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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
Copyright © 2010
Singapore Telecommunications Limited (CRN: 199201624D)
All rights reserved
Changing the Game
Staying Ahead
Singapore Telecommunications Limited
2009/2010 Annual Report
CONTENTS
2 Operational Highlights
SHAPING OUR MARKETS
4
Financial Highlights
ADDING NEW DIMENSIONS
GENERATING GROWTH
DELIVERING VALUE
6 Chairman’s Statement
9 Organisation Structure
10 Board of Directors
15 Members of the
22 Operating and Financial Review
76 Financial Statements
191 Interested Person Transactions
ENGAGING THE COMMUNITY
192 Shareholder Information
DEVELOPING OUR TALENT
194 Corporate Information
Management Committee
50 Corporate Social Responsibility
195 SingTel Contact Points
18 Key Awards and Accolades
54 Our People
58 Corporate Governance
SingTel is Asia’s leading communications group, providing a diverse range of innovative
communications services including fixed, mobile, data, Internet, IT and TV.
CHANGING THE GAME
STAYING AHEAD
Elegant in its simplicity, the tangram embodies a
world of infinite ideas, like the limitless possibilities
SingTel creates through innovation and technology.
Its changing form echoes our reshaping of the
market through myriad configurations of our
ever-expanding suite of products and services.
As a puzzle, the tangram poses the challenge of
constructing a coherent structure from distinct
pieces. Similarly, the Group brings together
different associates in a way that generates
synergies and economies of scale. The timeless
tangram is a symbol of how SingTel is always
changing the game and staying ahead.
2
Singapore Telecommunications Limited and Subsidiary Companies
Operational Highlights
GROUP
The SingTel Group continues to leverage its telecommunications and
Infocomm Technology (ICT) capabilities to provide converged ICT-telco
services. In May 2009, SingTel signed a A$500 million, five-year contract
with ANZ to provide telecommunications and managed network services
to ANZ in Australia and 30 countries across Asia and the Pacific to
support ANZ’s super regional strategy.
AUSTRALIA
D3
Optus launched the D3 satellite in August 2009, increasing its satellite fleet
capacity by more than 30 per cent. Optus is committed to keeping Australia
and New Zealand at the forefront of satellite technology as it continues to
invest in bringing communications capability to more households.
10 MHz
In March 2010, Optus acquired an additional 10 MHz of paired 3G
spectrum which doubled its holdings in Australia’s eight capital cities
from 10 MHz to 20 MHz. Through this investment, Optus deepens its
mobile network capacity and is well-positioned to meet the strong
growth in demand for data services.
13% mobile
service revenue
growth
Optus Mobile delivered a
strong 13% growth in service
revenue and outperformed the
market, led by robust customer
acquisitions and
increased
penetration of smartphones.
709,000
its
Optus Mobile continued
growth momentum, adding
a
total of 709,000 mobile
customers this year.
SingTel Annual Report 2009/2010
3
SINGAPORE
200,000
mio TV customer base crossed 200,000
in April 2010. SingTel will strengthen
its carriage business and leverage key
iconic content to build scale in mio TV and
drive takeup of its multimedia bundled
services.
500,000 sq feet
With the launch of the new Kim Chuan
Telecommunications Centre
(KCTC-2),
SingTel will offer over 500,000 sq feet
of data centre space or almost half of
Singapore’s total data centre space*.
KCTC-2 is the first facility in Singapore to
be built according to Tier-4 specifications*,
the industry’s most stringent data centre
for reliability and service
standards
availability.
*Source: Frost & Sullivan
AMPedTM -
Best Mobile
Music Service
SingTel launched AMPed in partnership
with Universal Music Group in June
2009, which is the first-of-its-kind mobile
social music service in Asia offering free
unlimited music downloads and daily
music news. AMPed has won the coveted
“Best Mobile Music Service” award at the
GSMA’s Asia Mobile Awards 2009.
96%
Visual courtesy of Universal Music Singapore
Wins exclusive rights for Barclays
Premier League and ESPN STAR Sports
SingTel won the rights for the Barclays Premier League football matches for three
years commencing August 2010 and ESPN STAR Sports from mid-2010, establishing it
as the premier sports content provider in Singapore.
mio TV pricing philosophy is based on customers paying for programmes they want
to watch, offering customers flexibility and choice via true video-on-demand
programming. Through this, SingTel will attract even more customers who previously
did not subscribe to a sports package on cable TV due to the high cost barrier.
REGIONAL
293 million
SingTel Group serves 293 million
customers across Asia Pacific.
MOBILE CUSTOMERS (million)
LTE
SingTel is conducting a regional trial of
Long Term Evolution (LTE) technology
in Australia, Indonesia, the Philippines
and Singapore, together with Optus,
Globe and Telkomsel. LTE base stations
and core network equipment will be
293
installed for detailed field tests that will
249
evaluate the features and end-to-end performance of the technology.
185
124
85
MAR
06
MAR
07
MAR
08
MAR
09
MAR
10
This will help the SingTel Group better understand LTE and determine the
best approach and strategy for its adoption in their respective local markets,
and lay the groundwork to establish a regionally compatible LTE network to
drive growth in mobile broadband services.
4
Singapore Telecommunications Limited and Subsidiary Companies
Financial Highlights
OPERATING REVENUE
UNDERLYING NET PROFIT (1)
FREE CASH FLOW (2)
in
local currency
During the year, Singapore and Optus
revenues
terms
both rose 8%, demonstrating strong
execution. Group consolidated revenue
rose 13%, helped by the stronger
Australian dollar.
rose
profit
Underlying net
13%,
underpinned by robust performance in
the Singapore and Australia businesses
and earnings recovery in Telkomsel.
Free cash flow for the year rose 5%
to S$3.4 billion. Both Singapore and
Australia operations recorded higher
free cash flows in their respective
currencies, partially offset by lower
dividend from Telkomsel in respect of
its lower 2008 earnings.
S$16,871m
S$14,934m
S$3,910m
S$3,455m
S$3,406m
S$3,245m
FY08/09
FY09/10
FY08/09
FY09/10
FY08/09
FY09/10
PROPORTIONATE EBITDA (3)
The Group has a diversified earnings base as a result of
its investments in large emerging markets. Overseas
operations contributed 73% to proportionate EBITDA.
Singapore
27%
Australia
30%
Regional Mobile 42%
Others
1%
Notes:
(1) Underlying net profit refers to net profit before exceptional items
(2) Free cash flow refers to cash flow from operating activities less capital expenditure
(3) 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
+13%+13%+5%
SingTel Annual Report 2009/2010
5
SINGAPORE
AUSTRALIA
REGIONAL
SINGAPORE REVENUE
OPTUS REVENUE
S$5,995m
S$5,547m
A$8,949m
A$8,321m
SHARE OF REGIONAL
MOBILE ASSOCIATES
PRE-TAx PROFIT
S$2,291m
S$1,958m
FY08/09
FY09/10
FY08/09
FY09/10
FY08/09
FY09/10
• Mobile outperformed the market, as
revenue rose 8% on strong customer
growth and increased data usage.
• Data & Internet revenue rose 3% on
cautious corporate telecom spending.
Managed Services revenue posted a
solid 17% growth as SingTel extended
its lead in the international IP VPN
market.
• IT & Engineering revenue grew
significantly by 32% with a robust
performance from NCS Group, and
boosted by first time recognition of
fibre rollout revenue.
• Mobile continued its growth momentum,
with revenue surging 13% on strong
demand
for smartphones, wireless
broadband, and popularity of its ‘yes’
Timeless unlimited plans.
• Business and Wholesale Fixed revenue
rose 2% as business voice declined and
data usage moderated with cautious
corporate spending.
• In Consumer and Small and Medium
Business fixed-line, Optus remained
focused on delivering profitable on-net
growth. Revenue for the year fell 3%
as Optus continues to exit unprofitable
resale fixed-line services.
• Bharti continued to lead the Indian
mobile market. Operating revenue
grew 7% on strong customer growth
partly offset by ARPU dilution due
to intense competition in India. The
Group’s share of Bharti’s pre-tax profit
grew 12% to S$978 million.
• Telkomsel is the clear market leader in
Indonesia. Operating revenue recorded
a strong rebound, driven by growth in
customer base and minutes of use
amid a more stable albeit competitive
environment. The Group’s share of
pre-tax profit from Telkomsel grew a
strong 33% to S$940 million.
+8%+8%+17% 6
Singapore Telecommunications Limited and Subsidiary Companies
Chairman’s Statement
Dear Shareholders
2009 marked the year during which the
global economy, assisted by various
Anticipating change
governments’ counter
recession and
We are entering the tenth year of
stimulus measures, emerged from the
full liberalisation of the Singapore
global financial crisis. Asia led the economic
telecommunications
industry. The
recovery and the telecommunications
liberalisation has accelerated
the
market continued to grow.
Group’s need to diversify and grow new
revenues and geographies.
I am pleased that the SingTel Group met and
exceeded many of its financial and business
Today, more than 70 per cent of
targets set at the beginning of the financial
proportionate EBITDA is derived from
year. Underlying net profit increased 13 per
outside of Singapore and international
cent to S$3.91 billion, with revenue growing
telephony services now account for just
at the same rate to S$16.87 billion.
4.2 per cent of revenue compared to
38 per cent back in 1999. In addition,
The Board has recommended a final
our mobile services are present in eight
ordinary dividend of 8.0 cents per share.
markets with access to 293 million mobile
Together with the interim dividend of 6.2
customers; and we have a network
cents per share, the Group is delivering a
of 37 overseas offices to serve the
14 per cent increase in total dividends to
communications needs of our corporate
Chumpol NaLamlieng
Chairman
S$2.26 billion.
The Board has recommended a final ordinary dividend of
8.0 cents per share. Together with the interim dividend of
6.2 cents per share, the Group is delivering a 14 per cent
increase in total dividends to S$2.26 billion.
customers. The Group now ranks among
the Top 15 global telecommunications
companies 1.
Presently, the Group similarly stands
at the threshold of major technological,
economic,
regulatory and
industry
changes.
Intensifying competition
in
our core carriage business makes it
more urgent for us to transform and
differentiate our products and services
and customer service experience.
1: Based on market capitalisation as at 31 March 2010
SingTel Annual Report 2009/2010
7
We are moving fast to be ahead. We aim to lead and to
shape the communications landscape.
Making the right
moves, leveraging our
scale
Our regional associates are
facing
the Government’s vision for the National
enhance mobile and data capacity and
Broadband Network to reshape the fixed-
distribution capabilities.
line telecoms sector to deliver significant
benefits for the community.
Besides
enhancing
our
network
capabilities, we are also leveraging the
increased competition as their markets
A similar sea change is taking place in the
Group’s scale to develop new applications,
open up to more service providers. In
mobile arena. Customers are increasingly
services and products across the region
Singapore, the Next Generation National
engaged with their smartphones and
to give our customers faster access
Broadband Network, which starts
Internet devices to perform functions
to the widest range of multimedia
commercial operations this year, will
for work and leisure anywhere, anytime.
communications service offerings.
bring ultra high-speed network access
Richer applications and services will be
to homes and businesses and will attract
delivered over mobile networks. In fact,
We have been
transforming our
many more new retail service providers.
for many regional and rural customers
businesses, people and processes to
Structurally and operationally, we
in the developing markets, they will
prepare for change. To meet the explosive
believe we are well positioned to capture
be accessing the Internet for the first
demand for mobile data, the Group has
the growth potential from successful
time through their mobile phones. We
planned a regional trial of Long Term
adoption of fibre services in Singapore.
have also been stepping up our network
Evolution technology across Singapore,
In Australia, we are a strong advocate of
investments
in regional Australia to
Australia, Indonesia and the Philippines.
Optus launches its newest state-of-the-art
satellite – Optus D3
8
Singapore Telecommunications Limited and Subsidiary Companies
CHAIRMAN’S STATEMENT
We are moving fast to be ahead. We aim
We continue to invest in our people – to
our operations and outsourcing as
to lead and to shape the communications
harness their capabilities and talent – to
appropriate
to drive procurement
landscape.
drive innovation and achieve our vision of
synergies and raise productivity.
Strengthening
our capabilities by
innovating
becoming Asia’s leading communications
provider. We are fostering a culture
where our people embrace the “can do”
challenger spirit to do things differently.
Besides executing on in-house ideas, it is
We are strengthening our capabilities in
also imperative that we develop a culture
content and applications and this allows
that readily encourages, supports and
us to beat the competition. Our corporate
absorbs innovations from the external
clients are now able to benefit from cloud
Infocomm Technology and multimedia
computing and managed services. Our
ecosystems.
consumer customers enjoy hyperlocal
information, music
content
and
The global economy is forecast to resume
downloads and high-definition TV. We are
growth
in 2010, with the economies
also bringing iconic sports content like
of Singapore, Australia and the region
the Barclays Premier League and ESPN
expected to improve. But we will continue
Star Sports to our Singapore viewers
to exercise financial discipline to remain
via interactive and engaging media on
nimble and manage costs by investing
multiple platforms.
and
increasing automation across
We continue to invest in our people – to harness their
capabilities and talent – to drive innovation and achieve our
vision of becoming Asia’s leading communications provider.
Showing our support
Even as we change the game and lead
the competition, we recognise our
responsibility to the communities around
us. SingTel, Optus and our regional
associates continue to contribute and
raise funds for charities and victims of
natural disasters, and support social
causes in countries where we operate.
Acknowledging our
supporters
We are committed to the highest
standards of corporate governance in
our dealings with all our stakeholders,
partners and employees. We would
like to thank them for supporting the
Group in all our endeavours in the
past year. I would also like to express
my appreciation to my fellow Board
members, the management and union
for their support.
In particular, I would like to thank Messrs
Heng Swee Keat, John Powell Morschel
and Deepak S Parekh, who will be retiring
from the Board at the conclusion of the
coming Annual General Meeting, for their
invaluable contributions and services as
Board members over the years.
Chumpol NaLamlieng
Chairman
Organisation Structure
SingTel Annual Report 2009/2010
9
GROUP
CHIEF
ExECUTIVE
OFFICER
Audit Committee
Vice President (Audit)
General Counsel/
Company Secretary
Group Chief Information
Officer
Group Chief
Strategy Officer
Group Chief
Technology Officer
Group Director
(Human Resource)
Chief Executive Officer
(International)
• Business Management
• Regional Operations
• Regional Technical
• Strategic Investments
• SingTel Group Innovations
• Regional Finance
• Support Units*
Chief Executive Officer
(SingTel Optus)
• Optus Business
• Optus Consumer
• Optus Small and Medium
Business
• Optus Wholesale and Satellite
• Networks*
• Products and Delivery
• Virgin Mobile Australia
• Support Units*
Chief Executive Officer
(Singapore)
• Business
• Consumer
• NCS
• Networks*
• SingTel Global Offices
• Carrier Services Integrated
Business Unit
• Content & Media Services
• Support Units*
Group Chief Financial Officer
• Finance
• Corporate Affairs
- Group Investor Relations &
Corporate Communications
- Group Tax
- Group Treasury
* These functions dual report to the respective Group Functional Heads.
10
Singapore Telecommunications Limited and Subsidiary Companies
Board of Directors
CHUMPOL NALAMLIENG
GRAHAM JOHN BRADLEY AM*
CHUA SOCK KOONG
SIMON ISRAEL
JOHN POWELL MORSCHEL
KAIKHUSHRU SHIAVAX NARGOLWALA
* Member of the Order of Australia
SingTel Annual Report 2009/2010
11
FANG AI LIAN
HENG SWEE KEAT
DOMINIC CHIU FAI HO
ONG PENG TSIN
DEEPAK S PAREKH
NICKY TAN NG KUANG
12
Singapore Telecommunications Limited and Subsidiary Companies
BOARD OF DIRECTORS
CHUMPOL NALAMLIENG, 63
Non-executive and independent Director
Chairman, SingTel Board
Chairman, Compensation Committee
Member, Corporate Governance and
Nominations Committee
Date of Appointment: Director on 13 Jun 2002
and Chairman on 29 Aug 2003
Last Re-elected: 25 Jul 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 Siam Commercial Bank
Public Co., Ltd. He was a non-executive
Director of British Airways Plc from
November 2005 to July 2009.
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 AM* 61
Non-executive and independent Director
Member, Audit Committee
Member, Optus Advisory Committee
Date of Appointment: 24 Mar 2004
Last Re-elected: 25 Jul 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 and
a Director and President of the Business
Council of Australia. 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.
* Member of the Order of Australia
CHUA SOCK KOONG, 52
Executive and non-independent Director
Member, Optus Advisory Committee
Date of Appointment: Director on 12 Oct 2006
and Group Chief Executive Officer (CEO) on
1 Apr 2007
Last Re-elected: 24 Jul 2009
Ms Chua joined SingTel in June 1989 as
Treasurer and was promoted to Chief
Financial Officer (CFO) in April 1999. She
held the positions of Group CFO and CEO
(International) from February 2006 until
12 October 2006, when she was appointed
Deputy Group CEO. Ms Chua was appointed
Group CEO on 1 April 2007.
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, the Public
Service Commission and the Corporate
Governance Council of the Monetary
Authority of Singapore. 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.
FANG AI LIAN, 60
Non-executive and independent Director
Chairman, Audit Committee
Date of Appointment: 7 Aug 2008
Last Re-elected: 24 Jul 2009
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.
Mrs Fang is a Director of Banyan Tree
Holdings Limited, MediaCorp Pte Ltd,
Metro Holdings Limited and Oversea-
Chinese Banking Corporation Limited.
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 and
International Enterprise
Singapore.
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, 49
Non-executive and independent Director
Member, Corporate Governance and
Nominations Committee
Member, Compensation Committee
Date of Appointment: 4 Jul 2003
Last Re-elected: 27 Jul 2007
Mr Heng is the Managing Director of
the Monetary Authority of Singapore.
He is also Chairman of The Institute of
Banking and Finance.
SingTel Annual Report 2009/2010
13
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, 59
Non-executive and independent Director
Member, Audit Committee
Member, Corporate Governance and
Nominations Committee
Date of Appointment: 28 Nov 2007
Last Re-elected: 25 Jul 2008
Mr Ho is the founder and a partner of
HOPU Investment Management Co., Ltd.
and a Director of Hang Lung Properties
Limited and the Hong Kong Mercantile
Exchange.
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.
SIMON ISRAEL, 57
Non-executive and non-independent Director
Member, Finance, Investment and Risk
Committee
Member, Optus Advisory Committee
Date of Appointment: 4 Jul 2003
Last Re-elected: 27 Jul 2007
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.
Mr Israel was Chairman of 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 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 Israel is a former Director of Britannia
Industries Ltd, Danone Asia Pte Ltd, Danone
Food & Beverages India Pvt Ltd, Fraser and
Neave Limited, 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, 67
Non-executive and independent Director
Member, Compensation Committee
Chairman, Optus Advisory Committee
Date of Appointment: 14 Sep 2001
Last Re-elected: 27 Jul 2007
Mr Morschel
is the non-executive
Chairman of Australia and New
Zealand Banking Group Limited and a
non-executive Director of CapitaLand
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.
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 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.
KAIKHUSHRU SHIAVAx
NARGOLWALA, 60
Non-executive and Lead Independent Director
Member, Audit Committee
Chairman, Corporate Governance and
Nominations Committee
Date of Appointment: Director on 29 Sep 2006
and Lead Independent Director on
13 May 2009
Last Re-elected: 24 Jul 2009
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
14
Singapore Telecommunications Limited and Subsidiary Companies
BOARD OF DIRECTORS
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, 47
Non-executive and independent Director
Member, Finance, Investment and Risk
Committee
Date of Appointment: 1 Jun 2009
Last Re-elected: 24 Jul 2009
Mr Ong is Chairman of InfoComm
Investments Pte Ltd and a Director of
Banean Pte Ltd. He is also a member
of the Board of the National Research
Foundation, a member of the Board of
Trustees of the Singapore University of
Technology and Design and a member
of COMPASS (Community and Parents in
Support of Schools).
Mr Ong was the founder and Chairman
of Encentuate, a company providing
enterprise digital identity systems. IBM
acquired Encentuate in 2008. 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).
NICKY TAN NG KUANG, 51
Non-executive and independent Director
Chairman, Finance, Investment and
Risk Committee
Member, Optus Advisory Committee
Date of Appointment: 12 Mar 2002
Last Re-elected: 25 Jul 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.
DEEPAK S PAREKH, 65
Non-executive and independent Director
Member, Compensation Committee
Date of Appointment: 31 May 2004
Last Re-elected: 27 Jul 2007
Mr Parekh is the Chairman of Housing
Development Finance Corporation Limited
(“HDFC”) in India. He joined HDFC in 1978,
was its Managing Director from 1985 and
Executive Chairman from 1993 until he
assumed his present office in January
2010.
its subsidiaries,
Besides HDFC and
Mr Parekh is on the Boards of several
leading
various
corporations across
sectors. He is the non-executive Chairman
of GlaxoSmithKline Pharmaceuticals
Infrastructure Development
Limited,
Finance Company Limited, Lafarge India
Ltd. and Siemens India Limited. He is also
on the Boards of Castrol India Limited,
Hindustan Unilever Limited, Mahindra &
Mahindra Limited, Indian Hotels Company
Limited and WNS Global Services Pvt.
Ltd. Mr Parekh has also been nominated
by the Civil Aviation Ministry to the Board
of Airports Authority of India. Mr Parekh
was Director of Satyam Computer Services
Limited from 12 January 2009 to 17 July
2009.
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.
Members of the Management Committee
SingTel Annual Report 2009/2010
15
CHUA SOCK KOONG
ALLEN LEW
LIM CHUAN POH
JEANN LOW
NG YOKE WENG
PAUL O’SULLIVAN
AILEEN TAN
16
Singapore Telecommunications Limited and Subsidiary Companies
MEMBERS OF THE MANAGEMENT COMMITTEE
CHUA SOCK KOONG, 52
Group Chief Executive Officer, SingTel
ALLEN LEW, 54
Chief Executive Officer (Singapore), SingTel
LIM CHUAN POH, 55
Chief Executive Officer (International), SingTel
Ms Chua oversees SingTel’s three key
businesses - Singapore, Australia and
International. Prior to this, she was the
Deputy Group CEO from October 2006 to
March 2007.
for
She joined SingTel in June 1989 as
Treasurer.
In April 1999, she was
promoted to Chief Financial Officer
(CFO), responsible
the Group’s
financial functions, including treasury,
tax, insurance, risk management and
capital management. In addition, she
managed a diverse range of portfolios –
from corporate development, company
secretariat and
to corporate
communications and investor relations.
legal
In February 2006, Ms Chua 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 (SMU)
Board of Trustees, the Casino Regulatory
Authority, the Public Service Commission
and the Corporate Governance Council of
the Monetary Authority of Singapore.
She holds a Bachelor of Accountancy
(First Class Honours) from the University
of Singapore and is a Certified Public
Accountant and Chartered Financial
Analyst.
Mr Lew was appointed CEO Singapore in
February 2006 with responsibility for the
performance and operations of SingTel’s
business in Singapore. He began his
career with the SingTel Group in November
1980. He has served in various senior
management positions, including Chief
Operating Officer of Advanced Info Service
Public Company Limited (AIS) – SingTel’s
associate in Thailand, Chief Operating
Officer of Singapore Telecom International
Pte Ltd and Managing Director of Optus
Consumer.
He is the Chairman of the AIS Executive
Committee, Chairman of
the Audit
Committee and Member of the Sentosa
Development Corporation and a member of
the Advisory Council on the Impact of New
Media on Society (AIMS), formed by the
Ministry of Information, Communications
and the Arts (MICA).
In 2007, Mr Lew was named Telecom CEO
of the Year by Telecom Asia in recognition of
his leadership role in SingTel’s reinvigorated
performance in Singapore’s broadband and
mobile market. He also won the Leading
in the Singapore Human
CEO Award
Resources Awards 2009 for his active role
in employee engagement initiatives.
from
Mr Lew holds a Bachelor of Electrical
the University of
Engineering
Western Australia and a Master of Science
(Management) from the Massachusetts
Institute of Technology, USA.
Mr Lim joined SingTel in October 1998. He
was appointed Executive Vice President
(EVP) Strategic Investments in February
2006. In October 2006, Mr Lim 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, including EVP (Consumer
Business) and EVP (Corporate Business)
and 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 managerial
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.
JEANN LOW, 49
Group Chief Financial Officer, SingTel
Ms Low was appointed Group Chief
Financial Officer on 1 September 2008.
She oversees the group’s financial
affairs
including corporate finance,
procurement, taxation, treasury, risk
management and capital management
and
relations and group
communications. Before this appointment,
she had been Chief Financial Officer of
Optus since 2006.
investor
Ms Low joined SingTel in 1998 as the
Group Financial Controller, responsible
SingTel Annual Report 2009/2010
17
PAUL O’SULLIVAN, 49
Chief Executive Officer, SingTel Optus
AILEEN TAN, 43
Group Director Human Resource, SingTel
in 2004. He
for all aspects of
Mr O’Sullivan was appointed Chief
is
Executive of Optus
responsible
the
performance and operations of Optus.
Under his direction, Optus has experienced
five years of rapid growth, increasing
revenues and growing
its mobile
customer base while maintaining a strong
position as Australia’s second largest
telecommunications company.
Mr O’Sullivan also has management
responsibilities across the SingTel Group
and serves on the Board of Commissioners
of Telkomsel. Prior to his current role, Mr
O’Sullivan held management positions
within Optus including Chief Operating
Officer and Managing Director of
Optus Mobile, he has also held various
international management roles at the
Colonial Group and the Royal Dutch Shell
Group.
Mr O’Sullivan is a board member of the
Australian Business and Community
(ABCN), which engages
Network
businesses to positively
impact the
community. In addition, he is one of
the founders of TERRiA, a network
of companies advocating
for more
competition and level playing field in
telecommunications.
He has a B.A. (Mod) Economics, Trinity
College, University of Dublin and is a
graduate of the Harvard Business School’s
Advanced Management Program.
Ms Tan joined SingTel in June 2008 as
Group Director Human Resource. She
oversees the development of human
resource across the SingTel Group,
including wholly-owned subsidiaries NCS
Pte. Ltd. and Optus and is also responsible
for delivering the Group’s corporate social
responsibility commitment.
is to provide sound, well
Her role
responsive and efficient
managed,
organisation-wide
resource
programmes in support of SingTel, its
subsidiaries and associates.
human
Ms Tan has a wealth of experience in
Human Resource with many years of
in various multinational
experience
corporations and
local companies.
Before joining SingTel, she was Group
General Manager Human Resource at
Wearne Brothers Services Group and
was Vice President of Human Resource
at Invensys Process Systems.
Ms Tan graduated with a Bachelor of
Arts majoring in Statistics and Japanese
Studies from the National University
of Singapore. She also holds a Master
in Organisational Behaviour
from
the California School of Professional
Psychology Alliant University.
She is a member of the Home Nursing
Foundation Board and HR Manpower
Skills & Training Council.
for the financial functions of the SingTel
Group. In 2004, she was promoted to
Executive Vice President 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 has been a Council Member
Institute of Certified Public
of the
Accountants in Singapore since April
2010 and is a Director of OpenNet Pte.
Ltd. She graduated from the National
University of Singapore with an Honours
Degree in Accountancy and is a Certified
Public Accountant in Singapore.
NG YOKE WENG, 54
Group Chief Information Officer, SingTel
Mr Ng joined SingTel in 1997 as the
Chief Information Officer. He was re-
designated Group Chief
Information
Officer in 2003 following the integration
of IT operations for SingTel’s Singapore
and Australian (Optus) businesses.
Mr Ng leads and oversees the planning,
development and operations of the IT
infrastructure and information systems
to ensure 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
(First Class Honours)
Engineering
from the University of Canterbury, New
Zealand. He is a Fellow of the Singapore
Computer Society.
18
Singapore Telecommunications Limited and Subsidiary Companies
Key Awards and Accolades
SINGTEL
2009
APRIL
Governance and Transparency Index
• Ranked 1st
Singapore Corporate Awards
• Best Investor Relations (Gold)
JULY
Singapore Human Resources Awards
• Corporate HR Award
• Learning & Human Capital
Development
• Talent Management
• Retention & Succession Planning
• HR Communications
• Leading CEO Award – Allen Lew,
CEO Singapore
Australian Chamber of Commerce
Business Awards
• Commonwealth Bank of Australia
Business Alliance Award – SingTel
Readers’ Digest Trusted Brands Awards
• Platinum (Phone Service) – 6th year
• Gold (Internet Service Provider)
AUGUST
Singapore Compact International
Corporate Social Responsibility
Conference
• CSR Recognition Award
Annual Media, Entertainment and
Telecommunications Awards
• Best International Service Provider
Point of Purchase Advertising
International Awards
• Gold Award (Digital and Interactive
Media category) – SingTel shop
Singapore Retailers Association Awards
• Best Retail Concept of the Year –
SingTel shop
NOVEMBER
Lloyd’s List Asia
• Innovation Award
Corporate Reputation Survey
• Ranked 1st for Mobile Service
Providers
Metro Ethernet Forum
• Service Provider Award – 2nd year
GSMA Asia Mobile Awards
• Best Mobile Music Service – SingTel
Computerworld Singapore Customer
Care Award
• Telecommunications Services –
2nd year
MAY
FinanceAsia - Asia’s Best Companies
• Best Managed Regional Company
(Telecoms)
• Best Managed Company (Singapore)
• Best Corporate Governance
(Singapore)
• Best Corporate Social Responsibility
(Singapore)
JUNE
ALB Southeast Asia Law Awards
• Best IT/Telecommunications In-
House Team of the Year
CommsDay Asia Pacific Awards
• Most Innovative Fixed Network
Operator
Wall Street Journal – Asia’s 200 Most-
Admired Companies
• Ranked 2nd Most-Admired Singapore
Company
SEPTEMBER
Computerworld Singapore Readers
Choice Awards
• Ranked 1st for Data Centre and Hosting
• Best Managed Connectivity Service
Provider – 3rd year
Asiamoney 20th Anniversary Poll of Polls
• Best Overall for Corporate Governance
in Singapore since 2004
AMPedTM
DECEMBER
CCAS International Contact Centre
Awards
• Best Contact Centre of the Year
(Employee Retention Program) – Juzcall
Contact Centre
OCTOBER
IR Magazine Awards
• Best Investor Relations by a CEO –
Chua Sock Koong, SingTel GCEO
• Grand Prix for Best Overall Investor
Relations
• Best Investor Relations Website/
Webcasting
SIAS Investors’ Choice Awards
• Best Corporate Governance
• Board Diversity Award – 2nd year
Network World Asia Readers Choice
Awards
• Best Managed Services
SingTel Annual Report 2009/2010
19
2010
JANUARY
NCS
OPTUS
Singapore 1000, Singapore SME 500 &
Singapore International 100 Awards
• S1000 Turnover Excellence
• S1000 Net Profit Excellence
• Singapore International 100 Top 5
• Top Market – Oceania
FEBRUARY
HardwareMag and HardwareZone.com
Tech Awards, Reader’s Choice category
• Best Mobile Operator (Singapore) –
SingTel Mobile
• Best Internet Service Provider –
SingNet
Frost & Sullivan – Market Leadership
Award
• Data Centre Services – Singapore
MARCH
2009
SEPTEMBER
CCAS International Contact Centre
Awards
• Best Contact Centre of the Year
(Employee Retention Program)
Government Call Centre Excellence
Awards
• Best Governance Contact Centre (Over
30 Full-Time Employees category)
OCTOBER
International Customer Management
Institute Awards
• Global Call Centre of the Year (Small-
to-medium category)
Media Magazine – Top Digital Brands
Report
• Ranked 1st in Singapore
Singapore Ministry of Transport
• Minister’s Innovation Award
DECEMBER
2009
MAY
Consumers’ Telecommunications
Network Awards
• Recognition for Supporting Grassroots
Consumer Consultation
Interactive Advertising Bureau Awards
• Brand Loyalty and Retention Award
JUNE
ACOMMS Award
• Innovation in Content Delivery and
Services through Partnership
Cisco Global Service Provider of the Year
• Optus Business and Alphawest
JULY
Australian Business Award
• Best Value Product – Uecomm
Ethernet VPN
APRIL
Governance and Transparency Index
• Ranked 1st – 2nd year
Seatrade Asia Awards
• Technical Innovation – 2nd time
MIS Asia Magazine
• Strategic 100 (Regional 20) Honouree
Juniper Partner of the Year award for
Australia and New Zealand
• 2009 Juniper Partner of the Year –
2010
JANUARY
Alphawest
AUGUST
2009 Hong Kong ICT Awards
• Certificate of Merit in the Best Public
Service Application
The Franchise Council of Australia
• NSW/ACT Multi-Unit Franchisee of the
Year – ‘yes’ Optus North Sydney
20
Singapore Telecommunications Limited and Subsidiary Companies
KEY AWARDS AND ACCOLADES
OCTOBER
Australian Service Excellence Awards
• Service excellence in a help desk –
Uecomm
Australian Marketing Institute Awards
• Finalist for best sponsorship – Tennis
Australia
Australian Business Arts Foundation
Awards
• Bytecraft Entertainment Commitment
Award
Annual Media, Entertainment and
Telecommunications Awards
• Best Mobile Operator – Optus
NOVEMBER
Australian Direct Marketing Association
• Silver Effectiveness Award for IT
Bronze awards
• Creative Direct Mail Campaign:
Business’ Tape Recorder
• Creative Website/Microsite: Whale
Song
• Creative (Art Direction): Cirque du
Soleil website
• Effectiveness (Telecommunications):
Timeless campaign
Cisco Australia and New Zealand Partner
Awards
• Cisco APAC Service Provider of the Year
– Alphawest
• Unified Communications Partner of the
Year – Alphawest
• Enterprise Partner of the Year –
Alphawest
Frost & Sullivan Australia Best Practices
Awards
• Unified Communications Systems
Integrator of the Year – Alphawest
9th Annual HR Leadership Awards
• Best Talent Management Strategy –
Optus
Australian Human Resources Institute
Awards
• The John Boudreau Award for Human
Capital Management – Optus Upward
Feedback Tool
Australian Business Excellence Awards
• OH&S Management – Optus
DECEMBER
Smart Investor League of Exceptional
Service Survey
• Best Mobile Phone Provider – Virgin
• Effectiveness (Data Driven Direct
Mobile
Marketing): Swoon
• Business & Domestic Products &
Services Effectiveness: ‘yes’ Coach
Australian Interactive Media Industry
Association Survey
• Ranked 1st for overall satisfaction
• Ranked 1st for customer satisfaction
2010
JANUARY
Hitachi Data Systems Partner of the
Year Award
• Hitachi ANZ Partner of the Year –
Alphawest
FEBRUARY
Hewlett Packard ‘Most Outstanding
Information Management Partner of the
Year’ Award
• Hewlett Packard Most Outstanding
Information Management Partner of
the Year 2009 – Alphawest
MARCH
BRW Client Choice Awards
• Finalist for Best IT Services Firm
(Revenue under $500m) – Alphawest
SHAPING OuR MARKETS
ADDING NEW DIMENSIONS
22
Singapore Telecommunications Limited and Subsidiary Companies
Operating and Financial Review
customer
SingTel continued to lead and shape
the market by focusing on innovation,
excellent
experience,
teamwork and strong execution. This
enabled us to achieve customer-focused
breakthroughs, build our multimedia and
solutions businesses and differentiate
ourselves from the competition.
continued
2009/2010, we
In
to
maintain our leadership position in key
businesses. We captured 45.2 per cent of
the mobile market and extended our lead
significantly in Internet Protocol Virtual
Private Network (IP VPN) to 20.41 per
cent of the Asia Pacific market excluding
Japan. NCS also saw its market share
in Singapore in professional IT services
increase to 19.52 per cent.
