WDA in Review 05/06

WDA in Review 05/06

vision:a resilient, skilled andagile workforce for a vibrantsingapore economy.mission:to enhance the employabilityand competitiveness of employeesand job seekers, and to build aworkforce that meets the changingneeds of singapore’s economy.

contentsmanpower minister evaluatesWDA’s chairman reviewsWDA’s board of directorsWDA’s commiteesskills development fund advisory committeelifelong learning endowment fund advisory councilWDA’s chief executive reflectsWDA’s management teamWDA’s organisation structure020408101214161819in the spotlight:highlights of achievementsbuilding a CET infrastructurepursuing outcomeshelping vulnerable workerspromoting lifelong learningbuilding the organisationthe big picture:future directions & developmentsstrengthening the CET infrastructuredriving quality outcomestackling structural unemploymentpursuing organisation excellenceperformance insight:fund achievements & financial highlightsskills development fundlifelong learning endowment fund2023273135394245475052545668glossary 72financial statements 73

WDA in Review 05/06manpower minister evaluates

manpower minister evaluatesThe Singapore economy did well in 2005, growing by 6.4% over the previous year. Totalemployment increased by 113,300, the highest number since 1997. For the first half of 2006,81,500 jobs were created. Singaporeans can look forward to more job opportunities but mustalso adjust to continuing challenges to stay ahead.Firstly, competition will intensify. China and India are growing rapidly. Other countries in theregion also want to attract investments and promote their exports. We need to remake andrestructure our economy to retain our competitiveness. Our workers must continuously upgradetheir skills to support industries with greater value add and productivity.Secondly, lower cost labour in other countries will depress the wages of unskilled workers here.As a small country, we need to keep our economy open to trade, capital and talent. But we mustalso help vulnerable workers cope with economic restructuring.Thirdly, our population is ageing. Singaporeans can and want to work longer, to enhance theirretirement adequacy and to continue to contribute to the workforce. We need businesses tomake more productive use of older workers.> 03The Singapore Workforce Development Agency (WDA) is at the forefront of tackling thesechallenges with workers. Together with the National Trades Union Congress (NTUC) and otherpartners, WDA has developed the Singapore Workforce Skills Qualifications (WSQ) system withits set of training programmes to upgrade the skills of our workers across key sectors of oureconomy. It has implemented the Job Re-creation Programme (JRP) with NTUC to widen thepool of jobs available to low wage workers and to raise the value of these jobs. It is also reachingout to companies to encourage them to adopt mature worker friendly practices. By helping totackle these structural challenges, WDA is making a positive difference to the Singapore economyand the lives of our workers.Dr Ng Eng Henminister for manpower

WDA in Review 05/06WDA's chairman reviews

WDA’s chairman reviewsWDA was formed in 2003 to enhance the competitiveness and employability of employees andjob seekers. Much effort in the first two years went into building a strong foundation to supportour mission, and I am pleased to report that we have made significant progress to date.As the economy restructured and recovered, we reviewed and re-oriented our programmes overthe past year to better tailor them to the needs of workers. Learning from the experiences of thefirst two years, we reorganised ourselves and adopted an outcome-centric and focused approachin programme development and implementation. This has enabled us to better identify and bridgeskills gaps to raise industry competitiveness, and help vulnerable workers find and keep jobs.Raising Industry CompetitivenessWDA has made significant progress in developing a coherent and robust adult learning infrastructurefor workers to upgrade their skills or transit into new industries. The centrepiece of our adultlearning infrastructure is the WSQ system which was officially launched in 2005. WSQ is acompetency and qualifications system that offers adults the opportunity to be trained andrecognised for their skills and competencies. This will raise their employability and enhance theirlateral or upward career mobility.> 05The WSQ system was successfully rolled out in the Retail, Training and Finance industries in2005. WDA is setting aside $100 million to accelerate the development and implementation ofWSQ in more sectors, including Tourism, Food & Beverage (F&B), Infocomm, Precision Engineering,Security, Landscaping, Community and Social Services, and Creative, over the next few years.As a core part of infrastructure development, we will establish best-in-class training institutionsin these sectors to ensure quality delivery of a comprehensive suite of WSQ courses that remains

WDA in Review 05/06relevant and tied to employment. The first of such institutions - the Singapore Institute of RetailStudies (SIRS) - was launched in 2005. We hope that these institutions will become major iconsin the job training landscape.Raising service quality and the global competitiveness of Singapore’s services sector will continueto be a key thrust. This journey towards achieving service excellence and developing a strongservice culture in Singapore will take many years, maybe a whole generation. WDA is one of thelead secretariat of Go-the-Extra-Mile for Service (GEMS) movement - a national movementlaunched in October 2005 - to boost service quality and make it a competitive advantagefor Singapore.Helping Vulnerable WorkersAs our nation progresses, we need to help those who are at risk of being left behind to seek outopportunities. Through our Distributed CareerLink Network (DCN), WDA has placed more than27,000 job seekers, mostly older and lower skilled, in 2005. The Employability Skills System(ESS) was piloted in 2004 to raise the employability of workers, particularly lower skilled workers,by improving their foundation and generic skills which are portable across all industries. Today,more than 6,000 workers have been trained under ESS. About 38,000 workers went throughvarious WDA-funded programmes in 2005, of whom 75% were lower skilled workers and abouthalf were mature workers.Together with our partners, WDA will ramp up our job re-creation efforts to provide more jobopportunities for low wage workers by enhancing the job worth, image and prospects of existingjobs. In 2006, we introduced the ADVANTAGE! scheme to encourage employers to hire, train

WDA’s chairman reviewsand retain older workers. As at end March 2006, more than 40 companies have come on boardto implement programmes that will benefit several thousands of older workers.Keeping the Learning Spirit AliveTraining is incomplete without interested and motivated learners. WDA will continue to promotea culture of lifelong learning and resilience. Companies must invest and cultivate their workforcewith a long term view, while workers must embrace change and adopt an attitude of learningto stay relevant in today’s economy. In this regard, WDA will work with corporate leaders andtheir human resource executives to help organisations build their capabilities to develop theirstaff within a supportive organisational culture. This will help ensure that the outcomes achievedby WDA’s efforts are sustainable, and indeed self-sustaining in the long term.Without the support and commitment of our employers, unions and training partners, WDA wouldnot have achieved as much as we did within such a short time. I would like to thank NTUC, theCommunity Development Councils (CDCs), the self-help groups, as well as members of thevarious Industry Skills and Training Councils (ISTCs), the Skills Development Fund (SDF) AdvisoryCommittee and Lifelong Learning Endowment Fund (LLEF) Advisory Council for their unflaggingsupport which remains instrumental in helping us develop Singapore’s workforce into one of thebest in the world.> 07Last but by no means least, my thanks to the passionate and energetic WDA staff who haveshown just how much a young organisation can achieve. Keep up the great work.Yong Ying-Ichairman

WDA in Review 05/06WDA’s board of directorsWDA’s board of directorsMs Yong Ying-IChairman,WDAMr Abdul Rahman Bin Mohamed SaidManaging Director,Maxinfo Communications Pte LtdMr Kenneth A BradleyManaging Director & Site Leader,Pfizer Asia Pacific Pte LtdMr Bill ChangExecutive Vice-President,Corporate Business, SingTelMs Jennie ChuaPresident & CEO,Raffles Holdings LtdMdm Halimah YacobAssistant Secretary General,National Trades Union CongressProf Howard O HunterPresident,Singapore Management UniversityMr K KarthikeyanCentral Committee Member,National Trades Union CongressGeneral Secretary, United Workersof Petroleum Industry

WDA’s board of directorsDr Amy KhorMayor,South West DistrictMs Yena Lim Hua YenDirector, Resource Division,Ministry of Trade and IndustryMr Low Check KianChairman,NewSmith Capital Partners (Asia) Pte LtdMr Ong Ye KungChief Executive,WDA> 09Mr Tan Pheng HockPresident & CEO,ST Engineering LtdMrs Mildred Tan-Sim Beng MeiManaging Director,Ernst and Young AssociatesMr Cyrille Tan Soo LengVice-President,National Trades Union CongressGeneral Secretary, United Workersof Electronic and Electrical IndustriesMr Jeffrey WongDirector, Manpower Planning and Policy,Ministry of Manpower

WDA in Review 05/06WDA’s committeesWDA’s committeesAudit and Risk Committee (ARC)Mr Kenneth A BradleyChairmanMr Abdul Rahman Bin Mohamed SaidMr Jeffrey WongIncentives and Grants Committee (IGC)Mr Bill ChangChairmanMr K KarthikeyanDr Amy KhorMr Liak Teng LitMr Ong Ye KungMr Russell WatsonInvestment Committee (InvCom)Mr Low Check KianChairmanMs Jacqueline LohMr Ong Ye KungMr Quah Wee GheeMr Geoffrey Wong

WDA’s committeesStaff Development and Compensation Committee (SDCC)Mrs Mildred Tan-Sim Beng MeiChairmanMs Yena Lim Hua YenMr Ong Ye KungMr Cyrille Tan Soo LengStrategy and Development Committee (SDC)Ms Yong Ying-IChairmanMs Jennie Chua> 11Mdm Halimah YacobProf Howard O HunterMr Ong Ye KungMr Tan Pheng Hock

WDA in Review 05/06skills developmentskills development fund advisory committeeMs Jennie Chua(Chairman)President & CEO,Raffles Holdings LtdMr Liak Teng Lit(Deputy Chairman)CEO,Alexandra HospitalMr Abdul Rahman Bin Mohamed SaidManaging Director,Maxinfo Communications Pte LtdMrs Catherine LamManaging Director,Fabristeel Pte LtdMr Lee Kok ChoyPresident,Tech Semiconductor Singapore Pte LtdMr Low Wong FookPrincipal,Singapore Polytechnic

skills development fund advisory committeefund advisory committeeMrs Mui-Kok Kah WeiDirector,Skills Development Department,National Trades Union CongressMr Ong KeauDeputy Executive Secretary,United Workers of Electronic &Electrical IndustriesMr Peter TayPresident & CEO,Singapore Food Industries LimitedMr S ThiagarajanDirector,Ong Teng Cheong Institute of Labour Studies,National Trades Union Congress> 13Mr Russell WatsonManaging Director,Merck Sharp & Dohme (S) LtdDr Woon Kin ChungGroup Director,Enterprise Capabilities Group &Enterprise Promotion Group,SPRING SingaporeMs Mary YeoManaging Director,United Parcel Service Singapore Pte Ltd

WDA in Review 05/06lifelong learning endowmentlifelong learning endowment fund advisory councilMr Gwee Teck Hai, Eric(Chairman)Chairman,SP Services LtdMr Bill Chang(Deputy Chairman)Executive Vice-President,Corporate Business, SingTelMdm Chua Foo YongExecutive Vice President & Head,Group Business Development,(Greater China/Media Academy)MediaCorp Pte LtdMr Douglas FooChief Executive Officer,Apex-Pal International LtdMdm Halimah YacobAssistant Secretary General,National Trades Union CongressMr Han Fook KwangEditor, The Straits TimesSingapore Press Holdings Ltd

lifelong learning endowment fund advisory councilfund advisory councilMs Ho PengDirector,Curriculum Planning & Development Division,Ministry of EducationMr Jen Kwong HwaManaging Director,Micron Semiconductor Asia Pte LtdMr Sam TanExecutive Director,Chinese Development Assistance CouncilMr S VivakanandanChief Executive Officer,Singapore Indian Development Association> 15Mr Kenny YapExecutive Chairman & Managing Director,Qian Hu Corporation LtdMr Yeoh Guan HuahImmediate Past Chairman,Singapore Professional Centre

WDA in Review 05/06WDA’s chief executive reflects

WDA’s chief executive reflectsWhen I was appointed Chief Executive on 1 July 2005, I found WDA to be an organisation withstrong foundation. There was a capable management team, the people were passionate abouttheir jobs, the systems and processes were in place, and various initiatives implemented werestarting to show results.The organisation was moving beyond its early priority of finding jobs for the unemployed, to alonger term approach of redesigning jobs and bridging the skills gaps for vulnerable workers.I therefore took WDA to its next natural phase of development. Together with the managementteam, we reorganised WDA to be more customer and industry oriented. We streamlined ourproduct development and financing processes to bring better solutions faster to our partnersand customers. Our 300 staff at WDA were given renewed goals and targets towards servingthe needs of Singapore companies and workers as one cohesive entity.We also undertook a fundamental review of the way we spend our funds. Our funds – whichcome from the SDF and LLEF - are limited and hence need to be devoted to areas that will bestbenefit the industries and workers. We therefore adopted a more outcome based approach andfocused our spending on programmes such as JRP, ADVANTAGE!, the Public Employment Systemand various Place and Train (PnT) programmes that will deliver employment outcomes such asjob placements or higher pay for workers.> 17I am privileged to be in a position to lead an organisation with such a meaningful mission. Witha focused approach, coupled with the collective efforts of our partners, WDA’s work is producingbigger and better results. I thank the industry and unions for their continued support, and myteam for their hard work and dedication. I look forward to more fruitful years ahead.Ong Ye Kungchief executive

WDA in Review 05/06WDA’s management teamWDA’s management teamONG YE KUNGChief ExecutiveGOH ENG GHEEDeputy Chief ExecutiveDR GARY WILLMOTTDeputy Chief ExecutiveTEOH ZSIN WOONDirector, Healthcare, Retail & Business Services Division(till 6 Jul 2006)Director, Employment Facilitation Division(till 6 Jul 2006)TEO SIO HOONDirector,Tourism DivisionDR YIM-TEO TIEN HUADirector,Community & Professional Services DivisionJEFFREY LAMDirector,Manufacturing & Construction DivisionCHOONG KET CHEDirector,Corporate & Marketing Communications DivisionKEVIN CHUADirector,Corporate Development DivisionANIL DASDirector, Employment Facilitation Division(with effect from 1 Aug 2006)Director, Policy Division(with effect from 1 Sep 2006)LYNN NGDirector, Incentives & Finance DivisionDirector, Policy Division (till 31 Aug 2006)GOG SOON JOODirector,Quality Assurance Division

WDA’s organisation structureWDA’s organisation structurechief executivedeputy chief executivedeputy chief executivefrontlinedivisionshealthcare, retail& business servicesdivisiontourism divisioncommunity &professionalservices divisionmanufacturing& constructiondivision> 19corporate & marketing communications divisioncorporate development divisioncore services divisionsemployment facilitation divisiongeneric skills development divisionincentives & finance divisionpolicy divisionquality assurance division

WDA in Review 05/06in the spotlight:highlights of achievementsthe Singapore economy grewstrongly in 2005, resulting in arecord number of 113,300 jobsbeing created.

highlights of achievementsin the spotlightWDA was established in 2003, during an economic downturn and following thewake of September 11 and the SARS outbreak. Unemployment exceeded 6%then. Our main objective was to tackle cyclical unemployment. We roped invarious partners, including NTUC, the CDCs and the self-help groups, and placedstrong emphasis on helping Singaporeans find jobs. We placed as many workersas we could, so that they could once again support their families.Today, the circumstances are different. The Singapore economy grew stronglyin 2005, fuelled by substantial investments in existing and new industries. Thisresulted in a record number of 113,300 jobs being created, with unemploymentfalling to 2.6% - the lowest in four years. We are expecting a strong pipeline of newinvestments in Manufacturing and Services, and in traditional and new industries.Notwithstanding the positive economic outlook, globalisation and rapid economicrestructuring continue to put vulnerable workers at risk. Older and lowerskilledworkers are especially susceptible to retrenchment. Intense competitionfrom lower-cost countries in the region is exerting downward pressure on costand wages.> 21WDA will need to adapt its work to the new circumstances.We are no longer trying to solve a cyclical problem, butplaying our part to tackle long-term economic and socialchallenges. We started collaborating with industries toupgrade skills and prepare workers for new jobs that areemerging. This will help support the growth of industriesand, at the same time, ensure that Singapore workerscan contribute to our economic progress and enjoy the

WDA in Review 05/06in the spotlight22

highlights of achievementsin the spotlightbuilding a CET infrastructureCET is necessary to equip adult workers with the relevant skills andcompetencies to remain competitive and employable. Just as we havea first-class education system to help students develop charactersand prepare for their careers, we need a CET infrastructure toprepare workers for a changing economic landscape and ensuretheir lifelong employability. That way, we also ensure that there is apipeline of workers with relevant skills to support our economic growth.WDA has made good progress in developing the three pillars of theCET infrastructure, namely WSQ, ESS and training providers.Singapore Workforce Skills QualificationsDr Ng Eng Hen, Minister for Manpower and Second Minister for Defence, launchedthe WSQ system in October 2005. It is a national skills certification frameworkthat is developed in conjunction with the industry and validated by employers.WSQ serves to establish common skills standards across different companiesof a similar industry. That way, skills become portable, workers become moremobile, and the labour market more efficient. It also creates an avenue for workersfrom other sectors to build on their past experiences and skills sets, to seekcareers in new and more promising industries.Access to WSQis notdependent onacademicqualifications,which meansso long as aworker candemonstratethat he or shehas thecompetency todo the job, heor she canbe certified.> 23In line with these objectives, the WSQ system is designed to be modular andflexible, focusing on building competencies that are relevant to the industry.Access to WSQ is not dependent on academic qualifications, which means solong as a worker can demonstrate that he or she has the competency to do thejob, he or she can be certified. This presents all workers with opportunities toupgrade and further their careers.

