annual report - australian red cross blood service€¦ · annual report 2013/14 06-07 the...

CONTENTS

1.0 OUR VISION, MISSION AND VALUES 02

2.0 MESSAGE FROM THE CHAIR AND CHIEF EXECUTIVE 06

3.0 CORPORATE GOVERNANCE 10

4.0 THE BOARD 13

5.0 THE EXECUTIVE 16

6.0 INTERNATIONAL SERVICES 18

7.0 OUR ORGANISATION 20

8.0 CORPORATE SOCIAL RESPONSIBILITY 22

9.0 KEY PERFORMANCE INDICATORS 29

10.0 CORPORATE STRATEGY AND PERFORMANCE 32

11.0 DONOR SERVICES 34

12.0 FINANCE 36

13.0 HUMAN RESOURCES 38

14.0 INFORMATION SERVICES 40

15.0 MANUFACTURING 42

16.0 MEDICAL, TRANSPLANTATION AND QUALITY SERVICES 44

17.0 RESEARCH AND DEVELOPMENT 46

18.0 FINANCE REPORT 50

19.0 ANNUAL FINANCIAL STATEMENTS 56

20.0 RED CROSS 100

21.0 THE AMAZING JOURNEY OF BLOOD 102

ANNUAL REPORT 2013/14 NEXT PAGE

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21.0 THE AMAZING STORY OF BLOOD 102

MS JENNIFER WILLIAMS | CHIEF EXECUTIVE

We want to extend a huge thank you to our staff and volunteers for their dedication and commitment. Thank you for going above and beyond. To our donors – thank you for your passionate support and generosity.

Australian governments fund the Australian Red Cross Blood Service to provide blood, blood products and services to the Australian community.

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02-03

1.0

OUR VISION, MISSION AND VALUES

OUR VISION

To improve the lives of patients through the power of humanity.

This expresses the belief that unifies everyone at the Blood Service: that improving the lives of patients brings us together as one organisation. In short, ‘one organisation, one direction’.

OUR MISSION

To perform a critical role in healthcare by providing a safe, secure and cost effective supply of quality blood products, essential services and leading edge research to meet the needs of patients.

An explanation of these objectives and the programs of work that underpin them are clearly set out in detail in the strategic plan. Copies of the plan are obtainable by contacting +61 3 9863 1600 or visiting donateblood.com.au/corporate/publications

OUR VALUES

Our values set out how we will behave in the pursuit of our vision, mission and strategic objectives.

WE bELIEVE IN

INTEGRITY

We act honestly and ethically at all times.

COLLABORATION

We work together to achieve our goals.

SERVICE

We focus on meeting the needs of patients, the community, customers, donors, stakeholders and colleagues.

SAFETY AND QUALITY

We make safety and quality part of everything we do.

ACCOUNTABILITY We take ownership of our actions and behaviours to achieve our goals.

EXCELLENCE We strive to be the best at what we do.

ANNUAL REPORT 2013/14

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04-05

WE ARE IN THE bUSINESS OF SAVING LIVES

We collect, process and distribute life-saving blood products. We also

contribute expertise, leadership and support for diagnostic transplantations

and other clinical services, as well as world-class research.

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ANNUAL REPORT 2013/14 06-07

The Australian Red Cross Blood Service (Blood Service) has celebrated some tremendous achievements this year. Through strong strategic direction, we’ve created efficiencies in our blood management, rolled-out continuous improvement initiatives, delivered world-class research, enhanced the donor experience and collected 1.3 million life-saving blood donations.

Despite the continued unpredictable decline in red cell demand - 60,000 fewer issued than in 2012/13 – we successfully met our targets and delivered 545 tonnes of plasma for processing into blood products. We also achieved the best match of red cell inventory to patient demand on record, with supplies remaining in our inventory sufficiency bands for 315 days.

Our customer satisfaction rate also improved to 8.7 out of 10. With 93 per cent of all respondents scoring our services as eight or higher, and 98 per cent customer order fulfilment, our continued focus on delivering service excellence and ensuring patients receive blood products, when they need them, is paying off.

Alongside the Red Cross, we also continued to support and collaborate with our international neighbours to help improve the safety, sustainability and quality of their blood supplies. With funding from the United States President’s Emergency Plan for AIDS Relief (PEPFAR), we’ve assisted with developing national blood legislation, improving hospital and patient blood management, motivating donors and establishing comprehensive clinical guidelines in Cambodia. Practical outcomes included successfully training local scientists to make their first ever batch of platelets.

The Australian Government’s Health Workforce 2025 Report predicts Australia’s nursing shortage will be 109,000 by 2025, with our own collections team shortages estimated between 441 and 617 by 2026. Given these predictions, we’ve successfully piloted the Donor Services Nursing Assistant (DSNA) amended scope of practice to address the workforce challenge created by this future nursing shortage. This realignment of support work includes our DSNAs conducting donor interviews, performing phlebotomy (‘needle in’) and assisting with the management of donor adverse events. This will ensure we are better positioned to have enough appropriately skilled people to collect blood now and in the future.

At the Blood Service, the donor experience is paramount. We strive to enhance our service to donors to ensure donor panel sustainability so we are able to meet Australia’s demand for blood products.

As part of this, we implemented major technological solutions at our National Contact Centre (NCC) to improve the donor experience. Donors who call the NCC are now served faster thanks to a system upgrade to the Genesys software, which allows our staff to have more than 50,000 conversations with donors each week. The upgrade improves reliability and speed, including new features like caller-ID and the ability to send a confirmation email or SMS. This, coupled with the implementation of new donor decision support software, built in-house by the Information Services (IS) division, improves our staff’s ability to determine a person’s eligibility to make an appointment to donate.

From a business continuity and disaster recovery perspective, the IS division also successfully switched our National Blood Management System from the primary to secondary environment to ensure, in the event of any failure, we can confidently continue to access our critical systems. This is a major achievement and milestone in a program of work that has improved our disaster recovery systems and confirmed the reliability of our back-up systems.

As part of our commitment to providing the safest blood supply possible, we’ve continued to reduce the risk of Transfusion-Related Acute Lung Injury (TRALI), which causes dangerous breathing difficulties and low blood

oxygen in a patient following a transfusion. The Blood Service manufactures predominantly male clinical plasma as a risk reduction strategy for TRALI, given that one of the causes is thought to be antibodies found in the blood of women who have been pregnant. This year, 100 per cent of all clinical plasma supplied to customers was sourced from male donors for the second consecutive year.

After years of research, we also supplied a process for preparing deep frozen blood components for the Australian Defence Force (ADF). A significant achievement, the work extends the shelf-life of blood components to up to 10 years by adapting technologies in freezing and thawing blood components. This will provide the ADF with blood components when deployed in remote locations where fresh components are difficult to access. Following approval by the Therapeutic Goods Administration and the National Blood Authority, there may be opportunities to extend this technology for civilian use. The development of the process for frozen platelets is underway.

We’ve continued to implement initiatives to reduce the chance of supplying blood components with an incorrect label. This includes enhancements to staff training and procedures, changes to labelling requirements for irradiated blood components, and the introduction of coloured donor identification numbers that adhere to the product. As a result, we’ve had a significant reduction in labelling errors as well as improved detection of errors, should they occur.

Over the last four years, there’s been a 58 per cent increase in organ donation rates. With organ donor testing usually occurring overnight, our Transplantation Services team has, in the face of record organ donation rates, provided an increasingly valuable service. This year, we were proud to be involved in Australia’s largest live kidney patient and donor transplant procedure. Conducted under the Australian Paired Kidney Exchange program, we played an integral role in ensuring matches were available for the six-way procedure.

The Blood Service is committed to providing a supportive and inclusive workplace through our focus on a strong diversity strategy. The launch of our gay, lesbian and other

workmates (GLOW) network last year has contributed towards an improved understanding of the challenges faced by our lesbian, gay, bi, trans or intersex (LGBTI) colleagues. This investment was recognised at Pride in Diversity’s Australian Workplace Quality Index awards in May, where we were placed in the top 20 LGBTI employers and awarded the highest ranking not-for-profit organisation after a judging of Australian companies.

We have embraced discussion about our men who have sex with men deferrals to help the community understand why the rule exists. By explaining the reasons for the deferral to media, involving stakeholders in discussion, outlining the work to reduce the deferral and responding to complaints on social media, we are now seeing a more constructive dialogue in the public domain.

2.0

MESSAGE FROM THE CHAIR AND THE CHIEF EXECUTIVE

HON DR DAVID HAMILL AM CHAIR

MS JENNIFER WILLIAMS CHIEF EXECUTIVE

THIS yEAR, WE WERE PROUD TO bE INVOLVED IN AUSTRALIA’S LARGEST LIVE kIDNEy PATIENT AND DONOR TRANSPLANT PROCEDURE. CONDUCTED UNDER THE AUSTRALIAN PAIRED kIDNEy EXCHANGE PROGRAM, WE PLAyED AN INTEGRAL ROLE IN ENSURING MATCHES WERE AVAILAbLE FOR THE SIX-WAy PROCEDURE.

As part of our commitment to providing the safest blood supply possible, we’ve continued to reduce the risk of Transfusion-Related Acute Lung Injury (TRALI).

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MOTHER OF TWO, ALICIA NEEDED EMERGENCy TRANSFUSIONS SOON AFTER THE bIRTH OF LACEy.

In April, the Manufacturing division made changes to the structure, roles and work processes across the Processing and Testing teams. The changes enable the division to become a great manufacturer by applying a standardised approach to the way we work, with a focus on working smarter and taking pride in delivering the right products to the right place at the right time. It positions the division to embed a continuous improvement culture and improve employee engagement by having the right people in the right roles.

In line with these changes, we also implemented a new structure in the Quality team to facilitate increased national consistency and align resources to support the changing needs of the Blood Service. In addition, we have augmented pathologist oversight arrangements to meet new regulatory requirements and national practice standards for testing laboratories. These changes also include strengthening the relationship between pathologists and laboratory staff.

This active promotion of a culture of continuous improvement has seen lean principles being adopted across the organisation. Continuous improvement focuses

on empowering and engaging staff to think of ways to improve processes in their area. Using lean thinking to drive this, we’ve conducted a range of lean workshops and introduced a lean coordinator into each of our processing centres.

We achieved an audited Main Operating Program surplus of $5 million after the return of $40.4 million to governments for reinvestment elsewhere in the health sector. This is our fifth consecutive surplus. This clearly demonstrates better value for money for governments. The Finance division has also supported operational improvements through the development of a rostering tool for donor centres and implemented cost saving initiatives through major cross-divisional projects.

In June, our new five-year strategic plan, At the leading edge, was launched. Setting the direction for the Blood Service until 2019, it aims to position us among the best blood services in the world. Shaped at this year’s inaugural Leadership Summit, which provided an opportunity for senior managers to contribute to the development of the plan, its three key strategic areas are backed by rigorous performance measures and clear targets that will signal our success.

In what’s been a challenging, but very rewarding year, we want to extend a huge thank you to our staff and volunteers for their dedication and commitment. Thank you for going above and beyond. To our donors – thank you for your passionate support and generosity. Your life-saving donations change the lives of patients across the country every day, every year.

Hon Dr David Hamill AM

Ms Jennifer Williams

Red blood cells have a shelf-life of up to 42 days, stored in refrigeration.

42+


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3.0

CORPORATE GOVERNANCE

The Australian Red Cross Blood Service is a division of Australian Red Cross. The Blood Service Board reports to the Red Cross Board, which has overall responsibility and oversight and appoints all non-executive Board members.

Australian governments fully fund the Blood Service for the provision of blood products and services to the Australian community. Consequently, we have specific financial and other reporting obligations to the National Blood Authority.

The Board plays a vital role in ensuring the governance of the Blood Service. It is responsible for the organisation’s efficient operation and takes the lead in setting the culture of operating in a responsible way within the community.

The Blood Service Code of Conduct describes our expectations of how we behave and breaches of this are managed and reported through our governance framework. During the year there were no serious breaches requiring reporting to the Board.

About the board

The Blood Service has a Board comprising nine non-executive members and the Chief Executive, who reports to the Board. Board members are selected on the basis of their skills and experience and are generally appointed for a three-year term, but may be eligible for reappointment.

The responsibilities of the Board are to oversee the strategic direction, financial and operational activities and risk management of the organisation. Our Good Governance Principles Policy available on our website, donateblood.com.au, provides more detail. Board meetings are held monthly at various locations around the country to enable interaction with staff and stakeholders.

The Board has an induction and training program and undertakes an annual review of its own performance, which is externally facilitated on alternate years. The last review was an internal review discussing the results of a Board self-assessment survey, plus a one-on-one discussion for each Board member with the Chair. The outcome of these discussions was consistent with the survey results - that overall the Board is functioning well, it is collegial, respectful and engaged, and Board members have the opportunity to participate and contribute.

The structure of Board papers and meetings was reviewed. The Board was comfortable with both of these, while being mindful of the ongoing need to ensure an appropriate balance between strategic and operational matters. Suggestions on fine-tuning the Board induction program and for whole-of-Board development have been implemented. Our next review will involve utilising the Australian Institute of Company Directors’ Governance Assessment Tool with an externally facilitated workshop.

board committees

The Board is assisted in its deliberations by its committees, which may include external members to provide specialist input.

Advisory Committee

This committee comprises mainly external membership and provides independent advice to the Board and Red Cross on medical and scientific aspects of the blood program. It has a formal monitoring process for donor, blood product and patient safety issues and blood sector projects, to ensure the committee’s input and endorsement for the Blood Service approach in each case.

Members: Associate Professor Larry McNicol (Chair), Mr Ken Davis (retired March 2014), Associate Professor Craig French, Professor James Isbister, Dr George Kotsiou, Associate Professor Robert Lindeman, Dr Darryl Maher, Dr Ellen Maxwell, Professor David Roxby, Associate Professor Alison Street, Mr Daryl Teague and Professor John Zalcberg.

Ethics Committee

While not a Board Committee, the Ethics Committee plays an important role in our governance framework. This is an independent body operating as a Human Research Ethics Committee. It is fully compliant with the National Statement on Ethical Conduct in Human Research. The committee also considers broader ethical issues affecting the organisation as required.

Members: Professor Douglas Joshua (Chair), Professor Tony Cunningham, Ms Geraldine Farrell, (retired December 2013), Ms Kaye Hogan, Ms Debra Holder, Associate Professor Robert Lindeman, Mr Elton McKay, Professor John Rasko, Mr Malcolm Wood, Ms Frances Wheelahan and Reverend Greg Woolnough.

Finance and Audit Committee

This committee ensures appropriate financial policies and controls have been established and are being implemented. It reviews and recommends to the Board the annual financial statements, and undertakes the appointment of internal auditors, evaluation of financial aspects of risk and monitoring of the resolution of issues raised by internal and external auditors. Our external auditor is Deloitte and the internal audit function is carried out by Ernst & Young.

Members: Ms Hannah Crawford (Chair), Mr Nigel Ampherlaw, Ms Sandy Chakravarty, Hon Dr David Hamill and Ms Jan West.

Nominations and Remuneration Committee

This committee assists the Board in its deliberations on Executive remuneration, management succession planning and matters relating to employee policies. It also provides advice on Board performance, succession planning and recruitment of Board members.

Members: Hon Dr David Hamill (Chair), Mr Ron Berenholtz, Associate Professor Larry McNicol, Mr Ross Pinney and Ms Jennifer Williams.

Risk Committee

This committee assists the Board in assuring that risk is managed in accordance with its risk management plan and that compliance obligations are managed appropriately. The committee also monitors the Information Services’ strategy and business plan.

Members: Dr David Graham (Chair), Mr Nigel Ampherlaw, Ms Kelly Jones, Mr Ross Pinney, Mr Jim Swinden and Ms Jennifer Williams.

THE bOARD PLAyS A VITAL ROLE IN ENSURING THE GOVERNANCE OF THE bLOOD SERVICE. IT IS RESPONSIbLE FOR THE ORGANISATION’S EFFICIENT OPERATION AND TAkES THE LEAD IN SETTING THE CULTURE OF OPERATING IN A RESPONSIbLE WAy WITHIN THE COMMUNITy.

L-R: Ms Hannah Crawford, Professor John Zalcberg OAM, Ms Sandy Chakravarty, Dr David Graham, Mr Ross Pinney, Mrs Gabrielle Hewitson, Associate Professor Larry McNicol, Mr Nigel Ampherlaw, Ms kelly Jones. Front: Ms Jennifer Williams and Hon Dr David Hamill AM.


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DONOR THANK YOU Thank you from the bottom of my heart

Blood donations saved Jane Every’s life on more than one occasion. After enduring more heartbreak than most people, she is sharing her story in the hope it will encourage more people to donate blood.

In 2009, Jane’s son Goliath was stillborn after many weeks of not knowing if he would live. After the birth, she haemorrhaged and lost three litres of blood. Jane received red cells and plasma during emergency surgery.

The complications did not end there and during the nine weeks that followed, Jane required more surgery and more blood.

This was not the last time that Jane would need blood.

In February 2010, Jane and her husband Zed learnt they were pregnant again, but this pregnancy was also complicated.

She was diagnosed with a rare but serious complication and as a result, she suffered from three bleeds during the pregnancy and was admitted to hospital to stay at 33 weeks.

“Blood was kept on the same floor of the hospital as me for the entire two weeks before birth,” Jane explained.

At 35 weeks Jane underwent a caesarean to deliver her baby.

“I had an IV line from my neck to my heart; this was so the doctor could empty a lot of blood into me in seconds.

“It was a definite possibility that I would lose a lot of blood,” Jane said.

Her daughter was delivered but the surgery was complicated and took longer than planned. Just as the doctors were satisfied, things took a turn for the worse and Jane haemorrhaged.

“They said I was bleeding from everywhere. I required nine litres of blood, which is more blood than my body holds,” she explained.

Jane was placed in intensive care overnight but continued to lose blood. Over the next couple of days she required more surgery and received more blood and platelets.

For the third time, it was blood that saved Jane’s life.

Thankfully, because blood was available, both Jane and her daughter made a full recovery and six days after the birth they were finally able to be properly reunited.

Jane and Zed named their daughter Amazing (Maisie).

“Without donors, my children would not only know the loss of a sibling but also a parent, and my husband not only the devastating loss of his son but also his wife, unthinkable but at that time it was a real possibility.

“I owe my life to blood donors once, maybe twice, possibly three times. I’m very fortunate and very grateful to everyone that gives blood.

“Donors donate because they’re good people and they really deserve acknowledgement.

“To all of the blood donors out there - I wouldn’t be here if it wasn’t for you, blessings and a thank you from the bottom of my heart.”

DONORS DONATE bECAUSE THEy’RE GOOD PEOPLE AND THEy REALLy DESERVE ACkNOWLEDGEMENT.

4.0

THE BOARD

The Australian Red Cross Blood Service is a division of Australian Red Cross. The Blood Service Board reports to the Red Cross Board, which has overall responsibility and oversight and appoints all non-executive Board members.

HON DR DAVID HAMILL AM CHAIR

PhD, MA, BA (Hons), FCIT, FAICD

- Former Treasurer of Queensland

- Director, Brookfield Infrastructure Partners LP

- Chair, Gladstone Airport Corporation

- Chair, Ensham Workers’ Entitlements Fund Pty Ltd

- Chair, UQ College

- Member, the Australian Red Cross Board

MS JENNIFER WILLIAMS CHIEF EXECUTIVE

BEc, MSc, FAICD

- Chief Executive, Australian Red Cross Blood Service since March 2009

- Councillor, La Trobe University Council since 2009

- Former Chief Executive, Austin Health

- Former Chief Executive, Alfred Health

- Former Director, Goulburn Valley Health Board

- Former Commissioner, Australian Commission on Safety and Quality in Health Care

- Former Director, Mental Health Research Institute

- 1995 Victorian Business Woman of the Year public sector category


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MRS GAbRIELLE HEWITSON SECRETARYBSc, Grad Dip Bus Admin, GAICD, AGIA, ACIS - Australian Red Cross Blood Service Secretary

- Previous appointments in Australian Red Cross Blood Service include Assistant Secretary and Distribution Manager at Australian Red Cross Blood Service Victoria

- Member of Governance Institute of Australia

4.0

THE BOARD cont.

