SCCCI AGM 2023 - Audited Financial Statements 2022

Society No. S61SS0014E

Singapore Chinese Chamber of Commerce & Industry

Annual Financial Statements

31 December 2022

SINGAPORE CHINESE CHAMBER OF COMMERCE & INDUSTRY

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF SINGAPORE CHINESE CHAMBER OF COMMERCE & INDUSTRY FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022

Report on the audit of the financial statements

Qualified opinion

We have audited the financial statements of Singapore Chinese Chamber of Commerce & Industry (the "Chamber"), which comprise the balance sheet as at 31 December 2022, and the statement of comprehensive income, statement of changes in funds and statement of cash flows of the Chamber for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, except for the non-compliance with Singapore Financial Reporting Standard (“FRS”) 110 as described in the Basis for Qualified Opinion section of our report, the accompanying financial statements are properly drawn up in accordance with the provisions of the Societies Act Chapter 311 (the “Act”) and Financial Reporting Standards in Singapore (FRSs) so as to present fairly, in all material respects, the financial position of the Chamber as at 31 December 2022 and financial performance, changes in funds and cash flows of the Chamber for the year ended on that date.

Basis for qualified opinion

As stated in Note 2.3 to the Chamber’s financial statements, the Chamber did not prepare consolidated financial statements that incorporate the financial results, cash flows and financial positions of the Chamber’s subsidiary companies as the Council Members are of the opinion that it is preferableinthe interest of the members of the Chamber (“the members”)that the financialstatements of the subsidiary companies be annexed to the financial statements of the Chamber. This is not in accordance with FRS 110 - Consolidated Financial Statements, which requires the preparation of one set of consolidated financial statements for the Chamber and its subsidiary companies. The auditor’s report on the financial statements for the financial year ended 31 December 2021 was similarly qualified on the same basis.

We conducted our audit in accordance with Singapore Standards on Auditing (SSAs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Chamber in accordance with the Accounting and Corporate Regulatory Authority (ACRA) Code of Professional Conduct and Ethics for Public Accountants and Accounting Entities (ACRA Code) together with the ethical requirements that are relevant to our audit of the financial statements in Singapore, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ACRA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.

Other information

Management is responsible for other information. The other information comprises the information included in the annual report and Statement of Council Members in page 1, but does not include the financial statements and our auditor’s report thereon.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.If, basedonthe work wehave performed, weconcludethat thereis a materialmisstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

SINGAPORE CHINESE CHAMBER OF COMMERCE & INDUSTRY

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF SINGAPORE CHINESE CHAMBER OF COMMERCE & INDUSTRY FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022

Responsibilities of management and council members for the financial statements

Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the provisions of the Act and FRSs, 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; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair financial statements and to maintain accountability of assets.

In preparing the financial statements, management is responsible for assessing the Chamber’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Chamber or to cease operations, or has no realistic alternative but to do so.

The Council Members are responsible for overseeing the Chamber’s financial reporting process.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SSAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with SSAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

 Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

 Obtain an understanding of internal control relevant to the audit 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 Chamber’s internal control.

 Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

 Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Chamber’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Chamber to cease to continue as a going concern.

SINGAPORE CHINESE CHAMBER OF COMMERCE & INDUSTRY

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF SINGAPORE CHINESE CHAMBER OF COMMERCE & INDUSTRY FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022

Auditor’s responsibilities for the audit of the financial statements (cont’d)

 Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with the council members regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Report on other legal and regulatory requirements

In our opinion, except for the matter as described in the basis for qualified opinion section of our report, the accounting and other records required by the Act to be kept by the Chamber have been properly kept in accordance with the provisions of the Act.

SINGAPORE CHINESE CHAMBER OF COMMERCE & INDUSTRY

BALANCE SHEET AS AT 31 DECEMBER 2022

The accompanying accounting policies and explanatory notes form an integral part of the financial statements.

SINGAPORE CHINESE CHAMBER OF COMMERCE & INDUSTRY

STATEMENT OF COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022

The accompanying accounting policies and explanatory notes form an integral part of the financial statements.

