Why are admin costs for SIA and PSA (among others) included in Temasek accounts?

[Confuseous]

Ms Poa is mistaken about the "S$8 billion administrative expense" on two counts. As reported in our latest Temasek Review 2011, our group administrative expense was S$7 billion last year, not S$8 billion which was reported for the year before. This also included expenses of subsidiary companies such Singapore Airlines, PSA and others, and not for Temasek Holdings only.

- http://www.todayonline.com/Voices/EDC110824-0000350/Hazel-Poas-statements-misleading

 

[johnny333]

Ms Poa is mistaken about the "S$8 billion administrative expense" on two counts. As reported in our latest Temasek Review 2011, our group administrative expense was S$7 billion last year, not S$8 billion which was reported for the year before. This also included expenses of subsidiary companies such Singapore Airlines, PSA and others, and not for Temasek Holdings only.

- http://www.todayonline.com/Voices/EDC110824-0000350/Hazel-Poas-statements-misleading

When I read the paragraph, "First, Temasek does not manage or invest any CPF money, or the foreign reserves of Singapore."

My "lies & half truth" detector was activated

 

[Watchman]

Just got to dig deeper .

Regarding Terimasick . Ask me .

 

[red amoeba]

what is adminstrative expenses? Salaries to the directors / management board inclusive?

 

[Unrepented]

Ms Poa is mistaken about the "S$8 billion administrative expense" on two counts. As reported in our latest Temasek Review 2011, our group administrative expense was S$7 billion last year, not S$8 billion which was reported for the year before. This also included expenses of subsidiary companies such Singapore Airlines, PSA and others, and not for Temasek Holdings only.

- http://www.todayonline.com/Voices/EDC110824-0000350/Hazel-Poas-statements-misleading

Because;

TH Shareholding in SIA 55%
TH Shareholding in PSA 100%

Scope of Consolidated Financial Statements

12. Consolidated financial statements shall include all subsidiaries of the parent.*

13. Control is presumed to exist when the parent owns, directly or indirectly through subsidiaries, more than half of the voting power of an entity unless, in exceptional circumstances, it can be clearly demonstrated that such ownership does not constitute control. Control also exists when the parent owns half or less of the voting power of an entity when there is: *
(a) power over more than half of the voting rights by virtue of an agreement with other investors;
(b) power to govern the financial and operating policies of the entity under a statute or an agreement;
(c) power to appoint or remove the majority of the members of the board of directors or equivalent governing body and control of the entity is by that board or body; or

(d) power to cast the majority of votes at meetings of the board of directors or equivalent governing body and control of the entity is by that board or body.

14. An entity may own share warrants, share call options, debt or equity instruments that are convertible into ordinary shares, or other similar instruments that have the potential, if exercised or converted, to give the entity voting power or reduce another party’s voting power over the financial and operating policies of another entity (potential voting rights). The existence and effect of potential voting rights that are currently exercisable or convertible, including potential voting rights held by another entity, are considered when assessing whether an entity has the power to govern the financial and operating policies of another entity. Potential voting rights are not currently exercisable or convertible when, for example, they cannot be exercised or converted until a future date or until the occurrence of a future event.

15. In assessing whether potential voting rights contribute to control, the entity examines all facts and circumstances (including the terms of exercise of the potential voting rights and any other contractual arrangements whether considered individually or in combination) that affect potential voting rights, except the intention of management and the financial ability to exercise or convert.

16. [Deleted]

17. [Deleted]

18. [Deleted]

19. A subsidiary is not excluded from consolidation simply because the investor is a venture capital organisation, mutual fund, unit trust or similar entity.

20. A subsidiary is not excluded from consolidation because its business activities are dissimilar from those of the other entities within the group. Relevant information is provided by consolidating such subsidiaries and disclosing additional information in the consolidated financial statements about the different business activities of subsidiaries. For example, the disclosures required by FRS 108 Operating Segments help to explain the significance of different business activities within the group.

21. A parent loses control when it loses the power to govern the financial and operating policies of an investee so as to obtain benefit from its activities. The loss of control can occur with or without a change in absolute or relative ownership levels. It could occur, for example, when a subsidiary becomes subject to the control of a government, court, administrator or regulator. It could also occur as a result of a contractual agreement.

 

[hairylee]

When I read the paragraph, "First, Temasek does not manage or invest any CPF money, or the foreign reserves of Singapore."

My "lies & half truth" detector was activated

Wonder where Temasek Holdings get their money in the first place.

