Panel Discussion: India #Brunei ICT Scope and Potential for Collaboration

// February 2nd, 2010 // No Comments » // Business

Earlier this week I was invited by the High Commission of India, Brunei Darussalam to be a member of a small 7-man panel.

My scope was to present the Infocom Federation Brunei (IFB) profile and to talk about potential areas of collaboration between India and Brunei – whilst being mindful that the other Bruneian speakers would also touch on these areas of collaboration.

(Slides & speaking notes after the break)

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CIMB is hiring for 3 positions in #brunei. CIMB is ranked #4 in M&A League table.

// January 31st, 2010 // No Comments » // Business

I spotted a job ad on Page 57 of the weekend Borneo Bulletin which I thought was worth sharing.

CIMB Group is hiring for: Senior Manager (3-5 years work experience, Master degree advantageous), Executive (1-3 years work experience, fresh graduates encouraged) and Assistant Executive (1-2 years experience with a Diploma).

FYI, CIMB (Commerce International Merchant Bankers Berhad) is the 5th largest bank in South East Asia by total assets. I think the job posting is blog worthy because:

(More after the break …)

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Google’s Nexus One smartphone – not your ordinary innovation

// January 10th, 2010 // No Comments » // Business

Owner of copyright: Schierlitz & Budewig, Tom Schierlitz photographer.

To much fanfare, Google released the Nexus One smartphone earlier this month. Some may say that the Nexus One doesn’t compare against the iPhone, and I have to respectfully disagree on that point.

Don’t get me wrong – I’m a big fan of the Apple iPhone + iTunes model. I think Apple has done a really good job in delivering an excellent end-to-end consumer smartphone experience. Integration with iTunes  and the App store, the intuitive user interface and the form factor have all set the benchmark by which all other smartphones are compared to.

But the real genius behind the Nexus One phone is not in the hardware or the software. The real genius is in the business model : the Google Store and the power of Open Source.

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TBTF – Bear Sterns collapse and Syariah compliance

// December 31st, 2009 // No Comments » // Business

While on holiday, I bought the book “Too Big To Fail” by Andrew Ross Sorkin. I’m about one-fifth of the way through the book. Really gripping stuff, but I wish I had a better way of remembering the names of the key players. Maybe I should put the profiles of the ensemble cast in an Appendix, along with their photos (haha!).

On Monday I recalled a comment from the first Chapter, and recounted it to one of my colleagues at work. Apparently, sources on Wall Street have it that a group of short-sellers maliciously manipulated Bear Sterns’s share price and reputation. This eventually resulted in the merger of Bear Sterns with JP Morgan in a stock swap of $2 per share, down from $172 per share a year earlier. The $2 offer was revised to $10 per share, but that is still less than 10% of the $172 high.

I recounted this story to my colleague because she attended a recent two-day seminar conducted by the Centre for Islamic Banking, Finance and Management (CIBFM) on Syariah compliant financial services, and she had briefed me earlier on some of the materials presented during the seminar.

From what we learned, key in determining if a transaction is “Syariah compliant” is whether it adheres to a set of 5 key principles:

1. Avoidance of “Riba” – I think of this as “Usury“. Whether “profit sharing” agreements in murabaha (profit-sharing) transactions really represent “Interest” on debt (where a debt is a present obligation of the entity arising from past events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits, per the IASB Framework) … ah, that is the topic of a whole separate series of blog posts!
2. Avoidance of “Gharar” – A deceptive sale with uncertain payoffs, benefiting one party at the expense of the other
3. Avoidance of “Maysir” – Games of chance and gambling
4. Avoidance of transactions involving prohibited commodities – all that is “Haram” e.g. Alcohol, drugs, etc.
5. Contracts must have mutual consent, purpose and motive – quite similar to how in common-law systems, the key requirements for the creation of a contract are offer & acceptance, consideration, intention to create legal relations, legal capacity and formalities.

So I was thinking … between running a modern financial services firm and maintaining Syariah compliance … how do we reconcile these two needs? Are they congruent? Are they competing?

More after the break.

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IFRS for SMEs – What does the future hold for Brunei?

// December 21st, 2009 // No Comments » // Business

2 weeks ago at the sidelines of the AFA16 conference, Izam Said asked me for my thoughts on International Financial Reporting Standards (IFRS) adoption in Brunei.

Over the last two weeks I’ve had more thoughts on IFRS and some thoughts on a potential way forward for us in Brunei.

More after the break.

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Guest Post on re:The Auditors

// December 16th, 2009 // No Comments » // Business

Francine McKenna and I correspond over Twitter on various topics covering Corporate Governance and the “Expectations Gap” between auditors and the stakeholders they serve. She has more than twenty years of experience in the consulting and professional services environment including tenures in both the US and abroad at PwC, KPMG/BearingPoint, JP Morgan and Jefferson Wells/Manpower. She is a freelance writer and a frequent speaker in and out of the accounting/audit world.

Francine invited me to author a guest post on her blog, “re: The Auditors“. She writes and speaks passionately, authoritatively and most importantly, critically about the audit profession and the auditor’s role in capital markets.

