This December we showcase some of the entrepreneurs in this special feature edition. From across diverse industries, our Promising SME 500 Business Luminaries embody in the spirit of excellence,innovation and integrity as they pursue ever greater heights in their business and organizations.

NOMINATIONS FOR 2013 ARE OPEN!
Nominations for the 2012 campaign have closed. However for those interested in nominating companies for the 2013 campaign you may do so via our website at
www.promisingsme500.com.sg

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I have never thought that my hobby of writing feedbacks to our Government agencies would bag me an award. Solving problems and thinking out of the box have been the two activities I love most, and this year, this has led me to winning a PEP-SBF Award. My winning suggestion is on Government Paid Maternity Leave, which was motivated by feedback from my clients.

For the dialogue session, I was invited to voice out the SMEs concerns, and I had the pleasure to share the stage with SBF CEO Mr. Ho Meng Kit, MPA Chief Executive, Mr. Lam Yi Young, St James Power Station Ltd CEO Mr. Dennis Foo, ACRA Deputy Chief Executive Ms. Toh Wee San, and CordLife Limited Group CEO Dr. Steven Fang. During the session, I shared something dear to my heart. I shared with the guests about how SMEs are champion in griping over national policies in coffee shops, and about how the better way is to come together and to put our mind to give constructive feedbacks to the Government.

As sincere as the Government is to support the growth of Singapore businesses, we cannot expect them to look after everything. Thus, I would like to encourage companies, big and small to highlight our views so that the relevant Government agencies can take it up and give our views due consideration.
Last but not least, I thank you for sharing this joy with me.

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This is the most common question that business owners and entrepreneurs face in today’s competitive market. There are many varieties of business valuation approaches and methods that can be used to determine the fair market value of your business.

The most recognised and accepted ones are as listed below:

• Asset Accumulation- This method is based on the premise that it is generally possible to liquidate the property, plant and equipment (PP&E) assets of a company and after paying off the company’s liabilities the net proceeds would accrue to the equity of the company.

• Discounted cash flow method – This business valuation method based is considered a strong tool because it concentrates on cash generation potential of a business. This method uses the future free cash projections of a company and discounts them (most often using weighted average cost of capital) to arrive at a present value

• Price Earnings Multiple Valuation – The price-earnings ratio (P/E) is simply the price of a company’s share of common stock in the public market divided by its earnings per share. By multiplying this P/E multiple by the net income, the value for the business could be determined. This can be used as a benchmark for non-listed companies wishing to use this method in a common business sector.

“Why should you spend to have someone come in and punch the numbers you see every day?”

Thinking about business valuation this way is to commit two blunders. One, the full range of services that a business evaluator can offer is not entirely appreciated. Two, the full extent of the power of such a business valuation is not understood.

Business valuations do not only keep you aware as to how much you spend, but also how much you could earn.

If you have plans for expansion, it’s important to get a business valuation. You need to know not only what you’re financially capable of in the long run, but also what kind of expansion will be optimum to prolong the increasing worth of your business.

If you have not obtained or considered obtaining a current business valuation, you may want to act now! You may need expert assistance to determine the actual worth of your business which will give you an upper hand during your discussions either with investors, buyers or any other party interested to know the value of your business

The Benefits of Management Accounts that You Can’t Afford to Miss

Up-to-date information on business performance

Regular preparation of management accounts allows you early and timely focus on key areas of sales, gross margins and costs and enables you to locate existing loopholes that may threaten your business survival before it is too late to take corrective actions.

Having timely information to make key decisions

There is no doubt that some decisions need to be made fast in a timely manner. The issue could be cash related, profit margin related, payroll related and so on. No matter which area it is, having a regularly prepared management accounts will give you an edge as it allows you to make timely decisions.

Information required by banks or creditors

Banks and the other creditors require both year-end financial statements and management accounts of your business to monitor your business performance and to decide on your ability to pay them back. Having proper management accounts improves your credibility and increases your chance to access more of their facilities.

