum seekers.

Implement the Diversity framework as part of the Person Centred Care strategy.


Julian Conlon awarded 2015 Minister for Health Volunteer Award – Outstanding achievement by a volunteer: supporting diversity.




Implement the 2014-15 Reconciliation Action Plan.


Key areas of focus have included the MOU with Boonwurung Foundation, Cultural competence training, development of cultural policies and traineeships for Aboriginal students.Supporting events such as BayMob and NAIDOC week, strengthening our service delivery to Aboriginal clients.

Progress implementation of the 2014-2016 Disability Action Plan.


Review, re-develop and commence implementation of the 2015-2017 CALD (Cultural and Linguistic Diversity) plan.


Develop and implement strategies with primary care providers, to improve service options for homeless people.

Complete – Premier’s Award for developing an innovative and responsive approach to service provision for homeless people in the PH catchment area.

Optimise alternatives to hospital admission.

Employ an additional GP in the HARP program to provide increased clinical support and liaison to community GPs, and further reduce preventable admissions.

Completed.

Participate in Department of Health & Human Services CarePoint trial to test the effectiveness of a new integrated model of care for Victorians with chronic conditions and complex needs.

As at 30 June 2015 there were 969 patients active in the program.

Review PACER pilot and implement sustained PACER model in collaboration with Victoria Police.


PACER evaluation for Frankston complete and shows since the commencement in April 2014 the team has responded to a total of 656 events. Of the 656 events only 21 of these clients were transported to the Emergency Department under Section 351, which has resulted in a saving of 635 trips to the Emergency Department by police.

The Rosebud PACER was introduced in November 2014; the team has responded to a total of 103 events. Of the 103 events only 24 of these clients were transported to the Emergency Department under Section 351 which has resulted in a saving of 79 trips to the Emergency Department by police.

Expanding service, workforce and system capacity.

Develop and implement a workforce immunisation plan that includes pre-employment screening and immunisation assessment for existing staff that work in high risk areas in order to align with Australian infection control and immunisation guidelines.

Validate immunisation rates for key infection risks in high-risk exposure departments and improve compliance rates by 10%.

The HWC Immunisation Policy to strengthen Immunisation requirements was updated in May 2015 to include Employee Immunisation Service approval required to formally commence as a HCW. Immunisation requirements are met with Manager notification. Immunisation and testing was provided with additional clinics. May 2013-May 2015 outstanding pre-employment immunisation compliance increased to 91% with ongoing actions. May 2015 - new approval process prior to commencement with 94% compliance for all new employees.

High Risk areas catch up program – Paediatrics 80% increased 100%, Special Care Nursery 67% increased to 94%, Rosebud Emergency Nursing 27% increased to 88% and Rosebud Emergency Medical 87% increased to 94%. Maternity Inpatient Unit 17% increased to 47% with ongoing actions into 2015-2016.




Build workforce capability and sustainability by supporting formal and informal clinical education and training for staff and health students, in particular inter-professional learning.

Report to Department of Health & Human Services on the six mandatory key performance indicators which form part of the BPCLE (Best Practice Clinical Learning Environment) action plan.

Complete.

Optimise workforce productivity through identification and implementation of workforce models that enhance individual and team capacity and support flexibility.

Develop and implement revised workforce model for Frankston Hospital Stage 3 to enhance efficiency of service delivery.

Complete.

Review allocation structures and processes to enhance operational flexibility.

Complete.

Increase employment of Aboriginal people in mainstream health services in line with the strategic objectives of Koolin Balit: Victorian Government strategic directions for Aboriginal Health 2012-2022 and Karreeta Yirramboi workforce participation targets.

Develop and implement local work area training for Managers and teams who employ Aboriginal staff.

Complete.

Promote opportunities and identify positions across Peninsula Health departments that can be provided for Aboriginal Apprenticeship and Traineeships, including School Based programs.

Complete.

Review and update relevant staff related policies, including leave policies, to ensure they are culturally sensitive to, and meet the needs of Aboriginal employees.

Complete.

Increasing the system’s financial sustainability and productivity.

Identify and implement practice change to enhance asset management.

Further develop the Peninsula Health Five-year Asset Management Plan to prioritise capital investment for replacement medical equipment, infrastructure and ICT.

Complete – rolling five-year plan updated annually.

Implement a centralised equipment store at FH aimed at consolidating and improving utilisation and tracking of shared medical equipment.

In progress – business case to be reviewed.

Implementing continuous improvements and innovation.

Develop a focus on ‘systems thinking’ to drive improved integration and networking across health care settings.

Implement the consultation Neurosurgical Service with Alfred Health.

Complete – MOU has been signed, and commences in the 2015-16 financial year.

Explore opportunities for development of a new model for Thoracic Surgery and services for long term follow up of lung transplant recipients with Alfred Health.

In progress – Thoracic surgery commenced, transplant still to be negotiated.

Drive improved health outcomes through a strong focus on patient-centred care in the planning, delivery and evaluation of services, and the development of new models for putting patients first.

Implement the ‘productive series’ re-design methodology across the organisation.

Ongoing – rolled out to 12 units across the organisation.

Implement the capacity building program as part of the Person-Centred Care strategy.

Complete.

Develop and implement consistent Person-Centred Care strategies across the organisation (including patients and carers as key members of the care team, hourly rounding, patient initiated escalation, patient directed visitation).

In progress – survey of consumers involved in clinical handover being evaluated.

Implementation of the Commonwealth Government system, a centralised audit database, to enhance monitoring, reporting and the evaluation of the safety and effectiveness of clinical practice.

C-Gov implementation in progress.




Increasing accountability and transparency.

Undertake annual board assessment.

Board assessment completed by June 2015.

Complete.

Demonstrate strategic focus and commitment to aged care by responding to community need as well as the Commonwealth Living Longer Living Better reforms.

Progress partnerships with external service providers leveraging from existing capabilities of the Mount Eliza Personal Alarm Call Service (MEPACS).

In progress – due diligence currently underway for a potential Joint Venture with a private provider.

Commence heart failure study in collaboration with CSIRO and Meditec.

In progress.

Develop service models to support elderly clients with chronic diseases.

Falls and COAD service models to be implemented in February 2016.

Improving utilisation of e-health and communications technology.

Trial, implement and evaluate strategies that use e-health as an enabler of better patient care. Utilise telehealth to better connect service providers and consumers to appropriate and timely services. Ensure local ICT strategic plans are in place.

Develop and submit a business case to progress the implementation of EMR through:• implementation of a Clinical Document

Management system• a medical device interface with the

clinical system, and • a system of voice recognition for

clinician record taking.

Business case completed and investigating funding options.

Deploy an Emergency Department Management Information System (EDIS) with associated electronic workflows and clinical documentation within the Emergency Department at Frankston Hospital

Complete.

Refresh the Peninsula Health ICT Strategic Plan.

Completed.

Upgrade ICT storage, backup and site recovery systems to improve disaster recovery response.

Complete.

Upgrade core infrastructure to enable a platform for future development of tele-health within and outside Peninsula Health.

In progress.

Financial Summary2014-15$000

2013-14*$000

2012-13$000

2011-12$000

20010-11$000

Total revenue 485,459 463,715 441,142 420,956 401,140

Total expenses 484,146 462,700 439,657 419,782 401,110

Net result for year (from continuing operations before Capital and Specific Items)

1,313 1,015 1,485 1,174 30

Retained surplus/(accumulated deficit) 54,259 50,072 7,510 9,368 9,195

Total assets 442,679 440,336 372,490 361,285 351,788

Total liabilities 126,038 127,326 112,299 100,133 85,305

Net assets 316,641 313,010 260,191 261,152 266,483

Total equity 316,641 313,010 260,191 261,152 266,483

Financial CommentaryPeninsula Health’s financial performance in 2014-15 was in line with financial targets set for the year, with an operating surplus (recorded before discontinued operations, capital income and depreciation) of $1,313,000. The operating surplus enabled capital items for the Health Service to be funded.

In 2014-15, in comparison to the previous financial year:

• total revenue increased to $485.5 million from $463.7 million• total assets rose by $2.3 million to $442.7 million• liabilities decreased by $1.3 million to $126.0 million• equity, being the difference between assets and liabilities,

increased by $3.6 million to $316.6 million.

Ex-gratia Payments

Ex-gratia payments of $25,110.65 were made by Peninsula Health during 2014-15.

Looking Ahead

Peninsula Health’s financial sustainability is critical to the ongoing provision of quality services.

* Comparative information for 2013-14 has been updated to account for the discontinued operation consistent with comparative information presented in the Financial Statements.



WIES1 Activity Performance Target 2014-15actuals

WIES (public and private) performance to target 2

100% 100%

Operating Result Target 2014-15actuals

Annual operating result ($m) $0.5 m $1.313 m

Emergency Care – Frankston Hospital 2014-15actuals

Total presentations to Emergency Department 67,576

Acuity (Triage Category 1 – 3 = most urgent presentations)

69%

Emergency Care – Rosebud Hospital 2014-15actuals

Total presentations to Emergency Department 20,870

Acuity (Triage Category 1 – 3 = most urgent presentations)

47%

Target 2014-15actuals

Percentage of operating time on hospital bypass

3% 2.10%

Percentage of ambulance transfers within 40 minutes

90% 89%

NEAT – percentage of emergency presentations to physically leave the emergency department for admission to hospital, be referred to another hospital for treatment, or be discharged within four hours

81% 57%

Number of patients with length of stay in emergency department greater than 24 hours

0 0

Percentage of Triage Category 1 emergency patients seen immediately

100% 100%

Percentage of Triage Category 1 to 5 emergency patients seen within clinically recommended times

80% 84%

Target 2014-15actuals

Percentage of operating time on hospital bypass

3% 0.40%

Percentage of ambulance patients transferred within 40 minutes

90% 96%

NEAT – Percentage of emergency presentations to physically leave the emergency department for admission to hospital, be referred to another hospital for treatment, or be discharged within four hours

81% 83%

Number of patients with length of stay in emergency department greater than 24 hours

0 0

Percentage of Triage Category 1 emergency patients seen immediately

100% 100%

Percentage of Triage Category 1 to 5 emergency patients seen within clinically recommended times

80% 86%

Cash management Target 2014-15actuals

2013-14actuals

Creditors (days) < 60 days 44 34

Debtors (days) < 60 days 37 41

Net movement in cash balance ($m)

($6.081 m) $16.144 m

Performance PrioritiesFinancial Performance

Access Performance

1. WIES is a Weighted Inlier Equivalent Separation.2. WIES data as reported in this publication are modelled as at 24 July 2015.

Final WIES results are normally completed in September.

Elective Surgery Target 2014-15actuals

NEST – Percentage of Urgency Category 1 elective surgery patients treated within 30 days

100% 100%


88% 68%


97% 91%

Number of patients on elective surgery waiting list as at 30 June 2015

1,400 1,821

Number of Hospital Initiated Postponements (HiPs) per 100 scheduled admissions

8% 4.5%

Number of patients admitted from elective surgery waiting list – quarter 1

1,663 1,689


1,635 1,677


1,650 1,741


1,652 1,742

TOTAL 6,600 6,849

Peninsula Health



Critical Care Target 2014-15actuals

Adult ICU number of days below the agreed minimum operating capacity

0 0

Quality and Safety Target 2014-15actuals

ICU central line associated blood stream infections (ICU CLABSI)

No outliers No outliers

Health service accreditation Full compliance

Full compliance

Residential aged care accreditation Full compliance

Achieved

Cleaning standards (overall) Full compliance

Full compliance

Cleaning standards (AQL-A) 90% 94%

Cleaning standards (AQL-B) 85% 96.2%

Cleaning standards (AQL-C) 85% 96.2%

Healthcare worker immunization – influenza

75% Not achieved 65.6%

Submission of data to VICNISS Full compliance

Full compliance

Healthcare associated infection surveillance

No outliers

Hand Hygiene (rate) – quarter 2 75% Achieved 76%



SAB* rate per occupied bed days < 2/10,000 Achieved

SAB 0.50

SAB MRSA 0.2

Victorian Healthcare Experience Survey** (January – June 2015)

Full compliance

Full compliance

Patient Safety Culture 80% 89%

* SAB is staphylococcus aureus bacteraemia.** The Victorian Hospital Experience Measurement Instrument succeeded the Victorian

Patient Satisfaction Monitor as the instrument for measuring patient experience.

Maternity Target 2014-15actuals

Women offered prearranged postnatal care

100% 100%

Mental Health Target 2014-15actuals

Mental Health 28 day readmission rate (percentage)

14% 15%

Adult Mental Health Post-discharge follow-up rate (percentage)

75% 89.8%

Adult Mental Health Seclusion rate per occupied bed days

<15/1,000 0.45

Aged Mental Health 28 day readmission rate (percentage)

14% 7.87%

Aged Mental Health Post-discharge follow-up rate (percentage)

75% 86.68%

Aged Mental Health Seclusion rate per occupied bed days

<15/1,000 0

Sub-Acute and Non-Acute Admitted 2014-15actuals

Rehab Public – weighted bed days 24,639

Rehab Private – weighted bed days 10,155

Rehab DVA – weighted bed days 2,067

GEM Public – weighted bed days 26,141

GEM Private – weighted bed days 13,181

GEM DVA – weighted bed days 4,584

Palliative Care Public – weighted bed days 5,015

Palliative Care Private – weighted bed days 2,033

Palliative Care DVA – weighted bed days 291

Transition Care – bed days 15,733

Transition Care – home days 4,808

Type of WIES 2014-15actuals

WIES Public 41,687

WIES Private 8,368

Subtotal WIES (Public and Private) 50,055

WIES DVA 1,221

WIES TAC 296

WIES TOTAL 51,572

Activity and FundingFunding Type

Activity Achievement



Aged Care 2014-15actuals

Residential Aged Care – bed days 16,655

Home & Community Care Program (HACC) – hours of service

70,743

Labour Category

JUNECurrent month

FTE

JUNEYTD FTE

Labour category

2014 2015 2014 2015

Nursing 1,545.39 1,567.54 1,518.27 1,543.31

Administration & Clerical

499.40 502.2 492.01 498.15

Medical Support 311.84 313.5 302.92 302.36

Hotel & Allied Services

358.94 358.23 361.26 369.78

Medical Officers 55.15 60.46 52.09 56.68

Hospital Medical Officers

264.67 282.75 262.95 274.48

Sessional Clinicians

67.12 69.28 63.67 67.51

Ancillary Staff (Allied Health)

363.23 363.01 352.62 359.51

Total 3,465.72 3,516.97 3,405.79 3,471.78

Mental Health and Drug Services 2014-15actuals

Mental Health Inpatient – occupied bed daysAdultAgedTotal

10,2024,70814,910

Mental Health Ambulatory – contacts 108,080

Mental Health Residential – occupied bed daysCommunity Care UnitCarinya

6,3229,951

Mental Health Sub Acute – occupied bed days Adult Prevention and Recovery Care (APARC) 2,373

2,242

Primary Health

Dental Care 29,466 dental courses were provided through Community Health

Primary Health – Community Health 42,614 hours of service

Alcohol and Drug Services 5,262 hours of service

Workforce Data



Other DisclosuresBuilding Act 1993 compliance

During 2014-15, Peninsula Health complied with the building and maintenance provisions of the Building Act 1993.

Carers Recognition Act 2012

Peninsula Health takes all practicable measures to ensure that:

• our employees and agents have an awareness and understanding of the care relationship principles

• people who are in care relationships and who are receiving services in relation to the care relationship from the care support organisation have an awareness and understanding of the care relationship principles

• our employees and agents reflect the care relationship principles in developing, providing or evaluating support and assistance for people in care relationships.

Consultancy Information

In 2014-15, Peninsula Health engaged 10 consultancies where the total fees payable to the consultants were in excess of $10,000 (exclusive of GST) per consultancy, with a total expenditure of $463,321 (exclusive of GST).

In 2014-15, Peninsula Health engaged 10 consultancies costing less than $10,000 per consultancy (exclusive of GST), with a total expenditure of $42,156 (exclusive of GST).

Contracts

During 2014-15, Peninsula Health did not enter into or complete any contracts under the Victorian Industry Participation Policy Act 2003 guidelines other than those reported on behalf of Peninsula Health by the Department of Health & Human Services.

Environmental Performance

Peninsula Health is committed to reducing its environmental impact while delivering high-quality healthcare. An Environmental and Sustainability Policy, part of our ongoing Environmental and Sustainability initiative, is linked to the Health Service’s Strategic Plan.

Our aim is to reduce greenhouse gas emissions and reduce our reliance on natural resources. Key objectives and targets focus on improving our environmental performance, and we monitor and report on all initiatives.

Commitment to Environmental and Sustainable Practices

The Executive Director of Planning, Infrastructure and IT oversees the Environmental and Sustainability Program. This year Peninsula Health’s Environmental Management Plan was reviewed and updated to reflect our achievements to date and to confirm ongoing environmental sustainable activities for the next 12 months. The Environmental Management Plan will be made available via the Peninsula Health Website in 2015.

Consultant Purpose of Consultancy Total approved project fee (ex GST)

Expenditure 2014/15 (ex GST)

Future expenditure (ex GST)

Improvement Resources Pty Ltd Fleet Management Consultancy $94,500 $94,500 0

Takac and Associates Project Consultant Works – Mepacs $179,400 $179,400 0

Hive Legal Project Consultant Works – Mepacs $32,250 $32,250 0

Paxton Consulting Pty Ltd Project Consultant Works – Pathology Procurement

$26,146 $26,146 0

Capital Insight Project Consultant – MEC Project $23,550 $23,550 0

KPMG Project Consultant Works – Pathology Tender Analysis

$20,693 $20,963 0

RSM Bird Cameron Project Consultant Works – Pathology Tender Analysis

$19,200 $19,200 0

McGrath Consulting OHS Performance & Structure Review $17,500 $17,500 0

DorsaVi ViSafe Health Worker Assessment Project $22,000 $22,000 0

Russell Kennedy Solicitors PSRACS Reallocation $27,812 $27,812 0

TOTAL $463,321



• improved internal environmental quality through better use of daylight, solar controls, external views, and location of air intakes

• emission reduction by avoiding ozone-depleting chemicals and sourcing recognised alternatives such as gases used in air conditioning and thermal insulants

• waste reduction targets to encourage and monitor recycling of construction waste.

