Financial Reports
| 1. | Corporate information |
| The Republic Polytechnic is established under the Republic Polytechnic Act (Cap. 270, 2003 Revised Edition).
The Polytechnic is located at 9 Woodlands Avenue 9, Singapore 738964. The principal activity of the Polytechnic is to provide diploma level education and training in preparation for careers in domains associated with engineering, technology, sciences and recreation. |
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| 2. | Summary of significant accounting policies | |
| 2.1 | Basis of preparation | |
| The financial statements have been prepared in accordance with the applicable requirements of the Republic Polytechnic Act (Cap. 270, 2003 Revised Edition), Finance Circulars from the Ministry of Finance and Singapore Financial Reporting Standards (FRS) except for the non-disclosure of information on related party transactions with other state-controlled entities required under FRS24, Related Party Disclosures, as allowed under the Ministry of Finance Circular Minute No. M4/2005. The option not to disclose information on related party transactions with other state-controlled entities was granted after consideration that the disclosure of Statutory Board’s information on related party transactions could be impractical, considering the range of Government-related entities and activities, all of which are subject to clearly established rules on the conduct of their financial transactions. Statutory Boards are not legally required to comply with Singapore Financial Reporting Standards as they are not governed by the Companies Act.
The financial statements are presented in Singapore dollars (S$), which is also the functional currency, and they are prepared under the historical cost convention. The accounting policies have been consistently applied by the Polytechnic and are consistent with those used in the previous financial year except as discussed below: |
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| (a) | Change in basis of recognising Student Fees
Prior to the current financial year, student fees income is recognised in the financial year they are received. With effect from this financial year, student fees income is recognised on an accrual basis to comply with FRS18. The prior year comparative has been adjusted as a result of the change on the basis of recognising student fees income. |
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| (b) | Adoption of revised FRS
The Polytechnic has adopted the revised FRS that are applicable in the current financial year and the FY2006/07 financial statements have been amended as required. The more significant effects on financial statements on adoption of revised FRS are disclosed in Note 3. |
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| (c) | FRS and INT FRS not yet effective
The Polytechnic has not applied any new standard or interpretation that has been issued but is not yet effective. Except for FRS 107, when adopted, will result in additional disclosures; the Polytechnic expects the adoption of the other pronouncements to have no impact on the financial statements in the period of initial application. |
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| 2.2 | Significant accounting estimates and judgements | ||
| Estimates, assumptions concerning the future and judgements are made in the preparation of the financial statements. They affect the application of the Polytechnic's accounting policies, reported amounts of assets, liabilities, income and expenses, and disclosures made. They are assessed on an on-going basis and are based on experience and relevant factors, including expectations of future events that are believed to be reasonable under the circumstances. | |||
| (a) | Key sources of estimation uncertainty | ||
| The key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. | |||
| • | Depreciation of property, plant and equipment
Property, plant and equipment are depreciated on a straight-line basis over their estimated useful lives. Management estimates the useful lives of these property, plant and equipment to be within 3 to 30 years. The carrying amount of the Polytechnic’s property, plant and equipment at 31 March 2007 was $502,790,829 (FY2005/06: $263,128,653). Changes in the expected level of usage and technological developments could impact the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised. |
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| • | Amortisation of intangible assets
Computer software are amortised on a straight-line basis over their estimated useful lives. Management estimates the useful lives of these computer software to be between 3 to 5 years. The carrying amount of the Polytechnic’s computer software was $3,227,056 (FY2005/06: $3,469,313). Changes in the expected level of usage and technological developments could impact the economic useful lives and the residual values of these assets, therefore future amortisation charges could be revised. |
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| (b) | Critical judgements made in applying accounting policies | ||
| The following are the judgements made by management in the process of applying the Polytechnic's accounting policies that have the most significant effect on the amounts recognised in the financial statements. | |||
| • | Impairment of financial assets The Polytechnic follows the guidance of FRS 39 on determining when a financial asset is impaired. This determination requires significant judgement, the Polytechnic evaluates, among other factors, the duration and extent to which the fair value of a financial asset is less than its cost; and the financial health of and short-term business outlook for the financial asset, including factors such as the Polytechnic's performance, changes in technology and operational and financing cash flow. |
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| 2.3 | Foreign currencies | |||||||||||||||
| Transactions in foreign currencies are measured in the functional currencies of the Polytechnic and its subsidiaries and are recorded on initial recognition in the functional currencies at exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated at the closing rate of exchange ruling at the balance sheet date. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.
