GMHBA AnnuAL RepoRt 2010 - GMHBA Health Insurance

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GMHBA Limited ABN 98 004 417 092 GMHBA Limited ABN 98 004 417 092 Notes to the Financial Statements for the year ended 30 June 2010 (continued) 17. Market Risk (continued) Fair Value hierarchy The table below separates the total investments balance based on a hierarchy that reflects the significance of the inputs used in the determination of fair value. The fair value hierarchy has the following levels: I. Level 1 quoted prices Quoted prices (unadjusted) in active markets for identical assets and liabilities are used. II. Level 2 other observable inputs Inputs that are observable (other than Level 1 quoted prices) for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices) are used. III. Level 3 unobservable inputs Inputs for the asset or liability that are not based on observable market data (unobservable inputs) are used. Where the determination of fair value for an instrument involves inputs from more than one category, the level within which the instrument is categorised in its entirety is determined on the basis of the lowest level input that is significant to the fair value measurement in its entirety. 2010 Financial assets designated at fair value through profit or loss Level 1 Level 2 Level 3 Total $000 $000 $000 $000 141,933 - - 141,933 At 30 June 2010 the company investments are term deposits. Quoted market rates at balance date are used to determine the market value of these investments. 48 48
GMHBA Limited ABN 98 004 417 092 GMHBA Limited ABN 98 004 417 092 Notes to the Financial Statements for the year ended 30 June 2010 (continued) 17. Market Risk (continued) Price risk Price risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices, whether those changes are caused by factors specific to the individual financial instrument or its issuer, or factors affecting all similar financial instruments traded on the market. The company is not materially exposed to price risk. At 30 June 2010 the company investments are composed of term deposits. The company holds its investments to maturity and do not trade these investments. Credit risk Credit risk is the risk that one party to a financial instrument will cause financial loss to the other party by failing to discharge an obligation. Credit risk in relation to trade receivables is considered low as the balance is largely unearned. Measurement is based on unbiased support and taking into account past experience. The Company minimises concentrations of credit risk by undertaking transactions with a large number of customers/contributors. The Company is not materially exposed to any individual customer, however is exposed to credit risk through insurance, reinsurance and investments. Credit risk in respect of insurance and reinsurance receivables is actively monitored through the risk management plan which includes analysis of claiming patterns. The Company developed and adopted an investment plan to maximise return of the investment portfolio within defined risk categories. The Company minimises concentrations of investment risk by undertaking direct investment transactions with a wide variety of suitably rated financial institutions. The Standard & Poor’s Credit rating as at 30 June 2010 for each class of instrument held are: Term Deposits - A-1+ 18. Capital Management The capital structure of the company consists of cash reserves and investments representing member funds. Operating cash flows are used to maintain and increase the company’s investments. The company’s investments at reporting date are composed of term deposits and the company does not hold investment in the equity market. The investment and audit committee along with the Board continue to monitor the market conditions. The company does not have any external borrowings. 49 49
Page 1 and 2: 1 GMHBA AnnuAL RepoRt 2010
Page 3 and 4: Contents GMHBA Performance Snapshot
Page 5 and 6: Source: GMHBA/PHIAC data as at 30 J
Page 7 and 8: I am pleased to report that in a ch
Page 9 and 10: professor John C. Catford James e.
Page 11 and 12: MARK VALenA - CHieF eXeCutiVe Mark
Page 13 and 14: CoMMunity ConneCteD to Develop mutu
Page 15 and 16: suCCess tHRouGH innoVAtion to innov
Page 17 and 18: GMHBA Limited ABN 98 004 417 092 Fi
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GMHBA AnnuAL RepoRt 2010 - GMHBA Health Insurance

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