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Temasek Polytechnic Financial Report

Contents

ReportoftheAuditors 63StatementofIncomeandExpenditure 65Balance Sheet 67Statement of Changes in Accumulated Surplus 68StatementofCashFlows 69NotestotheFinancialStatements 70

FINANCIAlREPORT

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rePorT on The FinanCiaL STaTeMenTSWe have audited the accompanying financial statements of Temasek Polytechnic (the “Polytechnic”), whichcomprisethebalancesheetasat31March2007,thestatementofincomeandexpenditure,statementofchangesinaccumulatedsurplusandcashflowstatementfortheyearthenended,andasummaryofsignificantaccountingpoliciesandotherexplanatorynotes,assetoutonpagesFS1toFS25.

Board of governors’s responsibility for the financial statementsThe Polytechnic’s BoardofGovernors is responsible for the preparation and fair presentationof these financialstatements in accordance with the provisions of the Temasek Polytechnic Act, Chapter 323A (the “Act”) andSingapore FinancialReportingStandards. This responsibility includes:designing, implementingandmaintaininginternalcontrolrelevanttothepreparationandfairpresentationoffinancialstatementsthatarefreefrommaterialmisstatement,whetherduetofraudorerror;selectingandapplyingappropriateaccountingpolicies;andmakingaccountingestimatesthatarereasonableinthecircumstances.

auditors’ responsibilityOurresponsibility istoexpressanopiniononthesefinancialstatementsbasedonouraudit.WeconductedourauditinaccordancewithSingaporeStandardsonAuditing.ThoseStandardsrequirethatwecomplywithethicalrequirementsandplanandperformtheaudittoobtainreasonableassurancewhetherthefinancialstatementsarefreefrommaterialmisstatement.

Anauditinvolvesperformingprocedurestoobtainauditevidenceabouttheamountsanddisclosuresinthefinancialstatements.Theproceduresselecteddependontheauditor’sjudgement,includingtheassessmentoftherisksofmaterialmisstatementofthefinancialstatements,whetherduetofraudorerror.Inmakingthoseriskassessments,the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financialstatementsinordertodesignauditproceduresthatareappropriateinthecircumstances,butnotforthepurposeofexpressinganopinionontheeffectivenessoftheentity’sinternalcontrol.Anauditalsoincludesevaluatingtheappropriatenessofaccountingpoliciesusedandthereasonablenessofaccountingestimatesmadebymanagement,aswellasevaluatingtheoverallpresentationofthefinancialstatements.

INDEPENDENT AUDITORS’ REPORTReport of the Auditors appointed under Section 16(1) of theTemasek Polytechnic Act, Chapter 323A

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Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforourauditopinion.

opinionWedrawyourattentiontoNote2.1tothefinancialstatements.ThePolytechnichasnotdisclosedrelatedpartytransactionsandoutstandingbalanceswithotherstate-controlledentitiesasitwasgrantedreliefbytheFinanceCircularMinuteNoM4/2005issuedbytheMinistryofFinance,fromsuchdisclosure.Thenon-disclosureisanon-compliancewithSingaporeFinancialReportingStandard24RelatedPartyDisclosures.

Inouropinion:

(a) exceptforthenon-disclosureofrelatedpartytransactionsandoutstandingbalanceswithotherstate-controlled entities,thefinancialstatementsofthePolytechnicareproperlydrawnupinaccordancewiththeprovisionsof theActandSingaporeFinancialReportingStandardstopresentfairly,inallmaterialrespects,thestateofaffairs ofthePolytechnicasat31March2007andtheresults,changesinaccumulatedsurplusandcashflowsofthe Polytechnicfortheyearendedonthatdate;and

(b) theaccountingandotherrecordsrequiredbytheActtobekeptbythePolytechnichavebeenproperlykept inaccordancewiththeprovisionsoftheAct,includingrecordsofallassetsofthePolytechnicwhetherpurchased, donatedorotherwise.

report on other legal and regulatory requirementsDuringthecourseofouraudit,nothingcametoournoticethatcausedustobelievethat:

(1) thereceipt,expenditureandinvestmentofmoniesandtheacquisitionanddisposalofassetsbythePolytechnic duringthefinancialyearhavenotbeenmadeinaccordancewiththeprovisionsoftheAct;and

(2) inrelationtotheTemasekPolytechnicGeneralEducationFund(the“Fund”),theuseofdonationsmonieswas notinaccordancewiththeobjectivesoftheFund.

TherewerenofundraisingappealconductedbytheFundduringtheyearended31March2007.

KPMgCertifiedPublicAccountants

Singapore27June2007

INDEPENDENT AUDITORS’ REPORTYear ended 31 March 2007

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note general Fund restricted Funds Total 2006/07 2005/06 2006/07 2005/06 2006/07 2005/06 $’000 $’000 $’000 $’000 $’000 $’000operating income

education and general Studentfees 31,322 28,966 2,873 1,584 34,195 30,550 Otherincome 1,394 1,245 421 344 1,815 1,589 Donations 64 2 352 324 416 326 Courses,projects, seminarsandtalks 594 309 4,849 3,434 5,443 3,743 Studentprojects 893 802 – – 893 802 Modelprojects 65 41 – – 65 41 34,332 31,365 8,495 5,686 42,827 37,051

