CDAC Audited Report 2018 by CDAC

Chinese Development Assistance Council (Limited by guarantee and not having a share capital) Registration Number: 199202625K

Audited Report Year ended 31 December 2018

KPMG LLP (Registration No. T08LL1267L), an accounting limited liability partnership registered in Singapore under the Limited Liability Partnership Act (Chapter 163A) and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (â&#x20AC;&#x153;KPMG Internationalâ&#x20AC;?), a Swiss entity.

Chinese Development Assistance Council General information

Executive Director Pok Cheng Chong Registered Office 65 Tanjong Katong Road, Singapore 436957 Auditors KPMG LLP Bankers Hong Leong Finance Limited 16 Raffles Quay #01-05, Hong Leong Building Singapore 048581 Oversea-Chinese Banking Corporation Limited 65 Chulia Street #01-00, OCBC Centre Singapore 049513 Singapura Finance Ltd 150 Cecil Street #01-00, Singapore 069543 DBS Bank Ltd 12 Marina Boulevard, DBS Asia Central@ Marina Bay Financial Centre Tower 3 Singapore 018982 United Overseas Bank Limited 80 Raffles Place, UOB Plaza Singapore 048624 Lawyer Dentons Rodyk & Davidson LLP 80 Raffles Place #33-00, UOB Plaza 1 Singapore 048624 Investment advisors Lion Global Investors Limited 65 Chulia Street #18-01, OCBC Centre Singapore 049513 UOB Asset Management Ltd 80 Raffles Place #03-00, UOB Plaza 2 Singapore 048624

Chinese Development Assistance Council Directors’ statement Year ended 31 December 2018

Directors’ statement We, the undersigned directors, on behalf of all the directors of Chinese Development Assistance Council (the “Council”), submit this audited report to the members together with the audited financial statements of the Council for the financial year ended 31 December 2018. We, being directors of Chinese Development Assistance Council, do hereby state that in our opinion: (a) the financial statements set out on pages FS1 to FS42 are drawn up so as to give a true and fair view of the financial position of the Council as at 31 December 2018 and the financial performance, changes in funds and cash flows of the Council for the year ended on that date in accordance with the provisions of the Singapore Companies Act, Chapter 50, the Singapore Charities Act (Chapter 37), and Singapore Financial Reporting Standards; and (b) at the date of this statement, there are reasonable grounds to believe that the Council will be able to pay its debts as and when they fall due. The Board of Directors has, on the date of this statement, authorised these financial statements for issue.

Patron The Patron of the Council is the Prime Minister of Singapore, Mr Lee Hsien Loong.

Directorate The directors in office at the date of this statement are as follows: Ong Ye Kung Ang Kiam Meng Baey Yam Keng Chee Hong Tat Hong Poh Hin Lim Sau Hoong Low Yen Ling Ng Bee Soon, Patrick Ng Poh Wah Ng Siew Quan Peh Nam Chuan, Adrian Sun Xueling Tan Bock Huat Tan Chin Siong, Sam Tan Chye Hee, Gilbert Wan Shung Ming Yam Ziming, Alex

(Chairman) (Appointed on 21 June 2018)

(Appointed on 21 June 2018) (Appointed on 21 June 2018)

Chinese Development Assistance Council Directors’ statement Year ended 31 December 2018

Trustees The trustees in office at the date of this statement are as follows: Chua Thian Poh Cheng Wai Keung Chew Leong-Chee, Tony Ch’ng Jit Koon Gan Kim Yong Ho Nai Chuen, Charles Kuah Boon Wee Lee Kwok Kie, Patrick Lee Sze Leong Lew Chee Beng Liew Mun Leong Lim Ming Yan Ng Chee Tat, Philip Ng San Tiong, Roland Ong Ye Kung Pang Lim Pek Lian Guan Phua Kiah Mai Quek Meng Tong, George Seow Choke Meng Tan Aik Hock Tan Cheng Gay Tan Kang Uei, Anthony Wu Hsioh Kwang

(Chairman)

(Re-appointed on 21 June 2018) (Appointed on 21 June 2018) (Appointed on 21 June 2018)

(Appointed on 21 June 2018) (Appointed on 21 June 2018) (Appointed on 21 June 2018)

(Appointed on 21 June 2018)

Directors’ interests The Council has no share capital and its liability is limited by guarantee. Neither at the end of, nor at any time during the financial year, was the Council a party to any arrangement whose objects are, or one of whose objects is, to enable the directors of the Council to acquire benefits by means of the acquisition of shares in or debentures of the Council or any other body corporate. Since the end of the last financial year, no director has received or become entitled to receive a benefit by reason of a contract made by the Council or a related corporation with the director or with a firm of which he is a member or with a company in which he has a substantial financial interest.

KPMG LLP 16 Raffles Quay #22-00 Hong Leong Building Singapore 048581

Telephone Fax Internet

+65 6213 3388 +65 6225 0984 www.kpmg.com.sg

Independent auditors’ report Members of the Council Chinese Development Assistance Council

Report on the audit of the financial statements Opinion We have audited the financial statements of Chinese Development Assistance Council (‘the Council’), which comprise the balance sheet as at 31 December 2018, statement of comprehensive income, statement of changes in funds and statement of cash flows for the year then ended, and notes to the financial statement, including a summary of significant accounting policies, as set out on pages FS1 to FS42. In our opinion, the accompanying financial statements are properly drawn up in accordance with the provisions of the Companies Act, Chapter 50 (‘the Companies Act’), the Charities Act, Chapter 37 and other relevant regulations (‘the Charities Act and Regulations’) and Financial Reporting Standards in Singapore (‘FRSs’) so as to give a true and fair view of the financial position of the Council as at 31 December 2018 and of the financial performance, changes in funds and cash flows of the Council for the year ended on that date. Basis for opinion We conducted our audit in accordance with Singapore Standards on Auditing (‘SSAs’). Our responsibilities under those standards are further described in the ‘Auditors’ responsibilities for the audit of the financial statements’ section of our report. We are independent of the Council in accordance with the Accounting and Corporate Regulatory Authority Code of Professional Conduct and Ethics for Public Accountants and Accounting Entities (‘ACRA Code’) together with the ethical requirements that are relevant to our audit of the financial statements in Singapore, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ACRA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Other information Management is responsible for the other information contained in the audited report. Other information is defined as all information in the audited report other than the financial statements and our auditors’ report thereon. We have obtained the Directors’ statement and general information, prior to the date of this auditors’ report.

Chinese Development Assistance Council Independent auditors’ report Year ended 31 December 2018

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed on the other information obtained prior to the date of this auditors’ report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of management and those charged with governance for the financial statements Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the provisions of the Companies Act, Charities Act and Regulations and FRSs, and for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair financial statements and to maintain accountability of assets. In preparing the financial statements, management is responsible for assessing the Council’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Council or to cease operations, or has no realistic alternative but to do so. Those charged with governance comprises the board of directors and trustees. Their responsibilities include overseeing the Council’s financial reporting process. Auditors’ responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SSAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Chinese Development Assistance Council Independent auditors’ report Year ended 31 December 2018

As part of an audit in accordance with SSAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: 

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls.



Obtain an understanding of internal controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Council’s internal controls.



Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.



Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Council’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Council to cease to continue as a going concern.



Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal controls that we identify during our audit.

Report on other legal and regulatory requirements In our opinion, the accounting and other records required to be kept by the Council have been properly kept in accordance with the provisions of the Companies Act and the Charities Act and Regulations.

Chinese Development Assistance Council Financial statements Year ended 31 December 2018

Balance sheet As at 31 December 2018 2018 EndowOperation Note Fund ment Fund $ $ Non-current assets Plant and equipment Direct investments Interest in associate

4 5 6

Current assets Curriculum materials Other receivables Derivative assets Investments Cash and cash equivalents

7 7 8 9

Total assets Reserves Accumulated Endowment Fund Accumulated Operation Fund Fair value reserve Total reserves Current liability Other payables Total liability Total reserves and liabilities

10 11 12

699,079 34,000 1,621,707 2,354,786

Total $

– – – –

699,079 34,000 1,621,707 2,354,786

31,562 – 2,757,160 447,565 42,966 216,948 5,603,821 52,410,242 18,400,495 12,017,467 26,836,004 65,092,222 29,190,790 65,092,222

31,562 3,204,725 259,914 58,014,063 30,417,962 91,928,226 94,283,012

–

65,044,109

25,585,538 – (15,514) – 25,570,024 65,044,109

65,044,109 25,585,538 (15,514) 90,614,133

2017 EndowOperation Fund ment Fund $ $ 1,110,209 38,750 1,197,020 2,345,979

Total $

– – – –

1,110,209 38,750 1,197,020 2,345,979

29,886 – 2,925,329 346,875 56,520 384,909 6,270,934 57,550,027 12,587,091 6,333,576 21,869,760 64,615,387 24,215,739 64,615,387

29,886 3,272,204 441,429 63,820,961 18,920,667 86,485,147 88,831,126

–

64,495,415

20,456,373 – (10,764) – 20,445,609 64,495,415

64,495,415 20,456,373 (10,764) 84,941,024

3,620,766 3,620,766

48,113 48,113

3,668,879 3,668,879

3,770,130 3,770,130

119,972 119,972

3,890,102 3,890,102

29,190,790

65,092,222

94,283,012

24,215,739

64,615,387

88,831,126

The accompanying notes form an integral part of these financial statements.

