general practice network nt ltd 2011 annual financial report · for the year ended 30 june 2011 2...

General Practice Network NT Ltd

2011 Annual Financial ReportABN 61 129 153 724

© General Practice Network NT Ltd. (GPNNT) 2011

GPNNT is supported by funding from the Australian Government Department of Health and Ageing.

Table of Contents

Directors’ Report ........................................................................ 1

Statement of Financial Position ............................................... 11

Statement of Comprehensive Income ..................................... 12

Statement of Changes in Equity............................................... 13

Statement of Cash Flows ......................................................... 14

Notes to the Financial Statements .......................................... 15

Directors’ Declaration .............................................................. 36

Independent Audit Report ....................................................... 37

General Practice Network NT Ltd

2011 Annual Financial Report

For the year ended 30 June 2011

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General Practice Network NT Ltd2011 Annual Financial Report

Directors’ ReportGeneral Practice Network NT Ltd 2011 Annual Financial Report Directors’ Report For the year ended 30 June 2011

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The directors present their report together with the financial report of General Practice Network NT Ltd (“GPNNT”) for the year ended 30 June 2011 and the auditor’s report thereon. 1. Directors The directors of the Company at any time during or since the end of the financial year are: Name, qualifications and independence status Experience, special responsibilities and other directorships Ms Diane Walsh BA, Dip Ed, GAICD Director (Consumer) Appointed 9/1/08 to 2011 AGM Chair Appointed 20/7/09, reappointed 18/11/10

Community Member, NT Board of Medical Board of Australia Ministerial appointment, Therapeutic Goods Committee Ministerial appointment, National Medicines Policy Committee Chair, NPS Quality Use of Medicines Working Group GPNNT Committee or Representative: Governance (Chair) Consumer Advisory Group (Chair) Constitution Task Group

Dr Karen Stringer MBBS, FRACGP, DRANZCOG, FAICD Director (GP Top End) Appointed 9/1/08 to 2012 AGM Deputy Chair Appointed 20/7/09, reappointed 18/11/10

General Practitioner GP Hospital Liaison Officer, Royal Darwin Hospital Director, Australian General Practice Network International Medical Graduate - Medical Advisor, Royal Darwin Hospital GPNNT Committee: Finance, Audit, Risk Management (Chair) Constitution Task Group

Dr Ameeta Patel MBBS (Hons), FRACGP, DRANZCOG, G Cert Health Prof Ed, GAICD Director (GP Central Australia) Appointed 3/5/09 to 2011 AGM

General Practitioner NT Director, Rural Health Workforce Australia Board Member, NT PESCI Committee GPNNT Committee: Governance

Dr Katrina Lloyd BMBS, BSc, FRACGP, DRANZCOG, Director (GP Central Australia) Appointed 8/10/09 to 2011 AGM

General Practitioner Member, Forensic & Medical Sexual Assault Clinicians Australia GPNNT Committee: Finance, Audit, Risk Management


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1. Directors (continued) Name, qualifications and independence status Experience, special responsibilities and other directorships Ms Annesley Farthing BAppSc (Physiotherapy), GradDipArts (Aboriginal Studies) Director (Primary Health Care provider) Appointed 3/5/09 to 2011 AGM

Physiotherapist Member SARRAH and APA GPNNT Committee: Constitution Task Group (Chair)

Dr Nigel Gray MBChB, JCPTGP, DipFamPlan, FRACGP, GCert Pall Care, GCHPE, MAICD Director (GP anywhere in NT) Appointed 28/10/09 to 2011 AGM

General Practitioner Director, NTGPE Performance Assessor and Member of Postgraduate Medical Council, NT Medical Board GPNNT Committee: Finance, Audit, Risk Management

Dr Louise Harwood MBChB, BMBS Otago NZ, FRACGP, GCertHealthProfEd Director (GP Top End) Board Appointed 5/7/10, Appointed 17/11/10 to 2012 AGM

General Practitioner GPNNT Committee: Governance

Ms Susanne Leister BHlthSc (Nursing), GradCertCritCare, RN, MRCNA, MAAPM, Director (Primary Health Care provider) Board Appointed 3/8/10, Appointed 17/11/10 to 2012 AGM

Registered Nurse Managing Director, Alice Springs Family Medical Centre Affiliate Member, RACGP GPNNT Committee: Governance

2. Company Secretary Ms Alison Faigniez, MBA; Grad.Dip.Phys.(UK); MAICD resigned on 18 February 2011 as Chief Executive Officer (CEO) of GPNNT and ceased as the Company Secretary on 11 February 2011. Ms Sue Korner, Post Grad.Dip Public Sector Executive Management was appointed on 18 February 2011 as Acting Chief Executive Officer (Acting CEO) of GPNNT and then subsequently appointed Chief Executive Officer (CEO) on 27 April 2011. Mr Bevan Richardson was appointed on 11 February 2011 as the Company Secretary of GPNNT.


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3. Directors’ Meetings and Other Meetings The number of directors’ meetings and other meetings attended by each of the directors of GPNNT during the financial year are:

Director

Board Meetings Governance

Sub-Committee

Finance, Audit, Risk Management

Sub-Committee A B A B A B

Ms Diane Walsh 9 9 2 2

Dr Karen Stringer 9 9 4 4

Dr Ameeta Patel 9 9 2 2

Ms Annesley Farthing 9 5

Dr Katrina Lloyd 9 9 4 4

Dr Louise Harwood 9 7 2 1

Dr Nigel Gray 9 8 4 4

Ms Susanne Leister 8 6 2 1

A – Number of meetings eligible to attend B – Number of meetings attended Note: 1. Out-of-session Board and sub-committee work is not shown in this table 2. Constitution Task Group reconvened 18/11/2010 but did not meet 3. Director Farthing took leave of absence for 4 Board Meetings


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4. Role of the Board The Board is responsible for the overall corporate governance of GPNNT including setting strategic direction; approving and monitoring capital expenditure; setting remuneration, appointing, removing and creating succession policies for Directors and senior Executives; establishing and monitoring the achievement of management’s goals and ensuring the integrity of risk management, internal control, legal compliance and management information systems. The Board is also responsible for approving and monitoring financial and other reporting requirements. The Board has delegated responsibility for the operation and administration of GPNNT to the Chief Executive Officer and Executive Managers. Responsibilities are delineated by formal authority delegations. 4.1 Board processes To assist in the execution of its responsibilities the Board maintained two sub-‐committees, namely the Finance, Audit, Risk Management sub-‐committee and the Governance sub-‐committee. The Board held 9 meetings during the year plus a planning forum, with out-‐of session teleconferences as necessary to address specific matters as they arose. Independent professional advice and access to Company information Each Director has the right of access to all relevant GPNNT information and to GPNNT’s Executives and, subject to prior consultation with the Chair, may seek independent professional advice from a suitably qualified adviser at GPNNT’s expense. The Director must consult with an advisor suitably qualified in the field, and obtain approval from the Chair of the fee payable before proceeding with the consultation. A copy of the advice received by the Director is to be made available to all other members of the Board. Director training and education The Directors participated in an external review by TMS Consulting Pty Ltd on the Board’s effectiveness on 23 February 2011. Director Walsh attended the Australian General Practice Network National Forum 2010 Leadership Workshop on 7 November 2010; Collaborative Master Class on 3 May 2011; and Governing for Success Master Class on 15 June 2011. Director Walsh also completed the Australian Institute of Company Directors (“AICD”) Evaluating the Board training on 29 July 2010. Director Gray completed the Australian Institute of Company Directors (“AICD”) Evaluating the Board training on 29 July 2010 and the AICD Course in February 2011. Director Patel completed the AICD Course in August 2010.


