Headquarters
Singapore Telecommunications Limited
31 Exeter Road
Comcentre
Singapore 239732
Republic of Singapore
Tel: +65 6838 3388
Fax: +65 6732 8428
Website: www.singtel.com
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Si n g aPoRe t e l eCoM M Un iC
at i o nS l iMi t eD ANNUAL REPOR T 20 0 8/ 20 0 9
ContentS
2
4
6
9
10
16
Organisation Structure
Board of Directors
Members of the
Management Committee
18
Awards and Accolades
Operational Highlights
REACHING FURTHER AS THE
STAYING RESILIENT WITH
Financial Highlights
MARKET LEADER
GOOD GOVERNANCE
Chairman’s Statement
23
Operating and Financial Review
58
75
Corporate Governance Report
Financial Statements
STAYING COMMITTED TO BE A
183
Interested Person Transactions
RESPONSIBLE CORPORATE CITIZEN
184 Shareholder Information
50
54
Corporate Social Responsibility
186 Corporate Information
Our People
187 SingTel Contact Points
Singtel is asia’s leading communications group, providing a diverse range of innovative
communications services including fixed, mobile, data, internet, it and tv.
Stayin g R eSilie nt • S tRiving t ogetheR
Resilience is a trait that is often appreciated only in challenging times, but
reflects the underlying strength and true capability of a corporation. In a year
that many companies worldwide found difficult, SingTel achieved growth and
profitability, and laid the foundations for continuing success.
Amid the economic downturn, we are striving as a Group, innovating and
improving, so that we continue to offer a great experience for our customers
as well as the best value proposition for our investors.
Staying resilient, striving together. That’s how SingTel will emerge even
stronger than before.
oPeRATionAl hiGhliGhTS
no.1 in iPhoneS
The SingTel Group secured the rights to bring the Apple
iPhoneTM 3G to Australia, India, Indonesia, the Philippines
and Singapore. We are the only telcos in Indonesia,
Singapore and the Philippines to offer the iPhone 3G.
Smart phones like the iPhone 3G are integral to the Group’s
strategy of attracting high value data-centric customers.
#1
SingTel ranked top* in international
Internet Protocol Virtual Private
Network (IP VPN) solutions in the Asia-Pacific
ex Japan region. We will continue to build on the
strength of our IP VPN solutions to offer the best
performance and value.
*Based on IDC’s Asia/Pacific Semiannual Fixed-Line Telecom Services Tracker, First Half 2008 report
33%
Data revenue as a percentage of mobile
service revenue for Optus customers.
The Group is driving customers’ data
usage with compelling device line-ups
and useful applications.
S$240 Million
SingTel successfully acquired
Singapore Computer Systems for
about S$240 million. This enabled
NCS – SingTel’s existing wholly-
owned IT arm – to expand its scale
and strengthen its leadership in
the government sector.
2 SINGApOre TelecOMMuNIc ATIONS lIMITed ANd SuBSIdIArY cOMp ANIeS
100 Mbps
Next Generation National Broadband
Networks are being planned
in
Singapore and Australia.
In Singapore, OpenNet – in which
SingTel has a 30% stake – was awarded
the contract to build and operate the
infrastructure for the Next
passive
Generation
Broadband
National
Network (NGNBN). The nationwide
NGNBN is expected to offer users
broadband speeds of at least 100 Mbps
initially, and eventually up to 1 Gbps.
In Australia, the Government announced
it will establish a new company that
will invest up to A$43 billion over eight
years to build and operate a National
Broadband Network (NBN). The NBN
will deliver broadband access speeds
of up to 100 Mbps to 90% of Australian
homes, schools and workplaces.
SingTel and Optus will leverage the
networks to provide integrated high-
speed services, differentiated through
our unique bundling capabilities and
attractive content. With OpenNet
utilising SingTel’s existing infrastructure
its fibre rollout, SingTel will
for
generate new
In
Australia, the NBN paves the way
for regulatory reform and opens up
significant opportunities for Optus in
the fixed-line market.
income streams.
+32 Million
Bharti Airtel added a record
32 million customers in the
past year and maintained its
significant lead over all other
operators in the country.
652,000
neW Mobile cuSToMeRS
in AuSTRAliA
Optus registered strong growth momentum in mobile,
underpinned by targeted acquisition activities, innovative
offers and growth in wireless broadband.
249 Million
SingTel is present in some of
the fastest growing mobile
markets
in the world and
serves 249 million customers
85
65
249
185
124
across Asia Pacific.
Mar 05
Mar 06
Mar 07
Mar 08
Mar 09
46%
Mobile MARkeT ShARe
in SinGAPoRe
SingTel continues to lead and shape the Singapore
market. In the past year, we successfully leveraged full
Mobile Number Portability to extend our leadership in the
Singapore mobile market.
96%
AuSTRAliA
hSPA coveRAGe in
Optus is extending its 3G HSPA network to
reach 98% of Australia’s population, up from
96% currently.
With this investment, Optus will be the only
carrier capable of challenging the incumbent
telco’s network on both coverage and speed.
in n o v A Ti o n
SingTel is committed to innovation as the
Group transforms from a pure carriage
telco to a one-stop provider of integrated
multimedia and ICT solutions.
During the year, mio TV, the pay TV service in
Singapore, gained traction with breakthrough
offerings such as ‘Season Pass’ - which
offers the latest Hollywood TV series as
early as 24 hours after the US premiere –
a first in the world.
In Australia, Optus launched prepaid wireless
broadband, which lets customers surf for
as much or as little as their budget allows.
Optus also launched an industry first - ‘yes’
Timeless plans that provide unlimited calls
and SMSes.
SINGTel ANNuAl repOrT 2008 / 2009 3
FinAnciAl hiGhliGhTS
During the year, the Singapore
and Australia operations turned
in strong performances despite
the economic challenges. In local
currency terms, Singapore revenue
grew 13% and Optus revenue rose
7%. However, due to the significant
depreciation
in the Australian
dollar, Group revenue – of which
nearly two-thirds are derived from
Australia – remained stable.
oPeRATinG Revenue
(S$ MIllION)
13,377
14,844
14,934
Underlying net profit declined
6%, similarly impacted by foreign
currency movements as
the
Singapore dollar strengthened
against the Australian dollar and
regional currencies. Assuming
exchange
remained
rates
unchanged, underlying net profit
would have grown 3%.
undeRlyinG neT PRoFiT (1)
(S$ MIllION)
3,556
3,681
3,455
The Group has a diversified
earnings base as a result of
its investment in fast-growing
overseas markets. Overseas
operations contributed 72% to
proportionate eBITDA.
PRoPoRTionATe ebiTdA (2)
1% OTHeRS
28% SINGAPORe
41% ReGIONAL
MOBILe
30% AUSTRALIA
FY06/07
FY07/08
FY08/09
FY06/07
FY07/08
FY08/09
SingTel is the largest listed company in Singapore and has investments in key markets throughout
the Asia pacific region. Today, overseas operations contribute about 73% of the Group’s proportionate
revenue and 72% of proportionate eBITdA.
In Singapore, SingTel continues to lead and shape the telecommunications market while investing
in new growth engines like Managed Services, IcT, TV and advertising. Optus is a challenger in the
Australian telecommunications market, with scale advantage and the ability to deliver bundled wireless
and fixed customer solutions. SingTel’s investments in the large, underpenetrated markets of Asia
provide a significant growth impetus for the Group.
With presence in both emerging and mature markets and a track record of high cash returns, SingTel
delivers a combination of growth and returns to its shareholders.
notes:
(1) Defined as net profit before exceptional items and exchange differences on capital reductions of certain overseas subsidiaries, net of
hedging, as well as significant exceptional items of associates.
(2) Based on proportionate earnings before interest, tax, depreciation and amortisation. As the associates are not consolidated on a line-by-
line basis, proportionate information is provided as supplemental data to show the relative contribution from the different markets that
the Group operates in.
4 SINGApOre TelecOMMuNIc ATIONS lIMITed ANd SuBSIdIArY cOMp ANIeS
SinGAPoRe
AuSTRAliA
ReGionAl
13%
Revenue GRoWTh
ebiTdA (S$ million)
+8%
Fy08/09
Fy07/08
2,162
2,011
• Data & Internet revenue rose 11%, driven by higher demand for ethernet services, and
strong growth in Managed Services revenue
• Mobile revenue increased 9%, reflecting SingTel’s investments in the smartphone/
integrated devices strategy and initiatives in the prepaid market
• IT & engineering revenue surged 47% with the acquisition of SCS. excluding SCS, IT
revenue rose 11%, driven by higher sales of hardware, systems and network integration
projects
7%
Revenue GRoWTh
ebiTdA (A$ million)
+3%
Fy08/09
Fy07/08
2,067
2,002
• Mobile revenue surged 13%, underpinned by strong demand for wireless broadband and
iPhone 3G, as well as the new ‘yes’ Timeless unlimited plans
• Business and Wholesale Fixed revenue rose 5% as Optus continued to drive on-net traffic
and grow share in data and IP services
• In Consumer and Small-Medium Business Fixed, Optus remained focused on on-net
customer growth while exiting from unprofitable resale services
35%
cuSToMeR GRoWTh (1)
earnings (2) (S$ million)
Fy08/09
Fy07/08
1,958
-21%
2,487
• In India, Bharti registered impressive record customer growth despite an increase in
competition
• In Indonesia, Telkomsel earnings declined, largely due to a sharp fall in Average Revenue
Per User (ARPU) as competition intensified
• Regional mobile associates pre-tax earnings declined 21% due largely to a stronger
Singapore dollar and lower contribution from Telkomsel. If regional currencies had
remained constant, pre-tax earnings would have declined 10%
notes:
(1) Group’s combined mobile customer base.
(2) Based on the Group’s share of pre-tax profit of regional mobile associates.
SINGTel ANNuAl repOrT 2008 / 2009 5
SINGTel ANNuAl repOrT 2008 / 2009 5
chAiRMAn’S STATeMenT
As a Group, with major telecom
operations in eight countries, we will
leverage the strength of our combined
customer base of 249 million to achieve
cost and revenue synergies.
DeAR SHAReHOLDeRS,
The Group performed well and showed resilience in a difficult
year. In Singapore, we continued to lead and shape the
industry, gaining profitable market share in key segments.
In Australia, Optus delivered some of its best quarterly
results in mobile. Our international business contributed
significantly, with Bharti and Telkomsel maintaining their
significant lead over other operators in India and Indonesia
respectively.
For the year ended 31 March 2009, Group revenue increased
0.6 per cent to S$14.93 billion while eBITDA dipped 8.6
per cent to S$6.48 billion. Underlying net profit was
S$3.46 billion, down 6.1 per cent from the previous year.
A significant portion of our business is outside of Singapore,
which subjects our financial results to foreign exchange
volatility as we report in Singapore dollars.
The Board has recommended a final dividend of 6.9 cents
per share for the year, unchanged from last year. Together
with the interim dividend of 5.6 cents per share, we are
pleased to return a total of S$1.99 billion or 12.5 cents per
share to our shareholders.
leveRAGinG GRouP Sc Ale
The Group remains focused on being Asia Pacific’s leading
communications group. Our regional mobile customer
base, the largest in Asia outside of China, expanded 35 per
cent to 249 million as at 31 March 2009. This large scale
gives us operational advantages and synergies which we
captured during the year.
Securing the rights to bring the much sought-after Apple
iPhoneTM 3G to Australia, India, Indonesia, the Philippines
and Singapore can be credited to the various businesses
working as a group and demonstrates our great teamwork.
In the Philippines and Singapore, and more recently,
Indonesia, we are currently the only telcos to offer the
iPhone 3G and in Australia, Optus has the largest share of
iPhone 3G activations. Telkomsel launched the iPhone 3G in
March 2009.
Group presence was also evident in our title sponsorship
of the Formula 1™ SingTel Singapore Grand Prix. Held
in September 2008, the first ever night race in Formula
1™ history raised the Group’s
international profile.
Being associated with this historic event accelerated the
transformation of SingTel’s image into that of an innovative
company with cutting-edge technology and strong emphasis
on customer experience.
6 SINGApOre TelecOMMuNIc ATIONS lIMITed ANd SuBSIdIArY cOMp ANIeS
exPloRinG neW FRonTieRS
Our transformation process underpins the real progress
the Group has made in growing new revenue streams and
reducing our dependence on pure carriage services. This
has allowed us to further entrench our market and network
leadership, and has helped us to focus on customer-centric
services.
In Australia, the Government has also announced plans to
fund and build a ‘Fibre to the Premises’ network for high
speed broadband. This is a positive outcome for Optus as
it should enable us to provide services on a sustainable
basis and is consistent with our goals of giving households,
schools and businesses super fast broadband. This will
have a profound impact on how Australians live, work and
play, and Optus will be at the forefront of that revolution.
In the consumer space, we continued to deliver content-
rich multimedia experiences to our Singapore customers
via phone, PC, TV and mobile Internet through initiatives
such as mio. Also allowing improved access to a wider
range of multimedia content is our 3G dual-band mobile
network in Australia, which grew to reach 96 per cent of the
country’s population in 2008.
In the business segment, we have succeeded in becoming
a higher value-added service provider and a one-stop
solutions provider to our customers. Our acquisition of SCS
Computer Systems Pte. Ltd., formerly known as Singapore
Computer Systems Limited, during the year enlarged the
Group’s Information Technology (IT) footprint in the region
and strengthened our capabilities and capacity. We also
provided compelling Infocomm Technology (ICT) services
to a wide range of customers. One key achievement is that
we have become the leading international Internet Protocol
Virtual Private Network (IP VPN) service provider in Asia
Pacific excluding Japan.
even as we effect change, our operating landscape is
poised to change as a result of plans by the governments
of Singapore and Australia to introduce super fast high
speeds broadband. Because we are prepared to innovate,
these changes will provide opportunities to accelerate our
transformation.
In Singapore, OpenNet, in which SingTel owns a 30 per cent
stake, was appointed the Network Company for the Next
Generation National Broadband Network (NGNBN). SingTel
was also appointed as the key contractor for OpenNet
and will be responsible for rolling out a high-quality fibre
network to all premises.
This project enables us to participate in the financial returns
from our investment in the consortium, and to monetise our
passive infrastructure in ducts, manholes and exchanges.
With the NGNBN, SingTel will be able to leverage the new
high-speed network to extend our leading edge as a full
service provider in broadband and multimedia solutions,
while avoiding significant capital expenditure.
exciTinG ouR cuST oMeRS
In 2008, we made further strides in delivering sustainable
customer experience and value-for-money products.
We opened our SingTel Shop, the first retail store in
Singapore offering a next-generation multimedia shopping
experience. We also continued to expand our fourth
generation Optus ‘yes’ stores into regional and metro
under-served markets in Australia.
Our pay TV service, mio TV, continued to enhance
customer experience in Singapore. Besides introducing
‘live’ broadcasts of Italian Serie A football, we launched
the world’s first ‘Season Pass’, allowing viewers to watch
the latest seasons of top US television series as early as
24 hours after their US telecast.
With the economic slowdown, customers are now seeking
more value for money. To offer them more options, we
launched new cost-effective Smart Packages of ICT
services for businesses and money-saving bundles for
mobile postpaid and broadband consumers in Singapore.
In Australia, Optus became the first major operator
to offer prepaid wireless broadband plans, enjoying
exponential growth in wireless broadband with new pricing
and expanded product offerings. Optus also introduced
an industry first, ‘yes’ Timeless mobile plans providing
unlimited national calls and standard national SMS to any
network in the country.
These new products and services were the result of
the Group’s strong emphasis on innovation. Given its
importance, we are constantly championing innovation
across the business and ICT spectrum. An example of this
is our business innovation forum, i.luminate, which we held
for the first time in 2008. The event promoted innovation
and showcased over 100 ICT solutions developed by SingTel
and its partners.
SINGTel ANNuAl repOrT 2008 / 2009 7
chAiRMAn’S STATeMenT
exeRciSinG coRPoRATe SociAl ReSPonSibiliTy
The Group is committed to being a responsible corporate
citizen. In 2008, the SingTel Touching Lives Fund raised
S$2.2 million for charity. Contributions came from our
business partners, customers, employees and members of
the public, with SingTel matching outright cash donations.
In Australia, our support included the Kid’s Helpline, which
provides free online counselling to children. We raised
A$3.2 million for this cause alone.
We also seek to respond promptly with relief assistance
to natural disasters in communities where we operate.
SingTel donated S$200,000 to relief and reconstruction
efforts after the May 2008 earthquakes in China’s Sichuan
province. Following the bushfires in Victoria, Australia,
Optus provided mobile and satellite telecommunication
services, and pledged A$250,000 to the Salvation Army
Bushfire Appeal. Optus employees also raised another
A$140,000 for the victims.
lookinG AheAd
SingTel has gone through various business cycles, emerging
in a stronger position each time.
in delivering bundled wireless and fixed
capabilities
customer solutions, and a strong focus on customer
experience.
As a Group, with major telecom operations in eight countries,
we will leverage the strength of our combined customer
base of 249 million to achieve cost and revenue synergies.
By tapping on our customer relationships, we intend to
expand into related markets and services including mobile
remittances and advertising. With some of the best Asian
telecom assets, the Group is strongly positioned for growth
and will continue to differentiate ourselves as a leading
communications group in Asia Pacific.
Financially, the Group is in a strong position. Cash flow is
strong, and we have a healthy debt level with net gearing
ratio of about 24 per cent. We continue to look for new
investment opportunities in Asia and emerging adjacent
markets, and are prepared to increase our stakes in existing
associates. We will evaluate opportunities in a financially
disciplined manner.
The Group is committed to an optimal capital structure
while maintaining financial flexibility and investment grade
credit ratings.
The current economic downturn is unprecedented. And
we are responding by focusing on our execution as well as
being disciplined on the cost front. However, cutting costs
does not mean cutting corners. We will continue with staff
training programmes and talent development despite the
challenging times. This is because our people are key to
our success and we invest in them for the long term.
AcknoWledGMenTS
We have done very well despite the uncertainties in the
global market and this is due to the efforts of our employees,
stakeholders and partners. I would like to thank them, our
shareholders, my fellow directors, the management and
the union for their support.
Recognising that cost is a concern for our customers also,
we will continue to develop affordable packages of value-
added services to help them reduce overheads.
In particular, I would like to thank Professor Tommy Koh for
his invaluable services as a Board member from 2003
to 2008.
In Singapore, we are on track to be a leading multimedia
solutions company. We will continue to capitalise on our
strong market position in traditional carriage services
and invest in new growth engines particularly in Managed
Services, ICT, TV and advertising.
In Australia, we are committed to protecting Optus’ strong
position in mobile. We will continue to differentiate not
only through our scale in mobile, but also through our
Chumpol nalamlieng
Chairman
8 SINGApOre TelecOMMuNIc ATIONS lIMITed ANd SuBSIdIArY cOMp ANIeS
oRGAniSATion STRuc TuRe
GROUP
CHIeF eXeCUTIVe OFFICeR
Chief executive Officer
(International)
Chief executive Officer
(Optus)
Chief executive Officer
(Singapore)
Group Chief Financial
Officer
• Business Management
• Regional Operations
• Regional Technical
• Strategic Investments
• SingTel Group Innovations
• Optus Business
• Optus Consumer
• Optus Small and Medium
Business
• Optus Wholesale and Satellite
• Networks*
• Products and Delivery
• Virgin Mobile Australia
• Support Units*
• Business
• Consumer
• NCS
• Networks*
• SingTel Global Offices
• Carrier Services Integrated
Business Unit
• Content & Media Services
• Support Units*
• Finance
• Corporate Affairs
- Investor Relations
- Tax Planning and
Compliance
- Treasury
* These functions dual report to the respective Group Functional Heads
Audit
Committee
Vice President
(Audit)
Director
(Corporate Communications)
General Counsel/
Company Secretary
Group Chief Information
Officer
Group Chief
Strategy Officer
Group Chief
Technology Officer
Group Director
(Human Resource)
SINGTel ANNuAl repOrT 2008 / 2009 9
SINGTel ANNuAl repOrT 2008 / 2009 9
boARd oF diRecToRS
CHUMPOL NALAMLIeNG GRAHAM JOHN BRADLeY CHUA SOCK KOONG FANG AI LIAN HeNG SWee KeAT DOMINIC CHIU FAI HO
10 SINGApOre TelecOMMuNIc ATIONS lIMITed ANd SuBSIdIArY cOMp ANIeS
10 SINGApOre TelecOMMuNIc ATIONS lIMITed ANd SuBSIdIArY cOMp ANIeS
SIMON ISRAeL JOHN POWeLL MORSCHeL KAIKHUSHRU SHIAVAX NARGOLWALA ONG PeNG TSIN DeePAK S PAReKH NICKY TAN NG KUANG
SINGTel ANNuAl repOrT 2008 / 2009 11
SINGTel ANNuAl repOrT 2008 / 2009 11
boARd oF diRecToRS
chuMPol nAlAMlienG
Chairman
Mr NaLamlieng, 62, is a non-executive and independent
Director of SingTel. He was appointed a Director on 13 June
2002 and Chairman on 29 August 2003. Mr NaLamlieng was
last re-elected as a Director on 25 July 2008.
Mr NaLamlieng is a Member of the Board of Directors of
The Siam Cement Public Co., Ltd. (“Siam Cement”). He was
President of Siam Cement for 13 years before stepping down
in December 2005. His career with Siam Cement spans more
than 30 years.
Mr NaLamlieng is also a non-executive Director of British
Airways Plc. and the Siam Commercial Bank Public
Co., Ltd.
Mr NaLamlieng was conferred the Royal Decoration, Knight
Grand Commander (Second Class, Higher Grade) of the
Most Illustrious Order of Chula Chom Klao, Thailand in May
2002 and the Officier de l’Ordre National du Mérite, France
in July 2004. He holds a Bachelor of Science (Mechanical
engineering) from the University of Washington, US and a
Master of Business Administration from Harvard Business
School, US.
GRAhAM John bRAdley
Mr Bradley, 60, is a non-executive and independent Director
of SingTel. He was appointed a Director on 24 March 2004
and was last re-elected on 25 July 2008.
Mr Bradley is a professional company director and is also
involved in various philanthropic pursuits. He practised law
for six years in Australia and US before joining McKinsey &
Company in 1978. He was a Senior Partner of McKinsey &
Company from 1984 to 1991, National Managing Partner
of Blake Dawson from 1991 to 1995, and CeO of Perpetual
Limited from 1995 to 2003.
Mr Bradley is Chairman of HSBC Bank Australia Limited,
Stockland Corporation Limited, Boart Longyear Limited
and Po Valley energy Limited. He is also a Director of
Brandenburg ensemble Limited. He is the former Chairman
of Film Finance Corporation Australia Limited, Garvan
Research Foundation and Sydney Community Foundation and
a former Director of MBF Australia Limited and Queensland
Investment Corporation.
Mr Bradley holds a Bachelor of Arts and a Bachelor of Laws
from The University of Sydney and a Master of Laws from
Harvard Law School, US.
chuA Sock koonG
Ms Chua, 51, is an executive and non-independent Director of
SingTel. She was appointed a Director on 12 October 2006 and
Group Chief executive Officer (CeO) on 1 April 2007. She was
last re-elected on 27 July 2007.
Ms Chua joined SingTel in June 1989 as Treasurer. In April
1999, she was appointed Chief Financial Officer (CFO), a
position she held till February 2006 when she assumed the
positions of Group CFO and CeO (International). She was
appointed Deputy Group CeO on 12 October 2006.
Ms Chua sits on the boards of Bharti Airtel Limited, Bharti
Telecom Limited and key subsidiaries of the SingTel Group.
She is also a member of the Singapore Management
University Board of Trustees, the Casino Regulatory Authority
and the Public Service Commission. She is a former Board
Member of JTC Corporation.
Ms Chua holds a Bachelor of Accountancy (First Class
Honours) from the University of Singapore. She is a Certified
Public Accountant with the Institute of Certified Public
Accountants of Singapore and a CFA charterholder.
12 SINGApOre TelecOMMuNIc ATIONS lIMITed ANd SuBSIdIArY cOMp ANIeS
FAnG Ai liAn
Fang Ai Lian, 59, is a non-executive and independent Director
of SingTel. She was appointed a Director on 7 August 2008.
Mrs Fang has been the Chairman of Great eastern Holdings
Ltd since April 2008, as well as Chairman of its insurance
subsidiaries in both Singapore and Malaysia. Prior to that,
she was with ernst & Young for over 30 years, where she
was appointed Managing Partner in 1996 and Chairman
in 2005.
International enterprise Singapore.
Mrs Fang is a director of Banyan Tree Holdings Limited,
MediaCorp Pte Ltd, Metro Holdings Limited and Oversea-
Chinese Banking Corporation Limited. She is a Board
Member of
She
is also the Chairman of the Charity Council and the
Tax Academy of Singapore and President of the Home
Nursing Foundation and the Breast Cancer Foundation.
She was previously a Board Member of the Public
Utilities Board.
Mrs Fang qualified as a Chartered Accountant in London in
1973 and is a Fellow of the Institute of Chartered Accountants
in england and Wales.
henG SWee keAT
Mr Heng, 48, is a non-executive and independent Director of
SingTel. He was appointed a Director on 4 July 2003 and was
last re-elected on 27 July 2007.
Mr Heng is the Managing Director of the Monetary Authority
of Singapore. He is also Chairman of The Institute of Banking
and Finance.
Mr Heng has served in various government departments. He
joined the Singapore Administrative Service in 1997 and was
appointed Principal Private Secretary to the Senior Minister
from 1997 to 2000. He was appointed Deputy Secretary at the
Ministry of Trade and Industry in 2000 and CeO of the Trade
Development Board in 2001. He was Permanent Secretary
at the Ministry of Trade and Industry from 23 October 2001
to April 2005.
Mr Heng was conferred the Public Administration Medal
(Gold) at the Singapore National Day Awards 2001. He holds
a Bachelor of Arts from the University of Cambridge, UK and
a Master of Public Administration from Harvard University,
US.
doMinic chiu FAi ho
Mr Ho, 58, is a non-executive and independent Director of
SingTel. He was appointed a Director on 28 November 2007
and was last re-elected on 25 July 2008.
Mr Ho is the founder and a partner of HOPU Investment
Management Co., Ltd. and a Director of Hang Lung
Properties Limited.
Mr Ho joined KPMG US in Houston in 1975 and became a
partner in 1985. He was transferred to Beijing, China to set
up KPMG’s practice in 1984 and resided in China until 1989
when he was assigned to Hong Kong. Mr Ho became the China
firm’s Senior Partner based in Beijing in 2000 and was elected
Chairman of KPMG in China and Hong Kong SAR in April 2003.
He retired in April 2007.
Mr Ho holds a Bachelor of Business Administration and
a Master of Science in Accountancy from the University
of Houston. He is a member of the American Institute of
Accountants and a member of the Hong Kong Institute of
Certified Public Accounts.
SINGTel ANNuAl repOrT 2008 / 2009 13
SINGTel ANNuAl repOrT 2008 / 2009 13
boARd oF diRecToRS
SiMon iSRAel
Mr Israel, 56, is a non-executive and non-independent
Director of SingTel. He was appointed a Director on 4 July
2003 and was last re-elected on 27 July 2007.
Mr Morschel was Chairman of Rinker Group Limited, CSR
Limited and Leighton Holdings Limited. He is also a former
Director of Westpac Banking Corporation, Rio Tinto plc and
Rio Tinto Limited.
Mr Israel is Chairman of the Singapore Tourism Board and
Asia Pacific Breweries Limited, and an executive Director of
Temasek Holdings (Private) Limited. He is also a Director of
Neptune Orient Lines Limited and Fraser and Neave Limited.
Mr Morschel holds a Diploma in Quantity Surveying from
The University of New South Wales. He is a Fellow of the
Australian Institute of Company Directors and a Fellow of
the Australian Institute of Management.
Mr Israel was Chairman, Asia Pacific of Danone Asia, and
a member of the executive Committee of Group Danone
before stepping down in June 2006. He held various
positions in Sara Lee Corporation in the Asia Pacific region,
including Country Manager/Zone Manager for Indonesia,
the Philippines, the South Pacific and Thailand from 1974
to 1991, before becoming President (Household & Personal
Care), Asia Pacific from 1992 to 1996.
Mr Israel is a former Director of Britannia Industries Ltd,
Danone Asia Pte Ltd, Danone Food & Beverages India Pvt
Ltd, Frucor Beverages Group Limited, Griffins Foods Pte Ltd,
Hangzhou Wahaha Food Co. Ltd., PT Tirta Investama, Wuhan
Dongda Brewery Co. Ltd, Wuhan euro Dongxihu Brewery Co.
Ltd, Wuhan Xingyingge Brewery Co. Ltd, Yakult Honsha Co.,
Ltd and Yeo Hiap Seng Ltd.
Mr Israel holds a Diploma in Business Studies from The
University of the South Pacific.
John PoWell MoRSchel
Mr Morschel, 66, is a non-executive and independent
Director of SingTel. He was appointed a Director on
14 September 2001 and was last re-elected on 27 July
2007.
Mr Morschel is a non-executive Director of Australia and
New Zealand Banking Group Limited and Tenix Group Pty.
Ltd. Prior to his present appointment, he was an executive
Director and then Managing Director and Chief executive of
Lend Lease Corporation Limited.
kAikhuShRu ShiA vAx nARGolWAlA
Mr Nargolwala, 59, is a non-executive and the Lead
Independent Director of SingTel. He was appointed a
Director on 29 September 2006 and was last re-elected on
27 July 2007.
Mr Nargolwala joined Credit Suisse in January 2008 and is
the Chief executive Officer of Credit Suisse Asia Pacific and
a member of the executive Board.
Mr Nargolwala was a Group executive Director of Standard
Chartered PLC before he stepped down on 5 September 2007.
Prior to that, he was the Group executive Vice President and
Head of Asia Wholesale Banking Group for Bank of America,
headquartered in Hong Kong. Mr Nargolwala was a non-
executive Director of Tate & Lyle PLC from December 2004
to December 2007. He was also a non-executive Director
of the Asia Pacific Region Board of Visa International until
October 2007.
Mr Nargolwala holds a Bachelor degree in economics (First
Class Honours) from the University of Delhi, India. He is a
Fellow of the Institute of Chartered Accountants in england
and Wales.
onG PenG TSin
Mr Ong, 46, is a non-executive and independent Director of
SingTel. He was appointed a Director on 1 June 2009.
Mr Ong is Chairman of InfoComm Investments Pte Ltd and is
a strategic consultant to IBM. Mr Ong was the founder and
Chairman of encentuate, a company providing enterprise
digital identity systems. IBM acquired encentuate in 2008.
14 SINGApOre TelecOMMuNIc ATIONS lIMITed ANd SuBSIdIArY cOMp ANIeS
Prior to starting encentuate, Mr Ong was the founder
and Chairman of Interwoven Inc., a leading provider of
content infrastructure. Before Interwoven, Mr Ong was co-
founder and chief architect of electric Classifieds, Inc., the
creators of Match.com and held various engineering and
management roles at Illustra (now IBM Informix), Sybase
Inc., and Gensym Corporation. He is a former Director of
InfoComm Development Authority of Singapore.
Mr Ong holds a Bachelor of Science in electrical engineering
from the University of Texas (US) and a Master of Science in
Computer Science from the University of Illinois (US).
Mr Parekh has received several awards, including the
Padma Bhushan from the Government of India in 2006, the
Businessman of the Year 1996 from Business India and the
JRD Tata Corporate Leadership Award from the All India
Management Association. He was also the first recipient of
the Qimpro Platinum Award for Quality for his contributions
to the services sector and the youngest recipient of the
prestigious Corporate Award for Lifetime Achievement from
the economic Times. On 24 January 2008, Mr Parekh was
awarded the Lifetime Achievement Award by FinanceAsia
for his contribution towards the banking/financial sector
in Asia.
deePAk S PARekh
is a non-executive and
Mr Parekh, 64,
independent
Director of SingTel. He was appointed a Director on 31 May
2004 and was last re-elected on 27 July 2007.
Mr Parekh is Chairman of Housing Development Finance
Corporation Limited (“HDFC”) in India. He joined HDFC
in 1978 and was its Managing Director from 1985 until he
assumed his present office in 1993.
Mr Parekh is the non-executive Chairman of GlaxoSmith-
Kline Pharmaceuticals Ltd, HDFC Asset Management
Company Ltd, HDFC ergo General Insurance Company Ltd,
HDFC Standard Life Insurance Company Ltd, Siemens Ltd.
and Infrastructure Development Finance Company Ltd.
He sits on the Boards of Castrol India Ltd, Hindustan Unilever
Limited, Hindustan Oil exploration Co Ltd, The Indian Hotels
Company Limited, Mahindra & Mahindra Limited, Satyam
Computer Services Limited, WNS Global Services Private
Limited and Airport Authority of India.
Mr Parekh is a former Director of ICI India Ltd, National
Housing Bank and National Thermal Power Corporation Ltd.
He has been a member of various committees set up by the
Government of India to examine policy issues, including the
Investment Commission Committee.
Mr Parekh holds a Bachelor of Commerce from Sydenham
College of Commerce & economics, Mumbai. He is a
Chartered Accountant and a member of The Institute of
Chartered Accountants in england and Wales.
nicky TAn nG kuAnG
Mr Tan, 50, is a non-executive and independent Director of
SingTel. He was appointed a Director on 12 March 2002 and
was last re-elected on 25 July 2008.
Mr Tan currently manages nTan Corporate Advisory Pte
Ltd, a boutique firm specialising in corporate finance and
corporate restructuring. He is also a Director of Fraser &
Neave Limited and a member of its Audit Committee.
Mr Tan was a Partner and Head of Global Corporate
Finance at Arthur Andersen, Singapore and ASeAN region,
from 1999 to 2001. Prior to that, he was a Partner and
Head of Financial Advisory Services at Price Waterhouse,
Singapore and Chairman of Financial Advisory Services at
PricewaterhouseCoopers, Asia Pacific region.
Mr Tan is a Chartered Accountant and a member of The
Institute of Chartered Accountants in england and Wales. He
is also a Certified Public Accountant and a member of the
Institute of Certified Public Accountants of Singapore.
Note:
Professor Tommy Koh retired from the SingTel Board following the
conclusion of the Annual General Meeting held on 25 July 2008.
SINGTel ANNuAl repOrT 2008 / 2009 15
SINGTel ANNuAl repOrT 2008 / 2009 15
MeMbeRS oF The MAnAGeMenT coMMiTTee
CHUA SOCK KOONG ALLeN LeW LIM CHUAN POH JeANN LOW NG YOKe WeNG
chuA Sock koonG
Group Chief executive Officer, SingTel
Ms Chua, 51, oversees the Group’s three key businesses
– Australia, Singapore and International and a range of
portfolios from company secretariat and legal, corporate
development to corporate communications. Prior to this,
she was the Deputy Group CeO from October 2006 to March
2007. Ms Chua joined SingTel in June 1989 as Treasurer.
In April 1999, she was promoted to Chief Financial Officer
(CFO), responsible for the Group’s financial functions,
including treasury, tax, insurance, risk management and
capital management. In February 2006, she was appointed
Group CFO and CeO International, responsible for the key
drivers of SingTel’s international business – Strategic
Investments and NCS Pte. Ltd., the IT business arm.
Besides overseeing the Group Information Systems and
SingTel’s regional associates, she was responsible for driving
strategic acquisitions and international business. Ms Chua
is an executive Director of SingTel and a Board member of
Bharti Airtel Limited. She is also a member of the Singapore
Management University Board of Trustees and the Casino
Regulatory Authority. In January 2009, she was appointed a
member of the Public Service Commission in Singapore.
Allen leW
Chief executive Officer (Singapore), SingTel
Mr Lew, 53, was appointed CeO (Singapore) in February
2006 to drive the performance and operations of SingTel’s
business in Singapore. He began his career with the
SingTel Group in November 1980 and has served in various
senior management positions since then, including Chief
Operating Officer of Advanced Info Service Public Company
Limited – SingTel’s associate in Thailand; Chief Operating
Officer of Singapore Telecom International Pte Ltd, and
Managing Director of Optus Consumer. Mr Lew is a Board
member of the Sentosa Development Corporation. He holds
a Bachelor of electrical engineering from The University of
Western Australia, and a Master of Science (Management)
from the Massachusetts Institute of Technology, US.
liM chuAn Poh
Chief executive Officer (International), SingTel
Mr Lim, 54, joined SingTel in October 1998. He was appointed
executive Vice President (eVP) Strategic Investments in
February 2006. In October 2006, he assumed the position of
CeO (International). He is responsible for SingTel’s regional
associates and supports the growth objectives of SingTel’s
business groups through strategic investments in the region.
Mr Lim has held various senior appointments in SingTel,
including eVP Consumer Business and eVP Corporate
Business. He was CeO of SingTel Mobile between April 2004
and February 2006. He is also Chairman of Bridge Alliance,
a group of leading communications companies in Asia. Mr
Lim has extensive experience in the public sector and was
Deputy Secretary at the Ministry of Communications prior to
joining SingTel. He holds a Bachelor of engineering Science
(Honours) from Balliol College, University of Oxford, UK, and
a Master in Public Health engineering from the Imperial
College of Science and Technology, University of London.
16 SINGApOre TelecOMMuNIc ATIONS lIMITed ANd SuBSIdIArY cOMp ANIeS
16 SINGApOre TelecOMMuNIc ATIONS lIMITed ANd SuBSIdIArY cOMp ANIeS
quality service delivery and operational efficiency. Since
1 April 2007, he has been covering the Group Chief
Technology Officer role, responsible for driving long-term
technology strategy, synergies and benchmarking. Mr Ng
holds a Bachelor of electrical engineering (First Class
Honours) from the University of Canterbury, New Zealand.
PAul o’SullivAn
Chief executive Officer, SingTel Optus
Mr O’Sullivan, 48, was appointed Chief executive
in
September 2004. He is responsible for all aspects of the
performance and operations of Optus in Australia. Prior to
this, he served as Chief Operating Officer for three years,
following the acquisition of Optus by SingTel in 2001. Mr
O’Sullivan joined Optus as Retail Marketplace Manager in its
Business Division in 1996 and became Managing Director of
its Mobile Division in 1998. Before Optus, he spent 11 years in
various management roles with the Royal Dutch Shell Group.
Mr O’Sullivan holds a Bachelor of Arts (Moderatorship) in
economics (First Class) from Trinity College, The University
of Dublin. He is a graduate of the Harvard Business School’s
Advanced Management Programme.
Aileen TAn
Group Director Human Resource, SingTel
Aileen Tan, 42, joined SingTel in June 2008 as Group Director
Human Resource (HR). She leads the people excellence
practices and employee engagement programmes across
the SingTel Group, including NCS Pte. Ltd. and Optus.
Ms Tan is responsible for spearheading HR strategies to
achieve SingTel’s aspiration as an employer of Choice. Ms
Tan has a wealth of HR experience garnered over 20 years
working in various multinational and local businesses.
She has held leadership positions in diverse industries,
ranging from consumer goods to financial services, and
from manufacturing to travel.
Her work experience
goes beyond the full spectrum of HR management, and
includes product marketing, marketing communication and
customer service. Ms Tan was previously Group General
Manager Human Resource at WBL Corporation Ltd.
Ms Tan graduated with a Bachelor of Arts degree, majoring in
Statistics and Japanese Studies from the National University
of Singapore. She also holds a Master of Science degree
in Organisational Behaviour from the California School of
Professional Psychology, Alliant University, US.
SINGTel ANNuAl repOrT 2008 / 2009 17
SINGTel ANNuAl repOrT 2008 / 2009 17
PAUL O’SULLIVAN AILeeN TAN
JeAnn loW
Group Chief Financial Officer, SingTel
Jeann Low, 48, was appointed Group CFO on 1 September
2008. She oversees the group’s financial affairs including
corporate finance, procurement, taxation, treasury, risk
management and capital management and
investor
relations. Before this appointment, Ms Low was CFO of
Optus since 2006. She joined SingTel in 1998 as the Group
Financial Controller, responsible for the financial functions
of the SingTel Group. In 2004, she was promoted to eVP
of Strategic Investments where she managed the Group’s
international investments and pursued opportunities for
strategic investments globally. Prior to joining SingTel she
worked for several years in both the London and Singapore
practices of an international accounting firm and thereafter
in a public listed electronics company in Singapore. Ms Low
is a Certified Public Accountant in Singapore. She graduated
from the National University of Singapore with an Honours
Degree in Accountancy.
nG yoke WenG
Group Chief Information Officer, SingTel
Mr Ng, 53, joined SingTel in May 1997 as Chief Information
Officer. He was re-designated Group Chief Information
Officer in 2003 following the integration of the IT operations
for SingTel’s Singapore and Australian (Optus) businesses.
Mr Ng oversees the planning, development and operations
of the IT infrastructure and information systems to ensure
AWARdS And A ccolAdeS
SinGTel
2008 AWARdS
APRil
AuGuST
Frost & Sullivan Technology Awards 2008
• Technology Leadership Award for Maritime Broadband
Communications
ocTobeR
Readers’ digest Trusted brand Awards 2008
• Platinum (Telecom Company) 5th year
• Gold (Mobile Service Provider) 2nd year
corporate Reputation Survey 2008
• Best Reputation (Mobile phone sector)
hitwise online Performance Annual Awards
• Most Popular site (Shopping & Classifieds Industry -
SiAS investors’ choice Awards 2008
• Board Diversity Award
Appliances & electronics)
- singtelshop.com
computerworld Singapore Readers choice Awards 2008
• Wide Area Network (WAN) Accelerator – 1st
customer Satisfaction index of Singapore
• SingTel and SingNet ranked first in customer satisfaction
(Traffic Optimisation & Profiling Service Application
Accelerator)
(Telecommunications Category)
MAy
Seatrade Asia Awards 2008
• Technical Innovation
• Managed Connectivity Service Provider – 1st
(SingTel Managed Connectivity Services)
Singapore international 100 Ranking 2008
• Highest Overseas Revenue (4th)
• Top Company by Market in Oceania
June
noveMbeR
FinanceAsia - Asia’s best companies 2008
• Best Regional Company (Telecoms)
Singapore
• Best Managed Company (3rd position)
• Best Corporate Governance
• Best Investor Relations
• Most Committed to a Strong Dividend Policy
July
2008 carrier ethernet Service Provider of the year (Asia
Pacific) Award
• Best in Business (SingTel Metroethernet, ConnectPlus
e-Line and e-VPN services)
2008 carrier ethernet Service Provider of the year (Asia
Pacific) Award
• Service Innovation - Runner up (SingTel Metroethernet,
ConnectPlus e-Line and e-VPN services)
computerworld Singapore customer care Service
Awards 2008
Telecommunications Services
contact centre Association of Singapore (ccAS) Awards
2008
• Best Contact Centre of the Year – Silver (SingTel Mobile
Singapore human Resources Awards 2008
• Strategic HR
• Learning & Human Capital Development
• employee Relations & People Management
• Quality Work-Life (special mention)
• Health & employee Wellness (special mention)
Premium Hotline)
• Best Outsourced Call Centre of the Year - Bronze
(SingTel Contact Centre)
euromoney Awards: Asia’s best companies 2008
• Best Corporate Governance by Country (telecom sector)
– second
18 SINGApOre TelecOMMuNIc ATIONS lIMITed ANd SuBSIdIArY cOMp ANIeS
deceMbeR
7-eleven leading brand Awards 2008
• Telecommunications Category – First
heAlTh Promotion Awards 2008
• Singapore HeALTH Gold Award
2009 AWARdS
JAnuARy
idc’s Asia/Pacific Semiannual Fixed-line Telecom
Services Tracker, First half 2008 Report
• Leading International IP VPN service provider in Asia
Pacific excluding Japan
FebRuARy
Singapore 1000 Award 2009
• Sales Turnover excellence (Information &
Communications) – SingTel
• Net Profit excellence (Information & Communications) –
SingTel Mobile
Asiamoney - Ranked first for best disclosure and
Transparency in Singapore
MARch
oPTuS
2008 AWARdS
MAy
highly commended certificate in the large business
category of vision Australia’s
• Making a Difference Awards
2008 Property council of Australia Awards
• Award for Innovation and excellence – Optus Centre
Sydney (Best Business / Industrial Park)
AuGuST
2008 AcoMM Awards
• Commitment to Customer Service (large business) –
Uecomm
SePTeMbeR
2008 Australian direct Marketing Association (AdMA)
Awards – Microsite
• Bronze Award – ‘Grrrr for what you want’
2008 Australian direct Marketing Association (AdMA)
Awards – Telecommunications
• Silver Award – Optus Broadband Unplugged
Australian Telecommunication user Group
• Carrier of the Year – Optus
nSW Master builders Association
• Award for Communications Buildings – Optus Technical
APRil
• Governance and Transparency index (GTi)
SingTel ranked first
• Singapore corporate Awards
best investor Relations (Gold)
• World Teleport Association’s (WTA) Teleport Awards for
excellence 2009
corporate Teleport operator of the year
Facility, Canberra
noveMbeR
Mobile Market Award (MMA) 2008
• Joint Winner for Best Consumer Content offering –
So You Think You Can Dance Mobile content site
deceMbeR
2008 nSW (new South Wales) volunteers of the year
• Karen Carmichael (Optus IT) – Corporate Volunteer
of the Year
2009 AWARdS
MARch
2009 ATuG (Australian Telecommunications user Group)
excellence Awards
• Carrier of the Year
SINGTel ANNuAl repOrT 2008 / 2009 19
SINGTel ANNuAl repOrT 2008 / 2009 19
SeRvinG
249,389,000
AuSTRAliA
7.79m
Mobile
cuSToMeRS
+9.1%
cuSToMeRS
GRoWTh (yoy)
bAnGlAdeSh
1.87m
Mobile
cuSToMeRS
+20%
cuSToMeRS
indiA
93.92m
Mobile
cuSToMeRS
+52%
cuSToMeRS
indoneSiA
72.13m
Mobile
cuSToMeRS
+41%
cuSToMeRS
PAkiSTAn
17.38m
Mobile
cuSToMeRS
+21%
cuSToMeRS
GRoWTh (yoy)
GRoWTh (yoy)
GRoWTh (yoy)
GRoWTh (yoy)
20 SINGApOre TelecOMMuNIc ATIONS lIMITed ANd SuBSIdIArY cOMp ANIeS
249,389,000
Mobile cuSToMeRS in ASiA-PAciFic
PhiliPPineS
25.74m
Mobile
cuSToMeRS
+21%
cuSToMeRS
SinGAPoRe
2.98m
Mobile
cuSToMeRS
+16%
cuSToMeRS
ThAilAnd
27.58m
Mobile
cuSToMeRS
+10%
cuSToMeRS
GRoWTh (yoy)
GRoWTh (yoy)
GRoWTh (yoy)
ReaChing
FuRtheR
aS the
maRKet
leaDeR
We believe in being first.
As Asia Pacific’s leading
communications group,
we grow from strength
to strength by working
together. And by continually
creating ‘firsts’ in customer
experience, we continue to
attract customers with our
innovative products, reliable
service and great value.
SINGTel ANNuAl repOrT 2008 / 2009 21
BOAT QUAY, SINGAPORe
22 SINGApOre TelecOMMuNIc ATIONS lIMITed ANd SuBSIdIArY cOMp ANIeS
oPeRATinG And FinAnciAl RevieW
BuSineSS in SingapoRe
SingTel continued to lead and shape the market, registering
revenue gains in both the consumer and business segments,
and strengthening its market leadership.
leAdinG And ShAPinG The MARkeT
We widened our lead in key market segments including
mobile and international Internet Protocol Virtual Private
Network (IP VPN). Our mobile subscriber base increased
to 2.98 million customers, representing a market share of
46.4 per cent, up 3 percentage points from a year ago.
Our strong emphasis on delighting our customers by giving
an exceptional experience translated into several ‘firsts’
during the year. We became the first and only telco to
introduce the much-awaited Apple iPhoneTM 3G in Singapore
and the HTC DreamTM, also commonly known as the Google
phone, the world’s first AndroidTM-powered phone.
We also made history in September 2008 as the title sponsor
of the Formula 1™ SingTel Singapore Grand Prix, the
maiden night street race on the Formula 1™ calendar. The
sponsorship was a great platform on which to position the
SingTel brand at an international level. As brand building is
a long-term investment, we believe that it is important not
to lose sight of our objectives. A world-class event like this
helps to imbue the brand with optimism and energy. It also
raises our brand profile as Formula 1™ is watched by about
170 million people in more than 100 countries. At the same
time, SingTel’s strong global brand helps to strengthen the
organiser’s objective of promoting Singapore to the world.
In January 2009, we launched our SingTel shop, the first retail
store in Singapore, to create a next-generation multimedia
shopping experience. The new store brings SingTel’s
multimedia products and services to life in an informative,
entertaining way. For example, using the interactive touch-
screens embedded in the shop facade, shoppers can browse
and buy music 24 hours a day.
