d irectors’ report

DIRECTORS’ REPORT 2014

1

The directors hereby present their report for the year ended 30 June 2014.

DIRECTORS The names and details of directors in office at the date of this report are:

Professor Diana Horvath AO MB BS, FRACMA, FAFPHM, FACHSE

Chair Teaching position at the Medical School at USyd Director, Lifehouse RPAH

Professor Robert Lusby MD, MB BS, FRCS, FRACS Deputy Chair Head of the University of Sydney Clinical School at Concord Hospital Associate Dean of the Faculty of Medicine

Professor David J Handelsman MB BS FRACP PhD Secretary to Board Director, ANZAC Research Institute Associate Dean (Research Strategy), Sydney Medical School, University of Sydney Sub-Dean Research (Concord), Concord Medical School, University of Sydney Head, Department of Andrology, Concord Hospital Dr Teresa Anderson B App Science (Speech Therapy), PhD Chief Executive, Sydney Local Health District

Dr Tim Sinclair PhD (Bus. Admin), M. Health Services Management,

B.App.Sc (Health Information Management) General Manager of Concord Repatriation General Hospital, Sydney Local Health District. He is also a Director on the ANZAC Health and Medical Research Foundation and an Advisory Board Member of the Australian Institute of Health Services Management.

Professor Bruce Robinson AM MB BS FRACP FAICD Dean, Faculty of Medicine, University of Sydney

Professor Ben Freedman OAM MBBS, BSc (Med), PhD, FRACP, FACC

(Alternate Director for Prof Bruce Robinson)

Professor of Cardiology at Concord Hospital, University of Sydney, Sydney Medical School. Head of the Vascular Biology Group of The ANZAC Research Institute. Director on the following Boards: Centre for Vascular Research, Microsearch Foundation, and the Heart Foundation of Australia Research Committee. Fellow of the American College of Cardiology (FACC), the European Society of Cardiology (FESC), and the Cardiac Society of Australia and New Zealand (FCSANZ).

Professor Arthur Conigrave MD PhD FRACP (Alternate Director for

Prof Bruce Robinson)

Professor, School of Molecular Bioscience, University of Sydney Associate Dean (Finance & Administration) and Deputy Dean, Sydney Medical School Endocrinologist, Royal Prince Alfred Hospital

Mr Paul Levins BA

President Intellectual Ventures Honorary Associate of the University of Sydney Graduate School of Government. Independent Director of auDA (Australia’s .au domain)

DIRECTORS’ REPORT

Ms Kerry Hogan-Ross BA LLB

Director, ANZAC Research Institute. Mediator at Kerry Hogan-Ross Mediations

Dr Katherine Moore B.App.Sc.(Occ Therapy); M.App.Sc.(Occ Therapy); PhD

(Health Services Management)

Director of Clinical Governance in the Sydney Local Health District. Practitioner member from New South Wales. Previously president of the NSW Occupational Therapy Association.

Dr Ilona Cunningham M.B.B.S., Fellowship of The Royal Australasian College

of Physicians, Fellowship in Haematology

Senior Staff Specialist, Head of Department, Department of Haematology- Concord Repatriation General Hospital

Mr George Elias B.Comm., Dip. FP., CPA(FPS), SSA, MFAA Credit Adviser

TM, CERTIFIED FINANCIAL PLANNER® professional, SMSF Specialist Advisor TM

Principal of Elias Financial Services and is an Authorised Representative of Count Financial Limited

Professor Michael Field AM MD, BS, BSc(Hons), FRACP (Resigned

3/6/2014) Acting Chair of the Finance Subcommittee, Professor Emeritus, University of Sydney, Vice-President, Association for Medical Education in the West Pacific Region

Mrs Eve Bosak BA(Acc), FCPA, CA, ACIS, ACIP (Leave of Absence since

22.5.2013) (Resigned 20/11/2013)

Member and Chair of Financial Statements Sub Committee, Departmental Audit Committee, Sustainability, Environment, Water, Population and Communities (SEWPaC) Member, Audit and Risk Committee, NSW Department of Community Services Chair, Governing Council, Southern NSW Local Health Network Director, International Council for Agricultural Research in Dry Areas (ICARDA) Director, Governance Asia Pty Ltd

Dr Ross Bradbury MB BS, FRCPA, FRCPA (Resigned 20/11/2013) Head of Microbiology, Concord Repatriation General Hospital Mr Matthew Swanborough B Applied Science (USyd) (Resigned 21/8/2013)

Acting Director of Operations, Sydney Local Health District External Committees/Boards-Parklands Advisory Committee – Sydney Olympic Park Authority

At this date no director has any interest in the equity of the Foundation.

PRINCIPAL ACTIVITIES The principal activities of the ANZAC Health and Medical Research Foundation during the year were that of acting as trustee for the ANZAC Health and Medical Research Foundation Trust Fund. There was no significant change in the nature of that activity during the year. OPERATING RESULTS FOR THE YEAR The Company did not trade in its own right, and made neither a profit nor a loss and the company does not incur expenses as they are paid by the Trust Fund.


2

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS There were no significant changes in the state of affairs of the ANZAC Health and Medical Research Foundation during the year. SIGNFICANT EVENTS AFTER THE BALANCE DATE No matter or circumstances have arisen since the end of the

financial period which significantly affected or may significantly

affect the operations of the ANZAC Health and Medical Research

Foundation, the results of those operations, or the state of affairs

of the ANZAC Health and Medical Research Foundation in

subsequent years.

LIKELY DEVELOPMENTS

The Company will continue to act as trustee of the ANZAC

Health and Medical Research Foundation Trust Fund.

REVIEW OF OPERATIONS

ANZAC Health and Medical Research Foundation continue to

manage the operations of the ANZAC Research Institute and

have progressed successfully in the last Financial Year.

Scientific Research Contributions continued to flow with

increased grant income earned from Government, charitable

foundation and health product companies. Corresponding then

was increased expenditure for research activities.

SHORT AND LONG TERM OBJECTIVES

The Company’s objective is to foster excellent health and medical

research through providing a state-of-the-art facilities and a

researcher-friendly working environment.

STRATEGY FOR ACHIEVING THE OBJECTIVES

The Company sets to support the research of high quality health

and medical research undertaken by researchers based at ANZAC

Research Institute in providing research facilities and services.

PRINCIPAL ACTIVITIES ASSIST IN ACHIEVING

THE OBJECTIVES

The Institute’s principal activities are in providing research

facilities and services for the researchers with their scientific

home at the ANZAC Research Institute

INDEMNIFICATION AND INSURANCE OF

DIRECTORS

The ANZAC Health and Medical Research Foundation during or

since the financial year, in respect of any person who is or has

been an officer, has not been

indemnified or made any relevant agreement for indemnifying against a liability incurred as an officer, including costs or expenses in successfully defending legal proceedings; or

paid or agreed to pay a premium in respect of a contract insuring against a liability incurred as an officer for the costs or expenses to defend legal proceedings

CGU Professional Risks Insurance, a division of CGU Insurance

Limited, insures all directors against liabilities for costs and

expenses incurred by them in defending any legal proceedings

arising out of their conduct while acting in the capacity of

director of the Company, other than conduct involving a wilful

breach of duty in relation to the Company.

