Temasek Holdings Financial report analysis

[Papsmearer]

TAX PAYERS NIGHTMARE!!! This is thousands times worse than NKF & Renci scandals combined and the "auditor" is LKY & LHL.

If you think this is bad, wait until you see GIC's books, not that they will ever be revealed to the public. GIC has a much bigger portfolio than Temasek, and since its not obligated to make public its expenses, profits, etc. the scope of abuse there could be potentially much worse. After all the foxes guarding the Temasek henhouse are the same ones guarding the GIC henhouse.

 

[jw5]

U don't need the notes to extrapolate from this. Normally, I read the notes first before even look at the P&L or Balance sheet.If you are saying that subsidiary expenses are taken in, than you have to also add the subsidiary's assets and income or losses. Since the 2009 financial statement state $140 billion in assets (the figure that govt officials and other source state as the funds under management), it obvious that the subsidiary's assets are not included. Otherwise, the amount of assets will be well in excess of $200 billion. Also Temasek holds a portfolio of companies, they do not make companies their subsidiaries. So, I would say these numbers are accurate, otherwise they are buying companies with large overhead and expenses, not a good thing either way.

Whenever I read an annual report, even before I look at the P&L, Balance sheet or notes to the accounts, I always look at the picture of the directors and management first.

 

[Papsmearer]

What is "Intangibles" in the balance sheet, worth quite a lot.

Normally intangibles supposed to mean things like goodwill. In other words, if the asset is worth $2 billion and you pay over market value $3 billion, than the goodwill portion is $1billion. In other words, its not a hard asset and is almost an arbitrary justification of COV, or overpaying for an asset. Not surprising considering how many Temasek investments that year were clearly over paid.

 

[Papsmearer]

Whenever I read an annual report, even before I look at the P&L, Balance sheet or notes to the accounts, I always look at the picture of the directors and management first.

Why, its the usual suspects. These PAP elites are recyled around and each one of them sits on the board of numerous GLCs.

 

[longbow]

For one the $8B for 350 employees at Temasek is wrong. Probably includes the employees from its subs.

Unlike most funds, Temasek owns more than 50% in many of its portfolio companies. Singtel, DBS, PSA, Capland are just a few examples.

So the financials from these subs are taking into its balance sheets.

Also note that this is called Group BS and Group P/L. Group = parent and sub put into consoldiated FS.

Temasek release FS without notes so that they need not release too much info. Without notes very hard to tell what is going on.

After all in the fingures you have banks, property company, utilities, airline, telco all lumped in. These industries have very distinct metrics and so very hard to tell how these "investments are doing compared to their industries.

U don't need the notes to extrapolate from this. Normally, I read the notes first before even look at the P&L or Balance sheet.If you are saying that subsidiary expenses are taken in, than you have to also add the subsidiary's assets and income or losses. Since the 2009 financial statement state $140 billion in assets (the figure that govt officials and other source state as the funds under management), it obvious that the subsidiary's assets are not included. Otherwise, the amount of assets will be well in excess of $200 billion. Also Temasek holds a portfolio of companies, they do not make companies their subsidiaries. So, I would say these numbers are accurate, otherwise they are buying companies with large overhead and expenses, not a good thing either way.

 

[longbow]

Intangibles also includes trademarks, "SIA", "Singtel", "optus", "PSA". But given general nature of the BS probably includes goodwill (COV of their purchases)

Normally intangibles supposed to mean things like goodwill. In other words, if the asset is worth $2 billion and you pay over market value $3 billion, than the goodwill portion is $1billion. In other words, its not a hard asset and is almost an arbitrary justification of COV, or overpaying for an asset. Not surprising considering how many Temasek investments that year were clearly over paid.

 

[Papsmearer]

For one the $8B for 350 employees at Temasek is wrong. Probably includes the employees from its subs.

Unlike most funds, Temasek owns more than 50% in many of its portfolio companies. Singtel, DBS, PSA, Capland are just a few examples.

So the financials from these subs are taking into its balance sheets.

