Page 1

Financial Statements For the year ended 31 December 2008


Singapore Business Federation Annual Report 2008

Federation Information Registered Office

Council Members Tony Chew Leong-Chee

(Chairman)

Chua Thian Poh

(Vice Chairman)

Barry Desker

(Vice Chairman)

Cheng Wai Keung

(Honorary Secretary)

Lawrence Leow Chin Hin

(Deputy Honorary Secretary)

Bob Tan Beng Hai

(Honorary Treasurer)

Kristin E. Paulson

(Deputy Honorary Treasurer)

Simon Cheong Sae Peng

(Council Member)

David P. Conner

(Council Member)

Desmond Hill

(Council Member)

Hans Joachim Ihrcke

(Council Member)

Vijay Iyengar

(Council Member)

Jung Young Soo

(Council Member)

Edwin Khew Teck Fook

(Council Member)

Yasuhiko Kitagawa

(Council Member)

Dato’ Mohd Zain Abdullah

(Council Member)

Philip Ng Chee Tat

(Council Member)

Tang Kin Fei

(Council Member)

Dr Robert Yap Chin Kok

(Council Member)

Renny Yeo Ah Kiang

(Council Member)

10 Hoe Chiang Road #22-01 Keppel Towers Singapore 089315

Bankers United Overseas Bank Limited The Hong Kong and Shanghai Banking Corporation Limited Maybank Oversea-Chinese Banking Corporation Limited Sumitomo Mitsui Banking Corporation

Independent Auditor Foo Kon Tan Grant Thornton Public Accountants and Certified Public Accountants 47 Hill Street #05-01 Singapore Chinese Chamber of Commerce and Industry Building Singapore 179365


Contents l Statement by Council

01

l Independent Auditor’s Report

02

l Balance Sheet

04

l Income and Expenditure Statement

05

l Statement of Changes in Accumulated Funds 06 l Cash Flow Statement

07

l Notes to the Financial Statements

08


Singapore Business Federation Annual Report 2008

Statement by Council In the opinion of the Council, a. the accompanying financial statements of the Federation, together with the notes thereon, are drawn up so as to give a true and fair view of the state of affairs of the Federation as at 31 December 2008 and of the results of the business, changes in accumulated funds and the cash flows of the Federation for the financial year ended on that date; and b. at the date of this statement there are reasonable grounds to believe that the Federation will be able to pay its debts as and when they fall due. On behalf of the Council

..........................................................

Tony Chew Leong-Chee Chairman

..........................................................

Bob Tan Beng Hai Honorary Treasurer Dated: 16 June 2009

Financial Statements 1


Singapore Business Federation Annual Report 2008

Independent Auditor’s Report to the Members of Singapore Business Federation We have audited the accompanying financial statements of Singapore Business Federation (“the Federation”), which comprise the balance sheet as at 31 December 2008, and the income and expenditure statement, statement of changes in accumulated funds and cash flow statement 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 the Singapore Financial Reporting Standards. This responsibility includes: a. devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair profit and loss accounts and balance sheets and to maintain accountability of assets; b. selecting and applying appropriate accounting policies; and c. making accounting estimates that are reasonable in the circumstances.

Auditor’s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Singapore Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance as to whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the 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.

2 Financial Statements


Singapore Business Federation Annual Report 2008

Independent Auditor’s Report to the Members of Singapore Business Federation (Cont’d) Opinion In our opinion: a. the financial statements of the Federation are properly drawn up in accordance with the provisions of the Singapore Financial Reporting Standards so as to give a true and fair view of the state of affairs of the Federation as at 31 December 2008 and the results, changes in accumulated funds and cash flows of the Federation for the year ended on that date; and b. the accounting and other records required by the regulations enacted under Societies Act to be kept by the Federation have been properly kept in accordance with those regulations.

