To provide efficient, cost effective, quality information system and support services, to the Revenue Departments primarily and to other Government agencies as directed by the Ministry of Finance and the Public Service. To achieve our objectives we will: • Invest time in understanding our clients’ business, focus on their needs and incorporate their requirements in our day to day practices. • Recruit, train and retain appropriate human resources to assure quality service. • Effectively apply industry standards, methodologies and advanced information technologies
Transcript
To provide efficient, cost effective, quality informationsystem and support services, to the Revenue
Departments primarily and to other Governmentagencies as directed by the
Ministry of Finance and the Public Service.
To achieve our objectives we will:• Invest time in understanding our clients’ business,
focus on their needs and incorporate their requirementsin our day to day practices.
• Recruit, train and retain appropriate human resourcesto assure quality service.
• Effectively apply industry standards, methodologiesand advanced information technologies
Financial Statements Statement of Comprehensive Income 46 Statement of Financial Position 47 Statement of Changes in Shareholders’ Equity 48 Statement of Cash Flows 49 Notes to the Financial Statements 50 Sub-Committees of the Board 74
Corporate Information 74
FISCAL SERVICES LIMITED
ANNUAL REPORT 20101
NOTICE OF THE ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that the Annual General Meeting of Fiscal Services Limited will be held in the Board Room of Fiscal Services Limited, 235b Old Hope Road, Kingston 6, in the Parish of Saint Andrew, on Monday, 30th November, 2010 for the following purposes:
1. To receive the Financial Statements of the Company for the year ended 31st March 2010 and Reports of the Directors and Auditors thereon.
Resolution No. 1 THAT the Financial Statements for the year ended 31st March 2010 together with the Reports of the Directors and Auditors thereon be and are hereby received and approved.
Resolution No. 2 THAT the amounts shown in the accounts of the Company for the year ended 31 March 2010 as fees of the Directors for their services as Directors be and are hereby approved.
Resolution No. 3 THAT Directors be remunerated as per fees for Chairmen and Members of Board of Public Entities stipulated by the Ministry of Finance and the Public Services from time to time.
3. To transact any other business which may be properly transacted at an Annual General Meeting.
InstrumentsappointingProxiesmustbedepositedwiththeSecretaryoftheCompany,at235bOldHopeRoad,Kingston 6, not less than forty-eight (48) hours before the meeting.
FISCAL SERVICES LIMITED
ANNUAL REPORT 2010 2
CORPORATE PROFILE
Fiscal Services Limited (FSL) was incorporated in Jamaica under the Companies Act as a limited liability company on April 15, 1985. The Company commenced operations in April 1986. The Revenue Board, on behalf of the Government of Jamaica, held the Authorized Shares initially. Those shares were subsequently transferred on March 31, 1991 to the Accountant General, a corporation sole pursuant to the power vested in him by the Crown Property (Vesting) Act 1960.
The initial capitalization cost required for building construction, purchasing of computers and the acquisition of technical assistance was provided in the form of grants by the European Economic Community (EEC), United States AID (USAID), World Bank and the Government of Jamaica Counterpart funding. Provision for annual development and operating expenses are included in the Government of Jamaica Estimates of Expenditure.
In April 1991, the Ministry of Industry, Production and Commerce declared the premises on which FSL is located to be a free zone. On December 13, 1999, the Company’s name was changed from Fiscal Service EDP Limited to Fiscal Services Limited (FSL) in keeping with the expanding role of the organization.
THE ORGANIZATIONAL STRUCTURE AND CORPORATE GOVERNANCEFSL reports to the Ministry of Finance and the Public Service. Like similar Government Agencies, a Board of Directors governs FSL. Appointed by the Minister of Finance and the Public Service, the Board of Directors is responsible for corporate governance and formulating corporate policies. A number of sub-committees support the operations of the Board of Directors, these include: Finance, Human Resource Management, Audit, and Technical and Research & Development.
The Managing Director gives overall directives for the daily operations of the company and is supported by a number of Divisions and Departments through direct reports in; Director of Software Engineering, Director of Technical Services, Director of Finance & Planning, Director of Special Projects, Department Head of HRM, Department Head of Audit and Department Head of Administration.
SERVICESThe Company undertakes development and implementation of systems for various revenue Departments, provides ongoing operational support services and training users to operate and manage the systems. FSL is the major technology link in the information flow between the Revenue Services Departments located throughout the island of Jamaica. FSL constitute an important ‘engine’ and ‘operating platform’ that facilitates overall revenue collection, communication and business processes, and is critical in enabling Government tax strategies.
Consistent with the mandate of the Company, FSL provides a full range of computer services to the Revenue Services Departments and other Government Agencies. Included in the services provided are:
Project Management•System Analysis & Business Design•Software Development, Implementation & Maintenance•Software Selection and Integration•Application Service Provider (ASP)•Hardware Planning, Design, Deployment, Maintenance, Procurement and Site Implementation •ManagementSystem Operations and Database Management•Bureau Services•Customer Call Centre Services•
FISCAL SERVICES LIMITED
ANNUAL REPORT 20103
CORPORATE PROFILE
Electrical Systems Design, Implementation and Maintenance.•Network Planning, Design, and Maintenance.•Infrastructure Solutions planning, design, acquisition and implementation•Network and Security Management•Web Hosting •E-Commerce interface •Internet and e-mail access•Quality Assurance Testing•
Mrs. Lisa LewisMr. Vaughn Morris Mr. Danville Davidson
Missing: Mr. Ian Murry and Mr. Dayle Blair
BOARD OF DIRECTORS
Mrs. Varalie Latibeaudiere(Chairperson)
Mrs. Penelope Goldsmith (Company Secretary)
Mrs. Dyon Woolcock (Acting Managing Director)
Missing: Mr. Ian Murry and Mr. Dayle Blair
BOARD OF DIRECTORS
FISCAL SERVICES LIMITED
ANNUAL REPORT 2010 6
Fiscal Services Limited (FSL) continues to provide invaluable information systems and information technology services to the Revenue and Customs Departments, the Ministry of Finance and the Public Service (MOFPS), and other Ministries, Departments and Agencies of the Government of Jamaica (GOJ). For the fiscal year 2009/2010, and notwithstandingthe challenges occasioned by the macro-economic conditions, FSL continued to focus on assisting its clients in meeting their business objectives, through the use of appropriate technology, and, the appropriate use of technology.
The Board of Directors takes great pleasure in presenting this Annual Report and the Audited Financial StatementfortheyearendedMarch31,2010.
Development & Operational Highlights
Tax Reminder SystemDeployment of the Tax Reminder System materialized, as scheduled in the first quarter of the fiscal year.The system advises (reminds) Tax Administration’s clients (Taxpayers) via automated text messages sent to mobile phones, of issues, events or transactions requiring their attention. The expectation is that this initiative will realize improvements in service delivery, revenue collections and Taxpayer compliance.
BetweenitsinitialdeploymentinJune2009andtheendofMarch2010,justunder2,000 Taxpayers registered for the service – with over 80% of the registrants being persons interested in obtaining reminders in relation to motor vehicle transactions. In the same time period, the system sent in the order of 10,300 reminder messages – with motor vehicle-related messages accounting for approximately 62% of the messages.
E-filing & E-payment SystemsAs scheduled, further expansion of the scope of tax returns and payments that can be effected over the Internet, via Tax Administration’s Tax Portal, occurred in the review period. Consequently, employers are nowabletousethisfacilitytofiletaxreturnsandeffectpayments in relation to payroll statutory deductions and contributions, that is: PAYE (income tax), NIS,
Education Tax, and HEART/NTA. In addition, self-employed individuals and corporate entities are able tousethisfacilitytofilereturnsandeffectincometaxpayments. (This is in addition to the facility to effect paymentsandfilereturnsinrelationtoGCTandSCTthat was introduced between December 2004 andOctober2008.)
Useofthee-paymentande-filingfacilitiesbythepubliccontinuestogaininpopularity.ForthefiscalyearendedMarch31, 2010, this revenue collection avenueout-performedtwenty-one(21)Collectorates(fixedsites)interms of the value of the transactions processed, and, nine (9) sites in terms of the number of transactions processed,upfromfifteenandsevenrespectivelyforthepreviousfiscalyear.Inrecordingthisachievement,thisavenuealsoout-performedtwenty-seven(27)sitesin terms of the average value of each transaction (and was bettered in this metric only by the Inland Revenue Department’s offices at Cross Roads, King Street,and theLargeTaxpayerOffice).Atanaveragevalueof JA$113,780pertransactionprocessedinthefiscalyear ended March 31, 2010, the e-payment facility,recorded a 80%increaseoverthepreviousfiscalyearin this metric, and a 74.5% increase over what was realized in the previous year in the aggregate value ofthetransactionsprocessed.Thesefigurescontinuetoreflecttaxpayers’growingconfidenceinthestabilityand security of this system.
In terms of the tax returns processed through this avenue, 1,010 returns at a net value (debit, credit and nil returns combined) of JA$3.05B were processed in thefiscalyearendedMarch31,2010.Thisreflectsanincrease of 134% in the average value of the returns and 127% increase in the monthly average number of returnsfiledviathisavenueoverwhatwasrealizedforthe previous year. Securities Management System (SMS) & Support For Jamaica Debt Exchange Programme Duringthefiscalperiod,FSLprovidedconsiderableandintense support to the Debt Management Unit (DMU) of the Ministry of Finance and the Public Service. This support contributed significantly to the successfuland timely processing of transactions and exchange
REPORT FROM THE BOARD OF DIRECTORS
FISCAL SERVICES LIMITED
ANNUAL REPORT 20107
REPORT FROM THE BOARD OF DIRECTORS
instruments under the GOJ’s 2010 Debt Exchange(JDX) programme. This was achieved without the need for any major software application changes to the FSL-developed Securities Management System (SMS) that is used by the DMU for the management of securities. TheSMShasbeeninoperationfrom2001.
Traffic Ticket Management System Underacontractexecutedin2008withtheMinistryofNational Security (MNS), FSL completed and delivered the Traffic Ticket Management System (TTMS) inOctober2009.TheTTMS isoneof twocomponentsanewTrafficTicketingSystemthatistobedeployedisland-widebytheMNS.Attheendofthefiscalyear,activities were in progress for the MNS and the provider of the second component of the system to commence integration testing between the two components of the TrafficTicketingSystem.
Infrastructure UpgradesInfrastructure upgrade continued to be a feature of the fiscalyearendedMarch31,2010.Thisincludes:
Upgrade of the Revenue Services’ Wide Area •Network (WAN) – resulting in a noticeable higher level of availability of services delivered across the WAN. Through collaboration with the National Works Agency (NWA) the WAN infrastructure for the Customs Department was also upgraded;
Implementation of voice communication over the •WAN using VoIP technology between Customs’ NewPortEast(NPE)andKingStreetsites;
Upgrading of the Local Area Networks and •structured cabling infrastructure at a number of client sites;
Upgrade of the power infrastructure for FSL’s •Computer suite to allow for redundancy in the UPS feed to equipment hosted at this site;
Conclusion of the migration of mission-critical •systems to more current and stable hardware, and more current versions of the operating system and, database management systems, and the
implementation of High availability Data Replication (HDR) to achieve data redundancy. These upgrade and migration activities are part of the strategy to attainsignificantimprovementinperformanceandavailability of critical production systems.
In-House Help Desk & PBX SystemsIn July 2009 FSL deployed the new (Help Desk)Customer Relationship Management software. This, along with the PBX System that was undergoing User AcceptanceTesting(UAT)attheendofthefiscalyear,are seen as critical client service delivery pillars.
