Annual Report For the Year Ended 30 June 2012

Transcription

1 Annual Report

2 Annual Report CONTENTS Page Financial Statements Directors' Report 1 Auditors' Independence Declaration 4 Statement of Comprehensive Income 5 Statement of Financial Position 6 Statement of Cash Flows 7 Statement of Changes in Equity 8 Notes to the Financial Statements 9 Directors' Declaration 18 Independent Audit Report 19 Health Care Insurance Ltd A.C.N Principal Business Address 50 Marine Terrace, Burnie Postal Address PO Box 931, Burnie, 7320 Telephone (03) Facsimile (03) Website Registered Office 50 Marine Terrace, Burnie

3 Directors' Report Your directors present their report on the Company for the financial year ended 30 June General information Directors The names of each person who has been a director during the year and to the date of this report are: Mark Fishwick Paul Smith Phillip Boon Ronald Coghill Jill Brasch Greg Spinks Information on Directors The names of the directors in office at any time during, or since the end of, the year are listed below. All directors held office for the duration of the financial year and up until the date of this report except as noted. NAME EXPERIENCE SPECIAL RESPONSIBILITIES Mark Fishwick Business Development Officer. Board Chairman Grad.Cert Bus Past National President Apex. Finance, Audit & Risk HCI Director elected 19th November John Guest Former General Manager Group Audit North Finance, Audit & Risk B.Sc Limited. Manager APPM Burnie Mill. Manager Finance, Audit & Risk Mgt C'tee APPM Wesley Vale Mill. Retired October Phillip Boon Business Support Manager Australian Paper, Deputy Chairman B.Comm Commercial System Manager, former Operations Finance, Audit & Risk Support Manager Paperlinx HCI Director elected 15th May Jill Brasch Qualified Speech Therapist B.Arts; Currently employed by the Australian Red Cross Dip. Hth Ser HCI Director elected 18th October 2010 Paul Smith Former General Manager Operations, Forestry OH&S Compliance B.Sc (For) Tasmania HCI Director elected 30th June Ronald Coghill General Manager of HCI 2003 to September Regulatory Compliance Former General Manager, Executive Director and Company Secretary of Defence Health Ltd. Graduate Member of the Australian Institute of Company Directors. HCI Director appointed 1st January 2009 Page 1

4 Directors' Report General information (continued) Information on Directors (continued) Greg Spinks Business Services and Development Manager B.Arts; Dip.Psyc; Australian Paper, Former Customer Services Dip.Edu Manager Paperlinx Tasmanian Operations. Member of the Australian Psychological Society HCI Director elected 19th October 2009 Company Secretary NAME Matthew Fryett QUALIFICATIONS & EXPERIENCE B.Bus. CPA MBA Formerly Commercial Manager, Australian Paper's Tasmanian Mills and Financial Controller of Roberts Limited. Director Braddon Business Centre Directors have been in office since the start of the financial year to the date of this report unless otherwise stated. Principal Activities The principal activities of Health Care Insurance Ltd during the financial year consisted of provision of private health insurance to eligible members. There have been no significant changes in the nature of Health Care Insurance Ltd's principal activities during the financial year. Objectives Short Term Objectives In the short term membership growth will be less than 5%. Following the restructuring that has occurred during 2009/10 with Forestry Timber and Paper the short term focus of the fund is to continue support its existing members and expand the membership base geographically. Long Term Objectives The Long term objective of the fund is to ensure the ongoing viability of the fund and to continue to provide affordable health insurance to people in the forest, timber and paper sector through sound investment management and membership growth. Strategies to Achieve Objectives Continue to communicate with our existing membership base. Promote the benefits of private health insurance and Health Care Insurance to the potential members and organizations who have an association with Forestry, Timber and Paper. Page 2

5 Directors' Report Auditors Independence Declaration The lead auditors independence declaration for the year ended 30 June 2012 has been received and can be found on page 4 of the financial statements. Meetings of Directors 8 meetings of directors (excluding director committee meetings) were held during the year. The attendance by each director during the year was as follows: Board Meeting Finance, Audit & Risk Management Committee Number eligible to attend Number attended Number eligible to attend Number attended John Guest Mark Fishwick Jill Brasch Phillip Boon Greg Spinks Ron Coghill Paul Smith Members' Guarantee The company is incorporated under the Corporations Act 2001 and is an entity limited by guarantee. If the entity is wound up, the constitution states that each member is required to contribute a maximum of 1.00 each towards meeting any outstanding obligations of the company. At 30 June 2012 the collective liability of members was 3,911 (2011: 3,811). Signed in accordance with a resolution of the Board of Directors: Mark Fishwick Date:24 September 2012 Director Page 3