FS1

Chinese Development Assistance Council Financial statements Year ended 31 December 2018

Statement of comprehensive income Year ended 31 December 2018 2018 Operation EndowNote Fund ment Fund $ $ Income Voluntary income: Donations via Central Provident Fund (“CPF”) contributions to CDAC fund Other donations/ sponsorships 15 Income from charitable activities: Fee income from education programme (including CDAC Centres) Fee income from Fulfilling Ageing programme Grants and subsidies from government agencies 16 Other income Total income

Expenses Agency fees paid to CPF Board

Total $

2017 Operation EndowFund ment Fund $ $

Total $

24,505,567

–

24,505,567

23,640,885

–

23,640,885

533,664 25,039,231

594,510 594,510

1,128,174 25,633,741

467,249 24,108,134

477,146 477,146

944,395 24,585,280

1,971,933

–

1,971,933

1,818,140

–

1,818,140

9,233

–

9,233

20,988

–

20,988

4,361,898 6,343,064 142,680 31,524,975

– – 38,732 633,242

4,361,898 6,343,064 181,412 32,158,217

4,431,220 6,270,348 84,775 30,463,257

– – 25,608 502,754

4,431,220 6,270,348 110,383 30,966,011

(582,773)

–

(11,078,428)

–

(4,825,842)

–

(4,825,842)

(4,273,740)

–

(4,273,740)

(971,960)

–

(971,960)

(882,755)

–

(882,755)

(3,467,399)

–

(3,467,399)

(3,429,752)

–

(3,429,752)

(805,318) (559,880)

– –

(805,318) (559,880)

(609,274) (546,093)

– –

(609,274) (546,093)

(2,315,927) 18 (24,024,754)

– –

Governance costs (187,919) Operating lease expense for CDAC headquarters/ Temporary Occupation Licence fee (476,454) Administration and finance (1,005,519) 20 (26,277,419) Total expenses incurred

–

Charitable activities: Student & Parent Education programme Family & Worker Support programme Fulfilling Ageing programme Community Outreach & Engagement programme Volunteers Engagement & Development programme One-Stop Service CDAC-SFCCA Hardship Assistance and CDAC-SFCCA Bursary schemes

(582,773)

(629,674)

(11,078,428) (10,433,556)

(2,315,927) (1,759,984) (24,024,754) (21,935,154) (187,919)

(229,289)

– (476,454) (476,454) (244) (1,005,763) (977,580) (244) (26,277,663) (24,248,151)

–

(629,674)

– (10,433,556)

– (1,759,984) – (21,935,154) –

(229,289)

– (476,454) (114) (977,694) (114) (24,248,265)

The accompanying notes form an integral part of these financial statements.

FS2

Chinese Development Assistance Council Financial statements Year ended 31 December 2018

Statement of comprehensive income (cont’d) Year ended 31 December 2018 2018 EndowOperation Note Fund ment Fund $ $ Investment income/(loss): Fund management investment schemes Direct investments Gain on disposal of plant and equipment Investment-related expenditures: Fund management investment costs Share of loss of associate

Net surplus for the year Other comprehensive income Items that are or may be reclassified subsequently to profit or loss: Net change in fair value – Equity investment at FVOCI Other comprehensive income for the year, net of tax Total comprehensive income for the year

21 21

(32,968) 2,175

97,741 –

(1,535)

–

(10,750) (75,313) (118,391) 5,129,165

(182,045) – (84,304) 548,694

Total $

2017 EndowOperation Fund ment Fund $ $

Total $

64,773 2,175

284,656 2,328

2,074,685 –

2,359,341 2,328

(1,535)

14,371

–

14,371

(192,795) (75,313) (202,695) 5,677,859

(10,570) (98,050) 192,735

(303,576) – 1,771,109

(314,146) (98,050) 1,963,844

6,407,841

2,273,749

8,681,590

(4,750)

–

(4,750)

1,750

–

1,750

(4,750)

–

(4,750)

1,750

–

1,750

6,409,591

2,273,749

8,683,340

5,124,415

548,694

5,673,109

The accompanying notes form an integral part of these financial statements.

FS3

Chinese Development Assistance Council Financial statements Year ended 31 December 2018

Statement of cash flows Year ended 31 December 2018 Note Cash flows from operating activities Cash receipts from: Donations via CPF contributions to CDAC fund Other donations Student fees including CDAC Centres programmes Fee income from Fulfilling Ageing programme Job Credits from government Grants from government agencies Cash paid to: Grants received for Skills Training Award scheme CPF Board for agency fees Singapore Land Authority for lease rental/ Temporary Occupation Licence Suppliers and employees Net cash from operating activities

2018 Endowment Fund $

Total $

Operation Fund $

2017 Endowment Fund $

24,415,929 521,086

– 590,405

24,415,929 1,111,491

23,567,145 462,249

– 475,551

23,567,145 937,800

1,658,889

–

1,658,889

1,800,968

–

1,800,968

9,233 93,355

– –

9,233 93,355

20,988 86,505

– –

20,988 86,505

4,624,370

–

4,624,370

4,241,794

–

4,241,794

(37,233) (582,773) (476,454) (24,690,253) 5,536,149

Cash flows from investing activities Purchase of plant and equipment Government grant to fund capital expenditure Proceeds from disposal of plant and equipment Interest received Dividends received Investment in associate Funds with investment managers: Purchase of financial assets Proceeds from disposal of financial assets (Increase)/decrease of cash and cash equivalents held with fund managers Net cash (used in)/from investing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year

Operation Fund $

– (193) 590,212

(37,233) (582,773)

83,426 (629,674)

(476,454) (24,690,446)

(476,454) (23,208,145)

6,126,361

5,948,802

(387,555)

–

(387,555)

421,125

–

421,125

60 232,073 31,405 (500,000)

– 1,439,134 122,972 –

(934,767) –

– – – (114) 475,437

– –

83,426 (629,674) (476,454) (23,208,259) 6,424,239

(934,767) –

60 1,671,207 154,377 (500,000)

14,881 219,734 26,473 (1,000,000)

– 1,543,339 122,805 –

14,881 1,763,073 149,278 (1,000,000)

(1,607,340)

(47,649,425)

(49,256,765)

(4,795,143)

(29,855,326)

(34,650,469)

2,087,487

51,180,998

53,268,485

4,006,939

25,250,755

29,257,694

(5,065,561)

(5,704,516)

626,975

2,960,757

3,587,732

(638,955) (361,700)

– –

Total $

28,118

(333,582)

(1,834,908)

22,330

(1,812,578)

5,174,449

618,330

5,792,779

4,113,894

497,767

4,611,661

12,246,864

4,967,459

17,214,323

8,132,970

4,469,692

12,602,662

17,421,313

5,585,789

23,007,102

12,246,864

4,967,459

17,214,323

The accompanying notes form an integral part of these financial statements.

FS4

Chinese Development Assistance Council Financial statements Year ended 31 December 2018

Statement of changes in funds Year ended 31 December 2018 Endowment ----------------- Operation Fund ---------------Fund Accumulated Fair value Accumulated fund reserve Total fund $ $ $ $ At 1 January 2017

14,048,532

(12,514)

Total reserves $

14,036,018

62,221,666

76,257,684

Total comprehensive income for the year Net surplus for the year

6,407,841

–

6,407,841

2,273,749

8,681,590

Other comprehensive income Net change in fair value of available-for-sale financial assets Total other comprehensive income Total comprehensive income for the year

– – 6,407,841

1,750 1,750 1,750

1,750 1,750 6,409,591

– – 2,273,749

1,750 1,750 8,683,340

20,456,373

(10,764)

20,445,609

64,495,415

84,941,024

At 31 December 2017

The accompanying notes form an integral part of these financial statements.

FS5

Chinese Development Assistance Council Financial statements Year ended 31 December 2018

Statement of changes in funds (cont’d) Year ended 31 December 2018 Endowment ----------------- Operation Fund ---------------Fund Accumulated Fair value Accumulated fund reserve Total fund $ $ $ $ At 1 January 2018

20,456,373

(10,764)

Total comprehensive income for the year Net surplus for the year

5,129,165

Other comprehensive income Net change in fair value – Equity investment at FVOCI Total other comprehensive income Total comprehensive income for the year

– – 5,129,165

(4,750) (4,750) (4,750)

25,585,538

(15,514)

At 31 December 2018

–

Total reserves $

20,445,609

64,495,415

84,941,024

5,129,165

548,694

5,677,859

(4,750) (4,750) 5,124,415

– – 548,694

(4,750) (4,750) 5,673,109

25,570,024

65,044,109

90,614,133

The accompanying notes form an integral part of these financial statements.

FS6

Chinese Development Assistance Council Financial statements Year ended 31 December 2018

Notes to the financial statements These notes form an integral part of the financial statements. The financial statements were authorised for issue by the Board of Directors on 29 May 2019.

Domicile and activities Chinese Development Assistance Council (the “Council”), a public company limited by guarantee and not having a share capital, is incorporated in Singapore. The registered address of the Council is at 65 Tanjong Katong Road, Singapore 436957. The Patron of the Council is the Prime Minister of Singapore, Mr Lee Hsien Loong. The Council’s priority is to help the less successful individuals of the Chinese community in Singapore maximise their potential and strive for social mobility through its various assistance schemes. To achieve this, the Council organises low fee education programmes and provides families with financial and employment support. In addition, the Council has set up CDAC Centres to provide enrichment programmes for students as well as other services for families. The Council has an Operation Fund which is used to finance the Council’s operations and programmes, and an Endowment Fund which is used to provide funds which can only be used for the Council’s operations. Please refer to notes 10 and 11 for details of the Council’s Endowment Fund and Operation Fund, respectively. The Council has been granted Institution of a Public Character (“IPC”) status since 22 May 1992. The current tax exemption status will expire on 21 May 2022. The Council is registered as a charity under the Charities Act, Chapter 37 since 23 July 1992.