BuSINESS IN
SINGAPORE
hi! Buddy, the mascot for hi! Club,
Singapore’s 1st nationality-based
community networking service
Enriching mobile
content
Delivering new and innovative mobile
content is a key component of SingTel’s
transformation
into a multimedia
solutions company. In June 2009, we
introduced SingTel AMPedTM, a unique
lifestyle entertainment service. Users
can download music and access
music videos, entertainment news and
pre-album releases, while enjoying
opportunities to meet stars and interact
online with music fans. An outstanding
feature of AMPed is its availability on
the widest range of 3G handsets and
mobile operating platforms, including
the Apple iPhoneTM 3GS and various
Android phones. AMPed won Best Mobile
Music Service at the GSMA’s Asia Mobile
Awards 2009.
1: IDC Topline, Delivering the Business
Benefits of Cloud with IP VPN, May 2010
2: 2008 Ranking, IT professional services
(Gartner, Aug 2009)
guide
planning
During the year, SingTel also introduced
several new mobile services. These
include TrafficLIVE, the first intelligent
combining
traffic
comprehensive traffic information and
analysis with SMS alerts for reliable
trip planning. Meanwhile, hi! Club,
nationality-based
Singapore’s
community networking service, was
introduced to help customers to keep
connected with friends and families easily
and affordably, easing the transition from
home to Singapore.
first
With consumers increasingly accessing
social media
their mobile
through
phones, SingTel unveiled the INQ Chat
3G, our second exclusive INQ phone.
We were also the first in Asia to bring
the Motorola DEXT™, Motorola’s first
Android-powered device with a unique
platform that automatically synchronises
and delivers contacts, posts, feeds,
messages and photos from popular
social networking sites and email to the
home screen.
We celebrated a major milestone
with the Long Term Evolution (LTE)
technology trial showcase by SingTel
and Ericsson. SingTel became the first
in the region to successfully power on air
the 42 Mbps mobile broadband network
at the showcase, supporting multiple
high-bandwidth mobile applications. The
trial demonstrates the LTE technology to
SingTel Annual Report 2009/2010
23
Delivering new and innovative mobile content is a key
component of SingTel’s transformation into a multimedia
solutions company.
have access to world-class sporting
events such as the Formula One, the
Australian Open, Wimbledon, the US
Open Golf Championship and MotoGP
among others.
Winning the rights to the Barclays
Premier League (BPL) 2010-2013 seasons
was a major milestone for mio TV.
help industry players develop products and
services to further excite our customers’
multimedia mobile experience.
Changing the
multimedia game
We continued to shake up the multimedia
market with the launch of SingTel Digital
Media in conjunction with our one-stop,
hyperlocal web and mobile destination,
in May 2009,
Introduced
inSing.com.
inSing.com
includes lifestyle channels,
user reviews and commissioned editorials
with a distinctly Singaporean point-of-view.
SingTel has also changed the game in the
pay TV market by scoring notable content
wins, particularly sports content which
is a key driver for pay TV take-up. Since
November 2009, ESPNEWS, the first 24/7
sports news channel dedicated to Asian
fans, has broadcast on mio TV. Our sports
programming was bolstered when SingTel
secured exclusive rights to a suite of
channels from ESPN STAR Sports starting
July 2010; and our mio TV customers will
ABOVE: Best Retail Concept of the Year –
SingTel shop at Jurong Point
LEFT: SingTel scores a major content win by
securing the iconic BPL for 3 seasons
24
Singapore Telecommunications Limited and Subsidiary Companies
OPERATING AND FINANCIAL REVIEW
LEFT: SingTel’s award-winning AMPed –
a world’s 1st for an operator-offered music
service on the Apple iPhone
BELOW: SingTel signs an MOU with MDA
and Ngee Ann Polytechnic to develop
innovative broadcast media solutions
For the first time, fans in Singapore
will see all 380 matches. SingTel’s BPL
offering will bring football viewing to
new levels as we fulfil fans’ wishes for
interactivity, insightful commentary and
higher quality production. SingTel also
acquired the broadcasting rights to the
2010 FIFA World Cup™ for Singapore
fans and will offer all 64 matches ‘live’ on
mio TV and mobile, with complimentary
viewing on the Internet.
With BPL, mio TV is now home to the
three biggest football competitions in the
world, having earlier secured the rights
to UEFA Champions League and UEFA
Europa League. Football fans can catch
all the football action on a new channel
called ‘mio Stadium’.
This winning strategy drove the growth
of mio TV, which exceeded 200,000
customers in April 2010.
SingTel’s large customer base presents
valuable opportunities for advertising to
be a new growth engine for the company.
Recognising this, we started SingTel
iMedia, a service allowing advertisers
to reach out to our base of 3.1 million
mobile, 515,000 fixed broadband and
505,000 wireless broadband customers.
Innovating to enable
businesses
infrastructure
SingTel continued to offer new and
innovative services to help our business
customers. Examples are IP VPN, data
centre services and cloud computing,
all of which allow customers to avoid
investments and
costly
maintenance. Meanwhile, to boost our data
centre services, we have made a significant
investment with building Kim Chuan
Telecommunications Centre II, a 150,000
square foot next generation Tier 4 Green
Data Centre commissioned for service in
January 2010.
Besides serving our customers, SingTel’s
cloud computing services are helping to
establish Singapore as a regional cloud
computing hub. Partnering the Infocomm
International
Development Authority,
Enterprise (Singapore), leading technology
companies and software developers,
we
Innovation
Exchange (SiX) to give software developers
access to resources like grid computing
and technical consultancy, which cut costs
and time-to-market.
introduced the SingTel
SingTel’s Broadcast
Innovation Centre,
in operation since June 2009, serves
as a powerful digital media exchange
and content distribution hub connecting
companies in Singapore to more than
40 countries via high-speed satellite and
terrestrial fibre networks.
Enabling Singapore to make its mark
in a unique way, SingTel provided a
communications lifeline to the country’s
first women’s Mount Everest team. Using
SingTel’s satellite solutions, the team
sent SMS and email updates, accessed
the Internet and called home.
Boosting international
connectivity
With strong growth in global data traffic
expected, SingTel
is staying ahead
through continued investment in cable
infrastructure and by tapping markets
with high growth potential. In January
2010, we joined a consortium of carriers
to build and operate the new Southeast
Asia Japan Cable system (SJC), a
submarine cable system with the highest
capacity in the world.
SingTel Annual Report 2009/2010
25
Our customers also affirmed our market
leadership by voting SingTel Mobile and
SingNet as the Best Mobile Operator
(Singapore) and Best Internet Service
Provider, respectively, at the inaugural
HardwareMag and HardwareZone.com
Tech Awards 2010, Reader’s Choice
category. Our concept store, SingTel shop
at Jurong Point, won the Gold Award
(Digital and Interactive Media category) at
the Global Point of Purchase Advertising
International (POPAI) Awards and Best
Retail Concept of the Year at the Singapore
Retailers Association Awards 2009.
NCS was among the Top 20 Regional IT
vendors on MIS Asia magazine’s Strategic
100 list, and recorded its significant
milestone win
International
Customer Management Institute’s Global
Call Centre of the Year award in the
small-to-medium category.
the
in
TOP: SiX incubates, brings to market and
regionalises promising ICT companies from
Singapore and the region
LEFT: SingTel’s maritime broadband
solutions help shipping companies boost
business productivity
provide data centre, disaster recovery and
managed services.
Winning recognition of
our success
Our efforts to change the game and stay
clearly ahead earned us a number of
accolades during the year. They reflect not
only the quality but also the breadth and
depth of our products and services.
We won the prestigious 2009 Singapore
Frost & Sullivan Market Leadership Award
in the Data Centre Services Market, and
our leadership in developing innovative
maritime communications garnered the
Innovation Award from Lloyd’s List Asia, a
leading shipping news publication.
Indonesia,
In addition to expected capacity, the
SJC will increase the resiliency and
diversity of our cable infrastructure. To
be operational by 2012, it will initially
connect Singapore,
the
Philippines, Hong Kong and Japan,
catering to strong demand for data,
e-commerce, web applications and
Internet traffic in Asia’s high-growth
countries. The SJC will also connect to
the new Unity cable network, enabling
SingTel to offer superior connectivity
between Asia and the US. SingTel is a
founding member of the Unity cable, a
new ultra high-speed submarine cable
system linking the US to Japan.
SingTel extended its international reach
even further, with a joint venture to
offer superior network connectivity and
IP solutions to companies in the major
cities in India. The joint venture company,
SingTel Global India Private Limited,
provides fully managed solutions to meet
customers’ end-to-end communications
and IT needs.
Strengthening
Information
Technology Services
its
its
to boost
IT
SingTel continued
capabilities and expertise. The year saw
wholly owned subsidiary NCS Pte. Ltd.
successfully complete
integration
with SCS Computer Systems Pte. Ltd.
and emerge as the first in Southeast
Asia to offer a full suite of cloud services
targeted at enterprise customers. NCS
secured a high-profile Google Apps
project with Singapore’s Ministry of
Education that gives over 30,000 teachers
and staff access to a suite of online
communications and collaboration tools.
Other major contract wins during the year
included a four-year contract with the
Inland Revenue Authority of Singapore to
26
Singapore Telecommunications Limited and Subsidiary Companies
OPERATING AND FINANCIAL REVIEW
BuSINESS IN
AuSTRALIA
iPhone 3GS customers are happier
with Optus at a celebration in
Sydney’s Circular Quay
in
Optus made great strides
this
financial year, driving competition and
transforming the playing field in the
Australian communications market by
continuing to grow its customer base,
improve customer experience and
invest in both metropolitan and regional
Australia.
Leading the growth in
mobile
Optus strengthened its mobile market
position in Australia with service revenue
increasing by 11 per cent year-on-year,
outperforming the market to increase
revenue share.
Through leadership in smartphones and
innovative mobile offers, coupled with
significant investment in our mobile
network, Optus continued to lead the
Australian market in mobile offerings.
This successful strategy attracted
709,000 new mobile customers to Optus
during the year, a significant increase
particularly in our postpaid base.
We continued the rollout of our 3G Dual
Band mobile network, with voice coverage
now reaching over 97 per cent of the
Australian population. This investment
positions Optus as the only carrier
capable of challenging the incumbent
telco’s network on both coverage and
speed.
Optus played a pivotal role in disrupting
the Australian market with exclusive
smartphones, market-leading rate plans
and innovative products and services.
into
the appetite
Tapping
for
smartphones and social networking, we
launched an Australian first with new rate
plans offering generous data allowances
for email and web browsing integrated
with voice services and unlimited access
to popular social networking sites.
SingTel Annual Report 2009/2010
27
In the year, we expanded our suite of
innovative mobile content. We became the
first Australian operator to launch a mobile
application store offering both consumer
and business customers access to a
multitude of applications on a wide range
of handsets.
our appointment as the 2010 FIFA
World Cup™ Mobile Broadcaster
in
Australia, our customers will also
enjoy exclusive and free access to live
streaming of matches, video on demand,
scores, news and more during the
2010 FIFA World Cup.
In a creative opportunity with our
sponsorship of Australia’s leading cultural
event, the Sydney Festival, we developed
a custom-made iPhone application and
3G mobile guide. The Optus Festival
Buddy provided event, ticketing and venue
information for all festival goers with 3G
mobile phones.
sport. As
We also played a key role in supporting
official
Australian
the
telecommunications provider
the
Australian Open Tennis Championships
2010, we offered our customers access
to free live streaming of matches and
a wide array of exclusive content. With
for
Advocating for fair
competition in fixed
In 2007, we invested in the expansion of
our own unbundled local loop network
to provide telephony and broadband
services
to Optus customers. By
migrating customers onto our own
network, we have been able to introduce
exciting new offers and as a result,
we now have more than one million
customers accessing services via Optus’
fixed network.
Optus is the official mobile
broadcaster of the 2010 FIFA
World Cup
In the small and medium business
market, Optus scored a first by extending
the successful Total Business Cap plan
to include fixed voice, Internet, mobile
broadband and mobile services.
Recognising
the explosive demand
for mobile broadband, we provided
customers with market
leading
innovation through our business grade
packages designed
fast
speeds and 24x7 technical support to
small and medium businesses As a
result of our market-leading offers,
Optus’ mobile broadband customers
almost doubled to 907,000 by year-end.
to provide
Enhancing customer
experience
by
differentiation
is to deliver
Our vision for Optus
in
the
competitive
Australian market
providing
outstanding customer experience. This
is grounded with significant investment
in infrastructure, information systems
and human resources to maintain a high
level of customer service.
We made improvements to a number
of customer touch-points including the
continued rollout of the newly-designed
Optus ‘yes’ shops. We stepped up our
retail presence and now have 222 Optus
branded stores, up from 123 a year ago.
We continue to invest smartly in IT
systems to provide customers with
improved online capability,
including
online sales and account management.
We also launched the first Optus-
developed application for the Apple
iPhoneTM called My Account, which
lets customers monitor call and data
usage, view and pay bills or recharge
their accounts. This popular application
reached the top ten lists in the Australia
iTunes free applications store in the first
week of launch.
28
Singapore Telecommunications Limited and Subsidiary Companies
OPERATING AND FINANCIAL REVIEW
Optus is a supporter of the Australian
Federal Government’s planned National
Broadband Network (NBN) on certain key
principles. We have been a strong advocate
for the Government’s vision that the NBN
has the potential to positively reshape the
fixed-line telecommunications sector in
Australia and deliver significant benefits to
Australian consumers and businesses.
On 15 September 2009, the Government
announced a landmark decision to reform
the regulatory environment governing the
Australian
telecommunications sector.
The draft legislation closely mirrors Optus’
long-held principles for regulatory reform
built around structural separation, open
access principles, cost-based pricing and
Australian Competition and Consumer
Commission oversight.
As a champion for competition, we continue
to play a significant role in ensuring that
the objectives for greater competition and
a level playing field remain at the forefront
for Government, regulators and key
influencers in the Australian market and
to advocate for substantive implementation
by the government on those principles.
Investing in
infrastructure
We continued to
invest significantly
in our network to support mobile and
data growth and
improve customer
experience. In addition to investments
in transmission and backhaul capacity,
600 new mobile sites were added to
improve coverage, predominantly
in
regional Australia. During the year, we
acquired an additional 10 MHz of paired
spectrum in the 2100 MHz band. This
now doubles Optus’ 2100 MHz paired
spectrum holdings in the eight capital
cities in Australia to support the growth
of mobile broadband and content.
We have also commenced the upgrading
of our Hybrid Fibre Coaxial cable network
to speeds of up to 100 Mbps. This will
enable our cable broadband customers
in Sydney, Melbourne and Brisbane to
enjoy high-speed content and services
later in 2010.
In August 2009, we expanded our satellite
fleet with the successful launch of our
newest state-of-the-art satellite, Optus
D3. This increased the capacity to deliver
ABOVE: Optus’ 1st custom made iPhone
application for Australia’s most attended
cultural event – the Sydney Festival
BOTTOM RIGHT: Optus Country introduces a
television campaign focusing on the needs of
regional Australians
Optus strengthened its mobile market position in Australia
with service revenue increasing by 11 per cent year-on-
year, outperforming the market to increase revenue share.
SingTel Annual Report 2009/2010
29
Optus Business at the 2009 CeBIT
trade show
2009 saw the launch of Optus Country,
a team fully dedicated to servicing the
needs of regional Australians. In line
with this regional focus, we continued
with the country-wide retail expansion
of Optus ‘yes’ shops and ‘yes’ kiosks.
We also initiated a national advertising
campaign recognising investment by our
franchisees in their local communities
and contributed to the investments in
community projects.
digital and high definition television to
customers across Australia and New
Zealand.
Bringing in business
Optus achieved significant new wins
in
the corporate, government and
wholesale sectors.
ANZ awarded the SingTel Group a
five-year A$500 million contract to
provide telecommunications and global
managed network services across 30
countries. The Group will provide the
bank with a single platform for voice,
data and managed services to more
than 34,000 staff. This includes the
deployment of over 20,000 IP telephones
and 40 advanced video conferencing units
across the region. In Australia, Optus has
started the rollout of a new data network
to more than 850 ANZ retail branches,
as well as end-to-end management of
call centre infrastructure.
During the year, we won key contracts
with the Australian Taxation Office and
Brisbane City Council. The Australian
Taxation Office awarded Optus with their
managed network services contract worth
A$187 million over four years, our largest
Federal Government contract to date.
Brisbane City Council awarded Optus a
seven-year network managed services
contract worth A$60 million. The agreement
will see the Council’s telecommunications
network infrastructure migrate to a new,
fully managed IP-based communications
system.
In the wholesale sector, we cemented our
position as the number one wholesaler
for mobile and mobile broadband
services by concluding a four-year A$160
million agreement with Dodo, a service
provider. Australia’s leading supermarket,
Woolworths, also became a mobile
virtual network operator when it signed
a wholesale agreement to use the Optus’
mobile network to offer a prepaid mobile
service to its customers across Australia.
Reaching the regions
Optus aims to bring true choice and
competition
in telecommunications to
rural and regional Australia by continuing
to invest significant capital in our mobile
network and distribution footprint.
30
Singapore Telecommunications Limited and Subsidiary Companies
OPERATING AND FINANCIAL REVIEW
Today, the SingTel Group has major
investments
in India, Indonesia, the
Philippines, Thailand, Pakistan and
Bangladesh. Together with its regional
associates in these countries, SingTel
is Asia’s largest multi-market mobile
operator.
SingTel is a long term strategic investor.
As a strategic investor, we work closely
with our associates to grow the business,
by leveraging our combined scale in
networks, customer reach and extensive
operational experience.
Our associates benefit not only from
the relationship with SingTel. By being
part of a larger group, they are able to
share experiences and insights with
one another. These learnings help our
associates as they navigate challenges
and take advantage of opportunities in
their own markets.
BuSINESS IN
THE REGION
AIS celebrates the 10th anniversary of
the One-2-Call! service
Group initiatives
In 2009/2010, the Group collaborated
on a number of strategic and tactical
marketing projects. A working group
comprising sales and marketing teams
across
the Group engaged device
partners to be the first to market selected
device models or to launch device models
developed exclusively for the Group.
leading
the Group brought
Through the SingTel Innovation Exchange
(SiX),
together
its associates,
technology
partners, such as Microsoft, Redhat and
independent software vendors, to support
the latter in early-ideas incubation and
provide them the opportunity to access
a regional market for their solutions.
This has led to a proliferation of ideas
for enterprise ICT and mobile handset
applications, which the Group expects to
develop further in the next financial year.
Besides collaborating on marketing and
other business initiatives, the governance
As a strategic investor, we work closely with our
associates to grow the business, by leveraging our
combined scale in networks, customer reach and
extensive operational experience.
aspect of the Group’s operations also
received significant attention, driven
by common objectives to raise the cost
competitiveness of our operations and
understand best practices
towards
the capital markets. This led to the
inaugural Regional CFO Forum, where
the CFOs across the Group share best
practices
in corporate governance,
risk management, investor relations,
enterprise performance management,
cost management and treasury.
Riding the growth,
maintaining
competitiveness
Mobile penetration continued to soar in
some of the regional markets. In India
and Indonesia, headline penetration
in terms of number of customers
rose to 50 per cent and 75 per cent of
the population, from 34 per cent and
62 per cent a year ago. Bharti Airtel has
also passed the 100 million customer
mark. Mobile services are reaching
further into the rural populations and
have facilitated growth in social activities
and economic transactions.
In these regional markets, which are
predominantly prepaid markets and where
headline penetration is often inflated as a
result of the multi-SIM phenomenon, the
growth potential often leads to bouts of
severe price competition, fuelled by either
new operators or existing competitors
intending to capture additional market
share. The Group enjoys mostly strong
number 1 or number 2 positions in the
regional markets, and may need to respond
to aggressive tactics from competition from
time to time.
India experienced its worst to date price
competition in 2009/10. Bharti Airtel had
responded by carefully segmenting the
introducing a plethora of
market and
new products and plans to suit different
customers. Bharti Airtel subscribers can
now choose between per-minute tariff or
per-second tariff plans. Under the Freedom
Plan, Bharti Airtel subscribers can make
calls at a uniform per second rate. The
company also launched Airtel Advantage,
allowing subscribers to call each other at
SingTel Annual Report 2009/2010
31
a low fixed per minute rate regardless of
whether the call is local or national long
distance.
the Philippines, Globe
In
launched
IMMORTALCALL+, the first and only
bucket call and text service with no expiry
period to enhance subscriber usage
and retention. In Indonesia, Telkomsel
launched simPATI M X, a new edition
of its popular starter pack. It offers
preloaded credits, a recharge bonus and
other bonuses.
In the above instances, management of the
associates carefully analyse the markets
before they engage the competition with
tariff reduction, clearly recognising the
need to differentiate themselves from
competitors.
Building differentiators
In Indonesia, the competitive landscape
is changing with the rise of data usage
driven mainly by mobile Internet. This is
mainly contributed by the low fixed-line
penetration, slower fixed-line broadband
speed and growing youth population
eager to explore new things such as
social networking. With the rising trend in
mobile Internet usage, Telkomsel has set
itself apart in the mobile broadband area.
Bharti Airtel passes the 100 million
customer mark
32
Singapore Telecommunications Limited and Subsidiary Companies
OPERATING AND FINANCIAL REVIEW
During the year, Telkomsel was chosen
by Apple as its first official partner
in Indonesia for the launch of both
3G and 3GS iPhonesTM. In the mobile
broadband space, it was the first to
launch the
‘Next Generation Flash’
HSPA+ to offer subscribers a superior
web browsing experience and maximum
Internet access speed. Similarly, Pacific
Bangladesh Telecom’s Citycell launched
the first high-speed mobile broadband
service in Bangladesh, Zoom™ Ultra.
In the year, Bharti Airtel introduced
several initiatives for the small and
medium sized enterprises to strengthen
its enterprise grade offerings and
simplify their customers’ experience. For
example, Bharti Airtel debuted VPN in a
Box for SMEs in alliance with Cisco. This
first-of-its-kind product is based on the
infrastructure-as-a-service model.
Innovating to meet
and shape customers
needs
The associates introduced many unique
services during the year, made possible by
technology advancements and innovative
service development.
Often, while
meeting customer needs, operators are
also directly shaping the way customers
consume telecommunication services.
AIS collaborated with Airports of Thailand
Public Company Limited and I Access
to create the Airport Flight Info service,
which enables customers to check flight
information via AIS mobile phones. A flight
information SIM was also launched for air
service and tourism operators.
In the Philippines, Globe introduced its
revolutionary DUO product combining a
mobile and wireless landline service into
one SIM and one handset.
Most notably, our associates were quick
to offer services that allow customers to
engage in social networking and other
new media. Epitomising this is GLOW, the
new youth prepaid brand by Warid, our
associate in Pakistan. This ground-breaking
initiative empowers young people to decide
how, when and with whom they wish to
communicate via voice, SMS or FacebookTM.
Flexible bundles allow for cost-effective
sharing of downloaded music, games and
movies.
Telkomsel was the first in the world to
launch BlackBerry Lifestyle, an affordable
BlackBerry service exclusively for social
networking and chatting, tailored to the
Indonesian market with low entry prices. In
addition, Telkomsel’s innovative new SMS
PRO makes SMS communications even
easier, by offering predefined features such
as SMS auto-reply, SMS divert, SMS copy,
SMS black and white lists.
AIS’ Facebook and Twitter Alerts let
mobile customers receive and post
real-time messages via SMS. Likewise,
Bharti Airtel signed an agreement with
Twitter, allowing over 128 million Airtel
customers to send and receive SMS
Tweets. Targeting the convergent needs
of digitally attuned youth in the Philippines
is the new Globe Tattoo SIM, which can be
used in both a mobile phone and a Globe
Tattoo USB stick.
Higher acclaim,
more recognition
SingTel’s regional associates continued
to receive numerous accolades in 2009.
ABOVE: Telkomsel upgrades to HSPA+
technology 21 Mbps with the Next
Generation Flash Network
LEFT: Globe introduces the Globe Tattoo SIM
SingTel Annual Report 2009/2010
33
LEFT: Warid GLOW’s Pakistan Racer Hunt
2009, the first nationwide motor sport
competition
BELOW: Citycell introduces its first high-
speed mobile broadband service, Zoom Ultra
awards
Industry-specific
included
Telkomsel’s wins in the prepaid and
postpaid categories of both Marketing &
Frontier Consulting Group’s Top Brand
Award and Most Valuable Brand at the
Indonesia Best Brand Award 2009. It
also topped the mobile Internet service
category of the Indonesia Customer
Satisfaction Awards 2009. Bharti Airtel
was named Service Provider of the Year
and Wireless Service Provider of the Year
at the Frost & Sullivan Asia Pacific ICT
Awards.
In the area of customer care, Warid
scored top marks in a report issued
by the Pakistan Telecommunications
Authority, as the telecom operator with
the fewest customer complaints.
The associates also earned recognition
for being well-run companies with
convincing business strategies. Globe
continued to earn praise for its corporate
governance practices, with awards from
the Institute of Corporate Directors as
well as FinanceAsia Magazine.
Similarly, AIS was named Best
Thai Company for Good Corporate
Governance, by Euromoney Asia. AIS
was voted one of the world’s leading
public companies by Forbes magazine,
most innovative Thai company by Wall
Street Journal Asia, and Brand of the Year
2008-2009 by Superbrands.
Bharti Airtel was rated by Forbes Asia
as one of the Fabulous 50 companies in
the Asia Pacific, based on the criteria of
long-term profitability, sales and earnings
growth, projected earnings and stock-
price gains. BusinessWeek also ranked
Bharti Airtel among the world’s six best
performing technology companies.
Telkomsel upgrades to HSPA+
technology 21 Mbps with the Next
Generation Flash Network
34
Singapore Telecommunications Limited and Subsidiary Companies
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
2010
2009
2008
2007
2006
16,871
5,995
10,876
8,949
4,847
2,224
2,623
2,153
2,410
3,907
3,910
3,406
2,148
1,258
1,015
1,923
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
37,952
23,493
6,311
33,255
20,476
6,544
34,714
21,000
7,303
32,659
20,847
5,895
33,618
21,091
5,006
73
37.1
24.1
18.9
17.8
11.0
0.9
23.5
24.55
24.56
147.55
14.2
-
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
-
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.
MANAGEMENT DISCUSSION AND ANALYSIS
GROUP
Operating revenue
Operational EBITDA
Operational EBITDA margin
Share of associates’ pre-tax profit
EBITDA
Exceptional items (2)
Net profit
Basic earnings per share (S cents)
Underlying net profit (3)
Underlying earnings per share (S cents)
SingTel Annual Report 2009/2010
35
Financial Year ended
31 March
2010
(S$ million)
2009
(S$ million)
Change (%)
16,871
4,847
28.7%
2,410
7,257
(2)
3,907
24.6
3,910
24.6
14,934
4,431
29.7%
2,051
6,482
(56)
3,448
21.7
3,455
21.7
13.0
9.4
17.5
11.9
-96.0
13.3
13.3
13.1
13.1
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) The foreign exchange gain from capital reduction of a wholly-owned investment holding company of the Group in the previous financial year had
been reclassified as ‘Exceptional items’.
(3) Underlying net profit refers to net profit before exceptional items.
The Group ended the financial year with double-digit net profit growth of 13 per cent, reflecting strong performance from Singapore,
Australia and significant improvement in Telkomsel’s performance. This was achieved amid a cautious economic climate. The Group
outperformed the markets in Singapore and Australia and met guidance for the financial year.
The Group’s operating revenue grew a strong 13 per cent and operational EBITDA increased 9.4 per cent, benefiting from the 8 per cent
strengthening of the Australian Dollar against the Singapore Dollar from a year ago. If the Australian Dollar had remained stable from
a year earlier, operating revenue would be up 8 per cent and operational EBITDA would have increased 5 per cent.
In Singapore, operating revenue was up 8.1 per cent, driven mainly by Information Technology and Engineering (“IT&E”) revenue which
grew strongly by 32 per cent with full year contribution from SCS Computer Systems Pte. Ltd. (“SCS”) acquired in August 2008 and first-
time revenue from the fibre rollout contract with OpenNet Pte. Ltd. (“OpenNet”). Mobile Communications revenue rose 8.4 per cent on
strong customer growth.
In Australia, Optus delivered a solid 7.5 per cent increase in operating revenue, driven by a strong 13 per cent growth in mobile service
revenue led by strong customer acquisitions and continued wireless broadband growth. Optus’ translated revenue in Singapore Dollars
grew 16 per cent from the previous financial year.
Operational EBITDA for the Group grew 9.4 per cent to S$4.85 billion. However, margin fell 1.0 percentage point to 28.7 per cent,
reflecting higher mobile acquisition and retention costs on strong customer connections, and higher IT&E revenue mix at the Singapore
Business.
36
Singapore Telecommunications Limited and Subsidiary Companies
OPERATING AND FINANCIAL REVIEW
The Group’s share of pre-tax profit of associates was up 18 per cent to S$2.41 billion. Regional currencies were relatively stable from a
year ago. The growth was boosted by a strong turnaround in Telkomsel’s operational performance as well as fair value gains on mark-
to-market valuations of the associates’ foreign currency liabilities compared to significant fair value losses last year.
Consequently, EBITDA grew 12 per cent to S$7.26 billion and would have been higher by 9 per cent if the Australian Dollar and regional
currencies were stable from a year ago.
The Group recorded additional impairment provision of S$260 million on Warid Telecom (Private) Limited and fair value loss of
S$61 million on certain available-for-sale investments, that were partially offset by a realised foreign exchange gain of S$327 million on
a loan repayment by an investment holding company within the Group. These one-off items do not impact the cash flows of the Group.
In the previous financial year, the Group recorded S$49 million as an exceptional tax credit from the reduction in Singapore corporate
tax rate and introduction of other tax measures.
Both the Group’s net profit and underlying net profit grew 13 per cent to S$3.91 billion, or 24.6 cents per share.
The Group diversified its earnings base through its investments in key markets overseas. On a proportionate basis where
the associates are consolidated line-by-line, the operations outside Singapore accounted for 73 per cent of both the Group’s
proportionate revenue and EBITDA.
SINGAPORE BUSINESS
Operating revenue
Data and Internet
Mobile communications
International telephone
National telephone
Sale of equipment
Others
Telco
Information technology and engineering (“IT&E“)
Total
Financial Year ended
31 March
2010
(S$ million)
2009
(S$ million)
Change (%)
1,577
1,567
563
393
268
210
4,578
1,417
5,995
1,535
1,445
624
404
268
200
4,476
1,072
5,547
2.7
8.4
-9.9
-2.6
0.3
5.0
2.3
32.3
8.1
Operational EBITDA (excluding Group’s corporate costs)
2,293
2,162
6.1
Operational EBITDA margin
Singapore Business
Singapore Telco business
IT&E business
38.2%
45.7%
14.3%
39.0%
45.8%
10.2%
Note:
(1) Numbers in above table may not exactly add due to rounding.
SingTel Annual Report 2009/2010
37
The Singapore Business delivered strong operating results despite highly competitive market conditions and the economic slowdown.
It continues to grow its Telco and IT businesses while making further strides in the multimedia segment with the launch of advertising
and lifestyle web portal and innovative multimedia solutions.
Operating revenue was up a strong 8.1 per cent to S$6.0 billion, driven mainly by IT&E revenue which grew significantly by 32 per cent
including full year contribution from SCS and fibre rollout revenue from OpenNet. Revenue from the Singapore Telco business rose 2.3
per cent underpinned by robust mobile performance.
Operational EBITDA expanded 6.1 per cent to S$2.29 billion. Margin, however, fell 0.8 percentage point to 38.2 per cent, reflecting the
higher mix of IT&E revenue which had relatively lower margins.
Data and Internet revenue was up 2.7 per cent to S$1.58 billion on cautious corporate telecom spending. SingTel continued to extend
its lead in Internet Protocol Virtual Private Network (“IP VPN”) in the region. With SingTel’s global network and an innovative suite of
Infocomm Technology (ICT) solutions, Managed Services achieved strong revenue growth of 17 per cent which were partly offset by
decline in legacy data services. Fixed broadband revenue was stable amid a highly competitive market, with a net increase of 10,000
fixed broadband lines to 515,000 as at 31 March 2010.
Revenue from Mobile Communications delivered solid growth of 8.4 per cent to S$1.57 billion on strong customer growth. Total mobile
customer base grew 4.7 per cent to 3.12 million as at 31 March 2010, representing a leading market share of 45.2 per cent.