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Directors’ Report

General Practice Network NT Ltd 2011 Annual Financial Report Directors’ Report For the year ended 30 June 2011

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4. Role of the Board (continued) 4.2 Finance, Audit, Risk Management Sub-‐Committee The Finance, Audit, Risk Management sub-‐committee comprises Directors Stringer, Lloyd and Gray. This sub-‐committee was previously known as the Finance, Audit, Risk and Quality sub-‐committee and, on recommendation by the Australian Council of Healthcare Standards (“ACHS”), the quality function was moved to be the responsibility of the Governance sub-‐committee. The sub-‐committee has documented Terms of Reference approved by the Board. All the members are non-‐executive Directors. The Chair is a non-‐executive Director and may not be the Chair of the Board. The external auditors, Deputy Chief Executive Officer and Finance Manager are invited to meetings at the discretion of the sub-‐committee. The Terms of Reference require the sub-‐committee to monitor and enhance risk management systems, accounting standards, legal and regulatory governance, compliance and strategic risk management. The sub-‐committee’s aim is to report to the Board a minimum of four times annually. Director Stringer, Deputy Chair of the GPNNT Board, has been the Chair of the Finance, Audit, Risk Management sub-‐committee since 20 July 2009. 4.3 External Audit The Board monitors the independence, rotation, scope of services rendered and fee structure of the auditors. The Finance, Audit, Risk Management sub-‐committee meets with the external auditors in attendance with, and exclusive of management, as appropriate. 4.4 Environmental Regulations GPNNT is not subject to any significant environmental regulations under Commonwealth, State or Territory legislation. 4.5 Ethical Standards All directors, managers and employees are expected to act with integrity and objectivity in accordance with GPNNT’s Code of Conduct and in keeping with GPNNT’s espoused values. Every employee has a nominated supervisor to whom they may refer any issues arising from their employment. The Board reviews the Code of Conduct, values and processes in place to promote and communicate these policies and standards. Conflict of interest Directors must keep the Board advised, on an ongoing basis, of any interest that could potentially conflict with those of GPNNT. The Board has developed procedures to assist Directors to disclose potential conflicts of interest.


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Directors’ Report


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4. Role of the Board (continued) 4.5 Ethical Standards (continued) Where the Board perceives that a significant conflict exists for a Director on a Board matter, the Director concerned does not receive the relevant board papers and is not present at the meeting whilst the item is considered. Details of director-‐related entity transactions with GPNNT are set out in the notes to the financial statements. 5. Principal Activities GPNNT was established as a not-‐for-‐profit company, limited by guarantee, in July 2008 to lead a united and cohesive primary health care network to improve health service delivery and health outcomes in the Northern Territory. As a peak organisation representing general practice and primary health care in the NT, it aims to maintain and build capacity to deliver quality, equitable and effective primary health care services; broker health solutions; support primary health care providers and influence the health care agenda. The GPNNT Strategic Plan clearly sets out the priorities and key strategies GPNNT will take, to work towards achieving its aims and to provide the platform for the future for a strong NT PHC sector. The Strategic Plan provides a blueprint for building a strong coordinated and resilient primary health care sector and improving health outcomes in the Northern Territory through the following objectives: Objective 1: Position GPNNT as the lead Primary Health Care Organisation in the NT Objective 2: Improve Primary Health Care Services in the Northern Territory Objective 3: Achieve Equitable Health Outcomes Objective 4: Organisation effectiveness and governance 6. Review and Results of Operations / Operating and financial review The operating surplus amounted to $66,040 (2010: loss of $71,797). 7. Events Subsequent to Reporting Date On 11 August 2010, GPNNT was awarded accreditation for three years to 11 August 2013 by the Australian Council of Healthcare Standards (“ACHS”). As part of this accreditation a report on the Quality Improvement Plan was submitted to ACHS on 4 August 2011. A collaborative Medicare Local submission for the Northern Territory was submitted to the Department of Health and Ageing (“DoHA”) on 19 July 2011 and the GPNNT Board is now awaiting the outcome. The GPNNT Board met on 12 August 2011 to consider GPNNT’s future in the light of the collaborative Medicare Local submission and the known information in regards to Divisions of General Practice funding after 30 June 2012, with the extension of funding to 31 December 2012. It was decided, upon the formation of a Medicare Local for the Northern Territory, the Board would recommend to the Members at a special general meeting that GPNNT be wound up as an organisation.


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Directors’ Report


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7. Events Subsequent to Reporting Date (continued) GPNNT expects to maintain the present status and level of operations to 30 June 2012. The Directors believe GPNNT continues to play a key role in primary health care reform and supporting general practice and primary health care in the Northern Territory and that GPNNT will play a significant role in the development of a Medicare Local. At the date of this report, the Board believes GPNNT will continue to operate beyond 30 June 2012 to facilitate a smooth transfer of programs and services. This belief is based on the information known on GPNNT’s future funding; the timing of the expected response to the Medicare Local submission (expected last quarter of 2011); and the experience gained from the 2008 amalgamation, from which GPNNT was formed, as to the length of time required to undertake the work necessary in transferring program activities, people, contracts and commitments, assets, and registrations to a newly formed entity. The Board anticipate all assets, liabilities and equity of GPNNT will be transferred to the newly formed Medicare Local and that sufficient transition funds will be available to GPNNT to complete the transfer of programs and services; to cover costs associated with GPNNT’s statutory compliance requirements (such as final audit, cessation of registrations); and cover any company liquidation costs. The Board believes GPNNT will need to work with the newly formed Medicare Local past 30 June 2012 in a transition period and plans, including cash flow consideration for solvency purposes, have been made with the information known at the date of this report to facilitate this process. In the development of a Medicare Local the GPNNT Board acknowledges there is uncertainty as to GPNNT’s ability to continue as a going concern past 31 December 2012. Other than the matters discussed above, there has not arisen in the interval between the end of the financial period and the date of this report, any item, transaction or event of a material and unusual nature likely, in the opinion of the Directors, to affect significantly the operations of GPNNT, the results of those operations, or the state of affairs of GPNNT, in future financial years. 8. Directors’ remuneration Fees paid to Directors for the year amounted to $158,524 (2010: $159,872).


