Appendix 9 Financial statements

Independent auditor's report

Statement by Directors, Chief Executive and Chief Financial Officer

Australian Institute of Health and Welfare
STATEMENT OF COMPREHENSIVE INCOME
for the period ended 30 June 2012

EXPENSES	Notes	2012 $'000	2011 $'000
Employee benefits	3A	36,028	35,124
Supplier	3B	16,687	17,834
Depreciation and amortisation	3C	1,060	805
Write-down and impairment of assets	3D	295	26
Finance costs	3E	16	29
Total expenses	—	54,086	53,818

LESS:
OWN-SOURCE INCOME

Own-source revenue	Notes	2012 $'000	2011 $'000
Sale of goods and rendering of services	4A	33,690	31,398
Interest	4B	1,138	1,146
Other revenues	4C	20	-
Total own-source revenue	—	34,848	32,544
Total own-source income	—	34,848	32,544
Net cost of services	—	19,238	21,274
Revenue from government	4D	17,389	21,408
Surplus (Deficit) attributable to the Australian Government	—	(1,849)	134

OTHER COMPREHENSIVE INCOME	Notes	2012 $'000	2011 $'000
Change in asset revaluation surplus	—	-	-
Total other comprehensive income	—	-	-
Total comprehensive income attributable to the Australian Government	—	(1,849)	134

The above statement should be read in conjunction with the accompanying notes.

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Australian Institute of Health and Welfare
BALANCE SHEET
as at 30 June 2012

ASSETS

Financial assets	Notes	2012 $'000	2011 $'000
Cash and cash equivalents	5A	18,833	18,209
Trade and other receivables	5B	10,407	8,904
Total financial assets	—	29,240	27,113

ASSETS

Non-financial assets	Notes	2012 $'000	2011 $'000
Buildings	6A,D	1,147	1,491
Property, plant and equipment	6B,D	797	1,064
Library collection	6C,D	100	150
Intangibles	6E	212	323
Inventories	6F	0	83
Other non-financial assets	6G	352	452
Total non-financial assets	—	2,608	3,563
Total assets	—	31,848	30,676

LIABILITIES

Payables	Notes	2012 $'000	2011 $'000
Suppliers	7A	2,953	1,088
Other payables	7B	1,544	1,364
Contract income in advance	7C	12,819	12,906
Total payables	—	17,316	15,358

LIABILITIES

Provisions	Notes	2012 $'000	2011 $'000
Employee provisions	8A	9,607	8,533
Other provisions	8B	655	666
Total provisions	—	10,262	9,199
Total liabilities	—	27,578	24,557
Net assets	—	4,270	6,119

EQUITY	Notes	2012 $'000	2011 $'000
Contributed equity	—	2,756	2,756
Reserves	—	2,288	2,288
Retained surplus (accumulated deficit)	—	(774)	1,075
Total equity	—	4,270	6,119

The above statement should be read in conjunction with the accompanying notes.

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Australian Institute of Health and Welfare
STATEMENT OF CHANGES IN EQUITY
For the period ended 30 June 2012

Statement of Changes in Equity	Retained Earnings		Asset Revaluation Surplus		Contributed Equity/Capital		Total Equity
	2012 $'000	2011 $'000	2012 $'000	2011 $'000	2012 $'000	2011 $'000	2012 $'000	2011 $'000
Opening balance: Balance carried forward from previous period	1,075	941	2,288	2,288	2,756	2,756	6,119	5,985
Adjustment for errors	–	-	–	–	–	–	–	–
Adjusted opening balance	1,075	941	2,288	2,288	2,756	2,756	6,119	5,985
Surplus (Deficit) for the period	(1,849)	134	–	–	–	–	(1,849)	134
Total comprehensive income, of which:	(1,849)	134	–	–	–	–	(1,849)	134
- attributable to the Australian Government	(1,849)	134	–	–	–	–	(1,849)	134
Closing balance at 30 June	(774)	1,075	2,288	2,288	2,756	2,756	4,270	6,119

The above statement should be read in conjunction with the accompanying notes.

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Australian Institute of Health and Welfare
CASH FLOW STATEMENT
for the period ended 30 June 2012

OPERATING ACTIVITIES

Cash received	Notes	2012 $'000	2011 $'000
Goods and services	—	35,299	32,751
Receipts from Government	—	17,389	21,408
Interest	—	1,092	1,198
Other	—	216	2
Total cash received	—	53,996	55,359

OPERATING ACTIVITIES

Cash used	Notes	2012 $'000	2011 $'000
Employees	—	34,808	33,653
Suppliers	—	16,335	20,335
Net GST paid	—	1,715	1,115
Total cash used	—	52,858	55,103
Net cash from (used by) operating activities	9	1,138	256

INVESTING ACTIVITIES

Cash used	Notes	2012 $'000	2011 $'000
Purchase of property, plant and equipment	—	514	839
Total cash used	—	514	839
Net cash from (used by) investing activities	—	(514)	(839)
Net increase (decrease) in cash held	—	624	(583)
Cash and cash equivalents at the beginning of the reporting period	—	18,209	18,792
Cash and cash equivalents at the end of the reporting period	5A	18,833	18,209

The above statement should be read in conjunction with the accompanying notes.