The Facilities Management Department and ESD consultants investigate, review and implement advanced ESD measures in major capital projects in consultation with the Department of Health & Human Services and project design teams.

Smarter Transport Program

Peninsula Health encourages staff to choose sustainable travel alternatives such as walking, cycling, car-pooling or public transport while recognising public transport constraints across the Mornington Peninsula. Staff can now book Peninsula Health Myki Cards as an alternative to using Peninsula Health Fleet vehicles when travelling for work purposes.

Our Smarter Transport program is promoted to staff via the ‘Greening the Peninsula’ link on our intranet which also provides walking and riding maps, information on bike, shower and dining facilities, health tips and much more.

Energy Management, Plant and Infrastructure Initiatives

Peninsula Health aims to manage energy effectively to reduce demand on non-renewable natural resources. Efficient use of plant and replacement with more efficient high-tech options is a priority.

Frankston Hospital Stage 3 / Emergency Department (2015) building project included the following initiatives:

• replacement of chiller number 7 with high energy efficiency Powerpax chiller

• independent commissioning and building tuning• building performance displays• energy conservation with passive solar design;

doubleglazing; shade devices and efficient façade• high energy efficient HVAC (heating, ventilation and

cooling) system• LED lighting and sensor lighting• high efficiency hot water heating• hot water ring main insulation.

The Mornington Centre Stage 2 had all plant items re-tuned during 2014-15. This ensures plant operates as designed and at maximum efficiency.

Peninsula Health’s energy usage is measured against key performance indicators and is consistently within set targets as indicated below.

Reporting on our Performance

Peninsula Health continued its ongoing participation in the Department of Health and Human Services (DHHS) Environmental Data Management System project. This project will introduce a new state-wide comprehensive online environmental management system that will replace the department’s existing energy report. All Health Services be able to download reports for internal Health Services reporting, annual and statutory reporting.

Progress on achieving key performance indicators for energy and water performance is reported to the Peninsula Health Board and the Department of Health & Human Services. Emissions data is reported annually to the National Greenhouse and Energy Reporting Clean Energy Regulator and the National Pollutant Inventory via the Victorian Environmental Protection Agency.

Peninsula Health has also installed Building Performance Displays into public and staff areas in the new A Block Ward and Emergency Department at Frankston Hospital. These screens provide real-time metered water and energy consumption data while promoting our sustainable initiatives.

Continuous Improvement in Environmental Management

Our strategy for continuous improvement in environmental management includes:

Capital Works – Ecological Sustainable Design (ESD)

Our Facilities Management Department and the Capital Works ESD Consultant are guided by the DHHS Capital Works Guidelines, Building Code of Australia, Australian Standards, and International Standards ISO where applicable.

A list of practical ESD initiatives to be implemented where suitable includes:

• energy and carbon reduction strategies including solar hot water, lighting zoning and electronic building management systems with good controls

• water saving initiatives from rainwater harvesting and efficient fixtures, and air-based air-conditioning systems that capture heat energy and reject it into the environment using air instead of water

• management systems for metering, maintenance, environmental plans

• low environmental impact materials such as recycled, low volatile organic compounds and paints

• transport infrastructure including facilities that encourage bicycle use

• landscaping that encourages the use of local flora, swales, bio filtration and drought-tolerant plant species

Rate per m2 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

2014-15 0.019 0.020 0.018 0.019 0.018 0.019 0.021 0.020 0.020 0.018 0.019 0.019

2013-14 0.020 0.019 0.021 0.018 0.018 0.018 0.019 0.018 0.019 0.018 0.019 0.019

2012-13 0.024 0.024 0.022 0.023 0.023 0.023 0.024 0.023 0.025 0.019 0.020 0.019

Target 0.027 0.026 0.025 0.026 0.025 0.027 0.029 0.028 0.027 0.026 0.027 0.023

CO2 Emissions from Energy Consumed

Data for June 2015 estimated due to billing lag.



Kilolitres per m2 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

2014-15 0.085 0.084 0.074 0.079 0.069 0.076 0.079 0.078 0.069 0.063 0.071 0.070

2013-14 0.075 0.078 0.073 0.078 0.081 0.090 0.096 0.086 0.093 0.082 0.085 0.085

2012-13 0.088 0.082 0.083 0.091 0.089 0.085 0.098 0.082 0.097 0.072 0.077 0.068

Target 0.090 0.090 0.090 0.090 0.090 0.090 0.090 0.090 0.090 0.090 0.090 0.090

Fleet Fuel Data Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Total

2014-15 Monthly Fuel kL

18.8 18.1 17.6 17.7 16.8 15.2 15.8 16.4 16.9 16.1 18.3 17.1 204.8

2014-15 Fleet Emissions

42.9 41.3 40.1 40.4 38.4 34.6 36.0 37.3 38.6 36.7 41.8 38.9 467


19.1 19.6 18.6 18.9 18.6 17.8 18.2 19.8 18.3 17.0 20.5 17.8 224.2


43.6 44.7 42.5 43.1 42.3 40.6 41.6 45.1 41.7 38.8 46.8 40.6 511.4


27.4 23.3 26.1 23.3 26.1 24.4 25.7 25.8 24.4 23.0 23.5 17.3 290.3


62.5 53.2 59.6 53.2 59.5 55.6 58.5 58.9 55.7 52.5 53.5 39.4 662.1

Water Consumption

Fleet Management



Water Management

Ongoing implementation of water saving initiatives includes water efficient toilets, shower timers and harvested water storage tanks. Water saving strategies are incorporated into sustainability planning for major capital works.

• Potable water use at Frankston Hospital increased temporarily during the year due to the water tanks used for toilet flushing being replaced to improve storage capacity

• As part of the Frankston Hospital Stage 3 / Emergency Department (2015) Building Project existing water tanks were replaced to increase water storage capacity. Two by 100 kilolitre water tanks were installed to allow for A block toilets (in addition to G Block) to be supplied with harvested water

• Installation of water metres for major water users was undertaken. By providing sub-metering for hot and cold water Peninsula Health can monitor and detect leaks where they occur quickly so repairs can be undertaken. Water meters have also been installed on the new water tanks to monitor harvested water usage and allow Peninsula Health to accurately report on harvested water usage

• Peninsula Health has secured additional funding to install sub-meters to high use departments for monitoring purposes.

Fleet Management

A number of fleet management strategies have been implemented over several years which have contributed to reduced fossil fuel consumption and minimising our carbon footprint. Peninsula Health’s fuel consumption decreased by 19,589 litres in 2014-15, reducing emissions by 19.59 tonnes (8.8%) compared to the previous year.

Implemented initiatives include:

• a diesel hybrid truck is utilised for food service deliveries reducing fuel consumed by 40% over conventional vehicles

• use of diesel vehicles within the fleet including all passenger buses

• continued reduction of larger six-cylinder vehicles replaced with more fuel-efficient vehicles

• further reduction in fleet by 5% in 2014-15• continued use of a fuel-efficient Smart Car for shorter

trips with a limit of two occupants• regular scheduled servicing and correct tyre pressure• RACV Staff Training Sessions.

Many of these initiatives have also helped reduce unnecessary maintenance costs.



Sustainable Procurement

By participating in HPV (Health Purchasing Victoria), we are able to incorporate environmental specifications in our key service contracts.

• The Supply Department focuses on minimising waste, including excess packaging and packaging take-back

• Packaging waste is recycled or reused where possible • The importance of managing and minimising inventory

levels is promoted across clinical units, and they are supported with scanning technology and periodic review of inventory levels.

Information Technology Initiatives

Sustainability is a key part of evaluating the information and communication systems used across Peninsula Health. Our Information Technology Department ensures that information and communication systems are reliable and provide the functionality that a large health service requires.

• Thin Client Technology was successfully trialed at the Mornington Centre Stage 2 project and has now been implemented as part of Frankston Hospital Stage 3 /Emergency Department (2015) building project. A standard personal computer uses an average 100 watts of power while the new Thin Client technology uses only 7 watts

• Tap and go technology rolled out for printers as part of the Frankston Hospital Stage 3 / Emergency Department (2015) building project. Printing jobs will only print once staff members tap the printer with their ID card reducing unwanted print jobs and paper consumption

• The visualization of 25 servers (to date) will help save on energy and cooling costs

• Building management, nurse call, duress and CCTV security systems are integrated, reducing costs of supporting, maintaining and upgrading multiple systems

• IP Video Conferencing is used to facilitate video conference sessions between Peninsula Health sites or external organisations, reducing travel times and costs and delivering more accessible communication via a broader range of devices

• Clover ePrescribing and Electronic Ordering (Stage 3) has replaced paper-based forms for ordering results and prescribing medications

• Medical records are scanned using an electronic document management system

• All Peninsula Health Ricoh printer copiers are set up to print double-sided as standard

• All PC monitors go into power save mode automatically after 10 minutes, and the smallest possible PCs are purchased to reduce power consumption.

Waste Management

Our waste management program includes online training for staff, a waste management information booklet, a waste segregation reference card for ID lanyards, and waste usage reports which include waste costs per site by bed day.

• Peninsula Health is a member of the Victorian Green Health Round Table Group which shares environmental sustainability initiatives. Members carry out waste benchmarking each year, and this confirms that Peninsula Health consistently performs well when compared to other health services

• PVC waste is segregated in Theatre and CSSD and collected for recycling. PVC recycling includes IV fluid bags, oxygen masks and associated tubing

• We recycle polystyrene used for catering purposes and packaging purposes

• External litter and recycling waste bins have been installed as part of the new Frankston Hospital Stage 3 / Emergency Department (2015) building project to minimise litter and waste going to landfill.

Gaia Recycling Unit Initiative

To reduce greenhouse gas emissions and waste costs, a Gaia Recycling unit was installed at Frankston Hospital as part of the Stage 3 and Emergency Department Project – 2015. Organic kitchen waste including meat, dairy and green waste is placed in a sealed unit which macerates and heats the organic waste up to 100 degrees Celsius over an eight hour period. This reduces kitchen waste going to landfill by 85% by turning it into a sterile biomass that can be used as a soil amendment.

Peninsula Health has confirmed through laboratory testing that the biomass can be utilised as an organic fertiliser such as blood and bone or dynamic lifter. This product will now be used at our sites to maintain the health of our gardens.

Equal Opportunity and Code of Conduct

Peninsula Health complies with Equal Employment Opportunity principles in relation to recruitment and employment.

The Code of Conduct forms part of the employment contract and appropriate workforce conduct is reinforced by performance management and discipline processes.

Freedom of Information Act 1982

In 2014-15 Peninsula Health received 676 requests for information:

413 Access granted in full84 Access granted in part0 Access denied in full16 Withdrawn14 Not proceeded with25 No documents exist124 Not finalised as of 30 June 2015

(decision pending).

National Competition Policy

The Government’s Competitive Neutrality Policy Victoria commits public health services to apply Model 2 Competitive Neutrality policies. Model 2 includes adoption of pricing principles to take account of and reflect full cost attribution for net competitive advantages conferred by government ownership.

The aim of the policy is to ensure that where government’s business activities involve it in competition with private sector business activities, the net competitive advantages to accrue to a government business are offset. This enables the government business and the private sector business to compete fairly on the basis of their relative skills, efficiency, and other unique characteristics that make up their business.



All scheduled actions from the Manual Handling Action Plan have been implemented with project areas focusing on patient manual handling, revised Safe Operating Procedures for general manual handling activities and improvements in caring for our bariatric patients.

Emergency Management Training Program

During the year, we carried out 65 emergency evacuation exercises, an increase of 13 on the previous year and a new record for Peninsula Health. This included fire drills for the new Emergency Department and wards in the Frankston Stage 3 development.

Additionally, 2000 staff took part in emergency control organisation training including Emergency Controller and Emergency Area Warden training and fire drill participation.

Our overall fire training compliance rate for the year was 87%, under the 95% target, but 2% more than the previous financial year. Peninsula Health continues to have a very high level of emergency preparedness training.

WorkCover

During 2014-15, 77 claims were submitted by staff which is an increase on the 2013-14 figures, however still results in Peninsula Health’s second best year to date in relation to claims received. Patient Handling claims have continued to reduce from 2012-13 with 16 claims received in this financial year.

Total time lost as at 30 June 2015 for claims received during 2014-15 has increased from 867 to 1141 shifts lost (in line with increased claims received). The ratio of total claims received to time lost claims has remained steady despite the increased number of claims received. This result demonstrates the strong organisational commitment to safe and sustainable return to work opportunities for staff injured in the workplace.

Year* Total claims

Time lost claims

> 10 lost shifts*

Nature of incident (>10 shifts bracketed)

Aggression Patient handling

Manual handling

Other

2009-10 120 93 47 15 (7) 35 (12) 36 (13) 34 (15)

2010-11 112 77 34 7 (0) 27 (8) 36 (11) 42 (15)

2011-12 89 66 24 7 (0) 12 (4) 31 (9) 39 (11)

2012-13 112 87 26 18 (6) 25 (5) 19 (4) 50 (11)

2013-14 66 47 29 4 (1) 22 (10) 19 (8) 21 (10)

2014-15 77 56 32 9 (2) 16 (10) 24 (9) 29 (11)

* Calculation based on sum of lost shifts as at end of each month.

The application of competitive pricing principles to significant business activities also provides management with information about the relative efficiency of business activities.

Peninsula Health complies with the Model 2 competitively neutral pricing principles outlined in the documents Competitive Neutrality: A Statement of Victorian Government Policy and A Guide to Implementing Competitively Neutral Pricing Principles.

Protected Disclosure Act 2012

Peninsula Health has a Protected Disclosure Policy that is in force to ensure that Peninsula Health:

• complies with the Protected Disclosure Act 2012 (Vic)• maintains an awareness amongst employees, officers

and the general public of the Protected Disclosure Act• protects from detrimental action any person who makes

a protected disclosure• investigates any complaint made to the organisation.

Occupational Health and Safety (OHS)

Peninsula Health has conducted a comprehensive review of its workplace health and safety programs in 2014-15. Findings from this review and consultation with staff have been utilised to develop a four-year Workplace Health and Safety Strategy which incorporates a restructure of the health and safety department, development of staff health and wellbeing strategies, health and safety engagement, training and audit programs and early intervention projects to protect the health and safety of our workforce.

Manual Handling Risk Review Project

Progress continues on an Action Plan resulting from our Manual Handling Risk Review project. This project aimed to analyse incident data in order to understand the primary causes of risk of injury, illness or disease, and to identify strategies to reduce risk by implementing appropriate controls.



Attestation on Compliance with Australian/ New Zealand Risk Management Standard I, Nancy Hogan, certify that Peninsula Health has risk management processes in place consistent with the AS/NZS ISO 31000:2009 and an internal control system is in place that enables the executives to understand, manage and satisfactorily control risk exposures.

The Audit and Risk Committee and Board verify this assurance and that the risk profile of Peninsula Health has been critically reviewed within the last 12 months.

Ms Nancy HoganChairpersonPeninsula Health24 August 2015

Attestation on Data Integrity

I, Sue Williams, certify that Peninsula Health has put in place appropriate internal controls and processes to ensure that reported data reasonably reflects actual performance. Peninsula Health has critically reviewed these controls and processes during the year.

Ms Sue WilliamsChief ExecutivePeninsula Health24 August 2015

Attestation on compliance with SD 4.5.5. – Insurance

I, Ms Sue Williams, Chief Executive Officer, certify that Peninsula Health has complied with Ministerial Direction 4.5.5. – Insurance.

Ms Sue WilliamsChief ExecutivePeninsula Health24 August 2015

Disclosure Index

See page 24 of this publication.

Additional Information Available on Request

In compliance with the requirements of the FRD 22F Standard Disclosures in the Report of Operations, details in respect of the items listed below have been retained by Peninsula Health and are available to the relevant Ministers, Members of Parliament and the public on request, subject to Freedom of Information requirements, if applicable:

• a statement of pecuniary interest has been completed• details of shares held by senior officers as nominee or

held beneficially• details of publications produced by the Department

about the activities of the Health Service, and where they can be obtained

• details of changes in prices, fees, charges, rates and levies charged by Peninsula Health

• details of any major external reviews carried out on Peninsula Health

• details of major research and development activities undertaken by Peninsula Health that are not otherwise covered either in the Report of Operations or in a document that contains the financial statements and Report of Operations

• details of overseas visits undertaken including a summary of the objectives and outcomes of each visit

• details of major promotional, public relations and marketing activities undertaken by Peninsula Health to develop community awareness of the Health Service and its services

• details of assessments and measures undertaken to improve the occupational health and safety of employees

• general statement on industrial relations within Peninsula Health and details of time lost through industrial accidents and disputes, which is not otherwise detailed in the Report of Operations

• a list of major committees sponsored by Peninsula Health, the purposes of each committee, and the extent to which the purposes have been achieved

• details of all consultancies and contractors including consultants/contractors engaged, services provided, and expenditure committed for each engagement.