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Directors’ Report


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9. Indemnification and Insurance of Directors and Officers Indemnification Since the end of the previous financial period, GPNNT has not indemnified, or made a relevant agreement for indemnifying against a liability, any person who is or has been an officer or auditor of GPNNT. Insurance premiums Since the end of the previous financial year GPNNT has paid an insurance premium of $26,714 for an Australian General Practice Network Insurance Policy which includes coverage for Directors and Officers liability and legal expenses. 10. Non-‐Audit Services During the year, KPMG, GPNNT’s auditors, has performed certain other services in addition to their statutory duties. The Board has considered the non-‐audit services provided during the year by the auditor and in accordance with advice provided by resolution of the Finance, Audit, Risk Management sub-‐committee, is satisfied that the provision of those non-‐audit services during the year is compatible with, and did not compromise, the auditor independence requirements of the Corporations Act 2001 for the following reasons: • all non-‐audit services were subject to the corporate governance procedures adopted by GPNNT and have

been reviewed by the Finance, Audit, Risk Management sub-‐committee to ensure they do not impact the integrity and objectivity of the auditor; and

• the non-‐audit services provided do not undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants, as they did not involve reviewing or auditing the auditor’s own work, acting in a management or decision making capacity for GPNNT, acting as an advocate for the company or jointly sharing risks and rewards.

11. Proceedings on Behalf of the Company GPNNT had no court proceedings issued against it nor did it commence any proceedings during the reporting year. No person has applied for leave of Court to bring proceedings on behalf of GPNNT or intervene in any proceedings to which the company is a party for the purpose of taking responsibility on behalf of GPNNT for all or any of those proceedings.


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12. Auditor’s Independence Declaration The Lead auditor’s independence declaration is set out on page 10 and forms part of the Directors’ report for the financial year ended 30 June 2011. This report is made with a resolution of the directors:

Ms Diane Walsh Director and Chair, General Practice Network NT Ltd Dated at Darwin this 30th day of September 2011.


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Directors’ Report


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ABCD

Chartered Accountants 18 Smith Street DarwinNT 0800 GPO Box 1616 Darwin NT 0801 Australia

ABN: 30 692 879 009

Telephone: +61 8 8982 9000 Facsimile: +61 8 8941 0238 www.kpmg.com.au

To: the directors of General Practice Network NT Ltd I declare that, to the best of my knowledge and belief, in relation to the audit for the financial year ended 30 June 2011 there have been: • no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in

relation to the audit; and • no contraventions of any applicable code of professional conduct in relation to the audit.

KPMG

MunLi Chee Partner Darwin 30 September 2011

KPMG, an Australian partnership, and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. Liability limited by a scheme approved under

Professional Standards Legislation.


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Statement of Financial Position

General Practice Network NT Ltd 2011 Annual Financial Report Statement of Financial Position For the year ended 30 June 2011

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Note 2011 2010 $ $ Assets Cash and cash equivalents 11 4,569,680 3,448,541 Trade and other receivables 12 604,655 817,395 Inventories -‐ 10,285 Other current assets 13 92,298 109,177 Total current assets 5,266,633 4,385,398 Property, plant and equipment 14 201,415 173,512 Total non-‐current assets 201,415 173,512 Total assets 5,468,048 4,558,910 Liabilities Trade and other payables 15 1,471,664 1,021,226 Employee provisions 16 395,644 407,998 Unexpended grants 17 2,655,255 2,250,929 Total current liabilities 4,522,563 3,680,153 Employee provisions 16 38,169 37,481 Total non-‐current liabilities 38,169 37,481 Total liabilities 4,560,732 3,717,634 Net assets 907,316 841,276

Equity Retained losses (103,711) (169,751) Capital contributions 1,011,027 1,011,027 Total equity attributable to members of the Company

907,316

841,276

The notes on pages 15 to 35 are an integral part of these financial statements.


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Statement of Comprehensive IncomeGeneral Practice Network NT Ltd 2011 Annual Financial Report Statement of Comprehensive Income As at 30 June 2011

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Note 2011 2010

$ $ Grant income 4 11,586,924 11,480,762 Non-‐grant income 4 452,456 302,703 Total Income 12,039,380 11,783,465

Employee expenses 5 (4,693,370) (5,968,802) Governance expenses 6 (205,180) (190,678) Rent and occupancy expenses 7 (612,210) (503,162) Depreciation 14 (43,318) (44,338) Loss on disposal of assets (6,910) -‐ Administration expenses 8 (1,556,128) (1,285,733) Direct program expenses 9 (5,022,182) (3,939,318) Total Expenditure (12,139,298) (11,932,031) Results from operating activities (99,918) (148,566) Financial income 10 165,958 76,769 Net finance income 165,958 76,769 Surplus/(Deficit)for the period 66,040 (71,797) Other comprehensive income

-‐

-‐

Total comprehensive income for the period

66,040 (71,797)


As at 30 June 2011


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Statement of Changes in EquityGeneral Practice Network NT Ltd 2011 Annual Financial Report Statement of Changes in Equity As at 30 June 2011

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Contributions

Retained earnings

Total

$ $ $ Balance at 1 July 2009 1,011,027 (97,954) 913,073 Total comprehensive income for the period Profit or loss -‐ (71,797) (71,797) Other comprehensive income -‐ -‐ -‐ Total comprehensive income for the period -‐ (71,797) (71,797) Transactions with members, recorded directly in equity Capital contributions by members -‐ -‐ -‐ Total contributions by members -‐ -‐ -‐ Total transaction with members -‐ -‐ -‐ Balance at 30 June 2010 1,011,027 (169,751) 841,276

Balance at 1 July 2010 1,011,027 (169,751) 841,276 Total comprehensive income for the period Profit or loss -‐ 66,040 66,040 Other comprehensive income -‐ -‐ -‐ Total comprehensive income for the period -‐ 66,040 66,040 Transactions with members, recorded directly in equity Capital contributions by members -‐ -‐ -‐ Total contributions by members -‐ -‐ -‐ Total transactions with members -‐ -‐ -‐ Balance at 30 June 2011 1,011,027 (103,711) 907,316


General Practice Network NT Ltd 2010 Annual Financial Report Statement of Changes in Equity As at 30 June 2010

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Contributions

Retained earnings

Total

$ $ $ Balance at 1 July 2008 144,020 (112,095) 31,925 Total comprehensive income for the period Profit or loss -‐ 14,141 14,141 Other comprehensive income -‐ -‐ -‐ Total comprehensive income for the period -‐ 14,141 14,141 Transactions with members, recorded directly in equity Capital contributions by members 867,007 -‐ 867,007 Total contributions by members 867,007 -‐ 867,007 Total transaction with members 867,007 -‐ 867,007 Balance at 30 June 2009 1,011,027 (97,954) 913,073

Balance at 1 July 2009 1,011,027 (97,954) 913,073 Total comprehensive income for the period Profit or loss -‐ (71,797) (71,797) Other comprehensive income -‐ -‐ -‐ Total comprehensive income for the period -‐ (71,797) (71,797) Transactions with members, recorded directly in equity Capital contributions by members -‐ -‐ -‐ Total contributions by members -‐ -‐ -‐ Total transaction with members -‐ -‐ -‐ Balance at 30 June 2010 1,011,027 (169,751) 841,276


As at 30 June 2011


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As at 30 June 2011

Statement of Cash FlowsGeneral Practice Network NT Ltd 2011 Annual Financial Report Statement of Cash Flows As at 30 June 2011

