Annual Report - Northern Health

contentsReport of Operations02 Chair’s Report04 CEO’s Report06 The Northern Health Board10 Corporate Governance14 Executive Team17 Organisation Structure18 Our Services23 Our Achievements35 Northern Health Foundation37 Statement of Priorities41 Performance Priorities42 Activity and Funding43 Corporate Information46 Financial Summary48 Disclosure IndexFinancial Statements & Accompanying Notes52 Table of Contents - Financial Statements11/12 Northern Health annual report 1

Chair’s ReportAs I reflect upon my first year in the role of Board Chair, I havebeen hugely impressed at the extent of Northern Health’sachievements during these challenging times, and I’m verypleased to report that we have delivered in abundance on thepriorities and goals outlined in the 2009-2012 Strategic Plan,as will be evident in the pages of this Annual Report.I attribute much of our success as an organisation to thepassion, commitment and skill of our staff whose dedicationto building a healthier northern community is beyond question.As we turn our sights to the development of a new StrategicPlan that will steer our course from 2012-2017, we recognisethat as a health service we will be passing through a period ofgreat transition. Our future will be built upon our long and proudhistory as a great local health service, loved and supported bythe community. The innovation, leadership and pioneering spiritdemonstrated for generations by our ‘parent’ services suchas Broadmeadows Health Service, Bundoora Extended CareCentre, Craigieburn Health Service and Panch Health Service, isexceedingly alive and well within Northern Health today.This spirit of innovation is critical to our success in the yearsahead as the demands of our burgeoning community continueto grow. Our transition to a major university teaching andresearch-based health service is both an exciting and boldchallenge.The need for this change is very real. The huge growth inthe north has engendered the birth of new suburbs bringingthousands of residents and families to our region. Our challengeis not only to keep pace with the demand for health services butalso to anticipate the specific needs of our community in theyears ahead. With population-based projections showing ourhealth services will need to span all age spectrums from birthto aged care, Northern Health’s services must advance, withoutdelay, on all fronts.Our ability to meet these challenges will be determined in nosmall part by the strength of our partnerships. Our relationshipswith Melbourne’s great centres of learning such as La TrobeUniversity and the University of Melbourne are pivotal to oursuccess in the next five years for a variety of reasons, foremostamongst them:1. Our ability to recruit, train and retain our own workforce forthe future: a workforce that is trained in the north and staysin the north;2. Our commitment to best practice, innovation and qualityimprovement that is supported by the growing body ofevidence which indicates a higher quality of care is availableat university teaching hospitals; and3. The pressing need for Northern Health to become agenerator of new knowledge. We cannot afford to becontent as a passive receiver or translator of knowledge– our patients and the northern community demand anddeserve the benefits from tailored research programs.To date, our partnerships have set us in good stead, with ourworld-class Teaching Training and Research Precinct soonto become the physical expression of our commitment toknowledge exchange and generation. With construction set tobe completed in 2013-14, Northern Health is poised to generateknowledge that will bring significant benefits not only to ourpatients, but also at state, the nation and international levels.As we embark on this accelerated period of growth, weacknowledge that much of our infrastructure will requiresignificant upgrades. Many of Northern Health’s buildings andfacilities are now at a point where incremental change will nolonger suffice. The many years of adding minor improvementsto existing structures will not sustain our need for expansion.We know that major redevelopments, particularly of theNorthern Hospital site at Cooper Street, will become anoperational necessity.Similarly, we need to be future-focussed in terms of models ofcare. A strong push is already underway across the country forinnovative new models of care that favour community-basedpathways and are less reliant upon traditional bed-basedsystems. Northern Health’s growth makes us particularlywell placed to be at the forefront of the development of newmodels that enable this fundamental change. Here again, ourrelationships with community organisations, local GPs, NorthernMedicare Local and other service providers will be critical to ourability to meet the future health care needs of our community.In closing, I’d like to extend my sincere thanks to the talentedNorthern Health leadership team, including Greg Pullen for hisexceptional achievements as CEO. Thank you also to my fellowDirectors for their commitment and support –particularly retiringBoard member Sue Renkin for her valuable service; and a warmwelcome to Rima Newman who has recently joined the Board.I would also like to thank our outstanding staff whose ‘can do’attitude and tireless efforts are the foundation of our successas a health service. It is with a great sense of excitement thatwe begin our transition towards our future as one of Victoria’slargest and most dynamic health services.Finally, in keeping with the provisions of the FinancialManagement Act 1994, I am pleased to present the Report ofOperations for Northern Health.Professor Glenn BowesChairNorthern Health Board2 annual report Northern Health 11/12

CEO’s ReportThe 2011-12 financial year was another busy one for all ourservices at Northern Health. We achieved many significantmilestones in pursuit of our goal of building a healthier northerncommunity, including:• A record number of births: Maternity staff at The NorthernHospital welcomed an extra 342 newborns into the worldthis year, including 20 babies during an extraordinary 22hour period in May, bringing the total number of births atNorthern Health for the year to 2,694; and• A world first cardiology treatment: Northern Health’sCardiology Department, led by Associate Professor Williamvan Gaal, carried out a revolutionary liquid-based cardiacprocedure that has the potential to save the lives ofcountless patients who have experienced majorheart attacks.As the northern community continues to grow, so too doesthe demand for local health services. The number of peoplewe’ve helped at Northern Health increased again this year,with inpatient separations up by 4.3 per cent and outpatientattendances up by 3.2 per cent. Our Emergency Departmentcontinues to be one of the busiest in Victoria, with 66,228presentations from which 20,205 patients were admitted toinpatient wards.We continued to expand our infrastructure with the opening ofnew cardiac catheter laboratories and operating suites and theinstallation of portable education buildings that are home to thenewly independent Northern Clinical School.community, with the changing age profile requiring continuedpaediatric growth and major growth in the aged patient groupwith a projected 170 per cent increase in citizens aged 85and over.The phenomenal growth of the northern community demandsthat we explore innovative models of service provision and newmodels of care that are less bed-based, enabling us to treat ourrapidly expanding population over the next five years.We are working to develop a comprehensive strategic plan thatallows us to align our efforts to deliver the best outcomes forour community. To develop such a plan we have undertakenan extensive analysis of our changing community and thechanging national and state health setting, and engaged inbroad consultation with our community partners, local serviceproviders, councils and staff. The strategic plan sets a newvision for our future - a clear direction of where we wantNorthern Health to be in five years’ time.Integral to our ability to achieve our vision of a healthiernorthern community is our workforce. The 3,250 staff who workacross our five campuses are the face of Northern Health andtheir commitment to the Northern community is exceptional.I’d like to thank them, and our wonderful army of volunteers, forall their efforts over the past year.Thank you also to our Board of Directors and the NorthernHealth Executive team with whom I look forward to finalisingand implementing our new strategic plan that will enable us tomeet the challenges that lie ahead.Planning has begun for the $24.4 million expansion of TheNorthern Hospital’s Emergency Department and Special CareNursery. The expansion will see the Emergency Departmentgrow from 38 to 60 cubicles and the Special Care Nursery growfrom 12 to 23 cots. Building works are expected to be completein Dec 2013.Planning for our state-of-the-art Teaching Training and ResearchPrecinct was also finalised this year in conjunction with ourpartners University of Melbourne, La Trobe University and theCommonwealth and State Governments. Construction on the$34.4 million precinct is due to begin in February 2013 and thetwo storey facility will include a simulated learning laboratory,research laboratory, tutorial rooms and shared student areas.While these expansions will go some way in helping usmeet the future demand for health services in the north,recent Census data has underscored the urgency of longtermplanning. With the Northern Health catchment alreadyconstituting close to three quarters of a million people,population projections for the next 20 years indicate our primarycatchment is expected to grow by 76.7 per cent over the next20 years.Significantly, the demand for local health services will includeincreased care for those most vulnerable members of ourResponsible Bodies DeclarationIn accordance with the Financial Management Act 1994, I ampleased to present the Report of Operations for Northern Healthfor the year ending 30 June, 2012.Greg PullenChiel Executive Officer4 annual report Northern Health 11/12

Our primary catchmentis expected to grow by77 per cent over thenext 20 years11/12 Northern Health annual report 5

Northern Health BoardProfessor Glenn BowesProfessor Glenn Bowes was appointed asChair of Northern Health Board in July 2011for a period of three years.Glenn Bowes is currently Associate Dean(External Relations) and a Professor in theDepartment of Paediatrics in the Faculty ofMedicine Dentistry and Health Sciences atthe University of Melbourne.Glenn completed his medical degreeand PhD at Monash University and hispostdoctoral fellowship at the Universityof Toronto. He was Director of RespiratoryServices at the Alfred Hospital inMelbourne in the 1980s. Glenn wasrecruited to Australia’s premiere children’shospital, The Royal Children’s Hospital,Melbourne, in 1991 to establish the nation’sfirst clinical, academic program in youthhealth, the Centre for Adolescent Health,Glenn become the inaugural Professorof Adolescent Health at the University ofMelbourne. During 16 years at the RoyalChildren’s Hospital campus Glenn held arange of executive leadership rolesincluding Chief Medical Officer, ExecutiveDirector and between 2002 & 2007 wasStevenson Professor of Paediatrics andHead of Department of Paediatrics. Glennhas been a Board member of manyorganisations committed to serving childrenand young people. Glenn was appointedas the inaugural Chair of the VictorianChild Death Review Committee in 1996and served in that role until 2000. He hasalso served as a member of the AustralianCouncil of Children and Parenting and theVictorian Premier’s Drug Prevention Council.He has served as both Board member andChair of Very Special Kids Inc, the YouthSubstance Abuse Service and the RoyalChildren’s Hospital Education Institute. Hehas also served as a Board Member ofthe Royal Children’s Hospital Foundation,the Murdoch Children’s Research Institute,Vic Health, Mentone Grammar Schooland was elected member of Council ofthe University of Melbourne 2008 - 2012.He was President & Camp Chief of LordSomers Camp & Power House 2007 -2012.Ms Marilyn BeaumontWith a registered general and psychiatricnurse background, Marilyn Beaumont hasextensive experience in management andadministration, health policy developmentand analysis, women’s health and healthconsumer rights.Marilyn is a contributor to a number ofadvisory committees to government.Amongst a number of previous Boardpositions Ms Beaumont has held, from2000 to 2009 she was a member of theMelbourne Health Board. She is a currentMr Ian DunnIan Dunn was a partner in a Melbourne lawfirm for nearly 30 years practicing largely inmedico-legal matters.Elected President of the Law Institute in1987 he was appointed CEO of the Institutefrom 1996-2002. From 1998 until 2010 heco-chaired an annual medico-legal forumexamining litigation, risks within hospitals,and quality of medical care. He has beenmember of the Australian Institute ofCompany Directors.Between 1995 to 2010 Marilyn was theWomen’s Health Victoria Executive Director.Between 1987 to 1995 she was FederalSecretary - Australian Nursing Federationand prior to that for five years ANF SouthAustralian Branch Secretary.In 2003 Marilyn was awarded the AustralianCentenary of Federation Medal and in 2007she was inducted to the Victorian HonourRoll of Women for her contribution towomen’s health.an adjunct professor in the school of law atLa Trobe University since 2002.Subsequently he has served as theinaugural Chair of the Victorian Commissionfor Gambling Regulation from 2004-9.He is a nationally accredited mediatorand presently is an Ombudsman (GeneralInsurance) at the Financial OmbudsmanService.6 annual report Northern Health 11/12

Northern Health Board cont’dMr Leigh HockingLeigh Hocking’s background is inmanagement and human resourcesconsulting and corporate governance;fields in which he has over 25 years ofexperience.He is a Director of Magellan ConsultingPartners, an organisational developmentconsulting firm that specialises in majororganisational change, team coaching andleadership development. In those roles MrHocking has worked extensively in both thepublic and private sectors in industries asdiverse as utilities and infrastructure, miningand energy, transport, manufacturing anddefence, emergency services and highereducation to mention some.Mr Hocking is a director Westernport WaterCorporation and also serves on the Auditand Risk Committee of that Board. He wasformerly the Chair of the Board of RuralAmbulance Victoria and was the MinisterialDelegate on the Board of AmbulanceVictoria. He is a Fellow of the AustralianInstitute of Company Directors.Mr Brian JoyceBrian Joyce is a Certified PracticingAccountant and Master of Administration(Monash.) He has extensive experience inHospitals and Health Services managementand financing.Until 2008 Mr Joyce was Regional Directorof the North and West Metropolitan Regionof the Department of Human Services(DHS). During his career with DHS Mr Joyceheld a number of senior executive positionsincluding Director, Primary and CommunityHealth, Executive Director Operations, andRegional Director, Southern MetropolitanRegion. Mr Joyce also held the positionof Deputy Chief General Manager of theformer State Department of Health.Prior to joining the Public Service Mr Joyceheld the positions of Finance Director,Box Hill Hospital and Manager, Financeand Services, of the Victorian Branch ofthe Health Insurance Commission andMedibank Private.Since retiring from the Public ServiceMr Joyce has served as the governmentappointed Administrator of WesternEducation Support and Training Network(WestNet) and Advisor to a Youth JusticeCustodial Services Taskforce. Mr Joycealso undertakes service review work in theHuman Services sector.Professor Gab KovacsProfessor Gab Kovacs is a sub specialist inreproductive gynaecology and has been amember of the Monash IVF team since hisreturn from postgraduate training in the UKin 1978.He has been President of The FertilitySociety of Australia, Family PlanningAustralia, Family Planning Victoria, andChairman of The IVF Directors’ Groupof Australia. Professor Kovacs was aCouncillor of the College of Obstetricsand Gynaecology for a period of six yearshaving chaired its Continuing Educationand Women’s Health Committees. He isa director of ACCESS, Australia’s nationalinfertility network.He is professor of Obstetrics andGynaecology at Monash University and haspublished more than 130 scientific papers,over 30 chapters in textbooks, and haswritten five books for the public and editedfour textbooks.Professor Kovacs interests and expertiseare in IVF, Ovulation induction, PCO, DonorInsemination, infertility surgery, male subfertility, contraception and sterilisation.11/12 Northern Health annual report 7

Northern Health Board cont’dProfessor Vin MassaroProfessor Vin Massaro has considerableexperience in senior management in highereducation and health institutions, and asa consultant and adviser in Australia andinternationally. He has also chaired or beena member of several boards.Professor Massaro is currentlyManaging Director of Massaro Consulting,a company providing strategic advice onhigher education policy, managementand governance, and on health workforceplanning and training to organisations andgovernment departments.He has been Chief Executive of the RoyalAustralasian College of Surgeons andwas the inaugural Chief Executive of theVictorian State Board of Education. He hasheld senior positions at Flinders Universityand the Lincoln Institute of HealthSciences. He has also been a consultanton higher education to the OECD and isEditor of its international Journal of HigherEducation Management and Policy.Professor Massaro’s Board roles haveincluded the Anti- Cancer Foundation ofSouth Australia, the Australian Safety andEfficacy Register of New InterventionalProcedures - Surgical (ASERNIP-s),Flinders Reproductive Medicine, FlindersConsulting and the Advisory Board of theCentre for International Mental Health at theUniversity of Melbourne.He holds a Professorial Fellowship in theAustralian Health Workforce Institute, a jointInstitute of the Universities of Melbourneand Queensland, and is a ProfessorialFellow in the LH Martin Institute for HigherEducation Leadership and Managementand the Centre for the Study of HigherEducation at the University of Melbourne.Ms Sabine PhillipsSabine Phillips is currently a Principalwith Russell Kennedy Pty Ltd, a lawfirm in Melbourne. Ms Phillips has beenwith Russell Kennedy since 2004 andworks in the area of Health and AgedCare. Ms Phillips has a Master of Laws(Legal Practice) and a Master of Business(Organisational Behaviour).Ms Phillips is also a registered nurse(Division 1) and has been a proprietor ofMs Sue RenkinSue Renkin has held Chief Executiveappointments since 1984 in health andemergency services industries. Her focushas been on the restructure of organisationsto improve profitability and business growththrough business development, motivationalleadership, change management, branddevelopment and strategic vision.Ms Renkin commenced her career innursing, moved into hospital managementin 1983, and held CEO appointments inthe hospital sector until 1998. Ms Renkincompleted an MBA from Monash Universityin 1995 and has since studied StrategicManagement at Harvard University in theUSA.In 1997 Ms Renkin was awarded the Telstraaged care facilities. She is a member ofthe Law Institute of Victoria, a Fellow of theRoyal College of Nursing Australia, and anAssociate Fellow of the Australian Collegeof Health Service Administrators. Ms Phillipsis also a sessional member of the VictorianCivil and Administrative Tribunal on theOccupational and Business List.Ms Phillips brings to Northern Health awealth of experience in health and agedcare and the law.Business Woman of the Year Award for theprivate sector.Ms Renkin has been actively involved ingovernment lobbying for a period and iscurrently a community representative on theAustralian Bravery Council. In addition to herrole as Non Executive Director at NorthernHealth,Ms Renkin currently holds the Chair of theClayton Laboratories Advanced ImagingResearch Centre, the Chair of MonashCentre for Green Chemistry and is amember of the Dean of Medicine AdvisoryBoard at Monash.Ms Renkin was recently appointed Chair ofthe Southern Metropolitan Cemeteries Trustand is a non-executive Director for GeneralPractice Victoria and GMHBA HealthInsurance.8 annual report Northern Health 11/12

2694 babies were bornat The Northern Hospital11/12 Northern Health annual report 5

Corporate GovernanceAppointment of DirectorsTerms of appointment vary from one to three years, at an annualsalary set by the Minister in accordance with guidelines issuedby the Office of the Public Service Commissioner. Note: Boardchanges subsequent to the end of the financial year wereas follows:• On 30 June 2012 the period of appointment ofMs Sue Renkin expired. Ms Renkin completed threeyears of service.• On 1 July, 2012, on the recommendation of the Minister, theGovernor-in-Council appointed Ms Rima Newman fora period of three years expiring on 30 June 2015.• On 1 July, 2012, on the recommendation of the Minister, theGovernor-in-Council reappointed Professor Vin Massaro andMs Marilyn Beaumont for a period of three years expiring on30 June 2015.Role of the BoardThe role of the Board is to exercise good governance in theachievement of Northern Health’s stated objectives. Keyaspects of this governance role include:• Setting the organisation’s strategic direction;• Establishing a policy framework (primary policy);• Appointing the Chief Executive Officer and monitoringthe performance of the Chief Executive Officer;• Evaluating organisational performance;• Ensuring organisational accountability and compliancewith legislative requirements; and• Evaluation of the Board’s own effectiveness ingovernance The Directors contribute to the governanceof Northern Health collectively as a board throughattendance at meetings, of which there are 11 per year.Individual contribution occurs through participation orchairmanship of the various Committees of the Boardand between Committee meetings they are oftenapproached to direct or assist management in theperformance of their Northern Health functions.Directors also give their time to attend significant functions andMinisterial events across Northern Health. The Board meetsmonthly, with 11 meetings held in the financial year1 July, 2011 to 30 June, 2012.Board Meetings & Access to ManagementAt these meetings, members of the Northern Health Executiveregularly present papers on their areas of responsibility in theHealth Service. Between meetings, individual Board membershave regular contact with management through committee orproject involvement and are regularly contacted by the ChiefExecutive Officer on major issues. Northern Health comprisesfive separate campuses, and the Directors are encouraged toundertake site visits in order to view first hand the activities andservices provided at hospitals and facilities.Delegation of FunctionsThe by-laws provide for the delegation of duties by the Board,and the Board has approved a detailed Delegations Policyenabling designated Northern Health executives to performtheir duties through the exercise of set authorities. The ChiefExecutive Officer may vary such delegations downward duringperiods when, or in areas where, tighter temporary controlsare required. However delegated authorities cannot be variedupward to the extent that they would exceed delegationsinitially approved by the Board.Board CommitteesDirectors lend their expertise to the operations of Committeesof the Board and in this way some of the general functionsof the Board are delegated to individuals or small groups ofDirectors. During the year the following Board Committeescomprised the Directors listed:Audit & Risk CommitteeMr Brian Joyce (Chair)Professor Vin MassaroMs Sue RenkinMs Sabine PhillipsIn addition to these board members, representativesfrom management also attend meetings of the Audit& Risk Committee.During the year the following staff were in regularattendance:Mr Greg Pullen (Chief Executive Officer)Mr Sam Costanzo (Executive Director, Finance, Client DataManagement, Corporate Communications and Foundation)Mr Robert Burnham (Executive Director, Corporate Services,IM & ICT & Diagnostic Services)Mr Henk de Deugd (Executive Director, Corporate Services)A/Prof Kwang Lim (Chief Medical Officer)Ms Jenni Smith (Executive Director, Ambulatory and ConsultingServices/Chief Allied Health Officer)Ms Maree Cuddihy (Executive Director, Business Performance,Planning and Workforce and Clinical Governance)Ms Robynne Cooke, Executive Director, Medical and ContinuingCare Services/Chief Nursing Officer)10 annual report Northern Health 11/12

Corporate Governance cont’dMs Jenny Peterson (Quality, Safety & Risk Manager)Mr John Delinaoum (Director of Finance)Mr Greg Patterson (Financial Controller)Meetings were also attended by representatives from NorthernHealth’s internal and external auditors.The Audit & Risk Committee assists the Board in fulfilling itsfinancial management and related reporting responsibilitiesfor Northern Health including compliance with laws andregulations, the maintenance of an effective and efficient auditsystem and the maintenance of ongoing relationships withNorthern Health’s auditors.Corporate CommitteeProf Vin Massaro (Chair)Ms Sue RenkinMr Brian JoyceProf Gab KovacsDuring the year the following staff were in regularattendance:Mr Greg Pullen (Chief Executive Officer)Mr Sam Costanzo (Executive Director, Finance, Client DataManagement, Corporate Communications and Foundation)Mr Robert Burnham (Executive Director, Corporate Services,IM & ICT & Diagnostic Services)Mr Henk de Deugd (Executive Director, Corporate Services)A/Prof Kwang Lim (Chief Medical Officer)Ms Jenni Smith (Executive Director, Ambulatory and ConsultingServices/Chief Allied Health Officer)Ms Maree Cuddihy (Executive Director, Business Performance,Planning and Workforce and Clinical Governance)Ms Robynne Cooke, (Executive Director, Medical andContinuing Care Services/Chief Nursing Officer)Mr John Delinaoum (Director of Finance)Mr Greg Patterson (Financial Controller)Workforce, Organisational Development, ResearchAnd Education CommitteeProf Gab Kovacs (Chair)Ms Sue RenkinProf Vin MassaroMr Leigh HockingIn additional to these Board Members the Committeecomprises the following members:Mr Greg Pullen (Chief Executive Officer)Mr Robert Burnham (Executive Director, Corporate Services,IM & ICT & Diagnostic Services)Ms Fiona Middleton (Executive Director Surgical, Obstetrics& Paediatric Services)Ms Jenni Smith (Executive Director, Ambulatory and consultingServices/Chief Allied Health Officer)Ms Maree Cuddihy (Executive Director, Business Performance,Planning and Workforce and Clinical Governance)Ms Robynne Cooke (Executive Director, Medical and ContinuingCare Services/Chief Nursing Officer)A/Prof Kwang Lim (Chief Medical Officer)Prof Peter Brooks (Executive Director of Research, ChairNorthern Health Research Committee)Mr Sam Costanzo (Executive Director, Finance, Client DataManagement, Corporate Communications and Foundation)Mr Roger Nicholls (Director of Human Resources)Ms Anne Wright (Organisational Development Manager)Ms Robyn Smith (Chair of Northern Health Learning Committee)The Workforce, Organisational Development, Research andEducation Committee was established to ensure that NorthernHealth is able to meet future changes and challenges andprovide best quality services to our patients.The Committee provides advice to Northern Health Board on:strategic workforce initiatives to support the provision of clinicalservices; relevant, organisational development issues acrossNorthern Health; relevant workforce metrics to guide decisionmaking; education and research strategies and the policiesrequired to achieve the vision for Northern Health.The Strategic Workforce Plan has guided activities to supportNorthern Health meeting its workforce needs through beingan attractive employer. This has been supported by theOrganisation Development Strategy that focuses on aligningeffort, building staff capability and creating the right culture.Quality CommitteeMs Sabine Phillips (Chair)Prof Gab KovacsMr Leigh HockingMs Marilyn BeaumontIn addition to these Board Members, the Committeecomprises the following members:Mr Greg Pullen (Chief Executive Officer)Mr Robert Burnham (Executive Director, Corporate Services,IM & ICT & Diagnostic Services)11/12 Northern Health annual report 11

Corporate Governance cont’dMr Neville Kurth (City of Whittlesea)Mr Phillip Bain (Northern Division of GPs)– until November 2012Ms Annette Knopf (Northern Division of GPs)– from March 2012Mr Bruce Watson (Hume/Whittlesea Primary Care Partnership)– until November 2012Mr Max Lee (Hume/Whittlesea Primary Care Partnership)– from March 2012The Population Health Advisory Committee is a sub-committeeof the Northern Health Board. Its function is to encouragepopulation health approaches within Northern Health andthe Northern Health catchment through supporting effectivecontribution from all health sectors. It ensures the developmentof mechanisms for active dialogue and participation betweenNorthern Health and primary health providers. It is also a forumfor effective coordination of hospital and community basedprimary care services to improve continuity of care for clients.This may include direct service partnerships with other healthand community services, commissioning research in relevantareas and working in partnership with other local agencieson health promotion schemes. The Committee is resourcedby Mr Gerry O’Donnell (Manager, Community & Primary CarePartnerships).Director’s Attendance For Board And Sub Committee Meetings – 1 July 2011 – 30 June 2012BoardCommunityAdvisoryWorkforce,OrganisationalDevelopment,Research andEducationCommitteeBoardQualityCommitteePopulationHealthAdvisoryCommitteeCorporateCommitteeAudit andRiskCommitteeRemunerationandAppointmentsCommitteeTotalNo. of Meetings126265125250Glenn Bowes111(in attendance)1(in attendance)1(in attendance)103229Vin Massaro102113From Sept26Gab Kovacs1022822Sabine Phillips1052From Sept5From Dec325Marilyn Beaumont105546From Dec30Brian Joyce95105231Sue Renkin824317Ian Dunn1053From Sept5From Dec23Leigh Hocking106255From Dec23011/12 Northern Health annual report 13