Basis of preparation

2.1

Statement of compliance These financial statements have been prepared in accordance with the Singapore Financial Reporting Standards (“FRS”). This is the first set of the Council’s annual financial statements in which FRS 115 Revenue from Contracts with Customers and FRS 109 Financial Instruments have been applied. Changes to significant accounting policies are described in note 2.5. The Council had obtained an exemption order from the Accounting & Corporate Regulatory Authority to prepare and present balance sheets, statements of comprehensive income, statements of cash flows and statements of changes in funds for its Operation Fund and Endowment Fund under Section 202(1) of the Singapore Companies Act, if such presentation results in a fair presentation of its financial position, financial performance, cash flows and changes in funds.

FS7

Chinese Development Assistance Council Financial statements Year ended 31 December 2018

The directors are of the opinion that the preparation and presentation of separate balance sheets, statements of comprehensive income, statements of cash flows and statements of changes in funds for its Operation Fund and Endowment Fund and their aggregation results in a fair presentation of the financial position, financial performance, cash flows and changes in funds of the Council.

2.2

Basis of measurement The financial statements have been prepared on the historical cost basis except for certain financial assets and liabilities which are measured at fair value.

2.3

Functional and presentation currency The financial statements are presented in Singapore dollars, which is the Council’s functional currency. All financial information is presented in Singapore dollars, unless otherwise stated.

2.4

Use of estimates and judgements The preparation of financial statements in conformity with FRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. Information about significant areas of estimation uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amount recognised in the financial statements is included in the following notes:  

2.5

Note 6 – Classification and valuation of interest in associate; Note 23 – Financial risk management

Changes in accounting policies On 1 January 2018, the Council has adopted all the new and revised FRSs and Interpretations to FRSs that are mandatory for application on that date. The adoption of these new and revised FRSs and Interpretations to FRSs has no significant impact on the financial statements of the Council.

Significant accounting policies The accounting policies set out below have been applied consistently to all periods presented in these financial statements.

3.1

Basis of consolidation Investment in associate Associates are those entities in which the Council has significant influence, but not control or joint control, over the financial and operating policies. Significant influence is presumed to exist when the Council holds between 20% or more of the voting power of another entity.

FS8

Chinese Development Assistance Council Financial statements Year ended 31 December 2018

Investment in associate is accounted for using equity accounting. Investment in associate is recognised initially at cost, which includes transaction costs. Subsequent to initial recognition, the Council’s financial statements includes the Council’s share of losses of equity accounted investee, from the date that significant influence commences until the date that significant influence ceases. When the Council’s share of losses exceeds its interest in an equity-accounted investee, the carrying amount of the investment, together with any long-term interests that form part thereof, is reduced to zero, and the recognition of further losses is discontinued. Impairment of associates Investment in associate is assessed at the end of each reporting period to determine whether there is any objective evidence that it is impaired in accordance with note 3.6 (i). An impairment loss in respect of an associate is measured by comparing the recoverable amount of the investment with its carrying amount in accordance with note 3.6 (ii). An impairment loss is recognised in profit or loss. An impairment loss is reversed if there has been a favourable change in the estimates used to determine the recoverable amount.

3.2

Foreign currency Foreign currency transactions Transactions in foreign currencies are translated to the functional currency of the Council at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated to the functional currency at the exchange rate at that date. The foreign currency gain or loss on the monetary items is the difference between amortised cost in the functional currency at the beginning of the year, adjusted for effective interest and payments during the year, and the amortised cost in foreign currency translated at the exchange rate at the end of the year. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are translated to the functional currency at the exchange rate at the date that the fair value was determined. Non-monetary items in a foreign currency that are measured in terms of historical cost are translated using the exchange rate at the date of the transaction. Foreign currency differences arising on translation are recognised in profit or loss, except for differences arising on the retranslation of equity investment at Fair Value through Other Comprehensive Income (“FVOCI”) which are recognised in other comprehensive income.

3.3

Plant and equipment Items of plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the asset. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment. When parts of an item of plant and equipment have different useful lives, they are accounted for as separate items (major components) of plant and equipment.

FS9

Chinese Development Assistance Council Financial statements Year ended 31 December 2018

The gain or loss on disposal of an item of plant and equipment (calculated as the difference between the net proceeds from disposal and the carrying amount of the item) is recognised in profit or loss. The cost of replacing a component of an item of plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the component will flow to the Council and its cost can be measured reliably. The carrying amount of the replaced component is derecognised. The costs of the day-to-day servicing of plant and equipment are recognised in profit or loss as incurred. Depreciation is recognised as an expense in profit or loss on a straight-line basis over the estimated useful lives of each component of an item of plant and equipment. Depreciation is recognised from the date that the plant and equipment are installed and are ready for use, or in respect of internally constructed assets, from the date that the asset is completed and ready for use. The estimated useful lives for the current and comparative years are as follows: Office equipment Computer equipment Furniture and fittings Renovation

3 years 2 years 5 years 5 years

Depreciation methods, useful lives and residual values are reviewed at the end of each reporting period and adjusted if appropriate.

3.4

Funds Separate funds are maintained for amounts received for specific purposes. Interest income is allocated to the respective funds, where appropriate, on a specific identifiable basis.

3.5

Financial instruments

(i)

Recognition and initial measurement Non-derivative financial assets and financial liabilities Trade receivables and debt investments issued are initially recognised when they are originated. All other financial assets and financial liabilities are initially recognised when the Council becomes a party to the contractual provisions of the instrument. A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus, for an item not at fair value through profit or loss (â&#x20AC;&#x153;FVTPLâ&#x20AC;?), transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.

FS10

Chinese Development Assistance Council Financial statements Year ended 31 December 2018

(ii)

Classification and subsequent measurement Non-derivative financial assets – Policy applicable from 1 January 2018 On initial recognition, a financial asset is classified as measured at: amortised cost; FVOCI; or FVTPL. Financial assets are not reclassified subsequent to their initial recognition unless the Council changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model. Financial assets at amortised cost A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:  

it is held within a business model whose objective is to hold assets to collect contractual cash flows; and its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Equity investments at FVOCI On initial recognition of an equity investment that is not held-for-trading, the Council may irrevocably elect to present subsequent changes in the investment’s fair value in Other Comprehensive Income (“OCI”). This election is made on an investment-by-investment basis. Financial assets at FVTPL All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at FVTPL. On initial recognition, the Council may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortised cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise. Financial assets: Business model assessment – Policy applicable from 1 January 2018 The Council makes an assessment of the objective of the business model in which a financial asset is held at a portfolio level because this best reflects the way the business is managed and information is provided to management. The information considered includes: 

  

the stated policies and objectives for the portfolio and the operation of those policies in practice. These include whether management’s strategy focuses on earning contractual interest income, maintaining a particular interest rate profile, matching the duration of the financial assets to the duration of any related liabilities or expected cash outflows or realising cash flows through the sale of the assets; how the performance of the portfolio is evaluated and reported to the Council’s management; the risks that affect the performance of the business model (and the financial assets held within that business model) and how those risks are managed; how managers of the business are compensated – e.g. whether compensation is based on the fair value of the assets managed or the contractual cash flows collected; and

FS11

Chinese Development Assistance Council Financial statements Year ended 31 December 2018



the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and expectations about future sales activity.

Transfers of financial assets to third parties in transactions that do not qualify for derecognition are not considered sales for this purpose, consistent with the Council’s continuing recognition of the assets. Financial assets that are held-for-trading or are managed and whose performance is evaluated on a fair value basis are measured at FVTPL. Non-derivative financial assets: Assessment whether contractual cash flows are solely payments of principal and interest – Policy applicable from 1 January 2018 For the purposes of this assessment, ‘principal’ is defined as the fair value of the financial asset on initial recognition. ‘Interest’ is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs (e.g. liquidity risk and administrative costs), as well as a profit margin. In assessing whether the contractual cash flows are solely payments of principal and interest, the Council considers the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition. In making this assessment, the Council considers:    

contingent events that would change the amount or timing of cash flows; terms that may adjust the contractual coupon rate, including variable rate features; prepayment and extension features; and terms that limit the Council’s claim to cash flows from specified assets (e.g. non-recourse features).

A prepayment feature is consistent with the solely payments of principal and interest criterion if the prepayment amount substantially represents unpaid amounts of principal and interest on the principal amount outstanding, which may include reasonable additional compensation for early termination of the contract. Additionally, for a financial asset acquired at a significant discount or premium to its contractual par amount, a feature that permits or requires prepayment at an amount that substantially represents the contractual par amount plus accrued (but unpaid) contractual interest (which may also include reasonable additional compensation for early termination) is treated as consistent with this criterion if the fair value of the prepayment feature is insignificant at initial recognition. Non-derivative financial assets: Subsequent measurement and gains and losses – Policy applicable from 1 January 2018 Financial assets at FVTPL These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognised in profit or loss.

FS12

Chinese Development Assistance Council Financial statements Year ended 31 December 2018

Financial assets at amortised cost These assets are subsequently measured at amortised cost using the effective interest method. The amortised cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss. Equity investments at FVOCI These assets are subsequently measured at fair value. Dividends are recognised as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognised in OCI and are never reclassified to profit or loss. Non-derivative financial assets – Policy applicable before 1 January 2018 The Council classifies non-derivative financial assets into the following categories: financial assets at FVTPL, held-to-maturity financial assets, loans and receivables and available-for-sale financial assets. Non-derivative financial assets: Subsequent measurement and gains and losses – Policy applicable before 1 January 2018 Financial assets at FVTPL A financial asset was classified at FVTPL if it was classified as held-for-trading or was designated as such upon initial recognition. Financial assets were designated at FVTPL if the Council managed such investments and made purchase and sale decisions based on their fair value in accordance with the Council’s documented risk management or investment strategy. Directly attributable transaction costs were recognised in profit or loss as incurred. Financial assets at FVTPL were measured at fair value, and changes therein, which took into account any dividend income, were recognised in profit or loss. Financial assets classified as held-for-trading comprised equity investments actively managed by the Council’s Investment Committee to address short-term liquidity needs. Financial assets designated at FVTPL comprised equity investments that otherwise would have been classified as available-for-sale. Held-to-maturity financial assets If the Council had the positive intent and ability to hold debt investments to maturity, then such financial assets were classified as held-to-maturity. Held-to-maturity financial assets are initially measured at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, held-to-maturity financial assets were measured at amortised cost using the effective interest method, less any impairment losses. Held-to-maturity financial assets comprised debt investments.