MS SANDy CHAkRAVARTy

CPA, MBA, MEcon, BEcon, MAICD

- Chief Financial Officer of the Australian Red Cross Society

- Former head, Asia Pacific Finance and Global Field Operations and International Controller of the Boston Consulting Group

- Former Vice President, Asia Pacific of Ingersoll Rand

- Former Finance Director of Bristol Myers Squibb (Australia and Asia)

MS HANNAH CRAWFORD

BCom, LLB, CA, FFin

- Former Director, Grant Samuel & Associates Pty Ltd

- Former Board member, Alfred Health

- Former Board member, Queen Elizabeth Centre

- Former manager, Arthur Andersen Corporate Finance

- Former Tax Consultant, Ernst & Young

DR DAVID GRAHAM

BPharm, FPS, PhD, FAICD

- Retired from the Australian Public Service most recently as the National Manager, Therapeutic Goods Administration

- Previous roles included the manager of CRS Australia, the Commonwealth Ageing and Aged Care program and the Commonwealth Pharmaceutical Benefits Scheme

- Currently Vice President of Arthritis (ACT) Board and Deputy Chair of Arthritis Australia Council of Advice

- Chair, ISO Technical Committee

- Adjunct Professor, RMIT University

MS kELLy JONES

MBA, BSc, FAICD

- Director, Hunter Medicare Local

- Former Director and Chair, Citrus Australia

- Former Director, NICTA

- Former General Manager Technology, National Australia Bank Ltd

- Former CIO and Director, Deutsche Bank

- Former Managing Consultant, IBM

- Former CIO and Chief Manager, ANZ Bank

ASSOCIATE PROFESSOR LARRy MCNICOL

MBBS (Hons), FRCA, FANZCA

- Director of Anaesthesia, Austin Health

- Medical Director, Anaesthesia, Perioperative and Intensive Care Clinical Service Unit, Austin Health

- Chair of the Victorian Consultative Council on Anaesthetic Mortality and Morbidity (VCCAMM), Department of Health, Victoria

- Chair of the Mortality Subcommittee of the Australian and New Zealand College of Anaesthetists (ANZCA)

- Member of the ANZCA Quality and Safety Committee

- Member of the Expert Working Group (EWG) for the National Blood Authority Patient Blood Management (PBM) Guidelines Review

- Chair of the Clinical Reference Group (CRG) for the critical bleeding massive transfusion and perioperative modules of the PBM Guidelines

MR ROSS PINNEy

MBA, BComm, FCA, FCPA, FFin, FAICD

- Former Senior Executive of National Australia Bank Ltd

- Deputy President, Australian Red Cross

- Member, Finance Commission of the International Federation of Red Cross and Red Crescent

- Chair, Rural Bank Ltd

PROFESSOR JOHN ZALCbERG, OAM

MBBS, PhD, FRACP, FRACMA, FAICD

- Head, Cancer Research Program, School of Public Health and Preventive Medicine (SPHPM), Monash University

- Co-Chair of the Cancer Drugs Alliance

- Interim Chair of the Australian Clinical Trials Alliance

- Honorary Associate of the Clinical Trials Centre, School of Public Health, University of Sydney

- Former Director, Division of Cancer Medicine, Peter MacCallum Cancer Centre

- Former Chief Medical Officer and Executive Director Cancer Medicine, Peter MacCallum Cancer Centre

- Former Chair, Australasian Gastro-Intestinal Trials Group

- Past Director, Board of Cancer Trials Australia

- Former member, Consultative Council of the Victorian Cancer Agency

- Former member, Board of Cancer Institute NSW

- Former President, Clinical Oncological Society of Australia

- 2011 Medical Oncology Group of Australia, cancer achievement award recipient

- 2014 COSA Tom Reeve Award for Outstanding Contributions to Cancer Care

MR NIGEL AMPHERLAW

BCom, FCA, MAICD

- Director, CUA (since March 2011)

- Chair, CUA Risk Committee and Technology Committee Member, Chair of Audit Committee, Chair of Technology Committee, member of Risk Committee, Strategy Committee and Remuneration Committee

- Director, Quickstep Technologies Ltd, Chair of Audit and Risk Committee

- Director, Grameen Foundation Australia

- Former partner of PwC for 22 years


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5.0

THE EXECUTIVE

MR JOHN bROWN

EXECUTIVE DIRECTOR, FINANCE AND CHIEF FINANCIAL OFFICER

CPA, BBus (Accounting), MAICD

- Executive Director, Finance and Chief Financial Officer, Australian Red Cross Blood Service since July 2011 - Former Executive Director, Finance and Corporate, The Royal Children’s Hospital - Former Financial Controller, Manager Financial Accounting and Management Accountant, Austin Health - Previous experience in roles within Victorian State Government and the Commonwealth Government

MS JACQUI CAULFIELD

EXECUTIVE DIRECTOR, MANUFACTURING

B. Bus (Accounting), M. Bus (Manufacturing Management), GAICD

- Executive Director, Manufacturing, Australian Red Cross Blood Service since September 2011 - Joined the Australian Red Cross Blood Service as National Supply Chain Manager - Sixteen years in a multinational packaging organisation with responsibility for the supply chain - Previous experience in project accounting roles in government and commercial organisations

MR MARk GARDINER

EXECUTIVE DIRECTOR, INFORMATION SERVICES AND CHIEF INFORMATION OFFICER

M. Bus (Management)

- Executive Director, Information Services and Chief Information Officer, Australian Red Cross Blood Service since January 2013 - Former Chief Information Officer and Director, Information Technology Services, Alfred Health - Former Chief Information Officer, Eastern Health

- Former Information Communication and Technology Manager, Fairfax Media

MS ANNE HEyES

EXECUTIVE DIRECTOR, HUMAN RESOURCES

BA (Hons), M.Com, GAICD

- Executive Director, Human Resources, Australian Red Cross Blood Service since 2004 - Former Human Resources Director, Victorian WorkCover Authority - Former Human Resources Director, Bank of Melbourne - Previous experience in general management roles in Human Resources at Myer Grace Brothers, OTC and Telstra

- Previous Advisory Board member, Monash Institute of Medical Research

DR DAVID IRVING

EXECUTIVE DIRECTOR, RESEARCH AND DEVELOPMENT

BSc (Hons), MSc, PhD, GradCertMgt, GAICD

- Executive Director, Research and Development, Australian Red Cross Blood Service since October 2008 - Former Chief Executive Officer, Diabetes Vaccine Development Centre - Former Head of Research and Business Development, Biotech Australia Pty Ltd - Foundation Director, AusBiotech Ltd, Australia’s biotechnology industry organisation

- Former Post Doctoral Fellow, The Rockefeller University, New York and CSIRO, Sydney

- Over 15 years’ experience in biomedical research translation

MR PETER MCDONALD

EXECUTIVE DIRECTOR, CORPORATE STRATEGY AND PERFORMANCE

BA (Economics), MPA, FCPA, MAICD, FHFM

- Executive Director, Corporate Strategy and Performance, Australian Red Cross Blood Service since 2009 - Councillor, La Trobe University Council

- Chair, La Trobe University Council, Finance and Resources Committee - Former Chief Financial Officer, Alfred Health and Austin Health - Eleven years’ experience in the Victorian public hospital sector with responsibility for finance, information technology, performance monitoring, capital projects, infrastructure and other corporate services

- Previous experience in several executive roles within Victorian Government departments

DR JOANNE PINk

EXECUTIVE DIRECTOR, MEDICAL, TRANSPLANTATION AND QUALITY SERVICES AND CHIEF MEDICAL OFFICER

MBBS, FRACP, FRCPA GAICD

- Executive Director, Medical, Transplantation and Quality Services and Chief Medical Officer, Australian Red Cross Blood Service since 2006 - Previously Director, Australian Red Cross Blood Service, Queensland - Previously Assistant Director, Red Cross Blood Transfusion Service, New South Wales - Haematologist with more than 20 years’ transfusion medicine experience

MS JANINE WILSON

EXECUTIVE DIRECTOR, DONOR SERVICES

BSc (Physio), MBA

- Executive Director, Donor Services, Australian Red Cross Blood Service since June 2011 - Previous roles included the Executive Director, Strategic Projects, Australian Red Cross Blood Service - Former Director, Business Strategy and Development, New York Blood Centre - Former consultant at McKinsey & Company


The Executive team is led by Ms Jennifer Williams

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18-19

6.0

INTERNATIONAL SERVICES behind the scenes with our international team

Everyone knows the Blood Service is here to collect blood. But how much do they know about what happens behind the scenes at the Blood Service?

The Blood Service employs 3,800 people across Australia, many of whom don’t work in donor centres or laboratories.

There is one small but talented team in Western Australia dedicated to working with blood services from around the globe.

Our International Services team plays a key role in supporting three international networks of blood services – the Alliance of Blood Operators, the Asia Pacific Blood Network and the Global Advisory Panel. These networks facilitate information sharing, benchmarking and identification of best practices, with the view to enable member blood services and improve the way they work. By participating in international networks, the Blood Service learns about new blood processes and technologies being developed around the world and applies these ideas to its own activities, where strategically and operationally beneficial. In addition to providing the secretariat for all three of these networks, the International Services team provides an important link between the Blood Service and other blood operators to facilitate these activities.

But that’s not all the International Services team does. They also run many behind-the-scenes humanitarian projects that change the lives of people in developing countries.

One such program is the Cambodia Blood Safety Project, which aims to improve the safety and sufficiency of the blood supply for patients in Cambodia through initiatives such as increasing the number of voluntary blood donors (the safest type of blood donor), and improving the safety of blood supply by preventing the spread of life-threatening,

blood transmissible diseases like HIV.

Australia is fortunate to be one of only 60 countries in the world whose donated blood is 100 per cent voluntary.

Before our team started working with Cambodia in 2011, less than 28 per cent of their donated blood was given voluntarily. They relied heavily on paid donations and family members donating to replace the blood a loved one had used. At the end of 2013, voluntary donations in Cambodia reached 35 per cent.

The National Blood Transfusion Centre in Cambodia collected just 50,000 blood donations last year from a population of 15

million people. Comparatively, Australia collects 500,000 blood donations a year from a population of 23 million.

Of those 50,000 blood donations collected last year in Cambodia, 8.41 per cent tested positive for a transfusion transmissible infection. This includes HIV, hepatitis and syphilis. In 2014, that number had dropped to 6.91 per cent and continues to decline.

Plasma and platelets were almost unheard of - without the skill or the means to produce the products, the primary focus was on whole blood collections.

Since the project started, many of our team and expert Blood Service consultants have been working on the ground in Cambodia, helping to improve their national blood service.

To date, the team has:

- Created new guidelines for the service to follow when collecting blood

- Improved the safety of donated blood by assisting with donor screening processes and blood testing

- Expanded the collection of blood to regional provinces

- Trained over 100 doctors and nurses on how and when to give a patient a blood transfusion

- Taught Cambodian staff how to promote blood donation to increase the number of voluntary donors, and

- Most excitingly, produced the first batch of platelets and fresh frozen plasma in regional centre, Kampong Cham, extending the quality of care to the provinces.

There is still plenty of work to be done in 2014/15, but with help from the Blood Service’s International Services team and its consultants, the future of Cambodia’s blood supply will continue to improve.

by PARTICIPATING IN INTERNATIONAL NETWORkS, THE bLOOD SERVICE LEARNS AbOUT NEW bLOOD PROCESSES AND TECHNOLOGIES bEING DEVELOPED AROUND THE WORLD AND APPLIES THESE IDEAS TO ITS OWN ACTIVITIES.

1917 – Our pioneering donors – Private Lachlin McDonald was one of Australia’s first blood donors on the battlefields of France in World War 1.

1917

50,000+

Donors who call the National Contact Centre are now served faster thanks to a system upgrade, which allows our staff to have more than 50,000 conversations with donors each week.


CONTENTS




4.0 THE BOARD 13








12.0 FINANCE 36








20.0 RED CROSS 100



7.0

OUR ORGANISATION

- General Counsel provides advice on legal matters, including reviewing major contracts. The General Counsel is also our Chief Privacy Officer, providing advice on privacy legislation to ensure the organisation does not breach its obligations in relation to personal information.

- The Board Secretariat administers Board affairs, and is responsible for ensuring appropriate corporate governance systems are in place, and provides advice on governance issues.

CHIEF EXECUTIVE

CORPORATE STRATEGY AND PERFORMANCE

- Business Process Improvement

- Government Relations and Communication

- International Services

- Laboratory Information Management System

- Performance and Analysis, and

- Strategic Planning and Business Development.

FINANCE

- Capital and Strategic Investment

- Financial Control

- Financial Performance

- Financial Planning and Analysis

- Procurement, and

- Property Services.

HUMAN RESOURCES

- Employee Relations

- Human Resources Consulting

- Human Resources Shared Services

- Learning and Development

- Organisational Development

- Recruitment, and

- Work Health and Safety.

INFORMATION SERVICES

- Business Partnerships

- Strategy and Governance

- Project Services

- Enterprise Systems, and

- Operations.

MANUFACTURING

- National Supply Chain

- National Production and Development

- National Lean Manufacturing

- Production

- Customer Service Delivery, and

- Manufacturing Services.

- Applied and Developmental Research

- Clinical Research

- Donor and Community Research

- Planning and Support, and

- Transfusion Science Research.

- Medical Services

- Transplantation Services

- Affiliated Agencies and External Services, and

- Quality Services.

MEDICAL, TRANSPLANTATION

AND QUALITY SERVICES

RESEARCH AND DEVELOPMENT

GENERAL COUNSEL SECRETARIAT

DONOR SERVICES

- Collection Services

- Marketing and Community Relations

- National Contact Centre, and

- Planning and Support.


CONTENTS




4.0 THE BOARD 13








12.0 FINANCE 36








20.0 RED CROSS 100




8.0

CORPORATE SOCIAL RESPONSIBILITY

DONOR SATISFACTION

DEFINITIONS

• Donor satisfaction: The percentage of top box responses (eight, nine and 10) out of total responses (one to 10)

86%

2011

87%

2012

87%

2013

90%

88%

87%

86%

85%

The Blood Service conforms to the suite of Australian Standards (AS8000-8004) that guides best governance practice. One of these is the Australian Standard for Corporate Social Responsibility. Social, environmental and financial sustainability is of great importance to the Blood Service. The Blood Service is progressing to increase the level of transparency of our activities reported in our annual report including product quality metrics, donor and customer satisfaction outcomes, workforce statistics, participation in policy development and our environmental footprint.

DONOR AND CUSTOMER SATISFACTION

Listening to our customers and donors

Donor satisfaction in 2013/14 continued to improve from 0.4 per cent below target, to 2.4 per cent over target - that’s three consecutive years of improvement. This is an outstanding achievement.

A key driver of improved satisfaction has been a focus on reducing wait times in donor centres. As the most negatively associated subject in donor satisfaction results, we have focused on this area and improved national wait

times by four and a half minutes across all collection streams (whole blood, plasma and platelets) in 2013/14.

The Donor Services division also continued to implement key projects and strategies to improve the satisfaction of donors, including:

- Optimising the appointment process for donors

- Enhancing how we communicate with donors and how they provide feedback

- Refreshing our donor centres to provide a more relaxed environment, and

- Allowing our collections staff to have more time with donors.

Customer service

Each quarter the Blood Service conducts a customer satisfaction survey. Our customers are Approved Health Providers (primarily hospitals). Results are analysed in detail by region and plans are established to address concerns or areas of dissatisfaction. In 2013/14, over 250 customers completed the customer satisfaction survey, resulting in an 88 per cent participation rate - our best to date. Customers scored the Blood Service 8.7 out of 10 for overall satisfaction with the service provided in 2013/14. This is an increase on last year’s result of 8.6. In every quarter, customer satisfaction levels were higher or in

line with the same time last year and over 90 per cent of those surveyed indicated a very high satisfaction level, rating us eight, nine or 10 on a 10-point customer satisfaction scale.

In 2013/14, response times to customer feedback improved, with 98 per cent of feedback being resolved within seven business days. Resolving issues reported through customer feedback in a timely manner continues to be a focus area.

Improving communication and change management was also a focus in 2013/14. New customer communication processes and the quarterly publication, Blood Service in Brief, have been successful, as reflected in the customer satisfaction scores.

WORkFORCE STATISTICS

Labour force dynamics

The Blood Service is committed to equal opportunity and providing a workplace that recognises and values diversity.

We have a number of polices in place, including the Equal Opportunity and Discrimination Policy and the Illegal and Unethical Behaviour Policy, that promote and support a harmonious working environment free from discrimination.

In 2013/14, the Blood Service launched our gay, lesbian and other workmates (GLOW) network, which has contributed towards an improved understanding of the challenges faced by our lesbian, gay, bi, trans or intersex (LGBTI) colleagues. Our effort was recognised at Pride in Diversity’s Australian Workplace Equality Index, where we were placed in the top 20 LGBTI employers and awarded the highest ranking not-for-profit organisation after a judging of Australian companies.

The Blood Service is compliant with the requirements of the Workplace Gender Equality Act and had no reported incidents of discrimination in the reporting period.

Employment Type Headcount Full-time Equivalent FTE

Female Male Total headcount

Female Male Total FTE

Full-time 1,334 715 2,049 1,327 715 2,042

Part-time 1,378 149 1,527 917 97 1,014

Grand Total 2,712 864 3,576 2,244 812 3,056

years of Service Headcount Full-time Equivalent FTE

FT PT Total headcount

FT PT Total FTE

Under 5 1,089 761 1,850 1,085 500 1,585

Greater than 5, less than 10 510 409 919 508 275 783






35 and over 8 1 9 8 1 8

Grand Total 2,049 1,527 3,576 2,042 1,014 3,056

Female compared to male for years of service

Part-time compared to full-time for years of service

LAbOUR FORCE DyNAMICS

90%

2014

22-23

CONTENTS




4.0 THE BOARD 13








12.0 FINANCE 36








20.0 RED CROSS 100



8.0

CORPORATE SOCIAL RESPONSIBILITY cont.

bLOOD SERVICE INVENTORy IMPROVEMENT

National Inventory Management Framework

The National Inventory Management Framework project, a joint Blood Service and National Blood Authority initiative aims to define optimal red cell inventory across the blood sector and implement better processes and guidelines for effective red cell inventory management. The Blood Service expects outcomes from the project which will enable a greater ability to respond to demand and reduce wastage across the sector. Based on the positive outcomes of a national pilot conducted in 2013, the project is currently seeking approval from relevant stakeholders to formally roll-out the red cell framework more broadly. Also within scope of this project, is a similar framework for platelets which will be developed and tested.

Age of issue

In the last 12 months, we have seen a reduction in the national average age at issue for red blood cells, from 9.0 days in 2012/13 to 8.3 days in 2013/14. In 2013/14 we have concentrated on refining both our red cell forecasting process and our collection planning process, resulting in closer alignment of supply and demand and, ultimately, allowing us to maintain red cell inventory within the inventory bands for longer. This is in the face of considerable changes in red cell demand with an eight per cent reduction against the previous year being observed.

The red cell inventory bands were updated twice during the year to reflect the changes in demand, the reduction in the variability of our collections and the focus in reducing red cell lead time from collection to inventory. During the 2013/14 year, our red cells remained within the bands for 315 days of the year.

SAFETy AND EFFICIENCy

Ensuring the safety of the blood supply

There are multiple checks through the life-cycle of blood components manufactured by the Blood Service to ensure their safety. These occur pre-donation, during donation and post-donation.

Pre-donation

The Blood Service has guidelines for the selection of blood donors and all donors complete a confidential questionnaire prior to each donation to ensure they meet guidelines.

During donation

The donation volume and duration are recorded and used to determine whether the donation can proceed to the next manufacturing step. This occurs for all donation types.

Post-donation

All donations are tested for the following markers of transfusion transmissible infectious diseases:

- Hepatitis B virus (HBV) DNA

- Hepatitis B surface antigen (HBsAg)

- Human Immunodeficiency virus-1 (HIV-1) RNA

- HIV-1 and HIV-2 antigen and antibody

- Hepatitis C virus (HCV) RNA

- HCV antibody

- Human T-cell lymphotropic virus-I/II (HTLV-I/II) antibody

- Syphilis

- Selected components (approximately 25 per cent) are tested for antibodies to cytomegalovirus (CMV). The number is determined by inventory requirements for supply of CMV negative components

- Based on donors’ responses to the donor questionnaire, certain donations are also tested for malaria, hepatitis B core and surface antibodies, and

- All platelets manufactured are screened for bacterial contamination.

Other quality and safety measures include:

- All donations undergo ABO and Rh D blood grouping and are screened for the presence of red cell antibodies

- Universal leucodepletion of red cell and platelet components

- Manufactured blood components are selected according to a sampling plan for quality control testing against the components’ specifications

- All equipment used during manufacturing and testing of blood components undergo scheduled maintenance programs to ensure their optimal operation

- All components are handled and stored in accordance with component specific handling and storage requirements, and

- Processing facilities are fitted with environmental monitoring and controlling systems.

Strategies to reduce Transfusion-Related Acute Lung Injury (TRALI)

Blood transfusion recipients of high volume plasma components such as clinical fresh frozen plasma and apheresis platelets have a potential risk of TRALI. It is thought that HLA/HNA antibodies present in the plasma of the transfused blood components are responsible for TRALI symptoms. Women who have been pregnant are more likely to have HLA/HNA antibodies.

The Blood Service manufactures predominantly male clinical plasma as a risk reduction strategy for TRALI. During 2013/14, 100 per cent of clinical plasma supplied by the Blood Service was sourced from male donors. TRALI events reported to the Blood Service continue to remain low.

Collection site strategy

To ensure our collection centres are the right type, in the right place and of the right size, the collection site strategy informs the Blood Service’s investment in collection infrastructure. Over the last 12 months, several new donor centres were constructed in Wollongong (NSW), Strathpine (Qld) and Fremantle (WA). In Brisbane (Qld), Newcastle (NSW) and Paramatta (NSW), out-of-date mobile units were retired, and replaced with new donor mobile centres. In Hamilton (VIC) and Griffith (NSW), two static collection centres operating out of hospital facilities, were changed to mobile units. This has seen the utilisation of our collection facilities improve from 34 per cent to 36 per cent over the 12 months, and the quality of our collection facilities increase markedly.

bETTER MATCHING OF SUPPLy TO DEMAND

Since the implementation of inventory bands in 2010/11, we have continually increased the number of days we meet the bands.