MEETINGS OF DIRECTORS

During the financial period, meetings of directors were held and

attendances are tabulated below:

BOARD MEETINGS

Eligible

to

Attend

Number

Attended

Approved

leave of

absence

Prof D Horvath (Chair) 4 3 1

Prof R Lusby (Deputy Chair) 4 3 1

Prof D Handelsman 4 4 0

Dr T Anderson (Resigned 08/10/2013 Re-

joined 3/6/14) 1 0 1

Dr Tim Sinclair (Appointed 29/09/2013) 3 3 0

Prof B Robinson 4 0 4

Prof B Freedman (Alt for B Robinson) 4 2 2

Prof A Conigrave (Alt for B Robinson) 4 2 2

Mr P Levins 4 3 1

Ms K Hogan-Ross 4 3 1

Dr K Moore (Appointed 20/11/2013) 3 3 0

Dr I Cunningham (Appointed 20/11/2013) 3 2 1

Mr G Elias (Appointed 20/11/2013) 3 3 0

Prof M Field (Resigned 03/06/2014) 4 4 0

Dr R Bradbury (Resigned 20/11/2013 at AGM) 1 1 0

Mrs E Bosak (Resigned 20/11/2013 at AGM) 1 0 1

Mr M Swanborough (Resigned 21/08/2013) 1 1 0

EMPLOYEES

The Foundation employed no employees as at 30 June 2014

(2013: nil employees).

ENVIRONMENTAL REGULATION AND

PERFORMANCE

The Foundation is not subject to any environmental regulation.

MEMBER’S GUARANTEE

In accordance with the company’s constitution, each member is

liable to contribute $20 in the event that the company is wound up.

The total amount members would contribute is $220.


3

DIRECTORS’ REPORT (Continued)

AUDITOR’S INDEPENDENCE DECLARATION

The Auditor’s independence declaration is set out elsewhere in these financial statements.

Signed in accordance with a resolution of the Board of Directors.

Diana Horvath David Handelsman

Chair Director

Dated this 25th day of September 2014 at Sydney.

FOUNDATION REPORT 2014

4

AUDIT REPORT


5

AUDIT REPORT Continued


6


7

STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 30 JUNE 2014

Notes 2014 2013

$ $

Expenses 0 0

Revenue 0 0

Operating result 2 0 0

Other Comprehensive Income

Items that will not be reclassified to Operating Result 0 0

Items that may be reclassified to Operating Result 0 0 Total Comprehensive Income For The Year 0 0

The accompanying notes form part of these Financial Statements.

STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2014

2014 2013

$ $

Total Assets 0 0

Total Liabilities

0

0

Net Assets

0

0

Equity Accumulated Funds

0

0



8

STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30 JUNE 2014 Accumulated Funds

$

Balance at 1 July 2013

Result for The Year 0

Other Comprehensive Income 0

Total Comprehensive Income for the Year 0

Transactions With Owners in their Capacity As Owners

Increase/(Decrease) in Net Assets From Equity Transfers 0

Balance at 30 June 2014 0

Balance at 1 July 2012 0

Result for The Year 0

Other Comprehensive Income 0

Total Comprehensive Income for the Year 0

Transactions With Owners in their Capacity As Owners

Increase/(Decrease) in Net Assets From Equity Transfers 0

Balance at 30 June 2013 0


STATEMENT OF CASH FLOW

FOR THE YEAR ENDED 30 JUNE 2014 2014 2013

$ $

CASH FLOWS FROM OPERATING ACTIVITIES 0 0

NET INCREASE / (DECREASE) IN CASH

0

0

Opening Cash and Cash Equivalents

0

0

Closing Cash and Cash Equivalents

0

0



9

NOTES TO THE FINANCIAL STATEMENTS

30 JUNE 2014

CORPORATE INFORMATION

The financial report is for the ANZAC Health and Medical Research Foundation (Foundation) as an

individual entity, incorporated and domiciled in Australia. Foundation is a company limited by guarantee.

These financial statements have been authorised for issue by the Board on 25th September 2014.

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(A) BASIS OF PREPARATION

The financial report is a general purpose financial report that complies with the requirements of the Corporations Act 2001, Australian Accounting Standards, Australian Accounting interpretations and other authoritative pronouncements of the Australian Accounting Standards Board and with the requirements of the Public Finance and Audit Act 1983 and its regulations in accordance with the Trust Deed (dated 21 February 1995).

Historical cost convention

The financial statements have been prepared on the basis of historical cost except certain financial assets

are measured at fair value as indicated below.

All amounts are expressed in Australian currency.

Judgements, key assumptions and estimations made by management are disclosed in the relevant notes

to the financial statements.

Comparative figures are, where appropriate, reclassified to give a meaningful comparison with the current

year. Except when an Australian Accounting Standard permits or requires otherwise, comparative

information is presented in respect of the previous period for all amounts reported in the financial

statements.

New Australian Accounting Standards Issued but not Effective

New or revised Australian Accounting Standards effective for the first time or not yet effective in 2013-14 do

not have material impact in the financial statements.

(B) INCOME TAX

The Foundation is exempt from income tax.

(C) TRUSTEE

The Foundation acts as trustee for the ANZAC Health and Medical Research Foundation Trust Fund. The

accounting policies adopted by the Company in the preparation of the financial statements for the year

ended 30 June 2014 reflect the fiduciary nature of the Company’s responsibility for the assets and liabilities

of the ANZAC Health and Medical Research Foundation Trust Fund which are set out in Note 4.


10

NOTES TO THE FINANCIAL STATEMENTS (Continued)

30 June 2014

NOTE 2: OPERATING RESULT

The Foundation did not trade during the past financial year.

NOTE 3: STATEMENT OF CASH FLOWS

The Foundation does not maintain a bank account and has no other source of funding that meets the

definition of a cash equivalent.

NOTE 4: ASSETS AND LIABILITIES OF THE FOUNDATION

The Foundation acts as trustee for the ANZAC Health and Medical Research Foundation Trust Fund. The

assets and liabilities of the ANZAC Health and Medical Research Foundation Trust Fund as disclosed in

the financial statements of the Trust are as follows:

2014 2013

$ $

Current Assets 20,823,097 19,056,386

Non-Current Assets 10,941,752 10,867,991

TOTAL ASSETS 31,764,849 29,924,377

Current liabilities 1,570,205 1,392,755

Non-Current liabilities 0 0

TOTAL LIABILITIES 1,570,205 1,392,755

NET ASSETS 30,194,645 28,531,622

Represented by TRUST FUNDS 30,194,645 28,531,622

NOTE 5: GUARANTEE CAPITAL

The Foundation is limited by guarantee of its members and therefore there is no issued share capital.

Every member of the company undertakes to contribute to the assets of the company in the event of it

being wound up during the time they are member or within one year afterwards for:

payment of debts and liabilities of the company contracted before the time at which they ceased to

be a member,

costs, charges and expenses of winding up the company, and

adjustments of the rights of the contributions amongst themselves such amount as may be

required but not exceeding twenty dollars ($20).

At 30 June 2014, the Foundation has 11 members.


11


30 June 2014

NOTE 6: AUDITORS’ REMUNERATION

The auditors’ remuneration was paid by a related party. No amounts were charged to the Foundation by

the related party in respect of the auditors’ remuneration.

NOTE 7: SEGMENT INFORMATION

As the trustee for the ANZAC Health and Medical Research Foundation Trust Fund, the principal activity of

the Trust during the financial period was to promote and facilitate healthcare delivery and research on

illness and disease associated with lifestyle and ageing. The financial results of the Trust reflect the

conduct of this activity.

