Health AR 2016-17 Volume 1 Covering.indd - Parliament of NSW

Financial Statementsof NSW Health Organisations under control of the NSW Ministry of Health 2016-17Volume OneUnder the Annual Reports (Departments) Act 1985 the NSW Ministry of Health is required to table the audited financial statements of each controlled entity.

This volume of the Annual Report contains the Financial Statements of each entity indexed as follows:

ENTITY COVER PAGE

Metropolitan NSW Local Health DistrictsCentral Coast .................................................................................................................................................... 1Illawarra Shoalhaven ..................................................................................................................................... 2Nepean Blue Mountains .............................................................................................................................. 3Northern Sydney ............................................................................................................................................4South Eastern Sydney .................................................................................................................................. 5South Western Sydney ................................................................................................................................6Sydney .................................................................................................................................................................7Western Sydney ..............................................................................................................................................8

COVER PAGE 1

Central Coast Local Health District

Financial Statements for the year ended 30 June 2017

INDEPENDENT AUDITOR’S REPORT


To Members of the New South Wales Parliament

Opinion

I have audited the accompanying financial statements of the Central Coast Local Health District

(the District), which comprise the statement of financial position as at 30 June 2017, the statement of

comprehensive income, the statement of changes in equity and the statement of cash flows, and the

service group statements for the year then ended, notes comprising a summary of significant accounting

policies and other explanatory information of the District and the consolidated entity. The consolidated

entity comprises the District and the entities it controlled at the year’s end or from time to time during the

financial year.

In my opinion, the financial statements:

• give a true and fair view of the financial position of the District and the consolidated entity as at

30 June 2017, and of their financial performance and cash flows for the year then ended in

accordance with Australian Accounting Standards

• are in accordance with section 45E of Public Finance and Audit Act 1983 (PF&A Act) and the

Public Finance and Audit Regulation 2015.

My opinion should be read in conjunction with the rest of this report.

Basis for Opinion

I conducted my audit in accordance with Australian Auditing Standards. My responsibilities under the

standards are described in the ‘Auditor’s Responsibilities for the Audit of the Financial Statements’ section

of my report.

I am independent of the District and the consolidated entity in accordance with the requirements of the:

• Australian Auditing Standards

• Accounting Professional and Ethical Standards Board’s APES 110 ‘Code of Ethics for

Professional Accountants’ (APES 110).

I have also fulfilled my other ethical responsibilities in accordance with APES 110.

Parliament further promotes independence by ensuring the Auditor-General and the Audit Office of New

South Wales are not compromised in their roles by:

• providing that only Parliament, and not the executive government, can remove an Auditor–

General

• mandating the Auditor-General as auditor of public sector agencies

• precluding the Auditor-General from providing non-audit services.

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

opinion.

Emphasis of Matter – Presentation of Budget Information

Without modification to the opinion expressed above, I draw attention to the basis of presenting adjusted

budget information detailed in Note 1(ad). The note states that AASB 1055 ‘Budgetary Reporting’ is not

applicable to the District. It also states that, unlike the requirement in AASB 1055 ‘Budgetary Reporting’ to

present original budget information, the District’s financial statements present adjusted budget

information.

The Chief Executive’s Responsibility for the Financial Statements

The Chief Executive is responsible for the preparation and fair presentation of the financial statements in

accordance with Australian Accounting Standards and the PF&A Act, and for such internal control as the

Chief Executive determines is necessary to enable the preparation and fair presentation of financial

statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Chief Executive must assess the ability of the District and the

consolidated entity to continue as a going concern except where operations will be dissolved by an Act of

Parliament or otherwise cease. The assessment must, disclose, as applicable, matters related to going

concern and the appropriateness of using the going concern basis of accounting.

Auditor’s Responsibility for the Audit of the Financial Statements

My objectives are to:

• obtain reasonable assurance about whether the financial statements as a whole are free from

material misstatement, whether due to fraud or error, and

• issue an Independent Auditor’s Report including my opinion.

Reasonable assurance is a high level of assurance, but does not guarantee an audit conducted in

accordance with Australian Auditing Standards will always detect material misstatements. Misstatements

can arise from fraud or error. Misstatements are considered material if, individually or in aggregate, they

could reasonably be expected to influence the economic decisions users take based on the financial

statements.

A description of my responsibilities for the audit of the financial statements is located at the Auditing and

Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar3.pdf.

The description forms part of my auditor’s report.

My opinion does not provide assurance:

• that the District or the consolidated entity carried out their activities effectively, efficiently and

economically

• about the security and controls over the electronic publication of the audited financial

statements on any website where they may be presented

• about any other information which may have been hyperlinked to/from the financial statements.

Sally Bond

Director, Financial Audit Services

31 August 2017

SYDNEY

http://www.auasb.gov.au/auditors_responsibilities/ar3.pdf

Actual AdjustedBudget

Unaudited

Actual Notes Actual AdjustedBudget

Unaudited

Actual

2017 2017 2016 2017 2017 2016

$000 $000 $000 $000 $000 $000

Expenses excluding losses

Operating Expenses

----- ----- ----- Employee Related 2 539,846 536,895 520,077

526,818 523,840 494,436 Personnel Services 3 ----- ----- -----

27,460 28,073 28,385 Visiting Medical Officers 27,460 28,073 28,385

212,106 214,903 183,831 Other Operating Expenses 4 212,106 214,903 183,831

22,350 22,417 22,787 Depreciation and Amortisation 1(m), 5 22,350 22,417 22,787

7,246 6,995 27,351 Grants and Subsidies 6 7,246 6,995 27,351

795,980 796,228 756,790 Total Expenses excluding losses 809,008 809,283 782,431

Revenue

635,353 635,353 601,253 NSW Ministry of Health Recurrent Allocations 1(h) 635,353 635,353 601,253

123,924 124,436 48,275 NSW Ministry of Health Capital Allocations 1(h) 123,924 124,436 48,275

----- ----- ----- Acceptance by the Crown Entity of Employee Benefits 1(e)(ii),10 13,028 13,055 25,641

117,693 122,447 92,615 Sale of Goods and Services 1(h), 7 117,693 122,447 92,615

966 358 435 Investment Revenue 1(h),8 966 358 435

13,861 13,289 34,200 Grants and Contributions 1(h),9 13,861 13,289 34,200

12,498 5,748 7,000 Other Revenue 11 12,498 5,748 7,000

904,295 901,631 783,778 Total Revenue 917,323 914,686 809,419

(1,085) (756) (283) Gain / (Loss) on Disposal 12 (1,085) (756) (283)

(248) (159) (437) Other Gains / (Losses) 13 (248) (159) (437)

106,982 104,488 26,268 Net Result 28 106,982 104,488 26,268

Other Comprehensive Income

Items that will not be reclassified to net result

Net Increase/(Decrease) in Property, Plant &

9,143 ----- ----- Equipment Revaluation Surplus 19 9,143 ----- -----

9,143 ----- ----- Total Other Comprehensive Income 9,143 ----- -----

116,125 104,488 26,268 TOTAL COMPREHENSIVE INCOME 116,125 104,488 26,268

The accompanying notes form part of these financial statements.


Statement of Comprehensive Income for the year ended 30 June 2017

CONSOLIDATIONPARENT


Unaudited


Unaudited

Actual

2017 2017 2016 2017 2017 2016

$000 $000 $000 $000 $000 $000

ASSETS

Current Assets

24,655 19,299 18,839 Cash and Cash Equivalents 15 24,655 19,299 18,839

14,313 20,605 20,459 Receivables 16 14,313 20,605 20,459

4,999 5,324 5,323 Inventories 17 4,999 5,324 5,323

7,409 6,784 6,784 Financial Assets at Fair Value 18 7,409 6,784 6,784

51,376 52,012 51,405 Total Current Assets 51,376 52,012 51,405

Non-Current Assets

Property, Plant & Equipment

625,510 615,325 509,344 - Land and Buildings 19 625,510 615,325 509,344

25,520 26,973 26,441 - Plant and Equipment 19 25,520 26,973 26,441

16,782 17,405 17,326 - Infrastructure Systems 19 16,782 17,405 17,326

1,595 116 116 - Leasehold Improvements 19 1,595 116 116

669,407 659,819 553,227 Total Property, Plant & Equipment 669,407 659,819 553,227

669,407 659,819 553,227 Total Non-Current Assets 669,407 659,819 553,227

720,783 711,831 604,632 Total Assets 720,783 711,831 604,632

LIABILITIES

Current Liabilities

39,998 46,406 45,000 Payables 22 39,998 46,406 45,000

74,084 70,470 69,249 Provisions 23 74,084 70,470 69,249

1,096 984 917 Other 24 1,096 984 917

115,178 117,860 115,166 Total Current Liabilities 115,178 117,860 115,166

Non-Current Liabilities

789 789 775 Provisions 23 789 789 775

789 789 775 Total Non-Current Liabilities 789 789 775

115,967 118,649 115,941 Total Liabilities 115,967 118,649 115,941

604,816 593,182 488,691 Net Assets 604,816 593,182 488,691

EQUITY

49,894 40,022 40,021 Reserves 49,894 40,022 40,021

554,922 553,161 448,670 Accumulated Funds 554,922 553,161 448,670

604,816 593,183 488,691 Total Equity 604,816 593,183 488,691


CONSOLIDATIONPARENT

Central Coast Local Health DistrictStatement of Financial Position as at 30 June 2017

PARENT AND CONSOLIDATION Notes Accumulated Revaluation Total

Funds Surplus

$000 $000 $000

Balance at 1 July 2016 448,670 40,021 488,691

Total Equity at 1 July 2016 448,670 40,021 488,691

Net Result for the year 106,982 ----- 106,982

Other Comprehensive Income:

Net Increase/(Decrease) in Property, Plant & Equipment 19 ----- 9,143 9,143

Available for Sale Financial Assets:

Transfers on Disposal (730) 730 -----

Total Other Comprehensive Income (730) 9,873 9,143

Total Comprehensive Income for the year 106,252 9,873 116,125

Balance at 30 June 2017 554,922 49,894 604,816

Balance at 1 July 2015 426,295 36,128 462,423





Transfers on Disposal (3,893) 3,893 -----

Total Other Comprehensive Income (3,893) 3,893 -----

Total Comprehensive Income for the year 22,375 3,893 26,268

Balance at 30 June 2016 448,670 40,021 488,691



Statement of Changes in Equity for the year ended 30 June 2017


Unaudited


Unaudited

Actual

2017 2017 2016 2017 2017 2016

$000 $000 $000 $000 $000 $000

CASH FLOWS FROM OPERATING ACTIVITIES

Payments

----- ----- ----- Employee Related (528,157) (529,942) (502,904)

(8,017) (7,765) (8,114) Grants and Subsidies (8,017) (7,765) (8,114)

(798,335) (796,409) (728,653) Other (270,178) (266,467) (225,749)

(806,352) (804,174) (736,767) Total Payments (806,352) (804,174) (736,767)

Receipts

635,353 635,353 601,253 NSW Ministry of Health Recurrent Allocations 635,353 635,353 601,253

123,924 124,436 48,275 NSW Ministry of Health Capital Allocations 123,924 124,436 48,275

7,748 7,748 8,101 Reimbursements from the Crown Entity 7,748 7,748 8,101

119,605 124,363 93,434 Sale of Goods and Services 119,605 124,363 93,434

966 358 435 Interest Received 966 358 435

14,910 14,300 15,186 Grants and Contributions 14,910 14,300 15,186

36,920 23,967 20,779 Other 36,920 23,967 20,779

939,426 930,525 787,463 Total Receipts 939,426 930,525 787,463

133,074 126,351 50,696 NET CASH FLOWS FROM OPERATING ACTIVITIES 28 133,074 126,351 50,696

CASH FLOWS FROM INVESTING ACTIVITIES

144 ----- 83 Proceeds from Sale of Property, Plant & Equipment 144 ----- 83

(126,776) (125,891) (48,885) Purchases of Property, Plant & Equipment (126,776) (125,891) (48,885)

(626) ----- (65) Purchases of Investments (626) ----- (65)

(127,258) (125,891) (48,867) NET CASH FLOWS FROM INVESTING ACTIVITIES (127,258) (125,891) (48,867)

5,816 460 1,829 NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS 5,816 460 1,829

18,839 18,839 17,010 Opening Cash and Cash Equivalents 15 18,839 18,839 17,010

24,655 19,299 18,839 CLOSING CASH AND CASH EQUIVALENTS 15 24,655 19,299 18,839



Statement of Cash Flows for the year ended 30 June 2017

CONSOLIDATIONPARENT

1. Summary of Significant Accounting Policies

a)

*

*

b)

*

*

*

As a consequence the values in the financial statements presented herein consist of the parent entity and the consolidated entity which comprises the parent and special purpose service entity. In the process of preparing the consolidated financial statements consisting of the controlling and controlled entities, all inter-entity transactions and balances have been eliminated, and like transactions and other events are accounted for using uniform accounting policies.

CCLHD is a NSW Government entity and is controlled by the NSW Ministry of Health, which is the immediate parent. The reporting entity is also controlled by the State of New South Wales (and is consolidated as part of the NSW Total State Sector Accounts), which is the ultimate parent. The reporting entity is a not-for-profit entity (as profit is not its principal objective).

These consolidated financial statements for the year ended 30 June 2017 have been authorised for issue by the Chief Executive on 30 August 2017.

Basis of Preparation

The District's financial statements are general purpose financial statements which have been prepared on an accrual basis and in accordance with applicable Australian Accounting Standards (which include Australian Accounting Interpretations), the requirements of the Health Services Act 1997 and its regulations (including observation of the Accounts and Audit Determination for Public Health Organisations), the Public Finance and Audit Act 1983 and Public Finance and Audit Regulation 2015 (the Act), and the financial Reporting Directions issued by the Treasurer under the Act. The financial statements comply with the NSW Treasury mandates circular for NSW General Government Sector Entities. Further information on the adjusted budget figures can be found at Note 1(ad).

The financial statements of the District have been prepared on a going concern basis.

The Secretary of Health, the Chair of the Central Coast Local Health District Board and the Chief Executive, through the Service Agreement have agreed to service and funding levels for the forward financial year. The Service Agreement sets out the level of financial resources for public health services under the District's control and the source of these funds. By agreement, the Service Agreement requires local management to control its financial liquidity and in particular meet benchmarks for the payment of creditors. Where the District fails to meet Service Agreement performance standards, the Ministry of Health as the state manager can take action in accordance with annual performance framework requirements, including financial support and increased management interaction by the Ministry.

Other circumstances why the going concern assumption is appropriate include:

The parent entity, comprises all the operating activities of the Hospital Facilities and the Community Health Centres under its control. It also encompasses the Restricted Assets (as disclosed in notes 14 and 21), which, while containing assets which are restricted for specified uses by the grantor or the donor, are nevertheless controlled by the parent entity.

The Central Coast Local Health District Special Purpose Service Entity which was established as a Division of the District on 1 January 2011 in accordance with the Health Services Act 1997. This Division provides personnel services to enable the District to exercise its functions.

The District, as a reporting entity, comprises all the entities under its control, namely:

The Reporting Entity

The Central Coast Local Health District (the District) was established under the provisions of the Health Services Act 1997 with effect from 1 January2011.


Notes to and forming part of the Financial Statements

for the year ended 30 June 2017

The District has the capacity to review timing of subsidy cashflows to ensure that debts can be paid when they become due and payable.

The District has developed an Efficiency and Improvement Plan (EIP) which identifies revenue improvement and cost saving strategies. Benefits from the EIP are retained by the District and assist in meeting its overall budget target. The EIP is monitored and evaluated by the Ministry throughout the financial year.

Allocated funds, combined with other revenues earned, are applied to pay debts as and when they become due and payable.

Property, plant and equipment, assets (or disposal groups) held for sale and financial assets at 'fair value through profit and loss' and available for saleare measured at fair value. Other financial statement items are prepared in accordance with the historical cost convention except where specifiedotherwise.

Judgements, key assumptions and estimations management has made are disclosed in the relevant notes to the financial statements.

All amounts are rounded to the nearest one thousand dollars and are expressed in Australian currency.





c)

d)

e)

i)

ii)

iii)

iv)

f)

Consequential costs to employment are recognised as liabilities and expenses where the employee benefits to which they relate have been recognised. This includes outstanding amounts of workers’ compensation insurance premiums and fringe benefits tax.

Salaries and wages (including non-monetary benefits) and paid sick leave that are expected to be settled wholly within 12 months after the end of the period in which the employees render the service are recognised and measured at the undiscounted amounts of the benefits.

Annual leave is not expected to be settled wholly before twelve months after the end of the annual reporting period in which the employees render the related service. As such, it is required to be measured at present value in accordance with AASB 119 Employee Benefits (although short-cut methods are permitted).

Actuarial advice obtained by NSW Treasury, a controlled entity of the ultimate parent, has confirmed that using the nominal annual leave balance plus the annual leave entitlements accrued while taking annual leave can be used to approximate the present value of the annual leave liability. On-costs of 17.2% are applied to the value of leave payable at 30 June 2017 (comparable on-costs for 30 June 2016 were 16.7%).The District has assessed the actuarial advice based on the District’s circumstances and has determined that the effect of discounting is immaterial to annual leave.

Unused non-vesting sick leave does not give rise to a liability as it is not considered probable that sick leave taken in the future will be greater than the benefits accrued in the future.

The District's liability for Long Service Leave and defined benefit superannuation (State Authorities Superannuation Scheme and State Superannuation Scheme) are assumed by the Crown Entity, which is a controlled entity of the ultimate parent.

The District accounts for the liability as having been extinguished resulting in the amount assumed being shown as part of the non-monetary revenue item described as 'Acceptance by the Crown Entity of employee benefits'.

Specific on-costs relating to Long Service Leave assumed by the Crown Entity are borne by the District as shown in Note 23.

Long Service Leave is measured at present value in accordance with AASB 119, Employee Benefits. This is based on the application of certain factors (specified in NSW Treasury Circular 15/09) to employees with five or more years of service, using current rates of pay. These factors were determined based on an actuarial review to approximate present value.

The superannuation expense for the reporting period is determined by using the formulae specified in the Treasurer’s Directions. The expense for certain superannuation schemes (i.e. Basic Benefit and First State Super) is calculated as a percentage of the employee's salary. For other superannuation schemes (i.e. State Superannuation Scheme and State Authorities Superannuation Scheme), the expense is calculated as a multiple of the employee's superannuation contributions.

The financial statements and notes comply with Australian Accounting Standards which include Australian Accounting Interpretations.

The District's insurance activities are conducted through the NSW Treasury Managed Fund (TMF) Scheme of self insurance for government entities.The expense (premium) is determined by the Fund Manager based on past claims experience.The TMF is managed by Insurance and Care NSW(iCare), a controlled entity of the ultimate parent.

Long Service Leave and Superannuation

Consequential On-Costs

Other Provisions

Comparative Information

Except when an Australian Accounting Standard permits or requires otherwise, comparative information is disclosed in respect of the previous periodfor all amounts reported in the financial statements.

Statement of Compliance

Employee Benefits and Other Provisions

Insurance

Salaries & Wages, Annual Leave, Sick Leave and On-Costs

Other provisions exist when the District has a present legal or constructive obligation as a result of a past event; it is probable that an outflow of resources will be required to settle the obligation; and a reliable estimate can be made of the amount of the obligation.





g)

h)

State Insurance Regulatory Authority (SIRA)

*

*

Finance costs are recognised as expenses in the period in which they are incurred in accordance with NSW Treasury's Mandate to not-for-profit NSWgeneral government sector entities.

Specialist doctors with rights of private practice are subject to an infrastructure charge for the use of hospital facilities at rates determined by the NSWMinistry of Health. Charges consist of two components:

Finance Costs

Income Recognition

Sale of Goods

Rendering of Services

Investment Revenue

A bulk billing agreement exists in which motor vehicle insurers effect payment directly to NSW Health for the hospital costs for those personshospitalised or attending for inpatient treatment as a result of motor vehicle accidents. The District recognises the revenue on an accruals basis fromthe time the patient is treated or admitted into hospital.

Debts are accounted for as extinguished when and only when settlement occurs through repayment or replacement by another liability.

Debt Forgiveness

Income is measured at the fair value of the consideration or contribution received or receivable. Additional comments regarding the accounting policiesfor the recognition of revenue are discussed below.

Revenue from the sale of goods is recognised as revenue when the District transfers the significant risks and rewards of ownership of the assets.

Revenue is recognised when the service is provided or by reference to the stage of completion (based on labour hours incurred to date).

Patient fees are derived from chargeable inpatients and non-inpatients on the basis of rates specified by the NSW Ministry of Health. Revenue isrecognised on an accrual basis when the service has been provided to the patient.

Revenue for highly specialised drugs is paid by the Commonwealth in accordance with the terms of the Commonwealth agreement through Medicareand reflects the recoupment of costs incurred under Section 100 of the National Health Act 1953 for highly specialised drugs. The agreement providesfor the provision of medicines for the treatment of chronic conditions where specific criteria are met in respect of day admitted patients, non admittedpatients or patients on discharge. Revenue is recognised when the drugs have been provided to the patient.

Patient Fees

Department of Veterans' Affairs

An agreement is in place with the Commonwealth Department of Veterans' Affairs through which direct funding is provided for the provision of healthservices to entitled veterans. For inpatient services, revenue is recognised by the District on an accrual basis by reference to patient admissions. Nonadmitted patients are recognised by the Ministry of Health in the form of a block grant.

Interest revenue is recognised using the effective interest method as set out in AASB 139, Financial Instruments: Recognition and Measurement.

Highly Specialised Drugs

a monthly charge raised by the District based on a percentage of receipts generated.

the residual of the Private Practice Trust Fund at the end of each financial year, such sum being credited for the District use in the advancement of the District or individuals within it.

Use of Hospital Facilities

Refer to Note 7(b) for further details.





i)

*

*

j)

k)

l)

Grants and contributions are recognised as revenues when the District obtains control over the assets comprising the contributions. Control overcontributions is normally obtained upon the receipt of cash.

Cash flows are included in the Statement of Cash Flows on a gross basis. However, the GST components of cash flows arising from investing andfinancing activities which are recoverable from, or payable to, the Australian Taxation Office are classified as operating cash flows.

The District uses a number of facilities owned and maintained by the local authorities in the area to deliver community health services for which nocharges are raised by the authorities.

Capitalisation Thresholds

Payments are made by the immediate parent on the basis of the allocation for the District as adjusted for approved supplementations mostly for salaryagreements and approved enhancement projects.

This allocation is included in the Statement of Comprehensive Income before arriving at the "Net Result" on the basis that the allocation is earned inreturn for the health services provided on behalf of the Ministry. Allocations are normally recognised upon the receipt of cash.

Income, expenses and assets are recognised net of the amount of GST, except that the:

General operating expenses/revenues of CCLHD have only been included in the Statement of Comprehensive Income prepared to the extent of thecash payments made to the Health Organisations concerned. The District is not deemed to own or control the various assets/liabilities of theaforementioned Health Organisations and such amounts have been excluded from the Statement of Financial Position. Any exceptions arespecifically listed in the notes that follow.

amount of GST incurred by the District as a purchaser that is not recoverable from the Australian Taxation Office is recognised as part of an asset's cost of acquisition or as part of an item of expense; and

receivables and payables are stated with the amount of GST included.

Where material, the cost method of accounting is used for the initial recording of all such services. Cost is determined as the fair value of the servicesgiven and is then recognised as revenue with a matching expense.

NSW Ministry of Health Allocations

Accounting for the Goods & Services Tax (GST)

Use of Outside Facilities

Grants and Contributions

Interstate Patient Flows

Land and buildings are owned by the Health Administration Corporation, an entity controlled by the immediate parent. Land and buildings which areoperated/occupied by the District are deemed to be controlled by the District and are reflected as such in the financial statements.

Assets acquired are initially recognised at cost. Cost is the amount of cash or cash equivalents paid or the fair value of the other consideration given toacquire the asset at the time of its acquisition or construction or, where applicable, the amount attributed to that asset when initially recognised inaccordance with the requirements of other Australian Accounting Standards.

Acquisition of Assets

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

Fair value is the price that would be received to sell an asset in an orderly transaction between market participants at measurement date.

Where payment for an asset is deferred beyond normal credit terms, its cost is the cash price equivalent, i.e. the deferred payment amount iseffectively discounted over the period of credit.

Interstate patient flows are funded through the State Pool, based on activity and consistent with the price determined in the service level agreement.The funding is recognised as recurrent allocation received from the immediate parent.

Individual items of Property, Plant & Equipment are capitalised where their cost is $10,000 or above.





m) Depreciation of Property, Plant and Equipment

2.5%

2.5%

Plant and Equipment

20%

10%

12.5%

5%

25%

12.5%

20%

10%

10%

n) Revaluation of Non-Current Assets

When revaluing non-current assets using the cost approach, the gross amount and the related accumulated depreciation are separately restated.

For other assets valued using other valuation techniques, any balances of accumulated depreciation existing at the revaluation date in respect of thoseassets are credited to the asset accounts to which they relate. The net asset accounts are then increased or decreased by the revaluation incrementsor decrements.

Revaluation increments are credited directly to the revaluation surplus, except that, to the extent that an increment reverses a revaluation decrementin respect of that class of asset previously recognised as an expense in the net result, the increment is recognised immediately as revenue in the netresult.

Revaluation decrements are recognised immediately as expenses in the net result for the year, except that, to the extent that a credit balance exists inthe revaluation surplus in respect of the same class of assets, they are debited directly to the revaluation surplus.

As a not-for-profit entity, revaluation increments and decrements are offset against one another within a class of non-current assets, but not otherwise.

Where an asset that has previously been revalued is disposed of, any balance remaining in the revaluation surplus in respect of that asset istransferred to accumulated funds.

Details of depreciation rates initially applied for major asset categories are as follows:

Buildings

Physical non-current assets are valued in accordance with the 'Valuation of Physical Non-Current Assets at Fair Value' Policy and Guidelines Paper(TPP 14-01). This policy adopts fair value in accordance with AASB 13 Fair Value Measurement, AASB 116 Property, Plant and Equipment andAASB 140 Investment Property.

- Electro Medical Equipment

Investment property is separately discussed at Note 1(q).

Property, plant and equipment is measured at the highest and best use by market participants that is physically possible, legally permissible andfinancially feasible. The highest and best use must be available at a period that is not remote and takes into account the characteristics of the assetbeing measured, including any socio-political restrictions imposed by government. In most cases, after taking into account these considerations, thehighest and best use is the existing use. In limited circumstances, the highest and best use may be a feasible alternative use, where there are norestrictions on use or where there is a feasible higher restricted alternative use.

Fair value of property, plant and equipment is based on a market participants’ perspective, using valuation techniques (market approach, costapproach, income approach) that maximise relevant observable inputs and minimise unobservable inputs. Also refer Note 19 and Note 20 for furtherinformation regarding fair value.

Depreciation rates are subsequently varied where changes occur in the assessment of the remaining useful life of the assets reported.

* Costing less than $200,000

* Costing more than or equal to $200,000

- Furniture, Fittings and Furnishings

Infrastructure Systems

“Infrastructure Systems” means assets that comprise public facilities and which provide essential services and enhance the productive capacity of theeconomy including roads, bridges, water infrastructure and distribution works, sewerage treatment plants, seawalls and water reticulation systems.

- Computer Equipment

Non-specialised assets with short useful lives are measured at depreciated historical cost, as an approximation of fair value. The entity has assessedthat any difference between fair value and depreciated historical cost is unlikely to be material.

- Motor Vehicle Sedans

- Motor Vehicles, Trucks & Vans

- Office Equipment

- Plant and Machinery

Depreciation is provided for on a straight-line basis for all depreciable assets so as to write off the depreciable amount of each asset as it is consumedover its useful life to the District. Land is not a depreciable asset. All material identifiable components of assets are depreciated over their useful lives.

- Linen





o) Impairment of Property, Plant and Equipment

p) Restoration Costs

q) Investment Properties

r) Maintenance

s) Leased Assets

t) Inventories

u) Loans and Receivables

As a not-for-profit entity with no cash generating units, impairment under AASB 136 Impairment of Assets is unlikely to arise. As property, plant andequipment is carried at fair value or an amount that approximates fair value, impairment can only arise in the rare circumstances such as where thecosts of disposal are material. Specifically, impairment is unlikely for not-for-profit entities given that AASB 136 modifies the recoverable amount testfor non-cash generating assets of not-for-profit entities to the higher of fair value less costs of disposal and depreciated replacement cost, wheredepreciated replacement cost is also fair value.

Inventories held for distribution are measured at cost, adjusted when applicable for any loss of service potential. Inventories (other than those held fordistribution) are stated at the lower of cost and net realisable value.

A distinction is made between finance leases which effectively transfer from the lessor to the lessee substantially all the risks and rewards incidental toownership of the leased assets, and operating leases under which the lessor effectively retains all such risks and rewards.

Where a non-current asset is acquired by means of a finance lease, at the commencement of the lease term, the asset is recognised at its fair valueor, if lower, the present value of the minimum lease payments, at the inception of the lease. The corresponding liability is established at the sameamount. Lease payments are allocated between the principal component and the interest expense.

Operating lease payments are recognised as an expense on a straight-line basis over the lease term.

Day-to-day servicing costs or maintenance are charged as expenses as incurred except where they relate to the replacement of a part or componentof an asset, in which case the costs are capitalised and depreciated.

The estimated cost of dismantling and removing an asset and restoring the site is included in the cost of an asset, to the extent it is recognised as aliability.

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. These financialassets are recognised initially at fair value. Subsequent measurement is at amortised cost using the effective interest method, less an allowance forany impairment of receivables. Any changes are recognised in the Net Result when impaired, derecognised or through the amortisation process.

Short-term receivables with no stated interest rate are measured at the original invoice amount where the effect of discounting is immaterial.

The District does not have any property that meets the definition of Investment Property.

Investment property is held to earn rentals or for capital appreciation, or both. However, for not-for-profit entities, property held to meet service deliveryobjectives rather than to earn rental or for capital appreciation does not meet the definition of investment property and is accounted for under AASB116, Property, Plant and Equipment.

Obsolete items are disposed of in accordance with instructions issued by the NSW Ministry of Health.





v) Investments

*

*

*

w) Impairment of Financial Assets

The movement in the fair value of the T Corp Hour-Glass Investment facilities incorporates distributions received as well as unrealised movements in fair value and is reported in the line item ‘investment revenue’.

Held-to-maturity investments – Non-derivative financial assets with fixed or determinable payments and fixed maturity that the District has the positive intention and ability to hold to maturity are classified as 'held-to-maturity'.

These investments are measured at amortised cost using the effective interest method. Changes are recognised in the net result for the year when impaired, derecognised or through the amortisation process.

The risk management strategy of the District has been developed consistent with the investment powers granted under the provision of the Public Authorities (Financial Arrangements) Act.

T Corp Hour-Glass investments are made in an effort to improve interest returns on cash balances otherwise available whilst also providing secure investments.

The fair value of investments that are traded at fair value in an active market is determined by reference to quoted current bid prices at the close ofbusiness on the Statement of Financial Position date.

All financial assets, except those measured at fair value through profit and loss, are subject to an annual review for impairment. An allowance forimpairment is established when there is objective evidence that the entity will not be able to collect all amounts due.

For financial assets carried at amortised cost, the amount of the allowance is the difference between the asset’s carrying amount and the presentvalue of estimated future cash flows, discounted at the effective interest rate. The amount of the impairment loss is recognised in the net result for theyear.

When an available for sale financial asset is impaired, the amount of the cumulative loss is removed from equity and recognised in the net result forthe year, based on the difference between the acquisition cost (net of any principal repayment and amortisation) and current fair value, less anyimpairment loss previously recognised in the net result for the year.

Purchases or sales of investments under contract that require delivery of the asset within the timeframe established by convention or regulation arerecognised on the trade date; i.e. the date the District commits to purchase or sell the asset.

Investments are initially recognised at fair value plus, in the case of investments not at fair value through profit or loss, transaction costs. The Districtdetermines the classification of its financial assets after initial recognition and, when allowed and appropriate, re-evaluates this at each financial yearend.

T-Corp Hour-Glass Investment facilities are managed by New South Wales Treasury Corporation, a controlled entity of the ultimate parent. The facilities are designated at fair value through profit or loss as the management and performance of these financial assets is undertaken on a fair value basis, in accordance with a documented risk management strategy. Information about these assets is provided internally to the District's key management personnel.

The District subsequently measures investments classified as 'held for trading' or designated upon initial recognition “at fair value through profit or loss” at fair value.

Financial assets are classified as 'held for trading' if they are acquired for the purpose of selling in the near term. Derivatives are also classified as held for trading. Gains or losses on these assets are recognised in the net result for the year.

Any reversals of impairment losses are reversed through the net result for the year, where there is objective evidence, except reversals of impairmentlosses on an investment in an equity instrument classified as “available for sale”, must be made through the reserve. Reversals of impairment losses of financial assets carried at amortised cost cannot result in a carrying amount that exceeds what the carrying amount would have been had there notbeen an impairment loss.

Available-for-sale investments - Any investments that do not fall into any other category are accounted for as available-for-sale investments and measured at fair value. Gains or losses on available-for-sale investments are recognised in other comprehensive income until disposed or impaired, at which time the cumulative gain or loss previously recognised in other comprehensive income is recognised in the net result for the year. However, interest calculated using the effective interest method and dividends are recognised in the net result for the year.





x) De-recognition of Financial Assets and Financial Liabilities

*

*

y) Payables

z) Fair Value Hierarchy

*

*

*

aa) Equity Transfers

Where the District has neither transferred nor retained substantially all the risks and rewards or transferred control, the asset is recognised to theextent of the District's continuing involvement in the asset.

A financial liability is derecognised when the obligation specified in the contract is discharged or cancelled or expires.

Payables are recognised for amounts to be paid in the future for goods and services received, whether or not billed to the District.

The transfer of net assets between entities as a result of an administrative restructure, transfers of programs/functions and parts thereof betweenentities controlled by the ultimate parent are recognised as an adjustment to "Accumulated Funds". This treatment is consistent with AASB 1004,Contributions and Australian Accounting Interpretation 1038, Contributions by Owners Made to Wholly-Owned Public Sector Entities.

The District recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.

Refer to Note 20 and Note 33 for further disclosures regarding fair value measurements of financial and non-financial assets.

Borrowings include finance lease liabilities. The finance lease liability is determined in accordance with AASB 117, Leases.

A number of the District’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets andliabilities. When measuring fair value, the valuation technique used maximises the use of relevant observable inputs and minimises the use ofunobservable inputs. Under AASB 13 Fair Value Measurement, the District categorises, for disclosure purposes, the valuation techniques based onthe inputs used in the valuation techniques as follows:

where the District has not transferred substantially all the risks and rewards, if the District has not retained control.

A financial asset is derecognised when the contractual rights to the cash flows from the financial assets expire; or if the District transfers the financialasset:

where substantially all the risks and rewards have been transferred; or

These amounts represent liabilities for goods and services provided to the District and other amounts. Payables are recognised initially at fair value.

Subsequent measurement is at amortised cost using the effective interest method. Short-term payables with no stated interest rate are measured atthe original invoice amount where the effect of discounting is immaterial.

Level 1 - quoted prices in active markets for identical assets / liabilities that the entity can access at the measurement date.

Level 2 – inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly.

Level 3 – inputs that are not based on observable market data (unobservable inputs).

All other equity transfers are recognised at fair value, except for intangibles. Where an intangible has been recognised at (amortised) cost by thetransferor because there is no active market, the District recognises the asset at the transferor's carrying amount. Where the transferor is prohibitedfrom recognising internally generated intangibles, the District does not recognise that asset.

Transfers arising from an administrative restructure involving not-for-profit entities and for-profit government entities are recognised at the amount atwhich the asset was recognised by the transferor immediately prior to the restructure. Subject to below, in most instances this will approximate fairvalue.





ab) Equity and Reserves

(i)

(ii)

(iii)

ac) Trust Funds

ad) Adjusted Budgeted Amounts

As the District performs only a custodial role in respect of these monies, and because the monies cannot be used for the achievement of the District'sown objectives, these funds are not recognised in the financial statements.

NSW Health's budget is shown at a consolidated level when presented in parliament each year (i.e. in the NSW Government Budget Papers). TheDistrict's budget is not presented in parliament, therefore AASB 1055 Budgetary Reporting is not applicable. Unlike the requirement in AASB 1055‘Budgetary Reporting’ to present original budget information, the District's financial statements present adjusted budget information.The adjustedbudgeted amounts are drawn from the initial Service Agreements between the District and the NSW Ministry of Health at the beginning of the financialyear, as well as any adjustments for the effects of additional supplementation provided in accordance with delegations to derive a final budget at yearend (i.e. adjusted budget). The budget amounts are not subject to audit and, accordingly, the relevant column entries in the financial statements aredenoted as "Unaudited".

Major variances between the original budgeted amounts and the actual amounts disclosed in the primary financial statements are explained in Note32.

Accumulated FundsThe category "accumulated funds" includes all current and prior period retained funds.

Revaluation SurplusThe revaluation surplus is used to record increments and decrements on the revaluation of non-current assets. This accords with the District's policy on the revaluation of property, plant and equipment as discussed in Note 1(n).

Separate Reserves

Separate reserve accounts are recognised in the financial statements only if such accounts are required by specific legislation or Australian Accounting Standards.

The District receives monies in a trustee capacity for various trusts as set out in Note 26.





ae) Changes in Accounting Policy, including new or revised Australian Accounting Standards

(i)

(ii)

AASB 15 Revenue from Contracts with Customers (and associated amending standards AASB 2014-5, AASB 2015-8, AASB 2016-3, AASB 2016-7 and AASB 2016-8) applies to annual periods beginning on or after 1 January 2019 for not-for-profit entities. AASB 15 establishes a contract-based five-step analysis of transactions to determine the nature, amount and timing of revenue arising from contracts with customers. This new standard requires revenue to be recognised when control of the goods or services are transferred to the customer at the transaction price. This may impact the timing of recognising certain revenue currently recognised by reference to the stage of completion of the transaction.

AASB 2015-6 Amendments to Australian Accounting Standards – Extending Related Party Disclosures to Not-for-Profit Public Sector Entities extends the scope of AASB 124 Related Party Disclosures to include application by not-for-profit public sector entities. The application of this standard has resulted in increased disclosures in the financial statements relating to related party transactions and Key Management Personnel compensation.

AASB 2015-7 Amendments to Australian Accounting Standards – Fair Value Disclosures of Not-for-Profit Public Sector Entities is applicable to reporting periods beginning on or after 1 July 2016. The Entity early adopted this standard in the financial year ended 30 June 2016, which allows for exemption from making certain Level 3 'Fair Value Measurement' disclosures held primarily for current service potential rather than the generation of future net cash inflows.

AASB 2016-2 Amendments to Australian Accounting Standards - Disclosure Initiative: Amendments to AASB 107 applies to annual periods beginning on or after 1 January 2017. The standard amends AASB 107 Statement of Cash Flows to require additional disclosures regarding financing activities in the Statement of Cash Flows. The change is not expected to materially impact the financial statements.

AASB 9 Financial Instruments and AASB 2014-7 Amendments to Australian Accounting Standards arising from AASB 9 are applicable for reporting period on or after 1 January 2018. AASB 9 will replace AASB 139 Financial Instruments: Recognition and Measurement and establishes new principles for the financial reporting of financial assets, financial liabilities and hedge accounting. AASB 9 also introduces a forward-looking 'expected credit losses' impairment model, which may significantly impact the timing and amount of impairment recognition.

AASB 16 Leases applies to annual periods beginning on or after 1 January 2019. The standard introduces a new approach to lease accounting that requires a lessee to recognise assets and liabilities for the rights and obligations created by leases. The application of this standard will likely have a significant transitional impact as all leases, except short term (<12 months) and low value leases, brought on balance sheet.

AASB 1058 Income of Not-for-Profit Entities applies to not-for-profit entities and is effective for annual periods beginning on or after 1 January 2019. This standard requires entities to recognise income where the consideration to acquire an asset, including cash, is significantly less than the fair value principally to enable the entity to further its objectives. Under this standard, the timing of income recognition may be impacted depending on whether there is a liability or other performance obligation associated with the acquired asset, including cash.

AASB 1058 also requires government agencies to recognise income for volunteer services received if the fair value of those services can be measured reliably and the services would have been purchased if they had not been donated. This is consistent with current practice under AASB 1004 Contributions and is not expected to materially impact the financial statements.

NSW public sector entities are not permitted to early adopt new Australian Accounting Standards, unless NSW Treasury determines otherwise. The following new Australian Accounting Standards, excluding standards not considered applicable or material to NSW Health, have not been applied and are not yet effective. The possible impact of these Standards in the period of initial application includes:

Issued but not yet effective

Effective for the first time in 2016-17

The accounting policies applied in 2016-17 are consistent with those of the previous financial year except as a result of new or revised Australian Accounting Standards that have been applied for the first time as follows:

PARENT CONSOLIDATION

2017 2016 2017 2016

$000 $000 $000 $000

2. Employee Related

----- ----- Salaries and Wages (including annual leave) 475,669 445,475

----- ----- Superannuation - Defined Benefit Plans 3,506 3,754

----- ----- Superannuation - Defined Contribution Plans 41,616 38,906

----- ----- Long Service Leave 9,686 23,211

----- ----- Redundancies 720 1,071

----- ----- Workers' Compensation Insurance 8,501 7,598

----- ----- Fringe Benefits Tax 148 62

----- ----- 539,846 520,077

3. Personnel Services

475,669 445,475 Salaries and Wages ----- -----

41,616 38,906 Superannuation - Defined Contribution Plans ----- -----

164 1,324 Long Service Leave ----- -----

720 1,071 Redundancies ----- -----

8,501 7,598 Workers' Compensation Insurance ----- -----

148 62 Fringe Benefits Tax ----- -----

526,818 494,436 ----- -----

Personnel services of Central Coast Local Health District was provided by its controlled entity, Central Coast Local Health District Special Purpose Service Entity.

4. Other Operating Expenses

143 159 Advertising 143 159

192 188 Auditor's Remuneration - Audit of Financial Statements 192 188

5,295 5,218 Blood and Blood Products 5,295 5,218

176 100 Consultancies 176 100

325 214 Contractors 325 214

8,688 8,227 Domestic Supplies and Services 8,688 8,227

58,643 37,983 Drug Supplies 58,643 37,983

15,122 13,079 Food Supplies 15,122 13,079

4,531 4,146 Fuel, Light and Power 4,531 4,146

5,221 3,753 Hospital Ambulance Transport Costs 5,221 3,753

10,201 9,901 Information Management Expenses 10,201 9,901

639 660 Insurance 639 660

13,815 14,317 Maintenance (See 4(b) below) 13,815 14,317

28,569 27,371 Medical and Surgical Supplies 28,569 27,371

1,243 1,215 Motor Vehicle Expenses 1,243 1,215

1,525 1,502 Postal and Telephone Costs 1,525 1,502

1,609 1,836 Printing and Stationery 1,609 1,836

1,087 1,022 Rates and Charges 1,087 1,022

1,877 1,682 Rental 1,877 1,682

7,217 9,448

Hosted Services Purchased from entities controlled by the immediate parent 7,217 9,448

27,019 26,472

Special Service Departments (Dental, Radiology, Pathology, Allied Health, Dialysis, Psychology, Respite, Cancer ) 27,019 26,472

2,147 2,331 Staff Related Costs 2,147 2,331

2,071 1,868 Travel Related Costs 2,071 1,868

14,751 11,139 Other (See 4(a) below) 14,751 11,139

212,106 183,831 212,106 183,831





2017 2016 2017 2016

$000 $000 $000 $000


a) Other Includes:

217 217 Contract for Patient Services 217 217

5,917 5,940 Corporate Support Services 5,917 5,940

339 365 Courier and Freight 339 365

77 71 Isolated Patient Travel and Accommodation Assistance Scheme 77 71

219 118 Legal Services 219 118

625 331 Membership/Professional Fees 625 331

1,155 1,182 Motor Vehicle Operating Lease Expense - Minimum Lease Payments 1,155 1,182

1 30 Other Operating Lease Expense - Minimum Lease Payments 1 30

2 9 Quality Assurance/Accreditation 2 9

813 598 Security Services 813 598

5,386 2,278 Other Miscellaneous 5,386 2,278

14,751 11,139 14,751 11,139

b) Reconciliation of Total Maintenance

4,725 4,245 Maintenance Contracts 4,725 4,245

4,498 6,016 New/Replacement Equipment under $10,000 4,498 6,016

4,592 4,043 Repairs Maintenance/Non Contract 4,592 4,043

----- 13 Other ----- 13

13,815 14,317 13,815 14,317

1,826 1,934 1,826 1,934

15,641 16,251 15,641 16,251

The majority of 'Special Service Departments' expenses were paid to the Health Administration Corporation, an entity controlled by the immediate parent.

The majority of 'Contract for Patient Services' was paid to Home Care Service of NSW an entity controlled by the ultimate parent.

Some 'Advertising' expenses were paid to entities controlled by the immediate parent as well as entities controlled by the ultimate parent

Some 'Isolated Patient Travel and Accommodation Assistance Scheme' expenses were paid to entities controlled by the immediate parent.

'Auditor's Remuneration' was paid to The Audit Office of New South Wales, an entity controlled by the ultimate parent.

'Hospital Ambulance Transport Costs' were paid to Health Administration Corporation, which is an entity controlled by the immediate parent.

The majority of 'Information Management Expenses' were paid to Health Administration Corporation, an entity controlled by the immediate parent.

The majority of 'Domestic Supplies and Services', 'Food Supplies', 'Corporate Support Services', were paid to Health Administration Corporation, an entity controlled by the immediate parent.

Maintenance Expense - Contracted Labour and Other (Non-Employee Related in Note 4)

Employee Related/Personnel Services Maintenance Expense included in Notes 2 and 3





2017 2016 2017 2016

$000 $000 $000 $000

5. Depreciation and Amortisation

15,902 16,344 Depreciation - Buildings 15,902 16,344

4,887 4,917 Depreciation - Plant and Equipment 4,887 4,917

1,471 1,435 Depreciation - Infrastructure Systems 1,471 1,435

90 91 Amortisation - Leasehold Improvements 90 91

22,350 22,787 22,350 22,787

6. Grants and Subsidies

2,722 2,520 Non-Government Organisations 2,722 2,520

134 167 Grants to Research Organisations 134 167

218 719 Grants paid to entities controlled by the immediate parent 218 719

4,172 23,945 Other Grants 4,172 23,945

7,246 27,351 7,246 27,351

The 2015-16 balance above includes $20M paid to the University of Newcastle for the Medical School and Research Centre. A corresponding grant received is included in Note 9.





2017 2016 2017 2016

$000 $000 $000 $000

7. Sale of Goods and Services

a) Sale of Goods comprise the following:-

566 205 Pharmacy Sales 566 205

1,107 1,697 Sale of Prosthesis 1,107 1,697

254 207 Other 254 207

b) Rendering of Services comprise the following:-

Patient Fees

31,676 31,679 - Inpatient Fees 31,676 31,679

52 99 - Nursing Home Fees 52 99

1,216 1,444 - Non Inpatient Fees 1,216 1,444

19,277 17,497 Department of Veterans' Affairs 19,277 17,497

1 ----- Staff-Meals and Accommodation 1 -----

9,099 8,564 Infrastructure Fees - Monthly Facility Charge 9,099 8,564

3,274 2,559 Infrastructure Fees - Annual Charge 3,274 2,559

781 807 Car Parking 781 807

13 85 Clinical Services (excluding Clinical Drug Trials) 13 85

----- 15 Commercial Activities ----- 15

118 148 Fees for Medical Records 118 148

2 ----- Information Retrieval 2 -----

44,657 22,778 Highly Specialised Drugs 44,657 22,778

10 ----- Linen Service Revenues - Entities controlled by immediate parent 10 -----

3,585 2,481 Motor Accident Authority Third Party 3,585 2,481

68 81 Private Use of Motor Vehicles 68 81 1,679 1,973 Hosted Services Provided to entities controlled by immediate parent 1,679 1,973

69 77 Services Provided to Non NSW Health Organisations 69 77

189 219 Other 189 219

117,693 92,615 117,693 92,615

8. Investment Revenue

954 414 Interest 954 414

T Corp Hour Glass Investment Facilities Designated at Fair Value

12 21 through Profit or Loss 12 21

966 435 966 435





2017 2016 2017 2016

$000 $000 $000 $000

9. Grants and Contributions

925 773 Clinical Drug Trials 925 773

5,717 5,912 Commonwealth Government Grants 5,717 5,912

1,601 1,468 Industry Contributions/Donations 1,601 1,468

1,746 500 Cancer Institute Grants 1,746 500

892 922 Grants received from entities controlled by the ultimate parent 892 922

258 20,905 Grants received from entities controlled by the immediate parent 258 20,905

3 ----- Research Grants 3 -----

2,719 3,720 Other Grants 2,719 3,720

13,861 34,200 13,861 34,200

10. Acceptance by the Crown Entity of Employee Benefits

----- ----- Superannuation-defined benefit 3,506 3,754


----- ----- 13,028 25,641

11. Other Revenue

Other Revenue comprises the following:-

157 165 Commissions 157 165

293 110 Conference and Training Fees 293 110

104 89 Discounts received 104 89

----- 94 Insurance Refunds ----- 94

1,076 1,456 Lease and Rental 1,076 1,456

3,838 ----- Property not Previously Recognised 3,838 -----

2 ----- Sale of Merchandise, Old Wares and Books 2 -----

6 ----- Sponsorship 6 -----

6,250 4,018 Treasury Managed Fund Hindsight Adjustment 6,250 4,018

4 10 Unclaimed Deposits 4 10

768 1,058 Other * 768 1,058

12,498 7,000 12,498 7,000




The following liabilities and expenses have been assumed by the Crown Entity:

The 2015-16 balance above includes $20M funding received for the Medical School and Research Centre.

The Cancer Institute is an entity controlled by the immediate parent.

The majority of grants that were received from entities controlled by the ultimate parent were received from NSW Department of Ageing, Disability and Home Care.

The majority of grants that were received from entities controlled by the immediate parent were received from Agency of Clinical Innovation.

* Some 'Other' revenue was received from entities controlled by the immediate parent.

Property not Previously Recognised for 2016/17 contains $3.8M of land and infrastructure acquired for the Gosford Hospital Redvelopment at no cost.


2017 2016 2017 2016

$000 $000 $000 $000




12. Gain / (Loss) on Disposal

16,987 13,721 Property, Plant and Equipment 16,987 13,721

(15,759) (13,355) Accumulated Depreciation (15,759) (13,355)

1,228 366 Written Down Value 1,228 366

143 83 Proceeds from Disposal 143 83

Gain/(Loss) on Disposal of

(1,085) (283) Property, Plant and Equipment (1,085) (283)

(1,085) (283) Total Gain/(Loss) on Disposal (1,085) (283)

13. Other Gains / (Losses)

(248) (437) Impairment of Receivables (248) (437)

(248) (437) (248) (437)

PARENT & CONSOLIDATION

14. Conditions on Contributions

Purchase of Health Promotion, Other Total

Assets Education and

Research

$000 $000 $000 $000

2 8,513 41 8,556

34 18,143 349 18,526

Total amount of unexpended contributions as at reporting date 36 26,656 390 27,082

Comment on restricted assets appears in Note 21




Contributions recognised as revenues during the current reporting period for which expenditure in the manner specified had not occurred as at reporting date

Contributions recognised in previous years which were not expended in the current reporting period

PARENT

2017 2016 2017 2016

$000 $000 $000 $000

15. Cash and Cash Equivalents

24,655 18,839 Cash at Bank and On Hand 24,655 18,839

24,655 18,839 24,655 18,839

For the purposes of the Statement of Cash Flows, cash and cash equivalents include cash at bank, cash on hand and short-term deposits.

Cash & cash equivalent assets recognised in the Statement of Financial Position are reconciled at the end of the financial year to the Statement of Cash Flows as follows:

24,655 18,839 Cash and Cash Equivalents (per Statement of Financial Position) 24,655 18,839

24,655 18,839 Closing Cash and Cash Equivalents (per Statement of Cash Flows) 24,655 18,839

Refer to Note 33 for details regarding credit risk, liquidity risk and market risk arising from financial instruments.

CONSOLIDATION





2017 2016 2017 2016

$000 $000 $000 $000

16. Receivables

Current

4,811 6,152 Sale of Goods and Services 4,811 6,152

3,181 2,794 Intra Health Receivables 3,181 2,794

3,504 3,509 Goods and Services Tax 3,504 3,509

1,803 6,872 Other Debtors 1,803 6,872

13,299 19,327 Sub Total 13,299 19,327

(198) (71) Less Allowance for Impairment (198) (71)

13,101 19,256 Sub Total 13,101 19,256

1,212 1,203 Prepayments 1,212 1,203

14,313 20,459 14,313 20,459

a) Movement in the Allowance for Impairment

Sale of Goods and Services

(42) (53) Balance at Commencement of Reporting Period (42) (53)

120 420 Amounts written off during the period 120 420

(Increase)/decrease in Allowance Recognised in

(125) (409) the Net Result (125) (409)

(47) (42) Balance at 30 June (47) (42)

b) Movement in the Allowance for Impairment

Other Debtors




(123) (28) the Net Result (123) (28)

(151) (29) Balance at 30 June (151) (29)

(198) (71) (198) (71)

c) The current and non-current sale of goods and services balances above include the following patient fee receivables:

(Current and Non-Current) include:

158 236 Patient Fees - Compensable 158 236

102 265 Patient Fees - Ineligible 102 265

3,925 4,866 Patient Fees - Inpatient & Other 3,925 4,866

4,185 5,367 4,185 5,367

Details regarding credit risk, liquidity risk and market risk, including financial assets that are either past due or impaired are disclosed in Note 33.




'Intra Health Receivables' include amounts receivable from entities controlled by the immediate parent. The majority of the balance at reporting date was receivable from the Health Administration Corporation.


2017 2016 2017 2016

$000 $000 $000 $000

17. Inventories

2,847 3,334 Drugs 2,847 3,334


114 ----- Other 114 -----

4,999 5,323 4,999 5,323

18. Financial Assets at Fair Value

Current

7,409 6,784 NSW Treasury Corporation - Hour-Glass Investment Facilities 7,409 6,784

7,409 6,784 7,409 6,784






2017 2016 2017 2016

$000 $000 $000 $000

19. Property, Plant and Equipment

Land and Buildings - Fair Value

893,902 773,926 Gross Carrying Amount 893,902 773,926

268,392 264,582 Less: Accumulated Depreciation and Impairment 268,392 264,582

625,510 509,344 Net Carrying Amount 625,510 509,344

Plant and Equipment - Fair Value*




Infrastructure Systems - Fair Value




Leasehold Improvements - Fair Value*



1,595 116 Net Carrying Amount 1,595 116

Total Property, Plant and Equipment

669,407 553,227 At Net Carrying Amount 669,407 553,227

Land and Buildings - Fair Value above contains Works in Progress of $152M

which are held at cost and not depreciated.

Plant and Equipment - Fair Value above contains Works in Progress of $410K


* For non-specialised assets with short useful lives, recognition at depreciated historical cost is regarded as an acceptable approximation of fair value, in accordance with Treasury Policy Paper 14-01.








