CC(M)P.32013/2014
PAGE2 - 3
4 - 10
11 - 12
13
14
15
16
17 - 18
19 - 52
Campus Bursar’s Report
Selected Financial and Statistical Highlights
Auditors’ Report
Statement of Financial Position
Statement of Comprehensive Income
Detailed Statement of Comprehensive Income
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial StatementsIdentification and Principal ActivitiesBasis of PresentationSignificant Accounting PoliciesCash and Cash EquivalentsShort-term InvestmentsRelated PartiesAccounts ReceivableInventoriesAccounts Payable and AccrualsShort-term LoansLong-term ReceivablesInvestments in SubsidiariesProperty, Plant & EquipmentUnexpended donations for special projectsEndowmentsLong-term LiabilitiesCapital GrantsEmployee benefits obligationsMiscellaneous IncomeCentral ExpendituresFinance costsStaff costsTaxationFinancial Risk ManagementFair Value of Financial InstrumentsCapital Commitments
The University of the West Indies, Mona Campus
Contents
OVERVIEW
The Mona Campus could not escape the effects of the difficult economic climate that persisted throughout the 2012-13 financial year. Despite the circ*mstances the Campus remained focused on advancing the 2012-17 strategic goals with priority being place on initiatives to strengthen finances towards a sustainable future.
Financing the operations at Mona became increasingly burdensome as the cumulative effect of the reduced funding from the Government of Jamaica for successive years continued to mount. However, the consistent and timely receipt of the funds from the Government of Jamaica throughout the year is greatly appreciated. Slow rate of payment of subventions by many of the other contributing governments continued as in the previous year, reflecting the fiscal limitations of their challenged economies.
Student enrolment was a source of encouragement as growth was experienced in all but one faculty and this combined with tuition fees increases translated into growth in billed tuition revenues for government-sponsored and self-financing academic programmes. The financial difficulties faced by an increased number of students led to many being unable to meet fee payments within the registration deadline and having to seek extended payment arrangements. In response to this, the Campus accommodated students by allowing tuition fees to be paid during the course of each semester in accordance with specific approved instalment plans.
The Student’s Loan Bureau on which more of our students, in recent years, have come to depend on as the source of tuition funding faced its own funding challenge. As a consequence disbursem*nts of approved loans to educational institutions were delayed and this added to the cash flow uncertainties faced by the Campus. Delays were also experienced in the collection fees from other third parties responsible for payment of fees on behalf of students.
Faced with the uncertainty of cash inflow, the patience and understanding of suppliers was essential though not always available as many of them tried to grapple with their own financial difficulties. Initiatives to contain costs and implement sustainable cost reductions remained integral components of the financial management strategy.
The Campus’ actions to manage the multiple challenges did not avert the need to access short term bank credit to support the financing of operations, a need the Campus had avoided for almost twenty years.
FINANCIAL PERFORMANCE
The Campus operations generated a surplus of $629.3m, before depreciation and provision for post- employment pension and health. Comparatively, this is a 17% reduction from the surplus of $756.7m in 2011-12. As in the previous year the surplus resulted primarily from net revenues generated from activities introduced by the Campus to diversify income streams and reduce reliance on government financing which for 2012-13 accounted for only 42% of Campus revenues (prior year: 41%).
After making provision for depreciation and post- retirement benefits a deficit of $1,109.9m was recorded for the year indicating the magnitude of two important future costs which the University has to have the capacity to fund.
The yearend financial position reflected in the balance sheet highlights the combined effect of the various factors that directly and indirectly impacted the operations of the Campus during the year.
The balance sheet at July 31, 2013 clearly indicates the difficulty experienced in managing working capital. The increased level of receivables from both governments and students relative to the previous financial year is not surprising as collections from both sources were negatively impacted by the economic realities. A direct consequence of this is the similar level of increase in the amount due to suppliers at the end of the financial year.
The University of the West Indies, Mona Campus
Campus Bursar’s Report | for the Year Ended July 31, 2013
2
Acco
unts
201
3
The Campus’ efforts to advance the strategic agenda placed emphasis on completing and bringing into operation key capital projects that were initiated in previous financial years. These efforts realised the completion of the Medical Sciences Teaching and Research (MST&R) Complex, the Business Process Outsourcing (BPO) Call Centre facility and the two new on-campus residential facilities to accommodate an additional 1000 students. The Campus air conditioning service park which now provides air conditioning for both the MST&R Complex and the BPO Call Centre, was also completed.
These projects were completed through a mix of internally generated resources, further draw downs on long term borrowings and a short term loan which at year end was in the process of being converted to a long term loan. The additional investment in these projects accounts for the majority of the total $2,023m invested in fixed assets during the year.
Though the financial prospects are not very encouraging and the funding challenges continue, the management of the Mona Campus remains resolute in its efforts towards securing a sustainable financial future for the institution. The recent investments made in projects to contribute to revenue growth have already demonstrated the potential to deliver the expected returns. The financial performance of each project will be closely monitored and the financial outcomes of these will be built upon by other income generating initiatives that are being planned and executed.
Elaine RobinsonCampus Bursar
The University of the West Indies, Mona Campus
Campus Bursar’s Report | for the Year Ended July 31, 2013
3
Acco
unts
201
3
SOURCE OF INCOME
The primary source of income of the University of the West Indies, Mona Campus has been contributions from theGovernments of the West Indies. The other sources (including the primary source) of income and the proportionalrepresentation are as follows:
The total campus income from all sources for the year ending July 2013 was $13,241 million. Information on the income categories, for the current year and the last four years is presented in pictorial form by figures 2 and 3. Figure 1 shows sources of income by categories for the last four financial years.
Figure 1.
SOURCES 12/13 11/12 10/11 09/10 08/09
West Indian Government Contributions
Tuition Fees
Donor Income
Other Projects
TOTAL INCOME
1.
(i)
(ii)
(iii)
(iv)
Contributions from the Governments of the West Indies (42%).
Tuition fees (18%).
Donor funds which are funded by governments, International Agencies and private donors (24%).
Other projects ( Administration & Common service Fees, Investment income, Contributions fromCentre, Commercial Operations) (16%).
Income (J$’000) - Five Year Summary
5,626,110
2,427,826
3,128,161
2,058,454
13,240,551
5,290,249
2,039,285
3,331,870
1,758,034
12,419,438
5,431,337
1,795,466
2,716,523
1,500,314
11,443,640
5,441,544
1,667,671
2,300,839
1,560,185
10,970,239
5,126,623
1,359,693
620,734
2,620,590
9,727,640
The University of the West Indies, Mona Campus
Selected Financial and Statistical Highlights | for the Year Ended July 31, 2013
4
Acco
unts
201
3
Figure 2. Income (%) 2012 - 2013
Figure 3. Income (J$’000) - Five Year Analysis
Figure 2.
Figure 3.
Income (%) 2012 - 2013
Income (J$'000) - Five Year Analysis
6,000,000
West Indian Government Contributions Tuition Fees Donor Income Other Projects
100%
6,000,000
West Indian Government Contributions Tuition Fees Donor Income Other Projects
42%
18%
24%
16%
West Indian Government Contributions Tuition Fees Donor Income Other Projects
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
12/13 11/12 10/11 09/10 08/090
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
12/13 11/12 10/11 09/10 08/09
4
Figure 2.
Figure 3.
Income (%) 2012 - 2013
Income (J$'000) - Five Year Analysis
6,000,000
West Indian Government Contributions Tuition Fees Donor Income Other Projects
100%
6,000,000
West Indian Government Contributions Tuition Fees Donor Income Other Projects
42%
18%
24%
16%
West Indian Government Contributions Tuition Fees Donor Income Other Projects
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
12/13 11/12 10/11 09/10 08/090
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
12/13 11/12 10/11 09/10 08/09
4
Figure 2.
Figure 3.
Income (%) 2012 - 2013
Income (J$'000) - Five Year Analysis
6,000,000
West Indian Government Contributions Tuition Fees Donor Income Other Projects
100%
6,000,000
West Indian Government Contributions Tuition Fees Donor Income Other Projects
42%
18%
24%
16%
West Indian Government Contributions Tuition Fees Donor Income Other Projects
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
12/13 11/12 10/11 09/10 08/090
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
12/13 11/12 10/11 09/10 08/09
4
Figure 2.
Figure 3.
Income (%) 2012 - 2013
Income (J$'000) - Five Year Analysis
6,000,000
West Indian Government Contributions Tuition Fees Donor Income Other Projects
100%
6,000,000
West Indian Government Contributions Tuition Fees Donor Income Other Projects
42%
18%
24%
16%
West Indian Government Contributions Tuition Fees Donor Income Other Projects
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
12/13 11/12 10/11 09/10 08/090
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
12/13 11/12 10/11 09/10 08/09
4
The University of the West Indies, Mona Campus
Selected Financial and Statistical Highlights | for the Year Ended July 31, 2013
5
Acco
unts
201
3
EXPENDITURE
The expenditure of the Campus is incurred in four (4) broad categories as follows:
Total campus expenditure excluding finance charge and depreciation for the reporting period was J$12,411 million. Figure 5 shows the expenditure incurred in each of the above categories.
Figure 6 is a pictorial representation of the five year summary of expenditure as presented in Figure 4.
Figure 7 shows the total departmental ( academic and other teaching and research) expenditure for the last five financial years. Figure 8 and 9 are pictorial representation of the departmental expenditure for the last five financial years.
Figure 4.
CATEGORIES 12/13 11/12 10/11 09/10 08/09
Administration
Departments
Central Expenditure
Other Projects
Pension, Finance Charge & Depreciation
TOTAL
2.
(i)
(ii)
(iii)
(iv)
Administration (9%)
Departments - Teaching & Research, Other (44%)
Central Expenditure (21%)
Other projects (26%)
Expenditure (J$’000) - Five Year Summary
1,093,106
5,460,561
2,565,369
3,291,494
12,410,530
1,939,897
14,350,427
1,013,752
5,082,807
2,054,952
3,259,948
11,411,459
91,909
11,503,368
954,676
4,953,101
1,968,291
2,922,356
10,798,424
1,421,637
12,220,061
816,024
4,587,128
2,046,140
2,462,955
9,912,247
945,516
10,857,763
786,278
4,822,132
1,974,401
2,293,588
9,876,399
1,109,387
10,985,786
The University of the West Indies, Mona Campus
Selected Financial and Statistical Highlights | for the Year Ended July 31, 2013
6
Acco
unts
201
3
Figure 5. Areas of Expenditure (J$’000) : 2012 - 2013
Figure 5.Areas of Expenditure (J$'000) : 2012 - 2013
5,460,561
2,565,369
3,291,494
1,939,8972,000,000
3,000,000
4,000,000
5,000,000
6,000,000
Administration
Departments
Central Expenditure
Other Projects
Pension, Finance Charge & Depreciation
5,460,561
2,565,369
3,291,494
1,939,8972,000,000
3,000,000
4,000,000
5,000,000
6,000,000
Administration
Departments
Central Expenditure
Other Projects
Pension, Finance Charge & Depreciation
6
1,093,106
1,000,000
1,093,106
1,000,000
6
The University of the West Indies, Mona Campus
Selected Financial and Statistical Highlights | for the Year Ended July 31, 2013
7
Acco
unts
201
3
Figure 6. Areas of Expenditure (J$’000) - Five Year AnalysisFigure 6.