2014 2013

(a) Segment Revenues and Results $ $

Revenue 9,942,495 10,375,916

Expenses

Gain/(Loss) on Disposal

8,627,184

(20,106)

7,910,665

(23,979)

(Deficit)/Surplus for the year 1,295,205 2,441,272

2014 2013

(b) Segment Assets and Liabilities $ $

Segment Assets

Current Assets 20,823,097 19,056,386

Non-Current Assets 10,941,752 10,867,991

Total Assets 31,764,849 29,924,377

Segment Liabilities

Current Liabilities 1,570,205 1,392,755

Non-Current Liabilities 0 0

Total Liabilities 1,570,205 1,392,755

The geographical location of the Foundation is Australia.

NOTE 8: CONTINGENT LIABILITIES AND CONTINGENT ASSETS

At the date of this report the trust fund has no known contingent liabilities and contingent assets (2013: Nil).

NOTE 9: AFTER BALANCE DATE EVENTS

After the reporting date there were no events subsequent which would have a material effect on

Foundation and the Trust Funds financial statements.

END OF AUDITED FINANCIAL STATEMENTS


12

DIRECTORS’ DECLARATION

In accordance with a resolution of the directors of ANZAC Health and Medical Research Foundation

(Foundation), we state that:

In the opinion of the directors:

(a) the financial statements and notes of the Foundation are in accordance with the Corporations’ Act 2001, including:

(i) giving a true and fair view of the Foundation’s financial position as at 30 June 2014 and of its performance for the year ended on that date; and

(ii) complying with the applicable Australian Accounting Standards which include Australian Accounting Interpretation and Corporations’ Regulations 2001; and

(b) the provisions of the Public Finance and Audit Act 1983 and the Public Finance and Audit Regulation

2010 have been complied with;

(c) there are reasonable grounds to believe that the Foundation will be able to pay its debts as and

when they become due and payable.

On behalf of the Board of directors


Chairman Director


TRUST REPORT 2014

13

AUDIT REPORT

TRUST REPORT 2014

14


TRUST REPORT 2014

15


TRUST REPORT 2014

16

STATEMENT OF COMPREHENSIVE INCOME


Notes

2014

$

2013

$

Revenue

Expenses

2(a)

2(b)

9,942,495

8,627,184

10,375,916

7,910,665

Operating (Deficit)/Surplus

Gain/(Loss) on Disposal

1,315,311

(20,106)

2,465,251

(23,979)

(Deficit)/Surplus for the Year 1,295,205 2,441,272


Items that will not be reclassified to

(Deficit)/Surplus

Net Increase/(Decrease) in Property, Plant &

Equipment Asset Revaluation Surplus

367,817

2,082,180

Total Comprehensive Income for the Year 1,663,022 4,523,452


TRUST REPORT 2014

17

STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2014

2014

2013

Notes

$

$

CURRENT ASSETS

Cash and Cash Equivalents 4

19,080,647 17,251,234

Financial Assets at Fair Value

5

374,454

347,827

Receivables

6

1,367,996

1,457,325

TOTAL CURRENT ASSETS

20,823,097

19,056,386

NON-CURRENT ASSETS

Property, Plant and Equipment

7

10,941,752

10,867,991

TOTAL NON-CURRENT ASSETS

10,941,752

10,867,991

TOTAL ASSETS

31,764,849

29,924,377

CURRENT LIABILITIES

Payables

Provisions

8

9

915,784

654,421

862,237

530,518 TOTAL CURRENT LIABILITIES

1,570,205

1,392,755

NON-CURRENT LIABILITIES

Provisions

9

0

0

TOTAL NON-CURRENT LIABILITIES

0

0

TOTAL LIABILITIES

1,570,205

1,392,755

NET ASSETS

30,194,644

28,531,622

TRUST FUNDS

Settlement Account

100 100

Accumulated Funds

26,799,834 25,504,629

Asset Revaluation Reserve

3,394,710 3,026,893

TOTAL TRUST FUNDS

30,194,644 28,531,622


TRUST REPORT 2014

18

STATEMENT OF CHANGE IN EQUITY


Accumulated

Funds

$

Settlement

Account

$

Asset

Revaluation

Reserve

$

Total

$

Balance at 1 July 2013 25,504,629 100 3,026,893 28,531,622

(Deficit)/Surplus for the Year

1,295,205

0

0

1,295,205


Net Increase/(Decrease) in

Property, Plant & Equipment

Revaluation

0 0 367,817 367,817

Total Comprehensive Income

for the Year

1,295,205 0 367,817 1,663,022

Transactions With Owners in

their Capacity as Owners

0 0 0 0

Increase/(Decrease) in Net

Assets From Equity Transfers

0 0 0 0

Balance at 30 June 2014 26,799,834 100 3,394,710 30,194,644

Balance at 1 July 2012 23,063,357 100 944,713 24,008,170

(Deficit)/Surplus for the Year 2,441,272 0 0 2,441,272


Net Increase/(Decrease) in

Property, Plant & Equipment

Revaluation 0 0 2,082,180 2,082,180

Total Comprehensive

Income for the Year

2,441,272 0 2,082,180 4,523,452

Transactions With Owners in their

Capacity as Owners 0 0 0 0

Increase/(Decrease) in Net Assets

From Equity Transfers 0 0 0 0

Balance at 30 June 2013 25,504,629 100 3,026,893 28,531,622


TRUST REPORT 2014

19

STATEMENT OF CASH FLOW


2014

2013

CASH FLOWS FROM OPERATING ACTIVITIES

Notes

$

$

Receipts State Government Funding

Receipts Cancer Institute

Receipts from Donations

Receipts from Peer Reviewed Funding/

Infrastructure Grant

770,064

986,538

267,539

5,877,589

770,064

990,480

683,846

5,308,764

Payments to Suppliers and for Personnel Services

(8,500,077)

(8,333,718)

Interest Received

666,001

742,809

Other Receipts

2,210,224

1,730,760

NET CASH FLOWS FROM OPERATING

ACTIVITIES

3

2,277,878

1,893,005

CASH FLOWS FROM INVESTING ACTIVITIES

Payment for Property, Plant and Equipment

Proceeds from Sale of Investment

7

(421,838)

(26,627)

(409,849)

(33,734)

NET CASH FLOWS (USED IN) / FROM INVESTING

ACTIVITIES

(448,465)

(443,583)

CASH FLOW FROM FINANCING ACTIVITIES

Repayment of Borrowings

0

0

NET CASH FLOWS USED IN FINANCING

ACTIVITIES

0

0

NET INCREASE / (DECREASE) IN CASH

1,829,413

1,449,422 Opening Cash and Cash Equivalents

17,251,234

15,801,812 CLOSING CASH AND CASH EQUIVALENTS

4

19,080,647

17,251,234


TRUST REPORT 2014

20

NOTES TO THE FINANCIAL STATEMENTS

30 JUNE 2014

REPORTING ENTITY

The ANZAC Health and Medical Research Foundation Trust Fund (ANZAC) is an economic entity

whose principal activity is research and is a not-for-profit organization. It is consolidated as part of the

Sydney Local Health District and NSW Total State Sector Accounts.

ANZAC does not have any employees. It purchases personnel services from Sydney Local Health

District Division (previously part of Sydney South West Area Health Service).