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highlights of achievementsin the spotlightEmployability Skills SystemEmployability skills are the underlying skills for WSQ vocational skills, and includeliteracy, numeracy and soft skills such as use of infocomm technologies, teamwork,problem solving and decision making, global mindset, initiative and enterprise.These generic workplace skills remain relevant to workers, regardless of whichindustries they work in.In 2005, around 4,100 workers took up ESS training, with 97% obtaining aStatement of Attainment (SOA).In response to feedback that many older and lower-skilledworkers are more conversant in Mandarin than English,WDA started to develop ESS training modules that aredelivered in Mandarin. WDA held a trial Business ChineseTest for 200 workers to assess the feasibility of this initiative.In addition, the workplace skills modules were translatedand five pilot runs with 91 participants were successfullyconducted. The actual training will be rolled out in stagesfrom October 2006.Over 4,000workers haveundergoneskills upgradingunder RetailWSQ, of whom1,800 werelower-skilledworkers and1,000 wereabove 40years old.> 25In October 2005, WDA introduced a Computer Adaptive Test (CAT) to replacethe paper-based workplace literacy and numeracy tests. CAT provides an instantresult for the learner – by appraising as well as certifying – saving time, effortand resources. In the year in review, 2,752 appraisals were conducted.Training InstitutionsRecognising that our WSQ system and ESS are only as good as the delivery of thetraining, WDA also actively sought strategic partnerships with institutions to providea strong adult-learning infrastructure and ensure a high standard of skills training.

WDA in Review 05/06in the spotlight26

highlights of achievementsin the spotlightpursuing outcomesWith limited resources, it is increasingly important for WDA toprioritise its spending and invest in areas that will generate higherreturns for workers and industries. It is insufficient to only chase fortraining places, high attendance and pass rates for courses. WDAmust go beyond output to measure and demand tangible manpoweroutcomes, such as placements for job seekers, enhanced job worthand better pay for existing workers, and acquisition of new capabilitiesor higher productivity for the industry or company.Hence, in 2005, WDA moved to an outcome-centric approach indeveloping, funding and implementing its programmes. Some ofthe key outcome-based programmes are as follows:Place and TrainPnT programmes involve matching supply and demand for workers, and ensuringthat a worker lands a job before we start investing in his training. This approachensures that a meaningful outcome, such as placement of a worker, is guaranteed.The programme also helps industries build a pipeline of workers to support theiractivities and growth.WDAimplemented11 PnTprogrammes inthe year inreview, with576 workersgetting newjobs.> 27WDA implemented 11 PnT programmes in the year inreview, with 576 workers getting new jobs. They wereplaced in Hotel, Aerospace, Marine, Process, Electronics,Construction, F&B, Textile, Fashion and PrecisionEngineering industries. The workers came from diversebackgrounds, but were prepared to take the plunge andre-skill themselves for new careers. Healthcare andTourism were two industries that were most attractiveto workers.

WDA in Review 05/06in the spotlight28

highlights of achievementsin the spotlightMaintaining high service standards and establishing a strong Singapore brandof service will be strategic competitive advantages for Singapore.That is why we launched the GEMS movement in October 2005. The movementis led by Minister for Transport, Mr Raymond Lim, and supported jointly by theSingapore Tourism Board (STB), SPRING Singapore and WDA. The objectivesare to raise service levels in Singapore and strengthen the culture of serviceexcellence. For a start, the GEMS movement focuses on four areas:• Service leadership• Service capability• Service mindset• Service in small and medium-sized businessesThe three lead agencies implemented many initiativesunder these four areas. These include leadershipseminars, an advertising campaign to raise publicawareness on the importance of service excellenceand the role each person has to play, and a GEMSAppreciation Initiative to encourage customers to showappreciation for good service. The initiative attracted90 participating companies, which covered 2,000outlets islandwide.The GEMSAppreciationInitiativeattracted 90participatingcompanies,which covered2,000 outletsislandwide.> 29In terms of building service capability, we leveraged on Singapore 2006 (S2006)as a rallying point. S2006 will be the largest international conference ever heldin Singapore, involving 16,000 delegates. In preparation for S2006, WDA launchedthe S2006 Service Training Programme in January 2006, to train service personnelat key touch points such as the airport, tourist attractions and major shopping

WDA in Review 05/06in the spotlight30

highlights of achievementsin the spotlighthelping vulnerable workersThis remains a priority of WDA. We will continue to focus our effortson helping workers who are at risk – the lower-skilled, older workersand out-of-school youths – so that they can participate in theprogress of Singapore. The key initiatives are:Job Re-creation ProgrammeJRP was jointly launched by NTUC and WDA in January 2005, as part of the ReemploymentAssistance Programme (REAP). The programme is targeted atcompanies to redesign jobs in ways that will enhance job worth, improve workingconditions, job prospects and the image of the profession. The ultimate test isa quantum leap in productivity or quality that justifies a meaningful increase inworkers’ pay, which will attract locals to take up the jobs.For example, the Marine industry launched the ASMI Super V scheme in November2005. Under this scheme, the participating companies, namely Keppel OffshoreMarine, Sembcorp Marine and ST Marine, created new Trainee Supervisor postswith a starting monthly salary of $1,200 – $300 more than the salary of otherentrant positions. These new recruits will undergo systematic training, includinga NITEC course, before they assume supervisory positions in due course.The JRP istargeted atcompanies toredesign jobs inways that willenhance jobworth, improveworkingconditions, jobprospects andimage of theprofession.> 31In the Cleaning industry, several hawker centre cleaningcontractors participated in the JRP. The cleaners wereequipped with uniforms, trolleys and proper cleaning equipmentso that they can do their job faster and better, thus justifyingthe higher monthly salaries for the workers.

WDA in Review 05/06in the spotlight32

highlights of achievementsin the spotlightSelf-employment Assistance ProgrammeThe Self-employment Assistance Programme, co-foundedby WDA and the Ministry of Community Development, Youthand Sports, was launched in November 2005. The $91,830pilot scheme targets mature and lower-educated job seekerswilling to consider self-employment as an alternative wayto earn a living.Under the programme, ten participants were trained and mentored to start andrun their own micro businesses. Eight participants successfully started theirbusinesses in February 2006 while two dropped out due to medical reasons.ADVANTAGE! for Mature WorkersAgainst the backdrop of an ageing workforce, the Tripartite Committee onEmployability of Older Workers was convened in March 2005 to recommendways to raise the effective retirement age of our workers. One of the keyrecommendations was the ADVANTAGE! scheme.In 2005, DCNpartners serveda total of97,587 jobseekers andachieved27,479 jobplacements.> 33With a total assistance commitment of $28.85 million from the SDF and LLEFfor the period from November 2005 to March 2008, the scheme aims to encouragecompanies to employ mature workers over 40 years old, or re-employ workersbeyond the age of 62 years. It comprises a flexible funding mechanism whichsupports initiatives such as job redesign and automation, wage restructuring,training, and re-employment policies for workers over 62. Funding for eachparticipating company can go up to $300,000. As at end March 2006, more than40 companies had signed on to the programme and committed to hire or retain1,500 mature workers.

WDA in Review 05/06in the spotlight34

highlights of achievementsin the spotlightpromoting lifelong learningIn addition to outcome-based programmes, WDA continues toprovide broad support for the training initiatives of companies, soas to promote a culture of lifelong learning and encourage employersto support the personal development of their workers.Support through SDF and LLEFWDA taps on the SDF in its efforts to championworkforce development in Singapore. Financed bythe Skills Development Levy (SDL), the SDF providesthe pool of reserves needed to fund training incentivessuch as course fee support to employers and traininginstitutions. In FY2005, WDA supported 477,978training places, equivalent to one fifth of Singapore’sworkforce. Workers with GCE ‘A’ Level qualificationsand below made up 70% of these training places.In FY2005,WDAsupported477,978training places,equivalent toone fifth ofSingapore’sworkforce.> 35We also tap on the LLEF to facilitate the employment and enhance the employabilityof Singaporeans. The interest earned from the endowment fund provides a steadystream of income for lifelong learning initiatives. In FY2005, a total of $46.3 millionwas disbursed under the LLEF to fund initiatives such as the JRP, ADVANTAGE!,PnT programmes, RESS, WSQ development and the 1-Institute-2-Systems(1I2S) scheme.SME Upgrading for PERformanceSMEs play an important role in Singapore's economy, accounting for 90% of allbusinesses and employing more than half the workforce. To support SMEworkforce development, we set up the SME Upgrading for PERformance (SUPER)scheme in 2003. The scheme offers enhanced course fee funding for both noncertifiableand executive programmes. In 2005, 4,844 SMEs made first-time

WDA in Review 05/06in the spotlight36

highlights of achievementsin the spotlightwhich cannot afford to have their own training functions and facilities, and lacktraining accessibility. The FPTI helped to raise the professionalism of thesesmaller industry players and boost the image of jobs in the Retail sectorthrough its support for some 10,300 training places from 2002 to 2005. InFY2005, $0.19 million was disbursed to fund the learning infrastructuredevelopment for the FPTI.Singapore Learning FestivalWe organised the sixth Singapore Learning Festival (SLF) in October 2005. Sinceits inauguration, the objective of the SLF has been to promote a culture of lifelonglearning. For the 2005 SLF, we managed to piece together a diverse and engagingseries of programmes, reaching out to different audiences.The SingaporeLearningFestivalattracted 2,800job applicationsfor over 1,000jobs available inthe Servicessector.During the opening ceremony, we launched the WSQsystem which will be a central tool for manpowerdevelopment. We held an exhibition showcasing thejob opportunities available to workers. The eventwas supported by 30 exhibitors and attracted 54,000members of the public. Visitors had a go at tasks suchas cashiering, making a bed and taking blood pressurereadings to experience service jobs. The festival attracted2,800 job applications for over 1,000 jobs available in theServices sector.> 37We also started a conference comprising a Leadership Forum and a Practitioners’Series under the banner of the SLF. For 2005, our focus was on service excellence,in line with the GEMS movement. The keynote speaker was Mr Isadore Sharp,Chairman and Founder of Four Seasons Hotels. The conference attracted 200attendants comprising top executives and human resource practitioners.

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highlights of achievementsin the spotlightbuilding the organisationWe continue to devote efforts to building our young organisation.We want WDA to be effective, efficient, objective, outcome oriented,and run with high standards of integrity and transparency. At thesame time, we will develop the talents of our people and build astrong team to lead the organisation forward. In the year in review,we undertook the following key initiatives to improve our governanceand strengthen the organisation:New Board of DirectorsA new term for the Board of Directors commenced on 1 September 2005. Wetook the opportunity to bring in new members from the industries and unions(titles as at 1 April 2006), namely:A new term forthe Board ofDirectorscommenced on1 September2005.• Mr Bill Chang, Executive Vice-President, Corporate Business, SingTel> 39• Prof Howard O Hunter, President, Singapore Management University• Mr K Karthikeyan, NTUC Central Committee Member, General Secretary ofUnited Workers of Petroleum Industry• Dr Amy Khor, Mayor, South West District• Mr Lim Chee Hwee, Director, Resource Division, Ministry of Trade andIndustry (appointed as of 1 August 2006)• Ms Yena Lim Hua Yen, Director, Resource Division, Ministry of Trade andIndustry (resigned as of 1 June 2006)• Mr Oh Wee Khoon, Senior Vice President, Aircraft Services & BusinessDevelopment, SIA Engineering Company Ltd (appointed as of 1 August 2006)• Mr Tan Pheng Hock, President & CEO, ST Engineering Ltd• Mr Cyrille Tan Soo Leng, Vice-President, NTUC, General Secretary of theUnited Workers of Electronic and Electrical Industries• Mr Jeffrey Wong, Director, Manpower Planning and Policy, Ministry ofManpower (appointed as of 3 January 2006)

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highlights of achievementsin the spotlight2006, WDA will appoint the IGC as the LLEF Advisory Council. The consolidatedoverview of the SDF and LLEF by the IGC will strengthen the governance ofthese two funds. Instead of publishing separate WDA, SDF and LLEF AnnualReports, we have also consolidated these into one report, starting from FY2005.Reorganising WDAWDA underwent a major reorganisation in September 2005, with the aim ofbetter integrating our diverse expertise and streamlining operating processes.From a functional set-up, we shifted the primary axis of organisation to focuson the industries.We set up four Frontline Divisions (FLDs), staffed by a diverse pool of talentincluding experts in industry engagement and WSQ development. Each FLDserves as the main interface with the industry cluster it is overseeing, andholistically drives manpower development within the industry. We also establishedseven Core Services Divisions dealing with policy, generic skills development,employment facilitation, corporate communications, incentives and finance,corporate development and quality assurance, to provide services that cutacross industries and divisions.Theconsolidatedoverview of theSDF and LLEFby the IGC willstrengthen thegovernance ofthese twofunds.> 41Developing Our PeopleWDA will live up to its mission to develop Singapore’smanpower by emphasising on the development of its ownpeople. In 2005, we strengthened the appraisal processby introducing a more rigorous cross-ranking process andinstituting a talent development programme comprisingtraining programmes, regular postings and post graduatescholarships.

WDA in Review 05/06the big picture:future directions & developmentsin the year ahead, we expect tosee strong economic growthand more job opportunities forSingaporeans. these jobs will begenerated by existing, as wellas new, industries.

future directions & developmentsthe big pictureIn the year ahead, we expect to see strong economicgrowth and more job opportunities for Singaporeans.These jobs will be generated by existing, as well as new,industries. For example, in the Tourism-related sectors,the Sentosa and Marina Sands Integrated Resorts willcreate about 35,000 jobs directly and indirectly. Newretail developments such as VivoCity at HarbourFrontand Warehouse Retail Scheme at Tampines will addanother 9,000 jobs to the total job creation. The F&Bsector is also poised for strong growth and estimated to need another 25,000workers by 2015. In Manufacturing, the new Aerospace Park at Seletar is expectedto open up 10,000 new jobs, and the Biopolis will help raise the number of jobsin the Biomedical Sciences sector by another 5,000 by 2015.Singapore is also growing new industries, such as Digital Animation. Leadinginternational players such as Lucasfilm Ltd and Koei Corporation have sited theiroperations in Singapore. New local companies such as Egg Story CreativeProductions and Peach Blossom Media, are also emerging. The industry iscreating opportunities for local talents to work at the cutting edge of this excitingfield and sell their skills on the international market.> 43This hive of investment activity promotes job growth across many sectors. Itmeans greater demand for manpower and skills, and significant challenges forWDA. First, it is imperative for WDA to develop our workforce to support thegrowth of our industries. Our aim is to make the Singapore workforce a majorcompetitive advantage for our economy.At the same time, we must continue to pay special attention to vulnerableworkers, such as mature and lower-skilled workers, to ensure that they canparticipate in the progress of Singapore. As the economy structures and surgesahead, they are at risk of being unable to keep up. But with training and retraining,

WDA in Review 05/06the big picture44

future directions & developmentsthe big picturestrengthening the CET infrastructureWe will continue to strengthen the CET infrastructure to complementand add on to the pre-employment training system, and translateit into a strategic advantage for Singapore. The three CET pillarscontinue to be valid, and we will strengthen them.Singapore Workforce Skills QualificationsWDA will need to invest time and resources to develop and implement WSQ forstrategic sectors. We will put priority on sectors which have the best pay-offs,such as improving labour market efficiency and raising the standard ofprofessionalism. Some of these priority sectors are the Tourism, F&B, Aerospace,Business Process Outsourcing, Human Resources and Creative industries.For the Manufacturing sector, we recognise that technological advancementis driving change in the sector rapidly and speeding up the rate of skillsobsolescence. This is compounded by the constant shift in the internationaldivision of labour in manufacturing production. We must manage theseuncertainties, ensure that we leverage on the skills of our manufacturing workersto the fullest, and minimise the risk of structural skills mismatch. This is whywe will take a bold step to fundamentally review the approach to developingWSQ systems, moving away from developing WSQ for vertical manufacturingsub-sectors and, instead, focusing on developinghorizontal or common competencies that cut acrossmultiple sub-sectors. By maximising the recognitionof common skills, we will enhance the mobility ofmanufacturing workers across multiple sub-sectors.So even as workers in the Textiles industry getdislocated, they can now apply their craft in theBiomedical Sciences industry by sewing synthetic heartvalves. This will strengthen workers’ resilience tostructural changes in the Manufacturing sector.By maximisingthe recognitionof commonskills, we willenhance themobility ofmanufacturingworkers acrosssub-sectors.> 45

WDA in Review 05/06the big picture46

future directions & developmentsthe big picturedriving quality outcomesOur emphasis on manpower outcomes is now generally accepted.Moving forward, we need to develop the systems and tools to helptraining providers and partners measure and monitor outcomes oftraining. We will continue to review existing programmes which areoutput, rather than outcome, based. Moving forward, we foresee afew areas where we want to drive outcomes:Developing Pipeline of WorkersWe need to address the manpower needs of growingindustries, such as Tourism, Retail, Healthcare, DigitalAnimation, Aerospace and Biomedical Sciences. ThroughWSQ development and other efforts, we will create theavenues for workers to enter these industries. Specifically,we need to pay attention to major upcoming projects,such as the Sentosa and Marina Sands Integrated Resorts,VivoCity and the Aerospace Park at Seletar. These areiconic projects for which we have to ensure there is apipeline of workers ready to join them.Tackling Industry ChallengesWe should also leverage on the CET infrastructure we have built up to designmanpower development programmes that will address specific industry challenges.For example, we need to enhance the professional image of the Tourism andRetail industries, build domain knowledge and new capabilities in the Infocommsector to make it more competitive, and enhance workplace safety in sectorssuch as Construction and Marine.We need toaddress themanpowerneeds ofgrowingindustries, suchas Tourism,Retail,Healthcare,DigitalAnimation,Aerospace andBiomedicalSciences.> 47

WDA in Review 05/06the big picture48

future directions & developmentsthe big pictureSpreading the Benefits to All CompaniesBesides focusing on outcome-centric programmes thatcan deliver measurable results, it is also important thatwe spread the benefits of our funding across all companiesinstead of concentrating on the few big companies withresources to submit applications for training assistance.In 2006, WDA will review the Total Company Training Plan(TCTP) scheme under the SDF, with a view of institutinga cap on the amount of training assistance that a companycan obtain under the scheme.In the nextphase of theGEMSmovement,WDA will gobeyond theTourism, Retailand F&Bsectors totarget otherprofessionalsectors such asHealthcare,Education,Finance andLogistics.> 49

WDA in Review 05/06the big picture50

future directions & developmentsthe big pictureDistributed CareerLink NetworkWDA will continue to raise the level of professionalism and capabilities of the jobcentres to better serve job seekers. This means better abilities to profile jobseekers, understand their needs, counsel them on their career choices, preparethem mentally and skills-wise for new jobs, and match them to suitable employers.Our key initiative is to strengthen the focus on workfare,which means helping the job seekers who want to behelped to become self reliant. Based on our experiencein profiling job seekers, 10% are job ready and requireminimal assistance, and another 20% are in direcircumstances or who do not want to help themselves.However, there is a middle 70% who want to be selfreliant,but need help in varying intensities before theyhave a chance to find a job.From 2006onwards,NTUC andWDA havejointly set thetarget torecreate 10,000jobs every year.> 51We will work with our DCN partners to provide a spectrum of interventions tosuit the profiles for job seekers, ranging from employment facilitation for thosewho are job-ready, training and preparation for those who need help to be jobready,and some social assistance for those in difficult circumstances in returnfor a serious attempt at skills upgrading and job search. Where possible, we willleverage on the tools and training programmes that we have developed, suchas ESS and WSQ, to help job seekers. This will integrate and draw synergiesbetween our demand and supply side interventions.

