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Annual Report

For Financial Year 2

012

Professional
Engineers Board
Singapore

professional engineers board singapore

5 Maxwell Road 1st storey Tower Block MND Complex Singapore 069110

Contents

President and Members of the Board

Mission, Key Objectives and Functions

Registration and Licensing

Disciplinary Inquiries

Activities of the Board

Financial Statements

P
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President

Er. L
Lau Joo Ming

Members of The Board

m left to righ
ht
From
Er. C
Chan Ewe Jin
J
Er. A
A/Prof Chie
ew
Sing
g Ping

m left to righ
ht
From
Er. C
Chong Kee Sen
Er. H
Ho Siong Hin
Er. D
Dr Indrayog
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From
m left to righ
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Er. K
Koh Boon Liang
L
Er. D
Dr Lee Bee Wah

Members of The Board ( Contd)

From left to rightt


Er. Lim
m Peng Ho
ong
Er. Drr Lock Kai Sang
S

From left to rightt


Er. Neeo Tee Boo
on
Er. On
ng See Ho
Er. Taay Chye Tec
ck

From left to rightt


Er. To
ong Chi Wa
ai
Ms. C
Cheng Pai Ling
L

strar
Regis

Er. Ch
hin Jen Chy
yi

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Mission
To safeguard life, property, and welfare of the public by setting and maintaining high
standards for registering professional engineers, and by regulating and advancing
the practice of professional engineering.

Key Objectives

To maintain an internationally acceptable standard of assessment which


emphasizes quality academic education, examination, and practical
experience that ensures only competent individuals are accepted for
registration as professional engineers.

To maintain a process that ensures professional engineers demonstrate a


high standard of professional development, and conduct and ethics that meet
the expectations of clients and consumers.

To develop responsible self-governance of the profession through judicious


administration of the Act and Rules on professional conduct and ethics.

To coordinate and facilitate cross-border mobility of qualified professional


engineers.

Functions

To keep and maintain a register of professional engineers, a register of


practitioners and a register of licensees.

To hold or arrange for the holding of such examinations as the Board


considers necessary for the purpose of enabling persons to qualify for
registration under the Professional Engineers Act.

To approve or reject applications for registration under Professional Engineers


Act or to approve any such applications subject to such restrictions as it may
think fit to impose.

To establish and maintain standards of professional conduct and ethics of the


engineering profession.

To promote learning and education in connection with engineering, either


alone or in conjunction with any other professional body.

To hear and determine disputes relating to professional conduct or ethics of


professional engineers or to appoint a committee or arbitrator to hear and
determine those disputes.

To license corporations and partnerships which supply professional


engineering services in Singapore.

Generally to do all such acts, matters and things as are necessary to be


carried out under the provisions of Professional Engineers Act.

R
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Registration of Professional Engineers
In year 2012, the Board conducted 20 professional interview sessions for 98
applicants while a total of 71 candidates were registered as professional engineers
during the year.
Table 1 shows the number of new professional engineers registered in the last 5
years.
Table 1: Number of Newly Registered Professional Engineers By Year
Number of Professional Engineers Registered
Branch of Engineering
2008

2009

2010

2011

2012

Civil

10

28

24

26

31

Electrical

14

10

27

Mechanical

13

TOTAL

16

45

43

45

71

As at 31 Dec 2012, there was a total of 3491 professional engineers on the register
maintained under Section 8(1)(a) of the Professional Engineers Act. Table 2 shows
the breakdown and distribution of the number of professional engineers registered in
the 3 main branches of engineering (namely, civil, electrical and mechanical).
Table 2: Number of Professional Engineers Registered As At 31 Dec 2012
NonSingaporean

Branch of Engineering Singaporean

Total
Number

Percent

Civil & Structural

1206

539

1745

50.0%

Electrical

695

110

805

23.0%

Mechanical

703

135

838

24.0%

Others1

90

13

103

3.0%

TOTAL

2694

797

3491

100%

Others include Aeronautical, Chemical, Electronic, Environmental, Industrial, Information Technology,


Marine, Naval Architecture and Production.

Registration of Specialist Professional Engineers


In year 2012, the Board conducted a total of 5 professional interview sessions for 14
professional engineers who applied for registration in the specialised branch of
geotechnical engineering. A total of 4 professional engineers were registered in the
specialised branch of geotechnical engineering during the year.
As at 31 Dec 2012, there was a total of 96 professional engineers on the register
maintained under Section 8(1)(b) of the Professional Engineers Act. A total of 80
professional engineers were registered in the specialised branch of geotechnical
engineering while a total of 16 professional engineers were registered in the
specialised branch of amusement ride engineering.
Register of Practising Professional Engineers
As at 31 Dec 2012, there was a total of 2150 professional engineers on the Annual
Register of Practitioners maintained under Section 8(1)(c) of the Professional
Engineers Act. 1341 professional engineers did not apply for practising certificates
for 2012.
Licensing of Corporations and Partnerships
As at 31 Dec 2012, there was a total of 155 licensees on the Boards register of
licensed corporations, multi-discipline partnerships and limited liability partnerships
maintained under Section 8(1)(d) of the Professional Engineers Act. Table 3 shows
the breakdown of the licencees.
Table 3: Number of Licensees As At 31 Dec 2012
Type of Corporations/Partnerships