These financial statements have been authorised for issue by David Handelsman and Diana Horvath,

Directors, on 25th day of September 2014.

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(A) BASIS OF PREPARATION

The financial statements are a general purpose financial statement that have been prepared in accordance with applicable Australian Accounting Standards (which include Australian Accounting Interpretations) and with the requirements of the Public Finance and Audit Act 1983 and Regulation. Property, plant and equipment and financial assets at fair value through profit and loss are measured at fair value. Other financial statements items are prepared in accordance with the historical cost convention. All amounts are expressed in Australian currency. Judgements, key assumptions and estimations made by management are disclosed in the relevant notes to the financial statements.

(B) COMPARATIVES INFORMATION

Comparative figures are, where appropriate, reclassified to give a meaningful comparison with the

current year. Except when an Australian Accounting Standard permits or requires otherwise,

comparative information is presented in respect of the previous period for all amounts reported in the

financial statements.

(C) PERSONNEL SERVICES COSTS

ANZAC Health and Medical Research Foundation Trust Fund does not have any employees. It

purchases personnel services from Sydney Local Health District Division.

The accrued salaries and wages component of the Personnel Services Liability is reported as “Current”

as there is an unconditional right to payment.

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 Treasury has confirmed that the use of a nominal

approach plus the annual leave on annual leave liability can be used to approximate the present value

of the annual leave liability.

The Annual Leave component of the Personnel Services Liability is reported as “Current” as there is an

TRUST REPORT 2014

21


30 June 2014

unconditional right to payment. Current liabilities are based on past trends and known resignations and

retirements. Anticipated payments to be made in the next twelve months are reported as “Short Term”.

On-costs of 16.5% are applied to the value of leave payable at 30 June 2014, such on costs being

consistent with actuarial assessment (Comparable on costs for 30 June 2013 were also 14.9%).

Responsibility for Long Service Leave Liability attached to employees of the Network transferred to the

Crown Entity from the former Sydney South West Area Health Service with effect from 31 December

2010 and, therefore do not appear in the financial statements. As is the case with other Budget sector

agencies both the Defined Benefit Superannuation (State Authorities Superannuation Scheme and

State Superannuation Scheme) and Long Service Leave Liabilities are assumed by the Crown Entity.

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 14/04) 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 fair value.

(D) PERSONNEL SERVICES LIABILITY

Provisions are recognised when:

the Trust has a legal, equitable or constructive obligation as a result of past transactions or

other past events;

it is probable that a future sacrifice of economic benefits will be required to settle the obligation;

and a reliable estimate can be made of the amount of the obligation.

(E) INCOME RECOGNITION

Revenue arising from the provision of services and the use of the Trust’s assets is recognised when:

a) the Trust has passed control of the goods or other assets to the buyer;

b) the Trust controls a right to be compensated for services rendered;

c) the Trust controls a right relating to the consideration payable for the provision of investment

assets;

d) it is probable that the economic benefits comprising the consideration will flow to the entity;

e) the amount of the revenue can be measured reliably.

The following specific recognition criteria must also be met before revenue is recognised:

Grants and Donations

Operating grants received from the Government are generally recognised as revenues when ANZAC

obtains control over the assets comprising the contributions. Control over contributions is normally

obtained upon receipt of cash.

Investment income

Interest revenue is recognised using the effective interest method as set out in AASB 139 Financial

Instruments: Recognition and Measurement.

TRUST REPORT 2014

22


30 June 2014

(F) GOODS AND SERVICES TAX (GST)

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

the amount of GST incurred by the Trust as a purchaser that is not recoverable from the

Australian Tax Office is recognised as part of the cost of acquisition of an asset or as part of an

item of expense;

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

Cash flows are included in the Statement of Cash Flows on a gross basis. However, the GST

component of cash flows arising from investing and financing activities which is recoverable from, or

payable to, the Australian Taxation Office are classified as operating cash flows.

(G) RESEARCH AND DEVELOPMENT COSTS

Research and development costs are charged as an expense in the year in which they are incurred.

(H) ACQUISITION OF ASSETS

The cost method of accounting is used for the initial recording of all acquisitions of assets. 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.

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 amount for which an asset could be exchanged between knowledgeable, willing parties

in an arm’s length transaction.

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 at an asset-specific rate.

(I) CAPITALISATION THREHOLDS

Individual items of property, plant & equipment are capitalised where their cost is $10,000 or above.

(J) DEPRECIATION OF PROPERTY, PLANT AND EQUIPMENT

Depreciation is provided for on a straight-line basis for all depreciable assets so as to write off the

depreciable amount of each depreciable asset as it is consumed over its useful life to the ANZAC

Health and Medical Research Foundation Trust Fund.

Depreciation rates on individual assets are reviewed annually.

Details of depreciation rates and useful lives for major asset categories, according to the NSW

Department of Health Accounting Manual rates, are as follows:

TRUST REPORT 2014

23


30 June 2014

Depreciation Rates Rate (%) Life (years)

Leasehold Buildings 4.0 25

Electro Medical Equipment

Costing less than $200,000

Costing more than $200,000

10.0

12.5

10

8

Computer Equipment 20.0 5

Computer Software 20.0 5

Office Equipment 10.0 10

Plant and Machinery 10.0 10

Furniture, Fittings and Furnishings 10.0 10

Depreciation rates are subsequently varied where changes occur in the assessment of the remaining

useful life of the assets reported.

(K) REVALUATION AND IMPAIRMENT OF PROPERTY, PLANT AND EQUIPMENT

Physical non-current assets are valued in accordance with the NSW Ministry of Health’s "Valuation of

Physical Non-Current Assets at Fair Value" policy. This policy adopts fair value in accordance with

AASB116 Property, Plant and Equipment.

Property, plant and equipment is measured on an existing use basis, where there are no feasible

alternative uses in the existing natural, legal, financial and socio-political environment. However, in the

limited circumstances where there are feasible alternative uses, assets are valued at their highest and

best use.

ANZAC revalues leasehold buildings at a minimum of every three years by independent valuation and

with sufficient regularity to ensure that the carrying amount of each asset does not differ materially from

its fair value at reporting date. The last revaluation for assets held by the Trust as at 30 June 2013 was

completed in June 2013 and was based on an independent assessment.

Non-specialised assets with short useful lives are measured at depreciated historical cost, as a

surrogate for fair value.

When revaluing non-current assets by reference to current prices for assets newer than those being

revalued (adjusted to reflect the present condition of the assets), the gross amount and the related

accumulated depreciation are separately restated.

For other assets, 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.

Revaluation increments are credited directly to the asset revaluation reserve, except that, to the extent

that an increment reverses a revaluation decrement in respect of that class of asset previously

recognised as an expense in the surplus / (deficit) for the year, the increment is recognised immediately

as revenue in the surplus / (deficit) for the year.

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 asset revaluation reserve in respect of the same

TRUST REPORT 2014

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30 June 2014

class of assets, they are debited directly to the asset revaluation reserve. 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 asset

revaluation reserve in respect of that asst is transferred to accumulated funds.

Costs incurred in relation to the construction of the ANZAC Health & Medical Research Institute have

been capitalised as leasehold buildings. Leasehold buildings are carried at fair value.

The leasehold buildings have been built on land leased from Sydney Local Health District. The rent

during the initial term of the lease is in the sum of one dollar ($1) per annum. The lease for the land

and buildings is for 25 years which will end in December 2027. The New South Wales’ Minister of

Health may terminate this lease on expiry by effluxion of the term of the lease or for breach of its term,

or at any time on reasonable notice.