SINGAPORE CHINESE CHAMBER OF COMMERCE & INDUSTRY

STATEMENT OF CHANGES IN FUNDS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022

(In Singapore dollars)

The accompanying accounting policies and explanatory notes form an integral part of the financial statements.

SINGAPORE CHINESE CHAMBER OF COMMERCE & INDUSTRY

STATEMENT OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022

SINGAPORE CHINESE CHAMBER OF COMMERCE & INDUSTRY

STATEMENT OF CASH FLOWS (CONT’D) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022

(In

The accompanying accounting policies and explanatory notes form an integral part of the financial statements.

SINGAPORE CHINESE CHAMBER OF COMMERCE & INDUSTRY

NOTES TO THE FINANCIAL STATEMENTS – 31 DECEMBER 2022

1. CORPORATE INFORMATION

Singapore Chinese Chamber of Commerce & Industry (the “Chamber”) is a registered society, which is established and domiciled in Singapore.

The registered office and principal place of business of the Chamber is located at 9 Jurong Town Hall Road #04-01, Trade Association Hub, Jurong Town Hall, Singapore 609431.

The principal activities of the Chamber are to promote industrial, commercial and economic prosperity as well as the social welfare of Singapore. The principal activities of the subsidiary companies are disclosed in Note 7 to the financial statements. Related entities refer to entities where the Chamber’s council members are either the directors or members of those entities.

There have been no significant changes in the nature of these activities during the financial year.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of preparation

Except for Note 2.3, the financial statements have been prepared in accordance with Singapore Financial Reporting Standards (“FRS”) and the Societies Regulation under Societies Act 1966 (Section 34).

The financial statements have been prepared on a historical cost basis except as disclosed in the accounting policies below.

The financial statements are presented in Singapore Dollars (“$”).

2.2 Standards issued but not yet effective

The Chamber has not adopted the following standards and interpretations that have been issued but not yet effective:

Description

1 Jan 2023

Effective for annual periods beginning on or after Amendments to FRS 8: Definition of Accounting Estimates

The Council expects that the adoption of the other standards and interpretation above will have no material impact on the financial statements in the period of initial application.

2.3 Basis of consolidation

The accounting year of the Chamber and its subsidiary companies ends on 31 December. Consolidated financial statements have not been prepared for the Chamber in accordance with Singapore Financial Reporting Standard No. 110, Consolidated Financial Statements, as the Council Members are of the opinion that it is preferable in the interest of the members that the financial statements of the subsidiary companies be annexed to the financial statements of the Chamber as there are no practical benefits to be gained by the members of the Chamber.

SINGAPORE CHINESE

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)

2.4 Foreign currency

The financial statements are presented in Singapore Dollars, which is also the Chamber’s functional currency.

Transactions in foreign currencies are measured in the functional currency of the Chamber and are recorded on initial recognition in the functional currencies at exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the end of the reporting date. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.

Exchange differences arising on the settlement of monetary items or on translating monetary items at the end of the reporting period are recognised in profit or loss.

2.5 Property, plant and equipment

All items of property, plant and equipment are initially recorded at cost. Subsequent to recognition, property, plant and equipment other than freehold land is measured at cost less accumulated depreciation and any accumulated impairment losses.

Depreciation is computed on a straight-line basis over the estimated useful lives of the assets as follows:

Chamber building

- 50 years

Heritage gallery - 50 years

Furniture and fittings

Plant and equipment

Office/property equipment

Computer equipment

- 3 to 10 years

- 10 years

- 5 years

- 3 years

Assets under construction in property, plant and equipment are not depreciated as these assets are not yet available for use.

The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable.

The residual value, useful life and depreciation method are reviewed at each financial yearend, and adjusted prospectively, if appropriate.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on derecognition of the asset is included in profit or loss in the year the asset is derecognised.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)

2.6 Impairment of non-financial assets

The Chamber assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment assessment for an asset is required, the Chamber makes an estimate of the asset’s recoverable amount.

An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or group of assets. Where the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset isconsidered impaired and is written down to its recoverable amount.