Peninsula HealthAlternate Presentation of Comprehensive Operating StatementFor the financial year ended 30 June 2015

2015$’000

2014$’000

Interest 1,134 1,098

Dividends and income tax equivalent and rate equivalent revenue 855 727

Fair Value of assets and services received free of charge or for nominal consideration - 9,859

Sales of goods and services 32,771 28,278

Grants 429,320 413,849

Other Income 54,135 71,765

Total Revenue 518,215 525,576

Employee expenses 368,071 349,304

Depreciation 30,347 25,200

Interest expense 458 491

Client Brokerage expenses 9,344 11,690

Supplies and consumable expenses 59,761 56,824

Other operating expenses 46,970 44,882

Total Expenses 514,951 488,391

Net result from transactions - Net operating balance 3,264 37,185

- Net gain / (loss) on sale of non-financial assets (48) 968

- Net gain / (loss) from discontinued operations (681) (373)

- Net gain / (loss) on financial instruments 1,652 (504)

- Other gains / (losses) from other economic flows - 14,080

- Total other economic flows included in net result 923 14,171

Items that may be reclassified subsequently to net result

Changes to financial assets available-for-sale revaluation surplus (182) 959

Total other economic flows included in net result (182) 959

Net Result 4,005 52,315

Note: This Statement does not form part of the audited financial statements.



Disclosure IndexPeninsula Health’s Annual Report is prepared in accordance with all relevant Victorian legislation.This index has been prepared to facilitate identification of compliance with statutory disclosure requirements.

Legislation Requirement Page

Ministerial Directions

Report of operations Charter and purposeFRD 22F Manner of establishment and the relevant Ministers 3FRD 22F Objectives, functions, powers and duties 3FRD 22F Nature and range of services provided 3,4Management and structureFRD 22F Organisational structure 8Financial and other informationFRD 10 Disclosure index 24FRD 11A Disclosure of ex-gratia payments 13FRD 12A Disclosure of major contracts 17FRD 21B Responsible person and executive officer disclosures 3,22FRD 22F Application and operation of Protected Disclosure Act 2012 21FRD 22F Application and operation of Carers Recognition Act 2012 17FRD 22F Application and operation of Freedom of Information Act 1982 20FRD 22F Compliance with building and maintenance provisions of Building Act 1993 17FRD 22F Details of consultancies over $10,000 17FRD 22F Details of consultancies under $10,000 17FRD 22F Employment and conduct principles 20FRD 22F Major changes or factors affecting performance 13FRD 22F Occupational health and safety 21FRD 22F Operational and budgetary objectives and performance against objectives 9-13FRD 24C Reporting of office-based environmental impacts 17FRD 22F Significant changes in financial position during the year 13FRD 22F Statement of availability of other information 22FRD 22F Statement on National Competition Policy 20FRD 22F Subsequent events 13FRD 22F Summary of the financial results for the year 13FRD 22F Workforce data disclosures including statement on the application of employment

and conduct principles8, 16, 20

FRD 25B Victorian Industry Participation Policy disclosures 17SD 4.2(g) Specific information requirements 1-24SD 4.2(j) Sign-off requirements 3SD 3.4.13 Attestation on data integrity 22SD 4.5.5 Attestation on insurance 22SD 4.5.5 Attestation on compliance with Australian/New Zealand Risk Management Standard 22

Financial statementsFinancial statements required under Part 7 of the FMASD 4.2(a) Statement of changes in equity Financial StatementsSD 4.2(b) Comprehensive operating statement Financial StatementsSD 4.2(b) Balance sheet Financial StatementsSD 4.2(b) Cash flow statement Financial StatementsOther requirements under Standing Directions 4.2SD 4.2(a) Compliance with Australian accounting standards and other authoritative pronouncements Financial StatementsSD 4.2(c) Accountable officer’s declaration Financial StatementsSD 4.2(c) Compliance with Ministerial Directions Financial StatementsSD 4.2(d) Rounding of amounts Financial StatementsLegislationFreedom of Information Act 1982

Protected Disclosure Act 2001Carers Recognition Act 2012Victorian Industry Participation Policy Act 2003Building Act 1993Financial Management Act 1994


Glossary

ACHS Australian Council on Healthcare Standards – the principal independent authority that evaluates, assesses and accredits quality improvement systems in Australian health care organisations. It is responsible for the ACHS Evaluation and Quality Improvement Program (EQuIP) and undertakes a comprehensive EQuIP standards review and consultation process of each health care organisation at least every four years

Acuity Intensity or urgency of a patient’s condition

AQL Agreed Quality Level

DVA Department of Veterans’ Affairs – the Commonwealth department that supports people who serve or have served in the armed forces

FTE Full Time Equivalent (in relation to number of staff employed)

GEM Geriatric Evaluation & Management – sub-acute care of chronic or complex conditions associated with ageing, cognitive dysfunction, chronic illness or disability. Patients are admitted for review, treatment and management by a geriatrician and multidisciplinary team for a defined episode of care

HACC Home & Community Care Program – supports frail older people, younger people with disabilities and their carers by providing basic support and maintenance to people living at home

HARP Hospital Admission Risk Program – provision of specialised person-centred medical care and care coordination in community/ambulatory settings through an integrated response of hospital and community services to improve patient outcomes, provide integrated seamless care within and across hospital/community sectors, reduce avoidable hospital admissions and emergency department presentations, and ensure equitable access to healthcare

HITH Hospital in the Home – provision of acute care to public hospital patients in the comfort of their own home or other suitable environment. Patients are regarded as hospital inpatients, and remain under the care of their hospital doctor

ICU Intensive Care Unit

MEPACS Mt Eliza Personal Alarm Call Service

NEAT National Emergency Access Target

NEST National Elective Surgery Target

OHS Occupational Health and Safety

SAB Staphylococcus aureus bacteraemia – a healthcare-associated infection

TAC Transport Accident Commission

Triage Emergency Department process that determines the order and priority of treating patients based on the severity of their condition

VICNISS Victorian Hospital-Acquired Infection Surveillance System

WIES Weighted Inlier Equivalent Separations – a cost weight assigned to each patient that is dependent on the main reason for admission and the time spent in hospital, and which determines the amount of funding received for providing care

Annual publications

Peninsula Health’s Annual Report 2015 has been produced as required under the Financial Management Act 1994, section 4.2 of the Standing Directions of the Minister for Finance under the Act, and Financial Reporting Directions.

It will be presented to the public at Peninsula Health’s Annual General Meeting on 3 December 2015.

The Annual Report 2015 comprises two sections: Report of Operations and Financial Statements.

For a broader picture of Peninsula Health’s activities over the past year, please see our other annual publications.

• Quality of Care Report – highlights Peninsula Health’s progress and achievements in improving clinical care and our consumers’ experience

• Research Report – focuses on the achievements and contributions of staff involved in research.


Peninsula Health Financial Statements 2015


Peninsula Health Financial Statements 2015 Page 27


Table of Contents

PageFinancial StatementsChairperson's, Chief Executive Officer's and Chief Finance & Accounting Officer's Declaration 28Auditor-General's Report 29Comprehensive Operating Statement 31Balance Sheet 32Statement of Changes in Equity 33Cash Flow Statement 34Notes1 Summary of Significant Accounting Policies 352 Analysis of Revenue by Source 522a Net Gain/(Loss) on Disposal of Non Financial Assets 532b Assets Received Free of Charge 533 Analysis of Expenses by Source 54

3aAnalysis of Expenses by Internally managed and Restricted Specific Purpose Funds for Services Supported by Hospital & Community Initiatives 55

4 Depreciation and Amortisation 555 Cash and Cash Equivalents 556 Receivables 567 Investments and Other Financial Assets 578 Inventories 579 Other Assets 5710 Property, Plant and Equipment 5811 Intangible Assets 6212 Payables 6213 Borrowings 6214 Provisions 6315 Other Liabilities 6416 Equity 6417 Reconciliation of Net Result for the Year to Net Cash Inflow/(Outflow) from Operating Activities 6518 Financial Instruments 6619 Commitments for Expenditure and Contingencies 7120 Segment Reporting 7221 Responsible Persons Disclosures 7422 Executive Officer Disclosures 7523 Remuneration of Auditors 7524 Ex Gratia Payments 7525 Subsequent Events 7526 Discontinued Operation 76

Peninsula Health Financial Statements 2015 Page 29Auditing in the Public Interest



Auditing in the Public Interest



Peninsula HealthComprehensive Operating StatementFor the financial year ended 30 June 2015

Note 2015 2014$'000 $'000

Revenue from Operating Activities 2 483,267 461,227 Revenue from Non-Operating Activities 2 2,192 2,488 Employee Expenses 3 (368,071) (349,304)Non Salary Labour Costs 3 (2,479) (3,152)Supplies & Consumables 3 (59,761) (56,824)Other Expenses 3 (53,835) (53,420)Net Result from Continuing Operations Before Capital & Specific Items 1,313 1,015

Capital Purpose Income 2 32,708 52,970 Available-for-Sale Revaluation Reserve Surplus Recognised 2 1,791 220 Assets Received Free of Charge 2 - 9,859 Reversal of impairment on Non Financial Assets 3 - 5,286 Impairment of Financial Assets 3 (139) (724)Depreciation & Amortisation 4 (30,347) (25,200)Finance Costs 3 & 13 (458) (491)Net Result from Continuing Operations 4,868 42,935

Gain/(Loss) from Discontinued Operation 26 (681) (373)NET RESULT FOR THE YEAR 4,187 42,562

Other Comprehensive IncomeItems that will not be reclassified to net result- Net fair value revaluation on Non Financial Assets 16a - 8,794 Items that may be reclassifed subsequently to net result- Net fair value gains/(losses) on Available-for-Sale Financial Investments 16a (182) 959

COMPREHENSIVE RESULT FOR THE YEAR 4,005 52,315

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

4



Peninsula HealthBalance SheetAs at 30 June 2015

Note 2015 2014$'000 $'000

Current AssetsCash and Cash Equivalents 5 20,800 26,881 Receivables 6 15,550 17,925 Investments and Other Financial Assets 7 14,146 16,281 Inventories 8 2,324 2,241 Other Assets 9 887 662 Total Current Assets 53,707 63,990

Non-Current AssetsReceivables 6 11,898 9,233 Property, Plant & Equipment 10 368,289 358,110 Intangible Assets 11 8,785 9,003 Total Non-Current Assets 388,972 376,346 TOTAL ASSETS 442,679 440,336

Current LiabilitiesPayables 12 15,007 23,879 Borrowings 13 948 948 Provisions 14 87,453 80,590 Other Liabilities 15 778 577 Total Current Liabilities 104,186 105,994

Non-Current LiabilitiesBorrowings 13 8,323 8,814 Provisions 14 13,529 12,518 Total Non-Current Liabilities 21,852 21,332 TOTAL LIABILITIES 126,038 127,326 NET ASSETS 316,641 313,010

EQUITYProperty, Plant & Equipment Revaluation Surplus 16a 68,067 68,067 Financial Asset Available for Sale Revaluation Surplus 16a 1,114 2,948 Contributed Capital 16b 193,201 191,923 Accumulated Surpluses/(Deficits) 16c 54,259 50,072 TOTAL EQUITY 316,641 313,010

Commitments for Expenditure 19Contingent Assets and Contingent Liabilities 19


5



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6



Peninsula HealthCash Flow StatementFor the financial year ended 30 June 2015

Note 2015 2014$'000 $'000

CASH FLOWS FROM OPERATING ACTIVITIESOperating Grants from Government 409,427 396,671 Patient and Resident Fees Received 35,717 31,252 Commonwealth Government - Residential Aged Care Subsidy 3,474 4,686 Interest Received 1,134 1,098 Dividends Received 855 728 Donations and Bequests Received 203 663 Other Receipts 35,377 29,961 Total receipts 486,187 465,059 Employee Expenses Paid (361,827) (344,116)Non Salary Labour Costs Paid (2,481) (3,172)Payments for Supplies & Consumables (118,129) (112,259)Finance Costs Paid (458) (491)Total payments (482,895) (460,038)Cash Generated from Operations 3,292 5,021

Capital Grants from Government 30,809 48,578 Capital Donations and Bequests Received 1,295 1,620 Other Capital Receipts 334 531

NET CASH FLOW FROM/(USED IN) OPERATING ACTIVITIES 17 35,730 55,750

CASH FLOWS FROM INVESTING ACTIVITIESPurchase of Investments (11,884) (5,989)Payments for Non-Financial Assets (45,562) (42,355)Proceeds from Sale of Rosebud Residential Aged Care 26 - 1,954 Proceeds from Sale of Michael Court Hostel 26 2,143 - Proceeds from Sale of Non-Financial Assets 146 2,667 Proceeds from Sale of Investments 13,837 3,593

NET CASH FLOW FROM/(USED IN) INVESTING ACTIVITIES (41,320) (40,130)

CASH FLOWS FROM FINANCING ACTIVITIESProceeds from Borrowings - 744 Repayment of Borrowings (491) (220)

NET CASH FLOW FROM/(USED IN) FINANCING ACTIVITIES (491) 524

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS HELD (6,081) 16,144

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 26,881 10,737

CASH AND CASH EQUIVALENTS AT END OF YEAR 5 20,800 26,881

Non-Cash Financing and Investing Activities - -


7


Financial Statements 2015PPeenniinnssuullaa HHeeaalltthh AAnnnnuuaall FFiinnaanncciiaall SSttaatteemmeennttss 22001155

NNootteess ttoo TThhee FFiinnaanncciiaall SSttaatteemmeennttss ffoorr tthhee yyeeaarr eennddeedd 3300 JJuunnee 22001155

8

NNoottee 11:: SSuummmmaarryy ooff SSiiggnniiffiiccaanntt AAccccoouunnttiinnggPPoolliicciieess

These annual financial statements represent the audited general purpose financial statements for Peninsula Health for the year ended 30 June 2015. The purpose of the report is to provide users with information about the Health Service’s stewardship of resources entrusted to it. ((aa)) SSttaatteemmeenntt ooff ccoommpplliiaannccee

These Financial Statements are general purpose Financial Statements which have been prepared in accordance with the Financial Management Act 1994 and applicable Australian Accounting Standards (AASs) issued by the Australian Accounting Standards Board (AASB). They are presented in a manner consistent with the requirements of AASB 101 Presentation of Financial Statements.The Financial Statements also comply with relevant Financial Reporting Directions (FRDs) issued by the Department of Treasury and Finance, and relevant Standing Directions (SDs) authorised by the Minister for Finance. Peninsula Health is a not-for profit entity and therefore applies the additional Aus paragraphs applicable to ‘not-for-profit’ Health Services under the AASs. The annual Financial Statements were authorised for issue by the Board of Directors of Peninsula Health on 25 August 2015.

((bb)) BBaassiiss ooff aaccccoouunnttiinngg pprreeppaarraattiioonn aannddmmeeaassuurreemmeenntt

Accounting policies are selected and applied in a manner which ensures that the resulting financial information satisfies the concepts of relevance and reliability, thereby ensuring that the substance of the underlying transactions or other events is reported.

The accounting policies set out below have been applied in preparing the Financial Statements for the year ended 30 June 2015, and the comparative information presented in these Financial Statementsfor the year ended 30 June 2014.

The going concern basis was used to prepare the Financial Statements.

These Financial Statements are presented in Australian dollars, the functional and presentation currency of the Health Service.

The Financial Statements, except for cash flow information, have been prepared using the accrual basis of accounting. Under the accrual basis, items are recognised as assets, liabilities, equity, income or expenses when they satisfy the definitions and recognition criteria for those items; that is, they are recognised in the reporting period to which they relate, regardless of when cash is received or paid.

The Financial Statements are prepared in accordance with the historical cost convention, except for:

• Non-current physical assets, which subsequent to acquisition, are measured at a revalued amount being their fair value at the date of the revaluation less any subsequent accumulated depreciation and subsequent impairment losses. Revaluations are made and are re-assessed with sufficient regularity to ensure that the carrying amounts do not materially differ from their fair values;

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

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

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

Judgements, estimates and assumptions are required to be made about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on professional judgement derived from historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and also in future periods that are affected by the revision.

Judgements and assumptions made by management in the application of AASs that have significant effects on the Financial Statements and estimates relate to the fair value of land, buildings, infrastructure, plant and equipment (refer to note 1 (k).




9

Consistent with AASB 13 Fair Value Measurement, Peninsula Health determines the policies and procedures for both recurring fair value measurements such as property, plant and equipment and financial instruments, and for non-recurring fair value measurements such as non-financial physical assets held for sale, in accordance with the requirements of AASB 13 and the relevant FRDs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

• Level 1 – Quoted (unadjusted) market prices in active markets for identical assets or liabilities

• Level 2 – Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable

• Level 3 – Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

For the purpose of fair value disclosures, Peninsula Health has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.

In addition, Peninsula Health determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

The Valuer-General Victoria (VGV) is Peninsula Health’s independent valuation agency.

Peninsula Health, in conjunction with VGV monitors the changes in the fair value of each asset and liability through relevant data sources to determine whether revaluation is required. Refer to Note 10 for a description of the valuation processes used.

((cc)) RReeppoorrttiinngg EEnnttiittyy

The Financial Statements include all the controlled activities of Peninsula Health. Its principal address is: Hastings Road (PO Box 52) Frankston Victoria 3199

Descriptions of the nature of Peninsula Health’s operations and its principal activities are included in the report of operations, which does not form part of these Financial Statements.

Objectives and funding

Peninsula Health embraces an integrated and collaborative view of health, working with community and service partners to promote health and to plan for the future needs of the local community of Frankston and the Mornington Peninsula. Peninsula Health provides acute care, sub acute care, residential care, mental health services and community health services, and is a major teaching centre. Peninsula Health is predominantly funded by grants for the provision of outputs in these areas. ((dd)) SSccooppee aanndd PPrreesseennttaattiioonn ooff FFiinnaanncciiaallSSttaatteemmeennttss

FFuunndd AAccccoouunnttiinngg

Peninsula Health operates on a fund accounting basis and maintains three funds: Operating, Specific Purpose and Capital Funds. Peninsula Health’s Capital and Specific Purpose Funds include unspent capital donations and receipts from fund-raising activities conducted solely in respect of these funds.