SingTel continued to lead the market with smartphones on innovative and exciting mobile price plans. It was the first company in
Singapore to launch the Apple iPhone 3GSTM, as well as the Android-powered smartphones, Motorola DEXTTM and Sony Ericsson
XPERIATM X10.
With strong success in its targeted acquisition initiatives, SingTel gained 7.5 per cent or 113,000 postpaid mobile customers in the
year. This brought total postpaid base to 1.62 million as at 31 March 2010, strengthening its postpaid leadership at 46.0 per cent.
Approximately 90 per cent or 1.45 million of these customers were on 3G services, 10 percentage points higher than a year ago. The
growth was spurred by increased penetration of smartphones and data usage. Postpaid average revenue per user (“ARPU”) was stable.
The uplift from higher value smartphone customers was diluted by increased take-up of ‘data only’ price plans.
Demand for mobile broadband services continued to be strong. Mobile data services registered robust growth, constituting 34 per cent
of ARPU, up from 32 per cent a year ago. Total customers on the monthly mobile broadband data subscription plans grew 330,000 in
the year to 505,000 as at 31 March 2010.
During the year, SingTel reduced the validity period of lower denomination prepaid cards to 90 days and deactivated 101,000 inactive
prepaid customers. Excluding this deactivation, prepaid customer base grew 8.7 per cent or 128,000 in the year. With a total prepaid
base of 1.50 million as at 31 March 2010, SingTel maintained its lead in the market with a share of 44.4 per cent. Prepaid ARPU fell
6.0 per cent due to competition in various prepaid segments.
IT&E revenue grew strongly by 32 per cent to S$1.42 billion, bolstered by strong sales from NCS group and fibre rollout revenue from
OpenNet. Fibre rollout revenue, based on progressive completion for the rollout, contributed S$181 million of revenue for the year.
Revenue from NCS group, including the integrated SCS operations, rose 15 per cent, underpinned by higher sales of hardware, systems
and network integration projects. The growth further entrenched NCS’ leadership in Singapore and increased its market share in the
region.
38
Singapore Telecommunications Limited and Subsidiary Companies
OPERATING AND FINANCIAL REVIEW
SingTel is making significant progress in its transformation to become a multimedia service solutions provider. In August 2009,
Football Frenzy, Singapore’s first multimedia social football experience was made available on SingTel’s mio TV, online and
mobile platforms. In September 2009, a significant milestone in mio TV was achieved when SingTel won the broadcast rights to
the Barclays Premier League (BPL) matches for three years commencing August 2010 and a suite of ESPN STAR Sports channels.
SingTel’s BPL ‘early bird’ offers and exciting content bundles continue to attract customers. A record 113,000 customers were
added in the year, with the customer base totalling 191,000 as at 31 March 2010 and exceeding 200,000 by end April 2010. With the
increased demand for bundled plans, total customers on mio bundles1 grew 70,000 in the year to 187,000 as at 31 March 2010.
International Telephone revenue declined 9.9 per cent to S$563 million, reflecting higher mix of “free IDD” mobile traffic, price
competition and increased take-up of corporate call plans.
Revenue from Fixed-line phone services declined 2.6 per cent to S$393 million on lower voice traffic, reflecting continued fixed-
to-mobile substitution. Sale of equipment revenue was stable at S$268 million compared to a year ago.
AUSTRALIA BUSINESS
Operating revenue by division
Mobile
Fixed
Business and wholesale
Consumer and Small-Medium Business (SMB)
Inter-divisional
Operational EBITDA
Operational EBITDA margin
Net profit
Financial Year ended
31 March
2010
(A$ million)
2009
(A$ million)
Change (%)
5,573
2,004
1,384
(11)
8,949
2,153
4,938
1,974
1,421
(12)
8,321
2,067
12.9
1.5
-2.6
-12.1
7.5
4.2
24.1%
24.8%
676
583
15.9
Optus, SingTel’s largest subsidiary and Australia’s number two telecommunications operator, delivered a strong set of results and
market share gains amid a highly competitive market.
Optus posted strong double-digit net profit growth of 16 per cent to A$676 million, on solid revenue growth of 7.5 per cent to A$8.95
billion.
Operational EBITDA was 4.2 per cent higher at A$2.15 billion, with margin at 24.1 per cent, reflecting increased selling costs from its
successful customer acquisition strategy.
1 mio bundles comprise mio Plan (bundling of mobile, fixed broadband and fixed voice services) and mio Home (bundling of pay TV, fixed
broadband and fixed voice services).
SingTel Annual Report 2009/2010
39
Optus Mobile contributed 62 per cent to Optus’ operating revenue and 68 per cent to Optus’ operational EBITDA. Mobile revenue
surged 13 per cent over the year to A$5.57 billion, further strengthening Optus’ position in the Australian market. The increase
in revenue was driven primarily by outgoing service revenue, which rose 13 per cent year-on-year as a result of strong customer
growth. Incoming service revenue was up 12 per cent with interconnect mobile termination rate at 9 cents per minute since June
2007.
Optus added a total of 709,000 mobile customers this year, compared to 652,000 last year, underpinned by strong demand for
wireless broadband and smartphones, as well as the “Timeless” unlimited plans. As at 31 March 2010, the total mobile customer
base was 8.50 million, up 9.1 per cent, with 3.61 million customers being provisioned with 3G services, up 40 per cent from a
year ago. Reflecting its success in penetrating the wireless broadband market, a total of 907,000 customers were provisioned
with High Speed Packet Access (HSPA) broadband service at end of the financial year, up significantly from 486,000 a year ago.
Postpaid customers comprised 49 per cent of total mobile customer base, up 3 percentage points from a year ago.
Blended ARPU grew 3.3 per cent, reflecting the successful acquisition of higher value customers and increased postpaid mix.
Excluding wireless broadband, postpaid ARPU grew 6.4 per cent. With increased penetration of wireless data products, SMS and
other data revenue grew to 36 per cent of service revenue, up from 33 per cent a year ago. Reflecting the focus on driving data
growth, non-SMS data revenue constituted 13 per cent of ARPU, up from 9 per cent in the previous year.
Operational EBITDA margin declined 2 percentage points to 26 per cent, with strong service revenue growth offset by increased
acquisition of higher value customers on smartphone and “Timeless” plans.
Business and Wholesale Fixed accounted for 22 per cent of Optus’ operating revenue and 23 per cent of Optus’ operational
EBITDA. Revenue was A$2.0 billion for the year, up 1.5 per cent from the previous financial year, lifted by higher ICT and Managed
Services and Satellite revenue partially offset by weaker corporate telecom spending and lower wholesale international voice
revenue.
Operational EBITDA increased 3.4 per cent and EBITDA margin was stable at 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 contributed 15 per cent to Optus’ operating revenue and 10 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 6.3 per cent while off-net revenue declined 41 per cent,
resulting in an overall decline in consumer fixed revenue of 2.1 per cent to A$1.21 billion. The proportion of on-net revenue in
consumer fixed was 89 per cent, up from 82 per cent a year ago, contributing to the improved margin.
As at 31 March 2010, Optus had 980,000 broadband customers, 3.1 per cent or 29,000 more than a year ago. Of this, 920,000
broadband customers were on-net, up 8.5 per cent or 72,000 from a year ago.
Operational EBITDA margin expanded 1 percentage point to 15 per cent and operational EBITDA increased 1.8 per cent, reflecting
higher on-net revenue mix and yield management initiatives.
40
Singapore Telecommunications Limited and Subsidiary Companies
OPERATING AND FINANCIAL REVIEW
ASSOCIATES
Share of pre-tax profit (2)
Regional mobile associates
Bharti
Telkomsel
Globe
AIS
Warid Telecom
Pacific Bangladesh Telecom
Other associates
Share of post-tax profit (2)
Regional mobile associates
Bharti
Telkomsel
Globe
AIS
Warid Telecom
Pacific Bangladesh Telecom
Other associates
Financial Year ended
31 March
2010
(S$ million)
2009
(S$ million)
Change (%)
978
940
235
215
(63)
(13)
2,291
119
2,410
848
682
165
148
(63)
(13)
1,766
109
1,875
871
705
266
255
(116)
(23)
1,958
93
2,051
808
517
172
179
(115)
(23)
1,538
78
1,616
12.2
33.3
-11.7
-15.6
-45.4
-43.7
17.0
27.9
17.5
4.9
31.8
-4.3
-17.3
-45.5
-43.5
14.8
39.2
16.0
Notes:
(1) Numbers in above table may not exactly add due to rounding.
(2) Exclude exceptional items recognised directly at Group.
The Group’s share of pre-tax and post-tax profits from the associates grew 18 per cent and 16 per cent respectively. The growth
was boosted by higher contribution from Telkomsel and fair value gains on mark-to-market valuations of foreign currency
denominated liabilities of the associates compared to fair value losses a year ago.
The regional mobile associates continued their strong momentum in customer acquisitions. Bharti, India’s leading mobile phone
operator, posted robust growth of 36 per cent to a total of 128 million mobile customers as at 31 March 2010. Bharti’s global
footprint will further expand upon successful closing of the planned acquisition of Zain Group’s African mobile operations in 15
countries with a total customer base of over 42 million. Telkomsel, the mobile phone leader in Indonesia, registered 14 per cent
increase in its customer base to 82 million. The Group’s combined mobile customer base reached 293 million, an increase of 17
per cent or 43 million added in the year.
SingTel Annual Report 2009/2010
41
Bharti contributed 45 per cent to the Group’s share of associates’ post-tax profit, 5 percentage points lower than a year ago.
Operating revenue grew 7 per cent on strong customer growth partly offset by ARPU dilution from tariff pressures amid intense
competition in India as new operators launched aggressive offers to attract customers. Bharti recorded fair value gains on mark-
to-market valuation of its US Dollar and Japanese Yen denominated borrowings on a stronger Indian Rupee, which helped boost
its overall profit. The Group’s share of Bharti’s pre-tax profit grew 12 per cent, while post-tax profit increased 4.9 per cent to
S$848 million after including a one-off tax credit in the previous financial year. Bharti continued to lead the Indian mobile market
with a subscriber share of 21.8 per cent as at 31 March 2010.
Telkomsel accounted for 36 per cent of the Group’s share of total post-tax profit from associates, up from 32 per cent last year.
Operating revenue recorded a strong rebound, driven by growth in customer base and minutes of use amid a more stable albeit
competitive environment. Telkomsel also recorded fair value gains on mark-to-market valuation of its vendor liabilities as the
Indonesian Rupiah appreciated against the US Dollar and the Euro. The Group’s share of post-tax profit from Telkomsel grew
a strong 32 per cent to S$682 million. Telkomsel is the market leader with approximately 46.2 per cent subscriber share at 31
March 2010.
Globe, the second largest mobile phone operator in the Philippines, recorded lower operational performance partly offset by
fair value gains on its US Dollar liabilities with a stronger Philippine Peso. Operating revenue declined on lower customer base,
with keen competition and growing multi-SIM usage. The Group’s share of pre-tax profit from Globe declined 12 per cent while
post-tax profit fell 4.3 per cent to S$165 million due to lower tax charges from a reduction in its corporate tax rate with effect
from January 2009.
The Group’s share of post-tax profit from AIS, the leading mobile phone operator in Thailand, fell 17 per cent to S$148 million
amid a weak economy and political instability. The decline in operating revenue was partly offset by cost control measures. As at
31 March 2010, AIS maintained its lead in the Thailand mobile market with 44.4 per cent subscriber share.
Warid, a key challenger in Pakistan, recorded lower losses on improved operating results and lower fair value losses. Operating
revenue increased while operating expenses declined on cost management measures. The Group’s share of Warid’s net loss
amounted to S$63 million, down from S$115 million in the previous financial year.
The Group received gross dividends totalling S$954 million from its associates, 11 per cent lower from the previous financial year,
mainly due to lower dividends from Telkomsel as a result of its weaker 2008 performance.
42
Singapore Telecommunications Limited and Subsidiary Companies
OPERATING AND FINANCIAL REVIEW
GROUP CASH FLOW
Net cash inflow from operating activities
Net cash outflow for investing activities
Net cash outflow for financing activities
Net change in cash and cash equivalents
Exchange effects on cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
Free cash flow
Singapore Business
Australia Business
Associates (net dividends after withholding tax)
Financial Year ended
31 March
2010
(S$ million)
2009
(S$ million)
Change (%)
5,329
(2,179)
(2,634)
515
23
1,076
1,614
1,290
1,258
858
3,406
5,163
(2,391)
(3,018)
(245)
(51)
1,372
1,076
1,231
1,050
963
3,245
3.2
-8.8
-12.7
nm
nm
-21.6
50.0
4.8
19.8
-10.9
5.0
Cash capital expenditure as a percentage of operating revenue
11%
13%
Operating Activities
The Group’s net cash inflow from operating activities for the year grew 3.2 per cent or S$166 million to S$5.33 billion, with steady
operating cash flows from Singapore and Australia boosted by a stronger Australian Dollar. This was partly offset by lower net
dividends from the associates which fell 11 per cent to S$858 million.
Investing Activities
The investing cash outflow was S$2.18 billion, a decline of 8.8 per cent or S$212 million. In the previous financial year, payments
totalling S$459 million were made for additional capital injections in associates and acquisition of SCS. Capital expenditure
totalled S$1.92 billion, mainly incurred in expansion and enhancement of mobile networks to support customer and data growth,
and investments in submarine cable capacity, satellites and core networks. It represented 11 per cent of the Group’s operating
revenue, down from 13 per cent a year ago.
Financing Activities
Net cash outflow of S$2.63 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 2009, and S$987 million for interim dividends in respect of the current
financial year. The Group repaid net borrowings of S$204 million during the year.
Free Cash Flow
The Group generated strong free cash flow of S$3.41 billion for the year, up 5.0 per cent from the previous financial year. The
Singapore Business contributed 38 per cent or S$1.29 billion to the Group’s free cash flow. The Australia Business reported free
cash flow of A$1.02 billion, the strongest performance in five years. In Singapore Dollar terms, it contributed 37 per cent to the
Group’s free cash flow, up from 32 per cent last year, benefiting also from the stronger Australian Dollar. With lower dividends
receipts, the associates’ contribution to the Group’s free cash flow declined from 30 per cent last year to 25 per cent.
SingTel Annual Report 2009/2010
43
CAPITAL MANAGEMENT
The Group is committed to an optimal capital structure and constantly reviews its capital structure to balance capital efficiency
and financial flexibility.
Gross debt increased due to translation impact of a stronger Australian dollar on Optus debt and increased hedging liability from
mark-to-market adjustments. Net debt gearing ratio fell to 21.2 per cent as at 31 March 2010 from 24.2 per cent a year ago.
The average maturity of the Group’s borrowings as at year end was 4.7 years. Group net debt was 0.9 times Group EBITDA, while
Group EBITDA was 23.5 times net interest expense.
The Group has one of the strongest credit ratings among telecommunications companies in Asia and is committed to maintaining
our investment grade credit ratings. SingTel is currently rated A+ by Standard & Poor’s and Aa2 by Moody’s Investors Service.
Group Debt (S$ million)
Group Debt Metrics
8,675
7,303
7,620
6,544
7,924
6,311
4.5
25.8
4.5
24.2
4.7
21.2
MAR 08
MAR 09
MAR 10
MAR 08
MAR 09
MAR 10
Gross Debt
Net Debt (1)
Average Maturity of Borrowings (Years)
Net Debt Gearing Ratio (2) (%)
Group
Net debt to EBITDA (number of times)
Interest cover (3) (number of times)
Financial Year ended 31 March
2010
0.9
23.5
2009
1.0
19.9
2008
1.0
20.7
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) EBITDA to net interest expense (i.e. interest expense less interest income)
44
Singapore Telecommunications Limited and Subsidiary Companies
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. Senior Management Awards
under the Performance Share Plan are vested only upon achievement of i) Total Shareholders’ Return targets and ii) Return on
Invested Capital targets (awards prior to 2010) or Economic Profit targets (2010 award).
More details are set out under ‘Corporate Governance Report – Remuneration’ on pages 69 to 74.
The Group’s underlying earnings per share rose 13 per cent from a year ago, driven by strong performance across the Group.
Return on Invested Capital (1) (%)
Underlying Earnings per Share (S cents)
18.9
18.9
17.2
23.15
21.71
24.56
FY07/08
FY08/09
FY09/10
FY07/08
FY08/09
FY09/10
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 2010, the Board has recommended a final ordinary dividend of 8.0 cents a share.
Together with the interim ordinary dividend of 6.2 cents a share, total distribution for the year will amount to 14.2 cents a share, up
14 per cent from the previous year.
This brings our total shareholder payout to approximately S$24 billion in the last ten years, or 74 per cent of earnings over the same
period.
Shareholder Payout (S$ billion)
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
2.3
1.5
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Capital reduction
Special dividend
Ordinary dividend
SingTel Annual Report 2009/2010
45
SHARE PRICE PERFORMANCE
SingTel’s share price rose 25 per cent on the SGX and 4 per cent on the ASX between April 2009 and March 2010.1
SingTel Share Price Performance – 1 April 2009 to 31 March 2010
70.0%
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
-10.0%
1 Apr 09 May 09
Jun 09
Jul 09
Aug 09
Sep 09
Oct 09
Nov 09
Dec 09
Jan 10
Feb 10 Mar 10
SingTel – SGX, 25%
SingTel – ASX, 4%
MSCI Asia Pacific Telecommunications Index, 19%
Straits Times Index, 70%
1: The Australia dollar appreciated approximately 21% against the Singapore dollar during this period
Source: Bloomberg
46
Singapore Telecommunications Limited and Subsidiary Companies
OPERATING AND FINANCIAL REVIEW
RISK FACTORS
The SingTel Group’s financial performance and operations
in Singapore, Australia and its international operations and
investments are influenced by a vast range of risk factors.
Many of these risk 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
would be beyond the control of the Board and Management.
However the identification and management of risk reduces the
uncertainty associated with the execution of the SingTel Group’s
business strategies. Management is responsible and regularly
reports to the Board on appropriate risk assessment and the
implementation of risk management strategy, policies and
processes necessary to facilitate the achievement of the SingTel
Group’s business plans and goals. The section below sets out
descriptions of the principal risk types.
ECONOMIC RISKS
Changes in domestic, regional and global economic conditions
may have a material adverse effect on the demand for
telecommunications, IT and related services and hence, on the
financial performance and operations of the SingTel Group and
its associates. 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
and business demand for telecommunications, IT and related
services.
POLITICAL RISKS
Some of the countries in which the SingTel Group operates 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 in those countries, as well as the ownership, control
and condition of the SingTel Group’s assets in those areas.
For example, the development and the implementation of the
high-speed national broadband network projects in Singapore
and Australia (currently at the proposal stage) will change the
fixed-line competitive landscape in the countries. The recently
announced revision by the Media Development Authority of
Singapore of the Media Market Conduct Code to include a
Public Interest Obligation to enable mandatory cross carriage
of exclusive content in the Pay TV market is another example of
ongoing regulatory change that will impact future operations.
The SingTel Group’s overseas investments are subject to the
risk of imposition of laws and regulations restricting the level,
percentage and manner of foreign ownership and investment, as
well as the risk of nationalisation, any of which could materially
and adversely affect the SingTel Group’s overseas investments.
The businesses of the SingTel Group and its associates depend
upon statutory licences issued by governmental authorities.
Failure to meet regulatory requirements could result in fines or
other sanctions including, ultimately, revocation of the licences.
The SingTel Group may need to access additional spectrum to
support both generic growth and the development of new services.
Access to spectrum is of critical importance to the SingTel Group
in order to support its business of providing mobile voice and
broadband services. The use of spectrum in most countries
the SingTel Group operates in is regulated by governmental
authorities and requires licences. Failure to acquire access to
spectrum or failure to acquire new or additional spectrum on
favourable terms could have a material adverse effect on the
SingTel Group’s business, financial performance and growth
plans.
The SingTel Group is exposed to the risk of regulatory or litigation
action by regulators or private parties. Such regulatory matters
or litigation actions may have a material effect on the SingTel
Group’s financial condition and results of operations. Examples of
such actions which the SingTel Group is exposed to are disclosed
in notes to the financial statements under the ‘Contingent
Liabilities’.
REGULATORY RISKS AND LITIGATION RISKS
COMPETITIVE RISKS
investments
international operations and
The SingTel Group’s operations in Singapore, Australia and
(including
its
associates) are subject to extensive government regulations,
which may impact or limit flexibility to respond to market
conditions, competition, new technologies or changes in cost
structures. Governments may alter their policies relating to the
telecommunications, IT and related industries and the regulatory
environment (including taxation) in which the SingTel Group and
its associates operate. Such changes could have a material
adverse effect on the SingTel Group’s financial performance and
operations.
The Group faces competitive risks in Singapore, Australia and
other markets in which it operates.
in Singapore
telecommunications market
The
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.
SingTel Annual Report 2009/2010
47
In the Australia mobile market, a number of participants are
subsidiaries of international groups and 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. With the deployment of the Australian National
Broadband Network, competition is expected to increase as new
entrants enter the market.
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 declined in recent years as a result of capacity
additions and general price competition.
The growth of our regional mobile associates depends in part on
increases in mobile penetration rate in the markets they operate
in. Some of these overseas markets have and may experience
an increase in the number of competitors, any of which could
lead to price competition in these markets and potential loss
of market share for our regional mobile associates. As these
markets mature, the pace of subscriber growth may slow and
new customers may not be as profitable as existing customers.
The disintermediation in the telecommunications industry by
handset providers and non-traditional telecommunications
services providers obtaining access to, and establishing a
relationship with customers by providing multimedia content
and services directly on demand also challenges the business
models and profits of vertically-integrated providers like the
SingTel Group.
REGIONAL ExPANSION RISKS
A key element of the SingTel Group’s business strategy involves
the expansion of its operations in the Asia-Pacific region. Given
the limited size of the Singapore market, the future growth of the
SingTel Group depends, to a large extent, on its ability to grow its
existing operations in Australia and the Asia-Pacific region. There
are considerable risks associated with regional expansion.
The success of our strategic 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.
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.
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 and
regulatory policies, political considerations and the specific
preferences of sellers.
In addition, the business strategy of some of our regional mobile
associates involves the expansion of operations outside their
home countries. These associates may enter into joint ventures
and other arrangements with other parties. Such joint ventures
and other arrangements involve risks, including but not limited
to the possibility that the joint venture or investment partner
may have economic or business interests or goals that are not
consistent with those of the interests of the associates. There
can be no assurance that the regional mobile associates can
fully generate synergies and successfully achieve their aims of
regional competitiveness and building a competitive regional
footprint.
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.
The projects undertaken by the Group as sub-contractors to
roll out infrastructure are subject to the risk of an increase in
project build costs, the risk of disputes and the risk of unexpected
implementation delays, any or all of which could result in an
inability to meet projected roll out completion dates. For the
Group’s satellite business, the launch of any satellite is subject
to the risk of launch delays, cost overruns, and the occurrence of
other unforeseeable events, including but not limited to, satellite
launch failure and satellite failure to enter into designated orbital
locations, or any other event which is beyond the control of the
Group. The Group’s network and systems infrastructure projects
are also subject to risks associated with the sale of capacity on
the completed project infrastructure, including risks of default,
disputes, litigation and arbitration involving contractors, suppliers,
customers and other third parties involved in construction or
operation of network infrastructure projects.
48
Singapore Telecommunications Limited and Subsidiary Companies
OPERATING AND FINANCIAL REVIEW
The SingTel Group is also a major IT services provider to
government and large enterprises in the region. There could
be potential project execution risks when projects are not
accurately scoped, resulting in over-commitments to customers
and inadequate resource allocation and scheduling. These could
lead to cost overruns and project delays and losses.
NEW BUSINESS RISKS
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.
The SingTel Group is evolving from its traditional carriage
business in Singapore and Australia to venture into new growth
engines to create new revenue streams, including mobile
applications and services, pay TV, managed services, content and
Infocomm Technology. There is no assurance that the SingTel
Group will be successful in these new ventures which may
require new expertise, substantial process or systems changes,
and organisational cultural and mindset changes.
The Group has established risk management policies, guidelines
and control procedures to manage its 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 170 in Note 37 to
the Financial Statements.
INFRASTRUCTURE AND TECHNOLOGY RISKS
BREACH OF PRIVACY RISKS
The telecommunications industry is capital intensive in nature
and 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.
The SingTel Group has invested substantial capital and other
resources in the development and modernisation of its network
and systems. Technological changes continue to expand the
capacities and functions of new infrastructure capable of
delivering competing products and services. As a result, the
SingTel Group may be required to incur significant additional
capital expenditure in order to maintain the latest technological
standards and remain competitive against these newer products
and services. These changes may require the SingTel Group to
replace and upgrade its network infrastructure. 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.
Further, the SingTel Group faces the risk of unforeseen
complications in the deployment of new technologies. Any newly
adopted technology may not perform as expected, and the
SingTel Group may not be able to successfully develop the new
technology to effectively and economically deliver services based
on such technology.
The SingTel Group seeks to protect the privacy of voice and
information transmissions over its networks. The SingTel Group
employs security mechanisms including the use of firewalls and
the GSM encryption algorithm, designed to minimize the risk of
privacy breaches. Significant failure of encryption and security
measures may result in consumer confidence being undermined
and materially impact our businesses.
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.
ENGAGING THE COMMuNITY
DEvELOPING OuR TALENT
50
Singapore Telecommunications Limited and Subsidiary Companies
Corporate Social Responsibility
SingTel approaches corporate social
responsibility (CSR) in the same way it
does business, with the intent to excel
at its undertakings and with effective
collaboration across the Group. As a
signatory of the United Nations Global
Compact, we are committed to upholding
ten principles covering human rights,
labour standards, environment and anti-
corruption. SingTel is also a committee
member of the Singapore Compact, a
society which furthers the CSR movement
in Singapore.
We aim to be a good corporate citizen,
not just in Singapore and Australia but
also in our regional markets. In both
Australia and Singapore, there are CSR
Working Groups driving and reporting
on CSR programmes. A regional CSR
Working Group, comprising members
from the CSR teams of our regional
associates, meets regularly to share best
practices and collaborate on projects.
FinanceAsia recognised SingTel for Best
Corporate Social Responsibility
in
Singapore in 2009, and recently, the State
of CSR in Australia: 2009 Annual Review
listed Optus as a top performer in CSR
management capabilities.
Giving back to the
community
Our business revolves around connecting
people. Likewise, our efforts in helping
communities involve connecting people
with opportunities. We seek to invest
heavily in providing opportunities for the
next generation.
is education.
important avenue
Educating the next generation
One
Under the SingTel Group’s regional
scholarship
recipients
programme,
pursue undergraduate studies in a variety
of disciplines at selected top universities
in Asia Pacific. In collaboration with
AIS,
inaugural SingTel Group
Undergraduate Scholarships were
the
awarded
Thammasat University, Thailand.
three recipients
to
from
AIS and the Population and Community
Development built a community centre for
pre-school children
In Thailand, AIS aims to reduce the
burden of parents with young children
by constructing and delivering pre-
school learning centres to the district
administrative organisations to care for
and educate the children. In addition, AIS
has produced a TV programme ‘Strong
Heart, Great Man’ to inspire the young to
help their family members and become
role models
from
providing bursaries to students at various
educational
levels, AIS also renders
financial assistance to their families.
in society. Apart
Besides working with government schools
to improve education for underprivileged
children, Bharti Airtel establishes pre-
primary and primary schools to provide
free education for underprivileged children
in rural India, with special focus on girls. To
date, there are 236 such schools serving
29,000 children and offering employment
opportunities to rural youth as teachers
and women as mid-day meal providers.
As part of regional collaboration efforts,
the Globe-SingTel Reading project was
launched in November 2009. Over 1,300
books were collected from SingTel staff
and shipped to the Philippines, where
Globe helped to distribute the books and
in
implement reading programmes
15 schools. The project encourages
underprivileged students, aged 7-10, in
rural areas, to develop a love for reading
in English. The ability to understand,
read and speak good English has the
potential to open up life opportunities
for them. Apart from the books, each
student also received a school bag filled
with school supplies.
Optus also supports 50 children in
their
Cavite,
Philippines, with
through World
development needs
Vision. In 2009, Optus engaged Globe
to equip the children’s school with
computers and Internet access. Globe
has connected more than 2,000 public
high schools in the Philippines since
2001. During the year in review, it started
the Global Filipino Teachers programme
to help public high school teachers
integrate Infocomm Technology into the
curriculum.
Indonesia, Telkomsel
similarly provides educational computer
software to schools and trains teachers
on its use for computer-based learning.
In
SingTel Annual Report 2009/2010
51
programme began in 2002, ensuring that
every dollar raised goes towards the work
of the charities.
In 2009/10, the STLF supported five
beneficiaries: APSN Tanglin School,
AWWA Early Years Centre, MINDS Lee
Kong Chian Gardens School, Singapore
Cancer Society and Students Care
Service.
These charities supported mainly children
and youths with programmes such as
training and special education to meet
the needs of those who are intellectually
or physically challenged; school social
work and counselling programmes that
help youths from families facing problems
or those with learning difficulties. In the
case of the Singapore Cancer Society,
the fund contributed S$200,000 to launch
the Singapore Cancer Society Help the
Children and Youth programme. This
initiative seeks to meet the needs of
children and youths with cancer or whose
parents are suffering from cancer. The
donation was made at the inaugural
SingTel-Singapore Cancer Society Race
Against Cancer in August 2009.
dollar. The charities represent a wide
range of sectors and assistance areas,
including youth, health, depression,
overseas aid and development, welfare,
animal protection and land conservation.
Supporting health initiatives
To improve understanding and prevention
of dengue fever, Telkomsel partnered
the Indonesian Ministry of Health to
launch a programme in 14 pilot regions.
In Australia, over A$1.2 million has been
donated to 13 charity partners since the
launch of the Optus Answering the Call
workplace giving programme in 2005.
Optus matches employees’ donations
made through this programme dollar for
ABOVE: Optus brings wireless Internet
access to young people in hospitals across
Australia
BELOW: Children from AWWA Early Years
Centre performing the elephant dance at the
STLF cheque presentation ceremony
Helping youth in need
Besides opening the doors to education,
the Group helps youths
in various
ways. In Australia, for example, Optus’
partnership with Kids Helpline provides
support and advice to young people
in need. Kids Helpline answered over
telephone, web and email
300,000
contacts in 2009 alone.
Through Optus’ partnership with the
Starlight Children’s Foundation and the
Livewire Hospital programme, we make
it possible for seriously ill, chronically
ill and disabled young people to stay
connected during long hospital stays.
Livewire offers a free, safe and supportive
online social network where these young
patients can express themselves and
find support from other youths in similar
circumstances. By end 2010, we will
have connected 26 hospitals in Australia,
reaching more young people in need.
Since 2008, Optus has also made
over 54 grants through its Connecting
Communities programme, providing
life and training skills for disengaged
youth,
grassroots
organisations in Australia with access to
communications.
helping
and
help
reduce
Indonesia,
In
to
unemployment and encourage young
people to start their own businesses,
Telkomsel
and
Entrepreneurship Training Programme.
Trainees learn how to identify and repair
the faulty parts of mobile phones.
runs
Skill
a
Contributing to charity
The Group contributes generously to a
number of charitable causes.
With support also from our business
partners, employees and members of
the public, the SingTel Touching Lives
Fund (STLF) raised a total of S$2.2
million during the year. Besides its
corporate contribution to the
fund,
SingTel fully underwrote the fund-raising
costs for the programme. This practice
has been in place since our philanthropy
52
Singapore Telecommunications Limited and Subsidiary Companies
mentoring programmes
disadvantaged schools.
that support
Providing prompt disaster relief
SingTel supported Globe’s relief efforts
to help victims of Typhoon Ketsana in the
Philippines. The donations were used to
buy relief packs that included food and
water. These were distributed to affected
families,
in far-flung
areas.
including those
Optus and our staff also promptly
responded
to overseas disasters by
contributing A$58,000 to the Philippines
flood appeal and over A$60,000 to victims
of the Haiti earthquake. Bharti Airtel
responded to the Kashmir earthquake
by delivering over 2,000 food packets and
water bottles to the affected area, and
donating money, clothing and blankets to
the victims. During the floods in Mumbai,
the
employees worked
diligently to restore the network within a
short time.
company’s
Following two major earthquakes
in
Indonesia in September 2009, Telkomsel
quickly sent teams to provide food and
water, clothing, public kitchens, medical
help, starter-packs, free phone calls and
monetary donations. It also restored the
telecommunications network quickly,
increasing capacity to cope with the surge
in traffic during this time.
Telkomsel has also
instituted a
programme to increase the preparedness
of people living in four flood-prone areas
Indonesia. The community-based
in
programme involves training people in
their emergency response skills and
providing them with equipment such as
floats, life jackets and rescue ropes.
Protecting the
environment
AIS, Bharti Airtel, Globe, Optus, SingTel
and Telkomsel supported Earth Hour
2010 and helped create awareness
among employees as well as customers
of the
importance of environmental
conservation. The lights at our landmark
buildings in Singapore and Australia
were switched off from 8.30pm to 9.30pm
on 27 March, sending the message that
we are concerned and care about climate
change. In conjunction with this, we ran
an environmental awareness campaign
encouraging customers and employees
to do their part for the environment.
This was done through SMS, email, bill
inserts and contests.
Earth Hour is a small part of the Group’s
environmental efforts. Throughout the
year, we adopt various measures to help
the environment and constantly seek
new ways to do so.
SingTel and Globe
donated funds for
relief packs to victims
of Typhoon Ketsana
CORPORATE SOCIAL RESPONSIBILITY
Using the community-based approach,
some 600 volunteers provided outreach
and counselling. Telkomsel has also
implemented a programme to help
schools create a healthier and more
sanitary environment.
In Bangladesh, our associate, Pacific
Bangladesh Telecom Limited provided
support and sponsored 14 beds at the
Malnutrition ward of the Dhaka Shishu
Hospital for a period of 12 months.