Exchange differences arising on the settlement of monetary items or on translating monetary items at the balance sheet date are recognised in the income and expenditure account. |
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| 2.4 | Subsidiaries | |||||||||||||||
| A subsidiary is an entity over which the Polytechnic has the power to govern the financial and operating policies so as to obtain benefits from its activities. The group generally has such power when it directly or indirectly, holds more than 50% of the issued share capital, or controls more than half of the voting power, or controls the composition of the board of governors.
Investments in subsidiaries are accounted for at cost less any accumulated impairment losses. |
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| 2.5 | 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, any directly attributable costs of bringing the asset to its working condition and location for its intended use, and the estimated cost of dismantling and removing the items and restoring the site on which they are located when it is an obligation, 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:
* renamed, previously was Computer hardware & software. Computer software has been reclassified to Intangible assets in compliance with FRS38. Property, plant and equipment 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 except for furniture acquired to furnish the Woodlands Campus in financial year 2006/07. 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 and Expenditure Statement. The carrying amount of an item of property, plant and equipment shall be derecognised on disposal or when no future economic benefits are expected from its use or disposal. Gains or losses from the derecognition are determined by comparing proceeds with carrying amount and are included in Income and Expenditure Statement. |
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| 2.6 | Intangible assets | |||||||||||||||
| Computer software including software development costs are capitalised on the basis of the costs incurred to acquire or develop and bring the software to use. Direct expenditure, which enhances or extends the performance of computer software beyond its specifications and which can be reliably measured, is recognised as a capital improvement and added to the original cost of the software. Cost associated with maintaining computer software is recognised as an expense when incurred.
Computer software is stated at cost less accumulated amortisation and any accumulated impairment losses. These costs are amortised using the straight-line method over their estimated useful lives of 3 to 5 years. Computer software costing less than S$2,000 each is charged to the Income and Expenditure Statement in the year of purchase. A computer software shall be derecognised on disposal or when no future economic benefits are expected from its use or disposal. Gains or losses from the derecognition are determined by comparing proceeds with carrying amount and are included in Income and Expenditure Statement. |
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| 2.7 | Financial assets | ||
| (a) | Classification | ||
| The Polytechnic classifies its financial assets as loans and receivables and held-to-maturity investments, as appropriate. The classification depends on the purpose for which the assets were acquired. Management determines the classification of its financial asset at initial recognition and re-evaluates this designation at every reporting date. | |||
| (i) | Loans and receivables | ||
| Non-derivative financial assets with fixed or determinable payments that are not quoted in an active market are classified as loans and receivables. Such assets are carried at amortised cost using the effective interest method. Gains and losses are recognised in Income and Expenditure Statement when the loans and receivables are derecognised or impaired, as well as through the amortisation process. | |||
| (ii) | Held-to-maturity investments | ||
| Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturities that the Polytechnic’s management has the positive intention and ability to hold to maturity. The Polytechnic’s held-to-maturity investments are investments in fixed rate Government bonds, statutory bonds and corporate bonds. | |||
| (b) | Recognition and derecognition | ||
| Regular purchases and sales of financial assets are recognised on trade date and when, and only when, the Company becomes a party to the contractual provisions of the financial instrument. A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets) is derecognised where: |
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| (i) | the contractual rights to receive cash flows from the asset have expired; |
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| (ii) | the Polytechnic retains the contractual rights to receive cash flows from the asset, but has assumed an obligation to pay them in full without material delay to a third party under a ‘pass-through’ arrangement; or |
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| (iii) | the Polytechnic has transferred its rights to receive cash flows from the asset and either (a) has transferred substantially all the risks and rewards of the asset, or (b) has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. | ||
| A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. | |||
| (c) | Initial measurement | ||
| Financial assets and financial liabilities are initially recognised at fair value plus transaction costs. | |||
| (d) | Subsequent measurement | ||
| Loans and receivables and held-to-maturity investments are carried at amortised cost using the effective interest method. | |||
| (e) | Impairment | ||
