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| Directors’ Report |
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The Board of Directors of The Hospitals Contribution Fund of
Australia Limited has pleasure in submitting its report for the
year ended
30 June 2009.
Principal Activities
The principal activities of entities within the consolidated
entity during the financial year were:
- The provision of private health insurance within
Australia.
- The provision of term life and disability insurance and
investment policies in Australia.
- The operation of Dental Centres for contributors and
their dependants.
- The management of friendly society benefit funds
providing benefits for funeral, income protection and
life insurance and investment products.
- The operation of retirement and aged care
accommodation.
Operating Results
The operating surplus of the consolidated entity after income
tax was $21.5 million [2008: Surplus $37.3 million]. This result
included a
$1 million (2008: $5 million) donation to The HCF
Health and Medical Research Foundation.
HCF acquired Manchester Unity Australia Ltd as a wholly
owned subsidiary on 24 December 2008. The consolidated
result includes the results of Manchester Unity for the period
24 December 2008 to 30 June 2009.
Dividend
The Hospitals Contribution Fund of Australia Limited is a
company limited by guarantee and in accordance with the
Company’s Constitution does not declare a dividend.
Review of Operations, Likely Developments
A review of operations of the consolidated entity during the
financial year and the likely developments in the consolidated
entity’s operations known at the date of this Report have been
included in the Chairman’s and Chief Executive Officer’s
Report, and the Review of Operations.
Significant Changes in State of Affairs
Guarantors’ Equity for the group increased from $562.6 million
to $579.8 million, an increase of $17.2 million. This included
a loss on revaluation of land and buildings of $6.9 million.
Significant Events after the Balance Date
No matters or circumstances have arisen since the end of the
financial year which significantly affected or may significantly
affect the operations of the consolidated entity, the results of
those operations, or the state of affairs of the consolidated
entity in financial years subsequent to the financial year ended
30 June 2009.
Environment
HCF has observed all environmental regulations governing its
presence in the local government areas where its branches and
worksites are situated. This includes all HCF’s Dental Centres
meeting their obligations under environmental protection and
radiation control legislation covering disposal of clinical waste
and x-ray radiation standards. The entity was active in energy
conservation, materials recycling and waste reduction practices
throughout the year.
HCF’s activities do not impact adversely on biodiversity of
flora and wildlife habitats.
Indemnification of Directors
During or since the financial year, the Company has paid
premiums in respect of contracts insuring any past, present
or future Directors, secretaries and other officers of the
Company against certain liabilities. In accordance with
common commercial practice, the insurance policies prohibit
disclosure of the nature of the liabilities insured against and
the amount of the premiums.
Meetings of Directors
The number of parent and subsidiary Directors’ meetings (including meetings of committees of Directors) and the number of