Foo Kon Tan Grant Thornton Public Accountants and Certified Public Accountants Singapore, 16 June 2009

Financial Statements 3


Singapore Business Federation Annual Report 2008

Balance Sheet

Note

31 December 2008 $

31 December 2007 $

Assets Non-Current Property, plant and equipment Subsidiary

3 4

701,544 3 701,547

1,087,402 – 1,087,402

Current Members’ subscription in-arrears and outstanding charges Other receivables Cash and cash equivalents

5 6 7

118,444 1,255,375 9,142,419 10,516,238 11,217,785

455,083 898,765 8,835,823 10,189,671 11,277,073

9,003,335

8,959,389

3 8

319,375 71,528 390,903

375,225 139,037 514,262

9

1,777,074 46,473 1,823,547 2,214,450 11,217,785

1,453,684 349,738 1,803,422 2,317,684 11,277,073

Total assets

Accumulated Funds And Liabilities Funds Accumulated funds Liabilities Non-Current Provision for reinstatement costs of leased premises Deferred tax liabilities Current Other payables and accruals Current tax payable Total liabilities Total funds and liabilities

The annexed notes form an integral part of and should be read in conjunction with these financial statements. 4 Financial Statements


Singapore Business Federation Annual Report 2008

Income and Expenditure Statement

Note Income Members’ subscriptions fees Events and seminars Business missions Publications Interest earned on fixed deposits Interest earned on overdue members’ subscription fees Rental income Other income Expenditure Audit remuneration Depreciation of property, plant and equipment Premise expenses Staff costs - salaries, bonuses and other costs - Central Provident Fund Operating expenses Surplus for the year before taxation Income tax expenses Net surplus for the year

10

11

Year ended 31 December 2008 $

Year ended 31 December 2007 $

6,459,159 550,076 386,437 85,553 87,121 – 101,812 35,748 7,705,906

6,690,017 2,395,937 332,274 385,644 167,929 5,197 89,850 – 10,066,848

15,000 510,081 1,094,690

13,000 662,689 913,803

3,220,218 285,529 2,557,478 7,682,996 22,910 21,036 43,946

2,839,629 268,650 3,658,719 8,356,490 1,710,358 (267,520) 1,442,838

The annexed notes form an integral part of and should be read in conjunction with these financial statements. Financial Statements 5


Singapore Business Federation Annual Report 2008

Statement of Changes in Accumulated Funds

Total accumulated fund $ Balance at 1 January 2007 Surplus for the financial year / Total income and expense recognised for the financial year

7,516,551 1,442,838

Balance at 31 December 2007 Surplus for the financial year / Total income and expense recognised for the financial year

8,959,389

Balance at 31 December 2008

9,003,335

The annexed notes form an integral part of and should be read in conjunction with these financial statements. 6 Financial Statements

43,946


Singapore Business Federation Annual Report 2008

Cash Flow Statement

Note Cash Flows from Operating Activities Surplus for the year before taxation Adjustments for: Depreciation of property, plant and equipment Interest income Operating surplus before working capital changes Decrease in members’ subscription in arrears and outstanding charges Increase in other receivables Increase in other payable and accruals Net cash generated from operating activities Interest received Income tax paid Decrease / (increase) in monies held on behalf of other associations Net cash generated from operating activities

Year ended 31 December 2008 $

Year ended 31 December 2007 $

22,910

1,710,358

510,081 (87,121) 445,870

662,688 (173,126) 2,199,920

336,639 (92,281) 323,390 1,013,618 87,121 (614,067)

283,012 (328,082) 426,975 2,581,825 173,126 (230,220)

60,551 547,223

(30,314) 2,494,417

(124,223) (55,850) (3) (180,076)

(63,735) – – (63,735)

367,147 8,775,272 9,142,419

2,430,682 6,344,590 8,775,272

Cash Flows from Investing Activities Purchase of property, plant and equipment Payment for reinstatement cost Acquisition of subsidiary Cash used in investing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of the financial year Cash and cash equivalents at end of the financial year

7

The annexed notes form an integral part of and should be read in conjunction with these financial statements. Financial Statements 7


Singapore Business Federation Annual Report 2008

Notes to the Financial Statements 1. General Information The financial statements of Singapore Business Federation for the year ended 31 December 2008 were authorised for issue in accordance with a resolution of the Council on the date of the Statement by Council. Singapore Business Federation was registered under the Societies Act on 1 April 2002. The Federation is a not-for-profit organisation. The Federation is domicile in the Republic of Singapore. The registered office of the Federation is located at 10 Hoe Chiang Road #22-01 Keppel Towers Singapore 089315. The objectives of the Federation are: a. to enhance the organisation of the business community in Singapore; and b. to represent, advance, promote and protect, in Singapore and abroad, the major business concerns (such as investment and trade opportunities and labour management issues) of business entities carrying on commerce and industry in Singapore and, in particular, of larger local and foreign companies. Under The Singapore Business Federation Act 2001 (“the Act”), every local company which has a paid-up share capital of $500,000 and above and foreign company which has a share capital of $500,000 and above and registered with the Accounting and Corporate Regulatory Authority, shall become by virtue of the Act and without election, admission or appointment, a member of the Federation.