WDA in Review 05/06the big picture52

future directions & developmentsthe big picturecustomers with professionalism, respect and empathy. We will uphold the ‘NoWrong Door’ policy, so that every WDA officer is the right person to provide helpand assistance.Developing Our PeopleWe will continue to strengthen our system of peoplemanagement, to ensure that we hire talents who arecapable and share our organisation values, train themto be competent, and develop fulfilling careers duringtheir stay in WDA. We will review our performance bonussystem to better align it with the achievement of ourcorporate targets. We will develop a competency mapfor WDA officers, to guide supervisors and officers indeveloping the skills sets for effective work in WDA.Our fundingpolicies mustbegin to reflectthe priority weput onoutcomebasedprogrammes, infavour ofoutput-basedprogrammesthat deliver onlytraining placesand certificates.> 53

WDA in Review 05/06performance insight:fund achievements & financial highlightsWDA draws on two mainsources of funding for itsworkforce developmentprogrammes - the SkillsDevelopment Fund andthe Lifelong LearningEndowment Fund.

fund achievements & financial highlightsperformance insightWDA draws on two main sources of funding for its workforce developmentprogrammes, namely the SDF and the LLEF.The SDF was set up in 1979 to provide training incentives such as course feesupport to employers and training institutions to encourage the skills upgradingof Singapore's workforce. The fund is built up through the collection of theSDL. Under the SDL Act, employers are required to contribute 1% of themonthly salary of workers earning $2,000 and below.Established on 12 March 2001 with the enactment of theLifelong Learning Endowment Fund Act (Cap.162A), theLLEF aims to facilitate the employment and enhance theemployability of Singaporeans. The interest earned fromthis endowment fund provides a steady stream of incomefor lifelong learning initiatives. The Fund is administeredby the Ministry of Manpower. WDA has been appointedas the manager of the Fund since September 2003. TheLLEF started with an initial capital of $500 million. The long-term size of theFund is targeted to be $5 billion. As at 31 March 2006, the capital sum of theLLEF was $2 billion. WDA receives 4% interest from the capital sum every year.> 55This chapter provides an overview of how the funds were used in FY2005, anda performance analysis of the training supported under the SDF.

56 < WDA in Review 05/06Skills Development Fundreport on usage of SDFOVERVIEWTo help the Singapore workforce to meet the new economic challenges, the SDF has since 1999been encouraging employers to equip their workers with employable and certifiable skills byadopting differential funding rates.In FY2005, the SDF provided a total $100.03 million worth of training assistance for a total of477,978 training places. This translates to about an 8% increase from FY2004’s assistance. Thereis also a 35% increase in the number of certifiable training places supported from 161,703 trainingplaces in FY2004 to 218,905 training places in FY2005. However, with the longer duration ofcertifiable training, employers are unlikely to commit to as many training places as before. Thishas contributed to a 12% drop in overall training places supported from FY2004 to FY2005.Table 1: Dollar Value of Assistance Committed for FY2004 and FY2005SCHEME FY2004 FY2005$m $mTraining Assistance 1 89.00 99.96Special Outreach Programmes includingConsultancy Assistance 3.22 0.07Total Assistance Committed 92.22 100.03Chart 1: Comparison between Percentage of Assistance Committed Across WDA Schemes in FY2004 and FY2005Special OutreachProgrammesincluding ConsultancyAssistanceTraining Assistance10080TraininSpeciPercentage (%)60402002004 2005Financial Year1 Includes course fees and absentee payroll for approved courses as well as assistance committed for BEST and WISE programmes.

fund achievements & financial highlightsTable 2: Principal Statistics of the SDF as at 31 March 2006Cumulative as at31 March 2002 FY2002 FY2003 FY2004 FY2005Training Assistance (including course fee and absentee payroll support)No. of ApplicationsReceived 729,063 62,584 48,160 59,449 56,920No. of CompaniesApplying for theFirst Time 53,442 3,599 4,399 4,621 4,911No. of ApplicationsApproved 637,493 55,643 43,017 53,519 50,463No. of TrainingPlaces Committed 7,112,909 651,274 562,331 536,803 474,467Dollar Value of AssistanceCommitted ($m) 1,473.48 108.84 93.23 85.82 98.90Basic Education for Skills Training (BEST) ProgrammeNo. of TrainingPlaces Committed 507,480 12,650 8,700 4,995 2,775Dollar Value of AssistanceCommitted ($m) 50.97 1.33 1.83 1.29 0.72Dollar Value of AssistanceCommitted for BEST Review ($m) 0.25 - - - -Worker Improvement through Secondary Education (WISE) ProgrammeNo. of TrainingPlaces Committed 253,381 11,300 7,240 4,280 736Dollar Value of AssistanceCommitted ($m) 50.33 1.92 2.73 1.89 0.34Dollar Value of AssistanceCommitted for WISE Review ($m) 0.24 - - - -> 57Consultancy Assistance 2Dollar Value of AssistanceCommitted ($m) 17.17 2.39 1.64 2.78 0.07Infrastructure DevelopmentDollar Value of Assistance Committed ($m) for:Curriculum Development ofWorker Training Programmes 18.68 0.52 0.04 - -Others 25.27 - - 0.44 -Past SchemesNo. of TrainingPlaces Committed 29,389 - - - -Dollar Value of AssistanceCommitted ($m) 167.36 - - - -Total Dollar Value of AssistanceCommitted ($m) 1,803.75 115.00 99.47 92.22 100.032 The Consultancy Assistance schemes have been discontinued with effect from 30 September 2004.

WDA in Review 05/06In FY2005, WDA shifted its priority to outcome-based programmes. Those funded under SDFincludes the setting up of the Singapore Institute of Retail Studies, introduction of the CustomerCentric Initiative and Place and Train programmes for Tourism hosts, and training for the visuallyimpaired. A total assistance of $15.3 million was provided for these programmes in support of26,179 training places. The overall assistance committed in FY2005 increased by 12% comparedto FY2004. Together, these outcome-based programmes accounted for 15.3% of total SDF usagefor FY2005. We aim to build up outcome-based programmes in the coming years.Table 3: Dollar Value of Assistance and Training Places Committed by Area of Training for FY2004 to FY2005FY2004FY2005TRAINING Value of Training Value of TrainingAREA Assistance Places Assistance PlacesCommitted Committed Committed Committed($) ($)Outcome-based Programmes - - 15,309,525 26,179[15.3] [5.5]Certifiable Skills Programmes 67,003,479 161,703 66,077,383 218,905[75.3] [29.6] [66.1] [45.8]Non-certifiable SkillsProgrammes 21,984,933 384,369 18,573,056 232,894[24.7] [70.4] [18.6] [48.7]58 < Others 3 4,584 6 - -[0.0] [0.0] [0.0] [0.0]Total 88,992,996 546,078 99,959,964 477,978[100.0] [100.0] [100.0] [100.0][ ] – in percentageChart 2: Comparison between Percentage of Training Places Committed by Area of Training in FY2004 and FY2005OthersNon-certifiable Skills ProgrammesCertifiable Skills ProgrammesOutcome-based Programmes10080OutcoCertifiaNon-COthersPercentage (%)60402002004 2005Financial Year3 These comprise WDA ad-hoc programmes.

fund achievements & financial highlightsANALYSIS BY INDUSTRYTable 4 gives a breakdown of training places supported (excluding the BEST and WISE programmes)by industry sectors. There is a shift towards support of workers in the Services sector, whichreflects the increasing importance of Services as a generator of employment.Table 4: Dollar Value of Assistance and Training Places Committed in the Manufacturing and Services Sectors for FY2004and FY2005FY2004FY2005SECTOR Value of Training Value of TrainingAssistance Places Assistance PlacesCommitted Committed Committed Committed($) ($)Manufacturing 10,715,910 98,417 8,132,820 56,263[12.5] [18.3] [8.2] [11.9]Services 75,100,886 438,386 90,765,076 418,204[87.5] [81.7] [91.8] [88.1]Total 85,816,796 536,803 98,897,896 474,467[100.0] [100.0] [100.0] [100.0][ ] – in percentageChart 3: Comparison between Percentage of Training Places Committed By Sector in FY2004 and FY2005> 59ServicesManufacturing10080ManufacturingServicesPercentage (%)60402002004 2005Financial YearTables 5 and 6 show the breakdown of certifiable and outcome-based training 4 supported byindustries. The number of certifiable and outcome-based training places in the manufacturingsector has dropped slightly by 9%. In contrast, the number of certifiable and outcome-basedtraining places in the services sector has increased by 67%. This is largely attributed to theincreased training in certifiable programmes in the Transportation, Storage and Communication4 This excludes breakdown for BEST and WISE programmes.

WDA in Review 05/06Services industries and the introduction of outcome-based programmes in the Services sectorsuch as the Retail industry.Table 5: Dollar Value of Assistance and Training Places Committed for Certifiable & Outcome-based Programmes in theManufacturing Sector for FY2004 and FY2005FY2004FY2005MANUFACTURING Value of Training Value of TrainingSECTOR Assistance Places Assistance PlacesCommitted Committed Committed Committed($) ($)Electronics Products 1,469,124 5,368 864,291 5,395& Components [28.0] [32.2] [17.6] [35.5]Transport Equipment 1,147,547 2,625 1,544,279 2,672[21.9] [15.7] [31.5] [17.6]Computer Manufacturers 268,956 536 318,688 657& Vendors [5.1] [3.2] [6.5] [4.3]Fabricated Metal Products, 743,579 3,288 633,177 2,311Machinery & Equipment [14.2] [19.7] [12.9] [15.2]Chemical Products, 497,465 1,617 550,259 1,727Petroleum & Plastics [9.5] [9.7] [11.2] [11.4]Other Manufacturing Industries 1,119,476 3,247 992,142 2,427[21.3] [19.5] [20.2] [16.0]60 < Total 5,246,147 16,681 4,902,836 15,189[100.0] [100.0] [100.0] [100.0][ ] – in percentageChart 4: Comparison between Percentage of Training Places Committed Across the Manufacturing Sector in FY2004and FY2005Other ManufacturingIndustriesChemical Products,Petroleum & PlasticsFabricated MetalProducts,Machinery& EquipmentComputer Manufacturers& VendorsTransport EquipmentElectronics Products& ComponentsPercentage (%)100806040Electronics PrTransport EquComputer MaFabricated MeChemical ProOther Manufa2002004 2005Financial Year

fund achievements & financial highlightsTable 6: Dollar Value of Assistance and Training Places Committed for Certifiable & Outcome-based Programmes in theServices Sector for FY2004 and FY2005FY2004FY2005SERVICES Value of Training Value of TrainingSECTOR Assistance Places Assistance PlacesCommitted Committed Committed Committed($) ($)Transportation, Storage & 15,452,395 47,478 11,463,661 126,837Communication Services [26.4] [35.0] [15.2] [56.0]Wholesale & Retail 4,080,246 10,358 5,885,195 26,783[7.0] [7.6] [7.8] [11.8]Finance & Insurance 1,720,207 6,852 1,356,739 5,026[2.9] [5.0] [1.8] [2.2]Hotel & Catering 3,235,667 7,020 1,237,976 5,234[5.5] [5.2] [1.6] [2.3]Medical & Health Services 1,687,070 5,336 541,115 2,516[2.9] [3.9] [0.7] [1.1]Labour Unions & Associations 5 10,686,164 20,127 12,411,158 16,076[18.2] [14.8] [16.5] [7.1]Public Services 2,749,708 7,626 20,743,696 12,349[4.7] [5.6] [27.5] [5.5]Other Services Industries 18,969,674 30,950 21,782,464 31,563[32.4] [22.8] [28.9] [13.9]Total 58,581,131 135,747 75,422,004 226,384[100.0] [100.0] [100.0] [100.0][ ] – in percentage> 61Chart 5: Comparison between Percentage of Training Places Committed Across the Services Sector in FY2004 and FY2005Other Services IndustriesPublic ServicesLabour Unions & AssociationsMedical & Health ServicesHotel & CateringFinance & InsuranceWholesale & RetailTransportation, Storage &Communication ServicesPercentage (%)1008060402002004 2005Financial Year5 This includes certifiable training places supported under the Surrogate Employers Programme.

62 < WDA in Review 05/06ANALYSIS BY EDUCATIONAL LEVELThe SDF continues to be focused on training of lower-educated workers. Of the 474,467 trainingplaces supported (excluding those supported under the BEST and WISE programmes), 70% orsome 334,000 training places were for workers with GCE ‘A’ Level qualifications or below, slightlylower than 73% the year before. All 3,511 training places under the BEST and WISE programmeswere also taken up by this group of workers.Table 7: Dollar Value of Assistance and Training Places Committed by Education Level for FY2004 and FY2005FY2004FY2005EDUCATIONAL Value of Training Value of TrainingLEVEL Assistance Places Assistance PlacesCommitted Committed Committed Committed($) ($)PSLE & below 8,657,308 45,117 8,901,152 33,649[10.1] [8.4] [9.0] [7.1]Secondary/NITEC Intermediate 19,693,432 106,717 27,223,461 86,401[22.9] [19.9] [27.5] [18.2]GCE ‘O’ Levels/NITEC 32,240,110 175,567 36,232,912 166,369or equivalent [37.6] [32.7] [36.6] [35.1]GCE ‘A’ Levels/Higher NITEC 8,998,551 64,702 7,965,775 47,662or equivalent [10.5] [12.0] [8.1] [10.0]Diploma or equivalent 9,593,504 79,387 11,605,087 77,680[11.2] [14.8] [11.7] [16.4]Degree or above 6,633,891 65,313 6,969,509 62,706[7.7] [12.2] [7.0] [13.2]Total 85,816,796 536,803 98,897,896 474,467[100.0] [100.0] [100.0] [100.0][ ] – in percentageChart 6: Comparison between Percentage of Training Places Committed by Education Level in FY2004 and FY2005Degree or aboveDiploma or equivalentGCE 'A' Levels/Higher NITECor equivalentGCE 'O' Levels/Nitecor equivalentSecondary/NITEC IntermediatePSLE & belowPercentage (%)1008060402002004 2005Financial Year

fund achievements & financial highlightsANALYSIS BY AGEIn FY2005, the SDF supported 165,856 training places for mature workers aged 40 and above,which accounted for 35% of the total training places supported. This is a slight drop from FY2004.With the launch of the ADVANTAGE! scheme in November 2005 which targets specifically atretraining and placing mature workers nation-wide, WDA remains strongly committed to facilitatingthe employment and re-employment of mature workers.Table 8: Training Places Supported by Age Group for FY2004 and FY2005AGE GROUP FY2004 FY2005Below 20 9,678 12,855[1.8] [2.7]20 – 24 50,375 53,587[9.4] [11.3]25 – 29 86,411 82,474[16.1] [17.4]30 – 34 91,344 81,116[17.0] [17.1]35 – 39 95,777 78,579[17.8] [16.6]40 & above 203,218 165,856[37.9] [35.0]Total 536,803 474,467[100.0] [100.0][ ] – in percentage> 63Chart 7: Comparison between Percentage of Training Places Committed by Age in FY2004 and FY200540 & above35 - 3930 - 3425 - 2920 - 24Below 2010080Percentage (%)60402002004 2005Financial Year

