Singapore SME 500 Ranking
Definitions & Criteria

The Singapore SME 500 companies are selected and ranked based on their audited financial figures, i.e. Sales/Turnover or Net Profit for financial period ending between 1 June 2008 and 31 May 2009. Comparative financial information is extracted from the companies' latest financial statements.

1. Honour Roll
The Honour Roll highlights Singapore companies ranked within the top 10 by Sales/Turnover for the past 3 consecutive years.

2. Sales/Turnover
One of the most fundamental measure of a company’s financial performance, representing total Sales/Turnover or Gross Operating Income as reported by the company in its financial statements. The Sales/Turnover figures for individual companies include sales to related or holding companies. The revenue from banks and other financial institutions include interest and non-interest incomes. Figures for the insurance companies include premium incomes and other investment income.

3. Net Profit
Net Profit or Profit/Loss after tax includes Profit/Loss of subsidiaries and associate companies but excludes the adjustment for minority interests. Figures in parenthesis “( )” indicate losses.

4. Total Assets
Total Assets include current assets, fixed assets, investments and amounts owing by related or holding companies at its fiscal year-end. Expenditure carried forward, deferred expenditure, goodwill and identifiable intangibles such as patents, trademarks and mastheads are excluded.

5. Total Liabilities
Total Liabilities include all current and long-term liabilities at a company’s year-end.

6. Shareholders’ Funds
This is the sum of all paid-up capital, share premium, retained earnings, capital reserves and other reserves at a company’s year-end but excludes minority interests. Currency translation reserves are included as part of the Shareholders’ Funds.

7. Group Consolidated Account
Companies are ranked in terms of consolidated performance, if available. This includes both the performance of the company and its subsidiaries. All inter-company transactions are eliminated upon consolidation.

8. Holding Vs Subsidiary Companies
To ensure that the ranking list is as comprehensive and complete as possible, all individual companies who qualify for this ranking and whose financial statements are available, are ranked. Subsidiary companies are therefore evaluated and ranked as a separate legal entity from its holding companies.

9. Annualisation of Figures
Financial information stated are in respect of the company’s financial year ending within 1 June 2007 - 31 May 2008. For changes in accounting period, annualised Sales/Turnover and Net Profit (After Tax) figures will be taken into consideration. Shareholders’ equity and assets are not annualised. (refer examples 1 & 2)

Below are two examples on the computation :

Example 1 - Company with reported Sales/Turnover and Net Profit (After Tax) for over 18 months, will be annualised by using the fraction 12/18 :

	Period from 1 July 2006 to 31 December 2007 ($’000)	Annualised Value For Ranking (Figures Adjusted to 12 months) ($‘000)
Sales/Turnover	150,000	100,000 [i.e. 150,000 x 12/18]
Net Profit	60,000	40,000 [i.e. 60,000 x 12/18]

Example 2 - Company which has changed its accounting period from March to December such that there are two accounting periods in 2007, i.e., year ended 31 March 2007 and period ending 31 December 2007 (9 months), will be ranked on the following basis:

	Year ended 31 March 2007 ($‘000)	Period ended 31 December 2007 ($‘000)	Annualised Value For Ranking (Figures Adjusted to 12 months ($‘000)
Sales/Turnover	50,000	40,000	52,500
Net Profit	10,000	9,000	11,500
Shareholders’ Funds	20,000	22,000	22,000
Total Assets	60,000	56,000	56,000

10. Current and Previous
Financial information is presented under two columns, namely, ‘Current’ and ‘Previous’. Information reflected under ‘Current’ refers to figures for financial year ending between 1 June 2007 and 31 May 2008. Information reflected under ‘Previous’ refers to the comparative information presented in the financial statements for the year ending between 1 June 2006 and 31 May 2007.

11. Nationality
‘Nationality’ refers to the place of incorporation of a company’s ultimate holding company.

12. Business Classification With Industry Averages
The business classification of a company is determined in accordance to its principal activity in which it generates the main bulk of its Sales/Turnover and Net Profit.
Industry Averages for Peer groups are calculated by averaging the Sales/Turnover and Net Profit figures for all companies listed under a particular business classification.

13. Percentage (%) Change from Previous
This compares a company’s ‘Current’ against its ‘Previous’ performance in percentage (%) terms. Percentage change from the previous is not applicable to companies, which have experienced a negative to positive growth and vice versa. (refer to example 3)

Example 3 - Company’s ‘Current’ against its ‘Previous’ performance in percentage (%) terms.

	Current 2009 ($‘000)	Previous 2008 ($‘000)	Percentage (%) Change from 2008
Company A	50,000	25,000	100
Company B	50,000	(25,000)	NA
Company C	(50,000)	25,000	NA

14. Market Capitalisation
This examines the worth of public listed companies as at 22 October 2008, the latest possible cut-off date in respect to the publication date of this ranking. It measures the company’s worth according to the Stock Exchange of Singapore as at 22 October 2008. The figures shown were derived by multiplying the number of ordinary shares outstanding by the price per ordinary share (last traded price in Singapore Dollar at the close of business on 22 October 2008).

15. Earnings Per Share
Earnings per share (EPS) for public listed companies is calculated by dividing the net profit or loss for the period attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the same period. For comparison purposes, EPS is shown for both the current and previous years. EPS figures are extracted from the company’s audited accounts and computed on the basis of profit after extraordinary items. Fully diluted EPS figures, if available, are included in the publication.

16. Listing of Public Listed Companies with Breakdown of Turnover by Geographical Segments
This section lists the turnover breakdown of public listed companies within the following regions – Singapore, Asian, Africa, Americas, Europe, Middle East, Oceania, and Others as presented in their respective annual reports. Readers are to note that figures presented in this section may not be presented in a consistent fashion as public listed companies do not report the breakdown of their turnover within fixed regions. For example, in instances where an annual report combines two or more of the above regions together, these combined figures will be reflected under the “Others” category.

17. Qualifications in Audited Financial Reports
Companies included in the rankings, other than the Sales/Turnover & Sales/Turnover related categories, comprise of companies for which there are no qualifications expressed in the Auditors’ Reports.

18. DP Credit Rating
Section 6 lists all DP1 Credit-Rated companies as at December 2008. DP1 is the highest band attainable for a company, rated through the DP Credit Rating approach. DP Credit Rating consists of eight scales ranging from the highest rating of DP1 to DP8 using the acclaimed and globally accepted quantitative model of expected probability of default. The rating measures the probability of default of a company. A company rated DP1, for instance, will have a lower probability of default than a company rated DP8. The model is sensitive to changes in the financial market and therefore more reflective and responsive than a static model which simply makes use of past historical data. DP Credit Rating excludes financial institutions and companies from the property sector.

19. Return On Equity (ROE)
ROE is calculated by taking a year’s Net Profit and dividing it by the Shareholder’s Equity for that year. It is not applicable if the company has incurred a loss and/or has negative shareholders’ fund.

20. Profit Margin
A ratio of profitability calculated as Net Profit divided by Sales/Turnover. Profit Margin is displayed as a percentage, e.g. a 20% profit margin means the company has a net income of $0.20 for each dollar of sales.

21. Return on Assets (ROA)
ROA is calculated by dividing a company’s Net profit by its Total Tangible Assets. It is displayed as a percentage.

22. Foreign Currency Translation
All figures reported in foreign currencies are converted to Singapore dollars at their respective average exchange rate for the ranking period. For example, for companies with December 2007 financial year ending, the average exchange rate is computed by adding all the month end exchange rates from January 2007 to December 2007 and then divided by 12 to determine the average exchange rate.