Executive TeamMr Greg Pullen,Chief Executive OfficerMHA GDHSM B.Bus (Accounting)Greg Pullen is the Chief Executive Officerof Northern Health. Before joining NorthernHealth he was the CEO of GoulburnValley Health, the regional referral hospitalfor north-eastern Victoria. Mr Pullen’sprofessional memberships include Fellowof the Australian Institute of CompanyDirectors (FAICD), Associate Fellow ofthe Australian College of Health ServiceExecutives (AFCHSE), Fellow of theAustralian Society of Certified PractisingAccountants (FCPA) and Associate Fellowof the Australian Health Services FinancialManagement Association (AHSFMA).Professor Peter Michael Brooks,Executive Director, ResearchAM MD FRACP FAFPHM FAFRM FRCP (Glas. Edin)Professor Peter Brooks is currentlyExecutive Director of Research at NorthernHealth and is also Director of the AustralianHealth Workforce Institute at the Universityof Melbourne.He has held previous posts Executive Deanof Health Sciences at the University ofQueensland, as Professor of Medicine atSt. Vincent’s Hospital, Sydney (University ofNew South Wales) and was the FoundationProfessor of Rheumatology at the RoyalNorth Shore Hospital and the Universityof Sydney.Professor Brooks has completed hismedical training at Monash University inMelbourne and then studiedrheumatology under Professor WatsonBuchanan in Glasgow.He has a major interest in medicalresearch, in particular, the linking ofbasic and clinical research and ininternationalisation and the development ofpostgraduate training. More recently he hasdeveloped an interest in health workforceand inter-professional learning.Professor Brooks has published widely inthe treatment and outcomes in arthritis, onmedical education and health workforce.He has had continuous NHMRC researchfunding for over 25 years.Mr Robert Burnham,Executive Director, Corporate Services, IM & ICT & Diagnostic ServicesRN, RM, Crit Care, Bch App Sc (Admin), Grad Dip (Hlth Admin), MHA, AFACHSE.As the Executive Director, CorporateServices, IM & ICT & Diagnostic Services,Robert Burnham brings with him more than39 years of acute health care experience.Mr Burnham built on his clinical nursingbackground and progressed through senioradministrative and management rolesincluding Human Resources, IndustrialRelations and Chief Nursing Officer. Healso has extensive experience in managingcapital projects and service developmentbeing the former General Manager of TheNorthern Hospital, which has undergonesignificant redevelopment, as well ashis involvement in the original NorthernHospital project.Mr Burnham has represented NorthernHealth on various Department of Health(DoH) advisory committees includingthe Patient Management Task Forcethat reviewed acute health services inmetropolitan hospitals, the DoH Patient andClient Management Information SystemsCommittee, and is currently serving asecond term on the DoH Intensive CareAdvisory Committee.14 annual report Northern Health 11/12

Executive Team cont’dAdjunct Professor Robynne Cooke,Executive Director, Medical and Continuing Care Services, Chief Nursing OfficerRN, Ba Nursing, Grad Dip (Gerontology) MHSM, MRCNA, GAICD, MACHSMRobynne Cooke has worked extensively inthe public health sector in Melbourne formany years and is currently the ExecutiveDirector for the Medical and ContinuingCare Program at Northern Health as well asthe Chief Nursing Officer.Robynne commenced at Northern Healthon 2008 as the Director of Nursingand Director of Operations at BundooraExtended Care Centre.Robynne was awarded the Deakin/HealthSuper 2010 Leadership in Nursing andMidwifery Award for her commitmentto nursing leadership. In 2011 Robynnereceived second prize in the SACsConsulting Awards in the State GovernmentSector – Executive Leader.Robynne has previously worked atMelbourne Health as a Director, theDepartment of Health and alsoAustin Health.Robynne has a strong interest indeveloping nurse leaders of the futureand in raising the profile of nursing andNorthern Health within the health sector.Mr Sam Costanzo,Executive Director, Finance, Client Data Management,Corporate Communications and FoundationB.Bus (Accounting and Business Law) CPASam Costanzo joined Northern Health inApril 2005, and has been working in thepublic healthcare system since 2001.Mr Costanzo previously worked withWestern Health (2001- 2005), TXU(formerly Westar Pty Ltd) (1999-2001),Westar Pty Ltd (formerly Gas & Fuel)(1997- 1999) and Whittlesea City Council(1994-1997). Mr Costanzo is a member ofCPA Australia.In his current role he is responsible forfinancial governance and oversight insupport of the CEO and Executive Team.Ms Maree Cuddihy,Executive Director, Business Performance, Workforce Planningand Clinical GovernanceRN, RM, Grad Cert Onc, BN, Grad Dip Nurs Admin, M.Bus (Mgt)Maree Cuddihy has worked in the publicsector since she qualified and has astrong knowledge of, commitment to, andenthusiasm for healthcare in general. Shehas senior experience in large and smallcomplex organisations, in both clinicaland support positions. In her current roleshe is responsible for critical strategiclevel support to the CEO and seniormanagement and has responsibility forHuman Resources, Clinical Governance,Planning and Redesign.11/12 Northern Health annual report 15

Executive Team cont’dAssociate Professor Kwang Lim,Chief Medical OfficerAssociate Professor Kwang Lim joinedNorthern Health in 1999. AssociateProfessor Lim was appointed Chief MedicalOfficer in 2010 and is also the ClinicalDirector, Medicine. He is an AssociateProfessor in Medicine at MelbourneUniversity as well as a Fellow of theAustralian College of Physiciansin Geriatric and General Medicine.Associate Professor Lim has previousobtained a medical doctorate related tohealth services research and currently hasresearch interests in aged care and healthservices delivery.Ms Fiona Middleton,Executive Director Surgical, Obstetric and Paediatric ServicesBch Applied Science (Nursing), Grad Dip Health Administration, Masters – HealthService ManagementFiona Middleton is the Executive Directorof Surgery, Obstetrics and Paediatrics. MsMiddleton began at Northern Health in2009 and was appointed to her currentposition in 2011.Prior to joining Northern Health MsMiddleton held senior managementpositions at The Alfred and PeterMacCallum Cancer Institute. Ms Middletonis a member of the Royal College ofNursing Australia.Ms Middleton has a strong interest inworkforce redesign and development ofnew models of care.Ms Jenni Smith,Executive Director, Ambulatory and Consulting Services/Chief AlliedHealth OfficerB App Sci (Phyth), Grad Dip Physiotherapy (Research)Jenni Smith commenced with NorthernHealth in 2002 and was appointed to theposition of Executive Director of Ambulatoryand Consulting Service in 2009 and ChiefAllied Health Officer in 2010. She hasan extensive background in the deliveryof healthcare services in both the publicand private sectors and has served onnumerous industry and professionalcommittees. This experience has includedthe development and implementation ofsustainable quality improvement systemsand appropriate clinical governancestructures in healthcare environments.Recent publications and presentations haveincluded integration of interprofessionalclinical practices, undergraduate clinicaleducation, work role design/substitutionand work force development.16 annual report Northern Health 11/12

Organisation StructureNorthern Health BoardChief Executive OfficerGreg PullenChief Nursing OfficerRobynne CookeChief Medical OfficerAssociate Professor Kwang LimChief Allied Health OfficerJenni SmithExecutive DirectorMedical &Continuing CareRobynne CookeDirectorEmergencyServicesDr Shyaman MenonOperations DirectorEmergency ServicesMaree PaneOperations DirectorMedicineMaree GlynnClinical ServiceDirectorMedicine &Continuing CareA/Prof Kwang LimExecutive DirectorAmbulatory andConsulting ServicesJenni SmithOperations DirectorCommunity ServicesCarolyn FlowerOperations DirectorHealth IndependenceProgram ServicesWesley SmithOperations DirectorOutpatient &Specialist ConsultingClinicsGillian DickmanSite ManagerCraigieburn HealthServiceCherie HunterExecutive DirectorSurgical, Obstetrics& PaediatricsServicesFiona MiddletonActing OperationsDirectorSurgeryChristine MarksClinical ServiceDirectorSurgeryDr Neil StrugnellOperations DirectorMaternity, Women’s& Children’sMichelle MorrowClinical ServiceDirectorPaediatricsDr Simon HauserExecutive DirectorCorporate Services,IM & ICT & DiagnosticServicesRobert BurnhamChief InformationOfficerBill O’BrienDirectorIT Projects& BusinessApplicationsValerie ThiessenDirectorFacilitiesManagementDenese UnicombDirectorEngineering& Building ServicesColin WoodwardExecutive DirectorBusinessPerformance,Planning, WorkforceClinical GovernanceMaree CuddihyDirectorHuman ResourcesRoger NichollsManagerQuality, ClinicalGovernance & RiskJenny PetersonDirectorStrategic & ServicePlanningOliver FurnessManagerPartnershipsGerry O’DonnellExecutive DirectorFinance, Client DataManagement,CorporateCommunicationsand FoundationSam CostanzoDirectorFinanceJohn DelinaoumDirectorClient DataManagementTerri FiorenzaDirectorFoundation andCorporateCommunicationsRyan BrownExecutive DirectorResearchProf Peter BrooksActing ClinicalService DirectorICUJohn GreenClinical ServiceDirectorAged CareSandra BrownClinical ServiceDirectorO&GDr Alex TeareDirectorPharmacyPeter StuchberyDirectorCapital Planning& DevelopmentBrian PopeRadiologyPathologyOperations DirectorInpatient Services/DON BundooraExtended Care CentreMark AitkenOperations DirectorInpatient ServicesDON - BroadmeadowsHealth ServiceTheresa Bowditch11/12 Northern Health annual report 175

Our ServicesNorthern Health is one of Victoria’s busiest health services. Ouracute and sub-acute health services cover a local community ofapproximately 728,000 people and our emergency departmentis the busiest in the state, treating almost 70,000 patients eachyear.Demand for our maternity services is also high with 2,694babies born at Northern Health in 2011-12.The Northern Health catchment encompasses the rapidlyexpanding local government areas of Banyule, Darebin, Hume,Nillumbik, Whittlesea and Moreland.We have 3,250 staff and approximately 200 volunteers workingacross five operating campuses: The Northern Hospital;Broadmeadows Health Services; Bundoora Extended CareCentre; Panch Health Service and Craigieburn Health Service.The northern community is located in one of Melbourne’s mostsignificant growth corridors and our local population is expectedto grow by 64% or an additional 128,569 people by 2031.Our local community is extremely diverse with more than118 different languages spoken and many of our communitymembers experience significant socio-economic disadvantage.We currently make about 200 appointments per month forAboriginal people at our outpatient clinics, and we see two tothree Aboriginal people a day in our Emergency Department.We also have, on average, one Aboriginal baby born each weekat The Northern Hospital.Our vision at Northern Health is to create a healthier northerncommunity, and our key challenge now and in the years ahead,will be to continue to provide accessible, quality care to meetthe varied and growing needs of northern residents.18 annual report Northern Health 11/12

Our Services cont’dAdmitted Patients & Emergency$233.5mMedicine&ContinuingCare587bedsGeneral MedicineandGeneral SurgerySpecialist Medicine,Specialist SurgeryandEmergencyDay SurgeryandDay MedicalPaediatricIntensive Care,Aged Care,MedicineHigh DependencyRehabilitationandandandSurgeryCoronary CarePalliative CareSurgery,Obstetrics&Paediatrics8operatingtheatresGeriatricEvaluationandManagementFinanceObstetrics,GynaecologyandNeonatologyBusinessPerformance,PlanningandWorkforceandCorporateServices11/12 Northern Health annual report 19

Our Services cont’dOutpatients & Ambulatory$81.3mAmbulatory&ConsultingServicesCommunityTherapyServicesVolunteersandChronic WoundServiceDiabetesServicesandHandtherapySpecialistConsultingRoomsPsychology,NeuropsychologyandOccupationalTherapyHarp ServicesandPlanned ActivityGroupMusicTherapy,AdultRehabilitationandSocial WorkCommunityServices,OrthoticsandPodiatryDay Activity Centre,PhysiotherapyandSpeech TherapyBusinessPerformance,PlanningandWorkforceFinanceandCorporateServices20 annual report Northern Health 11/12

Our Services cont’dOther Services$36mFinanceServicesRetail ServicesCapitalProgramsCorporateServicesDepreciationSpecialPurposeFunds11/12 Northern Health annual report 21

1300 patients are treatedat The Northern HospitalsEmergency Departmenteach week

Our AchievementsDeliver quality health services strategic Goal 1At Northern Health we strive to deliver high quality health services that ensure optimal patient outcomes.By constantly monitoring and assessing our programs, improving efficiencies and reducing clinical risk we aimto provide the very best health care to the rapidly expanding northern community.National leader in overall length ofstay performanceNorthern Health’s ongoing improvement activities have ledto significant reductions in the average length of stay of ourpatients. By improving the way we plan, treat and communicatewith our patients, we have reduced the time patients needto stay in hospital. Getting patients back to their homes andfamilies as quickly as possible ensures that we can treat thenext patient waiting for our services, and our patients cancomplete their recovery in the safety and comfort of theirown homes.Data provided by the Health Roundtable, an independent nonprofitorganisation that helps health organisations to benchmarkperformance, shows Northern Health’s length of stay (LOS) isone of the best in the nation. The Health Roundtable uses arisk-adjusted length of stay known as the Relative Stay Index(RSI), and Northern Health’s current RSI of 78 per cent iswell ahead of the median performance of our peer hospitals,indicating Northern Health is maximising our limited resourceswhile reducing delays and duplication to ensure efficient healthservice delivery.Exceeding quality and safety keyperformance indicatorsNorthern Health’s key performance indicators for quality andsafety, such as hand hygiene compliance, are monitored byclinicians and managers, and are reported to the NorthernHealth Board Quality Committee. Data is audited threetimes each year in six inpatient units and the results aresubmitted to Hand Hygiene Australia. Effective hand hygieneis fundamental in ensuring quality and safety and 2011 resultsshow Northern Health’s overall compliance rate is 79 per cent,which is significantly higher than the 65 per cent target set bythe Department of Health and well above the overall nationalcompliance rate of 76.3 per cent.National Safety and Quality Health ServiceStandards accreditationNorthern Health actively participates in the Australian Councilon Health Care Standards (ACHS) accreditation program, whichassesses our commitment to providing high quality care, a safeenvironment and a culture of continuous improvement. This isone way the quality and safety of care we provide is measuredand indicates that industry wide, national standards are beingmet. In 2011, Northern Health enrolled in the National Safetyand Quality Health Service Standards Program with ACHS andsubmitted a self-assessment against the National Safety andQuality Health Service Standards in 2012. We are preparing toundergo an organisation-wide survey against the National Safetyand Quality Health Service Standards in 2013.Improving teamwork with Team STEPPS programImproving communication and team work is a priority atNorthern Health. In 2011 Bundoora Extended Centre was chosenas one of five Victorian sites to trial the Victorian Team STEPPS®Pilot Project (Team Strategies and Tools to Enhance Performanceand Patient Safety), sponsored by the Victorian Quality Council.The project uses effective, evidence-based tools and techniquesto improve teamwork, communication and patient safety. Staffhave enthusiastically adopted various elements of the programand continue to incorporate them into daily practice. The pilotproject has demonstrated improved communication throughdocumentation and reporting of clinical changes.Leading the way with a new Stroke Strategy PlanThe implementation of Northern Health’s Stroke StrategyPlan has proven to be very successful, with a national auditindicating Northern Health is outperforming peer sites. The newAcute Stroke Pathway aims to improve patient care by reducingvariation in clinical practice and promoting evidence-basedpractice and incorporating all medical, nursing and allied healthintervention together to ensure information is easily accessible.The Acute Stroke Pathway is used for patient documentationand includes a generic pre-morbid assessment that iscompleted by the team to reduce documentation duplicationand repetition of questions to the patient. It also includesprompts for medical, nursing and allied health staff onrecommended stroke management to ensure the team providescare using evidence based principles. The Acute StrokeTeam under take fortnightly education sessions and monthlymanagement and planning meetings to continue to improveacute stroke services. In April, The Northern Hospital introduceda new emergency code called, “CODE STROKE” that aims toimprove access to thrombolysis for patients by facilitating rapidassessment of stroke patients presenting within the 4.5 hourtime window. Currently, eligible patients are transferred to AustinHealth for thrombolysis, however The Northern Hospital plans tostart providing thrombolysis to stroke patients this year. Raisingawareness and improving support for patients with diabetes11/12 Northern Health annual report 23

Our Achievements cont’dDeliver quality health services strategic Goal 1In March, The Northern Hospital, in partnership with Plenty ValleyCommunity Health, hosted a diabetes education workshopaimed toward the local Aboriginal community.The workshop was an interactive session where participantswere invited to share personal stories and had the opportunity toget their eyes, feet, blood pressure and blood readings checkedby qualified staff.Northern Health was an active participant in National DiabetesWeek again this year, raising awareness and educating aboutthe risk factors and prevention for type 2 diabetes, includingthe importance of regular eye checks for people with diabetes.Displays at Broadmeadows Health Service and BundooraExtended Care Service provided the opportunity to literally seethe degenerative effects on eye health through modified glassesthat simulate retinopathy.Nurse Practitioner model growthNorthern Health’s Nurse Practitioner model achieved significantgrowth with three new Nurse Practitioner Candidates welcomedto our Emergency, Diabetes and Oncology teams.The Nurse Practitioner role includes comprehensive assessment,evaluation and management of patients using nursingknowledge and skills and may include but is not limited to,the direct referral of patients to other health care professionals,prescribing medications and ordering diagnostic investigations.Nurse Practitioners also participate in educational activitiesincluding in-service programs, providing mentorship withinnursing and advanced practice roles and often undertake qualityand research projects within their field of specialty. At NorthernHealth, there are now four Nurse Practitioners and four NursePractitioner Candidates working across a range of specialties.Orthoptics led clinics for cataract and diabetesassessment and monitoringNorthern Health is using a Department of Health fundedworkforce innovation grant in Orthoptics to trial and implementOrthoptics Led clinics in the areas of cataract and diabetesassessment and monitoring. These clinics allow better utilisationof the skills of our Ophthalmology workforce in being able tomanage those with the most urgent need, while our Orthoptistsprovide assessment and monitoring of basic eye disease.Enhanced recovery after surgery protocolThe introduction of Northern Health’s Enhanced recovery aftersurgery (ERAS) protocol is designed to improve nutritionalintake for patients following colorectal surgery and has madesignificant improvements in length of hospital stay for thesepatients, reducing the number of days from 10.5 days (2010)to 6.8 days (2011).Development of The Northern Hospital asa dialysis hubWith the number of people requiring dialysis for chronic kidneydisease growing by approximately five per cent each year,Northern Health has identified the development ofa comprehensive renal service as a priority. The provision ofa comprehensive renal service at The Northern Hospital forpeople who live in the outer northern suburbs of Melbourne willdeliver care to patients much closer to home. In conjunction withthe Department of Health, Northern Health is working to providelocal renal services for patients, including:• Pre dialysis care and education;• An in-centre dialysis unit for people who require hospitaladmission;• Home training service to provide training and support forpatients in their homes;• Inpatient peritoneal dialysis support;• Facility dialysis services based at Broadmeadows,Craigeburn and Epping; and• Outpatient renal clinics at Epping, Craigeburn andBroadmeadows.Improving Health Records Management policyand processesNorthern Health has made substantial improvements to HealthRecords Management in 2011-12, including digitisation ofrecords, offsite storage and implementation of an electronicdischarge summary.A Northern Health Compliance with Digitisation RequirementsCommittee has been established to oversee the digitisationprocesses for all departments. The Committee implementeda Northern Health Digitisation policy and a DigitisationDelegations policy. To date four sub DAPs have been signedoff by the appropriate Executive Director and the destructionprocess to commence in 2012-2013.After a tendering process, a five year contract was awardedfor the offsite storage of all Northern Health documents anda five year storage plan was endorsed by the Northern HealthBoard. A working group meets fortnightly to review storageopportunities and savings, with the ultimate aim of decreasingoffsite holdings at the end of the five year period.An electronic discharge summary was implemented forinpatients at The Northern Hospital after extensive education ofall clinical staff and a review of The Northern Hospital DischargeSummary policy.24 annual report Northern Health 11/12

Our Achievements cont’dBuild corporate capability (Finances, Infrastructure, Reputation) strategic Goal 2Strong corporate foundations enable Northern Health to deliver high quality health services effectively andefficiently. By extending our infrastructure, carefully managing our financial processes and building ourreputation, we bolster our ability to achieve our vision of creating a healthier Northern community.Improving our infrastructure and progressing theNorthern Health Capital MasterplanBuilding work is about to commence on the EmergencyDepartment and Special Care Nursery expansions at TheNorthern Hospital. This $24.4M project will expand theEmergency Department by 18 patient cubicles and3 resuscitation cubicles and the Special Care Nursery willgrow by 11 cots. This expansion is an essential earlycomponent of Northern Health’s Capital Master Plan to addressincreasing demand on our maternity and emergency services.Works have now been completed to modernise The NorthernHospital’s front reception area, rebuild and expand the CardiacCatheter Laboratory to a ‘state of the art’ facility and addan additional operating theatre and endoscopy procedureroom to assist with our increasing elective and emergencysurgical demand.Planning for the future redevelopment of TheNorthern HospitalPlanning has begun on a revised business case to commenceconstruction of much needed acute inpatient beds at TheNorthern Hospital. Northern Health is working closely withthe Department of Health to finalise the documentationwhich is due to be re-submitted for funding to Treasury for the2013-14 State Budget. The revised $29 million business case isa reduced project scope for 32 inpatient beds and associatedinfrastructure, and is the first stage of a Phase 1, $119 milliondevelopment to deliver an additional 96 inpatient beds, twoadditional operating theatres and an 18 bed Intensive Care Unitin a multi-level tower block which is an important component ofthe Capital Master Plan for Northern Health.Enhanced stock controlBy identifying ‘fast moving’ stock items that are continuallybeing ordered by the wards, we have established mini storerooms within the wards as a repository for fast moving stockitems. A roving stock person periodically visits the wards andreplenishes stock which eliminates the task of ordering stockfrom the ward workload and ensures critical supplies arealways available. The project has enabled better managementof stock, reduced the cost of stock obsolesce and improvedpurchasing power by enabling standardisation of productsacross wards.Improving our environmental sustainabilitySignificant achievements have been made through acoordinated approach to environmental management strategiesthrough Northern Health’s Environmental Steering Committee.Waste reduction strategies have realised up to $110K insavings during the last financial year by implementing a rangeof initiatives including organic waste recycling in the BundooraExtended Care Centre and Broadmeadows Health Servicekitchens where organic waste material is converted into organicsoil additives; introducing degradable garbage bags and usinge-waste collection for all electronic waste and reducing wastein linen services. Northern Health is also an active participantin the Victorian Green Health Round Table which benchmarkssustainability projects with other Health Services.Improved efficiency with implementation ofonline billing processesTo streamline and improve efficiencies in our billing processes,Northern Health has implemented i.PM ECLIPSE bulk billingfor public and overseas eligible outpatients to electronicallyprocess and submit Medicare claims. The project will delivermany benefits including improved timeliness of generatingan outpatient account (from an average of 5 days to 1 day),improved turnaround times for payment of bulk billed accountsfor treating clinicians (from an average of 45 days to under5 days), fewer Medicare rejections and reduced cost of offsitestorage for Medicare slips in the long term and reduction inpaper and other administration costs.11/12 Northern Health annual report 25

Our Achievements cont’dImprove consumer experience strategic Goal 3As a health service provider, our consumers are the focus of our work at Northern Health. Meeting the healthcare needs of our diverse community now and into the future is fundamental to our success. We aim to providehigh quality and effective care that ensures the consumer experience of our services is as positive as possible.Improving time spent on direct patient careIn late 2010 Northern Health commenced a trial of theProductive Ward: Releasing Time to Care program. Theprogram, developed by the UK’s National Health Service, hasproven successful at empowering nursing teams across the UKto improve the way they work and increase the time they spendwith patients. Northern Health’s trial was conducted in Unit Cand the Maternity and Women’s Health Unit at The NorthernHospital, and the Geriatric and Evaluation Management Unit atBroadmeadows Health Service.Project teams received intensive training and completed threefoundation modules which aimed to make the ward morestructured and organised. Initiatives included ‘Patient Statusat a Glance’ boards to ensure staff know what every patientis waiting for ‘Knowing How You Are Doing’ boards to provideward staff with weekly updates on their performance againstpatient safety and access indicators and the ‘Well OrganisedWard’ to reduce the time spent trying to find equipmentand consumables. Pre and post audits indicate significantachievements have been made:• Unit C staff now spend 24 per cent more time providingdirect patient care by reducing the time spent onadministrative tasks;• Maternity staff now spend 25 per cent more time providingdirect patient care by reducing the time spent in motion(walking around the ward to find things/people) andmanaging patient flow; and• The Geriatric and Evaluation Management unit has reducedmedication dispensing time from 44 minutes to 14 minutes.Feedback from participating wards has been extremely positiveand although the formal trial has finished, the participatingwards continue to rollout additional modules focused onimproving medicines usage, admission and discharge planning,and meals management. A final evaluation of the trial in late2012 will help assess opportunities to rollout the program inother wards.Award winning Transcultural and LanguageServicesNorthern Health’s Transcultural & Language Services (TALS)team were proud recipients of the 2011 National ExcellenceAward for Outstanding Contribution to the Translating &Interpreting Industry. The award is the highest recognition inthe industry and was awarded by the Australian Institute ofInterpreters and Translators and reflects Northern Health’slongstanding commitment to cultural competency across itscampuses.Demand for Northern Health’s TALS services continues to growwith approximately 3500 patients per month or 875 patientsper week using an interpreter when dealing with NorthernHealth. The TALS team comprises 17 staff who are accreditedto speak Arabic, Turkish, Italian, Greek, Assyrian & Chaldean,Macedonian, Vietnamese, and Chinese.Working to bridge the health gap in Aboriginaland Torres Strait Islander healthThe Northern Health Aboriginal Support Unit continues towork to build knowledge of local health services within thegrowing northern suburbs indigenous community. In March, TheNorthern Hospital, in partnership with Plenty Valley CommunityHealth, hosted a diabetes education workshop designed tohelp educate the ageing indigenous population about the riskof developing complications associated with diabetes. Theworkshop was an interactive session where participants wereinvited to share personal stories and had the opportunity to gettheir eyes, feet, blood pressure and blood readings checked byqualified staff.In another partnership with Plenty Valley Community Health,Northern Health is working to educate local Aboriginal womenabout the need for pap screens with free workshops and tests.Other key activities for the Northern Health Aboriginal SupportUnit included:• Participation in the Improving the Pathways to Hospital Careproject, led by St Vincent’s Health which will identify existingand implement new pathways of care for ATSI patients;• A joint project facilitated by the Northern Health AboriginalAdvisory Committee between Northern Health, theVictorian Aboriginal Health Service and the Northern AreaMental Health Service (NAMHS) which will result in theemployment by NAMHS of an Aboriginal mental healthclinician and a Koori Mental Health Liaison Officer;• Development of an Aboriginal employment strategy underthe Karreeta Yirramboi state government strategy which willbe implemented in late 2012; and• Development of an Aboriginal maternity program, which willfocus on supporting Aboriginal women, which been fundedthrough the regional Closing the Health Gap strategy andwill commence shortly.26 annual report Northern Health 11/12