Staffing, Administration & Other Support SystemsDuring the review period, the organization realized areductionofapproximately2% in thestaff turnoverwhencomparedtothepreviousfiscalyear,andinwhicha turnover in the order of 10.8%was recorded.Theorganization takes no comfort in this level of reduction however, and continues to grapple with a noticeable resource gap in the middle tier of the Operations Divisions.
In addition to several (recurrent) service contracts that weretenderedand/orexecutedduringthefiscalyear;the organization pursued, and continues to pursue, a number of initiatives aimed at improving the quality of service(toclientsand/orstaff),containingcosts,andstrengthening of security.
The organization is pleased to acknowledge the success attained in satisfying statutory reporting requirements in the review period including, but not limited to, the timely submission of 2008/09 AnnualReport and Financial Statement to our parent ministry, and the submission of Corporate Tax, Asset Tax and CompaniesOfficeofJamaicareturns.
Computerization of Customs (0257) 151.87 118.91 80.00 37.33
Computerization of the Revenue Departments (0265)
274.62 209.72 209.72 88.24
Total 1,357.38 1,154.48 1,186.61 1,010.56
Forthefiscalperiod2009/10,anoverallbudgetsupportof$1,116.58m was received for all three (3) programmes (0163, 0257 & 0265). This represents a 10.5% or $106.02m increase over the previous year's amount of $1,010.56m. This increase is primarily as a result of the amount provided for System Software and related products, in addition to the increase in the cost of goods and services required to operate the plant.
Cash Flow ManagementAttheendof thefiscalperiodendedMarch31,2010,FSL’soverallcashandcashequivalentsamountedto $295.523m, an increase of $188.562m over the previous year's amount of $106.961m. The Cash balance of $295.523m shownattheendofthefiscalperiodrepresentsfundsearmarkedtobeusedagainstcommitmentsand outstanding liabilities.
Operating ResultsNotwithstanding the operational challenges faced during the period, the company was able to provide adequate support to systems for all Revenue Services Centers (RSC) and Collectorates islandwide. Operational strategies employedtocontainexpensescontributedsignificantlytothenetoperatingresult.Netoperatingsurplusbeforetaxation amounted to $179.722m. This amount, when compared with the previous year's amount of $41.452m, reflectsa$133.270m increase. Net operating surplus after taxation was $161.597m.
Working CapitalAs indicated below, working capital has moved from $145.852matMarch31,2009 to$276.687m at March 31,2010.Thisrepresentsanincreaseof$130.835m over the previous year. Despite a slight weakening of our Current Ratio position, moving from 2.48 to 1.80 times,whencomparedwith thepreviousyear,ourfinancialpositionremainrelativelystrong.TheoverallWorkingCapitalresultindicatesthestrongfinancialandoperatingstrategiesemployedbymanagementduringaperiodwhenthefinancialandeconomicenvironmentwasverydifficult.
Mar. 31, 2010$M.
Mar. 31, 2009$M.
Net Working Capital 276.69 145.85Current Ratio 1.80 2.48
FISCAL SERVICES LIMITED
ANNUAL REPORT 2010 12
REPORT FROM THE BOARD OF DIRECTORS
The Way Forward
While the Board is pleased with the achievements over the years, and views the organization as being well poisedasanindustryleader,tocapitalizeontechnologicaladvancementstothebenefitofallourclientsandthe Country as a whole, it is recognized that bold steps must be taken if this potential is to be realized. The Boardrecognizesthatmuchis,andwillbeexpectedof,theorganizationifJamaicaistoachievethebenefitsofatransformed,efficientandcost-effectivepublicsector,underpinnedbytheuseofappropriateinformationtechnology and systems, and the appropriate use of technology.
FSL will continue to utilize the available resources and the appropriate technologies to provide seamless integration within and between the various agencies of the Government of Jamaica, and further, to be a catalyst formeaningfulandbeneficialchange.FSLwillalsocontinuetoexploittheincomeearningopportunitiesthatexist beyond the borders of the Government of Jamaica, while continuing cost-containment measures.
Acknowledgement
The Board of Directors takes this opportunity to express sincere appreciation to all employees for their continued collective sterling effort and commitment to cause. The Board of Directors would also wish to acknowledge and record appreciation for the support received over the years from the Ministry of Finance and the Public Service, and our clients and business partners.
Director Director
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FISCAL SERVICES LIMITED
ANNUAL REPORT 2010 14
EXECUTIVE MANAGEMENT
Under the leadership of Mrs. Dyon Woolcock, Acting Managing Director, the Executive Management continues to ensure that the overall performance, strategic direction and policy implementation of the organization are achieved.
In addition to the Finance & Planning Division, the Software Engineering Division, the Technical Services Division,four(4)departmentsreporttotheofficeoftheManagingDirector,namely;SpecialProjects,InternalAudit, Administration and Human Resource Management (HRM).
The following provides an overview of the activities undertaken and major achievements realized by the respective areasduringthefiscalyearendedMarch31,2010.
FISCAL SERVICES LIMITED
ANNUAL REPORT 201015
EXECUTIVE MANAGEMENT
The Special Projects Department is headed by the Director of Special Projects, Mr. Leroy Cooke and has the responsibility of managing, developing, implementing and supporting computerised systems for several government and non-government organizations. The responsibility also extends to countries within the Caribbean region.
During the fiscal period ended March 31, 2010, theSpecial Projects Department provided operational support for the following systems:
KingstonContainerTerminalsLimitedSystem•
KingstonWharvesLimitedE-PaymentSystem•
PostOfficeAutomatedSystem•Antigua and Barbuda Customs Automated Services •(CASE)
Major developments and operational highlights for the period under review are as follows:
Post Office Counter Automation SystemDuring the review period, development work on the Post OfficeCounterAutomatedSystemwascompleted.Afinalpilot reviewexercisewascarriedoutduring themonthofSeptember2009,andthesystemhasbeeninoperationattheLiguaneaPostOfficesincethen.
AnadditionalproposalwassubmittedtothePostOfficefor the implementation of the system across multiple postofficesites.Weareawaitinga formal responsefromthePostOfficeonthisproposal.
Kingston Container Terminals (KCT) and Kingston Wharves Limited (KWL) E-Payment System.TheKCTandKWLepaymentsystemspaymentportalswere developed by FSL to provide a secure, real-time
SPECIAL PROJECTS DEPARTMENT
FISCAL SERVICES LIMITED
ANNUAL REPORT 2010 16
EXECUTIVE MANAGEMENT
onlinepaymentfacilityforclientsofKCTandKWL.
As at March 31, 2010, contracts for the continuedsupport and maintenance of both KCT and KWLE-Payment systems was secured.
Antigua and Barbuda CASE System DuringthefiscalyearendedMarch31,2010,theSpecialProjects Department, continued to give support to the Antigua and Barbuda Customs Automated Services (ABCASE) system. This system was implemented in June2008.Amaintenancesupportcontractwassignedwith the Government of Antigua and Barbuda (GOAB) in September 2009. This service contract includesapplication support, database management, help desk and backup services.
The GOAB also indicated an interest in acquiring several other solutions to further enhance their Customs operations.
INTERNAL AUDIT DEPARTMENT
The Internal Audit Department, under the leadership of Ms. Aselee Sutherland, Department Head, has
the responsibility of examining and evaluating the activities of the organization. This is done by conducting independent periodic audits to ensure that the quality of the organization’s internal controls relating to the administrative,financialandproductionprocessesaremaintained at generally accepted levels.
During the year, the Department was able to achieve the following:
The preparation and submission of the Audit Plan •totheMD’sOfficeandtheAuditSubcommitteeofthe Board of Directors.
The completion of approximately 85% of the•planned audits.
The conducting of ad hoc audits (at the request of •management and also initiated by Internal Audit).
The Department will continue to provide its services to management and the Board with in the aim of strengtheninganycontrolweaknessesidentified.
FISCAL SERVICES LIMITED
ANNUAL REPORT 201017
EXECUTIVE MANAGEMENT
ADMINISTRATION DEPARTMENT
The Administration Department, under the leadership of Mrs. Fern Townsend, Department Head, has the responsibility of ensuring that the organization is provided with the physical environment and the required infrastructure that facilitate the company providing services to our clients. In addition, the Department has the responsibility of ensuring that the environment is safe, secure and facilitates production at the highest level. To achieve these objectives, the Department provides services such as security, transportation, canteen, property management, stores, andofficeservices,allofwhichareveryimportanttothe productive environment.
Effective September 1, 2009, the AdministrationDepartment was transferred from the Finance and Planning Division to the Executive Management group.
The Department now therefore reports directly to the ManagingDirector’sOffice.
During the period under review, several projects were pursued, in keeping with the corporate objective, to enhance/improve the physical infrastructure ofcompany. The following are the major projects that were pursued during the period:
Constructionoftwo(2)showerunits.•Replacement of obsolete air conditioning units in •specificareaswithmoreefficientsystems.Procurement of modular furniture for several areas •within the organization.Procurement of CCTV Surveillance and Access •Control Systems. Refurbishing of the guardhouse. •Refurbishing of the car park.•
A number of service-related contracts were commissioned and executed during the review period. These include staff transportation, pest control, garbage disposal & sanitization and janitorial services.
Despite the many challenges, the department continues to face, the team remains committed to using the resources available, to provide support services to the operationsdivisionsforthebenefitofbothourinternaland external clients.
FISCAL SERVICES LIMITED
ANNUAL REPORT 2010 18
EXECUTIVE MANAGEMENT
HUMAN RESOURCE MANAGEMENT DEPARTMENT
The Human Resource Management (HRM) Department, managed by Mrs. Lavonne Brown, Department Head, is responsible for ensuring that the organization is equipped with the needed human resources to ensure the timely delivery of quality service to our clients. The HRM Department is committed to teamwork and isablystrengthenedby itsHumanResourceOfficersand Secretary. The objectives of the department are achieved through teamwork in the application of human resource management strategies and concepts that includes recruitment and selection, training and retraining of staff, administration and application of the organization’s HRM Policies and Procedures, in order to ensure alignment to the overall goals and objectives of the organization.
During the fiscal year ended March 31, 2010, thefollowing major activities were pursued:
Review of the company’s Policies and Procedures •Manual.Review and implementation of HRM Procedures •Manual, thereby strengthening and streamlining the processes of the HRM Department for greater efficiency.Re-implementation of Staff Loan Committee•Review of the Training program with a view to •implementinganimprovedprocessesforefficiencyand effectivenessDefinition of the requirements for a new•computerised Human Resource Management Information System. This is the first step in theprocess of procuring a new system.
EmploymentThe chart shows actual staffing for fiscal year ended March 31, 2010 compared with previous fiscal yearendedMarch31,2009.
The Software Engineering Division, under the leadership of Mr. Donavon Bourne, Acting Director, continues to play a pivotal role in the use of Information Communication Technology (ICT) and Information Systems by our clients in the attainment of their business objectives. The services provided include: Requirements Gathering and Analysis, Systems Analysis, Design, Development, Testing, Acquisition (Selection), Integration, Implementation and Post-implementation Support. To provide these services, the DivisionisstructuredinfiveDepartments(5)namely:
Quality Management – headed by • Mrs. Beverley Maillard;Research, Technical Assistance & Training – •headed by Mr. Walt Brown;Application Engineering Services for Tax •Administration – headed by Mrs. Shernette Barham;Application Engineering Services for Customs, •Trade Facilitation & the Ministry of Finance and the Public Service Special Projects – headed by Mr. Donavon Bourne; andApplication Engineering Services for Other Clients •– headed by Ms. Marion Lim Chong.