On the retail front, SingTel was the first operator to bring the highly
sought-after iPhone 3G to customers in Singapore
MovinG beyond cARRiAGe SeRviceS
We made further progress in our transformation from a
provider of traditional carriage services to a multimedia and
Infocomm Technology (ICT) provider. Today, we are making
significant inroads in IPTV, Managed Services and ICT, and
we recently launched our advertising service and a lifestyle
Web portal.
Singapore’s upcoming Next Generation National Broadband
Network (NGNBN) will allow us to compete in a new
paradigm. Under the NGNBN, 95 per cent fibre-to-the-
homes network coverage will be attained by June 2012. We
will take advantage of the changes by making the following
our priorities:
• investing in content and applications;
• architecting new processes, channels and capabilities;
and
• differentiating customer experience.
SINGTel ANNuAl repOrT 2008 / 2009 23
SINGTel ANNuAl repOrT 2008 / 2009 23
To further accelerate ICT
innovations, SingTel, together
with its partners, organised
its largest business innovation
forum, the inaugural
i.luminate in September
SingTel customers were the
first in Asia to be able to buy the
first Android™ powered mobile
phone - the HTC Dream™
Clinching the title sponsorship for the world’s first Formula 1TM
night race ties in with SingTel’s push for constant innovation
Meanwhile, the acquisition of SCS Computer Systems Pte.
Ltd. (SCS), formally known as Singapore Computer Systems
Limited by NCS Pte. Ltd. enhances our capacity and
capabilities in Singapore as well as enlarges our Information
Technology (IT) footprint in the region.
SingTel’s pay TV service, mio TV, continued to gain traction.
We added a record 19,000 customers in the fourth quarter.
This brings its customer base to 78,000, reflecting the
success of the mio Home bundled plan and broad content
offering. SingTel will continue to invest in new content
to attract customers. We aim to grow share and cultivate
content as a key differentiator in our service.
GivinG conSuMeRS choice
mio TV continued to revolutionise the way people watch
television. New services included free on-demand access to
‘live’ broadcasts of Italian Serie A soccer matches. Scoring
a world first was our ‘Season Pass’ for mio TV. This service
lets customers watch the latest seasons of over 50 top US
television series, on-demand as early as 24 hours after their
US telecast.
The convergence of broadcast media and telecommunications
technologies presents many opportunities. SingTel has
been quick to capitalise on these, for instance through the
implementation of mobile broadband. Another example is
mio TV on Mobile, which introduced an additional, convenient
medium for customers to view quality content anywhere,
anytime. Next, we are preparing to launch a higher speed
21 Mbps connection that enables customers to download
music files and large attachments up to three times faster
than previously.
With customers seeking greater value in the current
economic downturn, we have come up with innovative
ways to help. Our mio Home plan provides customers
one-stop convenience and substantial cost savings for all
their communication needs. This innovative, all-in-one
package comprises fixed line telephone, broadband and
mio TV at a fixed monthly charge. Besides lower costs and
the convenience of a single bill, customers enjoy a host of
benefits such as free anti-virus software and multi-line
discounts for various mobile services.
Our new SuperSIM plans, Singapore’s first postpaid mobile
plans without contract, also offer unprecedented value for
money. Customers on these plans enjoy greater flexibility
to buy or upgrade to new mobile handsets anytime. With
double talktime of up to 4,000 minutes and 4,000 SMSes, the
SuperSIM plans are ideal for cost-conscious consumers.
Catering to customers’ hectic lifestyles is SMS Plus, a new
service that includes automated out-of-office SMS replies,
copying of SMSes to email or other mobile numbers, and
diversion of SMSes. This suite of functions gives customers an
array of options for managing and storing their messages.
24 SINGApOre TelecOMMuNIc ATIONS lIMITed ANd SuBSIdIArY cOMp ANIeS
Next-generation multimedia
shopping at the SingTel shop
SingTel, as part of the OpenNet consortium,
has won the bid to be the NetCo
SCS enhances NCS capacity and capability in
Singapore and enlarges its footprint in the region
MeeTinG buSineSS needS
is the
leading
international
With our award-winning ConnectPlus IP VPN solution,
IP VPN service
SingTel
provider in Asia Pacific excluding Japan. In April 2008, we
launched the Global Delivery Platform, the first managed
IP VPN platform in the world with full end-to-end network
performance monitoring. Companies can utilise voice, video
and data communications seamlessly and cost-effectively
between different locations, including hard-to-reach Asian
destinations. This is possible through our partnerships with
more than 15 other IP VPN service providers worldwide.
We continued to develop Software-as-a-Service to help
companies, especially small and medium enterprises,
boost productivity and cut costs. We also launched a web-
based human resource management solution bundled with
broadband for small and medium businesses, and piloted an
electronic healthcare information system that makes patient
data available remotely. In the area of FutureSchools@
Singapore, we created game-based learning models and
Web 2.0 collaborative learning platforms to stimulate
creativity and equip students with 21st century learning
skills. These reliable, user-friendly solutions are fully
managed by SingTel.
To cater to the growing number of algorithmic and high-
velocity traders for whom speed is crucial, we partnered
the Singapore exchange Limited to provide sub-millisecond
trading access, a first for an Asian stock exchange.
important role
SingTel plays an
in helping maritime
customers to be competitive and creating better lives
for seafarers. Our new OFFICe-AT-SeA suite of satellite
solutions enables seamless communications between
vessels and their headquarters. In November 2008, we won
a multi-million dollar contract to implement our Global
Maritime Very Small Aperture Terminal service for one of
europe’s leading maritime companies. This will provide
secure unlimited broadband connectivity and enhanced
voice communications more cost-effectively than traditional
pay-as-you-use services, and allow vessels to move between
oceanic regions without re-configuring their communications
equipment. Our maritime innovations garnered the Seatrade
Asia Award for Technical Innovation, Network World Asia IT All
Stars Award and the Frost & Sullivan Technology Leadership
Award for Maritime Broadband Communications.
To catalyse innovation for ICT, we organised our inaugural
business innovation forum, i.luminate. The large-scale event
featured 50 thought-leaders in innovation and showcased
over 100 intelligent ICT solutions. We also launched the
SingTel i.Challenge08 competition to encourage independent
software vendors to develop solutions addressing real-life
industry needs. The competition attracted about 40 vendors
from the region to develop solutions for businesses.
SINGTel ANNuAl repOrT 2008 / 2009 25
FLINDeR’S STReeT STATION, MeLBOURNe, AUSTRALIA
AYeRS ROCK, NORTHeRN TeRRITORY, AUSTRALIA
26 SINGApOre TelecOMMuNIc ATIONS lIMITed ANd SuBSIdIArY cOMp ANIeS
oPeRATinG And FinAnciAl RevieW
BuSineSS in auStRalia
Optus continued to deliver competition and choice in mobile
with the extension of its 3G dual-band network to 96 per cent
of the population, at the same time campaigning for a level
playing field for competition in the fixed line market with the
advent of the Australian National Broadband Network.
dRivinG ToWARdS leAdeRShiP in Mobile
In this financial year, we continued the roll-out of our 3G
dual-band mobile network which now reaches 96 per cent
of the Australian population, up from 60 per cent a year ago.
We also invested in mobile backhaul, enhancing coverage
in existing areas while increasing theoretical speeds to
7.2 Mbps across some of our metropolitan 3G dual-band
network.
We capitalised on our 3G investment with the launch of a
number of exciting new products and services, including
the launch of the Apple iPhone™ 3G in July 2008. Attractive
data allowances and exclusive prepaid and postpaid options
made Optus the number one choice for Australian customers
looking to make the most of their iPhone 3G experience.
First Australian iPhone Customer
In February 2009, we became the first operator in Australia
to offer an AndroidTM-powered mobile phone with the
launch of the HTC DreamTM. This was closely followed by the
launch of Thuraya, Australia’s first GSM/Satellite dual mode
handset with coverage throughout Australia and even
200 kilometres out to sea.
We provided customers with unprecedented flexibility and
value with our new ‘yes’ Timeless plans. These plans allow
Optus customers to make unlimited standard national calls
and standard SMS/MMS to any GSM mobile within Australia
for a fixed monthly price.
In addition, Optus subsidiary Virgin Mobile launched its
new ‘All You Can eat’ campaign, which allows Virgin Mobile
customers to call or text each other for free whenever they
like, as often as they like.
We gained more than 652,000 mobile customers in this
financial year, a strong 9.1 per cent increase from the
previous year.
MoRe AuSTRAliAnS connecT WiTh WiReleSS
bRoAdbAnd
Optus has experienced exponential growth in wireless
broadband and now boasts 486,000 wireless broadband
subscribers as of 31 March 2009. In the prepaid market, we
were the first major operator in Australia to launch prepaid
wireless broadband giving customers control to use the
internet for as much or as little as their budget allows.
SINGTel ANNuAl repOrT 2008 / 2009 27
SINGTel ANNuAl repOrT 2008 / 2009 27
Australian Open
Optus’ new brand campaign, ‘Whalesong’
Chua Sock Koong, Paul O’Sullivan and Jeann Low
at opening of Optus ‘yes’ shop
We also became the first wholesale provider to sell wireless
broadband to our wholesale customer base, allowing
customers to market high speed wireless broadband using
their own branding, plans and value-added features.
Fixed line – A chAnGinG lAndSc APe
In 2007, we stopped resale of marginal fixed line consumer
products, instead opting to expand our own unbundled local
loop network to provide telephony and broadband services
to Optus customers.
By migrating customers on to our own network, we have
been able to introduce exciting new offers and as a result
have increased our on-network telephony and broadband
customer base by 13 and 20 per cent respectively in the past
financial year.
In anticipation of the Federal Government’s National
Broadband Network (NBN) tender, we galvanised the
Australian telecoms industry to lobby for an open access,
wholesale NBN, leading to the formation of the TeRRiA
consortium in May 2008, which comprised eight telco
companies in Australia. In November 2008 Optus, backed
by TeRRiA, lodged a bid for the NBN based on a set of
principles that would deliver the benefits of real competition
to customers.
In April 2009, the Australian Government announced its
decision to establish a new company to build and operate
a ‘Fibre to the Premises’ broadband network. The network,
which is expected to take eight years to build at a cost of
A$43 billion, will be operated as a wholesale only, strictly
equivalent open access broadband network with Australian
Competition and Consumer Commission (ACCC) oversight.
In addition, the Government has announced a major review
of the current regulatory environment. While submissions
are currently being sought on proposed changes to the
regulatory regime, the Government aims to implement any
changes by the beginning of 2010.
We welcome the Government’s announcement on both
the NBN and regulatory review and believe they have
the potential to fundamentally change the competitive
landscape and create proper and sustainable competition in
the Australian fixed line market.
enRichinG cuST oMeR exPeRience
Optus’ vision is to lead the Australian telecommunications
industry in outstanding customer experience. This is backed
by a detailed strategy and transformation plan underpinned
by customer research.
With this in mind, we made improvements to a number of
customer touch-points including the continued roll-out of
our newly designed Optus ‘yes’ stores. The expansion of
28 SINGApOre TelecOMMuNIc ATIONS lIMITed ANd SuBSIdIArY cOMp ANIeS
Optus executives celebrate the extension of Optus’ 3G network to 96% of the
Australian population
Paul O’Sullivan and John Watkins, then
Deputy Premier of New South Wales, have
a wiggly time with Australian children’s act,
The Wiggles during UNICeF press conference
these stores into regional and metro under-served markets
is aligned with the expansion of our 3G network. When
complete in March 2010, there will be more than 200 Optus
branded stores, up from 123 at the end of March 2009. This
is in addition to our extensive network of more than 450
Optus dealer outlets.
We recently launched a new brand campaign, entitled
‘Whalesong’, the premise of which is “with communication,
anything is possible.” This bold and positive campaign
illustrates the power of communication and the importance
of our role as a telecommunications provider in connecting
people.
To better manage customer relationships, we have upgraded
our customer care and billing platforms, providing increased
functionality for customers who prefer to manage their
accounts online. More than 5 million mobile customers
have been migrated to the new platform, with more than
1.58 million customers choosing to recharge their prepaid
mobile online since April 2008.
In a move to enable greater convergence across devices, we
also launched our new myZOO mobile and Internet portal,
allowing customers to customise the content they access
and synchronise this across multiple devices.
We continued to expand the range of content available to
customers through the ZOO Mobile Internet Portal with the
addition of Facebook, YouTube and Fox Sports during 2008.
In late 2008, Optus signed a multi-million dollar sponsorship
with Football Federation of Australia, covering football from
grassroots to elite levels, including Australia’s national team,
the Socceroos. As football continues to grow in popularity in
Australia, our mobile customers will be in the box seat to
access exciting new content on their Optus mobile phones.
beTTeR F oR buSineSSeS
We secured or renewed several major business customers
over the course of the year, including Luxottica, IAG, Flight
Centre and the Department of Immigration and Citizenship.
Following the successful launch of the Optus evolve Internet
Protocol (IP) Network in October 2007, we added two new
services to our IP portfolio, namely Optus evolve Voice and
Optus evolve Internet. At the same time, we announced the
completion of the first Australian implementation of a multi-
point Cisco TelePresence solution, simulating a unique face-
face meeting experience across three different locations in
Sydney and Melbourne. The solution was built on the Optus
evolve IP Network.
We continued to offer small and medium businesses true
value and choice. An example of this was the Total Business
Cap, a range of cap plans that give small business customers
the flexibility of sharing a set monthly value across various
services, including mobile voice and wireless broadband to
better manage their telecom spend.
SINGTel ANNuAl repOrT 2008 / 2009 29
PALACe OF THe WINDS, JAIPUR, INDIA
30 SINGApOre TelecOMMuNIc ATIONS lIMITed ANd SuBSIdIArY cOMp ANIeS
oPeRATinG And FinAnciAl RevieW
BuSineSS in the Region
Under dynamic market conditions, SingTel’s regional mobile
associates made progress in their respective markets, lifting
the Group’s combined mobile customer base to 249 million,
up 35 per cent from a year ago.
All of our regional mobile associates experienced year-on-
year double-digit growth in subscribers. As at 31 March 2009,
Bharti Airtel, India’s number one mobile phone operator,
attracted a record 31.9 million cellular customers, a 52 per
cent increase over the previous year to 93.9 million.
Our Indonesian associate Telkomsel, the number one mobile
operator in the country, added 20.8 million new customers,
increasing its base by 41 per cent to 72.1 million or 49 per
cent of the country’s mobile users.
Globe, the Philippines’ second largest mobile player, grew
the number of its customers by 4.5 million or 21 per cent,
to 25.7 million.
Thailand’s biggest mobile operator, Advanced Info Service
(AIS), attracted 2.5 million new customers, an increase of
10 per cent to 27.6 million.
Pacific Bangladesh Telecom (PBTL), the only CDMA mobile
operator in Bangladesh, added 317,000 customers, or 20 per
cent, to reach 1.9 million.
In Pakistan, Warid, a key challenger, had 3 million more
customers, an increase of 21 per cent to 17.4 million.
Airtel sponsors the Airtel Delhi Half Marathon, which attracted
more than 30,000 participants
“hello” To neW MARkeTS
The year saw Bharti venture into the Sri Lankan market, with
its subsidiary Bharti Airtel Lanka Pvt. Ltd. launching mobile
services under the Airtel brand, bringing affordability and
simplicity in mobile services into Sri Lanka. Bharti plans to
invest about US$200 million in its Sri Lankan operations. In
just over a year, the company has commissioned a sizeable
state-of-the-art 3.5G network.
In Indonesia, Telkomsel added 6,014 new base transceiver
stations, increasing network capacity by 29 per cent.
Telkomsel has now achieved more than 95 per cent coverage
in Java, Bali, West Nusa Tenggara, east Nusa Tenggara and
Sumatra, and 70 per cent coverage in the eastern Indonesia
Region, including Kalimantan. The company also launched
SINGTel ANNuAl repOrT 2008 / 2009 31
SINGTel ANNuAl repOrT 2008 / 2009 31
Warid is awarded “Best Brand of the Year 2008” in the category
of the Best Cellular Company
Telkomsel offering services in the native province of Papua
Telkomsel Merah Putih, a programme to provide service
coverage in previously isolated regions using IP-based pico-
cell technology. This is part of a national effort to connect
remote villages using cellular communications systems.
Warid also launched its BlackBerry® service as well as
postpaid mobile broadband during the year. Warid celebrated
its third anniversary in May 2008 with a re-launch of its brand
and logo.
FASTeR, beTTeR, MoRe convenienT
coMMunicATionS
PBTL’s Citycell introduced the country’s first inter-standard
Global Roaming Service, allowing customers to roam on
the CDMA and GSM networks of over 450 operators in 200
countries. Citycell’s prepaid customers benefited from
new services such as e top-up, which allows convenient
recharging accounts at any of 20,832 points of sales. Citycell
also extended the countrywide high-speed mobile Internet
facility, Zoom, to its prepaid customers, enabling more
people to be connected to the rest of the world.
Telkomsel capitalised on the popularity of the BlackBerry®
in Indonesia, offering BlackBerry® Pre-paid service, the first
such service in Southeast Asia. Telkomsel also developed
a new feature for customers to activate their BlackBerry®
Internet Service via SMS, which was a world first, bringing in
35,000 Telkomsel BlackBerry® customers and establishing
Telkomsel as the leader in the Southeast Asian market.
Globe led the pack in the Philippines in terms of innovative
offerings, being the first telco to bring the Apple iPhoneTM
3G to the country. For overseas foreign workers (OFW), the
company introduced the OFW Family pack, the first product
of its kind in the market. With the increasing integration
of mobile and Internet usage, especially among youths,
Globe launched Connected 24ever, a marketing campaign
targeting this segment.
A major development during the year was Globe’s launch of
the largest commercial WiMAX (802.16e) network on 2.5 GHz
band in Southeast Asia.
In Thailand, AIS became the first provider of 3G services
with HSPA technology on 900 MHz. The service, which
includes high-speed Internet via mobile phone, video call
and data service, debuted in Chiang Mai and was later
extended to Bangkok.
32 SINGApOre TelecOMMuNIc ATIONS lIMITed ANd SuBSIdIArY cOMp ANIeS
AIS launches 3G services with HSPA
technology on 900 MHz in Chiangmai
Globe launches Wimax service, the first in the
Philippines to do so in selected service areas
Citycell celebrates Bangla New Year 2008
enTeRTAinMenT And MoRe
Bharti rolled out Airtel digital TV, its Direct To Home TV
service in 120 cities across India. Customers can now
experience over 175 channels
interactive
applications, movies on demand, and World space radio.
Airtel digital TV uses the latest MPeG4 standard with
DVB S2 technology, which is able to deliver more complex
interactive content and is High Definition ready.
including
This was followed by Airtel digital TV interactive, an
Internet Protocol Television Service through which Airtel
delivers its Triple Play Advantage of telephony, broadband
and entertainment. Airtel’s state-of-the-art, best-in-class
MPeG4-10 compression technology allows for more content,
better quality images and services like ‘live’ broadcast
television, network based time-shifted TV, real video-on-
demand and other interactive services.
ouR WinninG WA yS
Several associates were lauded for their service standards
and corporate governance.
Bharti won the prestigious Wireless Service Provider of
the Year award at the 2008 Frost & Sullivan Asia Pacific
ICT Awards. The award is presented to companies that
demonstrate best practices in their industry, commending
the diligence, commitment, and
innovative business
strategies required to advance in the global marketplace.
For the second time, Warid won the Brand of the Year Award
in the category of Best Cellular Company in Pakistan.
AIS was named Best Asian Mobile Operator of the Year and
Best Mobile Operator of the Year, Thailand, by Asian Mobile
News Magazine. Meanwhile, BrandAge magazine ranked
AIS’ GSM advance postpaid service and One-2-Call! prepaid
service the most trusted mobile systems of 2008.
Similarly, Globe was recognised for excellent network
service accessibility and signal quality. A benchmarking
study by the National Telecommunications Commission of
the Philippines showed that it had the lowest number of
blocked and dropped calls.
As in previous years, Globe earned accolades for its exemplary
corporate governance. The Institute of Corporate Directors,
Finance Asia, The Asset and the Management Association of
the Philippines all named Globe among the Philippines’ best
companies for corporate governance. Finance Asia’s 2008
poll rated Globe the second best managed company in the
country.
SINGTel ANNuAl repOrT 2008 / 2009 33
oPeRATinG And FinAnciAl RevieW
GRouP Five-yeAR FinAnciAl SuMMARy
income Statement (S$ million)
Group operating revenue
SingTel
Optus
Optus (A$ million)
Group operational eBITDA
SingTel
Optus
Optus (A$ million)
Share of associates’ pre-tax earnings
Net profit after tax
Underlying net profit (1)
cash Flow (S$ million)
Group free cash flow (2)
SingTel
Optus
Optus (A$ million)
Capital expenditure (cash)
balance Sheet (S$ million)
Total assets
Shareholders’ funds
Net debt
key Ratios
Proportionate eBITDA from outside Singapore (%)
SingTel operational eBITDA margin (%)
Optus operational eBITDA margin (%) (in A$)
Return on invested capital (%)
Return on equity (%)
Return on total assets (%)
Net debt to eBITDA (number of times)
eBITDA to net interest expense (number of times)
Per Share information (cents)
earnings per share - basic
earnings per share - underlying net profit (1)
Net assets per share
Dividend per share - ordinary
Dividend per share - special
‘SingTel’ refers to the SingTel Group excluding Optus.
Financial year ended 31 march
2009
2008
2007
2006
2005
14,934
5,547
9,387
8,321
4,431
2,110
2,321
2,067
2,051
3,448
3,455
3,245
2,195
1,050
967
1,918
14,844
4,904
9,940
7,760
4,530
1,967
2,564
2,002
2,559
3,960
3,681
3,575
2,423
1,152
903
1,879
13,377
4,430
8,947
7,475
4,282
1,902
2,380
1,988
2,073
3,779
3,556
2,795
1,904
891
742
1,790
13,353
4,355
8,998
7,192
4,467
1,915
2,552
2,038
1,649
4,163
3,295
2,772
1,761
1,011
815
1,714
12,817
4,246
8,571
6,920
4,662
1,992
2,669
2,155
1,260
3,268
3,060
3,062
1,526
1,536
1,234
1,428
33,255
20,476
6,544
34,714
21,000
7,303
32,659
20,847
5,895
33,618
21,091
5,006
35,345
19,271
6,631
72
38.0
24.8
17.2
16.6
10.2
1.0
19.9
21.67
21.71
128.67
12.5
-
75
40.1
25.8
18.9
18.9
11.8
1.0
20.7
24.90
23.15
132.03
12.5
-
70
42.9
26.6
18.3
18.0
11.4
0.9
21.3
23.25
21.88
131.20
11.0
9.5
68
44.0
28.3
17.2
20.6
12.1
0.8
17.0
24.98
19.77
126.27
10.0
-
66
46.9
31.1
16.2
16.8
9.1
1.1
15.1
19.01
17.80
115.86
8.0
5.0
notes:
(1) Underlying net profit is defined as net profit before exceptional items and exchange differences on capital reductions of certain overseas
subsidiaries, net of hedging, as well as significant exceptional items of associates.
(2) Free cash flow refers to cash flow from operating activities, including dividends from associates, less cash capital expenditure.
34 SINGApOre TelecOMMuNIc ATIONS lIMITed ANd SuBSIdIArY cOMp ANIeS
MAnAGeMenT diScuSSion And AnAlySiS
GRouP
Operating revenue
Operational eBITDA
Operational eBITDA margin
Share of associates’ pre-tax profit
eBITDA
exceptional items
Net profit
Basic earnings per share (S cents)
Underlying net profit (2)
Underlying earnings per share (S cents)
Financial year ended
31 march
2009
(S$ million)
2008
(S$ million)
Change (%)
14,934
4,431
29.7%
2,051
6,482
(139)
3,448
21.7
3,455
21.7
14,844
4,530
30.5%
2,559
7,089
103
3,960
24.9
3,681
23.2
0.6
-2.2
-19.8
-8.6
nm
-12.9
-13.0
-6.1
-6.2
notes:
(1)
In this section, ‘Optus’ refers to SingTel Optus Pty Limited and its subsidiaries, ‘SingTel’ refers to the SingTel Group excluding Optus and
‘nm’ denotes not meaningful. ‘Associate’ refers to either an associated company or a joint venture company as defined under Singapore
Financial Reporting Standards.
(2) Underlying net profit refers to net profit before exceptional items and exchange differences on capital reductions of certain overseas
subsidiaries, net of hedging, as well as significant exceptional items of the associates.
For the financial year under review, the Group delivered resilient operational results amid the economic challenges. Both
Singapore and Australia achieved strong growth in revenues and increased eBITDA. The robust business performance,
however, had been negatively impacted by the weakness in the Australian Dollar and regional currencies. If the Australian
Dollar and regional currencies had remained stable from last year, the Group’s operating revenue would have posted strong
growth of 9 per cent and the underlying net profit would have been up 3 per cent.
In Australia, where nearly two-thirds of the Group’s operating revenue was derived, operating revenue in Australian Dollar
rose 7.2 per cent but was down 5.6 per cent when translated to Singapore Dollar due to the steep 12 per cent depreciation
of the Australian Dollar from a year ago. This decline was mitigated by a strong 13 per cent increase in operating revenue in
Singapore, resulting in stable Group revenue of S$14.93 billion.
Operational eBITDA for the Group was down 2.2 per cent and margin fell 0.8 percentage point to 29.7 per cent. The declines
reflected higher mobile selling costs including Apple iPhoneTM 3G subsidies, which had driven strong customer growth,
as well as higher content costs for mio TV in Singapore and increased contributions from the Information Technology and
engineering (“iT&e”) businesses.
The Group’s share of pre-tax profit of associates was S$2.05 billion, down 20 per cent as the steep depreciation of the regional
currencies eroded earnings in Singapore Dollar. excluding the currency translation impact, the associates’ pre-tax profit
contribution would be down 9 per cent attributable mainly to weaker performance from Telkomsel and the Group’s share
of full year losses from Warid which focused on network coverage roll-out. Overall pre-tax contribution was also impacted
by the associates’ fair value losses on mark-to-market valuations of their foreign currency liabilities, particularly those of
Bharti, Telkomsel and Warid.
SINGTel ANNuAl repOrT 2008 / 2009 35
SINGTel ANNuAl repOrT 2008 / 2009 35
oPeRATinG And FinAnciAl RevieW
Consequently, eBITDA was down 8.6 per cent, but would have been flat if the Australian Dollar and regional currencies were
stable from a year ago.
The Group recorded goodwill impairment charges of S$330 million for its associates, Warid and Pacific Bangladesh Telecom
Limited (“PbTl”), that were partially offset by an exceptional gain of S$225 million from Bharti’s dilution of its equity interest
in a subsidiary. These one-off items do not impact the Group’s cash flow.
This year, the Group recognised total tax savings of S$64 million arising from the one percentage point reduction in the
corporate tax rate to 17 per cent, and the introduction of certain tax measures in the Singapore Budget 2009. Of this S$64
million, S$49 million had been classified as exceptional tax credit for the write-back of deferred tax liability provided at the
higher tax rate in prior years.
Net profit declined 13 per cent to S$3.45 billion, or 21.7 cents per share, for the year ended 31 March 2009. excluding
exceptional and other one-off items, the Group’s underlying net profit declined 6.1 per cent to S$3.46 billion.
On a proportionate basis where the associates are consolidated line-by-line, the operations outside Singapore accounted for
73 per cent and 72 per cent of the Group’s proportionate revenue and eBITDA respectively.
SinGAPoRe buSineSS
Operating revenue
Data and Internet
Mobile communications
Information technology and engineering
International telephone
National telephone
Sale of equipment
Others
excluding SCS
Operational eBITDA (without Group’s corporate costs)
excluding SCS
Financial year ended
31 march
2009
(S$ million)
2008
(S$ million)
Change (%)
1,535
1,445
1,072
624
404
268
200
5,547
5,290
2,162
2,130
1,385
1,322
731
616
425
272
154
4,904
4,904
2,011
2,011
10.9
9.3
46.6
1.4
-4.9
-1.5
29.7
13.1
7.9
7.5
5.9
Operational eBITDA margin
excluding SCS
39.0%
40.3%
41.0%
41.0%
note:
(1)
Numbers in above table may not exactly add due to rounding.
36 SINGApOre TelecOMMuNIc ATIONS lIMITed ANd SuBSIdIArY cOMp ANIeS
The Singapore economy grew 1.1 per cent in 2008, compared to the strong growth of 7.7 per cent in 2007. Despite the slowing
economy and competitive market conditions, the Singapore Business ended the financial year with strong revenue and eBITDA
growth and outperformed its competitors. This demonstrated operational resilience and strong execution of strategies that
led to market share wins in both key and growth markets.
Including first-time revenue contribution from SCS Computer Systems Pte. Ltd. (“ScS”, formally known as Singapore
Computer Systems Limited) from September 2008, an Infocomm Technology (“icT”) service provider in which the Group
acquired a 100 per cent interest, operating revenue posted double-digit growth of 13 per cent to S$5.55 billion. Operational
eBITDA grew 7.5 per cent to S$2.16 billion. excluding SCS, operating revenue was still up a solid 7.9 per cent to S$5.29 billion,
with operational eBITDA up 5.9 per cent to S$2.13 billion.
As the IT&e business (which have lower margins compared to Telco business) contributed 19 per cent of total revenue, up
from 15 per cent a year ago, operational eBITDA margin declined 2.0 percentage points to 39.0 per cent. excluding SCS,
margin declined by 0.7 percentage point to 40.3 per cent. The decrease was mainly due to higher mobile selling costs leading
up to full Mobile Number Portability in June 2008 and the successful iPhone 3G launch in August 2008, as well as higher mio
TV content cost.
data and internet, the largest revenue stream, rose 11 per cent to S$1.54 billion. Revenue from Local Leased Circuits was
up 7.0 per cent, driven by higher demand for ethernet services. Managed Services expanded a strong 27 per cent as SingTel
successfully pursued growth in new revenue streams to reduce dependency on its traditional carriage business. SingTel
is now the leading international Internet Protocol Virtual Private Network (“iP vPn”) service provider in Asia Pacific with
extensive reach in key europe and US business cities. Fixed Broadband revenue rose 8.9 per cent, led by a net increase of
23,000 in the number of broadband lines to 498,000 as at 31 March 2009.
The second largest revenue stream, mobile communications, increased 9.3 per cent to S$1.45 billion despite keen competition
in a mature market with a penetration rate of 133 per cent. SingTel demonstrated its leadership in Singapore as the only
operator to bring in the much anticipated iPhone 3G. With strong take-up of the iPhone 3G combined with continued success
in targeted acquisition initiatives, a total of 405,000 mobile customers were acquired during the year. Total mobile customer
base grew 16 per cent to 2.98 million as at 31 March 2009 - the largest in Singapore.
Postpaid mobile customer base increased 9.3 per cent or 128,000, bringing total postpaid customer base past the 1.5-million
mark as at 31 March 2009. Approximately 1.21 million of these customers were 3G customers which represented a sharp
increase of 41 per cent from a year ago. Postpaid average revenue per user (“ARPu”) was down 3.6 per cent, diluted by higher
take-up of multiple product plans with larger bundled discounts and ‘data only’ price plans. Mobile data services registered
robust growth, constituting 32 per cent of ARPU. SingTel’s push for higher data usage is gaining success with a total of 175,000
customers on the monthly mobile broadband data subscription plans as at 31 March 2009. Despite stiff competition, churn for
postpaid was healthy at 0.8 per cent.
Prepaid mobile customer base was up 23 per cent or 277,000, helping SingTel entrench its leadership position in the market
with total customer base of 1.47 million. Prepaid ARPU was up 4.2 per cent attributable to higher usage stimulated mainly by
free international call price plans, partially offset by higher bundled value.
As at 31 March 2009, SingTel further extended its lead in the mobile market with an overall market share of 46.4 per cent, up
3.0 percentage points from a year ago, with market share gains in both postpaid and prepaid.
The acquisition of SCS had enabled NCS Pte. Ltd. (“ncS”) to expand its operational scale and strengthen its leadership in the
government sector. Combined IT&e revenue surged 47 per cent to a record high of S$1.07 billion, crossing the billion-dollar
mark for the first time. excluding SCS, IT&e revenue was still up a strong 11 per cent, driven by higher sales of hardware,
systems and network integration projects. The enlarged NCS group is clearly the top IT service provider in Singapore.
SINGTel ANNuAl repOrT 2008 / 2009 37
SINGTel ANNuAl repOrT 2008 / 2009 37
oPeRATinG And FinAnciAl RevieW
Revenue from international telephone was up 1.4 per cent to S$624 million. This was the result of a strong 37 per cent
increase in volume of international telephone outgoing minutes (excluding traffic to Malaysia) partially offset by lower average
international call collection rates. The increase in traffic volume was mainly to destinations such as Bangladesh, China and
India in the prepaid mobile segment.
Revenue from fixed line phone services declined 4.9 per cent to S$404 million as voice usage fell, while sale of equipment
was down 1.5 per cent to S$268 million on lower equipment volumes.
mio Tv, SingTel’s pay TV service which started in July 2007, added 34,000 customers in the year, bringing its total customer
base to 78,000 as at 31 March 2009. The increase reflected the success of its bundled plans and broad content offering.
SingTel will continue to invest in quality content and innovative value propositions to drive acquisition. As at 31 March 2009,
mio Plan, which bundles mobile, fixed broadband and voice services as a package, had 98,000 customers, 31,000 more than
a year ago.
AuSTRAliA buSineSS
Operating revenue by division
Mobile
Fixed
Business and wholesale
Consumer and Small-Medium Business (SMB)
Inter-divisional
Operational eBITDA
Operational eBITDA margin
Net proft
Financial year ended
31 march
2009
(a$ million)
2008
(a$ million)
Change (%)
4,938
1,974
1,421
(12)
8,321
2,067
4,355
1,872
1,553
(20)
7,760
2,002
24.8%
25.8%
583
552
13.4
5.5
-8.5
-38.9
7.2
3.2
5.6
For the financial year ended 31 March 2009, Optus, SingTel’s largest subsidiary and Australia’s number two telecommunications
operator, performed well and delivered strong results amid the competitive market environment.
Optus posted net profit growth of 5.6 per cent to A$583 million, on solid revenue growth of 7.2 per cent to A$8.32 billion.
This strong revenue performance was achieved despite Optus’ managed exit from the unprofitable consumer fixed resale
market.
Operational eBITDA was 3.2 per cent higher at A$2.07 billion, with margin down 1.0 percentage point at 24.8 per cent. The
launch of iPhone 3G contributed to strong customer additions and re-contracts but as customer acquisition costs were
expensed upfront, margin had been diluted by the higher handset subsidies. excluding the incremental impact of the iPhone
3G initiative and associated revenue, underlying margin would have been 27.0 per cent.
38 SINGApOre TelecOMMuNIc ATIONS lIMITed ANd SuBSIdIArY cOMp ANIeS
optus Mobile contributed 59 per cent to Optus’ operating revenue and 67 per cent to Optus’ operational eBITDA. Mobile
revenue surged 13 per cent over the year to A$4.94 billion, further strengthening Optus’ number two position in the Australian
market. The increase in revenue was driven primarily by outgoing service revenue, which was up 11 per cent year-on-year
as a result of customer and data growth. Incoming service revenue was up 3.5 per cent with the average interconnect mobile
termination rates stable at 9 cents per minute since June 2007. Revenue from equipment sales was up 35 per cent due
mainly to higher sales volume in both prepaid and postpaid segments.
Optus added a total of 652,000 mobile customers this year, compared to 400,000 last year, underpinned by strong demand
for wireless broadband and iPhone 3G, as well as the new “Timeless” unlimited plans. Optus captured the majority share
of the iPhone 3G activations in Australia since its launch in July 2008. As at 31 March 2009, the total mobile customer base
was 7.79 million, up 9.1 per cent, with 2.58 million customers being provisioned with 3G services, up 84 per cent from a year
ago. Reflecting its success in penetrating the wireless broadband market, a total of 486,000 customers were provisioned with
High Speed Packet Access (“hSPA”) broadband service at end of the financial year.
Blended ARPU grew 2.0 per cent as a result of the acquisition of higher value customers. With increased penetration of
wireless data products, SMS and other data revenue made up 33 per cent of service revenue, up from 28 per cent a year
ago.
Operational eBITDA margin declined 5 percentage points to 28 per cent, with strong service revenue growth offset by higher
acquisition cost including iPhone 3G subsidies driving customer growth, and a higher mix of equipment sales which have
lower margin.
business and Wholesale Fixed accounted for 24 per cent of Optus’ operating revenue and 23 per cent of Optus’ operational
eBITDA. Revenue was A$1.97 billion for the year, up 5.5 per cent from last year. Revenue from Optus Business and Optus
Wholesale improved 4.3 per cent and 7.8 per cent respectively.
Operational eBITDA increased 16 per cent and eBITDA margin improved 2 percentage points to 24 per cent, as Optus continued
to focus on its key strategies of growing IP VPN and on-net traffic, and expanding ICT and Managed Services business.
consumer and Small-Medium business Fixed constituted 17 per cent of Optus’ operating revenue and 9.9 per cent of
Optus’ operational eBITDA. Consistent with its strategy of focusing on on-net customer growth, Optus continued to exit its
unprofitable resale services. Accordingly, consumer fixed on-net revenue was up 19 per cent whilst off-net revenue declined
55 per cent, resulting in an overall decline in revenue of 7.9 per cent to A$1.23 billion. The proportion of on-net revenue in
consumer fixed was 82 per cent, up from 64 per cent a year ago, contributing to the improved margin.
As at 31 March 2009, Optus had 951,000 broadband customers, 4.9 per cent or 44,000 more than a year ago. Of this, 848,000
broadband customers were on-net, up 20 per cent or 143,000 from a year ago.
Operational eBITDA margin was up 4 percentage points to 14 per cent and operational eBITDA increased 26 per cent,
reflecting higher on-net revenue mix and yield management initiatives.
SINGTel ANNuAl repOrT 2008 / 2009 39
SINGTel ANNuAl repOrT 2008 / 2009 39
oPeRATinG And FinAnciAl RevieW
ASSociATeS
Share of pre-tax profit (2)
Regional mobile associates
Bharti
Telkomsel
Globe
AIS
Warid Telecom
Pacific Bangladesh Telecom
Other associates
Share of post-tax profit (2)
Regional mobile associates
Bharti
Telkomsel
Globe
AIS
Warid Telecom
Pacific Bangladesh Telecom
Other associates
Financial year ended
31 march
2009
(S$ million)
2008
(S$ million)
Change (%)
871
705
266
255
(116)
(23)
1,958
93
2,051
808
517
172
179
(115)
(23)
1,538
78
1,616
840
1,146
317
253
(31)
(38)
2,487
72
2,559
753
803
209
176
(32)
(38)
1,872
60
1,932
3.7
-38.5
-15.9
1.0
272.1
-38.7
-21.2
28.4
-19.8
7.3
-35.6
-17.8
1.6
265.2
-39.2
-17.9
30.4
-16.4
notes:
(1)
(2) exclude exceptional items recognised directly at Group.
Numbers in above table may not exactly add due to rounding.
The pre-tax and post-tax contributions from the associates were down 20 per cent and 16 per cent respectively. The declines
were largely attributable to a strong Singapore Dollar, weaker performance from Telkomsel, as well as the share of full year
losses from Warid. If the regional currencies had remained constant from last year, the pre-tax and post-tax contributions
would have declined 9 per cent and 5 per cent respectively.
The regional mobile associates continued their strong growth in acquiring customers despite intense competitive pressures.
Bharti, India’s number one mobile phone operator, registered an impressive 52 per cent increase in its customer base to 94
million as at 31 March 2009, despite the entry of more GSM players in the Indian market. Telkomsel, the largest mobile phone
operator in Indonesia, posted robust growth of 41 per cent to 72 million customers. In total, the Group’s combined mobile
customer base grew by 35 per cent or 64 million to reach 249 million, the largest mobile customer base in Asia outside China.
40 SINGApOre TelecOMMuNIc ATIONS lIMITed ANd SuBSIdIArY cOMp ANIeS
bharti was the largest profit contributor and accounted for half of the total post-tax profit contribution from the associates.
Although ARPU declined on lower prices, Bharti’s operating revenue was boosted by record mobile customer growth as it
accelerated its expansion into the rural areas. The Indian Rupee fell 17 per cent against the Singapore Dollar, 12 per cent
against the US Dollar and 22 per cent against the Japanese Yen from last year. Consequently, Bharti recognised significant
fair value losses on mark-to-market of its foreign currency denominated borrowings which resulted in the Group’s share
of post-tax profit increasing moderately by 7.3 per cent to S$808 million. As at 31 March 2009, Bharti continued to lead the
Indian mobile market with its share of 24.0 per cent, up 0.3 percentage point from a year ago.
Telkomsel accounted for 32 per cent of the total post-tax profit contribution from associates, down from 42 per cent last year.
ARPU fell sharply from lower tariffs introduced in the early part of the financial year as competition intensified in Indonesia.
Operating revenue declined as the growth in minutes of use and customer additions were not sufficient to offset the dilution
from the tariff cuts. Telkomsel also incurred fair value losses on mark-to-market of its foreign currency denominated vendor
payables as the Indonesian Rupiah weakened against the US Dollar and the euro. Consequently, the Group’s share of post-
tax profit contribution from Telkomsel was down 36 per cent, after including a 13 per cent decline in the Indonesian Rupiah
against the Singapore Dollar. Telkomsel remained a market leader with a 49 per cent share of the Indonesian mobile market
as at 31 March 2009.
The Group’s share of post-tax profit contribution from Globe, the second largest mobile phone operator in the Philippines,
was down 18 per cent to S$172 million on lower operational performance amid the weak macro-economic environment.
Globe also recorded fair value losses on its US Dollar liabilities with a weaker Philippines Peso as compared to a gain last
year. The Singapore Dollar contribution was also impacted by a 7 per cent depreciation of the Philippines Peso against the
Singapore Dollar. As at 31 March 2009, Globe’s market share was 36.0 per cent, down 0.6 percentage point from a year ago.
Despite a weak economy and political tensions, AiS, the largest mobile phone operator in Thailand, reported a 13 per cent
increase in net profit in local currency terms. The increase was attributable to higher operating revenue and lower bad debts.
With the Thai Baht depreciating by 11 per cent against the Singapore Dollar, AIS’ post-tax profit contribution to the Group
was relatively flat.
Warid, a key challenger in Pakistan, incurred start-up losses as it aggressively expanded its network and incurred significant
rollout as well as customer acquisition costs. The Group’s share of Warid’s net loss amounted to S$115 million, up S$83
million as its loss was equity accounted for a full year, compared to only six months last year. Warid’s losses were also
attributed to fair value losses on its US Dollar liabilities including its licence fee payable.
The Group received S$1.07 billion in gross dividends from its associates, 4.1 per cent lower from last year. The decrease was
mainly due to the weakening regional currencies relative to Singapore Dollar. If the regional currencies were held constant
from last year, gross dividends from the associates would be up 6 per cent, contributed by higher dividends from Southern
Cross.
SINGTel ANNuAl repOrT 2008 / 2009 41
SINGTel ANNuAl repOrT 2008 / 2009 41
oPeRATinG And FinAnciAl RevieW
GRouP cASh FloW
Net cash inflow from operating activities
Net cash outflow for investing activities
Net cash outflow for financing activities
Net change in cash and cash equivalents
exchange effects on cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
Free cash flow
Singapore Business
Australia Business
Associates (net dividends after withholding tax)
Financial year ended
31 march
2009
(S$ million)
2008
(S$ million)
Change (%)
5,163
(2,391)
(3,018)
(245)
(51)
1,372
1,076
1,231
1,050
963
3,245
5,454
(2,748)
(2,711)
(6)
(12)
1,390
1,372
1,422
1,152
1,001
3,575
-5.3
-13.0
11.3
@
315.6
-1.3
-21.6
-13.4
-8.8
-3.8
-9.2
Cash capital expenditure as a percentage of operating revenue
13%
13%
@ denotes more than 500 per cent.
operating Activities
The Group’s net cash inflow from operating activities for the year ended 31 March 2009 decreased 5.3 per cent to
S$5.16 billion, impacted by the strong Singapore Dollar. The Singapore Business reported a 6.1 per cent increase in operating
cash, while Optus recorded stable operating cash. Net dividends received from the associates would have been higher by 6
per cent if the regional currencies were stable from last year.
investing Activities
The investing cash outflow amounted to S$2.39 billion. The major investing cash outflows were S$1.92 billion for the purchase
of property, plant and equipment, and S$459 million for additional capital injections in the associates, Warid and PBTL, and
acquisition of SCS. Capital expenditure was mainly incurred in expansions of mobile networks, including the HSPA upgrade
on 3G network, to support higher mobile customer additions and mobile data growth. The Group also invested in satellites,
submarine cable capacities, access transmission and core network. The capital expenditure represented 13 per cent of the
Group’s operating revenue, unchanged from last year.
Financing Activities
Net cash outflow of S$3.02 billion for financing activities arose mainly from the payment of S$1.10 billion for final dividends in
respect of the previous financial year ended 31 March 2008, and S$891 million for interim dividends in respect of the current
financial year. The Group repaid S$466 million of borrowings during the year.
Free cash Flow
The Group generated strong free cash flow of S$3.25 billion for the year. The Singapore Business contributed 38 per cent or
S$1.23 billion to the Group’s free cash flow. The Australia Business and the associates contributed 32 per cent and 30 per
cent respectively.
42 SINGApOre TelecOMMuNIc ATIONS lIMITed ANd SuBSIdIArY cOMp ANIeS
If the Australian Dollar and regional currencies had remained stable from last year, free cash flow would be down by 2 per
cent instead of 9.2 per cent. The decline was in the Singapore Business, which incurred higher capital expenditure in line with
its guidance.
cAPiTAl MAnAGeMenT
The Group is committed to an optimal capital structure and constantly reviews its capital structure to balance capital efficiency
and financial flexibility.
Gross debt decreased during the year due to net repayment of borrowings and lower translated Optus’ debt balances.
Net debt gearing ratio fell to 24.2 per cent as at 31 March 2009 from 25.8 per cent as at 31 March 2008. The average maturity
of the Group’s borrowings as at year end was 4.5 years. Group net debt was 1.0 times Group eBITDA, while Group eBITDA
was 19.9 times net interest expense.
The Group has one of the strongest credit ratings among telecommunications companies in Asia and is committed to
maintaining its investment grade credit ratings. SingTel is currently rated A+ by Standard & Poor’s and Aa2 by Moody’s
Investors Service.
Group debt (S$ million)
Group debt Metrics
8,675
7,303
7,620
6,544
7,285
5,895
6.2
22.0
4.5
25.8
4.5
24.2
Mar 07
Mar 08
Mar 09
Mar 07
Mar 08
Mar 09
Gross Debt
Net Debt(1)
group
Net debt to eBITDA (number of times)
Interest cover (3) (number of times)
Average Maturity of Borrowings (Years)
Net Debt Gearing Ratio(2) %
Financial year ended 31 march
2009
1.0
19.9
2008
1.0
20.7
2007
0.9
21.3
notes:
(1) Gross debt less cash and bank balances adjusted for related hedging balances.
(2) Net debt to net capitalisation. Net capitalisation is the aggregate of net debt, shareholders’ funds and minority interests.
(3) Defined as eBITDA to net interest expense (i.e. interest expense less interest income).
SINGTel ANNuAl repOrT 2008 / 2009 43
SINGTel ANNuAl repOrT 2008 / 2009 43
oPeRATinG And FinAnciAl RevieW
ShAReholdeR ReTuRnS
SingTel is committed to improving shareholder returns and firmly observes the alignment of shareholders and SingTel
Management interests. SingTel Management remuneration is pegged closely to the performance of the Group. Share awards
under the Performance Share Plan are vested only upon achievement of Total Shareholders’ Return (TSR) and Return on
Invested Capital (ROIC) targets.
More details are set out under ‘Corporate Governance Report – Remuneration’ on pages 69 to 74.
The Group’s underlying earnings per share fell 6.2 per cent from a year ago, impacted by unfavourable movements in foreign
currencies. Assuming exchange rates remained unchanged, underlying earnings per share would have increased 3 per cent.
Return on invested capital (1) (%)
underlying earnings per Share (S cents)
18.3
18.9
17.2
21.88
23.15
21.71
FY06/07
FY07/08
FY08/09
FY06/07
FY07/08
FY08/09
note:
(1) Ratio of earnings before Interest and Tax (eBIT) to average net capitalisation. Net capitalisation is the aggregate of net debt, shareholders’
funds and minority interests.
ShAReholdeR PAyouT
SingTel has a track record of generous shareholder payout. Our dividend policy is to pay out 45 to 60 per cent of our underlying
net profit as ordinary dividends.
For the financial year ended 31 March 2009, the Board has recommended a final ordinary dividend of 6.9 cents a share.
Together with the interim ordinary dividend of 5.6 cents a share, total distribution for the year will amount to S$2.0 billion.
This brings our total shareholder payout to approximately S$24 billion since 2000, or 79 per cent of earnings over the
same period.
