IPOS Annual Report 2011/12 - Intellectual Property Office of Singapore

BUILDING ANIP HUBoF ASIAIPOS ANNUAL REPORT2011/12

VISIONAN IPHUBOFASIA

06 CHAIRMAN'S MESSAGE10 CHIEF EXECUTIVE’S MESSAGE13 BOARD OF DIRECTORS17 SENIOR MANAGEMENT21 CORPORATE PROFILE23 ORGANISATION CHART

25 INTERNATIONAL ENGAGEMENTS27 INTERNATIONAL RANKINGS28 PROVIDING THE IP INFRASTRUCTURE34 PROMOTING THE IP SERVICES SECTOR37 BUILDING THE IP CAPACITY39 OUR PEOPLE41 AWARDS AND ACCOLADES45 STATISTICS 2010 – 201157 FINANCIAL STATEMENTS

MISSIONTO PROVIDE THEINFRASTRUCTURE,BUILD EXPERTISEAND GROW THEECOSYSTEMIN SUPPORT OF THEGREATER CREATION,PROTECTION ANDEXPLOITATION OF IP.

MR QUEK TONG BOONChairmanIntellectual Property Office of Singapore

06Despite continuinguncertainties in the globaleconomy and signs ofslowdown in the Singaporeeconomy over the last fewmonths, it is noteworthy thatthe World IntellectualProperty Organization (WIPO)has reported record numberof IP filings. Global patentfilings under the WIPOadministeredPatentCooperation Treaty (PCT)went up by 10.7 per cent to181,900 in 2011, making itthe biggest increase since2005. Internationaltrademarks filed usingWIPO's Madrid System alsogrew by 6.5% in 2011 to arecord 42,270 applications.Similarly, there was a 5.7%increase in internationaldesign applications in 2011to a total of 2,521applications. These trendsreflect the growingimportance of IP creationand management in a globaleconomy that is becomingincreasingly knowledgebased.In fact, the global IP industryis itself growing. A study doneby WIPO found that theglobal market for IP is nowworth about US$180 billiona year. Global royalty andlicensing revenue has alsomore than doubled to overUS$200 billion in the pastdecade.To ensure that our IP regimeremains business- andinnovation-friendly, IPOS hasbeen actively participating ininternational negotiationsand co-operations. Forinstance, we signed the Anti-Counterfeiting TradeAgreement (ACTA) on 1October 2011 in Tokyo afteractive participation in variousrounds of negotiations.These meetings havefacilitated the sharing andlearning of best practiceswith IP counterparts aroundthe world. IPOS had alsosigned a Memorandum ofUnderstanding (MOU) withWIPO on 28 September2011 to establish aframework for collaborationbetween IPOS and the WIPOArbitration and MediationCentre. With this MOU,disputes involving multipleparties in differentjurisdictions would have analternative dispute resolutionoption through mediation.Such internationalCHAIRMAN / SMESSAGE

07collaborations have beenhelpful in enabling Singaporeto better serve regional andinternational businesses thathad chosen to invest on ourshores.Our efforts to establish an IPregime that is conducive forIP creation, protection,management andexploitation have beenrecognised by internationalsurveys, which consistentlyranked Singapore as one ofthe best IP regimes in theworld. Singapore was rankedsecond in the world by theWorld Economic Forum’sGlobal CompetitivenessReport 2011/12 for our IPprotection efforts. In 2011,the Political and EconomicRisk Consultancy (PERC) alsoranked Singapore first in Asiain terms of IP protection forthe second time in a row. Inaddition, the InternationalProperty Rights Index 2012has ranked Singapore top inAsia for our IP efforts.However, Singapore will notrest on its laurels. In March2012, the Minister for Law,Mr K Shanmugamannounced the formationof an IP Steering Committeeto look into strategies todevelop Singapore as anIP Hub of Asia. We aim togrow Singapore into a vibrantmarket-place to transactand commercialise IP,as well as build world-classIP capabilities andinfrastructure to facilitateIP activities in and beyondSingapore.

08We aim togrowSingaporeinto a vibrantmarket-placeto transactandcommercialiseIP, as well asbuild worldclassIPcapabilitiesandinfrastructureto facilitate IPactivities inand beyondSingapore.Given IPOS’ mission ofproviding the infrastructure,building expertise andgrowing the ecosystem insupport of the greatercreation, protection andexploitation of IP, it clearlyhas a critical role to play inthe success of the variousIP-related initiatives. I thankour many stakeholders, myfellow IPOS Board members,the IPOS management andstaff, and our many partnersfor journeying with us to bringIPOS and the Singapore IPsystem to where it is today.I look forward to yourcontinued support in the nextstage of our journey to shapethe IP landscape, address itschallenges and harness itsopportunities in bringing theSingapore IP system to newheights.Quek Tong BoonChairman

BG (NS) TAN YIH SANChief ExecutiveIntellectual Property Office of Singapore

10The Intellectual PropertyOffice of Singapore (IPOS)celebrated 10 th Anniversarylast year. This marked adecade of service to ourNation as a Statutory Board.Over the past decade, wehave to deal with a majorcrisis in SARs and twoeconomic downturns.Notwithstanding, our servicedelivery to Singapore’seconomic and socialwell-beings remaineduninterrupted. IPOScontinued to grant theprotection and encouragethe exploitation of IP asSingapore marched towardsa knowledge-basedeconomy. This service toour Nation will continueand be enhanced in thecoming years.Last year was yet anotherchallenging year. As a selffinancingStatutory Board,we had to navigate in a worldthat was shrouded withuncertain economic overcastand thwarted by competingforces of globalisation. Thiswas manifested in the fastchangingIP landscapeacross the globe.Despite the challenges, ourIP eco-system registerednoticeable growth forCalendar Year (CY) 11/12.Trade Marks and Designsapplications saw recordincrease of 14.6% and 14%- the largest since 2004 and2006 respectively. Foreignregistration of patents sawa dip due largely to theEuropean's economicsituation. However, this wasmore than compensated withan increase of 18.4% in localregistration. Overall, patentsregistrations have increasedslightly by 0.2%.We have also revised ourVision, Mission and Valuesto re-position IPOS for thefuture. Our new visionenunciated the strategic shiftin IPOS’ orientation so as toposition Singaporeinternationally as an IP Hubof Asia. The next decadewould see Asia demandingmore and greatersophistication of IP servicesthat could be served by a fewspecialised nodes.Singapore would do well tobe one of them. This newVision would also necessitateCHIEFEXECUTIVE / SMESSAGE

11a larger mission set. Inaddition to strengthening ourIP regime, and promoting ourIP services sector, we havealso incorporated IP capacitybuilding as the third pillar inour mission area andbrought in IP Academy as asubsidiary. Organisationally,we have begun the journeyto further corporatize oursystem with the desire tobuilding a value-basedorganisation with qualitypeople.STRENGTHENINGOUR IP REGIMEEfforts have begun tostrengthen our IP regimethrough raising of the qualityof our IP system. Workingwith IP practitioners and theindustry, we have proposedamendments to the PatentsAct for the change from aself-assessment to a positivegrant patent system. Toensure quality control of ourpatent system, we have alsobegun our foundational workin building our indigenouspatent search andexamination capabilities.These were by far the mostsignificant change to ourpatent system in the pastdecades. Another area ofenhancement was to renderbetter services to ourCustomers. By early nextyear, we would integrate ourIP registration systems andprocesses so as to deliverfaster, simpler, andaffordable services to IPcreators who are looking tofile their IP with us.PROMOTING THE IPSERVICES SECTORFeedback from Industryplayers and IP practitionersrevealed the need for a Hubservices in Singapore toassist them to venturedeeper into the emergingmarkets of the region, as wellas for the Asian-basedcompanies to reach out tothe world. We look forwardto the recommendation fromIP Steering Committee tofurther the growth of ourservices sector.An equally important effortwas to support the growth oflocal enterprises. Wecontinued to engender thedevelopment of IPManagement (IPM)capabilities in private andpublic sectors. Through theIPM Programme for Small-Medium Enterprises (SMEs),IPOS successfully reachedout to more than 11,000local firms which took theirbusinesses to greaterheights by committing closeto $5 million grants for thesefirms to undertake IPManagement projects lastyear. This was expected togenerate close to $160million economic value-addand about 600 jobs inSingapore. As for the PublicSector, IPOS started theCommunity of Practitioners(CoP) initiative to nurture aself-directing community ofIPM practitioners acrosspublic agencies to lead in theadoption of effective IPMpractices within the Wholeof Government. This initiativehas since reached out tomore than 3,000 officersand has grown to an activecommunity of almost 160IPM practitioners from 46public agencies.We have also taken activesteps to raise publicawareness and respect forIP in our public domain.Through a series of outreachactivities such as the

12appointment of IPAmbassadors, IP Race, IPChampion Music Fiesta andMovie Trailer Launch, ourreach had extended to morethan 72,000 people. Theincrease in IP awareness wasshown in an IP PerceptionSurvey, which revealed that95.3% of the respondentswere aware of the differentacts of IPR infringement, andnearly 4 in 5 respondentsfrowned upon IPRinfringement and saw IPRinfringement as a form oftheft. IPOS intends to stepup our efforts to bring IPcloser to the people andencourage more to embracea pro-IP way of life.BUILDING THE IP CAPACITYSince 1 April 2012, the IPAcademy (IPA) officiallybecame a subsidiary underIPOS. As the capacity-buildingarm of IPOS, it has providedIP professionals with thetechnical knowhow andexpertise as well as positionSingapore as a thoughtleader in IP matters. One ofthe key projects included thealignment of IP CompetencyFramework (IPCF) to IPA’scurricula so that IPA couldmastermind the developmentof IP workers in the whole ofSingapore. In the comingyear, IPA will be intensifyingits engagements with theindustry, local universitiesand international IP institutesto offer more specialisedprogrammes and providequality skill sets to meetmarket demand in the region.Going forward, IPOS iscommitted to developingSingapore into an IP hub ofAsia through providing theinfrastructure, buildingexpertise, and growing theIPOS continuedto grant theprotection andencourage theexploitation ofIP as Singaporemarched towardsa knowledgebasedeconomy.This service to ourNation willcontinue and beenhanced in thecoming years.ecosystem in support of thegreater creation, protectionand exploitation of IP. Whilewe are enthused of ourfuture, we will remaingrounded to service ourcustomers well. We areconfident that with the talent,creativity and teamwork ofour Board, stakeholders, andco-workers in IPOS and IPA,we will again deliver apositive experience for ourcustomers, our economy andSingapore. I look forward toanother productive year, andworking with all to building abetter future for our IPeco-system.Tan Yih SanChief Executive

13BOARD OFDIRECTORSAs at August 2012DEPUTY CHAIRMANDR STANLEY LAIHead of IP & TechnologyAllen & Gledhill LLPBG (NS) TAN YIH SANChief Executive /Director-GeneralIntellectual Property Officeof SingaporeCHAIRMANMR QUEK TONG BOONChief Defence Scientist /Chief Research & Technology OfficerMinistry of Defence

14MR HUGH LIMDeputy SecretaryMinistry of LawMR KEOY SOO EARNHead, M&A Transaction Services Head,Valuation Services,Singapore and Southeast AsiaDeloitte & Touche LLP (Singapore)ASSOCIATE PROFESSOR LEE CHEE WEECEO and FounderLYNK Biotechnologies Pte LtdChairmanDynaLynk Pharma Pte Ltd

15MR LOH CHOO BENGExecutive Vice President(Retail and Financial Services)Singapore Post LimitedMS JACQUELINE POHDivisional DirectorMinistry of ManpowerMR POR KHAY TIBoard DirectorAdventech (S) Pte Ltd

16MR GUY PROULXManaging DirectorTranspacific IPManagement Group Pte LtdMR KELVIN THESEIRAManaging CounselAgilent TechnologiesSingapore (Sales) Pte LtdNot in photo:PROFESSOR FREDDY BOEYDeputy President and ProvostNanyang Technological UniversityPROFESSOR BERNARD YEUNGDean and Stephen RiadyDistinguished Professor of FinanceNational University of SingaporeBusiness School

17SENIORMANAGEMENTAs at August 2012MR VIKTOR CHENG CHOONG HUNGDeputy Chief Executive /Deputy Director-GeneralMS CHIAM LU LINDeputy Chief Executive /Deputy Director-GeneralBG (NS) TAN YIH SANChief Executive /Director-GeneralMR DAREN TANGDeputy Chief Executive /Deputy Director-General

