health services australia

excellence,

innovation and

integrity in

health

Health Services AustraliaAnnual Report 2000–01

HSA1028_cover_for pdf 27/11/01, 11:27 AM1

02 Letter tabling report

03 Message from the Board

07 Corporate profi le

09 The year in review

13 Organisational structure

15 HSA services

17 Occupational health and safety

21 Travel health services

23 Centrelink assessments

25 Immigration services

26 Business innovation

29 Our people

33 State and Territory news

41 Gulf War Health study

43 Tribute – Dr Michael Pincus

44 Directors’ Report

49 Directors’ Declaration

50 Audit Certifi cate

52 Statement of Financial Performance

53 Statement of Financial Position

54 Statement of Cash Flows

55 Notes to and forming part of the fi nancial statements

75 Contacts

Contents

ISO 9002Lic No. 11622Standards Australia

2 Health Services Australia: excellence, innovation and integrity in health Health Services Australia: excellence, innovation and integrity in health 3

The Honourable Grant TamblingParliamentary Secretary to the Minister for Health and Aged CareParliament HouseCANBERRA ACT 2600

Dear Senator Tambling,

I have pleasure in submitting Health Services Australia’s (HSA) Annual Report for the year 1 July 2000 to 30 June 2001.

The report has been prepared in accordance with the requirements of the Corporations Act 2001, Commonwealth Authorities and Companies Act 1997, the Government Business Enterprise Governance Arrangements and the guidelines issued by the Department of Prime Minister and Cabinet (‘Guidelines for the content, preparation and presentation of annual reports by statutory authorities’).

The fi nancial year 2000–2001 represented our fourth consecutive year of growth and saw the Company achieve a record profi t. The main factors impacting on business growth were a strong client focus, commitment to superior service, expansion into new service areas (Gulf War Health Study, Defence Recruiting) and diversifi cation of client base.

While noting our achievements over the past twelve months, the report also looks to the future, outlining strategies and plans for our long-term viability and continuing success.

Yours sincerely,

Rae Taylor AOChairman

October 2001

The Company has performed strongly in

2000–01, signifi cantly outstripping the sound

performance achieved in previous years and

recording healthy growth in revenue, in

profi t, in service volume, in clients and in

staff numbers.

Revenue increased 19% to $49.7 million,

resulting in an operating profi t before tax

of $9.0 million (after tax $5.9 million), up

154% on last year. The Company pays all Commonwealth taxes and charges and pays to the Commonwealth

amounts in lieu of State taxes. In respect of 2000–01, HSA will pay $8.0 million ($4.2 million last year) in

taxes and dividends.

The commitment of management and staff to our vision of “Excellence, Innovation and Integrity in Health”

provided the framework for us to strengthen existing client relationships, successfully tender for major

contracts, introduce new services and diversify our client base. Our approach going forward will be to continue

to put clients at the centre of our decision making processes and to maintain our focus on our corporate vision.

Message from the Board

1st Floor, 15 Bowes Street Woden ACT 2606, PO Box 281 WODEN ACT 2606

Telephone: 02 6269 2100 Facsimile: 02 6269 2180

4 Health Services Australia: excellence, innovation and integrity in health

Health Services Australia: excellence, innovation and integrity in health 5

ExcellenceA key area which differentiates us from our

competitors is our capacity to respond to the

signifi cant changes which can occur in the

requirements of our many national clients,

particularly our government clients.

Our work with Centrelink saw a 19% increase in

referrals in 2000–2001, compared with the previous

year, with a dramatic increase simultaneously

recorded in requests to perform health assessments

on all new arrivals at Immigration Detention Centres.

HSA is regularly required to dispatch doctors

and other health professionals to remote locations

such as Woomera, Port Hedland, Curtin and

Derby, sometimes at only half a day’s notice.

Health assessments form a vital role in detecting

and managing public health risks in order to

protect the safety of both detainees and the

Australian community.

These projects, together with our involvement in

the provision of pre-recruitment medical

assessments in a pilot project for the Australian

Defence Force in Victoria and Tasmania, require

an extraordinary degree of organisational

responsiveness. They often involve rapid

mobilisation of professional staff, an ability to

deliver services under extremely challenging

conditions and against tight deadlines at remote

locations around Australia.

Our success in meeting these challenges attests

to the excellence of our people who readily make

themselves available for deployment wherever

they are required by clients.

InnovationResearch and Development (R&D) was a priority for

2000–01, with roll-out of an R&D program focusing

on ways to further enhance existing services and

meet the evolving needs of our clients.

Our R&D program led to innovation in a number

of areas. This included the development of unique

programs to assist organisations manage shift

worker health, absenteeism, call centre related

health and stress issues, and the development of

protocols to help manage audio-shock and the

ever evolving travel related health risks.

Our occupational physicians and clinical

psychologists also developed specially tailored

pre-employment assessments for specifi c

employers, including the Australian Taxation

Offi ce and Australian Protective Services. This

results in a better job/employee match for those

organisations’ unique requirements, reducing the

risk of workplace injury and costly litigation.

IntegrityWe pride ourselves on delivering national

consistency in every service we undertake, be it

in Woomera, Broken Hill or our Capital Cities.

This is of central importance to Centrelink and the

Department of Immigration and Multicultural Affairs,

for whom the independence, integrity and rigour of

our medical assessments is absolutely crucial to

ensure budgetary commitments are appropriately

targeted and public health risks are identifi ed and

scrupulously managed.

In order to continue to underpin the integrity and

national consistency of our services, we created two

new management roles. A Lead Medical Practitioner

to oversee the continued development of nationally

consistent medical protocols tailored to individual

clients requirements, and a National Operations

Manager, to ensure our processes are always

nationally consistent and assume responsibility

for national project management.

Our ability to adhere to strict national protocols

and deliver high quality services on a uniform

national basis was an important factor in our

successfully tendering for 20% of Centrelink health

assessment business, the awarding of a 12 month

national contract with Nortel, and our work on an

epidemiological study of Gulf War Veterans’ Health,

which we are conducting with Monash University.

Looking AheadThe future continues to hold many challenges,

but with a strong management team and staff

committed to quality client service, the Company is

well positioned to successfully meet any challenges.Mr Rae Taylor AO Ms Vanessa FanningChairman Managing Director

Our priorities in the coming year include to:

• retain, grow and diversify our client base;

• enhance our service reputation and Quality

Systems; and

• attract, retain and develop high quality

professional staff.

We remain committed to staff development and

providing a work environment that is responsive to

the demands of balancing work and home life,

including fl exible work hours, and part time and

sessional employment.

On behalf of the Board we would like to thank staff

for their outstanding efforts and clients for their

on-going support. We look forward to 2001–02 as

we forge new partnerships and work together to

build an even stronger business.



Corporate proÞ le

Health Services Australia (HSA), established in 1997, is the only organisation in Australia offering a truly

national one-stop-shop in work-related health, safety and travel. No other health organisation offers the same

depth and breadth of services delivered through an extensive operational network which spans the nation,

taking in every Capital City and extending into rural and remote Australia.

Our expertise lies in:

• workplace health and safety services;

• pre-employment assessments;

• overseas travel vaccinations and health advice;

• medical assessments for government benefi t and pension applicants; and

• medical assessments for immigration applicants.

We have a diverse workforce of more than 450 employees, committed to innovative, cost-effective, superior

service delivery. Our people include doctors, nurses, psychologists, occupational therapists, administrators,

marketers, fi nance and IT experts.

We operate from 13 offi ces. We have an offi ce located in every Capital City and a number of regional centres

around Australia. Our offi ce structure is supported with a unique national network of doctors and nurses,

enabling us to service clients beyond the cities into rural and remote areas like Mount Isa, Alice Springs and

Thursday Island. Our head offi ce is in Canberra, ACT.

HSA Offi ces, Clinics, Approved Medical Practitioners (AMP) locations


excellence, innovation

and integrity in health

A commitment to excellence, innovation and integrity in health underpinned HSA’s actions during this fi nancial year, resulting in a record profi t and the fourth consecutive year of growth.

Our ability to continue to grow and return sizeable profi ts is particularly signifi cant given Australia’s increasingly competitive healthcare environment.

The last 18 months have witnessed a surge in general practice corporatisation leading to consolidation in the historically fragmented private healthcare sector. The result has seen the development of new national healthcare organisations keen to compete in HSA’s traditional marketplace.

HSA has met this challenge head on. Our national on-the-ground presence combined with our constant client focus and high quality, innovative services has enabled us to win major national tenders, grow business with existing clients and expand into new service areas. These achievements enhance HSA’s reputation in important professional and operational areas and bring positive outcomes to the community.

The year in review

excellence

innovation integrity


Our ability to continue to grow and return sizeable profi ts is particularly signifi cant given Australia’s increasingly competitive healthcare environment

Corporate AchievementsGrowth: fourth consecutive year of growth in

services, with overall growth of 24.6% achieved by

the Company during this fi nancial year; growth was

particularly signifi cant in occupational health and

safety and immigration services.

Profi t: recorded a record profi t; total revenue grew

by 19% compared to last year resulting in a 154%

increase in profi t before tax; profi t resulted from

a combination of growth in volume of services and

greater effi ciencies.

Acquisition: an acquisition offer was made by HSA

to Australia’s leading provider of travel health

services, Travellers Medical and Vaccination Centre

(TMVC); the acquisition, to be fi nalised in 2001–02,

will signifi cantly extend our client base and bring

additional revenue of around $5 million per annum.

Centrelink tender: HSA successfully tendered for

20% of Centrelink’s medical assessment services; the

win saw HSA retain metropolitan Brisbane business

and win back work in country Queensland and

Western Melbourne which had been lost in a 1997

tender; a contract has now been signed covering all

Centrelink work to June 2002.

Property purchase: purchased a building in

Hobart’s CBD to enable transfer of the Hobart offi ce

to larger premises.

GST: successfully implemented all tax reform

changes.

Service InnovationTailored services: developed pre-employment

assessments tailored to particular needs of specifi c

industries; this approach helps decrease the risk

of work-related injuries and legal challenges from

unsuccessful applicants.

Absenteeism: completed a six-month pilot of a

unique HSA-developed absenteeism program

designed to assist organisations manage

absenteeism; early results are proving positive.

Shift Work: an in-house occupational health

physician conducted research into the OH&S

implications of shift work, results are being used

to develop a shift work management protocol.

DVT: in response to the emergence of deep vein

thrombosis (DVT) as a signifi cant travel health issue,

developed a DVT fact sheet and are producing a

questionnaire to assess travellers’ risk and provide

appropriate risk management advice and products.

DiversificationGulf War: in partnership with Monash University,

began work in September 2000 on a Gulf War

Health Study, to assess the health of Gulf War

veterans against a control group; this represents a

new service area made possible through our unique

national network of medical practitioners.

Defence Recruiting: in conjunction with

Manpower Australia, undertook a recruitment

pilot in Victoria and Tasmania for the Australian

Defence Force (ADF); HSA conducted the medical

assessment component of the recruiting process;

a decision on possible national roll out of the pilot

is expected in the new fi nancial year.

F111: successfully tendered to undertake health

assessments as part of a national health study on

F111 crew involved in fuel tank maintenance;

the project, to be undertaken on behalf of the

Departments of Defence and Veterans’ Affairs,

will roll out next fi nancial year.

WSG: our rehabilitation provider partner,

Work Solutions Group (WSG), established offi ces

in Canberra and Sydney and began servicing

clients out of HSA’s Adelaide offi ce, enabling us

to introduce return to work and rehabilitation

services to new markets.

Navigator climbing into an F111C aircraft. HSA is conducting the health assessments for the F111 National Health Study.


Organisational structure

HSA, a Government Business Enterprise, is wholly owned by the Australian Government and is accountable to

its shareholders*, the Minister for Finance and Administration and the Parliamentary Secretary to the Minister

for Health and Aged Care. It is managed by an independent Board of Directors.

The Board appoints the Managing Director (MD) to oversee the operational aspects of the business. Each State

and Territory business, except for NSW, is headed by a general manager who is responsible to the MD for

operations and performance in their business units, including quality assurance and clinical standards.

In NSW, management is devolved to the three general managers managing our major offi ces at Sydney Central,

Parramatta and Newcastle, and is coordinated by a Board of Management, comprising the three NSW-based

general managers and a fi nance manager. The Board is chaired by the MD.