Impairment losses are recognised in profit or loss in those expense categories consistent withinthe function of the impairedassets, except for assets that arepreviously revaluedwhere the revaluation was taken to other comprehensive income. In this case the impairment is also recognised in other comprehensive income up to the amount of any previous revaluation.

A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increase cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised previously. Such reversal is recognised in profit or loss unless the asset is measured at revalued amount, in which case the reversal is treated as a revaluation increase.

2.7 Subsidiary companies

A subsidiary is an investee that is controlled by the Chamber. The Chamber controls an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.

The investment in subsidiary companies is accounted for at cost less impairment losses.

2.8 Financial Instruments (a) Financial assets

Initial recognition and measurement

Financial assets are recognised when, and only when, the Chamber becomes a party to the contractual provisions of the financial instrument.

At initial recognition, the Chamber measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss.

Trade receivables are measured at the amount of consideration to which the Chamber expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third party, if the trade receivables do not contain a significant financing component at initial recognition.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)

2.8 Financial Instruments (cont’d)

(a) Financial assets (cont’d)

Subsequent measurement – Amortised cost

Financial assets that are held for the collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost. Financial assets are measured at amortised cost using the effective interest method, less impairment. Gains and losses are recognised in profit or loss when the assets are derecognised or impaired, and through amortisation process.

Derecognition

A financial asset is derecognised where the contractual right to receive cash flows from the asset has expired. On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the consideration received and any cumulative gain or loss that had been recognised in other comprehensive income is recognised in profit or loss.

(b) Financial liabilities

Initial recognition and measurement

Financial liabilities are recognised when, and only when, the Chamber becomes a party to the contractual provisions of the financial instrument. The Chamber determines the classification of its financial liabilities at initial recognition.

All financial liabilities are recognised initially at fair value plus, in the case of financial liabilities not at fair value through profit or loss, directly attributable transaction costs.

Subsequent measurement - Amortised cost

After initial recognition, financial liabilities that are not carried at fair value through profit or loss are subsequently measured at amortised cost using the effective interest rate method. Gains and losses are recognised in profit or loss when the liabilities are derecognised, and through the amortisation process.

Derecognition

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. On derecognition, the difference between the carrying amounts and the consideration paid is recognised in profit or loss.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)

2.9 Impairment of financial assets

The Chamber recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss and financial guarantee contracts. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Chamber expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.

ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL).

For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is recognised for credit losses expected over the remaining life of the exposure, irrespective of timing of the default (a lifetime ECL).

For trade receivables, the Chamber applies a simplified approach in calculating ECLs. Therefore, the Chamber does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The Chamber has established a provision matrix that is based on its historical credit loss experience, adjusted for forwardlooking factors specific to the debtors and the economic environment.

The Chamber considers a financial asset in default when contractual payments are 90 days past due. However, in certain cases, the Chamber may also consider a financial asset to be in default when internal or external information indicates that the Chamber is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Chamber. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows.

2.10 Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and fixed deposits that are readily convertible to known amount of cash and which are subject to an insignificant risk of changes in value.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

2.11 Provisions

Provisions are recognised when the Chamber has a present obligation (legal or constructive) as a result of a past event. It is probable that an outflow of resources embodying economic benefit will be required to settle the obligation and the amount of the obligation can be estimated reliably.

Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of economic resources will be required to settle the obligation, the provision is reversed. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

Provision for reinstatement cost

The provision for reinstatement cost from contractual obligation to restore the leased office to their original states is provided at the present value of expected costs to settle the obligation using estimated cash flows and is recognised as part of the cost of that particular asset. The cash flows are discounted at a current pre-tax rate that reflects the risks specific to the reinstatement liability. The unwinding of the discount is expensed as incurred and recognised in profit or loss as a finance cost. The estimated future costs of reinstatement are reviewed annually and adjusted as appropriate. Changes in the estimated future costs or in the discount rate applied are added to or deducted from the cost of the asset.