Missing: Mr. Donavon Bourne, Acting Director and Ms. Marion Lim Chong
Mrs. Shernette Barham
Mrs. Berverley Maillard
Mr. Walt Brown
FISCAL SERVICES LIMITED
ANNUAL REPORT 2010 20
SOFTWARE ENGINEERING DIVISION
During the review period, some of the major activities and achievements were:
The continued migration of systems from the UNIX •Operating System to LINUX Operating System, along with the upgrading of the database management system (Informix) to a more current release. In this regard, the Taxpayer Registration System (TRN) and Tax Compliance Certificate (TCC) systemswere moved to this new environment.
The expansion of the scope of the electronic •filing(e-filing)andelectronicpayment(epayment)systems. These systems allow taxpayers to pay and/or file certain tax returns online. Prior tothe 2009/2010 fiscal period, using the internet,taxpayers could only file GCT and SCT returnswhile being able to make payments for GCT, SCT, Property Tax, Traffic Ticket, Betting Tax, FirearmLicence fee, Drivers Licence fee and Hotel Licence fee. With the recent expansion of the systems, taxpayerscannowfileandpaystatutorydeductionsand contributions, that is PAYE, Education Tax, NIS and HEART online. In addition, individuals and corporations can file and pay their incometax online and make their declaration of estimated income and tax payable for a particular year.
The Taxpayers’ Reminder System (TAXREM) was •completed and implemented. This system sends text messages to taxpayer’s mobile telephones, advising them of issues, events or transactions requiring their attention. These events include due dates for motor vehicle registration certificatesand motor vehicle fitness certificates. This isa free subscription service offered by the Tax Administration Department.
The implementation of the Ministry of Health Trade •System(MOHTS)duringthelastquarterofthefiscalyear. The system is used by the Pharmaceutical Regulatory Affairs Division of the Ministry of Health. This system automates the application, processing and issuance of permits for the importation of pharmaceutical products, cosmetics, chemicals, etc. This system expands the offerings in the area
of trade facilitation.
The Traffic Ticket Management System (TTMS)•was developed on behalf of the Ministry of National Security. This system facilitates the management of traffic tickets issued by the Police. TheTTMSisoneof twocomponents inanewTrafficTicketSystem that will be implemented nationally.
Supporting clients’ initiative to achieve full Electronic •Manifest Submission. System enhancements was also done to facilitate an Authorised Economic Operator initiative by the Jamaica Customs Department. These initiatives are aimed at improving customer service and revenue collection.
Also, despite the fact that there was no new •development or implementation for the Securities Management System (SMS), tremendous support was provided to the Debt Management Unit of the MOFPS in achieving their targeted settlement dates with respect to the Jamaica Debt Exchange (JDX), a GOJ initiative to restructure domestic debt.
FISCAL SERVICES LIMITED
ANNUAL REPORT 201021
TECHNICAL SERVICES DIVISION
The Technical Services Division remains focused in its role of ensuring that the organization achieves its goals and objectives despite the many challenges that it faces. The Division, under the leadership of Mr. Douglas Edwards, Director, is charged with the responsibility for designing, developing, implementing, and maintaining technology solutions in keeping with the government’s and the corporate strategic objectives and industry standards
For the year under review, the Division focused on support for the major Tax Administration projects, and the maintenance and upgrade of the Information
Technology infrastructure and systems serving Tax Administration’s operations.
In addition, significant efforts were employed instrengthening our customer service operations, through;
re-orientation of staff to having greater delivery of •serviceatthefirstpointofcontact,moving decision-making closer to the areas of •implementation,employment of more resources for the monitoring •of the service delivery systems.
Mr. Crafton Jennings
Mrs. Constance Vassell
Mr. Thomas Thompson II
Mr. Douglas Edwards
FISCAL SERVICES LIMITED
ANNUAL REPORT 2010 22
TECHNICAL SERVICES DIVISION
The overall responsibilities of the Division are to provide:
Help Desk Services•System and database administration support.•Hardware/softwareprocurementservices.•Project management, Installation and maintenance •services. Data centre bureau services.•Communication systems development and •infrastructure support.
In ensuring that the Division carries out its functions in an efficient and effective manner, the Division isdivided into three (3) Departments, namely; Customer Relations Operations (CRO), Network and Facilities, and Technical Support, with each having its own mandate.
The following highlights the roles and functions of each Department:
CUSTOMER RELATIONS & OPERATIONS DEPARTMENT
The Customer Relations & Operations Department, managed by Mrs. Constance Vassell, Department Head, is responsible for providing quality customer service to our clients, and for ensuring that systems are in place so that our clients have access to accurate information that supports their business operations. Customer service delivered to our clients are achieved throughtheUnitsidentifiedbelow:
The Help Desk Unit• , provides a single point of contact for FSL’s internal and external clients to log services requests, report faults, relay information make inquiry or seek assistance with respect to systems in operation. All reports to the unit are logged and tracked through to completion via the Customer Relations Management (CRM) tool. The unit responds to all clients in a timely manner and conducts follow up activities to ensure that resolutions are satisfactory dealt with. The above is provided to all clients by a cadre of knowledgeable and friendly staff.
The Computer Operations Unit• has the responsibility of monitoring the performance of the suite of servers on which our clients’ systems are hosted,andperformingcertainroutineback-officeoperations, including backup of client’s data. The backup guarantees the security of our clients’ data and provides a reliable source of recovery from off-line storage should the need arise. Capitalizing on the technology, the backup processes are undertaken in a manner that facilitates systems accessibility by users 24x7. In addition, should adisaster occur at the main facility (FSL), we have the ability to fail over to a hot site in order to resume mission critical services.
The Computer Operations Unit also hosts and monitors hot site hosting services and Off Site Data storage for clients as a commercial endeavour.
FISCAL SERVICES LIMITED
ANNUAL REPORT 201023
TECHNICAL SERVICES DIVISION
NETWORK & FACILITIES DEPARTMENT
The Networks and Facilities Department, managed by Mr. Thomas Thompson II, Department Head, provides Network (LAN/WANandNetworkSecurity) andWebAdministration Services. These services are provided to all Revenue Services sites across the island. The Department’s main responsibilities include:
Ensuring network infrastructure at all sites meets •industry standards and that the sites have reliable, robust and secure network connectivity to the Data Management Centre.Ensuring that network throughput to sites •is adequately provisioned, monitored and maintained.The management of web, internet services, and •internet connectivity.Securing the network and its services from network •attacks, threats, and vulnerabilities.
Major activities undertaken by the Department for the period under review were:
The strengthening of network security with the •implementation of an Intrusion Prevention System (IPS). The IPS monitors network and/or systemactivities for malicious or unwanted behaviour and can react, in real-time, to block or prevent those activities.Thissystemwasconfiguredwithchokepoints on various segments of FSL’s network. With monitors in these segments, all traffic traversingto and from devices are scanned and where necessary offensive packets are dropped while still allowing other traffic to pass. The IPS hasalso been configured to be used in conjunctionwith the Firewall Clusters at FSL to improve the determinationofmaliciousattacksand/or events,and acting on them
The enhancement of the network infrastructure in •the Data Centre at Fiscal Services Limited (FSL) ,with the implementation of a Network Management System (NMS). NMS provides for the monitoring of WAN links, LAN devices and services. Its real time monitoring capabilities have assisted in detecting possible failures and improving response times to failures, resulting in an improvement in the quality of service provided to our customers.
The upgrading of the WAN infrastructure for •Customs Departments, through the implementation of fiber links forWAN connection. This upgraderesulted in a 1Gbps WAN connection network boasts for several customs sites, improving their network performance and throughput.
The enhancement of the voice communication •system between Customs New Port East (NPE) and IRDKingStreet, through the implementationof a VoIP PBX system over the WAN.
The upgrading of the email system with the •implementation of the Lotus Domino Email and collaboration system.
The management of the procurement process for •the acquisition of structured cabling and network
FISCAL SERVICES LIMITED
ANNUAL REPORT 2010 24
TECHNICAL SERVICES DIVISION
equipment for the expansion of the Taxpayer Audit and Assessment Department, Mandeville branch.
The upgrading of the bandwidth capacity of the •Revenue Services wide area network (FISCNET) to facilitate improved network response time and increase throughput for various Revenue service applications.
The installation of network infrastructure at the •Hendon Plaza in Savanna-La-Mar to facilitate the relocation of the Savanna-La-Mar IRD.
TECHNICAL SUPPORT DEPARTMENT
Under the leadership of Mr. Crafton Jennings, Department Head, the Technical Support Department is charged with the overall responsibilities for providing hardware planning, design and maintenance, systems operations and database management, data warehousing and bureau services to the Revenue Services Departments other government agencies. The Department’s main responsibilities include:
Ensuring all server systems at the Data Centre and •client sites meet industry standards and deliver the agreed levels of performance and availability.Ensuring that data storage and handling capacities •are adequately provisioned, monitored and maintained.The management of Power Systems and Touch •Point Devices.Securing data and application services from attacks, •threats, and vulnerabilities.
During the fiscal period ended March 31, 2010, thefollowing major activities were undertaken by the Department:
The deployment of servers to replace obsolete •servers that were deployed under the Integrated Computerised Tax Administration System (ICTAS) project in 1999.
The migration of the TCC and TRN applications •to the Itanium/HPUNIXenvironment, to facilitategreater improvement in the performance and availability of the TRN and TCC services.
The provision of project management services •to the Ministry of Finance and Public Service for the acquisition, installation and commissioning of standby generator systems for the Ministry and the Financial Investigation Department (FID) complex.
A programme of System Availability Enhancement •was pursued with the preparation of a High Availability Cluster system to be implemented for ICTAS, TCC and TRN, the expansion of database replication to cover additional applications and the installation of a redundant power distribution system.
The upgrading of the server systems continued with •the migration of all INCRS Type A server systems.
Systems were put in place to provide proactive •administration of the production systems. This was achieved by the centralization of system logs and the implementation of utilities for automatic monitoring andnotification.Thesystemalsoprovidesdatafortrend and fault analysis.
FISCAL SERVICES LIMITED
ANNUAL REPORT 201025
FINANCE & PLANNING DIVISION
The Finance and Planning Division, under the leadership on Mr. Barrington G. Senior, Director, continues to provide requiredfinancialsupport to theorganizationto effectively facilitate development and operational services to the Revenue Services Departments (RSDs), Customs, MOFPS and other Government agencies.
In pursuit of it’s organizational mandate, the Division also coordinates the development of the organization’s strategic and operational programmes. To achieve its various goals and objectives the Division is divided into two Departments, namely Finance and Planning.
During the year in review, the Division employed various strategies aimed at giving continued strategic and operational support to corporate programmes such as:
Overall budget management relating to the three •(3)majorprogrammes.Inlightoftheacutefinancialand economic conditions being experienced by the company, resource allocation for the major programmes were closely monitored. This was done to ensure that scarce financial and otherresources were utilized in the most efficient andeffective ways. Additionally, budgetary strategies employed ensured that at all time the government’s computerization objectives were given priority to facilitate achieving operational objectives for the RSDs, Customs, MOFPS and other Government agencies.