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Note 2011 2010 $ $ Cash flows from operating activities Cash receipts from customers and funding bodies 12,579,614 12,610,755 Cash payments to suppliers and employees (11,553,215) (13,598,922) Cash generated from operations 1,026,399 (988,167) Interest received 165,958 76,769 Net cash from/(used in) operating activities 20b 1,192,357 (911,398) Cash flows from investing activities Acquisition of property, plant and equipment (71,218) (77,192) Net cash (used in)/from investing activities (71,218) (77,192) Net decrease/increase in cash and cash equivalents 1,121,139 (988,590) Cash and cash equivalents at 1 July 3,448,541 4,437,131 Cash and cash equivalents at 30 June 20a 4,569,680 3,448,541

General Practice Network NT Ltd 2010 Annual Financial Report Statement of Cash Flows As at 30 June 2010

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As at 30 June 2011

Notes to the Financial Statements

General Practice Network NT Ltd 2011 Annual Financial Report Notes to Financial Statements As at 30 June 2011

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Note Contents Page

1 Reporting entity 16 2 Basis of preparation 16 3 Significant accounting policies 17 4 Grant income 26 5 Employee expenses 27 6 Governance expenses 27 7 Rent and occupancy expenses 27 8 Administration expenses 27 9 Direct program expenses 29 10 Financial income 29 11 Cash and cash equivalents 29 12 Trade and other receivables 29 13 Other current assets 29 14 Property, plant and equipment 30 15 Trade and other payables 31 16 Employee benefits 31 17 Unexpended grants 31 18 Operating leases 31 19 Related party transactions 32 20 Cash and Cash Equivalents and Reconciliation of cash flows from operating activities 32 21 Financial instruments 33 22 Members guarantee 34 23 Business overheads expenditure 34 24 Auditor’s remuneration 34 25 Events subsequent to reporting date 34


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Notes to the Financial StatementsGeneral Practice Network NT Ltd 2011 Annual Financial Report Notes to the Financial Statements For the Year Ended 30 June 2011

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1. Reporting entity General Practice Network NT Ltd (”GPNNT”) is a company limited by guarantee and domiciled in Australia.

The address of GPNNT’s registered office is Stuart House, 5 Shepherd Street, Darwin, NT 0800. GPNNT primarily is involved in health service delivery and health outcomes in the Northern Territory.

2. Basis of preparation (a) Statement of compliance The financial report is a general purpose financial report which has been prepared in accordance with

Australian Accounting Standards (AASBs) (including Australian Interpretations) adopted by the Australian Accounting Standards Board (AASB) and the Corporations Act 2001.

The financial statements were authorised for issue by the Board of Directors on 23 September 2011.

(b) Basis of measurement

The financial statements have been prepared on the historical cost basis except as otherwise stated. (c) Functional and presentation currency

The financial statements are presented in Australian dollars, which is GPNNT’s functional currency.

(d) Use of estimates and judgements

The preparation of financial statements in conformity with AASBs requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected. Information about critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements as appropriate.

(e) Changes in accounting treatment

The treatment of locum fee income and recharge expenditure has changed to remove the over reporting of income and direct program expenditure in the Statement of Comprehensive Income. This change in accounting treatment has had no effect on the total comprehensive income reported for the 2011 and 2010 year.


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3. Significant accounting policies (a) Revenue

(i) Goods sold Revenue from sale of goods in the course of ordinary activities is measured at the fair value of the consideration received or receivable, net of returns, trade discounts and volume rebates. Revenue is recognised when persuasive evidence exists, usually in the form of an executed sales agreement, that the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, and there is no continuing management involvement with the goods, and the amount of revenue can be measured reliably. If it is probable that discounts will be granted and the amount can be measured reliably, then the discount is recognised as a reduction of revenue as the sales are recognised. (ii) Grant revenue Grant revenue (including donations and bequests) is recognised in the income statement when GPNNT gains control of the grant revenue. When there are conditions attached to grant revenue relating to the use of those grants for specific purposes, it is recognised in the balance sheet as a liability until such conditions are met or services provided.

(b) Inventories

Inventories are measured at the lower of cost and net realisable value. The cost of inventories includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their existing location and condition. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

(c) Financial Instruments

(i) Non-‐derivative financial assets GPNNT initially recognises loans and receivables and deposits on the date that they are originated. All other financial assets (including assets designated at fair value through profit or loss) are recognised initially on the trade date at which GPNNT becomes a party to the contractual provisions of the instrument.


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General Practice Network NT Ltd 2011 Annual Financial Report Notes to the Financial Statements For the Year Ended 30 June 2011

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3. Significant accounting policies (continued)

(c) Financial Instruments (continued)

GPNNT derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or retained by GPNNT is recognised as a separate asset or liability. Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, GPNNT has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously. Non-‐derivative financial assets comprise trade and other receivables, and cash and cash equivalents. Non-‐derivative financial assets are recognised initially at fair value plus, for assetsnot at fair value through profit or loss, any directly attributable transaction costs. (ii) Non-‐derivative financial liabilities GPNNT initially recognises debt securities issued and subordinated liabilities on the date that they are originated. All other financial liabilities (including liabilities designated at fair value through profit or loss) are recognised initially on the trade date at which GPNNT becomes a party to the contractual provisions of the instrument. GPNNT derecognizes a financial liability when its contractual obligations are discharged or cancelled or expire. Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, GPNNT has a legal right to offset the amounts and intends either to settle on a net basis or to realize the asset and settle the liability simultaneously. GPNNT has the following non-‐derivative financial liabilities: trade and other payables. Such financial liabilities are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition these financial liabilities are measured at amortised cost using the effective interest rate method.

(d) Property, plant and equipment

(i) Recognition and measurement Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses. Cost includes expenditures that are directly attributable to the acquisition of the asset. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.



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3. Significant accounting policies (continued) (d) Property, plant and equipment (continued)

(i) Recognition and measurement (continued) Property, plant and equipment that has been contributed at no cost, or for nominal cost is valued at the fair value of the asset at the date it was is acquired. Decreases that offset previous increases of the same classes of assets are charged against fair value reserves directly in equity; all other decreases are charged to the statement of comprehensive income. Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment and are recognised net within other income in profit or loss. When revalued assets are sold, the amounts included in the revaluation reserve are transferred to retained earnings. Asset capitalisation policy GPNNT is a Health Promotion Charity receiving Government Grants to deliver services. According to Government Grant contracts and as guided by the Commonwealth of Australia, only approved asset purchases worth $5,000 (inclusive of GST) and over can be included in Government Acquittal reports and in their respective asset registers. In order to sustain a consistent and practical approach, GPNNT has opted to only capitalise assets worth $5,000 and above. This policy excludes the property, plant and equipment acquired from the 3 amalgamating entities. (ii) Subsequent costs The costs of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to GPNNT and its cost can be measured reliably. The carrying amount of the replaced part is derecognised. The costs of the day-‐to-‐day servicing of property, plant and equipment are recognised in profit or loss as incurred.

(iii) Depreciation Depreciation is calculated over the depreciable amount, which is the cost of an asset, or other amount substituted as cost, less its residual value. Depreciation is recognised in profit or loss on a straight-‐line basis over the estimated useful lives of each part of an item of property, plant and equipment, since this most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that GPNNT will obtain ownership by the end of the lease term. Where an asset is acquired by direct Government grant funding and it has not been fully depreciated, at the end of the associated program, direction is sought from the Government to use the asset or sale proceeds to benefit a complementary or similar program.



