Moving
Forward Together
Financial Statements
YEAR ENDED 31 DECEMBER 2018
Registration Number: UEN S90SS0098L Charity Registration Number: 0909
Singapore Indian Development Association General Information Year ended 31 December 2018
General Information Patron – Prime Minister Lee Hsien Loong Life Trustees Mr Tharman Shanmugaratnam Professor S Jayakumar Mr S Dhanabalan Mr S Chandra Das Mr J Y Pillay Mr Sat Pal Khattar Mr K Shanmugam Dr N Varaprasad
Chairman
Term Trustees Ms Indranee T Rajah Mr Ravi Menon Mr Gautam Banerjee Mr Girija Pande Mr R Jayachandran Mr Ravinder Singh Justice Judith Prakash Mr K Kesavapany Mr Viswa Sadasivan Mr Shabbir Hassanbhai Mr Timothy Chia Mr Piyush Gupta Dr Sudha Nair Mr Harjit Singh Bhatia
(appointed on 14 November 2018)
Advisors Mr S Iswaran Dr Vivian Balakrishnan Mr Vikram Nair Mr Murali Pillai
Audit Review Committee Members Mr Shabbir Hassanbhai Mr Sarjit Singh Mr Mohan Pillay Mr Nagaraj Sivaram Mr P Somasekharan
Chairman
1
Singapore Indian Development Association General Information Year ended 31 December 2018
Executive Committee Members Ms Indranee T Rajah Mr Shekaran Krishnan Mr K V Rao Mr Sarjit Singh Mr Subramaniam Iyer Dr Joshua V M Kuma Mr Chandra Mohan Rethnam Mr K Ramamoorthy Mr Thambyrajah T Mr Sarbjit Singh Mr Darryl Wilson David Mrs Rathi Parimalan Dr Rakhee Yash Pal Mr Mohamed Nasim Mr Ramesh Narayanaswamy
President Vice-President Vice-President Secretary Treasurer Member Member Member Member Member Member Member Member Member Member
Chief Executive Officer Mr Kumaran Barathan Mr Anbarasu Rajendran
(term ended on 30 June 2018) (appointed as acting chief executive officer on 1 July 2018; appointed as chief executive officer on 1 January 2019)
Address No. 1 Beatty Road Singapore 209943
Auditors PricewaterhouseCoopers LLP Partner-in-charge: Yee Chen Fah (since the financial year ended 31 December 2016)
2
Singapore Indian Development Association Independent auditors’ report Year ended 31 December 2018
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF SINGAPORE INDIAN DEVELOPMENT ASSOCIATION Our Opinion In our opinion, the accompanying financial statements of Singapore Indian Development Association (“the Association”) are properly drawn up in accordance with the provisions of the Societies Act, Chapter 311 (“the Societies 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 present fairly, in all material respects, the state of affairs of the Association as at 31 December 2018 and the results, changes in funds and cash flows of the Association for the year ended on that date. What we have audited The financial statements of the Association comprise: • the statement of financial position as at 31 December 2018; • the statement of comprehensive income for the year then ended; • the statement of changes in funds for the year then ended; • the statement of cash flows for the year then ended; and • the notes to the financial statements, including a summary of significant accounting policies. 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 Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence We are independent of the Association in accordance with the Accounting and Corporate Regulatory Authority (“ACRA”) 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. Other Information Management is responsible for the other information. The other information obtained at the date of this auditor’s report is the information included in the Statement by President, Treasurer and Chief Executive Officer, but does not include the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and we do not and will 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 identified above 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 that we obtained prior to the date of this
auditor’s 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.
4
Singapore Indian Development Association Independent auditors’ report Year ended 31 December 2018
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF SINGAPORE INDIAN DEVELOPMENT ASSOCIATION (continued) Responsibilities of Management and Those Charged with Governance for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with the provisions of the Societies Act, the Charities Act and Regulations and FRSs, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing the Association’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 Association or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Association’s financial reporting process. Auditor’s 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 auditor’s 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. 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 control. Obtain an understanding of internal control 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 Association’s internal control. 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 Association’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s 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 auditor’s report. However, future events or conditions may cause the Association 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 control that we identify during our audit.
5
Singapore Indian Development Association Financial statements Year ended 31 December 2018
Statement of financial position As at 31 December 2018 Note Non-current assets Plant and equipment Interest in Associate Current assets Government Subvention receivable Donations receivable – Central Provident Fund Board Scheme Donations receivable – Singapore Totalisator Board Deposits, prepayments, tuition fee and other receivables Financial assets at fair value through profit or loss Cash and cash equivalents
2018 S$
2017 S$
4 5
551,989 628,800 1,180,789
492,989 191,403 684,392
6
3,400,000
3,400,000
7 8 9
1,577,748 500,000 1,049,118 42,513,786 8,871,517 57,912,169 59,092,958
1,449,398 250,000 734,820 35,870,983 11,504,301 53,209,502 53,893,894
10
53,563,647 53,563,647
48,100,214 48,100,214
11 12 13
2,454,958 3,074,353 5,529,311 59,092,958
7,251 2,203,561 3,582,868 5,793,680 53,893,894
Total assets Representing: Funds Unrestricted funds Accumulated funds Total funds Current liabilities Deferred capital grants Other payables and accrued expenses Unutilised specific grants/donations Total liabilities and funds
The accompanying notes form an integral part of these financial statements.
FS1
Singapore Indian Development Association Singapore Indian Development FinancialAssociation statements Year ended 31 December 2018
Statement of comprehensive income Year ended 31 December 2018 Note
Income Income from generated funds Voluntary income: Donation – Central Provident Fund (CPF) contributions to SINDA fund Donation sponsorships Donation from Singapore Totalisator Board (STB) Income from School Pocket Money Fund (SPMF) Other donations Finance income: Dividend income Interest income: - unit trust fixed income - fixed deposits and bank balances Other income: Miscellaneous income Gain on disposal of investments Fair value gain of investments Total income from generated funds
2018 Accumulated funds Operations Investments Total S$ S$ S$
2017 Accumulated funds Operations Investments Total S$ S$ S$
17,302,977 821,054 500,000 48,068 341,300
– – – – –
17,302,977 821,054 500,000 48,068 341,300
15,980,495 1,203,880 – 49,668 467,412
– – – – –
15,980,495 1,203,880 – 49,668 467,412
–
213,115
213,115
–
168,289
168,289
– –
30 35,771
30 35,771
– –
42 18,975
42 18,975
24,649 – – 19,038,048
– – – 248,916
24,649 – – 19,286,964
19,923 – – 17,721,378
– 6,626 1,650,000 1,843,932
19,923 6,626 1,650,000 19,565,310
The accompanying notes form an integral part of these financial statements.