152

118

27 15

201229

254

315

12 1884

35

FyO10 - 11 Fy11 - 12 Fy12 - 13 Fy13 - 14

350

300

250

200

150

100

50

0

Under band

Over band

Within bands


CONTENTS




4.0 THE BOARD 13








12.0 FINANCE 36








20.0 RED CROSS 100



8.0

CORPORATE SOCIAL RESPONSIBILITY cont.

bLOOD SERVICE PARTICIPATION IN PUbLIC POLICy DEVELOPMENT 2013/14

Strategic blood forum

The Blood Service is responsible for the collection, processing and manufacturing of blood and blood products in Australia. Patients rely on the Blood Service 365 days a year, 24 hours a day to provide them with life-saving products and clinical services. The Blood Service plays a vital role in in the development of Australian public policy that impacts donor welfare and patient safety.

In November 2013, the Blood Service hosted the annual strategic blood forum. This allowed the Blood Service to engage stakeholders and public policy makers in open discussions on emerging strategic issues in the blood sector.

Four main topics were discussed:

1. Improving accountability for the use of blood products

2. Vulnerability of platelet supply in an environment of declining red cell demand

3. Platelet research and immunoglobulin update, and

4. The impact of the patient blood management program in Australia.

The key themes included:

- Declining demand for red cell is not unique to Australia, and at the time, it was recognised that we may only be at the beginning of that trend

- There is a need to address the paucity of data in the blood sector. Recognition that accessible and relevant data is essential for informed policy and decision making

- The application of price signals on blood and blood products is welcomed and needs to be transparent and visible to all, including the prescribing clinician

- Platelet supply is vulnerable and the blood sector is focused on implementing policies and strategies to ensure effective and efficient use of platelets

AUSTRALIA - NATIONAL RED CELL DEMAND TREND

Like other countries, Australia has seen a reduction in the demand for red cells. This is good news as it means fewer patients are having blood transfusions, but it also highlights the need for the Blood Service to remain adaptable to changing demand patterns. In 2013/14, we issued 60,000 fewer red cells than 2012/13 in response to falling demand – this is a drop of 7.9 per cent, from 763,552 red cells to 703,358. It is predicted demand will fall by a further 21,000 red cells in 2014/15 (-3 per cent).

*Forecasted 2014/15 demand

800,000

700,000

600,000

500,000

400,000

300,0002004/05

744,249

2005/06

757,034

2006/07

777,673

2007/08

768,631

2008/09

793,459

2009/10

795,912

2010/11

800,413

2011/12

801,296

2012/13

763,552

2013/14

703,358

2014/15

682,312*

In 1948 the first ‘test’ plastic blood packs were used in Australia. Glass bottles were replaced with plastic in the 1970s.

19701948

We delivered more than 100,000 shipments of blood products Australia wide.

100,000+

- The patient blood management guidelines have been embraced by stakeholders. The guidelines have effectively enhanced responsible usage and improved efficiency, and

- There are a number of useful resources developed by the Blood Service and the National Blood Authority that are useful and practical for clinicians as a companion to the patient blood management program.

Risk-based Decision Making Framework

The Blood Service has been working with the Alliance of Blood Operators (ABO) on the development of a draft Risk-based Decision Making framework specifically designed for blood safety. The framework has been designed to gauge quantitative and qualitative risk and overall risk tolerance in the context of patient and donor safety. It will also contain guidance regarding the use of health economic and outcomes assessments in the evaluation of risk and mitigation options.

In June 2014, approximately 300 key stakeholders in the

Australian blood sector, and internationally, were invited to participate in the stakeholder consultation to review the draft framework.

The outcome of the stakeholder consultation review is still being collated, and we look forward to providing the outcomes to participants later this calendar year.

International Humanitarian blood Program

The Blood Service, together with the Australian Red Cross provides technical and policy support to blood services in the Asia Pacific region and beyond through its International Humanitarian Blood Program.

In the 2013/14 year, the Blood Service has provided policy, costing, technical and medical support to the Cambodian National Blood Transfusion Centre, funded by the United States President’s Emergency Plan for AIDS Relief program (PEPFAR). Quality management support has been provided to the National Blood Transfusion Centre in Jakarta, Indonesia, funded under the joint International Humanitarian Blood Program.


CONTENTS




4.0 THE BOARD 13








12.0 FINANCE 36








20.0 RED CROSS 100









ScaleMin Dot

Screen

Job no.Software

DateDesigner Print Process

Printing Inks

Fonts Used

Version File

Australian Red Cross

Blood Service

20 Jun 2014DaWh 1 094-07-Handwritten-Messages.ai

Illustrator CS6100%

ARC00245lpi n/a

Screen print on cloth

None


330mm

230mm


Sign ID:

Scale:

-07100%

RECIPIENT COURTNEy NEEDED MANy UNITS OF bLOOD AND PLATELETS TO OVERCOME SEVERE ANAEMIA.

kEy FIGURES

1 Main Operating Program result prior to the return of $40.4 million to the National Blood Authority.2 There is no target because our aim is to meet demand. The comparison is to forecast.

9.0

KEY PERFORMANCE INDICATORS

Actual 13/14 Target 13/14

bUSINESS PROCESSES

Employee engagement 75% 75%

Lost time injury frequency rate 9.07 ≤ 7.83

Number of process-related recalls per 10,000 collections 0.45 ≤ 0.65

Number of days the total red cell blood stocks for group O provides less than five days’ coverage

0 0

PERCENTAGE OF SUPPLy PLAN MET

% Red cell yield 89.5% ≥ 87.0%

% Proportion male only clinical plasma 100% ≥ 99%

Age at issue (days) 8.3 ≤ 9.0

Red cell supply figure (units) 703,400 708,987 (forecast)2

Total platelet supply figures (equivalent adult doses) 130,598 130,930 (forecast)2

Clinical FFP supply figures (equivalent adult doses) 132,228 137,981 (forecast)2

Total IVIg supply (kg) 4,022 4,121

% CSL Behring plasma supply met 100% 100%

CSL Behring plasma supply figures (kg) 545,114 545,000

DONOR MANAGEMENT

Donor satisfaction (score of ≥ 8 out of 10) 89.8% 89.0%

Time to couch (minutes between appointment time and bleed start) 30.8 31.5

CUSTOMER SATISFACTION (HEALTH PROVIDERS)

Overall service provided by Blood Service 8.7% ≥ 8.7%

FINANCE

Main Operating Program financial result $45.4 million1 $5 million

The top-level performance indicators for the organisation are reported to the Board, which monitors performance monthly.


CONTENTS




4.0 THE BOARD 13








12.0 FINANCE 36








20.0 RED CROSS 100



30-31

TOGETHER WE IMPROVE THE LIVES OF

PATIENTSBy working towards one vision,

valuing everyone’s contribution, we achieve amazing things.

CONTENTS




4.0 THE BOARD 13








12.0 FINANCE 36








20.0 RED CROSS 100



The Corporate Strategy and Performance division supports the business by providing data and strategic policy advice that can be used to assist in operational decision making, planning and performance monitoring. The division also engages externally through positive media promotion and the management of national and international stakeholder relations.

business Process Improvement (bPI)

The team develops business process improvement methodologies to support and lead projects as well as providing training and consultancy advice to managers.

Government Relations and Communication

The team manages the Blood Service’s relationship and communication with the National Blood Authority and government departments. They provide strategic policy advice and coordination.

They’re also responsible for media support and the distribution of information to promote greater public awareness of blood donations. They provide expertise in crisis communication, offer advice and support to the business and are responsible for all employee communication and internal channels.

International Services

International Services deliver the Blood Service’s engagement with global and regional blood networks and alliances, international knowledge exchange, scanning, benchmarking and humanitarian blood programs.

Laboratory Information Management System (LIMS)

The LIMS team manages the introduction of a system to provide efficiencies for data management in our laboratories.

Performance and Analysis

Analytics They provide a reporting service, cause and effect hypothesis testing and evaluate marketing campaigns.

Business Analytics

The team uses technical expertise and knowledge of the business to solve problems, plan, evaluate and monitor performance. The analysts actively partner with the business to prioritise and develop the web-based capabilities of the Blood Service for on-demand reporting.

Business Performance

The team aids the development and implementation of business performance measurement processes that support business continuity and assist with the development of the future strategy. They are also responsible for the production and delivery of KPI reports to the Executive and the Board.

Cognos Reporting The team is responsible for developing the Blood Service’s business intelligence and management reporting capabilities.

Strategic Planning and business Development

This team manages strategic and business planning processes, including the translation of business priorities into divisional work plans. They also cover risk management, insurance, national project coordination and business development.

10.0

CORPORATE STRATEGY AND PERFORMANCE

MR PETER MCDONALD

EXECUTIVE DIRECTOR, CORPORATE STRATEGY AND PERFORMANCE

The Corporate Strategy and Performance division has continued to support the business by providing accurate data and strategic advice to strengthen operational decision making and performance monitoring.

The launch of the new five-year strategic plan, At the leading edge, was a significant achievement. Articulating what needs to be achieved to realise our goals, the plan was refined at this year’s Leadership Summit and aims to position us among the best blood services in the world. “The Leadership Summit provided an opportunity for all senior managers to contribute to the development of a strategic plan that is contemporary and clear,” Executive Director, Peter McDonald, said. “It’s something to be very proud of. It’s not your average, waffly strategic plan peppered with motherhood statements. Each area is backed by rigorous performance measures and clear targets that will signal our success.”

The division also enhanced the data reporting and analysis abilities of the business by further investing in our reporting capabilities using Cognos. “We’ve been investing in Cognos for almost four years and it’s now delivering by producing better, intuitive and more efficient reporting,” Mr McDonald said. A new online report centre produces reports across eight different categories and an Executive dashboard provides a daily summary on customer feedback, donor adverse events, collections forecasting and labelling errors. The team has also reduced typical turnaround time on report development from six months to one-week.

This year, the division continued to support and collaborate with our international neighbours to help improve the safety, sustainability and quality of their blood supplies. In Cambodia, the team successfully trained scientists to make their first ever batch of platelets. They’ve also focused on developing national blood policy and legislation, motivating donors and establishing a comprehensive set of clinical guidelines.

Leveraging from a positive risk management internal audit report, the division has also defined our risk appetite with the Board. “We’ve defined the sort of risk we’re willing

to accept, determined tolerances and consequences,” Mr McDonald said. “That’s pretty sophisticated risk management.”

The Blood Service has also continued its involvement in the Alliance of Blood Operators (ABO), a network of seven not-for-profit blood services from around the world, which has allowed for improved performance in Australia through information exchange, benchmarking and comparison. Through this, significant progress has been made on the development of an international framework to enhance blood safety decision making. “The framework will improve consistency in blood safety decision making to ensure decisions are based on evidence and overall risk tolerance in the context of patient and donor safety,” Mr McDonald said. “A consistent international approach will carry more weight than an isolated effort.”

Improving organisational processes by implementing a national Incident and Quality (IQ) Management System, establishing continuous improvement in our manufacturing laboratories and cascading strategic priorities through the organisation via the senior managers’ meeting, have also been priorities this year.

In addition, the division’s success in having constructive conversations in the media about our blood donation deferral policies around sexual activity is a key achievement. “We’re always willing to discuss our deferrals to ensure the community understands the screening process and its important role in maintaining blood safety,” Mr McDonald said. “This year, we’ve actively engaged with journalists, educating them as to why the deferral exists and shared our response via social media to help educate the public. We’re starting to see the positive results of this approach.”The blood Service was mentioned in the media

more than 4,300 times this year.

4,300 MEDIA

REFERENCES

Articulating what needs to be achieved to realise our goals at the Leadership Summit.


CONTENTS




4.0 THE BOARD 13








12.0 FINANCE 36








20.0 RED CROSS 100



The Donor Services division manages the end-to-end blood donor experience. We are responsible for managing blood donations, national marketing, contact centre operations and building community relations, all of which play central roles in ensuring blood components and products are collected as required. In doing so, we contribute to the organisation’s strategic objectives by providing great service for our donors, improving organisational capabilities and providing value for stakeholders by ensuring blood components are available when patients need them.

Collection Services

Collection Services is the public face of the Blood Service and is responsible for the collection of whole blood, plasma and platelets from volunteer donors in 78 fixed donor centres and 31 mobile units that visit over 700 sites annually.

Marketing and Community Relations

The team is responsible for the recruitment of new donors as well as contributing to the retention and frequency of existing donors. They are also responsible for brand stewardship. This is achieved through the development of strategic marketing programs and the design of local activities to ensure an excellent donor experience. Marketing also works with the Government Relations and Communication team in Corporate Strategy and Performance to promote and protect the image and reputation of the Blood Service.

National Contact Centre (NCC)

The NCC seeks to ensure donors are scheduled to donate at a time that meets supply requirements, while improving donor frequency and retention. The NCC works with the business to assist in booking donor appointments that allow Donor Services to meet our collection targets, which ensures the organisation meets demand.

Planning and Support

The Donor Services Planning and Support team is the central team that supports the delivery of the business plan for our division. This includes business proposal preparation, coordinating the procurement of products and services, collections planning and managing performance.

11.0

DONOR SERVICES

MS JANINE WILSON

EXECUTIVE DIRECTOR, DONOR SERVICES

The decline in red cell demand has continued this year, with the Donor Services division responding to the greater-than-expected drop with impressive flexibility.

Responding to shifts in demand through sophisticated forecasting, the division has also managed donors appropriately to fine-tune the way blood is collected. “The National Contact Centre (NCC) has been instrumental as they’re the main lever in controlling donation appointments,” Executive Director, Ms Janine Wilson, said. “We can call more or less donors, and contact donors with specific blood types. This has enabled us to respond to changes in red cell demand in a timely way over the last year.”

This focus on improving efficiencies aligns with the continuous improvement initiatives being rolled-out across the organisation. “The environment has changed so much, and we’ve also had to change,” Ms Wilson said. “This change has been an opportunity to look at how we engage and empower our staff to think of ways to improve processes, while also remaining efficient and delivering value for stakeholders.”

A key achievement for the year was the piloting of the Donor Services Nursing Assistant (DSNA) scope of practice. This program of work was initiated to address the workforce challenge created by the current and forecast nursing shortage. The amended scope of practice includes ‘needle in’ and the management of donor adverse events and will ensure enough appropriately skilled people are able to collect blood. “Our aim is to have the right people doing the right job at the right time, and to ensure we’ve got a sustainable workforce,” Ms Wilson said. “The pilot has been successful in New South Wales, the Australian Capital Territory and Western Australia and we’re now well positioned to plan the roll-out of this model to other regions.”

The division has also implemented technological solutions to improve the donor experience. Donors who call the NCC are now served faster thanks to a system upgrade to the Genesys platform. “This upgrade improves reliability, speed and includes new features like caller-ID and the ability to send a confirmation email or SMS,” Ms Wilson said. NCC agents have also been provided with in-house built software to support them in determining a person’s eligibility to make

an appointment to donate. “The experience of the donor is paramount and we need to ensure we build everything to give donors the best experience possible. This software improves the service we’re able to provide.”

The Blood Service regularly reviews its network of assets to ensure it remains effective in meeting demand. As part of this assessment, the division completed a phased review of its mobile donor centre network. “Phase one looked at how we could make our mobiles more reliable, and after modifying our visitation schedules, we were able to meet our collection target more consistently,” Ms Wilson said. “After improving their reliability, we assessed the role of mobile centres in our overall collection network to meet patient needs.” This second phase revealed that mobile donor centres are essential in contributing towards our overall collections. “However, there is opportunity to refine the look, feel and operation of our mobile donor centres for a better donor experience and to improve efficiency,” Ms Wilson said.

The investment in social media is another highlight for the year. “It’s become an important channel for keeping our donors engaged and provides an effective way to reach out to donors when we need them urgently in response to increases in patient demand,” Ms Wilson said.

“Donor Services has taken a challenging, changing environment and responded to it exceptionally well,” Ms Wilson said. “We’ve met our collection and red cell targets, while minimising waste, managed our volunteer donors better and delivered an unprecedented plasma surplus. We’ve done everything that’s been asked of us and done it more efficiently.”

Donor Services has implemented many changes to improve the donor experience.

We had over 1.3 million donations which created 2.14 million life-saving products.

2.14million products


CONTENTS




4.0 THE BOARD 13








12.0 FINANCE 36








20.0 RED CROSS 100



The Finance division manages organisational funding and provides financial information, reporting, analysis and advice to support decision making and performance improvement.

Capital and Strategic Investment

The team facilitates the appropriate investment of project and capital funding to ensure sustainability, growth and achievement of strategic objectives.

Financial Control

Accounting The team prepares financial results. This extends to monthly financial reporting, annual statutory reporting, tax compliance, treasury management and fixed asset accounting.

Document Management and Archive Project This team focuses on improving document practices at the Blood Service.

Finance Systems Support This team includes the finance help desk and is responsible for the operational management of the Oracle Financial and Asset Inventory Management System (FAIMS). This system supports the organisation with consumable inventory management, donor centre consumable replenishment and finance applications.

Transactional Processing The team is responsible for the accounts payable and receivable functions, which includes credit card and reimbursement management.

Financial Performance

Financial Performance provides financial and accounting support, including developing divisional annual budgets, reporting on monthly financial performance, national fleet management and providing financial and commercial analysis to internal stakeholders for decision making.

Financial Planning and Analysis The team manages the production of and continuous improvement in product costing, budgeting/forecasting and financial analytics. They also manage output-based funding

arrangements with the National Blood Authority. They have secretariat responsibility for the Cost Model Working Group, which is a cost benchmarking group comprising blood services from around the world.

Procurement

Procurement ensures compliance to the Blood Service Procurement Policy, providing support to all divisions during tender processes, and negotiating with key suppliers for the administration of national contracts.

Property Services

This team is responsible for the leasing, construction and facilities maintenance of all fixed and mobile donor centres and overseeing major construction projects in processing centres and other facilities.

Leasing The team ensures all lease contracts for our real estate portfolio are in line with our strategy, while identifying and negotiating opportunities for relocation of donor centres.

Construction The Construction team manages projects such as new donor centres, major refurbishments and any other refurbishment work in non-principal sites.

Facilities Maintenance

The Facilities Maintenance team provides day-to-day support for all donor centres’ reactive maintenance issues.

12.0

FINANCE

MR JOHN bROWN

EXECUTIVE DIRECTOR, FINANCE AND CHIEF FINANCIAL OFFICER

The Finance division has resolved and improved operational issues this year by successfully completing valuable cross-divisional projects.

A significant achievement has been the upgrade to the Financial and Inventory Management System (FAIMS). Used to support the business with consumable inventory management, the system’s upgrade has ensured supportability and protection of processes and data. “It was a significant task and, it was not only on time and on budget, but it has also enabled new projects to be undertaken such as the donor consumables imprest system, which is in pilot phase and will be rolled-out in the future,” Chief Financial Officer, John Brown, said.

A key achievement this year was the development of a rostering tool for donor centre managers. Developed in response to the need for a simple and flexible approach to rostering, it provides managers with the autonomy to build their own rosters in line with business requirements and staff availability. “The tool has been an enormous success and has most importantly addressed a previous driver of dissatisfaction for our donor centre managers as well as delivering a significant operational cost saving,” Mr Brown, said.

Stemming from this project, the division developed a purpose-built testing scheduler for the Manufacturing division to help manage the testing of samples in our processing centres. The tool has been provided to testing supervisors to equip them with the ability to better plan their work and manage early communication with other teams in processing and customer service delivery.

The division also implemented a national help desk service to improve donor centre facilities maintenance. Continued development of property and infrastructure capabilities also saw the completion of a large portfolio of donor centre relocations and refurbishments, and the delivery of three new mobile donor centres. The division also started the refurbishment of the Perth Processing Centre, which includes the relocation of the Perth Donor Centre.

The division has addressed the key findings of an internal audit on record archiving practices. It identified an absence of policy (apart from non-GMP records) and opportunities

to centralise vendor relationships as areas for improvement. “The progress made in improving document management and record archiving over the past year is substantial,” Mr Brown said. “We’ve consolidated 20 separate contracts into one, which will result in an annual saving of $600,000. The team has also revised a document retention schedule and is working on deploying a single records management system. We’re also developing an archive master list, which will consolidate all local registers across the country.”

The benefits of chairing and providing secretariat support to the International Benchmarking Cost Model Working Group, have equipped the division with international data sets to guide improvement and cost savings. “Our involvement in this group allows us to compare how much it costs to collect, test, process and deliver blood and blood products with representatives from the United States, New Zealand, Canada and Britain,” Mr Brown said. “With four years of data, we now have really good comparisons in terms of labour and consumable costs. This knowledge has helped us by identifying areas to achieve savings. A great example of this is the changing of our blood bags as part of the European blood tender arrangements, which will deliver savings of $18 million over three years.”

The division’s international contributions extended to Cambodia as part of the Blood Service’s aim to assist our neighbours with safe blood supplies. Representatives from the division have provided expertise in recommending improvements to transparency and traceability of funds and the building of facilities.

“This year, we’ve not only contributed towards improving finance functions, but we’ve provided significant value in other areas of the Blood Service, and internationally, too,” Mr Brown said. “I’m very proud of what we’ve achieved.”

We have moved 90,000 boxes to our new archive supplier which will save us $600,000 annually.

90,000

Finance has not only contributed towards improving finance functions, but we’ve provided significant value in other areas of the blood Service.