FS13

Chinese Development Assistance Council Financial statements Year ended 31 December 2018

Loans and receivables Loans and receivables were financial assets with fixed or determinable payments that were not quoted in an active market. Such assets are initially measured at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, loans and receivables were measured at amortised cost using the effective interest method, less any impairment losses. Loans and receivables comprised cash and cash equivalents, and trade and other receivables. Available-for-sale financial assets Available-for-sale financial assets were non-derivative financial assets that were designated as available-for-sale or were not classified in any of the above categories of financial assets. Available-for-sale financial assets are initially measured at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, they were measured at fair value and changes therein, other than impairment losses, interest income and foreign currency differences on available-for-sale debt investments, were recognised in OCI and accumulated in the fair value reserve in equity. When these amounts were derecognised, the gain or loss accumulated in equity was reclassified to profit or loss. Available-for-sale financial assets comprised equity investments and debt investments. Non-derivative financial liabilities: Classification, subsequent measurement and gains and losses Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognised in profit or loss. Directly attributable transaction costs are recognised in profit or loss as incurred. Other financial liabilities are initially measured at fair value less directly attributable transaction costs. They are subsequently measured at amortised cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in profit or loss. These financial liabilities comprised loans and borrowings, bank overdrafts, and trade and other payables. (iii)

Derecognition Financial assets The Council derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Council neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset. The Council enters into transactions whereby it transfers assets recognised in its balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognised.

FS14

Chinese Development Assistance Council Financial statements Year ended 31 December 2018

Financial liabilities The Council derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire. The Council also derecognises a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognised at fair value. On derecognition of a financial liability, the difference between the carrying amount extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognised in profit or loss. (iv)

Offsetting Financial assets and financial liabilities are offset and the net amount presented in the balance sheet when, and only when, the Council currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.

(v)

Cash and cash equivalents Cash and cash equivalents comprise cash balances and short-term deposits with maturities of three months or less from the date of acquisition that are subject to an insignificant risk of changes in their fair value, and are used by the Council in the management of its short-term commitments. For the purpose of the statement of cash flows, bank overdrafts that are repayable on demand and that form an integral part of the Council’s cash management are included in cash and cash equivalents.

3.6

Impairment

(i)

Non-derivative financial assets Policy applicable from 1 January 2018 The Council recognises loss allowances for Expected Credit Loss (“ECLs”) on financial assets measured at amortised costs. Loss allowances of the Council are measured on either of the following bases:  

12-month ECLs: these are ECLs that result from default events that are possible within the 12 months after the reporting date (or for a shorter period if the expected life of the instrument is less than 12 months); or Lifetime ECLs: these are ECLs that result from all possible default events over the expected life of a financial instrument or contract asset.

Simplified approach The Council applies the simplified approach to provide for ECLs for all student fees receivables. The simplified approach requires the loss allowance to be measured at an amount equal to lifetime ECLs.

FS15

Chinese Development Assistance Council Financial statements Year ended 31 December 2018

General approach The Council applies the general approach to provide for ECLs on all other financial instruments. Under the general approach, the loss allowance is measured at an amount equal to 12-month ECLs at initial recognition. At each reporting date, the Council assesses whether the credit risk of a financial instrument has increased significantly since initial recognition. When credit risk has increased significantly since initial recognition, loss allowance is measured at an amount equal to lifetime ECLs. When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECLs, the Council considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Council’s historical experience and informed credit assessment and includes forward-looking information. If credit risk has not increased significantly since initial recognition or if the credit quality of the financial instruments improves such that there is no longer a significant increase in credit risk since initial recognition, loss allowance is measured at an amount equal to 12-month ECLs. The Council considers a financial asset to be in default when the borrower is unlikely to pay its credit obligations to the Council in full, without recourse by the Council to actions such as realising security (if any is held). The maximum period considered when estimating ECLs is the maximum contractual period over which the Council is exposed to credit risk. Measurement of ECLs ECLs are probability-weighted estimates of credit losses. Credit losses are measured at the present value of all cash shortfalls (i.e. the difference between the cash flows due to the entity in accordance with the contract and the cash flows that the Council expects to receive). ECLs are discounted at the effective interest rate of the financial asset. Credit-impaired financial assets At each reporting date, the Council assesses whether financial assets carried at amortised cost are credit-impaired. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial asset is credit-impaired includes the following observable data:     

significant financial difficulty of the borrower or issuer; a breach of contract such as a default or being more than 90 days past due; the restructuring of a loan or advance by the Council on terms that the Council would not consider otherwise; it is probable that the borrower will enter bankruptcy or other financial reorganisation; or the disappearance of an active market for a security because of financial difficulties.

Presentation of allowance for ECLs in the balance sheet Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of these assets.

FS16

Chinese Development Assistance Council Financial statements Year ended 31 December 2018

Write-off The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect of recovery. This is generally the case when the Council determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Councilâ&#x20AC;&#x2122;s procedures for recovery of amounts due. Policy applicable before 1 January 2018 A financial asset not carried at FVTPL, including an interest in an associate and joint venture, was assessed at the end of each reporting period to determine whether there was objective evidence that it was impaired. A financial asset was impaired if objective evidence indicated that a loss event(s) had occurred after the initial recognition of the asset, and that the loss event(s) had an impact on the estimated future cash flows of that asset that could be estimated reliably. Objective evidence that financial assets (including equity investments) were impaired included default or delinquency by a debtor, restructuring of an amount due to the Council on terms that the Council would not consider otherwise, indications that a debtor or issuer would enter bankruptcy, adverse changes in the payment status of borrowers or issuers, economic conditions that correlate with defaults or the disappearance of an active market for a security. In addition, for an investment in an equity security, a significant or prolonged decline in its fair value below its cost was objective evidence of impairment. Loans and receivables The Council considered evidence of impairment for loans and receivables at both an individual asset and collective level. All individually significant assets were individually assessed for impairment. Those found not to be impaired were then collectively assessed for any impairment that had been incurred but not yet identified. Assets that were not individually significant were collectively assessed for impairment. Collective assessment was carried out by grouping together assets with similar risk characteristics. In assessing collective impairment, the Council used historical information on the timing of recoveries and the amount of loss incurred, and made an adjustment if current economic and credit conditions were such that the actual losses were likely to be greater or lesser than suggested by historical trends. An impairment loss was calculated as the difference between the assetâ&#x20AC;&#x2122;s carrying amount and the present value of the estimated future cash flows, discounted at the assetâ&#x20AC;&#x2122;s original effective interest rate. Losses were recognised in profit or loss and reflected in an allowance account. When the Council considered that there were no realistic prospects of recovery of the asset, the relevant amounts were written off. If the amount of impairment loss subsequently decreased and the decrease was related objectively to an event occurring after the impairment was recognised, then the previously recognised impairment loss was reversed through profit or loss.

FS17

Chinese Development Assistance Council Financial statements Year ended 31 December 2018

Available-for-sale financial assets Impairment losses on available-for-sale financial assets were recognised by reclassifying the losses accumulated in the fair value reserve in equity to profit or loss. The amount reclassified was the difference between the acquisition cost (net of any principal repayment and amortisation) and the current fair value, less any impairment loss recognised previously in profit or loss. If the fair value of an impaired available-for-sale debt security subsequently increased and the increase was related objectively to an event occurring after the impairment loss was recognised, then the impairment loss was reversed through profit or loss. Impairment losses recognised in profit or loss for an investment in an equity instrument classified as available-for-sale were not reversed through profit or loss. (ii)

Non-financial assets The carrying amounts of the Council’s non-financial assets, other than curriculum materials, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. An impairment loss is recognised if the carrying amount of an asset or its related cash-generating unit (CGU) exceeds its estimated recoverable amount. The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. 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 or CGU. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs. The Council’s corporate assets do not generate separate cash inflows and are utilised by more than one CGU. Corporate assets are allocated to CGUs on a reasonable and consistent basis and tested for impairment as part of the testing of the CGU to which the corporate asset is allocated. Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to the CGU (group of CGUs), and then to reduce the carrying amounts of the other assets in the CGU (group of CGUs) on a pro rata basis. An impairment loss in respect of assets recognised in prior periods is assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation, if no impairment loss had been recognised.

3.7

Curriculum materials Curriculum materials are stated at the lower of cost and net realisable value.

FS18

Chinese Development Assistance Council Financial statements Year ended 31 December 2018

3.8

Provisions A provision is recognised if, as a result of a past event, the Council has a present legal or constructive obligation that can be estimated reliably and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.