2.12 Employee benefits

(a) Defined contribution plan

The Chamber makes contributions to the Central Provident Fund (“CPF”) scheme in Singapore, a defined contribution pension scheme. CPF contributions are recognised as an expense in the period in which the related service is performed.

(b) Employee leave entitlement

Employee entitlements to annual leave are recognised when they accrue to employees. The estimated liability for leave is recognised for services rendered by employees up to the reporting date.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)

2.13 Leases

The Chamber assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

As a lessee

The Chamber applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Chamber recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets.

(i) Rights-of-use assets

The Chamber recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets, as follows:

Offices

Other equipment

1 to 6 years

1 to 5 years

If ownership of the leased asset transfers to the Chamber at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset.

The right-of-use assets are also subject to impairment. Refer to the accounting policies in Note 2.6 Impairment of non-financial assets.

(ii) Lease liabilities

At the commencement date of the lease, the Chamber recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include payments of penalties for terminating the lease, if the lease term reflects the Chamber exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognised as expenses (unless they are incurred to produce inventories) in the period in which the event or condition that triggers the payment occurs.

In calculating the present value of lease payments, the Chamber uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)

2.13 Leases (cont’d)

As a lessee (cont’d)

(ii) Lease liabilities (cont’d)

In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset.

(iii)

Short-term leases and leases of low-value assets

Chamber applies the short-term lease recognition exemption to its short-term leases of machinery and equipment (i.e., those leases that have a lease term of 12 months or less fromthe commencement date and do not contain apurchase option). It also applies the lease of low-value assets recognition exemption to leases of office equipment that are considered to be low value. Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight-line basis over the lease term.

As a lessor

Leases in which the Chamber does not transfer substantially all the risks and rewards incidental to ownership of an asset are classified as operating leases. Rental income arising is accounted for on a straight-line basis over the lease terms and is included in revenue in the statement of profit or loss due to its operating nature. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income. Contingent rents are recognised as revenue in the period in which they are earned.

2.14 Revenue recognition

Revenue is measured based on the consideration to which the Chamber expects to be the entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties.

Revenue is recognised when the Chamber satisfies a performance obligation by transferring a promised good or service to the customer, which is when the customer obtains control of the good or service. A performance obligation may be satisfied at a point in time or over time. The amount of revenue recognised is the amount allocated to the satisfied performance obligation.

(a) Revenue from grant and contribution which relates to an expense item is recognised in profit or loss over the period necessary to match them on a systematic basis to the costs that it is intended to compensate.

(b) The revenue from members’ subscriptions, entrance fees and endorsement fees are recognised to the extent that it is probable that the fees will be received.

(c) Management fees and shared secretariat services are recognised upon services rendered.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)

2.14 Revenue recognition (cont’d)

(d) Interest income is recognised using the effective interest method.

(e) Rental income arising from operating leases is accounted for on a straight-line basis over the lease term. The aggregate costs of incentives provided to lessees are recognised as a reduction of rental income over the lease term on a straight-line basis.

(f) Dividend income is recognised when the Chamber’s right to receive payment is established.

2.15 Taxes

(a)

Current tax

Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted at the end of the reporting period.

Current income taxes are recognised in profit or loss except to the extent that the tax relates to items recognised outside profit or loss, either in other comprehensive income or directly in funds. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

(b) Deferred tax

Deferred tax is provided using the liability method on temporary differences at the end of the reporting period between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax liabilities are recognised for all temporary differences, except:

- Where the deferred tax liability arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

- In respect of taxable temporary differences associated with investments in subsidiary companies, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)

2.15 Taxes (cont’d)

(b) Deferred tax (cont’d)

Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised except:

- Where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

- In respect of deductible temporary differences associated with investments in subsidiary companies, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax assets to be utilised. Unrecognised deferred tax assets are reassessed at the end of each reporting period and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax assets to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the end of each reporting period.