Areas of Expenditure (J$'000) - Five Year Analysis
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
Administration
Departments
Central Expenditure
Other Projects
Pension, Finance Charge & Depreciation
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
Administration
Departments
Central Expenditure
Other Projects
Pension, Finance Charge & Depreciation
1,000,000
12/13 11/12 10/11 09/10 08/090
1,000,000
12/13 11/12 10/11 09/10 08/09
7
Figure 6.Areas of Expenditure (J$'000) - Five Year Analysis
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
Administration
Departments
Central Expenditure
Other Projects
Pension, Finance Charge & Depreciation
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
Administration
Departments
Central Expenditure
Other Projects
Pension, Finance Charge & Depreciation
1,000,000
12/13 11/12 10/11 09/10 08/090
1,000,000
12/13 11/12 10/11 09/10 08/09
7
The University of the West Indies, Mona Campus
Selected Financial and Statistical Highlights | for the Year Ended July 31, 2013
8
Acco
unts
201
3
Figure 7. Departmental Expenditure (J$’000) - Five Year Summary
CATEGORIES 12/13 11/12 10/11 09/10 08/09
Pure and Applied Science
Arts and Education
Social Science
Medical Science
Library
Others
TOTAL
Figure 8. Departmental Expenditure - 2012 - 2013
1,008,373
902,524
652,814
2,046,277
381,007
469,566
5,460,561
892,209
799,196
746,517
1,832,809
386,524
407,269
5,064,524
938,963
698,140
758,724
1,748,741
364,698
443,835
4,953,101
862,277
649,198
764,749
1,545,341
368,435
397,128
4,587,128
869,664
683,541
795,980
1,666,422
384,065
422,461
4,822,133
Figure 8.Departmental Expenditure - 2012 - 2013
Pure and Applied Science
18%
Arts and Education17%
Library7%
Others9%
Pure and Applied Science
18%
Arts andEducation
17%
Social Science
Medical Science37%
Library7%
Others9%
Social Science12%Medical Science
37%
Pure and Applied Science Arts and Education Social Science Medical Science Library Others
Social Science12%
Pure and Applied Science Arts and Education Social Science Medical Science Library Others
9
The University of the West Indies, Mona Campus
Selected Financial and Statistical Highlights | for the Year Ended July 31, 2013
Figure 8.Departmental Expenditure - 2012 - 2013
Pure and Applied Science
18%
Arts and Education17%
Library7%
Others9%
Pure and Applied Science
18%
Arts andEducation
17%
Social Science
Medical Science37%
Library7%
Others9%
Social Science12%Medical Science
37%
Pure and Applied Science Arts and Education Social Science Medical Science Library Others
Social Science12%
Pure and Applied Science Arts and Education Social Science Medical Science Library Others
9
9
Acco
unts
201
3
Figure 9. Departmental Expenditure (J$’000) - Five Year Analysis
Figure 9.Departmental Expenditure (J$'000) - Five Year Analysis
1,000,000
1,500,000
2,000,000
2,500,000 08/09 09/10 10/11 11/12 12/13
1,000,000
1,500,000
2,000,000
2,500,000 08/09 09/10 10/11 11/12 12/13
10
500,000
Pure and Applied Science
Arts and Education
Social Science Medical Science Library Others0
500,000
Pure and Applied Science
Arts and Education
Social Science Medical Science Library Others
10
The University of the West Indies, Mona Campus
Selected Financial and Statistical Highlights | for the Year Ended July 31, 2013
10
Acco
unts
201
3
KPMGChartered AccountantsThe Victoria Mutual Building6 Duke StreetKingstonJamaica, W.I.
P.O. Box 76KingstonJamaica, W.I.Telephone +1 (876) 922-6640Fax +1 (876) 922-7198 +1 (876) 922-4500e-Mail [emailprotected]
KPMG, a Jamaican partnership and a member firm of the KPMG network ofindependent member firms affiliated withKPMG International Cooperative (“KPMGInternational”), a Swiss entity.
Elizabeth A. JonesR. Tarun HandaPatrick A. ChinPatricia O. Dailey-SmithLinroy J. Marshall
Cynthia L. LawrenceRajan TrehanNorman O. RainfordNigel R. Chambers
INDEPENDENT AUDITORS’ REPORT
To the Members ofThe Council of the University of the West Indies - Mona Campus
Report on the Financial Statements
We have audited the financial statements of University of the West Indies – Mona Campus, set out on pages 13 to 52, which comprise the statement of financial position as at July 31, 2013, the statements of comprehensive income, changes in equity and cash flows for the year then ended, and notes, comprising 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 International Financial Reporting Standards, 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 the 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 as to whether or not the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence relating to the amounts and disclosures in the financial statements. The procedures selected depend on our judgment, including our assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider 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 circ*mstances, 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.
The University of the West Indies, Mona Campus
Auditors’ Report | for the Year Ended July 31, 2013
11
Acco
unts
201
3
INDEPENDENT AUDITORS’ REPORT
To the Members ofThe Council of the University of the West Indies - Mona Campus
Report on the Financial Statements, cont’dWe 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 University of the West Indies – Mona Campus as at July 31, 2013, and of its financial performance, changes in equity and cash flows for the year then ended, in accordance with International Financial Reporting Standards.
Chartered AccountantsKingston, Jamaica
August 29, 2013
The University of the West Indies, Mona Campus
Auditors’ Report (cont’d) | for the Year Ended July 31, 2013
12
Acco
unts
201
3
CURRENT ASSETS
CURRENT LIABILITIES
NET CURRENT (LIABILITIES)/ASSETSNON-CURRENT ASSETS
RESERVES
NON-CURRENT LIABILITIES
The financial statements on pages 13 to 52 were approved for issue by the Audit Committee of the University - Mona Campus on August 26, 2013 and signed on its behalf by management on August 29, 2013:
____________________________ PrincipalProfessor Gordon Shirley
____________________________ Campus BursarElaine Robinson
The accompanying notes form an integral part of the financial statements.
Notes 2013 2012 $’000 $’000
Cash and cash equivalents Short-term investments Due from related parties Accounts receivable Inventories
Accounts payable and accrualsDue to related partiesCurrent portion of long-term loansCurrent portion of other long-term liabilitiesShort-term loans
Long-term receivablesInterest in subsidiariesProperty, plant and equipment
Capital reservesOther reserves:
Unexpended funds for
Endowment fundsLong-term liabilitiesCapital grantsEmployee benefits obligation
General reservesAccumulated fund
special projects, scholarships and prizes
330,741333,232415,894
2,122,94277,621
3,280,430
2,460,402506,674556,233440,229
1,050,2605,013,7981,733,368
366,322189,918
15,304,92415,861,16414,127,796
1,763,978
868,916387,404
3,020,298
465,470290,278
6,478,1501,571,4132,302,187
11,107,49814,127,796
210,419479,033179,253
1,531,54571,475
2,471,725
1,975,279515,795442,305308,683142,500
3,384,562912,837
413,316169,115
14,101,76514,684,19613,771,359
1,763,978
859,6851,496,5174,120,180
464,343296,540
5,929,9511,391,8051,568,5409,651,179
13,771,359
45
6(a)78
96(b)16(i)16(ii)
10
111213
1415161718
( ) ( )
The University of the West Indies, Mona Campus
Statement of Financial Position | for the Year Ended July 31, 2013
13
Acco
unts
201
3
INCOME
West Indian government contributions University Centre contributions for library & administration Tuition & other student fees Donor income for special projects Other projects Investment Commercial operations Miscellaneous
Less: Transfer to capital grants
Income after transfer to capital grants
EXPENDITURE
EXCESS OF INCOME OVER EXPENDITURE
LOSS ON FOREIGN EXCHANGE
FINANCE COSTS
EXCESS OF INCOME OVER EXPENDITURE FOR THE YEAR
PENSION PLANS AND POST-EMPLOYMENT
DEPRECIATION(DEFICIT)/SURPLUS, BEING TOTAL COMPREHENSIVE
The accompanying notes form an integral part of the financial statements.
Administrative Departmental Central Donor funded expenditure for special projects Other projects Commercial operations
FOR THE YEAR BEFORE LOSS ON EXCHANGE,FINANCE COSTS, DEPRECIATION, PENSION PLANS AND POST-EMPLOYMENT MEDICAL BENEFITS
BEFORE DEPRECIATION, PENSION PLANS AND POST-EMPLOYMENT MEDICAL BENEFITS
MEDICAL BENEFITS
(LOSS)/INCOME FOR THE YEAR
5,626,11025,201
2,427,826388,789
2,739,37214,016
1,805,457423,670
13,450,441209,891
13,240,550
1,093,1065,460,5612,565,369
388,7891,347,5701,555,134
12,410,529
830,021
84,540
116,184
629,297
920,005
819,168
1,109,876
5,290,24925,200
2,039,285537,259
2,794,61148,110
1,476,079 349,735
12,560,528141,090
12,419,438
1,013,7525,082,8072,054,954
537,2591,379,8821,342,807
11,411,461
1,007,977
4,558
246,665
756,754
739,550
580,235
916,069
( ) ( )
( )
( )
( )
( )
( )
( )
2013 2012 $’000 $’000
( )
( )
Notes
19
17
20
21
18(c)(iv)
13
The University of the West Indies, Mona Campus
Statement of Comprehensive Income | for the Year Ended July 31, 2013
14
Acco
unts
201
3
The University of the West Indies, Mona Campus
Detailed Statement of Comprehensive Income | for the Year Ended July 31, 2013
INCO
ME
Less
: Tra
nsfe
r to
capi
tal g
rant
s
ExpE
Nd
Itu
rE
ExCE
SS O
F IN
COM
E O
VEr
Exp
ENd
Itu
rE
Loss
on
fo
reig
n e
xch
an
ge
fin
an
ce c
osT
s
ExCE
SS O
F IN
COM
E O
VEr
Exp
ENd
Itu
rE
Pen
sio
n P
Lan
s a
nD
Po
sT-e
MPL
oYM
enT
DeP
reci
aTio
n
Wes
t Ind
ian
gove
rnm
ent c
ontr
ibut
ions
Uni
vers
ity C
entr
e co
ntrib
utio
ns fo
r lib
rary
an
d ad
min
istr
atio
n Tu
ition
and
oth
er s
tude
nt fe
esD
onor
inco
me
from
spe
cial
pro
ject
sO
ther
pro
ject
sIn
vest
men
ts
Com
mer
cial
ope
ratio
nsM
isce
llane
ous
Adm
inis
trat
ive
Dep
artm
enta
lCe
ntra
lD
onor
fund
ed e
xpen
ditu
re fo
r spe
cial
pro
ject
s O
ther
pro
ject
s Co
mm
erci
al o
pera
tions
FOR
THE
YEA
R BE
FORE
LO
SS O
N E
XCH
AN
GE
FIN
AN
CE C
OST
S, D
EPRE
CIAT
ION
, PEN
SIO
N P
LAN
S A
ND
PO
ST-E
MPL
OYM
ENT
MED
ICA
L BE
NEF
ITS
FOR
THE
YEA
R BE
FORE
DEP
RECI
ATIO
N,
PEN
SIO
N P
LAN
S A
ND
PO
ST-E
MPL
OYM
ENT
MED
ICA
L BE
NEF
ITS
MED
ICA
L BE
NEF
ITS
(DEF
ICIT
)/SU
RPLU
S, B
EIN
G T
OTA
L
CO
MPR
EHEN
SIVE
(LO
SS)/
INCO
ME
FOR
THE
YEA
R
5,62
6,11
25,2
012,
427,
826
55,3
6314
,016
41,9
5842
3,67
08,
614,
144
209,
891
8,40
4,25
3
1,09
3,10
65,
460,
561
2,56
5,36
9
9,11
9,03
6
714,
783
80,1
67
85,4
85
880,
435
920,
005
681,
573
2,48
2,01
3
- - - -
UG
C
July
2013
$’00
388,
789
811,
465
1,20
0,25
4
1,20
0,25
4
388,
789
749,
376
1,13
8,16
5
62,0
89
4,32
7
130
57,6
32
57,6
32
- - - - - - - - - - - - - -
Spec
ial a
ndO
ther
Pr
ojec
tsJu
ly20
13$’
000
Not
es
19 17 20 21
18(c
)(iv)
13
665,
334
665,
334
665,
334
519,
942
519,
942
145,
392
28,8
99
116,
493
116,
493
- - - - - - - - - - - - - - -
(
)
Hal
ls o
f Re
side
nce
July
2013
$’00
1,09
8,16
5
1,09
8,16
5
1,09
8,16
5
1,03
5,19
21,
035,
192
62,9
73 46
1,62
7
61,3
00
61,3
00
- - - - - - - - - - - - - - -
Com
mer
cial
O
pera
tions
July
2013
$’00
98,4
53
98,4
53
98,4
53
55,4
89
55,4
89
42,9
64 18
42,9
46
42,9
46
Dep
artm
enta
l Fu
nds
Cons
ulta
tion
July
2013
$’00
1,77
4,09
1
1,77
4,09
1
1,77
4,09
1
542,
705
542,
705
1,23
1,38
6 25
1,23
1,36
1
137,
595
1,09
3,76
6
Dep
artm
enta
l Fu
nds
- Oth
er
July
2013
$’00
(
)
(
)
(
)
(
)
(
)
(
)
(
)
(
)
(
)
(
)
(
)
(
)
(
)
(
)
(
)
5,62
6,11
25,2
012,
427,
826
388,
789
2,73
9,37
214
,016
1,80
5,45
742
3,67
013
,450
,441
209,
891
13,2
40,5
50
1,09
3,10
65,
460,
561
2,56
5,36
938
8,78
91,
347,
570
1,55
5,13
412
,410
,529
830,
021
84,5
40
116,
184
629,
297
920,
005
819,
168
1,10
9,87
6
(
)
(
)
(
)
(
)
(
)
(
)
TOTA
L FU
ND
S
July
2013
$’00
5,29
0,24
9
25,2
002,
039,
285
537,
259
2,79
4,61
148
,110
1,47
6,07
934
9,73
512
,560
,528
141,
090
12,4
19,4
38
1,01
3,75
25,
082,
807
2,05
4,95
453
7,25
91,
379,
882
1,34
2,80
711
,411
,461
1,00
7,97
7
4,55
8
246,
665
756,
754
739,
550
580,
235
916,
069
(
)
(
)
(
)
TOTA
L FU
ND
S
July
2012
$’00
The
acco
mpa
nyin
g no
tes
form
an
inte
gral
par
t of t
he fi
nanc
ial s
tate
men
ts.
- - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - -
15
Acco
unts
201
3
The University of the West Indies, Mona Campus
Statement of Changes in Equity | for the Year Ended July 31, 2013
Bala
nces
as
at Ju
ly 3
1, 2
011
Surp
lus,
bein
g to
tal c
ompr
ehen
sive
inco
me
for
Tran
sfer
- ot
her
Adju
stm
ents
for n
et c
hang
es o
n st
aff
Bala
nces
as
at Ju
ly 3
1, 2
012
Defi
cit,
bein
g to
tal c
ompr
ehen
sive
loss
for
Tran
sfer
- ot
her
Adju
stm
ents
for n
et c
hang
es o
n st
aff
Bala
nces
as
at Ju
ly 3
1, 2
013
the
year
revo
lvin
g lo
an fu
nd
the
year
revo
lvin
g lo
an fu
nd
1,76
3,97
8
1,76
3,97
8
1,76
3,97
8
- - - - - -
Capi
tal
Rese
rves
$’00
849,
364
10,3
21
859,
685
9,23
1
868,
916
Gen
eral
Re
serv
es
$’00
2,29
2,32
2
1,37
9,26
631
4,68
6
3,35
6,90
2
1,37
2,13
6
763
4,72
9,80
1
Dep
artm
enta
l Fu
nds
$’00
1,70
1,55
3
463,
197
314,
686
10,3
21
1,86
0,38
5
2,48
2,01
2
4,34
2,39
7
UG
C Fu
nds
$’00
3,20
4,11
1
916,
069
4,12
0,18
1,10
9,87
6
763
9,23
1
3,02
0,29
8
Tota
l Fu
nds
$’00
Accu
mul
ated
Fun
ds
(
)
- - - -
- -
- -
- -
(
)
(
)
(
)
(
)
(
)
(
)
(
)
The
acco
mpa
nyin
g no
tes
from
an
inte
gral
par
t of t
he fi
nanc
ial s
tate
men
ts.
16
Acco
unts
201
3
CASH FLOWS FROM OPERATING ACTIVITIES(Deficit)/surplus for the year Adjustments:
CASH FLOWS FROM INVESTING ACTIVITIES
(Increase)/decrease in current assets
Increase/(decrease) in current liabilities
Interest expenseProvision for impairment lossesDepreciationEmployee benefits obligationUnrealized loss/(gain) on foreign exchangeAmortization of capital grants Transfers to capital grantsGain on sale of property, plant and equipmentInterest Income
Accounts receivableDue from related partiesInventories
Due to related parties Accounts payable and accruals
Interest received Additions to property, plant & equipmentProceeds of sale of property, plant & equipmentInvestments, netLong-term receivables, netInterest in subsidiaries
Net cash provided by operating activities
Net cash used by investing activities
1,109,876
53,24775,562
819,168733,647
62,51230,283
3,36819,086
581,523
626,106236,641
6,146
9,121438,629
142,138
19,0862,023,003
4,043151,951
46,99420,803
1,821,732
916,069
213,782195,072580,235932,806
62,03827,261
259,755252
48,110924,808
183,983200,344
883
438,45333,413
1,781,884
53,2744,183,955
252820,427245,197
13,595
3,078,400
-( )
( )( )( )
( )
( )
( )
( ) ( )
( )
( )( )
( )
( )
( ) ( )
( )
( ) ( )
2013$’000
2012$’000
Notes
2124(i)13
1717
13
*
The University of the West Indies, Mona Campus
Statement of Cash Flows | for the Year Ended July 31, 2013
17
Acco
unts
201
3
209,8916,2621,127
373,232907,760934,829
6,752
1,667,361
12,233
132,555
210,419
330,741
141,0901,172
153,580390,477142,500
1,742,861144,734
1,336,488
39,972
2,113
172,560
210,419
*2013$’000
2012$’000
CASH FLOWS FROM FINANCING ACTIVITIES
NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS EFFECT OF EXCHANGE RATE MOVEMENT ON CASH
CASH AND CASH EQUIVALENTS AT THE
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR
The accompanying notes form an integral part of the financial statements.* After reclassifications to conform to 2013 presentation.
AND CASH EQUIVALENTS
BEGINNING OF THE YEAR
Capital grantsEndowment fundsSpecial projects advances, netLong-term liabilities, netProceeds of short-term loans, netProceeds of short-term loansInterest paid
Net cash provided by financing activities
Notes
1715
4
( )
( )
( )
( ) ( )
( )( )( )
( )
The University of the West Indies, Mona Campus
Statement of Cash Flows cont’d | for the Year Ended July 31, 2013
18
Acco
unts
201
3
IDENTIFICATION AND PRINCIPAL ACTIVITIES
The University of the West Indies - Mona Campus (“UWI Mona”) is located at Mona, Kingston, Jamaica. UWI Mona is one of the four main Campuses of the University, the other three being Cave Hill in Barbados, St. Augustine in Trinidad and Tobago and the Open Campus with operations in all seventeen Caribbean nations.
The principal activities of UWI Mona are the provision of a place of education, learning and research, in order to secure the advancement of knowledge and the diffusion and extension of arts, sciences and learning throughout the Caribbean. Activities ancillary to the principal activities include rental of student housing, other rentals and book-sales.
BASIS OF PRESENTATION
(a)
1.
2.
Statement of compliance:
The financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”), and interpretations as issued by the International Accounting Standards Board.
New, revised and amended standards and interpretations that became effective during the year
Certain new, revised and amended standards and interpretations which were in issue came into effect for the current financial year. The adoption of these standards, amendments and interpretations did not have any impact on amounts and disclosures in the financial statements.
New, revised and amended standards and interpretations that are not yet effective
At the date of authorization of the financial statements the following new, revised and amended standards and interpretations, which were in issue, were not yet effective and had not been adopted early by UWI Mona. Those standards and interpretations that management considers relevant to UWI Mona are as follows:
IFRS 9, Financial Instruments, is effective for annual reporting periods beginning on or after January 1, 2015. The standard retains but simplifies the mixed measurement model and establishes two primary measurement categories for financial assets: amortised cost and fair value. It eliminates the existing IAS 39 categories of held to maturity, available-for-sale and loans and receivables. For an investment in an equity instrument which is not held for trading, the standard permits an irrevocable election, on initial recognition, to present all fair value changes from the investment in other comprehensive income. The standard includes guidance on classification and measurement of financial liabilities designated as fair value through profit or loss and incorporates certain existing requirements of IAS 39 Financial Instruments: Recognition and Measurement on the recognition and de-recognition of financial assets and financial liabilities.
The University of the West Indies, Mona Campus
Notes to the Financial Statements | for the Year Ended July 31, 2013
19
Acco
unts
201
3
Basis of presentation (cont’d)
(a)
2.
Statement of compliance (cont’d):
New, revised and amended standards and interpretations that are not yet effective (cont’d)
IFRS 10, Consolidated Financial Statements (effective for annual reporting periods beginning on or after January 1, 2013) supersedes IAS 27 Consolidated and Separate Financial Statements and provides a single model to be applied in the control analysis for all investees, including entities that currently are Special Purpose Entities. The consolidation procedures are carried forward from IAS 27 (2008).
IFRS 12, Disclosure of Interest in Other Entities (effective for annual reporting periods beginning on or after January 1, 2013) contains disclosure requirements for entities that have interests in subsidiaries, joint arrangements, associates and/or unconsolidated structured entities. These required disclosures aim to provide information to enable users to evaluate the nature of, and risks associated with, an entity’s interests in other entities and the effects of those interests on the entity’s financial position, financial performance and cash flows.
IFRS 13, Fair Value Measurement, (effective for annual reporting periods beginning on or after January 1, 2013) replaces the fair value measurement guidance contained in individual IFRSs with a single source of fair value measurement guidance. It defines fair value, establishes a framework for measuring fair value and sets out disclosure requirements for fair value measurements. IFRS 13 explains ‘how’ to measure fair value when it is required or permitted by other IFRSs. IFRS 13 does not introduce new requirements to measure assets or liabilities at fair value, nor does it eliminate the practicability exceptions to fair value measurements that currently exist in certain standards. It defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, i.e. an exit price.
IFRS 10, Consolidated Financial Statements, which is effective for annual reporting periods beginning on or after January 1, 2013, introduces a new approach to determining which investees should be consolidated. It was issued as part of a suite of consolidation and related standards, also replacing existing requirements for joint ventures (now Joint Arrangements) and making limited amendments in relation to associates. IFRS 10 supersedes IAS 27, Consolidated and Separate Financial Statements, and SIC-12, Consolidation – Special Purpose Entities, and provides a single model to be applied in the control analysis for all investees, including entities that currently are Special Purpose Entities (SPEs) in the scope of SIC-12. An investor controls an investee when (i) it is exposed, or has rights, to variable returns from its involvement with the investee, (ii) has the ability to affect those returns through its power over the investee and (iii) there is a link between power and returns.
The University of the West Indies, Mona Campus
Notes to the Financial Statements | for the Year Ended July 31, 2013
20
Acco
unts
201
3
Basis of presentation (cont’d)
(a)
(b)
(c)
2.
Statement of compliance (cont’d):
New, revised and amended standards and interpretations that are not yet effective (cont’d)
UWI Mona is assessing the impact these new, revised and amended standards and interpretations will have on the financial statements when they become effective.
Basis of measurement:
The financial statements are prepared under the historical cost basis.
Functional and presentation currency:
These financial statements are presented in Jamaica dollars, except where otherwise indicated, which is the functional currency of UWI Mona.
