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Financial statements Jamaica Medical Foundation Limited October 31, 2009


Jamaica Medical Foundation Limited – Financial Statements – October 31, 2009

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

14

Additional information – Detailed income and expenditure account

15

Additional information – Schedule of income and expenditure for prostate cancer research fund

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 13, which comprise the balance sheet as at October 31, 2009, 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 Interim Standard for Small Companies as adopted by the Institute of Chartered Accountants of Jamaica (ICAJ) 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 Foundation as at October 31, 2009, and of the Foundation’s financial performance, changes in reserves and cash flows for the year then ended in accordance with Interim Standard for Small Companies as adopted by the Institute of Chartered Accountants of Jamaica (ICAJ). 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 April 22, 2010

Chartered Accountants


Jamaica Medical Foundation Limited – Financial Statements – October 31, 2009 3

Balance sheet

Note

2009 $

2008 $

Assets Non-current assets Available-for-sale investments

(4)

12,092,674 12,092,674

11,114,372 11,114,372

Current assets Receivables Taxation recoverable Cash and cash equivalents

(5) (6) (7)

363,917 1,855,602 3,193,600 5,413,119

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

Total assets

17,505,793

17,087,173

Reserves Investment revaluation reserve Retained surplus Total reserves

(1,972,636) 19,400,985 17,428,349

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

Fund Prostate Cancer Total fund Current liabilities Payables and accruals Total liabilities Total fund and liabilities Total reserves and liabilities

(8)

(9)

16,275 16,275

-

61,169 61,169 77,444

50,000 50,000 50,000

17,505,793

17,087,173

The notes on the accompanying pages 7 to 13 form an integral part of these financial statements. Approved for issue by the Board of Trustees on April 22, 2010 and signed on its behalf by:

______________________) Chairman Oliver E. Jones

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


Jamaica Medical Foundation Limited – Financial Statements – October 31, 2009 4

Income statement

Note

2009 $

2008 $

1,821,000 1,468,715

1,038,000 949,016

352,285

88,984

2,167,918 18,000

1,778,487 -

Loss on disposal of investment

2,538,203 (695)

1,867,471 -

Prostate cancer expenses Administrative expenses Surplus for the year before transfer

(1,725) (820,173) 1,715,610

(535,286) 1,332,185

Transfer of surplus to Prostate Cancer fund

(16,275) 1,699,335

1,332,185

Income Fund raising income – banquet Less: Related expenses

Finance income Prostate cancer income - Donations

Surplus for the year

(2c)

(10)

(11)

The notes on the accompanying pages 7 to 13 form an integral part of these financial statements.


Jamaica Medical Foundation Limited – Financial Statements – October 31, 2009 5

Statement of changes in reserves

Investment Revaluation Reserve $ Balance at October 31, 2007

43,882

Retained Surplus $

Total $

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) -

1,332,185

(708,359) 1,332,185

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

-

(708,359)

Changes in reserves for 2009 Fair value adjustment for the year

(1,308,159)

-

(1,308,159)

Net income recognised directly in reserves Surplus for year 2009

(1,308,159) -

1,699,335

(1,308,159) 1,699,335

Total recognised income and expenses for year 2009

(1,308,159)

1,699,335

391,176

Balance at October 31, 2009

(1,972,636)

19,400,985

17,428,349

The notes on the accompanying pages 7 to 13 form an integral part of these financial statements.


Jamaica Medical Foundation Limited – Financial Statements – October 31, 2009 6

Statement of cash flows

Cash flows from operating activities: Surplus for the year Surplus from Prostate Cancer fund Adjustments for: Investment income

Decrease in receivables Increase/(decrease) in payables and accruals

2009 $

2008 $

1,699,335 16,275

1,332,185 -

(2,167,918) (452,308)

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

5,000 11,169

1,392 (1,600)

(436,139)

(446,510)

760,705 797,512 1,846,132 (2,286,461) 1,117,888

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

Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year

681,749 2,511,851

(797,032) 3,308,883

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

3,193,600

2,511,851

Net cash used in operating activities Cash flows from investing activities: Dividends received Interest received (net of withholding tax) Refund of withholding tax Proceeds from disposal of investments Increase in investments Net cash provided by/(used in) investing activities

The notes on the accompanying pages 7 to 13 form an integral part of these financial statements.


Jamaica Medical Foundation Limited – Financial Statements – October 31, 2009 7

Notes to financial statements

1.