In Pakistan, Warid supported the National
Polio Immunisation Drive during October
2009. To increase awareness of the three-
day nationwide effort to visit homes and
immunise children against polio, Warid
broadcast an SMS notifying its subscribers
and provided a helpline number for those
whom the immunisation teams had not
reached.
Volunteering to help
others
Going forward, we are placing a greater
emphasis on staff volunteerism.
In
the past year, SingTel employees have
partnered the Metropolitan YMCA to
clean and refurbish the homes of the
low-income elderly and to distribute food
to needy families on a regular basis. Our
volunteers also help out at the recreation
club at Northlight School, where some
students come from challenging home
environments.
As part of our support of the Singapore
Cancer Society, our employees have also
been helping to sort out home testing
kits. These kits are among the free cancer
services offered by the society.
In Australia, over 20 per cent of Optus
employees contributed more than 18,000
in paid community volunteer
hours
leave to assist a range of community
organisations during the year. Some 250
staff volunteers were also involved in the
Australian Business Community Network
SingTel Annual Report 2009/2010
53
LEFT: Teeing off to raise funds for our STLF
beneficiaries
BELOW: SingTel’s 1st Plant-a-Tree day
including
customers
together
and partners
supported a range of environmental
programmes,
supporting
Australia’s endangered wildlife and
protecting natural habitats for future
generations to enjoy. Meanwhile, some
450 employees in Singapore participated
in our inaugural Plant-A-Tree day on
3 July 2009, planting 200 trees in the
Singapore nature reserves.
conserve
SingTel deploys an Environmental
Management System to protect the
environment,
resources
and
reduce waste, and minimise
environmental impacts and risks during
instance, radiation
construction. For
emissions from base stations are kept
safely within internationally recognised
standards. To minimise their visual
impact, the location and style of mounts,
feeders and antennas are considered
carefully before construction. And only
environmentally friendly Value Regulated
Lead Acid batteries are used in our
telephone exchanges.
Cutting our carbon footprint
We are transparent about our carbon
emissions and participate in the Carbon
Disclosure Project.
Our new data centre in Singapore, the
Kim Chuan Telecommunications Centre
2, was constructed to meet the Building
and Construction 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 addition, we are actively exploring
environmentally friendly energy solutions
and processes. For example, we
installed
the new Grid-Tied Solar
Photovoltaic System at our Pasir Ris
Exchange in 2009. Through the 195
photovoltaic panels on the roof, this
system collects enough energy to power
up 182 PCs for ten hours or half the lights
each day at the exchange. It was installed
not only to save energy but to help lower
our network’s carbon footprint through
the use of clean energy.
In India, Bharti Airtel is in its first year of
measuring its carbon footprint. Among
its carbon-cutting measures is the Green
Shelter concept for base transceiver
stations. The optimal cooling, power and
thermal management system minimises
greenhouse emissions from the stations.
AIS is also studying the use of clean energy.
Its Wind Turbine Generator Base Station
in Chonburi is the first site in Thailand to
be powered by wind energy. The system is
designed not only to supply electricity for
the base station but also to reallocate the
generated electricity to the state’s power
grid for the benefit of the community.
in
energies
Similarly, Globe has begun implementing
applicable
renewable
infrastructure such as cell sites. To date,
Globe has 32 cell sites running on solar
energy and three with wind power in the
Philippines.
Our corporate offices
in Australia
and Singapore recycle all paper. The
MobileMuster programme also encourages
staff in Australia to recycle their unwanted
phones. Optus employees, franchisees,
54
Singapore Telecommunications Limited and Subsidiary Companies
Our People
Ensuring talent
sustainability
The SingTel Group aims to be a high-
performing organisation so that our
people will continuously stay connected
and experience growth with
the
company.
Reaching a Common Goal
Our people are the key to achieving the
Group’s vision of being Asia’s leading
communications group. Our values
provide a common platform to bridge
diverse
cultures and generations,
environments and experiences. These
five core values – Customer Focus,
Challenger Spirit, Teamwork, Integrity
and Personal Excellence – fundamentally
shape how our 23,000 employees across
Singapore, Australia and the globe, work
on a daily basis.
Our steadfast commitment to talent
management and development, as well
as our unrelenting focus on improving
employee engagement, helps us build
and maintain a world-class workforce.
We continuously listen to our employees,
gathering insights into the drivers of
employee engagement, attraction and
retention across our workforce.
Testament to the success of our people
programmes are the various national HR
awards won by the Group in both Singapore
and Australia. SingTel participated in the
Singapore Human Resources Awards
(SHRA) in 2009 and won five SHRA awards:
the Corporate HR Award and Leading HR
Practices awards for Learning & Human
Capital Development; Talent Management,
Retention & Succession Planning and
HR Communications. In addition, CEO
Singapore Allen Lew was conferred the
Leading CEO Award for his championship
and endorsement of effective and innovative
HR practices.
Optus won recognition at the Australian
Human Resource Institute awards, winning
the John Boudreau Award for Human
Capital Management which recognises
outstanding
management
people
initiatives and strategies. Optus also won
the Sage MicrOpay Award for Best Talent
Management Strategy at the HR Leader
Awards 2009.
Attracting Talent
The Group welcomes talent at various levels
of experience. We work with domestic and
international tertiary institutions to identify
top graduate talent through career fairs,
networking events and referrals. Strategic
internships,
cadetships, Management
Associate programmes and scholarships
also provide opportunities to discover and
engage promising talent from around the
world. In 2009, we launched the SingTel
Group Undergraduate
Scholarship
programme in Thailand, and will provide
scholars a double internship at SingTel
and our Thai associate, AIS.
Developing Talent
Our investment in talent development
is ongoing and multi-faceted. We offer
a three-pronged approach to learning,
namely education, experience and
relationship-based opportunities.
New employees are welcomed with a
highly interactive integration programme
that includes orientation sessions and
online toolkits as well as being assigned
a buddy and a guide. As they grow with
the company, they are encouraged to
take charge of their careers and discuss
development plans with their managers.
Online career development portals,
toolkits, talks and workshops provide
staff with the resources to evaluate and
manage their careers. The Singapore
Learning Fiestas and Australia Career
Expos continue to be well received
across the various employee segments,
and serve as a model for employee
development among SingTel’s regional
associates.
SingTel-Singapore Cancer Society 2009 Race
Against Cancer
SingTel Annual Report 2009/2010
55
Grooming Leaders
Recognising the importance of people
to the Group’s long-term success, our
People plan is integrated into our business
planning process and we benchmark
our leaders’ performance against people
development goals. People managers
who demonstrate exemplary people
management practices are recognised
with annual awards in Australia and
Singapore.
leadership skills
Our People Managers programme
includes education programmes targeted
at different levels of management. We
to equip people managers
continue
to
with effective
foster empowerment, cross-functional
collaboration and build high-performing
teams. In 2009, SingTel also launched a
flagship programme, “Game for Global
Growth – Winning the Future”, designed
to further develop promising leadership
talent across
the SingTel Group of
companies, including the associates.
Our management team plays an active
role in grooming the next generation
of leaders and we continue to refresh,
monitor and invest in the pool of high
and emerging potential talent to ensure
a robust
talent pipeline.
Interventions based on experience,
education and relationships – such as
education sponsorships, job rotations and
leadership
mentoring – are customised to individuals
to accelerate their development.
Driving and Rewarding Performance
We drive a high performance ethic
by ensuring
that every employee
understands where the organisation is
heading and how they can contribute to
achieving our corporate goals. We reward
and recognise
team
performance and how our people act
as role models for 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.
individual and
We provide competitive rewards that
demonstrate our pay-for-performance
value proposition and integrated work-
life
Performance-based
benefits.
to motivate
incentives are offered
our people and encourage continued
excellence. Breakthrough performance
is acknowledged through awards such
‘yes’, SingTel
as the Optus Reward
Excellence Awards and NCS Making IT
Happen awards.
As a special gesture of appreciation for
employees’ hard work over a challenging
year, as well as the support provided by
family and friends, SingTel/NCS sponsored
three special nights at Universal Studios
Singapore at the end of the financial year.
Globe reaches out to
schools by providing
Internet access
Employees’ well being is important to Optus
increasingly
The Group’s
diverse
business reach and global presence
enable us to offer unmatched career
growth and development opportunities.
We encourage
job rotation across
functions, businesses, market segments
talent
or geographies. To support
development across the Group, we have
implemented our regional exchange
programme since 2007. We also sponsor
our top talent for master’s degrees at
leading world-class universities.
In July 2009, SingTel was certified as
an Approved Training Organisation by
the Singapore Workforce Development
Agency to design, deliver and assess
programmes in the Workforce Skills
Qualifications (WSQ) system, a national
credentials system for lifelong learning.
SingTel became an early adopter of the
Leadership & People Management WSQ
framework where in-house programmes
were designed and developed for our
people managers.
56
Singapore Telecommunications Limited and Subsidiary Companies
OUR PEOPLE
Universal Studios Singapore opened
exclusively for three evenings for SingTel/
NCS staff and family members to enjoy
This was the first-ever staff event at the
new attraction, when the theme park
was opened exclusively for SingTel and
NCS staff, family members and friends.
Providing a Healthy Work Environment
We are committed to providing a safe and
healthy work environment conducive
to employee wellness and work-life
harmony.
external
verification
In 2009, Optus was awarded the SAI
Global Business Excellence Systems
Award for its Occupational Health &
Safety (OHS) management systems,
providing
to
the business, community and key
stakeholders that our health, safety
and well being programs are operating
at best practice. Optus was awarded
Accreditation from the Office Federal
Safety Commission for all building
and construction works in September
2009. SingTel’s flu pandemic plans and
programmes were smoothly executed
when
the H1N1
outbreak.
required during
We encourage people to take control
of their health. Health clubs and
gymnasiums are available at SingTel,
NCS and Optus premises, while healthier
food is offered in all staff cafeterias. Our
annual Health Expos at Optus host a range
of talks, health screenings and programmes
for health management. During the year, the
Expos took place in all capital cities across
Australia with 21 per cent of staff attending
and 76 per cent stating they would make
a change to their health and well being
status. SingTel and NCS offer free health
screenings to all staff, as well as disease
management programes. Presentations
and programmes around various health
and wellness themes are conducted at
SingTel and NCS on a regular basis to
create greater awareness and encourage
staff to lead healthy lifestyles.
We organise
various sporting and
recreational activities catering to diverse
interests, including fitness classes and
mass participation in national sporting
events. The year saw about 4,000 SingTel
and NCS staff members, including senior
management, take part in events such as
Fitness at Work, where a fitness instructor
conducted 25 weekly workout sessions
at SingTel’s Comcentre, as well as other
competitive and non-competitive sport and
fun activities.
The Group offers family-friendly policies
schedules,
such
as flexible work
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 and NCS took part
in a national online pledge in 2009 to
treasure employees’ mental health and
well being, signifying our commitment to
a workplace that supports both physical
and mental health and wellness, and
to actively promote healthy living. Both
SingTel and NCS fulfil all ten of the
recommended practices from
iCARE
Mental Health Alliance.
Over the year, SingTel, NCS and Optus
collaborated
the Group
to develop
Health, Safety and Environment policy
and framework. While this framework
is at the developmental stage, synergies
across the Group have been reviewed to
determine alignment and learnings.
Collective Agreements
Our strong collaborative partnership
with the Union of Telecoms Employees
of Singapore (UTES) facilitates our win-
win approach to labour management
relations. Our collective agreements
with UTES cover more than 4,000
bargainable employees at SingTel and
NCS combined.
Within Optus, about 6,800 staff members
are covered by
the Employment
Partnership Agreement (EPA). The EPA,
a feature of the Optus culture since 1994,
is a collective agreement made directly
between Optus and employees, and
reflects our philosophy of dealing directly
with our people. The EPA was renewed in
late 2009 for a further three years.
Leading in the
marketplace
SingTel aims to lead the market also in
terms of the way we conduct business.
As part of our CSR efforts, we comply
with all legal requirements wherever we
operate, going the extra mile to adopt
policies that safeguard the interests of
our customers, shareholders, business
partners and employees.
Upholding high standards
In Singapore and Australia, we have
instituted internal rules and policies
to run our operations with honesty and
integrity. Clear policies and standards are
stipulated in the staff manual to guide our
people in carrying out their daily tasks.
The Group has zero tolerance for fraud
and our whistleblower policy provides
open channels for employees to report any
improper conduct.
Our procurement manual sets out the
Ethics Policy on Procurement Practices,
and our procurement policy aims to award
tenders fairly, on the basis of merit.
In order
to protect minors against
undesirable Internet content that could
be accessed via mobile phones, SingTel
adheres to the Voluntary Code for Self-
regulation of Mobile Content in Singapore.
The code, which was jointly developed by
SingTel and other local mobile operators,
identifies inappropriate content.
the Group meets all
In Australia,
of
its obligations under the Privacy
Act and Privacy Provisions of the
Telecommunications Act, as well as the
Spam Act. We also abide by the Do Not
Call Register, which protects consumers
from unsolicited marketing calls.
SingTel Annual Report 2009/2010
57
seeks
regularly
Optus
a better
understanding of consumers’ needs
through the Consumer Liaison Forum,
at an annual stakeholder meeting. Optus
has also removed barriers to access to
our products and services by customers,
potential customers and staff,
in
accordance with the Disability Action
Plan that was developed in consultation
with
disability
organisations.
representatives
of
strong
transparency
ethics,
Our
and responsiveness to
industry and
regulatory requirements have earned
us numerous awards. We were ranked
number one for the second year in a row
in the Governance & Transparency Index
introduced by the Business Times and
the National University of Singapore’s
Corporate Governance and Financial
Reporting Centre.
Optus works with Globe to make technology
more accessible for schools in the
Philippines
58
Singapore Telecommunications Limited and Subsidiary Companies
Corporate Governance
INTRODUCTION
Good corporate governance ensures key stakeholders 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 policies and processes.
As SingTel shares are listed on both the Singapore Stock
Exchange (“SGX”) and Australian Stock Exchange (“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:
• SingTel’s Securities Transactions Policy (see page 68) was
enhanced as follows:
- Directors are to consult with the Company Secretary/Group
CEO before trading in SingTel shares.
- Directors are to refrain from trading in shares of SingTel’s
listed associates when in possession of material price
sensitive information relating to such associates.
- Directors are to refrain from trading in shares of SingTel’s
competitors if that might create a conflict of interest.
• SingTel’s policy on multiple directorships was enhanced by
introducing the following:
- In support of their candidature for directorship or re-election,
Directors should provide the Corporate Governance and
Nominations Committee with details of other commitments
and an indication of the time involved.
- Non-executive Directors should consult the Chairman or
chairman of the Corporate Governance and Nominations
Committee before accepting any new appointments as
directors.
• The SingTel corporate website was revamped in 2009 to provide
extensive information on SingTel’s corporate governance
policies and practices. These include the Audit Committee
charter, summary terms of reference for the Compensation
Committee, and summaries of SingTel’s Employees’ Code of
Conduct, Market Disclosure Policy, Risk Management Policy
and Securities Transactions Policy.
At the Annual General Meeting held on 24 July 2009, the Board
proposed and the shareholders approved the following changes
to provide shareholders with enhanced protection against
dilution of their shareholding interest:
• Reduction of the limit for non-pro rata share issues from
10 per cent of the total number of issued shares in the capital
of SingTel to 5 per cent of the total number of issued shares
in the capital of SingTel.
• Introduction of an annual limit of 1 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.
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. SingTel complies with the 2005
Code save that, in respect of Board appraisal, 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. SingTel also complies with the Revised ASX Code.
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 excellence in corporate
governance. More details are included in the ‘Key Awards and
Accolades’ section on pages 18 to 20.
SingTel Annual Report 2009/2010
59
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.
Directors’ Attendance at Board Meetings during the Financial Year Ended 31 March 2010
Name of Director
Chumpol NaLamlieng
Graham John Bradley AM#
Chua Sock Koong
Fang Ai Lian
Heng Swee Keat
Dominic Chiu Fai Ho
Simon Israel
John Powell Morschel
Kaikhushru Shiavax Nargolwala
Ong Peng Tsin (1)
Deepak S Parekh
Nicky Tan Ng Kuang
# Member of the Order of Australia
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
7
7
7
7
7
7
6
7
7
7
7
7
6
7
7
7
7
7
6
4
7
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
2
3
3
2
1
3
3
3
* Refers to meetings held/attended while each Director was in office
(1) Mr Ong Peng Tsin was appointed to the Board on 1 June 2009.
60
Singapore Telecommunications Limited and Subsidiary Companies
CORPORATE GOVERNANCE
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 investment or
has an interest in investing. On such occasions, the Board may
meet with local business leaders and government officials, so
as to help the Board gain greater insight into such countries.
The Board also meets SingTel’s partners in those countries to
develop stronger relationships with such partners. In addition to
at least seven scheduled meetings each year, the Board meets
as and when warranted by particular circumstances. Ten Board
meetings were held in the financial year ended 31 March 2010.
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 2010 is set out on page 59.
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,
key business risks, 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.
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 potential
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 AM, 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. SingTel
also requires independence from the major shareholder in order
to consider a Director independent although the 2005 Code does
not specify this. The Chairman and all other members of the
Board, except those identified above as being non-independent,
are considered to be independent Directors.
the
the Directors,
In assessing
the
independence of
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.
In particular, while Mr Graham John Bradley AM is the Chairman
of Stockland Corporation Limited (“Stockland”), which is listed
on the ASX, and Optus pays to the Stockland group rents under
commercial leases which exceed S$200,000, Mr Bradley has
been assessed as independent as the leases were negotiated
at arms’ length on commercial terms. The Board considers
that this relationship did not influence Mr Bradley’s ability
and willingness to operate independently, and he has shown
independence and objectivity in the broader performance of his
obligations as Director.
The profile of each Director and other relevant information are
set out under ‘Board of Directors’ from pages 12 to 14.
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
SingTel Annual Report 2009/2010
61
is responsible for implementing the Group’s strategies and
policies, and for conducting the Group’s business. The Chairman
and GCEO are not related.
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 serves 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.
When an existing Director chooses to retire or is 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
takes factors such as attendance, preparedness, 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. In order to
ensure Board renewal, the Board has in place a guideline on the
tenure of the Chairman and Directors.
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 Board 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. The guideline has been enhanced
so that (1) in support of their candidature for directorship or
re-election, Directors are to provide the Corporate Governance
and Nominations Committee with details of other commitments
and an indication of the time involved and (2) non-executive
Directors should consult the Chairman or chairman of the
Corporate Governance and Nominations Committee before
accepting any new appointments as directors.
A Director must retire from office at the third Annual General
Meeting (“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.
62
Singapore Telecommunications Limited and Subsidiary Companies
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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 economic/business
environment in relevant markets. The Directors may also attend
other appropriate courses, conferences and seminars.
Each year, the Corporate Governance and Nominations
Committee undertakes a process to assess the 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.
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 Chairman, the Lead Independent Director
conducted an appraisal by the non-executive Directors and
gave the feedback to the Chairman. 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:
Finance, Investment and Risk Committee
•
• Audit Committee
• Compensation Committee
• Corporate Governance and Nominations Committee
• Optus Advisory Committee.
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 2010 is set out on page 63.
Finance, Investment and Risk Committee
The Finance, Investment and Risk Committee (“FIRC”)
comprises three Directors, the majority of whom, including the
chairman, are independent Directors. Membership of the Audit
Committee and the FIRC is mutually exclusive.
SingTel Annual Report 2009/2010
63
The main responsibilities of the FIRC are to consider and
approve strategic and portfolio investments and 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 approves consultancy
fees, capital expenditure and write-off of irrecoverable debts in
accordance with the Board’s policies and directives. In addition,
the FIRC 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.
The FIRC also oversees any on-market share repurchases
pursuant to SingTel’s share purchase mandate.
Directors’ Board Committee Memberships and Attendance at Board Committee Meetings during the Financial Year Ended
31 March 2010
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
4
4
4
4
4
4
4
4
4
4
7
7
7
6
7
7
7
5
6
7
5
5
5
2
5
5
5
5
4
2
5
3
3
3
3
3
3
3
3
3
3
3
5
5
1
4
5
5
5
1
4
5
Name of Director
Chumpol NaLamlieng
Graham John Bradley AM
Chua Sock Koong (1)
Fang Ai Lian
Heng Swee Keat
Dominic Chiu Fai Ho (2)
Simon Israel
John Powell Morschel (3)
Kaikhushru Shiavax Nargolwala
Ong Peng Tsin (4)
Deepak S Parekh
Nicky Tan Ng Kuang
* Refers to meetings held/attended while each Director was in office
(1) Ms Chua Sock Koong 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.
(2) Mr Dominic Chiu Fai Ho ceased to be a member of the Compensation Committee, and was appointed to the Corporate Governance and
Nominations Committee, on 13 May 2009.
(3) Mr John Powell Morschel ceased to be a member of the Finance, Investment and Risk Committee on 1 June 2009.
(4) Mr Ong Peng Tsin was appointed to the Board and the Finance, Investment and Risk Committee on 1 June 2009.
64
Singapore Telecommunications Limited and Subsidiary Companies
CORPORATE GOVERNANCE
Audit Committee
The Audit Committee comprises at least three Directors, all of
whom shall be non-executive Directors and the majority of whom,
including the chairman, shall 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 current Audit Committee members
are all independent Directors.
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.
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 Audit Committee reports to the Board on the results of the
audits undertaken by the internal and external auditors, the
adequacy of disclosure of information, and the 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 effectiveness 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’s and SingTel Internal Audit’s assessment of fraud
risk and held discussions with the external auditors, and was
satisfied that adequate measures were put in place to mitigate
fraud risk exposure in the Group. The Audit Committee also
reviewed and was satisfied with the adequacy of the whistle-
blower arrangements instituted by the Group through which staff
may, in confidence, raise concerns about possible improprieties
in matters of financial reporting or other matters. All whistle-
blower reports were reviewed by the Audit Committee at
its quarterly meetings to ensure thorough investigation and
adequate follow up.
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 remuneration for employees
of all grades, and to administer and review any performance
share plan or other long-term incentive schemes of SingTel.
for
is responsible
The Compensation Committee
the
appointment and promotion of Senior Management (except for
the Group CEO, CEOs and Group CFO) and Top Management
who are direct reports to the Group CEO. The Compensation
Committee proposes the remuneration package for the Group
CEO, CEOs and Group CFO for the Board’s approval. It is also
responsible for approving the remuneration of the other Senior
Management. 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 Annual Report 2009/2010
65
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, 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
SingTel recognises the importance of providing 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 drivers/indicators and major issues that are relevant
to SingTel’s performance, position and prospects.
For the financial year ended 31 March 2010, 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 which are
under SingTel’s management control. In line with the SGX Listing
Rules, the Board provides a negative assurance statement to
shareholders in respect of the interim financial statements,
which is supported by a negative assurance statement from the
Group CEO and Group CFO.
Internal Audit
SingTel Internal Audit comprises a team of 52 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
successfully completed its external Quality Assurance Review
in 2006 and continues to meet or exceed the IIA Standards in all
key aspects.
in
SingTel Internal Audit adopts a risk-based approach
formulating the annual audit plan which aligns its activities to
the key risks across the Group’s business. 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 engages closely with Management in its internal consulting
and control advisory role to promote effective risk management,
internal control and governance practices in the development of
new products/services, systems and processes. 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 best practices.
To ensure that the internal audits are performed effectively,
SingTel Internal Audit recruits and employs suitably qualified
professional staff with the requisite skillsets and experience.
SingTel Internal Audit provides training and development
opportunities for its staff to ensure their technical knowledge
and skillsets remain current and relevant.
66
Singapore Telecommunications Limited and Subsidiary Companies
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 material adverse
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 accountability. In short, we seek
to promote a risk-conscious 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, mitigating and management 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.
Based on the above principles, the Group undertakes
identification, monitoring,
a continuous process of risk
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.
The Board has approved a Group Risk Framework for the
identification of key risks within the business. This Framework
defines 28 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 practices benchmarks for assessing the soundness of its
financial reporting, and the efficiency and effectiveness of its
risk management, internal control and compliance systems.
SingTel Annual Report 2009/2010
67
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.
SingTel Internal Audit 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,
regulations and best practices, 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
is committed to maintaining high standards of
SingTel
disclosure and corporate transparency. We adopt an open
and non-discriminatory approach in our communication with
shareholders, the investment community and the media. We
aim to provide relevant, consistent and timely information -
regarding the Group’s performance, progress and prospects - to
assist shareholders and investors in their investment decisions.
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, guidance on the outlook for each
business is provided at the start of each financial year, and,
reflecting market conditions, is affirmed or updated every
quarter at the same time as the announcement of the quarterly
results.
The Investor Relations’ website contains a wealth of investor-
related information on SingTel which serves as an important
resource for investors. It is a one-stop source of investor
presentations, stock exchange announcements, annual reports,
the investor calendar, AGM and dividend information. The
website also houses significant financial information. In relation
to SingTel’s quarterly earnings announcements, one can access
comprehensive materials from the website, including webcasts
of earnings presentations, presentation slides, transcripts
of conference calls and 5-year financial summaries. 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.
68
Singapore Telecommunications Limited and Subsidiary Companies
CORPORATE GOVERNANCE
SingTel believes in the importance of regular interaction with
investors and shareholders. Senior Management actively
participates in one-on-one meetings, roadshows, conferences
and investor events organised by the Investor Relations
Department. In the financial year ended 31 March 2010,
SingTel met with approximately 720 investors in over 280
meetings held in various cities and countries around the world.
Furthermore, more than 300 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, together
with the meeting agenda and related information a month
ahead, providing ample time for it to be received and reviewed
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.
Our proactive efforts have been acknowledged at the Singapore
Corporate Awards and recognised by leading financial journals
and organisations such as IR Magazine, Business Times,
Finance Asia and Thomson Reuters during the year.
Securities Transactions
SingTel’s Securities Transactions 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 full financial year, and ending
on the date of the announcement of the relevant results. The
policy also discourages trading on short-term considerations
and reminds Directors and officers of their obligations under
insider trading laws. Directors are to consult with the Company
Secretary/Group CEO before trading in SingTel shares to ensure
compliance with securities laws. The Board is kept informed
when a Director trades in SingTel securities. A summary
of SingTel’s Securities Transactions Policy is available in
the Corporate Governance section of the SingTel corporate
website.
In relation to shares of other companies, Directors are to refrain
from trading in shares of SingTel’s listed associates when in
possession of material price sensitive information relating to
such associates. Directors are also to refrain from having any
direct or indirect financial interest in SingTel’s competitors that
might or might appear to create a conflict of interest or affect
the decisions Directors make on behalf of SingTel.
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.
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 customers and employees,
conflicts of interest and corporate opportunities. The code is
SingTel Annual Report 2009/2010
69
posted on SingTel’s internal website and a summarised version
is accessible from the SingTel corporate 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.
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. There are no
retirement benefit schemes or share-based compensation
schemes in place for non-executive Directors. The framework
for determining non-executive Directors’ fees was as follows:
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 and
periodic communication to all staff as part of the Group’s efforts
to promote awareness of fraud control.
REMUNERATION
The broad principles that guide the Compensation Committee in
its administration of fees, benefits, remuneration and incentives
for the Board of Directors and Senior Management are set out
below.
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 2010 comprised a basic retainer fee, additional fees
Basic Retainer Fee
Board chairman
Director
S$180,000 per annum
S$ 90,000 per annum
Fee for Appointment to Audit
Committee
Committee chairman
Committee member
Fee for Appointment to Any Other
Board Committee
Committee chairman
Committee member
Attendance Fee per Ad Hoc
Board Meeting
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$50,000 per annum
S$35,000 per annum
S$35,000 per annum
S$25,000 per annum
S$2,000
S$3,000
The proposed framework for Directors’ fees for the financial
year ending 31 March 2011 is the same as that for the financial
year ended 31 March 2010 except that it is proposed that
the Chairman’s basic fee be increased to $220,000 and the
Director’s basic fee be increased to $110,000 so that the fees
payable are more in line with comparable benchmarks. As
SingTel has diverse and complex operations and investments
internationally and is not just a Singapore-based company, the
fees are benchmarked against fees paid by other comparable
companies in Singapore and Australia.
70
Singapore Telecommunications Limited and Subsidiary Companies
CORPORATE GOVERNANCE
Directors’ Remuneration for the Financial Year Ended 31 March 2010
Name of Director
Chumpol NaLamlieng
Graham John Bradley AM
Chua Sock Koong (5)
Fang Ai Lian
Heng Swee Keat (7)
Dominic Chiu Fai Ho
Simon Israel (8)
John Powell Morschel
Kaikhushru Shiavax Nargolwala
Ong Peng Tsin (9)
Deepak S Parekh
Nicky Tan Ng Kuang
Fixed
Component (1)
(S$)
-
-
1,365,000
-
-
-
-
-
-
-
-
-
variable
Component (2)
(S$)
-
-
2,700,000
-
-
-
-
-
-
-
-
-
Provident
Fund (3)
(S$)
-
-
8,038
-
-
-
-
-
-
-
-
-
Benefits (4)
(S$)
-
-
72,704 -
-
-
-
-
-
-
-
-
-
Directors’
Fees (6)
(S$)
271,156
186,000
152,000
150,000
186,000
176,000
194,167
193,844
107,833
145,000
186,000
Total
(S$)
271,156
186,000
4,145,742
152,000
150,000
186,000
176,000
194,167
193,844
107,833
145,000
186,000
Notes:
(1) Fixed Component refers to base salary and Annual Wage Supplement earned for the year ended 31 March 2010.
(2) Variable Component refers to cash bonuses awarded for performance for the year ended 31 March 2010.
(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, flexible benefits and other non-cash benefits
such as medical cover and club membership.
(5) In addition to the total remuneration above, long-term incentives in the form of performance share awards under the SingTel Performance
Share Plan was granted to Ms Chua on 3 June 2010 for performance for the year ended 31 March 2010. She received the General Award
(“GA”) and the Senior Management Award (“SMA”) based on fair values of S$1.651 and S$1.837 per share respectively. The fair values
of performance share awards granted to her are S$1,542,857 for GA and S$1,157,143 for SMA. The vesting criteria for the performance
share awards are detailed on pages 72-73.
(6) Directors’ Fees are paid on a half-yearly basis in arrears.
(7) Fees for public sector Director are payable to government agencies.
(8) Fees are payable to Mr Simon Israel’s employer.
(9) Appointed to the Board on 1 June 2009.
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 2010.
SingTel Annual Report 2009/2010
71
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 to enable the Company 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.
In order to align Directors’ interests with that of shareholders,
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,
is necessary to sustain SingTel as a leading
which
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.
In line with market practice, SingTel may, under special
circumstances, compensate Senior Management for their past
contributions when their services are no longer needed; for
example, due to redundancies arising from reorganisation or
restructuring of the Group.
remuneration structure
Remuneration Components
for Senior Management
The
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 also depends 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.
• 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.
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.
• 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
at the commencement of each financial year to ensure that
the objectives contribute to the overall strategic, financial
and operational goals of the Group.
72
Singapore Telecommunications Limited and Subsidiary Companies
CORPORATE GOVERNANCE
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 proposes
the payouts for the Group CEO, CEOs and Group CFO for
the Board’s approval. The Compensation Committee also
approves the variable bonus payouts for the other Senior
Management. 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.
• 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
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.
• Long-Term Incentives
Long-term incentives are provisionally allocated or granted
to Senior Management for performance for the year ended
31 March 2010.
For
long-term
incentives granted under the SingTel
Performance Share Plan (“Share Plan”), as 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 the General Award for 2010 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 2010 to 31 March 2013.
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 Annual Report 2009/2010
73
Total Shareholders’ Return Percentile Ranking Criteria for 50 per cent of the 2010 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%
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 2010 to 31 March 2013:
Under this criteria, performance shares will vest, although
subject always to the vesting of the General Award, according
to the cumulative EP achieved against targets over the
3-year performance period as follows:
• 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.
For the 2010 Senior Management Award, vesting will take place
if the following criteria are met:
• vesting of the General Award
There must be vesting of the 2010 General Award before
the 2010 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
2009.
• Economic Profit (“EP”)
To further strengthen the alignment of Senior Management
with shareholder value creation, EP (measured as profits,
net of tax, and after deducting cost of invested capital) will
replace Return on Invested Capital as the second criteria
under the Senior Management Award.
• Where EP is at or greater than 100 per cent of target, 100
per cent of the performance shares will vest.
• Where EP is between 75 per cent to 100 per cent of target,
between 50 per cent and 100 per cent of the performance
shares will vest.
• Where EP is at or more than 50 per cent but less than 75
per cent of target, 20 per cent of the performance shares
will vest.
• Where EP is more than 0 per cent but less than 50 per
cent of target, 10 per cent of the performance shares will
vest.
• Where there is no EP achievement, no performance
shares will vest.
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
into
transactions in associated products which limit the economic
risk of participating in unvested entitlements under SingTel’s
equity-based remuneration schemes.
from entering
74
Singapore Telecommunications Limited and Subsidiary Companies
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 2010
is set out in the table below:
Name of Senior Executive
The following are in alphabetical order:
Bill Chang
EVP (Business)
SingTel
Allen Lew
CEO (Singapore)
SingTel
Lim Chuan Poh
CEO (International)
SingTel
Jeann Low (6)
Group CFO
SingTel
Paul O’Sullivan (7)
CEO (SingTel Optus)
Fixed Component (1)
(S$)
variable
Component (2)
(S$)
Provident/
Superannuation
Fund (3)
(S$)
Benefits (4)
(S$)
Total (5)
(S$)
520,000
700,000
11,098
55,729
1,286,827
910,000
1,900,000
8,038
61,159
2,879,197
780,000
1,400,000
7,903
59,233
2,247,136
520,000
840,000
11,069
1,020,243
2,391,312
1,296,424
1,816,514
285,564
77,599
3,476,101
Notes:
(1) Fixed Component refers to base salary and Annual Wage Supplement (if applicable) earned for the year ended 31 March 2010.
(2) Variable Component refers to cash bonuses awarded for performance for the year ended 31 March 2010.
