agency for volunteer service report of the directors ... · camilla, dr au yiu kai, ms lam tyng...

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AGENCY FOR VOLUNTEER SERVICE

REPORT OF THE DIRECTORS

The directors have pleasure in submitting their annual report together with the audited financial statements of the Agency for Volunteer Service (the “Agency”) for the year ended 31 March 2018.

Principal activities

The principal activities of the Agency are promoting and developing volunteer services in Hong Kong, including:

(i) volunteer referral which refers appropriate volunteers to organisations requiring their services; (ii) volunteer action which provides managed service opportunities for individuals to participate as

volunteers; (iii) provision of training for volunteers and volunteer users; (iv) provision of technical assistance for organisations to improve their use of volunteer manpower and skills; (v) publication, promotion and public education to promote volunteer service; and (vi) operation of a neighbourhood elderly centre.

Results and appropriations

The results of the Agency for the year ended 31 March 2018 are set out in the Statement of Comprehensive Income on page 9.

Directors

The directors who held office during the year and up to the date of this report were:

Dr. Shum Chi Wang Chairman Mr. Fan Chor Ho, Paul, SBS, JP Vice-Chairman Ms. Tsang Pui Kuen, Camilla Vice-Chairman Dr. Au Yiu Kai Honorary Secretary Ms. Lam Tyng Yih, Elizabeth Honorary Treasurer Mr. Barretto Ruy Octavio, SC Sr. Chan Chi Ho, Sunny (Appointed on 2 November 2017) Mr. Chan Ka Hong, Roland Mr. Chan Ka Kui, SBS, JP Mr. Chong Chong Yip, BBS, JP (Resigned on 2 November 2017) Mr. Fung Ka Ching Ms. Hai Hiu Chu, Winsome Prof. Lai Nin, Alan, GBS, JP Mr. Lee Chee Wah, Wilfred, MH (Resigned on 2 November 2017) Mr. Lee Jark Pui, SBS, OBE, JP (Resigned on 2 November 2017) Ms. Loh Yu Hang, Anne (Appointed on 2 November 2017) Prof. Lui Tai Lok (Resigned on 2 November 2017) Mr. Mo Tik Sang, Alex Mr. Yam Kevin Mr. Yung Ha Kuk, Victor (Appointed on 2 November 2017)

In accordance with Articles 78, 79 and 80 of the Agency’s Articles of Association, Ms Tsang Pui Kuen, Camilla, Dr Au Yiu Kai, Ms Lam Tyng Yih, Elizabeth, Mr Mo Tik Sang, Alex, and Mr Kevin Yam retire from office at the forthcoming annual general meeting and are eligible for re-election.

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REPORT OF THE DIRECTORS (CONTINUED)

Directors’ material interests in transactions, arrangements and contracts that are significant to the Agency’s operations

No transactions, arrangements or contracts of significance in relation to the Agency’s operations to which the Agency was a party and in which a director of the Agency had a material interest, whether directly or indirectly, subsisted at the end of the year or at any time during the year.

Management contracts

No contracts concerning the management and administration of the whole or any substantial part of the business of the Agency were entered into or existed during the year.

Business review

Business Performance and Important Events

The Agency for Volunteer Service (the “Agency”) is a non-profit charitable organization incorporated in Hong Kong limited by guarantee. It is mainly financed by the Government, The Community Chest of Hong Kong and The Hong Kong Jockey Club Charities Trust (the “HKJC”). With the vision to build a civil society and caring community, the Agency is dedicated to playing a proactive and pivotal role in the promotion and development of sustainable volunteerism and developing partnership with all sectors of the community and other effective means to provide value added and quality volunteer service.

The year was challenging but fruitful. Most of the programmes and services were well accomplished and the financial position was fairly healthy.

In celebration of the 20th anniversary of the establishment of the Hong Kong Special Administrative Region, the “Volunteer Long Service Award” was set up under the 7th Hong Kong Volunteer Award, to recognize volunteers who have rendered volunteer service for the past 20 consecutive years.

The Cross-Strait, Hong Kong & Macau Youth Volunteering Forum was organized with the strong support from partner organisations in the Mainland, Taiwan, Hong Kong and Macau. There were 246 youth and youth leaders participating with very good feedback.

With increased subsidy from the Home Affairs Bureau, the UNV-Hong Kong Universities Volunteer Internship Programme doubled the quota in the year. 20 undergraduates were selected for assignments in the South East Asian countries. To strengthen the ties among the former volunteers and to facilitate further endeavour on promoting volunteerism, the United Nations Volunteers Alumni Society was set up in December 2017.

The Commission on Poverty re-appointed the Agency to manage the second round of the Life Buddies Mentoring Programme which commenced in September 2017. A grant of $850,000 was approved for the promotion of the mentoring culture to help the grassroot youth moving upward in the community.

The Share-To-Care Volunteer Campaign (the “Campaign”) was successfully organized in a smaller scale based on a new model under which gift items were enlisted from corporate donors for the caring visits of volunteers. The Campaign engaged 65 organisations and 1,500 volunteers to serve 2,500 underprivileged elderlies and families. The Campaign solicited almost $300,000 in sponsorship for organizing the meaningful event.

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REPORT OF THE DIRECTORS (CONTINUED) Business review (Continued) Business Performance and Important Events

5,771 individual members and 178 corporate members were registered under the Hong Kong Community Volunteers, overachieving the year’s target by 5% and 15%, respectively. The number of service hours performed by both individual and corporate volunteers reached a total of 218,720 hours, exceeding the target by 35%. Volunteer Talent Bank was funded by HKJC Community Project Grant for building a special volunteer talent force to provide quality service to the needy. During the year, there were 1,306 registered volunteers with 54,392 service hours performed for 172,360 beneficiaries, well exceeding the target by 15%. During the year, the Community Chest of Hong Kong increased the baseline allocation by 3% mainly for the Volunteer Training and Development Centre, which was established to deliver volunteer training programmes for enhancing the quality of volunteer service. Subvented by the Social Welfare Department, the Western Garden Neighbourhood Elderly Centre dedicated its resources to provide needed services for the elderly members, carers and the development of volunteers. As for fundraising, a total of $926,846 was raised in the year including $688,582 from the Charity Run & Walk for Volunteering. Principal Risks and Uncertainties The promotion and development of volunteerism is highly reliant upon the annual subvention of $10 million from the Home Affairs Bureau. This subvention level has not been reviewed since 2014. With increasing service demands and the rising price index, the Agency faces financial pressure to provide quality services and to sustain growth in the foreseeable future. Initial dialogue has started with the Government on the need for funding increase. The Agency’s service programmes have long outgrown its existing office space. The Agency has kept making effort to locate affordable premises to meet the current needs and to cater for future service expansion. Furthermore, recruitment and retention of quality staff continued to be a challenge to the Agency, amid the competitive labour market. Future Development in Business

With an aim to achieve higher effectiveness and efficiency in the engagement of volunteers, the Agency has successfully obtained a grant of $7,080,000 from the HKJC for implementing an advanced volunteer networking system. A Project Steering Committee has been set up to monitor the project progress in respect of the evaluation of tender requirements and the selection of system implementation service provider and business analyst service. The Social Welfare Development Fund (Phase 3) has allocated a sum of $162,600 for the year for staff training and professional development programmes up to 2018-19. The Agency also submitted for its consideration the funding application for two IT projects, a membership management system for the Western Garden Neighbourhood Elderly Centre and the development of an upgraded accounting system.