More accurate planning and forecasting

Modern businesses are rapidly switching to short-term budgets, or also called rolling budgets. Even a typical one-year budget can be obsolete even before the ink dries. You need to have latest performance report ready at hands in today’s modern highly competitive business environment. Reliable planning and forecasting for your short-term budgets can only be achieved if you have proper management accounts.

The role of a Corporate Secretary is not a clerical or secretarial one in the usual sense. The corporate secretary ensures that an organisation complies with relevant legislation and regulation, and keeps board members informed of their legal responsibilities. Corporate secretaries are the company’s named representative on legal documents, and it is their responsibility to ensure that the company and its directors operate within the law. It is also the corporate secretaries’ responsibility to register and communicate with shareholders, to ensure that dividends are paid and to maintain company records, such as lists of directors and shareholders, and annual accounts.

Duties and responsibilities of a Corporate Secretary:-

• Establish & maintain company registers
• Organise & attend directors’ & shareholders’ meetings
• Lodge & file documents with ACRA
• Arrange for share allotment and share transfer, etc
• Provide administrative assistance in the preparation & presentation of Annual Return
• Advise directors, other officers and members on compliance issues
• Responsible for custody & use of common seal, custody of legal documents, etc
• Comply with instructions of the directors and communicate the instructions to relevant officers
• A company secretary shall be appointed by directors by  way of a directors’ resolution
• The appointed secretary must signify his consent
• At least 1 (one) secretary must be present at the registered office

One key audit procedure is the study and review of your company’s internal processes. Based on this review, your auditor can assess the probability of fraud and error occurrence.

Another audit procedure is the analysis of the present and past financial statements. Such audit analysis helps in providing a comprehensive understanding of your Company’s performance improvements and whether the Company have enough cash for sustenance and growth.

Auditors from professional audit firms use various analytical tools like Trend Analysis and Ratio Analysis to understand the performance and status of the company. Using these tools, auditors derive information such as the year to year increase in turnover and profits, of the level of working capital available, collectability of receivables, over or under leveraging, etc.

Your auditor would be able to highlight idle resources and advise you on how to maximise your return on assets. Partnering with and discussing these matters with your auditor can provide an insight into your business from a third party’s standpoint. This will help you to look at your Company from a different perspective and focus your limited time on solutions to issues not realised before. Your auditor can also highlight potential problems before they actually happen; such information can help your company avoid business pitfalls.

Therefore engaging an auditor from a professional audit firm will better assist you on such matters.

Business valuation is the process of determining the current worth of a business, using objective measures, and evaluating all aspects of the business which will be best carried out by professional corporate finance team.  Their valuation will be much more credible to a potential buyer than yours.  A business valuation might include an analysis of the company’s management, its capital structure, and its future earnings prospects, as well as the market value of its assets.

When do you need a business valuation?

• Are you looking to acquire a business or to merge with other business?
• Are you looking to sell your business either wholly or partly?
• Are you trying to raise capital for your business?
• Are you in the need to determine the real market value of your business to support you on any litigation or arbitration matters?
• Do you want to value your intangible assets like Goodwill or intellectual property like trademarks, brands?
• Are you looking to sell your shares at a fair market value and exit from your business?
• Are you looking to buy over shares of your partners at a fair market value?
• You want to determine an approximate value of assets / each owner’s interest in the event the business is liquidated or sold?

If your answer is yes to any of the questions above, you need business valuation!

Engage professional assistance from our corporate finance team and let us determine the paramount worth of your business.

1. Being a company director is about providing leadership, formulating strategy, establishing policies and values, monitoring performance and being accountable at the level of the company as a whole. You will find yourself involved in activities such as visioning, delegating to management and ensuring appropriate capabilities and controls are in place.

2. Getting yourself into trainings in certain areas may be necessary. You will acquire additional skill, knowledge and qualification, and this may increase your motivation and commitment to the company. You will also be more confident in carrying out your duties as a director, and thereby experience greater satisfaction from your role.