FS2
Singapore Indian Development Association Singapore Indian Development FinancialAssociation statements Year ended 31 December 2018
Statement of comprehensive income (continued) Year ended 31 December 2018 Note
Income from charitable activities and other funding Income from approved projects: Tuition programme fees Government grants: Government Subvention Ministry of Culture, Community and Youth (MCCY): - Temporary Occupation Licence (TOL) Grant - Additional Top-up Grant Family Service Centre (FSC) Funding: - Ministry of Social and Family Development (MSF) - Singapore Totalisator Board (STB) - National Council of Social Service (NCSS) - Other FSC Funding Care and Share Funding Other government grants Wage Credit Scheme Funding Deferred capital grants amortised Other grant: Singapore Press Holdings (SPH) Newspaper Project Funding Total income from charitable activities and other funding Total income
2018 Accumulated funds Operations Investments Total S$ S$ S$
2017 Accumulated funds Operations Investments Total S$ S$ S$
320,265
–
320,265
462,222
–
462,222
6
3,400,000
–
3,400,000
3,400,000
–
3,400,000
14
491,682 540,000
– –
491,682 540,000
491,682 540,000
– –
491,682 540,000
1,519,393 405,173 81,033 73,564 309,588 151,934 125,308 7,251
– – – – – – – –
1,519,393 405,173 81,033 73,564 309,588 151,934 125,308 7,251
1,604,737 434,111 86,823 53,803 146,310 172,308 81,576 9,448
– – – – – – – –
1,604,737 434,111 86,823 53,803 146,310 172,308 81,576 9,448
69,550
–
69,550
74,819
–
74,819
7,494,741 26,532,789
– 248,916
7,494,741 26,781,705
7,557,839 25,279,217
– 1,843,932
7,557,839 27,123,149
11
The accompanying notes form an integral part of these financial statements.
FS3
Singapore Indian Development Association Singapore Indian Development FinancialAssociation statements Year ended 31 December 2018
Statement of comprehensive income (continued) Year ended 31 December 2018 Note
Expenditures incurred on charitable activities Cost of generating funds (i) Cost of generating voluntary income: CPF agency fees
2018 Accumulated funds Operations Investments Total S$ S$ S$
2017 Accumulated funds Operations Investments Total S$ S$ S$
(113,148)
–
(113,148)
(137,148)
–
(137,148)
(ii) Charitable activities: Education programmes Family services Youth development programmes Parent and children programmes Engagement and volunteer management unit Publicity and marketing expenses
14 14 14 14 14 14
(8,925,317) (3,426,313) (1,468,628) (1,796,335) (1,188,802) (560,570)
– – – – – –
(8,925,317) (3,426,313) (1,468,628) (1,796,335) (1,188,802) (560,570)
(8,981,760) (2,698,305) (1,307,974) (1,224,106) (1,164,830) (383,939)
– – – – – –
(8,981,760) (2,698,305) (1,307,974) (1,224,106) (1,164,830) (383,939)
(iii) Administrative and governance costs
14
(2,518,744)
–
(2,518,744)
(2,246,361)
–
(2,246,361)
(119,695) (111,374) (6,150) (243) (1,320,350)
– – – (419,559) –
(1,557,569) (21,555,669)
(18,563,982)
(iv) Other costs: Loss on disposal of investments Fees charged by fund managers Exchange loss Loss on disposal/write off of plant and equipment Fair value loss of investment
– – – (243) –
Total expenditures Share of results of Associate Net income for the year
(19,998,100) 5
– 6,534,689
(119,695) (111,374) (6,150) – (1,320,350)
237,397 (1,071,256)
237,397
–
5,463,433
6,715,235
– (100,344) (27,200) – –
– (100,344) (27,200) (419,559) –
(127,544) (18,691,526) (608,597) 1,107,791
(608,597) 7,823,026
The accompanying notes form an integral part of these financial statements.
FS4
Singapore Indian Development Association Singapore Indian Development FinancialAssociation statements Year ended 31 December 2018
Statement of changes in funds Year ended 31 December 2018 Accumulated funds, representing total unrestricted funds S$ At 1 January 2017
40,277,188
Total comprehensive income for the year Net income for the year, representing total comprehensive income for the year At 31 December 2017
7,823,026 48,100,214
At 1 January 2018
48,100,214
Total comprehensive income for the year Net income for the year, representing total comprehensive income for the year At 31 December 2018
5,463,433 53,563,647
The accompanying notes form an integral part of these financial statements.
FS5
Singapore Indian Development Association Financial statements Year ended 31 December 2018
Statement of cash flows Year ended 31 December 2018 Note Cash flows from operating activities Net income for the year Adjustments for: Dividend income Loss/(gain) on disposal of investments Fair value loss/(gain) on investments Exchange loss Deferred capital grants amortised Depreciation Loss on disposal/write off of plant and equipment Interest income: - unit trust fixed income - fixed deposits and bank balances Share of result of associate
4
Changes in: - donations and Government Subvention receivable - deposits, prepayments, tuition fee and other receivables - other payables and accrued expenses, and unutilised specific grants/donations Net cash from operating activities Cash flows from investing activities Purchase of plant and equipment Proceeds from disposal of plant and equipment Loan due from associate Investments related management fee rebates Purchase of investments Proceeds from sale of investments Interest received: - unit trust fixed income - fixed deposits and bank balances Dividend received Net cash used in investing activities
5
Cash flows from financing activities Fixed deposits pledged Net cash used in financing activities Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at 1 January Cash and cash equivalents at 31 December
2018 S$
2017 S$
5,463,433
7,823,026
(213,115) 119,695 1,320,350 6,150 (7,251) 247,425 243
(168,289) (6,626) (1,650,000) 27,200 (9,448) 233,057 419,559
(30) (35,771) (237,397) 6,663,732
(42) (18,975) 608,597 7,258,059
(378,350) (314,298)
358,588 111,872
(257,118) 5,713,966
800,356 8,528,875
(306,698) 30 (200,000) 134,277 (34,588,706) 27,394,129
(478,502) 3,000 (400,000) 100,588 (8,920,728) 2,457,837
30 35,771 213,115 (7,318,052)
42 18,925 168,289 (7,050,549)
-
9
(1,604,086) 11,835,215 10,231,129
(8,345) (8,345) 1,469,981 10,365,234 11,835,215
The accompanying notes form an integral part of these financial statements.
FS6
Singapore Indian Development Association Financial statements Year ended 31 December 2018
Interpretations and amendments to published standards effective in 2018 On 1 January 2018, the Association adopted the new or amended FRS and Interpretations to FRS (“INT FRS”) that are mandatory for application for the financial year. Changes to the Association’s accounting policies have been made as required, in accordance with the transitional provisions in the respective FRS and INT FRS. The adoption of these new or amended FRS and INT FRS did not result in substantial changes to the accounting policies of the Association and had no material effect on the amounts reported for the current or prior financial years, except for the following: (a)
Adoption of FRS 109 Financial Instruments The accounting policies for financial instruments under FRS 109 are disclosed in Note 2.6. The adoption of FRS 109 did not result in any restatement.