3.9

Income recognition Donations Donations are recognised on an accrual basis. Government grants Government grants consist of grants received or receivable. Grants that compensate the Council for expenses incurred are recognised as income in profit or loss in the period in which it is receivable. Grants that compensate the Council for the cost of an asset are deducted in arriving at the carrying amount of the asset. Such grants are recognised in profit or loss over the life of the depreciable asset by way of a reduced depreciation charge. Contributions from the CPF scheme Contributions from the CPF scheme are recognised when the right to receive payment has been established. Student fees income Student fees income is recognised when the Council satisfies the performance obligation (â&#x20AC;&#x153;POâ&#x20AC;?) by transferring control of a service to the students. The amount of student fees income recognised is the amount of the fees allocated to the satisfied PO. The fees is allocated to each PO in the contract on the basis of the relative stand-alone fees of the promised services. A discount or waiver is allocated to the PO if it relates specifically to that PO. The fees income is recognised over time following the progress towards complete satisfaction of that PO. Interest and dividend income Interest income is recognised as it accrues in profit or loss, using the effective interest method. Dividend income is recognised in profit or loss on the date that the Councilâ&#x20AC;&#x2122;s right to receive payment is established, which in the case of quoted securities is the ex-dividend date.

3.10

Operating leases Where the Council has the use of assets under operating leases, payments made under the leases are recognised in profit or loss on a straight-line basis over the term of the lease.

FS19

Chinese Development Assistance Council Financial statements Year ended 31 December 2018

3.11

Employee benefits Defined contribution plans A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognised as an employee benefit expense in profit or loss in the periods during which related services are rendered by employees. Short-term employee benefits Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognised for the amount expected to be paid under the short-term cash bonus if the Council has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the obligation can be estimated reliably.

3.12

New standards and interpretations not adopted A number of new standards and interpretations and amendments to standards are effective for annual periods beginning after 1 January 2018 and earlier application is permitted; however, the Council has not early adopted the new or amended standards and interpretations in preparing these financial statements. The following new FRSs, interpretations and amendments to FRSs are effective for annual periods beginning after 1 January 2018: Applicable to 2019 financial statements  FRS 116 Leases;  INT FRS 123 Uncertainty over Income Tax Treatments;  Long-term Interests in Associates and Joint Ventures (Amendments to FRS 28);  Prepayment Features with Negative Compensation (Amendments to FRS 109);  Previously Held Interest in a Joint Operation (Amendments to FRS 103 and FRS 111);  Income Tax Consequences of Payments on Financial Instruments Classified as Equity (Amendments to FRS 12);  Borrowing Costs Eligible for Capitalisation (Amendments to FRS 23); and  Plan Amendment, Curtailment or Settlement (Amendments to FRS 19) Applicable to 2021 financial statements  FRS 117 Insurance Contracts Mandatory effective date deferred  Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (Amendments to FRS 110 and FRS 28) The Council has assessed the estimated impact that initial application of FRS 116 will have on the financial statements. The Council’s assessment of FRS 116, which is expected to have a more significant impact on the Council, is as described below.

FS20

Chinese Development Assistance Council Financial statements Year ended 31 December 2018

FRS 116 FRS 116 introduces a single, on-balance sheet lease accounting model for lessees. A lessee recognises a right-of-use (ROU) asset representing its right to use the underlying asset and a lease liability representing its obligation to make lease payments. There are recognition exemptions for short-term leases and leases of low-value items. Lessor accounting remains similar to the current standard – i.e. lessors continue to classify leases as finance or operating leases. FRS 116 replaces existing lease accounting guidance, including FRS 17 Leases, INT FRS 104 Determining whether an Arrangement contains a Lease, INT FRS 15 Operating Leases – Incentives and INT FRS 27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease. The standard is effective for annual periods beginning on or after 1 January 2019, with early adoption permitted. The Council plans to apply FRS 116 initially on 1 January 2019, using the modified retrospective approach. Therefore, the cumulative effect of adopting FRS 116 will be recognised as an adjustment to the opening balance of retained earnings at 1 January 2019, with no restatement of comparative information. The Council plans to apply the practical expedient to grandfather the definition of a lease on transition. This means that it will apply FRS 116 to all contracts entered into before 1 January 2019 and identified as leases in accordance with FRS 17 and INT FRS 104. The Council as lessee The Council expects to measure lease liabilities by applying a single discount rate to the Council’s headquarters. Furthermore, the Council is likely to apply the practical expedient to recognise amounts of ROU assets equal to their lease liabilities at 1 January 2019. For lease contracts that contain the option to renew, the Council is expected to use hindsight in determining the lease term. The Council expects its existing operating lease arrangements to be recognised as ROU assets with corresponding lease liabilities under FRS 116. In addition, the Council will no longer recognise provisions for operating leases that it assessed to be onerous. Instead, the Council will include the payments due under the lease in its lease liability. The Council expects an increase in ROU assets and lease liabilities of $1,716,000 at 1 January 2019. The nature of expenses related to those leases will change as FRS 116 replaces the straight-line operating lease expense with depreciation charge for ROU assets and interest expense on lease liabilities. No significant impact is expected for the Council.

FS21

Chinese Development Assistance Council Financial statements Year ended 31 December 2018

Plant and equipment Office equipment $ Cost At 1 January 2017 Additions Disposals Transfers At 31 December 2017 Additions Adjustment for over provision of renovation costs Disposals Government grant At 31 December 2018 Accumulated depreciation At 1 January 2017 Depreciation Disposals Transfers At 31 December 2017 Depreciation Adjustment for over provision of renovation costs Disposals Government grant At 31 December 2018 Carrying amounts At 1 January 2017 At 31 December 2017 At 31 December 2018

Computer Furniture and equipment fittings Renovation $ $ $

-------------------- CDAC Centres -----------------Office Computer Furniture and equipment equipment fittings Renovation $ $ $ $

Total $

223,793 49,347 (4,331) – 268,809 11,229

768,668 120,706 (48,031) 412 841,755 129,717

198,949 33,037 (24,614) 20,084 227,456 –

1,306,124 85,052 (36,886) 51,965 1,406,255 73,661

254,971 60,058 (73,012) – 242,017 3,290

467,211 64,996 (46,235) (412) 485,560 68,423

102,709 34,111 (9,550) (20,084) 107,186 2,310

2,979,490 71,970 (348,055) (51,965) 2,651,440 85,800

6,301,915 519,277 (590,714) – 6,230,478 374,430

– – – 280,038

– – – 971,472

– (5,800) – 221,656

– (16,586) – 1,463,330

– (5,820) – 239,487

– (6,098) – 547,885

– (11,601) – 97,895

(103,875) (16,912) (421,125) 2,195,328

(103,875) (62,817) (421,125) 6,017,091

169,815 37,333 (4,331) – 202,817 42,464

647,932 121,066 (48,031) 54 721,021 91,812

184,338 10,927 (24,614) 20,084 190,735 10,431

1,240,666 36,215 (36,376) 51,965 1,292,470 39,442

180,523 51,720 (73,012) – 159,231 48,161

396,135 51,498 (46,235) (54) 401,344 66,161

101,539 4,971 (9,550) (20,084) 76,876 7,434

2,320,810 154,985 (348,055) (51,965) 2,075,775 89,504

5,241,758 468,715 (590,204) – 5,120,269 395,409

– – – 245,281

– – – 812,833

– (5,800) – 195,366

– (16,586) – 1,315,326

– (5,820) – 201,572

– (6,098) – 461,407

– (11,601) – 72,709

(31,163) (15,317) (105,281) 2,013,518

(31,163) (61,222) (105,281) 5,318,012

53,978 65,992 34,757

120,736 120,734 158,639

14,611 36,721 26,290

65,458 113,785 148,004

74,448 82,786 37,915

71,076 84,216 86,478

1,170 30,310 25,186

658,680 575,665 181,810

1,060,157 1,110,209 699,079

FS22

Chinese Development Assistance Council Financial statements Year ended 31 December 2018

Direct investments 2018 $ Non-current investments Equity investment – at FVOCI

34,000

2017 $ 38,750

At 1 January 2018, the Council designated the investments shown above as equity investments as at FVOCI because these equity investments represent investments that the Council intends to hold for the long-term for strategic purposes. In 2017, these investments were classified as availablefor-sale.

Interest in associate In October 2015, the Council entered into a Memorandum of Understanding (“MOU”), together with Singapore Indian Development Association, Yayasan MENDAKI, and the Eurasian Association (together “Self-Help Groups (SHGs)”), to incorporate Self Help Groups Student Care Limited (“SHGSCL”). Incorporation of SHGSCL is in line with the mandate of the SHGs to provide educational and family related support services to students from low income families. Programmes to be conducted by SHGSCL will be inclusive and multi-racial. SHGSCL was incorporated in November 2015 and is a public company limited by guarantee. The Council has appointed Low Yen Ling and Pok Cheng Chong to the Board of Directors of SHGSCL. The Council is entitled to 25% of total voting rights at the Board of Directors meetings. Management has exercised judgement in determining the extent of its significant influence over SHGSCL, and concluded that the Council has significant influence over SHGSCL. Therefore, the Council recognised SHGSCL as an associate in the balance sheet. Details of the associate are as follows: Name

SHGSCL

Principal activities

Operate school-based student care centres in Singapore

Place of incorporation

Singapore

Voting rights 2018 2017 % % 25

The summarised financial information of the associate which is prepared in accordance with FRS is as follows: 2018 2017 $ $ Statement of comprehensive income Revenue 6,781,143 4,193,732 Loss and total comprehensive income for the year (150,626) (196,100)

FS23

Chinese Development Assistance Council Financial statements Year ended 31 December 2018

2018 $ Balance sheet Non-current assets Current assets Non-current liabilities Current liabilities Net deficit Interest in net assets of investee at beginning of the year Share of total comprehensive income Interest in net assets of investee at end of the year Loan to associate

2017 $

396,547 5,035,129 (5,000,000) (2,188,262) (1,756,586)

407,327 3,634,456 (4,000,000) (1,647,742) (1,605,959)