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REPORT OF THE DIRECTORS (CONTINUED) Business review (Continued) Financial Performance

The Agency recorded net surplus of $659,406 from operations, excluding designated and allocated projects, for the year ended 31 March 2018, as compared with $2,724,317 of last year. The decrease in surplus was mainly due to the launch of the Cross-Strait, Hong Kong and Macau Youth Volunteering Forum, which incurred net expenditure of $328,480 and an increase of $705,794 in personal emoluments, while not having a territory-wide flag-day fundraising event in the year. The Agency recorded financial reserves of $10,438,947 as at 31 March 2018, which included the Agency Development Fund of $5,347,501 and Operation Contingency Fund of $2,300,000. These funds are maintained to meet the future development of the Agency and for contingency needs.

Environmental Policies

The Agency was fully supportive of the environmental green policy and has encouraged staff and volunteer staff to save energy, reduce paper wastage and adopt green office environment. Compliance with Relevant Laws and Regulations

The Agency complied with all the relevant laws and regulations, and in particular, the Companies Ordinance, employment related legislations, the Lump Sum Grant Manual, the Best Practice Manual, the Service Quality Standards and Lotteries Fund Manual of the Social Welfare Department, and the Memorandum of Administrative Arrangements entered into with the Home Affairs Bureau. The Agency also fully observed all the respective guidelines which were agreed with the other funding bodies. Key Relationships with Employees, Customers and Suppliers

The Agency maintained good relationship with its members, volunteers, sponsors, partners, donors, service users and suppliers. They were kept in frequent contact and, where appropriate, were invited to the annual familiarization visit, the annual general meeting and related activities, where they could meet with the Board and Committee members, staff and volunteer staff and the management team. The Agency has established proper channels for complaints and maintained a complaint handling system which as applicable, were in line with the Service Quality Standards and the Best Practice Manual required by the Social Welfare Department.

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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF AGENCY FOR VOLUNTEER SERVICE

(Incorporated in Hong Kong limited by guarantee and not having a share capital)

We have audited the financial statements of Agency for Volunteer Service (the “Agency”) set out on pages 9

to 38, which comprise the Statement of Financial Position as at 31 March 2018, and the Statement of

Comprehensive Income, the Statement of Changes in Funds and the Statement of Cash Flows for the year then

ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the financial statements give a true and fair view of the financial position of the Agency as at

31 March 2018, and of its financial performance and its cash flows for the year then ended in accordance with

Hong Kong Financial Reporting Standards (“HKFRSs”) issued by the Hong Kong Institute of Certified Public

Accountants (“HKICPA”) and have been properly prepared in compliance with the Hong Kong Companies

Ordinance.

Basis for opinion

We conducted our audit in accordance with Hong Kong Standards on Auditing (“HKSAs”) issued by the

HKICPA. Our responsibilities under those standards are further described in the Auditor’s responsibilities for

the audit of the financial statements section of our report. We are independent of the Agency in accordance

with the HKICPA’s Code of Ethics for Professional Accountants (the “Code”), and we have fulfilled our other

ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is

sufficient and appropriate to provide a basis for our opinion.

Other Information

The directors of the Agency are responsible for the other information. The other information comprises the

information included in the Report of the Directors but does not include the financial statements and our

auditor’s report thereon.

Our opinion on the financial statements does not cover the other information and we do not express any form

of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is

to read the other information and, in doing so, consider whether the other information is materially inconsistent

with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially

misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other

information, we are required to report that fact. We have nothing to report in this regard.

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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF AGENCY FOR VOLUNTEER SERVICE (CONTINUED)

(Incorporated in Hong Kong limited by guarantee and not having a share capital)

Responsibilities of Directors and Those Charged with Governance for the Financial Statements

The directors of the Agency are responsible for the preparation of the financial statements that give a true and

fair view in accordance with HKFRSs issued by the HKICPA 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.

In preparing the financial statements, the directors of the Agency are responsible for assessing the Agency’s

ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the

going concern basis of accounting unless the directors of the Agency either intend to liquidate the Agency or

to cease operations or have no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Agency's financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free

from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our

opinion. We report our opinion solely to you, as a body, in accordance with Section 405 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.

Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance

with HKSAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or

error and are considered material if, individually or in the aggregate, they could reasonably be expected to

influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with HKSAs, we exercise professional judgement and maintain professional

skepticism throughout the audit. We also:

- Identify and assess the risks of material misstatement of the financial statements, whether due to fraud

or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that

is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material

misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve

collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

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STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 MARCH 2018 2018 2017

Note Recurrent Programmes

Designated Projects

Allocated Projects Total

Recurrent Programmes

Designated Projects


HK$ HK$ HK$ HK$ HK$ HK$ HK$ HK$

Income

Government Subventions and Funds 6

14,760,524 4,079,923 - 18,840,447 14,644,796 2,333,266 - 16,978,062

Allocations, Donations and Fundraising Income 7

7,540,596 1,208,835 - 8,749,431 8,235,209 1,971,728 - 10,206,937

Registration and Service Fee Income

1,345,823 3,263 - 1,349,086 1,378,184 2,079 - 1,380,263

Other Income 8

366,917 - - 366,917 393,543 1 - 393,544

Less: Elimination of Internal Income

- - - (366,615) - - - (434,273)

Total Income 24,013,860 5,292,021 - 28,939,266 24,651,732 4,307,074 - 28,524,533

Expenditure

Personal Emoluments

16,125,565 - - 16,125,565 15,419,771 - - 15,419,771

Rent, Rates and Management Fee

1,904,489 - - 1,904,489 1,866,899 - - 1,866,899

Administrative Expenses

1,790,357 - - 1,790,357 1,684,528 - - 1,684,528

Expenses for Fundraising Projects

167,079 - - 167,079 195,953 - - 195,953

Service and Programme Expenses

3,366,964 4,902,895 10,260 8,280,119 2,760,264 3,672,637 - 6,432,901

Less: Elimination of Internal Expenses

- - - (366,615) - - - (434,273)

Total Expenses 9

23,354,454 4,902,895 10,260 27,900,994 21,927,415 3,672,637 - 25,165,779

Surplus/(Deficit) for the

year

659,406 389,126 (10,260) 1,038,272 2,724,317 634,437 - 3,358,754

The revenue and expenditure items are classified into (1) recurrent programmes for volunteer service and general administration, (2) designated projects for purposes specified by the donors and managed under restricted funds of the Agency, and (3) allocated projects for funds set aside by the Agency for specific purposes. The notes on pages 15 to 38 are an integral part of these financial statements.

