SINGAPORE INSTITUTE OF MANAGEMENT … AR...10 1 GENERAL The Institute (UEN S64SS0050A) is registered...

SINGAPORE INSTITUTE OF MANAGEMENT FINANCIAL REPORT 2011

In the opinion of the Governing Council, the consolidated financial statements of the Group and the statement of financial

position, statement of comprehensive income and statement of changes in equity of the Institute as set out on pages 4 to

51 are drawn up so as to give a true and fair view of the state of affairs of the Group and Institute as at December 31, 2011,

and of the results and changes in equity of the Group and Institute and cash flows of the Group for the financial year then

ended and at the date of this statement there are reasonable grounds to believe that the Institute will be able to pay its

debts when they fall due.

ON BEHALF OF THE GOVERNING COUNCIL

Mr Gerard Ee Hock Kim

Mr Ronald Tan Hee Huan

March 22, 2012

Statement by Governing Council 1

Independent Auditors’ Report 2 - 3

Statements of Financial Position 4

Statements of Comprehensive Income 5

Statements of Changes in Equity 6 - 8

Consolidated Statement of Cash Flows 9

Notes to Financial Statements 10 - 51

01

SINGAPORE INSTITUTE OF MANAGEMENT AND ITS SUBSIDIARIES

STATEMENT BY GOVERNING COUNCIL

Report on the Financial Statements

We have audited the accompanying financial statements of Singapore Institute of Management (the “Institute”) and its

subsidiaries (the “Group”) which comprise the statements of financial position of the Group and Institute as at December

31, 2011, and the statements of comprehensive income and statements of changes in equity of the Group and the Institute

and statement of cash flows of the Group for the year then ended, and a summary of significant accounting policies and

other explanatory notes, as set out on pages 4 to 51.

Management’s Responsibility for the Financial Statements

The Institute’s Governing Council (“Governing Council”) is responsible for the preparation of financial statements that give

a true and fair view in accordance with the provisions of the Singapore Societies Act, Cap. 311 (the “Act”), the Singapore

Charities Act, Cap. 37 (the “Charities Act”) and Singapore Financial Reporting Standards and for devising and maintaining

a system of internal accounting controls sufficient to provide reasonable assurance that assets are safeguarded against

loss from unauthorised use of disposition; and transactions are properly authorised and that they are recorded as necessary

to permit the preparation of true and fair profit and loss accounts and balance sheets and to maintain accountability of

assets.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in

accordance with Singapore 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 auditor’s judgement, 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. We believe that the audit evidence we have obtained is sufficient and appropriate to provide

a basis for our audit opinion.

02

Opinion

In our opinion, the consolidated financial statements of the Group and the statement of financial position, statement of

comprehensive income and statement of changes in equity of the Institute are properly drawn up in accordance with the

provisions of the Act, the Charities Act and Singapore Financial Reporting Standards so as to give a true and fair view of

the state of affairs of the Group and of the Institute as at December 31, 2011 and of the results and changes in equity of

the Group and of the Institute and changes in cash flows of the Group for the year ended on that date.

Report on Other Legal and Regulatory Requirements

In our opinion, the accounting and other records required by the regulations enacted under the Act to be kept by the Institute

and its subsidiaries have been properly kept in accordance with those regulations.

Deloitte & Touche LLP

Public Accountants and

Certified Public Accountants

Singapore

March 22, 2012

03

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF

SINGAPORE INSTITUTE OF MANAGEMENTAND ITS SUBSIDIARIES


Group Institute2011 2010 2011 2010

Note $’000 $’000 $’000 $’000

ASSETS

CURRENT ASSETSCash and cash equivalents 6 243,871 231,034 70,719 64,754Sundry debtors, deposits and prepayments 7 18,363 14,656 5,715 7,418Forward foreign exchange contracts 8 1,047 1,549 - 165Financial assets at fair value through profit or loss 9 4,681 9,874 4,681 7,846Held-to-maturity financial assets 10 35,395 28,077 6,056 9,000Total Current Assets 303,357 285,190 87,171 89,183

NON-CURRENT ASSETSAvailable-for-sale investments 11 45,969 51,935 26,640 28,037Held-to-maturity financial assets 10 23,588 15,503 6,775 6,775Subsidiaries 12 - - 2,500 2,500Property, plant and equipment 13 212,297 202,498 194,003 187,460Total Non-Current Assets 281,854 269,936 229,918 224,772

TOTAL ASSETS 585,211 555,126 317,089 313,955

LIABILITIES, RESERVES AND FUND BALANCES

CURRENT LIABILITIESSundry creditors 14 37,756 50,432 13,457 26,682Course and membership fees received in advance 45,453 43,704 584 557Government grants received in advance 15 19,020 21,037 18,557 20,730Forward foreign exchange contracts 8 85 - 61 -Total Current Liabilities 102,314 115,173 32,659 47,969

NON-CURRENT LIABILITYDeferred tax liabilities 16 1,394 - - -

RESERVES AND FUND BALANCESAccumulated surplus General fund 386,580 344,740 281,227 261,306 Education fund 17 89,073 86,754 - - Star fund 18 - - - -

475,653 431,494 281,227 261,306

Other restricted funds 19 656 615 - -Hedging reserve 20 1,047 1,299 - -Fair value reserve General fund 3,203 4,680 3,203 4,680 Education fund 17 944 1,865 - -

4,147 6,545 3,203 4,680

Total Reserves and Fund Balances 481,503 439,953 284,430 265,986

TOTAL LIABILITIES, RESERVES AND FUND BALANCES 585,211 555,126 317,089 313,955

04

See accompanying notes to financial statements.

Group Institute

2011 2010 2011 2010

Note $’000 $’000 $’000 $’000

Income

Course, conference and consultancy 246,249 214,397 8,239 8,233

Membership fees and services 954 1,229 1,099 1,321

Government grants utilised 15 1,541 1,410 1,367 1,306

Interest income 3,204 3,104 894 1,415

Rental income 3,526 2,904 1,561 1,085

Dividend income 743 476 25,254 20,226

Group Corporate Services charges

from subsidiaries - - 31,709 23,013

Other income 2,393 2,326 933 286

Total Income 258,610 225,846 71,056 56,885

Expenditure

Course, conference and consultancy 102,761 92,579 4,686 5,424

Membership expenses 1,900 1,795 1,900 1,795

Donations to outside parties 102 89 66 61

Administrative expenses 22 108,004 85,630 44,384 33,866

Other gains and losses 23 290 (6,042) 99 (4,296)

Total Expenditure 213,057 174,051 51,135 36,850

Excess of income over expenditure before

income tax 45,553 51,795 19,921 20,035

Income tax expense 25 1,394 - - -

Excess of income over expenditure 44,159 51,795 19,921 20,035

Other Comprehensive Income

Cash flow hedges 26 (252) 238 - -

Available-for-sale investments 26 (2,398) (338) (1,477) (264)

Funds utilised - Net 41 240 - -

Total other comprehensive

(expense) income for the year, net of tax (2,609) 140 (1,477) (264)

Total comprehensive income for the year 41,550 51,935 18,444 19,771

05



STATEMENTS OF FINANCIAL POSITIONDecember 31, 2011


STATEMENTS OF COMPREHENSIVE INCOMEYear ended December 31, 2011

06 07


GROUP

<-------------------- General Fund ----------------->

Accumulated Fair value Sub-

surplus reserve total

$’000 $’000 $’000

Balance at January 1, 2010 302,089 4,944 307,033

Total comprehensive income for the year 42,288 (264) 42,024

Transfers 363 - 363

Utilisation - - -

Balance at December 31, 2010 344,740 4,680 349,420

Total comprehensive income for the year 41,840 (1,477) 40,363

Balance at December 31, 2011 386,580 3,203 389,783

<----------- Education Fund ----------->

Other

Accumulated Fair value Sub- Star restricted Hedging

surplus reserve total fund funds reserve Total

$’000 $’000 $’000 $’000 $’000 $’000 $’000

77,247 1,939 79,186 467 375 1,061 388,122

9,507 (74) 9,433 - 240 238 51,935

- - - (363) - - -

- - - (104) - - (104)

86,754 1,865 88,619 - 615 1,299 439,953

2,319 (921) 1,398 - 41 (252) 41,550

89,073 944 90,017 - 656 1,047 481,503


STATEMENTS OF CHANGES IN EQUITYYear ended December 31, 2011

Accumulated Fair value Star

surplus reserve fund Total

$’000 $’000 $’000 $’000

INSTITUTE

Balance at January 1, 2010 240,908 4,944 467 246,319

Total comprehensive income for the year 20,035 (264) - 19,771

Transfer from Star fund 363 - (363) -

Utilisation of Star fund - - (104) (104)