(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 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,
flexible 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 in the form of performance share awards under the SingTel Performance
Share Plan were granted to Senior Management on 3 June 2010 for performance for the year ended 31 March 2010. The Senior Management
received the General Award (“GA”) and the Senior Management Award (“SMA”) based on fair values of S$1.651 and S$1.837 per share
respectively. The vesting criteria for the performance share awards are detailed on pages 72-73. The fair values of performance share
awards granted to the following Senior Management are:
- Bill Chang: GA of S$354,286 and SMA of S$265,714
- Allen Lew: GA of S$1,114,286 and SMA of S$835,714
- Lim Chuan Poh: GA of S$628,571 and SMA of S$471,429
- Jeann Low: GA of S$480,000 and SMA of S$360,000
- Paul O’Sullivan: GA of S$1,200,000 and SMA of S$900,000
(6) Benefits for Ms Jeann Low include tax equalisation in relation to her past secondment to Optus, Australia.
(7) 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$1.20 : A$1.00.
GENERATING GROWTH
DELIvERING v ALuE
FINANCIAL STATEMENTS
77 Directors’ Report
87 Consolidated Income Statement
91 Statements of Changes in Equity
85 Statement of Directors
88 Consolidated Statement of
95 Consolidated Statement of
86
Independent Auditors’ Report
Comprehensive Income
Cash Flows
89 Statements of Financial Position
98 Notes to the Financial Statements
SingTel Annual Report 2009/2010
77
Directors’ Report
For the financial year ended 31 March 2010
The Directors present their report to the members together with the audited consolidated financial statements of the Group
and the statement of financial position and statement of changes in equity of the Company (or “SingTel”) for the financial year
ended 31 March 2010.
1.
DIRECTORS
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 AM*
Fang Ai Lian
Heng Swee Keat
Dominic Chiu Fai Ho
Simon Israel
John Powell Morschel
Kaikhushru Shiavax Nargolwala
Ong Peng Tsin (appointed on 1 June 2009)
Deepak S Parekh
Nicky Tan Ng Kuang
* Member of the Order of Australia
2.
ARRANGEMENTS TO EN ABLE DI RE CTO RS TO AC Q UI RE B E NE F IT S BY M E AN S O F TH E ACQ U IS ITION
OF SHARES AND DEBENTURE S
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”).
78
Singapore Telecommunications Limited and Subsidiary Companies
Directors’ Report
For the financial year ended 31 March 2010
3.
DIRECTORS’ INTE RESTS IN SH A RE S A N D DE B EN T URE 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 1 April 2009
or date of
appointment,
At 1 April 2009
or date of
appointment,
At 31 March 2010
if later
At 31 March 2010
if later
Singapore Telecommunications Limited
(Ordinary shares)
Chumpol NaLamlieng
Chua Sock Koong
Graham John Bradley AM
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
199,500
2,940,513
40,000
91,930
1,330
-
179,820
55,780
250,000
40,000
20,000 (4)
150,000
199,500
2,359,757
40,000
91,930
1,330
-
179,820
55,780
148,000
-
-
150,000
(Options to purchase ordinary shares)
Chua Sock Koong
1,450,000 (5)
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
900,000
600,000
Singapore Technologies Engineering Limited
(Ordinary shares)
Fang Ai Lian
50,000
50,000
-
13,859,950 (1)
8,000 (2)
-
-
-
1,360 (3)
-
-
-
-
-
-
-
-
-
-
-
16,278,933
-
-
-
-
1,360
-
-
-
-
-
-
-
-
-
-
SingTel Annual Report 2009/2010
79
Directors’ Report
For the financial year ended 31 March 2010
3.
DIRECTORS’ IN TERE STS IN SH A RE S AN D D E BE NT UR E S (cont’d)
Holdings registered in the name of
Director or nominee
Holdings in which Director is
deemed to have an interest
At 1 April 2009
or date of
appointment,
At 1 April 2009
or date of
appointment,
At 31 March 2010
if later
At 31 March 2010
if later
StarHub Ltd
(Ordinary shares)
Kaikhushru Shiavax Nargolwala
-
37,000
-
-
Notes:
(1) Chua Sock Koong’s deemed interest of 13,859,950 shares included -
(a) 10,125,094 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 3,706,719 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) Held by Daphino Pty Limited, a company wholly-owned by Graham John Bradley AM and spouse.
(3) Held by spouse.
(4) Held by Deepak S Parekh and spouse.
(5) At an exercise price of S$1.41 and S$2.12 per share (1 April 2009: between S$1.41 and S$2.85 per share).
Between the end of the financial year and 21 April 2010, Chua Sock Koong’s deemed interest increased to 15,381,950 shares
due to the acquisition by RBC Dexia Trust Services Singapore Limited of an additional 1,522,000 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 2010.
4.
DIRECTORS’ CONTRACTUAL BENE 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 OPTIO NS AND PE RFOR MA NC E SH ARE 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.
80
Singapore Telecommunications Limited and Subsidiary Companies
Directors’ Report
For the financial year ended 31 March 2010
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)
10.11.00 to 09.11.09
09.11.99
10.06.01 to 09.06.10
09.06.00
31.05.03 to 30.05.12
30.05.02
S$2.85
S$2.12
S$1.41
Balance
as at
1 April 2009
(’000)
Options
exercised
(’000)
Options
cancelled
(’000)
Balance
as at
31 March 2010
(’000)
1,736
2,880
2,135
30
47
3,773
6,794
17,395
134
750
700
1,584
(1,009)
(1,553)
(759)
(30)
-
(942)
(964)
(5,257)
(134)
-
-
(134)
(727)
-
-
-
(47)
(118)
(201)
(1,093)
-
-
-
-
-
1,327
1,376
-
-
2,713
5,629
11,045
-
750
700
1,450
Total
18,979
(5,391)
(1,093)
12,495
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 2009/2010
81
Directors’ Report
For the financial year ended 31 March 2010
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 AM
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
Granted since
commencement of
scheme to
31 March 2010
(’000)
Aggregate Options
Exercised since
commencement of
scheme to
31 March 2010
(’000)
Outstanding
as at
31 March 2010
(’000)
60
4,709
-
-
-
-
-
60
-
-
-
60
4,889
(60)
(3,259)
-
-
-
-
-
(60)
-
-
-
(60)
(3,439)
-
1,450
-
-
-
-
-
-
-
-
-
-
1,450
No options were granted to the Directors during the financial year ended 31 March 2010.
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 2010, 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.
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.
82
Singapore Telecommunications Limited and Subsidiary Companies
Directors’ Report
For the financial year ended 31 March 2010
5.2
Performance S hares (cont’d)
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 2010, awards comprising an aggregate of 38,548,775
shares and 167,786,183 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 -
Balance
as at
1 April 2009
(’000)
Share
awards
granted
(’000)
Share
awards
vested
(’000)
Share
awards
cancelled
(’000)
Balance
as at
31 March 2010
(’000)
Date of grant
Performance shares (General Awards)
For staff and senior management
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
03.06.09
02.09.09
25,818
20
30
40
14,164
10
99
98
12,650
115
925
103
-
-
54,072
For Group Chief Executive Officer (Chua Sock Koong)
25.05.06
29.05.07
04.06.08
03.06.09
470
592
671
-
1,733
-
-
-
-
-
-
-
-
-
-
-
-
20,996
177
21,173
-
-
-
922
922
(24,259)
(19)
-
(38)
-
-
-
-
-
-
-
-
-
-
(24,316)
(447)
-
-
-
(447)
(1,559)
(1)
(30)
(2)
(861)
(10)
-
-
(594)
-
(32)
-
(762)
-
(3,851)
(23)
-
-
-
(23)
-
-
-
-
13,303
-
99
98
12,056
115
893
103
20,234
177
47,078
-
592
671
922
2,185
Sub-total
55,805
22,095
(24,763)
(3,874)
49,263
SingTel Annual Report 2009/2010
83
Directors’ Report
For the financial year ended 31 March 2010
5.2
Performance S hares (cont’d)
Date of grant
Balance
as at
1 April 2009
(’000)
Share
awards
granted
(’000)
Share
awards
vested
(’000)
Share
awards
cancelled
(’000)
Balance
as at
31 March 2010
(’000)
Performance shares (Senior Management Awards)
For senior management
25.05.06
29.05.07
04.06.08
03.06.09
1,657
1,618
1,621
-
4,896
For Group Chief Executive Officer (Chua Sock Koong)
25.05.06
29.05.07
04.06.08
03.06.09
323
440
453
-
1,216
-
-
-
2,290
2,290
-
-
-
629
629
(1,657)
-
-
-
(1,657)
(323)
-
-
-
(323)
-
(84)
(47)
-
(131)
-
-
-
-
-
-
1,534
1,574
2,290
5,398
-
440
453
629
1,522
Sub-total
Total
6,112
2,919
(1,980)
(131)
6,920
61,917
25,014
(26,743)
(4,005)
56,183
During the financial year, awards in respect of an aggregate of 26,743,124 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 2010, 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.
84
Singapore Telecommunications Limited and Subsidiary Companies
Directors’ Report
For the financial year ended 31 March 2010
6.
AUDIT COMMITTEE
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)
Graham John Bradley AM
Dominic Chiu Fai Ho
Kaikhushru Shiavax Nargolwala
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 statement of financial position
and statement of changes in equity of the Company for the financial year ended 31 March 2010 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, 12 May 2010
Chua Sock Koong
Director
SingTel Annual Report 2009/2010
85
Statement of Directors
For the financial year ended 31 March 2010
In the opinion of the Directors,
(a)
the consolidated financial statements of the Group and the statement of financial position and statement of changes in
equity of the Company as set out on pages 87 to 190 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 2010 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, 12 May 2010
Chua Sock Koong
Director
86
Singapore Telecommunications Limited and Subsidiary Companies
Independent Auditors’ Report
To the Members of Singapore Telecommunications Limited
For the financial year ended 31 March 2010
We have audited the accompanying financial statements of Singapore Telecommunications Limited (the Company) and its
subsidiaries (the Group) which comprise the statements of financial position of the Group and the Company as at 31 March
2010, the income statement, statement of comprehensive income, statement of changes in equity and statement of cash flows
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 87 to 190.
Management’s Responsibility for the Financial Statements
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.
Auditors’ 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 statement of financial position 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 2010 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, 12 May 2010
Consolidated Income Statement
For the financial year ended 31 March 2010
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
SingTel Annual Report 2009/2010
87
Notes
2010
S$ Mil
2009
S$ Mil
4
5
6
7
8
9
10
11
12
16,870.9
14,934.4
(12,119.0)
(10,595.3)
94.7
92.1
4,846.6
4,431.2
(1,878.0)
4.7
(1,732.7)
(235.7)
2,973.3
2,462.8
1,862.1
1,796.1
4,835.4
4,258.9
(8.4)
(325.9)
48.5
(360.7)
4,501.1
3,946.7
(594.6)
(497.5)
3,906.5
3,449.2
3,907.3
(0.8)
3,448.4
0.8
3,906.5
3,449.2
Earnings per share attributable to shareholders of
the Company
- basic (cents)
- diluted (cents)
13
13
24.55
24.46
21.67
21.60
The accompanying notes on pages 98 to 190 form an integral part of these financial statements.
Independent Auditors’ Report – page 86
88
Singapore Telecommunications Limited and Subsidiary Companies
Consolidated Statement of Comprehensive Income
For the financial year ended 31 March 2010
Profit after tax
Other comprehensive income/ (loss):
Exchange differences arising from translation of foreign operations
and other currency translation differences
- Currency translation differences during the year
- Currency translation differences transferred to income statement
upon repayment of loan by subsidiary
- Currency translation differences transferred to income statement
upon capital reduction of subsidiary
- Currency translation differences transferred to income statement
upon disposal of joint venture company
Cash flow hedges
- Fair value changes during the year
- Tax effects
- Fair value changes transferred to income statement
- Tax effects
Available-for-sale investments
- Fair value changes during the year
- Fair value loss transferred to income statement
Share of other comprehensive income of associated
and joint venture companies
2010
S$ Mil
2009
S$ Mil
3,906.5
3,449.2
1,420.9
(1,791.2)
(340.1)
-
-
(83.9)
-
1,080.8
0.6
(1,874.5)
(322.8)
48.1
(274.7)
370.7
(43.2)
327.5
52.8
21.5
60.9
82.4
4.1
587.7
(84.4)
503.3
(570.1)
87.7
(482.4)
20.9
(115.2)
-
(115.2)
12.6
Other comprehensive income / (loss), net of tax
1,220.1
(1,956.2)
Total comprehensive income
Attributable to -
Shareholders of the Company
Minority interests
5,126.6
1,493.0
5,127.4
(0.8)
1,492.2
0.8
5,126.6
1,493.0
The accompanying notes on pages 98 to 190 form an integral part of these financial statements.
Independent Auditors’ Report – page 86
Statements of Financial Position
As at 31 March 2010
SingTel Annual Report 2009/2010
89
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
2010
S$ Mil
2009
S$ Mil
2010
S$ Mil
2009
S$ Mil
15
16
17
26
18
19
20
21
22
23
25
26
12
27
28
29
30
31
26
1,613.6
3,172.1
-
12.8
345.8
5,144.3
10,750.2
10,200.2
-
278.8
10,132.7
255.8
175.6
890.3
123.6
32,807.2
1,076.0
2,531.9
10.8
1.5
173.4
3,793.6
9,122.6
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461.3
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3,452.5
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31.1
182.7
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158.5
12,267.5
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
37,951.5
33,254.7
16,085.9
16,144.1
4,649.8
17.9
338.9
1,513.1
14.9
300.2
6,834.8
3,267.5
16.8
340.2
1,427.4
6.4
44.2
5,102.5
1,999.6
-
214.0
-
-
14.4
2,228.0
1,130.7
-
221.3
-
-
12.6
1,364.6
The accompanying notes on pages 98 to 190 form an integral part of these financial statements.
Independent Auditors’ Report – page 86
90
Singapore Telecommunications Limited and Subsidiary Companies
Statements of Financial Position
As at 31 March 2010
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
Equity attributable to shareholders
of the Company
Minority interests
Group
Company
Notes
2010
S$ Mil
2009
S$ Mil
2010
S$ Mil
2009
S$ Mil
30
31
32
26
12
33
34
5,327.9
23.2
628.6
29.4
941.1
294.8
355.7
7,600.7
6,047.5
13.7
532.5
34.2
563.2
307.9
152.9
7,651.9
3,809.1
-
157.8
10.7
899.9
182.8
155.8
5,216.1
4,353.2
-
157.0
12.8
504.8
186.7
9.2
5,223.7
14,435.5
12,754.4
7,444.1
6,588.3
23,516.0
20,500.3
8,641.8
9,555.8
2,616.3
20,876.5
2,605.6
17,870.6
2,616.3
6,025.5
2,605.6
6,950.2
23,492.8
23.2
20,476.2
24.1
8,641.8
-
9,555.8
-
Total equity
23,516.0
20,500.3
8,641.8
9,555.8
The accompanying notes on pages 98 to 190 form an integral part of these financial statements.
Independent Auditors’ Report – page 86
Statements of Changes in Equity
For the financial year ended 31 March 2010
SingTel Annual Report 2009/2010
91
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Statements of Changes in Equity
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SingTel Annual Report 2009/2010
93
Statements of Changes in Equity
For the financial year ended 31 March 2010
Capital
Reserve -
Company - 2010
Share
Treasury Performance
Capital
S$ Mil
Shares (1)
S$ Mil
Shares
S$ Mil
Hedging
Reserve
S$ Mil
Fair Value
Reserve
S$ Mil
Retained
Earnings
S$ Mil
Total
Equity
S$ Mil
Balance as at 1 April 2009
2,605.6
-
(38.9)
(237.9)
15.0
7,212.0
9,555.8
Changes in equity for the year
Issue of new shares
Performance shares purchased
by the Company
Performance shares vested
Equity-settled performance
shares
Transfer of liability to equity
Cash paid to employees under
performance share plans
Contribution to Trust (4)
Final dividend paid to
shareholders of the Company
Interim dividend paid to
shareholders of the Company
Total comprehensive income for
the year
10.7
-
-
-
(7.0)
13.1
2.3
(0.3)
(28.0)
-
-
(19.9)
-
-
-
-
-
-
-
-
10.7
-
(10.8)
10.8
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
10.7
(10.8)
3.8
13.1
2.3
(0.3)
(28.0)
-
(1,097.4)
(1,097.4)
-
-
(987.5)
(2,084.9)
(987.5)
(2,094.1)
Balance as at 31 March 2010
2,616.3
-
70.7
6.5
1,102.9
1,180.1
(58.8)
(167.2)
21.5
6,230.0
8,641.8
The accompanying notes on pages 98 to 190 form an integral part of these financial statements.
Independent Auditors’ Report – page 86
94
Singapore Telecommunications Limited and Subsidiary Companies
Statements of Changes in Equity
For the financial year ended 31 March 2010
Capital
Reserve -
Company - 2009
Share
Treasury
Performance
Hedging
Fair Value
Retained
Capital
S$ Mil
Shares (1)
S$ Mil
Shares
S$ Mil
Reserve
S$ Mil
Reserve
Earnings
S$ Mil
S$ Mil
Total
Equity
S$ Mil
Balance as at 1 April 2008
2,593.7
-
(22.8)
(263.8)
24.9
7,427.9
9,759.9
Changes in equity for the year
Issue of new shares
Performance shares purchased
by the Company
Performance shares vested
Equity-settled performance
shares
Transfer of liability to equity
Cash paid to employees under
performance share plans
Contribution to Trust (4)
Final dividend paid to
shareholders of the Company
Interim dividend paid to
shareholders of the Company
Total comprehensive income/
(loss) for the year
11.9
-
-
-
-
-
-
-
-
-
11.9
-
(12.1)
12.1
-
-
-
-
-
-
-
-
-
-
-
(6.5)
13.6
1.1
(0.8)
(23.5)
-
-
(16.1)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
11.9
(12.1)
5.6
13.6
1.1
(0.8)
(23.5)
-
(1,098.8)
(1,098.8)
-
-
(892.1)
(1,990.9)
(892.1)
(1,995.1)
-
25.9
(9.9)
1,775.0
1,791.0
(38.9)
(237.9)
15.0
7,212.0
9,555.8
Balance as at 31 March 2009
2,605.6
Notes:
(1) ‘Treasury Shares’ are accounted for in accordance with FRS 32 (revised 2004).
(2) ‘Currency Translation Reserve’ relate 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.
(3) ‘Other Reserves’ relate mainly to goodwill on acquisitions completed prior to 1 April 2001.
(4) RBC Dexia Trust Services Singapore Limited (the “Trust”) is the trustee of a trust established to administer the performance share plans.
The accompanying notes on pages 98 to 190 form an integral part of these financial statements.
Independent Auditors’ Report – page 86
Consolidated Statement of Cash Flows
For the financial year ended 31 March 2010
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
SingTel Annual Report 2009/2010
95
2010
S$ Mil
2009
S$ Mil
4,501.1
3,946.7
1,878.0
(4.7)
8.4
325.9
(1,862.1)
36.5
382.0
1,732.7
235.7
(48.5)
360.7
(1,796.1)
34.2
518.7
Operating cash flow before working capital changes
4,883.1
4,465.4
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
(455.7)
357.2
(63.6)
26.2
(86.0)
96.0
(41.6)
3.5
4,747.2
4,437.3
(2.2)
953.6
(369.8)
(3.7)
1,068.2
(338.8)
5,328.8
5,163.0
The accompanying notes on pages 98 to 190 form an integral part of these financial statements.
Independent Auditors’ Report – page 86
96
Singapore Telecommunications Limited and Subsidiary Companies
Consolidated Statement of Cash Flows
For the financial year ended 31 March 2010
Note
2010
S$ Mil
2009
S$ Mil
Cash Flows from Investing Activities
Dividends received from AFS 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
Loan to joint venture company
Repayment of loan by joint venture company
Proceeds from sale of joint venture company
(net of withholding tax paid)
Net sale proceeds from FVTPL investments
Investment in AFS investments
Proceeds from sale of AFS investments
Proceeds from capital reduction of AFS investments (net of withholding tax paid)
Payment for purchase of property, plant and equipment
Advance payment for purchase of submarine cable capacity
Drawdown of prepaid submarine cable capacity
Proceeds from sale of property, plant and equipment
Purchase of intangible assets
Withholding tax paid on intra-group interest income
17.5
16.7
-
-
0.6
(90.2)
(9.4)
0.9
-
10.2
(0.2)
4.2
-
(1,923.0)
(29.1)
59.1
17.2
(122.5)
(131.2)
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)
Net cash outflow from investing activities
(2,179.2)
(2,390.6)
Cash Flows from Financing Activities
Proceeds from term loans
Repayment of term loans
Proceeds from bond issue
Bonds repaid
Decrease in finance lease liabilities
Net repayment of borrowings
Settlement of swap for bonds repaid
Net interest paid on borrowings and swaps
Dividend paid to minority shareholders
Final dividend paid to shareholders of the Company
Interim dividend paid to shareholders of the Company
Net loan proceeds from minority shareholder
Proceeds from issue of shares
Purchase of performance shares
Net cash outflow from financing activities
Net increase/ (decrease) in cash and cash equivalents
Exchange effects on cash and cash equivalents
Cash and cash equivalents at beginning of year
3,229.2
(3,498.8)
701.5
(625.9)
(10.4)
(204.4)
-
(314.8)
(0.6)
(1,097.0)
(987.0)
23.1
10.7
(64.4)
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)
(2,634.4)
(3,017.8)
515.2
22.5
1,075.8
(245.4)
(50.7)
1,371.9
Cash and cash equivalents at end of year
15
1,613.5
1,075.8
The accompanying notes on pages 98 to 190 form an integral part of these financial statements.
Independent Auditors’ Report – page 86
SingTel Annual Report 2009/2010
97
Consolidated Statement of Cash Flows
For the financial year ended 31 March 2010
Note (1):
Acquisition of subsidiary
In the previous financial year, the Group acquired 100 per cent equity interest in SCS Computer Systems Pte. Ltd.
(formerly known as Singapore Computer Systems Limited) and its subsidiaries (“SCS”).
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 98 to 190 form an integral part of these financial statements.
Independent Auditors’ Report – page 86
98
Singapore Telecommunications Limited and Subsidiary Companies
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
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 46.
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 12 May
2010.
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 adoption of the new or revised FRS and Interpretations to FRS (“INT FRS”) which are mandatory from 1
April 2009 did not result in substantial changes to the Group’s accounting policies.
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
SingTel Annual Report 2009/2010
99
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
2.1
Basis of Accounting (cont’d)
The following are the new or revised FRS and INT FRS which are relevant to the Group:
FRS 1 - Presentation of Financial Statements (Revised), introduces a new statement of comprehensive income which requires
the separate disclosure of owner and non-owner changes in equity. The statement of changes in equity includes only details
of transactions with owners, with details of all non-owner changes in equity presented in the statement of comprehensive
income.
FRS 108 - Operating Segments (which replaces FRS 14 - Segment Reporting), requires disclosure of the Group’s operating
segments determined based on information regularly reviewed by the chief operating decision maker, as presented in Note
38.
Amendments to FRS 107 - Financial Instruments: Disclosures, require additional disclosure on fair value measurement and
liquidity risk, as presented in Note 26.2.
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 statement of financial position.
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
100
Singapore Telecommunications Limited and Subsidiary Companies
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
2. 2 Group Accounting (cont’d)
2.2.2 Associated companies (cont’d)
In the consolidated statement of financial position, 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.
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 statement of financial position, 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’ 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.
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
SingTel Annual Report 2009/2010
101
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
2.3
Share Capital (cont’d)
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’
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.
2.4
Investments in Subsidiaries, Ass ocia ted a n d J o in t Ven tu re Co mp a n ies
In the Company’s statement of financial position, 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 end of the
reporting period 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 end of the reporting period, 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.
102
Singapore Telecommunications Limited and Subsidiary Companies
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
2. 6
Derivative Financ ial Instrume nts and He d gin g A c tivities
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 the end of each reporting period.
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.
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
Designated 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 designated derivative financial instruments that qualify as cash flow
hedges are recognised in ‘Other Comprehensive Income’. 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.
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
SingTel Annual Report 2009/2010
103
2.6
Derivative Financ ial Instrume nts an d H ed g in g Ac t ivi ties (cont’d)
2.6.1 Hedge accounting (cont’d)
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 ‘Other Comprehensive Income’ in the consolidated financial statements and the amount accumulated
in ‘Currency Translation Reserve’ 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 Singapore Dollar 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 Australia 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.
2.7
Fair Value Estimation of Financ ial I n st ru men ts
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 at the end of the reporting period.
The fair values of unquoted investments are determined by 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.
104
Singapore Telecommunications Limited and Subsidiary Companies
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
2. 7
Fair Value Estimation of Financ ial Instru m en t s (cont’d)
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 end of the reporting period.
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 end of the reporting period.
2. 8
Financial Guarantee Contracts
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.
2. 9
Trade and Other Receivable 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 Other Payab les
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.
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
SingTel Annual Report 2009/2010
105
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
2.12 Cash and Cash Equivalents
For the purpose of the consolidated statement of cash flows, 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 statement of financial position.
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 statement of financial position 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 end of the reporting period are translated at exchange rates ruling at that date. Foreign exchange differences
arising from translation are recognised in the income statement.
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 end of the reporting period 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 ‘Other Comprehensive Income’.
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 end of the reporting period. 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
The exchange differences on loans from the Company to its subsidiaries which form part of the Company’s net investment
in the subsidiaries are included in ‘Currency Translation Reserve’. On disposal, the accumulated exchange differences are
recognised in the consolidated income statement as part of the gain or loss on disposal.
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
106
Singapore Telecommunications Limited and Subsidiary Companies
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
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 the end of each reporting period and adjusted to reflect the current best estimate.
2. 15
Intangible 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.
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 the end of each reporting period.
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 in the consolidated statement of financial position 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.
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
SingTel Annual Report 2009/2010
107
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
2.15
Intangible Assets (cont’d)
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 .1 6
Im pa i r m ent of Non-financial A ssets
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 the end
of each reporting period 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.
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.
2.17
Inventories
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
and engineering 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 statement of financial position 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.
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
108
Singapore Telecommunications Limited and Subsidiary Companies
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
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
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 the end
of each reporting period.
On disposal of property, plant and equipment, the difference between the disposal proceeds and its carrying value is taken
to the income statement.
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
SingTel Annual Report 2009/2010
109
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.
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.
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
110
Singapore Telecommunications Limited and Subsidiary Companies
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
2. 20 Revenue 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 the end of the reporting period. Expenses directly attributable to the unearned revenue are deferred
until the revenue is recognised.
Revenue from the provision of information technology and engineering services is recognised based on the percentage
of completion of the projects using cost-to-cost basis. Revenue from information technology and engineering 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.
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 end of the reporting period.
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
SingTel Annual Report 2009/2010
111
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
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 statement of financial position. The performance
share expense is amortised and recognised in the income statement on a straight-line basis over the vesting period.
At the end of each reporting period, 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.
2.23 Customer Acquisition Costs
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.
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
112
Singapore Telecommunications Limited and Subsidiary Companies
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
2. 25 Government 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 Exception al Ite ms
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 end of the reporting
period 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 end of the
reporting period.
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 the end of each reporting period, 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.
2. 28 Dividends
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.
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
SingTel Annual Report 2009/2010
113
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
2.29 Segment Reporting
Operating segment is identified as the component of the Group that is regularly reviewed by the chief operating decision
maker in order to allocate resources to the segment and to assess its performance.
2.30 Non-current Assets (or Disp os al Gro u ps ) Hel d for Sale a n d D isco n tin u ed O p era tio n 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 ESTIMATE S A ND JUD G E M E NTS
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
end of the reporting period, 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 Reviews
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.
3.2
Impairment of Trade Rece ivables
The Group assesses at the end of each reporting period 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.
114
Singapore Telecommunications Limited and Subsidiary Companies
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
3. 3
Estimated Useful Lives of Pro perty, Pl a n t an d Eq 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 the end of each reporting period. 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 Payme nts
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 the end of each reporting period. In addition, the Group revises the estimated
number of performance shares that participants are expected to receive based on non-market vesting conditions at the end
of each reporting period.
The assumptions of the valuation model used to determine fair values are set out in Note 5.3.
3.6
Pu rchase Cons ideration Payable
In November 2009, the Group purchased an additional 1.5% effective equity interest in Bharti Airtel Limited (“Bharti”), a
joint venture company. The purchase consideration will be INR 18,073 million (S$562 million) to INR 30,084 million (S$936
million), payable in cash. As at 31 March 2010, the Group determined the fair value of the purchase consideration payable
based on the net present value of estimated future cash flows expected to arise from the continuing operations of Bharti.
This determination requires significant judgement to be applied on the future cash flows, growth rate and discount rate. The
assumptions used by management are stated in Note 28.
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
SingTel Annual Report 2009/2010
115
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
3.7
Contingent Liabilities
The Group consults with legal counsel on matters related to litigation, and other experts both within and outside the Group
with respect to matters in the ordinary course of business.
As at 31 March 2010, the Group was involved in various legal proceedings where it has been vigorously defending its claims
as disclosed in Note 41.
4.
OPERATING REVENUE
Mobile communications
Data and Internet
Information technology and engineering
- infrastructure services and business solutions
- fibre rollout
National telephone
Sale of equipment
International telephone
Pay television
Others
Operating revenue
Operating revenue
Other income (see Note 6)
Interest and dividend income (see Note 10)
Total revenue
2010
S$ Mil
7,042.7
3,341.9
1,779.3
180.8
1,960.1
1,893.7
1,452.2
702.2
150.4
327.7
Group
2009
S$ Mil
5,935.6
3,109.8
1,557.1
-
1,557.1
1,861.6
1,221.3
800.0
161.1
287.9
16,870.9
14,934.4
16,870.9
94.7
36.1
14,934.4
92.1
56.8
17,001.7
15,083.3
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
116
Singapore Telecommunications Limited and Subsidiary Companies
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
5.
OPERATING EXPENSES
Selling and administrative costs (1)
Traffic expenses
Staff costs
Cost of equipment sold
Repairs and maintenance
Other cost of sales
2010
S$ Mil
4,165.3
2,714.1
2,122.1
1,896.2
322.0
899.3
Group
2009
S$ Mil
3,544.8
2,497.4
1,965.7
1,681.6
299.0
606.8
12,119.0
10,595.3
Note:
(1) Included mobile and broadband subscriber acquisition and retention costs, supplies and services, as well as rentals of properties
and mobile base stations.
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
Group
2010
S$ Mil
2009
S$ Mil
204.8
189.2
24.4
9.2
6.8
24.9
2.6
8.3
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
5.2
Key Manageme nt Personnel Com pe n sa tio n
Key management personnel compensation (1)
Directors' fees and remuneration (2)
Other key management personnel remuneration (3)
SingTel Annual Report 2009/2010
117
Group
2010
S$ Mil
2009
S$ Mil
6.1
12.5
18.6
5.2
9.2
14.4
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 1,551,738 (2009: 1,123,464) 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$2.6 million (2009: S$1.7 million).
(3) The other key management personnel were awarded up to 3,953,019 (2009: 3,004,063) 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$6.9
million (2009: S$5.1 million).
The other key management personnel of the Group comprise members of SingTel’s Management Committee.
5.3
Share-bas ed 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.
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
118
Singapore Telecommunications Limited and Subsidiary Companies
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
5.3.1 Share options (cont’d)
Group and Company
Outstanding as at 1 April
Cancelled
Exercised
Number of
share options
2010
'000
2009
'000
18,979
(1,093)
(5,391)
25,305
(275)
(6,051)
Outstanding and exercisable as at 31 March
12,495
18,979
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$1.49
Weighted average
exercise price
per share
2010
S$
1.75
2.40
1.97
1.59
2010
'000
-
2,077
4,088
6,330
2009
S$
1.80
1.63
1.95
1.75
2009
'000
1,870
3,630
5,985
7,494
12,495
18,979
Weighted average remaining validity life
1.6 years
2.3 years
No compensation expense is recognised when the share options are issued (see Note 2.21.3).
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. 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 while 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.
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
SingTel Annual Report 2009/2010
119
5.3.2 Performance share plans (cont’d)
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 at the end of the reporting period 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
2010
Date of grant
Share Plan 2004
FY2007 (1)
25 May 2006
Aug 2006 to Mar 2007
FY2008
29 May 2007
Sep 2007 to Feb 2008
FY2009
4 Jun 2008
Sep 2008 to Mar 2009
FY2010
3 Jun 2009
Sep 2009
Outstanding
as at
1 April 2009
'000
26,288
90
14,756
207
13,321
1,143
Outstanding
and unvested
as at
Granted
'000
Vested
'000
Cancelled
31 March 2010
'000
'000
-
-
-
-
-
-
(24,706)
(57)
(1,582)
(33)
-
-
-
-
-
-
-
-
(861)
(10)
(594)
(32)
(762)
-
13,895
197
12,727
1,111
21,156
177
-
-
21,918
177
Note:
(1) “FY2007” denotes financial year ended 31 March 2007.