The Company has an issued share capital of $13.3 million and in 2000–2001 had a turnover of $49.7 million and

an asset base of $30 million.

HSA is required to pay all Commonwealth taxes and charges and pay a dividend to shareholders. It is also

required to pay the Commonwealth amounts in lieu of State taxes.

*Under the Commonwealth Authorities and Companies Act Senator Grant Tambling, Parliamentary Secretary to the Minister for Health and Aged Care, is the responsible Minister in respect of HSA. Under the Government Business Enterprise Governance Arrangements the Minister for Finance and the Parliamentary Secretary for Health and Aged Care are recognised as shareholder Ministers.

Ms Vanessa Fanning Mr Peter Moody Dr Peter Vodicka Managing Director Chief Financial Offi cer/ Manager Health Company Secretary Assessment Service

Mr Andy Gates Ms Leanore Aro Mr Stan Macionis Mr Peter O’Keeffe South Australia General Manager Victoria General Manager Queensland General Manager IT Manager

Ms Jenny Empson Mr Bob West Dr Robin Taylor Dr Ian Payne Australian Capital Territory Manager Support Services Sydney General Manager Tasmania General Manager General Manager

Dr Richard Saker Dr Mary McGinty Dr Harry Schwarz Dr Barbara Bell Western Australia General Manager Newcastle General Manager National Operations Manager Parramatta General Manager

our managers


HSA services

Health Services Australia provides a range of competitively priced, high quality professional services,

tailored to meet the needs of individual clients. We specialise in providing independent health assessments

and advice rather than hands on medical treatment or rehabilitation, remaining free from confl ict of interest.

Information on the following key services is provided in this section:

Centrelink health assessments Migrant health assessment services Occupational health services International travel health services

Centrelink health assessments

Migrant healthassessments

Occupationalhealth services

International travel health

services

Health Services Australia, number of services by business line

(‘000

)

Eligibility Assessments Immigration Occupational Health Travel Health

FY98/99 FY99/00 FY00/01

150

120

90

60

30

0


Occupational health and safety

HSA offers the most comprehensive occupational

health and safety service (OH&S) of any organisation

in Australia. Our breadth of services combined

with our nationwide on-the-ground presence

enables us to successfully meet all the OH&S needs

of employers and employees from recruitment to

retirement, anywhere in Australia.

During this fi nancial year, OH&S business

experienced exceptional growth of 46%. A key factor

driving this was the implementation of a strategic

plan to focus attention on specifi c industries (call

centre, transport, insurance and recruiting), and the

tailoring of existing services to meet individual

industry needs. This was further enhanced by the

introduction of innovative services and work

associated with national projects.

National Health Studies: Gulf War Veterans

Health Study – In partnership with Monash

University and Department of Veterans’ Affairs,

began work on a national study to assess the

health of Gulf War veterans, opening up a new

service area.

F111 Health Study – HSA won a tender to conduct

health assessments as part of a national study of

F111 crew involved in fuel tank maintenance. This

project will roll out next fi nancial year.

Defence Recruitment Medical Assessments:

in conjunction with Manpower Australia, undertook

a recruitment pilot in Victoria and Tasmania for

the Australian Defence Force (ADF). We were

responsible for the medical assessment component

of the recruiting process.

Major Contracts: awarded a 12-month contract

to deliver OH&S and travel services to Nortel

employees nationally. Early work has focused on

assessing exposure to lasers and radio frequencies

and on travel assessments.

Experienced an 85% increase in revenue from

work undertaken for Military Compensation and

Rehabilitation Services (MCRS), due to MCRS

expanding HSA’s area of responsibility to cover WA

and TAS. A central aspect of the new work involved

reviewing 150 back-logged cases in Perth against

extremely tight deadlines. This was achieved with

the support of neighbouring States who supplied

additional occupational physicians to Perth to help

meet the timelines.

Absenteeism: we completed a six-month pilot of

a unique absenteeism program (Happy, Healthy,

Here), developed by HSA to help organisations

manage absenteeism. The pilot involved undertaking

a detailed analysis of the workplace in relation to Managing in a Call Centre environment is challenging and HSA gives me access to professional health services and advice


absenteeism issues and identifying strategies to

address the issues. Early anecdotal evidence

appears positive.

Shift Work: following a client request, researched

the OH&S implications of shift work for staff and

employees. The results are currently being used to

develop a shift work management protocol.

Call Centres: as a result of the emergence of the

phenomenon “audioshock”, HSA has put in place

protocols to actively monitor research into the

condition both nationally and internationally.

Results will be fed into work currently being

undertaken internally to develop models to help

assess and manage the condition.

Tailored Services: in-house specialists

developed pre-employment assessments tailored

to specifi c industries. The process involves

identifying the essential physical/medical qualities

necessary to undertake identifi ed tasks and the

development of a medical assessment to help

select the most appropriate candidate.

Infl uenza Vaccination Program: achieved a

14% increase in the number of vaccinations

compared to last year. Key to the program’s

success was a nationwide marketing campaign

highlighting the cost to business of lost

productivity through illness from infl uenza.

Marketing efforts comprised direct mail and

letterbox drops.

Work Solutions Group: the second year of

partnership between HSA and Melbourne-based

specialist rehabilitation provider, Work Solutions

Group (WSG), continued to see a broadening of the

customer base for both organisations.

The partnership was created to provide a fully

integrated network able to meet all the occupational

health and safety needs of employers and employees

in a coordinated and cost-effective way. Our

ability to achieve this continues to grow as WSG

expands services beyond Victoria. This year saw the

establishment of WSG offi ces in Canberra and

Sydney and the commencement of services out of

HSA’s Adelaide offi ce.

Promotion Activities: undertook a range of

promotional activities to raise the profi le of

HSA’s OH&S services. This included having

HSA occupational physicians address various

conferences, attend scientifi c meetings, conduct

seminars on absenteeism and publish articles on

workplace health issues, including audioshock

and call centre health issues.

Around Australia, other HSA efforts also included

attendance at major trade shows and conferences,

particularly in relation to call centres, insurance

and transport.

OH&S services

Absenteeism management programs

Drug & alcohol screening

Ergonomic workplace assessments

Executive medicals

Exit medicals

Fitness for duty assessments

Health & lifestyle screenings

Post-exposure medicals

Pre-employment medicals

Psychiatric assessments

Psychological assessments

Rehabilitation & return to work

Stress management

Toxic hazard advice & screening

Vaccination (infl uenza, Hepatitis A&B, Q fever)

Workplace education programs

HSA offers the most comprehensive occupational health and safety service of any organisation in Australia


Travel health services

The principal aim of travel medicine is to protect

the health of travellers through education,

vaccination and up-to-date advice on keeping

healthy while travelling.

Travel Health Australia offers a comprehensive

service targeted to those who are visiting or being

posted overseas, including vaccinations, check-ups

to diagnose pre-existing medical conditions, and

travel health advice and tips.

The benefi ts of accessing comprehensive travel

health services are many:

• decreases risk of becoming ill overseas;

• limits expenses associated with overseas

health treatments;

• peace of mind – many overseas healthcare

facilities are either lacking or very expensive;

• limits excessive repatriation costs ($60,000

– $100,000 plus); and

• enhances the chance of safe, happy enjoyable

travel.

Travel health has been targeted as a priority

business area for the future, with an offer made

by HSA to acquire the travel health services

company, Travellers Medical and Vaccination Centre

(TMVC). During the year, funding for marketing

and promotional activities was also increased,

development of travel health informational materials

became a priority, and a revamp of the HSA website

included a major focus on travel health.

Acquisition: travel health received a major boost

with HSA making an offer to acquire Australia’s

leading provider of travel health services, TMVC;

TMVC is represented in every Capital City as well as

a number of regional centres; the acquisition, to be

fi nalised in 2001–02, enhances our ability to provide

travel health services nationwide.

Promotion: successful marketing activities

undertaken at State and Territory level included

direct mail campaigns, presentations to travel

agencies and attendance at travel seminars.

Website: to better meet client needs and add value

to our services, a complete re-design and upgrade of

HSA’s website (www.healthoz.com.au) was

undertaken; travel health was a major focus of the

revamp and the new site contains essential travel

health service information and news, plus free

travel-related fact sheets.

DVT: travel-related blood clots, deep vein

thrombosis (DVT), developed as a signifi cant health

issue this year; as part of our advisory and educative

role, developed a fact sheet on DVT and are in the

process of developing a questionnaire to assess

individual travellers’ risk and provide appropriate

preventative advice.

Travel Accessories: developed a basic traveller’s

fi rst aid kit which can be tailored to specifi c needs

by the addition of items based on destination and

individual traveller health; kits can be ordered from

any HSA offi ce.

HSA specialises in protecting the health of international business travellers


HSA conducts independent medical assessments on

behalf of Centrelink to assist in determining medical

eligibility for the Disability Support Pension (DSP) and

Sickness/Newstart Incapacity Allowance. These

benefi ts are paid by the Commonwealth Government

to people who are assessed as having a continuing

inability to work due to a signifi cant physical, mental,

intellectual or sensory impairment.

HSA continues to implement measures to make our

service delivery more fl exible and cost-effective and

to enhance the quality, consistency and turnaround of

assessments. The impact of these measures saw HSA

well positioned in 2000–2001 to respond to and meet

client needs in a rapidly changing market.

Tender: Centrelink tendered eligibility assessment

business in areas Brisbane, North and Central

Queensland and West Victoria, representing 20%

of Centrelink’s total assessment business; HSA

won the tender, resulting in retaining metropolitan

Brisbane business and winning back work in areas

which had been lost in a 1997 tender.

Contract: HSA and Centrelink signed an 18 month

contract covering all eligibility assessment business

including the newly tendered work; the contract runs

to June 2002.

Innovation: completed a pilot project to streamline

service to Centrelink and avoid work duplication by

providing a dedicated HSA team working on-site at

Centrelink’s Noarlunga offi ce in SA; a key benefi t of

the pilot was a halving of assessment and reporting

times, as well as providing a more fl exible and

accessible service to Centrelink customers; the

results are being reviewed with the possibility of

rollout to other states and territories.

Partnership: HSA continued to partner Centrelink

in the training and development of their staff. HSA

doctors conducted seminars and training sessions

to assist Centrelink offi cers to better understand

certain medical components of the assessments.

Impairment Guide: HSA was requested by the

Department of Family and Community Services to

develop a detailed Guide to the Impairment Tables.

This was done by a HSA Brisbane doctor who

also presented training sessions on the Guide to

Centrelink offi cers across the country.

Centrelink assessments

Centrelink South Australia and HSA have worked hard to establish an effective partnership which delivers results for our customers and the taxpayers of Australia. This partner-ship is characterised by mutual respect, openness and understanding of each others business needs � and it works


Immigration services

People who want to migrate to Australia or reside

temporarily for longer than 12 months must undergo

comprehensive health checks to ensure they meet

Australia’s health standards. In particular, applicants

must be free of active tuberculosis (TB).

Health checks, which generally include a medical

examination and chest x-ray to detect TB, are conducted

on migrants either in their country of residence or, for

those already in Australia, onshore in Australia.

Onshore examinations are performed by HSA doctors.

Examinations outside Australia are conducted by panel

doctors and radiologists. Where local clearance at the

overseas Department of Immigration and Multicultural

Affairs (DIMA) offi ce is not possible, these reports and

x-rays are sent to the DIMA Health Assessment Service

(HAS) for evaluation. HSA manages DIMA’s HAS.

Since December 1999, HSA has also been involved

in conducting health screening checks on detainees

at Woomera, Port Hedland and Curtin detention

centres, with around 7,000 assessments undertaken

since January 2000 to date. The emphasis of the health

screening is on public health conditions.

In total, HAS conducted approximately 87,000 migrant

and student examinations during this fi nancial year.

Highlights include:Integrity and Quality: the integrity and quality of

medical assessments is vital to DIMA. Requirements

were formalised between DIMA and HSA on

1st December 2000; conditions of the contract serve

to enhance the integrity, quality and timeliness of

assessments and reporting, and further enhance client

liaison, service and communication. Specifi c measures

introduced during the year included passport checking

to improve integrity, a successful trial of secure

remote IT access to health results by authorised

DIMA staff and improved procedures for clients in

rural and regional Australia.