Improvements to IFRS 2009-2011 cycle contain amendments to certain standards and interpretations and are effective for accounting periods beginning on or after January 1, 2013. The main amendments applicable to UWI Mona are as follows:
-
-
-
IAS 1, Presentation of Financial Statements, is amended to clarify that only one comparative period, which is the preceding period, is required for a complete set of financial statements. IAS 1 requires the presentation of an opening statement of financial position when an entity applies an accounting policy retrospectively or makes a retrospective restatement or reclassification. IAS 1 has been amended to clarify that (a) the opening statement of financial position is required only if a change in accounting policy, a retrospective restatement or a reclassification has a material effect upon the information in that statement of financial position; (b) except for the disclosures required under IAS 8, notes related to the opening statement of financial position are no longer required; and (c) the appropriate date for the opening statement of financial position is the beginning of the preceding period, rather than the beginning of the earliest comparative period presented.
IAS 19, Employee Benefits, has been amended to require all actuarial gains and losses to be recognised immediately in other comprehensive income. This change will remove the corridor method and eliminate the ability of entities to recognise all changes in the defined-benefit obligation and in plan assets in profit or loss. The expected return on plan assets recognised in profit or loss is to be calculated based on the rate used to discount the defined-benefit obligation. The amendment also includes changes to the definitions and disclosure requirements in the current standard.
IAS 16, Property, Plant and Equipment, is amended to clarify that the definition of ‘property, plant and equipment’ in IAS 16 is now considered in determining whether spare parts, standby equipment and servicing equipment should be accounted for under the standard. If these items do not meet the definition, then they are accounted for using IAS 2 Inventories.
The University of the West Indies, Mona Campus
Notes to the Financial Statements | for the Year Ended July 31, 2013
21
Acco
unts
201
3
Basis of presentation (cont’d)
(d)
2.
Use of estimates, assumptions and judgments:
The preparation of the financial statements in conformity with IFRS requires management to make estimates, assumptions and judgments that affect the reported amounts of, and/or disclosures relating to, assets, liabilities, contingent assets and contingent liabilities at the reporting date and the income and expenses for the year ended. Actual amounts could differ from those 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 and future periods, if the revision affects both periods.
Judgements made by management in the application of IFRS that have a significant effect on the financial statements and estimates with a significant risk of material adjustment in the next financial year are discussed below:
(i)
(ii)
Allowance for impairment losses on receivables:
In determining amounts recorded for impairment losses on receivables in the financial statements, management makes judgements regarding indicators of impairment, that is, whether there are indicators that suggest there may be a measurable decrease in the estimated future cash flows from receivables, for example, default and adverse economic conditions. Management also makes estimates of the likely estimated future cash flows of impaired receivables as well as the timing of such cash flows. Historical loss experience is applied where indicators of impairment are not observable on individual significant receivables with similar characteristics, such as credit risks.
Pension and other post-retirement benefits:
The amounts recognised in UWI Mona’s statement of financial position and surplus or deficit for pension and other post-employment benefits are determined actuarially using several assumptions. The primary assumptions used in determining the amounts recognised include expected long-term return on plan assets, the discount rate used to determine the present value of estimated future cash flows required to settle the pension and other post-retirement obligations and the expected rate of increase in medical costs for post-employment medical benefits.
The expected return on plan assets considers the long-term returns, asset allocation and future estimates of long-term investment returns. The discount rate is determined based on the estimate of yield on long-term government securities that have maturity dates approximating the terms of UWI Mona’s obligation; in the absence of such instruments in Jamaica, it has been necessary to estimate the rate by extrapolating from the longest-tenor security on the market. The estimate of expected rate of increase in medical costs is determined based on inflationary factors. Any changes in the foregoing assumptions will affect the amounts recorded in the financial statements for these obligations.
The University of the West Indies, Mona Campus
Notes to the Financial Statements | for the Year Ended July 31, 2013
22
Acco
unts
201
3
Basis of presentation (cont’d)
(e)
significant accounting policies
(a)
(b)
(c)
(d)
2.
3.
Going concern basis:
The preparation of the financial statements in accordance with IFRS assumes that UWI Mona will continue in operational existence for the foreseeable future. This means, inter alia, that the statement of financial position and comprehensive income assume no intention or necessity to liquidate UWI Mona or curtail the scale of its operations. This is commonly referred to as the going concern basis. Management is of the view that the going concern basis continues to be appropriate in the preparation of the financial statements.
Cash and cash equivalents
Cash and cash equivalents comprise cash and bank balances and include short-term deposits and other monetary investments with maturities of three months or less from the acquisition date. Bank overdrafts that are repayable on demand and form an integral part of UWI Mona’s cash management activities are included as a component of cash and cash equivalents.
Investments
(i)
(ii)
Accounts receivable
Trade and other receivables are stated at their cost less impairment losses.
Interest in subsidiaries
UWI Mona’s interest in subsidiaries is carried at cost less impairment losses.
Loans and receivables
Loans and receivables are non-derivative financial instruments with fixed or determinable payments that are not quoted in an active market and are measured at amortized cost using the effective interest method, less any impairment losses.
Resale agreements
Resale agreements are short-term transactions whereby an entity buys securities and simultaneously agrees to resell them on a specified date and at a specified price.
Although the security is delivered to the “buyer” at the time of the transaction, title is not actually transferred unless the counterparty fails to repurchase the securities on the date specified. Resale agreements are accounted for as short-term collateralised lending.
The difference between the purchase and sale considerations is recognised on an accrual basis over the period of the transaction, using the effective interest method, and is included in interest income.
The University of the West Indies, Mona Campus
Notes to the Financial Statements | for the Year Ended July 31, 2013
23
Acco
unts
201
3
SIGNIFICANT ACCOUNTING POLICIES (cont’d)
(e)
(f)
(g)
(h)
3.
Inventories
Inventories are stated at the lower of cost and net realizable value. Cost is determined on the weighted average basis.
Accounts payable
Trade and other payables are stated at amortized cost.
Property, plant and equipment and depreciation
(i)
(ii)
(iii)
Employee benefits
Pensions and other post-employment assets and obligations included in these financial statements have been actuarially determined by a qualified independent actuary, appointed by management. The appointed actuary’s report outlines the scope of the valuation and the actuary’s opinion. The actuarial valuations are conducted in accordance with IAS 19, and the financial statements reflect the post-employment benefit assets and obligations as computed by the actuary. In carrying out their activity, the auditors rely on the work of the actuary and the actuary’s report.
Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. Costs include expenditure that is directly attributable to the acquisition of the assets. The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to UWI Mona and its cost can be reliably measured. The cost of day-to-day servicing of property, plant and equipment is recognised in surplus or deficit as incurred
Property, plant and equipment, with the exception of freehold land and work-in-progress on which no depreciation is provided, are depreciated on the straight-line basis at annual rates estimated to write down the assets to their residual values over their expected useful lives. The depreciation rates are as follows:
BuildingsFurniture and office equipmentMotor vehiclesComputers and other electronic equipmentLibrary books
Depreciation methods, useful lives and residual values are reassessed annually.
Property, plant and equipment donated is capitalised at estimated fair value, usually the cost of the item if it was purchased, and credited to capital grants. Annual transfers, equivalent to depreciation charged on property, plant and equipment funded by such grants, are made to surplus or deficit.
2.50%10%20%
10 - 33.33%20%
The University of the West Indies, Mona Campus
Notes to the Financial Statements | for the Year Ended July 31, 2013
24
Acco
unts
201
3
SIGNIFICANT ACCOUNTING POLICIES (cont’d)
(h)
3.
Employee benefits (cont’d)
Employee benefits include current or short-term benefits such as salaries, NIS contributions paid, annual vacation, and non-monetary benefits such as sick leave medical care and housing; post-employment benefits such as pensions and medical care; other long-term employee benefits such as sabbatical leave, long service benefits and termination benefits.
(i)
(ii)
General benefits
Employee benefits that are earned as a result of past or current service are recognized in the following manner: Short-term employee benefits are recognized as a liability, net of payments made, and charged as expense. The expected cost of vacation leave that accumulates is recognized when the employee becomes entitled to the leave. Post employment benefits are accounted for as described in (ii) and (iii) below. Other long-term benefits and termination benefits are not considered material and are expensed as incurred.
Pension benefits
(1)
(2)
Defined-contribution plansUWI Mona provides for pension benefits for retired employees through two defined contribution plans. Its obligation to contribute to the defined contribution pension plans in accordance with the rules of the plans is recognized as an expense in surplus or deficit as the contributions fall due. In the case of one of the two plans, that for academic and senior administrative staff - Federated Superannuation Scheme for Universities [see note 18 (a)] - UWI Mona, on the basis of commitments made, has an obligation to supplement the pensions.
Defined-benefit effect of supplementation arrangementsThe effect of UWI Mona undertaking to supplement basic pensions to two-thirds final salary under certain conditions (note 18) is to create an obligation consistent with that for a defined benefit plan. Therefore, this obligation for the supplementation arrangements is determined and accounted for in the same way as the obligation arising under a defined-benefit plan.
UWI Mona’s net obligation in respect of its undertaking to supplement pensions is calculated by estimating the amount of future supplementation benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine the present value, and the fair value of any plan assets, (in the case of UWI Mona, is $nil), is deducted from it. The discount rate used is the yield at reporting date on long-term government instruments that have maturity dates approximating the terms of UWI Mona’s pension obligations. The calculation is performed by a qualified actuary using the projected unit credit method.
If and when benefits payable under the supplementation arrangements are improved, the portion of the increased benefit that relates to past service by employees is recognized as an expense in surplus or deficit on a straight-line basis over the average service period remaining until the benefits become vested. To the extent that the benefits vest immediately, the expense is recognized immediately.
The University of the West Indies, Mona Campus
Notes to the Financial Statements | for the Year Ended July 31, 2013
25
Acco
unts
201
3
SIGNIFICANT ACCOUNTING POLICIES (cont’d)
(h)
(i)
3.
Employee benefits (cont’d)
(ii)
(iii)
Donations for designated projects
UWI Mona receives funding from donors for “special projects” and “other projects”.
(i)
Pension benefits (cont’d)
(2)
Post-employment medical care
UWI Mona also has an obligation to provide certain post-employment medical benefits. The obligation to fund these future benefits is actuarially determined and accounted for in the same way as the obligation to supplement basic pensions.
Donations that are governed by donor-imposed stipulations, which stipulations must be complied with to the satisfaction of the donor for the project expenditure to be approved, are generally for projects undertaken by the various departments and are referred to as special projects advances (note 14). Such donations are accounted for as follows:
(a)
(b)
Defined-benefit effect of supplementation arrangements (cont’d)To the extent that any cumulative unrecognized actuarial gain or loss exceeds ten percent (10%) of the greater of the fair value of plan assets and the present value of the defined benefit obligation, that portion is recognized in surplus or deficit over the expected average remaining working lives of the employees participating in the plan. Otherwise, the actuarial gain or loss is not recognized.
Where the calculation results in a benefit to UWI Mona, an asset is recognized only to the extent of the net total of (1) any unrecognized actuarial losses and past service costs, and (2) the present value of any future refunds from the plan or reductions in future contributions to the plan. However, the supplementation plan is unfunded, i.e., a pay-as-you-go plan, and, accordingly, there are no contributions and therefore no plan assets at this time.
Donations received in advance of project expenditure
Donations received in advance of expenditure are deferred, and are shown in the statement of financial position as “Unexpended funds for special projects”. When funds are spent in accordance with the donor’s stipulations, the amount is charged off as “Special projects expenses” or, if applicable, as property, plant and equipment. An equivalent amount is then transferred from “Unexpended funds for special projects” to “Special projects income” or, if applicable, “capital grants”.
