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Singapore TelecommunicaTionS limiTed
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Our drive for creativity and innovation
has been the cornerstone of our
business since our beginnings as
a homegrown telephone company.
Today, we are the leading communications
group in Asia with operations and
investments throughout the region.
In our quest to become Asia’s best
multimedia and ICT solutions provider,
we are leaping beyond traditional boundaries
to empower businesses with the latest
technology and inspire individuals to stay
connected in a borderless world.
Group at a Glance
SingTel is Asia’s leading
communications group,
providing a diverse range
of innovative services
including fixed, mobile,
data, internet, ICT and TV.
LeAd And
ShApe In
SIngApOre
In Singapore, SingTel has
more than 130 years of
operating experience and has
played an integral part in the
development of the country
as a major communications
hub in the region. As the
market leader, we continue
to lead and shape the
digital consumer market in
Singapore and the enterprise
ICT market across Asia.
GRow iN
AuSTRALiA
CoLLAboRATe
ACRoSS The
ReGioN
optus is an Australian
leader in integrated
telecommunications,
delivering cutting-edge
communications, information
technology and entertainment
services. we enjoy a strong
No. 2 position in the mobile
and fixed-line markets. As
the challenger brand, optus
has driven competition and
led the way in delivering
innovative products and
services to customers.
SingTel has investments
in mobile operators in
bangladesh, india, indonesia,
Pakistan, the Philippines,
and Thailand. we are more
than a financial investor.
As part of a larger group,
the associates share
experiences and insights
with one another as they
navigate challenges, and take
advantage of opportunities
in their own markets.
CoNTeNTS
1
8
Key Figures
Chairman’s Statement
11
in Dialogue with GCeo
14 board of Directors
18 Members of the
Management Committee
21 organisation Structure
22 Key Awards and Accolades
24 operating and Financial Review
48 Corporate Social Responsibility
52 our People
56 Corporate Governance
72
investor Relations
74 Risk Management Philosophy
and Approach
80 Financial Statements
195 interested Person Transactions
196 Shareholder information
198 Corporate information
199 SingTel Contact Points
Key Figures
OPERATING REVENUE
(S$ m)
FY10/11
FY09/10
18,071
16,871
+7%
UNDERLYING NET PROFIT
(S$ m)
FY10/11
FY09/10
3,800
3,910
-3%
Operating revenue grew
on the back of strong mobile
revenue growth from both
the Singapore and Australia
operations, further boosted by
the stronger Australian Dollar.
Underlying net profit declined
as a result of lower associates’
contributions, including Bharti
Africa’s losses and related
acquisition financing costs,
as well as investments in
strategic initiatives.
FREE CASH FLOW
(S$ m)
FY10/11
FY09/10
4,038
3,406
+19%
Free cash flow grew to a
record S$4.04 billion, with
higher cash flows from all
three businesses.
RETURN ON INVESTED CAPITAL (ROIC) (1)
(%)
FY10/11
FY09/10
17.6
18.9
-1.3%
points
ROIC declined due to lower
Group net profit and higher
average capital.
PROPORTIONATE EBITDA
Singapore
Australia
Regional Mobile Associates
Others
24%
30%
45%
1%
Through its investments
in overseas markets,
the Group has diversified
its earnings base. Overseas
operations contributed
76 per cent to proportionate
EBITDA, up 2 percentage
points from a year ago.
Note:
(1) ROIC is the ratio of earnings
before interest and tax (EBIT)
to average net capitalisation,
which is the aggregate of net
debt, shareholders’ funds and
minority interests.
ANNUAL REPORT 2010/2011 1
Covering more than
2 billion people across
Asia and Africa.
2 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
We are a long term strategic investor
in these regional mobile operators –
AIS (Thailand), Globe (the Philippines),
PBTL (Bangladesh), Telkomsel
(Indonesia) and Warid (Pakistan).
Through Bharti (India), we also have
significant presence in 16 African
countries and Sri Lanka.
(1) Burkina Faso, Chad, Democratic Republic of Congo,
Republic of Congo, Gabon, Ghana, Kenya, Madagascar,
Malawi, Niger, Nigeria, Seychelles, Sierra Leone,
Tanzania, Uganda and Zambia
ANNUAL REPORT 2010/2011 3
SingTel has transformed
from a traditional telecoms
operator to a multimedia
and integrated infocomm
technology solutions company.
4 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
We are making
significant strides in
innovation to improve
customer experience and
enhance their lifestyles
and businesses.
ANNUAL REPORT 2010/2011 5
It’s about touching lives.
6 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
We serve our customers with
passion and appeal to their
compassion. We galvanise our
staff into action with a common
vision. Together, we aspire to
make a difference to the lives
of the wider community we
interact with.
ANNUAL REPORT 2010/2011 7
Chairman’s Statement
Dear Shareholders,
FY10/11 was a year of transformation for the SingTel Group.
In Singapore, we cemented our position as the leader in
communications services and grew to become a significant
multimedia operator, offering differentiated innovative content
and applications. In Australia, Optus’ mobile business continued
to gain strength. Optus also celebrated the 25th anniversary of
its satellite business and, in August, announced plans to launch
its 10th satellite in 2013. We are the only full service telco in
Australia that can harness the geographical reach of satellite
communications for the benefit of our customers.
As a Group, we crossed the 400 million mobile customer
mark, with the inclusion of customers from Bharti’s 16 African
operations, which Bharti successfully acquired in June 2010.
With this milestone acquisition, the Group now has a footprint
covering a population of more than 2 billion.
introduced
Another significant event was the Next Generation National
Broadband Network going live in Singapore. Leveraging the
high speeds, we
innovative fibre services and
differentiated ourselves from our competitors. In Australia, while
the National Broadband Network (NBN) is still taking shape,
we expect that it will level the playing field for operators in the
country’s fixed-line market. Our knowledge and experience in
Singapore will help Optus compete more effectively when NBN
is rolled out in Australia.
Beyond our focus on business and financial performance, we are
also committed to our roles as responsible corporate citizens.