operating expenses

education and general Salaries,CPFandother relatedcosts 109,537 103,766 1,490 848 111,027 104,614 Depreciation 8 22,082 28,729 726 627 22,808 29,356 Repairs,maintenance andutilities 15,482 13,124 539 382 16,021 13,506 Property,plantand equipmentexpensedoff 2,728 3,793 20 8 2,748 3,801 Teachingmaterialsand consumablesupplies 2,277 2,302 97 73 2,374 2,375 Librarybooksandmaterials 1,531 1,650 – – 1,531 1,650 Staffbenefits 1,986 1,671 14 4 2,000 1,675 Studentwelfare 1,628 1,563 78 70 1,706 1,633 Miscellaneous 1,293 1,470 621 641 1,914 2,111 Travellingandcommunication 1,143 1,188 80 81 1,223 1,269 Publicityandpromotions 1,203 882 26 37 1,229 919 Rental 581 545 6 5 587 550 Consultancyfees 530 501 – – 530 501 Officesupplies,stationery and periodicals 335 385 4 10 339 395Exhibitionandseminar 241 333 – – 241 333 Computersoftware 48 107 – – 48 107 Audit fee 52 46 6 5 58 51 Feesforfundmanagers 846 – – – 846 –Courses,projects,seminarsandtalks 303 188 2,489 1,654 2,792 1,842Studentprojects 893 802 – – 893 802Modelprojects 65 41 – – 65 41 164,784 163,086 6,196 4,445 170,980 167,531

STATEMENT OF INCOME AND ExPENDITUREYear ended 31 March 2007

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note 2006/07 2005/06 $’000 $’000

accumulated surplusGeneralFund 6 155,846 120,173RestrictedFunds 6 19,628 6,992FairValueReserve 8,185 3,045 183,659 140,210Temasek Polytechnic endowment Fund 7 1,608 1,508 185,267 141,718

non-current assetsProperty,plantandequipment 8 418,231 425,306Loanstostaffandstudents 9 4,557 4,330Subsidiary 10 – –Investments 11 14,693 33,820 437,481 463,456Current assetsInvestments 11 26,193 1,996Tradeandotherreceivables 12 5,247 3,224Governmentgrantreceivables 45,183 –Loanstostaffandstudents 9 887 980Cashandcashequivalents 13 122,013 119,269 199,523 125,469Total assets 637,004 588,925

Current liabilitiesGovernmentgrantsreceivedinadvance 2,215 2,059Tradeandotherpayables 14 18,060 16,363Governmentadvancesforstaffloan 15 18 69 20,293 18,491

non-current liabilitiesGovernmentadvancesforstaffandstudentloans 15 5,591 5,689Deferredcapitalgrants-Government 16 425,169 421,970Deferredcapitalgrants-Others 17 684 1,057 431,444 428,716Total liabilities 451,737 447,207

BAlANCE ShEET As at 31 March 2007

The accompanying notes form an integral part of these financial statements.

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accumulated Surplus Fair general restricted value Fund Funds reserve Total $’000 $’000 $’000 $’000

At1April2005 94,848 15,515 39 110,402

Changeinfairvalueofavailable-for-saleinvestments – – 3,006 3,006

Netgainsrecogniseddirectlyinequity – – 3,006 3,006

Surplusfortheyear 25,325 1,477 – 26,802

Totalrecognisedincomeandexpenseduringtheyear 25,325 1,477 3,006 29,808

At31March2006 120,173 16,992 3,045 140,210

At1April2006 120,173 16,992 3,045 140,210

Changeinfairvalueofavailable-for-saleinvestments – – 5,140 5,140

Netgainsrecogniseddirectlyinequity – – 5,140 5,140

Surplusfortheyear 35,673 2,636 – 38,309

Totalrecognisedincomeandexpenseduringtheyear 35,673 2,636 5,140 43,449

At31March2007 155,846 19,628 8,185 183,659

STATEMENT OF ChANGES IN ACCUMUlATED SURPlUSYear ended 31 March 2007


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note 2006/07 2005/06 $’000 $’000

operating activitiesOperatingdeficitbeforegrants (124,369) (128,451)Adjustmentsfor:Depreciationofproperty,plantandequipment 8 22,808 29,356Gainondisposalofproperty,plantandequipment (44) (84)Managementfeesforfundmanagers 71 –Interestincome 4 (3,784) (2,029)operating deficit before working capital changes (105,318) (101,208)

Changesinworkingcapital:Tradeandotherreceivables (1,586) (677)Tradeandotherpayables 1,697 (1,050)Cash flows from operating activities (105,207) (102,935)

investing activitiesInterestreceived 3,431 1,600Purchaseofproperty,plantandequipment (15,734) (17,962)Proceedsfromsaleofproperty,plantandequipment 45 82Investments – (30,000)Cash flows from investing activities (12,258) (46,280)

Financing activitiesDevelopmentgrantsreceivedfromGovernment 11,888 13,989OperatinggrantsreceivedfromGovernment 108,504 126,515(Disbursement)/Repaymentofstaff/studentloans,net 9 (134) 132Refundofstaffloantogovernment 15 (149) (270)DonationsreceivedforTemasekPolytechnic EndowmentFund 7 100 100Grantsrefundedtootherorganisations – –Cash flows from financing activities 120,209 140,466

net increase/(decrease) in cash and cash equivalents 2,744 (8,749)Cashandcashequivalentsatbeginningofyear 119,269 128,018Cash and cash equivalents at end of year 13 122,013 119,269

CASh FlOW STATEMENT Year Ended 31 March 2007


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Thesenotesformanintegralpartofthefinancialstatements.

ThefinancialstatementswereauthorisedforissuebytheBoardofGovernorson27June2007.

1 Domicile and Activities

Temasek Polytechnic (the Polytechnic) was established in 1990 under the Temasek Polytechnic Act (Chapter 323A).ItisdomiciledintheRepublicofSingaporeanditscampusissituatedat21TampinesAvenue1,Singapore 529757.

TheprincipalactivitiesofthePolytechnicaretoprovideinstruction,trainingandresearchintechnology,science, commerce,artsandothersubjectsoflearning.