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3. Significant accounting policies (continued) (d) Property, plant and equipment (continued)

(iii) Depreciation (continued)

The depreciation rates used for each class of depreciable assets are: Computer, Training & Video Equipment (excl. Laptops) 20% Motor Vehicles 20% Furniture, Fixture & Office Equipment 5% ASAP Clinic Equipment 20%

Depreciation methods, useful lives and residual values are reviewed at each financial year-‐end and adjusted if appropriate.

(e) Finance income and cost

Finance income comprises interest income on funds invested and changes in the fair value of financial assets at fair value through profit and loss. Interest income is recognised as it accrues in profit or loss, using the effective interest method. Finance costs comprise interest expense on borrowings, unwinding of the discount on provisions, changes in the fair value of financial assets at fair value through profit and loss and impairment losses recognised on financial assets. Borrowing costs recognised in profit or loss using the effective interest method.

(f) Leased assets

Leases in terms of which GPNNT assumes substantially all the risks and rewards of ownership are classified as finance leases. Upon initial recognition the leased asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset. Other leases are operating leases and the leased assets are not recognised in GPNNT’s statement of financial position.


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3. Significant accounting policies (continued) (g) Impairment

(i) Financial assets (including receivables) A financial asset not carried at fair value through profit or loss is assessed at each reporting date to determine whether there is objective evidence that it is impaired. A financial asset is impaired if objective evidence indicates that a loss event has occurred after the initial recognition of the asset, and that the loss event had a negative effect on the estimated future cash flows of that asset that can be estimated reliably. Objective evidence that financial assets (including equity securities) are impaired can include default or delinquency by a debtor, restructuring of an amount due to GPNNT on terms that GPNNT would not consider otherwise, indications that a debtor or issuer will enter bankruptcy, the disappearance of an active market for a security. GPNNT considers evidence of impairment of receivables at both a specific asset and collective level. All individually significant receivables are assessed for specific impairment. All individually significant receivables found not to be specifically impaired are then collectively assessed for any impairment that has been incurred but not yet identified. Receivables that are not individually significant are collectively assessed for impairment by grouping together receivables with similar risk characteristics. In assessing collective impairment GPNNT uses historical trends of the probability of default, timing of recoveries and the amount of loss incurred, adjusted for management’s judgement as to whether current economic and credit conditions are such that the actual losses are likely to be greater or less than suggested by historical trends.

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the original effective interest rate. Losses are recognised in profit or loss and reflected in an allowance account against receivables. Interest on the impaired asset continues to be recognised through the unwinding of the discount. When a subsequent event causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through profit or loss.

(ii) Non-‐financial assets The carrying amounts of GPNNT’s non-‐financial assets, other than inventories, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists then the asset’s recoverable amount is estimated. For intangible assets that have indefinite lives or that are not yet available for use, the recoverable amount is estimated each year at the same time.

The recoverable amount of an asset is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-‐tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generate cash inflows from continuing use that are largely independent of the cash inflows of other assets.


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3. Significant accounting policies (continued) (g) Impairment (continued)

(ii) Non-‐financial assets (continued) An impairment loss is recognised if the carrying amount of an asset exceeds its recoverable amount. Impairment losses are recognised in profit or loss. In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. (iii) Capital Contributions Capital contributions are classified as equity. The liability of members is limited and every member undertakes to contribute $1 to the assets of GPNNT if it is wound up while they are a member, or within one year afterwards.

(h) Employee Benefits (i) Long-‐term employee benefits GPNNT’s net obligation in respect of long-‐term employee benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods plus related on-‐costs; that benefit is discounted to determine its present value, and the fair value of any related assets is deducted. The discount rate is the yield at the reporting date on AA credit-‐rated or government bonds that have maturity dates approximately the terms of GPNNT’s obligations. (ii) Short-‐term benefits Liabilities for employee benefits for wages, salaries, annual leave and sick leave represent present obligations resulting from employees’ services provided to reporting date and are calculated at undiscounted amounts based on remuneration wage and salary rates that GPNNT expects to pay as at reporting date including related on-‐costs, such as workers’ compensation insurance. Contributions are made by GPNNT to an employee superannuation fund and are charged as expenses when incurred.


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3. Significant accounting policies (continued)

(i) Goods and Services Tax

Revenue, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the amount of GST incurred is not recoverable from the taxation authority. In these circumstances, the GST is recognised as part of the cost of acquisition of the asset or as part of the expense. Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or liability in the balance sheet. Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash flows arising from investing and financing activities which are recoverable from, or payable to, the ATO are classified as operating cash flows.

(j) Unexpended Grants GPNNT receives grant monies to fund programs either for contracted periods of time or for specific programs irrespective of the time period required to complete those programs. It is the policy of GPNNT to treat grant monies as unexpended grants in the balance sheet where the entity is contractually obliged to provide the services in a subsequent financial period to when the grant is received or in the case of specific programs, where the program has not been completed.

(k) Provisions A provision is recognised if, as a result of a past event, GPNNT has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at pre-‐tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost.

(l) Income Tax No provision for income tax has been raised as the entity is exempt from income tax under Division 50 of

the Income Tax Assessment Act 1997. (m) Payroll Tax No provision for payroll tax has been raised as the entity is exempt from payroll tax under the Payroll Tax

Act effective from 1 July 2009.


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3. Significant accounting policies (continued) (n) Fringe Benefits Tax GPNNT is a partially exempt employer for fringe benefits provided up to a specified amount per employee

under Section 57A of the Fringe Benefits Tax Assessment Act 1986. No provision for fringe benefits tax has been raised as any tax incurred is required to be immediately paid by the employee for whom the fringe benefits tax debt is incurred.

(o) Economic dependence and Going Concern GPNNT, a not for profit entity limited by guarantee, is dependent on the Department of Health and Ageing

(”DoHA”) for the majority of its revenue to operate the business. At the date of this report the Board of Directors has no reason to believe DoHA will not continue to support GPNNT for a further 12 months to 30 June 2012. These financial statements have been prepared on a going concern basis.

(p) Prohibition upon distribution of income, profits and assets

Upon winding up of GPNNT, after paying of all liabilities of GPNNT, the surplus assets:

(i) Shall not be divided amongst Members; but (ii) Shall, upon special resolution of the members, be paid or transferred to another incorporated or

unincorporated organisation, having similar objects to GPNNT. If the Members are unable to pass a resolution, then the surplus assets are to be paid or transferred on the direction of the Supreme Court of the Northern Territory, on application of GPNNT or any Member.

(q) New standards and interpretations not yet adopted

A number of new standards, amendments to standards and interpretations are effective for annual periods beginning after 1 July 2010, and have not been applied in preparing these financial statements. None of these is expected to have a significant effect on the financial statements of GPNNT, except for AASB 9 Financial Instruments, which becomes mandatory for GPNNT’s 2014 financial statements and could change the classification and measurement of financial assets. GPNNT does not plan to adopt this standard early and the extent of the impact has not been determined.

(r) Determination of fair values Trade and other receivables

The fair value of trade and other receivables is estimated as the present value of future cash flows, discounted at the market rate of interest at the reporting date. This fair value is determined for disclosure purposes. Non-‐derivative financial liabilities Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principle and interest cash flows, discounted at the market rate of interest at the reporting date.