Our Achievements cont’dThe outstanding work of Northern Health’s Aboriginal LiaisonOfficer, Karen Bryant was recognised in the SACS Awards forfurthering understanding of the healthcare needs of Aboriginalpatients and their families within Northern Health. Her forwardthinking and creative approach has led to significant increasesin attendances by Aboriginal people at Northern Health,which over time, will help to close the health gap forAboriginal people.The Northern Health Aboriginal Advisory Committee continuesto provide the Aboriginal community with mainstream andprofessional support, input and direction to the AboriginalSupport Unit. It has indigenous community and mainstreammembers and senior Northern Health managementrepresentation.Growing community engagementSince the introduction of a new Community Engagementframework in early 2011-12, Northern Health’s HealthCommunity Development and Consumer Participation Unithas established The Northern Health Consumer Network,comprising consumers and community members with aninterest in health care issues. The Network provides a poolof consumers who can be consulted on various healthcareissues and who are available to provide a consumer/communityperspective on a range of issues. For example, the ConsumerReview group, which is a ‘virtual committee’, provides aconsumer base for staff to consult with in regard to thedevelopment of consumer information materials. Communitymembers have participated in many other projects resultingin the provision of significant advice and insight to NorthernHealth. These include; a cold plating food trial, a way findingand signage project, the redevelopment of the special carenursery, the cardiology redesigning care project and the reviewof many brochures and information sheets.Developed by the Northern Health Advanced Care Planningprogram, Northern Health’s approach uses ‘ACP in 3-steps’:(A) Appoint an Agent;(C) Chat and Communicate; and(P) Put it on Paper.To progress Advanced Care Planning, the team haveprovided staff and community education, developed systemsand processes to support advanced care planning andimplementation and provided direct advance assistance to staff,patients and the community.More Advisory Committee achievementsThe Northern Health Population Health Advisory Committeeis a formal sub-committee of the Northern Health Board withrepresentation from all major primary health care providersin the North, including local government, Medicare Local,RDNS, Women’s Health in the North, Mental Health Services,Department of Health, Community Health and Primary CarePartnerships. This year the Committee focused on diabetesand mental health services and the development andcommencement of the Northern Melbourne Medicare Local andsupported Northern Health’s successful application to becomea World Health Organisation Health Promoting Hospital.The Northern Health Cultural and Staff Diversity Committeecomprises external stakeholders and consumer organisationsincluding amongst others ADEC, the Cancer Council, CEH,Diabetes Australia, City of Whittlesea, Spectrum MRC, MonashUniversity, Ethnic Communities Council of Victoria, FoundationHouse, Women’s Health in the North, and RDNS) continuesto oversee the successful implementation of the NorthernHealth Cultural Responsiveness Plan, and the Northern HealthDisability Action Plan.Progressing Northern Health’s AdvancedCare PlanningNorthern Health’s Advanced Care Planning program is designedto offer inclusive and accessible advance care planning to theNorthern community. Advanced Care Planning is a processof thinking about, talking about and writing down future healthcare decisions. The plan comes into effect if and whena person is unable to make decisions for themselves, andit can help family, friends and the treating clinicians determinewhat medical treatment the person would have wanted in thatsituation.11/12 Northern Health annual report 27

Our Achievements cont’dEnhance access to appropriate services strategic Goal 4The ability to access the right health service, at the right time, in the right place is crucial to Northern Health’sability to deliver appropriate services to the Northern community. With the swift expansion of our local populationand the resultant increase in demand for health care, we are working hard to anticipate and meet the changingneeds and expectations of our community now and into the future.Preparing for new bed configurations acrossThe Northern Hospital and Bundoora ExtendedCare CentreIn early 2012, Northern Health commenced planning for a majorre-configuration of its services at The Northern Hospital andBundoora Extended Care Centre to improve the managementof acute patients and reduce the costs of care delivery. Theproject aims to increase acute bed numbers at The NorthernHospital to support the commissioning of new theatre andcardiac catheter laboratories, while reducing the costs of caredelivery by revising administrative and clinical structures.The project is a huge undertaking that will result in majorchanges to Northern Health’s medical and surgical modelsof care, and the reallocation of staff, equipment and patientsacross two campuses and eight wards. Our project teamand senior executives have been working closely with unionrepresentatives to minimise the disruption to staff and patientsand have undertaken a range of activities:• Commencing nursing staff reallocation process includingselection of the Nurse Unit Managers, commencementof the ANUM reallocation process and receipt of all othernursing Expression of Interest forms);• Discussions regarding reallocation (where necessary) ofAllied Health staff from affected wards;• Formation of working groups including Acute AssessmentUnit model of care working group, Workforce working groupand Logistics working group; and• Continued consultation with relevant unions.The reconfiguration will be incrementally rolled out betweenAugust and September 2012 and the level of planning andpreparation that has been undertaken guarantees a smoothtransition to an improved way of working at Northern Health.Improving services for outpatientsNorthern Health undertook a range of activities andimplemented new initiatives in 2011-12 to improve servicesfor outpatients. These included new auditing requirementsimproving No referral quality, streamlining referral managementprocesses and optimising the use of nursing and alliedhealth clinics and primary care options prior to referrals beingaccepted for specialist management.Other initiatives included:• The establishment of a Pain Clinic for people with chronicpain issues at Broadmeadows Health Service which isstaffed by physiotherapy, psychology, occupational therapyand medical specialists;• The commencement of monthly on site VCAT hearingscommenced at Bundoora Extended Care Centre whichprovides a comfortable and easily accessible service forpatients and families, and means significantly less traveltime as all hearings were previously held in the CBD;• A Community Liaison Forum initiated and hosted by thesocial work team which invited community agencies intothe hospital to share information and learn about eachother’s services;• The introduction of a weekend speech pathology serviceat The Northern Hospital in July 2011 as part of the nationalstroke strategy which ensures that patients are assessedand managed in a timely manner, rather than left ‘nil bymouth’ over the weekend;• The commencement of a Saturday hand therapy servicewhich makes Northern Health the only metropolitan hospitalproviding a weekend service. This service has beenpopular for patients who rely on someone to drive them toappointments and for those who have returned to work andare unable to attend during the week;• Continued development of Primary Contact Services byAllied Health which has led to an Emergency PhysiotherapyPractitioner now working in the Emergency Departmentmanaging musculoskeletal presentations. The NorthernArthroplasty Management Service was also introducedwhich sees a clinician working alongside the medical teamto manage the post-operative follow up of outpatientsfollowing hip and knee replacement surgery;• Expansion of Rehabilitation in the Home services toinclude patients presenting to emergency which enablesphysiotherapists and occupational therapists to providetimely care and support to patients after they aredischarged; and• Commencement of HiP Coordinators and their roleimproving the flow of inpatients to ambulatory services.28 annual report Northern Health 11/12

Our Achievements cont’dEnhancing mental health partnershipsNorthern Health and North Western Mental Health Servicescontinue to build strong clinical and liaison relationships. Thishas allowed both organisations to commence discussions oninnovative models of care to manage the increasing demand formental health services in this catchment.The Northern Hospital campus has the highest number ofacute adult mental health beds in Metropolitan Melbourne. Ona daily basis there is significant pressure to manage the everincreasing demand for acute mental health beds.An escalation process has been developed to ensure that thesegroups of patients are transferred from The Northern Hospitalemergency department into the most appropriate specialisedbed within a timely mannerIn addition both organisations have included the partnershipin their strategic planning process and have committed tocontinue to working together and look for other opportunities tocollaborate over the next few years11/12 Northern Health annual report 29

Our Achievements cont’dStrengthen leadership and develop workforce strategic Goal 5Developing, attracting and retaining a strong and talented workforce is integral to Northern Health’s successas a service provider. As the demand for health services in our community grows, so too does the need forcommitted and qualified staff, which is why strengthened leadership and workforce development is a key priorityfor our organisation.Unveiling the Northern Clinical SchoolIn May 2011, the University of Melbourne Northern ClinicalSchool became independent from its partnership with AustinClinical School, making Northern Health fully responsible forthe training of University of Melbourne medical students oncampus. The move to redevelop the program came after theUniversity of Melbourne was awarded a grant from the FederalHealth Department to develop a program that would attractmore graduates to the northern suburbs of Melbourne in orderto service our community with more qualified clinical staff.In November, a series of demountable buildings was formallyunveiled at The Northern Hospital, marking the official openingof the newly independent Northern Clinical School.By training young doctors in the northern community thereis the hope and expectation that these trained professionalswill return to practice in the north once qualified, eitherwith Northern Health or at local General Practice clinics insurrounding areas.Growing the medical workforceApproximately 200 Hospital Medical Officers and Registrarsbegan their 2012 clinical year with Northern Health and thenumber of medical interns has grown by 27 per cent in thelast two years with a record number of 47 new junior doctorsstarting as medical interns in January at The Northern Hospital.The interns will work across a range of fields, includingMedicine, Surgery and in the Emergency Department. Theywill also alternate through health areas such as Aged Care,Orthopaedics, Vascular Thoraces, Anaesthetics and MentalHealth and for the first time interns will have the opportunity towork rotations in Urology and in Obstetrics and Gynaecology.Northern Health has the first dedicated and accreditedObstetrics and Gynaecology medical intern program in Victoria,which has been of great interest to many new interns. Growthin demand for Northern Health’s intern program has grownsignificantly with 47 junior doctors being selected from 660applications received.Leadership and Management DevelopmentFrameworkA major new Leadership and Management DevelopmentFramework underpins the design and delivery of two NorthernHealth leadership programs targeting the top and middle tiers.The Leadership Directions Program engaged senior medicaland operations directors and the Transforming LeadershipProgram worked with middle managers across all directorates.The development of core management skills was anothertraining focus and more than 120 staff, including medical staff,graduated from the Diploma of Management and Certificate IVcourses.Other training activities include specific skills training in ProjectManagement and Effective Presentations and the launchof the Learning for Leaders lecture series, which receivedoverwhelming support. These lectures aim to give managersand staff effective skills and techniques offered as quick tipsand tool. Topics have focused on understanding performance,implementing change and getting the best from staff.Allied Health workforce developmentIn late 2011, Allied Health ran the second iteration of the‘Leaders of Tomorrow’ development program. This programwas offered to senior grade 1 and grade 2 clinicians. Thethree session program provided clinicians with the opportunityto examine issues around teams and teamwork, power andinfluence in organisations and some fundamental conceptsaround leadership. Participants from the first program (2010)were invited to participate in a follow up two day ‘PositiveConflict Management’ workshop.Innovative Inter-professional Practice Placement is an initiativeled by allied health, working with medical and nursingcolleagues that is making a difference to the way future healthprofessionals are trained. Through the program, studentsare encouraged to work effectively as an inter-professionalcollaborative team. They explore the process of teamwork aswell as developing the clinical skills needed to practice theirown profession. The activities supporting the program developthe leadership and facilitation skills of a range of staff fromnursing, medicine and a range of allied health disciplines.The project, funded by the Department of Health and Ageing,is broadening the way we teach future health professionalsand providing positive learning outcomes to participants.The orthoptics workforce is traditionally utilised in a multidisciplinarysetting, working alongside ophthalmology. Vitalskills in the assessment and management of eye commonconditions are often under-utilised but a Department of Healthfunded workforce innovation grant has enabled orthoptics totrial and implement orthoptics led clinics in the areas of cataract30 annual report Northern Health 11/12

Our Achievements cont’dand diabetes assessment and monitoring. The workforceinnovation allows orthoptists to undertake further trainingthrough competency packages developed in conjunctionwith La Trobe University and will enable orthoptists to assess,diagnose and make clinical decisions about the course ofclinical management using clinical judgement to determinewhether a patient requires ongoing monitoring by orthoptics,requires ophthalmology input or is eligible for discharge tocommunity-based optometry.Nursing education progressIn the last year Northern Health provided approximately 22,500nursing and midwifery placement days for undergraduatestudents and is on track for a similar number this year. NorthernHealth provide places for 85 graduate nurses, and are newstreams are being trialled within the program such as extendedcare settings to increase workforce capacity and capabilities aswell as supporting an inter-professional graduate program fornursing/paramedic graduates. Leadership in Clinical PracticePrograms continue to be facilitated by Associate Professor JulieConsidine for senior clinical nurses across Northern Health.Specialist educators have been introduced to support thegrowth areas of paediatrics and neonates within the serviceand Northern Health nursing education continue to offerpost graduate opportunities to existing and external staff,successfully introducing an advanced practice course for seniorgeneralist nurses as well as supporting and exploring postgraduate opportunities with our university partners.11/12 Northern Health annual report 31

Our Achievements cont’dGrow and translate education and research strategic Goal 6Investing in our future through the growth and translation of education and research is an important componentof Northern Health’s strategic planning. With construction of the state of the art Teaching, Training and ResearchPrecinct due to be completed in 2013-14, Northern Health’s commitment to knowledge generation will bringsignificant benefits for generations to come. The appointment of Professor Peter Brooks as Executive DirectorResearch and the development of Research Strategy has been a significant milestone in the expansion ofNorthern Health’s research capacity.Major funded research initiativesFollowing in-depth international research by NorthernHealth Cardiologist, Associate Professor Peter Barlis, OpticalCoherence Tomography was first introduced into Australia atThe Northern Hospital in March 2009. There are now over 25centres across the country using this imaging modality to bettermanage patients with coronary artery disease and AssociateProfessor Barlis is at the forefront of leading several multi-centrerandomized clinical trials using the technique. A combinationof grant sources ranging from the prestigious National Healthand Medical Research Council to industry sponsored grantsand more recently a $1M Australian Research Council grant areenabling Associate Professor Barlis, the University of Melbourneand Northern Health to remain at the cutting edge of devicesand techniques to better understand and manage our patientswith heart disease and make future treatments safer.Other major research initiatives underway at Northern Healthinclude:• TREAT-telemedicine trial;• Tele-geriatrics trial with Ballarat University; and• Aged Care Assessment in the Emergency Department withUniversity of Queensland.Nursing research successNorthern Health’s Nursing Education successfully submitted fora number of research grants including:• A grant to evaluate the effectiveness of the traditionalpreceptorship model for the Graduate Nurse Programprogram, in light of changes to the current nursing workforcemakeup at Northern Health which is due to be finalised bymid 2013;• A research grant to evaluate the effectiveness of anadvanced practice course for generalist nurses which waspiloted in 2011 and has now been evaluated with a finalreport currently underway;• Funding for the Clinical Supervision Support Program, aprogram that Northern Health are leading for the NorthernClinical Placement network (CPN), which aims to provide aplanned approach to the preparation of health professionalsin the provision of clinical supervision of students acrossthe Northern CPN network, and has attracted support frommany Northern CPN partners; and• Submission for HWA funds in conjunction with Allied HealthLearning and Research to support our current and futureclinical placement growth by developing the educationinfrastructure to support our interdisciplinary students at TheNorthern Hospital, with installation of modern IT equipmentand simulation resourcesNorthern Health’s Nursing Education, together with AlliedHealth Learning and Research, are also currently representingNorthern Health on the Board of Directors for the Developmentand Integration of Centres of Excellence in Simulated BasedEducation and Training in the North, as a result of a recentsuccessful application for HWA funding. For Northern Healththis means we will have funds to build a temporary simulatedteaching unit at The Northern Hospital, purchase additionalsimulation equipment and have the funds for dedicated EFTover the next 12 months to support the development andimplementation of this contemporary teaching medium forstudents and staff.Allied Health educationIn 2012, Occupational Therapy and Hand Therapy offered“pairs” placements to occupational therapy students fromLa Trobe University. This involved one supervisor takingstudents in pairs. In preparation, a workshop and was held forsupervising staff who were also provided with further educationand support prior to the introduction of the new supervisionmodel. A tutorial program was also developed to supportstudent education opportunities and to facilitate peer learning.In the first iteration, 16 students participated and the feedbackfrom both supervisors and students was extremely positive.A collaborative, best practice competency package hasbeen developed for Tracheal Suctioning, to educate speechpathologists in the knowledge and skills necessary to performsafe and effective tracheal suctioning. The package has beenpublished as a booklet and is widely available for state, nationaland an international conference services to purchase. This isthe first training program for health professionals developed inthis area.32 annual report Northern Health 11/12

Our Achievements cont’dThe Department of Health funded Workforce innovation grantin Orthoptics to trial and implement Orthoptics Led clinics inthe areas of cataract and diabetes assessment and monitoringhas led to the development of competency packages, incollaboration with La Trobe University, for Orthoptists workingin each of the clinical areas. These packages will be widelyavailable to other state and national health organisations foruse, and work is underway to ensure inclusion in the Orthopticsundergraduate teaching program.Inter-professional Learning project, auspiced by Northern Healthon behalf of the Northern Metropolitan Clinical PlacementNetwork (NMCPN), is drawing on Northern Health Allied Healthexperience and expertise in helping health professionals tolearn with, from and about one another to improve collaborationand the quality of care. The project offers workshops for staffacross the NMCPN on how to establish and facilitate interprofessionaleducation activities and programs with healthprofessional students. The project is also supporting fouragencies to establish pilot inter-professional student educationactivities in 2012-13.Allied Health was successful in attracting grants for researchand evaluation in a range of clinical and practice areas andstaff have presented nationally and internationally at a varietyof health professional conferences during 2011-12 including:dietetics, physiotherapy, podiatry, speech pathology andinter-professional learning, health professional education,gerontology, wound management and forums such as thehealth round table. This active contribution to the wider healthcare knowledge base through conference presentation andpublication is evidence of a dynamic and growing healthservice.Using Department of Health funding, implementation plansfor two social work initiatives have been developed. The firstinitiative improves communication when a child at risk presentsto Northern Health; the second documents parental interactionswith children at risk in the hospital. Both initiatives are to beconsidered for inclusion in the best practice guidelines for acutehealth services by the Department of Health.Research WeekNorthern Health was again an active participant in ResearchWeek held in November 2011, with opportunities for staff andstudents to showcase their research across the organisationand the wider community. With daily guest speakers and 55poster presentations from staff, this year’s focus was Aged Careresearch, which is also a Northern Health research priority.Attestation on Compliance with Australian/New Zealand Risk Management StandardI, Greg Pullen certify that Northern Health has risk management processes in place consistent with the Australian/NewZealand Risk Management Standard and an internal control system is in place that enables the executives to understand,manage and satisfactorily control risk exposures. The audit committee verifies this assurance and that the risk profile ofNorthern Health has been critically reviewed within the last 12 months.Mr Greg PullenAccountable OfficerNorthern Health20 August 201211/12 Northern Health annual report 33

Thank you to our donors,volunteers and thenorthern community34 annual report Northern Health 11/12

Northern Health FoundationThe Northern Health Foundation made significant progress in 2011-12 towards achieving its fundraisingand strategic goals. After a period of consolidated strategic planning and the establishment of a transparentgovernance structure, the Foundation’s renewed fundraising and communication activity began in earnest andhas already delivered strong results.FundraisingWith a target of raising $3 million within two years, the NorthernHealth Foundation warmly welcomed many new philanthropicfriends and partners this year including:Mr Paul Wheelton, OAM whose generous $500,000gift will help fund the construction of Northern Health’sTeaching, Training and Research Precinct. Mr Wheelton is apassionate supporter of education and a firm believer in thepower of education to change lives which is why he choseto so generously support the training and education of thenext generation of medical professionals at Northern Health;Abbott Vascular, the global leader in cardiac and vascularcare contributed $220,000 towards an OCT imaging systemfor The Northern Hospital’s Cardiology Department;Medtronic, one of the world’s largest producers of medicaldevices, continued their generous support of NorthernHealth with a generous pledge of $45,000 towardsfunding a Research Fellowship which will help train healthprofessionals for the future;Clifford Hallam Healthcare, one of Australia’s largestproviders of healthcare products and keen supportersof teaching and research, contributed $25,000 towardsNorthern Health’s Teaching , Training and Research Precinct;andTuri Foods, long time local supporters of Northern Healthhave generously donated $15,000 towards an Infant IsoletteIncubator for the Special Care Nursery.In addition, the Northern Health Foundation and Places Victoriahave launched the 2013 House and Land campaign where wewill work with partners to build and auction a new family homein Epping and raise $400,000 for the Teaching, Training andResearch Precinct.Growing our supporter baseThe Foundation undertook a broad range of activities this yearto increase awareness of our fundraising goals in order to growthe total number of contributors to the Foundation each year.With a focus on producing effective communications,the Foundation developed a new brand identity anda comprehensive donor communication strategy. A newsuite of information materials was produced targeting specificdonor audiences with a general information pack, corporatebrochure and bequest brochure s being distributed to existingand potential supporters and displayed throughout NorthernHealth facilities.The Foundation also developed and launched a brand new,easy to navigate website that showcases Northern Health’swork, provides regular fundraising updates and encouragesnew supporters.The Foundation’s supporter base has grown significantly as aresult of these activities. One of the higher profile supporters tojoin the Foundation this year was Melbourne Victory, with theteam visiting the paediatric ward in February to spend time withsome of Northern Health’s youngest patients.The Batten Society, named in honour of Les and Muriel Batten,who once owned the land where the Northern Hospital is nowlocated, is another special supporter group whose membershave chosen to leave a bequest to Northern Health. Meetingevery three months, the Batten Society comes together tohear updates from Northern Health senior executives, receivehospital tours and enjoy guest speakers over lunch. Membersoften assist with volunteering or providing help for key NorthernHealth Foundation activities.The support of Northern Health staffA key aspect of the Foundation’s work is to enlist the valuablesupport of Northern Health staff as much as possible. Byformally launching a Work Place Giving program, the Foundationhas made it easier than ever for staff to make a differencethrough regular support and already more than $6,000 hasbeen raised through fortnightly deductions.Several staff have also taken a personal approach tofundraising, with members of the Cardiology team led byAssociate Professor William van Gaal, contributing more than$7,000 in a workplace donation to support completion of TheNorthern Hospital’s new Cardiac Cathetar Laboratories.Jason Brook’s big hearted fundraiser for two very sick childrenin the Children and Adolescent Health Unit saw him cut his longhair for the first time in three years in order to raise $7,000 tosupport the families of the two children.Northern Health staff also participated in the Arthurs Seat Bay2 Bay bike ride in April, with the ‘Dream Team’ raising valuablefunds for the Foundation.11/12 Northern Health annual report 35

We are dedicated to providingthe highest standards ofquality and innovative care2 annual report Northern Health 11/12

Statement of PrioritiesThe Statement of Priorities is an annual agreement between Victorian public health services and the Minister for Health. Theagreements facilitate delivery of substantial progress towards the shared objectives identified in the Victorian Health PrioritiesFramework 2012-2022. The table below lists the status of the specific strategies Northern Health committed to undertake.Victorian Health Priority Northern Health Strategy Deliverables StatusDeveloping a systemthat is responsive topeople’s needs• Commence a pilot project forthe development of culturallyappropriate pathways for Kooriwomen birthing at NorthernHealth.• Implement relevantrecommendations from the‘Improving Care for Aboriginaland Torres Strait IslandersPatients’ (ICAP) reviewincluding the introduction ofa Northern HealthReconciliation Action Plan.• Report on key activities anddecisions undertaken byNorthern Health AboriginalAdvisory CommitteeThe Aboriginal AdvisoryCommittee approved thefollowing underway projects:• Implement a new birthingmodel for Koori women.• Improve staff knowledge andunderstanding of ATSI patients(a joint initiative with StVincent’s Health and WesternHealth).• Improve access to basicmaterial aid to supportimproved inpatient outcomesand simplify the transition toand from acute care.• Improve access tomedications for patientsdischarged from theEmergency Department.• Publish Northern HealthReconciliation Action Plan• Development of theReconciliation Action Planhas commenced.• Complete the Health LiteracyResearch project with a focuson discharge medications anddischarge planning brochureswith community services.• Improve care planning andcoordination of care forpatients with chronic andcomplex conditions.• The Health Literacy projectidentified evidence basedmethods for improving healthliteracy which will be utilised infuture projects.• The Stroke Clinical Pathwayhas been finalised andimplemented at The NorthernHospital. The thrombolytic carecomponent of the pathway willcommence in 2013.• The Code STEMI pathway isnow operational and supportsthe rapid movement ofpatients with a STEMI to theCardiac Catheter Laboratories.• Implement a stroke clinicalpathway (including a protocolfor thrombolysis) at TheNorthern Hospital.• Implement evidence basedcardiac clinical pathways forthe management of patientswith cardiac conditions,including acute coronarysyndrome and heart failure.Report on key outcomesimplemented from the:• Longer Stay Older PersonprojectImproving everyVictorian’s health statusand experiences• As a part of the Longer StayOlder Persons program,implement a framework andprocesses to minimise thefunctional decline of olderpeople across Northern Health.• Streamline access pathwaysfor ambulatory and communityservices to reduce duplicationand to enable care tobe provided in the mostappropriate setting.• A new outpatient waitlistmanagement process hasbeen implemented and hassignificantly reduced theoutpatient waitlist.• The new eRITH processhas simplified the dischargeof emergency departmentpatients requiring significantrehabilitation.11/12 Northern Health annual report 37

Statement of Priorities cont’dVictorian Health Priority Northern Health Strategy Deliverables Status• Implement a StreamingModel of Care in TheNorthern Hospital EmergencyDepartment to improve accessto services and support thetransition to the National 4hrAccess target.• Establish an Acute GeneralSurgical Unit in conjunctionwith the commissioning of thenew operating theatre.• Emergency 4hr AccessRedesign project,• The 4hr Access Redesigninitiative supported theintroduction of a streamingmodel and new visualmanagement systems in theemergency department.The establishment of the AcuteGeneral Surgical Unit.• Plans for the Acute GeneralSurgical Unit have beenincorporated into the newAcute Assessment Unit due toopen on September 2012.Expanding service,workforce and systemcapacityService• Reduce demand for inpatientservices by growing theHospital in The Home (HITH)program for appropriatepatients, at their point ofpresentation.• Implement relevantrecommendations fromthe ‘Future Directions forMaternity Services’ documentto improve choices for womenin maternity care.• Implement any relevantrecommendations from thevarious Consultative Councilsincluding the:o Maternity and Newbornnetwork;o Consultative Council onAnaesthetic Mortality andMorbidity;o Surgical ConsultativeCounci; ando Consultative Council onObstetric and PaediatricMortality and Morbidity.Infrastructure• Commission The NorthernHospital’s new theatrecomplex, endoscopy suite andcardiac catheter laboratory.• Commence design andconstruction planningfor the expansion of TheNorthern Hospital EmergencyDepartment and Special CareNursery.• Revise the business casefor The Northern HospitalRedevelopment project.Service• Report on key outcomesfrom implementationof HITH expansion andrecommendations from‘Future Directions forMaternity Services’Infrastructure• Submit a revised BusinessCase for the Redevelopmentof The Northern Hospital byDecember 2011.• A new respiratory HealthIndependence Program hasbeen implemented reducinginpatient length of stay.• The Future Directions forMaternity Services reviewhas led to the adoption ofguidelines for:o the induction of labour; ando the management of obesityin pregnancy.• We continue to monitorperformance againstConsultative Councilguidelines.• A review of Shared Carematernity models is underway.• A review of the NorthernHealth HITH service is due tobe completed in late 2012.• The Business Case forthe redevelopment of TheNorthern Hospital wasunsuccessful in 2012 anda third Business Case iscurrently being prepared fora funding bid in 2013.38 annual report Northern Health 11/12