Detainees: medical assessments and x-rays were

undertaken on around 4,000 detainees during this

fi nancial year, mainly from Afghanistan and Iraq; the

vast majority of assessments were conducted at

remotely located detention centres in WA and SA

against tight deadlines. A number of cases of active

TB and other conditions of public health concern

were identifi ed and treated.

International student examinations: demand for

health assessments on international students rose 20%

on last fi nancial year; HSA continued to adopt a fl exible

approach to cope with demand, including weekend and

evening openings and employing additional medical

and administrative staff at peak times; in all around

38,000 student assessments were undertaken.

Health Assessment Service (HAS): HSA manages

HAS on behalf of DIMA; continued to effectively

manage increasing demand (20% increase over three

years) within a static budget; staff maintained a fi ve

day turnaround in assessing medical fi les; in all more

than 90,000 cases were assessed and reported to

overseas DIMA offi ces.

Chest x-rays for Australian Visa applicants are conducted �on-site� at HSA Parramatta OfÞ ce


A major HSA business imperative is to retain and grow business with existing clients, while striving to expand our client base. We achieve this by placing client requirements at the centre of all business activities, and working to not only meet, but exceed, client expectations.

As the fi rst national health services company in Australia to achieve quality certifi cation to the ISO 9000 series of Standards, HSA has continued its commitment to providing the highest standard of client service, with all 13 offi ces now proudly displaying the quality assured logo.

The HSA Intranet is a valuable quality tool, providing direct access for all employees to our quality documentation, including policies, procedures, guidelines and other company information. During the year, our Intranet technology was upgraded to provide improved speed and access for staff, thus assuring our clients of a consistently high standard of service across the nation.

Development of our Quality Management System will continue to progress in the new fi nancial year. We will explore options to further enhance the utilisation of our Intranet and streamline our internal quality audit process to ensure that our systems remain relevant and effective, as we work towards achieving our triennial re-certifi cation to the recently released ISO 9001:2000 Standard for Quality Management Systems.

WebsiteTo better meet client needs and add value to our

services, we undertook a complete re-design and

upgrade of our website (www.healthoz.com.au).

The new website offers a number of free services:

• workplace and travel health news

• feature articles

• fact sheets

• subscription to HSA’s newsletter, Pulse.

It also contains more detailed information about

HSA, who we are, what we do, our people, to assist

our clients and potential clients better understand

us and our business.

This upgrade is phase one of a three phase website

strategy which, following an evaluation period,

will see phase two introduce greater interactivity,

leading in phase three to comprehensive E-business

capabilities.

National Operations ManagerHSA’s unique position as the only organisation in

Australia offering a truly national one-stop-shop in

health assessments, OH&S and travel health

services, has seen us increase our national client

base, as well as the range of services provided.

An essential requirement of national clients is

consistency in service delivery across Australia.

In order to ensure this, HSA established the position

of National Operations Manager in September 2000.

A central function of the National Operations

Manager is to develop and implement processes and

procedures to ensure national consistency in training,

service delivery and IT networks, and assume overall

responsibility for national project management.

Information TechnologyDuring this fi nancial year we introduced a new,

improved human resources management system,

upgraded our intranet and revamped our website.

In addition, HSA continued working towards the

successful development and implementation of an

improved IT system to manage our appointment

making and health assessment processes. The aim

is to eventually have in place a system tailored

to our unique needs, and one which allows clients to

tap directly into our network to make appointments,

track progress of cases and which facilitates

comprehensive E-business activities.

Extensive effort has gone into designing such a

system, with roll-out anticipated in 2001–2002.

The end result should be enhanced client service

with more effi cient and timely appointment making,

and therefore faster reporting, greater accessibility

and a decrease in administrative workload with the

introduction of on-line payments.

excellence, innovation and integrity in health

Business innovation

HSA offers a national one-stop-shop in health assessments, OH&S and travel health services


Our people

Client FocusedThrough our workforce of more than 450, we strive to provide the highest quality, cost effective services.

This is made possible by having motivated, professional staff focused on our clients and their needs.

We have a diverse workforce – medical specialists, administrators, allied health professionals, marketers,

fi nance and IT experts. Our professional staff have specifi c training and expertise in workplace health and

international travel health, and includes occupational physicians and nurses, psychologists, physiotherapists

and occupational therapists.

TeamworkHSA draws on this diversity, assembling teams with the right skills mix to most appropriately and effectively

meet specifi c project and client needs. This was particularly evident in the establishment of Gulf War Health

Study teams in every HSA offi ce, ensuring high quality, nationally consistent services.

Our team approach means clients are assured of realistic, appropriate outcomes with the close involvement of

our medical staff in both project planning and execution. The professionalism and client focus of our specialists

is mirrored throughout HSA staff, ensuring seamless delivery of services from the moment a client fi rst

engages us to delivery of a fi nal report.

Teamwork is the key to our success

’I enjoy liaising with clients and clinicians to ensure that we provide a nationally consistent, high quality service.‘

Dr Barbara Bell, HSA Lead Medical Practitioner.


Training & developmentTo continue to provide high quality services and

attract the best employees, HSA is committed to

on-going training and professional development.

Throughout the year a range of training programs

were undertaken with medical, management and

administration staff. These included sessions on

leadership, marketing and IT innovation.

Medical and nursing staff also attended various

occupational health conferences to enhance their

clinical knowledge and skills and facilitate

networking and information sharing. Staff involved in

the Gulf War project participated in intensive initial

and ongoing training programs focused on ensuring

that all medical and psychological tests and

examinations were nationally consistent, meeting

the rigorous standards set for the study.

Workplace RelationsNegotiations to develop the Company’s third Certifi ed

Agreement were completed with unions in the latter

half of the fi nancial year. The revised agreement has

been accepted by staff and is awaiting certifi cation

by the Australian Industrial Relations Commission.

Highlights of the new agreement include;

• 5% across the board salary rise in 2001–2002

and a 4% rise in 2002–2003 (this follows a

2% rise in 2000–2001);

• coverage extended to people employed under

contract;

• introduction of a centralised professional

development fund; and

• establishment of a medical ethics committee.

HSA also fi nalised negotiations with the Australian

Medical Association (AMA), to establish a medical

practitioners’ award.

IT InnovationA new human resources management system,

Complete Human Resource Information System

(CHRIS), was introduced to streamline pay processes

and enable the development of more analytical

management reports, leading to better people

management. An upgrade of our intranet resulted

in improved internal communication and enhanced

national consistency in policy and procedures.

Staff SurveyA staff survey was undertaken towards the end of

the fi nancial year. The survey seeks to measure how

HSA is developing as a Company and to identify

ways to further improve performance and process

and make the Company a better place to work.

Diversity Management HSA is committed to equal opportunity in the

workplace. During the year the Company continued

developing its workplace diversity program,

including in the Certifi ed Agreement a commitment

to provide the conditions necessary for developing

skills, obtaining training and balancing work and

family issues.

Our team approach means clients are assured of realistic outcomes with close involvement of our medical staff

State and Territory news

It was a busy, challenging and profi table year for HSA offi ces across Australia. Strong service growth,

particularly evident in health assessments and immigration services, was a direct result of a continuous

nationwide effort to produce quality, innovative services.

This was further enhanced and supported by our highly qualifi ed teams – medical, managerial and

administrative – whose professionalism and client focus ensure seamless service delivery from Wollongong

to Woomera and Melbourne to Perth.

The introduction of two new services had a major impact on business across most offi ces. A national study

into the health of Gulf War veterans led to the establishment of dedicated Gulf War health assessment teams

in every HSA offi ce, while a Defence Recruitment pilot, managed in conjunction with Manpower Australia,

resulted in extremely demanding but satisfying work for offi ces in Victoria and Tasmania.

Minimising infectious diseases in the workplace (inß uenza, Q Fever, hepatitis)


New South WalesAcross the board, NSW offi ces experienced

exceptional growth in both service volume and

revenue. A key factor involved in the NSW success

was the commitment from staff to demonstrate

the organisation’s ability to supply high quality

health services.

This dedication resulted in an increase in new

business, a rebuilding of client relationships, service

innovation and

implementation of

highly successful

promotional

activities. These

advances were

strengthened by the

appointment of a

NSW marketing

manager.

Sydney • Demand for immigration services increased

considerably; we continued to introduce

client focused initiatives to cope with demand,

including establishments of two in-house

call centres to handle enquires and make

appointments.

• Gulf War Health Study was a major project; we

invested heavily in training a number of staff to

manage the project, equipping us to provide a

fl exible and responsive service.

• An extensive fi t-out and refurbishment of offi ce

space was undertaken to facilitate service delivery

and effi ciency and enhance client comfort.

• Completed a process which began last fi nancial

year to consolidate Sydney services from two

sites (Elizabeth St and Surry Hills) into one offi ce

at Surry Hills; as of October 2000, all services had

been successfully transferred.

• Achieved ISO9002 certifi cation.

Parramatta• Expanded the 5 star Corporate Good Health

program, which offers cholesterol, blood sugar,

and Body Mass Index (BMI) assessments, to

include bone density testing to assess risk of

osteoporosis; this testing is conducted using a

portable machine, enabling us to offer our

enhanced service on-site.

• Developed a medical terminology course to

assist our clients read and better understand

medical reports; it has proved highly successful

with Centrelink NSW and may be expanded

throughout Australia.

• Conducted call centre stress audits on behalf of

the Department of Family and Community

Services to help employees better understand

and manage workplace stress; this is the fi rst

time such a program has been run in Australia,

and it is anticipated that it will be rolled out

across the Nation.

• Conducted a highly successful infl uenza

campaign, more than doubling the number of

vaccinations given compared to last year; key

factor in program growth was promotional work

undertaken by the NSW marketing manager.

• To better meet client needs and service business

growth, expanded specialist team with the

addition of three doctors, a sessional psychiatrist

and a full-time psychologist.

• Achieved ISO9002 Quality Assurance

Certifi cation.

Newcastle• Strong growth in Occupational Health and

Safety (OH&S) services, mainly in pre-

employment assessments, consulting services,

vision screening and audiograms.

• Specialist health team strengthened with the

addition of an in-house doctor and psychologist

to help service the increased volume of work.

• Entered a strategic agreement with a major

Australian travel health organisation, Travel

Medicine and Vaccination Centre (TMVC).

TMVC did not have the facilitates to service

Newcastle business.

• Building on efforts from last fi nancial year,

consolidated and strengthened working

relationship with Centrelink.

Wollongong• Undertook a comprehensive travel health

marketing campaign, including attendance at

local travel expos, briefi ngs to local travel agents,

and regular emailing of travel health information

and updates to a network of travel agencies.

• Together with HSA Newcastle, provided travel

health services on behalf of the travel health

organisation, TMVC.

• OH&S growth was based on service and product

innovation, including introduction of ergonomic

information sessions and the development of

pre-employment assessments tailored to specifi c

industries and tasks.

• Following successful marketing efforts of nursing

staff, experienced a doubling of infl uenza

vaccinations compared to last fi nancial year.

• Strengthened specialist team with the addition

of a part-time psychologist; our psychologist

developed a program to help call centre staff

manage diffi cult calls, including unexpected

suicide calls.

• Successfully underwent an independent, external

Quality Assurance audit.

Victoria• Important player in an Australian Defence

Force (ADF) pilot to trial outsourcing of defence

recruiting in Victoria and Tasmania; our role

involves conducting medical assessments on

potential recruits; the project has a major impact

on workload and required the establishment

of an HSA offi ce within the ADF to facilitate

the process.

• Conducted a highly successful infl uenza

vaccination campaign, delivering on-site

vaccinations to more than 8,000 employees; our

accomplishment was linked to fl exibility in

service delivery, including matching the timetable

of shift workers.

• Experienced strong growth in OH&S consulting

services linked to a number of new projects

including, infection control training, health

promotion schemes and work for the Public

Transport System; in order to effectively manage

this growth and plan for the future, employed a

Senior Medical Adviser with sole responsibility

for OH&S.


• Initiated a range of internal changes to improve

client service including: creating two new

positions, Client Services Manager and Customer

Relations Manager; and restructuring Centrelink

service teams.

• To successfully meet the demands of Centrelink

business growth, introduced Saturday clinics,

and undertook a successful recruitment drive

for doctors.

• Following the appointment of the previous

General Manager (GM) to National Operations

Manager, employed a new GM with a strong

background in medical administration, including

senior management positions in the private

hospital system.