We continued to contribute and raise funds for charities, victims
of natural disasters and other social causes in the communities
8 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
We are proactively
responding to and
shaping some of these
industry trends by
innovating. We are in
a position to leverage
our unique strengths
of scale, customer
knowledge and trusted
relationships to
deliver relevant and
personalised services
to customers.
we operate in. Natural disasters struck Australia
and we responded swiftly to render support.
Besides making donations, Optus worked
tirelessly to restore services and distributed
handsets and prepaid SIMs, to allow people
to contact their loved ones. I am extremely
heartened by the way we responded.
Continuing to delight our customers
Mobile communications have become more
than a communication tool. Customers are
increasingly finding new uses for their mobile
devices, for recreational, social and transactional
purposes. Across Singapore and Australia,
we are capturing and driving growth in this
area through a complementary focus of offering
innovative
the
applications, coupled with attractive mobile data
price plans.
smartphones
latest
and
In Singapore, we achieved a record increase
of 156,000 new postpaid mobile customers.
Our pay TV service, mio TV, made major
strides in customer growth and, in May 2011,
crossed the 300,000 mark. We also became
the premier sports content provider with the
exclusive broadcast of the Barclays Premier
League football and ESPN Star Sports channels.
As we had anticipated, the
in
smartphones and new content affected the
profitability of the Singapore business. However,
investment
we firmly believe that these strategic initiatives
are critical to sustain SingTel’s future growth.
Our business
in Australia gained revenue
market share and achieved strong EBITDA
growth and cashflow generation. Optus added
582,000 postpaid mobile customers during
the year, through differentiated mobile offerings,
focus on customer experience
dedicated
and enhanced network coverage which now
covers 97 per cent of the Australian population
for both voice and data.
In the region, our associates have been investing
in mobile broadband - an area which holds
significant growth potential in the emerging
markets. However, a revival of competitive
pressures affected the financial performance
of our associates, in particular, Bharti, Globe
and Telkomsel, as they defended their market
position. Bharti’s expansion into Africa also
incurred significant financing costs and reduced
its earnings contribution to the Group.
Nonetheless, we ended the financial year on
a strong footing. Revenue grew 7 per cent to
S$18.07 billion and net profit was a strong
S$3.83 billion, albeit 2 per cent lower than a
year ago. The Group continued to generate
solid cash flows across our businesses and for
the full year, overall free cash flow hit a record
of S$4.04 billion, an increase of 19 per cent.
ANNUAL REPORT 2010/2011 9
Chairman’s Statement
The Board has recommended a final ordinary
dividend of 9 cents and a special dividend of
10 cents per share. Including the interim
dividend of 6.8 cents per share, the total cash
distribution of S$4.11 billion represents a record
25.8 cents per share.
Total ordinary dividends will have increased
11 per cent and represent 66 per cent of
underlying net profit. The payout demonstrates
the Group’s track record of cash return to
shareholders and our commitment to achieve an
optimal capital structure.
Innovating to grow new businesses
industry
Our
is changing. Customer usage
behaviours and preferences are evolving with
the emergence of new devices, applications
and technology. While these changes pose risks
to our traditional communications business,
they present exciting
more
opportunities for us, as consumers become
increasingly ‘plugged in’ or reliant on their
connected devices.
importantly,
To meet these emerging demands, we are
proactively responding to and shaping some
of these industry trends by innovating. We are
in a position to leverage our unique strengths
of scale, customer knowledge and trusted
relationships to deliver relevant and personalised
services to customers.
Our innovative approach applies not just to
offering new products and services but also
in the way we do things. An example is the
establishment of SingTel Innov8, our corporate
venture arm, charged with scouting globally
for cutting edge technology to bring back to
the Group and to our customers.
Note:
(1) Member of the Order
of Australia
10 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Our innovation efforts will, at the same time,
identify and develop services relevant for the
emerging markets. This is essential for some
of our regional mobile associates which are
reaching an inflection point in their growth
as voice penetration slows and competition
intensifies.
Acknowledgements
With more than 23,000 employees sharing
the same vision and values, I am confident we
will achieve our goals. We will continue to invest
in our people to ensure they are equipped to
take on the new challenges that lie ahead of us.
This year, Mr Graham John Bradley AM (1) and
Mr Nicky Tan are retiring from the Board at our
next annual general meeting. We would like to
thank them for their valuable contributions.
It has been a challenging and fulfilling mission
to keep SingTel at the forefront of the industry.
I have enjoyed my time at SingTel and it has
been an enriching experience being part of the
Group’s transformation and growth over many
years. I am grateful to my colleagues on the
Board for their collaboration and the support
they have given me.
I am confident that under the new leadership
of Mr Simon Israel, the SingTel Group is in
capable hands and will succeed in its next
phase of transformation to emerge stronger.
Chumpol NaLamlieng
Chairman
In Dialogue with GCEO
The end objective for us is simple
– we want to provide customers
with useful, relevant and
personalised services to
complement their lifestyles and
business needs. The traditional
telco business will remain a vital
part of the Group, as we build
on the success of our core
access business to win in the
new multimedia and ICT space.
Q: Describe FY10/11 from SingTel’s perspective.
A: It was both a challenging and rewarding year for SingTel.
We witnessed rapid changes in the industry – technology,
devices and customer behaviour – and navigated through
significant competitive and regulatory developments.
In Singapore and Australia, our complementary strategies
of offering attractive smartphones and other mobile internet
devices, coupled with attractive data plans and strong
execution, helped us grow revenue and market share in
both markets.