Shareholder Payout (S$ billion)
1.9
0.8
1.2
0.9
1.0
1.0
3.0
1.1
0.8
1.3
1.7
1.8
2.0
2.0
2.3
1.5
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Capital reduction
Special dividend
Ordinary dividend
44 SINGApOre TelecOMMuNIc ATIONS lIMITed ANd SuBSIdIArY cOMp ANIeS
ShARe PRice PeRF oRMAnce
SingTel’s share price performed in line with the MSCI Asia Pacific Telecommunications Index and outperformed Singapore’s
Straits Times Index from the period 1 April 2008 to 31 March 2009.
SingTel Share Price Performance – 1 April 2008 to 31 March 2009
20%
20.0%
10%
10.0%
0%
0.0%
-10%
-10.0%
-20%
-20.0%
-30%
-30.0%
-40%
-40.0%
-50%
-50.0%
-60%
-60.0%
Apr 08 May 08
Apr-08
May-08
Jun 08
Jun-08
Jul 08
Jul-08
Aug 08
Aug-08
Sep 08
Sep-08
Oct 08 Nov 08
Oct-08
Nov-08
Dec 08
Dec-08
Jan 09
Jan-09
SingTel – SGX, -36%
SingTel – ASX, -23%
MSCI Asia Pacific Telecommunications Index, -35%
Straits Times Index, -44%
Source: Bloomberg
SingTel - SGX
SingTel - ASX
MSCI-AP Tel
STI
Feb 09 Mar 09
Feb-09
Mar-09
SINGTel ANNuAl repOrT 2008 / 2009 45
SINGTel ANNuAl repOrT 2008 / 2009 45
oPeRATinG And FinAnciAl RevieW
RiSk FAcToRS
SingTel’s financial performance and operations within and
outside Singapore are influenced by a vast range of risk
factors. Many of these factors affect not just our businesses
but also other businesses in the telecommunications
industry as well as in other industries. These risks vary
widely and many of them are beyond the control of the Board
and Management.
economic Risks
Changes
in economic conditions within and outside
Singapore may have a material adverse effect on the
demand for telecommunications services and hence, on
the financial performance and operations of the Group. The
global credit and equity markets have recently experienced
substantial dislocations, liquidity disruptions and market
corrections. These and other related events have had a
significant impact on the global credit and financial markets
and economic growth as a whole, and consequently,
consumer demand spending including consumer demand
for telecommunications services.
Political Risks
Some of the countries in which the Group operates and has
investments have experienced or continue to experience
political instability. The continuation or re-emergence of
such political instability in the future could have a material
adverse effect on economic or social conditions and hence,
on the ownership, control and condition of the Group’s assets
in these locations.
Regulatory Risks
The Group’s operations in Singapore and our international
operations and
investments are subject to extensive
government regulation which may limit our flexibility to
respond to market conditions, competition, new technologies
or changes in the Group’s cost structure. Governments
may alter their policies relating to the telecommunications
industry and the regulatory environment (including taxation)
in which we operate. Such changes could have a material
adverse effect on the Group’s financial performance and
operations.
The operations of our Australian subsidiary, Optus, are
subject to regulatory decisions on the rates at which it
purchases services from and provides services to other
telecommunications companies
in the country. Such
decisions can significantly affect Optus’ revenues and costs
as well as its competitive position, and may also not be
consistent with the Group’s expectations.
competitive Risks
The telecommunications market in Singapore is highly
competitive. As competition
intensifies, new players
enter the market and regulation requires us to allow our
competitors access to our networks. We expect this trend
to continue. With the deployment of Singapore’s Next
Generation National Broadband Network, competition is
expected to increase leading to an increased risk of market
share loss in certain segments of the market and further
price reductions.
The telecommunications market in Australia is fragmented.
The mobile market is highly competitive. A number of
participants are subsidiaries of large international groups
and all operators have made large investments which are
now sunk costs. The Group is, therefore, exposed to the risk
of irrational pricing being introduced by such competitors.
The fixed line services market on the other hand continues
to be dominated by the incumbent provider which can
leverage its market position to restrict the development of
competition.
The operations of our international businesses are also
subject to highly competitive market conditions. There is
a regional and global market for many of the services that
we provide, particularly international communications and
data services offered to business customers. The quality
of, and rates for, these services can affect a potential
business customer’s decision to subscribe to the Group’s
services, locate or expand its offices or communications
facilities in Singapore, or use Singapore as a transit hub
for its communications. Prices for some of these services
have shown significant declines in recent years as a result of
capacity additions and general price competition.
The growth in our overseas investments depends in part
on increases in mobile penetration rate in the markets we
operate. As these markets mature, the pace of subscriber
growth may slow and there is no assurance that new
customers will be as profitable as existing customers.
Additionally, some of
these overseas markets may
experience an increase in the number of competitors, which
could lead to price erosion and loss of market share for our
investments.
Regional expansion Risks
Given the limited size of the Singapore market, the Group’s
future growth depends largely on the success of our Asia
Pacific expansion strategy. There are considerable risks
associated with this regional expansion strategy.
46 SINGApOre TelecOMMuNIc ATIONS lIMITed ANd SuBSIdIArY cOMp ANIeS
• ability to extract Synergies and integrate new investments
In acquisitions, the Group faces challenges arising from
integrating newly-acquired businesses with our own
operations, managing these businesses in markets
where we have limited experience, and financing these
acquisitions. There is no assurance that the Group will
be able to generate synergies from regional acquisitions
and that these acquisitions will not become a drain on the
Group’s management and capital resources.
• partnership Relations
The success of our international investments depends, to
a large extent, on our relationships with, and the strength
of, our investment partners. There is no assurance that
the Group will be able to maintain these relationships or
that our investment partners will remain committed to
their partnerships with the Group.
• ability to make Further acquisitions
We continuously look for investment opportunities that
could contribute to our regional expansion strategy.
There is no assurance that the Group will be successful
in making further acquisitions due to the limited
availability of opportunities, competition for the available
opportunities from other potential investors, foreign
ownership restrictions, government policies, political
considerations and the specific preferences of sellers.
Technology Risks
The telecommunications industry is typified by rapid and
significant technological changes. These changes may
materially affect our capital expenditure and operating costs
as well as the demand for our products and services.
We have invested substantial capital and other resources
in the development and modernisation of our networks
and systems. Technological changes continue to reduce
replacement costs. Technology can also bring forth newer
and better products and services that can replace existing
ones. Additional capital expenditure may be needed to
upgrade or replace existing
infrastructure to remain
competitive. There is also the possibility of early retirement
of systems and networks before the end of their intended
lives due to rapid technological obsolescence.
In the many markets in which we operate, the Group faces
a continuing risk of market entry by operators who, by
using newer or lower cost technologies, may succeed in
rapidly attracting customers away from established market
participants. New technologies may also enable players
from adjacent industries to enter the telecommunications
market, thus increasing competition.
Project Risks
The telecommunications industry is highly capital-intensive.
The Group incurs substantial capital expenditure in constructing
and maintaining our network and systems infrastructure
projects. These projects are subject to risks associated with
the construction, supply and installation of equipment and
systems. They are also subject to risks associated with sale
of capacity on the completed project infrastructure, including
risks of default, disputes, litigation and arbitration involving
contractors, suppliers, customers and other third parties. In
addition, the Group faces risks of loss of, or damage to, our
network infrastructure from natural and man-made causes
beyond our control. Loss and damage caused by risks of
this nature may significantly disrupt our operations and may
materially and adversely affect our ability to deliver our services
to customers.
electromagnetic energy Risks
Concerns have been raised regarding the possible adverse
health consequences associated with the operation of
mobile communications devices due to potential exposure
to electromagnetic energy. While there is no substantiated
evidence of public health effects from exposure to the levels
of electromagnetic energy typically emitted from mobile
communications devices, there is a risk that an actual or
perceived health risk associated with mobile communications
could result in:
• litigation against the Group;
• reduced demand for mobile communications services;
and
• restrictions on the ability of the Group to deploy our mobile
communications networks as a result of government
environmental controls which exist or may be introduced
to address this perceived risk.
Financial Risks
The main risks arising from the Group’s financial assets and
liabilities are foreign exchange, interest rate, market, liquidity
and credit risks. The disruptions recently experienced in
the international capital markets have also led to reduced
liquidity and increased credit risk premiums for certain
market participants, and have resulted in a reduction of
available financing.
We have established risk management policies, guidelines
and control procedures to manage our exposure to such
risks. Hedging transactions are determined in the light
of commercial commitments and are reviewed regularly.
Financial instruments are used only to hedge underlying
commercial exposures and are not held or sold for speculative
purposes. The Group’s financial risk management
is
discussed in detail on page 162 in Note 37 to the Financial
Statements.
SINGTel ANNuAl repOrT 2008 / 2009 47
SINGTel ANNuAl repOrT 2008 / 2009 47
48 SINGApOre TelecOMMuNIc ATIONS lIMITed ANd SuBSIdIArY cOMp ANIeS
Staying
CommitteD
to Be a
ReSponSiBle
CoRpoRate
CitiZen
Profits are not everything.
As a socially responsible
company, SingTel drives
and supports numerous
programmes for the benefit
of our communities, our
environment, our customers
and our employees. We
are on the right track to
helping people realise
their potential, both in the
workplace and in society.
SINGTel ANNuAl repOrT 2008 / 2009 49
coRPoRATe SociAl ReSPonSibiliTy
David Hall, Optus National
High Performance
Wheelchair Tennis Advisor
SingTel provides vital communications
lifeline to Singapore’s first women Mount
everest team
Singapore President S R Nathan receives a cheque on
behalf of the SingTel Touching Lives Fund beneficiaries
The SingTel Group is committed to being a responsible
corporate citizen. In Australia and Singapore, we proactively
and constantly look for ways to implement and improve
policies and programmes for the Community, environment,
Marketplace and Workplace.
We also launched the Optus Connecting Communities
Grants Program which provided 23 community organisations
with up to A$5,000 for each programme aimed at reducing
social isolation and reconnecting disengaged youth in
the community.
In Singapore, SingTel is a signatory to the United Nations
Global Compact committed to upholding 10 principles across
the areas of human rights, labour standards, environment
and anti-corruption. We are also a committee member of the
Singapore Compact, a society which furthers the Corporate
Social Responsibility (CSR) movement nationally. In the
region, our associates carry out various CSR initiatives,
sometimes in collaboration.
coMMuniTy
Giving to charity
In Australia, our Workplace Giving Program continued
to grow with over A$320,000 donated by Optus staff and
matched by Optus during this financial year. Since the
inception of the programme in 2005, over A$900,000 has
been donated to Optus’ 13 charity partners.
In addition to its Workplace Giving Program, Optus held a
number of fundraising events for its charity partners. For
example, we continued to support Kids Helpline for the 10th
year and raised more than A$3.2 million for the cause which
helped establish the world’s first free real-time online
counselling service for young people.
In Singapore, the SingTel Touching Lives Fund (STLF), our
flagship philanthropy programme, raised S$2.2 million
in 2008 with SingTel matching all outright donations
dollar-for-dollar. The beneficiaries were Association
for Persons with Special Needs (APSN) Tanglin School,
Autism Resource Centre, Fei Yue Community Services,
Milk Fund, Singapore Children’s Society and Students
Care Service. Since its launch in 2002, STLF has raised
S$14.9 million for 19 charities affiliated with the National
Council of Social Service (NCSS).
SingTel has also been a Corporate SHARe (Social Help
and Assistance Raised by employees) company since 1992
and matches the monthly employee contributions dollar-
for-dollar. SHARe donations go to the Community Chest,
the fundraising arm of NCSS. Since 1991, we have also
provided an annual grant to NCSS to defray the costs of
telco services.
the Group continued
Supporting social causes
Besides charitable giving,
to
support community causes in myriad ways. Our staff in
Australia and Singapore are given one day of leave per year
to support a charity or community cause of their choice.
In Australia, we also offer each employee up to three
months of paid leave to volunteer overseas through a
partnership with Care Australia.
50 SINGApOre TelecOMMuNIc ATIONS lIMITed ANd SuBSIdIArY cOMp ANIeS
SingTel Group CFO Jeann Low accepts the
Governance & Transparency Index Award
where SingTel was ranked number one
CeO Singapore Allen Lew being dunked
for charity
Optus supports customers affected by
the Victorian bushfires
In Singapore, our staff undertook four major community
service projects during the year, serving children with special
needs, senior citizens and socially disadvantaged citizens.
We continued to bolster the arts in Australia by sponsoring
the Bell Shakespeare Company, Company B, Cirque du
Soleil and the Australian Brandenburg Orchestra. Besides
funding, sponsorship may be in the form of tickets for
disadvantaged members of the community.
In some
instances, telecommunications technology such as satellites
were used to broadcast performances to audiences in
remote areas.
SingTel also used our satellite technology to allow
Singapore’s first women Mt everest team to stay in touch
with their loved ones as they made their ascent. Throughout
their climb, the team shared their progress via pre-defined
SMS and email updates from 6,500 metres and above.
The first member of the team reached the summit on
20 May 2009.
In addition to a long-term partnership with Tennis Australia,
we recently began a multi-million dollar partnership with
the Football Federation of Australia, which covers football
from the grassroots to elite levels.
Reducing social isolation and reconnecting disengaged youth
are the two key community focus areas for Optus. During the
year, we mentored young people from disadvantaged schools
through the Australian Business Community Network,
purchased a patient vehicle for the NeLUNe Foundation
to transport cancer patients from regional centres to city
hospitals, and enabled disadvantaged youths to undergo
Mission Australia’s residential programme to get their lives
back on track.
education is also a cause close to the Group’s heart. In
2008, the SingTel Group established its regional scholarship
programme for undergraduate studies in a variety of
disciplines at selected top universities in Asia Pacific.
SingTel scholars from regional countries can look forward to
gaining regional experience and knowledge from the Group.
The Group also supports events of
international
importance. As a lead sponsor, SingTel will be providing all
telecommunication services for the Asia-Pacific economic
Cooperation (APeC) 2009 meeting being held in Singapore
for the first time.
disaster relief
As part of our disaster relief assistance, SingTel donated
S$200,000 towards relief and restoration efforts after
the May 2008 earthquakes in Sichuan province, China. In
addition, our staff at NCS, which has operations in China
including Chengdu, contributed S$59,000.
Optus contributed A$250,000 to the Salvation Army Bushfire
Appeal to assist victims of the Victorian bushfires in February
2009. Our employees in Australia gave another A$140,000 to
the appeal. Optus also worked with the authorities to restore
networks and assisted customers who had lost property in
the bushfires. Customers whose fixed and mobile services
were disrupted by the fires, were offered free mobile prepaid
handsets worth A$1,000 in value each while accounts were
“zero-billed” for up to three months.
SINGTel ANNuAl repOrT 2008 / 2009 51
SINGTel ANNuAl repOrT 2008 / 2009 51
coRPoRATe SociAl ReSPonSibiliTy
Optus staff during a volunteer day
GCeO Chua Sock Koong presenting at the
University of New South Wales ‘Meet the
CeO’ Series, March 2009
Optus Chief executive
Paul O’Sullivan with Socceroos
Lucas Neil and Tim Cahill
enviRonMenT
Our environmental Management System (eMS) details
ways to protect the environment, conserve resources and
eliminate or minimise adverse environmental impacts and
risks during construction activities.
SingTel keeps radiation emissions from base stations
within internationally recognised standards. The location
and style of mounts, feeders and antennas are considered
prior to construction to minimise visual impact, while
environmentally
friendly Value Regulated Lead Acid
batteries are used in telephone exchanges.
We go beyond the eMS to be responsible in energy
consumption, waste management and carbon emission.
In 2009, we sponsored earth Hour, switching off the lights
at our landmark buildings in Australia and Singapore for
an hour, to send a message that we care about climate
change. In conjunction with this, we ran an environmental
awareness programme for customers and employees.
This was done through SMSes and MMSes, emails, bill
inserts made of recycled paper, and competitions.
Waste reduction is important to our environmental efforts.
At the Optus Sydney headquarters in Macquarie Park
facility, over 92 per cent of all waste material is recycled.
Our Singapore offices recently piloted a paper recycling
scheme, recycling over 17 tonnes of paper in the first nine
months. We also continue to involve customers in efforts
to go paperless, by promoting free e-billing for Optus and
SingTel customers.
We achieved 50 per cent carbon neutrality at our corporate
sites in Australia through green power and carbon offsets.
At our sites in both Australia and Singapore, we have in place
energy saving measures. For example, Optus was the first
company in Australia to trial an installation of new Thermal
Solar powered air conditioning in an office, reducing power
use by 35 per cent.
In Singapore, we saved power by reconfiguring the chiller
systems and reducing their operation hours, increasing the
air-conditioning temperature, and encouraging staff to use
less electricity. When overseas employees require training
from their colleagues based in Singapore, we use video-
conferencing to reduce our carbon footprint.
We also entered into an agreement where Ascendas Real
estate Investment Trust will build a state-of-the-art green
building in Singapore to our specifications which we will
leaseback. This new data centre will be constructed to meet
the local authority’s Green Mark scheme, a green building
rating system that evaluates buildings based on criteria such
as energy and water efficiency, as well as environmental
protection and innovation.
In 2008/09 we continued to partner with the Australian
Wildlife Conservancy to save threatened Australian wildlife
such as the Purple Crested Fairy Wren and the Yellow Footed
Rock Wallaby.
MARkeTPlAce
Numerous awards attest to our leadership in corporate
governance. We continue to lead the market with our
policies and initiatives, close working relationships with
governments and responsiveness to industry requirements.
52 SINGApOre TelecOMMuNIc ATIONS lIMITed ANd SuBSIdIArY cOMp ANIeS
Students folding paper hearts to raise funds for beneficiaries of the SingTel Touching
Lives Fund
AIS launches an energy efficient “Green
Network” to help stop climate change
We were recently ranked number one in the newly created
introduced by the
Governance & Transparency
Business Times and the National University of Singapore’s
Corporate Governance and Financial Reporting Centre.
Index
In the area of security and privacy, Optus abides by the
Privacy Act and Privacy Provisions of the Telecommunications
Act, the Spam Act and adheres to the Do Not Call Register,
which aims
from unsolicited
marketing calls.
to protect consumers
Since 1995, Optus has convened a Consumer Liaison Forum,
a two way dialogue to better understand the needs of
telecommunications consumers. Optus has also developed
a Disability Action Plan in consultation with representatives
of disability organisations that aims to remove the barriers to
access to our products and services by customers, potential
customers and staff.
In Singapore and Australia, we have policies in place to
run operations with honesty and integrity. For instance, the
Group has zero tolerance for fraud and our whistleblower
policy provides employees with open channels to encourage
the reporting of any improper conduct.
Our procurement policy aims to award tenders based on merit
through an impartial process. The procurement manual sets
out the ethics Policy on Procurement Practices.
All our employees are bound by clear standards as set out in
the staff manual to carry out their daily tasks.
The Voluntary Code for Self-regulation of Mobile Content in
Singapore, jointly developed by SingTel and other local mobile
operators, identifies content which is not appropriate to be
offered to mobile subscribers in Singapore. This voluntary
code assures the public of the operators’ commitment to
protect minors against undesirable Internet content that
might be accessed via mobile phones.
WoRkPlA ce
We are a leading employer, committed to providing a safe and
healthy work environment conducive to employee wellness,
collaboration and work-life balance.
We encourage staff to take control of their health through
talks, health screenings and programmes for disease
management and smoking cessation. Facilities such as
health clubs and gymnasiums are available at SingTel and
Optus premises while healthier food is offered in all staff
cafeterias. We also organise various sporting activities
catering to diverse interests, including fitness classes and
mass participation in national sporting events. In Singapore,
our efforts to promote workplace health were recognised
with the Singapore HeALTH (Helping employees Achieve
Life-Time Health) Award 2008 from the Health Promotion
Board. SingTel and NCS each won Gold awards for our
excellent workplace health promotion programmes.
To support our people in managing their work-life harmony,
the SingTel Group offers family-friendly policies such as
flexible work schedules, telecommuting and various forms of
family leave arrangements. NCS and Optus also provide on-
site childcare facilities. All employees and their immediate
family members have access to professional counselling
services on work-life issues through employee Assistance
Programmes run by external consultants.
SINGTel ANNuAl repOrT 2008 / 2009 53
SINGTel ANNuAl repOrT 2008 / 2009 53
ouR PeoPle
‘yes’ store opening at
Macquarie Park
SingTel secured top position in IP VPN market share in Asia Pacific
(excluding Japan)
Our family of about 23,000 employees worldwide is a rich
mix of nationalities, experience and expertise. They are
integral to achieving SingTel’s vision to be Asia Pacific’s best
communications group.
A feature of the Group’s corporate strategy is commitment
to talent management and development. Our world-class
workforce gives us an edge over competitors in the global
marketplace.
The right values make a difference to the success of SingTel.
Our five core values - Customer Focus, Challenger Spirit,
Teamwork, Integrity and Personal excellence – guide
the actions and decisions of our people toward achieving
business and strategic goals.
Our employee engagement scores across the Group have
consistently improved since 2007, and our results surpass
the global telecommunications industry average. employee
engagement remains a key focus for the Group.
Apart
from providing competitive remuneration and
incentives to reward performance, we listen to our people
to understand their needs. Flexible work arrangements
such as telecommuting, flexi-hours and pro-family leave
schemes are in place to help balance the demands of work
and family.
ATTRAcTinG TAlenT
We welcome talent from around the world. As part of our
efforts to attract graduate talent, we have established
networks and partnerships with domestic and international
tertiary
identify top students through
career fairs, networking events, internships, referrals and
cadetships.
institutions to
In Australia, we have a successful 3-year engineering cadet
programme that allows participants to acquire hands-on
skills in the network division. In Singapore, we partner the
Infocomm Development Authority to develop talent for the
Infocomm and Technology industry through the National
Infocomm Scholarships and the enhance Learning in
Infocomm Technology programme, grooming them to be
‘industry-ready’.
In 2008, SingTel
launched a 24-month Management
Associate Program for top graduates. We also have a
graduate development programme targeted at top students
from Australian universities.
develoPinG TAlenT
We invest in nurturing the wealth of talent in the Group
by offering education, experience and relationship-
based learning opportunities. We recognise a good initial
experience as an important step in integrating new staff into
the company. They go through a highly interactive integration
programme encompassing knowledge building and online
toolkits as well as being assigned a buddy and a guide. As
they grow their careers with us, employees are encouraged
to discuss development plans with their managers and to
take charge of their careers. Online career development
portals, toolkits, talks and workshops provide staff with the
necessary resources to evaluate and manage their careers.
In 2008, we launched our inaugural Singapore Learning
Fiesta and Australia Career expos.
With a wide range of services to address different market
segments and our presence in 19 countries, we are well
positioned to offer vast opportunities to meet our people’s
aspirations for individual growth and career development.
54 SINGApOre TelecOMMuNIc ATIONS lIMITed ANd SuBSIdIArY cOMp ANIeS
Sam Stosur, Australian
tennis player, hangs with the
Optus prepaid crew at the
Australian Open
SingTel Group Annual Top Management Workshop this year focused on confronting the
challenges ahead posed by the global economic downturn and the structural changes within
the industry
In building a career with the SingTel Group, job rotations
functions, businesses, market segments or
across
geographies are encouraged. We also sponsor our top
talent for master’s degree programmes at leading world-
class universities.
To support talent development across the Group and our
regional associates, we continued with our regional exchange
programme introduced in 2007.
dRivinG And ReWARdinG PeRF oRMAnce
We drive a high performance ethic by ensuring that everyone
understands where the organisation is heading and how
employees can contribute to achieving our corporate
goals. We reward and recognise individuals and teams that
perform well and people who are role models of our core
values. Our leaders are measured and rewarded not only for
achieving business results but also on how well they engage,
lead and develop their teams.
GRooMinG leAdeRS
Because strong and effective leaders play a pivotal role in
driving our business success, our management team plays
an active role in grooming the next generation of leaders.
To emphasise the importance of people management and
development, we have integrated our People plan into
our business planning process and require our leaders to
achieve people development goals. People managers who
demonstrate exemplary people management practices
are also recognised through annual awards in Australia
and Singapore.
A robust Talent Review is in place to ensure the talent pool
of high and emerging potential is constantly tracked and
refreshed. The experience, education and relationship-
based interventions, such as education sponsorships, job
rotations and mentoring are appropriately matched to
individuals to accelerate their development.
involves
Our People Managers programme
leading
education programmes targeted at different levels of
management. In 2008, a SingTel Teamwork Grand Prix
programme was developed in Singapore to equip people
managers with effective leadership skills and to build high-
performing teams.
We provide competitive rewards that demonstrate our pay
for performance value proposition and integrated work-
life benefits. Incentive pay that is pegged to performance is
offered to motivate our people and encourage continuous
In addition, we recognise
standards of excellence.
breakthrough performance through various awards such as
the Optus Reward “yes”, SingTel excellence and NCS Making
IT Happen awards.
collecTive AGReeMenTS
Our strong collaborative partnership with the Union of
Telecoms employees of Singapore has brought about a
win-win approach to labour management relations. Our
collective agreements with the union cover more than 4,000
bargainable employees at SingTel and NCS combined.
Within Optus, about 6,800 staff are covered by the
employment Partnership Agreement,
collective
agreement made directly between Optus and employees.
A feature of the Optus culture since 1994, it reflects our
philosophy of dealing directly with our people.
a
SINGTel ANNuAl repOrT 2008 / 2009 55
SINGTel ANNuAl repOrT 2008 / 2009 55
56 SINGApOre TelecOMMuNIc ATIONS lIMITed ANd SuBSIdIArY cOMp ANIeS
Staying
ReSilient
With gooD
goveRnanCe
Integrity is important. The
resilience of our group is
built on a solid foundation
of corporate governance.
Transparent processes
and stringent checks and
balances serve to safeguard
shareholders’ interests and
keep our operations running
smoothly. Our exemplary
approach consistently earns us
plaudits from the investment
and business community.
SINGTel ANNuAl repOrT 2008 / 2009 57
CORPORATE GOVERNANCE
INTROduCTION
Good corporate governance ensures shareholder interests
are protected and enhances corporate performance and
accountability. SingTel aspires to the highest standards of
corporate governance and, to this end, has put in place a
set of well-defined processes.
As SingTel shares are listed on the SGX and ASX, SingTel
seeks to comply with two sets of listing rules and is guided
in its corporate governance practices by the Singapore
Code of Corporate Governance 2005 (“2005 Code”) as well
as the revised ASX Corporate Governance Principles and
Recommendations released on 2 August 2007 (“Revised
ASX Code”). Where one exchange has more stringent
requirements, SingTel will strive to observe the more
stringent requirements.
In line with corporate governance best practices, certain
changes to the Group’s corporate governance regime have
been made, including:
•
The appointment of a Lead Independent Director.
More details are set out in the ‘Lead Independent
Director’ section on page 60.
• A simplified procedure for Directors to retire by
rotation. More details are set out in the ‘Board
Membership’ section on pages 60 to 61.
The Board is also proposing the following changes at the
forthcoming AGM to be held on 24 July 2009 to provide
shareholders with enhanced protection against dilution:
• Reduction of the limit for non-pro rata share issues
from 10.0 per cent of the total number of issued shares
in the capital of SingTel to 5.0 per cent of the total
number of issued shares in the capital of SingTel.
•
Introduction of an annual limit of 1.0 per cent of the
total number of issued shares in the capital of SingTel
on the number of new shares under awards to be
granted pursuant to the SingTel Performance Share
Plan.
Details on the above proposals are set out in the Notice of
AGM dated 25 June 2009.
This report sets out SingTel’s main corporate governance
practices with reference to the 2005 Code and the Revised
ASX Code. Unless otherwise stated, these practices were in
place for the entire financial year.
The Board of Directors
is responsible for SingTel’s
corporate governance standards and policies, and stresses
their importance across the Group. SingTel has received
accolades from the investment community for excellent
corporate governance. More details are included in the
‘Awards and Accolades’ section on pages 18 to 19.
BOARd MATTERs
Board’s Conduct of its Affairs
The Board oversees the business affairs of the SingTel
Group. It assumes responsibility for the Group’s overall
strategic plans and performance objectives, financial
plans and annual budget, key operational initiatives, major
funding and investment proposals, financial performance
reviews, compliance and accountability systems, and
corporate governance practices. The Board also appoints
the Group CEO, approves the policies and guidelines for
Board and Senior Management remuneration, and approves
the appointment of Directors. In line with best practices in
corporate governance, the Board also oversees long-term
succession planning for Senior Management.
SingTel has established financial authorisation and
approval limits for operating and capital expenditure, the
procurement of goods and services, and the acquisition
and disposal of investments. Apart from matters that
specifically require the Board’s approval, such as the
issue of shares, dividend distributions and other returns to
shareholders, the Board approves transactions exceeding
certain threshold limits, while delegating authority for
transactions below those limits to Board Committees and
the Management Committee so as to optimise operational
efficiency.
58 singapore telecommunications limited and suBsidiarY companies
CORPORATE GOVERNANCE
Directors’ Attendance at Board Meetings during the Financial Year Ended 31 March 2009
Name of Director
Chumpol NaLamlieng
Graham John Bradley
Chua Sock Koong
Fang Ai Lian (1)
Heng Swee Keat
Dominic Chiu Fai Ho
Simon Israel
John Powell Morschel
Kaikhushru Shiavax Nargolwala
Ong Peng Tsin (2)
Deepak S Parekh
Nicky Tan Ng Kuang
Professor Tommy Koh (3)
Scheduled Board Meetings*
Ad Hoc Board Meetings*
Number of
Meetings
Held
Number of
Meetings
Attended
Number of
Meetings
Held
Number of
Meetings
Attended
7
7
7
4
7
7
7
7
7
-
7
7
3
7
7
7
4
4
7
7
7
7
-
5
6
3
1
1
1
-
1
1
1
1
1
-
1
1
-
1
1
1
-
1
1
1
1
1
-
-
-
-
* refers to meetings held/attended while each director was in office
(1) mrs Fang ai lian was appointed to the Board on 7 august 2008.
(2) mr ong peng tsin was appointed to the Board on 1 June 2009.
(3) professor tommy Koh retired following the conclusion of the agm held on 25 July 2008.
The Board meets regularly, and sets aside time at each
scheduled Board meeting to meet without the presence
of Management. Board meetings are full-day affairs and
include presentations by senior executives and external
consultants/experts on strategic issues relating to specific
business areas. Typically, at least one Board meeting a
year is held overseas, in a country where the Group either
has significant interests or has an interest in investing. In
addition to at least seven scheduled meetings each year,
the Board meets as and when warranted by particular
circumstances. Eight Board meetings were held in the
financial year ended 31 March 2009. Meetings via telephone
or video conference are permitted by SingTel’s Articles of
Association.
A record of the Directors’ attendance at Board meetings
during the financial year ended 31 March 2009 is set out
above.
Directors are required to act in good faith and in the interests
of SingTel. All new Directors appointed to the Board
are briefed on the Group’s business activities, strategic
direction and policies, and the regulatory environment in
which the Group operates, as well as their statutory and
other duties and responsibilities as Directors. In line with
best practices in corporate governance, the 2005 Code and
the Revised ASX Code, new Directors also receive a letter
from the Company stating clearly the Board’s role and
the role of non-executive Directors, the time commitment
that the Director would be expected to allocate and other
relevant matters.
singtel annual report 2008 / 2009 59
CORPORATE GOVERNANCE
Board Composition and Balance
The size and composition of the Board are reviewed from
time to time by the Corporate Governance and Nominations
Committee, which seeks to ensure that the size of the
Board is conducive to effective discussion and decision-
making, and that the Board has an appropriate number
of independent Directors. The Committee also seeks to
maintain an appropriate balance of expertise, skills and
attributes among the Directors, including relevant core
competencies in areas such as accounting and finance,
business and management, industry knowledge, strategic
planning, customer-based experience and knowledge, and
regional business expertise. Any conflicts of interest are
taken into consideration.
Reflecting the focus of the Group’s business in the region,
more than half of SingTel’s 12 Directors are, or originate,
from countries outside Singapore, namely, the Chairman,
Mr Chumpol NaLamlieng, and non-executive Directors,
Messrs Graham John Bradley, Dominic Chiu Fai Ho,
Simon Israel, John Powell Morschel, Kaikhushru Shiavax
Nargolwala and Deepak S Parekh.
The Corporate Governance and Nominations Committee
assesses the independence of each Director, taking into
account the SGX and ASX corporate governance guidance
for assessing independence. On this basis, Ms Chua Sock
Koong, SingTel’s Group CEO, and Mr Simon Israel, an
Executive Director of Temasek Holdings (Private) Limited,
are the only non-independent Directors.
A Director who has no relationship with the Group or its
officers that could interfere, or be reasonably perceived
to interfere, with the exercise of his independent business
judgement in the best interests of SingTel, is considered
to be independent. The Chairman and all other members
of the Board, except those identified above as being non-
independent, are considered to be independent Directors.
In assessing the independence of the Directors, the
Corporate Governance and Nominations Committee has
examined the different relationships identified by the 2005
Code and the Revised ASX Code that might impair the
Directors’ independence and objectivity, and is satisfied that
the Directors are able to act with independent judgement.
The profile of each Director and other relevant information
are set out under ‘Board of Directors’ from pages 12 to 15.
Chairman and CEO
There is a clear separation of the roles and responsibilities
of the Chairman and the Group CEO. The Chairman, who is
an independent Director, leads the Board and is responsible
for the Board’s workings and proceedings, while the Group
CEO is responsible for implementing the Group’s strategies
and policies, and for conducting the Group’s business.
Lead Independent Director
In
line with corporate governance best practices,
Mr Kaikhushru Shiavax Nargolwala was appointed as
the Lead Independent Director of the Board in May 2009.
Mr Nargolwala has been an independent Director on the
Board since 29 September 2006.
The Lead Independent Director is appointed by the Board
to serve in a lead capacity to coordinate the activities of the
non-executive Directors in circumstances where it would be
inappropriate for the Chairman to serve in such capacity,
and to assist the Chairman and the Board to assure effective
corporate governance in managing the affairs of the Board
and the Company.
The Lead Independent Director will serve as chairman of
the Corporate Governance and Nominations Committee.
The role of the Lead Independent Director includes meeting
with the non-executive Directors without the Chairman
present at least annually to appraise the Chairman’s
performance and on such other occasions as are deemed
appropriate. He will also be available to shareholders
if they have concerns relating to matters which contact
through the normal channels of the Chairman, Group
CEO or Group CFO has failed to resolve, or for which such
contact is inappropriate.
Board Membership
SingTel’s Corporate Governance and Nominations Committee
establishes and reviews the profile required of Board
members and makes recommendations to the Board on the
appointment, re-nomination and retirement of Directors.
60 singapore telecommunications limited and suBsidiarY companies
CORPORATE GOVERNANCE
is
When an existing Director chooses to retire or
required to retire from office by rotation, or the need for
a new Director arises, the Corporate Governance and
Nominations Committee reviews the range of expertise,
skills and attributes on the Board and the composition of
the Board. The Committee then identifies SingTel’s needs
and prepares a shortlist of candidates with the appropriate
profile for nomination or re-nomination. Where necessary,
the Committee may seek advice from external search
consultants.
The Corporate Governance and Nominations Committee
factors such as attendance, preparedness,
takes
participation and candour
into consideration when
evaluating the past performance and contributions of
a Director for recommendation to the Board. However,
the re-nomination or replacement of a Director does
not necessarily reflect the Director’s performance or
contributions to the Board. The Committee may have to
consider the need to position and shape the Board in line
with the evolving needs of SingTel and the business.
Directors must ensure that they are able to give sufficient
time and attention to the affairs of SingTel and, as part of its
review process, the Corporate Governance and Nominations
Committee decides whether or not a Director is able to do
so and whether he/she has been adequately carrying out
his/her duties as a Director of SingTel. The Committee has
also adopted an internal guideline that seeks to address
the competing time commitments that may be faced when
a Director holds multiple board appointments.
At the Annual General Meeting (“AGM”) held on 25 July
2008, the shareholders approved alterations to SingTel’s
Articles of Association (the “Articles”) relating to the
retirement and re-election of Directors. The effect of the
alterations is to simplify the rotation procedure whilst
at the same time ensuring that at least three Directors
retire from office at each AGM. Under the alterations, a
Director must retire from office at the third AGM after the
Director was elected or last re-elected. A retiring Director
is eligible for re-election by SingTel shareholders at the
AGM. In addition, a Director appointed by the Board to fill
a casual vacancy, or appointed as an additional Director,
may only hold office until the next AGM, at which time he/
she will be eligible for re-election by shareholders. If at
any AGM, less than three Directors would retire pursuant
to the requirements set out above, the additional Directors
to retire at that AGM shall be those who have been longest
in office since their last re-election or appointment. The
Group CEO, as a Director, is subject to the same retirement
by rotation, resignation and removal provisions as the
other Directors and such provisions will not be subject
to any contractual terms that he/she may have entered
into with the Company. Shareholders are provided with
relevant information on the candidates for election or
re-election.
Board Performance
The Board and the Corporate Governance and Nominations
Committee strive to ensure that Directors on the Board
possess the experience, knowledge and skills critical to
the Group’s business so as to enable the Board to make
sound and well-considered decisions.
Directors also participate in an annual offsite workshop
with Senior Management to strategise and plan the Group’s
mid-term direction. Training and development programmes
for Directors include talks and presentations by renowned
experts and professionals in various fields, such as
telecommunications, technology, regulatory matters and
the economy/business environment in relevant markets.
The Directors may also attend other appropriate courses,
conferences and seminars.
to assess
Each year, the Corporate Governance and Nominations
the
Committee undertakes a process
effectiveness of the Board as a whole and the
contributions by each Director. During the financial year,
Directors were requested to complete appraisal forms
to assess the overall effectiveness of the Board. The
results of the appraisal exercise were considered by the
Committee which then made recommendations to the
Board, aimed at helping the Board to discharge its duties
more effectively. The appraisal process focused on the
evaluation of factors such as the size and composition
of the Board, the Board’s access to information, Board
processes and accountability, Board performance in
relation to its principal functions, communication with
Senior Management and Directors’ standards of conduct.
singtel annual report 2008 / 2009 61
CORPORATE GOVERNANCE
The Board is of the view that financial indicators are
not appropriate criteria for assessing the Board’s
performance as the Board’s role is seen to be more in
formulating, rather than executing, strategy and policy.
• Finance, Investment and Risk Committee
• Audit Committee
• Compensation Committee
• Corporate Governance and Nominations Committee
• Optus Advisory Committee.
The Directors were also requested to complete appraisal
forms to assess each individual Director’s contributions
to the Board’s effectiveness. Each Director was given the
opportunity to meet with the Chairman and the chairman
of the Corporate Governance and Nominations Committee
to discuss the appraisal exercise and other Board matters.
In addition, the contributions and performance of each
Director were assessed by the Committee as part of its
periodic reviews of the composition of the Board and the
various Board Committees. In the process, the Committee
was abIe to identify areas for improving the effectiveness
of the Board and its Committees. In relation to the Board
Committees, the chairman of each Committee prepared a
report on the Committee’s activities for the financial year,
which was reported to the Board.
Access to Information
Prior to each Board meeting, SingTel’s Management
provides the Board with information relevant to matters on
the agenda for the Board meeting. The Board also receives
regular reports pertaining to the operational and financial
performance of the Group. In addition, Directors receive
analysts’ reports on SingTel and other telecommunications
companies on a quarterly basis. Such reports enable the
Directors to keep abreast of key issues and developments
in the industry, as well as challenges and opportunities for
the Group.
The Board has separate and independent access to the
Senior Management and the Company Secretary at all
times. The Company Secretary attends all Board meetings
and is responsible for, among other things, ensuring that
Board procedures are observed and that applicable rules
and regulations are complied with. Procedures are in place
for Directors and Board Committees, where necessary, to
seek independent professional advice, paid for by SingTel.
Board And Management Committees
The following Board Committees assist the Board in
executing its duties:
The chairman of each Board Committee is an independent
Director. Each Board Committee may make decisions on
matters within its terms of reference and applicable limits
of authority. The terms of reference of each Committee are
reviewed from time to time, as are the Committee structure
and membership.
The selection of Board Committee members requires
careful management to ensure that each Committee
comprises Directors with appropriate qualifications
and skills, and that there is an equitable distribution
of responsibilities among Board members. The need
to maximise the effectiveness of the Board, and to
encourage active participation and contribution from
Board members, is also taken into consideration.
A record of each Director’s Board Committee memberships
and attendance at Board Committee meetings during the
financial year ended 31 March 2009 is set out on page 63.
Finance, Investment and Risk Committee
The Finance, Investment and Risk Committee (“FIRC”)
comprises three Directors.
strategic
investments
The main responsibilities of the FIRC are to consider and
and
and portfolio
approve
divestments within certain prescribed thresholds, review
the Group’s investment and treasury policies, and manage
the Group’s assets and liabilities in accordance with
the policies and directives of the Board. The FIRC also
reviews the Group’s risk profile and policies, examines
the effectiveness of the Group’s risk management system,
guides the process to identify, evaluate and manage
significant risks, and reports to the Board on material
matters, findings and recommendations pertaining to
risk management.
In addition, the FIRC approves any on-market share
repurchase pursuant
to SingTel’s share purchase
mandate.
62 singapore telecommunications limited and suBsidiarY companies
CORPORATE GOVERNANCE
Directors’ Board Committee Memberships and Attendance at Board Committee Meetings during the Financial Year Ended
31 March 2009
Finance,
Investment and
Risk Committee* Audit Committee*
Compensation
Committee*
Corporate
Governance and
Nominations
Committee*
Optus Advisory
Committee*
Number of
Meetings
Held
Number of
Meetings
Attended
Number of
Meetings
Held
Number of
Meetings
Attended
Number of
Meetings
Held
Number of
Meetings
Attended
Number of
Meetings
Held
Number of
Meetings
Attended
Number of
Meetings
Held
Number of
Meetings
Attended
2
5
5
3
2
5
5
2
4
4
3
4
4
1
4
4
3
4
4
1
2
2
2
2
2
1
2
2
3
3
3
1
3
3
3
3
2
1
3
2
4
4
4
4
3
4
4
4
4
4
Name of Director
Chumpol NaLamlieng (1)
Graham John Bradley
Chua Sock Koong (2)
Fang Ai Lian (3)
Heng Swee Keat
Dominic Chiu Fai Ho (4)
Simon Israel
John Powell Morschel (5)
Kaikhushru Shiavax
Nargolwala
Ong Peng Tsin (6)
Deepak S Parekh
Nicky Tan Ng Kuang (7)
3
3
Professor Tommy Koh (8)
* Refers to meetings held/attended while each Director was in office
(1) Mr Chumpol NaLamlieng ceased to be a member of the Finance, Investment and Risk Committee, and was appointed to the
Corporate Governance and Nominations Committee, on 7 August 2008.
(2) Ms Chua Sock Koong ceased to be a member of the Finance, Investment and Risk Committee on 7 August 2008. She is not a member
of the committees other than the Optus Advisory Committee although she was in attendance at meetings of those committees as
appropriate.
(3) Mrs Fang Ai Lian was appointed to the Audit Committee on 7 August 2008.
(4) Mr Dominic Chiu Fai Ho was appointed to and ceased to be a member of the Compensation Committee on 7 August 2008 and 13 May
2009 respectively. Mr Ho was appointed to the Corporate Governance and Nominations Committee on 13 May 2009.
(5) Mr John Powell Morschel was appointed to and ceased to be a member of the Finance, Investment and Risk Committee on 7 August 2008
and 1 June 2009 respectively.
(6) Mr Ong Peng Tsin was appointed to the Board and the Finance, Investment and Risk Committee on 1 June 2009.
(7) Mr Nicky Tan Ng Kuang ceased to be a member of the Audit Committee, and was appointed to the Finance, Investment and Risk
Committee, on 7 August 2008.
(8) Professor Tommy Koh retired following the conclusion of the AGM held on 25 July 2008.
Audit Committee
The Audit Committee must comprise at least three Directors,
all of whom must be non-executive Directors and the majority
of whom, including the chairman, must be independent
Directors. At least two members of the Audit Committee must
have accounting or related financial management expertise
or experience. As required by the terms of reference of the
Audit Committee, the chairman of the Audit Committee is a
Director other than the Chairman of the Board.
The Audit Committee has explicit authority to investigate
any matter within its terms of reference, and has the full
cooperation of and access to Management. It has direct
access to the internal and external auditors, and full
discretion to invite any Director or executive officer to
attend its meetings.
singtel annual report 2008 / 2009 63
CORPORATE GOVERNANCE
The main responsibilities of the Audit Committee are to
assist the Board in discharging its statutory and other
responsibilities relating to internal controls, financial
and accounting matters, compliance, and business and
financial risk management.
the
The Audit Committee reports to the Board on the audits
internal and external auditors,
undertaken by
information, and the
the adequacy of disclosure of
appropriateness and quality of the system of risk
management and internal controls. It reviews the quarterly
and annual financial statements with Management and the
external auditors, reviews and approves the annual audit
plans for the internal and external auditors, and reviews
the internal and external auditors’ evaluation of the Group’s
system of internal controls.
The Audit Committee is responsible for evaluating the
cost-effectiveness of audits, the
independence and
objectivity of the external auditors, and the nature and
extent of the non-audit services provided by the external
auditors. It also makes recommendations to the Board
on the appointment or re-appointment of the external
auditors. In addition, the Audit Committee reviews and
approves the SingTel Internal Audit Charter to ensure the
adequacy of the internal audit function. At the same time,
it ensures that the internal audit function is adequately
resourced and has appropriate standing within SingTel.
During the financial year, the Audit Committee reviewed the
Management and SingTel Internal Audit’s assessment of
fraud risk and held discussions with the external auditors,
and was satisfied with the processes put in place to mitigate
fraud risk exposure in the Group. The Audit Committee
also reviewed and was satisfied with the whistle-blower
instituted by the Group through which
arrangements
staff may, in confidence, raise concerns about possible
improprieties in matters of financial reporting or other
matters.
The Audit Committee met four times during the financial
year. At these meetings, the Group CEO, CEO (Singapore),
CEO (International), CEO (Optus), Group CFO, Group
Financial Controller, CFO (Singapore), CFO (Optus) and
Vice President (Audit) were also in attendance. During the
financial year, the Audit Committee reviewed and approved
the quarterly financial statements prior to recommending
their release to the Board, as applicable. It reviewed the
results of audits performed by SingTel Internal Audit
based on the approved audit plan, significant litigation
and fraud investigations, SingTel’s register of interested
person transactions and non-audit services rendered by
the external auditors. The Audit Committee also met with
the internal and external auditors, without the presence of
Management, during the financial year.
Compensation Committee
The Compensation Committee comprises four Directors,
all of whom are non-executive and independent. The
Committee may have access to expert advice inside and/
or outside SingTel.
The main responsibilities of the Compensation Committee
are to approve the Group’s policies on employment terms,
promotion, remuneration and benefits for employees of
all grades, and to administer and review any performance
share plan or other incentive schemes of SingTel.
The Compensation Committee is responsible for the
appointment and promotion of Senior Management and
Top Management who are direct reports to the Group CEO.
It is also responsible for approving the remuneration of the
Group CFO and Senior Management. For the Group CEO
and CEO level, the Compensation Committee proposes the
remuneration package for the Board’s approval. Policies
and guidelines for Directors’ fees are also determined by
the Compensation Committee for the Board’s endorsement.
The Group CEO, who is not a member of the Compensation
Committee, may attend meetings of the Committee but does
not attend discussions relating to her own performance
and remuneration.
SingTel’s remuneration policy and remuneration
for
Directors and Senior Management are discussed in this
report from pages 69 to 74.
Corporate Governance and Nominations Committee
The Corporate Governance and Nominations Committee
must comprise at least three Directors, the majority of
whom, including the chairman, must be independent. In
line with the 2005 Code, the chairman of the Committee,
64 singapore telecommunications limited and suBsidiarY companies
CORPORATE GOVERNANCE
Mr Kaikhushru Shiavax Nargolwala, is not a substantial
shareholder of SingTel, nor is he directly associated with
any substantial shareholder of SingTel.
The main functions of the Corporate Governance and
Nominations Committee are outlined in the commentaries
on ‘Board Composition and Balance’, ‘Board Membership’
and ‘Board Performance’ from pages 60 to 62. The
Committee is also responsible for the development and
review of SingTel’s corporate governance principles
and practices, taking into account relevant local and
international developments in the area of corporate
governance.
Optus Advisory Committee
The Optus Advisory Committee comprises at least three
Directors, the majority of whom, including the chairman,
are
independent. The Committee reviews strategic
business issues relating to the Australian business.
Management Committee
In addition to the five Board Committees, SingTel has
a Management Committee that comprises the Group
CEO, CEO (Singapore), CEO (International), CEO (Optus),
Group CFO, Group Chief Information Officer, Group
Chief Technology Officer and Group Director (Human
Resource).
The Management Committee meets every week to
review and direct management on operational policies
and activities.
ACCOuNTABIlITy ANd AudIT
Accountability
importance of providing the
SingTel recognises the
Board with accurate and relevant information on a timely
basis. Hence, Board members receive monthly financial
and business reports from SingTel’s Management. Such
reports compare SingTel’s actual performance against
the budget, and highlight key business indicators and
major issues that are relevant to SingTel’s performance,
position and prospects.