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Australian Institute of Health and Welfare
SCHEDULE OF COMMITMENTS
as at 30 June 2012

BY TYPE

Commitments receivable	2012 $'000	2011 $'000
Project1	25,833	22,613
Net GST recoverable on commitments	729	762
Total commitments receivable	26,562	23,375

BY TYPE

Commitments payable Other commitments	2012 $'000	2011 $'000
Operating leases2	4,768	7,092
Other1	3,267	1,347
Total other commitments	8,035	8,439
Net commitments by type	18,527	14,936

BY MATURITY

Commitments receivable	2012 $'000	2011 $'000
One year or less	17,885	12,801
From one to five years	8,677	10,574
Total commitments receivable	26,562	23,375

BY MATURITY

Commitments payable Operating lease commitments	2012 $'000	2011 $'000
One year or less	2,288	2,325
From one to five years	2,480	4,767
Total operating lease commitments	4,768	7,092

BY MATURITY

Commitments payable Other commitments	2012 $'000	2011 $'000
One year or less	2,365	968
From one to five years	902	379
Total other commitments	3,267	1,347
Total commitments payable	8,035	8,439
Net commitments by maturity	18,527	14,936

NB: Commitments are GST inclusive where relevant.

1. Project and other commitments are primarily amounts relating to the AIHW's contract work.
2. Operating leases are effectively non-cancellable and comprise:

   Leases for office accommodation

   • Lease payments are subject to annual increases or reviews until the end of the lease
   • Current leases expire in July 2014 and August 2014

   Computer equipment lease

   • The lease term is up to 5 years, on expiry of the lease term, the AIHW has the option to extend the lease period, return the computers, or trade in the computers for more up-to-date models

The above statement should be read in conjunction with the accompanying notes.

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Australian Institute of Health and Welfare
Notes to and forming part of the Financial Statements

Note 1	Summary of Significant Accounting Policies
Note 2	Events after the Reporting Period
Note 3	Expenses
Note 4	Revenues
Note 5	Financial Assets
Note 6	Non-Financial Assets
Note 7	Payables
Note 8	Provisions
Note 9	Cash Flow Reconciliation
Note 10	Contingent Assets and Liabilities
Note 11	Directors Remuneration
Note 12	Senior Executive Remuneration
Note 13	Remuneration of Auditors
Note 14	Financial Instruments
Note 15	Compensation and Debt Relief
Note 16	Reporting of Outcomes

Australian Institute of Health and Welfare
Notes to and forming part of the Financial Statements
Note 1: Summary of Significant Accounting Policies

1.1 Objectives of the Australian Institute of Health and Welfare

The AIHW is structured to meet a single outcome:

• A robust evidence-base for the health, housing and community sectors, including though developing and disseminating comparable health and welfare information and statistics. (This outcome is included in the Department of Health and Ageing's Portfolio Budget Statements).

1.2 Basis of Preparation of the Financial Statements

The financial statements are required by clause 1(b) of Schedule 1 to the Commonwealth Authorities and Companies Act 1997 and are general purpose financial statements.

The continued existence of the Australian Institute of Health and Welfare (AIHW) in its present form and with its present programs is dependent on Government policy and on continuing appropriations by Parliament for the AIHW's administration and programs.

The financial statements and notes have been prepared in accordance with:

• Finance Minister's Orders (FMOs) for reporting periods ending on or after 1 July 2011; and
• Australian Accounting Standards and interpretations issued by the Australian Accounting Standards Board (AASB) that apply for the reporting period.

The financial statements have been prepared on an accrual basis and are in accordance with historical cost convention, except for certain assets at fair value. Except where stated, no allowance is made for the effect of changing prices on the results or the financial position.

The financial statements are presented in Australian dollars and values are rounded to the nearest thousand dollars unless otherwise specified.

Unless an alternative treatment is specifically required by an accounting standard or the FMOs, assets and liabilities are recognised in the balance sheet when and only when it is probable that future economic benefits will flow to the AIHW or a future sacrifice of economic benefits will be required and the amounts of the assets or liabilities can be reliably measured. However, assets and liabilities arising under executor contracts are not recognised unless required by an accounting standard. Liabilities and assets that are unrecognised are reported in the schedule of commitments or the schedule of contingencies.

Unless alternative treatment is specifically required by an accounting standard, income and expenses are recognised in the statement of comprehensive income when, and only when, the flow, consumption or loss of economic benefits has occurred and can be reliably measured.

1.3 Significant Accounting Judgements and Estimates

In the process of applying the accounting policies listed in this note, the AIHW has made the following judgements that have the most significant impact on the amounts recorded in the financial statements:

• the fair value of leasehold improvements has been taken to be the depreciated replacement cost as determined by an independent valuer.

No accounting assumptions or estimates have been identified that have a significant risk of causing a material adjustment to carrying amounts of assets and liabilities within the next reporting period.

1.4 New Australian Accounting Standards

Adoption of new Australian Accounting Standard requirements

No Accounting Standard has been adopted earlier than the application date as stated in the standard.

New standards, revised standards, interpretations or amending standards that were issued prior to the signing off date and are applicable to the current reporting period did not have financial impact and are not expected to have a future financial impact on the AIHW.

Future Australian Accounting Standard requirements

New standards, revised standards and interpretations that were issued by the Australian Accounting Standards Board prior to the signing off date and are applicable to the future reporting period are not expected to have a future financial impact on the AIHW.

1.5 Revenue

Revenue from the sale of goods is recognised when:

• the risks and rewards of ownership have been transferred to the buyer;
• the seller retains no managerial involvement nor effective control over the goods;
• the revenue and transaction costs incurred can be reliably measured; and
• it is probable that the economic benefits associated with the transaction will flow to the entity.

Revenue from rendering of services is recognised by reference to the stage of completion of contracts at the reporting date. The revenue is recognised when:

• the amount of revenue, stage of completion and transaction costs incurred can be reliably measured; and
• the probable economic benefits with the transaction will flow to the AIHW.