2 Summary of Significant Accounting Policies

2.1 Basis of preparation

ThefinancialstatementshavebeenpreparedinaccordancewithSingaporeFinancialReportingStandards (FRS)andtheapplicablerequirementsofTemasekPolytechnicAct,Chapter323A.

The Polytechnic has not disclosed related party transactions and outstanding balanceswith other state- controlledentitiesasitwasgrantedreliefbytheFinanceCircularMinuteNoM4/2005issuedbytheMinistry ofFinance(“MOF”),fromsuchdisclosure.Thenon-disclosureisanon-compliancewithFRS24RelatedParty Disclosures.

MOFhasclarifiedthattherearealreadystrictfinancialproceduresandcontrolsinplacetogoverntheoperations ofstatutoryboards.Inaddition,asstatutoryboardsarelegallyconstitutedentities,theirfinancialaffairswould primarilybegovernedbytherespectivestatuteswhichconstitutedthem,aswellasthefinancialandaccounting policiesissuedbyMOFfromtimetotime.Hence,statutoryboardsneednotcomplywiththisrequirementof FRS24RelatedPartyDisclosures.

ThefinancialstatementsarepresentedinSingaporedollarsandroundedtothenearestthousand,unless otherwisestated.Theyarepreparedonthehistoricalcostbasisexceptforcertainfinancialassetsandliabilities whicharestatedatfairvalue.

Thepreparationoffinancialstatementsrequiresmanagementtomakejudgements,estimatesandassumptions thataffecttheapplicationofaccountingpoliciesandthereportedamountsofassets,liabilities,incomeand expenses.Actualresultsmaydifferfromtheseestimates.

Estimatesandunderlyingassumptionsarereviewedonanongoingbasis.Revisionstoaccountingestimates arerecognisedintheperiodinwhichtheestimateisrevisedandinanyfutureperiodsaffected.

Inparticular,informationaboutsignificantareasofestimation,uncertaintyandcriticaljudgementsinapplying accountingpoliciesthathavethemostsignificanteffectontheamountrecognisedinthefinancialstatements relatestovaluationofinvestments.

NOTES TO ThE FINANCIAl STATEMENTS

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2.2 Functional currency

ThefunctionalcurrencyofthePolytechnicistheSingaporedollar.Asstudentfees,grantsandpurchasesare denominatedprimarilyinSingaporedollar,theBoardofGovernorsareoftheopinionthattheSingaporedollar reflectstheeconomicsubstanceoftheunderlyingeventsandcircumstancesrelevanttothePolytechnic.

2.3 revenue recognition

Student fees Tuitionandotherfeesforanacademicyeararerecognisedovertheperiodofserviceinafinancialyear.

Income from courses/projects Revenuefromcourses/projectsarerecognisedbasedonpercentageofcompletion,determinedonastraight- linebasisovertheperiodofthecourses/projects.

Interest income Interestincomeisrecognisedonanaccrualbasisusingtheeffectiveinterestmethod.

Donations Donationsarerecogniseduponreceipt.

2.4 grants

GovernmentgrantsrelatedtoassetsinwhichthePolytechnichasdiscretionarymanagementpoweraretaken directlytotheDeferredCapitalGrantaccount,ortotheStatementofIncomeandExpenditureforassets whicharewrittenoffintheyearofpurchase.

OthergovernmentgrantsrelatedtoassetsareinitiallytakentoGovernmentgrantreceivedinadvanceaccount andupon theirutilisation for thepurchaseof assets, theyare transferred to theDeferredCapitalGrant account,or to theStatementof IncomeandExpenditure forassetswhicharewrittenoff in theyearof purchase.

Thedeferredcapitalgrantsarerecognised intheStatementof IncomeandExpenditureover theperiods necessarytomatchthedepreciationandwriteoffoftheproperty,plantandequipmentpurchasedwiththe relatedgrants.Uponthedisposaloftheproperty,plantandequipment,thebalanceoftherelateddeferred capitalgrantsisrecognisedintheStatementofIncomeandExpendituretoreflectthenetbookvalueofthe assetswrittenoff.

Governmentgrantstomeetthecurrentyear’soperatingexpensesaretakentotheStatementofIncomeand Expenditurefortheyear.

Governmentgrantsareaccountedforonanaccrualbasis.

NOTES TO ThE FINANCIAl STATEMENTS (CONT’D)

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2.5 Funds

General Fund Incomeandexpenditure relating to themainactivitiesof thePolytechnicareaccounted for through the GeneralFundintheStatementofIncomeandExpenditure. Restricted Funds Incomeandexpenditure relating to fundssetup forcontributions receivedandexpenditure incurred for specific purposes are accounted for through the Restricted Funds in the Statement of Income and Expenditure.

Theassetsandliabilitiesofthesefundsareaccountedforseparately.However,forpresentationpurposes,they arepooledtogetherwiththoseoftheGeneralFund.

2.6 Property, plant and equipment

Property,plantandequipmentarestatedatcostlessaccumulateddepreciationandimpairmentlosses. Donatedassetsarerecordedatvaluationastheircostbase.Depreciationisprovidedonastraight-linebasis soastowriteoffitemsoftheproperty,plantandequipmentovertheirestimatedusefullivesasfollows:

Leaseholdland Overleasetermof99years Leaseholdbuilding 50years Building improvements 5 years Furniture,fittingsandequipment 5years Computer hardware and software 3 to 5 years Workshopequipmentandmachinery 5to10years Vehicles 5years Plant and machinery 10 years

Property,plantandequipmentcostinglessthan$2,000arechargedtotheStatementofIncomeandExpenditure intheyearofpurchase.