19. Property, Plant and Equipment - Reconciliation

Land Buildings Plant and Infrastructure Leasehold Total

Equipment Systems Improvements

$000 $000 $000 $000 $000 $000

2017

Net carrying amount at start of year 74,725 434,619 26,441 17,326 116 553,227

Additions 3,759 121,713 5,063 80 ----- 130,615

Disposals ----- (881) (347) ----- ----- (1,228)

6,007 2,289 ----- 847 ----- 9,143

Depreciation Expense ----- (15,902) (4,887) (1,471) (90) (22,350)

Reclassifications 775 (1,594) (750) ----- 1,569 -----

Net carrying amount at end of year 85,266 540,244 25,520 16,782 1,595 669,407



$000 $000 $000 $000 $000 $000

2016

Net carrying amount at start of year 69,041 411,955 27,456 18,761 207 527,420

Additions ----- 44,692 4,652 ----- ----- 49,344

Disposals ----- ----- (366) ----- ----- (366)

----- ----- (384) ----- ----- (384)

Depreciation Expense ----- (16,344) (4,917) (1,435) (91) (22,787)

Reclassifications 5,684 (5,684) ----- ----- ----- -----

Net carrying amount at end of year 74,725 434,619 26,441 17,326 116 553,227

Buildings above for 2016-17 contains Works in Progress of $109.5M in Additions and $152M in Net carrying amount at end,


A reconciliation of the carrying amount for each class of property, plant and equipment is set out below:

Recognised in Reserves

Transfers within NSW Health Entities through Statement of Comprehensive Income

Land and Buildings include land owned by the Health Administration Corporation but controlled by the District [see note 1(k)].

Further details regarding the fair value measurement of property, plant and equipment are disclosed in Note 20.


20. Fair Value Measurement of Non-Financial Assets

a) Fair Value Hierarchy

2017 Level 1 Level 2 Level 3 Total

$000 $000 $000 $000

Property, Plant and Equipment (Note 19)

- Land and Buildings ----- 56,574 416,846 473,420

- Infrastructure Systems ----- ----- 16,782 16,782

----- 56,574 433,628 490,202

There were no transfers between level 1 and 2 during the year ended 30 June 2017.

Work in Progress and Newly Completed Projects are carried at cost, therefore excluded from figures above and as a result will not agree to Note 7.


$000 $000 $000 $000




----- 45,684 438,456 484,140



b) Valuation Techniques, Inputs and Processes

The non-current assets categorised in a) above have been measured as either level 2 or level 3 based on the following valuation techniques and inputs:

For land, buildings and infrastructure systems the District obtains external valuations by independent valuers at least every three years. The last revaluation was performed by Liquid Pacific Holdings Pty Ltd for the 2016/17 financial year. Liquid Pacific Holdings Pty Ltd is an independent entity and is not an associated entity of the District.

At the end of each reporting period a fair value assessment is made on any movements since the last revaluation, and a determination as to whether any adjustments need to be made. These adjustments are made by way of application of indices refer, note 19 reconcilation.




Fair value measurements recognised in the Statement of Financial Position are categorised into the following levels.






For buildings and infrastructure, many assets are of a specialised nature or use, and thus the most appropriate valuation method is depreciated replacement cost. These assets are included as Level 3 as these assets have a high level of unobservable inputs. However, residential properties are valued on a market approach and included in level 2.

For land, the valuation by the valuers is made on a market approach, comparing similar assets (not identical) and observable inputs. The most significant input is price per square metre.

All commercial and non-restricted land is included in Level 2 as these land valuations have a high level of observable inputs although these lands are not identical.

All of the restricted land has been classified as level 3 as, although observable inputs have been used, a significant level of professional judgement is required to adjust inputs in determining the land valuations. Certain parcels of land have zoning restrictions, for example hospital grounds, and values are adjusted accordingly.



c) Reconciliation of Recurring Level 3 Fair Value Measurements

2017

$000 $000 $000

Fair value as at 1 July 2016 421,130 17,326 438,456

Additions 9,589 80 9,669

Revaluation increments/ decrements recognised in other comprehensive income – included in line item 'Net increase / (decrease) in property, plant and equipment revaluation surplus’

1,672 847 2,519

Depreciation (15,545) (1,471) (17,016)

Fair value as at 30 June 2017 416,846 16,782 433,628

2016 Land and Infrastructure Total Level 3

Buildings Systems Recurring

$000 $000 $000

Fair value as at 1 July 2015 412,271 18,761 431,032

Additions 24,913 ----- 24,913

Depreciation (16,054) (1,435) (17,489)

Fair value as at 30 June 2016 421,130 17,326 438,456




Land and Buildings


Total Level 3 Recurring


2017 2016 2017 2016

$000 $000 $000 $000

21. Restricted Assets

Category

13,912 10,716 Specific Purposes 13,912 10,716

589 563 Research Grants 589 563

12,581 10,326 Private Practice Funds 12,581 10,326

27,082 21,605 27,082 21,605




The District's financial statements include the following assets which are restricted by externally imposed conditions, eg. donor requirements. The assets are only available for application in accordance with the terms of the donor restrictions.


2017 2016 2017 2016

$000 $000 $000 $000

22. Payables

Current

----- ----- Accrued Salaries, Wages and On-Costs 10,794 8,784

----- ----- Taxation and Payroll Deductions 3,287 2,795

14,081 11,579 Accrued Liability - Purchase of Personnel Services ----- -----

12,334 20,114 Creditors 12,334 20,114

Other Creditors

7,048 8,720 - Payables to entities controlled by the immediate parent 7,048 8,720

6,535 4,587 - Other 6,535 4,587

39,998 45,000 39,998 45,000

The majority of 'Payables to entities controlled by the immediate parent' relate to balances payable to the Health Administration Corporation, an entity controlled by the immediate parent.

Details regarding credit risk, liquidity risk and market risk, including a maturity analysis of the above payables are disclosed in Note 33.




Creditors include some amounts owing to entities controlled by the ultimate parent.


2017 2016 2017 2016

$000 $000 $000 $000

23. Provisions

Current

----- ----- Annual Leave - Short Term Benefit 51,748 48,260

----- ----- Annual Leave - Long Term Benefit 12,447 12,071

----- ----- Long Service Leave Consequential On-Costs 9,069 8,918

73,264 69,249 Provision for Personnel Services Liability ----- -----

820 ----- Allocated Day Off Liability 820 -----

74,084 69,249 74,084 69,249

Non-Current

----- ----- Long Service Leave Consequential On-Costs 789 775

789 775 Provision for Personnel Services Liability ----- -----

789 775 789 775

Aggregate Employee Benefits and Related On-Costs

----- ----- Provisions - Current 73,264 69,249

----- ----- Provisions - Non-Current 789 775

----- ----- Accrued Salaries, Wages and On-Costs (Note 22) 14,081 11,579

88,134 81,603 Liability - Purchase of Personnel Services ----- -----

88,134 81,603 88,134 81,603

24. Other Liabilities

Current

1,096 917 Income in Advance 1,096 917

1,096 917 1,096 917





2017 2016 2017 2016

$000 $000 $000 $000

25. Commitments for Expenditure

a) Capital Commitments

99,309 6,713 Not later than one year 99,309 6,713

50,489 231,148 Later than one year and not later than five years 50,489 231,148

161 ----- Later than five years 161 -----

149,959 237,861 Total Capital Expenditure Commitments (Including GST) 149,959 237,861

b) Operating Lease Commitments



646 ----- Later than five years 646 -----

4,115 4,059 Total Operating Lease Commitments (Including GST) 4,115 4,059

c) Contingent Asset Related to Commitments for Expenditure




The total 'Capital Expenditure Commitments' and 'Operating Lease Commitments' of $154.1M as at 30 June 2017 includes input tax credits of $14M that are expected to be recoverable from the Australian Taxation Office (2016 $22M).

Future non-cancellable operating lease rentals not provided for and payable:

Aggregate capital expenditure for the acquisition of land and buildings, plant and equipment, infrastructure systems, and intangible assets, contracted for at balance date and not provided for:

The majority of 'capital commitments' contracted but not provided for relates to capital works overseen by the Health Administration Corporation, an entity controlled by the immediate parent.

Capital Commitments:Gosford Hospital is undergoing a major redevelopment which will include a new clinical services block to accommodate inpatients, outpatients and ambulatory services, with an estimated total cost of $368M provided for in the NSW 2015-16 Budget Papers. The planning phase of the redevelopment started in 2014, with the full project due for completion in 2019. $149.2M included in the Capital Commitment above relates to the redevelopment.

Opertaing Leases:The operating lease commitments above are for motor vehicles, information technology, equipment including personal computers, medical equipment and other equipment.


26. Trust Funds

2017 2016 2017 2016 2017 2016 2017 2016

$000 $000 $000 $000 $000 $000 $000 $000

----- ----- 47 35 351 176 398 211

Revenue ----- 14 23 12 23,410 21,230 23,433 21,256

Expenses ----- (14) ----- ----- (23,325) (21,055) (23,325) (21,069)

----- ----- 70 47 436 351 506 398




The District holds trust funds of $506K which are held for the safe keeping of patients' monies, deposits on hired items of equipment and Private Practice Trusts.

These funds are excluded from the financial statements as the District cannot use them for the achievement of its objectives. The following is a summary of the transactions in the trust account.

Patient Trust Refundable Private Practice Total

Deposits Trust Funds

Balance at the beginning of the financial year

Balance at the end of the financial year

27. Contingent Liabilities and Assets

a) Compulsorily acquired land

Negotiations on the compensation for compulsorily acquired land as part of Gosford Hospital Redevelopment pursuant tosection 10 of the Health Administration Act 1982 and section 19(1) of the Land Acquisition (Just Terms Compensation)Act 1991 are ongoing with the prior landowner.

No provision has been made in these financial statements as the District’s management considers no compensation is payable.

PARENT AND CONSOLIDATED





2017 2016 2017 2016

$000 $000 $000 $000

28. Reconciliation of Cash Flows from Operating Activities to Net Result

133,074 50,696 Net Cash Flows from Operating Activities 133,074 50,696

(22,350) (22,787) Depreciation and Amortisation (22,350) (22,787)

(248) (437) Allowance for Impairment (248) (437)

(180) 1,076 (Increase)/ Decrease Income in Advance (180) 1,076

(4,849) (3,034) (Increase)/ Decrease in Provisions (4,849) (3,034)

(6,174) 8,278 Increase / (Decrease) in Prepayments and Other Assets (6,174) 8,278

4,957 (7,314) (Increase)/ Decrease in Payables from Operating Activities 4,957 (7,314)

(1,085) (283) Net Gain/ (Loss) on Sale of Property, Plant and Equipment (1,085) (283)

3,837 73 Assets donated or brought to account for the first time 3,837 73

106,982 26,268 Net Result 106,982 26,268

29. Non-Cash Financing and Investing Activities

3,838 73 Assets Acquired for no consideration 3,838 73

3,838 73 3,838 73

Assets Acquired for no consideration for 2016/17 contains $3.8M of land and infrastructure acquired for the Gosford Hospital Redvelopment at no cost.

30. 2016/17 Voluntary Services

- Chaplaincies and Pastoral Care- Pink Ladies/Hospital Auxiliaries- Patient Support Groups- Community Organisations- Patient & Family Support- Patient Services, Fund Raising- Practical Support to Patients and Relatives- Counselling, Health Education, Transport, Home Help & Patient Activities

31. Unclaimed Monies

Unclaimed salaries and wages are paid to the credit of the NSW Treasury in accordance with the provisions of the Industrial Relations Act,1996.

All money and personal effects of patients which are left in the custody of the District by any patient who is discharged or dies in the hospital and which are not claimed by the person lawfully entitled thereto within a period of twelve months are recognised as the property of the District.

All such money and the proceeds of the realisation of any personal effects are lodged to the credit of the Samaritan Fund which is used specifically for the benefit of necessitous patients or necessitous outgoing patients.




It is considered impracticable and immaterial to quantify the monetary value of voluntary services provided to the District. Services provided include:

PARENT AND CONSOLIDATION

32. Adjusted Budget Review - Parent and Consolidated

Net Result

Assets and Liabilities

Cash Flows

$000

623,703

4,800

National Partnership Agreement on Adult Public Dental Services 2,797

4,053

Balance as per Statement of Comprehensive Income 635,353

Initial Allocation, 25 July 2016

Integrated Care

Other




Total Cash Flow is $5.4 million favourable to budget as at 30 June 2017.

This position is a result of increased cash earned and held by the Special Purpose funds over budget at 30 June 2016 as well as increased cash receipts from the Treasury Managed Fund hindsight received.

Movements in the level of the NSW Ministry of Health Recurrent Allocation that have occurred since the time of the initial allocation on 25 July 2016 are as follows:

The actual Net Result was higher than adjusted budget by $2 million, primarily due to:

Assets are favourable to budget by $9M primarily driven by the increase in Property, Plant & Equipment values due to the Land & Building Revaluation actioned during the year.

Liabilities are favourable to budget by $3M primarily from a decrease in Creditors of $6M over the year, offset by an increase in Provisions of $4M driven by an increase in staff numbers over the year as well as the recognition of the 2.5% award increase and actuarial adjustment.

A $3M favourability in the result of Special Purpose funds from the Rights of Private Practice revenue received offset by small unfavourabilities in Loss on Disposals of $0.3M, driven by disposals as part of the Gosford Hospital Redevelopment, as well as a $0.5M unfavourable position on the District's Capital Subsidy resulting from the District not needing to draw down all the funds allocated for Capital programs.

33. Financial Instruments

(a) Financial Instrument Categories

PARENT

Financial Assets Class: Carrying Amount Carrying Amount

2017 2016

$000 $000

Cash and Cash Equivalents (note 15) 24,655 18,839

Receivables (note 16)* 9,597 15,747

Financial Assets at Fair Value (note 18) 7,409 6,784

41,661 41,370

Financial Liabilities

Payables (note 22)** Financial liabilities measured at amortised cost 39,998 45,000

39,998 45,000

Notes

* Excludes statutory receivables and prepayments (i.e. not within scope of AASB7 Financial Instruments Disclosures)



2017 2016

$000 $000



Financial Assets at Fair Value (note 18) 7,409 6,784

41,661 41,370


Payables (note 22)** 36,711 42,205

36,711 42,205

Notes


Category

Loans and receivables (at amortised cost)

At fair value through profit or loss (designated as such upon initial recognition)




The District's principal financial instruments are outlined below. These financial instruments arise directly from the District's operations or are required to finance its operations. The District does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.

The District's main risks arising from financial instruments are outlined below, together with the District's objectives, policies and processes for measuring and managing risk. Further quantitative and qualitative disclosures are included throughout these financial statements.

The Chief Executive has overall responsibility for the establishment and oversight of risk management and reviews and agrees policies for managing each of these risks. Risk management policies are established to identify and analyse the risks faced by the District, to set risk limits and controls and to monitor risks. Compliance with policies is reviewed on a continuous basis.

Financial liabilities measured at amortised cost

N/A


Category

N/A

At fair value through profit or loss (designated as such upon initial recognition)

** Excludes statutory payables and unearned revenue (i.e. not within scope of AASB7 Financial Instruments Disclosures).

** Excludes statutory payables and unearned revenue (i.e. not within scope of AASB7 Financial Instruments Disclosures).





(b) Credit Risk

Cash

Receivables - trade debtors

Credit risk arises when there is the possibility that the counterparty will default on their contractual obligations, resulting in a financial loss to the District. The maximum exposure to credit risk is generally represented by the carrying amount of the financial assets (net of any allowance for impairment).

Credit risk associated with the District's financial assets, other than receivables, is managed through the selection of counterparties and establishment of minimum credit rating standards. Authority deposits held with NSW TCorp are guaranteed by the State.

The TCorp Hour-Glass cash facility is discussed in paragraph (d) below.

All trade debtors are recognised as amounts receivable at balance date. Collectability of trade debtors is reviewed on an ongoing basis. Procedures as established in the NSW Ministry of Health Accounting Manual for Public Health Organisations and Fee Procedures Manual are followed to recover outstanding amounts, including letters of demand. Debts which are known to be uncollectable are written off. An allowance for impairment is raised when there is objective evidence that the District will not be able to collect all amounts due. This evidence includes past experience and current and expected changes in economic conditions and debtor credit ratings. No interest is earned on trade debtors.

Credit risk arises from financial assets of the District, including cash, receivables and authority deposits. No collateral is held by the District. The District has not granted any financial guarantees.

Cash comprises cash on hand and bank balances deposited within the NSW Treasury banking system. Interest is earned on daily bank balances at rates of approximately 2.37% in 2016/17 compared to 2.81% in the previous year.

Financial assets that are past due or impaired could be either 'Sales of Goods and Services' or 'Other Debtors' in the 'Receivables' category of the Statement of Financial Position. Patient Fees Ineligibles represent the majority of financial assets that are past due or impaired.

In addition Patient Fees Compensables are frequently not settled within 6 months of the date of the service provision due to the length of time it takes to settle legal claims. Most of the District's debtors are health insurance companies or compensation insurers settling claims in respect of inpatient treatments.

The District is not materially exposed to concentrations of credit risk to a single trade debtor or group of debtors. Based on past experience, debtors that are not past due (2017: $5.768M ; 2016: $12.349M) and not more than 3 months past due (2017: $602M ; 2016: $495M) are not considered impaired.





Total 1,2Past due but not

impaired 1,2Considered impaired 1,2

2017 $000 $000 $000

<3 months overdue 602 602 -----

3 months - 6 months overdue 46 46 -----

> 6 months overdue 198 ----- 198

2016

<3 months overdue 495 495 -----

3 months - 6 months overdue 109 109 -----

> 6 months overdue 71 ----- 71

Notes

1 Each column in the table reports "gross receivables".

Authority Deposits

(c) Liquidity Risk

2 The ageing analysis excludes statutory receivables, as these are not within the scope of AASB7 Financial Instruments Disclosures and excludes receivables that are not past due and not impaired. Therefore, the "total" will not reconcile to the receivables total recognised in the statement of financial position.

The District has negotiated no loan outside of arrangements with the NSW Ministry of Health or Treasury.

During the current and prior years, there were no defaults of loans payable. No assets have been pledged as collateral.

The District has placed funds on deposit with TCorp, which has been rated 'AAA' by Standard and Poor's. These deposits are similar to money market or bank deposits and can be placed 'at call' or for a fixed term. For fixed term deposits, the interest rate payable by TCorp is negotiated initially and is fixed for the term of the deposit, while the interest rate payable on at call deposits can vary. The deposits at balance date were earning an average interest rate of -28.00% (2016: -1.93%), while over the year the weighted average interest rate was 8.16% (2016: 0.96%) on a weighted average balance during the year of $7.1M (2016: $6.7M). None of these assets are past due or impaired.

Liquidity risk is the risk that the District will be unable to meet its payment obligations when they fall due. The District continuously manages risk through monitoring future cash flows and maturities planning to ensure adequate holding of high quality liquid assets. The objective is to maintain a balance between continuity of funding and flexibility through effective management of cash, investments and liquid assets and liabilities.

For other suppliers, where settlement cannot be effected in accordance with the above, e.g. due to short term liquidity constraints, contact is made with creditors and terms of payment are negotiated to the satisfaction of both parties.

The District has exposure to liquidity risk. However, the risk is minimised by the service agreement with the NSW Ministry of Health, as the annual service agreement requires local management to control its financial liquidity and in particular meet benchmarks for the payment of creditors. Where the District fails to meet service agreement performance standards, the Ministry as the state manager can take action in accordance with annual performance framework requirements, including providing financial support and increased management interaction (refer Note 1).

The liabilities are recognised for amounts due to be paid in the future for goods or services received, whether or not invoiced. Amounts owing to suppliers (which are unsecured) are settled in accordance with the policy set by the NSW Ministry of Health in accordance with NSW Treasury Circular 11/12. For small business suppliers, where terms are not specified, payment is made not later than 30 days from date of receipt of a correctly rendered invoice. For other suppliers, if trade terms are not specified, payment is made no later than the end of the month following the month in which an invoice or a statement is received.

For small business suppliers, where payment is not made within the specified time period, simple interest must be paid automatically unless an existing contract specifies otherwise.


Maturity Analysis and interest rate exposure of financial liabilities

Nominal Amount 1Non - Interest

Bearing < 1 Yr

2017 $000 $000 $000

Payables:

10,794 10,794 10,794

- Creditors 25,917 25,917 25,917

36,711 36,711 36,711

2016

Payables:

8,784 8,784 8,784

- Creditors 33,421 33,421 33,421

42,205 42,205 42,205

Notes:

1 The amounts disclosed are the contractual undiscounted cash flows of each class of financial liabilities based on the earliest date on which the District can be required to pay. The tables include both interest and principal cash flows and therefore will not reconcile to the Statement of Financial Position.




Maturity DatesInterest Rate Exposure

- Accrued Salaries Wages, On-Costs and Payroll Deductions

- Accrued Salaries Wages, On-Costs and Payroll Deductions

The table below summarises the maturity profile of the District's financial liabilities together with the interest rate exposure.


(d) Market Risk

Interest rate risk

Net Equity Net Equity

Result Result

2017 $000 $000 $000 $000 $000

Financial Assets

Cash and Cash Equivalents 24,655 (247) (247) 247 247

Receivables 9,597 ----- ----- ----- -----

Financial Assets at Fair Value 7,409 (74) (74) 74 74


Payables* 36,711 ----- ----- ----- -----

2016

Financial Assets


Receivables 15,747 ----- ----- ----- -----

Financial Assets at Fair Value 6,784 (68) (68) 68 68


Payables 42,205 ----- ----- ----- -----

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. The District's exposures to market risk are primarily through interest rate risk on the District's borrowings and other price risks associated with the movement in the unit price of the Hour-Glass Investment facilities. The District has no exposure to foreign currency risk and does not enter into commodity contracts.




However, the District is not permitted to borrow external to the NSW Ministry of Health (except energy loans which are negotiated through NSW Treasury).

The District's exposure to interest rate risk is set out below.

Carrying Amount

The effect on net result and equity due to a reasonably possible change in risk variable is outlined in the information below, for interest rate risk and other price risk. A reasonably possible change in risk variable has been determined after taking into account the economic environment in which the District operates and the time frame for the assessment (i.e. until the end of the next annual reporting period). The sensitivity analysis is based on risk exposures in existence at the Statement of Financial Position date. The analysis is performed on the same basis for 2016. The analysis assumes that all other variables remain constant.

Exposure to interest rate risk arises primarily through the District's interest bearing liabilities.

Both NSW Treasury and NSW Ministry of Health loans are set at fixed rates and therefore are generally not affected by fluctuations in market rates. The District does not account for any fixed rate financial instruments at fair value through profit or loss or as available-for-sale. Therefore, for these financial instruments, a change of interest rates would not affect net result or equity.

A reasonably possible change of +/-1% is used consistent with current trends in interest rates (based on official RBA interest rate volatility over the last five years). The basis will be reviewed annually and amended where there is a structural change in the level of interest rate volatility.

+1%-1%




Other price risk - TCorp Hour-Glass Investment facilities

Facility 2017 2016

$000 $000

4,604 4,313

2,805 2,471

Impact on net result Change in unit price 2017 2016

$000 $000

+7% 322 302

+16% 449 395

(e) Fair Value Measurement

(i) Fair value compared to carrying amount

(ii) Fair Value recognised in the Statement of Financial Position

Level 1 Level 2 Level 3 2017 Total

$'000 $'000 $'000 $'000

TCorp Hour-Glass Invt.Facility ----- 7,409 ----- 7,409


$'000 $'000 $'000 $'000


Cash, money market instruments, Australian and International bonds, listed property and Australian shares

Cash, money market instruments, Australian and International bonds, listed property and Australian shares

Exposure to 'other price risk' primarily arises through the investment in the NSW TCorp Hour-Glass Investment Facilities, which are held for strategic rather thantrading purposes. The District has no direct equity investments. The District holds units in the following Hour-Glass investment trusts:

Long-term growth facility

NSW TCorp as trustee for each of the above facilities is required to act in the best interest of the unit holders and to administer the trusts in accordance with the trust deeds. As trustee, NSW TCorp has appointed external managers to manage the performance and risk of each facility in accordance with a mandate agreed by the parties. NSW TCorp has also leveraged off internal expertise to manage certain fixed income assets for the Hour-Glass facilities. A significant portion of the administration of the facilities is outsourced to an external custodian

NSW TCorp provides sensitivity analysis information for each of the Investment facilities, using historically based volatility information collected over a ten year period, quoted at two standard deviations (ie 95% probability). NSW TCorp Hour-Glass Investment facilities are designated at fair value through profit or loss and therefore any change in unit price impacts directly on profit (rather than equity).

Investment Sectors Investment Horizon

3 years to 7 yearsMedium term growth facility

Hour-Glass Investment - Medium-term growth facility

Hour-Glass Investment - Long-term growth facility

As discussed, the value of the Hour-Glass Investments is based on the District's share of the value of the underlying assets of the facility, based on the market value. All of the Hour-Glass facilities are valued using 'redemption' pricing.

(The table above only includes financial assets as no financial liabilities were measured at fair value in the Statement of Financial Position.)

There were no transfers between level 1 and 2 during the period ended 30 June 2017.

Financial instruments are generally recognised at cost, with the exception of the NSW TCorp Hour-Glass facilities, which are measured at fair value.

The amortised cost of financial instruments recognised in the Statement of Financial Position approximates the fair value, because of the short term nature of many of the financial instruments.

Therefore the fair value of the financial instruments do not differ from the carrying amount.

7 years and over

The unit price of each facility is equal to the total fair value of net assets held by the facility divided by the total number of units on issue for that facility. Unit prices are calculated and published daily.

A reasonably possible change is based on the percentage change in unit price (as advised by NSW TCorp) multiplied by the redemption value as at 30 June each year for each facility (balance from Hour-Glass Statement).

Investment in the Hour-Glass facilities limits the District's exposure to risk, as it allows diversification across a pool of funds with different investment horizons and a mix of investments.

34. Related Party Transactions


Key management personnel compensation is as follows:

2017

$000

Short-term employee benefits 873

Post-employment benefits 54

927

Transactions with key management personnel and their close family members

NIL

35. Events After the Reporting Period

There are no events after the reporting period that require amendment to the finanical statements.

END OF AUDITED FINANCIAL STATEMENTS

During the financial year, Central Coast Local Health District obtained key management personnel services from the immediate parent and incurred $406K as advised by the Ministry for these services.




Compensation for the Minister for Health is paid by the Legislature and is not reimbursed by the Ministry of Health and its controlled entities. Accordingly no such amounts are included in the key management personnel compensation disclosures above.

Remuneration for the Secretary and Deputy Secretaries are paid by the Ministry of Health and is not reimbursed by the health entities. Accordingly no such amounts are included in the key management personnel compensation disclosures above.

COVER PAGE 2

Illawarra Shoalhaven Local Health District





Opinion

I have audited the accompanying financial statements of the Illawarra Shoalhaven Local Health District


comprehensive income, the statement of changes in equity and the statement of cash flows for the year

then ended, notes comprising a summary of significant accounting policies and other explanatory

information of the District and the consolidated entity. The consolidated entity comprises the District and

the entities it controlled at the year’s end or from time to time during the financial year.








Basis for Opinion


standards are described in the ‘Auditor’s Responsibilities for the Audit of the Financial Statements’ section

of my report.






Parliament further promotes independence by ensuring the Auditor-General and the Audit Office of New

South Wales are not compromised in their roles by:

• providing that only Parliament, and not the executive government, can remove an Auditor–

General



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

opinion.

2


Without modification to the opinion expressed above, I draw attention to the basis of presenting adjusted

budget information detailed in Note 1(ae). The note states that AASB 1055 ‘Budgetary Reporting’ is not

applicable to the District. It also states that, unlike the requirement in AASB 1055 ‘Budgetary Reporting’ to

present original budget information, the District’s financial statements present adjusted budget

information.


The Chief Executive is responsible for the preparation and fair presentation of the financial statements in

accordance with Australian Accounting Standards and the PF&A Act, and for such internal control as the

Chief Executive determines is necessary to enable the preparation and fair presentation of financial

statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Chief Executive must assess the ability of the District and the

consolidated entity to continue as a going concern except where operations will be dissolved by an Act of

Parliament or otherwise cease. The assessment must, disclose, as applicable, matters related to going





material misstatement, whether due to fraud or error, and



accordance with Australian Auditing Standards will always detect material misstatements. Misstatements

can arise from fraud or error. Misstatements are considered material if, individually or in aggregate, they

could reasonably be expected to influence the economic decisions users take based on the financial

statements.

A description of my responsibilities for the audit of the financial statements is located at the Auditing and

Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar3.pdf.




economically

• about the assumptions used in formulating the budget figures disclosed in the financial

statements




Chris Clayton


8 September 2017

SYDNEY


Actual Adjusted

Budget

Unaudited

Actual Notes Actual Adjusted

Budget

Unaudited

Actual

2017 2017 2016 2017 2017 2016

$000 $000 $000 $000 $000 $000


Operating Expenses

----- ----- ----- Employee Related 2 588,024 577,654 579,527






1 4 2 Finance Costs 1(g), 7 1 4 2

895,510 883,377 847,893 Total Expenses excluding losses 910,322 898,047 878,594

Revenue

737,601 730,275 664,048 NSW Ministry of Health Recurrent Allocations 1(h) 737,601 730,275 664,048




760 1,068 915 Investment Revenue 1(h),9 760 1,068 915


4,842 1,889 6,721 Other Revenue 12 4,842 1,889 6,721

890,660 880,160 805,895 Total Revenue 905,472 894,830 836,596

(1,627) (1,529) 222 Gain / (Loss) on Disposal 13 (1,627) (1,529) 222

(489) (2) (230) Other Gains / (Losses) 14 (489) (2) (230)

(6,966) (4,748) (42,006) Net Result 31 (6,966) (4,748) (42,006)




1 ----- ----- Equipment Revaluation Surplus 22 1 ----- -----

1 ----- ----- Total Other Comprehensive Income 1 ----- -----

(6,965) (4,748) (42,006) TOTAL COMPREHENSIVE INCOME (6,965) (4,748) (42,006)




CONSOLIDATIONPARENT

Actual Adjusted

Budget

Unaudited


Budget

Unaudited

Actual

2017 2017 2016 2017 2017 2016

$000 $000 $000 $000 $000 $000

ASSETS

Current Assets


19,393 9,974 16,299 Receivables 17 19,393 9,974 16,299

8,318 7,998 7,915 Inventories 18 8,318 7,998 7,915

70,047 56,662 59,212 70,047 56,662 59,212

----- ----- 4,348 Non-Current Assets Held for Sale 23 ----- ----- 4,348


Non-Current Assets


502,837 503,065 501,591 - Land and Buildings 19 502,837 503,065 501,591



591,113 595,065 592,091 Total Property, Plant & Equipment 591,113 595,065 592,091

159 2,588 248 Intangible Assets 21 159 2,588 248

202 99 99 Other 22 202 99 99

591,474 597,752 592,438 Total Non-Current Assets 591,474 597,752 592,438

661,521 654,414 655,998 Total Assets 661,521 654,414 655,998

LIABILITIES

Current Liabilities

56,996 52,814 50,839 Payables 26 56,996 52,814 50,839

80,139 74,999 73,812 Provisions 27 80,139 74,999 73,812



963 963 959 Provisions 27 963 963 959

963 963 959 Total Non-Current Liabilities 963 963 959


523,423 525,638 530,388 Net Assets 523,423 525,638 530,388

EQUITY

74,281 74,280 74,280 Reserves 74,281 74,280 74,280


523,423 525,638 530,388 Total Equity 523,423 525,638 530,388


CONSOLIDATIONPARENT


Statement of Financial Position as at 30 June 2017


Funds Surplus

$000 $000 $000

Balance at 1 July 2016 456,108 74,280 530,388


Net Result for the year (6,966) ----- (6,966)


Net Increase/(Decrease) in Property, Plant & Equipment 22 ----- 1 1

Total Other Comprehensive Income ----- 1 1

Total Comprehensive Income for the year (6,966) 1 (6,965)

Balance at 30 June 2017 449,142 74,281 523,423

Balance at 1 July 2015 498,060 74,334 572,394





Transfers on Disposal 54 (54) -----

Total Other Comprehensive Income 54 (54) -----

Total Comprehensive Income for the year (41,952) (54) (42,006)

Balance at 30 June 2016 456,108 74,280 530,388




Actual Adjusted

Budget

Unaudited


Budget

Unaudited

Actual

2017 2017 2016 2017 2017 2016

$000 $000 $000 $000 $000 $000


Payments



(885,482) (872,448) (836,300) Other (313,165) (301,681) (289,832)

(893,444) (880,721) (841,261) Total Payments (893,444) (880,721) (841,261)

Receipts

737,601 730,275 664,048 NSW Ministry of Health Recurrent Allocations 737,601 730,275 664,048




759 1,068 915 Interest Received 759 1,068 915


34,863 31,305 37,303 Other 34,863 31,305 37,303

926,272 916,080 839,027 Total Receipts 926,272 916,080 839,027

32,828 35,359 (2,234) NET CASH FLOWS FROM OPERATING ACTIVITIES 31 32,828 35,359 (2,234)


2,848 2,819 1,274 Proceeds from Sale of Property, Plant & Equipment and Intangibles 2,848 2,819 1,274

----- ----- 32,330 Proceeds from Sale of Investments ----- ----- 32,330

(28,338) (34,486) (20,538) Purchases of Property, Plant & Equipment and Intangibles (28,338) (34,486) (20,538)

(25,490) (31,667) 13,066 NET CASH FLOWS FROM INVESTING ACTIVITIES (25,490) (31,667) 13,066

7,338 3,692 10,832 NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS 7,338 3,692 10,832






CONSOLIDATIONPARENT


a)

*

*

b)

*

*

*

ISLHD has the capacity to review timing of subsidy cashflows to ensure that debts can be paid when they become due and payable.

ISLHD has developed an Efficiency and Improvement Plan (EIP) which identifies revenue improvement and cost saving strategies. Benefits from

the EIP are retained by ISLHD and assist in meeting its overall budget target. The EIP is monitored and evaluated by the Ministry throughout the

financial year.


Property, plant and equipment, assets (or disposal groups) held for sale and financial assets at 'fair value through profit and loss' and available for sale

are measured at fair value. Other financial statement items are prepared in accordance with the historical cost convention except where specified

otherwise.



The parent entity, comprises all the operating activities of the Hospital Facilities and the Community Health Centres under its control. It also

encompasses the Restricted Assets (as disclosed in notes 15 and 25), which, while containing assets which are restricted for specified uses by

the grantor or the donor, are nevertheless controlled by the parent entity.

Illawarra Shoalhaven Local Health District Special Purpose Service Entity which was established as a Division of the ISLHD on 1 January 2011 in

accordance with the Health Services Act 1997. This Division provides personnel services to enable ISLHD to exercise its functions.

ISLHD, as a reporting entity, comprises all the entities under its control, namely:


Illawarra Shoalhaven Local Health District (ISLHD) was established under the provisions of the Health Services Act 1997 with effect from 1 January

2011.





ISLHD's financial statements are general purpose financial statements which have been prepared on an accrual basis and in accordance with

applicable Australian Accounting Standards (which include Australian Accounting Interpretations), the requirements of the Health Services Act 1997 and

its regulations (including observation of the Accounts and Audit Determination for Public Health Organisations), the Public Finance and Audit Act 1983

and Public Finance and Audit Regulation 2015 (the Act), and the Financial Reporting Directions issued by the Treasurer under the Act. The financial

statements comply with the NSW Treasury mandates circular for NSW General Government Sector Entities. Further information on the adjusted

budget figures can be found at Note 1(ae).

As a consequence the values in the financial statements presented herein consist of the parent entity and the consolidated entity which comprises the

parent and special purpose service entity. In the process of preparing the consolidated financial statements consisting of the controlling and controlled

entities, all inter-entity transactions and balances have been eliminated, and like transactions and other events are accounted for using uniform

accounting policies.

ISLHD is a NSW Government entity and is controlled by the NSW Ministry of Health, which is the immediate parent. The reporting entity is also

controlled by the State of New South Wales (and is consolidated as part of the NSW Total State Sector Accounts), which is the ultimate parent. The

reporting entity is a not-for-profit entity (as profit is not its principal objective).

These consolidated financial statements for the year ended 30 June 2017 have been authorised for issue by the Chief Executive on 7 September 2017.

The financial statements of ISLHD have been prepared on a going concern basis.

The Secretary of Health, the Chair of Illawarra Shoalhaven Local Health District Board and the Chief Executive, through the Service Agreement have

agreed to service and funding levels for the forward financial year. The Service Agreement sets out the level of financial resources for public health

services under ISLHD's control and the source of these funds. By agreement, the Service Agreement requires local management to control its financial

liquidity and in particular meet benchmarks for the payment of creditors. Where ISLHD fails to meet Service Agreement performance standards, the

Ministry of Health as the state manager can take action in accordance with annual performance framework requirements, including financial support and

increased management interaction by the Ministry.






c)

d)

e)

i)

ii)

iii)

iv)

f)

g)

Other provisions exist when ISLHD has a present legal or constructive obligation as a result of a past event; it is probable that an outflow of

resources will be required to settle the obligation; and a reliable estimate can be made of the amount of the obligation.


Insurance

Finance Costs



Except when an Australian Accounting Standard permits or requires otherwise, comparative information is disclosed in respect of the previous period

for all amounts reported in the financial statements.



Finance costs are recognised as expenses in the period in which they are incurred in accordance with NSW Treasury's Mandate to not-for-profit NSW

general government sector entities.

ISLHD's insurance activities are conducted through the NSW Treasury Managed Fund (TMF) Scheme of self insurance for government entities. The

expense (premium) is determined by the Fund Manager based on past claims experience.The TMF is managed by Insurance and Care NSW (iCare), a

controlled entity of the ultimate parent.



Other Provisions

Salaries and wages (including non-monetary benefits) and paid sick leave that are expected to be settled wholly within 12 months after the end of

the period in which the employees render the service are recognised and measured at the undiscounted amounts of the benefits.

Annual leave is not expected to be settled wholly before twelve months after the end of the annual reporting period in which the employees

render the related service. As such, it is required to be measured at present value in accordance with AASB 119 Employee Benefits (although

short-cut methods are permitted).

Actuarial advice obtained by NSW Treasury , a controlled entity of the ultimate parent, has confirmed that using the nominal annual leave

balance plus the annual leave entitlements accrued while taking annual leave can be used to approximate the present value of the annual leave

liability. On-costs of 17.2% are applied to the value of leave payable at 30 June 2017 (comparable on-costs for 30 June 2016 were 16.7%).

ISLHD has assessed the actuarial advice based on the ISLHD’s circumstances and has determined that the effect of discounting is immaterial to

annual leave.

Unused non-vesting sick leave does not give rise to a liability as it is not considered probable that sick leave taken in the future will be greater

than the benefits accrued in the future.

ISLHD's liability for Long Service Leave and defined benefit superannuation (State Authorities Superannuation Scheme and State

Superannuation Scheme) are assumed by the Crown Entity , which is a controlled entity of the ultimate parent.

ISLHD accounts for the liability as having been extinguished resulting in the amount assumed being shown as part of the non-monetary revenue

item described as 'Acceptance by the Crown Entity of employee benefits'.

Specific on-costs relating to Long Service Leave assumed by the Crown Entity are borne by ISLHD as shown in Note 27.

Long Service Leave is measured at present value in accordance with AASB 119, Employee Benefits. This is based on the application of certain

factors (specified in NSW Treasury Circular 15/09) to employees with five or more years of service, using current rates of pay. These factors

were determined based on an actuarial review to approximate present value.

The superannuation expense for the reporting period is determined by using the formulae specified in the Treasurer’s Directions. The expense for

certain superannuation schemes (i.e. Basic Benefit and First State Super) is calculated as a percentage of the employee's salary. For other

superannuation schemes (i.e. State Superannuation Scheme and State Authorities Superannuation Scheme), the expense is calculated as a

multiple of the employee's superannuation contributions.

Consequential costs to employment are recognised as liabilities and expenses where the employee benefits to which they relate have been

recognised. This includes outstanding amounts of workers’ compensation insurance premiums and fringe benefits tax.





h)


*

*





a monthly charge raised by ISLHD based on a percentage of receipts generated.

the residual of the Private Practice Trust Fund at the end of each financial year, such sum being credited for ISLHD use in the advancement of

ISLHD or individuals within it.


Where material, the cost method of accounting is used for the initial recording of all such services. Cost is determined as the fair value of the services

given and is then recognised as revenue with a matching expense.

Income is measured at the fair value of the consideration or contribution received or receivable. Additional comments regarding the accounting policies

for the recognition of revenue are discussed below.

Revenue from the sale of goods is recognised as revenue when ISLHD transfers the significant risks and rewards of ownership of the assets.


Patient fees are derived from chargeable inpatients and non-inpatients on the basis of rates specified by the NSW Ministry of Health. Revenue is

recognised on an accrual basis when the service has been provided to the patient.

Revenue for highly specialised drugs is paid by the Commonwealth in accordance with the terms of the Commonwealth agreement through Medicare

and reflects the recoupment of costs incurred under Section 100 of the National Health Act 1953 for highly specialised drugs. The agreement provides

for the provision of medicines for the treatment of chronic conditions where specific criteria are met in respect of day admitted patients, non admitted

patients or patients on discharge. Revenue is recognised when the drugs have been provided to the patient.

Patient Fees


An agreement is in place with the Commonwealth Department of Veterans' Affairs through which direct funding is provided for the provision of health

services to entitled veterans. For inpatient services, revenue is recognised by ISLHD on an accrual basis by reference to patient admissions. Non-

admitted patients are recognised by the Ministry of Health in the form of a block grant.


Specialist doctors with rights of private practice are subject to an infrastructure charge for the use of hospital facilities at rates determined by the NSW

Ministry of Health. Charges consist of two components:

ISLHD uses a number of facilities owned and maintained by the local authorities in the area to deliver community health services for which no charges

are raised by the authorities.

Income Recognition

Sale of Goods


Investment Revenue

A bulk billing agreement exists in which motor vehicle insurers effect payment directly to NSW Health for the hospital costs for those persons

hospitalised or attending for inpatient treatment as a result of motor vehicle accidents. ISLHD recognises the revenue on an accruals basis from the

time the patient is treated or admitted into hospital.


Debt Forgiveness

Grants and contributions are recognised as revenues when ISLHD obtains control over the assets comprising the contributions. Control over

contributions is normally obtained upon the receipt of cash.





i)

*

*

j)

k)

l)

Individual items of Property, Plant & Equipment and Intangibles are capitalised where their cost is $10,000 or above.


Land and buildings are owned by the Health Administration Corporation, an entity controlled by the immediate parent. Land and buildings which are

operated/occupied by ISLHD are deemed to be controlled by ISLHD and are reflected as such in the financial statements.

Assets acquired are initially recognised at cost. Cost is the amount of cash or cash equivalents paid or the fair value of the other consideration given to

acquire the asset at the time of its acquisition or construction or, where applicable, the amount attributed to that asset when initially recognised in

accordance with the requirements of other Australian Accounting Standards.




Where payment for an asset is deferred beyond normal credit terms, its cost is the cash price equivalent, i.e. the deferred payment amount is effectively

discounted over the period of credit.

Interstate patient flows are funded through the State Pool, based on activity and consistent with the price determined in the service level agreement.

The funding is recognised as recurrent allocation received from the immediate parent.

Refer to Note 1(ab) for assets transferred as a result of equity transfer.

Most assets are acquired through Health Administration Corporation, a controlled entity of the immediate parent.

amount of GST incurred by ISLHD as a purchaser that is not recoverable from the Australian Taxation Office is recognised as part of an asset's

cost of acquisition or as part of an item of expense; and




Payments are made by the immediate parent on the basis of the allocation for ISLHD as adjusted for approved supplementations mostly for salary

agreements and approved enhancement projects.

This allocation is included in the Statement of Comprehensive Income before arriving at the "Net Result" on the basis that the allocation is earned in

return for the health services provided on behalf of the Ministry. Allocations are normally recognised upon the receipt of cash.



Cash flows are included in the Statement of Cash Flows on a gross basis. However, the GST components of cash flows arising from investing and

financing activities which are recoverable from, or payable to, the Australian Taxation Office are classified as operating cash flows.






2.5%

2.5%

Plant and Equipment

20%

10%

12.5%

5%

25%

12.5%

20%

10%

10%




- Office Equipment


Depreciation is provided for on a straight-line basis for all depreciable assets so as to write off the depreciable amount of each asset as it is consumed

over its useful life to ISLHD. Land is not a depreciable asset. All material identifiable components of assets are depreciated over their useful lives.

- Linen

To ensure that the carrying amount for each asset does not differ materially from its fair value at reporting date, indices are sourced. The indices reflect

an assessment of movements made in the period between revaluations.

Non-specialised assets with short useful lives are measured at depreciated historical cost, as an approximation of fair value. The entity has assessed

that any difference between fair value and depreciated historical cost is unlikely to be material.


Buildings

Physical non-current assets are valued in accordance with the 'Valuation of Physical Non-Current Assets at Fair Value' Policy and Guidelines Paper

(TPP 14-01). This policy adopts fair value in accordance with AASB 13 Fair Value Measurement, AASB 116 Property, Plant and Equipment and AASB

140 Investment Property.


Property, plant and equipment is measured at the highest and best use by market participants that is physically possible, legally permissible and

financially feasible. The highest and best use must be available at a period that is not remote and takes into account the characteristics of the asset

being measured, including any socio-political restrictions imposed by government. In most cases, after taking into account these considerations, the

highest and best use is the existing use. In limited circumstances, the highest and best use may be a feasible alternative use, where there are no

restrictions on use or where there is a feasible higher restricted alternative use.

Fair value of property, plant and equipment is based on a market participants’ perspective, using valuation techniques (market approach, cost

approach, income approach) that maximise relevant observable inputs and minimise unobservable inputs. Also refer Note 19 and Note 24 for further

information regarding fair value.

Depreciation rates are subsequently varied where changes occur in the assessment of the remaining useful life of the assets reported. Depreciation

rates have not changed from the previous year.





“Infrastructure Systems” means assets that comprise public facilities and which provide essential services and enhance the productive capacity of the

economy including roads, bridges, water infrastructure and distribution works, sewerage treatment plants, seawalls and water reticulation systems.



For other assets valued using other valuation techniques, any balances of accumulated depreciation existing at the revaluation date in respect of those

assets are credited to the asset accounts to which they relate. The net asset accounts are then increased or decreased by the revaluation increments

or decrements.







q) Non-Current Assets (or disposal groups) Held for Sale

r) Intangible Assets

s) Maintenance

Where an asset is acquired at no or nominal cost, the cost is its fair value as at the date of acquisition. All research costs are expensed. Development

costs are only capitalised when certain criteria are met.

The useful lives of intangible assets are assessed to be finite.

ISLHD recognises intangible assets only if it is probable that future economic benefits will flow to ISLHD and the cost of the asset can be measured

reliably. Intangible assets are measured initially at cost.

ISLHD at times has certain non-current assets (or disposal groups) classified as held for sale, where their carrying amount will be recovered principally

through a sale transaction, not through continuing use.

Non-current assets (or disposal groups) held for sale are recognised at the lower of carrying amount and fair value less costs of disposal. These assets

are not depreciated while they are classified as held for sale.

Computer software developed or acquired by ISLHD are recognised as intangible assets and are amortised over four years using the straight line

method based on the useful life of the asset for both internally developed assets and direct acquisitions. Most computer software is acquired through

the Health Administration Corporation, a controlled entity of the parent.


Where an asset that has previously been revalued is disposed of, any balance remaining in the revaluation surplus in respect of that asset is transferred

to accumulated funds.

The estimated cost of dismantling and removing an asset and restoring the site is included in the cost of an asset, to the extent it is recognised as a

liability.

Revaluation increments are credited directly to the revaluation surplus, except that, to the extent that an increment reverses a revaluation decrement in

respect of that class of asset previously recognised as an expense in the net result, the increment is recognised immediately as revenue in the net

result.

Revaluation decrements are recognised immediately as expenses in the net result for the year, except that, to the extent that a credit balance exists in

the revaluation surplus in respect of the same class of assets, they are debited directly to the revaluation surplus.

Day-to-day servicing costs or maintenance are charged as expenses as incurred except where they relate to the replacement of a part or component of

an asset, in which case the costs are capitalised and depreciated.

Intangible assets are subsequently measured at fair value only if there is an active market. As there is no active market for ISLHD's intangible assets,

the assets are carried at cost less any accumulated amortisation and impairment losses.

Intangible assets are tested for impairment where an indicator of impairment exists. If the recoverable amount is less than its carrying amount the

carrying amount is reduced to recoverable amount and the reduction is recognised as an impairment loss.

As a not-for-profit entity with no cash generating units, impairment under AASB 136 Impairment of Assets is unlikely to arise. As property, plant and

equipment is carried at fair value or an amount that approximates fair value, impairment can only arise in the rare circumstances such as where the

costs of disposal are material. Specifically, impairment is unlikely for not-for-profit entities given that AASB 136 modifies the recoverable amount test

for non-cash generating assets of not-for-profit entities to the higher of fair value less costs of disposal and depreciated replacement cost, where

depreciated replacement cost is also fair value.





t) Leased Assets

u) Inventories

v) Loans and Receivables

w) Investments

*

*

*

T-Corp Hour-Glass Investment facilities are managed by New South Wales Treasury Corporation, a controlled entity of the ultimate parent. The

facilities are designated at fair value through profit or loss as the management and performance of these financial assets is undertaken on a fair

value basis, in accordance with a documented risk management strategy. Information about these assets is provided internally to ISLHD's key

management personnel.

ISLHD subsequently measures investments classified as 'held for trading' or designated upon initial recognition “at fair value through profit or

loss” at fair value.

Financial assets are classified as 'held for trading' if they are acquired for the purpose of selling in the near term. Derivatives are also classified

as held for trading. Gains or losses on these assets are recognised in the net result for the year.

Available-for-sale investments - Any investments that do not fall into any other category are accounted for as available-for-sale investments and

measured at fair value. Gains or losses on available-for-sale investments are recognised in other comprehensive income until disposed or

impaired, at which time the cumulative gain or loss previously recognised in other comprehensive income is recognised in the net result for the

year. However, interest calculated using the effective interest method and dividends are recognised in the net result for the year.

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. These financial

assets are recognised initially at fair value. Subsequent measurement is at amortised cost using the effective interest method, less an allowance for any

impairment of receivables. Any changes are recognised in the Net Result when impaired, derecognised or through the amortisation process.


Investments are initially recognised at fair value plus, in the case of investments not at fair value through profit or loss, transaction costs. ISLHD

determines the classification of its financial assets at initial recognition and, when allowed and appropriate, re-evaluates this at each financial year end.


Purchases or sales of investments under contract that require delivery of the asset within the timeframe established by convention or regulation are

recognised on the trade date; i.e. the date ISLHD commits to purchase or sell the asset.

The movement in the fair value of the T Corp Hour-Glass Investment facilities incorporates distributions received as well as unrealised

movements in fair value and is reported in the line item ‘investment revenue’.

Held-to-maturity investments – Non-derivative financial assets with fixed or determinable payments and fixed maturity that ISLHD has the positive

intention and ability to hold to maturity are classified as 'held-to-maturity'.

These investments are measured at amortised cost using the effective interest method. Changes are recognised in the net result for the year

when impaired, derecognised or through the amortisation process.

The risk management strategy of ISLHD has been developed consistent with the investment powers granted under the provision of the Public

Authorities (Financial Arrangements) Act.

T Corp Hour-Glass investments are made in an effort to improve interest returns on cash balances otherwise available whilst also providing

secure investments.

The fair value of investments that are traded at fair value in an active market is determined by reference to quoted current bid prices at the close of

business on the Statement of Financial Position date.

Inventories held for distribution are measured at cost, adjusted when applicable for any loss of service potential. Inventories (other than those held for

distribution) are stated at the lower of cost and net realisable value.

A distinction is made between finance leases which effectively transfer from the lessor to the lessee substantially all the risks and rewards incidental to

ownership of the leased assets, and operating leases under which the lessor effectively retains all such risks and rewards.

Where a non-current asset is acquired by means of a finance lease, at the commencement of the lease term, the asset is recognised at its fair value or,

if lower, the present value of the minimum lease payments, at the inception of the lease. The corresponding liability is established at the same amount.

Lease payments are allocated between the principal component and the interest expense.






x) Impairment of Financial Assets

y) De-recognition of Financial Assets and Financial Liabilities

*

*

z) Payables

aa) Fair Value Hierarchy

*

*

*

These amounts represent liabilities for goods and services provided to ISLHD and other amounts. Payables are recognised initially at fair value.

Subsequent measurement is at amortised cost using the effective interest method. Short-term payables with no stated interest rate are measured at the

original invoice amount where the effect of discounting is immaterial.




where ISLHD has not transferred substantially all the risks and rewards, if ISLHD has not retained control.

A financial asset is derecognised when the contractual rights to the cash flows from the financial assets expire; or if ISLHD transfers the financial asset:


Any reversals of impairment losses are reversed through the net result for the year, where there is objective evidence, except reversals of impairment

losses on an investment in an equity instrument classified as “available for sale”, must be made through the reserve. Reversals of impairment losses of

financial assets carried at amortised cost cannot result in a carrying amount that exceeds what the carrying amount would have been had there not

been an impairment loss.

Payables are recognised for amounts to be paid in the future for goods and services received, whether or not billed to ISLHD.

ISLHD recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.


A number of ISLHD’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and

liabilities. When measuring fair value, the valuation technique used maximises the use of relevant observable inputs and minimises the use of

unobservable inputs. Under AASB 13 Fair Value Measurement, ISLHD categorises, for disclosure purposes, the valuation techniques based on the

inputs used in the valuation techniques as follows:

Where ISLHD has neither transferred nor retained substantially all the risks and rewards or transferred control, the asset is recognised to the extent of

ISLHD's continuing involvement in the asset.


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

impairment is established when there is objective evidence that the entity will not be able to collect all amounts due.

For financial assets carried at amortised cost, the amount of the allowance is the difference between the asset’s carrying amount and the present value

of estimated future cash flows, discounted at the effective interest rate. The amount of the impairment loss is recognised in the net result for the year.

When an available for sale financial asset is impaired, the amount of the cumulative loss is removed from equity and recognised in the net result for the

year, based on the difference between the acquisition cost (net of any principal repayment and amortisation) and current fair value, less any impairment

loss previously recognised in the net result for the year.





ab) Equity Transfers

ac) Equity and Reserves

(i)

(ii)

(iii)

ad) Trust Funds

ae) Adjusted Budgeted Amounts

af) Emerging Asset

All other equity transfers are recognised at fair value, except for intangibles. Where an intangible has been recognised at (amortised) cost by the

transferor because there is no active market, ISLHD recognises the asset at the transferor's carrying amount. Where the transferor is prohibited from

recognising internally generated intangibles, ISLHD does not recognise that asset.

Transfers arising from an administrative restructure involving not-for-profit entities and for-profit government entities are recognised at the amount at

which the asset was recognised by the transferor immediately prior to the restructure. Subject to below, in most instances this will approximate fair

value.

Accumulated Funds

The category "accumulated funds" includes all current and prior period retained funds.

Revaluation Surplus

The revaluation surplus is used to record increments and decrements on the revaluation of non-current assets. This accords with ISLHD's policy

on the revaluation of property, plant and equipment as discussed in Note 1(n).