2.2
Investment in Associate Associate is an entity over which the Association has significant influence, but not control, generally accompanied by a shareholding giving rise to voting rights of 20% and above but not exceeding 50%. Investment in associate is accounted for in the financial statements using the equity method of accounting less impairment losses, if any. Investment in associate is initially recognised at cost. The cost of an acquisition is measured at the fair value of the assets given, equity instruments issued or liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Under the equity method of accounting, the investment is initially recognised at cost and adjusted thereafter to recognise Association’s share of its associate’s post-acquisition losses of the investee in profit or loss. When the Association’s share of losses in associate equals to or exceeds its interest in the associate, together with any long-term interests that form part thereof, the Association does not recognise further losses, unless it has legal or constructive obligations to make, or has made, payments on behalf of the associate. Investment in associate is derecognised when the Association loses significant influence.
2.3
Currency translation The financial statements are presented in Singapore Dollar, which is the functional currency of the Association. Transactions in a currency other than the functional currency (“foreign currency”) are translated into the functional currency using the exchange rates at the dates of the transactions. Currency exchange differences resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at the closing rates at the balance sheet date are recognised in statement of comprehensive income. All foreign exchange gains and losses impacting profit or loss are presented in the statement of comprehensive income.
FS8
Singapore Indian Development Association Financial statements Year ended 31 December 2018
2.4
Plant and equipment Plant and equipment are recognised at cost less accumulated depreciation and accumulated impairment losses. Subsequent expenditure relating to plant and equipment that has already been recognised is added to the carrying amount of the asset only when it is probable that future economic benefits associated with the item will flow to the Association and the cost of the item can be measured reliably. All other repair and maintenance expenses are recognised in statement of comprehensive income when incurred. Depreciation is calculated using the straight-line method to allocate their depreciable amounts over their estimated useful lives as follows: Computer Equipment Furniture and fittings Office equipment Office renovation
Useful lives 3 years 5 years 5 years 3 years
The residual values, estimated useful lives and depreciation method of plant and equipment are reviewed, and adjusted as appropriate, at each balance sheet date. The effects of any revision are recognised in statement of comprehensive income when the changes arise. 2.5
Impairment of non-financial assets Plant and equipment and Investment in Associate are tested for impairment whenever there is any objective evidence or indication that these assets may be impaired. For the purpose of impairment testing of assets, recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. If this is the case, the recoverable amount is determined for the cash-generating unit (CGU) to which the asset belongs. If the recoverable amount of the asset or (CGU) is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. The difference between the carrying amount and recoverable amount is recognised as an impairment loss in statement of comprehensive income. An impairment loss for an asset is reversed only if, there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. The carrying amount of this asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of accumulated depreciation) had no impairment loss been recognised for the asset in prior years. A reversal of impairment loss for an asset is recognised in statement of comprehensive income.
FS9
Singapore Indian Development Association Financial statements Year ended 31 December 2018
2.6
Financial Assets (a)
The accounting for financial assets before 1 January 2018 under FRS 39 are as follows: The Association classifies its financial assets in the following categories: financial assets at fair value through profit or loss and loans and receivables. The classification depends on the purpose for which the assets were acquired. Management determines the classification of its financial assets at initial recognition. (i)
Financial assets at fair value through profit or loss This category has two sub-categories: financial assets held for trading, and those designated at fair value through profit or loss at inception. A financial asset is classified as held for trading if it is acquired principally for the purpose of selling in the short term. Financial assets designated as at fair value through profit or loss at inception are those that are managed and their performances are evaluated on a fair value basis, in accordance with a documented Association investment strategy. Financial assets at fair value through profit or loss are initially recognised at fair value plus transaction costs. Transaction costs for financial assets at fair value through profit or loss are recognised immediately as expenses. Financial assets at fair value through profit or loss are subsequently carried at fair value. Changes in the fair values of financial assets at fair value through profit or loss including the effects of currency translation, interest and dividends, are recognised in statement of comprehensive income when the changes arise.
(ii)
Loans and receivables Bank balances Receivables Bank balances and Receivables are initially recognised at fair value plus transaction costs and subsequently carried at amortised cost using the effective interest method, less accumulated impairment losses. The Association assesses at each balance sheet date whether there is objective evidence that a financial asset or a group of financial assets is impaired and recognises an allowance for impairment when such evidence exists. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy and default or significant delay in payments are objective evidence that these financial assets are impaired.
FS10
Singapore Indian Development Association Financial statements Year ended 31 December 2018
The carrying amount of these assets is reduced through the use of an impairment allowance account which is calculated as the difference between the carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. These assets are presented as current assets except for those that are expected to be realised later than 12 months after the balance sheet date, which are presented as non-current assets. (b)
The accounting for financial assets from 1 January 2018 under FRS 109 are as follows: The Association classifies its financial assets into the following measurement categories: • •
Amortised cost; and Fair value through profit or loss (FVPL).
The classification of debt instruments depends on the Association’s business model for managing the financial assets as well as the contractual terms of the cash flows of the financial assets. (i)
At initial recognition At initial recognition, the Association measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial assets. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss.
(ii)
At subsequent measurement 1. Debt instrument Debt instruments of the Association mainly comprise of bank balances and receivables. The Association managed these group of financial assets by collecting the contractual cash flow and these cash flows represents solely payment of principal and interest. Accordingly, these group of financial assets are measured at amortised cost subsequent to initial recognition. A gain or loss on a debt investment that is subsequently measured at amortised cost and is not part of a hedging relationship is recognised in profit or loss when the asset is derecognised or impaired. Interest income from these financial assets are recognised using the effective interest rate method. The Association assesses on forward looking basis the expected credit losses associated with its debt instruments carried at amortised cost.
FS11
Singapore Indian Development Association Financial statements Year ended 31 December 2018
For receivables, the Association applied the simplified approach permitted by the FRS 109, which requires expected lifetime losses to be recognised from initial recognition of the receivables. For bank balances, the general 3 stage approach is applied. Credit loss allowance is based on 12-month expected credit loss if there is no significant increase in credit risk since initial recognition of the assets. If there is a significant increase in credit risk since initial recognition, lifetime expected credit loss will be calculated and recognised. 2. Equity investments The Association subsequently measures all its equity investments at their fair values. Equity instruments are classified as FVPL with movements in their fair values recognised in profit or loss in the period in which the changes arise and presented in “other income/(costs)”. Dividends from equity investments are recognised in profit or loss as “dividend income”. Regular way purchases and sales of these financial assets are recognised on trade date – the date on which the Association commits to purchase or sell the asset. On disposal, the differences between the carrying amount and sales proceed is recognised in profit or loss. 2.7
Cash and cash equivalents For the purpose of presentation in the statement of cash flows, cash and cash equivalents include cash on hand, cash at bank in investment accounts and deposits with financial institutions which are subject to an insignificant risk of change in value. For the purpose of the statement of cash flows, pledged fixed deposits are excluded from cash and cash equivalents.
2.8
Other Payables Other payables represent liabilities for goods and services provided to the Association prior to the end of financial year which are unpaid. They are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business, if longer). Otherwise, they are presented as non-current liabilities. Other payables are initially recognised at fair value, and subsequently carried at amortised cost using the effective interest method
2.9
Offsetting of financial instruments Financial assets and liabilities are offset and the net amount reported in the statement of financial position when there is a legally enforceable right to offset and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously.