We also made significant progress in our transformation from
a traditional telco to a multimedia and infocomm technology
(ICT) service provider. In Singapore, we introduced fibre-
based services, bundling high-speed broadband with TV,
games, social networking and other digital content, to
allow consumer customers
the
capabilities of the Next Generation National Broadband
Network (NGNBN). In the enterprise segment, our flexible
cloud-based ICT solutions helped customers enhance their
productivity and reduce costs.
fully experience
to
In the emerging markets, our associates turned in credible
performances despite aggressive competition. A key
highlight among our associates was Bharti’s geographic
expansion
into Africa through the acquisitions of 16
mobile operations. As a long term strategic investor and
partner, we supported Bharti’s
this
large, underserved continent. Bharti is investing to improve
mobile coverage and affordability in the African markets,
which will allow it to capture significant growth.
investment
into
ANNUAL REPORT 2010/2011 11
In Dialogue with GCEO
Q: What is driving the urgency behind SingTel’s
Q: What are the priorities to accelerate growth in
transformation?
multimedia and ICT services?
A: There is no denying that, as an established telco, we possess
unique strengths. We have identified these strengths and
will fully capitalise on them to drive sustainable growth in
the business.
For example, our customer relationships are key assets that
non-traditional telco players do not have. We have valuable
billing relationships, sophisticated customer relationship
management analytics and extensive technical and customer
care touch points. We plan to translate these advantages
into customer insights to help us anticipate and shape
customers’ needs and influence their behaviours.
We may also pursue strategic investments to gain economies
of scale and important capabilities in multimedia and ICT
services. This is not dissimilar to NCS’ acquisition of SCS in
2008, which allowed us to successfully expand our market
share and increase profitability in ICT services.
The end objective for us is simple – we want to provide
customers with useful, relevant and personalised services
to complement their lifestyles and business needs. The
traditional telco business will remain a vital part of the
Group, as we build on the success of our core access
business to win in the new multimedia and ICT space.
Q: How are you pushing innovation?
A: We have adopted a multi-pronged approach to push for
innovation within and outside the Group.
is SingTel
investing
solutions. Beyond
Innov8, our
One of our recent efforts
in next
corporate venture fund, focused on
generation devices and
funding,
SingTel Innov8 will also help catalyse the development of
innovative
ideas and solutions by creating a vibrant
ecosystem of start-ups, incubators, investors and industry
players in the multimedia space. These ideas and solutions
will be developed
into useful services for deployment
within the Group.
A: We are at the crossroads of industry changes, which present
both opportunities and risks to our businesses.
Industry value is shifting towards mobile devices, content,
applications and services while prices and margins of
traditional access services are declining. Non-telco operators,
such as device manufacturers and internet companies, are
trying to displace telcos and establish direct relationships
with our customers.
At the same time, the level of market competition among the
telcos has not eased. Our competitors are adding capacity
and intensifying price pressures in an effort to stay relevant
to customers. To counter this, we need to carefully and
creatively manage the returns from our access business
to afford continual investments in our mobile and data
networks.
The implementation of the Singapore Government’s NGNBN,
a structurally-separated open-access fibre network, has
attracted new market entrants as they do not need to build
their own networks. Competition
in traditional access
services is expected to intensify as new entrants are happy
to simply provide cheap and fast broadband access. We are
differentiating ourselves through exciting and innovative
services that leverage the ultra fast speeds of the NGNBN.
Over the medium term, we believe that NGNBN has the
potential to accelerate development of new and powerful
services, including digital online services that will substitute
real life spending on gaming, education and commerce.
In Australia, our competitors have given notice that they are
not letting up on their efforts to defend and regain market
share. In the mobile market, where Optus has grown its
market share, this will continue to be a keenly fought space.
Optus remains steadfast to its origin as a challenger operator
and will continue to offer choice and deliver innovative and
value-for-money propositions for its customers.
The urgency is upon us to transform and double our efforts
to stay relevant and outperform the industry.
12 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
In addition, we have set up business units with dedicated
resources and talent for driving
innovation and digital
products, for example, inSing.com, SingTel Idea Factory and
SingTel Innovation Exchange in Singapore and Optus Digital
Media in Australia.
In the longer term, the innovation and transformation we
are pushing in the developed markets will also benefit our
associates. We are optimistic that we can accelerate the
growth of wireless data with a number of our associates in
the emerging markets.
Beyond technology,
involves redesigning
innovation also
business models and revisiting established procedures to
better serve our customers. For example, we are actively
promoting the use of online channels among customers,
to allow them to make purchases and activate services
over the web. We will explore more ways of serving
customers online while ensuring that customer experience
is not compromised.
We are focused on allowing innovation to flourish and new
growth initiatives to develop in the company. These new
growth areas require different performance management
systems and culture. We are putting in place a new incentive
system to promote the right behaviour to encourage
experimentation. The new system will be less reliant on
traditional financial measures although we will be no
less rigorous and disciplined
instilling accountability
and governance.
in
Q: Is SingTel more than a financial investor in its
associates? How do you intend to grow your
regional mobile associates in the new year?
A: We are a strategic partner and take a long term view to our
investments. Our role is definitely more than a financial
investor. We have also been credited with the growth
and success of many of our associates.
We work closely with our associates to grow their businesses
by leveraging the Group’s scale to drive lower costs and
stimulate new service innovation. The associates, which are
in various stages of development, are able to share
experiences and insights with one another. These learnings
help them navigate challenges and shorten their individual
learning curve in technology, marketing, product development
and other areas. In terms of corporate governance, policies
and procedures, there is also a great deal of benchmarking.
To promote sharing of best practices, SingTel organises
regular forums for the relevant stakeholders across the
Group. Among the associates, they may also pursue their
own track of learning on smaller group bases.
From time to time, to realise value from our investments
requires us to work patiently through local regulatory and
other issues. This is one of the reasons we choose to work
with strong local partners who share our commitment to
operate in a highly ethical manner and are aligned with
our goals for the associates.
Our primary focus in FY11/12 will be to work with our
associates to strengthen their operating and financial
performance as well as build capabilities, particularly in the
area of mobile broadband.
Q: How are you preparing the Group for the
transformation?
A: A company is only as good as the people and the talent it
has. We will not let up in terms of investing in our people
to ensure they are ready to take on the challenges ahead.
For the Group to grow, it is important for each of us to
acquire new skills and strengthen our knowledge in the
new areas of growth. We promote job rotations and invest
significantly in formal training and development programmes.