South Australia • Strong OH&S growth resulted largely from

winning work with major new clients in the telco,

mining, energy, manufacturing and retail sectors.

• Following concerted marketing efforts,

experienced signifi cant growth in volume of

independent psychological assessments

undertaken for private sector clients; majority of

assessments concerned Fitness for Duty and

compensation claims.

• Developed relationships with local vocational

rehabilitation providers enabling us to offer

clients a complete range of OH&S services from

recruitment to retirement; the relationships

helped us secure business (functional capacity

evaluations and psychological assessments) with

two national organisations.

• Continued to conduct health screenings on

detainees at the Woomera detention centre;

despite much tighter deadlines than in the

previous year, HSA successfully managed to

screen approximately 1,000 detainees within

the required timeframe.

• Completed a highly successful pilot to streamline

service to Centrelink and minimise work

duplication; the pilot involved providing a

dedicated HSA team on-site at Centrelink’s

Noarlunga offi ce and led to a halving of

turnaround times in assessment and reporting;

the results are being reviewed with the

possibility of expanding the program nationally.

Queensland• Collaborated on a national Centrelink tender;

HSA won the tender; the result meant HSA

Queensland retained Brisbane business and won

back work it had lost in a previous tender.

• Played a central role in winning a national tender

to undertake health assessments on F111 crew

involved in fuel tank maintenance; the project,

undertaken on behalf of the Departments of

Defence and Veterans’ Affairs, will roll out

nationally next fi nancial year, with the majority

of assessments expected to be conducted in

Queensland.

• Concentrated on tailoring services to best meet

individual client needs; this involved developing

a number of task specifi c pre-employment

medical assessments including one for a funeral

services organisation, focusing on lifting and

hearing; specifi cally targeted assessments result

in a better job-person fi t and decrease the risk

of compensation claims.

• Introduced a new type of psychological

assessment for executive recruitment; aside

from assessing personality and psychological

traits, the new assessment also looks at literacy

and numeracy skills, offering a new tool in

executive recruitment.

• Provided pre and post deployment medical

assessments to Australian Federal Police serving

in East Timor; HSA also provided vaccinations,

anti-malarial treatments and health advice.

• Following a request from the Australian

Customs Service for advice to help them

better manage shift workers, commissioned a

project on shift work; research was undertaken

by a HSA Occupational Physician, with the

results being used to develop a shift work

management protocol.

Western Australia• Meeting increasing demand, continued to

provide a rapid response service to undertake

health assessments on detainees in Port

Hedland and Curtin detention centres; this

service requires medical personnel to travel

thousands of miles and work in extremely

demanding conditions against tight deadlines.

• Expanded services to DIMA to include:

establishment of a radiology service on-site

at Derby, resulting in a signifi cant improvement

in turn around time in delivery of x-ray and

radiology services to DIMA; vaccinations

and health advice to DIMA staff working at

detention centres; and, provision of

specialist medical counsel to handle acute

public health issues.

• Gulf War Heath Study was a high priority;

invested heavily in training a large number of

staff to conduct assessments, enabling us to

provide a more fl exible and responsive service,

including weekend openings.

• In conjunction with Melbourne offi ce, WA

in-house trainee occupational physician

developed an acoustic shock (audioshock)

service, combining information and training

seminars to help employers understand and

manage the condition.

• Developed a basic travellers’ fi rst aid kit which

can be tailored to specifi c needs by the addition

of items based on destination and individual

traveller health; travel kits are supplied by WA

to other HSA offi ces.


Tasmania• Along with Victoria, involved in conducting

medical assessments as part of the ADF pilot to

trial outsourcing of defence recruiting; the project

required the employment of additional doctors,

nurses and administration staff.

• In September, the Hobart offi ce moved into

larger premises in the CBD; the premises are

housed in a building owned by HSA, which was

refurbished to meet work place needs; the

new offi ce provides double the number of

examination rooms.

• As a result of concerted marketing efforts, ran

a highly successfully infl uenza vaccination

program topping last year’s fi gures; marketing

activities saw us maintain previous clients and

open new markets.

• Employed an in-house Occupational Physician to

work between the Hobart and Launceston offi ces,

initially servicing mostly military compensation

and insurance clients.

Australian Capital Territory• Strong OH&S growth, particularly in pre-

employment assessments, vision screening,

audiograms, and psychological assessments,

resulted from expanding business with existing

clients, and winning new contracts.

• In order to service the demand of the Gulf War

Health Study, employed a psychologist and

additional nurse to form part of a dedicated

Gulf War team which also includes doctors and

administrative personnel.

• Introduced a range of initiatives to add value to

services and ensure we continue to provide a

superior service: took over administrative tasks

usually performed by our clients; enhanced

communication via increased face-to-face liaison

at executive level; and established agreed

guidelines to benchmark our services.

• Purchased an ultrasound bone density machine

to measure bone strength and assess risk of

osteoporosis; the machine is portable enabling

service delivery to both the ACT and surrounding

regional areas; the service represents a

broadening of OH&S capabilities and will be

marketed in the new fi nancial year.

• To aid in effi ciency and effective service delivery,

established two new executive positions,

Director of Medical Services and Nurse Manager;

the Medical Director has a key role in client

liaison; the Nurse Manager‘s role has a

marketing focus; both are also involved in direct

service delivery.

• To enhance understanding of our clients’

business and provide the most appropriate

counsel, established a program in which clients

were invited to address HSA medical staff on

what tasks/activities their employees undertake

on a daily basis.

Northern Territory• Exceptional growth in OH&S services due mainly

to work undertaken for Telstra’s Best of Health

Program and increased demand for audiograms

and psychological services.

• Conducted post-deployment medical

assessments on Australian Federal Police offi cers

returning from service in East Timor; the

assessments were conducted as soon as possible

following arrival in Australia, usually in groups of

50–100 over a two day period.

• Invited by Telstra to manage the Family Fun Day

event, held annually as part of Telstra’s Best of

Health Program; HSA coordinated all activities

for the Darwin event; HSA held a stand for the

day offering blood pressure readings and weight

analysis.

• Following a request from DIMA last fi nancial

year, continued to conduct medical assessments

on illegal immigrants to assess their fi tness for

onward travel to detention centres in SA and

WA; these exercises require fl exibility and their

success lies in the high degree of co-operation

between government departments, Australian

Federal Police and HSA.

• Employed an in-house psychologist and second

medical adviser to better service client needs.


Gulf War Health StudyIn the decade since the Gulf War a relatively high proportion of Australia’s 1,872 Navy, Army and Air Force

personnel sent to the Gulf have lodged sickness claims, compared with veterans from other confl icts. A similar

phenomenon has occurred amongst British, American and Canadian veterans.

In response, the Departments of Veterans’ Affairs and Defence commissioned the most comprehensive Gulf

War health study ever. While many studies have been conducted overseas, this is the fi rst study involving

medical, psychological and exposure assessments of such depth and complexity.

HSA, in partnership with Monash University, was successful in tendering to conduct the Study, thereby opening

up a new, exciting service area for the Company.

The study, designed by Monash University, investigates whether Australia’s Gulf War veterans have a higher

than expected rate of adverse health effects and, if so, whether these can be associated with environmental,

chemical or combat related exposures during the Gulf War.

HSA is responsible for conducting medical and psychological assessments on the Gulf War veterans and a

control group of Defence Force personnel employed at the time of the war but who did not go to the Gulf.

The results are forwarded to Monash University for analysis.

Our unparalleled experience in health assessments, combined with our independence and extensive national

network puts us in a unique position to meet the critical demands of such studies for in-depth medical

assessment embodying internationally certifi ed quality procedures which ensure national consistency. This has

been enhanced with the establishment and training of dedicated Gulf War study teams in every HSA offi ce.

Our commitment, both in terms of time and personnel, has been enormous but extremely rewarding. To date,

75% of Australia’s Gulf War veterans have either been assessed or agreed to participate. Two thousand of the

targeted 3,000 plus assessments had been completed at the end of the fi nancial year.

The testing phase of the Study is due to fi nish in November 2001 with analysis and a fi nal report to the

Departments of Veterans’ Affairs and Defence to follow.

’I hope that my participation in the Gulf War Veterans’ Health Study will help in developing programs to support our Gulf War Vets.‘Mr Alan Adams


Dr Michael Pincus, MBBS20 October 1951 – 30 June 2001

The HSA Board, Management and staff would like to pay a special tribute to Dr Michael Pincus.

Michael was a key contributor to HSA’s innovations in service delivery, growth and change management, and

a driving force in the evolution of HSA from a branch of the Federal Department of Health to a highly successful

government business enterprise.

He was held in the highest esteem by all who knew and worked with him. He was a person of great generosity

of spirit, unstinting in sharing his information and knowledge. He was a man of integrity, who loved the

intellectual challenges of his work.

Michael began his distinguished 20-year career in public health in Canberra, including working for Australian

Government Health Services and HSA. He rose to become HSA National Business Manager and General

Manager of South Australian operations, where he earned a reputation as a dynamic leader, respected by

colleagues and clients alike.

We miss his wonderful sense of humour, his laughter and hugely infectious smile that lit up his face. We miss

his imagination, his ideas, his experience. We share his family’s loss and celebrate our memories of a man

who made a difference to all who knew him.



LegislationHealth Services Australia was incorporated

on 17 June 1997 under the Corporations

Act 2001. The Company is also subject to the

Commonwealth Authorities and Companies

Act 1997. Functions, assets and liabilities of the

Australian Government Health Service were

transferred to the Company on 1 July 1997

under the Hearing Services and AGHS Reform

Act 1997.

Health Services Australia is a public company

limited by shares, incorporated in Australia.

The registered offi ce is located at Level 1,

15 Bowes Street, Woden, ACT, 2606.

Responsible MinisterThe Honourable John Fahey, Minister for

Finance and Administration and Senator

The Honourable Grant Tambling, Parliamentary

Secretary to the Minister for Health and

Aged Care have responsibility for Health

Services Australia.

Directors’ InterestsNo director holds shares or options in the Group.

Directors’ MeetingsThere were 12 Board and 4 Audit Committee

meetings held between 1 July 2000 and

30 June 2001. The following table shows the

number of meetings the Directors attended

during the fi nancial year:

Mr Rae Taylor AO BEc (Hons) Sydney University Chairperson and Independent Non-Executive DirectorAge 66

A Director of Maersk Australia Pty Ltd

and a Deputy Chairperson of the

National Road Transport Commission

(NRTC). Formerly Managing Director of

Australia Post. Mr Taylor has also

served as Secretary of a number of

Commonwealth government

departments. Mr Taylor is the

Chairperson of the Audit Committee

and the Board Nominations and

Remuneration Committee. Appointed

26 June 1997. Current term expires

21 September 2003.

Mr Warwick Wilkinson AM RFD ED Hon Mpharm (Syd), FPS Independent Non-Executive Director Age 70

Mr Wilkinson was previously Director

External Affairs for Merck Sharp &

Dohme (Australia) Pty Ltd. Formerly the

Chairman of the Council of the National

Competition Policy Review of Pharmacy.

Recently appointed as Chairman of the

Review of the Impact of the Trade

Practices Act on Doctors in Rural and

Regional Australia. Currently a part time

ACCC Associate Commissioner.

Appointed 15 December 2000. Current

term expires 12 September 2003.

Dr Sue Morey AM MB BS (Syd), MPH (Harvard), FRACP, FAFPHM, FRACMA, FAICD Independent Non-Executive Director Age 58

Director of consultants Morey Australia

Pty Ltd. Formerly Chief Health Offi cer

and Executive Director, Public Health,

NSW Department of Health. Appointed

26 June 1997. Current term expires

21 March 2004.

Mr Richard Basham FCA, SIA(Aff) Independent Non-Executive Director Age 63

Formerly Managing Partner of the

Perth offi ce of Grant Thornton, an

international fi rm of chartered

accountants. Mr Basham has extensive

fi nancial and business consulting

experience in the private sector.

Mr Basham is a member of the Audit

Committee and the Board Nominations

and Remuneration Committee.

Appointed 26 June 1997. Current

term expires 21 September 2004.

Ms Vanessa FanningBA (Melb), BEc (ANU), FAICD, FAIM Managing DirectorAge 51

Managing Director of Health Services

Australia since 1998. Chairperson of

Work Solutions Group Pty Ltd from

1 July 1999. Group Manager Public

Policy at TNT 1995–97. Previously

12 years experience at senior

management level in the federal

Department of Transport and

Communications. Appointed

18 December 1998. Current term

expires 9 February 2003.