Capitalwork-in-progressrelatingtoleaseholdimprovementsarestatedatcost.Nodepreciationischargedon capitalwork-in-progress.Uponcompletionofthecapitalwork-in-progress,theproperty,plantandequipment aretransferredtotherespectiveproperty,plantandequipmentcategoriesandaredepreciatedaccordingly.

Depreciationmethods,usefullivesandresidualvaluesarereviewed,andadjustedasappropriate,ateach reportingdate.

2.7 Subsidiaries

SubsidiariesarecompaniescontrolledbythePolytechnic.ControlexistswhenthePolytechnichasthepower, directlyorindirectly,togovernthefinancialandoperatingpoliciesofacompanysoastoobtainbenefitsfrom itsactivities.

InvestmentinsubsidiaryisstatedinthePolytechnic’sbalancesheetatcostlessimpairmentlosses.


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2.8 Financial instruments

Non-derivative financial instruments Non-derivativefinancialinstrumentscompriseinvestmentsindebtsecurities,fundsmanagedbyfundmanagers, tradeandotherreceivables,loanreceivables,cashandcashequivalents,andtradeandotherpayables.

Non-derivativefinancialinstrumentsarerecognisedinitiallyatfairvalueplus,forinstrumentsnotatfairvalue throughincomeandexpenditure,anydirectlyattributabletransactioncosts.

Debt securitiesand fundsmanagedby fundmanagersareclassifiedasavailable-for-salefinancialassets. Subsequent to initial recognition, they are measured at fair value and changes therein, other than for impairmentlosses,andforeignexchangegainsandlossesonavailable-for-salemonetaryassetsarerecognised directlyinFairValueReserve.Whentheinvestmentisderecognised,thecumulativegainorlossintheFair ValueReserveistransferredtotheStatementofIncomeandExpenditure.

Thefairvalueoffinancialinstrumentsclassifiedasavailable-for-saleisdeterminedasthequotedbidpriceor fairvalueestimatesprovidedbythefundmanagersatthebalancesheetdate.

Subsequenttoinitialrecognition,othernon-derivativefinancialinstrumentsaremeasuredatamortisedcost usingtheeffectiveinterestmethod,lessanyimpairmentlosses.

AfinancialinstrumentisrecognisedifthePolytechnicbecomesapartytothecontractualprovisionsofthe instrument.FinancialassetsarederecognisedifthePolytechnic’scontractualrightstothecashflowsfromthe financialassetsexpireorifthePolytechnictransfersthefinancialassettoanotherpartywithoutretaining controlortransferssubstantiallyalltherisksandrewardsoftheasset.Financialliabilitiesarederecognisedif thePolytechnic’sobligationsspecifiedinthecontractexpireoraredischargedorcancelled.

Cashandcashequivalentscomprisecashbalancesandbankdeposits.

Impairment of financial assets Afinancialassetisconsideredtobeimpairedifobjectiveevidenceindicatesthatoneormoreeventshavehad anegativeeffectontheestimatedfuturecashflowsofthatasset.

Animpairmentlossinrespectofafinancialassetmeasuredatamortisedcostiscalculatedasthedifference betweenitscarryingamount,andthepresentvalueoftheestimatedfuturecashflowsdiscountedatthe originaleffectiveinterestrate.

Individuallysignificantfinancialassetsaretestedforimpairmentonanindividualbasis.Theremainingfinancial assetsareassessedcollectivelyingroupsthatsharesimilarcreditriskcharacteristics.

AllimpairmentlossesarerecognisedintheStatementofIncomeandExpenditure.

An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairmentlosswasrecognised.Forfinancialassetsmeasuredatamortisedcost,thereversalisrecognisedin theStatementofIncomeandExpenditure.


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2.9 impairment - non-financial assets

ThecarryingamountsofthePolytechnic’snon-financialassetsarereviewedateachreportingdatetodetermine whetherthereisanyindicationofimpairment.Ifanysuchindicationexists,theassets’recoverableamounts areestimated.

Animpairmentlossisrecognisedifthecarryingamountofanassetoritscash-generatingunitexceedsits recoverableamount.Acash-generatingunitisthesmallestidentifiableassetgroupthatgeneratescashflows thatlargelyareindependentfromotherassetsandgroups.ImpairmentlossesarerecognisedintheStatement ofIncomeandExpenditure.

Therecoverableamountofanassetorcash-generatingunitisthegreaterofitsvalueinuseanditsfairvalue lesscoststosell.Inassessingvalueinuse,theestimatedfuturecashflowsarediscountedtotheirpresent valueusingapre-taxdiscountratethatreflectscurrentmarketassessmentsofthetimevalueofmoneyand therisksspecifictotheassetorcash-generatingunit.

Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the losshasdecreasedornolongerexists. Animpairmentloss isreversediftherehasbeenachangeinthe estimatesusedtodeterminetherecoverableamount. An impairment loss is reversedonly totheextent thattheasset’scarryingamountdoesnotexceedthecarryingamountthatwouldhavebeendetermined,net ofdepreciation,ifnoimpairmentlosshadbeenrecognised.

2.10 operating leases

WherethePolytechnichastheuseofassetsunderoperatingleases,paymentsmadeundertheleasesare recognisedintheStatementofIncomeandExpenditureonastraight-linebasisoverthetermofthelease.

2.11 employee benefits

Defined contribution plans Obligationsforcontributionstopost-employmentbenefitsunderdefinedcontributionplansarerecognised asanexpenseintheStatementofIncomeandExpenditureasincurred.

Short-term employee benefits Allshort-termemployeebenefits,includingemployeeleaveentitlements,arerecognisedintheStatementof IncomeandExpenditureintheperiodinwhichtheemployeesrendertheirservicestothePolytechnic.