Number of licensees
129

Limited corporations
Unlimited corporations

Multi-discipline/Limited liability partnerships

20
155

TOTAL

D
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In 2012, Investigation Committees conducted inquiries on 3 complaint cases against
3 professional engineers, of which one was a carried-over case from 2011. Of these
inquires, one was completed and referred to a Disciplinary Committee, one was
terminated and one was on-going.
In 2012, a Disciplinary Committee completed the formal inquiry involving a
professional engineer who was suspended from practice for a period of 6 months
and ordered to pay costs. [Note: In the previous year 2011, Investigation Committees
conducted inquiries on 5 complaint cases and Disciplinary Committees completed
the formal inquiries of 2 disciplinary cases.]
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Board Meetings
The Board held a total of 11 meetings in year 2012.
Professional Engineers Registration Examinations
The Examination Committee, chaired by Board member Er. Assoc Prof Chew Sing
Ping, held 3 meetings in 2012 and oversaw the conduct of the Fundamentals of
Engineering Examination (FEE), Practice of Professional Engineering Examination
(PPE) and Geotechnical Engineering Examination. The Practice of Professional
Engineering Examination was conducted on 9 May 2012 for civil, electrical and
mechanical engineering. The Fundamentals of Engineering Examination was
conducted on 26 Sep 2012 for civil engineering and on 27 Sep 2012 for electrical
and mechanical engineering. Summaries of the results of the two examinations are
as shown in the Tables 4 and 5 below. The Geotechnical Engineering Examination
was conducted on 25 Sep 2012. 7 candidates sat for the examination, of whom 2
passed.
Tables 4: Results of PPE 2012
PPE 2012
Branch of Engineering

No of
Candidates

No of Passes

Pass Rate

Civil

189

56

29.6%

Electrical

56

20

35.7%

Mechanical

57

22

38.6%

302

98

32.5%

OVERALL
Tables 5: Results of FEE 2012

FEE 2012
Branch of Engineering

No of
Candidates

No of Passes

Pass Rate

Civil

247

159

64.4%

Electrical

100

72

72.0%

Mechanical

90

38

42.2%

437

269

61.6%

OVERALL

Dialogue with Board of Engineers Malaysia


The Board attended the annual dialogue meeting with Board of Engineers Malaysia
at the Resort World Sentosa Convention Centre from 18 - 20 Apr, 2012. The two
Boards updated and discussed with each other issues of mutual interests such as
the use of Building Information Modelling in the construction industry, developments
in the area of green buildings and sustainability, and ASEAN MRA on engineering
services.
ASEAN Mutual Recognition Arrangement On Engineering Services
The Board had been involved in the implementation of the ASEAN Mutual Recognition
Arrangement on Engineering Services. In this regard, the ASEAN Chartered Professional
Engineer (ACPE) Monitoring Committee Singapore, which had been authorised by the Board,
continued to process applications submitted by professional engineers for registration as

ACPEs. For the year 2012, 17 applications for registration as ACPEs were approved.
As at 31 Dec 2012 the total number of ACPEs on the ACPE Register is 533,
comprising of 99 from Indonesia, 160 from Malaysia, 190 from Singapore and 84
from Viet Nam.
PEB also participated in the ACPE Roundtable Discussions held on 4 Jul 2012 and
26 Sep 2012 in conjunction with ACPE Coordinating Committee Meetings. The
objective of the events was to promote the implementation of the ASEAN Mutual
Recognition Arrangement on Engineering Services among stakeholders and share
on common areas of interest such as opportunities and challenges for engineering
and construction, capability building, engineering mobility, and cooperation and
collaboration.

Day of Dedication 2012


PEB held the Day of Dedication 2012 on 23 Oct 2012 at the Jubilee Hall, Gardens by
the Bay. This was an occasion to celebrate the role and contribution of professional
engineers in the development of Singapore's buildings and infrastructures. During
the event, professional engineers also pledged and reaffirmed the profession's
dedication of service to society and commitment to high standards of professional
engineering practice.
Acting Minister for Manpower and Senior Minister of State, Ministry of National
Development, Mr Tan Chuan-Jin was the guest of honour for the event. In his
address, Mr Tan noted the significant contributions of engineers to the development
of Singapore. At the same time he highlighted that engineers had a continuing role to
play in addressing issues such as our limited land and water resources, and
challenges like energy efficiency and environmental sustainability. He said that we
needed to promote engineering as a challenging and rewarding career and we
should help students to better appreciate the relevance as well as significance of
engineering. He said that we need to continuously develop and enhance the
capabilities of our engineers. Technology had been evolving very quickly, and PEs
must keep up-to-date and acquire new knowledge, skills and expertise. Just as
importantly, he said that we should give proper recognition for the contributions that
our engineers had made, and who were role models that our young could look up to.