The lease for the ANZAC Foundation Building has been classified as a finance lease based on the

following judgements:

The 25 year lease term represents the major part of the economic life of the building,

The ANZAC Research Institute will occupy the building for the term of the lease,

While the New South Wales’ Minister of Health has the right to terminate the lease at any time

with reasonable notice (as noted above), the economic substance of the lease is that this right

will not be exercised during the term of the lease.

As a not-for-profit entity with no cash generating units, AASB 136 Impairment of Assets and impairment

testing is not applicable. This is because AASB 136 modifies the recoverable amount test to the higher

of fair value less costs to sell and depreciated replacement cost. This means that, for an asset already

measured at fair value, impairment can only arise if selling costs are regarded as material. Selling

costs are regarded as immaterial.

(L) INCOME TAX

The Trust Fund is exempt from income tax under Section 30-15 of the Income Tax Assessment Act

1997.

(M) CASH AND CASH EQUIVALENTS

For the purpose of the Statement of Cash Flows, cash and cash equivalent include cash on hand and at

call deposits with banks or financial institutions.

(N) SETTLEMENT ACCOUNT

The ANZAC Health and Medical Research Foundation Trust Fund was made between Robert Edward

McKeown, the settlor, and the ANZAC Health and Medical Research Foundation, the trustee, on 21

February 1995. The Trust has carried out all operating activities in accordance with the provisions of the

trust deed.

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30 June 2014

(O) MAINTENANCE

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.

(P) LOANS AND RECEIVABLES

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, usually

based on the transaction cost or face 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 surplus / (deficit) for the year 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.

(Q) INVESTMENTS

Investments are initially recognised at fair value plus, in the case of investments not at fair value

through profit or loss, transaction costs. The ANZAC determines the classification of its financial assets

after initial recognition and, when allowed and appropriate, re-evaluates this at each financial year end.

(R) IMPAIRMENT OF FINANCIAL ASSETS

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 surplus / (deficit) for the

year.

(S) PAYABLES

These amounts represent liabilities for goods and services provided to the ANZAC and other amounts.

Payables are recognised initially at fair value, usually based on the transaction cost or face 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.

Payables are recognised for amounts to be paid in the future for goods and services received, whether

or not billed to ANZAC.

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30 June 2014

(T) TRUST FUNDS AND RESERVES

(i) Asset Revaluation Reserve

The asset revaluation reserve is used to record increments and decrements on the revaluation of non-

current assets. This accords with the Anzac policy on the revaluation of property, plant and equipment

as discussed in note 1(K).

(ii) Accumulated Funds

The category accumulated funds includes all current and prior period retained funds.

(U) FAIR VALUE HIERARCHY

A number of ANZAC’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, ANZAC 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 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).

ANZAC recognises transfers between levels of the fair value hierarchy at the end of the reporting period

during which the change has occurred.

Refer Note 15 and Note 16 for further disclosures regarding fair value measurements of financial and

non-financial assets.

(V) NEW AUSTRALIAN ACCOUNTING STANDARDS ISSUED BUT NOT EFFECTIVE

(i) Effective for the first time in 2013-14

The accounting policies applied in 2013-14 are consistent with those of the previous financial year

except as a result of the following new or revised Australian Accounting Standards that have

impacted in 2013-14 and have been applied for the first time as follows:

AASB 13, AASB 2011-8 and AASB 2012-1, Fair Value Measurement have mandatory application from 1 July 2013 and address, inter alia, the assumptions that market participants would use when pricing the asset and liability. No impact to prior year values, increased note disclosures, refer note 15.

AASB 119, AASB 2011-10 and AASB 2011-11, regarding employee entitlements, have mandatory application from 1 July 2013 and cover the recognition and measurement of short term and long term employee benefits. Refer note 9.

AASB 2012-2 Amendments to Australian Accounting Standard – Offsetting Financial Assets and Financial Liabilities, has application for reporting periods starting on or after 1 January 2013 and seeks to address some of the offsetting criteria of AASB 7.

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30 June 2014

(ii) Issued but not yet effective

There are some Australian Accounting Standards and other authoritative pronouncements of the

Australian Accounting Standards Board that have been issued but are not yet effective. ANZAC

has not early adopted these and does not consider that the adoption of the Standards and

pronouncements will have a significant impact upon the Financial Statements.

The following new Australian Accounting Standards have not been applied and are not yet effective. The possible impact of these Standards in the period of initial application includes:

AASB 2010-7, Financial Instruments have mandatory application from 1 July 2015 and comprise changes to improve and simplify the approach for classification and measurement of financial assets. The change is not expected to materially impact the financial statements.

AASB 9, Financial Instruments, has application from 1 January 2017. Standard is to establish principles for the financial reporting of financial assets and financial liabilities that will present relevant and useful information to users of financial statements for their assessment of the amounts, timing and uncertainty of an entity’s future cash flows.

AASB 1031, Materiality, is applicable to annual reporting periods beginning on or after 1 January 2014. This Standard provides references to other Standards and the Framework that contain guidance on materiality.

AASB 2012-3, Amendments to Australian Accounting Standard – Offsetting Financial Assets and Financial Liabilities, has application from 1 January 2014 and seeks to address inconsistencies identified in applying some of the offsetting criteria of AASB 132.

AASB 2013-3, Amendments to AASB 136 – Recoverable amount Disclosures for Non-Financial Assets, has application from 1 July 2014.

AASB 2013-6, Amendments to AASB 136 arising from Reduced Disclosure Requirements, has application from 1 July 2014.

AASB 2013-8, Amendments to Australian Accounting Standards – Australian implementation Guidance for Not-for-Profit Entities – Control and Structured Entities, has application from 1 July 2014.

AASB 2013-9, Amendments to Australian Accounting Standards – Conceptual Framework, Materiality and Financial Instruments.

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30 June 2014

NOTE 2: REVENUE AND EXPENSES

2014 2013 (a) Revenue

$ $

Donations Corporate

19,000

107,651

Donations RSL 1,600 7,400 Donations Other 320,309 557,696 Fundraising Activities 1,630 11,099 State Government Funding 700,058 700,058 Cancer Institute Grant 896,853 900,436 Interest Income 667,690 719,834 Peer Reviewed Funding Infrastructure Grant

3,767,430 1,162,782

4,669,783 957,398

Contribution from Hospital Departments 385,240 742,079 Sponsorship 28,032 27,814 Research Service 293,944 264,227 Research Study 1,476,824 646,649 Other Revenue 221,103 63,792

Total Revenue 9,942,495 10,375,916

(b) Expenses

Personnel Services Costs 4,875,950 4,473,956 Consumables 1,347,177 1,381,611 Administrative

Conference, Training & Travel

271,442

200,852 Advertising 480 2,256 Functions 24,656 26,109 Accounting & Legal Fees 22,815 37,435 Audit Fees 25,100 24,500 Payment of Grants 185,838 122,758 Accreditation Fees 352 0 Scholarships 253,459 287,079 Books & Reference Material 25,193 24,875 Stationery & Office Supplies 39,441 36,247 Freight & Courier 64,807 66,660 Interest Expense on Borrowing Directors & Officers Liability Insurance