In addition, we have been accelerating the culture change
process and enhancements have been made to our customer
focus and innovation culture. With the strong support from
our Board, the management team and everyone within the
SingTel Group, I am hopeful we are well on track to achieving
our vision of becoming Asia’s leading multimedia and ICT
service provider.
Chua Sock Koong
Group Chief Executive Officer
ANNUAL REPORT 2010/2011 13
Board of Directors
CHUMPOL NALAMLIENG
Non-executive and independent Director
Chairman, SingTel Board
Chairman, Executive Resource and
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, 64, 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 and Siam Sindhorn Company
Limited. 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)
the
University of Washington, US and an MBA
from Harvard Business School, US.
from
GRAHAM JOHN BRADLEY AM (1)
Non-executive and independent Director
Member, Executive Resource and
Compensation Committee
Member, Optus Advisory Committee
Date of Appointment: 24 Mar 2004
Last Re-elected: 25 Jul 2008
CHUA SOCK KOONG
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
Mr Bradley, 62, 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.
Ms Chua, 53, appointed Group CEO on
1 April 2007, oversees SingTel’s three key
businesses - Australia, Singapore and
International. She joined SingTel in June
1989 as Treasurer and was made 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.
Mr Bradley is Chairman of HSBC Bank
Australia Limited, Stockland Corporation
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 Boart Longyear
Limited, Film Finance Corporation Australia
Limited, Garvan Research Foundation
and Sydney Community Foundation, and a
former Director of MBF Australia Limited
and Queensland Investment Corporation.
Mr Bradley holds a Bachelor of Arts and
a Bachelor of Laws from The University
of Sydney and a Master of Laws from
Harvard Law School, US.
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 Public Service Commission and the
Corporate Governance Council of the
Monetary Authority of Singapore. She is a
former Board member of JTC Corporation
and the Casino Regulatory Authority.
She holds a Bachelor of Accountancy
(First Class Honours) from the University
of Singapore. She is a Certified Public
Accountant
in Singapore and a CFA
charterholder.
14 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Note:
(1) Member of the Order of Australia
FANG AI LIAN
Non-executive and independent Director
Chairman, Audit Committee
Member, Executive Resource and
Compensation Committee
Date of Appointment: 7 Aug 2008
Last Re-elected: 24 Jul 2009
DOMINIC CHIU FAI HO
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
Mrs Fang, 61, has been the Chairman
of Great Eastern Holdings Ltd since April
2008, as well as Chairman of its insurance
subsidiaries. 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 and
one of its subsidiaries. She is also the
Chairman of the Charity Council and the
Tax Academy of Singapore. She is a former
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.
Mr Ho, 60, is a Director of Hang Lung
Properties Limited and the Hong Kong
Mercantile Exchange. He was the founder
and a partner of HOPU
Investment
Management Co., Ltd.
Mr Ho joined KPMG US in Houston in 1975
and became a partner in 1985. He was
transferred to Beijing, China to set up
KPMG’s practice in 1984 and resided in
China until 1989 when he was assigned
to Hong Kong. Mr Ho became the China
firm’s Senior Partner based in Beijing in
2000 and was elected Chairman of KPMG
in China and Hong Kong SAR in April 2003.
He retired in April 2007.
Mr Ho holds a Bachelor of Business
Administration and a Master of Science
in Accountancy from the University of
Houston, US. He is a member of the
American Institute of Accountants and
a member of the Hong Kong Institute of
Certified Public Accountants.
SIMON ISRAEL
Non-executive and non-independent Director
Chairman, Optus Advisory Committee
Member, Executive Resource
and Compensation Committee
Member, Finance, Investment
and Risk Committee
Date of Appointment: 4 Jul 2003
Last Re-elected: 30 Jul 2010
Mr Israel, 58, is an Executive Director
and President of Temasek Holdings
(Private) Limited (Temasek) and a Director
of CapitaLand Limited. He is also the
Chairman of Asia Pacific Breweries
Limited and Asia Pacific Breweries
Foundation. He will retire from Temasek
with effect from 1 July 2011.
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 Israel is the former Chairman of the
Singapore Tourism Board and a former
Director of Fraser and Neave Limited and
Neptune Orient Lines Limited.
Mr Israel was conferred the Knight in
the Legion of Honour by the French
government in 2007. He holds a Diploma
in Business Studies from The University
of the South Pacific.
ANNUAL REPORT 2010/2011 15
Board of Directors
PETER EDWARD MASON AM (1)
Non-executive and independent Director
Member, Executive Resource and
Compensation Committee
Member, Optus Advisory Committee
Date of Appointment: 21 Sep 2010
Mr Mason, 65, is the Chairman of AMP
Limited, a director of David Jones Limited
and a Senior Advisor to UBS Australia.
Mr Mason has 40 years experience in
investment banking. He was Chairman
of JP Morgan Chase Bank in Australia
from 2000 to 2005 and Chairman of
their associate, Ord Minnett Group.
Prior to this, he was Chairman and
Chief Executive of Schroders Australia and
Group Managing Director of Schroders’
investment banking businesses in the
Asia Pacific region. He has previously been
chairman and/or director of a number of
Australian listed companies.
Mr Mason holds a Bachelor of Commerce
(First Class Honours), an MBA and an
Honorary Doctorate from The University of
New South Wales.
LOW CHECK KIAN
Non-executive and independent Director
Member, Corporate Governance
and Nominations Committee
Member, Finance, Investment
and Risk Committee
Date of Appointment: 9 May 2011
an
Mr Low, 52,
is one of the founding
partners of NewSmith Capital Partners
LLP,
partnership
independent
providing corporate finance advice and
investment management services, with
its headquarters based in London. Prior
to founding NewSmith, Mr Low was
a Senior Vice-President and Member of
the Executive Management Committee
of Merrill Lynch & Co., as well as its
Chairman for the Asia Pacific Region.
Mr Low has served as an independent
director on the Singapore Exchange Board
since 20 July 2000, and was appointed
Lead Independent Director in May 2006.