Balance at December 31, 2010 261,306 4,680 - 265,986

Total comprehensive income for the year 19,921 (1,477) - 18,444

Balance at December 31, 2011 281,227 3,203 - 284,430

08


Group

2011 2010

$’000 $’000

Operating Activities

Excess of income over expenditure before income tax 45,553 51,795Adjustments for:

Change in fair value of forward foreign exchange contracts 335 (317)Change in fair value of fair value through profit or loss investments 193 (291)Depreciation expense 22,934 15,235Gain on disposal of available-for-sale investments (180) (3,551)Loss on disposal of held-to-maturity investments 78 180Management fees incurred on available-for-sale investments 382 364Interest income (3,204) (3,104)Dividend income (743) (476)Government grants utilised (1,541) (1,410)Other restricted funds utilised (2) (366)Gain on disposal of property, plant and equipment (1) (16)Utilisation of Star fund - (104)

Operating cash flows before movements in working capital 63,804 57,939

Sundry debtors, deposits and prepayments (3,400) (1,255)Sundry creditors (12,676) 9,861Course and membership fees received in advance 1,749 447

Cash generated from operations 49,477 66,992

Dividend received 540 476Interest received 2,897 3,318

Net cash from operating activities 52,914 70,786

Investing Activities

Proceeds from disposal of property, plant and equipment 11 2,956Purchase of property, plant and equipment (32,743) (83,161)Proceeds on disposal of available-for-sale financial assets 11,469 23,172Purchase of available-for-sale financial assets (7,900) (16,527)Proceeds from disposal of fair value through profit or loss investments 5,000 -Proceeds on matured held-to-maturity financial assets 43,056 19,316Purchase of held-to-maturity financial assets (58,537) (36,805)

Net cash used in investing activities (39,644) (91,049)

Financing activities

Government grants refunded (Note 15) (983) (15)Government grants received (Note 15) 507 130Other restricted funds received (Note 19) 43 606

Net cash (used in) from financing activities (433) 721

Net increase (decrease) in cash and cash equivalents 12,837 (19,542)Cash and cash equivalents at beginning of year 231,034 250,576Cash and cash equivalents at end of year 243,871 231,034

09



STATEMENTS OF CHANGES IN EQUITYYear ended December 31, 2011


CONSOLIDATED STATEMENT OF CASH FLOWSYear ended December 31, 2011

10

1 GENERAL

The Institute (UEN S64SS0050A) is registered in the Republic of Singapore with its registered office and principal

place of operations at 461 Clementi Road, Singapore 599491. It is also subject to the provisions of the Charities

Act, Chapter 37. The financial statements are expressed in Singapore dollars.

The principal activities of the Institute comprise the provision of membership services to its members, the conduct

of short seminars and customised in-company training. It also functions as a Group Corporate Services Centre

providing service support to its subsidiaries’ operations. The principal activities of subsidiaries are disclosed in Note

12 to the financial statements.

The consolidated financial statements of the Group and the statement of financial position, statement of comprehensive

income and statement of changes in equity of the Institute for the year ended December 31, 2011 were authorised

for issue by the Governing Council at their meeting on March 22, 2012.

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF ACCOUNTING – The financial statements have been prepared in accordance with the historical cost

basis, except for the revaluation of certain financial instruments, and are drawn up in accordance with the provisions

of the Singapore Societies Act, Cap. 311 and Singapore Financial Reporting Standards (“FRS”).

ADOPTION OF REVISED STANDARDS – In the current financial year, the Group has adopted all the revised FRSs

that are relevant to its operations and effective for annual periods beginning on January 1, 2011.

The following are the new amended FRS that are relevant to the Group:

FRS 24 (Revised) – Related Party Disclosures

Improvements to FRS 1 – Presentation of Financial Statements

Improvements to FRS 107 – Financial Instruments: Disclosures

The adoption of these revised FRSs has no material effect on the amounts reported for the current or prior years.

At the date of authorisation of these financial statements, the following FRS that is relevant to the Group was issued

but not effective:

FRS 110 – Consolidated Financial Statements

FRS 113 – Fair Value Measurement

Amendments to FRS 1 – Presentation of Financial Statements (Amendments relating to

Presentation of Items of Other Comprehensive Income)

Consequential amendments were also made to various standards as a result of the new standards.

11

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)

Management anticipates that the adoption of the above FRSs, INT FRSs and amendments to FRSs in future periods

will not have a material impact on the financial statements of the Group in the period of their initial adoption.

EDUCATION FUND – The SIM University Education Fund (“Education Fund”) is conferred the Institute of Public

Character status. Accordingly, all donations made to the Education Fund will be tax deductible for the donors.

STAR FUND – The Skills Training and Rebate Fund (“STAR Fund”) comprised funds transferred from the general

fund for the purpose of offering rebates to members for membership subscription fees. Any amounts utilised will

be transferred from the fund to profit or loss. At the end of the scheme, any excess funds recorded in STAR Fund

will be taken directly to the general fund.

OTHER RESTRICTED FUNDS – Sponsorship-Award fund and other funds comprising donations and sponsorships,

which are kept intact as capital, are directly taken to the fund in the year in which such donations and sponsorships

are received for the purpose of awarding of scholarships, medals, prizes to deserving students, developing standards

in e-learning and development of programmes lectures and research for project proof of concept.

Income and expenditure arising from the management of the fund is taken directly to Sponsorship-Awards fund and

other funds account. Income designated to fund specific activities or programmes will be transferred from the fund

to profit or loss to match the designated expenditure. Any shortfall of income from the fund for a particular year will

be taken directly to profit or loss.

BASIS OF CONSOLIDATION – The consolidated financial statements incorporate the financial statements of the

Institute and enterprises controlled by the Institute (its subsidiaries). Control is achieved where the Institute has the

power to govern the financial and operating policies of an investee enterprise so as to obtain benefits from its

activities.

The results of subsidiaries acquired or disposed of during the year are included in the consolidated statement of

comprehensive income from the effective date of acquisition or up to the effective date of disposal, as appropriate.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies

used into line with those used by other members of the Group.

All intra-group transactions, balances, income and expenses are eliminated on consolidation.

In the Institute’s financial statements, investments in subsidiaries are carried at cost less any impairment in net

recoverable value that has been recognised in profit or loss.

FINANCIAL INSTRUMENTS – Financial assets and financial liabilities are recognised on the Group’s statement

of financial position when the Group becomes a party to the contractual provisions of the instrument.


NOTES TO FINANCIAL STATEMENTSDecember 31, 2011



12


Financial assets

Investments are recognised and de-recognised on a trade date where the purchase or sale of an investment is under

a contract whose terms require delivery of the investment within the timeframe established by the market concerned,

and are initially measured at fair value plus transaction costs.

Other financial assets are classified into the following specified categories: financial assets at “fair value through

profit or loss”, “held-to-maturity investments”, “available-for-sale” financial assets and “loans and receivables”. The

classification depends on the nature and purpose of financial assets and is determined at the time of initial recognition.

Financial assets at fair value through profit or loss (FVTPL)

Financial assets are classified as at FVTPL where the financial asset is either held for trading or it is designated

as at FVTPL.

A financial asset is classified as held for trading if:

• it has been acquired principally for the purpose of selling in the near future; or

• it is a part of an identified portfolio of financial instruments that the Group manages together and has a recent

actual pattern of short-term profit-taking; or

• it is a derivative that is not designated and effective as a hedging instrument.

A financial asset other than a financial asset held for trading may be designated as at FVTPL upon initial recognition if:

• such designation eliminates or significantly reduces a measurement or recognition inconsistency that would

otherwise arise; or

• the financial asset forms part of a group of financial assets or financial liabilities or both, which is managed and

its performance is evaluated on a fair value basis, in accordance with the Group’s documented risk management

or investment strategy, and information about the grouping is provided internally on that basis; or

• it forms part of a contract containing one or more embedded derivatives, and FRS 39 Financial Instruments:

Recognition and Measurement permits the entire combined contract (asset or liability) to be designated as at

FVTPL.

