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Financial statements Jamaica Medical Foundation Limited October 31, 2008


Jamaica Medical Foundation Limited – Financial Statements – October 31, 2008

Contents

Page Independent auditors’ report

1

Balance sheet

3

Income statement

4

Statement of changes in reserves

5

Statement of cash flows

6

Notes to financial statements

7

Additional information – Auditors’ report

15

Additional information – Detailed income and expenditure account

16


Independent auditors’ report

To the Members of Jamaica Medical Foundation Limited Report on the Financial Statements

We have audited the accompanying financial statements of Jamaica Medical Foundation Limited, set out on pages 3 to 14, which comprise the balance sheet as at October 31, 2008, and the income statement, statement of changes in reserves and cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory notes. Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards and the Jamaican Companies Act. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements 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 entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting


Auditors’ Responsibility (Cont’d)

estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion

In our opinion, the financial statements give a true and fair view of the financial position of the company as at October 31, 2008, and of the company’s financial performance, changes in reserves and cash flows for the year then ended in accordance with International Financial Reporting Standards. Report on Additional Requirements of the Companies Act

We have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purposes of our audit. In our opinion, proper accounting records have been maintained, and the financial statements are in agreement with the accounting records, and give the information required by the Companies Act in the manner so required.

Kingston, Jamaica June 30, 2009

Chartered Accountants


Jamaica Medical Foundation Limited – Financial Statements – October 31, 2008 3

Balance sheet

Note

2008 $

2007 $

Assets Non-current assets Available-for-sale investments

(4)

11,114,372 11,114,372

9,991,461 9,991,461

Current assets Receivables Taxation recoverable Cash and cash equivalents

(5) (6) (7)

25,054 3,435,896 2,511,851 5,972,801

26,446 3,138,157 3,308,883 6,473,486

Total assets

17,087,173

16,464,947

Reserves Investment revaluation reserve Retained surplus Total reserves

(664,477) 17,701,650 17,037,173

43,882 16,369,465 16,413,347

Current liabilities Payables and accruals Total liabilities Total reserves and liabilities

(8)

50,000 50,000

51,600 51,600

17,087,173

16,464,947

The notes on the accompanying pages 7 to 14 form an integral part of these financial statements. Approved for issue by the Board of Trustees on June 30, 2009 and signed on its behalf by:

______________________) Chairman Oliver E. Jones

____________________________) Hon. Secretary Lloyd A. Vermont, Snr.


Jamaica Medical Foundation Limited – Financial Statements – October 31, 2008 4

Income statement

Note

Income Fund raising income – banquet Less: Related expenses

Finance income

2007 $

(2c)

(9)

Administrative expenses Loss on disposal of investments Surplus for the year

2008 $

1,038,000 949,016

34,000 8,989

88,984

25,011

1,778,487

1,111,148

1,867,471

1,136,159

(535,286) (10)

1,332,185

(494,025) (59,877) 582,257

The notes on the accompanying pages 7 to 14 form an integral part of these financial statements.


Jamaica Medical Foundation Limited – Financial Statements – October 31, 2008 5

Statement of changes in reserves

Balance at October 31, 2006

Investment Revaluation Reserve $

Retained Surplus $

Total $

-

15,787,208

15,787,208

Changes in reserves for 2007 Fair value adjustment for the year

43,882

-

43,882

Net income recognised directly in reserves Surplus for year 2007

43,882 -

582,257

43,882 582,257

Total recognised income and expenses for year 2007

43,882

582,257

626,139

Balance at October 31, 2007

43,882

16,369,465

16,413,347

Changes in reserves for 2008 Fair value adjustment for the year

(708,359)

Net income recognised directly in reserves Surplus for year 2008

(708,359) -

Total recognised income and expenses for year 2008

(708,359)

1,332,185

623,826

Balance at October 31, 2008

(664,477)

17,701,650

17,037,173

1,332,185

(708,359) (708,359) 1,332,185

The notes on the accompanying pages 7 to 14 form an integral part of these financial statements.