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity and deferred tax arising from a business combination is adjusted against goodwill on acquisition.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current income tax assets against current income tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

2.16 Government grants

Government grants are recognised at their fair value where there is reasonable assurance that the grant will be received and all attaching conditions will be complied with. Grants for the purchase of depreciable assets are offset directly against the cost of the specific asset. Grants received to meet operating expenses are recognised as income over the period necessary to match with the related expenses.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)

2.17 Contingencies

A contingent liability is:

(a) a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Chamber; or

(b) a present obligation that arises from past events but is not recognised because:

(i) It is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or

(ii) The amount of the obligation cannot be measured with sufficient reliability.

A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Chamber.

Contingent liabilities and assets are not recognised on the balance sheet of the Chamber, except for contingent liabilities assumed in a business combination that are present obligations and whose fair values can be reliably determined.

3. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS

The preparation of the Chamber’s financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the end of each reporting period. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in the future periods. The Chamber is of the opinion that there is no significant judgement made in applying accounting policies and no estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial period.

SINGAPORE CHINESE CHAMBER OF COMMERCE & INDUSTRY

NOTES TO THE FINANCIAL STATEMENTS – 31 DECEMBER 2022

4.

5.

SINGAPORE CHINESE CHAMBER OF COMMERCE & INDUSTRY

NOTES TO THE FINANCIAL STATEMENTS – 31 DECEMBER 2022

6. INCOME TAX

The reconciliation between tax expense and the product of accounting surplus multiplied by the applicable tax rate for the years ended 31 December 2022 and 2021 are as follows:

7.

As at 31 December 2022, the Chamber has unutilised approved donations and unutilised losses amounting to approximately $100,000 (2021: $100,000) and $19,895,044 (2021: $14,682,837).

The unutilised approved donations and unutilised losses are available for set-off against future taxable profits of the Chamber, subject to compliance with the provisions of Sections 23 and 37 of the Singapore Income Tax Act 1947 and agreement of the Comptroller of Income Tax.

The subsidiary companies as at 31 December 2022 and 2021 are:

The shares in the subsidiary companies are registered in the name of The Financial Board of the Singapore Chinese Chamber of Commerce which was held in trust for the Chamber.

SINGAPORE CHINESE CHAMBER OF COMMERCE & INDUSTRY

NOTES TO THE FINANCIAL STATEMENTS – 31 DECEMBER 2022

8.

SINGAPORE CHINESE CHAMBER OF COMMERCE & INDUSTRY

NOTES TO THE FINANCIAL STATEMENTS – 31 DECEMBER 2022

8. PROPERTY, PLANT AND EQUIPMENT (cont’d)

The leasehold land at Hill Street and the freehold property at 12 Tai Gin Road are held by The Financial Board of the Singapore Chinese Chamber of Commerce in trust for the Chamber.

As the Chamber did not incur any cost on the acquisition of the 999-year leasehold land at Hill Street (approximately 2,300 sq m) on which the Chamber building is erected and on the freehold property at 12 Tai Gin Road (approximately 2,800 sq m), no value has been included in the financial statements in respect of these properties.

The freehold land is a plot of State Land Resurvey Lot 7652p Mukim 17 (previously known as Lot 5788pt Mukim 17) acquired for the extension of Sun Yat Sen Nanyang Memorial Hall. Prior consent must be obtained from the Minister before the sale, transfer, or mortgage of the land.

During the year, the Chamber acquired property, plant and equipment with an aggregate cost of $10,788,447 (2021: $10,585,687) of which cash payments of $9,673,507 ($10,585,697) were made to purchase the property, plant and equipment. The outstanding amounts of $1,114,940 (2021: $Nil) were included in payables.

9. LEASES As a lessee

(a) The Chamber has entered into commercial property leases for office units in TA Hub and Peninsula Plaza. These non-cancellable leases have remaining lease terms of between 3 months to 39 months.

(b) The Chamber has entered into lease contracts for photocopiers and printers. The noncancellable leases have remaining lease terms of 35 months.

The Chamber also has certain leases of machinery with lease terms of 12 months or less and leases of office equipment with low value. The Chamber applies the ‘short-term lease’ and ‘lease of low-value assets’ recognition exemptions for these leases.