 

[Unrepented]

Extract from TH annual report FY2011

Relating to the President

The President of the Republic of Singapore has an independent custodial
role to safeguard Singapore’s critical assets and past reserves.
As a key institution, Temasek is designated a Fifth Schedule Company2
under the Singapore Constitution with a constitutional responsibility to
safeguard our past reserves3.
Our Chairman and CEO certify our Statement of Reserves and Statement
of Past Reserves to the President at prescribed intervals as part of our
responsibility to protect our past reserves.
We are required by the Singapore Constitution to seek the President’s
approval before a draw4 occurs on our past reserves.
Reserves accumulated by Temasek before the term of the current
Government form our past reserves. Current reserves are primarily profi ts
accumulated after a newly elected government is sworn into power.
The swearing-in of the new Cabinet on 21 May 2011 after the Singapore
Parliamentary General Election marked the start of a new term
of government.
To safeguard the integrity of those involved in managing Temasek’s reserves,
the President’s concurrence is required for the appointment, renewal or
removal of our Board members. The appointment or removal of our CEO
by our Board is also subject to the concurrence of the President.
In addition to its normal fi duciary duties to the Company, our Board is
accountable to the President to ensure that every disposal of investment
is transacted at fair market value.

 

[Unrepented]

Owned by Minister of Finance?:( Dont believe check their website for the annual fin report

Relating to Our Shareholder

Incorporated on 25 June 1974, Temasek is a Singapore exempt private
company1 wholly owned by the Minister for Finance. Subject to the
President’s concurrence, our shareholder has the right to appoint, remove
or renew Board members.
We operate under the purview of the Singapore Companies Act and all
other applicable laws and regulations governing companies incorporated
in Singapore. Within this regulatory framework, Temasek operates with
full commercial discretion and fl exibility, under the direction of our Board.
We provide annual statutory fi nancial statements audited by an international
audit fi rm, as well as periodic updates to our shareholder. While not required
1 Under the Singapore Companies Act (Chapter 50), an exempt private company has no more
than 20 shareholders and no corporate shareholder, and is exempted from filing its audited
financials with the public registry.

 

[Unrepented]

I wonder what kind of annual report the PE candidates are gonna publish to the public Will it be any different from what is already available.....more detailed:o

Extract from TH annual report for FY2011

Statement by Auditors

We are the auditors of Temasek Holdings (Private) Limited (“Temasek”). We have audited
the statutory consolidated fi nancial statements of Temasek and its subsidiary companies
(the “Group”) for the fi nancial years ended 31 March 2008, 2009, 2010 and 2011 and have
issued unqualifi ed audit reports1.

The audited statutory consolidated fi nancial statements of
the Group for the fi nancial years ended 31 March 2004, 2005, 2006 and 2007 were audited
by PricewaterhouseCoopers LLP2 whose auditors’ reports3 were also unqualifi ed.
Under the Singapore Companies Act, Chapter 50, Temasek is an exempt private company and
is not required to publish its audited statutory consolidated fi nancial statements.

Management is responsible for the preparation and presentation of the Group Financial
Summary for the fi nancial years ended 31 March 2004 to 2011 set out from pages 24 to 29.
The Group Financial Summary consists of the Group Financial Highlights, Group Income
Statements, Group Balance Sheets and Group Cash Flow Statements as at and for the fi nancial
years ended 31 March 2004 to 2011 and Group Statements of Changes in Equity for the
fi nancial years ended 31 March 2010 and 2011 prepared and presented based on the audited
statutory consolidated fi nancial statements.

The Group Financial Summary does not contain all
the disclosures required by Singapore Financial Reporting Standards applied in the preparation
of the audited statutory consolidated fi nancial statements of the Group. Reading the Group
Financial Summary, therefore, is not a substitute for reading the audited statutory consolidated
fi nancial statements of the Group.

Our responsibility is to express an opinion on the Group Financial Summary based on our
procedures, which were conducted in accordance with Singapore Standard on Auditing (SSA)
810 – Engagements to Report on Summary Financial Statements.
In our opinion, the Group Financial Summary is summarised and presented consistently, in all
material respects, with the audited statutory consolidated fi nancial statements of the Group.

KPMG LLP
Public Accountants and Certifi ed Public Accountants
Singapore
29 June 2011

 

[Unrepented]

No disclourse required to be published to the public.....it seems:o

what is adminstrative expenses? Salaries to the directors / management board inclusive?

