EMPOWER THE EMERGING MARKETS FOUNDATION (HONG KONG) LIMITED REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014

Transcription

1 EMPOWER THE EMERGING MARKETS FOUNDATION (HONG KONG) LIMITED REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014 Russell Bedford James Ngai CPA Limited CERTIFIED PUBLIC ACCOUNTANTS Member of Russell Bedford International, a global network of independent accountancy firms with affiliated offices worldwide.

2 Reports and financial statements For the year ended 30 June 2014 Contents Pages Report of the directors 1-2 Independent auditors report 3 Income and expenditure account and statement of comprehensive income 4 Balance sheet 5 Statement of changes in fund 6 Cash flow statement 7 Notes to the financial statements 8-14

3 Report of the directors The directors have pleasure in presenting herewith their report together with the audited financial statements for the year ended 30 June Principal place of business EMpower - The Emerging Markets Foundation (Hong Kong) Limited (the Company ) is a charitable organisation incorporated and domiciled in Hong Kong and has its registered office at 9A Foo Cheong Building, Wing Lok Street, Sheung Wan, Hong Kong. Principal activities The principal activities of the Company are to raise funds and disburse funds to locally led organisations to support at-risk youth in emerging market countries around the world. Financial statements The results of the Company for the year ended 30 June 2014 are set out in the income and expenditure account on page 4 and the state of the Company s affairs as at that date are set out in the financial statements on pages 5 to 14. Grants Grants made by the Company during the year amounted to 357,000. Directors The directors of the Company during the year and up to the date of this report were: FOO Yin Pheng Marta CABRERA Aasha PAI Paul ANGWIN (resigned on 23 May 2014) Neil HARVEY Vishal TOURANI Stephen CHANG Ben HALL Ben FALLOON Brian POHLI David FERNANDEZ (appointed on 16 June 2014) Kirk ALEXANDER (appointed on 16 June 2014) In accordance with the Company s Articles of Association, one-third of the directors, or the number nearest one-third, shall retire and, being eligible, offer themselves for re-election at the forthcoming Annual General Meeting. 1

4 Report of the directors (Continued) Directors interests Except for the transactions as disclosed in note 7 to the financial statements, no other contracts of significance to which the Company was a party, and in which a director of the Company had a material interest, whether directly or indirectly, subsisted at the end of the year or at any time during the year. At no time during the year was the Company a party to any arrangements to enable the directors of the Company to acquire benefits by means of acquisition of shares in or debentures of the Company or any other body corporate. Management contracts No contracts concerning the management and administration of the whole or any substantial part of the business of the Company were entered into or existed during the year. Auditors Our auditors have changed their practice name from James Ngai & Partners CPA Limited to Russell Bedford James Ngai CPA Limited. A resolution for the reappointment of Russell Bedford James Ngai CPA Limited, Certified Public Accountants, as auditors of the Company is to be proposed at the forthcoming Annual General Meeting. For and on behalf of the Board Chairman Dated: 2

5 Russell Bedford James Ngai CPA Limited 羅瑞貝德會計師事務所有限公司 Room 1708 Dominion Centre, Queen s Road East, Wanchai, Hong Kong Tel: Fax: Independent auditors report To the member of EMpower - The Emerging Markets Foundation (Hong Kong) Limited (Incorporated in Hong Kong and limited by guarantee) We have audited the financial statements of EMpower - The Emerging Markets Foundation (Hong Kong) Limited (the Company ) set out on pages 4 to 14, which comprise the balance sheet as at 30 June 2014, and the income and expenditure account, statement of comprehensive income, statement of changes in fund and cash flow statement for the year ended 30 June 2014, and a summary of significant accounting policies and other explanatory notes. Directors responsibility for the financial statements The directors are responsible for the preparation of financial statements that give a true and fair view in accordance with Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants and the Hong Kong Companies Ordinance, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors responsibility It is our responsibility to form an independent opinion, based on our audit, on these financial statements and to report our opinion solely to you, as a body, in accordance with section 141 of the Hong Kong Companies Ordinance, and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report. We conducted our audit in accordance with Hong Kong Standards on Auditing issued by the Hong Kong Institute of Certified Public Accountants. These standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance as to whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making these risk assessments, the auditors 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 circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements give a true and fair view of the state of the Company s affairs as at 30 June 2014 and of its surplus and cash flows for the year then ended in accordance with Hong Kong Financial Reporting Standards and have been properly prepared in accordance with the Hong Kong Companies Ordinance. Russell Bedford James Ngai CPA Limited Certified Public Accountants Hong Kong, Ho Kit Man Practising Certificate Number P Certified Public Accountants Member of Russell Bedford International, a global network of independent accountancy firms with affiliated offices worldwide.