Financial assets at fair value through profit or loss are stated at fair value, with any resultant gain or loss recognised

in income or expenditure. The net gain or loss recognised in income or expenditure incorporates any dividend or

interest earned on the financial asset. Fair value is determined in the manner described in Note 4.

Held-to-maturity investments

Bonds with fixed or determinable payments and fixed maturity dates where the Group has a positive intent and ability

to hold to maturity are classified as held-to-maturity investments. Held-to-maturity investments are recorded at

amortised cost using the effective interest method less impairment, with revenue recognised on an effective yield

basis.

13


Available-for-sale financial assets

Certain investments held by the Group are classified as being available for sale and are stated at fair value. Fair

value is determined in the manner described in Note 4. Gains and losses arising from changes in fair value are

recognised in other comprehensive income with the exception of impairment losses, interest calculated using the

effective interest method and foreign exchange gains and losses on monetary assets which are recognised directly

in profit or loss. Where the investment is disposed of or is determined to be impaired, the cumulative gain or loss

previously recognised in other comprehensive income and accumulated in revaluation revenue is reclassified to

profit or loss. Dividends on available-for-sale equity instruments are recognised in profit or loss when the Group’s

right to receive payments is established. The fair value of available-for-sale monetary assets denominated in a

foreign currency is determined in that foreign currency and translated at the spot rate at the end of reporting date.

The change in fair value attributable to translation differences that result from a change in amortised cost of the

asset is recognised in profit or loss, and other changes are recognised in other comprehensive income.

Effective interest method

The effective interest method is a method of calculating the amortised cost of a financial instrument and of allocating

interest income or expense over the relevant period. The effective interest rate is the rate that exactly discounts

estimated future cash receipts or payments (including all fees on points paid or received that form an integral part

of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the

financial instrument, or where appropriate, a shorter period. Income and expense is recognised on an effective

interest basis for debt instruments.

Sundry debtors

Sundry debtors that have fixed or determinable payments that are not quoted in an active market are classified as

“loans and receivables”. Sundry debtors are initially measured at fair value and subsequently measured at amortised

cost using the effective interest method less impairment. Interest is recognised by applying the effective interest

method, except for short-term receivables when the recognition of interest would be immaterial.

Impairment of financial assets

Financial assets, other than those at fair value through profit or loss, are assessed for indicators of impairment at

the end of each reporting date. Financial assets are impaired where there is objective evidence that, as a result of

one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows

of the financial asset have been impacted.

For financial assets carried at amortised cost, the amount of the impairment is the difference between the asset’s

carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the

exception of sundry debtors where the carrying amount is reduced through the use of an allowance account. When

a sundry debtor is uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts

previously written off are credited against the allowance account. Changes in the carrying amount of the allowance

account are recognised in profit or loss.





14


Impairment of financial assets (cont’d)

With the exception of available-for-sale equity instruments, if, in a subsequent period, the amount of the impairment

loss decreases and the decrease can be related objectively to an event occurring after the impairment loss was

recognised, the previously recognised impairment loss is reversed through profit or loss to the extent the carrying

amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would

have been had the impairment not been recognised.

In respect of available-for-sale equity instruments, any subsequent increase in fair value after an impairment loss,

is recognised directly in other comprehensive income.

Derecognition of financial assets

The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire,

or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another

entity. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues

to control the transferred asset, the Group recognises its retained interest in the asset and an associated liability

for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred

financial asset, the Group continues to recognise the financial asset and also recognises a collateralised borrowing

for the proceeds received.

FINANCIAL LIABILITIES

Financial liabilities

Other payables are initially measured at fair value, net of transaction costs, and are subsequently measured at

amortised cost, using the effective interest rate method, with interest expense recognised on an effective yield basis.

Derecognition of financial liabilities

The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled

or they expire.

Derivative financial instruments

The Group uses derivative financial instruments such as forward foreign exchange contracts to manage its exposure

to foreign exchange rate risk.

Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently

remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognised in profit

or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the

timing of the recognition in the income and expenditure statements depends on the nature of the hedge relationship.

The Group designates certain derivatives as hedges of highly probable forecast transactions.

A derivative is presented as a non-current asset or a non-current liability if the remaining maturity of the instrument

is more than 12 months and it is not expected to be realised or settled within 12 months. Other derivatives are

presented as current assets or current liabilities.

15


Hedge accounting

The Group and Institute designate certain hedging instruments which includes forward foreign exchange contracts

as cash flow hedges.

At the inception of the hedge relationship the entity documents the relationship between the hedging instrument and

hedged item, along with its risk management objectives and its strategy for undertaking various hedge transactions.

Furthermore, at the inception of the hedge and on an ongoing basis, the Group documents whether the hedging

instrument that is used in a hedging relationship is highly effective in offsetting changes in fair values or cash flows

of the hedged item.

Note 20 contains details of the fair values of the derivative instruments used for hedging purposes. Movements in

the hedging reserve are also detailed in the statements of changes in equity.

Cash flow hedge

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges

are recognised in other comprehensive income. The gain or loss relating to the ineffective portion is recognised

immediately in profit or loss as part of other gains and losses.

Amounts recognised in other comprehensive income are recycled in profit or loss in the periods when the hedged

item is recognised in statement of comprehensive income.

Hedge accounting is discontinued when the Group revokes the hedging relationship, the hedging instrument expires

or is sold, terminated, or exercised, or no longer qualifies for hedge accounting. Any cumulative gain or loss deferred

in reserve at that time remains in equity and is recognised when the forecast transaction is ultimately recognised

in profit or loss. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was

deferred in reserve is recognised immediately in profit or loss.

LEASES – Leases are classified as finance leases whenever the terms of the lease transfer substantially all the

risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease unless

another systematic basis is more representative of the time pattern in which use benefit derived from the leased

asset is diminished. Initial direct costs incurred in negotiating and arranging an operating lease are added to the

carrying amount of the leased asset and recognised as an expense over the lease term on the same basis as the

lease income.

Rentals payable under operating leases are charged to profit or loss on a straight-line basis over the term of the

relevant lease unless another systematic basis is more representative of the time pattern in which economic benefits

from the leased asset are consumed. Contingent rentals arising under operating leases are recognised as an expense

in the period in which they are incurred.





16


PROPERTY, PLANT AND EQUIPMENT – Property, plant and equipment are stated at cost less accumulated

depreciation and any accumulated impairment losses. Artifacts and paintings included in office equipment, furniture

and fittings are not depreciated.

Depreciation is charged so as to write off the cost of assets, over their estimated useful lives, using the straight-

line method, on the following bases:

Leasehold land, building and improvements – 2% to 6.25%

Office premises – 2% to 3.33%

Office equipment, furniture and fittings (excluding artifacts and paintings) – 25%

Motor vehicles – 20%

Computers – 33.33%

Fully depreciated assets still in use are retained in the financial statements.

The estimated useful lives, residual values and depreciation method are reviewed at each year end, with the effect

of any changes in estimate accounted for on a prospective basis.

No depreciation is charged on construction-in-progress.

The gain or loss arising on disposal or retirement of an item of property, plant and equipment is determined as the

difference between the sales proceeds and the carrying amounts of the asset and is recognised in the income or

expenditure.

IMPAIRMENT OF ASSETS – At the end of each reporting period, the Group reviews the carrying amounts of its

tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If

any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the

impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the

Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the

estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current

market assessments of the time value of money and the risks specific to the asset.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the

carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is

recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case

the impairment loss is treated as a revaluation decrease.

17


IMPAIRMENT OF ASSETS (cont’d)

Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased

to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the

carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-

generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.

PROVISIONS – Provisions are recognised when the Group has a present obligation (legal or constructive) as a

result of a past event, it is probable that the Group will be required to settle the obligation, and a reliable estimate

can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation

at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. Where

a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the

present value of those cash flows.

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third

party, the receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the

amount of the receivable can be measured reliably.

GOVERNMENT GRANTS – These represent contributions made by the government for the Group. Government

grants received for the purchase of property, plant and equipment or to meet operating expenses are taken to the

government grants received in advance account. Grants for the purpose of property, plant and equipment are

recognised in profit or loss over the periods necessary to match the depreciation of the assets purchased with the

related grants. Government grants to meet operating expenses are recognised as income in the same year the

expenses are incurred.

REVENUE RECOGNITION – Revenue is measured at the fair value of the consideration received or receivable.

Course, conference and consultancy fees are recognised over the duration of the programmes.

Membership fees are recognised on a straight line basis over the membership term.