18MR DARRYN FRANCIS LIMActing Director(Legal Policy & International Affairs)MR SEOW HUNG MING SIMONDirector(Registry of Patents)MS TAN MEI LINDirector(Registry of Trade Marks)MS DIANE LOODirector(Public Outreach Department)Covering Director(Public Relations Department)

19MRS ANG-ONG BEE LIANDirector(Computerisation Department)Covering Director(Customer Service Department)DR ERIC GANDirector(Capability Development Department)MR NG BENG LIMDirector(Information TechnologyDepartment)MR CHIA POH CHOONDirector(Finance Department)MR NG KOK WANDirector(Strategic Planning &Policy Department)

20MS ANNE LOO VOON VOONDirector(Registry of Designs,Registry of Plant Varieties) /(Hearings & Mediation Division)MR WOO YEW CHUNGDirector(Human Capital Department)MR YUEN KUM CHEONGDirector(Enterprise DevelopmentDepartment)MR LIM ENG HANNDirector(Programs & Operations)IP Academy

21CORPORATEPROFLIEThe Intellectual PropertyOffice of Singapore (IPOS), astatutory board under theMinistry of Law since April2001, is the leadgovernment agency thatadvises on and administersintellectual property (IP) laws,promotes IP service sector,awareness and provides theinfrastructure to facilitate thedevelopment of IP inSingapore. With IP fastbecoming a critical resourcein today’s new economy, athorough review of ourcorporate profile was donein 2012. In working towardsa backdrop of a changing IPlandscape, we are guided bythe following:Our VisionAn IP Hub of Asia

22Our MissionTo provide the infrastructure, buildexpertise and grow the ecosystem insupport of the greater creation,protection and exploitation of IPOur Core ValuesIntegrityProfessionalismTeamworkPeople FocusGreater IP awareness helpsto provide fundamentalbuilding blocks for IPcreation, greater IPprotection helps to increasebusiness confidence in ourregime, and greater IPexploitation helps to driveour economy. Througheducation, training and arobust infrastructure, IPOSmakes it our mission toprovide the infrastructure,build expertise and grow theecosystem in support of thegreater creation, protectionand exploitation of IP.Our Strategic ThrustsStrengthening our IP RegimePromoting the IP services sectorBuilding the IP capacity

23ORGANISATIONCHARTAs at August 2012BOARD OF DIRECTORSChief Executive/RegistrarBG (NS) Tan Yih SanDeputy Chief ExecutiveMr Daren TangDeputy Chief ExecutiveMr Viktor ChengRegistries Group Policy Group Infrastructure & CapabilityDevelopment GroupRegistry of PatentsRegistry of Trade MarksRegistry of DesignsRegistry of Plant VarietiesStrategic Planning &Policy DepartmentLegal Policy & InternationalAffairs Department #Public OutreachDepartmentEnterprise DevelopmentDepartmentIndustry DevelopmentDepartmentComputerisationDepartmentCustomer ServiceDepartment*Ms Chiam Lu Lin is holding concurrent appointment as Executive Director, IPA.#Provide administrative support to the Copyright Tribunal in the performance ofthe Tribunal’s functions under the Copyright Act (Cap 63)

24Internal Audit DepartmentDeputy Chief ExecutiveMs Chiam Lu Lin*Corporate Services GroupCapacity Building GroupHearings & Mediation GroupFinanceDepartmentHuman CapitalDepartmentCapability DevelopmentDepartmentInternational Co-OperationDepartmentInformation TechnologyDepartmentKnowledge ManagementDepartmentPublic RelationsDepartmentIP AcademyBoard of DirectorsManagementTrainingThoughtLeadershipIP ResearchPublicSectorIP BusinessConsultants& SMEsTech TransferOffices &TertiaryInstitutionsPatentAgents &Lawyers

25INTERNATIONALENGAGEMENTSTo raise Singapore’spositioning in theinternational arena and beat the forefront of IPdevelopment, IPOS workedwith our colleagues in MFA,MTI and EDB to play anactive role in WIPO and theIntellectual Property Rights(IPR) committees of theWorld Trade Organization(WTO), APEC and ASEAN.These fora has enabledintegration into the globaltrading and IP system, andengendered more businessfriendly initiatives.MULTILATERAL ENGAGEMENTLeading to the adoption ofthe ASEAN IntellectualProperty Rights Action Plan2011-2015 at the 36thASEAN Working Group onIntellectual PropertyCooperation (AWGIPC)Meeting in July 2011, IPOSparticipated actively indiscussions among regionalASEAN IP offices. Inparticular, IPOS leddiscussions at the ASEANlevel on refining the ASEANPatent ExaminationWIPO Director-General Mr Francis Gurry (left) and IPOS Chief Executive BG(NS)Tan Yih San (right) at the Memorandum of Understanding (MOU) SigningCeremony on 28 September 2011 to establish a framework of collaborationbetween IPOS and the WIPO Arbitration and Mediation Centre.Cooperation (ASPEC)programme. ASPEC is awork-sharing initiativeamongst eight ASEAN IPOffices first initiated bySingapore in 2009, andenhanced in November2011 to operate in EnglishLanguage. The ASPECprogramme seeks toimprove the quality of searchand examination (S&E)reports in participatingASEAN IP Offices, by sharingS&E results amongst theparticipating offices to allowapplicants to obtain patentsfaster and more efficiently.The programme hadreduced duplication on theS&E work done, therebysaving time and effort.Additionally, S&E work doneon a correspondingapplication also serves as auseful reference inproducing quality reports.BILATERAL ENGAGEMENTThe international bilateralpatent work-sharingarrangements with the USPatent Office (USPTO) andJapan Patent Office (JPO)under the respective PatentProsecution Highway (PPH)framework saw increasedusage in FY2011.Currently, there areongoing discussions toenter into more PPHarrangements with otherstrategic partners such asUKIPO, SIPO, KIPO, JPO

26UNITEDSTATESTrade Mark Local Filers:6,513 (1.7% increase)Patent Local Filers:1,056 (18.4% increase)BRAZILUNITEDKINGDOMWIPO*Trans-PacificPartnership FTAEU-SG FTAPatentCooperationTreatyPatentProsecutionHighwaysINDIACHINASINGAPORERUSSIAKOREAJAPANASEAN PatentExaminationCooperation (ASPEC)Designs Local Filers:661 (21.7% increase)ASEAN PatentExaminationCooperation(ASPEC)Patent ProsecutionHighways (PPH) -UKPIO, SIPO, KIPO,JPO, USPTO, BRIC- BRIC Patent CooperationTreaty (WIPO-SG)EU-SingaporeFTATrans-PacificPartnership FTA* Trade Marks Applications filedunder Madrid Protocol 16,146(23.9% increase)PCT Applications entering NationalPhase 6,726 (2% drop)and USPTO to create anetwork of PPH for thegreater benefit of patentapplicants. IPOS is alsostudying the current patentagent registration andqualifying regime with a viewto further refinements tobetter support IPOS’ missionof growing IP expertise inSingapore.Singapore remains as oneof the Patent CooperationTreaty (PCT) contractingstates, which facilitatesapplicants in seekingpatent protection forinventions in severalcountries simultaneouslyby filing an internationalapplication with a singleoffice, in one languageand a single set of formsand fees. The PCT isadministered by theInternational Bureau (IB)of the WIPO based in Geneva.IPOS participated innegotiations on the EuropeanUnion-Singapore Free TradeAgreement (EUSFTA), whichis a bilateral FTA betweenSingapore and the EU,intended to strengtheneconomic ties between thetwo parties. Singapore alsoparticipated actively in theTrans-Pacific StrategicEconomic PartnershipAgreement, which is currentlybeing negotiated among9 countries (BruneiDarussalam, New Zealand,Chile, Australia, Malaysia,Peru, Vietnam, the UnitedStates of America andSingapore). This is intendedto be a “comprehensive,next-generation regionalagreement that liberalisestrade and investment andaddresses new andtraditional trade issues and21 st century challenges”.Moving forward, IPOS willcontinue to strengthen tieswith our bilateral, regionaland global partners, enhancecooperation with existingpartners and forge new ties.

27INTERNATIONALRANKINGSOver the past decade,Singapore’s legislativeframework and infrastructurehave been considerablystrengthened, givingcompanies confidence toinvest in and create IP inSingapore. The highinternational rankings forSingapore’s IP regime beartestament to this. Our IPregime has been consistentlyranked as one of the best inthe world by internationalsurveys. In 2011, the WorldEconomic Forum’s GlobalCompetitiveness Reportranked Singapore second inthe world and top in Asia interms of IP protection. ThePolitical and Economic RiskConsultancy Report (PERC)2011 and the IntellectualProperty Rights Index (IPRI)2011 similarly rankedSingapore top in Asia for ourIP protection efforts.International Surveys 2010 2011World Economic Forum’s GlobalCompetitiveness Report –IP protectionPolitical and Economic RiskConsultancy Report –IP protection (Among Asiancountries)Intellectual Property Rights Index(IPRI) – IP protection, patentprotection, copyright piracy level(Among Asian countries)IMD Competitiveness Yearbook– Patent and CopyrightProtection / Protection of IPRights3rd1st1st5th2nd1st1st9th

28PROVIDING THEIP INFRASTRUCTUREBoosted by the increase indemand for IP servicesworldwide, IP filings inSingapore saw an overallgrowth. Trade mark filingsrose for the secondsuccessive year in CalendarYear (CY) 2011. A record34,928 classes of trademark applications wasreceived, which translates toTRADE MARK APPLICATIONS IN SINGAPORE(BASED ON CY)a growth of 14.6% – thelargest since 2004. Patentapplications saw a slightincrease of 0.2% to 9,794.Despite a decline inEuropean filings, filings bylocal R&D research nodesand companies haveincreased by 18.4% year-onyear,amounting to thelargest increase in the past10 years. Direct nationalfilings have also increasedby 7.7% 1 . As for designs,IPOS witnessed nationalfilings and internationalregistrations at its highest inthe past 5 years. On thenational front, designs filingsfor CY 2011 showed anincrease of 14.3% from theprevious year. These trendsreflect the growingimportance of IP creationand management in a globaleconomy that is becomingincreasingly knowledgebased.PATENTS APPLICATIONS FILED IN SINGAPORE(BASED ON CY)1 Local filings refer to the number ofapplications filed by local-based entities,whilst direct national filings refer to thenumber of patent applications fileddirectly in Singapore.DESIGN APPLICATIONS FILED IN SINGAPORE(BASED ON CY)Total applicationsApplications by local-based entities

29IMPROVING QUALITY,TIMELINESS AND EFFICIENCYIPOS maintained a strongfocus on quality and reducedbacklog of existingapplications while exceedingall of its targets for the year.First action pendency – thelength of time between thereceipt of an IP applicationand when the IPOS makes apreliminary decision – wasconsistently maintainedthroughout the year. Fortrade marks, IPOS achieved90% within 4 months and100% within 6 months. 70%of patents grants wereprocessed within 4 months.85% of designs registrationcertificates were issuedwithin 2 months.As a result of the growth ininternational designsapplications, Singapore(22.1%) was also ranked the5th most designated countryafter EU (76.2%), Switzerland(68.5%), Turkey (41.8%) andUkraine (23%) for theInternational Registrationsunder the Geneva Act ofthe Hague agreement inTrademarks(% first action within 4 mths)(% first action within 6 mths)Patents (% grants processedwithin 4 mths)Designs (% issuance ofcertificates of registrationwithin 2 mths)2011. There were 592registrations from Haguedesignating Singapore ascompared to 569 from theprevious year.There has been a steadyincrease of registrationscoming in from Hague eversince Singapore becamemember to the agreementin Year 2005.LEGISLATIVE CHANGESTo position Singapore as anIP Hub of Asia, IPOS strivesTarget90%100%FY 2011Actual99.4%100%70% 99.6%85% 90%to keep up with the latestglobal IP trends anddevelopments, and havemade legislative changesto not just keep abreastwith global developmentsbut also to keep in syncwith technologicaladvancements, and ensurean optimum balance ofrights between IP ownersand IP users.IPOS is working on thefollowing enhancements tothe IP Regulatory Regime:

30• New Integrated Platformfor Intellectual PropertyIPOS will also be lookinginto continuedimprovements andenhancements of ourRegistries’ servicedelivery in areas such asquality of examinationreports and ease ofapplication services. Tomake it easier and moreconvenient for ourcustomers to executetransactions and accessinformation, IPOS will berolling out an integratedIT system to streamlineand harmonise commonprocedures acrossRegistries. The newsystem seeks to improveoperational efficiency,business processturnaround time,customer-centricity andprovide value-addedservices. This IntegratedPlatform for IntellectualProperty, or IP2SG, isslated for implementationin stages in 2013.• Change from the “Self-Assessment” to “PositiveGrant” Patent SystemA fundamental reviewof the patent systemgained momentum inFY2011. A series ofpublic consultationswas conducted in thelast quarter of thefinancial year to gatherfeedback on a proposalto change from thecurrent self-assessmentsystem to a positive grantsystem, where a fullypositive examinationreport would be requiredbefore a patent is grantedin Singapore. The positivegrant patent systemwill strengthen therobustness and qualityof the patent grants,and that will in turnincrease businessand investor confidencein Singapore’s patentregime. A two-daydialogue session betweenpatent examiners andusers was conducted inNovember 2011 to allowusers to betterunderstand the patentexamination process andfor examiners to gainbetter insight of userconcerns. Further workon this will continue andis expected to enter intoforce within the nextfinancial year.• Building IndigenousSearch and ExaminationCapabilitiesIPOS is developing inhousesearch andexamination (S&E)capabilities in keytechnological areas.Having our own worldclassS&E capabilities ispart of the effort todevelop a comprehensivesuite of IP capabilities inSingapore. Singaporeaims to provide worldclassS&E servicesefficiently and at acompetitive cost toinventors and companiesfiling in Singapore.