64 < WDA in Review 05/06ANALYSIS BY SIZE OF COMPANYSMEs continue to account for the bulk of employment opportunities in Singapore and are a majorpillar of our economy. Since 1992, the SDF has been actively reaching out to SMEs to raise theirawareness on skills upgrading for their workers.From FY2004 to FY2005, the percentage of training places going to companies with less than 50workers has gone up slightly from 7.3% to 7.9%. The percentage of assistance value that thesecompanies receive has also gone up from 18.1% in FY2004 to 28% in FY2005.However, in terms of training places supported, there is a 17% decline from FY2004 to FY2005.One key reason for this drop is that SMEs are increasingly sending their staff for certifiable training,in recognition of the portability and relevance of such skills. But such training is also longer,and requires employers to overcome difficulties in scheduling their workers for training withoutaffecting operations.Table 9: Dollar Value of Assistance and Training Places Committed by Employment Size for FY2004 and FY2005FY2004FY2005EMPLOYMENT Value of Training Value of TrainingSIZE Assistance Places Assistance PlacesCommitted Committed Committed Committed($) ($)Below 10 5,894,123 8,869 19,133,246 12,055[6.9] [1.7] [19.3] [2.5]10 – 49 9,626,103 30,253 8,634,002 25,408[11.2] [5.6] [8.7] [5.4]50 – 99 4,251,807 17,924 6,912,677 19,936[5.0] [3.3] [7.0] [4.2]100 – 199 8,841,469 42,232 5,909,375 25,180[10.3] [7.9] [6.0] [5.3]200 – 499 11,609,511 74,708 11,642,445 68,562[13.5] [13.9] [11.8] [14.5]500 & above 45,593,783 362,817 46,666,131 323,326[53.1] [67.6] [47.2] [68.1]Total 85,816,796 536,803 98,897,896 474,467[100.0] [100.0] [100.0] [100.0][ ] – in percentageChart 8: Comparison between Percentage of Training Places Committed by Employment Size in FY2004 and FY2005500 & above200 - 499100 - 19950 - 9910 - 49Below 10Percentage (%)1008060402002004 2005Financial Year

fund achievements & financial highlightsANALYSIS BY TRAINING TYPETechnical Services Skills training and Productivity and Quality-related Skills training remained thekey areas of training amongst employers accounting for 46% and 20% of total training placessupported in FY2005 respectively. Trade & Craft Skills area continues to have the lowest numberof training places supported.Table 10: Dollar Value of Assistance and Training Places Committed by Type of Training for FY2004 and FY2005FY2004FY2005TRAINING Value of Training Value of TrainingTYPE Assistance Places Assistance PlacesCommitted Committed Committed Committed($) ($)Technical Services Skills 38,717,579 186,300 57,835,738 216,253[45.1] [34.7] [58.5] [45.6]Productivity & 11,714,666 121,841 7,278,386 95,570Quality-related Skills [13.6] [22.7] [7.3] [20.1]Computer-related Skills 9,164,527 84,663 5,631,681 60,655[10.7] [15.8] [5.7] [12.8]Management & 10,022,155 67,936 7,559,978 57,802Supervisory Skills [11.7] [12.6] [7.6] [12.2]Technical Production 6,212,417 55,917 4,321,817 28,659& Engineering Skills [7.2] [10.4] [4.4] [6.0]Trade & Craft Skills 7,088,758 6,250 13,528,780 6,442[8.3] [1.2] [13.7] [1.4]Other Skills 2,896,694 13,896 2,741,516 9,086[3.4] [2.6] [2.8] [1.9]Total 85,816,796 536,803 98,897,896 474,467[100.0] [100.0] [100.0] [100.0][ ] – in percentage> 65Chart 9: Comparison between Percentage of Training Places Committed by Training Type in FY2004 and FY2005Other SkillsTrade & Craft SkillsTechnical Production& Engineering SkillsManagement &Supervisory SkillsComputer-related SkillsProductivity &Quality-related SkillsTechnical Services SkillsPercentage (%)100806040Technical Services SkillsProductivity & Quality-RelatedComputer-Related SkillsManagement & Supervisory STechnical Production & EnginTrade & Craft SkillsOther Skills2002004 2005Financial Year

66 < WDA in Review 05/06ANALYSIS BY REMUNERATION LEVELIn FY2005, about 50% of the total training places supported went towards those earning below$1,500, slightly higher than the 48.3% in FY2004. This is in line with the government’s focus onhelping low-wage workers through training and skills upgrading so that they can take on highervalue-added jobs.Table 11: Training Places Committed by Monthly Remuneration for FY2004 and FY2005MONTHLY FY2004 FY2005REMUNERATIONBelow $1,000 82,077 84,595[15.3] [17.8]$1,000 - $1,499 177,246 153,625[33.0] [32.4]$1,500 & above 277,480 236,247[51.7] [49.8]Total 536,803 474,467[100.0] [100.0]Chart 10: Comparison between Percentage of Training Places Committed by Remuneration in FY2004 and FY2005$1,500 & above$1,000 - $1,499Below $1,00010080Percentage (%)60402002004 2005Financial Year

fund achievements & financial highlightsTRAINING PLANS APPROVEDIn FY2005, there was a decrease in the number of training plans approved and the assistancecommitted under these plans. 124 training plans were approved for the Services sector, of whichthe Hotel and Catering industry was the largest contributor with 22 plans. The remaining 42 trainingplans were approved for the Manufacturing sector.Table 12: Key Statistics on Training Plans for FY2004 and FY2005FY2004FY2005TRAINING No. of Value of Training No. of Value of TrainingTYPE Plans Assistance Places Plans Assistance PlacesCommitted Committed Committed Committed($) ($)Manufacturing 69 4,080,270 60,371 42 1,956,240 27,324Services 146 17,966,132 199,371 124 11,916,900 169,821Total 215 22,046,402 259,742 166 13,873,140 197,145Chart 11: Comparison between Percentage of Training Plans Approved by Sector in FY2004 and FY2005ServicesManufacturing100> 6780Percentage (%)60402002004 2005Financial Year

68 < WDA in Review 05/06Lifelong Learning Endowment Fundreport on usage of LLEFIn FY2005, we disbursed a total of $46.3 million under the LLEF to support workforce developmentprojects in various areas of work including employment facilitation, skills upgrading, CET infrastructureand capability development, promotion of lifelong learning, as well as promotion of best practicesin human resources. Table 13 summarises the funds spent in each key area.Table 13: Summary of LLEF Disbursements by Key Area in FY2005KEY AREASFunds Disbursement(FY2005)($)Facilitating Employment of Job Seekers and Tackling 16,086,052Structural UnemploymentPublic Employment Service (PES) Programme 7,650,512Re-Employment Support Scheme (RESS) 3,110,152Job Redesign/Re-creation 917,582Career Counselling 884,509Systems Maintenance 697,512ADVANTAGE! 36,000Others 2,789,785Facilitating In-Employment Skills Upgrading 13,662,2371-Institute-2-Systems 13,166,864Administration of Skills Redevelopment Programme 82,944Others 412,429Manpower Planning, Infrastructure and Capability Development 4,651,988WSQ Frameworks and Competency Standards Development 3,036,369Curriculum Development 557,335Labour Market Information System Capability 250,238Workforce Planning Capability 212,360Training Effectiveness Review 20,416Others 575,270Learning Outreach and Promotional Activities 6,955,615Singapore Learning Promotion 5,008,153Other Programme Publicity 1,947,462Promotion of Human Capital Management 339,203Human Capital Management Programmes 339,203Others 4,582,937Administration of LLEF 4,582,937Total 46,278,032

fund achievements & financial highlightsThe LLEF Advisory Council played a very active role in providing strategic advice to WDA inFY2005. The Council formed two sub-committees and roped in industry representatives andbusiness leaders, to look into the various workforce challenges faced by Singapore, specificallythose pertaining to Small & Medium Enterprises (SMEs) and to Professionals, Managers,Executives and Technicians (PMETs).The findings and recommendations of both sub-committees were presented and endorsed bythe LLEF Advisory Council. A summary of their recommendations is presented below.Recommendations of the Sub-committee on SME outreach & developmentSMEs are an integral part of our economy. There are some 104,000 SME establishments in Singapore,contributing about one-third of the total value-add. Together, they employ more than half of the workforce.There is a general lack of focus on workforce development among SMEs. Productivity levels in SMEs aregenerally lower than larger companies, and training is often not viewed as a priority.The Sub-committee identified some key challenges faced by SMEs in workforce development:• High staff turnover, which resulted in SMEs’ reluctance in training their workers. This was compoundedby a perception among workers that larger companies were the employers of choice;• Lack of human resource (HR)/administrative capability to do training and development for their staff;• Few SME role models whom they could emulate for workforce development;> 69• Unable to afford the time to train new staff, resulting in SMEs’ preference to hire experiencedworkers; and• Generic government assistance schemes that were not customised to industry needs.The Sub-committee suggested a three-pronged approach, comprising:THRUST 1: Making assistance and development schemes more relevant to SMEs, such as• Providing funding support for training of sub-contract staff;• Introducing a SME manpower scheme to help match SMEs with unemployed PMETs who had relevantwork experience; and• Focusing on industry specific programmes.THRUST 2: Addressing SMEs’ lack of human resource and administrative capability by• Linking up HR experts with SMEs to provide advice;• Sharing of best practices to SMEs through Communities of Practice (COP); and• Developing a Human Capital Portal to improve access to HR information and resources.THRUST 3: Encouraging more SMEs to be more forward looking in workforce development by• Showcasing SME role models through media campaigns; and• Identifying early adopters to work with WDA on pilot schemes.

70 < WDA in Review 05/06Recommendations of the Sub-committee on PMET developmentPMETs form a significant portion (37%) of the workforce. Despite their higher qualifications, many PMETswere not spared from companies’ restructuring and retrenchment exercises in the last economic downturn.Besides the higher incidence of retrenchment among PMETs, this group also saw a higher rate of longtermunemployment.In a recent survey 6 on retrenched/unemployed PMETs, it was found that besides having relevant skills andexperience, an individual’s age and ability to revise expectations on wages were important considerationsin re-employment.The Sub-committee recognised that the most vulnerable segment within the PMET group was the olderworkers who were going through career transition. Many could not cope with the reality of competitive payand the sudden, and often, drastic economic adjustment. In addition, they faced more difficulties when lookingfor jobs, as many employers tended to hire younger workers for frontline and physically demanding jobs.The Sub-committee explored longer-term interventions such as setting up proper infrastructure to help PMETscope with future economic changes, and creating a culture of personal financial management.THRUST 1:Creating a culture of career and financial management by reaching out to employers,individuals and the HR community through a coordinated, targeted and sustained public messagingcampaign.THRUST 2: Strengthening the support infrastructure and network to enable a more responsivemarket mechanism for:• Hiring of PMETs – for instance, encouraging a more vibrant market for contract work through incentivesand networking with agencies; and providing public with more information on employment agencies;• Career Management – publishing more comprehensive information on wages; strengthening companies’capabilities in HR best practices and providing tools for career management; and providing careercounselling services (in partnership with other agencies); and• Skills Upgrading – providing employers enhanced incentives for hiring/re-training of older PMETs.6 Source: Retrenchment & Re-employment 2004 & Q2 Labour Market Survey Report, Ministry of Manpower.

fund achievements & financial highlightsTHE MEMBERS OF THE SUB-COMMITTEESMembers of the Sub-committee on SME outreach & development1 Mr Bill Chang(Chairman)Executive Vice-President,Corporate Business, SingTel2 Mr Chang Weng LeongDirector,Alchemy Business Consultants3 Mdm Chua Foo YongExecutive Vice President & Head,Group Business Development(Greater China/Media Academy),MediaCorp Pte Ltd4 Mr Douglas FooChief Executive Officer,Apex-Pal International Ltd5 Mr Khoo Teng LiatManaging Director,Wywy Office Solutions Pte Ltd6 Mr David KwokChairman,Singapore Animators Connection7 Mr Eugene LeeChief Executive Officer,Surfgold.com Pte Ltd8 Mr Anthony LimChief Executive Officer,Malifax Pte Ltd9 Mr Lim Chwee PohDirector,Strategic Business DevelopmentRichland Logistics Services Pte Ltd10 Ms Susan NgGeneral Manager,Rayco Technologies Pte Ltd11 Mr Kenny YapExecutive Chairman and Managing Director,Qian Hu Corporation Ltd12 Mr Yap Teck SengChief Executive Officer,Asaiki Pte Ltd> 71Members of the Sub-committee on PMET development1 Mr Jen Kwong Hwa(Chairman)Managing Director,Micron Semiconductor Asia Pte Ltd2 Mdm Halimah YacobAssistant Secretary General,National Trades Union Congress3 Mr Han Fook KwangEditor, The Straits TimesSingapore Press Holdings Ltd5 Mr Sam TanExecutive Director,Chinese Development Assistance Council6 Mr S VivakanandanChief Executive Officer,Singapore Indian Development Association7 Mr Yeoh Guan HuahImmediate Past Chairman,Singapore Professional Centre4 Ms Ho PengDirector,Curriculum Planning & Development Division,Ministry of Education

WDA in Review 05/06AACTABBESTCCATCCICDCCETDDCNEESSF72 < F&BFICSGlossaryFLDFPTIGGEMSIIGCISCISTCITEJJRPLLLEFAdvanced Certificate inTraining and AssessmentBasic Education for Skills TrainingComputer Adaptive TestCustomer Centric InitiativeCommunity Development CouncilContinuing Education and TrainingDistributed CareerLink NetworkEmployability Skills SystemFood & BeverageFinancial IndustryCompetency StandardsFrontline DivisionNTUC FairPrice Training InstituteGo-the-Extra-Mile for ServiceIncentives and Grants CommitteeITE Skills CertificateIndustry Skills and Training CouncilInstitute of Technical EducationJob Re-creation ProgrammeLifelong Learning Endowment FundNNITECNSRSNTUCPPMETPnTRREAPRESSNational ITE CertificateNational Skills Recognition SystemNational Trades Union CongressProfessionals, Managers, Executivesand TechniciansPlace and TrainRe-employment AssistanceProgrammeRe-employment Support SchemeSS2006 Singapore 2006SDFSkills Development FundSDLSkills Development LevySIRSSingapore Institute of Retail StudiesSLFSingapore Learning FestivalSMCPSMESNEFSOASRASRPSTBSUPERTTCTPWWDAWISEWSQStrategic ManpowerConversion ProgrammeSmall and Medium EnterpriseSingapore NationalEmployers’ FederationStatement of AttainmentSingapore Retailers AssociationSkills Redevelopment ProgrammeSingapore Tourism BoardSME Upgrading forPERformance SchemeTotal Company Training PlanSingapore WorkforceDevelopment AgencyWorker Improvement throughSecondary EducationSingapore Workforce SkillsQualificationsMMDASMSTCManpower DevelopmentAssistance SchemeManpower Skills and Training Council11I2S1-Institute-2-Systems Scheme

financial statements for the year ended 31 march 2006: singapore work development agencyFinancial StatementsFor the year ended 31 March 2006Singapore WorkforceDevelopment AgencyCONTENTS1 Auditors’ Report2 Balance Sheet3 Income and Expenditure Statement3 Statement of Changes in Capital and Accumulated Surplus4 Cash Flow Statement5 Notes to the Financial Statements

WDA in Review 05/06In our opinion:(a)(b)01

financial statements for the year ended 31 march 2006: singapore work development agencyBalance Sheet31 March 2006 31 March 2005Notes $ $AssetsNon-CurrentProperty, plant and equipment 3 3,987,972 3,258,474CurrentOther current assets 4 1,004,687 452,054Cash and cash equivalents 5 25,170,458 13,716,45926,175,145 14,168,513LiabilitiesNon-CurrentDeferred government capital grant 6 1,517,117 97,720CurrentPayables 7 10,756,313 5,023,386Provision for contribution to Consolidated Fund 1,204,615 439,43811,960,928 5,462,824Net Assets 16,685,072 11,866,443Net Assets of Specific FundSkills Development Fund 8 763,024,192 729,147,458Lifelong Learning Endowment Fund 9 860,506 252,402763,884,698 729,399,860780,569,770 741,266,303> 02Represented by:Capital account 7,872,073 7,872,073Accumulated surplus 8,812,999 3,994,37016,685,072 11,866,443Skills Development Fund 8 763,024,192 729,147,458Lifelong Learning Endowment Fund 9 860,506 252,402780,569,770 741,266,303Yong Ying-IChairmanOng Ye KungChief Executive24 July 2006The annexed notes form an integral part of and should be read in conjunction with these financial statements.