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

Activities classified as Services supported by Health Services Agreement (HSA) are substantially funded by the Department of Health and Human Services and include Residential Aged Care Services (RACS) which are also funded from other sources such as the Commonwealth, patients and residents, while Services Supported by Hospital and Community Initiatives (H&CI) are funded by Peninsula Health’s own activities or local initiatives and/or the Commonwealth.

Residential Aged Care Services

Carinya Nursing Home and Michael Court Hostel are part of Peninsula Health’s operations and share its resources. Where appropriate an apportionment of land and buildings has been made based on floor space. The results of these operations have been segregated based on actual revenue earned and expenditure incurred by each operation in Note 2, Note 3 and Note




10

26 to the Financial Statements. Carinya Nursing Home and Michael Court Hostel are substantially funded from Commonwealth bed-day subsidies. Residential Aged Care Services at Michael Court Hostel were discontinued on 20 October 2014. The individual properties were sold in May 2015.

Comprehensive Operating Statement

The Comprehensive operating statement includes the subtotal entitled ‘Net Result from continuing operations Before Capital & Specific Items’ to enhance the understanding of the financial performance of Peninsula Health. This subtotal reports the result excluding items such as capital grants, assets received or provided free of charge, depreciation, expenditure using capital purpose income and items of an unusual nature and amount such as specific income and expenses. The exclusion of these items is made to enhance matching of income and expenses so as to facilitate the comparability and consistency of results between years and Victorian Public Health Services. The ‘Net Result from continuing operations Before Capital & Specific Items’ is used by the management of Peninsula Health, the Department of Health and Human Services and the Victorian Government to measure the ongoing operating performance of Health Services.

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

• Capital purpose income, which comprises all tied grants, donations and bequests received for the purpose of acquiring non-current assets, such as capital works, plant and equipment or intangible assets. It also includes donations of plant and equipment (refer Note 1 (f)). Consequently the recognition of revenue as capital purpose income is based on the intention of the provider of the revenue at the time the revenue is provided;

• Specific income/expense comprises the following items, where material: o Write-down of inventories o Non-current asset revaluation o Diminution/impairment of investments;

• Impairment of financial and non-financial assets, includes all impairment losses (and reversal of

previous impairment losses), which have been recognised in accordance with Note 1(j) and (k);

• Depreciation and amortisation, as described in note 1(g);

• Assets provided or received free of charge (refer to Notes 1 (f); and

• Expenditure using capital purpose income, comprises expenditure which either falls below the asset capitalisation threshold or doesn’t meet asset recognition criteria and therefore does not result in the recognition of an asset in the balance sheet, where funding for that expenditure is from capital purpose income.

Balance sheet Assets and liabilities are categorised either as current or non-current (non-current being those assets or liabilities expected to be recovered/settled more than 12 months after reporting period), are disclosed in the notes where relevant.

Statement of Changes in Equity The Statement of Changes in Equity presents reconciliations of each non-owner and owner equity opening balance at the beginning of the reporting period to the closing balance at the end of the reporting period. It also shows separately changes due to amounts recognised in the comprehensive result and amounts recognised in other comprehensive income.

Cash Flow Statement Cash flows are classified according to whether or not they arise from operating activities, investing activities, or financing activities. This classification is consistent with requirements under AASB 107 Statement of Cash Flows.

Comparative Information Where necessary, figures for the previous year have been reclassified to facilitate comparison where requested by the applicable accounting standards.

RRoouunnddiinngg ooff AAmmoouunnttss

All amounts shown in the Financial Statements are expressed to the nearest $1,000 unless otherwise stated.




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((ee)) CChhaannggee iinn AAccccoouunnttiinngg PPoolliicciieess

Subsequent to the 2013/14 reporting period, the following new and revised Standards have been adopted for the first time in the current period:

• AASB 10 Consolidated Financial Statements • AASB 11 Joint Arrangements • AASB 12 Disclosure of Interests in Other Entities

The new Standards have not had a material impact on the Health Service.

((ff)) IInnccoommee ffrroomm ttrraannssaaccttiioonnss

Income is recognised in accordance with AASB 118 Revenue and is recognised to the extent that it is probable that the economic benefits will flow to Peninsula Health and the income can be reliably measured at fair value. 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.

GGoovveerrnnmmeenntt GGrraannttss aanndd ootthheerr ttrraannssffeerrss ooff iinnccoommee((ootthheerr tthhaann ccoonnttrriibbuuttiioonnss bbyy oowwnneerrss))

In accordance with AASB 1004 Contributions, government grants and other transfers of income (other than contributions by owners) are recognised as income when Peninsula Health gains control of the underlying assets irrespective of whether conditions are imposed on the Health Service’s use of the contributions.

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

IInnddiirreecctt CCoonnttrriibbuuttiioonnss ffrroomm tthhee DDeeppaarrttmmeenntt ooffHHeeaalltthh aanndd HHuummaann SSeerrvviicceess• Insurance is recognised as revenue following

advice from the Department of Health and Human Services.

• Long Service Leave (LSL) – Revenue is recognised upon finalisation of movements in LSL liability in line with the arrangements set out in the Hospital Circular 05/2013.

PPaattiieenntt aanndd RReessiiddeenntt FFeeeessPatient fees are recognised as revenue at the time invoices are raised.

PPrriivvaattee PPrraaccttiiccee FFeeeessPrivate practice fees are recognised as revenue at the time invoices are raised.

RReevveennuuee ffrroomm CCoommmmeerrcciiaall AAccttiivviittiieess

Revenue from commercial activities such as commercial laboratory medicine is recognised at the time invoices are raised or accrued when a service is performed.

DDoonnaattiioonnss aanndd OOtthheerr BBeeqquueessttssDonations and bequests are recognised as revenue when received. If donations are for a special purpose, they may be appropriated to a reserve, such as the Specific Restricted Purpose Surplus.

DDiivviiddeenndd RReevveennuueeDividend revenue is recognised when the right to receive payment is established.

IInntteerreesstt RReevveennuueeInterest revenue is recognised on a time proportionate basis; in that it takes into account the effective yield of the financial asset, which allocates interest over the relevant period.

SSaallee ooff IInnvveessttmmeennttssThe gain/loss on the sale of investments is recognised when the investment is realised.

FFaaiirr vvaalluuee ooff AAsssseettss aanndd SSeerrvviicceess RReecceeiivveedd FFrreeee ooffCChhaarrggee oorr ffoorr NNoommiinnaall CCoonnssiiddeerraattiioonn

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

Other income

Other income includes non-property rental, forgiveness of liabilities, and bad debt reversals.

((gg)) EExxppeennssee RReeccooggnniittiioonn

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




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Cost of goods sold

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

Employee expenses

Employee expenses include:

• Wages and salaries; • Annual leave; • Sick leave; • Long service leave; and • Superannuation expenses, which are reported

differently depending upon whether employees are members of defined benefit or defined contribution plans.

Defined contribution superannuation plans

In relation to defined contribution (i.e. accumulation) superannuation plans, the associated expense is simply the employer contributions that are paid or payable in respect of employees who are members of these plans during the reporting period. Contributions to defined contribution superannuation plans are expensed when incurred.

Defined benefit superannuation plans

The amount charged to the comprehensive operating statement in respect of defined benefit superannuation plans represents the contributions made by Peninsula Health to the superannuation plans in respect of the services of current staff during the reporting period. Superannuation contributions are made to the plans based on the relevant rules of each plan, and are based upon actuarial advice.Employees of Peninsula Health are entitled to receive superannuation benefits and Peninsula Health 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.

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

Contributions Paid or Payable for the Year Fund 2015 2014 Defined benefit plans: $’000 $’000

Hospital Superannuation Fund 453 442

Government Superannuation

Fund 165 265

Defined contribution plans:

Hospital Superannuation Fund 18,317 17,180

Other Funds 10,013 8,070

Total 28,948 25,957

Contributions outstanding at the

end of the financial year 1,035 876

Depreciation

All infrastructure assets, buildings, plant and equipment and other non-financial physical assets that have finite useful lives are depreciated (i.e. excludes land assets held for sale, and investment properties). Depreciation begins when the asset is available for use, which is when it is in the location and condition necessary for it to be capable of operating in a manner intended by management.

Intangible assets with finite lives are depreciated as an expense from transactions on a systematic basis over the asset’s useful life. Depreciation is generally calculated on a straight line basis, at a rate that allocates the asset value, less any estimated residual value over its estimated useful life. Estimates of the remaining useful lives, residual value and depreciation method for all assets are reviewed at least annually, and adjustments made where appropriate. This depreciation charge is not funded by the Department of Health and Human Services. Assets with a cost in excess of $1,000 (2014: $1,000) are capitalised and depreciation has been provided on depreciable assets so as to allocate their cost or valuation over their estimated useful lives.

The following table indicates the expected useful lives (in years) of non-current assets on which the depreciation charges are based.




13

2015 2014Buildings - Structure Shell Building Fabric 45 to 60 20 - Site Engineering Services and Central Plant

20 to 30 20

Central Plant - Fit Out 20 to 30 20 - Trunk Reticulated Building

Systems 20 to 30 20

Plant & Equipment 5 to 10 5 to 10Medical Equipment 3 to 10 3 to 10Computers and Communication 3 3Furniture and Fitting 7 to 10 7 to 10Motor Vehicles 4 4Leasehold Improvements 8 to 10 8 to 10Other Equipment 5 to 10 5 to 10

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

Amortisation

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 consumption of intangible assets with finite useful lives is classified as amortisation. 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. Any excess of the carrying amount over the recoverable amount is recognised as an impairment loss.

Intangible assets with finite useful lives are amortised over a three to seven year period (2014: 3 - 7 years).

Finance costs

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

Finance costs include:

• interest on bank overdrafts and short-term and long-term borrowings (Interest expense is recognised in the period in which it is incurred);

• amortisation of discounts or premiums relating to borrowings; and

• amortisation of ancillary costs incurred in connection with the arrangement of borrowings.

Other operating expenses

Other operating expenses generally represent the day-to-day running costs incurred in normal operations and include supplies and consumables. Supplies and services costs are recognised as an expense in the reporting period in which they are incurred. The carrying amounts of any inventories held for distribution are expensed when distributed.

Bad and doubtful debts

Refer to Note 1 (j) Impairment of financial assets.

(h) Other comprehensive income

Other comprehensive income measures the change in volume or value of assets or liabilities that do not result from transactions.

Net gain/(loss) on non-financial assets

Net gain/(loss) on non-financial assets and liabilities includes realised and unrealised gains and losses from revaluation gains/(losses) of non-financial physical assets (refer to Note 1(k)).

Net gain/(loss) on disposal of non-financial assets is recognised at the date of disposal and is the difference between the proceeds and the carrying value of the asset at the time.

Net gain/(loss) on financial instruments includes: • realised and unrealised gains and losses from

revaluations of financial instruments at fair value; • impairment and reversal of impairment for

financial instruments at amortised cost (refer to Note 1 (i); and

• disposals of financial assets and derecognition of financial liabilities

Revaluations of financial instrument at fair value

Refer to Note 1 (i) Financial instruments.




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Other gains/ (losses) from other comprehensive income

Other gains/ (losses) include the revaluation of the present value of the long service leave liability due to changes in the bond interest rates and transfer of amounts from the reserves to accumulated surplus or net result due to disposal or derecognition or reclassification.

(i) Financial instruments

Financial instruments arise out of contractual agreements that give rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Due to the nature of the Peninsula Health’s activities, certain financial assets and financial liabilities arise under statute rather than a contract. Such financial assets and financial liabilities do not meet the definition of financial instruments in AASB 132 Financial Instruments: Presentation. For example, statutory receivables arising from taxes, fines and penalties do not meet the definition of financial instruments as they do not arise under contract.

Where relevant, for note disclosure purposes, a distinction is made between those financial assets and financial liabilities that meet the definition of financial instruments in accordance with AASB 132 and those that do not.

The following refers to financial instruments unless otherwise stated.

Categories of non-derivative financial instruments

Financial assets at fair value through profit or loss

Financial assets are categorised as fair value through profit or loss at trade date if they are classified as held for trading or designated as such upon initial recognition. Financial instrument assets are designated at fair value through profit or loss on the basis that the financial assets form part of a group of financial assets that are managed by the Health Service concerned based on their fair values, and have their performance evaluated in accordance with documented risk management and investment strategies.

Financial instruments at fair value through profit or loss are initially measured at fair value and attributable transaction costs are expensed as incurred. Subsequently, any changes in fair value are recognised in the net result as other comprehensive income. Any

dividend or interest on a financial asset is recognised in the net result for the year.

Loans and receivables

Trade receivables, loans, term deposits with maturity greater than three months and other receivables are initially recognised at fair value plus any directly attributable transaction costs. Subsequent to initial measurement, loans and receivables are measured at amortised cost, using the effective interest method, less impairment. Term deposits with maturity greater than three months are also measured at amortised cost, using the effective interest method, less impairment.

The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset, or, where appropriate, a shorter period.

Held-to-maturity investments

If the Health Service has the positive intent and ability to hold nominated investments to maturity, then such financial assets may be classified as held-to-maturity. Held-to-maturity financial assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition held-to-maturity financial assets are measured at amortised cost using the effective interest method, less any impairment losses.

The Health Service makes limited use of this classification because any sale or reclassification of more than an insignificant amount of held-to-maturity investments not close to their maturity, would result in the whole category being reclassified as available-for-sale. The Health Service would also be prevented from classifying investment securities as held-to-maturity for the current and the following two financial years.

Available-for-sale financial assets

Available-for-sale financial instrument assets are those designated as available-for-sale or not classified in any other category of financial instrument asset. Such assets are initially recognised at fair value. Subsequent to initial recognition, gains and losses




15

arising from changes in fair value are recognised in ‘other comprehensive income’ until the investment is disposed of or is determined to be impaired, at which time the cumulative gain or loss previously recognised in equity is included in net result for the period. Fair value is determined in the manner described in Note 18.

Financial liabilities at amortised cost

Financial instrument liabilities are initially recognised on the date they are originated. They are initially measured at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, these financial instruments are measured at amortised cost with any difference between the initial recognised amount and the redemption value being recognised in profit and loss over the period of the interest-bearing liability, using the effective interest rate method.

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

((jj)) FFiinnaanncciiaall AAsssseettss

Cash and Cash Equivalents

Cash and cash equivalents recognised on the balance sheet comprise cash on hand and cash at bank, deposits at call and highly liquid investments (with an original maturity of three months or less), which are held for the purpose of meeting short term cash commitments rather than for investment purposes, which are readily convertible to known amounts of cash with an insignificant risk of changes in value. For the cash flow statement presentation purposes, cash and cash equivalents includes bank overdrafts, which are included as current borrowings in the balance sheet.

Receivables

Receivables consist of:

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

• Contractual receivables, which are comprised of mainly debtors in relation to goods and services and accrued investment income.

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 uncollectable are written off. A provision for doubtful debts is recognised when there is objective evidence that the debts may not be collected and bad debts are written off when identified.

Receivables that are contractual are classified as financial instruments and categorised as loans and receivables.

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

Investments and Other Financial Assets

Investments are recognised and derecognised on trade date where purchase or sale of an investment is under a contract whose terms require delivery of the investment within the timeframe established by the market concerned, and are initially measured at fair value, net of transaction costs.

Investments are classified in the following categories:

• Financial assets at fair value through profit or loss;

• Held-to-maturity;

• Loans and receivables; and

• Available-for-sale financial assets.

Peninsula Health classifies its other financial assets between current and non-current assets based on the purpose for which the assets were acquired. Management determines the classification of its other financial assets at initial recognition.

Peninsula Health assesses at each reporting date whether a financial asset or group of financial assets is impaired.

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

Impairment of Financial Assets

At the end of each reporting period, Peninsula Health assesses whether there is objective evidence that a financial asset or group of financial asset is impaired.




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All financial instrument assets, except those measured at fair value through profit or loss, are subject to annual review for impairment. Objective evidence includes financial difficulties of the debtor, default payments, debts which are more than 60 days overdue, and changes in debtor credit ratings.

Receivables are assessed for bad and doubtful debts on a regular basis. Bad debts considered as written off and allowances for doubtful receivables are expensed. Bad debt written off by mutual consent and the allowance for doubtful debts are classified as ‘other comprehensive income’ in the net result.

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

Where the fair value of an investment in an equity instrument at reporting 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 asset is treated as impaired.

In order to determine an appropriate fair value as at 30 June 2015 for its portfolio of financial assets, Peninsula Health used the quoted market price for each individual holding. The quoted market price has been advised by reputable financial institutions. The above valuation process was used to quantify the level of impairment on the portfolio of financial assets at year end.

In assessing impairment of statutory (non-contractual) financial assets, which are not financial instruments, professional judgement is applied in assessing materiality using estimates, averages and other computational methods in accordance with AASB 136 Impairment of Assets.

Derecognition of financial assets

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised when:

• the rights to receive cash flows from the asset have expired; or

• the Health Service retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full without material delay

to a third party under a ‘pass through’ arrangement; or

• the Health Service has transferred its rights to receive cash flows from the asset and either:

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

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

((kk)) NNoonn--FFiinnaanncciiaall AAsssseettss

Inventories

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

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

The basis used in assessing loss of service potential for inventories held for distribution include current replacement cost and technical or functional obsolescence. Technical obsolescence occurs when an item still functions for some or all of the tasks it was originally acquired to do, but no longer matches existing technologies. Functional obsolescence occurs when an item no longer functions the way it did when it was first acquired.

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

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

Property, Plant and Equipment

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

More details about the valuation techniques and inputs used in determining the fair value of non-financial physical assets are discussed in Note 10 Property, plant and equipment.




17

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. Therefore, unless otherwise disclosed, the current use of these non-financial physical assets will be their highest and best uses.

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

Plant, Equipment and Vehicles are recognised initially at cost and subsequently measured at fair value less accumulated depreciation and impairment. Depreciated historical cost is generally a reasonable proxy for fair value because of the short lives of the assets concerned.