2.12 Fiduciary transactions

AssetsheldbythePolytechnicinfiduciaryoragencycapacitieshavenotbeenincludedinthebalancesheet sincesuchitemsarenotassetsofthePolytechnic.


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3 Operating (Deficit)/Surplus 2006/07 2005/06 $’000 $’000

Thefollowingitemshavebeenincludedinarriving atoperating(deficit)/surplus: Exchangegain 20 13 Operating leases 232 202 Allowancemadeondoubtfulreceivables 21 – Contributiontodefinedcontributionplanincludedinsalaries 10,665 10,623

4 Interest Income 2006/07 2005/06 $’000 $’000 Interestincome: Bonds 40 75 Fixeddeposits 3,613 1,885 Current accounts 131 69 3,784 2,029

5 Operating Grants – Government note 2006/07 2005/06 $’000 $’000

Operatinggrantsreceivedduringtheyear 145,686 132,317 Less: Operatinggrantsutilisedonproperty,plantandequipment transferred to deferred capital grants - Government 16 5,091 5,793 Operatinggrantsutilisedonco-fundedproperty,plant andequipmenttransferredtodeferredcapitalgrants -Others 17 – 9 5,091 5,802 140,595 126,515


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6 Accumulated Surplus

general Fund Asatbalancesheetdate,thePolytechnichascapitalcommitmentofapproximately$2.6million(2006:$0.66 million).

restricted Funds RestrictedFundscomprisethefollowingfunds:

name of Fund Purpose Bursary,ScholarshipandAwardsFund Providing financial assistance to needy students, scholarshipstostudentsandbookprizesandmedals to students and graduateswho excel academically andinextra-curricularactivities. StaffApartmentFund MaintainingandupgradingofthePolytechnic’sstaff apartments.

TemasekPolytechnicEndowmentFund Providingfinancialsupportfor: (a)staffdevelopment; (b)studentdevelopment,focusingon internationalexchange; (c)promotionofinnovation; (d)bringingrelevantworld-classexpertiseto thePolytechnic; (e)scholarshipstooutstandingstudents;and (f) bursariestodeservingneedystudents.

MiscellaneousFund Conducting pre-employment education for the - Self-financingProjectFund hospitalityandtourismworkforceinSingapore,short and continuing education courses; upgrading Polytechnic’steachingfacilities;andprovidingwelfare andwellnessactivitiesforthePolytechnic’sstudents andstaff.


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6 Accumulated Surplus (cont’d)

Breakdownof the incomeandexpenditureof the fundswhich arepooledunder“Restricted Funds” in the StatementofIncomeandExpenditureisasfollows:

Bursary, Scholarship Staff apartment Temasek Polytechnic Miscellaneous and awards Fund Fund endowment Fund Fund Total restricted Funds 2006/07 2005/06 2006/07 2005/06 2006/07 2005/06 2006/07 2005/06 2006/07 2005/06 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Operating Income Studentfees – – – – – – 2,873 1,584 2,873 1,584 Otherincome – – 366 296 – – 55 48 421 344 Donations -taxdeductible 221 264 – – – – 10 – 231 264 -nontaxdeductible 121 60 – – – – – – 121 60 Courses,projects,seminars andtalks – – – – – 4,849 3,434 4,849 3,434 342 324 366 296 – – 7,787 5,066 8,495 5,686

Operating Expenditure Salaries,CPFandother relatedcosts – – – – – – 1,490 848 1,490 848 Staffbenefits – – – – – – 14 4 14 4 Depreciation – – 1 1 – – 725 626 726 627 Property,plantandequipment expensedoff – – 3 1 – – 17 7 20 8 Officesupplies,stationery andperiodicals – – – – – – 4 10 4 10 Publicityandpromotion – – – – – – 26 37 26 37 Rental – – – – – – 6 5 6 5 Repairsandmaintenance – – – – – – 539 382 539 382 Teachingmaterialsand consumablesupplies – – – – – – 97 73 97 73 Studentwelfare – – – – – – 78 70 78 70 Travellingandcommunication – – – – – – 80 81 80 81 Auditfee – – – – – – 6 5 6 5 Miscellaneous 274 296 315 296 – – 32 49 621 641 Courses,projects,seminars andtalks – – – – – – 2,489 1,654 2,489 1,654 274 296 319 298 – – 5,603 3,851 6,196 4,445


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6 Accumulated Surplus (cont’d)

Bursary, Scholarship Staff apartment Temasek Polytechnic Miscellaneous and awards Fund Fund endowment Fund Fund Total restricted Funds 2006/07 2005/06 2006/07 2005/06 2006/07 2005/06 2006/07 2005/06 2006/07 2005/06 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Operating(deficit)/surplus 68 28 47 (2) – – 2,184 1,215 2,299 1,241

Non-Operating Income Interest 4 2 – – 47 36 286 198 337 236 (Deficit)/Surplus for the year 72 30 47 (2) 47 36 2,470 1,413 2,636 1,477 accumulated Surplus at 1 april 312 282 2,901 2,903 103 67 13,676 12,263 16,992 15,515 accumulated Surplus at 31 March 384 312 2,948 2,901 150 103 16,146 13,676 19,628 16,992

Represented by: Property,plantandequipment – – 1 2 – – 1,608 2,266 1,609 2,268 Deposits,prepaymentsand otherreceivables – – 1 1 15 14 1,434 1,087 1,450 1,102 Cashandcashequivalents 384 312 2,976 2,908 135 89 14,065 11,722 17,560 15,031 Tradeandotherpayables – – (30) (10) – – (961) (1,399) (991) (1,409) 384 312 2,948 2,901 150 103 16,146 13,676 19,628 16,992


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7 Temasek Polytechnic Endowment Fund

DonationsandcontributionsmadetotheTemasekPolytechnicEndowmentFundareretainedasprincipalcapital tobekeptintacttoearnincome.