Jamaica Medical Foundation Limited – Financial Statements – October 31, 2008 6

Statement of cash flows

2008 $ Cash flows from operating activities: Surplus for the year Adjustments for: Investment income Loss on disposal of investments

1,332,185

2007 $

582,257

(1,778,487) (446,302)

(1,111,148) 59,877 (469,014)

1,392 (1,600)

411,418 (300,342)

(446,510)

(357,938)

754,019 622,175 5,139,650 (6,866,366) (350,522)

828,069 3,963,439 (7,622,288) (2,830,780)

Net decrease in cash and cash equivalents Cash and cash equivalents at beginning of year

(797,032) 3,308,883

(3,188,718) 6,497,601

Cash and cash equivalents at end of year (Note 7)

2,511,851

3,308,883

Decrease in receivables Decrease in payables and accruals Net cash used in operating activities Cash flows from investing activities: Dividends received Interest received (net of withholding tax) Proceeds from disposal of investments Increase in investments Net cash used in investing activities

The notes on the accompanying pages 7 to 14 form an integral part of these financial statements.


Jamaica Medical Foundation Limited – Financial Statements – October 31, 2008 7

Notes to financial statements

1.

Identification and activities

The Jamaica Medical Foundation Limited was incorporated under the Laws of Jamaica as a company not having a share capital. It is a charitable organisation supported by medical and private sector individuals and bodies. Through public information activities, the Foundation aims to improve medical knowledge and services and quality of care. The company is domiciled in Jamaica with its principal place of business located at 3 Richmond Avenue, Kingston 10, Jamaica. These financial statements are expressed in Jamaican Dollars.

2.

Basis of preparation and summary of significant accounting policies a Overall consideration and basis of preparation

These financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). i

Amendments to published standards and interpretations which became effective in the current year and that are relevant to the company’s operations IFRS 7 Financial Instruments: Disclosures. This is mandatory for reporting periods beginning on 1 January 2007 or later. The new Standard replaces and amends disclosure requirements previously set out in IAS 32 Financial Instruments: Presentation and Disclosures. Amendment to IAS 1, Presentation of Financial Statements: Capital Disclosures. The amendment requires an entity to disclose its capital management objectives, policies and procedures. All disclosures relating to financial instruments and capital disclosures, including all comparative information, have been updated to reflect the new requirements. IFRS 7 (Amendment), Financial Instruments: Disclosures. If an entity has reclassified a financial asset in accordance with the Amendment in IAS 39, it shall disclose the amount reclassified into and out of each category and the reason for the reclassification. Additional disclosures are required including details of the carrying amounts and fair values of the financial assets until they are derecognized, in addition to details of fair value gain or loss that would have been recognized in the entity’s profit or loss or comprehensive income if the financial assets had not been reclassified.


Jamaica Medical Foundation Limited – Financial Statements – October 31, 2008 8

i

Amendments to published standards and interpretations which became effective in the current year and that are relevant to the company’s operations (cont’d) IAS 39 (Amendment), Financial Instruments: Recognition and Measurement. The Amendment permits the reclassification of financial assets classified as held-fortrading from the fair value through profit or loss category to another category in rare circumstances, or, if the financial assets meets the definition of loans and receivables at the date of reclassification. The standard is not expected to have any significant impact on the company’s financial statements. Financial assets classified as available-for-sale may also be reclassified to loans and receivables if, at the date of reclassification, the financial assets would have been eligible for classification as loans and receivables. There were no reclassifications for the period as a result of this amendment. The first-time application of IFRS 7 has not resulted in any prior-period adjustments of cash flows, surplus for the year or balance sheet line items. The company has assessed the relevance of the other new standards, amendments and interpretations to existing standards which became effective for periods beginning November 1, 2007. Based on the company’s operations, management has determined that these standards, amendments and interpretations do not impact its financial statements.