Leasehold improvements

The cost of a leasehold improvement is capitalised as an asset and depreciated over the shorter of the remaining term of the lease or the estimated useful life of the improvements.

Revaluations of Non-current Physical Assets

Non-current physical assets are measured at fair value and are revalued in accordance with FRD 103F Non-current physical assets. This revaluation process normally occurs at least every five years, based upon the asset’s Government Purpose Classification, but may occur more frequently if fair value assessments indicate material changes in values. Independent valuers are used to conduct these scheduled revaluations and any interim revaluations are determined in accordance with the requirements of the FRDs. Revaluation increments or decrements arise from differences between an asset’s carrying value and fair value.

Revaluation increments are recognised in ‘other comprehensive income’ and are credited directly in equity to the asset revaluation surplus, except that, to the extent that an increment reverses a revaluation decrement in respect of that same class of asset

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

Revaluation decrements are recognised in ‘other comprehensive income’ to the extent that a credit balance exists in the asset revaluation surplus in respect of the same class of property, plant and equipment.

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

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

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

Intangible Assets

Intangible assets represent identifiable non-monetary assets without physical substance such as computer software and development costs (where applicable).

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 Peninsula Health.

Other non-financial assets

Prepayments

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

Disposal of Non-Financial Assets

Any gain or loss on the sale of non-financial assets is recognised in the comprehensive operating statement. Refer to note 1(h) – ‘comprehensive income’.




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Impairment of Non-Financial Assets

All assets of Peninsula Health are assessed annually for indications of impairment, except for;

• inventories; and

• assets arising from construction contracts.

If there is an indication of impairment, the assets concerned are tested as to whether their carrying value exceeds their possible recoverable amount. Where an asset’s carrying value exceeds its recoverable amount, the difference is written-off as an expense except to the extent that the write-down can be debited to an asset revaluation surplus amount applicable to that same class of asset.

If there is an indication that there has been a change in the estimate of an asset’s recoverable amount since the last impairment loss was recognised, the carrying amount shall be increased to its recoverable amount. This reversal of the impairment loss occurs only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised in prior years.

It is deemed that, in the event of the loss or destruction of an asset, the future economic benefits arising from the use of the asset will be replaced unless a specific decision to the contrary has been made. The recoverable amount for most assets is measured at the higher of depreciated replacement cost and fair value less costs to sell. Recoverable amount for assets held primarily to generate net cash inflows is measured at the higher of the present value of future cash flows expected to be obtained from the asset and fair value less costs to sell.

((ll)) LLiiaabbiilliittiieess

Payables

Payables consist of:

• contractual payables which consist predominantly of accounts payable representing liabilities for goods and services provided to the Health Service prior to the end of the financial year that are unpaid, and arise when the Health Service becomes obliged to make future payments in respect of the purchase of those goods and

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

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

Contractual payables are classified as financial instruments and are initially recognised at fair value, and then subsequently carried at amortised cost. Statutory payables are recognised and measured similarly to contractual payables, but are not classified as financial instruments and not included in the category of financial liabilities at amortised cost, because they do not arise from a contract.

Borrowings

All borrowings are initially recognised at fair value of the consideration received, less directly attributable transaction costs. The measurement basis subsequent to initial recognition for liabilities is amortised cost. Any difference between the initial recognised amount and the redemption value is recognised in net result over the period of the borrowings using the effective interest method.

Provisions

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

The amount recognised as a 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, using a discount rate that reflects the time value of money and risks specific to the provision.

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




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Employee Benefits

This provision arises for benefits accruing to employees in respect of wages and salaries, annual leave and long service leave for services rendered to the reporting date.

Wages and Salaries, Annual Leave and Accrued Days Off

Liabilities for wages and salaries, including non-monetary benefits and annual leave are all recognised in the provision for employee benefits as ‘current liabilities’, because Peninsula Health does not have an unconditional right to defer settlements of these liabilities.

Depending on the expectation of the timing of settlement, liabilities for wages and salaries, annual leave and sick leave are measured at:

• Undiscounted value – if the health service expects to wholly settle within 12 months; or

• Present value – if the health service does not expect to wholly settle within 12 months.

Long Service Leave

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

Current Liability – unconditional LSL (representing 10 or more years of continuous service) is disclosed in the notes to the Financial Statements as a current liability even where Peninsula Health 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:

• Undiscounted value – if the health service expects to wholly settle within 12 months; and

• Present value – if the health service does not expect to wholly 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.

Any gain or loss followed revaluation of the present value of non-current LSL liability is recognised as a transaction, except to the extent that a gain or loss arises due to changes in bond interest rates for which it is then recognised as an other economic flow.

Termination Benefits

Termination benefits are payable when employment is terminated before the normal retirement date or when an employee decides to accept an offer of benefits in exchange for termination of employment.

Peninsula Health recognises termination benefits when it is demonstrably committed to either terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal or providing termination benefits as a result of an offer made to encourage voluntary redundancy. Benefits falling due more than 12 months after the end of the reporting period are discounted to present value.

On-Costs

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

Superannuation liabilities

Peninsula Health does not recognise any unfunded defined benefit liability in respect of the superannuation plans because the Health Service has no legal or constructive obligation to pay future benefits relating to its employees; its only obligation is to pay superannuation contributions as they fall due. The Department of Treasury and Finance administers and discloses the State’s defined benefit liabilities in its Financial Statements.

Onerous contracts

An onerous contract is considered to exist when the Health Service has a contract under which the unavoidable cost of meeting the contractual obligation exceeds the estimated economic benefits to be received. Present obligations arising under onerous contracts are recognised as a provision to the extent that the present obligation exceeds the estimated economic benefits to be received.




20

Make good provisions

Make good provisions are recognised when Peninsula Health has contractual obligations to remove leasehold improvements from leased properties and restore the leased premises to their original condition at the end of the lease term. The related expenses of making good such properties are recognised when leasehold improvements are made.

Derecognition of financial liabilities

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

When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised as an expense in the comprehensive operating statement.

((mm)) LLeeaasseess

A lease is a right to use an asset for an agreed period of time in exchange for payment. Leases are classified at their inception as either operating or finance leases based on the economic substance of the agreement so as to reflect the risks and rewards incidental to ownership.

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.

Operating Leases as a lessee

Operating lease payments, including any contingent rentals, are recognised as an expense in the comprehensive operating statement on a straight line 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. The leased asset is not recognised in the balance sheet.

Lease Incentives

All incentives for the agreement of a new or renewed operating lease are 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 by the lessee to enter into operating leases, such incentives are recognised as a liability. The aggregate benefits of incentives are recognised as a reduction of rental expense on a straight-line basis, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset is diminished.

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.

((nn)) EEqquuiittyy

Contributed Capital

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

Property, Plant & Equipment Revaluation Surplus

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

Financial Assets Available-for-Sale Revaluation Surplus

The available-for-sale revaluation surplus arises on the revaluation of available-for-sale financial assets.

Where a revalued financial asset is sold, that portion of the surplus which relates to that financial asset is effectively realised, and is recognised in the comprehensive operating statement. Where a revalued financial asset is impaired, that portion of the




21

surplus which relates to that financial asset is recognised in the comprehensive operating statement.

((oo)) CCoommmmiittmmeennttss

Commitments for future expenditure include operating and capital commitments arising from contracts. These commitments are disclosed by way of a note (refer to note 19) at their nominal value and are inclusive of the GST payable. In addition, where it is considered appropriate and provides additional relevant information to users, the net present values of significant individual projects are stated. These future expenditures cease to be disclosed as commitments once the related liabilities are recognised on the balance sheet.

((pp)) CCoonnttiinnggeenntt aasssseettss aanndd ccoonnttiinnggeenntt lliiaabbiilliittiieess

Contingent assets and contingent liabilities are not recognised in the balance sheet, but are disclosed by way of note and, if quantifiable, are measured at nominal value. Contingent assets and contingent liabilities are presented inclusive of GST receivable or payable respectively.

((qq)) GGooooddss aanndd SSeerrvviicceess TTaaxx

Income, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense.

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

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

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

((rr)) CCaatteeggoorryy GGrroouuppss

Peninsula Health has used the following category groups for reporting purposes for the current and previous financial years.

Acute Care comprises all recurrent health revenue/expenditure on admitted patient services, where services are delivered in public hospitals, or free standing day hospital facilities, or palliative care facilities, or rehabilitation facilities. It also includes revenue/expenditure on outpatient and emergency department services.

Mental Health comprises all recurrent health revenue/expenditure on specialised mental health services (child and adolescent, general adult and community) managed or funded by the State, and includes: admitted patient services, outpatient services, community based services and ambulatory services.

Residential Aged Care comprises all recurrent revenue/expenditure on high level and low level residential aged care facilities.

Residential Aged Care-Mental Health referred to in the past as psychogeriatric residential services, comprises those Commonwealth-licensed residential aged care services in receipt of supplementary funding from Department of Health and Human Services under the mental health program. It excludes all other residential services funded under the mental health program, such as mental health-funded community care units.

Aged Care comprises revenue/expenditure from Home and Community Care (HACC) programs, Allied Health, Aged Care Assessment and support services. This category also includes the MEPACS personal alarm monitoring service. MEPACS provides personal alarm services to private clients, government funded (PAV) clients, and some research activities. Personal Alert Victoria (PAV) is a 24 hour personal monitoring service that responds to calls for assistance and is funded by the Victorian Government through the Department of Health and Human Services.

Primary, Community and Dental Health comprises a range of home based, community based, community, primary health and dental services including health promotion and counselling, physiotherapy, speech therapy, podiatry and occupational therapy and a range of dental health services.




22

Other Services not reported elsewhere - (Other)comprises services not separately classified above, including Health and Community Initiatives.

((ss)) EEccoonnoommiicc ddeeppeennddeennccyy

The Health Service is reliant on the Department of Health and Human Services for a substantial part of its revenue.

((tt)) GGooiinngg ccoonncceerrnn

Notwithstanding the operating surplus from continuing operations for the year of $4,868,000 (2014: surplus of $42,935,000) and working capital deficiency of $50,479,000 (2014: $42,004,000) the Financial Statements have been prepared on a going concern basis.

Peninsula Health generated cash flows from operations in the financial year of $3,292,000 (2014: $5,021,000) and has a reporting date net asset position of $316,641,000 (2014: $313,010,000). A breakeven result is budgeted in the 2015/16 financial year.

The extent to which current liabilities exceed current assets is regularly reviewed by the Board of Directors using an adjusted working capital ratio which reflects the expected settlement date of employee entitlement liabilities. This adjusted measure of liquidity further supports the going concern basis adopted by the Board.

((uu)) DDiissccoonnttiinnuueedd ooppeerraattiioonnss

A discontinued operation is a component of the Health Service that has been disposed of and represents a separate major line of business. The results of discontinued operations are presented separately in the comprehensive operating statement.




23

((vv)) AAAASSss iissssuueedd tthhaatt aarree nnoott yyeett eeffffeeccttiivvee

Certain new Australian accounting standards have been published that are not mandatory for the 30 June 2015 reporting period. DTF assesses the impact of all these new standards and advises Peninsula Health of their applicability and early adoption where applicable.

As at 30 June 2015, the following standards and interpretations had been issued by the AASB but were not yet effective. They become effective for the first financial statements for reporting periods commencing after the stated operative dates as detailed in the table below. Peninsula Health has not and does not intend to adopt these standards early.

Standard/Interpretation Summary Applicable for annual reporting periods beginning on

Impact on Health Services Financial Statements

AASB 9 Financial Instruments The key changes include the simplified requirements for the classification and measurement of financial assets, a new hedging accounting model and a revised impairment loss model to recognise impairment losses earlier, as opposed to the current approach that recognises impairment only when incurred.

1 Jan 2018 The assessment has identified that the financial impact of available for sale (AFS) assets will now be reported through other comprehensive income (OCI) and no longer recycled to the profit and loss.

While the preliminary assessment has not identified any material impact arising from AASB 9, it will continue to be monitored and assessed.

AASB 15 Revenue from Contracts with Customers

The core principle of AASB 15 requires an entity to recognise revenue when the entity satisfies a performance obligation by transferring a promised good or service to a customer.

1 Jan 2017

(Exposure Draft 263 – potential deferral to 1 Jan 2018)

The changes in revenue recognition requirements in AASB 15 may result in changes to the timing and amount of revenue recorded in the financial statements. The Standard will also require additional disclosures on service revenue and contract modifications. A potential impact will be the upfront recognition of revenue from licenses that cover multiple reporting periods. Revenue that was deferred and amortised over a period may now need to be recognised immediately as a transitional adjustment against the opening returned earnings if there are no former performance obligations outstanding.

AASB 2014-1 Amendments to Australian Accounting Standards [Part E Financial Instruments]

Amends various AASs to reflect the AASB's decision to defer the mandatory application date of AASB 9 to annual reporting periods beginning on or after 1 January 2018 as a consequence of Chapter 6 Hedge Accounting, and to amend reduced disclosure requirements.

1 Jan 2018 This amending standard will defer the application period of AASB 9 to the 2018-19 reporting period in accordance with the transition requirements.




24

Standard/Interpretation Summary Applicable for annual reporting periods beginning on

Impact on Health Services Financial Statements

AASB 2014-4 Amendments to Australian Accounting Standards – Clarification of Acceptable Methods of Depreciation and Amortisation [AASB 116 & AASB 138]

Amends AASB 116 Property, Plant and Equipment and AASB 138 Intangible Assets to: establish the principle for the basis of depreciation and amortisation as being the expected pattern of consumption of the future economic benefits of an asset; prohibit the use of revenue-based methods to calculate the depreciation or amortisation of an asset, tangible or intangible, because revenue generally reflects the pattern of economic benefits that are generated from operating the business, rather than the consumption through the use of the asset.

1 Jan 2016 The assessment has indicated that there is no expected impact as the revenue-based method is not used for depreciation and amortisation.

AASB 2015-6 Amendments to Australian Accounting Standards – Extending Related Party Disclosures to Not-for-Profit Public Sector Entities [AASB 10, AASB 124 & AASB 1049]

The Amendments extend the scope of AASB 124 Related Party Disclosures to not-for-profit public sector entities. A guidance has been included to assist the application of the Standard by not-for-profit public sector entities.

1 Jan 2016 The amending standard will result in extended disclosures on the entity's key management personnel (KMP), and the related party transactions.

In addition to the new standards above, the AASB has issued a list of amending standards that are not effective for the 2014-15 reporting period. In general, these amending standards include editorial and references changes that are expected to have insignificant impacts on the Health Service.



Not

e 2:

Ana

lysi

s of

Rev

enue

by

Sour

ceR

esid

entia

lR

esid

entia

l

Acu

teA

cute

Men

tal

Men

tal

Age

d C

are-

Age

d C

are-

Age

dA

ged

Prim

ary

Prim

ary

Oth

erO

ther

Tota

lTo

tal

Car

eC

are

Hea

lthH

ealth

Men

tal H

thM

enta

l Hth

Car

eC

are

Hea

lthH

ealth

2015

2014

2015

2014

2015

2014

2015

2014

2015

2014

2015

2014

2015

2014

$'00

0$'

000

$'00

0$'

000

$'00

0$'

000

$'00

0$'

000

$'00

0$'

000

$'00

0$'

000

$'00

0$'

000

Gov

ernm

ent g

rant

s35

3,63

4

33

6,60

1

34,4

68

33

,812

3,01

6

2,90

9

17,4

71

17

,098

20,7

31

23

,429

-

-

429,

320

413,

849

Indi

rect

con

tribu

tions

by

Dep

artm

ent o

f Hea

lth a

nd H

uman

Ser

vice

s-

-

-

-

-

-

-

-

-

-

2,

962

2,09

6

2,

962

2,

096

P

atie

nt a

nd R

esid

ent F

ees

22,1

35

18

,444

-

-

517

591

422

48

7

-

-

-

-

23,0

74

19,5

22

C

omm

erci

al A

ctiv

ities

-

-

-

-

-

-

-

-

-

-

9,69

7

8,

756

9,69

7

8,75

6

Oth

er R

even

ue fr

om O

pera

ting

Act

ivite

s9,

829

9,

577

752

51

8

-

40

3,06

6

2,

315

4,31

6

4,

277

251

27

7

18,2

14

17,0

04

To

tal R

even

ue fr

om O

pera

ting

Act

iviti

es38

5,59

8

36

4,62

2

35,2

20

34

,330

3,53

3

3,54

0

20,9

59

19

,900

25,0

47

27

,706

12,9

10

11

,129

483,

267

461,

227

Inte

rest

-

-

-

-

-

-

-

-

-

-

1,13

4

1,

098

1,13

4

1,09

8

Div

iden

ds-

-

-

-

-

-

-

-

-

-

85

5

727

85

5

72

7

O

ther

Rev

enue

from

Non

-Ope

ratin

g A

ctiv

ites

-

-

-

-

-

-

-

-

-

-

203

66

3

203

663

Tota

l Rev

enue

from

Non

- Ope

ratin

g A

ctiv

ities

-

-

-

-

-

-

-

-

-

-

2,19

2

2,

488

2,19

2

2,48

8

Cap

ital P

urpo

se In

com

e (e

xclu

ding

inte

rest

)-

-

-

-

-

-

-

-

-

-

31

,127

49,8

50

31

,127

49

,850

Net

Gai

n/(L

oss)

from

Dis

posa

l of N

on C

urre

nt A

sset

s -

-

-

-

-

-

-

-

-

-

(4

8)96

8

(48)

968

Cap

ital D

onat

ions

& B

eque

sts

-

-

-

-

-

-

-

-

-

-

1,29

5

1,

620

1,29

5

1,62

0

Oth

er C

apita

l Pur

pose

Inco

me

-

-

-

-

-

-

-

-

-

-

334

53

2

334

532

Tota

l Cap

ital P

urpo

se In

com

e-

-

-

-

-

-

-

-

-

-

32

,708

52,9

70

32

,708

52

,970

Ass

ets

Rec

eive

d Fr

ee o

f Cha

rge

(refe

r not

e 2b

)-

-

-

-

-

-

-

-

-

-

-

9,85

9

-

9,

859

A

vaila

ble-

for-S

ale

Rev

alua

tion

Res

erve

Sur

plus

Rec

ogni

sed

-

-

-

-

-

-

-

-

-

-

1,79

1

22

0

1,79

1

220

-

-

-

-

-

-

-

-

-

-

1,79

1

10

,079

1,79

1

10,0

79

Tota

l Rev

enue

385,

598

36

4,62

235

,220

34

,330

3,

533

3,

540

20

,959

19

,900

25

,047

27

,706

49

,601

76

,666

51

9,95

8

52

6,76

4

Indi

rect

con

trib

utio

ns b

y th

e D

epar

tmen

t of H

ealth

and

Hum

an S

ervi

ces:

Peni

nsul

a H

ealth

Ann

ual F

inan

cial

Sta

tem

ents

201

5N

otes

to T

he F

inan

cial

Sta

tem

ents

for t

he fi

nanc

ial y

ear e

nded

30

June

201

5

The

Dep

artm

ent o

f Hea

lth a

nd H

uman

Ser

vice

s m

akes

cer

tain

pay

men

ts o

n be

half

of P

enin

sula

Hea

lth. T

hese

am

ount

s ha

ve b

een

brou

ght t

o ac

coun

t in

dete

rmin

ing

the

oper

atin

g re

sult

for t

he y

ear b

y re

cord

ing

them

as

reve

nue

and

expe

nses

.