0 3,586

12 3,621

Miscellaneous Administrative Expenses 430,037 118,820

1,347,206 951,224

Depreciation 830,788 818,479 Repairs, Maintenance & Renewals

Equipment 105,879 164,241 Other 121,184 121,154

226,063 285,395

Total Expenses 8,627,184 7,910,665

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30 June 2014

NOTE 3: RECONCILIATION OF CASH FLOWS FROM OPERATING ACTIVITIES TO SURPLUS FOR

THE YEAR

2014

$

2013

$

Net Cash Flows from Operating Activities 2,277,878

1,893,005

Gain/(Loss) on Disposal (20,106)

(23,979)

Recognition of Assets Previously Expensed 135,000

0

Depreciation (830,788)

(818,479)

(Increase)/Decrease in Payable for Personnel Services

Liability

(47,792)

586,216

(Increase)/Decrease in Payables (5,754)

(119,781)

(Increase)/Decrease in Provision (123,903)

(28,104)

Increase/(Decrease) in Receivables (89,330) 952,394

Surplus for the year 1,295,205

2,441,272

NOTE 4: CASH AND CASH EQUIVALENTS

(a) Cash

Cash on hand 0 50

General Professional Funds Account 648,457 1,059,979

Research Professional Funds Account 751,389 1,802,305

Donations Cash Management Account 7,292 9,167

Total Cash 1,407,138 2,871,501

Term Deposits at Bank 17,673,509 14,379,733

Total Cash and Cash Equivalents

19,080,647

17,251,234

Information on the effective interest rate, credit risk and market risk of cash and cash equivalents is

disclosed in Note 16.

(b) Reconciliation of Cash

Cash at the End of the Financial Year as shown in the

Statement of Cash Flows is reconciled to the related

items in the Statement of Financial Position as follows:

Cash at Bank 1,407,138

2,871,451

Cash on Hand 0

50

Term Deposits at Bank 17,673,509

14,379,733

Total Cash and Cash Equivalents 19,080,647

17,251,234

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30 June 2014

NOTE 5: FINANCIAL ASSETS AT FAIR VALUE

Treasury Corporation - Hour Glass Facility 374,454 347,827

Information on the effective interest rate, credit risk and market risk is disclosed in Note 16.

NOTE 6: RECEIVABLES – CURRENT

Accounts Receivable 1,290,269 1,381,288

Less: Allowance for Impairment 0 0

Interest Receivable 77,727 76,037

1,367,996 1,457,325

Accounts receivable as at 30 June 2014 and 30 June 2013 are non-interest bearing.

Information on credit risk on Accounts receivable is detailed in Note 16.

NOTE 7: PROPERTY, PLANT AND EQUIPMENT

Leasehold

Buildings Plant & Equipment Total

At 1 July 2014- Fair Value

Gross carrying Amount 13,097,616 4,518,341 17,615,957

Accumulated Depreciation and

Impairment (4,125,153) (2,549,052) (6,674,205)

Net carrying amount 8,972,463 1,969,289 10,941,752

At 1 July 2013 – Fair Value

Gross carrying Amount 12,840,800 4,038,643 16,879,443

Accumulated Depreciation and

Impairment (3,793,136) (2,218,316) (6,011,452)

Net carrying amount 9,047,664 1,820,327 10,867,991

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30 June 2014

NOTE 7: PROPERTY, PLANT AND EQUIPMENT (Continued)

2014

Leasehold

Buildings Plant & Equipment

2014

Total

Net Carrying Amount at Start of Year 9,047,664 1,820,327 10,867,991

Additions 0 556,838 556,838

Disposals 0 (20,107) (20,107)

Net Revaluation Increment Less

Revaluation Decrements Recognised in

Reserve 367,817

0 367,817

Depreciation Expense (443,018) (387,769) (830,787)

Net Carrying Amount at End of Year 8,972,463 1,969,289 10,941,752

Leasehold buildings are owned by ANZAC and administered by Sydney Local Health District.

Leasehold buildings were valued by Mark Greenhalgh FAPI (Corporeal Property Valuers) in 2012/2013

financial year (refer Note 1 (K)).

Purpose built health facilities have been valued at fair value for their existing use. As current market

prices are difficult to observe, the assets fair value is measured at depreciated replacement cost based

on the assumption that the asset’s economic life is 25 years.

2013

Leasehold

Buildings Plant & Equipment

2013

Total

Net Carrying Amount at Start of Year 7,451,962 1,766,458 9,218,420

Additions 0 409,849 409,849

Disposals 0 (23,979) (23,979)

Net Revaluation Increment Less

Revaluation Decrements Recognised in

Reserve 2,082,180

0 2,082,180

Depreciation Expense (486,478) (332,001) (818,479)

Net Carrying Amount at End of Year 9,047,664 1,820,327 10,867,991

NOTE 8: PAYABLES 2014 2013

$ $

Current Payables

Creditors and Accruals

Unearned Revenue

GST Payable

728,315

0

187,469

773,106

4,397

84,734

915,784 862,237

Information on liquidity risk and market risk, including a maturity analysis of the above payables is

disclosed in Note 15.

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32


30 June 2014

NOTE 9: PROVISIONS

Credit Facility 15,000 15,000

Unused Credit Facility 14,346 14,731

11: CONTINGENT LIABILITIES AND CONTINGENT ASSETS

At the date of this report the Trust Fund has no known contingent liabilities and contingent assets

(2014: Nil ; 2013: Nil ).

NOTE 12: CONDITIONS ON CONTRIBUTIONS - RESEARCH PURPOSES

Research 2014 Research 2013

$ $

Contributions recognised as revenues for which

expenditure in manner specified has not occurred

as at balance date

5,782,371

4,179,741

Contributions recognised in previous years that were

not expended in the current financial year

3,561,792

3,050,336

Total amount of unexpended contributions

as at balance date

9,344,163

7,230,077

Further comments on restricted assets are included in Note 13.

Current Provisions

Current Provisions for Personnel Services Liability

Annual Leave – Short Term Benefit

Annual Leave – Long Term Benefit

382,423

271,998

530,518

0 654,421

530,518

NOTE 10: CAPITAL EXPENDITURE COMMITMENTS AND

CREDIT FACILITY

Capital expenditure commitments for plant and equipment that

have not been provided for in the accounts:

Payable Not Later than One Year (including GST)

The total of capital expenditure commitments of $125,165

above as at 30 June 2014 includes input tax credits of $0 that

are expected to be recoverable from the Australian Taxation

Office (2014: $0 ; 2013: $9,005).

125,165

99,059

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30 June 2014

NOTE 13: RESTRICTED ASSETS

These financial statements include the following assets that are restricted by externally imposed

conditions e.g. donor requirements. The assets are only available for application in accordance with the

terms of the donor restrictions.

2014 2013

Category $ $

Specific Purposes

Donations for Research Specific Use 1,008,436 1,204,562

Research Grants

Specific Project Grants 5,057,373 2,914,937

Holding Funds 3,278,354 3,110,578

9,344,163 7,230,077

Category Brief Details of Externally Imposed Conditions

Specific Purposes Trust Funds Donations, contributions and fundraisings held for the benefit of

Laboratory groups.

Research Grants Specific research grants.

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30 June 2014

NOTE 14: FUNDRAISING AND APPEAL ACTIVITIES

The ANZAC Health and Medical Research Foundation Trust Fund is a certified holder of an authority to

raise funds under the provision of section 16 of the Charitable Fundraising Act, 1991. The net proceeds

are held in ANZAC Health & Medical Research Foundation Trust Fund pending allocation.