Ms Rebecca James BEc, GDPPM Independent Non-Executive Director Age 47

Ms James has broad experience as a

health consultant, with formal

qualifi cations in economics and public

policy. Ms James brings a strong mix

of skills and experience to the Board,

having worked in the public and

private sectors. Ms James operates a

successful consulting business in public

health policy and research. Appointed

25 November 1999. Current term

expires 24 November 2002.

Directors� ReportHEALTH SERVICES AUSTRALIA LIMITED ABN 99 078 934 791 AND CONTROLLED ENTITIES

The Board of Directors of Health Services Australia Limited (Health Services Australia) has pleasure in

submitting its Group report in respect of the fi nancial year ended 30 June 2001.

Board of DirectorsThe names and details of the directors in offi ce during or since the end of the fi nancial year are below.

Unless indicated otherwise, all directors held their position as a director throughout the entire fi nancial

year and up to the date of this report.



Details of the Board Committees are as follows:

1. Audit CommitteeResponsibility –

• oversighting the Internal Audit function;

• monitoring the implementation of internal and

external audit recommendations;

• reviewing management responses to external

audit reports;

• reviewing the fi nal draft of the fi nancial

statements and the audit report prior to the

meeting of the Board to approve the fi nancial

statements; and

• oversighting risk and fraud management plans

and practices.

2. Board Nominations and Remuneration Committee

Responsibility –

• provide Shareholder Ministers with a list of

suitable candidates for Board membership.

The membership of the Committee is the same as

that of the Audit Committee. The committee only

meets on an as required basis.

The Remuneration Tribunal determines the

remuneration for directors of the Company.

Principal ActivitiesThe principal activities of Health Services Australia

during the course of the fi nancial year were the

provision of health assessment and advice services.

No signifi cant change in the nature of these activities

occurred during the year.

Operating ResultsThe profi t of the Group, after providing for income

tax, amounted to $5.8 million.

Dividends Paid or RecommendedThe Company paid the 1999–00 fi nal dividend of

$0.84 million in November 2000. The interim dividend

for 2000–01 of $1.5 million was paid in April 2001

and the Board has recommended a fi nal dividend

of $2.2 million. Total dividends paid/recommended

relating to the 2000–01 fi nancial year total

$3.7 million and represent 63% per cent of the after

income tax net profi t of the Company for that year.

In addition, the Company made payments

totalling $1.2 million (2000: $1.1 million) to the

Commonwealth under the Tax Equivalent Regime in

lieu of State taxes.

Review of OperationsA review of Health Services Australia’s operations is

contained in the Message from the Board.

StaffAs at 30 June 2001, the Company employed a total

of 454 staff.

Signifi cant Changes in State of AffairsSignifi cant changes in the state of affairs of the

Company that occurred during the fi nancial year and

reported in the fi nancial statements were:

• the provision of Occupational Health services to

approximately 2000 Gulf War veterans Australia

wide for the Department of Veteran Affairs and

participation in the Department of Defence

Recruitment Pilot in Victoria and Tasmania;

• a net increase in shareholder value from

$15.5 million to $17.7 million; and

• commencement of replacement strategy for a

core information technology system.

Events Subsequent to Balance DateOn 31 August 2001, the Company agreed to

acquire a 100% interest in TMVC The Travel Doctor

Group for consideration of $1.38 million. The event

has no effect on the fi nancial statements for the

year ended 30 June 2001.

No other matters or circumstances, except those

stated above, have arisen since the end of the

fi nancial year which signifi cantly affected or may

signifi cantly affect the operations of the economic

entity, the results of those operations, or the state

of affairs of the economic entity in subsequent

fi nancial years.

Likely Developments and Future ResultsThe likely developments in the operation of the

Group and the expected results of those operations

in fi nancial years subsequent to the year ended

30 June 2001 are as follows:

(i) to continue our focus on providing quality

customer service;

(ii) continue on our program of reform designed

to position the Group as a ‘best practice’

provider; and

(iii) to expand and diversify our client and service

base.

Environmental IssuesThe Company’s operations are not regulated by

any signifi cant environmental regulations under a

law of the Commonwealth or of a State or Territory.

OptionsNo options over issued shares or interests in

the Group were granted during or since the end

of the fi nancial year and there were no options

outstanding at the date of this report.

Directors’ Remuneration and Benefi tsRemuneration and allowances for directors

of the Company are determined by the

Commonwealth Remuneration Tribunal, an

independent statutory body.

The remuneration for non-executive directors

is $17,800 a year. The Chairperson receives

$33,800. The Managing Director’s package is set

in consultation with the Remuneration Tribunal

under its advisory jurisdiction. Travel allowances,

also set by the Remuneration Tribunal, are

payable to directors.

Directors receive no benefi ts other than those

stated above and detailed in Notes 25 and 26 of

the fi nancial statements.

HEALTH SERVICES AUSTRALIA LIMITED ABN 99 078 934 791 AND CONTROLLED ENTITIES HEALTH SERVICES AUSTRALIA LIMITED ABN 99 078 934 791 AND CONTROLLED ENTITIES

Director Directors’ Meeting Audit Committee

Number Number eligible to Number eligible to Number attend attended attend attended

Rae Taylor 12 11 4 4

Richard Basham 12 12 4 4

Sue Morey 12 12 – –

Vanessa Fanning 12 12 – –

Rebecca James 12 10 – –

Warwick Wilkinson 6 6 – –


During the fi nancial year the Company has paid a

premium of $17,248 for the insurance of Directors

and Offi cers of the Company. This insurance

coverage insures each full-time executive and

secretary of the Company, against liabilities and

expenses arising as a result of work performed in

their respective capacities to the extent permitted by

law. There have been no claims made pursuant to

the above arrangements.

Signed in accordance with a resolution of the

directors.

Corporate GovernanceThe Company operates within the Governance

Arrangements for Commonwealth Government

Business Enterprises. The Board has also established

an Internal Audit function that provides assurance to

the Audit Committee on a range of operational and

fi nancial activities.

Directors and Auditors Indemnifi cationThe Company has not, during or since the fi nancial

year, in respect of any person who is or has been an

auditor of the Company:

• indemnifi ed or made any relevant agreement for

indemnifying against a liability incurred as an

auditor, including costs and expenses in

successfully defending legal proceedings; or

• paid or agreed to pay a premium in respect of a

contract insuring against a liability incurred as an

auditor for the costs or expenses to defend legal

proceedings.

Mr Rae Taylor AO Ms Vanessa FanningChairman Managing Director

11 October 2001

Directors� DeclarationThe directors declare that:

(a) the fi nancial statements and associated notes:

(i) comply with the accounting standards and Urgent Issues Group Consensus Views; and

(ii) give a true and fair view of the fi nancial position of the Company and consolidated entity as at

30 June 2001 and of their performance for the year ended on that date;

(b) in the directors’ opinion:

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

when they become due and payable and the Company and consolidated entity will together be

able to meet any obligations or liabilities to which they are or may become subject to by virtue

of guarantees provided.

(ii) the fi nancial statements and notes are in accordance with the Corporations Act 2001, including

sections 296 and 297.

Made in accordance with a resolution of the directors.

Mr Rae Taylor AO Ms Vanessa FanningChairman Managing Director

Canberra

11 October 2001

HEALTH SERVICES AUSTRALIA LIMITED ABN 99 078 934 791 AND CONTROLLED ENTITIES HEALTH SERVICES AUSTRALIA LIMITED ABN 99 078 934 791 AND CONTROLLED ENTITIES


HEALTH SERVICES AUSTRALIA LIMITED ABN 99 078 934 791 AND CONTROLLED ENTITIES

STATEMENT OF FINANCIAL PERFORMANCEFOR THE YEAR ENDED 30 JUNE 2001

2000–2001 1999–2000 Notes Consolidated Company Consolidated Company $ $ $ $

REVENUE FROM ORDINARY ACTIVITIES

Sale of health services 52,855,063 48,530,887 44,632,135 40,957,207 Miscellaneous revenue Interest from non-related parties 851,926 851,926 703,319 692,625 Interest from partly owned controlled entity 0 43,245 0 36,569 Other revenue 245,521 251,647 192,618 192,618

Total Revenue from Ordinary Activities 53,952,510 49,677,705 45,528,072 41,879,019

EXPENSES FROM ORDINARY ACTIVITIES

Employee related expenses 28,981,317 25,813,960 25,206,226 22,589,069 Supplier related expenses 12,266,701 11,338,849 11,798,946 10,822,888 Depreciation/Amortisation 2 1,827,209 1,607,669 1,752,252 1,580,812 Rental expense on operating leases 1,894,618 1,872,202 2,293,442 2,165,988 Items of signifi cant interest 3 0 0 1,157,040 1,154,040

Total Expenses from Ordinary Activities 44,969,845 40,632,680 42,207,906 38,312,797

BORROWING COSTS 26,209 0 1,936 0

Profi t from ordinary activities before income tax expense 2 8,956,456 9,045,025 3,318,230 3,566,222

Income tax expense attributable to ordinary activities 4 (3,179,158) (3,179,158) (1,321,145) (1,321,145)

Net profi t 5,777,298 5,865,867 1,997,085 2,245,077

Less: Net profi t/(loss) attributable to outside equity interests 18 (23,910) 0 (103,621) 0

Net profi t attributable to members of the parent entity 5,801,208 5,865,867 2,100,706 2,245,077

Total changes in equity other than those resulting from transactions with owners as owners 5,801,208 5,865,867 2,100,706 2,245,077

The accompanying notes form part of these fi nancial statements


STATEMENT OF FINANCIAL POSITIONAS AT 30 JUNE 2001


CURRENT ASSETS

Cash Assets 936,601 936,938 594,821 652,281 Receivables 7 5,293,851 4,259,230 5,601,172 4,886,425 Other Financial Assets 8 2,990,588 2,990,588 4,502,754 4,502,754 Other 9 365,056 358,095 248,466 246,390

Total Current Assets 9,586,096 8,544,851 10,947,213 10,287,850

NON-CURRENT ASSETS

Receivables 7 0 585,000 0 585,000 Other Financial Assets 8 13,015,545 13,530,545 8,002,017 8,517,017 Property, Plant and Equipment 10 7,436,588 6,982,625 6,401,947 6,040,973 Intangibles 11 325,999 0 366,749 0 Deferred Tax Assets 4 382,268 382,268 582,793 582,793 Other 9 0 0 10,825 10,825 Total Non-Current Assets 21,160,400 21,480,438 15,364,331 15,736,608 Total Assets 30,746,496 30,025,289 26,311,544 26,024,458

CURRENT LIABILITIES

Payables 12 4,149,047 3,688,349 3,697,529 3,502,027 Interest Bearing Liabilities 13 210,519 0 56,436 0 Provisions 14 3,392,699 3,274,790 2,427,162 2,354,881 Tax Liabilities 4 1,892,870 1,892,870 1,341,173 1,341,173 Other 15 91,248 91,248 84,978 84,978 Total Current Liabilities 9,736,383 8,947,257 7,607,278 7,283,059

NON-CURRENT LIABILITIES

Interest Bearing Liabilities 13 133,890 0 79,554 0 Provisions 14 2,790,441 2,763,191 2,659,623 2,635,820 Deferred Tax Liabilities 4 101,813 101,813 43,288 43,288 Other 15 534,282 534,282 549,412 549,412 Total Non-Current Liabilities 3,560,426 3,399,286 3,331,877 3,228,520 Total Liabilities 13,296,809 12,346,543 10,939,155 10,511,579 NET ASSETS 17,449,687 17,678,746 15,372,389 15,512,879

EQUITY

Contributed Equity 16 13,266,522 13,266,522 13,266,522 13,266,522 Retained Profi ts 17 4,203,194 4,412,224 2,101,986 2,246,357 Parent entity interest 17,469,716 17,678,746 15,368,508 15,512,879 Outside equity interests in controlled entities 18 (20,029) 0 3,881 0 Total Equity 17,449,687 17,678,746 15,372,389 15,512,879 The accompanying notes form part of these fi nancial statements