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7 Statement of Comprehensive Income Note Revenue Member contributions 12,669,082 11,538,712 Interest and investment income 2 707, ,424 Gain on disposal of plant and equipment 2-8,953 Other revenue from ordinary activities 6, Total Revenue 13,383,406 12,199,201 Expenses Member benefits 9,216,074 8,907,582 Health benefits risk equalisation 820, ,840 Employee benefits 527, ,385 Information technology and communications 412, ,719 Depreciation, amortisation and impairments 2 36,517 44,716 Other expenses from ordinary activities 649, ,257 Total Expenses 11,663,525 11,263,499 Surplus from ordinary activities before income tax expense 1,719, ,702 Income tax expense 1(c) - - Net surplus 1,719, ,702 Other comprehensive income - - Total comprehensive income 1,719, ,702 This statement should be read in conjunction with the accompanying notes Page 5

8 Statement of Financial Position As At 30 June 2012 Note ASSETS Cash 3 13,067,065 11,490,390 Trade and other receivables 4 1,004, ,084 Prepayments 29,332 21,215 Property, plant and equipment 5 848,860 44,212 Intangible assets 6 37,888 33,766 TOTAL ASSETS 14,987,191 12,428,667 LIABILITIES Trade and other payables 7 639, ,891 Provisions 8 696, ,910 Deferred revenue 9 1,978,065 1,249,017 TOTAL LIABILITIES 3,314,460 2,475,818 NET ASSETS 11,672,731 9,952,849 EQUITY Accumulated surplus 11,672,731 9,952,849 TOTAL EQUITY 11,672,731 9,952,849 This statement should be read in conjunction with the accompanying notes Page 6

9 Statement of Cash Flows Note Cash Flows from Operating Activities Contributions received from members 13,190,987 11,697,160 Benefits paid to members (9,497,771) (8,784,127) Payments to Health Benefits Risk Equalisation Trust (811,089) (1,118,274) Interest received 740, ,093 Payments to suppliers and employees (1,311,007) (1,502,170) Other receipts 6, GST refunds 103,664 89,931 Net cash provided by operating activities 2,421,962 1,029,725 Cash Flows from Investing Activities Acquisition of property, plant and equipment (827,287) (48,416) Proceeds from sale of plant and equipment - 22,727 Acquisition of intangible assets (18,000) - Net cash used in investing activities (845,287) (25,689) Net cash increase/(decrease) in cash 1,576,675 1,004,036 Cash at beginning of year 11,490,390 10,486,354 Cash at end of financial year 3 13,067,065 11,490,390 This statement should be read in conjunction with the accompanying notes Page 7

10 Statement of Changes in Equity Retained Earnings Total 2012 Balance at 1 July ,952,849 9,952,849 Surplus 1,719,881 1,719,881 Total other comprehensive income - - Balance at 30 June ,672,731 11,672, Balance at 1 July ,017,147 9,017,147 Surplus 935, ,702 Total other comprehensive income - - Balance at 30 June ,952,849 9,952,849 This statement should be read in conjunction with the accompanying notes Page 8

11 Notes to the Financial Statements 1 Statement of Significant Accounting Policies (a) General information Health Care Insurance Ltd has elected to early adopt the Australian Accounting Standards Reduced Disclosure Requirements as set out in AASB 1053: Application of Tiers of Australian Accounting Standards and AASB : Amendments to Australian Accounting Standards arising from Reduced Disclosure Requirements. As a consequence, the entity has also adopted AASB : Amendments to Australian Accounting Standards arising from the Trans-Tasman Convergence Project Reduced Disclosure Requirements and AASB : Amendments to Australian Accounting Standards Extending Relief from Consolidation, the Equity Method and Proportionate Consolidation Reduced Disclosure Requirements. This is because the reduced disclosure requirements in AASB and AASB relate to Australian Accounting Standards that mandatorily apply to annual reporting periods beginning on or after 1 July The financial statements are general purpose financial statements that have been prepared in accordance with Australian Accounting Standards Reduced Disclosure Requirements of the Australian Accounting Standards Board and the Corporations Act The company is a not-for-profit entity for financial reporting purposes under Australian Accounting Standards. Australian Accounting Standards set out accounting policies that the AASB has concluded would result in financial statements containing relevant and reliable information about transactions, events and conditions. Material accounting policies adopted in the preparation of these financial statements are presented below and have been consistently applied unless stated otherwise. The financial statements, except for the cash flow information, have been prepared on an accruals basis and are based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities. The amounts presented in the financial statements have been rounded to the nearest dollar. The financial statements were authorised for issue on 17 September 2012 by the directors of the company. (b) Revenue Recognition Member contributions are recognised when payment for health insurance cover falls due in accordance with the terms of the membership conditions. Contributions include the 30% Government rebate. Contributions paid by members in advance of the due date are shown as a liability. Interest is recognised as it accrues. Other revenue items are recognised upon receipt. All revenue is recorded net of GST. (c) (d) Income Tax The Company is exempt from income tax under section of the Australian Income Tax Assessment Act 1997, as amended. Accordingly, no income tax expense or provision for income tax has been included in the financial statements. Health Benefits Risk Equalisation Trust Fund All health insurers must participate in the Risk Equalisation Trust Fund, which shares a proportion of the hospital and medical claims of all persons aged 55 years and over and those memberships with high claims in any one year between all health insurers. Page 9