The stage of completion of contracts at the reporting date is determined by reference to the proportion that costs incurred to date bear to the estimated total costs of the transaction.

Receivables for goods and services, which have 30 day terms, are recognised at the nominal amounts due less any allowance for impairment. Collectability of debts is reviewed at balance date. Allowances are made when collectability of the debt is no longer probable.

Interest revenue is recognised using the effective interest method as set out in AASB 139 Financial Instruments: Recognition and Measurement.

Revenues from Government

Funding received or receivable from the Department of Health and Ageing (appropriated to the Department as a CAC Act body payment item for payment to AIHW) is recognised as Revenue from Government unless they are in the nature of an equity injection or a loan.

1.6 Gains

Resources received free of charge

Resources received free of charge are recognised as gains when and only when a fair value can be reliably determined and the services would have been purchased if they had not been donated. Use of those resources is recognised as an expense.

Resources received free of charge are recorded as either revenue or gains depending on their nature.

Contributions of assets at no cost of acquisition or for nominal consideration are recognised as gains at their fair value when the asset qualifies for recognition, unless received from another Government agency or authority as a consequence of a restructuring of administrative arrangements.

Sale of assets

Gains from disposal of assets are recognised when control of the asset has passed to the buyer.

1.7 Transactions with the Government as Owner

Equity injections

Amounts that are designated as equity injections for a year are recognised directly in contributed equity in that year.

1.8 Employee Benefits

Liabilities for services rendered by employees are recognised at the reporting date to the extent that they have not been settled.

Liabilities for 'short-term employee benefits' (as defined in AASB 119 Employee Benefits) and termination benefits due within twelve months of balance date are measured at their nominal amounts.

The nominal amount is calculated with regard to the rates expected to be paid on settlement of the liability.

Other long-term employee benefits are measured as the present value of the estimated future cash outflows to be made in respect of services provided by employees up to the reporting date.

Leave

The liability for employee benefits includes provision for annual leave and long service leave. No provision has been made for sick leave as all sick leave is non-vesting and the average sick leave taken in future years by employees of the AIHW is estimated to be less than the annual entitlement for sick leave.

The leave liabilities are calculated on the basis of employees' remuneration, including the AIHW's employer superannuation contribution rates to the extent that the leave is likely to be taken during service rather than paid out on termination.

The liability for long service leave is recognised and measured at the present value of the estimated future cashflows to be made in respect of all employees at 30 June 2011. The estimate of the present value of the liability takes into account attrition rates and pay increases through promotion and inflation.

Separation and redundancy

Provision is made for separation and redundancy benefit payments. AIHW recognises a provision for termination when it has developed a detailed formal plan for the terminations and has informed those employees affected that it will carry out the terminations.

Superannuation

Staff of the AIHW are members of the Commonwealth Superannuation Scheme (CSS), the Public Sector Superannuation Scheme (PSS) or the PSS accumulation plan (PSSap).

The CSS and PSS are defined benefit schemes for the Australian Government. The PSSap is a defined contribution scheme.

The liability for defined benefits is recognised in the financial statements of the Australian Government and is settled by the Australian Government in due course. This liability is reported by the Department of Finance and Deregulation as an administered item.

The AIHW makes employer contributions to the employee superannuation scheme at rates determined by an actuary to be sufficient to meet the cost to the Government of the superannuation entitlements of the AIHW's employees. The AIHW accounts for the contributions as if they were contributions to defined contribution plans.

The liability for superannuation recognised as at 30 June represents outstanding contributions for the final fortnight of the year.

1.9 Leases

A distinction is made between finance leases and operating leases. Finance leases effectively transfer from the lessor to the lessee substantially all the risks and rewards incidental to ownership of leased assets. An operating lease is a lease that is not a finance lease. In operating leases, the lessor effectively retains substantially all such risks and benefits.

The AIHW has no finance leases.

Operating lease payments are expensed on a straight line basis which is representative of the pattern of benefits derived from the leased assets.

1.10 Borrowing Costs

All borrowing costs are expensed as incurred.

1.11 Cash

Cash and cash equivalents includes notes and coins held and any deposits in bank accounts with an original maturity of 3 months or less that are readily convertible to known amounts of cash and subject to insignificant risk of changes in value. Cash is recognised at its nominal amount.

1.12 Financial Assets

The AIHW classifies its financial assets as loans and receivables.

The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.

Financial assets are recognised and derecognised upon 'trade date'.

Effective Interest Method

The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset, or, where appropriate, a shorter period.

Receivables

Trade receivables and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as 'receivables'. Receivables are measured at amortised cost using the effective interest method less impairment. Interest is recognised by applying the effective interest rate.

Impairment of financial assets

Financial assets are assessed for impairment at each balance date.

• Financial assets held at amortised cost – If there is objective evidence that an impairment loss has been incurred for loans and receivables held at amortised cost, the amount of the loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows discounted at the asset's original effective interest rate. The carrying amount is reduced by way of an allowance account. The loss is recognised in the statement of comprehensive income.

1.13 Financial Liabilities

Financial liabilities are classified as other financial liabilities.

Financial liabilities are recognised and derecognised upon 'trade date'.

Other financial liabilities

Supplier and other payables are recognised at amortised cost. Liabilities are recognised to the extent that the goods or services have been received (and irrespective of having been invoiced).

1.14 Contingent Liabilities and Contingent Assets

Contingent liabilities and contingent assets are not recognised in the balance sheet but are reported in the relevant schedules and notes. They may arise from uncertainty as to the existence of a liability or asset, or represent a liability or asset in respect of which the amount cannot be reliably measured. Contingent assets are disclosed when settlement is probable but not virtually certain, and contingent liabilities are disclosed when settlement is greater than remote.