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STATEMENT OF CHANGES IN FUNDS FOR THE YEAR ENDED 31 MARCH 2018 Agency’s Funds Restricted Funds

General Fund

Agency Development

Fund

Operation Contingency

Fund

HAB Subvention

Reserve

Lump Sum Grant

Reserve

Provident Fund

Reserve under Lump Sum Grant

Block Grant Reserve

Other Designated

Services

Other Allocated

Funds

Total

HK$ HK$ HK$ HK$ HK$ HK$ HK$

HK$ HK$

HK$

At 31 March 2017

2,007,743 5,347,501 2,300,000 1,797,947 815,077 95,615 151,592

1,352,226 29,473

13,897,174

Surplus/(Deficit) for the year

659,406 - - - - - - 389,126 (10,260) 1,038,272 Transfer (from)/to General Fund to/(from) Block

Grant, Lump Sum Grant and Provident Fund Reserve under Lump Sum Grant

(163,233) - - - 102,783 12,228 65,000

- -

16,778 Transfer (from)/to General Fund to/(from) HAB

Subvention Reserve

293,816 - - (489,100) - - -

- -

(195,284) Transfer from General Fund to Other Designated

Services

(135,012) - - - - - -

135,012 -

- Transfers of Funds upon completion of designated

projects

- Inno Carnival - - - 989 - - - (989) -

-

- Life Buddies Portal I 109,513 - - - - - -

(109,513) -

-

- United Nations Volunteers - - - (272,263) - - - 272,263 -

- Transfer to/(from) General Fund (from)/to Other

Allocated Funds

19,213 - - - - - - - (19,213)

-

At 31 March 2018

2,791,446 5,347,501 2,300,000 1,037,573 917,860 107,843 216,592 2,038,125 - 14,756,940

The notes on pages 15 to 38 are an integral part of these financial statements.

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STATEMENT OF CHANGES IN FUNDS FOR THE YEAR ENDED 31 MARCH 2018 (CONTINUED) Agency’s Funds Restricted Funds

General Fund

Agency Development

Fund

Operation Contingency

Fund

HAB Subvention

Reserve

Lump Sum Grant

Reserve

Provident Fund

Reserve under Lump Sum Grant

Block Grant Reserve

Other Designated

Services

Other Allocated

Funds

Total

HK$ HK$ HK$ HK$ HK$ HK$ HK$

HK$ HK$

HK$

At 31 March 2016

1,921,680 3,347,501 2,300,000 2,062,149 808,747 69,155 89,592

452,150 29,473

11,080,447

Surplus/(Deficit) for the year

2,724,317 - - - - - -

634,437 -

3,358,754 Transfer (from)/to General Fund to/(from) Block

Grant, Lump Sum Grant and Provident Fund Reserve under Lump Sum Grant

(393,504) - - - 6,330 26,460 62,000

- -

(298,714) Transfer (from)/to General Fund to/(from) HAB

Subvention Reserve

264,202 - - (264,202) - - -

- -

- Transfer from General Fund to Other Designated

Services

(386,046) - - - - - -

386,046 -

- Transfer from General Fund Upon Completion of

Recurrent Projects

- Volunteer Talent Bank 2014-17 (*) (220,168) - - - - - - - -

(220,168) Transfer of Funds upon completion of Designated

Project

- Care for the Elderly Charity Ticket Campaign

2016

17,469 - - - - - -

(17,469) -

-

- Share-to-Care Volunteer Campaign 2016 79,793 - - - - - - (79,793) - -

- Social Welfare Development Fund (Phase 2) (*) - - - - - - - (23,145) - (23,145)

Transfer from General Fund to Agency Development Fund

(2,000,000) 2,000,000 - - - - - - -

-

At 31 March 2017

2,007,743 5,347,501 2,300,000 1,797,947 815,077 95,615 151,592 1,352,226 29,473 13,897,174

Note (*): Net surplus refunded to respective funding bodies The notes on pages 15 to 38 are an integral part of these financial statements.

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STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 MARCH 2018

2018 2017 Note HK$ HK$

Cash flows from Operating Activities

Surplus for the year 1,038,272 3,358,754 Adjustments for: Depreciation 11 43,455 109,370 Provision for Employee Benefit Obligations (377,184) 109,291 Interest Income 8 (67,710) (50,613)

636,833 3,526,802 Changes in Working Capital

Account and Other Receivables (546,163) 3,293,741 Prepayments and Deposits (20,164) (4,690) Account and Other Payables (354,710) (147,788) Employee Benefit Obligations 216,650 - Receipts in Advance (8,469) 36,438

Cash (used in)/generated from Operating Activities (76,023) 6,704,503

Cash Flows from Investing Activities Additions of Property, Plant and Equipment 11 (97,256) (88,229) (Increase)/decrease in Time Deposits with original

maturity over three months

3,767,837 (3,643,483) Interest Income 67,710 50,613

Net Cash generated from/(used in) Investing Activities 3,738,291 (3,681,099)

Cash Flows from Financing Activities Repayment of Finance Lease Obligations 11 (21,300) (21,300)

Net Cash used in Financing Activities (21,300) (21,300)

Net increase in Cash and Cash Equivalents 3,640,968 3,002,104 Cash and Cash Equivalents at beginning of year 8,121,564 5,119,460

Cash and Cash Equivalents at end of year 12 11,762,532 8,121,564


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STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 MARCH 2018 (CONTINUED)

2018 2017 HK$ HK$

Analysis of Balances of Cash and Cash Equivalents:

Cash at Bank and on Hand 7,762,532 3,118,124 Time Deposits: - Original maturity of three months or less 4,000,000 5,003,440 - Original maturity over three months 2,613,024 6,380,861

Cash and Cash Equivalents as stated in the Statement of Financial Position

14,375,556 14,502,425

Less: Time Deposits with original maturity over three months

(2,613,024) (6,380,861)

Cash and Cash Equivalents per Statement of Cash Flows

11,762,532 8,121,564


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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2018 2. Significant Accounting Policies (Continued) 2.2 Basis of Preparation (Continued)

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. Judgements made by management in the application of HKFRSs that have significant effect on the financial statements and major sources of estimation uncertainty are discussed in note 5.