3. To be an effective director, you must command the respect of your colleagues. Being an effective team player helps. Development activities should focus upon honing and demonstrating strategic awareness and perception, thinking, decision making, communication and interpersonal skills. To fulfill these, you will also require “soft” skills training on areas such as effective communication, conflict resolution and team leadership.

4. Directorial ambitions should be made explicit in performance reviews and development plans. As a director, you require an understanding of the business environment and the specific company’s situation.

5. Multi-functional and business development experience, running a department as a profit centre and demonstrating contribution to the bottom line will improve your directorial prospects.

6. Specific directorial requirements will depend upon the corporate context and the company’s ambitions. The nature, structure, composition and operation of a board should reflect the challenges faced by a company and the opportunities available to it.

If you are thinking of Singapore company incorporation, it will be a good idea to get assistance from any Corporate Secretarial Services where you will be provided with proper documentations for incorporation and also be professionally advised of details and duties of being a director of the company.

An accounting record maintenance system in your business could be either manually maintained or assisted with a computerised system. No matter whether it is computerised or manually maintained, the accounting system will play a vital role in your business.

Regulatory compliance

As per the requirement of IRAS, accounting records should be maintained for 5 years. This means that at any given time, your business should be able to show all the accounting records and the supporting documents to the authorities within the abovementioned 5 year period.

Improved efficiency and productivity

How long does it take for you to find a particular customer invoice at your office? An appropriate accounting record maintenance system will increase the efficiency level of your employees as it allows tracking of past records efficiently and effectively.

Minimised fraud and dispute

A good accounting record maintenance system will assist your business in the case of a fraud and also to explain to the clients in the case of a dispute. It is always better to justify to your client on any dispute before going to court.

Control on the growth of records as your business grows

When your business is small, it is easy to memorise the receivables and keep all the accounting documents in file pockets however when your business grows, a proper accounting record maintenance system will be important to assist you to generate and locate documents and information at ease.

It helps when your business need to change its current processes

If you have a good manual record maintenance system, and if you need it to be computerised, any software can fit in to your business since you have all the accounting records kept in proper manner. On the other hand, if you haven’t maintained the records properly, additional costs will be incurred to get your records arranged before entering the data to the computerised system.

An appropriate record maintenance system will not only help your business to operate smoothly but also to grow.

Engage accounting services or bookkeeping services to proper manage your accounting records which will improved efficiency and productivity of your company and at the same time minimised fraud and dispute.

Your company may be exempted from audit requirement if:

• It is an Exempt Private Company (“EPC”), EPC means the company has no corporate shareholder and the number of shareholders in the company is not more than 20
• Annual revenue of the company does not exceed SGD 5 million for financial years starting on and after 1 June 2004
• Shareholders who represent 5% or more of a company’s ordinary shares does not request for audit, or
• Banks or other creditors / financial companies do not require audited financial statements.

However, an EPC which enjoys audit exemption is still required to prepare its Financial Statements in line with the Singapore Financial Reporting Standards (FRSs) and Companies Act for submission to ACRA and IRAS.

Are you aware of the common errors noticed in such reports and did you know that the followings need to be disclosed in such reports? If you engage audit services, all these common errors will be eliminated and your audit report will be in correct order.

• Future rental payments
• Future commitments for capital expenditure, especially when the Company has undertaken to buy a property.
• Terms and conditions of loans and finance leases taken – rate on interest, instalments amounts and the summarised repayment schedule.
• Substantial foreign currency balance under bank balances, trade receivables, trade payables, etc. as on year-end are to be disclosed in the notes to accounts
• Issue of shares after the financial year-end has to be disclosed as a note in the financial statements.

Your financial statements or audit report may have one or more such errors and they may need rectification. Rectification can be costly, time-consuming and stressful. Moreover, rectifying the financial statements and filing again with ACRA and IRAS may reduce your company’s credibility in their eyes. So, it is best to get reliable audit services to furnish your report right away.