He also sits on the Boards of Neptune
Orient Lines Limited and Fibrechem
Technologies Limited, as well as AWAK
Technologies Pte. Ltd. Mr Low previously
also sat on the Board of Singapore
Workforce Development Agency and
chaired its investment arm.
Mr Low holds Bachelor and Master
degrees in Economics from the London
School of Economics.
KAIKHUSHRU SHIAVAX
NARGOLWALA
Non-executive and Lead Independent Director
Chairman, Corporate Governance
and Nominations Committee
Member, Audit Committee
Member, Executive Resource and
Compensation 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, 61, is the non-executive
Chairman of Credit Suisse Asia Pacific.
Prior to that, he was the CEO of Credit
Suisse Asia Pacific and a member of the
Executive Board of Credit Suisse AG from
January 2008 to September 2010. He is
also a Board member of the Casino
Regulatory Authority.
Mr Nargolwala was a Group Executive
Director of Standard Chartered PLC
before
joining Credit Suisse Asia
Pacific. Prior to that, he was the Group
Executive Vice President and Head of
Asia Wholesale Banking Group for Bank
of America, headquartered in Hong Kong.
Mr Nargolwala was a non-executive
Director of Tate & Lyle PLC from December
2004 to December 2007. He was also a
non-executive Director of the Asia Pacific
Region Board of Visa International until
October 2007.
Mr Nargolwala holds a Bachelor degree
in Economics (First Class Honours) from
the University of Delhi, India. He is a Fellow
of the Institute of Chartered Accountants
in England and Wales.
16 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Note:
(1) Member of the Order of Australia
PETER ONG BOON KWEE
Non-executive and non-independent Director
Member, Audit Committee
Member, Corporate Governance
and Nominations Committee
Date of Appointment: 1 Sep 2010
ONG PENG TSIN
Non-executive and independent Director
Member, Finance, Investment and Risk Committee
Member, Optus Advisory Committee
Date of Appointment: 1 Jun 2009
Last Re-elected: 24 Jul 2009
Mr Ong, 49, is the Head of Singapore’s
Civil Service, Permanent Secretary of
the Ministry of Finance of Singapore,
Permanent Secretary
(Special Duties)
in the Prime Minister’s Office and the
Permanent Secretary for National Security
Intelligence Co-ordination. He has
and
previously held the positions of Permanent
Secretary (Ministry of Trade and Industry),
Permanent Secretary
(Ministry of
Transport) and 2nd Permanent Secretary
(Ministry of Defence). Prior to that, he was
an Executive Vice President of Temasek
Holdings (Private) Limited.
is also
He currently sits on the Boards of ASEAN+3
Macroeconomic Research Office, Monetary
Authority of Singapore and National
Research Foundation. He
the
Chairman of
Inland Revenue Authority
of Singapore, MND Holdings Pte Ltd and
Calvary Community Care. He is the former
Chairman of the Accounting and Corporate
Regulatory Authority and Maritime and
Port Authority of Singapore, and a former
Director of DBS Group Holdings Limited
and DBS Bank Limited.
Mr Ong was conferred the Meritorious
Service Medal (Pingat Jasa Gemilang) at the
Singapore National Day Awards 2010. He
holds a Bachelor of Economics (Honours)
from The University of Adelaide, Australia
and an MBA from Stanford University, US.
Mr Ong, 48, is the Chairman of InfoComm
Investments Pte Ltd and a venture partner
of GSR Ventures. He is also a member
of the Board of the National Research
Foundation and a member of the Board
of Trustees of the Singapore University
of Technology and Design.
Mr Ong was the founder and Chairman
of Encentuate, Inc. (Encentuate), which
was acquired by IBM, Inc. (IBM) in 2008.
Prior to Encentuate, Mr Ong was the
founder and Chairman of Interwoven, Inc.
(Interwoven) (now Autonomy, Inc.). Before
Interwoven, Mr Ong was co-founder
and chief architect of Electric Classifieds,
Inc., and held various engineering
Illustra
and management
Information Technologies,
(now
Informix Technologies, Inc., part of IBM),
Inc.),
Sybase
and Gensym Corporation. He is a former
InfoComm Development
Director of
Authority
JTC
Corporation.
Inc. (now SAP America,
of Singapore
roles at
and
Inc.
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
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, 52, manages nTan Corporate
firm
Advisory Pte Ltd, a boutique
specialising
in corporate finance and
corporate restructuring. He is a Director
of Fraser and Neave Limited and
its Audit Committee,
a member of
Nominating Committee and Executive
Board Committee, and he also serves
on the Board of National University
Health System Pte Ltd.
region,
Mr Tan was a Partner and Head of Global
Corporate Finance at Arthur Andersen,
Singapore and ASEAN
from
1999 to 2001. Prior to that, he was a
Partner and Head of Financial Advisory
Services at Price Waterhouse, Singapore
and Chairman of Financial Advisory
Services at PricewaterhouseCoopers, Asia
Pacific region.
Mr Tan is a Chartered Accountant and
a member of The Institute of Chartered
Accountants in England and Wales. He is
also a Certified Public Accountant and a
member of the Institute of Certified Public
Accountants of Singapore.
Note:
Mr Heng Swee Keat, Mr John Powell Morschel and
Mr Deepak S Parekh retired from the SingTel Board
following the conclusion of the Annual General
Meeting held on 30 July 2010.
ANNUAL REPORT 2010/2011 17
Members of the Management Committee
CHUA SOCK KOONG
Group Chief Executive Officer, SingTel
BRADLEY GAMBILL
Group Chief Strategy Officer, SingTel
HUI WENG CHEONG
Chief Executive Officer (International), SingTel
Ms Chua, 53, appointed Group CEO on
1 April 2007, oversees SingTel’s three
key businesses - Australia, Singapore
and International. She joined SingTel in
June 1989 as Treasurer and was made
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 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 Public Service Commission and the
Corporate Governance Council of the
Monetary Authority of Singapore. She is
a former Board member of JTC Corporation
and the Casino Regulatory Authority.