2.3 Property, Plant and Equipment

Property, plant and equipment are stated at cost less accumulated depreciation. The cost of an item of property, plant and equipment comprises its purchase price and any directly attributable costs of bringing the asset to its working condition and location for its intended use. Major costs incurred in restoring assets to their normal working conditions are charged to the statement of comprehensive income. Improvements are capitalised and depreciated over their expected useful lives. In situations where expenditure incurred to replace a separate component of an item of furniture and equipment, including major inspection and overhaul expenditure, it is capitalised and accounted for as a component of the asset. Other subsequent expenditure is capitalised as an additional cost of the asset only when it can be clearly demonstrated that the expenditure has resulted in an increase in the future economic benefits expected to be obtained from the use of the asset. Gain or loss arising from the retirement or disposal of property, plant and equipment is determined as the difference between the estimated net sales proceeds and the carrying amount of the assets and is recognised as income or expense in the statement of comprehensive income. Depreciation is provided to write off the cost of furniture and equipment, over their estimated useful lives from the date on which they become fully operational and after taking into account of their estimated residual values, using the straight-line method, at the following rates: - Computers 3 years - Furniture and equipment 5 years - Leasehold improvements 3 years

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2018 2. Significant Accounting Policies (Continued)

2.4 Account and Other Receivables

Account and other receivables are rights to collect for services performed in the ordinary course of business. If collection of account and other receivables is expected within one year or less (or in the normal operating cycle of the business if longer), they are classified as current assets. If not, they are presented as non-current assets. Account and other receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment.

2.5 Cash and Cash Equivalents

In the statement of financial position, cash and cash equivalents comprise cash at bank and on hand and time deposits with banks. In the statement of cash flows, cash and cash equivalents comprise cash at bank and on hand and time deposits with banks with original maturity of three months or less.

2.6 Account and Other Payables Account and other payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Account and other payables are classified as current liabilities if the payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities.

Account and other payables are initially recognised at fair value and subsequently stated at amortised cost using the effective interest method, unless the effect of discounting is immaterial, in such case they are stated at cost.

2.7 Revenue Recognition

(a) Government subventions and funds are not recognised until there is reasonable assurance to the compliance with the conditions attaching to them and the collectability. Unless the expenses have already been incurred in previous period, revenue will compensate and match with the related cost over the periods on a systematic basis. Grants and funds related to acquisition of assets are presented in the statement of financial position by deducting the grant and funds in arriving at the carrying amount of the assets.

(b) Other allocations, donations and fund-raising income are recognised when there is reasonable

certainty that the amounts will be received. (c) Registration and service fees are accounted for on accrual basis. (d) Membership subscriptions are recognised when received. (e) Interest income is recognised on a time apportionment basis using the effective interest rate.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2018 2. Significant Accounting Policies (Continued) 2.8 Employee Benefits

(a) Employee Leave Entitlements

Provision for employee entitlements to annual leave is made for the estimated liability for annual leave as a result of services rendered by employees up to the end of the reporting period. Employee entitlements to sick leave and maternity or paternity leave are not recognised until the time of leave.

(b) Mandatory Provident Fund Contribution

The Agency operates a mandatory provident fund scheme (MPF scheme) in Hong Kong. The assets of the MPF scheme are held in separate trustee-administered funds. Contributions to the scheme by the Agency and employees are calculated as a percentage of employees’ salaries. The Agency has no further payment obligations once the contributions have been paid. The contributions are recognised as employee benefit expense when they are due. The Agency also has a defined contribution scheme registered under the Occupational Retirement Scheme Ordinance, and there were no contributions from members or the employer in respect of the scheme for the year.

2.9 Leases

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the statement of comprehensive income on a straight-line basis over the period of the lease. Leases of property, plant and equipment where the Agency has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the lease's commencement at the lower of the fair value of the leased property and the present value of the minimum lease payments.

Each lease payment is allocated between the liability and finance charges. The corresponding rental obligations, net of finance charges, are included in other long-term payables. The interest element of the finance cost is charged to the statement of comprehensive income over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The property, plant and equipment acquired under finance leases are depreciated over the shorter of the useful life of the asset and the lease term.

20


NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2018 4. Financial and Capital Risks Management (Continued) 4.1 Fund Management (Continued)

The Agency defines total of all Agency’s funds as its capital and is not subject to externally imposed capital requirements. The Agency regularly reviews and manages its fund structure and makes adjustments to the fund structure in light of changes in Agency’s operating results. The Agency has no loan or trading debt except for finance leases for certain furnitures and equipment. It also maintains sufficient cash and cash equivalents to meet all its payment obligations.

4.2 Financial Risk Factors

The Agency’s activities expose it to a variety of financial risks: credit risk, interest rate risk and liquidity risk. The Agency’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Agency's financial performance. (a) Credit Risk

The Agency’s credit risk is primarily attributable to “account and other receivables”, “cash and cash equivalents” and “deposits”. The exposure to these credit risks are monitored on an ongoing basis. The Agency limits its exposure to credit risk in bank balance by rigorously selecting the deposit-takers. Deposit is placed only with creditworthy banks.

(b) Interest Rate Risk

The fair value or future cash flows of interest-bearing assets and liabilities of the Agency will fluctuate because of changes in market interest rates. It is the Agency’s policy to minimise the interest rate risk by monthly review of the appropriate level of such assets and liabilities in view of the tendency of market interest rates.

(c) Liquidity Risk

Liquidity risk is the risk that cash or another financial asset will not be available to meet liabilities as they fall due, and it results from maturity mismatch of assets and liabilities. The Agency monitors its working capital requirements on an ongoing basis to ensure adequate cash for its operation.

4.3 Fair Value Estimation

The carrying values of financial assets and liabilities are a reasonable approximation of their fair values.

19


NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2018 2. Significant Accounting Policies (Continued) 2.10 Related Parties A related party is a person or entity that is related to the Agency:

(a) A person, or a close member of that person’s family, is related to the Agency if that person:

(i) has control or joint control of the Agency; (ii) has significant influence over the Agency; or (iii) is a member of the key management personnel of the Agency or the Agency’s parent.

(b) An entity is related to the Agency if any of the following conditions applies:

(i) The entity and the Agency are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others).

(ii) One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member).