03 < WDA in Review 05/06Income and Expenditure StatementYear endedYear ended31 March 2006 31 March 2005Notes $ $IncomeWorkers’ assessment fees 235,247 340,183Application fees 128,780 29,190Interest income on bank deposits 282,396 70,351Other income 1,017 -647,440 439,724ExpenditureAdministrative expenses 5,791,912 6,084,354Depreciation of property, plant and equipment 3 847,376 710,182Grant disbursements 35,653,806 44,358,773Rental expenses 1,172,476 877,360Employee benefit costs 10 17,114,256 17,250,70160,579,826 69,281,370Excess of expenditure over income before grants 11 (59,932,386) (68,841,646)Grants 12 65,955,460 71,037,987Surplus before contribution to Consolidated Fund 6,023,074 2,196,341Contribution to Consolidated Fund 13 (1,204,445) (496,809)Net surplus for the year 4,818,629 1,699,532Statement of Changes in Capital and Accumulated SurplusCapitalAccumulatedAccount Surplus Total$ $ $Balance at 1 April 2004 7,872,073 2,294,838 10,166,911Net surplus for the year - 1,699,532 1,699,532Balance at 31 March 2005 7,872,073 3,994,370 11,866,443Net surplus for the year - 4,818,629 4,818,629Balance at 31 March 2006 7,872,073 8,812,999 16,685,072The annexed notes form an integral part of and should be read in conjunction with these financial statements.

financial statements for the year ended 31 march 2006: singapore work development agencyCash Flow StatementYear endedYear ended31 March 2006 31 March 2005$ $Cash Flows from Operating ActivitiesExcess of expenditure over income before grants (59,932,386) (68,841,646)Adjustments for:Depreciation of property, plant and equipment (Note 3) 847,376 710,182Capital work-in-progress expensed off (Note 3) - 483,174Loss/(gain) on disposal of property, plant and equipment 14,513 (575)Interest income (282,396) (70,351)Operating deficit before working capital changes (59,352,893) (67,719,216)Increase in operating receivables (502,500) (284,043)Decrease in operating payables (684,835) (468,793)Contribution to Consolidated Fund (439,268) (631,081)Net cash used in operating activities (60,979,496) (69,103,133)Cash Flows from Investing ActivitiesAcquisition of property, plant and equipment (1,598,667) (474,393)Fixed deposit (300,000) (4,700,000)Interest received 201,707 35,020Proceeds from disposal of property, plant and equipment 7,280 17,180Net cash used in investing activities (1,689,680) (5,122,193)> 04Cash Flows from Financing ActivityGrants received from Government 73,823,175 70,865,040Net cash generated from financing activity 73,823,175 70,865,040Net increase/(decrease) in cash and cash equivalents 11,153,999 (3,360,286)Cash and cash equivalents at beginning of year 9,016,459 12,376,745Cash and cash equivalents at end of year (Note 5) 20,170,458 9,016,459The annexed notes form an integral part of and should be read in conjunction with these financial statements.

Notes to the Financial StatementsWDA in Review 05/061 GENERAL INFORMATIONThe principal activities of the Agency are:(a)(b)(c)(d)(e)05

financial statements for the year ended 31 march 2006: singapore work development agencyNotes to the Financial Statements2(a) BASIS OF PREPARATIONThe financial statements are prepared in accordance with the accounting standards as specified by the Ministry ofFinance and the provisions of the Singapore Workforce Development Agency Act, Cap 305D.As specified by the Ministry of Finance, Statutory Boards are to comply with all the Singapore Financial ReportingStandards (“FRS”), except for disclosure of related party transactions as required by FRS No. 24, Related PartyDisclosures.The financial statements have been prepared under the historical cost convention, except as disclosed in theaccounting policies below.Significant Accounting Estimates and JudgementsThe preparation of the financial statements in conformity with the FRS requires the use of judgements, estimatesand assumptions that affect the reported amounts of assets and liabilities at the date of the financial statementsand the reported amounts of income and expenditure during the financial year. Although these estimates are basedon management’s best knowledge of current events and actions, actual results may ultimately differ from thoseestimates.2(b) CHANGE IN ACCOUNTING POLICIESWith effect from 1 January 2005, the following new and revised FRS issued by the Council on Corporate Disclosureand Governance (“CCDG”), are relevant to the Agency as a single entity:> 06FRS 1 (revised 2004)FRS 8 (revised 2004)FRS 10 (revised 2004)FRS 16 (revised 2004)FRS 17 (revised 2004)FRS 21 (revised 2004)FRS 24 (revised 2004)FRS 32 (revised 2004)FRS 36 (revised 2004)FRS 39 (revised 2004)Interpretation (“INT”) of FRS 101Presentation of Financial StatementsAccounting Policies, Changes in Accounting Estimatesand ErrorsEvents after Balance Sheet DateProperty, Plant and EquipmentLeasesThe Effects of Changes in Foreign Exchange RatesRelated Party DisclosuresFinancial Instruments: Disclosure and PresentationImpairment of AssetsFinancial Instruments: Recognition and MeasurementChanges in Existing Decommissioning, Restoration andSimilar LiabilitiesThe adoption of the above FRS and INT FRS did not result in substantial changes to the Agency’s accountingpolicies except as follows:Adoption of FRS 32 and FRS 39The specific transitional provisions contained within FRS 32 and FRS 39 required the simultaneous adoption of bothstandards.In accordance with the transitional provisions of FRS 32, all revised disclosure and presentation rules regardingfinancial instruments have been applied retrospectively.In accordance with the transitional provisions of FRS 39, the adoption of the revised rules regarding accounting forfinancial instruments did not result in restating any comparatives.

WDA in Review 05/06Notes to the Financial Statements2(b) CHANGE IN ACCOUNTING POLICIES (cont’d)(i) Held-to-maturity investmentsIn the prior years, the SDF’s investments in bonds were stated at cost less provision for diminution in value that wasother than temporary, which was charged to the income and expenditure statement when it arose. Any reversal ofthe provision was also included in the income and expenditure statement.On adopting FRS 39, certain investments in bonds are now classified in the “held-to-maturity investments” categoryand are initially recognised at fair value plus transaction costs and subsequently accounted for at amortised costusing the effective interest method, less accumulated impairment loss (see policy on financial assets - held-tomaturityinvestments).At the date of authorisation of these financial statements, the following Standards and Interpretations were in issuebut not yet effective:FRS 40Investment PropertyFRS 106Exploration for and Evaluation of Mineral ResourcesFRS 107Financial Instruments: DisclosuresINT FRS 104Determining whether an Arrangement contains a LeaseINT FRS 105Rights to Interests arising from Decommissioning, Restoration andEnvironmental Rehabilitation Funds07 < INT FRS 106Liabilities arising from Participating in a Specific Market - WasteElectrical and Electronic EquipmentINT FRS 107Applying the Restatement Approach under FRS 29 Financial Reportingin Hyperinflationary EconomiesFRS 39 (revised) Amendments to hedge accounting provisions of FRS 39Some of these Standards and Interpretations are not applicable to the Agency. The management anticipates thatthe adoption of these Standards and Interpretations in future periods will have no material impact on the financialstatements of the Agency.2(c) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESIncome RecognitionWorkers’ assessment fees, application fees and interest income are recognised on an accrual basis.Interest income is recognised on a time proportion basis using the effective interest method.Property, Plant and Equipment and DepreciationProperty, plant and equipment are stated at cost less accumulated depreciation and impairment losses, if any.Depreciation is computed using the straight-line method to write off the cost of these assets over their expecteduseful lives as follows:Furniture and fittingsOffice equipmentComputer equipment and software8 years5 years3-5 yearsThe cost of property, plant and equipment includes expenditure that is directly attributable to the acquisition of theitems. Dismantlement, removal or restoration costs are included as part of the cost of property, plant and equipmentif the obligation for dismantlement, removal or restoration is incurred as a consequence of acquiring or using theasset. Cost may also include transfers from equity of any gains/losses on qualifying cash flow hedges of foreigncurrency purchases of property, plant and equipment, if any.

financial statements for the year ended 31 march 2006: singapore work development agencyNotes to the Financial StatementsProperty, Plant and Equipment and Depreciation (cont’d)For acquisitions and disposals during the financial year, depreciation is provided from the month of acquisition tothe month before disposal respectively. No depreciation is provided on capital work-in-progress. Fully depreciatedproperty, plant and equipment are retained in the accounts until they are no longer in use.Property, plant and equipment costing less than $1,000 each are charged to the income and expenditure statementin the year of purchase as low value assets.Repairs and maintenance are taken to the income and expenditure statement. The cost of major renovations andrestorations is included in the carrying amount of the asset when it is probable that future economic benefits inexcess of the originally assessed standard of performance of the existing asset will flow to the Agency, and depreciatedover the remaining useful life of the asset.Where an indication of impairment exists, the carrying amount of the asset is assessed and written down immediatelyto its recoverable amount.Gains and losses on disposals are determined by comparing proceeds with carrying amounts and are included inthe income and expenditure statement.Financial AssetsFinancial assets include cash and financial instruments. Financial assets, other than hedging instruments, can bedivided into the following categories: financial assets at fair value through profit or loss, held-to-maturity investments,loans and receivables and available-for-sale financial assets. Financial assets are assigned to the different categoriesby management on initial recognition, depending on the purpose for which the investments were acquired. Thedesignation of financial assets is re-evaluated and classification may be changed at the reporting date with theexception that the designation of financial assets at fair value through profit or loss is not revocable.> 08All financial assets, less those recognised using hedging accounting, are recognised on their settlement date.Financial assets are initially recognised at fair value, plus directly attributable transaction costs except for financialassets at fair value through profit or loss, which are recognised at fair value.Derecognition of financial instruments occurs when the rights to receive cash flows from the investments expire orare transferred and substantially all of the risks and rewards of ownership have been transferred. An assessmentfor impairment is undertaken at least at each balance sheet date whether or not there is objective evidence that afinancial asset or a group of financial assets is impaired.Non-compounding interest and other cash flows resulting from holding financial assets are recognised in profit orloss when received, regardless of how the related carrying amount of financial assets is measured.• Held-to-maturity investmentsHeld-to-maturity investments are non-derivative financial assets with fixed or determinable payments and a fixeddate of maturity that the Agency has the positive intent and ability to hold to maturity. Held-to-maturity investmentsare subsequently measured at amortised cost using the effective interest method.Amortised cost is calculated by taking into account any discount or premium in acquisition. Amortisation is calculatedaccording to FRS No. 39, effective interest method to write off any premium or discount on acquisition of bondsover the period from acquisition to their maturity.In addition, if there is objective evidence that the investment has been impaired, the financial asset is measured atthe present value of estimated cash flows. Any changes to the carrying amount of the investment are recognisedin the income and expenditure statement. Any reversal shall not result in a carrying amount that exceeds what the

09 < WDA in Review 05/06Notes to the Financial Statements• Held-to-maturity investments (cont’d)amortised cost would have been had any impairment loss not been recognised at the date the impairment is reversed.Any reversal is recognised in the income and expenditure statement.• Loans and receivablesLoans and receivables are non-derivative financial assets with fixed or determinable payments that are not quotedin an active market. They arise when the Agency provides money, goods or services directly to a debtor with nointention of trading the receivables. They are included in current assets, except for maturities greater than 12 monthsafter the balance sheet date. These are classified as non-current assets.Loans and receivables are subsequently measured at amortised cost using the effective interest method,less provision for impairment. Any change in their value is recognised in income statement. Any reversal shallnot result in a carrying amount that exceeds what the amortised cost would have been had any impairmentloss not been recognised at the date the impairment is reversed. Any reversal is recognised in the income andexpenditure statement.Receivables are provided against when objective evidence is received that the Agency will not be able to collect allamounts due to it in accordance with the original terms of the receivables. The amount of the write-down is determinedas the difference between the asset’s carrying amount and the present value of estimated future cash flows.• Determination of fair valueThe fair values of quoted financial assets are based on current bid prices. If the market for a financial asset is notactive, the Agency establishes fair value by using valuation techniques. These include the use of recent arm’s lengthtransactions, reference to other instruments that are substantially the same, discounted cash flow analysis, andoption pricing modelsCash and Cash EquivalentsCash and cash equivalents comprise cash at bank, bank deposits with a short maturity of three months or less anddeposits held at call with a central government agency.Financial LiabilitiesThe Agency’s financial liabilities include deferred government capital grant and other payables.Financial liabilities are recognised when the Agency becomes a party to the contractual agreements of the instrument.All interest related charges is recognised as an expense in “finance costs” in the income and expenditure statement.Payables are initially carried at cost which is the fair value of the consideration to be paid in the future for goodsand services received, whether or not billed to the Agency. Subsequently, payables are measured at amortised cost,using the effective interest method.Contribution to Consolidated FundThe contribution to the Consolidated Fund is required under Section 3(a) of the Statutory Corporations (Contributionsto Consolidated Fund) Act (Cap. 319A). The contribution is pegged at the prevailing statutory income tax rate forcorporate bodies.Accounting surplus would be used for the purpose of computing the Contribution and this is accounted for on anaccrual basis.

financial statements for the year ended 31 march 2006: singapore work development agencyNotes to the Financial StatementsTrust and Agency FundsTrust and agency funds are set up to account for monies held in trust for external parties. Income and expenditureof these funds are taken directly to the funds and the net assets relating to these funds are shown as a separateitem in the balance sheet.Trust and agency funds are accounted for on an accrual basis.GrantsOperating grants to meet the current year’s operating expenditure are recognised as income in the same year.Operating and capital grants for the purchase of depreciable assets and donations of depreciable assets are takento deferred government capital grants. The deferred grants are recognised in the income and expenditure statementover the periods necessary to match the depreciation or impairment of the assets purchased with the related grantsand the net book values of such assets disposed.Government grants for establishment of the Agency are recorded in the capital account.Grants are accounted for on an accrual basis.Operating LeasesLeases of assets in which a significant portion of the risks and rewards of ownership are retained by the lessor areclassified as operating leases.> 10Rentals on operating leases are charged to income and expenditure statement on a straight-line basis over the leaseterm. Lease incentives, if any, are recognised as an integral part of the net consideration agreed for the use of theleased asset. Penalty payments on early termination, if any, are recognised in the income and expenditure statementwhen incurred.ProvisionsProvisions are recognised when the Agency has a present obligation (legal or constructive) as a result of a pastevent, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligationand a reliable estimate can be made of the amount of the obligation. Provisions are reviewed at each balance sheetdate and adjusted to reflect the current best estimates.Employee BenefitsContribution to Central Provident FundThe Agency contributes to the Central Provident Fund (“CPF”), a defined contribution plan regulated and managedby the Government of Singapore, which applies to the majority of the employees. The Agency’s contributions toCPF are charged to the income and expenditure statement in the period to which the contributions relate.Employee Leave EntitlementsEmployee entitlements to annual leave are recognised when they accrue to employees. Provision is made for theestimated liability for unconsumed leave as a result of services rendered by employees up to the balance sheet date.Impairment of AssetsThe carrying amounts of the Agency’s assets subject to impairment are reviewed at each balance sheet date todetermine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amountis estimated.If it is not possible to estimate the recoverable amount of the individual asset, then the recoverable amount of thecash-generating unit to which the assets belongs will be identified.

11 < WDA in Review 05/06Notes to the Financial StatementsImpairment of Assets (cont’d)For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separatelyidentifiable cash flows (cash-generating units). As a result, some assets are tested individually for impairment andsome are tested at cash-generating unit level.All individual assets or cash-generating units are tested for impairment whenever events or changes in circumstancesindicate that the carrying amount may not be recoverable.An impairment loss is recognised for the amount by which the asset’s or cash-generating unit’s carrying amountexceeds its recoverable amount. The recoverable amount is the higher of fair value, reflecting market conditions lesscosts to sell and value in use, based on an internal discounted cash flow evaluation.Any impairment loss is charged to the income and expenditure statement unless it reverses a previous revaluationin which case it is charged to equity.An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amountor when there is an indication that the impairment loss recognised for the asset no longer exists or decreases.An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carryingamount that would have been determined if no impairment loss had been recognised.A reversal of an impairment loss on a revalued asset is credited directly to equity under the heading revaluationsurplus. However, to the extent that an impairment loss on the same revalued asset was previously recognised asan expense in the income and expenditure statement, a reversal of that impairment loss is recognised as incomein the income and expenditure statement.Functional CurrencyItems included in the financial statements of the Agency are measured using the currency that best reflects theeconomic substance of the underlying events and circumstances relevant to the Agency (“the functional currency”).The financial statements of the Agency are presented in Singapore dollars, which is also the functional currency ofthe Agency.Conversion of Foreign CurrenciesMonetary assets and liabilities in foreign currencies are translated into Singapore dollars at rates of exchange closelyapproximating those ruling at balance sheet date. Transactions in foreign currencies are converted at rates closelyapproximating those ruling at transaction dates. Exchange differences arising from such transactions are recordedin the income and expenditure statement in the period in which they arise.Financial InstrumentsFinancial instruments carried on the balance sheet include cash and cash equivalents, financial assets and financialliabilities. The particular recognition methods adopted are disclosed in the individual policy statements associatedwith each item.Disclosures on financial risk management objectives and policies are provided in Note 17.

financial statements for the year ended 31 march 2006: singapore work development agencyNotes to the Financial Statements3 PROPERTY, PLANT AND EQUIPMENTComputer CapitalFurniture Office equipment work-inandfittings equipment and software progress Total$ $ $ $ $CostAt 1 April 2004 36,651 166,315 449,794 3,379,119 4,031,879Additions 116,452 137,568 131,138 185,313 570,471Transfer from capitalwork-in-progress 2,304,531 352,854 394,599 (3,051,984) -Transfer to income andexpenditure statement* - - - (483,174) (483,174)Disposals (13,956) (13,904) (34,402) - (62,262)At 31 March 2005 2,443,678 642,833 941,129 29,274 4,056,914Additions 15,346 36,026 175,340 1,371,955 1,598,667Transfer from capitalwork-in-progress 1,246,882 77,300 51,230 (1,375,412) -Disposals (22,754) (433) (95,582) - (118,769)At 31 March 2006 3,683,152 755,726 1,072,117 25,817 5,536,812Accumulated depreciation> 12At 1 April 2004 3,000 11,859 119,056 - 133,915Depreciation for the year 302,389 139,723 268,070 - 710,182Disposals (1,118) (10,226) (34,313) - (45,657)At 31 March 2005 304,271 141,356 352,813 - 798,440Depreciation for the year 422,077 143,663 281,636 - 847,376Disposals (3,877) (433) (92,666) - (96,976)At 31 March 2006 722,471 284,586 541,783 - 1,548,840Net book valueAt 31 March 2006 2,960,681 471,140 530,334 25,817 3,987,972At 31 March 2005 2,139,407 501,477 588,316 29,274 3,258,474* The transfer related to furniture and fittings and office equipment, which fell below the Agency’scapitalisation policy of amounts less than $1,000. These assets were written off to the income andexpenditure statement in FY2004 as they were previously capitalised under capital-work-in-progress.