 

[LeMans2011]

Unrepented,
Thanks for your research. How about summarising in a few sentences for the laymen?

 

[red amoeba]

then it is quite strange,..i am not a bean counter...so i seek clarification on what administrative expenses mean...

So i checked the internet, wah say...in layman's terms, it mean any costs that cannot be classified??

Administrative expenses are necessary costs that are associated with the management, clerical, and general functions within an organization that cannot be directly applied to some expense category related to the operation. Sometimes considered part of general business expense, an administrative expense can take the form of such basic needs as rental space for the business, the cost of utilities, or even the salaries of personnel that are not involved in the sales efforts of the company.Sometimes referred to as general expenses, administrative expenses focus on costs that offer a wide benefit to the organization. As such, their benefits transcend departmental lines and make it possible for the many necessary functions to successfully take place. For the most part, any expense that can be identified as directly benefiting a particular division or department of the company, while offering little or no direct benefit to other areas of the organization, can be considered general administrative expenses.

One of the most common types of administrative expenses found in just about any organization is the cost of utilities. Charges for heating, cooling, power, and water are all traditionally identified as administrative and general expenses. In recent years, costs for Internet access, landline and mobile telephone services are also included as generalexpenses. However, there is some difference of opinion as to whether mobile services should be considered a general expense or if the cost should be classified as an expense related specifically to the departments of employees who actually use the services.Another example of administrative expenses is the cost of leasing or renting space for the operation of the organization. This can include leasing retail store space, a suite of offices in an office building, or the rental of manufacturing facilities. Since the entire organization benefits from having space to operate, it is not possible in most cases to directly associate this charge with a specific department within the organization.Salaries can also be considered among general administrative expenses. This is particularly true with managers and general administrators whose responsibilities involve them in many different areas of the operation. Since more than one area has the direct benefit of themanager’s efforts, the expense is considered to be general in nature.While regulations used to define administrative expenses vary somewhat around the world, there are some types of expenses that are hardly ever defined as general in nature. These include any expenses that can be directly connected with sales and marketing efforts, or research into the development of a new product or service. Manufacturing costs, both in terms of equipment and raw materials, are also not likely to be considered an administrative expense under any circumstances.I take example of SIA.

Since TH owns 55% of SIA and SIA being a listed company on its own and publishes its own financial report, the costs of running SIA, as reflected in SIA's financial report, also means 55% to be captured and reported in TH's report? But surely, say, wages paid out by SIA to the staff cannot be attributed to administrative expenses? or the fuel spend by SIA cannot be attributed to TH's admin expenses?

I don't know the value of SIA vis-a-vis the total portfolio of TH (i.e. it amounts to 10 -20% of TH's total subsidiaries), but say if i take 10%, 10% of 7b will equal 70million. So, it costs 70m to manage SIA per annum - does it mean that?


So, when TH says its makes certain % from their investments affairs, does it also include profits from SIA and included as part of their results?

I think so right?

 

[Unrepented]

Someone told me, is capture 100% and not 55% if consolidated as a subsidiary .

Since TH owns 55% of SIA and SIA being a listed company on its own and publishes its own financial report, the costs of running SIA, as reflected in SIA's financial report, also means 55% to be captured and reported in TH's report?

 

[Unrepented]

Get a job in TH Filing clerk also boleh:o

I also layman. Not research..... I just cut and paste what I thought was interesting niah.:(

Unrepented,
Thanks for your research. How about summarising in a few sentences for the laymen?

 

[Zombie]

Why are admin costs for SIA and PSA (among others) included in Temasek accounts?

Because it is the accounts of the whole group ie "Temasek Holdings Pte Ltd and its subsidiaries companies".

 

[streetsmart73]

what is adminstrative expenses? Salaries to the directors / management board inclusive?

hi there


1. bro, insurance, medical services, coffee/tea and things loh!
2. entertainment possible!

 

[Unrepented]

Ask this sammyboy finance minister.

Why are admin costs for SIA and PSA (among others) included in Temasek accounts?

Because it is the accounts of the whole group ie "Temasek Holdings Pte Ltd and its subsidiaries companies".

 

[Unrepented]

No. Cannot like that calculate and do simple apportionment of consolidated expenses base on size of respective investment. Not directly proportional.

I don't know the value of SIA vis-a-vis the total portfolio of TH (i.e. it amounts to 10 -20% of TH's total subsidiaries), but say if i take 10%, 10% of 7b will equal 70million. So, it costs 70m to manage SIA per annum - does it mean that?