Separate Reserves

Separate reserve accounts are recognised in the financial statements only if such accounts are required by specific legislation or Australian

Accounting Standards.

ISLHD receives monies in a trustee capacity for various trusts as set out in Note 29.

ISLHD's emerging interest in the Grand Pacific Health Centre at 107 Scenic Drive, Nowra has been valued in accordance with the Ministry of Health's

policy for Accounting for Privately Financed Projects. This policy required ISLHD to initially determine the estimated written down replacement cost by

reference to the project's historical cost escalated by a construction index and the asset's estimated working life. The estimated written down

replacement cost was then allocated on a systematic basis over the concession period of 30 years using the annuity method and the Government Bond

rate of 2.98% at commencement of the concession period.

The transfer of net assets between entities as a result of an administrative restructure, transfers of programs/functions and parts thereof between

entities controlled by the ultimate parent are recognised as an adjustment to "Accumulated Funds". This treatment is consistent with AASB 1004,

Contributions and Australian Accounting Interpretation 1038, Contributions by Owners Made to Wholly-Owned Public Sector Entities.

As ISLHD performs only a custodial role in respect of these monies, and because the monies cannot be used for the achievement of ISLHD's own

objectives, these funds are not recognised in the financial statements.

NSW Health's budget is shown at a consolidated level when presented in parliament each year (i.e. in the NSW Government Budget Papers). ISLHD's

budget is not presented in parliament, therefore AASB 1055 Budgetary Reporting is not applicable. Unlike the requirement in AASB 1055 ‘Budgetary

Reporting’ to present original budget information, ISLHD's financial statements present adjusted budget information.The adjusted budgeted amounts are

drawn from the initial Service Agreements between ISLHD and the NSW Ministry of Health at the beginning of the financial year, as well as any

adjustments for the effects of additional supplementation provided in accordance with delegations to derive a final budget at year end (i.e. adjusted

budget). The budget amounts are not subject to audit and, accordingly, the relevant column entries in the financial statements are denoted as

"Unaudited".

Major variances between the original budgeted amounts and the actual amounts disclosed in the primary financial statements are explained in Note 35.





ag) Changes in Accounting Policy, including new or revised Australian Accounting Standards

(i)

(ii)

NSW public sector entities are not permitted to early adopt new Australian Accounting Standards, unless NSW Treasury determines otherwise.

The following new Australian Accounting Standards, excluding standards not considered applicable or material to NSW Health, have not been

applied and are not yet effective. The possible impact of these Standards in the period of initial application includes:



The accounting policies applied in 2016-17 are consistent with those of the previous financial year except as a result of new or revised Australian

Accounting Standards that have been applied for the first time as follows:

AASB 16 Leases applies to annual periods beginning on or after 1 January 2019. The standard introduces a new approach to lease accounting

that requires a lessee to recognise assets and liabilities for the rights and obligations created by leases. The application of this standard will likely

have a significant transitional impact as all leases, except short term (<12 months) and low value leases, will be brought on balance sheet.

AASB 1058 Income of Not-for-Profit Entities applies to not-for-profit entities and is effective for annual periods beginning on or after 1 January

2019. This standard requires entities to recognise income where the consideration to acquire an asset, including cash, is significantly less than

the fair value principally to enable the entity to further its objectives. Under this standard, the timing of income recognition may be impacted

depending on whether there is a liability or other performance obligation associated with the acquired asset, including cash.

AASB 1058 also requires government agencies to recognise income for volunteer services received if the fair value of those services can be

measured reliably and the services would have been purchased if they had not been donated. This is consistent with current practice under

AASB 1004 Contributions and is not expected to materially impact the financial statements.

AASB 15 Revenue from Contracts with Customers (and associated amending standards AASB 2014-5, AASB 2015-8, AASB 2016-3, AASB

2016-7 and AASB 2016-8) applies to annual periods beginning on or after 1 January 2018 for not-for-profit entities. AASB 15 establishes a

contract-based five-step analysis of transactions to determine the nature, amount and timing of revenue arising from contracts with customers.

This new standard requires revenue to be recognised when control of the goods or services are transferred to the customer at the transaction

price. This may impact the timing of recognising certain revenue currently recognised by reference to the stage of completion of the transaction.

AASB 2015-6 Amendments to Australian Accounting Standards – Extending Related Party Disclosures to Not-for-Profit Public Sector Entities

extends the scope of AASB 124 Related Party Disclosures to include application by not-for-profit public sector entities. The application of this

standard has resulted in increased disclosures in the financial statements relating to related party transactions and Key Management Personnel

compensation.

AASB 2016-2 Amendments to Australian Accounting Standards - Disclosure Initiative: Amendments to AASB 107 applies to annual periods

beginning on or after 1 January 2017. The standard amends AASB 107 Statement of Cash Flows to require additional disclosures regarding

financing activities in the Statement of Cash Flows. The change is not expected to materially impact the financial statements.

AASB 9 Financial Instruments and AASB 2014-7 Amendments to Australian Accounting Standards arising from AASB 9 are applicable for

reporting period on or after 1 January 2018. AASB 9 will replace AASB 139 Financial Instruments: Recognition and Measurement and

establishes new principles for the financial reporting of financial assets, financial liabilities and hedge accounting. AASB 9 also introduces a

forward-looking 'expected credit losses' impairment model, which may significantly impact the timing and amount of impairment recognition.


2017 2016 2017 2016

$000 $000 $000 $000

2. Employee Related





----- ----- Redundancies 337 555


----- ----- Fringe Benefits Tax 67 (138)

----- ----- 588,024 579,527




46 1,556 Long Service Leave ----- -----

337 555 Redundancies ----- -----


67 (138) Fringe Benefits Tax ----- -----

573,212 548,826 ----- -----

Personnel services of Illawarra Shoalhaven Local Health District

was provided by its controlled entity, Illawarra Shoalhaven Local

Health District Special Purpose Service Entity.





592 1,095 Consultancies 592 1,095

10 ----- Contractors 10 -----


49,176 33,571 Drug Supplies 49,176 33,571

18,752 16,738 Food Supplies 18,752 16,738




809 1,002 Insurance 809 1,002






734 960 Rates and Charges 734 960

5,618 5,045 Rental 5,618 5,045

1,425 1,590

Hosted Services Purchased from entities controlled by the

immediate parent 1,425 1,590

33,141 34,061

Special Service Departments (Dental, Radiology, Pathology, Allied

Health ) 33,141 34,061



15,448 15,335 Other (See 4(a) below) 15,448 15,335

242,171 226,521 242,171 226,521





2017 2016 2017 2016

$000 $000 $000 $000


a) Other Includes:

5 ----- Aircraft Expenses (Ambulance) 5 -----

1,924 1,649 Contract for Patient Services 1,924 1,649







1,308 1,459 Other Operating Lease Expense - Minimum Lease Payments 1,308 1,459




15,448 15,335 15,448 15,335





10 42 Other 10 42

15,444 20,278 15,444 20,278

2,677 2,397 2,677 2,397

18,121 22,675 18,121 22,675

The majority of “Special Services Departments” were paid to the Health Administration Corporation, an entity controlled by the immediate parent.

Some of “Other Operating Expenses – Isolated Patient Travel and Accommodation Assistance Scheme”were paid to the Health Administration Corporation, a controlled

entity of the immediate parent.

Some of “Other Operating Expenses – Legal Services” were paid to the Crown Solicitor’s Office, an entity controlled by the ultimate parent.

Maintenance Expense - Contracted Labour and Other (Non-Employee

Related in Note 4)

Employee Related/Personnel Services Maintenance Expense included in

Notes 2 and 3




Some “Advertising” was paid to The Ministry of Health, the immediate parent and the Public Service Commission, an entity controlled by the ultimate parent.

“Auditor’s Remuneration – Audit of Financial Statements” was paid to The Audit Office of New South Wales, an entity controlled by the ultimate parent.

The majority of “Food Supplies”, “Motor Vehicle Expenses” & “Other Operating Expenses – Corporate Support Services” were paid to the Health Administration

Corporation and entity controlled by the immediate parent.

The majority of “Hospital Ambulance Transport Costs” were paid to the Health Administration Corporation, and the Sydney Children’s Hospitals Network, both controlled

entities of the immediate parent.

The majority of “Information Management Expenses” was paid to the Health Administration Corporation, South Eastern Sydney Local Health District and Western

Sydney Local Health District, all controlled entities of the immediate parent.

The majority of “Rates and Charges” were paid to Sydney Water, an entity controlled by the ultimate parent.

Some of "Domestic Supplies" were paid to the Health Administration Corporation, a controlled entity of the immediate parent.


2017 2016 2017 2016

$000 $000 $000 $000





89 177 Amortisation - Intangible Assets 89 177

29,479 28,237 29,479 28,237



2,854 330 Grants to Research Organisations 2,854 330


236 68 Other Grants 236 68

7,176 4,499 7,176 4,499

'Grants paid to entities controlled by the immediate parent' was

predominantly paid to NSW Health Pathology, an entity

controlled by the immediate parent.

7. Finance Costs

1 2 Other Interest Charges 1 2

1 2 1 2





2017 2016 2017 2016

$000 $000 $000 $000





39 45 Other 39 45


Patient Fees

36,020 34,053 - Inpatient Fees 36,020 34,053

985 1,037 - Nursing Home Fees 985 1,037



119 102 Staff-Meals and Accommodation 119 102



2,179 1,976 Car Parking 2,179 1,976

470 428 Child Care Fees 470 428

1 29 Clinical Services (excluding Clinical Drug Trials) 1 29

283 297 Commercial Activities 283 297




21 (14) Patient Transport Fees 21 (14)

318 341 Private Use of Motor Vehicles 318 341

324 556 Salary Packaging Fee 324 556

643 1,103 Hosted Services Provided to entities controlled by immediate parent 643 1,103

624 634 Services Provided to Non NSW Health Organisations 624 634

79 59 Other 79 59

115,851 101,990 115,851 101,990


241 171 Interest 241 171

T Corp Hour Glass Investment Facilities Designated at Fair Value

519 744 through Profit or Loss 519 744

760 915 760 915




The State Insurance Regulatory Authority is an entity controlled by the

ultimate parent.

Some of the 'Services provided to Non NSW Health Organisations' were

earned from entities controlled by the ultimate parent.

Some of the 'Patient Fees - Inpatient Fees and Non Inpatient Fees' were

earned from the immediate parent.


2017 2016 2017 2016

$000 $000 $000 $000


1,068 662 Clinical Drug Trials 1,068 662


785 2,433 Commonwealth Teaching Hospital Grants 785 2,433


1,404 1,235 Cancer Institute NSW Grants 1,404 1,235

3,713 1,176 Grants received from entities controlled by the ultimate parent 3,713 1,176

876 1,745 Grants received from entities controlled by the immediate parent 876 1,745

508 61 Research Grants 508 61

1,671 3,487 Other Grants 1,671 3,487

17,778 16,370 17,778 16,370

The Cancer Institute NSW is an entity controlled by the immediate parent.




----- ----- 14,812 30,701

12. Other Revenue




125 24 Insurance Refunds 125 24

456 527 Lease and Rental 456 527

103 72 Sale of Merchandise, Old Wares and Books 103 72

13 11 Sponsorship 13 11


481 753 Other 481 753

4,842 6,721 4,842 6,721

Some 'Other' revenue was received from entities controlled by the immediate parent.

The majority of grants that were received from entities controlled by the immediate parent were received from

Western Sydney Local Health District, Health Education and Training Institute, eHealth NSW and Agency for

Clinical Innovation.




The following liabilities and expenses have been assumed by the Crown

Entity:


2017 2016 2017 2016

$000 $000 $000 $000







127 532 Written Down Value 127 532



(98) (187) Property, Plant and Equipment (98) (187)

4,348 520 Assets Held for Sale 4,348 520

2,819 929 Proceeds from Disposal 2,819 929

Gain/(Loss) on Disposal of Assets

(1,529) 409 Held for Sale (1,529) 409

(1,627) 222 Total Gain/(Loss) on Disposal (1,627) 222


(489) (230) Impairment of Receivables (489) (230)

(489) (230) (489) (230)



Purchase of Health Promotion, Total


Research

$000 $000 $000

1,386 6,758 8,144

9,201 18,236 27,437

Total amount of unexpended contributions as at reporting date 10,587 24,994 35,581





Contributions recognised as revenues during the current reporting period for

which expenditure in the manner specified had not occurred as at reporting

date

Contributions recognised in previous years which were not expended in the

current reporting period

PARENT

2017 2016 2017 2016

$000 $000 $000 $000



22,398 21,879 Short Term Deposits 22,398 21,879

42,336 34,998 42,336 34,998

For the purposes of the Statement of Cash Flows, cash and

cash equivalents include cash at bank, cash on hand and short-

term deposits.

Cash & cash equivalent assets recognised in the Statement of

Financial Position are reconciled at the end of the financial year

to the Statement of Cash Flows as follows:



Refer to Note 36 for details regarding credit risk, liquidity risk

and market risk arising from financial instruments.

CONSOLIDATION





2017 2016 2017 2016

$000 $000 $000 $000

17. Receivables

Current




1,464 2,761 Other Debtors 1,464 2,761

18,098 15,252 Sub Total 18,098 15,252

(762) (661) Less Allowance for Impairment (762) (661)

17,336 14,591 Sub Total 17,336 14,591

2,057 1,708 Prepayments 2,057 1,708

19,393 16,299 19,393 16,299






(422) (203) the Net Result (422) (203)

(697) (651) Balance at 30 June (697) (651)


Other Debtors




(67) (26) the Net Result (67) (26)

(65) (10) Balance at 30 June (65) (10)

(762) (661) (762) (661)

c) The current sale of goods and services balances above include

the following patient fee receivables:

758 521 Patient Fees - Compensable 758 521

998 843 Patient Fees - Ineligible 998 843


7,394 5,932 7,394 5,932

Details regarding credit risk, liquidity risk and market risk, including financial

assets that are either past due or impaired are disclosed in Note 36.




'Intra Health Receivables' include amounts receivable from entities controlled by the immediate parent. The

majority of the balance at reporting date was receivable from the NSW Ministry of Health, eHealth NSW, South

Eastern Sydney LHD and Cancer Institute NSW.


2017 2016 2017 2016

$000 $000 $000 $000

18. Inventories

2,819 2,529 Drugs 2,819 2,529


674 608 Other Including Goods in Transit 674 608

8,318 7,915 8,318 7,915





2017 2016 2017 2016

$000 $000 $000 $000















591,113 592,091 At Net Carrying Amount 591,113 592,091

* For non-specialised assets with short useful lives, recognition at depreciated historical cost is regarded as an

acceptable approximation of fair value, in accordance with Treasury Policy Paper 14-01.









Land Buildings Plant and Infrastructure Total

Equipment Systems

$000 $000 $000 $000 $000

2017

Net carrying amount at start of year 55,395 446,196 51,946 38,554 592,091

Additions ----- 21,565 6,974 ----- 28,539

Disposals ----- ----- (127) ----- (127)

Depreciation Expense ----- (18,525) (9,039) (1,826) (29,390)

Reclassifications ----- (1,794) 1,794 ----- -----

Net carrying amount at end of year 55,395 447,442 51,548 36,728 591,113


Equipment Systems

$000 $000 $000 $000 $000

2016

Net carrying amount at start of year 55,395 470,064 34,650 40,091 600,200

Additions ----- 6,910 12,983 ----- 19,893

Recognition of Assets Held for Sale ----- ----- ----- (46) (46)

Disposals ----- ----- (532) ----- (532)

----- ----- 636 ----- 636


Reclassifications ----- (12,612) 12,262 350 -----

Net carrying amount at end of year 55,395 446,196 51,946 38,554 592,091

Transfers within NSW Health Entities through Statement of

Comprehensive Income

(i) Land and Buildings include land owned by the Health Administration Corporation but controlled by ISLHD [see note 1(k)].

(ii) Indices provided by Savills Valuation Pty Ltd were not applied as as they were deemed immaterial.




2017 2016 2017 2016

$000 $000 $000 $000

21. Intangible Assets

Intangibles

1,218 1,218 Cost (Gross Carrying Amount) 1,218 1,218

1,059 970 Less Accumulated Amortisation and Impairment 1,059 970

159 248 Net Carrying Amount 159 248

159 248 Total Intangible Assets at Net Carrying Amount 159 248

21. Intangible Assets - Reconciliation

248

(177)

309

116

Total

$000

(89)

159

Total

$000

248

2016

Net carrying amount at start of year

Net carrying amount at end of year


Additions (From Internal Development or Acquired Separately)

Amortisation (Recognised in Depreciation and Amortisation)







2017


2017 2016 2017 2016

$000 $000 $000 $000

22. Other Assets

Non-Current

202 99 Emerging Rights to Assets (refer Note 1(af)) 202 99

202 99 202 99

1 ----- Emerging Rights to Assets Asset Revaluation 1 -----

1 ----- 1 -----

23. Non-Current Assets Held for Sale

Assets Held for Sale

----- 4,302 Land and Buildings ----- 4,302

----- 46 Infrastructure Systems ----- 46

----- 4,348 ----- 4,348




Amounts Recognised in Other Comprehensive Income Relating to

Emerging Righs to Assets





$000 $000 $000 $000




Other Assets (Note 22) Emerging Assets ----- ----- 202 202

----- 10,292 500,273 510,565


Work in Progress and newly completed projects are carried at cost, therefore excluded from figures above and as a result will not agree to Note 19.


$000 $000 $000 $000




Other Assets (Note 22) Emerging Assets ----- ----- 99 99

----- 4,348 ----- 4,348

----- 14,892 519,239 534,131


Work in Progress and newly completed projects are carried at cost, therefore excluded from figures above and as a result will not agree to Note 19.


Non-Current Assets Held for Sale (Note 23)

For land, buildings and infrastructure systems the ISLHD obtains external valuations by independent valuers at least every three years. The last

revaluation was performed by Savills Valuation Pty Ltd for the 2014/15 financial year. Savills Valuation Pty Ltd is an independent entity and is not an

associated entity of ISLHD.

At the end of each reporting period a fair value assessment is made on any movements since the last revaluation, and a determination as to whether

any adjustments need to be made. These adjustments are made by way of application of indices refer, note 20 reconcilation.





The non-current assets categorised in a) above have been measured as either level 2 or level 3 based on the following valuation techniques and

inputs:






Non-Current Assets Held for Sale is a non-recurring item that is measured at fair value less cost to sell, which is less than its carrying amount. These

assets are categorised as level 2.

For buildings and infrastructure, many assets are of a specialised nature or use, and thus the most appropriate valuation method is depreciated

replacement cost. These assets are included as Level 3 as these assets have a high level of unobservable inputs. However, residential properties

are valued on a market approach and included in level 2.

For land, the valuation by the valuers is made on a market approach, comparing similar assets (not identical) and observable inputs. The most

significant input is price per square metre.

All commercial and non-restricted land is included in Level 2 as these land valuations have a high level of observable inputs although these lands are

not identical.

The majority of the restricted land has been classified as level 3 as, although observable inputs have been used, a significant level of professional

judgement is required to adjust inputs in determining the land valuations. Certain parcels of land have zoning restrictions, for example hospital

grounds, and values are adjusted accordingly.




2017 Other

Assets

$000 $000 $000 $000

Fair value as at 1 July 2016 480,586 38,554 99 519,239

Additions 958 ----- 103 1,061

Depreciation (18,201) (1,826) ----- (20,027)

Fair value as at 30 June 2017 463,343 36,728 202 500,273

2016 Land and Infrastructure Other Total Level 3

Buildings Systems Assets Recurring

$000 $000 $000 $000

Fair value as at 1 July 2015 343,742 40,091 ----- 383,833

Additions 124,051 ----- 99 124,150

Transfers from Level 2 30,639 ----- ----- 30,639

Depreciation (17,846) (1,841) ----- (19,687)

Reclassification and Assets Held for Sale ----- 304 ----- 304

Fair value as at 30 June 2016 480,586 38,554 99 519,239




Land and

Buildings

Infrastructure

Systems

Total Level 3

Recurring

Transfers from Level 2 mainly relate to assets initially recognised at cost (e.g. Work in Progress) which have in the current year, been subject to asset

revaluations consistent with the specialised nature/use of the assets.

There were no transfers between Levels during the period.


2017 2016 2017 2016

$000 $000 $000 $000


Category


1,255 706 Research Grants 1,255 706


35,581 32,110 35,581 32,110




ISLHD's financial statements include the following assets which are restricted

by externally imposed conditions, eg. donor requirements. The assets are

only available for application in accordance with the terms of the donor

restrictions.


2017 2016 2017 2016

$000 $000 $000 $000

26. Payables

Current




19,632 17,972 Creditors 19,632 17,972

Other Creditors


6,041 11,601 - Other 6,041 11,601

56,996 50,839 56,996 50,839





Details regarding credit risk, liquidity risk and market risk, including a maturity analysis of the above payables

are disclosed in Note 36.

The majority of 'Payables to entities controlled by the immediate parent' relate to balances payable to the Health

Administration Corporation, an entity controlled by the immediate parent.


2017 2016 2017 2016

$000 $000 $000 $000

27. Provisions

Current





1,270 ----- Other 1,270 -----

80,139 73,812 80,139 73,812

Non-Current

----- ----- Long Service Leave Consequential On-Costs 963 959

963 959 Provision for Personnel Services Liability ----- -----

963 959 963 959



----- ----- Provisions - Non-Current 963 959



100,073 90,296 100,073 90,296





2017 2016 2017 2016

$000 $000 $000 $000




409 284 Later than one year and not later than five years 409 284





249 941 Later than five years 249 941



Aggregate capital expenditure for the acquisition of land and

buildings, plant and equipment, infrastructure systems, and

intangible assets, contracted for at balance date and not

provided for:

The total 'Capital Expenditure Commitments' and 'Operating

Lease Commitments' of $17.462m as at 30 June 2017 (2016

$21.985m) includes input tax credits of $1.565m that are

expected to be recoverable from the Australian Taxation Office

(2016 $1.965m).

Future non-cancellable operating lease rentals not provided for

and payable:

The operating lease commitments above are for motor vehicles,

information technology, equipment including personal

computers, medical equipment and other equipment.

Some of 'capital commitments' contracted but not provided for

related to capital works overseen by the Health Administration

Corporation, an entity controlled by the immediate parent.

Some 'operating lease commitments' contracted but not

provided for related to leases with the NSW Department of

Finance, Services and Innovation, an entity controlled by the

ultimate parent.





29. Trust Funds

2017 2016 2017 2016 2017 2016

$000 $000 $000 $000 $000 $000

151 138 ----- ----- 151 138

Revenue 25 13 17,486 17,304 17,511 17,317

Expenses ----- ----- (17,486) (17,304) (17,486) (17,304)

176 151 ----- ----- 176 151

Trust Funds

Balance at the beginning

of the financial year

Balance at the end of the

financial year




ISLHD holds trust funds of $176,000 which are held for the safe keeping of patients' monies, deposits on hired items of

equipment and Private Practice Trusts.

These funds are excluded from the financial statements as ISLHD cannot use them for the achievement of its objectives.

The following is a summary of the transactions in the trust account.

Refundable Private Practice Total

Deposits


a) Contingent asset related to commitment of expenditure - refer to note 28 (c)

b) District considers it has no contingent liabilities at reporting date.






2017 2016 2017 2016

$000 $000 $000 $000


32,828 (2,234) Net Cash Flows from Operating Activities 32,828 (2,234)


(489) (230) Allowance for Impairment (489) (230)

----- 52 (Increase)/ Decrease Income in Advance ----- 52


4,156 48 Increase / (Decrease) in Prepayments and Other Assets 4,156 48

(6,225) (6,963) (Increase)/ Decrease in Payables from Operating Activities (6,225) (6,963)

(1,627) 222 Net Gain/ (Loss) on Sale of Property, Plant and Equipment (1,627) 222

201 206 Assets donated or brought to account for the first time 201 206

(6,966) (42,006) Net Result (6,966) (42,006)


201 206 Assets Received by Donation 201 206

201 206 201 206


- Chaplaincies and Pastoral Care

- Pink Ladies/Hospital Auxiliaries

- Patient Support Groups

- Community Organisations

- Patient & Family Support

- Patient Services, Fund Raising

- Practical Support to Patients and Relatives

- Counselling, Health Education, Transport, Home Help & Patient Activities





It is considered impracticable and immaterial to quantify the

monetary value of voluntary services provided to ISLHD.

Services provided include:

Unclaimed salaries and wages are paid to the credit of the NSW

Treasury in accordance with the provisions of the Industrial Relations

Act,1996.

All money and personal effects of patients which are left in the custody

of the ISLHD by any patient who is discharged or dies in the hospital

and which are not claimed by the person lawfully entitled thereto within

a period of twelve months are recognised as the property of the ISLHD.

All such money and the proceeds of the realisation of any personal

effects are lodged to the credit of the Samaritan Fund which is used

specifically for the benefit of necessitous patients or necessitous

outgoing patients.



Net Result


Cash Flows

$000

684,008

13,124

357

Integrated Care Demonstrator Program 259

Nurse Midwife Strategy Reserve 655

Mental Health Innovation Fund - Balaang Healing Project 526

145

134

262

NSW Homelessness Program 276

NPA on Adult Public Dental Services 1,150

Substance Use in Pregnancy Services 272

Illawarra Health Information Platform 3,004

Prior Year 2015/16 Revenue Washup 1,801

Palliative Care Flexible Funding Pool 145

Whole of Health Program 180

Nursing & Midwifery Enhancements 123

S100 Highly Specialised Drugs Co-payments 255

Workplace Culture and Safety 214

Increase in Acute Admited, ED & Non Admitted Activity 9,997

Voluntary Redundancy Reimbursement 335

Cash Adjustment for Approved LFI Projects 11,251

Bed Replacement Program 521

Isolated Patients Travel and Accommodation Assistance Scheme 522

Other Allocations 759

Balance as per Statement of Comprehensive Income 730,275

Other




Movements in the level of the NSW Ministry of Health Recurrent Allocation that have occurred since the time of the initial allocation on 30 June 2016 are

as follows:

The actual Net Result was lower than adjusted budget by $2.2 million, primarily due to:

Employee Related expenses (including use of Visiting Medical Officers) as a result of higher activity and District investment in specific clinical safety

initiatives. Non-cash impact of annual leave expense for additional staff and take-up of increase in leave provisions for Award increases due in July 2017

were also significant contributors. Patient Fee revenue target was not achieved due to lower than required take-up rate of private insurance usage.

Other Revenue sources were favourable, mainly due to TMF Hindsight favourable return and various Industry and Community donations. The District

also received $7.3m in Subsidy above budgeted amount. Since 2011, the District has operated at Performance Level '0'. This level requires minimal

Ministry intervention and is the highest rating in the Ministry of Health performance matrix for Local Health Districts.

NSW Aged Care Assessment Program

Organ and Tissue Donation Service

Translational Research Grant Scheme

NGO Grants Program - Drug Summit 4

Award Increases

Special Projects

Initial Allocation, 30 June 2016

Cash and Cash Equivalents were $3.6m higher than budgeted mostly due to timing difference in ATO processing payments and settlement of Intra

Health transactions. Total Liabilities are $9.3m higher due to clearing ATO timing difference, increase in employee provisions and settlement of Intra

Health creditors.

Net Cash Flows from Operating Activities was influenced by higher than budgeted employee related expenses but was more than off-set by higher cash

from revenue. Net cashflows from Investing Activities recorded an outflow of $25.5m reflecting a period of investment in property and equipment. This

resulted in an overall Net Cash increase of $7.3m for the year.





2017 2016

$000 $000



56,370 46,303


Payables (note 26)** 52,624 48,998

52,624 48,998

Notes


(b) Credit Risk

Cash


N/A


**Excludes statutory payables and unearned revenue (i.e. not within scope of AASB7 Financial Instruments Disclosures).

Credit risk arises when there is the possibility that the counterparty will default on their contractual obligations, resulting in a financial loss to ISLHD. The

maximum exposure to credit risk is generally represented by the carrying amount of the financial assets (net of any allowance for impairment).

Credit risk associated with ISLHD's financial assets, other than receivables, is managed through the selection of counterparties and establishment of

minimum credit rating standards. Authority deposits held with NSW TCorp are guaranteed by the State.


Credit risk arises from financial assets of ISLHD, including cash, receivables and authority deposits. No collateral is held by ISLHD. ISLHD has not

granted any financial guarantees.

Cash comprises cash on hand and bank balances deposited within the NSW Treasury banking system. Interest is earned on daily bank balances at rates

of approximately 2.35% in 2016/17 compared to 2.81% in the previous year.

Category




ISLHD's principal financial instruments are outlined below. These financial instruments arise directly from ISLHD's operations or are required to finance its

operations. ISLHD does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.

ISLHD's main risks arising from financial instruments are outlined below, together with ISLHD's objectives, policies and processes for measuring and

managing risk. Further quantitative and qualitative disclosures are included throughout these financial statements.

The Chief Executive has overall responsibility for the establishment and oversight of risk management and reviews and agrees policies for managing

each of these risks. Risk management policies are established to identify and analyse the risks faced by ISLHD, to set risk limits and controls and to

monitor risks. Compliance with policies is reviewed on a regular basis.






Total 1,2

Past due but not

impaired 1,2

Considered

impaired 1,2

2017 $000 $000 $000

<3 months overdue 776 725 51

3 months - 6 months overdue 374 259 115

> 6 months overdue 856 260 596

2016

<3 months overdue 651 623 28

3 months - 6 months overdue 252 171 81

> 6 months overdue 702 150 552

Notes


Authority Deposits

In addition Patient Fees Compensables are frequently not settled within 6 months of the date of the service provision due to the length of time it takes to

settle legal claims. Most of ISLHD's debtors are health insurance companies or compensation insurers settling claims in respect of inpatient treatments.

ISLHD is not materially exposed to concentrations of credit risk to a single trade debtor or group of debtors. Based on past experience, debtors that are

not past due (2017: $7.269M ; 2016: $8.832M) and not more than 3 months past due (2017: $725K ; 2016: $623K) are not considered impaired.

Financial assets that are past due or impaired could be either 'Sales of Goods and Services' or 'Other Debtors' in the 'Receivables' category of the

Statement of Financial Position. Patient Fees Ineligibles represent the majority of financial assets that are past due or impaired.

2 The ageing analysis excludes statutory receivables, as these are not within the scope of AASB7 Financial Instruments Disclosures and excludes

receivables that are not past due and not impaired. Therefore, the "total" will not reconcile to the receivables total recognised in the statement of financial

position.

ISLHD has placed funds on deposit with TCorp, which has been rated 'AAA' by Standard and Poor's. These deposits are similar to money market or bank

deposits and can be placed 'at call' or for a fixed term. For fixed term deposits, the interest rate payable by TCorp is negotiated initially and is fixed for the

term of the deposit, while the interest rate payable on at call deposits can vary. The deposits at balance date were earning an average interest rate of

0.2% (2016: 0.16%), while over the year the weighted average interest rate was 2.37% (2016: 2.96%) on a weighted average balance during the year of

$22.162m (2016: $21.626m). None of these assets are past due or impaired.

All trade debtors are recognised as amounts receivable at balance date. Collectability of trade debtors is reviewed on an ongoing basis. Procedures as

established in the NSW Ministry of Health Accounting Manual for Public Health Organisations and Fee Procedures Manual are followed to recover

outstanding amounts, including letters of demand. Debts which are known to be uncollectable are written off. An allowance for impairment is raised when

there is objective evidence that ISLHD will not be able to collect all amounts due. This evidence includes past experience and current and expected

changes in economic conditions and debtor credit ratings. No interest is earned on trade debtors.





(c) Liquidity Risk

For other suppliers, where settlement cannot be effected in accordance with the above, e.g. due to short term liquidity constraints, contact is made with

creditors and terms of payment are negotiated to the satisfaction of both parties.

ISLHD has exposure to liquidity risk. However, the risk is minimised by the service agreement with the NSW Ministry of Health, as the annual service

agreement requires local management to control its financial liquidity and in particular meet benchmarks for the payment of creditors. Where ISLHD fails

to meet service agreement performance standards, the Ministry as the state manager can take action in accordance with annual performance framework

requirements, including providing financial support and increased management interaction (refer Note 1).

The liabilities are recognised for amounts due to be paid in the future for goods or services received, whether or not invoiced. Amounts owing to suppliers

(which are unsecured) are settled in accordance with the policy set by the NSW Ministry of Health in accordance with NSW Treasury Circular 11/12. For

small business suppliers, where terms are not specified, payment is made not later than 30 days from date of receipt of a correctly rendered invoice. For

other suppliers, if trade terms are not specified, payment is made no later than the end of the month following the month in which an invoice or a

statement is received.

For small business suppliers, where payment is not made within the specified time period, simple interest must be paid automatically unless an existing

contract specifies otherwise.

ISLHD has negotiated no loan outside of arrangements with the NSW Ministry of Health or Treasury.


Liquidity risk is the risk that ISLHD will be unable to meet its payment obligations when they fall due. ISLHD continuously manages risk through monitoring

future cash flows and maturities planning to ensure adequate holding of high quality liquid assets. The objective is to maintain a balance between

continuity of funding and flexibility through effective management of cash, investments and liquid assets and liabilities.



Nominal

Amount 1

Fixed Interest

Rate

Variable

Interest Rate

Non - Interest

Bearing < 1 Yr 1-5 Yr > 5Yr

2017 $000 $000 $000 $000 $000 $000 $000

Payables:

15,869 ----- ----- 15,869 15,869 ----- -----

- Creditors 36,755 ----- ----- 36,755 36,755 ----- -----

52,624 ----- ----- 52,624 52,624 ----- -----

2016

Payables:

13,684 ----- ----- 13,684 13,684 ----- -----

- Creditors 35,314 ----- ----- 35,314 35,314 ----- -----

48,998 ----- ----- 48,998 48,998 ----- -----

Notes:

1 The amounts disclosed are the contractual undiscounted cash flows of each class of financial liabilities based on the earliest date on which

ISLHD can be required to pay. The tables include both interest and principal cash flows and therefore will not reconcile to the Statement of

Financial Position.





- Accrued Salaries Wages, On-

Costs and Payroll Deductions



The table below summarises the maturity profile of ISLHD's financial liabilities together with the interest rate exposure.


(d) Market Risk

Interest rate risk


Result Result

2017 $000 $000 $000 $000 $000

Financial Assets


Receivables 14,034 ----- ----- ----- -----


Payables* 52,624 ----- ----- ----- -----

2016

Financial Assets


Receivables 11,305 ----- ----- ----- -----


Payables* 48,998 ----- ----- ----- -----

The effect on net result and equity due to a reasonably possible change in risk variable is outlined in the information below, for interest rate risk and other

price risk. A reasonably possible change in risk variable has been determined after taking into account the economic environment in which ISLHD operates

and the time frame for the assessment (i.e. until the end of the next annual reporting period). The sensitivity analysis is based on risk exposures in existence

at the Statement of Financial Position date. The analysis was performed on the same basis for 2016. The analysis assumes that all other variables remain

constant.

Exposure to interest rate risk arises primarily through ISLHD's interest bearing liabilities.

Both NSW Treasury and NSW Ministry of Health loans are set at fixed rates and therefore are generally not affected by fluctuations in market rates. ISLHD

does not account for any fixed rate financial instruments at fair value through profit or loss or as available-for-sale. Therefore, for these financial instruments,

a change of interest rates would not affect net result or equity.

A reasonably possible change of +/-1% is used consistent with current trends in interest rates (based on official RBA interest rate volatility over the last five

years). The basis will be reviewed annually and amended where there is a structural change in the level of interest rate volatility.

+1%-1%

*Accrued Salaries Wages, On-Costs and Payroll Deductions have been excluded from payables as not within the scope of AASB7 Financial Instruments

Disclosures. Prior year comparatives have been restated as a result.

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. ISLHD's exposures

to market risk are primarily through interest rate risk on ISLHD's borrowings and other price risks associated with the movement in the unit price of the Hour-

Glass Investment facilities. ISLHD has no exposure to foreign currency risk and does not enter into commodity contracts.




However, ISLHD is not permitted to borrow external to the NSW Ministry of Health (except energy loans which are negotiated through NSW Treasury).

ISLHD's exposure to interest rate risk is set out below.

Carrying

Amount




(e) Fair Value Measurement




$'000 $'000 $'000 $'000



$'000 $'000 $'000 $'000


As discussed, the value of the Hour-Glass Investments is based on ISLHD's share of the value of the underlying assets of the facility, based on the market

value. All of the Hour-Glass facilities are valued using 'redemption' pricing.

(The table above only includes financial assets as no financial liabilities were measured at fair value in the Statement of Financial Position.)

There were no transfers between level 1 and 2 during the period ended 30 June 2017.


The amortised cost of financial instruments recognised in the Statement of Financial Position approximates the fair value, because of the short term nature

of many of the financial instruments.





2017

$000



Other long-term benefits -

Termination benefits -

794

There were no other transactions with key management personnel and their close family members.

There were no other transactions with key management personnel and the ultimate parent during the financial year.


No matters have arisen subsequent to reporting date that would require these financial statements to be amended.


During the financial year, Illawarra Shoalhaven Local Health District obtained key management personnel services from the immediate parent and incurred

$367,733 for these services.




Compensation for the Minister for Health is paid by the Legislature and is not reimbursed by the Ministry of Health and its controlled entities. Accordingly no

such amounts are included in the key management personnel compensation disclosures above.

Remuneration for the Secretary and Deputy Secretaries are paid by the Ministry of Health and is not reimbursed by the health entities. Accordingly no such

amounts are included in the key management personnel compensation disclosures above.

COVER PAGE 3

Nepean Blue Mountains

Local Health District



Nepean Blue Mountains Local Health District


Opinion

I have audited the accompanying financial statements of Nepean Blue Mountains Local Health District


comprehensive income, the statement of changes in equity and the statement of cash flows for the

year then ended, notes comprising a summary of significant accounting policies and other explanatory

information of the District and the consolidated entity. The consolidated entity comprises the District

and the entities it controlled at the year’s end or from time to time during the financial year.



30 June 2017, and of their financial performance and cash flows for the year then ended inaccordance with Australian Accounting Standards




Basis for Opinion


standards are described in the ‘Auditor’s Responsibilities for the Audit of the Financial Statements’

section of my report.

I am independent of the District and the consolidated entity in accordance with the requirements of

the:


• Accounting Professional and Ethical Standards Board’s APES 110 ‘Code of Ethics forProfessional Accountants’ (APES 110).


Parliament further promotes independence by ensuring the Auditor-General and the Audit Office of

New South Wales are not compromised in their roles by:

• providing that only Parliament, and not the executive government, can remove an Auditor–General



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

audit opinion.

2

Emphasis of Matter

Without modification to the audit opinion expressed above, I draw attention to the basis of presenting

adjusted budget information detailed in Note 1(af). The note states that AASB 1055 ‘Budgetary

Reporting’ is not applicable to the District. It also states that, unlike the requirement in AASB 1055

‘Budgetary Reporting’ to present original budget information, the District’s financial statements present

adjusted budget information.


The Chief Executive is responsible for the preparation and fair presentation of the financial statements

in accordance with Australian Accounting Standards and the PF&A Act, and for such internal control

as the Chef Executive determine is necessary to enable the preparation and fair presentation of

financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Chief Executive must assess the ability of the District and

the consolidated entity to continue as a going concern except where operations will be dissolved by an

Act of Parliament or otherwise cease. The assessment must, disclose, as applicable, matters related

to going concern and the appropriateness of using the going concern basis of accounting.



• obtain reasonable assurance about whether the financial statements as a whole are free frommaterial misstatement, whether due to fraud or error



accordance with Australian Auditing Standards will always detect material misstatements.

Misstatements can arise from fraud or error. Misstatements are considered material if, individually or

in aggregate, they could reasonably be expected to influence the economic decisions users take

based on the financial statements.

A description of my responsibilities for the audit of the financial statements is located at the Auditing

and Assurance Standards Board website at:

http://www.auasb.gov.au/auditors_responsibilities/ar3.pdf. The description forms part of my auditor’s

report.


• that the District or the consolidated entity carried out their activities effectively, efficiently andeconomically

• about the assumptions used in formulating the budget figures disclosed in the financialstatements

• about the security and controls over the electronic publication of the audited financialstatements on any website where they may be presented


Renee Meimaroglou


11 September 2017

SYDNEY


COVER PAGE 4

Northern Sydney Local Health District


"ffi."-," .ç,ø

'f.¡Þ"sourÉ

INDEPENDENT AUDITOR'S REPORT



OpinionI have audited the accompanying financialstatements of the Northern Sydney Local Health District(the District), which comprise the statement of financial position as at 30 June 2017, the statement ofcomprehensive income, the statement of changes in equity and the statement of cash flows, and theservice group statements for the year then ended, notes comprising a summary of significant accountingpolicies and other explanatory information of the District and the consolidated entity. The consolidatedentity comprises the District and the entities it controlled at the year's end orfrom time to time during thefinancial year.

ln my opinion, the financial statements:

give a true and fair view of the financial position of the District and the consolidated entity as at30 June 2017, and of their financial performance and cash flows for the year then ended inaccordance with Australian Accounting Standards

are in accordance with section 45E of Public Finance and Audit Act 1983 (PF&A Act) and thePublic Finance and Audit Regulation 2015.


Basis for OpinionI conducted my audit in accordance with Australian Auditing Standards. My responsibilities under thestandards are described in the 'Audito/s Responsibilities for the Audit of the Financial Statements' sectionof my report.


. Australian Auditing Standards

. Accounting Professional and Ethical Standards Board's APES 110 'Code of Ethics forProfessional Accountants' (APES 1 1 0).


Parliament further promotes independence by ensuring the Auditor-General and the Audit Office of NewSouth Wales are not compromised in their roles by:

providing that only Parliament, and not the executive government, can remove an Auditor-General

mandating the Auditor-General as auditor of public sector agenciespreclud ing the Aud itor-General from providing non-audit services.

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

Level 15, 1Mùqarotstr€et,SydneyNSW2000 I GPOBox12.SydneyNSW2001 I t029275nA| I t029275-1179 ¡ [email protected] I auditnsw.gov.au

Emphasis of Matter - Presentation of Budget lnformationWithout modification to the opinion expressed above, I draw attention to the basis of presenting adjustedbudget information detailed in Note 1 (af). The note states that AASB 1055 'Budgetary Reporting' is notapplicable to the District. lt also states that, unlike the requirement in AASB 't055'Budgetary Reporting'topresent original budget information, the District's financial statements present adjusted budgetinformation.

The Ghief Executive's Responsibility for the Financial StatementsThe Chief Executive is responsible for the preparation and fair presentation of the financial statements inaccordance with Australian Accounting Standards and the PF&A Act, and for such internal control as theChief Executive determines is necessary to enable the preparation and fair presentation of financialstatements that are free from material misstatement, whether due to fraud or error.

ln preparing the financial statements, the Chief Executive must assess the ability of the District and theconsolidated entity to continue as a going concern except where operations will be dissolved by an Act ofParliament or otherwise cease. The assessment must, disclose, as applicable, matters related to goingconcern and the appropriateness of using the going concern basis of accounting.

Auditor's Responsibility for the Audit of the Financial StatementsMy objectives are to:

. obtain reasonable assurance about whether the financial statements as a whole are free frommaterial misstatement, whether due to fraud or error, and

. issue an lndependent Auditor's Report including my opinion.

Reasonable assurance is a high level of assurance, but does not guarantee an audit conducted inaccordance with Australian Auditing Standards will always detect material misstatements. Misstatementscan arise from fraud or error. Misstatements are considered material il individually or in aggregate, theycould reasonably be expected to influence the economic decisions users take based on the financialstatements.

A description of my responsibilities for the audit of the financial statements is located at the Auditing andAssurance Standards Board website at http:i/www.auasb.gov.aulauditors resoonsibilities/ar3.pdf.The description forms part of my audito/s report.

My opinion does nof provide assurance:

. that the District or the consolidated entity carried out their activities effectively, efficiently andeconomically

. about the security and controls over the electronic publication of the audited financialstatements on any website where they may be presented

. about any other information which may have been hyperlinked to/from the financial statements

Sgoncl

Sally BondDirector, Financial Aud it Services

5 September 2017SYDNEY

1)

2)

Nofhem Sydney Local Health Oistrict

Gertifi cation of the Financial Statements


We state, pursuant to section 45F of the Public Finance and Audit Act 1983:

The financial statemenß of the Norftern Sydney Local Health District for the year ended 30 June 2017 have

been prepared in accordance with:

a) Australian Accounting Standards (which include Australian Aæounting lnterpretations);

b) the requirements of the Public Finance and Audit Act 1983, the Public Finance and Audit Regulation

2015 (the Act); and

c) financial Reporting Directions issued by the Treasurer under the Act.

The financial statements exhibit a true and fair view of the financial position and the financial performanæ of theNorthem Sydney Local Health Distric{ and

We are not aware of any circumstances which would render any particulans in the financial statements to be

misleading or inaccunate.

@nLoy

A/Chief Executive

4 September2017

3)

Chris Thomson

A/Direc'tor Finance and Corporate Services

4 September2017

Actual

2017

$000

PARENT

AdjustedBudget

Unaudited

2017

¡000

Actual

2016

¡000


Statement of Comprehensive lncome for the year ended 30 June 2017

Notes Actual

2017

¡000


Operating Expenses

Employee Related

Personnel Services

Visiting Medical Officers

Other Operating Expenses

Depreciation and Amortisation

Grants and Subsidies

Finance Cosß

Payments to Affiliated Health 0rganisations

Total Expenses excluding losses

Revenue

NSW Ministry of Health Recurrent Allocations

NSW Ministry of Health CapitalAllocations

Acceptance by the Crown Entity of Employee Benefits


lnvestment Revenue

Grants and Conhibutions

Other Revenue

Total Revenue

Gain / (Loss) on Disposal

Oher Gains / (Losses)

Net Result

993,949 984,148 956,398

CONSOLIDATION

AdjustedBudget

Unaudited

2017

$000

53,094

377,321

65,029

6,446

71,604

33,041

Actual

2016

52,813

392,616

63,8s8

8,ô92

71,100

32,460

$000

1,57',1,494 1,567,991 1,527,630

971,362

54,048

368,599

64,627

7,690

71,652

33,516

961,4s6

53,094

377,321

ô5,029

ô,44ô

71,604

33,041

906,091

52,813

392,6r6

63,858

8,692

71,1 00

32,460

4

1(m),5

þ

1(s),7

I

1(h)

1(h)

1 (e)(ii),1 2

1(h), e

1(h),r0

r(h),1 1

13

20

54,048

368,599

64,627

7,690

71,652

33,516

2

3

14

15

32

r,594,08r 1,s90,683 1,577,937

1,201,8s0

57,412

243,709

2,816

39,664

14,854

1,201,904

57,331

239,2ô9

2,889

36,640

14,800

1,155,978

61,374

230,566

3,096

42,950

21,677

1,201,850

s7,412

22,587

243,709

2,816

39,664

14,8il

1,201,904

57,331

22,652

239,269

2,889

36,640

14,800

't,155,978

61,374

50,307

230,566

3,096

42,950

21,677

1,s60,305

(1s3)

14,082l,

1,552,833

(51

(2,0821

1,515,64'l

(2841

11,7421

1,582,892

(4,082)

1,575,525

(5)

(2,082)

1,565,948

12841

(1,7421

(1e3)

(15,464) (17,2451 (14,015) (15,464) 117,2451 (14,015)

269,861

Other Comprehensive lncome


Net lncrease(Decrease) in Property, Plant &

Equipment Revaluation Surplus

Total Oher Comprehensive lncome

269,861

269,861

2il,397

269,861

zil,397 117,2451 (14,015)(17,2451 (14,015) ToTAL COMPREHENSTVE |NCoME

ïhe accompanying notes fom part ofhese financial statemenb.

196,833 195,249 197,843

Northem Sydney Local Health D¡strict

Statement of Financial Position as at 30 June 201 7

ASSETS

Current Assets

Cash and Cash Equivalents

Receivables

lnventories

Total Current Assets 196,833 195,249 197,843

$000$000$000

Aciual

2017

124,179

61,959

10,695

PARENT

Adjusted

Budget

Unaudited

2017

$000

Notes Ac{ual

2017

CONSOLIDATION

Adjusted

Budget

Unaudited

2017

$000

121,972

63,731

9,546

Actual

20'16

$000

Actual

2016

124,866

63,431

9,546

121p72

ô3,731

9,546

124,866

63,431

9,546

17

18

19

124,179

61,959

10,695

1,253

2,011,134

72,519

17,963

34

1,332

1,757,725

56,591

19,457

199

1,332

1,903,922

75,931

15,457

199

2,112,612 1,846,251 2,011,008

2,309,445 2,041,500 2,208,851

Non.Current Assets

Receivables

Property, Plant and Equipment

- Land and Buildings

- Plant and Equipment

- lnfrasfuc{ure Systems

- Leasehold lmprovements


lntangible Assets

Other

Total Non-Curent Assets

Total Assets

LIABILITIES

Current Liabilities

Payables

Bonowings

Provisions

Other

Total Current Liabilities

Non-Cunent Liabilities

Bonowings

Provisions

Other

Total Non.Cunent Liabilities

ïotal Liabilities

Net Assets

EQUITY

Reserves

Accumulated Funds

Total Equity

The accompanying notes fom part of these financial statements.

2,309,445 2,04t,500 2,208,85'l

18

20

20

20

20

21

22

1,253 1,332 1.332

2,011,134

72,519

17,963

34

1,757 ,725

56,591

19,4s7

199

1,903,922

75,931

19,457

199

2,101,ô50

I,599

8,1 10

1,833,972

3,324

7,623

1,999,509

2,544

7,623

2,101,650

1,599

8,1 10

1,833,972

3,324

7,623

1,999,509

2,544

7,623

2,1',t2,612 r,846,251 2,011,008

97,952

405

137,960

5,439

99,549

291

136,s76

6,950

97,652

291

134,304

6,818

97,952

405

137,960

5,439

99,549

291

1 36,576

6,9s0

97,652

291

134,304

6,818

25

26

27

28

26

27

28

241,756 243,366 239,0ô5 241,7s6 243,366 239,065

723,522

1,622

24,226

723,871

1,622

25,374

723,872

1,618

25,374

723,522

1,622

24,226

723,871

1,622

25,374

723,872

1,618

25,374

749,370 750,867 750,864

991,126 994,233 989,929

1,318,3t9 1,047,267 ',t,218,922

749,370 750,867 750,864

991,t26 994,233 989,9æ

1,318,319 '.t,047,267 1,218,9n

276,880

1,041,439

151,002

896,265

150,415

1,068,507

276,880

1,041,439

151,002

896,265

150,415

1,068,507

1,318,319 1,047,267 1,218,922 1,318,319 1,047,267 1,218,9r¿




Balance at I July 2016

Total Equity at I July 20f 6

Net Result for the year

Other Gomprehensive lncome:

Net lncrease(Decrease) in Property, Plant & Equipment

Transfers on Disposal

Total Other Comprehensive lncome

Total Comprehensive lncome for the year

Transactions With Owners ln Their Capacity As Owners

lncrease(Decrease) in Net Assets From Equity Transfers

Balanceat 30June2017

Balance at'l July 2015

Total Equity at I July 2015

Net Result for the year

Total Gomprehensive lncome for the year

Balance at 30 June 2016

$000

1,068,507 150,415

1,068,507 150,415

(15,464)

20 269,861

(143,396)143,396

143,396 126,465

127,932 126,465

37 (155,000)

1,041,¡ß9 276,880

1,082,522 150,415

1,082,522 f50,415

(14,015)

(14,015)

f,068,507 150,415


Notes Accumulated

Funds

Revaluation

Surplus

Total

$000$000

1,218,922

1,218,922

(15,464)

269,861

269,861

254,397

(155,000)

1,318,319

1,232,937

1,232,937

(14,015)

(14,015)

1,219,922

Northem Sydney Local Health Distric{

Statement of Cash Flows forthe year ended 30 Junê 2017

2016

E000

2017

s000

2016

$ooo

2017

$000

Actual

(46,507)

(71,652)

(r,454,825)

PAREl{T

AdjustedBudget

Unaud¡ted

2017

$000

Actual

(46,413)

(71,101)

(1,422,670],

Notes Actual

col{soLtDATtoN

Adjusted

Budget

Unaudited

2017

t000

Actual

(917,757\

(46,413)

(71,101)

(504,913)

(44,787)

(71,604)

(1,451,981)


Payments

Employee Related

Grants and Subsid¡es

Finance Costs

Other

(980,532)

(46,507)

(71,652)

(474,293\

(973,064)

(44,787\

(71,604)

(478,517],

(1,572,984t (1,568,372) (1,540,184) TotalPayments (1,572,9841 (1,s68,372) (1,s40,184)

1,201,850

57,412

14,415

244,242

2,657

M,947

58,074

1,201,904

57,331

14,415

246,470

2,729

41,923

54,820

1,1 55,978

61,374

15,746

236,786

2,920

49,670

57,106

1,201,850

57,412

14,415

2M,242

2,657

44,947

58,074

1,201,904

57,331

14,415

246,470

2,729

41,923

54,820

1,155,978

61,374

15,746

23ô,786

2,920

49,ô70

57,106

Rece¡pts

NSW l/l¡nistry of Health Recunent Allocations

NSW M¡nistry of Health Capital Allocations

Reimbursements from the Crown Ent¡ty


lnterest Received


other

Proceeds from Sale of Property, Plant & Equipment and lntangibles

Proceeds ftom Sale of lnvestments

Purchases of Property, Plant & Equipment and lntangibles

Purchases of lnvestments

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds f¡om Bonowings and Advances

Repayment of Borrowings and Advances

1,ô23,597 1,619,592 '1,579,580 Total Receipts

50,613 5'1,220 39,396 NET CASH FLOWS FROM OPERATING ACTMTIES


1,623,597 1,619,592 1,579,580

32 50,6't3 51,220 39,396

8989194

(236),r;;

17

17

89

64,828

(49,930)

(64,828)

194

(51,258) (54,203)

89

64,828

(49,930)

(64,828)

(51,258) (54,203)

(s1,064) (54,114) (49,84r) NET CASH FLOI,VS FROM INVESTING ACTIVITIES (s1,064) (il,1141 (49,841)

2,500

(115)

2,500

(1 15)

124,175 121,972 124,866

2,385 NET CASH FLOWS FROM FINANCING ACTIVITIES

NET INCREASE / (DECREASE) I¡¡ CASH AND CASH EQUIVALENTS

Opening Cash and Cash Equivalents

CLOSING CASH AND CASH EQUIVALENTS


124,',t79 121,972 124,86ô

(236) (236t 2,385

(687)

124,8ô6

(2,894)

124,866

(8,0ô0)

132,926 124,866

(2,894)

124,866

(8,060)

132,926

(687)



forthe yearended 30 June 2017

l. Summary of Significant Accounting Policies

a) The Reporting Entity

The Northern Sydney Local Health District (the NSLHD) was established under the provisions of the Health Services Act 1997 with effect from 1

January 2011.

The NSLHD, as a reporting entity, comprises all the entities under its control, namely:

* The parent entity, comprises all the operating activities of the Hospital Facilities and the Community Health Centres under its control. lt also

encompasses the Restricted Assets (as disclosed in notes 16 and24), which, while containing assets which are restricted for specified uses by

the grantor or the donor, are nevertheless controlled by the parent ent¡ty.