meetings attended by each Director during their terms of office in the financial year are:
|
| |
Directors'
Meetings |
Audit
Committee
Meetings |
Renumeration
Committee
Meetings |
Nominations
Committee
Meetings |
Compliance
Committee
Meetings |
|
| |
Attended |
Held |
Attended |
Held |
Attended |
Held |
Attended |
Held |
Attended Held |
|
| Parent Company |
| C.L Clifton |
13 |
13 |
4 |
4 |
|
|
4 |
4 |
(Parent Company
Risk and Compliance
matters are addressed
at the Audit
Committee Meetings) |
| S P Coppock |
13 |
13 |
4 |
4 |
|
|
4 |
4 |
| J. A. B. Dunlop |
13* |
13 |
4 |
4 |
2* |
2 |
3*# |
4 |
| G.J. Gardiner |
7 |
11 |
2 |
3 |
1 |
1 |
2 |
3 |
| R. J. Goaley |
6 |
6 |
2 |
2 |
|
|
2 |
2 |
| J. R. O'Dea |
11 |
13 |
4 |
4 |
2 |
2 |
4 |
4 |
| M. E. Rummery |
12 |
13 |
4 |
4 |
|
|
4 |
4 |
| R. J. Schneider |
13 |
13 |
4 |
4 |
|
|
3# |
4 |
| T. J. Smith |
13 |
13 |
|
|
|
|
|
|
| L. J. Stone |
13 |
13 |
4 |
4 |
|
|
4 |
4 |
| G. W. Wright |
12 |
13 |
4* |
4 |
|
|
3# |
4 |
|
| Manchester Unity (since aquisition) |
| C.L Clifton |
4 |
5 |
1 |
1 |
|
|
|
|
(Manchester Unity
Risk and Compliance
matters are addressed
at the Audit
Committee Meetings) |
| S P Coppock |
5 |
5 |
1 |
1 |
|
|
|
|
| J. A. B. Dunlop |
5 |
5 |
1* |
1* |
|
|
|
|
| G.J. Gardiner |
0 |
5 |
0 |
1 |
|
|
|
|
| J. R. O'Dea |
5 |
5 |
1 |
1 |
|
|
|
|
| M. E. Rummery |
5 |
5 |
1 |
1 |
|
|
|
|
| R. J. Schneider |
5 |
5 |
1 |
1 |
|
|
|
|
| T. J. Smith |
5 |
5 |
1 |
1 |
|
|
|
|
| L. J. Stone |
5 |
5 |
1 |
1 |
|
|
|
|
| G. W. Wright |
5 |
5 |
1 |
1 |
|
|
|
|
|
| HCF Life |
| D. A. Dixon |
10 |
11 |
4 |
4 |
|
|
|
|
4* |
4 |
| M J Gallagher |
11 |
11 |
4 |
4 |
|
|
|
|
4 |
4 |
| G. J. Gardiner |
5 |
11 |
2 |
4 |
|
|
|
|
2 |
4 |
| J. B. Gibson |
11* |
11 |
4 |
4 |
|
|
|
|
4 |
4 |
| A. J. Hutchinson |
9 |
11 |
3 |
4 |
|
|
|
|
3 |
4 |
| T. J. Smith |
11 |
11 |
4 |
4 |
|
|
|
|
4 |
4 |
| R. G. Utz |
9 |
11 |
4* |
4 |
|
|
|
|
4 |
4 |
|
|
* Denotes Chairman
Mr G J Gardiner was Chairman of HCF and Manchester Unity Boards, Remuneration Committee and Nominations Committee until his death on 14 May 2009 after a short illness. Mr J A B Dunlop was appointed Acting Chairman during Mr Gardiner's absence due to illness and was appointed Chairman of the HCF and Manchester Unity Boards and their Committees on 25 June 2009.
Mr Dunlop was Chairman of the Audit, Risk and Compliance Committee of HCF and Manchester Unity until his appointment as Chairman of the Boards on 25 June 2009. Mr G W Wright was appointed Chairman of the HCF and Manchester Unity Audit, Risk and Compliance Committees on 25 June 2009
# Ineligible to attend |
| |
HCF Board of Directors
Board of Directors – HCF Life Insurance Company Pty Ltd
Board of Directors –
Manchester Unity Australia Ltd
Company Secretary
|
|
J. A. B. Dunlop AM, 72
Chairman
Mr Dunlop was originally appointed to HCF’s Board in October 1997 by the Health Services Association of New South Wales. He is a Director of The Children’s Medical Research Institute. He was Chairman of the Children’s Hospital at Westmead from 1983 until July 2004, when the New South Wales Government dissolved all Area Health Boards.Mr Dunlop has extensive commercial experience as the Managing Director of Edwards Dunlop and Company Limited between 1978 and 1987, and as a Director of Health Super Pty Ltd between 2000 and 2008. He served as Chairman of the HCF Audit Committee from 2004 until 2009 and was elected Chairman of the Board of HCF on 25 June 2009. Mr Dunlop was appointed a Member of the Order of Australia in 1987 for service to the welfare of children.