Revenue from the rendering of services that are of a short duration is recognised when the services are completed.

Interest income is recognised on an accrual basis, by reference to the principal outstanding and at the effective

interest rate applicable.

Dividend income is recognised when the shareholders’ rights to receive payment have been established.

The Group’s policy for recognition of revenue from operating leases is described above.





18


RETIREMENT BENEFIT COSTS – Payments to defined contribution retirement benefit plans are charged as an expense

as they fall due. Payments made to state-managed retirement benefit schemes, such as the Singapore Central Provident

Fund, are dealt with as payments to defined contribution plans where the Group’s and Institute’s obligations under the

plans are equivalent to those arising in a defined contribution retirement benefit plan.

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 end of the reporting period.

INCOME TAX – Income tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the

statement of comprehensive income because it excludes items of income or expense that are taxable or deductible

in other years and it further excludes items that are not taxable or tax deductible. The Group’s liability for current

tax is calculated using tax rates (and tax laws) that have been enacted or substantively enacted by the end of the

reporting period.

Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial statements

and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet

liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax

assets are recognised to the extent that it is probable that taxable profits will be available against which deductible

temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent

that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset

realised based on the tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting

period. Deferred tax is charged or credited to profit or loss, except when it relates to items charged or credited directly

to equity, in which case the deferred tax is also dealt with in equity.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against

current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends

to settle its current tax assets and liabilities on a net basis.

DONATIONS – Donations given are charged to profit or loss when incurred.

FOREIGN CURRENCY TRANSACTIONS AND TRANSLATION – The individual financial statements of each group

entity are measured and presented in the currency of the primary economic environment in which the entity operates

(its functional currency). The consolidated financial statements of the Group and the statement of financial position,

statement of comprehensive income and statement of changes in equity of the Institute are presented in Singapore dollars,

which is the functional currency of the Institute, and the presentation currency for the consolidated financial statements.

19


FOREIGN CURRENCY TRANSACTIONS AND TRANSLATION (cont’d)

In preparing the financial statements of the individual entities, transactions in currencies other than the entity’s functional

currency are recorded at the rates of exchange prevailing on the date of the transaction. At the end of each reporting

period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at the end of the

reporting period. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated

at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms

of historical cost in a foreign currency are not retranslated.

Exchange differences arising on the settlement of monetary items, and on retranslation of monetary items are included

in profit or loss for the period. Exchange differences arising on the retranslation of non-monetary items carried at fair

value are included in income or expenditure for the period except for differences arising on the retranslation of non-

monetary items in respect of which gains and losses are recognised in other comprehensive income. For such non-

monetary items, any exchange component of that gain or loss is also recognised in other comprehensive income.

CASH AND CASH EQUIVALENTS – Cash and cash equivalents comprise cash on hand and at bank and fixed deposits

which are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.

3 CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the Group’s accounting policies, which are described in Note 2, management is required to make

judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent

from other sources. The estimates and associated assumptions are based on historical experience and other factors

that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are

recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the

revision and future periods if the revision affects both current and future periods.

(i) Critical judgements in applying the Group’s accounting policies

Management is of the opinion that any instances of application of judgements are not expected to have a significant

effect on the amounts recognised in the financial statements except as follows:

Classification of held-to-maturity investments

The Group follows the guidance of FRS 39 on classifying non-derivative financial assets with fixed or determinable

payment and fixed maturity as held-to-maturity. This classification requires significant judgement. In making this

judgement, the Group evaluates its intention and ability to hold such investments to maturity. If the Group fails to

hold these investments to maturity other than for the specific circumstances, for example, selling an insignificant

amount close to maturity, it will be required to reclassify the entire class as available for sale. The investment would

therefore be measured at fair value and no longer at amortised cost.





20

3 CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

(cont’d)

(ii) Key sources of estimation uncertainty

The key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the

reporting period, that have a significant risk of causing a material adjustment to carrying amounts of assets and

liabilities within the next financial year are as discussed below.

Fair value of financial instruments

The fair value of financial instruments that are not traded in an active market is determined by using valuation

techniques. These techniques involve uncertainties and require assumptions and judgements regarding

prepayments, credit risks and discount rates. Changes in these assumptions will significantly affect the estimated

value of the financial instruments. The Group uses a variety of methods and makes assumptions that are based

on market conditions existing at the end of the reporting period. Quoted market prices or dealer quotes for

similar instruments are some of the common techniques used to calculate the fair value of these instruments.

The carrying amounts of these instruments are disclosed in Notes 8, 9, 10 and 11.

Useful lives of property, plant and equipment

Management exercises their judgement in estimating the useful lives of property, plant and equipment and

reviews the useful lives at the end of each annual reporting period. The total carrying amount of property, plant

and equipment of the Group and Institute is $212,297,000 (2010 : $202,498,000) and $194,003,000 (2010 :

$187,460,000) respectively.

4 FINANCIAL INSTRUMENTS, FINANCIAL RISKS AND CAPITAL RISKS MANAGEMENT

(a) Categories of financial instruments

The following table sets out the financial instruments as at the end of the reporting period:

Group Institute

2011 2010 2011 2010

$’000 $’000 $’000 $’000

Financial assets

Cash and cash equivalents 243,871 231,034 70,719 64,754

Loans and receivables 10,153 7,859 5,275 7,070

Forward foreign exchange contracts 1,047 1,549 - 165

Financial assets at fair value

through profit or loss 4,681 9,874 4,681 7,846

Available-for-sale-investments 45,969 51,935 26,640 28,037

Held-to-maturity investments 58,983 43,580 12,831 15,775

Financial liabilities

Sundry creditors 37,756 50,432 13,457 26,682

Forward foreign exchange contracts 85 - 61 -

21

4 FINANCIAL INSTRUMENTS, FINANCIAL RISKS AND CAPITAL RISKS MANAGEMENT (cont’d)

(b)Financial risk management policies and objectives

The Group has documented financial risk management policies. These policies set out the Group’s overall

business strategies and its risk management philosophy. The Group’s overall financial risk management programme

seeks to minimise potential adverse effects of financial performance of the Group. The Governing Council provides

written principles for overall financial risk management and written policies covering specific areas, such as

market risk (including foreign exchange risk, interest rate risk, and equity price risk), credit risk, liquidity risk, cash

flow interest rate risk, use of derivative financial instruments and investing excess cash. Such written policies

are reviewed annually by the Governing Council and periodic reviews are undertaken to ensure that the Group’s

policy guidelines are complied with. Risk management is carried out by Treasury Department under the policies

approved by the Governing Council.

There has been no significant change to the manner in which it manages and measures the risk. Market risk

exposures are measured using sensitivity analysis indicated below.

(i) Foreign exchange risk management

A portion of the Group’s and the Institute’s available-for-sale investments and expenses are denominated

in United States dollar, Sterling pound and Australian dollar and therefore is exposed to foreign exchange risk.

At the end of the reporting period, the carrying amounts of monetary assets and monetary liabilities denominated

in currencies other than the respective group entities’ functional currencies are as follows:

Group Institute

Assets Liabilities Assets Liabilities

2011 2010 2011 2010 2011 2010 2011 2010

$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Australian dollar 187 1,369 161 296 - - - -

United States dollar 32,211 32,170 53 31 21,185 18,563 - -

Sterling pound 63 590 49 156 - - - -

Entities in the Group use forward foreign exchange contracts to hedge their exposure to foreign currency

risk in the local reporting currency. The Treasury Department is responsible for hedging the net position in

each borrowing currency.

Further details of the forward foreign exchange contracts are found in Note 8 to the financial statements.

Foreign currency sensitivity

The sensitivity rate used when reporting foreign currency risk is 10%, which is the change in foreign exchange

rate that management deems reasonably possible which will affect outstanding foreign currency denominated

monetary items at period end.





22


Foreign currency sensitivity (cont’d)

If the relevant foreign currency strengthens by 10% against the functional currency of each group entity,

without considering the effect of the derivative financial instruments, profit or loss will increase by:

Australian United States Sterling

dollar impact dollar impact pound impact

2011 2010 2011 2010 2011 2010

$’000 $’000 $’000 $’000 $’000 $’000

Group

Profit or loss 3 107 3,216 3,214 1 44

Institute

Profit or loss - - 2,119 1,856 - -

If the relevant foreign currency weakens by 10% against the functional currency of each group entity, there

will be an equal and opposite impact on profit or loss.

In management’s opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk

as the year end exposure does not reflect the exposure during the year.