She holds a Bachelor of Accountancy
(First Class Honours) from the University
of Singapore. She is a Certified Public
Accountant
in Singapore and a CFA
charterholder.
Mr Gambill, 47, was appointed Group
Chief Strategy Officer in February 2011.
He drives the strategy and development
of new growth platforms across the
SingTel Group. He is also responsible
for strategic
investments, group M&A
and for driving group-level product and
service innovation.
Prior to his appointment
in SingTel,
Mr Gambill was based in Seoul as the
Executive Vice President and Chief
Strategy Officer of LG Electronics.
He has more than 20 years of experience
in strategy, investments and management
consulting. He was also previously
a Partner at McKinsey & Company and
Managing Director at Innosight Venture
Pte. Ltd.
Mr Gambill graduated magna cum laude
from Duke University with a Bachelor
of Science
in Computer Science and
Public Policy. He has an MBA from The
Wharton School of The University of
Pennsylvania, US.
Mr Hui, 56, was appointed CEO International
in December 2010, responsible for the
growth of SingTel Group’s overseas
investments
its
strengthening
and
relationships with overseas partners.
Before this, he was Chief Operating
Officer with the Group’s Thai associate,
Advanced
responsible
Info Service,
for sales and marketing, network
operations, IT solutions and customer
and services management.
A SingTel scholar, he started his SingTel
career as an engineer.
In 1999, he
assumed the position of Vice President
(Consumer Products) and managed the
product development of new mobile,
paging, internet, broadband and telephone
businesses.
He sits on the Boards of Bharti Airtel Limited,
Bharti Telecom Limited and Globe Telecom.
He has a First Class Honours in Engineering
(Electrical) from the National University
of Singapore and an MBA from the
International Business Education and
Research Program at the University of
Southern California, US.
18 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
ALLEN LEW
Chief Executive Officer (Singapore), SingTel
JEANN LOW
Group Chief Financial Officer, SingTel
NG YOKE WENG
Group Chief Information Officer, SingTel
Mr Lew, 55, 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 (AIS) – the Group’s
associate in Thailand, Chief Operating
Officer of Singapore Telecom International
Pte Ltd and Managing Director of Optus
Consumer.
Ms Low, 50, was appointed Group Chief
Financial Officer in September 2008. She
oversees the Group’s financial affairs
including corporate finance, treasury, risk
management and capital management
and investor relations. Before this, she
was Chief Financial Officer of Optus
from 2006.
She joined SingTel in 1998 as the Group
Financial Controller. In 2004, she was
promoted to Executive Vice President
of Strategic Investments managing the
Group’s international investments.
He is the Chairman of the AIS Executive
Committee. Mr Lew
is also a Board
member of the Sentosa Development
Corporation and a member of
the
Singapore Institute of Technology’s Board
of Trustees.
Mr Lew holds a Bachelor of Electrical
Engineering from the University of Western
Australia and a Master of Science
(Management) from the Massachusetts
Institute of Technology, US.
Before SingTel, she worked at an
international
and
accounting
thereafter in a public listed electronics
company in Singapore.
firm
She is a Director of OpenNet Pte. Ltd.
Since April 2010, she has been a Council
Member of the Singapore Institute of
Certified Public Accountants.
She holds an Honours Degree
in
Accountancy from the National University
of Singapore and is a Certified Public
Accountant in Singapore.
Mr Ng, 55, joined SingTel in May 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.
He leads and oversees the planning,
development and operations of
the
IT infrastructure and information systems
to ensure quality service delivery and
operational efficiency. From April 2007
to January 2011, he was the covering
Officer,
Group
responsible
term
and
technology
benchmarking. Prior to joining SingTel,
Mr Ng spent 17 years with Systems
& Computer Organisation, Ministry
of Defence, rising to the top position
of director.
for driving
strategy,
long
synergies
Technology
Chief
(First
Mr Ng holds a Bachelor of Electrical
Engineering
Class Honours)
the University of Canterbury,
from
New Zealand. He is a Fellow of the
Singapore Computer Society.
ANNUAL REPORT 2010/2011 19
Members of the Management Committee
PAUL O’SULLIVAN
Chief Executive Officer, SingTel Optus
AILEEN TAN
Group Director Human Resource, SingTel
Mr O’Sullivan, 50, was appointed Chief
Executive of Optus in September 2004.
He is responsible for all aspects of the
performance and operations of Optus.
He also has management responsibilities
across the SingTel Group and serves on
the Board of Commissioners of Telkomsel,
Indonesia. Prior
to his current role,
Mr O’Sullivan held management positions
within Optus including Chief Operating
Officer
of
Optus Mobile. Previously, he also held
various international management roles
at the Colonial Group and the Royal Dutch
Shell Group in Canada, the Middle East,
Australia and the United Kingdom.
and Managing Director
Mr O’Sullivan is a founding member and
Chairman of the Australian Business
and Community Network, which partners
businesses with schools
improve
collaboration between corporate Australia
and education leaders.
to
He has a Bachelor of Arts (Mod) Economics
from Trinity College, University of Dublin.
Ms Tan, 44, 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
and Optus. She is also responsible for the
Group’s corporate social responsibility.
Before SingTel, she was Group General
Manager Human Resource at WBL
Corporation and was Vice President,
Centers of Excellence with Abacus
International. Ms Tan has over 20 years
of HR experience in various multinational
corporations and local companies.
She 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
Professional
Psychology, Alliant University.
School
of
She is a member of the Home Nursing
Foundation Board and HR Manpower
Skills & Training Council.