13 < WDA in Review 05/06Notes to the Financial Statements4 OTHER CURRENT ASSETS2006 2005$ $Deposits 397,170 5,200Receivables 283,654 179,866Less : Provision for impairment of receivables (3,703) -279,951 179,866Prepayments 279,538 226,539Grants receivable 48,028 40,4491,004,687 452,0545 CASH AND CASH EQUIVALENTS2006 2005$ $Cash at bank 3,107,824 2,099,608Deposits at call held with the Ministry of Finance,Accountant-General’s Department 2,457,634 1,916,851Fixed deposits with banks :- Maturity of three months or less after year end 14,605,000 5,000,000- Maturity of more than three months after year end 5,000,000 4,700,00025,170,458 13,716,459Deposits with the Ministry of Finance, Accountant-General’s Department are non-interest bearing.The fixed deposits have an average maturity of 4.8 months (2005 - 4.5 months) from the end of the financial yearwith weighted average effective interest rate of 2.78% (2005 - 1.43%).For the purpose of the cash flow statement, the year end cash and cash equivalents comprise the following:2006 2005$ $Cash at bank 3,107,824 2,099,608Deposits at call held with the Ministry of Finance,Accountant-General’s Department 2,457,634 1,916,851Fixed deposits with bankswith maturity of three months or less after year end 14,605,000 5,000,00020,170,458 9,016,459

financial statements for the year ended 31 march 2006: singapore work development agencyNotes to the Financial Statements6 DEFERRED GOVERNMENT CAPITAL GRANT2006 2005$ $At beginning of year 97,720 29,773Addition during the year 1,882,376 108,3601,980,096 138,133Deferred capital grant amortised (Note 12) (462,979) (40,413)At end of year 1,517,117 97,7207 PAYABLES2006 2005$ $Operating payables 248,580 794,915Accrued payables 2,547,655 2,623,785Amount due to Ministry of Manpower (“MOM”) 434,028 488,474Grants received in advance :- Manpower Development Assistance Scheme (“MDAS”) [Note A] 4,369,475 495,422- National Skills Recognition System (“NSRS”) [Note A] - 221,660- Re-employment Support Scheme (“RESS”) [Note A] 169,608 390,000- Centre for Employability Skills (“CES”) [Note A] 2,915,761 -7,454,844 1,107,082Funds held for:- Self-Employment Assistance Programme (“SEAP”) * 70,000 -Advanced billing/receipt 1,206 9,13010,756,313 5,023,386> 14* The Self-Employment Assistance Programme (“SEAP”) is a training, incubation and self-employmentinitiative to encourage mature, lower income, chronically unemployed individuals to set up their ownlivelihood businesses or micro-enterprises. In March 2006, the Ministry of Community Development,Youth and Sports (“MCYS”) contributed a grant to the applicants of the SEAP for defraying the startupand rental costs of the livelihood businesses or micro-enterprises that the applicants will set up.

7 PAYABLES (cont’d)Note A15 < WDA in Review 05/06Notes to the Financial StatementsBalance at the beginning of year:MDAS (a) NSRS (b) PJTP (c)2006 2005 2006 2005 2006 2005$ $ $ $ $ $Grants receivable - - - - (40,449) (86,079)Grants received in advance 495,422 329,190 221,660 1,064,416 - -Receipts during the year 28,930,593 33,662,731 3,051,024 4,487,697 9,441,474 16,289,501Transfer to NSRS - (4,487,697) - - - -Transfer to income andexpenditure statement (25,056,540) (29,008,802) (2,435,444) (3,022,261) (9,401,025) (16,243,871)Transfer to deferred capital grants - - - - - -Income/unutilised grant returnedto government - - (885,268) (2,308,192) - -Grants receivable at end of year - - (48,028) - - (40,449)Grants received in advanceat end of year 4,369,475 495,422 - 221,660 - -(a) The Manpower Development Assistance Scheme (“MDAS”) was set up in February 2000 with a government commitment of $200million over 5 years, from FY2000 to FY2004. It is targeted at industry-wide initiatives aimed at enhancing workforce capabilitiesthrough the Workforce Development Programmes, National Skills Recognition System (“NSRS”) and Learning Infrastructure.(b)(c)The National Skills Recognition System (“NSRS”), is a national framework for establishing work performance standards, identifyingjob competencies and certifying skills acquisition. The programme, funded by MDAS up to FY2004 is funded by LLEF in FY2005.The People for Jobs Traineeship Programme (“PJTP”) was part of the October 2001 off-budget measures. It was extended twiceand has ended on 31 December 2005. PJTP encourages employers to make available suitable job opportunities for local workerswho are aged 40 years and above and are making career transitions from one industry and/or job function to a different one. Itis a programme that offers employers an incentive in the form of wage support in return for putting in place traineeship/mentorshiparrangements to help newly recruited mature workers with no relevant experience to fit into new jobs and work environment.

financial statements for the year ended 31 march 2006: singapore work development agencyNotes to the Financial StatementsRESS (d) OSE (e) CES (f) Operating grants Total2006 2005 2006 2005 2006 2005 2006 2005 2006 2005$ $ $ $ $ $ $ $ $ $- - - - - - - - (40,449) (86,079)390,000 - - - - - - - 1,107,082 1,393,606187,338 390,000 1,090,000 - 4,461,761 - 27,438,118 22,831,000 74,600,308 77,660,929- - - - - - - - - (4,487,697)(407,730) - (90,959) - (1,546,000) - (26,554,783) (22,722,640) (65,492,481) (70,997,574)- - (999,041) - - - (883,335) (108,360) (1,882,376) (108,360)- - - - - - - - (885,268) (2,308,192)- - - - - - - - (48,028) (40,449)> 16169,608 390,000 - - 2,915,761 - - - 7,454,844 1,107,082(d)(e)(f)The Re-employment Support Scheme (“RESS”) is a scheme, funded by LLEF that aims at helping to sustain re-employment forSingaporean job seekers who are at risk of structural unemployment.The fund for Office Space Expansion and Set-up (“OSE”) is a grant received from LLEF for space expansion to cater for additionalheadcount required for the programme and capabilities that the Agency was building up to deal with the structural unemployment.In November 1998, the Bukit Merah Skills Development Centre (“BMSDC”) was established as part of the off-budget measureto offer full-time training facilities for workers and to expand training resources for companies in Singapore. During the year, thecentre is repositioned into a Centre for Employability Skills (“CES”) which co-ordinates and delivers courses, appraises andassesses workers’ and trainees’ skills and provides facilities for organisations to operate training and administer EmployabilitySkills System (“ESS”), National Continuing Education and Training Framework (“NCETF”) and Skills Redevelopment Programme(“SRP”). The balance amount from the former BMSDC was transferred by the Institute of Education (“ITE”) to the Agency. Thenew centre manager is Nanyang Polytechnic.

WDA in Review 05/06Notes to the Financial Statements8 SKILLS DEVELOPMENT FUNDThe Skills Development Fund (“the SDF”) was established in the Republic of Singapore on 1 October 1979 as aGovernment fund under the Skills Development Levy Act (Cap. 306). With effect from 1 September 2003, theadministration of the SDF was transferred from the Ministry of Manpower (“MOM”) to the Agency.The SDF is established for the following purposes:(a) the promotion, development and upgrading of skills and expertise of persons preparing to join the workforce,persons in the workforce and persons rejoining the workforce;(b) the retraining of retrenched persons; and(c) the provision of financial assistance by grants, loans or otherwise for the purpose of the above-mentioned purposes.The net assets of the SDF that is administered by the Agency as at 31 March 2006 are as follows:2006 2005$ $Accumulated deficit at beginning of year (141,991,238) (141,229,575)Effects of adopting FRS 39 - adjustedprospectively for held-to-maturity investments (373,916) -(142,365,154) (141,229,575)17 < IncomeSkills development levy 91,955,383 69,843,799Less:ExpenditureDisbursements 69,127,682 75,792,612Less: Refunds (886,834) (1,183,275)Depreciation 502,755 436,638Other expenditure 4,910,528 4,568,47473,654,131 79,614,449Non-operating income and expenditureInvestment Advisor expenses (101,520) -Interest income 16,049,390 9,008,987Gain on foreign exchange 1,528 -15,949,398 9,008,987Net surplus/(deficit) for the year 34,250,650 (761,663)Accumulated deficit at end of year (108,114,504) (141,991,238)Capital account 871,138,696 871,138,696763,024,192 729,147,458Represented by:Property, plant and equipment 2,888,186 2,761,382Less: Accumulated depreciation (2,116,325) (1,619,986)771,861 1,141,396Receivables 8,296,690 5,606,873Investments 243,579,611 246,699,147Cash and cash equivalents 512,575,142 477,859,434Payables (2,199,112) (2,159,392)763,024,192 729,147,458

financial statements for the year ended 31 march 2006: singapore work development agencyNotes to the Financial Statements9 LIFELONG LEARNING ENDOWMENT FUNDThe Lifelong Learning Endowment Fund (“the LLEF”) is set up by the Singapore Government under the LifelongLearning Endowment Fund Act, Cap.162A for the acquisition of skills and expertise by persons and the developmentand upgrading of skills and expertise of persons to enhance their employability; and the promotion of the acquisition,development and upgrading of skills and expertise to enhance the employability of persons.The Agency has been appointed by MOM as the administrator of the LLEF to receive and deploy the grant forprogrammes that are congruent with the objectives of the LLEF.The net assets of the LLEF that is administered by the Agency as at 31 March 2006 are as follows:2006 2005$ $Accumulated surplus at the beginning of the year 252,402 1,793,713IncomeRefund of unused grant from programme managers 1,516,618 3,524,188Interest income 5,605 64,377Seminar fees 11,500 3,000Other income 11,160 9,0001,544,883 3,600,565> 18Less:ExpenditureGrants disbursed 41,293,400 37,506,344Marketing and promotion expenses 4,944,312 4,506,894Administrative expenses 40,320 24,30446,278,032 42,037,542Add:Grants received 45,341,253 36,895,666Surplus/(deficit) for the year 608,104 (1,541,311)Accumulated surplus at end of year 860,506 252,402Represented by:Receivable - 2,876Cash and cash equivalents 1,030,986 491,372Payables (170,480) (241,846)860,506 252,402The financial statements of the LLEF are prepared by MOM and audited by another firm of auditors.

WDA in Review 05/06Notes to the Financial Statements10 EMPLOYEE BENEFIT COSTS19

financial statements for the year ended 31 march 2006: singapore work development agencyNotes to the Financial Statements13 CONTRIBUTION TO CONSOLIDATED FUNDThe Agency is exempted from Singapore Income Tax under Section 13(1)(e) of the Income Tax Act.The contribution to the Consolidated Fund is required under Section 3(a) of the Statutory Corporations (Contributionsto Consolidated Fund) Act (Cap. 319A). The contribution is pegged at the prevailing statutory corporate income taxrate of 20%.2006 2005$ $Current year 1,204,615 439,438(Over)/under provision in respect of prior year (170) 57,3711,204,445 496,80914 OPERATING LEASE COMMITMENTSThe future aggregate minimum lease payments under non-cancellable operating leases contracted for at the reportingdate but not recognised as liabilities, are as follows:2006 2005$ $> 20Not later than one year 1,840,950 1,552,000Later than one year and not later than five years 3,861,979 4,409,84815 BANKER’S GUARANTEE2006 2005$ $Banker’s guarantee for office space - 388,00016 CAPITAL COMMITMENTSCapital commitments not provided for in the financial statements are as follows:2006 2005$ $Amount approved and contracted for 6,454 41,820Amount approved but not contracted for 53,000 -

21 < WDA in Review 05/06Notes to the Financial Statements17 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIESThe main risks arising from the Agency’s financial instruments are foreign currency risk, interest rate risk, credit risk andprice risk which are summarised below:The Agency does not hold or issue derivative financial instruments for trading purposes or to hedge against fluctuations,if any, in interest rates and foreign exchange.17.1 Currency RiskCurrency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreignexchange rates.The Agency’s exposure to foreign currency risk is minimal as majority of its transactions are in Singapore dollars.17.2 Cash Flow and Fair Value Interest Rate RiskCash flow interest rate risk is the risk that future cash flows of a financial instrument will fluctuate because ofchanges in market interest rates. Fair value interest rate risk is the risk that the value of a financial instrumentwill fluctuate due to changes in market interest rates.The Agency places cash balances with reputable financial institutions or government bodies.The Agency’s exposure to interest rate risk relates primarily to the Agency’s fixed/short-term bank deposits. TheAgency manages its interest rate risk by placing such balances on varying maturities and interest rate terms.17.3 Credit RiskCredit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the otherparty to incur a financial loss.The Agency has no significant concentration of credit risk with any single counterparty as it operates substantiallyon cash term.17.4 Price RiskPrice risk is the risk that the value of a financial instrument will fluctuate due to changes in market prices whetherthose changes are caused by factors specific to the individual security or its issuer or factors affecting all securitiestraded in the market.18 FINANCIAL INSTRUMENTSFair ValuesThe carrying amount of financial assets and liabilities with a maturity of less than one year is assumed to approximatetheir fair values.It is not practicable to estimate the fair value of unquoted equity securities, due to the absence of quoted market prices,without incurring excessive costs.However, the Agency does not anticipate that the carrying amounts recorded at balance sheet date would be significantlydifferent from the values that would eventually be received or settled.

financial statements for the year ended 31 march 2006: skills development fundFinancial StatementsFor the year ended 31 March 2006Skills Development FundCONTENTS1 Auditors’ Report2 Balance Sheet3 Income and Expenditure Statement4 Statement of Changes in Capital and Accumulated Deficit5 Cash Flow Statement6 Notes to the Financial Statements

WDA in Review 05/06In our opinion:(a)(b)01

financial statements for the year ended 31 march 2006: skills development fundBalance Sheet31 March 2006 31 March 2005Notes $ $AssetsNon-CurrentProperty, plant and equipment 3 771,861 1,141,396Held-to-maturity investments 4 203,234,492 226,347,150204,006,353 227,488,546CurrentHeld-to-maturity investments 4 40,345,119 20,351,997Refund of assistance previously disbursed andunderpaid levy receivable 5 163,213 126,250Levy collection due from CPF Board 473,218 2,659,965Other receivables 6 7,660,259 2,820,658Cash and cash equivalents 7 512,575,142 477,859,434561,216,951 503,818,304LiabilitiesCurrentAssistance committed and payable andoverpaid levy refundable 1,539,709 1,496,263Accrued expenses 659,403 663,1292,199,112 2,159,392Net current assets 559,017,839 501,658,912Net assets 763,024,192 729,147,458> 02Represented by:Capital account 871,138,696 871,138,696Accumulated deficit (108,114,504) (141,991,238)763,024,192 729,147,458Ong Ye KungChief ExecutiveSingapore Workforce Development AgencyLynn NgDirectorIncentives & Finance24 July 2006The annexed notes form an integral part of and should be read in conjunction with these financial statements.

03 < WDA in Review 05/06Income and Expenditure StatementYear endedYear ended31 March 2006 31 March 2005Notes $ $Operating IncomeSkills development levy from:- Private sector 8 88,418,805 67,315,219- Statutory boards 8 1,674,861 1,282,967- Government 8 1,861,702 1,227,514- Other income 15 18,09991,955,383 69,843,799Operating ExpenditureDisbursements 69,127,682 75,792,612Less: Refunds (886,834) (1,183,275)Agency fee paid to CPF Board 9 383,775 327,462Impairment for doubtful debts 31,890 40,678Impairment for doubtful debts written back (59,997) (64,425)Audit fee 16,000 17,405Bad debts written off - 379CPF contributions 367,529 353,887Depreciation 3 502,755 436,638General administrative expenses 814,146 805,266Loss on disposal of property, plant and equipment - 394Professional fee 302,738 189,259Rental expense 165,659 176,840Salaries and allowances 2,829,414 2,666,956Staff development 20,868 27,145Staff welfare 38,506 27,22873,654,131 79,614,449Operating surplus / (deficit) 10 18,301,252 (9,770,650)Non-operating Income and ExpenditureInvestment Advisor expenses (101,520) -Interest income from:- bank deposits 10,130,171 5,120,258- investment securities bonds 14 5,918,188 3,888,339- others 1,031 390Gain/(loss) on foreign exchange 1,528 -15,949,398 9,008,987Net surplus / (deficit) for the year 34,250,650 (761,663)The annexed notes form an integral part of and should be read in conjunction with these financial statements.

financial statements for the year ended 31 march 2006: skills development fundStatement of Changes in Capital and Accumulated DeficitCapitalAccumulatedaccount deficit Total$ $ $Balance at 1 April 2004 871,138,696 (141,229,575) 729,909,121Net deficit for the year - (761,663) (761,663)Balance at 31 March 2005As previously reported 871,138,696 (141,991,238) 729,147,458Effects of adopting FRS 39 –adjustedfor held-to-maturity investments - (373,916) (373,916)As restated 871,138,696 (142,365,154) 728,773,542Net surplus for the year - 34,250,650 34,250,650Balance at 31 March 2006 871,138,696 (108,114,504) 763,024,192(a) The capital account represents the Government’s capital contribution for the establishment of the SkillsDevelopment Fund.> 04The annexed notes form an integral part of and should be read in conjunction with these financial statements.