INCOME

RAISED

$

DIRECT

EXPENDITURE

$

INDIRECT

EXPENDITURE

$

2014 NET

PROCEEDS

$

2013 NET

PROCEEDS

$ Appeals 1,630 250 0 1,380 10,092 Functions 0 0 0 0 0

Total 1,630 250 0 1,380 10,092

Percentage of

Income

100% 15.31% 0% 84.69% 90.93%

Direct expenditure includes printing, postage, food and beverage.

Indirect expenditure includes additional staff time.

The net proceeds were used for the following purposes:

2014

$

2013

$

Purchase of Equipment 0 0

Purchase of Land & Building 0 0

Research 0 0

Held for Other Purposes 1,380 10,092

1,380

10,092

NOTE 15: FAIR VALUE MEASUREMENT OF NON-FINANCIAL ASSETS

Fair value measurements recognised in the balance sheet are categorised into the following levels at 30

June 2014. Comparative information for the following has not been provided as permitted by the

transitional provisions of the new standard.

a) Fair Value Hierarchy

2014

Level 1

$

Level 2

$

Level 3

$

Total

$

Property, Plant and Equipment

(Note 7)

- Land and Buildings 0 0 8,972,463 8,972,463

0 0 8,972,463 8,972,463

There were no transfers between level 1 and 2 during the period ended 30 June 2014.

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30 June 2014

b) Valuation Techniques, Inputs and Processes

For land, building and infrastructure ANZAC obtains external valuations by independent valuers

every three years. The last revaluation was performed by Mark Greenhalgh FAPI (Corporeal) for

the 2012/13 financial year. Corporeal is an independent entity and is not an employee of ANZAC.

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 16 reconciliation.

In accordance with AASB 13 Fair Value Measurement no assets have been found to have a higher

and better use than their current use. Highest and best use takes account of use that is physically

possible, legally permissible and financially feasible.

The following 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, 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. Certain

parcels of land have zoning restrictions, for example hospital grounds, and values are adjusted

accordingly.

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.

For buildings and infrastructure, many assets are of a specialised nature or use, and thus the most

appropriate valuation method is current 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.

The values present in Level 3 for Land and Buildings in the above table relates to buildings only.

Work in Progress and Newly completed Buildings is categorised as level 2, as the initial

measurement is recognised at cost and is represented accordingly until subject to revaluation. This

is considered appropriate as, once assets are brought into use, there is no longer a identical

correlation with the “shelf product”.

For non-specialised assets with short useful lives, AASB 13 allows recognition at depreciated

historical cost as an acceptable surrogate for fair value as differences are considered immaterial.

Thus the values considered above are fair value for Plant & Equipment and Leasehold

Improvements. ANZAC has allocated these types of equipment to level 2 based on the fact that

once these items are in use, level 2 is considered more appropriate as an indirect observable

market is available.

Level 3 disclosures:

Buildings and Infrastructure

The current replacement cost of each asset is calculated to assess fair value. The current replace-

ment cost of the individual building and infrastructure assets is assessed by referencing to building

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36


30 June 2014

costs in external publications such as the Rawlinson’s Australian Construction Handbook and with

allowances made for the regional locations. The useful economic life of the assets is initially

assessed at 40 yrs. The remaining economic life is assessed based upon physical depreciation

and obsolescence. ANZAC provides details to the valuer, of any known structural faults and future

planning which may involve the demolition or removal of an asset. Any new assets constructed

over the past four years have been included and where refurbishment has been undertaken the

capital expenditure is reflected in the remaining life of the asset.

Construction costs used to establish gross replacement cost are not expected to have significant

variations, unless new construction is impacted by building/construction variations. ANZAC is not

aware of any sensitivity to changes in unobservable inputs that may significantly impact on fair

value.

c) Reconciliation of Recurring Level 3 Fair Value Measurements

Land and

Buildings

$

Level 3

Recurring Total

$

Fair value as at 1 July 2013 9,047,664 9,047,664

Additions 0 0

Revaluation increments/(decrements) 367,817 367,817

Depreciation (443,018) (443,018)

Fair value as at 30 June 2014 8,972,463 8,972,463

NOTE 16: FINANCIAL INSTRUMENTS

ANZAC’s principal financial instruments are outlined below. These financial instruments arise directly

from ANZAC’s operations or are required to finance its operations. ANZAC does not enter into or trade

financial instruments, including derivative financial instruments, for speculative purposes.

ANZAC’s main risks arising from financial instruments are outlined below, together with ANZAC’s

objectives, policies and processes for measuring and managing risk. Further quantitative and

qualitative disclosures are included throughout these financial statements.

The Directors have overall responsibility for the establishment and oversight of risk management and

reviews and agree policies for managing each of these risks. Risk management policies are

established to identify and analyse the risk faced by ANZAC, to set risk limits and controls and monitor

risks. Compliance with policies is reviewed by the Audit Committee/internal auditors of Sydney Local

Health District on a continuous basis.

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30 June 2014

(a) Financial Instrument Categories

Financial Assets Class: Category Carrying Amount Carrying Amount

2014 2013

$ $

Cash and Cash

Equivalents (note 4)

N/A 19,080,647 17,251,234

Receivables (note 6) Receivables (at

Amortised Cost)1

1,367,996 1,457,325

Financial Assets at

Fair Value (note 5)

At Fair Value through

Profit or Loss

(designated as such

upon Initial

Recognition)

374,454 347,827

Total Financial Assets 20,823,097 19,056,386

Financial Liabilities

Payables (note 8)

Financial liabilities

Measured at

Amortised Cost 2

728,315

773,106

Total Financial

Liabilities

728,315

773,106

Notes

1. Excludes statutory receivables and prepayments (i.e. not within scope of AASB 7).

2. Excludes statutory payables and unearned revenue (i.e. not within scope of AASB 7).

(b) Credit Risk

Credit risk arises when there is the possibility of ANZAC’s debtors defaulting on their contractual

obligations, resulting in a financial loss to ANZAC. 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 ANZAC i.e. receivables. No collateral is held by ANZAC, nor

has it granted any financial guarantees.

Credit risk associated with ANZAC’s financial assets, other than receivables, is managed through the

selection of counterparties and establishment of minimum credit rating standards. Deposits held with

New South Wales Treasury Corporation (TCorp) are guaranteed by the State.

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30 June 2014

Cash and Term Deposits

Cash comprises cash on hand and bank balance deposited in accordance with Public Authorities

(Financial Arrangements) Act 1987 approvals. Interest is earned on daily bank balances at rates of

approximately 2.30% to 2.80% in 2013/14 compared to 2.55% to 4.55% in the previous year. Anzac

places funds on deposits with national and reputable commercial bank. The deposits at balance date

were earning an average interest rate of 3.44% (2013: 3.88%). While over the year the weighted

average interest rate was 3.66% (2013: 4.32%) on a weighted average balance during the year of $16

million (2013: $14.29 million). The TCorp Hour-Glass Investment Facilities are discussed in paragraph

(d) below.

Account Receivables

All debtors are recognised as amounts receivable at balance date. Collectability of debtors is reviewed

on an ongoing basis. Procedures as established in the NSW Ministry of Health Accounting Manual 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 ANZAC will not be able to collect the amounts due. The evidence

includes past experience and current and expected changes in economic conditions and debtor credit

ratings. No interest is earned on debtors.