20 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Organisation Structure
GROUP CHIEF
EXECUTIVE
OFFICER
CHUA SOCK KOONG
CHIEF
EXECUTIVE OFFICER
(INTERNATIONAl)
HUI WENG CHEONG
• Business Management
• Regional Products
• Regional Technical
• Regional IT
• Regional Finance
CHIEF
EXECUTIVE OFFICER
(SINGTEl OPTUS)
PAUl O’SUllIVAN
CHIEF
EXECUTIVE OFFICER
(SINGAPORE)
AllEN lEW
• Optus Business
• Optus Consumer
• Optus Digital Media
• Optus Small and
Medium Business
• Optus Wholesale
and Satellite
• Networks
• Technology and Products
• Virgin Mobile Australia
• Business
• Digital Consumer
• Digital Home
• Multimedia
• NCS
• Networks
• Carrier Services
Integrated Business Unit
GROUP CHIEF
FINANCIAl OFFICER
JEANN lOW
• Finance
• Corporate Affairs
- Group Investor
Relations
and Corporate
Communications
- Group Tax
- Group Treasury
CHIEF
EXECUTIVE OFFICER
(SINGTEl INNOV8)
yVONNE KWEK
AUDIT
COMMITTEE
VICE PRESIDENT
(AUDIT)
CHOR KHEE yANG
GENERAl COUNSEl /
COMPANy
SECRETARy
CHAN SU SHAN
GROUP CHIEF
INFORMATION
OFFICER
NG yOKE WENG
GROUP CHIEF
STRATEGy OFFICER
BRADlEy GAMBIll
GROUP DIRECTOR
(HUMAN RESOURCE)
AIlEEN TAN
ANNUAL REPORT 2010/2011 21
Key Awards and Accolades
GROUP
APR
2010
mAy
2010
jun
2010
SeP
2010
APR
2010
mAy
2010
jun
2010
Governance and Transparency Index
• Ranked 1st
Singapore Corporate Awards
• Best Managed Board
• Best CFO of the Year – Jeann Low
FinanceAsia: Asia’s Best Companies
• Most Committed to a Strong Dividend Policy
Asian Legal Business Southeast Asia
Law Awards
•
IT/Telecommunications In-House Team
of the Year
Frost & Sullivan Growth, Innovation and
Leadership Awards
• Excellence in Leadership – Chua Sock Koong
OCT
2010
deC
2010
SIAS Investors’ Choice Awards
• Singapore Corporate Governance Award
Asiamoney Corporate Governance Poll
• Best for Responsibilities of Management and the
Board of Directors
• Best for Shareholders’ Rights and Equitable
Treatment – Joint 1st place
jAn
2011
euromoney Best managed Companies in Asia
• Most Convincing and Coherent Strategy
in Singapore
mAR
2011
Corporate Governance Asia: Asian excellence
Awards
• Best Environmental Responsibility
• Best Investor Relations by a Singapore company
SINGAPORE
Seatrade Asia Award
• Technical Innovation
Springboard Research
• Asian IT Company of the Year
Frost & Sullivan: Asia Pacific ICT Award
• Managed Service Provider of the Year
• Data Communications Service Provider
of the Year
Computerworld Singapore Readers’
Choice Awards
• Best Data Centre and Hosting Services
• Best Managed Connectivity Services
Superbrands Singapore 2010
• Business Superbrands
juL
2010
Singapore HR Awards
• Leading HR Practices in CSR Award
• Leading HR Leader Award
Contact Centre World Awards
• Best Outsourcing Partnership
(Client: Ministry of Manpower)
• Best Outsourcing Partnership
(Client: The Accounting and Corporate
Regulatory Authority)
• Best Incentive Scheme
Asia Business Continuity Awards
• Business Continuity Provider of the Year
(BCM Service)
22 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
OCT
2010
nOV
2010
FeB
2011
Community Chest Corporate Platinum Award
mAR
2011
IQPC Process excellence Awards
• Best Start Up Lean Six Sigma Program Award
mIS Asia magazine
• Strategic 100 (Regional 20) Honoree
Hardwaremag and HardwareZone.com
Tech Awards: Reader’s Choice
• Best Mobile Operator (Singapore)
• Best Internet Service Provider (ISP)
ethisphere Institute:
World’s most ethical Companies
• Among list of 36 new entrants
AUSTRALIA
nOV
2010
Customer Service Institute of Australia:
Australian Service excellence Awards
• Premium Service Desk
• National Executive of the Year
• Service Excellence in a Contact Centre
nOV
2010
London International Awards 2010
• Gold - Television/Cinema/Online Film
(Visual Effects) - Optus ‘Secret Training Camp’
(‘Secret Training Camp’ was a TVC in support of Football
Federation Australia)
Frost & Sullivan Australia Best Practices Awards
• Service Provider of the Year
FeB
2011
Australian Human Resources Institute
national Awards
• Martin Seligman Award for Health & Wellbeing
Australian Centre of Corporate Social
Responsibility: State of CSR
in Australia Annual Review
• Among CSR Top 20
ASSOCIATES
juL
2010
deC
2010
money & Banking Awards
• Best Public Company – AIS
FeB
2011
Top Brand Award
• kartuHALO and simPATI – Telkomsel
Wall Street journal Asia 200 Survey
• 4th Most Admired Company in the Philippines
– Globe
mobile World Congress Global Award
• Best Mobile Money Product or Solution –
Airtel Africa in partnership with Mastercard
and Standard Chartered Bank
ANNUAL REPORT 2010/2011 23
Operating and Financial Review
SingTel is a leading communications group with operations and
investments in Asia and Africa, providing a portfolio of multimedia
services and infocomm technology solutions, including voice,
data and video services over fixed and wireless platforms.
In Singapore, we are the leading mobile, broadband and fixed-line
operator with a vision to lead and shape the local digital consumer
market and enterprise ICT market across Asia. NCS, our wholly
owned subsidiary, is Singapore’s leading IT provider and ranks
among the top 10 in Asia Pacific.
Our Australian arm, Optus continues to differentiate itself in the
market through various innovative services, offering customers
relevance and personalisation.
The Group has presence in Asia and Africa with more than 400
million mobile customers in 25 countries, including Bangladesh,
India, Indonesia, Pakistan, the Philippines and Thailand. It also has
a network of 35 offices in 19 countries and territories throughout
Asia Pacific, Europe and the US.