In his address, President PEB, Er. Lau Joo Ming mentioned that engineers played
an important role. They were behind many of Singapores highly developed
infrastructures which had elevated the standard of living, generated new business
and capabilities and improved the lives of people. He urged professional engineers to
reach for high standards and continue to dedicate our service to the development of
nation and society and act with prime regard to public interests, health and safety,
and strive for the use of natural resources efficiently and economically; and ensure
that our engineering works impact our environment minimally.
PEB Scholarships and Gold Medals
In 2012, the Board awarded scholarships of $3,000 each to 12 engineering
undergraduates from Nanyang Technological University (NTU) and 11 engineering
undergraduates from National University of Singapore (NUS). The Board also
awarded Gold Medals to NUS and NTU graduands in civil, electrical and mechanical
engineering, comprising 6 Gold Medals to B.Eng. graduands (NTU - 3 and NUS 3)
and 6 Gold Medals to MSc graduands (NTU - 3 and NUS 3).
Annual Appreciation Dinner
An appreciation dinner was held on 22 Nov 2012 at the Peach Garden Restaurant at
Hotel Miramar Singapore to thank professional engineers who had rendered
voluntary service to the Board. About 100 professional engineers who were members
of the various committees of the Board (Investigation Committees, Examination
Committee, CPD Committee, Working Committees etc), members of Task Forces
and the Professional Interview Panels attended the dinner.

PROFESSIONAL ENGINEERS BOARD,


SINGAPORE
FINANCIAL STATEMENTS
for the year ended
31 December 2012

CS Tan & Co is a partnership registered in Singapore and an


independent member firm of the International Accounting and
Audit Network, a French entity.

PROFESSIONAL ENGINEERS BOARD, SINGAPORE

Statement by the Board

In the opinion of the Board, the accompanying financial statements together with the notes

thereon are drawn up in accordance with the Singapore Financial Reporting Standards so as to
present fairly, in all material respects, the state of affairs of the Professional Engineers Board,
Singapore as at 31 December 2012 and of its income and expenditure, comprehensive income,
changes in funds and cash flows for the financial year then ended on that date.

Signed on behalf of the Board

Chin Jen Chyi

Singapore

Registrar

Independent Auditors Report to the Members of


Professional Engineers Board, Singapore
Report on the Financial Statements
We have audited the accompanying financial statements of Professional Engineers Board,
Singapore which comprise the statement of financial position at 31 December 2012, income
statement, statement of comprehensive income, statement of changes in funds and statement of
cash flows for the financial year then ended and a summary of significant accounting policies and
other explanatory information.
Board Managements Responsibility for the Financial Statements
The Boards management is responsible for the preparation of financial statements that give a true
and fair view in accordance with the provisions of the Professional Engineers Act (the Act) and
Singapore Financial Reporting Standards, and for 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, that transactions are properly authorised and
that they are recorded as necessary to permit the preparation of true and fair income statements
and statements of financial position and to maintain accountability of assets.
Auditors 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 about 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 auditors
judgement, 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 controls relevant to the entitys preparation of financial statements that give a true and fair
view 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 entitys internal controls. 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.

CS Tan & Co is a partnership registered in Singapore and an independent member firm of the International Accounting and Audit
Network, a French entity.

CSTAN

Co.

Opinion
In our opinion, the financial statements are properly drawn up in accordance with the provisions
of Singapore Financial Reporting Standards so as to give a true and fair view of the state of affairs
of the Board at 31 December 2012, and the results, comprehensive income, changes in funds and
cash flows for the financial year ended on that date.
Report on Other Legal and Regulatory Requirements

In our opinion, the accounting and other records required by the Act to be kept by the Board have
been properly kept in accordance with the provisions of the Act.

CSTAN&CO
Public Accountants and
Certified Public Accountants
Singapore

10

CS Tan & Co is a partnership registered in Singapore and an independent member firm of the Intemational Accounting and Audit
Network, a French entity.

PROFESSIONAL ENGINEERS BOARD, SINGAPORE

Statement of Financial Position at 31 December 2012

Note

2012
$

2011
$

3
4

10,045
1,030,000

10,802
1,030,000

1,040,045

1,040,802

33,688
2,300,000
1,498,928

86,330
3,400,000
309,897

3,832,616

3,796,227

4,872,661

4,837,029

4,471,252

4,447,287

401,409

389,742

4,872,661

4,837,029

Assets
Non current assets
Property, plant and equipment
Investments

Current assets
Receivables
Fixed deposits with financial institutions
Bank balances

5
6
7

Total assets

Funds and liabilities


Funds
Accumulated general fund
Current liabilities
Payables

Total funds and liabilities

The annexed notes to the financial statements form an integral part of and should be read in conjunction with these
financial statements.