12 Notes to the Financial Statements 1 Statement of Significant Accounting Policies (continued) (d) (e) (f) (g) Health Benefits Risk Equalisation Trust Fund (continued) The amount payable to or receivable from the Risk Equalisation Trust Fund is determined by the Private Health Insurance Administration Council (PHIAC) after the end of each quarter. Estimated provisions for amounts payable or receivable are provided for periods for which determinations have not yet been made. Cash For purposes of the statement of cash flows, cash includes cash on hand, cash at bank and deposits at call net of outstanding bank overdrafts. Goods and Services Tax (GST) Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Taxation Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the statement of financial position are shown inclusive of GST, as are operating items in the statement of cash flows. Property, Plant and Equipment Property, plant and equipment are stated at the lower of cost less depreciation or net realisable value. With the exception of freehold land, property, plant and equipment are depreciated over the expected useful life of each asset using the straight line basis. The carrying amount of property, plant and equipment is reviewed annually by the board of directors to ensure that it is not in excess of the recoverable amount of these assets. The recoverable amount of an asset is the net amount expected to be recovered through the net cash inflows arising from its continued use and subsequent disposal. In determining the recoverable amount of non-current assets the expected net cash flows have not been discounted to their present value. The estimated useful lives used for each class of depreciable assets are: Furniture and fittings years Motor vehicles 7-10 years Computer and electronic equipment 3-4 years (h) (i) Employee Entitlements Liabilities for salaries, wages and annual leave are recognised and measured as the amount unpaid at the reporting date at current pay rates in respect of the employee's service up to that date. Provision is made for long service leave for all employees after the completion of five years service. An assessment of the financial impact of expressing the provision using the present value basis of measurement indicated that the method currently used is more prudent, but not materially different. This assessment will be undertaken each time the Company prepares financial statements. Provision for Outstanding Claims The Company makes provision for claims received but not assessed and claims incurred but not received at year end. The amount of the provision is based on historical patterns of claim incidence and processing. No discounting is applied to the provision due to the generally short period between claim incidence and settlement. Page 10

13 Notes to the Financial Statements Surplus from Ordinary Activities Surplus from ordinary activities includes the following specific items: Interest and investment income Bank accounts and short term deposits 707, ,424 Gain on disposal of plant and equipment Proceeds on disposal - 22,727 Carrying amount of assets disposed - (13,774) Net gain/(loss) on disposal - 8,953 Expenses Depreciation and amortisation Computers and electronics 6,319 11,537 Motor vehicles 12,642 12,991 Furniture and fittings 3,678 6,311 Computer software 13,878 13,877 36,517 44,716 Operating lease rentals Premises 35,078 35,078 Equipment 15,952 8,918 51,030 43,996 Bad and doubtful debts 4,740 8,500 Movement in doubtful debts provision 15,000 (10,000) Page 11

14 Notes to the Financial Statements Cash Cash on hand 1,449 11,768 Cash at bank 2,158,531 1,212,023 Short-term deposits 10,907,085 10,266,599 13,067,065 11,490,390 4 Trade and Other Receivables Contributions in arrears 45,700 32,664 Provision for doubtful debts (30,000) (15,000) 15,700 17,664 Accrued interest 286, ,840 Medicare rebate receivable 639, ,924 GST refundable 12,162 11,891 Sundry debtors 34,186 43,785 Unclosed business 15,469 39,980 1,004, ,084 (a) Provision for impairment of receivables Balance at beginning of the year 15,000 25,000 Additional impairment loss recognised 19,740 - Provision used (4,740) (8,500) Reversal of impairment - (1,500) Balance at end of the year 30,000 15,000 Page 12