. The Northern Sydney Local Health District Special Purpose Service Entity which was established as a Division of the NSLHD on 1 January 2011

in accordance with the Health Services Act 1997. This Division provides personnel services to enable the NSLHD to exercise its functions.

As a consequence the values in the financial statements presented herein consist of the parent entity and the consolidated entity which comprises theparent and special purpose service entity. ln the process of preparing the consolidated financial statements consisting of the controlling and controlled

entities, all inter-entity transactions and balances have been eliminated, and like transactions and other events are accounted for using uniform

accounting policies.

NSLHD is a NSW Government entity and is controlled by the NSW Ministry of Health, which is the immediate parent. The reporting entity is also


reporting entity is a notfor-profit entity (as profit is not its principal objective).

These consolidated financial statements for the year ended 30 June 2017 have been authorised for issue by the l/Chief Executive on 4 September2017.

b) Basis of Preparation

The NSLHD's financial statemenls are general purpose financial statements which have been prepared on an accrual basis and in accordance with

applicable Australian Accounting Standards (which include Australian Accounting lnterpretations), the requirements of the Health Services Act ',l997

and its regulations (including observation of the Accounts and Audit Determination for Public Health Organisations), the Public Finance and Audit Act

1983 and Public Finance and Audit Regulation 2015 (the Act), and the financial Reporting Directions issued by the Treasurer under the Act. The

financial statements comply with the NSW Treasury mandates circular for NSW General Government Sector Entities. Further information on the

adjusted budget figures can be found at Note 1 (af).

The financial statements of the NSLHD have been prepared on a going concern basis.

The Secretary of Health, the Chair of the Northern Sydney Local Health District Board and the Chief Executive, through the Service Agreement have

agreed to service and funding levels for the fon¡vard financial year. The Service Agreement sets out the level of financial resources for public health

services under the NSLHD's control and the source of these funds. By agreement, the Service Agreement requires local management to control its

financial liquidity and in particular meet benchmarks for the payment of creditors. Where the NSLHD fails to meet Service Agreement performance

standards, the Ministry of Health as the state manager can take action in accordance with annual performance framework requirements, including

financial support and increased management interaction by the Ministry.


. Allocated funds, combined with other revenues earned, are applied to pay debts as and when they become due and payable.

- The NSLHD has the capacity to review timing of subsidy cashflows to ensure that debts can be paid when they become due and payable.

- The NSLHD has developed an Efficiency and lmprovement Plan (ElP) which identifies revenue improvement and cost saving strategies.

Benefits from the EIP are retained by the NSLHD and assist in meeting its overall budget target. The EIP is monitored and evaluated by the

Ministry throughout the financial year.

Property, plant and equipment, assets (or disposal groups) held for sale and financial assets at 'fair value through profit and loss' and available for saleare measured at fair value. Other financial statement items are prepared in accordance with the historical cost convention except where specified

othenryise.



c) Comparativelnformation






1. SummaryofSignificantAccountingPolicies

d) Statement of Compliance

Ïhe financial statements and notes comply with Australian Accounting Standards which include Australian Accounting lnterpretations.

e) Employee Benefits and Other Provisions

i) Salaries & Wages, Annual Leave, Sick Leave and On.Costs

Salaries and wages (including non-monetary benefits) and paid sick leave that are expected to be settled wholly within 12 months after the endof the period in which the employees render the service are recognised and measured at lhe undiæounted amounts of the benefits.

Annual leave is not expected to be settled wholly before twelve months after the end of the annual reporting period in which the employeesrender the related service. As such, it is required to be measured at present value in accordance with AASB 119 Employee Benefits (although


Actuarial advice obtained by NSW Treasury , a controlled entity of the ultimate parent, has confìrmed that using the nominal annual leave

balance plus the annual leave entitlements accrued while taking annual leave can be used to approximate the present value of the annual leaveliability.On-costsof 17.2o/oareappliedtothevalueof leavepayableat 30June2017(comparableon+ostsfor30June2016were16.7%).TheNSLHD has assessed the actuarial advice based on the NSLHD's circumstances and has determined that the effect of discounting is immaterial

to annual leave.


than the benefits aærued in the future.

ii) Long Service Leave and Superannuation

The NSLHD's liability for Long Service Leave and defined benefit superannuation (State Authorities Superannuation Scheme and StateSuperannuation Scheme) are assumed by the Crown Entity , which is a controlled entity of the ultimate parent.

The NSLHD accounts for the liability as having been extinguished resulting in the amount assumed being shown as part of the non-monetaryrevenue item described as 'Acceptance by the Crown Entity of employee benefits'.

Specific on-costs relating to Long Service Leave assumed by the Crown Entity are borne by the NSLHD as shown in Note 27.

Long Service Leave is measured at present value in accordance with AASB 1 19, Employee Benefits. This is based on the application of certainfactors (specified in NSW Treasury Circular 15/09) to employees with five or more years of service, using cunent rates of pay. These factorswere determined based on an actuarial review to approximate present value.

The superannuation expense for the reporting period is determined by using the formulae specified in the Treasurer's Directions. The expensefor certain superannuation schemes (i.e. Basic Benefit and First State Super) is calculated as a percentage of the employee's salary. For othersuperannuation schemes (i.e. State Superannuation Scheme and State Authorities Superannuation Scheme), the expense is calculated as amultiple of the employee's superannuation contributions.

iii) Consequential On.Gosts

Consequential costs to employment are recognised as liabilities and expenses where the employee benefits to which they relate have beenrecognised. This includes outstanding amounts of workers' compensation insurance premiums and fringe benefits tax.

iv) Other Provisions

Other provisions exist when the NSLHD has a present legal or constructive obligation as a result of a past event; it is probable that an outflow ofresources will be required to settle the obligation; and a reliable estimate can be made of the amount of the obligation.

lnsurance

The NSLHD's insurance activities are conducted through the NSW Treasury Managed Fund (TMF) Scheme of self insurance for government entities.ïhe expense (premium) is determined by the Fund Manager based on past claims experience.The TMF is managed by lnsurance and Care NSW(iCare), a controlled entity of the ultimate parent.

S) Finance Gosts

Finance costs are recognised as expenses in the period in which they are incurred in accordance with NSW Treasury's Mandate to notfor-profit NSWgeneral government sector entities.

f)





h) lncome Recognition

lncome is measured at the fair value of the consideration or contribution received or receivable. Additional comments regarding the accounting policies


Sa/e ofGoods

Revenue from the sale of goods is recognised as revenue when the NSLHD transfers the signifìcant risks and rewards of ownership of the assets.

Rendering of Seruices


Patient Fees



H ighly S peci a lised D rugs



for the provision of medicines for the treatment of chronic conditions where specific criteria are met in respect of day admitted patients, non admittedpatients or patients on discharge. Revenue is recognised when the drugs have been provided to the patient.

State Insurance Regulatory Authoríty (SIRA)


hospitalised or attending for inpatient treatment as a result of motor vehicle accidents. The NSLHD recognises the revenue on an accruals basis fromthe time the patient is treated or admitted into hospital.

Departnent of Veterans' Affairs


services to entitled veterans. For inpatient services, revenue is recognised by the NSLHD on an accrual basis by reference to patient admissions. Non


Investment Revenue

lnterest revenue is recognised using the effective interest method as set out in AASB 139, Financial lnstruments: Recognition and Measurement.

Debt Forgiveness



Specialist doctors with rights of private practice are subject to an infrastructure charge forthe use of hospital facilities at rates determined by the NSW


* a monthly charge raised by the NSLHD based on a percentage of receipts generated.* the residual of the Private Practice Trust Fund at the end of each financial year, such sum being credited for the NSLHD use in the

advancement of the NSLHD or individuals within it.



The NSLHD uses a number of facilities owned and maintained by the local authorities in the area to deliver community health services for which no

charges are raised by the authorities.


G ra nts and Co ntrib utions

Grants and contributions are recognised as revenues when the NSLHD obtains control over the assets comprising the contributions. Control overcontributions is normally obtained upon the receipt of cash.




l. SummaryofSignificantAccountingPolícies


Payments are made by the immediate parent on the basis of the allocation for the NSLHD as adjusted for approved supplementations mostly for salaryagreements and approved enhancement projects.

This allocation is included in the Statement of Comprehensive lncome before arriving at the "Net Result" on the basis that the allocation is earned in


General operating expenses/revenues of Greenwich & Neringah Hospitals (HammondCare) and Royal Rehabilitation Centre, Sydney have only beenincluded in the Statement of Comprehensive lncome prepared to the extent of the cash payments made to the Health Organisations concerned. TheNSLHD is not deemed to own or control the various assets/liabilities of the aforementioned Health Organisations and such amounts have been

excluded from the Statement of Financial Position. Any exceptions are specifically listed in the notes that follow.

i) Accounting for the Goods & Services Tax (GST)

lncome, expenses and assets are recognised net of the amount of GST, except that the:

* amount of GST incurred by the NSLHD as a purchaser that is not recoverable from the Australian Taxation Office is recognised as part of an

asset's cost of acquisition or as part of an item of expense; and

* receivables and payables are stated with the amount of GST included.



j) lnterstate Patíent Flows

lnterstate patient flows are funded through the State Pool, based on activity and consistent with the price determined in the service level agreement.ïhe funding is recognised as recurrent allocation received from the immediate parent.

k) Acquisition of Assets

Assets acquired are initially recognised at cost. Cost is the amount of cash or cash equivalents paid or the fair value of the other consideration given toacquire the asset at the time of its acquisition or construction or, where applicable, the amount attributed to that asset when initially recognised in


Most assets are acquired from Health Adm¡nistration Corporation, a controlled entity of the immediate parent.



Where payment for an asset is defened beyond normal credit terms, its cost is the cash price equivalent, i.e. the defened payment amount iseffectively discounted over the period of credit.

Land and buiHings are owned by the Health Administration Corporation, an entity controlled by the immediate parent. Land and buildings which areoperated/occupied by the NSLHD are deemed to be controlled by the NSLHD and are reflected as such in the financial statements.

l) Capitalisation Thresholds

lndividual items of Property, Plant & Equipment and lntangibles are capitalised where their cost is $10,000 or above.



forthe year ended 30 June 2017




over its useful life to the NSLHD. Land is not a depreciable asset. All material identifiable components of assets are depreciated over their useful lives.


Buildings 2.5o/o

lnfrastructure Systems 2.5%

Plant and Equipment

- Computer Equipment 20.00/o

- Electro Medical Equipment* Costing less than $200,000 10.0%.

Costing more than or equal to $200,000 12.5Yo

- Furniture, Fittings and Furnishings 5.00/o

- Linen 25.0o/o

- Motor Vehicle Sedans 12.5Yo

- Motor Vehicles, Trucks & Vans 20.0Yo

- Office Equipment 10.0%

- Plant and Machinery 10.0%

"lnfrastructure Systems" means assets that comprise public facilities and which provide essential services and enhance the productive capacity of the



n) RevaluationofNon.CurentAssets

Physical non-current assets are valued in accordance with the 'Valuation of Physical Non-Cunent Assets at Fair Value' Policy and Guidelines Paper

(TPP 14-01). This policy adopts fair value in accordance with AASB 13 Fair Value Measurement, AASB 116 Property, Plant and Equipment and

AASB 140 lnvestment Property.

lnvestment property is separately discussed at Note 1(q).



being measured, including any socio-political restrictions imposed by government. ln most cases, after taking into account these considerations, the

highest and best use is the existing use. ln limited circumstances, the highest and best use may be a feasible alternative use, where there are no


Fair value of property, plant and equipment is based on a market participants' perspective, using valuation techniques (market approach, cost





Non-specialised assets with short useful lives are measured at depreciated historical cost, as an approximation of fair value. Ihe entity has assessed





or decrements,

p)







result.



As a notfor-profit entity, revaluation increments and decrements are offset against one another within a class of non-curent assets, but not otherwise.


o) lmpairment of Property, Plant and Equipment

As a notfor-profit entity with no cash generating units, lmpairment under AASB 136 lmpairment of Assets is unlikely to arise. As property, plant and


costs of disposal are material. Specifically, impairment is unlikely for notfor-profit entities given that AASB ',l36 modifies the recoverable amount test



Restoration Costs


liability.

q) lnvestmentProperties

lnvestment property is held to earn rentals orfor capital appreciation, or both. However, for not-for-profit entities, property held to meet service delivery

objectives rather than to earn rental or for capital appreciation does not meet the definition of investment property and is accounted for under AASB

116, Property, Plant and Equipment.

The NSLHD does not have any property that meets the definition of lnvestment Property.

r) lntangible Assets

The NSLHD recognises intangible assets only if it is probable that future economic benefits will flow to the NSLHD and the cost of the asset can be

measured reliably. lntangible assets are measured initially at cost.




lntangible assets are subsequently measured at fair value only if there is an active market. As there is no active market for the NSLHD's intangible

assets, the assets are carried at cost less any accumulated amortisation and impairment losses.

Computer software developed or acquired by the NSLHD are recognised as intangible assets and are amortised over four years using the straight line

method based on the useful life of the asset for both internally developed assets and direct acquisitions. Most computer software is acquired from theHealth Administration Corporation, a controlled entity of the parent.

lntangible assets are tested for impairment where an indicator of impairment exists. lf the recoverable amount is less than its carrying amount the


t)




L Summary of Significant Accounting Policies

s) Maintenance

Day{o-day servicing costs or maintenance are charged as expenses as incurred except where they relate to the replacement of a part or componentof an asset, in which case the costs are capitalised and depreciated.

Leased Assets


Where a non-cunent asset is acquired by means of a finance lease, at the commencement of the lease term, the asset is recognised at its fair value

or, if lower, the present value of the minimum lease payments, at the inception of the lease. The corresponding liability is established at the same

amount. Lease payments are allocated between the principal component and the interest expense.

Operating lease payments are recogn¡sed as an expense on a straight-line basis over the lease term.

u) lnventories

lnventories held for distribution are measured at cost, adjusted when applicable for any loss of service potentlal. lnventories (other than those held fordistribution) are stated at the lower of cost and net realisable value.


v) Loans and Receivables


assets are recognised in¡tially at fair value. Subsequent measurement is at amortised cost using the effective interest method, less an allowance forany impairment of receivables. Any changes are recognised in the Net Result when impaired, derecognised or through the amortisation process.


w) lnvestments

lnvestments are initially recognised at fair value plus, in the case of investments not at fair value through profit or loss, transaction costs. The NSLHD

determines the classification of its financial assets after initial recognition and, when allowed and appropriate, re-evaluates this at each financial year

end.

* The NSLHD subsequently measures investments classifìed as'held fortrading'or designated upon initial recognition ''at fair value through profit

or loss" at fair value.

Financial assets are classified as 'held for trading' if they are acquired for the purpose of selling in the near term. Derivatives are also classified

as held for trading. Gains or losses on these assets are recognised in the net result for the year.

T-Corp Hour-Glass lnvestment facilities are managed by New South Wales Treasury Corporation, a controlled entity of the ultimate parent. The

facilities are designated at fair value through profit or loss as the management and performance of these financial assets is undertaken on a fair

value basis, in accordance with a documented risk management strategy. lnformation about these assets is provided internally to the NSLHD'S

key management personnel.

The risk management strategy of the NSLHD has been developed consistent with the investment powers granted under the provision of thePublic Authorities (Financial Anangements) Act.

T Corp Hour-Glass investments are made in an effort to improve interest returns on cash balances otherwise available whilst also providing

secure investments.

The movement in the fair value of the T Corp Hour-Glass lnvestment facilities incorporates distributions received as well as unrealised

movements in fairvalue and is reported in the líne item'investment revenue'.

* Held-to-maturity investments - Non-derivative financial assets with fixed or determinable payments and fixed maturity that the NSLHD has thepositive intention and ability to hold to maturity are classified as 'held{o-maturity'.

ïhese investments are measured at amortised cost using the effective interest method. Changes are reægnised in the net result for the year


* Available-for-sale investments - Any investments that do not fall into any other category are accounted for as available-for-sale investments and

measured at fair value. Gains or losses on available-for-sale investments are recognised in other comprehensive income until disposed orimpaired, at which time the cumulative gain or loss previously recognised in other comprehensive income is recognised in the net result for theyear. However, interest calculated using the effective interest method and dividends are recognised in the net result for the year.





Purchases or sales of investments under contract that require delivery of the asset within the timeframe established by convention or regulation arerecognised on the trade date; i.e. the date the NSLHD commits to purchase or sell the asset.


x) lmpairment of Financial Assets

All financial assets, except those measured at fair value through profit and loss, are subject to an annual review for impa¡rment. An allowance forimpairment is established when there is objective evidence that the entity will not be able to collect all amounts due.

For financial assets carried at amortised cost, the amount of the allowance is the difference between the asset's carrying amount and the present value

of estimated future cash flows, discounted at the effective interest rate. The amount of the impairment loss is recognised in the net result for the year.

When an available for sale financial asset is impaired, the amount of the cumulative loss is removed from equity and recognised in the net result for theyear, based on the difference between the acquisition cost (net of any principal repayment and amortisation) and current fair value, less any

impairment loss previously recognised in the net result for the year.


losses on an investment in an equity instrument classified as "available for sale", must be made through the reserve. Reversals of impairment losses offinancial assets carried at amortised cost cannot result in a carrying amount that exceeds what the carrying amount would have been had there not


y) De.recognition of Financial Assets and Financial Liabilities

A financial asset is derecognised when the contractual rights to the cash flows from the financial assets expire; or if the NSLHD transfers the financialasset:

* where substantially all the risks and rewards have been transferred; or* where the NSLHD has not transferred substantially all the risks and rewards, if the NSLHD has not retained control.

Where the NSLHD has neither transferred nor retained substantially all the risks and rewards or transfered control, the asset is recognised to the

extent of the NSLHD's continuing involvement in the asset.


zl Payables

These amounts represent liabilities for goods and services provided to the NSLHD and other amounts. Payables are recognised initially at fair value.

Subsequent measurement is at amortised cost using the effective interest method. Short{erm payables with no stated interest rate are measured at

the original invoice amount where the effect of discounting is immaterial.

Payables are recognised for amounts to be paid in the future for goods and services received, whether or not billed to the NSLHD.

aa) Bonowings

Loans are not held for trading or designated at fair value through profit or loss and are recognised at amortised cost using the effective interest rate

method. Gains or losses are recognised in the net result for the year on derecognition.


ab) Fair Value Hierarchy

A number of the NSLHD's accounting policies and disclosures require the measurement of fair values, for both financial and non{inancial assets and

liabilities. When measuring fair value, the valuation technique used maximises the use of relevant observable inputs and minimises the use ofunobservable inputs. Under AASB 13 Fair Value Measurement, the NSLHD categorises, for disclosure purposes, the valuation techniques based on

the inputs used in the valuation techniques as follows:

* Level 1 - quoted prices in active markets for identical assets / liabilities that the entity can access at the measurement date.* Level 2 - inputs otherthan quoted prices included within Level 1 that are observable, either directly or indirectly.* Level 3 - inputs that are not based on observable market data (unobservable inputs).

The NSLHD recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occuned.

Refer to Note 23 and Note 38 for further disclosures regarding fair value measurements of financial and non{inancial assets.



for the yearended 30 June 2017


ac) Equity Transfers

The transfer of net assets between entities as a result of an administrative reskucture, transfers of programs/functions and parts thereof between


Contributions and Australian Accounting lnterpretation '1038, Contributions by Owners Made to Wholly-Owned Public Sector Entities.



transferor because there is no active market, the NSLHD recognises the asset at the transferois carrying amount. Where the transferor is prohibited

from recognising internally generated intangibles, the NSLHD does not recognise that asset.

ad) Equity and Reserves

(i) Accumulated Funds

The category "accumulated funds" includes all cunent and prior period retained funds.

(ii) Revaluation Surplus

The revaluation surplus is used to record increments and decrements on the revaluation of non-current assets. This accords with the NSLHD'spolicy on the revaluation of property, plant and equipment as discussed in Note 1(n).

(iii) Separate Reserves

Separate reserve accounls are recognised in the financial statements only if such accounts are required by specific legislation or Australian

Accounting Standards,

ae) Trust Funds

The NSLHD receives monies in a trustee capacity for various trusts as set out in Note 30.

As the NSLHD performs only a custodial role in respect of these monies, and because the monies cannot be used for the achievement of the NSLHD's

own objectives, these funds are not recognised in the financial statemenls.

af) Adjusted Budgeted Amounts

NSW Health's budget is shown at a consolidated level when presented in parliament each year (i.e. in the NSW Government Budget Papers). The

NSLHD's budget is not presented in parliament, therefore AASB 1055 Budgetary Reporting is not applicable. Unlike the requirement in AASB 1055'Budgetary Reporting' to present original budget information, the NSLHD's financial statements present adjusted budget information.The adjusted

budgeted amounts are drawn from the initial Service Agreements between the NSLHD and the NSW Ministry of Health at the beginning of the financialyear, as well as any adjustments for the effects of additional supplementation provided in accordance with delegations to derive a final budget at year

end (i.e. adjusted budget). The budget amounts are not subject to audit and, accordingly, the relevant column entries in the financial statements are

denoted as "Unaudited".

Major variances between the original budgeted amounts and the actual amounts disclosed in the primary financial statements are explained in Note 36.

ag) Emerging Asset

The NSLHD's emerging interest in the Royal North Shore Hospital Car Park has been valued in accordance with the Ministry of Health's policy forAccounting for Privately Financed ProJects. This policy required the NSLHD to initially determine the estimated written down replacement cost by

reference to the project's historical cost escalated by a construction index and the asset's estimated working life. The estimated written down

replacement cost was then allocated on a systematic basis over the concession period of 28 (22 years remaining) years using the annuity method and

the Government Bond rate of 6% at commencement of the concession period.

Northem Sydney Local Health District



1. SummaryofSignificantAccountingPolicies

ah) Changes in Accounting Policy, including new or revised Australian Accounting Standards

(i) Effective for the first time in 2016.17

The accounting policies applied in 2016-17 are consistent with those of the previous financial year except as a result of new or revised

Australian Accounting Standards that have been applied for the first time as follows:

AASB 2015-6 Amendments to Australian Accounting Standards - Extending Related Party Dr'sc/osures to Not-for-Profit Publlc Secfor Entilres

extends the scope of MSB 124 Related Party Dlsc/osures to include application by nolfor-profit public sector entities. The application of this

standard has resulted in increased disclosures in the financial statements relating to related party transactions and Key Management Personnel

compensation.

AASB2015-TAmendnentstoAustralianAccountingStandards-FairValue Dlsc/osures of Not-for-ProfitPublicsectorEntities is applicableto

reporting periods beginning on or after 1 July 2016. The Entity early adopted this standard in the financial year ended 30 June 2016, which

allows for exemption from making certain Level 3 'Fair Value Measuremenf disclosures held primarily for current service potential rather than

the generation of future net cash inflows.

(ii) lssued but not yet effective

NSW public sector entities are not permitted to early adopt new Australian Accounting Standards, unless NSW Treasury determines othenrise.

The following new Australian Accounting Standards, excluding standards not considered applicable or material to NSW Health, have not been

applied and are not yet efiective. The possible impact of these Standards in the period of initial application includes:

AASB 2016-2 Amendmentsto Australian Accounting Standards - Disclosure lnitiative: Amendnentsto AASB 107 applies to annual periods

beginning on or after 1 January 2017.The standard amends AASB 107 Statement of Cash Flows to require additional disclosures regarding


AASB 9 Financial lnstrunenfs and AASB 2014-7 Am endments to Australian Accounting Standards arising from AASB g are applicable forreporting period on or after 1 January 2018. AASB 9 will replace MSB 139 Financial lnstruments: Recognition and Measurement and

establishes new principles for the financial reporting of financial assets, financial liabilities and hedge accounting. MSB g also introduces a

forwardlooking'expected credit losses' impairment model, which may significantly impact the timing and amount of impairment recognition.

AASB16Leases appliestoannual periodsbeginningonorafterlJanuary2019.Thestandardintroducesanewapproachtoleaseaccounting

that requires a lessee to recognise assets and liabilities for the rights and obligations created by leases. The application of this standard will

likely have a significant transitional impact as all leases, except short term (<12 months) and low value leases, brought on balance sheet.

AASB 15 Revenuefrom Contractswith Customers (and associated amending standardsAASB 2014-5, AASB 2015-8, AASB 2016-3, AASB

2016-T and AASB 2016-8) applies to annual periods beginning on or after 1 January 2019 for notfor-profit entities. MSB 15 establishes a


This new standard requires revenue to be recognised when control of the goods or services are transfened to the customer at the transactionprice. This may impact the timing of recognising certain revenue currently recognised by reference to the stage of completion of the transaction

AASB 1058 lncome of Not-forProfit Entities applies to nolfor-profit entities and is effective for annual periods beginning on or after 1 January

2019. This standard requires entities to recognise income where the consideration to acquire an asset, including cash, is significantly less than

the fair value principally to enable the entity to further its objectives. Under this standard, the timing of income recognition may be impacted

depending on whether there is a liability or other performanæ obligation associated with the acquired asset, including cash.


measured reliably and the services would have been purchased if they had not been donated. This is consistent with cunent practice under


PARENT




2. Employee Related

Salaries and Wages (including annual leave)

Superannuation - Defined Benefit Plans

Superannuation - Defined Contribution Plans

Long Service Leave

Redundancies

Workerc' Compensation lnsurance

Fringe Benefits Tax

3. Perconnel Services

Salaries and Wages

Superannuation - Defined Benefit Plans

Superannuation - Defined Contribution Plans

Long Service Leave

Redundancies

Worken' Compensation lnsurance

Fringe Benefits Tax

Personnel services of Northern Sydney Local Health District was

provided by its controlled entity, Northern Sydney Local Health

District Special Purpose Service Entity.

CONSOLIDATION

2017

$000

2017 2016

$000$000

2016

$000

882,716

7,809

76,731

14,825

1,427

10,290

151

8'18,089

8,225

73,313

M,617

1,302

10,504

348

956,398993,9¿f9

882,716

(5)

76,731

52

1,427

10,290

151

818,089

73,313

2,535

1,302

10,504

348

971,362 9{¡6,091

PAREiIT




4. Ohet Openting Expenses

Advertising

Audito/s Remuneration - Audit of Financial Statements

Blood and Blood Producb

Consultancies

Contractors

Domestic Supplies and Services

Drug Supplies

Food Supplies

Fuel, Lþht and Power

Hospital Ambulance Transport Cæts

lnformation Management Expenses

lnsurance

Maintenance (See 4(b) below)

Medical and Surgical Supplies

Motor Vehicle Expenses

Postal and Telephone Cosß

Printing and Stationery

Rates and Charges

Rental


immediate parent

Special Service Departmenb (Pathology, lmaging, Radiology,

Dental, Dialysis, Allied Health)

Staff Related Cosß

Travel Related Costs

Other (See 4(a) below)

coilsoltDAT|oN

2017

$000

2017

$000

2016

1,258

42,477

6,752

4,977

81,613

$000

2016

$000

136

219

9,662

573

42

21,925

57,626

20,789

9,622

5,697

19,813

982

32,439

78,002

1,597

2,251

1,385

1,728

1,972

209

218

8,918

330

15,156

49,988

15,175

9,343

5,317

18,745

930

45,186

76,078

1,904

2,676

1,501

1,912

1,953

136

219

9,662

573

42

21,925

57,626

20,789

9,622

5,697

19,813

982

32,439

78,002

1,597

2,251

1,385

1,728

1,972

942

4s,013

7,124

4,775

M,285

209

218

8,918

330

15,'t56

49,988

15,175

9,343

5,317

18,745

930

45,186

76,078

1,904

2,676

1,501

1,912

1,953

942 1,258

42,477

6,752

4,977

81,613

45,013

7,124

4,775

M,285

368,599 392,616 368,599 392,616

PARENT




4. OtherOperatingExpenses

a) Otherlncludes:

Contract for Patient Services

Corporate Support Services

Courier and Freight

lsolated Patient Travel and Accommodation Assistance Scheme

Legal Services

Membership/Professional Fees

Motor Vehicle Operating Lease Expense - Minimum Lease Payments

Public Private Partnership Contracted Services

Other Operating Lease Expense - Minimum Lease Payments

Quality Assu rance/Accreditation

Security Services

Other Miscellaneous

b) Reconciliation of Total Maíntenance

Maintenance Confacts

New/Replacement Equipment under $10,000

Repairs Maintenance/Non Contract

Other

cor{soltDATroN

2017 2016

$000$000

2016

¡000

2017

$000

7,179

'1 1,959

574

28

365

797

1,418

14,542

1,664

30

330

5,399

7,0M

I 1,338

607

18

805

597

1,513

44,812

913

55

596

13,315

7,179

1 1,959

574

28

365

797

1,418

14,542

'1,664

30

330

5,399

7,044

1 1,338

607

18

805

597

1,5't3

M,812

913

55

596

r3,315

44,285 8r,613 u,285

13,413

15,350

4,643

(e67)

81,613

13,413

15,350

4,643

(e67)

11,754

28,067

6,298

(e33)

11,754

28,067

6,298

(e33)

32,439

3,208

45,186

3,431


Related in Note 4)


Notes 2 and 3

32,439 45,186

3,431

35,647 48,617

Audito/s Remuneration'was paid to The Audit Office of New South Wales, an entity controlled by the ultimate parent.

The majority of ' Hospital Ambulance Transport Costs', 'lnformalion Management Expenses', 'Domestic Supplies and

Services', 'Food Supplies', 'Corporate Support Services', ' Special Service Departments', were paid to Health


3,208

35,647 48,617

PARENT





Depreciation - Buildings

Depreciation - Plant and Equipment

Depreciation - lnfrætructure Systems

Amortisation - Leasehold lmprovements

Amortisation - lntangible Assets


Non-Government 0rganisations

Grants to Research Organisations

Grants paid to entities controlled by the immediate parent

Other Grants

7. FinanceGosb

Public Private Partnership Leæe lnterest Charges

lnterest on Loans

Other lnterest Charges

8. Payments to Affiliated Health Organisations

(a) RecunentSourced

Greenwich & Neringah Hospitals (HammondCare)

Royal Rehabilitation Centre Sydney

CONSOLIDATION

2017

$000

2017

$000

2016

s000

2016

$000

49,425

12,949

1,143

165

945

48,545

13,170

1,114

101

928

49,425

12,949

1,143

165

945

48,545

13,170

1,114

101

928

63,85864,627 63,858 64,627

4,264

507

304

2,615

4,326

477

504

3,385

4,264

507

304

2,615

4,326

477

504

3,385

7,690 8,692

71,083

18

(1)

7,690

71,589

63

8,692

71,083

18

(1)

71,589

63

71,652 71,100

17,053

15,407

71,652 71,100

16,917

16,599

16,917

16,599

17,053

15,407

33,516 32,460 33,516 32,460

PARENT






Pharmacy Sales

Sale of Prosthesis

Other


Patient Fees

- lnpatient Fees

- Nursing Home Fees

- Non lnpatient Fees

Department of Veterans' Affaiß

Staff-Meals and Accommodation

lnfrastructure Fees - Monthly Facility Charge

lnfrastructure Fees - Annual Charge

Car Parking

Child Care Fees

Clinical Services (excluding Clinical Drug Trials)

Commercial Activities

Fees for Medical Records

lnformation Retrieval


Motor Accident Authority Third Party

Patient Transport Fees

Private Use of Motor Vehicles

Salary Packaging Fee

Hosted Services Provided to entities controlled by immediate parent

Services Provided to Non NSW Health Organisations

Other

10. lnvestment Revenue

lnterest

Other

cor,¡s0LtDAT!oN

2017

$000

20r6

$000

225

10,722

2,249

359

1 1,954

2,346

2016

359

1 1,954

2,346

225

10,722

2,249

1 04,969

157

4,577

27,914

10'î

23,253

8,552

223

2,154

662

2,978

187

3

26,498

12,861

(1 07)

109

926

7,222

3,253

4,021

$000

20't7

$000

104,969

157

4,577

27,914

101

23,253

8,552

223

2,154

662

2,978

187

3

26,498

12,861

(107)

109

926

7,222

3,253

4,021

99,759

97

4,583

28,698

78

20,128

5,829

316

2,371

1,481

2,872

178

3

18,703

14,131

73

139

910

9,380

3,1 67

3,011

99,759

97

4,583

28,698

78

20,'t28

5,829

316

2,371

1,481

2,872

178

3

18,703

14,131

73

139

910

9,380

3,'167

3,011

243,709

2,657

159

230,566 243,f09

2,657

159

230,566

2,920

176

2,920

176

3,0962,8f 6 2,816 3,096

PARENT




ll. Grants and Gonfributions

Clinical Drug Trials

Commonwealth Govemment Grants

lndustry Contributions/Donations

Cancer lnstitute Gnnts

Grants received from entities controlled by the ultimate parent

Grants received from entities controlled by the immediate parent

Research Grants

Other Grants

The following liabilities and expenses have been assumed by the Crown

Entity:

Supenannuation-defined benefi tLong Service Leave

13. Other Revenue


Bad Debts Recovered

Commissions

Conference and Tnining Fees

Discounts received

lnsu¡ance Refunds

Lease and Rental

Sale of Merchandise, Old Wares and Books

Sponsorship

Treasury Managed Fund Hindsight Adjustment

Unclaimed Deposits

Other-

CONSOLIDATION

2017

$000

2016

$000

2017

$000

20t6

$000

3,787

10,908

6,024

8,177

1,654

1,185

3,407

4,522

3,168

10,574

7,835

8,689

2,ilo1,488

4,340

4,316

3,787

10,908

6,024

8,177

1,654

1,185

3,407

4,522

3,168

10,574

7,835

8,689

2,ilo1,488

4,340

4,316

39,664 42,950 39,664 42,gil

42,082

The Cancer lnstitute is an entity controlled by the immediate parent.

The majori$ of gnanb that were received ftom entities controlled by the ultimate parent were received from

Department of Family and Community Services.


Health Administration Coçoration.

Some of the Research Grants were received ftom entities controlled by the ultimate parent.

12. Acceptance by the Grown Entity of Employee Benefits

7,814

14,773

8,225

r¿,587 $,307

b

70

101

56

109

3,978

25

I

10,577

6,754

5

52

100

6

70

101

56

109

3,978

25

I

10,577

6,754

5

52

100

17

4,0M

19

1

4,305

1

6,310

17

4,0M

19

I

4,305

1

6,310

14,8il 21,67714,854 21,677

- The majority of the Other revenue were received from entities controlled by the immediate parent.

PARENT




14. Gain I (Loss) on Disposal


Accumulated Depræiation

Written Down Value

Proceeds from Disposal

Gain(Loss) on Disposal ofProperty, Plant and Equipment

(28/l Total Gainl(Loss) on Disposal


(1,742\


Asset Revaluation lncremenU(Decrement)

lmpairment of Reæivables

(1,742'

cot{soLtDATtoN

2017

$000

37,733

(37,346)

5,456

(5,083)

2016

$000

5,456

(5,083)

2017

$000

2016

$000

37,733

(37,346)

387

194

373

89

387

194

373

89

(1e3) (2ul (284)(1e3)

(zul(1e3)(r$)

(3,495)

(587)(587)

(3,495) (1,742)

(4,082) (4082) 11,7421

PAREI{T & CONSOLIDAT]ON

'16. Gonditions on Contributions

Conkibutions reægnised as revenues during the cunent reporting period

for which expenditure in the manner specified had not occurred as atreporting date

Contributions recognised in previous years which were not expended in

the cunent reporting period

Total amount of unexpended contributions as at reporting date

Comment on resficted assets appears in Note 24




Purchase of

Assets

Health Promotion,

Education and

Research

Oher Total

$000 ¡000 $000

5,271 4,389 9,660

29,953 41,608 34,860 106,421

35,224 41,608 39,249 1 16,081

124,179 124,866

124,179 124,866

124,179 124,866





Cash at Bank and 0n Hand

ShortTerm Deposits

For the purposes of the Statement of Cash Flows, cæh and


term deposits.

Cash & cash equivalent assets recognised in the Statement ofFinancial Position are reconciled at the end of the financial year


Cash and Cash Equivalents (per Statement of Financial Position)

Closing Cæh and Cash Equivalenb (per Statement of Cash Flows)

Referto Note 38 for detdls regarding credit risk, liquidity risk

and market risk arísing from frnancial instruments.

PARENT cot{soLlDATtoN

2017

$000$000

2017

57,814

66,365

2016

$000

2016

$000

60,038

64,828

57,814

66,365

60,038

64,828

124,179 124,866

124,179 124,866

124,179 124,866




PARENT

18. Receivables

Current


lntra Health Receivables

Goods and Servicæ Tax

Other Debtors

CONSOLIDATION

2017

$000

s8,985

39,209

1 1,593

6,852

1,331

33,442

10,177

8,073

10,519

$000

2017

39,209

1 1,593

6,852

1,331

20r 6

$000

2016

$000

33,442

10,177

8,073

10,519

58,985

(3,326)

62,211 Sub Total

(4,057) Less Allowance for lmpairment

Sub Total

Prepayments

(2,750)

2,348

206

a) Movement in the Allowance for lmpairment


Balance at Commencement of Reporting Period

Amounts written ofi during the period

Amounts recovered during the period

(lncrease)/decrease in Allowance Recognised in

the Net Result

Balance at 30 June

(3,326)

62,211

(4,057)

6,300

55,659 58,154

5,277

55,659

6,300

58,154

5,277

(2,750)

2,348

206

(1 ,601)

61,959 63,431 61,959 63,431

'lntra Health Receivables' include amounts receivable from entities controlled by the immediate parent. The total

amount at reporting date includes $2.8m receivable from Health Administration Corporation.

(1,797)

2,375

24

(3,00e)

(2,407) (1,7e7)

(1,797)

2,375

24

(3,009)

(486) (141)

(e18) (2,260)

(3,325) (4,057)

1,253 1,332

1,253 1,332

b) Movement in the Allowance for lmpairment

Other Debtors

Balance at Commencement of Reporting Period

Amounts written off during the period

(lncrease)/decrease in Allowance Recognised in

the Net Result

Balance at 30 June

Non-Current

Prepayments

(2,260l,

1,828

(2,152)

33

(2,407)

(2,260)

1,828

(486)

(1,797)

(141)

(2,152)

33

(e1 8) (2,260)

(3,325) (4,057)

1,3321,253

1,253 1,332

PARENT


Notes to and forming part of fie Financial Statements


18. Receivables

c) The curent and non-cunent sale of goods and services

balances above include the follorving patient fee receivables:

(Curent and Non-Cunent) include:

Patient Fees - Compensable

Patient Fees - lneligible

Patient Fees - lnpatient & Other


asseß that are either past due or impaired are disclosed in Note 38.

coitsoLlDATloN

2017

i000 $000$000$000

2017

3,162

5,505

16,359

2016

2,283

3,705

13,311

3,162

5,505

16,359

2016

2,283

3,705

13,311

25,026 19,299 25,026 19,299


Notes to and forming part of the Financial Statemenb


PARENT coitsoLtDATto¡{

2017

$000

2,410

6,135

64

2,086

2017

$ooo

2016

$000 $ooo

201ô

2,285

5,460

58

1,743

2,410

6,135

64

2,086

2,285

5,460

58

1,743

19. lnventories

Drugs

Medical and Surgical Supplies

Engineering Supplies

Other lncluding Goods in Transit

10,695 9,546 10,695 9,546

PARENT






Gross Carrying Amount

Less: Accumulated Depreciation and lmpairment




75,931 Net Carrying Amount

CONSOLIDATION

20172017

$000 $000

2016

$000

201 6

$000

2,696,540

685,406

2,502,632

598,710

2,696,540

685,406

2,502,632

598,710

2,011,134 1,903,922 Net Carrying Amount 2,011,134 1,903,922

160,452

84,521

165,675

93,1 56

160,452

84,521

165,675

93,1 56

72,519 72,519

46,349

28,386

75,931

43,754

24,297

46,349

28,386

43,754

24,297

lnfrastructure Systems - Faír Value



19,457 Net Carrying Amount17,963 17,963

1,006

972

19,457

1,006

972

1,006

807

Leasehold lmprovements - Fair Value*



1,006

807

r993434 199 Net Carrying Amount


At Net Carrying Amount 2,1 01,650 1,999,509

'For non-specialised assets with short useful lives, recognition at depreciated historical cost is regarded as an

acceptable approximation of fair value, in accordance with Treasury Policy Paper 14-01.

2,101,650 1,999,509








(D Land and Buildings include land owned by the Health Administration Corporation but controlled by the NSLHD lsee note 1(k)].

(ii) lndices provided by Liquid Pacific were not applied as as they were deemed immaterial.

Land

$000

Buildings

$000

Plant and

Equipment

$000

lnfrastructure

Systems

$000

Leasehold

lmprovements

$000

Total

$000

2017


Additions

Disposals

Administrative Restructures - Transfen ln(Out)

Iransfers within NSW Health Entities through Statement ofSomprehensive lncome

Net Revaluation lncrement Less Revaluation Decrements


mpairment Losses (Recognised in "Other Gains/Losses)

)epreciation Expense

ìeclassifications from Buildings to lnfrastructure

433,272

(155,000)

221,488

1,470,650

42,113

(101)

48,373

(49,425)

(236)

75,931

9,146

(286)

677

(12,949)

19,457

(587)

(1,143)

236

199

(165)

1,999,509

51,259

(387)

(155,000)

677

269,861

(587)

(63,682)

Net carrying amount at end of year 499,760 1,511,374 72,519 17,963 34 2,101,65(

Land

$000

Buildings

$000

Plant and

Equipment

$000

lnfrastructure

Systems

$000

Leasehold

lmprovements

$000

Total

$000

2016


Additions

ìeclassifications to lntangiblæ

Disposals

lransfers within NSW Health Entities through Statement of3omprehensive lncome

)epreciation Expense

433,272 1,482,714

36,481

(48,545)

76,782

12,503

(300)

(373)

489

(13,170)

20,571

(1,114)

300

(101)

2,013,639

48,984

(3001

(3731

489

(62,9301

\et carrying amount at end of year 433,272 I,470,650 75,931 19,457 199 1,999,509

PARENT




21. lntangible Assets

lntangibles

Cost (Gross Carrying Amount)

Less Accumulated Amortisation and lmpairment

CONSOLIDATION

2017

$000

2017

$000

2016

4,473

1,929

$ooo

2016

$000

4,472

2,873

4,472

2,873

4,473

1,929

1,599

1,599

PAREI{T & COI{SOLIDATION

2,544 Net Carrying Amount

2,5U Total lntangible Assets at Net Garrying Amount

21. lntangible Assets - Reconciliation

f,599 2,544

1,599 2,5U

lntangibles

$ooo

Total

$000

2017



2,il4(e45)

2,544

(e451

Net carrying amount at end of year 1,599 1,599

lntangibles

$(loo

Total

$000

2016


Reclassifications from Plant & Equipment


3,172

300

(e28)

3,172

300

(e28)

Net carrying amount at end ofyear 2,5U 2,5U




PAREìIT coìtsollDATroil

2017

$000

8,110

$000i000

2017

8,1 10

2016

7,623

2016

$000

22. Other Assets

l{on.Gunent

Emerging Righb to Assets (refer Note 1(ag)) 7,623

8,110 7,623 I,110 7,623




PARENT & CONSOLIDATIOT{

23. Fair Value Jlleasurement of ilon.Financial Assets


a) FairValue Hienrchy

2017 Level I$000

Level 2

$000

Level 3

$000

Total

1,864,434

17,963

8,110

$000



- lnfrastructure Systems

Other Assets (Note 22) Emerging Assets

2016



- lnfrastructure Systems

Other Assets (Note 22) Emerging Assets

503,788 1,360,645

17,963

8,110

503,788 1,386,718 1,890,507

There were no transfers between level 1 and 2 during the year ended 30 June 201 7.

Work in Progress and Newly Completed Projects are canied at cost, therefore excluded from figures above and as a result will not agree to Note 20.

Level I$000

Level 2

$000

Level 3

$ooo

Total

$000

770,526 1,027,984

19,457

7,623

1,798,510

19,457

7,623

770,526 1,055,064 1,825,590


Work in Progress and Newly Completed Proþcts are canied at æst, therefore excluded from figures above and as a result will not agree to Note 20




PARENT & COilSOLIDATION

23. Fair Value Measurement of l{on.Financial Asseb

b) Valuation Techniques, lnpub and Processes

For land, buildings and infastructure systems the NSLHD obtains extemal valuations by independent valuers at least every three years. The last

revaluation was performed by Liquid Pacific for the 2016117 financial year. Liquid Pacific is an independent entity and is not an associated entity ofthe NSLHD.

At the end of each reporting period a fair value assessment is made on any movements since the last revaluation, and a determination as to whether

any adjustments need to be made. These adjustments are made by way of application of indices refer, note 20 reconcilation.

The noncurrent assets categorised in a) above have been measured as either level 2 or level 3 based on the following valuation techniques and

inputs:


significant input is price per square metre,

All commercial and non+estricted land is included in Level 2 as these land valuations have a high level of observable inputs although these lands are

not identical.

For buildings and infrastructure, many assets are of a specialised nature or use, and thus the most appropriate valuation method is depreciated

replacement cost. These assets are included as Level 3 as these assets have a high level of unobservable inputs. However, residential properties

are valued on a market approach and included in level 2.


23. Fair Value Measurement of Non.Financial Assets

c) Reconciliation of Recuning Level 3 Fair Value Measurements

2017

Fair value as at 1 July 2016

Additions

Revaluation incrementsldecrements recognised in net result - included in the line

item 'Other gains/ (losses)'

Revaluation increments/ decrements rec,ognised in other comprehensive income

- included in line item 'Net increase / (decrease) in property, plant and equipment

revaluation surplus'

Transfers from Level 2

Disposals

Depreciation

Reclassification from Buildings to lnfrastructure

Fair value as at 30 June 2017

There were no transfers between Level 1 or 2 during the year ended 30 June 2017

2016

Fair value as at 1 July 2015

Additions

Depreciation

Fair value as at 30 June 2016

There were no transfers between Level 1 or 2 during the year ended 30 June 2016.




Land andBuildings

$000

1,027,749 19,457

48,373

329,711

(101)

(44,851)

(236)

(1,143)

1,360,645 17,963 8,110 1,386,718

lnfrastruc{ure

Systems

$000

Other

Assets

$000

Total Level 3

Recuning

$000

1,054,829

487

(587)

48,373

329,711

(101)

(45,ee4)

7,623

487

(587)

236

Land and

Buildings

$000

lnfrastruc{ure

Systems

$000

Other

Assets

$000

Total Level 3

Recuning

$000

1,067,761 20,571

(40,012) (1,114)

7,166

457

1,095,498

457

(41,126)

1,027,749 19,457 7,623 1,01,829

PARENT




24. RestrictedAssets

The NSLHD's financial statemenb include the following assets which are

restricted by externally imposed conditions, eg. donor requirements. The

asseß are only available for application in accordance with the terms of the

donor restrictions.

Category

52,708 Specific Purposes

22,593 Research Grants

31,120 Private Practice Funds

106,421

CONSOLIDATION

2017

57,274

23,282

35,525

2017

¡000

2016

$000$000

2016

$000

57,274

23,282

35,525

52,708

22,593

31j20

116,081 1,l6,081 106,421

PARENT




25. Payables

Current

Accrued Salaries, Wages and On-Costs

Taxation and Payroll Deductions

Accrued Liability - Purchase of Personnel Services

Creditors

lnterest

Other Creditors

- Payables to entities controlled by the immediate parent

- PPP Monthly Service Fees

- Other

Non-Current

Other Loans and Deposits

Public Private Partnership

CONSOLIDATION

2017

$000

2017

$000

201 6

23,113

35,630

1

10,062

19,515

9,331

$000

201 6

$000

26,063

36,019

6,795

18,429

10,646

20,633

5,430

36,019

6,795

18,429

10,646

18,291

4,822

35,630

1

10,062

19,515

9,331

97,952 97,652 97,952 97,652

243

162

236

55

243

162

236

55





26, Borrowings

Gurrent

Other Loans and Deposits

Public Private Partnership

291405291405

2,022

721,500

2,265

721,607

2,022

721,500

2,265

721,607

723,522 723,872 __--Jn,sn_ ,n,8r3_

'Other Loans and Deposits' represent monies to be repaid to the NSW Treasury, which is controlled by the

ultimate parent.

No assets have been pledged as security/collateral for liabilities and there are no restrictions on any title toproperty.

Final Repayment of loan is scheduled for 2037

Details regarding credit risk, liquidity risk and market risk, including a maturity analysis of the above borrowings


PARENT




26. Bonowings

a) Finance Leases

Minimum lease payments in relation to finance leases are

payable as follows:

Not later than one year

Later than one year and not later than five years

Later than five years

CONSOLIDATION

2017

$r¡00

2016

76,519

326,495

1,607,887

2017

75,766

330,423

1,s17,023

76,519

326,495

1,607,887

$000$000

2016

$000

75,766

330,423

1,517,023

1,923,212

1,201 ,550

2,010,901 Minimum Lease Payments

1,289,239 Less: Future Finance Charges

Present Value of Minimum Lease Payments

The present value offinance lease paymenb is as follows:


Later than one year and not later than five yeas

Later than five years

Royal North Shore Hæpital Campus redevelopment Public Private

Partnership (PPP) Contract awarded in October 2008. Project construction

completed and commissíoned in October 2014. PPP Contract will expire in

2037.

1,923,212

1,201,550

2,010,901

1,289,239

721,662 721,662

55

6,352

715,255

721,662 721,662

't62

13,135

708,366

162

13,135

708,366

55

6,352

715,255

721,662 721,662 Prcsent Value of Minimum Lease Payments Classified as:

721,607

Cunent (Note26)

Non-Cunent (Note 26)

721,662 721,662 721,662

721,662 721,662

162

721,500

55 ,t62

721,500

55

721,607

721,662

PARENT




27. Provisions

Cunent

Annual Leave - Short Term Benefit

Annual Leave - Long Term Benefit

Long Service Leave Consequential 0n-Costs

Provision for Personnel Services Liability

Other

Non-Gunent

Long Service Leave Consequential 0n-Costs

Provision for Personnel Services Liability

Aggregate Employee Benefits and Related On.Gosts

Provisions - Cunent

Provisions - Non-Current

Accrued Salaries, Wagæ and On-Costs (Note 25)

Liability - Purchase of Personnel Services


Current

lncome in Advance

Non-Current

lncome in Advance

Cunent lncome in Advance reflects clinical trial and project

funding. Non Cunent balance represents rent received in

advance for the use of building and car park facilities for the

thirty years ending 2047.

CONSOLIDATION

20172017

$000

2016

$000 $000

2016

$000

1 36,1 93

1,767

134,304

100,032

17,508

18,653

1,767

94,954

20,744

18,606

137,960 134,304 137,960 134,304

1,622 1,618

1,622 1,618

1,622 1,618 1,622 1,618

136,'t93

1,622

26,063

134,304

1,618

23,113

163,878 159,035

163,878 I 59,035 163,878

5,439

159,035

5,439 6,818 6,818

5,439

24,226

6,818 5,439

24,226

6,8f8

25,37425,374

24,226 25,374 24,226 25,374

PARENT




29. Gommitments for Expenditure

a) Capital Gommitments



intangible assets, contracted for at balance date and not provided

for:



CONSOLIDATION

2017

$000 $000$000

2017

$000

23,071

1,12',1

2016

39,028

8,328

23,071

1,121

2016

39,028

8,328

24,192 47,356 Total Gapihl Expenditure Gommitments (lncluding GST)

The majority of 'capital commitments' contracted but not provided

for related to capital works overseen by the Health Administration

Corporation, an entity controlled by the immediate parent.


Future non-cancellable operating lease rentals not provided for and

payable:



3,179 Total Operating Lease Commitments (lncluding GST)

The operating lease commifrnents above are for motor vehicles and

property leases.


The total 'Capital Expenditure Commitments' and 'Operating Lease

Commitments' of $28 Million as at 30 June 2017 includes input tax

credits of $2.5 Million that are expected to be recoverable from the

Australian Taxation Office (2016 $3.9 Million).

d) 0n 11 December 2014, Healthscope signed a contract with Health

Administration Corporation (HAC) and Northern Sydney Local

Health District to design, build, operate and maintain the new

Northern Beaches Hospital. ln 20'18, the hospital will open to

provide care to both public and private patients. No commitments

related to this project are recognised as at 30 June 201 7.

24j92 47,356

1,792

1,856

,496

,683

,496

,683

1,792

1,856

3,648 3,648 3,1 79


Notæ to and forming part of the Financial Statements


PAREi¡T & CONSOLIDATIOi¡

30. TrustFunds

The NSLHD holds trust funds of $3.0 Million which are held for the safe keeping of patients' monies, deposiß on hired items of equipment and Private

Practice Trusts.

These funds are excluded from the financial statements as the NSLHD cannot use them for the achievement of its objectives. The follouring is a summary ofthe transactions in the trust account.

PafientTrust Refundable

Deposits

Total

Balance at the beginnirp


Revenue

2017

409 628 1,360

1,178 1,522 1,0¡O

(r,303) (1,7411 (945)

2017

$000

2016

$000

m17

$000$000

2017

$000$000$000

2016

1,237

1,392

(1,269)

Private Practice

Trust Funds

1,325

83,088

(83,1271

2016

1,n8

75,810

(75,763)

3,094

85,306

(85,375)

2016

$000

3,143

18,724

(78,773)Expenses

Balanæ at the end ofthefinancial year 2U 409 1,455 1,360 1,286 1,325 3,025 3,094




PAREI{T AND CONSOLIDATED

31. JointAnangements

The interæt in a þint venture entity is accounted for in the consolidated financial statemenb using the equity method and is canied at costby the parent entity. Under the equity method, the share of the profib or losses ofthe entity is recognised in the income statement, and theshare of movements in reservæ is recognised in ræerves in the statement of comprehensive income and the statement of changes in

equity.

PARENT




32. Reconciliation of Cash Flows from Operating Activities to ilet Result

Net Cash Flows from Operating Activities

Depreciation and Amortisation

Allowance for lmpairment

(lncrease)/ Decrease lncome in Advance

(lncrease/ Decrease in Provisions

lncrease / (Decrease) in Prepayments and Other Assets

(lncrease)/ Decrease in Payables from Operating Activities

Revaluation of Property, Plant and Êquipment recognised

in "Other gains/(losses)"

Net Gain/ (Loss) on Sale of Property, Plant and Equipment

Assets donated or brought to account for the fiat time

t{et Result

33. Non-Cash Financing and lnvesting Aclivities

Assets Received by Donation


It is considered impracticable to quantify the monetary value ofvoluntary services provided to the NSLHD. Services provided include:

Chaplaincies and Pastoral Care

Pink Ladies/Hospital Auxiliaries

Patient Support Groups

Community Organisations

Patient & Family Support

Patient Services, Fund Raising

Practical Support to Patients and Relatives

Counselling, Health Education, Transport, Home Help & Patient Activities


Unclaimed salaries and wages are paid to the credit of the NSW Treasury in

accordance with the provisions of the /ndusfíal Relations Act,1996.

All money and personal effects of patients which are left in the custody of the

NSLHD by any patient who is discharged or dies in the hospital and which are

not claimed by the person laìrvfully entitled thereto wilhin a period of twelve

months are recognised as the property of the NSLHD.