The application of Working Capital management •continuedduringthefiscalperiodnotwithstandingthe challenges faced by the organization. The financial and economic framework in which the
Ms. Sophia Williams
Mr. Christopher Scott
Mr. Barrington Senior
FISCAL SERVICES LIMITED
ANNUAL REPORT 2010 26
FINANCE & PLANNING DIVISION
company operated during the fiscal period underreview contributed significantly to this conditions.Notwithstanding, a number of strategies were employed to ensure that funds were collected on a timely basis and that debt obligations were met when due to ensure that computerization services to the RSDs, Customs, MOFPS and other Government agencies were uninterrupted. At year end, net working capital ratio increased by 124.9% over that for the previous year. Current ratio at year end also increased by 45.6% over that for the previous year. These ratios demonstrated that the companyeffectivelyemployedappropriatefinancialand management strategies to contain expenses, effectively managed its cash flow, receivablesand payables, bearing in mind the critical support services provided to our clients.
The Division adopted a structured processing •strategyduringthefiscalperiod,soastoeffectivelydevelop and submit various reports to MOFPS and other regulatory bodies as required. Reports are required to be submitted on a timely basis in keeping with the statutory deadlines. In this regard, the production and delivery of the 2009Annual Report was completed and submitted within the required statutory deadline. This was an accomplishment for the company, notwithstanding the various challenges faced.
Given the continued challenges faced by the company, consequence of the existing national economic and financial conditions, the fiscal period 2010/2011, willhave to be entered into with new vision and renewed commitments. In this regard, the Finance and Planning Division will continue to work with the rest of the organization to support corporate goals and objectives. This renewed focus will ensure that corporate resources are managed within the best intent of the organization to continue giving support to government’s revenue collection programmes.
The following highlights the operation of the Finance andPlanningDepartmentsduringthefiscalperiod.
FINANCE DEPARTMENT
The Finance Department is managed by Ms. Sophia Williams, Department Head. The responsibilities of theDepartmentare themanagementof thefinancialresources of the company, the recording of transactions, revenue collection, payment of debt obligations when due, cost determination, budget administration and ensuring compliance with all necessary accounting standards, company policy and other financial andaccounting regulatory requirements.
For the period under review, major achievements for the Department were:
Prepared year end accounts and facilitating year •endauditforfinancialyear2008/2009.Thismajorexercise was completed as per schedule to facilitate havingtheauditedfinancialstatementsincludedintheAnnualReportbyJuly15,2009.
Undertook daily cash flow and working capital•management to provide ongoing support to the operations of the company. Continued planning and forecasting cash flow•
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ANNUAL REPORT 201027
FINANCE & PLANNING DIVISION
needs for the company.
Continued to work closely with all other Departments •within the organization so that all contractual commitments for purchase of goods and services were completed in a timely manner.
Contributed significantly to the company’s•information management system through the preparationoffinancialandotherspecialreports.
The Department continues to face many challenges, particularly, those relating to financial, economicfactors and resources constraints. Notwithstanding, the Department, through its team members, will continue to show dedication to their task and to work for the good of the organization, so that both external and internal customersaresatisfied.
PLANNING & INFORMATION MANAGEMENT DEPARTMENT
The Planning and Information Management Department, under the leadership of Mr. Christopher Scott, Department Head, has the responsibility for coordinating and developing the organization’s corporate Strategic & Operational Programme. In addition, the Department monitors and analyzes operational results to measure accomplishments against established objectives.
The Department is also responsible for conducting reviews and initiating solutions for existing in-house information systems. Notwithstanding efforts made in this regard, the Department is faced with various challenges and resource limitations, hence achievements in this area were less than anticipated.
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ANNUAL REPORT 2010 28
FINANCE & PLANNING DIVISION
During the year, the Department achieved the following:
C/Liability to C/AssetsNo. of Time Current Liabilities iscovered by Current Assets 1.80 2.48 1.83 2.17 1.20
FISCAL SERVICES LIMITED
ANNUAL REPORT 201033
TECHNOLOGY HIGHLIGHT
Securing Network Infrastructure with an Intrusion Prevention System (IPS)
In this Information Technology (IT) age, Network Security has become a very important feature because of the need for companies and governments to secure their data from both internal and external security risks. With this in mind FSL has found it necessary to enhance its network security with the use of an Intrusion Prevention System (IPS).
Intrusion prevention system (IPS) is a network securitydevicethatisusedtomonitornetworkand/orsystem activities for malicious or unwanted behavior. This security device can react, in real-time, to block or prevent those malicious or unwanted activities. A network-based IPS, for example, when operated on-line,isusedtomonitorallnetworktrafficformaliciouscode or attacks. When an attack is detected, IPS will drop the offending packets while allowing all other traffictopassthroughthenetwork.
Use of the IPSThe IPS gathers information on the activities of attackers and then acts by removing and/or limitingtheiraccesstothenetwork.TheIPSalsoreconfiguresthe network to prevent similar attacks in the future. In addition, the IPS has the capability to prevent attacks on the network at the source of the threat or from the threat destination.
FSL’s Use of the IPSFSL has implemented an Enterasys IPS to streamline how it secures the sensitive data that it manages. The IPS uses network sensors to monitor all network and system activities for malicious or unwanted behaviour and can react, in real-time, to block or prevent those activities. This system was implemented with choke points to forceall trafficpassing through thenetworkto enter the IPS sensor before reaching its destination. Therearefour(4)networksensorsatvarioussegmentsof FSL’s network. This setup works seamlessly without impacting users as the IPS appears invisible to all users. With monitors in these segments, all traffictraversing to and from devices within these network segments are scanned and where necessary, offending packetsaredroppedandacceptabletrafficisallowed
topass.TheIPShasalsobeenconfiguredtobeusedin conjunction with the Firewall Clusters already in use atFSL to assist in identifyingmalicious attacks and/or events. The diagram below provides an overview of theIPSastraffictraversesthenetwork.
FISCNET
INTERNET
PRODN
DEV
DMZ
INTERNAL FIREWALL
INTERNET FIREWALL
DMZ IPS
PRODUCTION IPS
DEVELOPMENT IPS
010101010101
0101
01010101
01010101
01010101
01010101
EXTERNAL USER
WEB SERVERS
SERVERS
IPS INFRASTRUCTURE
Benefits to FSL of an IPSTheuseofIPShasproventobeverybeneficialtoFSL’soperationsandassuch,hascontributedsignificantlyto improving the security of data transmitted over the network by our clients. The IPS has provided several benefits,whichincludes:
Protecting the network resources by removing the •threat of attack from potential intruders.The ability to contain attacks as soon as they are •identified (real-time), limiting the impact of thesecurity incident.The ability to monitor and indicate if changes are •madetoaserver’sconfigurationfilesandtoanalyzeall calls to the Operating System (OS) kernel by means of a Host Based Sensor.
Giventheconfigurationindicatedabove,ifanexternaluser accesses a website hosted by FSL such as Jamaica Tax Online, all information sent to and from the user must pass through the IPS for analysis. The same is done for internal FSL staff as well as staff at agencies that connect to FSL to access services.
With the IPS in use FSL’s network has become more resilient and provides an upper-hand in ensuring network and data security.
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ANNUAL REPORT 2010 34
PROJECT HIGHLIGHTS
Stamp Office Information System
(SOIS)Brief DescriptionThe Stamp Office Information System (SOIS) wasdeveloped to facilitate the administering of the registration, assessment and collection of taxes and duties due and payable. In addition, the system authenticates documents submitted to the Stamp Duty and Transfer Tax Department in support of certain agreements and transactions effected by taxpayers. The system is being used at three sites – namely: Harbour Street, May Pen Revenue Services Centre and Montego Bay Revenue Services Centre.
Development/Operational OverviewForthefiscalyearendedMarch31,2010,thesystemwas in operational mode. At the end of the period, enhancement work to the system was being done. On completion, the system will be able to capture the details of property owner’s objection to the assessed value of a property (when a property transfer is being done).
Taxpayer Registration Number (TRN)
Brief DescriptionThe Taxpayer Registration Number (TRN) was implemented in 1996. This system facilitates the automated registration and assignment of a single unique number to each taxable entity, such as individuals, partnerships, companies, and other business organizations.
Among themany benefits this computerized systemoffers are:
Identificationofeachtaxpayingentitybytheuseof•a unique number;Easy access to a reliable database;•Easyidentificationofthenatureortypeofbusiness,•
geographical location and ownership; Integration of all Revenue Departments under the •ICTAS computerization programme.
In 2007, FSL developed and implemented a TRNValidation Web Service facility, which allows entities subscribing to the service to automatically validate TRNs over the Internet.
Development/Operational OverviewForthefiscalperiodendedMarch31,2010,theTRNsystem remained in operational support mode. There were no major development activities occurring during the period. The application was, however, migrated to the LINUX Operating System and a more current release of the (Informix) Data Base Management System. This migration is part of a medium-term cost-containmentandoperationalefficiencystrategybeingundertaken for a number of systems. At the end of the fiscalperiod,therewasheightenedinterestintheuseof the TRN Validation Services from both government and private sector entities and it is anticipated that there will be an increase in the number of clients using thefacilitytoconfirmthevalidityofTRNspresentedbytheir clients. Currently, three (3) clients use the TRN Validation Web Services facility.
Tax Compliance Certificate (TCC)
Brief DescriptionTheTCCsystem issuesTaxComplianceCertificatesto individuals and companies by way of an automated system. This system:
Ensures that all categories of business entities are •fullycompliantbeforeacertificateisissued;Facilitates improved service to the taxpayer by •reducing the time taken to process request to issue TCC; Sends an electronic copy of the data to the Customs •Department, thereby reducing the incidence of fraud; KeepsanarchiveofallTCCsissuedandtherefore•reducestheneedforlargefilingareas;and,Provides easy access to historical data.•
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ANNUAL REPORT 201035
PROJECT HIGHLIGHTS
Development/Operational OverviewFor the fiscal period ended March 31, 2010, thesystem was in operational support mode, and there were no major development activities. The system was migrated to the LINUX Operating System and a more current release of the Informix Data Base Management System. This migration is a part of a medium-term cost-containmentandoperationalefficiencystrategybeingundertaken for a number of systems.
Automated Motor Vehicle System (AMVS)
Brief DescriptionThe Automated Motor Vehicle System (AMVS) was designed to:
Capture data on motor vehicles and their owners;•Facilitate the production of motor vehicle titles; •Provide motor vehicle related information as •needed; Facilitate easy identification and location of a•vehicle by owner’s name, TRN, chassis number, or licence plate; Enable AMVS users to link licence plates to •owner; Allow the recording of lien and other conditions of •ownership associated with the vehicle;Provide quick response to requests for information •from agencies such as the Police, FID, etc.; Prevent the transfer of a vehicle where certain •conditionsarenotsatisfied.
Development/Operational OverviewForthefiscalperiodendedMarch31,2010,anumberof enhancements were implemented to further improve the interface with the Customs and the Cashiering systems, and consequently improve operational efficiencies and control in Tax Administration. Atthe end of the period, activities were in progress to further improve the controls with respect to insurance certificatesissuedbymotorinsurancecompanies.
Integrated New Cash Remittance System
(INCRS)Brief DescriptionThe INCRS enhances the tax collection machinery in all Collectorates island-wide.
Majorbenefitsinclude:Providing a reconcilable system for the receipt of •taxes and fees; Faster processing of revenue transactions;•Providing an interface to other systems; •Uniquely identifying each transaction by Taxpayer •Registration Number (TRN), Property Valuation Number, Motor Vehicle Identification Number, orTrafficTicketNumber–whereapplicable;Uniquely identifying each user and providing an •audit trail for each user’s activities on the system;Enabling the system to accept cheque payment for •more than one Motor Vehicle Transaction;Enablingthesystemtogeneratefixedorflatrates•automaticallyforspecifictax-typesandfeesbasedon predefined parameters, without the cashier’sintervention; Allowing for the acceptance of credit cards as a •payment type.