Incomeandexpenditureofthefundaretakento“RestrictedFunds”intheStatementofIncomeandExpenditure (Note6).

2006/07 2005/06 $’000 $’000

At1April 1,508 1,408 Donations received 100 100 At31March 1,608 1,508

Representedby: Cashandbankbalances 268 168 Fixeddeposits 1,090 1,090 Investmentinbonds 250 250 1,608 1,508


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8 Property, Plant and Equipment Leasehold Furniture, Workshop Plant land fittings equipment and Capital and Building and Computer and Computer and work-in- building improvements equipment hardware machinery vehicles software machinery progress Total

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

Cost At1April2005 475,669 20,166 52,873 72,324 34,079 149 24,894 78,956 4,901 764,011 Additions 9 329 1,424 5,563 1,511 – 923 13 8,203 17,975 Transfers 4,450 539 1,335 983 602 – 101 3,900 (11,910) – Disposals – (100) (771) (4,582) (203) – (846) – – (6,502) At31March2006 480,128 20,934 54,861 74,288 35,989 149 25,072 82,869 1,194 775,484

At1April2006 480,128 20,934 54,861 74,288 35,989 149 25,072 82,869 1,194 775,484 Reclassification (377) – 2 (2) – – – 377 – – Additions 28 262 1,139 2,242 1,526 – 2,141 44 8,426 15,808 Transfers – 295 320 9 37 – 2,344 – (3,005) – Disposals – (4) (2,046) (4,585) (200) – (484) (141) – (7,460) At31March2007 479,779 21,487 54,276 71,952 37,352 149 29,073 83,149 6,615 783,832

accumulated depreciation At1April2005 80,332 15,497 48,723 66,509 27,358 144 21,157 67,593 – 327,313 Depreciation charge fortheyear 8,948 2,538 2,108 4,235 3,037 5 2,001 6,484 – 29,356 Disposals – (100) (768) (4,582) (195) – (846) – – (6,491) At31March2006 89,280 17,935 50,063 66,162 30,200 149 22,312 74,077 – 350,178

accumulated depreciation At1April2006 89,280 17,935 50,063 66,162 30,200 149 22,312 74,077 – 350,178 Reclassification (10) – 1 (1) – – – 10 – – Depreciation charge fortheyear 8,999 1,174 1,861 4,202 2,742 – 1,881 1,949 – 22,808 Disposals – (4) (2,045) (4,586) (200) – (409) (141) – (7,385) At31March2007 98,269 19,105 49,880 65,777 32,742 149 23,784 75,895 – 365,601

Carrying amount At1April2005 395,337 4,669 4,150 5,815 6,721 5 3,737 11,363 4,901 436,698 At31March2006 390,848 2,999 4,798 8,126 5,789 – 2,760 8,792 1,194 425,306

At1April2006 390,848 2,999 4,798 8,126 5,789 – 2,760 8,792 1,194 425,306 At31March2007 381,510 2,382 4,396 6,175 4,610 – 5,289 7,254 6,615 418,231


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9 Loans to Staff and Students

(a) Staff Loans Housingloansarerepayablewithinterestat5%perannumbymonthlyinstalmentsoverperiodsupto30 years.

(b) Tuition Fee/Study Loans Tuitionfeeloansaregrantedtostudentsinterest-freeuntiltheyearoftheirgraduation.Thereafter,loansare repayablebymonthlyinstalmentswithinterestbasedontheaverageprimeratesofthe3localbigbanksor suchotherrateasmaybedeterminedbythePolytechnic.

Studyloansaregrantedtostudentsinterest-free.Suchloansarerepayablebymonthlyinstalmentswithin2 yearsfromthe7thmonthimmediatelyfollowingthemonthoftheborrowers’graduation.

2006/07 2005/06 $’000 $’000 Due after 12 months Staff loans 96 194 Tuitionfeeloans 4,461 4,136 4,557 4,330

Due within 12 months Staff loans 18 69 Tuitionfeeloans 868 910 Study loans 1 1 887 980

Staffloansandtuitionfee/studyloansaredisbursedfromadvancesfromtheGovernmentandrepaymentof theloanswilleventuallybereturnedtoGovernment.

(c) ThePolytechnicbearsnocreditriskonloansextendedtostaffandstudentssincetheloanswerefullyfunded bygovernmentgrants.

10 Subsidiaries

Detailsofthesubsidiaries,incorporatedandconductingbusinessintheRepublicofSingapore,areasfollows: name of subsidiary Percentage held by the Polytechnic 2006/07 2005/06 % % TPInnovationHoldingsPteLtdanditssubsidiary: TPEducationServicesPteLtd 100 100

Atthebalancesheetdate,thePolytechnichadgivenanundertakingtoprovidecontinuingfinancialsupportto thesubsidiaries.

Theassets,liabilitiesandresultsofthesubsidiarieshavenotbeenconsolidatedastheyarenotconsideredtobe materialtothePolytechnic’sfinancialstatements.


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11 Investments

2006/07 2005/06 $’000 $’000 Available-for-sale: Debtsecurities,carriedatfairvalue 2,270 2,251 Fundsmanagedbyfundmanagers,carriedatfairvalue 38,616 33,565 40,886 35,816

Maturing: Within1year 26,193 1,996 From1to5years 14,426 33,565 After 5 years 267 255 40,886 35,816

Thedebtsecuritiesbearinterestratesrangingfrom4.17%to5.3%(2006:3.215%to4.17%)perannumasat thebalancesheetdate.Interestisreceivableonasemi-annualbasis.Thematuritydatesofbondsrangefrom 13December2011to10May2016.