(ii) Interest rate risk management

The Group is exposed to interest rate risk through the impact of rate changes on interest bearing assets.

The Group maintains its cash and cash equivalents and held-to-maturity financial assets in fixed rate

instruments and does not have any significant interest bearing liabilities.

All financial assets and liabilities at year end bear no interest except for cash and fixed deposits and held-

to-maturity financial assets. The average interest rate on held-to-maturity financial asset is disclosed in Note 10.

Interest rate sensitivity analysis

The sensitivity analysis has been determined based on the exposure to interest rates for cash and cash

equivalent balances at the end of the reporting period and the stipulated change taking place at the beginning

of the respective financial year. A 100 basis point increase or decrease represents management’s assessment

of the possible change in interest rate.

If interest rates had been 100 basis points higher/lower with all the other variables held constant, the Group’s

and Institute’s net surplus would increase/decrease by approximately $2.4 million and $0.7 million respectively

(2010 : $2.3 million and $0.6 million respectively).

23


(iii) Credit risk

The Group and Institute are not exposed to significant credit risk as most of its fees are received in advance.

In 2011 and 2010, the Group’s sundry debtors comprise mainly of grant receivable from Ministry of Education.

Cash and cash equivalents are held with reputable financial institutions.

(iv) Liquidity risk

The Group maintains sufficient cash and cash equivalents, and internally generated cash flows to finance

its activities.

The Group’s and Institute’s derivative financial instruments comprise foreign exchange forward contracts

with net mark-to market gain of $962,000 (2010 : net mark-to market gain of $1,549,000) and net mark-to

market loss of $61,000 (2010 : net mark-to market gain $165,000) as at December 31, 2011 respectively

with contracted gross cash flows due within 1 year (2010 : due within 1 year).

Non-derivative financial assets

The following table details the expected maturity for non-derivative financial assets. The tables below have

been drawn up based on the undiscounted contractual maturities of the financial assets including interest

that will be earned on those assets except where the Group and the Institute anticipate that the cash flow

will occur in a different period. The adjustment column represents the possible future cash flows attributable

to the instrument included in the maturity analysis which are not included in the carrying amount of the

financial asset on the statement of financial position.





24


Non-derivative financial assets (cont’d)

Fixed rate Non-interest bearing

Less 6 months More On demand More

than to 12 than 12 or within than

6 months months months 1 year 1 year Total

$’000 $’000 $’000 $’000 $’000 $’000

Group

2011

Cash and cash equivalents 209,132 34,725 - 14 - 243,871

Loans and receivables 731 - - 9,422 - 10,153

Fair value through profit or loss - 4,681 - - - 4,681

Available-for-sale financial assets - - - - 45,969 45,969

Held to maturity financial assets 32,243 3,152 23,588 - - 58,983

Total 242,106 42,558 23,588 9,436 45,969 363,657

2010

Cash and cash equivalents 231,021 - - 13 - 231,034




Held to maturity financial assets 28,077 - 15,503 - - 43,580

Total 259,412 9,874 15,503 7,558 51,935 344,282

25


Non-derivative financial assets (cont’d)

Fixed rate Non-interest bearing

Less 6 months More On demand More

than to 12 than 12 or within than

6 months months months 1 year 1 year Total

$’000 $’000 $’000 $’000 $’000 $’000

Institute

2011






Total 76,874 4,681 6,775 5,176 26,640 120,146

2010






Total 73,844 7,846 6,775 6,980 28,037 123,482





26


Non-derivative financial liabilities

The Group’s and Institute’s financial liabilities are substantially non-interest bearing and due within 1 year.

(v) Price risk management

The Group is exposed to risks arising from financial assets at fair value through profit or loss and available

for-sale equity investments. Available-for-sale equity investments are held for strategic rather than trading

purposes. The Group does not trade in available-for-sale investments.

Further details of these investments can be found in Notes 9 and 11 to the financial statements.

Price sensitivity analysis

The sensitivity analyses below have been determined based on the exposure to price risks at the reporting

date. In respect of financial assets at fair value through profit or loss, if prices had been 10% higher/lower,

the Group’s and Institute’s net surplus for the year ended December 31, 2011 would increase/decrease by

$468,000 (2010 : $987,000) and $468,000 (2010 : $784,000) respectively.

In respect of available-for-sale equity investments, if the prices had been 10% higher/lower, the Group’s and

Institute’s fair value reserves would increase/decrease by $4,597,000 (2010 : $5,150,000) and $2,664,000

(2010 : $2,787,000) respectively.

(vi) Fair value of financial assets and financial liabilities

Other than the financial assets at fair value through profit or loss, held-to-maturity financial assets and

available-for-sale investments, the carrying amounts of financial assets and liabilities reported in the statement

of financial position approximate their respective fair values due to the relatively short-term maturity of these

financial instruments. The fair value of financial assets at fair value through profit or loss, held-to-maturity

and available-for-sale investments financial assets are disclosed in Notes 9, 10 and 11 respectively.

The fair values of financial assets and financial liabilities are determined as follows:

i) the fair values of financial assets and financial liabilities with standard terms and conditions and traded

on active liquid markets are determined with reference to quoted market prices;

ii) the fair values of other financial assets and financial liabilities (excluding derivative financial instruments)

are determined in accordance with generally accepted pricing models based on discounted cash flow

analysis; and

iii) the fair value of derivative financial instruments are calculated using quoted prices. Where such prices

are not available, discounted cash flow analysis is used, based on the applicable yield curve of the

duration of the instruments for non-optional derivatives, and option pricing models for optional derivatives,

where applicable.

27


(vi) Fair value of financial assets and financial liabilities (cont’d)

The Group classifies fair value measurements using a fair value hierarchy that reflects the significance of

the inputs used in making the measurements. The fair value hierarchy has the following levels:

(a) quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1);

(b) 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 2); and

(c) inputs for the asset or liability that are not based on observable market data (unobservable inputs) (Level 3).

Financial instruments measured at fair value

Total Level 1 Level 2 Level 3

$’000 $’000 $’000 $’000

Financial Assets

Group

2011

Financial assets at fair value through profit or loss:

- Other financial assets at fair

value through profit or loss 4,681 - 4,681 -


designated as cashflow hedge

- Forward foreign exchange contracts 1,047 1,047 - -

Available-for-sale investments:

- Funds managed by fund managers 38,488 - 38,488 -

- Quoted preference shares 7,481 7,481 - -

45,969 7,481 38,488 -

Total 51,697 8,528 43,169 -





28


Financial instruments measured at fair value (cont’d)


$’000 $’000 $’000 $’000

Financial Assets

Group

2010




- Forward foreign exchange contracts 250 250 - -

10,124 250 9,874 -


designated as cashflow hedge

- Forward foreign exchange contracts 1,299 1,299 - -




51,935 14,438 37,497 -

Total 63,358 15,987 47,371 -

29




$’000 $’000 $’000 $’000

Financial Assets

Institute

2011







26,640 3,202 23,438 -

Total 31,321 3,202 28,119 -

2010





8,011 165 7,846 -




28,037 3,166 24,871 -

Total 36,048 3,331 32,717 -





30




$’000 $’000 $’000 $’000

Financial Liabilities

Group

2011

Financial liabilities at fair value through profit or loss:


Institute

2011

Financial liabilities at fair value through profit or loss:


The Group and Institute have no significant financial liabilities carried at fair value in 2010.

There were no transfers between Level 1 and Level 2 of the fair value hierarchy during the financial year.

(c) Capital risk management policies and objectives

The Group reviews its capital structure at least annually to ensure that the Group will be able to continue as a

going concern. The capital structure of the Group comprises only of funds and reserves. The Group’s overall

strategy remains unchanged from 2010.

5 RELATED COMPANY AND RELATED PARTY TRANSACTIONS

Many of the Institute’s transactions and arrangements are between members of the Group and the effect of these

on the basis determined between the parties is reflected in these financial statements. The intercompany balances

are unsecured, interest-free and repayable on demand unless otherwise stated.

Transactions between the Institute and its subsidiaries, which are related companies of the Institute, have been

eliminated on consolidation.

31

5 RELATED COMPANY AND RELATED PARTY TRANSACTIONS (cont’d)

Compensation of key management personnel

The remuneration of key management during the year is as follows:

Group Institute

2011 2010 2011 2010

$’000 $’000 $’000 $’000

Short-term benefits 10,413 9,298 2,721 2,492

Post-employment benefits 423 328 138 108

10,836 9,626 2,859 2,600

The remuneration of key management is determined by the Compensation & Establishment Committee of the Institute

having regard to the performance of individuals and market trends.