ii

Standards and Interpretations issued but not yet effective At the date of authorisation of the financial statements, the following new standards, amendments to standards and interpretations were in issue but are not yet effective and have not been early-adopted by the company: Effective for accounting Full title of Standard periods beginning Title or Interpretation on or after IFRIC 12

Service Concession Arrangements

1 January 2007

IFRIC 13

Customer Loyalty Programmes

1 July 2007

IFRIC 14

IAS 19 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction

1 January 2007

IFRIC 17

Distributions of Non-cash Assets to Owners

1 July 2009

IFRS 2

Amendment to IFRS 2 Share-based Payment

1 January 2009

IFRS 3

Business Combinations (Revised 2008)

1 July 2009

IFRS 8

Operating Segments

1 January 2009

IAS 1

Presentation of Financial Statements

1 January 2009

IAS 23

Borrowing Costs (Revised)

1 January 2009

IAS 27

Consolidated and Separate Financial Statements

1 July 2009

IAS 32

Financial Statements: Presentation

1 January 2009

IAS 39

Financial Instruments

1 July 2009


Jamaica Medical Foundation Limited – Financial Statements – October 31, 2008 9

Based on the company’s current operations, management does not expect any significant impact on the company’s financial statements when these standards and interpretations become effective. Annual Improvements 2008 The IASB has issued Improvements for International Financial Reporting Standards 2008. Most of these are small amendments which become effective in accounting periods beginning on or after January 1, 2009. However, these amendments are not expected to have a material impact on the company’s financial statements. b

Critical judgements and sources of estimation uncertainty

The preparation of financial statements in accordance with International Financial Reporting Standards requires management to make estimates and assumptions that affect the amounts reported in the financial statements. These estimates are based on historical experience and management’s best knowledge of current events and actions. Actual results may differ from these estimates and assumptions. There were no critical judgements, apart from those involving estimation, that management has made in the process of applying the company’s accounting policies that have a significant effect on the amounts recognised in the financial statements. The estimate and assumptions which have the most significant risk of causing a material adjustment to the carrying amounts of assets and liabilities relates to estimation of fair value of investments. The significant accounting policies that have been used in the preparation of these financial statements are summarised below and have been consistently applied for all the years presented: The financial statements have been prepared using the measurement bases specified by IFRS for each type of asset, liability, income and expense. The measurement bases are more fully described in the accounting policies below: c

Income recognition

Income is recognised when contractual obligations become effective or on the transfer of risk to third parties. d

Cash and cash equivalents

Cash and cash equivalents are classified as loans and receivables and consists of demand deposits, cash in hand and short-term deposits with maturity dates of three (3) months or less. e

Receivables

Receivables are classified as loans and receivables. These are initially recognised at original invoice amount (which represents fair value) and subsequently measured at amortised cost.


Jamaica Medical Foundation Limited – Financial Statements – October 31, 2008 10

f

Payables and accruals

Payables and accruals are classified as financial liabilities measured at amortised cost. These are initially recognised at original invoice amount (which represents fair value) and subsequently measured at amortised cost. g

Available-for-sale investments

Investments are classified as available-for-sale investments and may be sold in response to needs for liquidity or changes in interest rate or market prices. Investments are initially recognised at cost, which includes transactions costs, and subsequently re-measured at fair value based on quoted bid prices. Unrealised gains and losses arising from changes in fair value of investments are recognised in reserves. When investments are sold or impaired, the accumulated fair value adjustments recognised in reserves are included in the Income Statement as gains and losses on investments. All purchases and sales of investments are recognised at settlement date. Interest earned while holding investments is reported as income from investments. h

Reserves

Investment revaluation reserve comprises unrealised gains and losses arising from changes in fair value of investments. Retained surplus includes all current and prior period results as disclosed in the Income Statement 3.

Financial assets and liabilities by categories

i.