PROFESSIONAL ENGINEERS BOARD, SINGAPORE

Income Statement
for the financial year ended 31 December 2012

Note

Income
Renewal fees
Registration fees
Company licensing fees
Examination fees
Fundamentals of Engineering Examination fees
Interest income
Other income

Expenditure
Staff expenses
Depreciation
Honorarium to Board Members
Operating leases
International liaison, accreditation and overseas visits
Examination expenses
Annual and appreciation dinner
Scholarships
Computer services and software
Audit fee
Certificate presentation ceremony
Other expenses

Surplus for year

10

2012
$

2011
$

326,800
29,450
46,950
145,650
174,350
72,235
28,175

333,700
26,400
44,510
131,775
161,750
62,391
20,767

823,610

781,293

226,291
2,201
38,250
91,177
46,679
128,615
11,415
69,000
85,852
4,400
38,435
52,421

207,693
1,720
30,600
85,267
29,938
112,869
10,938
69,000
83,726
4,400
22,182
71,956

794,736

730,289

28,874

51,004

The annexed notes to the financial statements form an integral part of and should be read in conjunction with these
financial statements.

PROFESSIONAL ENGINEERS BOARD, SINGAPORE

Statement of Comprehensive Income


for the financial year ended 31 December 2012

Surplus and total comprehensive income

2012
$

2011
$

28,874

51,004

The annexed notes to the financial statements form an integral part of and should be read in conjunction with these
financial statements.

PROFESSIONAL ENGINEERS BOARD, SINGAPORE

Statement of Changes in Funds


for the financial year ended 31 December 2012

Accumulated
General Fund
$
At 1.1.2011

4,404,953

Total comprehensive income for the year

51,004

Transactions with Government of Singapore


Contribution to Singapore Government Consolidated Fund (Note 12)
At 31.12.2011

(8,670)
4,447,287

Total comprehensive income for the year

28,874

Transactions with Government of Singapore


Contribution to Singapore Government Consolidated Fund (note 12)
At 31.12.2012

(4,909)
4,471,252

The annexed notes to the financial statements form an integral part of and should be read in conjunction with these
financial statements.

PROFESSIONAL ENGINEERS BOARD, SINGAPORE

Statement of Cash Flows


for the financial year ended 31 December 2012

2012
$
Operating activities
Surplus for year
Adjustments for:
Depreciation
Interest income
Operating surplus before working capital changes
Receivables
Payables
Cash flows from operating activities

2011
$

28,874

51,004

2,201
(72,235)

1,720
(62,391)

(41,160)
1,152,642
15,428

(9,667)
5,017
(51,501)

1,126,910

(56,151)

Investing activities
Acquisitions of property, plant and equipment
Interest income received
Acquisitions of investments

(1,444)
72,235
-

Cash flows from investing activities

70,791

Financing activities
Contribution to Consolidated Fund

(8,670)

(1,823)

Cash flows from financing activities

(8,670)

(1,823)

Net change in cash and cash equivalents


Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

1,189,031
309,897
1,498,928

(855)
62,391
(1,030,000)
(968,464)

(1,026,438)
1,336,335
309,897

The annexed notes to the financial statements form an integral part of and should be read in conjunction with these
financial statements.

PROFESSIONAL ENGINEERS BOARD, SINGAPORE

Notes to the Financial Statements 31 December 2012

These notes form an integral part of and should be read in conjunction with the accompanying
financial statements.

General
The Professional Engineers Board was established in 1970 under the Professional Engineers
Act, Chapter 253. The Board is domiciled in Singapore with its registered office and
principal place of operation at 5 Maxwell Road, 1st storey Tower Block, MND Complex,
Singapore 069110.
The principal activities of the Board are those of administering the Boards membership,
Register of Professional Engineers and licensing of professional engineering corporations.
There have been no significant changes in such activities during the financial year.
The financial statements were authorised for issue by the Board on the date shown on the
Statement by the Board.

Significant accounting policies


(a) Statement of compliance
These financial statements have been prepared in accordance with the Singapore
Financial Reporting Standards (FRS).
The preparation of financial statements in accordance with FRS requires the use of
estimates, assumptions and judgements that affect the reported amounts of assets and
liabilities, and disclosures of contingent assets and liabilities (if any) at the date of the
financial statements and the reported amounts of income and expenses during the
financial period. These estimates, assumptions and judgements are continually
evaluated and are based on historical experience and other factors, including
expectations of future events that are believed to be reasonable under the circumstances.
Where appropriate, the estimates, assumptions and judgements that have a significant
risk of causing a material adjustment to the carrying amounts of assets and liabilities
within the next financial period are discussed in the following significant accounting
policies. Although these are based on the entitys best knowledge of current events and
actions, actual results may ultimately differ from these estimates, assumptions and
judgements.