2a. Basis of Preparation The financial statements are prepared in accordance with Singapore Financial Reporting Standards (“FRS”) including related Interpretations to FRS (“INT FRS”) promulgated by the Accounting Standards Council (“ASC”). The financial statements have been prepared under the historical cost convention, except as disclosed in the accounting policies below.

Significant accounting estimates and judgements The preparation of the financial statements in conformity with FRS requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the financial year. Although these estimates are based on management’s best knowledge of current events and actions, including expectation of future events that are believed to be reasonable, actual results may differ from those estimates. The critical accounting estimates and assumptions used and areas involving a high degree of judgements are described below:

8 Financial Statements


Singapore Business Federation Annual Report 2008

Notes to the Financial Statements 2a. Basis of Preparation (Cont’d) Income Tax Significant judgment is required in determining the capital allowances, deductibility of certain expenses and taxability of certain capital items during the estimation of the provision for income tax. There are also claims for which the ultimate tax determination is uncertain during the ordinary course of business. The Federation recognises liabilities for expected tax issues based on estimates of whether additional taxes will be due. When the final tax outcome of these matters are different from the amounts that were initially recognized, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

Depreciation of Property, Plant and Equipment Property, plant and equipment are depreciated on a straight-line basis over their estimated useful lives. Management estimates the useful lives of property, plant and equipment to be within 3 to 5 years. The carrying amount of the Federation’s property, plant and equipment as at 31 December 2008 is $701,544 (2007 - $1,087,402). Changes in the expected level of usage and technological developments could impact the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised.

Impairment of Trade Receivables The management assesses the collectability of members’ subscription in-arrear and outstanding charges. This estimate is based on the credit history of the member and the current market condition. Management reassesses the impairment loss at the balance sheet date.

2b. Interpretations and Amendments to Published Standards Effective in 2008 On 1 January 2008, the Federation adopted the new or revised FRS and INT FRS that are mandatory for application from that date. This includes the following FRS and INT FRS: Amendments to FRS 1 FRS 107 INT FRS 29 INT FRS 104 INT FRS 111 INT FRS 112 INT FRS 114

Amendments Relating to Capital Disclosure Financial Instruments: Disclosures Disclosure - Service Concession Arrangements Determining Whether an Arrangement Contains a Lease FRS102 - Group and Treasury Share Transactions Service Concession Arrangements FRS 19 - The limit on a Defined Benefit Asset, Minimum Funding Requirements and Their Interaction

The adoption of these FRS and INT FRS, where relevant to the Federation, did not result in significant changes to the Federation’s accounting policies or any substantial impact on the financial statements. FRS 107 and the complementary amended FRS 1 introduce new disclosures relating to financial instruments and capital respectively. Financial Statements 9


Singapore Business Federation Annual Report 2008

Notes to the Financial Statements 2c. FRS Not Yet Effective At the date of authorisation of these financial statements, the following FRS and INT FRS were issued but not yet effective: FRS 1 (Revised 2008) Amendments to FRS 1 (Revised 2008) FRS 2 (Amendment) FRS 7 (Amendment) FRS 8 (Amendment) FRS 11 (Amendment) FRS 16 (Amendment) FRS 19 (Amendment) FRS 23 (Amendment) FRS 27 (Amendment) Amendments to FRS 27 Amendments to FRS 32 FRS 33 (Amendment) FRS 34 (Amendment) FRS 36 (Amendment) FRS 38 (Amendment) Amendments to FRS 39 FRS 101 (Amendment) Amendments to FRS 101 Amendments to FRS 102 FRS 105 (Amendment) FRS 106 (Amendment) Amendments to FRS 107 FRS 108 INT FRS 101 (Amendment) INT FRS 112 (Amendment) INT FRS 113 INT FRS 116 INT FRS 117 Improvements to FRSs 2008