6 Income and expenditure account and statement of comprehensive income Note Income Contributions 1,167, ,729 Interest income ,167, ,731 Expenditure Accounting fee 11,947 8,241 Audit fee 2,100 2,000 Bad debt expense - 5,000 Bank charges 860 3,178 Board representation 33 - Exchange loss, net 1, Fundraising expenses 30,438 45,357 Grants 357, ,000 Office costs 5,517 4,397 Office rent 3,025 - Printing and postage Telephone and internet Travel and transportation 19,518 23,527 Staff costs 4 99,250 79,308 Sundry expenses 77 2, , ,664 Surplus / (deficit) for the year and total comprehensive income / (loss) for the year 635,265 (13,933) 4

7 Balance sheet At 30 June 2014 Note Current assets Contributions receivable - 14,846 Other receivables and prepayments 5,308 4,418 Cash and bank balance 634, ,882 Amount due from a related company 6 290, , ,146 Current liabilities Grants payables 274, ,000 Amount due to a related company 6-4,984 Other payable and accrued expenses 7,943 8, , ,798 Net current assets and net assets 647,613 12,348 Representing: Surplus fund 647,613 12,348 Approved by the Board of Directors on Director Director 5

8 Statement of changes in fund Balance at 1 July ,281 Deficit and total comprehensive loss for the year (13,933) Balance at 30 June ,348 Balance at 1 July ,348 Surplus and total comprehensive income for the year 635,265 Balance at 30 June ,613 6

9 Cash flow statement Surplus / (deficit) for the year 635,265 (13,933) Bad debts written off - 5,000 Surplus / (deficit) before working capital changes 635,265 (8,933) Decrease / (increase) in contributions receivable 14,846 (14,846) Increase in other receivables and prepayments (890) (2,619) Increase in amount due from a related company (290,652) - Increase / (decrease) in grants payables 173,667 (7,000) Decrease in amount due to a related company (4,984) (34,719) Decrease in other payable and accrued expenses (871) (844) Net cash generated from / (used in) operations 526,381 (68,961) Net increase / (decrease) in cash and cash equivalents 526,381 (68,961) Cash and cash equivalents at beginning of year 107, ,843 Cash and cash equivalents at end of year 634, ,882 Analysis of cash and cash equivalents at end of year Cash and bank balance 634, ,882 7

10 Notes to the financial statements 1. Corporate status The Company is a charitable organisation incorporated under the Hong Kong Companies Ordinance as a Company limited by guarantee and not having a share capital. The liability of the members is limited to HKD100 per member in the event of the Company being wound up, whilst they remain members, or within one year after they cease to be members. The address of its registered office is 9A Foo Cheong Building, Wing Lok Street, Sheung Wan, Hong Kong. Its principal activities are to raise funds and disburse funds to locally led organisations to support at-risk youth in emerging market countries around the world. 2. Principal accounting policies (a) Statement of compliance The financial statements have been prepared in accordance with Hong Kong Financial Reporting Standards ( HKFRSs ) issued by the Hong Kong Institute of Certified Public Accountants ( HKICPA ) and the requirements of the Hong Kong Companies Ordinance. A summary of the significant accounting policies adopted by the Company is set out below. (b) Basis of preparation of the financial statements The financial statements have been prepared on the historical cost basis. The HKICPA has issued the following new and revised standards and interpretations that are mandatory for the first time for the current accounting period of the Company: Amendments to HKFRS 1 First-time Adoption of Hong Kong Financial Reporting Standards Government Loans existing at Date of Transition to HKFRSs HKAS 19 (Revised) Employee Benefits HKAS 27(2011) Separate Financial Statements HKAS 28(2011) Investments in Associates and Joint Ventures HKFRS 10 Consolidated Financial Statements HKFRS 11 Joint Arrangements HKFRS 12 Disclosure of Interests In Other Entities HKFRS 13 Fair Value Measurement HK (IFRIC) Int 20 Stripping Costs in the Production Phase of a Surface Mine Amendments to HKFRS 7 Financial Instruments: Disclosures Disclosure Offsetting Financial Assets and Financial Liabilities Annual Improvements to HKFRSs Cycle The amendments or new standards above have had no material impact on the Company s financial statements as the amendments and interpretations were consistent with policies already adopted by the Company. 8