Project expenditure made in advance of receipt of donations pledged
Project expenditure made in accordance with the donor’s stipulations in advance of receipt of donations pledged is accounted for as “Special projects receivables” in anticipation of reimbursem*nts. The amount is reflected in the statement of comprehensive income as “Special project expenses” or, if applicable, as property, plant and equipment, with an equivalent sum reflected as “Special projects income” or, if applicable, capital grants.
The University of the West Indies, Mona Campus
Notes to the Financial Statements | for the Year Ended July 31, 2013
26
Acco
unts
201
3
SIGNIFICANT ACCOUNTING POLICIES (cont’d)
(i)
(j)
(k)
3.
Donations for designated projects (cont’d)
(ii)
(iii)
Capital grants
Capital grants comprise the following:
(i)
(ii)
The amounts meeting the condition include:
(i)
(ii)
For each reporting period, an amount equivalent to the depreciation charge on the relevant property, plant and equipment for the period is transferred from capital grants as a credit to income.
Revenue recognition
(i)(ii)(iii)
Donations that are not subject to donor-imposed stipulations such as those at (a) above, are accounted for as “other projects” income.
UWI Mona charges administrative and common service fees for receiving and disbursing these funds; such fees are credited to income.
estimated fair value of property, plant and equipment donated to UWI Mona [note 3 (g) (iii)]; and
amounts granted to UWI Mona subject to conditions that must be met, the primary condition being that they must be used for the acquisition or construction of property, plant and equipment.
sums included in the biennial budgets for the repayment of the principal of loans taken out to purchase or construct or otherwise acquire property, plant and equipment and funded by contributions from the contributing governments; and
sums from donors other than the contributing governments referred to above, where the donors impose such a condition.
Government contributions are recognized as income when invoiced.Tuition fees are recognized over the period of instruction for which the fees are paid.Interest income is recorded on the accrual basis, using the effective interest method.
The University of the West Indies, Mona Campus
Notes to the Financial Statements | for the Year Ended July 31, 2013
27
Acco
unts
201
3
SIGNIFICANT ACCOUNTING POLICIES (cont’d)
(l)
(m)
3.
Consolidation
UWI Mona has not consolidated its financial position, results of operations and cash flows with those of its wholly-owned subsidiaries, Mona Informatix Limited (MIL), Mona School of Business Limited (MSBM) and Universal Media Company (UMC), as the amounts for the subsidiaries were considered immaterial to the financial statements. Information on the subsidiaries is listed below.
Summary information applicable to these subsidiaries, based on draft financial statements as at July 31, 2013 and 2012 are as follows:
MIL MSBMUMC
Impairment
The carrying amounts of UWI Mona’s assets are reviewed at each reporting date to determine whether there is objective evidence of impairment. If any such indication exists, an impairment loss is recognized based on the asset’s estimated recoverable amount.
The recoverable amount of UWI Mona’s receivables is calculated as the present value of expected future cash flows, discounted at the original effective interest rate inherent in the asset. Receivables with a short duration are not discounted.
If, in a subsequent period, the amount of an impairment loss decreases and the decrease can be linked objectively to an event occurring after the write-down, the write-down is reversed through surplus or deficit.
Net assets/(liabilities)
13,681288,740
45,874256,547
10,11320,256
6,2123,931
64,313120,188178,636
5,865
7,47315,157
8,57031,200
2013$’000
( ) ( )
( )
( ) ( )( )
( )
( )
Net profit/(loss)2012$’000
2013$’000
2012$’000
Name of subsidiary
Mona Informatix LimitedMona School of Business
Universal Media Company
Principal activity
Provision of data processingProvision of managementeducation to private and publicsectors; researching of management-related topics and the provision ofconsultancy services to the private andpublic sectors and international bodies
Provision of radio broadcast and communication services.
Percentage ownership (%)2013100100
100
2012100100
100
The University of the West Indies, Mona Campus
Notes to the Financial Statements | for the Year Ended July 31, 2013
28
Acco
unts
201
3
SIGNIFICANT ACCOUNTING POLICIES (cont’d)
(n)
(o)
3.
Foreign currency translations
(i)
(ii)
(iii)
(iv)
Related parties
A related party transaction is a transfer of resources, services or obligations between related parties, regardless of whether a price is charged.
A related party is a person or entity that is related to the entity that is preparing its financial statements (referred to in IAS 24, Related Party Disclosures as the “reporting entity”) in this case UWI Mona.
(i)
(ii)
Transactions in foreign currencies during the year are translated at the approximate rate ruling at the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies are translated at the exchange rates ruling at the reporting date. Non-monetary assets and liabilities that are denominated in foreign currencies and are carried at fair value are translated to the functional currency at the exchange rates ruling at the dates that the fair values are determined.
Foreign currency translation gains and losses are reported in surplus or deficit.
Gains and losses arising from conversion of inter-campus balances and government accounts are included in surplus or deficit.
A person or a close member of that person’s family is related to a reporting entity if that person:(a) (b) (c)
An entity is related to a reporting entity if any of the following conditions applies:(a)
(b)
(c)(d)
(e)
(f )(g)
has control or joint control over the reporting entity;has significant influence over the reporting entity; oris a member of the key management personnel of the reporting entity or of a parent of the reporting entity.
The entity and the reporting entity are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others);One entity is an associate or joint venture of the reporting entity (or an associate or joint venture of a member of a group of which the reporting entity is a member).Both entities are joint ventures of the same third party;One entity is a joint venture of a third entity and the reporting entity is an associate of the third entity;The entity is a post-employment benefit plan established for the benefit of employees of either the reporting entity or an entity related to the reporting entity.The entity is controlled, or jointly controlled, by a person identified in (i); andA person identified in (i)(a) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity).
The University of the West Indies, Mona Campus
Notes to the Financial Statements | for the Year Ended July 31, 2013
29
Acco
unts
201
3
SIGNIFICANT ACCOUNTING POLICIES (cont’d)
(p)
(q)
CASh ANd CASh EqUIvALENTS
Cash on hand and imprest accountsBank current accountsSavings and overnight deposit accountsFixed-term deposits
Bank overdraft
ShORT-TERM INvESTMENTS
Mortgages Resale agreements GOJ Local Registered Stocks
Held as follows:
3.
4.
5.
Interest-bearing borrowings:
Interest-bearing borrowings are recognized initially at cost. Subsequent to initial recognition, interest-bearing borrowings are stated at amortized cost, with any difference between cost and redemption value being recognized in surplus or deficit over the period of the borrowing to determine the effective interest rate.
Finance costs:
Finance costs comprise significant bank charges and interest on borrowings, which is accounted for using the effective interest method.
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised as property, plant and equipment.
Restricted funds:
Endowment funds (note 15)Net unexpended donations for special projects, scholarships and prizes
38469,772
9,223479,033
296,540
182,493479,033
12323,797
9,423333,232
290,278
42,954333,232
2013$’000
2012$’000
2013$’000
2012$’000
2,714296,638
8,775 41,558349,685
18,944330,741
2013$’000
2,323141,696
14,87158,981
217,8717,452
210,419
2012$’000
2.754
2 - 5.5
27.75
Interest Rate%-
( ) ( )
The University of the West Indies, Mona Campus
Notes to the Financial Statements | for the Year Ended July 31, 2013
30
Acco
unts
201
3
SHORT-TERM INVESTMENTS (cont’d)
(i)
(ii)
RELATED PARTIES
(a)
(b)
(c)
ACCOUNTS RECEIVABLE
Due from Governments [see (a) on page 32]Student accounts [note 24(i)] Staff loans and advances Withholding tax on investments Third party receivables PrepaymentsCredit Union revolving loansOther accounts receivable and deposits [see (b) and (c) on page 32]
Less: provision for impairment losses [note 24(i)]
5.
6.
7.
The fair value of GOJ Local Registered Stocks and securities collateralising resale agreements amounted to $360,848,000 (2012: $478,472,000).
In the prior year, of the amount held under resale agreements, $150 million was hypothecated as security for a loan from The Bank of Nova Scotia Jamaica Limited [note 10].
Due from related parties:
Due to related parties:
The above balances are unsecured, interest free and payable within twelve months of the reporting date.
Key management personnel compensation paid during the year was as follows:
Salaries and short-term employee benefits
University CentreCave Hill CampusOpen CampusSt. Augustine Campus
University CentreCave Hill CampusOpen Campus
5,18243,306
121,9188,847
179,253
454,40555,521
5,869515,795
43,473
258,111677,830
40,69069,13196,431
9,832152,463345,776
1,650,264118,719
1,531,545
154,34564,066
188,2889,195
415,894
425,04874,027
7,599506,674
62,288
492,099822,328
35,50672,13696,65874,195
161,694562,607
2,317,223194,281
2,122,942
2013$’000
2012$’000
2013$’000
2012$’000
2013$’000
2012$’000
( ) ( )
The University of the West Indies, Mona Campus
Notes to the Financial Statements | for the Year Ended July 31, 2013
31
Acco
unts
201
3
ACCOUNTS RECEIVABLE (cont’d)
(a)
(b)
(c)
(d)
INVENTORIES
General storesBookshop inventory
ACCOUNTS pAyABLE ANd ACCRUALS Trade payablesOther payables and accrualsAccrued staff benefits: Sabbatical leave Study and travel grant Book grant
ShORT-TERm LOANS
National Commercial Bank Jamaica Limited (NCB) (i)The Bank of Nova Scotia Jamaica Limited (BNS) (ii)
(i)
(ii)
7.
8.
9.
10.
This represents amounts due from contributing governments to UWI Mona.
This includes $368,090,000 (2012: $245,222,000) which represents the current portion of salary arrears due from the Government of Jamaica arising from wage agreements for the contract periods 2009/2010, 2010/2011 and 2011/2012 [see note 11(b)].
Included in other accounts receivable is $13,062,000 (2012: $25,030,000) representing project expenditure to be reimbursed by donors.
UWI Mona’s exposure to credit risk and impairment losses related to accounts receivable is disclosed in note 24(i).
This represents to a special arrangement with NCB, which includes a six month facility for which an application has been made to restructure as long-term finance to UWI Mona.
This was a secured loan from BNS under a revolving demand operating credit line. The applicable interest rate was 9% per annum, fixed for six months and was secured up to $150 million by hypothecation of a resale agreement with BNS [note 5(ii)].
21,79949,67671,475
1,123,020444,850
9,438355,178
42,7931,975,279
142,500142,500
-
28,51449,10777,621
1,440,825545,928
31,909402,418
39,3222,460,402
1,050,260
1,050,260-
2013$’000
2012$’000
2013$’000
2012$’000
2013$’000
2012$’000
The University of the West Indies, Mona Campus
Notes to the Financial Statements | for the Year Ended July 31, 2013
32
Acco
unts
201
3
Long-term receivabLes
Tuition fees - Medical Sciences students (a)Retroactive salaries receivable (b)
Less: current portion [see note 7(b)]
(a)
(b)
interest in sUbsiDiaries
Shares at costLoan receivables (see note on page 34)Current account Net interest subsidy
Shares at cost Loan receivables (see note on page 34)Current account Net interest subsidy
11.
12.
This relates to a special arrangement with the Faculty of Medical Sciences wherein students are granted extended payment terms in the full fee paying programme.
This relates to salary arrears due from the Government of Jamaica arising from wage agreements for the contract period 2009/2010, 2010/2011 and 2011/2012. Of the total, an amount of $489,083,000 (2012: $Nil) relates to the contract period 2011/2012 and is to be settled over a period of 48 months in four equal installments. The current portion comprises $245,914,000 (2012: $245,222,000) in respect of the contract periods 2009/2010 and 2010/2011 and $122,176,000 (2012: $Nil) in respect of contract period 2011/2012. [See note 16(k)].