Presentation of Financial Statements Amendments Relating to Puttable Financial Instruments and Obligations Arising on Liquidation Inventories Cash Flow Statements Accounting Policies, Changes in Accounting Estimates and Errors Construction Contracts Property, Plant and Equipment Employee Benefits Borrowing Costs Consolidated and Separate Financial Statements Amendments Relating to Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate Amendments Relating to Puttable Financial Instruments and Obligations Arising on Liquidation Earnings Per Share Interim Financial Reporting Impairment of Assets Intangible Assets Amendments Relating to Reclassification of Financial Assets First-time Adoption of Financial Reporting Standards Amendments relating to Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate Amendments relating to Vesting Conditions and Cancellation Non-current Assets Held for Sale and Discontinued Operations Exploration for and Evaluation of Mineral Resources Amendments Relating to Reclassification of Financial Assets Operating Segments Changes in Existing Decommissioning, Restoration and Similar Liabilities Service Concession Arrangements Customer Loyalty Programmes Hedges of a Net Investment in a Foreign Operation Distributions of Non-Cash Assets to Owners

The Council does not anticipate that the adoption of these FRS and INT FRS in the initial periods of application will have a material impact on the financial statements of the Federation.

2d. Summary of Significant Accounting Policies 10 Financial Statements


Singapore Business Federation Annual Report 2008

Notes to the Financial Statements Consolidation The financial statements of the subsidiary have not been consolidated with the Federation’s financial statements as the Federation is of the view that they are not material to the Federation’s financial statements. The balance and transactions of the Federation are not affected by the non-consolidation.

Subsidiary A subsidiary is an entity which the Federation has the power to govern the financial and operating policies so as to obtain benefits from its activities. The Federation generally has such power when it directly or indirectly holds more than 50% of the issued share capital, or controls more than half of the voting power, or controls the composition of the board of directors. Shares in the subsidiaries are stated at cost less impairment losses on an individual subsidiary basis.

Property, Plant and Equipment and Depreciation Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses, if any. Depreciation is computed utilising the straight-line method to write off the cost of these assets over their estimated useful lives as follows: Furniture, fitting and equipment Office equipment Computer Renovation

5 years 5 years 3 years 5 years

The cost of property, plant and equipment includes expenditure that is directly attributable to the acquisition of the items. Dismantlement, removal or restoration costs are included as part of the cost of property, plant and equipment if the obligation for dismantlement, removal or restoration is incurred as a consequence of acquiring or using the asset. For acquisitions and disposals during the financial year, depreciation is provided from the month of acquisition and to the month before disposal respectively. Fully depreciated assets are retained in the books of accounts until they are no longer in use. The carrying amounts of property, plant and equipment are reviewed yearly in order to assess whether their carrying amounts need to be written down to recoverable amounts. Recoverable amount is defined as the higher of value in use and net selling price.

Financial Assets Financial assets which are within the scope of FRS 39 are classified as either financial assets at fair value through profit or loss, loan or

Financial Statements 11


Singapore Business Federation Annual Report 2008

Notes to the Financial Statements 2d. Summary of Significant Accounting Policies (Cont’d) receivables, held-to-maturity investments, or available-for-sale financial assets as appropriate. Financial assets are assigned to the different categories by management on initial recognition, depending on the purpose for which assets were acquired. The Federation’s financial assets comprise member subscriptions in-arrears and outstanding charges, other receivables and cash and cash equivalents. The financial assets are recognised in the balance sheet, when and only when the Federation becomes a party to the contractual agreements governing the financial instruments.

Loan and Receivables - Member Subscriptions In-arrears and Outstanding Charges and Other Receivables Receivables with short duration are not discounted. They are recognised at cost, which is the consideration given. Appropriate allowances for estimated irrecoverable amounts are recognised in the income and expenditure statements when there is objective evidence that the Federation will not be able to collect the debts.

Cash and Cash Equivalents Cash and cash equivalents comprise cash at bank, cash on hand and short term bank deposits which are not subject to any significant risk of changes in value, and which form an integral part of the Federation’s cash management.

Financial Liabilities The Federation’s financial liabilities comprise other payables and accruals. Financial liabilities are recognised when the Federation becomes a party to the contractual agreements governing the financial instrument. Payables are carried at cost which is the fair value of the consideration to be paid in the future for goods and services received, whether or not billed to the Federation.