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3. Significant accounting policies (continued) (s) Financial risk management GPNNT has minimal exposure to the following risks from their use of financial instruments:

• Credit risk • Liquidity risk • Market risk This note presents information about GPNNT’s exposure to each of the above risks, their objectives, policies and processes for measuring and managing risk.

The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework. Risk management policies and systems are set to identify and analyse the risks faced by GPNNT, to set appropriate risk limits and controls, and to monitor risks and adherence to limits.

Credit risk Credit risk is the risk of financial loss to GPNNT if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers. Trade and other receivables GPNNT’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. Approximately 89 percent (2010: 90 percent) of GPNNT’s revenue is attributable to Government Grants and hence credit risk is low and trade receivables are deemed to be recoverable. GPNNT’s other receivables relate mainly to non-‐governmental organisations which are also funded by both the State and Commonwealth Government and hence the credit risk is low and other trade receivables are deemed to be recoverable.

Liquidity risk Liquidity risk is the risk that GPNNT will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Directors’ approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to GPNNT’s reputation. Market risk Market risk is the risk that changes in market prices will affect GPNNT’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return. GPNNT does not enter into derivatives and has no exposures to currency risk and neither is anticipated. Management’s policy is to review their investment strategy to balance interest returns and liquidity issues.

(t) Segment information

GPNNT acts predominantly in the not for profit sector and is funded by the Federal and Northern Territory Governments and other funding bodies. GPNNT operates in the one geographical area, that being the Northern Territory of Australia.


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2011 2010 4. Grant income $ $ Current year grants Department of Health and Ageing 10,771,457 9,396,579 Department of Health and Ageing – Grant funds returned -‐ 223,383 NT Department of Health 476,803 743,863 Australian General Practice Network 284,702 482,052 Pharmacy Guild -‐ 71,114 National Prescribing Services Ltd 54,000 64,927 Improvement Foundation 28,594 71,561 Other organisation grants 462,807 198,200 12,078,363 11,251,679 Unexpended Grants brought forward Grants brought forward 2,250,929 2,703,395 ABHI Program un-‐approved grant (3,026) -‐ Unexpended grants carried forward (2,652,229) (2,250,929) (404,326) 452,466 Grant funds repaid to funding bodies

Department of Health and Ageing (87,113) (223,383) (87,113) (223,383) Total Grant Income 11,586,924 11,480,762 Non-‐grant income Program cost recoveries 81,451 74,628 Northern Territory Pre-‐employment Clinical -‐Interview assessment fees 1,500 4,500 Course and training fees 94,541 29,800 Publication and book sales 1,444 1,041 Sponsorship income 51,834 38,500 Sundry income 97,339 20,392 Program administration 104,624 85,000 Centre for Policy Development -‐ conference sponsorship 2,818 31,227 Centre for Policy Development -‐ registration fees 11,360 9,520 Facilities hireage 545 5,095 Program staff training recovery 5,000 3,000 452,456 302,703 Total Income 12,039,380 11,783,465


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2011 2010 5. Employee expenses $ $ Salaries and wages 3,655,676 4,596,079 Superannuation 317,204 393,758 Entitlement expenses 21,261 46,111 Payroll tax -‐ 18,678 Recruitment expenses 70,583 49,529 Training expenses 47,961 86,991 Staff work health insurance 38,489 11,422 Travel and accommodation 542,196 766,234 4,693,370 5,968,802 6. Governance expenses Directors stipends remuneration 158,524 159,872 Director meetings, travel and training 46,656 30,806 205,180 190,678 7. Rent and occupancy expenses

Property rent 389,890 374,301 Property maintenance, cleaning & security 173,075 83,485 Electricity 49,245 45,376 612,210 503,162 8. Administration expenses Bad debts expense Doubtful debts -‐ 24,165 -‐ 24,165 Computer and IT expenses IT Equipment 56,696 37,765 Software purchases 127,925 18,044 IT Subcontractors 133,077 155,787 Internet/Network connection 7,120 8,363 Database and Website expenses 105,563 34,656 430,381 254,615 Communication expenses

Land and mobile telephones 95,848 102,516


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Communication expenses

Land and mobile telephones 95,848 102,516 Data services and communication 13,834 33,221 Teleconferencing expenses 4,110 19,494 113,792 155,231


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2011 2010 8. Administration expenses (continued) $ $ Insurance Australian General Practice Network policy 42,743 35,044 Other business insurance -‐ 35,282 42,743 70,326 Motor vehicle expenses Operational lease expenses 186,164 113,901 Fuel and oil 39,105 41,244 Repairs and maintenance 18,657 22,991 Registration expenses 2,880 560 246,806 178,696 General expenses Bank fees 4,438 4,506 Accreditation fees and expenses 7,272 24,815 Advertising 15,538 25,116 Accounting and other fees 1,000 53,913 Audit fees 42,045 57,000 Business contractors and consultants 146,209 71,320 Legal fees 3,377 19,280 Katherine Regional Aboriginal Health fees 131,024 68,451 Licensing and membership fees 13,003 7,328 Stationery, Printing and Office supplies 78,570 114,951 Postage and couriers 26,129 27,643 Staff meetings 1,821 24,212 Storage and Archiving 10,425 13,753 Parking fees 2,497 2,672 Equipment Hire -‐ 373 Sundry expenses 3,573 2,250 Other administration expenses 20,443 9,582 PHCO expenses 54,358 -‐ Business overhead expenses 160,684 75,535 722,406 602,700 Total administration expenses 1,556,128 1,285,733


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31

2011 2010 9. Direct program expenses $ $ Program resource development 54,283 48,222 Program events and meetings 92,052 110,317 Program contractors and consultants 3,477,737 2,305,147 Program subsidy and grants 506,446 466,518 eHealth IT Development and Implementation -‐ 100,332 Other direct program expenses 891,664 908,782 5,022,182 3,939,318 10. Financial income Interest income on bank deposits 165,958 76,769 11. Cash and cash equivalents Cash at bank 4,568,680 3,447,541 Cash on hand 1,000 1,000 4,569,680 3,448,541 12. Trade and other receivables

Trade receivables 604,655 841,560 Impairment of receivables -‐ (24,165) 604,655 817,395 13. Other current assets Deposits and bonds paid 5,012 6,837 Accrued income 8,466 -‐ Prepayments 78,820 102,340 92,298 109,177


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Furniture,

Clinic and

Computer Motor Office Equipment Vehicles Equipment Total 14. Property, plant and equipment $ $ $ $ Cost Balance at 1 July 2009, at cost 170,048 22,055 33,429 225,532