On 1 January 2012, the following relevant new and revised FRS and Interpretations to
FRS (INT FRS) that are applicable in the current financial year were adopted:Revised FRS
FRS 12

Amendments to FRS 12 - Deferred Tax: Recovery of Underlying Assets

The adoption of the above FRS and INT FRS did not result in significant changes to
significant accounting policies and had no effect on the financial statements.
At the date of authorisation of the financial statements, the following are new and
revised FRS and INT FRS that have been issued (but yet to be effective) that are
relevant to the entity. These have not been applied to the financial statements and are
not anticipated to have any significant impact on the results of the entity.
Revised FRS Issued But Yet to be Effective
FRS 1

Amendments to FRS 1 Presentation of Items of Other Comprehensive


Income

FRS 19

Employee Benefits

FRS 32

Offsetting of Financial Assets and Financial Liabilities

FRS 107

Offsetting of Financial Assets and Financial Liabilities

FRS 113

Fair Value Measurements

(b) Basis of accounting


The financial statements (expressed in Singapore dollars) are prepared in accordance
with the historical cost convention except as disclosed in the following accounting
policies. The Singapore dollar is the entitys functional and presentation currency.
Functional currency is the currency of the primary economic environment in which the
entity operates.
(c) Financial assets and liabilities (recognition and derecognition)
Financial assets and financial liabilities are recognised in the statement of financial
position when the entity becomes a party to the contractual provisions of the
instrument. Regular purchases and sales of financial assets are recognised on trade date
(date on which the entity commits to purchase or sell the asset). Financial assets are
derecognised when the rights to receive cash flows from the financial assets have
expired or have been transferred to the entity.

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(d) Property, plant and equipment


Property, plant and equipment are stated at cost less accumulated depreciation and
impairment losses. Except for freehold land which is not depreciated, depreciation is
calculated on the straight-line method (commencing from the dates these property, plant
and equipment are first placed into productive use) so as to write off the cost of all
property, plant and equipment over their estimated useful lives as follows:
Number of Years
Office furniture
Office equipment
Computers

10
3 to 10
1

Residual value, useful lives and depreciation method of property, plant and equipment
are reviewed at each statement of financial position date. The effects of any revision of
the residual values and useful lives are included in the income statement in the financial
period in which the changes arise. Fully depreciated assets are retained in the financial
statements until they are no longer in use. Any gain or loss on disposal of property,
plant and equipment is taken to the income statement.
The entity estimates the dates these property, plant and equipment are first placed into
productive use and the period of their useful lives (period over which future economic
benefits are intended to derive from these property, plant and equipment).
(e) Investments
Investments (other than investments in subsidiaries, associates and joint ventures) are
classified as available-for-sale. Quoted and unquoted investments are stated at fair
value and cost less impairment losses respectively.
All purchases and sales of investments are recognised on trade date. Investments are
initially measured at cost, which is the fair value of the consideration given for them
(inclusive of transaction costs). Subsequent to initial recognition, quoted investments
are carried at fair value.
The fair values of quoted investments are estimated by reference to the current market
price. Unquoted investments are measured at cost after ascertaining that it is not
practicable to determine the fair values because of the lack of quoted market prices and
the assumptions used on valuation models to value these investments cannot be
reasonably determined and variability in the range of reasonable fair value estimates
derived from valuation techniques is significant.

11

An impairment loss is recognised in income statement when there is objective evidence


that the asset is impaired, and is measured as the difference between the investments
carrying amount and current market price (quoted investments) and the present value of
estimated future cash flows discounted at the effective interest rate computed at initial
recognition (unquoted investments). Impairment losses on quoted investments are
reversed in subsequent periods when an increase in the investments recoverable
amount can be related objectively to an event occurring after the impairment was
recognised, subject to the restriction that the carrying amount of the investment at the
date the impairment is reversed shall not exceed what the amortised cost would have
been had the impairment not been recognised. Factors considered in assessing whether
investments are impaired include (but are not limited to) the duration and quantum of
impairment, the financial health of and the near term business outlook of the investee
including factors such as industry and sector performance, changes in technology and
operational and financing cash flow. These assessments require exercise of significant
judgment.
Gains and losses on measurement to fair value of investments are recognised in the fair
value reserve and reversed to the income statement upon disposal of the investments.
Impairment losses are charged to the income statement. Subsequent reversals of
impairment losses on quoted equity investments and quoted debt investments are
recognised in the fair value reserve and income statement respectively. Impairment
losses on unquoted investments stated at cost are not reversed. Exchange differences on
these investments are reported as part of the fair value gain or loss.
(f)

Impairment of assets (excluding goodwill)


At each statement of financial position date, the entity reviews the carrying amounts of
its tangible and intangible assets to determine whether there is any indication that those
assets have suffered an impairment loss. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine the extent of the impairment loss
(if any). Where it is not possible to estimate the recoverable amount of an individual
asset, the entity estimates the recoverable amount of the cash-generating unit to which
the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In
assessing value in use, the estimated future cash flows are discounted to their present
value using a pre-tax discount rate that reflects current market assessments of the time
value of money and the risks specific to the asset. Assessing value in use requires an
estimation of future cash flows expected to arise from the cash-generating unit(s) and a
suitable discount rate in order to calculate present value. Significant judgement is
exercised in the estimation of expected future cash flows and in the selection of a
suitable discount rate.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less
than its carrying amount, the carrying amount of the asset (cash-generating unit) is
reduced to its recoverable amount. An impairment loss is recognised immediately in the
income statement, unless the relevant asset is carried at a revalued amount, in which
case the impairment loss is treated as a revaluation decrease.