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The Human Resources division works across the organisation to improve the sustainability of labour supply, align our structure, work-design and culture with organisational objectives, and build a safer workplace. They also provide strategies to improve the leadership skills and capabilities of employees.

Employee Relations

The Employee Relations team develops industrial strategies to support the achievement of organisational objectives and manage Blood Service relationships with external industrial stakeholders and the employment frameworks under which all employees are employed. The team also manages the equal opportunity and diversity functions at the Blood Service.

Human Resources Consulting

This team provides local consultancy services to line managers for the regional implementation of the organisation’s people management plans. They also advise line managers on the effective management of their workforce.

Human Resources Shared Services

Human Resource Systems This team assists reporting to enable line managers to manage their labour budgets and people management Key Performance Indicators (KPIs). They also aim to enhance the ‘end user’ experience for our managers and employees, which will enable improved reporting and decision making.

Payroll The Payroll team provides payroll services and centralised administrative support for general employment activities.

Learning and Development

The Learning and Development team partners with the entire Blood Service to design, develop, implement and evaluate learning solutions that underpin workforce competence.

Organisational Development

This team develops strategic programs and tools that help us attract and improve the depth of talent and leadership in the organisation.

Recruitment

This team provides recruitment processes to support hiring managers. They also assist in building the Blood Service employment brand through its continual improvement of our career websites.

Work Health and Safety

The team develops, implements and monitors systems to ensure a safe and healthy environment for the organisation. It ensures the Blood Service meets or exceeds its statutory obligations. Services include advice and strategies for injury prevention, and return-to-work programs for people injured at work.

13.0

HUMAN RESOURCES

MS ANNE HEyES

EXECUTIVE DIRECTOR, HUMAN RESOURCES

In a year of change and fine-tuning, the Human Resources (HR) division has partnered with other divisions to drive improvement and productivity initiatives.

A key achievement was the piloting of the Donor Services Nursing Assistant (DSNA) amended scope of practice. The HR-led project was initiated to ensure enough appropriately skilled people are able to safely collect blood. The amended scope of practice includes ‘needle in’ and assisting with the management of donor adverse events. “I was so proud of how rigorously we assessed any impact on safety, product quality, customer satisfaction and team engagement,” Executive Director, Anne Heyes, said. “It’s a major achievement and a very important one to protect sustainability given the global nursing shortage.”

Supporting Manufacturing during a significant time of change – the Manufacturing Laboratory Improvement Project (MLAB) – is a highlight for the year. The changes enabled the division to become a great manufacturer by applying a standardised approach. “Supporting Manufacturing in the success that MLAB has been is one of the key achievements of the year,” Ms Heyes said. “This big change initiative has occupied a large amount of time for this division. Negotiating industrial arrangements and providing support to staff through these processes was imperative.”

At least four enterprise agreement negotiations were finalised this year, too. “The negotiations are important as they are the legal framework that governs the employment arrangements for the majority of staff,” Ms Heyes said. “They’re an important vehicle for us to contribute to business success by negotiating efficiencies and more flexibility while also providing appropriate outcomes for staff.” The success of these negotiations was evident in this year’s Employee Engagement Survey (EES), where employees rated their satisfaction with pay as well above the national norm.

The division has also experienced success in the continued development of its workforce diversity strategy. The gay, lesbian and other workmates (GLOW) network has critically supported the inclusion of lesbian, gay, bi, trans or intersex (LGBTI) colleagues. This investment in assessing and

improving our culture, policies and practices to better understand the challenges faced by the LGBTI community, was recognised at the Australian Workplace Quality Index (AWEI) awards. Presented with the not-for-profit award for LGBTI inclusion, the ceremony also recognised the Blood Service in the top 20 LGBTI employers. This year, GLOW also joined the global It Gets Better campaign by producing an emotional video featuring employees who explained their ‘coming out’ processes and how life got better.

The continued roll-out of the Employee Value Proposition (EVP), which is designed to position the Blood Service more appropriately in the recruitment market to attract a broader group of candidates, has been successful. At the Human Capital HR Awards, the Blood Service was awarded Best EVP. “The big banks, professional services and top 50 companies are considered for this and, for a not-for-profit to be a winner, is a great result,” Ms Heyes said.

Time lost to workplace injury has also improved this year. Reducing to 581 hours per month from 1,004 hours in 2012/13, the result is the best outcome since the measure was introduced in 2010/11. The average workers’ compensation premium costs fell to $771 per employee from $846 in 2012/13.

“While this year has been one of organisational restructuring and change, I was most pleased to see in the EES results that staff felt well supported,” Ms Heyes said. “Everyone may not always understand or accept the reasons why we implement change, but given it’s our job to ensure better results, fulfilment of demand, customer satisfaction, quality and efficiency, it’s great that, regardless of whether people agree or not, they feel we have supported them well through change.”

GLOW joined the global It Gets Better campaign by producing an emotional video featuring employees who explained their ‘coming out’ experiences and how life got better.

Diversity at the blood Service.

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Information Technology (IT) is important to the Blood Service as it underpins nearly everything the organisation does. Every day, all divisions depend on technology, and the Information Services (IS) division, to collect and supply life-saving blood products.

business Partnerships

The team manages the engagement between the IS division and the business to maximise alignment of IS services with business needs. Business Partnerships assess our technology requirements and evaluate our capacity to deliver them, while managing relationships with external regulatory agencies and professional organisations.

Strategy and Governance

The team is responsible for driving the development and implementation of the Information Communication Technology (ICT) strategy. They provide consistent commercial and vendor management guidance, identify and implement IS service improvements and oversee IS financial, security, audit, risk and compliance matters.

Project Services

Project Services manage and coordinate the portfolio of projects across applications and infrastructure via a team of skilled project managers, business analysts, solution architects and validation specialists. They provide direction and support to ensure project issues are identified and remediation activities are implemented promptly.

Enterprise Systems

Enterprise Systems manage the design, development, maintenance and support of organisation-wide enterprise applications. This team has extensive expertise in application configuration, system testing, software development, data warehouses, system integration and database management.

Operations

This team oversees Business As Usual (BAU) operations across all our IT infrastructure and telecommunication services to ensure our corporate applications remain available, secure and perform to expectations. They also provide support services for all our end-user technology needs via the IS service desk and onsite services teams. The team leads the IS response for IT incidents and also ensures our disaster recovery systems and procedures are routinely tested.

14.0

INFORMATION SERVICES

MR MARk GARDINER

EXECUTIVE DIRECTOR, INFORMATION SERVICES AND CHIEF INFORMATION OFFICER

Every day, the Blood Service depends on technology, and the Information Services (IS) division, to support the organisation’s life-saving work.

This year, a new IS structure has been established to better position the division to respond to business needs, challenges and opportunities. “Our renewed structure is underpinned by a focus on a cycle of assessment, objectives, change process and metrics to measure success,” Executive Director, Mark Gardiner, said. “It allows us to deliver smarter IT solutions by maintaining momentum in an iterative way, while staying adaptable to the changing needs of the organisation. This is fundamental to an outcomes-orientated delivery model.”

Given the Blood Service’s reliance on IT systems for sustainability, the division has continued to focus on their disaster recovery capabilities by replicating the possible effects of a system outage. A major achievement, IS successfully switched from the National Blood Management System’s primary system to the secondary environment for one week to ensure, in the event of a failure, our vital systems can be accessed. “With only one system for Australia, it was critical that we introduced this controlled risk to ensure our systems and data are protected in the event of an outage,” Mr Gardiner said. “We wanted to prove that we could run production of the whole organisation – every piece of functionality that we’d normally have – with no negative impact. I’ve worked in IT for 30 years and I’ve never been in an organisation that’s actually done that for an entire week.”

Along with a software upgrade, a disaster recovery program was also successfully deployed for the Blood Service’s Financial and Asset Inventory Management System (FAIMS).

To facilitate business capabilities, the division awarded two significant contracts this year – one to Telstra and the other to Datacom – to assist in delivering technological solutions. “We’re working with external partners to procure outcomes, rather than purchasing components that need to be internally assembled,” Mr Gardiner said. “With 400 file servers, 3,500 desktop computers, 55 enterprise applications, and 1,000 calls to the IS service desk each week, our external partners facilitate business capability and augment some of the work in delivering technology solutions.”

The division also delivered an infrastructure and technology upgrade to the Blood Service’s data warehouse and source of truth for all business data, CIMAR. More than 20 applications feed into, and draw information from the warehouse, with the data being used for reporting and analysis to inform business decisions. IS invested $1.2 million for the upgrade to meet current and future data requirements.

The division has also implemented further enhancements to the National Contact Centre (NCC) systems to improve the donor experience. This year, the division created a software solution for the Decision Support System (DSS) to improve our agents’ abilities in determining the eligibility of our donors to make an appointment to donate. It automates the decision process so a greater number of queries are addressed at first contact.

In addition, the division also rolled-out other significant projects to enhance operational efficiencies. Two modules of the Incident and Quality (IQ) Management System, a system to replace the existing paper-based incidents and quality management processes were implemented, with the remaining modules deployed to the production environment and Microsoft Lync, an instant messaging tool, was also deployed this year.

“It’s been a really good and challenging year and we’re in a much better place than we were 12 months ago in the way we deliver and how we support the existing IT systems,” Mr Gardiner said. “The Blood Service has a fantastic appetite for process improvement and that’s why it’s an exciting place to be a Chief Information Officer, because you’re right in the thick of it – a lot of that change is technology enabled.”

A lot of change is technology enabled.

We deliver IT and data systems that support business performance 24/7, 365 days per year.

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The Manufacturing division receives the blood collected by Donor Services and transforms it into finished goods, able to be used by our customers. There are many steps involved in this transformation – testing, processing, inventory management, irradiation and distribution. The division takes pride in delivering the right products to the right place at the right time, in an efficient and reliable manner.

Regional Manufacturing

Our processing centres in Brisbane, Sydney, Perth and Melbourne, (and a small amount in Darwin) and our 10 inventory depots manufacture and distribute components to customers. Regional Manufacturing teams are arranged into the following three functions:

Customer Service Delivery The team is the primary link to customers throughout Australia. They receive and dispatch orders, manage inventory, and manage the relationship locally.

Production

The Production team is made up of testing and processing. The production function is high volume, with over 8,000 units being transformed into finished goods each day.

Manufacturing Services This team maintains the efficient running of processing centres on a day-to-day basis including ensuring environmental and temperature monitoring and management and general facilities management.

National Manufacturing

The national teams provide the necessary strategy and policy to the regional processing teams. The teams comprise:

National Supply Chain

The team oversees planning, inventory management, logistics and customer service to ensure demand, supply and related products and services are delivered in a reliable and efficient manner. The team also manages strategic projects such as feasibility of Radio Frequency Identification (RFID) and vision systems to reduce errors.

National Production and Development This team is responsible for processing, testing, scientific and technical services, red cell reference and process control functions.

National Lean Manufacturing

The team is responsible for implementing a culture of continuous improvement by coordinating lean and Rapid Improvement Events (RIEs). This group also drives productivity and asset utilisation.

15.0

MANUFACTURING

MS JACQUI CAULFIELD

EXECUTIVE DIRECTOR, MANUFACTURING

It’s been an incredible year for Manufacturing, according to Executive Director, Jacqui Caulfield. With great strides made, it’s been the year that’s positioned the division to pursue the goal of becoming a great manufacturer.

The implementation of the first phase of the Manufacturing Laboratory Improvement Project (MLAB) is a major achievement. MLAB enables the division to become a great manufacturer by applying a standardised approach to the way we work, with a focus on working smarter and taking pride in delivering the right products to the right place at the right time. “MLAB was first considered as a concept 10 years ago and I’m really pleased that the structural aspects of this change program are now in place,” Ms Caulfield said. “We will now be able to embed a continuous improvement culture and improve employee engagement by having the right people in the right roles.

“While change is always part of a continuous improvement culture, we’ve really focused on ensuring that all staff have adjusted and feel comfortable as we embed the new processes and protocols,” Ms Caulfield said. “There’s always time to ask questions and ask for training.”

The change program instils a culture of continuous improvement. “Great manufacturers are always looking to improve the business and are always looking for better and simpler ways of doing things. I’m so proud of Manufacturing and I know we’re well and truly on the road to becoming a great manufacturer,” Ms Caulfield said.

This idea of continually looking for ways to improve processes and eliminate waste, while maintaining safety and quality, has been applied on the manufacturing floor through Rapid Improvement Events (RIE). The short workshops with frontline staff are designed to improve processes to increase efficiency and promote reliable practices. “RIEs are about enabling our staff to work smarter and to remove unnecessary processes,” Ms Caulfield said. “The way you do that is by asking what causes frustration, and then you take those things out. It’s about building engagement at the frontline.”

Lean awareness training has also been introduced for all Manufacturing staff, as well as being incorporated into induction packs, to facilitate the focus on continuous improvement.

The division has also implemented new blood bags this year. The collaborative project comes as part of the Blood Service’s involvement in a Eurobloodpack tender process, which will deliver significant cost and process efficiency savings. “We took advantage of being part of a bigger international network and as a result, we’ve reduced the cost of a significant consumable material,” Ms Caulfield said. “This transition is about business continuity and risk mitigation. Previously, if we had a problem, there wasn’t another blood pack we could use. Now, we have the same packs as our international partners, so it means we’re in safer hands for the security of supply.”

Another highlight has been the in vitro diagnostic (IVD) compliance project. “This is the quiet achiever,” Ms Caulfield said. Under new regulatory requirements, all commercial and in-house IVD medical devices used in Australia need to be registered with the Therapeutic Goods Administration (TGA), having met strict quality and safety requirements. “It’s brought about standardisation and we’re in the process of replacing many of our high-risk in-house IVDs with commercially available IVDs, which has seen us go to market for commercial products.”

“We’ve achieved so much and I can’t imagine that we’ll have another year this big and successful,” Ms Caulfield said. “I’m so proud of Manufacturing and they should be proud of themselves, because they’ve done a magnificent job. They’re just fantastic.”

Our customer satisfaction rate improved to 8.7 out of 10.

out of

Great manufacturers are always looking to improve the business and are always looking for better and simpler ways of doing things.


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16.0

MEDICAL, TRANSPLANTATION AND QUALITY SERVICES

The Medical, Transplantation and Quality Services division supports the Blood Service by providing medical, transplantation, quality and regulatory services.

Medical Services

Regional Medical Services The team supports collections and the National Contact Centre with donor eligibility queries, and oversees donor safety. They provide staff health services including vaccination and support transfusion medicine alongside our specialists.

Donor and Product Safety Policy unit The team maintains our donor safety policies, develops new safety initiatives and plans for blood product safety improvements consistent with international best practice and regulatory requirements.

Transfusion Practice and Education The team plays a lead role in the implementation of government, patient blood management and transfusion-related policy and governance. They support optimal outcomes for patients through education and practice change.

Medical Specialist Services Medical specialists advise on transfusion practice and patient blood management. They also inform strategy and policy development. Pathologists provide laboratory oversight of all testing laboratories to meet regulatory requirements.

Transplantation Services

The team performs testing for patients needing transplants and specialised neonatal and transfusion investigations. They provide 24/7 testing and cross-matching for the national deceased organ donor program, compatibility testing for living organ and bone marrow donors, and cord blood searching and testing for potential stem cell transplants.

Affiliated Agencies and External Services

Affiliated Agencies The team manages several affiliated agencies and entities, which are subject to a range of contractual arrangements with government and other external public bodies,

including DonateLife Victoria and Tasmania and the Australian Bone Marrow Donor Registry (ABMDR).

External Services This team works in partnership with the Corporate Strategy and Performance division and other stakeholders across the business to provide and maintain oversight of existing business lines, manage relationships with external customers and investigate business opportunities.

Quality Services

Quality Systems Development The team is responsible for the management of national quality management systems and processes.

Quality Business Support The team supports the business in meeting regulatory obligations and the implementation of the quality management system.

Quality Systems Delivery The team supports the quality systems, including validation, product recall, internal audits, vendor assurance and document control.

Regulatory Affairs The team manages the relationship with the Therapeutic Goods Administration, monitors regulations and maintains the Blood Service Technical Master File.

DR JOANNE PINk

EXECUTIVE DIRECTOR, MEDICAL, TRANSPLANTATION AND QUALITY SERVICES AND CHIEF MEDICAL OFFICER

The Medical, Transplantation and Quality Services (MTQS) division has celebrated significant achievements this year, benefiting our donors and patients across the country.

Transplantation Services teams perform a pivotal role in the testing and matching for organ transplantation. In addition to the increase in deceased organ donors - 58 per cent over the last four years - the laboratories were involved in Australia’s largest living kidney patient and donor transplant procedure conducted under the Australian Paired Kidney Exchange program. “For the six-way procedure, significant testing and cross-matching was needed to enable compatibility and a successful outcome,” Chief Medical Officer, Dr Joanne Pink, said. “Achieving transplants for patients on the organ waiting lists is a very rewarding program to be involved in.”

In line with structural changes in Manufacturing, MTQS also implemented a new structure for our Quality team to facilitate national consistency and align resources to support the changing needs of the Blood Service. “It will see the right people with the right skills, working in the right location,” Dr Pink said. In addition, enhanced pathologist oversight arrangements were implemented to meet new regulatory requirements and national practice standards for testing laboratories. These changes have also strengthened the relationship between pathologists and laboratory staff.

The division has implemented improvements to its quality management system, which has led to a number of effective initiatives to reduce the chance of supplying a blood component with an incorrect label. This included enhancements to staff training and procedures, changes to the labelling requirements for irradiated blood components and the introduction of coloured donor identification numbers.

Platelet quality and safety has improved in recent years with the introduction of routine bacterial contamination testing, improved manufacturing methodologies and better platelet nutrient storage solutions. This has led to several European countries extending the shelf-life of platelets from five to seven days. This year, the division led an evaluation of the bacterial safety and clinical efficacy of extended platelet storage to seven days, which took into consideration locally generated and international data.

This change would reduce platelet wastage, allow for more flexible inventory management and improve platelet availability for specific blood groups. The recommendation for extending platelet storage has been submitted to the Therapeutic Goods Administration.

Decision Support Software (DSS) was also successfully deployed in the National Contact Centre. Implemented to enhance the donor experience by enabling staff to respond to a broader range of donor eligibility inquiries, without the need to transfer calls to Medical Services for assessment, the software was the result of collaboration between the MTQS, IS and Donor Services divisions.

The Transfusion Practice and Education team also designed and delivered innovative initiatives with the aim of improving the transfusion medicine knowledge of staff as well as clinicians and scientists in the blood sector. “We launched a new transfusion.com.au resource centre, along with several apps including a fact sheet library, a blood volume calculator and games to assist in learning about blood groups,” Dr Pink said. In addition, 34 webinars, the annual Transfusion Update conference and a new workshop aimed at pre- examination laboratory haematology registrars were delivered.

To ensure eligibility criteria for blood donation is based on the best available evidence, the division has commissioned an external expert review of the validity of permanent deferrals for donors with a history of injecting drugs. A report is due in 2015. Two pilot studies, which will run until 2016, have also been designed to determine the value of iron replacement in female donors of child-bearing age.

“It’s been a very successful year for MTQS,” Dr Pink said. “It’s great working with a team that is so passionate and professional and I couldn’t be prouder of what we have achieved.”

In 2013/14 we performed over 55,000 tests and generated over $1.3 million in revenue from external customers.

55,000

This year, the division led an evaluation of the bacterial safety and clinical efficacy of extended platelet storage to seven days.


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17.0

RESEARCH AND DEVELOPMENT

The Research and Development division’s aim is to conduct world-class research that informs the Blood Service’s core activities. Underpinned by a robust business plan, it focuses on building relationships with current and future donors, maintaining the safety and quality of blood products, enhancing knowledge of transfusion and improving practice. A strong emphasis is placed on translational research that could ultimately lead to improved operational procedures or changes in clinical practice.

Applied and Developmental Research

Applied and Developmental Research focuses on evaluating novel technologies that have the potential to improve the quality and safety of products manufactured by the Blood Service. It also aims to improve operational efficiencies and donors’ wellbeing. Research teams work closely with aligned Blood Service divisions and other leaders in transfusion technology and research.

Clinical Research

Clinical Research works to ensure the safety, efficacy and appropriate use of blood products through direct participation and/or collaboration with other research groups in human clinical trials, development, analysis and linkage of clinical registries and other blood product patient-related research.

Donor and Community Research

This research focuses on ensuring there are adequate collections to meet clinical demand. It examines donor safety, retention, recruitment, motivation and community attitudes to blood and plasma donation. The major aim of the program is to provide research outcomes that contribute to marketing campaigns, organisational policies and broader public health issues to promote an appropriate increase in donations.

Planning and Support

This team provides management and administrative support to the Research and Development division with the aim of enhancing our research programs through the provision of project management and business planning, reporting and management support, contract advisory services and the development of new processes and procedures.

Transfusion Science Research

This team aims to generate knowledge using leading-edge research, which can be translated into improved operational procedures or changes in clinical practice. Research areas include, but are not restricted to, physiology of the reticuloendothelial and circulatory systems, including regulation of cellular function and the coagulation system, transfusion pathophysiology (including immunobiology) and molecular diagnostics.

PROFESSOR DAVID IRVING

EXECUTIVE DIRECTOR, RESEARCH AND DEVELOPMENT

The Research and Development division has had a stellar year. Punctuated by milestone achievements that have driven improvements in the Blood Service and the blood and health sectors, there’s been a strong focus on aligning research with strategic goals and translating research into changed business practice.