C. L. Clifton, 54
MB BS (Hons), BHA
Independent Director – Elected
Dr Christine (Tina) Clifton has served on HCF’s Board since February 1994, initially as the appointee of the University Teaching Hospitals Association (Industrial) in New South Wales and subsequently elected by eligible contributor voters, the latest being in November 2007 for a three year term. She is currently a registered medical practitioner and a company director for various publicly listed and private companies. Her other current directorships include InvoCare Ltd and Health Care Australia Ltd and she is also a Councillor for the University of New South Wales. Prior to 2001, she held various positions in the public and private healthcare sectors including Chief Executive Officer of the Sisters of Charity Health Service in New South Wales and Deputy Chief Executive Officer of the Northern Sydney Area Health Service. She holds degrees in medicine and health administration and also has a specialist qualification in medical administration.
S. P. Coppock, 54
BA, LLB, MBA, LLM, MTax
Independent Director – Elected
Mr Coppock was elected to
the Board in November 2007
for a three year term. He
is a lawyer specialising in
taxation who has worked
in private, corporate and
government practice. His
work in private practice
took him to regional NSW,
Parramatta and Sydney.
He has a strong background
in community involvement
and has been a member of
the South Eastern Sydney
Illawarra Area Health
Medical Research Ethics
Committee and is a Local
Government Councillor on
Willoughby City Council.
He has been and is a director
on not-for profit bodies and
has been a part time lecturer
for over a decade in subjects
ranging from occupational
health and safety, business
law, legal ethics and taxation.
He is the principal of a policy
consultancy that specialises in
the preparation of submissions
and strategic advice on legal
issues in government policy
for private sector.
R. J. Goaley, 64
PNIA, FAICD
Independent Director
Mr Goaley was appointed
by the Board in January
2009. Mr Goaley had been
appointed the Chairman of
Manchester Unity Australia
Limited in 2007, having been
a Director since 2001, Chief
Executive Officer since 1987
and General Manager since
1980. He has also served as
a Director of the Australian
Health Insurance Association,
Australian Friendly Societies
Association and the
Australian Health Services
Alliance. He has extensive
experience at executive and
Board level in the provision
of private health insurance,
friendly society benefit and
investment products and the
provision of aged care and
retirement services.
J. R. O’Dea, 43
BA, LLM, MBA, FAICD
Independent Director – Elected
Mr O’Dea joined the
Board on 30 November
1995, having been elected
by HCF contributors. He
was re-elected in October
2006 to serve a further
three-year term.
Mr O’Dea has a background
in law, having previously
worked as a solicitor in private
and corporate practice. He
also has past experience as a
local government councillor,
as a director on various
statutory and charity boards
as well as a general manager
in the financial services
industry. Mr O’Dea is
currently a Member of the
NSW Parliament and is
married with four children.
M. E. Rummery AM, 62
B.Univ (Hons) SCU
Independent Director
Ms Rummery was originally
appointed to the Board in
December in 1995 by the
Health Services Association
of NSW. She is a retired
lawyer, a former Director of
Catholic Healthcare Ltd and
former Deputy Chancellor of
Southern Cross University.
Ms Rummery holds the
following Ministerial
appointments – Co-Chair of
the Rural Health Taskforce,
Member of the NSW Health
Care Advisory Council
and Member of the NSW
Community and Clinicians
Expert Advisory Council.
She is a former Member
of the NSW Clinical
Excellence Commission and
for many years was Chair of
the Northern Rivers Area
Health Service Board.
Mrs Rummery was made
a Member of the Order of
Australia in 2001 for services
to health and education
and was also awarded an
Honorary Doctorate in 2007
by Southern Cross University.
R. J. Schneider AM, 63
Independent Director
Mr Schneider was appointed
by the Board in January 2006.
He was formerly the Chief
Executive Officer of the
Australian Health Insurance
Association, a post he held
for 22 years concentrating
on policy issues relating
to health financing and
delivery. Prior to joining
AHIA he was a journalist
and media administrator.
He has published extensively
including “Making Medicare
Better” and two books
on politics.
Mr Schneider was made a
Member of the Order
of Australia in 2008 for his
contribution to the private
health insurance industry
and national health policy
development and was made
a Life Member of the
International Federation
of Health Plans in 2006 for
services to the private health
sector. For several years he
was an industry representative
on the Private Health
Insurance Administration
Council and the Health
Insurance Advisory Council.