Statement of Priorities cont’dVictorian Health Priority Northern Health Strategy Deliverables StatusIncreasing the system’sfinancial sustainabilityand productivityWorkforce• Develop the Northern Healthworkforce by implementingYear Two initiatives containedin Northern Health’s StrategicWorkforce Plan.• Improve leadership capabilitiesby implementing the NorthernHealth OrganisationalDevelopment Strategy.• Work with the VictorianAboriginal CommunityControlled Health Organisation(VACCHO) to establish Kooriwork placements connected totraining programs.• Collaborate with universitypartners to:o meet the current needsof undergraduate andpostgraduate students; ando provide support forfuture growth in studentplacements.• Create the Northern HealthTeaching, Training andResearch Precinct.• Undertake appropriatefinancial managementinitiatives to maintain financialsustainability• Complete the roll-out andimplementation of Roster-Onacross Northern Health by 30June 2012.• Continue to invest andsupport the Northern HealthFoundation for the purposesof fundraising for the ‘TheNorthern Health Teaching,Training and ResearchPrecinct’ and other fundraisingprograms.Workforce• Report on key outcomesimplemented as part of therollout of Northern Health’sStrategic Workforce Plan.• Report on key outcomesimplemented as a result ofthese reform projects.• An expansion of theorthoptists role, in conjunctionwith the Ophthalmologyservice, has improved accessto services• Nursing workforcedevelopment has continuedwith advanced clinicaleducation increasing the skillsof our general nurses, anda new graduate direct entryprogram has increased ournursing pool.• The Northern HealthLeadership ManagementFramework was developedand the first wave ofleadership managementtraining has seen more than150 staff complete certificatelevel courses.• Observational trainingplacements for aboriginalhealth worker students havecommenced at The NorthernHospital. A Memorandumof Understanding has beendeveloped to continue theseplacements in the future.• Implemented a revisedpatient election and patientregistration forms.• Provide patient choice to electto receive health services as apublic or private patient.• Implemented workforcereforms and redesignedworkforce structures foradministration and clericalstaff responsible for patientelection, and patientregistrations.• Roster-On has beenimplemented across NorthernHealth and now is used tomanage 90 percent of all staffacross Northern Health.• The Northern HealthFoundation has secured$1million in donations andpledges for the Teaching,Training and ResearchPrecinct.11/12 Northern Health annual report 39

Statement of Priorities cont’dVictorian Health Priority Northern Health Strategy Deliverables StatusImplementingcontinuousimprovements andinnovation• Implement a ‘first on firstoff’ Elective Surgery policyto ensure that patients aretreated in order of waiting timewithin the urgency categories.• Achieve compliance withthe ‘First on, first off’ ElectiveSurgery policy.• The policy has beenimplemented and regularmonitoring is now in place tomaintain compliance.• Complete the trial of theNorthern Health ReleasingTime to Care wardimprovement program.• Report on key outcomesimplemented from theo Trial of the Releasing Timeto Care program• The Releasing Time to Caretrial has been completed onthree wards and the evaluationwill be presented to theExecutive in September 2012.• Complete the RedesigningCare Emergency Accessproject that is supporting theimplementation of the national4hr Access target in theEmergency Department.o Emergency 4hr AccessRedesign project.• The introduction of newmodels of care in theemergency department hasimproved performance againstthe National EmergencyAccess Target.Increasingaccountability andtransparency• Comply with the department’sData Integrity Guidelines.• Review the Risk ManagementFramework and currentprocesses to ensure they areconsistent with the AustralianStandards.• Update Risk ManagementFramework by January 2012.• The framework has beenupdated and complies withAustralian Standards.Utilising e-healthand communicationstechnology• Develop the Northern Health(NH) Information Managementand ICT plan to align with:o the Victorian HealthPriorities Framework 2012-2022; ando relevant recommendationsfrom HealthSMARTgovernance and planningcommittees.• Participate in the VictorianIntegrated Non-AdmittedHealth (VINAH) datacollection minimum data setinitiative.• Implement the Hand-HeldMaternity Record for GPShared-Care Women.• The Northern HealthInformation Management ICTplan will be completed byJune 2012.• Northern Health’s IM & ICTPlan was aligned with theHealthSmart program andfocused primarily on clinicalsystems.• Funding opportunities forHealthSmart clinical systemswas withdrawn.• A revised ICT options paperis being developed and willbe submitted to the Board inSeptember 2012.40 annual report Northern Health 11/12

Performance PrioritiesFinancial performance 2011-2012Operating Result Targets ActualsAnnual Operating Result ($4.0m) ($5.29m)Cash management/liquidityCreditors (days) 60 80Debtors (days) 60 52Service performanceWIES activity performanceWIES (public & private) performance 98 to 102% 99.8%Elective surgeryElective surgery admissions – quarter 1 2,007 2,041Elective surgery admissions – quarter 2 1,911 1,775Elective surgery admissions – quarter 3 1,875 1,728Elective surgery admissions – quarter 4 2,091 1,997Critical careNo of days below ICU minimum operating capacity 0 34Quality and safetyHealth service accreditation Full Compliance Full ComplianceResidential aged care accreditation Full Compliance Full ComplianceCleaning standards (%) Full Compliance 96.4%Submission of data to VICNISS (1) (%) 100% 100%VICNISS Infection Clinical indicators (2) No Outlier(3) No Outliers OutliersHand Hygiene Program compliance (%) 65% 100%SAB Rate (OBDs)

Activity and FundingActivity and Funding Type2011-2012 ActivityAcute InpatientWIES Public 35,486WIES Private 2,958WIES (Public and Private) 38,444WIES DVA 427WIES TAC 197WIES Total 39,068Sub Acute InpatientCRAFT 634Rehab L2 (non DVA) 222Rehab L2 (private) 107GEM (non – DVA) 26,802GEM (private) 4,326Palliative Care – Inpatient 6,330Palliative Care – private 968Transition Care (non – DVA) – Bedday 7,909Restorative Care 2,296Rehab 2 – DVA 644GEM – DVA 971Palliative Care – DVA 306AmbulatoryVACS – Allied Health 43,181VACS – Variable 67,371Transition Care (non DVA) – Homeday 12,610SACS – Non DVA 47,637Post Acute Care 2,207VACS – Allied Health – DVA 1VACS – Variable – DVA 28SACS – DVA 152Post Acute Care – DVA 9Aged CareAged Care Assessment Service 2,953Attestation on Data IntegrityI, Greg Pullen certify that the Northern Health has put in place appropriate internal controls and processes to ensure thatreported data reasonably reflects actual performance. Northern Health has critically reviewed these controls and processesduring the year.Mr Greg PullenAccountable OfficerNorthern Health20 August 2012242 annual report Northern Health 11/12

Corporate InformationGeneral InformationNorthern Health was established in July 2000 under the Health Services (Governance& Accountability) Act 2004 and under the auspices of the Minister for Health, theHon. David Davis. It provides a wide range of healthcare services to a catchment ofapproximately 500,000 people living in Melbourne’s middle to outer northern suburbsand the semi-rural regions beyond the urban fringe.Northern Health comprises:• Broadmeadows Health Service• Bundoora Extended Care Centre• Craigieburn Health Service• Panch Health Service• The Northern HospitalConsultanciesDetails of Consultancy fees exceeding $10,000Consultant Purpose of consultancy Start date End date Total project fee 2012 Exp. CommitmentsLoss Prevention Infrastructure project Oct-11 May-12 $44,000 $36,000 $8,000Group of AustraliaLoss Prevention Once off investigation Sep-11 Sep-11 - $7,854 0Group of AustraliaFenton Strategic Communication review Feb-12 May-12 $42,800 $42,800 0Communications& development ofstrategic communicationframeworkRaw Fire Safety Engineering Regulatory 5 year Jul’11 Feb-12 $15,000 $15,000 0Fire AuditsDLA Piper Facilitation of strategic May-12 May-12 $14,000 $14,000 0planningJ&D Dixon Preparation of Aug-11 Dec-11 $13,600 $13,600 0Engineering AssetManagement PlanSIAG Industrial Relations - - - $32,000 0& HR adviceMerat Architects Architectural services - - - $27,290 0VariousStructured Credit Research Investment research - - - $11,000 0& AdvisoryMidnight Sky HR matters including - - - $13,075 0ongoing personalityassessments &coachingHarcroft Consulting Group Counselling psychologist - - - $24,719 0numerous one-off sessionsAmounts below $10,000In 2011-12 Northern Health engaged 33 consultancies where the total fees payable to theconsultants were less than $10,000, with a total expenditure of $63,533 (excl. GST).$237,33811/12 Northern Health annual report 43

Corporate InformationOccupational Health & Safety Claims2011/12 252010/11 262009/10 162008/09 92007/08 182006/07 242005/06 20These are standard Workcover claims, which are defined asthose claims that are over the statutory employer excess and areported to the Victorian WorkCover Authority (VWA) during thefinancial year.Building Act 1993During the financial year, it has been Northern Health’s practiceto obtain building permits for new projects, and Certificates ofOccupancy or Certificates of Final Inspection for all completedprojects.Registered Building Practitioners have been involved with allnew building work projects and were supervised by NorthernHealth’s Director of Capital Planning & Development (BuildingRegistration Number CB-U 1944).Completed & Operational as at 30/06/12:• $6.5M Cardiac Catheter Laboratory at The Northern Hospital• $300K Outpatient Clinic renovation at BroadmeadowsHealth Service• $4.6M Front Entry Redevelopment at The Northern Hospital• $700K Pathology department renovations at The NorthernHospitalCurrent projects under construction:• $5.1M Operating Theatre and Endoscopy Suite at TheNorthern HospitalCurrent projects in design phase:• $34.4M Teaching, Training and Research Precinct at TheNorthern Hospital• $24.4M Emergency Department and Special Care Nurseryredevelopment at The Northern HospitalNational Competition PolicyServices that are regularly market tested in accordance with thegovernment’s Competitive Neutrality Guidelines include:Patient Transport;Waste Management;Car Parking;Fleet Management;Supply;Medical Imaging/Radiology;Pathology;Food Service;Biomedical Engineering;Cleaning Services;Laundry;Security;Retail services;Financial services;Information and Communications Technology;Clinical Services;Building and Engineering Services;Community services;Electricity;Telecommunications; andPharmaceutical products.Market testing of services will continue as scheduled, andaccording to the contract cycle, into the 2012/13 financial year.Freedom of Information785 Freedom of Information applications were receivedby Northern Health during the 2011/12 financial year. Allapplications were processed according to the provisions ofthe Freedom of Information Act 1982, which provides a legallyenforceable right of access to information held by governmentagencies.All Northern Health campuses provide a report on theserequests to the Victorian Department of Justice.The applications were processed as follows:785 applications received;697 granted in full;20 granted in part;2 denied;10 withdrawn;49 not finalised; and7 No document (patient did not attend organisation forrequested dates)44 annual report Northern Health 11/12

Corporate InformationWhistleblowersThe Whistleblowers’ Protection Act 2001 is designed to protectpeople who disclose information about serious wrongdoingwithin the Victorian public sector, and to provide a framework forthe investigation of these matters.Northern Health has implemented the Whistleblower Policies& Procedures in accordance with the Act. The Health Servicereceived no disclosures under the Act in the relevant financialyear.Other InformationInformation required in accordance with FRD22C of theFinancial Management Act 1994 has been prepared and isavailable to the relevant Minister, Members of Parliament andthe public on request.Environmental PerformanceDetailed in the Report of Operations.Victorian Industry Participation PolicyNorthern Health let no contracts of $3 million or over in therelevant financial year.Merit & Equity PrinciplesMerit & Equity principles are encompassed in all employmentand diversity management activities throughout NorthernHealth.Workforce Data (FTE)Headcount and FTE for Jun 2011 and Jun 2012Labour Category June June JuneHeadcount Current Month FTE YTD FTE2012 2011 2012 2011 2012 2011Grand Total 3,249.00 3,170.00 2,352.90 2,264.19 2,290.88 2,183.57Nursing Services 1,550.00 1,530.00 1,099.18 1,076.16 1,074.81 1,039.76Administration & Clerical 522.00 489.00 386.22 366.18 382.51 359.47Medical Support Services 165.00 156.00 135.58 129.64 129.93 125.07Hotel & Allied Services 177.00 173.00 133.65 122.65 128.77 123.65Medical Officers 52.00 43.00 47.61 41.41 43.92 41.01Hospital Medical Officers 263.00 269.00 220.26 218.87 215.89 206.28Sessional Medical Officers 177.00 179.00 59.10 56.07 55.53 50.09Ancilliary Support Services 343.00 331.00 271.30 253.21 259.52 238.2411/12 Northern Health annual report 45

chair’s Financial report SummaryRevenue IndicatorsDebtors Outstanding as at 30 June 2012 Under 31-60 61-90 Over 90 Total Total000’s 30 days days days days 30/6/12 30/6/11Private 997 204 73 268 1,542 1,150TAC 5 1 - 4 10 11VWA 117 55 47 129 348 298Oversea’s Visitors 115 91 7 250 463 257Residential Aged Care - - - - - 17Total Debtors 2,363 1,733Average Collection Days 52 days 46 daysFinancial SummaryReport of Operations Disclosure 2012 2011 2010 2009 2008000’s 000’s 000’s 000’s 000’sTotal Revenue 339,355 316,760 309,506 273,425 252,263Total Expenses 350,855 327,273 306,328 289,039 266,046Operating Surplus / (Deficit) (11,500) (10,513) 3,178 (15,614) (13,783)Accumulated Deficits (51,268) (39,719) (28,394) (31,572) (16,031)Total Assets 310,404 298,404 305,400 305,869 276,029Total Liabilities 89,335 70,599 67,082 70,729 60,678Net Assets 221,069 227,805 238,318 235,140 215,351Total Equity 221,069 227,805 238,318 235,140 215,351246 annual financial report report Northern Northern Health Health 11/12 11/12

Financial Summary2011/12 2010/11000’s 000’sRevenueServices Supported by Health Service AgreementsGovernment Grants 290,205 269,363Indirect Contributions by Department of Human Services 1,096 5,430Patient and Resident Fees 12,564 10,506Recoupment from Private Practice for Use of Hospital Facilities 1,912 1,714Donations & Bequests 10 5Interest 230 372Other Revenue 2,164 2,796308,181 290,186Services Supported by Hospital & Community InitiativesPatient and Resident Fees 157 277Donations & Bequests 329 734Interest 99 386Property Income 2,721 2,780Other Revenue 11,116 9,74314,422 13,920322,603 304,106ExpensesServices Supported by Health Service AgreementsEmployee Benefits 220,406 203,589Non Salary Labour Costs 10,282 9,841Supplies & Consumables 55,570 54,095Other Expenses 32,693 30,274318,951 297,799Services Supported by Hospital & Community InitiativesEmployee Benefits 3,750 2,606Non Salary Labour Costs 858 1,173Supplies & Consumables 210 524Other Expenses 4,075 2,6018,893 6,904327,844 304,703Deficit for the Year Before Capital Purpose Income,Depreciation, & Specific Revenues and Expenses (5,241) (597)Capital Purpose Income 16,902 12,356Net Gain / (Loss) on Sale of Assets (149) 298Finance Costs (24) (28)Depreciation (22,065) (21,803)Expenditure using Capital Purpose Income (923) (739)Operating Surplus / (Deficit) For The Year (11,500) (10,513)11/12 11/12 Northern Health Health financial annual report 47 5

Disclosure IndexThe Annual Report of Northern Health is prepared in accordance with all relevant Victorian legislation. This index has beenprepared to facilitate identification of the Health Service’s compliance with statutory disclosure requirements.Legislation Requirement Page RefMinisterial DirectionsReport of OperationsCharter and purposeFRD 22C Manner of establishment and the relevant Ministers A43FRD 22C Objectives, functions, powers and duties A10 - A12, A18 - A33FRD 22C Nature and range of services provided A18 - A21Management and structureFRD 22C Organisation structure A14 - A17Financial and other informationFRD 10 Disclosure index A48 - A49FRD 11 Disclosure of ex-gratia payments N/AFRD 15B Responsible person and executive officer disclosures F1FRD 22C Application and operation of Freedom of Information Act 1982 A44FRD 22C Application and operation of Whistleblowers Protection Act 2001 A45FRD 22C Compliance with building and maintenance provisions of Building Act 1993 A44FRD 22C Details of consultancies over $10,000 A43FRD 22C Amounts of consultancies under $10,000 A43FRD 22C Major changes or factors affecting performance A4FRD 22C Occupational health and safety A44FRD 22C Operational and budgetary objectives and performance against objectives A2 - A44FRD 22C Significant changes in financial position during the year A4FRD 22C Statement of availability of other information A45FRD 22C Statement on National Competition Policy A44FRD 22C Subsequent events F55FRD 22C Summary of the financial results for the year A46, A47FRD 22CWorkforce Data Disclosures including a statement on the application ofemployment and conduct principalsFRD 25 Victorian Industry Participation Policy disclosures A45SD 4.2(j) Sign–off requirements A4, A33, A42, F1A4548 annual report Northern Health 11/12

Disclosure Index cont’dLegislationRequirementSD 3.4.13 Attestation on Data Integrity A42SD 4.5.5 Attestation on Compliance with Australian/New Zealand Risk Management Standard A33Financial StatementsFinancial statements required under Part 7 of the FMASD 4.2(a) Statement of changes in equity F4SD 4.2(b) Operating statement F2SD 4.2(b) Balance sheet F3SD 4.2(b) Cash flow statement F5Other requirements undering Standing Directions 4.2SD 4.2(a)Compliance with Australian accounting standards and other authoritative pronouncements F6SD 4.2(c) Accountable officer’s declaration F1SD 4.2(c) Compliance with Ministerial Directions F6SD 4.2(d) Rounding of amounts F17LegislationFreedom of Information Act 1982Whistleblowers Protection Act 2001Victorian Industry Participation Policy Act 2003Building Act 1993Financial Management Act 1994A44A45A45A44F611/12 Northern Health annual report 49

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Northern HealthFinancial Statements& Accompanying NotesFor the Year Ended30 June 2012Northern Health Financial Report Appendix to the 2011 - 2012 Annual Report

Northern Health Annual Report 2011/2012Table Of ContentsPageBoard member's, accountable officer's and chief finance & accounting officer's declaration 1Comprehensive Operating Statement 2Balance Sheet 3Statement of Changes in Equity 4Cash Flow Statement 5Note 1: Summary of Significant Accounting Policies 6Note 2: Revenue 22Note 2a: Analysis of Revenue by Source 24Note 2b: Patient and Resident Fees 26Note 2c: Net Gain/(Loss) on Disposal of Non-Financial Assets 26Note 2d: Assets Received Free of Charge or for nominal consideration 26Note 3: Expenses 27Note 3a: Analysis of Expenses by Source 29Note 4: Depreciation and Amortisation 31Note 5: Finance Costs 31Note 6: Cash and Cash Equivalents 31Note 7: Receivables 32Note 8: Other Financial Assets 33Note 9: Inventories 34Note 10: Other Assets 34Note 11: Property, Plant & Equipment 35Note 12: Intangible Assets 37Note 13: Payables 38Note 14: Borrowings 39Note 15: Provisions 40Note 16: Other Liabilities 41Note 17: Reserves 42Note 18: Reconciliation of Net Result for the Year to Net Cash Inflow/(Outflow) from Operating Activities 43Note 19: Financial Instruments 44Note 20: Commitments for Expenditure 50Note 21: Contingent Assets and Contingent Liabilities 51Note 22: Operating segments 52Note 23a: Responsible Persons Disclosures 53Note 23b: Executive Officer Disclosures 54Note 24: Events Occurring after the Balance Sheet Date 55Note 25: Controlled Entities 55Note 26: Economic Dependency 55Independent Auditors Report -Northern Health Financial Report Appendix to the 2011 - 2012 Annual Report

Northern Health Annual Report 2011/2012Board member's, accountable officer's and chief finance & accounting officer's declarationWe certify that the attached financial report for Northern Health, including controlled entities, has been prepared in accordance with Standing Direction 4.2 of the Financial Management Act 1994,applicable Financial Reporting Directions , Australian Accounting Standards, Australian Accounting Interpretations and other mandatory professional reporting requirements.We further state that, in our opinion, the information set out in the Comprehensive Operating Statement, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and notes formingpart of the financial report, presents fairly the financial transactions during the year ended 30 June 2012 and financial position of Northern Health at 30 June 2012.At the time of signing we are not aware of any circumstance which would render any particulars included in the financial report to be misleading or inaccurate.We authorise the attached financial report for issue on this day.__________________________ __________________________ __________________________Prof Glenn Bowes Mr Greg Pullen Mr Sam CostanzoBoard Chair Chief Executive Officer Executive Director, FinanceNorthern Health Northern Health Northern Health20 August 2012 20 August 2012 20 August 2012Northern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 1 of 60

Northern Health Annual Report 2011/2012Northern HealthComprehensive Operating StatementFor the Year Ended 30 June 2012Note Parent Entity Parent Entity Consol'd Consol'd2012 2011 2012 2011$'000 $'000 $'000 $'000Revenue from Operating Activities 2 322,390 303,280 322,273 303,348Revenue from Non-Operating Activities 2 273 719 329 758Employee Benefits 3 (224,006) (206,107) (224,156) (206,195)Non Salary Labour Costs 3 (11,140) (11,014) (11,140) (11,014)Supplies & Consumables 3 (55,774) (54,619) (55,780) (54,619)Other Expenses 3 (37,029) (33,601) (36,767) (32,875)Net Result Before Capital & Specific Items (5,286) (1,342) (5,241) (597)Capital Purpose Income 2 16,694 12,927 16,752 12,654Depreciation and Amortisation 4 (22,065) (21,803) (22,065) (21,803)Finance Costs 3,5 (24) (28) (24) (28)Expenditure using Capital Purpose Income 3 (923) (739) (923) (739)NET RESULT FOR THE YEAR (11,603) (10,985) (11,500) (10,513)Other Comprehensive IncomeRevaluation on Non Financial Assets 17a 4,764 - 4,764 -COMPREHENSIVE RESULT FOR THE YEAR (6,839) (10,985) (6,736) (10,513)This Statement should be read in conjunction with the accompanying notes.Northern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 2 of 60

Northern Health Annual Report 2011/2012Northern HealthBalance SheetAs at 30 June 2012Note Parent Entity Parent Entity Consol'd Consol'd2012 2011 2012 2011$'000 $'000 $'000 $'000Current AssetsCash and Cash Equivalents 6 9,682 4,198 10,760 5,430Receivables 7 6,743 6,471 6,743 6,471Inventories 9 1,359 956 1,359 956Other Assets 10 252 195 252 195Total Current Assets 18,036 11,820 19,114 13,052Non-Current AssetsReceivables 7 3,434 2,832 3,434 2,832Other Financial Assets 8 - - - -Property, Plant & Equipment 11 287,178 281,430 287,178 281,430Intangible Assets 12 678 1,090 678 1,090Total Non-Current Assets 291,290 285,352 291,290 285,352TOTAL ASSETS 309,326 297,172 310,404 298,404Current LiabilitiesPayables 13 27,108 19,793 27,153 20,095Borrowings 14 240 240 240 240Employee Benefits and Related On-Costs Provisions 15 51,938 43,438 51,938 43,438Other Liabilities 16 6 3 6 3Total Current Liabilities 79,292 63,474 79,337 63,776Non-Current LiabilitiesPayables 13 2,669 - 2,669 -Borrowings 14 135 375 135 375Employee Benefits and Related On-Costs Provisions 15 7,194 6,448 7,194 6,448Total Non-Current Liabilities 9,998 6,823 9,998 6,823TOTAL LIABILITIES 89,290 70,297 89,335 70,599NET ASSETS 220,036 226,875 221,069 227,805EQUITYProperty, Plant & Equipment Revaluation Surplus 17a 109,196 104,432 109,196 104,432Restricted Specific Purpose Surplus 17a 325 379 1,507 1,458Contributed Capital 17b 161,634 161,634 161,634 161,634Accumulated Deficits 17c (51,119) (39,570) (51,268) (39,719)TOTAL EQUITY 220,036 226,875 221,069 227,805Contingent Liabilities and Contingent Assets 21Commitments 20This Statement should be read in conjunction with the accompanying notes.Northern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 3 of 60

Northern Health Annual Report 2011/2012Northern HealthStatement of Changes in EquityFor the Year Ended 30 June 2012Consolidated NoteProperty Plant &EquipmentRevaluationSurplusRestricted SpecificPurpose SurplusContributions byOwnersAccumulatedSurplus/(Deficits)Total$'000 $'000 $'000 $'000 $'000Balance at 1 July 2010 17 104,432 646 161,634 (28,394) 238,318Net result for the year 17c - - - (10,513) (10,513)Transfers to accumulated surplus/ (deficit) 17a,c - 812 - (812) -Balance at 30 June 2011 104,432 1,458 161,634 (39,719) 227,805Net result for the year 17c - - - (11,500) (11,500)Other comprehensive income for the year 17a 4,764 - - - 4,764Transfers to accumulated surplus/ (deficit) 17a,c - 49 - (49) -4,764 49 - (11,549) (6,736)Balance at 30 June 2012 109,196 1,507 161,634 (51,268) 221,069Parent NoteProperty Plant &EquipmentRevaluationSurplusRestricted SpecificPurpose SurplusContributions byOwnersAccumulatedSurplus/(Deficits)Total$'000 $'000 $'000 $'000 $'000Balance at 1 July 2010 17 104,432 370 161,634 (28,576) 237,860Net result for the year 17c - - - (10,985) (10,985)Transfers to accumulated surplus/ (deficit) 17a,c - 9 - (9) -Balance at 30 June 2011 104,432 379 161,634 (39,570) 226,875Net result for the year 17c - - - (11,603) (11,603)Other comprehensive income for the year 17a 4,764 - - - 4,764Transfers to accumulated surplus/ (deficit) 17a,c - (54) - 54 -4,764 (54) - (11,549) (6,839)Balance at 30 June 2012 109,196 325 161,634 (51,119) 220,036This Statement should be read in conjunction with the accompanying notes.Northern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 4 of 60

Northern Health Annual Report 2011/2012Northern HealthCash Flow StatementFor the Year Ended 30 June 2012Note Parent Entity Parent Entity Consol'd Consol'd2012 2011 2012 2011$'000 $'000 $'000 $'000CASH FLOWS FROM OPERATING ACTIVITIESOperating Grants from Government 289,345 278,303 289,347 278,303Patient and Resident Fees Received 12,331 11,121 12,331 11,121Private Practice Fees Received 2,077 1,385 2,077 1,385Donations and Bequests Received 523 671 341 739GST Received from/(paid to) ATO 7,462 6,336 7,462 6,336Recoupment from private practice for use of hospital facilities 1,922 1,721 1,922 1,721Interest Received 689 719 745 759Other Receipts 16,442 13,980 16,512 13,975Employee Benefits Paid (214,588) (201,990) (214,741) (202,078)Non Salary Labour Costs (11,138) (11,016) (11,138) (11,016)Payments for Supplies & Consumables (53,844) (61,754) (54,116) (61,453)Finance Costs (24) (27) (24) (27)Other Payments (36,880) (35,528) (36,613) (34,801)Cash Generated from Operations 14,317 3,921 14,105 4,964Capital Grants from Government 13,411 10,198 13,411 10,198Capital Donations and Bequests Received 513 280 571 7NET CASH INFLOW FROM OPERATING ACTIVITIES 1828,241 14,399 28,087 15,169CASH FLOWS FROM INVESTING ACTIVITIESPayments for Non-Financial Assets (22,544) (11,526) (22,544) (11,526)Proceeds from sale of Non-Financial Assets 24 696 24 696NET CASH OUTFLOW FROM INVESTING ACTIVITIES (22,520) (10,830) (22,520) (10,830)CASH FLOWS FROM FINANCING ACTIVITIESRepayment of Borrowings (240) (289) (240) (289)NET CASH OUTFLOW FROM FINANCING ACTIVITIES(240) (289) (240) (289)NET INCREASE/ (DECREASE) IN CASH HELD 5,481 3,280 5,327 4,050CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 4,195 915 5,427 1,377CASH AND CASH EQUIVALENTS AT END OF PERIOD 6 9,676 4,195 10,754 5,427This Statement should be read in conjunction with the accompanying notesNorthern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 5 of 60