FS12
Singapore Indian Development Association Financial statements Year ended 31 December 2018
2.10
Provisions Provisions are recognised when the Association has a present legal or constructive obligation as a result of past events, it is more likely than not that an outflow of resources will be required to settle the obligation and the amount has been reliably estimated. Provisions are measured at the present value of the expenditure expected to be required to settle the obligation using a pre-tax discount rate that reflects the current market assessment of the time value of money and the risks specific to the obligation. The increase in the provision due to the passage of time is recognised in the statement of comprehensive income as finance expense. Changes in the estimated timing or amount of the expenditure or discount rate are recognised in statement of comprehensive income when the changes arise.
2.11
Employee compensation Employee benefits are recognised as an expense, unless the cost qualifies to be capitalised as an asset. (a)
Defined contribution plans Defined contribution plans are post-employment benefit plans under which the Association pays fixed contributions into separate entities such as the Central Provident Fund on a mandatory, contractual or voluntary basis. The Association has no further payment obligations once the contributions have been paid.
(b)
Employee leave entitlement Employee entitlements to annual leave are recognised when they accrue to employees. A provision is made for the estimated liability for annual leave as a result of services rendered by employees up to the balance sheet date.
2.12
Income Donations from the Central Provident Fund Scheme and the Singapore Totalisator Board, which are probable for collection, are recognised on an accrual basis. All other donations are recognised on a receipt basis. Tuition programme fees income is recognised on an accrual basis. Grants for specific purposes are recognised to the extent the related expenditure has been incurred and the grant is receivable. Government Subvention and grants, which are probable for collection, are recognised on an accrual basis.
FS13
Singapore Indian Development Association Financial statements Year ended 31 December 2018
2.13
Expenditure incurred on charitable activities Expenditures incurred on charitable activities comprise direct expenditure including direct staff costs attributable to the activities. In addition, it also includes support costs (costs relating to central functions) and other costs that have been allocated on a basis consistent with the use of the resources. Administrative and governance costs Administrative and governance costs comprise all costs attributable to the general running of the Association, in providing the governance infrastructure and in ensuring public accountability.
2.14
Interest Income Interest income is recognised using the effective interest method.
2.15
Operating lease payments Payments made under operating leases (net of any incentives received from the lessor) are recognised in statement of comprehensive income on a straight-line basis over the period of the lease.
2.16
Funds of the Association Unrestricted funds Unrestricted funds which are represented by Accumulated funds comprise the general operating and investment funds. These funds are available for use at the discretion of the management in furtherance of the general objectives of the Association.
2.17
Deferred capital grant – from government Government grants related to maintenance of plant and equipment are recognised initially as deferred capital grant at fair value when there is reasonable assurance that they will be received and the Association will comply with the conditions associated with the grant. These grants are recognised as income over the periods necessary to match them with the depreciation expense on a systematic basis over the useful life of the asset.
FS14
Singapore Indian Development Association Financial statements Year ended 31 December 2018
3
Critical accounting estimates, assumptions and judgements Estimates, assumptions and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Information about critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements is included in the following note: • Note 5 – interest in associate; Information about assumptions and estimation uncertainty that have a significant risk of resulting in a material adjustment within the next financial year are included in the following note: • Note 5 – interest in associate; and • Note 21 – financial instruments Measurement of fair values A number of the Association’s accounting policies and disclosures require the measurement of fair values for financial assets. The Association has an established control framework with respect to the measurement of fair values. This includes an Investment Committee that has overall responsibility for all significant fair value measurements, including Level 3 fair values, and reports directly to the Board of Trustees. The Investment Committee regularly reviews significant unobservable inputs and valuation adjustments. Third party confirmations are used to measure fair values of investments in financial instruments. The Investment Committee assesses and documents the evidence obtained from the third parties to support the conclusion that such valuations meet the requirements of FRS, including the level in the fair value hierarchy in which such valuations should be classified. Significant valuation issues are reported to the Association’s Audit Review Committee.
FS15
Singapore Indian Development Association Financial statements Year ended 31 December 2018
When measuring the fair value of an asset, the Association uses market observable data as far as possible. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follow: § 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). Further information about the assumptions made in measuring fair values is included in note 22.
4
Plant and equipment Computer equipment S$ Cost At 1 January 2017 Additions Transfers Disposals/Write off At 31 December 2017 Additions Transfers Disposals/Write off At 31 December 2018
Furniture Capital and work-in Office Office fittings equipment renovation progress S$ S$ S$ S$
1,102,083 47,086 213,109 1,362,278 35,585 122,824 (31,214) 1,489,473
332,899 20,850 – (17,550) 336,199 26,789 14,110 (19,979) 357,119
196,106 79,065 4,747 (35,275) 244,643 38,219 3,574 (3,050) 283,386
783,000 17,075 419,842 (421,229) 798,688 – 72,784 (106,938) 764,534
Accumulated depreciation At 1 January 2017 969,120 Depreciation 133,828 Disposals/Write off At 31 December 2017 1,102,948 Depreciation 137,890 Disposals/Write off (30,972) At 31 December 2018 1,209,866
280,199 26,047 (17,552) 288,694 29,440 (19,979) 298,155
150,060 30,403 (33,943) 146,520 33,796 (3,019) 177,297
714,670 42,779 – 757,449 46,299 (106,938) 696,810
47,505 58,964
98,123 106,089
41,239 67,724
Carrying amounts At 31 December 2017 At 31 December 2018
259,330 279,607
Total S$
370,064 2,784,152 314,426 478,502 (637,698) – – (474,054) 46,792 2,788,600 206,105 306,698 (213,292) – – (161,181) 39,605 2,934,117 – – – – – – – 46,792 39,605
2,114,049 233,057 (51,495) 2,295,611 247,425 (160,908) 2,382,128 492,989 551,989
FS16
Singapore Indian Development Association Financial statements Year ended 31 December 2018
5
Interest in Associate 2018 S$
Equity interest in Associate Loan due from Associate Accumulated share of losses Total carrying amount of investment in Associate
2017 S$
100 1,000,000 (371,300) 628,800
100 800,000 (608,697) 191,403
In October 2015, the Association entered into a memorandum of understanding (MOU), together with Chinese Development Assistance Council, Yayasan Mendaki, and the Eurasian Association (together Self-Help Groups (SHGs)), to incorporate Self Help Groups Student Care Limited (SHGSCL) (the “Associate”). Incorporation of the Associate is in line with the mandate by the Ministry of Education (MOE) to provide educational and family related support services to students from low and middle income families. Programmes to be conducted by the Associate will be all-inclusive and multiracial which is aligned with the Association’s Mission. The Associate was incorporated in November 2015 and is a public company limited by guarantee. Upon incorporation of the Associate, each SHG contributed S$100. Further, as part of the MOU, the SHGs, collectively, agreed to a total loan commitment of $4 million towards the operations of the Associate. The Association’s share of this loan commitment was $800,000, or 20%. The entire loan commitment had been disbursed as at 31 December 2017. On 21 March 2018, the SHGs, collectively, agreed to a final disbursement request of $1 million towards the operations of the Associate. The Association’s share of this loan commitment of $200,000, or 20% has been disbursed as at 31 December 2018. The Association has appointed two directors to the Board of Directors to participate in operational and financial decisions of the Associate. The Association is entitled to 25% of total voting rights at the Board of Directors meetings. Details of the Associate are as follows: Name
Principal activities
Self Help Groups Operate school Student Care based student care centres in Limited Singapore
Place of Voting rights incorporation held 2018 2017 % % Singapore
25
25
Share of loan commitment 2018 2017 % % 20
20
Economic interest* 2018 2017 % % 20
20
*The economic interests of the Association is calculated based on the Association’s loan commitment that in substance forms part of the Association’s net investment in the associate.