1.15 Acquisition of Assets

Assets are recorded at cost on acquisition except as stated below. The cost of acquisition includes the fair value of assets transferred in exchange and liabilities undertaken. Financial assets are initially measured at their fair value plus transaction costs where appropriate.

Assets acquired at no cost, or for nominal consideration, are initially recognised as assets and revenues at their fair value at the date of acquisition, unless acquired as a consequence of restructuring of administrative arrangements. In the latter case, assets are initially recognised as contributions by owners at the amounts at which they were recognised in the transferor authority's accounts immediately prior to the restructuring.

1.16 Property, Plant and Equipment (PP&E)

Asset recognition threshold

Purchases of property, plant and equipment are recognised initially at cost in the balance sheet, except for purchases costing less than $3,000, which are expensed in the year of acquisition (other than where they form part of a group of similar items which are significant in total).

The initial cost of an asset includes an estimate of the cost of dismantling and removing the item and restoring the site on which it is located. This is particularly relevant to 'makegood' provisions in property leases taken up by the AIHW where there exists an obligation to restore the property to its original condition. These costs are included in the value of the AIHW's leasehold improvements with a corresponding provision for the 'makegood' recognised.

Revaluations

Fair values for each class of asset are determined as shown below:

Asset class	Fair value measured at:
Buildings-Leasehold Improvements	Depreciated replacement cost
Property, Plant and Equipment	Market selling price
Library Collection	Market selling price

Following initial recognition at cost, property, plant and equipment are carried at fair value less accumulated depreciation and accumulated impairment losses. Valuations are conducted with sufficient frequency to ensure that the carrying amounts of assets do not materially differ from the assets' fair values as at the reporting date. The regularity of independent valuations depends upon the volatility of movements in market values for the relevant assets.

Revaluation adjustments are made on a class basis. Any revaluation increment is credited to equity under the heading of asset revaluation reserve except to the extent that it reverses a previous revaluation decrement of the same asset class that was previously recognised through surplus and deficit. Revaluation decrements for a class of assets are recognised directly through surplus and deficit except to the extent that they reverse a previous revaluation increment for that class.

Any accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the asset and the asset restated to the revalued amount.

Depreciation

Depreciable property, plant and equipment assets are written-off to their estimated residual values over their estimated useful lives to the AIHW using, in all cases, the straight-line method of depreciation.

Depreciation rates (useful lives), residual values and methods are reviewed at each reporting date and necessary adjustments are recognised in the current, or current and future reporting periods, as appropriate.

Depreciation rates applying to each class of depreciable asset are based on the following useful lives:

Depreciable assets	2012	2011
Leasehold improvements	Lease term	Lease term
Property, plant and Equipment	3 to 10 years	3 to 10 years
Library Collection	7 years	7 years

Impairment

All assets were assessed for impairment at 30 June 2012. Where indications of impairment exist, the asset's recoverable amount is estimated and an impairment adjustment made if the asset's recoverable amount is less than its carrying amount.

The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use. Value in use is the present value of the future cash flows expected to be derived from the asset. Where the future economic benefit of an asset is not primarily dependent on the asset's ability to generate future cash flows, and the asset would be replaced if the AIHW were deprived of the asset, its value in use is taken to be its depreciated replacement cost.

1.17 Intangibles

The AIHW's intangibles comprise internally developed and purchased software for internal use. These assets are carried at cost less accumulated amortisation.

Intangibles are recognised initially at cost in the balance sheet, except for purchases costing less than $50,000, which are expensed in the year of acquisition.

Software is amortised on a straight-line basis over its anticipated useful life. The useful life of the AIHW's software is 3 to 5 years (2010–11: 3 to 5 years).

All software assets were assessed for indications of impairment as at 30 June 2012.

1.18 Inventories

Inventories held for sale are valued at the lower of cost and net realisable value.

Inventories held for distribution are measured at the lower of cost and current replacement cost.

Inventories acquired at no cost or nominal consideration are measured at current replacement cost at the date of acquisition.

1.19 Taxation

The AIHW is exempt from all forms of taxation except Goods and Services Tax (GST) and Fringe Benefits Tax (FBT).

Revenues, expenses, assets and liabilities are recognised net of GST:

• except where the amount of GST incurred is not recoverable from the Australian Taxation Office; and
• except for receivables and payables.

Australian Institute of Health and Welfare
Notes to and forming part of the Financial Statements
Note 2: Events after the Reporting Period

There were no events that occurred after the balance date that would affect the balances in the financial statements.

Australian Institute of Health and Welfare
Notes to and forming part of the Financial Statements
Note 3: Expenses

Note 3A: Employees benefits

Employees benefits	2012 $'000	2011 $'000
Wages and salaries	27,681	27,273
Superannuation: Defined contribution plans	1,948	1,873
Superannuation: Defined benefit plans	2,558	2,643
Leave and other entitlements	3,841	3,335
Total employee benefits	36,028	35,124

Note 3B: Suppliers

Goods and services	2012 $'000	2011 $'000
Consultants	6,173	6,390
Contracted services	2,084	3,033
Information technology	1,036	1,092
Printing and stationery	444	391
Training	488	487
Travel	682	847
Telecommunications	223	185
Other	2,934	2,866
Total goods and services	14,064	15,291
Provision of goods - related entities	–	–
Provision of goods - external parties	1,074	896
Rendering of services - related entities	925	858
Rendering of services - external parties	12,065	13,537
Total goods and services	14,064	15,291

Other supplier expenses	2012 $'000	2011 $'000
Operating lease rentals: minimum lease payments	2,268	2,375
Workers compensation premiums	355	168
Total other supplier expenses	2,623	2,543
Total supplier expenses	16,687	17,834