Number of key management in remuneration bands for the Group is shown below. Key management personnel

comprises chief executive officers, directors and deans and trustees.

2011 2010

$950,001 - $1,000,000 1 -

$900,001 - $950,000 - 1

$550,001 - $600,000 1 1

$500,001 - $550,000 1 -

$450,001 - $500,000 1 2

$350,001 - $400,000 1 1

$300,001 - $350,000 2 2

$250,001 - $300,000 5 3

$200,001 - $250,000 8 9

$150,001 - $200,000 20 12

$100,001 - $150,000 1 4

$100,000 and below 15 16

56 51





32

6 CASH AND CASH EQUIVALENTS

Group Institute

2011 2010 2011 2010

$’000 $’000 $’000 $’000

Fixed deposits 225,132 217,787 67,704 61,520

Cash and bank balances 18,739 13,247 3,015 3,234

243,871 231,034 70,719 64,754

Cash and bank balances comprise cash held and short-term bank deposits with an original maturity of within 12

months. The carrying amounts of these assets approximate their fair values.

Fixed deposits bear interest at average rates ranging from 0.16% to 1.28% (2010 : 0.06% to 4.48%) per annum and

are for a tenure of approximately 6 days to 12 months (2010 : 0.5 day to 12 months).

The Group’s and Institute’s cash and bank balances that are not denominated in the functional currencies of the

respective entities are as follows:

Group Institute

2011 2010 2011 2010

$’000 $’000 $’000 $’000

Australian dollar 82 1,324 - -

United States dollar 192 34 60 34

Sterling pound 58 590 - -

7 SUNDRY DEBTORS, DEPOSITS AND PREPAYMENTS

Group Institute

2011 2010 2011 2010

$’000 $’000 $’000 $’000

Subsidiary (Note 12) - - 4,094 4,718

Course fee receivable (trade) 2,318 898 738 589

Staff loans 8 14 2 12

Interest receivable 731 424 108 99

Grant receivable from Ministry of Education 6,437 4,009 - -

Other debtors 609 2,409 315 1,558

10,103 7,754 5,257 6,976

Prepayments 8,210 6,797 440 348

Deposits 50 105 18 94

Total 18,363 14,656 5,715 7,418

33

7 SUNDRY DEBTORS, DEPOSITS AND PREPAYMENTS (cont’d)

The table below is an analysis of the Group’s and Institute’s sundry debtors as at December 31:

Group Institute

2011 2010 2011 2010

$’000 $’000 $’000 $’000

Not past due and not impaired 9,304 7,250 4,863 6,748

Past due but not impaired (i) 799 504 394 228

Total sundry debtors 10,103 7,754 5,257 6,976

(i) Aging of the Group's and Institute’s

sundry debtors which are past due but not impaired

< 90 days 597 395 296 194

> 90 days 202 109 98 34

Total 799 504 394 228

The Group and Institute have no impaired sundry debtors as at December 31, 2011 and 2010.

The Group’s and Institute’s sundry debtors and deposits that are not denominated in the functional currencies of

the respective entities are as follows:

Group Institute

2011 2010 2011 2010

$’000 $’000 $’000 $’000

Australian dollar 105 45 - -

Sterling pound 5 - - -

United States dollar 2,857 2,310 - -





34

8 FORWARD FOREIGN EXCHANGE CONTRACTS

Group Institute

Assets Liabilities Assets Liabilities

2011 2010 2011 2010 2011 2010 2011 2010

$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Forward foreign

exchange contracts 1,047 1,549 85 - - 165 61 -

The Group and Institute utilise currency derivatives to hedge significant future transactions and cash flow. The Group

and Institute use forward foreign exchange contracts in the management of its exchange rate exposure. The

instruments purchased are denominated in the currency of the Group’s and Institute’s principal markets.

At the end of the reporting period, the total notional amount of outstanding forward foreign exchange contracts to

which the Group and Institute are committed are as follows:

Group Institute

2011 2010 2011 2010

$’000 $’000 $’000 $’000

Buy AUD 13,000 11,000 - -

Sell SGD 15,685 12,748 - -

Buy SGD 25,753 52,191 18,388 21,063

Sell USD 19,951 40,240 14,244 16,240

At December 31, 2011, the fair value of the Group’s currency derivatives is estimated to be approximately $1,047,000

recognised as derivative assets and $85,000 recognised as derivative liabilities (2010 : $1,549,000 recognised as

derivative assets and $Nil as derivative liabilities). These fair values are measured using quoted forward exchange

rates.

At December 31, 2011, the fair value of the Institute’s currency derivatives is estimated to be approximately $61,000

recognised as derivative liabilities (2010 : $165,000 recognised as derivative assets). These fair values are measured

using quoted forward exchange rates.

The fair value of the Group’s currency derivatives that are designated and effective as cash flow hedges amounting

to a gain of $1,047,000 (2010 : $1,299,000) has been recognised in other comprehensive income. The fair value

of the Group’s and Institute’s currency derivatives that do not qualify for hedge accounting of $85,000 (loss) and

$61,000 (loss) respectively (2010 : $250,000 (gain) and $165,000 (gain) respectively) have been taken to profit

or loss.

35

9 FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

Group Institute

Issue date Maturity date 2011 2010 2011 2010

$’000 $’000 $’000 $’000

Credit April 9, 2008 to July 31, 2011 to

linked notes July 31, 2008 March 20, 2013 4,681 9,874 4,681 7,846

The credit linked notes have nominal values amounting to $10,000,000 with coupon rate ranging from 4.5% to 5.1%

per annum. The average effective interest rate of the credit linked notes ranges from 4.5% to 5.1% per annum.

The fair value of the credit link notes are determined based on estimated valuations derived from market quotations

or from proprietary models that take into consideration estimates about relevant present and future market conditions.

10 HELD-TO-MATURITY FINANCIAL ASSETS

Group Institute

2011 2010 2011 2010

$’000 $’000 $’000 $’000

Quoted debt securities at amortised cost:

Current 35,395 28,077 6,056 9,000

Non-current 23,588 15,503 6,775 6,775

58,983 43,580 12,831 15,775

The debt securities comprise bonds issued by financial institutions and public listed companies. As at December

31, 2011, the debt securities have nominal values amounting to $58.7 million (2010 : $43.5 million) with coupon

rates ranging from 0.9% to 4.9% (2010 : 1.2% to 4.8%) per annum and maturity dates ranging from January 2012

to November 2017 (2010 : March 2011 to November 2017). The average effective interest rate of the debt securities

ranges from 0.88% to 4.93% (2010 : 1.24% to 3.78%) per annum.

As at December 31, 2010 and 2011, the Institute held a OCBC bond with a nominal value amounting to $7 million

with a fixed coupon rate of 3.78% for the first 5 years to November 28, 2012. If the debt security is not called at the

Step-up Date on November 28, 2012, it will bear interest at a floating rate equal to aggregate to the three-month

Swap Offer Rate and the initial credit spread of 0.72% per annum plus 1% per annum.

All the bonds carry a fixed coupon rate except for the nominal $7 million OCBC bond. The fair values of the securities

are provided by banks employing generally market accepted valuation parameters and techniques.

The debt securities have fair value amounting to $59,020,000 (2010 : $43,899,000) and $13,175,000 (2010 :

$16,175,000) at the Group and Institute level respectively.

The held-to-maturity financial assets are denominated in the respective entities’ functional currencies.





36

11 AVAILABLE-FOR-SALE INVESTMENTS

Group Institute

2011 2010 2011 2010

$’000 $’000 $’000 $’000

Funds managed by fund managers, at fair value 38,488 37,497 23,438 24,871

Quoted preference shares, at fair value 7,481 14,438 3,202 3,166

45,969 51,935 26,640 28,037

The investments above offer the Group the opportunity for return through dividend income, interest income and fair

value gains. They have no fixed maturity or coupon rate. The fair values of the quoted funds are determined as the

quoted fund net asset values provided by the fund managers and banks at the last market day of the financial year.

The net asset values approximate the fair values as the funds comprise mainly financial assets at fair value through

profit or loss and other monetary assets.

The fair values of the quoted preference shares are determined based on the last traded price on the Singapore

Stock Exchange at the end of the reporting period.