Note 1: Summary of Significant Accounting PoliciesNotes To and Forming Part of the Financial StatementsNorthern Health Annual Report 2011/2012(a) Statement of complianceThe financial statements are general purpose financial statements which has been prepared in accordance with the Financial Management Act 1994 and applicable Australian Accounting Standards(AASs) and Australian Accounting Interpretations. AASs includes Australian equivalents to International Financial Reporting Standards.The financial statements also comply with relevant Financial Reporting Directives (FRDs) issued by the Department of Treasury and Finance and relevant Standing Directions (SDs) authorised by theMinister for Finance.The entity is a not-for profit entity and therefore applies the additional Aus paragraphs applicable to “not-for-profit” entities under the AAS’s.The annual financial statements were authorised for issue by the Board of Northern Health on 20th August 2012.(b) Basis of accounting preparation and measurementAccounting policies are selected and applied in a manner which ensures that the resulting financial information satisfies the concepts of relevance and reliability, thereby ensuring that the substance ofthe underlying transactions or other events is reported.The accounting policies set out below have been applied in preparing the financial report for the year ended 30 June 2012, and the comparative information presented in these financial statements forthe year ended 30 June 2011.The going concern basis was used to prepare the financial statements.These financial statements are presented in Australian dollars, the functional and presentation currency of Northern Health.The financial statements, except for cash flow information, have been prepared using the accrual basis of accounting. Under the accrual basis items are recognised as assets, liabilities, equity, incomeor expenses when they satisfy the definitions and recognition criteria for those items, that is they are recognised in the reporting period to which they relate regardless of when cash is received or paid.The financial statements are prepared in accordance with the historical cost convention, except for the revaluation of certain non-financial assets and financial instruments, as noted. Cost is based onthe fair values of the consideration given in exchange for assets. Exceptions to the historical cost convention include:Non current physical assets which subsequent to acquisition are measured at valuation and are re-assessed with sufficient regularity to ensure that carrying amounts do not materially differ from theirfair values;Available-for-sale investments which are measured at fair value with movements reflected in equity until the asset is derecognised;The fair value of assets other than land is generally based on depreciated replacement value.Historical cost is based on the fair values of the consideration given in exchange for assets.In the application of AASs management is required to make judgements, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. Theestimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis ofmaking the judgements. Actual results may differ from these estimates.The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects onlythat period or in the period of the revision, and future periods if the revision affects both current and future periods. Judgements made by management in the application of AASs that have significanteffects on the financial statements and estimates, with a risk of material adjustments in the subsequent reporting period, relate to:The fair value of land, buildings, infrastructure, plant and equipment;Actuarial assumptions for employee benefit provisions based on likely tenure of existing staff, patterns of leave claims, future salary movements and future discount rates.(c) Reporting EntityThe financial statements include all the controlled entities of Northern Health.The principle address is:185 Cooper StreetEppingVIC 3076A description of the nature of Northern Health's operations and its principal activities is included in the report of operations which does not form part of these financial statements.Northern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 6 of 60

Note 1: Summary of Significant Accounting Policies(d) Principles of ConsolidationNotes To and Forming Part of the Financial StatementsNorthern Health Annual Report 2011/2012The assets, liabilities, incomes and expenses of the Controlled Entities of Northern Health have been included at the values shown in their audited 30 June 2012 Annual Financial Statement. Subsidiariesare entities controlled by Northern Health; control exists when Northern Health has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. Inassessing control, potential voting rights that presently are exercisable are taken into account. The consolidated financial statements include the audited financial statements of the controlled entitieslisted in note 25.In the process of preparing consolidated financial statements for Northern Health all material transactions and balances between consolidated entities are eliminated.(e) Scope and presentation of financial statementsFund AccountingNorthern Health operates on a fund accounting basis and maintains three funds: Operating, Specific Purpose and Capital Funds. Northern Health's Capital and Specific Purpose Funds include unspentdonations and receipts from capital projects conducted solely in respect of these funds.Services Supported By Health Services Agreement and Services Supported By Hospital and Community InitiativesActivities classified as Services Supported by Health Services Agreement (HSA) are substantially funded by the Department of Health and includes Residential Aged Care Services (RACS) and are alsofunded from other sources such as the Commonwealth, patients and residents, while Services Supported by Hospital and Community Initiatives (Non HSA) are funded by Northern Health's ownactivities or local initiatives and/or the Commonwealth.Residential Aged Care ServiceThe Northern Health Residential Aged Care Service operations are an integral part of Northern Health and shares its resources. An apportionment of land and buildings has been made based on floorspace. The results of the two operations have been segregated based on actual revenue earned and expenditure incurred by each operation in note 2b to the financial statement.The Northern Health Residential Aged Care Service has a separate Committee of Management and is substantially funded from Commonwealth bed-day subsidies.Comprehensive operating statementThe Comprehensive operating statement includes the subtotal entitled ‘Net Result Before Capital & Specific Items’ to enhance the understanding of the financial performance of Northern Health. Thissubtotal reports the result excluding items such as capital grants, assets received or provided free of charge, depreciation, and items of an unusual nature and amount such as specific revenues andexpenses. The exclusion of these items are made to enhance matching of income and expenses so as to facilitate the comparability and consistency of results between years and Victorian Public HealthServices. The Net result Before Capital & Specific Items is used by the management of Northern Health, the Department of Health and the Victorian Government to measure the ongoing result of HealthServices in operating hospital services.Capital and specific items, which are excluded from this sub-total, comprise:Capital purpose income, which comprises all tied grants, donations and bequests received for the purpose of acquiring non-current assets, such as capital works, plant and equipment or intangibleassets. It also includes donations of plant and equipment (refer note 1 (f)). Consequently the recognition of revenue as capital purpose income is based on the intention of the provider of therevenue at the time the revenue is provided.Specific income/expense, comprises the following items, where material: Voluntary departure packages Write-down of inventories Non-current asset revaluation increments/decrements Diminution in investments Restructuring of operations (disaggregation/aggregation of health services) Litigation settlements Non-current assets lost or found Forgiveness of loans Reversals of provisions Voluntary changes in accounting policies (which are not required by an accounting standard or other authoritative pronouncement of the AASB)Impairment of financial and non-financial assets, includes all impairment losses (and reversal of previous impairment losses), recognised in accordance with note 1 (i) & (j) respectively.Depreciation and amortisation, as described in note 1 (g).Northern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 7 of 60

Note 1: Summary of Significant Accounting PoliciesAssets provided or received free of charge, as described in note 1 (f).Notes To and Forming Part of the Financial StatementsNorthern Health Annual Report 2011/2012Expenditure using capital purpose income, comprises expenditure which either falls below the asset capitalisation threshold or doesn’t meet asset recognition criteria and therefore does not resultin the recognition of an asset in the balance sheet, where funding for that expenditure is from capital purpose income.Balance sheetAssets and liabilities are categorised either as current or non-current.Statement of changes in equityThe statement of changes in equity presents reconciliations of each non-owner and owner equity opening balance at the beginning of the reporting period to the closing balance at the end of thereporting period. It also shows separately changes due to amounts recognised in the comprehensive result and amounts recognised in other comprehensive income related to other non-owner changesin equity.Cash flow statementCash flows are classified according to whether or not they arise from operating activities, investing activities, or financing activities. This classification is consistent with requirements under AASB 107Statement of Cash Flows.(f) Income RecognitionIncome is recognised in accordance with AASB 118 Revenue and is recognised as to the extent that it is probable that the economic benefits will flow to Northern Health and the income can be reliablymeasured. Unearned income at reporting date is reported as income received in advance.Amounts disclosed as revenue are, where applicable, net of returns, allowances and duties and taxes.Government Grants and other transfers of income (other than contributions by owners)Grants are recognised as income when the entity gains control of the underlying assets in accordance with AASB 1004 Contributions irrespective whether conditions are imposed on Northern Health'suse of the contributions.Contributions are deferred as income in advance when Northern Health has a present obligation to repay them and the present obligation can be reliably measured.Indirect Contributions from the Department of HealthInsurance is recognised as revenue following advice from the Department of Health.Long Service Leave (LSL) – Revenue is recognised upon finalisation of movements in LSL liability in line with the arrangements set out in the Metropolitan Health and Aged Care Services DivisionHospital Circular 14/2009.Patient and Resident FeesPatient fees are recognised as revenue at the time invoices are raised.Private Practice FeesPrivate practice fees are recognised as revenue at the time invoices are raised.Revenue from commercial activitiesRevenue from commercial activities such as commercial laboratory medicine is recognised at the time invoices are raised.Donations and Other BequestsDonations and bequests are recognised as revenue when received. If donations are for a special purpose, they may be appropriated to a reserve, such as the specific restricted purpose reserve.Interest RevenueInterest revenue is recognised on a time proportionate basis that takes in account the effective yield of the financial asset.Northern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 8 of 60

Note 1: Summary of Significant Accounting PoliciesNotes To and Forming Part of the Financial StatementsNorthern Health Annual Report 2011/2012Sale of investmentsThe gain/ loss on sale of investments is recognised when the investment is realised.Resources Provided and Received Free of Charge or for Nominal ConsiderationResources provided or received free of charge or for nominal consideration are recognised at their fair value when the transferee obtains control over them, irrespective of whether restrictions orconditions are imposed over the use of the contributions, unless received from another entity or agency as a consequence of a restructuring of administrative arrangements. In the latter case, suchtransfer will be recognised at carrying value. Contributions in the form of services are only recognised when a fair value can be reliably determined and the services would have been purchased if notdonated.(g) Expense RecognitionExpenses are recognised as they are incurred and reported in the financial year to which they relate.Cost of goods soldCosts of goods sold are recognised when the sale of an item occurs by transferring the cost or value of the item from inventories.Employee expensesEmployee expenses include:Wages and salaries;Annual leave;Sick leave;Long service leave; andSuperannuation expenses which are reported differently depending on whether employees are members of defined benefit or defined contribution plans.Defined contribution plansIn relation to defined contribution (i.e. accumulation) superannuation plans, the associated expense is simply the employer contributions that are paid or payable in respect of employees who aremembers of these plans during the reporting period. Contributions to defined contribution superannuation plans are expensed when incurred.Defined benefit plansThe amount charged to the comprehensive operating statement in respect of defined benefit superannuation plans represents the contributions made by the entity to the superannuation plans inrespect of the services of current entity staff during the reporting period. Superannuation contributions are made to the plans based on the relevant rules of each plan and are based upon actuarialadvice.Employees of Northern Health are entitled to receive superannuation benefits and Northern Health contributes to both the defined benefit and defined contribution plans. The defined benefit plan(s)provide benefits based on years of service and final average salary.The name and details of the major employee superannuation funds and contributions made by Northern Health are as follows:FundContributions Paid or Payable for the year2012 2011$’000 $’000Defined benefit plans:Health Super 553 566Defined contribution plans:Health Super 12,141 11,674HESTA 4,705 4,092Other 158 64Total 17,557 16,396Northern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 9 of 60

Note 1: Summary of Significant Accounting PoliciesNotes To and Forming Part of the Financial StatementsNorthern Health Annual Report 2011/2012Northern Health does not recognise any unfunded defined benefit liability in respect of the superannuation plans because the entity has no legal or constructive obligation to pay future benefits relatingto its employees; its only obligation is to pay superannuation contributions as they fall due. The Department of Treasury and Finance administers and discloses the State’s defined benefit liabilities in itsfinancial report.DepreciationAssets with a cost in excess of $1,000 are capitalised and depreciation has been provided on depreciable assets so as to allocate their cost or valuation over their estimated useful lives. Depreciation isgenerally calculated on a straight line basis, at a rate that allocates the asset value, less any estimated residual value over it estimated useful life. Estimate of the remaining useful lives anddepreciation method for all assets are reviewed at least annually, and adjustment made where appropriate. This depreciation charge is not funded by the Department of Health.Depreciation is provided on property, plant and equipment, including freehold buildings, but excluding artwork, land and investment properties. Depreciation begins when the asset is available for use,which is when it is in the location and condition necessary for it to be capable of operating in a manner intended by management.The following table indicates the expected useful lives of non current assets on which the depreciation charges are based.2012 2011BuildingsStructure Shell Building Fabric 22 - 43 Years 22 - 43 YearsSite Engineering Services and Central Plant 19 - 28 Years 19 - 28 YearsCentral PlantFit Out 7 - 20 Years 7 - 20 YearsTrunk Reticulated Building Systems 8 - 21 Years 8 - 21 YearsPlant & Equipment 10 Years 10 YearsMedical Equipment 10 Years 10 YearsComputers and Communication 3 Years 3 YearsFurniture & Fittings 10 Years 10 YearsMotor Vehicles 4 Years 4 YearsNon-Medical Equipment 10 Years 10 YearsLeasehold Improvements (refer lease note)As part of the Building valuation, building values were componentised and each component assessed for its useful life which is represented above.AmortisationAmortisation is allocated to intangible assets with finite useful lives on a systematic (typically straight-line) basis over the asset's useful life. Amortisation begins when the asset is available for use, thatis, when it is in the location and condition necessary for it to be capable of operating in the manner intended by management. The amortisation period and the amortisation method for an intangibleasset with a finite useful are reviewed at the least at the end of each annual reporting period. In addition, an assessment is made at each reporting date to determine whether there are indicators thatthe intangible asset concerned is impaired. If so, the assets concerned are tested as to whether their carrying value exceeds their recoverable amount.Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually or whenever there is an indication that the asset may be impaired. The useful lives of intangibleassets that are not being amortised are reviewed each period to determine whether events and circumstances continue to support an indefinite useful life assessment for that asset. In addition,Northern Health tests all intangible assets with indefinite useful lives for impairment by comparing the recoverable amount for each asset with its carrying amount:– Annually; and– Whenever there is an indication that the intangible asset may be impaired.Any excess of the carrying amount over the recoverable amount is recognised as an impairment loss.Intangible assets with finite useful lives are amortised over a 3 year period (2011: 3 Years).Northern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 10 of 60

Note 1: Summary of Significant Accounting PoliciesFinance CostsFinance costs are recognised as expenses in the period in which they are incurred.Notes To and Forming Part of the Financial StatementsNorthern Health Annual Report 2011/2012Finance costs include: interest on bank overdrafts and short-term and long-term borrowings; amortisation of discounts or premiums relating to borrowings; amortisation of ancillary costs incurred in connection with the arrangement of borrowings; and finance charges in respect of finance leases recognised in accordance with AASB 117 Leases .(h) Financial instrumentsFinancial instruments arise out of contractual agreements that give rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Due to the nature of NorthernHealth's activities, certain financial assets and financial liabilities arise under statute rather than a contract. Such financial assets and financial liabilities do not meet the definition of financialinstruments in AASB 132 "Financial Instruments: Presentation". For example, statutory receivables arising from taxes, fines, and penalties do not meet the definition of financial instruments as theydo not arise under contract.Where relevant for note disclosure purposes, a distinction is made between those financial assets and financial liabilities that meet the definition of financial instruments in accordance with AASB 132and those that do not.(i) Financial assetsCash and Cash EquivalentsCash and cash equivalents comprise cash on hand and cash at bank, deposits at call and highly liquid investments with an original maturity of three months or less, which are held for the purpose ofmeeting short term cash commitments rather than for investment purposes, which are readily convertible to known amounts of cash and are subject to insignificant risk of changes in value.For the cash flow statement presentation purposes, cash and cash equivalents includes bank overdrafts, which are included as current borrowings in the balance sheet. Note, Northern Health does nothave an overdraft facility.ReceivablesReceivables consists of:Statutory receivables which include predominantly amounts owing from the State Government and GST input tax credits recoverable; andContractual receivables which includes mainly debtors in relation to goods and services, loans to third parties, and accrued investment income.Trade Debtors are carried at nominal amounts due and are due for settlement within 30 days from the date of recognition. Collectability of debts is reviewed on an ongoing basis, and debts which areknown to be uncollectible are written off. A provision for doubtful debts is recognised when there is objective evidence that an impairment loss has occurred. Bad debts are written off whenidentified.Receivables that are contractual are classified as financial instruments. Statutory receivables are not classified as financial instruments.Receivables are recognised initially at fair value and subsequently measured at amortised cost, using the effective interest rate method, less any accumulated impairment.Investments and other financial assetsInvestments are recognised and derecognised on trade date where purchase or sale of an investment is under a contract whose terms require delivery of the investment within the timeframeestablished by the market concerned, and are initially measured at fair value, net of transaction costs.Investments are classified in the following categories:Financial assets at fair value through profit or loss;Loans and receivables;Available for sale financial assets.Northern Health classifies its other financial assets between current and non-current assets based on the purpose for which the assets were acquired. Management determines the classification of itsother financial assets at initial recognition.Northern Health assesses at each balance sheet date whether a financial asset or group of financial assets is impaired.All financial assets except those measured at fair value through profit or loss are subject to annual review for impairment.Northern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 11 of 60

Note 1: Summary of Significant Accounting PoliciesNotes To and Forming Part of the Financial StatementsNorthern Health Annual Report 2011/2012Loans and receivablesTrade receivables, loans, term deposits with maturity greater than three months and other receivables are recorded at amortised cost, using the effective interest method, less impairment.The effective interest rate 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 thatexactly discounts estimated future cash receipts through the expected life of the financial asset, or where appropriate, a shorter period.Held-to-maturity investmentsWhere Northern Health has the positive intent and ability to hold investments to maturity they are measured at amortised cost less impairment losses.Available for sale financial assetsOther financial assets held by the entity are classified as being available-for-sale and are measured at fair value. Gains and losses arising from changes in fair value are recognised directly in equityuntil the investment is disposed of or is determined to be impaired, at which time the cumulative gain or loss previously recognised in equity is included in profit or loss for the period. Fair value isdetermined in the manner described in Note 19.Impairment of Financial AssetsAt the end of each reporting period Northern Health assesses whether there is objective evidence that a financial asset or group of financial asset is impaired.Bad and doubtful debts for financial assets are assessed on a regular basis. Those bad debts considered as written off as well as the allowance for doubtful receivables are recognised as expenses inthe net result.Where the fair value of an investment in an equity instrument at balance date has reduced by 20 percent or more than its cost price or where its fair value has been less than its cost price for a periodof 12 or more months, the financial asset is treated as impaired.In assessing impairment of statutory (non contractual) financial assets, which are not financial instruments, professional judgement is applied in assessing materiality using estimates, averages andother computational methods in accordance with AASB 136 Impairment of Assets.Net Gain/(Loss) on Financial InstrumentsNet gain/(loss) on financial instruments includes:Realised and unrealised gains and losses from revaluations of financial instruments that are designated at fair value through profit or loss or held-for-trading;Impairment and reversal of impairment for financial instruments at amortised cost; andDisposals of financial assets.Revaluations of Financial Instruments at Fair ValueThe revaluation gain/(loss) on financial instruments at fair value excludes dividends or interest earned on financial assets.(j) Non Financial AssetsInventoriesInventories include goods and other property held either for sale or for distribution at no or nominal cost in the ordinary course of business operations. It excludes land held for sale and depreciableassets.Inventories held for distribution are measured at cost, adjusted for any loss of service potential. All other inventories, including land held for sale, are measured at the lower of cost and net realisablevalue.Bases used in assessing loss of service potential for inventories held for distribution include current replacement cost and technical or functional obsolescence. Technical obsolescence occurs when anitem still functions for some or all of the tasks it was originally acquired to do, but no longer matches existing technologies. Functional obsolescence occurs when an item no longer functions the wayit did when it was first acquired.Cost is assigned to land for sale (undeveloped, under development and developed) and to other high value, low volume inventory items on a specific identification of cost basis.Cost for all other inventory is measured on the basis of weighted average cost.Inventories acquired for no cost or nominal considerations are measured at current replacement cost at the date of acquisition.Northern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 12 of 60

Note 1: Summary of Significant Accounting PoliciesNon Financial Physical Assets Classified as Held for SaleNotes To and Forming Part of the Financial StatementsNorthern Health Annual Report 2011/2012Non financial physical assets and disposal groups and related liabilities are treated as current and are classified as held for sale if their carrying amount will be recovered through a sale transactionrather than through continuing use. This condition is regarded as met only when the sale is highly probable, the asset's sale (or disposal group) is expected to be completed within 12 months from thedate of classification, and the asset is available for immediate use in the current condition.Non financial physical assets and disposal groups classified as held for sale are treated as current and are measured at the lower of carrying amount and fair value less costs to sell and are not subjectto depreciation.Property, Plant and EquipmentAll non current physical assets are measured initially at cost and subsequently revalued at fair value less accumulated depreciation and impairment. Where an asset is acquired for no or nominalcost, the cost is its fair value at date of acquisition.Crown Land is measured at fair value with regard to the property’s highest and best use after due consideration is made for any legal or constructive restrictions imposed on the asset, publicannouncements or commitments made in relation to the intended use of the asset. Theoretical opportunities that may be available in relation to the asset(s) are not taken into account until it isvirtually certain that any restrictions will no longer apply.Land and Buildings are recognised initially at cost and subsequently measured at fair value less accumulated depreciation and impairment.Plant, Equipment and Vehicles are recognised initially at cost and subsequently measured at fair value less accumulated depreciation and impairment. Depreciated historical cost is generally areasonable proxy for depreciated replacement cost because of the short lives of the assets concerned.Cultural, Collections, Heritage Assets and Other Non-Current Physical Assets that the State intends to preserve because of their unique historical, cultural or environmental attributes aremeasured at the cost of replacing the asset less, where applicable, accumulated depreciation calculated on the basis of such cost to reflect the already consumed or expired future economic benefitsof the asset.Restrictive nature of cultural and heritage assets, Crown land and infrastructure assets. During the reporting period Northern Health may hold cultural assets, heritageassets, Crown land and infrastructure assets.Such assets are deemed worthy of preservation because of the social rather than financial benefits they provide to the community. The nature of these assets means that there are certain limitationsand restrictions imposed on their use and/or disposal.Revaluations of Non-current Physical AssetsNon-current physical assets measured at fair value are revalued in accordance with FRD 103D. This revaluation process normally occurs every five years, based upon the asset’s Government PurposeClassification, but may occur more frequently if fair value assessments indicate material changes in values. Independent valuers are used to conduct these scheduled revaluations and any interimrevaluations are determined in accordance with the requirements of the FRDs. Revaluation increments or decrements arise from differences between an asset’s carrying value and fair value.Revaluation increments are credited directly to the asset revaluation reserve, except that, to the extent that an increment reverses a revaluation decrement in respect of that class of asset previouslyrecognised at an expense in net result, the increment is recognised as income in the net result.Revaluation decrements are recognised immediately as expenses in the net result, except that, to the extent that a credit balance exists in the asset revaluation reserve in respect of the same class ofassets, they are debited directly to the asset revaluation surplus.Revaluation increases and revaluation decreases relating to individual assets within an asset class are offset against one another within that class but are not offset in respect of assets in differentclasses.Revaluation surpluses are normally not transferred to accumulated funds on derecognition of the relevant asset.In accordance with FRD 103D, Northern Health's non current physical assets were assessed to determine whether revaluation of the non-current physical assets was required.Northern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 13 of 60

Note 1: Summary of Significant Accounting PoliciesIntangible AssetsNotes To and Forming Part of the Financial StatementsNorthern Health Annual Report 2011/2012Intangible assets represent identifiable non-monetary assets without physical substance such as patents, trademarks, computer software and development costs (where applicable).Intangible assets are initially recognised at cost. Subsequently intangible assets with finite useful lives are carried at cost less accumulated amortisation and accumulated impairment losses. Costsincurred subsequent to initial acquisition are capitalised when it is expected that additional future economic benefits will flow to the entity.Other non financial assetsPrepaymentsOther non financial assets include prepayments which represent payments in advance of receipt of goods or services or that part of expenditure made in one accounting period covering a term beyondthat period.Disposal of Non-Financial AssetsAny gain or loss on the sale of Non-Financial Assets is recognised at the date that control of the asset is passed to the buyer and is determined after deducting from the proceeds the carrying value ofthe asset at that time.Impairment of Non-Financial AssetsApart from intangible Assets with indefinite useful lives all other assets are assessed annually for indications of impairment, except for:Inventories;Assets arising from construction contracts;Financial assets;Investment properties measured at fair value;Non-current physical assets held for sale;If there is an indication of impairment, the assets concerned are tested as to whether their carrying value exceeds their possible recoverable amount. Where an asset’s carrying value exceeds itsrecoverable amount, the difference is written-off as an expense except to the extent that the write-down can be debited to an asset revaluation reserve amount applicable to that class of asset.If there is an indication that there has been a change in the estimate of an asset's recoverable amount since the last impairment loss was recognised the carrying amount shall be increased to itsrecoverable amount. This reversal of the impairment loss occurs only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined net ofdepreciation or amortisation if no impairment loss had been recognised in prior years.It is deemed that, in the event of the loss of an asset, the future economic benefits arising from the use of the asset will be replaced unless a specific decision to the contrary has been made. Therecoverable amount for most assets is measured at the higher of depreciated replacement cost and fair value less costs to sell. Recoverable amount for assets held primarily to generate net cashinflows is measured at the higher of the present value of future cash flows expected to be obtained from the asset and fair value less costs to sell.(k) LiabilitiesPayablesThese amounts consist predominantly of liabilities for goods and services.Payables are initially recognised at fair value, then subsequently carried at amortised cost and represent liabilities for goods and services provided to Northern Health prior to the end of the financialyear that are unpaid, and arise when the Northern Health becomes obliged to make future payments in respect of the purchase of these goods and services.The normal credit terms are usually Net 45 days.BorrowingsBorrowings in the balance sheet are recognised at fair value upon initial recognition. Subsequent to initial recognition, interest bearing liabilities are measured at amortised cost with any differencebetween the initial recognised amount and the redemption value being recognised in profit and loss over the period of the interest bearing liability using the effective interest rate method. Fair valueis determined in the manner described in Note 19.Northern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 14 of 60