Note 3C: Depreciation and amortisation

Depreciation:	2012 $'000	2011 $'000
Leasehold improvements	576	516
Property, plant and equipment	323	209
Library collection	50	50
Total depreciation	949	775

Amortisation:	2012 $'000	2011 $'000
Intangibles: Computer software	111	30
Total amortisation	111	30
Total depreciation and amortisation	1,060	805

Note 3D: Write-down and impairment of assets

Write-down and impairment of assets	2012 $'000	2011 $'000
Revaluation decrement - Property, plant and equipment	210	–
Inventory Write Down	84	21
Write Off on disposal of Property, plant and equipment	1	5
Total write down and impairment of assets	295	26

Note 3E: Finance Costs

Finance Costs	2012 $'000	2011 $'000
Unwinding of discount on restoration obligations	16	29
Total finance costs	16	29

Australian Institute of Health and Welfare
Notes to and forming part of the Financial Statements
Note 4: Revenue

Note 4A: Sale of goods and rendering of services

Sale of goods and rendering of services	2012 $'000	2011 $'000
Provision of goods - external parties	18	77
Rendering of services - related entities	21,691	24,483
Rendering of services - external parties	11,786	6,836
Conference income - external parties	177	2
Conference income - related entities	18	-
Total sale of goods and rendering of services	33,690	31,398

Note 4B: Interest

Interest	2012 $'000	2011 $'000
Deposits	1,138	1,146
Total interest	1,138	1,146

Note 4C: Other revenues

Other revenues	2012 $'000	2011 $'000
Other	20	-
Total other revenues	20	-

Note 4D: Revenue from Government

Revenue from Government	2012 $'000	2011 $'000
CAC Act body payment item	17,389	21,408
Total revenue from Government	17,389	21,408

Australian Institute of Health and Welfare
Notes to and forming part of the Financial Statements
Note 5: Financial Assets

Note 5A: Cash and cash equivalents

Cash and cash equivalents	2012 $'000	2011 $'000
Cash on hand or on deposit	18,833	18,209
Total cash and cash equivalents	18,833	18,209

Surplus cash is invested in term deposits and is represented as cash and cash equivalents.

Note 5B: Receivables

Receivables	2012 $'000	2011 $'000
Goods and services - related entities	9,720	8,078
Goods and services - external parties	523	758
Total	10,243	8,836
GST receivable from the Australian Taxation Office	64	4
Other receivables	100	64
Total receivables (gross)	10,407	8,904
Less: impairment allowance	-	-
Total receivables (net)	10,407	8,904

Receivables are aged as follows:	2012 $'000	2011 $'000
Not overdue	9,816	7,798
Overdue by: Less than 30 days	554	1,099
Overdue by: 30–60 days	37	7
Total receivables (gross)	10,407	8,904

Receivables is expected to be recovered in:	2012 $'000	2011 $'000
No more than 12 months	10,407	8,904
Total receivables (gross)	10,407	8,904

Australian Institute of Health and Welfare
Notes to and forming part of the Financial Statements
Note 6: Non-Financial Assets

Note 6A: Buildings

Leasehold improvements	2012 $'000	2011 $'000
Fair value	1,568	1,370
Accumulated depreciation	(725)	(357)
Total	843	1,013
Restoration obligations	612	637
Accumulated depreciation	(308)	(159)
Total	304	478
Total buildings	1,147	1,491

No indicators of impairment were found for leasehold improvements.

Note 6B: Property, plant and equipment

Property, plant and equipment	2012 $'000	2011 $'000
Fair value	802	1,270
Accumulated depreciation	(4)	(206)
Total property, plant and equipment	798	1,064

No indicators of impairment were found for leasehold improvements

Library collection	2012 $'000	2011 $'000
Fair value	350	350
Accumulated depreciation	(250)	(200)
Total library collection	100	150

No indicators of impairment were found for Library Collection.

Revaluations of non-financial assets

All revaluations were conducted in accordance with revaluation policy stated at Note 1. On 30 June 2012, an independent valuer conducted the revaluations.

A revaluation increment of nil (2011: nil) for leasehold improvements, nil (2011: nil) for restoration obligations assets and nil (2011: nil) for changes in provision for restoration obligations. Revaluation decrement for Property, plant & equipment was $209,477 (2011: nil).The revaluation decrements were expensed as no Asset Revaluation Surplus was available for the asset class.

Note 6D: Analysis of Property, Plant and Equipment

TABLE A—Reconciliation of the opening and closing balances of property, plant and equipment (2011–12)

Reconciliation of the Opening and Closing Balances	Buildings-Leasehold Improvements $'000	Property, Plant and Equipment $'000	Library Collection $'000	Total $'000
As at 1 July 2011: Gross book value	2,007	1,270	350	3,627
As at 1 July 2011: Accumulated depreciation	(516)	(206)	(200)	(922)
Net book value	1,491	1,064	150	2,705
Additions: by purchase	247	267	–	514
Addition by new lease	–	–	–	–
Transfers	–	–	–	–
Revaluations recognised in other comprehensive income	–	–	–	–
Revaluations recognised in operating results	–	(732)	–	(732)
Depreciation expense	(576)	(323)	(50)	(949)
Write back of depreciation on disposal	59	1	–	60
Write back of depreciation on revaluation	–	523	–	523
Disposals	(74)	(3)	–	(77)
Net book value 30 June 2012	1,147	797	100	2,044
Net book value as at 30 June 2012 represented by: Gross Book Value	2,180	802	350	3,332
Net book value as at 30 June 2012 represented by: Accumulated depreciation	(1,033)	(5)	(250)	(1,288)
Net book value 30 June 2012	1,147	797	100	2,044