Development/Operational Overview ForthefiscalperiodendedMarch31,2010,thesystemwas essentially in operational support mode. Except for certain enhancements relating to the interfaces with the Automated Motor Vehicle System and the new TrafficTicketManagementSystem(TTMS),therewereno major enhancements.
FISCAL SERVICES LIMITED
ANNUAL REPORT 2010 36
PROJECT HIGHLIGHTS
Tax Portal SystemBrief DescriptionThe tax portal system was developed and implemented in December 2004. The system allows taxpayers toeffect payment for a select group of taxes and fees over the internet using Visa and MasterCard credit cards – to a “Virtual Collectorate”. During the fiscalperiodendedMarch31,2006,KeyCardwasincludedas another credit card for effecting payments.
Development/Operational Overview DuringtheperiodendedMarch31,2010,FSLdevelopedand implemented enhancements that facilitated the on-linefilingandpaymentofpayrollstatutorydeductionsand contributions for PAYE (Income Tax), Education Tax,NISandHEARTcontributions,plusthefilingandpayment of corporate income taxes. The successful deployment of the latest enhancements further improves customer (Taxpayer) service and operational efficiencieswithinTaxAdministration.
Land Valuation System (LVS)
Brief DescriptionThe Land Valuation System (LVS) was developed and implemented to facilitate the administration and registrationofalllandsinJamaica.Over70usersfromtheNationalLandAgency’sofficesatArdenneRoad,Mandeville and Montego Bay access the system on a daily basis.
The major functionalities provided by the system include:
Providing unique numbers and details for each •parcel of land;The recording of factors that reflect the price for•groups in respective geographical areas;Facilitating valuation for Property Tax assessment;•Generating of valuation notices, notices of •amendments, etc.
Development/Operational OverviewDuring the fiscal period ended March 31, 2010, thesystem remained in operational support mode. At the end of the period, major upgrading of the hardware, operating system and database management system infrastructure was being planned. This upgrade is a preliminary step aimed at including TRN in this system. At completion of the infrastructure upgrade, the enhancement to include TRN should contribute to furtherimprovementsinoperationalefficienciesattheNLA and Tax Administration. Further, it should advance Tax Administration’s efforts to more easily detect taxable activities of its clients.
Property Tax System (PTS)
Brief DescriptionThe Property Tax System keeps records of all properties throughout the island for which an annual assessment is done. Major features of this system include:
Providing details on all properties throughout the •island; Capturing of accounting information (obligations •and payments) for all properties;Reassessing of properties; •Reprinting of assessment notices; •Tracking of all reliefs and exemptions issued;•Providing enquiry and report information for use in •compliance activities; and,Calculating taxes, interest and penalty obligations.•Allowing the taxpayer to make payments for any •parcel at any Collectorate island-wide – irrespective of where the parcel is located; andAutomatically accepting and posting payment •transactions from the INCRS and the Tax Portal.
Development/Operational OverviewDuring the fiscal period ended March 31, 2010, theapplication remained in production support mode and there were no system enhancements done.
FISCAL SERVICES LIMITED
ANNUAL REPORT 201037
PROJECT HIGHLIGHTS
Integrated Computerized Tax Administration
System (ICTAS)Brief DescriptionDevelopment of the ICTAS began in 1998 - under the Government’s Tax Administration Reform Programme (TAXARP). The system seeks to provide a single integrated facility for all tax type registration, taxpayer and revenue accounting, payments and returns processing, compliance and delinquency control, taxpayer classification, audit, assessment and casemanagement. System development began with the use ofexternalconsultants.InAugust2000,FSLassumedresponsibility for the completion of the development work and implementation of the system.
Development/Operational OverviewDuringthefiscalyearendedMarch31,2010,nomajorsystem enhancements were developed and the system wasinoperationalmode.Attheendofthefiscalyear,development had started on an enhancement to allow the de-registration of tax types (GCT, Income Tax, etc.) for Taxpayers. This means that, Taxpayers having been de-registered for a tax type, will no longer required to fileareturnfortheperiodofde-registration.
Tax Reminder System (TaxRem)
Brief DescriptionThe Tax Reminder System is designed to, in an expedient manner, advise Tax Administration’s clients (taxpayers) of issues, events or transactions requiring their attention. In so doing, the system has helped to realize improvements in service delivery, revenue collections and Taxpayer compliance.
The system has been developed and implemented in two phases. The system advises Taxpayers (who have registered for theservice)of certainpastdueand/orup-coming events in relation to certain transactions
with Tax Administration Department. The advice is communicated to Taxpayers via text messages to mobilephonesand/ore-mailaddressasprovidedbythe Taxpayer. When fully completed, the system will send reminders to Taxpayers in relation to:
GCTreturnsand/orpayments•MotorVehicleRegistrationCertificates•MotorVehicleCertificatesofFitness•IncomeTaxreturnsand/orpayments•PAYEreturnsand/orpayments•TaxComplianceCertificates•Stamp Duty and Transfer Tax Documents•Drivers’ Licence Expiry•
Development/Operational OverviewDuring the fiscal year ended March 31, 2010, FSLcompleted the development and implementation of the system. Implementation was done in two phases, with Phase 1 being implemented in June 2009 -incorporating reminder notices in relation to: GCT returns and payments, Motor Vehicle Registration Certificates,andCertificatesofFitness.Subsequently,Phase 2was implemented in the last quarter of thefiscalyear,wheretheservicewasexpandedtoincludeother notices as indicated above. Taxpayers who wish to receive reminder notices can register for the service atanyIRDofficeisland-wideoronlineattheTaxPortal(www.Jamaicatax-online.gov.jm)
Jamaica Budget Information System
(JaBIS)Brief Description The Jamaica Budget Information System (JaBIS) facilitates the preparation of the annual Estimates of Expenditure for the government of Jamaica and the subsequent monthly disbursement of funds based on requirements and the availability of funds.
Major features of the system include:Providing the facility to do “what if” analysis of •budget data at different levels;Providing historical trend analysis;•
FISCAL SERVICES LIMITED
ANNUAL REPORT 2010 38
PROJECT HIGHLIGHTSLinking of Cash Management and budget •functions;Printing of budget reports from the system without •user editing; and,Facilitatingcashflowmanagement.•
Development/Operational OverviewDuring the fiscal period ended March 31, 2010, thesystem remained in operational support mode, and continued to meet user expectations and anticipated benefits.
Financial Management Information System
(FMIS)Brief DescriptionThe FMIS was developed by the Administrative Reform Programme (ARP) group. The main objective of this system is to give support to four broad areas of the financial management functions within GovernmentMinistries, Departments and Agencies. These areas are Budgeting, Accounting, Cash Management and Financial Reporting. After being in operation for several years at several sites, support responsibility for theFMISwastransferredtoFSLJune2000.
Development/Operational OverviewDuring the fiscal period ended March 31, 2010, thesystem remained in operational support mode, and continued to meet user expectations and anticipated benefits.
Securities Management System (SMS)
Brief DescriptionThe Securities Management System was developed and implemented for the Debt Management Unit (DMU)oftheMinistryofFinanceandPlanningin2001.This system facilitates the tracking and monitoring of Government’sinvestmentfund.In2004,FSLdevelopedandimplementeda“LandBondsModule”specifically
designed for the Accountant General’s Department (AGD). Development/Operational OverviewForthefiscalyearendedMarch31,2010,thesystemremained in operational support mode, and continued to meet user expectations. Of note is the fact that the system facilitated the payment of interest made under the Jamaica Debt Exchange (JDX) program, the redemption of debt instruments and the issuance of new instruments, under the program.
Payroll SystemBrief DescriptionThe Payroll System is the product of a partnership between FSL and a payroll application provider. In general terms, the system features:
A web-enabled application operating in an •Application Service Provider (ASP) modelUnlimited incomes and deductions;•Pay by cheque or direct deposit•Statutory reports•Calculation of overtime and leave payments•Central hosting and support of the software and •infrastructure by FSL – thereby reducing the capital outlay and overhead costs which would otherwise be borne by each site.
Development/Operational OverviewDuring the fiscal period ended March 31, 2010, thesystem continued in production support mode. At the endofthefiscalperiod,activitieshadcommencedforimplementation of the Jamaica Constabulary Force payrolls.
License Management Information System
(LMIS)Brief DescriptionThe License Management Information System Release1 was developed and implemented for the Transport Authority in September 2004 with theobjectives of :
FISCAL SERVICES LIMITED
ANNUAL REPORT 201039
Reducing the time spent by taxpayers applying for •roadlicensesintheofficesoftheTransportAuthorityand, in traveling between that organization and the Collectorates in order to secure road licenses and commercial carrier and public passenger plates;Expediting the license processing (and delivery) •time; Improving the integrity and consistency of the •motor vehicle data maintained by the Collectorates in the Automated Motor Vehicle System (AMVS), and that of the LMIS.Improving operational efficiencies and controls in•the processing of road licenses applications and the accounting for fees collected, through:
Automated interfaces with Tax Administrations’ •TRN, AMVS and TCC systems to validate documents presented by applicants.Automated interface with the Transport •Authority’s general accounting system for the posting of charges relating to fees collected.Automated interface (and a controls) between •the “Cashiering” and the “License Printing” modules of the system.
InDecember2008,the“onlinepaymentandapplicationsubmission module” was implemented. Through this facility, applicants for Commercial Carrier (CC) licences are able to submit applications and effect related payments via the Internet.
Development/Operational Overview DuringthefiscalyearendedMarch31,2010,thesystemcontinued to be operated in production mode, without any major enhancements. During the last quarter of the fiscalyear,developmentstartedonanenhancementtoallow for the processing and printing of road licences for a fraction of the full licensing period, which in most cases is one year.
Traffic Ticket Management System
(TTMS)Brief DescriptionTheTrafficTicketManagement System (TTMS) is aweb-based application which was developed on behalf of the Ministry of National Security (MNS). The system was designed to facilitate themanagement of traffictickets issued by the Police.
Major features of the system include:Matching of tickets with payments•Reporting on outstanding tickets•Calculation and management of demerit points •accumulated against Offenders’ driver’s licencesRecording of court proceedings related to traffic•offencesCollection of payments made at the Courts for •trafficoffencesRecordingandtrackingofwarrantsissuedtotraffic•offenders
The data-entry of traffic tickets is handled by anexternal system, the Traffic Ticket Issuing System(TTIS) that transfers the tickets to TTMS for processing and management.
Development/Operational Overview At the end of the fiscal year, development wascompleted, and implementation awaited the completion of the external system (TTIS) and client readiness.
PROJECT HIGHLIGHTS
FINANCIALSTATEMENTS
FISCAL SERVICES LIMITED
ANNUAL REPORT 201043
DIRECTORS’ REPORT
TheDirectors present herewith the audited Financial Statements for the year ended 31,March 2010. Thecompany provides efficient, cost effective, quality information systems and support services primarily to the Revenue Departments and other Government agencies as directed by the Ministry of Finance and the Public Service. The Board of Directors' and the Divisional Directors' Reports contain further information on the business activities of the company.
1. Financial Results Highlights of the Year: 2010 2009 $'000 $'000
The Directors wish to express thanks to the management and staff for their continued dedication and hard work.