U mistake subsidiaries with assets. Singtel etc. are just companies in Temasek's portfolio. They are not subsidiaries. These companies report to their shareholders of which Temasek is one. Temasek subsidiaries are companies like MacRitchie Investments, Seletar investments, Asia Financial holdings, Aranda Investments, Dunearn Investments, etc. By the way, the definition of a subsidiary is that it has to be majority owned by the holding company. Some of the companies u mentioned like Capitaland is not majority owned by Temasek. I think they own just over 40%. U are confused.

 

[longbow]

Ownership stake of more than 51% will have to be taken into consolidated FS. Temasek in this case is not just a shareholder, the are majority shareholder with substantial say on the operations of the companies. So FS of SIA will have to be consoldated into Temasek FS.

In a way if the FS are just of Temasek owning these funds and FS of the subs are not consolidated how can you explain the $8B in wages. $8B for 350 employees of temasek nonsense. S$8B is almost the entire defence budget of Singapore!!! So just based on that fact leads me to believe that these FS consists of the FS of the subs.

Once you look from POV of consolidated FS (PSA, SIA, Capland, DBS, ST) it makes sense that employee compensation comes to $8B a year.

That is why GMS has to be clear on what he says or else it will come back to haunt him.

Perhaps some accountant out there can comment.

U mistake subsidiaries with assets. Sintel etc. are just companies in Temasek's portfolio. They are not subsidiaries. These companies report to their shareholders of which Temasek is one. Temasek subsidiaries are companies like MacRitchie Investments, Seletar investments, Asia Financial holdings, Aranda Investments, Dunearn Investments, etc. U are confused.

 

[Papsmearer]

Ownership stake of more than 51% will have to be taken into consolidate FS. Temasek in this case is not just a shareholder, their are majority shareholder with substantial say on the operations of the company. So FS of SIA will have to be consoldated into Temasek FS.

Possibly, but Temasek owns less than 41% of capitaland, why are u saying these companies are subsidiaries? U still have not explain wht the assets of these so call subsidiaries (according to you) are not included in the Temasek balance sheets but somehow, acording to you, their expenses are.

 

[Papsmearer]

$8 billion for a staff of 350! It's on top of "operating expenses" like maintence of buildings and know one knows what as its account is not officially audited nor debated in parLEEment.

That's almost than twice the for the 2010 Budget for Health http://www.mof.gov.sg/budget_2010/expenditure_overview/moh.html of Sin$4.18 billion!!!!!!! Can someone ask WHY?

Actually, the real questions that should be asked in not only the staff expenses, but also why other sovereign wealth funds like the Norwegian one has a staff of 250 managing $661 billion in assets, and Temasek has a staff of 350 for $140 billion in assets. In other words, 5 times as many for the asset size.

 

[longbow]

I did not say that assets of subs are not taken into Temasek FS. In fact in a consoldation the entire FS of a sub is taken into the parent's books and that includes Assets, liab, P/L.

If Capitaland is inder 50% then it is not considered a sub. Was not aware that Capitaland is under 50%.

You are confusing accounting for a sub (more than 51%) vs ownership of a smaller stake. When temasek buys 5% of Bank fo China that stake in accounted like an investment - investment in Bank of China $2B. Or if they buy a bldg in NY - investment in office bldg $1B.

But if they own Singtel - more than 51% (not sure if over 51% threashold) and that stake is worth $15B, they do not put in their books investment in Singtel $15B. As a sub they will instead have to take in the enitre balance sheet and P&L of Singtel into its books (minus minority interest - the % that they do not own).

If you look closely at PL and BS you will notice this line minority interest. This is the % of the asset/liab (BS) or the % of the income (P/L) that are not owned by the parent Temasek. In singtel's case it refers to some of us Singaporean and the given singtel shares.

So in Temasek's BS there is a $22B in minority interest. I believe this refers to the stakes held by the minority interest in the subs of Temasek (33% of NOL, 45% or SIA, 46% of Singtel).