TABLE B—Reconciliation of the opening and closing balances of property, plant and equipment (2010–11)

Reconciliation of the Opening and Closing Balances	Buildings-Leasehold Improvements $'000	Property, Plant and Equipment $'000	Library Collection $'000	Total $'000
As at 1 July 2010: Gross book value	1,974	766	350	3,090
As at 1 July 2010: Accumulated depreciation	–	–	(150)	(150)
Net book value	1,974	766	200	2,940
Additions: by purchase	33	512	–	545
Addition by new lease	–	–	–	–
Transfers	–	–	–	–
Revaluations recognised in other comprehensive income	–	–	–	–
Revaluations recognised in operating results	–	–	–	–
Depreciation expense	(516)	(209)	(50)	(775)
Write back of depreciation on disposal	–	3	–	3
Disposals	–	(8)	–	(8)
Net book value 30 June 2011	1,491	1,064	150	2,705
Net book value as at 30 June 2011 represented by: Gross Book Value	2,007	1,270	350	3,627
Net book value as at 30 June 2011 represented by: Accumulated depreciation	(516)	(206)	(200)	(922)
Net book value 30 June 2011	1,491	1,064	150	2,705

Note 6E: Intangibles

Computer software	2012 $'000	2011 $'000
- purchased - in use	361	361
- accumulated amortisation	(149)	(38)
Total	212	323
- internally developed	724	724
- accumulated amortisation	(724)	(724)
Total	–	–
Total Intangibles	212	323

No indications of impairment were found for intangibles.

TABLE A—Reconciliation of the opening and closing balances of Intangibles (2011–12)

Reconciliation of the Opening and Closing Balances	Computer software—internally developed $'000	Computer software—purchased (in use) $'000	Total $'000
As at 1 July 2011: Gross book value	724	361	1,085
As at 1 July 2011: Accumulated amortisation and impairment	(724)	(38)	(762)
Net Book Value 1 July 2011	–	323	323
Additions: by purchase or internally developed	–	–	–
Amortisation	–	(111)	(111)
Disposals	–	–	–
Net book value 30 June 2012	–	212	212
Net book value as at 30 June 2012 represented by: Gross Book Value	724	361	1,085
Net book value as at 30 June 2012 represented by: Accumulated amortisation	(724)	(149)	(873)
Net book value 30 June 2012	–	212	212

TABLE B—Reconciliation of the opening and closing balances of Intangibles (2010–11)

Reconciliation of the Opening and Closing Balances	Computer software—internally developed $'000	Computer software—purchased (in use) $'000	Total $'000
As at 1 July 2010: Gross book value	717	209	926
As at 1 July 2010: Accumulated amortisation and impairment	(717)	(150)	(867)
Net Book Value 1 July 2010	–	59	59
Additions: by purchase or internally developed	–	294	294
Amortisation	(7)	(23)	(30)
Disposals	–	(135)	(135)
Write back of Amortisation on Disposal	–	135	135
Reclassifications	7	(7)	–
Net book value 30 June 2011	–	323	323
Net book value as at 30 June 2011 represented by: Gross Book Value	724	361	1,085
Net book value as at 30 June 2011 represented by: Accumulated amortisation	(724)	(38)	(762)
Net book value 30 June 2011	–	323	323

Note 6F: Inventories

Inventories	2012 $'000	2011 $'000
Inventories held for sale	-	83
Total inventories	-	83

All inventory is expected to be sold or distributed in the next 12 months.

Note 6G: Other non-financial assets

Other non-financial assets	2012 $'000	2011 $'000
Prepayments	352	452
Total other non-financial assets	352	452

All other non-financial assets are expected to be recovered in no more than 12 months.

Australian Institute of Health and Welfare
Notes to and forming part of the Financial Statements
Note 7: Payables

Note 7A: Suppliers

Suppliers	2012 $'000	2011 $'000
Trade creditors	2,806	951
Operating lease rentals	147	137
Total supplier payables	2,953	1,088

Supplier payables expected to be settled in no more than 12 months:	2012 $'000	2011 $'000
Related entities	16	18
External parties	2,790	933
Total	2,806	951

Suppliers payables expected to be settled in greater than 12 months:	2012 $'000	2011 $'000
External parties	147	137
Total	147	137
Total supplier payables	2,953	1,088

Settlement is usually made within 30 days

Note 7B: Other

Other	2012 $'000	2011 $'000
Salaries and wages	835	706
Superannuation	121	108
GST payable to Australian Taxation Office	588	550
Total other payables	1,544	1,364

All other payables are expected to be settled in no more than 12 months.

Note 7C: Contract income in advance

Contract income in advance	2012 $'000	2011 $'000
Contract income	12,819	12,906
Total contract income in advance	12,819	12,906

All income in advance payables are expected to be settled in 12 months.

Australian Institute of Health and Welfare
Notes to and forming part of the Financial Statements
Note 8: Provisions

Note 8A: Employee Provisions

Employee Provisions	2012 $'000	2011 $'000
Leave	9,607	8,533
Total employee provisions	9,607	8,533

Employee provisions expected to be settled in:	2012 $'000	2011 $'000
No more than 12 months	3,408	3,078
More than 12 months	6,199	5,455
Total employee provisions	9,607	8,533

Note 8B: Other Provisions

Other Provisions	2012 $'000	2011 $'000
Provision for restoration obligations	655	666
Total other provisions	655	666

Other provisions expected to be settled:	2012 $'000	2011 $'000
No more than 12 months	-	26
More than 12 months	655	640
Total other provisions	655	666

Opening and Closing Balances	Provision for makegood $'000
Carrying amount 1 July 2011	666
Unwinding of discount	16
Adjustment on revaluation	(27)
Carrying amount 30 June 2012	655

The AIHW currently has 3 agreements for leasing premises which have provisions requiring the AIHW to restore the premises to their original condition at the conclusion of the lease. The AIHW has made a provision to reflect the present value of this obligation.