T. J. Smith, 67
MBE, RFD, ED
Executive Director
Mr Smith is HCF’s Chief
Executive Officer and was
appointed to the Board in
December 1994. He has held
the position of CEO since
February 1990. He has
extensive management
experience in marketing,
distribution and operations
management in the retail
financial services and
insurance industries.
Mr Smith is a Vice
President of the International
Federation of Health Plans.
He is also a Director of
Australian Health Insurance
Association Limited and
until November 2008 was
President. Mr Smith was
appointed a director of
Primary Health Care
Limited in May 2008.
L. J. Stone, 71
ATCL
Independent Director – Elected
Mrs Stone was elected to the
Board in October 1997 and
re-elected for further terms
in 2000, 2003 and November
2006. She is a company
director with a strong
community involvement.
Mrs Stone has long and
sustained experience with
the health industry having
been Chairman of an Area
Health Service Board and
State President of the Health
Services Association of
NSW. Currently, Mrs Stone
is Chairman of Sylvanvale
Foundation (formerly,
Handicapped Children’s
Centre NSW) and is
President of Sutherland
Foods Services Inc [Meals
on Wheels].
Mrs Stone continues as a
Company Director of family
companies involved with
property investments. She
has also served previously, as
a Member of the New South
Wales Legislative Assembly,
as a member of the NSW
Community Welfare Appeals
Tribunal and as a Local
Government Councillor.
G. W. Wright, 64
B Com, BCA (Hons) MBA, BHA, FCIS, AFCHSE, CHE, FCPA
Independent Director
Mr Wright was appointed
to the Board by the Private
Hospitals and Nursing Homes
Association of Australia in
November 1982 and has been
reappointed by its successor,
the Private Hospitals
Association of NSW Inc.
Since 1985 he has been
a management consultant
specialising in health care
management and financing
issues in Australia and
overseas. He is also Chairman
/Director/Continuing Advisor
to several groups operating
not-for-profit hospitals and
residential aged care services
in NSW.
|
|
|
J. B. Gibson, (Chairman), 68
FCA, ACIS, ACIM,
Non-executive Chairman
Mr Gibson has been HCF
Life Chairman since 1980.
He is a chartered accountant
and former principal in a firm
of chartered accountants. He
is a former Chairman of The
Hospitals Contribution Fund
of Australia Limited, and
former general manager of
a Sydney-based firm of stock
brokers. He has 46 years
commercial experience
including 12 years auditing
listed companies.
M. J. Gallagher, 59
BA (Macq)
Non-executive Director
Mr Gallagher is an actuary
who worked in reinsurance
for 35 years, specialising in
life and health products. He
has worked in both technical
and general management
roles in Australia, UK and
North America. His most
recent full-time role was a
life risk specialist for the
Australian Prudential
Regulatory Authority.
A. J. Hutchinson, 67
ANZIIF (Assoc)
Executive Director
Mr Hutchinson is the HCF
Life Managing Director.
He has extensive general
management experience
in life insurance and funds
management with HCF Life
and other leading insurers.
D. A. Dixon, 67
BA (Hons) (Qld),
MA (Cantab).
Non-executive Director
Mr Dixon is Executive
Chairman of a financial
advisory firm and a Director
of two listed public companies.
He has also worked with the
International Monetary
Fund, the Commonwealth
Treasury, Department of
Finance and is a professional
investor, superannuation and
tax consultant. Mr Dixon is
author of several personal
finance, superannuation,
taxation and investment
strategy books.
T. J. Smith, 67
MBE, RFD, ED
Executive Director
Mr Smith is Chief Executive
Officer of The Hospitals
Contribution Fund (HCF)
of Australia Limited. He
has extensive management
experience in marketing,
distribution and operations
management in the retail
financial services and
insurance industries.
Mr Smith is a Vice President
of the International
Federation of Health
Plans. He is also a Director of
Australian Health Insurance
Association Limited and
until November 2008 was
President. Mr Smith was
appointed a director of
Primary Health Care
Limited in May 2008.
