Notes to the Financial Statements

These notes form an integral part of the financial statements.
The financial statements were authorised for issue by the Foundation’s Board of Management on 18 August 2008.

1 Domicile and Activities
Home Nursing Foundation (the Foundation) is registered as a Voluntary Welfare Organisation in accordance with the Societies Act, Chapter 311, and as an Exempt Charity under the Charities Act 1982.

The registered office of the Foundation is at 93 Toa Payoh Central, Toa Payoh Central Community Building, #07-01, Singapore 319194.

The principal objective of the Foundation, which is registered in the Republic of Singapore, is to provide home nursing services to the non-ambulant and aged sick in their own home.

2 Summary of Significant Accounting Policies

2.1 Basis of preparation
The financial statements have been prepared in accordance with Singapore Financial Reporting Standards (FRS).

The financial statements have been prepared on the historical cost basis except otherwise described below.

The financial statements are presented in Singapore dollars which is the Foundation’s functional currency.

The preparation of financial statements in conformity with FRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.

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

2.2 Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses.

Depreciation is provided on the straight-line basis so as to write off the cost of property, plant and equipment over their estimated useful lives as follows:

Depreciation methods, useful lives and residual values are reviewed, and adjusted as appropriate, at each reporting date.

2.3 Investment securities
Investment securities comprise quoted bond and notes held by the Foundation. They are classified as debt securities held-to-maturity and stated at amortised cost less impairment losses as the Foundation has positive intent and ability to hold debt securities to maturity.

2.4 Inventory
Inventory consisting of consummables which are valued at the lower of cost or net realisable value. Cost is determined on the first-in, first-out basis.

2.5 Trade and other receivables
Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less allowance for impairment.

2.6 Cash and cash equivalents
Cash and cash equivalents comprise cash balances and bank deposits.

2.7 Impairment
The carrying amounts of the Foundation’s assets are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the asset's recoverable amount is estimated. An impairment loss is recognised whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. The impairment loss is charged to the income and expenditure account.

An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

2.8 Liabilities
Payables are recognised initially at fair value and subsequently stated at amortised cost using the effective interest method.

2.9 Employee benefits
Defined contribution plans
Obligations for contributions to defined contribution plans are recognised as an expense in the income and expenditure account as incurred.

Short-term compensated absences
The expected cost of employee benefits in the form of unutilised short-term compensated absences is recognised in the income and expenditure account.

2.10 Deferred income
Deferred income represents deferred assets-related government grants and donation received and utilised for the purchase of depreciable assets. They are amortised to the income and expenditure account using the straight-line method and over the same periods in which the related assets are depreciated.

2.11 Funds
General Operating Fund
Income and expenditure relating to the main activities of the Foundation are accounted for through the General Operating Fund in the Statement of Income and Expenditure.

Expendable Endowment Fund
The Expendable Endowment Fund, which was established under the Foundation’s by-laws on 23 January 2008, consists of:

• All specific donations and gifts intended for the Expendable Endowment Fund;
• All surplus of the General Operating Fund in excess of the operating expenditure of the past 1 year;
• All surplus of the Investment Fund; and
• Such other monies as the Board of Management may determine to transfer to the Expendable Endowment Fund.

The Expendable Endowment Fund is intended to generate investment income that can be used for the Foundation’s activities.

Any interest, dividends and other income derived from the Expendable Endowment Fund shall be credited to the General Operating Fund. The Expendable Endowment Fund may be used for such purposes as may be approved by the Board of Management.

Capital Expenditure Fund
Donations designated by the donors for the purchase of ambulances or other major non-current assets, are taken to this account in the Statement of Income and Expenditure on Specific Funds.

Corporate Adoption Scheme Fund
Donations by sponsors for acquiring the right to name the adopted Function Hall for the period of sponsorship, under the Foundation’s Corporate Adoption Scheme, are taken to the Corporate Adoption Scheme Fund in the Statement of Income and Expenditure on Specific Funds.

Investment Fund
Profit from realisation of investments is taken to the Investment Fund in the Statement of Income and Expenditure on Specific Funds.

Restructuring Fund
In line with the requirements given by the Ministry of Health in the restructuring of the Foundation into a voluntary welfare organisation, funds have been provided by the Ministry of Health to the Foundation to review its core services and build up its capabilities and facilities to fulfil its mission and objectives on a sustainable basis.