(iii) Both entities are joint ventures of the same third party. (iv) One entity is a joint venture of a third entity and the other entity is an associate of the third

entity. (v) The entity is a post-employment benefit plan for the benefit of employees of either the Agency

or an entity related to the Agency. (vi) The entity is controlled or jointly controlled by a person identified in (a). (vii) A person identified in (a)(i) 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). Close family members of an individual are those family members who may be expected to influence, or to be influenced by, that individual their dealings with the entity.

3. Changes in Accounting Policies and Disclosures

The HKICPA has issued several amendments to HKFRSs that are first effective for the current accounting year of the Agency. The application of the new and revised HKFRSs in the current year has had no material impact on the Agency’s financial performance and positions for the current and prior years and/or on the disclosures set out in these financial statements.

4. Financial and Capital Risks Management 4.1 Fund Management

The Agency’s objectives when managing capital are to safeguard the Agency’s ability to continue as a going concern, to support the Agency’s stability and growth and to provide adequate fund for the purpose of achieving the Agency’s objectives. In particular, the Agency has set up the Agency Development Fund and the Operation Contingency Fund for the development of the Agency and to cope with unforeseeable circumstances.

21


NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2018

5. Critical Accounting Estimates and Judgements

Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectation of future events that are believed to be reasonable under the circumstances. The Agency makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal to the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below: (a) Impairment of Property, Plant and Equipment

Property, plant and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. The recoverable amounts of properties, plant and equipment have been determined based on value-in-use calculations, taking into account the latest market information and past experience.

(b) Provision for Impairment of Receivables

The Agency makes provision for impairment of receivables based on an assessment of the recoverability of the receivables. Provisions are applied to receivables where events or changes in circumstances indicate that the balances may not be collectible. The identification of impairment of receivables requires the use of judgments and estimates. Where the expectations are different from the original estimates, such differences will impact the carrying values of receivables and loss for the impairment of receivables is recognised in the period in which such estimates have changed.

22



6. Government Subventions and Funds

2018 2017


Designated

Projects

Total

Recurrent

Programmes

Designated

Projects Total

HK$ HK$ HK$ HK$ HK$ HK$

Home Affairs Bureau

- Subvention (note a) 10,000,000 - 10,000,000 10,000,000 - 10,000,000

- Other Grants and Funds - 2,919,438 2,919,438 - 1,549,000 1,549,000 Social Welfare Department - Lump Sum Grant (note b) 4,695,524 - 4,695,524 4,582,796 - 4,582,796 - Furniture and Equipment Replenishment and Minor Works Block Grant (note 18)

65,000 - 65,000 62,000 - 62,000

- Other Grants and Funds - 162,600 162,600 - 211,766 211,766

Commission on Poverty - 965,000 965,000 - 570,000 570,000

Others - 32,885 32,885 - 2,500 2,500 14,760,524 4,079,923 18,840,447 14,644,796 2,333,266 16,978,062

Notes: (a) The subvention for recurrent programmes was for the operation of the Agency and providing

services on promotion of volunteerism. (b) The Lump Sum Grant (LSG) was for the operation of the Western Garden Neighbourhood Elderly

Centre.

23


NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2018 7. Allocations, Donations and Fundraising Income

2018 2017


Designated

Projects

Allocated Projects

Total

Recurrent

Programmes

Designated

Projects

Allocated Projects

Total


The Community Chest

4,602,300 - - 4,602,300 4,468,200 - - 4,468,200

The Hong Kong Jockey Club Charities Trust

1,714,500 108,600 - 1,823,100 1,459,200 - - 1,459,200

The Hong Kong Jockey Club Elderly Facilities Modernisation Scheme

- - - - - 357,878 - 357,878 Fund Raising Income

926,846 - - 926,846 2,104,965 - - 2,104,965

Sponsorship / Donation Income

296,950 1,100,235 - 1,397,185 202,844 1,613,850 - 1,816,694

7,540,596 1,208,835 - 8,749,431 8,235,209 1,971,728 - 10,206,937

8. Other Income

2018 2017


Designated Projects



Designated Projects



Interest Income

67,710 - - 67,710 50,612 1 - 50,613 Membership

Subscriptions

27,896 - - 27,896 30,956 - - 30,956

Administration Support Recovery

267,753 - - 267,753 255,192 - - 255,192

Sundry Income 3,558 - - 3,558 56,783 - - 56,783

366,917 - - 366,917 393,543 1 - 393,544

24



9. Expenditure

2018 2017


Designated Projects



Designated Projects


HK$ HK$ HK$ HK$ HK$ HK$ HK$ HK$ Personal Emoluments

Salaries 14,766,338 - - 14,766,338 14,167,277 - - 14,167,277 Provident Fund 1,160,847 - - 1,160,847 1,096,016 - - 1,096,016 Accumulating

Compensated Absences

198,380 - - 198,380 156,478 - - 156,478

16,125,565

-

- 16,125,565 15,419,771

-

- 15,419,771

Rent, Rates and Management Fee

Rent

1,672,610

-

- 1,672,610 1,658,959

-

- 1,658,959

Rates

95,196

-

- 95,196 81,599

-

- 81,599

Management Fee

136,683

-

- 136,683 126,341

-

- 126,341

1,904,489

-

- 1,904,489

1,866,899

-

-

1,866,899

Administration Expenses

Audit Fee

48,000

-

- 48,000 39,000

-

- 39,000

Agency’s Affairs

289,530

-

- 289,530 178,581

-

- 178,581

Depreciation

43,455

-

- 43,455 109,370

-

- 109,370

General Office Expenses

444,871

-

- 444,871 458,263

-

- 458,263

Insurance

86,119

-

- 86,119 72,743

-

- 72,743

Repairs and Maintenance

100,380

-

- 100,380 149,994

-

- 149,994

Staff Development and Welfare

355,550

-

- 355,550 289,772

-

- 289,772

Staff Recruitment

50,892

-

- 50,892 36,328

-

- 36,328

Utilities

185,160

-

- 185,160 195,915

-

- 195,915

Volunteer Staff Support

186,400

-

- 186,400 154,562

-

- 154,562

1,790,357

-

- 1,790,357

1,684,528

-

-

1,684,528

Expenses for Fundraising Projects

167,079 -

- 167,079 195,953 -

- 195,953

Service and Programme Expenses

3,366,964 4,902,895

10,260 8,280,119 2,760,264 3,672,637

- 6,432,901

Less: Elimination of

Internal Charges

- - - (366,615) - - -

(434,273)

23,354,454 4,902,895 10,260 27,900,994 21,927,415 3,672,637 - 25,165,779

25


NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2018 10. Employee Benefit Expenses

2018 2017

HK$ HK$ Personal Emoluments (note 9) 16,125,565 15,419,771

Other Emoluments included in Service and Programme Expenses: Salaries 1,027,210 934,541 Provident Fund 53,192 43,186