05 < WDA in Review 05/06Cash Flow StatementYear endedYear ended31 March 2006 31 March 2005$ $Cash Flows from Operating ActivitiesSurplus/(deficit) for the year 34,250,650 (761,663)Adjustments for:Depreciation of property, plant and equipment 502,755 436,638Loss on disposals of property, plant and equipment - 394Property, plant and equipment written off - -Investment income (16,049,390) (9,008,986)Surplus/(deficit) for the year before working capital changes 18,704,015 (9,333,617)Decrease/(increase) in levy collection due from CPF Board 2,186,747 (2,376,671)(Increase)/decrease in refund of assistance previously disbursedand underpaid levy receivable (36,963) 6,453Decrease/(increase) in other receivables and prepayments 169,951 (41,684)Increase/(decrease) in assistance committed and payable 43,446 (2,289,972)(Decrease)/increase in other creditors and accrued expenses (3,726) 250,725Net cash generated from/ (used in) operating activities 21,063,470 (13,784,766)Cash Flows from Investing ActivitiesAcquisition of property, plant and equipment (133,220) (232,355)Acquisition of bonds (19,575,000) (165,874,000)Fixed deposits (181,700,000) (22,800,000)Proceeds from maturity of bonds 20,000,000 20,000,000Interest received 13,360,458 10,393,097Proceeds from disposal of property, plant and equipment - 640Net cash used in investing activities (168,047,762) (158,512,618)Net decrease in cash and cash equivalents (146,984,292) (172,297,384)Cash and cash equivalents at beginning of year 425,059,434 597,356,818Cash and cash equivalents at end of year (Note 7) 278,075,142 425,059,434The annexed notes form an integral part of and should be read in conjunction with these financial statements.

financial statements for the year ended 31 march 2006: skills development fundNotes to the Financial Statements1 GENERAL INFORMATIONThe Skills Development Fund (the “SDF”) was established in the Republic of Singapore on 1 October 1979 as aGovernment fund under the Skills Development Levy Act (Chapter 306). With effect from 1 September 2003, theadministration of the SDF was transferred from the Ministry of Manpower (“MOM”) to the Singapore WorkforceDevelopment Agency (“WDA”).The financial statements of the SDF for the year ended 31 March 2006 were authorised for issue by the Board on24 July 2006.The SDF is established for the following purposes:(a)(b)(c)the promotion, development and upgrading of skills and expertise of persons preparing to join the workforce,persons in the workforce and persons rejoining the workforce;the retraining of retrenched persons; andthe provision of financial assistance by grants, loans or otherwise for the purpose of the above-mentionedpurposes.The SDF which is administered by WDA is exempted from income tax under Section 13(1)(e) of the Income Tax Act.The registered office and principal place of operations of the SDF is located at 1 Marina Boulevard #16-01, OneMarina Boulevard, Singapore 018989.> 062(a) BASIS OF PREPARATIONThe financial statements are prepared in accordance with the accounting standards as specified by the Ministry ofFinance and the provisions of the Skills Development Levy Act, Cap. 306.As specified by the Ministry of Finance, Statutory Boards are to comply with all the Singapore Financial ReportingStandards (“FRS”), except for disclosure of related party transactions as required by FRS No. 24, RelatedParty Disclosures.The financial statements have been prepared under the historical cost convention, except as disclosed in theaccounting policies below.Significant Accounting Estimates and JudgementsThe preparation of the financial statements in conformity with the FRS requires the use of judgements, estimatesand assumptions that affect the reported amounts of assets and liabilities at the date of the financial statementsand the reported amounts of income and expenditure during the financial year. Although these estimates arebased on management’s best knowledge of current events and actions, actual results may ultimately differ fromthose estimates.2(b) CHANGE IN ACCOUNTING POLICIESWith effect from 1 January 2005, the following new and revised FRS issued by the Council for Corporate Disclosureand Governance (“CCDG”), which are relevant to SDF as a single entity:FRS 1 (revised 2004)FRS 8 (revised 2004)FRS 10 (revised 2004)FRS 16 (revised 2004)Presentation of Financial StatementsAccounting Policies, Changes in Accounting Estimates and ErrorsEvents after Balance Sheet DateProperty, Plant and Equipment

07 < WDA in Review 05/06Notes to the Financial Statements2(b) CHANGE IN ACCOUNTING POLICIES (cont’d)FRS 17 (revised 2004)FRS 21 (revised 2004)FRS 24 (revised 2004)FRS 32 (revised 2004)FRS 36 (revised 2004)FRS 39 (revised 2004)Interpretation (“INT”) of FRS 101LeasesThe Effects of Changes in Foreign Exchange RatesRelated Party DisclosuresFinancial Instruments: Disclosures and PresentationImpairment of AssetsFinancial Instruments: Recognition and MeasurementChanges in Existing Decommissioning, Restoration and Similar LiabilitiesThe adoption of the above FRS and INT FRS did not result in substantial changes to SDF’s accounting policiesexcept as follows:A. Adoption of FRS 32 and FRS 39The specific transitional provisions contained within FRS 32 and FRS 39 required the simultaneous adoption ofboth standards.In accordance with the transitional provisions of FRS 32, all revised disclosure and presentation rules regardingfinancial instruments have been applied retrospectively.In accordance with the transitional provisions of FRS 39, the adoption of the revised rules regarding accounting forfinancial instruments did not result in restating any comparatives.(i)Held-to-maturity investmentsIn the prior years, the SDF’s investments in bonds were stated at cost less provision for diminution in value that wasother than temporary, which was charged to the income and expenditure statement when it arose. Any reversal ofthe provision was also included in the income and expenditure statement.On adopting FRS 39, certain investments in bonds are now classified in the “held-to-maturity investments” categoryand are initially recognised at fair value plus transaction costs and subsequently accounted for at amortised costusing the effective interest method, less accumulated impairment loss (see policy on financial assets - held-tomaturityinvestments).At the date of authorisation of these financial statements, the following Standards and Interpretations were in issuebut not yet effective:FRS 40FRS 106FRS 107INT FRS 104INT FRS 105INT FRS 106Investment PropertyExploration for and Evaluation of Mineral ResourcesFinancial Instruments: DisclosuresDetermining whether an Arrangement contains a LeaseRights to Interests arising from Decommissioning, Restorationand Environmental Rehabilitation FundsLiabilities arising from Participating in a Specific Market- Waste Electrical and Electronic EquipmentINT FRS 107 Applying the Restatement Approach under FRS 29Financial Reporting in Hyperinflationary EconomiesFRS 39 (revised) Amendments to hedge accounting provisions of FRS 39

financial statements for the year ended 31 march 2006: skills development fundNotes to the Financial Statements2(b) CHANGE IN ACCOUNTING POLICIES (cont’d)Some of these Standards and Interpretations are not applicable to SDF. The management anticipate that the adoptionof these Standards and Interpretations in future periods will have no material impact on the financial statementsof SDF.2(c) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESIncome RecognitionIncome is recognised to the extent that it is probable that the economic benefits will flow to the SDF and the incomecan be reliably measured.Income from Skills Development Levy is recognised on an accrual basis.Interest income from fixed deposit is recognised on a time proportion basis using the effective interest method.Property, Plant and Equipment and DepreciationProperty, plant and equipment are stated at cost less accumulated depreciation and impairment losses, if any.Depreciation is computed using the straight-line method to write off the cost of these assets over their expecteduseful lives as follows:Furniture and fittingsOffice equipmentComputers8 years5 years3 - 5 years> 08The cost of property, plant and equipment includes expenditure that is directly attributable to the acquisition of theitems. Dismantlement, removal or restoration costs are included as part of the cost of property, plant and equipmentif the obligation for dismantlement, removal or restoration is incurred as a consequence of acquiring or using theasset. Cost may also include transfers from equity of any gains/losses on qualifying cash flow hedges of foreigncurrency purchases of property, plant and equipment, if any.For acquisitions and disposals during the financial year, depreciation is provided from the month of acquisition andto the month before disposal respectively.Fully depreciated assets are retained in the books of accounts until they are no longer in use.Gains and losses on disposals are determined by comparing proceeds with carrying amounts and are included inoperating deficit.Financial AssetsFinancial assets include cash and financial instruments. Financial assets, other than hedging instruments, can bedivided into the following categories: financial assets at fair value through profit or loss, held-to-maturity investments,loans and receivables and available-for-sale financial assets. Financial assets are assigned to the different categoriesby management on initial recognition, depending on the purpose for which the investments were acquired. Thedesignation of financial assets is re-evaluated and classification may be changed at the reporting date with theexception that the designation of financial assets at fair value through profit or loss is not revocable.All financial assets, less those recognised using hedging accounting, are recognised on their settlement date. Financialassets are initially recognised at fair value, plus directly attributable transaction costs except for financial assets atfair value through profit or loss, which are recognised at fair value.

09 < WDA in Review 05/06Notes to the Financial StatementsFinancial Assets (cont’d)Derecognition of financial instruments occurs when the rights to receive cash flows from the investments expire orare transferred and substantially all of the risks and rewards of ownership have been transferred. An assessmentfor impairment is undertaken at least at each balance sheet date whether or not there is objective evidence that afinancial asset or a group of financial assets is impaired.Non-compounding interest and other cash flows resulting from holding financial assets are recognised in profit orloss when received, regardless of how the related carrying amount of financial assets is measured.• Held-to-maturity investmentsHeld-to-maturity investments are non-derivative financial assets with fixed or determinable payments and a fixeddate of maturity that the SDF has the positive intent and ability to hold to maturity. Held-to-maturity investments aresubsequently measured at amortised cost using the effective interest method.Amortised cost is calculated by taking into account any discount or premium in acquisition. Amortisation is calculatedaccording to FRS No. 39, Effective Interest method to write off any premium or discount on acquisition of bondsover the period from acquisition to their maturity.In addition, if there is objective evidence that the investment has been impaired, the financial asset is measured atthe present value of estimated cash flows. Any changes to the carrying amount of the investment are recognisedin the income and expenditure statement. Any reversal shall not result in a carrying amount that exceeds what theamortised cost would have been had any impairment loss not been recognised at the date the impairment is reversed.Any reversal is recognised in the income and expenditure statement.• Loans and receivablesLoans and receivables are non-derivative financial assets with fixed or determinable payments that are not quotedin an active market. They arise when the SDF provides money, goods or services directly to a debtor with no intentionof trading the receivables. They are included in current assets, except for maturities greater than 12 months afterthe balance sheet date. These are classified as non-current assets.Loans and receivables are subsequently measured at amortised cost using the effective interest method, lessprovision for impairment. Any change in their value is recognised in income and expenditure statement. Any reversalshall not result in a carrying amount that exceeds what the amortised cost would have been had any impairmentloss not been recognised at the date the impairment is reversed. Any reversal is recognised in the income andexpenditure statement.Receivables are provided against when objective evidence is received that the SDF will not be able to collect allamounts due to it in accordance with the original terms of the receivables. The amount of the write-down is determinedas the difference between the asset’s carrying amount and the present value of estimated future cash flows.• Determination of fair valueThe fair values of quoted financial assets are based on current bid prices. If the market for a financial asset is notactive, the SDF establishes fair value by using valuation techniques. These include the use of recent arm’s lengthtransactions, reference to other instruments that are substantially the same, discounted cash flow analysis, andoption pricing models.Cash and Cash EquivalentsCash and cash equivalents comprise cash at bank, bank deposits with a short maturity of three months or less anddeposits held at call with a central government agency.

financial statements for the year ended 31 march 2006: skills development fundNotes to the Financial StatementsFinancial LiabilitiesThe SDF’s financial liabilities include grant approved for disbursement and other payables.Financial liabilities are recognised when SDF becomes a party to the contractual agreements of the instrument. Allinterest related charges is recognised as an expense in “finance costs” in the income and expenditure statement.Payables are initially carried at cost which is the fair value of the consideration to be paid in the future for goodsand services received, whether or not billed to the SDF. Subsequently, payables are measured at amortised cost,using the effective interest method.Operating LeasesLeases of assets in which a significant portion of the risks and rewards of ownership are retained by the lessor areclassified as operating leases.Rentals on operating leases are charged to income and expenditure statement on a straight-line basis over the leaseterm. Lease incentives, if any, are recognised as an integral part of the net consideration agreed for the use of theleased asset. Penalty payments on early termination, if any, are recognised in the income and expenditure statementwhen incurred.ProvisionsProvisions are recognised when the SDF has a present obligation (legal or constructive) as a result of a past event,it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation anda reliable estimate can be made of the amount of the obligation. Provisions are reviewed at each balance sheetdate and adjusted to reflect the current best estimates.> 10Employee BenefitsContribution to Central Provident FundThe SDF contributes to the Central Provident Fund (“CPF”), a defined contribution plan regulated and managed bythe Government of Singapore, which applies to the majority of the employees. The SDF’s contributions to CPF arecharged to the income and expenditure statement in the period to which the contributions relate.Employee Leave EntitlementsEmployee entitlements to annual leave are recognised when they accrue to employees. Provision is made forthe estimated liability for unconsumed leave as a result of services rendered by employees up to the balancesheet date.Impairment of AssetsThe carrying amounts of the SDF’s assets subject to impairment are reviewed at each balance sheet date to determinewhether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount isestimated.If it is not possible to estimate the recoverable amount of the individual asset, then the recoverable amount of thecash-generating unit to which the assets belongs will be identified.For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separatelyidentifiable cash flows (cash-generating units). As a result, some assets are tested individually for impairment andsome are tested at cash-generating unit level.All individual assets or cash-generating units are tested for impairment whenever events or changes in circumstancesindicate that the carrying amount may not be recoverable.

11 < WDA in Review 05/06Notes to the Financial StatementsImpairment of Assets (cont’d)An impairment loss is recognised for the amount by which the asset’s or cash-generating unit’s carrying amountexceeds its recoverable amount. The recoverable amount is the higher of fair value, reflecting market conditionsless costs to sell and value in use, based on an internal discounted cash flow evaluation.Any impairment loss is charged to the income and expenditure statement unless it reverses a previous revaluationin which case it is charged to equity.An impairment loss is reversed if there has been a change in the estimates used to determine the recoverableamount or when there is an indication that the impairment loss recognised for the asset no longer exists or decreases.An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carryingamount that would have been determined if no impairment loss had been recognised.A reversal of an impairment loss on a revalued asset is credited directly to equity under the heading revaluationsurplus. However, to the extent that an impairment loss on the same revalued asset was previously recognised asan expense in the income and expenditure statement, a reversal of that impairment loss is recognised as incomein the income and expenditure statement.Functional CurrencyItems included in the financial statements of the SDF are measured using the currency that best reflects the economicsubstance of the underlying events and circumstances relevant to the SDF (“the functional currency”). The financialstatements of the SDF are presented in Singapore dollars, which is also the functional currency of the SDF.Conversion of Foreign CurrenciesMonetary assets and liabilities in foreign currencies are translated into Singapore dollars at rates of exchange closelyapproximating those ruling at balance sheet date. Transactions in foreign currencies are converted at rates closelyapproximating those ruling at transaction dates. Exchange differences arising from such transactions are recordedin the income and expenditure statement in the period in which they arise.Financial InstrumentsFinancial instruments carried on the balance sheet include cash and cash equivalents, financial assets and financialliabilities. The particular recognition methods adopted are disclosed in the individual policy statements associatedwith each item.Disclosures on financial risk management objectives and policies are provided in Note 12.

financial statements for the year ended 31 march 2006: skills development fundNotes to the Financial Statements3 PROPERTY, PLANT AND EQUIPMENTOffice furniture and equipment Computer Total$ $ $CostAt 1 April 2004 200,142 3,077,331 3,277,473Additions - 232,355 232,355Disposals (174,429) (574,017) (748,446)At 31 March 2005 25,713 2,735,669 2,761,382Additions 13,335 119,885 133,220Disposals (2,950) (3,466) (6,416)At 31 March 2006 36,098 2,852,088 2,888,186Accumulated depreciationAt 1 April 2004 194,586 1,736,174 1,930,760Depreciation for the year 1,522 435,116 436,638Disposals (173,395) (574,017) (747,412)At 31 March 2005 22,713 1,597,273 1,619,986Depreciation for the year 1,895 500,860 502,755Disposals (2,950) (3,466) (6,416)At 31 March 2006 21,658 2,094,667 2,116,325> 12Net book valueAt 31 March 2006 14,440 757,421 771,861At 31 March 2005 3,000 1,138,396 1,141,3964 HELD-TO-MATURITY INVESTMENTS2006 2005$ $Quoted government bonds, at costadjusted for amortisation of premium and discount 218,579,611 221,699,147Quoted corporate bond 25,000,000 25,000,000243,579,611 246,699,147Less: Due after one year 203,234,492 226,347,150Due within one year 40,345,119 20,351,997At market value:Quoted government bonds 214,359,200 221,214,000Quoted corporate bond 23,991,625 24,695,000238,350,825 245,909,000The weighted average effective interest rate of the bonds at balance sheet date is 2.45% (2005 - 2.32%) per annumand have maturity dates ranging from February 2007 to July 2011.