Identification and activities

The Jamaica Medical Foundation Limited (the Foundation) 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, 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 Interim Standard for Small Companies (ISSC) as adopted by the Institute of Chartered Accountants of Jamaica (ICAJ). b

Measurement basis

These financial statements have been prepared using the measurement basis specified by ISSC for each type of asset, liability, income and expense. The measurement bases are more fully described in the accounting policies below. c

Critical judgements and sources of estimation uncertainty

The preparation of financial statements in accordance with Interim Standard for Small Companies as adopted by the Institute of Chartered Accountants of Jamaica (ICAJ), 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. 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.


Jamaica Medical Foundation Limited – Financial Statements – October 31, 2009 8

The estimates and assumptions which have the most significant risk of causing a material adjustment to the carrying amounts of assets and liabilities relate to estimation of fair value of investments. In addition, there are no significant sources of estimation uncertainty at balance sheet date, that have a significant risk of causing material adjustment of the carrying amounts of assets and liabilities within the next financial year. d

Income recognition

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

Financial instruments

A financial instrument is any contract that gives rise to both a financial asset in one entity and a financial liability or equity instrument in another entity. Financial instruments are recognised in the company’s balance sheet when it has become a party to the contractual provisions of the instruments. The financial instruments carried in the balance sheet are: Financial assets: Available-for-sale investments, receivables and cash and cash equivalents; Financial liabilities: Payables. The particular recognition methods adopted are disclosed in the respective accounting policies associated with each item. f

Cash and cash equivalents

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

Receivables

Receivables are classified as loans and receivables measured at amortised cost. h

Payables

Payables are classified as financial liabilities measured at amortised cost. i

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.


Jamaica Medical Foundation Limited – Financial Statements – October 31, 2009 9

j

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:

Non-current assets Available-for-sale investments Current assets Loans and receivables Receivables Cash and cash equivalents Total

ii

2009 $

2008 $

12,092,674

11,114,372

363,917 3,193,600 15,650,191

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

Financial liabilities by categories The categories of financial liabilities included in the balance sheet are as follows: 2009 $ Current liabilities Financial liabilities measured at amortised cost Payables

11,169 11,169

Total

4.

2008 $

5,000 5,000

Available-for-sale investments Interest rate % p.a. Pan Caribbean Financial Services Limited BOJ Certificate of Deposit GOJ INV BD 2018/2019 BP (Note 14) Barita Investments Limited GOJ VR 2013/2014 Series Ba (Note 14) Quoted shares Total

19.96

17.34

2009 $

2008 $

1,037,186

1,027,284 -

4,003,799 7,051,689 12,092,674

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


Jamaica Medical Foundation Limited – Financial Statements – October 31, 2009 10

5.

Receivables 2009 $ Banquet – outstanding ticket receipt Interest on short-term deposits Pan Caribbean Financial Services Limited Barita Investments Limited Total

2008 $

-

5,000

155,158 208,759 363,917

20,054 25,054

All receivables are short-term and the carrying value is considered a reasonable approximation of fair value. None of the above receivable is past due or impaired. 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.

2009

2008

$

$

Cash at bank National Commercial Bank Limited – J$ Current account *Prostate cancer – J$ Current account (Note 8) Short-term deposits – NCB Capital Markets Limited Pan Caribbean Financial Services Limited Barita Investment Limited Total

19.0 4.0

187,463 456,577

149,907 -

18,393 2,463,357 67,810 3,193,600

17,433 2,341,339 3,172 2,511,851

*Included in Prostate Cancer J$ current account is an amount of $403,302 due to Jamaica Medical Foundation Limited. 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, 2009 11

8.

Prostate cancer research fund

During the year, the Foundation established a Prostate Cancer Research Fund to contribute to the Prostate Cancer Medical Research study to be carried out in Jamaica in collaboration with the Jamaica Urological Society and the University Hospital of the West Indies. 2009 $ Donations received during the year Expenditure during the year Balance at end of year

2008 $

18,000 (1,725) 16,275

-

The above balance is represented by a designated bank account. (Note 7). 9.

Payables and accruals

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

2009 $

2008 $

10,000 50,000 1,169 61,169

5,000 45,000 50,000

All amounts are short-term and the carrying value is considered a reasonable approximation of fair value. 10.

Finance income

Interest income from cash and cash equivalents Income on available-for-sale financial assets – Dividends – Interest Total interest income from financial assets not at fair value through profit or loss

11.