The Group’s and Institute’s available-for-sale investments that are not denominated in the functional currencies of

the respective entities are as follows:

Group Institute

2011 2010 2011 2010

$’000 $’000 $’000 $’000

United States dollar 29,162 29,826 21,125 18,529

37

12 SUBSIDIARIES

Institute

2011 2010

$’000 $’000

Unquoted equity shares, at cost 2,500 2,500

Details of the Institute’s subsidiaries at December 31, 2011 are as follows:

Country of Proportion

incorporation of ownership

(or registration) interest and

Name of subsidiary and operation voting power Principal activities

2011 2010

% %

Held by the Institute

Singapore Institute of Singapore 100 100 Engaged in higher

Management Pte. Ltd. (b) and continuing

education

SIM University (a) (b) Singapore 100 100 Engaged in the

advancement of

education and

dissemination of

knowledge, the

promotion of

research and the

conferring and

awarding of

degrees, diplomas

and certificates

(a) SIM University is incorporated as a company limited by guarantee on April 14, 2005. SIM University’s constitution states that

the Institute’s Governing Council is empowered to appoint or remove any member of SIM University’s Board of Trustees and

in the event of winding up or dissolution of SIM University, after the satisfaction of all its debts and liabilities, any property

whatsoever, the same shall not be paid to or distributed among the members of SIM University, but shall be given or transferred

to the Institute. Accordingly, the Institute is deemed to have control over SIM University.

(b) Audited by Deloitte & Touche LLP, Singapore.





13 PROPERTY, PLANT AND EQUIPMENT

Office

Leasehold land, equipment,

building and Office furniture Motor Construction

improvements premises and fittings vehicles Computers in-progress Total

$’000 $’000 $’000 $’000 $’000 $’000 $’000

Group

Cost:

At January 1, 2010 133,665 2,073 22,175 495 42,309 38,051 238,768

Additions - - 2,951 372 10,925 68,913 83,161

Disposals - - (293) (188) (3,430) - (3,911)

At December 31, 2010 133,665 2,073 24,833 679 49,804 106,964 318,018

Additions 5,238 - 3,223 - 12,828 11,454 32,743

Disposals - - (34) - (224) - (258)

Reclassification 102,578 - 4,328 - 1,327 (108,233) -

At December 31, 2011 241,481 2,073 32,350 679 63,735 10,185 350,503

Accumulated depreciation:

At January 1, 2010 56,639 1,421 14,098 431 28,667 - 101,256

Depreciation for the year 4,745 53 4,529 112 5,796 - 15,235

Disposals - - (285) (175) (511) - (971)

At December 31, 2010 61,384 1,474 18,342 368 33,952 - 115,520


Disposals - - (24) - (224) - (248)

At December 31, 2011 70,776 1,528 22,567 449 42,886 - 138,206

Carrying amount:

At December 31, 2010 72,281 599 6,491 311 15,852 106,964 202,498

At December 31, 2011 170,705 545 9,783 230 20,849 10,185 212,297

38 39

13 PROPERTY, PLANT AND EQUIPMENT (cont’d)

Office

Leasehold land, equipment,

building and Office furniture Motor Construction

improvements premises and fittings vehicles Computers in-progress Total

$’000 $’000 $’000 $’000 $’000 $’000 $’000

Institute

Cost:

At January 1, 2010 132,845 2,073 12,290 132 17,880 38,051 203,271

Additions - - 1,890 - 1,317 68,913 72,120

Disposals - - (269) - (448) - (717)

At December 31, 2010 132,845 2,073 13,911 132 18,749 106,964 274,674

Additions 5,238 - 2,351 - 2,252 11,454 21,295

Disposals - - (34) - (224) - (258)

Reclassification 103,398 - 3,508 - 1,327 (108,233) -

At December 31, 2011 241,481 2,073 19,736 132 22,104 10,185 295,711

Accumulated depreciation:

At January 1, 2010 56,194 1,421 7,289 116 14,511 - 79,531


Disposals - - (261) - (448) - (709)

At December 31, 2010 60,939 1,474 8,821 125 15,855 - 87,214


Disposals - - (24) - (224) - (248)

At December 31, 2011 70,776 1,528 11,477 131 17,796 - 101,708

Carrying amount:

At December 31, 2010 71,906 599 5,090 7 2,894 106,964 187,460

At December 31, 2011 170,705 545 8,259 1 4,308 10,185 194,003





41

15 GOVERNMENT GRANTS RECEIVED IN ADVANCE

Total

$’000

Group

Balance at January 1, 2010 22,332

Funds received 130

Funds refunded (15)

Utilised during the year (1,410)

Balance at December 31, 2010 21,037

Funds received 507

Funds refunded (983)



Institute

Balance at January 1, 2010 22,038

Funds refunded (2)



Funds received 177

Funds refunded (983)



16 DEFERRED TAX LIABILITIES

Group

2011 2010

$’000 $’000

At beginning of year - -

Charge to profit or loss (Note 25) 1,394 -

At end of year 1,394 -

The balances in the account comprise the tax effects of:

Group

2011 2010

$’000 $’000

Accelerated tax depreciation 1,394 -

40

14 SUNDRY CREDITORS

Group Institute

2011 2010 2011 2010

$’000 $’000 $’000 $’000

Deposits 390 352 182 146

Accruals and other payables 37,366 50,080 13,275 26,536

37,756 50,432 13,457 26,682

Accruals principally comprise amounts outstanding for ongoing costs.

The Group’s and Institute’s sundry creditors that are not denominated in the functional currencies of the respective

entities are as follows:

Group Institute

2011 2010 2011 2010

$’000 $’000 $’000 $’000

Australian dollar 161 296 - -

United States dollar 53 31 - -

Sterling pound 49 156 - -





4143

17 EDUCATION FUND (cont’d)

Group

2011 2010

$’000 $’000

Education fund at January 1

Accumulated surplus 86,754 77,247

Fair value reserve 1,865 1,939

Education fund at December 31 90,017 88,619

Represented by:

Current assets

Fixed deposits 17,693 27,624

Other receivables 372 247

Financial assets at fair value through profit or loss - 2,028

Held-to-maturity financial assets 29,339 19,077

47,404 48,976

Non-current assets

Available-for-sale investments 19,329 23,898

Held-to-maturity financial assets 16,813 8,728

Property, plant and equipment 8,144 10,117

44,286 42,743

Less: Current liability

Other payables 1,673 3,100

Total net assets 90,017 88,619

42

17 EDUCATION FUND

The SIM University Education Fund is set up to establish, operate, maintain and promote SIM University as a private

university. The SIM University Education Fund has been conferred the Institute of Public Character status.

The following represents the SIM University Education Fund:

Group

2011 2010

$’000 $’000

Donation received from related company 13,510 16,120

Donation received from external parties 198 51

Interest income 1,151 829

Fund manager rebates received 17 48

Dividend income 489 250

Other operating income 218 481

Other income 11 1,700

15,594 19,479

Less:

Course expenditure 2,721 2,254

Staff and manpower costs 3,484 2,469

Depreciation 4,322 3,934

Others 2,748 1,315

13,275 9,972

Net surplus for the year 2,319 9,507

Other comprehensive income for the year

Available-for-sale investments (921) (74)

Total comprehensive income for the year 1,398 9,433





45

19 OTHER RESTRICTED FUNDS (cont’d)

Research

and Sponsorship

development awards Other

fund fund funds Total

$’000 $’000 $’000 $’000

Group

Balance at January 1, 2010 242 96 37 375

Received/receivable during the year 200 50 356 606

Utilised during the year - (2) (364) (366)

Balance at December 31, 2010 442 144 29 615

Received/receivable during the year 43 - - 43

Utilised during the year (1) (1) - (2)

Balance at December 31, 2011 484 143 29 656

Represented by:

Cash and bank balances:

At December 31, 2010 442 144 29 615

At December 31, 2011 484 143 29 656

20 HEDGING RESERVE

Group

2011 2010

$’000 $’000

Unrealised gain on outstanding forward foreign exchange contracts 1,047 1,299

The fair value of currency derivatives of the Group that are designated and effective as cash flow hedges amounted

to a gain of $1,047,000 (2010 : $1,299,000) and these have been deferred in hedging reserve.

The hedging reserve represents hedging gains and losses recognised on the effective portion of cash flow hedges.

The cumulative deferred gain or loss on the hedge recognised in other comprehensive income and accumulated

hedging reserves is reclassified to income or expenditure when the hedged transaction impacts the profit or loss.