Set out below are the carrying amounts of right-of-use assets recognised and the movements during the period:

SINGAPORE CHINESE CHAMBER OF COMMERCE & INDUSTRY

NOTES TO THE FINANCIAL STATEMENTS – 31 DECEMBER 2022

9. LEASES (cont’d) As a lessee (cont’d)

Set out below are the carrying amounts of lease liabilities and the movements during the period:

The following are the amounts recognised in profit or loss:

The Chamber had total cash outflows for leases of $805,152 in 2022 (2021: $910,531).

As lessor

The Chamber has entered into commercial property sub-leases on TA Hub’s office units. These non-cancellable leases have remaining terms of between 3 – 72 months (2021: 3 – 23 months).

The sublease of certain office units is classified as operating lease. The Chamber continues to recognise the right-of-use asset resulting from the head lease. Future minimum rentals receivables under non-cancelling operating leases as at 31 December are as follows:

SINGAPORE CHINESE CHAMBER OF COMMERCE & INDUSTRY

NOTES TO THE FINANCIAL STATEMENTS – 31 DECEMBER 2022

9. LEASES (cont’d) As lessor (cont’d)

The sublease of certain office units is classified as finance lease. The Chamber recognised a finance lease receivables.

Future minimum rentals receivables under non-cancelling finance leases as at 31 December are as follows:

10. OTHER ASSETS

Other assets pertain to heritage assets purchased by the Chamber and are measured at cost less subsequent impairment losses, if any. 11.

SINGAPORE CHINESE CHAMBER OF COMMERCE & INDUSTRY

NOTES TO THE FINANCIAL STATEMENTS – 31 DECEMBER 2022

11. RECEIVABLES (cont’d)

Deferred rent receivables represent the portion of rental and service charges arising from unexpired rent-free period which is apportioned over the period of the leases.

Other receivables and dividend receivable are unsecured, non-interest bearing and are receivable on demand in cash and cash equivalents.

Receivables are denominated in Singapore dollars.

12. AMOUNTS DUE FROM SUBSIDIARIES AND RELATED ENTITIES

Amounts due from subsidiaries and related entities are non-trade in nature, unsecured, noninterest bearing, repayable on demand, and are to be settled in cash.

13. CASH AND CASH EQUIVALENTS

Cash and cash equivalents included in the statement of cash flows comprise the following balance sheet amounts:

Fixed deposits placed with financial institutions have maturity ranging from 1 - 12 months (2021: 1 - 12 months) from the end of the financial year, with interest rates ranging from 0.08% to 1.36% (2021: 0.15% to 0.40%) per annum.

Cash and bank balances are denominated in Singapore dollars.

SINGAPORE CHINESE CHAMBER OF COMMERCE & INDUSTRY NOTES TO THE FINANCIAL STATEMENTS – 31 DECEMBER 2022

14. MEMBERSHIP FEES RECEIVED IN ADVANCE

15.

Membership fees received in advance primarily relates to the Chamber’s obligation to transfer services to the customers for which the Chamber has received consideration for membership period beyond the balance sheet date.

Provision for reinstatement cost refers to the estimated cost of restoring the office premises to its original condition upon expiry of lease. The estimate has been on the basis of quotation obtained from external contractor.

16. CAPITAL RESERVE

In 1997, the properties at 21-31 Telok Ayer Street (odd numbers), or Lot 569L were transferred to Chinese Chamber Realty Pte Ltd at a consideration of $145 million in exchange for 145 million shares in Chinese Chamber Realty Pte Ltd.