1,080,402 977,727

17,205,967 16,397,498

11. Property, Plant and Equipment

Computers

Furniture and Equipment

Leasehold Improvements Total

HK$ HK$ HK$ HK$

Cost

At 1 April 2017 1,343,009 1,250,908 4,990,389 7,584,306

Additions 83,561 13,695 - 97,256

Written off (21,730) (12,806) - (34,536)

At 31 March 2018 1,404,840 1,251,797 4,990,389 7,647,026

Less: Government Grant Related Assets At 1 April 2017 774,336 529,244 4,795,054 6,098,634 Transfer to Government Grant

Related Assets

67,713 5,622 - 73,335 Reclassification as Government

Grant Related Assets

122,560 93,553 216,113

Written off (9,580) (6,418) - (15,998)

At 31 March 2018 955,029 622,001 4,795,054 6,372,084

Less: Accumulated Depreciation

At 1 April 2017 495,277 588,584 195,335 1,279,196

Charge for the year 9,386 34,069 - 43,455 Reclassification as Government

Grant Related Assets

(69,254) (24,909) - (94,163)

Written off (12,150) (6,389) - (18,539)

At 31 March 2018 423,259 591,355 195,335 1,209,949

Net Book Value

At 31 March 2018 26,552 38,441 - 64,993

26


NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2018 11. Property, Plant and Equipment (Continued)

Computers

Furniture and Equipment

Leasehold Improvements Total

HK$ HK$ HK$ HK$

Cost

At 1 April 2016 1,328,764 1,216,049 4,990,389 7,535,202

Additions 50,520 37,709 - 88,229

Written off (36,275) (2,850) - (39,125)

At 31 March 2017 1,343,009 1,250,908 4,990,389 7,584,306

Less: Government Grant Related Assets At 1 April 2016 785,031 532,094 4,795,054 6,112,179

Written off (10,695) (2,850) - (13,545)

At 31 March 2017 774,336 529,244 4,795,054 6,098,634

Less: Accumulated Depreciation

At 1 April 2016 476,442 523,629 195,335 1,195,406

Charge for the year 44,415 64,955 - 109,370

Written off (25,580) - - (25,580)

At 31 March 2017 495,277 588,584 195,335 1,279,196

Net Book Value

At 31 March 2017 73,396 133,080 - 206,476

Furniture and equipment includes the following amounts where the Agency is a lessee under finance leases:

2018 2017

HK$ HK$

Cost – capitalised finance leases 106,500 106,500

Accumulated depreciation (85,200) (63,900)

Net book value 21,300 42,600

28


NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2018 16. Other Allocated Funds (Continued)

(a) CMS Enhancement (previously named: Service Improvement Plan)

The fund was allocated in 2006 to enhance service efficiency through an improved system and was mainly used to cover the costs for improving the Central Membership System in recent years.

2018 2017 HK$ HK$ Balance brought forward 29,473 29,473 Total Income for the year - -

Total Expenditure for the year (10,260) - Deficit for the year (10,260) -

Transfer to General Fund upon completion of the project (19,213) Balance carried forward

- 29,473

17. Other Designated Services

2018 2017

HK$ HK$ Give a Day Get a Disney Day (note a) 191,724 205,028

Hong Kong Volunteer Award (note b) 837,501 701,570

Hong Kong Volunteer Awardees Society (note c) 93,965 105,520

InnoCarnival 2017 - -

Life Buddies Portal (I) (note d) - (21,760)

Life Buddies Portal (II) (note e) 327,471 - Social Welfare Development Fund Phase III (Training and

professional development programmes) (note f)

146,106 5,000

TDC Database System Development Project (note g) 91,664 128,600 UNV-HK Universities Volunteer Internship Programme

(note h)

- -

V-Net Project - Implementation Cost (note i) - -

V - Union ( ) (note j) 61,342 103,936 Walking with Elderly ( – ) 2016-

2018 (note k)

133,160 124,332 2017 Care for the Elderly Charity Ticket Campaign -

(note l)

155,192 - 2,038,125 1,352,226

27


NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2018 12. Cash and Cash Equivalents

2018 2017

HK$ HK$

Cash at Bank 7,743,532 3,090,860

Cash on Hand 19,000 27,264

Time Deposits with original maturity of three months or less 4,000,000 5,003,440

Cash and Cash Equivalents as presented in the Statement of Cash Flows 11,762,532 8,121,564

Time Deposits with original maturity over three months 2,613,024 6,380,861

Cash and Cash Equivalents as presented in the Statement of Financial Position 14,375,556 14,502,425

13. General Fund

General Fund represented the accumulated surplus of the Agency. 14. Agency Development Fund

Agency Development Fund has been assigned for the Agency’s future development relating to improvement of service quality and efficiency enhancement.

15. Operation Contingency Fund

Operation Contingency Fund has been set up to meet contingencies and any unforeseen financial needs of the Agency.

16. Other Allocated Funds

2018 2017

HK$ HK$

CMS Enhancement (previously: Service Improvement Plan) (note a) - 29,473

Allocated Funds were for projects with specific purpose approved by the Board of Directors (the “Board”). Movements in Other Allocated Funds during the year were as follows:

29


NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2018 17. Other Designated Services (Continued)

Balances of government grants and funds, donations and sponsorships were for service projects with designated purposes. The services with material balances or movements during the year were disclosed below:

(a) Give a Day Get a Disney Day

The Give a Day Get a Disney Day aimed at mobilising Hong Kong people to serve the community for building a harmonious society. Volunteers who had performed service of 10 hours or more were eligible to apply for a complimentary 1-day ticket to Hong Kong Disneyland via their service organisations. Movements during the year were as follows:

2018 2017

HK$ HK$

Balance brought forward 205,028 192,193 Total Income for the year 310,000 305,000

Total Expenditure for the year (323,304) (292,165)

(Deficit)/Surplus for the year (13,304) 12,835

Balance carried forward 191,724 205,028

(b) The Hong Kong Volunteer Award The Hong Kong Volunteer Award was to recognise outstanding volunteers’ contributions and achievements so as to raise public awareness of the value of volunteering, and to facilitate the development of sustainable volunteerism in Hong Kong. Awards were presented to individuals, volunteer groups and business corporations selected by the Award Judging Panel biennially.