Operating Leases Leases of assets in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Rentals on operating leases are charged to the income statement on a straight-line basis over the lease term. Penalty payments on early termination, if any, are recognised in the income statement when incurred.

Provisions Provisions are recognised when the Federation has a present obligation (legal or constructive) as a result of a past event, it is probable that an

12 Financial Statements


Singapore Business Federation Annual Report 2008

Notes to the Financial Statements 2d. Summary of Significant Accounting Policies (Cont’d) outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The management and council review the provisions annually and where in their opinion, the provision is inadequate or excessive, due adjustment is made.

Employee Benefits Defined Contribution Plan The Federation contributes to the Central Provident Fund (“CPF”), a defined contribution plan regulated and managed by the Government of Singapore, which applies to the majority of the employees. The Federation’s contributions to CPF are charged to the income statement in the period to which the contributions relate. Employee Leave Entitlements Employee entitlements to annual leave are recognised when they accrue to employees. Accrual is made for the unconsumed leave as a result of services rendered by employees up to the balance sheet date. Key Management Personnel Key management personnel are staff with authority and responsibility for planning, directing and controlling the activities of the entity.

Income Taxes The liability method of tax effect accounting is adopted by the Federation. Current taxation is provided at the current taxation rate based on the tax payable on the income for the financial year that is chargeable to tax. Deferred taxation is provided at the current taxation rate on all temporary differences existing at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised for all deductible temporary differences to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences can be utilised. The statutory tax rates enacted at the balance sheet date are used to determine deferred income tax.

Impairment of Non-Financial Assets The carrying amounts of the Federation’s non-financial assets subject to impairment are reviewed at each balance sheet date to determine

Financial Statements 13


Singapore Business Federation Annual Report 2008

Notes to the Financial Statements 2d. Summary of Significant Accounting Policies (Cont’d) whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated. If it is not possible to estimate the recoverable amount of the individual asset, then the recoverable amount of the cash-generating unit to which the assets belong will be identified. Any impairment loss is charged to the income and expenditure statement.

Revenue Recognition Revenue from members’ subscriptions is recognised on an accrual basis to the extent that it is probable that the fees will be received. Revenue from events and services, and business missions is recognised upon completion of services. Revenue from sale of publications is recognised when the sale is completed and the publications are delivered. Interest income is recognised on a time-apportioned basis using effective interest method.

Functional Currency Items included in the financial statements of the Federation are measured using the currency that best reflects the economic substance of the underlying events and circumstances relevant to the Federation (“the Functional Currency”). The financial statements of the Federation are presented in Singapore dollars, which is also the functional currency of the Federation.

Financial Instruments Financial instruments carried on the balance sheet include member subscriptions in-arrears and outstanding charges, other receivables, other payables and accruals and cash and cash equivalents. This particular recognition methods adopted are disclosed in the individual policy statements associated with each item. Disclosures about financial instruments to which the Federation is a party are provided in Note 14.

3. Property, Plant and Equipment

14 Financial Statements


Singapore Business Federation Annual Report 2008

Notes to the Financial Statements Furniture fittings and equipment Office equipment $ $

Computer $

Renovation $

Total $

Cost At 1 January 2007 Additions At 31 December 2007 Additions Disposal At 31 December 2008 Accumulated Depreciation At 1 January 2007 Depreciation for the year At 31 December 2007 Disposal Depreciation for the year At 31 December 2008

1,624,430 143,679 1,768,109 9,617 – 1,777,726

80,950 210 81,161 – – 81,161

1,094,169 44,921 1,139,090 29,357 (47,372) 1,121,075

– – – 85,248 – 85,248

2,799,549 188,810 2,988,360 124,223 (47,372) 3,065,210

643,660 266,723 910,382 (47,372) 174,164 1,037,174

– – – – 3,693 3,693

1,238,269 662,689 1,900,958 (47,372) 510,081 2,363,666

555,986 381,714 937,700 – 319,554 1,257,254

38,623 14,252 52,876 – 12,669 65,545

Net Book Value At 31 December 2008

520,472

15,616

83,901

81,555

701,544

At 31 December 2007

830,409

28,285

228,708

1,087,402

3. Property, Plant and Equipment (Cont’d)

Financial Statements 15


Singapore Business Federation Annual Report 2008

Notes to the Financial Statements

3.1 Reinstatement Cost Include in the carrying value of furniture, fitting and equipments is the reinstatement cost, as follows:2008 $

