jmf 2012 audit

Jamaica Medical Foundation Limited

Financial statements

October 31, 2012


Contents

Page

Independent auditors’ report 1

Statement of financial position as at October 31 3

Statement of income and accumulated surplus for year ended October 31 4

Statement of cash flows for year ended October 31 5

Notes to the financial statements 6

Additional information – Auditors’ report 12

Additional information – Detailed income and expenditure account 13

Additional information – Schedule of income and expenditure for the Prostate Cancer Research Fund 14

Independent auditors’ report

To the Members of


Report on the Financial Statements

We have audited the accompanying financial statements of Jamaica Medical Foundation Limited,

which comprise the statement of financial position as at October 31, 2012, and the statement of

comprehensive income and accumulated surplus and statement of cash flows for the year then

ended, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation of financial statements that give a true and fair view

in accordance with the International Financial Reporting Standard for Small and Medium-sized

Entities (IFRS for SMEs) and with the requirements of the Jamaican Companies Act, 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.

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 of financial statements that give a true and fair view 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

estimates made by management, as well as evaluating the overall presentation of the financial

statements.

Auditors’ Responsibility (Cont’d) 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

Jamaica Medical Foundation Limited as at October 31, 2012, and of its financial performance and

cash flows for the year then ended in accordance with the International Financial Reporting

Standard for Small and Medium-sized Entities (IFRS for SMEs) and the requirements of the

Jamaican Companies Act..

Report on Other Legal and Regulatory Requirements

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 kept, so far as appears from our examination

of those records, and the accompanying financial statements are in agreement therewith and give

the information required by the Jamaican Companies Act in the manner so required.

Kingston, Jamaica

May 15, 2013 Chartered Accountants


3

Statement of financial position as at October 31

Note 2012 2011 $ $

Assets Non-current assets

Investments (3) 17,430,851 19,128,910

17,430,851 19,128,910

Current assets Receivables (4) 6,600 7,120 Taxation recoverable (5) 2,432,478 2,308,675 Cash and cash equivalents (6) 2,852,118 3,137,159

5,291,196 5,452,954

Total assets 22,722,047 24,581,864

Reserves Accumulated surplus 22,322,322 24,250,964

Total reserves 22,322,322 24,250,964

Fund

Prostate Cancer Research Fund (7) 329,825 266,275

Total fund 329,825 266,275

Current liabilities

Payables and accruals (8) 69,900 64,625

Total liabilities 69,900 64,625

Total fund and liabilities 399,725 330,900

Total reserves and liabilities 22,722,047 24,581,864

The notes on the accompanying pages 6 to 10 form an integral part of these financial statements. Approved for issue by the Board of Trustees on May 15, 2013 and signed on its behalf by: ____________________________ ________________________ Oliver E. Jones Lloyd A. Vermont, Snr.

Chairman Hon. Secretary


4

Statement of income and accumulated surplus for year ended October 31

Note 2012 2011 $ $

Income Fund raising income – banquet - 2,036,000

Less: Related expenses - (1,528,695)

- 507,305 Other direct costs – donations for charitable medical expenses (415,725) (325,000)

Finance income (9) 1,416,734 1,528,206 Prostate Cancer Research Fund income – Donations 63,550 -

1,064,559 1,710,511 (Loss)/gain from changes in fair value of investments (2,325,561) 2,880,290 Foreign exchange gain/(loss) 54,011 (1,487)

Administrative and other expenses (658,101) (774,975)

(Deficit)/surplus for the year before transfer (1,865,092) 3,814,339 Transfer of Prostate Cancer Research Fund surplus (63,550) -

(Deficit)/surplus for the year (1,928,642) 3,814,339 Accumulated surplus at start of year 24,250,964 20,436,625

Accumulated surplus at end of year 22,322,322 24,250,964

The notes on the accompanying pages 6 to 10 form an integral part of these financial statements.


5

Statement of cash flows for year ended October 31

2012 2011 $ $

Cash flows from operating activities: (Deficit)/surplus for the year (1,928,642) 3,814,339 Surplus from Prostate Cancer Research Fund 63,550 - Adjustments for: Loss/(gain) in value of investments 2,325,561 (2,880,290)

Interest and dividends from investments (Note 9) (1,416,734) (1,528,206)

(956,265) (594,157) Decrease in receivables - 50,000

Increase in payables and accruals 5,275 4,625

Net cash used in operating activities (950,990) (539,532)

Cash flows from investing activities: Dividends received 899,780 927,099 Interest received (net of withholding tax) 393,671 453,689

Increase in investments (627,502) (1,425,519)

Net cash provided by/(used in) investing activities 665,949 (44,731)

Net decrease in cash and cash equivalents (285,041) (584,263)

Cash and cash equivalents at beginning of year 3,137,159 3,721,422

Cash and cash equivalents at end of year (Note 6) 2,852,118 3,137,159

The notes on the accompanying pages 6 to 10 form an integral part of these financial statements.