44

18 STAR FUND

The Skills and Training Rebate Fund (“STAR Fund”) comprised of funds transferred from the general fund for the

purpose of offering rebates to members for membership subscription fee.

Group and

Institute

$’000

Balance at January 1, 2010 467

Transfer to general fund during the year (363)

Utilised during the year (104)

Balance at December 31, 2010 and December 31, 2011 -

In 2010, the unutilised amount was transferred to the general fund as the rebate scheme ceased on

December 31, 2010.

19 OTHER RESTRICTED FUNDS

Other restricted funds comprise the following funds:

Name of fund Purpose

Research and development fund For the purpose of providing scholarship to students and

to fund research activities.

Sponsorship awards fund Donations and sponsorships received for the purpose of

awarding of scholarships, medals, prizes to deserving

students.

Other funds – Spring Singapore and Fund received for the purpose of course development for

Economic Development Board Biomedical Sciences Proof of Concept Scheme and

Executive Master in Technology Entrepreneurship and

Rotnam Design Work.





47

22 ADMINISTRATIVE EXPENSES

Group Institute

2011 2010 2011 2010

$’000 $’000 $’000 $’000

Staff costs (Note 24) 64,261 55,454 17,827 16,154

Depreciation of property, plant and equipment 22,934 15,235 14,742 8,392

Maintenance 9,164 6,100 5,092 4,168

Utilities and telephone 3,999 2,354 3,915 2,277

Professional fees 2,955 1,655 993 756

Others 4,691 4,832 1,815 2,119

Total 108,004 85,630 44,384 33,866

23 OTHER GAINS AND LOSSES

Group Institute

2011 2010 2011 2010

$’000 $’000 $’000 $’000

Gain on disposal of property, plant and equipment (1) (16) (1) (15)

Net foreign exchange losses (gains) (101) (2) 2 4

Fair value gain on forward foreign exchange contracts

not used for hedging purposes 301 (2,362) 165 (1,631)

Change in fair value of fair value

through profit or loss investments 193 (291) 165 (255)

Gain on sales of investment (102) (3,371) (232) (2,399)

290 (6,042) 99 (4,296)

24 STAFF COSTS

Included in staff costs are the following amounts:

Group Institute

2011 2010 2011 2010

$’000 $’000 $’000 $’000

Wages and salaries 55,849 48,200 14,977 13,552

Cost of defined contribution plans 6,381 4,947 1,984 1,504

Other staff benefits 2,031 2,307 866 1,098

64,261 55,454 17,827 16,154

46

20 HEDGING RESERVE (cont’d)

Gains and losses transferred from equity into profit or loss during the period are included in the following items in

the statement of comprehensive income:

Group

2011 2010

$’000 $’000

Course expenditure (54) (25)

At the end of the reporting period, the total notional amount of outstanding forward foreign exchange contracts to

which the Group is committed for cash flow hedging purposes are as follows:

Group

2011 2010

$’000 $’000

Buy AUD 13,000 11,000

Sell SGD 15,685 12,748

21 FAIR VALUE RESERVE

Group Institute

2011 2010 2011 2010

$’000 $’000 $’000 $’000

At beginning of financial year 6,545 6,883 4,680 4,944

Reclassification to profit or loss from

equity on disposal of available-for-sale investments (346) (1,408) (274) (1,007)

Arising during the year (2,052) 1,070 (1,203) 743

At end of financial year 4,147 6,545 3,203 4,680

The fair value reserve relates to revaluation of the available-for-sale investments. As certain of these investments

are funded by the SIM University Education Fund, the fair value reserve which forms part of the SIM University

Education Fund amounted to a gain of $944,000 (2010 : $1,865,000).





49

25 TAXATION (cont’d)

$’000

Deferred tax benefit on above unrecorded

At December 31, 2010 24

At December 31, 2011 -

The realisation of future income tax benefits on unutilised donations carry forwards is available up to a maximum

of 5 years subject to the conditions imposed by law including retention of majority shareholders as defined and

donations must be deducted from income after capital allowances and trade losses. In 2010, no deferred tax asset

was recognised in view of the unpredictability of future profit stream.

26 COMPONENTS OF OTHER COMPREHENSIVE INCOME

Group Institute

2011 2010 2011 2010

$’000 $’000 $’000 $’000

Cash flow hedges:

Gains arising during the year 1,047 1,299 - -

Reclassification to profit or loss from equity on cash flow hedges (1,299) (1,061) - -

(252) 238 - -


(Losses) Gains arising during the year (2,052) 1,070 (1,203) 743

Reclassification to profit or loss from equity on disposal of

available-for-sale investments (346) (1,408) (274) (1,007)

(2,398) (338) (1,477) (264)

Funds refunded (utilised) 41 240 - -

Other comprehensive (loss) income for the year, net of tax (2,609) 140 (1,477) (264)

48

25 TAXATION

With effect from Year of Assessment 2008, the requirement for charities to spend at least 80% of their annual receipts

on charitable objects in Singapore within 2 years in order to enjoy income tax exemption has been removed.

Consequently, Section 13M has been repealed by Section 13(1)(zm) and the receipts for the financial years ended

December 31, 2011 and 2010 are exempt from income tax.

2011 2010

$’000 $’000

Taxation charge in respect of profit for the financial year of a subsidiary,

Singapore Institute of Management Pte. Ltd.:

Deferred taxation (Note 16) 1,394 -

Income tax expense of a subsidiary, Singapore Institute of Management Pte. Ltd., varied from the amount of income

tax determined by applying the Singapore income tax rate of 17% (2010 : 17%) to profit before income tax as a

result of the following differences:

2011 2010

$’000 $’000

Income tax expense at statutory rate 4,757 4,456

Non-allowable items 2,228 2,584

Tax effect on utilisation of double tax deduction on donations (5,766) (7,029)

Others 175 (11)

1,394 -

Singapore Institute of Management Pte. Ltd. has unutilised donations carry forwards available for offsetting against

future taxable income as follows:

$’000

At January 1, 2010 586

Adjustments 595

Arising in the financial year 40,304

Utilised in the financial year (41,345)

At December 31, 2010 140

Arising in the financial year 33,779

Utilised in the financial year (33,919)

At December 31, 2011 -





51

28 OPERATING LEASE COMMITMENTS (cont’d)

(b)The Group and Institute as lessors

The Group and Institute rent out some of its premises under operating leases. Rental income earned by the

Group and Institute during the year amounted to $3,526,000 (2010 : $2,904,000) and $1,561,000 (2010 : $1,085,000)

respectively.

At the end of the reporting period, the Group and Institute have contracted with tenants for the following minimum

lease payments:

Group and

Institute

2011 2010

$’000 $’000

Future minimum lease payments receivable:

Within 1 year 1,439 574

Within 2 to 5 years 1,329 85

29 CONTINGENT LIABILITIES

Group Institute

2011 2010 2011 2010

$’000 $’000 $’000 $’000

Guarantees (unsecured) 2,021 1,500 626 105

50

27 COMMITMENTS

Group Institute

2011 2010 2011 2010

$’000 $’000 $’000 $’000

a) Capital expenditure commitments

Estimated amounts committed for future capital expenditure

but not provided for in the financial statements 37,901 45,267 28,369 43,090

b) Forward foreign exchange contracts

At the end of the reporting period, the total notional amount of outstanding forward foreign exchange contracts

to which the Group and Institute are committed are as disclosed in Note 8.

28 OPERATING LEASE COMMITMENTS

(a) The Group and Institute as lessees

Group Institute

2011 2010 2011 2010

$’000 $’000 $’000 $’000

Minimum lease payments under operating leases

recognised as expenditure of the year 6,808 6,044 58 61

At the end of the reporting period, the Group and Institute have outstanding commitments under non-cancellable

operating leases which fall due as follows:

Group Institute

2011 2010 2011 2010

$’000 $’000 $’000 $’000

Future minimum lease payments payable:

Within 1 year 7,374 3,065 550 570

Within 2 to 5 years 15,311 1,238 358 908

Operating lease payments represent rentals payable by the Group and Institute for certain of their office equipment.

Leases are negotiated for the range from 2 to 5 years and rentals are fixed for an average of 2 to 5 years.





461 Clementi Road

Singapore 599491

www.sim.edu.sg

Members of The SIM Group

SINGAPORE INSTITUTE OF MANAGEMENT … AR...10 1 GENERAL The Institute (UEN S64SS0050A) is registered...

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