2007 $

Amount incurred in accumulated depreciation Amount as at 31 December

375,225 – 375,225 (247,287) 127,938

250,150 125,075 375,225 (175,129) 200,096

Expense incurred in the depreciation relating to Reinstatement cost:

72,158

108,408

2008 $

2007 $

3

Amount as at 1 January, cost Adjustment during the year

4. Subsidiary Unquoted equity shares, at cost

On 7 October 2008, the Federation incorporated a wholly owned subsidiary SBF Holdings, which was incorporated in the Republic of Singapore, with initial capital of $3. As of 31 December 2008, SBF Holdings remained dormant. The financial statements of the subsidiary have not been consolidated with the Federation’s financial statements as the Federation is of the view that they are not material to the Federation’s financial statements. The balance and transactions of the Federation are not affected by the non-consolidation.

5. Members’ Subscriptions In-arrears and Outstanding Charges

16 Financial Statements


Singapore Business Federation Annual Report 2008

Notes to the Financial Statements

Members’ subscriptions in-arrears and outstanding charges Less: Allowance for impairment

2008 $

2007 $

322,762 (204,318) 118,444

531,605 (76,522) 455,083

Members’ subscriptions are due immediately upon billing. The ageing analysis of member subscriptions in arrears and outstanding charges past due but not impaired is as follows:

Past due 1 to 30 days Past due 31 to 60 days Past due 61 to 90 days Past due over 90 days

2008 $

2007 $

160 2,327 856 115,101 118,444

259 187 588 454,049 455,083

2008 $

2007 $

76,522 127,796 – 204,318

114,345 – (37,823) 76,522

The movement of allowance for impairment is as follows:

Balance at beginning Provision during the year Amount utilised during the year

6. Other Receivables

Financial Statements 17


Singapore Business Federation Annual Report 2008

Notes to the Financial Statements

Prepayments Sundry deposits GST recoverable Tax refundable Others Monies receivable from government agency

2008 $

2007 $

152,118 285,849 213,779 264,329 221,368 117,932 1,255,375

553,021 230,833 88,381 26,530 898,765

2008 $

2007 $

779 2,776,604 6,365,036 9,142,419

426 892,319 7,943,078 8,835,823

7. Cash and Cash Equivalents Cash on hand Cash at bank Short-term bank deposits

Short-term bank deposits at the balance sheet date have an average maturity of 4.1 months (2007 - 2.5 months) from the end of the financial year with an effective interest rate of 1.1% (2007 - 2.1%) per annum. Included in the Federation’s cash and cash equivalents is an amount of $Nil (2007 - $60,551) representing monies received from a government agency to fund a project led by the Federation in partnership with three government agencies (Note 9). For the purpose of the cash flow statement, the year-end cash and bank balances comprises of the following: 2008

18 Financial Statements

2007


Singapore Business Federation Annual Report 2008

Notes to the Financial Statements 7. Cash and Cash Equivalents (Cont’d) Cash on hand Cash at bank and cash on hand Short-term bank deposits Monies held on behalf of government agency

$

$

779 2,776,604 6,365,036 – 9,142,419

426 892,319 7,943,078 (60,551) 8,775,272

2008 $

2007 $

139,037 (67,509) 71,528

209,852 (70,815) 139,037

8. Deferred Income Tax Liabilities At beginning of the year Transfer from income statement (Note 11)

The balance comprises tax on the excess of net book value over tax written down value of qualifying property, plant and equipment.

9. Other Payables and Accruals Accruals for operating expenses Sundry creditors Monies received from a government agency (Note 7)

2008 $

2007 $

1,398,870 378,204 – 1,777,074

1,065,366 327,767 60,551 1,453,684

10. Operating Expenses Operating expenses include $559,484 (2007 - $2,415,449) of expenses incurred for members activities. These comprise the following:-

Financial Statements 19


Singapore Business Federation Annual Report 2008

Notes to the Financial Statements

Direct cost of organising events such as conferences, seminars and workshops for members Direct cost of organising business missions for members

2008 $

2007 $

251,486 307,998 559,484

2,077,803 337,646 2,415,449

2008 $

2007 $

46,473 (55,439) (8,966)