Note 1: Summary of Significant Accounting PoliciesProvisionsNotes To and Forming Part of the Financial StatementsNorthern Health Annual Report 2011/2012Provisions are recognised when Northern Health has a present obligation, the future sacrifice of economic benefits is probable, and the amount of the provision can be measured reliably.The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the risks and uncertainties surroundingthe obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows using a discount rate thatreflects the time value of money and risks specific to the provision.When some or all of the economic benefits required to settle a provision are expected to be received from a third party the receivable is recognised as an asset if it is virtually certain that recoverywill be received and the amount of the receivable can be measured reliably.Employee BenefitsWages and Salaries, Annual Leave, Sick Leave and Accrued Days OffLiabilities for wages and salaries, including non-monetary benefits, annual leave accumulating sick leave and accrued days off expected to be settled within 12 months of the reporting date arerecognised in the provision for employee benefits in respect of employee’s services up to the reporting date, classified as current liabilities and measured at nominal values.Those liabilities that are not expected to be settled within 12 months are also recognised in the provision for employee benefits as current liabilities, but are measured at present value of the amountsexpected to be paid when the liabilities are settled using the remuneration rate expected to apply at the time of settlement.Long Service LeaveThe liability for long service leave (LSL) is recognised in the provision for employee benefits.Current Liability - unconditional LSL (representing 10 or more years of continuous service)Disclosed as a current liability even where Northern Health does not expect to settle the liability within 12 months because it will not have the unconditional right to defer the settlement of theentitlement should an employee take leave within 12 months.The components of this current LSL liability are measured at:Nominal value – component that Northern Health expects to settle within 12 months.Present value – component that Northern Health does not expect to settle within 12 months; andNon-Current Liability – conditional LSL (representing less than 10 years of continuous service)Disclosed as a non-current liability. There is an unconditional right to defer the settlement of the entitlement until the employee has completed the requisite years of service. Conditional LSL isrequired to be measured at present value.Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using interest rates ofCommonwealth Government guaranteed securities in Australia.Termination BenefitsTermination benefits are payable when employment is terminated before the normal retirement date or when as employee accepts voluntary redundancy in exchange for these benefits.Liabilities for termination benefits are recognised when a detailed plan for the termination has been developed and a valid expectation has been raised with those employees affected that theterminations will be carried out. The liabilities for termination benefits are recognised in other creditors unless the amount or timing of the payments is uncertain, in which case they are recognised asa provision.On-CostsEmployee benefit on-costs such as workers compensation and superannuation are recognised together with provisions for employee benefits.(l) LeasesLeases are classified at their inception as either operating or finance leases based on the economic substance of the agreement so as to reflect the risks and rewards incidental to ownership.Leases of property, plant and equipment are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases areclassified as operating leases.Northern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 15 of 60

Note 1: Summary of Significant Accounting PoliciesFinance LeasesEntity as lessorNorthern Health does not hold any finance leases arrangements with other parties.Notes To and Forming Part of the Financial StatementsNorthern Health Annual Report 2011/2012Entity as lesseeFinance leases are recognised as assets and liabilities at amounts equal to the fair value of the lease property or, if lower, the present value of the minimum lease payment, each determined at theinception of the lease. The lease asset is depreciated over the shorter of the estimated useful life of the asset or the term of the lease. Minimum lease payments are allocated between the principalcomponent of the lease liability, and the interest expense calculated using the interest rate implicit in the lease, and charged directly to the comprehensive operating statement.Operating LeasesRental income from operating leases is recognised on a straight-line basis over the term of the relevant lease.Operating lease payments, including any contingent rentals, are recognised as an expense in the operating statement on a straight line basis over the lease term, except where another systematic basisis more representative of the time pattern of the benefits derived from the use of the leased asset.Lease incentivesAll incentives for the agreement of a new or renewed operating lease are recognised as an integral part of the net consideration agreed for the use of the leased asset, irrespective of the incentive'snature or form or the timing of the payments.In the event that lease incentives are received by the lessee to enter into operating leases, such incentives are recognised as a liability. The aggregate benefits of incentives are recognised as areduction of rental expense on a straight line basis except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset is diminished.Leasehold improvementsThe cost of leasehold improvements are capitalised as an asset and depreciated over the remaining term of the lease or the estimated useful life of the improvements, whichever is the shorter.(m) ReservesContributed CapitalConsistent with Australian Accounting Interpretation 1038 Contributions by Owners Made to Wholly-Owned Public Sector Entities and FRD 119 Contributions by Owners , appropriations for additions tothe net asset base have been designated as contributed capital. Other transfers that are in the nature of contributions or distributions that have been designated as contributed capital are also treatedas contributed capital.Property, Plant & Equipment Revaluation SurplusThe asset revaluation surplus is used to record increments and decrements on the revaluation of non-current physical assets.Specific Restricted Purpose ReserveA specific restricted purpose reserve is established where the entity has possession or title to the funds but has no discretion to amend or vary the restriction and/or condition underlying the fundsreceived.(n) CommitmentsCommitments for future expenditure include operating and capital commitments arising from contracts. Commitments are disclosed by way of a note at their nominal value and are inclusive of the GSTpayable. In addition, where it is considered appropriate and provides additional relevant information to users, the net present values of significant individual projects are stated. These futureexpenditures cease to be disclosed as commitments once the related liabilities are recognised on the balance sheet.(o) Contingent assets and contingent liabilitiesContingent assets and contingent liabilities are not recognised in the balance sheet, but are disclosed by way of note and if quantifiable, are measured at nominal value. Contingent assets andcontingent liabilities are presented inclusive of the GST receivable or payable respectively.Northern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 16 of 60

Note 1: Summary of Significant Accounting Policies(p) Goods and Services Tax (GST)Notes To and Forming Part of the Financial StatementsNorthern Health Annual Report 2011/2012Income, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the taxation authority. In this case it is recognised as part of the costof acquisition of the asset or as part of the expense.Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the taxation authority is included with otherreceivables or payables in the balance sheet.Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the taxation authority, arepresented as operating cash flow.Commitments for expenditure and contingent assets and liabilities are presented on a gross basis.(q) Foreign CurrencyAll foreign currency transactions during the financial year are brought to account using the exchange rate in effect at the date of the transaction. Foreign monetary items existing at the end of thereporting period are translated at the closing rate at the date of the end of the reporting period.(r) Rounding Of AmountsAll amounts shown in the financial statements are expressed to the nearest $1,000 unless otherwise stated.(s) Category GroupsNorthern Health has used the following category groups for reporting purposes for the current and previous financial years.Admitted Patient Services (Admitted Patients) comprises all recurrent health revenue/expenditure on admitted patient services, where services are delivered in public hospitals, or free standingday hospital facilities, or alcohol and drug treatment units or hospitals specialising in dental services, hearing and ophthalmic aids.Mental Health Services (Mental Health) comprises all recurrent health revenue/ expenditure on specialised mental health services (child and adolescent, general and adult, community and forensic)managed or funded by the state or territory health administrations, and includes: Admitted patient services (including forensic mental health), outpatient services, emergency department services(where it is possible to separate emergency department mental Heath Services), community based services, residential and ambulatory services.Outpatient Services (Outpatients) comprises all recurrent health revenue/expenditure on public hospital type outpatient services, where services are delivered in public hospital outpatient clinics, orfree standing day hospital facilities, or rehabilitation facilities, or alcohol and drug treatment units, or outpatient clinics specialising in ophthalmic aids or palliative care.Emergency Department Services (EDS) comprises all recurrent health revenue/expenditure on emergency department services that are available free of charge to public patients.Aged Care comprises revenue/expenditure for Home and Community Care (HACC) programs, Allied Health, Aged Care Assessment and support services.Primary Health comprises revenue/expenditure for Community Health Services including health promotion and counselling, physiotherapy, speech therapy, podiatry and occupational therapy.Off Campus, Ambulatory Services (Ambulatory) comprises all recurrent health revenue/expenditure on public hospital type services including palliative care facilities and rehabilitation facilities, aswell as services provided under the following agreements: Services that are provided or received by hospitals (or area health services) but are delivered/received outside a hospital campus, serviceswhich have moved from a hospital to a community setting since June 1998, services which fall within the agreed scope of inclusions under the new system, which have been delivered within hospital’si.e. in rural/remote areas.Residential Aged Care including Mental Health (RAC incl. Mental Health) referred to in the past as psycho geriatric residential services, comprises those Commonwealth-licensed residential agedcare services in receipt of supplementary funding from DHS under the mental health program. It excludes all other residential services funded under the mental health program, such as mental healthfunded community care units (CCUs) and secure extended care units (SECs).Other Services excluded from Australian Health Care Agreement (AHCA) (Other) comprises revenue/expenditure for services not separately classified above, including: Public health servicesincluding Laboratory testing, Blood Borne Viruses / Sexually Transmitted Infections clinical services, Kooris liaison officers, immunisation and screening services, Drugs services including drugwithdrawal, counselling and the needle and syringe program, Dental Health services including general and specialist dental care, school dental services and clinical education, Disability servicesincluding aids and equipment and flexible support packages to people with a disability, Community Care programs including sexual assault support, early parenting services, parenting assessment andskills development, and various support services. Health and Community Initiatives also falls in this category group.Northern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 17 of 60

Note 1: Summary of Significant Accounting Policies(t) Going ConcernNotes To and Forming Part of the Financial StatementsNorthern Health Annual Report 2011/2012The going concern basis was used to prepare the financial statements. The Department of Health has provided assurances to support the ongoing operations and financial requirements of NorthernHealth and to provide Northern Health with adequate cash flow support to enable Northern Health to meet its current and future obligations as and when these fall due for a period up to September2012 should this be required.(u) Accounting Standards issues that are not yet effectiveCertain new accounting standards and interpretations have been published that are not mandatory for the 30 June 2012 reporting period. As at 30 June 2012, the following standards andinterpretations had been issued but were not mandatory for financial years ending 30 June 2012. Northern Health has reviewed these new accounting standards and interpretations which are notmandatory for the financial year ended 30 June 2012 and has not and does not intend to adopt these standards early. The following list records new standards and interpretations that may have somerelevance to future disclosures for Northern Health.Standard / Interpretation SummaryAASB 9 Financial instruments This standard simplifies requirements for theclassification and measurement of financial assetsresulting from Phase 1 of the IASB’s project toreplace IAS 39 Financial Instruments: Recognitionand Measurement (AASB 139 Financial Instruments:Recognition and Measurement).Applicable for reporting periods beginning onor ending on:Impact on Financial StatementsBeginning 1 Jan 2013 Detail of impact is still being assessed.AASB 10 Consolidated Financial Statements This Standard establishes principles for thepresentation and preparation of consolidatedfinancial statements when an entity controls one ormore other entities and supersedes thoserequirements in AASB 127 Consolidated andSeparate Financial Statements and Interpretation112 Consolidation – Special Purpose Entities.Beginning 1 Jan 2013 Not-for-profit entities are not permitted to apply thisStandard prior to the mandatory application date.The AASB is assessing the applicability of principlesin AASB 10 in a not-for-profit context. As such,impact will be assessed after the AASB’sdeliberation.AASB 12 Disclosure of Interests in Other Entities This Standard requires disclosure of information thatenables users of financial statements to evaluate thenature of, and risks associated with, interests inother entities and the effects of those interests onthe financial statements. This Standard replaces thedisclosure requirements in AASB 127 and AASB 131.Beginning 1 Jan 2013 Not-for-profit entities are not permitted to apply thisStandard prior to the mandatory application date.The AASB is assessing the applicability of principlesin AASB 12 in a not-for-profit context. As such,impact will be assessed after the AASB’sdeliberation.AASB 13 Fair Value Measurement This Standard outlines the requirements formeasuring the fair value of assets and liabilities andreplaces the existing fair value definition andguidance in other AASs. AASB 13 includes a ‘fairvalue hierarchy’ which ranks the valuation techniqueinputs into three levels using unadjusted quotedprices in active markets for identical assets orliabilities; other observable inputs; and unobservableinputs.Beginning 1 Jan 2013 Disclosure for fair value measurements usingunobservable inputs are relatively onerous comparedto disclosure for fair value measurements usingobservable inputs. Consequently, the Standard mayincrease the disclosures for public sector entities thathave assets measured using depreciatedreplacement cost.Northern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 18 of 60

Note 1: Summary of Significant Accounting PoliciesAASB 119 Employee Benefits In this revised Standard for defined benefitsuperannuation plans, there is a change to themethodology in the calculation of superannuationexpenses, in particular there is now a change in thesplit between superannuation interest expense(classified as transactions) and actuarial gains andlosses (classified as ‘Other economic flows – othermovements in equity’) reported on thecomprehensive operating statement.Notes To and Forming Part of the Financial StatementsNorthern Health Annual Report 2011/2012Beginning 1 Jan 2013 Not-for-profit entities are not permitted to apply thisStandard prior to the mandatory application date.While the total superannuation expense isunchanged, the revised methodology is expected tohave a negative impact on the net result fromtransactions of the general government sector andfor those few Victorian public sector entities thatreport superannuation defined benefit plans.AASB 127 Separate Financial Statements This revised Standard prescribes the accounting anddisclosure requirements for investments insubsidiaries, joint ventures and associates when anentity prepares separate financial statements.AASB 1053 Application of Tiers of Australian AccountingStandardsAASB 2009-11 Amendments to Australian Accounting Standardsarising from AASB 9 [AASB 1, 3, 4, 5, 7, 101, 102, 108, 112,118, 121, 127, 128, 131, 132, 136, 139, 1023 and 1038 andInterpretations 10 and 12]AASB 2010-2 Amendments to Australian Accounting Standardsarising from Reduced Disclosure RequirementsThis Standard establishes a differential financialreporting framework consisting of two tiers ofreporting requirements for preparing generalpurpose financial statements.This Standard gives effect to consequential changesarising from the issuance of AASB 9.This Standard makes amendments to manyAustralian Accounting Standards, includingInterpretations, to introduce reduced disclosurerequirements to the pronouncements for applicationby certain types of entities.Beginning 1 Jan 2013 Not-for-profit entities are not permitted to apply thisStandard prior to the mandatory application date.The AASB is assessing the applicability of principlesin AASB 127 in a not-for-profit context. As such,impact will be assessed after the AASB’sdeliberation.Beginning 1 July 2013 The Victorian Government is currently consideringthe impacts of Reduced Disclosure Requirements(RDRs) for certain public sector entities and has notdecided if RDRs will be implemented in the Victorianpublic sector.Beginning 1 Jan 2013 No significant impact is expected from theseconsequential amendments on entity reporting.Beginning 1 July 2013 The Victorian Government is currently consideringthe impacts of Reduced Disclosure Requirements(RDRs) for certain public sector entities and has notdecided if RDRs will be implemented in the Victorianpublic sector.AASB 2010-7 Amendments to Australian Accounting Standardsarising from AASB 9 (December 2010) [AASB 1, 3, 4, 5, 7, 101,102, 108, 112, 118, 120, 121, 127, 128, 131, 132, 136, 137,139, 1023 & 1038 and Interpretations 2, 5, 10, 12, 19 & 127]This Standard gives effect to consequential changesarising from the issuance of AASB 9.Beginning 1 Jan 2013 No significant impact is expected from theseconsequential amendments on entity reporting.AASB 2010-10 Further Amendments to Australian AccountingStandards – Removal of Fixed Dates for First-time AdoptersThe amendments ultimately affect AASB 1 First-timeAdoption of Australian Accounting Standards andprovide relief for first-time adopters of AustralianAccounting Standards from having to reconstructtransactions that occurred before their date oftransition to Australian Accounting Standards.Beginning 1 Jan 2013 No significant impact is expected on entity reporting.AASB 2011-2 Amendments to Australian Accounting Standardsarising from the Trans-Tasman Convergence Project – ReducedDisclosure Requirements[AASB 101 & AASB 1054]The objective of this amendment is to include someadditional disclosure from the Trans-TasmanConvergence Project and to reduce disclosurerequirements for entities preparing general purposefinancial statements under Australian AccountingStandards – Reduced Disclosure Requirements.Beginning 1 July 2013 The Victorian Government is currently consideringthe impacts of Reduced Disclosure Requirements(RDRs) and has not decided if RDRs will beimplemented in the Victorian public sector.Northern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 19 of 60

Note 1: Summary of Significant Accounting PoliciesAASB 2011-3 Amendments to Australian Accounting Standards– Orderly Adoption of Changes to the ABS GFS Manual andRelated Amendments [AASB 1049]AASB 2011-4Amendments to Australian Accounting Standards to RemoveIndividual Key Management Personnel Disclosure Requirements[AASB 124]This amends AASB 1049 to clarify the definition ofthe ABS GFS Manual, and to facilitate the adoptionof changes to the ABS GFS Manual and relateddisclosures.This Standard amends AASB 124 Related PartyDisclosures by removing the disclosure requirementsin AASB 124 in relation to individual keymanagement personnel (KMP).Notes To and Forming Part of the Financial StatementsNorthern Health Annual Report 2011/2012Beginning 1 July 2012 This amendment provides clarification to userspreparing the whole of government and generalgovernment sector financial reports on the version ofthe GFS Manual to be used and what to disclose ifthe latest GFS Manual is not used.No impact on departmental or entity reporting.Beginning 1 July 2013 No significant impact is expected from theseconsequential amendments on entity reporting.AASB 2011-6Amendments to Australian Accounting Standards – ExtendingRelief from Consolidation, the Equity Method and ProportionateConsolidation – Reduced Disclosure Requirements[AASB 127, AASB 128 & AASB 131]The objective of this Standard is to makeamendments to AASB 127 Consolidated andSeparate Financial Statements, AASB 128Investments in Associates and AASB 131 Interests inJoint Ventures to extend the circumstances in whichan entity can obtain relief from consolidation, theequity method or proportionate consolidation.Beginning 1 July 2013 The Victorian Government is currently consideringthe impacts of Reduced Disclosure Requirements(RDRs) and has not decided if RDRs will beimplemented in the Victorian public sector.AASB 2011-7 Amendments to Australian Accounting Standardsarising from the Consolidation and Joint ArrangementsStandards[AASB 1, 2, 3, 5, 7, 9, 2009-11, 101, 107, 112, 118, 121, 124,132, 133, 136, 138, 139, 1023 & 1038 and Interpretations 5,9, 16 & 17]This Standard outlines consequential changes arisingfrom the issuance of the five ‘new Standards’ toother Standards. For example, references to AASB127 Consolidated and Separate Financial Statementsare amended to AASB 10 Consolidated FinancialStatements or AASB 127 Separate FinancialStatements, and references to AASB 131 Interests inJoint Ventures are deleted as that Standard hasbeen superseded by AASB 11 and AASB 128 (August2011).Beginning 1 Jan 2013 No significant impact is expected from theseconsequential amendments on entity reporting.AASB 2011-8Amendments to Australian Accounting Standards arising fromAASB 13[AASB 1, 2, 3, 4, 5, 7, 9, 2009-11, 2010-7, 101, 102, 108,110, 116, 117, 118, 119, 120, 121, 128, 131, 132, 133, 134,136, 138, 139, 140, 141, 1004, 1023 & 1038 andInterpretations 2, 4, 12, 13, 14, 17, 19, 131 & 132]This amending Standard makes consequentialchanges to a range of Standards and Interpretationsarising from the issuance of AASB 13. In particular,this Standard replaces the existing definition andguidance of fair value measurements in otherAustralian Accounting Standards and Interpretations.Beginning 1 Jan 2013 Disclosures for fair value measurements usingunobservable inputs is potentially onerous, and mayincrease disclosures for assets measured usingdepreciated replacement cost.AASB 2011-9Amendments to Australian Accounting Standards – Presentationof Items of Other Comprehensive Income[AASB 1, 5, 7, 101, 112, 120, 121, 132, 133, 134, 1039 &1049]The main change resulting from this Standard is arequirement for entities to group items presented inother comprehensive income (OCI) on the basis ofwhether they are potentially reclassifiable to profit orloss subsequently (reclassification adjustments).These amendments do not remove the option topresent profit or loss and other comprehensiveincome in two statements, nor change the option topresent items of OCI either before tax or net of tax.Beginning 1 July 2012 This amending Standard could change the currentpresentation of ‘Other economic flows- othermovements in equity’ that will be grouped on thebasis of whether they are potentially reclassifiable toprofit or loss subsequently. No other significantimpact will be expected.AASB 2011-10Amendments to Australian Accounting Standards arising fromAASB 119 (September 2011)[AASB 1, AASB 8, AASB 101, AASB 124, AASB 134, AASB 1049& AASB 2011-8 and Interpretation 14]This Standard makes consequential changes to arange of other Australian Accounting Standards andInterpretation arising from the issuance of AASB 119Employee Benefits.Beginning 1 Jan 2013 No significant impact is expected from theseconsequential amendments on entity reporting.Northern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 20 of 60

Note 1: Summary of Significant Accounting PoliciesAASB 2011-11This Standard makes amendments to AASB 119Amendments to AASB 119 (September 2011) arising fromReduced Disclosure RequirementsEmployee Benefits (September 2011), to incorporatereduced disclosure requirements into the Standardfor entities applying Tier 2 requirements in preparinggeneral purpose financial statements.Notes To and Forming Part of the Financial StatementsNorthern Health Annual Report 2011/2012Beginning 1 July 2013 The Victorian Government is currently consideringthe impacts of Reduced Disclosure Requirements(RDRs) and has not decided if RDRs will beimplemented in the Victorian public sector.AASB 2011-12 Amendments to Australian Accounting Standardsarising from Interpretation 20[AASB 1]This Standard makes amendments to AASB 1 FirsttimeAdoption of Australian Accounting Standards,as a consequence of the issuance of IFRICInterpretation 20 Stripping Costs in the ProductionPhase of a Surface Mine. This Standard allows thefirst-time adopters to apply the transitionalprovisions contained in Interpretation 20.Beginning 1 Jan 2013 There may be an impact for new agencies that adoptAustralian Accounting Standards for the first time.No implication is expected for existing entities in theVictorian public sector.2011-13 Amendments to Australian Accounting Standard –Improvements to AASB 10492012-1 Amendments to Australian Accounting Standards - FairValue Measurement - Reduced Disclosure Requirements[AASB 3, AASB 7, AASB 13, AASB 140 & AASB 141]This Standard aims to improve the AASB 1049Whole of Government and General GovernmentSector Financial Reporting at the operational level.The main amendments clarify a number ofrequirements in AASB 1049, including theamendment to allow disclosure of other measures ofkey fiscal aggregates as long as they are clearlydistinguished from the key fiscal aggregates and donot detract from the the information required byAASB 1049. Furthermore, this Standard providesadditional guidance and examples on theclassification between ‘transactions’ and ‘othereconomic flows’ for GAAP items without GFSequivalents.This amending Standard prescribes the reduceddisclosure requirements in a number of AustralianAccounting Standards as a consequence of theissuance of AASB 13 Fair Value Measurement.Beginning 1 July 2012 No significant impact is expected from theseconsequential amendments on entity reporting.Beginning 1 July 2013 As the Victorian whole of government and thegeneral government (GG) sector are subject to Tier1 reporting requirements (refer to AASB 1053Application of Tiers of Australian AccountingStandards), the reduced disclosure requirementsincluded in AASB 2012-1 will not affect the financialreporting for Victorian whole of government and GGsector.Northern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 21 of 60

Note 2: RevenueNotes To and Forming Part of the Financial StatementsNorthern Health Annual Report 2011/2012Parent ConsolidatedHSA HSA Non HSA Non HSA Total Total HSA HSA Non HSA Non HSA Total Total2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000Revenue from Operating ActivitiesGovernment Grants- Department of Health 277,164 259,233 2 - 277,166 259,233 277,164 259,233 2 - 277,166 259,233- Commonwealth Government- Residential Aged Care Subsidy 2,479 2,293 - - 2,479 2,293 2,479 2,293 - - 2,479 2,293- Other 10,562 7,837 9 117 10,571 7,954 10,562 7,837 9 117 10,571 7,954Total Government Grants 290,205 269,363 11 117 290,216 269,480 290,205 269,363 11 117 290,216 269,480Indirect Contributions by Department of Health- Insurance 494 5,178 - - 494 5,178 494 5,178 - - 494 5,178- Long Service Leave 602 252 - - 602 252 602 252 - - 602 252Total Indirect Contributions byDepartment of Health 1,096 5,430 - - 1,096 5,430 1,096 5,430 - - 1,096 5,430Patient and Resident Fees- Patient and Resident Fees (refer note 2b) 12,136 10,101 157 277 12,293 10,378 12,136 10,101 157 277 12,293 10,378- Residential Aged Care (refer note 2b) 428 405 - - 428 405 428 405 - - 428 405Total Patient & Resident Fees 12,564 10,506 157 277 12,721 10,783 12,564 10,506 157 277 12,721 10,783Business Units & Specific Purpose Funds- Private Practice and Other PatientActivities Fees - - 2,053 1,388 2,053 1,388 - - 2,053 1,388 2,053 1,388- Pharmacy Services - - 291 839 291 839 - - 291 839 291 839- Catering - - 217 275 217 275 - - 217 275 217 275- Cafeteria - - - 92 - 92 - - - 92 - 92- Car Park - - 2,299 2,075 2,299 2,075 - - 2,299 2,075 2,299 2,075- Property Income - - 2,721 2,780 2,721 2,780 - - 2,721 2,780 2,721 2,780- Research - - 334 347 334 347 - - 334 347 334 347Total Business Units & Specific PurposeFunds - - 7,915 7,796 7,915 7,796 - - 7,915 7,796 7,915 7,796Donations & Bequests 10 5 516 666 526 671 10 5 329 734 339 739Recoupment from Private Practice for Use ofHospital Facilities 1,912 1,714 8 8 1,920 1,722 1,912 1,714 8 8 1,920 1,722Other Revenue from Operating Activities 2,164 2,796 5,832 4,602 7,996 7,398 2,164 2,796 5,902 4,602 8,066 7,398Sub-Total Revenue from OperatingActivities 307,951 289,814 14,439 13,466 322,390 303,280 307,951 289,814 14,322 13,534 322,273 303,348Northern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 22 of 60

Notes To and Forming Part of the Financial StatementsNorthern Health Annual Report 2011/2012Note 2: Revenue (Continued)Parent ConsolidatedHSA HSA Non HSA Non HSA Total Total HSA HSA Non HSA Non HSA Total Total2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000Revenue from Non-Operating ActivitiesInterest & Dividends 230 720 43 (1) 273 719 230 372 99 386 329 758Sub-Total Revenue from Non-OperatingActivities 230 720 43 (1) 273 719 230 372 99 386 329 758Revenue from Capital Purpose IncomeState Government Capital Grants- Minor Capital Works - - - 446 - 446 - - - 446 - 446- Targeted Capital Works and Equipment - - 14,232 11,404 14,232 11,404 - - 14,232 11,404 14,232 11,404Residential Accommodation Payments (refernote 2b) - - 105 75 105 75 - - 105 75 105 75Assets Received Free of Charge (refer note 2d) - - 269 - 269 - - - 269 - 269 -Donations & Bequests - - 513 280 513 280 - - 571 7 571 7Other Revenue - - 1,310 424 1,310 424 - - 1,310 424 1,310 424Capital Interest - - 415 - 415 - - - 415 - 415 -Net Gain/(Loss) on Disposal of Non-FinancialAssets (refer note 2c) - - (149) 298 (149) 298 - - (149) 298 (149) 298Sub-Total Revenue from Capital PurposeIncome - - 16,694 12,927 16,694 12,927 - - 16,752 12,654 16,752 12,654Total Revenue (refer to note 2a) 308,181 290,534 31,176 26,392 339,358 316,926 308,181 290,186 31,173 26,574 339,355 316,760Indirect contributions by Department of Health: Department of Health makes certain payments on behalf of Northern Health. These amounts have been brought to account in determining the operatingresult for the year by recording them as revenue and expenses.Northern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 23 of 60