Now that I look closer I am convinced that Temasek FS includes the subs because we have this minority interest.

So don't jump to conclusions that 350 Temasek employees are paid $8B last year!

Possibly, but Temasek owns less than 41% of capitaland, why are u saying these companies are subsidiaries? U still have not explain wht the assets of these so call subsidiaries (according to you) are not included in the Temasek balance sheets but somehow, acording to you, their expenses are.

 

[longbow]

I think the difference in staff is due to business model. I suspect that Norway just allocates their $$ into the various funds out there.

Temasek will go buy Bharti or Bank of China shares or invest in microlending in India (need a lot more manpower to research all these purchases) while Norway probably will place money in fund that owns stake in Chinese banks or funds that has exposure to India telco.

Temasek will buy NY building while Norway will buy NY office space fund.

Actually, the real questions that should be asked in not only the staff expenses, but also why other sovereign wealth funds like the Norwegian one has a staff of 250 managing $661 billion in assets, and Temasek has a staff of 350 for $140 billion in assets. In other words, 5 times as many for the asset size.

 

[exSINgaporean]

"The expenses for 2009 (table 2) are broken down as follows:

Selling and Distribution $5.042 billion or 3.57% of assets
Administrative $8.068 billion or 5.72% of assets
Finance charges $2.727 billion or 1.93% of assets
Other operating expenses $15.333 billion or 10.88% of assets

The thing that really jumped out to me was the administrative expenses. This is expenses for salaries, rents, etc. How can a staff of only 350 incur $8 billion in administrative expenses! Do they have their own private jets, gold water faucets, etc?"

Wow! Mr. Goh to add it simple to compute the average, round up 400 to include their pet dogs working part-time to accompany them when they think about the company work at home.....that works out to be $20 million per staff!

Please someone out there, please correct me if I am wrong.

Can someone get the parLEEment question which golden NEW toilet bowl they use EVERY YEAR!

 

[longbow]

You are reading the financials wrongly lah. Read my posts above.

Hopefully Mr Goh doesn't go confront the ministers over these figures come election time. Must remember that our Gov is well run and above board. There is heck of a lot of smart people in it. We can question policies but the operational aspects are often top notch!.

So if GMS has economics type question get second opinion from bona fide economist. If one want to question accounts - get an accountant to verify. As for his HDB at cost policy and its impact on Singapore property - better go consult some economists or higher ups at Jones Lang. No need to quote that person (if can even better) but just run ideas by him and see if it makes sense.

For example, KJ seems to knows what he is talking about.

Or else kena egg in face.

They list Financial Charges at $2.7% Based on int rate of 5% that is equivalent to $54B in loans/bonds. You think Temasek borrow so much money??

"The expenses for 2009 (table 2) are broken down as follows:

Selling and Distribution $5.042 billion or 3.57% of assets
Administrative $8.068 billion or 5.72% of assets
Finance charges $2.727 billion or 1.93% of assets
Other operating expenses $15.333 billion or 10.88% of assets

The thing that really jumped out to me was the administrative expenses. This is expenses for salaries, rents, etc. How can a staff of only 350 incur $8 billion in administrative expenses! Do they have their own private jets, gold water faucets, etc?"

Wow! Mr. Goh to add it simple to compute the average, round up 400 to include their pet dogs working part-time to accompany them when they think about the company work at home.....that works out to be $20 million per staff!

Please someone out there, please correct me if I am wrong.

Can someone get the parLEEment question which golden NEW toilet bowl they use EVERY YEAR!

 

[Papsmearer]

I did not say that assets of subs are not taken into Temasek FS. In fact in a consoldation the entire FS of a sub is taken into the parent's books and that includes Assets, liab, P/L.

If Capitaland is inder 50% then it is not considered a sub. Was not aware that Capitaland is under 50%.

You are confusing accounting for a sub (more than 51%) vs ownership of a smaller stake. When temasek buys 5% of Bank fo China that stake in accounted like an investment - investment in Bank of China $2B. Or if they buy a bldg in NY - investment in office bldg $1B.