FS17
Singapore Indian Development Association Financial statements Year ended 31 December 2018
The summarised unaudited financial information of the Associate which is prepared in accordance with FRS: 2018 S$ (Unaudited) Statement of comprehensive income Revenue Loss and total comprehensive loss for the year Statement of financial position Non-current assets Current assets Non-current liabilities Current liabilities Net deficit Total cost of investment in Associate, including long term interests Share of total comprehensive loss Interest in net assets of investee at end of the year
6,781,058 (250,042)
2017 S$ (Audited) 4,193,732 (196,100)
398,150 3,896,976 (5,000,000) (1,151,127) (1,856,001)
407,327 3,634,456 (4,000,000) (1,647,742) (1,605,959)
1,000,100 (371,300) 628,800
800,100 (608,697) 191,403
The objective of Association for setting up the Associate is to extend its Mission to students from all races in Singapore and the investment in the Associate, in substance, is not meant to be a commercially-driven transaction with the purpose of profit takings. Notwithstanding the Association’s ability to participate in operational and financial decisions of the Associate, the MOU prohibits the Association, 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. Consequently the Association does not equity account for such variable returns. Management has exercised significant judgement in determining the extent of its significant influence over the Associate, and concluded that the Association has significant influence over the Associate. Therefore, the Association recognised it as an associate in the statement of financial position. Loan to Associate was made in the form of unsecured and interest free loan. As the Associate has plans to scale up its operations, the settlement of the loan is not likely to occur in the foreseeable future. Accordingly, this loan represents part of the Association’s long-term interest in the Associate. The Association’s financial statements include the Association’s share of losses of the Associate at 20% based on the Association’s proportionate share of loan commitment to the Associate. The Association’s exposure to losses is limited to the carrying amount of the investment, together with any long-term interests in the Associate. There are no contingent liabilities relating to the Association’s interest in the Associate.
FS18
Singapore Indian Development Association Financial statements Year ended 31 December 2018
The carrying value of the interest in associate is tested for impairment whenever there is any objective evidence or indication that it may be impaired. The recoverable amount of the interest in associate is determined based on the associate’s future cash flows, which involve significant estimates and assumptions that are subject to risks and uncertainties. There is a possibility that changes in circumstances will alter these projections which may impact the recoverable amount of the associate. In such circumstances, some or all of the carrying value of the associate may be further impaired. The reduction in share of total comprehensive loss in financial year 2018 is due to the recognition of additional grants received from the Singapore Totalisator Board by the Associate.
6
Government Subvention receivable This represents the annual “Dollar-for-Dollar” Matching Grant receivable, subject to a maximum of S$3,400,000 (2017: S$3,400,000), from the Ministry of Culture, Community and Youth (MCCY).
7
Deposits, prepayments, tuition fee and other receivables 2018 S$ Deposits Other receivables Loans and receivables Prepayments
36,262 890,799 927,061 122,057 1,049,118
2017 S$ 22,837 597,141 619,978 114,842 734,820
The Association’s exposure to credit risk and impairment losses for receivables are disclosed in note 21.
8
Financial assets at fair value through profit or loss Note Financial assets at fair value through profit or loss: - REITS/real estate funds - Absolute return funds - Private equity funds - Unit trusts: - equity - fixed income - Cash at bank in investment accounts held with fund managers/custodians
9
2018 S$
2017 S$
130,712 670 38,192
130,590 779 63,440
14,691,613 26,178,642 41,039,829
12,368,267 22,862,648 35,425,724
1,473,957 42,513,786
445,259 35,870,983
FS19
Singapore Indian Development Association Financial statements Year ended 31 December 2018
9
Cash and cash equivalents Note Bank balances Fixed deposits Cash and cash equivalents in the statement of financial position Cash at bank in investment accounts Fixed deposits pledged* Cash and cash equivalents in the statement of cash flows
8
2018 S$
2017 S$
6,401,148 2,470,369
6,835,263 4,669,038
8,871,517 1,473,957 10,345,474 (114,345) 10,231,129
11,504,301 445,259 11,949,560 (114,345) 11,835,215
*Fixed deposits have been pledged to obtain a letter of guarantee in lieu of deposit fee from a bank for the purpose of obtaining a Temporary Occupation Licence (TOL) for the Association’s premises (see note 14).
10
Accumulated funds Accumulated funds are the Association’s general operating funds and can be used for any of the Association’s activities. The Association has been funding the operations of SINDA Family Service Centre (FSC) using its unrestricted funds. The Association will possibly recover its funds from the surpluses realised in prospective years by FSC. FSC deficit for the year and its accumulated deficit as at year end are as follows: 2018 S$ (Deficit)/Surplus Accumulated Deficit
(332,475) (1,309,229)
2017 S$ 258,454 (976,754)
FSC is a one-stop centre that provides social work services, counselling and financial assistance to those in need. Ministry of Social and Family Development, National Council of Social Service and Singapore Totalisator Board partially fund to operate the programmes in accordance with the prevailing service model. FSC reserves are restricted for the operations of FSC, for the benefit of its intended clients, in keeping with the funder/donor’s intent. The reserves will not be transferred out of the programme for other purposes. FSC has been in an accumulated deficit position since 2011. The Association has used $1,309,229 (2017: $976,754) from its accumulated funds to fund FSC as at 31 December 2018.
FS20
Singapore Indian Development Association Financial statements Year ended 31 December 2018
11
Deferred capital grants 2018 S$ Current
2017 S$ – –
7,251 7,251
The Association has been awarded a government grant. This grant received in 2014, was unconditional and was utilised over the useful lives of the respective assets. Movement: 2018 S$ Balance at 1 January Amortisation to the statement of comprehensive income during the year Balance at 31 December
12
2017 S$
7,251
16,699
(7,251) –
(9,448) 7,251
Other payables and accrued expenses 2018 S$ Payables to suppliers and service providers Accrued expenses
922,970 1,531,988 2,454,958
2017 S$ 1,140,598 1,062,963 2,203,561
The Association’s exposure to liquidity risk related to other payables and accrued expenses is disclosed in note 21.