(802,980) (75,313) (878,293) 2,500,000 1,621,707

(704,930) (98,050) (802,980) 2,000,000 1,197,020

The objective of setting up the associate is for the SHGs to jointly operate student care centres in schools that serve students from all races. The investment in the associate, in substance, is not meant to be a commercially-driven transaction with the purpose of profit takings. The Memorandum of Association of SHGSCL prohibits the Council, together with other SHGs, from obtaining any variable returns in the form of profits, dividends, or residual interest in net assets in the event of liquidation or winding-down. The Council’s financial statements include the Council’s share of losses of the associate at 50%, based on the Council’s proportionate share of loan commitment to the associate as set out in the MOU. The Council’s exposure to losses is limited to the carrying amount of the investment, together with any long-term interests. Loan to associate represents the Council’s commitment to the associate which is made in the form of an unsecured and interest free loan. As the associate has plans to scale up its operation, the settlement of the loan is not expected to occur in the foreseeable future. The loan is classified as non-current and at amortised cost less impairment. The SHGs also agree to continue providing funding support to the associate while it scales up its operation. As at 31 December 2018, the Council has provided funding support of $2,500,000 (2017: $2,000,000). Key source of estimation uncertainty The Council evaluates, amongst other factors, the financial health of and operational cash flow projections, to assess the recoverable amounts of its interest in SHGSCL. Differences between the actual performance and management’s annual impairment review will affect the results of the period in which such differences are determined. An increase in impairment losses will increase expenses and decrease non-current assets.

FS24

Chinese Development Assistance Council Financial statements Year ended 31 December 2018

Other receivables 2018 Operation EndowNote Fund ment Fund $ $ Student fees receivables Allowance for doubtful receivables Contributions receivable through the CPF scheme Deposits Grants receivables Interest receivable– held under fund management investment schemes Derivative assets– held under fund management investment schemes Others

Total $

2017 Operation EndowFund ment Fund $ $

Total $

200,026

–

200,026

192,778

–

192,778

(7,143) 192,883

– –

(7,143) 192,883

(4,297) 188,481

– –

(4,297) 188,481

2,123,351 152,971 5,364

– – –

2,123,351 152,971 5,364

2,033,713 148,233 323,958

– – –

2,033,713 148,233 323,958

29,389

427,002

456,391

31,390

341,031

372,421

42,966 217,662 2,764,586 35,540 2,800,126

216,948 20,563 664,513 – 664,513

259,914 238,225 3,429,099 35,540 3,464,639

56,520 132,370 2,914,665 67,184 2,981,849

384,909 5,844 731,784 – 731,784

441,429 138,214 3,646,449 67,184 3,713,633

Prepayments

The movement in the allowance for impairment in respect of student fees receivable during the year is as follows: 2018 2017 $ $ At 1 January Impairment loss recognised Impairment loss utilised At 31 December

4,297 7,143 (4,297) 7,143

4,552 2,032 (2,287) 4,297

Contributions receivable through the CPF scheme relates to the December contributions made by individuals of the Chinese community.

Fund management investment schemes 2018 Note Operation EndowFund ment Fund $ $ Current investments Equity investments – designated at FVTPL Debt investments at FVTPL

1,595,674

Derivative assets

Interest receivable Cash and cash equivalents

7 9

2017 Total $

7,223,190

8,818,864

4,008,147 45,187,052 5,603,821 52,410,242 42,966 216,948 5,646,787 52,627,190 29,389 427,002 979,182 6,431,678 6,655,358 59,485,870

EndowOperation Fund ment Fund $ $ 1,861,046

Total $

6,222,498

8,083,544

49,195,199 58,014,063 259,914 58,273,977 456,391

4,409,888 51,327,529 6,270,934 57,550,027 56,520 384,909 6,327,454 57,934,936 31,390 341,031

55,737,417 63,820,961 441,429 64,262,390 372,421

7,410,860 66,141,228

340,227 1,366,117 6,699,071 59,642,084

1,706,344 66,341,155

FS25

Chinese Development Assistance Council Financial statements Year ended 31 December 2018

The above represents funds placed with financial institutions that manage the funds for a period of at least 3 years. Although the book value of the investments fluctuates during the fund management period, the investment managers have provided guarantee of the return of the principal sum of $32.87 million (2017: $32 million) to the Council at the end of the relevant fund management periods on one portfolio (2017: one portfolio). The funds are invested in investments that are in compliance with the provisions of the Trustees Act. Forward foreign exchange contracts are held as economic hedges of debt securities and cash and cash equivalents denominated in foreign currencies. The weighted average effective interest rates per annum and repricing periods of the interestearning financial assets managed under these portfolios are as follows: Effective interest rate %

Total $

2018 Debt securities and deposits

2.23

4,987,329

979,182

4,008,147

–

2017 Debt securities and deposits

2.62

4,750,115

876,570

3,873,545

–

2018 Debt securities and deposits

3.11

51,618,730

10,140,850

33,059,454

8,418,426

2017 Debt securities and deposits

2.87

52,693,646

33,597,947

8,656,198

10,439,501

Operation Fund

Within 1 year $

1 to 5 years $

After 5 years $

Endowment Fund

The Council’s exposure to credit, currency and interest rate risks is disclosed in note 23.

Cash and cash equivalents 2018 Operation EndowNote Fund ment Fund $ $ 3,900 4,288,427

Cash in hand Cash at bank Deposits with financial institutions

13,128,986 17,421,313

Held under fund management investment schemes: Cash at bank Deposits with financial institutions 8

– 913,726

Total $

2017 Operation EndowFund ment Fund $ $

3,900 5,202,153

3,900 2,029,465

4,672,063 17,801,049 5,585,789 23,007,102

10,213,499 12,246,864

– 1,238,903

Total $ 3,900 3,268,368

3,728,556 13,942,055 4,967,459 17,214,323

979,182

3,929,219

4,908,401

340,227

1,366,117

1,706,344

– 979,182

2,502,459 6,431,678

2,502,459 7,410,860

– 340,227

– 1,366,117

– 1,706,344

18,400,495 12,017,467 30,417,962

12,587,091

6,333,576 18,920,667

FS26

Chinese Development Assistance Council Financial statements Year ended 31 December 2018

The weighted average effective interest rates per annum of the interest-earning deposits at the reporting date are as follows:

Cash at bank Deposits with financial institutions

Operation Fund 2018 2017 % %

Endowment Fund 2018 2017 % %

0.01

0.05

0.02

1.65

1.02

1.48

0.65

Interest rates reprice at intervals of three, six, nine or twelve months.

Endowment Fund The Endowment Fund is established to receive donations from the public and government grants. The Board of Trustees is entrusted with the duty of managing and building up the Endowment Fund. Such endowment funds can be used for the Council's operations only, with the approval of the Board of Trustees. Income generated by the Endowment Fund accrues to the Endowment Fund.

Operation Fund The Operation Fund is a general fund of the Council to be applied for the general purposes of the Council in support of its objectives. The Operation Fund comprises mainly the monthly contributions made by individuals of the Chinese community through the CPF scheme as stipulated in The Central Provident Fund (Contributions to Community Fund (CDAC)) Rules 1992 which commences from September 1992 and the income (net) generated thereon. Excluding share of loss of associate, the carrying amount of the Operation Fund as at 31 December 2018 amounts to $26,448,317 (2017: $21,248,589).

Fair value reserve The fair value reserve comprises the cumulative net change in the fair value of equity investments designated as at FVOCI held until the investment is derecognised.

Other payables 2018 Operation EndowNote Fund ment Fund $ $ Accrued operating expenses Advances received Other creditors

3,620,306 460 – 3,620,766

48,113 – – 48,113

Total $ 3,668,419 460 – 3,668,879

2017 Operation EndowFund ment Fund $ $ 3,379,423 273,707 117,000 3,770,130

119,972 – – 119,972

Total $ 3,499,395 273,707 117,000 3,890,102

FS27

Chinese Development Assistance Council Financial statements Year ended 31 December 2018

Accrued operating expenses 2018 EndowOperation Fund ment Fund $ $ Auditors’ remuneration: - audit fees - non-audit fees Fund management performance fee Skill training awards Staff CPF contribution for December Ready for School project CDAC programmes and other administrative costs Provision for unutilised leave

Total $

2017 EndowOperation Fund ment Fund $ $

Total $

118,000 5,000

– –

118,000 5,000

– –

118,000 5,000

2,709 5,364

48,062 –

50,771 5,364

2,705 71,613

119,972 –

122,677 71,613

409,853 988,991

– –

409,853 988,991

437,124 1,009,000

– –

437,124 1,009,000

1,786,449 303,940 3,620,306

51 – 48,113

1,786,500 303,940 3,668,419

1,452,851 283,130 3,379,423

– – 119,972

1,452,851 283,130 3,499,395

Donation income Tax deductible donations during the year amounts to $25,014,102 (2017: $24,174,378).