6

Notes to the financial statements

1. Identification and activities

The Jamaica Medical Foundation Limited (the Foundation) was incorporated under the Laws of Jamaica as a company limited by guarantee and 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 Foundation is domiciled in Jamaica with its principal place of business located at 3 Richmond Avenue, Kingston 10, Jamaica. The affairs of the Foundation are managed by a Board of Trustees and a related entity provides administrative and professional services. Except where otherwise stated these financial statements are expressed in Jamaican Dollars.

2. Summary of significant accounting policies

The financial statements are prepared in accordance with the International Financial

Reporting Standard for Small and Medium-Sized Entities (IFRS for SMEs) issued by the

International Accounting Standards Board (IASB). The significant accounting policies that

have been used in the preparation of these financial statements are summarised below. These

have been consistently applied for all the years presented.

a Management judgements and sources of estimation uncertainty

When preparing the financial statements management makes estimates and assumptions that affect the amounts reported in the financial statements. The actual results may differ from these estimates.

There were no critical judgements, apart from those involving estimation, that management made in the process of applying the Foundation’s accounting policies that have a significant effect on the amounts recognised in the financial statements.

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. Details of the estimation of fair value is shown in Note 2f.

b Income recognition

Income represents income from fund raising events and income from long-term and short-term investments. Income is measured with reference to the fair value of consideration received or receivable and is accounted for in the period to which it relates.


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c 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 assets and liabilities are recognised in the Foundation’s statement of financial position when it becomes a party to the contractual provisions of the instruments.

The financial instruments carried in the statement of financial position are: Financial assets:

Investments, receivables and cash and cash equivalents;

Financial liabilities: Payables and accruals.

The particular recognition methods adopted are disclosed in the respective accounting policies associated with each item.

d Cash and cash equivalents

Cash and cash equivalents consist of current and savings account balances, cash on hand and highly liquid short-term deposits with maturity dates of three (3) months or less on average, that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

e Receivables

Receivables are initially recognised at transaction price and subsequently measured at amortised cost. A provision for doubtful debt is recognised when there is an indication that the receivable is impaired.

f Investments

Investments in quoted shares are initially recognised at cost, which includes transactions costs, and subsequently re-measured at fair value based on quoted bid prices. Gains and losses arising from changes in fair value of investments are recognised in surplus or deficit.

g Payables and accruals

Payables are initially recognised at transaction price and subsequently measured at amortised cost.

h Foreign currency

Transactions in foreign currencies are converted at the rates of exchange ruling at the dates of those transactions. Foreign currency balances are translated at the rates of exchange ruling at the end of the reporting period. Exchange differences as a result of fluctuations in exchange rates are reflected in surplus or deficit.


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3. Investments

Interest rate 2012 2011 % p.a. $ $

Pan Caribbean Financial Services Limited GOJ INV BD 2018/2019 BP 7.780 1,014,494 1,009,690 Barita Investments Limited GOJ VR 2013/2014 Series BA 7.655 4,057,046 4,038,145

Scotia Investments Jamaica Limited Caribbean Income Fund US$12,357

(2011 - US$11,780)

1,122,113 1,016,384 Quoted shares (Note 3i) 11,237,198 13,064,691

Total 17,430,851 19,128,910

3i. Quoted Shares

2012 2011

Number of shares

2012 $

Number of shares

2011 $

Carerras Limited 94,590 5,173,127 89,190 5,797,350 National Commercial Bank Jamaica Limited

104,037 2,100,507

100,337 2,908,770

Scotia Group Jamaica Limited

86,200 1,829,164

81,550 2,024,071

Jamaica Money Market Brokers Limited – 8.75% preference shares

667,000 2,134,400

667,000 2,334,500

Total 11,237,198 13,064,691

4. Receivables

2012 2011 $ $

Interest on short-term deposits: Pan Caribbean Financial Services Limited 5,394 6,842 Barita Investments Limited 1,206 278

Total 6,600 7,120

5. Taxation recoverable

i The Foundation was granted Charitable Organisation status in 1988 under Section 13(i) (q) of the Income Tax Act. In 1992 the Foundation 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

Foundation.

ii In light of the Foundation’s tax exempt status no provision for deferred tax is included

in these financial statements.