349,738 (49,830) 299,908

– (12,070) (21,036)

(11,403) (20,985) 267,520

11. Income Tax Expenses Current taxation Deferred income tax (Note 8) (Overprovision) / Underprovision in respect of prior years - Current taxation - Deferred income tax (Note 8)

The tax expense on the surplus differs from the amount that would arise using Singapore standard rate of income tax due to the following:2008 $

2007 $

Surplus for the year before taxation

22,910

1,710,358

Tax at statutory rate of 18% Tax effect on non-deductible expenses Singapore statutory stepped income exemption

4,124 14,360 (27,450) (8,966)

307,865 19,493 (27,450) 299,908

12. Operating Lease Commitments The future aggregate minimum lease payments under non-cancellable operating leases contracted for at the reporting date but not recognised as liabilities are as follows: 20 Financial Statements


Singapore Business Federation Annual Report 2008

Notes to the Financial Statements

Not later than one year Later than one year but not later than five years Later than five years

2008 $

2007 $

940,855 1,381,143 –

1,057,476 2,327,998 –

The operating leases are in respect of the Federation’s office premise and office equipment on which rentals are payable. The office lease will expire on 14 June 2011, and the current rent payable on the lease is $77,127 per month.

13. Key Management Remuneration Key management personnel compensation for the financial year is as follows:-

Salaries and other short-term employee benefits Contribution to CPF

2008 $

2007 $

1,203,456 43,509 1,246,965

629,925 37,402 667,327

14. Financial Risk Management The management and council meet periodically to analyse and formulate measures to manage the Federation’s exposure to market risk, including principal changes in interest rates and currency exchange rates. Generally, the Federation employs a conservative strategy regarding its risk management. As the Federation’s exposure to market risk is kept at a minimum level, the Federation has not used any derivatives or

Financial Statements 21


Singapore Business Federation Annual Report 2008

Notes to the Financial Statements other instruments for hedging purposes.

14.1 Credit Risk Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The carrying amount of the financial assets represents the Federation’s maximum exposure to credit risk. The Federation has no significant concentration of credit risk. Cash is placed with high credit standing financial institutions.

14.2 Interest Rate Risk Interest rate risk is the risk that the fair value of the Federation’s financial instruments will fluctuate due to changes in market interest rates. The Federation is exposed to changes in interest rate for its interest-bearing deposit. The Federation does not have any interestbearing payable. Sensitivity analysis of interest rate risk An increase / (decrease) of 100 (2007 - 100) basis points in SGD interest rate with all other variables held constant, the Federation’s profit will increase / (decrease) by $6,300 (2007 - $7,900).

14.3 Liquidity Risk Liquidity or funding risk is the risk that the Federation will encounter difficulty in raising funds to meet commitments associated with financial instruments. Liquidity risk may result from an inability to sell a financial asset quickly at close to its fair value. The Federation manages its liquidity risk by ensuring sufficient funds are maintained. The financial liabilities of the Federation at balance sheet date are due not later than one year.

14.4 Currency Risk Currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates. The Federation’s activities are not exposed to significant foreign exchange risk as operations are denominated in Singapore dollars, which is the Federation’s functional currency. The risk arising from movements in foreign exchange rates is low as the company has

22 Financial Statements


Singapore Business Federation Annual Report 2008

Notes to the Financial Statements 14. Financial Risk Management (Cont’d) minimal transactions in foreign currency.

15. Management of Federation’s Funds The Federation’s objectives in managing the funds are: a. to safeguard the Federation’s ability to continue as a going concern; b. to support the Federation’s stability and growth; and c. to provide funds for the purpose of strengthening the Federation’s risk management capability. The Federation actively and regularly reviews and manages its funds to take into account the probable future fund requirements, prevailing and projected probability, projected operating cash flows, projected capital expenditures and projected strategic investment opportunities.

16. Events After Balance Sheet Date On 16 March 2009, the Federation increased its investment in SBF Holdings to $1.98 million.

Financial Statements 23


Singapore Business Federation 10 Hoe Chiang Road #22-01 Keppel Towers Singapore 089315 Tel : +65 6827 6828 Fax : +65 6827 6807 www.sbf.org.sg

SBF 2008 Financial Statements  

A razorSHARK design. 2009, June.