55,805
22,095
(24,763)
(3,874)
49,263
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
Outstanding
and unvested
as at
Granted
'000
Vested
'000
Cancelled
31 March 2009
'000
'000
120
Singapore Telecommunications Limited and Subsidiary Companies
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
5.3.2 Performance share plans (cont’d)
Outstanding
as at
1 April 2008
'000
22,424
1,208
28,936
468
16,255
215
Group and Company
2009
Date of grant
Share Plan 2004
FY2006
26 May 2005
Aug 2005 to Feb 2006
FY2007
25 May 2006
Aug 2006 to Mar 2007
FY2008
29 May 2007
Sep 2007 to Feb 2008
FY2009
4 Jun 2008
Sep 2008 to Mar 2009
-
-
-
-
-
-
(19,503)
(997)
(2,921)
(211)
-
-
(210)
-
(2,438)
(378)
26,288
90
(52)
-
-
-
(1,447)
(8)
14,756
207
(927)
-
13,321
1,143
-
-
14,248
1,143
69,506
15,391
(20,762)
(8,330)
55,805
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
SingTel Annual Report 2009/2010
121
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 -
2010 and 2009
General Awards
Date of grant
Share Plan 2004
FY2009
4 June 08
FY2008
29 May 07
FY2010
3 June 09
Fair value at grant date
S$1.95
S$1.61
S$1.56
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
22.8%
13.7%
25.9%
17.6%
34.6%
23.1%
July 2001
May 2007
July 2001
June 2008
July 2001
June 2009
29 May 2007
4 June 2008
3 June 2009
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
122
Singapore Telecommunications Limited and Subsidiary Companies
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
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
the end of the reporting period and the assumptions of the fair value model for the relevant grants were as follows -
2010
25 May 06
29 May 07
4 June 08
3 June 09
Company
Date of grant
Share Plan 2004
FY2007
FY2008
FY2009
FY2010
Group
And
Senior Management Awards
Number of performance shares ('000)
Outstanding as at 1 April 2009
Granted
Vested
Cancelled
1,980
-
(1,980)
-
2,058
-
-
(84)
2,074
-
-
(47)
-
2,919
-
-
6,112
2,919
(1,980)
(131)
Outstanding and unvested as at 31 March 2010
-
1,974
2,027
2,919
6,920
Fair value at 31 March 2010
S$3.17
S$2.15
S$2.50
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
33.7%
22.8%
33.7%
22.8%
800 days historical volatility
preceding March 2010
31 March
2010
31 March
2010
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
5.3.2 Performance share plans (cont’d)
SingTel Annual Report 2009/2010
123
2009
26 May 05
25 May 06
29 May 07
4 June 08
Company
Date of grant
Share Plan 2004
FY2006
FY2007
FY2008
FY2009
Group
And
Senior Management Awards
Number of performance shares ('000)
Outstanding as at 1 April 2008
Granted
Vested
Cancelled
1,474
-
(1,397)
(77)
2,122
-
-
(142)
2,058
-
-
-
-
2,190
-
(116)
5,654
2,190
(1,397)
(335)
Outstanding and unvested as at 31 March 2009
-
1,980
2,058
2,074
6,112
Fair value at 31 March 2009
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 March 2009
31 March
2009
31 March
2009
124
Singapore Telecommunications Limited and Subsidiary Companies
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
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.
2010
25 May 06
29 May 07
4 June 08
3 June 09
Group
Date of grant
FY2007
FY2008
FY2009
FY2010
PBDBS (cash-settled)
Number of performance shares ('000)
Outstanding as at 1 April 2009
Granted
Vested
Cancelled
953
-
(900)
(53)
613
-
-
(29)
622
-
-
(50)
-
623
-
(34)
2,188
623
(900)
(166)
Outstanding and unvested as at 31 March 2010
-
584
572
589
1,745
Fair value at 31 March 2010
S$3.22
S$1.46
S$1.92
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
33.7%
22.8%
33.7%
22.8%
800 days historical volatility
preceding March 2010
31 March
2010
31 March
2010
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
SingTel Annual Report 2009/2010
125
5.3.3 Performance-based Deferred Bonus Scheme (“PBDBS”) (cont’d)
2009
26 May 05
25 May 06
29 May 07
4 June 08
Group
Date of grant
FY2006
FY2007
FY2008
FY2009
PBDBS (cash-settled)
Number of performance shares ('000)
Outstanding as at 1 April 2008
Granted
Vested
Cancelled
459
-
(312)
(147)
1,113
-
-
(160)
Outstanding and unvested as at 31 March 2009
-
953
676
-
-
(63)
613
-
655
-
(33)
2,248
655
(312)
(403)
622
2,188
Fair value at 31 March 2009
S$2.55
S$1.56
S$1.02
Assumptions under Monte-Carlo Model
Expected volatility
SingTel
MSCI Asia Pacific Telco Index
MSCI Asia Pacific Telco Component Stocks
Risk free interest rates
Yield of Singapore Government Securities on
33.5%
22.9%
33.5%
22.9%
800 days historical volatility
preceding March 2009
31 March
2009
31 March
2009
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
126
Singapore Telecommunications Limited and Subsidiary Companies
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
5. 4
Special Purpose Entity
The Trust’s purpose is to purchase the Company’s shares from the open market for delivery to the recipients upon vesting
of the awards.
As at the end of the reporting period, the Trust held the following assets -
Cash at bank
Cost of SingTel shares, net of vesting
The details of SingTel shares held by the Trust were as follows -
Group
Company
2010
S$ Mil
0.5
30.5
31.0
2009
S$ Mil
0.8
43.7
44.5
2010
S$ Mil
0.4
23.6
24.0
Group
Balance as at 1 April
Purchase of SingTel shares
Vesting of shares
Number of shares
Amount
2010
'000
13,303
15,276
(18,454)
2009
'000
15,382
10,970
(13,049)
2010
S$ Mil
43.7
41.5
(54.7)
2009
S$ Mil
0.5
28.5
29.0
2009
S$ Mil
50.1
36.9
(43.3)
Balance as at 31 March
10,125
13,303
30.5
43.7
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’ within equity. See Note 2.3.
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
5.5
Other Op erating Exp ense Item s
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 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 properties and mobile base stations
SingTel Annual Report 2009/2010
127
Group
2010
S$ Mil
2009
S$ Mil
1.0
1.0
0.3
0.6
0.3
1.5
138.1
13.9
4.0
2.5
0.5
258.6
0.7
0.7
0.2
0.5
0.3
2.0
127.7
11.6
2.6
3.5
0.6
226.9
Note:
(1) The non-audit fees for the current financial year ended 31 March 2010 included S$0.1 million (2009: S$0.1 million) and S$0.3
million (2009: S$0.3 million) paid to Deloitte & Touche LLP, Singapore, and Deloitte Touche Tohmatsu, Australia, respectively in
respect of certification and review for regulatory purposes.
The Audit Committee had undertaken a review of the non-audit services provided by the auditors, Deloitte & Touche LLP, and
in the opinion of the Audit Committee, these services would not affect the independence of the auditors.
6.
OTHER INCO ME
Bad trade receivables recovered
Rental income
Net foreign exchange losses - trade related
Net losses on disposal of property, plant and equipment
Others
Group
2009
S$ Mil
9.4
4.6
(19.9)
(6.7)
104.7
2010
S$ Mil
7.2
4.8
(15.4)
(4.3)
102.4
94.7
92.1
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
128
Singapore Telecommunications Limited and Subsidiary Companies
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
7.
DEPRECIATION AND AMORTISATION
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
8.
EXCEPTIONAL ITE MS
Exceptional gains
Foreign exchange gain, net of hedging, from loan repayment by subsidiary
Foreign exchange gain, net of hedging, from capital reduction
of subsidiary
Gain on disposal of non-current investments
Gain on dilution of interest in associated and joint venture companies
Write back of impairment for property, plant and equipment
Gain on disposal of subsidiary
Gain on sale of interest in joint venture company
Others
Exceptional losses
Impairment of associated and joint venture companies (see Note 24.2)
Impairment of AFS investments
Impairment of property, plant and equipment
Impairment of other non-current investments
Others
2010
S$ Mil
1,818.5
64.3
(1.7)
(3.1)
Group
2009
S$ Mil
1,685.8
52.8
(2.8)
(3.1)
1,878.0
1,732.7
Group
2010
S$ Mil
2009
S$ Mil
327.4
-
2.4
3.2
-
-
-
1.5
334.5
(260.0)
(60.9)
(8.9)
-
-
(329.8)
-
83.9
-
4.1
10.8
1.7
3.6
-
104.1
(330.0)
-
(3.5)
(1.3)
(5.0)
(339.8)
4.7
(235.7)
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
9.
SHARE OF RESULTS OF ASSOCIATED AND JOINT VENTURE COMPANIES
Share of ordinary results of
- joint venture companies
- associated companies
SingTel Annual Report 2009/2010
129
Group
2010
S$ Mil
2009
S$ Mil
2,426.8
(7.3)
2,419.5
2,098.0
(67.5)
2,030.5
Share of exceptional items (1) of joint venture companies
(16.5)
200.8
Share of tax of
- joint venture companies
- associated companies
Note:
(1) Share of exceptional items comprised -
(Reversal of gain)/ Gain on dilution of equity interest in a subsidiary
Transaction costs on acquisitions
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
Others
(535.5)
(5.4)
(540.9)
(426.6)
(8.6)
(435.2)
1,862.1
1,796.1
(6.9)
(9.6)
-
-
-
-
-
-
224.5
-
15.6
8.5
3.7
(44.3)
(15.4)
8.2
(16.5)
200.8
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
130
Singapore Telecommunications Limited and Subsidiary Companies
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
10.
INTEREST AND INVESTMENT INCOME (NET)
Interest income from
- bank deposits
- FVTPL investments
- others
Gross dividends from AFS investments
Other revenue
Net foreign exchange losses
Fair value losses on hedging instruments
Fair value losses on FVTPL investments
Fair value losses on fair value hedges
- hedged items
- hedging instruments
11.
FINANCE COSTS
Interest expense
- bonds
- bank loans
- others
Less: Amounts capitalised
Effects of hedging using interest-rate swaps
Unwinding of discount (including adjustments)
Group
2010
S$ Mil
2009
S$ Mil
15.3
0.2
1.2
16.7
19.4
36.1
(26.0)
(17.8)
(0.7)
752.4
(752.4)
-
33.1
0.5
1.1
34.7
22.1
56.8
(8.1)
-
(0.2)
(411.1)
411.1
-
(8.4)
48.5
Group
2010
S$ Mil
302.2
56.4
21.7
380.3
(7.2)
373.1
(48.2)
1.0
2009
S$ Mil
360.3
71.1
4.9
436.3
(11.7)
424.6
(68.8)
4.9
325.9
360.7
As at 31 March 2010, the interest rate applicable to the capitalised borrowings was 4.6 per cent (2009: 7.7 per cent).
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
12.
TAXAT ION
12.1 Tax Expense
Current income tax
- Singapore
- Overseas
Deferred income tax
SingTel Annual Report 2009/2010
131
Group
2009
S$ Mil
238.2
397.9
636.1
2010
S$ Mil
253.0
502.0
755.0
(39.0)
7.9
Tax expense attributable to current year's profit
716.0
644.0
Recognition of deferred tax asset on other temporary differences (1)
(120.4)
(90.4)
Adjustments in respect of prior year -
Current income tax
- (over)/ under provision
Deferred income tax
- over provision
(0.4)
0.7
(0.6)
(56.8)
594.6
497.5
Note:
(1) This relates to a deferred tax asset recognised on interest expense arising from inter-company loans.
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
132
Singapore Telecommunications Limited and Subsidiary Companies
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
12. 1 Tax Expen se (cont’d)
The tax expense on 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 (2009: 17 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
2010
S$ Mil
4,501.1
(1,862.1)
2,639.0
Group
2009
S$ Mil
3,946.7
(1,796.1)
2,150.6
448.6
365.6
259.4
(80.9)
88.8
2.1
(1.4)
(0.6)
220.0
(10.7)
73.8
0.8
(4.0)
(1.5)
Tax expense attributable to current year's profits
716.0
644.0
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
12.2 Deferred Taxes
SingTel Annual Report 2009/2010
133
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 - 2010
Deferred tax assets
Balance as at 1 April 2009
Credited/ (Charged) to income statement
Credited to other comprehensive income
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
328.5
5.5
-
-
73.7
75.3
(0.4)
-
(32.8)
15.1
Provisions
S$ Mil
311.1
133.0
-
(256.7)
63.9
Others
S$ Mil
104.1
25.1
4.9
31.3
25.6
Total
S$ Mil
819.0
163.2
4.9
(258.2)
178.3
Balance as at 31 March 2010
251.3
407.7
57.2
191.0
907.2
Group - 2010
Deferred tax liabilities
Balance as at 1 April 2009
(Charged)/ Credited to income statement
Transfer to current tax
Translation differences
Offshore
interest and
Accelerated
dividend
tax
depreciation
S$ Mil
not
remitted
S$ Mil
(288.7)
(4.9)
-
(0.1)
(5.1)
-
-
-
Others
S$ Mil
(26.7)
1.7
12.5
(0.4)
Total
S$ Mil
(320.5)
(3.2)
12.5
(0.5)
Balance as at 31 March 2010
(293.7)
(5.1)
(12.9)
(311.7)
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
134
Singapore Telecommunications Limited and Subsidiary Companies
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
12. 2 Deferred Taxes (cont’d)
Group - 2009
Deferred tax assets
Balance as at 1 April 2008
Acquisition of subsidiary
Credited/ (Charged) to income statement
Credited to other comprehensive income
Transfer (to)/ from current tax
Disposal of subsidiary
Translation differences
TWDV (1) in
Tax losses
excess of
NBV (2) of
depreciable
assets
S$ Mil
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 March 2009
311.1
328.5
75.3
104.1
819.0
Group - 2009
Deferred tax liabilities
Balance as at 1 April 2008
Acquisition of subsidiary
(Charged)/ Credited to income statement
Transfer from current tax
Disposal of subsidiary
Translation differences
Offshore
interest and
Accelerated
dividend
tax
depreciation
S$ Mil
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 March 2009
(288.7)
(5.1)
(26.7)
(320.5)
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
SingTel Annual Report 2009/2010
135
Deferred
sale and
leaseback
income
S$ Mil
0.9
(0.1)
0.8
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
-
-
-
Provisions
S$ Mil
0.3
0.2
0.5
Accelerated
tax
depreciation
S$ Mil
(190.1)
4.6
(185.5)
Provisions
S$ Mil
0.3
-
0.3
Accelerated
tax
depreciation
S$ Mil
(197.6)
7.5
(190.1)
Others
S$ Mil
2.2
(0.7)
1.5
Offshore
interest and
dividend not
remitted
S$ Mil
-
-
-
Others
S$ Mil
2.5
(0.3)
2.2
Offshore
interest and
dividend not
remitted
S$ Mil
(40.9)
40.9
Total
S$ Mil
3.4
(0.6)
2.8
Total
S$ Mil
(190.1)
4.6
(185.5)
Total
S$ Mil
4.0
(0.6)
3.4
Total
S$ Mil
(238.5)
48.4
-
(190.1)
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
12.2 Deferred Taxes (cont’d)
Company - 2010
Deferred tax assets
Balance as at 1 April 2009
Credited/ (Charged) to income statement
Balance as at 31 March 2010
Company - 2010
Deferred tax liabilities
Balance as at 1 April 2009
Credited to income statement
Balance as at 31 March 2010
Company - 2009
Deferred tax assets
Balance as at 1 April 2008
Charged to income statement
Balance as at 31 March 2009
Company - 2009
Deferred tax liabilities
Balance as at 1 April 2008
Credited to income statement
Balance as at 31 March 2009
Notes:
(1) TWDV – Tax written down value
(2) NBV – Net book value
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
136
Singapore Telecommunications Limited and Subsidiary Companies
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
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 statements of financial position as follows -
Deferred tax assets
Deferred tax liabilities
Group
Company
2010
S$ Mil
890.3
(294.8)
2009
S$ Mil
806.4
(307.9)
2010
S$ Mil
-
(182.8)
2009
S$ Mil
-
(186.7)
595.5
498.5
(182.8)
(186.7)
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 2010, the subsidiaries of the Group had estimated unutilised income tax losses of approximately S$272 million
(2009: S$328 million), including S$187 million (2009: S$248 million) from the Optus Group, unutilised capital tax losses of
S$26 million (2009: S$21 million) and unabsorbed capital allowances of approximately S$2.1 million (2009: S$1.5 million).
These unutilised income tax losses and unabsorbed capital allowances are available for set-off against future taxable profits,
subject to the agreement of the relevant tax authorities and compliance with certain provisions of the income tax regulations
of the respective countries in which the subsidiaries operate. The unutilised capital tax losses are available for set-off against
future capital gains of a similar nature subject to compliance with certain statutory tests in Australia.
As at the end of the reporting period, the potential tax benefits arising from the following items were not recognised in the
financial statements due to uncertainty on their recoverability -
Unutilised income tax losses and unabsorbed capital allowances
Unutilised capital tax losses
Group
2009
S$ Mil
81.8
21.3
2010
S$ Mil
87.4
25.9
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
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
Weighted average number of ordinary shares for calculation of
diluted earnings per share
Note:
(1) Adjusted to exclude the number of performance shares held by the Trust.
SingTel Annual Report 2009/2010
137
Group
2010
'000
2009
'000
15,918,280
7,055
44,379
15,911,823
9,136
43,515
15,969,714
15,964,474
‘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 if the potential dilutive ordinary shares arising from the share options and performance shares granted
by the Group were issued. Adjustment is made to earnings for the dilutive effect arising from the associated and joint venture
companies’ dilutive shares.
138
Singapore Telecommunications Limited and Subsidiary Companies
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
14.
RELATED PARTY TRANSACTIO NS
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 –
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
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
Information technology
Associated and joint venture companies
Telecommunications
Transmission capacity
Postal
Due from related parties
Due to related parties
All the above transactions were on normal commercial terms and conditions and market rates.
Please refer to Note 5.2 for information on key management personnel compensation.
Group
2010
S$ Mil
2009
S$ Mil
129.5
30.0
15.7
123.2
29.8
25.2
34.0
30.0
71.4
76.5
3.1
68.3
7.3
10.9
19.0
5.6
62.4
83.2
-
106.0
4.5
11.8
22.0
5.2
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
15.
CASH AND CASH EQUIVALENTS
Fixed deposits
Cash and bank balances
SingTel Annual Report 2009/2010
139
Group
Company
2010
S$ Mil
1,175.9
437.7
2009
S$ Mil
506.9
569.1
2010
S$ Mil
142.0
59.3
2009
S$ Mil
258.1
75.0
1,613.6
1,076.0
201.3
333.1
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 bank balances
Less: Bank overdrafts (see Note 30)
2010
S$ Mil
1,175.9
437.7
(0.1)
Group
2009
S$ Mil
506.9
569.1
(0.2)
1,613.5
1,075.8
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
2010
S$ Mil
200.9
14.2
5.6
6.9
2010
S$ Mil
1,170.9
5.0
Group
Company
2009
S$ Mil
65.1
157.9
11.0
3.8
2010
S$ Mil
150.3
13.9
1.1
4.6
Group
Company
2009
S$ Mil
503.3
3.6
2010
S$ Mil
142.0
-
2009
S$ Mil
14.7
157.6
3.5
2.1
2009
S$ Mil
258.1
-
1,175.9
506.9
142.0
258.1
As at 31 March 2010, the weighted average effective interest rates of the fixed deposits of the Group and Company were 0.3
per cent (2009: 1.0 per cent) and 0.1 per cent (2009: 1.6 per cent) respectively.
The exposure of cash and cash equivalents to interest rate risks is disclosed in Note 37.3.
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
140
Singapore Telecommunications Limited and Subsidiary Companies
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
16.
TRADE AND OTHER RECEIVAB LE S
Trade receivables
Less: Allowance for impairment of
trade receivables
Group
Company
2010
S$ Mil
2009
S$ Mil
2010
S$ Mil
2009
S$ Mil
2,720.4
2,294.0
464.2
453.9
(294.8)
2,425.6
(260.6)
2,033.4
(88.5)
375.7
(82.8)
371.1
Other receivables
187.5
112.5
22.9
18.2
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
Amount due from associated company
on fibre rollout
Loan to joint venture company
Interest receivable
Prepayments
Staff loans
Others
-
-
-
-
-
-
-
5.6
7.8
13.4
207.8
1.4
105.6
216.6
1.3
12.9
-
-
-
-
-
-
-
13.0
91.6
104.6
-
2.3
111.0
155.4
1.0
11.7
143.3
162.9
(24.1)
119.2
486.9
2,182.1
(45.7)
2,623.3
1.5
-
1.5
207.8
1.4
77.5
18.0
0.1
5.1
(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
The loans to subsidiaries and the balances with subsidiaries, associated and joint venture companies were unsecured,
interest-free and repayable on demand.
3,172.1
2,531.9
3,452.5
1,359.4
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
16.
TRADE AND OTHER RECEIVAB LE S (cont’d)
SingTel Annual Report 2009/2010
141
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 2010, the assessment of damages hearing has not taken place, hence no receivable has been recorded
in the financial statements.
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
2010
S$ Mil
2009
S$ Mil
629.4
1,796.2
502.2
1,531.2
2010
S$ Mil
173.1
202.6
2009
S$ Mil
155.0
216.1
2,425.6
2,033.4
375.7
371.1
The age analysis of trade receivables before allowance for impairment is as follows -
Not past due or less than 60 days overdue
Past due
- 61 to 120 days
- more than 120 days
Group
Company
2010
S$ Mil
2009
S$ Mil
2010
S$ Mil
2009
S$ Mil
2,299.7
1,929.5
344.2
336.4
190.7
230.0
164.8
199.7
31.1
88.9
38.2
79.3
2,720.4
2,294.0
464.2
453.9
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.
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
142
Singapore Telecommunications Limited and Subsidiary Companies
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
16.
TRADE AND OTHER RECEIVAB LE S (cont’d)
The movement in the allowance for impairment of trade receivables is as follows -
Balance as at 1 April
Acquisition of subsidiary
Allowance for impairment
Utilisation
Write-back
Translation differences
Group
Company
2010
S$ Mil
260.6
-
142.0
(142.1)
(3.9)
38.2
2009
S$ Mil
283.0
3.7
130.0
(121.0)
(2.3)
(32.8)
2010
S$ Mil
82.8
-
26.9
(21.2)
-
-
2009
S$ Mil
95.7
-
25.2
(38.1)
-
-
Balance as at 31 March
294.8
260.6
88.5
82.8
The movement in the allowance for impairment of loans to subsidiaries is as follows -
Balance as at 1 April
Write-back
Balance as at 31 March
Company
2010
S$ Mil
24.2
(0.1)
2009
S$ Mil
24.2
-
24.1
24.2
17.
FINANCIAL ASSETS AT FAIR VA LUE T HR OUG H P RO F IT O R LO SS ( “F V TP L INV E S TME NTS ” )
Quoted interest bearing securities
SGD denominated Bonds and Notes
Quoted other investments
USD denominated Investment Funds
Group
2010
S$ Mil
2009
S$ Mil
-
10.2
-
-
0.6
10.8
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
SingTel Annual Report 2009/2010
143
17.
FINANCIAL ASSETS AT FAIR VA LUE TH RO U GH P R OFI T O R LO SS (“ F V TP L I NV E STM E NTS ”) (cont’d)
The effective interest rates at the end of the reporting period were as follows -
Quoted interest bearing securities
Fixed rate maturing in less than 1 year
18.
INVENTORIES
Equipment held for resale
Maintenance and capital works' inventories
Work-in-progress
- fibre rollout
- others
Group
2010
%
2009
%
-
5.1
Group
Company
2010
S$ Mil
191.1
33.2
118.9
2.6
121.5
2009
S$ Mil
132.8
36.1
-
4.5
4.5
2010
S$ Mil
-
32.9
118.9
-
118.9
2009
S$ Mil
-
35.4
-
-
-
345.8
173.4
151.8
35.4
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
144
Singapore Telecommunications Limited and Subsidiary Companies
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
19.
PROPERTY, PLA NT AND EQUIPMENT
Group - 2010
Cost
Balance as at 1 April 2009
Additions (net of rebates)
Disposals/ Write-offs
Reclassifications /
Adjustments
Translation differences
Balance as at
31 March 2010
Freehold Leasehold
plant and
Switching
plant and work-in-
Transmission
Other
Capital
land
S$ Mil
22.1
-
-
-
4.9
land Buildings
equipment equipment equipment
progress
S$ Mil
S$ Mil
S$ Mil
S$ Mil
S$ Mil
S$ Mil
Total
S$ Mil
259.3
-
-
642.9
2.6
(0.2)
13,031.5
382.5
(56.8)
2,906.9
110.5
(337.6)
4,771.0
146.7
(106.4)
643.8
1,524.7
-
22,277.5
2,167.0
(501.0)
-
(1.3)
1.8
33.8
1,453.4
2,144.8
18.5
247.8
140.6
756.4
(1,703.0)
52.6
(88.7)
3,239.0
27.0
258.0
680.9
16,955.4
2,946.1
5,708.3
518.1
27,093.8
Accumulated depreciation
Balance as at 1 April 2009
Depreciation charge for
the year
Disposals/ Write-offs
Translation differences
-
-
-
-
46.4
249.2
7,527.3
2,081.2
3,224.4
- 13,128.5
4.2
-
(0.6)
18.1
-
8.1
1,173.1
(53.8)
1,176.8
150.8
(333.2)
143.1
472.3
(84.3)
514.2
-
-
-
1,818.5
(471.3)
1,841.6
Balance as at
31 March 2010
-
50.0
275.4
9,823.4
2,041.9
4,126.6
- 16,317.3
Accumulated impairment
Balance as at 1 April 2009
Impairment charge for
the year
Disposals
Translation differences
-
-
-
-
2.0
7.3
2.7
4.4
10.0
-
-
-
-
-
-
5.8
-
-
3.1
(2.4)
0.1
-
(6.7)
-
-
-
-
-
26.4
8.9
(9.1)
0.1
Balance as at
31 March 2010
Net Book Value as at
31 March 2010
-
2.0
7.3
8.5
5.2
3.3
-
26.3
27.0
206.0
398.2
7,123.5
899.0
1,578.4
518.1
10,750.2
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
19.
PROPERTY, PLA NT AND EQUIPMENT (cont’d)
SingTel Annual Report 2009/2010
145
Transmission
Other
Capital
Freehold Leasehold
plant and
Switching
plant and work-in-
land
S$ Mil
land Buildings
equipment equipment equipment
progress
S$ Mil
S$ Mil
S$ Mil
S$ Mil
S$ Mil
S$ Mil
Total
S$ Mil
Group - 2009
Cost
Balance as at 1 April 2008
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 March 2009
Accumulated depreciation
Balance as at 1 April 2008
Depreciation charge for
the year
Disposals/ Write-offs
Reclassifications /
Adjustments
Translation differences
Balance as at
31 March 2009
Accumulated impairment
Balance as at 1 April 2008
Impairment charge for
the year
Write-back during
the year
Disposals
Translation differences
Balance as at
31 March 2009
Net Book Value as at
31 March 2009
22.1
259.3
642.9
13,031.5
2,906.9
4,771.0
643.8
22,277.5
-
-
-
-
-
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)
-
-
1,685.8
(288.3)
1.3
(926.7)
-
(123.3)
(1.3)
(419.3)
-
-
-
(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
-
-
-
-
-
-
-
-
-
3.4
0.1
-
(3.9)
-
-
(3.1)
0.1
(10.8)
(0.3)
0.1
-
-
-
-
-
40.8
3.5
(10.8)
(7.3)
0.2
-
2.0
7.3
2.7
4.4
10.0
-
26.4
22.1
210.9
386.4
5,501.5
821.3
1,536.6
643.8
9,122.6
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
146
Singapore Telecommunications Limited and Subsidiary Companies
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
19.
PROPERTY, PLA NT AND EQUIPMENT (cont’d)
Transmission
Other
Capital
Freehold
Leasehold
plant and
Switching
plant and work-in-
land
S$ Mil
land Buildings
equipment equipment equipment
progress
S$ Mil
S$ Mil
S$ Mil
S$ Mil
S$ Mil
S$ Mil
Total
S$ Mil
Company - 2010
Cost
Balance as at 1 April 2009
Additions (net of rebates)
Disposals/ Write-offs
Reclassifications
0.4
-
-
-
220.5
-
-
-
421.9
2.6
-
-
2,859.2
219.5
(51.2)
-
1,068.4
30.6
(27.3)
-
956.6
71.0
(32.1)
-
284.5
5.5
-
(82.8)
5,811.5
329.2
(110.6)
(82.8)
Balance as at 31 March 2010
0.4
220.5
424.5
3,027.5
1,071.7
995.5
207.2
5,947.3
Accumulated depreciation
Balance as at 1 April 2009
Depreciation charge for
the year
Disposals/ Write-offs
Balance as at 31 March 2010
Accumulated impairment
Balance as at 1 April 2009
Disposals/ Write-offs
Balance as at 31 March 2010
Net Book Value as at
31 March 2010
-
-
-
-
-
-
-
38.5
186.9
1,913.8
955.0
737.5
-
3,831.7
2.3
-
11.9
-
176.6
(48.6)
46.2
(27.3)
74.8
(29.9)
-
-
311.8
(105.8)
40.8
198.8
2,041.8
973.9
782.4
-
4,037.7
2.0
-
7.2
-
1.2
5.8
-
1.2
1.3
(0.9)
2.0
7.2
7.0
1.2
0.4
-
-
-
11.7
6.1
17.8
0.4
177.7
218.5
978.7
96.6
212.7
207.2
1,891.8
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
19.
PROPERTY, PLA NT AND EQUIPMENT (cont’d)
Freehold
land
Leasehold
land Buildings
Transmission
plant and
Switching
equipment equipment equipment
Other
Capital
plant and work-in-
progress
Company - 2009
S$ Mil
S$ Mil
S$ Mil
S$ Mil
S$ Mil
S$ Mil
S$ Mil
Total
S$ Mil
SingTel Annual Report 2009/2010
147
Cost
Balance as at 1 April 2008
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 March 2009
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 April 2008
Depreciation charge for
the year
Disposals/ Write-offs
Balance as at 31 March 2009
Accumulated impairment
Balance as at 1 April 2008
Disposals/ Write-offs
Balance as at 31 March 2009
Net Book Value as at
31 March 2009
-
-
-
-
-
-
-
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
-
2.0
7.2
3.3
(2.1)
1.2
3.0
(3.0)
1.5
(0.2)
-
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
Property, plant and equipment included the following -
Group
2010
S$ Mil
2009
S$ Mil
Company
2010
S$ Mil
2009
S$ Mil
Net book value of property, plant and equipment
- Finance lease obligations
- Held for generating operating lease income
Interest charges capitalised during the year
51.8
9.5
7.2
18.7
11.8
11.7
-
-
-
-
-
-
Staff costs capitalised during the year
175.3
149.6
11.8
15.0
In the current financial year, an impairment charge of S$8.9 million (2009: S$3.5 million) was made at the Group on certain
property, plant and equipment to bring their carrying values to their recoverable values.
148
Singapore Telecommunications Limited and Subsidiary Companies
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
20.
INTANGIBLE ASSETS
Group
Company
Goodwill on acquisition of subsidiaries
Telecommunications and spectrum licences
Customer relationships and others
20. 1 Goodwill on Acquisition of Subsidiarie s
2010
S$ Mil
9,654.6
517.8
27.8
2009
S$ Mil
9,620.0
373.4
34.0
10,200.2
10,027.4
Balance as at 1 April
Acquisition of subsidiary
Translation differences
Balance as at 31 March
20. 2 Telecommunications and Spe ctrum Licen ces
Balance as at 1 April
Additions
Amortisation for the year
Reclassifications
Translation differences
Group
2009
S$ Mil
476.2
3.7
(47.0)
3.4
(62.9)
2010
S$ Mil
373.4
127.7
(56.5)
5.9
67.3
Balance as at 31 March
517.8
373.4
Cost
Accumulated amortisation
Accumulated impairment
933.2
(413.1)
(2.3)
673.5
(297.8)
(2.3)
Net book value as at 31 March
517.8
373.4
2010
S$ Mil
2009
S$ Mil
-
2.3
-
2.3
-
2.7
-
2.7
2010
S$ Mil
9,620.0
-
34.6
Group
2009
S$ Mil
9,569.1
82.2
(31.3)
9,654.6
9,620.0
Company
2010
S$ Mil
2009
S$ Mil
2.7
-
(0.4)
-
-
2.3
8.4
(6.1)
-
2.3
3.0
-
(0.3)
-
-
2.7
8.4
(5.7)
-
2.7
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
20.3 Customer Relationships and Ot hers
Balance as at 1 April
Acquisition of subsidiary
Amortisation for the year
Translation differences
Balance as at 31 March
Cost
Accumulated amortisation
SingTel Annual Report 2009/2010
149
Group
2010
S$ Mil
34.0
-
(7.8)
1.6
27.8
52.7
(24.9)
2009
S$ Mil
11.2
30.2
(5.8)
(1.6)
34.0
48.7
(14.7)
Net book value as at 31 March
27.8
34.0
21.
SUBSIDIARIES
Unquoted equity shares, at cost
Shareholders' advances
Deemed investment in a subsidiary
Less: Allowance for impairment losses
Company
2010
S$ Mil
2009
S$ Mil
7,305.4
3,283.4
42.0
10,630.8
(688.5)
8,601.7
3,792.5
24.1
12,418.3
(619.6)
9,942.3
11,798.7
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 end of the reporting period was 0.6 per cent (2009: 1.1 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$1.28 billion (2009: S$1.54 billion) entered into by SGT as at 31
March 2010.
The details of subsidiaries are set out in Note 46.
150
Singapore Telecommunications Limited and Subsidiary Companies
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
22.
ASSOCIATED COMPANIE S
Group
Company
Quoted equity shares, at cost
Unquoted equity shares, at cost
Shareholder's loan (unsecured)
Goodwill on consolidation adjusted
against shareholders' equity
Share of post acquisition reserves
(net of dividends, and accumulated
amortisation of goodwill and intangible)
Translation differences
Less: Allowance for impairment losses
(see Note 24.2)
As at 31 March 2010,
2010
S$ Mil
74.3
1,440.3
1.7
1,516.3
2009
S$ Mil
74.3
1,421.7
1.7
1,497.7
(28.3)
(28.3)
(224.5)
(393.0)
(645.8)
(179.6)
(288.8)
(496.7)
(591.7)
(331.7)
2010
S$ Mil
24.7
-
-
24.7
-
-
-
-
-
2009
S$ Mil
24.7
-
-
24.7
-
-
-
-
-
278.8
669.3
24.7
24.7
(i)
The market values of the quoted equity shares in associated companies held by the Group and Company were
S$532.5 million (2009: S$386.9 million) and S$518.7 million (2009: S$382.9 million) respectively.
(ii)
The Group’s shares representing 26% equity interest in an associated company were under a negative lien.
(iii)
The Group’s proportionate interest in the capital commitments of the associated companies was S$76.8 million
(2009: S$118.1 million).