Financial assets by categories

The categories of financial assets included in the balance sheet are as follows: 2008 $ Non-current assets Available-for-sale investments Current assets Loans and receivables Receivables Cash and cash equivalents Total

ii

2007 $

11,114,372

9,991,461

25,054 2,511,851 13,651,277

26,446 3,308,883 13,326,790

Financial liabilities by categories The categories of financial liabilities included in the balance sheet are as follows:

Current liabilities Financial liabilities measured at amortised cost Payables and accruals Total

2008 $

2007 $

50,000 50,000

51,600 51,600


Jamaica Medical Foundation Limited – Financial Statements – October 31, 2008 11

4.

Available-for-sale investments Interest rate % p.a. Pan Caribbean Financial Services Limited GOJ Local Registered Stock BOJ Certificate of Deposit Barita Investments Limited GOJ VR 2013/2014 Series Ba Quoted shares

14.86

14.46

Total

5.

2008 $

2007 $

1,027,284

4,035,096 2,044,578

4,003,169 6,083,919 11,114,372

3,911,787 9,991,461

Receivables

Banquet – outstanding ticket receipt Interest Total

2008 $

2007 $

5,000 20,054 25,054

26,446 26,446

All receivables are short-term and the carrying value is considered a reasonable approximation of fair value. Banquet ticket receipt due is past due less than 1 month. 6.

Taxation recoverable

i

The company was granted Acharitable organisationA status in 1988 under Section 13(i) (q) of the Income Tax Act. In 1992 the company was granted exemption from income tax under Section 12(h) of the Income Tax Act. Taxation recoverable represents tax withheld on interest income earned by the company.

ii

7.

In light of the company’s tax exempt status no provision for deferred tax is included in these financial statements.

Cash and cash equivalents Interest rate % p.a.

2008 $

2007 $

Money market funds and cash at bank Barita Investments Limited NCB Capital Markets Limited National Commercial Bank Limited – Current account Short-term deposits – Pan Caribbean Financial Services Limited Total

12.9 -13.10

3,172 17,433

97,328

149,907

11,012

2,341,339 2,511,851

3,200,543 3,308,883

Short-term deposits at balance sheet date have maturity dates of three (3) months or less. The carrying value of cash and cash equivalents is considered a reasonable approximation of fair value.


Jamaica Medical Foundation Limited – Financial Statements – October 31, 2008 12

8.

Payables and accruals

Accounting fees Registrar of Companies – Fees in respect of annual and other returns Total

2008 $

2007 $

45,000

30,000

5,000 50,000

21,600 51,600

All amounts are short-term and the carrying value is considered a reasonable approximation of fair value. 9.

Finance income 2008 $

2007 $

Interest income from cash and cash equivalents

195,334

428,573

Income on available-for-sale financial assets – Dividends – Interest

754,019 829,134

682,575

1,778,487

1,111,148

Total interest income from financial assets not at fair value through profit or loss

10.

Surplus for the year

Surplus for the year is stated after charging/(crediting):

Honorarium for prior year - Auditors Interest income (Note 9)

11.

2008 $

2007 $

50,000 (1,778,487)

50,000 (1,111,148)

Expenses by nature

Total administrative expenses:

Donations Public relations Honorarium for prior year – Auditors Meeting expenses Other Total

2008 $

2007 $

196,923 61,000 50,000 97,800 129,563 535,286

265,000 34,135 50,000 82,811 62,079 494,025


Jamaica Medical Foundation Limited – Financial Statements – October 31, 2008 13

12.