But if they own Singtel - more than 51% (not sure if over 51% threashold) and that stake is worth $15B, they do not put in their books investment in Singtel $15B. As a sub they will instead have to take in the enitre balance sheet and P&L of Singtel into its books (minus minority interest - the % that they do not own).

If you look closely at PL and BS you will notice this line minority interest. This is the % of the asset/liab (BS) or the % of the income (P/L) that are not owned by the parent Temasek. In singtel's case it refers to some of us Singaporean and the given singtel shares.

So in Temasek's BS there is a $22B in minority interest. I believe this refers to the stakes held by the minority interest in the subs of Temasek (33% of NOL, 45% or SIA, 46% of Singtel).

Now that I look closer I am convinced that Temasek FS includes the subs because we have this minority interest.

So don't jump to conclusions that 350 Temasek employees are paid $8B last year!

Its very simple to settle this. U saying the Temasek numbers include those of the subsidiaries. I say no. All u need to do is to add up the revenues of all the subsidiaries, take out the portion that is allocated to Temasek, and than add in all their investment sales for the year, and see if it comes up to $79billion (Temasek's stated revenues). I say that it far exceeds $79 billion. For example, SIA's revenues are $12 billion per year, of which Temasek will have to allocate $6 billion (assuming at least 50% ownership) to its revenues ledger, do the same for DBS, Capitaland, Singtel, etc. all those other companies u say are their subsidiaries. U will find this number far exceeds $79 billion without even factoring in Temasek's own revenues. By the way, Temasek says their staff is now 380.

 

[Papsmearer]

I think the difference in staff is due to business model. I suspect that Norway just allocates their $$ into the various funds out there.

Temasek will go buy Bharti or Bank of China shares or invest in microlending in India (need a lot more manpower to research all these purchases) while Norway probably will place money in fund that owns stake in Chinese banks or funds that has exposure to India telco.

Temasek will buy NY building while Norway will buy NY office space fund.

The business model is irrelevant. The results are the last arbiter. If your expenses to manage $661 billion is lower than another company's expenses to manage $140 billion, and your profit % is higher than the other company, than someone has the wrong business model. If you want to talk business models, than obviously that is another topic altogether. We already know the Temasek business model is flawed. Even if they had only $10 to invest, its flawed. when u install a CEO who is inexperienced and is the wife of the PM, u know the model is flawed already.

 

[Unrepented]

It IS a consolidated FS because there is Minority Interest (MI), now call Non Controlling Interest (NCI).

Consolidation is quite complex and is not proportional apportionment of revenues etc. There may be eliminations due to intercompany transactions, unrealised profits etc. There are FRS for financial institutions.

Further, all staff cost may not be reflect only in the Admin, Selling & Distribution cost. Relevant labor cost may be above the GP, as in Cost of Sales for businesses with operations.

As a rule, more than 50% ordinary sharingholding OR have management control (have authority over the financial and operation policies of the investee co., eventhough less than 50% ordinary shareholding) have to be consolidated.

Just my 2c.

Its very simple to settle this. U saying the Temasek numbers include those of the subsidiaries. I say no. All u need to do is to add up the revenues of all the subsidiaries, take out the portion that is allocated to Temasek, and than add in all their investment sales for the year, and see if it comes up to $79billion (Temasek's stated revenues). I say that it far exceeds $79 billion. For example, SIA's revenues are $12 billion per year, of which Temasek will have to allocate $6 billion (assuming at least 50% ownership) to its revenues ledger, do the same for DBS, Capitaland, Singtel, etc. all those other companies u say are their subsidiaries. U will find this number far exceeds $79 billion without even factoring in Temasek's own revenues. By the way, Temasek says their staff is now 380.

 

[Hans168]

I am touched by Mr GMS selfless act, he is a great leader and willing to scarify for our country..NSP Cheong!

Why this Ron Ron looks so much like real life Goh Meng Seng.........his dad fathered another outta wedlock? Who is the real bastard???