12

Where an impairment loss subsequently reverses, the carrying amount of the asset
(cash-generating unit) is increased to the revised estimate of its recoverable amount, but
so that the increased carrying amount does not exceed the carrying amount that would
have been determined had no impairment loss been recognised for the asset (cashgenerating unit) in prior years. A reversal of an impairment loss is recognised
immediately in the income statement, unless the relevant asset is carried at a revalued
amount, in which case the reversal of the impairment loss is treated as a revaluation
increase.
(g) Receivables
Receivables are recognised initially at fair value (inclusive of transaction costs) and
subsequently measured at amortised cost using the effective interest method less
allowance for impairment. An allowance for impairment is established when there is
objective evidence that not all amounts due will be collectible according to the original
terms of the receivable. The allowance amount is the difference between the carrying
amount and the present value of estimated future cash flows discounted at the original
effective interest rate. Allowance for impairment is charged to the income statement.
Receivables that are factored out (to banks and other financial institutions) with
recourse to the entity are not derecognised until the recourse period has expired and the
risks and rewards of the receivables have been fully transferred. The corresponding
cash received from the financial institutions is recorded as borrowings.
In assessing for impairment (allowance for bad and doubtful receivables), the entity
exercises its judgement in estimating collectibility based on ageing analysis of accounts
(where available), current credit worthiness and past collection history of these debtors.
If the financial positions of these debtors were to deteriorate and result in impairment in
these debtors ability to make payments, additional allowances may be required.
(h) Payables and interest bearing loans
Payables are initially measured at fair value and subsequently measured at amortised
cost using the effective interest method.
Interest bearing loans are recognised initially at fair value net of transaction costs
incurred. Borrowings are subsequently stated at amortised cost. Any difference between
the proceeds (net of transaction costs) and the redemption value is taken to the income
statement over the period of the borrowings using the effective interest method.
(i)

Provisions
Provisions are recognised when the entity has present legal or constructive obligations
as a result of past events and it is probable that the entity will be required to settle that
obligation. Provisions are measured at the present value of the expenditure expected to
be required to settle the obligation using a pre-tax discount rate that reflects the current
market assessment of the time value of money and the risks specific to the obligation.
Any increase in provision due to passage of time is recognised in income statement as
finance expense. Changes in the estimated timing or amount of the expenditure or
discount rate are recognised in the income statement in the period the changes in
estimates arise.

13

The entity exercises judgement in estimating the amount of future expenditure and
discount rate that reflects the time value of money. If actual expenditure and actual time
value of money exceeds these estimates, present value of current obligations may
exceed provision amounts at statement of financial position date.
(j)

Determination of fair value


The fair values of quoted financial assets and financial liabilities are based on current
market bid prices and asking prices respectively. If the market for a financial
asset/liability is not active, fair value is established by using valuation techniques.
These include the use of recent arms length transactions, reference to other instruments
that are substantially the same, discounted cash flow analysis, and option pricing
models refined to reflect the issuers specific circumstances.
Fair values of financial assets and financial liabilities (excluding finance leases)
approximate their carrying amounts either due to their short term nature or that they are
floating rate instruments that are repriced to market interest rates on or near the
statement of financial position date. Fair values of interest bearing finance leases are
estimated by discounting future contractual cash flows at current market interest rate for
similar financial instruments. Fair values of foreign currency forward contracts are
determined using actively quoted forward exchange rates. Fair values of interest rate
swaps are estimated as the present value of the estimated future cash flows discounted
at actively quoted interest rates.
Financial instruments (in statement of financial position) remeasured to fair value are
classified using a fair value hierarchy that reflects the significance of the inputs used in
making the fair value measurements. The fair value hierarchy is classified into the
following levels:
(i)

Level 1 - quoted prices (unadjusted) in active markets for identical assets or


liabilities;

(ii)

Level 2 - inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly (is as prices) or indirectly (ie
derived from prices); and

(iii) Level 3 - inputs for the asset or liability that are not based on observable market
data (unobservable inputs).
(k) Employee entitlements to annual leave
Employee entitlements to annual leave are recognised when they accrue to employees.
An allowance is made for the estimated liability for annual leave as a result of services
rendered by employees up to the statement of financial position date.