Risk management policies

The company’s activities expose it to a variety of financial risks in respect of its financial instruments: market risk (currency risk, interest rate risk and other price risk), credit risk and liquidity risk. The company seeks to manage these risks by close monitoring of each class of its financial instruments as follows: a

Market risk i

Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market interest rates. The company’s cash and cash equivalents are subject to interest rate risk. However, the company attempts to manage this risk by monitoring its interest-bearing instruments closely and procuring the most advantageous rates under contracts with interest rates that are fixed for the life of the contract, where possible. The company faces no interest rate risk in respect of its investments as interest rates on its investments are fixed until the dates of maturity. Interest rate sensitivity Due to the fact that interest rates on the company’s investments are fixed up to maturity and interest earned from the company’s interest-earning bank accounts is immaterial, there would be no material impact on the results of the company’s operations as a result of fluctuations in interest rates.

ii Other price risk Other price risk is the risk that the value of a financial instrument will fluctuate as a result of changes in market prices, whether those changes are caused by factors specific to the individual instrument or its issuer or factors affecting all instruments traded in the market. The Board’s financial instruments are substantially independent of changes in market prices as they are short term in nature. b

Credit risk Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The company faces credit risk in respect of its investments and bank deposits, which are held with financial institutions. However, the company attempts to manage this risk by carefully monitoring and maintaining balances with financial institutions considered to be stable. The current account held at a commercial bank is insured under the Jamaica Deposit Insurance Scheme (JDIS). The company considers that all the financial assets that are not impaired for each of the reporting dates under review are of good credit quality. However, for amounts held with the commercial bank a total of $149,907 (2007 $11,012) is insured under the JDIS at balance sheet date.


Jamaica Medical Foundation Limited – Financial Statements – October 31, 2008 14

The maximum credit risk faced by the company is limited to the carrying amounts of financial assets recognised at the balance sheet date, as summarised below: 2008 $ Available-for-sale investments Receivables Cash and cash equivalents Total

c

11,114,372 25,054 2,511,851 13,651,277

2007 $ 9,991,461 26,446 3,308,883 13,326,790

Liquidity risk Liquidity risk is the risk that the company will encounter difficulty in meeting its commitments associated with financial liabilities. The company manages its liquidity risk by maintaining an appropriate level of resources in liquid or near liquid form. The company maintains some of its cash and short-term investments for up to 90-day periods to meet its liquidity requirements. An analysis of the company’s financial liabilities at year end is as follows: 2008 $ Payables and accruals Within three (3) months Total

13.

50,000 50,000

2007 $

51,600 51,600

Capital management

The company’s capital management objectives are to ensure the company’s ability to continue as a going concern and to sustain future development of the business. The company’s Board of Trustees reviews the financial position of the company at regular meetings. The company is not subject to any externally imposed capital requirements.


15

Additional information – Auditors’ report

To the Trustees of Jamaica Medical Foundation Limited On Additional Information The additional information presented on page 16 has been taken from the accounting records of the company and has been subjected to the tests and other auditing procedures applied in our examination of the financial statements of the company for the year ended October 31, 2008. In our opinion, the said information is fairly presented in all material respects in relation to the financial statements taken as a whole although it is not necessary for a fair presentation of the state of the company’s affairs as at October 31, 2008 or of the results of its operations or cash flows for the year then ended.

Mair Russell Grant Thornton Chartered Accountants

Kingston, Jamaica June 30, 2009


Jamaica Medical Foundation Limited – Financial Statements – October 31, 2008 16

Additional information – Detailed income and expenditure account

2008 $ Income Fund raising income – banquet Less: Related expenses

Interest from investments

Administrative expenses Meeting expenses Accounting fees – current year – prior year Donations Public relations Printing, stationery and office expenses Annual returns fees Bank charges Professional fees Honorarium for prior year – auditors Surplus for the year

2007 $

1,038,000 949,016

34,000 8,989

88,984

25,011

1,778,487

1,111,148

1,867,471

1,136,159

97,800 45,000 4,950 196,923 61,000 22,896 30,400 13,367 12,950 50,000 535,286

82,811 30,000 265,000 34,135 19,794 5,400 6,885 50,000 494,025

1,332,185

642,134


Š2009 Mair Russell Grant Thornton

Member firm of Grant Thornton International Ltd


Jmf 2008 audit