Australian Institute of Health and Welfare
Notes to and forming part of the Financial Statements
Note 9: Cash Flow Reconciliation

Reconciliation of cash and cash equivalents per Balance Sheet to Cash Flow Statement

Cash and cash equivalents as per:	2012 $'000	2011 $'000
Cash Flow Statement	18,833	18,209
Balance Sheet	18,833	18,209
Difference	–	–

Reconciliation of net cost of services to net cash from operating activities:	2012 $'000	2011 $'000
Net cost of services	(19,238)	(21,274)
Add revenue from government	17,389	21,408

Adjustment for non cash items	2012 $'000	2011 $'000
Depreciation/amortisation	1,060	805
Net write down and impairment of assets (excluding write down of inventories)	212	5
Finance Costs	16	29

Changes in assets / liabilities	2012 $'000	2011 $'000
(Increase) / decrease in receivables	(1,504)	460
(Increase)/decrease in inventories	83	21
(Increase) / decrease in other non financial assets - prepayments	100	190
(Increase) / decrease in transfer of fixed assets	-	-
Increase / (decrease) in supplier	1,865	(862)
Increase / (decrease) in other payables	180	177
Increase / (decrease) in employee provisions	1,073	1,275
Increase/(decrease) in other income in advance	(87)	(1,978)
Increase/(decrease) in other provisions	(11)	-
Net cash from operating activities	1,138	256

Australian Institute of Health and Welfare
Notes to and forming part of the Financial Statements
Note 10: Contingent Assets and Liabilities

As at 30 June 2012, the AIHW has no contingent assets, remote contingencies or unquantifiable contingencies (2011: Nil).

Australian Institute of Health and Welfare
Notes to and forming part of the Financial Statements
Note 11: Directors Remuneration

The number of non-executive directors included in these figures is shown below in the relevant remuneration bands:

Total remuneration	2012	2011
$0 - $29,000	17	15
Total number of directors of the AIHW	17	15
Total remuneration received or due and receivable by directors of the AIHW	$17,194	$25,294

Remuneration of executive directors is included in Note 12: Senior Executive Remuneration.

Australian Institute of Health and Welfare
Notes to and forming part of the Financial Statements
Note 12: Senior Executive Remuneration

Note 12A: Senior Executive remuneration expense for the Reporting Period

Short-term employee benefits:	2012	2011
Salary	1,539,111	1,332,230
Annual leave accrued*	(21,355)	53,599
Performance bonuses	37,348	51,768
Motor vehicle allowance	191,203	157,664
Total short-term employee benefits	1,746,307	1,595,261

Post–employment benefits:	2012	2011
Superannuation	257,787	222,515
Total post-employment benefits	257,787	222,515

Other long term benefits	2012	2011
Long-service leave	134,652	12,104
Total other long term benefits	134,652	12,104
Total	2,138,746	1,829,880

* This is annual leave taken in excess of annual leave accrued

Notes:

1. Note 12A is prepared on an accrual basis (therefore the performance bonus expenses disclosed above may differ from the cash 'Bonus paid' in Note 12B).
2. Note 12A excludes acting arrangements and part-year service where remuneration expensed was less than $150,000.

Note 12B: Average Annual Reportable Remuneration Paid to Substantive Senior Executives During the Reporting Period

Total remuneration (including part-time arrangements):	Average annual reportable remuneration1 2012
	Senior Executives No.	Reportable salary2 $	Contributed superannuation3 $	Reportable allowances4 $	Bonus paid5 $	Total $
$180,000–$209,999	6	156,229	23,285	23,900	-	203,414
$210,000–$239,999	3	159,594	29,281	23,900	-	212,775
$330,000–$359,999	1	253,371	55,384	-	35,590	344,345
Total	10	-	-	-	-	-

Total remuneration (including part-time arrangements):	Average annual reportable remuneration1 2011
	Senior Executives No.	Reportable salary2 $	Contributed superannuation3 $	Reportable allowances4 $	Bonus paid5 $	Total $
$180,000–$209,999	8	150,557	25,246	22,926	-	198,729
$210,000–$239,999	-	-	-	-	-	-
$270,000–$299,999	1	242,374	52,980	-	-	295,354
Total	9	-	-	-	-	-

Notes:

1. This table reports substantive senior executives who received remuneration during the reporting period. Each row is an averaged figure based on headcount as at 30 June 2012 for individuals in the band.
2. 'Reportable salary' includes the following: a) gross payments (less any bonuses paid, which are separated out and disclosed in the 'bonus paid' column); b) reportable fringe benefits (at the net amount prior to 'grossing up' to account for tax benefits); and c) exempt foreign employment income.
3. The 'contributed superannuation' amount is the average actual superannuation contributions paid to senior executives in that reportable remuneration band during the reporting period, including any salary sacrificed amounts, as per the individuals' payslips.
4. 'Reportable allowances' are the average actual allowances paid as per the 'total allowances' line on individuals' payment summaries.
5. 'Bonus paid' represents average actual bonuses paid during the reporting period in that reportable remuneration band. The 'bonus paid' within a particular band may vary between financial years due to various factors such as individuals commencing with or leaving the entity during the financial year.
6. Various salary sacrifice arrangements were available to senior executives including superannuation, motor vehicle and expense payment fringe benefits. Salary sacrifice benefits are reported in the 'reportable salary' column, excluding salary sacrificed superannuation, which is reported in the 'contributed superannuation' column.