31• Liberalisation of thePatent Agent RegimeSingapore is amendingthe regulatoryrequirements to allowforeign-qualified patentagents and firms to setup in Singapore toundertake offshorepatent agency work,e.g. the drafting andfiling of patents for otherjurisdictions. This is toappeal to firms with anestablished and growingclient base in Asia.• Strategic Review ofDesigns LawIn the year ahead, IPOSwill also commission astudy of the existingRegistered Designs lawto ensure its continuedrelevance and currencyfor local and foreignapplicants in the faceof a changing globaldesign industry.DEVELOPING ALTERNATIVEDISPUTE RESOLUTIONCAPABILITIESIPOS also contributed to thedevelopment of Singapore’sstrong IP arbitrationcapabilities, allowingbusinesses to have accessto easy and affordablemeans to resolve legaldisputes. In 2010, WIPOestablished an Arbitrationand Mediation Centre (AMC)in Singapore (its only centreoutside Geneva) to supportIP dispute resolution in Asia.Following IPOS’ discussionswith WIPO AMC, it culminatedin a Memorandum ofUnderstanding (MOU)signed between IPOS’Chief Executive BG (NS)Tan Yih San and WIPO’sDirector-General Dr FrancisGurry, at the sidelines of theWIPO General Assembly on28 September 2011.The collaboration frameworkbetween IPOS and the WIPOAMC allows internationalparties to settle IP disputesvia mediation at the WIPOAMC. IPOS is also lookinginto setting up a panel of IPexpert adjudicatorscomprising eminent IPprofessionals to hear IPregistration disputes on anad-hoc basis. Theseinitiatives are aimed atpositioning Singapore as thepreferred choice system forIP litigation and arbitration.The new mediation optionwas launched on 3 January2012. With this launch, allCase ManagementConferences after the filingof pleadings now promotemediation as an option forparties to resolve theirtrademark disputes.Information about the newoption has also been placedon IPOS’ website to educateusers. IPOS has alsoproactively reviewed casesdue for hearing andconducted ad hoc CaseManagement Conferences

32to encourage parties toconsider mediation as analternative to adjudication.In total, IPOS hadconducted 49 CaseManagement Conferences(per mark per class) from theMOU till end of FY11.In the coming FY, IPOS isalso moving the hearingsand mediations processfrom a manual system toan automated one, alongwith the development ofIP2SG. This is a milestoneas such automation willresult in a more effectivedispute resolution process.Following the MOU, IPOSand IP Academy wereinvolved in the organisationof a mediation workshoptogether with WIPO on8-9 December 2011,aimed at promotingawareness of mediation inIP disputes and equippingour IP professionals withmediation skills. TheHearings and MediationGroup (HMG) also developeda specific trademark casescenario for use in therole play at the workshop.The case scenario waswell received by participantswho found it to be relevantand useful for fleshing outissues and interests of theparties. It was also said tobe illustrative of the potentialbenefits of mediation asthe case involved multiplejurisdictions and varioustricky, intertwined issueswhich could go either wayif adjudication was usedinstead of mediation.With this MOU, IPOS hasentered into a deeper levelof collaboration with WIPO,strengthening our linkageswith WIPO in discussingIP issues and exchangingperspectives and feedback.For example, WIPO AMC’srepresentative in Singaporeattended the CaseManagement Conferences,which were conducted byIPOS between January andMarch 2012, to introduceWIPO mediation and fieldquestions from partiesand agents to proceedingsfiled at IPOS. Followingfeedback on the cost ofmediation, WIPO AMC wasvery responsive in suggestingways to reduce costs.This was a critical factor inpersuading parties in onecase to submit to mediation.Besides the alternativedispute resolution option,IPOS also issued 8 practicecirculars in relation to trademark disputes in 2011.These circulars (publishedin the Trade Marks e-Journaland posted on the IPOSwebsite) provided usefulguidance on trade markdisputes filed at IPOSand provided greatertransparency andconsistency in the Registrar’sexercise of discretion inthe hearings processes, suchas the following:

33CASE HIGHLIGHT: “SUBWAY” CASEIn Doctor’s Associates Inc v Sim Meng Seh (T0709717I), the American “Subway”chain opposed a local sole proprietor’s application for a "Subway" trademarkfor women’s clothing. The sole proprietor has been trading in “Subway” clothingthat were supplied to departmental stores like Sogo (which has closed down)and BHG since 1988. The Opponents’ “Subway” sandwich chain came to Singaporeafter, even though it could not be established whether they came to Singaporein 1989 or 1996 or even later.The sole proprietor also owned a registration for the “Subway” mark from 1988-2005. When the mark was due for a second round of renewal in 2005, the renewalwas overlooked due to inadvertence. By the time he attempted to renew it in2007, the renewal was not possible. When he sought a fresh application in 2007,the application was opposed by the American “Subway” chain.However, the Registrar ruled in favour of the sole proprietor on the basis thatthe public would not draw a connection between the American “Subway” sandwichchain and the sole proprietor for women’s clothing because of the differencein the two trades and market segments.Even though it was found that the “Subway” brand was well known to a relevantsector of the public, its renown did not reach the level of brands like “Nutella”and therefore the brand reach is not as far reaching as to encroach into marketsthat are very different from that of the Opponents’ sandwich business.On the whole, the opposition fails on all grounds. Accordingly, Trade MarkApplication T0709717I proceeded to registration.

34PROMOTING THEIP SERVICES SECTORTo further developSingapore’s IP ecosystem,IPOS continually fine-tunesour initiatives andprogrammes to encouragegreater adoption of IPmanagement practices.REVIEWING THE NEEDSOF THE IP SERVICES SECTORTo better understand theIP landscape and addressexisting gaps, IPOS set up aCommittee to conduct a studyon the state of supply anddemand for IP services.Specifically, the objectivesof the survey were to identifythe types of IP services thathave propelled the IP servicessector and provide estimateson the size and growth of theIP services sector in Singapore.The respondents included512 users of IP services and79 IP service providers. Thesalient findings of each of thisgroup are as follows:IP services users • The top 3 IP services used are trade mark filing and renewal,IP brokerage/market intermediary work and patent draftingservices.• Top IP activities outsourced by companies are patentprosecution and renewal, patent drafting, trademark filingand renewal, and IP brokerage/market intermediary work.• 1 in 5 of the businesses that use IP services has in-housefull time employers (FTEs) for IP work. Those who handle IPwork in-house generally hire 3 or more FTEs.IP servicesproviders• 73% of the IP services providers offer trade mark filing andrenewal services. Other common services include due diligenceservices, patent prosecution and renewal, IP strategy/management, IP education and training, and patent draftingservices.• One-third of the IP services providers shared that revenuefrom IP work contributed at least 50% of their annual income.• IP brokerage/market intermediary work, IP valuation, and IPsupport services are usually outsourced.

35The Originals IP Music Fiesta 2011 – students at thecompetition.The Originals IP Music Fiesta 2011 winners fromCedar Girls got their opportunity to record theirwinning song professionally at the Ocean ButterfliesMusic recording studio.Both groups foresee growthin trade mark filing andrenewal, patent drafting, anddue diligence services until1st quarter of 2012.Regular environmentmonitoring and trendsgleaned from the IP ServicesSurvey indicated potentialgrowth in the demand for IPservices. In this regard, IPOShas been working closelywith the Ministry of Law andEconomic DevelopmentBoard to reach out toreputable IP serviceproviders to service the localmarket. At the same time,we will be starting groundwork to attract foreign IPfirms to base their operationshere to service customersthat are moving to Asia.SUPPORTING IP CREATIONAND EXPLOITATIONAimed at bridging the gapbetween IP creation andexploitation, IPOS launchedan online portal calledIdeas2IP which offers analternative venue for IPworthyideas. The platformgives inventors theopportunity to share theirideas with potential investorsin a secure environment.Singapore is the first in SouthEast Asia to provide suchplatform. Investors with themeans and experience canhelp to fund and guide thefurther development of theideas into a form that hascommercial potential. Withthis platform, IPOS hopes toencourage IP owners,intermediaries and privatesector companies to turnideas into commercial reality.To date, Ideas2IP hasreached out to more than9,000 persons, where 220registered users contributed140 ideas on this platform,resulting in an increase in IPfilings and services.ENCOURAGING INDUSTRY-LED INITIATIVEIPOS also engaged theCollective ManagementOrganisations (CMOs) formusic and related works witha view to facilitating thecreation of a self-regulatoryframework to establishindustry standards and bestpractices. This could resultin enhancing transparency,good corporate governanceand public accountability ofthe CMO’s business andlicensing processes.

36electronic mailers. IPOS alsoassisted interested companiesto take their businesses togreater heights by committingclose to $5 million grants toundertake IP Managementprojects last year. This isexpected to generate closeto $160 million economicvalue-add and almost600 jobs.Law Minister Mr K Shanmugam (middle) with the winners of “The Originals Get ReelContest” on 13 January 2012.DEVELOPING ANIP-SAVVY NATIONIn FY 2011, IPOS had alsotaken active steps to raiseIP awareness andcapabilities. The impactcould be felt by many acrossthe various target segments:A. General PublicIPOS organised severaloutreach programmes underthe auspice of the HonourIntellectual Property (HIP)Alliance to facilitate deeperengagements with membersof the public. More than72,000 took part in variousonline activities and offlineevents. Some of the keyhighlights included “TheOriginals IP Race” which washeld in conjunction with theWorld IP Day, as well as thelaunch of two new movietrailers in cinemas islandwide.These trailers were thewinning entries from TheOriginals Get Reel TrailerContest and were producedentirely by our creativeyouths in depicting thetheme of supportingoriginality.B. Small Medium EnterprisesLeveraging well-establishednetworks built over the yearswith various businesses aswell as trade associations,IPOS proactively engagedsome 11,000 local firms viacommunication platformssuch as seminars andC. Public AgenciesTasked to deepen IPawareness and improveIP management (IPM)capabilities within publicagencies as well as at theWhole-of-Government level,IPOS also providesconsultancy services on IPMcapability building projects.A Community of Practitioners(CoP) initiative was startedto nurture a self-directingcommunity of IPMpractitioners across publicagencies to better deal withthe IPM knowledge domainand lead in the adoption ofeffective IPM practices withinthe Whole-of-Government.This initiative has sincereached out to more than3,000 public service officersand has grown to an activecommunity of almost 160IPM practitioners from46 public agencies with agood mix of senior and keypublic officers.

