It was the first initiative announced by ACRA in April 2010. It is the introduction of the colour-coded compliance rating and issuance of the Certificate of Compliance.
How to get the Certificate of Compliance?
First get the GREEN tick. Green tick will be given only when a company complies with ALL of the following requirements as enunciated in the Companies Act, Cap.50 ie.
1. Hold its AGM once in every calendar year and not more than 15 months
after the last preceding AGM (section 175). For a new company, the period is 18 months after date of incorporation.
2. Provide the members/shareholders with the financial statements that is not more than 6 months old at the date of the meeting. For a public listed company the financial statements must not be more than 4 months old at the date of the meeting.
3. File its AR within 1 month from the date of the AGM (section 197).
Once your company gets the GREEN tick, you pay $5 for a copy of Certificate of Compliance. Failing to comply, you will get the RED cross. All the GREEN ticks and RED crosses will be displayed next to your business entities’ name for all to see in the free Directory of Business Entities.
What can I do with the Certificate of Compliance?
1. Show to banker to demonstrate that your company is behaving and ask for a discount on the interest costs.
2. Attached it to your resume as you present yourself to the next prospective employer as the key person in keeping the company neat and tidy.
3. Attached it to your performance appraisal as you discuss for a bonus.
4. Show to auditor. Try asking discount on ground that ACRA is certifying compliance already. No audit work is necessary there.
5. The auditors too can use the CoC to check on their prospects first before accepting appointment.
Good morning to you. Cheers
Who did it? CSI team, pls check for finger prints and DNA.
Dear Staff of Corporate Secretarial firms, directors-wannabes and of course, Directors of companies,
Please be informed that a local director was recently fined $21,000 for changing the addresses of foreign directors to a local address, with full knowledge that the information is false.
Why did she, Ragini Dhanvantray of Rivkin Consultancy, do that for?
She is currently the local director of companies with foreign directors.
The Companies Act stipulates that every company must have at least one director ordinarily resident in Singapore.
Perhaps (I speculate here, without basis) she is thinking of quitting as local director of these companies as these foreign directors/shareholders may have gone missing and have not be meeting their obligations to her and the companies.
She came up with the idea of changing the addresses of these foreign directors and subsequently follow with her resignation as director.
Points to ponder
- How were these false information found out?
- As the Companies Act is currently under review, should the relevant authority/committee consider possible improvement to the stipulation for a local director and specify the roles and responsibilities of these directors? Less will come forward to offer themselves as local directors if these directors are constantly hauled to Court, ACRA, IRAS, creditors, customers, employees etc etc to answer queries on companies abandoned by these foreign shareholders cum directors. If less are willing to come forward, what are implications to Singapore as a business hub?
We were repeatedly reminded that you have no lesser responsibilities as a local director or a nominee director. A director is a director! Oxymoronic?
Singapore Exchange CEO Hsieh Fu Hua in a speech at the annual Invest Fair on last Saturday proposed the following regulatory changes:-
- Companies with foreign operations audited by an overseas accounting firm may need a joint sign-off by a local auditor;
- New listings may need to hire governance advisers for two years after their initial public offering (IPOs).
The costs of listing and costs of maintaining a listing status in Singapore for an entity with foreign operations have just gone up.
The devil will be in executing the above changes.
Some issues of the top of my head would be:-
- Local auditor signing off would also be in a position to decide which foreign auditor to appoint?
- Will this eventually lead to local auditor taking over the audit of foreign operations as well?
- What is the level of responsibility of local auditor signing off?
- What are the responsibilities of governance advisers? Is he or she a board level personnel? Can a staff hired to do internal control duties be designated a governance adviser?
- Actually who is a qualified governance adviser? Lawyers or accountants?
I would like to hear SGX proposing some control and maintenance measures to be done by them. I really hope SGX is not attempting to propose measures that would eventually “outsource” their control function to local auditors and governance advisers at the expense of the listed entities.
What is the case about?
The indepedent directors of Airocean have been charged for breach of duty when they are alleged to have given misleading announcements over the nature and details of investigation of Mr Thomas Tay, the former CEO of Airocean by Corrupt Practices Investigation Bureau (CPIB).
Ms Lorraine Tay, the Vice President of SGX’s issuer regulation unit and the team leader in charge of Airocean’s compliance issues, was queried by Mr Davinder Singh, Senior Counsel, acting for one of the independent directors in the early proceedings.
Lorraine said SGX was informed by MAS then that the announcements may not be accurate and that MAS was unable to disclose why. Mr Singh queried whether this was informed to the directors.
- What information did SGX have at that point in time?
- What were the precise circumstances leading to SGX to conclude that the announcements then at that point in time were misleading
- And whether the same information was conveyed or made available to the directors?
- And when the directors became aware of the information, did the directors, to the best of their abilities, attempt to rectify any “misannouncements” made earlier to the investing public?
SGX‘s position – Announcements must always be the responsibility of the directors.
MAS‘s role with CPIB and MAS’s role with SGX – Beyond my realm of understanding at the moment.
CPIB‘s role – To investigate any wrongdoing. But could they be expected to tell the whole world who and what they are investigating and may end up compromising their investigation?
Let us await for more news on this case.
Reference – BT, Aug. 15, 2009
Shareholders only have rights but no liabilities.
What rights do shareholders have?
- right to vote
- right to attend AGM and EGM
- right to receive the Annual Accounts
- right to receive dividends when declared
Issue – Do some shareholders have more rights than stated above? Do the above always hold true for every single shareholder?
The simple answer – Some shareholders do have more rights, whether rightfully or otherwise, than the others.
The following are real examples where my simple answer holds true:-
- The issue of consolidating the accounts of 2 companies which are publicly listed. The holding company requires a lot more than statutory info to prepare its consolidated accounts and satisfy its auditors. So we have possible situation of a majority shareholder being given access to non-publicly available info.
- How about the situation of a major shareholder getting sensitive info through its nominee directors in the subsidiary company? A nominee director is appointed by a major shareholder. Who do that director owe a duty and responsibility to? The major shareholder or to the company?
How to resolve this?
Well, they have been trying to do it a couple of times since 1998.
Singapore attempted it once and concluded successfully in 2003 for companies with market capitalisation of more $75mio.
This quarterly reporting requirement was recently reaffirmed.
Can you find a specific definition of “True and Fair view”? As of my last attempt, there is no authoritative ie. “black and white” version available for all parties to adopt.
The ambiguity then gives rise to confusion.
The public accountants are required by the Companies Act to express an opinion on whether the financial statements are true and fair. The auditors conduct control test and substantive test based on varying degree of sampling to reach a conclusion.
Clients may enter into a lengthy discussion to change their auditors’ opinion to qualify their accounts.
ACRA said the criterion of a “true and fair view” is NOT an accounting criterion. It is open to legal test in Court. ACRA is saying that public accountants thus do not have the final say.
Mr Joseph Alfred, Technical Director of ACCA Singapore, in his article in Focus Qtr 4- 2006, presented his arguments against accounting profession being “absorbed and subsumed under the legal profession”.
Given the current direction from ACRA, he said you should not be surprised if you were to be directed by your auditors to the lawyers to obtain opinions on contentious accounting interpretations.
Why should the accounting profession be exempted from a legal review when other professions like medical are included?