STATEMENT OF CASH FLOWSFOR THE YEAR ENDED 30 JUNE 2001


CASH FLOWS FROM OPERATING ACTIVITIES

Receipts from customers 57,486,677 53,310,288 47,865,396 44,474,238 Payments to suppliers and employees (44,048,374) (40,265,677) (38,552,533) (34,969,882) Payments of GST (2,823,441) (2,611,941) 0 0 Interest received 916,279 936,176 660,870 667,837 Interest paid (49,557) 0 (20,844) 0 Payments of income tax (2,368,114) (2,368,410) (766,279) (749,625)

Net cash provided by (used in) operating activities 24(b) 9,113,470 9,000,436 9,186,610 9,422,568

CASH FLOWS FROM INVESTING ACTIVITIES

Proceeds from sale of property, plant and equipment 44,466 23,466 2,110 2,110 Investments in controlled entities 0 0 (400,000) (515,000) Loans to controlled entities 0 0 0 (585,000) Loans to directors 0 0 53,759 0 Purchase of property, plant and equipment (3,164,510) (2,879,180) (2,647,096) (2,403,825) Net redemption/(purchase) of investments (3,520,065) (3,520,065) (4,175,311) (4,175,311)

Net cash provided by (used in) investing activities (6,640,109) (6,375,779) (7,166,538) (7,677,026)

CASH FLOWS FROM FINANCING ACTIVITIES

Dividends paid by parent entity (2,340,000) (2,340,000) (1,810,000) (1,810,000) Loans 208,419 0 (113,562) 0

Net cash provided by (used in) fi nancing activities (2,131,581) (2,340,000) (1,923,562) (1,810,000)

NET INCREASE/(DECREASE) IN CASH HELD 341,780 284,657 96,510 (64,458)

Cash at the beginning of the fi nancial year 594,821 652,281 498,311 716,739 Cash at the end of the fi nancial year 24(a) 936,601 936,938 594,821 652,281

The accompanying notes form part of these fi nancial statements


NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2001

Note Contents

1 Statement of Signifi cant Accounting Policies

2 Operating Profi t

3 Items of Signifi cant Interest

4 Taxation

5 Segment Reporting

6 Dividends

7 Receivables

8 Other Financial Assets

9 Other Assets

10 Property, Plant and Equipment

11 Intangibles

12 Payables

13 Interest Bearing Liabilities

14 Provisions

15 Other Liabilities

16 Contributed Equity

17 Retained Profi ts and Dividends

18 Outside Equity Interests

19 Commitments

20 Contingencies

21 Financial Instruments Disclosure

22 Financing Arrangements

23 Particulars in relation to the Controlled Entity

24 Notes to the Statement of Cash Flows

25 Directors’ Remuneration

26 Related Parties

27 Economic Dependence

28 Auditors’ Remuneration

29 Earnings Per Share

30 Events Subsequent to Balance Date



NOTE TO AND FORMING PART OF THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2001

NOTE 1 – STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

The signifi cant policies which have been adopted in the preparation of the fi nancial statements are:

a) Basis of Accounting

The fi nancial statements have been prepared as a general purpose fi nancial report which complies with Australian Accounting Standards, Urgent Issues Group Consensus Views and other mandatory professional reporting requirements, and the Corporations Act 2001.

The fi nancial statements have been prepared on an accrual basis. The fi nancial statements are in accordance with the historical cost convention, and except where stated, do not take into account changing money values. Cost is based on the fair values of the consideration given in exchange for assets.

The accounting policies have been consistently applied by each entity in the consolidated entity and are consistent with those of the previous year.

b) Comparatives

Where necessary, comparative information has been reclassifi ed to achieve consistency in disclosure with current fi nancial year amounts and other disclosures.

c) Principles of Consolidation

The consolidated fi nancial statements include the fi nancial statements of the Company, being the parent entity, and its controlled entity (refer Note 23), referred to collectively as ‘the consolidated entity’. Control exists where the Company has the capacity to dominate the decision-making in relation to the fi nancial and operating policies of another entity so that the other entity operates with the Company to achieve the objectives of the Company.

The balances, and effects on transactions, between controlled entities included in the consolidated fi nancial statements have been eliminated.

Outside equity interests in the equity and results of the entity controlled by the Company are shown as a separate item in the consolidated fi nancial statements.

d) Intangibles – Note 11

Goodwill, representing the excess of the purchase consideration plus incidental costs over the fair value of the identifi able net assets acquired on the acquisition of a controlled entity, is amortised over the period of time during which benefi ts are expected to arise.

Goodwill is amortised on a straight line basis over 10 years.

The unamortised balance of goodwill is reviewed at each reporting date. Where the balance exceeds the value of expected future benefi ts, the difference is charged to the Statement of Financial Performance.

e) Revenue Recognition

Sales of Health Services

Sales of health services comprises revenue earned from the provision of medical assessments for residency applications, government and private enterprise employment and occupational health and safety purposes, and the delivery of advice and vaccinations to Australians travelling overseas. Revenue for reports and services is recognised in the period in which the service is provided, having regard to the proportion of completion of the service at the reporting date.

Interest Revenue

Interest income is recognised as it accrues.

Asset Sales

The profi t or loss on disposal of assets is brought to account at the date an unconditional contract of sale is signed. A net loss on disposal of assets is shown as an expense, while a net profi t on disposal is shown as revenue.

Revenue Received in Advance

Revenue for some services is received in advance of the service being provided. The consolidated entity recognises as a liability any amounts received for which it has not provided the service at reporting date.

f) Borrowing Costs

Borrowing costs include interest, amortisation of discounts or premiums relating to borrowings, amortisation of ancillary costs incurred in connection with arrangement of borrowings and lease fi nance charges. Borrowing costs are expensed as incurred.

g) Income Tax – Note 4

The consolidated entity adopts the income statement liability method of tax effect accounting.

Income tax expense is based on the operating profi t adjusted for permanent differences between taxable and accounting income.

The tax effect of timing differences, which arise from items being brought to account in different periods for income tax and accounting purposes, is carried forward in the Statement of Financial Position as a future incometax benefi t or a provision for deferred income tax. Both balances have been adjusted for the change in the corporate tax rate, from 34% to 30% as at 1 July 2001. Future income tax benefi ts are not brought to account unless realisation of the asset is assured beyond reasonable doubt. The tax effect of capital losses is not recorded unless realisation is virtually certain.

h) Non-Current Assets

The carrying amounts of non-current assets, are reviewed to determine whether they are in excess of their recoverable amount at balance date. If the carrying amount of a non-current asset exceeds its recoverable amount, the asset is written down to the lower amount.

In assessing recoverable amounts of non-current assets the relevant cash fl ows have not been discounted to their present value, except where specifi cally stated.

The consolidated entity does not have a policy of regular revaluation of non-current assets.

i) Receivables – Note 7

Trade debtors are carried at amounts due. The collectibility of debts is assessed at balance date and a general provision made for debts that are doubtful.

j) Other Financial Assets – Note 8

The investment in the controlled entity is carried in the Company’s fi nancial statements at the lower of cost and recoverable amount. Dividends and distributions are brought to account in the Statement of Financial Performance when they are declared by the controlled entity.

The Company invests cash excess to its immediate requirements in a combination of bank bills and fl oating rate notes. These investments are not actively traded and are recorded at the lower of cost and net realisable value. Interest revenue on those investments is brought to account on an accrual basis. Premiums and discounts on acquisition are amortised over the period the Company intends to retain the investment.

k) Property, Plant and Equipment – Note 10

Property, plant and equipment are brought to account at cost, less, where applicable, any accumulated depreciation or amortisation. All property, plant and equipment is recorded at the lesser of written-down value or recoverable value as required by AASB 1010 “Recoverable Amount of Non-Current Assets”. In determining the recoverable value, cash fl ows were not discounted.

In accordance with AASB 1021, the useful lives of property, plant and equipment are reviewed annually, and adjusted where necessary.

Except for leasehold improvements, the Company recognises all acquisitions with an expected life exceeding twelve months and a cost value exceeding $300. Acquisitions with a cost value less than $300 arenot capitalised, but are expensed in the year of acquisition. All expenditure on leasehold improvements has been capitalised where the expected useful life exceedstwelve months.

Costs incurred on property, plant and equipment subsequent to initial acquisition are capitalised when it is probable that future economic benefi ts, in excess of the originally assessed performance of the asset will fl ow to the consolidated entity in future years. Costs incurred on property, plant and equipment which do not meet the criteria for capitalisation are expensed as incurred.




n) Employee Entitlements – Note 14

Wages, salaries and annual leave

The provisions for employee entitlements to wages, salaries and annual leave represents the amount which the consolidated entity has a present obligation to pay resulting from employees’ services provided up to balance date. The provisions have been calculated at undiscounted amounts based on current wages and salary rates and include related on-costs.

The portion of the provision for annual leave that is current has been determined using past experience of the actual cost of annual leave taken each year.

Long service leave

The provision for long service leave refl ects the present value of the estimated future cash fl ows to be made in respect of all employees, resulting from employees’ services provided up to balance date. Related on-costs have also been included in the provision. The portion of the provision for long service leave that is current has been determined using past experience of the value of long service leave taken and paid out each year.

Provisions for leave entitlements which are not expected to be settled within twelve months are discounted using rates attaching to notional government securities at balance date, which most closely match the terms of maturity of the related liabilities. In determining the provision for employee entitlements, consideration has been given to future increases in wage and salary rates, and the consolidated entity’s experience with staff departures.

Sick leave

No provision has been made for sick leave. All sick leave is non-vesting and the average sick leave taken by staff is estimated to be less than the sick leave annually accrued.



2000–2001 1999–2000 Consolidated Company Consolidated Company $ $ $ $

NOTE 2 – OPERATING PROFIT

Profi t from ordinary activities after charging/(crediting) the following:

Net (gain)/loss on disposal of property, plant and equipment 20,005 27,454 39,582 35,046 Gross proceeds on disposal of property, plant and equipment (42,966) (23,466) (2,110) (2,110)Diminution in value of non-current other fi nancial assets 18,704 18,704 61,117 61,117 Net expense from movements in provisions: Employee entitlements 107,418 58,343 210,057 187,553 Restoration 83,770 83,770 (72,355) (72,355) Surplus leased premises (477,029) (477,029) 477,029 477,029 Net expense including movements in provision for bad and doubtful debts 10,062 10,062 157,273 157,273 Amortisation of: Leasehold improvements 500,110 500,110 433,088 433,088 Software 472,202 472,202 569,801 569,801 Goodwill 40,750 0 40,750 0 Depreciation of: Property, plant, and equipment; and motor vehicles 793,505 614,715 708,613 577,923 Buildings 20,642 20,642 0 0

NOTE 3 – ITEMS OF SIGNIFICANT INTEREST

Restructuring Provision 0 0 394,000 394,000 Income tax effect 0 0 0 0 0 0 394,000 394,000

Millennium issue rectifi cation costs 0 0 117,440 117,440 Income tax effect 0 0 (42,278) (42,278) 0 0 75,162 75,162

GST Implementation costs 0 0 64,659 64,659 Income tax effect 0 0 0 0 0 0 64,659 64,659

Surplus leased premises 0 0 577,941 577,941 Income tax effect 0 0 0 0 0 0 577,941 577,941

Write-off of formation costs 0 0 3,000 0 Income tax effect 0 0 0 0 0 0 3,000 0

Aggregate items of signifi cant interest before income tax 0 0 1,157,040 1,154,040 Aggregate income tax effect 0 0 (42,278) (42,278) 0 0 1,114,762 1,111,762

(2000: The Company restructured its NSW offi ces, resulting in redundancies and surplus leased offi ce space.)



The straight-line method of depreciation has been adopted for all property, plant and equipment assets, excluding freehold land, at rates based on their assessed useful life to the Company. Assets are depreciated or amortised from the date the asset is held ready for use. Leasehold improvements are amortised over the shorter of either the unexpired period of the lease or the estimated useful life of the improvement.

The depreciation rates used for each class of depreciable assets are:

Class of Fixed Asset Depreciation/Amortisation Rate

Buildings 5.0%Motor Vehicles 22.5%Plant & Equipment 3 to 40%Software 40.0%Leasehold Amortised over the life of eachImprovements lease

Assets are depreciated or amortised from the date of acquisition or, in respect of internally constructed assets, from the time an asset is completed and held ready for use.

l) Leases

Operating leases are not capitalised and rental payments are expensed in the year in which they are incurred.