For the financial year ended 31 March 2009, SingTel’s
Group CEO and Group CFO have provided assurance to the
Board on the integrity of SingTel’s financial statements
and on SingTel’s risk management, compliance and
internal control systems. The certification covers SingTel
and the subsidiaries that we control. The Board provides
a negative assurance confirmation for interim financial
statements, which is supported by a negative assurance
statement from the Group CEO and Group CFO, in line
with stock exchange requirements.
Internal Audit
SingTel Internal Audit comprises a team of 49 staff
members, including the Vice President (Audit) who reports
to the Audit Committee functionally and to the Group CEO
administratively. SingTel Internal Audit is a member of the
Singapore chapter of the Institute of Internal Auditors (“IIA”)
and adopts the International Standards for the Professional
Practice of Internal Auditing (“the IIA Standards”) laid down
in the International Professional Practices Framework
issued by the IIA. SingTel Internal Audit continues to meet
or exceed the IIA Standards in all key aspects.
SingTel Internal Audit adopts a risk-based approach
in formulating the annual audit plan which aligns its
activities to the key risks across the Group. This plan
is reviewed and approved by the Audit Committee.
The reviews performed by SingTel Internal Audit are
aimed at assisting the Board in promoting sound risk
management and good corporate governance, through
assessing the design and operating effectiveness of
controls that govern key business processes and risks
identified in the overall risk framework of the Group.
SingTel Internal Audit’s reviews also focus on compliance
with SingTel’s policies, procedures and regulatory
responsibilities, performed in the context of financial
and operational, revenue assurance and information
systems reviews. SingTel Internal Audit also works with
the internal audit functions of SingTel’s regional mobile
associates to promote joint reviews and the sharing of
knowledge and/or internal audit practices.
internal audits are performed
To ensure that the
effectively, SingTel Internal Audit recruits and employs
suitably qualified professional staff with the requisite
skillsets and experience. To ensure their technical
knowledge remains current and relevant, SingTel Internal
Audit provides training and development opportunities
for its staff.
singtel annual report 2008 / 2009 65
CORPORATE GOVERNANCE
External Auditors
The Board is responsible for the initial appointment
of external auditors. Shareholders then approve the
appointment at SingTel’s AGM. The external auditors
hold office until their removal or resignation. The Audit
Committee assesses the external auditors based on
factors such as the performance and quality of their audit
and the independence of the auditors, and recommends
their re-appointment to the Board. Pursuant to the
requirements of the SGX, an audit partner may only be in
charge of a maximum of five consecutive annual audits
and may then return after two years. The current Deloitte
& Touche LLP audit partner for SingTel was appointed
with effect from the financial year ended 31 March 2007.
In order to maintain the independence of the external
auditors, SingTel has developed policies regarding the
type of non-audit services that the external auditors can
provide to the SingTel Group and the related approval
processes. The Audit Committee has also reviewed the
non-audit services provided by the external auditors during
the financial year and the fees paid for such services.
The Audit Committee is satisfied that the independence
of the external auditors has not been impaired by the
provision of those services. The external auditors have
also provided a confirmation of their independence to the
Audit Committee.
Risk Management
The identification and management of risk reduces the
uncertainty associated with the execution of our business
strategies and allows the Group to maximise opportunities
that may arise.
Risk arises in many forms and can have positive or
negative impacts on the Group’s ability to achieve its
stated objectives. Risk has the potential to impact the
reputation, regulatory, operational, human resources and
financial performance of the Group and thus our ability to
meet our stated objectives.
The Group’s philosophy and approach in effective risk
management is underpinned by three key principles as
follows:
• Culture. We seek to build a strong risk management
and control culture by setting the appropriate tone at
the top, promoting awareness, ownership and proactive
management of key risks and promoting prudent risk
taking. In short, we seek to promote a risk-smart
workforce across the Group.
• Structure. We seek to put in place an appropriate
organisational structure that promotes good corporate
governance, provides for proper segregation of duties,
defines clearly risk taking responsibility and authority,
and promotes ownership and accountability for risk
taking.
for effective
• Process. We seek to implement robust processes and
identification, quantification,
systems
monitoring and controls of risk. We seek to improve
our risk management and internal control policies and
procedures on an on-going basis to ensure that they
remain sound and relevant by benchmarking against
global best practices.
On the above principles, the Group undertakes a continuous
process of risk identification, monitoring, management and
reporting of risks throughout the organisation, to provide
assurance to the Board and relevant stakeholders. The
effectiveness of risk management policies and processes is
reviewed on a regular basis and, where necessary, improved.
Furthermore, the risk management processes facilitate
alignment of the Group’s strategy and annual operating plan
with the management of key risks.
The Board has overall responsibility for the oversight of
material risks in the Group’s business. The FIRC assists the
Board in the oversight of the Group’s risk profile and policies,
effectiveness of the Group’s risk management system
including the identification and management of significant
risks and reports to the Board on material matters, findings
and recommendations pertaining to risk management.
The Audit Committee provides oversight of the financial
reporting risk and the adequacy and effectiveness of the
Group’s internal control and compliance systems.
66 singapore telecommunications limited and suBsidiarY companies
CORPORATE GOVERNANCE
The Board has approved a Group Risk Framework for
the identification of key risks within the business. This
framework defines 25 categories of risks ranging from
environmental, operational and management decision
making risks. The Group adopts the Committee of
Sponsoring Organisations of the Treadway Commission
(COSO) Model and the Australia / New Zealand Risk
Management Standard (AS/NZ 4360) as the best practice
benchmarks for assessing the soundness of its financial
reporting, and the efficiency and effectiveness of its risk
management, internal control and compliance systems.
The identification and management of risk is delegated to
management. Management is responsible for the effective
implementation of risk management strategy, policies and
processes to facilitate the achievement of business plans
and goals. The Risk Management Committee, comprising
relevant members from the Senior Management team,
is responsible for setting the direction of corporate risk
management and monitoring the implementation of risk
management policies and procedures including the adequacy
of the Group’s insurance programme. The Risk Management
Committee reports to the FIRC on a regular basis.
Risk assessment and mitigation strategy is an integral
part of the Group’s annual business planning and
budgeting process. The key risk management activities
also include scenario planning, business continuity /
disaster recovery management and crisis planning and
management. Close monitoring and control processes,
including the establishment of appropriate key risk
indicators and key performance indicators, are put
in place to ensure that risk profiles managed are
within policy limits. The Group has in place a formal
programme of risk and control self assessment whereby
line personnel are involved in the on-going assessment
and improvement of risk management and controls in
selected areas. Additionally, external consultants are
engaged from time to time to review the Group’s risk
management framework and processes.
The Group’s Internal Audit function carries out reviews and
internal control advisory activities which are aligned to the
key risks in the Group’s business to provide independent
assurance to the Audit Committee on the adequacy and
effectiveness of the risk management, financial reporting
processes and internal control and compliance systems.
In order to provide assurance to the Board, via the FIRC,
the CEOs of the business groups submit to the FIRC on a
semi-annual basis, a report on the key risks and mitigation
strategies for their respective areas. On an annual basis, the
Group CEO and Group CFO provide a written certification to
the Board confirming the soundness of financial reporting,
and the efficiency and effectiveness of the risk management,
internal control and compliance systems.
The systems that are in place are intended to provide
reasonable but not absolute assurance against material
misstatements or loss, as well as to ensure the safeguarding
of assets, the maintenance of proper accounting records,
the reliability of financial information, compliance with
applicable legislation, regulation and best practice, and the
identification and management of business risk.
In the course of their statutory audit, SingTel’s external
auditors carry out a review of the Group’s material
internal controls to the extent of the scope as laid out
in their audit plan. Any material non-compliance and
internal control weaknesses, together with the external
auditors’ recommendations to address them, are reported
to the Audit Committee. SingTel’s Management, with the
assistance of SingTel Internal Audit, follows up on the
external auditors’ recommendations as part of their role in
reviewing the Group’s system of internal controls.
Based on the work performed by SingTel Internal Audit
during the financial year and the review undertaken by the
external auditors, the Audit Committee is of the opinion
that there are adequate internal controls in place within
the Group.
Communication with Shareholders
SingTel is committed to maintaining high standards of
disclosure and corporate transparency. We adopt an open
and non-discriminatory approach in our communication
with shareholders and the investment community. We
aim to provide relevant and timely information - regarding
the Group’s performance, progress and prospects - to
assist shareholders and investors in their investment
decisions.
singtel annual report 2008 / 2009 67
CORPORATE GOVERNANCE
Quarterly financial results are reported within six weeks
after the end of each quarter. These results contain detailed
financial disclosures and analyses of key value drivers and
metrics for each business. In addition, comprehensive
guidance for each business is provided at the start of each
financial year, and, reflecting market conditions, is affirmed
or updated at subsequent quarterly results. Audio webcasts
of the Group CEO’s presentations and conference calls are
available on SingTel’s website. To make it convenient for our
shareholders and the investment community, transcripts
of the conference calls and 5-year financial summaries are
also posted.
The Investor Relations’ website contains a wealth of
investor-related information on SingTel which serves as
an important resource for investors. Aside from housing
the quarterly results materials, it is a one-stop source of
investor presentations, stock exchange announcements,
annual reports, events calendar, factsheets, financial
summaries, AGM and dividend
information. All new
material information is posted on the website following
its filing with the SGX and ASX, to ensure fair and equal
dissemination of information.
SingTel believes in the importance of regular interaction
with investors and shareholders. Senior Management
actively participates in one-on-one meetings, roadshows,
investor events organised by the
conferences and
Investor Relations Department. In the financial year
ended 31 March 2009, SingTel met with more than 800
investors in over 300 meetings. Furthermore, more than
400 shareholders and their proxies had the opportunity
to interact, question, clarify and relay their concerns and
feedback, not only with the Senior Management, but with
the Chairman and the Directors during the AGM.
SingTel
fully supports and encourages shareholder
participation at AGMs. SingTel sends out the notice of the
meeting a month ahead, providing ample time for it to be
received by shareholders. The AGM is held at a convenient
central location with easy access to public transportation. A
registered shareholder who is unable to attend may choose
to appoint a proxy to attend and vote on his behalf.
At the AGM, the Group CEO delivers a presentation to
update shareholders on the progress of the Company
over the past year. The Directors and Senior Management
are in attendance during the AGM to address queries
and concerns about SingTel. The proxy voting results are
presented to the audience during the voting process and are
filed with the stock exchanges. Voting in absentia by mail,
facsimile, or email is currently not permitted to ensure
proper authentication of the identity of shareholders and
their voting intent.
SingTel places great importance on communicating with
and reaching out to our shareholders and the investment
community. We are pleased that our proactive efforts
have been acknowledged at the Singapore Corporate
Awards and recognised by leading financial journals and
organisations such as IR Magazine, Finance Asia and
Thomson Reuters during the year.
Securities Trading
SingTel’s securities trading policy states that Directors
and officers of the Group should not deal in SingTel
shares during the period commencing two weeks before
the announcement of SingTel’s financial statements for
each of the first three quarters of the financial year, and
during the period commencing one month before the
announcement of the financial statements for the financial
year, and ending on the date of the announcement of the
relevant results. The policy also discourages trading on
short-term considerations.
Continuous Disclosure
There are formal policies and procedures to ensure that
SingTel complies with its disclosure obligations under
the listing rules of the SGX and ASX. A Market Disclosure
Committee is responsible for SingTel’s Market Disclosure
Policy. The policy contains guidelines and procedures
for internal reporting and decision-making with regard
to the disclosure of material information. The Company
Secretary manages the policy.
Material Contracts
There are no material contracts entered into by SingTel
or any of its subsidiaries that involve the interests of the
Group CEO, any Director, or the controlling shareholder,
Temasek Holdings (Private) Limited.
68 singapore telecommunications limited and suBsidiarY companies
CORPORATE GOVERNANCE
Codes Of Conduct And Practice
SingTel has a code of internal corporate governance
practices, policy statements and standards, as described
in this report, and makes this code available to Board
members as well as employees of the Group. The processes
and standards in the code are intended to enhance investor
confidence and rapport, and to ensure that decision-making
is properly carried out in the best interests of the Group.
The code is reviewed from time to time and updated to
reflect changes to the existing systems or the environment
in which the Group operates.
SingTel also has a code of conduct that applies to all
employees. The code sets out principles to guide employees
in carrying out their duties and responsibilities to the
highest standards of personal and corporate integrity when
dealing with SingTel, its competitors, customers, suppliers
and the community. The code of conduct covers areas such
as conduct in the workplace, business conduct, protection
of SingTel’s assets, confidentiality, non-solicitation of
interest and
customers and employees, conflicts of
corporate opportunities. The code is posted on SingTel’s
internal website. SingTel’s staff manual maps out SingTel’s
policies and standards by which employees are expected
to conduct themselves in the course of their employment
with SingTel. The manual also contains procedures for
the investigation of reports of misconduct or unethical
practices and for taking appropriate remedial actions.
SingTel has established an escalation process so that the
Board of Directors, Senior Management, and internal and
external auditors are kept informed of corporate crises in a
timely manner, according to their severity. Such crises may
include violations of the code of conduct and/or applicable
laws and regulations, as well as loss events which have
or are expected to have a significant impact, financial or
otherwise, on the Group’s business and operations.
Whistle-Blower Policy
The Group is committed to a high standard of ethical
conduct and adopts a zero tolerance approach to
fraud. SingTel undertakes to investigate complaints of
suspected fraud in an objective manner and has put in
place a whistle-blower policy and procedures which
provide employees with well-defined and accessible
channels within the Group, including a direct channel
to SingTel Internal Audit and a whistle-blower hotline
service independently managed by an external service
provider, for reporting suspected fraud, corruption,
dishonest practices or other similar matters. The policy
aims to encourage the reporting of such matters in good
faith, with the confidence that employees making such
reports will be treated fairly and, to the extent possible,
protected from reprisal. On an ongoing basis, the whistle-
blower policy is covered during staff training as part of
the Group’s efforts to promote fraud control awareness.
REMUNERATION
The broad principles that guide the Compensation
Committee
fees, benefits,
its administration of
remuneration and incentives for the Board of Directors and
Senior Management are set out below.
in
Directors’ Fees and Incentives
SingTel’s Group CEO is an Executive Director and is
therefore remunerated as part of Senior Management. She
does not receive Directors’ fees.
The fees for non-executive Directors for the financial year
ended 31 March 2009 comprised a basic retainer fee,
additional fees for appointment to Board Committees,
attendance fees for ad hoc Board meetings, and a travel
allowance for Directors who were required to travel out of
their country or city of residence to attend Board meetings
and Board Committee meetings which did not coincide
with Board meetings. The fees were benchmarked against
fees paid by other comparable telecommunications
companies. There are no retirement benefit schemes
in place for non-executive Directors. The framework for
determining non-executive Directors’ fees is as follows:
Basic Retainer Fee
Board chairman
Director
Fee for Appointment to
Audit Committee
S$180,000 per annum
S$ 90,000 per annum
Committee chairman
S$50,000 per annum
Committee member
S$35,000 per annum
singtel annual report 2008 / 2009 69
CORPORATE GOVERNANCE
Fee for Appointment to Any
Other Board Committee
Committee chairman
S$35,000 per annum
Committee member
S$25,000 per annum
Attendance Fee per Ad Hoc
Board Meeting
S$2,000
Travel Allowance for Board
Meetings and Board Committee
Meetings which do not coincide
with Board Meetings (per day
of travel required to attend
meeting)
S$3,000
Directors’ Remuneration for the Financial Year Ended 31 March 2009
Name of Director
Chumpol NaLamlieng
Graham John Bradley
Chua Sock Koong (5)
Fang Ai Lian (7)
Heng Swee Keat (8)
Dominic Chiu Fai Ho
Simon Israel (9)
John Powell Morschel
Kaikhushru Shiavax Nargolwala
Deepak S Parekh
Nicky Tan Ng Kuang
Professor Tommy Koh (8)(10)
Fixed
Component (1)
(S$)
Variable
Component (2)
(S$)
Provident
Fund (3)
(S$)
Benefits (4)
(S$)
-
-
-
-
-
-
-
-
Directors’
Fees (6)
(S$)
279,000
194,000
Total
(S$)
279,000
194,000
1,350,000
1,950,000
8,038
71,262
-
3,379,300
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
91,075
142,000
167,263
160,000
212,769
176,000
145,000
182,736
39,650
91,075
142,000
167,263
160,000
212,769
176,000
145,000
182,736
39,650
Notes:
(1) Fixed component refers to base salary and annual Wage supplement earned for the year ended 31 march 2009.
(2) Variable component refers to cash bonus awarded for performance for the year ended 31 march 2009.
(3) provident Fund represents payments in respect of company statutory contributions to the singapore central provident Fund.
(4) Benefits are stated on the basis of direct costs to the company, and include car benefits and other non-cash benefits such as medical
cover and club membership.
(5) in addition to the total remuneration above, long-term incentive in the form of performance share awards under the singtel performance
share plan was granted to ms chua on 3 June 2009 for performance for the year ended 31 march 2009. she received the general award
(“ga”) and the senior management award (“sma”) based on fair values of s$1.301 and s$1.430 per share respectively. the fair values
of performance share awards granted to her are s$1,200,000 for ga and s$900,000 for sma. the vesting criteria for the performance
share awards are detailed on page 72-73.
(6) directors’ Fees are paid on a half-yearly basis in arrears.
(7) appointed to the Board on 7 august 2008.
(8) Fees for public sector directors are payable to government agencies.
(9) Fees are payable to mr simon israel’s employer.
(10) retired as a director following the conclusion of the agm held on 25 July 2008.
no employee of the group who is an immediate family member of a director was paid remuneration that exceeded s$150,000 during the financial
year ended 31 march 2009.
70 singapore telecommunications limited and suBsidiarY companies
CORPORATE GOVERNANCE
The proposed framework for Directors’ fees for the
financial year ending 31 March 2010 is the same as that
for the financial year ended 31 March 2009.
No Director decides his own fees. Directors’ fees are
recommended by the Compensation Committee and are
submitted for endorsement by the Board. Directors’ fees
are subject to the approval of shareholders at the AGM.
Until the financial year ended 31 March 2007, the
Company’s practice was to seek shareholders’ approval
for the payment of Directors’ fees at the AGM held after
the end of the financial year. As a result, Directors were
only paid for services rendered 17 months after the
commencement of the relevant financial year. In order that
the Company is able to attract the right calibre of directors
to contribute effectively to the Board, in addition to the right
level of remuneration, timely payment to directors is also
necessary. Accordingly, commencing from the 2007 AGM,
SingTel now seeks shareholders’ approval for Directors’
fees for the current financial year so that Directors’ fees
can be paid on a half-yearly basis in arrears for that year.
Directors are encouraged to acquire SingTel shares each
year from the open market to the extent of one-third of
their fees until they hold the equivalent of one year’s
fees in shares, and to continue to hold the equivalent of
one year’s fees in shares while they remain on the Board.
Directors who were previously eligible for applicable share
option schemes are encouraged to hold, beyond the vesting
period, any shares acquired by the exercise of share options
under those schemes.
Remuneration for Executive Director and Senior Management
The Compensation Committee recognises that the Group
operates in a regional environment. To remain competitive,
the Compensation Committee has established the following
objectives for its remuneration policy:
•
To align the interests of Senior Management with those
of shareholders;
• To attract, motivate and retain high-performing
executives, which is necessary to sustain SingTel as a
leading communications provider in Asia Pacific;
To achieve Business and People targets; and
To be locally focused and competitive in each of the
relevant employment markets.
•
•
The Compensation Committee reviews remuneration
through a process that considers Group, company,
business unit and
individual performance, relevant
comparative remuneration in the market and, where
required, feedback from independent external advisors
on human resource management and reward and benefit
policies. The performance evaluations for the executive
Director and Senior Management have been conducted
for the financial year in accordance with the above
considerations.
Remuneration Components
The remuneration structure for Senior Management
comprises five components – fixed component, variable
component, provident/superannuation fund, benefits and
long-term incentives. The structure is designed such
that the percentage of the variable component of Senior
Management’s remuneration increases as they move up the
organisation. The variable component is also dependent on
the actual achievement of corporate targets and individual
performance objectives. The cost and value of the
remuneration components are considered as a whole and
are designed to strike a balance between linking rewards
to short-term and long-term objectives, and maintaining
competitiveness with market practice.
In line with market practice, SingTel may, under special
for
circumstances, compensate Senior Management
their past contributions when their services are no longer
needed; for example, due to redundancies arising from
reorganisation or restructuring of the Group.
• Fixed Component
The base salary should fall within the mid-range of
what is paid by comparable companies in relevant
employment markets for similar jobs, but may vary
with responsibilities, performance, skills and the
experience that the individual brings to the role. For
executives who exceed their performance objectives,
the aggregate of base salary and variable bonus should
fall within the upper range of what is paid by comparable
companies. To ensure that the remuneration of Senior
Management is consistent with these levels, the
Compensation Committee benchmarks remuneration
components against those of comparable companies.
singtel annual report 2008 / 2009 71
CORPORATE GOVERNANCE
In Australia, consistent with local market practice,
executives may opt for a portion of their salaries to
be received in tax-effective benefits-in-kind, such as
superannuation contributions and motor vehicles, while
maintaining the same overall cost to the company.
• Long-Term Incentives
Long-term Incentives are provisionally allocated or
granted to Senior Management for performance for
the year ended 31 March 2009.
• Variable Component
Variable bonus payouts are based on actual
achievement against Group, company, business unit
and
individual performance objectives. Although
the performance objectives are different for each
executive, they are assessed on the same principles
across two broad categories of targets: Business
and People. Business targets comprise financials,
strategy, customer and business processes. People
targets comprise leadership competencies, core
values, people development and staff engagement.
In addition, the executives are assessed on teamwork
and collaboration across the Group. The performance
objectives are reviewed and adjusted at
the
commencement of each financial year to ensure that
the objectives contribute to the overall financial and
operational goals of the Group.
Individual bonus payouts are
linked by way of
performance indicators and scorecards to the areas
mentioned above. The Compensation Committee
assesses the extent to which the performance
objectives have been achieved and approves the bonus
pool for distribution to executives.
• Provident/Superannuation Fund
This component is made up of SingTel’s contributions
towards the Singapore Central Provident Fund or the
Optus Superannuation Fund or any other chosen fund,
as applicable.
• Benefits
(“Share Plan”), as
For long-term incentives granted under the SingTel
Performance Share Plan
in
past years, two categories of awards are made at
the discretion of the Compensation Committee –
General Awards for eligible staff at Executive and
higher grades, and Senior Management Awards for
eligible Senior Management staff. They are made with
reference to the desired total remuneration target
benchmarked against comparable companies in the
market. The number of performance shares awarded
is determined using the valuation (of the shares)
based on a Monte-Carlo simulation. The final number
of performance shares vested to the recipient will
depend on the level of achievement of targets set over
a three-year period.
The vesting criteria for both the General Award and the
Senior Management Award for 2009 are similar to the
corresponding criteria adopted for awards made under
the Share Plan since 2004. The vesting for half (50 per
cent) of the General Award granted to an employee will
be based on the Group’s Total Shareholders’ Return
(“TSR”) relative to the component stocks in the MSCI
Asia Pacific Telecommunications Index (the “Index”)
over the three-year performance period from 1 April
2009 to 31 March 2012. No performance shares will
vest if the TSR, as determined by the Compensation
Committee at its sole discretion, is below the 50th
percentile as measured against that of other component
stocks in the Index. The number of performance shares
to be vested will be determined in accordance with the
table on page 73.
SingTel provides benefits consistent with local market
practice, such as in-company medical scheme, club
membership, employee discounts and other benefits
that may incur Australian Fringe Benefits Tax, where
applicable. Participation in such benefits is dependent
on the country in which the executive is located. For
expatriates located away from home, additional benefits
such as accommodation, children’s education and tax
equalisation may be provided.
The remaining tranche (50 per cent) of the General
Award will be subject to the TSR performance
measured against the Index (as opposed to individual
component stocks) over the performance period from
1 April 2009 to 31 March 2012. For the 2009 General
Award going forward, a technical refinement has been
made to the formula used to compute SingTel’s TSR
performance against the Index. This refinement allows
better differentiation between various degrees of over-
72 singapore telecommunications limited and suBsidiarY companies
CORPORATE GOVERNANCE
Total Shareholders’ Return Percentile Ranking Criteria for 50 per cent of the 2009 General Award
TSR
80th to 100th percentile
70th to 79th percentile
60th to 69th percentile
50th to 59th percentile
50th percentile
Percentage of Performance Shares to be Vested
100%
90%
70%
50%
0%
and under- achievement. With this change in formula,
a new vesting schedule has been developed to provide
vesting level results similar to what would have been
derived under the old formula and vesting schedule:
• If SingTel Group’s TSR is at or exceeds 8 per cent
that of the Index, 100 per cent of the shares under
this tranche will vest.
• If SingTel Group’s TSR is -2 per cent or more but
less than 8 per cent that of the Index, the percentage
of the shares under this tranche that will vest will
vary accordingly.
• If SingTel Group’s TSR is less than -2 per cent that
of the Index, none of the shares under this tranche
will vest.
• Return on Invested Capital (“ROIC”) Criterion
As in the past year, ROIC improvements over the
performance period must exceed a minimum threshold
level for vesting of the Senior Management Award as
follows:
• Where the ROIC improvement target is met or
exceeded, subject to the vesting of the General
Award, 100 per cent of the performance shares will
vest.
• Where 75 per cent or more but less than 100 per
cent of the ROIC improvement target is met, the
performance shares will, subject to the vesting
of the General Award, vest to the same extent in
percentage terms as the percentage to which the
target has been met.
For the 2009 Senior Management Award, vesting will take
place if the following criteria are met:
• Where less than 75 per cent of the ROIC improvement
target is met, no performance shares will vest.
• Vesting of the General Award
There must be vesting of the 2009 General Award before
the 2009 Senior Management Award can vest. This
will strengthen the alignment of interests of Senior
Management with those of other executives. This
criterion was also adopted for the Senior Management
Awards from 2004 to 2008.
Details of the performance shares granted under the Share
Plan during the financial year are set out in the financial
statements under the ‘Directors’ Report’.
SingTel employees are prohibited from entering into
transactions
in associated products which limit the
economic risk of participating in unvested entitlements
under SingTel’s equity-based remuneration schemes.
singtel annual report 2008 / 2009 73
CORPORATE GOVERNANCE
Remuneration of Senior Management
The aggregate compensation paid to or accrued to the five top-earning key executives for the financial year ended 31 March 2009
is set out in the table below:
Name of Senior Executive
The following are in alphabetical order:
Hui Weng Cheong (6)
Deputy President
Advanced Info Service
Allen Lew
CEO (Singapore)
SingTel
Lim Chuan Poh
CEO (International)
SingTel
Jeann Low (7)
Group CFO
SingTel
Paul O’Sullivan (8)
CEO Optus
Fixed
Component (1)
(S$)
Variable
Component (2)
(S$)
Provident/
Superannuation
Fund (3)
(S$)
Benefits (4)
(S$)
Total (5)
(S$)
346,978
320,000
8,039
779,152
1,454,169
895,000
1,500,000
8,038
60,985
2,464,023
765,000
1,000,000
8,038
58,364
1,831,402
459,000
575,000
11,099
1,200,369
2,245,468
1,219,914
941,284
199,638
73,525
2,434,361
Notes:
(1) Fixed Component refers to base salary and Annual Wage Supplement (if applicable) earned for the year ended 31 March 2009.
(2) Variable Component refers to cash bonus awarded for performance for the year ended 31 March 2009.
(3) Provident Fund in Singapore represents payments in respect of company statutory contributions to the Singapore Central Provident
Fund. Superannuation Fund in Australia represents payments in respect of the superannuation guarantee levy and additional company
contributions to the superannuation scheme. Any contributions made by an individual may be salary sacrificed, and are part of the
fixed component.
(4) Benefits are stated on the basis of direct costs to the company, and include overseas assignment benefits, tax equalisation, car
benefits and other non-cash benefits such as medical cover, club membership and Australia Fringe Benefits Tax, where applicable.
(5) In addition to the total remuneration above, long-term incentives are provisionally allocated or granted to Senior Management for
performance for the year ended 31 March 2009.
The Senior Management who were granted long-term incentives in the form of performance share awards under the SingTel
Performance Share Plan on 3 June 2009, received the General Award (“GA”) and the Senior Management Award (“SMA”) based on fair
values of S$1.301 and S$1.430 per share respectively. The vesting criteria for the performance share awards are detailed on page 72-73.
The fair values of performance share awards granted to the following Senior Management are:
- Hui Weng Cheong: GA of S$200,000 and SMA of S$150,000
- Allen Lew: GA of S$971,429 and SMA of S$728,571
- Lim Chuan Poh: GA of S$628,571 and SMA of S$471,429
Long-term incentives are provisionally allocated but not yet granted to the following Senior Management. The form and timing of the
grant will be decided pending review of the long-term incentive plan in Australia:
- Paul O’Sullivan: up to S$1,539,000
- Jeann Low: up to S$650,000
(6) Mr Hui Weng Cheong is based in Thailand. He is seconded to Advanced Info Service on expatriate terms including tax equalisation
benefits.
(7) Ms Jeann Low was based full-time in Australia till 31 August 2008. She was seconded to Optus on expatriate terms including tax
equalisation benefits. An award of up to 360,577 performance shares (General Award) was given at the point she assumed the position
of Group CFO.
(8) Mr Paul O’Sullivan is based in Australia and he is remunerated in Australian dollars. The exchange rate used to convert his
remuneration to Singapore dollars is S$1.14 : A$1.00
74 singapore telecommunications limited and suBsidiarY companies
FINANCIAL STATEMENTS
76
84
85
86
87
89
92
94
95
Directors’ Report
Statement of Directors
Independent Auditors’ Report
Consolidated Income Statement
Balance Sheets
Statements of Changes in Equity
Consolidated Cash Flow Statement
Notes to the Consolidated Cash Flow Statement
Notes to the Financial Statements
DIRECTORS’ REPORT
For the financial year ended 31 March 2009
The Directors present their report to the members together with the audited consolidated financial statements of the
Group and the balance sheet and statement of changes in equity of the Company (or “SingTel”) for the financial year ended
31 March 2009.
1.
D IRECTORS
The Directors of the Company in office at the date of this report are -
Chumpol NaLamlieng (Chairman)
Chua Sock Koong (Group Chief Executive Officer)
Graham John Bradley
Fang Ai Lian (appointed on 7 August 2008)
Heng Swee Keat
Dominic Chiu Fai Ho
Simon Israel
John Powell Morschel
Kaikhushru Shiavax Nargolwala
Deepak S Parekh
Nicky Tan Ng Kuang
Professor Tommy Koh, who served during the year, retired following the conclusion of the Annual General Meeting
held on 25 July 2008.
2.
ARRANGEMENTS TO ENABLE DIRECTO RS TO ACQ U IRE BEN EF ITS BY M EAN S O F THE ACQ U ISITION
OF SHARES AND DEBENTURES
Neither at the end of nor at any time during the financial year was the Company a party to any arrangement whose object
is to enable the Directors of the Company to acquire benefits by means of the acquisition of shares in, or debentures
of, the Company or any other body corporate, except for share options granted under the Singapore Telecom Share
Option Scheme 1999 (“1999 Scheme”), and performance shares granted under the SingTel Performance Share Plan
(“Share Plan 2004”).
76 singapore telecommunications limited and suBsidiarY companies
DIRECTORS’ REPORT
For the financial year ended 31 March 2009
3.
DIRECTORS’ INTERESTS IN S HA R ES A ND D E BE NT UR E S
The interests of the Directors holding office at the end of the financial year in the share capital of the Company and
related corporations according to the register of Directors’ shareholdings kept by the Company under Section 164 of
the Singapore Companies Act were as follows -
Holdings registered in the name of
Director or nominee
Holdings in which Director is deemed to
have an interest
At 31 Mar 09
At 1 Apr 08
or date of
appointment,
if later
At 31 Mar 09
At 1 Apr 08
or date of
appointment,
if later
Singapore Telecommunications Limited
(Ordinary shares)
Chumpol NaLamlieng
Chua Sock Koong (1)
Graham John Bradley
Fang Ai Lian
Heng Swee Keat
Dominic Chiu Fai Ho
Simon Israel
John Powell Morschel
Kaikhushru Shiavax Nargolwala
Deepak S Parekh
Nicky Tan Ng Kuang
199,500
2,359,757
40,000
91,930
1,330
-
179,820
55,780
148,000
-
150,000
199,500
1,706,800
88,220
91,930
1,330
-
179,820
55,780
100,000
-
150,000
-
16,278,933
-
-
-
-
1,360
-
-
-
-
-
18,277,775
-
-
-
-
1,360
-
-
-
-
(Options to purchase ordinary shares)
Chua Sock Koong (2)
1,584,000
1,584,000
Singapore Airlines Limited
(Ordinary shares)
Chua Sock Koong
Simon Israel
2,000
9,000
2,000
9,000
SP AusNet
(stapled securities comprising one share in each of SP
Australia Networks (Transmission) Ltd and SP Australia
Networks (Distribution) Ltd and a unit in SP Australia
Networks (Finance) Trust)
Nicky Tan Ng Kuang
600,000
600,000
Singapore Technologies Engineering Limited
(Ordinary shares)
Fang Ai Lian
50,000
50,000
-
-
-
-
-
-
-
-
-
-
singtel annual report 2008 / 2009 77
DIRECTORS’ REPORT
For the financial year ended 31 March 2009
3.
DIRECTORS’ INTERESTS IN S HA R ES A N D D E BE NT UR E S (con t’ d )
Holdings registered in the name of
Director or nominee
Holdings in which Director is deemed to
have an interest
At 31 Mar 09
At 1 Apr 08
or date of
appointment,
if later
At 31 Mar 09
At 1 Apr 08
or date of
appointment,
if later
StarHub Ltd
(Ordinary shares)
Kaikhushru Shiavax Nargolwala
37,000
-
-
-
Notes:
(1) Chua Sock Koong’s deemed interest of 16,278,933 shares included -
(a) 13,302,772 ordinary shares in SingTel held by RBC Dexia Trust Services Singapore Limited, the trustee of a trust established
for the purposes of the Share Plan 2004 for the benefit of eligible employees of the Group;
(b) 28,137 ordinary shares held by Ms Chua’s spouse; and
(c) an aggregate of up to 2,948,024 ordinary shares in SingTel awarded to Ms Chua pursuant to the Share Plan 2004, subject to
certain performance criteria being met and other terms and conditions.
(2) At exercise prices of between S$1.41 and S$2.85 per share (1 April 2008: between S$1.41 and S$2.85 per share).
Between the end of the financial year and 21 April 2009, Chua Sock Koong’s deemed interest increased to 27,347,933
shares due to the acquisition by RBC Dexia Trust Services Singapore Limited of an additional 11,069,000 ordinary
shares in SingTel for the benefit of eligible employees in the Group.
Except as disclosed above, there were no changes to any of the above-mentioned interests between the end of the
financial year and 21 April 2009.
4.
DIRECTORS’ CONTRACTU AL BE NE FI T S
Since the end of the previous financial year, no Director has received or become entitled to receive a benefit by reason
of a contract made by the Company or a related corporation with the Director or with a firm of which he is a member,
or with a company in which he has a substantial financial interest except as disclosed in the notes to the financial
statements and in this report.
5.
SHARE OPTIONS AND P ERFO RMAN CE SHA RE S
The Compensation Committee is responsible for administering the share option and performance share plans. At
the date of this report, the members of the Compensation Committee are Chumpol NaLamlieng (Chairman of the
Compensation Committee), Heng Swee Keat, John Powell Morschel, and Deepak S Parekh.
Dominic Chiu Fai Ho was appointed to and ceased to be a member of the Compensation Committee on
7 August 2008 and 13 May 2009 respectively.
78 singapore telecommunications limited and suBsidiarY companies
DIRECTORS’ REPORT
For the financial year ended 31 March 2009
5.1 Share Options
1999 Scheme
Options granted pursuant to the 1999 Scheme are in respect of ordinary shares in SingTel. Options exercised and
cancelled during the financial year, and options outstanding at the end of the financial year under the 1999 Scheme,
were as follows -
Date of grant
Exercise period
Exercise price
Market Price Share Options
For staff and senior management
09.11.99
09.06.00
30.05.01
01.06.01
16.08.01
29.11.01
30.05.02
10.11.00 to 09.11.09
10.06.01 to 09.06.10
31.05.02 to 30.05.11
02.06.02 to 01.06.11
17.08.02 to 16.08.11
30.11.02 to 29.11.11
31.05.03 to 30.05.12
S$2.85
S$2.12
S$1.56
S$1.55
S$1.75
S$1.61
S$1.41
For Group Chief Executive Officer (Chua Sock Koong)
S$2.85
09.11.99
S$2.12
09.06.00
S$1.41
30.05.02
10.11.00 to 09.11.09
10.06.01 to 09.06.10
31.05.03 to 30.05.12
For former Executive Director (Lee Hsien Yang) (1)
09.11.99
09.06.00
10.11.00 to 09.11.09
10.06.01 to 09.06.10
S$2.85
S$2.12
Balance
as at
1 Apr 08
(’000)
Options
exercised
(’000)
Options
cancelled
(’000)
Balance
as at
31 Mar 09
(’000)
2,197
4,006
2,664
30
47
4,347
8,430
21,721
134
750
700
1,584
500
1,500
2,000
(454)
(1,077)
(496)
-
-
(515)
(1,509)
(4,051)
-
-
-
-
(500)
(1,500)
(2,000)
(7)
(49)
(33)
-
-
(59)
(127)
(275)
-
-
-
-
-
-
-
1,736
2,880
2,135
30
47
3,773
6,794
17,395
134
750
700
1,584
-
-
-
Total
25,305
(6,051)
(275)
18,979
Note:
(1) Lee Hsien Yang stepped down as a Director of the Company with effect from 1 April 2007. As approved by the Board, he had up
till 31 March 2009 to exercise the vested share options, which he exercised during the financial year ended 31 March 2009.
The options under the 1999 Scheme do not entitle the holders of the options, by virtue of such holdings, to any right to
participate in any share issue of any other company.
singtel annual report 2008 / 2009 79
DIRECTORS’ REPORT
For the financial year ended 31 March 2009
5. 1 Share Options (cont’d)
Details of the Directors’ share options are set out in the following table -
1999 Scheme
Chumpol NaLamlieng
Chua Sock Koong
Graham John Bradley
Fang Ai Lian
Heng Swee Keat
Dominic Chiu Fai Ho
Simon Israel
John Powell Morschel
Kaikhushru Shiavax Nargolwala
Deepak S Parekh
Nicky Tan Ng Kuang
Professor Tommy Koh (1)
Aggregate Options
Granted since
commencement
of scheme to
31 Mar 09
(’000)
Exercised since
commencement
of scheme to
31 Mar 09
(’000)
Outstanding
as at
31 Mar 09
(’000)
60
4,709
-
-
-
-
-
60
-
-
60
-
4,889
(60)
(3,125)
-
-
-
-
-
(60)
-
-
(60)
-
(3,305)
-
1,584
-
-
-
-
-
-
-
-
-
-
1,584
Note:
(1) Professor Tommy Koh retired as a Director of the Company following the conclusion of the Annual General Meeting held on
25 July 2008.
No options were granted to the Directors during the financial year ended 31 March 2009.
No option has been granted to controlling shareholders of the Company or their associates, and there are no participants
who have received five per cent or more of the total number of options available under the 1999 Scheme.
The 1999 Scheme was suspended with the implementation of the SingTel Executives’ Performance Share Plan (“Share
Plan 2003”) following a review of the remuneration policy across the Group in 2003. Hence no option has been granted
since then. The existing options granted will continue to vest according to the terms and conditions of the 1999
Scheme and the respective grants.
From the commencement of the 1999 Scheme to 31 March 2009, options in respect of an aggregate of 273,767,350
ordinary shares in the Company have been granted to Directors and employees of the Company and its subsidiaries.
80 singapore telecommunications limited and suBsidiarY companies
DIRECTORS’ REPORT
For the financial year ended 31 March 2009
5.2 Performance Shares
Following the review of the remuneration policy across the Group, SingTel implemented the Share Plan 2003 in June
2003 and granted awards to selected employees of the Group under this plan. This plan only allows the purchase and
delivery of existing SingTel shares to participants upon the vesting of the awards.
The Share Plan 2004 was implemented with the approval of shareholders at the Extraordinary General Meeting held
on 29 August 2003. This plan gives the flexibility to either allot and issue and deliver new SingTel shares or purchase
and deliver existing SingTel shares upon the vesting of awards.
Participants will receive fully paid SingTel shares free of charge, the equivalent in cash, or combinations thereof,
provided that certain prescribed performance targets are met within a prescribed performance period. The
performance period for the awards granted is three years. The number of SingTel shares to be allocated to each
participant or category of participants will be determined at the end of the performance period based on the level of
attainment of the performance targets.
From the commencement of the performance share plans to 31 March 2009, awards comprising an aggregate
of 38,548,775 shares and 142,771,743 shares have been granted under the Share Plan 2003 and Share Plan 2004
respectively.
Performance share awards granted, vested and cancelled during the financial year, and share awards outstanding at
the end of the financial year, were as follows -
Date of grant
Performance shares (General Awards)
For staff and senior management
26.05.05
30.11.05
28.02.06
25.05.06
24.08.06
28.11.06
02.03.07
29.05.07
03.09.07
28.11.07
27.02.08
04.06.08
01.09.08
02.12.08
02.03.09
Balance
as at
1 Apr 08
(’000)
Share
awards
granted
(’000)
Share
awards
vested
(’000)
Share
awards
cancelled
(’000)
Balance
as at
31 Mar 09
(’000)
22,088
299
454
28,466
20
30
418
15,663
10
107
98
-
-
-
-
67,653
-
-
-
-
-
-
-
-
-
-
-
13,577
115
925
103
14,720
(19,225)
(247)
(375)
(210)
-
-
-
(52)
-
-
-
-
-
-
-
(20,109)
(2,863)
(52)
(79)
(2,438)
-
-
(378)
(1,447)
-
(8)
-
(927)
-
-
-
(8,192)
-
-
-
25,818
20
30
40
14,164
10
99
98
12,650
115
925
103
54,072
singtel annual report 2008 / 2009 81
DIRECTORS’ REPORT
For the financial year ended 31 March 2009
5. 2 Performance Shares (cont’ d)
Date of grant
Balance
as at
1 Apr 08
(’000)
Share
awards
granted
(’000)
Share
awards
vested
(’000)
Share
awards
cancelled
(’000)
Balance
as at
31 Mar 09
(’000)
For Group Chief Executive Officer (Chua Sock Koong)
26.05.05
28.02.06
25.05.06
29.05.07
04.07.08
336
455
470
592
-
1,853
-
-
-
-
671
671
(278)
(375)
-
-
-
(653)
(58)
(80)
-
-
-
(138)
-
-
470
592
671
1,733
Sub-total
69,506
15,391
(20,762)
(8,330)
55,805
Performance shares (Senior Management Awards)
For senior management
26.05.05
25.05.06
29.05.07
04.06.08
1,223
1,799
1,618
-
4,640
For Group Chief Executive Officer (Chua Sock Koong)
26.05.05
25.05.06
29.05.07
04.06.08
251
323
440
-
1,014
-
-
-
1,737
1,737
-
-
-
453
453
(1,146)
-
-
-
(1,146)
(251)
-
-
-
(251)
(77)
(142)
-
(116)
(335)
-
-
-
-
-
-
1,657
1,618
1,621
4,896
-
323
440
453
1,216
Sub-total
Total
5,654
2,190
(1,397)
(335)
6,112
75,160
17,581
(22,159)
(8,665)
61,917
During the financial year, awards in respect of an aggregate of 22,159,634 shares granted under the Share Plan 2004
were vested. The awards under Share Plan 2004 were satisfied in part by the delivery of existing shares purchased
from the market and in part by the payment of cash in lieu of delivery of shares, as permitted under the Share Plan
2004.
As at 31 March 2009, no participant has been granted options under the 1999 Scheme and/or received shares pursuant
to the vesting of awards granted under the Share Plan 2004 which, in aggregate, represents five per cent or more of
the aggregate of -
(i)
the total number of new shares available under the Share Plan 2004 and the 1999 Scheme collectively; and
(ii) the total number of existing shares purchased for delivery of awards released under the Share Plan 2004.
82 singapore telecommunications limited and suBsidiarY companies
DIRECTORS’ REPORT
For the financial year ended 31 March 2009
6.
AUDIT C OMMITTEE
At the date of this report, the Audit Committee comprises the following members, all of whom are non-executive and
independent -
Fang Ai Lian (Chairman of the Audit Committee) (appointed on 7 August 2008)
Graham John Bradley
Dominic Chiu Fai Ho
Kaikhushru Shiavax Nargolwala
Nicky Tan Ng Kuang, who served during the year, ceased to be a member of the Audit Committee on 7 August 2008.
The Audit Committee carried out its functions in accordance with Section 201B of the Singapore Companies Act,
Chapter 50.
In performing its functions, the Committee reviewed the overall scope of both internal and external audits and the
assistance given by the Company’s officers to the auditors. It met with the Company’s internal auditors to discuss the
results of the respective examinations and their evaluation of the Company’s system of internal accounting controls.
The Committee also held discussions with the external auditors and is satisfied that the processes put in place by
management provide reasonable assurance on mitigation of fraud risk exposure to the Group.
The Committee also reviewed the consolidated financial statements of the Group and the balance sheet and statement
of changes in equity of the Company for the financial year ended 31 March 2009 as well as the Independent Auditors’
Report thereon.
In addition, the Committee had, with the assistance of the internal auditors, reviewed the procedures set up by the
Group and the Company to identify and report, and where necessary, sought appropriate approval for interested
person transactions.
The Committee has full access to and has the co-operation of the management and has been given the resources
required for it to discharge its function properly. It also has full discretion to invite any Director or executive officer to
attend its meetings. The external and internal auditors have unrestricted access to the Audit Committee.
The Committee has nominated Deloitte & Touche LLP for re-appointment as auditors of the Company at the
forthcoming Annual General Meeting.
7.
AUDITORS
The auditors, Deloitte & Touche LLP, have expressed their willingness to accept re-appointment.
On behalf of the Directors
Chumpol NaLamlieng
Chairman
Singapore, 13 May 2009
Chua Sock Koong
Director
singtel annual report 2008 / 2009 83
STATEMENT OF DIRECTORS
For the financial year ended 31 March 2009
In the opinion of the Directors,
(a)
the consolidated financial statements of the Group and the balance sheet and statement of changes in equity of the
Company as set out on pages 86 to 182 are drawn up so as to give a true and fair view of the state of affairs of the Group
and of the Company as at 31 March 2009 and of the results, changes in equity and cash flows of the Group and changes
in equity of the Company for the year then ended; and
(b)
at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as
and when they fall due.
On behalf of the Directors
Chumpol NaLamlieng
Chairman
Singapore, 13 May 2009
Chua Sock Koong
Director
84 singapore telecommunications limited and suBsidiarY companies
INDEPENDENT AUDITORS’ REPORT
TO THE MEMBERS OF SINGAPORE TELECOMMUNICATIONS LIMITED
For the financial year ended 31 March 2009
We have audited the accompanying financial statements of Singapore Telecommunications Limited (the Company) and its
subsidiaries (the Group) which comprise the balance sheets of the Group and the Company as at 31 March 2009, the income
statement, statement of changes in equity and cash flow statement of the Group and the statement of changes in equity of
the Company for the year then ended, and a summary of significant accounting policies and other explanatory notes, as set
out on pages 86 to 182.
M ana gement’s Responsibility for the Financ ia l Sta tem en ts
Management is responsible for the preparation and fair presentation of these financial statements in accordance with the
provisions of the Singapore Companies Act, Cap. 50 (the “Act”) and Singapore Financial Reporting Standards. This responsibility
includes: devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that
assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and
that they are recorded as necessary to permit the preparation of true and fair income statement and balance sheets and to
maintain accountability of assets; selecting and applying appropriate accounting policies; and making accounting estimates
that are reasonable in the circumstances.
A uditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in
accordance with Singapore Standards on Auditing. Those standards require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material
misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to
design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies
used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation
of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
Opinion
In our opinion,
(a)
the consolidated financial statements of the Group and the balance sheet and statement of changes in equity of the
Company are properly drawn up in accordance with the provisions of the Act and Singapore Financial Reporting
Standards so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 March 2009
and of the results, changes in equity and cash flows of the Group and changes in equity of the Company for the year
ended on that date; and
(b)
the accounting and other records required by the Act to be kept by the Company and by those subsidiaries incorporated
in Singapore of which we are the auditors have been properly kept in accordance with the provisions of the Act.