Note 2a: Analysis of Revenue by Source(based on the consolidated view of note 2)Notes To and Forming Part of the Financial StatementsNorthern Health Annual Report 2011/2012AdmittedPatients Outpatients EDSAmbulatoryOther Total2012 2012 2012 2012 2012 2012 2012 2012 2012$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000Revenue from Services Supported by HealthServices AgreementGovernment Grants 177,888 21,890 14,985 58,800 2,479 9,365 - 4,798 290,205Indirect contributions by Department of Health 1,096 - - - - - - - 1,096Patient & Resident Fees 8,133 437 44 3,435 428 86 - 1 12,564Donations & Bequests (non capital) - - - - - - - 10 10Recoupment from Private Practice for Use of HospitalFacilities 1,911 1 - - - - - - 1,912Other Revenue from Operating Activities 750 210 131 255 4 4 - 810 2,164Interest & Dividends - - - - - - - 230 230Sub-Total Revenue from Services Supported byHealth Services Agreement 189,778 22,538 15,160 62,490 2,911 9,455 - 5,849 308,181RAC incl.MentalHealthAged CarePrimaryHealthRevenue from Services Supported by Hospital andCommunity InitiativesDonations & Bequests (non capital) - - - - - - - 329 329Business Units & Specific Purpose Funds - - - - - - - 7,915 7,915Other - - - - - - - 6,177 6,177Capital Purpose Income (refer note 2) - - - - 105 - - 16,647 16,752Sub-Total Revenue from Services Supported byHospital and Community Initiatives - - - - 105 - - 31,068 31,173Total Revenue 189,778 22,538 15,160 62,490 3,016 9,455 - 36,917 339,355Indirect contributions by Department of Health: Department of Health makes certain payments on behalf of Northern Health. These amounts have been brought to account in determining the operatingresult for the year by recording them as revenue and expenses.Note: The comparatives for EDS revenue have been significantly impacted by a change in the financial allocation model used to report income by program.Northern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 24 of 60

Note 2a: Analysis of Revenue by Source (Continued)(based on the consolidated view of note 2)Notes To and Forming Part of the Financial StatementsNorthern Health Annual Report 2011/2012AdmittedPatientsOutpatients EDS AmbulatoryOther Total2011 2011 2011 2011 2011 2011 2011 2011 2011$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000Revenue from Services Supported by HealthServices AgreementGovernment Grants 162,369 19,593 16,081 54,098 2,293 8,325 - 6,604 269,363Indirect contributions by Department of Health 5,430 - - - - - - - 5,430Patient & Resident Fees 6,096 389 37 3,476 405 98 - 5 10,506Donations & Bequests (non capital) - - - - - - - 5 5Recoupment from Private Practice for Use of HospitalFacilities 1,714 - - - - - - - 1,714Other Revenue from Operating Activities 107 7 (20) 223 - 12 - 2,467 2,796Interest & Dividends 300 - - - - - - 72 372Sub-Total Revenue from Services Supported byHealth Services Agreement 176,016 19,989 16,098 57,797 2,698 8,435 - 9,153 290,186RAC incl.MentalHealthAged CarePrimaryHealthRevenue from Services Supported by Hospital andCommunity InitiativesDonations & Bequests (non capital) - - - - - - - 734 734Business Units & Specific Purpose Funds - - - - - - - 7,796 7,796Other - - - - - - - 5,390 5,390Capital Purpose Income (refer note 2) - - - - - - - 12,654 12,654Sub-Total Revenue from Services Supported byHospital and Community Initiatives - - - - - - - 26,574 26,574Total Revenue 176,016 19,989 16,098 57,797 2,698 8,435 - 35,727 316,760Indirect contributions by Department of Health: Department of Health makes certain payments on behalf of Northern Health. These amounts have been brought to account in determining the operatingresult for the year by recording them as revenue and expenses.Northern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 25 of 60

Note 2b: Patient and Resident FeesNotes To and Forming Part of the Financial StatementsNorthern Health Annual Report 2011/2012Parent Entity Parent Entity Consol'd Consol'd2012 2011 2012 2011$'000 $'000 $'000 $'000Patient and Resident Fees RaisedRecurrent:Acute– Inpatients 11,856 9,989 11,856 9,989– Outpatients 437 389 437 389Residential Aged Care– Generic 428 405 428 405Total Recurrent 12,721 10,783 12,721 10,783Capital Purpose:Residential Accommodation Payments 105 75 105 75Total Capital 105 75 105 75Note 2c: Net Gain/(Loss) on Disposal of Non-Financial AssetsParent Entity Parent Entity Consol'd Consol'd2012 2011 2012 2011$'000 $'000 $'000 $'000Proceeds from Disposals of AssetsLand & Buildings - 595 - 595Medical Equipment 24 - 24 -Motor Vehicles - 96 - 96Other - 6 - 6Total Proceeds from Disposal of Assets 24 697 24 697Less: Written Down Value of Assets SoldLand & Buildings - 377 - 377Medical Equipment 170 - 170 -Motor Vehicles - 21 - 21Other 3 1 3 1Total Written Down Value of Assets Sold 173 399 173 399Net Gains/(Losses) on Disposal of Assets (149) 298 (149) 298Note 2d: Assets Received Free of Charge or for nominal considerationParent Entity Parent Entity Consol'd Consol'd2012 2011 2012 2011$'000 $'000 $'000 $'000During the reporting period fair value of assets received free of charge was as follows:Paintings; Sculptures and Other Artwork 269 - 269 -Total 269 - 269 -Northern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 26 of 60

Note 3: ExpensesNotes To and Forming Part of the Financial StatementsNorthern Health Annual Report 2011/2012Parent ConsolidatedHSA HSA Non HSA Non HSA Total Total HSA HSA Non HSA Non HSA Total Total2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000Employee BenefitsSalaries & Wages 196,118 182,176 3,347 2,235 199,465 184,411 196,118 182,176 3,497 2,323 199,615 184,499Work Cover Premium 1,555 1,102 - - 1,555 1,102 1,555 1,102 - - 1,555 1,102Departure Packages 173 320 1 1 174 321 173 320 1 1 174 321Long Service Leave 5,084 3,752 42 62 5,126 3,814 5,084 3,752 42 62 5,126 3,814Superannuation 17,476 16,239 210 220 17,686 16,459 17,476 16,239 210 220 17,686 16,459Total Employee Benefits 220,406 203,589 3,600 2,518 224,006 206,107 220,406 203,589 3,750 2,606 224,156 206,195Non Salary Labour CostsFees for Visiting Medical Officers 2,453 1,925 652 862 3,105 2,787 2,453 1,925 652 862 3,105 2,787Agency Costs - Nursing 3,865 4,152 2 - 3,867 4,152 3,865 4,152 2 - 3,867 4,152Agency Costs - Other 3,964 3,764 204 311 4,168 4,075 3,964 3,764 204 311 4,168 4,075Total Non Salary Labour Costs 10,282 9,841 858 1,173 11,140 11,014 10,282 9,841 858 1,173 11,140 11,014Supplies & ConsumablesDrug Supplies 9,974 10,027 15 123 9,989 10,150 9,974 10,027 15 123 9,989 10,150S100 Drugs 1,347 1,975 - 239 1,347 2,214 1,347 1,975 - 239 1,347 2,214Medical, Surgical Supplies and Prosthesis 31,878 30,502 155 76 32,033 30,578 31,878 30,502 161 76 32,039 30,578Pathology Supplies 6,384 6,001 - 2 6,384 6,003 6,384 6,001 - 2 6,384 6,003Food Supplies 5,987 5,590 34 84 6,021 5,674 5,987 5,590 34 84 6,021 5,674Total Supplies & Consumables 55,570 54,095 204 524 55,774 54,619 55,570 54,095 210 524 55,780 54,619Other Expenses from ContinuingOperationsDomestic Services & Supplies 6,996 6,834 347 452 7,343 7,286 6,996 6,834 347 452 7,343 7,286Fuel, Light, Power and Water 2,173 2,410 84 82 2,257 2,492 2,173 2,410 84 82 2,257 2,492Insurance costs 5,556 5,178 - - 5,556 5,178 5,556 5,178 - - 5,556 5,178Motor Vehicle Expenses 218 358 174 90 392 448 218 358 174 90 392 448Repairs & Maintenance 2,214 2,119 129 176 2,343 2,295 2,214 2,119 129 176 2,343 2,295Maintenance Contracts 2,327 2,088 12 2 2,339 2,090 2,327 2,088 12 2 2,339 2,090Patient Transport 1,364 1,271 3 - 1,367 1,271 1,364 1,271 3 - 1,367 1,271Bad & Doubtful Debts 248 (76) 1 - 249 (76) 248 (76) 1 - 249 (76)Lease Expenses 696 648 403 370 1,099 1,018 696 648 403 370 1,099 1,018Other Administrative Expenses 10,502 9,434 3,183 1,807 13,685 11,241 10,502 9,086 2,918 1,427 13,420 10,513Audit Fees- VAGO - Audit of Financial Statements 76 69 - - 76 69 76 69 - - 76 69- Other 323 289 - - 323 289 323 289 3 2 326 291Total Other Expenses from ContinuingOperations 32,693 30,622 4,336 2,979 37,029 33,601 32,693 30,274 4,074 2,601 36,767 32,875Northern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 27 of 60

Note 3: Expenses (Continued)Notes To and Forming Part of the Financial StatementsNorthern Health Annual Report 2011/2012Parent ConsolidatedHSA HSA Non HSA Non HSA Total Total HSA HSA Non HSA Non HSA Total Total2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000Expenditure using Capital Purpose IncomeEmployee Benefits - - 485 387 485 387 - - 485 387 485 387Other Expenses - - 438 352 438 352 - - 438 352 438 352Total Expenditure using Capital PurposeIncome - - 923 739 923 739 - - 923 739 923 739Depreciation & Amortisation - - 22,065 21,803 22,065 21,803 - - 22,065 21,803 22,065 21,803Finance Costs - - 24 28 24 28 - - 24 28 24 28Total - - 22,089 21,831 22,089 21,831 - - 22,089 21,831 22,089 21,831Total Expenses 318,951 298,147 32,010 29,764 350,961 327,911 318,951 297,799 31,904 29,474 350,855 327,273Northern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 28 of 60

Note 3a: Analysis of Expenses by Source(based on the consolidated view)Notes To and Forming Part of the Financial StatementsNorthern Health Annual Report 2011/20122012 2012 2012 2012 2012 2012 2012 2012 2012$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000Services Supported by Health Services AgreementEmployee Benefits 132,803 16,790 17,284 44,960 2,198 4,584 - 1,787 220,406Non Salary Labour Costs 6,830 746 592 1,318 153 66 - 577 10,282Supplies & Consumables 35,682 3,082 1,683 10,801 405 2,671 - 1,246 55,570Other Expenses from Continuing Operations 20,261 789 7,126 2,811 399 815 - 492 32,693Sub-Total Expenses from Services Supported by HealthServices Agreement 195,576 21,407 26,685 59,890 3,155 8,136 - 4,102 318,951Services Supported by Hospital and CommunityInitiativesRAC incl.AdmittedMentalPrimaryPatients Outpatients EDS Ambulatory Health Aged Care Health OtherEmployee Benefits - - - - - - - 4,235 4,235Non Salary Labour Costs - - - - - - - 858 858Supplies & Consumables - - - - - - - 210 210Other Expenses from Continuing Operations - - - - - - - 4,536 4,536Depreciation & Amortisation (refer note 4) - - - - - - - 22,065 22,065Sub-Total Expense from Services Supported byHospital and Community Initiatives - - - - - - - 31,904 31,904TotalServices Supported by Capital SourcesImpairment of Financial Assets (refer note 3) - - - - - - - - -Sub-Total Expenses from Services Supported byCapital Resources - - - - - - - - -Total Expenses 195,576 21,407 26,685 59,890 3,155 8,136 - 36,006 350,855Note: The comparatives for Ambulatory and Aged Care expenditure have been significantly impacted by a change in the financial allocation model used to report expenditure by program.Northern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 29 of 60

Note 3a: Analysis of Expenses by Source (Continued)(based on the consolidated view)RAC incl.AdmittedPatients Outpatients EDS Ambulatory MentalHealth Aged CareNotes To and Forming Part of the Financial StatementsNorthern Health Annual Report 2011/20122011 2011 2011 2011 2011 2011 2011 2011 2011$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000Services Supported by Health Services AgreementEmployee Benefits 135,307 14,583 15,286 29,779 2,175 3,360 - 3,099 203,589Non Salary Labour Costs 5,344 2,562 656 972 95 2 - 210 9,841Supplies & Consumables 29,791 306 6,366 13,366 370 2,096 - 1,800 54,095Other Expenses from Continuing Operations 19,369 1,544 1,659 6,581 393 497 - 231 30,274Sub-Total Expenses from Services Supported by HealthServices Agreement 189,811 18,995 23,967 50,698 3,033 5,955 - 5,340 297,799PrimaryHealthOtherTotalServices Supported by Hospital and CommunityInitiativesEmployee Benefits - - - - - - - 2,993 2,993Non Salary Labour Costs - - - - - - - 1,173 1,173Supplies & Consumables - - - - - - - 524 524Other Expenses from Continuing Operations - - - - - - - 2,981 2,981Depreciation & Amortisation (refer note 4) - - - - - - - 21,803 21,803Sub-Total Expense from Services Supported byHospital and Community Initiatives - - - - - - - 29,474 29,474Services Supported by Capital SourcesImpairment of Financial Assets (refer note 3) - - - - - - - - -Sub-Total Expenses from Services Supported byCapital Resources - - - - - - - - -Total Expenses 189,811 18,995 23,967 50,698 3,033 5,955 - 34,814 327,273Northern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 30 of 60

Notes To and Forming Part of the Financial StatementsNorthern Health Annual Report 2011/2012Note 4: Depreciation and AmortisationParent Entity Parent Entity Consol'd Consol'd2012 2011 2012 2011$'000 $'000 $'000 $'000DepreciationBuildings 17,488 17,343 17,488 17,343Plant & Equipment 235 198 235 198Medical Equipment 2,314 2,052 2,314 2,052Computers & Communication 1,006 1,211 1,006 1,211Furniture & Fittings 215 202 215 202Motor Vehicles 93 177 93 177Non Medical Equipment 143 133 143 133Total Depreciation 21,494 21,316 21,494 21,316AmortisationIntangible Assets 571 487 571 487Total Amortisation 571 487 571 487Total Depreciation & Amortisation 22,065 21,803 22,065 21,803Note 5: Finance CostsParent Entity Parent Entity Consol'd Consol'd2012 2011 2012 2011$'000 $'000 $'000 $'000Interest on Long Term Borrowings 24 28 24 28TOTAL 24 28 24 28Note 6: Cash and Cash EquivalentsFor the purposes of the Cash Flow Statement, cash assets includes cash on hand and in banks, and shorttermdeposits which are readily convertible to cash on hand, and are subject to an insignificant risk of changein value, net of outstanding bank overdrafts. (Note that Northern Health does not maintain an overdraftfacility).Parent Entity Parent Entity Consol'd Consol'd2012 2011 2012 2011$'000 $'000 $'000 $'000Cash on Hand 28 29 28 29Cash at Bank 9,654 4,169 10,732 5,401TOTAL 9,682 4,198 10,760 5,430Cash for Health Service Operations (as per Cash Flow Statement) 9,676 4,195 10,754 5,427Cash for Monies Held in Trust- Cash at Bank - Patient Money 6 3 6 3TOTAL 9,682 4,198 10,760 5,430Northern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 31 of 60

Note 7: ReceivablesNotes To and Forming Part of the Financial StatementsNorthern Health Annual Report 2011/2012Parent Entity Parent Entity Consol'd Consol'd2012 2011 2012 2011$'000 $'000 $'000 $'000CURRENTContractualTrade Debtors 1,439 1,697 1,439 1,697Patient Fees 3,324 2,769 3,324 2,769Accrued Investment Income - 37 - 37Accrued Revenue - Other 1,186 975 1,186 975Less Allowance for Doubtful DebtsTrade Debtors (8) (14) (8) (14)Patient Fees (388) (330) (388) (330)5,553 5,134 5,553 5,134StatutoryGST Receivable 1,190 1,337 1,190 1,3371,190 1,337 1,190 1,337TOTAL CURRENT RECEIVABLES 6,743 6,471 6,743 6,471NON CURRENTStatutoryLong Service Leave - Department of Health 3,434 2,832 3,434 2,832TOTAL NON-CURRENT RECEIVABLES 3,434 2,832 3,434 2,832TOTAL RECEIVABLES 10,177 9,303 10,177 9,303Parent Entity Parent Entity Consol'd Consol'd2012 2011 2012 2011(a) Movement in the Allowance for Doubtful Debts $'000 $'000 $'000 $'000Balance at beginning of year 344 699 344 699Amounts written off during the year (190) (245) (190) (245)Increase/(decrease) in allowance recognised in profit or loss 242 (110) 242 (110)Balance at end of year 396 344 396 344(b) Ageing analysis of receivablesPlease refer to note 19(b) for the ageing analysis of receivables(c) Nature and extent of risk arising from receivablesPlease refer to note 19(b) for the nature and extent of credit risk arising from receivablesNorthern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 32 of 60

Notes To and Forming Part of the Financial StatementsNorthern Health Annual Report 2011/2012Note 8: Other Financial AssetsOperating Fund Specific Purpose Fund Capital Fund Parent EntityConsol'd2012 2011 2012 2011 2012 2011 2012 2011 2012 2011$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000NON CURRENTAvailable for Sale - At Fair Value - - - - - - - - - -TOTAL - - - - - - - - - -Represented by:Health Service Investments - - - - - - - - - -TOTAL - - - - - - - - - -(b) Ageing analysis of Other Financial AssetsPlease refer to note 19(b) for the ageing analysis of other financial assets(c) Nature and extent of risk arising from Other Financial AssetsPlease refer to note 19(b) for the nature and extent of credit risk arising from other financial assets(d) Available for Sale Investments are represented by:Beryl Finance Ltd Global Bank Credit Linked Note maturing 20 September 2014. The cost base of this note was $1.5m and an impairment charge for the full value of this note has been recognised inprior years with the fair value recorded at Nil as at 30 June 2012, (2011: Nil).Northern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 33 of 60

Note 9: InventoriesNotes To and Forming Part of the Financial StatementsNorthern Health Annual Report 2011/2012Parent Entity Parent Entity Consol'd Consol'd2012 2011 2012 2011$'000 $'000 $'000 $'000Imprest medical supplies (at cost) 378 - 378 -Pharmaceuticals (at cost) 981 956 981 956TOTAL INVENTORIES 1,359 956 1,359 956Note 10: Other AssetsParent Entity Parent Entity Consol'd Consol'dCURRENT 2012 2011 2012 2011$'000 $'000 $'000 $'000Prepayments 252 195 252 195TOTAL 252 195 252 195Northern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 34 of 60

Note 11: Property, Plant & EquipmentNotes To and Forming Part of the Financial StatementsNorthern Health Annual Report 2011/2012Parent Entity Parent Entity Consol'd Consol'd2012 2011 2012 2011$'000 $'000 $'000 $'000LandLand at Valuation 38,213 33,449 38,213 33,449Total Land 38,213 33,449 38,213 33,449BuildingsBuildings at cost 43,921 32,395 43,921 32,395Less Acc'd Depreciation 3,978 2,013 3,978 2,01339,943 30,382 39,943 30,382Buildings at valuation 226,480 226,480 226,480 226,480Less Acc'd Depreciation 46,580 31,056 46,580 31,056179,900 195,424 179,900 195,424Total Buildings 219,843 225,806 219,843 225,806Plant and EquipmentPlant and Equipment 2,725 2,373 2,725 2,373Less Acc'd Depreciation 1,103 869 1,103 869Total Plant and Equipment 1,622 1,504 1,622 1,504Medical EquipmentMedical Equipment 31,009 25,154 31,009 25,154Less Acc'd Depreciation 15,774 14,818 15,774 14,818Total Medical Equipment 15,235 10,336 15,235 10,336Computers & CommunicationComputers & Communication 8,601 7,864 8,601 7,864Less Acc'd Depreciation 7,038 6,033 7,038 6,033Total Computers & Communication 1,563 1,831 1,563 1,831Furniture & FittingsFurniture & Fittings 2,338 2,106 2,338 2,106Less Acc'd Depreciation 594 379 594 379Total Furniture & Fittings 1,744 1,727 1,744 1,727Non-Medical EquipmentNon-Medical Equipment 1,717 1,537 1,717 1,537Less Acc'd Depreciation 695 552 695 552Total Non Medical Equipment 1,022 985 1,022 985Motor VehiclesMotor Vehicles 1,276 1,295 1,276 1,295Less Acc'd Depreciation 1,208 1,134 1,208 1,134Total Motor Vehicles 68 161 68 161ArtworksArtworks at valuation 269 - 269 -Total Artworks 269 - 269 -Assets Under Construction / Work In Progress 7,599 5,631 7,599 5,631TOTAL 287,178 281,430 287,178 281,430Northern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 34 of 60

Note 11: Property, Plant & Equipment (continued)Notes To and Forming Part of the Financial StatementsNorthern Health Annual Report 2011/2012Reconciliations of the carrying amounts of each class of asset for the consolidated entity at the beginning and end of the previous and current financial year is set out belowLand Buildings Plant & Medical Assets Under Computers & Furniture & Non Medical Motor Artworks TotalEquipment Equipment Construction Communication Fittings Equipment Vehicles$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000Balance at 1 July 2010 33,449 240,746 1,184 10,419 1,661 2,125 1,735 1,054 292 - 292,665Additions - 2,388 493 1,935 4,915 683 193 64 67 - 10,738Disposals - - - - - (1) - - (21) - (22)Net Transfers between classes - 15 25 34 (945) 235 1 - - - (635)Depreciation (note 4) - (17,343) (198) (2,052) - (1,211) (202) (133) (177) - (21,316)Balance at 1 July 2011 33,449 225,806 1,504 10,336 5,631 1,831 1,727 985 161 - 281,430Additions - 8,831 232 6,166 6,063 736 228 148 - 269 22,673Disposals - - - (170) - (3) - - - - (173)Revaluation increments/(decrements) (i) 4,764 - - - - - - - - - 4,764Net Transfers between classes - 2,694 121 1,217 (4,095) 5 4 32 - - (22)Depreciation (note 4) - (17,488) (235) (2,314) - (1,006) (215) (143) (93) - (21,494)Balance at 30 June 2012 38,213 219,843 1,622 15,235 7,599 1,563 1,744 1,022 68 269 287,178Land and buildings carried at valuationAn independent valuation of Northern Health's property, was performed by the Valuer-General Victoria to determine the fair value of the land and buildings. The valuation, which conforms to Australian ValuationStandards, was determined by reference to the amounts for which assets could be exchanged between knowledgeable willing parties in an arm's length transaction. The valuation was based on independentassessments. The effective date of the independent valuation is 30 June 2009.(i) The compounded movement in the fair value of land since the most recent independent valuation as indicated by indices provided by the Valuer General Victoria was material (14%). Consequently effective 30June 2012 and in compliance with FRD103D, a managerial revaluation of land was performed based on those indices.Plant and all other equipmentPlant and all other equipment are reported at fair value as assessed by Northern Health Management in accordance with FRD 103D Non-current Physical Assets.Northern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 36 of 60

Note 12: Intangible AssetsNotes To and Forming Part of the Financial StatementsNorthern Health Annual Report 2011/2012Parent Entity Parent Entity Consol'd Consol'd2012 2011 2012 2011$'000 $'000 $'000 $'000Development Costs Capitalised 3,957 3,798 3,957 3,798Less Acc'd Amortisation 3,279 2,708 3,279 2,708Total Written Down Value 678 1,090 678 1,090Reconciliation of the carrying amount of intangible assets at the beginning and end of the previous and current financial year:Development TotalCosts$'000 $'000Balance at 1 July 2010 554 554Additions 388 388Net Transfers between classes 635 635Amortisation (note 4) (487) (487)Balance at 1 July 2011 1,090 1,090Additions 137 137Net Transfers between classes 22 22Amortisation (note 4) (571) (571)Balance at 30 June 2012 678 678Northern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 37 of 60

Note 13: PayablesNotes To and Forming Part of the Financial StatementsNorthern Health Annual Report 2011/2012Parent Entity Parent Entity Consol'd Consol'd2012 2011 2012 2011$'000 $'000 $'000 $'000CURRENTContractualTrade Creditors 9,890 1,384 9,890 1,384Accrued Expenses 7,489 8,300 7,498 8,300Salaries & Wages Related Creditors 2,327 1,668 2,327 1,668Inter Health Services 5,600 4,397 5,634 4,698Income In Advance 200 310 200 310Other 265 212 267 21325,771 16,271 25,816 16,573StatutoryDepartment of Health 1,337 3,522 1,337 3,5221,337 3,522 1,337 3,522TOTAL CURRENT 27,108 19,793 27,153 20,095NON CURRENTContractualIncome In Advance 2,669 - 2,669 -2,669 - 2,669 -StatutoryDepartment of Health - - - -- - - -TOTAL NON CURRENT 2,669 - 2,669 -TOTAL 29,777 19,793 29,822 20,095(a) Maturity analysis of PayablesPlease refer to Note 19c for the ageing analysis of payables.(b) Nature and extent of risk arising from PayablesPlease refer to note 19c for the nature and extent of risks arising from payables.Northern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 38 of 60

Note 14: BorrowingsNotes To and Forming Part of the Financial StatementsNorthern Health Annual Report 2011/2012Parent Entity Parent Entity Consol'd Consol'd2012 2011 2012 2011$'000 $'000 $'000 $'000CURRENTTreasury Corporation of Victoria 240 240 240 240Total Current 240 240 240 240NON CURRENTTreasury Corporation of Victoria 135 375 135 375Total Non-Current 135 375 135 375Total Interest Bearing liabilities 375 615 375 615(a) Maturity analysis of Interest Bearing LiabilitiesPlease refer to note 19(c) for the ageing analysis of interest bearing liabilities.(b) Nature and extent of risk arising from Interest Bearing LiabilitiesPlease refer to note 19(c) for the nature and extent of risks arising from interest bearing liabilities.(c) Defaults and breachesDuring the current and prior year, there were no defaults and breaches of any of the loans.Northern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 39 of 60

Note 15: ProvisionsNotes To and Forming Part of the Financial StatementsNorthern Health Annual Report 2011/2012Parent Entity Parent Entity Consol'd Consol'd2012 2011 2012 2011$'000 $'000 $'000 $'000Current ProvisionsEmployee Benefits- Unconditional and expected to be settled within 12 months 17,249 16,281 17,249 16,281- Unconditional and expected to be settled after 12 months 19,595 17,859 19,595 17,859Other 10,899 5,398 10,899 5,39847,743 39,538 47,743 39,538Provisions related to employee benefit on-costs- Unconditional and expected to be settled within 12 months (nominal value) 1,906 1,813 1,906 1,813- Unconditional and expected to be settled after 12 months (present value) 2,289 2,087 2,289 2,0874,195 3,900 4,195 3,900Total Current Provisions 51,938 43,438 51,938 43,438Non-Current ProvisionsEmployee Benefits 6,452 5,783 6,452 5,783Provisions related to employee benefit on-costs 742 665 742 665Total Non-Current Provisions 7,194 6,448 7,194 6,448(a) Employee Benefits & Related On-CostsCurrent Employee BenefitsUnconditional LSL entitlements 21,738 19,714 21,738 19,714Annual leave entitlements 18,982 17,942 18,982 17,942Accrued Wages and Salaries 10,899 5,398 10,899 5,398Accrued Days Off 319 383 319 383Non-Current Employee BenefitsConditional Long Service Leave entitlements (present value) 7,194 6,448 7,194 6,448Total Employee Benefits and Related On-Costs 59,132 49,885 59,132 49,885(b) Movements in provisionsMovement in Long Service Leave:Balance at start of year 26,163 23,832 26,163 23,832Provision made during the year- Revaluations 325 (221) 325 (221)- Expense recognising employee service 4,994 4,833 4,994 4,833Settlement made during the year (2,550) (2,281) (2,550) (2,281)Balance at end of year 28,932 26,163 28,932 26,163Northern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 40 of 60