37BUILDING THEIP CAPACITYIPOS foresees continued growth in demand for IP services and aims to develop programmesto build up the IP manpower and capability in Singapore:EUROPE ASIA PATENT AND PATENT INFORMATION CONFERENCE (EAP 2 IC)As part of our capacity building efforts and in collaboration with the EPO and WIPO, the 9 thedition of the Europe Asia Patent and Patent Information Conference (EAP 2 IC) shed light tothe 144 delegates on how to protect and manage firms’ IP assets and align them to theirbusiness strategies, with particular focus on how to gain a competitive edge in the MedicalTechnology and Biotechnology industries. A 2-day public workshop was run focusing on themethodologies on how to conduct patent searching, examination and landscaping, and ledby an EPO Examiner.Chairman Mr Quek Tong Boon speaking atthe Europe Asia Patent and Patent InformationConference (EAP2IC) 2011.Chief Executive BS (NS) Tan Yih San withdelegates at the Europe Asia Patent and PatentInformation Conference (EAP2IC) 2011.IP CONSULTThe IP Consult Series aims to foster an IP-savvy Singapore by educating the business communityand general public to appreciate and leverage IP for competitive advantage. An interactivefirst-level platform between local companies/creators and IP professionals, the goal of theIP Consult is to provide basic information on IP types and general/personalised consultationon IP creation, protection and exploitation issues. In 2011, 4 public sessions were run at theNational library Board (NLB) with another 7 sessions conducted in collaboration withassociations, such as the Associations of Small and Medium Size Enterprises (ASME), SingaporeChinese Chamber of Commerce and Industry (SCCCI), and the Singapore Manufacturers’Federation (SMa). Attended by 239 participants, the coverage ranged from general IPawareness ones to thematic areas such as IP Management in Asia and the Lifestyle sector.

38IP COMPETENCY FRAMEWORKThe first of its kind in the world on a nationwide scale, the IP Competency Framework (IPCF),is a strategic tool to transform IP manpower development by continuously advancing professionalcompetencies through quality training and skills upgrading. As part of the IPCF, the IP WorkforceSkills Qualification (WSQ) was created in collaboration with the Singapore WorkforceDevelopment Agency (WDA) in 2011 to leverage on the WSQ system and methodology. Todate, 4 key IP occupational levels and 6 professional certification pathways have been defined.Of the 78 competency units listed in the IPCF, 15 have been developed and validated intocompetency standards with key industry experts from the IP services sector, academia, andthe legal profession. IPOS will also accredit training providers under the IPCF who woulddevelop structured training programmes and certify successful programme participants.THE ESTABLISHMENT OF NEWCAPACITY BUILDING GROUPTo meet the growing demandof IP services and theincreasingly changing andcomplex global environment,IPOS also embarked on a keyreorganisation in Q3 ofFY2011. Under the reorganisation,the IP Academy(IPA), a company limited byguarantee, was restructuredand became a full subsidiaryof IPOS, with effect from1 April 2012. Therestructured IPA will offerworld-class resource forthe development ofknowledge and capabilitiesin the protection, exploitationand management of IP. Inthe coming year, IPA willalign its training programmesfor IP professionals,businesses and publicagencies, as well as a rangeof IP thought-leadershipprogrammes to look into IPand related areas.

39OURPEOPLE“People focus” and“Teamwork” were chosen astwo of our core values in anIPOS-wide survey conductedin 2012. People are at thevery heart of ourorganisation. We believe thatthe ability to achieve and theeffectiveness in achievingour mission and vision lie inthe synergistic behaviour ofa motivated workforce.IPOSians and their family membersposing for a “family” portrait atMarina Bay Sands’ new Art ScienceMuseum on 16 July 2011.To foster stronger spirit ofcamaraderie and teamwork,regular staff bondingactivities were conductedthroughout the financial year.As the lead governmentagency for IP matters, we notonly encourage innovativepursuits in Singapore, butalso within our ownorganisation. IPOS organisedan Innovation Carnival on 17October 2011, whereIPOSians were given aplatform to showcase theircreations to fellowcolleagues and“commercialise” their ideas.IPOSians proudlyshowcasingtheir creationsat theInnovationCarnivalorganised byIPOS on 17October 2011.

40Mr Dick Lee recognised asSingapore’s IP Ambassadorat IPOS’ 10th AnniversaryMs Tay Kewei,also Singapore’sIP Ambassador,singing at IPOS’10th AnniversaryCelebrations.IPOSians dressed in “action” atthe annual dinner and dance on24 November 2011.On 16 July 2011, Family Daysaw IPOSians and theirfamily members gatheringbright and early at MarinaBay Sands’ new Art ScienceMuseum where theirimagination were stimulatedby the surreal works ofSalvador Dali. At our annualDinner and Dance on24 November 2011,we witnessed great sportand ingenuity when IPOSiansfound creative means ofdressing to the theme of the“Professionals in Action”!

41AWARDSANDACCOLADESWith the help of ourmotivated workforce, IPOScontinues to make strides inthe pursuit of serviceexcellence.IPOS’ knowledgemanagement (KM) system,KENNY, was presentedas a case study at KMSingapore on 31 Augustto 2 September 2011 andKM Asia on 8 to 10November 2011. These twoevents brought the KMcommunity in Singaporetogether to exchange insightsabout the latestdevelopment in KM with thesharing of regional andinternational case studiesfrom both governmentagencies and businessenterprises.As part of regular review, alldepartments in theInfrastructure & CapabilityDevelopment Group (ICDG)underwent an assessmentto improve overallproductivity and efficiency.In 2011, EnterpriseDevelopment Department(EDD) clinched the MinLawWITS Gold award forachieving operationalefficiency in its execution ofIP Management grantprocesses.Over the years, there wasalso an increase in thenumber of IPOS staffrecognised for good service.In fact, IPOS achieved arecord 27 recipients for thenational level ExcellentService Award administeredby SPRING Singapore in2011:

42Ms Heng LishanMs Neo Gim YoongMrs Wong-Teo Li LianMr Dan Choo Khin YongMs Haslinda Binte MasudMs Cheong Yin MayMs Alinah Bte Md AliMs Corinne Yip Pui LaiMs Erlina Bte AdamMs Wang PeiqiMs Tan Yong HwiMs Suriati Bte Ra’atMs Yam Lai WahMs Foong Shu LingMs Noridah Binte JamaluddinMs Foo Wee YingMs Jasmine Chan Pui WanMs Yeo Li SungMs Ferlin Ong Tuan LengMs Low Jin WeiMs Chung Ka YeeMs Lee Joo Kim ConstanceMs Huang QinyiMs Fong Phoa Si GraceMs Siti Farisha d/o Osman Aboo BakarMs Norlela Binti NasirMs Mariana Binte Jumari

43Our officers were alsorecognised for various formsof merit and service to thenation in the NationalDay Awards 2012. Theprestigious CommendationMedal was awarded to MsChristine Chua Kiat Tze,Principal Assistant Directorof Human CapitalDepartment, for superiorperformance, consistentdiligence and dedication inher work. Besides that, theLong Service Medals werealso given to our DeputyChief Executive, Ms ChiamLu Lin, and her PersonalAssistant, Ms Chan SookFun, after having served ournation for 25 years.Last but not least, we alsorecognised dedicatedemployees who have beenwith IPOS for a significantnumber of years. This year,IPOS handed out long serviceawards to the followingemployees:10YEARS5YEARSMs Ho Sok YinMs Kathryn Tham Lai ThengMs Lim May YenMs Neeta Devi d/o SathasivamMs Ng Cze SinMdm Saadiah IsmailMs Sandra Lynn MerindaMs Tay Kay LingMr Eric Toh Hock ChyeMs Fatehah Muhd KhairuddinMr James Yee Wai MunMr Jeffrey Wong Chern WeiMs Pyait Hlaing OoMs Samantha Yio Phui Ling

4440YEARSMrs Kam-Foo Kim Pong25YEARSMs Chiam Lu LinMs Jenny Chan Sook Fun15YEARSMs Suriati Bte Ra’atMoving forward, IPOS iscommitted to nurturing thecapabilities of our peoplealong with cultivating thedevelopment of the nationas an IP Hub of Asia.

45STATISTICS20I0 - 20II

58FINANCIALSTATEMENTSFor the financial year ended 31 March 2012INTELLECTUAL PROPERTY OFFICE OF SINGAPOREFINANCIAL STATEMENTSFor the financial year ended 31 March 2012Audit AllianceCertified Public Accountants

INTELLECTUAL PROPERTY OFFICE OF SINGAPOREFINANCIAL STATEMENTSFor the financial year ended 31 March 2012Audit AllianceCertified Public Accountants59

INTELLECTUAL PROPERTY OFFICE OF SINGAPOREFINANCIAL STATEMENTSFor the financial year ended 31 March 2012ContentsPageStatement by Board of Directors 61Independent Auditor’s Report 62 & 63Statement of Comprehensive Income 64Statement of Financial Position 65 & 66Statement of Changes in Equity 67Statement of Cash Flows 68 - 82Notes to the Financial Statements 83 - 9360

INTELLECTUAL PROPERTY OFFICE OF SINGAPORESTATEMENT BY BOARD OF DIRECTORSFor the financial year ended 31 March 2012In our opinion:(a)(b)(c)the accompanying financial statements of Intellectual Property Office of Singapore (the “Office”) as setout on pages 64 to 93 are properly drawn up in accordance with the provisions of the Intellectual PropertyOffice of Singapore Act 2001 (No. 3 of 2001) (the “Act”) and Statutory Board Financial ReportingStandards so as to give a true and fair view of the state of affairs of the Office as at 31 March 2012 and ofthe results, changes in equity and cash flows of the Office for the year ended on that date;at the date of this statement, there are reasonable grounds to believe that the Office will be able to payits debts as and when they fall due; andnothing came to our notice that caused us to believe that the receipts, expenditure, and investment ofmonies and the acquisition and disposal of assets by the Office during the financial year have not beenin accordance with the provisions of the Act.The Board of Directors has, on the date of this statement, authorised these financial statements for issue.ON BEHALF OF THE BOARD OF DIRECTORS____________________Mr Quek Tong BoonChairman_____________________BG (NS) Tan Yih SanChief Executive25 July 2012161

INDEPENDENT AUDITORS’ REPORT TO THE MEMBER OFINTELLECTUAL PROPERTY OFFICE OF SINGAPOREReport on the financial statementsWe have audited the financial statements of Intellectual Property Office of Singapore (the “Office”), which comprisethe statement of financial position as at 31 March 2012, and the statement of comprehensive income, statement ofchanges in equity and statement of cash flows for the year then ended, and a summary of significant accountingpolicies and other explanatory notes, as set out on pages 64 to 93.Management’s Responsibility for the Financial StatementsThe Office’s management is responsible for the preparation of financial statements that gives a true and fair viewin accordance with the provisions of the Intellectual Property Office of Singapore Act 2001 (No. 3 of 2001) (the“Act”) and Statutory Board Financial Reporting Standards (“SB-FRS”), and for devising and maintaining asystem of internal accounting controls sufficient to provide reasonable assurance that assets are safeguardedagainst loss from unauthorised use or disposition; and transactions are properly authorised and that they arerecorded as necessary to permit the preparation of true and fair profit and loss account and balance sheet and tomaintain accountability of assets.Auditors’ ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We conducted ouraudit in accordance with Singapore Standards on Auditing. Those standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whether the financial statementsare free from material misstatement.An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in thefinancial statements. The procedures selected depend on the auditor’s judgement, including the assessment of therisks of material misstatement of the financial statements, whether due to fraud or error. In making those riskassessments, the auditor considers internal control relevant to the entity’s preparation of the financial statementsthat gives a true and fair view in order to design audit procedures that are appropriate in the circumstances, but notfor the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit alsoincludes evaluating the appropriateness of accounting policies used and the reasonableness of accountingestimates made by management, as well as evaluating the overall presentation of the financial statements. Webelieve that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our auditopinion.62

OpinionIn our opinion, the financial statements are properly drawn up in accordance with the provisions of the Actand SB-FRS so as to give a true and fair view of the state of affairs of the Office as at 31 March 2012, and ofthe results, changes in equity and cash flows of the Office for the financial year ended on that date.Report on Other Legal and Regulatory RequirementsIn our opinion, the accounting and other records required by the Act to be kept by the Office have beenproperly kept in accordance with the provisions of the Act.During the course of our audit, nothing came to our notice that caused us to believe that the receipt,expenditure, and investments of moneys and the acquisition and disposal of assets by the Office during thefinancial year have not been in accordance with the provisions of the Act.Audit AlliancePublic Accountants and Certified Public AccountantsSingapore25 July 201263