13
Unutilised specific grants/donations These comprise specific grants/donations for: 2018 S$ (i) (ii) (iii) (iv) (v) (vi) (vii) (viii)
Tamil Language Learning and Promotion Committee (TLLPC) Singapore Indian Education Trust (SIET) The Straits Times School Pocket Money Fund (STSPMF) Singapore Press Holdings (SPH) Foundation Newspaper Project Project Give donations Youth Development Programmes Single Parent Programme/Sponsorships Care and Share Funding
2017 S$
294,956 50,581 28,680
366,310 47,881 37,820
19,888 243,957 64,500 927,689 1,444,102 3,074,353
16,554 345,119 64,500 950,994 1,753,690 3,582,868
FS21
Singapore Indian Development Association Financial statements Year ended 31 December 2018
(i)
Tamil Language Learning and Promotion Committee (TLLPC) Tamil Language Learning and Promotion Committee (TLLPC) is a committee set up by the Ministry of Education (MOE) to promote the learning and use of the Tamil language. The Association provides support to TLLPC in the administration of the TLLPC funds. Grants and donations are the main sources of income with MOE providing a matching grant for funds raised by the TLLPC.
(ii) Singapore Indian Education Trust (SIET) Singapore Indian Education Trust (SIET) is a registered charity offering solutions to the needs and challenges impacting the educational performance of the Indian community. The Association’s programmes are designed to focus mainly on the education of students from pre-primary to secondary while SIET’s focus is on tertiary level education. Both of the organisations recognise the immense opportunity to leverage on the synergy between the two organisations. The collaborative arrangement has been set up to manage donations received on behalf of SIET and its disbursements to students who qualify for financial assistance for their course of study at the tertiary institutions and other schemes administered by SIET. (iii) The Straits Times School Pocket Money Fund (STSPMF) The Association receives yearly grants from the The Straits Times School Pocket Money Fund pertaining to STSPMF. All bursary payments made under this service will be paid out from STSPMF based on criteria set out by the agency. (iv) Singapore Press Holdings (SPH) Foundation Newspaper Project SPH Foundation Newspaper Project is a programme to sponsor subscriptions to the Straits Times and Tamil Murasu Newspapers. Under this project, the Association identifies the needy households who wish to read the Straits Times newspaper and SPH sponsors the subscription costs. (v) Project Give donations Project Give is a community fund raising campaign to raise money for educational and financial assistance for students from needy families. It typically runs through festivals like Deepavali. Funds are raised via direct cheque donations, donation boxes placed with partner retailers, online, and at a booth set up by the Association during Deepavali Fair at Campbell Lane (Deepavali Bazaar) (2017: Campbell Lane (Deepavali Bazaar)). (vi) Youth Development Programmes Youth Development Programmes specifically focus on music related programmes.
FS22
Singapore Indian Development Association Financial statements Year ended 31 December 2018
(vii) Single Parent Programme/Sponsorships Single Parent Programme provides holistic assistance to single parents and their children. Children of single parents would receive assistance from all of the Association’s programmes including tuition, NEU PC and enrichment while parents receive assistance on skills upgrading, financial planning and family support to help build their self-esteem and become self-sufficient. Sponsorships were received for specific programmes like financial assistance, bursary and educational programmes. (viii) Care and Share Funding Care and Share Funding is a national fund-raising and volunteerism movement led by Community Chest for the social service sector, in celebration of SG50 (Singapore’s 50th year of independence). Eligible donations raised by participating Voluntary Welfare Organisations (VWOs) from 1 December 2013 until 31 March 2016 will be matched dollar-for-dollar by the Government of Singapore and is capped at S$2,900,000 per VWO. The matched amount will be utilised towards building the capabilities and capacities of the social service sector and supporting social services to meet rising needs.
FS23
Singapore Indian Development Association Financial statements Year ended 31 December 2018
14
Expenditures incurred on charitable activities, administrative and governance costs Note Charitable activities Education programmes Tuition programmes: - STEP programme - Project Teach Other education programmes: - Enrichment programmes - Bursary/scholarships - Staff costs - Support costs
Family services - Casework and counselling - School Pocket Money Fund (SPMF) - Single Parents Programme - Other programmes - Staff costs - Support costs
Youth development programmes - SINDA Youth Club activities - Youth motivational programmes - Staff costs - Support costs
Parent and children programmes - Preschool programmes - Programme for parents - Staff costs - Support costs
Engagement and volunteer management unit - Networking initiatives - Collaborative programmes - Volunteer management - Staff costs - Support costs
15
15
15
15
15
2018 S$
2017 S$
3,456,819 472,891
3,425,677 367,134
319,275 845,990 1,839,284 1,991,058 8,925,317
481,914 761,480 2,008,341 1,937,214 8,981,760
340,105 46,780 4,110 646,362 1,402,217 986,739 3,426,313
220,549 47,680 11,237 458,845 1,241,508 718,486 2,698,305
130,657 249,724 710,415 377,832 1,468,628
157,795 216,889 608,954 324,336 1,307,974
606,345 213,654 485,528 490,808 1,796,335
328,596 173,799 346,591 375,120 1,224,106
162,590 38,441 29,697 624,269 333,805 1,188,802
121,473 30,301 2,533 722,462 288,061 1,164,830
FS24
Singapore Indian Development Association Financial statements Year ended 31 December 2018
Note Publicity and marketing expenses - Corporate communications - Market communications - Staff costs - Support costs
15
Administrative and governance costs - Professional charges - Temporary Occupation Licence (TOL) fee expenses* - Support costs
15
2018 S$
2017 S$
98,332 16,238 49,671 396,329 560,570
50,799 4,400 29,048 299,692 383,939
61,718 491,682 1,965,344 2,518,744
58,062 491,682 1,696,617 2,246,361
*The Association occupies land owned by the Government of Singapore at No. 1 Beatty Road Singapore 209943 and pays an annual Temporary Occupation Licence (TOL) fee expense. The expense is supported by the TOL Grant from the Ministry of Culture, Community and Youth (MCCY) of S$491,682 (2017: S$491,682). The expenditures have been summarised as follows: ‹--------------- 2018 ---------------› Support costs (see note Direct 15) costs Total S$ S$ S$ Programmes Education programmes Family services Youth development programmes Parent and children programmes Engagement and volunteer unit Publicity and marketing expenses Administrative and governance costs
‹--------------- 2017 ---------------› Support costs (see note Direct 15) costs Total S$ S$ S$
6,934,259 2,439,574
1,991,058 8,925,317 986,739 3,426,313
1,090,796
377,832 1,468,628
983,638
324,336 1,307,974
1,305,527
490,808 1,796,335
848,986
375,120 1,224,106
854,997
333,805 1,188,802
876,769
288,061 1,164,830
164,241
396,329
553,400
560,570
1,965,344 2,518,744
7,044,546 1,937,214 8,981,760 1,979,819 718,486 2,698,305
84,247
299,692
383,939
549,744 1,696,617 2,246,361
FS25
Singapore Indian Development Association Financial statements Year ended 31 December 2018
15
Support costs
Staff costs S$ 2018 Education programmes Family services Youth development programmes Parent and children programmes Engagement and volunteer management unit Publicity and marketing expenses Administrative and governance costs Total 2017 Education programmes Family services Youth development programmes Parent and children programmes Engagement, volunteer management unit Publicity and marketing expenses Administrative and governance costs Total
Maintenance and administrative expenses Depreciation S$ S$
Total S$
1,230,905 576,987 192,329 269,260
698,297 362,741 153,338 189,383
61,856 47,011 32,165 32,165
1,991,058 986,739 377,832 490,808
192,329 296,524
124,156 82,485
17,320 17,320
333,805 396,329
1,038,576 3,796,910
887,180 2,497,580
39,588 247,425
1,965,344 6,541,915
1,244,522 437,264 168,179 168,179
634,428 248,594 128,190 162,660
58,264 32,628 27,967 44,281
1,937,214 718,486 324,336 375,120
168,179 206,401
103,568 76,977
16,314 16,314
288,061 299,692
941,803 3,334,527
717,525 2,071,942
37,289 233,057
1,696,617 5,639,526
Support costs in respect of staff costs, maintenance and administrative expenses are allocated to charitable activities based on level of activities and floor area occupied. Support costs in respect of depreciation are allocated to charitable activities based on floor area occupied.