The total benefi t of operating lease incentives is recognised as a liability at the commencement of each lease and subsequently amortised over the life of the respective lease.

Provision is made for surplus leased premises when it is determined that no substantive future benefi t will be obtained by the consolidated entity from the premises.

The consolidated entity does not hold any leases which would be categorised as fi nance leases.

m) Accounts Payable

Liabilities are recognised for amounts to be paid in the future for goods and services received, whether or not billed to the consolidated entity. Trade accounts are normally settled within 30 days.


NOTE 4 – TAXATION

a) Income tax expense

The difference between income tax expense provided in the fi nancial statements and the prima facie income tax expense is reconciled as follows:

Profit from Ordinary Activities 8,956,456 9,045,025 3,318,230 3,566,222

Prima facie tax thereon at 34% (2000: 36%) 3,045,195 3,075,309 1,194,563 1,283,840 Add tax effect of permanent differences: Other non-allowable items 66,456 66,456 5,478 5,478 Under provision for income tax in prior year 0 0 91 91 Amortisation of Goodwill 13,855 0 14,670 0 Tax benefi t on losses of controlled entity 16,258 0 74,607 0 Restatement of deferred tax balances due to change in company tax rate 37,394 37,394 31,736 31,736 Income tax expense attributable to profi t from ordinary activities 3,179,158 3,179,158 1,321,145 1,321,145

Income tax expense attributable to operating profi t is made up of: Current income tax provision 2,920,107 2,920,107 1,836,359 1,836,359 Deferred income tax provision 58,525 58,525 (250,028) (250,028) Future income tax benefi t 200,526 200,526 (265,277) (265,277) Under provision for income tax in prior year 0 0 91 91 3,179,158 3,179,158 1,321,145 1,321,145

b) Tax Liabilities (Provision for current income tax)

Movements during the year Balance at beginning of year 1,341,173 1,341,173 254,349 254,349 Income tax paid (2,368,410) (2,368,410) (749,625) (749,625) Under provision for income tax in prior year 0 0 91 91 Income tax to be paid on current year’s operating profi t 2,920,107 2,920,107 1,836,358 1,836,358 Balance at end of year 1,892,870 1,892,870 1,341,173 1,341,173

c) Deferred Tax Liabilities (Provision for deferred income tax)

Provision for deferred income tax comprises the estimated expense at current income tax rates on the following items: Prepayments and Accrued Income 101,813 101,813 43,288 43,288 Balance at end of year 101,813 101,813 43,288 43,288




d) Deferred Tax Assets (Future income tax benefi t)

Future income tax benefi t comprises the estimated future benefi t at current income tax rates on the following items: Provisions and accrued employee entitlements not currently deductible 27,583 27,583 239,039 239,039 Differences in depreciation and amortisation of property, plant and equipment for accounting and income tax purposes 219,636 219,636 148,528 148,528 Sundry items 135,049 135,049 195,226 195,226 Balance at end of year 382,268 382,268 582,793 582,793

NOTE 5 – SEGMENT REPORTING

The consolidated entity operates in Australia and provides medical assessment and health advisory services to individuals and organisations, mainly Commonwealth and State Government departments and agencies.

NOTE 6 – DIVIDENDS

Interim dividends paid 1,500,000 1,500,000 660,000 660,000 Final dividends proposed 2,200,000 2,200,000 840,000 840,000 Dividends paid or proposed 3,700,000 3,700,000 1,500,000 1,500,000

NOTE 7 – RECEIVABLES

CurrentTrade Receivables 5,245,846 3,921,751 5,459,673 4,841,137 Services-in-progress 126,515 415,989 273,871 177,660 less: Provision for doubtful debts (78,509) (78,509) (132,372) (132,372) Total Current Receivables 5,293,851 4,259,230 5,601,172 4,886,425

Non-Current

Loan to Controlled Entities 0 585,000 0 585,000








NOTE 8 – OTHER FINANCIAL ASSETS

CurrentShort Term Bank Bills/Corporate Bond 2,990,588 2,990,588 4,502,754 4,502,754

Non-CurrentFloating Rate Notes 13,015,545 13,015,545 8,002,017 8,002,017 Investment in Controlled Entity: Unlisted shares at cost 0 515,000 0 515,000 13,015,545 13,530,545 8,002,017 8,517,017

NOTE 9 – OTHER ASSETS

CurrentPrepayments 227,281 220,320 92,232 90,156 Accrued Interest 83,793 83,793 105,891 105,891 Other 53,982 53,982 50,343 50,343 Total Other Current Assets 365,056 358,095 248,466 246,390

Non-CurrentOther 0 0 10,825 10,825

NOTE 10 – PROPERTY, PLANT AND EQUIPMENT

Freehold land Opening Balance: at Cost 180,000 180,000 Net Book Value of Land 180,000 180,000 180,000 180,000

Buildings Opening Balance: at Cost 263,000 263,000 Additions 96,227 96,227 Closing Balance 359,227 359,227 263,000 263,000

Opening Accumulated Depreciation 0 0 Depreciation for the year (20,642) (20,642) Closing Accumulated Depreciation (20,642) (20,642) 0 0 Net Book Value of Buildings 338,585 338,585 263,000 263,000




Motor Vehicles Opening Balance: at Cost 164,977 0 Additions 89,977 0 Disposals (37,509) 0 Closing Balance 217,445 0 164,977 0

Opening Accumulated Depreciation (70,936) 0 Additions (33,669) 0 Disposals 25,967 0 Closing Accumulated Depreciation (78,638) 0 (70,936) 0

Net Book Value of Motor Vehicles 138,807 0 94,041 0

Plant & Equipment Opening Balance: at Cost 3,889,980 3,363,378 Additions 923,861 727,877 Disposals (308,752) (200,734) Closing Balance 4,505,088 3,890,520 3,889,980 3,363,378

Opening Accumulated Depreciation (1,727,399) (1,467,730) Additions (759,836) (614,715) Disposals 255,191 149,813 Closing Accumulated Depreciation (2,232,044) (1,932,632) (1,727,399) (1,467,730)

Net Book Value of Plant & Equipment 2,273,044 1,957,888 2,162,581 1,895,648

Software Opening Balance: at Cost 1,655,327 1,655,327 Additions 699,604 699,604 Closing Balance 2,354,931 2,354,931 1,655,327 1,655,327

Opening Accumulated Amortisation (1,179,022) (1,179,022) Amortisation for the year (472,202) (472,202) Closing Accumulated Amortisation (1,651,224) (1,651,224) (1,179,022) (1,179,022)

Net Book Value of Software 703,706 703,706 476,305 476,305


Leasehold Improvements Opening Balance: at Cost 3,530,002 3,530,002 Additions 1,076,535 1,076,535 Closing Balance 4,606,537 4,606,537 3,530,002 3,530,002

Opening Accumulated Amortisation (446,653) (446,653) Amortisation for the year (447,280) (447,280) Closing Accumulated Amortisation (893,933) (893,933) (446,653) (446,653) Net Book Value 3,712,604 3,712,604 3,083,349 3,083,349

Opening Balance: at independent valuation July 1997 391,130 391,130 Closing Balance 391,130 391,130 391,130 391,130

Opening Accumulated Amortisation (248,459) (248,459) Amortisation for the year (52,830) (52,830) Closing Accumulated Amortisation (301,289) (301,289) (248,459) (248,459) Net Book Value 89,841 89,841 142,671 142,671 Net Book Value of Leasehold Improvements 3,802,445 3,802,445 3,226,020 3,226,020

Net Book Value of Property, Plant & Equipment 7,436,588 6,982,625 6,401,947 6,040,973

The independent valuation on 1 July 1997 was carried out by the Australian Valuation Offi ce and was on the basis of depreciated replacement cost of the assets concerned. The directors are of the opinion that this basis provides a reasonable estimate of the future economic benefi ts attributable to the assets.

NOTE 11 – INTANGIBLES

Goodwill at cost 407,499 0 407,499 0 Accumulated amortisation (81,500) 0 (40,750) 0 325,999 0 366,749 0

NOTE 12 – PAYABLES

Trade Creditors 1,432,250 1,209,808 1,862,062 1,666,560 Other Creditors 2,716,797 2,478,541 1,835,467 1,835,467 Total Payables 4,149,047 3,688,349 3,697,529 3,502,027

NOTE 13 – INTEREST BEARING LIABILITIES

CurrentDebtor Finance Facility – secured 125,895 0 0 0Hire Purchase Liability – secured 52,385 0 56,436 0 Loans – unsecured 32,240 0 0 0 Total Current Interest Bearing Liabilities 210,519 0 56,436 0

Non-CurrentHire Purchase Liability – secured 133,890 0 79,554 0

The Debtor Finance Facility is secured by a First Registered Mortgage Debenture Charge over Work Solutions Group Pty Ltd and guarantees by the Directors of Work Solutions Group Pty Ltd. Interest on this facility is charged at prevailing market rates. See also note 20.

The loans are unsecured and repayable on demand. Interest rates are fi xed and vary between 8% and 8.5%.

NOTE 14 – PROVISIONS

CurrentDividends 6 2,200,000 2,200,000 840,000 840,000 Employee entitlements 1,114,159 996,250 1,065,515 993,234 Restoration 40,625 40,625 28,899 28,899 Surplus leased premises 3 0 0 477,029 477,029 Other 37,915 37,915 15,719 15,719 Total Current Provisions 3,392,699 3,274,790 2,427,162 2,354,881

Non-CurrentEmployee entitlements 2,599,328 2,572,078 2,540,554 2,516,751 Restoration 191,113 191,113 119,069 119,069 Total Non-Current Provisions 2,790,441 2,763,191 2,659,623 2,635,820

NOTE 15 – OTHER LIABILITIES

CurrentLease incentive liability 91,248 91,248 84,978 84,978

Non-CurrentLease incentive liability 534,282 534,282 549,412 549,412








NOTE 16 – CONTRIBUTED EQUITY

Balance at beginning of fi nancial year (7,472,473 ordinary shares fully paid) 13,266,522 13,266,522 13,266,522 13,266,522 Balance at end of fi nancial year 13,266,522 13,266,522 13,266,522 13,266,522

NOTE 17 – RETAINED PROFITS AND DIVIDENDS

Retained Profi tsRetained profi ts at the beginning of the fi nancial year 2,101,986 2,246,357 1,501,280 1,501,280 Dividends provided for or paid (3,700,000) (3,700,000) (1,500,000) (1,500,000)Net profi t 5,801,208 5,865,867 2,100,706 2,245,077Retained profi ts at the end of the fi nancial year 4,203,194 4,412,224 2,101,986 2,246,357

EquityTotal equity at the beginning of the fi nancial year 15,372,389 15,512,879 14,875,304 14,767,802Total changes in equity recognised in the Statement of Financial Performance 5,801,208 5,865,867 2,100,706 2,245,077Transactions with owners as owners: Dividends (3,700,000) (3,700,000) (1,500,000) (1,500,000)Total changes in outside equity interests (23,910) 0 (103,621) 0Total equity at the reporting date 17,449,687 17,678,746 15,372,389 15,512,879

NOTE 18 – OUTSIDE EQUITY INTERESTS

Reconciliation of outside equity interests in controlled entities Opening balance 3,881 0 Add share of acquisition of controlled entity 0 107,502 Add share of operating profi t/(loss) (23,910) (103,621) Closing balance (20,029) 3,881

NOTE 19 – COMMITMENTS

Capital expenditure contracted for is payable as follows: Not later than 1 year 123,122 0 64,069 0 Later than 1 year but not later than 5 years 124,543 0 71,922 0 Total Capital Commitments Payable 247,665 0 135,991 0

Operating lease expenditure contracted for is payable as follows: Not later than 1 year 2,114,125 1,991,003 2,062,281 1,954,356 Later than 1 year but not later than 5 years 6,774,122 6,649,579 6,761,853 6,520,103 Later than 5 years 4,485,568 4,485,568 6,129,233 6,129,233 Total Operating Lease Commitments Payable 13,373,815 13,126,150 14,953,367 14,603,692

Total Commitments Payable 13,621,480 13,126,150 15,089,358 14,603,692

NOTE 20 – CONTINGENCIES

The Company’s bank has provided a guarantee of $350,000 to the lessor of the head offi ce premises on 1 November 1997. The directors are not aware of any circumstance or information which would lead them to believe that this liability will crystallise and consequently no provisions are included in the accounts in respect of this matter.