This year, the division’s research projects have shifted into strategically-focused themes, which closely link to broader Blood Service objectives. “Modern research methodologies change and there’s a strong move towards interdisciplinary research and the need to have critical mass in teams working on research problems,” Executive Director, Professor Irving, said. “We’ve re-organised our division and focused transfusion science research into Brisbane, applied and developmental research into Sydney and we’re looking to build our clinical and donor research in Melbourne.”

The Research Advisory Committee has also been strengthened through the addition of three internationally recognised blood research experts. “One of our aims has been to increase the significance and value of our research internally and internationally,” Professor Irving said.

The division has also translated research into strong operational outcomes.

The supply of a process for preparing deep frozen red cells and plasma for the Australian Defence Force (ADF) was a significant achievement – the outcome from over five years’ research. The work extends the shelf-life of blood components to up to 10 years by adapting technologies in freezing and thawing blood components. This will provide the ADF with life-saving blood components when deployed in remote locations or austere environments where fresh components are difficult to access. “We’ve managed to translate our findings from the laboratory into the manufacturing arena and subsequently into the field with the ADF to help save the lives of those working on the frontline,” Professor Irving said. “This has been a real milestone. It’s the culmination of a great team effort over the past five years to what are now potential new products.”

This year, Blood Service researchers also contributed to world-class genotyping research by identifying two new

clinically significant antigens - Sarah and Kip - that are now classified in the MNS blood group system. “This is clarification of a discovery made many years ago where the antigens were first observed during an incompatible blood transfusion,” Professor Irving said. “Using state-of-the-art gene sequencing technology, we’ve been able to narrow that discovery down to specific changes in particular blood group antigens, which explains the reason for the incompatibility so many years ago. The discovery will essentially reduce the problems of incompatible transfusion by improving matching and reducing the risk of transfusion reactions.”

The division has built on long-term research partnerships by collaborating with leading research groups at the University of Queensland and The Prince Charles Hospital to investigate the link between blood components’ storage conditions and Transfusion-Related Acute Lung Injury (TRALI). Patients with TRALI have breathing difficulties and low blood oxygen following a transfusion. Using sheep as a model to mimic the human condition, this research aims to understand the mechanisms of TRALI and ultimately reduce its incidence.

“We’ve been looking at blood component storage conditions and seeing how stored components behave in the sheep model,” Professor Irving said. “If you understand what causes TRALI, steps can then be taken to minimise the risk that may arise from the constituents of the stored blood component when transfused.”

“We’ve had a year of change and consolidation, but we’ve had a good year in terms of translating research we’ve been doing into outcomes and being recognised nationally and internationally for our work,” Professor Irving said. “It’s been excellent!”

One of our aims has been to increase the significance and value of our research internally and internationally.

In 1665 the first successful blood transfusion was recorded, but it was performed on a dog, not a human.

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48-49

OUR FINANCES

Our strong financial management has continued to deliver to

governments better value for money.

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18.0

FINANCE REPORT From the Chief Executive and Chief Financial Officer

SUMMARy

* The 2013 surplus for the year has been restated due to the de-recognition for plasma and fractionated product held at CSL Behring, as well as domestic fractionated product held at the Blood Service.

2014 $’000 2013 $’000

Surplus of Main Operating Program (retained) 5,035 3,608

Surplus of capital programs 50,053 46,676

Surplus of external and hosted services 3,367 1,050

Surplus on processing centre programs 8,575 7,287

Depreciation charge (43,665) (45,375)

Provision for employee entitlements (3,273) (4,031)

Gain/(loss) on disposal of non-current assets and foreign exchange 544 (639)

Increase in blood and blood product inventory 4,582 2,286

Movement in defined benefits (385) 8,613

Surplus including other comprehensive income for the year * 24,833 19,475

The Blood Service has finished the year with a surplus including other comprehensive income of $24.8 million. This included a retained surplus on the Main Operating Program of $5.0 million (after the return of $40.4 million to the National Blood Authority), $6.4 million surplus of capital funding received (net of depreciation) and $13.4 million surplus from other activities such as external and hosted services, and processing centre upgrade contributions.

The Main Operating Program surplus for the year was $45.4 million of which $40.4 million will be returned to the funding agency of the program, which is the National Blood Authority (NBA). This leaves an audited surplus in the Main Operating Program of $5.0 million, which will be added to the Corporate Risk Reserve.

The operating surplus is the result of a number of factors.

Comparison of 2014 and 2013 results is as follows:

- Total income increased by $6.0 million or one per cent from the prior year with $3.1 million increase in non-government income generated from hosted and external services, such as the Cambodia project, and $3.6 million attributable to increased receipts of capital funding to facilitate an expanded capital expenditure program. Within the Main Operating Program, total income reduced by $0.5 million due to the continued reduction in red cell demand, partially offset with increased supply of plasma for fractionation

- Total expenses decreased by $5.7 million or one per cent from the prior year. The reduction in red cell demand has led to savings across variable expenses such as consumables and marketing activities as fewer new donors were required

- 2014 was the first year of a new funding arrangement with the NBA. One of the key changes during this year was the recognition, through separate prices, of the higher cost of producing plasma through apheresis compared to whole blood. Given the continued reduction in red cell demand during 2014, the Blood Service was able to recover a higher price for plasma produced than in previous years where an average price had been set

- The Blood Service has made a number of significant structural changes over the past few years which have resulted in savings flowing to the bottom line. One of the key changes was the closure of South Australian manufacturing centre with this work transferring to the new Melbourne Processing Centre. The significant annual savings from this change will remain in the Blood Service bottom line until the new funding cycle starts in 2017, and

- Workforce initiatives, specifically the realignment of the workforce in Donor Services and Manufacturing, have delivered significant financial savings.

Output based Funding Model (ObFM)

2010/11 surplus $19.2 million with $14.2 million returned to government

2011/12 surplus $6.2 million with $3.6 million returned to government (plus $4.75 million once off reduction in prices)



2010/11

$19.2

$14.2

2011/12

$6.2

$3.62012/13

$12.5

$8.9

2013/14

$45.4

$40.4

3 per cent of the Australian population donates blood each year.Our contact centre in Adelaide makes over 4 million forms of contact with donors every year.

4+ million


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52-53







ScaleMin DotScreen

Job no.Software

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Australian Red Cross Blood Service

20 Jun 2014 DaWh 1 094-07-Handwritten-Messages.ai

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-07100%

IVy HAS AN IMMUNE DEFICIENCy WHICH MEANS HER bODy CAN’T FIGHT COMMON INFECTIONS. SHE RECEIVES bLOOD PRODUCTS EVERy THREE WEEkS.

18.0

FINANCE REPORT contd From the Chief Executive and Chief Financial Officer

Capital

The capital program was a major focus for the year with a total spend of $51.4 million, which is a 33 per cent increase on 2013. This has been driven through improvements in the capital allocation and funding request process as well as the centralisation of the Property team within Finance which has enabled a systematic and consistent approach to donor centre improvements. The capital program was also used to invest in the upgrade of key information systems, such as the Financial and Asset Inventory Management System (FAIMS) and building our IS disaster recovery capabilities.

Accounting changes

The Blood Service has also de-recognised inventories in 2014 for plasma and fractionated product held at CSL Behring, as well as domestic fractionated product held at the Blood Service. This has resulted in a $54.9 million reduction in blood inventory that has been applied against retained earnings as a change in accounting policy for statutory reporting purposes. This adjustment has been treated as a voluntary change in accounting policy after an assessment of current inventory accounting policies against the Output Based Funding Model adopted in the Main Operating Program. The inventories that have been de-recognised are no longer considered assets of the Blood Service due to the absence of control and risk associated with these products.

O negative is universal and can be given to anyone. In 1985 we started to screen for Human Immunodeficiency Virus (HIV).

HIV

1985


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ANNUAL REPORT 2013 / 14 57-57

ANNUAL FINANCIAL

STATEMENTSFor the year ended 30 June 2014

54-55

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2014 2013

Notes $’000 $’000 FOR THE YEAR ENDED 30 JUNE 2014

ASSETSCURRENT ASSETS

Cash and cash equivalents 18.2 236,605 206,898 190,911

Trade and other receivables 7 9,939 8,506 7,128

Inventories 8 19,918 14,555 11,836

Total current assets 266,462 229,959 209,875

NON-CURRENT ASSETS

Property, plant and equipment 9 341,549 336,637 345,288

Total non-current assets 341,549 336,637 345,288

TOTAL ASSETS 608,011 566,596 555,163

LIAbILITIESCURRENT LIAbILITIES

Trade and other payables 10 39,837 44,645 41,655

Borrowings 11 9,193 9,011 7,993

Provisions 12 53,521 50,134 46,193

Prepaid government funds 13 86,516 60,019 58,529

Other liabilities 14 543 431 420

Total current liabilities 189,610 164,240 154,790

NON-CURRENT LIAbILITIES

Borrowings 11 70,474 79,666 88,624

Provisions 12 12,477 12,205 11,775

Retirement benefit plan obligations 15 6,703 6,318 14,931

Other liabilities 14 3,503 3,756 4,107

Total non-current liabilities 93,157 101,945 119,437

TOTAL LIAbILITIES 282,767 266,185 274,227

NET ASSETS 325,244 300,411 280,936

EQUITy

General reserve 16.1 202,404 190,201 189,456

Special reserve 16.2 57,973 55,078 48,165

Capital reserve 16.3 64,867 55,132 43,315

TOTAL EQUITy 17 325,244 300,411 280,936

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

2014 2013 2012

Notes $’000 $’000 $’000 (restated) (restated)

As AT 30 JUNE 2014

REVENUE Government funding

Operating – Commonwealth funded 489,474 487,669

Operating – State funded 18,665 17,276

Capital – Commonwealth and State funded 52,966 51,596

Total government funding 561,105 556,541

Interest income 8,108 8,179

Other income 12,043 10,506

Total revenue 6.2 581,256 575,226

EXPENDITUREStaff expenses 5 290,422 285,879

Consumables 101,640 103,680

Overheads 126,046 129,103

Depreciation 43,665 45,375

(Gain)/Loss on disposal of non-current assets (558) 652

Loss/(Gain) on foreign exchange 14 (13)

Increase in blood and blood product inventory 8 (4,582) (2,286)

Total expenditure 5 556,647 562,390

SURPLUS FOR THE yEAR 6.3 24,609 12,836

Items that may be reclassified subsequently to profit or loss:

Actuarial gain/(loss) on retirement benefit plan obligations 15.5 224 6,639

224 6,639

Other comprehensive income/( loss) for the year 224 6,639

TOTAL PROFIT AND OTHER COMPREHENSIVE INCOME FOR THE yEAR* 24,833 19,475

*ANALySIS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOMESurplus of Main Operating Program 5,035 3,608

Surplus of Capital Programs and Processing Centre Programs (net of depreciation) 14,963 8,588

Surplus on External and Hosted Services 3,367 1,050 Movement in blood inventories, employee provisions, actuarial gain/loss on retirement benefit obligations

924 6,868

Gain/(Loss) on disposal of non-current assets 558 (652)

(Loss)/Gain on foreign exchange (14) 13

TOTAL PROFIT AND OTHER COMPREHENSIVE INCOME FOR THE yEAR 24,833 19,475

The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.

56-57ANNUAL REPORT 2013/14

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

STATEMENT OF FINANCIAL POSITION

(restated)

19.0

ANNUAL FINANCIAL STATEMENTS

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General Reserve

Special Reserve

Capital Reserve

Total

Notes $’000 $’000 $’000 $’000 FOR THE YEAR ENDED 30 JUNE 2014

2014 2013

Notes $’000 $’000 FOR THE YEAR ENDED 30 JUNE 2014

CASH FLOWS FROM OPERATING ACTIVITIES Receipts from government and other sources (inclusive of goods and services tax) for:

- Main Operating Program 572,200 576,795

- Capital Programs 58,262 56,755

Payments to suppliers and employees (inclusive of goods and services tax) (545,071) (572,970)

Net cash inflows from operating activities 18.1 85,391 60,580

CASH FLOWS FROM INVESTING ACTIVITIES Payments for property, plant and equipment 9 (48,382) (38,031)

Proceeds from sale of property, plant and equipment 363 655

Interest received 8,108 8,179

Net cash outflows from investing activities (39,911) (29,197)

CASH FLOWS FROM FINANCING ACTIVITIESInterest paid (6,748) (7,470)

Repayment of borrowings (9,011) (7,939)

Net cash outflows from financing activities (15,759) (15,409)

Net increase in cash and cash equivalents 29,721 15,974

Cash and cash equivalents at the beginning of the financial year 206,898 190,911

Effect of exchange rate changes on cash held in foreign currencies (14) 13

CASH AND CASH EQUIVALENTS AT THE END OF THE FINANCIAL yEAR 18.2 236,605 206,898

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

balance at 1 July 2012 (Previously stated) 232,681 48,165 43,315 324,161 Adjustments 4.3.2 (43,225) - - (43,225)

balance at 1 July 2012 (Restated) 189,456 48,165 43,315 280,936

Surplus for the year 12,836 - - 12,836

Components of defined benefit gains recognised in other comprehensive income

6,639 - - 6,639

Total comprehensive income for the year 19,475 - - 19,475

Transfer between reserves (18,730) 6,913 11,817 -

balance at 30 June 2013 (Restated) 16, 17 190,201 55,078 55,132 300,411

Surplus for the year 24,609 - - 24,609

Components of defined benefit gains recognised in other comprehensive income

15.5 224 - - 224

Total comprehensive income for the year 24,833 - - 24,833

Transfer between reserves (12,630) 2,895 9,735 -

balance at 30 June 2014 16, 17 202,404 57,973 64,867 325,244

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


STATEMENT OF CHANGES IN EQUITY

STATEMENT OF CASH FLOWS

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1. GENERAL INFORMATION

The Australian Red Cross Blood Service (the Blood Service) is a division of the Australian Red Cross Society (the Society) which is a not-for-profit entity. The Society is an entity incorporated in Australia by Royal Charter and is a member of the International Federation of Red Cross and Red Crescent Societies.

The Blood Service is domiciled in Australia, with its corporate office at 417 St Kilda Road, Melbourne, Victoria and operates in all States and Territories. The principal activity of the Blood Service is the provision of quality blood products, tissue typing and related services for the benefit of patients. The Blood Service operates four main processing and testing facilities plus a network of collection centres in metropolitan and regional areas across Australia. The Blood Service is funded for this activity by the Commonwealth, State and Territory governments under a Deed of Agreement (the Deed) administered by the National Blood Authority (NBA).

2. APPLICATION OF NEW AND REVISED ACCOUNTING STANDARDS

2.1 Standards and Interpretations affecting amounts reported and/or disclosures in the financial statements of the current period (and/or prior periods)

The following new and revised Standards and Interpretations have been applied in the current period.

Standards and Interpretations affecting the reported results or financial position

AASb 119 ‘Employee benefits’ (2011), AASb 2011-10 ‘Amendments to Australian Accounting Standards arising from AASb 119 (2011)’ and AASb 2011-11 ‘Amendments to AASb 119 (September 2011) arising from Reduced Disclosure Requirements’

AASB 119 changes the accounting for defined benefit plans and termination benefits. The most significant change relates to accounting for changes in defined benefit obligations and plan assets. The amendments require the recognition of changes in defined benefit obligations and in the fair value of plan assets when they occur, and hence eliminate the ‘corridor approach’ permitted under the previous version of AASB 119 and accelerate the recognition of past service costs. All the actuarial gains/losses are recognised immediately through other comprehensive income in order for the net pension asset/liability recognised in the consolidated statement of financial position to reflect the full value of the plan deficit/surplus. Furthermore, the interest cost and expected return on plan assets used in the previous version of AASB 119 are replaced with a ‘net interest’ amount, which is calculated by applying the discount rate to the net defined benefit liability/asset. These changes have had an impact on the amounts recognised in profit or loss and other comprehensive income in prior years. Additionally, AASB 119 introduces certain changes in the presentation of the defined benefit cost including more extensive disclosures. The prior years’ results and the position of the Blood Service has been restated as a result of adopting these pronouncements (see note 4.2).

The application of the standard has resulted in the discounting of the long term employee benefits in the current financial year. There has been no material change due to the adoption of this standard in the retrospective periods in relation to this amendment.

2.2 Standards and Interpretations in issue but not yet effective

At the date of authorisation of the financial statements, the Standards and Interpretations listed below were in issue but not yet effective. The adoption of these Standards and Interpretations may have an impact on future financial reports.

Standard/Interpretation Effective for annual reporting periods

beginning on or after

Expected to be initially applied in the financial

year ending

AASB 9 ‘Financial Instruments’, and the relevant amending standards 1 January 2017 30 June 2018

AASB 1031 ‘Materiality’ (2013) 1 January 2014 30 June 2015

AASB 2012-3 ‘Amendments to Australian Accounting Standards – Offsetting Financial Assets and Financial Liabilities

1 January 2014 30 June 2015

AASB 2013-9 ‘Amendments to Australian Accounting Standards-Conceptual Framework, Materiality and Financial Instruments’

1 January 2014 30 June 2015

The directors anticipate the application of these standards and interpretations in future periods will have no material impact on the financial statements of the Blood Service.

FOR THE YEAR ENDED 30 JUNE 2014


NOTES TO THE FINANCIAL STATEMENTS

Standards affecting presentation and disclosure

AASb 2012-5 ‘Amendments to Australian Accounting Standards arising from Annual Improvements 2009-2011 Cycle’

The Annual Improvements to AASBs 2009-2011 have made a number of amendments to AASBs. The amendments that are relevant to the Blood Service are the amendments to AASB 101 regarding when a statement of financial position as at the beginning of the preceding period (third statement of financial position) and the related notes are required to be presented. The amendments specify that a third statement of financial position is required when

a) an entity applies an accounting policy retrospectively, or makes a retrospective restatement or reclassification of items in its financial statements, and

b) the retrospective application, restatement or reclassification has a material effect on the information in the third statement of financial position.

The amendments specify that related notes are not required to accompany the third statement of financial position.

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3. SUMMARy OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies adopted in the preparation of the financial report are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated

3.1 Statement of compliance

For the purposes of these financial statements, the Blood Service is a not-for-profit entity. These financial statements are general purpose financial statements which have been prepared in accordance with the Australian Accounting Standards and Interpretations, and comply with other requirements of the law.Due to the application of Australian specific provisions for not-for-profit entities, this financial report is not necessarily compliant with International Financial Reporting Standards (IFRs).

The financial statements were authorised for issue by the Board of the Blood Service on 30 September 2014.

3.2 basis of preparation

The financial statements have been prepared on an accruals basis and are based on historical cost, except for the revaluation of certain non-current assets and financial instruments on which the fair value basis of accounting has been applied. Cost is based on the fair values of the consideration given in exchange for assets. All amounts are presented in Australian dollars, unless otherwise noted. The financial statements have been prepared on a going concern basis.

3.3 Critical accounting estimates and judgements

In the application of the Australian Accounting Standards and the Blood Service’s accounting policies, management is required to make judgements, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and judgements are based on historical experience and various other factors that are considered to be reasonable and relevant under the circumstances. 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 only that 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 Australian Accounting Standards that have significant effects on the financial statements and estimates with a significant risk of material adjustment to the carrying amounts of assets and liabilities within the next financial year are disclosed, where applicable, in the relevant notes to the financial statements.

3.4 Foreign currency translation

3.4.1 Functional and presentation currencyItems included in the financial statements of the Blood Service are measured using the currency of the primary economic environment in which the Blood Service operates (the functional currency). The financial statements are presented in Australian dollars, which is the Blood Service’s functional and presentation currency.

3.4.2 Transactions and balancesForeign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the surplus or deficit, except when they are deferred in equity as qualifying cash flow hedges.

3.5 Rounding of amounts

Amounts in the financial statements have been rounded off to the nearest thousand dollars ($’000) unless otherwise stated.

3.6 Property, plant and equipment

Property, plant and equipment is stated at historical cost less depreciation and any impairment losses. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Blood Service and the cost of the item can be measured reliably. The carrying amount of any replaced parts is derecognised. All other repairs and maintenance are charged to the surplus or deficit during the reporting period in which they are incurred.

Intangible assets with finite lives are carried at cost less accumulated amortisation and accumulated impairment losses. Amortisation is recognised on a straight-line basis over their estimated useful lives. The estimated useful life and amortisation method are reviewed at the end of each reporting period, with the effect of any change in estimate being accounted for on a prospective basis.

Depreciation is provided on property, plant and equipment, including leasehold buildings but excluding freehold land. Depreciation is calculated using the straight-line method to allocate cost or revalued amounts, net of their residual values, over their estimated useful lives. Depreciation rates applied in 2014 were:

Period Rate

Freehold buildings 40 years 2.5%

Leasehold improvements Shorter of lease period or useful life

Computer equipment 4 years 25.0%

Plant and equipment 5 - 10 years 10.0% - 20.0%

Leased furniture, fittings and equipment 10 - 20 years 5.0% - 10.0%

Motor vehicles 4 - 10 years 10.0% - 25.0%

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing the net proceeds with the carrying amount. These are included in the surplus or deficit. Both freehold buildings and leasehold improvements are presented as part of Land & Buildings category - see note 9.