Deloitte & Touche LLP
Public Accountants and
Certified Public Accountants
Singapore, 13 May 2009
singtel annual report 2008 / 2009 85
CONSOLIDATED INCOME STATEMENT
For the financial year ended 31 March 2009
Operating revenue
Operating expenses
Other income
Depreciation and amortisation
Exceptional items
Profit on operating activities
Share of results of associated and joint venture companies
Profit before interest, investment income (net) and tax
Interest and investment income (net)
Finance costs
Profit before tax
Tax expense
Profit after tax
Attributable to -
Shareholders of the Company
Minority interests
Notes
2009
S$ Mil
2008
S$ Mil
4
5
6
7
8
9
10
11
12
14,934.4
14,844.4
(10,595.3)
(10,392.5)
92.1
78.3
4,431.2
4,530.2
(1,732.7)
(319.6)
(1,886.9)
(50.1)
2,378.9
2,593.2
1,796.1
2,066.5
4,175.0
4,659.7
132.4
(360.7)
216.2
(392.9)
3,946.7
4,483.0
(497.5)
(522.3)
3,449.2
3,960.7
3,448.4
0.8
3,960.2
0.5
3,449.2
3,960.7
Earnings per share attributable to shareholders of
the Company
- basic (cents)
- diluted (cents)
13
13
21.67
21.60
24.90
24.76
The accompanying notes on pages 95 to 182 form an integral part of these financial statements.
Independent Auditors’ Report – page 85
86 singapore telecommunications limited and suBsidiarY companies
BALANCE SHEETS
As at 31 March 2009
Current assets
Cash and cash equivalents
Trade and other receivables
Financial assets at fair value through
profit or loss (“FVTPL investments”)
Derivative financial instruments
Inventories
Non-current assets
Property, plant and equipment
Intangible assets
Subsidiaries
Associated companies
Joint venture companies
Available-for-sale (“AFS”) investments
Derivative financial instruments
Deferred tax assets
Other non-current receivables
Total assets
Current liabilities
Trade and other payables
Provision
Current tax liabilities
Borrowings (unsecured)
Borrowings (secured)
Derivative financial instruments
Group
Company
Notes
2009
S$ Mil
2008
S$ Mil
2009
S$ Mil
2008
S$ Mil
15
16
17
26
18
19
20
21
22
23
25
26
12
27
28
29
30
31
26
1,076.0
2,531.9
10.8
1.5
173.4
3,793.6
9,122.6
10,027.4
-
669.3
7,989.9
236.3
461.3
806.4
147.9
29,461.1
1,372.0
2,540.9
11.0
2.5
123.6
4,050.0
10,124.2
10,056.5
-
1,086.9
7,453.0
352.6
358.0
1,083.0
150.1
30,664.3
333.1
1,359.4
-
1.5
35.4
1,729.4
1,968.1
2.7
11,798.7
24.7
29.9
24.6
461.3
-
104.7
14,414.7
614.4
1,597.1
-
1.2
18.9
2,231.6
1,985.4
3.0
13,982.3
24.7
29.9
37.0
358.0
-
89.0
16,509.3
33,254.7
34,714.3
16,144.1
18,740.9
3,267.5
16.8
340.2
1,427.4
6.4
44.2
5,102.5
3,360.1
12.7
345.8
1,874.3
0.3
162.5
5,755.7
1,130.7
-
221.3
-
-
12.6
1,364.6
2,890.6
-
237.1
487.1
-
155.7
3,770.5
The accompanying notes on pages 95 to 182 form an integral part of these financial statements.
Independent Auditors’ Report – page 85
singtel annual report 2008 / 2009 87
BALANCE SHEETS
As at 31 March 2009
Non-current liabilities
Borrowings (unsecured)
Borrowings (secured)
Advance billings
Deferred income
Derivative financial instruments
Deferred tax liabilities
Other non-current liabilities
Total liabilities
Net assets
Share capital and reserves
Share capital
Reserves
Group
Company
Notes
2009
S$ Mil
2008
S$ Mil
2009
S$ Mil
2008
S$ Mil
30
31
32
26
12
33
6,047.5
13.7
532.5
34.2
563.2
307.9
152.9
7,651.9
5,668.2
-
395.5
40.1
1,334.4
329.5
188.6
7,956.3
4,353.2
-
157.0
12.8
504.8
186.7
9.2
5,223.7
3,891.2
-
108.4
8.5
953.1
234.5
14.8
5,210.5
12,754.4
13,712.0
6,588.3
8,981.0
20,500.3
21,002.3
9,555.8
9,759.9
34
2,605.6
17,870.6
2,593.7
18,405.8
2,605.6
6,950.2
2,593.7
7,166.2
Equity attributable to shareholders
of the Company
Minority interests
20,476.2
24.1
20,999.5
2.8
9,555.8
-
9,759.9
-
Total equity
20,500.3
21,002.3
9,555.8
9,759.9
The accompanying notes on pages 95 to 182 form an integral part of these financial statements.
Independent Auditors’ Report – page 85
88 singapore telecommunications limited and suBsidiarY companies
STATEMENTS OF CHANGES IN EQUITY
For the financial year ended 31 March 2009
Share Capital
Balance as at 1 Apr
Issue of new shares
Group
2009
S$ Mil
2008
S$ Mil
Company
2009
S$ Mil
2008
S$ Mil
Notes
2,593.7
11.9
2,562.1
31.6
2,593.7
11.9
2,562.1
31.6
Balance as at 31 Mar
34
2,605.6
2,593.7
2,605.6
2,593.7
Treasury Shares (1) Held By Trust (2)
Balance as at 1 Apr
Performance shares purchased by Company
Performance shares purchased by Trust
Performance shares vested
Balance as at 31 Mar
Capital Reserve - Performance Shares
Balance as at 1 Apr
Equity-settled performance shares
Transfer of liability to equity
Cash paid to employees under performance
share plans
Performance shares purchased by SingTel
Optus Pty Limited (“Optus”) and vested
Performance shares vested from
Treasury Shares
Contribution to Trust
Balance as at 31 Mar
Currency Translation Reserve (3)
(50.1)
(12.1)
(36.9)
55.4
(43.7)
11.8
24.9
1.1
(0.9)
(42.4)
(11.2)
(38.9)
42.4
(50.1)
35.0
32.7
3.2
(4.9)
(14.1)
(11.8)
(55.4)
-
(42.4)
-
(32.6)
11.8
Balance as at 1 Apr
Currency translation differences transferred
to income statement upon capital
reduction of subsidiaries
Currency translation differences released
on disposal of joint venture companies
Currency translation differences (*)
95.8
389.1
(83.9)
(195.1)
0.6
(1,791.2)
93.6
(191.8)
Balance as at 31 Mar
(1,778.7)
95.8
-
(12.1)
-
12.1
-
(22.8)
13.6
1.1
(0.8)
-
(6.5)
(23.5)
(38.9)
-
-
-
-
-
-
(11.2)
-
11.2
-
(6.7)
15.8
0.8
(4.7)
-
(6.2)
(21.8)
(22.8)
-
-
-
-
-
Balance carried forward
750.6
2,651.2
2,566.7
2,570.9
The accompanying notes on pages 95 to 182 form an integral part of these financial statements.
Independent Auditors’ Report – page 85
singtel annual report 2008 / 2009 89
STATEMENTS OF CHANGES IN EQUITY
For the financial year ended 31 March 2009
Group
2009
S$ Mil
2008
S$ Mil
Notes
Company
2009
S$ Mil
2008
S$ Mil
Balance brought forward
750.6
2,651.2
2,566.7
2,570.9
Hedging Reserve
Balance as at 1 Apr
Net valuation taken to equity (*)
Transferred to income statement
(266.0)
298.7
(277.8)
(142.2)
(434.0)
310.2
(263.8)
303.7
(277.8)
(113.8)
(454.5)
304.5
Balance as at 31 Mar
(245.1)
(266.0)
(237.9)
(263.8)
Fair Value Reserve
Balance as at 1 Apr
Fair value changes on AFS investments (*)
Balance as at 31 Mar
Retained Earnings
54.4
(115.2)
(60.8)
21.8
32.6
54.4
24.9
(9.9)
15.0
21.2
3.7
24.9
Balance as at 1 Apr
Goodwill transferred from ‘Other Reserves’
on dilution
Net profit for the year (*)
Final dividends paid
Interim dividends paid
19,800.7
19,277.2
7,427.9
9,239.0
(0.1)
3,448.4
(1,098.1)
(891.3)
(1.3)
3,960.2
(2,544.7)
(890.7)
35
35
-
1,775.0
(1,098.8)
(892.1)
-
1,626.9
(2,546.5)
(891.5)
Balance as at 31 Mar
21,259.6
19,800.7
7,212.0
7,427.9
Other Reserves (4)
Balance as at 1 Apr
Goodwill transferred to ‘Retained Earnings’
on dilution
Share of associated and joint venture
companies’ reserve movements (*)
(1,240.8)
(1,253.4)
0.1
12.6
1.3
11.3
Balance as at 31 Mar
(1,228.1)
(1,240.8)
-
-
-
-
-
-
-
-
Equity attributable to shareholders
of the Company
20,476.2
20,999.5
9,555.8
9,759.9
The accompanying notes on pages 95 to 182 form an integral part of these financial statements.
Independent Auditors’ Report – page 85
90 singapore telecommunications limited and suBsidiarY companies
STATEMENTS OF CHANGES IN EQUITY
For the financial year ended 31 March 2009
Balance brought forward
20,476.2
20,999.5
9,555.8
9,759.9
Group
Company
2009
S$ Mil
2008
S$ Mil
2009
S$ Mil
2008
S$ Mil
Minority Interests
Balance as at 1 Apr
Acquisition of subsidiary
Contribution during the year
Disposal of subsidiary
Currency translation differences (*)
Net profit for the year (*)
Dividends paid to minority shareholders
Balance as at 31 Mar
2.8
12.3
18.9
(10.0)
-
0.8
(0.7)
24.1
2.8
-
-
-
(0.1)
0.5
(0.4)
2.8
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total equity
20,500.3
21,002.3
9,555.8
9,759.9
Total recognised net gains (5)
1,854.1
3,378.7
2,068.8
1,176.1
Notes:
(1) ‘Treasury Shares’ are accounted for in accordance with FRS 32 (revised 2004).
(2) RBC Dexia Trust Services Singapore Limited (the “Trust”) is the trustee of a trust established to administer the performance share
plans.
(3) ‘Currency Translation Reserve’ relates mainly to the translation of the net assets of foreign subsidiaries, associated and joint venture
companies of the Group denominated mainly in Australian Dollar, Indian Rupee, Indonesian Rupiah, Pakistani Rupee, Philippine Peso,
Thai Baht and United States Dollar.
(4) ‘Other Reserves’ relate mainly to goodwill on acquisitions completed prior to 1 April 2001.
(5) ‘Total recognised net gains’ comprise all items marked (*) which include a gain of S$0.8 million (2008: gain of S$0.4 million) attributable
to minority interests. ‘Total recognised net gains’ for the Group include a net loss of S$1.60 billion (2008: net loss of S$582.0 million)
recognised directly in equity. ‘Total recognised net gains’ for the Company include a net gain of S$293.8 million (2008: net loss of S$450.8
million) recognised directly in equity.
The accompanying notes on pages 95 to 182 form an integral part of these financial statements.
Independent Auditors’ Report – page 85
singtel annual report 2008 / 2009 91
CONSOLIDATED CASH FLOW STATEMENT
For the financial year ended 31 March 2009
Cash Flows from Operating Activities
Profit before tax
Adjustments for -
Depreciation and amortisation
Exceptional items
Interest and investment income (net)
Finance costs
Share of results of associated and joint venture companies (post-tax)
Other non-cash items
2009
S$ Mil
2008
S$ Mil
3,946.7
4,483.0
1,732.7
319.6
(132.4)
360.7
(1,796.1)
34.2
518.7
1,886.9
50.1
(216.2)
392.9
(2,066.5)
52.6
99.8
Operating cash flow before working capital changes
4,465.4
4,582.8
Changes in operating assets and liabilities
Trade and other receivables
Trade and other payables
Inventories
Currency translation adjustments of subsidiaries
Cash generated from operations
Payment to employees in cash under performance share plans
Dividends received from associated and joint venture companies
Income tax and withholding tax paid
Net cash inflow from operating activities
(86.0)
96.0
(41.6)
3.5
(35.8)
177.4
(30.9)
(6.6)
4,437.3
4,686.9
(3.7)
1,068.2
(338.8)
(11.7)
1,113.5
(335.0)
5,163.0
5,453.7
The accompanying notes on pages 95 to 182 form an integral part of these financial statements.
Independent Auditors’ Report – page 85
92 singapore telecommunications limited and suBsidiarY companies
CONSOLIDATED CASH FLOW STATEMENT
For the financial year ended 31 March 2009
Cash Flows from Investing Activities
Dividends received from other investments (net of withholding tax paid)
Interest received
Payment for acquisition of subsidiary, net of cash acquired (Note 1)
Proceeds from disposal of subsidiary, net of cash received
Contribution from minority shareholders
Investment in associated and joint venture companies
Long term loans repaid by joint venture companies
Proceeds from sale of joint venture companies
(net of withholding tax paid)
Proceeds from capital reduction of joint venture companies
Investment in AFS investments
Proceeds from sale of AFS investments
Proceeds from capital reduction of AFS investments (net of withholding tax paid)
Net sale proceeds from FVTPL investments
Payment for purchase of property, plant and equipment
Advance payment for purchase of submarine cable capacity
Drawdown of submarine cable capacity
Proceeds from sale of property, plant and equipment
Purchase of intangible assets
Withholding tax paid on intra-group interest income
Note
2009
S$ Mil
2008
S$ Mil
19.9
34.7
(194.0)
8.8
18.9
(268.1)
3.0
12.8
-
(0.9)
0.3
2.3
-
(1,918.3)
(43.5)
24.7
1.3
(3.7)
(88.8)
2.1
51.9
-
-
-
(1,189.3)
2.1
87.8
86.1
(1.1)
1.3
14.0
330.8
(1,879.0)
(75.0)
-
0.9
(3.1)
(177.7)
Net cash outflow from investing activities
(2,390.6)
(2,748.2)
Cash Flows from Financing Activities
Proceeds from term loans
Repayment of term loans
Bonds repaid
Decrease in finance lease liabilities
Net (repayment of)/ proceeds from borrowings
Settlement of swap for bonds repaid
Net interest paid on borrowings and swaps
Dividends paid to minority shareholders
Final dividends paid to shareholders of the Company
Interim dividends paid to shareholders of the Company
Proceeds from issue of shares
Purchase of performance shares
Net cash outflow from financing activities
Net decrease in cash and cash equivalents
Exchange effects on cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
2,815.1
(2,767.1)
(512.0)
(1.6)
(465.6)
(137.3)
(373.6)
(0.7)
(1,098.1)
(891.3)
11.9
(63.1)
4,927.7
(3,748.7)
(12.2)
(0.6)
1,166.2
-
(410.9)
(0.4)
(2,544.7)
(890.7)
31.6
(62.5)
(3,017.8)
(2,711.4)
(245.4)
(50.7)
1,371.9
(5.9)
(12.2)
1,390.0
1,075.8
1,371.9
15
The accompanying notes on pages 95 to 182 form an integral part of these financial statements.
Independent Auditors’ Report – page 85
singtel annual report 2008 / 2009 93
NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT
For the financial year ended 31 March 2009
Note (1):
Acquisition of subsidiary
On 25 August 2008, the Group acquired a controlling interest of approximately 60% in Singapore Computer
Systems Limited and its subsidiaries (“SCS”). Following a mandatory general offer, the Group completed the
acquisition of the remaining shares in SCS on 12 December 2008. Accordingly, SCS became a wholly-owned
subsidiary of the Group and was delisted from the Official List of the Singapore Exchange Securities Trading
Limited.
Fair values of identifiable net assets of SCS acquired and the net cash outflow on the acquisition were as
follows -
Property, plant and equipment
Non-current assets (excluding property, plant and equipment)
Cash and cash equivalents
Current assets (excluding cash and cash equivalents)
Current liabilities
Non-current liabilities
Fair value adjustments -
Identifiable intangible assets
Property, plant and equipment
Deferred tax liability
Minority interest
Net assets acquired
Goodwill
Total cash consideration
Less: Cash and cash equivalents acquired
Net outflow of cash
2009
S$ Mil
52.1
7.9
45.4
203.3
(156.5)
(9.3)
142.9
30.2
7.2
(10.8)
26.6
(12.3)
157.2
82.2
239.4
(45.4)
194.0
The accompanying notes on pages 95 to 182 form an integral part of these financial statements.
Independent Auditors’ Report – page 85
94 singapore telecommunications limited and suBsidiarY companies
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
These notes form an integral part of and should be read in conjunction with the accompanying financial statements.
1.
GENERAL
The Company, Singapore Telecommunications Limited (“SingTel”), is domiciled and incorporated in Singapore and is
publicly traded on the Singapore Exchange and Australian Stock Exchange. The address of its registered office is 31
Exeter Road, Comcentre, Singapore 239732.
The principal activities of the Company consist of the operation and provision of telecommunication systems and
services, and investment holding. The principal activities of the subsidiaries are disclosed in Note 45.
Under a licence granted by the Info-communications Development Authority of Singapore (“IDA”), the Group had
the exclusive rights to provide fixed national and international telecommunications services through 31 March 2000
(with limited exceptions) and public cellular mobile telephone services through 31 March 1997. From the expiry of the
exclusive rights, the Group’s licences for these telecommunications services continue on a non-exclusive basis to 31
March 2017.
In addition, the Group is licensed to offer Internet services and has also obtained frequency spectrum and licence
rights from IDA to install, operate and maintain 3G mobile communication systems and services respectively, as well
as wireless broadband systems and services. The Group also holds licences from the Media Development Authority
of Singapore for the purpose of providing subscription nationwide television services.
In Australia, Optus was granted telecommunication licences under the Telecommunications Act 1991. Pursuant to the
Telecommunications (Transitional Provisions and Consequential Amendments) Act 1997, the licences continued to
have effect after the deregulation of telecommunications in Australia in 1997. The licences do not have a finite term,
but are of continuing operation until cancelled under the Telecommunications Act 1997.
These financial statements were authorised and approved for issue in accordance with a Directors’ resolution dated
13 May 2009.
2.
SIGNIFICANT ACCOUNTING POLICIE S
2.1 Basis of Accounting
The financial statements are prepared in accordance with Singapore Financial Reporting Standards (“FRS”) including
related interpretations, and the provisions of the Singapore Companies Act. They have been prepared under the
historical cost convention, except as disclosed in the accounting policies below.
The preparation of financial statements in conformity with FRS requires management to exercise its judgement in the
process of applying the Group’s accounting policies. It also requires the use of accounting estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements, and the reported amounts of revenues and expenses during the financial year. Although
these estimates are based on management’s best knowledge of current events and actions, actual results may
ultimately differ from those estimates. Critical accounting estimates and assumptions used that are significant to the
financial statements, and areas involving a higher degree of judgement are disclosed in Note 3.
The accounting policies have been consistently applied by the Group, and are consistent with those used in the previous
financial year. The new FRS and Interpretations to FRS (“INT FRS”) which are mandatory from 1 April 2008 did not
result in substantial changes to the Group’s accounting policies.
singtel annual report 2008 / 2009 95
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
2. 1 Basis of Accounting (cont’d)
Singapore FRS include Singapore equivalents to International Financial Reporting Standards (“IFRS”). The consolidated
financial statements of the Group and the balance sheet and statements of changes in equity of the Company comply
with Singapore equivalents to IFRS and Interpretations adopted by the International Accounting Standards Board and
International Financial Reporting Interpretations Committee respectively to the extent that the Singapore equivalents
to IFRS and Interpretations are in issuance and effective for 31 March 2009.
2. 2 Group Accounting
The accounting policy for subsidiaries, associated and joint venture companies in the Company’s financial statements
is stated in Note 2.4. The Group’s accounting policy on goodwill is stated in Note 2.15.1.
2.2.1 Subsidiaries
Subsidiaries are entities (including special purpose entities) controlled by the Group. Control exists when the Group
has the power, directly or indirectly, to govern the financial and operating policies of the entity, generally accompanying
a shareholding of more than one half of the voting rights.
In the consolidated financial statements, acquisitions of subsidiaries are accounted for using the purchase method
of accounting. The financial statements of subsidiaries are included in the consolidated financial statements from
the date that control commences until the date that control ceases. All significant inter-company balances and
transactions are eliminated on consolidation.
Minority interests in the net assets of consolidated subsidiaries are identified separately from the Group’s equity
therein. Minority interests consist of the amount of those interests at the date of the original business combination
and the minority shareholders’ share of changes in equity since the date of the combination. Any losses in excess of
the interest in the equity of the subsidiary attributable to the minority shareholders are charged to the Group except to
the extent that the minority shareholders are able and have a binding obligation to make good the losses.
2.2.2 Associated companies
Associated companies are entities over which the Group has significant influence, but not control or joint control,
generally accompanying a shareholding of between 20 per cent and 50 per cent of the voting rights.
Investments in associated companies are accounted for in the consolidated financial statements using the equity
method of accounting. Equity accounting involves recording the investment in associated companies initially at cost,
and recognising the Group’s share of the post-acquisition results of associated companies in the consolidated income
statement, and the Group’s share of post-acquisition reserve movements in reserves. The cumulative post-acquisition
movements are adjusted against the carrying amount of the investments in the consolidated balance sheet.
In the consolidated balance sheet, investments in associated companies include goodwill on acquisition identified
on acquisitions completed on or after 1 April 2001, net of accumulated impairment losses. Goodwill is assessed for
impairment as part of the investment in associated companies.
When the Group’s share of losses in an associated company equals or exceeds its interest in the associated company,
including loans that are in fact extensions of the Group’s investment, the Group does not recognise further losses,
unless it has incurred or guaranteed obligations in respect of the associated company.
Unrealised gains resulting from transactions with associated companies are eliminated to the extent of the Group’s
interest in the associated company. Unrealised losses are eliminated in the same way as unrealised gains, but only to
the extent that there is no evidence of impairment.
96 singapore telecommunications limited and suBsidiarY companies
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
2.2.3 Joint venture companies
Joint venture companies are entities over which the Group has contractual arrangements to jointly share the
control with one or more parties, and none of the parties involved has unilateral control over the entities’ economic
activities.
The Group’s interest in joint venture companies is accounted for in the consolidated financial statements using the
equity method of accounting.
In the consolidated balance sheet, investments in joint venture companies include goodwill on acquisition identified
on acquisitions completed on or after 1 April 2001, net of accumulated impairment losses. Goodwill is assessed for
impairment as part of the investment in joint venture companies.
The Group’s interest in its unincorporated joint venture operations is accounted for by recognising the Group’s assets
and liabilities from the joint venture, as well as expenses incurred by the Group and the Group’s share of income
earned from the joint venture, in the consolidated financial statements.
Unrealised gains resulting from transactions with joint venture companies are eliminated to the extent of the Group’s
interest in the joint venture company. Unrealised losses are eliminated in the same way as unrealised gains, but only
to the extent that there is no evidence of impairment.
2.2.4 Transaction costs
External costs directly attributable to an acquisition are included as part of the cost of acquisition.
2.2.5 Special purpose entity
The Trust has been consolidated in the consolidated financial statements under INT FRS 12, Consolidation – Special
Purpose Entities.
2.3
Share Capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of new equity shares
are taken to equity as a deduction, net of tax, from the proceeds.
When the Company purchases its own equity share capital, the consideration paid, including any directly attributable
costs, is taken against ‘Treasury Shares Held By Company’ within equity. When the shares are subsequently disposed,
the realised gains or losses on disposal of the treasury shares are included in ‘Other Reserves’ of the Company.
The Trust acquires shares in the Company from the open market for delivery to employees upon vesting of performance
shares awarded under the Group’s performance share plans. Such shares are designated as ‘Treasury Shares’. In the
consolidated financial statements, the cost of unvested shares, including directly attributable costs, is taken against
‘Treasury Shares Held By Trust’ within equity.
Upon vesting of the performance shares, the weighted average costs of the shares delivered to employees, whether
held by the Company or the Trust, are transferred to ‘Capital Reserve – Performance Shares’ within equity in the
consolidated financial statements.
singtel annual report 2008 / 2009 97
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
2. 4
In vestments in Subsidiarie s , A ss oc iated an d J o int Ven t ure C o mpa n ie s
In the Company’s balance sheet, investments in subsidiaries, associated and joint venture companies, including loans
that meet the definition of equity instruments, are stated at cost less accumulated impairment losses. Where an
indication of impairment exists, the carrying amount of the investment is assessed and written down immediately
to its recoverable value. On disposal of investments in subsidiaries, associated and joint venture companies, the
difference between the net disposal proceeds and the carrying amount of the investment is taken to the income
statement of the Company.
2. 5
Investments
The investments of the Group are classified either as ‘FVTPL investments’ or ‘AFS investments’. Purchases and
sales of investments are recognised on trade date, which is the date that the Group commits to purchase or sell the
investment.
2.5.1 FVTPL investments
FVTPL investments are initially recognised at fair value and subsequently re-measured at fair value at the balance
sheet date with any resulting gains and losses, including currency translation differences on equity investments (if
any), recognised in the income statement immediately. The interest and dividend income from these investments are
recognised separately from the fair value adjustment in the income statement.
2.5.2 AFS investments
The Group’s other long term investments are designated as AFS investments and initially recognised at fair value plus
directly attributable transaction costs.
The AFS investments are subsequently stated at fair value at the balance sheet date, with all resulting gains and
losses, including currency translation differences, taken to ‘Fair Value Reserve’ within equity.
When AFS investments are sold or impaired, the accumulated fair value adjustments in the ‘Fair Value Reserve’ are
included in the income statement.
A significant or prolonged decline in fair value below the cost is objective evidence of impairment. Impairment loss is
computed as the difference between the acquisition cost and current fair value, less any impairment loss previously
recognised in the income statement. Impairment losses recognised in the income statement on equity investments
are not reversed through the income statement until the equity investments are disposed.
2.6 Derivative Financial Instrument s and Hed g in g A ct ivities
Derivative financial instruments are initially recognised at fair value on the date the derivative contract is entered into
and are subsequently re-measured at their fair values at each balance sheet date.
Derivative financial instrument is carried as an asset when the fair value is positive and as a liability when the fair
value is negative.
Any gains or losses arising from changes in fair value are recognised immediately in the income statement, unless
they qualify for hedge accounting.
98 singapore telecommunications limited and suBsidiarY companies
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
2.6.1 Hedge accounting
At the inception of a hedge relationship, the Group formally designates and documents the hedge relationship to which
the Group wishes to apply hedge accounting, as well as its risk management objectives and strategy for undertaking
the hedge transactions. The documentation includes identification of the hedging instrument, the hedge item or
transaction, the nature of the risk being hedged and how the entity will assess the hedging instrument’s effectiveness
in offsetting the exposure to changes in the hedged item’s fair value or cash flows attributable to the hedged risk.
Such hedges are expected to be highly effective in achieving offsetting changes in fair value or cash flows and are
assessed on an ongoing basis to determine that they actually have been highly effective throughout the financial
reporting periods for which they are designated.
Fair value hedge
Derivative financial instruments that qualify for fair value hedge accounting are initially recognised at fair value on
the date that the contract is entered into. Changes in fair value of derivatives are recorded in the income statement
together with any changes in the fair value of the hedged items that are attributable to the hedged risks.
Hedge accounting is discontinued when the Group revokes the hedging relationship, the hedging instrument expires
or is sold, terminated, or exercised, or no longer qualifies for hedge accounting. The adjustment to the carrying
amount of the hedged item arising from the hedged risk is amortised to the income statement from that date.
Cash flow hedge
The effective portion of changes in the fair value of the derivative financial instruments that qualify as cash flow hedges
are recognised in ‘Hedging Reserve’ within equity. The gain or loss relating to the ineffective portion is recognised
immediately in the income statement. Amounts accumulated in the ‘Hedging Reserve’ are transferred to the income
statement in the periods when the hedged items affect the income statement.
Hedge accounting is discontinued when the Group revokes the hedging relationship, the hedging instrument expires
or is sold, terminated, or exercised, or no longer qualifies for hedge accounting. Any cumulative gain or loss deferred
in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in the
income statement. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was
deferred in equity is recognised immediately in the income statement.
Net investment hedge
Changes in the fair value of designated derivatives that qualify as net investment hedges, and which are highly
effective, are recognised in ‘Currency Translation Reserve’ within equity in the consolidated financial statements and
are transferred to the consolidated income statement in the period when the foreign operation is disposed.
In the Company’s financial statements, the gain or loss on the financial instrument used to hedge a net investment in
a foreign operation of the Group is recognised in the income statement.
The Group has entered into the following derivative financial instruments to hedge its risks, namely -
Cross currency interest rate swaps and SGD interest rate swaps are fair value hedges for the interest rate risk and
cash flow hedges for the currency risk arising from the Group’s issued bonds. The swaps involve the exchange of
principal and fixed interest receipts in the foreign currency in which the issued bonds are denominated, for principal
and floating or fixed interest payments in the Group’s functional currency.
Cross currency swaps are net investment hedges for the foreign currency exchange risk on its Australian
operations.
Forward foreign exchange contracts are cash flow hedges for the Group’s exposure to foreign currency exchange risks
arising from forecasted or committed expenditure.
singtel annual report 2008 / 2009 99
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
2. 7
Fair Value Estimation of F inanc ial Inst ru m en t s
Fair value is defined as the amount at which the instrument could be exchanged in a current transaction between
knowledgeable willing parties in arm’s length transaction, other than in a forced or liquidation sale.
The following methods and assumptions are used to estimate the fair value of each class of financial instrument -
Bank balances, receivables and payables, short term borrowings
The carrying amounts approximate fair values due to the relatively short term maturity of these instruments.
Quoted and unquoted investments
The fair value of investments traded in active markets is based on the market quoted mid-price (average of offer and
bid price) or the mid-price quoted by the market maker at the close of business on the balance sheet date.
The fair values of unquoted investments are determined using valuation techniques. These include the use of recent
arm’s length transactions, reference to current market value of another instrument which is substantially the same
or discounted cash flow analysis.
Cross currency and interest rate swaps
The fair value of a cross currency or an interest rate swap is the estimated amount that the swap contract can be
exchanged for or settled with under normal market conditions. This fair value can be estimated using the discounted
cash flow method where the future cash flows of the swap contract are discounted at the prevailing market foreign
exchange rates and interest rates. Market interest rates are actively quoted interest rates or interest rates computed
by applying techniques to these actively quoted interest rates.
Forward foreign currency contracts
The fair value of forward foreign exchange contracts is determined using forward exchange market rates for contracts
with similar maturity profiles at the balance sheet date.
Non-current borrowings
For disclosure purposes, the fair value of non-current borrowings which are traded in active markets is based on the
market quoted ask price. For other non-current borrowings, the fair values are based on valuation provided by service
providers or estimated by discounting the future contractual cash flows using a discount rate based on the borrowing
rates which the Group expects would be available at the balance sheet date.
2.8
Financi al Guarantee Cont ract s
Financial guarantees issued by the Company are recorded initially at fair values plus transactions costs and amortised
in the income statement over the period of the guarantee.
100 singapore telecommunications limited and suBsidiarY companies
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
2.9
Trade and Other Receivab le s
Trade and other receivables, including loans given by the Company to subsidiaries, associated and joint venture
companies, are recognised initially at fair value and, other than those that meet the definition of equity instruments,
are subsequently measured at amortised cost using the effective interest method, less allowance for impairment.
An allowance for impairment of trade and other receivables is established when there is objective evidence that
the Group will not be able to collect all amounts due according to the original terms of the debts. Loss events
include financial difficulty or bankruptcy of the debtor, significant delay in payments and breaches of contracts. The
impairment loss, measured as the difference between the debt’s carrying amount and the present value of estimated
future cash flows discounted at the original effective interest rate, is recognised in the income statement. When
the debt becomes uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts
previously written off are recognised in the income statement.
2.10 Trade and O ther Payables
Trade and other payables are initially recognised at fair value and subsequently measured at amortised cost using the
effective interest method.
2.11 Borrowings
Borrowings are initially recognised at fair value of the consideration received less directly attributable transaction
costs. After initial recognition, unhedged borrowings are subsequently stated at amortised cost using the effective
interest method.
2.12 Cash and Cash Equivalents
For the purpose of the consolidated cash flow statement, cash and cash equivalents comprise cash on hand, balances
with banks and fixed deposits with original maturity of three months or less, net of bank overdrafts which are repayable
on demand and which form an integral part of the Group’s cash management.
Bank overdrafts are included under borrowings in the balance sheet.
2.13 Foreign Currencies
2.13.1 Functional and presentation currency
Items included in the financial statements of each entity in the Group are measured using the currency of the primary
economic environment in which the entity operates (the “functional currency”). The balance sheet and statement
of changes in equity of the Company and consolidated financial statements of the Group are presented in Singapore
Dollar, which is the functional and presentation currency of the Company and the presentation currency of the
Group.
2.13.2 Transactions and balances
Transactions in a currency other than the functional currency (“foreign currency”) are translated into the functional
currency at the exchange rates prevailing at the date of the transactions. Monetary assets and liabilities denominated
in foreign currencies at the balance sheet date are translated at exchange rates ruling at that date. Foreign exchange
differences arising from translation are recognised in the income statement.
singtel annual report 2008 / 2009 101
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
2.13.3 Translation of foreign operations’ financial statements
In the preparation of the consolidated financial statements, the assets and liabilities of foreign operations are translated
to Singapore Dollar at exchange rates ruling at the balance sheet date except for share capital and reserves which are
translated at historical rates of exchange (see Note 2.13.4 for translation of goodwill and fair value adjustments).
Income and expenses in the income statement are translated using either the average exchange rates for the month
or year, which approximate the exchange rates at the dates of the transactions. All resulting translation differences
are taken directly to ‘Currency Translation Reserve’ within equity.
On disposal, the accumulated translation differences deferred in ‘Currency Translation Reserve’ relating to that
foreign operation are recognised in the consolidated income statement as part of the gain or loss on disposal.
2.13.4 Translation of goodwill and fair value adjustments
Goodwill and fair value adjustments arising on the acquisition of foreign entities completed on or after 1 April 2005
are treated as assets and liabilities of the foreign entities and are recorded in the functional currencies of the foreign
entities and translated at the exchange rates prevailing at the balance sheet date. However, for acquisitions of foreign
entities completed prior to 1 April 2005, goodwill and fair value adjustments continue to be recorded at the exchange
rates at the respective dates of the acquisitions.
2.13.5 Net investment in a foreign entity in the Company’s financial statements
The exchange differences on loans from the Company to its subsidiaries which form part of the Company’s net
investment in the subsidiaries are recognised in the income statement of the Company. Such translation differences,
however, are reclassified to ‘Currency Translation Reserve’ within equity in the consolidated balance sheet. On
disposal, the accumulated exchange differences are recognised in the consolidated income statement as part of the
gain or loss on disposal.
2. 14 Provisions
A provision is recognised when there is a present legal or constructive obligation as a result of past events, it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a
reliable estimate of the amount can be made of the amount of the obligation. No provision is recognised for future
operating losses.
The provision for liquidated damages in respect of information technology contracts is made based on management’s
best estimate of the anticipated liability.
Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate.
2.15 Intan gible Assets
2.15.1 Goodwill
Goodwill represents the excess of the cost of an acquisition of subsidiary, associated or joint venture company over the
fair value of the Group’s share of their identifiable net assets, including contingent liabilities, at the date of acquisition.
The cost of an acquisition is measured at the fair value of the assets given, equity instruments issued or liabilities
incurred or assumed at the date of the acquisition, plus costs directly attributable to the acquisition.
Goodwill is stated at cost less accumulated impairment losses.
102 singapore telecommunications limited and suBsidiarY companies
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
2.15.1 Goodwill (cont’d)
Acquisitions completed prior to 1 April 2001
Goodwill on acquisitions completed prior to 1 April 2001 had been adjusted in full against ‘Other Reserves’ within
equity. Such goodwill has not been retrospectively capitalised and amortised.
The Group also had acquisitions where the costs of acquisition were less than the fair value of identifiable net assets
acquired. Such differences (negative goodwill) were adjusted against ‘Other Reserves’ in the year of acquisition.
Goodwill which has been previously taken to ‘Other Reserves’ is not taken to income statement when the entity is
disposed of or when the goodwill is impaired.
Acquisitions completed on or after 1 April 2001
Prior to 1 April 2004, goodwill on acquisitions completed on or after 1 April 2001 was capitalised and amortised on a
straight-line basis in the consolidated income statement over its estimated useful life of up to 20 financial years. In
addition, goodwill was assessed for indications of impairment at each balance sheet date.
Since 1 April 2004, goodwill is no longer amortised but is tested annually for impairment or whenever there is an
indication of impairment (see Note 2.16). The accumulated amortisation for goodwill as at 1 April 2004 had been
eliminated with a corresponding decrease in the capitalised goodwill.
Goodwill on acquisitions of subsidiaries is shown on the face of the consolidated balance sheet whereas goodwill
on acquisitions of associated and joint venture companies are recorded as part of the carrying value of the related
investment.
Negative goodwill is recognised directly in the consolidated income statement.
Gains or losses on disposal of subsidiaries, associated and joint venture companies include the carrying amount of
capitalised goodwill relating to the entity sold.
2.15.2 Other intangible assets
Expenditure on telecommunication and spectrum licences is capitalised and amortised using the straight-line method
over their estimated useful lives of 12 to 25 years. Customer relationships or customer contracts acquired in business
combinations are carried at fair values at date of acquisition, and amortised on a straight-line basis over the period of
the expected benefits, which is estimated at 5 to 10 years.
Other intangible assets are stated at cost less accumulated amortisation and accumulated impairment losses.
2.16 Impairment of N on-financ ial A ss ets
Goodwill on acquisition of subsidiaries, which has an indefinite useful life, is subject to annual impairment tests
or more frequently tested for impairment if events or changes in circumstances indicate that it might be impaired.
Goodwill is not amortised (see Note 2.15.1).
The other intangible assets of the Group, which have definite useful lives and are subject to amortisation, as well as
property, plant and equipment and investments in subsidiaries, associated and joint venture companies, are reviewed
at each balance sheet date to determine whether there is any indicator for impairment, or whenever events or changes
in circumstances indicate that the carrying amount may not be recoverable. If any such indication exists, the assets’
recoverable amounts are estimated.
singtel annual report 2008 / 2009 103
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
2. 16 Impairment of Non-financ ial A ss ets (con t ’ d )
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately
identifiable cash flows (cash-generating units).
An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount.
The recoverable amount is the higher of the asset’s fair value less costs to sell and value in use.
An impairment loss for an asset, other than goodwill on acquisition of subsidiaries, is reversed if, and only if, there has
been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was
recognised. Impairment loss on goodwill on acquisition of subsidiaries is not reversed in a subsequent period.
2 . 1 7 In ve nto ri es
Inventories are stated at the lower of cost and net realisable value. Cost is determined on the weighted average
basis. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated cost of
completion and selling expenses.
Work-in-progress is stated at costs less progress payments received and receivable on uncompleted information
technology services. Costs include third party hardware and software costs, direct labour and other direct expenses
attributable to the project activity and associated profits recognised on projects-in-progress. When it is probable that
total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately.
Work-in-progress is presented in the consolidated balance sheet as “Work-in-progress” (as a current asset) or
“Excess of progress billings over work-in-progress” (as a current liability) as applicable.
Inventories include maintenance spares acquired for the purpose of replacing damaged or faulty plant or equipment.
Until they are used, they are amortised over the useful life of the plant and equipment they support. When used, the
unamortised balance is expensed.
2. 18 Property, Plant and Equipme nt
Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment
losses, where applicable. The cost of self-constructed assets includes the cost of material, direct labour, capitalised
borrowing costs and an appropriate proportion of production overheads.
Depreciation is calculated on a straight-line basis to write off the cost of the property, plant and equipment over their
expected useful lives. Property, plant and equipment under finance leases are depreciated over the shorter of the
lease term or useful life. The estimated useful lives are as follows -
Buildings
Transmission plant and equipment
Switching equipment
Other plant and equipment
No. of years
5 - 40
5 - 25
3 - 10
3 - 20
104 singapore telecommunications limited and suBsidiarY companies
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
2.18 Property, Plant and Equipm e nt (cont ’d )
Other property, plant and equipment consist mainly of motor vehicles, office equipment, furniture and fittings.
No depreciation is provided on freehold land, long-term leasehold land with a remaining lease period of more than 100
years and capital work-in-progress. Leasehold land with a remaining lease period of 100 years or less is depreciated
in equal installments over its remaining lease period.
In respect of capital work-in-progress, assets are depreciated from the month the asset is completed and held ready
for use.
Costs to acquire computer software which are an integral part of the related hardware are capitalised and recognised
as assets and included in property, plant and equipment when it is probable that the costs will generate economic
benefits beyond one year and the costs are associated with identifiable software products which can be reliably
measured by the Group.
The cost of property, plant and equipment includes expenditure that is directly attributable to the acquisition of the
items. Dismantlement, removal or restoration costs are included as part of the cost if the obligation for dismantlement,
removal or restoration is incurred as a consequence of acquiring or using the asset. Costs may also include transfers
from equity of any gains or losses on qualifying cash flow hedges of foreign currency purchases of property, plant and
equipment. Subsequent expenditure is included in the carrying amount of an asset when it is probable that future
economic benefits, in excess of the originally assessed standard of performance of the existing asset, will flow to the
Group.
The residual values and useful lives of property, plant and equipment are reviewed, and adjusted as appropriate, at
each balance sheet date.
On disposal of property, plant and equipment, the difference between the disposal proceeds and its carrying value is
taken to the income statement.
2.19 Leases
2.19.1 Finance leases
Finance leases are those leasing agreements which effectively transfer to the Group substantially all the risks and
benefits incidental to ownership of the leased items. Assets financed under such leases are treated as if they had been
purchased outright at the lower of fair value and present value of the minimum lease payments and the corresponding
leasing commitments are shown as obligations to the lessors.
Lease payments are treated as consisting of capital repayments and interest elements. Interest is charged to the
income statement over the period of the lease to produce a constant rate of charge on the balance of capital repayments
outstanding.
2.19.2 Operating leases
Leases of assets in which a significant portion of the risks and rewards of ownership are retained by the lessor are
classified as operating leases. Operating lease payments are recognised as expenses in the income statement on a
straight-line basis over the period of the lease.
singtel annual report 2008 / 2009 105
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
2.19.3 Sales of network capacity
Sales of network capacity are accounted as finance leases where -
(i)
(ii)
(iii)
(iv)
(v)
the purchaser’s right of use is exclusive and irrevocable;
the asset is specific and separable;
the terms of the contract are for the major part of the asset’s useful economic life;
the attributable costs or carrying value can be measured reliably; and
no significant risks are retained by the Group.
Sales of network capacity that do not meet the above criteria are accounted for as an operating lease.
2.19.4 Gains or losses from sale and leaseback
Gains on sale and leaseback transactions resulting in finance leases are deferred and amortised over the lease term
on a straight-line basis, while losses are recognised immediately in the income statement.
Gains and losses on sale and leaseback transactions established at fair value which resulted in operating leases are
recognised immediately in the income statement.
2.19.5 Capacity Swaps
The Group may exchange network capacity with other capacity or service providers. The exchange is regarded as a
transaction which generates revenue unless the transaction lacks commercial substance or the fair value of neither
the capacity received nor the capacity given up is reliably measurable.
2. 20 Revenu e Recognition
Revenue for the Group is recognised based on the fair value for the sale of goods and services rendered, net of goods
and services tax, rebates and discounts, and after eliminating sales within the Group. Revenue includes the gross
income received and receivable from revenue sharing arrangements entered into with overseas telecommunication
companies in respect of traffic exchanged.
For phone cards and prepaid cards which have been sold, provisions for unearned revenue are made for services
which have not been rendered as at balance sheet date. Expenses directly attributable to the unearned revenue are
deferred until the revenue is recognised.
Revenue from the provision of information technology services is recognised based on the percentage of completion
of the projects using cost-to-cost basis. Revenue from information technology services where the services involve
substantially the procurement of computer equipment and third party software for installation is recognised upon full
completion of the project.
Revenue from the sale of equipment is recognised upon the transfer of significant risks and rewards of ownership of
the goods to the customer which generally coincides with delivery and acceptance of the goods sold.
Dividend income is recorded gross in the income statement when the right to receive payment is established.
Interest income is recognised on a time proportion basis using the effective interest method.
Rental income from operating leases is recognised on a straight-line basis over the term of the lease.
106 singapore telecommunications limited and suBsidiarY companies
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
2.21 Employees’ Benefits
2.21.1 Defined contribution plans
Defined contribution plans are post-employment benefit plans under which the Group pays fixed contributions into
separate entities such as the Central Provident Fund. The Group has no legal or constructive obligation to pay further
contributions if any of the funds does not hold sufficient assets to pay all employee benefits relating to employee
services in the current and preceding financial years.
The Group’s contributions to the defined contribution plans are recognised in the income statement as expenses in
the financial year to which they relate.
2.21.2 Employees’ leave entitlements
Employees’ entitlements to annual leave and long service leave are recognised when they accrue to employees. A
provision is made for the estimated liability for the annual leave and long service leave as a result of services rendered
by employees up to the balance sheet date.
2.21.3 Share-based compensation
Performance shares
The performance share plans of the Group are accounted for either as equity-settled share-based payments or cash-
settled share-based payments. Equity-settled share-based payments are measured at fair value at the date of grant,
whereas cash-settled share-based payments are measured at current fair value at each balance sheet date. The
performance share expense is amortised and recognised in the income statement on a straight-line basis over the
vesting period.
At each balance sheet date, the Group revises its estimates of the number of performance shares that the participants
are expected to receive based on non-market vesting conditions. The difference is charged or credited to the income
statement, with a corresponding adjustment to equity or liability for equity-settled and cash-settled share-based
payments respectively.
The dilutive effect of Share Plan 2004 is reflected as additional share dilution in the computation of diluted earnings
per share.
Share options
As the share options were granted before 22 November 2002, FRS 102, Share-based Payment, is not applicable. No
compensation expense is recognised for the outstanding share options under the share option schemes.
The proceeds received, net of any directly attributable transaction costs, from the exercise of share options are
credited to ‘Share Capital’.
The dilutive effect of outstanding share options is reflected as additional share dilution in the computation of diluted
earnings per share.
2.22 Borrowing Costs
Borrowing costs include interest, amortisation of discounts or premiums relating to borrowings, amortisation of
ancillary costs incurred in arranging borrowings, and finance lease charges. Borrowing costs are generally expensed
as incurred, except to the extent that they are capitalised if they are directly attributable to the acquisition, construction,
or production of a qualifying asset.
singtel annual report 2008 / 2009 107
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
2. 23 Customer Acquisition Co sts
Customer acquisition costs, including related sales and promotion expenses and activation commissions, are expensed
as incurred.
2. 24 Pre-incorporation Expense s
Pre-incorporation expenses are expensed as incurred.
2. 25 Govern ment Grants
Grants in recognition of specific expenses are recognised in the income statement over the periods necessary to
match them with the relevant expenses they are intended to compensate. Grants related to depreciable assets are
deferred and recognised in the income statement over the period in which such assets are depreciated and used in
the projects subsidised by the grants.
2. 26 Exceptional Items
Exceptional items refer to items of income or expense within the income statement from ordinary activities that are
of such size, nature or incidence that their separate disclosure is considered necessary to explain the performance
for the financial year.
2. 27 Deferred Taxation
Deferred taxation is provided in full, using the liability method, on all temporary differences at the balance sheet date
between the tax bases of assets and liabilities and their carrying amounts in the financial statements. However, if
the deferred income tax arises from initial recognition of an asset or liability in a transaction other than a business
combination that at the time of the transaction affects neither accounting nor taxable profit or loss, it is not accounted
for. Deferred income tax is also not recognised for goodwill which is not deductible for tax purposes. The amount
of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of
assets and liabilities, using tax rates (and laws) enacted or substantively enacted in countries where the Company and
subsidiaries operate by, at the balance sheet date.
Deferred tax liabilities are provided on all taxable temporary differences arising on investments in subsidiaries,
associated and joint venture companies, except where the timing of the reversal of the temporary difference can be
controlled and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred tax assets are recognised for all deductible temporary differences and carry forward of unutilised tax losses,
to the extent that it is probable that future taxable profit will be available against which the deductible temporary
differences and carry forward of unused losses can be utilised.
At each balance sheet date, the Group re-assesses unrecognised deferred tax assets and the carrying amount of
deferred tax assets. The Group recognises a previously unrecognised deferred tax asset to the extent that it is probable
that future taxable profit will allow the deferred tax asset to be recovered. The Group conversely reduces the carrying
amount of a deferred tax asset to the extent that it is no longer probable that sufficient future taxable profit will be
available to allow the benefit of part or all of the deferred tax asset to be utilised.
Current and deferred tax are charged or credited directly to equity if the tax relates to items that are credited or
charged, in the same or different period, directly to equity.
108 singapore telecommunications limited and suBsidiarY companies
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
2.28 D ividends
Interim dividends are recorded in the financial year in which they are declared payable. Final dividends are recorded
in the financial year in which the dividends are approved by the shareholders.