14

(l)

Revenue recognition
Revenue comprises the fair value of consideration received (or receivable) for sale of
goods and rendering of services. Revenue is recognised when the amount of revenue
(and its corresponding expenses) can be measured reliably and when collectibility of
the related receivables is reasonably assured. Revenue is recognised net of applicable
rebates and discounts in accordance with the following policies:
(i)

Registration fee income is recognised as income only when the applicant is


registered as a member with the entity.

(ii)

Renewal and licensing fee income is recognised in the period in which the
services are rendered.

(iii) Examination and other fee income is recognised in the period in which the
services are rendered.
(iv)

Interest income from fixed deposits, bank balances and bonds are recognised on
accrual basis.

(m) Key management staff


Key management staff are those persons having the authority and responsibility for
planning, directing and controlling activities of the entity. The board members are
considered key management staff of the entity.
(n)

Defined contribution plan


Contributions to the Central Provident Fund are recognised as an expense when
incurred.

(o)

Operating leases (lessee)


Leases where the lessor effectively retains substantially all the risks and benefits of
ownership of the leased assets are classified as operating leases. Operating leases are
recognised as an expense in the income statement on a straight line basis over the lease
term. Contingent rents are recognised as an expense in the income statement in the
period in which they are incurred. When an operating lease is terminated before the
expiry of the lease period, any payment required to be made to the lessor by way of
penalty is recognised as an expense in the period in which the termination occurs.

(p)

Foreign currencies
Transactions in foreign currencies are measured and recorded in Singapore dollars
using the prevailing exchange rates at the date of transaction. At each statement of
financial position date, monetary balances denominated in foreign currencies are
translated at prevailing exchange rates at the statement of financial position date. All
exchange differences are taken to the income statement.

15

(q)

Cash and cash equivalents


Cash consists of cash on hand and cash with banks or financial institutions, including
fixed deposits. Cash equivalents are short-term, highly liquid investments that are
readily convertible to known amounts of cash and that are subject to insignificant risk
of changes in value.

(r)

Related parties
Parties are considered to be related if the entity has the ability, directly or indirectly, to
control the party or exercise significant influence over the party in making financial and
operating decisions or vice versa or the entity and the related party are subject to
common control or common significant influence. Related parties may be individuals or
corporations.

(s)

Contributions to Consolidated Fund


The Statutory Corporations (Contributions to Consolidated Fund) Act, Chapter 319A
and Ministry of Finance mandates all Statutory Corporations contribute a percentage of
its annual surplus income to the Singapore Government Consolidated Fund. Such
contributions are accrued for in the year in which the corresponding surplus income
arises.

Property, plant and equipment


Office
Furniture
$

Office
Equipment
$

Computers
$

Total
$

Cost
At 1.1.2011
Additions
Disposals
At 31.12.2011
Additions
Disposals
At 31.12.2012

3,688
3,688
3,688

14,609
855
15,464
1,444
16,908

88,810
(43,127)
45,683
45,683

107,107
855
(43,127)
64,835
1,444
66,279

Accumulated depreciation
At 1.1.2011
Charge to income statement
Disposals
At 31.12.2011
Charge to income statement
Disposals
At 31.12.2012

1,313
369
1,682
369
2,051

5,318
1,351
6,669
1,832
8,501

88,809
(43,127)
45,682
45,682

95,440
1,720
(43,127)
54,033
2,201
56,234

Carrying amount
At 31.12.2011
At 31.12.2012

2,006
1,637

8,795
8,407

1
1

10,802
10,045

16

Investments
2012
$

2011
$

1,030,000

1,030,000

Available-for-sale investments
Unquoted debt securities at cost

Debt securities bear fixed rate interest at 3.1% (2011: 3.1%) per annum and mature in year
2021.

Receivables
2012
$
Interest income receivable
Other receivable*

26,819
6,869
33,688

2011
$
65,355
20,975
86,330

* This amount is unsecured, interest free and is repayable on demand. The fair value of this
amount approximates its carrying amount due to its short term nature.

Fixed deposits with financial institutions

Maturing within:
- 4 to 12 months from year end

2012
$

2011
$

2,300,000
2,300,000

3,400,000
3,400,000

The fixed deposits bear fixed rate interest at 1.2% (2011: 1.1%) per annum and mature on
varying dates within 12 (2011: 12) months from year end.

Bank balances
Bank balances bear floating rate interest at 0.1% (2011: 0.1%) per annum.

17

Payables

Accrued operating expenses


Accrued contribution to Consolidated Fund
Registration fees received in advance
Renewal fees received in advance
Company licensing fees received in advance
Examination fees received in advance
Other advance payments received

23,850
4,909
12,500
313,900
27,250
12,150
6,850
401,409

23,872
8,670
11,350
307,850
12,100
12,600
13,300
389,742

2012
$

2011
$

40,174
661
31,400
72,235

41,630
804
19,957
62,391

Staff expenses

Salaries and bonuses


Central Provident Fund contributions in respect of staff
salaries and bonuses

11

2011
$

Interest income

Interest income from:


- fixed deposits
- bank balances
- debt securities

10

2012
$

2012
$

2011
$

195,653
30,638

180,829
26,864

226,291

207,693

Taxation
The Board is exempted from income tax under section 13(1)(e) of the Income Tax Act,
Chapter 134.