25



Note 2a: Net Gain/(Loss) on Disposal of Non Financial Assets2015 2014$'000 $'000

Proceeds from Disposals of Non Financial AssetsLand - 2,611 Plant & Equipment 30 33 Motor Vehicles 116 23 Total Proceeds from Disposal of Non Financial Assets 146 2,667

Less: Written Down Value of Non Financial Assets SoldLand - 1,697 Plant & Equipment 193 - Motor Vehicles 1 2 Total Written Down Value of Non Financial Assets Sold 194 1,699

Net gains/(losses) on disposal of Non Financial Assets (48) 968

Refer to Note 26 for Non Financial Assets disposed of as part of the discontinued operation.

Note 2b: Assets Received Free of Charge2015 2014$'000 $'000

During the reporting period, the fair value of assets received free of charge, was as follows:- Land - 3,662 - Buildings - 5,784 - Building Fixtures & Fittings - 413 Total - 9,859

Peninsula Health Annual Financial Statements 2015Notes to The Financial Statements for the financial year ended 30 June 2015

26



Not

e 3:

Ana

lysi

s of

Exp

ense

s by

Sou

rce

2015

2014

2015

2014

2015

2014

2015

2014

2015

2014

2015

2014

2015

2014

Res

iden

tial

Res

iden

tial

Age

d C

are

Age

d C

are

Acu

teA

cute

Men

tal

Men

tal

Men

tal

Men

tal

Age

dA

ged

Prim

ary

Prim

ary

Oth

erO

ther

TOTA

LTO

TAL

Car

eC

are

Hea

lthH

ealth

Hea

lthH

ealth

Car

eC

are

Hea

lthH

ealth

$'00

0$'

000

$'00

0$'

000

$'00

0$'

000

$'00

0$'

000

$'00

0$'

000

$'00

0$'

000

$'00

0$'

000

Em

ploy

ee e

xpen

ses

292,

408

276,

828

31,7

05

30

,521

4,53

7

4,

555

10

,888

10,3

46

23

,802

22,3

71

4,

731

4,

683

36

8,07

1

349,

304

Non

Sal

ary

Labo

ur C

osts

1,02

7

1,

580

29

32

19

21

1,28

8

1,37

9

66

88

50

52

2,47

9

3,

152

S

uppl

ies

& C

onsu

mab

les

57,0

62

54,2

19

84

3

83

6

23

8

235

31

25

449

455

1,13

8

1,05

4

59,7

61

56

,824

Clie

nt B

roke

rage

Cos

ts89

7

832

1,98

6

1,92

3

-

-

4,76

4

4,50

2

1,69

7

4,43

3

-

-

9,34

4

11

,690

Oth

er E

xpen

ses

36,8

36

35,2

30

2,

556

2,

630

14

0

153

2,80

2

1,51

7

1,18

6

1,07

3

971

1,12

7

44,4

91

41

,730

Tota

l Exp

endi

ture

from

Ope

ratin

g A

ctiv

ities

388,

230

368,

689

37,1

19

35

,942

4,93

4

4,

964

19

,773

17,7

69

27

,200

28,4

20

6,

890

6,

916

48

4,14

6

462,

700

Dep

reci

atio

n &

Am

ortis

atio

n (re

fer n

ote

4)-

-

-

-

-

-

-

-

-

-

30,3

47

25

,200

30,3

47

25

,200

Fina

nce

Cos

ts (r

efer

not

e 13

)-

-

-

-

-

-

-

-

-

-

458

491

458

49

1

R

ever

sal o

f im

pairm

ent o

n N

on F

inan

cial

Ass

ets

(refe

r no

te 1

0)-

-

-

-

-

-

-

-

-

-

-

(5

,286

)-

(5,2

86)

Impa

irmen

t of F

inan

cial

Ass

ets

(refe

r not

e 16

)-

-

-

-

-

-

-

-

-

-

139

724

139

72

4

Tota

l Oth

er E

xpen

ses

-

-

-

-

-

-

-

-

-

-

30

,944

21,1

29

30

,944

21,1

29

388,

230

368,

689

37

,119

35,9

42

4,

934

4,96

4

19,7

73

17

,769

27,2

00

28

,420

37,8

34

28

,045

515,

090

48

3,82

9

Tota

l Exp

ense

s

Peni

nsul

a H

ealth

Ann

ual F

inan

cial

Sta

tem

ents

201

5N

otes

to T

he F

inan

cial

Sta

tem

ents

for t

he fi

nanc

ial y

ear e

nded

30

June

201

5

27



Note 3a: Analysis of Expense and Revenue by Internal managed and Restricted Specific Purpose Funds

2015 2014 2015 2014Expense Expense Revenue Revenue

$'000 $'000 $'000 $'000Commercial ActivitiesThoracic Medicine 673 599 544 416 Echo Cardiology/Angiography 1,073 984 769 646 Sleep Laboratory 951 905 359 396 Property Rental - - 200 195 Cafeteria & Catering Services 1,145 1,140 1,483 1,483 Car Park 366 382 2,586 2,132 Other Special Purpose Funds 2,547 2,906 3,756 3,488 TOTAL 6,755 6,916 9,697 8,756

Note 4: Depreciation & Amortisation2015 2014$'000 $'000

DepreciationBuildings 14,664 13,955 Plant & Equipment 6,664 6,452 Furniture & Fittings 7,134 2,773 Motor Vehicles 284 523 Total Depreciation 28,746 23,703

AmortisationSoftware 1,601 1,497 Total Amortisation 1,601 1,497

Total Depreciation and Amortisation 30,347 25,200

Note 5: Cash and Cash EquivalentsFor the purposes of the Cash Flow Statement, cash assets include cash on hand and in banks, andshort-term deposits which are readily convertible to cash on hand, and are subject to an insignificant risk of change in value, net of outstanding bank overdrafts.

2015 2014$'000 $'000

Cash on Hand 26 26 Cash at Bank 10,774 26,855 Deposits at Call 10,000 - TOTAL 20,800 26,881

Represented by:Cash for Health Service Operations 20,800 26,881 TOTAL 20,800 26,881


28



Note 6: Receivables2015 2014$'000 $'000

CURRENTContractual Inter Hospital Debtors 235 175 Trade Debtors 5,559 7,247 Patient Fees 5,244 5,586 Accrued Investment Income 57 16 Less Allowance for Doubtful Debts (74) (69)

11,021 12,955 Statutory Department of Health and Human Services – Long Service Leave 3,632 3,632 GST Receivable 897 1,338

4,529 4,970 TOTAL CURRENT RECEIVABLES 15,550 17,925

NON CURRENTContractual Trade Debtors 1,954 1,954 Statutory Department of Health and Human Services – Long Service Leave 9,944 7,279 TOTAL NON-CURRENT RECEIVABLES 11,898 9,233

TOTAL RECEIVABLES 27,448 27,158

(a) Movement in Allowance for Doubtful Debts2015 2014$'000 $'000

Balance at beginning of year 69 191 Amounts written off during the year (205) (190)Amounts recovered during the year - - Increase/(decrease) in allowance recognised in profit or loss 210 68 Balance at end of year 74 69

(b) Ageing analysis of receivablesPlease refer to note 18(d) for the ageing analysis of receivables.

(c) Nature and extent of risk arising from receivablesPlease refer to note 18(d) for the nature and extent of credit risk from receivables.


29



Note 7: Investments and Other Financial AssetsTotal Total2015 2014$'000 $'000

Equities & Managed Investment Schemes Available for Sale at Fair Value Hybrid Securities 2,006 8,006 Direct Equity-Shares 2,140 8,275 VFMC Growth Fund 10,000 - Total Current 14,146 16,281

Represented by:Health Service Investments 13,368 15,704 Monies Held in Trust:- Patient Monies 10 4 Accommodation Bonds (Refundable Entrance Fees) 768 573 TOTAL 14,146 16,281

(a) Ageing analysis of other financial assetsPlease refer to note 18(d) for the ageing analysis of other financial assets.

(b) Nature and extent of risk arising from other financial assets

(c) Compliance with Standing Direction 4.5.6 Treasury Risk Management

Note 8: Inventories2015 2014$'000 $'000

Pharmaceuticals - at cost 729 812 Catering Supplies - at cost 62 78 Housekeeping Supplies - at cost 47 48 Medical and Surgical Lines - at cost 1,468 1,285 Administration Stores - at cost 18 18 TOTAL INVENTORIES 2,324 2,241

Note 9: Other Assets2015 2014$'000 $'000

CURRENTPrepayments 887 662 TOTAL 887 662

Please refer to note 18(d) for the nature and extent of credit risk arising from other financial assets.


To comply with the requirements of the standing direction of ensuring that the Health Service’s financial instruments are held with VFMC and TCV by 30 June 2015, management, with oversight by the Board, developed and implemented a divestment strategy during the current financial year, which saw the Health Service having divested and invested $20 million of its investments with VFMC & TCV by 30 June 2015. The divestment strategy continues post year end as the Health Service held a number of investments, with maturity date post 1 July 2015. As at the 17 August 2015, an additional $3.2m of the $4.1m non VFMC investments was realised and invested with VFMC or TCV.

30



Note 10: Property, Plant & Equipment

(a) Gross carrying amount and accumulated depreciation 2015 2014$'000 $'000

Land- Land at Fair Value 63,289 64,644 Total Land 63,289 64,644

Buildings- Buildings at Fair Value 337,696 277,043 Less Accumulated Depreciation (74,487) (59,840)Total Buildings 263,209 217,203

Plant and Equipment- Plant and Equipment at fair value 65,170 57,810 Less Accumulated Depreciation (35,456) (30,146)Total Plant and Equipment 29,714 27,664

Furniture and Fittings- Furniture and Fittings at fair value 28,107 21,117 Less Accumulated Depreciation (18,563) (11,458)Total Furniture and Fittings 9,544 9,659

Motor Vehicles- Motor Vehicles at fair value 4,610 4,600 Less Accumulated Depreciation (4,263) (4,451)Total Motor Vehicles 347 149

Assets Under Construction- Assets under construction at cost 2,186 38,791 Total Assets Under Construction 2,186 38,791

TOTAL 368,289 358,110

(b) Reconciliations of the carrying amounts of each class of asset

Land Buildings Plant & Furniture & Motor Assets Under TotalEquipment Fittings Vehicles Construction

$'000 $'000 $'000 $'000 $'000 $'000 $'000Balance at 1 July 2013 37,017 212,099 28,993 6,330 643 35,481 320,563 Additions - 2,335 4,869 1,083 31 41,311 49,629 Disposals (1,697) - (119) - (2) - (1,818)Assets received free of charge 3,662 5,784 - 413 - - 9,859 Transfers from Assets Under Construction - 22,522 373 4,606 - (27,501) - Net Transfers to Intangible Assets (Note 11) - - - - - (10,500) (10,500)Impairment Losses (recognised)/reversed in Net Result 5,286 - - - - - 5,286 Revaluation increments/(decrements) 20,376 (11,582) - - - - 8,794 Depreciation (note 4) - (13,955) (6,452) (2,773) (523) - (23,703)Balance at 30 June 2014 64,644 217,203 27,664 9,659 149 38,791 358,110 Additions - 3,409 5,475 4,459 483 27,729 41,555 Disposals (1,355) (500) (183) (11) (1) - (2,050)Assets received free of charge - - - - - - - Transfers from Assets Under Construction - 57,761 3,422 2,571 - (63,754) - Net Transfers to Intangible Assets (Note 11) - - - - - (580) (580)Impairment Losses (recognised)/reversed in Net Result - - - - - - - Revaluation increments/(decrements) - - - - - - - Depreciation (note 4) - (14,664) (6,664) (7,134) (284) - (28,746)Balance at 30 June 2015 63,289 263,209 29,714 9,544 347 2,186 368,289

Land and buildings carried at valuationAn independent valuation of Peninsula Health's land and buildings was performed by the Valuer-General Victoria to determine the fair value of the land and buildings. The valuation, which conforms to Australian Valuation Standards, was determined by reference to the amounts for which assets could be exchanged between knowledgeable willing parties in an arm's length transaction. The valuation was based on independent assessments. The effective date of the valuation was 30 June 2014.


31



Note 10: Property, Plant & Equipment continued

Level 1 (i) Level 2 (i) Level 3 (i)

Land at fair value- Non-specialised land 4,900 - 4,900 - - Specialised land 59,744 - - 59,744 Total of land at fair value 64,644 - 4,900 59,744 Buildings at fair value- Specialised buildings 217,203 - - 217,203 Plant and equipment at fair value- Plant and equipment 27,664 - - 27,664 Furniture and Fittings at fair value- Office furniture, computers and leasehold improvements 9,659 - - 9,659 Motor Vehicles at fair value- Vehicles (ii) 149 - - 149

319,319 - 4,900 314,419

Level 1 (i) Level 2 (i) Level 3 (i)

Land at fair value- Non-specialised land 3,545 - 3,545 - - Specialised land 59,744 - - 59,744 Total of land at fair value 63,289 - 3,545 59,744 Buildings at fair value- Specialised buildings 263,209 - - 263,209 Plant and equipment at fair value- Plant and equipment 29,714 - - 29,714 Furniture and Fittings at fair value- Office furniture, computers and leasehold improvements 9,544 - - 9,544 Motor Vehicles at fair value- Vehicles (ii) 347 - - 347

366,103 - 3,545 362,558 Note(i) Classified in accordance with the fair value hierarchy, see Note 1(ii) Vehicles are categorised to Level 3 assets because the depreciated replacement cost is used in estimating the fair value.

Non-specialised land and buildings

Specialised land and specialised buildings

Plant and equipment, Furniture & Fittings

Vehicles

Peninsula Health Annual Financial Statements 2015

An independent valuation of the Health Service’s specialised land and specialised buildings was performed by the Valuer-General Victoria. The valuation was performed using the market approach adjusted for CSO. The effective date of the valuation was 30 June 2014.

Plant and equipment is held at carrying value (depreciated cost). When plant and equipment is specialised in use, such that it is rarely sold other than as part of a going concern, the depreciated replacement cost is used to estimate the fair value. Unless there is market evidence that current replacement costs are significantly different from the original acquisition cost, it is considered unlikely that depreciated replacement cost will be materially different from the existing carrying value.

There were no changes in valuation techniques throughout the period to 30 June 2015. For all assets measured at fair value, the current use is considered the highest and best use.

The Health Service acquires new vehicles and at times disposes of them before completion of their economic life. The process of acquisition, use and disposal in the market is managed by the Health Service who set relevant depreciation rates during use to reflect the consumption of the vehicles. As a result, the fair value of vehicles does not differ materially from the carrying value (depreciated cost).

Fair value measurement at end of reporting period using:

There have been no transfers between levels during the period.

For non-specialised land and non-specialised buildings, an independent valuation was performed by independent valuers, The Valuer-General Victoria (VGV), to determine the fair value using the market approach. Valuation of the assets was determined by analysing comparable sales and allowing for share, size, topography, location and other relevant factors specific to the asset being valued. An appropriate rate per square metre has been applied to the subject asset. The effective date of the valuation was 30 June 2014.

The market approach is also used for specialised land and specialised buildings although is adjusted for the community service obligation (CSO) to reflect the specialised nature of the assets being valued. Specialised assets contain significant, unobservable adjustments; therefore these assets are classified as Level 3 under the market based direct comparison approach.

Notes to The Financial Statements for the financial year ended 30 June 2015

For Peninsula Health, the depreciated replacement cost method is used for the majority of specialised buildings, adjusting for the associated depreciation. As depreciation adjustments are considered as significant and unobservable inputs in nature, specialised buildings are classified as Level 3 for fair value measurements.

Carrying amount as at 30 June 2014

Fair value measurement at end of reporting period using:(c) Fair value measurement hierarchy for assets as at 30 June 2014

(c) Fair value measurement hierarchy for assets as at 30 June 2015 Carrying amount as at 30 June 2015

To the extent that non-specialised land and non-specialised buildings do not contain significant, unobservable adjustments, these assets are classified as Level 2 under the market approach.

Non-specialised land and non-specialised buildings are valued using the market approach. Under this valuation method, the assets are compared to recent comparable sales or sales of comparable assets which are considered to have nominal or no added improvement value.