The details of associated companies are set out in Note 46.
The summarised financial information of associated companies were as follows –
Operating revenue
Net profit/ (loss) after tax
Total assets
Total liabilities
Group
2010
S$ Mil
2009
S$ Mil
1,293.2
1,207.8
20.7
(222.2)
4,529.6
3,987.4
(2,968.5)
(2,271.2)
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
23.
JOINT V ENTURE COMPANIES
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)
As at 31 March 2010,
SingTel Annual Report 2009/2010
151
Group
Company
2010
S$ Mil
2,388.1
3,748.1
6,136.2
2009
S$ Mil
2,388.1
3,069.8
5,457.9
(1,225.9)
(1,225.9)
5,979.1
(726.7)
4,026.5
4,887.3
(1,099.4)
2,562.0
(30.0)
(30.0)
2010
S$ Mil
-
34.1
34.1
-
-
-
-
-
10,132.7
7,989.9
34.1
2009
S$ Mil
-
34.1
34.1
-
-
-
-
(4.2)
29.9
(i)
(ii)
(iii)
The market value of the quoted equity shares in joint venture companies held by the Group was S$10.03 billion
(2009: S$9.46 billion).
The Group’s proportionate interest in the capital commitments of joint venture companies was S$875.9 million
(2009: S$1.20 billion).
The Group’s shares representing 24.8% equity interest in a joint venture company are placed in an escrow
account under a deed of undertaking whereby under certain events of default, the joint venture partner could be
entitled to these shares.
The details of joint venture companies are set out in Note 46.
On 30 March 2010, Bharti, a 32.0%-owned joint venture of the Group, entered into a definitive agreement with the Zain Group
to acquire Zain Africa BV’s African mobile operations in 15 countries. The transaction is pending completion and subject to
certain conditions precedent.
Optus holds a 31.25% (2009: 31.25% 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 certain 3G network sites and radio infrastructure
across Australia whereby it holds an interest of 50% (2009: 50%) in the assets, with access to the shared network and shares
50% (2009: 50%) 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$319.3 million (2009: S$284.3 million).
152
Singapore Telecommunications Limited and Subsidiary Companies
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
23.
JOINT V ENTURE COMPANIES (cont’d)
The Group’s share of certain items in the income statements and statements of financial position of the joint venture
companies were as follows –
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
Operating revenue
Operating expenses
Net profit before tax
Net profit after tax
Non-current assets
Current assets
Current liabilities
Non-current liabilities
Net assets
Group
2010
S$ Mil
2009
S$ Mil
6,200.6
5,925.0
(3,012.0)
(3,006.3)
2,410.3
2,298.8
1,874.8
1,872.2
10,398.0
1,970.7
(2,575.4)
(2,458.7)
8,903.2
1,744.8
(2,364.6)
(2,278.9)
7,334.6
6,004.5
24.
IMPAIRMENT RE VIEWS
24. 1 Goodwill aris ing on acquisitio n of s ubs idia ries
The carrying values of the Group’s goodwill on acquisition of subsidiaries as at 31 March 2010 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
Carrying value of goodwill in -
- Optus Group
2010
S$ Mil
2009
S$ Mil
Terminal growth
rate (1)
Pre-tax
discount rate
2010
2009
2010
2009
9,572.4
9,537.8
4.0%
4.0%
12.1%
10.9%
- SCS Computer Systems Pte Ltd
82.2
82.2
2.0%
2.0%
10.0%
8.3%
Note:
(1) Weighted average growth rate used to extrapolate cash flows beyond the terminal year.
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
SingTel Annual Report 2009/2010
153
24.1 Goodwill aris ing on acquisitio n of s u bs idia ries (cont’d)
The recoverable values of cash generating units including goodwill are determined based on value-in-use calculations.
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 periods of four to five years. 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 2010, 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 goo dwil l ) o f a sso c ia te d a n d jo in t ven tu re co mp an ie s
The Group’s carrying values in Warid Telecom (Private) Limited (“Warid”) and Pacific Bangladesh Telecom Limited (“PBTL”)
as at 31 March 2010 were assessed for impairment.
Group
2010
S$ Mil
2009
S$ Mil
Terminal growth
rate (1)
Pre-tax
discount rate
2010
2009
2010
2009
Carrying value (including goodwill) in -
Warid and PBTL
Less: Allowance for
impairment losses
796.5
966.2
(590.0)
(330.0)
206.5
636.2
5.5%
to 8%
5.5%
to 8%
12.4%
to 17.4%
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 five to ten years.
For the year ended 31 March 2010, an additional impairment provision of S$260 million was recorded on the carrying value
of Warid. The lower value-in-use arose from the increased cost of debt, as well as lower expected earnings. In the previous
financial year ended 31 March 2009, impairment provisions of S$300 million and S$30 million were recorded on the carrying
values of Warid and PBTL respectively.
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
154
Singapore Telecommunications Limited and Subsidiary Companies
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
25.
AVAIL ABLE-FO R-SALE (“AFS”) INVE S TM E NTS
Balance as at 1 April
Additions
Disposals
Write-back of provision/ (Provision for impairment)
Net fair value gains/ (losses) included in
other comprehensive income
Group
Company
2010
S$ Mil
236.3
0.3
(6.4)
4.1
2009
S$ Mil
352.6
1.8
(2.8)
(0.1)
2010
S$ Mil
24.6
-
-
-
2009
S$ Mil
37.0
-
(2.5)
-
21.5
(115.2)
6.5
(9.9)
Balance as at 31 March
255.8
236.3
31.1
24.6
AFS investments included the following –
Quoted equity securities
- Taiwan
- Thailand
- Singapore and United States
Unquoted
Equity securities - Singapore and United States
Others
Quoted equity securities
- Thailand
- Singapore and United States
Unquoted equity securities
- Singapore
Group
2010
S$ Mil
2009
S$ Mil
217.0
12.2
8.9
238.1
13.8
3.9
17.7
202.9
9.2
5.8
217.9
13.9
4.5
18.4
255.8
236.3
Company
2010
S$ Mil
2009
S$ Mil
12.2
8.8
21.0
10.1
31.1
9.2
5.6
14.8
9.8
24.6
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
26.
DERIVATIVE FINAN CIAL INSTR UMEN T S
Balance as at 1 April
Fair value (losses)/ gains
- included in income statement
- included in 'Hedging Reserve'
- included in 'Currency Translation Reserve'
Settlement of swap for bonds repaid
Translation differences
SingTel Annual Report 2009/2010
155
Group
Company
2010
S$ Mil
2009
S$ Mil
2010
S$ Mil
2009
S$ Mil
(144.6)
(1,136.4)
(54.6)
(749.6)
(540.3)
(157.6)
(190.7)
-
(19.7)
458.2
263.7
66.7
137.3
65.9
(736.3)
72.1
-
-
-
531.9
25.8
-
137.3
-
Balance as at 31 March
(1,052.9)
(144.6)
(718.8)
(54.6)
Disclosed as -
Current asset
Non-current asset
Current liability
Non-current liability
12.8
175.6
(300.2)
(941.1)
1.5
461.3
(44.2)
(563.2)
12.8
182.7
(14.4)
(899.9)
1.5
461.3
(12.6)
(504.8)
(1,052.9)
(144.6)
(718.8)
(54.6)
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
156
Singapore Telecommunications Limited and Subsidiary Companies
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
26. 1 Fair Values
The fair values of the currency and interest rate swap contracts excluded the accrued interest of S$33.6 million (2009: S$49.4
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 -
2010
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
* Denotes amount less than S$50,000.
Group
Company
Fair value adjustments
Fair value adjustments
Assets
S$ Mil
Liabilities
S$ Mil
Assets
S$ Mil
Liabilities
S$ Mil
-
187.8
11.8
-
(12.3)
1.1
(94.0)
-
4.5
1,271.2
25.9
15.9
-
-
-
-
17.8
*
-
187.8
11.8
-
(9.9)
1.1
-
4.7
-
(94.0)
-
0.6
762.2
13.4
10.0
197.2
24.9
-
188.4
1,241.3
195.5
914.3
12.8
175.6
300.2
941.1
12.8
182.7
14.4
899.9
188.4
1,241.3
195.5
914.3
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
26.1 Fair Values (cont’d)
SingTel Annual Report 2009/2010
157
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
Company
Fair value adjustments
Fair value adjustments
Assets
S$ Mil
Liabilities
S$ Mil
Assets
S$ Mil
Liabilities
S$ Mil
172.5
268.8
1.5
53.6
(33.6)
-
-
-
-
(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
462.8
44.2
563.2
607.4
1.5
461.3
462.8
12.6
504.8
517.4
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 2011, 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.
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
158
Singapore Telecommunications Limited and Subsidiary Companies
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
26. 1 Fair Values (cont’d)
As at 31 March 2010, the details of the outstanding derivative financial instruments were as follows -
Group
Company
2010
2009
2010
2009
Interest rate swaps
Notional principal (S$ million equivalent)
Fixed interest rates
Floating interest rates
5,737.5
1.8% to 7.7%
0.4% to 5.7%
5,214.6
2.0% to 7.7%
3.2% to 5.5%
5,382.1
1.8% to 3.9%
0.4% to 2.3%
4,713.5
2.0% to 3.9%
3.9% to 5.5%
Cross currency swaps
Notional principal (S$ million equivalent)
Fixed interest rates
Floating interest rates
5,193.5
3.9% to 8.0%
2.0% to 6.3%
4,910.4
3.9% to 8.1%
2.3% to 4.7%
3,649.7
3.9% to 5.2%
2.0% to 2.8%
3,679.8
3.9% to 5.2%
2.3% to 3.1%
Forward foreign exchange
Notional principal (S$ million equivalent)
1,359.3
729.5
1,020.1
413.7
The interest rate swaps entered into by the Group are re-priced at intervals ranging from monthly to six-monthly periods.
The interest rate swaps entered by the Company are re-priced every six months.
26. 2 Fair Value Measurements
The Group classifies fair value measurements using a fair value hierarchy which reflects the significance of the inputs used
in making the measurements. The fair value hierarchy has the following levels -
(a)
quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1);
(b)
inputs other than quoted prices included within Level 1 which are observable for the asset or liability, either directly
(i.e. as prices) or indirectly (i.e. derived from prices) (Level 2); and
(c)
inputs for the asset or liability which are not based on observable market data (unobservable inputs) (Level 3).
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
26.2 Fair Value Measure ments (cont’d)
SingTel Annual Report 2009/2010
159
The following table presents the assets and liabilities measured at fair value as at 31 March 2010 -
Group
2010
Financial assets
AFS investments (Note 25)
- Quoted equity securities
- Unquoted
Level 1
S$ Mil
Level 2
S$ Mil
Level 3
S$ Mil
Total
S$ Mil
238.1
-
238.1
-
-
-
-
17.7
17.7
238.1
17.7
255.8
Derivative financial instruments (Note 26)
-
188.4
-
188.4
238.1
188.4
17.7
444.2
Financial liabilities
Purchase consideration payable
- Current (Note 28)
- Non-current (Note 33)
Derivative financial instruments (Note 26)
-
-
-
-
-
-
-
-
487.5
144.6
632.1
487.5
144.6
632.1
1,241.3
-
1,241.3
1,241.3
632.1
1,873.4
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
160
Singapore Telecommunications Limited and Subsidiary Companies
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
26. 2 Fair Value Measure ments (cont’d)
Company
2010
Level 1
S$ Mil
Level 2
S$ Mil
Level 3
S$ Mil
Total
S$ Mil
Financial assets
AFS investments (Note 25)
- Quoted equity securities
- Unquoted equity securities
21.0
-
21.0
-
-
-
-
10.1
10.1
21.0
10.1
31.1
Derivative financial instruments (Note 26)
-
195.5
-
195.5
21.0
195.5
10.1
226.6
Financial liabilities
Purchase consideration payable
- Current (Note 28)
- Non-current (Note 33)
Derivative financial instruments (Note 26)
-
-
-
-
-
-
-
-
487.5
144.6
632.1
487.5
144.6
632.1
914.3
-
914.3
914.3
632.1
1,546.4
See Note 2.7 for the policies on fair value estimation of the financial assets and liabilities.
The fair values of the unquoted equity securities in AFS investments included within Level 3 were estimated using the net
asset values as reported in the statements of financial position in the management reports of the AFS investments.
The fair value estimation of the purchase consideration payable is as disclosed in Note 3.6.
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
SingTel Annual Report 2009/2010
161
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
26.2 Fair Value Measure ments (cont’d)
The following table presents the reconciliation for the unquoted equity securities in AFS investments measured at fair value
based on unobservable inputs (Level 3) -
AFS investments - unquoted
Balance as at 1 April
Total gains included in other comprehensive income
Additions
Disposals
Balance as at 31 March
27.
OTHER NO N-CURRE NT RECEIVA B LES
Prepayments
Loan to joint venture company
Other receivables
Group
2010
S$ Mil
Company
2010
S$ Mil
18.4
1.1
0.2
(2.0)
9.8
0.3
-
-
17.7
10.1
Group
Company
2010
S$ Mil
89.6
9.4
24.6
2009
S$ Mil
118.7
-
29.2
2010
S$ Mil
158.4
-
0.1
2009
S$ Mil
104.5
-
0.2
123.6
147.9
158.5
104.7
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
162
Singapore Telecommunications Limited and Subsidiary Companies
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
28.
TRADE AND OTHER PAYABLES
Trade payables
Advance billings
Accruals
Interest payables
Due to subsidiaries
- trade
- non-trade
Due to associated and joint venture
companies (trade)
Deferred income (see Note 32)
- Deferred gain on sale of a joint venture
company
- Financial guarantee contracts
Customers' deposits
Other deferred income
Purchase consideration payable
Other payables
Group
Company
2010
S$ Mil
2009
S$ Mil
2,515.2
600.9
654.4
183.9
1,955.6
467.5
507.1
186.1
-
-
-
-
-
-
2010
S$ Mil
566.5
74.7
94.3
140.1
309.2
213.9
523.1
2009
S$ Mil
485.5
69.7
85.8
140.0
138.5
107.8
246.3
53.2
37.5
47.3
33.2
3.1
-
3.1
21.6
19.9
487.5
110.1
3.1
-
3.1
21.4
13.6
-
75.6
-
3.2
3.2
11.5
5.1
487.5
46.3
-
4.8
4.8
11.6
5.5
-
48.3
4,649.8
3,267.5
1,999.6
1,130.7
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.
The purchase consideration payable of S$487.5 million (2009: Nil) represents the current payable in respect of the Group’s
purchase of an additional 1.5% effective equity interest in Bharti in November 2009. The non-current payable is shown in
Note 33. The total amount payable is subject to a minimum and maximum purchase consideration to be finalised based on
the prevailing Bharti share price in May 2011, in accordance with the terms of the share purchase agreement. As at 31 March
2010, as required by FRS 39, Financial Instruments: Recognition and Measurement, the Group assessed and recorded the
fair value of the purchase consideration using a discounted cash flow model based on the same methodology described in
Note 24.1, with post-tax discount rate of 10.6% and terminal growth rate of 4%. The Group will reassess the fair value of the
purchase consideration payable at the end of each reporting period and at settlement date with any fair value adjustment
taken to the income statement.
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
SingTel Annual Report 2009/2010
163
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
29. PROVISION
The provision mainly relates to provision for liquidated damages and warranties. The movements were as follows -
Balance as at 1 April
Acquisition of subsidiary
Provision
Amount written off against provision
Balance as at 31 March
30.
BORROWINGS (UNSE CURED)
Current
Bonds
Bank loans
Bank overdraft
Non-current
Bonds
Bank loans
Group
2009
S$ Mil
12.7
2.2
3.5
(1.6)
16.8
2010
S$ Mil
16.8
-
2.5
(1.4)
17.9
Group
Company
2010
S$ Mil
2009
S$ Mil
2010
S$ Mil
2009
S$ Mil
577.6
935.4
0.1
542.2
885.0
0.2
1,513.1
1,427.4
-
-
-
-
-
-
-
-
4,496.8
831.1
5,004.3
1,043.2
3,809.1
-
4,353.2
-
5,327.9
6,047.5
3,809.1
4,353.2
Total unsecured borrowings
6,841.0
7,474.9
3,809.1
4,353.2
164
Singapore Telecommunications Limited and Subsidiary Companies
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
30. 1 Bonds
Principal
amount
US$345 million (1)
US$393.8 million (1)
US$1,350 million (2) (3)
US$500 million (1) (2)
US$500 million (2) (3)
500 million (2) (3)
A$62.6 million
Classified as -
Current
Non-current
Notes:
Fixed
interest
rate
%
8.13
8.00
6.38
4.63
7.38
6.00
6.82
Maturity
2009
2010
2011
2019
2031
2011
2011
Group
2010
S$ Mil
2009
S$ Mil
Company
2010
S$ Mil
2009
S$ Mil
-
559.9
2,024.0
687.7
791.2
529.6
636.4
2,251.7
-
1,024.2
-
-
2,024.0
-
791.2
-
-
2,251.7
-
1,024.2
993.9
1,077.3
993.9
1,077.3
17.7
27.3
-
-
5,074.4
5,546.5
3,809.1
4,353.2
577.6
4,496.8
542.2
5,004.3
-
3,809.1
-
4,353.2
5,074.4
5,546.5
3,809.1
4,353.2
(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.
(3) On 4 January 2010, the bonds were delisted from the Luxembourg Stock Exchange.
30. 2 Bank Loans
Current
Non-current
Group
2009
S$ Mil
885.0
1,043.2
2010
S$ Mil
935.4
831.1
1,766.5
1,928.2
As at 31 March 2010, A$375 million (2009: A$375 million) had been drawn down under various loan facilities totalling A$975
million with maturity between April to September 2012.
As at 31 March 2010, S$1.28 billion (2009: S$1.54 billion) had been drawn down under various loan facilities of approximately
S$3 billion with maturity between August 2010 to November 2013.
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
SingTel Annual Report 2009/2010
165
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
30.3 Maturity
The maturity periods of the non-current unsecured borrowings at the end of the reporting period were as follows -
Between one and two years
Between two and five years
Over five years
30.4
Interest Rates
Group
Company
2010
S$ Mil
3,017.9
831.1
1,478.9
2009
S$ Mil
951.1
4,072.2
1,024.2
2010
S$ Mil
2009
S$ Mil
3,017.9
-
791.2
-
3,329.0
1,024.2
5,327.9
6,047.5
3,809.1
4,353.2
The weighted average effective interest rates at the end of the reporting period were as follows -
Bonds
Bank loans
30.5 Fair Values
Carrying value
Bonds
Bank loans
Fair value
Bonds
Bank loans
Group
Company
2010
%
6.4
2.5
2009
%
6.8
2.4
2010
%
6.5
-
2009
%
6.5
-
Group
Company
2010
S$ Mil
2009
S$ Mil
2010
S$ Mil
2009
S$ Mil
5,074.4
1,766.5
5,546.5
1,928.2
3,809.1
-
4,353.2
-
5,183.7
1,776.0
5,296.4
1,940.4
3,918.4
-
4,103.1
-
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.
166
Singapore Telecommunications Limited and Subsidiary Companies
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
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 statement of financial position.
Group
As at 31 March 2010
Net-settled interest rate swaps
Borrowings
Less than
Between
Between
Over
1 year
S$ Mil
1 and 2 years
2 and 5 years
5 years
Adjustments
S$ Mil
S$ Mil
S$ Mil
S$ Mil
Total
S$ Mil
462.3
1,586.3
170.2
3,585.9
122.9
933.7
563.2
1,743.4
(1,318.6)
(1,008.3)
-
6,841.0
2,048.6
3,756.1
1,056.6
2,306.6
(2,326.9)
6,841.0
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
Company
As at 31 March 2010
Net-settled interest rate swaps
Borrowings
Financial guarantee
contracts (Note 32)
As at 31 March 2009
Net-settled interest rate swaps
Borrowings
Financial guarantee
contracts (Note 32)
1,668.7
1,162.5
4,255.5
1,424.7
(1,036.5)
7,474.9
Less than
Between
Between
Over
1 year
S$ Mil
1 and 2 years
2 and 5 years
5 years
Adjustments
S$ Mil
S$ Mil
S$ Mil
S$ Mil
Total
S$ Mil
160.4
-
143.7
3,528.6
61.3
-
474.0
881.2
(839.4)
(600.7)
-
3,809.1
0.5
-
9.0
-
-
9.5
160.9
3,672.3
70.3
1,355.2
(1,440.1)
3,818.6
160.4
-
156.8
-
177.1
3,335.2
543.5
881.2
(1,037.8)
136.8
-
4,353.2
1.8
1.6
8.9
-
-
12.3
162.2
158.4
3,521.2
1,424.7
(901.0)
4,365.5
The maximum amount that the Company can be called on under the financial guarantee contract if the full guaranteed
amount is claimed by the counterparty to the guarantee is as disclosed in Note 41(a)(ii).
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
SingTel Annual Report 2009/2010
167
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
31.
BORROWINGS (SECURED)
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
31.2
Interest Rates
Group
2010
S$ Mil
2009
S$ Mil
17.1
24.8
41.9
(3.8)
38.1
14.9
23.2
38.1
7.4
14.8
22.2
(2.1)
20.1
6.4
13.7
20.1
The weighted average effective interest rates per annum at the end of the reporting period were as follows -
Finance lease liabilities
31.3 Fair Values
Carrying value
Finance lease liabilities
Fair value
Finance lease liabilities
Group
2010
%
2009
%
10.0
10.7
Group
2010
S$ Mil
2009
S$ Mil
38.1
20.1
38.1
20.1
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.
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
168
Singapore Telecommunications Limited and Subsidiary Companies
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
32.
DEFERRED INCOME
Gain on sale and leaseback arrangements
Balance as at 1 April
Amount recognised as income
during the year
Balance as at 31 March
Deferred gain on sale of a joint
venture company
Balance as at 1 April
Amount recognised as income
during the year
Balance as at 31 March
Financial guarantee contracts
Balance as at 1 April
Amount deferred during the year
Amount recognised as income
during the year
Balance as at 31 March
Classified as -
Current (see Note 28)
Non-current
Group
Company
2010
S$ Mil
2009
S$ Mil
2010
S$ Mil
2009
S$ Mil
11.3
(1.7)
9.6
26.0
(3.1)
22.9
-
-
-
-
14.1
(2.8)
11.3
29.1
(3.1)
26.0
-
-
-
-
5.3
(0.9)
4.4
-
-
-
12.3
17.8
(20.6)
9.5
32.5
37.3
13.9
3.1
29.4
32.5
3.1
34.2
37.3
3.2
10.7
13.9
6.8
(1.5)
5.3
-
-
-
5.3
12.6
(5.6)
12.3
17.6
4.8
12.8
17.6
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.
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
33.
OTHER NO N-CURRE NT LIABILITIE S
Performance share liability
Other deferred income
Other payables, including purchase
consideration payable (see Note 28)
34.
SHARE CAPITAL
Group and Company
SingTel Annual Report 2009/2010
169
Group
Company
2010
S$ Mil
8.7
13.9
2009
S$ Mil
4.4
20.2
2010
S$ Mil
6.5
-
333.1
128.3
149.3
355.7
152.9
155.8
2009
S$ Mil
2.8
-
6.4
9.2
2010
2009
Number of
shares
Mil
Share
capital
S$ Mil
Number of
shares
Mil
Share
capital
S$ Mil
Balance as at 1 April
Issue of shares under share options
15,926.8
5.4
2,605.6
10.7
15,920.8
6.0
2,593.7
11.9
Balance as at 31 March
15,932.2
2,616.3
15,926.8
2,605.6
All issued shares are fully paid.
During the year, the Company issued 5,391,400 (2009: 6,050,600) shares upon the exercise of 5,391,400 (2009: 6,050,600)
share options under the 1999 Scheme at exercise prices between S$1.41 and S$2.85 (2009: S$1.41 and S$2.85) per share.
The newly issued shares rank pari passu in all respects with the previously issued shares.
Capital Management
The Group is committed to an optimal capital structure while maintaining financial flexibility and investment grade credit
ratings. In order to achieve an optimal capital structure, the Group may adjust the amount of dividend payment, return capital
to shareholders, issue new shares, buy back issued shares, obtain new borrowings or reduce its borrowings.
The Group monitors capital based on gross and net gearing ratios, and the dividend payout ratio target ranges from 45% to
60% of its underlying net profit, defined as net profit before exceptional items and exchange differences on capital reductions
of certain overseas subsidiaries, as well as significant exceptional items of the associated and joint venture companies.
From time to time, the Group purchases its own shares from the market. The shares purchased are primarily for delivery to
employees upon vesting of performance shares awarded under the Group’s performance share plans. The Group can also
cancel the shares which are re-purchased from the market.
There were no changes in the Group’s approach to capital management during the financial year.
The Company and its subsidiaries are not subject to any externally imposed capital requirement.
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
170
Singapore Telecommunications Limited and Subsidiary Companies
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
35.
DIVIDENDS
Final dividend of 6.9 cents (2009: 6.9 cents)
(one-tier tax exempt) per share, paid
Interim dividend of 6.2 cents (2009: 5.6 cents)
(one-tier tax exempt) per share, paid
Group
2010
S$ Mil
2009
S$ Mil
Company
2010
S$ Mil
2009
S$ Mil
1,097.0
1,098.1
1,097.4
1,098.8
987.0
891.3
987.5
892.1
2,084.0
1,989.4
2,084.9
1,990.9
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 2009, and an interim one-tier exempt ordinary dividend of 6.2 cents per share was paid in respect of the
financial year ended 31 March 2010.
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 8.0 cents per share totalling approximately S$1.27
billion in respect of the financial year ended 31 March 2010 for approval at the forthcoming Annual General Meeting.
These financial statements do not reflect the final dividend payable of approximately S$1.27 billion, which will be accounted
for in the shareholders’ equity as an appropriation of ‘Retained Earnings’ in the next financial year ending 31 March 2011.
36.
FAIR VALUES OF FINANCIAL A SS E TS A N D L IA BIL IT I E 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 MAN AG EMENT OBJ ECT I V ES A ND P O LI C IE S
37.1 Financial Ris k 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. No financial derivatives are held or sold for speculative purposes.
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.
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
SingTel Annual Report 2009/2010
171
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
37.2 Foreign Exchange Risk
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. Translation 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 the translation risk of the Group’s investment in Australia. As at
31 March 2010, 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$31.8 million (2009: S$26.0 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, Hong Kong Dollar, Indian Rupee, Indonesian Rupiah, Philippine Peso, Pound Sterling, Thai Baht,
United States Dollar and Japanese Yen.
Foreign currency purchases and forward currency contracts are used to reduce the Group’s transactional exposure to foreign
currency exchange rate fluctuations. The foreign exchange difference on trade balances is disclosed under Note 6 and the
exchange difference on non-trade balances is disclosed under Note 10.
37.3
Interest Rate Risk
The Group has cash balances placed with reputable banks and financial institutions 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 2010, after taking
into account the effect of interest rate swaps, approximately 67% (2009: 59%) of the Group’s borrowings were at fixed rates
of interest.
As at 31 March 2010, 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$13.4
million (2009: S$14.2 million).
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
172
Singapore Telecommunications Limited and Subsidiary Companies
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
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.
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
38.
SEGMENT INFORMATION
SingTel Annual Report 2009/2010
173
Segment information is presented based on the information reviewed by the chief operating decision maker for performance
measurement and resource allocation.
The Group’s reportable segments are as follows -
Singapore – represent the services and products provided by SingTel and its subsidiaries (excluding Optus).
Australia – represent the services and products provided by Optus, a wholly-owned subsidiary of the Group domiciled
in Australia.
Associates & Joint Ventures (“Assoc & JV”) – represent the Group’s investments in associated and joint venture companies
which mainly comprise Advanced Info Service Public Company Limited (“AIS”) in Thailand, Bharti in India, Globe Telecom,
Inc. (“Globe”) in the Philippines, and PT Telekomunikasi Selular (“Telkomsel”) in Indonesia.
The main services and products provided by both Singapore and Australia are mobile communications, data and Internet,
national telephone, information technology and engineering, sale of equipment, international telephone and pay television.
The accounting policies used to derive the reportable operating segment results are consistent with those described in the
“Significant Accounting Policies” note to the financial statements.
Segment results represent operating revenue less expenses. Corporate costs represent the allocated costs of the Group
function not allocated to the reportable operating segments.
Segment assets represent assets directly managed by each segment, and primarily include receivables, property, plant
and equipment and inventories. Corporate held-assets managed at corporate level include cash and bank balances, fixed
deposits and AFS investments.
Segment capital expenditure comprise additions to property, plant and equipment and intangible assets.
The comparative figures for the previous financial year ended 31 March 2009 were restated to be consistent with the current
year’s presentation.
The Group’s revenue from its major products and services are disclosed in Note 4.
The Group has a large and diversified customer base which consists of individuals and corporations. There was no
single customer that contributed 10% or more of the Group’s revenue for the financial years ended 31 March 2010 and
31 March 2009.
174
Singapore Telecommunications Limited and Subsidiary Companies
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
38.
SEGMENT INFORMATION (cont’d)
Group
2010
Singapore
S$ Mil
Australia Assoc & JV
S$ Mil
S$ Mil
Elim
S$ Mil
Segment
Total
S$ Mil
Corp
S$ Mil
Group
Total
S$ Mil
Operating revenue
5,995.0
10,875.9
Segment results
Other income
Profit/ (Loss) before
exceptional items
1,734.2
40.5
1,212.2
51.1
1,774.7
1,263.3
-
-
-
-
-
16,870.9
-
16,870.9
-
-
2,946.4
91.6
(72.5)
3.1
2,873.9
94.7
-
3,038.0
(69.4)
2,968.6
Exceptional items
(5.0)
-
(260.0)
-
(265.0)
269.7
4.7
Profit/ (Loss) on operating activities
1,769.7
1,263.3
(260.0)
-
2,773.0
200.3
2,973.3
Share of results of associated
and joint venture companies
- Bharti
- Telkomsel
- Globe
- AIS
- Others
Profit before interest,
investment income (net) and tax
Interest and investment
income (net)
Finance costs
-
-
-
-
-
-
-
-
-
-
-
-
834.8
681.5
164.5
148.1
33.2
1,862.1
-
-
-
-
-
-
834.8
681.5
164.5
148.1
33.2
1,862.1
-
-
-
-
-
-
834.8
681.5
164.5
148.1
33.2
1,862.1
1,769.7
1,263.3
1,602.1
-
4,635.1
200.3
4,835.4
-
-
22.3
(109.1)
-
-
-
-
22.3
(109.1)
(30.7)
(216.8)
(8.4)
(325.9)
Profit/ (Loss) before tax
1,769.7
1,176.5
1,602.1
-
4,548.3
(47.2)
4,501.1
Segment assets
Investment in associated and
joint venture companies
- Bharti
- Telkomsel
- Globe
- AIS
- Others
Goodwill on acquisition
of subsidiaries
Other assets
-
-
-
-
-
-
-
-
-
-
-
-
4,951.5
3,231.9
1,049.0
656.8
522.3
10,411.5
-
-
-
-
-
-
4,951.5
3,231.9
1,049.0
656.8
522.3
10,411.5
-
-
-
-
-
-
4,951.5
3,231.9
1,049.0
656.8
522.3
10,411.5
82.2
4,706.4
9,572.4
13,938.9
-
-
-
(2,938.3)
9,654.6
15,707.0
-
2,178.4
9,654.6
17,885.4
4,788.6
23,511.3
10,411.5
(2,938.3)
35,773.1
2,178.4
37,951.5
Capital expenditure
722.0
1,572.7
Depreciation and amortisation
(518.2)
(1,359.8)
Impairment of property, plant
and equipment
Impairment of AFS investments
Impairment of associated company
(8.9)
-
-
-
-
-
-
-
-
-
(260.0)
-
2,294.7
-
2,294.7
-
(1,878.0)
-
(1,878.0)
-
-
-
(8.9)
-
(8.9)
-
(60.9)
(60.9)
(260.0)
-
(260.0)
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
SingTel Annual Report 2009/2010
175
38.
SEGMENT INFORMATION (cont’d)
Group
2009
Singapore
S$ Mil
Australia Assoc & JV
S$ Mil
S$ Mil
Elim
S$ Mil
Segment
Total
S$ Mil
Corp
S$ Mil
Group
Total
S$ Mil
Operating revenue
5,547.4
9,387.0
Segment results
Other income
Profit/ (Loss) before
exceptional items
1,657.8
27.9
1,014.2
50.3
1,685.7
1,064.5
-
-
-
-
-
14,934.4
-
14,934.4
-
-
2,672.0
78.2
(65.6)
13.9
2,606.4
92.1
-
2,750.2
(51.7)
2,698.5
Exceptional items
7.3
-
(330.0)
-
(322.7)
87.0
(235.7)
Profit/ (Loss) on operating activities
1,693.0
1,064.5
(330.0)
-
2,427.5
35.3
2,462.8
Share of results of associated
and joint venture companies
- Bharti
- Telkomsel
- Globe
- AIS
- Others
Profit before interest,
investment income (net) and tax
Interest and investment
income (net)
Finance costs
-
-
-
-
-
-
-
-
-
-
-
-
1,032.5
516.9
171.9
134.8
(60.0)
1,796.1
-
-
-
-
-
-
1,032.5
516.9
171.9
134.8
(60.0)
1,796.1
-
-
-
-
-
-
1,032.5
516.9
171.9
134.8
(60.0)
1,796.1
1,693.0
1,064.5
1,466.1
-
4,223.6
35.3
4,258.9
-
-
12.4
(150.9)
-
-
-
-
12.4
(150.9)
36.1
(209.8)
48.5
(360.7)
Profit/ (Loss) before tax
1,693.0
926.0
1,466.1
-
4,085.1
(138.4)
3,946.7
Segment assets
Investment in associated and
joint venture companies
- Bharti
- Telkomsel
- Globe
- AIS
- Others
Goodwill on acquisition
of subsidiaries
Other assets
-
-
-
-
-
-
-
-
-
-
-
-
3,279.4
2,773.2
1,129.0
580.4
897.2
8,659.2
-
-
-
-
-
-
3,279.4
2,773.2
1,129.0
580.4
897.2
8,659.2
-
-
-
-
-
-
3,279.4
2,773.2
1,129.0
580.4
897.2
8,659.2
82.2
4,218.9
9,537.8
10,482.8
-
-
-
(1,665.8)
9,620.0
13,035.9
-
1,939.6
9,620.0
14,975.5
4,301.1
20,020.6
8,659.2
(1,665.8)
31,315.1
1,939.6
33,254.7
Capital expenditure
640.9
1,248.5
Depreciation and amortisation
(476.1)
(1,256.6)
-
-
-
-
1,889.4
-
1,889.4
-
(1,732.7)
-
(1,732.7)
-
(3.5)
-
(3.5)
(3.5)
-
Impairment of property, plant
and equipment
Impairment of associated
and joint venture companies
-
-
(330.0)
-
(330.0)
-
(330.0)
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
176
Singapore Telecommunications Limited and Subsidiary Companies
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
39.