15 Notes to the Financial Statements Property, Plant and Equipment Building At cost 818,956 - Total buildings 818,956 - Furniture, fixture and fittings At cost 102,236 95,704 Accumulated depreciation (92,195) (88,578) 10,041 7,126 Motor vehicles At cost 36,120 36,120 Accumulated depreciation (24,176) (11,534) 11,944 24,586 Computer equipment At cost 216, ,384 Accumulated depreciation (208,203) (201,884) 7,919 12,500 Total plant and equipment 29,904 44,212 Total property, plant and equipment 848,860 44,212 (a) Movements in Carrying Amounts Buildings Plant & equipment Total Balance at the beginning of the year - 44,212 44,212 Additions 818,956 8, ,287 Depreciation - (22,639) (22,639) Balance at 30 June ,956 29, ,860 Page 13

16 Notes to the Financial Statements Intangible Assets Computer software At cost 87,385 69,385 Accumulated amortisation (49,497) (35,619) 37,888 33,766 (a) Movements in Carrying Amounts Computer software Total Year ended 30 June 2012 Balance at the beginning of the year 33,766 33,766 Additions 18,000 18,000 Amortisation (13,878) (13,878) Balance at 30 June ,888 37,888 7 Trade and Other Payables Health Benefits Risk Equalisation Trust 114, ,588 Unpresented cheques 31,775 36,862 Sundry creditors 493, , , ,891 Page 14

17 Notes to the Financial Statements Provisions Outstanding claims Member benefits 536, ,109 Administration allowance 46,000 66,000 Risk Equalisation allowance 65, , , ,109 Employee entitlements Annual leave 35,549 22,942 Long service leave 13,420 6,859 48,969 29, , ,910 (a) Movements in provision for outstanding claims Risk Member Admistration Equalisation benefits allowance allowance Total Opening balance 1 July ,109 66, , ,109 Payments in current financial year for claims with prior service date (685,485) - - (685,485) Additional provision made during year 456,276 (20,000) (37,000) 399,276 Balance at 30 June ,900 46,000 65, ,900 9 Deferred Revenue Contributions received in advance 1,962,596 1,209,037 Unclosed business in advance 15,469 39,980 1,978,065 1,249,017 Page 15

18 Notes to the Financial Statements 10 Members' Guarantee The Company is limited by guarantee, incorporated and domiciled in Australia. If the Company is wound up, the Constitution provides that each member is required to contribute a maximum of 1.00 each towards meeting any outstanding obligations of the Company. At 30 June 2012 the number of members was 3,911 (2011: 3,811). 11 Contingent Liabilities and Contingent Assets In the opinion of the Directors, the Company did not have any contingencies at 30 June 2012 (30 June 2011:None). 12 Key Management Personnel Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Company. Key management personnel comprise the Directors of the Company and members of the executive management listed below, who are responsible for the day to day financial and operational management of the company: Name John Guest Mark Fishwick Phillip Boon Jill Brasch Greg Spinks Paul Smith Ron Coghill Matthew Fryett Director Director Director Director Director Director Director General Manager Key management personnel compensation Total key management personnel compensation 209, , Related Party Transactions Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated. Directors and management of the company are able, with other staff members, to utilise services provided by the company at normal commercial rates. The premiums of Directors and management are included as part of their remuneration packages. Page 16

19 Notes to the Financial Statements Financial Risk Management The Company's financial instruments consist mainly of deposits with banks, accounts receivable and accounts payable. The totals for each category of financial instrument are as follows: Financial assets Cash and cash equivalents 13,067,065 11,490,390 Trade and other receivables 1,004, ,084 Total financial assets 14,071,111 12,329,474 Financial liabilities Trade and other payables 639, ,891 Total financial liabilities 639, , Capital and Lease Commitments (a) Operating Lease Commitments Non-cancellable operating leases contracted for but not capitalised in the financial statements. Payable - Minimum lease payments - not later than 12 months 35,417 35,417 - later than 12 months but not later than five years 57,889 91,635 - later than five years , ,052 (b) Capital Expenditure Commitments Capital expenditure commitments for: Building renovations 452, Events after the end of the Reporting Period No matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the Company, the results of those operations, or the state of affairs of the Company in future financial years. 17 Solvency Position In accordance with Private Health Insurance (Health Benefits Fund Administration) Rules 2007, the Solvency reserve of the Company as at 30 June 2012 was 2,081,000 (2011: 1,946,000). Page 17

20 Directors' Declaration The directors of the Company declare that: 1. The financial statements and notes, as set out on pages 5 to 17, are in accordance with the Corporations Act 2001 and: (a) comply with Accounting Standards and the Corporations Regulations 2001; and (b) give a true and fair view of the financial position as at 30 June 2012 and of the performance for the year ended on that date of the Company. 2. In the directors' opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable. This declaration is made in accordance with a resolution of the Board of Directors. Mark Fishwick Director Burnie Dated: 24 September 2012 Page 18

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