All such money and the proceeds of the realisation of any personal effects are

lodged to the credit of the Samaritan Fund which is used specifically for the

benefit of necessitous patients or necessitous outgoing patients.

CONSOLIDATION

201t

$000

2017

50,613

(64,627)

(3,495)

2,527

(3,661)

3,359

(77)

2016

$000$000

50,613

(64,627)

(3,4e5)

2,527

(3,661)

3,359

(77)

2016

$000

39,396

(63,858)

(1,742)

(14)

(2,476)

9,753

5,210

39,396

(63,858)

(1,742)

(14)

(2,476)

9,753

5,210

W)(587)

(1 e3)

677

(587)

(1 e3)

677

(284)

(15,464) (r4,015) (r5,464) (r4,015)

677 677

6't76f7






Net Result

The actual Net Result was higher than adjusted budget by $2 Million, primarily due to:

Revenue being favourable by $7 Million which was largely attributable to higher than expected Grants & Contributions and Sale of Goods and Services.

Expenditure being unfavourable by $5 Million, largely attributable to employee related expenses as a result of higher than expected acute and

emergency department activity across the District.


Actual Consolidated Total Assets are $268 Million favourable to budget due to Asset Revaluation.

Actual Consolidated Total Liabilitiæ were $3 Million favourable to budget. The main variance to budget related to the decrease in Payables of $2 Million

and Other (lncome in Advance) $1 Million.

Cash Flows

Actual Operating Cash Flows were $0.5 Million unfavourable to budget. The variance to the budget is related to additional employee related expenditureincuned due to higher than expected activity.

Movements in the level of the NSW Ministry of Health Recunent Allocation that have occuned since the time of the initial allocation on 01/07/2016 are as

follows:

$000

lnitial Allocation, 0l July 2016

Award lncreases

Supplementation reduction PPP lnterest

Supplementation reduction PPP lnsurance

PPP SPV Expenses

Reduction in 16/17 lnitial Budget PPP

Voluntary Redundancy Reimbursement

Adjustment for Additional Activity

Nurse and Midwifery lnitiatives 2016-17

0rgan and Tissue Donation Funding

Musculoskeletal lnitiative

Agcd Care Assessment Funding Allocation

Direct Funding of NSW Health Pathology Teaching_Training_Research Staff Costs

Prior Year 2015 16 Revenue Washups DVA-MVA RAS TACP

Others

Balance as per Statement of Comprehensive lncome

1,143,202

46,884

(342)

(73)

(440)

(1,738)

1,376

8,220

743

537

561

584

(e4e)

(1,354)

4,693

1,201,904




37. lncrease(Decrease) in ilet Assets from Equity Transfers

Equity transferc effected in the 2015116 year were:

Nit

Equity transfers effected in the 2016117 yearlvere:

As part of a NSW Government decision to undertake a relocation project, a decision was made to transfer two sites from Northern Sydney Local Health

District to the Ministry of Health, which is the immediate parent.

Assets and Liabilities transferred are as folloyrs:

2017 2016

Land and Buildings (155,000)

The value of the sites was adjusted to $155,000,000, which was the fair value oftheassets immediately prior to the transfer to the Ministry of Health. The revaluation

increment was adjusted to the asset revaluation surplus.

lncrease(Decrease) in ilet Assets From Equity Transfers (155,000)

$000$000




38. Financiallnstruments

The NSLHD's principal financial instruments are outlined below. These financial instruments arise directly from the NSLHD's operations or are required tofinance its operations. The NSLHD does not enter into or hade financial instrumenb, including derivative financial instruments, for speculative purposes.

The NSLHD's main risks arising from financial instruments are outlined below, together with the NSLHD's objectivæ, policies and processes formeasuring and managing risk. Further quantitative and qualitative disclosures are included throughout these financial statements.

The lüChief Executive has overall responsibility for the establishment and oversight of risk management and reviews and agrees policies for managingeach of these risks. Risk management policies are established to identify and analyse the risks faced by the NSLHD, to set risk limiß and controls and tomonitor risks. Compliance with policies is reviewed on a continuous basis.

(a) Financial lnstrument Categories


Financial Assets Class: Gategory

Cash and Cash Equivalents (note 17)

Receivables (note 18)-

N/A


Canying Amount

2017

$000

124,179

48,807

Canying Amount

2016

¡000

124,866

50,081

172,986 174,947

724,163

92,830


Borrowings (note 26)

Payables (note 25)*Financial liabilities measured at amortised cost

Notes

* Excludes statutory receivablæ and prepayments (i.e. not within scope of MSBT Financial lnstruments Disclosures)*Excludes

statutory payablæ and unearned revenue (i.e. not within scope of AASBT Financial lnstruments Disclosures).

723,927

92,522

816,449 816,993




38, Financiallnstruments

(b) Credit Risk

Credit risk arises when there is the possibility that the counterparty will default on their contractual obligations, resulting in a financial loss to the NSLHD.

The maximum exposure to credit risk is generally represented by the carrying amount of the financial assets (net of any allowance for impairment).

Credit risk arises from financial assets of the NSLHD, including cash, receivables and authority deposits. No collateral is held by the NSLHD. The NSLHDhas not granted any financial guarantees.

Credit risk associated with the NSLHD's financial assets, other than receivables, is managed through the selection of counterparties and establishment ofminimum credit rating standards. Authority deposits held with NSW TCorp are guaranteed by the State.

Cash

Cash comprises cash on hand and bank balances deposited within the NSW Treasury banking system. lnterest is earned on daily bank balances at rates

of approximately 2.35o/o in 2016117 conpared to 2.6o/o in the previous year.





outstanding amounts, including lefters of demand. Debts which are known to be uncollectable are written off. An allowance for impairment is raised whenthere is objective evidence that the NSLHD will not be able to collect all amounts due. This evidence includes past experience and cunent and expected

changes in economic conditions and debtor credit ratings. No interest is earned on trade debtors.

The NSLHD is not materially exposed to concentrations of credit risk to a single trade debtor or group of debtors. Based on past experience, debtors thatare not past due (2017: $40.9 Million ; 2016: $36.8 Million) and not more than 3 months past due (2017: $5 Million ; 2016: $4.3 Million) are not consideredimpaired.

ln addition Patient Fees Compensables are frequently not settled within 6 months of the date of the service provision due to the length of time it takes tosettle legal claims. Most of the NSLHD's debtors are health insurance companies or compensation insurers settling claims in respect of inpatienttreatments.

Financial assets that are past due or impaired could be either'Sales of Goods and Services' or 'Other Debtors' in the 'Receivables' category of theStatement of Financial Position. Patient Fees lneligibles represent the majority of financial assets that are past due or impaired.





Total 1'2

Past due but not

impaired 1'2

Considered

impaired 1'2

2017

<3 months overdue

3 months - 6 months overdue

> 6 months overdue

$000 $000 $000

4,989

2,923

3,326

4,989

2,923

3,326

4,324

1,626

4,057

Notes

1 Each column in the table reports "gross receivables'.

2 The ageing analysis excludes statutory receivables, as these are not within the scope of AASBT Financial lnstruments Disclosures and excludes

receivables that are not past due and not impaired. Therefore, the "total" will not reconcile to the receivables total recognised in the statement of fìnancial

position.

Authority Deposits

The NSLHD has placed funds on deposit with TCorp, which has been rated 'AAA' by Standard and Poo/s. These deposits are similar to money market or

bank deposits and can be placed 'at call' or for a fixed term. For fixed term deposits, the interest rate payable by TCorp is negotiated initially and is fixed

for the term of the deposit, while the interest rate payable on at call deposits can vary. The deposits at balance date were earning an average interest rate

of 2.4o/o (2016:2.1%), while over the year the weighted average interest rate was 2.37o/o (2016,2.470/o) on a weighted average balance during the year of$65,7 Million (2016: $63.6 Million). None of these assets are past due or impaired.

(c) Liquidity Risk

Liquidity risk is the risk that the NSLHD will be unable to meet its payment obligations when they fall due. The NSLHD continuously manages risk through

monitoring future cash flows and maturitiæ planning to ensure adequate holding of high quality liquid assets. The objective is to maintain a balance

between continuity of funding and flexibility through effective management of cash, investments and liquid æsets and liabilities.

The NSLHD has negotiated no loan outside of arrangements with the NSW Ministry of Health or Treasury.

During the cunent and prior years, there were no defaults of loans payable. No assets have been pledged as collateral.

The NSLHD has exposure to liquidity risk. However, the risk is minimised by the service agreement with the NSW Ministry of Health, as the annual

service agreement requires local management to control its financial liquidity and in particular meet benchmarks for the payment of creditors. Where the

NSLHD fails to meet service agreement performance standards, the Ministry as the state manager can take action in accordance with annual

performance framework requirements, including providing financial support and increased management interaction (refer Note 1).

The liabilities are recognised for amounts due to be paid in the future for goods or servicæ received, whether or not invoiced. Amounts owing to suppliers(which are unsecured) are settled in accordance with the policy set by the NSW Ministry of Health in accordance with NSW Treasury Circular 11112.For

small business suppliers, where terms are not specified, payment is made not later than 30 days from date of receipt of a correctly rendered invoice. For

other suppliers, if trade terms are not specified, payment is made no later than the end of the month following the month in which an invoice or a

statement is received.





2016

<3 months overdue

3 months - 6 months overdue

> 6 months overdue

4,324

1,626

4,057

Northern Sydney Local Health Dishict



38. Financial lnstruments

The table below summarises the maturity profile of the NSLHD's financial liabilities together with the interest rate exposure.


lnterest Rate Exposure Maturity Dates

2017

Payables:



- Creditors

Borrowings:

- Loans and Deposits

- Public Private Partnership

2016

Payables:



- Creditors

Borrowings:

- Loans and Deposits

- Public Private Partnership

Fixed lnterest Variable Non - lnterest

Rate lnterest Rate Bearing

20,633

71,889

2,536

Nominal

Amountr l-5 Yr > 5Yr

$000 $000 $000 $000 $000 $()oo $000

<lYr

20,633

71,889

300

75,766

1,198

330,423

1,038

1,517,023

20,633

71,889

2,536

1,923,212 1,923,212

2,018,270 2,536 1,923,212 92,522 168,588 331,621 1,518,061

18,291

74,539

2,836

2,010,901

2,836 1,198

326,495

1,338

1,607,8872,010,901

18,291

74,539

18,291

74,539

300

76,519

2,106,567 2,836 2,010,901 92,830 1 69,649 327,693 1 ,609,225

Notes:

1 The amounts disclosed are the contractual undiscounted cash flows of each class of financial liabilities based on the earliest date on which

the NSLHD can be required to pay. The tables include both interest and principal cash flows and therefore will not reconcile to the Statement ofFinancial Position.





(d) Market Risk

Market risk is the risk that the fair value or future cash flows of a fìnancial instrument will fluctuate because of changes in market priæs. The NSLHD's

exposures to market risk are primarily through interest rate risk on the NSLHD's borrowings and other pdce risks associated with the movement in the unitprice of the Hour-Glass lnvestment facilities. The NSLHD has no exposure to foreign currency risk and does not enter into commodity contracts.

The effect on net result and equity due to a reasonably possible change in risk variable is outlined in the information below, for interest rate risk and otherprice risk. A reasonably possible change in risk variable has been determined after taking into account the economic environment in which the NSLHD

operates and the time frame for the assessment (i.e. until the end of the next annual reporting period). The sensitivity analysis is based on risk exposures in

existence at the Statement of Financial Position date. The analysis is performed on the same basis for 2016. The analysis assumes that all other variablesremain constant.

lnterest rate risk

Exposure to interest rate risk arises primarily through the NSLHD's interest bearing liabilities.

However, the NSLHD is not permitted to borrow external to the NSW Ministry of Health (except energy loans which are negotiated through NSW Treasury).

Both NSW Treasury and NSW Ministry of Health loans are set at fixed rates and therefore are generally not affected by fluctuations in market rates. TheNSLHD does not account for any fixed rate financial instruments at fair value through profit or loss or as available-for-sale. Therefore, for these financialinskuments, a change of interest rates would not afiect net result or equity.

A reasonably possible change of +l-1To is used consistent with current trends in interest rates (based on official RBA interest rate volatility over the last fiveyears). The basis will be reviewed annually and amended where there is a structural change in the level of interest rate volatility.

The NSLHD's exposure to interest rate risk is set out below

CarryingAmount

-1Yo +1o/o

Equity Net Equity

Result

Net

Result

2017

Financial Assets


Receivables


Payables*

Bonowings

$000

124J79

48,807

92,522

723,927

$000 $000 $000 $000

(1,2421 (1,242) 1,242 1,242

7,239 7,239 (7,239) (7,239)

201 6

Financial Assets


Receivables


Payables

Bonowings

124,866

50,081

92,830

724,163

(1,249) (1,249) 1,249 1,249

7,242 7,242 (7,242) (7,242)




38. Financial lnstruments

)ther price risk - TCorp Hour-Glass lnvestment facilities

Exposure to 'other price risk' primarily arises through the investment in the NSW TCorp Hour-Glass lnvestment Facilities, which are held for strategic rather

than trading purposes. The NSLHD has no directequity investments. The NSLHD holds units in thefollowing Hour-Glass investmenttrusts:

Facility lnvestment Sectors lnvestment Horizon 2017 201 6

$000$000

Cash facility Cash and money market instruments Up to 1.5 years 66,365 64,828

The unit price of each facility is equal to the total fair value of net assets held by the facility divided by the total number of units on issue for that facility. Unitprices are calculated and published daily.

NSW TCorp as trustee for each of the above facilities is required to act in the best interest of the unit holders and to administer the trusts in accordance with

the trust deeds. As trustee, NSW TCorp has appointed external managers to manage the performance and risk of each facility in accordance with amandate agreed by the parties. NSW TCorp has also leveraged off internal expertise to manage certain fìxed income assets for the Hour-Glass facilities. Asignificant portion of the administration of the facilities is outsourced to an external cuslodian.

lnvestment in the Hour-Glass facilities limits the NSLHD's exposure to risk, as it allows diversification across a pool of funds with different investment

horizons and a mix of investments.

NSW TCorp provides sensitivity analysis information for each of the lnvestment facilities, using historically based volatility information collected over a ten

year period, quoted at two standard deviations (ie 95% probability). NSW TCorp Hour-Glass lnvestment facilities are designated at fair value through profit

or loss and therefore any change in unit price impacts directly on profit (rather than equity).

A reasonably possible change is based on the percentage change in unit price (as advised by NSW TCorp) multiplied by the redemption value as at 30 June

each year for each facility (balance from Hour-Glass Statement).

lmpact on net result Change in unit price 2017

$000

2016

t000

Hour-Glass lnvestment - Cash facility +l- 1Yo 664 604

(e) FairValue Measurement



The amortised cost of financial instruments recognised in the Statement of Financial Position approximates the fair value, because of the short term nature

of many of the financial instruments.


38. Financial lnstrunænts


Level I$000

TCorp Hour-Glass lnvt. Facility

Level If000

TCorp Hour-Glass lnvlFacility




Level 2

$000

66,365

Level 2

$'000

64,828

Level 3

l'000

Level 3

$'000

2017 Tota¡

f000

66,365

2016 Total

$000

6¿f,828

(The table above only includes financial asseb as no financial liabilitiæ were meæured at fair value in the Statement of Financial Position.)

There were no transfers between level I and 2 during the period ended 30 June 2017.

As discussed, the value of the Hour-Glass lnvestmenb is based on the NSLHD's share of the value of the underlying asseb of the facilig, based on themarket value. All of the HourGlæs facilities are valued using Tedemption' pricing.






2017


Short-term employee benefi bPostemployment benefits

Other long-term benefits

Termination benefits

$000

210

13

223

During the fìnancial year, Northern Sydney Local Health District obtained key management personnel services from the immediate parent and incurred

$487k for these services.

Compensation for the Minister for Health is paid by the Legislature and is not reimbursed by the Ministry of Health and its controlled entities. Accordingly no


Remuneration for the Secretary and Deputy Secretaries are paid by the Ministry of Health and is not reimbursed by the health entities. Accordingly no suchamounts are included in the key management personnel compensation disclosures above.

There were no transactions with key management personnel and their close family members during the financial year,

There were no transactions with the ultimate parent during the financial year.

¡10. Events After the Reporting Period

There are no events after the reporting period that require amendment to the financial statements.

END OF AUDITED FINANCIAL STATEMEiITS

COVER PAGE 5

South Eastern Sydney Local Health District





Opinion

I have audited the accompanying financial statements of South Eastern Sydney Local Health District


comprehensive income, the statement of changes in equity and the statement of cash flows for the

year then ended, notes comprising a summary of significant accounting policies and other explanatory

information of the District and the consolidated entity. The consolidated entity comprises the District

and the entity it controlled at the year’s end or from time to time during the financial year.



30 June 2017, and of its financial performance and its cash flows for the year then ended in


• are in accordance with section 45E of the Public Finance and Audit Act 1983 (PF&A Act) and

the Public Finance and Audit Regulation 2015


Basis for Opinion




I am independent of the District in accordance with the requirements of the:




I have fulfilled my other ethical responsibilities in accordance with APES 110.

Parliament promotes independence by ensuring the Auditor-General and the Audit Office of


• providing that only Parliament, and not the executive government, can remove an Auditor-

General




audit opinion.

2


Without modification to the opinion expressed above, I draw attention to the basis of presenting

adjusted budget information detailed in Note 1(ah). The note states that AASB 1055 ‘Budgetary

Reporting’ is not applicable to the District. It also states that, unlike the requirement in AASB 1055

‘Budgetary Reporting’ to present original budget information, the District’s financial statements present

adjusted budget information.




as the Chief Executive determines is necessary to enable the preparation and fair presentation of the



the consolidated entity to continue as a going concern except where operations will be dissolved by an

Act of Parliament or otherwise cease. The assessment must disclose, as applicable, matters related to

going concern and the appropriateness of using the going concern basis of accounting.




material misstatement, whether due to fraud or error




Misstatements can arise from fraud or error. Misstatements are considered material if, individually or in

aggregate, they could reasonably be expected to influence the economic decisions users take based

on the financial statements.


and Assurance Standards Board website at: www.auasb.gov.au/auditors_responsibilities/ar3.pdf.



• that the District or the consolidated entity carried out its activities effectively, efficiently and

economically


statements




A Oyetunji

Director, Financial Services

8 September 2017

SYDNEY


1)

a)

b)

c)

2)

3)

Mrs Karen Foldi Director of Finance

8 September 2017


Certification of the Financial Statements


Mr Gerry Marr OBE Chief Executive

8 September 2017

We state, pursuant to section 45F of the Public Finance and Audit Act 1983:

The financial statements exhibit a true and fair view of the financial position and the financial performance of the South Eastern Sydney Local Health District; and

We are not aware of any circumstances which would render any particulars in the financial statements to be misleading or inaccurate.

The financial statements of the South Eastern Sydney Local Health District for the year ended 30 June 2017 have been prepared in accordance with:

financial Reporting Directions issued by the Treasurer under the Act.

the requirements of the Public Finance and Audit Act 1983, the Public Finance and Audit Regulation2015 (the Act); and

Australian Accounting Standards (which include Australian Accounting Interpretations);

2 of 47


Unaudited


Unaudited

Actual

2017 2017 2016 2017 2017 2016

$000 $000 $000 $000 $000 $000


Operating Expenses

----- ----- ----- Employee Related 2 1,074,377 1,076,845 1,069,685

1,049,770 1,051,835 1,009,918 Personnel Services 3 ----- ----- -----





----- ----- 1 Finance Costs 1(g), 7 ----- ----- 1

47,557 47,143 44,458 Payments to Affiliated Health Organisations 8 47,557 47,143 44,458

1,697,583 1,683,949 1,598,554 Total Expenses excluding losses 1,722,190 1,708,959 1,658,321

Revenue

1,265,909 1,250,468 1,252,984 NSW Ministry of Health Recurrent Allocations 1(h) 1,265,909 1,250,468 1,252,984




2,024 5,650 2,339 Investment Revenue 1(h),10 2,024 5,650 2,339


21,980 23,182 23,990 Other Revenue 13 21,980 23,182 23,990

1,826,258 1,802,577 1,687,660 Total Revenue 1,850,865 1,827,587 1,747,427

10,615 ----- (247) Gain / (Loss) on Disposal 14 10,615 ----- (247)

(3,283) (2,658) (1,241) Other Losses 15 (3,283) (2,658) (1,241)

136,007 115,970 87,618 Net Result 32 136,007 115,970 87,618



Net Decrease in Property, Plant & Equipment

(123) ----- (15) Revaluation Surplus 20, 24 (123) ----- (15)

(123) ----- (15) Total Other Comprehensive Income (123) ----- (15)

135,884 115,970 87,603 TOTAL COMPREHENSIVE INCOME 135,884 115,970 87,603




CONSOLIDATIONPARENT

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Unaudited


Unaudited

Actual

2017 2017 2016 2017 2017 2016

$000 $000 $000 $000 $000 $000

ASSETS

Current Assets


96,118 77,539 68,462 Receivables 18 96,118 77,539 68,462

21,021 21,054 20,694 Inventories 19 21,021 21,054 20,694

197,461 164,878 184,977 197,461 164,878 184,977

745 ----- ----- Non-Current Assets Held for Sale 23 745 ----- -----


Non-Current Assets


1,174,039 1,211,956 1,062,813 - Land and Buildings 20 1,174,039 1,211,956 1,062,813



1,343,605 1,349,030 1,204,697 Total Property, Plant & Equipment 1,343,605 1,349,030 1,204,697

120 139 162 Intangible Assets 21 120 139 162

44,192 42,192 40,272 Other 22 44,192 42,192 40,272

1,387,917 1,391,361 1,245,131 Total Non-Current Assets 1,387,917 1,391,361 1,245,131

1,586,123 1,556,239 1,430,108 Total Assets 1,586,123 1,556,239 1,430,108

LIABILITIES

Current Liabilities

112,939 105,225 102,139 Payables 26 112,939 105,225 102,139

176,679 172,690 170,143 Provisions 27 176,679 172,690 170,143

4,252 23,785 19,245 Other 28 4,252 23,785 19,245



1,973 1,973 1,985 Provisions 27 1,973 1,973 1,985

26,511 8,711 8,711 Other 28 26,511 8,711 8,711

28,484 10,684 10,696 Total Non-Current Liabilities 28,484 10,684 10,696


1,263,769 1,243,855 1,127,885 Net Assets 1,263,769 1,243,855 1,127,885

EQUITY

137,213 138,141 138,141 Reserves 137,213 138,141 138,141

1,126,556 1,105,714 989,744 Accumulated Funds 1,126,556 1,105,714 989,744

1,263,769 1,243,855 1,127,885 Total Equity 1,263,769 1,243,855 1,127,885


CONSOLIDATIONPARENT

South Eastern Sydney Local Health DistrictStatement of Financial Position as at 30 June 2017

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Funds Surplus

$000 $000 $000

Balance at 1 July 2016 989,744 138,141 1,127,885



Net Increase/(Decrease) in Property, Plant & Equipment, and Emerging Assets 20, 24 ----- (123) (123)



Total Other Comprehensive Income 805 (928) (123)

Total Comprehensive Income for the year 136,812 (928) 135,884 Balance at 30 June 2017 1,126,556 137,213 1,263,769

Balance at 1 July 2015 902,116 138,166 1,040,282



Net Increase/(Decrease) in Property, Plant & Equipment, and Emerging Assets 20, 24 ----- (15) (15)



Total Other Comprehensive Income 10 (25) (15)

Total Comprehensive Income for the year 87,628 (25) 87,603 Balance at 30 June 2016 989,744 138,141 1,127,885




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Unaudited


Unaudited

Actual

2017 2017 2016 2017 2017 2016

$000 $000 $000 $000 $000 $000


Payments

----- ----- ----- Employee Related (1,058,338) (1,065,294) (1,027,057)


(1,604,061) (1,613,338) (1,571,574) Other (545,723) (548,044) (544,517)

(1,675,373) (1,683,418) (1,639,259) Total Payments (1,675,373) (1,683,418) (1,639,259)

Receipts

1,265,909 1,250,468 1,252,984 NSW Ministry of Health Recurrent Allocations 1,265,909 1,250,468 1,252,984




2,024 125 2,339 Interest Received 2,024 125 2,339


37,658 76,640 52,079 Other 37,658 76,640 52,079

1,869,740 1,878,397 1,778,125 Total Receipts 1,869,740 1,878,397 1,778,125



15,274 ----- 197 Proceeds from Sale of Property, Plant & Equipment and Intangibles 14 15,274 ----- 197




----- ----- (1) Repayment of Borrowings and Advances ----- ----- (1)

----- ----- (1) NET CASH FLOWS FROM FINANCING ACTIVITIES ----- ----- (1)

(15,499) (29,536) (1,733) NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS (15,499) (29,536) (1,733)






CONSOLIDATIONPARENT

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a)

*

*

b)

*

*

*

The SESLHD has the capacity to review timing of subsidy cashflows to ensure that debts can be paid when they become due and payable.

The SESLHD has developed an Efficiency and Improvement Plan (EIP) which identifies revenue improvement and cost saving strategies. Benefits from the EIP are retained by the SESLHD and assist in meeting its overall budget target. The EIP is monitored and evaluated by the Ministry throughout the financial year.


Property, plant and equipment, assets (or disposal groups) held for sale and financial assets at 'fair value through profit and loss' and available for saleare measured at fair value. Other financial statement items are prepared in accordance with the historical cost convention except where specifiedotherwise.



The parent entity, comprises all the operating activities of the Hospital Facilities and the Community Health Centres under its control. It also encompasses the Restricted Assets (as disclosed in notes 16 and 25), which, while containing assets which are restricted for specified uses by the grantor or the donor, are nevertheless controlled by the parent entity.

The South Eastern Sydney Local Health District Special Purpose Service Entity which was established as a Division of the SESLHD on 1 January 2011 in accordance with the Health Services Act 1997. This Division provides personnel services to enable the SESLHD to exercise its functions.

The SESLHD, as a reporting entity, comprises all the entities under its control, namely:


The South Eastern Sydney Local Health District (the SESLHD) was established under the provisions of the Health Services Act 1997 with effect from1 January 2011.





The SESLHD's financial statements are general purpose financial statements which have been prepared on an accrual basis and in accordance withapplicable Australian Accounting Standards (which include Australian Accounting Interpretations), the requirements of the Health Services Act 1997and its regulations (including observation of the Accounts and Audit Determination for Public Health Organisations), the Public Finance and Audit Act1983 and Public Finance and Audit Regulation 2015 (the Act), and the Financial Reporting Directions issued by the Treasurer under the Act. Thefinancial statements comply with the NSW Treasury mandates circular for NSW General Government Sector Entities. Further information on theadjusted budget figures can be found at Note 1(ah).

As a consequence the values in the financial statements presented herein consist of the parent entity and the consolidated entity which comprises theparent and special purpose service entity. In the process of preparing the consolidated financial statements consisting of the controlling and controlledentities, all inter-entity transactions and balances have been eliminated, and like transactions and other events are accounted for using uniformaccounting policies.

SESLHD is a NSW Government entity and is controlled by the NSW Ministry of Health, which is the immediate parent. The reporting entity is alsocontrolled by the State of New South Wales (and is consolidated as part of the NSW Total State Sector Accounts), which is the ultimate parent. Thereporting entity is a not-for-profit entity (as profit is not its principal objective).

These consolidated financial statements for the year ended 30 June 2017 have been authorised for issue by the Chief Executive on 8 September2017.

The financial statements of the SESLHD have been prepared on a going concern basis.

The Secretary of Health, the Chair of the South Eastern Sydney Local Health District Board and the Chief Executive, through the Service Agreementhave agreed to service and funding levels for the forward financial year. The Service Agreement sets out the level of financial resources for publichealth services under the SESLHD's control and the source of these funds. By agreement, the Service Agreement requires local management tocontrol its financial liquidity and in particular meet benchmarks for the payment of creditors. Where the SESLHD fails to meet Service Agreementperformance standards, the Ministry of Health as the state manager can take action in accordance with annual performance framework requirements,including financial support and increased management interaction by the Ministry.


7 of 47





c)

d)

e)

i)

ii)

iii)

iv)

f)

g)

Other provisions exist when the SESLHD has a present legal or constructive obligation as a result of a past event; it is probable that an outflow of resources will be required to settle the obligation; and a reliable estimate can be made of the amount of the obligation.


Insurance

Finance Costs



Except when an Australian Accounting Standard permits or requires otherwise, comparative information is disclosed in respect of the previous periodfor all amounts reported in the financial statements.




The SESLHD's insurance activities are conducted through the NSW Treasury Managed Fund (TMF) Scheme of self insurance for government entities.The expense (premium) is determined by the Fund Manager based on past claims experience.The TMF is managed by Insurance and Care NSW(iCare), a controlled entity of the ultimate parent.



Other Provisions

Salaries and wages (including non-monetary benefits) and paid sick leave that are expected to be settled wholly within 12 months after the end of the period in which the employees render the service are recognised and measured at the undiscounted amounts of the benefits.

Annual leave is not expected to be settled wholly before twelve months after the end of the annual reporting period in which the employees render the related service. As such, it is required to be measured at present value in accordance with AASB 119 Employee Benefits (although short-cut methods are permitted).

Actuarial advice obtained by NSW Treasury, a controlled entity of the ultimate parent, has confirmed that using the nominal annual leave balance plus the annual leave entitlements accrued while taking annual leave can be used to approximate the present value of the annual leave liability. On-costs of 17.2% are applied to the value of leave payable at 30 June 2017 (comparable on-costs for 30 June 2016 were 16.7%).The SESLHD has assessed the actuarial advice based on the SESLHD’s circumstances and has determined that the effect of discounting is immaterial to annual leave.


The SESLHD's liability for Long Service Leave and defined benefit superannuation (State Authorities Superannuation Scheme and State Superannuation Scheme) are assumed by the Crown Entity, which is a controlled entity of the ultimate parent.

The SESLHD accounts for the liability as having been extinguished resulting in the amount assumed being shown as part of the non-monetary revenue item described as 'Acceptance by the Crown Entity of employee benefits'.

Specific on-costs relating to Long Service Leave assumed by the Crown Entity are borne by the SESLHD as shown in Note 27.

Long Service Leave is measured at present value in accordance with AASB 119, Employee Benefits. This is based on the application of certain factors (specified in NSW Treasury Circular 15/09) to employees with five or more years of service, using current rates of pay. These factors were determined based on an actuarial review to approximate present value.

The superannuation expense for the reporting period is determined by using the formulae specified in the Treasurer’s Directions. The expense for certain superannuation schemes (i.e. Basic Benefit and First State Super) is calculated as a percentage of the employee's salary. For other superannuation schemes (i.e. State Superannuation Scheme and State Authorities Superannuation Scheme), the expense is calculated as a multiple of the employee's superannuation contributions.


8 of 47





h)


*

*





a monthly charge raised by the SESLHD based on a percentage of receipts generated.

the residual of the Private Practice Trust Fund at the end of each financial year, such sum being credited for the SESLHD use in the advancement of the SESLHD or individuals within it.




Revenue from the sale of goods is recognised as revenue when the SESLHD transfers the significant risks and rewards of ownership of the assets.




Patient Fees


An agreement is in place with the Commonwealth Department of Veterans' Affairs through which direct funding is provided for the provision of healthservices to entitled veterans. For inpatient services, revenue is recognised by the SESLHD on an accrual basis by reference to patient admissions.Non admitted patients are recognised by the Ministry of Health in the form of a block grant.


Specialist doctors with rights of private practice are subject to an infrastructure charge (fee) for the use of hospital facilities at rates determined by theNSW Ministry of Health. Charges consist of two components:

The SESLHD uses a number of facilities owned and maintained by the local authorities in the area to deliver community health services for which nocharges are raised by the authorities.

Income Recognition

Sale of Goods


Investment Revenue

A bulk billing agreement exists in which motor vehicle insurers effect payment directly to NSW Health for the hospital costs for those personshospitalised or attending for inpatient treatment as a result of motor vehicle accidents. The SESLHD recognises the revenue on an accruals basis fromthe time the patient is treated or admitted into hospital.


Debt Forgiveness

Grants and contributions are recognised as revenues when the SESLHD obtains control over the assets comprising the contributions. Control overcontributions is normally obtained upon the receipt of cash.

9 of 47





i)

*

*

j)

k)

l)



Land and buildings are owned by the Health Administration Corporation, an entity controlled by the immediate parent. Land and buildings which areoperated/occupied by the SESLHD are deemed to be controlled by the SESLHD and are reflected as such in the financial statements.





Where payment for an asset is deferred beyond normal credit terms, its cost is the cash price equivalent, i.e. the deferred payment amount iseffectively discounted over the period of credit.


Refer to Note 1(ae) for assets transferred as a result of equity transfer.

Most assets assets are acquired from Health Administration Corporation, a controlled entity of the immediate parent.

amount of GST incurred by the SESLHD as a purchaser that is not recoverable from the Australian Taxation Office is recognised as part of an asset's cost of acquisition or as part of an item of expense; and




Payments are made by the immediate parent on the basis of the allocation for the SESLHD as adjusted for approved supplementations mostly forsalary agreements and approved enhancement projects.

This allocation is included in the Statement of Comprehensive Income before arriving at the "Net Result" on the basis that the allocation is earned inreturn for the health services provided on behalf of the Ministry. Allocations are normally recognised upon the receipt of cash.


General operating expenses/revenues of Calvary Health Care Sydney, War Memorial Hospital Waverley and Eastern Sydney SCARBA Centre haveonly been included in the Statement of Comprehensive Income prepared to the extent of the cash payments made to the Health Organisationsconcerned. The SESLHD is not deemed to own or control the various assets/liabilities of the aforementioned Health Organisations and such amountshave been excluded from the Statement of Financial Position. Any exceptions are specifically listed in the notes that follow.



10 of 47






2017 2016

2.5% 2.5%

2.5% 2.5%

Plant and Equipment

20% 20%

10% 10%

12.5% 12.5%

5% 5%

12.5% 12.5%

20% 20%

10% 10%

10% 10%

10% 10%


Intangibles



- Office Equipment


Depreciation is provided for on a straight-line basis for all depreciable assets so as to write off the depreciable amount of each asset as it is consumedover its useful life to the SESLHD. Land is not a depreciable asset. All material identifiable components of assets are depreciated over their usefullives.

To ensure that the carrying amount for each asset does not differ materially from its fair value at reporting date, indices are sourced. The indicesreflect an assessment of movements made in the period between revaluations and are applied when a class of asset has a movement of 10% ormore.

Non-specialised assets with short useful lives are measured at depreciated historical cost, as an approximation of fair value. The entity has assessedthat any difference between fair value and depreciated historical cost is unlikely to be material.


Buildings

Physical non-current assets are valued in accordance with the 'Valuation of Physical Non-Current Assets at Fair Value' Policy and Guidelines Paper(TPP 14-01). This policy adopts fair value in accordance with AASB 13 Fair Value Measurement, AASB 116 Property, Plant and Equipment andAASB 140 Investment Property.


Investment property is separately discussed at Note 1(s).

Property, plant and equipment is measured at the highest and best use by market participants that is physically possible, legally permissible andfinancially feasible. The highest and best use must be available at a period that is not remote and takes into account the characteristics of the assetbeing measured, including any socio-political restrictions imposed by government. In most cases, after taking into account these considerations, thehighest and best use is the existing use. In limited circumstances, the highest and best use may be a feasible alternative use, where there are norestrictions on use or where there is a feasible higher restricted alternative use.










For other assets valued using other valuation techniques, any balances of accumulated depreciation existing at the revaluation date in respect of thoseassets are credited to the asset accounts to which they relate. The net asset accounts are then increased or decreased by the revaluation incrementsor decrements.

11 of 47






p) Assets Not Able to be Reliably Measured

q) Restoration Costs

r) Non-Current Assets (or disposal groups) Held for Sale

s) Investment Properties

t) Intangible Assets

Where an asset is acquired at no or nominal cost, the cost is its fair value as at the date of acquisition. All research costs are expensed.Development costs are only capitalised when certain criteria are met.


The SESLHD does not have any property that meets the definition of Investment Property.

The SESLHD recognises intangible assets only if it is probable that future economic benefits will flow to the SESLHD and the cost of the asset can bemeasured reliably. Intangible assets are measured initially at cost.

The SESLHD has certain non-current assets (or disposal groups) classified as held for sale, where their carrying amount will be recovered principallythrough a sale transaction, not through continuing use.

Non-current assets (or disposal groups) held for sale are recognised at the lower of carrying amount and fair value less costs of disposal. Theseassets are not depreciated while they are classified as held for sale.

Investment property is held to earn rentals or for capital appreciation, or both. However, for not-for-profit entities, property held to meet service deliveryobjectives rather than to earn rental or for capital appreciation does not meet the definition of investment property and is accounted for under AASB116, Property, Plant and Equipment.

Computer software developed or acquired by the SESLHD are recognised as intangible assets and are amortised over four years using the straightline method based on the useful life of the asset for both internally developed assets and direct acquisitions. Most computer software is acquired fromthe Health Administration Corporation, a controlled entity of the parent.



The SESLHD holds certain assets that are not recognised in the Statement of Financial Position because the SESLHD is unable to measure reliablythe value of the assets and those assets are unlikely to be material.

The SESLHD holds a unique collection of pathology specimens of which their normal place of residence is at Sydney Hospital. Parts of the collectionare currently on loan to a range of associated educational and health institutions.


Revaluation increments are credited directly to the revaluation surplus, except that, to the extent that an increment reverses a revaluation decrementin respect of that class of asset previously recognised as an expense in the net result, the increment is recognised immediately as revenue in the netresult.

Revaluation decrements are recognised immediately as expenses in the net result for the year, except that, to the extent that a credit balance exists inthe revaluation surplus in respect of the same class of assets, they are debited directly to the revaluation surplus.

Intangible assets are subsequently measured at fair value only if there is an active market. As there is no active market for the SESLHD's intangibleassets, the assets are carried at cost less any accumulated amortisation and impairment losses.

Intangible assets are tested for impairment where an indicator of impairment exists. If the recoverable amount is less than its carrying amount thecarrying amount is reduced to recoverable amount and the reduction is recognised as an impairment loss.

As a not-for-profit entity with no cash generating units, impairment under AASB 136 Impairment of Assets is unlikely to arise. As property, plant andequipment is carried at fair value or an amount that approximates fair value, impairment can only arise in the rare circumstances such as where thecosts of disposal are material. Specifically, impairment is unlikely for not-for-profit entities given that AASB 136 modifies the recoverable amount testfor non-cash generating assets of not-for-profit entities to the higher of fair value less costs of disposal and depreciated replacement cost, wheredepreciated replacement cost is also fair value.

12 of 47





u) Maintenance

v) Leased Assets

w) Inventories

x) Loans and Receivables

y) Cash Investments

*

*

*

T Corp Hour-Glass Investment facilities are managed by New South Wales Treasury Corporation, a controlled entity of the ultimate parent. The facilities are designated at fair value through profit or loss as the management and performance of these financial assets is undertaken on a fair value basis, in accordance with a documented risk management strategy. Information about these assets is provided internally to the SESLHD's key management personnel.

The SESLHD subsequently measures investments classified as 'held for trading' or designated upon initial recognition “at fair value through profit or loss” at fair value.

Financial assets are classified as 'held for trading' if they are acquired for the purpose of selling in the near term. Derivatives are also classified as held for trading. Gains or losses on these assets are recognised in the net result for the year.


Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. These financialassets are recognised initially at fair value. Subsequent measurement is at amortised cost using the effective interest method, less an allowance forany impairment of receivables. Any changes are recognised in the Net Result when impaired, derecognised or through the amortisation process.


Investments are initially recognised at fair value plus, in the case of investments not at fair value through profit or loss, transaction costs. The SESLHDdetermines the classification of its financial assets after initial recognition and, when allowed and appropriate, re-evaluates this at each financial yearend.


The movement in the fair value of the T Corp Hour-Glass Investment facilities incorporates distributions received as well as unrealised movements in fair value and is reported in the line item ‘investment revenue’.

Held-to-maturity investments – Non-derivative financial assets with fixed or determinable payments and fixed maturity that the SESLHD has the positive intention and ability to hold to maturity are classified as 'held-to-maturity'.

These investments are measured at amortised cost using the effective interest method. Changes are recognised in the net result for the year when impaired, derecognised or through the amortisation process.

The risk management strategy of the SESLHD has been developed consistent with the investment powers granted under the provision of the Public Authorities (Financial Arrangements) Act.

T Corp Hour-Glass investments are made in an effort to improve interest returns on cash balances otherwise available whilst also providing secure investments.



Where a non-current asset is acquired by means of a finance lease, at the commencement of the lease term, the asset is recognised at its fair valueor, if lower, the present value of the minimum lease payments, at the inception of the lease. The corresponding liability is established at the sameamount. Lease payments are allocated between the principal component and the interest expense.


Day-to-day servicing costs or maintenance are charged as expenses as incurred except where they relate to the replacement of a part or componentof an asset, in which case the costs are capitalised and depreciated.

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z) Impairment of Financial Assets

aa) De-recognition of Financial Assets and Financial Liabilities

*

*

ab) Payables

ac) Borrowings

ad) Fair Value Hierarchy

*

*

*

These amounts represent liabilities for goods and services provided to the SESLHD and other amounts. Payables are recognised initially at fair value.

Subsequent measurement is at amortised cost using the effective interest method. Short-term payables with no stated interest rate are measured atthe original invoice amount where the effect of discounting is immaterial.




where the SESLHD has not transferred substantially all the risks and rewards, if the SESLHD has not retained control.

A financial asset is derecognised when the contractual rights to the cash flows from the financial assets expire; or if the SESLHD transfers the financialasset:


Any reversals of impairment losses are reversed through the net result for the year, where there is objective evidence, except reversals of impairmentlosses on an investment in an equity instrument classified as “available for sale”, must be made through the reserve. Reversals of impairment losses of financial assets carried at amortised cost cannot result in a carrying amount that exceeds what the carrying amount would have been had there notbeen an impairment loss.

Payables are recognised for amounts to be paid in the future for goods and services received, whether or not billed to the SESLHD.

Loans are not held for trading or designated at fair value through profit or loss and are recognised at amortised cost using the effective interest ratemethod. Gains or losses are recognised in the net result for the year on derecognition.

Purchases or sales of investments under contract that require delivery of the asset within the timeframe established by convention or regulation arerecognised on the trade date; i.e. the date the SESLHD commits to purchase or sell the asset.

The SESLHD recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.



A number of the SESLHD’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets andliabilities. When measuring fair value, the valuation technique used maximises the use of relevant observable inputs and minimises the use ofunobservable inputs. Under AASB 13 Fair Value Measurement, the SESLHD categorises, for disclosure purposes, the valuation techniques based onthe inputs used in the valuation techniques as follows:

Where the SESLHD has neither transferred nor retained substantially all the risks and rewards or transferred control, the asset is recognised to theextent of the SESLHD's continuing involvement in the asset.



All financial assets, except those measured at fair value through profit and loss, are subject to an annual review for impairment. An allowance forimpairment is established when there is objective evidence that the entity will not be able to collect all amounts due.

For financial assets carried at amortised cost, the amount of the allowance is the difference between the asset’s carrying amount and the presentvalue of estimated future cash flows, discounted at the effective interest rate. The amount of the impairment loss is recognised in the net result for theyear.

When an available for sale financial asset is impaired, the amount of the cumulative loss is removed from equity and recognised in the net result forthe year, based on the difference between the acquisition cost (net of any principal repayment and amortisation) and current fair value, less anyimpairment loss previously recognised in the net result for the year.

14 of 47





ae) Equity Transfers

af) Equity and Reserves

(i)

(ii)

(iii)

ag) Trust Funds

ah) Adjusted Budgeted Amounts

ai) Emerging Asset

All other equity transfers are recognised at fair value, except for intangibles. Where an intangible has been recognised at (amortised) cost by thetransferor because there is no active market, the SESLHD recognises the asset at the transferor's carrying amount. Where the transferor is prohibitedfrom recognising internally generated intangibles, the SESLHD does not recognise that asset.


Accumulated FundsThe category "accumulated funds" includes all current and prior period retained funds.

Revaluation SurplusThe revaluation surplus is used to record increments and decrements on the revaluation of non-current assets. This accords with the SESLHD's policy on the revaluation of non-current assets as discussed in Note 1(n).

Separate Reserves

Separate reserve accounts are recognised in the financial statements only if such accounts are required by specific legislation or Australian Accounting Standards.

The SESLHD receives monies in a trustee capacity for various trusts as set out in Note 30.

The SESLHD's emerging interest in the St George (STG), Sydney (SYD) and Prince of Wales (POW) Hospital Car Parks has been valued inaccordance with the Ministry of Health's policy for Accounting for Privately Financed Projects. This policy required the SESLHD to initially determinethe estimated written down replacement cost by reference to the project's historical cost escalated by a construction index and the asset's estimatedworking life. The estimated written down replacement cost was then allocated on a systematic basis over the concession period of 25 years using theannuity method and the Government Bond rate of 6.61% (STG), 9.47% (SYD) & 7.23% (POW) at commencement of the concession period.


As the SESLHD performs only a custodial role in respect of these monies, and because the monies cannot be used for the achievement of theSESLHD's own objectives, these funds are not recognised in the financial statements.

NSW Health's budget is shown at a consolidated level when presented in parliament each year (i.e. in the NSW Government Budget Papers). TheSESLHD's budget is not presented in parliament, therefore AASB 1055 Budgetary Reporting is not applicable. Unlike the requirement in AASB 1055‘Budgetary Reporting’ to present original budget information, the SESLHD's financial statements present adjusted budget information.The adjustedbudgeted amounts are drawn from the initial Service Agreements between the SESLHD and the NSW Ministry of Health at the beginning of thefinancial year, as well as any adjustments for the effects of additional supplementation provided in accordance with delegations to derive a final budgetat year end (i.e. adjusted budget). The budget amounts are not subject to audit and, accordingly, the relevant column entries in the financialstatements are denoted as "Unaudited".

Major variances between the original budgeted amounts and the actual amounts disclosed in the primary financial statements are explained in Note36.

15 of 47





aj) Changes in Accounting Policy, including new or revised Australian Accounting Standards

(i)

(ii)

NSW public sector entities are not permitted to early adopt new Australian Accounting Standards, unless NSW Treasury determines otherwise. The following new Australian Accounting Standards, excluding standards not considered applicable or material to NSW Health, have not been applied and are not yet effective. The possible impact of these Standards in the period of initial application includes:



The accounting policies applied in 2016-17 are consistent with those of the previous financial year except as a result of new or revised Australian Accounting Standards that have been applied for the first time as follows:

AASB 16 Leases applies to annual periods beginning on or after 1 January 2019. The standard introduces a new approach to lease accounting that requires a lessee to recognise assets and liabilities for the rights and obligations created by leases. The application of this standard will likely have a significant transitional impact as all leases, except short term (<12 months) and low value leases, will need to be brought on to the balance sheet.

AASB 1058 Income of Not-for-Profit Entities applies to not-for-profit entities and is effective for annual periods beginning on or after 1 January 2019. This standard requires entities to recognise income where the consideration to acquire an asset, including cash, is significantly less than the fair value principally to enable the entity to further its objectives. Under this standard, the timing of income recognition may be impacted depending on whether there is a liability or other performance obligation associated with the acquired asset, including cash.

AASB 1058 also requires government agencies to recognise income for volunteer services received if the fair value of those services can be measured reliably and the services would have been purchased if they had not been donated. This is consistent with current practice under AASB 1004 Contributions and is not expected to materially impact the financial statements.




AASB 2016-2 Amendments to Australian Accounting Standards - Disclosure Initiative: Amendments to AASB 107 applies to annual periods beginning on or after 1 January 2017. The standard amends AASB 107 Statement of Cash Flows to require additional disclosures regarding financing activities in the Statement of Cash Flows. The change is not expected to materially impact the financial statements.

AASB 9 Financial Instruments and AASB 2014-7 Amendments to Australian Accounting Standards arising from AASB 9 are applicable for reporting period on or after 1 January 2018. AASB 9 will replace AASB 139 Financial Instruments: Recognition and Measurement and establishes new principles for the financial reporting of financial assets, financial liabilities and hedge accounting. AASB 9 also introduces a forward-looking 'expected credit losses' impairment model, which may significantly impact the timing and amount of impairment recognition.

16 of 47


2017 2016 2017 2016

$000 $000 $000 $000

2. Employee Related





----- ----- Redundancies 2,828 5,996



----- ----- 1,074,377 1,069,685




(150) 3,168 Long Service Leave ----- -----

2,828 5,996 Redundancies ----- -----



1,049,770 1,009,918 ----- -----





3,022 2,972 Consultancies 3,022 2,972

103 10 Contractors 103 10


93,059 88,219 Drug Supplies 93,059 88,219

27,774 24,408 Food Supplies 27,774 24,408




1,543 1,704 Insurance 1,543 1,704







3,772 3,769 Rental 3,772 3,769

1,221 1,096

Hosted Services Purchased from entities controlled by the immediate parent 1,221 1,096

57,724 60,706 Special Service Departments (Pathology, Dental, Radiology) 57,724 60,706



37,828 33,256 Other (See 4(a) below) 37,828 33,256

450,772 427,155 450,772 427,155




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2017 2016 2017 2016

$000 $000 $000 $000


a) Other Includes:



1,164 968 Courier and Freight 1,164 968









37,828 33,256 37,828 33,256





(2,135) (2,384) Other (2,135) (2,384)

33,966 32,807 33,966 32,807

4,597 4,605 4,597 4,605

38,563 37,412 38,563 37,412







Auditor's Remuneration' was paid to The Audit Office of New South Wales, an entity controlled by the ultimate parent.

Hospital Ambulance Transport Costs' were paid to Health Administration Corporation, which is an entity controlled by the immediate parent.

The majority of 'Information Management Expenses' were paid to Health Administration Corporation, an entity controlled by the immediate parent.


Some 'Rental' and 'Staff Related costs' expenses were paid to entities controlled by the immediate parent.

Some 'Legal expenses' were paid to the Crown Solicitors Office, an entity controlled by the ultimate parent.

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2017 2016 2017 2016

$000 $000 $000 $000






53,975 53,174 53,975 53,174



1,234 409 Grants to Research Organisations 1,234 409

----- (215) Grants paid to entities controlled by the ultimate parent ----- (215)

30,187 385 Grants paid to entities controlled by the immediate parent 30,187 385

1,801 1,572 Other Grants 1,801 1,572

45,654 14,332 45,654 14,332

7. Finance Costs

----- 1 Other Interest Charges ----- 1

----- 1 ----- 1


Recurrent Sourced

29,583 28,051 Calvary Health Care Sydney 29,583 28,051

16,610 15,077 War Memorial Hospital Waverley 16,610 15,077

1,364 1,330 Eastern Sydney SCARBA Centre 1,364 1,330

47,557 44,458 47,557 44,458




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2017 2016 2017 2016

$000 $000 $000 $000





187 279 Other 187 279


Patient Fees

102,909 96,901 - Inpatient Fees 102,909 96,901







1,824 1,876 Car Parking 1,824 1,876

1,089 1,070 Child Care Fees 1,089 1,070

81 (137) Clinical Services (excluding Clinical Drug Trials) 81 (137)

5,877 7,747 Commercial Activities 5,877 7,747

22 11 Enteral Nutrition 22 11


4 3 Information Retrieval 4 3


13,547 13,635 State Insurance Regulatory Authority Third Party 13,547 13,635


536 607 Salary Packaging Fee 536 607 4,086 3,920 Hosted Services Provided to entities controlled by immediate parent 4,086 3,920

2,205 3,926 Services Provided to Non NSW Health Organisations 2,205 3,926

7,308 6,960 Shared Corporate Services 7,308 6,960

149 115 Multi Purpose Service Centre Fees 149 115

259 228 Other 259 228

275,351 258,459 275,351 258,459


113 208 Interest 113 208

T Corp Hour Glass Cash Investment Facilities Designated at Fair Value

1,911 2,131 through Profit or Loss 1,911 2,131

2,024 2,339 2,024 2,339




The majority of 'Commercial Activities' revenue was earned from entities controlled by the immediate parent.

The majority of 'Shared Corporate Services' and 'Patient Transport Fees' revenue was earned from entities controlled by the immediate parent.

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2017 2016 2017 2016

$000 $000 $000 $000


4,642 1,403 Clinical Drug Trials 4,642 1,403



9,631 9,797 Cancer Institute Grants 9,631 9,797


13,410 13,825 Grants received from entities controlled by the immediate parent 13,410 13,825

1,826 1,582 Research Grants 1,826 1,582

2,339 2,368 Other Grants 2,339 2,368

66,872 52,979 66,872 52,979





----- ----- 24,607 59,767

13. Other Revenue




53 126 Discounts received 53 126

14 272 Insurance Refunds 14 272

7,401 7,841 Lease and Rental* 7,401 7,841




9,064 8,335 Other 9,064 8,335

21,980 23,990 21,980 23,990

*Some 'Lease and Rental' revenue was received from entities controlled by the immediate parent.

The majority of grants that were received from entities controlled by the ultimate parent were received from the Department of Family and Community Services.

The majority of grants that were received from entities controlled by the immediate parent were received from the immediate parent.





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2017 2016 2017 2016

$000 $000 $000 $000







4,659 444 Written Down Value 4,659 444

15,274 197 Proceeds from Disposal 15,274 197

Gain/(Loss) on Disposal of10,615 (247) Property, Plant and Equipment 10,615 (247)

15. Other Losses

(3,283) (1,241) Impairment of Receivables (3,283) (1,241)

(3,283) (1,241) (3,283) (1,241)

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Purchase of Health Promotion, Total


Research

$000 $000 $000

----- 17,900 17,900

3,041 65,866 68,907








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PARENT

2017 2016 2017 2016

$000 $000 $000 $000



75,257 78,346 Short Term Deposits - T Corp Hour-Glass Cash Fund 75,257 78,346

80,322 95,821 80,322 95,821

Details regarding restricted financial assets pertaining to Short Term Deposits are disclosed in Note 25.






CONSOLIDATION




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2017 2016 2017 2016

$000 $000 $000 $000

18. Receivables

Current




4,022 5,940 Other Debtors 4,022 5,940

97,932 69,482 Sub Total 97,932 69,482

(6,578) (5,787) Less Allowance for Impairment (6,578) (5,787)

91,354 63,695 Sub Total 91,354 63,695

4,764 4,767 Prepayments 4,764 4,767

96,118 68,462 96,118 68,462



(5,407) (4,937) Balance at Commencement of Reporting Period (5,407) (4,937)

2,212 764 Amounts written off during the period 2,212 764


(3,260) (1,234) the Net Result (3,260) (1,234)

(6,455) (5,407) Balance at 30 June (6,455) (5,407)


Other Debtors




(23) (7) the Net Result (23) (7)

(123) (380) Balance at 30 June (123) (380)

(6,578) (5,787) (6,578) (5,787)

c) The sale of goods and services balances above include the following patient fee receivables:

1,216 1,177 Patient Fees - Compensable 1,216 1,177

8,827 8,963 Patient Fees - Ineligible 8,827 8,963


26,896 24,981 26,896 24,981





Intra Health Receivables' include amounts receivable from the immediate parent and entities controlled by the immediate parent. The majority of the balance at reporting date was receivable from the Sydney Children's Hospital Network, Illawarra Shoalhaven Local Health District, Health Administration Corporation, and the immediate parent.