Variable Elements:

With the exception of performance bonuses, variable elements are not included in the 'Fixed Elements and Bonus Paid' table above. The following variable elements are available as part of senior executives' remuneration package:

1. Performance bonuses:
   The Director is entitled to a performance bonus.
2. On average senior executives are entitled to the following leave entitlements:
   Each year senior executives are entitled to accrue 4 weeks annual leave, 18 days personal leave and 9 days long service leave.
3. Senior executives are members of one of the following superannuation funds:
   • Commonwealth Superannuation Scheme (CSS): this scheme is closed to new members, and employer contributions were averaged at 22.0 per cent (2011: 21.8 per cent)(including productivity component). More information can be found at http://www.css.gov.au
   • Public Sector Superannuation Scheme (PSS): this scheme is closed to new members. Current employer contributions were set at 15.1 per cent (2011: 15.0 per cent)(including productivity component). More information can be found at http://www.pss.gov.au, and
   • Public Sector Superannuation accumulation plan (PSSap): employer contributions were set at 15.4 per cent (2011 - 15.4 per cent) and the fund has been in operation since July 2005. More information can be found at http://www.pssap.gov.au

Note 12C: Other Highly Paid Staff

During the reporting period, there were no employees who did not have a role as senior executives whose salary plus performance bonus were $150,000 or more (2011 – nil).

Australian Institute of Health and Welfare
Notes to and forming part of the Financial Statements
Note 13: Remuneration of Auditors

Remuneration of Auditors	2012	2011
Remuneration for auditing the financial statements for the reporting period.	$27,500	$26,500

No other services were provided by the auditors of the financial statements.

Australian Institute of Health and Welfare
Notes to and forming part of the Financial Statements
Note 14: Financial Instruments

Note 14A: Categories of financial instruments

Financial assets	2012 $'000	2011 $'000
Loans and receivables: Cash at bank	18,833	18,209
Loans and receivables: Receivables for goods and services	10,243	8,836
Carrying amount of financial assets	29,076	27,045

Financial liabilities	2012 $'000	2011 $'000
Other financial liabilities: Trade creditors	2,806	951
Carrying amount of financial liabilities	2,806	951

The AIHW holds basic financial instruments in the form of cash and cash equivalents, receivables for goods and services and trade creditors. The carrying value of financial instruments reported in the balance sheet is a reasonable approximation of fair value.

Note 14B: Net income and expense from financial assets

Loans and receivables	2012 $'000	2011 $'000
Interest revenue	1,138	1,146
Net gain loans and receivables	1,138	1,146
Net gain from financial assets	1,138	1,146

Note 14C: Credit risk

The AIHW is exposed to minimal credit risk as the majority of loans and receivables are receivables from other Government organisations. The maximum exposure to credit risk is the risk that arises from potential default of a debtor. This amount is equal to the total amount of trade receivables (2012: $10,243,000 and 2011: $8,836,000). The AIHW has assessed the risk of the default on payment and has allocated $0 in 2012 (2011: $0) to an allowance for impairment account.

The AIHW has no significant exposure to any concentrations of credit risk.

Credit quality of financial instruments not past due or individually determined as impaired

Financial Instruments	Not Past Due Nor Impaired 2012 $'000	Not Past Due Nor Impaired 2011 $'000	Past Due or Impaired 2012 $'000	Past Due or Impaired 2011 $'000
Cash at bank	18,833	18,209	–	–
Receivables for goods and services	9,651	7,730	592	1,106
Total	28,484	25,939	592	1,106

Ageing of financial assets that are past due but not impaired for 2012

Financial Assets	0 to 30 days $'000	31 to 60 days $'000	61 to 90 days $'000	90+ days $'000	Total $'000
Receivables for goods and services	554	38	–	–	592
Total	554	38	–	–	592

Ageing of financial assets that are past due but not impaired for 2011

Financial Assets	0 to 30 days $'000	31 to 60 days $'000	61 to 90 days $'000	90+ days $'000	Total $'000
Receivables for goods and services	1,099	7	–	–	1,106
Total	1,099	7	–	–	1,106

Note 14D: Liquidity risk

The AIHW is funded by appropriation and the sale of goods and services. It uses these funds to meet its financial obligations.

Note 14E: Market risk

The AIHW holds basic financial instruments that do not expose the AIHW to certain market risks. The AIHW is not exposed to 'currency risk' or 'other price risk'.

Australian Institute of Health and Welfare
Notes to and forming part of the Financial Statements
Note 15: Compensation and Debt Relief

No waiver of amounts owing to the Commonwealth was made during the reporting period (2011: nil).

No Act of Grace or ex-gratia payments were made during the reporting period (2011: nil).

Australian Institute of Health and Welfare
Notes to and forming part of the Financial Statements
Note 16: Reporting of Outcomes

Note 16A: Net Cost of Outcome Delivery

Outcome	Outcome 1		Total
	2012 $'000	2011 $'000	2012 $'000	2011 $'000
Departmental: Expenses	54,086	53,818	54,086	53,818
Departmental: Own-source income	22,867	25,629	22,867	25,629
Net cost/(contribution) of outcome	19,238	21,274	19,238	21,274

Outcome 1 is described in note 1.1.

The primary statements of these financial statements represent tables B and C: Major classes of Departmental Expense, Income, Assets and Liabilities by outcome, as required by the FMOs. Accordingly these tables are not repeated in note 16.