2.29 Segment Rep orting
A geographical segment is engaged in providing products and services within a particular economic environment that
is subject to risks and returns that are different from those segments operating in other economic environments. A
business segment is a group of assets and operations engaged in providing products or services that are subject to
risks and returns that are different from those of other business segments.
2.30 Non-cu rre nt Assets (or Dis pos al Grou ps ) Held fo r Sa le an d D iscon tin u e d Op era tion s
Non-current assets (or disposal groups) are classified as assets held for sale and stated at the lower of carrying
amount and fair value less costs to sell if their carrying amounts are recovered principally through sale transactions
rather than through continuing use.
3.
CRITICAL ACCOUNTING ES T IMATE S A ND J UD G E ME N TS
FRS 1, Presentation Of Financial Statements, requires disclosure of the judgements management has made in the
process of applying the accounting policies that have the most impact on the amounts recognised in the financial
statements. It also requires disclosure about the key assumptions concerning the future, and other key sources of
estimation uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next financial year. The estimates and assumptions are based on
historical experience and other factors that are considered relevant. Actual results may differ from these estimates.
The following presents a summary of the critical accounting estimates and judgments -
3.1
Impairment Review s
The accounting policies for impairment of non-financial assets are stated in Note 2.16.
During an impairment review, the Group assesses whether the carrying amount of an asset or cash-generating unit
exceeds its recoverable amount. Recoverable amount is defined as the higher of an asset’s or cash generating unit’s
fair value less costs to sell and its value-in-use. In making this judgement, the Group evaluates the value-in-use which
is supported by the net present value of future cash flows derived from such assets using cash flow projections which
have been discounted at an appropriate rate.
Forecasts of future cash flows are based on the Group’s estimates using historical, sector and industry trends, general
market and economic conditions, changes in technology and other available information.
The assumptions used by management to determine the value-in-use calculations of goodwill on acquisition of
subsidiaries, and carrying values of associated and joint venture companies are stated in Note 24.
singtel annual report 2008 / 2009 109
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
3. 2
Impairment of Trade Rece ivable s
The Group assesses at each balance sheet date whether there is objective evidence that trade receivables have been
impaired. Impairment loss is calculated based on a review of the current status of existing receivables and historical
collections experience. Such provisions are adjusted periodically to reflect the actual and anticipated experience.
3. 3
Estimated Useful Lives o f P ro pe rt y, P la n t an d E q u ipm en t
The Group reviews annually the estimated useful lives of property, plant and equipment based on factors such as
business plans and strategies, expected level of usage and future technological developments. It is possible that
future results of operations could be materially affected by changes in these estimates brought about by changes
in the factors mentioned above. A reduction in the estimated useful lives of property, plant and equipment would
increase the recorded depreciation and decrease the carrying value of property, plant and equipment.
3. 4
Taxation
3.4.1 Deferred tax asset
The Group reviews the carrying amount of deferred tax asset at each balance sheet date. Deferred tax asset is
recognised to the extent that it is probable that future taxable profit will be available against which the temporary
differences can be utilised. This involves judgement regarding the future financial performance of the particular legal
entity or tax group in which the deferred tax asset has been recognised.
3.4.2
Income taxes
The Group is subject to income taxes in numerous jurisdictions. Judgement is involved in determining the group-wide
provision for income taxes. There are certain transactions and computations for which the ultimate tax determination
is uncertain during the ordinary course of business. The Group recognises liabilities for expected tax issues based
on estimates of whether additional taxes will be due. Where the final outcome of these matters is different from the
amounts that were initially recognised, such differences will impact the income tax and deferred tax provisions in the
period in which such determination is made.
3. 5
Share-based Payment s
Equity-settled share-based payments are measured at fair value at the date of grant, whereas cash-settled share-
based payments are measured at current fair value at each balance sheet date. In addition, the Group revises the
estimated number of performance shares that participants are expected to receive based on non-market vesting
conditions at each balance sheet date.
The assumptions of the valuation model used to determine fair values are set out in Note 5.3.
3.6
Contingent Liab ilities
The Group consults with legal counsel on matters related to litigation, and other experts both within and outside the
Group with respect to matters in the ordinary course of business.
As at 31 March 2009, the Group was involved in various legal proceedings where it has been vigorously defending its
claims as disclosed in Note 41.
110 singapore telecommunications limited and suBsidiarY companies
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
4.
OPERATING REVENUE
Mobile communications
Data and internet
National telephone
Information technology and engineering
Sale of equipment
International telephone
Pay television
Others
Operating revenue
Operating revenue
Other income (see Note 6)
Interest and dividend income (see Note 10)
Total revenue
5.
OPERATING EXP EN SES
Traffic expenses
Selling and administrative costs (1)
Staff costs
Equipment costs
Repairs and maintenance
Others
Group
2009
S$ Mil
2008
S$ Mil
5,935.6
3,109.8
1,861.6
1,557.1
1,221.3
800.0
161.1
287.9
5,976.3
3,057.0
2,267.3
1,230.7
1,086.4
786.6
180.6
259.5
14,934.4
14,844.4
14,934.4
92.1
56.8
14,844.4
78.3
51.5
15,083.3
14,974.2
Group
2009
S$ Mil
2008
S$ Mil
2,497.4
3,544.8
1,965.7
1,681.6
299.0
606.8
2,706.8
3,410.5
1,943.7
1,371.2
299.0
661.3
10,595.3
10,392.5
Note:
(1) Include mobile and broadband subscriber acquisition and retention costs, supplies and services, as well as rental of properties
and mobile base stations.
singtel annual report 2008 / 2009 111
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
5. 1
Staff Costs
Staff costs included the following -
Contributions to defined contribution plans
Performance share expense
- equity-settled arrangements
- cash-settled arrangements
Termination benefits
5. 2 K ey Management Personnel Co mpe nsa tio n
Key management personnel compensation (1)
Directors’ fees and remuneration (2)
Other key management personnel remuneration (3)
Group
2009
S$ Mil
2008
S$ Mil
189.2
184.7
24.9
2.6
8.3
32.7
7.6
5.1
Group
2009
S$ Mil
2008
S$ Mil
5.2
9.2
14.4
5.3
10.8
16.1
Notes:
(1) Comprised base salary, annual wage supplement, bonus, contributions to defined contribution plans and other cash benefits,
and does not include performance share expense.
(2) The Director was awarded up to 1,123,464 (2008: 1,031,517) ordinary shares of SingTel pursuant to Share Plan 2004 during the
year, subject to certain performance criteria including other terms and conditions being met. The performance share expense
for the Director computed in accordance with FRS 102, Share-based Payment, was S$1.7 million (2008: S$2.1 million).
(3) The other key management personnel were awarded up to 3,004,063 (2008: 2,764,892) ordinary shares of SingTel pursuant to
Share Plan 2004 during the year, subject to certain performance criteria including other terms and conditions being met. The
performance share expense for other key management computed in accordance with FRS 102, Share-based Payment, was S$5.1
million (2008: S$6.3 million).
The other key management personnel of the Group comprise members of SingTel’s Management Committee.
112 singapore telecommunications limited and suBsidiarY companies
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
5.3
Sh are-based Payments
5.3.1 Share options
In 2003, the Singapore Telecom Share Option Scheme 1999 was suspended with the implementation of Share Plan
2003. The existing share options granted continue to vest according to the terms and conditions of the scheme and
the respective grants.
The share options have a validity period of ten years from the date of grant, and are granted either without performance
hurdles (“Market Price Share Options”) or with performance hurdles (“Performance Share Options”).
Market Price Share Options are granted based on the performance of the Group and individuals. These share options
vest over three years from the date of the grant and are exercisable after the first anniversary of the date of the grant
and will expire on the tenth anniversary of the date of grant.
Performance Share Options are conditional grants where vesting is conditional on performance targets set based on
medium-term corporate objectives. At the end of the three-year performance period, the final number of Performance
Share Options awarded will depend on the level of achievement of those targets.
Group and Company
Outstanding as at 1 Apr
Cancelled
Exercised
Number of
share options
2009
‘000
25,305
(275)
(6,051)
2008
‘000
40,673
(192)
(15,176)
Outstanding and exercisable as at 31 Mar
18,979
25,305
The outstanding share options have the following exercise prices -
S$2.50 to S$2.85
S$2.00 to S$2.49
S$1.50 to S$1.99
S$1.40 to S$1.49
Weighted
average
exercise price
per share
2009
S$
1.80
1.63
1.95
1.75
2009
‘000
1,870
3,630
5,985
7,494
2008
S$
1.97
1.81
2.08
1.80
2008
‘000
2,831
6,256
7,088
9,130
18,979
25,305
Weighted average remaining validity life
2.3 years
3.2 years
No compensation expense is recognised when the share options are issued (see Note 2.21.3).
singtel annual report 2008 / 2009 113
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
5.3.2 Performance share plans
Two categories of awards – General Awards given to selected staff and Senior Management Awards for senior
management staff – are made on an annual basis at the discretion of the Group. The grants are conditional on the
achievement of targets set for a three-year performance period. The performance shares will only be released to the
recipients at the end of the qualifying performance period. The final number of performance shares will depend on
the level of achievement of the targets over the three-year period.
The General Awards are generally settled by delivery of SingTel shares, while the Senior Management Awards are
generally settled by SingTel shares or cash, at the option of the recipient.
Additionally, early vesting of the performance shares can also occur under special circumstances approved by the
Compensation Committee such as retirement, redundancy, illness and death whilst in employment.
The performance share plans provide for the award of performance shares to selected employees of SingTel and its
subsidiaries. Though the performance shares are awarded by SingTel, the respective subsidiaries that wish to provide
incentives to their own employees to retain and encourage their continued service, bear all costs and expenses in any
way arising out of, or connected with, the grant and vesting of the awards to their employees.
The fair value of the performance shares are estimated using a Monte-Carlo simulation methodology at the
measurement dates, which are grant dates for equity-settled awards, and balance sheet dates for cash-settled
awards.
General Awards - equity-settled arrangements
The movements of the number of performance shares for the General Awards during the financial year were as
follows -
Group and Company
2009
Date of grant
Share Plan 2004
FY2006 (1)
26 May 05
Aug 05 to Feb 06
FY2007
25 May 06
Aug 06 to Mar 07
FY2008
29 May 07
Sep 07 to Feb 08
Outstanding
as at
1 Apr 08
‘000
22,424
1,208
28,936
468
16,255
215
Outstanding
and unvested
as at
Granted
‘000
Vested
‘000
Cancelled
31 Mar 09
‘000
‘000
-
-
-
-
-
-
(19,503)
(997)
(210)
-
(52)
-
(2,921)
(211)
(2,438)
(378)
(1,447)
(8)
-
-
26,288
90
14,756
207
114 singapore telecommunications limited and suBsidiarY companies
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
5.3.2 Performance share plans (cont’d)
Group and Company
2009
FY2009
4 Jun 08
Sep 08 to Mar 09
Outstanding
as at
1 Apr 08
‘000
Outstanding
and unvested
as at
Granted
‘000
Vested
‘000
Cancelled
31 Mar 09
‘000
‘000
-
-
14,248
1,143
-
-
(927)
-
13,321
1,143
69,506
15,391
(20,762)
(8,330)
55,805
Note:
(1) “FY2006” denotes financial year ended 31 March 2006.
Outstanding
and unvested
as at
Granted
‘000
Vested
‘000
Cancelled
31 Mar 08
‘000
‘000
Outstanding
as at
1 Apr 07
‘000
24,178
516
25,032
1,362
33,233
468
Group and Company
2008
Date of grant
Share Plan 2004
FY2005
26 May 04
Sep to Nov 04
FY2006
26 May 05
Aug 05 to Feb 06
FY2007
25 May 06
Aug 06 to Mar 07
FY2008
29 May 07
Sep 07 to Feb 08
-
-
-
-
-
-
(17,925)
(387)
(6,253)
(129)
-
-
(457)
(85)
(418)
-
(18)
-
(2,151)
(69)
22,424
1,208
(3,879)
-
28,936
468
(1,123)
(45)
16,255
215
-
-
17,396
260
84,789
17,656
(19,290)
(13,649)
69,506
singtel annual report 2008 / 2009 115
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
5.3.2 Performance share plans (cont’d)
The fair values of the significant General Awards at grant date and the assumptions of the fair value model for the
equity-settled grants were as follows -
2009 and 2008
General Awards
Date of grant
Share Plan 2004
FY2007
25 May 06
FY2008
29 May 07
FY2009
4 Jun 08
Fair value at grant date
S$1.09
S$1.95
S$1.61
Assumptions under Monte-Carlo Model
Expected volatility
SingTel
MSCI Asia Pacific Telco Index
MSCI Asia Pacific Telco Component Stocks
Historical volatility period
From
To
Risk free interest rates
Yield of Singapore Government
Securities on
21.6%
15.5%
22.8%
13.7%
25.9%
17.6%
Jul 01
May 06
Jul 01
May 07
Jul 01
Jun 08
25 May 06
29 May 07
4 Jun 08
116 singapore telecommunications limited and suBsidiarY companies
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
5.3.2 Performance share plans (cont’d)
Senior Management Awards - cash-settled arrangements
The movements of the number of performance shares under the Senior Management Awards, the fair value of the
grants at balance sheet date and the assumptions of the fair value model for the relevant grants were as follows -
2009
FY2006
FY2007
FY2008
26 May 05
25 May 06
29 May 07
FY2009
4 Jun 08
Date of grant
Share Plan 2004
Group
And
Company
Senior Management Awards
Number of performance shares (‘000)
Outstanding as at 1 Apr 08
Granted
Vested
Cancelled
Outstanding and unvested
as at 31 Mar 09
1,474
-
(1,397)
(77)
2,122
-
-
(142)
2,058
-
-
-
-
2,190
-
(116)
5,654
2,190
(1,397)
(335)
-
1,980
2,058
2,074
6,112
Fair value at 31 Mar 09
S$2.53
S$2.12
S$1.58
Assumptions under Monte-Carlo Model
Expected volatility
SingTel
MSCI Asia Pacific Telco Index
MSCI Asia Pacific Telco Component
Stocks
Risk free interest rates
Yield of Singapore Government
Securities on
33.5%
22.9%
33.5%
22.9%
800 days historical volatility
preceding Mar 09
31 Mar 09
31 Mar 09
singtel annual report 2008 / 2009 117
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
5.3.2 Performance share plans (cont’d)
2008
26 May 04
26 May 05
25 May 06
29 May 07
Company
Date of grant
Share Plan 2004
FY2005
FY2006
FY2007
FY2008
Group
And
Senior Management Awards
Number of performance shares (‘000)
Outstanding as at 1 Apr 07
Granted
Vested
Cancelled
Outstanding and unvested
as at 31 Mar 08
1,677
-
(1,668)
(9)
2,219
-
(497)
(248)
3,081
-
(338)
(621)
-
2,154
(22)
(74)
6,977
2,154
(2,525)
(952)
-
1,474
2,122
2,058
5,654
Fair value at 31 Mar 08
S$3.91
S$3.64
S$3.03
Assumptions under Monte-Carlo Model
Expected volatility
SingTel
MSCI Asia Pacific Telco Index
MSCI Asia Pacific Telco Component
Stocks
Risk free interest rates
Yield of Singapore Government
Securities on
25.9%
17.3%
25.9%
17.3%
800 days historical volatility
preceding Mar 08
31 Mar 08
31 Mar 08
118 singapore telecommunications limited and suBsidiarY companies
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
5.3.3 Performance-based Deferred Bonus Scheme (“PBDBS”)
With effect from 2004, discretionary PBDBS units are granted to selected overseas local hires. While these units have
the same vesting criteria as the Share Plan 2004, the payout is in the form of cash instead of shares. The recipients are
encouraged to purchase and hold SingTel shares with the cash payout, in line with the objective of the performance
share plans.
2009
Date of grant
FY2006
FY2007
FY2008
26 May 05
25 May 06
29 May 07
FY2009
4 Jun 08
Group
PBDBS (cash-settled)
Number of performance shares (‘000)
Outstanding as at 1 Apr 08
Granted
Vested
Cancelled
Outstanding and unvested
as at 31 Mar 09
459
-
(312)
(147)
1,113
-
-
(160)
676
-
-
(63)
-
655
-
(33)
2,248
655
(312)
(403)
-
953
613
622
2,188
Fair value at 31 Mar 09
S$2.55
S$1.56
S$1.02
Assumptions under Monte-Carlo Model
Expected volatility
SingTel
MSCI Asia Pacific Telco Index
MSCI Asia Pacific Telco Component
Stocks
Risk free interest rates
Yield of Singapore Government
Securities on
33.5%
22.9%
33.5%
22.9%
800 days historical volatility
preceding Mar 09
31 Mar 09
31 Mar 09
singtel annual report 2008 / 2009 119
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
5.3.3 Performance-based Deferred Bonus Scheme (“PBDBS”) (cont’d)
2008
26 May 04
26 May 05
25 May 06
29 May 07
Group
Date of grant
FY2005
FY2006
FY2007
FY2008
PBDBS (cash-settled)
Number of performance shares (‘000)
Outstanding as at 1 Apr 07
Granted
Vested
Cancelled
Outstanding and unvested
as at 31 Mar 08
474
-
(323)
(151)
487
-
-
(28)
1,191
-
-
(78)
-
676
-
-
2,152
676
(323)
(257)
-
459
1,113
676
2,248
Fair value at 31 Mar 08
S$3.96
S$2.65
S$2.43
Assumptions under Monte-Carlo Model
Expected volatility
SingTel
MSCI Asia Pacific Telco Index
MSCI Asia Pacific Telco Component
Stocks
Risk free interest rates
Yield of Singapore Government
Securities on
5. 4
Special Purpose E ntity
25.9%
17.3%
25.9%
17.3%
800 days historical volatility
preceding Mar 08
31 Mar 08
31 Mar 08
The Trust’s purpose is to purchase the Company’s shares from the open market for delivery to the recipients upon
vesting of the awards.
As at balance sheet date, the Trust held the following assets -
Cash at bank
Cost of SingTel shares, net of vesting
Group
2009
S$ Mil
2008
S$ Mil
Company
2009
S$ Mil
2008
S$ Mil
0.8
43.7
44.5
0.8
50.1
50.9
0.5
28.5
29.0
0.5
31.5
32.0
120 singapore telecommunications limited and suBsidiarY companies
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
5.4
Special P urpose Entity (cont’d)
The details of SingTel shares held by the Trust were as follows -
Group
Balance as at 1 Apr
Purchase of SingTel shares
Vesting of shares
Number of shares
Amount
2009
‘000
15,382
10,970
(13,049)
2008
‘000
16,257
10,680
(11,555)
2009
S$ Mil
50.1
36.9
(43.3)
2008
S$ Mil
42.4
38.9
(31.2)
Balance as at 31 Mar
13,303
15,382
43.7
50.1
Upon consolidation of the Trust in the consolidated financial statements, the weighted average cost of vested SingTel
shares is taken to ‘Capital Reserve - Performance Shares’ whereas the weighted average cost of unvested shares is
taken to ‘Treasury Shares Held By Trust’ within equity. See Note 2.3.
5.5 Other Operating Expense Items
Operating expenses included the following -
Auditors’ remuneration
- Deloitte & Touche LLP, Singapore
- Deloitte Touche Tohmatsu, Australia
- Other Deloitte & Touche offices
Non-audit fees paid to
- Deloitte & Touche LLP, Singapore (1)
- Deloitte Touche Tohmatsu, Australia (1)
- Other statutory auditors
Impairment of trade receivables
Allowance for inventory obsolescence
Inventory written off
Provision for liquidated damages and warranties
Research and development expenses written off
Operating lease payments for property and mobile base stations
Group
2009
S$ Mil
2008
S$ Mil
0.7
0.7
0.2
0.5
0.3
2.0
127.7
11.6
2.6
2.2
0.6
226.9
0.6
0.8
0.2
0.5
0.6
2.0
128.9
8.9
2.5
1.7
0.2
266.5
Note:
(1) The non-audit fees for the current financial year ended 31 March 2009 included S$0.1 million (2008: S$0.2 million) and
S$0.3 million (2008: S$0.4 million) paid to Deloitte & Touche LLP, Singapore, and Deloitte Touche Tohmatsu, Australia, respectively
in respect of certification and review for regulatory purposes.
singtel annual report 2008 / 2009 121
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
5. 5 Other Operating Expense Item s (cont’d )
The Audit Committee had undertaken a review of the non-audit services provided by the auditors, Deloitte & Touche
LLP, and in the opinion of the Audit Committee, these services would not affect the independence of the auditors.
6.
OTHER INCOME
Bad trade receivables recovered
Rental income
Net exchange losses - trade related
Net losses on disposal of property, plant and equipment
Others
7.
D EPRECIATIO N AN D AMOR TIS AT ION
Depreciation of property, plant and equipment
Amortisation of intangible assets
Amortisation of sale and leaseback income
Amortisation of deferred gain on sale of joint venture company
Group
2008
S$ Mil
9.8
4.8
(22.3)
(13.0)
99.0
2009
S$ Mil
9.4
4.6
(19.9)
(6.7)
104.7
92.1
78.3
Group
2008
S$ Mil
1,835.7
54.9
(2.2)
(1.5)
2009
S$ Mil
1,685.8
52.8
(2.8)
(3.1)
1,732.7
1,886.9
122 singapore telecommunications limited and suBsidiarY companies
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
8.
EXCEPTIONAL ITEMS
Exceptional gains
Write-back of impairment for property, plant and equipment
Gain on disposal of subsidiary
Gain on sale of interest in joint venture companies
Gain on dilution of interest in associated and joint venture companies
Recovery of loan previously written off
Exceptional losses
Impairment on goodwill of associated and joint venture companies
(see Note 24.2)
Loss from share swap of a joint venture company
Impairment of property, plant and equipment, and/ or intangible assets
Impairment of non-current investments
Others
9.
SHARE OF RESULTS OF ASS OCIAT ED A ND JO IN T VE NT U RE C O MPANI ES
Share of ordinary results of
- joint venture companies
- associated companies
Group
2009
S$ Mil
2008
S$ Mil
10.8
1.7
3.6
4.1
-
20.2
(330.0)
-
(3.5)
(1.3)
(5.0)
(339.8)
-
-
71.2
9.9
1.2
82.3
-
(99.3)
(4.8)
(28.3)
-
(132.4)
(319.6)
(50.1)
Group
2009
S$ Mil
2008
S$ Mil
2,098.0
(67.5)
2,030.5
2,575.7
15.5
2,591.2
Share of exceptional items (1) of joint venture companies
200.8
121.2
Share of tax of
- joint venture companies
- associated companies
(426.6)
(8.6)
(435.2)
(637.3)
(8.6)
(645.9)
1,796.1
2,066.5
singtel annual report 2008 / 2009 123
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
9.
SHARE OF RESULTS OF ASS OCIAT ED A ND J OI NT VE NT U RE C O MPANI ES (co n t’ d )
Note:
(1) Share of exceptional items comprised -
Gain on dilution of equity interest in a subsidiary
Write-back of overprovision for concession rights payable
Gain on disposal of property, plant and equipment
Write-back of impairment for property, plant and equipment
Impairment on goodwill of a subsidiary
Recognition of prior years’ frequency fees
Accrual for compensation payment to local regulator
Accrual for withholding tax relating to prior years
Impairment of property, plant and equipment
Others
Group
2009
S$ Mil
2008
S$ Mil
224.5
15.6
8.5
3.7
(44.3)
(15.4)
-
-
-
8.2
153.4
-
-
-
-
-
(14.3)
(6.8)
(4.2)
(6.9)
200.8
121.2
In January 2008, PT Telekomunikasi Selular (“Telkomsel”), a 35.0%-owned joint venture of the Group, filed an objection
for alleged underpayment of withholding and value added tax, including a penalty, totalling 408 billion Indonesian
Rupiah (Group’s proportionate share: S$19 million). During the financial year, the Indonesian Tax Authorities accepted
the appeal of 141 billion Indonesian Rupiah. Telkomsel then filed an appeal to the Indonesian Tax Court for the rejected
215 billion Indonesian Rupiah (Group’s proportionate share: S$10 million). As at 31 March 2009, Telkomsel has yet to
receive the Indonesian Tax Authorities’ decision on the objection and believes that such amount will be refundable.
The Indonesian Tax Authorities might raise similar issues for transactions occurring subsequent to 2005 fiscal year.
124 singapore telecommunications limited and suBsidiarY companies
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
10.
INTERES T AND INVESTME NT INCO ME ( NE T)
Interest income from
- bank deposits
- FVTPL investments
- others
Gross dividends from AFS investments
Other revenue
Currency translation differences released upon
capital reduction of subsidiaries
Net exchange losses
Net losses on FVTPL investments
Fair value (losses)/ gains on FVTPL investments
Fair value (losses)/ gains on fair value hedges
- hedged items
- hedging instruments
11.
FINANCE COSTS
Interest expense
- bonds
- bank loans
- others
Less: Amounts capitalised in the balance sheet
Effects of hedging using interest-rate swaps
Unwinding of discount (including adjustments)
Group
2009
S$ Mil
2008
S$ Mil
33.1
0.5
1.1
34.7
22.1
56.8
83.9
(8.1)
-
(0.2)
(411.1)
411.1
-
43.2
5.6
1.1
49.9
1.6
51.5
195.1
(30.8)
(0.4)
0.8
83.1
(83.1)
-
132.4
216.2
Group
2009
S$ Mil
360.3
71.1
4.9
436.3
(11.7)
424.6
(68.8)
4.9
2008
S$ Mil
402.4
59.3
7.1
468.8
(13.1)
455.7
(60.5)
(2.3)
360.7
392.9
As at 31 March 2009, the interest rate applicable to the capitalised borrowings was 7.7 per cent (2008: 7.5 per cent).
singtel annual report 2008 / 2009 125
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
12.
TAXATION
12. 1 Tax Expense
Current income tax
- Singapore
- Overseas
Deferred income tax
Group
2008
S$ Mil
260.6
433.1
693.7
2009
S$ Mil
238.2
397.9
636.1
7.9
(8.4)
Tax expense attributable to current year's profit
644.0
685.3
Recognition of deferred tax asset on other temporary differences (1)
(90.4)
(162.3)
Adjustments in respect of prior year -
Current income tax
- under/ (over) provision
Deferred income tax
- (over)/ under provision
0.7
(33.1)
(56.8)
32.4
497.5
522.3
Note:
(1) This relates to a deferred tax asset recognised on interest expense arising from inter-company loans.
126 singapore telecommunications limited and suBsidiarY companies
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
12.1 Tax Expense (cont’d)
The tax expense on the profits was different from the amount that would arise using the Singapore standard rate of
income tax due to the following -
Profit before tax
Less: Share of results of associated and joint venture companies
Tax calculated at tax rate of 17 per cent (2008: 18 per cent)
Effects of -
Different tax rates of other countries
Income not subject to tax
Expenses not deductible for tax purposes
Deferred tax asset not recognised
Deferred tax asset previously not recognised now recognised
Others
2009
S$ Mil
3,946.7
(1,796.1)
2,150.6
Group
2008
S$ Mil
4,483.0
(2,066.5)
2,416.5
365.6
435.0
229.6
(13.1)
66.6
0.8
(4.0)
(1.5)
246.9
(36.7)
41.6
1.7
(1.5)
(1.7)
Tax expense attributable to current year’s profits
644.0
685.3
12.2 Deferred Taxes
The movements of the deferred tax assets and liabilities (prior to offsetting of balances within the same tax jurisdiction)
during the financial year were as follows -
Group - 2009
Deferred tax liabilities
Balance as at 1 Apr 08
Acquisition of subsidiary
Charged/ (Credited) to income statement
Transfer from current tax
Disposal of subsidiary
Translation difference
Accelerated
tax
depreciation
S$ Mil
Offshore
interest and
dividend
not remitted
S$ Mil
282.0
0.5
6.0
-
0.1
0.1
43.1
-
(41.2)
3.2
-
-
Others
S$ Mil
18.5
10.8
(2.7)
-
-
0.1
Total
S$ Mil
343.6
11.3
(37.9)
3.2
0.1
0.2
Balance as at 31 Mar 09
288.7
5.1
26.7
320.5
singtel annual report 2008 / 2009 127
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
12. 2 Deferred Taxes (cont’d)
Group - 2009
Deferred tax assets
Balance as at 1 Apr 08
Acquisition of subsidiary
(Credited)/ Charged to income statement
Taken to equity
Transfer to/ (from) current tax
Disposal of subsidiary
Translation differences
TWDV (1) in
excess of
NBV (2) of
depreciable
assets
S$ Mil
Tax losses
and
unutilised
capital
allowances
S$ Mil
(380.4)
-
(13.2)
-
-
-
65.1
(135.1)
(0.7)
0.3
-
39.5
-
20.7
Provisions
S$ Mil
(458.3)
(0.1)
(100.2)
-
167.9
-
79.6
Others
S$ Mil
(123.3)
(3.2)
11.7
(3.3)
(5.8)
1.0
18.8
Total
S$ Mil
(1,097.1)
(4.0)
(101.4)
(3.3)
201.6
1.0
184.2
Balance as at 31 Mar 09
(311.1)
(328.5)
(75.3)
(104.1)
(819.0)
Group - 2008
Deferred tax liabilities
Balance as at 1 Apr 07
Credited to income statement
Transfer from current tax
Accelerated
tax
depreciation
S$ Mil
Offshore
interest and
dividend
not remitted
S$ Mil
285.5
(3.5)
-
45.2
(2.1)
-
Others
S$ Mil
18.2
(1.4)
1.7
Total
S$ Mil
348.9
(7.0)
1.7
Balance as at 31 Mar 08
282.0
43.1
18.5
343.6
Group - 2008
Deferred tax assets
Balance as at 1 Apr 07
(Credited)/ Charged to income statement
Taken to equity
Transfer to/ (from) current tax
Translation differences
TWDV (1) in
Tax losses
excess of
NBV (2) of
depreciable
assets
S$ Mil
and
unutilised
capital
allowances
S$ Mil
(372.7)
4.0
-
-
(11.7)
(9.0)
-
-
(111.4)
(14.7)
Provisions
S$ Mil
(554.8)
(150.1)
-
247.8
(1.2)
Others
S$ Mil
(144.7)
14.8
13.2
(2.1)
(4.5)
Total
S$ Mil
(1,081.2)
(131.3)
13.2
134.3
(32.1)
Balance as at 31 Mar 08
(458.3)
(380.4)
(135.1)
(123.3)
(1,097.1)
Notes:
(1) TWDV – Tax written down value
(2) NBV – Net book value
128 singapore telecommunications limited and suBsidiarY companies
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
12.2 D eferred Taxes (cont’d)
Company - 2009
Deferred tax liabilities
Balance as at 1 Apr 08
Credited to income statement
Balance as at 31 Mar 09
Company - 2009
Deferred tax assets
Balance as at 1 Apr 08
Charged to income statement
Balance as at 31 Mar 09
Company - 2008
Deferred tax liabilities
Balance as at 1 Apr 07
Credited to income statement
Balance as at 31 Mar 08
Company - 2008
Deferred tax assets
Balance as at 1 Apr 07
Charged to income statement
Balance as at 31 Mar 08
Accelerated
tax
depreciation
S$ Mil
197.6
(7.5)
190.1
Provisions
S$ Mil
(0.3)
-
(0.3)
Accelerated
tax
depreciation
S$ Mil
214.5
(16.9)
197.6
Provisions
S$ Mil
(17.8)
17.5
(0.3)
Interest
and
investment
income
S$ Mil
-
-
-
Deferred
sale and
leaseback
income
S$ Mil
(1.2)
0.3
(0.9)
Interest
and
investment
income
S$ Mil
0.1
(0.1)
-
Deferred
sale and
leaseback
income
S$ Mil
(1.4)
0.2
(1.2)
Offshore
interest
and
dividend
not remitted
S$ Mil
40.9
(40.9)
Total
S$ Mil
238.5
(48.4)
-
190.1
Others
S$ Mil
(2.5)
0.3
(2.2)
Offshore
interest
and
dividend
not remitted
S$ Mil
40.9
-
40.9
Others
S$ Mil
(5.0)
2.5
(2.5)
Total
S$ Mil
(4.0)
0.6
(3.4)
Total
S$ Mil
255.5
(17.0)
238.5
Total
S$ Mil
(24.2)
20.2
(4.0)
singtel annual report 2008 / 2009 129
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
12. 2 Deferred Taxes (cont’d)
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set-off current tax assets
against current tax liabilities, and when deferred income taxes relate to the same fiscal authority.
The amounts, determined after appropriate offsetting, are shown in the balance sheets as follows -
Deferred tax assets
Deferred tax liabilities
Group
Company
2009
S$ Mil
2008
S$ Mil
(806.4)
307.9
(1,083.0)
329.5
2009
S$ Mil
-
186.7
2008
S$ Mil
-
234.5
(498.5)
(753.5)
186.7
234.5
Deferred tax assets are recognised to the extent that realisation of the related tax benefits through future taxable
profits is probable.
As at 31 March 2009, the subsidiaries of the Group had estimated unutilised income tax losses of approximately S$328
million (2008: S$521 million), including S$248 million (2008: S$448 million) from the Optus Group, unutilised capital
tax losses of S$21 million (2008: S$26 million) and unabsorbed capital allowances of approximately S$1.5 million
(2008: S$1.2 million).
These unutilised income tax losses and unabsorbed capital allowances are available for set-off against future taxable
profits, subject to the agreement of the relevant tax authorities and compliance with certain provisions of the income
tax regulations of the respective countries in which the subsidiaries operate. The unutilised capital tax losses are
available for set-off against future capital gains of a similar nature subject to compliance with certain statutory tests
in Australia.
As at the balance sheet date, the potential tax benefits arising from the following items were not recognised in the
financial statements due to uncertainty on their recoverability -
Unutilised income tax losses and unabsorbed capital allowances
Unutilised capital tax losses
Group
2008
S$ Mil
74.4
25.6
2009
S$ Mil
81.8
21.3
130 singapore telecommunications limited and suBsidiarY companies
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
13.
EARNINGS PER SHARE
Weighted average number of ordinary shares in issue for
calculation of basic earnings per share (1)
Adjustment for dilutive effect of share options
Adjustment for dilutive effect of Share Plan 2004
Group
2009
‘000
2008
‘000
15,911,823
9,136
43,515
15,901,652
15,412
68,039
Weighted average number of ordinary shares for calculation of
diluted earnings per share
15,964,474
15,985,103
Note:
(1) Adjusted to exclude the number of performance shares held by the Trust.
‘Basic earnings per share’ is calculated by dividing the Group’s profit attributable to shareholders of the Company by
the weighted average number of ordinary shares in issue during the financial year.
For ‘Diluted earnings per share’, the weighted average number of ordinary shares in issue included the number
of additional shares outstanding should the potential dilutive ordinary shares arising from the share options and
performance shares granted by the Group have been issued. Adjustment is made to earnings for the dilutive effect
arising from the associated and joint venture companies’ dilutive shares.
singtel annual report 2008 / 2009 131
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
14. RELATED PARTY TRANSACT IONS
Related parties consist of key management of the Group, subsidiaries of the ultimate holding company and associated
and joint venture companies of the Group. In addition to the related party information disclosed elsewhere in the
financial statements, the Group had the following significant transactions and balances with related parties –
Revenue
Subsidiaries of ultimate holding company
Telecommunications
Rental and maintenance
Information technology
Associated and joint venture companies
Telecommunications
Expenses
Subsidiaries of ultimate holding company
Telecommunications
Utilities
Associated and joint venture companies
Telecommunications
Transmission capacity
Postal
Rental
Due from related parties
Due to related parties
Group
2009
S$ Mil
2008
S$ Mil
123.2
29.8
25.2
100.9
29.6
3.1
30.0
22.4
62.4
83.2
106.0
4.5
11.8
-
22.0
5.2
72.9
67.3
121.7
40.9
11.6
1.6
20.0
9.5
All the above transactions were at normal commercial terms and conditions and market rates.
Please refer to Note 5.2 for information on key management personnel compensation.
132 singapore telecommunications limited and suBsidiarY companies
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
15.
CASH AND CASH EQUIVALENTS
Fixed deposits
Cash and bank balances
Group
Company
2009
S$ Mil
506.9
569.1
2008
S$ Mil
1,114.3
257.7
2009
S$ Mil
258.1
75.0
2008
S$ Mil
558.9
55.5
1,076.0
1,372.0
333.1
614.4
The carrying amounts of the cash and cash equivalents approximate their fair values.
For the purpose of the consolidated cash flow statements, cash and cash equivalents comprise -
Fixed deposits
Cash and cash equivalents
Less: Bank overdrafts (see Note 30)
Group
2008
S$ Mil
1,114.3
257.7
(0.1)
2009
S$ Mil
506.9
569.1
(0.2)
1,075.8
1,371.9
Cash and cash equivalents denominated in the non-functional currencies of the Group were as follows –
USD
AUD
EUR
HKD
The maturities of the fixed deposits were as follows -
Less than three months
Over three months
Group
Company
2008
S$ Mil
131.6
475.0
13.5
4.1
2009
S$ Mil
14.7
157.6
3.5
2.1
2008
S$ Mil
86.8
475.0
6.4
3.0
Group
Company
2008
S$ Mil
1,112.8
1.5
2009
S$ Mil
258.1
-
2008
S$ Mil
558.9
-
2009
S$ Mil
65.1
157.9
11.0
3.8
2009
S$ Mil
503.3
3.6
506.9
1,114.3
258.1
558.9
As at 31 March 2009, the weighted average effective interest rates of the fixed deposits of the Group and Company
were 1.0 per cent (2008: 4.6 per cent) and 1.6 per cent (2008: 6.0 per cent) respectively.
The exposure of cash and cash equivalents to interest rate risks is disclosed in Note 37.3.
singtel annual report 2008 / 2009 133
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
16.
TRADE AND OTHER RECEIVA B LE S
Trade receivables
Less: Allowance for impairment of
trade receivables
Group
Company
2009
S$ Mil
2008
S$ Mil
2009
S$ Mil
2008
S$ Mil
2,294.0
2,277.5
453.9
485.7
(260.6)
2,033.4
(283.0)
1,994.5
(82.8)
371.1
(95.7)
390.0
Other receivables
112.5
131.0
18.2
11.9
Loans to subsidiaries
Less: Allowance for impairment of
loans due
Amount due from subsidiaries
- trade
- non-trade
Less: Allowance for impairment of
amount due
Amount due from associated and joint venture
companies
- trade
- non-trade
Loans to associated and joint venture
companies
Interest receivable
Prepayments
Staff loans
Others
-
-
-
-
-
-
-
13.0
91.6
104.6
2.3
111.0
155.4
1.0
11.7
-
-
-
-
-
-
-
16.6
89.3
105.9
20.5
106.5
168.1
1.1
13.3
162.9
93.4
(24.2)
138.7
286.3
486.1
(45.7)
726.7
0.3
1.0
1.3
2.3
83.9
11.4
0.1
5.7
(24.2)
69.2
234.3
828.3
(45.7)
1,016.9
1.9
4.0
5.9
5.3
82.5
10.1
0.1
5.2
2,531.9
2,540.9
1,359.4
1,597.1
The loans to subsidiaries and the balances with subsidiaries, associated and joint venture companies were unsecured,
interest-free and repayable on demand.
In respect of Optus’ action against Telstra Corporation Ltd for breach of the provisions of the Access Agreement
dated 14 August 1992 between the parties, the Federal Court of Australia has in April 2009 delivered judgment on
liability in favour of Optus. As at 31 March 2009, the assessment of damages hearing has not taken place, hence no
receivable has been accrued in the financial statements.
134 singapore telecommunications limited and suBsidiarY companies
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
16.
TRADE AND OTHER RE CEIVA B LE S (con t ’ d )
Trade receivables are non-interest bearing and are generally on 14-day to 30-day terms, while balances due from
carriers are on 60-day terms, and certain balances in respect of information technology and engineering services are
on 90-day terms.
The maximum exposure to credit risk for trade receivables by type of customer is as follows:
Individuals
Corporations and others
Group
Company
2009
S$ Mil
2008
S$ Mil
502.2
1,531.2
681.1
1,313.4
2009
S$ Mil
155.0
216.1
2008
S$ Mil
159.6
230.4
2,033.4
1,994.5
371.1
390.0
The age analysis of trade receivables before allowance for impairment is as follows -
Group
Company
2009
S$ Mil
2008
S$ Mil
2009
S$ Mil
2008
S$ Mil
Not past due or less than 60 days overdue
Past due
- 61 to 120 days
- more than 120 days
1,929.5
1,898.1
336.4
332.0
164.8
199.7
131.5
247.9
38.2
79.3
49.0
104.7
Based on historical collections experience, the Group believes that no allowance for impairment is necessary in
respect of certain trade receivables which are not past due as well as certain trade receivables which are past due but
not impaired.
2,294.0
2,277.5
453.9
485.7
singtel annual report 2008 / 2009 135
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
16.
TRADE AND OTHER RECEIVA B LE S (cont ’ d )
The movement in the allowance for impairment of trade receivables is as follows -
Balance as at 1 Apr
Acquisition of subsidiary
Allowance for impairment
Utilisation
Write-back
Translation difference
Group
Company
2009
S$ Mil
283.0
3.7
130.0
(121.0)
(2.3)
(32.8)
2008
S$ Mil
272.6
-
130.6
(120.8)
(1.7)
2.3
2009
S$ Mil
95.7
-
25.2
(38.1)
-
-
2008
S$ Mil
102.5
-
22.2
(29.0)
-
-
Balance as at 31 Mar
260.6
283.0
82.8
95.7
The movement in the allowance for impairment of loans to subsidiaries is as follows -
Balance as at 1 Apr
Allowance for impairment
Write-back
Balance as at 31 Mar
Company
2009
S$ Mil
24.2
-
-
2008
S$ Mil
30.2
3.9
(9.9)
24.2
24.2
The movement in the allowance for impairment of amount due from subsidiaries is as follows -
Balance as at 1 Apr
Write-back
Balance as at 31 Mar
Company
2009
S$ Mil
45.7
-
2008
S$ Mil
110.6
(64.9)
45.7
45.7
136 singapore telecommunications limited and suBsidiarY companies
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
17.
FINANCIAL ASS ETS AT FA IR VALUE THRO UG H P ROF IT O R LOSS (“FVTPL INVESTMENTS”)
Quoted interest bearing securities
SGD denominated Bonds and Notes
Quoted other investments
USD denominated Investment Funds
The effective interest rates at the balance sheet date were as follows -
Quoted interest bearing securities
Fixed rate maturing in less than 1 year
Fixed rate maturing between 1 and 5 years
18.
INVENTORIES
Group
2009
S$ Mil
2008
S$ Mil
10.2
10.5
0.6
0.5
10.8
11.0
Group
2009
%
5.1
-
2008
%
-
5.1
Group
Company
2009
S$ Mil
2008
S$ Mil
2009
S$ Mil
2008
S$ Mil
Equipment held for resale
Maintenance and capital works’ inventories
Work-in-progress
132.8
36.1
4.5
101.6
20.2
1.8
-
35.4
-
0.1
18.8
-
173.4
123.6
35.4
18.9
singtel annual report 2008 / 2009 137
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
19. PROPERTY, PLANT AND E QUIP MENT
Transmission
Other
Freehold
Leasehold
plant and
Switching
plant and
land
S$ Mil
land
Buildings
equipment
equipment
equipment
S$ Mil
S$ Mil
S$ Mil
S$ Mil
S$ Mil
Capital
work-in-
progress
S$ Mil
Total
S$ Mil
Group - 2009
Cost
Balance as at 1 Apr 08
Additions (net of rebates)
Disposals/ Write-offs
Acquisition of subsidiary
Disposal of subsidiary
Reclassifications /
Adjustments
Translation differences
19.8
-
-
-
-
6.0
(3.7)
234.9
-
-
22.9
-
658.8
-
-
7.1
-
13,996.5
224.0
(108.4)
-
-
3,067.7
129.1
(124.6)
-
-
4,616.2
150.9
(76.6)
29.3
(9.6)
777.8
1,381.7
-
-
-
23,371.7
1,885.7
(309.6)
59.3
(9.6)
-
1.5
6.9
(29.9)
717.6
(1,798.2)
57.6
(222.9)
653.8
(593.0)
(1,441.9)
(73.8)
-
(2,720.0)
Balance as at 31 Mar 09
22.1
259.3
642.9
13,031.5
2,906.9
4,771.0
643.8
22,277.5
Accumulated depreciation
Balance as at 1 Apr 08
Depreciation charge for
the year
Disposals/ Write-offs
Reclassifications /
Adjustments
Translation differences
Balance as at 31 Mar 09
Accumulated impairment
Balance as at 1 Apr 08
Impairment charge for
the year
Write-back during the year
Disposals
Translation differences
Balance as at 31 Mar 09
Net Book Value as at
31 Mar 09
-
-
-
-
-
-
-
-
-
-
-
-
41.9
238.1
7,466.0
2,162.1
3,298.6
-
13,206.7
3.9
-
-
0.6
18.1
-
-
(7.0)
1,077.5
(90.8)
163.0
(120.6)
423.3
(76.9)
1.3
(926.7)
-
(123.3)
(1.3)
(419.3)
-
-
-
-
1,685.8
(288.3)
-
(1,475.7)
46.4
249.2
7,527.3
2,081.2
3,224.4
-
13,128.5
2.0
7.3
6.6
4.0
20.9
-
-
-
-
-
-
-
-
-
-
(3.9)
-
3.4
-
(3.1)
0.1
0.1
(10.8)
(0.3)
0.1
2.0
7.3
2.7
4.4
10.0
-
-
-
-
-
-
40.8
3.5
(10.8)
(7.3)
0.2
26.4
22.1
210.9
386.4
5,501.5
821.3
1,536.6
643.8
9,122.6
138 singapore telecommunications limited and suBsidiarY companies
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
19. PROPERTY, PLANT AND E QUIP MENT ( con t ’ d )
Freehold
Leasehold
plant and
Switching
plant and
work-in-
Transmission
Other
Capital
Group - 2008
Cost
Balance as at 1 Apr 07
Additions (net of rebates)
Disposals/ Write-offs
Reclassifications /
Adjustments
Translation differences
land
S$ Mil
19.2
-
-
-
0.6
land
Buildings
equipment
equipment
equipment
progress
S$ Mil
S$ Mil
S$ Mil
S$ Mil
S$ Mil
S$ Mil
Total
S$ Mil
236.2
-
-
-
(1.3)
644.1
8.7
(0.4)
12,556.6
179.1
(54.1)
2,895.5
117.8
(25.9)
3,835.8
132.8
(72.0)
891.2
1,603.9
-
21,078.6
2,042.3
(152.4)
1.5
4.9
1,047.9
267.0
43.3
37.0
649.6
70.0
(1,742.3)
25.0
-
403.2
Balance as at 31 Mar 08
19.8
234.9
658.8
13,996.5
3,067.7
4,616.2
777.8
23,371.7
Accumulated depreciation
Balance as at 1 Apr 07
Depreciation charge for
the year
Disposals/ Write-offs
Translation differences
Balance as at 31 Mar 08
Accumulated impairment
Balance as at 1 Apr 07
Impairment charge for
the year
Balance as at 31 Mar 08
Net Book Value as at
31 Mar 08
-
-
-
-
-
-
-
-
39.1
222.8
6,178.2
1,953.4
2,917.5
-
11,311.0
3.3
-
(0.5)
14.3
(0.2)
1.2
1,208.9
(30.5)
109.4
218.0
(25.3)
16.0
391.2
(67.4)
57.3
-
-
-
1,835.7
(123.4)
183.4
41.9
238.1
7,466.0
2,162.1
3,298.6
-
13,206.7
2.0
7.3
6.6
1.5
20.6
-
-
-
2.5
0.3
2.0
7.3
6.6
4.0
20.9
-
-
-
38.0
2.8
40.8
19.8
191.0
413.4
6,523.9
901.6
1,296.7
777.8
10,124.2
singtel annual report 2008 / 2009 139
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
19. PROPERTY, PLANT AND E QUIP MENT (co n t’ d )
Transmission
Other
Freehold
Leasehold
plant and
Switching
plant and
land
S$ Mil
land
Buildings
equipment
equipment
equipment
S$ Mil
S$ Mil
S$ Mil
S$ Mil
S$ Mil
Capital
work-in-
progress
S$ Mil
Total
S$ Mil
Company - 2009
Cost
Balance as at 1 Apr 08
Additions (net of rebates)
Disposals/ Write-offs
0.4
-
-
220.5
-
-
421.9
-
-
2,807.0
106.9
(54.7)
1,075.2
43.9
(50.7)
937.5
71.3
(52.2)
206.9
77.6
-
5,669.4
299.7
(157.6)
Balance as at 31 Mar 09
0.4
220.5
421.9
2,859.2
1,068.4
956.6
284.5
5,811.5
Accumulated depreciation
Balance as at 1 Apr 08
Depreciation charge for
the year
Disposals/ Write-offs
Balance as at 31 Mar 09
Accumulated impairment
Balance as at 1 Apr 08
Disposals/ Write-offs
Balance as at 31 Mar 09
Net Book Value as at
31 Mar 09
-
-
-
-
-
-
-
36.2
174.3
1,801.5
942.4
712.6
-
3,667.0
2.3
-
12.6
-
160.8
(48.5)
59.3
(46.7)
77.0
(52.1)
-
-
312.0
(147.3)
38.5
186.9
1,913.8
955.0
737.5
-
3,831.7
2.0
-
7.2
-
3.3
(2.1)
3.0
(3.0)
1.5
(0.2)
2.0
7.2
1.2
-
1.3
-
-
-
17.0
(5.3)
11.7
0.4
180.0
227.8
944.2
113.4
217.8
284.5
1,968.1
140 singapore telecommunications limited and suBsidiarY companies
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
19. PROPERTY, PLANT AND E QUIP MENT ( con t ’ d )
Freehold
land
S$ Mil
Leasehold
land
S$ Mil
Buildings
S$ Mil
Transmission
plant and
equipment
S$ Mil
Switching
equipment
S$ Mil
Other
plant and
equipment
S$ Mil
Capital
work-in-
progress
S$ Mil
Total
S$ Mil
Company - 2008
Cost
Balance as at 1 Apr 07
Additions (net of rebates)
Disposals/ Write-offs
0.4
-
-
220.5
-
-
421.7
0.4
(0.2)
2,671.5
144.5
(9.0)
1,053.2
38.0
(16.0)
896.7
85.8
(45.0)
123.1
83.8
-
5,387.1
352.5
(70.2)
Balance as at 31 Mar 08
0.4
220.5
421.9
2,807.0
1,075.2
937.5
206.9
5,669.4
Accumulated depreciation
Balance as at 1 Apr 07
Depreciation charge for
the year
Disposals/ Write-offs
Balance as at 31 Mar 08
Accumulated impairment
Balance as at 1 Apr 07
Impairment charge for the
year
Balance as at 31 Mar 08
Net Book Value as at
31 Mar 08
-
-
-
-
-
-
-
34.0
162.7
1,632.1
890.5
682.7
-
3,402.0
2.2
-
11.6
-
177.3
(7.9)
67.8
(15.9)
74.2
(44.3)
-
-
333.1
(68.1)
36.2
174.3
1,801.5
942.4
712.6
-
3,667.0
2.0
7.2
3.3
-
-
-
0.5
2.5
1.2
0.3
2.0
7.2
3.3
3.0
1.5
-
-
-
14.2
2.8
17.0
0.4
182.3
240.4
1,002.2
129.8
223.4
206.9
1,985.4
Property, plant and equipment included the following -
Group
2009
S$ Mil
2008
S$ Mil
Company
2009
S$ Mil
2008
S$ Mil
Net book value of property, plant and equipment
- Sold and leased back
- Finance lease obligations
- Held for generating operating lease income
Interest charges capitalised during the year
2.4
18.7
11.8
11.7
14.7
-
11.9
13.1
1.9
-
-
-
Staff costs capitalised during the year
149.6
138.0
15.0
9.6
-
-
-
8.1
In the current financial year, an impairment charge of S$3.5 million (2008: S$2.8 million) was made at the Group on
certain property, plant and equipment to bring their carrying values to their recoverable values.
singtel annual report 2008 / 2009 141
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
20.