INTELLECTUAL PROPERTY OFFICE OF SINGAPORESTATEMENT OF COMPREHENSIVE INCOMEFor the financial year ended 31 March 2012Note 2012 2011S$ S$Operating incomeRegistration fees 6 36,097,990 31,317,004Other fees and charges 428,637 1,055,75036,526,627 32,372,754Operating expenditureEmployee benefits expense 7 (16,363,377) (17,334,705)Maintenance of office premises and computers (5,319,234) (5,374,736)Rental of office premises (2,162,784) (2,163,312)General and administrative expenses (3,007,290) (2,507,998)Depreciation expense 17 (1,578,655) (1,924,995)Operating surplus 8 8,095,287 3,067,008Non-operating incomeInvestment and interest income 9 424,760 391,414Surplus before grants and contribution toConsolidated Fund 8,520,047 3,458,422GrantsOperating grants 468,685 1,456,908Deferred capital grants amortised- Government 10 125,864 137,167- Infocomm Development Authority of Singapore 11 - 17,991Surplus before contribution to Consolidated Fund 9,114,596 5,070,488Contribution to Consolidated Fund 12 (1,549,481) (861,983)Net surplus for the year 7,565,115 4,208,505Other comprehensive incomeReclassification to profit or loss from equity on disposalof available-for-sale investmentsil bl f l i- (420,224)Total comprehensive income for the year 7,565,115 3,788,281The accompanying notes form an integral part of these financial statements.Auditors’ Report – Page 62 & 63.64

INTELLECTUAL PROPERTY OFFICE OF SINGAPORESTATEMENT OF FINANCIAL POSITIONAs at March 31, 2012Note 2012 2011S$ S$EquityShare capital 13 1,000 1,000Accumulated surplus 49,244,314 41,680,199Total equity 49,245,314 41,681,199Current assetsCash and cash equivalents 14 73,633,344 64,633,297Trade receivables 15 2,311,204 1,362,662Other receivables 16 523,290 668,348Grant receivable - 306,631Total current assets 76,467,838 66,970,938Non-current assetEquipment 17 3,911,215 3,543,928Total assets 80,379,053 70,514,866Current liabilitiesTrade payables 18 3,733,623 3,393,672Other payables 19 4,478,152 4,022,362Deferred revenue 2(o) 2,074,374 2,127,439Grant received in advance 5,000 -Provision for contribution to Consolidated Fund 12 1,549,481 861,983Patent deposits 2(j) 9,588,281 9,031,538Current portion of finance lease 23 106,292 138,547Deferred capital grants- Government 10 30,709 125,864Total current liabilities 21,565,912 19,701,405The accompanying notes form an integral part of these financial statements.Auditors’ Report – Page 62 & 63.65

INTELLECTUAL PROPERTY OFFICE OF SINGAPORESTATEMENT OF FINANCIAL POSITIONAs at March 31, 2012Non-current liabilitiesNote 2012 2011S$ S$Deferred revenue 2(o) 9,483,740 8,911,174Finance lease 23 - 106,292Deferred capital grants- Government 10 84,087 114,796Total non-current liabilities 9,567,827 9,132,262Total liabilities 31,133,739 28,833,667Net assets of the Office 49,245,314 41,681,199Funds held on behalf of others 22 66,479 25,223Funds’ net assets held on behalf of others 22 (66,479) (25,223)- -The accompanying notes form an integral part of these financial statements.Auditors’ Report – Page 62 & 63.66

INTELLECTUAL PROPERTY OFFICE OF SINGAPORESTATEMENT OF CHANGES IN EQUITYFor the financial year ended 31 March 2012NoteShare Accumulated Fair valuecapital surplus reserve TotalS$ S$ S$ S$At 1 April 2010 1,000 37,721,694 420,224 38,142,918Total comprehensive incomefor the year - 4,208,505 (420,224) 3,788,281Dividends 20 - (250,000) - (250,000)At 31 March 2011 1,000 41,680,199 - 41,681,199Total comprehensive incomefor the year - 7,565,115 - 7,565,115Dividends 20 - (1,000)-(1,000)At 31 March 2012 1,000 49,244,314 - 49,245,314The accompanying notes form an integral part of these financial statements.Auditors’ Report – Page 62 & 63.67

INTELLECTUAL PROPERTY OFFICE OF SINGAPORESTATEMENT OF CASH FLOWSFor the financial year ended 31 March 2012Operating activitiesNote 2012 2011S$ S$Surplus before grants and contribution toConsolidated Fund 8,520,047 3,458,422Adjustments for:Depreciation expense 17 1,578,655 1,924,995Interest on finance lease 8 5,022 24,121Interest income 9 (424,760) (361,201)Investment interest income 9 - (17,674)Investment dividend income 9 - (12,539)Gain on disposal of available-for-sale investments 8 - (383,874)Loss/(Gain) on disposal of equipment 31,245 (254)9,710,209 4,631,996Changes in working capital:Trade and other receivables (803,484) 147,645Trade and other payables 490,008 3,394,282Deferred revenue 519,501 449,860Patent deposits 556,743 346,070Cash from operations 10,472,977 8,969,853Interest received 424,760 180,475Investment interest income received - 78,169Investment dividend income received - 12,539Contribution to Consolidated Fund (1,549,481) (904,490)Net cash from operating activities 9,348,256 8,336,546Investing activitiesPurchase of equipment (Note A) (1,042,399) (922,286)Proceeds on disposal of equipment 58,443 281Proceeds on disposal of available-for-sale investments - 8,286,821Increase in fixed deposits and cash with fund manager - -Net cash (used in)/from investing activities (983,956) 7,364,816The accompanying notes form an integral part of these financial statements.Auditors’ Report – Page 62 & 63.68

INTELLECTUAL PROPERTY OFFICE OF SINGAPORESTATEMENT OF CASH FLOWSFor the financial year ended 31 March 2012Financing activitiesNote 2012 2011S$ S$Grants received 780,316 1,294,427Dividends paid 20 (1,000) (250,000)Repayment of finance lease obligations (143,569) (145,916)Net cash from financing activities 635,747 898,511Net increase in cash and cash equivalents 9,000,047 16,599,873Cash and cash equivalents at beginning of year 64,633,297 48,033,424Cash and cash equivalents at end of year 14 73,633,344 64,633,297Note AThe Office acquired equipment amounting to S$2,035,630(2011: S$1,177,791) of which S$57,876 (2011:S$238,671) was invoiced but unpaid, and S$935,355(2011: S$16,846) was accrued for. There were noassets acquired (2011: S$366,634) under finance lease arrangement as at the end of the current reportingperiod. Cash payment of S$1,042,399(2011: S$922,286) was made to purchase equipment during the year.The accompanying notes form an integral part of these financial statements.Auditors’ Report – Page 62 & 63.69

INTELLECTUAL PROPERTY OFFICE OF SINGAPORESTATEMENT OF CASH FLOWSFor the financial year ended 31 March 20121 GeneralThe Intellectual Property Office of Singapore (the “Office”), officially established under theIntellectual Property Office of Singapore Act 2001 (No. 3 of 2001) on 1 April 2001, is domiciledin Singapore. The Office’s place of business is situated at 51 Bras Basah Road #04-01 ManulifeCentre, Singapore 189554.The principal activities of the Office are:(a)(b)(c)(d)(e)(f)(g)administering the systems of protection of intellectual property (“IP”) in Singapore;formulating and reviewing of IP rights policies and legislations;maintaining and disseminating of IP information and documents;representing the Government internationally on IP matters;nurturing and training of IP agents;co-operating with other organisations and IP offices on IP programmes; andpromoting the awareness and effective use of IP rights.The financial statements of the Office for the year ended 31 March 2012 were authorised for issueby the Board of Directors on 25 July 2012.2 Summary of Significant Accounting Policies(a) Basis of PreparationThe financial statements have been prepared in accordance with the historical cost basis exceptas disclosed in the accounting policies below, and are drawn up in accordance with theprovisions of the Intellectual Property Office of Singapore Act 2001 (No. 3 of 2001) andStatutory Board Financial Reporting Standards (“SB-FRS”). The SB-FRS include StatutoryBoard Financial Reporting Standards, Interpretations of SB-FRS and SB-FRS Guidance Notesas prescribed by the Accountant-General.The financial statements are presented in Singapore dollars which is the Office’s functionalcurrency.Interpretations and amendments to published accounting standards effective in 2011/2012The following is the new and revised SB-FRSs and Interpretations of SB-FRS (“INT SB-FRS”)that is relevant to the Office:SB-FRS 24 (Revised)Related Party DisclosuresThe adoption of the above new/revised SB-FRSs and INT SB-FRSs does not result in changes tothe Office’s accounting policies during the financial period or any significant impact on thesefinancial statements.The accompanying notes form an integral part of these financial statements.Auditors’ Report – Page 62 & 63.70

INTELLECTUAL PROPERTY OFFICE OF SINGAPORESTATEMENT OF CASH FLOWSFor the financial year ended 31 March 20122 Summary of Significant Accounting Policies (continued)(a) Basis of Preparation (continued)Future changes in Statutory Board Financial Reporting Standards (SB-FRS)At the date of authorisation of these financial statements, the following new SB-FRSs and amendmentsto SB-FRS that are relevant to the Office were issued but will be effective in future:SB-FRS No.SB-FRS 1TitleAmendments to SB-FRS 1- Presentation ofItems of Other Comprehensive IncomeEffective Date forperiods beginning on orafter1 July 2012SB-FRS 19 Employee Benefits 1 January 2013The management anticipates that the adoption of the above SB-FRSs and amendments to SB-FRS infuture periods will not have a material impact on the financial statements of the Office in the period oftheir initial adoption.(b)Revenue RecognitionRevenue is measured at the fair value of the consideration received or receivable.(i) Registration feeRegistration fee is recognised when the registration service has been rendered. Revenue fromrenewal for trademark is recognised over the effective protection period of 10 years on a straightlinebasis.(ii) Other fees and chargesOther fees and charges comprise regulatory charges, conference and workshop service chargesand membership feesThese are recognised when the relevant services have been rendered.(iii) Interest incomeInterest income is recognised on an accrual basis by reference to the principal outstanding andat the effective interest rate applicable which is the rate that exactly discounts estimated futurecash receipts through the expected life of the financial asset to the net carrying amount(iv) Investment income from funds with fund managers, net of management feeInvestment income is recognised on an accrual basis.(v) Dividend incomeDividend income is recognised when the right to receive payment is established.The accompanying notes form an integral part of these financial statements.Auditors’ Report – Page 62 & 63.71

INTELLECTUAL PROPERTY OFFICE OF SINGAPORESTATEMENT OF CASH FLOWSFor the financial year ended 31 March 20122 Summary of Significant Accounting Policies (continued)(c) Retirement Benefit CostsPayments to defined contribution retirement benefit plans are charged as an expense when employeeshave rendered the services entitling them to the contributions. Payments made to state-managedretirement benefit schemes, such as the Singapore Central Provident Fund, are dealt with as paymentsto defined contribution plans where the Office’s obligations under the plans are equivalent to thosearising in a defined contribution retirement benefit plan.(d) Employee Leaves EntitlementEmployee entitlements to annual leave are recognised when they accrue to employees. Aprovision is made for the estimated liability for annual leave as a result of services rendered byemployees up to the end of the reporting period.(e) Government GrantsGovernment grants relating to the purchase of equipment are included in the statement of financialposition as deferred capital grant accounts and are credited to profit or loss on a straight-line basisover the expected lives of the related assets. Government grants relating to expenditures which arenot capitalised are credited to profit or loss as and when the underlying expenses are included andtaken to profit or loss to match such related expenditure.(f)Funds Held on Behalf of OthersFunds held on behalf of others such as the Patent Agent Manpower Capability and DevelopmentFund (“PAMCDF”) are set up to account for monies held in trust for external parties.These funds are maintained separately from the Office’s financial statements.(g) Financial InstrumentsFinancial assets and financial liabilities are recognised on the Office’s statement of financialposition when the Office becomes a party to the contractual provisions of the instrument.Effective interest methodThe effective interest method is a method of calculating the amortised cost of a financialinstrument and of allocating interest income or expense over the relevant period. The effectiveinterest rate is the rate that exactly discounts estimated future cash receipts or payments (includingall fees paid or received that form an integral part of the effective interest rate, transaction costsand other premium discounts) through the expected life of the financial instrument, or whereappropriate, a shorter period. Income and expense is recognised on an effective interest basis fordebt instruments.Financial assetsFinancial assets comprise investments in equity and debt securities, trade and other receivables,grant receivables and cash and cash equivalents. They are initially measured at fair value plustransaction costs, except for those financial assets classified as at fair value through profit or losswhich are initially measured at fair value.The accompanying notes form an integral part of these financial statements.Auditors’ Report – Page 62 & 63.72

