SingPost AGM: chance to ask about goodwill issues

MUCH has been said already about the fateful acquisitions that recently thrust Singapore Post's corporate governance into the public spotlight, led to a special audit that unearthed weak controls on directors' disclosure of conflicts of interest and raised questions over whether those lapses could have paved the path for the group to overpay for acquisitions.

Aside from the qualitative governance issues, though, there are some interesting numbers buried in its latest annual report released last week that could also warrant a closer look from shareholders, ahead of the postal and e-commerce group's upcoming annual general meeting on July 14.

These figures are to do with the assumptions underlying the goodwill it has forked out for several of its purchases - not only for freight forwarders Famous Holdings, FS Mackenzie and Famous Pacific Shipping (NZ) Limited, but also for more recent ones such as e-commerce firms TradeGlobal and Jagged Peak. Specifically, even though SingPost slashed its assumed average cash flow growth rates for the three Famous acquisitions and a few others for its financial year ended March 2016 (FY16) from FY15, it has not taken any impairment on goodwill despite keeping discount rates flat or even lowering that in some cases.