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2017 2016 2017 2016

$000 $000 $000 $000

19. Inventories

8,027 9,368 Drugs 8,027 9,368


7 12 Food and Hotel Supplies 7 12

21,021 20,694 21,021 20,694




26 of 47


2017 2016 2017 2016

$000 $000 $000 $000



1,956,427 1,810,964 Gross Carrying Amount 1,956,427 1,810,964












1,343,605 1,204,697 At Net Carrying Amount 1,343,605 1,204,697





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Equipment Systems

$000 $000 $000 $000 $000

2017

Net carrying amount at start of year 193,849 868,964 74,963 66,921 1,204,697

Additions ----- 197,039 29,454 100 226,593

Recognition of Assets Held for Sale (745) ----- ----- ----- (745)

Disposals (3,400) (501) (758) ----- (4,659)

----- (29,500) 1,171 ----- (28,329)



Net carrying amount at end of year 189,704 984,335 106,659 62,907 1,343,605


Equipment Systems

$000 $000 $000 $000 $000

2016

Net carrying amount at start of year 193,849 783,959 72,389 71,036 1,121,233

Additions ----- 124,322 11,737 ----- 136,059

Disposals ----- (9) (435) ----- (444)

----- ----- 985 ----- 985



Net carrying amount at end of year 193,849 868,964 74,963 66,921 1,204,697

(iii) The following table details the indices for Land, Buildings and Infrastructure Systems as determined by CBRE Valuations Pty Ltd :

Year

Land Buildings Infrastructure Systems

2015/16 2 - 4% 3% 3%

2016/17 3 - 6% 3.3% 3.3%

(i) Land and Buildings include land owned by the Health Administration Corporation but controlled by the SESLHD [see note 1(k)].

(ii) Indices provided by CBRE Valuations Pty Ltd were not applied as as they were deemed immaterial.



The majority of 'Transfers within NSW Health Entities through Statement of Comprehensive Income' related to Levels 7-9 of the Bright Building transferred to the Sydney Children's Hospital Network, an entity controlled by the immediate parent.



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2017 2016 2017 2016

$000 $000 $000 $000


Intangibles

484 503 Cost (Gross Carrying Amount) 484 503

364 341 Less Accumulated Amortisation and Impairment 364 341



162 162

(38) (38)

181 181

19 19

Total

$000 $000

Intangibles

(23)

120

(23)

120

(19)

Total

$000

162

2016













162

(19)

Intangibles

$000

2017

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2017 2016 2017 2016

$000 $000 $000 $000

22. Other Assets

Non-Current

44,192 40,272 Emerging Rights to Assets (refer Note 1(ai)) 44,192 40,272

44,192 40,272 44,192 40,272


Assets Held for Sale

745 ----- Land and Buildings 745 -----

745 ----- 745 -----

The non-current assets held for sale constitute assets that are surplus to requirements and are actively marketed within a sale program which has been initiated and is expected to locate a buyer and complete the sale in the next twelve months.

Transport for NSW, an entity controlled by the ultimate parent, will be compulsorily acquiring 600 square metres of the Langton Centre car park within the next twelve months for the Sydney Light Rail project.




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$000 $000 $000 $000




Other Assets (Note 22) Emerging Assets ----- ----- 44,192 44,192

----- 745 ----- 745

----- 36,218 841,295 877,513




$000 $000 $000 $000





----- 39,634 875,296 914,930




For land, buildings, infrastructure systems, and other assets the SESLHD obtains external valuations by independent valuers at least every three years. The last revaluation was performed by CBRE Valuations Pty Ltd for the 2014/15 financial year. CBRE Valuations Pty Ltd is an independent entity and is not an associated entity of the SESLHD.

At the end of each reporting period a fair value assessment is made on any movements since the last revaluation, and a determination as to whether any adjustments need to be made. These adjustments are made by way of application of indices refer, note 20 reconcilation.







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Non-Current Assets Held for Sale is a non-recurring item that is measured at fair value less cost to sell, which is less than its carrying amount. These assets are categorised as level 2.

For buildings, infrastructure, and other assets, many assets are of a specialised nature or use, and thus the most appropriate valuation method is depreciated replacement cost. These assets are included as Level 3 as these assets have a high level of unobservable inputs.



All of the restricted land has been classified as level 3 as, although observable inputs have been used, a significant level of professional judgement is required to adjust inputs in determining the land valuations Certain parcels of land have zoning restrictions, for example hospital grounds, and values are adjusted accordingly.

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2017 OtherAssets

$000 $000 $000 $000

Fair value as at 1 July 2016 768,103 66,921 40,272 875,296

Additions ----- 100 4,043 4,143

Revaluation increments/ decrements recognised in other comprehensive income – included in line item 'Net increase / (decrease) in property, plant and equipment and emerging assets revaluation surplus’

----- ----- (123) (123)

Disposals (501) ----- ----- (501)

Depreciation (33,406) (4,114) ----- (37,520)

Fair value as at 30 June 2017 734,196 62,907 44,192 841,295



$000 $000 $000 $000

Fair value as at 1 July 2015 798,151 71,036 36,514 905,701

Additions ----- ----- 3,772 3,772

Revaluation increments/ decrements recognised in other comprehensive income – included in line item 'Net increase / (decrease) in property, plant and equipment and emerging assets revaluation surplus’ ----- ----- (14) (14)

Transfers to Level 2 3,950 ----- ----- 3,950

Disposals (9) ----- ----- (9)

Depreciation (33,989) (4,115) ----- (38,104)

Fair value as at 30 June 2016 768,103 66,921 40,272 875,296




Land and Buildings


Total Level 3 Recurring

There were no transfers between Level 2 or 3 during the periods.

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2017 2016 2017 2016

$000 $000 $000 $000


Category


16,775 17,254 Research Grants 16,775 17,254


86,807 88,651 86,807 88,651




The SESLHD's financial statements include the following assets which are restricted by externally imposed conditions, eg. donor requirements. The assets are only available for application in accordance with the terms of the donor restrictions.

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2017 2016 2017 2016

$000 $000 $000 $000

26. Payables

Current




48,282 50,782 Creditors 48,282 50,782

Other Creditors


12,337 11,742 - Other 12,337 11,742

112,939 102,139 112,939 102,139






The majority of 'Payables to entities controlled by the immediate parent' relate to balances payable to the immediate parent and Health Administration Corporation, an entity controlled by the immediate parent.

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2017 2016 2017 2016

$000 $000 $000 $000

27. Provisions

Current





2,093 ----- Other 2,093 -----

176,679 170,143 176,679 170,143

Non-Current



1,973 1,985 1,973 1,985



----- ----- Provisions - Non-Current 1,973 1,985



207,460 197,865 207,460 197,865


Current

4,252 19,245 Income in Advance 4,252 19,245

4,252 19,245 4,252 19,245

Non-Current

26,511 8,711 Income in Advance 26,511 8,711

26,511 8,711 26,511 8,711

Income in Advance was derived from the following:

In May 1995 $5.5 million was received as income in advance from International Parking (Sydney) Pty Ltd and AIDC under the terms of contract to provide and operate a car park facility at the Sydney & Sydney Eye Hospitals campus for the 25 years ending May 2020.

In October 1996 $5 million was received as income in advance from HCoA Operations (Australia) Pty Ltd under the terms of contract to provide and operate a private hospital facility at the Prince of Wales Hospital campus for the 40 years ending October 2036.

In June 1997 $18.5 million was received as income in advance from International Parking (Randwick) Pty Ltd under the terms of contract to provide and operate a car park facility at the Prince of Wales Hospital campus for the 25 years ending June 2022.

In June 1999 $4.5 million was received as income in advance from International Parking Pty Ltd under the terms of contract to provide and operate a car park facility at the St George Hospital campus for the 25.5 years ending December 2024.

In the financial years 2014/15, 2015/16 and 2016/17, $23.8M was received as income in advance from the University of New South Wales under terms of the funding agreement for the Bright Alliance building for right of access to two floors for the 40 years ending March 2057.




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2017 2016 2017 2016

$000 $000 $000 $000




----- 22,620 Later than one year and not later than five years ----- 22,620





1,001 354 Later than five years 1,001 354



Aggregate capital expenditure for the acquisition of land and buildings, plant and equipment, infrastructure systems, and intangible assets, contracted for at balance date and not provided for:

The total 'Capital Expenditure Commitments' and 'Operating Lease Commitments' of $97.5M million as at 30 June 2017 includes input tax credits of $8.9M that are expected to be recoverable from the Australian Taxation Office (2016 $31M).


The operating lease commitments above are for motor vehicles, information technology, equipment including personal computers, medical equipment and other equipment.

The majority of 'capital commitments' contracted but not provided for related to capital works overseen by the Health Administration Corporation, an entity controlled by the immediate parent.

Some 'operating lease commitments' contracted but not provided for related to leases with the Department of Finance, Services and Innovation, an entity controlled by the ultimate parent.




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30. Trust Funds

2017 2016 2017 2016 2017 2016 2017 2016

$000 $000 $000 $000 $000 $000 $000 $000

3,243 1,469 241 340 640 432 4,124 2,241

Revenue 1,992 5,759 68 ----- 42,484 38,541 44,544 44,300

Expenses (2,474) (3,985) (30) (99) (42,264) (38,333) (44,768) (42,417)

2,761 3,243 279 241 860 640 3,900 4,124

Trust Funds






The SESLHD holds trust funds of $3.9 million which are held for the safe keeping of patients' monies, deposits on hired items of equipment and Private Practice Trusts.

These funds are excluded from the financial statements as the SESLHD cannot use them for the achievement of its objectives. The following is a summary of the transactions in the trust account.


Deposits

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Workers Compensation Hindsight Adjustment

Treasury Managed Fund normally calculates hindsight premiums each year. However, in regard to workers compensation the final hindsight adjustment for the 2011/12 fund year and an interim adjustment for the 2013/14 fund year were not calculated until 2016/17.

As a result, the 2012/13 final and 2014/15 adjustments pertaining to the hospitals and community services now forming part of the SESLHD will be paid in 2017/18. It is not possible for the SESLHD to reliably quantify the benefit to be received or amount payable.





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2017 2016 2017 2016

$000 $000 $000 $000




(3,283) (1,241) Impairment Expense (3,283) (1,241)

(2,806) (15,148) (Increase)/ Decrease Income in Advance (2,806) (15,148)


37,525 20,517 Increase / (Decrease) in Prepayments and Other Assets 37,525 20,517

(13,017) 15 (Increase)/ Decrease in Payables from Operating Activities (13,017) 15

10,615 (247) Net Gain/ (Loss) on Sale of Property, Plant and Equipment 10,615 (247)

(26,895) 43 Assets donated or brought to account for the first time (26,895) 43

136,007 87,618 Net Result 136,007 87,618


1,505 43 Assets Received by Donation 1,505 43

1,505 43 1,505 43







It is considered impracticable and immaterial to quantify the monetary value of voluntary services provided to the SESLHD. Services provided include:


All money and personal effects of patients which are left in the custody of the SESLHD by any patient who is discharged or dies in the hospital and which are not claimed by the person lawfully entitled thereto within a period of twelve months are recognised as the property of the SESLHD.


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Net Result

$000

1,219,716

18,063

Organ Tissue Donation Service Commonwealth Funding 3,446

S100 Highly Specialised Drugs Co-payment 882

Nurse Midwife Strategy Reserve 812

Adult Public Dental Service - National Partnership Agreement 800

Transitional Research Grant 685

New South Wales Aged Care Assessment Programme 672

Bed Replacement Program 578

Sydney Downing Centre Drug Court 437

Non Government Organisation Grant Drug Summit 436

Integrated Care Programme 400

Workplace Safety & Culture 302

HIV & STI activity 297

National Mental Health Plan for Funding 289

Women & Children Residential Rehabilitation Service at Jarrah House Malabar 252

Whole of Health Program 180

Other Special Projects 1,752

Voluntary Redundancies, July 16 to December 16 2,828

Additional Activity 341

NSW Health Pathology Teaching Staff Costs (2,200)

Transfer National Partnership Dental Service Fund (500)

Balance as per Statement of Comprehensive Income 1,250,468

Award Increases

Special Projects

Other




Movements in the level of the NSW Ministry of Health Recurrent Allocation that have occurred since the time of the initial allocation on 21 Jun 2016 are as follows:


The District received unbudgeted cash assistance of $15M from the immediate parent and made a gain on disposal of $11M on the sale of Primrose House at Dolls Point.

Initial Allocation, 21 Jun 2016

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2017 2016

$000 $000



169,482 154,647


Payables (note 26)** 84,131 96,980

84,131 96,980

Notes


(b) Credit Risk

Cash


N/A


**Excludes statutory payables (i.e. not within scope of AASB7 Financial Instruments Disclosures). In addition Accrued Salaries, Wages and On-Costs are have been excluded as not within the scope of AASB7. Prior year comparatives have been restated as a result.

Credit risk arises when there is the possibility that the counterparty will default on their contractual obligations, resulting in a financial loss to the SESLHD. The maximum exposure to credit risk is generally represented by the carrying amount of the financial assets (net of any allowance for impairment).

Credit risk associated with the SESLHD's financial assets, other than receivables, is managed through the selection of counterparties and establishment of minimum credit rating standards. Authority deposits held with NSW TCorp are guaranteed by the State.

Credit risk arises from financial assets of the SESLHD, including cash, receivables and authority deposits. No collateral is held by the SESLHD. The SESLHD has not granted any financial guarantees.


Category




The SESLHD's principal financial instruments are outlined below. These financial instruments arise directly from the SESLHD's operations or are required to finance its operations. The SESLHD does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.

The SESLHD's main risks arising from financial instruments are outlined below, together with the SESLHD's objectives, policies and processes for measuring and managing risk. Further quantitative and qualitative disclosures are included throughout these financial statements.

The Chief Executive has overall responsibility for the establishment and oversight of risk management and reviews and agrees policies for managing each of these risks. Risk management policies are established to identify and analyse the risks faced by the SESLHD, to set risk limits and controls and to monitor risks. Compliance with policies is reviewed on a continuous basis.

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2017 $000 $000 $000

<3 months overdue 4,772 4,032 740

3 months - 6 months overdue 1,937 872 1,065

> 6 months overdue 7,107 2,334 4,773

2016

<3 months overdue 3,590 2,729 861

3 months - 6 months overdue 1,846 587 1,259

> 6 months overdue 4,557 890 3,667

Notes


Authority Deposits

In addition Patient Fees Compensables are frequently not settled within 6 months of the date of the service provision due to the length of time it takes to settle legal claims. Most of the SESLHD's debtors are health insurance companies or compensation insurers settling claims in respect of inpatient treatments.

The SESLHD is not materially exposed to concentrations of credit risk to a single trade debtor or group of debtors. Based on past experience, debtors that are not past due (2017: $40.9M ; 2016: $29.2M) and not more than 3 months past due (2017: $4M ; 2016: $2.7M) are not considered impaired.



The SESLHD has placed funds on deposit with TCorp, which has been rated 'AAA' by Standard and Poor's. These deposits are similar to money market or bank deposits and can be placed 'at call' or for a fixed term. For fixed term deposits, the interest rate payable by TCorp is negotiated initially and is fixed for the term of the deposit, while the interest rate payable on at call deposits can vary. The deposits at balance date were earning an average interest rate of 2.49% (2016: 2.5%), while over the year the weighted average interest rate was 1.35% (2016: 1.3%) on a weighted average balance during the year of $77.7M (2016: $80.7M). None of these assets are past due or impaired.

All trade debtors are recognised as amounts receivable at balance date. Collectability of trade debtors is reviewed on an ongoing basis. Procedures as established in the NSW Ministry of Health Accounting Manual for Public Health Organisations and Fee Procedures Manual are followed to recover outstanding amounts, including letters of demand. Debts which are known to be uncollectable are written off. An allowance for impairment is raised when there is objective evidence that the SESLHD will not be able to collect all amounts due. This evidence includes past experience and current and expected changes in economic conditions and debtor credit ratings. No interest is earned on trade debtors.

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(c) Liquidity Risk


The SESLHD has exposure to liquidity risk. However, the risk is minimised by the service agreement with the NSW Ministry of Health, as the annual service agreement requires local management to control its financial liquidity and in particular meet benchmarks for the payment of creditors. Where the SESLHD fails to meet service agreement performance standards, the Ministry as the state manager can take action in accordance with annual performance framework requirements, including providing financial support and increased management interaction (refer Note 1(b)).



The SESLHD has negotiated no loan outside of arrangements with the NSW Ministry of Health or Treasury.


Liquidity risk is the risk that the SESLHD will be unable to meet its payment obligations when they fall due. The SESLHD continuously manages risk through monitoring future cash flows and maturities planning to ensure adequate holding of high quality liquid assets. The objective is to maintain a balance between continuity of funding and flexibility through effective management of cash, investments and liquid assets and liabilities.

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Nominal Amount 1 Non - Interest Bearing < 1 Yr

2017 $000 $000 $000Payables: 2,3

- Creditors 60,900 60,900 60,900

60,900 60,900 60,900 2016

Payables: 2,3

- Creditors 76,402 76,402 76,402

76,402 76,402 76,402

Notes:

3 Accrued Salaries Wages, On-Costs and Payroll Deductions have been excluded from payables as not within the scope of AASB7 Financial Instruments: Disclosures. Prior year comparatives have been restated as a result.

1 The amounts disclosed are the contractual undiscounted cash flows of each class of financial liabilities based on the earliest date on which the SESLHD can be required to pay. The tables include both interest and principal cash flows and therefore will not reconcile to the Statement of Financial Position.





The table below summarises the maturity profile of the SESLHD's financial liabilities together with the interest

2 There are no payables with fixed and/or variable rates.

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(d) Market Risk

Interest rate risk


Result Result

2017 $000 $000 $000 $000 $000

Financial Assets


Receivables 89,160 ----- ----- ----- -----


Payables* 60,900 ----- ----- ----- -----

2016

Financial Assets


Receivables 58,826 ----- ----- ----- -----


Payables* 76,402 ----- ----- ----- -----

The effect on net result and equity due to a reasonably possible change in risk variable is outlined in the information below, for interest rate risk and other price risk. A reasonably possible change in risk variable has been determined after taking into account the economic environment in which the SESLHD operates and the time frame for the assessment (i.e. until the end of the next annual reporting period). The sensitivity analysis is based on risk exposures in existence at the Statement of Financial Position date. The analysis is performed on the same basis for 2016. The analysis assumes that all other variables remain constant.

Exposure to interest rate risk arises primarily through the SESLHD's interest bearing liabilities.

Both NSW Treasury and NSW Ministry of Health loans are set at fixed rates and therefore are generally not affected by fluctuations in market rates. The SESLHD does not account for any fixed rate financial instruments at fair value through profit or loss or as available-for-sale. Therefore, for these financial instruments, a change of interest rates would not affect net result or equity.

A reasonably possible change of +/-1% is used consistent with current trends in interest rates (based on official RBA interest rate volatility over the last five years). The basis will be reviewed annually and amended where there is a structural change in the level of interest rate volatility.

+1%-1%

*Accrued Salaries Wages, On-Costs and Payroll Deductions have been excluded from payables as not within the scope of AASB7 Financial Instruments Disclosures. Prior year comparatives have been restated as a result.

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. The SESLHD's exposures to market risk are primarily through interest rate risk on the SESLHD's borrowings and other price risks associated with the movement in the unit price of the Hour-Glass Investment facilities. The SESLHD has no exposure to foreign currency risk and does not enter into commodity contracts.




However, the SESLHD is not permitted to borrow external to the NSW Ministry of Health (except energy loans which are negotiated through NSW Treasury).

The SESLHD's exposure to interest rate risk is set out below.

Carrying Amount

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2017

$000

Short-term employee benefits 1,050


1,147


There were no further transactions with key management personnel during the financial year.

Transactions with the ultimate parent



There has not been any matters arising subsequent to balance date that would require these financial statements to be amended.


During the financial year, South Eastern Sydney Local Health District obtained key management personnel services from the immediate parent andincurred $357K for these services.




Compensation for the Minister for Health is paid by the Legislature and is not reimbursed by the Ministry of Health and its controlled entities. Accordinglyno such amounts are included in the key management personnel compensation disclosures above.

Remuneration for the Secretary and Deputy Secretaries are paid by the Ministry of Health and is not reimbursed by the health entities. Accordingly nosuch amounts are included in the key management personnel compensation disclosures above.

47 of 47

COVER PAGE 6

South Western Sydney Local Health District





Opinion

I have audited the accompanying financial statements of South Western Sydney Local Health District


comprehensive income, the statement of changes in equity, the statement of cash flows and service

group statement for the year then ended, notes comprising a summary of significant accounting

policies and other explanatory information of the District and the consolidated entity. The consolidated

entity comprises the District and the entity it controlled at the year’s end or from time to time during the

financial year.






the Public Finance and Audit Regulation 2015


Basis for Opinion





the:





Parliament further promotes independence by ensuring the Auditor-General and the Audit Office of



General




audit opinion.

Emphasis of Matter

Without modification to the opinion expressed above, I draw attention to the basis of presenting adjusted budget information detailed in Note 1 (ag). The note states that AASB 1055 'Budgetary Reporting' is not applicable to the District. It also states that, unlike the requirement in AASB 1055 'Budgetary Reporting' to present original budget information, the District's financial statements present adjusted budget information.

Chief Executive’s Responsibility for the Financial Statements


in accordance with Australian Accounting Standards and the PF&A Act and for such internal control as

the Chief Executive determines is necessary to enable the preparation and fair presentation of the



the consolidated entity to continue as a going concern except where operations will cease as a result

of an administrative restructure. The assessment must disclose, as applicable, matters related to

going concern and the appropriateness of using the going concern basis of accounting.








Misstatements can arise from fraud or error. Misstatements are considered material if, individually or

in aggregate, they could reasonably be expected to influence the economic decisions users take

based on the financial statements.


and Assurance Standards Board website at:

http://www.auasb.gov.au/auditors_responsibilities/ar3.pdf.




economically


statements




A Oyetunji


7 September 2017

SYDNEY



UnauditedActual Notes Actual Adjusted

BudgetUnaudited

Actual

2017 2017 2016 2017 2017 2016$000 $000 $000 $000 $000 $000

Expenses excluding lossesOperating Expenses

----- ----- ----- Employee Related 2 1,089,483 1,087,188 1,055,892 1,063,319 1,060,941 1,001,843 Personnel Services 3 ----- ----- -----

76,786 76,812 74,226 Visiting Medical Officers 76,786 76,812 74,226 481,404 481,611 437,188 Other Operating Expenses 4 481,404 481,611 437,188 60,838 60,880 61,274 Depreciation and Amortisation 1(m), 5 60,838 60,880 61,274 9,163 9,163 10,124 Grants and Subsidies 6 9,163 9,163 10,124 2,495 2,482 4,773 Finance Costs 1(g), 7 2,495 2,482 4,773 32,533 32,533 29,639 Payments to Affiliated Health Organisations 8 32,533 32,533 29,639

1,726,538 1,724,422 1,619,067 Total Expenses excluding losses 1,752,702 1,750,669 1,673,116 Revenue

1,411,790 1,411,790 1,347,327 NSW Ministry of Health Recurrent Allocations 1(h) 1,411,790 1,411,790 1,347,327 9,696 10,159 16,900 NSW Ministry of Health Capital Allocations 1(h) 9,696 10,159 16,900 ----- ----- ----- Acceptance by the Crown Entity of Employee Benefits 1(e)(ii),12 26,164 26,247 54,049

195,940 196,465 180,049 Sale of Goods and Services 1(h), 9 195,940 196,465 180,049 1,175 1,175 1,275 Investment Revenue 1(h),10 1,175 1,175 1,275 34,373 33,958 34,468 Grants and Contributions 1(h),11 34,373 33,958 34,468 12,918 5,141 18,357 Other Revenue 13 12,918 5,141 18,357

1,665,892 1,658,688 1,598,376 Total Revenue 1,692,056 1,684,935 1,652,425 (614) ----- 582 Gain / (Loss) on Disposal 14 (614) ----- 582

(3,941) (770) (2,262) Other Gains / (Losses) 15 (3,941) (770) (2,262)

(65,201) (66,504) (22,371) Net Result 31 (65,201) (66,504) (22,371)

Other Comprehensive IncomeItems that will not be reclassified to net resultNet Increase/(Decrease) in Property, Plant &

----- ----- 126,070 Equipment Revaluation Surplus 20 ----- ----- 126,070 ----- ----- 126,070 Total Other Comprehensive Income ----- ----- 126,070

(65,201) (66,504) 103,699 TOTAL COMPREHENSIVE INCOME (65,201) (66,504) 103,699


South Western Sydney Local Health DistrictStatement of Comprehensive Income for the year ended 30 June 2017

CONSOLIDATIONPARENT



BudgetUnaudited

Actual

2017 2017 2016 2017 2017 2016$000 $000 $000 $000 $000 $000

ASSETS

Current Assets76,895 70,445 61,463 Cash and Cash Equivalents 17 76,895 70,445 61,463 50,133 47,160 56,714 Receivables 18 50,133 47,160 56,714 4,490 4,260 4,260 Inventories 19 4,490 4,260 4,260

131,518 121,865 122,437 131,518 121,865 122,437 ----- ----- 1,878 Non-Current Assets Held for Sale 22 ----- ----- 1,878

131,518 121,865 124,315 Total Current Assets 131,518 121,865 124,315 Non-Current Assets

1,170 1,215 1,215 Receivables 18 1,170 1,215 1,215 Property, Plant & Equipment

1,227,398 1,228,202 1,245,940 - Land and Buildings 20 1,227,398 1,228,202 1,245,940 83,620 86,466 73,937 - Plant and Equipment 20 83,620 86,466 73,937 12,338 12,721 13,017 - Infrastructure Systems 20 12,338 12,721 13,017

745 876 876 - Leasehold Improvements 20 745 876 876 1,324,101 1,328,265 1,333,770 Total Property, Plant & Equipment 1,324,101 1,328,265 1,333,770

323 (2,161) 391 Intangible Assets 21 323 (2,161) 391 1,325,594 1,327,319 1,335,376 Total Non-Current Assets 1,325,594 1,327,319 1,335,376 1,457,112 1,449,184 1,459,691 Total Assets 1,457,112 1,449,184 1,459,691

LIABILITIESCurrent Liabilities

112,438 103,512 77,931 Payables 25 112,438 103,512 77,931 5,989 5,405 5,405 Borrowings 26 5,989 5,405 5,405

193,420 189,996 183,457 Provisions 27 193,420 189,996 183,457 1,167 22,271 585 Other 28 1,167 22,271 585

313,014 321,184 267,378 Total Current Liabilities 313,014 321,184 267,378 Non-Current Liabilities

54,845 61,058 58,906 Borrowings 26 54,845 61,058 58,906 1,788 1,788 1,749 Provisions 27 1,788 1,788 1,749

21,008 ----- ----- Other 28 21,008 ----- ----- 77,641 62,846 60,655 Total Non-Current Liabilities 77,641 62,846 60,655 390,655 384,030 328,033 Total Liabilities 390,655 384,030 328,033

1,066,457 1,065,154 1,131,658 Net Assets 1,066,457 1,065,154 1,131,658 EQUITY

253,073 253,542 253,541 Reserves 253,073 253,542 253,541 813,384 811,612 878,117 Accumulated Funds 813,384 811,612 878,117

1,066,457 1,065,154 1,131,658 Total Equity 1,066,457 1,065,154 1,131,658 The accompanying notes form part of these financial statements.

CONSOLIDATIONPARENT

South Western Sydney Local Health DistrictStatement of Financial Position as at 30 June 2017

PARENT AND CONSOLIDATION Notes Accumulated Revaluation Available For TotalFunds Surplus Sale Reserve

$000 $000 $000 $000

Balance at 1 July 2016 878,117 253,541 ----- 1,131,658

Total Equity at 1 July 2016 878,117 253,541 ----- 1,131,658 Net Result for the year (65,201) ----- ----- (65,201) Other Comprehensive Income:Available for Sale Financial Assets:Transfers on Disposal 468 (468) ----- -----

Total Other Comprehensive Income 468 (468) ----- ----- Total Comprehensive Income for the year (64,733) (468) ----- (65,201)

Balance at 30 June 2017 813,384 253,073 ----- 1,066,457

Balance at 1 July 2015 899,656 128,303 ----- 1,027,959

Total Equity at 1 July 2015 899,656 128,303 ----- 1,027,959 Net Result for the year (22,371) ----- ----- (22,371) Other Comprehensive Income:Net Increase/(Decrease) in Property, Plant & Equipment 20 ----- 126,070 ----- 126,070 Available for Sale Financial Assets:Transfers on Disposal 832 (832) ----- -----

Total Other Comprehensive Income 832 125,238 ----- 126,070 Total Comprehensive Income for the year (21,539) 125,238 ----- 103,699

Balance at 30 June 2016 878,117 253,541 ----- 1,131,658


South Western Sydney Local Health DistrictStatement of Changes in Equity for the year ended 30 June 2017



BudgetUnaudited

Actual

2017 2017 2016 2017 2017 2016$000 $000 $000 $000 $000 $000

CASH FLOWS FROM OPERATING ACTIVITIESPayments

----- ----- ----- Employee Related (1,065,138) (1,062,308) (1,020,626) (45,701) (45,701) (43,607) Grants and Subsidies (45,701) (45,701) (43,607) (2,157) (2,482) (2,361) Finance Costs (2,157) (2,482) (2,361)

(1,643,760) (1,654,050) (1,581,644) Other (578,622) (591,742) (561,018)

(1,691,618) (1,702,233) (1,627,612) Total Payments (1,691,618) (1,702,233) (1,627,612)

Receipts1,411,790 1,411,790 1,347,327 NSW Ministry of Health Recurrent Allocations 1,411,790 1,411,790 1,347,327

9,696 10,159 16,900 NSW Ministry of Health Capital Allocations 9,696 10,159 16,900 14,231 14,231 14,009 Reimbursements from the Crown Entity 14,231 14,231 14,009

194,366 198,692 174,929 Sale of Goods and Services 194,366 198,692 174,929 1,175 1,175 1,275 Interest Received 1,175 1,175 1,275 36,504 36,099 36,452 Grants and Contributions 36,504 36,099 36,452 70,229 66,074 47,365 Other 70,229 66,074 47,365

1,737,991 1,738,220 1,638,257 Total Receipts 1,737,991 1,738,220 1,638,257



1,768 6,465 6,472 Proceeds from Sale of Property, Plant & Equipment and Intangibles 1,768 6,465 6,472 (29,809) (35,623) (21,381) Purchases of Property, Plant & Equipment and Intangibles (29,809) (35,623) (21,381)


CASH FLOWS FROM FINANCING ACTIVITIES(2,900) 2,153 (2,395) Repayment of Borrowings and Advances (2,900) 2,153 (2,395)

(2,900) 2,153 (2,395) NET CASH FLOWS FROM FINANCING ACTIVITIES (2,900) 2,153 (2,395)

15,432 8,982 (6,659) NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS 15,432 8,982 (6,659) 61,463 61,463 68,122 Opening Cash and Cash Equivalents 17 61,463 61,463 68,122



South Western Sydney Local Health DistrictStatement of Cash Flows for the year ended 30 June 2017

CONSOLIDATIONPARENT

1. Summary of Significant Accounting Policiesa)

*

*

b)

***

c)

The SWSLHD has the capacity to review timing of subsidy cashflows to ensure that debts can be paid when they become due and payable.The SWSLHD has developed an Efficiency and Improvement Plan (EIP) which identifies revenue improvement and cost saving strategies. Benefits from the EIP are retained by the SWSLHD and assist in meeting its overall budget target. The EIP is monitored and evaluated by the Ministry throughout the financial year.


Property, plant and equipment, assets (or disposal groups) held for sale and financial assets at 'fair value through profit and loss' and available for saleare measured at fair value. Other financial statement items are prepared in accordance with the historical cost convention except where specifiedotherwise.Judgements, key assumptions and estimations management has made are disclosed in the relevant notes to the financial statements.All amounts are rounded to the nearest one thousand dollars and are expressed in Australian currency.Comparative InformationExcept when an Australian Accounting Standard permits or requires otherwise, comparative information is disclosed in respect of the previous periodfor all amounts reported in the financial statements.

The parent entity, comprises all the operating activities of the Hospital Facilities and the Community Health Centres under its control. It also encompasses the Restricted Assets (as disclosed in notes 16 and 24), which, while containing assets which are restricted for specified uses by the grantor or the donor, are nevertheless controlled by the parent entity.The South Western Sydney Local Health District Special Purpose Service Entity which was established as a Division of the SWSLHD on 1 January 2011 in accordance with the Health Services Act 1997. This Division provides personnel services to enable the SWSLHD to exercise its functions.

The SWSLHD, as a reporting entity, comprises all the entities under its control, namely:

The Reporting EntityThe South Western Sydney Local Health District (the SWSLHD) was established under the provisions of the Health Services Act 1997 with effect from 1January 2011.

South Western Sydney Local Health DistrictNotes to and forming part of the Financial Statements


Basis of PreparationThe SWSLHD's financial statements are general purpose financial statements which have been prepared on an accrual basis and in accordance withapplicable Australian Accounting Standards (which include Australian Accounting Interpretations), the requirements of the Health Services Act 1997 andits regulations (including observation of the Accounts and Audit Determination for Public Health Organisations), the Public Finance and Audit Act 1983and Public Finance and Audit Regulation 2015 (the Act), and the financial Reporting Directions issued by the Treasurer under the Act. The financialstatements comply with the NSW Treasury mandates circular for NSW General Government Sector Entities. Further information on the adjusted budgetfigures can be found at Note 1(ag).

As a consequence the values in the financial statements presented herein consist of the parent entity and the consolidated entity which comprises theparent and special purpose service entity. In the process of preparing the consolidated financial statements consisting of the controlling and controlledentities, all inter-entity transactions and balances have been eliminated, and like transactions and other events are accounted for using uniformaccounting policies.SWSLHD is a NSW Government entity and is controlled by the NSW Ministry of Health, which is the immediate parent. The reporting entity is alsocontrolled by the State of New South Wales (and is consolidated as part of the NSW Total State Sector Accounts), which is the ultimate parent. Thereporting entity is a not-for-profit entity (as profit is not its principal objective).

These consolidated financial statements for the year ended 30 June 2017 have been authorised for issue by the Chief Executive on 01 September,2017.

The financial statements of the SWSLHD have been prepared on a going concern basis.The Secretary of Health, the Chair of the South Western Sydney Local Health District Board and the Chief Executive, through the Service Agreementhave agreed to service and funding levels for the forward financial year. The Service Agreement sets out the level of financial resources for publichealth services under the SWSLHD's control and the source of these funds. By agreement, the Service Agreement requires local management tocontrol its financial liquidity and in particular meet benchmarks for the payment of creditors. Where the SWSLHD fails to meet Service Agreementperformance standards, the Ministry of Health as the state manager can take action in accordance with annual performance framework requirements,including financial support and increased management interaction by the Ministry.





d)

e)i)

ii)

iii)

iv)

f)

g)

Other provisions exist when the SWSLHD has a present legal or constructive obligation as a result of a past event; it is probable that an outflow of resources will be required to settle the obligation; and a reliable estimate can be made of the amount of the obligation.


Insurance

Finance Costs


Statement of ComplianceThe financial statements and notes comply with Australian Accounting Standards which include Australian Accounting Interpretations.


The SWSLHD's insurance activities are conducted through the NSW Treasury Managed Fund (TMF) Scheme of self insurance for government entities.The expense (premium) is determined by the Fund Manager based on past claims experience.The TMF is managed by Insurance and Care NSW(iCare), a controlled entity of the ultimate parent.



Other Provisions

Salaries and wages (including non-monetary benefits) and paid sick leave that are expected to be settled wholly within 12 months after the end of the period in which the employees render the service are recognised and measured at the undiscounted amounts of the benefits. Annual leave is not expected to be settled wholly before twelve months after the end of the annual reporting period in which the employees render the related service. As such, it is required to be measured at present value in accordance with AASB 119 Employee Benefits (although short-cut methods are permitted).Actuarial advice obtained by NSW Treasury, a controlled entity of the ultimate parent, has confirmed that using the nominal annual leave balance plus the annual leave entitlements accrued while taking annual leave can be used to approximate the present value of the annual leave liability. On-costs of 17.2% are applied to the value of leave payable at 30 June 2017 (comparable on-costs for 30 June 2016 were 16.7%).The SWSLHD has assessed the actuarial advice based on the SWSLHD’s circumstances and has determined that the effect of discounting is immaterial to annual leave.


The SWSLHD's liability for Long Service Leave and defined benefit superannuation (State Authorities Superannuation Scheme and State Superannuation Scheme) are assumed by the Crown Entity , which is a controlled entity of the ultimate parent.The SWSLHD accounts for the liability as having been extinguished resulting in the amount assumed being shown as part of the non-monetary revenue item described as 'Acceptance by the Crown Entity of employee benefits'.Specific on-costs relating to Long Service Leave assumed by the Crown Entity are borne by the SWSLHD as shown in Note 27. Long Service Leave is measured at present value in accordance with AASB 119, Employee Benefits. This is based on the application of certain factors (specified in NSW Treasury Circular 15/09) to employees with five or more years of service, using current rates of pay. These factors were determined based on an actuarial review to approximate present value.The superannuation expense for the reporting period is determined by using the formulae specified in the Treasurer’s Directions. The expense for certain superannuation schemes (i.e. Basic Benefit and First State Super) is calculated as a percentage of the employee's salary. For other superannuation schemes (i.e. State Superannuation Scheme and State Authorities Superannuation Scheme), the expense is calculated as a multiple of the employee's superannuation contributions.





h)


**

Refer to Note 9(b) for further details. Grants and Contributions


a monthly charge raised by the SWSLHD based on a percentage of receipts generated.the residual of the Private Practice Trust Fund at the end of each financial year, such sum being credited for the SWSLHD use in the advancement of the SWSLHD or individuals within it.



Revenue from the sale of goods is recognised as revenue when the SWSLHD transfers the significant risks and rewards of ownership of the assets.




Patient Fees

Department of Veterans' AffairsAn agreement is in place with the Commonwealth Department of Veterans' Affairs through which direct funding is provided for the provision of healthservices to entitled veterans. For inpatient services, revenue is recognised by the SWSLHD on an accrual basis by reference to patient admissions.Non admitted patients are recognised by the Ministry of Health in the form of a block grant.


Specialist doctors with rights of private practice are subject to an infrastructure charge for the use of hospital facilities at rates determined by the NSWMinistry of Health. Charges consist of two components:

Income Recognition

Sale of Goods


Investment Revenue

A bulk billing agreement exists in which motor vehicle insurers effect payment directly to NSW Health for the hospital costs for those personshospitalised or attending for inpatient treatment as a result of motor vehicle accidents. The SWSLHD recognises the revenue on an accruals basis fromthe time the patient is treated or admitted into hospital.

Debts are accounted for as extinguished when and only when settlement occurs through repayment or replacement by another liability.Debt Forgiveness

Grants and contributions are recognised as revenues when the SWSLHD obtains control over the assets comprising the contributions. Control overcontributions is normally obtained upon the receipt of cash.




i)

*

*

j)

k)

l)Individual items of Property, Plant & Equipment and Intangibles are capitalised where their cost is $10,000 or above.


Land and buildings are owned by the Health Administration Corporation, an entity controlled by the immediate parent. Land and buildings which areoperated/occupied by the SWSLHD are deemed to be controlled by the SWSLHD and are reflected as such in the financial statements.



Assets acquired at no cost, or for nominal consideration, are initially recognised at their fair value at the date of acquisition.Fair value is the price that would be received to sell an asset in an orderly transaction between market participants at measurement date. Where payment for an asset is deferred beyond normal credit terms, its cost is the cash price equivalent, i.e. the deferred payment amount is effectivelydiscounted over the period of credit.


Refer to Note 1(ad) for assets transferred as a result of equity transfer.

Most assets assets are acquired from Health Administration Corporation, a controlled entity of the immediate parent.

amount of GST incurred by the SWSLHD as a purchaser that is not recoverable from the Australian Taxation Office is recognised as part of an asset's cost of acquisition or as part of an item of expense; andreceivables and payables are stated with the amount of GST included.



Payments are made by the immediate parent on the basis of the allocation for the SWSLHD as adjusted for approved supplementations mostly forsalary agreements and approved enhancement projects.This allocation is included in the Statement of Comprehensive Income before arriving at the "Net Result" on the basis that the allocation is earned inreturn for the health services provided on behalf of the Ministry. Allocations are normally recognised upon the receipt of cash.


General operating expenses/revenues of $32.5m (net expense), for the following Affiliated Health Organisations, (Braeside Hospital, CarringtonCentennial Care, Karitane, South Western Sydney Scarba Service and STARTTS), have only been included in the Statement of ComprehensiveIncome prepared to the extent of the cash payments made to the Health Organisations concerned. The SWSLHD is not deemed to own or control thevarious assets/liabilities of the aforementioned Health Organisations and such amounts have been excluded from the Statement of Financial Position.Any exceptions are specifically listed in the notes that follow.







2.5%2.5%

Plant and Equipment 20%

10%12.5%5%25%12.5%20%10%10%33%


Leasehold Improvements

- Motor Vehicle Sedans - Motor Vehicles, Trucks & Vans - Office Equipment - Plant and Machinery

Depreciation is provided for on a straight-line basis for all depreciable assets so as to write off the depreciable amount of each asset as it is consumedover its useful life to the SWSLHD. Land is not a depreciable asset. All material identifiable components of assets are depreciated over their useful lives.

- Linen

To ensure that the carrying amount for each asset does not differ materially from its fair value at reporting date, indices are sourced. The indices reflectan assessment of movements made in the period between revaluations.Non-specialised assets with short useful lives are measured at depreciated historical cost, as an approximation of fair value. The entity has assessedthat any difference between fair value and depreciated historical cost is unlikely to be material.


Buildings

Physical non-current assets are valued in accordance with the 'Valuation of Physical Non-Current Assets at Fair Value' Policy and Guidelines Paper(TPP 14-01). This policy adopts fair value in accordance with AASB 13 Fair Value Measurement, AASB 116 Property, Plant and Equipment and AASB140 Investment Property.


Investment property is separately discussed at Note 1(r).Property, plant and equipment is measured at the highest and best use by market participants that is physically possible, legally permissible andfinancially feasible. The highest and best use must be available at a period that is not remote and takes into account the characteristics of the assetbeing measured, including any socio-political restrictions imposed by government. In most cases, after taking into account these considerations, thehighest and best use is the existing use. In limited circumstances, the highest and best use may be a feasible alternative use, where there are norestrictions on use or where there is a feasible higher restricted alternative use.



* Costing less than $200,000 * Costing more than or equal to $200,000 - Furniture, Fittings and Furnishings




When revaluing non-current assets using the cost approach, the gross amount and the related accumulated depreciation are separately restated.For other assets valued using other valuation techniques, any balances of accumulated depreciation existing at the revaluation date in respect of thoseassets are credited to the asset accounts to which they relate. The net asset accounts are then increased or decreased by the revaluation incrementsor decrements.






q) Non-Current Assets (or disposal groups) Held for Sale

r) Investment Properties

s) Intangible Assets

Where an asset is acquired at no or nominal cost, the cost is its fair value as at the date of acquisition. All research costs are expensed. Developmentcosts are only capitalised when certain criteria are met.The useful lives of intangible assets are assessed to be finite.

The SWSLHD does not have any property that meets the definition of Investment Property.

The SWSLHD recognises intangible assets only if it is probable that future economic benefits will flow to the SWSLHD and the cost of the asset can bemeasured reliably. Intangible assets are measured initially at cost.

Non-current assets (or disposal groups) held for sale are recognised at the lower of carrying amount and fair value less costs of disposal. These assetsare not depreciated while they are classified as held for sale.

Investment property is held to earn rentals or for capital appreciation, or both. However, for not-for-profit entities, property held to meet service deliveryobjectives rather than to earn rental or for capital appreciation does not meet the definition of investment property and is accounted for under AASB 116, Property, Plant and Equipment.

Computer software developed or acquired by the SWSLHD are recognised as intangible assets and are amortised over four years using the straightline method based on the useful life of the asset for both internally developed assets and direct acquisitions. Most computer software is acquired fromthe Health Administration Corporation, a controlled entity of the parent.

As a not-for-profit entity, revaluation increments and decrements are offset against one another within a class of non-current assets, but not otherwise.Where an asset that has previously been revalued is disposed of, any balance remaining in the revaluation surplus in respect of that asset is transferredto accumulated funds.


Revaluation increments are credited directly to the revaluation surplus, except that, to the extent that an increment reverses a revaluation decrement inrespect of that class of asset previously recognised as an expense in the net result, the increment is recognised immediately as revenue in the netresult.Revaluation decrements are recognised immediately as expenses in the net result for the year, except that, to the extent that a credit balance exists inthe revaluation surplus in respect of the same class of assets, they are debited directly to the revaluation surplus.

Intangible assets are subsequently measured at fair value only if there is an active market. As there is no active market for the SWSLHD's intangibleassets, the assets are carried at cost less any accumulated amortisation and impairment losses.

Intangible assets are tested for impairment where an indicator of impairment exists. If the recoverable amount is less than its carrying amount thecarrying amount is reduced to recoverable amount and the reduction is recognised as an impairment loss.

As a not-for-profit entity with no cash generating units, impairment under AASB 136 Impairment of Assets is unlikely to arise. As property, plant andequipment is carried at fair value or an amount that approximates fair value, impairment can only arise in the rare circumstances such as where thecosts of disposal are material. Specifically, impairment is unlikely for not-for-profit entities given that AASB 136 modifies the recoverable amount test fornon-cash generating assets of not-for-profit entities to the higher of fair value less costs of disposal and depreciated replacement cost, wheredepreciated replacement cost is also fair value.




t) Maintenance

u) Leased Assets

v) Inventories

w) Loans and Receivables

x) Investments

*

*

*

T-Corp Hour-Glass Investment facilities are managed by New South Wales Treasury Corporation, a controlled entity of the ultimate parent. The facilities are designated at fair value through profit or loss as the management and performance of these financial assets is undertaken on a fair value basis, in accordance with a documented risk management strategy. Information about these assets is provided internally to the SWSLHD's key management personnel.

The SWSLHD subsequently measures investments classified as 'held for trading' or designated upon initial recognition “at fair value through profit or loss” at fair value.Financial assets are classified as 'held for trading' if they are acquired for the purpose of selling in the near term. Derivatives are also classified as held for trading. Gains or losses on these assets are recognised in the net result for the year.


Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. These financialassets are recognised initially at fair value. Subsequent measurement is at amortised cost using the effective interest method, less an allowance for anyimpairment of receivables. Any changes are recognised in the Net Result when impaired, derecognised or through the amortisation process.


Investments are initially recognised at fair value plus, in the case of investments not at fair value through profit or loss, transaction costs. The SWSLHDdetermines the classification of its financial assets after initial recognition and, when allowed and appropriate, re-evaluates this at each financial yearend.


Purchases or sales of investments under contract that require delivery of the asset within the timeframe established by convention or regulation arerecognised on the trade date; i.e. the date the SWSLHD commits to purchase or sell the asset.

The movement in the fair value of the T Corp Hour-Glass Investment facilities incorporates distributions received as well as unrealised movements in fair value and is reported in the line item ‘investment revenue’.Held-to-maturity investments – Non-derivative financial assets with fixed or determinable payments and fixed maturity that the SWSLHD has the positive intention and ability to hold to maturity are classified as 'held-to-maturity'.These investments are measured at amortised cost using the effective interest method. Changes are recognised in the net result for the year when impaired, derecognised or through the amortisation process.

The risk management strategy of the SWSLHD has been developed consistent with the investment powers granted under the provision of the Public Authorities (Financial Arrangements) Act.T Corp Hour-Glass investments are made in an effort to improve interest returns on cash balances otherwise available whilst also providing secure investments.


A distinction is made between finance leases which effectively transfer from the lessor to the lessee substantially all the risks and rewards incidental toownership of the leased assets, and operating leases under which the lessor effectively retains all such risks and rewards.Where a non-current asset is acquired by means of a finance lease, at the commencement of the lease term, the asset is recognised at its fair value or,if lower, the present value of the minimum lease payments, at the inception of the lease. The corresponding liability is established at the same amount.Lease payments are allocated between the principal component and the interest expense.Operating lease payments are recognised as an expense on a straight-line basis over the lease term.

Day-to-day servicing costs or maintenance are charged as expenses as incurred except where they relate to the replacement of a part or component ofan asset, in which case the costs are capitalised and depreciated.




y) Impairment of Financial Assets

z) De-recognition of Financial Assets and Financial Liabilities

**

aa) Payables

ab) Borrowings

ac) Fair Value Hierarchy

***

These amounts represent liabilities for goods and services provided to the SWSLHD and other amounts. Payables are recognised initially at fair value.Subsequent measurement is at amortised cost using the effective interest method. Short-term payables with no stated interest rate are measured at theoriginal invoice amount where the effect of discounting is immaterial.

Level 1 - quoted prices in active markets for identical assets / liabilities that the entity can access at the measurement date.Level 2 – inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly.Level 3 – inputs that are not based on observable market data (unobservable inputs).

where the SWSLHD has not transferred substantially all the risks and rewards, if the SWSLHD has not retained control.

A financial asset is derecognised when the contractual rights to the cash flows from the financial assets expire; or if the SWSLHD transfers the financialasset: where substantially all the risks and rewards have been transferred; or

Any reversals of impairment losses are reversed through the net result for the year, where there is objective evidence, except reversals of impairmentlosses on an investment in an equity instrument classified as “available for sale”, must be made through the reserve. Reversals of impairment losses offinancial assets carried at amortised cost cannot result in a carrying amount that exceeds what the carrying amount would have been had there notbeen an impairment loss.

Payables are recognised for amounts to be paid in the future for goods and services received, whether or not billed to the SWSLHD.

Loans are not held for trading or designated at fair value through profit or loss and are recognised at amortised cost using the effective interest ratemethod. Gains or losses are recognised in the net result for the year on derecognition.

The SWSLHD recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.Refer to Note 23 and Note 36 for further disclosures regarding fair value measurements of financial and non-financial assets.


A number of the SWSLHD’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets andliabilities. When measuring fair value, the valuation technique used maximises the use of relevant observable inputs and minimises the use ofunobservable inputs. Under AASB 13 Fair Value Measurement, the SWSLHD categorises, for disclosure purposes, the valuation techniques based onthe inputs used in the valuation techniques as follows:

Where the SWSLHD has neither transferred nor retained substantially all the risks and rewards or transferred control, the asset is recognised to theextent of the SWSLHD's continuing involvement in the asset.A financial liability is derecognised when the obligation specified in the contract is discharged or cancelled or expires.


All financial assets, except those measured at fair value through profit and loss, are subject to an annual review for impairment. An allowance forimpairment is established when there is objective evidence that the entity will not be able to collect all amounts due. For financial assets carried at amortised cost, the amount of the allowance is the difference between the asset’s carrying amount and the present valueof estimated future cash flows, discounted at the effective interest rate. The amount of the impairment loss is recognised in the net result for the year.

When an available for sale financial asset is impaired, the amount of the cumulative loss is removed from equity and recognised in the net result for theyear, based on the difference between the acquisition cost (net of any principal repayment and amortisation) and current fair value, less any impairmentloss previously recognised in the net result for the year.




ad) Equity Transfers

ae) Equity and Reserves(i)

(ii)

(iii)

af) Trust Funds

ag) Adjusted Budgeted Amounts

All other equity transfers are recognised at fair value, except for intangibles. Where an intangible has been recognised at (amortised) cost by thetransferor because there is no active market, the SWSLHD recognises the asset at the transferor's carrying amount. Where the transferor is prohibitedfrom recognising internally generated intangibles, the SWSLHD does not recognise that asset.


Accumulated FundsThe category "accumulated funds" includes all current and prior period retained funds.Revaluation SurplusThe revaluation surplus is used to record increments and decrements on the revaluation of non-current assets. This accords with the SWSLHD's policy on the revaluation of property, plant and equipment as discussed in Note 1(n).Separate ReservesSeparate reserve accounts are recognised in the financial statements only if such accounts are required by specific legislation or Australian Accounting Standards.

The SWSLHD receives monies in a trustee capacity for various trusts as set out in Note 30.


As the SWSLHD performs only a custodial role in respect of these monies, and because the monies cannot be used for the achievement of theSWSLHD's own objectives, these funds are not recognised in the financial statements.

NSW Health's budget is shown at a consolidated level when presented in parliament each year (i.e. in the NSW Government Budget Papers). TheSWSLHD's budget is not presented in parliament, therefore AASB 1055 Budgetary Reporting is not applicable. Unlike the requirement in AASB 1055‘Budgetary Reporting’ to present original budget information, the SWSLHD's financial statements present adjusted budget information.The adjustedbudgeted amounts are drawn from the initial Service Agreements between the SWSLHD and the NSW Ministry of Health at the beginning of thefinancial year, as well as any adjustments for the effects of additional supplementation provided in accordance with delegations to derive a final budgetat year end (i.e. adjusted budget). The budget amounts are not subject to audit and, accordingly, the relevant column entries in the financial statementsare denoted as "Unaudited".Major variances between the original budgeted amounts and the actual amounts disclosed in the primary financial statements are explained in Note 35.




ah) Changes in Accounting Policy, including new or revised Australian Accounting Standards(i)

(ii)NSW public sector entities are not permitted to early adopt new Australian Accounting Standards, unless NSW Treasury determines otherwise. The following new Australian Accounting Standards, excluding standards not considered applicable or material to NSW Health, have not been applied and are not yet effective. The possible impact of these Standards in the period of initial application includes:


Effective for the first time in 2016-17The accounting policies applied in 2016-17 are consistent with those of the previous financial year except as a result of new or revised Australian Accounting Standards that have been applied for the first time as follows:

AASB 16 Leases applies to annual periods beginning on or after 1 January 2019. The standard introduces a new approach to lease accounting that requires a lessee to recognise assets and liabilities for the rights and obligations created by leases. The application of this standard will likely have a significant transitional impact as all leases, except short term (<12 months) and low value leases, brought on balance sheet.

AASB 1058 Income of Not-for-Profit Entities applies to not-for-profit entities and is effective for annual periods beginning on or after 1 January 2019. This standard requires entities to recognise income where the consideration to acquire an asset, including cash, is significantly less than the fair value principally to enable the entity to further its objectives. Under this standard, the timing of income recognition may be impacted depending on whether there is a liability or other performance obligation associated with the acquired asset, including cash.AASB 1058 also requires government agencies to recognise income for volunteer services received if the fair value of those services can be measured reliably and the services would have been purchased if they had not been donated. This is consistent with current practice under AASB 1004 Contributions and is not expected to materially impact the financial statements.




AASB 2016-2 Amendments to Australian Accounting Standards - Disclosure Initiative: Amendments to AASB 107 applies to annual periods beginning on or after 1 January 2017. The standard amends AASB 107 Statement of Cash Flows to require additional disclosures regarding financing activities in the Statement of Cash Flows. The change is not expected to materially impact the financial statements.AASB 9 Financial Instruments and AASB 2014-7 Amendments to Australian Accounting Standards arising from AASB 9 are applicable for reporting period on or after 1 January 2018. AASB 9 will replace AASB 139 Financial Instruments: Recognition and Measurement and establishes new principles for the financial reporting of financial assets, financial liabilities and hedge accounting. AASB 9 also introduces a forward-looking 'expected credit losses' impairment model, which may significantly impact the timing and amount of impairment recognition.