INTELLECTUAL PROPERTY OFFICE OF SINGAPORESTATEMENT OF CASH FLOWSFor the financial year ended 31 March 20122 Summary of Significant Accounting Policies (continued)Financial assets (continued)ClassificationFinancial assets are classified into the following specific categories: financial assets “at fair valuethrough profit or loss”, “held to maturity investments”, “available-for-sale” financial assets and“loans and receivables”. The classification depends on the nature and purpose of financial assets andis determined at the time of initial recognition.(i) Financial assets at fair value through profit or lossThis category has two sub-categories: financial assets held for trading, those designated at fair valuethrough profit or loss at inception. A financial asset is classified as held for trading if it is acquiredprincipally for the purpose of selling in the short term. Financial assets designated as at fair valuethrough profit or loss at inception are those that are managed and their performances are evaluatedon a fair value basis. Derivatives are also categorized as held for trading unless they are designatedas hedges. Asset in this category are presented as current assets if they are either held for trading orare expected to be realized within 12 months after the balance sheet date.The Office has no financial assets at fair value through profit or loss in 2012 and 2011.(ii) Loans and receivablesLoans and receivables are non-derivative financial assets with fixed or determinable payments thatare not quoted in an active market. They are presented as current assets, except for those expected tobe realized later than 12 months after the balance sheet date which are presented as non-currentassets. Loans and receivables are presented as “trade receivables” (Note15), “cash and cashequivalents” (Note 14) and “grant receivable”.(iii) Held-to-maturity investmentsHeld-to-maturity investments are non-derivative financial assets with fixed or determinablepayments and fixed maturities that the Office has the positive intention and ability to hold tomaturity. They are presented as non-current assets, except for those maturing within 12 months afterthe balance sheet date which are presented as current assets.The Office has no held-to maturity investments in 2012 and 2011.(iv) Available-for-sale financial assetsCertain shares and debt securities held by the Office are classified as being available-for-sale andare stated at fair value. Fair value is determined in the manner described in Note 4. Gains and lossesarising from changes in fair value are recognised in other comprehensive income with the exceptionof impairment losses, interest calculated using the effective interest method and foreign exchangegains and losses on monetary assets which are recognised directly in profit or loss. Where theinvestment is disposed of or is determined to be impaired, the cumulative gain or loss previouslyrecognised in other comprehensive income and accumulated in revaluation reserve is reclassified toprofit or loss. Dividends on available-for-sale equity instruments are recognised in profit or losswhen the Office’s right to receive payments is established.The accompanying notes form an integral part of these financial statements.Auditors’ Report – Page 62 & 63 .73

INTELLECTUAL PROPERTY OFFICE OF SINGAPORESTATEMENT OF CASH FLOWSFor the financial year ended 31 March 20122 Summary of Significant Accounting Policies (continued)Financial assets (continued)Classification (continued)(iv) Available-for-sale financial assetsThe fair value of available-for-sale monetary assets denominated in a foreign currency is determinedin that foreign currency and translated at the spot rate at end of the reporting period. The change infair value attributable to translation differences that result from a change in amortised cost of theasset is recognised in profit or loss, and other changes are recognised in other comprehensiveincome.The Office has no available-for-sale financial assets in 2012 and 2011.Derecognition of financial assetsThe Office derecognises a financial asset only when the contractual rights to the cash flows from theasset expire, or it transfers the financial asset and substantially all the risks and rewards of ownership ofthe asset to another entity. If the Office neither transfers nor retains substantially all the risks andrewards of ownership and continues to control the transferred asset, the Office recognises its retainedinterest in the asset and an associated liability for amounts it may have to pay. If the Office retainssubstantially all the risks and rewards of ownership of a transferred financial asset, the Office continuesto recognise the financial asset and also recognises a collateralised borrowing for the proceedsreceived.Initial measurementFinancial assets comprise investments in equity and debt securities, trade and other receivables,grant receivables and cash and cash equivalents. They are initially measured at fair value plustransaction costs, except for those financial assets classified as at fair value through profit or losswhich are initially measured at fair value.Subsequent measurementLoans and receivables are carried at amortised cost using the effective interest method.Impairment of financial assetsFinancial assets are assessed for indicators of impairment at the end of each reporting period.Financial assets are impaired where there is objective evidence that, as a result of one or moreevents that occurred after the initial recognition of the financial assets, the estimated future cashflows of the financial asset have been impaired. For financial assets carried at amortised cost, theamount of the impairment is the difference between the asset’s carrying amount and the presentvalue of estimated future cash flows, discounted at the original effective interest rate.The carrying amount of the financial asset is reduced by the impairment loss directly for all financialassets with the exception of receivables where the carrying amount is reduced through the use of anallowance account. When a receivable is uncollectible, it is written off against the allowance account.Subsequent recoveries of amounts previously written off are credited against the allowance account.Changes in the carrying amount of the allowance account are recognised in profit or loss.The accompanying notes form an integral part of these financial statements.Auditors’ Report – Page 62 & 63.74

INTELLECTUAL PROPERTY OFFICE OF SINGAPORESTATEMENT OF CASH FLOWSFor the financial year ended 31 March 20122 Summary of Significant Accounting Policies (continued)Financial assets (continued)Impairment of financial assets (continued)For available-for-sale equity instruments, a significant or prolonged decline in the fair value of theinvestment below its cost is considered to be objective evidence of impairment.For all other financial assets, objective evidence of impairment could include:significant financial difficulty of the issuer or counterparty; ordefault or delinquency in interest or principal payments; orit becoming probable that the borrower will enter bankruptcy or financial re-organisation.With the exception of available-for-sale equity instruments, if, in a subsequent period, the amount ofthe impairment loss decreases and the decrease can be related objectively to an event occurring afterthe impairment loss was recognised, the previously recognised impairment loss is reversed throughprofit or loss to the extent the carrying amount of the investment at the date the impairment is reverseddoes not exceed what the amortised cost would have been had the impairment not been recognised.In respect of available-for-sale equity instruments, impairment losses previously recognised inprofit or loss are not reversed through profit or loss. Any subsequent increase in fair value after animpairment loss is recognised in other comprehensive income.Financial liabilities and equity instrumentsClassification as debt or equityFinancial liabilities and equity instruments issued by the Office are classified according to thesubstance of the contractual arrangements entered into and the definitions of a financial liabilityand an equity instrument.Equity instrumentsAn equity instrument is any contract that evidences a residual interest in the assets of the Officeafter deducting all of its liabilities. Equity instruments are recorded at the proceeds received, net ofdirect issue costs.Derecognition of financial liabilitiesThe Office derecognises financial liabilities when, and only when, the Office’s obligations aredischarged, cancelled or they expire.(h) Trade and other receivables and grant receivableTrade and other receivables and grant receivable are measured at amortised cost using the effectiveinterest method less impairment. Interest is recognised by applying the effective interest method,except for short-term balances when the recognition of interest would be immaterial.The accompanying notes form an integral part of these financial statements.Auditors’ Report – Page 62 & 63.75

INTELLECTUAL PROPERTY OFFICE OF SINGAPORESTATEMENT OF CASH FLOWSFor the financial year ended 31 March 20122 Summary of Significant Accounting Policies (continued)(i)Cash and cash equivalentsCash and cash equivalents comprise cash on hand, cash at bank and fixed deposits which aresubject to an insignificant risk of changes in value.(j)Trade and other payables and patent depositsTrade and other payables and patent deposits are initially measured at fair value, net oftransaction costs and are subsequently measured at amortised cost, using the effective interestmethod, with interest expense recognised on an effective yield basis, except for short-termbalances where the recognition of interest would be immaterial.Patent deposits are received for patent search and examination conducted by international searchauthorities.(k)Equipment(i) MeasurementEquipment is stated at cost, less accumulated depreciation and any impairment loss.Equipment held and utilised by the Office while it was a department of the Ministry of Lawbefore its establishment as a statutory board were transferred at net book value to the Officeon 1 April 2001 and depreciated over their remaining useful lives.(ii) DepreciationDepreciation is charged so as to write off the cost of assets over their estimated useful lives,using the straight-line method, on the following bases:YearsOffice equipment, furniture and fittingsComputer equipment and software5 to 8 years3 to 5 yearsNo depreciation is charged on assets under construction.Low value assets costing less than $2,000 are fully depreciated in the month of purchase.Fully depreciated assets still in use are retained in the financial statements. The estimateduseful lives, residual values and depreciation method are reviewed at the end of each reportingperiod, with the effect of any changes in estimate accounted for on a prospective basis.The accompanying notes form an integral part of these financial statements.Auditors’ Report – Page 62 & 63.76

INTELLECTUAL PROPERTY OFFICE OF SINGAPORESTATEMENT OF CASH FLOWSFor the financial year ended 31 March 20122 Summary of Significant Accounting Policies (continued)(k)Equipment (continued)(iii) Subsequent expendituresSubsequent expenditures relating to equipment that has already been recognised is added tothe carrying amount of the asset when it is probable that future economic benefits, in excessof the standard of performance of the asset before the expenditure was made, will flow to theOffice and the cost can be reliably measured. Other expenditures is recognised as an expenseduring the financial year in which it is incurred.(iv) DisposalThe gain or loss arising on the disposal or retirement of equipment is determined as thedifference between the sales proceeds and the carrying amount of the asset and is recognised inStatement of Comprehensive Income.(l)Impairment of Non- Financial AssetsAt the end of each reporting period, the Office reviews the carrying amounts of its assets todetermine whether there is any indication that those assets have suffered an impairment loss. Ifany such indication exists, the recoverable amount of the asset is estimated in order to determinethe extent of the impairment loss (if any). Where it is not possible to estimate the recoverableamount of an individual asset, the management estimates the recoverable amount of the cashgeneratingunit to which the asset belongs.Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing valuein use, the estimated future cash flows are discounted to their present value using a pre-tax discountrate that reflects current market assessments of the time value of money and the risks specific to theasset.If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than itscarrying amount, the carrying amount of the asset (cash-generating unit) is reduced to itsrecoverable amount. An impairment loss is recognised immediately in profit or loss.Where an impairment loss subsequently reverses, the carrying amount of the asset (cashgeneratingunit) is increased to the revised estimate of its recoverable amount, but so that theincreased carrying amount does not exceed the carrying amount that would have been determinedhad no impairment loss been recognised for the asset (cash-generating unit) in prior years. Areversal of an impairment loss is recognised immediately in profit or loss.(m) Foreign Currency TransactionsThe financial statements of the Office is measured in the currency of the primary economicenvironment in which the Office operates (its functional currency). In preparing the financialstatements of the Office, transactions in currencies other than the Office’s functional currency arerecorded at the rates of exchange prevailing on the date of the transaction. At the end of eachreporting period, monetary items denominated in foreign currencies are retranslated at the ratesprevailing on the end of the reporting period. Non-monetary items carried at fair value that aredenominated in foreign currencies are retranslated at the rates prevailing on the date when the fairvalue was determined. Non-monetary items that are measured in terms of historical cost in a foreigncurrency are not retranslated.The accompanying notes form an integral part of these financial statements.Auditors’ Report – Page 62 & 63.77