The CSO adjustment is a reflection of the valuer’s assessment of the impact of restrictions associated with an asset to the extent that is also equally applicable to market participants. This approach is in light of the highest and best use consideration required for fair value measurement, and takes into account the use of the asset that is physically possible, legally permissible and financially feasible. As adjustments of CSO are considered as significant unobservable inputs, specialised land would be classified as Level 3 assets.

32




Opening Balance at 1 July 2013 37,017 212,099 28,993 6,330 643Purchases (sales) 1,051 30,641 5,090 6,102 8 Transfers in (out) of Level 3 (4,900) - - - -

Gains or losses recognised in net result- Depreciation - (13,955) (6,452) (2,773) (523) - Impairment loss 5,286 - - - - Subtotal 38,454 228,785 27,631 9,659 128

Items recognised in other comprehensive income- Revaluation 20,376 (11,582) - - - Subtotal 20,376 (11,582) - - -

58,830 217,203 27,631 9,659 128

Unrealised gains/(losses) on non-financial assets 914 - 33 - 21

Closing Balance at 30 June 2014 59,744 217,203 27,664 9,659 149

Opening Balance at 1 July 2014 59,744 217,203 27,664 9,659 149Purchases (sales) - 60,670 8,714 7,019 482 Transfers in (out) of Level 3 - - - - -

Gains or losses recognised in net result- Depreciation - (14,664) (6,664) (7,134) (284) - Impairment loss - - - - - Subtotal 59,744 263,209 29,714 9,544 347

Items recognised in other comprehensive income- Revaluation - - - - - Subtotal - - - - -

59,744 263,209 29,714 9,544 347

Unrealised gains/(losses) on non-financial assets - - - - -

Closing Balance at 30 June 2015 59,744 263,209 29,714 9,544 347

Note(i) Classified in accordance with the fair value hierarchy, see Note 1


Furniture & Fittings

(d) Reconciliation of Level 3 fair value at 30 June 2015(i)

(d) Reconciliation of Level 3 fair value at 30 June 2014(i) Motor Vehicles

Motor VehiclesLand Buildings

Plant and Equipment

Furniture & Fittings

Land BuildingsPlant and

Equipment

33




e) Description of significant unobservable inputs to Level 3 valuations 30 June 2015 and 30 June 2014:

Specialised land

Specialised land Market approach

Community Service Obligation (CSO) adjustment 20% (i)

A significant increase or decrease in the CSO adjustment would result in a significantly lower (higher) fair value

Specialised buildings

Hospital care facilities $1,300 - $2,500/m2 ($1,900)

Residential building structures $2,000 - $3,500/m2 ($2,750)

Community Centre (Hastings) $6,000/m2

Other sheds and halls $1,000 - $1,200/m2 ($1,100)

All Useful life of specialised buildings

1 - 60 years (30 years)

Plant and equipment at fair value

Plant and equipment Depreciated replacement cost Cost per unit

$9,000 - $10,000 ($9,500)

Useful life of PPE 5-10 years (7 years) Vehicles

Motor vehicles Depreciated replacement cost Cost per unit

$9,000-$10,000 per unit($9500 per unit)

Useful life of Vehicles 3-5 years (4 years) Medical equipment at fair value

Medical equipment Depreciated replacement cost Cost per unit

$6,000 - $7,000 ($6,500)

Useful life of ME 3-10 years (6 years) Furniture and fittings at fair value

Furniture and fittings Depreciated replacement cost Cost per unit

$6,000 - $7,000 ($6,500)

Useful life of F&F 3-10 years (6 years)

Increase (decrease) in gross replacement cost would result in a significantly higher (lower) fair value

Direct cost per square metre

Depreciated replacement cost

(i) A CSO adjustment of 20% was applied to reduce the market approach value for the Health Service’s specialised land.

Valuation technique

Significant unobservable inputs (i)

Range (weighted average) (i)

Sensitivity of fair value measurement to changes in

significant unobservable inputs

A significant increase or decrease in direct cost per square meter adjustment would result in a significantly higher or lower fair value

A significant increase or decrease in cost per unit would result in a significantly higher or lower fair value

A significant increase or decrease in cost per unit would result in a significantly higher or lower fair value

Increase (decrease) in gross replacement cost would result in a significantly higher (lower) fair value


34



Note 11: Intangible Assets 2015 2014$'000 $'000

Software 11,883 10,500 Less Accumulated Amortisation (3,098) (1,497)Total Intangible Assets 8,785 9,003

2015 2014$'000 $'000

Balance at beginning of year 9,003 - Additions 803 - Net Transfers from Assets Under Construction (Note 10) 580 10,500 Disposals - - Amortisation expense (Note 4) (1,601) (1,497)Balance at end of year 8,785 9,003

Note 12: Payables 2015 2014$'000 $'000

CURRENTContractualTrade Creditors (i) 4,055 5,257 Salary Packaging 3,376 3,238 Accrued Expenses 7,009 13,021

14,440 21,516 StatutoryDepartment of Health and Human Services(ii) 567 2,363

TOTAL CURRENT 15,007 23,879

(a) Maturity analysis of payablesPlease refer to Note 18(e) for the ageing analysis of payables.(b) Nature and extent of risk arising from payablesPlease refer to note 18(e) for the nature and extent of risks arising from contractual payables.

Note 13: Borrowings 2015 2014$'000 $'000

CURRENTTCV borrowings 948 948

NON CURRENTTCV borrowings 8,323 8,814

TOTAL BORROWINGS 9,271 9,762

The terms and conditions of the interest bearing borrowings include a 15 year repayment periodat a fixed interest rate of 4.795%.

- Interest on long term borrowings (recognised as a finance cost) 458 491

(a) Maturity analysis of borrowingsPlease refer to note 18(e) for the ageing analysis of borrowings.(b) Nature and extent of risk arising from borrowingsPlease refer to note 18(e) for the nature and extent of risks arising from borrowings.(c) Defaults and breaches


Finance costs of the Health Service incurred during the year are accounted for as follows:

Reconciliation of the carrying amounts of intangible assets at the beginning and end of the previous and current financial year:

During the current and prior year, there were no defaults and breaches of any of the borrowings.

(i) The average credit period is 30 days. No interest is charged on the other payables for the first 30 days from the date of the invoice. Thereafter, $nil interest was charged on the outstanding balance in 2014/15 (2013/14: $nil).(ii) Terms and conditions of amounts payable to the Department of Health and Human Services vary according to the particular agreement with the Department.

Software

35



Note 14: Provisions

Employee Benefits 2015 2014$'000 $'000

CURRENTEmployee Benefits (i) (Note 14(a))Annual Leave (Note 14(a))- Unconditional and expected to be settled within 12 months (ii) 24,364 21,906 - Unconditional and expected to be settled after 12 months (ii) 4,060 6,032 Long Service Leave (Note 14(a))- Unconditional and expected to be settled within 12 months (ii) 4,573 4,582 - Unconditional and expected to be settled after 12 months (ii) 34,608 30,834 Accrued Days Off (Note 14(a))- Unconditional and expected to be settled within 12 months (ii) 975 984 - Unconditional and expected to be settled after 12 months (ii) - - Accrued Wages and Salaries 11,632 9,470

80,212 73,808 Provisions related to Employee Benefit On-Costs- Unconditional and expected to be settled within 12 months (ii) 3,037 2,794 - Unconditional and expected to be settled after 12 months (ii) 4,204 3,988

7,241 6,782 Total Current Provisions 87,453 80,590

NON-CURRENTEmployee Benefits (i) (Note 14(a)) 12,295 11,347 Provisions related to Employee Benefit On-Costs (Note 14(a) and Note 14(b)) 1,234 1,171 Total Non-Current Provisions 13,529 12,518

Total Provisions 100,982 93,108

(a) Employee Benefits and Related On-Costs

Current Employee Benefits and related on-costsAnnual Leave Entitlements 31,261 30,727 Unconditional Long Service Leave Entitlement 43,482 39,305 Accrued Days Off 1,078 1,088 Accrued Wages and Salaries 11,632 9,470 Non-Current Employee Benefits and related on-costsConditional Long Service Leave Entitlements 13,529 12,518 Total Employee Benefits and Related On-Costs 100,982 93,108

Notes:

(b) Movement in Long Service Leave:

Balance at start of year 51,823 47,458 Provision made during the year:-Revaluations 293 (33)-Expense recognising employee service 9,970 9,483 Settlement made during the year (5,075) (5,085)Balance at end of year 57,011 51,823


(i) Employee benefits consist of annual leave and long service leave accrued by employees. On-costs such as superannuation and worker's compensation insurance are not employee benefits and are reflected as a separate provision.(ii) The amounts disclosed are at present values


36



Note 15: Other Liabilities2015 2014$'000 $'000

CURRENT*Trust Funds - Patient Monies held in Trust 778 577

778 577 * Total Monies Held in TrustRepresented by the following assets:- Cash Assets Held in Trust (refer to Note 5) 10 4 - Other Financial Assets Held at Trust (refer to Note 7) 768 573 TOTAL 778 577

Note 16: Equity 2015 2014$'000 $'000

(a) SurplusesProperty, Plant & Equipment Revaluation Surplus 1

Balance at the beginning of the reporting period 68,067 59,273 Revaluation increment/(decrement) - 8,794 Impairment losses - - Balance at the end of the reporting period 68,067 68,067

* Represented by:- Buildings 47,691 47,691 - Land 20,376 20,376

68,067 68,067

Financial Asset Available-for-Sale Revaluation Surplus 2

Balance at the beginning of the reporting period 2,948 1,485 Cumulative (gain)/loss transferred to Operating Statement on sale of financial assets (1,791) (220)Cumulative (gain)/loss transferred to Operating Statement on impairment of financial assets 139 724 Valuation gain/(loss) recognised direct to equity (182) 959 Balance at the end of the reporting period 1,114 2,948

Total Surpluses 69,181 71,015

1. The property, plant & equipment asset revaluation surplus arises on the revaluation of property, plant & equipment.

2. The financial assets available-for-sale revaluation surplus 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, and is effectively realised, is recognised in the net result. Where a revalued financial asset is impaired that portion of the reserve which relates to that financial asset is recognised in net result.

(b) Contributed CapitalBalance at the beginning of the reporting period 191,923 191,923 Capital Contribution received from Victorian Government 1,278 - Balance at the end of the reporting period 193,201 191,923

(c) Accumulated Surpluses/(Deficits)Balance at the beginning of the reporting period 50,072 7,510 Net Result for the Year 4,187 42,562 Balance at the end of the reporting period 54,259 50,072

Total Equity at the end of the reporting period 316,641 313,010


37



Note 17: Reconciliation of Net Result for the Year to Net Cash Inflow/(Outflow)from Operating Activities

2015 2014$'000 $'000

Net Result for the Year 4,187 42,562

Non-cash movementsDepreciation & Amortisation 30,347 25,200 Non-Cash Department of Health Capital Grants (318) (1,272)Non-Cash Assets Available for Sale (1,791) (220)Non-Cash Impairment of Financial Assets 139 724 Non-Cash Revaluation/Impairment of Non Financial Assets - (5,286)Assets received free of charge - (9,859)Movements included in investing and financing activitiesNet (Gain)/Loss from Sale of Plant and Equipment 48 (968)(Gain)/Loss from Discontinued Operation (155) (1,954)Movements in Assets & Liabilities- Increase/(Decrease) in Payables (4,204) 1,476 - Increase/(Decrease) in Employee Benefits 7,874 6,781 - (Increase)/Decrease in Inventories (83) 81 - (Increase)/Decrease in Receivables (290) (1,891)- (Increase)/Decrease in Prepayments (225) 11 - Increase/(Decrease) in Other Liabilities 201 365

NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES 35,730 55,750


38


Financial Statements 2015Notes to The Financial Statements for the financial year ended 30 June 2015

Note 18: Financial Instruments

(a) Financial Risk Management Objectives & Policies

(b) Risk management policies

(c) Categorisation of financial instrumentsCarrying Carrying

Details of each category in accordance with AASB139 Amount Amount 2015 2014

Note Category $'000 $'000Financial AssetsCash and cash equivalents 5 20,800 26,881 Receivables 6 12,975 14,909 Other Financial Assets 7 14,146 16,281 Total Financial Assets (i) 47,921 58,071 Financial LiabilitiesPayables 12 14,440 21,516 Borrowings 13 9,271 9,762 Accommodation Bonds 15 768 573 Other Liabilities 15 10 4 Total Financial Liabilities (ii) 24,489 31,855

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

Net holding gain/(loss) on financial instruments by category Net holding

gain/(loss)

Total interest income /

(expense)Fee income /

(expense)Impairment

loss Total$'000 $'000 $'000 $'000 $'000

2015Financial AssetsCash and Cash Equivalents (i) - 1,134 - - 1,134 Loans and Receivables (i) - - - - - Available for Sale (i) (1,973) - 855 (139) (1,257)Total Financial Assets (1,973) 1,134 855 (139) (123)Financial LiabilitiesAt Amortised Cost (ii) - (458) - - (458)Total Financial Liabilities - (458) - - (458)

2014Financial AssetsCash and Cash Equivalents (i) - 1,098 - - 1,098 Loans and Receivables (i) - - - - - Available for Sale (i) 739 - 728 (724) 743 Total Financial Assets 739 1,098 728 (724) 1,841 Financial LiabilitiesAt Amortised Cost (ii) - (491) - - (491)Total Financial Liabilities - (491) - - (491)

Peninsula Health Annual Financial Statements

This is supported by a risk register which is regularly updated in conjunction with our internal auditors.

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.

The main purpose in holding financial instruments is to prudentially manage Peninsula Health's financial risks within government policy parameters.

Available for sale financial assets

Peninsula Health's risk management framework is based on the Australian Standard and has an overarching policy with 10 policies relating to specific areas such as clinical governance, financial risk, IT risk and building and infrastructure risk.

Peninsula Health's principal financial instruments comprise of cash assets, term deposits, receivables (excluding statutory receivables, investment in equities, payables (excluding statutory payables), accommodation bonds and borrowings.

Peninsula Health's main financial risks include credit risk, liquidity risk, interest rate risk and equity price risk. Peninsula Health manages these financial risks in accordance with its financial risk management policy.Peninsula Health uses different methods to measure and manage the different risks to which it is exposed. Primary responsibility for the identification and management of financial risks rests with the financial risk management committee of the Health Service.

Risk management is seen as a core component of service delivery and high or extreme risks are managed at an appropriate level of seniority. A consistent risk assessment and management tool is used across all risk areas.

Financial liabilities measured at amortised cost

Loans and ReceivablesLoans and Receivables

(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 movement in the fair value of the asset, 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 measured 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.

Financial liabilities measured at amortised cost

Financial liabilities measured at amortised costFinancial liabilities measured at amortised cost

39



Note 18: Financial Instruments Continued

(d) Credit Risk

Ageing analysis of Financial Asset as at 30 June

Less than 1 Month

1-3 Months 3 months - 1 Year

1-5 Years

2015 $'000 $'000 $'000 $'000 $'000 $'000 $'000Financial AssetsCash and Cash Equivalents 20,800 20,800 - - - - - Receivables - Trade Debtors* 12,975 8,681 2,711 634 1,023 - (74) - Other Receivables - - - - - - - Other Financial Assets - Managed Investments 14,146 14,146 - - - - - Total Financial Assets (i) 47,921 43,627 2,711 634 1,023 - (74)

2014Financial AssetsCash and Cash Equivalents 26,881 26,881 - - - - - Receivables - Trade Debtors 14,909 11,708 1,609 525 1,136 - (69) Other Financial Assets - Managed Investments 16,281 16,281 - - - - -

Total Financial Assets 58,071 54,870 1,609 525 1,136 - (69)

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

2015 $'000 $'000 $'000 $'000 $'000Financial AssetsCash and Cash Equivalents 10,000 10,800 - - 20,800 Loans and Receivables - - - 12,975 12,975 Available for sale - Shares in Other Entities - - - 14,146 14,146 Total Financial Assets (i) 10,000 10,800 - 27,121 47,921

2014Financial AssetsCash and Cash Equivalents - 26,881 - - 26,881 Loans and Receivables - - 1,236 13,673 14,909 Available for sale - Shares in Other Entities - - - 16,281 16,281 Total Financial Assets (i) - 26,881 1,236 29,954 58,071


Financial institutions(AAA credit

rating)

Financial Institutions(AA- credit

rating)

Government agencies(min BBB

credit rating)

Other (min BBB

credit rating)

Total

* For some trade receivables, Peninsula Health has obtained security in the form of guarantees which can be called upon if the counterparty is in default under the agreement. There are no financial assets that have had their terms renegotiated so as to prevent them from being past due or impaired, and they are stated at the carrying amounts as indicated. The ageing analysis table above discloses the ageing only of contractual financial assets that are past due but not impaired. There are no material financial assets which are individually determined to be impaired.

Credit risk arises from the contractual financial assets of the Health Service, which comprise cash and deposits, non-statutory receivables and available for sale contractual financial assets. The Health Service’s exposure to credit risk arises from the potential default of a counter party on their contractual obligations resulting in financial loss to the Health Service. Credit risk is measured at fair value and is monitored on a regular basis. Credit risk associated with the Health Service’s contractual financial assets is minimal because the main debtor is the Victorian Government. For debtors other than the Government, it is the Health Service’s policy to only deal with entities with high credit ratings of a minimum Triple-B rating and to obtain sufficient collateral or credit enhancements, where appropriate.In addition, the Peninsula Health does not engage in hedging for its contractual financial assets and mainly obtains contractual financial assets that are on fixed interest, except for cash assets, which are mainly cash at bank. As with the policy for debtors, Peninsula Health’s policy is to only deal with banks with high credit ratings.Provision of impairment for contractual financial assets is recognised when there is objective evidence that Peninsula Health will not be able to collect a receivable. Objective evidence includes financial difficulties of the debtor, default payments, debts which are more than 60 days overdue, and changes in debtor credit ratings.Except as otherwise detailed in the following table, the carrying amount of contractual financial assets recorded in the financial statements, net of any allowances for losses, represents Peninsula Health’s maximum exposure to credit risk without taking account of the value of any collateral obtained.