By Order of the Board
Director
44
Independent Auditors’ Report
To the Members ofFiscal Services Limited
Report on the Financial Statements
We have audited the accompanying financial statements of Fiscal Services Limited, set out on pages 46 to 73, which comprisethestatementoffinancialpositionasof31March2010andthestatementofcomprehensiveincome,statementof changes in equity and statement of cash flow for the year then ended and a summary of significant accounting policies and other explanatory notes.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards and with the requirements of the Jamaican Companies Act. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
45
Members of Fiscal Services LimitedIndependent Auditors’ ReportPage 2
Opinion
In our opinion, the accompanying financial statements give a true and fair view of the financial position of the company as of 31March2010,andofitsfinancialperformanceanditscashflowsfortheyearthenendedinaccordancewithInternationalFinancial Reporting Standards and the requirements of the Jamaican Companies Act.
Report on Other Legal and Regulatory Requirements
As required by the Jamaican Companies Act, we have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purposes of our audit.
In our opinion, proper accounting records have been kept, so far as appears from our examination of those records, and the accompanying financial statements are in agreement therewith and give the information required by the Act, in the manner so required.
Chartered Accountants
9July2010Kingston,Jamaica
46
Page 1
Fiscal Services LimitedStatement of Comprehensive IncomeYear ended 31 March 2010(expressed in Jamaican dollars unless otherwise indicated)
Note2010$’000
2009$’000
Revenue 6 1,119,122 998,172
Other operating income 7 60,341 45,384
Deferred income credit 10,251 7,152
Administration expenses (842,091) (827,949)
Project expenses (167,901) (181,307)
Surplus before Taxation 179,722 41,452
Taxation 10 (18,125) (11,336)
Net Surplus 161,597 30,116
Other Comprehensive Income - -Total Comprehensive Income 161,597 30,116
47
Page 2
Fiscal Services LimitedStatement of Financial Position31 March 2010(expressed in Jamaican dollars unless otherwise indicated)
Cash provided by operating activities 207,520 15,694Cash Flows from Investing Activities
Purchase of property, plant and equipment 11/12 (19,645) (21,667)Proceeds from sale of property, plant and equipment 336 1,253Cash used in investing activities (19,309) (20,414)
Cash Flows from Financing ActivityCapital grant received 18 351 29,395Cash provided by financing activity 351 29,395
Increase in cash and cash equivalents 188,562 24,675Cash and cash equivalents at beginning of year 106,961 82,286CASH AND CASH EQUIVALENTS AT END OF YEAR 16 295,523 106,961
50
Page 5
Fiscal Services LimitedNotes to the Financial Statements31 March 2010(expressed in Jamaican dollars unless otherwise indicated)
1. Identification and Activities
The company is incorporated in Jamaica. The main activity of the company is the provision of a range of computerservices to the Government of Jamaica, including engineering, technology, network communication, qualityassurance and data bureau services. The registered office of the company is located at 235b Old Hope Road,Kingston 6.
The company also manages projects for capital expenditure relating to the computerization of the JamaicanRevenue Departments and other special projects on behalf of the Ministry of Finance and the Public Service. Therelated assets and liabilities have been included in these financial statements.
The company is economically dependent on the Government of Jamaica and receives funding through the Ministryof Finance and the Public Service, for services provided to other Government entities.
2. Parent Company
The shares of the company are held by the Accountant General of Jamaica, a corporation sole pursuant to theCrown Property (Vesting) Act, 1960.
3. Significant Accounting Policies
The principal accounting policies applied in the preparation of the financial statements are set out below. Thesepolicies have been consistently applied to all the years presented, unless otherwise stated.
(a) Basis of preparationThese financial statements have been prepared in conformity with International Financial Reporting Standards(IFRS) and have been prepared under the historical cost convention.
The preparation of financial statements in conformity with IFRS requires the use of certain critical accountingestimates. It also requires management to exercise its judgement in the process of applying the company’saccounting policies. Although these estimates are based on management’s best knowledge of current eventsand action, actual results could differ from those estimates. The areas involving a higher degree of judgementor complexity, or areas where assumptions and estimates are significant to the financial statements, aredisclosed in Note 5.
Standards, interpretations and amendments to published standards effective 1 January 2009 that arerelevant to the company’s operationsCertain new standards, interpretations and amendments to existing standards have been published thatbecame effective during the current financial year. The company has assessed the relevance of all such newstandards, interpretations and amendments and has adopted the following IFRS, which are relevant to itsoperations. The comparative figures have been amended as required, in accordance with the relevantrequirements.
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Fiscal Services LimitedNotes to the Financial Statements31 March 2010(expressed in Jamaican dollars unless otherwise indicated)
3. Significant Accounting Policies (Continued)
(a) Basis of preparation (continued)
Standards, interpretations and amendments to published standards effective 1 January 2009 that arerelevant to the company’s operations (continued) IAS 1 (Revised), ‘Presentation of Financial Statements’. The main objective in revising IAS 1 was to
aggregate information in the financial statements on the basis of shared characteristics. IAS 1 affects thepresentation of owner changes in equity and of comprehensive income. It will not change the recognition,measurement or disclosure of specific transactions and other events required by other IFRS. IAS 1requires an entity to present, in a statement of changes in shareholders’ equity, all owner changes inshareholders’ equity. All non-owner changes in shareholders’ equity (i.e. comprehensive income) is beingrequired to be presented in one statement of comprehensive income or in two statements (a separateincome statement and a statement of comprehensive income). Components of comprehensive incomeare not permitted to be presented in the statement of changes in shareholders’ equity. In applying thisrevision, the company has presented all owner changes in equity in the statement of changes in equity,and all non-owner changes in equity in one performance statement (the statement of comprehensiveincome). Comparative information has been re-presented to conform with the revised standard.
IAS 36 (Amendment), ‘Impairment of assets’. The amendment is part of the IASB’s annualimprovement project published in May 2008. Where fair value less costs to sell is calculated on the basisof discounted cash flows, disclosures equivalent to those for value-in-use calculation should be made.The amendment does not have any impact on current year’s financial statements.
IAS 38 (Amendment), ‘Intangible Assets’. The amendment states that an asset may only berecognised in the event that payment has been made in advance of obtaining right of access to goods orreceipt of services. It also deletes wording that states that there is ‘rarely, if ever’ a method that results ina lower rate of amortisation than the use of the straight line method. The amendment does not have anyimpact on the current year’s financial statements.
IFRS 7 (Amendment), Financial instruments – disclosures (effective for annual periods beginning onor after 1 January 2009). The amendment requires enhanced disclosures about fair valuemeasurement and liquidity risk. In particular, the amendment requires disclosure of fair valuemeasurements by level of a fair value measurement hierarchy.
Standards, amendments and interpretations to existing standards that are not yet effective and havenot been early adopted by the companyAt the date of authorisation of these financial statements, certain new standards, interpretations andamendments to existing standards have been issued which were not yet effective at year end date, andwhich the company has not early adopted. The company has assessed the relevance of all such newstandards, interpretations and amendments, has determined that the following may be relevant to itsoperations.
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Fiscal Services LimitedNotes to the Financial Statements31 March 2010(expressed in Jamaican dollars unless otherwise indicated)
3. Significant Accounting Policies (Continued)
(a) Basis of preparation (continued)
Standards, amendments and interpretations to existing standards that are not yet effective andhave not been early adopted by the company (continued)
IAS 1 (Amendment), ‘Presentation of financial statements’ (effective for annual periodsbeginning on or after 1 January 2010). The amendment provides clarification that the potentialsettlement of a liability by the issue of equity is not relevant to its classification as current or non-current. By amending the definition of current liability, the amendment permits a liability to beclassified as non-current (provided that the entity has an unconditional right to defer settlement bytransfer of cash or other assets for at least 12 months after the accounting period), notwithstandingthe fact that the entity could be required by the counterparty to settle in shares at any time. Thisamendment is not expected to have a material impact on the company’s financial statements.
(b) Foreign currency translationFunctional and presentation currencyItems included in the financial statements are measured and presented using the currency of the primaryeconomic environment in which the entity operates. The functional and presentation currency for thecompany is Jamaican dollars.
Transactions and balancesForeign currency transactions are accounted for at the exchange rates prevailing at the dates of thetransactions. At the year end date, monetary assets and liabilities denominated in foreign currency aretranslated using the closing exchange rate.
Exchange differences arising from the settlement of transactions at rates different from those at the datesof the transactions and unrealised foreign exchange differences on unsettled foreign currency monetaryassets and liabilities are recognised in the income and expenditure statement.
(c) Financial instrumentsA financial instrument is any contract that gives rise to both a financial asset in one entity and a financialliability or equity of another entity.
Financial assetsThe company classifies its financial assets in the following categories: loans and receivables and availablefor sale. The classification depends on the purpose for which the financial assets were acquired.Management determines the classification of its financial assets at initial recognition and re-evaluates thisdesignation at every reporting date. At year end date, accounts receivable were classified as loans andreceivables and cash and short term deposits were classified as available for sale.
Financial liabilitiesThe company’s financial liabilities are initially measured at fair value, net of transaction costs, and aresubsequently measured at amortised cost using the effective interest method. At year end date, the tradepayables balance was classified as available for sale.
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Fiscal Services LimitedNotes to the Financial Statements31 March 2010(expressed in Jamaican dollars unless otherwise indicated)
3. Significant Accounting Policies (Continued)
(d) Revenue recognitionRevenue comprises the fair value of the consideration received or receivable for the services in theordinary course of the company’s activities. Revenue is recognised as follows:
IncomeRevenue comprises the subvention and grant income received from the Ministry of Finance and the PublicService and income earned from other projects. Subvention income for recurrent expenditure isrecognized when received. Income earned from services provided to other entities is recorded on anaccrual basis.
Interest incomeInterest income is recognised in the profit and loss account on a time-proportion basis using the effectiveinterest method.
(e) Income taxesTaxation expense in the statement of comprehensive income comprises of current and deferred incometaxes.
Current tax charge is based on the taxable profit for the year, which differ from the profit before taxreported because it excludes items that are taxable or deductible in other years, and items that are nevertaxable or deductible. The company’s liability for current tax is calculated at tax rates that have beenenacted at the year end date.
Deferred tax is the tax expected to be paid or recovered on differences between the carrying amounts ofassets and liabilities and the corresponding tax bases. Deferred income tax is provided in full, using theliability method, on temporary differences arising between the tax bases of assets and liabilities and theircarrying amounts in the financial statements. Currently enacted tax rates are used in the determination ofdeferred income tax.
Deferred tax assets are recognised to the extent that it is probable that future taxable profit will beavailable against which the temporary differences can be utilised.
Deferred tax is charged or credited in the statement of comprehensive income.
(f) Intangible assetsAcquired computer software licences are capitalised on the basis of the costs incurred to acquire andbring to use the specific software. These costs are amortised over their estimated useful lives.
Costs associated with developing or maintaining computer software programmes are recognised as anexpense as incurred. Costs that are directly associated with the production of identifiable and uniquesoftware products controlled by the company, and that will probably generate economic benefitsexceeding costs beyond one year, are recognised as intangible assets. Direct costs include softwaredevelopment employee costs and an appropriate portion of relevant overheads.
Computer software development costs recognised as assets are amortised over their estimated usefullives.
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Fiscal Services LimitedNotes to the Financial Statements31 March 2010(expressed in Jamaican dollars unless otherwise indicated)
3. Significant Accounting Policies (Continued)
(g) Property, plant and equipmentAll items of property, plant and equipment are stated at historical cost less accumulated depreciation andimpairment losses.
Depreciation is calculated on the straight-line basis at annual rates that will write off the carrying value ofeach asset over the period of its expected useful life. Annual depreciation rates are as follows:
(h) Impairment of non-current assetsProperty, plant and equipment and other non-current assets are reviewed periodically for impairment. Animpairment loss is recognised for the amount by which the carrying amount of the asset exceeds itsrecoverable amount, which is the higher of an asset’s net selling price and value in use. For the purposesof assessing impairment, assets are grouped at the lowest levels for which there are separatelyidentifiable cash flows.