2009 $

2008 $

422,993

195,334

760,705 984,220

754,019 829,134

2,167,918

1,778,487

2009 $

2008 $

(2,167,918)

50,000 (1,778,487)

2009 $

2008 $

155,100 215,898 331,834 117,341 820,173

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

Surplus for the year

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

Honorarium for prior year - Auditors Interest income (Note 10)

12.

Expenses by nature

Total administrative expenses:

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


Jamaica Medical Foundation Limited – Financial Statements – October 31, 2009 12

13.

Risk management policies

The Foundation’s activities expose it to a variety of financial risks in respect of its financial instruments: market risk (interest rate risk and other price risk), credit risk and liquidity risk. The Foundation 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 of or future cash flows from a financial instrument will fluctuate due to changes in market interest rates. The Foundation’s cash and cash equivalents are subject to interest rate risk. However, the Foundation 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 Foundation 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 Foundation’s investments and short-term deposits are fixed up to maturity and interest earned from the Foundation’s interestearning bank accounts is immaterial, there would be no material impact on the results of the Foundation’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. At balance sheet date, the Foundation had no significant financial instruments which were subject to market price changes. 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 Foundation faces credit risk in respect of its investments and deposits, which are held with financial institutions. However, the Foundation attempts to manage this risk by carefully monitoring and maintaining balances with financial institutions considered to be stable. The current accounts held at a commercial bank is insured under the Jamaica Deposit Insurance Scheme (JDIS). The Foundation considers that all the credit risks associated with these financial assets are minimal. However, for amounts held with the commercial bank a total of $600,000 (2008 $149,907) are insured under the JDIS at balance sheet date. The maximum credit risk faced by the Foundation is limited to the carrying amounts of financial assets recognised at the balance sheet date, as summarised below: 2009 $ Available-for-sale investments Receivables Cash and cash equivalents Total

12,092,674 363,917 3,193,600 15,650,191

2008 $ 11,114,372 25,054 2,511,851 13,651,277


Jamaica Medical Foundation Limited – Financial Statements – October 31, 2009 13

c

Liquidity risk Liquidity risk is the risk that the Foundation 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 Foundation maintains some of its cash and short-term investments for up to 90-day periods to meet its liquidity requirements. An analysis of the Foundation’s financial liabilities at year end is as follows:

Payables and accruals Within three (3) months Total

13.

2009 $

2008 $

61,169 61,169

50,000 50,000

Capital management

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

14.

Subsequent event

In February 2010, the Foundation participated in the Jamaica Debt Exchange (JDX) transaction under which it exchanged its holdings of domestic debt instruments issued by the Government of Jamaica for new, longer-dated debt instruments available to the Foundation under the election options contained in the transaction. The JDX has had a significant impact on the expected future cash flows from the Foundation’s investment portfolio. The table below summarises the impact on coupon rates and maturities of instruments that were exchanged: Pre JDX

Jamaican dollar denominated instruments: Total face value exchanged J$5 million (Note 4) Weighted average coupon rate Weighted average tenor to maturity

17.86% 4.8 years

Post JDX

11.75% 9 years


14

Additional information – Auditors’ report

To the Trustees of Jamaica Medical Foundation Limited On Additional Information The additional information presented on page 15 and 16 has been taken from the accounting records of the Foundation and has been subjected to the tests and other auditing procedures applied in our examination of the financial statements of the Foundation for the year ended October 31, 2009. 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 Foundation’s affairs as at October 31, 2009 or of the results of its operations or cash flows for the year then ended.

Mair Russell Grant Thornton Chartered Accountants

Kingston, Jamaica April 22, 2010


Jamaica Medical Foundation Limited – Financial Statements – October 31, 2009 15

Additional information – Detailed income and expenditure account

2009 $ Income Fund raising income – banquet Less: Related expenses

Interest and dividends 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

2008 $

1,821,000 1,468,715

1,038,000 949,016

352,285

88,984

2,167,918

1,778,487

2,520,203

1,867,471

331,834 50,000 7,425 155,100 215,898 8,750 5,000 16,166 30,000 820,173

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

1,700,030

1,332,185


Jamaica Medical Foundation Limited – Financial Statements – October 31, 2009 16

Additional information – Schedule of income and expenditure for prostate cancer research fund

2009 $ Income Donation

Less: Expenses Bank charges Surplus for the year

2008 $

18,000

-

18,000

-

1,725 16,275

-


Š2010 Mair Russell Grant Thornton

Member firm of Grant Thornton International Ltd

Jmf 2009 audit  

http://jamaicamedfoundation.com/demo/images/articles/audits/JMF_2009_Audit.pdf

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