2017 2016 2017 2016$000 $000 $000 $000

2. Employee Related

----- ----- Salaries and Wages (including annual leave) 965,715 909,038 ----- ----- Superannuation - Defined Benefit Plans 6,770 7,188 ----- ----- Superannuation - Defined Contribution Plans 83,896 78,857 ----- ----- Long Service Leave 19,879 50,020 ----- ----- Redundancies 396 124 ----- ----- Workers' Compensation Insurance 12,746 10,573 ----- ----- Fringe Benefits Tax 81 92

----- ----- 1,089,483 1,055,892

All of the 'Workers Compensation Insurance' is paid to iCare (Insurance & Care NSW), an entity controlled by the ultimate parent.

The amounts below are capitalised and do not form part of the above total employee related costs:

----- ----- Employee Related Expenses Capitalised - Land and Buildings ----- 57


965,715 909,038 Salaries and Wages ----- ----- 83,896 78,857 Superannuation - Defined Contribution Plans ----- -----

485 3,159 Long Service Leave ----- ----- 396 124 Redundancies ----- -----

12,746 10,573 Workers' Compensation Insurance ----- ----- 81 92 Fringe Benefits Tax ----- -----

1,063,319 1,001,843 ----- -----

Personnel services of South Western Sydney Local Health District was provided by its controlled entity, South Western Sydney Local Health District Special Purpose Service Entity.The amounts below are capitalised and do not form part of the above total personnel services:

----- 57 Personnel Services Expenses Capitalised - Land and Buildings ----- -----




2017 2016 2017 2016$000 $000 $000 $000




167 289 Advertising 167 289 230 236 Auditor's Remuneration - Audit of Financial Statements 230 236

12,089 12,603 Blood and Blood Products 12,089 12,603 683 701 Consultancies 683 701

3,123 2,854 Contractors 3,123 2,854 19,695 19,917 Domestic Supplies and Services 19,695 19,917 77,643 67,563 Drug Supplies 77,643 67,563 29,989 28,330 Food Supplies 29,989 28,330 10,126 8,993 Fuel, Light and Power 10,126 8,993

7,119 6,728 Hospital Ambulance Transport Costs 7,119 6,728 12,987 12,474 Information Management Expenses 12,987 12,474

1,430 1,777 Insurance 1,430 1,777 60,200 40,310 Maintenance (See 4(b) below) 60,200 40,310 91,016 84,611 Medical and Surgical Supplies 91,016 84,611

1,267 1,945 Motor Vehicle Expenses 1,267 1,945 2,209 2,773 Postal and Telephone Costs 2,209 2,773 4,046 3,840 Printing and Stationery 4,046 3,840 1,827 1,998 Rates and Charges 1,827 1,998 3,450 3,033 Rental 3,450 3,033

12,907 12,603 Hosted Services Purchased from entities controlled by the immediate parent 12,907 12,603

68,581 65,840 Special Service Departments (Pathology, Dialysis, Imaging, Dental, Allied Health ) 68,581 65,840

9,553 8,464 Staff Related Costs 9,553 8,464 5,208 5,108 Travel Related Costs 5,208 5,108

45,859 44,198 Other (See 4(a) below) 45,859 44,198

481,404 437,188 481,404 437,188

PARENT CONSOLIDATION2017 2016 2017 2016$000 $000 $000 $000


a) Other Includes:20 ----- Aircraft Expenses (Ambulance) 20 -----

9,633 10,513 Contract for Patient Services 9,633 10,513 13,961 13,778 Corporate Support Services 13,961 13,778

589 606 Courier and Freight 589 606 98 62 Isolated Patient Travel and Accommodation Assistance Scheme 98 62 424 434 Legal Services 424 434 861 539 Membership/Professional Fees 861 539

2,893 2,667 Motor Vehicle Operating Lease Expense - Minimum Lease Payments 2,893 2,667 710 848 Other Operating Lease Expense - Minimum Lease Payments 710 848 146 83 Quality Assurance/Accreditation 146 83

4,393 3,969 Security Services 4,393 3,969 12,131 10,699 Other Miscellaneous 12,131 10,699 45,859 44,198 45,859 44,198

b) Reconciliation of Total Maintenance24,550 18,511 Maintenance Contracts 24,550 18,511 22,786 13,495 New/Replacement Equipment under $10,000 22,786 13,495 12,809 8,287 Repairs Maintenance/Non Contract 12,809 8,287

55 17 Other 55 17 60,200 40,310 60,200 40,310

3,801 3,924 3,801 3,924 64,001 44,234 64,001 44,234






Auditor's Remuneration' was paid to The Audit Office of New South Wales, an entity controlled by the ultimate parent.Hospital Ambulance Transport Costs' were paid to Health Administration Corporation, which is an entity controlled by the immediate parent.The majority of 'Information Management Expenses' were paid to Health Administration Corporation, an entity controlled by the immediate parent.


All 'Corporate Support Services' were paid to Health Administration Corporation', which is an entity controlled by the immediate parent.

The majority of "Rates and Charges" were paid to Sydney Water Corporation, an entity controlled by the ultimate parent.All of "Hosted Services Purchased from entities controlled by the immediate parent' were paid to Sydney Local Health District, an entity controlled by the immediate parent.



2017 2016 2017 2016$000 $000 $000 $000


44,525 45,594 Depreciation - Buildings 44,525 45,594 15,306 14,854 Depreciation - Plant and Equipment 15,306 14,854 384 345 Depreciation - Infrastructure Systems 384 345 481 359 Amortisation - Leasehold Improvements 481 359 142 122 Amortisation - Intangible Assets 142 122

60,838 61,274 60,838 61,274


8,073 8,349 Non-Government Organisations 8,073 8,349 307 994 Grants to Research Organisations 307 994 150 173 Grants paid to entities controlled by the immediate parent 150 173 633 608 Other Grants 633 608 9,163 10,124 9,163 10,124

The majority of 'Grants paid to entities controlled by the immediate parent' were paid to the Health Administration Corporation.

7. Finance Costs

338 2,412 Finance Lease Interest Charges 338 2,412 2,157 2,361 Interest on Loans 2,157 2,361

2,495 4,773 2,495 4,773

All the 'Interest on Loans' was payable to the immediate parent, the NSW Ministry of Health


18,094 17,589 Braeside Hospital 18,094 17,589550 1,150 Carrington Centennial Care 550 1,150

5,835 5,717 Karitane 5,835 5,717547 536 South Western Sydney Scarba Service 547 536

7,508 4,647 STARTTS 7,508 4,64732,533 29,639 32,533 29,639




2017 2016 2017 2016$000 $000 $000 $000


a) Sale of Goods comprise the following:-313 563 Pharmacy Sales 313 563

4,018 3,367 Sale of Prosthesis 4,018 3,367 27 28 Other 27 28

b) Rendering of Services comprise the following:-Patient Fees

68,589 63,830 - Inpatient Fees 68,589 63,830 381 322 - Nursing Home Fees 381 322

3,227 3,327 - Non Inpatient Fees 3,227 3,327 24,126 19,356 Department of Veterans' Affairs 24,126 19,356

49 68 Staff-Meals and Accommodation 49 68 17,369 16,925 Infrastructure Fees - Monthly Facility Charge 17,369 16,925 8,695 7,292 Infrastructure Fees - Annual Charge 8,695 7,292 ----- 2 Cafeteria/Kiosk ----- 2

8,561 8,671 Car Parking 8,561 8,671 1,573 1,643 Child Care Fees 1,573 1,643

3 106 Clinical Services (excluding Clinical Drug Trials) 3 106 1,368 1,599 Commercial Activities 1,368 1,599 296 235 Fees for Medical Records 296 235 24 34 Information Retrieval 24 34

41,651 31,803 Highly Specialised Drugs 41,651 31,803 13,557 15,811 Motor Accident Authority Third Party 13,557 15,811

138 65 Private Use of Motor Vehicles 138 65 2 442 Salary Packaging Fee 2 442

152 297 Hosted Services Provided to entities controlled by immediate parent 152 297 482 541 Services Provided to Non NSW Health Organisations 482 541 ----- 3 Shared Corporate Services ----- 3 68 70 Multi Purpose Service Centre Fees 68 70

1,271 3,649 Other 1,271 3,649 195,940 180,049 195,940 180,049


1,175 1,275 Interest 1,175 1,275

1,175 1,275 1,175 1,275



The majority of 'interest' earnt was from the NSW Treasury Corporation, an entity controlled by the ultimate parent.

All of 'Hosted Services Provided to entities controlled by immediate parent' was revenue received from Sydney Local Health District.

All 'Motor Accident Authority Third Party" revenue was received from the State Insurance Regulatory Authority (SIRA), an entity controlled by the ultimate parent.


2017 2016 2017 2016$000 $000 $000 $000

11. Grants and Contributions2,358 1,834 Clinical Drug Trials 2,358 1,834 13,024 13,721 Commonwealth Government Grants 13,024 13,721

194 386 Commonwealth Teaching Hospital Grants 194 386 3,222 2,645 Industry Contributions/Donations 3,222 2,645 7,287 6,530 Cancer Institute Grants 7,287 6,530 3,081 3,006 Grants received from entities controlled by the ultimate parent 3,081 3,006 981 3,068 Grants received from entities controlled by the immediate parent 981 3,068 787 533 Research Grants 787 533

3,439 2,745 Other Grants 3,439 2,745 34,373 34,468 34,373 34,468



----- ----- Superannuation-defined benefit 6,770 7,188 ----- ----- Long Service Leave 19,394 46,861 ----- ----- 26,164 54,049

13. Other Revenue


----- 1 Bad Debts Recovered ----- 1 495 398 Commissions 495 398

1,664 1,689 Conference and Training Fees 1,664 1,689 ----- 212 Discounts received ----- 212 532 360 Insurance Refunds 532 360

1,927 2,411 Lease and Rental 1,927 2,411 1 1 Sale of Merchandise, Old Wares and Books 1 1

308 150 Sponsorship 308 150 6,924 12,142 Treasury Managed Fund Hindsight Adjustment 6,924 12,142 ----- 5 Unclaimed Deposits ----- 5

1,067 988 Other (Translation Services) 1,067 988

12,918 18,357 12,918 18,357




Some of 'Other Grants" were received from Health Administration Corporation, an entity controlled by the immediate parent.

The majority of 'Grants received from entities controlled by the ultimate parent' were received from the Department of Family and Community Services (Ageing, Disability and Home Care) and the NSW Department of Education

The majority of 'Grants that were received from entities controlled by the immediate parent' were received from the Health Education and Training Institute and Sydney Local Health District.


2017 2016 2017 2016$000 $000 $000 $000




5,709 14,927 Property, Plant and Equipment 5,709 14,927 (5,205) (10,952) Accumulated Depreciation (5,205) (10,952)

504 3,975 Written Down Value 504 3,975 29 6 Proceeds from Disposal 29 6

Gain/(Loss) on Disposal of(475) (3,969) Property, Plant and Equipment (475) (3,969)

1,878 1,915 Assets Held for Sale 1,878 1,915 1,739 6,466 Proceeds from Disposal 1,739 6,466

Gain/(Loss) on Disposal of Assets(139) 4,551 Held for Sale (139) 4,551

(614) 582 Total Gain/(Loss) on Disposal (614) 582


(3,941) (2,262) Impairment of Receivables (3,941) (2,262)(3,941) (2,262) (3,941) (2,262)



Health Promotion, Other TotalEducation andResearch

$000 $000 $000

3,162 14,076 17,238

10,685 27,106 37,791







PARENT

2017 2016 2017 2016$000 $000 $000 $000


37,953 23,423 Cash at Bank and On Hand 37,953 23,423 38,942 38,040 Short Term Deposits 38,942 38,040 76,895 61,463 76,895 61,463

Short Term Deposits are held in an hour glass cash facility trust with NSW Treasury Corporation, an entity controlled by the ultimate parent.



76,895 61,463 Cash and Cash Equivalents (per Statement of Financial Position) 76,895 61,463 76,895 61,463 Closing Cash and Cash Equivalents (per Statement of Cash Flows) 76,895 61,463


CONSOLIDATION




2017 2016 2017 2016$000 $000 $000 $000

18. Receivables

Current24,323 25,355 Sale of Goods and Services 24,323 25,355 15,492 9,050 Intra Health Receivables 15,492 9,050 6,496 5,375 Goods and Services Tax 6,496 5,375 4,677 15,094 Other Debtors 4,677 15,094 50,988 54,874 Sub Total 50,988 54,874


47,541 52,555 Sub Total 47,541 52,555 2,592 4,159 Prepayments 2,592 4,159 50,133 56,714 50,133 56,714

a) Movement in the Allowance for Impairment Sale of Goods and Services

(2,189) (2,233) Balance at Commencement of Reporting Period (2,189) (2,233) 2,791 2,306 Amounts written off during the period 2,791 2,306

(Increase)/decrease in Allowance Recognised in(3,941) (2,262) the Net Result (3,941) (2,262) (3,338) (2,189) Balance at 30 June (3,338) (2,189)

b) Movement in the Allowance for Impairment Other Debtors

(130) (178) Balance at Commencement of Reporting Period (130) (178) 21 48 Amounts written off during the period 21 48

(109) (130) Balance at 30 June (109) (130)

(3,447) (2,319) (3,447) (2,319)

Non-Current1,170 1,215 Prepayments 1,170 1,215 1,170 1,215 1,170 1,215

c) The current sale of goods and services balances above include the following patient fee receivables: (Current) include:

3,866 3,351 Patient Fees - Compensable 3,866 3,351 6,849 6,146 Patient Fees - Ineligible 6,849 6,146 10,163 10,643 Patient Fees - Inpatient & Other 10,163 10,643 20,878 20,140 20,878 20,140




Intra Health Receivables include amounts receivable from the immediate parent and entities controlled by the immediate parent. The majority of the balance at reporting date was receivable from the NSW Ministry of Health for Proceeds of Property Sales and Accrued Asset Replacement and Refubishment Program (ARRP) Capital Subsidy.


2017 2016 2017 2016$000 $000 $000 $000

19. Inventories

4,264 4,032 Drugs 4,264 4,032 145 145 Medical and Surgical Supplies 145 145 81 83 Engineering Supplies 81 83

4,490 4,260 4,490 4,260




2017 2016 2017 2016$000 $000 $000 $000


Land and Buildings - Fair Value1,958,718 1,932,735 Gross Carrying Amount 1,958,718 1,932,735 731,320 686,795 Less: Accumulated Depreciation and Impairment 731,320 686,795


Plant and Equipment - Fair Value*207,119 187,328 Gross Carrying Amount 207,119 187,328 123,499 113,391 Less: Accumulated Depreciation and Impairment 123,499 113,391 83,620 73,937 Net Carrying Amount 83,620 73,937

Infrastructure Systems - Fair Value15,049 15,345 Gross Carrying Amount 15,049 15,345 2,711 2,328 Less: Accumulated Depreciation and Impairment 2,711 2,328 12,338 13,017 Net Carrying Amount 12,338 13,017

Leasehold Improvements - Fair Value*1,792 1,442 Gross Carrying Amount 1,792 1,442 1,047 566 Less: Accumulated Depreciation and Impairment 1,047 566 745 876 Net Carrying Amount 745 876

Total Property, Plant and Equipment1,324,101 1,333,770 At Net Carrying Amount 1,324,101 1,333,770





for the year ended 30 June 2017PARENT & CONSOLIDATION


Land Buildings Plant and Infrastructure Leasehold TotalEquipment Systems Improvements

$000 $000 $000 $000 $000 $000

2017Net carrying amount at start of year 136,632 1,109,308 73,937 13,017 876 1,333,770 Additions ----- 26,017 25,349 (295) 350 51,421 Disposals ----- ----- (504) ----- ----- (504)

----- ----- 110 ----- ----- 110 Impairment Losses (Recognised in "Other Gains/Losses) ----- ----- ----- ----- ----- ----- Depreciation Expense ----- (44,525) (15,306) (384) (481) (60,696) Reclassifications ----- (34) 34 ----- ----- ----- Net carrying amount at end of year 136,632 1,090,766 83,620 12,338 745 1,324,101

Land Buildings Plant and Infrastructure Leasehold TotalEquipment Systems Improvements

$000 $000 $000 $000 $000 $000

2016Net carrying amount at start of year 111,170 1,022,056 73,235 11,315 941 1,218,717 Additions ----- 39,368 15,095 1,020 133 55,616 Recognition of Assets Held for Sale (2,728) (65) ----- ----- ----- (2,793) Disposals ----- (3,149) (825) ----- ----- (3,974)

----- ----- 1,286 ----- ----- 1,286

28,190 96,988 ----- 1,027 (135) 126,070 Depreciation Expense ----- (45,594) (14,854) (345) (359) (61,152) Reclassifications ----- (296) ----- ----- 296 ----- Net carrying amount at end of year 136,632 1,109,308 73,937 13,017 876 1,333,770

Transfers within NSW Health Entities through Statement of Comprehensive Income Net Revaluation Increment Less Revaluation Decrements Recognised in Reserves

(i) Land and Buildings include land owned by the Health Administration Corporation but controlled by the SWSLHD [see note 1(k)].(ii) Indices provided by Liquid Pacific Holdings P/L during 2016/17 following the physical revaluation performed in 2015/16 were not applied as as they were deemed immaterial.




Note: The amount of ($0.295m) under Infrastructure Systems Additions, relates to a reversal of a 2015/16 Work in Progress accrual against the Bowral Hospital Redevelopment Project.


2017 2016 2017 2016$000 $000 $000 $000


Intangibles596 522 Cost (Gross Carrying Amount) 596 522 273 131 Less: Accumulated Amortisation and Impairment 273 131




391 391 (122) (122) 513 513

Total$000 $000

Intangibles

(142) 323

(142) 323

74

Total$000

391

2016Net carrying amount at start of year


Net carrying amount at end of yearAmortisation (Recognised in Depreciation and Amortisation)




Net carrying amount at start of yearAdditions (From Internal Development or Acquired Separately)


391 74

Intangibles$000

2017


2017 2016 2017 2016$000 $000 $000 $000


Assets Held for Sale----- 1,878 Land and Buildings ----- 1,878

----- 1,878 ----- 1,878






2017 Level 1 Level 2 Level 3 Total$000 $000 $000 $000

Property, Plant and Equipment (Note 20) - Land and Buildings ----- 71,345 1,092,803 1,164,148 - Infrastructure Systems ----- ----- 12,633 12,633

----- 71,345 1,105,436 1,176,781

There were no transfers between level 1 and 2 during the year ended 30 June 2017.Work in Progress and Newly Completed Projects are carried at cost, therefore excluded from figures above and as a result will not agree to Note 20.

2016 Level 1 Level 2 Level 3 Total$000 $000 $000 $000

Property, Plant and Equipment (Note 20) - Land and Buildings ----- 73,478 1,134,507 1,207,985 - Infrastructure Systems ----- ----- 13,017 13,017

----- 1,878 ----- 1,878

----- 75,356 1,147,524 1,222,880





For land, buildings and infrastructure systems the SWSLHD obtains external valuations by independent valuers at least every three years. The last revaluation was performed by Liquid Pacific Holdings P/L for the 2015/16 financial year. Liquid Pacific Holdings P/L is an independent entity and is not an associated entity of the SWSLHD.At the end of each reporting period a fair value assessment is made on any movements since the last revaluation, and a determination as to whether any adjustments need to be made. These adjustments are made by way of application of indices refer, note 20 reconcilation.




Non-Current Assets Held for Sale is a non-recurring item that is measured at fair value less cost to sell, which is less than its carrying amount. These assets are categorised as level 2.

For buildings and infrastructure, many assets are of a specialised nature or use, and thus the most appropriate valuation method is depreciated replacement cost. These assets are included as Level 3 as these assets have a high level of unobservable inputs. However, residential properties are valued on a market approach and included in level 2.



All of the restricted land has been classified as level 3 as, although observable inputs have been used, a significant level of professional judgement is required to adjust inputs in determining the land valuations. Certain parcels of land have zoning restrictions, for example hospital grounds, and values are adjusted accordingly.



23. Fair Value Measurement of Non-Financial Assetsc) Reconciliation of Recurring Level 3 Fair Value Measurements

2017

$000 $000 $000Fair value as at 1 July 2016 1,134,507 13,017 1,147,524 Depreciation (41,704) (384) (42,088)

Fair value as at 30 June 2017 1,092,803 12,633 1,105,436

2016 Land and Infrastructure Total Level 3Buildings Systems Recurring

$000 $000 $000Fair value as at 1 July 2015 950,769 11,315 962,084 Additions 151,414 1,020 152,434 Revaluation increments/ decrements recognised in other comprehensive income – included in line item 'Net increase / (decrease) in property, plant and equipment revaluation surplus’ 113,712 1,027 114,739 Transfers to Level 2 (40,754) ----- (40,754) Disposals (378) ----- (378) Depreciation (40,256) (345) (40,601)

Fair value as at 30 June 2016 1,134,507 13,017 1,147,524



Land and BuildingsInfrastructure

SystemsTotal Level 3

Recurring

Transfers to Level 2 relate to a number of Community Health and Childcare Centre properties which were re-assessed from Level 3 to Level 2 based on the high level of observable inputs available in the market.


2017 2016 2017 2016$000 $000 $000 $000


Category


8,671 9,040 Research Grants 8,671 9,040


448 599 Other - Clinical Services 448 599

3,670 3,509 Other - Community Services 3,670 3,509

1,506 1,356 Other - Nursing Services 1,506 1,356

55,029 52,797 55,029 52,797



The SWSLHD's financial statements include the following assets which are restricted by externally imposed conditions, eg. donor requirements. The assets are only available for application in accordance with the terms of the donor restrictions.


2017 2016 2017 2016$000 $000 $000 $000

25. PayablesCurrent

----- ----- Accrued Salaries, Wages and On-Costs 21,159 17,363 ----- ----- Taxation and Payroll Deductions 6,916 6,267

28,075 23,630 Accrued Liability - Purchase of Personnel Services ----- ----- 49,635 24,777 Creditors 49,635 24,777

Other Creditors 1,975 ----- - Capital Works 1,975 -----

11,910 13,096 - Payables to entities controlled by the immediate parent 11,910 13,096 20,843 16,428 - Other (Manual Expense Accruals) 20,843 16,428

112,438 77,931 112,438 77,931

Creditors is made up of balances to non-related parties. This includes Visiting Medical Officer accruals of $10.19m.

26. Borrowings

Current5,057 5,057 Other Loans and Deposits 5,057 5,057 932 348 Finance Leases [see note 2(u)] 932 348

5,989 5,405 5,989 5,405

Non-Current21,100 24,001 Other Loans and Deposits 21,100 24,001 33,745 34,905 Finance Leases [see note 2(u)] 33,745 34,905

54,845 58,906 54,845 58,906




The majority of 'Payables to entities controlled by the immediate parent' relate to balances payable to the Health Administration Corporation, an entity controlled by the immediate parent.

Other Loans and Deposits' is made of balances owed to the immediate parent, the NSW Ministry of Health. The majority of the balance is for the Liverpool Carpark Loan - $26.1m.

Details regarding credit risk, liquidity risk and market risk, including a maturity analysis of the above borrowings are disclosed in Note 36.

No assets have been pledged as security/collateral for liabilities and there are no restrictions on any title to property.Final Repayment of the loans is scheduled for 30th June, 2019 for the EEGP Fairfield Hospital Utilities Upgrade loan and 25th June, 2024 for the Liverpool Carpark loan.

The balance of 'Other Creditors - Capital Works' relates to the outstanding amount to be paid for the purchase of the Liverpool Hospital da Vinci Xi Robotic Surgical System.

"Finance Leases"; SWSLHD has entered into a collaborative relationship with the Ingham Institute for Applied Medical Research to create a research precinct on the grounds of Liverpool Hospital. The goal is to undertake medical research that can be translated & applied to the needs of the local population and wider Australia. As part fo the arrangement the Ingham Institute Building has been sub-leased to SWSLHD to allow its employees to conduct research across a number of streams. This arrangement has been classified as a Finance Lease. The final repayments for the Ingham Finance Lease are to be made in 2051/52.


2017 2016 2017 2016$000 $000 $000 $000

26. Borrowingsa) Finance Leases

932 943 Not later than one year 932 943 3,919 3,966 Later than one year and not later than five years 3,919 3,966

41,752 44,144 Later than five years 41,752 44,144

46,603 49,053 Minimum Lease Payments 46,603 49,053

11,925 13,800 Less: Future Finance Charges 11,925 13,800

34,677 35,253 Present Value of Minimum Lease Payments 34,677 35,253 The present value of finance lease payments is as follows:

395 348 Not later than one year 395 348 1,836 1,648 Later than one year and not later than five years 1,836 1,648

32,447 33,257 Later than five years 32,447 33,257

34,677 35,253 Present Value of Minimum Lease Payments Classified as: 34,677 35,253

932 348 Current (Note 26) 932 348 33,745 34,905 Non-Current (Note 26) 33,745 34,905

34,677 35,253 34,677 35,253

Minimum lease payments in relation to finance leases are payable as follows:

A Finance Lease arrangement exists for the sub-lease of the Ingham Institute for Applied Medical Research building to SWSLHD.This arrangement has a term of 40 years which ends in 2051/52 and is recognised as a Non-Cash Financing activity. As such it is excluded from the Statement of Cash Flows.

Notes to and forming part of the Financial Statementsfor the year ended 30 June 2017



2017 2016 2017 2016$000 $000 $000 $000

27. Provisions

Current----- ----- Annual Leave - Short Term Benefit 103,540 95,076 ----- ----- Annual Leave - Long Term Benefit 67,287 68,265 ----- ----- Long Service Leave Consequential On-Costs 20,561 20,116

191,388 183,457 Provision for Personnel Services Liability ----- ----- 2,032 ----- Other - Allocated Days Off (ADO) Liability 2,032 -----

193,420 183,457 193,420 183,457

Non-Current----- ----- Long Service Leave Consequential On-Costs 1,788 1,749


1,788 1,749 1,788 1,749

Aggregate Employee Benefits and Related On-Costs----- ----- Provisions - Current 191,388 183,457 ----- ----- Provisions - Non-Current 1,788 1,749 ----- ----- Accrued Salaries, Wages and On-Costs (Note 25) 28,075 23,630


221,251 208,836 221,251 208,836


Current1,167 585 Income in Advance 1,167 585

1,167 585 1,167 585

Non-Current21,008 ----- Income in Advance 21,008 -----

21,008 ----- 21,008 -----



In 2016/17 SWSLHD entered into a contractual arrangement with Western Sydney University (WSU) and the Health Administration Corporation (HAC) for the construction of the Macarthur Clinical School on the land at Campbelltown Hospital.The economic substance of this transaction has been classified an operating lease and the construction costs borne by WSU treated as Rental Income in Advance over the lease term of 40 years. This transaction comprises $21.6m of the Income in Advance balance (Current $0.542m and Non-Current $21.008m)This arrangement has been recognised as a Non-Cash "Donation" and as such is not included in the Statement of Cash Flows.


2017 2016 2017 2016$000 $000 $000 $000



799 1,453 Not later than one year 799 1,453 229 ----- Later than one year and not later than five years 229 -----



2,974 3,435 Not later than one year 2,974 3,435 3,138 3,102 Later than one year and not later than five years 3,138 3,102



Aggregate capital expenditure for the acquisition of buildings, plant and equipment and infrastructure systems contracted for at balance date and not provided for:

The total 'Capital Expenditure Commitments' and 'Operating Lease Commitments' of $7.139M as at 30 June 2017 (2016 $7.990M) includes input tax credits of $0.556M that are expected to be recoverable from the Australian Taxation Office (2016 $0.594M).


The operating lease commitments above are for motor vehicles and medical equipment.

The 'capital commitments' contracted but not provided for relate to capital works overseen by the Health Administration Corporation, an entity controlled by the immediate parent.




30. Trust Funds

2017 2016 2017 2016 2017 2016 2017 2016$000 $000 $000 $000 $000 $000 $000 $000

541 507 424 424 8 4 973 935

Revenue 152 34 154 126 38,619 35,504 38,925 35,664

Expenses (80) 0 (138) (126) (38,541) (35,500) (38,759) (35,626)

613 541 440 424 86 8 1,139 973

Trust Funds





The SWSLHD holds trust funds of $1.1 million which are held for the safe keeping of patients' monies, deposits on hired items of equipment, staff donations and Private Practice Trusts.These funds are excluded from the financial statements as the SWSLHD cannot use them for the achievement of its objectives. The following is a summary of the transactions in the trust account.

Patient Trust Refundable Private Practice TotalDeposits


2017 2016 2017 2016$000 $000 $000 $000


46,373 10,645 Net Cash Flows from Operating Activities 46,373 10,645 (60,838) (61,274) Depreciation and Amortisation (60,838) (61,274) (3,941) (2,262) Allowance for Impairment (3,941) (2,262)

96 19 (Increase)/ Decrease Income in Advance 96 19 (10,002) (5,364) (Increase)/ Decrease in Provisions (10,002) (5,364) (2,267) 24,664 Increase / (Decrease) in Prepayments and Other Assets (2,267) 24,664

(34,693) 10,349 (Increase)/ Decrease in Payables from Operating Activities (34,693) 10,349 (614) 582 Net Gain/ (Loss) on Sale of Property, Plant and Equipment (614) 582 575 270 Amortisation of Finance Lease Liabilities 575 270 110 ----- Donated 110 -----

(65,201) (22,371) Net Result (65,201) (22,371)


21,795 ----- Assets Received by Donation and Other 21,795 ----- ----- 35,522 Property, Plant and Equipment Acquired by Finance Lease ----- 35,522

21,795 35,522 21,795 35,522






It is considered impracticable and immaterial to quantify the monetary value of voluntary services provided to the SWSLHD. Services provided include:


All money and personal effects of patients which are left in the custody of the SWSLHD by any patient who is discharged or dies in the hospital and which are not claimed by the person lawfully entitled thereto within a period of twelve months are recognised as the property of the SWSLHD.


The majority of 'Assets Received by Donation and Other" were from Western Sydney University - refer to Note 28 Other Liabilities.



Net Result


Cash Flows

$000

1,326,53270,758

Cash Adjustment for Locally Funded Projects 5,334Finalisation of 2016/17 Recurrent Subsidy (23,752)

New Initiatives & Projects 31,663Drug & Alcohol Service 718Mental Health Service 118TMF Adjustment (491)Nurse Strategy Reserve 910


Growth & Escalation

Special Projects



The Actual cashflows were favourable to the Adjusted Budget by $6.4m. This was a result of Actual Cash being $10.4m more in Operating Activities, $1.1m less in Investing Activities and $5.1m less in Financing Activities.

Movements in the level of the NSW Ministry of Health Recurrent Allocation that have occurred since the time of the initial allocation on 21 June, 2016 are as follows:


The variance of Net Assets budget to actual was $1m favourable. This was a result of higher Cash and Cash Equivalents actuals to budget due to the additional cash provided to fund Locally Funded Capital Initiatives in the coming financial year. This favourable impact in Assets was offset by higher Liability actuals to budget, particulary in Payables.

Favourability in Total Revenue of $7.1m, mainly due to the TMF Workers Compensation Hindsight Revenue Adjustment (FY11/12 & FY 13/14) of $6.7m. Expense was un-favourable by $2.0m largely as a result of the unfunded portion of the FY17 Workers Compensation premium of $2.6m - refer to Note 2.Additionally there was a $3.7m un-favourability in Other Items, specifically the Patient Fees Provision for Doubtful Debts line item of $3.2m. Management judged the increased provision necessary due to the year on year increase in Ineligible Patient revenue being recognised and the ageing of those Debtor balances being considered impaired.

Initial Allocation, 21/06/2016


(a) Financial Instrument CategoriesPARENT AND CONSOLIDATIONFinancial Assets Class: Carrying Amount Carrying Amount

2017 2016$000 $000

Cash and Cash Equivalents (note 17) 76,895 61,463 Receivables (note 18)* 41,045 47,180

117,940 108,643


Borrowings (note 26) 60,834 64,311 Payables (note 25)** 84,363 54,301

145,197 118,612 Notes* Excludes statutory receivables and prepayments (i.e. not within scope of AASB7 Financial Instruments Disclosures)


N/ALoans and receivables (at amortised cost)

**Excludes statutory payables and unearned revenue (i.e. not within scope of AASB7 Financial Instruments Disclosures). In addition Accrued Salaries, Wages and On-Costs are have been excluded as not within the scope of AASB7. Prior year comparatives have been restated as a result.

Category



The SWSLHD's principal financial instruments are outlined below. These financial instruments arise directly from the SWSLHD's operations or are required to finance its operations. The SWSLHD does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.The SWSLHD's main risks arising from financial instruments are outlined below, together with the SWSLHD's objectives, policies and processes for measuring and managing risk. Further quantitative and qualitative disclosures are included throughout these financial statements.

The Chief Executive has overall responsibility for the establishment and oversight of risk management and reviews and agrees policies for managing each of these risks. Risk management policies are established to identify and analyse the risks faced by the SWSLHD, to set risk limits and controls and to monitor risks. Compliance with policies is reviewed on a continuous basis.




(b) Credit Risk

Cash




2017 $000 $000 $000<3 months overdue 1,461 1,258 203 3 months - 6 months overdue 4,968 2,713 2,255 > 6 months overdue 989 ----- 989 2016<3 months overdue 1,695 1,695 ----- 3 months - 6 months overdue 1,084 928 156 > 6 months overdue 2,163 ----- 2,163

Notes1 Each column in the table reports "gross receivables".

In addition Patient Fees Compensables are frequently not settled within 6 months of the date of the service provision due to the length of time it takes to settle legal claims. Most of the SWSLHD's debtors are health insurance companies or compensation insurers settling claims in respect of inpatient treatments.

The SWSLHD is not materially exposed to concentrations of credit risk to a single trade debtor or group of debtors. Based on past experience, debtors that are not past due (2017: $43.569M ; 2016: $49.932M) and not more than 3 months past due (2017: $1.258M ; 2016: $1.695M) are not considered impaired.



Credit risk arises when there is the possibility that the counterparty will default on their contractual obligations, resulting in a financial loss to the SWSLHD. The maximum exposure to credit risk is generally represented by the carrying amount of the financial assets (net of any allowance for impairment).

Credit risk associated with the SWSLHD's financial assets, other than receivables, is managed through the selection of counterparties and establishment of minimum credit rating standards. Authority deposits held with NSW TCorp are guaranteed by the State.


All trade debtors are recognised as amounts receivable at balance date. Collectability of trade debtors is reviewed on an ongoing basis. Procedures as established in the NSW Ministry of Health Accounting Manual for Public Health Organisations and Fee Procedures Manual are followed to recover outstanding amounts, including letters of demand. Debts which are known to be uncollectable are written off. An allowance for impairment is raised when there is objective evidence that the SWSLHD will not be able to collect all amounts due. This evidence includes past experience and current and expected changes in economic conditions and debtor credit ratings. No interest is earned on trade debtors.

Credit risk arises from financial assets of the SWSLHD, including cash, receivables and authority deposits. No collateral is held by the SWSLHD. The SWSLHD has not granted any financial guarantees.





Authority Deposits

(c) Liquidity Risk


The SWSLHD has exposure to liquidity risk. However, the risk is minimised by the service agreement with the NSW Ministry of Health, as the annual service agreement requires local management to control its financial liquidity and in particular meet benchmarks for the payment of creditors. Where the SWSLHD fails to meet service agreement performance standards, the Ministry as the state manager can take action in accordance with annual performance framework requirements, including providing financial support and increased management interaction (refer Note 1).



The SWSLHD has negotiated no loan outside of arrangements with the NSW Ministry of Health or Treasury.During the current and prior years, there were no defaults of loans payable. No assets have been pledged as collateral.

The SWSLHD has placed funds on deposit with TCorp, which has been rated 'AAA' by Standard and Poor's. These deposits are similar to money market or bank deposits and can be placed 'at call' or for a fixed term. For fixed term deposits, the interest rate payable by TCorp is negotiated initially and is fixed for the term of the deposit, while the interest rate payable on at call deposits can vary. The deposits at balance date were earning an average interest rate of 2.40% (2016: 1.96%), while over the year the weighted average interest rate was 2.37% (2016: 2.47%) on a weighted average balance during the year of $38.5m (2016: $37.6m). None of these assets are past due or impaired.

Liquidity risk is the risk that the SWSLHD will be unable to meet its payment obligations when they fall due. The SWSLHD continuously manages risk through monitoring future cash flows and maturities planning to ensure adequate holding of high quality liquid assets. The objective is to maintain a balance between continuity of funding and flexibility through effective management of cash, investments and liquid assets and liabilities.



Weighted Average Effective

Interest RateNominal Amount 1

Fixed Interest Rate

Variable Interest Rate

Non - Interest Bearing < 1 Yr 1-5 Yr > 5Yr

2017 $000 $000 $000 $000 $000 $000 $000Payables:- Creditors 63,204 ----- ----- 63,204 63,204 ----- ----- Borrowings:- Loans and Deposits 7.74% 33,685 33,685 ----- ----- 5,000 20,000 8,685 - Finance Leases 1.55% 46,603 ----- 46,603 ----- 932 3,919 41,752 Other (EEGP Fairfield Hospital) 2.51% 114 114 ----- ----- 57 57 -----

143,606 33,799 46,603 63,204 69,193 23,976 50,437 2016

Payables:- Creditors 36,938 ----- ----- 36,938 36,938 ----- ----- Borrowings:- Loans and Deposits 7.74% 38,685 38,685 ----- ----- 5,000 20,000 13,685 - Finance Leases 1.69% 49,053 ----- 49,053 ----- 943 3,966 44,144 Other (EEGP Fairfield Hospital) 2.51% 171 171 ----- ----- 57 114 ----- 124,847 38,856 49,053 36,938 42,938 24,080 57,829 Notes:

3 The 'Loans and Deposits' and Other (EEGP Fairfield Hospital) relate to borrowings with the NSW Ministry of Health, the immediate parent.

1 The amounts disclosed are the contractual undiscounted cash flows of each class of financial liabilities based on the earliest date on which the SWSLHD can be required to pay. The tables include both interest and principal cash flows and therefore will not reconcile to the Statement of Financial Position.




The table below summarises the maturity profile of the SWSLHD's financial liabilities together with the interest rate exposure.

2 Accrued Salaries Wages, On-Costs and Payroll Deductions have been excluded from payables as not within the scope of AASB7 Financial Instruments: Disclosures. Prior year comparatives have been restated as a result.


(d) Market Risk

Interest rate risk

Net Equity Net EquityResult Result

2017 $000 $000 $000 $000 $000Financial AssetsCash and Cash Equivalents 76,895 (769) (769) 769 769 Receivables 41,045 ----- ----- ----- -----

Financial LiabilitiesPayables* 84,363 ----- ----- ----- ----- Borrowings 60,834 608 608 (608) (608)

2016Financial AssetsCash and Cash Equivalents 61,463 (615) (615) 615 615 Receivables 47,180 ----- ----- ----- ----- Financial LiabilitiesPayables* 54,301 ----- ----- ----- ----- Borrowings 64,311 643 643 (643) (643)

The effect on net result and equity due to a reasonably possible change in risk variable is outlined in the information below, for interest rate risk and other price risk. A reasonably possible change in risk variable has been determined after taking into account the economic environment in which the SWSLHD operates and the time frame for the assessment (i.e. until the end of the next annual reporting period). The sensitivity analysis is based on risk exposures in existence at the Statement of Financial Position date. The analysis is performed on the same basis for 2016. The analysis assumes that all other variables remain constant.

Exposure to interest rate risk arises primarily through the SWSLHD's interest bearing liabilities.

Both NSW Treasury and NSW Ministry of Health loans are set at fixed rates and therefore are generally not affected by fluctuations in market rates. The SWSLHD does not account for any fixed rate financial instruments at fair value through profit or loss or as available-for-sale. Therefore, for these financial instruments, a change of interest rates would not affect net result or equity.A reasonably possible change of +/-1% is used consistent with current trends in interest rates (based on official RBA interest rate volatility over the last five years). The basis will be reviewed annually and amended where there is a structural change in the level of interest rate volatility.

+1%-1%

*Accrued Salaries Wages, On-Costs and Payroll Deductions have been excluded from payables as not within the scope of AASB7 Financial Instruments Disclosures. Prior year comparatives have been restated as a result.

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. The SWSLHD's exposures to market risk are primarily through interest rate risk on the SWSLHD's borrowings and other price risks associated with the movement in the unit price of the Hour-Glass Investment facilities. The SWSLHD has no exposure to foreign currency risk and does not enter into commodity contracts.



However, the SWSLHD is not permitted to borrow external to the NSW Ministry of Health (except energy loans which are negotiated through NSW Treasury).

The SWSLHD's exposure to interest rate risk is set out below.

Carrying Amount




2017$000

Short-term employee benefits 565Post-employment benefits 50

615




No known matters have arisen subsequent to balance date that would require these financial statements to be amended.


During the financial year, South Western Sydney Local Health District obtained key management personnel services from the immediate parent and incurred $0.460m for these services.



Compensation for the Minister for Health is paid by the Legislature and is not reimbursed by the Ministry of Health and its controlled entities. Accordingly no such amounts are included in the key management personnel compensation disclosures above.Remuneration for the Secretary and Deputy Secretaries are paid by the Ministry of Health and is not reimbursed by the health entities. Accordingly no such amounts are included in the key management personnel compensation disclosures above.

COVER PAGE 7

Sydney Local Health District





Opinion

I have audited the accompanying financial statements of the Sydney Local Health District (the District),

which comprise the statement of financial position as at 30 June 2017, the statement of

comprehensive income, the statement of changes in equity, the statement of cash flows for the year

then ended, notes comprising a summary of significant accounting policies and other explanatory

information, of the District and the consolidated entity. The consolidated entity comprises the District

and the entities it controlled at the year’s end or from time to time during the financial year.




accordance with Australian Accounting Standards.


the Public Finance and Audit Regulation 2015.


Basis for Opinion





the:




I have fulfilled my other ethical responsibilities in accordance with APES 110.

Parliament promotes independence by ensuring the Auditor-General and the Audit Office of



General




audit opinion.

Emphasis of Matter

Without modification to the opinion expressed above, I draw attention to the basis of presenting adjusted budget information detailed Note 1 (ae). The note states that AASB 1055 ‘Budgetary Reporting’ is not applicable to the District. It also states that, unlike the requirement in AASB 1055 ‘Budgetary Reporting’ to present original budget information, the District’s financial statements present adjusted budget information.




as the Chief Executive determines is necessary to enable the preparation and fair presentation of the



consolidated entity to continue as a going concern except where operations will cease as a result of

an administrative restructure. The assessment must disclose, as applicable, matters related to going









Misstatements can arise from fraud or error. Misstatements are considered material if, individually or in

aggregate, they could reasonably be expected to influence the economic decisions users take based

on the financial statements.


and Assurance Standards Board website at: www.auasb.gov.au/auditors_responsibilities/ar4.pdf.



• that the District or the consolidated entity carried out its activities effectively, efficiently and

economically


statements




A Oyetunji


6 September 2017

SYDNEY


Actual Adjusted

Budget

Unaudited


Budget

Unaudited

Actual

2017 2017 2016 2017 2017 2016

$000 $000 $000 $000 $000 $000


Operating Expenses

----- ----- ----- Employee Related 2 1,009,384 996,238 988,848




52,667 53,360 46,606 Depreciation and Amortisation 1(l), 5 53,511 53,360 47,428


4 6 7 Finance Costs 1(g), 7 4 6 7

12,143 12,143 8,581 Payments to Affiliated Health Organisations 8 12,143 12,143 8,581

1,698,046 1,710,005 1,525,793 Total Expenses excluding losses 1,730,386 1,733,788 1,593,505

Revenue

1,281,324 1,281,324 1,239,083 NSW Ministry of Health Recurrent Allocations 1(h) 1,281,324 1,281,324 1,239,083




4,732 5,446 5,559 Investment Revenue 1(h),10 5,301 5,446 6,088


41,494 43,148 27,853 Other Revenue 13 44,097 43,148 30,047

1,606,737 1,618,997 1,528,051 Total Revenue 1,640,608 1,642,780 1,596,121

(454) ----- (107) Gain / (Loss) on Disposal 14 (473) ----- (134)

(942) (770) (5,334) Other Gains / (Losses) 15 (942) (770) (5,334)

(92,705) (91,778) (3,183) Net Result 31 (91,193) (91,778) (2,852)




----- ----- 223,237 Equipment Revaluation Surplus 20 ----- ----- 223,202

----- ----- 223,237 Total Other Comprehensive Income ----- ----- 223,202

(92,705) (91,778) 220,054 TOTAL COMPREHENSIVE INCOME (91,193) (91,778) 220,350




CONSOLIDATIONPARENT

Actual Adjusted

Budget

Unaudited


Budget

Unaudited

Actual

2017 2017 2016 2017 2017 2016

$000 $000 $000 $000 $000 $000

ASSETS

Current Assets


77,932 79,333 53,092 Receivables 18 78,515 80,904 54,665

9,225 7,216 7,217 Inventories 19 9,225 7,216 7,217


Non-Current Assets


1,110,726 1,094,999 1,126,346 - Land and Buildings 20 1,118,383 1,103,118 1,134,464


430 444 443 - Infrastructure Systems 20 430 444 443

149 427 427 - Leasehold Improvements 20 149 427 427

1,207,641 1,209,971 1,204,970 Total Property, Plant & Equipment 1,217,782 1,220,724 1,215,722

553 659 659 Intangible Assets 21 553 659 659

3,552 2,501 2,501 Other 22 3,552 2,501 2,501

1,211,746 1,213,131 1,208,130 Total Non-Current Assets 1,221,887 1,223,884 1,218,882

1,475,567 1,456,241 1,448,239 Total Assets 1,509,341 1,489,071 1,481,069

LIABILITIES

Current Liabilities

94,823 86,882 83,144 Payables 25 95,075 87,115 83,372

630 ----- ----- Borrowings 26 630 ----- -----

298,163 292,910 196,859 Provisions 27 298,633 293,520 197,469

251 137 137 Other 28 346 684 684



6,319 ----- ----- Borrowings 26 6,319 ----- -----

1,985 1,985 1,998 Provisions 27 1,985 1,985 1,998

8,304 1,985 1,998 Total Non-Current Liabilities 8,304 1,985 1,998


1,073,396 1,074,327 1,166,101 Net Assets 1,106,353 1,105,767 1,197,546

EQUITY

367,318 367,666 367,666 Reserves 369,821 370,168 370,169


1,073,396 1,074,327 1,166,101 Total Equity 1,106,353 1,105,767 1,197,546


CONSOLIDATIONPARENT


Statement of Financial Position as at 30 June 2017

PARENT Notes Accumulated Revaluation Total

Funds Surplus

$000 $000 $000

Balance at 1 July 2016 798,435 367,666 1,166,101

Total Equity at 1 July 2016 798,435 367,666 1,166,101



Net Increase/(Decrease) in Property, Plant & Equipment 20 ----- ----- -----





Balance at 30 June 2017 706,078 367,318 1,073,396

Balance at 1 July 2015 801,544 144,503 946,047







Total Other Comprehensive Income 74 223,163 223,237

Total Comprehensive Income for the year (3,109) 223,163 220,054

Balance at 30 June 2016 798,435 367,666 1,166,101




CONSOLIDATION Notes Accumulated Revaluation Total

Funds Surplus

$000 $000 $000

Balance at 1 July 2016 827,377 370,169 1,197,546

Total Equity at 1 July 2016 827,377 370,169 1,197,546



Net Increase/(Decrease) in Property, Plant & Equipment 20 ----- ----- -----





Balance at 30 June 2017 736,532 369,821 1,106,353

Balance at 1 July 2015 830,155 147,041 977,196







Total Other Comprehensive Income 74 223,128 223,202

Total Comprehensive Income for the year (2,778) 223,128 220,350

Balance at 30 June 2016 827,377 370,169 1,197,546




Actual Adjusted

Budget

Unaudited


Budget

Unaudited

Actual

2017 2017 2016 2017 2017 2016

$000 $000 $000 $000 $000 $000


Payments



(1,601,297) (1,620,767) (1,512,102) Other (616,585) (637,081) (576,174)

(1,635,189) (1,655,784) (1,541,782) Total Payments (1,643,085) (1,656,496) (1,550,129)

Receipts

1,281,324 1,281,324 1,239,083 NSW Ministry of Health Recurrent Allocations 1,281,324 1,281,324 1,239,083


----- ----- ----- Reimbursements from the Crown Entity 16,655 16,655 16,632


4,667 5,343 5,444 Interest Received 5,236 5,343 5,973


96,068 91,723 62,067 Other 98,318 91,835 65,095

1,680,640 1,690,855 1,586,108 Total Receipts 1,691,333 1,691,568 1,595,214



8 ----- 282 Proceeds from Sale of Property, Plant & Equipment and Intangibles 8 ----- 282

----- ----- ----- Proceeds from Sale of Investments ----- ----- 402




6,992 ----- ----- Proceeds from Borrowings and Advances 6,992 ----- -----

(48) (6) (224) Repayment of Borrowings and Advances (48) (6) (224)

6,944 (6) (224) NET CASH FLOWS FROM FINANCING ACTIVITIES 6,944 (6) (224)

(3,136) (23,239) 3,507 NET INCREASE / (DECREASE) IN CASH (591) (23,238) 3,635






CONSOLIDATIONPARENT


a)

*

*

*

b)

*

*

*

c)

SLHD's financial statements are general purpose financial statements which have been prepared on an accrual basis and in accordance with

applicable Australian Accounting Standards (which include Australian Accounting Interpretations), the requirements of the Health Services Act 1997

and its regulations (including observation of the Accounts and Audit Determination for Public Health Organisations), the Public Finance and Audit Act

1983 and Public Finance and Audit Regulation 2015, and the Treasurers' Directions. Further information on the unaudited adjusted budget figures can

be found at Note 1(ae).

As a consequence the values in the financial statements presented herein consist of the parent entity and the consolidated entity which comprises the

Parent, Anzac Health and Medical Research Foundation and Special Purpose Service Entity. In the process of preparing the consolidated financial

statements consisting of the controlling and controlled entities, all inter-entity transactions and balances have been eliminated, and like transactions

and other events are accounted for using uniform accounting policies.

SLHD is a NSW Government entity and is controlled by the NSW Ministry of Health, which is the immediate parent. The reporting entity is also


reporting entity is a not-for-profit entity (as profit is not its principal objective).

These consolidated financial statements for the year ended 30 June 2017 have been authorised for issue by the Chief Executive on 5 September

2017.

The financial statements of SLHD have been prepared on a going concern basis.

The Secretary of Health, the Chair of Sydney Local Health District Board and the Chief Executive, through the Service Agreement have agreed to

service and funding levels for the forward financial year. The Service Agreement sets out the level of financial resources for public health services

under SLHD's control and the source of these funds. By agreement, the Service Agreement requires local management to control its financial liquidity

and in particular meet benchmarks for the payment of creditors. Where SLHD fails to meet Service Agreement performance standards, the Ministry of

Health as the state manager can take action in accordance with annual performance framework requirements, including financial support and

increased management interaction by the Ministry.


The Anzac Health and Medical Research Foundation is a controlled entity of SLHD conducting medical research on the Concord Hospital

campus and the consolidated entity comprises the Parent, Special Purpose Service Entity and Anzac Health and Medical Research

Foundation.

The parent entity, comprises all the operating activities of the Hospital Facilities and the Community Health Centres under its control. It also

encompasses the Restricted Assets (as disclosed in notes 16 and 24), which, while containing assets which are restricted for specified uses

by the grantor or the donor, are nevertheless controlled by the parent entity.

Sydney Local Health District Special Purpose Service Entity which was established as a Division of the SLHD on 1 January 2011 in

accordance with the Health Services Act 1997. This Division provides personnel services to enable SLHD to exercise its functions.


SLHD, as a reporting entity, comprises all the entities under its control, namely:


Sydney Local Health District (SLHD) was established under the provisions of the Health Services Act 1997 with effect from 1 January 2011.




SLHD has the capacity to review timing of subsidy cashflows to ensure that debts can be paid when they become due and payable.

SLHD has developed an Efficiency and Improvement Plan (EIP) which identifies revenue improvement and cost saving strategies. Benefits

from the EIP are retained by SLHD and assist in meeting its overall budget target. The EIP is monitored and evaluated by the Ministry

throughout the financial year.


Property, plant and equipment, assets (or disposal groups) held for sale and financial assets at 'fair value through profit and loss' and available for sale

are measured at fair value. Other financial statement items are prepared in accordance with the historical cost convention except where specified

otherwise.










d)

e)

i)

ii)

iii)

iv)

f)

g)

Salaries and wages (including non-monetary benefits) and paid sick leave that are expected to be settled wholly within 12 months after the

end of the period in which the employees render the service are recognised and measured at the undiscounted amounts of the benefits.

Annual leave is not expected to be settled wholly before twelve months after the end of the annual reporting period in which the employees

render the related service. As such, it is required to be measured at present value in accordance with AASB 119 Employee Benefits (although


Actuarial advice obtained by NSW Treasury, a controlled entity of the ultimate parent, has confirmed that using the nominal annual leave

balance plus the annual leave entitlements accrued while taking annual leave can be used to approximate the present value of the annual

leave liability. On-costs of 17.2% are applied to the value of leave payable at 30 June 2017 (comparable on-costs for 30 June 2016 were

16.7%).SLHD has assessed the actuarial advice based on the SLHD’s circumstances and has determined that the effect of discounting is

immaterial to annual leave.


than the benefits accrued in the future.

SLHD's liability for Long Service Leave and defined benefit superannuation (State Authorities Superannuation Scheme and State

Superannuation Scheme) are assumed by the Crown Entity, which is a controlled entity of the ultimate parent.

SLHD accounts for the liability as having been extinguished resulting in the amount assumed being shown as part of the non-monetary

revenue item described as 'Acceptance by the Crown Entity of employee benefits'.

Specific on-costs relating to Long Service Leave assumed by the Crown Entity are borne by SLHD as shown in Note 27.

Long Service Leave is measured at present value in accordance with AASB 119, Employee Benefits. This is based on the application of

certain factors (specified in NSW Treasury Circular 15/09) to employees with five or more years of service, using current rates of pay. These

factors were determined based on an actuarial review to approximate present value.

The superannuation expense for the reporting period is determined by using the formulae specified in the Treasurer’s Directions. The expense

for certain superannuation schemes (i.e. Basic Benefit and First State Super) is calculated as a percentage of the employee's salary. For other

superannuation schemes (i.e. State Superannuation Scheme and State Authorities Superannuation Scheme), the expense is calculated as a

multiple of the employee's superannuation contributions.

Consequential costs to employment are recognised as liabilities and expenses where the employee benefits to which they relate have been

recognised. This includes outstanding amounts of workers’ compensation insurance premiums and fringe benefits tax.




Other Provisions

Finance costs are recognised as expenses in the period in which they are incurred in accordance with NSW Treasury's Mandate to not-for-profit NSW

general government sector entities.