FS26
Singapore Indian Development Association Financial statements Year ended 31 December 2018
16
Net income for the year The following items have been included in arriving at net income for the year: Note Employee benefits expense (see below) Depreciation
4
Employee benefits expense: Staff costs Contributions to defined contribution plans
17
2018 S$
2017 S$
8,951,750 247,425
8,291,426 233,057
7,847,142 1,104,608 8,951,750
7,279,489 1,011,937 8,291,426
Taxation The Association is an approved charity organisation under the Charities Act, Chapter 37 and an Institution of Public Character under the Income Tax Act, Chapter 134. No provision for tax has been made in the financial statements as the Association is exempt from income tax.
18
Transactions with key management personnel Key management personnel compensation comprised:
Short-term employment benefits Post-employment benefits (including CPF)
Salary range Salary above S$200,000 Salary within range S$150,000 to S$200,000 Total
2018 S$
2017 S$
682,400 46,673 729,073
691,838 48,271 740,109
2 1 3
3 − 3
The key management personnel remuneration comprise remuneration paid to the top three (2017: three) key executives including the Chief Executive Officer. Two of the key management personnel were seconded from the Ministry of Education (MOE) in 2017. The Trustees and Executive Committee members do not receive any remuneration from the Association.
FS27
Singapore Indian Development Association Financial statements Year ended 31 December 2018
19
Commitments Operating lease commitments – where the Association is a lessee The Association leases land, bus and photocopier machines under non-cancellable operating lease agreements. The leases have varying terms, escalation clauses and renewal rights. The future minimum lease payables under non-cancellable operating leases contracted for at the balance sheet date but not recognised as liabilities, are as follows:
Not later than one year Between one and five years Later than five years
20
2018 S$
2017 S$
602,161 99,296 701,457
610,161 701,457 1,311,618
Related party transactions For the purpose of financial statements, parties are considered to be related to the Association if the Association has the ability, directly, or indirectly, to control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Association and the party are subject to common control or common significant influence. Related parties may be individuals or other entities. Other than the transactions disclosed elsewhere in the financial statements, there were no significant related party transactions between the Association and its related parties during the financial year.
FS28
Singapore Indian Development Association Financial statements Year ended 31 December 2018
21
Financial instruments Financial risk management Overview The Association has exposure to the following risks arising from financial instruments: • credit risk • liquidity risk • market risk This note presents information about the Association’s exposure to each of the above financial risks. Further quantitative disclosures are included throughout these financial statements. Risk management framework The Board of Trustees and Executive Committee have an overall responsibility for the establishment and oversight of the Association’s risk management framework. The Association’s activities expose it to credit risk, liquidity risk, market risk, currency risk, interest rate risk and price risk. The Association has policies and processes for measuring and managing these risks. The Board of Trustees and Executive Committee review and approve the policies for managing each of these risks. The Association’s risk management policies are established to identify and analyse the risks faced by the Association, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in the Association’s activities. The Association, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and responsibilities. There were no significant changes to the Association’s financial risks during the year. Credit risk Credit risk is the risk of financial loss to the Association if the counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Association’s receivables from various sources and investments. The Association’s exposure to credit risk arises principally from receivables, financial assets – investments, and cash and cash equivalents. The carrying amounts of financial assets in the statement of financial position represent the Association’s maximum exposure to credit risk. For banks and financial institutions, the Association mitigates its credit risks by transacting with counterparties who are rated “B” and above by independent rating agencies. The Association’s cash and cash equivalents are placed with banks and financial institutions which are regulated and rated A and B (2017: A and B) on Standard & Poor’s financial strength ratings. At the reporting date, the Association’s cash and cash equivalents are placed with three financial institutions (2017: three).
FS29
Singapore Indian Development Association Financial statements Year ended 31 December 2018
Exposure to credit risk The Association’s exposure to credit risk is low as most of its receivables are from government agencies. As at the end of the financial year, 86% (2017: 89%) of the Association’s receivables are due from 3 counterparties (2017: 3 counterparties). Impairment of financial assets The Association has applied the simplified approach by using the provision matrix to measure the lifetime expected credit losses for trade receivables. To measure the expected credit losses, these receivables have been grouped based on shared credit risk characteristics and days past due. The Association assesses on forward looking basis the expected credit losses in respect of its trade receivables. Receivables are written off when there is no reasonable expectation of recovery based on historical collection trend. Receivables (current) comprise: Note Government Subvention receivable Donations receivable – Central Provident Fund Board Scheme Donations receivable – Singapore Totalisator Board Deposits, tuition fees and other receivables
7
2018 S$
2017 S$
3,400,000
3,400,000
1,577,747 500,000 927,061 6,404,808
1,449,398 250,000 619,978 5,719,376
There is no allowance for receivables required as at 31 December 2018 as the Association believes that the unimpaired amounts are still collectible in full, based on historic payment behaviour and the credit quality is determined to be at an acceptable risk. The Association’s credit risk exposure in relation to trade receivables under FRS 39 as at 31 December 2017 are set out as follows: 2017 S$ Not past due nor impaired Past due 0 – 30 days Past due 31 – 60 days Past due 61 – 90 days Past due 91 – 180 days
5,467,806 1,570 – 250,000 – 5,719,376
FS30
Singapore Indian Development Association Financial statements Year ended 31 December 2018
In 2017, the impairment of financial assets was assessed based on the incurred loss impairment model. The main components of this allowance was a specific loss component that related to individually significant exposures. There was no allowance required as at 31 December 2017 as the Association believed that the unimpaired amounts were still collectible in full, based on historic payment behaviour and the credit quality was determined to be at an acceptable risk. Financial assets that are neither past due nor impaired Financial assets that are neither past due nor impaired are mainly deposits with banks with high credit-ratings assigned by international credit-rating agencies. Trade receivables that are neither past due nor impaired are with government agencies with low credit risk. Liquidity risk Liquidity risk is the risk that the Association will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Association’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Association’s reputation. Typically, the Association ensures that it has sufficient cash on demand to meet expected operational expenses. This excludes the potential impact of extreme circumstances that cannot reasonably be predicted. As at reporting date, the contractual undiscounted cash flows of the Association’s financial liabilities approximate the carrying values and are due within 1 year. Market risk Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Association’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return on risk. Market risk is managed by the Investment Committee by closely monitoring the market data and by setting up detailed investment policies. Currency risk The Association’s exposure to currency risk relates primarily to its investments. By virtue of its investment activities to optimise return, the Association is exposed to the effects of foreign currency exchange rate fluctuations, principally in currencies such as the United States dollar (USD).