2006/07 2005/06 $’000 $’000 Fundsmanagedbyfundmanagerscompriseof: Atfairvalue: Debtsecurities 3,881 6,658 Equitysecurities 13,602 11,855 Otherfinancialassets 5,829 1,992 Unittrusts 15,304 13,060 38,616 33,565

Thefundsplacedwithprofessionalfundmanagersareonadiscretionarybasis.

12 Trade and Other Receivables

2006/07 2005/06 $’000 $’000 Tradereceivables 913 768 Allowancefordoubtfulreceivables (21) – Netreceivables 892 768 Deposits and prepayments 502 714 Sundrydebtors 3,853 1,742 5,247 3,224


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13 Cash and Cash Equivalents 2006/07 2005/06 $’000 $’000

Fixeddepositswithfinancialinstitutions 95,368 114,656 Cashandbankbalances 26,645 4,613 122,013 119,269

Cashandcashequivalentsincludeabalanceof$165,000(2006:$448,000)representingundisbursedgovernment advancesforstudenttuitionfeeandstudyloans(Note15).

Thefixeddepositsbearinterestratesof3.2%to3.355%(2006:2.3125%to3.375%)perannumasatthe balancesheetdate.Interestratesarerepriceableatintervalsoffivetotwelvemonths.

Excludedfromtheabovearebankbalancesandfixeddepositswithfinancialinstitutions,amountingto$256,000 (2006:$240,000),whichareheldintrustbythePolytechnicforCampusCareNetworkFund.

14 Trade and Other Payables

2006/07 2005/06 $’000 $’000

Tradecreditors 5,623 5,041 Sundrycreditors 4,471 4,018 Accruals 6,765 5,660 Amountduetosubsidiary – 64 Deferredincomeforcourseinprogress 1,201 1,578 Othergrantsreceivedinadvance – 2 18,060 16,363

Theamountduetosubsidiarywasunsecured,interest-freeandrepayableondemand.


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15 Government advances for Staff and Student Loan

(a) Staff Loan ThiscomprisesadvancesfromGovernment,provideshousingloanstostaff.Thehousingloansaremanaged byafinancialinstitutiononbehalfofthePolytechnic.

On11October2001,theMinistryofEducationissuedacircularstatingthatwitheffectivefromfinancial yearended2002/2003,allnewstaffhousingloansshouldbeobtaineddirectlyfromfinancial institutions orfromthePolytechnicitselfinsteadoffromtheGovernment.Existinghousingloanswillcontinuetobe bornebytheGovernmentuntiltheyarefullyrepaid.Repaymentoftheseloansaswellasunutilisedfunds wouldhavetobereturnedtotheGovernment.

(b) Tuition Fee Loan/Study Loan TuitionfeeloancomprisesadvancesfromGovernment,providestuitionfeeloanstostudents.Thetuition feeloansareadministeredbyafinancialinstitution.Loansgiventostudentsareinterest-freeuntil1February or1Augustintheyearoftheirgraduation,orforthosewithNationalServiceobligation,intheyearinwhich theyfinishtheirNationalService.Thereafter,loansarerepayablebymonthlyinstalmentswithinterestbased ontheaverageprimeratesofbanksorsuchotherrateasmaybedeterminedbythePolytechnic.

StudyloancomprisesadvancesfromGovernment,providesloanstoneedystudents.

RepaymentoftheloanswilleventuallybereturnedtoGovernment.Accordingly,thecarryingamountsof staffandstudentloansapproximatetheirfairvalues.

ThebankbalancesrepresentundisbursedgovernmentadvancesincludedinthePolytechnic’scashandcash equivalents. Staff Loan Tuition Fee Loan Study Loan Total 2006/07 2005/06 2006/07 2005/06 2006/07 2005/06 2006/07 2005/06 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

At1April 263 533 5,488 5,488 7 7 5,758 6,028 Amount refunded toGovernment (149) (270) – – – – (149) (270) At31March 114 263 5,488 5,488 7 7 5,609 5,758 Represented by: Outstanding loans Staffloans 114 263 – – – – 114 263 Tuitionfeeloans – – 5,329 5,046 – – 5,329 5,046 Studyloans – – – – 1 1 1 1 Bankbalance – – 159 442 6 6 165 448 114 263 5,488 5,488 7 7 5,609 5,758


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16 Deferred Capital Grants - Government note 2006/07 2005/06 $’000 $’000

At1April 421,970 434,075 Developmentgrants: Utilised 6,643 10,052 Operatinggrants: Utilised 5 5,091 5,793 F&EandITgrants: Utilised 3,769 – Unutilised 9,241 – 446,714 449,920 Amortisation (21,545) (27,950) At31March 425,169 421,970

17 Deferred Capital Grants - Others note 2006/07 2005/06 $’000 $’000

At1April 1,057 1,653 Grantsutilisedonproperty,plantandequipment 165 183 Operatinggrantsutilisedonco-fundedproperty,plant andequipment 5 – 9 1,222 1,845 Amortisationofdeferredcapitalgrants (538) (788) At31March 684 1,057

18 Taxation

ByvirtueofSection13M(2)(b)oftheIncomeTaxAct,Chapter134,thePolytechnicisexemptedfromtaxation provided80%ofitsadjustedincomeforeachfinancialyearisspentforcharitablepurposesbytheendofthe followingyear.

AsthePolytechnichadmetthe80%spendingrequirement,noprovisionfortaxationhasbeenmadeinthe financialstatementsforthecurrentfinancialyear.