R. G. Utz, 68
FCA, FCPA, F FIN
Non-executive Director
Mr Utz is a chartered
accountant and former
Managing Director of Morgan
Grenfell (Aust) Securities
Ltd, former Director of Ord
Minnett Holdings Limited,
Chairman of Emerging
Leaders Investment Limited
and a former committee
member of the Sydney Stock
Exchange. He has over 47
years’ investment experience.
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|
|
J. A. B. Dunlop AM, 72
Chairman
Mr Dunlop was originally appointed to HCF’s Board in October 1997 by the Health Services Association of New South Wales. He is a Director of The Children’s Medical Research Institute. He was Chairman of the Children’s Hospital at Westmead from 1983 until July 2004, when the New South Wales Government dissolved all Area Health Boards.Mr Dunlop has extensive commercial experience as the Managing Director of Edwards Dunlop and Company Limited between 1978 and 1987, and as a Director of Health Super Pty Ltd between 2000 and 2008. He served as Chairman of the HCF Audit Committee from 2004 until 2009 and was elected Chairman of the Board of HCF on 25 June 2009. Mr Dunlop was appointed a Member of the Order of Australia in 1987 for service to the welfare of children.
C. L. Clifton, 54
MB BS (Hons), BHA
Independent Director – Elected
Dr Christine (Tina) Clifton has served on HCF’s Board since February 1994, initially as the appointee of the University Teaching Hospitals Association (Industrial) in New South Wales and subsequently elected by eligible contributor voters, the latest being in November 2007 for a three year term. She is currently a registered medical practitioner and a company director for various publicly listed and private companies. Her other current directorships include InvoCare Ltd and Health Care Australia Ltd and she is also a Councillor for the University of New South Wales. Prior to 2001, she held various positions in the public and private healthcare sectors including Chief Executive Officer of the Sisters of Charity Health Service in New South Wales and Deputy Chief Executive Officer of the Northern Sydney Area Health Service. She holds degrees in medicine and health administration and also has a specialist qualification in medical administration.
S. P. Coppock, 54
BA, LLB, MBA, LLM, MTax
Independent Director – Elected
Mr Coppock was elected to
the Board in November 2007
for a three year term. He
is a lawyer specialising in
taxation who has worked
in private, corporate and
government practice. His
work in private practice
took him to regional NSW,
Parramatta and Sydney.
He has a strong background
in community involvement
and has been a member of
the South Eastern Sydney
Illawarra Area Health
Medical Research Ethics
Committee and is a Local
Government Councillor on
Willoughby City Council.
He has been and is a director
on not-for profit bodies and
has been a part time lecturer
for over a decade in subjects
ranging from occupational
health and safety, business
law, legal ethics and taxation.
He is the principal of a policy
consultancy that specialises in
the preparation of submissions
and strategic advice on legal
issues in government policy
for private sector.
J. R. O’Dea, 43
BA, LLM, MBA, FAICD
Independent Director – Elected
Mr O’Dea joined the
Board on 30 November
1995, having been elected
by HCF contributors. He
was re-elected in October
2006 to serve a further
three-year term.
Mr O’Dea has a background
in law, having previously
worked as a solicitor in private
and corporate practice. He
also has past experience as a
local government councillor,
as a director on various
statutory and charity boards
as well as a general manager
in the financial services
industry. Mr O’Dea is
currently a Member of the
NSW Parliament and is
married with four children.
M. E. Rummery AM, 62
B.Univ (Hons) SCU
Independent Director
Ms Rummery was originally
appointed to the Board in
December in 1995 by the
Health Services Association
of NSW. She is a retired
lawyer, a former Director of
Catholic Healthcare Ltd and
former Deputy Chancellor of
Southern Cross University.
Ms Rummery holds the
following Ministerial
appointments – Co-Chair of
the Rural Health Taskforce,
Member of the NSW Health
Care Advisory Council
and Member of the NSW
Community and Clinicians
Expert Advisory Council.