10039,194
798
40,092
MIL$’000
(c)
-
79,913124,181
31,07166,050
169,115
Total$’000
79,69751,23526,80847,518
110,222
UMC$’000
(b)
11633,752
3,46518,53218,801
MSBM$’000
(a)
10039,194
1,408
40,702
MIL$’000
(c)
-
79,913115,746
60,30966,050
189,918
Total$’000
79,69751,23551,74247,518
135,156
UMC$’000
(b)
11625,317
7,15918,53214,060
MSBM$’000
(a)
2013
2012
( ) ( ) ( )
( ) ( ) ( )
The University of the West Indies, Mona Campus
Notes to the Financial Statements | for the Year Ended July 31, 2013
45,684612,854658,538245,222413,316
44,438689,974734,412368,090366,322
2013$’000
2012$’000
( ) ( )
33
Acco
unts
201
3
INTEREST IN SUBSIDIARIES (cont’d)
(a)
(b)
(c)
12.
In accordance with an agreement dated June 14, 2002, between UWI Mona and Mona School of Business (MSBM), the loan receivable is due in installments over 20 years at an interest rate of five percent per annum with a moratorium of three years on the principal. The payment of interest commenced on August 1, 2002. If MSB’s finances at any point can allow for earlier settlement or larger instalments, this will be permitted without penalty. The balance is stated net of an imputed interest subsidy. The imputed interest is calculated using the discounted cash flow technique at an estimated market rate of interest of 22%, which was the rate at the date of receipt of loan funds.
In accordance with an agreement between UWI Mona and Universal Media Company Limited (UMC), the loan receivable is due in quarterly installments over 10 years at five percent per annum with a moratorium of two years, from April 30, 2006 through April 30, 2008, on the principal and interest. Repayment of principal and payment of interest did not commence on May 1, 2008 as scheduled.
By way of agreement dated May 14, 2010, UWI Mona took control of Universal Media Company (UMC) Limited resulting in UMC reverting to the status of a wholly owned subsidiary. A decision is still to be made on the loan receivable from this subsidiary.
Mona Informatix Limited (MIL) Limited is a wholly owned subsidiary of UWI Mona. The loan receivable from this subsidiary relates to contributions made by UWI Mona towards operations.
The University of the West Indies, Mona Campus
Notes to the Financial Statements | for the Year Ended July 31, 2013
34
Acco
unts
201
3
Cost
:
Dep
reci
atio
n:
Net
boo
k va
lues
:
July
31,
201
1Ac
quis
ition
s Tr
ansf
er fr
om W
IP
Dis
posa
lJu
ly 3
1, 2
012
Acqu
isiti
ons
Tran
sfer
from
WIP
Dis
posa
ls
July
31,
201
3
July
31,
201
1 Ch
arge
for y
ear
El
imin
ated
on
disp
osal
s Ju
ly 3
1, 2
012
Char
ge fo
r yea
r El
imin
ated
on
disp
osal
s
July
31,
201
3
July
31,
201
3
July
31,
201
2
13.
PRO
PERT
Y, P
LAN
T &
EQ
UIP
MEN
T
6,68
3,62
848
0,59
11,
006,
696
8,17
0,91
51,
312,
302
5,63
0,92
7 7115
,114
,073
1,37
6,54
718
9,97
1
1,56
6,51
836
3,54
934
41,
929,
723
13,1
84,3
506,
604,
397
Land
, pla
nt
and
build
ings
$’00
- -
(
)(
)
(
)
(
)
(
)
(
)(
)
(
)(
)
(
)
(
)
(
)
(
)(
)
(
)(
)
(
)(
)
1,48
9,46
843
9,90
4
20,3
951,
908,
977
454,
028
23,6
282,
339,
377
778,
491
187,
472
20,3
95
945,
568
223,
302
22,7
441,
146,
126
1,19
3,25
196
3,40
9
Furn
iture
&
office
equi
pmen
t
$’00
- -
234,
764
23,6
55
258,
419
12,7
94
8,66
326
2,55
176,
979
34,1
04
211,
083
28,5
338,
661
230,
955
31,5
9547
,336
Mot
or
vehi
cles
$’00
- - - -
1,82
0,50
221
3,37
48,
599
4,95
82,
037,
517
211,
764
14,8
092,
234,
472
1,61
3,97
514
7,45
24,
958
1,75
6,46
918
3,43
614
,747
1,92
5,15
8
309,
314
281,
048
Com
pute
r eq
uipm
ent
$’00
-
507,
071
32,2
12
539,
283
7,65
6
546,
939
393,
600
21,2
36
414,
836
20,3
48
435,
184
111,
755
124,
447
Libr
ary
book
s
$’00
- - - - - -
4,10
2,20
42,
994,
219
1,01
5,29
5
6,08
1,12
824
,458
5,63
0,92
7
474,
659
474,
659
6,08
1,12
8
Wor
k - i
n -
prog
ress
(WIP
)
$’00
- - - - - - - - -
14,8
37,6
374,
183,
955
25,3
5318
,996
,239
2,02
3,00
2
47,1
7120
,972
,070
4,33
9,59
258
0,23
525
,353
4,89
4,47
481
9,16
846
,496
5,66
7,14
6
15,3
04,9
2414
,101
,765
Tota
l
$’00
- -
Land
and
bui
ldin
gs in
clud
e la
nd a
t cos
t of $
386,
651,
000
(201
2: $
386,
651,
000)
.
The University of the West Indies, Mona Campus
Notes to the Financial Statements | for the Year Ended July 31, 2013
35
Acco
unts
201
3
Unexpended donations for special projects
Projects (a) Scholarships and prizes
Projects (a) Scholarships and prizes
(a)
(b)
endowment fUnds
Balance as at August 1 Disbursem*nts during the yearBalance as at July 31 (note 5)
14.
15.
This amount represents funds donated for projects being implemented by various departments of UWI Mona.
UWI Mona continues to meet obligations for funding of projects, scholarships and prizes as they become due.
Expenditure$’000
July 31, 2013$’000
July 31, 2012$’000
2013
Interest received$’000
New advances and
310,178336,632646,810
258,437207,033465,470
324,921323,016647,937
243,694220,649464,343
( )( )( )
359,465344,264703,729
Expenditure$’000
July 31, 2012$’000
July 31, 2011$’000
2012
Interest received$’000
New advances and
539,192357,287896,479
243,694220,649464,343
423,421233,672657,093
( )( )( )
296,5406,262
290,278
297,7121,172
296,540
2013$’000
2012$’000
( ) ( )
The University of the West Indies, Mona Campus
Notes to the Financial Statements | for the Year Ended July 31, 2013
36
Acco
unts
201
3
Long-term LiabiLities
(i)
(ii)
(a)
(b)
16.
Long-term loans:
United States Agency for
European UnionInter-American Development Bank
National Housing Trust Loan # 1National Housing Trust Loan # 2NCB Capital Markets LimitedDevelopment Bank of Jamaica (DBJ)
Current portion of long-term loansBalance carried forward
Other long-term liabilities: Trade CreditorsDue to Cave Hill CampusDue to UHWIRetroactive salariesAccrued vacation leave
Current portion of other long-term liabilities
Total long-term liabilities
In February 1977, a loan of US$8.5 million was granted to the University of the West Indies by USAID. The purpose of this loan was the construction of certain buildings and the provision of scholarships and training on three of its Campuses. This loan is repayable in sixty-one (61) half-yearly installments, which commenced in May 1987, and bears interest at the rate of 2% per annum for the first ten years, thereafter at 3% per annum. The principal outstanding attributable to UWI Mona at July 31, 2013 was US$630,000 (2011: US$777,000).
In March 1993, the European Union granted a loan to the University of €4,692,232, the allocation of which was as follows:---
The loan is repayable in 60 half-yearly installments, which commenced June 1, 2003, and bears interest at the rate of 1% per annum. The principal outstanding at July 31, 2013 was €1,205,719 (2012: €1,261,000).
International Development (USAID)
Bank (IDB)/ Caribbean Development Bank (CDB)
€1,764,796 to the Mona Campus;€1,640,246 to the St. Augustine/Mount Hope Campus; and€1,287,190 to the Cave Hill Campus.
31
3.4855
9.854.5
NilNilNilNil
Interest Rates%
(a)(b)
(c)(d)(e)(f )(g)
(h)(i)(j)
Note
64,050162,233
573,384529,964
1,718,6871,676,748
269,1724,994,238
556,2334,438,005
363,328111,041536,927689,974
779,1042,480,374
440,2292,040,1456,478,150
69,412138,075
630,508549,740
1,231,6561,945,000
4,564,391442,305
4,122,086
175,478129,547449,573612,854749,096
2,116,548308,683
1,807,8655,929,951
-
2013$’000
2012$’000
( )
( )
( )
( )
The University of the West Indies, Mona Campus
Notes to the Financial Statements | for the Year Ended July 31, 2013
37
Acco
unts
201
3
Long-term LiabiLities (cont’d)
(b)
(c)
(d)
(e)
(f )
16.
(cont’d)
The University also received a grant of €7,820,386 for the purpose of constructing student accommodations on three of its campuses and the Mount Hope Medical Complex.
In April 1992, the University of the West Indies entered into a loan agreement with Inter-American Development Bank (IDB) and the Caribbean Development Bank (CDB) to enhance the capacity of the University to respond to higher education needs in the fields of science and technology. The estimated total project cost was US$82.1 million. The loan is guaranteed by the Governments of Trinidad and Tobago, Jamaica and Barbados. This loan is repayable in thirty-two (32) semi-annual, consecutive and, in so far as possible, equal installments. Repayment commenced in May 2001, and the last installment is scheduled to be paid no later than April 7, 2017.
Interest accrues on the daily outstanding balance of the loan at a rate per annum for each semester determined by the cost of qualified borrowing for the preceding semester, plus a spread established by IDB. The balance outstanding attributable to UWI Mona at July 31, 2013 attributable to UWI Mona was US$5,642,000 (2012: US$7,054,000).
In April 2001, the National Housing Trust (“The Trust”) granted a loan of $584,800,458 to UWI Mona towards the construction of a new student residence, The Rex Nettleford Hall (“the Hall”). The loan shall be repaid from income earned from the operations of the Hall in semi-annual installments, over twenty five (25) years, at eight percent (8%) per annum on a graduated basis for nine (9) years, and then a fixed sum for the remaining years. The graduated loan repayments will increase by five percent (5%) for each of the first five (5) years of the repayment period. The agreement provides that the repayment of the loan principal commences after the expiration of the five (5) years. Interest is payable on a quarterly basis. With effect from July 1, 2012 the NHT Board approved a reduction in interest rate from 8% to 5% and repayment is set at a fixed amount of $4,201,643 per month to March 2028.
In June 2011, the National Housing Trust (NHT) granted a loan of $1,440,335,000 to UWI Mona towards the construction of new student accommodation at two sites on the Campus. The loan shall be repaid from income earned from the operations of the Halls in quarterly installments, over twenty five (25) years, at five percent (5%) per annum in accordance with a graduated payment mortgage basis. The agreement provides that the first installment of principal together with interest shall be due within three (3) months following the date of final disbursem*nt.
In February 2011, UWI Mona entered into an agreement with NCB Capital Markets Limited and National Commercial Bank Jamaica Limited for a J$2,100,000,000 loan facility towards the partial financing of the construction of a complex at the Mona Campus to house the Basic Medical Sciences Departments of the Faculty of Medical Sciences. The facility involves UWI Mona issuing promissory notes under the commercial paper transactions arranged by NCB Capital Markets Limited. There was a moratorium on the principal of 12 months following the issue date. The facility attracts a financing cost of 13.75% p.a. and was repayable quarterly on a calendar quarter basis. The finance cost is inclusive of the coupon payable on the notes, with the coupon fixed at 13.25%. The facility has a final maturity of 5 years inclusive of a 12 month moratorium and is based on a 5-year amortization schedule. With effect from August 1, 2012, the facility was restructured by reducing the interest rate on both tranches from 13.75% and 13.25%, respectively, to a single rate of 9.85% and extending the maturity of the notes from 2016 to 2019. The principal outstanding at July 31, 2013 was $1,408,448,000 (2012: $1,945,000,000). The remainder represents interest capitalized at the restructuring date.