18

12

Contribution to Singapore Government Consolidated Fund


The Statutory Corporations (Contributions to Consolidated Fund) Act, Chapter 319A
requires that the Board contribute part of its annual excess of income over expenditure to a
Consolidated Fund (Fund). This Fund belongs to Singapore and is administered by the
Government in accordance with the Constitution of The Republic of Singapore.
2012
$
Contribution to Consolidated Fund at 17% (2011: 17%)
of net surplus income for the financial year

13

4,909

2011
$
8,670

Operating lease commitments


At the year end, the Board was committed to making the following payments in respect of
non-cancellable operating leases with a term of more than one year:
Leases which expire:

Within 1 year
Within 2 to 5 years

2012
$

2011
$

91,000
53,000

91,000
144,000

The operating leases do not have any renewal terms and are not subject to escalation clauses.

14

Financial risk management


The Boards activities expose it to a variety of financial risks. The Boards risk management
objectives seek to minimise the potential adverse effects of these risks on its financial
activities. The Boards risk management objectives, policies and processes remain
unchanged from previous year and are outlined below.
Funds management
The Board defines funds by deducting total liabilities from total assets. The Boards
objectives when managing funds are to achieve and maintain optimal fund structure in the
furtherance of its objectives. To achieve this, the Board mainly receives fees from its
members to fund its activities. The Board is not subject to any externally imposed fund
requirements.
Interest rate risk
Interest rate risk is the risk that changes in interest rates will affect the Boards income.
The Board is exposed to interest rate risk through its debt securities investments, fixed
deposits and bank balances. The Board does not have risk management objectives, policies
and procedures with regard to interest rate risk.
19

A 1% increase in interest rate at the statement of financial position date would


increase/(decrease) funds and income or expenditure by the following amounts (assuming all
other variables remain constant):

Funds
Income or expenditure

2012
$

2011
$

44,000
44,000

44,000
44,000

A 1% decrease in interest rate would have the equal but opposite effect on the amounts
shown above (assuming all other variables remain constant).
Foreign currency risk
Foreign currency risk is the risk that foreign currency exchange rates will affect the Boards
income.
The Board is not exposed to any significant foreign currency risk and has no risk
management objectives, policies and procedures with regard to this risk.
Credit risk
Credit risk is the potential risk of financial loss resulting from failure of debtors or other
parties to settle their financial and contractual obligations to the Board as and when they fall
due.
The maximum exposure to credit risk is the carrying amount of certain financial assets which
are mainly receivables, deposits and cash amounts. The Board does not hold any collateral or
credit enhancements in respect of these receivables.
The Boards objective with regard to credit risk is the preservation of cash amounts placed
with financial institutions. Credit risk arising from cash is minimised by placing cash
amounts (including fixed deposits) with reputable financial institutions with high credit
ratings assigned by international credit rating agencies. Except as disclosed above, there are
no receivables or cash amounts that are past due or impaired. Payables are generally due
within 30 days.
Market price risk
Market price risk is the risk that changes in market values of investments will affect the
value of the Boards holdings of financial instruments or income.
The Board is not exposed to any significant market price risk and has no risk management
objectives, policies and procedures with regard to this risk.
Liquidity risk
Liquidity risk is the risk that the Board will not be able to meet its financial obligations as
they fall due.

20

The Boards objective with regard to liquidity risk is to maintain sufficient cash (and
equivalents) to fund its operations. The Board ensures it has adequate internally generated
cash to finance capital expenditure and working capital.
Fair values
Financial assets comprise investments, receivables, deposits and cash amounts. Unquoted
investments are measured based on Level 3 FRS 107 measurement hierarchy. Receivables,
deposits and cash amounts are categorised as loans and receivables which are financial assets
with fixed payments that are not quoted in an active market.
Financial liabilities comprise payables and deposits received. Financial liabilities are
measured at amortised cost.
The Boards financial assets and financial liabilities approximate to or are the same as their
fair values except for unquoted investments. Unquoted investments are measured at cost
after ascertaining that it is not practicable to determine the fair values because of (i) the lack
of quoted market prices; (ii) the assumptions used on valuation models to value these
investments cannot be reasonably determined; and (iii) variability in the range of reasonable
fair value estimates derived from valuation techniques is significant. These unquoted
investments represent debt securities issued by a public sector institution in Singapore that is
not quoted on any market. The Board does not intend to dispose of these investments in the
foreseeable future.
Movement of unquoted investments during the year:
2012
$
At beginning of year
Acquisitions during the year
At end of year

2011
$
-

21

1,030,000
1,030,000