Movements during the year were as follows:

2018 2017 HK$ HK$


Total Expenditure for the year (464,069) (276,867) Surplus for the year 135,931 443,191 Balance carried forward

837,501 701,570

30



(c) Hong Kong Volunteer Awardees Society

The Society aims at pooling the strengths and experience of the award recipients, provides a platform for exchange and spreading the spirit of the volunteerism in support of the Agency’s initiatives. Movements during the year were as follows:

2018 2017 HK$ HK$





(d) Life Buddies Portal (I)

A grant of HK$1,425,000 was approved by the Commission on Poverty for the promotion of

mentoring culture in the community to help grassroots youth move upward in society. Movements during the year were as follows:

2018 2017 HK$ HK$

Balance brought forward (21,760) 116,754 Total Income for the year 285,000 570,000


Surplus/(Deficit) for the year 131,273 (138,514)

Transfer to General Fund (109,513) -

Balance carried forward - (21,760)

(e) Life Buddies Portal (II)

A grant of HK$850,000 was approved by the Commission on Poverty for the promotion of

mentoring culture in the community to help grassroots youth move upward in society. Movements during the year were as follows:

2018 2017 HK$ HK$

Total Income for the year 680,000 -

Total Expenditure for the year (352,529) -

Surplus for the year 327,471 -

Balance carried forward 327,471 -

32



(i) V-Net Project - Implementation Cost

A grant of HK$7,080,000 was approved by the Hong Kong Jockey Club Charities Trust for the implementation of a new volunteer engagement system. The grant of donation was reimbursed on actual claim of project expenditure. Movements during the year were as follows:

2018 2017 HK$ HK$

Donation granted during the year 108,600 -


Surplus for the year - -

(j) V-Union ( )

Donation of HK$168,000 was received from Leung Mui Foundation for visiting and serving hidden elderly to meet their needs in improving home environment and social activity. Movements during the year were as follows:

2018 2017 HK$ HK$

Balance brought forward 103,936 70,432 Total Income for the year - 80,000




(k) Walking with Elderly ( – ) 2016-2018

Donations of HK$200,000 were approved by Leung Mui Foundation, together with surplus of HK$53,025 transferred from Walking with Elderly ( – ) 2015-2016, for

serving the elderly, leading them to join more activities and be more out-going. Movements during the year were as follows:

2018 2017

HK$ HK$

Balance brought forward 124,332 53,025

Total Income for the year 80,000 100,000


Surplus for the year 8,828 71,307


31



(f) Social Welfare Development Fund Phase III (Training) With the aim to provide training courses for staff, the Social Welfare Development Fund Phase III

of the Social Welfare Department (“SWD”) approved a grant of HK$232,600 for the Training and Development Programmes attended by staff subvented by Lump Sum Grant of the SWD. Movements during the year were as follows:

2018 2017 HK$ HK$

Balance brought forward 5,000 -





(g) TDC Database System Development Project

An allocation of HK$215,400 was approved by The Community Chest for developing a database system for the automation of training service workflow and reporting procedures for the Training and Development Centre (TDC). Movements during the year were as follows:

2018 2017 HK$ HK$

Balance brought forward 128,600 196,900 Total Income for the year - -


Deficit for the year (36,936) (68,300)


(h) UNV-HK Universities Volunteer Internship Programme

In collaboration with the United Nations Volunteers and funded by the Home Affairs Bureau, this

programme enabled undergraduate volunteers to participate in volunteer assignments aboard. Movements during the year were as follows:

2018 2017

HK$ HK$

Total Income for the year 2,919,438 1,549,000

Total Expenditure for the year (3,191,701) (1,835,861)

Deficit for the year (272,263) (286,861)

Deficit Transfer to HAB Subvention Reserve 272,263 286,861

Balance carried forward - -

33



(l) Care for the Elderly Charity Ticket Campaign ( )

Sales proceeds of Elderly Charity Tickets are specifically used for provision of needed elderly service. Upon agreement with the campaign organiser, the accumulated surplus as at 31 March 2018 of HK$135,015 was transferred from General Fund to Designated Service Fund. Movements during the year were as follows:

2018 2017

HK$ HK$


Total Expenditure for the year (1,665) (324)


Transfer from/(to) General Fund 135,012 (17,469)

Balance carried forward 155,192 -

18. Block Grant Reserve

2018 2017

HK$ HK$

Balance brought forward

151,592 89,592

Block Grant received and net surplus for the year 65,000 62,000



The above grant was allocated by the Social Welfare Department from the Lotteries Fund for furniture and equipment replenishment and minor works at the Western Garden Neighbourhood Elderly Centre.

At 31 March 2018, there were no outstanding commitments in respect of Furniture and Equipment Replenishment and Minor Works related to Block Grant (2017: Nil)

34


NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2018 19. Lump Sum Grant (LSG) Reserve

2018 2017 HK$ HK$

Balance brought forward 815,077 808,747 Surplus for the year 86,010 305,045

Provident Fund Surplus under LSG 12,228 26,460 Net changes in amount refundable for the portion

of LSG Reserve exceeding the prescribed ceiling

16,773 (298,715)

Transfer to Provident Fund Reserve under LSG (12,228) (26,460)

Balance carried forward (note a) 917,860 815,077

The Grant was received from the Social Welfare Department (“SWD”) for operation of the Western Garden Neighbourhood Elderly Centre.

20. Provident Fund Reserve under Lump Sum Grant

The Reserve represented subvention balance designated for provident fund of subvented staff under the Lump Sum Grant. The Reserve is used for increase in personal emoluments or adjusting provident fund contribution rates of staff subvented under the Lump Sum Grant.

21. HAB Subvention Reserve

The Reserve represented subvention fund balance from HAB. 22. Key Management Remuneration of the Agency

2018 2017 HK$ HK$

Salaries 3,055,882 2,742,202

Provident Fund 326,272 353,724

Accumulating Compensated Absences 60,803 34,397 3,442,957 3,130,323

None of the Directors received or will receive any remuneration in respect of their services rendered to the Agency during the year (2017: Nil).

36



26. Possible impact of new or revised HKFRSs issued but not yet effective for the year ended 31 March

2018

Up to the date of issue of these financial statements, the HKICPA has issued the following amendments, new standards and interpretations which are not yet effective for the year ended 31 March 2018 and which have not been early adopted in these financial statements.

HKFRS 9 (2014) Financial instruments1 HKFRS 15 Revenue from Contracts with Customers1 HKFRS 16 Leases2 Amendments to HKFRS 15 Clarifications to HKFRS 151 Amendments to HKFRSs Annual Improvements to HKFRSs 2014 – 2016 Cycle3 Amendments to HKFRSs Annual Improvements to HKFRSs 2015 – 2017 Cycle2

Amendments to HKAS 19 Employee Benefits2

1 Effective for annual periods beginning on or after 1 January 2018 2 Effective for annual periods beginning on or after 1 January 2019 3 Effective for annual periods beginning on or after 1 January 2017 or 1 January 2018, as appropriate

Except as described below, the directors of the Agency considered that the application of the new and

revised HKFRSs is unlikely to have a material impact on the Agency’s financial position and

performance as well as the financial statements disclosures in the future.