| The Polytechnic assesses at each balance sheet date whether there is objective evidence that a financial asset or group of financial assets are impaired. If there is objective evidence that an impairment loss on loans and receivables or held-to-maturity investments carried at amortised cost has been incurred, the amount of the loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset's original effective interest rate (i.e. the effective interest rate computed at initial recognition). The carrying amount of the asset is reduced through the use of an allowance. The amount of the allowance is recognised in the Income and Expenditure Statement. | |||
| 2.8 | Impairment of non-financial assets | ||
| The Polytechnic assesses at each reporting date whether there is an indication that the property, plant and equipment, intangible assets and investment in subsidiaries may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Polytechnic makes an estimate of the asset's recoverable amount.
An asset's recoverable amount is the higher of an asset's or cash-generating unit's fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or group of assets. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. Impairment losses of continuing operations are recognised in the Income and Expenditure Statement as 'impairment losses'. An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses recognised for an asset other than goodwill may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset's recoverable amount since the last impairment loss was recognised. If that is the case the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Reversal of an impairment loss is recognised in the Income and Expenditure Statement. After such a reversal, the depreciation charge is adjusted in future periods to allocate the asset's revised carrying amount, less any residual value, on a systematic basis over its remaining useful life. |
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| 2.9 | 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 classified and accounted for as loans and receivables under FRS 39. The accounting policy for this category of financial assets is stated as note 2.7. | |||
| 2.10 | Sundry receivables | ||
| Sundry receivables are classified and accounted for as loans and receivables under FRS 39. The accounting policy for this category of financial assets is stated as note 2.7. | |||
| 2.11 | Sundry payables | ||
| Liabilities for sundry payable, which are normally settled on 30-90 day terms, are initially carried recognised at fair value and subsequently measured at amortised cost using the effective interest method. | |||
| 2.12 | Basis of recognising income | ||
| Student fees, rental income, interest income and other income are recognised on an accrual basis.
Donations are recognised in the financial year they are received. Project income is recognised in the financial year the project is completed. |
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| 2.13 | 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 and 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. |
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| 2.14 | Fund accounting | ||
| (a) | 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 and Expenditure Statement. | |||
| (b) | 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 and Expenditure Statement. The assets and liabilities of the funds will also be accounted for separately. Other Funds comprise the following: |
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| (i) | Student Development & Welfare Fund (Charity registration no. 1740, effective from 15 November 2003) |
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| The purpose of this fund is to provide scholarship, bursaries, equipment loans, etc to students as well as to fund student development and welfare activities.
With effect from 6 September 2006, the purpose of this fund has been expanded to fund continuing education, upgrading of the polytechnic’s physical infrastructure, equipment and special projects of the staff. |
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| (ii) | Development & Project Fund (Charity registration no. 1741, from 15 November 2003 to 6 September 2006) |
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The purpose of this fund is to fund continuing education, upgrading programmes for staff, upgrading of the polytechnic’s physical infrastructure, equipment and special projects of the staff. With effect from 6 September 2006, this fund has been dissolved. The balance monies have been transferred to the Student Development & Welfare Fund. |
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| (c) | Endowment Fund | ||
| This fund consists of donations or contributions which are specifically designed to be kept intact to earn income. Those funds under the Student Development & Welfare Fund which are of this nature are accounted under Endowment Fund. The principal sum is kept intact and presented separately in the balance sheet. The fund's income and expenditure are taken to the Income and Expenditure Statement. | |||
| 2.15 | Income Tax | ||
| Under Section 13M(1) of the Income Tax Act, the income of the Fund shall be exempt from tax subject to certain conditions as set out in Section 13M(2)(b) being met. | |||
| 2.16 | 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. The Polytechnic has no more obligation after the payment has been made. 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. |
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| 2.17 | 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. There is no further payment obligation once the contributions have been paid. | |||
| 3. | Effects on Financial Statements on adoption of revised FRS | |||||||||||||||||||||||
| FRS 8 (revised) Accounting Policies, Changes in Accounting Estimates and Errors | ||||||||||||||||||||||||
| (a) | With effect from the current financial year, the accounting policy for recognising student fees income has been changed from cash basis to accrual basis to comply with FRS 18. The change has been applied retrospectively and resulted in an increase in student fees income and a higher debtor’s balance. In compliance with FRS 8 (revised), the increase in income and debtor’s balance is adjusted in the prior financial year instead.