The University of the West Indies, Mona Campus
Notes to the Financial Statements | for the Year Ended July 31, 2013
38
Acco
unts
201
3
Long-term LiabiLities (cont’d)
(g)
(h)
(i)
(j)
(k)
CapitaL grants
At beginning of year ReceiptsTransfersAmortisation (note 19)
At end of year
empLoyee benefits obLigation
The University operates two pension plans for its employees – one for academic and senior administrative staff, and the other for administrative and technical staff. In addition to pensions, certain post-employment health benefits are provided, primarily medical care.
16.
17.
18.
In December 2012, DBJ granted a loan of US$3,000,000 towards capital expenditure for the construction of a business process outsourcing facility and the purchase of related equipment. The repayment terms include a twelve (12) month moratorium on the principal and the principal amount due shall be repaid in United States Dollars in quarterly installments over ten (10) years. The loan shall be repaid at an annual rate of 4.5% and is secured by a debenture over fixed and floating assets of the business process outsourcing facility. The amount disbursed and outstanding as at July 31, 2013 amounted to US$2,649,000.
This represents long-term credit arrangements extended to UWI Mona by trade creditors. Interest is payable at a rate of 4.5% to one of the creditors and the balance is repayable over three years in 12 equal quarterly installments.
As at July 31, 2008, an amount of $185,068,000 was recorded as due to UWI Cave Hill Campus based on an agreement dated July 3, 2008. This relates to pension payments advanced by UWI Cave Hill Campus up to December 2004. Based on the agreement, the amount was equally divided amongst UWI Mona, the University Centre and UWI Cave Hill Campus and the amount herein is UWI Mona’s share. The terms of repayment have not been agreed.
This represents funds held on behalf of the University Hospital of the West Indies (UHWI) by UWI Mona for the purpose of upgrading the facilities at the hospital. The terms of repayment has not been agreed.
Consistent with an agreement made between the Government of Jamaica and its public sector workers, this represents salary arrears for the contract period 2009/2010 to 2010/2011 which will be paid over five (5) tranches. It also includes $122,176,000 for salary arrears for the contract period 2011/2012. Due to the nature of the arrangement, no interest has been imputed.
1,391,805209,891
30,283
1,571,413
-
1,018,221141,090259,755
27,261
1,391,805
2013$’000
2012$’000
( ) ( )
The University of the West Indies, Mona Campus
Notes to the Financial Statements | for the Year Ended July 31, 2013
39
Acco
unts
201
3
EmployEE bEnEfits obligation (cont’d)
(a)
(b)
(c)
18.
Plan for academic and senior administrative staffThe plan for the academic and senior administrative staff is the Federated Superannuation Scheme for Universities (FSSU), which is a UK-based defined-contribution plan and the assets are invested primarily through a UK-based investment management company and a small portion with two life insurance companies. Membership is compulsory for eligible staff members who are not engaged in short-term, part-time or special contracts. The plan requires compulsory, joint contributions of 15% of pensionable salaries (10% by UWI Mona as employer and 5% by members). Members also have the option of voluntarily contributing up to an additional 5% of pensionable salaries.
UWI Mona has committed itself to supplementing pensions under certain circ*mstances. Under the Supplementation Plan, UWI Mona is obligated to top up the pension of each retiring FSSU member to 2/3 final salary, provided the member had at least 35 years service (but proportionately less for shorter service in excess of ten years). If the pension derived from all the member’s FSSU investments is less than the level up to which supplementation is triggered, that is, 2/3 of final salary, UWI Mona must meet the pension shortfall. Any person who becomes a member of the FSSU plan on or after August 1, 2005, will not be eligible for supplementation. UWI Mona has honoured all cases of supplementation that have arisen.
Plan for administrative and technical staffThis is a defined-contribution plan funded by joint compulsory contributions of 15% of pensionable salaries (10% by the University as employer and 5% payable by the employees). Sagicor Life of Jamaica Limited is the administrator and investment manager of the plan.
Post-employment benefit computationUWI Mona’s obligation for post-employment pensions and medical care is determined and accounted for as described in note 3(h), and comprises the following amounts:
Defined contribution supplementation plan (i)Post employment medical benefits (ii)Amount recognized in statement of financial position
(i)
Defined contribution supplementation plan:
Present value of unfunded obligation Unrecognized actuarial loss Recognised obligation
1,127,5141,174,6732,302,187
2,824,7681,697,2541,127,514
777,147791,393
1,568,540
3,277,4942,500,347
777,147
2013$’000
2012$’000
2013$’000
2012$’000
( ) ( )
The University of the West Indies, Mona Campus
Notes to the Financial Statements | for the Year Ended July 31, 2013
40
Acco
unts
201
3
EmployEE bEnEfits obligation (cont’d)
(c)
18.
Post-employment benefit computation (cont’d)
(i)
(ii)
Defined contribution supplementation plan (cont’d):
The movement in the liability recognized in the statement of financial position is as follows:
Liability at beginning of yearContributions paidExpense/(income) recognized in surplus or deficitLiability at end of year
The expense/(income) recognized in surplus or deficit is made up as follows:
Current service costInterest on obligationPast service cost – vested benefitsPast service cost – non-vested benefitsNet actuarial loss recognized in year
Post-employment medical benefits:
Present value of unfunded obligationsUnrecognized actuarial lossAmount recognized in statement of financial position
The movements in the obligation recognized in the statement of financial position are as follows:
Liability at beginning of yearContributions paidExpense recognized in surplus or deficitLiability at end of year
777,147149,356499,723
1,127,514
55,286250,984
28,71933,166
197,900499,723
1,743,584568,911
1,174,673
791,39337,002
420,2821,174,673
1,838,320174,479886,694777,147
119,012377,194
1,466,23433,166
116,500886,694
1,289,084497,691791,393
663,02618,777
147,144791,393
2013$’000
2012$’000
2013$’000
2012$’000
2013$’000
2012$’000
2013$’000
2012$’000
( )
( )
( )
( )
( )
( )
( )( )
( )( )
The University of the West Indies, Mona Campus
Notes to the Financial Statements | for the Year Ended July 31, 2013
41
Acco
unts
201
3
EmployEE bEnEfits obligation (cont’d)
(c)
18.
Post-employment benefit computation (cont’d)
(ii)
(iii)
(iv)
Post-employment medical benefits (cont’d):
The expense recognized in surplus or deficit is made up as follows:
Current service costInterest costNet actuarial loss recognized in yearPast service cost-vested benefits
Principal actuarial assumptions at reporting date:
Discount rateFuture salary increasesMedical claims growth
Assumed medical claims growth trend can have a significant effect on the amounts recognized in surplus or deficit. A one percentage point change in the assumed healthcare costs trend rates would have the following effects:
Effect on the aggregate service and interest cost
Effect on the defined benefit obligation
Included in central expenditure are amounts charged/(credited) for the foregoing benefits, as follows:
Pension supplementation scheme [note 18(c)(i)]Post-employment medical care [note 18(c)(ii)]Amount recognised in surplus or deficit
47,05293,812
6,280
147,144
73,348
155,049
886,694147,144739,550
-
46,625131,721
21,635220,301420,282
109,721
159,845
499,723420,282920,005
2013$’000
2012$’000
2013$’000
2012$’000
( )
( )
( )
( )
2013%
2012%
10.06.0
10.0
10.57.0
10.0
Onepercentage
point increase$’000
Onepercentage
point decrease $’000
The University of the West Indies, Mona Campus
Notes to the Financial Statements | for the Year Ended July 31, 2013
42
Acco
unts
201
3
EmployEE bEnEfits obligation (cont’d)
(c)
(d)
miscEllanEous incomE
Amortization of capital grant (note 17)Student services/caution money/parking stickers/ID RecoveriesAdministration and library share from centreCentre’s share of central expensesOther
18.
19.
Post-employment benefit computation (cont’d)
(v)
UWI Mona’s contributions to the defined contribution plan for the year ended July 31, 2013 aggregated $723,778,000 (2012: $783,013,000).
Historical information:
(a)
(b)
Defined contribution supplementation plan:
Present value of the defined
Experience adjustment
Post-employment medical benefits:
Present value of the defined
Experience adjustment
benefit obligation
arising on plan liabilities
benefit obligation
arising on plan liabilities
30,28329,74316,00425,201
240,81381,626
423,670
27,26127,23155,30025,200
178,55336,190
349,735
2013$’000
2012$’000
The University of the West Indies, Mona Campus
Notes to the Financial Statements | for the Year Ended July 31, 2013
1,654,875
613,590
3,647,203
77,267
3,557,327
464,830
3,277,494
439,425
2,824,768
324,943
2009$’000
2010$’000
2011$’000
2012$’000
2013$’000
( )( )( )( )
43
Acco
unts
201
3
364,026
52,173
689,472
67,753
855,783
78,223
1,289,084
90,025
1,743,584
92,855
2008$’000
2009$’000
2010$’000
2012$’000
2013$’000
( )( )
Central expenditure
Computer and software license feesInsuranceLight and powerMiscellaneousOffice and generalProfessional, consulting, graduation and other expensesRepairs and maintenance - Estate Mgmt. Dept.Security and fire protectionStudent facilities and amenitiesTravelling and motor transportTuition fee exemption - staff and dependentsWater ratesLess: Centre’s share of central expenditure
FinanCe Costs
Interest and other expenses:
staFF Costs
Salaries and incentive payStatutory payroll contributionsPension plan contributionsPost employment benefit costs:
Other
taxation
UWI Mona is an approved educational institution for the purpose of Section 13 (1)(q) and Section 25(c) of the Income Tax Act (the Act) and has been granted exemption from income tax under Section 12(h) of the Act. Under the General Consumption Tax (GCT) Act, the University is entitled to acquire goods and services at a zero rate of tax; in addition, its own services are generally exempt from GCT under the provisions of item 12 Part II of the Third Schedule to the GCT Act.
20.
21.
22.
23.
Fixed loansBank charges and other
Supplementation arrangements [note 18(c)(iv)]Medical care [note 18(c)(iv)]
80,369103,441687,326
50,713431,687217,235343,629302,930173,407100,202157,714157,529240,813
2,565,369
53,24762,937
116,184
7,221,556272,831307,853
499,723420,282
32,2038,754,448
14,93390,738
483,00796,045
340,529171,962336,500232,499155,617
71,505137,644102,528178,553
2,054,954
213,78232,883246,66
6,727,100231,321300,069
886,694147,144136,000
6,654,940
2013$’000
2012$’000
2013$’000
2012$’000
2013$’000
2012$’000
( ) ( )
( )
The University of the West Indies, Mona Campus
Notes to the Financial Statements | for the Year Ended July 31, 2013
44
Acco
unts
201
3
Financial risk management
Overview
A financial instrument is any contract that gives rise to a financial asset of one enterprise and a financial liability or equity instrument of another enterprise. For the purpose of the financial statements, financial assets have been determined to include cash and cash equivalents, short-term investments, due from related parties, accounts receivable and long-term receivables. Financial liabilities have been determined to include accounts payable and accruals, due to related parties, short-term loans and long-term liabilities.
UWI Mona has exposure to operational risk and the following risks from its use of financial instruments:
(i)(ii)(iii)
This note presents information about UWI Mona’s exposure to each of the above risks and its objectives, policies and processes for measuring and managing risk.
The UWI Mona Campus Council has the overall responsibility for the establishment and oversight of UWI Mona’s risk management framework.