FS31
Singapore Indian Development Association Financial statements Year ended 31 December 2018
Currency risk (continued) The Association’s foreign currency exposures at the reporting date are as follows: 2018 S$ Financial assets – investments USD
436,063
2017 S$
453,059
Sensitivity analysis A 10% change of the USD against the Singapore Dollar at the reporting date would vary the net income by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant. Net income S$ 31 December 2018 - strengthened - weakened
43,606 (43,606)
31 December 2017 - strengthened - weakened
45,306 (45,306)
Interest rate risk At the reporting date, the interest rate profile of the interest-bearing financial instruments was as follows: Nominal amount 2018 2017 S$ S$ Fixed rate instruments Fixed deposits
2,470,369
4,669,038
At the reporting date, management assessed that an increase/ (decrease) of 25 basis points in interest rates would have no significant impact to the results of the Association (2017: No significant impact). 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.
FS32
Singapore Indian Development Association Financial statements Year ended 31 December 2018
Price risk (continued) Sensitivity analysis The Association’s investments are designated as fair value through income or expenditure. A 10% increase or decrease in the underlying market prices at the reporting date, with all variables held constant would increase or decrease the net income by S$4,103,983 (2017: S$3,542,572). Funds management The Association is a society with no share capital at the reporting date. The Association builds up its funds from donations received and also through prudent management of its financial resources. The funds of the Association include unrestricted funds represented by the Accumulated funds (see note 10). The reserves of the Association provide financial stability and the means for the development of the Association’s activities. The Association intends to maintain the reserves at a level sufficient for its operating needs. The Board of Trustees and the Executive Committee of the Association review the level of reserves regularly for the Association’s continuing obligations. Ratio between the Association’s annual operating expenditure and its funds is as follows: 2018 S$ Total funds at 31 December Annual operating expenditure Ratio of funds to annual operating expenditure
53,563,647 19,998,100 2.7:1
2017 S$ 48,100,214 18,563,982 2.6:1
The Association’s funds are closely monitored to ensure that there are sufficient funds to support its programmes and activities. The Association is not subject to externally imposed requirements. Accounting classification and fair values Fair values versus carrying amounts Fair value is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the reporting date. The carrying amounts of financial assets – investments (Note 8) are measured at their fair values. The carrying amounts of receivables, and other financial liabilities approximate their fair values due to the relatively short period to maturity of these financial assets and liabilities.
FS33
Singapore Indian Development Association Financial statements Year ended 31 December 2018
The fair value of financial assets and liabilities, together with the carrying amounts, shown in the statement of financial position are as follows:
Note 31 December 2018 Government Subvention receivable Donations receivable – Central Provident Fund Board Scheme Donations receivable – Singapore Totalisator Board Deposits, tuition fee and other receivables Financial assets – investments Cash and cash equivalents Other payables and accrued expenses 31 December 2017 Government Subvention receivable Donations receivable – Central Provident Fund Board Scheme Donations receivable – Singapore Totalisator Board Deposits, tuition fee and other receivables Financial assets – investments Cash and cash equivalents Other payables and accrued expenses
6 7 8 9 12
6 7 8 9 12
Loans and receivables S$
Carrying amount Fair value through Other income or financial liabilities expenditure S$ S$
3,400,000 1,577,748 500,000 927,061 1,473,957 8,871,517 – 16,750,283
– – – – 41,039,829 – – 41,039,829
3,400,000 1,449,398 250,000 619,978 445,259 11,504,301 – 17,668,936
– – – – 35,425,724 – – 35,425,724
Fair value
Total S$
Total S$
– – – – – – (2,454,958) (2,454,958)
3,400,000 1,577,748 500,000 927,061 42,513,786 8,871,517 (2,454,958) 55,335,154
3,400,000 1,577,748 500,000 927,061 42,513,786 8,871,517 (2,454,958) 55,335,154
– – – – – – (2,203,561) (2,203,561)
3,400,000 1,449,398 250,000 619,978 35,870,983 11,504,301 (2,203,561) 50,891,099
3,400,000 1,449,398 250,000 619,978 35,870,983 11,504,301 (2,203,561) 50,891,099
FS34
Singapore Indian Development Association Financial statements Year ended 31 December 2018
Fair value hierarchy The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows: Note
Level 1 S$
Level 2 S$
Level 3 S$
Total S$
31 December 2018 Financial assets – fair value through profit or loss
8
40,870,255
–
169,574 41,039,829
31 December 2017 Financial assets – fair value through profit or loss
8
35,230,915
–
194,809 35,425,724
Measurement of fair values The following table shows a reconciliation from the opening balances to the ending balances for Level 3 fair values: Financial assets – fair value through profit or loss S$ At 1 January 2018 Purchases Total unrealised loss recognised in the statement of comprehensive income Disposals At 31 December 2018
194,809 2,520 (19,492) (8,263) 169,574
Valuation techniques and significant unobservable inputs The following table shows the valuation technique used in measuring Level 3 fair values, as well as the significant unobservable inputs used:
Financial assets – fair value through profit or loss
Type of investment
REIT/real estate Real estate funds fund Absolute return Private equity funds fund Private equity Private equity funds fund
Fair value at 31 December 2018 2017 S$ S$
Net Asset Value Net Asset 779 Value Net Asset 63,440 Value
130,712 130,590 670 38,192
Valuation technique
Inter relationship between key unobservable Significant inputs and fair unobservable value inputs measurement
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
FS35
Singapore Indian Development Association Financial statements Year ended 31 December 2018
The Association obtains third party statements to determine the Net Asset Values (“NAV”) of investments included in Level 3. The Association’s Investment Committee has determined that the reported NAV represent fair values at the reporting date.
22
New or revised accounting standards and interpretations Below are the mandatory standards, amendments and interpretations to existing standards that have been published, and are relevant for the Association’s accounting periods beginning on or after 1 January 2019 and which the Association has not early adopted: (a)
FRS 116 Leases (effective for annual periods beginning on or after 1 January 2019) FRS 116 will result in almost all leases being recognised on the balance sheet, as the distinction between operating and finance leases is removed. Under the new standard, an asset (the right to use the leased item) and a financial liability to pay rentals are recognised. The only exceptions are short-term and low-value leases. The accounting for lessors will not change significantly. As at the reporting date, the Association has non-cancellable operating lease commitments of $701,457, see Note 20. Of these commitments, approximately $527,689 relate to short-term leases and $173,768 to low value leases which will both be recognised on a straight-line basis as expense in profit or loss. Future lease commitments entered into by the Association which are not exempted as short-term or low-value leases will result in recognition of right-of-use assets and lease liabilities and will affect the Association’s profit and classification of cash flows.
FS36
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