The adoption of FRS 8 (revised) has affected the following financial statements items for the year ended 31 March 2007 and 31 March 2006. |
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| (b) | In the year 2006, it is noted that the National Library Board has not made full delivery of library book collections according to the amount paid to them. The amount paid but not matched by the actual delivery is taken to the prepayment account and adjusted against the library collection expense. In compliance with FRS 8 (revised), the increase in prepayment and the adjustment of the expense related to the prior financial years have been accordingly adjusted.
The adoption of FRS 8 (revised) has affected the following financial statements items for the year ended 31 March 2007 and 31 March 2006. |
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| 4. | Deferred capital grants | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| 5. | Other funds | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| 6. | Endowment fund (principal sum) | |||||||||||||||||||||||||||||||||
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| 7. | Property, plant and equipment and Capital work-in-progress | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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* renamed, previously was Computer hardware & software. Computer software has been reclassified to Intangible assets in compliance with FRS38. |
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| 8. | Intangible assets | ||||||||||||||||||||||||||||||||||||||
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| 9. | Investment in subsidiary | ||||||||||||||||||||||||
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| * Audited by CT Chng & Co. for FY2006/07 and by Ernst & Young Singapore for FY2005/06.
The financial statements of the subsidiary have not been consolidated with the Polytechnic’s financial statements as the Polytechnic is of view that they are not material to the Polytechnic’s financial statements. The balances and transactions of the Polytechnic are not affected by the non-consolidation. |
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| 10. | Investment in bonds | |||||||||||||||
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| The bonds bear interest rates ranging 3.2% to 5.07% per annum (FY2005/06: 3.2% to 5.07% per annum) received semi-annually in arrears. The effective interest rate ranges from 2.23% to 3.88% per annum (FY2005/06: 2.23% to 3.88% per annum). The maturity period of bonds ranges from February 2008 to September 2019. | ||||||||||||||||
| 11. | Loans to students and Student tuition and study loan fund | ||||||||||||||||||||||||||||||||||||||||||
| The loans to students are fully funded by the Ministry of Education under the Tuition Fees Loan and Study Loan scheme and the risk of write-off is borne by the Ministry. | |||||||||||||||||||||||||||||||||||||||||||
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| 12. | Sundry receivables, deposits and prepayments | ||||||||||||||||||||||||
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| 13. | Sundry payables, accruals and deposits | ||||||||||||||||||||||||
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| The drop in the provision for unconsumed leave is mainly due to the change in the basis of computation. A 10% resignation rate is applied for FY2006/07 computation to arrive at a more reasonable provision. | |||||||||||||||||||||||||
| 14. | Fees received in advance |
| The fees received in advance relate to tuition and supplementary fees paid by the students enrolled for the new academic year starting in April 2007. They have to pay their fees before the start of the academic year. | |
| 15. | Cash and cash equivalents | |||||||||||||||
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| The fixed deposits are placed with major banks in Singapore with varying maturities and interest rate terms. The effective interest rates for fixed deposits held at the balance sheet date range from 1.47% to 3.355% per annum (FY2005/06: 1.5% to 3.25% per annum). | ||||||||||||||||
| 16. | Provision for re-instatement of land |
Under the land lease agreement, the Polytechnic has the obligation to re-instate the land to its original state when the lease expires if the lessor so required. In compliance with FRS16, an estimation of the cost to remove all buildings and structures on the land has been made and provided. |
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| 17. | Operating grants from Government | ||||||||||||
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| MOE has reimbursed S$3,044,240 (FY2005/06: S$2,068,585) for the amount of output GST on the full tuition fees paid to IRAS. This amount is not included in the above operating grant received from Government. | |||||||||||||