Notes To and Forming Part of the Financial StatementsNorthern Health Annual Report 2011/2012Note 16: Other LiabilitiesParent Entity Parent Entity Consol'd Consol'd2012 2011 2012 2011$'000 $'000 $'000 $'000CURRENTMonies Held in Trust*- Patient Monies Held in Trust 6 3 6 3TOTAL 6 3 6 3* Total Monies Held in Trust Represented by the following assets:Cash Assets (refer to Note 6) 6 3 6 3TOTAL 6 3 6 3Northern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 41 of 60

Note 17: Reserves(a) ReservesProperty, Plant & Equipment Revaluation Surplus 1Notes To and Forming Part of the Financial StatementsNorthern Health Annual Report 2011/2012Parent Entity Parent Entity Consol'd Consol'd2012 2011 2012 2011$'000 $'000 $'000 $'000Balance at the beginning of the reporting period 104,432 104,432 104,432 104,432Revaluation Increment/(Decrements)- Land 4,764 - 4,764 -- Buildings - - - -Balance at the end of the reporting period* 109,196 104,432 109,196 104,432* Represented by:- Land 29,868 25,104 29,868 25,104- Buildings 79,328 79,328 79,328 79,328109,196 104,432 109,196 104,432Restricted Specific Purpose SurplusBalance at the beginning of the reporting period 379 370 1,458 646Transfer to and from Internal Entities - - - -Transfer to and from Restricted Specific Purpose Surplus (54) 9 49 812Balance at the end of the reporting period 325 379 1,507 1,458Total Reserves 109,521 104,811 110,703 105,890(b) Contributed CapitalBalance at the beginning of the reporting period 161,634 161,634 161,634 161,634Capital contribution received from Victorian Government - - - -Balance at the end of the reporting period 161,634 161,634 161,634 161,634(c) Accumulated DeficitsBalance at the beginning of the reporting period (39,570) (28,576) (39,719) (28,394)Net Result for the Year (11,603) (10,985) (11,500) (10,513)Transfer to and from Restricted Specific Purpose Surplus 54 (9) (49) (812)Balance at the end of the reporting period (51,119) (39,570) (51,268) (39,719)Total Equity at end of financial year 220,036 226,875 221,069 227,805(1) The Property, Plant & Equipment Asset Revaluation Surplus arises on the revaluation of property, plant & equipment.Northern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 42 of 60

Note 18: Reconciliation of Net Result for the Year to Net Cash Inflow/(Outflow) from Operating ActivitiesNotes To and Forming Part of the Financial StatementsNorthern Health Annual Report 2011/2012Parent Entity Parent Entity Consol'd Consol'd2012 2011 2012 2011$'000 $'000 $'000 $'000Net Result for the Year (11,603) (10,985) (11,500) (10,513)Depreciation & Amortisation 22,065 21,803 22,065 21,803Provision for Doubtful Debts 242 (110) 242 (110)Change in Inventories (403) (44) (403) (44)Resources/Assets (Provided)/Received Free of Charge (269) - (269) -Net (Gain)/Loss from Sale of Plant and Equipment 149 (298) 149 (298)Change in Operating Assets & Liabilities(Increase)/Decrease in Current Receivables (665) 295 (665) 294(Increase) in Non Current Receivables (601) (252) (601) (252)Decrease in Current Statutory Receivables 147 438 147 438(Increase)/Decrease in Prepayments (57) 22 (57) 22Increase/(Decrease) in Payables 6,731 (692) 6,474 (392)Increase in Employee Benefits 9,903 4,510 9,903 4,510Increase/(Decrease) in Other Liabilities 2,602 (288) 2,602 (289)NET CASH INFLOW FROM OPERATING ACTIVITIES 28,241 14,399 28,087 15,169Northern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 43 of 60

Note 19: Financial InstrumentsNotes To and Forming Part of the Financial StatementsNorthern Health Annual Report 2011/2012(a) Financial Risk Management Objectives and PoliciesNorthern Health's principal financial instruments comprise of:- Cash Assets- Receivables (excluding statutory receivables)- Payables (excluding statutory payables)- Interest bearing liabilitiesDetails of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, withrespect to each class of financial asset, financial liability and equity instrument are disclosed in note 1 to the financial statements.The main purpose in holding financial instruments is to prudentially manage Northern Health's financial risks within the government policy parameters.Categorisation of financial instrumentsNote Carrying Amount Carrying Amount2012 2011$'000 $'000Financial AssetsCash and cash equivalents 6 10,760 5,430Receivables 7 5,949 5,478Other financial assets 8 1,500 1,500Total Financial Assets (i) 18,209 12,408Financial LiabilitiesPayables 13 25,086 15,731Interest Bearing Liabilities 14 375 615Other Liabilities 16 6 3Total Financial Liabilities (ii) 25,467 16,349(i) The total amount of financial assets disclosed here excludes statutory receivables (i.e. GST input tax credit recoverable)(ii) The total amount of financial liabilities disclosed here excludes statutory payables (i.e. Taxes payables)Net holding gain/(loss) on financial instruments by categoryFinancial AssetsNet holding gain / (loss)Net holding gain /(loss)2012 2011$'000 $'000Cash and cash equivalents (i) 744 758Receivables (i) (249) 76Total Financial Assets 495 834Financial LiabilitiesInterest Bearing Liabilities (ii) 24 28Total Financial Liabilities 24 28(i) For cash and cash equivalents, loans or receivables and available-for-sale financial assets, the net gain or loss is calculated by taking the interest revenue, plus or minus foreign exchange gains orlosses arising from revaluation of the financial assets, and minus any impairment recognised in the net result;(ii) For interest bearing liabilities, the net gain or loss is calculated by taking the interest expense, plus or minus foreign exchange gains or losses arising from the revaluation of financial liabilitiesmeasured at amortised cost.Northern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 44 of 60

Note 19: Financial Instruments (continued)Notes To and Forming Part of the Financial StatementsNorthern Health Annual Report 2011/2012(b) Credit RiskCredit risk arises from the contractual financial assets of Northern Health, which comprise cash and deposits, non-statutory receivables and available for sale contractual financial assets. NorthernHealth's exposure to credit risk arises from the potential default of a counter party on their contractual obligations resulting in financial loss to Northern Health. Credit risk is measure at fair value andis monitored on a regular basis.Northern Health does not engage in hedging for its contractual financial assets and mainly obtains contractual financial assets that are on fixed interest, except for cash assets, which are mainly cashat bank. It is Northern Health's policy to only deal with banks with high credit ratings.Provision of impairment for contractual financial assets is recognised when there is objective evidence that the Health Service will not be able to collect a receivable. Objective evidence includesfinancial difficulties of the debtor, default payments, and debtor balances which are more than 60 days overdue.Except as otherwise detailed in the following table, the carrying amount of contractual financial assets recorded in the financial statements, net of any allowances for losses, represents NorthernHealth's maximum exposure to credit risk without taking account of the value of any collateral obtained.Credit quality of contractual financial assets that are neither past due nor impairedFinancialinstitutions(A1+ creditrating)Governmentagencies (AAAcredit rating)Governmentagencies (BBBcredit rating)Other Total2012 $'000 $'000 $'000 $'000 $'000Financial AssetsCash and Cash Equivalents 10,732 - - 28 10,760Receivables- Trade debtors - - - 1,439 1,439- Other receivables - - - 4,510 4,510Total Financial Assets 10,732 - - 5,977 16,7092011Financial AssetsCash and Cash Equivalents 5,401 - - 29 5,430Receivables- Trade debtors - - - 1,697 1,697- Other receivables - - - 3,781 3,781Total Financial Assets 5,401 - - 5,507 10,908The total amounts disclosed above excludes statutory amounts (e.g. amounts owing from Victorian Government and GST input tax credits recoverable).It is impractical for Northern Health to disclose credit ratings in respect of receivables. Consequently receivables are disclosed under "Other" category.Northern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 45 of 60

Note 19: Financial Instruments (continued)Notes To and Forming Part of the Financial StatementsNorthern Health Annual Report 2011/2012(b) Credit Risk (continued)Ageing analysis of financial asset as at 30 JuneConsol'dCarryingAmountNot Past Dueand NotImpairedLess than 1MonthPast Due But Not Impaired1-3 Months 3 months - 1Year1-5 YearsImpairedFinancial Assets2012 $'000 $'000 $'000 $'000 $'000 $'000 $'000Financial AssetsCash and Cash Equivalents 10,760 10,760 - - - - -Receivables- Trade debtors 1,439 760 118 201 352 - 8- Other receivables 4,510 2,820 432 334 479 57 388Other financial assets 1,500 - - - - - 1,500Total Financial Assets 18,209 14,340 550 535 831 57 1,8962011Financial AssetsCash and Cash Equivalents 5,430 5,430 - - - - -Receivables- Trade debtors 1,697 1,389 235 57 2 - 14- Other receivables 3,781 2,512 450 237 214 38 330Other financial assets 1,500 - - - - - 1,500Total Financial Assets 12,408 9,331 685 294 216 38 1,844Ageing analysis of financial assets excludes statutory financial assets (i.e. GST input tax credit)Northern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 46 of 60

Note 19: Financial Instruments (continued)Notes To and Forming Part of the Financial StatementsNorthern Health Annual Report 2011/2012(c) Liquidity RiskLiquidity risk is the risk that Northern Health would be unable to meet its financial obligations as and when they fall due.Northern Health's maximum exposure to liquidity risk is the carrying amounts of financial liabilities as disclosed in the face of the balance sheet.The following table discloses the contractual maturity analysis for Northern Health's financial liabilities. For interest rates applicable to each class of liability refer to individual notes to the financialstatements.Maturity analysis of financial liabilities as at 30 JuneCarryingAmountContractualCash FlowsLess than 1MonthMaturity Dates1-3 Months 3 months - 1Year2012 $'000 $'000 $'000 $'000 $'000 $'0001-5 YearsFinancial LiabilitiesPayables 25,086 25,086 7,115 17,047 906 18Interest Bearing Liabilities 375 375 - 60 180 135Other Financial Liabilities 6 6 - 6 - -Total Financial Liabilities 25,467 25,467 7,115 17,113 1,086 1532011Financial LiabilitiesPayables 15,731 15,731 5,423 10,002 306 -Interest Bearing Liabilities 615 615 - 60 180 375Other Financial Liabilities 3 3 - 3 - -Total Financial Liabilities 16,349 16,349 5,423 10,065 486 375Ageing analysis of financial liabilities excludes statutory financial liabilities (i.e. GST payable)(d) Fair ValueNorthern Health considers that the carrying amount of financial instrument assets and liabilities recorded in the financial statements to be a fair approximation of their fair values, because of theshort-term nature of the financial instruments and the expectation that they will be paid in full.The aggregate net fair value of financial assets and liabilities, both recognised and unrecognised, at the balance date are equal to their carrying amount as per the balance sheet.Northern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 47 of 60

Note 19: Financial Instruments (continued)Notes To and Forming Part of the Financial StatementsNorthern Health Annual Report 2011/2012(e) Market RiskNorthern Health's exposures to market risk are primarily through interest rate risk with only insignificant exposure to foreign currency and other price risks. Objectives, policies and processes used tomanage each of these risks are disclosed in the paragraph below.Currency RiskNorthern Health is exposed to insignificant foreign currency risk through its payables relating to purchases of supplies and consumables from overseas. This is because of a limited amount ofpurchases denominated in foreign currencies and a short timeframe between commitment and settlement.Interest Rate RiskExposure to interest rate risk might arise primarily through Northern Health's interest bearing liabilities. Minimisation of risk is achieved by mainly undertaking fixed rate or non-interest bearingfinancial instruments. For financial liabilities, Northern Health mainly undertake financial liabilities with relatively even maturity profiles.Other Price RiskNorthern Health's exposure to 'Other Price Risk' arises from its current investment portfolio. The investment portfolio has experienced a reduction in value due to the volatility of the global financialmarkets and there is an increasing expectation that due to the nature of these investments that the original face value may not be realised on maturity.As a consequence of these events, Northern Health has taken all possible steps to strengthen its financial policies and internal controls relating to the investment of surplus funds.Interest Rate Exposure of Financial Assets and Liabilities as at 30 JuneWeighted CarryingAverage Amount Fixed Variable Non-Effective Interest Interest InterestInterest Rate Rate Bearing2012 Rate (%) $'000 $'000 $'000Financial AssetsCash and Cash Equivalents 4.52 10,760 - 10,732 28Receivables (i)- Trade debtors 0.00 1,439 - - 1,439- Other receivables 0.00 4,510 - - 4,510Other financial assets 0.00 1,500 - - 1,50018,209 - 10,732 7,477Financial LiabilitiesPayables (i) 0.00 25,086 - - 25,086Interest Bearing Liabilities 4.52 375 - 375 -Other financial liabilities 0.00 6 - - 625,467 - 375 25,0922011Financial AssetsCash and Cash Equivalents 4.31 5,430 - 5,401 29Receivables (i)- Trade debtors 0.00 1,697 - - 1,683- Other receivables 0.00 3,781 - - 3,451Other financial assets 0.00 1,500 - - 1,50012,408 - 5,401 6,663Financial LiabilitiesPayables (i) 0.00 15,731 - - 16,573Interest Bearing Liabilities 4.83 615 - 615 -Other financial liabilities 0.00 3 - - 316,349 - 615 16,576(i) The carrying amount excludes statutory financial assets and liabilities (i.e. GST input tax credit and GST payable)Interest Rate ExposureNorthern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 48 of 60

Note 19: Financial Instruments (continued)Notes To and Forming Part of the Financial StatementsNorthern Health Annual Report 2011/2012(e) Market Risk (cont)Sensitivity Disclosure AnalysisTaking into account past performance, future expectations, economic forecasts, and management's knowledge and experience of the financial markets, Northern Health believes the followingmovements are 'reasonably possible' over the next 12 months (Base rates are sourced from the Reserve Bank of Australia)- A shift of +1% and -1% in market interest rates (AUD) from year-end rates of 3.50%;- A parallel shift of +1% and 1% in inflation rate from year-end rates of 1.60%The following table discloses the impact on net operating result and equity for each category of financial instrument held by Northern Health at year end as presented to key management personnel, ifchanges in the relevant risk occur.CarryingAmountInterest Rate Risk Other Price Risk-1% +1%-5% +10%Profit Equity Profit Equity Profit Equity Profit Equity2012 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000Financial AssetsCash and Cash Equivalents (i) 10,760 (107) (107) 107 107 - - - -Receivables- Trade debtors 1,439 - - - - - - - -- Other receivables 4,510 - - - - - - - -Other financial assets 1,500 - - - - - - - -Financial LiabilitiesPayables 25,086 - - - - - - - -Interest Bearing Liabilities 375 4 4 (4) (4) - - - -Other Financial Liabilities 6 - - - - - - - -(103) (103) 103 103 - - - -2011Financial AssetsCash and Cash Equivalents (i) 5,430 (54) (54) 54 54 - - - -Receivables- Trade debtors 1,697 - - - - - - - -- Other receivables 3,781 - - - - - - - -Other financial assets 1,500 - - - - - - - -Financial LiabilitiesPayables 15,731 - - - - - - - -Interest Bearing Liabilities 615 6 6 (6) (6) - - - -Other Financial Liabilities 3 - - - - - - - -(48) (48) 48 48 - - - -(i) eg. Sensitivity of cash and cash equivalents to +1% movement in interest rates: [$10,733k*0.045]-[$10,733k*0.035] = $107k. Similarly -1% movement in interest rate impact = $(107k)The carrying amount excludes statutory financial assets and liabilities (i.e. GST input tax credit and GST payable)Northern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 49 of 60

Note 20: Commitments for ExpenditureNotes To and Forming Part of the Financial StatementsNorthern Health Annual Report 2011/2012Parent Entity Parent Entity Consol'd Consol'd2012 2011 2012 2011$'000 $'000 $'000 $'000Capital Expenditure CommitmentsPayable:Land and Buildings 56,800 49,390 56,800 49,390Plant and Equipment 9,233 8,377 9,233 8,377Total Capital Commitments 66,033 57,767 66,033 57,767Land and BuildingsNot later than one year 21,201 19,206 21,201 19,206Later than 1 year and not later than 5 years 35,599 30,184 35,599 30,184Total 56,800 49,390 56,800 49,390Plant & EquipmentNot later than one year 7,995 8,377 7,995 8,377Later than 1 year and not later than 5 years 1,238 - 1,238 -Total 9,233 8,377 9,233 8,377Other Expenditure CommitmentsPayable:Pathology Services * - 6,764 - 6,764Radiology Services 20,638 21,580 20,638 21,580Food Services 8,045 7,572 8,045 7,572Laundry Services 1,823 3,779 1,823 3,779Cleaning Services 4,503 4,441 4,503 4,441Patient Transport 2,640 3,811 2,640 3,811Waste Services 1,133 669 1,133 669Maintenance Services 1,617 2,892 1,617 2,892Security Services 471 1,125 471 1,125Internal Audit Services 600 676 600 676Total Other Commitments 41,470 53,309 41,470 53,309Not later than one year 24,993 31,749 24,993 31,749Later than 1 year and not later than 5 years 16,477 21,560 16,477 21,560TOTAL 41,470 53,309 41,470 53,309* The contract for pathology services existing at 30 June 2012 expired on 7 July 2012. A new contractproviding for the provision of pathology services became effective 8 July 2012. Consequently as at 30 June2012 no material commitment existed with the new provider of pathology services at that time.Northern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 50 of 60

Notes To and Forming Part of the Financial StatementsNorthern Health Annual Report 2011/2012Note 20: Commitments for Expenditure (continued)Parent Entity Parent Entity Consol'd Consol'd2012 2011 2012 2011$'000 $'000 $'000 $'000Lease CommitmentsCommitments in relation to leases contracted for at the reporting date:Operating Leases 794 1,120 794 1,120Total Lease Commitments 794 1,120 794 1,120Operating LeasesNon-cancellableNot later than one year 572 610 572 610Later than 1 year and not later than 5 years 222 510 222 510Sub Total 794 1,120 794 1,120TOTAL 794 1,120 794 1,120Total Commitments for expenditure (inclusive of GST) 108,297 112,196 108,297 112,196less GST recoverable from the Australian Tax Office (9,845) (10,200) (9,845) (10,200)Total commitments for expenditure (exclusive of GST) 98,452 101,996 98,452 101,996Note 21: Contingent Assets and Contingent LiabilitiesConsol'd Consol'd2012 2011Northern Health is not aware of any contingent assets. $'000 $'000Northern Health notes the following recallable Department of Health capital grants as contingent liabilities.* Facilitate Provision Of Pathology Service (Initially Catheterisation Laboratory Equipment) - 600* Client Patient Folder - Electronic Medical Record - 735Decisions about whether recallable grants are to be repaid are solely at the discretion of the Department of Health in consideration of the outcomes arising from the expenditure of the grant fundsand other policy considerations. As such, Northern Health has no obligation to repay the recallable grants until such time as the Department determines that a cash flow adjustment in respect of therecallable grant is warranted.Northern Health is not aware of any other contingent liabilities.Northern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 51 of 60

Notes To and Forming Part of the Financial StatementsNorthern Health Annual Report 2011/2012Note 22: Operating segmentsRAC Other2012 2011 2012 2011 2012 2011$'000 $'000 $'000 $'000 $'000 $'000REVENUEExternal Segment Revenue 3,016 2,698 335,595 313,304 338,611 316,002Total Revenue 3,016 2,698 335,595 313,304 338,611 316,002EXPENSESExternal Segment Expenses (3,155) (3,033) (347,676) (324,212) (350,831) (327,245)Intersegment Expenses - - - - - -Total Expenses (3,155) (3,033) (347,676) (324,212) (350,831) (327,245)Net Result from Ordinary Activities (139) (335) (12,081) (10,908) (12,220) (11,243)Consol'dInterest Expense - - (24) (28) (24) (28)Interest Income - - 744 758 744 758Net Result for Year (139) (335) (11,361) (10,178) (11,500) (10,513)OTHER INFORMATIONSegment Assets 408 52 286,770 281,378 287,178 281,430Unallocated Assets - - 23,226 16,974 23,226 16,974Total Assets 408 52 309,996 298,352 310,404 298,404Segment Liabilities - - - - - -Unallocated Liabilities - - 89,335 70,599 89,335 70,599Total Liabilities - - 89,335 70,599 89,335 70,599Acquisition of Property, Plant and Equipment and Intangible Assets 238 1 22,572 11,125 22,810 11,126Depreciation & Amortisation expense 23 18 22,042 21,785 22,065 21,803The major products/services from which the above segments derive revenue are:Business Segments ServicesResidential Aged Care Services (RACS) Provider of residential aged care bedsNorthern Health Provider of acute and sub acute patient careAll inter-segment transactions are carried at cost.Geographical SegmentNorthern Health operates in the northern suburbs of Melbourne (Broadmeadows, Bundoora, Craigieburn, Epping and Preston) Victoria. All revenue, expenses and segment assets relate to operationsin Melbourne, Victoria.Northern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 52 of 60

Note 23a: Responsible Persons DisclosuresNotes To and Forming Part of the Financial StatementsNorthern Health Annual Report 2011/2012In accordance with the Ministerial Directions issued by the Minister for Finance under the Financial Management Act 1994, the following disclosures are made regarding responsible persons for thereporting period.PeriodResponsible MinistersThe Honourable David Davies, MLC, Minister for Health and Ageing1/07/2011 - 30/06/2012The Honourable Mary Wooldridge, MLA, Minister for Mental Health 1/07/2011 - 30/06/2012Governing BoardProf. Glenn Bowes (Chair effective 1 July 2011)Ms Sabine PhillipsMr Brian JoyceProf. Vin MassaroMs Sue RenkinMs Marilyn BeaumontMr Ian DunnMr Leigh HockingProf. Gab Kovacs1/07/2011 - 30/06/20121/07/2011 - 30/06/20121/07/2011 - 30/06/20121/07/2011 - 30/06/20121/07/2011 - 30/06/20121/07/2011 - 30/06/20121/07/2011 - 30/06/20121/07/2011 - 30/06/20121/07/2011 - 30/06/2012Accountable Officers:Mr Greg PullenRemuneration of Responsible PersonsThe number of Responsible Persons are shown in their relevant income bands;Parent Consol'd2012 2011 2012 2011Income Band No. No. No. No.$10,000 - $19,999 0 5 0 5$20,000 - $29,999 8 3 8 3$40,000 - $49,999 1 0 1 0$50,000 - $59,999 0 1 0 1$340,000 - $349,999 0 1 0 1$370,000 - $379,999 1 0 1 0Total Numbers 10 10 10 10Total remuneration received or due and receivable by Responsible Persons from the reporting entityamounted to:$609,867 $579,404 $609,867 $579,404Amounts relating to Responsible Ministers are reported in the financial statements of the Department of Premier and Cabinet.Other Transactions of Responsible Persons and their Related Parties.There were no other transactions of Responsible Persons and their Related Parties to report.Northern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 53 of 60

Note 23b: Executive Officer DisclosuresNotes To and Forming Part of the Financial StatementsNorthern Health Annual Report 2011/2012Executive Officers' RemunerationThe numbers of executive officers, other than Ministers and Accountable Officers, and their total remuneration during the reporting period are shown in the first two columns in the table below in theirrelevant income bands.The base remuneration of executive officers is shown in the third and fourth columns. Base remuneration is exclusive of bonus payments, long-service leave payments, redundancy payments andretirement benefits. Executive Officers with remuneration packages in excess of $100,000 who have commenced or ceased employment with Northern Health during the year are included in thefollowing details.Parent2012 2011 2012 2011 2012 2011 2012 2011No. No. No. No.$120,000 – $120,999 0 0 1 0 0 0 1 0$140,000 – $149,999 0 0 1 0 0 0 1 0$160,000 – $169,999 1 0 0 3 1 0 0 3$170,000 – $179,999 0 1 0 1 0 1 0 1$180,000 – $189,999 1 2 2 1 1 2 2 1$190,000 – $199,999 1 1 0 0 1 1 0 0$200,000 – $209,999 1 1 0 1 1 1 0 1$210,000 – $219,999 1 1 2 0 1 1 2 0$220,000 – $229,999 1 0 0 0 1 0 0 0$240,000 – $249,999 0 0 1 0 0 0 1 0$250,000 – $259,999 1 0 0 0 1 0 0 0$320,000 – $329,999 0 0 0 1 0 0 0 1$340,000 – $349,999 0 1 0 1 0 1 0 1$350,000 – $359,999 1 0 1 0 1 0 1 0Consol'dTotal Remuneration Base Remuneration Total RemunerationBase RemunerationTotal Number of Executives 8 7 8 8 8 7 8 8Total annualised employee equivalent(AEE) 7.6 7.0 7.6 8.0 7.6 7.0 7.6 8.0Total Remuneration $1,801,141 $1,516,459 $ 1,659,512 $ 1,407,308 $ 1,801,141 $ 1,516,459 $ 1,659,512 $ 1,407,308(a) Annualised employee equivalent is based on working 38 ordinary hours per week over the reporting period.Northern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 54 of 60

Note 24: Events Occurring after the Balance Sheet DateNotes To and Forming Part of the Financial StatementsNorthern Health Annual Report 2011/2012Northern Health is not aware of any events occurring after reporting date that would have a material impact on the financial statements.Note 25: Controlled EntitiesName of entityCountry ofincorporationEquity HoldingNorthern Health Research, Training and Equipment Foundation Ltd Australia Limited by GuaranteeNote 26: Economic DependencyThe financial statements have been prepared on a going concern basis as at 30 June 2012. Northern Health has:- A consolidated deficit from ordinary activities of $11.50 million for the year ended 30 June 2012 (deficit of $10.51 million for the year ended 30 June 2011).- A consolidated working capital deficiency of $61.26 million as at 30 June 2012 ($50.72 million as at 30 June 2011).Northern Health Management are committed to the continued review of its financial and operating performance with a view to identifying further cost saving initiatives and revenue generatingopportunities and providing the most effective and efficient service delivery model without compromising patient care and quality of service delivery.An on-going budget strategy has been initiated by the Management of Northern Health which has identified a number of business initiatives to better manage the available financial resources. Inaddition, the strategy adopted by Northern Health also includes assurances by the Department of Health to support the on-going operations and financial requirements of Northern Health and to provideto Northern Health adequate cash flow support to enable Northern Health to meet its current and future obligations as and when they fall due for a period up to September 2013 should this be required.Northern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 55 of 60

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Broadmeadows Health Service35 Johnstone Street Broadmeadows Vic 3074T. (03) 8345 5000 F. (03) 8345 5655Bundoora Extended Care Centre1231 Plenty Road Bundoora Vic 3083T. (03) 9495 3100 F. (03) 9467 4365Craigieburn Health ServiceCraigieburn Road West Craigieburn Vic 3064T. (03) 8338 3000 F. (03) 8338 3110Panch Health Service300 Bell Street Preston Vic 3072T. (03) 9485 9000 F. (03) 9485 9010The Northern Hospital185 Cooper Street Epping Vic 3076T. (03) 8405 8000 F. (03) 8405 8524www.nh.org.auscan here todownload