SLHD's insurance activities are conducted through the NSW Treasury Managed Fund (TMF) Scheme of self insurance for government entities. The

expense (premium) is determined by the Fund Manager based on past claims experience. The TMF is managed by Insurance and Care NSW (iCare),

a controlled entity of the ultimate parent.




Other provisions exist when SLHD has a present legal or constructive obligation as a result of a past event; it is probable that an outflow of

resources will be required to settle the obligation; and a reliable estimate can be made of the amount of the obligation.

Insurance

Finance Costs





h)

*

*

Grants and contributions are recognised as revenues when SLHD obtains control over the assets comprising the contributions. Control over

contributions is normally obtained upon the receipt of cash.

Specialist doctors with rights of private practice are subject to an infrastructure charge for the use of hospital facilities at rates determined by the NSW


SLHD uses a number of facilities owned and maintained by the local authorities in the area to deliver community health services for which no charges

are raised by the authorities.


Investment Revenue


hospitalised or attending for inpatient treatment as a result of motor vehicle accidents. SLHD recognises the revenue on an accruals basis from the

time the patient is treated or admitted into hospital.


Debt Forgiveness








for the provision of medicines for the treatment of chronic conditions where specific criteria are met in respect of day admitted patients, non admitted

patients or patients on discharge. Revenue is recognised when the drugs have been provided to the patient.

Patient Fees



services to entitled veterans. For inpatient services, revenue is recognised by SLHD on an accrual basis by reference to patient admissions. Non



a monthly charge raised by SLHD based on a percentage of receipts generated.

the residual of the Private Practice Trust Fund at the end of each financial year, such sum being credited for SLHD use in the advancement of

SLHD or individuals within it.


Where material, the cost method of accounting is used for the initial recording of all such services. Cost is determined as the fair value of the services

given and is then recognised as revenue with a matching expense.

Dividend revenue is recognised in accordance with AASB 118 Revenue, when SLHD's right to receive payment is established.



Income Recognition

Sale of Goods

Income is measured at the fair value of the consideration or contribution received or receivable. Additional comments regarding the accounting policies


Revenue from the sale of goods is recognised as revenue when SLHD transfers the significant risks and rewards of ownership of the assets.





i)

*

*

j)

k)



Where payment for an asset is deferred beyond normal credit terms, its cost is the cash price equivalent, i.e. the deferred payment amount is

effectively discounted over the period of credit.


Payments are made by the immediate parent on the basis of the allocation for SLHD as adjusted for approved supplementations mostly for salary

agreements and approved enhancement projects.

This allocation is included in the Statement of Comprehensive Income before arriving at the "Net Result" on the basis that the allocation is earned in



General operating expenses/revenues of $12.143 million (Tresillian and Scarba) have only been included in the Statement of Comprehensive Income

prepared to the extent of the cash payments made to the Health Organisations concerned. SLHD is not deemed to own or control the various

assets/liabilities of the aforementioned Health Organisations and such amounts have been excluded from the Statement of Financial Position. Any

exceptions are specifically listed in the notes that follow.

amount of GST incurred by SLHD as a purchaser that is not recoverable from the Australian Taxation Office is recognised as part of an

asset's cost of acquisition or as part of an item of expense; and




Land and buildings are owned by the Health Administration Corporation, an entity controlled by the immediate parent. Land and buildings which are

operated/occupied by SLHD are deemed to be controlled by SLHD and are reflected as such in the financial statements.

Assets acquired are initially recognised at cost. Cost is the amount of cash or cash equivalents paid or the fair value of the other consideration given to

acquire the asset at the time of its acquisition or construction or, where applicable, the amount attributed to that asset when initially recognised in





Most assets are acquired from Health Administration Corporation, a controlled entity of the immediate parent.


Refer to Note 1(ab) for assets transferred as a result of equity transfer.





l) Depreciation of Property, Plant and Equipment

2017 2016

2.5% 2.5%

20% 20%

10% 10%

12.5% 12.5%

5% 5%

2.5% 2.5%

25% 25%

12.5% 12.5%

20% 20%

10% 10%

10% 10%

4% 4%

m) Revaluation of Non-Current Assets




or decrements.

Non-specialised assets with short useful lives are measured at depreciated historical cost, as an approximation of fair value. The entity has assessed



Buildings

Physical non-current assets are valued in accordance with the 'Valuation of Physical Non-Current Assets at Fair Value' Policy and Guidelines Paper

(TPP 14-01). This policy adopts fair value in accordance with AASB 13 Fair Value Measurement, AASB 116 Property, Plant and Equipment and AASB

140 Investment Property.

Electro Medical Equipment

Investment property is separately discussed at Note 1(p).



being measured, including any socio-political restrictions imposed by government. In most cases, after taking into account these considerations, the

highest and best use is the existing use. In limited circumstances, the highest and best use may be a feasible alternative use, where there are no




Fair value of property, plant and equipment is based on a market participants’ perspective, using valuation techniques (market approach, cost




- Costing less than $200,000

- Costing more than or equal to $200,000

Furniture, Fittings and Furnishings


“Infrastructure Systems” means assets that comprise public facilities and which provide essential services and enhance the productive capacity of the


Computer Equipment

*Buildings - Leasehold

Motor Vehicle Sedans

Motor Vehicles, Trucks & Vans

Office Equipment

Plant and Machinery


over its useful life to SLHD. Land is not a depreciable asset. All material identifiable components of assets are depreciated over their useful lives.

Linen





n) Impairment of Property, Plant and Equipment

o) Restoration Costs

p) Investment Properties

q) Intangible Assets

r) Maintenance

s) Leased Assets


liability.

Intangible assets are tested for impairment where an indicator of impairment exists. If the recoverable amount is less than its carrying amount the


As a not-for-profit entity with no cash generating units, impairment under AASB 136 Impairment of Assets is unlikely to arise. As property, plant and


costs of disposal are material. Specifically, impairment is unlikely for not-for-profit entities given that AASB 136 modifies the recoverable amount test





result.




Where an asset that has previously been revalued is disposed of, any balance remaining in the revaluation surplus in respect of that asset is

transferred to accumulated funds.

A distinction is made between finance leases which effectively transfer from the lessor to the lessee substantially all the risks and rewards incidental to

ownership of the leased assets, and operating leases under which the lessor effectively retains all such risks and rewards.

Where a non-current asset is acquired by means of a finance lease, at the commencement of the lease term, the asset is recognised at its fair value

or, if lower, the present value of the minimum lease payments, at the inception of the lease. The corresponding liability is established at the same

amount. Lease payments are allocated between the principal component and the interest expense.


Day-to-day servicing costs or maintenance are charged as expenses as incurred except where they relate to the replacement of a part or component

of an asset, in which case the costs are capitalised and depreciated.

Intangible assets are subsequently measured at fair value only if there is an active market. As there is no active market for SLHD's intangible assets,

the assets are carried at cost less any accumulated amortisation and impairment losses.

Computer software developed or acquired by SLHD are recognised as intangible assets and are amortised over four years using the straight line

method based on the useful life of the asset for both internally developed assets and direct acquisitions. Most computer software is acquired from the

Health Administration Corporation, a controlled entity of the parent.




SLHD does not have any property that meets the definition of Investment Property.

SLHD recognises intangible assets only if it is probable that future economic benefits will flow to SLHD and the cost of the asset can be measured

reliably. Intangible assets are measured initially at cost.

Investment property is held to earn rentals or for capital appreciation, or both. However, for not-for-profit entities, property held to meet service delivery

objectives rather than to earn rental or for capital appreciation does not meet the definition of investment property and is accounted for under AASB

116, Property, Plant and Equipment.





t) Inventories

u) Loans and Receivables

v) Investments

*

*

*

The fair value of investments that are traded at fair value in an active market is determined by reference to quoted current bid prices at the close of

business on the Statement of Financial Position date.

Purchases or sales of investments under contract that require delivery of the asset within the timeframe established by convention or regulation are

recognised on the trade date; i.e. the date SLHD commits to purchase or sell the asset.

Available-for-sale investments - Any investments that do not fall into any other category are accounted for as available-for-sale investments

and measured at fair value. Gains or losses on available-for-sale investments are recognised in other comprehensive income until disposed or

impaired, at which time the cumulative gain or loss previously recognised in other comprehensive income is recognised in the net result for the

year. However, interest calculated using the effective interest method and dividends are recognised in the net result for the year.

The movement in the fair value of the T-CorpIM Funds incorporates distributions received as well as unrealised movements in fair value and is

reported in the line item ‘investment revenue’.

Held-to-maturity investments – Non-derivative financial assets with fixed or determinable payments and fixed maturity that SLHD has the

positive intention and ability to hold to maturity are classified as 'held-to-maturity'.

These investments are measured at amortised cost using the effective interest method. Changes are recognised in the net result for the year


The risk management strategy of SLHD has been developed consistent with the investment powers granted under the provision of the Public

Authorities (Financial Arrangements) Act.

T-CorpIM Funds are made in an effort to improve interest returns on cash balances otherwise available whilst also providing secure

investments.


assets are recognised initially at fair value. Subsequent measurement is at amortised cost using the effective interest method, less an allowance for

any impairment of receivables. Any changes are recognised in the Net Result when impaired, derecognised or through the amortisation process.


Investments are initially recognised at fair value plus, in the case of investments not at fair value through profit or loss, transaction costs. SLHD

determines the classification of its financial assets after initial recognition and, when allowed and appropriate, re-evaluates this at each financial year


Inventories are stated at the lower of cost and net realisable value, adjusted when applicable for any loss of service potential. Costs are assigned to

individual items of stock mainly on the basis of weighted average costs.

T-CorpIM Funds are managed by New South Wales Treasury Corporation, a controlled entity of the ultimate parent. The facilities are

designated at fair value through profit or loss as the management and performance of these financial assets is undertaken on a fair value

basis, in accordance with a documented risk management strategy. and information about these assets is provided internally on that basis to

SLHD's key management personnel.

SLHD subsequently measures investments classified as 'held for trading' or designated upon initial recognition “at fair value through profit or

loss” at fair value.Financial assets are classified as 'held for trading' if they are acquired for the purpose of selling in the near term. Derivatives are also

classified as held for trading. Gains or losses on these assets are recognised in the net result for the year.





w) Impairment of Financial Assets

x) De-recognition of Financial Assets and Financial Liabilities

*

*

y) Payables

z) Borrowings

aa) Fair Value Hierarchy

*

*

*

Where SLHD has neither transferred nor retained substantially all the risks and rewards or transferred control, the asset is recognised to the extent of

SLHD's continuing involvement in the asset.


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

impairment is established when there is objective evidence that the entity will not be able to collect all amounts due.

For financial assets carried at amortised cost, the amount of the allowance is the difference between the asset’s carrying amount and the present

value of estimated future cash flows, discounted at the effective interest rate. The amount of the impairment loss is recognised in the net result for the

year.

When an available for sale financial asset is impaired, the amount of the cumulative loss is removed from equity and recognised in the net result for the

year, based on the difference between the acquisition cost (net of any principal repayment and amortisation) and current fair value, less any

impairment loss previously recognised in the net result for the year.

Payables are recognised for amounts to be paid in the future for goods and services received, whether or not billed to SLHD.

Loans are not held for trading or designated at fair value through profit or loss and are recognised at amortised cost using the effective interest rate

method. Gains or losses are recognised in the net result for the year on derecognition.

SLHD recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.

Refer Note 23 and Note 35 for further disclosures regarding fair value measurements of financial and non-financial assets.



losses on an investment in an equity instrument classified as “available for sale”, must be made through the reserve. Reversals of impairment losses of

financial assets carried at amortised cost cannot result in a carrying amount that exceeds what the carrying amount would have been had there not



where SLHD has not transferred substantially all the risks and rewards, if SLHD has not retained control.

A financial asset is derecognised when the contractual rights to the cash flows from the financial assets expire; or if SLHD transfers the financial asset:

These amounts represent liabilities for goods and services provided to SLHD and other amounts. Payables are recognised initially at fair value.

Subsequent measurement is at amortised cost using the effective interest method. Short-term payables with no stated interest rate are measured at

the original invoice amount where the effect of discounting is immaterial.


A number of SLHD’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and

liabilities. When measuring fair value, the valuation technique used maximises the use of relevant observable inputs and minimises the use of

unobservable inputs. Under AASB 13 Fair Value Measurement, SLHD categorises, for disclosure purposes, the valuation techniques based on the

inputs used in the valuation techniques as follows:







ab) Equity Transfers

ac) Equity and Reserves

(i)

(ii)

ad) Trust Funds

ae) Adjusted Budgeted Amounts

af) Emerging Asset

ag) Changes in Accounting Policy, including new or revised Australian Accounting Standards

(i)

As SLHD performs only a custodial role in respect of these monies, and because the monies cannot be used for the achievement of SLHD's own

objectives, these funds are not recognised in the financial statements.

NSW Health's budget is shown at a consolidated level when presented in parliament each year (i.e. in the NSW Government Budget Papers). SLHD's

budget is not presented in parliament, therefore AASB 1055 Budgetary Reporting is not applicable. Unlike the requirement in AASB 1055 ‘Budgetary

Reporting’ to present original budget information, SLHD's financial statements present adjusted budget information.The adjusted budgeted amounts

are drawn from the initial Service Agreements between SLHD and the NSW Ministry of Health at the beginning of the financial year, as well as any

adjustments for the effects of additional supplementation provided in accordance with delegations to derive a final budget at year end (i.e. adjusted

budget). The budget amounts are not subject to audit and, accordingly, the relevant column entries in the financial statements are denoted as

"Unaudited".

AASB 2015-6 Amendments to Australian Accounting Standards – Extending Related Party Disclosures to Not-for-Profit Public Sector Entities

extends the scope of AASB 124 Related Party Disclosures to include application by not-for-profit public sector entities. The application of this

standard has resulted in increased disclosures in the financial statements relating to related party transactions and Key Management

Personnel compensation.

The transfer of net assets between entities as a result of an administrative restructure, transfers of programs/functions and parts thereof between


Contributions and Australian Accounting Interpretation 1038, Contributions by Owners Made to Wholly-Owned Public Sector Entities.

AASB 2015-7 Amendments to Australian Accounting Standards – Fair Value Disclosures of Not-for-Profit Public Sector Entities is applicable

to reporting periods beginning on or after 1 July 2016. The Entity early adopted this standard in the financial year ended 30 June 2016, which

allows for exemption from making certain Level 3 'Fair Value Measurement' disclosures held primarily for current service potential rather than

the generation of future net cash inflows.

Major variances between the original budgeted amounts and the actual amounts disclosed in the primary financial statements are explained in Note

34.


transferor because there is no active market, SLHD recognises the asset at the transferor's carrying amount. Where the transferor is prohibited from

recognising internally generated intangibles, SLHD does not recognise that asset.

Transfers arising from an administrative restructure involving not-for-profit entities and for-profit government entities are recognised at the amount at

which the asset was recognised by the transferor immediately prior to the restructure. Subject to below, in most instances this will approximate fair

value.

Accumulated Funds

The category "accumulated funds" includes all current and prior period retained funds.

Revaluation Surplus

The revaluation surplus is used to record increments and decrements on the revaluation of non-current assets. This accords with SLHD's

policy on the revaluation of property, plant and equipment as discussed in Note 1(m).

SLHD receives monies in a trustee capacity for various trusts as set out in Note 30.


The accounting policies applied in 2016-17 are consistent with those of the previous financial year except as a result of new or revised

Australian Accounting Standards that have been applied for the first time as follows:

SLHD's emerging interest in the Lifehouse Class A Assets, Radiation Oncology Building and Lifehouse Main Building has been valued in accordance

with the Ministry of Health's policy for Accounting for Privately Financed Projects. This policy required SLHD to initially determine the estimated written

down replacement cost by reference to the project's historical cost escalated by a construction index and the asset's estimated working life. The

estimated written down replacement cost was then allocated on a systematic basis over the concession period of 40 years using the annuity method

and the Government Bond rate of 4.74% at commencement of the concession period.





(ii)

AASB 9 Financial Instruments and AASB 2014-7 Amendments to Australian Accounting Standards arising from AASB 9 are applicable for

reporting period on or after 1 January 2018. AASB 9 will replace AASB 139 Financial Instruments: Recognition and Measurement and

establishes new principles for the financial reporting of financial assets, financial liabilities and hedge accounting. AASB 9 also introduces a

forward-looking 'expected credit losses' impairment model, which may significantly impact the timing and amount of impairment recognition.

AASB 2016-2 Amendments to Australian Accounting Standards - Disclosure Initiative: Amendments to AASB 107 applies to annual periods

beginning on or after 1 January 2017. The standard amends AASB 107 Statement of Cash Flows to require additional disclosures regarding


AASB 16 Leases applies to annual periods beginning on or after 1 January 2019. The standard introduces a new approach to lease

accounting that requires a lessee to recognise assets and liabilities for the rights and obligations created by leases. The application of this

standard will likely have a significant transitional impact as all leases, except short term (<12 months) and low value leases, brought on

balance sheet.

AASB 15 Revenue from Contracts with Customers (and associated amending standards AASB 2014-5, AASB 2015-8, AASB 2016-3, AASB

2016-7 and AASB 2016-8) applies to annual periods beginning on or after 1 January 2019 for not-for-profit entities. AASB 15 establishes a


This new standard requires revenue to be recognised when control of the goods or services are transferred to the customer at the transaction

price. This may impact the timing of recognising certain revenue currently recognised by reference to the stage of completion of the

transaction.

AASB 1058 Income of Not-for-Profit Entities applies to not-for-profit entities and is effective for annual periods beginning on or after 1 January

2019. This standard requires entities to recognise income where the consideration to acquire an asset, including cash, is significantly less

than the fair value principally to enable the entity to further its objectives. Under this standard, the timing of income recognition may be

impacted depending on whether there is a liability or other performance obligation associated with the acquired asset, including cash.


measured reliably and the services would have been purchased if they had not been donated. This is consistent with current practice under


NSW public sector entities are not permitted to early adopt new Australian Accounting Standards, unless Treasury determines otherwise. The

following new Australian Accounting Standards, excluding standards not considered applicable or material to NSW Health, have not been

applied and are not yet effective. The possible impact of these Standards in the period of initial application includes:



2017 2016 2017 2016

$000 $000 $000 $000

2. Employee Related





----- ----- Redundancies 662 43



----- ----- 1,009,384 988,848

The amounts below are capitalised and do not form part of the

above total employee related costs:

----- ----- Employee Related Expenses Capitalised - Land and Buildings 129 -----




(159) 3,188 Long Service Leave ----- -----

662 43 Redundancies ----- -----



982,079 925,311 ----- -----

Personnel services of Sydney Local Health District was

provided by its controlled entity, Sydney Local Health District

Special Purpose Service Entity.

The amounts below are capitalised and do not form part of the

above total personnel services:

129 ----- Personnel Services Expenses Capitalised - Land and Buildings ----- -----





2017 2016 2017 2016

$000 $000 $000 $000








545 600 Consultancies 545 600

4,841 3,577 Contractors 4,988 4,036


74,834 78,416 Drug Supplies 74,857 78,441

25,232 25,965 Food Supplies 25,264 25,979




1,596 1,777 Insurance 1,629 1,779







3,947 3,707 Rental 3,947 3,707

277 43


immediate parent 277 43

61,221 62,670

Special Service Departments (Pathology, Dental, Dialysis,

Radiology, Research and other departments ) 62,381 63,742



172,093 78,321 Other (See 4(a) below) 172,401 78,568

588,099 482,100 591,932 485,237


2017 2016 2017 2016

$000 $000 $000 $000


a) Other Includes:

1,759 503 Aircraft Expenses (Ambulance) 1,759 503




935 7,913 Legal Services 935 7,930







172,093 78,321 172,401 78,568





2017 2016 2017 2016

$000 $000 $000 $000









(661) 63 Other (661) 63

36,905 31,503 37,750 31,694

7,233 7,244 7,233 7,244

44,138 38,747 Total Maintenance Expenses 44,983 38,938


The majority of 'Domestic Supplies and Services', 'Food Supplies', 'Corporate Support Services', were paid to

Health Administration Corporation, an entity controlled by the immediate parent.

The majority of 'Special Service Departments' expenses were paid to the Health Administration Corporation, an

entity controlled by the immediate parent.

Some 'Rental' and 'Staff Related costs' expenses were paid to entities controlled by the immediate parent.

Auditor's Remuneration' was paid to The Audit Office of New South Wales, an entity controlled by the ultimate

parent.

Hospital Ambulance Transport Costs' were paid to Health Administration Corporation, which is an entity controlled

by the immediate parent.

The majority of 'Information Management Expenses' were paid to Health Administration Corporation, an entity



Related in Note 4)


Notes 2 and 3


2017 2016 2017 2016

$000 $000 $000 $000




13 12 Depreciation - Infrastructure Systems 13 12

278 263 Amortisation - Leasehold Improvements 278 263


52,667 46,606 53,511 47,428



241 167 Grants to Research Organisations 241 167


572 591 Other Grants 930 807

18,899 18,303 19,257 18,519

7. Finance Costs

4 7 Interest on Loans 4 7

4 7 4 7


(a) Recurrent Sourced

11,533 7,987

Tresillian Family Care Centres at Belmore, Willoughby, and

Wollstonecraft 11,533 7,987

610 594 Central Sydney Scarba Service 610 594

12,143 8,581 12,143 8,581





2017 2016 2017 2016

$000 $000 $000 $000





24 12 Other 24 12

10,770 9,595 10,770 9,595


Patient Fees

77,980 72,516 - Inpatient Fees 77,980 72,516







2,819 2,773 Cafeteria/Kiosk 2,819 2,773

4,066 4,714 Car Parking 4,066 4,714

1,239 2,802 Child Care Fees 1,239 2,802

4,800 4,452 Clinical Services (excluding Clinical Drug Trials) 4,800 4,452

255 323 Commercial Activities 255 323

132 139 Enteral Nutrition 132 139


65 71 Information Retrieval 65 71



----- 3 Patient Transport Fees ----- 3


132 778 Salary Packaging Fee 132 778

13,641 12,639 Hosted Services Provided to entities controlled by immediate parent 13,641 12,639

6,007 5,344 Services Provided to Non NSW Health Organisations 6,007 5,344

12 131 Shared Corporate Services 12 131

1,755 4,874 Other 1,755 4,874

203,862 193,822 203,862 193,822

214,632 203,417 214,632 203,417

The majority of 'Shared Corporate Services' was earned from entities


The Hosted Services Provided to entities (South Western Sydney LHD

and NSW Health Pathology) controlled by immediate parent.





2017 2016 2017 2016

$000 $000 $000 $000





4,667 5,444 Interest 5,236 5,973

65 115 Other 65 115

4,732 5,559 5,301 6,088


2017 2016 2017 2016

$000 $000 $000 $000


7,406 5,910 Clinical Drug Trials 7,406 5,910



4,487 4,966 Cancer Institute Grants 4,487 4,966


2,180 4,280 Grants received from entities controlled by the immediate parent 2,180 4,280

1,788 2,387 Research Grants 7,532 8,189

3,249 2,666 Other Grants 3,249 2,666

37,881 43,996 44,369 50,068





----- ----- 24,211 59,275




The following liabilities and expenses have been assumed by the

Crown Entity:

The majority of grants that were received from entities controlled by the ultimate parent were received from NSW

Department of Education and Department of Family and Community Services.


Western Sydney LHD, Health Education and Training Institute, NSW Health Pathology and Agency for Clinical

Innovation.


2017 2016 2017 2016

$000 $000 $000 $000




13. Other Revenue


----- 5 Bad Debts Recovered ----- 5


1,182 941 Conference and Training Fees 1,182 941

1 104 Discounts 1 104

25,504 367 Insurance Refunds 25,504 367

5,901 4,372 * Lease and Rental 5,901 4,372

----- 62 Property not Previously Recognised ----- 62




10 ----- Unclaimed Deposits 10 -----

4,169 4,046 Other 6,772 6,240

41,494 27,853 44,097 30,047

*Some 'Lease and Rental' revenue was received from entities controlled by the immediate parent.




462 389 Written Down Value 481 416



(454) (107) Property, Plant and Equipment (473) (134)

(454) (107) Total Gain/(Loss) on Disposal (473) (134)


(942) (5,334) Impairment of Receivables (942) (5,334)

(942) (5,334) (942) (5,334)

PARENT




Research

$000 $000 $000 $000

17,203 7,143 10,489 34,835

55,324 32,997 41,328 129,649

Total amount of unexpended contributions as at reporting date 72,527 40,140 51,817 164,484




Contributions recognised as revenues during the current reporting period

for which expenditure in the manner specified had not occurred as at

reporting date




CONSOLIDATION




Research

$000 $000 $000 $000

19,519 14,535 10,489 44,543

74,301 37,266 41,328 152,895

Total amount of unexpended contributions as at reporting date 93,820 51,801 51,817 197,438





Contributions recognised as revenues during the current reporting period

for which expenditure in the manner specified had not occurred as at

reporting date



PARENT

2017 2016 2017 2016

$000 $000 $000 $000



102,830 99,818 Short Term Deposits 122,739 111,318

176,664 179,800 199,714 200,305

For the purposes of the Statement of Cash Flows, cash and


term deposits.

Cash & cash equivalent assets recognised in the Statement of

Financial Position are reconciled at the end of the financial year




Refer to Note 35 for details regarding credit risk, liquidity risk

and market risk arising from financial instruments.

CONSOLIDATION





2017 2016 2017 2016

$000 $000 $000 $000

18. Receivables

Current




26,515 9,833 Other Debtors 26,565 9,869

79,184 56,987 Sub Total 79,704 58,491


75,368 51,393 Sub Total 75,888 52,897

2,564 1,699 Prepayments 2,627 1,768

77,932 53,092 78,515 54,665



(4,760) (5,949) Balance at Commencement of Reporting Period (4,760) (5,949)

2,214 6,317 Amounts written off during the period 2,214 6,317

(156) (5,128) the Net Result (156) (5,128)

(2,702) (4,760) Balance at 30 June (2,702) (4,760)


Other Debtors

(834) (1,366) Balance at Commencement of Reporting Period (834) (1,366)


(787) (206) the Net Result (787) (206)

(1,114) (834) Balance at 30 June (1,114) (834)

(3,816) (5,594) (3,816) (5,594)

Intra Health Receivables' include amounts receivable from entities controlled by the immediate parent. The

majority of the balance at reporting date was receivable from South Western Sydney LHD $2.928M, South

Eastern Sydney LHD $0.944M, HealthShare NSW $0.913M, Western NSW LHD $0.424M, The Sydney

Childrens Hospital Network $0.414M, Health Education and Training Institute $0.372M, eHealth NSW $0.340M

and Cancer institute NSW $0.334M.





2017 2016 2017 2016

$000 $000 $000 $000

18. Receivables




c) The current and non-current sale of goods and services

balances above include the following patient fee receivables:

4,431 4,871 Patient Fees - Compensable 4,431 4,871

10,525 8,239 Patient Fees - Ineligible 10,525 8,239


25,757 24,370 25,757 24,370


assets that are either past due or impaired are disclosed in Note 35.


2017 2016 2017 2016

$000 $000 $000 $000

19. Inventories

4,751 5,592 Drugs 4,751 5,592


9,225 7,217 9,225 7,217





2017 2016 2017 2016

$000 $000 $000 $000



1,991,250 1,975,341 Gross Carrying Amount 2,004,800 1,988,891








500 500 Gross Carrying Amount 500 500

70 57 Less: Accumulated Depreciation and Impairment 70 57


Leasehold Improvements - Fair Value*

690 690 Gross Carrying Amount 690 690

541 263 Less: Accumulated Depreciation and Impairment 541 263



1,207,641 1,204,970 At Net Carrying Amount 1,217,782 1,215,722

* For non-specialised assets with short useful lives, recognition at depreciated

historical cost is regarded as an acceptable approximation of fair value, in

accordance with Treasury Policy Paper 14-01.




PARENT




$000 $000 $000 $000 $000 $000

2017

Net carrying amount at start of year 351,300 775,046 77,754 443 427 1,204,970

Additions ----- 23,800 31,679 ----- ----- 55,479

Reclassifications to Intangibles ----- ----- ----- ----- ----- -----

Recognition of Assets Held for Sale ----- ----- ----- ----- ----- -----

Disposals ----- (157) (305) ----- ----- (462)

----- ----- 157 ----- ----- 157

----- ----- ----- ----- ----- -----

Depreciation Expense ----- (39,238) (12,974) (13) (278) (52,503)

Reclassifications ----- (25) 25 ----- ----- -----

Net carrying amount at end of year 351,300 759,426 96,336 430 149 1,207,641



$000 $000 $000 $000 $000 $000

2016

Net carrying amount at start of year 311,644 611,915 62,934 442 ----- 986,935

Additions ----- 13,701 26,461 ----- 690 40,852

Disposals ----- ----- (389) ----- ----- (389)

----- ----- 848 ----- ----- 848

39,656 183,568 ----- 13 ----- 223,237


Reclassifications ----- ----- ----- ----- ----- -----





A reconciliation of the carrying amount of each class of property, plant and equipment at the beginning and end of the current reporting period is set out below:

Net Revaluation Increment Less Revaluation Decrements









(i) Land and Buildings include land owned by the Health Administration Corporation but controlled by SLHD [see note 1(j)].

(ii) Indices provided by AON (2016: AON) were not applied in 2017 as they were deemed immaterial.

(iii) For land, buildings and infrastructure systems and Other Assets SLHD obtains external valuations by independent valuers every three years. The last

revaluation was performed by AON for the 2015/16 financial year. AON is an independent entity and is not an employee of the SLHD.

CONSOLIDATION




$000 $000 $000 $000 $000 $000

2017

Net carrying amount at start of year 351,299 783,165 80,388 443 427 1,215,722

Additions ----- 23,800 31,931 ----- ----- 55,731

Disposals ----- (157) (324) ----- ----- (481)

----- ----- 157 ----- ----- 157

----- ----- ----- ----- ----- -----


Reclassifications ----- (25) 25 ----- ----- -----




$000 $000 $000 $000 $000 $000

2016

Net carrying amount at start of year 311,644 620,525 64,927 442 ----- 997,538

Additions ----- 13,701 27,494 ----- 690 41,885

Disposals ----- ----- (416) ----- ----- (416)

----- ----- 848 ----- ----- 848

39,655 183,534 ----- 13 ----- 223,202


Reclassifications ----- ----- ----- ----- ----- -----





A reconciliation of the carrying amount of each class of property, plant and equipment at the beginning and at the of the reporting period is set out below:





(i) Land and Buildings include land owned by the Health Administration Corporation but controlled by SLHD [see note 1(j)].

(ii) Indices provided by AON (2016: AON) were not applied in 2017 as they were deemed immaterial.


(iii) For land, buildings and infrastructure systems and Other Assets SLHD obtains external valuations by independent valuers every three years. The last

revaluation was performed by AON for the 2015/16 financial year. AON is an independent entity and is not an employee of the SLHD.






2017 2016 2017 2016

$000 $000 $000 $000


Intangibles

848 789 Cost (Gross Carrying Amount) 848 789

295 130 Less Accumulated Amortisation and Impairment 295 130



21. Intangibles Assets - Reconciliation







659

58

Intangibles

PARENT



$000

2017

Total

$000

659

2016



(164)

553

58

(164)

553

(93) (93)

635 635

117 117

Intangibles Total

$000 $000

659 659 Net carrying amount at end of year

CONSOLIDATION

Net carrying amount at start of year 659 659

Additions (From Internal Development or Acquired Separately) 58 58

2017

Net carrying amount at end of year 553 553

Amortisation (Recognised in Depreciation and Amortisation) (164) (164)

Net carrying amount at start of year 635 635

Net carrying amount at end of year 659 659

Amortisation (Recognised in Depreciation and Amortisation) (93) (93)

Additions (From Internal Development or Acquired Separately) 117 117

2016


2017 2016 2017 2016

$000 $000 $000 $000

22. Other Assets

Non-Current

3,552 2,501 Emerging Rights to Assets (refer Note 1(af)) 3,552 2,501

3,552 2,501 3,552 2,501








$000 $000 $000 $000

PARENT


- Land and Buildings ----- 9,598 1,060,804 1,070,402

- Infrastructure Systems ----- ----- 430 430


----- 9,598 1,064,786 1,074,384

CONSOLIDATION





----- 9,598 1,072,443 1,082,041













$000 $000 $000 $000

PARENT





----- 9,697 1,102,755 1,112,452

CONSOLIDATION





----- 9,697 1,110,874 1,120,571









Non-Current Assets Held for Sale is a non-recurring item that is measured at fair value less cost to sell, which is less than its carrying amount.

These assets are categorised as level 2.

For buildings and infrastructure and 'Other Assets', many assets are of a specialised nature or use, and thus the most appropriate valuation method

is depreciated replacement cost. These assets are included as Level 3 as these assets have a high level of unobservable inputs. However,

residential properties are valued on a market approach and included in level 2.


significant input is price per square metre.

All commercial and non-restricted land is included in Level 2 as these land valuations have a high level of observable inputs although these lands

are not identical.

The majority of the restricted land has been classified as level 3 as, although observable inputs have been used, a significant level of professional

judgement is required to adjust inputs in determining the land valuations. Certain parcels of land have zoning restrictions, for example hospital

grounds, and values are adjusted accordingly.

The non-current assets categorised in a) above have been measured as either level 2 or level 3 based on the following valuation techniques and

inputs:

For land, buildings and infrastructure systems and 'Other Assets' the SLHD obtains external valuations by independent valuers every three years.

The last revaluation was performed by AON for the 2015/16 financial year. AON is an independent entity and is not an employee of SLHD.

At the end of each reporting period a fair value assessment is made on any movements since the last revaluation, and a determination as to

whether any adjustments need to be made. These adjustments are made by way of application of indices refer, note 20 reconcilation.




2017 Other

Assets

PARENT $000 $000 $000 $000

Fair value as at 1 July 2016 1,099,811 443 2,501 1,102,755

Additions ----- ----- 1,051 1,051

Revaluation increments/ decrements recognised in other comprehensive income

– included in line item 'Net increase / (decrease) in property, plant and

equipment revaluation surplus’----- ----- ----- -----

Transfers from Level 2 ----- ----- ----- -----

Transfers to Level 2 ----- ----- ----- -----

Disposals (157) ----- ----- (157)

Depreciation (38,850) (13) ----- (38,863)

Fair value as at 30 June 2017 1,060,804 430 3,552 1,064,786

CONSOLIDATION

Fair value as at 1 July 2016 1,107,930 443 2,501 1,110,874

Additions ----- ----- 1,051 1,051



equipment revaluation surplus’----- ----- ----- -----

Transfers from Level 2 ----- ----- ----- -----

Transfers to Level 2 ----- ----- ----- -----

Disposals (157) ----- ----- (157)

Depreciation (39,312) (13) ----- (39,325)







Land and

Buildings

Infrastructure

Systems

Total Level 3

Recurring








PARENT $000 $000 $000 $000

Fair value as at 1 July 2015 520,980 442 1,497 522,919

Additions 62 ----- 1,004 1,066



equipment revaluation surplus’220,375 13 ----- 220,388


Transfers to Level 2 (248) ----- ----- (248)

Disposals ----- ----- ----- -----

Depreciation (32,910) (12) ----- (32,922)


CONSOLIDATION

Fair value as at 1 July 2015 529,590 442 1,497 531,529

Additions 62 ----- 1,004 1,066



equipment revaluation surplus’ 220,340 13 ----- 220,353


Transfers to Level 2 (248) ----- ----- (248)

Disposals ----- ----- ----- -----

Depreciation (33,366) (12) ----- (33,378)





2017 2016 2017 2016

$000 $000 $000 $000


Category


40,140 41,870 Research Grants 51,801 48,607


164,484 172,665 197,438 204,106




SLHD's financial statements include the following assets which are restricted

by externally imposed conditions, eg. donor requirements. The assets are only

available for application in accordance with the terms of the donor restrictions.


2017 2016 2017 2016

$000 $000 $000 $000

25. Payables

Current




48,864 42,606 Creditors 48,857 42,595

Other Creditors

18,434 14,860 - Intra Health Liability 18,434 14,860

1,272 2,615 - Other 1,447 2,855

94,823 83,144 95,075 83,372


26. Borrowings

Current

630 ----- Other Loans and Deposits 630 -----

630 ----- 630 -----

Non-Current

6,319 ----- Other Loans and Deposits 6,319 -----

6,319 ----- 6,319 -----






'Other Loans and Deposits' include balances due to entities controlled by the immediate parent. Majority of the

balances are due from NSW Treasury.

No assets have been pledged as security/collateral for liabilities and there are no restrictions on any title to

property.

Final Repayment of loan is scheduled for 30 June 2027

Other loans still to be extinguished represent monies to be repaid to the NSW Treasury, which is controlled by

the ultimate parent.

Details regarding credit risk, liquidity risk and market risk, including a maturity analysis of the above borrowings


The majority of 'Other Creditors - Intra Health Liability relate to balances payable to NSW Ministry of Health

$11.909M, HealthShare NSW $5.657M and South Western Sydney LHD $0.589M.




2017 2016 2017 2016

$000 $000 $000 $000

27. Provisions

Current





2,030 ----- ADO Liability 2,030 -----

115,300 21,750 Other 115,300 21,750

298,163 196,859 298,633 197,469

Non-Current

1,985 1,998 Long Service Leave Consequential On-Costs 1,985 1,998

1,985 1,998 1,985 1,998



----- ----- Provisions - Non-Current 1,985 1,998



211,101 200,170 211,655 200,779


Current

251 137 Income in Advance 346 684

251 137 346 684




In November 2016, a judgement was handed down by the NSW Supreme Court in regard

to a legal matter. Final damages to be awarded to the claimant are yet to be determined

by the Court. As per paragraph 92 of AASB 137, further information about this matter has

not been reported as it may prejudice the position of the entity in relation to the dispute.


2017 2016 2017 2016

$000 $000 $000 $000




1,650 110 Later than one year and not later than five years 1,650 110












intangible assets, contracted for at balance date and not

provided for:

The total 'Capital Expenditure Commitments' and 'Operating

Lease Commitments' of $50.744 million as at 30 June 2017

includes input tax credits of $4.613 million that are expected to

be recoverable from the Australian Taxation Office (2016 $2.884

million).

Future non-cancellable operating lease rentals not provided for

and payable:

The operating lease commitments above are for motor vehicles,

information technology, equipment including personal

computers, medical equipment and other equipment.

The majority of 'capital commitments' contracted but not

provided for related to capital works overseen by the Health

Administration Corporation, an entity controlled by the immediate

parent.


30. Trust Funds

2017 2016 2017 2016 2017 2016 2017 2016

$000 $000 $000 $000 $000 $000 $000 $000

141 136 2,489 3,315 11,729 13,532 14,359 16,983

Revenue 228 199 507 781 40,428 37,235 41,163 38,215

Expenses (212) (194) (1,133) (1,607) (41,469) (39,038) (42,814) (40,839)

157 141 1,863 2,489 10,688 11,729 12,708 14,359




SLHD holds trust funds of $12.7 million which are held for the safe keeping of patients' monies, deposits on hired items of equipment and Private

Practice Trusts.

These funds are excluded from the financial statements as SLHD cannot use them for the achievement of its objectives. The following is a summary of

the transactions in the trust account.


Deposits Trust Funds

Balance at the beginning


Balance at the end of the

financial year


2017 2016 2017 2016

$000 $000 $000 $000




(942) (5,334) Allowance for Impairment (942) (5,334)

(114) (101) (Increase)/ Decrease Income in Advance 338 (598)


29,329 13,633 Increase / (Decrease) in Prepayments and Other Assets 28,036 14,779

(12,018) (2,773) (Increase)/ Decrease in Payables from Operating Activities (11,738) (3,118)

(454) (107) Net Gain/ (Loss) on Sale of Property, Plant and Equipment (473) (134)

----- 62 Assets donated or brought to account for the first time ----- 62

(92,705) (3,183) Net Result (91,193) (2,852)


- Chaplaincies and Pastoral Care

- Pink Ladies/Hospital Auxiliaries

- Patient Support Groups

- Community Organisations

- Patient & Family Support

- Patient Services, Fund Raising

- Practical Support to Patients and Relatives

- Counselling, Health Education, Transport, Home Help & Patient Activities


Unclaimed salaries and wages are paid to the credit of the NSW

Treasury in accordance with the provisions of the Industrial Relations

Act,1996.

All money and personal effects of patients which are left in the custody

of the SLHD by any patient who is discharged or dies in the hospital

and which are not claimed by the person lawfully entitled thereto within

a period of twelve months are recognised as the property of the SLHD.

All such money and the proceeds of the realisation of any personal

effects are lodged to the credit of the Samaritan Fund which is used

specifically for the benefit of necessitous patients or necessitous

outgoing patients.




It is considered impracticable and immaterial to quantify the

monetary value of voluntary services provided to SLHD.

Services provided include:



Net Result


Cash Flows

$000

1,211,865

3,251

Growth Allocation - as per Schedule C Initial budget 16/17 37,180

2016_17 Chris Obrien Lifehouse Activity Based Funding 4,443

2016_17 Integrated Care Demonstrator Program 1,160

2016_17 NSW Aged Care Assessment Program Funding Allocation 457

2016-17 Bed Replacement program 2,889

Additional Pelvic Exenteration activity 1,501

Ministerial Approved NGO Grnts Program - Drug Summit 4 - 2016_17 1,248

National Partnership Agreement on Adult Public Dental Services 2,800

Nursing and Midwifery Enhancements 1,703

Organ and Tissue Donation Service Funding 417

Transfer of National Partnership dental service funding 500

Transfer of Tresillian Budget 3,379

Translational Research Grants Scheme (TRGS) 754

Treatment of 2016_17 Concord Hospital Superannuation 3,249

Voluntary Redundancy Reimbursement 629

Miscellaneous 3,899


Initial Allocation, 01/07/2016

Award Increases




At Consolidation level, SLHD's net increase in Cash and Cash Equivalents closing balance for the 2016/17 financial year was $199.714M. This

comprised a net increase in cash flows from Operating activities of $48.248M, a net decrease in cash flows from Investing activities of $55.783M. The

decrease in cash flows from Investing activities reflected a range of capital works and assets purchases including the Aged Care / Rehab Network

($2,219M), Asset Refurbishment ($1,551M), Medical Research Infrastructure ($8,831M), RPA Radiology Replacement of Angiography Equipment

($1,590M), RPA Radiology Procurement of Biplane Angiography Unit ($1,494M), RPA Radiology Replacement of CT1 and CT2 Scanners ($0.304 M),

RPAH building 63 Lift ($0.704M), CT Camera at Concord Hospital ($0.743M), RPA Energy Efficiency Program ($0.265M), CT Scanner Replacement at

Concord Hospital ($1,881M), Cath Lab Replacement at Concord Hospital ($1,366M), HI WIP Transfers ($9,005M), RPA Robotic Training Centre

($3,084M), Endoscopic Equipment Replacement at Concord Hospital ($1,719M), RPA Replacement Fluoroscopy System ($1,025M), Neosurgical

Microscope Replacement at Concord Hospital ($0.361M), Security and Duress Alarms Upgrade ($4,265M), Sydney Dental Hospital Level 4

Refurbishment ($1,132M), Chris O' Brien CT Scanner ($1,036M), and Minor works and equipment ($13,212M)

Movements in the level of the NSW Ministry of Health Recurrent Allocation that have occurred since the time of the initial allocation on 1 July 2016 are as

follows:

As at 30 June 2017 SLHD Consolidation had Current Assets of $287.454M and Current Liabilities of $394.684M. Non Current Assets totalled

$1,221.887M and Non Current Liabilities were $8.304M. During 2015/16 the value of SLHD's land and buildings were revalued by an independent valuer.

This financial year the District has continued to record an emerging asset for a building situated on the District's land that is owned and operated by

Lifehouse Australia. Overall SLHD has a sound asset base with Net Assets of $1,106.353M.

In accordance with the Ministry of Health's Performance Framework SLHD has been rated at Performance Level 0 for the entire twelve months to the end

of 30 June 2017. This performance is a continuation of the monthly rating achieved for the previous six financial years.

As at 30 June 2017 the District's Consolidated Net Result is $0.585 M favourable to budget. The Parent result was $0.927 M unfavourable to budget.



PARENT


2017 2016

$000 $000



247,762 227,690


Borrowings (note 26) 6,949 -----

Payables (note 25)** 88,692 77,414

95,641 77,414

Notes

* Excludes statutory receivables and prepayments (i.e. not within scope of AASB 7)

**Excludes statutory payables and unearned revenue (i.e. not within scope of AASB 7)





SLHD's principal financial instruments are outlined below. These financial instruments arise directly from SLHD's operations or are required to finance

its operations. SLHD does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.

SLHD's main risks arising from financial instruments are outlined below, together with SLHD's objectives, policies and processes for measuring and

managing risk. Further quantitative and qualitative disclosures are included throughout these financial statements.

The Chief Executive has overall responsibility for the establishment and oversight of risk management and reviews and agrees policies for managing

each of these risks. Risk management policies are established to identify and analyse the risks faced by SLHD, to set risk limits and controls and to

monitor risks. Compliance with policies is reviewed on a continuous basis.

Category

N/A






CONSOLIDATION


2017 2016

$000 $000



271,411 249,862


Borrowings (note 26) 6,949 -----

Payables (note 25)** 88,944 77,642

95,893 77,642

Notes

* Excludes statutory receivables and prepayments (i.e. not within scope of AASB 7)

**Excludes statutory payables and unearned revenue (i.e. not within scope of AASB 7)

(b) Credit Risk

Cash


Category

Credit risk arises when there is the possibility that the counterparty will default on their contractual obligations, resulting in a financial loss to SLHD. The

maximum exposure to credit risk is generally represented by the carrying amount of the financial assets (net of any allowance for impairment).

Credit risk associated with SLHD's financial assets, other than receivables, is managed through the selection of counterparties and establishment of

minimum credit rating standards. Authority deposits held with NSW TCorp are guaranteed by the State.

The TCorpIM Cash Funds is discussed in paragraph (d) below.



outstanding amounts, including letters of demand. Debts which are known to be uncollectable are written off. An allowance for impairment is raised

when there is objective evidence that SLHD will not be able to collect all amounts due. This evidence includes past experience and current and

expected changes in economic conditions and debtor credit ratings. No interest is earned on trade debtors.

Credit risk arises from financial assets of SLHD, including cash, receivables and authority deposits. No collateral is held by SLHD. SLHD has not

granted any financial guarantees.

Cash comprises cash on hand and bank balances deposited within the NSW Treasury banking system. Interest is earned on daily bank balances at

rates of approximately 2.35% to 2.60% in 2016/17 compared to 2.60% to 2.85% in the previous year.

In addition Patient Fees Compensables are frequently not settled within 6 months of the date of the service provision due to the length of time it takes

to settle legal claims. Most of SLHD's debtors are health insurance companies or compensation insurers settling claims in respect of inpatient

treatments.


N/A


SLHD is not materially exposed to concentrations of credit risk to a single trade debtor or group of debtors. Based on past experience, debtors that are

not past due (2017: $62.351M ; 2016: $43.566M) and not more than 3 months past due (2017: $4.947M ; 2016: $6.199M) are not considered impaired.





PARENT

Total 1,2

Past due but not

impaired 1,2

Considered

impaired 1,2

2017 $000 $000 $000

<3 months overdue 4,658 4,658 -----

3 months - 6 months overdue 6,422 6,422 -----

> 6 months overdue 8,135 4,319 3,816

2016

<3 months overdue 6,199 6,199 -----


> 6 months overdue 6,107 513 5,594

CONSOLIDATION

Total 1,2

Past due but not

impaired 1,2

Considered

impaired 1,2

2017 $000 $000 $000

<3 months overdue 4,947 4,947 -----


> 6 months overdue 8,135 4,319 3,816

2016

<3 months overdue 6,199 6,199 -----


> 6 months overdue 6,107 513 5,594

Notes


Authority Deposits

Financial assets that are past due or impaired could be either 'Sales of Goods and Services' or 'Other Debtors' in the 'Receivables' category of the

Statement of Financial Position. Patient Fees Ineligibles represent the majority of financial assets that are past due or impaired.

2 The ageing analysis excludes statutory receivables, as these are not within the scope of AASB 7 and excludes receivables that are not past due and

not impaired. Therefore, the "total" will not reconcile to the receivables total recognised in the statement of financial position.

SLHD has placed funds on deposit with TCorp, which has been rated 'AAA' by Standard and Poor's. These deposits are similar to money market or

bank deposits and can be placed 'at call' or for a fixed term. For fixed term deposits, the interest rate payable by TCorp is negotiated initially and is fixed

for the term of the deposit, while the interest rate payable on at call deposits can vary. The deposits at balance date were earning an average interest

rate of 2.37% (2016: 2.44%), while over the year the weighted average interest rate was 2.35% (2016: 2.44%) on a weighted average balance during

the year of $26.525M (2016: $24.921M). None of these assets are past due or impaired.





(c) Liquidity Risk

SLHD has negotiated no loan outside of arrangements with the NSW Ministry of Health or Treasury.


Liquidity risk is the risk that SLHD will be unable to meet its payment obligations when they fall due. SLHD continuously manages risk through

monitoring future cash flows and maturities planning to ensure adequate holding of high quality liquid assets. The objective is to maintain a balance

between continuity of funding and flexibility through effective management of cash, investments and liquid assets and liabilities.



SLHD has exposure to liquidity risk. However, the risk is minimised by the service agreement with the NSW Ministry of Health, as the annual service

agreement requires local management to control its financial liquidity and in particular meet benchmarks for the payment of creditors. Where SLHD fails

to meet service agreement performance standards, the Ministry as the state manager can take action in accordance with annual performance

framework requirements, including providing financial support and increased management interaction (refer Note 1).

The liabilities are recognised for amounts due to be paid in the future for goods or services received, whether or not invoiced. Amounts owing to

suppliers (which are unsecured) are settled in accordance with the policy set by the NSW Ministry of Health in accordance with NSW Treasury Circular

11/12. For small business suppliers, where terms are not specified, payment is made not later than 30 days from date of receipt of a correctly rendered

invoice. For other suppliers, if trade terms are not specified, payment is made no later than the end of the month following the month in which an

invoice or a statement is received.





PARENTWeighted

Average

Effective

Interest

Rate

Nominal

Amount 1

Fixed

Interest Rate

Variable

Interest Rate

Non - Interest


2017 $000 $000 $000 $000 $000 $000 $000

Payables:

- Creditors 88,692 ----- ----- 88,692 88,692 ----- -----

Borrowings:

- Loans and Deposits 2.89% 8,031 8,031 ----- ----- 837 4,182 3,012

96,723 8,031 ----- 88,692 89,529 4,182 3,012

2016

Payables:

- Creditors 77,414 ----- ----- 77,414 77,414 ----- -----

Borrowings:

- Loans and Deposits 0.00% ----- ----- ----- ----- ----- ----- -----

77,414 ----- ----- 77,414 77,414 ----- -----




The table below summarises the maturity profile of SLHD's financial liabilities together with the interest rate exposure.

Interest Rate Exposure Maturity Dates





CONSOLIDATIONWeighted

Average

Effective

Interest

Rate

Nominal

Amount 1

Fixed

Interest Rate

Variable

Interest Rate

Non - Interest


2017 $000 $000 $000 $000 $000 $000 $000

Payables:

- Creditors 88,944 ----- ----- 88,944 88,944 ----- -----

Borrowings:

- Loans and Deposits 2.89% 8,031 8,031 ----- ----- 837 4,182 3,012

96,975 8,031 ----- 88,944 89,781 4,182 3,012

2016

Payables:

- Creditors 77,642 ----- ----- 77,642 77,642 ----- -----

Borrowings:

- Loans and Deposits 0.00% ----- ----- ----- ----- ----- ----- -----

77,642 ----- ----- 77,642 77,642 ----- -----

Notes:

1 The amounts disclosed are the contractual undiscounted cash flows of each class of financial liabilities based on the earliest date on which SLHD can

be required to pay. The tables include both interest and principal cash flows and therefore will not reconcile to the Statement of Financial Position.



(d) Market Risk

Interest rate risk

PARENT Net Equity Net Equity

Result Result

$000 $000 $000 $000 $000

2017

Financial Assets

Cash and Cash Equivalents 176,664 (1,767) (1,767) 1,767 1,767

Receivables 71,098 ----- ----- ----- -----


Payables 88,692 ----- ----- ----- -----

Borrowings 6,949 69 69 (69) (69)

2016

Financial Assets


Receivables 47,890 ----- ----- ----- -----


Payables 77,414 ----- ----- ----- -----

Borrowings ----- ----- ----- ----- -----

-1% +1%

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. SLHD's

exposures to market risk are primarily through interest rate risk on SLHD's borrowings and other price risks associated with the movement in the unit price

of the Hour-Glass Investment facilities. SLHD has no exposure to foreign currency risk and does not enter into commodity contracts.




However, SLHD is not permitted to borrow external to the NSW Ministry of Health (except energy loans which are negotiated through NSW Treasury).

SLHD's exposure to interest rate risk is set out below.

The effect on net result and equity due to a reasonably possible change in risk variable is outlined in the information below, for interest rate risk and other

price risk. A reasonably possible change in risk variable has been determined after taking into account the economic environment in which SLHD

operates and the time frame for the assessment (i.e. until the end of the next annual reporting period). The sensitivity analysis is based on risk exposures

in existence at the Statement of Financial Position date. The analysis is performed on the same basis for 2016. The analysis assumes that all other

variables remain constant.

Exposure to interest rate risk arises primarily through SLHD's interest bearing liabilities.

Both NSW Treasury and NSW Ministry of Health loans are set at fixed rates and therefore are generally not affected by fluctuations in market rates. SLHD

does not account for any fixed rate financial instruments at fair value through profit or loss or as available-for-sale. Therefore, for these financial

instruments, a change of interest rates would not affect net result or equity.

A reasonably possible change of +/-1% is used consistent with current trends in interest rates (based on official RBA interest rate volatility over the last

five years). The basis will be reviewed annually and amended where there is a structural change in the level of interest rate volatility.

Carrying

Amount





CONSOLIDATION Net Equity Net Equity

Result Result

2017 $000 $000 $000 $000 $000

Financial Assets


Receivables 71,697 ----- ----- ----- -----


Payables 88,944 ----- ----- ----- -----

Borrowings 6,949 69 69 (69) (69)

2016

Financial Assets


Receivables 49,557 ----- ----- ----- -----


Payables 77,642 ----- ----- ----- -----

Borrowings ----- ----- ----- ----- -----

Carrying

Amount

+1%-1%




2017

$000



764


There were no transactions with key management personnel and their close family members during the financial year.


37. Events after the Reporting Period


There has not been any matters arising subsequent to balance date that would require these financial statements to be amended.

During the financial year, Sydney Local Health District obtained key management personnel services from the immediate parent and incurred $502K as

advised by the Ministry for these services.

Compensation for the Minister for Health is paid by the Legislature and is not reimbursed by the Ministry of Health and its controlled entities. Accordingly

no such amounts are included in the key management personnel compensation disclosures above.

Remuneration for the Secretary and Deputy Secretaries are paid by the Ministry of Health and is not reimbursed by the health entities. Accordingly no





COVER PAGE 8

Western Sydney Local Health District


Health AR 2016-17 Volume 1 Covering.indd - Parliament of NSW

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