The Ministry of Finance (MOF) announced on Jan. 1 that Deputy Prime Minister (DPM) and Finance Minister Heng Swee Keat will deliver the 2020 Budget Statement in Parliament on Tuesday (Feb. 18).
There will be live television and radio coverage for the said Budget Statement
A live webcast will also be available on the Singapore Budget website.
Here in the early morning to do an “autopsy” review of Allied Technologies ie. understand risk and governance lessons from the $33m debacle.
As usual, I like to sit at the front. To be close to the action 🙂 Here are my notes from the session. Thanks to ISCA and Deloitte for hosting the event.
1. Should SGX “frown” at directors who jumped ship at the first sign of trouble? Directors’ resignation and senior mgt team turnover could be used as an indicator of some underlying troubles within a company.
2. Applying the reasonable person’s judgement between our ears in understanding any issues.
3. Have we held enough of such autopsy sessions on the many corporate governance deficiencies happening in many of corporates here? Should such discussions be indemnified against legal repercussions if the intent of such sessions is for the better of Singapore?
4. Conformance and / or Performance?
If a listco is unable or unwilling to keep up to the standards required, perhaps it should consider delisting and free itself of public accountabilities.
Edgar Wong of Asiaf1rst, was interviewed by Howie Lim, Senior Producer/Presenter, Money FM 89.3 on 16 April 2019.
Here are some of the talking points:-
- What are the trends driving disruption in the accounting industry?
- What is the future of accounting firms?
- How can accounting firms help their clients embrace disruption?
- Does every small business need an accountant?
- Common small business accounting challenges?
Click HERE for a listen.
For the first two Years of Assessment (YA), client (a company) has a single corporate shareholder. This would mean that client did not qualify for full tax exemption.
For the 3rd YA, its corporate shareholder sold its shares to two individuals on the very day of the basis period.
Question – Does the client qualify for Full exemption for 3rd YA?
In ST’s “Making sense of financial statements amid rule changes” by Reinhard Klemmer, highlighted the changes since 2018 and the consequential impact of these changes.
What are the changes? ——————————————————————-
i) In 2018, Singapore transitioned from local to International Financial Reporting Standards (IFRS), also known as Singapore Financial Reporting Standards (International) (SFRS (I)).
Applicable to all listed companies issuing equity or debt on the Singapore Stock Exchange.
ii) Secondly, all Singapore companies have to adopt the new accounting standards for Revenue (SFRS 115) and for Financial Instruments (SFRS 109).
What are the consequences? ———————————————————–
i) The transition to SFRS (I) allows for some flexibility in accounting choices that companies can use. This could result in diversity in practice and a lack of comparability of financial statements; and
ii) The move towards fair-value accounting requires significant judgments and estimates to be included in the fair-value adjustments. Most of these unrealised changes in fair values are recorded directly in the income statement, without a clear distinction between realised and unrealised components.
As such, users are finding it difficult to understand and analyse the underlying performance of the companies.
Apparently, a tuition centre and second-hand car trader conveniently forget to register for GST!!!
The law says, “All businesses, including individuals deriving income from their trade, profession or vocation, should closely monitor their income and regularly assess if they need to register for GST. If their past 12-month taxable turnover has exceeded $1 million at the end of any calendar quarter, they are required to apply for GST registration within 30 days.”
Who are the Guilty parties? And what is the punishment? Prison?
- Ideas Ink School Pte Ltd (“Ideas Ink School”), a tuition centre, and its two company directors and brothers, Pek Kim Beng and Pek Kim Yew, were convicted for tax offences. Ideas Ink School was sentenced to a penalty of $7,645 and a fine of $2,000.
- Tay Soon Suan, 74, the director of Gunong Djati Credit Pte Ltd and Gunong Djati Trading Co Pte Ltd in Upper Serangoon Road, was also fined $6,000 along with a $68,464 penalty for a similar tax offence.
In addition to the GST violations, Pek Kim Beng and Pek Kim Yew also admitted to omitting their salary income to evade income tax.
Chee Mee Yen, Ideas Ink School’s bookkeeper and mother of the company directors, helped to prepare the income tax returns for the two directors, with investigations revealing that the cash salaries were omitted.
Sources – http://www.iras.gov.sg and Straits Times
Here is some recent news of foreign companies doing business in Singapore and thru’ Singapore.
In Seow Bei Yi’s article in Straits Times dated 4 April 2019, Chan Chun Sing, Minister of Trade and Industry cited 3 factors behind Singapore’s success as a Business Hub.
1. Integrated South East Asia,
2. rules-based trade system and,
3. domestic capabilities.
Well Sg does have more positives than that. We look forward to working with you and you team to extend your business into Asia.
Source – Business Times 5 April 2019
Businesses and investors place “bets” or “investments” based on their business acumen and their assessment and views of factors and trends on market demand and supply available at a certain point in time.
How would you feel if you have invested $9b as promised and subsequently certain critical parameters were changed and now adversely affect its viability?
We see land tenders being awarded to the highest bidders and retail investors buying residential and commercial properties but consumed by cooling measures and additional stamp duties being applied across the board thereafter.
What are the PURE market risks that investors are supposed to stomach? Could the investors anticipate and react to man-made risks created in the offices of civil servants?
In the letter to Business Times about Hyflux, reader Leong Mun Wai suggested Hyflux’s financial problems were caused by “an unexpected domestic policy change”.
There were also many things said at the Speakers’ Corner about govt having played a part in contributing to the state of the energy market in Singapore, the collapse of Hyflux and losses suffered by many of its creditors.
I personally would like to hear more from the govt on the state of energy market and from “someone” to chronologically outline key events leading up to that critical moment when directors of Hyflux made the decision on the billion-dollar investment in an integrated-water-treatment-cum-power-plant. EMA tried to explain in this article “Hyflux’s woes due to its own decisions, says EMA” on ST Apr 3, 2019 and “Hyflux’s financial woes ‘a result of its own commercial decisions’, says EMA” on St 2 April 2019.
Or is it developing into a situation of going to Court and everybody just tightens their lips?
Perhaps we have to wait a few years after the incident has been “declassified” for a MBA study report entitled “Is Hyflux a PURE commercial failure?” to be published.
P/S – I am not an investor of Hyflux’s bonds.
From the start to the end of “2-session” conference, my take of various announcements and speeches is the key focus on the economy. The Chinese govt is hoping that the private sector, which made up of millions of SMEs, would help to contribute to the 13 million new jobs that would need to be created ANNUALLY for social stability.
Positively and negatively speaking, despite all the fiscal and monetary expansionary pro-economy measures announced to date, there are still a lot lot more the country can do. There is still a lot of firepowers.
The country is far from running out of things to do to improve the economy. When things are improved upon annually, the country could be chugging along nicely for many years to come.
Negatively speaking, we, in the business now, are facing many bureaucratic hassles that actually increase our costs of doing business in China.
Please allow me to cite two experiences. Firstly, the difficulties to remit money INTO the country and into a company’s bank account. We even called the local branch of a Chinese bank for assistance but to no avail.
Secondly, the official authorisation ie. “signature” on documentation is based on stamping of the seal. Apparently, an unauthorised person holding a company’s seal could do some harm to my company despite the principal not being present to sign any of the papers.
To end on a positive note, any improvement is a step in the direction of progress. We, in the business community, applaud the measures announced to date.