HKFRS 15 Revenue from Contracts with Customers

HKFRS 15 establishes a single comprehensive model for entities to account for revenue arising from

contracts with customers. HKFRS 15 will supersede the current revenue recognition guidance

including HKAS 18 Revenue, HKAS 11 Construction Contracts and the related Interpretations when it

becomes effective.

The core principle of HKFRS 15 is that an entity should recognize revenue to depict the transfer of

promised goods or services to customers in an amount that reflects the consideration to which the entity

expects to be entitled in exchange for those goods or services. Specifically, the standard introduces a

5-step approach to revenue recognition:

1. Identify the contract with a customer

2. Identify the performance obligations in the contract

3. Determine the transaction price

4. Allocate the transaction price to the performance obligations in the contract

5. Recognize revenue when or as the entity satisfies a performance obligation.

35


NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2018 23. Finance Lease Liabilities

The Agency leases certain furniture and equipment under non-cancellable finance lease agreements. The lease terms are 5 years. At the end of the finance lease term, the Agency has option to purchase the leased assets at minimal consideration. At the end of the reporting period, the Agency had the following future minimum commitments under non-cancellable finance leases. 2018 2017 HK$ HK$

Within one year 21,300 21,300

In between two to five years - 21,300 21,300 42,600

24. Operating Lease Commitments

At the end of the reporting period, the Agency had the following future minimum commitments under non-cancellable operating leases. 2018 2017 HK$ HK$

Within one year 1,072,342 1,432,682

In between two to five years 170,476 1,098,402 1,242,818 2,531,084

25. Major Non-Cash Transaction

Property, Plant and Equipment with net book value of HK$121,950 was transferred to Government Grant Related Assets as agreed by the relevant funding body.

37


NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2018 26. Possible impact of new or revised HKFRSs issued but not yet effective for the year ended 31 March

2018 (Continued)

HKFRS 15 Revenue from Contracts with Customers (Continued)

Under HKFRS 15, an entity recognized revenue when or as a performance obligation is satisfied, that

is, when “control” of the goods or services underlying the particular performance obligation is

transferred to the customer.

Far more prescriptive guidance has been added in HKFRS 15 to deal with specific scenarios.

Furthermore, extensive disclosures are required.

In April 2016, Clarifications to HKFRS 15 was issued in relation to the identification of performance

obligations, principal versus agent considerations, as well as licencing application guidance.

Based on preliminary analysis, the directors of the Agency anticipate that the adoption of HKFRS 15

in the future is unlikely to have a significant impact on revenue recognition but will result in more

disclosures.

HKFRS 16 Leases

HKFRS 16 introduces a comprehensive model for the identification of lease arrangements and

accounting treatments for both lessors and lessees. HKFRS 16 will supersede the current lease

guidance including HKAS 17 Leases and the related interpretations when it becomes effective.

HKFRS 16 distinguishes leases and service contracts on the basis of whether an identified asset is

controlled by a customer. Distinctions of operating leases (off balance sheet) and finance leases (on

balance sheet) are removed for lessee accounting, and is replaced by a model where a right-of-use asset

and a corresponding liability have to be recognized for all leases by lessees (that is, all on balance sheet)

except for short-term leases and leases of low value assets.

The right-of-use asset is initially measured at cost and subsequently measured at cost (subject to certain

exceptions) less accumulated depreciation and impairment losses, adjusted for any re-measurement of

the lease liability. The lease liability is initially measured at the present value of the lease payments

that are not paid at that date.

Subsequently, the lease liability is adjusted for interest and lease payments, as well as the impact of

lease modifications, amongst others. Furthermore, the classification of cash flows will also be affected

as operating lease payments under HKAS 17 are presented as operating cash flows; whereas under

HKFRS 16, lease payments will be split into a principal and an interest portion which will be presented

as financing and operating cash flows respectively.

In contrast to lessee accounting, HKFRS 16 substantially carries forward the lessor accounting

requirements in HKAS 17, and continues to require a lessor to classify a lease either as an operating

lease or a finance lease.

Furthermore, extensive disclosures are required by HKFRS 16.

38


NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2018 26. Possible impact of new or revised HKFRSs issued but not yet effective for the year ended 31 March

2018 (Continued)

HKFRS 16 Leases (Continued)

HKFRS 16 will primarily affect the Agency’s accounting as lessee of leases for properties, plant and

equipment which are currently classified as operating leases. The application of HKFRS 16 is expected

to lead to an increase in both assets and liabilities and to impact on the timing of the expense recognition

in the statement of profit or loss and other comprehensive income over the period of the lease.

As disclosed in Note 24 at 31 March 2018, the Agency’s future minimum lease payments under non-

cancellable operating leases amount to HK$ 1,242,818 for properties, the majority of which is payable

between 1 to 5 years after the reporting date. A portion of this amount may therefore need to be

recognized as lease liabilities, with corresponding right-of-use assets, once HKFRS 16 is adopted.

The Agency will need to perform a more detailed analysis to determine the amounts of new assets and

liabilities arising from operating lease commitments on adoption of HKFRS 16, after taking into account

the applicability of the practical expedient and adjusting for any leases entered into or terminated

between now and the adoption of HKFRS 16 and the effects of discounting.

The Agency considered not to early adopt HKFRS 16 before its effective date of 1 January 2019.

Impact of new and revised HKFRSs

The Agency is in the process of making an assessment of what the impact of these new and revised

HKFRSs is expected to be in the period of initial application. So far it has concluded that the adoption

of them is unlikely to have a significant impact on the financial statements of the Agency.

AGENCY FOR VOLUNTEER SERVICE APPENDIX I

RECURRENT PROGRAMMES SUPPORTED BY THE COMMUNITY CHEST FOR THE YEAR ENDED 31 MARCH 2018 (For management use only) Recurrent Programmes Supported by the Community Chest 2018 2017 HK$ HK$

Income

Allocation from The Community Chest 4,602,300 4,468,200

Registration and Service Fee Income 719,425 674,249

Sundry Income 2,253 16,070 5,323,978 5,158,519

Expenditure Personal Emoluments 3,781,840 3,513,913

Rent and Rates 408,918 401,635

Administrative Expenses 336,170 318,446

Programme Operating Expenses 660,492 637,536 5,187,420 4,871,530 Surplus for the year 136,558 286,989

agency for volunteer service report of the directors ... · camilla, dr au yiu kai, ms lam tyng...

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