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19 The Temasek Polytechnic General Education Fund

InNovember2002,theBoardofGovernorsofthePolytechnicapprovedthesettingupoftheTemasekPolytechnic GeneralEducationFund. Thefundwassubsequentlygrantedthemembershipby theMinistryofEducation undertheEducationCentralFundforaperiodoffiveyearswitheffectfrom1April2003.Themembershipis subjecttorenewaluponexpiry.

Under thismembership, the Polytechnic is allowed to issue tax-deductible receipts to donors for donations contributedtowardsBursary,ScholarshipandAwardsFund,TemasekPolytechnicEndowmentFundandother educationrelatedactivitieswhichqualifyfortaxdeduction.ThePolytechnichassetupaManagementCommittee toadministerthereceiptsanddisbursementofthetax-deductibledonationsgivenbythedonors.

The statement of the tax-deductible donations received for the Bursary, Scholarship and Awards Fund and TemasekPolytechnicEndowmentFundandthedisbursementsinthefinancialyearisgivenbelow:

2006/07 2005/06 $’000 $’000

Tax-deductibledonationsreceived: EndowmentFund 100 100 Bursaries,scholarshipsandawards 221 264 Generaldonations 73 – Other income 12 8 406 372 Disbursements: Bursaries,scholarshipsandawards (226) (232) Generaldonations (64) (1) (290) (233) Excessofdonationsandincomeoverdisbursements 116 139

Thedisbursementsweremadefromdonationsreceivedincurrentandprioryears.

20 Commitments

Thefutureminimumleasepaymentsundernon-cancellableoperatingleasesarepayableasfollows:

2006/07 2005/06 $’000 $’000

Notlaterthanonefinancialyear 221 207 Laterthanonefinancialyearbutnotlaterthanfivefinancialyears 126 245 347 452

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21 Appropriation of Accumulated Surplus

ThePolytechnicreceivedamemofromMinistryofEducationdated3July2002whichconfirmedthatMinistry of Finance (“MOF”)hadnoobjection for thePolytechnic to retain theunutilised surplusgeneratedprior to financialyear2000/2001asworkingcapital.

For thesurplusgeneratedfromfinancialyear2000/2001onwards, thePolytechnic isallowedtoretainall in accordancewithMOF’scirculardated4December2000.

22 Key Management Personnel Compensation

Keymanagementpersonnelof thePolytechnicare thosepersonshaving theauthorityand responsibility for planning,directingandcontrollingtheactivitiesoftheentity.ThePrincipal,DeputyPrincipalsandDirectorsare consideredaskeymanagementpersonnelofthePolytechnic.

2006/07 2005/06 $’000 $’000

Short-termbenefits 3,402 3,465

23 Financial Instruments

RiskmanagementisintegraltothewholeactivitiesofthePolytechnic.ThePolytechnichasasystemofcontrols inplacetocreateanacceptablebalancebetweenthecostofrisksoccurringandthecostofmanagingtherisks. ThePolytechniccontinuallymonitorsthePolytechnic’sriskmanagementprocesstoensurethatanappropriate balancebetweenriskandcontrolisachieved.

Credit risk Creditriskisthepotentiallossresultingfromthefailureofastudentoracounterpartytosettleitsfinancialand contractualobligationstothePolytechnic,asandwhentheyfalldue.

Cashandfixeddepositsandfundsareplacedwithbanksandfinancialinstitutionswhichareregulated.

Atthebalancesheetdate,therewasnosignificantconcentrationofcreditriskexceptforgovernmentgrant receivablesandfundsmanagedbyfundmanagers.Themaximumexposuretocreditriskisrepresentedbythe carryingamountofeachfinancialassetinthebalancesheet.

Liquidity risk ThePolytechnicmonitorsitsliquidityriskandmaintainsalevelofcashandcashequivalentsdeemedadequate tofinancethePolytechnic’soperationsandtomitigatetheeffectsoffluctuationsincashflow.

Interest rate risk ThePolytechnic’sexposuretochangesininterestratesrelatesprimarilytointerest-earningfinancialassets.

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23 Financial Instruments (cont’d)

SurplusfundsfromthePolytechnic’soperationsareinvestedinbankdepositsanddebtsecurities.ThePolytechnic’s exposuretointerestrateriskrelatesprimarilytothefixeddepositsandbonds.

Foreign currency risk The Polytechnic incurs minimal foreign currency risk on sales and purchases as these are predominantly denominatedinSingaporedollars.

Fair values ThefairvaluesofthestaffandstudentloansareasdetailedinNote15.

ThecarryingamountofthePolytechnic’sotherfinancialassetsandliabilitiesapproximatetheirfairvaluesdueto therelativelyshort-termnatureofthesefinancialinstruments.

24 New accounting standards and interpretations not yet adopted

ThePolytechnichasnotappliedthefollowingaccountingstandardsandinterpretationsthathavebeenissued asofthebalancesheetdatebutarenotyeteffective: •FRS40Investment Property •FRS107Financial Instruments: Disclosures and the Amendment to FRS 1 Presentation of Financial Statements: Capital Disclosures •INT FRS 107 Applying the Restatement Approach under FRS 29 Financial Reporting in Hyperinflationary Economies •INTFRS108Scope of FRS 102 Share-based Payment •INTFRS109Reassessment of Embedded Derivatives •INTFRS110Interim Financial Reporting and Impairment

Theinitialapplicationofthesestandardsandinterpretationsisnotexpectedtohaveanymaterialimpactonthe Polytechnic’s financial statements. The Polytechnic has not considered the impact of accounting standards issuedafterthebalancesheetdate.

25 Comparative Information

Certainitemsinthecomparativefiguresshowninthecashflowstatementandtradeandotherreceivableshave beenreclassifiedtoconformwiththecurrentyear’spresentation.

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