| 18. | Other income | ||||||||||||||||||
| The other income consists mainly of income from consultancy and training programmes extended to industry partners and schools. | |||||||||||||||||||
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| 19. | Salaries, CPF and staff benefits | |||||||||||||||||||||
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| 20. | Other expenditure | |||||||||||||||||||||||||||
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| 21. | Related party transactions | ||||||||||||||||||||||||
| An entity or individual is considered a related party of the Polytechnic for the purposes of the financial statements if: (i) it possesses the ability (directly or indirectly) to control or exercise significant influence over the operating and financial decisions of the Polytechnic or vice versa; or (ii) it is subject to common control or common significant influence.
In addition to related party transactions disclosed in other notes to the financial statements, during the financial year, the Polytechnic has the following significant transactions with the related parties on terms agreed between both parties. |
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| Key management personnel compensation during the financial year is as follows: | |||||||||||||||||||||||||
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| 22. | Commitments and contingencies | ||||||||||||||||||||||||||||||||||||||||||||||||
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| As at 31 March 2007, we have made a provision for $11,588 payable to IRAS for stamp duties and $46,138 for possible penalty in view that some tenancy agreements signed during the year were not duly stamped. These documents have been sent for stamping and we are pending a reply from IRAS on the stamp duty payable and the penalty amount. | |||||||||||||||||||||||||||||||||||||||||||||||||
| 23. | Income Tax |
| In accordance with the provisions of Section 13M(2)(b) of the Income Tax Act, the income of the Fund is exempt from tax if at least 80% of the income (after providing for allowable deductions) for each year are spent for charitable purposes by the end of the following year. No provision was made as more than 80% of the income was spent on charitable purposes. | |
| 24. | Financial risk management objectives and policies | ||||||||||||||||||||||||||||||
| 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: | |||||||||||||||||||||||||||||||
| Interest rate risk | |||||||||||||||||||||||||||||||
| Surplus funds arising from Polytechnic's operations are placed in bonds and fixed deposits. The Polytechnic's earnings are affected by changes in interest rates due to the impact those changes have on its interest income from bonds and bank deposits. Funds invested in bonds held to maturity are locked against investment in new bonds and fixed deposits with higher interest rates. The carrying amounts of the bonds exposed to interest rate risk are as follows: |
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| All the fixed deposits disclosed under Note 15 are due within one year. | |||||||||||||||||||||||||||||||
| 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. |
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| 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 organisations. 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. |
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| Fair value | |||||||||||||||||||||||||||||||
| The fair value of a financial instrument is the amount at which the instrument could be exchanged or settled between knowledgeable and willing parties in an arm’s length transaction, other than in a forced or liquidation sale. | |||||||||||||||||||||||||||||||
| Financial instruments whose carrying amount approximate 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. | |||||||||||||||||||||||||||||||
| Financial instruments carried at other than fair value | |||||||||||||||||||||||||||||||
| Set out below is a comparison of carrying amounts and fair values of all of the Polytechnic’s financial instruments that are carried in the financial statements at other than fair values. | |||||||||||||||||||||||||||||||
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| 25. | Comparative figures |
| Certain comparative figures have been reclassified to conform with the current year’s presentation. | |
| 26. | Authorisation of financial statements |
| The financial statements for the year ended 31 March 2007 were authorised for issue by the Audit Committee in accordance with a resolution for the Board of Governors on 11 June 2007. | |