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Auditor Report Balance Sheet Income & Expenditure Statement of Cash Flow Statement of Changes |
The Republic Polytechnic is established under the Republic Polytechnic Act, Act 14 of 2002. The Polytechnic is located at Tanglin Campus, 1 Kay Siang Road, Singapore 248922. The principal activity of the Polytechnic is to provide diploma level education and training in preparation for careers in applied science, engineering and information technology. Republic Polytechnic employed 149 permanent employees as of 31 March 2004 (2003 : 93). (a) Basis of preparation The financial statements have been prepared in accordance with Singapore Financial Reporting Standards (" FRS") and the applicable requirements of the Republic Polytechnic Act. In the previous year, the financial statements are prepared in accordance with Singapore Statements of Accounting Standards ("SAS"). The transition from SAS to FRS did not result in any significant changes in accounting policies. (b) Basis of recognising income For accounting purposes, the Polytechnic will recognise the course fees, library fines, contributions and donations in the financial year they are received. Project income will be recognised in the financial year the project is completed. Interest and other incomes will be recognised on the accrual basis. (c) Grants Government grants and contributions from other organisations utilised for the purchase of depreciable assets or to finance development project will be taken to the Deferred Capital Grants account in the balance sheet. The deferred grants will be recognised in the Income & Expenditure Statement over periods necessary to match the depreciation of assets purchased with the related grants. On disposal of the fixed asset, the balance of the related grants will be recognised in the income statement to match the net book value of the assets written off. Government grants to meet current year's operating expenditure are recognised as income in the same year. Government grants are to be accounted for on the accrual basis. (d) Fund accounting General Fund The incomes and expenditures relating to the main activities of the Polytechnic will be accounted for in the "General Fund" column in the Income & Expenditure Statement. Other Funds Funds are set up to account for contributions received and expenditure incurred for specific purposes, mainly to cater for financial assistance to students, scholarships, staff development and ad-hoc projects undertaken by the academic staff/students. All incomes and expenditures relating to these funds will be accounted for in the "Other Funds" column in the Income & Expenditure Statement. The assets and liabilities of the funds will also be accounted for separately. Other Funds comprise of the following :
(e) Property, plant and equipment Property, plant and equipment are stated at cost less accumulated depreciation and any impairment in value. All items of property, plant and equipment are initially recorded at cost. The initial cost of property, plant and equipment comprises its purchase price, including import duties and non-refundable purchase taxes and any directly attributable costs of bringing the asset to its working condition and location for its intended use, any trade discounts and rebates are deducted in arriving at the purchase price. Expenditure incurred after the property, plant and equipment have been put into operation, such as repairs and maintenance and overhaul costs, are normally charged to the Income and Expenditure Statement in the period in which the costs are incurred. In situations where it can be clearly demonstrated that the expenditure has resulted in an increase in the future economic benefits expected to be obtained from the use of an item of property, plant and equipment beyond its originally assessed standard of performance, the expenditure is capitalised as an additional cost of property, plant and equipment. Depreciation will be calculated on a straight line basis to write off the cost or the valuation of the property, plant and equipment over their estimated useful lives. The estimated useful lives of the various classes of assets are as follows :
Fixed assets costing less than $2,000 each, building renovations below $200,000 and library books are charged to the Income and Expenditure Statement in the year of purchase. Capitalisation of expenses incurred for building under construction or building improvements in progress will be deferred until the project is completed and the building is ready for use. The expenses incurred for the uncompleted portion will be recognised in the Work-in-Progress account in the balance sheet. Upon completion, the expenses will then be transferred to the Building account for capitalisation. If the project is aborted, the work-in-progress expenses would be expensed off to the Income & Expenditure Statement. (f) Cash and cash equivalents Cash and cash equivalents are defined as cash on hand, demand deposits and short-term deposits readily convertible to known amounts of cash and subject to insignificant risk of changes in value. Cash on hand and in banks and short-term deposits which are held to maturity are carried at cost. (g) Sundry receivables Sundry receivables are recognised and carried at original invoiced amount. (h) Sundry payables Liabilities for sundry payable, which are normally settled on 30-90 day terms, are carried at cost. (i) Employee benefits Defined contribution plan As required by law, the Polytechnic makes contributions to the state pension scheme, the Central Provident Fund ("CPF"). CPF contributions are recognised as compensation expense in the same period as the employment that gives rise to the contribution. Employee paid leave entitlement Employee paid leave entitlement is recognised when they accrue to employees. A provision is made for the estimated liability for unconsumed leave as a result of services rendered by employees up to the balance sheet date. (j) Foreign currency transactions Monetary assets and liabilities in foreign currencies at the Balance Sheet date will be translated into Singapore dollars at rates of exchange ruling at year end. Foreign currency transactions will be accounted for at the prevailing exchange rates at the transaction date. All exchange gains and losses arising from the transactions and the translations of monetary assets and liabilities will be recognised in the Income and Expenditure Statement. (k) Impairment of assets Assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Whenever the carrying amount of an asset exceeds its recoverable amount, an impairment loss is recognised in the Income and Expenditure Statement. Reversal of impairment losses recognised in prior years is recorded when there is an indication that the impairment losses recognised for the asset no longer exist or have decreased. The reversal is recorded in income. However, the increased carrying amount of an asset due to a reversal of an impairment loss is recognised to the extent it does not exceed the carrying amount that would have been determined (net of amortisation or depreciation) had no impairment loss been recognised for that asset in prior years. (l) Operating lease Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item are classified as operating leases. Operating lease payments are recognised as an expense in the Income and Expenditure Statement on a straight-line basis over the lease term. The aggregate benefit of incentives provided by the lessor is recognised as a reduction of rental expense over the lease term on a straight-line basis.
The main risks arising from the Polytechnic's financial instruments are interest rate risk, foreign currency risk, liquidity risk and credit risk. The Polytechnic's Board of Governors reviewed and agrees on the policies for managing each of these risks and these are summarised below: Foreign currency risk The Polytechnic does not engage in any hedging activities to manage its foreign currency risk arising from anticipated transactions and financing arrangements denominated in foreign currencies. Transaction risk is calculated in foreign currency and includes foreign currency denominated assets and liabilities. As at balance sheet date, the Polytechnic's foreign currency exposure is insignificant Interest rate risk Surplus funds arising from Polytechnic's operations are placed with reputable banks. The Polytechnic's earnings are affected by changes in interest rates due to the impact those changes have on its interest income from bank deposits. Liquidity risk Liquidity risk arises in the general funding of the Polytechnic's operating activities. The Polytechnic obtains grants from the Ministry of Education and donations from other organizations. These cash deposits are placed with reputable financial institutions which are readily available to fund its operating activities and meet financial obligations as and when they fall due. Credit risk The carrying amount of receivables, payables and grant receivables represent the Polytechnic's maximum exposure to credit risk. No other financial assets carry a significant exposure to credit risk. The Polytechnic has no significant concentrations of credit risk. Cash is placed with reputable banks. Fair value The carrying amounts of other receivables, cash and cash equivalents, other payables and government grants approximate their fair values due to their short term nature. No disclosure of fair value is made for loan to students as it is not practicable to determine their values. In addition, the Board is of the opinion that the information does not provide the readers with any value.
Certain comparative figures have been reclassified, where appropriate, to conform with the current year's presentation.
The financial statements for the year ended 31 March 2004 were authorised for issue in accordance with a resolution for the Board of Governors on 15 June 2004.
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