ANZAC is not materially exposed to concentrations of credit risk to a single debtor or group of debtors.

Of the total debtors at year-end, $924,015 (2013: $1,149,838) related to debtors that were not past due

and not considered impaired and debtors of $366,254 (2013: $231,450) were past due but not

considered impaired.

(c) Liquidity Risk

Liquidity risk is the risk that ANZAC will be unable to meet its payment obligations when they fall due.

ANZAC 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.

During the current and prior year, there were no defaults or breaches on any loans payable. No assets

have been pledged as collateral. ANZAC’s exposure to liquidity risk is deemed insignificant based on

prior periods’ data and current assessment of risk.

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 generally settled in

accordance with the policy set by the NSW Department of Health. If trade terms are not specified,

payment is generally made no later than the end of the month following the month in which an invoice

or a statement is received.

In those instances where settlement cannot be affected in accordance with the above, e.g. due to short

term liquidity constraints, terms of payment are negotiated with creditors.

The table below summarises the maturity profile of ANZAC’s financial liabilities together with the

interest rate exposure.

TRUST REPORT 2014

39

Maturity analysis and interest rate exposure of financial liabilities

$000

Interest Rate Exposure Maturity Dates

2014

Weighted

Average

Effective

Int rate

N o m i n a l

Amount

F i x e d

Interest

Rate

V a r i a b l e

Interest

Rate

N o n -

Interest

Bearing

<1 Year

1-5 Years

>5 Years

% $’000 $’000 $’000 $’000 $’000 $’000 $’000

Payables:

Creditors - 728 0 0 728 728 0 0

728 0 0 728 728 0 0

2013

Payables:

Creditors - 773 0 0 773 773 0 0

773 0 0 773 773 0 0

Notes:

1. The amounts disclosed are the contractual undiscounted cash flows of each class of financial

liabilities based on the earliest date on which ANZAC 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

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate

because of changes in market prices. ANZAC’s exposures to market risk are primarily through interest

rate risk on ANZAC’s cash holdings and other price risks associated with the movement in the unit price

of the Hour-Glass Investment facilities. ANZAC has no exposure to foreign currency risk and does not

enter into commodity contracts.

The effect on profit and equity due to a reasonably possible change in risk variable is outlined in the

information below, for interest rate and other price risk. A reasonably possible change in risk variable

has been determined after taking into account the economic environment in which ANZAC 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 balance sheet date. The analysis is

performed on the same basis for 2014. The analysis assumes that all other variables remain constant.

Interest Rate Risk

Exposure to interest rate risk arises primarily through ANZAC’s cash holdings.

For financial instruments a reasonably possible change of +/-1% is used consistent with current trends

in interest rates. ANZAC’s exposure to interest rate risk is set out below.

$

-1% +1%

Carrying

Amount

Profit Equity Profit Equity

2014 Financial Assets

Cash and Cash Equivalents 19,080,647 (190,806) (190,806) 190,806 190,806

2013 Financial Assets

Cash and Cash Equivalents 17,251,234 (172,512) (172,512) 172,512 172,512

TRUST REPORT 2014

40


30 June 2014

Other price risk – TCorp Hour Glass Facilities

Exposure to ‘other price risk’ primarily arises through the investment in the TCorp Hour-Glass

Investment Facilities, which are held for strategic rather than trading purposes. ANZAC has no direct

equity investments. ANZAC holds units in the following Hour-Glass investment trusts:

Facility Investment Sectors Investment

Horizon

2014

$

2013

$

Medium term

growth facility

Cash, Money Market

Instruments Australian and

International Bonds, Listed

Property and Australian

Shares

3 to 7 years 374,454 347,827

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.

NSW TCorp is trustee for each of the above facilities and 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, TCorp has

appointed external managers to manage the performance and risk of each facility in accordance with a

mandate agreed by the parties. However, TCorp acts as the manager for part of the Cash and Strategy

Cash Facilities and also manages the Australian Bond portfolio. A significant portion of the

administration of the facilities is outsourced to an external custodian.

Investment in the Hour- Glass Facilities limits ANZAC’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 investment facilities, using

historically based volatility information collected over a ten year period, quoted at two standard

deviations (i.e. 95% probability). The 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).

A reasonably possible change is based on the percentage change in unit price (as advised by TCorp)

multiplied by the redemption price as at 30 June each year for each facility (balance from Hour-Glass

Statement).

Impact on profit/loss

Change in

Unit Price

2014

$

2013

$

Hour Glass Investment – Medium Term Growth

facility

+/-6% 22,467 20,870

TRUST REPORT 2014

41


30 June 2014

(e) Fair Value Recognised in the Statement of Financial Position

ANZAC uses the following hierarchy for disclosing the fair value of financial instruments by valuation

technique:

Level 1 – derived from quoted prices in active markets for identical assets/liabilities

Level 2 – derived from inputs other than quoted prices that are observable directly or indirectly.

Level 3 – derived from valuation techniques that include inputs for the asset/liability not based on

observable market data (unobservable inputs).

Level 1

$

Level 2

$

Level 3

$

2014 Total

$

2013 Total

$

TCorp Hour-Glass

Investment Facility 0 374,454 0 374,454 347,827

(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 2014.

NOTE 17: AUDITOR’S REMUNERATION

2014 2013

$ $

The total remuneration received, or due and receivable

by the auditors of ANZAC for auditing the accounts

of the Trust Fund was accrued in the accounts herein. 25,100 24,500

NOTE 18: AFTER BALANCE DATE EVENTS

After the reporting date, there were no events subsequent which would have a material effect on the

ANZAC’s financial statements.

END OF AUDITED FINANCIAL STATEMENTS

TRUST REPORT 2014

42

TRUSTEES’ DECLARATION

Pursuant to Section 41C (1B), in accordance with a resolution of ANZAC Health and Medical Research

Foundation Trust Fund, we state that:

In the opinion of the Trustees:

(a) the financial statements and notes of the Trust:

i. exhibit a true and fair view of the Trust’s financial position as at 30 June 2014 and of its

performance as represented by the results of its operations and its cash flows for the

year ended on that date; and

ii. comply with the applicable Australian Accounting Standards; which include Australian

Accounting Interpretations and (b) the provisions of the Public Finance and Audit Act 1983 and the Public Finance and Audit

Regulation 2010 have been complied with;

(c) there are no circumstances that would render any particulars included in the financial

statements to be misleading or inaccurate.

On behalf of the Trustees


Chair Director


CHAIRMAN’S DECLARATION UNDER THE CHARITABLE FUNDRAISING ACT1991

I, Diana Horvath, Chairman of the ANZAC Health and Medical Research Foundation declare that in my

opinion:

(a) the Statement of Comprehensive Income gives a true and fair view of all income and expenditure of the organisation with respect to fundraising appeals;

(b) the Statement of Financial Position gives a true and fair view of the state of affairs of the organisation with respect to fundraising appeals conducted by the organisation;

(c) the provisions of the Act, the regulations under the Act and the conditions attached to the authority have been complied with by the organisation; and

(d) the internal controls exercised by the organisation are appropriate and effective in accounting for all income received and applied by a organisation from any of its fundraising appeals, except for voluntary donations. It is impracticable for the ANZAC Health and Medical Research Foundation to maintain an effective system of internal controls over voluntary donations prior to their initial entry in the accounting records.

Diana Horvath

Chair


d irectors’ report

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