NOTES TO THE FINANCIAL STATEMENTS contd

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3.7 Impairment of assets

At each reporting date, Blood Service management reviews the carrying values of property, plant and equipment to determine whether there is any indication that these assets have suffered an impairment loss. If any such indicators exist, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss, if any. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and ‘value in use’. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating units). Property, plant and equipment that suffered an impairment are reviewed for possible part or full reversal of the impairment at each reporting date.

Future economic benefits of the Blood Service’s assets are not primarily dependent on their ability to generate net cash inflows and if deprived of a particular asset, the Blood Service would replace the asset’s remaining future economic benefits. ‘Value in use’ calculations are therefore determined as the depreciated replacement cost of each asset, rather than by using discounted future cash flows.

Depreciated replacement cost is defined as the current replacement cost of an asset less, where applicable, accumulated depreciation calculated on the basis of such cost to reflect the already consumed or expired future economic benefits of the asset. The current replacement cost of an asset is its cost measured by reference to the lowest cost at which the gross future economic benefits of that asset could currently be obtained in the normal course of business.

3.8 borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of any qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use. Other borrowing costs are recognised in the surplus or deficit in the period in which they are incurred. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.

3.9 Leases

3.9.1 Finance leasesLeases of property, plant and equipment where the Blood Service has substantially assumed all the risks and rewards incidental to ownership are classified as finance leases - see note 9.2. Finance leases are capitalised at the lease’s inception at the fair value of the leased property or, if lower, at the present value of the minimum lease payments. The corresponding rental obligations to the lessor, net of finance charges, are included on the statement of financial position as a finance lease obligation. Each lease payment is allocated between the liability and the finance cost. The finance cost is charged to the surplus or deficit over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

The property, plant and equipment acquired under finance leases are depreciated over the shorter of the estimated useful life of the asset and the lease term.

3.9.2 Operating leases

Leases where the lessor retains substantially all the risks and benefits of ownership of the asset are classified as operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as the lease expense. Payments made under operating leases are recognised as an expense in the surplus or deficit on a straight-line basis over the lease term unless another systematic basis is more representative of the time pattern of the benefit gained from the lease

3.9.3 Lease incentives In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability. The aggregate benefits of incentives are recognised as a reduction 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 assets are consumed. The current amount refers to amounts to be recognised in the surplus or deficit within the 12 months after the reporting date. The non-current amount will be recognised in the surplus or deficit in subsequent financial years. Refer to note 14.

3.10 Inventories

Australian Accounting Standards require inventories of a not-for-profit entity to be measured at the lower of cost and current replacement cost, where current replacement cost is defined as the cost the entity would incur to acquire the asset on the reporting date. The Blood Service has the following categories of inventories:

3.10.1 ConsumablesConsumables are used by the Blood Service in providing products and services, and are measured at the lower of cost and current replacement cost. Consumables inventory has been valued at weighted average cost.

3.10.2 blood products (inventories held for distribution)Australian Accounting Standards define inventories held for distribution by a not-for-profit entity as assets where they display three essential characteristics as follows: (i) there must be future economic benefits; (ii) the entity must have control over the future economic benefits; and (iii) the transaction giving rise to the entity’s control over future economic benefit must have occurred.

The Blood Service provides products and services in accordance with the Deed. In the discharge of this agreement, the Blood Service is responsible for a range of activities, including collection, testing, processing, inventory management and distribution of blood and blood products. In this context, the Blood Service recognises certain categories of blood and blood products as current assets, to be measured at the lower of cost and current replacement cost. Cost comprises direct materials, direct labour and overheads of the operating divisions incurred in the collection, processing and testing of blood.

The Blood Service collects domestic raw plasma which is issued to CSL Limited (‘CSL’) for fractionation into manufactured products. Both domestic and imported fractionated plasma products are distributed by the Blood Service in Australia. In relation to blood products held for distribution, the Blood Service does not recognise plasma supplied to CSL for fractionation, fractionated product held at CSL and fractionated product at the Blood Service held for distribution. This is due to the retention of control and risk over these specific products by parties other than the Blood Service and the absence of future economic benefit under output based funding arrangements. The accounting policy changed in relation to certain categories of plasma during the year - see note 4.1.

The inventory valuation at the end of the reporting period includes:

- all fresh blood products and plasma for fractionation (not yet supplied to CSL) held at the Blood Service or at a Blood Service storage facility, and- all products held in ‘work in progress’ at the Blood Service. Fresh product volumes are physically counted and valued as individual units while products held in ‘work in progress’ are valued using the average supply quantity per day for June. All blood products are valued at direct costs plus operating overheads.



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3.11 Trade receivables

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest rate method, less provision for impairment. Trade receivables are generally due for settlement within 30 days.

Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be unrecoverable are written off. A provision for impairment of trade receivables is established when there is objective evidence that the Blood Service will not be able to collect all the amounts due according to the original terms of the trade receivables. Significant financial difficulties of the debtor are considered indicators that the trade receivable is impaired. The amount of the provision is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. Cash flows relating to short-term receivables are not discounted if the effect of discounting is immaterial. The amount of the provision is recognised in the surplus or deficit.

3.12 Cash and cash equivalents

For the statement of cash flows presentation purposes, cash and cash equivalents include cash on hand, deposits held at call with financial institutions, other short-term highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the statement of financial position.

3.13 borrowings

All borrowings are initially recognised at cost, being the fair value of the consideration received net of issue costs associated with the borrowing. After initial recognition, borrowings are subsequently measured at amortised cost using the effective interest rate method. Amortised cost is calculated by taking into account any issue costs and any discount or premium on settlement.

Gains and losses are recognised in the surplus or deficit when the liabilities are derecognised, as well as through the amortisation process.

Borrowings payable within 12 months are classified as current liabilities. Borrowings are classified as non-current where the Blood Service has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

3.14 Trade and other payables

These amounts represent liabilities for goods and services provided to the Blood Service prior to the end of the financial year which are unpaid. The amounts are unsecured and are generally due for settlement within 30 days of recognition.

3.15 Provisions

Provisions are recognised when the Blood Service has a present obligation (legal or constructive) as a result of past events, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the reporting date. The discount rate used to determine the present value reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense. Provisions include provisions for make good of property leases and employee benefits - see note 12.

3.15.1 Employee benefits 3.15.1.1 Short-term and long-term employee benefitsA liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave, and long service leave when it is probable that settlement will be required and they are capable of being measured reliably.

Liabilities recognised in respect of short-term employee benefits, are measured at their nominal values using the remuneration rate expected to apply at the time of settlement. The liability for annual leave and long service leave is recognised under provision for employee benefits - see note 12. All other short-term employee benefit obligations are presented as payables – see note 10.

Liabilities recognised in respect of long-term employee benefits are measured as the present value of the estimated future cash outflows to be made by the Blood Service in respect of services provided by employees up to the reporting date - see note 12.1. Expected future payments are discounted using market yields at the reporting date on national government bonds with terms to maturity and currency that match, as closely as possible, to the estimated future cash outflows. Consideration is given to future wage and salary levels, experience of employee departures and periods of service.

3.15.1.2 Termination benefits Termination benefits are payable when employment is terminated before the normal retirement date, or when an employee accepts voluntary redundancy in exchange for these benefits. A liability for a termination benefit is recognised at the earlier of when the entity can no longer withdraw the offer of the termination benefit and when the entity recognises any related restructuring costs. Benefits falling due more than 12 months after statement of financial position date are discounted to present value and classified as non-current.

3.16 Retirement benefit plan obligations

The Blood Service contributes to various staff retirement plans to provide employees with benefits on death or retirement. The defined benefit plans provide lump sum benefits based on years of service and final average salary.

Payments to defined contribution retirement benefit plans are recognised as an expense when employees have rendered service entitling them to the contributions.

For defined benefit retirement benefit plans, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding interest), is reflected immediately in the statement of financial position with a charge or credit recognised in other comprehensive income in the period in which they occur. Remeasurement recognised in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss. Past service cost is recognised in profit or loss in the period of a plan amendment. Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset - see note 15.

Defined benefit costs are categorised as follows:• service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements);• net interest expense or income; and• remeasurement.



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3.17 Income recognition

Income is measured at the fair value of the consideration received or receivable. Amounts disclosed as income are net of returns and rebates. The Blood Service recognises income in accordance with AASB 1004 ‘Contributions’ when: a) the Blood Service obtains control or the right to receive the contribution; b) the amount of the contribution can be measured reliably; and c) it is probable that the future economic benefits comprising the contribution will flow to the Blood Service.

Income is recognised for the following activities:

3.17.1 Output based fundingThe Blood Service recognises income for the delivery of products to Approved Health Providers on an accrual basis representing the right to receive contributions from the NBA. Under the Output Based Funding Principles, the Blood Service can apply to retain up to $5 million of any surplus for the purposes outlined in the Principles. If the annual surplus is more than $5 million in any year then the surplus over that amount will be returned to the NBA unless otherwise agreed between the Blood Service and the NBA. Any excess funds to be returned are recorded as a liability within Prepaid Government Funds (see note 13).

3.17.2 Government grantsGrants from governments (including capital grants) are recognised at their fair value where there is a reasonable assurance that the grant will be received and the Blood Service will comply with all attached conditions.

3.17.3 Interest incomeInterest is recognised as it accrues using the effective interest rate method, which is the rate that discounts estimated future cash receipts through the expected life of the financial instrument to the carrying amount of the financial asset.

3.17.4 Other incomeThe Blood Service receives other income, including research grants and revenue generated from the provision of some testing services and products and services on a fee-for-service basis. Income is recognised on an accruals basis.

3.18 Income tax

The Blood Service, being a division of the Society and a charitable organisation, is exempt from income tax under subsection 50.5 of the Income Tax Assessment Act 1997.

3.19 Goods and Services Tax (GST)

Revenues and expenses are recognised net of the amount of GST except where the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable.

Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statement of financial position.

Cash flows are included in the statement of cash flows on a gross basis and the GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority, are classified as operating cash flows.

Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.

3.20 Fair value estimation

The fair value of financial assets and financial liabilities are estimated for recognition and measurement or for disclosure purposes.

The fair value of forward exchange contracts is determined using forward exchange market rates at the statement of financial position date. The carrying value less impairment of trade receivables and payables are assumed to approximate their fair values due to their short-term nature. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the Blood Service for similar financial instruments.

3.21 Economic dependency

A significant portion of revenue is received by way of recurrent and capital grants from Commonwealth, State and Territory governments. As at the reporting date, terms of the Deed with the NBA have been extended to 30 June 2015. It is the Blood Service’s expectation that future funding arrangements will remain substantially unchanged beyond this date. Therefore, these financial statements are prepared on a going concern basis.



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4. CHANGE IN ACCOUNTING POLICy

4.1 Inventories

From 1 July 2013, the Blood Service has applied a change in accounting policy relating to the recognition of certain categories of blood product inventory. This change has affected the recognition and disclosure of inventories on the 2013-14 financial statements.

Inventories including plasma and fractionated product held at CSL Limited as well as domestic fractionated product held at the Blood Service have been derecognised from the beginning of the earliest period presented (1 July 2012). This change of policy was applied based on the assessment of the contractual control and risk retained by external parties under the relevant supply agreements as well as the timing of future economic benefits under the current output based funding model. Output based funding principles provide for the Blood Service to be directly funded for services supplied and funding income is recognised at the point at which product is supplied or distributed to either CSL or other Approved Health Providers (AHPs). This is in contrast to pre-2010 where funding income was based on fixed grant funding over discrete time periods. Management believe this change will better reflect the substance of transactions relating to inventories and therefore improve the relevance and reliability of the financial statements to the end user. The net impact on total comprehensive income in the current period is nil.

4.2 Retirement benefit plan obligationsDuring the year, amendments to AASB 119 required certain changes to the accounting for defined benefit plans, namely the full recognition of deficit (surplus) on the statement of financial position, introduction of net interest on the net defined benefit liability (asset), change in the presentation of the defined benefit cost and the introduction of more extensive disclosure requirements in the financial statements. The prior years’ reported balances were restated upon adoption of these changes.

4.3 Impact on prior year balancesAs a result of the changes in the accounting policies for inventories and defined benefit plan, prior year financial statements have been restated. The following table shows the adjustments recognised for each reported line item. Line items that were not affected by the change have not been included. As a result the sub-totals and totals disclosed cannot be recalculated from the numbers provided.

4.3.1 Impact on surplus (deficit) and other comprehensive income for year ending 30 June 2013

Blood and blood product inventory movement (11,629)

Increase in staff expenses (618)

Decrease in surplus for the year (12,247)

Increase in components of defined benefit gains recognised in other comprehensive income 618

Decrease in total profit or loss and other comprehensive income (11,629)

As at 01/07/2012

(previously stated)

As at 01/07/2012

(restated)Adjustment

Statement of financial position as at 1 July 2012 Notes $’000 $’000 $’000

Inventories 8 55,061 (43,225) 11,836

General reserve 16.1 232,681 (43,225) 189,456

As at 30/06/2013

(previously stated) Adjustment

As at 30/06/2013

(restated)

Statement of financial position as at 30 June 2013 Notes $’000 $’000 $’000

Inventories 8 69,409 (54,854) 14,555

General reserve 16.1 245,055 (54,854) 190,201

In July 2012 the reduction in inventory has been adjusted against the General reserve in equity. In June 2013 the reduction in inventory has been adjusted against the surplus for that year as an inventory expense. There was no impact on the statement of financial position for the restatement of the retirement benefit plan obligations.

4.3.3 Impact on statement of cash flowsThe change of accounting policy had no impact on the cash flow statement.

30/06/2013

$’000



4.3.2 Impact on statement of financial position

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2014 2013

Notes $’000 $’000

5. EXPENDITURE

The following expenses are included in the surplus for the year:

Wages and salaries 264,290 252,921 Superannuation guarantee 23,438 24,892 Components of defined benefit costs recognised in surplus/(deficit) 15.5 609 (1,974)

Termination benefits 2,085 10,040 Total staff expenses* 290,422 285,879

Cost of consumables 101,640 103,680

Other overheads 96,186 100,056

Workers compensation costs 2,737 2,611

Minimum operating lease payments 20,375 18,966

Interest and finance charges paid on finance leases 6,748 7,470

Depreciation expense 9 43,665 45,375




Total other expenses 266,225 276,511

Total expenditure 556,647 562,390

* Total employee benefits include non-capitalised expenditure for organisational restructure activities as follows:

- 2014: $1.170 million in redundancy provision for the Quality Services restructure and an additional $2.030 million disbursed for the Manufacturing Laboratory (MLAB) improvement restructure

- 2013: $3.466 million in redundancy provision for the consolidation of Donor Services administration support

(restated)

6. REVENUE AND RESULTS FROM FUNDED PROGRAMS

6.1 Funded programs

The Blood Service’s funded programs are as follows:

6.1.1 Main Operating ProgramThe NBA co-ordinates and funds, on behalf of the Commonwealth, State and Territory governments, national arrangements between the Blood Service and governments for the supply of blood and blood related products and services. These arrangements were formalised in August 2006 under the Deed between the NBA and the Australian Red Cross Society. The Deed has been extended by a series of variations to 30 June 2015. From 1 July 2010, in accordance with an amendment to the Deed, the Blood Service transitioned from being funded by the NBA on a grant basis to being funded on the basis of an Output Based Funding Model (OBFM). The OBFM applies to three year funding cycles, the second cycle covering the financial years 2013/14 to 2015/16.

6.1.2 Capital programsThe arrangement with the NBA provides for capital funding up to 10% of the Main Operating Program funding for the financial year. Capital funding is from State and Commonwealth governments and is recognised as revenue when the Blood Service obtains control of the grant funds.

Activities during the reporting period include minor ongoing building work improvements which have continued to be undertaken for the Melbourne Processing Centre (MPC) in 2013/14. The five year project for the refurbishment of Perth Processing Centre (PPC) commenced during the year, in addition to the relocation of several donor centres in Queensland, Western Australian and New South Wales. In Melbourne, the Blood Service National Office on St Kilda Road was expanded to further centralise functions into the national corporate divisions. In the domain of mobile collection vehicles, the construction of three new Donor Mobile Units (DMUs) was completed and they commenced operations. The donor centre brand refresh project concluded in 2013/14, resulting in consistent branding for the donor centre network nationally.

6.1.3 External and hosted servicesThe Blood Service also receives grants from the Commonwealth and State governments for the provision of transplantation services, tissue typing, organ donor program and the Bone Marrow Registry.

6.1.4 Other operating activitiesOther operating activities predominantly consists of special grant funding for repayments of borrowings on the Sydney and Melbourne Processing Centres. Interest revenue includes interest earned on Special and Capital Reserves and unallocated prior year surplus funds. Other external revenue was received from third parties and donations.



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2014 2013

Notes $’000 $’000

6.2 Revenues by programs

Revenue source $’000

Notes Government Interest Other Total2014Main Operating Program 6.1.1 477,108 4,998 2,581 484,687

Capital programs 6.1.2 52,966 1,643 554 55,163

External and hosted services 6.1.3 19,248 183 8,776 28,207

Other operating activities 6.1.4 11,783 1,284 132 13,199

Total revenues by programs 561,105 8,108 12,043 581,256

2013Main Operating Program 478,049 4,666 2,506 485,221

Capital programs 51,596 - (129) 51,467

External and hosted services 17,721 - 5,650 23,371

Other operating activities 9,175 3,513 2,479 15,167

Total revenues by programs 556,541 8,179 10,506 575,226

The current year government funding for the Main Operating Program of $477.108 million (2013: $478.049 million), is net of a provision to return $40.394 million (2013: $8.908 million) to the NBA.

2014 2013

Notes $’000 $’000

(restated)

6.3 Reconciliation of surplus for the year

Surplus of Main Operating Program 5,035 3,608

Surplus of Capital Programs and Processing Centre Programs (net of depreciation) 14,963 8,588

Surplus of External and Hosted Services 3,367 1,050

Provision for employee entitlements (3,273) (4,031)

Gain/(Loss) on disposal of non-current assets 558 (652)

(Loss)/Gain on foreign exchange (14) 13

Components of defined benefit costs recognised in surplus/(deficit) 15.5 (609) 1,974

Increase/(Decrease) in blood and blood product inventory 8.1 4,582 2,286

Surplus for the year 24,609 12,836

7. TRADE AND OTHER RECEIVAbLES

Trade receivables 4,075 4,459

Prepayments 5,864 4,047

Total trade and other receivables 9,939 8,506

7.1 Trade receivablesTrade receivables are non-interest bearing and are generally on 30-day terms for products and services provided to customers on a fee-paying basis funded primarily by governments and hospitals, and to a smaller extent, by private patients.

Impaired trade receivablesTrade receivables are reviewed regularly for recoverability. Government and hospital debts are considered recoverable. Where debts are assessed to be non-recoverable from private patients, these are written off in certain circumstances. The amount written off is not material and there is no requirement for an allowance for doubtful debts at the end of the reporting period.

Ageing of past due but not impaired trade receivables

30 to 90 days 298 258

90 to 180 days 76 24

Over 180 days 2 6

Total amount of past due but not impaired trade receivables 376 288

8. INVENTORIES

8.1 Inventory of blood and blood products:

Blood products at the Blood Service 12,241 7,522

Work in progress at the Blood Service 987 1,124

Total inventory of blood and blood products 13,228 8,646

8.2 Consumables inventory 6,690 5,909

Total inventories 19,918 14,555

The information presented in this note has been restated based on the change of accounting policy in note 4.



2014 2013

Notes $’000 $’000 (restated)

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Land & buildings

Computer equipment

Plant & equipment

Leased furniture fittings &

equipment

Motor vehicles

Work in progress

(WIP) Total

Notes $’000 $’000 $’000 $’000 $’000 $’000 $’000

9. PROPERTy, PLANT AND EQUIPMENT

At 1 July 2012Cost 231,090 63,871 92,394 64,001 16,522 20,254 488,132

Accumulated depreciation (37,209) (39,398) (46,540) (8,851) (10,846) - (142,844)

Net book amount 193,881 24,473 45,854 55,150 5,676 20,254 345,288

year ended 30 June 2012Balance at 1 July 2012 193,881 24,473 45,854 55,150 5,676 20,254 345,288 Additions 5,018 5,508 13,483 - 736 13,286 38,031

Reclassification to/from 9.4 (30,024) - 29,930 - 94 - Disposals (71) (97) (963) - (176) - (1,307)

Transfers from WIP 13,282 1,931 558 - 368 (16,139) - Depreciation charge (10,489) (11,347) (16,564) (5,253) (1,722) - (45,375)

Closing net book amount 171,597 20,468 72,298 49,897 4,976 17,401 336,637

At 30 June 2013Cost 219,249 70,604 128,764 64,001 15,438 17,401 515,457 Accumulated depreciation (47,652) (50,136) (56,466) (14,104) (10,462) - (178,820)

Net book amount 171,597 20,468 72,298 49,897 4,976 17,401 336,637

year ended 30 June 2014Balance at 1 July 2013 171,597 20,468 72,298 49,897 4,976 17,401 336,637 Additions 13,374 6,862 5,874 - 971 22,202 49,283

Disposals (1) (70) (446) - (189) - (706)

Transfers from WIP 769 8,523 299 - 1,628 (11,219) - Depreciation charge (12,623) (10,897) (13,950) (4,776) (1,419) - (43,665)

Closing net book amount 173,116 24,886 64,075 45,121 5,967 28,384 341,549

At 30 June 2014Cost 233,321 83,769 131,124 63,985 16,213 28,384 556,796

Accumulated depreciation (60,205) (58,883) (67,049) (18,864) (10,246) - (215,247)

Net book amount 173,116 24,886 64,075 45,121 5,967 28,384 341,549

9.1 Work in progress The carrying amounts of the assets disclosed above include the following expenditure recognised in relation to property, plant and equipment which are in the course of construction:

Freehold land and buildings and leasehold improvements 5,024 358

Computer equipment (including software) 20,519 14,723

Plant and equipment 2,607 887

Donor Mobile Units 234 1,433

Total work in progress 28,384 17,401

In 2014, the computer equipment balance includes upgrades to several operating systems including the Laboratory Information Management System - LIMS ($7.256 million), Improving Disaster Recover Capabilities Software ($2.456 million) and Application Hosting Infrastructure ($2.203 million). During the year, freehold land and buildings and leasehold improvements included $1.484 million and $1.232 million in relation to the development of Strathpine Donor Centre Relocation and Perth Processing Centre Refurbishment respectively.