Grants and subsidies from government agencies 2018 $ Grants from the government: - additional Top-Up Grant & Government Matching Grant - defrayment of operating lease expense for CDAC headquarters/Temporary Occupation Licence fee Other grants and subsidies from other government related agencies to fund programmes and activities

2017 $

3,500,000

476,454

385,444 4,361,898

454,766 4,431,220

Other income 2018 EndowOperation Fund ment Fund $ $ Interest income - deposits and bank balances Others

141,649 1,031 142,680

38,732 – 38,732

Total $ 180,381 1,031 181,412

2017 EndowOperation Fund ment Fund $ $ 83,747 1,028 84,775

25,608 – 25,608

Total $ 109,355 1,028 110,383

FS28

Chinese Development Assistance Council Financial statements Year ended 31 December 2018

Resources expended on charitable activities Programme or initiative

Student & Parent Education Family & Worker Support Fulfilling Ageing Community Outreach & Engagement Volunteers Engagement & Development One-Stop Service CDAC-SFCCA Hardship Assistance and CDAC-SFCCA Bursary schemes

Costs undertaken directly $

2018 Support costs (note 19) $

Total $

Costs undertaken directly $

2017 Support costs (note 19) $

Total $

10,728,828

349,600

11,078,428

10,083,866

349,690

10,433,556

4,648,563 818,113

177,279 153,847

4,825,842 971,960

4,083,678 737,797

190,062 144,958

4,273,740 882,755

3,194,419

272,980

3,467,399

2,975,186

454,566

3,429,752

719,470 485,494

85,848 74,386

805,318 559,880

533,203 469,648

76,071 76,445

609,274 546,093

2,315,927 22,910,814

â&#x20AC;&#x201C; 1,113,940

2,315,927 24,024,754

1,759,984 20,643,362

â&#x20AC;&#x201C; 1,291,792

1,759,984 21,935,154

FS29

Chinese Development Assistance Council Financial statements Year ended 31 December 2018

Support costs Community Volunteers Outreach & Engagement & Engagement Development programme programme $ $

Student & Parent Education programme $

Family & Worker Support programme $

Fulfilling Ageing programme $

2018 Staff costs (include management) Maintenance and administrative expenses Depreciation expenses

130,159 179,433

108,933 45,431

108,933 18,942

141,853 56,312

36,270 13,619

43,345 19,080

40,008

22,915

25,972

74,815

35,959

11,961

Total for 2018

349,600

177,279

153,847

272,980

85,848

74,386

2017 Staff costs (include management) Maintenance and administrative expenses Depreciation expenses

125,792 171,628

104,956 41,727

104,956 17,141

135,722 55,670

35,049 10,740

41,993 18,162

52,270

43,379

22,861

263,174

30,282

16,290

Total for 2017

349,690

190,062

144,958

454,566

76,071

76,445

One-Stop Service $

Basis of allocation

Usage in terms of time spent Floor area in terms of floor area occupied and usage Usage in terms of assets acquired

Allocated staff costs include manpower cost of management staffs, administration and Information Technology staff but exclude staff who directly handle the programmes. Depreciation expenses incurred for CDAC Centres programme include depreciation expenses of renovation cost of CDAC Centres and assets acquired such as computers and office equipment to operate the Centres.

FS30

Chinese Development Assistance Council Financial statements Year ended 31 December 2018

Expenses incurred The following items have been included in arriving at total expenses incurred: Note Allowance for doubtful receivables Depreciation expenses, net of government grant Operating lease expenses Staff costs: - key management personnel - others Contributions to defined contribution plans included in staff costs Waiver of student fees, included in fee income from education programme

2018 $

2017 $

7 4

7,143 258,965 139,990

2,032 468,715 92,130

242,273 7,145,478

233,063 6,651,803

979,100

909,302

104,728

120,061

CDAC occupies a government land at 65 Tanjong Katong Road, Singapore 436957 and pays an operating lease expense for CDAC headquarters/Temporary Occupation Licence (“TOL”) fee yearly to the Singapore Land Authority. The Ministry of Culture, Community & Youth provides a yearly grant to defray the lease rental/TOL fee incurred by the Council. The lease rental/TOL fee for the year ended 31 December 2018 is $476,454 (2017: $476,454).

Investment (loss)/income 2018 EndowOperation Fund ment Fund $ $

Total $

2017 EndowOperation Fund ment Fund $ $

Total $

Investment (loss)/income from fund management investment schemes: Realised (loss)/gain on sale of investments Exchange (loss)/gain Investment expenses Net change in fair value of financial assets Interest income Dividend income

(33,391) (105,324) (17,466)

(857,595) (152,632) (67,791)

(890,986) (257,956) (85,257)

43,113 176,030 (2,607)

284,452 995,110 (19,422)

327,565 1,171,140 (22,029)

(33,594) (444,200) (477,794) (189,775) (1,522,218) (1,711,993) 127,577 1,496,987 1,624,564 29,230 122,972 152,202 (32,968) 97,741 64,773

(88,766) 127,770 132,741 24,145 284,656

(789,788) 470,352 1,481,528 122,805 2,074,685

(878,554) 598,122 1,614,269 146,950 2,359,341

Investment income from direct investments: Dividend income

2,175

–

2,175

2,328

–

2,328

Taxation The Council is an approved charity organisation under the Charities Act, Chapter 37 and an institution of a public character under the Income Tax Act, Chapter 134. No provision for taxation has been made in the financial statements as the Council is a registered charity with income tax exemption.

FS31

Chinese Development Assistance Council Financial statements Year ended 31 December 2018

Financial risk management Overview The Council has exposure to the following risks from its use of financial instruments:  credit risk  liquidity risk  market risk This note presents information about the Council’s exposure to each of the above risks, the Council’s objectives, policies and processes for measuring and managing risk. Risk management framework Risk management is integral to the operations of the Council. Management has established a system of controls in place to create an acceptable balance between the cost of risks occurring and the cost of managing the risks. Credit risk Credit risk is the risk of financial loss to the Council if a counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Council’s receivables from counterparties and investment securities. The carrying amount of financial assets in the balance sheet represents the Council’s respective maximum exposure to credit risk. The Council does not hold any collateral in respect of its financial assets. Loans and receivables Exposure to credit risks The maximum exposure to credit risk for loans and receivables at the reporting date by type of counterparty are as follows: 2018 EndowOperation Fund ment Fund $ $ Government agencies Student fees receivable (including Self-Help Groups) Others

Total $

2017 EndowOperation Fund ment Fund $ $

Total $

2,146,487

–

2,146,487

2,075,672

–

2,075,672

192,883 382,250 2,721,620

– 447,565 447,565

192,883 829,815 3,169,185

188,481 593,992 2,858,145

– 346,875 346,875

188,481 940,867 3,205,020

The Council does not require collateral in respect of other receivables.

FS32

Chinese Development Assistance Council Financial statements Year ended 31 December 2018

Impairment losses The Council establishes an allowance for impairment that represents its estimate of incurred losses in respect of its receivables. The ageing of loans and receivables are as follows: Gross 2018 $ Not past due Past due 31 – 60 days

3,165,602 10,726 3,176,328

Impairment losses 2018 $ – 7,143 7,143

Gross 2017 $

Impairment losses 2017 $

3,202,386 6,931 3,209,317

– 4,297 4,297

Based on historical default rates, the Council believes that no impairment is necessary in respect of loans and receivables not past due or past due up to 60 days except for specifically identified amounts. These receivables are mainly arising from government agencies, Self-Help Groups and student fees. Expected credit loss assessment for receivables as at 1 January and 31 December 2018. The Council uses an allowance matrix to measure the ECLs of receivables. The allowance matrix is based on actual credit loss experience over the past three years. The ECL computed is purely derived from historical data which management is of the view that the historical conditions are representative of the conditions prevailing at the reporting date. The amount of the allowance for credit impaired receivables is insignificant. Investments Exposure to credit risk An Investment Committee, established to advise, review and approve investment proposals and appointment of investment managers, monitors the Council’s investments on an ongoing basis. Most of the Council’s funds are placed with regulated financial institutions that manage the funds on a full discretionary basis. In order to limit the Council’s exposure to credit risk, stringent criteria are adopted by the Investment Committee in the selection of professional fund managers for investments in fund management investment schemes. These professional investment managers adopt stringent quantitative and qualitative criteria in their investment process which cover research and fundamental analysis; strategy and asset allocation including portfolio construction, risk management and performance analysis. Fixed income investments are assessed using stringent investment criterion and this includes, but is not limited to, a thorough analysis of each debt security’s terms and conditions, the availability and quality of the guarantor, as well as financial strength of the issuer. The table below summarises the type of debt securities held by the Council and the credit ratings which are based on reputable credit rating agencies such as Standard and Poor, Moody and Fitch’s financial strength rating and its equivalent.

FS33

Chinese Development Assistance Council Financial statements Year ended 31 December 2018

A to AA $

Financial strength ratings A- to BBBOthers* $ $

Total $

Operation Fund 2018 Debt securities: - Corporate bonds

2,839,400

405,207

763,540

4,008,147

2017 Debt securities: - Corporate bonds

3,097,098

536,343

776,447

4,409,888

2018 Debt securities: - Corporate bonds

23,010,473

11,850,565

10,326,014

45,187,052

2017 Debt securities: - Corporate bonds

20,363,036

15,704,892

15,259,601

51,327,529

Endowment Fund

* Others refer to credit ratings given by the fund managers.

Cash and cash equivalents The maximum exposure to credit risk is represented by the carrying amounts in the balance sheet. The cash and cash equivalents are held with banks and financial institution counterparties which are regulated. Impairment on cash and cash equivalents has been measured on the 12-month expected loss basis and reflects the short maturities of the exposures. The Council considers that its cash and cash equivalents have low credit risk based on the external credit ratings of the counterparties. The amount of the allowance on cash and cash equivalents is negligible. The Council uses a similar approach for assessment of ECLs for cash and cash equivalents to those used for Other receivables. Liquidity risk Liquidity risk is the risk that the Council will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Council monitors its liquidity risk and maintains a level of cash and cash equivalents deemed adequate by management to finance the Councilâ&#x20AC;&#x2122;s operations and to mitigate the effects of fluctuations in cash flows.