11 Notes to the financial statements 2. Principal accounting policies (Continued) (b) Basis of preparation of the financial statements (Continued) The HKICPA has issued a number of amendments, new standards and interpretations which are not yet effective for the year ended 30 June 2014 and which have not been adopted in these financial statements. The Company has not early applied the following new and revised standards or interpretations that have been issued but are not yet effective: HKFRS 9 Financial Instruments 1 HKFRS 14 Regulatory Deferral Accounts 4 HKFRS 15 Revenue from Contracts with Customers 5 Amendments to HKAS 19 Defined Benefit Plans: Employee Contributions 3 Amendments to HKAS 32 Financial Instruments: Presentation Offsetting Financial Assets and Financial Liabilities 2 Amendments to HKFRS 10 Consolidated Financial Statements, HKFRS 12 Disclosure of Interests in Other Entities and HKAS 27 Separate Financial Statements Investment Entities 2 Amendments to HKAS 36 Impairment of Assets Recoverable Amount Disclosures for Non-financial Assets 2 Amendments to HKAS 39 Financial Instruments: Recognition and Measurement Novation of Derivatives and Continuation of Hedge Accounting 2 Amendments to HKFRS 9 Financial Instruments and HKFRS 7 Financial Instruments: Disclosures Mandatory Effective Date and Transition Disclosures 1 Amendments to HKFRS 11 Accounting for Acquisitions of Interests in Joint Operations 4 Amendments to HKAS 16 and HKAS 38 Clarification of Acceptable Methods of Depreciation and Amortisation 4 Amendments to HKAS 16 and HKAS 41 Agriculture: Bearer Plants 4 Amendments to HKFRSs Annual Improvements to HKFRSs Cycle 3 Amendments to HKFRSs Annual Improvements to HKFRSs Cycle 3 HK(IFRIC) - Int 21 - Levies 2 1 Effective for annual periods beginning on or after 1 January Effective for annual periods beginning on or after 1 January Effective for annual periods beginning on or after 1 July Effective for annual periods beginning on or after 1 January Effective for annual periods beginning on or after 1 January 2017 The Company is in the process of making an assessment of what the impact of these amendments and new interpretations is expected to be in the period of initial application. The Company does not expect the adoption of them to have a significant impact on the Company s results of operations and financial position. (c) Revenue recognition Contributions are recognised when the donor makes a promise to give to the Company. 9

12 Notes to the financial statements 2. Principal accounting policies (Continued) (d) Employee benefits Salaries, annual bonuses, paid annual leave, contributions to defined contribution retirement plans and the cost of non-monetary benefits are accrued in the year in which the associated services are rendered by employees. Where payment or settlement is deferred and the effect would be material, these amounts are stated at their present values. (e) Income tax The Company has been exempted from paying Hong Kong Profits Tax under Section 88 of the Inland Revenue Ordinance. (f) Impairment of assets Assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Where an impairment loss subsequently reverses, the carrying amount of the asset (cashgenerating unit) is increased to the revised estimate of its recoverable amount to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the assets (cash-generating unit) in prior periods. A reversal of an impairment loss is recognised immediately in the income and expenditure account. (g) Receivables Receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. When the effect of discounting would be immaterial, the receivables are stated at cost. (h) Cash and cash equivalents Cash and cash equivalents are short-term, highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of change in value. (i) Payables Payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method unless the effect of discount would be immaterial in which case they are stated at cost. 10