9.2 Leased assetsThe net book value for leased furniture, fittings & equipment of $45.121 million (2013: $49.897 million), includes amounts relating to the leasehold improvements for the processing centres in Queensland (2014: $19.437 million, 2013: $20.864 million) and Melbourne (2014: $25.683 million, 2013: $29.033 million) which are funded through finance leases.

9.3 Asset disposalsDuring the reporting period, the Blood Service disposed of assets with a total written down value of $0.706 million (2013: $1.307 million), excluding proceeds. This movement includes $0.057 million resulting from the disposals of assets during the national stocktake of operational assets which were classified as ‘no longer held’.

9.4 Reclassification of Asset Categories in prior yearThe national stocktake of operational assets in 2013 resulted in the category reclassifications of certain assets relating to major building projects (Sydney Processing Centre and Melbourne Processing Centre). During 2013, assets previously classified as ‘Land & buildings’ were individually identified and reclassified to the appropriate asset groups in the national fixed asset register. This process of transferring the costs resulted in a movement from the ‘Land & buildings’ category of $30.024 million to other asset groups. These reclassification movements were disclosed separately under ‘Reclassifications to/from’ and resulted in an increment of depreciation expense of $1.816 million. Of this total, $0.523 million related to 2012 depreciation expense which was reported in the 2013 total depreciation charge.

10. TRADE AND OTHER PAyAbLES

Trade payables 25,262 27,548 Accrued wages and salaries 13,456 14,101 Goods and Services Tax payable 1,119 2,996

Total trade and other payables 39,837 44,645

Trade payables also include payments due to suppliers for key capital projects. The average credit period on purchases of goods and services is 30 days. No interest is charged on the trade payables for the first 30 days from the date of the invoice. Specific suppliers may choose to charge interest after that period. The continuous monitoring of cash flow ensures that the majority of payables are paid within the credit timeframe and no material interest is incurred on overdue balances

2014 2013

Notes $’000 $’000


2014 2013

Notes $’000 $’000


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2014 2013

Notes $’000 $’000

2014 2013

Notes $’000 $’000

11. bORROWINGS

Current

Processing centre fit-out loans 19.3 4,162 3,827 Processing centre fit-out lease liabilities 19.2 5,031 5,184

Total current borrowings 9,193 9,011

Non-Current

Processing centre fit-out loans 19.3 31,712 35,873 Processing centre fit-out lease liabilities 19.2 38,762 43,793

Total non-current borrowings 70,474 79,666

Total borrowings 79,667 88,677

Leased assets pledged as security for lease liabilities The total current and non-current lease liabilities are effectively secured as the rights to the leased assets recognised in the financial statements and revert to the lessor in the event of default.

12. PROVISIONS

Current

Employee benefits 52,643 49,458 Make good for property leases 878 676 Total current provisions 53,521 50,134

Non-current

Employee benefits 8,380 8,842 Make good for property leases 4,097 3,363

Total non-current provisions 12,477 12,205

Total provisions 65,998 62,339

12.1 Provision for employee benefits

12.1.1 Current provision The current provision for employee benefits includes accrued annual leave, long service leave and termination benefits. For long service leave it covers all unconditional entitlements where employees have completed the required period of service and also those where employees are entitled to pro-rata payments in certain circumstances. In 2014, the Blood Service financial statements have reflected the standard entitlement period of long service leave at seven years of continuous service. This obligation is presented as current since the organisation does not have an unconditional right to defer settlement. Based on past experience however, the Blood Service does not expect all employees to take the full amount of accrued leave within the next 12 months.

The following amounts reflect annual leave and long service leave, currently described as a current obligation, that are not expected to be taken in the next 12 months:

Annual leave obligation expected to be settled after 12 months 3,352 4,313

Long service leave obligation expected to be settled after 12 months 28,583 27,550

Total current obligations not expected to be taken in the next 12 months 31,935 31,863

12.1.2 Non-current provision Employee benefits refer to provisions for long service leave for employees who have not completed the required years of service, calculated on the basis described in Note 3.15.1.1

12.2 Provision for make good for property leases

Make good provisions represent the present value of management’s best estimate of the future sacrifice of economic benefits that will be required to remove leasehold improvements from leasehold property at the end of the particular lease. The estimate has been made on the basis of historical make good costs, a review of leases and future rentals. The unexpired term of the leases range from two to 20 years.

Movements in make good provisions are as follows:

Carrying amount of make good provisions at beginning of the year 4,039 4,284

Provision movement 936 (245)

Carrying amount of make good provisions at end of the year 4,975 4,039

13. PREPAID GOVERNMENT FUNDS

Output funding net cash advance 46,122 51,111

Government grants refundable 40,394 8,908

Total prepaid government funds 86,516 60,019

Output funding net cash advance relates to the working capital advance received from the NBA upon commencement of the Output Based Funding Model from 1 July 2011, less June 2014 revenue not received until July 2014.

Government grants refundable relate to the expected return of funds to the NBA for surpluses in the reported period.



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14. OTHER LIAbILITIES

Current

Lease incentive 543 431

Total current other liabilities 543 431

Non-current

Lease incentive 3,503 3,756

Total non-current other liabilities 3,503 3,756

Total other liabilities 4,046 4,187

15. RETIREMENT bENEFIT PLAN ObLIGATIONS

The Blood Service has recognised a liability in the statement of financial position in respect of its defined benefit superannuation arrangements. Currently, contributions are made to the following defined benefit plans: 1) Local Government Super in New South Wales; and 2) Australian Red Cross Queensland Staff Retirement Fund in Queensland. All contributions are expensed when incurred.

Local Government Super (NSW): Local Government Super provides defined benefits whereby components of the final benefit are derived from a multiple of member salary and years of membership. Members receive lump sum or pension benefits on retirement, death, disablement and withdrawal. The defined benefits scheme was closed to new members effective from 15 December 1992. The Local Government Superannuation Scheme was established on 1 July 1997 to specifically cater for the superannuation requirements of Local Government employees. LGSS Pty Limited (ABN 68 078 003 497) (AFSL 383558) is the Trustee of the Local Government Superannuation Scheme (known as Local Government Super). Local Government Super is a resident regulated superannuation scheme within the meaning of the Superannuation Industry (Supervision) Act 1993.

Australian Red Cross Queensland Staff Retirement Fund (QLD): The fund, offering both defined benefit and a defined contribution plans, is a final average (3 years) lump sum benefit arrangement providing benefits on death, disability, resignation and retirement. The defined benefit section provides benefits based on the length of service and final average salary. The defined contribution section receives fixed contributions and the employer’s legal or constructive obligation is limited to these contributions. The fund commenced on 15 June 2006 as a successor fund transfer from the Australian Red Cross Qld Staff Superannuation Plan. This fund is a sub-fund of the AMP Superannuation Savings Trust which was established under a Trust Deed dated 1 July 1998. The Trustee is AMP Superannuation Limited

The plans in Australia typically expose the Blood Service to actuarial risks such as investment risk, interest rate risk, longevity risk and salary risk:

Investment Risk The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to high quality corporate bond yields; if the return on plan assets is below this rate, it will create a plan deficit.

Interest Risk A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan’s debt investments.

Longevity Risk The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan’s liability.

Salary Risk The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan’s liability.

The risk relating to benefits to be paid to the dependents of plan members (widow and orphan benefits) is re-insured by an external insurance company. No other post-retirement benefits are provided to these employees.

The most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation was carried out at 30 June 2014 by:

- Mr Jeff Humphries , Principal, CHR Consulting Pty Ltd for Australian Red Cross Queensland Staff Retirement Fund (QLD)

- Mr Richard Boyfield, Partner, Representative of Mercer Consulting (Australia) Pty Ltd for Local Government Super (NSW).

The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method.


2014 2013

Notes $’000 $’000


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15.1 Principal actuarial assumptions:

The principal assumptions used for the purposes of the actuarial valuations were as follows.:

Discount rate(s) 3.6% 3.8%

Expected rate(s) of salary increase 4.2% 4.2%

Anticipated rate(s) of return on plan assets 7.0% 7.0%

15.2 Amounts recognised in the statement of financial position

Present value of funded defined benefit plan obligation 15.3 26,189 24,993

Fair value of defined benefit plan assets 15.4 (19,486) (18,675)

Net liability arising from defined benefit plan obligation 6,703 6,318

15.3 Reconciliation of movement in the present value of the defined benefit plan obligation:

Balance at beginning of the year 24,993 31,423

Current service cost 1,104 1,280

Interest cost 917 898

- Actuarial loss/(gain) arising from changes in financial assumptions 691 (1,935)

- Actuarial loss/(gain) arising from experience adjustments 299 (2,943)

Benefits paid (1,815) (3,730)

balance at end of the year 26,189 24,993

15.4 Reconciliation of movement in the fair value of plan assets:

Balance at beginning of the year 18,675 16,573

Interest income 682 456

Remeasurement gain/(loss): - Return on plan assets (excluding amounts included in net interest expense) 1,214 1,761

Contributions by the employer 654 3,499

Contributions by plan participants 76 116

Benefits paid (1,815) (3,730)


The fair value of the plan assets at the end of the reporting period for each category, are as follows:

Australian equities 4,248 4,447

International equities 4,981 4,794

Property 1,712 1,959

Australian fixed interest 2,146 1,548

International fixed interest 315 313

Cash 1,326 1,031

Other 4,758 4,583

Total fair value of the plan assets 19,486 18,675

2014 2013

Notes $’000 $’000

2014 2013

Notes $’000 $’000

The fair value of the above equity and debt instruments are determined as follows.

Local Government Super: Determined based on one of the following; quoted prices in active markets for identical assets, other inputs other than quoted prices observable for the asset directly or indirectly or inputs that are not based on observable market data. Derivatives can be used by investment managers however the trustee requires that all derivatives positions are fully cash covered, are offset to existing assets, or are used to alter the exposures in underlying assets classes. It is the policy of the fund that no gearing or speculative trading is permitted.

Australian Red Cross Queensland Staff Retirement Fund:The issue price is determined by reference to the net asset value and transaction costs pertaining to the relevant class of units, and the number of units on issue in that unit class. The market value and net asset value of the Fund are normally determined at least each business day, using the market prices and unit prices of the assets in which the Fund is invested. The Fund may use derivatives such as options, futures or swaps which support the Fund’s investment objectives. However, certain restrictions are imposed on the use of derivatives within the Fund in accordance with the AMP Capital Derivative Risk Statement.

The actual return on plan assets was $1.220 million (2013: $1.260 million).

15.5 Amounts recognised in the statement of comprehensive income:

Service cost:

- Current service cost 1,104 1,280

- Employer contributions (654) (3,499)

- Member contributions (76) (116)

- Past service cost and (gain)/loss from settlements - (81)

Net interest cost 235 442

Components of defined benefit costs recognised in surplus/(deficit) 609 (1,974)

Remeasurement on the net defined benefit liability:

- Return on plan assets gain (excluding amounts included in net interest expense) (1,214) (1,761)

- Actuarial loss/(gain) arising from changes in financial assumptions 691 (1,935)

- Actuarial loss/(gain) arising from experience adjustments 299 (2,943)

Components of defined benefit gains recognised in other comprehensive income (224) (6,639)

Total 385 (8,613)

The current service cost and the net interest expense for the year are included in the staff expenses in the statement of profit or loss. The remeasurement of the net defined benefit liability is included in other comprehensive income.

(restated) (restated)



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2014 2013


16. RESERVES

General reserve 16.1 202,404 190,201

Special reserve 16.2 57,973 55,078

Capital reserve 16.3 64,867 55,132

Total reserves 17 325,244 300,411

16.1 General reserve

Balance at beginning of year 190,201 189,456

Transfer to special reserve (2,895) (6,913)

Transfer to capital reserve (9,735) (11,817)

Subtotal transfer from general reserve (12,630) (18,730)

Surplus for the year 24,609 12,836

Actuarial gain on retirement benefit plan obligations 224 6,639


General reserves held are surplus funds not yet allocated for a specific purpose.

16.2 Special reserve


Income received and transferred to the reserve 32,989 14,102

Expenditure incurred and transferred from the reserve (30,094) (7,189)

Subtotal transfer from general reserve 16.4.1 2,895 6,913


The Blood Service’s special reserve records retained surpluses over which the Blood Service has restricted use. The majority of the balance is comprised of Commonwealth (NBA) funded reserves which include the OBFM risk reserve (2014: $5.138 million, 2013: $5.000 million), corporate risk reserve (2014: $23.686 million, 2013: $18.185 million), unallocated prior year surpluses (2014: $6.192 million, 2013: $4.706 million) and proceeds on sale of assets (2014: $4.565 million, 2013: $4.906 million). The remainder of the balance consists of State government and other externally funded reserves.

16.3 Capital reserve


Income received and transferred to the reserve 62,472 51,597

Expenditure incurred and transferred from the reserve (52,737) (39,780)

Subtotal transfer from general reserve 9,735 11,817


The Blood Service’s capital reserve records retained surpluses less capital expenditure relating to various capital funded programs or funds received for the purpose of future capital expenditure.

15.6 Category of investments:

Australian equities 21.8% 23.8%

International equities 25.6% 25.7%

Property 8.8% 10.5%

Australian fixed interest 11.0% 8.3%

International fixed interest 1.6% 1.7%

Cash 6.8% 5.5%

Other 24.4% 24.5%

100.0% 100.0%

15.7 Sensitivity analysis for actuarial assumptions

Significant actuarial assumptions for the determination of the defined obligation are discount rate and expected salary increase. The sensitivity analysis below has been determined based on reasonably possible changes of the respective assumptions reporting period, while holding all other assumptions constant.

- If the discount rate is 50 basis points higher/(lower), the defined benefit obligation would (decrease)/increase by $0.449 million.- If the expected salary growth increases/(decreases) by 0.5%, the defined benefit obligation would increase/(decrease) by $0.275 million.

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the statement of financial position.

There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.

15.8 Asset-Liability Matching study There were no asset-liability matching strategies adopted by the funds during the period.

15.9 Effects on future cash flows

Local Government Super’s funding arrangements are reviewed at least every three years following the release of the triennial actuarial review and was last reviewed following completion of the triennial review as at 30 June 2012. Contribution rates are set after discussions between the Blood Service and the trustee. Funding positions are reviewed annually and funding arrangements may be adjusted as required after each annual review. Members of the Australian Red Cross Queensland Staff Retirement Fund contribute at the rate of 5% of salary. The residual contribution (including back service payments) is paid by the Blood Service. The funding requirements are based on the local actuarial measurement framework. In this framework the discount rate is set on the expected return on the Fund’s assets. The Blood Service carries the investment volatility risk and may be required to make additional contributions from time to time if assets do not cover members’ vested benefits.

The average duration of the benefit obligation at 30 June 2014 is 10.4 years (2013: 10.5 years). This number can be analysed as follows: - active members: 9.8 years (2013: 10.0 years); - retired members: 13.4 years (2013: 13.8 years).

The Blood Service expects to make a contribution of $0.710 million (2013: $ 0.716 million) to the defined benefit plans during the next financial year.



2014 2013

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16.4 Movement within reserves

16.4.1 Transfer between general and special reserve

The $2.895 million movement (2013: $6.913 million) is comprised partly of (i) allocation of funds to the corporate risk reserve including interest earned (2014: $5.500 million, 2013: $2.700 million) (ii) allocation of funds (comprising of interest and surplus) to the OBFM risk reserve (2014: $0.138 million, 2013: $3.500 million), (iii) allocation of prior year surplus (2014: $1.486 million, 2013: $0.671 million); and less (iv) expenditure of $30.094 million (2013: $7.189 million) on registered special reserve initiatives.

17. EQUITy

Accumulated funds at beginning of the year 300,411 280,936 Total comprehensive income 24,833 19,475

Accumulated funds at end of the year 325,244 300,411

18. RECONCILIATION OF CASH FLOWS FROM OPERATING ACTIVITIES

18.1 Cash flows from operating activities

Net surplus 24,609 12,836

Adjustments for:Depreciation 9 43,665 45,375



Interest paid on finance leases 6,748 7,470

Interest received (8,108) (8,179)

Components of defined benefit costs recognised in surplus/(deficit) 15.5 609 (1,974)

Changes in operating assets and liabilities: Increase in trade and other receivables (1,433) (1,375)

(Decrease)/Increase in trade and other payables (4,949) 2,650

Increase in prepaid government funds 26,498 1,486 Increase in provisions 3,659 4,371

Increase in consumables inventory (781) (433)


Net cash inflow from operating activities 85,391 60,580

18.2 Reconciliation of cash and cash equivalentsFor the purpose of the statement of cash flows, cash and cash equivalents comprise the following at 30 June:

Cash at bank and on hand 1,037 251

Term deposits and investments 235,568 206,647

Total cash and cash equivalents 236,605 206,898

19. COMMITMENTS

19.1 Non-cancellable operating leases

The Blood Service leases various premises used as offices, blood collection centres, processing and testing centres, and warehouses under non-cancellable leases expiring within two to 20-years. The leases include a 20-year lease (expiring April 2028) for a property at Kelvin Grove, Brisbane, a 20-year lease (expiring January 2031) for the property at Alexandria, Sydney, an 11-year lease (expiring November 2021) for the National Office on St. Kilda Road, Melbourne and several donor centres nationally.

A number of lease arrangements entered into by the Blood Service provide the option to extend the term beyond the initial expiration date. The commitment for minimum lease repayments in relation to non-cancellable operating leases has been calculated based on the initial lease term under the contract. This approach is consistent with the calculation of the make-good provision.

Commitments for minimum lease payments in relation to non-cancellable operating leases are payable as follows:

- within one year 24,025 20,773

- later than one year and not later than five years 73,719 65,945

- later than five years 107,446 114,704

Total non-cancellable operating leases 205,190 201,422

Of this total, $1.395 million (2013: $2.067 million) of commitments for minimum lease payments relates to transactions with the Society - see note 24. $1.095 million (2013: $1.102 million) is payable within one year and the remaining payable later than one year but within five years

19.2 Finance leases

The Blood Service leases various equipment and fit-outs with a carrying value of $43.793 million (2013: $48.977 million) under finance leases expiring within three to 10 years. Under the terms of the leases, the Blood Service has the option to acquire the leased assets on expiry of the leases. These leases relate to:

19.2.1 Property fit-out leases

Upon completion of the Brisbane Processing Centre in Kelvin Grove in 2008, the constructed asset was used to underwrite a $32.473 million 10-year finance lease with a financial institution. As at 30 June 2014, the residual balance of this facility was $16.523 million (2013: $19.117 million). The lease repayments relating to this arrangement are funded by the Annual Capital Program.

In 2012, the Melbourne Processing Centre in West Melbourne was completed and the constructed asset was used to underwrite a $33.500 million 10-year finance lease. As at 30 June 2014, the residual balance of this facility was $27.270 million (2013: $29.860 million). The Blood Service receives special grant funding to cover the lease repayments under this arrangement.


2014 2013

Notes $’000 $’000

2014 2013



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19.2.2 Total equipment and property fit-out finance leases

Minimum lease payments:

- within one year 8,168 8,694

- later than one year and not later than five years 40,990 35,644 - later than five years 6,915 20,429

Minimum future lease payments 56,073 64,767

Less: future finance charges (12,280) (15,790)

Total lease liabilities 43,793 48,977

Representing lease liabilities:

Current 11 5,031 5,184

Non-current 11 38,762 43,793

Total lease liabilities 19.2.1 43,793 48,977

19.3 borrowings

Secured bank loans:

Current 11 4,162 3,827

Non-current 11 31,712 35,873

Total bank loans 35,874 39,700

In 2011, the Society had entered into a 10-year loan agreement for the value of $47.500 million to partially fund the building works of the Sydney Processing Centre in Alexandria. The loan is secured by a fixed charge of the building works and equipment (including fixtures and fittings) and a charge over the Deed of Indemnity between the Society and the NBA. The Blood Service receives special grant funding to cover the lease repayments under this arrangement.

19.4 Capital expenditure commitments

Capital commitments contracted for at the reporting date but not recognised as liabilities are as follows:

Property, plant & equipment

Payable:

- within one year 4,512 8,174 - later than one year and not later than five years - - - later than five years - - Total capital expenditure commitments 4,512 8,174

Of the reported total capital expenditure commitments, $1.462 million relates to Information Services business initiatives with the balance committed to premises related activities and various other business programs.