She is a former Member
of the NSW Clinical
Excellence Commission and
for many years was Chair of
the Northern Rivers Area
Health Service Board.
Mrs Rummery was made
a Member of the Order of
Australia in 2001 for services
to health and education
and was also awarded an
Honorary Doctorate in 2007
by Southern Cross University.
R. J. Schneider AM, 63
Independent Director
Mr Schneider was appointed
by the Board in January 2006.
He was formerly the Chief
Executive Officer of the
Australian Health Insurance
Association, a post he held
for 22 years concentrating
on policy issues relating
to health financing and
delivery. Prior to joining
AHIA he was a journalist
and media administrator.
He has published extensively
including “Making Medicare
Better” and two books
on politics.
Mr Schneider was made a
Member of the Order
of Australia in 2008 for his
contribution to the private
health insurance industry
and national health policy
development and was made
a Life Member of the
International Federation
of Health Plans in 2006 for
services to the private health
sector. For several years he
was an industry representative
on the Private Health
Insurance Administration
Council and the Health
Insurance Advisory Council.
T. J. Smith, 67
MBE, RFD, ED
Executive Director
Mr Smith is HCF’s Chief
Executive Officer and was
appointed to the Board in
December 1994. He has held
the position of CEO since
February 1990. He has
extensive management
experience in marketing,
distribution and operations
management in the retail
financial services and
insurance industries.
Mr Smith is a Vice
President of the International
Federation of Health Plans.
He is also a Director of
Australian Health Insurance
Association Limited and
until November 2008 was
President. Mr Smith was
appointed a director of
Primary Health Care
Limited in May 2008.
L. J. Stone, 71
ATCL
Independent Director – Elected
Mrs Stone was elected to the
Board in October 1997 and
re-elected for further terms
in 2000, 2003 and November
2006. She is a company
director with a strong
community involvement.
Mrs Stone has long and
sustained experience with
the health industry having
been Chairman of an Area
Health Service Board and
State President of the Health
Services Association of
NSW. Currently, Mrs Stone
is Chairman of Sylvanvale
Foundation (formerly,
Handicapped Children’s
Centre NSW) and is
President of Sutherland
Foods Services Inc [Meals
on Wheels].
Mrs Stone continues as a
Company Director of family
companies involved with
property investments. She
has also served previously, as
a Member of the New South
Wales Legislative Assembly,
as a member of the NSW
Community Welfare Appeals
Tribunal and as a Local
Government Councillor.
G. W. Wright, 64
B Com, BCA (Hons) MBA, BHA, FCIS, AFCHSE, CHE, FCPA
Independent Director
Mr Wright was appointed
to the Board by the Private
Hospitals and Nursing Homes
Association of Australia in
November 1982 and has been
reappointed by its successor,
the Private Hospitals
Association of NSW Inc.
Since 1985 he has been
a management consultant
specialising in health care
management and financing
issues in Australia and
overseas. He is also Chairman
/Director/Continuing Advisor
to several groups operating
not-for-profit hospitals and
residential aged care services
in NSW.
|
|
I. M. McDonald, 63
FCA
Mr McDonald was appointed
company secretary of HCF
and its subsidiaries on
1 September 2006. Prior
to this appointment he
was HCF’s General Manager
Finance from October 1995
to August 2006 and Chief
Internal Auditor from
September 1991 to October
1995. Prior to joining the
company Mr McDonald
had extensive experience
as a partner in a ‘Big 6’
accounting firm, in providing
assurance services, financial
and taxation consulting to
large and medium sized
public and private companies
and businesses. He has been
a chartered accountant for
over 37 years. |
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|
AUDITOR’S INDEPENDENCE DECLARATION TO THE DIRECTORS OF THE HOSPITALS
CONTRIBUTION FUND OF AUSTRALIA LIMITED
We have obtained an independence declaration from our auditor, Ernst & Young, which is set out on the following
page and forms part of the Directors’ Report for the year ended 30 June 2009.
Signed in accordance with a resolution of the Directors.
J. A. B. Dunlop
Chairman
Sydney, 24 September 2009
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Auditor’s Independence Declaration
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