Annual Report - Northern Health

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Note 19: Financial Instruments (continued)Notes To and Forming Part of the Financial StatementsNorthern Health Annual Report 2011/2012(e) Market RiskNorthern Health's exposures to market risk are primarily through interest rate risk with only insignificant exposure to foreign currency and other price risks. Objectives, policies and processes used tomanage each of these risks are disclosed in the paragraph below.Currency RiskNorthern Health is exposed to insignificant foreign currency risk through its payables relating to purchases of supplies and consumables from overseas. This is because of a limited amount ofpurchases denominated in foreign currencies and a short timeframe between commitment and settlement.Interest Rate RiskExposure to interest rate risk might arise primarily through Northern Health's interest bearing liabilities. Minimisation of risk is achieved by mainly undertaking fixed rate or non-interest bearingfinancial instruments. For financial liabilities, Northern Health mainly undertake financial liabilities with relatively even maturity profiles.Other Price RiskNorthern Health's exposure to 'Other Price Risk' arises from its current investment portfolio. The investment portfolio has experienced a reduction in value due to the volatility of the global financialmarkets and there is an increasing expectation that due to the nature of these investments that the original face value may not be realised on maturity.As a consequence of these events, Northern Health has taken all possible steps to strengthen its financial policies and internal controls relating to the investment of surplus funds.Interest Rate Exposure of Financial Assets and Liabilities as at 30 JuneWeighted CarryingAverage Amount Fixed Variable Non-Effective Interest Interest InterestInterest Rate Rate Bearing2012 Rate (%) $'000 $'000 $'000Financial AssetsCash and Cash Equivalents 4.52 10,760 - 10,732 28Receivables (i)- Trade debtors 0.00 1,439 - - 1,439- Other receivables 0.00 4,510 - - 4,510Other financial assets 0.00 1,500 - - 1,50018,209 - 10,732 7,477Financial LiabilitiesPayables (i) 0.00 25,086 - - 25,086Interest Bearing Liabilities 4.52 375 - 375 -Other financial liabilities 0.00 6 - - 625,467 - 375 25,0922011Financial AssetsCash and Cash Equivalents 4.31 5,430 - 5,401 29Receivables (i)- Trade debtors 0.00 1,697 - - 1,683- Other receivables 0.00 3,781 - - 3,451Other financial assets 0.00 1,500 - - 1,50012,408 - 5,401 6,663Financial LiabilitiesPayables (i) 0.00 15,731 - - 16,573Interest Bearing Liabilities 4.83 615 - 615 -Other financial liabilities 0.00 3 - - 316,349 - 615 16,576(i) The carrying amount excludes statutory financial assets and liabilities (i.e. GST input tax credit and GST payable)Interest Rate ExposureNorthern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 48 of 60
Note 19: Financial Instruments (continued)Notes To and Forming Part of the Financial StatementsNorthern Health Annual Report 2011/2012(e) Market Risk (cont)Sensitivity Disclosure AnalysisTaking into account past performance, future expectations, economic forecasts, and management's knowledge and experience of the financial markets, Northern Health believes the followingmovements are 'reasonably possible' over the next 12 months (Base rates are sourced from the Reserve Bank of Australia)- A shift of +1% and -1% in market interest rates (AUD) from year-end rates of 3.50%;- A parallel shift of +1% and 1% in inflation rate from year-end rates of 1.60%The following table discloses the impact on net operating result and equity for each category of financial instrument held by Northern Health at year end as presented to key management personnel, ifchanges in the relevant risk occur.CarryingAmountInterest Rate Risk Other Price Risk-1% +1%-5% +10%Profit Equity Profit Equity Profit Equity Profit Equity2012 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000Financial AssetsCash and Cash Equivalents (i) 10,760 (107) (107) 107 107 - - - -Receivables- Trade debtors 1,439 - - - - - - - -- Other receivables 4,510 - - - - - - - -Other financial assets 1,500 - - - - - - - -Financial LiabilitiesPayables 25,086 - - - - - - - -Interest Bearing Liabilities 375 4 4 (4) (4) - - - -Other Financial Liabilities 6 - - - - - - - -(103) (103) 103 103 - - - -2011Financial AssetsCash and Cash Equivalents (i) 5,430 (54) (54) 54 54 - - - -Receivables- Trade debtors 1,697 - - - - - - - -- Other receivables 3,781 - - - - - - - -Other financial assets 1,500 - - - - - - - -Financial LiabilitiesPayables 15,731 - - - - - - - -Interest Bearing Liabilities 615 6 6 (6) (6) - - - -Other Financial Liabilities 3 - - - - - - - -(48) (48) 48 48 - - - -(i) eg. Sensitivity of cash and cash equivalents to +1% movement in interest rates: [$10,733k*0.045]-[$10,733k*0.035] = $107k. Similarly -1% movement in interest rate impact = $(107k)The carrying amount excludes statutory financial assets and liabilities (i.e. GST input tax credit and GST payable)Northern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 49 of 60
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contentsReport of Operations02 Chai
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CEO’s ReportThe 2011-12 financial
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Northern Health BoardProfessor Glen
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Northern Health Board cont’dProfe
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Corporate GovernanceAppointment of
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Corporate Governance cont’dMr Nev
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Executive Team cont’dAdjunct Prof
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Organisation StructureNorthern Heal
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Our Services cont’dAdmitted Patie
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Our Services cont’dOther Services
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Our AchievementsDeliver quality hea
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Our Achievements cont’dBuild corp
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Our Achievements cont’dThe outsta
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Our Achievements cont’dEnhancing
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Our Achievements cont’dand diabet
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Our Achievements cont’dThe Depart
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Northern Health FoundationThe North
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Statement of PrioritiesThe Statemen
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Statement of Priorities cont’dVic
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Performance PrioritiesFinancial per
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Corporate InformationGeneral Inform
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Corporate InformationWhistleblowers
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Financial Summary2011/12 2010/11000
Page 51 and 52: Disclosure Index cont’dLegislatio
Page 53 and 54: Northern HealthFinancial Statements
Page 55 and 56: Northern Health Annual Report 2011/
Page 61 and 62: Note 1: Summary of Significant Acco
Page 77 and 78: Notes To and Forming Part of the Fi
Page 79 and 80: Note 2a: Analysis of Revenue by Sou
Page 81 and 82: Note 3: ExpensesNotes To and Formin
Page 83 and 84: Note 3a: Analysis of Expenses by So
Page 89 and 90: Note 11: Property, Plant & Equipmen
Page 91 and 92: Note 12: Intangible AssetsNotes To
Page 93 and 94: Note 14: BorrowingsNotes To and For
Page 97 and 98: Note 18: Reconciliation of Net Resu
Page 99 and 100: Note 19: Financial Instruments (con
Page 101: Note 19: Financial Instruments (con
Page 107 and 108: Note 23a: Responsible Persons Discl
Page 109 and 110: Note 24: Events Occurring after the
Page 111 and 112: Northern Health Financial Report Ap
Page 113 and 114: THIS PAGE HAS BEEN INTENTIONALLY LE
Page 116: Broadmeadows Health Service35 Johns
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Annual Report - Northern Health

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