20. CONTINGENT LIAbILITIES

There is a potential for claims to arise from viral/bacterial infections or blood-borne diseases which are currently unidentified, or in circumstances where there is no test or screening procedures available to test for a virus/bacteria/disease state. In the event that commercial insurance does not cover financial exposure arising as a result of transmission of blood-borne disease occurring subsequent to 1 July 2000, a national managed fund has been established with claims covered at the discretion of the NBA.

The Blood Service is entitled to seek, and the NBA may at its discretion grant, indemnities in respect of potential liabilities arising from litigation in relation to pre-July 2000 transfusion-transmitted diseases. There are no contingent liabilities or events identified which could be expected to have a material impact on the financial statements in the future.

21. EVENTS AFTER REPORTING PERIOD

There were no known significant events after the reporting period.

22. kEy MANAGEMENT PERSONNEL COMPENSATION

22.1 key management personnel

22.1.1 board members during 2013 - 2014 were:

The Hon Dr David Hamill AM (Chair)

Ms Jennifer Williams (Chief Executive)

Mr Nigel Ampherlaw (Board Member)

Ms Sandhya Chakravarty (Board Member)

Ms Hannah Crawford (Board Member)

Dr David Graham (Board Member)

Ms Kelly Jones (Board Member)

Associate Professor Larry McNicol (Board Member)

Mr Ross Pinney (Board Member)

Professor John Zalcberg OAM (Board Member)

2014 2013

Notes $’000 $’000



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board remuneration disclosures:

Remuneration range ($25k band) Under $25,000 - 3

$25,000 to $49,999 - 3

$50,000 to $74,999 8 5

$100,000 to $124,999 1 1

$575,000 to $599,999 - 1

$600,000 to $624,999 1 - Remuneration figures are gross salary plus superannuation.

22.1.2 Executive Directors during 2013 - 2014 (not including the Chief Executive) were:

Mr John Brown Chief Financial Officer

Ms Jacqui Caulfield Executive Director, Manufacturing

Mr Mark Gardiner Chief Information Officer

Ms Anne Heyes Executive Director, Human Resources

Dr David Irving Executive Director, Research & Development

Mr Peter McDonald Executive Director, Corporate Strategy & Performance

Dr Joanne Pink Chief Medical Officer

Ms Janine Wilson Executive Director, Donor Services

Remuneration of Executive Directors (not including the Chief Executive):

Remuneration range ($25k band)

$100,000 to $124,999 - 1

$125,000 to $149,999 - 1 $225,000 to $249,999 1 2 $250,000 to $274,999 1 -

$275,000 to $299,999 1 1

$300,000 to $324,999 1 2

$325,000 to $349,999 2 1

$350,000 to $374,999 1 -

$400,000 to $424,999 - 1

$425,000 to $449,999 1 -

Remuneration figures are gross salary plus superannuation.

The key management personnel compensations included in the surplus are as follows:

Short-term Long-term

Number of personnel

Salaries and fees

Superannuation contributions

Termination benefits

Post- employment

Long service leave

Total

2014

Total compensation

$’000 $’000 $’000 $’000 $’000 $’000

18 3,549 257 - - - 3,806

2013

Total compensation 22 3,254 227 3 - - 3,484

The greater personnel numbers in 2012/13 reflects the resignation of the Chief Information Officer and the commencement, three months later, of his replacement with both included in total headcount. In addition, three Blood Service Board members retired and were replaced in 2012/13 with all six included in the headcount figures. The Executive Director, Donor Services was also included in the headcount in 2012/13 but was on maternity leave for the full year of which a large proportion was unpaid.

23. REMUNERATION OF AUDITORS

Amounts paid or due and payable to Deloitte Touche Tohmatsu for:

- Audit or review of the financial statements of the Blood Service 89,775 88,200

- Audit for grant acquittals 20,391 23,625

- Other non-audit services 55,884 159,978

Total remuneration of auditors 166,050 271,803

‘Other non-audit services’ relates to: - consulting relating to the Laboratory Information Management System (LIMS) implementation.

24. RELATED PARTy DISCLOSURES

Transactions with the Australian Red Cross Society

During the reporting period, net payments of $1.067 million (2013: $2.090 million) were transacted between the Blood Service and the Society. The transactions largely relate to the Blood Service’s occupancy of premises owned by the Society, whereby there are contractual arrangements for the sub-lease of these facilities by the Blood Service. As at 30 June 2014, an aggregate of $1.395 million (2013: $2.067 million) of commitments for minimum lease payments in relation to non-cancellable operating leases are payable to the Society over a five year period. Inclusive in net payments is a workcover premium payment of $0.977 million for 2013-14.

There was no material debt between the Blood Service and the Society at 30 June 2014.


Notes 2014 2013

2014 2013

Notes $’000 $’000


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25. FINANCIAL RISk MANAGEMENT

The Blood Service’s activities expose it to a variety of financial risks: market risk (including foreign currency risk and interest rate risk), credit risk and liquidity risk. The Blood Service’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the Blood Service.

Financial risk management is carried out by a central treasury function under policies approved by the Board, with the Chief Financial Officer responsible for financial risk management. It is the Blood Service’s policy to conduct its banking business, including instruments used to hedge risk, with high credit quality financial institutions.

Fair value estimation

The Blood Service holds the following financial instruments:

Financial assets

Cash - Australian currency 187 94

Cash - foreign currency 850 157

Total cash at bank and on hand 1,037 251

Bank bills and term deposits 235,568 206,647

Total cash and cash equivalents 18.2 236,605 206,898

Trade and other receivables 7 9,939 8,506

Total financial assets 246,544 215,404

Financial liabilities -

Trade and other payables 10 39,837 44,645

Borrowings - finance leases 11 43,793 48,977

Borrowings - loans 11 35,874 39,700

Prepaid government funds 13 86,516 60,019

Other liabilities 14 4,046 4,187

Total financial liabilities 210,066 197,528

Financing facilities available

At reporting date, the following financing facilities had been negotiated and were available:

Credit card and travel account 2,000 2,000

Borrowings - finance leases 43,793 48,977

Borrowings - loans 35,874 39,700

Total financing facilities available 81,667 90,677

Facilities unused at reporting date

Credit card and travel account 1,248 1,061

Borrowings - finance leases - -

Borrowings - loans - -

Total facilities unused at reporting date 1,248 1,061

2014 2013

Notes $’000 $’000

2014 2013

$’000 $’000 $’000 $’000

Foreign currency

AUD equivalent

Foreigncurrency

AUD equivalent

25.1 Market risk

25.1.1 Interest rate riskThe Blood Service has significant interest-bearing financial assets and is exposed to interest rate fluctuations on its investments in bank term deposits.The Blood Service accepts the risk in relation to its financial assets, as the balances held fluctuate in the short-term and are held to generate investment income on unused funds.

The Blood Service’s main interest rate exposure on financial liabilities arises from long-term borrowings. The Blood Service’s policy is to maintain its long-term borrowings at fixed rates. As at 30 June 2014, all of the Blood Service’s borrowings were fixed interest borrowings.

25.1.2 Foreign currency exchange rate riskForeign currency exchange rate risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the entity’s functional currency. The Blood Service treasury policy allows for contracts to be negotiated in foreign currency where it is financially more advantageous than negotiating in Australian dollars. The Blood Service either holds appropriate foreign currency balances or uses financial instruments such as forward foreign currency contracts for cash flow hedging purposes; that is, not as trading or speculative instruments. It is Blood Service policy to purchase standard foreign exchange contracts to cover foreign currency liabilities. As at 30 June 2014, the Blood Service did not have any forward exchange contracts. The Blood Service assessed its foreign currencies as at 30 June 2014 and they are as follows:

Foreign currency financial assets

Cash and cash equivalents

USD 801 850 151 157

Total foreign currency financial assets 850 157

The Blood Service has no other foreign currency assets or liabilities



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25.1.3 Sensitivity analysisThe following table summarises how the Blood Service’s surplus and equity would have been affected by changes in interest and foreign currency exchange rates at statement of financial position date.:

Interest rate risk Foreign currency exchange rate risk

Carrying amount

- 100 basis

points

- 100 basis

points

+ 100 basis

points

+ 100 basis

points

- 10% - 10% + 10% + 10%

$’000 Surplus Equity Surplus Equity Surplus Equity Surplus Equity

2014

Financial assets*

Cash and cash equivalents 236,605 (2,294) (2,294) 2,294 2,294 (77) (77) 94 94

Total (decrease) / increase (2,294) (2,294) 2,294 2,294 (77) (77) 94 94

2013

Financial assets*

Cash and cash equivalents 206,898 (1,844) (1,844) 1,844 1,844 (26) (26) 40 40

Total (decrease) / increase (1,844) (1,844) 1,844 1,844 (26) (26) 40 40

* Sensitivity analysis does not apply to Blood Service borrowings as all loans and finance leases have fixed interest rates for the term of the loans.

25.2 Credit riskCredit risk is managed on a national basis. Credit risk arises from cash and cash equivalents, derivative instruments and deposits with financial institutions, as well as credit exposure to customers. For financial institutions, only those that are rated with a minimum AA- equivalent Standard and Poor’s rating are accepted. In respect of customers, the Blood Service ensures that invoices for products and services are largely made to customers with an appropriate credit history. Credit risk for derivative financial instruments arises from the potential failure by counterparties to the contract to meet their obligations.

There is no significant credit risk with respect to receivables, as the major receivables are from the Commonwealth, State and Territory governments.

The credit quality of financial assets can be assessed by reference to external credit ratings.

Maximum exposure to credit risk at the reporting date:

Cash and cash equivalents 18.2 236,605 206,898

Trade and other receivables 7 9,939 8,506

Total maximum exposure to credit risk at the reporting date 246,544 215,404

25.3 Liquidity riskPrudent liquidity risk management implies maintaining sufficient cash and availability of funding through an adequate amount of committed credit facilities and funding arrangements. The Blood Service manages liquidity risk by monitoring forecast cash flows and ensuring that adequate liquid funds are available.

The following table details the Blood Service’s contractual maturity for its non-derivative financial liabilities. The table has been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Blood Service can be requested to pay. The table includes principal cash flows only.

Financial liabilities Weighted average

effective interest rate

Less than 1 month

1 - 3 months

3 months to 1 year

1 - 5 years

5 + years

Total

Notes % $’000 $’000 $’000 $’000 $’000 $’000

2014

Non-interest bearing 86,004 40,485 407 2,089 1,414 130,399

Fixed loan liability 19.3 8.63 329 672 3,160 20,729 10,984 35,874

Finance lease liability 19.2.2 7.57 405 818 3,808 32,236 6,526 43,793

Total financial liabilities 86,738 41,975 7,375 55,054 18,924 210,066

2013

Non-interest bearing 95,792 8,980 323 1,723 2,033 108,851

Fixed loan liability 19.3 8.63 310 617 2,900 19,013 16,860 39,700

Finance lease liability 19.2.2 6.79 389 784 4,011 25,561 18,232 48,977

Total financial liabilities 96,491 10,381 7,234 46,297 37,125 197,528


2014 2013

Notes $’000 $’000


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The following table details the Blood Service’s expected maturity for its non-derivative financial assets. The table has been drawn up based on the undiscounted contractual maturities of the financial assets, including interest that will be earned on those assets, except where the Blood Service anticipates that the cash flow will occur in a different period.

Non-derivative financial assets Weighted average

effective interest rate

Less than 1 month

1 - 3 months

3 months to 1 year

1 - 5 years

5 + years

Total

Notes % $’000 $’000 $’000 $’000 $’000 $’000

2014

Non-interest bearing 7 9,939 - - - - 9,939

Variable interest rate instruments 18.2 3.43 1,037 235,568 - - - 236,605

Total non-derivative financial assets 10,976 235,568 - - - 246,544

2013

Non-interest bearing 7 8,506 - - - - 8,506

Variable interest rate instruments 18.2 3.95 251 206,647 - - - 206,898

Total non-derivative financial assets 8,757 206,647 - - - 215,404

25.4 Fair value financial instrumentsThe fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes. The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair values due to their short-term nature.



bOARD MEMbERS’ DECLARATION

In accordance with a resolution of the Board of the Blood Service, I state that:

In the opinion of the Board:

(a) the financial statements and notes of the Blood Service:

(i) give a true and fair view of the Blood Service’s financial position as at 30 June 2014 and of its performance for the year ended on that date; and

(ii) comply with Australian Accounting Standards and other mandatory professional reporting requirements; and

(b) there are reasonable grounds to believe that the Blood Service will be able to pay its debts as and when they become due and payable.

On behalf of the Board

The Hon Dr David Hamill AM Chair

Melbourne Date: 30 September 2014

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20.0 RED CROSS 100



ANNUAL REPORT 2013 / 14

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20.0 RED CROSS 100



ANNUAL REPORT 2013 / 14

Living independently in her home is important to Isobel who knows that if she had a sudden accident or illness, Red Cross would arrange for someone to check on her. This system was put to the test when Isobel fell through a glass door at home and lay injured and unable to call for help. Isobel is very thankful to the Red Cross staff and volunteers who raised the alarm after her accident.

20.0

RED CROSS Australian Red Cross highlights for 2013/2014

In 2014 Australian Red Cross proudly celebrated a century of service. During our centenary, we thanked generations of Australians for their support and welcomed a new generation to take our legacy into the future. We recognised the vital work of our members, volunteers and staff and thanked our supporters for their valuable contribution.

We shared the memories of Red Cross people in our digital centenary story collection, and published our centenary history, The Power of Humanity: 100 years of Australian Red Cross 1914-2014, by Professor Melanie Oppenheimer.

Supporting people in crisis, big or small

Over the century, times have changed, but Red Cross’ support for vulnerable people in crisis has continued. This year, we assisted 4,236 people impacted by migration, provided breakfast to more than 4,200 children, supported 36,000 people respond to and recover from emergencies, helped 19,238 people in the Asia Pacific region access safe drinking water and 14,894 people access sanitation facilities.

Working together as partners

Working respectfully and in partnership with Aboriginal and Torres Strait Islander peoples remains one of our highest priorities. In 2014 we formalised an Aboriginal and Torres Strait Islander leadership group to provide strategic advice. We also made a commitment to a greater representation

of Aboriginal people in our workforce, setting a target of six per cent by June 2015.

Welcoming the International Movement to Australia

In November 2013, we hosted the international meetings of the Red Cross Red Crescent Movement, bringing together more than 1,000 delegates from 189 countries to decide our future global direction. This important forum was held in Australia for the first time, thanks to the support of the Federal and NSW Governments.

At the meetings a historic resolution and action plan was adopted to work towards an international agreement to end the use of nuclear weapons on humanitarian grounds. We continue to advocate strongly on this issue.

International aid and development

Australian Red Cross has significant ambitions for our international program. We commenced an international aid and development change program, which will ensure we have a sustainable strategy, structure, systems and resources to respond to humanitarian needs in the Asia Pacific and further afield.

Thanks to our supporters

Thank you to the government organisations, businesses and trusts that have provided financial or in-kind support this year. We also depend on the generosity of individuals to support our work in providing humanitarian services. Our largest group of community supporters are the 120,000 regular givers who donate an ongoing monthly gift to Red Cross. There are a number of other generous Australians to thank including those who leave a gift to Red Cross in their will, those who donate to disaster appeals and those who support our everyday work through general fundraising. Thank you to those who have continued to give blood, helping to give 1.3 million life-saving donations. We also acknowledge our Red Cross people - members, volunteers and staff - who have worked tirelessly this year. Voluntary service is at the heart of all we do.

As we step into a new century, we ask you to share and grow the power of humanity, so we continue making a difference to the most vulnerable people at home and further afield. Together we will be ready to face the humanitarian challenges which lie before us for another 100 years.

100-101

100 years of Red Cross in Australia

For 100 years, Red Cross has been there helping Australians in the face of crisis, touching the lives of most people in some way.

Born at the outbreak of World War I, Australian Red Cross celebrated its centenary in 2014, making it one of the oldest and most respected voluntary organisations in Australia. During the war, hundreds of thousands of volunteers signed up to help Red Cross play a critical role in supporting the men fighting overseas and caring for sick and wounded soldiers, and their families, at home.

Australia’s first Red Cross Blood Transfusion Service was established in Victoria in 1929, followed by other states. By World War II, Red Cross was the largest charitable organisation in Australia in both the scale of operations and the size of its membership.

In peacetime we continued to build on this foundation, responding to the varied humanitarian demands of the 20th century, from supporting families and communities dealing with poverty, homelessness and social isolation to responding to disasters at home or further afield.

Our centenary is a great Australian story about the extraordinary generosity and compassion of everyday people helping people. To commemorate this important milestone in our social history, we have found many ways to thank and recognise generations of Australians for their contribution.

From national and local events, a commemorative stamp, coin and vintage-themed merchandise, to the beautiful centenary history book and an impressive online story collection that captures simple acts of humanity by Red Cross people over a century, we have celebrated the spirit of generosity and voluntary service that helped to build our proud legacy.

Today there are over one million Red Cross volunteers, members, staff, donors, aid workers and supporters reaching right across Australia, and further afield. Whether it’s our immediate response to natural disasters, re-connecting families torn apart by war, training hundreds of thousands of Australians in first aid, or our everyday work helping vulnerable children and families in local communities, Red Cross is there.

The need for Red Cross is greater than ever, and we cannot continue our vital work without the generous support of our volunteers, members and donors.

We are looking to a new generation of supporters to help us change lives for the next 100 years. To find out how you can get involved visit redcross.org.au

100 years of the Australian Red Cross: 1914 to 2014.

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COLLECTION

DONOR CENTRE

DONOR

DELIVERy TO PROCESSING CENTRE

TESTING

NCC

PROCESSING

21.0

THE AMAZING JOURNEY OF BLOOD

The precious gift of blood from a donor to a patient must go on a journey, before it’s used in our hospitals or sent to laboratories for further processing.

The processing centres are like a factory, in a manufacturing chain. They are specially designed facilities where the journey begins. Blood from our donors are delivered in shipper containers to the processing centres.

! Did you know that 1,500 units of blood are delivered daily to the Melbourne Processing Centre?

STAGE ONE of the journey begins with processing. The blood is placed into a centrifuge machine and spun very fast so it naturally separates into three different products - red blood cells, platelets and plasma. This blood is used to make different products to help patients with specific

diseases and health problems. Red cells are used to treat patients with cancer and blood diseases, platelets assist people after cancer treatment, help manage bleeding in major surgery and severe trauma cases and plasma is used to make up 17 different products to help patients with trauma, burns and blood diseases.

! Did you know that in the industry, a bag of blood is actually a collection of red blood cells without the plasma and platelet components?

STAGE TWO involves the red cells being filtered, the plasma is frozen and platelets are placed into a special processing area where they are further purified and spun again in a centrifuge machine.

102-103

CSL NbA

CSL bEHRINGPlasma Products

Frozen

Fresh

RED CELLS

PLATELETS

PLASMA

NATIONAL RESERVE

bLOOD SERVICE DISTRIbUTION RECIPIENTS

HEALTH PROVIDERS

STAGE THREE is where the red cells are stored in a cool room at a temperature of two to six degrees and the platelets are placed on a special shelf called an agitator at room temperature.

! Did you know that red cells are kept in fridges at two to six degrees, platelets at room temperature and plasma gets frozen to minus 30?

STAGE FOUR and the next stage of manufacturing is underway. In the laboratories, the blood is being tested for blood type and diseases including hepatitis B and C, human immunodeficiency virus (HIV), human T-lymphocytotropic virus (HTLV) and syphilis.

! Did you know in medicine, a word ending in ‘-itis’ generally means inflammation. Hepatitis is inflammation of the liver?

As part of this stage, processing may continue to make specialised blood products, such as washing the red cells or freezing of ultra-rare cells.

STAGE FIVE involves release. This is where the testing results have been confirmed and the blood products are safe to release to hospitals and labelling begins.

STAGE SIX is storage and the final stage of manufacturing. Here the orders of blood (to the hospitals and to CSL Behring) are packed and couriered out. Red blood cells, platelets and some plasma are sent to hospitals for their patients and the rest of the plasma goes to CSL Behring for further processing into 17 different blood products.

! Did you know that 34 per cent of donated blood goes towards helping cancer patients?

CONTENTS




4.0 THE BOARD 13








12.0 FINANCE 36








20.0 RED CROSS 100









ScaleMin Dot

Screen

Job no.Software

DateDesigner Print Process

Printing Inks

Fonts Used

Version File

Australian Red Cross

Blood Service

20 Jun 2014DaWh 1 094-07-Handwritten-Messages.ai

Illustrator CS6100%

ARC00245lpi n/a

Screen print on cloth

None


330mm

230mm


Sign ID:

Scale:

-07100% JO OWES HIS LIFE TO COUNTLESS

DONORS. HE WAS DIAGNOSED WITH CANCER IN HIS bLADDER AT AGE TWO.


View our Annual Report on donateblood.com.au/corporate

/redcrossbloodau @redcrossbloodau /redcrossbloodau

© Copyright 2014 Australian Red Cross Blood Service. No person should act on the basis of the contents of this publication without first obtaining specific, independent and relevant advice. The Australian Red Cross Blood Service is not liable for any loss, damage, cost or expense incurred or arising by any person, or organisation, using or relying on the information in this publication. All rights reserved. Reproduction in whole, or part, is not permitted without written permission.

CONTENTS




4.0 THE BOARD 13








12.0 FINANCE 36








20.0 RED CROSS 100


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