13 < WDA in Review 05/06Notes to the Financial Statements5 REFUND OF ASSISTANCE PREVIOUSLY DISBURSED AND UNDERPAID LEVY RECEIVABLE2006 2005$ $Refund of assistance previously disbursed andunderpaid levy receivable 221,083 226,476Less: Provision for impairment of receivables (57,870) (100,226)163,213 126,2506 OTHER RECEIVABLES2006 2005$ $Interest receivable 7,658,937 2,649,385Prepayments and others 1,322 171,2737,660,259 2,820,6587 CASH AND CASH EQUIVALENTSCash and cash equivalents comprise the following balance sheet amounts:2006 2005$ $Cash and bank balances 575,142 7,159,434Fixed deposits:Maturity of three months or less after year end 277,500,000 417,900,000Maturity of more than three months after year end 234,500,000 52,800,000512,575,142 477,859,434The fixed deposits with financial institutions mature on varying dates within 6 months (2005 - 9 months) fromthe financial year end. The weighted average effective interest rate of these deposits is 2.04% (2005 - 0.93%)per annum.For the purpose of the cash flow statement, the year end cash and cash equivalents comprise the following:2006 2005$ $Cash and bank balances 575,142 7,159,434Fixed deposits with maturity of threemonths or less after year end 277,500,000 417,900,000278,075,142 425,059,4348 SKILLS DEVELOPMENT LEVYThe levy is based on 1% of the monthly remuneration or $2, whichever is greater, for employees earning $2,000 orless per month. The salary ceiling was raised from $1,800 to $2,000 with effect from 1 September 2005.

financial statements for the year ended 31 march 2006: skills development fundNotes to the Financial Statements9 AGENCY FEE PAID TO CPF BOARDThe fees were paid to the Central Provident Fund (“CPF Board”) for services rendered in the collection of skillsdevelopment levy from employers in the private sector and statutory boards.10 OPERATING SURPLUS/(DEFICIT)The following items have been included in arriving at operating surplus/(deficit):2006 2005$ $Board members’ allowance 14,288 39,68111 COMMITMENTS11.1 Disbursements2006 2005$ $Training assistance committed for disbursement 128,299,826 131,732,56811.2 Approved capital expenditure2006 2005$ $Expenditure approved by management but not contracted for 1,676,143 -> 1412 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIESThe SDF is subject to price risk (including foreign currency risk and interest rate risk) and credit risk. The SDFrecognises that management of financial risk is an important aspect to discharge its regulatory functions, objectsand duties under the Skills Development Levy Act, Cap. 306. The SDF has adopted risk management practices tomitigate these risks in a cost effective manner.The SDF does not hold or issue derivative financial instruments for trading purposes or to hedge against fluctuations,if any, in interest rates and foreign exchange.12.1 Currency RiskCurrency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreignexchange rates.The SDF has minimal exposure to foreign exchange risk as it transacts mainly in Singapore dollars.12.2 Cash Flow and Fair Value Interest Rate RiskCash flow interest rate risk is the risk that future cash flows of a financial instrument will fluctuate because ofchanges in market interest rates. Fair value interest rate risk is the risk that the value of a financial instrumentwill fluctuate due to changes in market interest rates.The SDF has cash balances placed with reputable banks and financial institutions and has limited exposureto interest rate risk as variable rate interest-bearing assets are mainly of short-term nature. Interest rate onits investment in bonds is fixed. The SDF manages its interest rate risk by placing such balances on varyingmaturities and interest rate terms.

15 < WDA in Review 05/06Notes to the Financial Statements12 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (cont’d)12.3 Price RiskPrice risk is the risk that the value of a financial instrument will fluctuate due to changes in market priceswhether those changes are caused by factors specific to the individual security or its issuer or factors affectingall securities traded in the market.The SDF holds its investment in bond to maturity, therefore market risk is minimal.12.4 Credit RiskCredit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause theother party to incur a financial loss.The SDF’s credit risk is primarily attributable to its cash and cash equivalents, financial assets and financialliabilities. Liquid funds are placed with financial institutions with high credit ratings.The SDF’s credit risks are minimal as bond investments are held with established financial institutions.The carrying amount of other receivables, levy collection due from the CPF Board and cash and cashequivalents represents the SDF’s maximum exposure to credit risk.13 FINANCIAL INSTRUMENTSFair ValuesThe carrying amount of financial assets and liabilities with a maturity of less than one year is assumed to approximatetheir fair values.It is not practicable to estimate the fair value of unquoted equity securities, due to the absence of quoted marketprices, without incurring excessive costs.However, the SDF does not anticipate that the carrying amounts recorded at balance sheet date would be significantlydifferent from the values that would eventually be received or settled.14 COMPARATIVE FIGURESCertain comparative figures have been reclassified to conform with current year’s presentation:ReclassifiedReported2005 2005$ $Income and expenditure statementAmortisation of bond premium - (2,719,441)Investment income from investment securities 3,888,339 6,607,7803,888,339 3,888,339Cash flow statementAmortisation of bond premium - 2,719,441Investment income (9,008,986) (11,728,427)(9,008,986) (9,008,986)

financial statements for the year ended 31 march 2006: lifelong learning endowment fundFinancial StatementsFor the year ended 31 March 2006Ministry Of ManpowerLifelong Learning Endowment FundCONTENTS1 Auditors’ Report2 Statement of Affairs3 Statement of Receipts and Expenditure4 Notes to the Financial Statements

WDA in Review 05/06In our opinion:(a)(b)01

financial statements for the year ended 31 march 2006: lifelong learning endowment fundStatement of Affairs as at 31 March 20062006 2005Notes $ $Accumulated FundExcess of Receipts over Expenditure:Balance at end of the year 3 2,119,608,966 2,081,693,479Represented by:Funds with Accountant-General 4 2,119,608,966 2,081,693,479> 02The Statement of Affairs and Statement of Receipts and Expenditure were approved by:Leo Yip Seng CheongPermanent Secretary(Ministry of Manpower)Anthony TanDirector/Corporate Planning Department(Ministry of Manpower)24 May 2006The accompanying notes form an integral part of these financial statements.

03 < WDA in Review 05/06Statement of Receipts and ExpenditureYear ended 31 March 20062006 2005Notes $ $Receipts during the yearCapital contribution from Government - 500,000,000Income from investments 83,267,738 62,138,565Other receipts 5 1,544,883 3,600,56584,812,621 565,739,130Expenditure during the yearGrants disbursed 6 41,901,502 36,165,033Marketing and promotion expenses 4,944,312 4,506,894Administrative expenses 51,320 42,31446,897,134 40,714,241Excess of Receipts over Expenditure 37,915,487 525,024,889Accumulated fund balance brought forward 2,081,693,479 1,556,668,590Accumulated fund balance carried forward 3 2,119,608,966 2,081,693,479The accompanying notes form an integral part of these financial statements.

financial statements for the year ended 31 march 2006: lifelong learning endowment fundNotes to the Financial StatementsThese notes form an integral part of the financial statements.The financial statements were authorised for issue by the Ministry of Manpower on 24 May 2006.1 DOMICILE AND ACTIVITIESThe Lifelong Learning Endowment Fund (“the Fund”) is established in Singapore. The address of the Ministry’sprincipal place of activity is at 18 Havelock Road, #07-01, Singapore 059764.The Fund is set up by the Singapore Government (“the Government”) under the Lifelong Learning Endowment FundAct 2001 (“the Act”) for the acquisition of skills and expertise by persons, and the development and upgrading ofskills and expertise of persons to enhance their employability; and the promotion of the acquisition, developmentand upgrading of skills and expertise to enhance the employability of persons.The Fund, which came into operation with effect from 12 March 2001, had an initial capital of $500 million. TheGovernment may make further payments of capital money into the Fund from time to time. Only income earned fromthe Fund will be used. The Fund is deemed to be a Government fund for the purposes of any written law in Singapore.The Singapore Workforce Development Agency (“WDA”) has been appointed as the programme manager of theFund to receive and deploy the grant for programmes that are congruent with the objectives of the Fund.2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES> 042.1 Basis of PreparationThe financial statements are expressed in Singapore dollars.In line with the Government’s accounting policy, the cash basis of accounting is adopted. On this basis, receiptsare recognised when received rather than earned and expenses are recognised when paid rather thanwhen incurred.3 ACCUMULATED FUND2006 2005Notes $ $Capital contribution from Government (a) 2,000,000,000 2,000,000,000Income from investments (b) 119,608,966 81,693,4792,119,608,966 2,081,693,479(a)(b)This relates to capital money paid into the Fund by the Government from the Consolidated Revenue Account.Under Section 4(4) of the Act, this amount shall not be used for any purposes other than for investment.This relates to investment income earned on the Fund balance. The investment income is arrived at afterdeducting investment expenses, grants made to institutions and other expenses as approved under the Act.

WDA in Review 05/06Notes to the Financial Statements3 ACCUMULATED FUND (cont’d)2006 2005Notes $ $Income from investments 119,608,966 81,693,479Past reserves protected (c) (6,317,278) (6,317,278)Income from investments available for expenditure (d) 113,291,688 75,376,201(c) This relates to reserves which are protected as a result of Government requirements.Investment income earned from the Fund previously will be protected when there is a change-over in government.This would ensure that the present government would only spend what it has earned in its term of office.(d) This amount is available for payment of future approved expenses and distribution as grants to institutions tobe applied for the purpose of all or any of the following purposes as defined under the Act:(i) the provision of financial assistance or incentives to persons to acquire, develop or upgrade, whether inSingapore or elsewhere, skills and expertise to enhance their employability;(ii) the research or development, whether in Singapore or elsewhere, in or of learning methods and technologyto enhance the acquisition, development or upgrading of such skills and expertise;(iii) the promotion of the acquisition, development or upgrading of such skills and expertise;(iv) the provision of financial assistance or incentives to persons to carry out, whether in Singapore or elsewhere,activities or programmes which are consistent with the objects of the Fund;05 < (v) the establishment, expansion or maintenance of facilities, whether in Singapore or elsewhere, to be usedfor purposes consistent with the objects of the Fund; and(vi)such other purposes consistent with the objects of the Fund, whether carried out in Singapore or elsewhere,as may be prescribed.4 FUNDS WITH ACCOUNTANT-GENERALThis represents funds held by the Accountant-General on behalf of the Fund. The Fund is allocated investmentincome at the prevailing Central Provident Fund’s rate of return for Special and Retirement Accounts, currently at4% (2005: 4%) per annum.5 OTHER RECEIPTS2006 2005$ $Refund of unused grant 1,516,618 3,524,188Interest income 5,605 64,377Seminar fees 11,500 3,000Miscellaneous receipts 11,160 9,0001,544,883 3,600,565

financial statements for the year ended 31 march 2006: lifelong learning endowment fundNotes to the Financial Statements6 GRANTS DISBURSEDDuring the financial year, the Fund made grants for the following programmes to approved institutions:Programmes2006 2005Notes $ $Public Employment Service Programme 7,650,512 8,903,866Employment & Retention Promotion 384,026 232,642Development of Career Guidance Infrastructure 217,920 8,303Enhancement of DCN Effectiveness 168,018 330,000Training of DCN Counsellors 413,466 95,019Training of Union Leaders as Job Counsellors 253,123 20,000Management of PES Information Systems 592,220 668,835Re-Employment Support Scheme (RESS) 3,110,152 5,331,876Job Re-Creation Programme (JRP) 250,000 250,000Place-and-Train Programme 166,290 166,755Aerospace Competitiveness Study 48,845 145,676Self-Employment Assistance (SEA) Programme 91,830 -Self-Employment Training Programme - 539,574Place-Train-Adjust 12,573 5,765SMCP (Return to Nursing) – Publicity 1,796,115 9,167Enhanced Funding for Executive Development Courses(Hotels and F&B) 21,000 271,000Executive Development Programme for Retail Industry 14,170 77,000Home Ownership Plus Education (HOPE) Programme 260,747 166,7001-Institute-2-Systems 13,166,864 15,483,066SRP Surrogate Employers Programme 82,944 369,285Development & Pilot of Employability Skills Modules 115,041 1,078,250Promotion of Human Capital Management &Development Practices 236,509 405,977Employment & CET for Out of School Youths 83,346 -Maintenance of Employment Town - 71,478Post Placement Support for Textile - 2,029Publicity for PnT for Electronic Sector - 5,000Process Place and Train Program Media Event &Graduation Ceremony - 3,642Process Industry Manpower Competitiveness(Benchmarking) Study - 15,400Retail Incubator Training Programme - 119,200Virtual Career Fair - 7,200Total brought forward 29,135,711 34,782,705> 06

07 < WDA in Review 05/06Notes to the Financial Statements6 GRANTS DISBURSED (cont’d)2006 2005Notes $ $Total carried forward 29,135,711 34,782,705Conservancy & Waste Management Publicity - 10,000Hotel Star (Marketing Grant) - 2,640Industry Selection Mechanism (DISC) - 29,117Management of Hotel Executive Programme - 14,000Maya Program for Media Sector - 150,000WR Conservancy Cleaning Media Event cumPledge Signing Ceremony - 5,000Effective Study of CREST - 57,671Marketing & Promotion of FLOW - 10,018Management of CREST - 5,800Pilot Implementation of Employability Skills System - 487,760National Trainer Competency Framework - 369,576Courseware Development for Capability Development Projects - 11,862Pilot Implementation of Advance Cert in Trainingand Assessment - 184,268NTUC TV Project - 200,000National IT Literacy Programme - 209,000Training for Employment Scheme - 480,000Career Counselling of PSEIs - 43,450Industry Manpower Development Partnership - 225,711Special Employment Facilitation for Long Term Unemployed 244,847 -Job Preparation Exercise for Conservancy Cleaning Sector 6,258 -Job Re-creation Programme Tripartite Forum 33,720 -Job Redesign Training Programme 480,000 -Development of KM system for DCN Partners 105,292 -Tripartite Action Group (TAG) 600,000 -Industry Manpower Development Partnership (Process) 65,000 -Supply Chain Management Executive UpgradingProgramme (Logistics Industry) Advertorial 20,525 -Image Enhancement for Manufacturing Industry 15,900 -Develop Employment Enhancement Programme(Precision Engineering) 20,000 -Funding for Validation Specialist 1,307 -Build Capabilities of TAFF 24,000 -Post Placement Support for Edwards Lifesciences 450 -WDA-RSAF Licensed Aircraft EngineerApprenticeship Scheme 138,000 -Funding for the Aerospace Industry WorkforceDevelopment Partnership (AI-WDP) 123,360 -Total brought forward 31,014,370 37,278,578

financial statements for the year ended 31 march 2006: lifelong learning endowment fundNotes to the Financial Statements6 GRANTS DISBURSED (cont’d)2006 2005Notes $ $Total carried forward 31,014,370 37,278,578Industry Manpower Development Partnership (Finance) 383,775 -Hotel Event at Career 2005 45,921 -Nursing Leaders' Workshop Series 3,830 -Customer Centric Initiative (CCI) Launch 15,782 -Funds for the Singapore Institute of Retail Studies (SIRS) 547,644 -Sports Coach Programme 11,361 -Funding and Implementation of the SME Manpower Scheme 83,000 -Funding for Executive Development Programme 2006under the Retail Academy of Singapore 205,000 -Career 2006 Tourism Career Exhibition 20,000 -Graduate Entry Master of Science in Speech andLanguage Pathology 324,000 -Retail In-House CET Training Capability Development 27,626 -Funding for Pilot Implementation of ACTA andEmployability Skills System 1,224,374 -NSRS & NCETF Training Subsidy Disbursement 8,335 -NSRS & NCETF Skills Standard Development 184,500 -NSRS & NCETF Administration 2,852,524 -NSRS & NCETF Critical Training Programme Development 14,000 -Engagement of Consultants for the Development ofCSS NCETF 199,470 -Branding and Communication of NCETF 63,840 -Training NCETF Infrastructure & Capability Development 122,984 -Skills Standard and Framework Development 1,555,622 -Singapore ESS Appraisals & Certification Assessment 117,010 -Extend Employability Skills (ES) Framework to includeService Excellence, Self-Employment, Leadership,and Older Worker Initiatives 282,893 -Annual Licence Fee for use of FLOW 10,500 -Development and Improvement of Curriculum andAssessment Guides for ESS 6,000 -Funding for Pilot Work Trial Programme for Healthcare Industry(Nursing Homes) 15,630 -Establish a Common Assessment Completion Instrumentand Process to Validate ES Certification under theCET Qualification System 3,916 -Funding for Request-Development of WPLN Curriculum andAssessment Guides Under ESS 20,800 -Outreach for job placement services for the F&B industry 2,741 -Total brought forward 39,367,448 37,278,578> 08

09 < WDA in Review 05/06Notes to the Financial Statements6 GRANTS DISBURSED (cont’d)2006 2005Notes $ $Total carried forward 39,367,448 37,278,578Funding for the Clinical Instructor Upgrading Course underHealthcare Executive Development Programme 40,000 -Manpower Surveys 143,904 325,756Labour Market Information Systems 164,902 102,010Focus Group and other data collection efforts byindustry associations 81,795 -Conference fee support for the 2005 Excellent Service AwardPresentation & Best Practice Sharing Conference 15,863 -Human Capital Portal Implementation 86,832 -WDA Office Space Expansion and Set Up 1,090,000 -Job Redesign Incentives Scheme 148,963 -Job Redesign and Mature Worker Job Redesign IncentivesSchemes (Advantage!) 74,619 -Funding of the Training Delivery to Frontliners inPreparation for Singapore 2006 Project 79,072 -41,293,398 * 37,706,344WDA (a) 608,104 (1,541,311)41,901,502 36,165,033* This includes grants made by WDA out of funds received from the Fund in the current financial year and unusedfunds in the previous financial year.Note (a) - This is represented by:2006 2005Notes $ $Grants disbursed by WDA out of unused fundsreceived from the Fund in the previous financial year (252,402) (1,793,713)Unused portion of grants disbursed to WDA in thecurrent financial year, available for carry forwardto the next financial year 860,506 252,402(a) 608,104 (1,541,311)

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