2.12 Revenue recognition
(i) Service fee is recognised on completion of the services provided.
(ii) Donations and income from fund raising projects are recognised as and when received, except for advance donations received.      Donations received in advance for future fund raising projects are deferred and recognised as incoming resources as and when      the fund raising projects are held.
(iii) Government subvention is recognised in the income and expenditure account when services are performed.
(iv) Interest income is recognised on an accrual basis.
(v) All other income including membership subscriptions are recognised on an accrual basis.

2.13 Operating leases
Where the Foundation has the use of assets under operating leases, payments made under the leases are recognised in the income and expenditure account on a straight-line basis over the term of the lease.

3. Property, Plant and Equipment

4 Investment Securities



The above investment securities represent investment in bonds issued by SP Power Assets Ltd, Land Transport Authority (LTA) and JTC Corporation and are listed on the Singapore Exchange Securities Trading Limited and are held primarily to provide an investment return for the Foundation.

5 Trade and Other Receivables

6 Other Payables and Accruals

7 (i) Fund Raising Projects

(ii) General Donations

8 Specific Funds

During the year, amounts of $3,008,411 and $558,889 were transferred from the General Operating Fund and Investment Fund, respectively to the Expendable Endowment Fund with the approval of the Ministry of Heath.

9 Deferred income
Included in deferred income is the following deferred assets-related government grants to finance the construction of the Foundation’s premises.

10 Key Management Personnel
For the purposes of these financial statements, parties are considered to be related to the Foundation if the Foundation 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 Foundation and the party are subject to common control or common significant influence. Related parties may be individuals or other entities.

Key management personnel of the Foundation are those persons having the authority and responsibility for planning, directing and controlling the activities of the Foundation. The Board of Management and the senior management officers are considered as key management personnel of the Foundation.

Key management personnel compensation is as follows:

The Board of Management is the final authority and is overall responsible for policy making and determination of all activities. They are volunteers and receive no monetary remuneration for their contribution.

12 Employees’ Remuneration
The number of employees (including key management personnel) whose remuneration amount to over $50,000 in the year is as follows:

12 Taxation
The Foundation is an approved charitable institution under the Charities Act, Chapter 37 and an institute of public character under the Income Tax, Chapter 134. In the prior year, the Foundation was subject to Section 13M(2)(b) of the Income Tax Act, Chapter 134 and the conditions imposed by the Inland Revenue Authority of Singapore. The regulation was repealed during the current year. No provision for tax has been made in the financial statements as the Foundation is exempt from income tax.

13 Financial Risk Management
Exposure to credit and interest rate risks arises in the normal course of the Foundation’s operations. The management of these risks is discussed below:

Credit risk
Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Investments are only allowed with counterparties that are of high credit standing.

Fixed deposits and bank balances are placed with financial institutions of high credit standing.

At the balance sheet date, the maximum exposure to credit risk is represented by the carrying amount of each financial asset in the balance sheet.

Interest rate risk
The Foundation’s exposure to market risk for changes in interest rates relates to the interest-earning cash and cash equivalents and investment securities. The effective rates at balance sheet date and the periods in which they mature or reprice (whichever is earlier) are as follows:

Fair values
The fair values of investment securities are set out in Note 4 and are based on the bid prices at the balance sheet date. The carrying values of other financial assets and financial liabilities are an approximation to their fair values as they are mainly either short-term in nature, repriceable or repayable on demand.

14 Commitments
As at 31 March 2008, the Foundation has capital commitments of $68,205 (2007: $126,750) that have been contracted but not provided for.

At 31 March 2008, the Foundation has commitments for future minimum lease payments under non-cancellable operating leases as follows:

Such lease payments will be reimbursed by Ministry of Health.

15 New Accounting Standards and Interpretations Not Yet Adopted
The Foundation has not applied the following accounting standards (including their consequential amendments) and interpretations that have been issued as of the balance sheet date but are not yet effective:

• FRS 1 (revised 2008) Presentation of Financial Statements
• FRS 23 (revised 2007) Borrowing Costs
• FRS 107 Financial Instruments: Disclosures and the amendment to FRS 1 Presentation of Financial Statements: Capital Disclosures
• FRS 108 Operating Segments
• INT FRS 112 Service Concession Arrangements
• INT FRS 113 Customer Loyalty Programmes
• INT FRS 114 The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction

FRS 107 and amended FRS 1, which become mandatory for financial statements for the year ending 31 March 2009, will require extensive additional disclosures with respect to the Foundation’s financial instruments and capital management. This standard does not have any impact on the recognition and measurement of the Foundation’s financial statements.

Other than the above, the initial application of these standards (and their consequential amendments) and interpretations is not expected to have any material impact on the Foundation’s financial statements. The Foundation has not considered the impact of accounting standards issued after the balance sheet date.