UWI Mona’s risk management policies are established to identify and analyze the risks it faces, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and UWI Mona’s activities.
An Audit Committee has been appointed to oversee how management monitors, and is in compliance with, UWI Mona’s policies and procedures and reviews the adequacy of the risk management framework, in relation to the risks faced by UWI Mona. The Audit Committee is assisted in its functions by UWI Mona’s Management Audit Department, which undertakes periodic reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.
(i)
24.
Credit riskLiquidity riskMarket risk
Credit risk:
Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. Credit risk arises principally from receivables from students, government receivables, cash and cash equivalents and short-term investments.
Management of credit risk relating to different types of financial assets
Management establishes an allowance for impairment that represents its best estimate of losses in respect of receivables. Management’s policy is to provide for balances based on past default experience, current economic conditions and expected recovery.
The University of the West Indies, Mona Campus
Notes to the Financial Statements | for the Year Ended July 31, 2013
45
Acco
unts
201
3
Financial risk management (cont’d)
Overview (cont’d)
(i)
24.
Credit risk (cont’d):
Management of credit risk relating to different types of financial assets (cont’d)
Due from West Indian Governments
UWI Mona’s exposure to credit risks relating to these receivables is influenced by the ability of the Governments in each territory to pay. Most of these amounts are current and are the subject of regular and vigorous follow-up. Management does not consider any of these amounts to be impaired.
Due from related parties and other receivables
UWI Mona’s exposure to credit risk relating to these receivables is influenced by each party’s ability to pay. These amounts are all current and not considered impaired.
Cash and cash equivalents and short-term investments
Cash and cash equivalents, investments securities are placed with reputable financial institutions, who are appropriately licensed and regulated, for short-term periods, and management believes these institutions have minimal risk of default.
Student receivables
UWI Mona’s exposure to credit risk on student receivables is influenced mainly by the individual characteristics of each student and their ability to pay.
Student receivables are the only financial assets with significant amounts past due. Student receivables are deemed past due when the payments are not received on the contractual payment dates. The majority of the past due accounts receivable are not considered impaired. According to UWI Mona’s policy, a provision of up to 50% of balances over 365 days is made at the end of each year, except where arrangements are in place to settle those overdue balances.
The ageing of the student receivables (note 7) at the reporting date is summarized as follows:
Past due 0-120 daysPast due 121-365 daysMore than one year
2013
88,062255,855478,411822,328
Gross$’000
2012
118,719118,719
Impairment$’000
--
126,634265,104286,092677,830
Gross$’000
194,281194,281
Impairment$’000
--
The University of the West Indies, Mona Campus
Notes to the Financial Statements | for the Year Ended July 31, 2013
46
Acco
unts
201
3
Financial risk management (cont’d)
Overview (cont’d)
(i)
(ii)
24.
Credit risk (cont’d):
Management of credit risk relating to different types of financial assets (cont’d)
Liquidity risk:
Liquidity risk, also referred to as funding risk, is the risk that UWI Mona will encounter difficulty in raising funds to meet commitments associated with financial instruments. Liquidity risk may result from an inability to sell a financial asset quickly at, or close to, its fair value. Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and ensuring the availability of funding through an adequate amount of committed facilities. The management of UWI Mona manages this risk by keeping a substantial portion of its financial assets in liquid form, and having overdraft facility in place.
The following tables present the contractual maturities of the non-derivative financial liabilities, including interest payments and excluding the impact of netting agreements.
Accounts payable
Due to related partiesShort-term loanLong-term liabilities
Student receivables (cont’d)
The movement in the allowance for impairment in respect of student receivables during the year was as follows:
Balance at beginning of yearAmount recognized, netBalance at end of year
Based on past experience, management believes that no impairment allowance is necessary in respect of staff receivables not past due, due from related parties and other receivables.
There was no significant concentration of credit risk in any counterparty and the maximum exposure to credit risk is represented by the carrying amount of each financial asset. There was no change in how UWI Mona manages credit risk during the year.
and accruals
118,71975,562
194,281
93,28525,434
118,719
2013$’000
2012$’000
6,308,4986,308,498
1,120,6081,120,608
2,460,402506,674
1,114,6961,184,5725,266,344
2,460,402506,674
1,114,6968,613,678
12,695,450
2,460,402506,674
1,050,2607,474,612
11,491,948
---
---
Over2 years$’000
1-2years$’000
Less than1 year$’000
ContractualCashflow
$’000
CarryingAmount
$’000
2013
The University of the West Indies, Mona Campus
Notes to the Financial Statements | for the Year Ended July 31, 2013
47
Acco
unts
201
3
Financial risk management (cont’d)
Overview (cont’d)
(ii)
(iii)
24.
Liquidity risk (cont’d):
Accounts payable
Due to related partiesShort-term loanLong-term liabilities
Market risk:
Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates will affect UWI Mona’s income or the value of its holding of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return. UWI Mona has no formal risk management mechanism to address market risk; however, the monitoring of such exposure comes under the purview of an Investment Committee.
(a)
and accruals
Interest rate risk:
Interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market interest rates.
Interest rate risk is affected where there is a mismatch between interest-earning assets and interest-bearing liabilities which are subject to interest rate adjustments within a specified period. UWI Mona manages this risk by consistently analysing and adjusting its portfolio of interest-earning assets, depending on the direction in which interest rates are going in the opinion of management.
UWI Mona contracts other financial liabilities, primarily short-term loans and supplier credit at floating interest rates or on interest-free terms, which are fixed in advance but which may be varied by appropriate notice by the lenders.
Interest bearing financial assets is primarily represented by cash and cash equivalents, short-term investments, and staff loans, which are contracted at fixed and floating interest rates for the duration of the term.
5,889,4375,889,437
1,101,9911,101,991
1,975,279515,795147,924
1,325,5073,964,505
1,975,279515,795147,924
8,316,93510,955,933
1,975,279515,795142,500
6,680,9399,314,513
---
---
Over2 years$’000
1-2years$’000
Less than1 year$’000
ContractualCashflow
$’000
CarryingAmount
$’000
2012
The University of the West Indies, Mona Campus
Notes to the Financial Statements | for the Year Ended July 31, 2013
48
Acco
unts
201
3
Financial risk management (cont’d)
Overview (cont’d)
(ii)
24.
Market risk (cont’d):
(a) Interest rate risk (cont’d):
At the reporting date, the interest profile of UWI Mona’s interest-bearing financial instruments as represented by their carrying amount was as follows:
Fixed rate instruments:
Variable rate instruments:
Cash flow sensitivity analysis for variable rate instruments
A change of 200 (2012: 100) basis points in interest rates would have affected loss for the year by J$379,000 (2012: J$75,000). This analysis assumes that all other variables, in particular, foreign currency rates, remain constant. The analysis is performed on the same basis as for 2012.
Fair value sensitivity analysis for fixed rate instruments
UWI Mona does not carry any fixed rate financial instruments at fair value through profit or loss or available-for-sale. Therefore, a change in interest rates at the reporting date would not affect the value of its financial instruments.
Financial assetsFinancial liabilities
Financial liabilities
841,8866,154,7465,312,860
18,944
847,0064,706,8913,859,885
7,452
2013$’000
2012$’000
2.50 - 15.51.00 - 9.85
27.75
Interest Rates%
( ) ( )( ) ( )
( ) ( )
The University of the West Indies, Mona Campus
Notes to the Financial Statements | for the Year Ended July 31, 2013
49
Acco
unts
201
3
Financial risk management (cont’d)
Overview (cont’d)
(ii)
24.
Market risk (cont’d):
(b) Foreign currency risk:
Foreign currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates.
UWI Mona is exposed to foreign currency risk primarily on purchases and borrowings that are denominated in a currency other than its functional currency. UWI Mona ensures that the net exposure is kept within reasonable limits by monitoring and, where necessary, adjusting its exposure.
UWI Mona manages foreign exchange exposure by maintaining adequate liquid resources in intervening currencies and by managing the timing of payments of foreign currency liabilities.
At the reporting date, UWI Mona’s exposure to foreign currency risk was as follows:
Cash and cash equivalentsShort-term investmentsAccounts receivableDue from related partiesAccounts payableLong-term loansDue to related partiesNet (exposure)/asset
Cash and cash equivalentsShort-term investmentsAccounts receivableDue from related partiesAccounts payableLong-term loansDue to related partiesNet (exposure)/asset
985
1,261
3,6451,399
Bds$’000
--
--
2,474
565
3,039
TT$’000
--
---
255
13
40
Stg£’000
--
--
1,206
1,206
Euro€’000
-----
-
1,1431,403
658
1,279 13,932
12,007
US$’000
-
-( ) ( )
( )
( ) ( )
( )
( ) ( ) ( )
2013
236
969
4,1402,935
Bds$’000
--
--
89
596
685
TT$’000
--
---
120
8
112
Stg£’000
---
--
1,261
1,261
Euro€’000
-----
-
7021,221
121
2,387 9,342
9,685
US$’000
-
-( ) ( )
( )
( ) ( )
( ) ( ) ( )
2012
The University of the West Indies, Mona Campus
Notes to the Financial Statements | for the Year Ended July 31, 2013
50
Acco
unts
201
3
Financial risk management (cont’d)
Overview (cont’d)
(ii)
(iv)
Fair values OF Financial instruments
Fair value amounts represent estimates of the arms length consideration that would currently be agreed between knowledgeable, willing parties who are under no compulsion to act and is best evidenced by a quoted market price, if one exists. UWI Mona does not carry any financial instruments at fair value. Most of UWI Mona’s financial instruments lack an available trading market; therefore the fair values disclosed may not necessarily be indicative of the amounts realizable in an immediate settlement of the instruments.
The fair value of cash and cash equivalents, due from/to related parties, accounts receivable and accounts payable is assumed to be their carrying values due to the short-term nature of these instruments.
24.
25.
Market risk (cont’d):
(b)
(c)
Capital management:
UWI Mona’s policy is to maintain a strong capital base so as to maintain stakeholders’ confidence and to sustain future development of the University. Capital consists of capital and other reserves. UWI Mona is not subject to any externally imposed capital requirements and there were no changes in how capital was managed during the year.
UWI Mona’s objective is to manage operational risk so as to balance the avoidance of financial losses and damage to its reputation with overall cost effectiveness and to avoid control procedures that restrict initiative and creativity.
Foreign currency risk (cont’d):
The rates of exchange for the Jamaica dollar against the main currencies for which it is exchanged were as follows:
Sensitivity analysis:
A 5% (2012: 5%) change in foreign currency rates against the Jamaica dollar would have affected loss for the year by $69,957,000 (2012: $55,483,000). This analysis assumes that all other variables, in particular interest rates, remain constant.
TT$1.00BD$1.00US$1.00EURO (€) 1.00£1.00
=====
15.829150.7720
101.6085134.5561154.8557
J$J$J$J$J$
July 31, 2013
TT$1.00BD$1.00US$1.00EURO (€) 1.00£1.00
=====
13.976044.704489.3815
109.4586139.6236
J$J$J$J$J$
July 31, 2012
The University of the West Indies, Mona Campus
Notes to the Financial Statements | for the Year Ended July 31, 2013
51
Acco
unts
201
3
Fair values oF Financial instruments (cont’d)
The fair value of short-term investments is as disclosed in note 5(i). The fair value of long-term receivables and long-term liabilities could not be readily determined as there are no instruments with similar risks and the instruments are not all at market terms.
capital commitments
As at the reporting date, UWI Mona was committed to incur capital expenditure of $533,000,000 (2012: $1,696,250,000).
25.
26.
The University of the West Indies, Mona Campus
Notes to the Financial Statements | for the Year Ended July 31, 2013
52
Acco
unts
201
3
Cover Photos:- Top right: The new Marlene Hamilton Hall of Residence- Bottom left: Elsa Leo Rhynie Hall of Residence