Regulation 26

To decide whether an applicant satisfies Article 19(4)(a)(iii) in relation to his or her service as the chief executive of a company, perform the following steps.

First, identify all the periods during which the applicant was the chief executive of the company.

Second, identify the financial statements to be used for each of those periods as follows:

Third, find out the amount of profit after tax, as defined in regulation 27, that the company makes for each of the financial years or financial periods covered by the financial statements selected.

Fourth, if the amounts of profit after tax for those financial years and financial periods are presented in different currencies, convert every amount that is presented in a foreign currency to Singapore dollars in accordance with regulation 28.

Fifth, if the applicant served as the chief executive of the company for only a part of any of those financial years or financial periods, pro‑rate the amount of profit after tax made by the company for that financial year or financial period according to regulation 29.

Sixth, add the amount of profit after tax the company makes for the periods identified under paragraph (2), after any conversion under paragraph (5) or pro‑ration under paragraph (6).

If the step in paragraph (7) yields a positive number, the applicant satisfies Article 19(4)(a)(iii) in relation to the company.IllustrationAt the date of the writ, the applicant’s entire period of service as the chief executive of a company was from 1 February 2014 to 31 March 2017. The company’s financial year ends on 31 December. The company has reliable audited annual financial statements for the financial years that ended on 31 December 2014, 31 December 2015 and 31 December 2016, respectively. The applicable financial statements showed the company’s profit after tax for the full financial years to be $5 million, $12 million and $7 million, respectively. At the date of the writ, the company, which is listed, had also announced its unaudited financial statements for the quarter that ended on 31 March 2017, which showed a loss after tax of $5 million. Applying the step in paragraph (6), the applicant served as chief executive for 334 days out of 365 days in the financial year that ended on 31 December 2014, and the pro‑rated profit after tax for this period of service would be approximately $4.58 million (being $5 million × 334 days/365 days). Applying the step in paragraph (7), the amount yielded would be approximately $18.58 million ($4.58 million + $12 million + $7 million – $5 million), a positive number, and the applicant satisfies Article 19(4)(a)(iii).