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6. Cash and cash equivalents

Interest rate

2012

2011

% p.a. $ $

Cash at bank - National Commercial Bank Jamaica Limited J$ Savings account 0.45 159,275 83,865 J$ Current account 12,653 100,365 *Prostate cancer – J$ Current account (Note 7) 320,127 256,577 Short-term deposits – NCB Capital Markets Limited 43,268 130,958 Pan Caribbean Financial Services Limited 4.6 2,140,083 2,503,723 Barita Investments Limited 2.5 – 4.3 176,712 61,671

Total 2,852,118 3,137,159

*Included in the funds of the Foundation at the end of the year is an amount of $9,698 (2011 – $9,698) due to the Prostate Cancer Research Fund.

7. Prostate Cancer Research Fund

The Foundation established the 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. Movement on the Fund balance is as follows:

2012 2011 $ $

Balance at beginning of year 266,275 266,275 Donations received during the year 63,550 -

Balance at end of year 329,825 266,275

The above balance is represented by a designated bank account. (Note 6).

8. Payables and accruals

2012 2011 $ $

Accruals - Accounting fees 69,900 64,625

Total 69,900 64,625

9. Finance income

2012 2011 $ $

Interest income 516,954 601,107 Dividends 899,780 927,099

Total 1,416,734 1,528,206


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10. (Deficit)/surplus for the year

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

2012 2011 $ $

Key management compensation (Note 12) - - Dividends and interest income (Note 9) (1,416,734) (1,528,206)

11. Expenses by nature

Total fund raising, administrative and other expenses:

2012 2011 $ $

Fund raising expenses:

Venue - 815,588 Decoration - 102,107 Advertising - 96,453 Entertainment - 60,000 Public relations - 97,000 Printing – Flyers and tickets - 93,005

Other - 264,542

- 1,528,695

Other direct costs:

Donations for charitable medical expenses 415,725 325,000

415,725 325,000

Administrative and other expenses: Administrative and professional fees 50,900 45,500

Contributions 42,000 37,272 Public relations 122,394 403,500 Meeting expenses 111,749 157,385 Honorarium to auditors 200,000 -

Other 131,058 131,318

658,101 774,975

Total 1,073,826 2,628,670

Honorarium to auditors represents honorarium for the years ended October 31, 2008 to 2011.

12. Related party transactions The members of the Board of Trustees are volunteers (Note 1). No Trustee has received payment in respect of services rendered to the Foundation, other than by way of reimbursement of incidental expenses incurred in providing such services. The Trustees are referred to as “key management personnel”. (Note 10).

13. Employee benefits

The Foundation has no employees. A related entity provides administrative and

professional services to the Foundation, for which the Foundation pays an honorarium.

(Notes 1 & 11).


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14. Financial assets and liabilities by categories

i. Financial assets

ii Financial liabilities

15. Capital management The Foundation considers its capital to be its accumulated surplus. The Foundation’s financial objective is to generate a targeted operating surplus, in order to strengthen and provide for the future continuity of the Foundation, taking into account the various competitive risks. The Foundation’s Trustees review the financial position of the Foundation at regular meetings.

The Foundation is not subject to any externally imposed capital requirements.

2012 2011 $ $

Financial assets measured at fair value: Investments (Note 3) 17,430,851 19,128,910 Financial assets measured at amortised cost less impairment: Receivables 6,600 7,120 Cash and cash equivalents 2,852,118 3,137,159

Total 20,289,569 22,273,189

2012 2011 $ $

Financial liabilities measured at amortised cost: Payables 69,900 64,625

Total 69,900 64,625

12

Additional information – Auditors’ report

To the Trustees of


On Additional Information

The additional information presented on pages 13 and 14 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, 2012.

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, 2012 or of the results of its operations or cash flows

for the year then ended.

Chartered Accountants

Kingston, Jamaica

May 15, 2013


13

Additional information – Detailed income and expenditure account

2012 2011 $ $

Income Fund raising income – banquet - 2,036,000 Less: Related expenses - (1,528,695)

- 507,305 Other direct costs – donations for charitable

medical expenses

(415,725) (325,000) Interest and dividends from investments 1,416,734 1,528,206

1,001,009 1,710,511

Administrative and other expenses Meeting expenses 111,749 157,385 Accounting fees – current year 69,900 64,625 – prior year (550) 8,750 Contributions 42,000 37,272 Public relations 122,394 403,500 Printing, stationery and office expenses 10,000 10,000 Annual returns fees – current year 8,000 8,100 – prior years - (10,000) Bank charges and overdraft interest 43,708 49,843 Honorarium to auditors 200,000 - Administrative and professional fees 50,900 45,500

658,101 774,975

Surplus for the year 342,908 935,536


14

Additional information – Schedule of income and expenditure for the Prostate Cancer Research Fund

2012 2011 $ $

Income

Donation 63,550 -

Surplus for the year 63,550 -

jmf 2012 audit

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