Acquisitions 77,192 -‐ -‐ 77,192 Disposals -‐ -‐ -‐ -‐

Balance at 30 June 2010, at cost 247,240 22,055 33,429 302,724 Balance at 1 July 2010, at cost 247,240 22,055 33,429 302,724 Acquisitions 77,586 -‐ -‐ 77,586 Disposals (27,413) -‐ -‐ (27,413) Balance at 30 June 2011, at cost 297,413 22,055 33,429 352,897 Depreciation and impairment losses Balance at 1 July 2009 (76,231) (4,411) (4,232) (84,874) Depreciation charge for the year (38,327) (4,411) (1,600) (44,338) Disposals -‐ -‐ -‐ -‐ Balance at 30 June 2010 (114,558) (8,822) (5,832) (129,212) Balance at 1 July 2010 (114,558) (8,822) (5,832) (129,212) Depreciation charge for the year (37,305) (4,411) (1,602) (43,318) Disposals 21,048 -‐ -‐ 21,048 Balance at 30 June 2011 (130,815) (13,233) (7,434) (151,482) Carrying amounts At 1 July 2009 93,817 17,644 29,197 140,658 At 30 June 2010 132,682 13,233 27,597 173,512 At 1 July 2010 132,682 13,233 27,597 173,512 At 30 June 2011 166,598 8,822 25,995 201,415


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2011 2010 15. Trade and other payables $ $ Current Trade payables 496,013 520,485 Other current payables 830,937 245,245 PAYG 45,308 73,921 NT Payroll taxreturn to Program Funder 18,678 18,678 Grants received in advance -‐ 70,191 Employee accruals 80,728 92,706 1,471,664 1,021,226 16. Employee benefits Current Liability for annual leave 359,507 372,442 Liability for long service leave 36,137 35,556 395,644 407,998 Non-‐current Liability for long service leave 38,169 37,481 17. Unexpended grants Unexpended grants at the beginning of the year 2,250,929 2,703,395 Transfers (to)/from Statement of Comprehensive Income 404,326 (452,466) Unexpended grants at the end of the year 2,655,255 2,250,929 18. Operating leases

Non-‐cancellable operating property lease rentals are payable as follows: Less than one year 75,221 376,618 Between one and five years 48,958 753,236 More than five years -‐ -‐ 124,179 1,129,854


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19. Related party transactions

Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other persons unless otherwise stated. During the year the following Directors were employed and/or contracted by GPNNT to deliver services: $ Director Stringer GP Hospital Liaison Officer for Royal Darwin Hospital 34,411 Director Patel CPD Task Force member 120 Director Lloyd Contractor for GP Mental Health Clinic Alice Springs 5,610 Director Farthing Contractor for Aged Care Access Incentives Program 1,600 Director Gray REST course instructor, OTD Scheme tutor, an Awards panel

member

7,565 Key Management personnel and director transactions A number of key management personnel, or their related parties, hold positions in other entities that result in them having control or significant influence over the financial or operating policies of these entities. A number of these entities transacted with GPNNT in the reporting period. The terms and conditions of transactions with key management personnel and their related parties were no more favourable than those available, or which might reasonably be expected to be available, on similar transactions to non-‐key management personnel related entities on an arm’s length basis. 2011 2010 20a. Cash and cash equivalents $ $ Bank balances 4,568,680 3,447,541 Cash on hand 1,000 1,000 Cash and cash equivalents in the statement of cash flows 4,569,680 3,448,541 20b. Reconciliation of cash flows from operating activities Cash flows from operating activities Surplus/(Deficit) for the period 66,040 (71,797) Adjustments for:

Depreciation 43,318 44,338 Impairment losses -‐ 24,165 Financial income (165,958) (76,769)

(56,600) (80,063) Change in inventories 10,285 2,632 Change in trade and other receivables 206,099 (40,781) Change in prepayments 23,520 158,427 Change in trade and other payables 854,761 (1,050,186) Change in employee benefits (11,666) 21,804 1,026,399 (988,167) Interest received 165,958 76,769


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Net Cash generated from/(used in) operating activities 1,192,357 (911,398) 21. Financial instruments

Credit risk Exposure to credit risk GPNNT does not have any material credit risk exposure to any single receivable or group of receivables under financial instruments entered into by the entity as most of its receivables are due from Government departments. Impairment losses The ageing of GPNNT’s receivables at the reporting date was: Gross Impairment Gross Impairment 2011 2011 2010 2010 $ $ $ $ Not past due 592,301 -‐ 232,652 -‐ Past due 0-‐30 days -‐ -‐ 190,604 -‐ Past due 31-‐120 days 12,354 -‐ 394,139 -‐ Past due 121 days to one year -‐ -‐ -‐ -‐ More than one year -‐ -‐ 24,165 24,165 604,655 -‐ 841,560 24,165

Liquidity risk GPNNT manages liquidity risk by monitoring bank balances and monitoring grant payments as per grant schedules, by ensuring the grant payments are made on time and there are sufficient funds in the bank.

The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements:

Carrying Contractual 6 months amounts Cash flow or less $ $ $ Trade and other payables 514,675 (514,675) (514,675) Other current payables 830,937 (830,937) (830,937) ATO GST payables (18,662) 18,662 18,662 PAYG payables 45,308 (45,308) (45,308) NT Payroll tax returned to Program Funders 18,678 (18,678) (18,678) 1,390,936 (1,390,936) (1,390,936)

Price risk GPNNT is not exposed to any material commodity risk.

Foreign currency risk GPNNT is not exposed to any material foreign currency risk.


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Net Cash generated from/(used in) operating activities 1,192,357 (911,398) 21. Financial instruments

Credit risk Exposure to credit risk GPNNT does not have any material credit risk exposure to any single receivable or group of receivables under financial instruments entered into by the entity as most of its receivables are due from Government departments. Impairment losses The ageing of GPNNT’s receivables at the reporting date was: Gross Impairment Gross Impairment 2011 2011 2010 2010 $ $ $ $ Not past due 592,301 -‐ 232,652 -‐ Past due 0-‐30 days -‐ -‐ 190,604 -‐ Past due 31-‐120 days 12,354 -‐ 394,139 -‐ Past due 121 days to one year -‐ -‐ -‐ -‐ More than one year -‐ -‐ 24,165 24,165 604,655 -‐ 841,560 24,165

Liquidity risk GPNNT manages liquidity risk by monitoring bank balances and monitoring grant payments as per grant schedules, by ensuring the grant payments are made on time and there are sufficient funds in the bank.

The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements:

Carrying Contractual 6 months amounts Cash flow or less $ $ $ Trade and other payables 514,675 (514,675) (514,675) Other current payables 830,937 (830,937) (830,937) ATO GST payables (18,662) 18,662 18,662 PAYG payables 45,308 (45,308) (45,308) NT Payroll tax returned to Program Funders 18,678 (18,678) (18,678) 1,390,936 (1,390,936) (1,390,936)

Price risk GPNNT is not exposed to any material commodity risk.

Foreign currency risk GPNNT is not exposed to any material foreign currency risk.


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22. Members’ Guarantee

The entity 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 each towards meeting any outstanding obligations of the entity. At 30 June 2011 the number of individual members was 682 (2010: 624).