INTANGIBLE ASSETS
2009
S$ Mil
9,620.0
373.4
34.0
Group
2008
S$ Mil
9,569.1
476.2
11.2
10,027.4
10,056.5
Company
2009
S$ Mil
2008
S$ Mil
-
2.7
-
2.7
-
3.0
-
3.0
Goodwill on acquisition of subsidiaries
Telecommunications and spectrum licences
Customer relationships and others
20. 1 Goodwill on Acquisition of S ubs idiaries
Balance as at 1 Apr
Acquisition of subsidiary
Translation differences
Balance as at 31 Mar
Cost
Accumulated impairment
Net book value as at 31 Mar
2009
S$ Mil
9,569.1
82.2
(31.3)
Group
2008
S$ Mil
9,563.5
-
5.6
9,620.0
9,569.1
9,620.2
(0.2)
9,569.3
(0.2)
9,620.0
9,569.1
20. 2 Telecommunications and S pe ctrum Licen ces
Group
Company
Balance as at 1 Apr
Additions
Impairment charge for the year
Amortisation for the year
Reclassification
Translation differences
2009
S$ Mil
476.2
3.7
-
(47.0)
3.4
(62.9)
2008
S$ Mil
512.3
3.0
(2.0)
(50.0)
0.1
12.8
Balance as at 31 Mar
373.4
476.2
Cost
Accumulated amortisation
Accumulated impairment
673.5
(297.8)
(2.3)
780.4
(301.9)
(2.3)
Net book value as at 31 Mar
373.4
476.2
142 singapore telecommunications limited and suBsidiarY companies
2009
S$ Mil
2008
S$ Mil
3.0
-
-
(0.3)
-
-
2.7
8.4
(5.7)
-
2.7
3.3
-
-
(0.3)
-
-
3.0
8.4
(5.4)
-
3.0
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
20.3 C ustom er Relationships and Othe rs
Balance as at 1 Apr
Acquisition of subsidiary
Disposals
Amortisation for the year
Translation differences
Balance as at 31 Mar
Cost
Accumulated amortisation
Net book value as at 31 Mar
21.
SUBSIDIARIES
Unquoted equity shares, at cost
Shareholders’ advances
Deemed investment in a subsidiary
Less: Allowance for impairment losses
Group
2008
S$ Mil
15.6
-
(0.1)
(4.9)
0.6
2009
S$ Mil
11.2
30.2
-
(5.8)
(1.6)
34.0
11.2
48.7
(14.7)
22.0
(10.8)
34.0
11.2
Company
2009
S$ Mil
2008
S$ Mil
8,601.7
3,792.5
24.1
12,418.3
(619.6)
11,070.7
3,515.6
11.6
14,597.9
(615.6)
11,798.7
13,982.3
The advances given to subsidiaries were unsecured with settlement neither planned nor likely to occur in the
foreseeable future. The effective interest rate at the balance sheet date was 1.1 per cent (2008: 1.3 per cent) per
annum.
The deemed investment in a subsidiary, SingTel Group Treasury Pte. Ltd. (“SGT”), resulted from financial guarantees
provided by the Company for loans drawn down totalling S$1.54 billion (2008: S$1.24 billion) entered into by SGT as
at 31 March 2009.
The details of subsidiaries are set out in Note 45.
singtel annual report 2008 / 2009 143
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
22. ASSOCIAT ED COMPANIE S
Group
Company
Quoted equity shares, at cost
Unquoted equity shares, at cost
Shareholder’s loan (unsecured)
Goodwill on consolidation adjusted
against shareholders’ equity
Share of post acquisition reserves
(net of dividends, and accumulated
amortisation of goodwill and intangible)
Translation differences
2009
S$ Mil
74.3
1,421.7
1.7
1,497.7
2008
S$ Mil
74.3
1,306.9
1.7
1,382.9
(28.3)
(28.3)
(179.6)
(288.8)
(496.7)
(74.1)
(161.9)
(264.3)
Less: Allowance for impairment losses
(see Note 24.2)
(331.7)
(31.7)
2009
S$ Mil
24.7
-
-
24.7
-
-
-
-
-
2008
S$ Mil
24.7
-
-
24.7
-
-
-
-
-
669.3
1,086.9
24.7
24.7
As at 31 March 2009, the market values of the quoted equity shares in associated companies held by the Group and
Company were S$386.9 million (2008: S$574.7 million) and S$382.9 million (2008: S$568.1 million) respectively.
The Group was required to fulfill certain conditions of an associated company’s existing loan agreement on a
proportionate share basis where 60% and 30% of the Group’s equity shares in an associated company were under
pledge and a negative lien respectively. During the year, the share pledge was waived and the Group provided
proportionate guarantees. The negative lien was also reduced to 26% of the Group’s equity shares in the associated
company.
The details of associated companies are set out in Note 45.
As at 31 March 2009, the Group’s proportionate interest in the capital commitments of the associated companies was
S$118.1 million (2008: S$226.6 million).
The summarised financial information of associated companies were as follows –
Operating revenue
Net (losses)/ profit after tax
Total assets
Total liabilities
144 singapore telecommunications limited and suBsidiarY companies
Group
2009
S$ Mil
2008
S$ Mil
1,207.8
933.5
(222.2)
46.6
3,987.4
3,862.1
(2,271.2)
(2,173.3)
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
23.
JOINT VENTURE COMPAN IE S
Group
Company
Quoted equity shares, at cost
Unquoted equity shares, at cost
Goodwill on consolidation adjusted
against shareholders’ equity
Share of post acquisition reserves
(net of dividends and accumulated
amortisation of goodwill)
Translation differences
Less: Allowance for impairment losses
(see Note 24.2)
2009
S$ Mil
2,388.1
3,069.8
5,457.9
2008
S$ Mil
2,248.0
3,070.2
5,318.2
(1,225.9)
(1,225.9)
4,887.3
(1,099.4)
2,562.0
3,865.3
(500.7)
2,138.7
2009
S$ Mil
-
34.1
34.1
-
-
-
-
2008
S$ Mil
-
34.1
34.1
-
-
-
-
(30.0)
(3.9)
(4.2)
(4.2)
7,989.9
7,453.0
29.9
29.9
As at 31 March 2009, the market value of the quoted equity shares in joint venture companies held by the Group was
S$9.46 billion (2008: S$14.14 billion).
The details of joint venture companies are set out in Note 45.
The Group’s share of certain items in the income statements and balance sheets of the joint venture companies were
as follows –
Operating revenue
Operating expenses
Net profit before tax
Net profit after tax
Non-current assets
Current assets
Current liabilities
Non-current liabilities
Net assets
Group
2009
S$ Mil
2008
S$ Mil
5,794.4
5,982.9
(2,875.7)
(2,725.1)
2,298.8
2,696.9
1,872.2
2,059.6
8,903.2
1,744.8
(2,364.6)
(2,278.9)
8,301.1
1,606.4
(2,432.3)
(2,327.6)
6,004.5
5,147.6
singtel annual report 2008 / 2009 145
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
23.
JOINT VENTURE COMPAN IE S (cont’ d)
As at 31 March 2009, the Group’s proportionate interest in the capital commitments of joint venture companies was
S$1.49 billion (2008: S$1.37 billion).
Optus holds a 31.25 per cent (2008: 31.25 per cent) interest in an unincorporated joint venture to maintain an optical
fibre submarine cable between Western Australia and Indonesia.
In addition, Optus has an interest in an unincorporated joint venture to share 3G network sites and radio infrastructure
across Australia whereby it holds an interest of 50.0 per cent (2008: 50.0 per cent) in the assets, with access to the
capacity and shares 50.0 per cent (2008: 50.0 per cent) of the cost of building and operating the network.
The Group’s property, plant and equipment included the Group’s interest in the property, plant and equipment
employed in the unincorporated joint ventures of S$284.3 million (2008: S$358.3 million).
24.
IMPAIRMENT REVIE WS
24. 1 Goodwill arising on ac quis it ion of s ubsid ia rie s
The carrying values of the Group’s goodwill on acquisition of subsidiaries as at 31 March 2009 were assessed for
impairment during the financial year.
Goodwill is allocated for impairment testing purposes to the individual entity which is also the cash generating unit
(“CGU”).
The fixed, mobile, cable and broadband networks of Optus Group are integrated operationally and accordingly, Optus
as a group is a CGU for the purpose of impairment tests for goodwill.
Group
S$ Mil
S$ Mil
2009
2008
2009
2008
As at
Terminal growth
31 Mar 09 31 Mar 08
rate (1)
Pre-tax
discount rate
Carrying value of goodwill in -
- Optus Group
9,537.8
9,569.1
4.0%
4.0%
10.9%
12.4%
- Singapore Computer Systems Limited (2)
82.2
-
2.0%
NA
8.3%
NA
Notes:
(1) Weighted average growth rate used to extrapolate cash flows beyond the terminal year.
(2) This subsidiary is renamed as “SCS Computer Systems Pte. Ltd.” with effect from 15 April 2009.
‘NA’ denotes not applicable.
The recoverable values of cash generating units including goodwill are determined based on value-in-use
calculations.
146 singapore telecommunications limited and suBsidiarY companies
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
24.1 Goodwil l arising on acquis ition of subs id ia ries (co n t ’d )
The value-in-use calculations apply a discounted cash flow model using cash flow projections based on financial
budgets and forecasts approved by management covering a five-year period. Cash flows beyond the terminal year are
extrapolated using the estimated growth rates stated in the table above. Key assumptions used in the calculation of
value-in-use are growth rates, operating margins, capital expenditure and discount rates.
The terminal growth rates used do not exceed the long term average growth rates of the respective industry and
country in which the entity operates and are consistent with forecasts included in industry reports. The discount
rates applied to the cash flow projections are based on Weighted Average Cost of Capital (WACC) where the cost of a
company’s debt and equity capital are weighted to reflect its capital structure.
As at 31 March 2009, no impairment charge was required for goodwill on acquisition of subsidiaries, with any
reasonably possible change to the key assumptions applied not likely to cause the recoverable values to be below
their carrying values.
24.2 Carrying values (including goodw ill) of a sso cia ted a n d join t ve n tu re comp a n ies
The Group’s carrying values in Warid Telecom (Private) Limited (“Warid”) and Pacific Bangladesh Telecom Limited
(“PBTL”) as at 31 March 2009 were assessed for impairment.
Group
Carrying value (including goodwill) in -
Warid and PBTL
Less: Allowance for impairment losses
Terminal
growth
rate (1)
2009
Pre-tax
discount
rate
2009
As at
31 Mar 09
S$ Mil
966.2
(330.0)
636.2
5.5% to 8%
14.4% to 17.5%
Note:
(1) Weighted average growth rate used to extrapolate cash flows beyond the terminal year.
The impairment review of the Group’s investments in the associated and joint venture companies is based on the
same methodology described in Note 24.1. The cash flow projections were based on financial budgets and forecasts
approved by management covering periods of seven to ten years, as the operations of Warid and PBTL will not reach
stable cash flow within five years as they are in growth phase.
For the year ended 31 March 2009, a non-cash impairment charge of S$330 million (2008: Nil) was recognised on the
goodwill arising from the acquisitions of Warid and PBTL. The lower value-in-use arose from applying higher discount
rates with increased cost of debt, as well as increased operating costs in more challenging market environments.
singtel annual report 2008 / 2009 147
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
25. AVAILABL E-FOR-SALE (“A FS ”) I NV E ST M E NT S
Balance as at 1 Apr
Additions
Disposals
(Provision for impairment)/ Write-back of provision
Net fair value (losses)/ gains taken to equity
Group
Company
2009
S$ Mil
352.6
1.8
(2.8)
(0.1)
(115.2)
2008
S$ Mil
42.4
279.1
(5.6)
4.1
32.6
2009
S$ Mil
37.0
-
(2.5)
-
(9.9)
2008
S$ Mil
33.3
-
-
-
3.7
Balance as at 31 Mar
236.3
352.6
24.6
37.0
AFS investments included the following –
Group
Quoted equity securities
- Taiwan
- Thailand
- Singapore and United States
Unquoted
Equity securities - Singapore and United States
Others
Company
Quoted equity securities
- Thailand
- Singapore and United States
Unquoted equity securities
- Singapore
2009
S$ Mil
2008
S$ Mil
202.9
9.2
5.8
217.9
13.9
4.5
18.4
306.1
15.3
11.4
332.8
14.7
5.1
19.8
236.3
352.6
2009
S$ Mil
2008
S$ Mil
9.2
5.6
14.8
9.8
24.6
15.3
11.2
26.5
10.5
37.0
148 singapore telecommunications limited and suBsidiarY companies
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
26. DERIVATIVE FINANCIAL INS T RUME N TS
Group
Company
2009
S$ Mil
2008
S$ Mil
2009
S$ Mil
2008
S$ Mil
Balance as at 1 Apr
Fair value gains/ (losses)
- included in income statement
- included in ‘Hedging Reserve’
- included in ‘Currency Translation Reserve’
Settlement of swap for bonds repaid
Translation differences
(1,136.4)
(834.8)
(749.6)
(549.4)
591.6
263.7
(66.7)
137.3
65.9
(11.7)
(250.6)
(30.6)
-
(8.7)
531.9
25.8
-
137.3
-
(50.2)
(150.0)
-
-
-
Balance as at 31 Mar
(144.6)
(1,136.4)
(54.6)
(749.6)
Disclosed as -
Current asset
Non-current asset
Current liability
Non-current liability
1.5
461.3
(44.2)
(563.2)
2.5
358.0
(162.5)
(1,334.4)
1.5
461.3
(12.6)
(504.8)
1.2
358.0
(155.7)
(953.1)
(144.6)
(1,136.4)
(54.6)
(749.6)
singtel annual report 2008 / 2009 149
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
26. 1 Fa ir Valu es
The fair values of the currency and interest rate swap contracts were adjusted for accrued interest of S$27.8 million
(2008: S$17.3 million). The accrued interest is separately disclosed in Note 16 and Note 28.
The fair value adjustments of the derivative financial instruments were as follows -
2009
Fair value hedges
Cross currency swaps
Interest rate swaps
Forward foreign exchange
Cash flow hedges
Cross currency swaps
Interest rate swaps
Forward foreign exchange
Derivatives that do not qualify
for hedge accounting
Cross currency swaps
Interest rate swaps
Forward foreign exchange
Disclosed as -
Current
Non-current
Group
Fair value adjustments
Assets
S$ Mil
Liabilities
S$ Mil
Company
Fair value adjustments
Assets
S$ Mil
Liabilities
S$ Mil
172.5
268.8
1.5
58.5
(29.6)
-
(4.9)
(4.0)
-
(94.5)
-
9.0
636.0
44.7
4.6
-
-
7.6
172.5
268.8
1.5
58.5
(29.6)
-
(4.9)
(4.0)
-
(94.5)
-
8.6
571.7
28.9
2.7
-
-
-
462.8
607.4
462.8
517.4
1.5
461.3
44.2
563.2
1.5
461.3
12.6
504.8
462.8
607.4
462.8
517.4
150 singapore telecommunications limited and suBsidiarY companies
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
26.1 Fair Values (cont’d)
2008
Fair value hedges
Cross currency swaps
Interest rate swaps
Forward foreign exchange
Cash flow hedges
Cross currency swaps
Interest rate swaps
Forward foreign exchange
Derivatives that do not qualify
for hedge accounting
Cross currency swaps
Interest rate swaps
Forward foreign exchange
Disclosed as -
Current
Non-current
Group
Fair value adjustments
Assets
S$ Mil
Liabilities
S$ Mil
Company
Fair value adjustments
Assets
S$ Mil
Liabilities
S$ Mil
-
178.4
2.5
212.7
(33.1)
-
-
-
-
311.1
(9.6)
1.1
1,162.6
26.0
3.8
-
-
1.9
-
178.4
1.2
282.1
(26.9)
-
(69.4)
(6.2)
-
(79.8)
-
-
1,162.6
26.0
-
-
-
-
360.5
1,496.9
359.2
1,108.8
2.5
358.0
162.5
1,334.4
1.2
358.0
155.7
953.1
360.5
1,496.9
359.2
1,108.8
The cash flow hedges are designated for foreign currency commitments and repayments of principal and interest of
the foreign currency denominated bonds.
The forecasted transactions for the foreign currency commitments are expected to occur in the financial year ending
31 March 2010, while the forecasted transactions for the repayment of principal and interest of the foreign currency
denominated bonds will occur according to the timing disclosed in Note 30.1.
singtel annual report 2008 / 2009 151
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
26. 1 Fa ir Valu es (cont’d)
As at 31 March 2009, the details of the outstanding derivative financial instruments were as follows -
Group
Company
2009
2008
2009
2008
Interest rate swaps
Notional principal (S$ million equivalent)
Fixed interest rates
Floating interest rates
5,214.6
2.0% to 7.7%
3.2% to 5.5%
5,208.2
2.7% to 6.6%
5.9% to 9.1%
4,713.5
2.0% to 3.9%
3.9% to 5.5%
4,605.1
2.7% to 3.9%
5.9% to 6.2%
Cross currency swaps
Notional principal (S$ million equivalent)
Fixed interest rates
Floating interest rates
4,910.4
3.9% to 8.1%
2.3% to 4.7%
5,559.4
3.9% to 8.1%
3.0% to 9.5%
3,679.8
3.9% to 5.2%
2.3% to 3.1%
4,078.2
3.9% to 5.2%
3.0% to 4.7%
Forward foreign exchange
Notional principal (S$ million equivalent)
729.5
743.3
413.7
220.6
The interest rate swaps entered into by the Group are re-priced at intervals ranging from three-monthly to six-monthly
periods. The interest rate swaps entered by the Company are re-priced every six months.
27. OTHER NON-CURRENT RECE IVA BLE S
Prepayments
Other receivables
Group
Company
2009
S$ Mil
118.7
29.2
2008
S$ Mil
120.7
29.4
2009
S$ Mil
104.5
0.2
147.9
150.1
104.7
2008
S$ Mil
88.8
0.2
89.0
152 singapore telecommunications limited and suBsidiarY companies
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
28.
TRADE AND OTHER PAYABLE S
Trade payables
Advance billings
Accruals
Interest payables
Due to subsidiaries
- trade
- non-trade
Group
Company
2009
S$ Mil
2008
S$ Mil
1,955.6
467.5
507.1
186.1
2,013.1
500.5
498.1
186.5
-
-
-
-
-
-
2009
S$ Mil
485.5
69.7
85.8
140.0
138.5
107.8
246.3
2008
S$ Mil
509.2
75.9
90.9
147.4
202.6
1,745.2
1,947.8
Due to associated and joint venture companies
(trade)
37.5
58.9
33.2
40.7
Deferred income (see Note 32)
- Deferred gain on sale of a joint venture
company
- Financial guarantee contracts
Customers' deposits
Other deferred income
Other payables
3.1
-
3.1
21.4
11.0
78.2
3.1
-
3.1
20.1
1.7
78.1
-
4.8
4.8
11.6
2.9
50.9
-
3.6
3.6
11.7
1.7
61.7
3,267.5
3,360.1
1,130.7
2,890.6
The amounts due to subsidiaries are repayable on demand and interest-free.
The trade payables are non-interest bearing and are generally settled on 30 to 60 days terms.
The interest payables on borrowings are generally settled on a half-year basis except for interest payables on certain
bonds and syndicated loan facilities which are settled on quarterly and monthly basis respectively.
singtel annual report 2008 / 2009 153
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
29. PROVISION
The provision mainly relates to provision for liquidated damages and warranties. The movements were as follows -
Balance as at 1 Apr
Acquisition of subsidiary
Provision
Amount written off against provision
Balance as at 31 Mar
30. BORROWINGS ( UNSE CUR E D)
Current
Bonds
Bank loans
Bank overdraft
Non-current
Bonds
Bank loans
Group
2008
S$ Mil
11.2
-
1.7
(0.2)
12.7
2009
S$ Mil
12.7
2.2
3.5
(1.6)
16.8
Group
Company
2009
S$ Mil
2008
S$ Mil
2009
S$ Mil
2008
S$ Mil
542.2
885.0
0.2
500.4
1,373.8
0.1
1,427.4
1,874.3
-
-
-
-
487.1
-
-
487.1
5,004.3
1,043.2
5,018.2
650.0
4,353.2
-
3,891.2
-
6,047.5
5,668.2
4,353.2
3,891.2
Total unsecured borrowings
7,474.9
7,542.5
4,353.2
4,378.3
154 singapore telecommunications limited and suBsidiarY companies
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
30.1 Bonds
Principal
amount
US$350 million
US$345 million (1)
US$393.8 million (1)
US$1,350 million (2)
US$500 million (2)
€500 million (2)
A$62.6 million
Classified as -
Current
Non-current
Maturity
2008
2009
2010
2011
2031
2011
2011
Fixed
interest
rate
%
6.25
8.13
8.00
6.38
7.38
2009
S$ Mil
-
529.6
636.4
2,251.7
1,024.2
Group
2008
S$ Mil
487.1
498.2
595.6
2,014.4
762.4
Company
2009
S$ Mil
2008
S$ Mil
-
-
-
2,251.7
1,024.2
487.1
-
-
2,014.4
762.4
6.00
1,077.3
1,114.4
1,077.3
1,114.4
6.82
27.3
46.5
-
-
5,546.5
5,518.6
4,353.2
4,378.3
542.2
5,004.3
500.4
5,018.2
-
4,353.2
487.1
3,891.2
5,546.5
5,518.6
4,353.2
4,378.3
Notes:
(1) The bonds, issued by Optus Group, are subject to a negative pledge that limits the amount of secured indebtedness of certain
subsidiaries of Optus.
(2) The bonds are listed on Singapore Exchange and Luxembourg Stock Exchange.
30.2 Ba nk Loans
Current
Non-current
2009
S$ Mil
885.0
1,043.2
Group
2008
S$ Mil
1,373.8
650.0
1,928.2
2,023.8
As at 31 March 2009, A$375 million (2008: A$615 million) had been drawn down under various loan facilities totalling
A$975 million with maturity between May 2009 to April 2012.
As at 31 March 2009, S$1.54 billion (2008: S$1.24 billion) had been drawn down under various loan facilities of
approximately S$4 billion with maturity between April 2009 to November 2013.
singtel annual report 2008 / 2009 155
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
30. 3 Maturity
The maturity periods of the non-current unsecured borrowings at balance sheet dates were as follows -
Between one and two years
Between two and five years
Over five years
30. 4 Interest Rates
2009
S$ Mil
951.1
4,072.2
1,024.2
Group
2008
S$ Mil
1,163.8
3,742.0
762.4
Company
2009
S$ Mil
2008
S$ Mil
-
3,329.0
1,024.2
-
3,128.8
762.4
6,047.5
5,668.2
4,353.2
3,891.2
The weighted average effective interest rates at balance sheet dates were as follows -
Bonds
Bank loans
30. 5 Fair Values
Carrying value
Bonds
Bank loans
Fair value
Bonds
Bank loans
Group
Company
2009
%
6.8
2.4
2008
%
6.8
4.3
2009
%
6.5
-
2008
%
6.4
-
Group
Company
2009
S$ Mil
2008
S$ Mil
2009
S$ Mil
2008
S$ Mil
5,546.5
1,928.2
5,518.6
2,023.8
4,353.2
-
4,378.3
-
5,296.4
1,940.4
5,494.5
2,029.1
4,103.1
-
4,354.2
-
See Note 2.7 on the basis of estimating the fair values and Note 26 for information on the derivative financial
instruments used for hedging the risks associated with the borrowings.
156 singapore telecommunications limited and suBsidiarY companies
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
30.6 The tables below set out the expected contractual undiscounted cash flows of the borrowings, including the effects of
hedging. The adjustments column represents the possible future cash flows attributable to the borrowings which are
not included in the carrying amounts on the balance sheet.
Group
S$ Mil
S$ Mil
S$ Mil
S$ Mil
S$ Mil
Less than
Between
Between
Over
1 year
1 and 2 years
2 and 5 years
5 years
Adjustments
Total
S$ Mil
As at 31 March 2009
Net-settled interest rate swaps
Borrowings
165.3
1,503.4
224.4
938.1
177.1
4,078.4
543.5
881.2
(1,110.3)
73.8
-
7,474.9
1,668.7
1,162.5
4,255.5
1,424.7
(1,036.5)
7,474.9
As at 31 March 2008
Net-settled interest rate swaps
Borrowings
259.0
2,048.2
214.5
1,334.8
342.2
4,344.8
780.8
881.2
(1,596.5)
(1,066.5)
-
7,542.5
2,307.2
1,549.3
4,687.0
1,662.0
(2,663.0)
7,542.5
Company
S$ Mil
S$ Mil
S$ Mil
S$ Mil
S$ Mil
Less than
Between
Between
Over
1 year
1 and 2 years
2 and 5 years
5 years Adjustments
Total
S$ Mil
As at 31 March 2009
Net-settled interest rate swaps
Borrowings
160.4
-
156.8
-
177.1
3,335.2
543.5
881.2
(1,037.8)
136.8
-
4,353.2
160.4
156.8
3,512.3
1,424.7
(901.0)
4,353.2
As at 31 March 2008
Net-settled interest rate swaps
Borrowings
209.9
637.2
194.7
-
345.1
3,511.6
780.8
881.2
(1,530.5)
(651.7)
-
4,378.3
847.1
194.7
3,856.7
1,662.0
(2,182.2)
4,378.3
singtel annual report 2008 / 2009 157
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
31. BORROWINGS (SE CURED)
Current
Finance lease liabilities
Non-current
Finance lease liabilities
31. 1 Finance Lease Liabilities
The minimum lease payments under the finance lease liabilities were payable as follows -
Not later than one year
Later than one but not later than five years
Less: Future finance charges
Classified as -
Current
Non-current
* Denotes amount less than S$50,000.
31. 2 Interest Rates
Group
2009
S$ Mil
2008
S$ Mil
6.4
0.3
13.7
-
Group
2009
S$ Mil
2008
S$ Mil
7.4
14.8
22.2
(2.1)
20.1
6.4
13.7
20.1
0.3
-
0.3
*
0.3
0.3
-
0.3
The weighted average effective interest rates per annum at balance sheet dates were as follows -
Finance lease liabilities
158 singapore telecommunications limited and suBsidiarY companies
Group
2009
%
10.7
2008
%
8.7
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
31.3 Fair Values
Carrying value
Finance lease liabilities
Fair value
Finance lease liabilities
Group
2009
S$ Mil
2008
S$ Mil
20.1
0.3
20.1
0.3
The fair value of the finance lease obligations was estimated by discounting the expected future cash flows using
current interest rates for liabilities with similar risk profiles.
32. D EFERRED INCOME
Gain on sale and leaseback arrangements
Balance as at 1 Apr
Amount recognised as income
during the year
Balance as at 31 Mar
Deferred gain on sale of a joint
venture company
Balance as at 1 Apr
Amount recognised as income
during the year
Balance as at 31 Mar
Financial guarantee contracts
Balance as at 1 Apr
Amount deferred during the year
Amount recognised as income
during the year
Balance as at 31 Mar
Classified as -
Current (see Note 28)
Non-current
Group
2009
S$ Mil
2008
S$ Mil
Company
2009
S$ Mil
2008
S$ Mil
14.1
(2.8)
11.3
29.1
(3.1)
26.0
-
-
-
-
16.3
(2.2)
14.1
30.6
(1.5)
29.1
-
-
-
-
37.3
43.2
3.1
34.2
37.3
3.1
40.1
43.2
6.8
(1.5)
5.3
-
-
-
5.3
12.6
(5.6)
12.3
17.6
4.8
12.8
17.6
7.9
(1.1)
6.8
-
-
-
8.8
0.9
(4.4)
5.3
12.1
3.6
8.5
12.1
singtel annual report 2008 / 2009 159
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
32. DEFERRED INCOME (cont’ d)
Gain on sale and finance leaseback of certain telecommunications equipment is recognised as income over the lease
period of 11 to 16 years.
Deferred gain on sale of a joint venture company is recognised as income on a straight-line basis over the remaining
useful life of the joint venture company’s cable system of approximately 10 years.
33. OTHER NON -CURRENT LIA BI LIT I ES
Performance share liability
Other deferred income
Other payables
34.
SHARE CAPITAL
Group and Company
Group
Company
2009
S$ Mil
4.4
20.2
128.3
2008
S$ Mil
7.6
20.5
160.5
152.9
188.6
2009
S$ Mil
2.8
-
6.4
9.2
2008
S$ Mil
6.0
-
8.8
14.8
2009
2008
Number of
shares
Mil
Share
capital
S$ Mil
Number of
shares
Mil
Share
capital
S$ Mil
Balance as at 1 Apr
Issue of shares under share options
15,920.8
6.0
2,593.7
11.9
15,905.6
15.2
2,562.1
31.6
Balance as at 31 Mar
15,926.8
2,605.6
15,920.8
2,593.7
All issued shares are fully paid.
During the year, the Company issued 6,050,600 (2008: 15,175,899) shares upon the exercise of 6,050,600 (2008:
12,648,300) share options under the 1999 Scheme at exercise prices between S$1.41 and S$2.85 (2008: S$1.39 and
S$2.97) per share.
In the previous financial year ended 31 March 2008, 1,522,650 share options (giving rise to the issue of 2,527,599
SingTel shares) (at an exercise price of A$3.63 for 1.66 shares) were exercised under the Optus Executive Option Plan
(“Optus Plan”). On the exercise of options under the Optus Plan, SingTel shares were issued to the Optus option holder
in the ratio of 1.66 SingTel shares per share option. The options under the Optus Plan have expired on 24 May 2007.
The newly issued shares rank pari passu in all respects with the previously issued shares.
160 singapore telecommunications limited and suBsidiarY companies
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
34.
SHARE CAPITAL (cont’d)
Capital Management
The Group is committed to an optimal capital structure while maintaining financial flexibility and investment grade
credit ratings. In order to achieve an optimal capital structure, the Group may adjust the amount of dividend payment,
return capital to shareholders, issue new shares, buy back issued shares, obtain new borrowings or reduce its
borrowings.
The Group monitors capital based on gross and net gearing ratios, and the dividend and payout ratio target ranges
from 45% to 60% of its underlying net profit, defined as net profit before exceptional items and exchange differences
on capital reductions of certain overseas subsidiaries, as well as significant exceptional items of the associated and
joint venture companies.
From time to time, the Group purchases its own shares from the market. The shares purchased are primarily for
delivery to employees upon vesting of performance shares awarded under the Group’s performance share plans. The
Group can also cancel the shares which are re-purchased from the market.
There were no changes in the Group’s approach to capital management during the financial year.
The Company and its subsidiaries are not subject to any externally imposed capital requirement.
35. D IVIDENDS
Final dividend of 6.9 cents (2008: 6.5 cents)
(one-tier tax exempt) per share and special
dividend of Nil (2008: 9.5 cents)
(one-tier tax exempt) per share, paid
Interim dividend of 5.6 cents (2008: 5.6 cents)
(one-tier tax exempt) per share, paid
Group
2009
S$ Mil
2008
S$ Mil
Company
2009
S$ Mil
2008
S$ Mil
1,098.1
2,544.7
1,098.8
2,546.5
891.3
890.7
892.1
891.5
1,989.4
3,435.4
1,990.9
3,438.0
During the year, a final one-tier exempt ordinary dividend of 6.9 cents per share was paid in respect of the financial
year ended 31 March 2008, and an interim one-tier exempt ordinary dividend of 5.6 cents per share was paid in respect
of the financial year ended 31 March 2009.
The amount paid by the Group differed from that paid by the Company due to dividends on performance shares held
by the Trust that were eliminated on consolidation of the Trust.
The Directors have proposed a final one-tier exempt ordinary dividend of 6.9 cents per share totalling S$1.10 billion
for the Group and Company in respect of the financial year ended 31 March 2009 for approval at the forthcoming
Annual General Meeting.
These financial statements do not reflect the final dividend payable of S$1.10 billion, which will be accounted for in the
shareholders’ equity as an appropriation of ‘Retained Earnings’ in the next financial year ending 31 March 2010.
singtel annual report 2008 / 2009 161
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
36.
FAIR VALUES OF FINANCI A L A SS E TS A N D L IA BI LIT IE S
The fair values of FVTPL investments, AFS investments and borrowings are set out in Note 17, Note 25, Note 30 and
Note 31 respectively.
The carrying values of the other financial assets and liabilities approximate their fair values.
37.
FINANCIAL RISK MANAG EME N T O BJ E CT IV E S A ND P O LI CI ES
37. 1 Financial R isk Factors
The Group’s activities are exposed to a variety of financial risks: foreign exchange risk, interest rate risk, credit risk,
liquidity risk and market risk. The Group’s overall risk management seeks to minimise the potential adverse effects
of these risks on the financial performance of the Group.
The Group uses financial instruments such as currency forwards, cross currency and interest rate swaps, and foreign
currency borrowings to hedge certain financial risk exposures.
The Directors assume responsibility for the overall financial risk management of the Group. The Finance, Investment
and Risk Committee (“FIRC”) assists the Directors in reviewing and establishing policies relating to financial risk
management in accordance with the policies and directives of the Directors.
Financial risk management is carried out by a wholly-owned subsidiary of the Group, SGT, in accordance with the
policies set by the FIRC. SGT identifies, evaluates and hedges financial risk in close co-operation with the Group’s
operating units. No financial derivatives are held or sold for speculative purposes.
37. 2 Foreign Exchange Ris k
The foreign exchange risk of the Group arises from subsidiaries, associated and joint venture companies operating in
foreign countries such as Australia, Bangladesh, India, Indonesia, Philippines, Pakistan and Thailand. Translational
risks of overseas net investments are not hedged unless approved by the FIRC. As approved by the FIRC, EUR 500
million borrowing has been swapped into AUD 825.3 million borrowing to hedge against translation risk of the Group’s
investment in Australia. As at 31 March 2009, if the Australian Dollar appreciates or depreciates against the Singapore
Dollar by 3 percentage points, the impact to equity from the translation of the AUD 825.3 million borrowing will be
S$26.0 million (2008: S$31.2 million).
The Group also has borrowings denominated in foreign currencies that have primarily been hedged into the functional
currency of the respective borrowing entities using cross currency swaps in order to reduce the foreign currency
exposure on these borrowings. As the hedges are perfect, any change in the fair value of the cross currency swaps
has minimal impact on profit and equity.
The Group Treasury Policy, as approved by the FIRC, is to substantially hedge all known transactional currency
exposures. The Group generates revenue, receives foreign dividends and incurs costs in currencies which are other
than the functional currencies of the operating units, thus giving rise to foreign exchange risk. The currency exposures
are primarily relating to Australian Dollar, Euro, Indian Rupee, Indonesian Rupiah, Philippine Peso, Thai Baht, and
United States Dollar.
Foreign currency purchases and forward currency contracts are used to reduce the Group’s transactional exposure to
foreign currency exchange rate fluctuations. The exchange difference on trade balances is disclosed under Note 6 and
the exchange difference on non-trade balances is disclosed under Note 10.
162 singapore telecommunications limited and suBsidiarY companies
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
37.3 Interest Rate Risk
The Group has cash balances placed with reputable banks and financial institutions, as well as investments in
Corporate Bonds which generate interest income for the Group. The Group manages its interest rate risks on its
interest income by placing the cash balances on varying maturities and interest rate terms.
The Group’s borrowings include bank borrowings and bonds. The borrowings expose the Group to interest rate risk.
The Group seeks to minimise its exposure to these risks by entering into interest rate swaps over the duration of its
borrowings. Interest rate swaps entail the Group agreeing to exchange, at specified intervals, the difference between
fixed and variable rate interest amounts calculated by reference to an agreed-upon notional principal amount. As at 31
March 2009, after taking into account the effect of interest rate swaps, approximately 59% (2008: 57%) of the Group’s
borrowings were at fixed rates of interest.
As at 31 March 2009, assuming that the market interest rate is 50 basis points higher or lower than the market interest
rate and with no change to the other variables, the annualised interest expense on borrowings would be higher or
lower by S$14.2 million (2008: S$15.6 million).
37.4 Credit Risk
Financial assets that potentially subject the Group to concentrations of credit risk consist primarily of trade receivables,
cash and cash equivalents, marketable securities and financial instruments used in hedging activities.
The Group has no significant concentration of credit risk from trade receivables due to its diverse customer base.
Credit risk is managed through the application of credit assessment and approvals, credit limits and monitoring
procedures. Where appropriate, the Group obtains deposits or bank guarantees from customers or enters into credit
insurance arrangements. See Note 16 for additional information.
The Group places its cash and cash equivalents and marketable securities with a number of major and high credit
rating commercial banks and other financial institutions. Derivative counter-parties are limited to high credit rating
commercial banks and other financial institutions. The Group has policies that limit the financial exposure to any one
financial institution.
37.5 Liquidity Risk
To manage liquidity risk, the Group monitors and maintains a level of cash and cash equivalents deemed adequate
by the management to finance the Group’s operations and mitigate the effects of fluctuations in cash flows. Due to
the dynamic nature of the underlying business, the Group aims at maintaining flexibility in funding by keeping both
committed and uncommitted credit lines available. See Note 30.6 for additional information.
37.6 Market Risk
The Group has investments in quoted equity shares. The market value of these investments will fluctuate with market
conditions.
singtel annual report 2008 / 2009 163
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
38.
SEGMENT INFORMATIO N
Segment information is presented in respect of the Group’s business and geographical segments.
Primary Reporting Format – Geographical Segment
The Group’s businesses operate in two principal geographical areas, Singapore and Australia. No other individual
country contributes more than 10 per cent of consolidated revenue and assets.
In presenting information on the basis of geographical segments, segment revenue is based on where the service is
rendered and where the customer is located. Total assets and capital expenditure are shown by the geographical area
in which the asset is located.
Secondary Reporting Format – Business Segment
The Group is organised into the following business segments:
Wireline – represent cable-based and satellite-based Fixed Telecommunications Network Services (FTNS) such as
domestic and IDD services, leased lines, data communications, lease of satellite capacity, Inmarsat and Internet
services.
Wireless – represent mobile telecommunications services such as cellular and paging services and sale of handsets
and pagers.
Information technology and engineering – represent information technology consultancy, systems integration and
engineering services.
Others – represent the balance of the Group’s operations and comprise storage of cables and investment activities.
The accounting policies used to derive reportable segment results are consistent with those described in the
“Significant Accounting Policies” note to the financial statements.
Segment results represent operating revenue less expenses.
The total assets disclosed for each segment represent assets directly managed by each segment, and primarily
include receivables, property, plant and equipment, inventories, operating cash and bank balances. Corporate-held
assets managed at the corporate level not allocated to the segments include fixed deposits and investments.
Segment liabilities comprise operating liabilities and exclude borrowings, provision for taxes, deferred tax liabilities
and dividends.
Segment capital expenditures comprise additions to property, plant and equipment (net of rebates, where applicable)
and intangible assets.
164 singapore telecommunications limited and suBsidiarY companies
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
38.1 Primary Reporting Format – Ge og rap hica l Se g men t
Group - 2009
Total revenue from external
customers
Inter-segment revenue
Singapore
S$ Mil
Australia
S$ Mil
Others
S$ Mil
Eliminations
S$ Mil
Total
S$ Mil
5,224.3
9,469.4
240.7
-
14,934.4
82.5
-
84.5
(167.0)
-
Operating revenue
5,306.8
9,469.4
325.2
(167.0)
14,934.4
Segment results
Other income
1,419.7
222.4
1,008.8
48.4
Profit before exceptional items
1,642.1
1,057.2
13.4
(0.7)
12.7
164.5
(178.0)
2,606.4
92.1
(13.5)
2,698.5
Exceptional items
8.2
-
(327.8)
-
(319.6)
Profit on operating activities
Share of results of associated
and joint venture companies
Profit before interest, investment
income (net), and tax
Interest and investment income (net)
Finance costs
Profit before tax
Segment assets
Investment in associated and
joint venture companies
Allocated assets
Unallocated assets
Consolidated total assets
Segment liabilities
Unallocated liabilities
Consolidated total liabilities
56.5
(0.2)
1,739.8
-
1,796.1
2,378.9
4,175.0
132.4
(360.7)
3,946.7
4,247.7
8,301.6
256.7
22.7
12,828.7
228.9
-
8,430.3
-
8,659.2
4,476.6
8,301.6
8,687.0
22.7
1,714.4
752.4
100.1
1,246.5
Capital expenditure
607.7
1,248.7
Depreciation
Amortisation
Impairment of property, plant
and equipment
Impairment on goodwill of associated
and joint venture companies
454.1
1,216.0
5.9
40.9
(3.5)
-
-
-
33.2
15.7
0.1
-
(330.0)
-
-
-
-
-
singtel annual report 2008 / 2009 165
21,487.9
11,766.8
33,254.7
3,813.4
8,941.0
12,754.4
1,889.6
1,685.8
46.9
(3.5)
(330.0)
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
38. 1 Primary Reporting Format – Ge og rap h ica l S eg m en t (con t’ d )
Group - 2008
Total revenue from external
customers
Inter-segment revenue
Singapore
S$ Mil
Australia
S$ Mil
Others
S$ Mil
Eliminations
S$ Mil
Total
S$ Mil
4,609.0
10,028.7
206.7
-
14,844.4
78.3
-
90.8
(169.1)
-
Operating revenue
4,687.3
10,028.7
297.5
(169.1)
14,844.4
Segment results
Other income
1,342.1
119.4
1,148.4
29.8
Profit before exceptional items
1,461.5
1,178.2
15.7
(7.8)
7.9
58.8
(63.1)
2,565.0
78.3
(4.3)
2,643.3
Exceptional items
- allocated
- unallocated
Profit on operating activities
Share of results of associated
and joint venture companies
Profit before interest, investment
income (net), and tax
Interest and investment income (net)
Finance costs
Profit before tax
Segment assets
Investment in associated and
joint venture companies
Allocated assets
Unallocated assets
Consolidated total assets
Segment liabilities
Unallocated liabilities
Consolidated total liabilities
(3.3)
-
(48.2)
-
(51.5)
1.4
2,593.2
59.7
(3.3)
2,010.1
-
2,066.5
4,659.7
216.2
(392.9)
4,483.0
3,743.3
9,612.5
191.6
17.0
13,564.4
214.1
-
8,325.8
-
8,539.9
3,957.4
9,612.5
8,517.4
17.0
1,583.6
968.9
92.5
1,157.9
Capital expenditure
524.9
1,485.9
Depreciation
Amortisation
469.6
1,353.3
4.1
46.8
34.5
12.8
0.3
Impairment on property, plant and
equipment, and intangible assets
(4.8)
-
-
-
-
-
-
166 singapore telecommunications limited and suBsidiarY companies
22,104.3
12,610.0
34,714.3
3,802.9
9,909.1
13,712.0
2,045.3
1,835.7
51.2
(4.8)
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
38.2 Se condary Reporting Format – B us in ess Se g men t
Group - 2009
Operating revenue from external
customers
Segment assets
Investment in associated and
joint venture companies
Allocated assets
Unallocated assets
Consolidated total assets
Wireline
S$ Mil
Wireless
Engineering
S$ Mil
S$ Mil
Others
S$ Mil
Total
S$ Mil
IT &
6,088.0
7,234.2
1,559.0
53.2
14,934.4
7,208.9
4,571.3
878.2
170.3
12,828.7
1,989.9
6,480.2
2.2
186.9
8,659.2
9,198.8
11,051.5
880.4
357.2
21,487.9
11,766.8
33,254.7
Capital expenditure
760.9
781.9
58.6
288.2
1,889.6
Group - 2008
Operating revenue from external
customers
Segment assets
Investment in associated and
joint venture companies
Allocated assets
Unallocated assets
Consolidated total assets
Wireline
S$ Mil
Wireless
Engineering
S$ Mil
S$ Mil
Others
S$ Mil
Total
S$ Mil
IT &
6,557.4
6,995.3
1,234.0
57.7
14,844.4
8,216.4
4,807.9
528.8
11.3
13,564.4
2,154.6
6,292.7
-
92.6
8,539.9
10,371.0
11,100.6
528.8
103.9
22,104.3
12,610.0
34,714.3
Capital expenditure
1,103.6
543.2
18.1
380.4
2,045.3
singtel annual report 2008 / 2009 167
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
39. OPERATING LEASE COMM ITME NTS
The future aggregate minimum lease payments under non-cancellable operating leases contracted for at the balance
sheet date but not recognised as liabilities, were as follows -
Not later than one year
Later than one but not later than five years
Later than five years
Group
Company
2009
S$ Mil
424.0
1,211.0
1,134.2
2008
S$ Mil
390.7
1,240.3
1,978.0
2009
S$ Mil
89.8
152.7
336.6
2008
S$ Mil
60.4
119.9
355.5
2,769.2
3,609.0
579.1
535.8
Sale and operating leaseback contracts were entered into for certain property, plant and equipment for a period of 20
years commencing from 2 March 2005. The above commitments included the minimum amounts payable of S$24.4
million (2008: S$24.0 million) per annum under those contracts. The operating lease payments under these contracts
are subject to review every year with a general increase not exceeding the higher of 2 per cent or Consumer Price
Index percentage of the preceding year.
40.
C OMMITMENTS
40.1 The commitments for capital and operating expenditures, and investments which had not been recognised in the
financial statements, excluding the commitments shown under Note 40.2, were as follows -
Group
Company
2009
S$ Mil
2008
S$ Mil
2009
S$ Mil
2008
S$ Mil
Authorised and contracted for
590.6
726.1
105.5
60.8
The above included equity funding commitments for an associated company of US$75 million (S$114 million)
(2008: Nil).
40.2 As at 31 March 2009, the Group’s commitments for the purchase of broadcasting program rights were S$211.9
million (2008: S$132.3 million). The commitments included only the minimum guaranteed amounts payable under
the respective contracts and do not include amounts that may be payable based on revenue share arrangement which
cannot be reliably determined as at balance sheet date. A third-party had agreed to reimburse the Group for A$3.2
million (S$3.4 million) (2008: A$3.0 million) of these commitments.
168 singapore telecommunications limited and suBsidiarY companies
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
41.