INTELLECTUAL PROPERTY OFFICE OF SINGAPORESTATEMENT OF CASH FLOWSFor the financial year ended 31 March 20122 Summary of Significant Accounting Policies (continued)(m) Foreign Currency Transactions (continued)Exchange differences arising on the settlement of monetary items, and on retranslation ofmonetary items are included in profit or loss for the period. Exchange differences arising on thetranslation of non-monetary items carried at fair value are included in profit or loss for the periodexcept for differences arising on the retranslation of non-monetary items in respect of whichgains and losses are recognised in other comprehensive income. For such non-monetary items,any exchange component of that gain or loss is also recognised in other comprehensive income.(n)ProvisionsProvisions are recognised when the Office has a present obligation (legal or constructive) as aresult of a past event, it is probable that the Office will be required to settle that obligation and areliable estimate can be made of the amount of the obligation.The amount recognised as a provision is the best estimate of the consideration required to settlethe present obligation at the end of the reporting period, taking into account the risks anduncertainties surrounding the obligation. Where a provision is measured using the cash flowsestimated to settle the present obligation, its carrying amount is the present value of those cashflows.When some or all of the economic benefits required to settle a provision are expected to berecovered from a third party, the receivable is recognised as an asset if it is virtually certain thatreimbursement will be received and the amount of the receivable can be measured reliably.(o)Deferred RevenueThis represents unamortised balance of renewal fees for trademarks received in advance fromapplicants. Such deferred revenue is amortised over 10 years, being the period of renewals.(p)Derivative Financial InstrumentsThe Office’s enters into a variety of derivative financial instruments to manage its exposure toforeign exchange rate risk, including foreign exchange forward contracts. The Office does not usederivative financial instruments for speculative purposes.Derivatives are initially recognised at fair value at the date a derivative contract is entered into andare subsequently re-measured to their fair value at the end of each reporting period. The resultinggain or loss is recognised in profit or loss immediately unless the derivative is designated andeffective as a hedging instrument, in which event the timing of the recognition in profit or lossdepends on the nature of the hedge relationship.(q)Contribution to Consolidated FundThe Office is required to make contribution to the Government Consolidated Fund in accordancewith the Statutory Corporations (Contribution to Consolidated Fund) Act, Chapter 319A and FinanceCircular M37/2000. It is computed based on the accounting surplus of the Office for each of thefinancial year at the prevailing corporate tax rate for the year of assessment. Contribution toconsolidated fund is provided for on an accrual basis.The accompanying notes form an integral part of these financial statements.Auditors’ Report – Page 62 & 63.78

INTELLECTUAL PROPERTY OFFICE OF SINGAPORESTATEMENT OF CASH FLOWSFor the financial year ended 31 March 20122 Summary of Significant Accounting Policies (continued)(r)Related partiesParties are considered to be related if one party has the ability, directly or indirectly, to control theother party or exercise significant influence over the other party in making financial and operatingdecisions. Parties are also considered to be related if they are subject to common control or commonsignificant influence. Related parties may be individuals or corporate entities.(s)LeasesLeases are classified as finance leases whenever the terms of the lease transfer substantially all therisks and rewards of ownership to the lessee. All other leases are classified as operating leases.Finance leaseAssets held under finance leases are recognised as assets of the Office at their fair value at theinception of the lease or, if lower, at the present value of the minimum lease payments. Thecorresponding liability to the lessor is included in the balance sheet/statement of financial positionas a finance lease obligation. Lease payments are apportioned between finance charges andreduction of the lease obligation so as to achieve a constant rate of interest on the remainingbalance of the liability. Finance charges are charged directly to profit or loss. Contingent rentalsare recognised as expenses in the periods in which they are incurred.Operating leaseRentals payable under operating leases are charged to profit or loss on a straight-line basis overthe term of the relevant lease unless another systematic basis is more representative of the timepattern in which economic benefits from the leased asset are consumed. Contingent rentals arisingunder operating leases are recognised as an expense in the period in which they are incurred.In the event that lease incentives are received to enter into operating leases, such incentives arerecognised as a liability. The aggregate benefit of incentives is recognised as a reduction of rentalexpense on a straight-line basis, except where another systematic basis is more representative ofthe time pattern in which economic benefits from the leased asset are consumed.3. Critical Accounting Judgements and Key Sources of Estimation UncertaintyIn the application of the Office’s accounting policies, which are described in Note 2, management isrequired to make judgements, estimates and assumptions about the carrying amounts of assets andliabilities that are not readily apparent from other sources. The estimates and associated assumptionsare based on historical experience and other factors that are considered to be relevant. Actual resultsmay differ from these estimates.The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accountingestimates are recognised in the period in which the estimate is revised if the revision affects only thatperiod, or in the period of the revision and future periods if the revision affects both current and futureperiods.The accompanying notes form an integral part of these financial statements.Auditors’ Report – Page 62 & 63.79

INTELLECTUAL PROPERTY OFFICE OF SINGAPORESTATEMENT OF CASH FLOWSFor the financial year ended 31 March 20123. Critical Accounting Judgements and Key Sources of Estimation Uncertainty (continued)Critical judgements in applying the Office’s accounting policiesIn the process of applying the Office’s accounting policies, which are described in Note 2, managementdid not make any material judgements that have a significant effect on the amounts recognised in thefinancial statements.Key sources of estimation uncertaintyThe Office does not have any key sources of estimation uncertainty at the end of the reporting period,that has a significant risk of causing a material adjustment to the carrying amounts of assets andliabilities within the next financial year.4. Financial Instruments, Financial Risks and Capital Risks ManagementCategories of financial instrumentsThe following table sets out the financial instruments as at the end of the reporting period:2012 2011S$ S$Financial AssetsLoans and receivables (including cash and cash equivalents) 76,431,843 66,796,315Financial LiabilitiesAmortised cost 17,906,348 16,692,411Risk management is integral to the business of the Office. The Office has a system of control in place tocreate an acceptable balance between the cost of risks occurring and the cost of managing the risks. Themanagement continually monitors the Office’s risk management process to ensure that an appropriatebalance between risk and control is achieved.Credit riskCredit risk refers to the risk that the counterparties will default on its contractual obligations resulting in afinancial loss. The carrying amount of trade and other receivables, investments held in cash, fixeddeposits and debts and equity securities represent the Office’s maximum exposure to credit risk.The Office manages its credit risk through the setting of guidelines for its investments. The guidelines arereviewed and approved by the Investment Committee. Ongoing monitoring is undertaken bymanagement to ensure that all investment activities are in compliance with the guidelines.At the end of the reporting period, the Office has trade receivables due from two third parties whichaccounts for approximately 91% (2011: 90%) of the trade receivables balance. However, no significantcredit risk is expected to arise. The maximum exposure to credit risk in the event that thecounterparties fail to perform their obligations as at the end of financial year in relation to each class ofrecognised financial assets is the carrying amount of those assets as stated in the statement of financialposition.The accompanying notes form an integral part of these financial statements.Auditors’ Report – Page 62 & 63.80

INTELLECTUAL PROPERTY OFFICE OF SINGAPORESTATEMENT OF CASH FLOWSFor the financial year ended 31 March 20124. Financial Instruments, Financial Risks and Capital Risks Management (continued)Credit risk (continued)Cash and fixed deposits are placed with banks and financial institutions which are regulated. TheOffice entered into a cash pooling arrangement with a government body under a Centralised LiquidityManagement scheme (Note 14). The Office is of the view that the credit risk arising is minimal as thecounterparty is a government body.The deposits with Accountant-General’s Department (“AGD”) under Centralised Liquidity Managementare placed with high credit quality financial institutions and are available upon request.Liquidity riskThe Office monitors its liquidity risk and maintains a level of cash and bank balances deemedadequate by management to finance the Office’s operations and mitigate the effects of fluctuations incash flows. The Office’s funds are placed in bank deposits and a government body which have highliquidity.The Office’s financial assets and financial liabilities are due within 1 year and is non-interest bearing,except for fixed deposits as disclosed in Note 14 to the financial statements.Market riskMarket risk is the risk that changes in market prices, such as interest rates, foreign exchange rates andequity prices will affect the Office’s income or the value of its holdings of financial instruments.The Office actively manages the market risk by placing deposits with Accountant-General’sDepartment (“AGD”) under Centralised Liquidity Management.Interest rate riskThe Office is exposed to interest rate risk through the impact of rate changes mainly from investmentsin fixed deposits. Fair value interest rate risk is the risk that the fair value of a financial instrument willfluctuate due to changes in market interest rates. The interest rate for deposits with AGD are based ondeposit rates determined by the financial institutions with which the cash are deposited and areexpected to move in tandem with market interest rate movements.No sensitivity analysis is prepared as the Office does not expect any material effect on the Office’sprofit or loss arising from the effects of reasonably possible changes to interest rates on interest bearingfinancial instruments at the end of the reporting period.The accompanying notes form an integral part of these financial statements.Auditors’ Report – Page 62 & 63.81

INTELLECTUAL PROPERTY OFFICE OF SINGAPORESTATEMENT OF CASH FLOWSFor the financial year ended 31 March 20124. Financial Instruments, Financial Risks and Capital Risks Management (continued)Foreign exchange riskThe foreign exchange risk arises mainly from collections for Madrid applications through the WorldIntellectual Property Office and payments for search and examination by international searchauthorities. The Office manages the risk by purchase of foreign forward exchange contracts whereappropriate.The following table represents the Office’s major currency exposure as at the end of the reportingperiod, expressed in Singapore dollars equivalent.2012Australian dollar Euro Swiss FrancsS$ S$ S$Trade and other receivables - - 1,207,687Cash and cash equivalents - 819,258 -Trade and other payables - (1,350,301) -- (531,043) 1,207,687Australian dollar Euro Swiss FrancsS$ S$ S$2011Trade and other receivables - - 523,439Cash and cash equivalents 854,775 641,004 -Trade and other payables (82,158) (1,058,249) -772,617 (417,245) 523,439The accompanying notes form an integral part of these financial statements.Auditors’ Report – Page 62 & 63.82

INTELLECTUAL PROPERTY OFFICE OF SINGAPORESTATEMENT OF NOTES TO THE FINANCIAL STATEMENTSFor the financial year ended 31 March 20124. Financial Instruments, Financial Risks and Capital Risks Management (continued)Sensitivity analysis for foreign currency riskA 5% strengthening of Singapore dollars against the following currencies at the reporting date wouldincrease (decrease) the Office’s surplus before grants and contribution to Consolidated Fund by theamounts shown below. This analysis assumes that all other variables remain constant.2012 2011S$ S$Australian dollar - (38,631)Euro 26,552 20,862Swiss francs (60,384) (26,172)A 5% weakening of Singapore dollars against the above currencies would have had the equal but oppositeeffect on the above currencies to the amounts shown above, on the basis that all other variables inparticular interest rates, remain constant.Fair value of financial assets and financial liabilitiesThe carrying amounts of cash and cash equivalents, trade and other current receivables and payables,provisions and other liabilities approximate their respective fair values due to the relatively short-termmaturity of these financial instruments.The Office had no financial liabilities carried at fair value as at 31 March 2012 and 31 March 2011.Capital risk management policies and objectivesThe capital structure of the Office consists of share capital and accumulated surplus. The Office’s policy is tomaintain a strong capital base so as to maintain shareholder, creditors and market confidence and to sustainfuture development of the business. The Office’s approach to capital management remains unchanged from2011.5 Related party transactionsRelated parties are entities with common direct or indirect shareholders and/or directors. Parties areconsidered to be related if one party has the ability to control the other party or exercise significantinfluence over the other party in making financial and operating decisions. Government refers togovernment, government agencies and similar bodies whether local, national or international. Agovernment-related entity is an entity that is controlled, jointly controlled or significantly influenced by agovernment.The accompanying notes form an integral part of these financial statements.Auditors’ Report – Page 62 & 63.83

INTELLECTUAL PROPERTY OFFICE OF SINGAPORESTATEMENT OF NOTES TO THE FINANCIAL STATEMENTSFor the financial year ended 31 March 20125 Related party transactions (continued)Compensation of key management personnelThe remuneration of members of key management during the year was as follows:2012 2011S$ S$Short-term benefits 4,075,645 4,796,260Post-employment benefits 214,474 1,592,189Long-term benefits 400 7504,290,519 6,389,199Transactions with governmentThe transactions with government during the year were as follows:2012 2011S$ S$Operating grant received 455,685 1,279,667Operating grant received relates to grant received from Ministry of Finance for the Intellectual PropertyManagement for Public Agencies 2.0 Programme (IPM-PA 2.0).6. Registration FeesRegistration fees comprise the following:2012 2011S$ S$Registration fees:- Trademarks 9,459,739 8,528,754- Patents 18,821,667 17,012,771- Designs 710,038 705,556- Madrid 6,991,788 4,951,660- Patent agent 67,740 74,850- Hague 47,018 43,41336,097,990 31,317,004The accompanying notes form an integral part of these financial statements.Auditors’ Report – Page 62 & 63.84