SINGAPORE CHINESE CHAMBER OF COMMERCE & INDUSTRY

NOTES TO THE FINANCIAL STATEMENTS – 31 DECEMBER 2022

17. RELATED PARTY TRANSACTIONS

(a)

SINGAPORE CHINESE CHAMBER OF COMMERCE & INDUSTRY

NOTES TO THE FINANCIAL STATEMENTS – 31 DECEMBER 2022

17. RELATED PARTY TRANSACTIONS (cont’d)

(a)

Transactions with subsidiaries and related Entities (cont’d)

(b) Transactions with council members, firms or corporations in which certain council members are members, directors or substantial shareholders

(c) Transactions with corporations in which certain council members are directors

SINGAPORE CHINESE CHAMBER OF COMMERCE & INDUSTRY

18. CAPITAL COMMITMENTS AND CONTINGENT LIABILITIES

Capital expenditure contracted for as at the end of the reporting period but not recognised in the financial statements are as follows:

Capital commitments

Capital commitments in respect of refurbishment plan on building at 47 Hill Street

Matter relating to refurbishment costs at 47 Hill Street

As at the date of this report, there were refurbishment work claims at 47 Hill Street amounted to $1,983,000 that was not recorded in the financial statement for the year ended 31 December 2022. Finalisation of the claim is subject to on-going discussion and agreement with the main contractor.

19. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Chamber is exposed to financial risks arising from its operations and the use of financial instruments. The key financial risks include credit risk, liquidity risk and interest rate risk. The Council members review and agree on policies and procedures for the management of these risks, which are executed by the management.

The following provides details regarding the Chamber’s exposure to the above-mentioned financial risks and the objectives, policies and processes for the management of these risks.

Credit risk

Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default on its obligations. The Chamber’s exposure to credit risk arises primarily from receivables and amount due from related party. Forother financial assets (including cash and cash equivalents), the Chamber minimises credit risk by dealing exclusively with high credit rating counterparties.

The Chamber has policies in place to ensure that rental of premises is made to tenants with satisfactory credit history. For the credit risk relating to the amounts due from tenants, the Chamber has addressed this risk by charging rental deposits. In addition, receivable balances are monitored on an ongoing basis with the result that the Chamber’s exposure to bad debts is not significant.

At reporting date, there were no significant concentrations of credit risk. The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the balance sheet.

SINGAPORE CHINESE CHAMBER OF COMMERCE & INDUSTRY

NOTES TO THE FINANCIAL STATEMENTS – 31 DECEMBER 2022

19. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (cont’d)

Liquidity risk

Liquidity risk is the risk that the Chamber will encounter in meeting financial obligations due to shortage of funds. The Chamber’s exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities. The Chamber’s objective is to maintain a balance between continuity of funding and flexibility by monitoring and maintaining a level of cash and bank balances deemed adequate by the management to finance the Chamber’s operations and mitigate the effects of fluctuations in cash flows.

Analysis of financial instruments by remaining contractual maturities

The table below summarises the maturity profile of the Chamber’s financial assets and liabilities at the reporting date based on contractual undiscounted repayment obligations.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of the Chamber’s financial instruments will fluctuate because of changes in market interest rates. The Chamber’s exposure to interest rate risk arises primarily from their fixed deposits with financial institutions.

The sensitivity analysis for changes in interest rate is not disclosed as the effect on the profit or loss is not considered significant.

SINGAPORE CHINESE CHAMBER OF COMMERCE & INDUSTRY NOTES TO THE FINANCIAL STATEMENTS – 31 DECEMBER 2022

20. FAIR VALUE OF FINANCIAL INSTRUMENTS

The fair value of a financial instrument is the amount at which the instrument could be exchanged or settled between knowledgeable and willing parties in an arm’s length transaction, other than in a forced or liquidation sale.

Financial instruments whose carrying amounts approximate fair value

Management has determined that the carrying amounts of cash and cash equivalents and current financial assets and liabilities, based on their notional amounts, reasonably approximate their fair values because these are mostly short-term in nature.

The provision for reinstatement cost reasonably approximates its fair value as the time value is not significant.

21. FUND MANAGEMENT

The Chamber’s objectives when managing its funds are:

(a) to safeguard and maintain adequate working capital to continue as a going concern.

(b) to develop its principal activities over the longer term.

No changes were made in the objectives, policies or processes during the years ended 31 December 2022 and 31 December 2021.

22. AUTHORISATION OF FINANCIAL STATEMENTS

The financial statements of the Chamber for the year ended 31 December 2022 were authorised for issue by the Council on 31 March 2023.