During the year, the Company became guarantor for a Debtor Finance Facility on behalf of Work Solutions Group Pty Ltd to a maximum value of $175,000, for working capital purposes. The directors have no reasons to believe that the guarantee will be drawn upon and thus no provisions are included in the accounts in respect of this matter.The directors are not aware of any other material contingent liabilities.

NOTE 21 – FINANCIAL INSTRUMENTS DISCLOSURE

a) Interest Rate Risk The consolidated entity’s exposure to interest rate risk and the effective weighted average interest rate for classes of fi nancial assets and fi nancial liabilities is set out below:

Weighted Floating Fixed Fixed average Interest Interest Rate Interest Rate Non-Interest interest rate Rate 1 year or less 1 to 5 years Bearing Total

2000–2001 Financial Assets Cash 4.43% $936,601 $0 $0 $0 $936,601 Receivables n/a $0 $0 $0 $5,293,851 $5,293,851 Investments 6.24% $13,015,545 $2,990,588 $0 $0 $16,006,133

Financial Liabilities Accounts Payable n/a $0 $0 $0 $4,149,047 $4,149,047 Interest Bearing Liabilities 12.25% $0 $210,519 $133,890 $0 $344,409 Dividends Payable n/a $0 $0 $0 $2,200,000 $2,200,000








Weighted Floating Fixed Fixed average Interest Interest Rate Interest Rate Non-Interest interest rate Rate 1 year or less 1 to 5 years Bearing Total

1999–2000

Financial Assets Cash 5.98% $594,821 $0 $0 $0 $594,821 Receivables n/a $0 $0 $0 $5,601,172 $5,601,172 Investments 6.11% $8,002,017 $0 $4,502,754 $0 $12,504,771

Financial Liabilities Accounts Payable n/a $0 $0 $0 $3,697,529 $3,697,529 Dividends Payable n/a $0 $0 $0 $840,000 $840,000

b) Foreign Exchange Risk The consolidated entity has not entered into any foreign currency transactions.

c) Credit Risk ExposureCredit risk represents the loss that would be recognised if counterparties failed to perform as contracted.

The credit risk on fi nancial assets of the consolidated entity which have been recognised in the Statement of Financial Position, is the carrying amount of those assets, net of any provision for doubtful debts. Due to the nature of the majority of the consolidated entity’s clients (mainly Commonwealth and State Government), such risk is considered by the Directors to be very low.

d) Net fair values of fi nancial assets and liabilitiesThe net fair values of investments have been valued at cost less amortisation of any premium (or discount) paid to maturity. The consolidated entity considers this is an appropriate treatment as it intends to hold all such investments to maturity. For other assets and other liabilities, the net fair value approximates their carrying value. None of the fi nancial assets and fi nancial liabilities are readily traded on organised markets in standardised form other than investments. The aggregate net fair values and carrying amounts of fi nancial assets and fi nancial liabilities are disclosed in the Statement of Financial Position.

NOTE 22 – FINANCING ARRANGEMENTS

The consolidated entity has access to a bank overdraft facility of $1,000,000 (2000: $1,000,000). The amount of unused credit at the end of the fi nancial year was $1,000,000 (2000: $1,000,000). Any interest arising from the overdraft credit arrangement is charged at prevailing market rates.

NOTE 23 – PARTICULARS IN RELATION TO THE CONTROLLED ENTITY

There was no change in the investment in controlled entities during the year. (On 1 July 1999, the Company purchased 50% of the ordinary shares of Work Solutions Group Pty Ltd for cash consideration).

Consideration (cash) 0 515,000

Fair value of net assets of entity acquired Property, plant & equipment 0 248,393 Cash 0 (218,428) Trade debtors 0 464,341 Other assets 0 101,331 Trade creditors 0 (140,149) Hire purchase liability 0 (161,932) Borrowings 0 (87,620) Provisions 0 (90,234) Other liabilities 0 (15,699) 0 0 0 100,003 Additional share issue (acquired by HSA) 0 115,000 0 0 0 215,003 Outside equity interests at acquisition 0 0 0 (107,502) 0 0 0 107,502

Goodwill on acquisition 0 0 0 407,499

NOTE 24 – NOTES TO THE STATEMENT OF CASH FLOWS

For the purposes of the Statement of Cash Flows, cash includes cash on hand and in banks and deposits at call, net of outstanding bank overdrafts.

(a) Reconciliation of cashCash at the end of the reporting period as shown in the Statement of Cash Flows is reconciled to the related items in the Statement of Financial Position as follows:

Cash on Hand 118,555 117,392 38,159 37,559 At call deposits with fi nancial institutions 818,046 819,546 556,662 614,722 936,601 936,938 594,821 652,281







(b) Reconciliation of operating profi t after income tax to net cash provided by operating activities

Operating profi t after income tax 5,777,298 5,865,867 1,997,085 2,245,077 Add/(less) items classifi ed as investing/fi nancing activities: (Profi t)/loss on sale of non-current assets 20,005 27,454 39,582 35,046

Non-cash fl ows in operating profi t Amortisation 1,013,061 972,312 1,027,039 1,027,039 Depreciation 814,147 635,357 725,213 553,776 Diminution in value of non current investments 18,704 18,704 61,117 61,117 Surplus Leased Space – fi tout write-off 0 0 239,013 239,013

Net cash provided by operating activities before change in assets and liabilities 7,643,216 7,519,694 4,089,049 4,161,068

Change in assets and liabilities: (Increase)/Decrease in prepayments (135,049) (130,164) 547,670 517,317 (Increase)/Decrease in other assets 29,284 29,284 (81,709) (103,616) Decrease in receivables 271,831 627,194 3,091,293 3,334,088 Increase in payables 765,944 465,259 286,978 266,232 Increase/(Decrease) in provisions (263,940) (312,719) 630,450 607,946 Increase in income taxes payable 551,993 551,697 1,070,170 1,086,824 Increase/(Decrease) in deferred taxes payable 58,525 58,525 (250,027) (250,027) (Increase)/Decrease in future income tax benefi ts 200,526 200,526 (265,277) (265,277) Increase/(Decrease) in other liabilities (8,860) (8,860) 68,014 68,014 Net cash provided by operating activities 9,113,470 9,000,436 9,186,610 9,422,568

(c) Acquisition of entitiesNo entities were acquired during the fi nancial year. (2000: the Company purchased 50% of the ordinary shares of Work Solutions Group Pty Ltd. Details of the acquisition is shown in Note 23).

(d) Loans to directorsThere have been no loans to Directors during the year. (2000: At the time of the Company’s acquisition of Work Solutions Group Pty Ltd, the directors of that Company repaid all advances previously made to them. This is shown in the consolidated cash fl ow statement under Loans to directors).

NOTE 25 – DIRECTORS’ REMUNERATION

The number of directors of the Company and consolidated entity whose income from the Company and consolidated entity or any related party falls within the following bands: Number Number Number Number

$0 to $9,999 1 1 3 2 $10,000 to $19,999 4 3 3 3 $20,000 to $29,999 1 0 0 0 $30,000 to $39,999 1 1 1 1 $70,000 to $79,999 0 0 1 0 $80,000 to $89,999 0 0 1 0 $220,000 to $229,999 0 0 1 1 $250,000 to $259,999 1 1 0 0 8 6 10 7

The total remuneration paid or payable, or otherwise made available, to all directors in the consolidated entity fromthe consolidated entity or any related party: 387,854 352,007 444,319 276,245

The Managing Director is also an Executive of the Company. The remuneration of the Managing Director has therefore been included in the above note.

Directors’ income does not include insurance premiums paid by the Company or related parties in respect of Directors’ and Offi cers’ Liabilities and Legal Expenses insurance contracts, as the insurance policies do not specify premiums paid in respect of individual directors. Details of the insurance premiums paid are set out in the Directors’ Report.

NOTE 26 – RELATED PARTIES

Directors

The names of each person holding the position of Director of Health Services Australia during the reporting period are Messrs R. Taylor AO, R. Basham, Dr S. Morey AM, Ms V. Fanning and Ms R. James. Mr W. Wilkinson AM commenced as a Director on 15 December 2000.








Details of directors’ remuneration are set out in Note 25.

The Chairman of the Company resigned as Chairman of the Australian Government Employee Superannuation Trust (AGEST) on 5 October 2000. AGEST is the default superannuation service provider of the Company and approximately $519,000 in employee and employer contributions is lodged annually with AGEST under normal terms and conditions.

During the year, the Company charged AGEST for the sub-letting of one offi ce and associated costs. The amount charged was $4,455, and was on full commercial terms.

No director has entered into a material contract with the Company during the reporting period, and there were no material contracts involving directors’ interests existing at year end.

The Company is wholly owned by the Commonwealth Government. No director holds shares in the Company.

Partly owned controlled entities

Details of interests in partly owned controlled entities are set out at Note 23.

During the year the Company entered into the following transactions with partly owned controlled entities:– interest received or receivable on the loan to the controlled entity of $43,245 (2000: $36,569)– reimbursement of costs for airfares booked under the Company’s name of $39,943 (2000: $28,028)– sub-lease revenue of $31,334 (2000: $20,439)– health services of $1,185 (2000: $5,525)

The aggregate amounts receivable from, and payable to, partly owned controlled entities by the Company at balance date are shown below: Receivables: Current 79,514 46,907 Non-Current 585,000 585,000 664,514 631,907 Payables: Current 2,882 0 Non-Current 0 0 2,882 0




These amounts include trade debtors and trade creditors as well as loans. Refer Note 7.

All dealings with the partly owned controlled entity are in the ordinary course of business and on normal terms and conditions. The loan is for a term of 8 years, commencing 14 July 1999, with repayments of principal to commence 14 July 2002. Interest on the outstanding balance is calculated at prevailing market rates, reviewed quarterly (2000: fi xed rate of 6.75%).

NOTE 27 – ECONOMIC DEPENDENCE

The activities of the Company are dependent on the signifi cant level of services provided to Centrelink, and immigration related services provided to, and on behalf of, Department of Immigration and Multicultural Affairs, and the resultant revenue from the provision of these services.

NOTE 28 – AUDITORS’ REMUNERATION

The Company’s external auditor is the Australian National Audit Offi ce. MGI Meyrick Webster performs an audit review of the controlled entity’s fi nancial information.Remuneration for audit services: 72,500 66,000 60,000 55,000

NOTE 29 – EARNINGS PER SHARE

The Company earned 78.5 cents per share after tax (in 2000: 30 cents per share).

NOTE 30 – EVENTS SUBSEQUENT TO BALANCE DATE

Acquisition of SubsidiaryOn 31 August 2001, the Company agreed to acquire a 100% interest in three companies that comprise the TMVC The Travel Doctor Group for consideration of $1,380,000. The Group specialises in travel medicine.The event has no effect on the fi nancial statements for the year ended 30 June 2001.






ContactsPOSTAL

GPO Box 9821

Capital City, Postcode

Head Offi ce

Level 1

15 Bowes Street

WODEN ACT 2606

02 6269 2100

Canberra

Level 1

15 Bowes Street

WODEN ACT 2606

02 6269 2001

Sydney

Level 4

136 Chalmers Street

SURRY HILLS NSW 2010

02 8396 0600

Parramatta

Level 4

2–10 Wentworth Street

PARRAMATTA NSW 2150

02 9806 7333

Newcastle

Level 1

50 Glebe Road

THE JUNCTION NSW 2291

02 4926 4033

Wollongong

Level 3

43 Burelli Street

WOLLONGONG NSW 2500

02 4226 0173

Melbourne

Level 4

Casseldon Place

2 Lonsdale Street

MELBOURNE VIC 3000

03 9224 8334

Hobart

200 Elizabeth Street

HOBART TAS 7000

03 6211 0464

Adelaide

Level 8 - West

55 Currie Street

ADELAIDE SA 5000

08 8468 6084

Perth

Level 3

95 William Street

PERTH WA 6000

08 9324 6444

Brisbane

Level 7

340 Adelaide Street

BRISBANE QLD 4000

07 3307 9444

Southport

Ground Floor

3 Short Street

SOUTHPORT QLD 4215

07 5591 6144

Darwin

Level 1

Cavanagh Centre

43 Cavanagh Street

DARWIN NT 0800

08 8981 7492


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