CONTINGENT LIABILITIE S
(a)
Guarantees
As at 31 March 2009,
(i)
(ii)
The Group and Company provided bankers’ guarantees and insurance bonds of S$226.9 million and S$19.2
million (31 March 2008: S$164.3 million and S$18.1 million) respectively.
The Company provided guarantees for loans totalling S$1.54 billion (2008: S$1.24 billion) drawn down under
various loan facilities entered into by SGT with maturity between April 2009 to November 2013.
(iii)
The Company provided a guarantee for US$74 million (S$113 million) on a proportionate share basis in respect
of a loan obtained by an associated company.
(b)
Appeal against the decision by Komisi Pengawas Persaingan Usaha Republik Indonesia (“KPPU”) (Republic of
Indonesia Commission for Supervision of Business Competition) (the “Commission”) and institution of class action
suits
SingTel announced on 29 June 2007 that SingTel and its wholly-owned subsidiary, Singapore Telecom Mobile Pte
Ltd (“SingTel Mobile”), had been called by the Commission to attend before it for an examination concerning the
allegation of a violation by Temasek Business Group of Article 27(a)1 of Law No.5 of 1999 (the “Law”) relating to
business competition matters.
On 20 November 2007, SingTel announced that the Commission had issued its decision (the “Decision”). The Decision
states that SingTel and SingTel Mobile together with other parties to the proceedings (the “Parties”) are in violation of
Article 27(a) of the Law and that PT Telekomunikasi Selular (“Telkomsel”) is in violation of Article 17(1)2 of the Law.
The Decision orders, amongst other things, that (i) the Parties divest either Telkomsel or PT Indosat Tbk (“Indosat”)
within two years, (ii) Telkomsel reduces tariffs by at least 15 per cent and (iii) each of the Parties and Telkomsel pay 25
billion rupiah (approximately S$4 million) in fines.
SingTel and SingTel Mobile filed an appeal to the District Court of Central Jakarta on 19 December 2007. The District
Court announced its ruling on 9 May 2008 dismissing SingTel’s and SingTel Mobile’s appeal, but (i) setting aside
the order that Telkomsel reduce tariffs by at least 15 per cent; and (ii) reducing the fine for each of the Parties and
Telkomsel to 15 billion rupiah (approximately S$2 million). SingTel and SingTel Mobile appealed to the Supreme Court
of the Republic of Indonesia on 22 May 2008.
By a written decision dated 9 September 2008, of which official notification was given to SingTel and SingTel Mobile on
25 November 2008, the Supreme Court dismissed the appeal.
SingTel and SingTel Mobile are evaluating the available options moving forward and will continue to take all necessary
steps to protect their interests.
Notes:
(1) Article 27(a) relates to the ownership of majority shares in several similar companies conducting business activities in the same
field in the same market.
(2) Article 17(1) relates to the control of the production and or marketing of goods and or services which may result in monopolistic
practices and or unfair business competition.
singtel annual report 2008 / 2009 169
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
41. CONTINGENT LIABILITIES (cont’ d)
(b)
Appeal against the decision by Komisi Pengawas Persaingan Usaha Republik Indonesia (“KPPU”) (Republic of
Indonesia Commission for Supervision of Business Competition) (the “Commission”) and institution of class action
suits (cont’d)
Two class action suits have been filed in Indonesia, in the Tangerang and Central Jakarta District Courts, against
SingTel, SingTel Mobile, PT Telekomunikasi Indonesia Tbk, Indosat, the State Ministry of State Owned Enterprises of
the Government of Indonesia and other parties largely similar to the Parties.
The Plaintiffs to the suits are consumers of cellular mobile services and have made their claims pursuant to the
Consumer Protection Law and the Telecommunication Law.
The Plaintiffs seek interim relief which includes, amongst other things, an order for an attachment of shares in
Telkomsel and Indosat and the assets of Telkomsel and Indosat. The Plaintiffs also seek substantial damages,
amongst other things, as final relief.
By an order of the Central Jakarta District Court, the two class actions were consolidated and ordered to be heard
together in the Tangerang District Court. The consolidated action has been stayed pending an appeal by the Central
Jakarta Plaintiffs against the consolidation order.
SingTel and SingTel Mobile have been advised by its legal advisers that the Plaintiffs’ claims are without merit and will
take all necessary steps to protect their interests.
(c)
Disputes concerning international telecommunications traffic
As previously reported, Optus is in dispute with an international carrier regarding amounts due under contract.
Judgement has been received in Optus’ favour. The carrier subsequently obtained leave to re-open the judgement.
The Court has reserved its decision on whether the judgement should be altered. A notice of intention to appeal has
also been filed by the carrier.
(d) Disputes concerning content supply
Optus is in dispute with The Movie Network Channels Pty Limited (“Movie Network”), a content supplier, regarding
licence fees under a content supply agreement. Judgement has been received in Optus’ favour. Movie Network has
filed a notice of intention to appeal an aspect of the case.
(e)
Other commercial disputes
Optus (and certain subsidiaries) is in dispute with third parties regarding certain transactions entered into in the
ordinary course of business. Some of these disputes involve legal proceedings relating to the contractual obligations
of the parties and/ or representations made, including the amounts payable by Optus’ companies under the contracts
and claims against Optus’ companies for compensation for alleged breach of contract and/ or representations. Optus
is vigorously defending all these claims.
170 singapore telecommunications limited and suBsidiarY companies
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
42.
SIGNIFICANT DISPUTES AT JOINT V E NT U RE C O M PA NI E S
(a)
In January 2008, TOT Public Company Limited and CAT Telecom Public Company Limited demanded additional
payments of revenue share from Advanced Info Service Public Company Limited (“AIS”) and its subsidiary, Digital
Phone Company Limited (“DPC”) respectively. The Group holds an equity interest of 21.4% in AIS Group.
AIS and DPC have stated that in their opinion, the amounts demanded are the same as the excise taxes that they have
submitted to the Excise Department in prior years, according to the resolution of the Thai Cabinet dated 11 February
2003, and believe that the rulings of the Arbitration Panel shall have no impact to their financial statements. Both
cases are in the arbitration process and it could take several years before an arbitral award is rendered.
(b)
Bharti Airtel Limited (“Bharti”), a 30.4% joint venture of the Group, has received demands amounting to Rs 2,186
million (SingTel’s equity share: S$20 million) for the imports of special software on the ground that this would form
part of the hardware along with which the same has been imported. Bharti’s view is that such imports should not be
subject to any custom duty as it would be an operating software exempt from any custom duty. Bharti’s management
is of the view that the probability of the claims being successful is remote.
43. NATIONAL BROADBAND N ET WOR K IN SI NGA P O RE
On 22 April 2009, OpenNet Pte. Ltd. (“OpenNet”), in which SingTel has a 30% stake, received confirmation from the
Info-Communications Development Authority of Singapore (“IDA”), the local regulator, that OpenNet had successfully
fulfilled its Contractual and Financial Close requirements under the Singapore’s Next Generation National Broadband
Network’s NetCo award issued on 26 September 2008. As part of OpenNet’s proposal, SingTel has undertaken to
transfer the passive infrastructure assets required by OpenNet to an AssetCo, and to establish AssetCo as a business
trust within 24 months from April 2009. The AssetCo will own and control the relevant underlying passive infrastructure
assets such as underground ducts and manholes needed to support OpenNet’s deployment. In addition, SingTel will
reduce its stake in the AssetCo to less than 25% within 60 months from April 2009, subject to relevant approvals,
including shareholders’ approval.
The above arrangements enable SingTel to participate in the financial returns from its investment in OpenNet, as
well as provide SingTel with the opportunity to monetise its passive infrastructure assets. In addition, SingTel will be
able to leverage the new high-speed platform to deliver new services to customers while avoiding significant capital
expenditure.
44.
E FFECTS OF FRS AND INT FR S I SSU ED B UT NOT Y ET AD O PT ED
Certain new or revised FRS and INT FRS are mandatory for adoption by the Group for accounting periods beginning
on or after 1 January 2009.
In particular, FRS 1 – Presentation of Financial Statements (Revised) will change the basis for presentation and
structure of the financial statements while FRS 108 – Operating Segments (which replaces FRS 14 – Segment
Reporting) requires operating segments to be identified on the basis of internal segment reports regularly reviewed
by the chief operating decision maker.
The new or revised FRS and INT FRS are not expected to have a significant impact on the financial statements of the
Group or the Company in the period of initial application.
singtel annual report 2008 / 2009 171
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
45.
COMPANIES IN THE GROU P
The Company’s immediate and ultimate holding company is Temasek Holdings (Private) Limited, a company
incorporated in Singapore. The following were the significant subsidiaries, associated and joint venture companies as
at 31 March 2009 and 31 March 2008.
45. 1 Significant subsidiaries incorp orate d in Sin g ap ore
Name of subsidiary
Principal activities
1.
C2C Asiapac Pte Ltd
Provision of administrative, technical and
advisory services
Percentage of effective equity
held by the Group
2009
%
100
2008
%
100
2.
CVSI Pte Ltd
Provision of service support of computer
hardware & software and other
information technology related services
100
100
3.
INS Holdings Pte Ltd
Operating, managing and dealing in
telecommunication systems and services
100
100
4.
NCS Communications Engineering
Pte. Ltd.
Provision of facilities management and
consultancy services, and distributor of
specialised telecommunications and data
communication products
100
100
5.
NCS Pte. Ltd.
Provision of information technology and
consultancy services
100
100
6.
NCSI Solutions Pte. Ltd.
Provision of information technology
services
100
100
7.
8.
9.
Singapore Computer Systems
Limited (now known as SCS
Computer Systems Pte. Ltd.)
Provision of information technology and
consultancy services
100
-
NCSI Holdings Pte. Ltd.
Investment holding
Computer Systems Holdings Pte Ltd Investment holding
10.
Singapore Telecom Mobile Pte Ltd
Operation and provision of cellular mobile
telecommunications systems and services,
and investment holding
100
100
100
100
-
100
11.
Singapore Telecom Paging Pte Ltd
Provision of paging services which ceased
with effect from 9 July 2008
100
100
172 singapore telecommunications limited and suBsidiarY companies
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
45.1 Significant subsidiaries incorp orate d in Sin g apo re (con t’ d )
Name of subsidiary
Principal activities
Percentage of effective
equity held by the Group
2009
%
2008
%
12.
SingNet Pte Ltd
Provision of value-added and internet-related
services
100
100
13.
Singapore Telecom International
Pte Ltd
Holding of strategic investments and provision
of technical and management consultancy
services
100
100
14.
SingTel Group Treasury Pte. Ltd.
Provision of finance and treasury services to
SingTel and its subsidiaries
100
100
15.
SingTel Investments Private Limited Portfolio investment holding company
16.
SingTel Ventures (Singapore) Private
Limited
Venture capital investments in start-
up technology and telecommunications
companies
100
100
100
100
17.
SingTelSat Pte Ltd
Provision of satellite capacity for
telecommunications and video broadcasting
services
100
100
18.
19.
SingTel Asia Pacific Investments
Pte. Ltd.
Investment holding and provision of
consultancy services
ST-2 Satellite Ventures
Private Limited
Provision of satellite capacity for
telecommunications and video broadcasting
services
100
100
61.9
-
20.
Subsea Network Services Pte Ltd
Ownership and chartering of barges and
provision of storage facilities for submarine
cables and related equipment
100
100
21.
Sembawang Cable Depot Pte Ltd
Provision of storage facilities for submarine
cables and related equipment
60
60
22.
SingTel Digital Media Pte Ltd
(formerly known as Mercurix Pte Ltd)
Development and management of on-line
internet portal
100
100
23.
Telecom Equipment Pte Ltd
Engaged in the sale and maintenance of
telecommunications equipment
100
100
All companies (except SCS) are audited by Deloitte & Touche LLP, Singapore. SCS, acquired during the year, was
audited by KPMG LLP, Singapore, for its financial year ended 31 December 2008.
singtel annual report 2008 / 2009 173
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
45. 2 Significa nt subsidiaries incorp orate d in Au st ra lia
‘
1.
2.
3.
4.
5.
Name of subsidiary
Principal activities
Percentage of effective
equity held by the Group
2009
%
2008
%
Alphawest Services Pty Ltd (1)
Provision of information technology services
100
Cable & Wireless Optus Satellites Pty
Limited (1)
C1 Satellite contracting party
100
Inform Systems Australia Pty Ltd (1)
Provision of information technology services
100
NCSI (Australia) Pty Limited
Provision of information technology services
100
Optus Administration Pty Limited (1)
Provision of management services to the
Optus Group
100
100
100
100
100
100
6.
Optus Billing Services Pty Limited (*)
Provision of billing services to the Optus
Group
100
100
7.
Optus Broadband Pty Limited (1)
Provision of high speed residential internet
service
100
100
8.
9.
Optus Data Centres Pty Limited (1)
Provision of data communication services
Optus Finance Pty Limited (1)
Provision of financial services to the Optus
Group
100
100
100
100
10.
Optus Insurance Services Pty Limited
Provision of handset insurance and related
services
100
100
11.
Optus Internet Pty Limited (1)
Provision of internet services to retail
customers
100
100
12.
Optus Mobile Pty Limited (1)
Provision of mobile phone services
13.
Optus Narrowband Pty Limited (*)
Provision of narrow band portal content
services
100
100
100
100
14.
Optus Networks Investments Pty Ltd(*) (1) Bidding company for the National Broadband
100
-
Network in Australia
15
16
Optus Networks Pty Limited (1)
Provision of telecommunications services
Optus Rental & Leasing Pty Limited (*)
Provision of equipment rental services to
customers
100
100
100
100
174 singapore telecommunications limited and suBsidiarY companies
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
45.2 Significa nt subsidiaries incorp orate d in Au stra lia (co n t’ d )
Name of subsidiary
Principal activities
Percentage of effective
equity held by the Group
17
18
Optus Stockco Pty Limited (*)
Purchases of Optus Group network inventory
100
Optus Superannuation Pty Limited (*)
A trustee for Optus Group’s superannuation
scheme
100
2009
%
2008
%
100
100
19
Optus Systems Pty Limited (1)
Provision of information technology services
to the Optus Group
100
100
20
21
22
23
24
25
26
27
28
29
30
31
32
33
Optus Vision Interactive Pty Limited (*)
Provision of interactive television service
100
100
Optus Vision Media Pty Limited (*) (2)
Provision of broadcasting related services
Optus Vision Pty Limited (1)
Provision of telecommunications services
Perpetual Systems Pty Ltd (1)
Provision of IT disaster recovery services
Prepaid Services Pty Limited (1)
Distribution of prepaid mobile products
Reef Networks Pty
Ltd (1)
Operation and maintenance of fibre optic
network between Brisbane and Cairns
20
100
100
100
100
20
100
100
100
100
Singapore Telecom Australia
Investments Pty Limited
Investment holding company
100
100
Simplus Mobile Pty Limited (1)
Provision of mobile phone services
SingTel Optus Pty Limited
Investment holding company
Source Integrated Networks Pty
Limited (1)
Provision of data communications and
network services
Uecomm Operations Pty Limited (1)
Provision of data communication services
Virgin Mobile (Australia) Pty Limited (1) Provision of mobile phone services
XYZed LMDS Pty Limited (*)
Holder of telecommunications licence
XYZed Pty Limited (1)
Provision of telecommunications services
100
100
100
100
100
100
100
100
100
100
100
100
100
100
singtel annual report 2008 / 2009 175
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
45. 2 Significa nt subsidiaries incorp orate d in Au st ra lia (co n t’ d )
All companies are audited by Deloitte Touche Tohmatsu, Australia except for those companies denoted (*) where no
statutory audit is required.
Notes:
(1) These entities are relieved from the Australian Corporations Act 2001 requirements for preparation, audit and lodgement of
financial reports pursuant to ASIC Class Order 98/1418 (as amended) dated 13 August 1998.
(2) Optus Vision Media Pty Limited is deemed to be a subsidiary by virtue of control.
45. 3 Significa nt subsidiaries incorp orate d ou t sid e Si n ga pore an d Au stral ia
Name of subsidiary
Principal activities
Country of
incorporation
Percentage of effective
equity held by the Group
2009
%
2008
%
1.
GB21 (Hong Kong) Limited
Provision of telecommunications
services and products
Hong Kong
100
100
2.
3.
4.
5.
6.
Guangzhou Zhong Sheng
Information Technology Co.,
Ltd. (**) (1)
Provision of information
technology training
People’s Republic
of China
100
100
Information Network Services
Sdn Bhd
Provision of data communication
and value added network services
Malaysia
100
100
Lanka Communication
Services (Pvt) Limited
Provision of data communication
services
Sri Lanka
82.9
82.9
NCS Information Technology
(Suzhou) Co., Ltd. (**) (1)
Software development and
provision of information technology
services
People’s Republic
of China
100
100
NCSI (Chengdu) Co., Ltd (**) (1) Provision of information
technology research and
development, and other
information technology related
services
People’s Republic
of China
100
100
7.
NCSI (HK) Limited
8.
NCSI (India) Private Limited
Provision of information
technology services
Provision of information
technology services
Hong Kong
100
100
India
100
100
176 singapore telecommunications limited and suBsidiarY companies
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
45.3 Significant subsidiaries incorp orate d ou t sid e Si n ga pore an d Au stral ia (co n t’ d )
Name of subsidiary
Principal activities
9.
NCSI (Korea) Co., Limited
Provision of information
technology consultancy and
system integration services
Country of
Percentage of effective
incorporation
equity held by the Group
2009
%
2008
%
South Korea
100
100
10.
NCSI Lanka (Private) Limited Provision of information
Sri Lanka
100
100
technology and communication
engineering services
11.
NCSI (Malaysia) Sdn Bhd
Provision of information
technology services
Malaysia
100
100
12.
NCSI (ME) W.L .L.
13.
NCSI (Philippines) Inc.
14.
NCSI (Shanghai), Co. Ltd (**) (1)
Provision of information
technology and communication
engineering services
Provision of information
technology and communication
engineering services
Provision of system integration,
software research and
development and other
information technology-related
services
Bahrain
100
100
Philippines
100
100
People’s Republic
of China
100
100
15.
16.
17.
18.
19.
Shanghai Zhong Sheng
Information Technology Co.,
Ltd. (1)
Provision of information
technology training and software
resale
People’s Republic
of China
100
100
NCSI Holdings (Malaysia) Sdn.
Bhd.
Investment holding
Malaysia
100
100
SingTel Global Private Limited
(formerly known as SingTel i2i
Private Limited)
Provision of infotainment products
and services, and investment
holding
Mauritius
100
100
SingTel Global India Private
Limited
Provision of telecommunications
services and all related activities
India
74
-
Singapore Telecom Hong
Kong Limited
Provision of telecommunications
services and all related activities
Hong Kong
100
100
singtel annual report 2008 / 2009 177
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
45. 3 Significa nt subsidiaries incorp orate d o u ts id e S in ga pore an d Au stral ia (co n t’ d )
Name of subsidiary
Principal activities
Country of
Percentage of effective
incorporation
equity held by the Group
2009
%
2008
%
20.
21.
22.
23.
24.
Singapore Telecom India
Private Limited
Engaged in general liaison and
support services
India
100
100
Singapore Telecom Japan
Co Ltd
Provision of telecommunications
services and all related activities
Japan
100
100
Singapore Telecom Korea
Limited
Provision of telecommunications
services and all related activities
South Korea
100
100
Singapore Telecom USA,
Inc. (*)
Provision of telecommunications,
engineering and marketing
services
USA
100
100
SingTel Australia Investment
Ltd (*)
Investment holding company
British Virgin
Islands
100
100
25.
SingTel (Europe) Limited
Provision of telecommunications
services and all related activities
United Kingdom
100
100
26.
SingTel (Philippines), Inc.
Engaged in general liaison and
support services
Philippines
100
100
27.
SingTel Taiwan Limited
Provision of telecommunications
services and all related activities
Taiwan
100
100
28.
SingTel Ventures (Cayman)
Pte Ltd (*)
Venture capital investments
in start-up technology and
telecommunications companies
Cayman Islands
100
100
29.
Sudong Sdn. Bhd.
Management, provision and
operations of a call centre for
telecommunications services
Malaysia
100
100
All companies are audited by a member firm of Deloitte Touche Tohmatsu except for the following -
(*) No statutory audit is required.
(**) Audited by another firm.
Note:
(1) Subsidiary’s financial year-end is 31 December.
178 singapore telecommunications limited and suBsidiarY companies
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
For the financial year ended 31 March 2009
45.4 Associated companie s he ld b y the G ro u p
Name of associated company
Principal activities
Country of
Percentage of effective
incorporation
equity held by the Group
2009
%
2008
%
Netherlands
25.6
25.6
1.
2.
3.
4
5.
6.
ADSB Telecommunications
B.V.
Dormant
APT Satellite Holdings
Limited (1)
Investment holding company
Bermuda
20.3
20.3
APT Satellite International
Company Limited (1)
Investment holding company
British Virgin
Islands
28.6
28.6
Ayala Systems Technology,
Inc (4)
Sale, distribution, installation
and maintenance of computer
equipment and related products
Philippines
30.0
-
Infoserve Technology Corp.
Dormant
Cayman Islands
25.0
25.0
OpenNet Pte. Ltd.
To design, build and operate
the passive infrastructure for
Singapore’s Next Generation
National Broadband Network
Singapore
29.9
-
7.
Singapore Post Limited (2)
Operation and provision of postal
services
Singapore
25.7
25.7
8.
Telescience Singapore Pte
Ltd (4)
Sale, distribution and installation
of telecommunications equipment
Singapore
50.0
9.
Viewers Choice Pte Ltd (4)
Provision of services relating to
motor vehicle rental and retail of
general merchandise
Singapore
49.2
-
-
10.
Warid Telecom (Private)
Limited (3)
Provision of cellular
telecommunications services
Pakistan
30.0
30.0
Notes:
(1) The company has been equity accounted for in the consolidated financial statements based on results ended, or as at,
31 December 2008, the financial year-end of the company.
(2) Audited by PricewaterhouseCoopers, Singapore.
(3) Audited by A.F. Ferguson & Co. (a member firm of PricewaterhouseCoopers).
(4) The company was acquired as part of the acquisition of SCS during the year.
singtel annual report 2008 / 2009 179
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
45. 5 Joint venture companies held by the Gro u p
Name of joint venture company
Principal activities
1.
2.
Abacus Travel Systems Pte
Ltd
Acasia Communications Sdn
Bhd (1)
3.
ACPL Marine Pte Ltd
Advanced Info Service Public
Company Limited (1) (3) (4)
Marketing and distributing certain
travel-related services through
on-line airline computerised
reservations systems
Provision of services relating to
telecommunications, computer,
data and information within and
outside Malaysia
Owning, operating and managing
of maintenance-cum-laying
cableships
Provision of cellular,
broadband and international
telecommunications services, and
call center and data transmission
Country of
Percentage of effective
incorporation
equity held by the Group
2009
%
2008
%
Singapore
30.0
30.0
Malaysia
14.3
14.3
Singapore
41.7
41.7
Thailand
21.4
21.4
APT Satellite
Telecommunications
Limited (2)
Provision of telecommunications
services
Hong Kong
-
56.2
6.
ASEAN Cableship Pte Ltd
Operation of cableships for
laying, repair and maintenance
of submarine telecommunication
cables
Singapore
16.7
16.7
ASEAN Telecom Holdings Sdn
Bhd (1)
Investment holding company
Malaysia
14.3
14.3
Asiacom Philippines, Inc. (1)
Investment holding company
Philippines
40.0
40.0
Bharti Telecom Limited (5)
Investment holding company
10.
Bharti Airtel Limited (5)
Provision of cellular, long
distance, broadband and
telephony telecommunication
services, enterprise solutions,
pay television, and passive
infrastructure services
180 singapore telecommunications limited and suBsidiarY companies
India
India
32.8
30.4
32.8
30.4
4.
5.
7.
8.
9.
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
For the financial year ended 31 March 2009
45.5 Joint ven ture companies held by the Grou p ( co n t’ d )
Name of joint venture company
Principal activities
Country of
Percentage of effective
incorporation
equity held by the Group
2009
%
2008
%
11.
Bridge Mobile Pte Ltd
Provision of regional mobile
services
Singapore
33.4
33.1
12.
Globe Telecom, Inc. (6)
Provision of cellular, broadband,
international and
fixed line telecommunications
services
Philippines
47.3
44.5
13.
14.
15.
16.
Grid Communications
Pte Ltd (1)
Provision of public trunk radio
services
Singapore
50.0
50.0
Indian Ocean Cableship
Pte Ltd
Leasing, operating and managing
of maintenance-cum-laying
cableship
Singapore
50.0
50.0
International Cableship
Pte Ltd
Ownership and chartering of
cableships
Singapore
45.0
45.0
Main Event Television Pty
Limited
Provision of cable television
programmes
Australia
33.3
33.3
17.
OPEL Networks Pty Limited
Dormant
Australia
50.0
50.0
18.
19.
Pacific Bangladesh Telecom
Limited (7)
Operation and provision of cellular
mobile telecommunications
systems and services
Bangladesh
45.0
45.0
Pacific Carriage Holdings
Limited
Operation and provision of
telecommunications facilities and
services utilising a network of
submarine cable systems
Bermuda
40.0
40.0
20.
PT Telekomunikasi Selular (8)
Provision of cellular
telecommunications services
Indonesia
35.0
35.0
21.
Radiance Communications
Pte Ltd (1)
Sale, distribution, installation
and maintenance of
telecommunications equipment
Singapore
50.0
50.0
singtel annual report 2008 / 2009 181
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2009
For the financial year ended 31 March 2009
45. 5 Joint venture companies held by the Gro u p (con t ’d )
Name of joint venture company
Principal activities
22.
Southern Cross Cable
Holdings Limited
23.
TeleTech Park Pte Ltd
Operation and provision of
telecommunications facilities and
services utilising a network of
submarine cable systems
Engaged in the business of
development, construction,
operation and management of
TeleTech Park
Country of
Percentage of effective
incorporation
equity held by the Group
2009
%
2008
%
Bermuda
40.0
40.0
Singapore
40.0
40.0
24.
VA Dynamics Sdn Bhd (1)
Distribution of networking cables
and related products
Malaysia
49.0
49.0
Notes:
(1) The company has been equity accounted for in the consolidated financial statements based on the results ended, or as at,
31 December 2008, the financial year-end of the company.
(2) The Group regarded the company as a joint venture company, notwithstanding that it held more than 50% of the company’s issued
share capital, because it exercised joint control. The company has been disposed during the financial year.
(3) Audited by KPMG, Bangkok, in 2009.
(4) Audited by PricewaterhouseCoopers, Bangkok, in 2008.
(5) Audited by S.R.Batliboi & Associates, New Delhi (a member firm of Ernst & Young).
(6) Audited by SGV & Co. (a member firm of Ernst & Young).
(7) Audited by Hoda Vasi Chowdhury & Co (an independent correspondent firm of Deloitte Touche Tohmatsu).
(8) Audited by Haryanto Sahari & Rekan (a member firm of PricewaterhouseCoopers).
182 singapore telecommunications limited and suBsidiarY companies
182 singapore telecommunications limited and suBsidiarY companies
INTERESTED PERSON TRANSACTIONS
The aggregate value of all interested person transactions during the financial year ended 31 March 2009 (excluding
transactions less than S$100,000) were as follows -
Name of interested person
Jemena Electricity Networks (Vic) Ltd
(formerly known as Alinta AE Limited)
CESMA International Pte Ltd
Chartered Semiconductor Manufacturing Ltd
Grid Communications Pte Ltd
iShopAero Pte Ltd
MediaCorp Pte Ltd
MediaCorp TV Singapore Pte Ltd
NexWave Technologies Pte Ltd
PSA Corporation Ltd
PT Bank Danamon Indonesia Tbk
Radiance Communications Pte Ltd
Singapore Airlines Ltd
Singapore Airport Terminal Services Ltd
SMRT Corporation Ltd
SMRT Trains Ltd
SPI PowerNet Pty Ltd
SPI Networks Pty Ltd
SP AusNet
StarHub Ltd
StarHub Cable Vision Ltd
StarHub Mobile Pte Ltd
ST Electronics (Info-Software Systems) Pte Ltd
ST Electronics (Satcom & Sensor Systems) Pte Ltd
Singapore Technologies Kinetics Ltd
Singex Exhibitions Pte Ltd
Temasek Holdings (Private) Ltd
S$ mil
1.4
0.4
0.9
0.1
0.4
0.3
0.1
0.9
1.3
0.2
5.9
0.3
0.2
0.4
0.4
1.1
0.1
1.5
44.1
29.6
2.3
0.6
2.9
0.2
0.4
0.1
96.1
singtel annual report 2008 / 2009 183
SHAREHOLDER INFORMATION
As at 28 May 2009
ORDINARY SHARES
Number of ordinary shareholders
Number of holders of CHESS Units of Foreign Securities relating to ordinary shares in the
Company (“CUFS”)
313,786
24,069
Voting rights:
On a show of hands - every member present in person and each proxy shall have one vote
On a poll - every member present in person or by proxy shall have one vote for every share he holds or represents
(The Company cannot exercise any voting rights in respect of shares held by it as treasury shares)
SingTel shares are listed on Singapore Exchange Securities Trading Limited and ASX Limited (“ASX”) (in the form of CUFS).
SUBSTANTIAL SHAREHOLDERS
Direct
Interest
Deemed
Interest
Temasek Holdings (Private) Limited
8,671,325,982
36,048,813*
* deemed through interests of associated companies and/or subsidiaries.
MAJOR SHAREHOLDERS LIST - TOP 20
Name
Temasek Holdings (Pte) Ltd
DBS Nominees Pte Ltd
DBSN Services Pte Ltd
Central Provident Fund Board
Citibank Nominees Singapore Pte Ltd
HSBC (Singapore) Nominees Pte Ltd
Chess Depositary Nominees Pty Limited*
United Overseas Bank Nominees Pte Ltd
Raffles Nominees (Pte) Ltd
BNP Paribas Securities Services Singapore Branch
DB Nominees (S) Pte Ltd
TM Asia Life Singapore Ltd - Par Fund
Oversea Chinese Bank Nominees Pte Ltd
No.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14. Merrill Lynch (Singapore) Pte Ltd
15.
16.
17. Morgan Stanley Asia (Singapore) Securities Pte Ltd
18.
19.
20.
Phillip Securities Pte Ltd
OCBC Securities Private Ltd
TM Asia Life Singapore Ltd - Non-Par Fund
OCBC Nominees Singapore Pte Ltd
Royal Bank of Canada (Asia) Ltd
No. of
shares held
8,671,325,982
1,995,806,708+
1,413,735,538
969,403,634
749,320,196
531,104,961
498,403,735
262,344,173
94,753,162
86,917,939
78,309,392
26,000,000
24,834,440
21,179,806
18,458,347
11,175,180
8,885,402
4,057,344
4,028,534
4,000,000
15,474,044,473
% of issued
share capital#
54.46
12.53
8.88
6.09
4.71
3.34
3.13
1.65
0.60
0.55
0.49
0.16
0.16
0.13
0.12
0.07
0.06
0.03
0.03
0.03
97.22
* the shares held by cHess depositary nominees pty ltd are held on behalf of the persons entered in the register of cuFs holders.
# the percentage of issued ordinary shares is calculated based on the number of issued ordinary shares of the company as at 28 may 2009,
excluding 3,699,483 ordinary shares held as treasury shares as at that date.
+ excludes 3,699,483 ordinary shares held by dBs nominees pte ltd as treasury shares for the account of the company.
184 singapore telecommunications limited and suBsidiarY companies
SHAREHOLDER INFORMATION
As at 28 May 2009
MAJOR CUFS HOLDERS LIST* - T OP 20
No.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
Name
National Nominees Limited
J P Morgan Nominees Australia Limited
HSBC Custody Nominees (Australia) Limited
ANZ Nominees Limited (Cash Income A/C)
Citicorp Nominees Pty Limited
Cogent Nominees Pty Limited
Australian Reward Investment Alliance
RBC Dexia Investor Services Australia Nominees Pty Limited
Cogent Nominees Pty Limited (SMP Accounts)
AMP Life Limited
Citicorp Nominees Pty Limited (CFSIL CWLTH AUST SHS 1 A/C)
J P Morgan Nominees Australia Limited
Citicorp Nominees Pty Limited (CFS WSLE IMPUTATION FND A/C)
Citicorp Nominees Pty Limited (CFS IMPUTATION FUND A/C)
Citicorp Nominees Pty Limited (CFS FUTURE LEADERS FUND A/C)
The Australian National University
Citicorp Nominees Pty Limited (CWLTH BANK OFF SUPER A/C)
Pan Australian Nominees Pty Limited
Citicorp Nominees Pty Limited (CFSIL CFS WS AUST SHRE A/C)
UBS Nominees Pty Ltd
No. of
CUFS held
139,997,682
79,372,583
43,049,114
20,331,045
16,016,301
15,082,713
10,284,290
9,626,043
8,695,428
7,827,293
5,403,200
5,107,820
4,509,894
3,113,965
3,065,200
3,000,000
2,898,844
2,779,009
2,222,320
2,204,043
384,586,787
% of issued
share capital#
0.88
0.50
0.27
0.13
0.10
0.09
0.06
0.06
0.05
0.05
0.03
0.03
0.03
0.02
0.02
0.02
0.02
0.02
0.01
0.01
2.40
* cuFs are cHess units of Foreign securities relating to ordinary shares in the company. the shares are held by cHess depositary
nominees pty ltd on behalf of the persons entered in the cuFs register.
# the percentage of issued ordinary shares is calculated based on the number of issued ordinary shares of the company as at 28 may
2009, excluding 3,699,483 ordinary shares held as treasury shares as at that date.
ANALYSIS OF SHAREHOLDERS AND CUFS HOLDERS
Range of holdings
1 - 999
1,000 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 - 1,000,000
1,000,001 and above
No. of
holders
276,695
44,594
8,994
7,114
387
71
337,855
% of
holders
81.90
13.20
2.66
2.11
0.11
0.02
100.00
No. of
shares/CUFS
63,812,426
104,127,681
68,226,301
175,744,503
92,605,951
15,422,793,269
15,927,310,131
Number of holders holding less than a marketable parcel
% of issued
share capital
0.40
0.66
0.43
1.10
0.58
96.83
100.00
249,167
Notes:
(1) this table is compiled on the basis that each holding of cuFs is a separate holding and, accordingly, the holding of shares by cHess
depositary nominees pty ltd is ignored.
(2) Based on information available to the company as at 28 may 2009, approximately 45.30% of the issued ordinary shares of the company
is held by the public and, therefore, rule 723 of the listing manual issued by the singapore exchange securities trading limited is
complied with. the percentage of issued ordinary shares held by the public is calculated based on the number of issued ordinary shares
of the company as at 28 may 2009, excluding 3,699,483 ordinary shares held as treasury shares as at that date.
(3) a marketable parcel is defined in the asX listing rules as a parcel of securities of not less than $500 in australian dollars, based on
the closing price of the securities on the asX.
(4) as at 28 may 2009, the number of ordinary shares held in treasury is 3,699,483, and the percentage of such holding against the total
number of issued ordinary shares (excluding ordinary shares held as treasury shares) is 0.02%.
SHARE PURCHASE MANDATE
At the Extraordinary General Meeting of the Company held on 25 July 2008 (“2008 EGM”), the shareholders approved the
renewal of a mandate to enable the Company to purchase or otherwise acquire not more than 10.0 per cent of the issued
ordinary share capital of the Company as at the date of the 2008 EGM. As at 28 May 2009, there is no current on-market
buy-back of shares pursuant to the mandate.
CORPORATE INFORMATION
BOARD OF DIRECTORS
Chumpol NaLamlieng (Chairman)
Chua Sock Koong (Group Chief
Executive Officer)
Graham John Bradley
Fang Ai Lian
Heng Swee Keat
Dominic Chiu Fai Ho
Simon Israel
John Powell Morschel
Kaikhushru Shiavax Nargolwala
Ong Peng Tsin
Deepak S Parekh
Nicky Tan Ng Kuang
AUDIT COMMITTEE
Fang Ai Lian (Chairman)
Graham John Bradley
Dominic Chiu Fai Ho
Kaikhushru Shiavax Nargolwala
COMPENSATION COMMITTEE
Chumpol NaLamlieng (Chairman)
Heng Swee Keat
John Powell Morschel
Deepak S Parekh
CORPORATE GOVERNANCE &
NOMINATIONS COMMITTEE
Kaikhushru Shiavax Nargolwala
(Chairman)
Heng Swee Keat
Dominic Chiu Fai Ho
Chumpol NaLamlieng
FINANCE, INVESTMENT AND RISk
COMMITTEE
Nicky Tan Ng Kuang (Chairman)
Simon Israel
Ong Peng Tsin
OPTUS ADVISORY COMMITTEE
John Powell Morschel (Chairman)
Graham John Bradley
Chua Sock Koong
Simon Israel
Nicky Tan Ng Kuang
COMPANY SECRETARY
Chan Su Shan
In Australia:
ASSISTANT COMPANY SECRETARY
Lim Li Ching
REGISTERED OFFICES
In Singapore
31 Exeter Road
Comcentre
Singapore 239732
Republic of Singapore
Tel: +65 6838 3388
Fax: +65 6732 8428
Email: contact@singtel.com
Website: www.singtel.com
In Australia
Level 4, Building C
1 Lyonpark Road, Macquarie Park
NSW 2113 Australia
Tel: +61 2 8082 7800
Fax: +61 2 8082 7100
Email: optusbusiness@optus.com.au
Website: www.optus.com.au
SHARE REGISTRARS
In Singapore:
M & C Services Private Limited
138 Robinson Road
#17-00 The Corporate Office
Singapore 068906
Republic of Singapore
Tel: +65 6228 0544
Fax: +65 6225 1452
Email: annualreports@mncsingapore.com
Website: www.mncsingapore.com
Computershare Investor Services Pty Limited
60 Carrington Street, Level 3
Sydney, NSW 2000
Australia
Tel: 1800 501 501 (Enquiries within Australia)
Tel: +61 3 9415 4029 (Outside Australia)
Fax: +61 3 9473 2500
Email: web.queries@computershare.com.au
Website: www.computershare.com.au
SINGTEL AMERICAN DEPOSITARY
RECEIPTS
Citibank Shareholder Services
250 Royall Street
Canton, MA 02021
USA
Tel: 1 877 248 4237 (Toll Free within USA)
Tel: +1 781 575 4555 (Outside USA)
Email: citibank@shareholders-online.com
Website: www.citi.com/dr
AUDITORS
Deloitte & Touche LLP (appointed on
28 July 2006)
6 Shenton Way #32-00
DBS Building Tower Two
Singapore 068809
Republic of Singapore
Tel: +65 6224 8288
Fax: +65 6538 6166
Audit Partner: Chaly Mah Chee Kheong
INVESTOR RELATIONS
31 Exeter Road
#19-00 Comcentre
Singapore 239732
Republic of Singapore
Tel: +65 6838 2123
Fax: +65 6734 4492
Email: investor@singtel.com
186 singapore telecommunications limited and suBsidiarY companies
SINGTEL CONTACT POINTS
SINGAPORE
SingTel Headquarters
31 Exeter Road, Comcentre
Singapore 239732
Republic of Singapore
Tel: +65 6838 3388
Fax: +65 6732 8428
Email: contact@singtel.com
Website: www.singtel.com
NCS Pte. Ltd
5 Ang Mo Kio Street 62
NCS Hub, Singapore 569141
Republic of Singapore
Tel: +65 6556 8000
Fax: +65 6556 7000
Email: reachus@ncs.com.sg
AUSTRALIA
SingTel Optus Pty Limited
Sydney (Head Office)
Optus Centre Sydney
1 Lyonpark Road
Macquarie Park, NSW 2113, Australia
Aus Toll Free: 1800 555937
Tel: +61 2 8082 7800
Fax: +61 2 8082 7100
Email: optusbusiness@optus.com.au
Website: www.optus.com.au
Adelaide
Level 4, 431-439 King William Street
Adelaide, SA 5000, Australia
Tel: +61 8 8468 5100
Fax: +61 8 8468 5166
Brisbane
Level 21, 12 Creek Street
Brisbane, QLD 4000, Australia
Tel: +61 7 3317 3700
Fax: +61 7 3317 3777
Canberra
Level 3, 10 Moore Street
Canberra, ACT 2601, Australia
Tel: +61 2 6222 3800
Fax: +61 2 6222 3838
D arwin
Optus Centre Darwin
49 Woods Street
Darwin, NT 0800, Australia
Tel: +61 8 8901 4500
Fax: +61 8 8924 4016
Melbourn e
367 Collins Street
Melbourne, VIC 3000, Australia
Tel: +61 3 9233 4000
Fax: +61 3 9233 4900
Pe rth
Level 3, 1260 Hay Street
West Perth, WA 6005, Australia
Tel: +61 8 9288 3000
Fax: +61 8 9288 3030
BANGLAD ESH
Dhaka
Singapore Telecommunications
Limited
(Bangladesh Liaison Office)
Bay’s 50 Mohakhali
15th Floor (South Block)
Dhaka – 1212, Bangladesh
Tel: +880 2 883 5120
Fax: +880 2 988 0037
Email: g-singtel-bd@singtel.com
CH INA
Beijing
Unit 1503, Beijing Silver Tower
2 Dongsanhuanbei Road
Chaoyang District, Beijing 100027
People’s Republic of China
Tel: +86 10 6410 6193 / 4 / 5
Fax: +86 10 6410 6196
Email: singtel-beij@singtel.com
Guangzh ou
Room 918, Garden Tower
368 Huan Shi East Road
Guangzhou City 510064
Guangdong Province
People’s Republic of China
Tel: +86 20 8388 2483
Fax: +86 20 8365 2660
Email: singtel-gz@singtel.com
Shangha i
Unit 1108, Tower B, Wanda Plaza
36 Guobin Road
Shanghai 200433
People’s Republic of China
Tel: +86 21 3362 0388
Fax: +86 21 3362 0389
Email: singtel-sha@singtel.com
E URO PE
Fran kf u rt
Platz der Einheit 1
60327 Frankfurt am Main, Germany
Tel: +49 69 975 03 445
Fax: +49 69 975 03 200
Email: singtel-germany@singtel.com
Lo nd o n
Birchin Court
20 Birchin Lane
London EC3V 9DU, United Kingdom
Tel: +44 20 7122 8000
Fax: +44 20 7122 8088
Email: singtel-uk@singtel.com
Pa ris
24 Avenue Hoche
75008 Paris, France
Tel: +33 1 47 63 8999
Fax: +33 1 47 63 4476
Email: singtel-france@singtel.com
HO NG KO NG
Suites 2002-6, Tower 6
The Gateway, 9 Canton Road
Tsimshatsui, Kowloon, Hong Kong
Tel: +852 2829 9327
Fax: +852 2802 1500
Email: singtel-hk@singtel.com
IN DI A
Ba ng alore
Suite No. 305
DBS Business Centre
26 Cunningham Road
Bangalore 560052, India
Tel: +91 80 2226 7272
Fax: +91 80 2225 0509
Email: singtel-ind@singtel.com
C he nn a i
DBS Executive Centre
31A Cathedral Garden Road
Chennai 600034, India
Tel: +91 44 2831 1226 / 91 44 2827 5191
Fax: +91 44 2821 4066
Email: singtel-ind@singtel.com
singtel annual report 2008 / 2009 187
SINGTEL CONTACT POINTS
Hy derabad
DBS Business Centre
105-DBS House
1-7-43-46, Sardar Patel Road
Secunderabad - 500003, India
Tel: +91 40 2784 6970 /
+91 40 2784 2588 Extn: 105
Fax: +91 40 2784 6955
Email: singtel-ind@singtel.com
Tokyo
Arco Tower
5F, 1-8-1 Shimomeguro
Meguro-ku, Tokyo 153-0064, Japan
Tel: +81 3 5437 7033
Fax: +81 3 5437 7066
Email: singtel-jpn@singtel.com
KO RE A
Kol katta
Suite #12A, Apeejay Business Centre
Apeejay House, Block ‘A’
15 Park Street, Kolkatta - 700016, India
Tel: +91 33 2217 1136 Ext: 128
Fax: +91 33 2217 1137
Email: singtel-ind@singtel.com
Seoul
11th Floor, Hansol Building
736-1 Yoksam-Dong, Kangnam-Gu
135-983, Seoul, Korea
Tel: +82 2 3287 7576
Fax: +82 2 3287 7589
Email: singtel-kor@singtel.com
Mumbai
Sahar Plaza
111 Bonanza Wing B
Mathuradas Vasanji Road
Andheri East, Mumbai 400069, India
Tel: +91 22 2824 4999
Fax: +91 22 2824 4996
Email: singtel-ind@singtel.com
New Delhi
B-1401, 14th Floor, Statesman House
148 Barakhamba Road
New Delhi 110001, India
Tel: +91 11 4152 1199
Fax: +91 11 4152 1683
Email: singtel-ind@singtel.com
I NDONESIA
Jakarta
Plaza Lippo
15th Floor, Suite 1505
Jalan Jenderal, Sudirman Kavling 25
Jakarta 12920, Indonesia
Tel: +62 21 526 7938
Fax: +62 21 526 7939
Email: singtel-ina@singtel.com
JAPAN
Osaka
NTT Data Dojima Building
16F, 3-1-21, Dojima 3-Chome
Kita-Ku, Osaka 530-0003, Japan
Tel: +81 6 6458 1405 / 1407
Fax: +81 6 6458 1401
Email: singtel-jpn@singtel.com
MALAYSIA
Kuala Lu mpur
602B, Level 6, Tower B, Uptown 5
5, Jalan SS21/39, Damansara Uptown
47400 Petaling Jaya
Selangor Darul Ehsan, Malaysia
Tel: +603 7728 2813
Fax: +603 7727 6186
Email: singtel-mal@singtel.com
MIDDLE EAST
Dubai
Dubai Internet City 12 #02-211
P O Box 502430, Dubai
United Arab Emirates
Tel: +971 4363 6705
Fax: +971 4361 1063
Email: g-singtel-me@singtel.com
PHILIPP INE S
Manila
Unit 1504 Liberty Center
104 H V de la Costa Street
Salcedo Village, Makati City 1200
Philippines
Tel: +63 2 887 2791
Fax: + 63 2 887 2763
Email: singtel-phil@singtel.com
TAIWAN
Taipei
2F, No 290, Section 4
Chung Hsiao East Road, Taipei
Taiwan, Republic of China
Tel: +886 2 2741 1688
Fax: +886 2 2778 6083
Email: singtel-twn@singtel.com
188 singapore telecommunications limited and suBsidiarY companies
THAI LAND
Ba ng kok
9th Floor, Unit 6
500 Amarin Tower
Ploenchit Road, Lumpini
Pathumwan, Bangkok 10330, Thailand
Tel: +66 2 256 9875 / 6
Fax: +66 2 256 9808
Email: singtel-thai@singtel.com
USA
US Toll Free: 1-887-SINGTEL
Email: singtel-usa@singtel.com
C hica go
8770 West Bryn Mawr
Suite 1302
Chicago, IL 60631, USA
Lo s An geles
624 South Grand
8th Floor, Suite 825
Los Angeles, CA 90017, USA
New Yo rk
140 Broadway
Suite 2128
New York, NY 10015, USA
Sa n Fra n cisco
100 Marine Parkway
Suite 450
Redwood City, CA 94065, USA
V IE TNAM
Ha no i
Suite 502, Nguyen Du Building
5th Floor
30 Nguyen Du Street
Hai Ba Trung District
Hanoi, Vietnam
Tel: +84 4 943 2161 / 2
Fax: +84 4 943 2163
Email: singtel-vn@singtel.com
Ho Ch i M in h
Unit 1807, 18th Floor
Sun Wah Tower
115 Nguyen Hue Boulevard
District 1, Ho Chi Minh City, Vietnam
Tel: +84 4 943 2161 / 2
Fax: +84 4 943 2163
Email: singtel-vn@singtel.com
ContentS
2
4
6
9
10
16
Organisation Structure
Board of Directors
Members of the
Management Committee
18
Awards and Accolades
Operational Highlights
REACHING FURTHER AS THE
STAYING RESILIENT WITH
Financial Highlights
MARKET LEADER
GOOD GOVERNANCE
Chairman’s Statement
23
Operating and Financial Review
58
75
Corporate Governance Report
Financial Statements
STAYING COMMITTED TO BE A
183
Interested Person Transactions
RESPONSIBLE CORPORATE CITIZEN
184 Shareholder Information
50
54
Corporate Social Responsibility
186 Corporate Information
Our People
187 SingTel Contact Points
Singtel is asia’s leading communications group, providing a diverse range of innovative
communications services including fixed, mobile, data, internet, it and tv.
Headquarters
Singapore Telecommunications Limited
31 Exeter Road
Comcentre
Singapore 239732
Republic of Singapore
Tel: +65 6838 3388
Fax: +65 6732 8428
Website: www.singtel.com
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Si n g aPoRe t e l eCoM M Un iC
at i o nS l iMi t eD ANNUAL REPOR T 20 0 8/ 20 0 9