I jumped at the chance to author a guest post on her blog, and this is the result. It’s a summary of the first Plenary session at AFA16 where I was invited to present a paper.

http://retheauditors.com/2009/12/15/a-guest-post-from-bruneis-pengiran-izam/

If you’re an accountant, I heartily recommend adding her RSS news feed to your newsreader and keep up to date with the latest developments that affects all accountants everywhere.

Financial scandals – Have auditors succumbed to greed?

// December 10th, 2009 // 1 Comment » // Business

This week, we hosted the 16th ASEAN Federation of Accountants confernce here in Brunei and I was very pleased when I received an invitation from BICPA and the organising committee to present a paper on the above topic.

I’ve uploaded my slides to slideshare.net, and I also attach high res slides after the break below.

Overbudget & overdue – TAIB Airport Mall

// November 23rd, 2009 // No Comments » // Business

In the ongoing series of blog posts about TAIB …

… well, I’ll just link this article on Brunei.fm and you can check it out yourself.

Brunei’s rice self-sufficiency targets

// November 23rd, 2009 // No Comments » // Business

I read two interesting blog posts at Brunei Resources on Brunei’s rice self-sufficiency targets. The posts discuss the state of rice imports, hovering at around 30,000 metric tonnes per annum and of the feasibility of Brunei reaching self-sufficiency of rices.

So I thought to run a short analytic on it … based on data From Brunei.fm and agriculture.gov.bn:

Current –> 884 metric tonnes of production vs. 1,356 hectares area under paddy 2008 = 0.65 tonnes per hectare
Short term goal 2010 (13 months from now) –> 5,800 metric tonnes of production vs. 2,360 hectares  = 2.46 tonnes per hectare. [Note that the 2,360 hectares doesn't reconcile to 4,904 ha new + 1,356 ha existing land area on page 19 of the report]
Medium term goal 2015 (5 years from now) –> 18,000 metric tonnes of production vs. 5,360 hectares  = 3.36 tonnes per hectare.

More analysis after the break:

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TAIB financial statements 31 December 2008

// November 8th, 2009 // No Comments » // Business

The accounts for Perbadanan Tabung Amanah Islam Brunei were published in the Weekend Borneo Bulletin (pages 55-58), for the year ended 31 December 2008. Part of my savings and investment portfolio is squirrelled away in TAIB Deposit Certificates (TDC’s) and I’m always interested to read about how my investments are doing.

As I was skimming through the accounts, I thought:

1. “Dividends” of $27m were paid out during the year, on annual profits of $44m. That’s a 61% payout ratio
   These are paid out to customers – the $1,514m deposits from customers (see note #9)
   So from the “Body” point of view – the customers = shareholders, and dividends are payable to them.
2. Accounts are prepared for “true and fair view” of the “Body”. The notes mention this is in accordance with “generally accepted accounting principles in Brunei Darussalam”.
   It took a while for me to figure out – but the reason for (1) above is because these principles are “modified to comply with the principles of Syariah”.
3. The return of 1% to 2.5% to deposit holders (calculated on average daily balance) is better than inflation rates of 0.4% in Brunei.
4. The Syariah Advisory Committee opines that the operations of TAIB have been conducted with the Syariah principles, to the best of their knowledge.
5. $16m has been provided for the diminution in value of unquoted investments. The provision increases by $12m this year, on a b/f balance of $76m investments. $12m is nearly half of the 2009 “dividends” payout.
   
6. $3m of the $12m “Building” fixed assets are Reclassified in the year to Leasehold properties, renovations and computer equipment. Interestingly, $500,000 (to the Dollar!) is reclassified as Computer Equipment. I’d be interested to see a $500,000 investment in Computer Equipment.

   Just as interesting, how did the $12m get classed as “Buildings” in the first place when a cool half a million (to the Dollar yo!) was Computer Equipment.

7. Audit fee of $75k, is 3 times what the previous auditors were billing. Goes to show that not all audits are won on the back of “Who lodged the cheapest possible bid”.
   This year TAIB spent$21k on consultancy fees, which is lower than the $133k on consultancy fees spent in prior year.
   In a year where TAIB invests $92m in unquoted investments, where are the due diligence and legal fees? Unless they’re not written off in the year and are included in the asset on the balance sheet? I’d be interested to know more about the Governance, Risk management and Compliance structures in place to guard against further write offs in unquoted investments.
8. $424k is charged to the P&L in the year for “Provision for retirement benefits”, and $176k in the year prior.
   I’m a little confused because in the accounts, under Notes for “Employee benefits costs”, the accounts only mention that TAIB contributes to Employee’s Trust Fund (TAP) which is a Defined Contribution scheme.  Because the Employer’s contribution rate of 5% has not changed from 2007 to 2008, does this mean that Employees at TAIB increased 2.4x fold over prior year? Or maybe salaries were increased 2.4x over prior year?

   Or maybe TAIB has a defined benefit scheme for some employees, and the charge to the provision of $424k in the year is to cover pension liabilities for their future retirement? If so – that’s a sweet deal. And one that may not be fully disclosed in the accounts.

More after the break.

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