23. Business overheads expenditure

In order to meet the business overheads expenditure; during the year, GPNNT charged a total of $1,359,549 (2010: $2,730,312) in business overheads recovery expenditure against the grant income, which was eliminated during reconciliation against the operational statements. 24. Auditor’s remuneration 2011 2010 Audit Services $ $ Auditors of GPNNT KPMG Darwin: Audit and review of financial statements 37,500 35,500 Other assurance services -‐-‐ 21,500 Other services KPMG Darwin: Assistance in the preparation of financial statements -‐ 12,000 Other fee in relation to the 2010 financial statements -‐ 20,335 Other fee in relation to temporary accounts support whilst GPNNT personnel on leave

13,755

-‐

51,255 89,335 25. Events subsequent to reporting date

On 11 August 2010, GPNNT was awarded accreditation for three years to 11 August 2013 by the Australian Council of Healthcare Standards (“ACHS”). As part of this accreditation a report on the Quality Improvement Plan was submitted to ACHS on 4 August 2011. A collaborative Medicare Local submission for the Northern Territory was submitted to the Department of Health and Ageing (“DoHA”) on 19 July 2011 and the GPNNT Board is now awaiting the outcome. The GPNNT Board met on 12 August 2011 to consider GPNNT’s future in the light of the collaborative Medicare Local submission and the known information in regards to Divisions of General Practice funding after 30 June 2012, with the extension of funding to 31 December 2012. It was decided, upon the formation of a Medicare Local for the Northern Territory, the Board would recommend to the Members at a special general meeting that GPNNT be wound up as an organisation.


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25. Events subsequent to reporting date (continued) GPNNT expects to maintain the present status and level of operations to 30 June 2012. The Directors believe GPNNT continues to play a key role in primary health care reform and supporting general practice and primary health care in the Northern Territory and that GPNNT will play a significant role in the development of a Medicare Local. At the date of this report, the Board believes GPNNT will continue to operate beyond 30 June 2012 to facilitate a smooth transfer of programs and services. This belief is based on the information known on GPNNT’s future funding; the timing of the expected response to the Medicare Local submission (expected last quarter of 2011); and the experience gained from the 2008 amalgamation, from which GPNNT was formed, as to the length of time required to undertake the work necessary in transferring program activities, people, contracts and commitments, assets, and registrations to a newly formed entity. The Board anticipate all assets, liabilities and equity of GPNNT will be transferred to the newly formed Medicare Local and that sufficient transition funds will be available to GPNNT to complete the transfer of programs and services; to cover costs associated with GPNNT’s statutory compliance requirements (such as final audit, cessation of registrations); and cover any company liquidation costs. The Board believes GPNNT will need to work with the newly formed Medicare Local past 30 June 2012 in a transition period and plans, including cash flow consideration for solvency purposes, have been made with the information known at the date of this report to facilitate this process. In the development of a Medicare Local the GPNNT Board acknowledges there is uncertainty as to GPNNT’s ability to continue as a going concern past 31 December 2012. Other than the matters discussed above, there has not arisen in the interval between the end of the financial period and the date of this report, any item, transaction or event of a material and unusual nature likely, in the opinion of the Directors, to affect significantly the operations of GPNNT, the results of those operations, or the state of affairs of GPNNT, in future financial years.


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In the opinion of the directors of General Practice Network NT Ltd (“GPNNT”): (a) the financial statements and notes, set out on pages 11 to 35, are in accordance with the Corporations

Act 2001, including:

(i) giving a true and fair view of GPPNT’s financial position as at 30 June 2011 and of its performance, for the financial year ended on that date; and

(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and

(b) there are reasonable grounds to believe that GPNNT will be able to pay its debts as and when they

become due and payable. Signed in accordance with a resolution of the Board of Directors:

Ms Diane Walsh Director and Chair, General Practice Network NT Ltd Dated at Darwin this 30th day of September 2011.

Director’s Declaration


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Audit ABN: 30 692 879 009 18 Smith Street Darwin NT 0800 GPO Box 1616 Darwin NT 0800 Australia


ABCD

KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.

Liability limited by a scheme approved under Professional Standards Legislation.

Independent auditors report to the members of General Practice Network NT Ltd Report on the financial report We have audited the accompanying financial report of General Practice Network NT Ltd (the Company), which comprises the statement of financial position as at 30 June 2011, and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year ended on that date, notes 1 to 25 comprising a summary of significant accounting policies and other explanatory information and the directors’ declaration. Directors’ responsibility for the financial report The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that is free from material misstatement whether due to fraud or error. Auditor’s responsibility Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation of the financial report that gives a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors as well as evaluating the overall presentation of the financial report. We performed the procedures to assess whether in all material respects the financial report presents fairly, in accordance with the Corporations Act 2001 and Australian Accounting Standards, a true and fair view which is consistent with our understanding of the Company’s financial position and of their performance. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

37

Audit ABN: 30 692 879 009 18 Smith Street Darwin NT 0800 GPO Box 1616 Darwin NT 0800 Australia


ABCD

KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.

Liability limited by a scheme approved under Professional Standards Legislation.

Independent auditors report to the members of General Practice Network NT Ltd Report on the financial report We have audited the accompanying financial report of General Practice Network NT Ltd (the Company), which comprises the statement of financial position as at 30 June 2011, and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year ended on that date, notes 1 to 25 comprising a summary of significant accounting policies and other explanatory information and the directors’ declaration. Directors’ responsibility for the financial report The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that is free from material misstatement whether due to fraud or error. Auditor’s responsibility Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation of the financial report that gives a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors as well as evaluating the overall presentation of the financial report. We performed the procedures to assess whether in all material respects the financial report presents fairly, in accordance with the Corporations Act 2001 and Australian Accounting Standards, a true and fair view which is consistent with our understanding of the Company’s financial position and of their performance. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.


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ABCD

Auditor’s opinion on the financial report

In our opinion, subject to the emphasis of matter below:

(a) the financial statements and notes, set out on pages 11 to 35, are in accordance with the Corporations Act 2001, including:

(i) giving a true and fair view of the Company’s financial position as at 30 June 2011 and of its

performance, for the financial year ended on that date; and (ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and

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

when they become due and payable.

Material uncertainty regarding continuation as a going concern

Without qualification to the opinion provided above, attention is drawn to the matters described in the directors' report and note 25. The Company has submitted an application to the Department of Health and Ageing to become a Medicare Local which may involve the formation of a new entity and it is anticipated this new entity will assume the operations currently performed by the Company. A response in relation to this application from the Department of Health and Ageing is expected to be received in the last quarter of 2011. Upon formation of the Medicare Local, the directors have agreed to recommend to the members that the Company be wound up and all programs run by the Company be transferred to the new Medical Local entity, in line with the anticipated and known funding changes by the Department of Health and Ageing, from 1 July 2012. As a result of these matters, there is material uncertainty regarding the ability of the Company to continue as a going concern past the Department of Health and Ageing’s Divisions of General Practice funding date of 31 December 2012. Should the Company be unable to continue as a going concern, it is unlikely that they will realise their assets and extinguish their liabilities in the normal course of business and at amounts stated in the financial statements.

KPMG

MunLi Chee Partner Darwin 30 September 2011

General PracticeNetwork NT Ltd. ABN 61 129 153 724

Stuart House5 Shepherd Street GPO Box 2562Darwin NT 0801T 08 8982 1000 F 08 8981 5899

National Remote Health Precinct5 Skinner Street Alice Springs NT 0871PO Box 1195T 08 8950 4800 F 08 8952 3536

[email protected]

www.gpnnt.org.au

general practice network nt ltd 2011 annual financial report · for the year ended 30 june 2011 2...

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