FS34

Chinese Development Assistance Council Financial statements Year ended 31 December 2018

Carrying amount $

Cash flows Less than Contractual cash flows 1 year $ $

Operation Fund 2018 Other payables, including derivatives

3,620,766

2017 Other payables, including derivatives

3,770,130

2018 Other payables, including derivatives

48,113

2017 Other payables, including derivatives

119,972

Endowment Fund

Market risk Market risk is the risk that changes in market prices, such as interest rates, foreign exchange rates and equity prices will affect the Council’s income or value of its holding of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return. Currency risk Currency risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Council is exposed to the effects of foreign currency exchange rate fluctuations, principally in Swiss Franc (“CHF”), Japanese Yen (“JPY”), United States dollar (“USD”), New Taiwan dollar (“TWD”) and Euro (“EUR”).

FS35

Chinese Development Assistance Council Financial statements Year ended 31 December 2018

The Council’s foreign currency exposures are as follows: EUR $

Other currencies $

–

131,788

294,057

4,356 409,543

– –

4,070 135,858

25,048 319,105

185,708

830,030

–

105,140

261,106

– 119,535

– 185,708

– 830,030

– –

– 105,140

– 261,106

311,892

692,029

2,114,649

210,971

380,364

1,185,462

– 311,892

47,712 739,741

106,710 2,221,359

375,598 586,569

– 380,364

77,373 1,262,835

160,778

302,910

3,186,626

424,504

647,256

1,566,127

– 160,778

– 302,910

22,700 3,209,326

194,473 618,977

– 647,256

4,632 1,570,759

CHF $

JPY $

USD $

93,925

142,103

405,187

– 93,925

17,663 159,766

119,535

TWD $

Operation Fund 2018 Investments Cash and cash equivalents

2017 Investments Cash and cash equivalents

Endowment Fund 2018 Investments Cash and cash equivalents

2017 Investments Cash and cash equivalents

Sensitivity analysis A 10% strengthening of the Singapore dollar, against the following currencies at 31 December would have decreased profit or loss by the amounts shown below. This analysis is based on foreign currency exchange rate variances that the Council considered to be reasonably possible at the end of the reporting period. The analysis assumes that all other variables, in particular interest rates, remain constant. The analysis is performed on the same basis for 2017. Profit or loss Operation Endowment Fund Fund $ $ 2018 CHF JPY USD TWD EUR Other currencies

9,393 15,977 40,954 – 13,586 31,911

31,189 73,974 222,136 58,657 38,036 126,284

FS36

Chinese Development Assistance Council Financial statements Year ended 31 December 2018

Profit or loss Operation Endowment Fund Fund $ $ 2017 CHF JPY USD TWD EUR Other currencies

11,954 18,571 83,003 â&#x20AC;&#x201C; 10,514 26,111

16,078 30,291 320,933 61,898 64,726 157,076

A 10% weakening of the Singapore dollar against the above currencies at 31 December would have had the equal but opposite effect on the above currencies to the amounts shown above, on the basis that all other variables remain constant. Interest rate risk The Councilâ&#x20AC;&#x2122;s exposure to market risk for changes in interest rates relates to the interest-bearing cash and cash equivalents and debt securities. The weighted average effective rates at balance sheet date and the periods in which they reprice or mature are disclosed in notes 8 and 9. Sensitivity analysis At the balance sheet date, management assessed that an increase/(decrease) of 100 basis points in the interest rates would have no significant impact on the results of the Council. Price risk Price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk), whether those changes are caused by factors specific to the individual financial instrument or its issuer, or factors affecting all similar financial instruments traded in the market. Sensitivity analysis The Councilâ&#x20AC;&#x2122;s investments are recognised at fair value through profit or loss. A 10% increase or decrease in the underlying market prices at the reporting date, with all variables held constant would increase or decrease profit or loss by $5,827,398 (2017: $6,426,239). Estimation of fair value The following summarises the significant methods and assumptions used in estimating the fair values of financial instruments of the Council.

FS37

Chinese Development Assistance Council Financial statements Year ended 31 December 2018

Investments in equity and debt securities The fair value of quoted financial assets at FVTPL and FVOCI is determined by reference to their quoted bid prices at the reporting date. The fair value of unquoted debt securities is provided by investment fund managers as obtained from recognised market makers. Derivatives The fair value of forward exchange contracts is based on their listed market price, if available. If a listed market price is not available, fair value is estimated by discounting the difference between the contractual forward price and the current forward price for the residual period to maturity of the contract using a risk-free interest rate (based on government bonds). Fair value hierarchy The different levels have been defined as follows: ď&#x201A;ˇ ď&#x201A;ˇ ď&#x201A;ˇ

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices). Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

Other financial assets and liabilities The carrying amounts of financial assets and liabilities with a maturity of less than one year (including other receivables, cash and cash equivalents and other payables) are assumed to approximate their fair values because of the short period to maturity.

FS38

Chinese Development Assistance Council Financial statements Year ended 31 December 2018

Accounting classifications and fair values The carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy are as follows. It does not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value. Carrying amount Fair value Mandatorily FVOCI – Other at FVTPL - Amortised Equity financial Note Others cost instrument liabilities Total Level 1 Level 2 Level 3 $ $ $ $ $ $ $ $ 2018 Operation Fund Equity investment – at FVOCI 5 – – 34,000 – 34,000 34,000 – – Equity investments – at FVTPL 8 1,595,674 – – – 1,595,674 1,595,674 – – Debt investments – at FVTPL 8 4,008,147 – – – 4,008,147 3,757,237 250,910 – Other receivables* 7 – 2,721,620 – – 2,721,620 – – – Derivative assets 7 42,966 – – – 42,966 – 42,966 – Cash and cash equivalents 9 – 18,400,495 – – 18,400,495 – – – 5,646,787 21,122,115 34,000 – 26,802,902 Other payables

–

Endowment Fund Equity investments – at FVTPL Debt investments – at FVTPL Other receivables* Derivative assets Cash and cash equivalents

8 8 7 7 9

7,223,190 45,187,052 – 216,948 – 52,627,190

– – 447,565 – 12,017,467 12,465,032

– – – – – –

Other payables

–

(3,620,766)

– – – – – – (48,113)

(3,620,766)

7,223,190 45,187,052 447,565 216,948 12,017,467 65,092,222

7,223,190 499,757 – – –

– 44,687,295 – 216,948 –

– – – – –

(48,113)

* Excludes prepayments and derivative assets

FS39

Chinese Development Assistance Council Financial statements Year ended 31 December 2018

Carrying amount Note

Fair value

Held-fortrading $

Loans and receivables $

Availablefor-sale $

Other financial liabilities $

– – – – – – –

Total carrying amount $

Level 1 $

Level 2 $

Level 3 $

2017 Operation Fund Direct investments Equity securities Debt securities Other receivables* Derivative assets Cash and cash equivalents

5 8 8 7 7 9

– 1,861,046 4,409,888 – 56,520 – 6,327,454

– – – 2,858,145 – 12,587,091 15,445,236

38,750 – – – – – 38,750

Other payables

–

Endowment Fund Equity securities Debt securities Other receivables* Derivative assets Cash and cash equivalents

8 8 7 7 9

6,222,498 51,327,529 – 384,909 – 57,934,936

– – 346,875 – 6,333,576 6,680,451

– – – – – –

Other payables

–

(3,770,130) – – – – – – (119,972)

38,750 1,861,046 4,409,888 2,858,145 56,520 12,587,091 21,811,440

38,750 1,861,046 4,154,983 – – –

– – 254,905 – 56,520 –

– – – – – –

6,222,498 24,210,134 – – –

– 27,117,395 – 384,909 –

– – – – –

(3,770,130) 6,222,498 51,327,529 346,875 384,909 6,333,576 64,615,387 (119,972)

* Excludes prepayments and derivative assets

FS40

Chinese Development Assistance Council Financial statements Year ended 31 December 2018

Capital management and reserve policy The Council is a company limited by guarantee with no issued capital. The Council builds up its capital from donations received and also through prudent management of its financial resources. The capital of the Council includes reserve fund in its Endowment Fund and accumulated surplus fund in its Operation Fund. The Councilâ&#x20AC;&#x2122;s capital is closely monitored to ensure that there are sufficient capital and reserve to support its programmes and activities on an on-going basis. The Council constantly assesses its capital and reserve adequacy and explores ways to maximise existing resources within the community as it conducts its budget planning and review. The Council has an Investment Committee to review and manage the capital fund. Most of the Councilâ&#x20AC;&#x2122;s capital funds are invested with regulated financial institutions based on stringent criteria in the selection of professional fund managers. The Council has set guidelines on its investment to safeguard the capital. Of the funds invested with professional fund managers, one out of the four portfolios managed by fund managers are with guarantee of the return of principal sum. The funds are invested in investments which are in compliance with the provisions of the Trustees Act. There were no changes in the Councilâ&#x20AC;&#x2122;s approach to capital management during the year. The Council is not subject to externally imposed capital requirements.

Employees remuneration The number of employees whose remuneration amounted to over $100,000 during the year are as follows: 2018 $100,000 to $200,000 $200,001 to $300,000

2017 14 1

11 1

The number of staffs employed by the Council as at 31 December 2018 was 94 (2017: 93).

Related parties Compensation of key management personnel Key management personnel of the Council are those having the authority and responsibility for planning, directing and controlling the activities of the Council. The Board of Directors, members of the Investment Committee and the Executive Director of the Council are considered as key management personnel of the Council. The Board of Directors and members of the Investment Committee did not receive any form of remuneration during the year. Key management personnel compensation comprised:

FS41

Chinese Development Assistance Council Financial statements Year ended 31 December 2018

Short-term employee benefits Contributions to defined contribution plans

2018 $

2017 $

224,798 17,475 242,273

214,119 18,944 233,063

There is no paid staff who are close members of the family of the Executive Director or Board Member, who receives more than $50,000 during the year.

FS42