(i) Employee benefitsThe company operates a defined benefit pension plan for its employees. The scheme is generally fundedthrough payments to a trustee-administered fund as determined by periodic actuarial calculations. Adefined benefit plan is a pension plan that defines an amount of pension benefit that an employee willreceive on retirement, usually dependent on one or more factors such as age, years of service orcompensation.
The asset or liability recognised in the statement of financial position in respect of defined benefit pensionplans is the difference between the present value of the defined benefit obligation at the year end dateand the fair value of plan assets, together with adjustments for unrecognised actuarial gains or losses andpast service costs. The defined benefit obligation is calculated by independent actuaries using theprojected unit credit method. The present value of the defined benefit obligation is determined bydiscounting the estimated future cash outflows using interest rates of high-quality corporate bonds that aredenominated in the currency in which the benefits will be paid and that have terms to maturityapproximating to the terms of the related pension liability.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions inexcess of the greater of 10% of the value of plan assets or 10% of the defined benefit obligation arecharged or credited to income over the employees’ expected average remaining working lives.
Past-service costs are recognised immediately in income, unless the changes to the pension plan areconditional on the employees remaining in service for a specified period of time (the vesting period). Inthis case, the past-service costs are amortised on a straight-line basis over the vesting period.
(j) InventoriesInventories are valued at the lower of cost and net realisable value.
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Fiscal Services LimitedNotes to the Financial Statements31 March 2010(expressed in Jamaican dollars unless otherwise indicated)
3. Significant Accounting Policies (Continued)
(k) ReceivablesTrade receivables are carried at original invoice amount less provision made for impairment of thesereceivables. A provision for impairment of these receivables is established when there is objectiveevidence that the company will not be able to collect all amounts due according to the original terms ofreceivables.
(l) Cash and cash equivalentsCash and cash equivalents are carried in the statement of financial position at cost. For the purposes ofthe cash flow statement, cash and cash equivalents comprise cash at bank and in hand and short-termdeposits.
(m) Capital grant funding received and deferred incomeGrant funds received specifically for the acquisition of capital assets are credited directly to deferredincome and credited to income over the useful lives of the relevant assets by reference to depreciationcharges.
(n) PayablesPayables are stated at cost.
(o) Comparative informationWhere necessary, comparative figures have been reclassified to conform with changes in presentation in thecurrent year. In particular, the comparatives have been adjusted or extended to reflect the requirements ofnew IFRS, as well as, amendments to and interpretations of existing IFRS (Note 3 (a)).
4. Financial Risk Management
The company’s activities expose it to a variety of financial risks: market risk (including currency risk), credit riskand liquidity risk. The company’s overall risk management programme focuses on the unpredictability offinancial markets and seeks to minimise potential adverse effects on the company’s financial performance.
The company’s risk management policies are designed to identify and analyse these risks, to set appropriaterisk limits and controls, and to monitor the risks and adherence to limits by means of reliable and up-to-dateinformation systems. The company regularly reviews its risk management policies and systems to reflectchanges in markets, products and emerging best practice.
The Board of Directors is ultimately responsible for the establishment and oversight of the company’s riskmanagement framework. The Board provides principles for overall risk management, as well as policiescovering specific areas, such as foreign exchange risk, interest rate risk, credit risk, and investment of excessliquidity.
The Board has established Finance and Audit Committees for managing and monitoring risks. The Financeand Audit Committees oversee how management monitors compliance with the company’s risk managementpolicies and procedures and reviews the adequacy of the risk management framework in relation to the risksfaced by the company.
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Fiscal Services LimitedNotes to the Financial Statements31 March 2010(expressed in Jamaican dollars unless otherwise indicated)
4. Financial Risk Management (Continued)
(a) Credit riskThe company takes on exposure to credit risk, which is the risk that its customers, clients orcounterparties will cause a financial loss for the company by failing to discharge their contractualobligations. Credit exposures arise principally from the company’s receivables from the Ministry ofFinance & the Public Service and other Government Departments.
Credit review process
(i) InvestmentsThe company limits its exposure to credit risk by investing mainly in liquid securities, withcounterparties that have high credit quality and Government of Jamaica securities. Accordingly,management does not expect any counterparty to fail to meet its obligations.
(ii) Trade and other receivablesThe company’s exposure to credit risk is influenced mainly by the individual characteristics of eachcustomer. Management has established a credit policy under which each customer is analysedindividually for creditworthiness prior to the company offering them a credit facility.
Customer credit risk is monitored according to their credit characteristics such as whether it is aGovernment or private company, geographic location, industry, aging profile, and previous financialdifficulties.
The company establishes an allowance for impairment that represents its estimate of incurred lossesin respect of trade receivables. The company addresses impairment assessment by individuallyassessing allowances.
The company’s average credit period is 30 days. The company has provided fully for all tradereceivables over 365 days based on historical experience which dictates that amounts past duebeyond 365 days are generally not recoverable.
(iii) CashCash transactions are limited to high credit quality financial institutions.
Maximum exposure to credit riskThe company’s maximum exposure to credit risk at year end was as follows:
2010 2009$’000 $’000
Trade receivables 151,112 71,245
Cash & short term deposits 295,523 106,961
446,635 178,206
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Fiscal Services LimitedNotes to the Financial Statements31 March 2010(expressed in Jamaican dollars unless otherwise indicated)
4. Financial Risk Management (Continued)
(a) Credit risk (continued)
Exposure to credit risk for trade receivablesThe following table summarises the company’s credit exposure for trade receivables at their carryingamounts, as categorised by the customer sector:
2010 2009$’000 $’000
Ministry of Finance and the PublicService 122,629 64,043
Government Depts/Agencies 19,910 5,114Overseas Government
Departments 8,392 -
Private Companies 181 2,088
151,112 71,245
The majority of trade receivables are receivable from customers in Jamaica.
Ageing analysis of trade receivables that are past due but not impairedTrade receivables that are less than three months past due are not considered impaired. As of31 March 2010, trade receivables of $3,320,000 (2009 – $62,000) were past due but not impaired. Theageing analysis of these trade receivables was as follows:
2010 2009$’000 $’000
31 – 60 days 3,320 62
Ageing analysis of trade receivables that are past due and impairedAs of 31 March 2010, trade receivables of $22,026,000 (2009 – $45,730,000) were impaired. Theindividually impaired receivables mainly relate to Government of Jamaica amounts. It was assessed that aportion of the receivables is expected to be recovered. The ageing of these receivables was as follows:
2010 2009$’000 $’000
0ver 3 months 22,026 45,730
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Fiscal Services LimitedNotes to the Financial Statements31 March 2010(expressed in Jamaican dollars unless otherwise indicated)
4. Financial Risk Management (Continued)
(a) Credit risk (continued)
Movement analysis of provision for impairment of trade receivables
The movement on the provision for impairment of trade receivables was as follows:
2010 2009$’000 $’000
At 1 April - 254
Amounts provided for during the year - -
Unused amounts reversed - (254)
At 31 March - -
The creation and release of provision for impaired receivables have been included in expenses in theprofit and loss account. Amounts charged to the allowance account are generally written off when there isno expectation of recovering additional cash.
(b) Liquidity risk
Liquidity risk is the risk that the company is unable to meet its payment obligations associated with itsfinancial liabilities when they fall due. Prudent liquidity risk management implies maintaining sufficientcash and marketable securities, the availability of funding through an adequate amount of committedcredit facilities and the ability to close out market positions.
Liquidity risk management process
The company’s liquidity management process includes:
(i) Monitoring future cash flows and liquidity on a daily basis.
(ii) Optimising cash returns on investment;
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Fiscal Services LimitedNotes to the Financial Statements31 March 2010(expressed in Jamaican dollars unless otherwise indicated)
4. Financial Risk Management (Continued)
(b) Liquidity risk (continued)
Undiscounted cash flows of financial liabilitiesThe maturity profile of the company’s financial liabilities at year end based on contractual undiscountedpayments was as follows:
2010Within 1
Month1 to 3
Months3 to 12
Months Total
$’000 $’000 $’000 $’000
Trade payables 170,759 57,086 57,086 284,931
Other 13,395 - - 13,395
184,154 57,086 57,086 298,326
2009
Trade payables 49,373 - - 49,373
Other 39,333 - - 39,333
88,706 - - 88,706
Assets available to meet all of the liabilities and to cover financial liabilities include cash and short terminvestments.
(c) Market risk
The company takes on exposure to market risks, which is the risk that the fair value or future cash flows ofa financial instrument will fluctuate because of changes in market prices. Market risks mainly arise fromchanges in foreign currency exchange rates and interest rates. Market risk exposures are measured usingsensitivity analysis. There has been no change to the company’s exposure to market risks or the manner inwhich it manages and measures the risk.
Currency riskCurrency risk is the risk that the fair value of future cash flows of a financial instrument will fluctuatebecause of changes in foreign exchange rates. The company is exposed to foreign exchange risk arisingfrom various currency exposures, primarily with respect to the US dollar. Foreign exchange risk arises fromfuture commercial transactions and recognised assets and liabilities.
The company manages its foreign exchange risk by ensuring that the net exposure in foreign assets andliabilities is kept to an acceptable level by monitoring currency positions.
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Fiscal Services LimitedNotes to the Financial Statements31 March 2010(expressed in Jamaican dollars unless otherwise indicated)
4. Financial Risk Management (Continued)
(c) Market risk (continued)
Currency risk (continued)The company’s exposure to foreign currency exchange rate risk at year end was as follows:
Interest rate riskInterest rate risk is the risk that the value or future cash flows of a financial instrument will fluctuatebecause of changes in market interest rates. Floating rate instruments expose the company to cash flowinterest risk, whereas fixed interest rate instruments expose the company to fair value interest risk. As at31 March 2010 the company had no significant exposure to such risks.
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Fiscal Services LimitedNotes to the Financial Statements31 March 2010(expressed in Jamaican dollars unless otherwise indicated)
4. Financial Risk Management (Continued)
(d) Capital managementThe company’s objectives when managing capital are to safeguard the company’s ability to continue as agoing concern in order to provide returns for its stakeholders.
5. Critical Accounting Estimates and Judgements in Applying Accounting Policies
The company makes estimates and assumptions that affect the reported amounts of assets and liabilities withinthe next financial year. Estimates and judgements are continually evaluated and are based on historicalexperience and other factors, including expectations of future events that are believed to be reasonable underthe circumstances.
Key sources of estimation uncertaintyThe company makes estimates and assumptions concerning the future. The resulting accounting estimateswill, by definition, seldom equal the related actual results. The estimates and assumptions that have asignificant risk of causing a material adjustment to carrying amounts of assets and liabilities within the nextfinancial year are discussed below.
Pension plan assets and post employment benefit obligationsThe cost of these benefits and the present value of the pension and the other post-employment liabilities dependon a number of factors that are determined on an actuarial basis using a number of assumptions. Theassumption used in determining the net periodic cost (income) for the pension and post employment benefitsinclude the expected long-term rate of return on the relevant plan assets, the discount rate and, in the case of thepost-employment medical benefits, the expected rate of increase in medical costs. Any changes in theseassumptions will impact the net periodic cost (income) recorded for the pension and the post-employment benefitsand may affect planned funding of the pension plans. The expected return on the plan assets assumption isdetermined on a uniform basis, considering long term historical returns, asset allocation and future estimates oflong-term investments returns. The discount rate represents the interest rate that should be used to determine thepresent value of estimated future cash outflows required to settle the pension and other post-employment benefitsobligations. In determining the most appropriate rate, the interest rate of high quality corporate bonds that aredenominated in the currency in which the benefits will be paid and that have terms to maturity approximately to theterms of the related liability are used. The expected rate of increase of medical cost has been determined bycomparing the historical relationship of the actual medical cost increase with the rate of inflation in the respectiveeconomy. Past experience has shown that actual medical costs have increased on average by one time the rateof inflation. Other key assumptions for the pension and post retirement benefits cost and credits are based in parton current market conditions.