13 Notes to the financial statements 2. Principal accounting policies (Continued) (j) Translation of foreign currencies (i) Functional and presentation currency Items included in the financial statements are measured using the currency of the primary economic environment in which the entity operates (the functional currency ). The financial statements are presented in United States Dollar, which is the Company s functional and presentation currency. (ii) Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income and expenditure account. (k) Related parties A person or a close member of that person s family is related to the Company if that person (i) has control or joint control over the Company; (ii) has significant influence over the Company; or (iii) is a member of the key management personnel of the Company or of a parent of the Company. An entity is related to the Company if (i) the entity and the Company are members of the same group of companies, (ii) the entity is an associate or joint venture of either the Company or a member of a group of which the Company is a member, (iii) the Company is an associate or joint venture of either the entity or a member of a group of which the entity is a member, (iv) the entity and the Company are joint ventures of the same third party, (v) the entity is a joint venture of a third entity and the Company is an associate of that third entity, (vi) the Company is a joint venture of a third entity and the entity is an associate of that third entity, (vii) the entity is a post-employment benefit plan for the benefit of employees of either the Company or an entity related to the Company, (viii) the entity is controlled or jointly controlled by a person related to the Company or a close member of that person s family, (ix) a person who has control or joint control over the Company has significant influence over the entity, or (x) a person who has control or joint control over the Company is a member of the key management personnel of the entity (or of a parent of the entity). Close members of the family of a person are those family members who may be expected to influence, or be influenced by, that person in their dealings with the entity. 11

14 Notes to the financial statements 3. Directors emoluments Directors emoluments - fees other emoluments - - The Company considered the directors of the Company as the key management, accordingly there is no separate disclosure of key management compensation. 4. Staff costs Salaries 93,584 73,392 Retirement plan contribution - defined contribution plan 2,917 2,111 Staff welfare 2,749 3,805 99,250 79, Taxation The Company has been exempted from paying Hong Kong Profits Tax under Section 88 of the Inland Revenue Ordinance. 6. Amount due from / (to) a related company Particulars of an amount due from / (to) a related company, disclosed pursuant to Section 161B of the Hong Kong Companies Ordinance, are as follows:- Name of related company Name of connected director Terms Duration and repayment Interest rate Security Balances - at 30 June 2014 : US$290,652 - at 30 June 2013 : US$4,984 Cr. Maximum amount outstanding during the year Provision made as at 30 June 2014 : EMpower The Emerging Markets Foundations Limited (US) : Marta CABRERA : Repayable on demand : Nil : Nil : US$290,963 : Nil 12

15 Notes to the financial statements 7. Related party transaction During the year, the Company undertook the following material related party transaction: Contributions from directors 285, ,411 The directors were of the opinion that the above transaction was entered into in the normal course of operation and at terms agreed between the Company and the directors. 8. Financial instruments The Company has exposure to credit, liquidity and fair value risks arise in the normal course of the Company s business. These risks are limited by the Company s financial management policies and practices described below: (a) Credit risk The Company s credit risk is primarily attributable to amount due from a related company, contributions receivable and bank balances. The Company takes action in reminding donors on outstanding but promised contributions to ensure collectability. The Company s bank balances were held by a financial institution located in Hong Kong, which management believes is of high credit rating. Accordingly the overall credit risk is considered limited. (b) Liquidity risk Management of the Company aims to maintain sufficient cash to meet its demand in daily operation. In the opinion of the directors, the Company has a solid financial position and the exposure to liquidity risk is minimal. (c) Fair value The carrying amounts of the Company s financial instruments approximate their fair values due to their short maturity. 13

16 Notes to the financial statements 9. Capital risk management The Company s objectives when managing capital are to safeguard the Company s ability to continue as a going concern in order to continue its charitable activities. As at 30 June 2014, the Company did not have any external borrowings. The Company has no specific capital management policy and is not subject to externally imposed capital requirements. 10. Approval of financial statements The financial statements were approved by the Board of Directors on. 14