Impaired Financial Assets

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

Carrying Amount

Not Past Due and Not Impaired

Past Due But Not Impaired

40



Note 18: Financial Instruments continued(e) Liquidity Risk

Carrying Amount Nominal Amount

Less than 1 Month

1-3 Months 3 months - 1 Year

1-13 Years

2015 $'000 $'000 $'000 $'000 $'000 $'000Financial LiabilitiesAt amortised costPayables 14,440 14,440 11,064 1,688 1,688 - Borrowings 9,271 12,562 - 237 711 11,614 Other Financial Liabilities - Accommodation Bonds 768 768 768 - - - - Other 10 10 10 - - - Total Financial Liabilities 24,489 27,780 11,842 1,925 2,399 11,614

2014Financial LiabilitiesAt amortised costPayables 21,516 21,516 18,278 1,619 1,619 - Borrowings 9,762 13,511 - 237 711 12,563 Other Financial Liabilities - Accommodation Bonds 573 573 573 - - - - Other 4 4 4 - - - Total Financial Liabilities 31,855 35,604 18,855 1,856 2,330 12,563

(f) Market Risk

Currency Risk

Interest Rate Risk

Interest Rate Exposure of Financial Assets and Liabilities as at 30 JuneCarryingAmount Fixed Variable Non-interest

interest rate interest rate bearing2015 $'000 $'000 $'000 $'000Financial AssetsCash and Cash Equivalents 20,800 - 20,774 26 Receivables(i) - Trade Debtors 12,975 - - 12,975 Other Financial Assets - Managed Investments 14,146 2,006 - 12,140

47,921 2,006 20,774 25,141 Financial LiabilitiesAt amortised costPayables(i) 14,440 - - 14,440 Borrowings 9,271 9,271 - - Other Financial Liabilities - Accommodation Bonds 768 - - 768 - Other 10 - - 10

24,489 9,271 - 15,218 2014Financial AssetsCash and Cash Equivalents 26,881 - 26,855 26 Receivables(i) - Trade Debtors 14,909 - - 14,909 Other Financial Assets - Managed Investments 16,281 8,006 - 8,275

58,071 8,006 26,855 23,210 Financial LiabilitiesAt amortised costPayables(i) 21,516 - - 21,516 Borrowings 9,762 9,762 - - Other Financial Liabilities - Accommodation Bonds 573 - - 573 - Other 4 - - 4

31,855 9,762 - 22,093 (i) The carrying amount excludes statutory financial assets and liabilities (i.e. GST input tax credit and GST payable).

Interest Rate Exposureeffective interest

rate (%)

2.10%

--


The following table discloses the contractual maturity analysis for Peninsula Health'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 JuneMaturity Dates

Weighted average

Ageing analysis of financial liabilities excludes statutory financial liabilities (i.e GST payable).

Liquidity risk is the risk that the Health Service would be unable to meet its financial obligations as and when they fall due. Peninsula Health operates under the Government's fair payments policy of settling financial obligations within 30 days and in the event of a dispute, making payments within 30 days from the date of resolution. The Health Service’s maximum exposure to liquidity risk is the carrying amounts of financial liabilities as disclosed in the face of the balance sheet. Peninsula Health manages its liquidity risk through regular cash forecasts and ensuring sufficient available cash is held to meet its obligations.

Peninsula Health's exposures to market risk are primarily through interest rate risk, and other price risks such as variability in equity markets, with only an insignificant exposure to foreign currency price risks. Objectives, policies and processes used to manage each of these risks are disclosed in the paragraph below.

Peninsula Health is exposed to insignificant foreign currency risk through its payables relating to purchases of supplies and consumables from overseas. This is because of a limited amount of purchases denominated in foreign currencies and a short timeframe between commitment and settlement.

Exposure to interest rate risk might arise primarily through Peninsula Health's interest bearing financial assets. Minimisation of risk has been achieved by using fixed rate for financial liabilities.

4.79%-

-

-

2.79%

--

-

4.79%-

-

41



Note 18: Financial Instruments continued

(g) Market Risk (continued)Sensitivity Disclosure Analysis

- A shift of +1% and -1% in market interest rates (AUD) from year-end rates of 2.10% (2014: 2.79%); - A parallel shift of +5% and -5% in inflation rate from year-end rates of 4.44% (2014: 4.44%).

CarryingAmount

Profit Equity Profit Equity Profit Equity Profit Equity2015 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000Financial AssetsCash and Cash Equivalents(i) 20,800 (208) (208) 208 208 - - - - Receivables(ii)

- Trade Debtors 12,975 - - - - - - - - Other Financial Assets - Managed Investments 14,146 (20) (20) 20 20 (607) (607) 607 607 Financial LiabilitiesAt amortised costPayables 14,440 - - - - - - - - Borrowings (fixed rate) 9,271 - - - - - - - - Other Financial Liabilities - Accommodation Bonds 768 - - - - - - - - - Other 10 - - - - - - - -

(228) (228) 228 228 (607) (607) 607 607 2014Financial AssetsCash and Cash Equivalents(i) 26,881 (269) (269) 269 269 - - - - Receivables(ii)

- Trade Debtors 14,909 - - - - - - - - Other Financial Assets - Managed Investments 16,281 (80) (80) 80 80 (414) (414) 414 414 Financial LiabilitiesAt amortised costPayables 21,516 - - - - - - - - Borrowings (fixed rate) 9,762 - - - - - - - - Other Financial Liabilities - Accommodation Bonds 573 - - - - - - - - - Other 4 - - - - - - - -

(349) (349) 349 349 (414) (414) 414 414

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

Interest Rate Risk Other Price Risk -1% +1%

(i) eg. Sensitivity of cash and cash equivalents to a +1% movement in interest rates: [$20,800k*0.031]-[$20,800k*0.021] = $208k. Similar for a -1% movement in interest rate, impact = $(208k).

-5% +5%

Taking into account past performance, future expectations, economic forecasts, the views of external consultants, and management's knowledge and experience of the financial markets, the Health Service believes the following movements are 'reasonably possible' over the next 12 months (base rates are sourced from the Reserve Bank of Australia):

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


42



Note 18: Financial Instruments continued

(h) Fair Value

Carrying Fair Value Carrying Fair ValueAmount Amount Amount Amount

2015 2015 2014 2014$'000 $'000 $'000 $'000

Financial AssetsCash and cash equivalents 20,800 20,800 26,881 26,881 Receivables 12,975 12,975 14,909 14,909 Other Financial Assets 14,146 14,146 16,281 16,281 Total Financial Assets 47,921 47,921 58,071 58,071

Financial LiabilitiesAt amortised costPayables 14,440 14,440 21,516 21,516 Borrowings 9,271 9,271 9,762 9,762 Accommodation Bonds 768 768 573 573 Other Liabilities 10 10 4 4 Total Financial Liabilities 24,489 24,489 31,855 31,855

Financial Assets measured at fair value

Carrying Amount as at 30 June

Level 1 Level 2 Level 32015 $'000 $'000 $'000 $'000Financial assets at fair value through profit & lossAvailable for sale financial assets - Equities and managed funds 14,146 14,146 - - Total Financial Assets 14,146 14,146 - -

2014Financial assets at fair value through profit & lossAvailable for sale financial assets - Equities and managed funds 16,281 16,281 - - Total Financial Assets 16,281 16,281 - -


Fair value measurement at end of year using:

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

There have been no transfers between levels during the period.

The financial assets include holdings in listed shares. The listed share assets are valued at fair value with reference to a quoted (unadjusted) market price from an active market. Peninsula Health categorises these instruments as Level 1.

Peninsula Health considers that the carrying amount of financial instrument assets and liabilities recorded in the financial statements to be a fair approximation of their fair values, because of the short-term nature of the financial instruments and the expectation that they will be paid in full.Accordingly, the following table presents that the fair values of most of the contractual financial assets and liabilities, are the same as the carrying amounts.

Comparison between carrying amount and fair value

43



Note 19: Commitments for Expenditure & Contingencies

2015 2014$'000 $'000

Capital Expenditure CommitmentsPayable:- Land and Buildings 3,782 35,010 - Plant & Equipment 4,144 8,754 Total Capital Commitments 7,926 43,764

Not later than one year 7,926 38,764 Later than one year and not later than 5 years - 5,000 Total Capital commitments inclusive of GST 7,926 43,764

Less GST recoverable from the Australian Tax Office 721 3,979 Total Capital commitments exclusive of GST 7,205 39,785

Lease CommitmentsCommitments in relation to leases contracted for at the reporting date:- Operating leases 854 357 Total Lease Commitments 854 357

Operating LeasesNon-CancellableNot later than one year 463 216 Later than one year and not later than 5 years 391 141 Later than 5 years - - Sub-total 854 357 Total Lease commitments inclusive of GST 854 357

Less GST recoverable from the Australian Tax Office 78 32 Total Lease commitments exclusive of GST 777 325

Contingent Assets and Contingent Liabilities


As at 30 June 2015, Peninsula Health does not have any contingent assets or liabilities (2014: Nil).

44



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45




Note 20: Segment Reporting continued

Business Segments

Residential Aged Care Services (RACS)The Commonwealth Government regulates and partly funds the provision of residential care for older people who can no longer live independently in their own home. Carinya is a 30-bed purpose built Aged Persons Mental Health Residential Care Facility designed to provide high level specialist nursing care to residents with complex mental health diagnoses.

Personal Alarm Call Systems (MEPACS)MEPACS provides personal alarm services to private clients as well as government funded (PAV) clients. Personal Alert Victoria (PAV) is a 24 hour personal monitoring service that responds to calls for assistance and is funded by the Victorian Government through the Department of Health. This segment reporting note excludes some corporate costs and significant capital expenditure items.

Acute CarePeninsula Health provides inpatient and outpatient care within the areas of general and specialty medical and surgical services, maternity, paediatric and emergency services.

Mental HealthPeninsula Mental Health Service provides a range of mental health services including aged and adult acute inpatient services, community liaison early intervention acute and recovery services (CLEARS), consultation liaison inpatient psychiatric services (CLIPS) and community care units (residential care).

Aged CarePeninsula Health provides a range of inpatient, interim care and domiciliary aged care and rehabilitation services as well as palliative care and Hospital in the Home services.

Primary HealthPeninsula Health provides support for the community in the areas of audiology, counselling, nutrition, podiatry, physiotherapy, cardiac rehabilitation, diabetes education, health education and health promotion.

Geographical SegmentPeninsula Health operates predominantly in Melbourne (South Eastern Suburbs and Mornington Peninsula), Victoria. Peninsula Health's revenue, net surplus from ordinary activities and segment assets relate to operations in that area.


46



Note 21: Responsible Persons Disclosures

(a) Responsible Persons

Responsible MinisterThe Honourable David Davis MLC, Minister for Health and Minister for Ageing 1-Jul-2014 3-Dec-2014The Honourable Mary Wooldridge MP, Minister for Mental Health 1-Jul-2014 3-Dec-2014The Honourable Jill Hennessy, Minister for Health, Minister for Ambulance Services 4-Dec-2014 30-Jun-2015The Honourable Martin Foley, Minister for Housing, Disability and Ageing, Minister for Mental Health 4-Dec-2014 30-Jun-2015

Governing BoardMs Nancy Hogan 1-Jul-2014 30-Jun-2015Mr Michael Tiernan 1-Jul-2014 30-Jun-2015Mr Geoffrey Rankin 1-Jul-2014 30-Jun-2015Professor Henry Ekert AM 1-Jul-2014 30-Jun-2015Mr Jonathan Tribe 1-Jul-2014 30-Jun-2015Ms Erika Wilke 1-Jul-2014 30-Jun-2015Mr Michael Carroll 1-Jul-2014 30-Jun-2015Dr Laurie Warfe 1-Jul-2014 30-Jun-2015Ms Bronwyn Lewis 14-Oct-2014 30-Jun-2015

Accountable OfficerDavid Anderson 1-Jul-2014 3-Aug-2014Sue Williams 4-Aug-2014 30-Jun-2015

(b) Remuneration of Responsible Persons & Accountable Officer

2015 2014No. No.

Income Band$0 - $9,999 1 1$10,000 - $19,999 1 -$20,000 - $29,999 6 7$40,000 - $49,999 1 1$120,000 - $129,999 - 1$340,000 - $349,999 1 -$440,000 - $449,000 - 1Total Numbers 10 11

$'000 $'000Total remuneration for the reporting period for Responsible Persons included above amounted to: 527 768

(c) Other Transactions of Responsible Persons and their Related Parties

Period

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

There were no other transactions between the Health Service and the Responsible Persons or their Related parties.

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.

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


47



Note 22: Executive Officer Disclosures

Executive Officer Remuneration

The number of executive officers, other than Ministers and Accountable Officers, and their total remunerationduring the reporting period are shown in the first and third column in the table below in their relevant income bands.The base remuneration of executive officers is shown in the second and fourth column. Base remuneration isexclusive of bonus payments, long-service leave payments, redundancy payments and retirement benefits.The total annualised employee equivalent provides a measure of full time equivalent executive officers over the reporting period.

TOTAL BASE TOTAL BASEIncome Band No. No. No. No.$10,000 - $19,999 - - 1 1$50,000 - $59,999 2 3 - -$60,000 - $69,999 1 - - -$110,000 - $119,999 - - - 1$120,000 - $129,999 - 1 1 -$130,000 - $139,999 - - - 1$140,000 - $149,999 1 - - -$150,000 - $159,999 - - 1 -$180,000- $189,999 - - - 1$200,000 - $209,999 - - - 1$210,000 - $219,999 - 1 - -$220,000 - $229,999 - - 1 -$230,000 - $239,999 - 1 1 2$240,000 - $249,999 1 2 - -$250,000 - $259,999 - - - -$260,000 - $269,999 - - - -$270,000 - $279,999 1 - 2 -$280,000 - $289,999 2 - - -

Total number of executives 8 8 7 7Total annualised employee equivalent (AEE)* 5.3 5.3 5.5 5.5

$'000 $'000 $'000 $'000Total remuneration for the reporting period for Executive Officers included above amounted to: 1,413 1,225 1,302 1,134

* Annualised employee equivalent is based on working 40 ordinary hours per week over the reporting period.

Note 23: Remuneration of Auditors2015 2014$'000 $'000

Audit fees paid or payable to the Victorian Auditor-General'sOffice for audit of Peninsula Health's financial statements:- Paid and Payable as at 30 June 105 102 Total Paid and Payable 105 102

Note 24: Ex Gratia Payments2015 2014$'000 $'000

Peninsula Health has made the following ex gratia payments:- Ex gratia payments 25 5 Total Paid 25 5

Note 25: Subsequent Events

The term of office for three Board members expired on 30 June 2015. Replacement Board members have not yet beenappointed by the Minister for Health.

There have been no other events subsequent to reporting date that require additional disclosure.

2015 Remuneration 2014 Remuneration


48




Note 26: Discontinued Operation

Financial information relating to the discontinued operation for the period to the date of disposal is set out below.The financial performance and cashflow information presented are for the four months ended 30 October 2014and the year ended 30 June 2015.

(a) Net result from discontinued operations

2015 2014$'000 $'000

Revenue from ordinary activities 547 1,747 Expenses from ordinary activities (1,383) (2,120)Net Result (836) (373)

Gain/(Loss) on disposal of Operation 155 - Net Result from Discontinued Operation (681) (373)

Net Cash Inflow/(Outflow) from Operating Activities (836) (373)Net Cash Inflow/(Outflow) from Investing Activities (2014 includes an inflow of $1,954,000 from the sale of RRAC) 2,143 1,954 Total Cash Inflow/(Outflow) from Discontinued Operation 1,307 1,581

(b) Details of the sale of Michael Court Hostel

Consideration received or receivable:- Cash (net of direct selling costs) 2,143 - - Less direct selling costs (100) - Total disposal consideration 2,043 -

Carrying amounts of assets and liabilities as at the date of sale were:- Property, plant and equipment 1,888 - Total Assets 1,888 -

- Liabilities - - Total Liabilities - -

Net Assets 1,888 -

Gain/(Loss) on Disposal of Operation 155 -


In July 2014 the Commonwealth Government introduced the Aged Care reform which introduced significant changes to the provision of Aged Care. The Department of Health and Human Services also changed its policy seeking to transfer responsibility for Public Sector Residential Aged Care Service (PSRACS) to the private or not for profit sector.As part of Peninsula Health’s strategic planning it was not financially sustainable to continue operating residential Mental Health Aged Care facilities in the two locations. In August 2014, the process was commenced to discontinue providing low level care to residents at Michael Court Hostel and over the ensuing months, all Residents were transferred to other Residential Aged Care Facilities within the area. The facility was closed on 30 October 2014 once all residents were transferred. The land and buildings were sold in May 2015 and the effect of this disposal reported in these financial statements as a discontinued operation.

49

We acknowledge and pay respect to the traditional people of this region, known as the Myone Buluk of the Boon Wurrung language group of the greater Kulin Nation. We pay our respects to the land this organisation stands on today. We bestow the same courtesy to all other First Peoples, past and present, who now reside in this region.

peninsulahealth.org.au

Peninsula HealthABN 52 892 860 159

Hastings Road

(PO Box 52)

Frankston Vic 3199

Tel (03) 9784 7777

Callers outside the Melbourne

Metropolitan Area

Tel 1800 858 727

© 2015 Peninsula HealthThis work is copyright. You may use material from this publication without altering it for personal or non-commercial use only. You may not store, amend or reproduce material for any other use or by any process without obtaining prior written permission.

For further information about Peninsula Health or to download our annual publications, please visit our website, www.peninsulahealth.org.au.

For printed copies of our publications, please phone Corporate and Community Relations on (03) 9788 1501.

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