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Fiscal Services LimitedNotes to the Financial Statements31 March 2010(expressed in Jamaican dollars unless otherwise indicated)
6. Revenue
Income reflects operational subventions received from the Ministry of Finance and the Public Service and grantincome for various projects as follows:
2010$’000
2009$’000
Operational subvention from Ministry of Financeand the Public Service 956,334 855,599
Grant income 162,788 142,573
1,119,122 998,172
7. Other Operating Income
2010$’000
2009$’000
Computer services 46,730 38,231
Interest income 13,388 3,437
Miscellaneous 223 3,716
60,341 45,384
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Fiscal Services LimitedNotes to the Financial Statements31 March 2010(expressed in Jamaican dollars unless otherwise indicated)
8. Expenses by Nature
Expenses by nature include total administration and project expenses:
The number of persons employed by the company at the end of the year was 219 (2009 - 215).
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Fiscal Services LimitedNotes to the Financial Statements31 March 2010(expressed in Jamaican dollars unless otherwise indicated)
10. Taxation
(a) Taxation in the statement of comprehensive income is as a result of deferred income tax (Note 17) onsurplus for the year adjusted for taxation purposes and comprises income tax at 33⅓%.
2010$’000
2009$’000
Current income tax 48,216 10,185Prior year over accrual (10,185) -
Deferred income tax (Note 17) (19,906) 1,151
18,125 11,336
(b) Reconciliation of applicable tax charges to effective tax charge:The tax on the company’s surplus differs from the theoretical amount that would arise using the applicabletax rate of 33⅓%, as follows:
2010$’000
2009$’000
Surplus before tax 179,722 41,452
Tax calculated at 33⅓% 59,907 13,817
Adjusted for the effects of:
Income not subject to tax (6,538) (488)
Prior year over accrual (10,185) -
Deferred tax asset not previously recognised (25,225) -
Other 166 (1,993)
18,125 11,336
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Fiscal Services LimitedNotes to the Financial Statements31 March 2010(expressed in Jamaican dollars unless otherwise indicated)
Depreciation -At 1 April 2008 41,391 15,336 13,453 6,633 - 76,813Charge for the year 2,049 2,057 2,325 721 - 7,152On disposals (1,587) - - (979) - (2,566)
At 31 March 2009 41,853 17,393 15,778 6,375 - 81,399Charge for the year 3,240 2,298 3,347 1,351 - 10,236
On disposals - (28) (1,891) (627) - (2,546)
At 31 March 2010 45,093 19,663 17,234 7,099 - 89,089Net Book Value -
31 March 2010 11,981 14,093 26,274 5,008 293 57,64931 March 2009 13,297 15,816 13,040 6,359 293 48,805
The company, through the Government of Jamaica has the use of the premises housing its main offices, whichare used free of rent or any such charges.
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Fiscal Services LimitedNotes to the Financial Statements31 March 2010(expressed in Jamaican dollars unless otherwise indicated)
12. Intangible Assets
Total$’000
At Cost -
At 1 April 2008 8,809
Additions -
At 31 March 2009 8,809
Additions 523
At 31 March 2010 9,332
Depreciation -
At 1 April 2008 8,809
Charge for the year -
At 31 March 2009 8,809
Charge for the year 15
At 31 March 2010 8,824
Net Book Value -
31 March 2010 508
31 March 2009 -
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Fiscal Services LimitedNotes to the Financial Statements31 March 2010(expressed in Jamaican dollars unless otherwise indicated)
13. Post-employment Benefits
2010$’000
2009$’000
Asset recognised in the statement of financial position –
Pension scheme 103,499 111,895
Amounts recognised in the statement of comprehensive income (Note 9) –
Pension scheme 30,126 4,475
Pension scheme benefitsThe company participates in a joint contributory pension scheme, which is open to all permanent employees andadministered by trustees.
The scheme, which commenced on 1 September 1987, is funded by employee contributions at 5% of salary withthe option to contribute an additional 5% and employer contribution at 6.5% of salary. Pension at normalretirement age is based on 2% of final 3-year average salary per year of pensionable service, subject tomaximum of 33⅓ years of pensionable service. Independent actuaries value the scheme periodically using theProjected Unit Credit Method. The latest actuarial valuation was done as at 31 March 2010.
The amounts recognised in the statement of financial position are determined as follows:
2010 2009$’000 $’000
Fair value of plan assets (492,974) (354,695)Present value of funded obligations 389,475 242,800
(103,499) (111,895)Unrecognised actuarial losses (68,117) (39,987)Limitation due to asset restriction 68,117 39,987Asset in the statement of financial position (103,499) (111,895)
The movement in fair value of plan assets during the year was as follows:2010
$’0002009
$’000At the beginning of year 354,695 342,178Expected return in plan assets 48,343 46,052Actuarial loss on plan assets 54,508 (57,668)Employer contributions 21,746 20,369Employee contributions 21,821 21,525Benefits paid (8,139) (17,761)
At end of year 492,974 354,695
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Fiscal Services LimitedNotes to the Financial Statements31 March 2010(expressed in Jamaican dollars unless otherwise indicated)
13. Post-employment Benefits (Continued)
Pension scheme benefits (continued)
The movement in present value of the defined benefit obligations during the year was as follows:2010
$’0002009
$’000At the beginning of year 242,800 246,177Current service cost 14,336 14,743Interest cost 35,831 28,506Employee contributions 21,821 21,525Actuarial losses/(gains) on obligations 82,826 (50,390)Benefits paid (8,139) (17,761)At end of year 389,475 242,800
The amounts recognised in the statement of comprehensive income are as follows:
2010 2009$’000 $’000
Current service cost 14,336 14,743Interest cost 35,831 28,506Expected return on plan assets (48,343) (46,052)Recognised actuarial loss 172 -Change in asset limitation 28,130 7,278Total income included in staff costs (Note 9) 30,126 4,475
The total charge of $30,126,000 (2009 - $4,475,000) was included in administration and project expenses inthe statement of comprehensive income.
The actual return on plan assets was $112,557,000 (2009 – ($5,489,000)).
The expected contribution to the plan for the year ended 31 March 2011 amount to $46,222,000.
The distribution of plan assets was as follows:2010 2009
Fiscal Services LimitedNotes to the Financial Statements31 March 2010(expressed in Jamaican dollars unless otherwise indicated)
13. Post-employment Benefits (Continued)
Pension scheme benefits (continued)
The expected return on plan assets was determined by considering the expected returns available on the assetsunderlying the current investment policy. Expected yields on fixed interest investments are based on grossredemption yields as at the year end date. Expected returns on equity and property investments reflect long-termreal rates of return experienced in the respective markets.
The five-year trend for the fair value of plan assets, the defined benefit obligation, the surplus in the plan, andexperience adjustments for plan assets and liabilities is as follows:
2010$’000
2009$’000
2008$’000
2007$’000
2006$’000
Fair value of plan assets 492,974 354,695 342,178 281,334 245,022
Defined benefit obligations (389,475) (242,800) (246,177) (197,762) (150,364)
Surplus 103,499 111,895 96,001 83,572 94,658
Experience adjustments –
Fair value of plan assets 82,810 57,668 4,836 (4,864) 21,200
Defined benefit obligations (54,508) (50,390) 3,229 33,187 (20,412)
Principal actuarial assumptions used in valuing post-employment benefits
The principal actuarial assumptions used in valuing post-employment benefits were as follows:
2010 2009Discount rate 11.5% 16.0%Expected return of plan assets 8.5% 13.0%Future salary increases 8.5% 13.0%Future pension increases 3% 3.5%
The average expected remaining service life of the employees is 12 years (2009 – 24 years).
Post-employment mortality for active members and mortality for pensioners and deferred pensioners is basedon the American 1994 Group Annuitant mortality (GAM94) table.
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Fiscal Services LimitedNotes to the Financial Statements31 March 2010(expressed in Jamaican dollars unless otherwise indicated)
14. Inventories
2010$’000
2009$’000
Computer spares 4,042 4,103Canteen and office supplies 2,994 4,355
7,036 8,458Less: Provision for slow moving and obsolete items (4,020) (4,020)
3,016 4,438
15. Receivables
2010$’000
2009$’000
Trade receivables 151,112 71,245
Other receivables and prepayments 172,146 61,646
323,258 132,891
16. Cash and Cash Equivalents
For the purposes of the cash flow statement, cash and cash equivalents comprise:2010
$’0002009
$’000Cash at bank and in hand 268,360 82,451
Short term deposits 27,163 24,510
295,523 106,961
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Fiscal Services LimitedNotes to the Financial Statements31 March 2010(expressed in Jamaican dollars unless otherwise indicated)
17. Deferred Income Taxes
Deferred income taxes are calculated in full on temporary differences under the liability method using aprincipal tax rate of 33⅓%.
The movement of the deferred income tax account is as follows:2010
$’0002009$’000
Liability at the beginning of the year 30,529 29,378(Credited)/charged to statement of comprehensive income (19,906) 1,151Liability at end of year 10,623 30,529
Deferred income taxes are due to the following items:2010
$’0002009$’000
Deferred income tax assets:
Property, plant and equipment 23,049 5,771
Vacation leave accrual 828 961
23,877 6,732Deferred income tax liability:
Retirement benefit asset 34,500 37,261
Net deferred income tax liabilities 10,623 30,529
The deferred tax (charged)/credited to the statement of comprehensive income comprises the following temporarydifferences:
2010$’000
2009$’000
Property, plant and equipment 17,278 3,590
Vacation leave accrual (133) 520
Retirement benefit asset 2,761 (5,261)
19,906 (1,151)
These balances include the following:2010
$’0002009
$’000Deferred tax assets to be settled after more than 12 months 23,049 5,771
Deferred tax liabilities to be recovered after more than 12 months 34,500 37,261
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Fiscal Services LimitedNotes to the Financial Statements31 March 2010(expressed in Jamaican dollars unless otherwise indicated)
18. Deferred Income
2010$’000
2009$’000
Balance at beginning of year 75,221 52,978
Capital grant received 351 29,395
Transfers to income (10,251) (7,152)
Balance at end of year 65,321 75,221
19. Payables
2010$’000
2009$’000
Trade accounts payables 284,931 49,373
Other accounts payables and accrued charges 13,395 39,333
298,326 88,706
20. Share Capital
2010 2009Authorised -
100 ordinary shares 1 1Issued and fully paid -
100 ordinary shares 1 1
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Fiscal Services LimitedNotes to the Financial Statements31 March 2010(expressed in Jamaican dollars unless otherwise indicated)
21. Related Party Transactions
During the year, the company provided services valuing $199,351,000 (2009 - $129,604,000) to fellowgovernment-owned institutions. The year end balance arising from the provision of services was $28,364,000(2009 - $24,743,000). These services were provided on similar terms and conditions as those provided tounconnected parties.
Key management compensation -2010 2009$’000 $’000
Salaries and other short-term employee benefits 8,332 6,984Payroll taxes – employer’s portion 234 194Pension benefits 350 1,399Other - 798