OPERATING LEASE CO MMITMENT S
The future aggregate minimum lease payments under non-cancellable operating leases contracted for at the end of the
reporting period 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
2010
S$ Mil
453.8
1,394.6
1,385.5
2009
S$ Mil
424.0
1,211.0
1,134.2
2010
S$ Mil
158.6
215.6
515.8
2009
S$ Mil
89.8
152.7
336.6
3,233.9
2,769.2
890.0
579.1
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 and 18 January 2010. The above commitments included the minimum amounts payable of
S$37.8 million (2009: S$24.4 million) per annum under those contracts. The operating lease payments under these contracts
are subject to review every year with a general increase not exceeding the higher of 2 per cent or Consumer Price Index
percentage of the preceding year.
40.
COMMIT MENTS
40.1 The commitments for capital and operating expenditures, and investments which had not been recognised in the
financial statements, excluding the commitments shown under Note 40.2, were as follows -
Group
2010
S$ Mil
2009
S$ Mil
Company
2010
S$ Mil
2009
S$ Mil
Authorised and contracted for
928.7
763.0
105.3
105.5
The above included equity funding commitments for an associated company of US$66 million (S$92 million) (2009:
US$75 million) and commitments to purchase capacity in the cable network of a joint venture company of A$57 million
(S$73 million) (2009: Nil).
40.2 As at 31 March 2010, the Group’s commitments for the purchase of broadcasting program rights were S$602.6
million (2009: S$211.9 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 the end of the reporting period. A third-party had agreed to reimburse the Group for
A$2.2 million (S$2.8 million) (2009: A$3.2 million) of certain relevant commitments.
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
SingTel Annual Report 2009/2010
177
41.
CONT INGENT LIABILITIE S
(a)
Guarantees
As at 31 March 2010,
(i)
(ii)
The Group and Company provided bankers’ and other guarantees, and insurance bonds of S$687.6 million and
S$435.5 million (31 March 2009: S$226.9 million and S$19.2 million) respectively.
The Company provided guarantees for loans totalling S$1.28 billion (2009: S$1.54 billion) drawn down under various
loan facilities entered into by SGT with maturity between August 2010 and November 2013. SGT made early repayment
of loans totalling S$930 million in April 2010.
(iii)
The Company provided a guarantee for US$94 million (S$132 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 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
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.
1
2
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.
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.
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
178
Singapore Telecommunications Limited and Subsidiary Companies
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
41.
CONT INGENT LIABILITIE S (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)
On 20 May 2009, SingTel and SingTel Mobile filed an application to the Indonesian Supreme Court for civil review of the
Supreme Court decision. On 9 June 2009, KPPU applied to the Central Jakarta District Court to enforce the Supreme Court
Decision. Both applications are understood to be pending.
SingTel and SingTel Mobile will continue to take all necessary steps to protect their interests.
In December 2007, a class action suit has been filed in Indonesia, in the Tangerang District Court 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 suit 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.
The Tangerang class action remains at a preliminary phase. 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 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 appealed the
judgement. Optus is vigorously defending the appeal.
(d)
Other commercial disputes
Optus (and certain subsidiaries) is in dispute with third parties regarding certain transactions and/ or representations arising
out of 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.
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
SingTel Annual Report 2009/2010
179
42.
SIGNIFICANT DISP UTE S AT JOI NT VE NT UR E C OM PA NIE S
(a)
In January 2008, TOT Public Company Limited and CAT Telecom Public Company Limited demanded additional payments
of revenue share from AIS and its subsidiary, Digital Phone Company Limited (“DPC”) respectively. The Group holds an
equity interest of 21.3% 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, a 32.0%-owned joint venture of the Group, has received demands amounting to Rs 2,289 million (SingTel’s equity
share: S$23 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.
SUBSEQUENT EVENT
On 8 April 2010, SGT completed a S$600 million Note issue maturing in 2020 with a semi-annual coupon of 3.4875% per
annum. The Note issue is guaranteed by the Company and listed on the Singapore Exchange on 9 April 2010.
44.
COMPARATIVE FIGURES
The foreign exchange gain, net of hedging, from capital reduction of subsidiary in the previous financial year had
been reclassified from ‘Interest and investment income (net)’ to ‘Exceptional items’ to be consistent with the current
year’s presentation.
Exceptional items
- as previously reported
- effects of change
- restated
Interest and investment income (net)
- as previously reported
- effects of change
- restated
Group
2009
S$ Mil
(319.6)
83.9
(235.7)
132.4
(83.9)
48.5
180
Singapore Telecommunications Limited and Subsidiary Companies
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
45.
EFFECTS OF FR S AND IN T FRS ISS UE D B UT NOT YET E F F E CTIV E
Certain new or revised FRS and INT FRS are mandatory for adoption by the Group for financial period beginning on
1 April 2010.
In particular, FRS 103 (revised) – Business Combinations, introduces changes to the accounting for business combinations,
and FRS 27 (revised) – Consolidated and Separate Financial Statements, requires changes in the ownership interest of a
subsidiary, while maintaining control, to be accounted for as an equity transaction. These changes will be applied prospectively
for transactions after the date of adoption of the standards.
The other 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.
46.
COMPANIE S IN TH E GROUP
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 2010 and
31 March 2009.
46. 1 Significant subsidiaries incorporated in S in ga pore
Name of subsidiary
Principal activities
Percentage of effective
equity interest held by the Group
1.
C2C Asiapac Pte Ltd
Provision of administrative, technical and
advisory services
2.
CVSI Pte Ltd
3.
NCS Communications
Engineering Pte. Ltd.
Provision of service support of computer
hardware & software and other information
technology related services
Provision of facilities management and
consultancy services, and distributor of
specialised telecommunications and data
communication products
2010
%
100
2009
%
100
100
100
100
100
4.
NCS Pte. Ltd.
Provision of information technology and
consultancy services
100
100
5.
6.
NCSI Solutions Pte. Ltd.
Provision of information technology services
SCS Computer Systems Pte. Ltd.
Provision of information technology and
consultancy services
100
100
100
100
7.
NCSI Holdings Pte. Ltd.
Investment holding
100
100
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
SingTel Annual Report 2009/2010
181
46.1 Significa nt subsidiaries incorporated in S in ga p ore (cont’d)
Name of subsidiary
Principal activities
Percentage of effective
equity interest held by the Group
8.
9.
Computer Systems Holdings Pte Ltd Investment holding
Singapore Telecom Mobile Pte Ltd Operation and provision of cellular mobile
telecommunications systems and services,
resale of fixed line and broadband services
and investment holding
10.
Singapore Telecom Paging Pte Ltd Investment holding
11.
SingNet Pte Ltd
Provision of internet access services
12.
Singapore Telecom International
Pte Ltd
Holding of strategic investments and provision
of technical and management consultancy
services
2010
%
100
100
100
100
100
2009
%
100
100
100
100
100
13.
SingTel Group Treasury Pte. Ltd. Provision of finance and treasury services to
100
100
SingTel and its subsidiaries
14.
SingTel Investments Private Limited Portfolio investment holding company
15.
SingTel Ventures (Singapore)
Private Limited
Venture capital investments in start-
up technology and telecommunications
companies
100
100
100
100
16.
SingTelSat Pte Ltd
Provision of satellite capacity for
telecommunications and video broadcasting
services
100
100
17.
SingTel Asia Pacific Investments
Pte. Ltd.
Investment holding and provision of
consultancy services
18.
ST-2 Satellite Ventures Private
Limited
Provision of satellite capacity for
telecommunications and video broadcasting
services
100
100
61.9
61.9
19.
Subsea Network Services Pte Ltd Ownership and chartering of barges and
100
100
provision of storage facilities for submarine
cables and related equipment
20.
Sembawang Cable Depot Pte Ltd
Provision of storage facilities for submarine
cables and related equipment
60
60
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
182
Singapore Telecommunications Limited and Subsidiary Companies
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
46. 1 Significant subsidiaries incorporated in S in ga po re (cont’d)
Name of subsidiary
Principal activities
21.
SingTel Digital Media Pte Ltd
Development and management of on-line
internet portal
Percentage of effective
equity interest held by the Group
2010
%
100
2009
%
100
22.
Telecom Equipment Pte Ltd
Engaged in the sale and maintenance of
telecommunications equipment
100
100
46. 2 Significant subsidiaries incorporated in A u stral ia
Name of subsidiary
Principal activities
Percentage of effective
equity interest held by the Group
1.
2.
3.
4.
5.
Alphawest Services Pty Ltd (1)
Provision of information technology services
Cable & Wireless Optus Satellites
C1 Satellite contracting party
Pty Limited (1)
Inform Systems Australia Pty Ltd (1) Provision of information technology services
NCSI (Australia) Pty Limited
Provision of information technology services
Optus Administration Pty Limited (1) Provision of management services to the
Optus Group
6.
Optus Backbone Investments Pty
Limited
Investment in telecommunications network
infrastructure in Australia
2010
%
100
100
100
100
100
100
2009
%
100
100
100
100
100
-
7.
Optus Billing Services Pty Limited (*) Provision of billing services to the Optus
100
100
Group
8.
Optus Broadband Pty Limited (1)
Provision of high speed residential internet
service
100
100
9.
Optus Data Centres Pty Limited (1)
Provision of data communication services
10.
Optus Finance Pty Limited (1)
Provision of financial services to the Optus
Group
100
100
100
100
11.
Optus Insurance Services Pty
Limited
Provision of handset insurance and related
services
100
100
12.
Optus Internet Pty Limited (1)
Provision of internet services to retail customers
100
100
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
SingTel Annual Report 2009/2010
183
46.2 Significa nt subsidiaries incorporated in A u st ra lia (cont’d)
Name of subsidiary
Principal activities
Percentage of effective
equity interest held by the Group
13.
Optus Mobile Pty Limited (1)
Provision of mobile phone services
14.
Optus Narrowband Pty Limited (*)
Provision of narrow band portal content
services
15.
Optus Networks Investments
Pty Ltd (*) (1)
Bidding company for the National
Broadband Network in Australia
16.
Optus Networks Pty Limited (1)
Provision of telecommunications services
17.
Optus Rental & Leasing Pty
Limited (*)
Provision of equipment rental services to
customers
18.
Optus Stockco Pty Limited (*)
Purchases of Optus Group network
inventory
2010
%
100
100
2009
%
100
100
100
100
100
100
100
100
100
100
19.
Optus Superannuation Pty Limited (*) A trustee for Optus Group’s superannuation
scheme
100
100
20.
Optus Systems Pty Limited (1)
Provision of information technology services
to the Optus Group
100
100
21.
Optus Vision Interactive Pty
Limited (*)
Provision of interactive television service
100
100
22.
Optus Vision Media Pty Limited (*) (2)
Provision of broadcasting related services
23.
Optus Vision Pty Limited (1)
Provision of telecommunications services
24.
Perpetual Systems Pty Ltd (1)
Provision of IT disaster recovery services
25.
Prepaid Services Pty Limited (1)
Distribution of prepaid mobile products
26.
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
27.
Singapore Telecom Australia
Investments Pty Limited
Investment holding company
100
100
28.
Simplus Mobile Pty Limited (1)
Provision of mobile phone services
29.
SingTel Optus Pty Limited
Investment holding company
100
100
100
100
184
Singapore Telecommunications Limited and Subsidiary Companies
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
46. 2 Significant subsidiaries incorporated in A u stral ia (cont’d)
Name of subsidiary
Principal activities
Percentage of effective
equity interest held by the Group
30.
Source Integrated Networks Pty
Limited (1)
Provision of data communications and
network services
31.
Uecomm Operations Pty Limited (1)
Provision of data communication services
32.
Virgin Mobile (Australia) Pty Limited (1) Provision of mobile phone services
33.
XYZed LMDS Pty Limited (*)
Holder of telecommunications licence
34.
XYZed Pty Limited (1)
Provision of telecommunications services
2010
%
100
100
100
100
100
2009
%
100
100
100
100
100
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.
46. 3 Significant subsidiaries incorporated o u ts ide S in ga po re a n d Au stra l ia
Name of subsidiary
Principal activities
Country of
incorporation
Percentage of effective
equity interest held by
the Group
2010
%
2009
%
1.
GB21 (Hong Kong)
Limited
Provision of telecommunications services and
products
Hong Kong
100
100
2.
Guangzhou Zhong
Provision of information technology training
Sheng Information
Technology Co., Ltd. (**) (1)
People’s
Republic of
China
100
100
3.
4.
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
5.
NCSI Information
Technology (Suzhou)
Co., Ltd. (**) (1)
Software development and provision of
information technology services
People’s
Republic of
China
100
100
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
SingTel Annual Report 2009/2010
185
46.3 Significa nt subsidiaries incorporated ou t sid e Sin g ap o re a n d A u stral ia (cont’d)
Name of subsidiary
Principal activities
Country of
incorporation
6.
NCSI (Chengdu) Co.,
Ltd (**) (1)
Provision of information technology research
and development, and other information
technology related services
People’s
Republic of
China
Percentage of effective
equity interest held by
the Group
2010
%
2009
%
100
100
7.
NCSI (HK) Limited
Provision of information technology services
Hong Kong
100
100
8.
NCSI (India) Private
Provision of information technology services
India
100
100
Limited
9.
NCSI (Korea) Co.,
Limited
Provision of information technology
consultancy and system integration services
South Korea
100
100
10.
NCSI Lanka (Private)
Limited
Provision of information technology and
communication engineering services
Sri Lanka
100
100
11.
NCSI (Malaysia) Sdn Bhd Provision of information technology services
Malaysia
12.
NCSI (ME) W.L .L.
Provision of information technology and
communication engineering services
Bahrain
100
100
100
100
13.
NCSI (Philippines) Inc. Provision of information technology and
Philippines
100
100
communication engineering services
14.
NCSI (Shanghai), Co.
Ltd (**) (1)
Provision of system integration, software
research and development and other
information technology-related services
15.
Shanghai Zhong
Sheng Information
Technology Co., Ltd. (1)
Provision of information technology training
and software resale
People’s
Republic of
China
People’s
Republic of
China
100
100
100
100
16.
NCSI Holdings
Investment holding
Malaysia
100
100
(Malaysia) Sdn. Bhd.
17.
SingTel Global Private
Limited
Provision of infotainment products and
services, and investment holding
Mauritius
100
100
18.
SingTel Global India
Private Limited
Provision of telecommunications services and
all related activities
India
74
74
186
Singapore Telecommunications Limited and Subsidiary Companies
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
46. 3 Significant subsidiaries incorporated o u ts ide S in ga po re a n d Au stra l ia (cont’d)
Name of subsidiary
Principal activities
Country of
incorporation
Percentage of effective
equity interest held by
the Group
2010
%
2009
%
19.
Singapore Telecom Hong Kong
Limited
Provision of telecommunications
services and all related activities
Hong Kong
100
100
20.
Singapore Telecom India
Private Limited
Engaged in general liaison and
support services
India
100
100
21.
Singapore Telecom Japan
Co Ltd
Provision of telecommunications
services and all related activities
Japan
100
100
22.
Singapore Telecom Korea
Limited
Provision of telecommunications
services and all related activities
South Korea
100
100
23.
Singapore Telecom USA, Inc. (*) Provision of telecommunications,
USA
100
100
engineering and marketing services
24.
SingTel Australia Investment
Investment holding company
Ltd (*)
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.
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
46.4 Associated companies held by t he Gro u p
Name of associated company
Principal activities
SingTel Annual Report 2009/2010
187
Country of
incorporation
Percentage of effective
equity interest held by
the Group
2010
%
2009
%
1.
2.
ADSB Telecommunications B.V. Dormant
Netherlands
25.6
25.6
APT Satellite Holdings
Investment holding company
Bermuda
20.3
20.3
Limited (1)
3.
APT Satellite International
Investment holding company
Company Limited (1)
Ayala Systems Technology,
Inc (2)
Sale, distribution, installation and
maintenance of computer equipment
and related products
British Virgin
Islands
28.6
28.6
Philippines
-
30.0
Infoserve Technology Corp.
Dormant
Cayman Islands
25.0
25.0
OpenNet Pte. Ltd. (3)
To design, build and operate the
passive infrastructure for Singapore’s
Next Generation National Broadband
Network
Singapore
29.9
29.9
4
5.
6.
7.
Singapore Post Limited (4)
Operation and provision of postal
services
Singapore
25.6
25.7
8.
Telescience Singapore Pte Ltd
Sale, distribution and installation of
telecommunications equipment
Singapore
50.0
50.0
9.
Viewers Choice Pte Ltd
Provision of services relating to
motor vehicle rental and retail of
general merchandise
Singapore
49.2
49.2
10.
Warid Telecom (Private)
Limited (5)
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
2009, the financial year-end of the company.
(2) The company had been classified as a subsidiary following SCS’ acquisition of an additional 21% equity interest during the financial
year.
(3) Audited by Ernst & Young LLP, Singapore.
(4) Audited by PricewaterhouseCoopers LLP, Singapore.
(5) Audited by A.F. Ferguson & Co. (a member firm of PricewaterhouseCoopers).
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
188
Singapore Telecommunications Limited and Subsidiary Companies
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
46. 5 Joint venture companies held by the Gro u p
Name of joint venture company
Principal activities
1.
Abacus Travel Systems
Pte Ltd
2.
Acasia Communications
Sdn Bhd (1)
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
Country of
incorporation
Percentage of effective
equity interest held by
the Group
2010
%
2009
%
Singapore
30.0
30.0
Malaysia
14.3
14.3
3.
ACPL Marine Pte Ltd
Owning, operating and managing of
maintenance-cum-laying cableships
Singapore
41.7
41.7
4.
Advanced Info Service Public
Company Limited (1) (2)
5.
ASEAN Cableship Pte Ltd
Provision of cellular, broadband and
international telecommunications
services, and call center and data
transmission
Operation of cableships for laying,
repair and maintenance of submarine
telecommunication cables
Thailand
21.3
21.4
Singapore
16.7
16.7
6.
ASEAN Telecom Holdings
Investment holding company
Malaysia
14.3
14.3
Sdn Bhd (1)
7.
8.
Asiacom Philippines, Inc. (1)
Investment holding company
Philippines
40.0
40.0
Bharti Telecom Limited (3) (4)
Investment holding company
India
36.2
32.8
9.
Bharti Airtel Limited (3) (4)
Provision of cellular, long
distance, broadband and telephony
telecommunication services,
enterprise solutions, pay television,
and passive infrastructure services
India
32.0
30.4
10.
Bridge Mobile Pte Ltd
Provision of regional mobile services
Singapore
33.6
33.4
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
Notes to the Financial Statements
Notes to the Financial Statements
For the financial year ended 31 March 2010
For the financial year ended 31 March 2010
46.5 Joint venture companies held by th e G rou p (cont’d)
Name of joint venture company
Principal activities
11.
Globe Telecom, Inc. (5)
Provision of cellular, broadband,
international and
fixed line telecommunications
services
SingTel Annual Report 2009/2010
189
Country of
incorporation
Percentage of effective
equity interest held by
the Group
2010
%
2009
%
Philippines
47.3
47.3
12.
Grid Communications
Pte Ltd (1)
Provision of public trunk radio
services
Singapore
50.0
50.0
13.
Indian Ocean Cableship
Pte Ltd
Leasing, operating and managing of
maintenance-cum-laying cableship
Singapore
50.0
50.0
14.
International Cableship
Pte Ltd
Ownership and chartering of
cableships
Singapore
45.0
45.0
15.
Main Event Television Pty
Limited
Provision of cable television
programmes
Australia
33.3
33.3
16.
OPEL Networks Pty Limited
Dormant
Australia
50.0
50.0
17.
Pacific Bangladesh Telecom
Limited (6)
Operation and provision of cellular
mobile telecommunications systems
and services
Bangladesh
45.0
45.0
18.
Pacific Carriage Holdings
Limited
Operation and provision of
telecommunications facilities and
services utilising a network of
submarine cable systems
Bermuda
40.0
40.0
19.
PT Telekomunikasi Selular (7)
Provision of cellular
telecommunications services
Indonesia
35.0
35.0
20.
Radiance Communications
Pte Ltd (1)
Sale, distribution, installation and
maintenance of telecommunications
equipment
Singapore
50.0
50.0
21.
Southern Cross Cables
Holdings Limited (8)
Operation and provision of
telecommunications facilities and
services utilising a network of
submarine cable systems
Bermuda
40.0
40.0
190
Singapore Telecommunications Limited and Subsidiary Companies
Notes to the Financial Statements
For the financial year ended 31 March 2010
46. 5 Joint venture companies held by the Gro u p (cont’d)
Name of joint venture company
Principal activities
22.
TeleTech Park Pte Ltd
Engaged in the business of
development, construction, operation
and management of TeleTech Park
Country of
incorporation
Percentage of effective
equity interest held by
the Group
2010
%
2009
%
Singapore
40.0
40.0
23.
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 2009, the financial year-end of the company.
(2) Audited by KPMG, Bangkok.
(3) Audited by S.R.Batliboi & Associates, New Delhi (a member firm of Ernst & Young).
(4) During the financial year, the Group increased its shareholding in Bharti Telecom Limited from 32.8% to 36.2%. Correspondingly,
the Group’s effective equity interest in Bharti Airtel Limited increased from 30.4% to 32.0%.
(5) Audited by SGV & Co. (a member firm of Ernst & Young).
(6) Audited by Hoda Vasi Chowdhury & Co (an independent correspondent firm of Deloitte Touche Tohmatsu).
(7) Audited by Tanudiredja Wibisana & Rekan (a member firm of PricewaterhouseCoopers).
(8) Audited by KPMG, Bermuda.
Interested Person Transactions
SingTel Annual Report 2009/2010
191
The aggregate value of all interested person transactions during the financial year ended 31 March 2010 (excluding transactions
less than S$100,000) were as follows -
Name of interested person
Aetos Security Management Pte Ltd
Capitaland Limited
CESMA International Pte Ltd
Global Crossing Australia Pty Limited
Grid Communications Pte Ltd
iShopAero Pte Ltd
MediaCorp Pte Ltd
Radiance Communications Pte Ltd
SembCorp Industries Limited
Singapore Airlines Ltd
Singapore Airport Terminal Services Ltd
Singapore Technologies Electronics Limited
Singapore Technologies Marine Ltd
SMRT Corporation Ltd
SMRT Engineering Pte Ltd
SMRT Taxis Pte Ltd
SPI Networks Pty Ltd
SP AusNet
SP PowerAssets Limited
SPT Networks Pty Ltd
StarHub Ltd
StarHub Cable Vision Ltd
StarHub Mobile Pte Ltd
ST Electronics (Info-Software Systems) Pte Ltd
ST Electronics (Satcom & Sensor Systems) Pte Ltd
Temasek Holdings (Private) Ltd
Trusted Source Pte Ltd
S$ mil
4.7
0.6
0.2
3.4
1.4
2.3
1.6
3.7
0.2
1.4
0.1
1.6
0.1
0.5
0.1
0.3
2.7
1.0
0.1
3.8
56.2
30.1
6.4
0.7
3.0
1.6
0.1
127.9
192
Singapore Telecommunications Limited and Subsidiary Companies
Shareholder Information
As at 31 May 2010
ORDINARY SHARES
Number of ordinary shareholders
Number of holders of CHESS Units of Foreign Securities relating to ordinary shares in the
Company (“CUFS”)
320,549
23,059
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
34,997,186*
* Deemed through interests of associated companies and/or subsidiaries.
MAJOR SHAREHOLDERS LIST - T OP 20
Name
Temasek Holdings (Pte) Ltd
Citibank Nominees Singapore Pte Ltd
DBSN Services Pte Ltd
DBS Nominees Pte Ltd
Central Provident Fund Board
Chess Depositary Nominees Pty Limited*
HSBC (Singapore) Nominees Pte Ltd
United Overseas Bank Nominees Pte Ltd
BNP Paribas Securities Services Singapore
Raffles Nominees (Pte) Ltd
DB Nominees (S) Pte Ltd
OCBC Nominees Singapore Private Limited
No.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13. Merrill Lynch (Singapore) Pte Ltd
TM Asia Life Singapore Ltd-Par Fund
14.
Royal Bank of Canada (Asia) Ltd
15.
UOB Kay Hian Pte Ltd
16.
Societe Generale Singapore Branch
17.
OCBC Securities Private Ltd
18.
19.
Phillip Securities Pte Ltd
20. Morgan Stanley Asia (Singapore)
No. of
shares held
8,671,325,982
1,408,043,523
1,358,684,147
1,222,627,031+
957,298,143
480,889,291
467,524,908
295,932,624
188,602,944
91,131,740
83,420,034
19,528,056
19,481,184
15,300,000
11,559,950
8,920,792
8,822,638
7,048,137
6,022,616
5,885,721
15,328,049,461
% of issued
share capital#
54.43
8.84
8.53
7.67
6.01
3.02
2.93
1.86
1.18
0.57
0.52
0.12
0.12
0.10
0.07
0.06
0.06
0.04
0.04
0.04
96.21
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 31 May 2010, excluding
1,805,919 ordinary shares held as treasury shares as at that date.
+ Excludes 1,805,919 ordinary shares held by DBS Nominees Pte Ltd as treasury shares for the account of the Company.
Shareholder Information
As at 31 May 2010
MAJOR CUFS HOLDERS LIST* - T OP 20
Name
National Nominees Limited
J P Morgan Nominees Australia Limited
HSBC Custody Nominees (Australia) Limited
Cogent Nominees Pty Limited
ANZ Nominees Limited (Cash Income A/C)
RBC Dexia Investor Services Australia Nominees Pty Limited
Citicorp Nominees Pty Limited
Citicorp Nominees Pty Limited (CFSIL CWLTH AUST SHS 1 A/C)
AMP Life Limited
UBS Nominees Pty Ltd
Australian Reward Investment Alliance
The Australian National University
No.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13. M F Custodians Ltd
14.
15. Mr Paul O'Sullivan
16.
17.
18. Mr Paul O'Sullivan
19. HSBC Custody Nominees (Australia) Limited (A/C 3)
Fortis Clearing Nominees P/L (Settlement A/C)
20.
Citicorp Nominees Pty Limited (CFSIL CWLTH AUST SHS 8 A/C)
Cogent Nominees Pty Limited (SMP ACCOUNTS)
RBC Dexia Investor Services Australia Nominees Pty Limited (BKCUST A/C)
SingTel Annual Report 2009/2010
193
No. of
CUFS held
149,206,210
101,461,182
49,701,366
20,628,457
13,246,658
13,127,015
9,163,846
7,520,000
6,522,445
3,463,397
3,310,892
3,000,000
2,742,588
2,313,000
2,094,342
1,981,205
1,896,988
1,708,664
1,441,507
1,174,148
395,703,910
% of issued
share capital#
0.94
0.64
0.31
0.13
0.08
0.08
0.06
0.05
0.04
0.02
0.02
0.02
0.02
0.01
0.01
0.01
0.01
0.01
0.01
0.01
2.48
* 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 31 May 2010, excluding
1,805,919 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
272,194
50,028
11,121
9,673
526
66
343,608
% of
holders
79.22
14.56
3.24
2.81
0.15
0.02
100.00
No. of
shares/CUFS
62,826,827
119,861,658
85,424,577
242,840,368
121,740,499
15,301,440,602
15,934,134,531
Number of holders holding less than a marketable parcel
% of issued
share capital
0.40
0.75
0.54
1.52
0.76
96.03
100.00
244,962
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 31 May 2010, approximately 45.32% 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 31 May 2010, excluding
1,805,919 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 31 May 2010, the number of ordinary shares held in treasury is 1,805,919, and the percentage of such holding against the total number of
issued ordinary shares (excluding ordinary shares held as treasury shares) is 0.01%.
SHARE PURCHASE MANDATE
At the Extraordinary General Meeting of the Company held on 24 July 2009 (“2009 EGM”), the shareholders approved the
renewal of a mandate to enable the Company to purchase or otherwise acquire not more than 10 per cent of the issued
ordinary share capital of the Company as at the date of the 2009 EGM. As at 31 May 2010, there is no current on-market
buy-back of shares pursuant to the mandate.
194
Singapore Telecommunications Limited and Subsidiary Companies
Corporate Information
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 4
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
Email: investor@singtel.com
BOARD OF DIRECTORS
Chumpol NaLamlieng (Chairman)
Chua Sock Koong (Group CEO)
Graham John Bradley AM*
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 AM*
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 AM*
Chua Sock Koong
Simon Israel
Nicky Tan Ng Kuang
* Member of the Order of Australia
SingTel Annual Report 2009/2010
195
Paris
24 Avenue Hoche
75008 Paris, France
Tel: +33 1 47 63 8999
Fax: +33 1 47 63 4476
Email: singtel-france@singtel.com
HONGKONG
Tsimshatsui
Suites 2002-6, Tower 6,
The Gateway, 9 Canton Road,
Tsimshatsui, Kowloon, Hong Kong
Tel: +852 2877 1500
Fax: +852 2802 1500
Email: singtel-hk@singtel.com
Shatin
Unit 19-30, 25/F
Corporation Park, 11 On Lai Street
Shatin, N.T, Hong Kong
Tel: +852 2929 5500
Fax: +852 2144 6162
Email: singtel-hk@singtel.com
Chai Wan
Room 901, 9F
Mega iAdvanture Building,
399 Chai Wan Road
Chai Wan, Hong Kong
Tel: +852 3105 1688
Fax: +852 3105 9888
Email: singtel-hk@singtel.com
INDIA
Bangalore
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
Chennai
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 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
Tel: +61 2 8082 7800
Fax: +61 2 8082 7100
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
Darwin
Optus Centre Darwin
49 Woods Street
Darwin, NT 0800, Australia
Tel: +61 8 8901 4500
Fax: +61 8 8901 4545
Melbourne
367 Collins Street
Melbourne, VIC 3000, Australia
Tel: +61 3 9233 4000
Fax: +61 3 9233 4900
Perth
Level 3, 1260 Hay Street
West Perth, WA 6005, Australia
Tel: +61 8 9288 3000
Fax: +61 8 9288 3030
BANGLADESH
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
CHINA
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
Guangzhou
Unit 117, 15F, West Tower, Fortune Plaza,
114-118 Tiyudong Rd,
Tianhe District, Guangzhou 510620
People’s Republic of China
Tel: +86 20 3886 0668 1171
Email: singtel-gz@singtel.com
Shanghai
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
EUROPE
Frankfurt
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
London
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
196
Singapore Telecommunications Limited and Subsidiary Companies
SingTel Contact Points
Hyderabad
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 Ext: 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
KOREA
Kolkatta
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
5th floor, A Wing, Statesman House
148 Barakhamba Road
New Delhi 110001, India
Tel: +91 11 4152 1199
Fax: +91 11 4152 1683
Email: singtel-ind@singtel.com
INDONESIA
Jakarta
Plaza Lippo
15th Floor, Suite 1505
Jalan Jenderal, Sudirman Kavling 25
Jakarta 12920, Indonesia
Tel: +62 21 526 7937 / 8
Fax: +62 21 526 7939
Email: singtel-ina@singtel.com
JAPAN
Osaka
A&S Building
4F, 2-6-11 Sonezaki Shinchi
Kita-ku, Osaka, 530-0002, Japan
Tel: +81 6 6458 1405 / 1407
Fax: +81 6 6458 1401
Email: singtel-jpn@singtel.com
MALAYSIA
Kuala Lumpur
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
PHILIPPINES
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
THAILAND
Bangkok
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
Chicago
8770 West Bryn Mawr Avenue
Suite 1326
Chicago, IL 60631, USA
Tel: +1 773 867 8122
Fax: +1 773 867 8121
Email: singtel-usa@singtel.com
Los Angeles
624 South Grand Avenue
Suite 825
Los Angeles, CA 90017, USA
Tel: +1 213 489 9388
Fax: +1 213 489 9390
Email: singtel-usa@singtel.com
New York
140 Broadway
Suite 2110
New York, NY 10015, USA
Tel: +1 212 269 7920
Email: singtel-usa@singtel.com
San Francisco
100 Marine Parkway
Suite 450
Redwood City, CA 94065, USA
Tel: +1 650 508 6800
Fax: +1 650 508 1578
Email: singtel-usa@singtel.com
VIETNAM
Hanoi
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
CONTENTS
2 Operational Highlights
SHAPING OUR MARKETS
4
Financial Highlights
ADDING NEW DIMENSIONS
GENERATING GROWTH
DELIVERING VALUE
6 Chairman’s Statement
9 Organisation Structure
10 Board of Directors
15 Members of the
22 Operating and Financial Review
76 Financial Statements
191 Interested Person Transactions
ENGAGING THE COMMUNITY
192 Shareholder Information
DEVELOPING OUR TALENT
194 Corporate Information
Management Committee
50 Corporate Social Responsibility
195 SingTel Contact Points
18 Key Awards and Accolades
54 Our People
58 Corporate Governance
SingTel is Asia’s leading communications group, providing a diverse range of innovative
communications services including fixed, mobile, data, Internet, IT and TV.
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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
Copyright © 2010
Singapore Telecommunications Limited (CRN: 199201624D)
All rights reserved
Changing the Game
Staying Ahead
Singapore Telecommunications Limited
2009/2010 Annual Report