INTELLECTUAL PROPERTY OFFICE OF SINGAPORESTATEMENT OF NOTES TO THE FINANCIAL STATEMENTSFor the financial year ended 31 March 20127 Employee Benefit expense2012 2011S$ S$Wages and salaries 14,269,170 14,852,529Employers’ contribution to defined contribution scheme 1,739,675 1,874,166Staff welfare 197,988 325,835Staff training 156,544 282,17516,363,377 17,334,705Wages and salaries include directors’ fee of S$107,500 (2011: S$75,670) paid by the Office during theyear.8 Operating surplus2012 2011S$ S$Operating surplus includes:Net foreign exchange loss 211,229 26,529Loss/(Gain) on disposal of asset 31,245 (254)Interest on late payment charges 1,771 -Gain on disposal of available-for-sales investments - (383,874)Interest on finance lease 5,022 24,1219 Investment and Interest income2012 2011S$ S$Interest income from banks and financial institutions 424,760 361,201Investment interest income from funds - 17,674Investment dividend income - 12,539424,760 391,414The accompanying notes form an integral part of these financial statements.Auditors’ Report – Page 62 & 63.85

INTELLECTUAL PROPERTY OFFICE OF SINGAPORESTATEMENT OF NOTES TO THE FINANCIAL STATEMENTSFor the financial year ended 31 March 201210 Deferred Capital Grants (Government)2012 2011S$ S$At 1 April 240,660 233,677Capital grants claimed during the year - 144,150240,660 377,827Grants taken to profit or loss (125,864) (137,167)At 31 March 114,796 240,660Current portion (30,709) (125,864)Non-current portion 84,087 114,79611 Deferred Capital Grants (Infocomm Development Authority of Singapore)2012 2011S$ S$At 1 April - 17,991Grants taken to profit or loss - (17,991)At 31 March - -Current portion - -Non-current portion - -12 Provision for Contribution to Consolidated FundThis represents the contribution to be made to the Government Consolidated Fund in accordance withSection 3(a) of the Statutory Corporations (Contribution to Consolidated Fund) Act, Chapter 319A andFinance Circular Minute M37/2000. The amount to be contributed is based on 17% (2011: 17%) of theaccounting surplus of the Office.13 Share capital2012 2011S$ S$Fully paid ordinary shares, with no par value:At 1 April and 31 March 1,000 1,000The shares are held by the Minister for Finance, a body corporate incorporated by the Ministerfor Finance (Incorporation) Act (Chapter 183).The holder of ordinary shares are entitled to receive dividend as declared only when the Officegenerates an accounting surplus for the year, in accordance with Ministry of Finance’s FinanceCircular Minute No. M26/2008.The accompanying notes form an integral part of these financial statements.Auditors’ Report – Page 62 & 63.86

INTELLECTUAL PROPERTY OFFICE OF SINGAPORESTATEMENT OF NOTES TO THE FINANCIAL STATEMENTSFor the financial year ended 31 March 201214 Cash and cash equivalents2012 2011S$ S$Deposits with Accountant General Department (“AGD”) 72,304,722 60,514,062Cash and bank balances 509,364 2,623,456Fixed deposits with financial institutions 819,258 1,495,779Cash and cash equivalents 73,633,344 64,633,297Deposits with AGD refers to cash that are managed by AGD under Centralised Liquidity Management asset out in the Accountant-General’s Circular No 4/2009 Centralised Liquidity Management for StatutoryBoards and Ministries.The interest rate of deposits with AGD, defined as the ratio of the interest earned to the average cashbalance is 0.61% (2011: 0.57%) per annum.The fixed deposits with financial institutions bear interest ranging from 0.10% to 4.66% (2011:0.03%4.80%) per annum and for a tenure of approximately 3 to 12 days (2011: 1 to 182 days).toSignificant cash and bank balances that are not denominated in the functional currency of the Office are asfollows:2012 2011S$ S$Euro dollar 819,258 641,004Australian dollar - 854,77515 Trade Receivables2012 2011S$ S$Trade receivables 1,535,850 1,315,475Accrued revenue 775,354 47,1872,311,204 1,362,662The average credit period on rendering of services is 30 days (2011: 30 days). No interest is charged onthe outstanding trade receivables.Information on the credit risk profile for trade receivables based on profile of type of customers andageing analysis provided to key management are as follows:The accompanying notes form an integral part of these financial statements.Auditors’ Report – Page 62 & 63.87

INTELLECTUAL PROPERTY OFFICE OF SINGAPORESTATEMENT OF NOTES TO THE FINANCIAL STATEMENTSFor the financial year ended 31 March 201215 Trade Receivables (continued)The maximum exposure to trade receivables at the reporting date (by type of customer) is:2012 2011S$ S$By customersGovernment 57,961 109,981Corporate 2,253,243 1,252,6812,311,204 1,362,662The ageing analysis of the Office’s trade receivables at the reporting date is as follows:2012 2011S$ S$Not past due 2,311,194 1,362,602Past due 0 to 30 days - -More than 60 days 10 602,311,204 1,362,662Based on historical default rates, the Office believes that no impairment allowance is necessary in respectof trade receivables not past due or past due up to 60 days. These receivables are mainly arising bycustomers that have a good record with the Office.Significant trade receivable balances that are not denominated in the functional currency of the Office areas follows:2012 2011S$ S$Swiss franc 1,207,687 523,43916 Other Receivables2012 2011S$ S$Other deposits 286,415 296,514Prepayments 35,995 174,623Interest receivables 200,880 197,211523,290 668,348The accompanying notes form an integral part of these financial statements.Auditors’ Report – Page 62 & 63.88

INTELLECTUAL PROPERTY OFFICE OF SINGAPORESTATEMENT OF NOTES TO THE FINANCIAL STATEMENTSFor the financial year ended 31 March 201217 EquipmentOfficeCost: equipment, ComputerFurniture equipment Assets underand fittings and software construction TotalS$ S$ S$ S$At 1 April 2010 3,010,114 25,194,530 - 28,204,644Additions 59,286 679,572 438,933 1,177,791Disposal/Written off (80,434) (1,231,943) - (1,312,377)At 31 March 2011 2,988,966 24,642,159 438,933 28,070,058Additions 2,092 153,583 1,879,955 2,035,630Adjustment - 31,406 - 31,406Reclassification (36,520) 36,520 - -Disposal/Written off (146,905) (1,196,688) - (1,343,593)At 31 March 2012 2,807,633 23,666,980 2,318,888 28,793,501Accumulated depreciation:At 1 April 2010 1,319,306 22,594,179 - 23,913,485Depreciation for the year 350,288 1,574,707 - 1,924,995Disposal/Written off (80,434) (1,231,916) - (1,312,350)At 31 March 2011 1,589,160 22,936,970 - 24,526,130Depreciation for the year 334,711 1,243,944 - 1,578,655Reclassification (12,616) 12,616 - -Disposal/Written off (143,232) (1,079,267) - (1,222,499)At 31 March 2012 1,768,023 23,114,263 - 24,882,286Carrying amount:At 31 March 2011 1,399,806 1,705,189 438,933 3,543,928At 31 March 2012 1,039,610 552,717 2,318,888 3,911,215The carrying amount of the Office’s equipment includes an amount of S$ nil (2011: S$241,929) heldunder finance lease.The accompanying notes form an integral part of these financial statements.Auditors’ Report – Page 62 & 63.89

INTELLECTUAL PROPERTY OFFICE OF SINGAPORESTATEMENT OF NOTES TO THE FINANCIAL STATEMENTSFor the financial year ended 31 March 201218 Trade PayablesThe average credit period on purchases is 30 days (2011: 30 days). No interest is charged on theoutstanding trade payables.Significant trade payables that are not denominated in the functional currency of the Office are asfollows:2012 2011S$ S$Euro 692,904 574,026Australian dollars - 82,15819 Other Payables2012 2011S$ S$Accrued expenses 4,468,232 3,156,161Patent Cooperation Treaty deposits (advances) 8,660 8,177Other payables - 856,764Other deposits 1,260 1,2604,478,152 4,022,362Significant other payables that are not denominated in the functional currency of the Office are asfollows:2012 2011S$ S$Euro 657,396 484,223Australian dollars - -20 DividendsIn accordance with the Capital Management Framework for Statutory Board issued by the Ministry ofFinance on 13 November 2008, the Office declared on 29 December 2011 and paid on 11 January 2012a dividend of S$1,000 (S$1 per share) based on the accounting surplus in FY2011.In the preceding financial year, the Office declared and paid a dividend of S$250,000 (S$250 per share)based on the accounting surplus in FY2010 on 17 December 2010.The accompanying notes form an integral part of these financial statements.Auditors’ Report – Page 62 & 63.90

INTELLECTUAL PROPERTY OFFICE OF SINGAPORESTATEMENT OF NOTES TO THE FINANCIAL STATEMENTSFor the financial year ended 31 March 201221 CommitmentsCapital expenditure commitmentsCapital expenditure which has been approved by the Office and contracted for but not provided for inthe financial statements is as follows:2012 2011S$ S$Development in-progress 7,016,303 8,759,766Operating lease commitmentAt the end of the reporting period, the Office has outstanding commitments under non-cancellableoperating leases which fall due as follows:2012 2011S$ S$Within one year 2,163,312 2,163,312In the second to fifth years inclusive 5,408,280 7,571,592After five years - -7,571,592 9,734,904Operating lease payments represent rental payable by the Office for office premises. Leases arenegotiated for an average of six years and rentals are fixed for the duration of the leases.22 Funds Held on Behalf of Others and Funds’ Net Assets Held on Behalf of Others2012 2011S$ S$Patent Agent Manpower Capability Development Fund 66,479 25,223Patent Agent Manpower Capability Development Fund is a funding arrangement between the Office andMinistry of Law. This project seeks to develop Singapore’s manpower capability in patent agentservices by developing an advanced patent drafting course and implementing a co-funding scheme tosupport experienced foreign patent agents for two-year stints to provide mentorship and training forpatent agent trainees in Singapore. The aim of these efforts is to eventually build up a pool of specialistpatent agents which could serve not just the Singapore market but also regional markets.The accompanying notes form an integral part of these financial statements.Auditors’ Report – Page 62 & 63.91

INTELLECTUAL PROPERTY OFFICE OF SINGAPORESTATEMENT OF NOTES TO THE FINANCIAL STATEMENTSFor the financial year ended 31 March 201222 Funds Held on Behalf of Others and Funds’ Net Assets Held on Behalf of Others (continued)The movement of the fund is as follows:2012 2011S$ S$At 1 April 25,223 30,570Funds received 296,809 437,059Interest income - -322,032 467,629Funds disbursed (255,553) (442,406)At 31 March 66,479 25,223Represented by:Cash at bank held in the name of the Office but notrecorded in the Office’s statement of financial position 34,650 25,223Cash at bank held in the name of the Office andrecorded in the Office’s statement of financial position 31,829 -66,479 25,22323 Finance LeaseMinimum lease paymentsPresent value ofminimum lease payment2012 2011 2012 2011S$ S$ S$ S$Amount payable under finance lease:Within one year 107,677 143,569 106,292 138,547In the second to fifth year inclusive - 107,677 - 106,292107,677 251,246 106,292 244,839Less: future finance charges (1,385) (6,407) N/A N/APresent value of lease obligations 106,292 244,839 106,292 244,839Less: Amount due for settlementwithin 12 months (shown undercurrent liabilities) (106,292) (138,547)Amount due for settlementafter 12 months - 106,292The accompanying notes form an integral part of these financial statements.Auditors’ Report – Page 62 & 63.92

INTELLECTUAL PROPERTY OFFICE OF SINGAPORESTATEMENT OF NOTES TO THE FINANCIAL STATEMENTSFor the financial year ended 31 March 201223 Finance Lease (continued)The Office has taken up finance lease for the IBM software system with a lease term of 4 years at zerointerest. For the year ended 31 March 2012, the effective borrowing rate was 2.5% (2.6% in 2011). TheOffice’s exposure to fair value interest rate risk is minimal due to its immateriality. All leases are onfixed repayment basis and no arrangements have been entered into for contingent rental payments.The fair value of the Office’s lease obligations approximates its carrying amount.24 Comparative FiguresCertain comparative figures have been reclassified to conform to the current year presentation. Thefinancial statements for the year ended March 31, 2011 were audited by another auditor whose report dated18 July 2011, expressed an unqualified opinion on these financial statements.25 Post Balance Sheet ItemIP Academy, a public company limited by guarantee, became Intellectual Property Office of Singapore’ssubsidiary with effect from 1 April 2012.The accompanying notes form an integral part of these financial statements.Auditors’ Report – Page 62 & 63.93

Intellectual Property Office of Singapore51 Bras Basah Road #04-01, Manulife CentreSingapore 189554