In this section, we provide a strategic review of the SingTel Group’s
operations, and discuss the financial performance of the Group
and its key markets in Singapore, Australia and the region for the
financial year ended 31 March 2011.
CONTENTS
25 Key Operating Companies
26 Group Five-Year
Financial Summary
27 Management
Discussion and Analysis
30 Business in Singapore
36 Business in Australia
42 Business in the Region
24 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Key Operating Companies
SIngapore
aUSTraLIa
InTernaTIonaL
nCS pTe. LTD.
SIngneT pTe LTD
100%
100%
SIngTeL opTUS
pTY LIMITeD
100%
aDvanCeD InFo ServICe
pUbLIC CoMpanY LIMITeD
21%
aLphaweST ServICeS
pTY LTD
100%
bharTI aIrTeL LIMITeD
SIngTeL IDea
FaCTorY pTe. LTD.
100%
opTUS broaDbanD
pTY LIMITeD
100%
gLobe TeLeCoM, InC.
SIngTeL Innov8
pTe. LTD.
100%
opTUS MobILe
pTY LIMITeD
100%
paCIFIC bangLaDeSh
TeLeCoM LIMITeD
SIngTeL MobILe
SIngapore pTe. LTD. (1)
100%
opTUS neTworkS
pTY LIMITeD
100%
pT. TeLekoMUnIkaSI
SeLULar
TeLeCoM eQUIpMenT
pTe LTD
100%
opTUS vISIon
pTY LIMITeD
100%
warID TeLeCoM
(prIvaTe) LIMITeD
32%
47%
45%
35%
30%
SIngTeL DIgITaL
MeDIa pTe. LTD.
SIngapore poST
LIMITeD
96%
26%
UeCoMM operaTIonS
pTY LIMITeD
100%
SoUThern CroSS CabLeS
hoLDIngS LIMITeD
40%
vIrgIn MobILe
(aUSTraLIa)
pTY LIMITeD
100%
Note:
(1) The mobile business was
transferred from Singapore
Telecom Mobile Pte Ltd to
SingTel Mobile Singapore
Pte. Ltd. on 1 October 2010.
This chart is accurate as of 31 March 2011.
The list of significant subsidiaries, associated and
joint venture companies is disclosed on pages 184 to
194 in Note 45 to the Financial Statements.
ANNUAL REPORT 2010/2011 25
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
Group EBITDA
Net profit after tax
Underlying net profit (1)
Cash Flow (S$ million)
Group free cash flow (2)
Singapore
Associates’ dividends (net of withholding tax)
SingTel
Optus
Optus (A$ million)
Capital expenditure
balance Sheet (S$ million)
Total assets
Shareholders’ funds
Net debt
key ratios
Proportionate EBITDA from outside Singapore (%)
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 (S 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
2011
2010
2009
2008
2007
18,071
6,401
11,670
9,284
16,871
5,995
10,876
8,949
14,934
5,547
9,387
8,321
14,844
4,904
9,940
7,760
13,377
4,430
8,947
7,475
5,119
2,183
2,937
2,334
2,141
7,260
3,825
3,800
4,038
1,436
1,084
2,520
1,519
1,206
2,005
4,847
2,224
2,623
2,153
2,410
7,257
3,907
3,910
3,406
1,290
858
2,148
1,258
1,015
1,923
4,431
2,110
2,321
2,067
2,051
6,482
3,448
3,455
3,245
1,231
963
2,194
1,050
967
1,918
4,530
1,967
2,564
2,002
2,559
7,089
3,960
3,681
3,575
1,422
1,001
2,423
1,152
903
1,879
4,282
1,902
2,380
1,988
2,073
6,355
3,779
3,556
2,795
1,298
606
1,904
891
742
1,790
39,282
24,328
6,023
37,952
23,493
6,311
33,255
20,476
6,544
34,714
21,000
7,303
32,659
20,847
5,895
76
17.6
16.0
9.9
0.8
21.8
24.02
23.86
152.75
15.8
10.0
74
18.9
17.8
11.0
0.9
23.5
24.55
24.56
147.55
14.2
-
72
17.2
16.6
10.2
1.0
19.9
21.67
21.71
128.67
12.5
-
75
18.9
18.9
11.8
1.0
20.7
24.90
23.15
132.03
12.5
-
70
18.3
18.0
11.4
0.9
21.3
23.25
21.88
131.20
11.0
9.5
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.
26 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Management Discussion and Analysis
GROUP REvIEW
GROUP
Operating revenue
Operational EBITDA
Operational EBITDA margin
Share of associates’ pre-tax profit
EBITDA
Exceptional items
Net profit
(ex-Bharti Africa) (3)
Basic earnings per share (S cents)
Underlying net profit (2)
(ex-Bharti Africa) (3)
Underlying earnings per share (S cents)
Financial Year Ended 31 March
2011
(S$ million)
2010
(S$ million)
Change (%)
18,071
5,119
28.3%
2,141
7,260
25
3,825
3,947
24.0
3,800
3,922
23.9
16,871
4,847
28.7%
2,410
7,257
(2)
3,907
3,907
24.6
3,910
3,910
24.6
7.1
5.6
-11.2
**
nm
-2.1
1.0
-2.2
-2.8
0.3
-2.9
notes:
(1) In this section, ‘Optus’ refers to SingTel Optus Pty Limited and its subsidiaries, ‘SingTel’ refers to the SingTel Group excluding Optus. ‘Associate’ refers to
either an associated company or a joint venture company as defined under Singapore Financial Reporting Standards. ‘nm’ denotes not meaningful and
‘**’ denotes less than +/-0.05%.
(2) Underlying net profit refers to net profit before exceptional items.
(3) Excluding the share of net loss, acquisition financing and transaction costs of Bharti Africa. Bharti Africa was acquired by Bharti Airtel on 8 June 2010.
The Group reported resilient performance and met guidance for
the financial year ended 31 March 2011. Sustained revenue growth
increased operational EBITDA by 5.6 per cent to S$5.12 billion.
Underlying net profit was stable, excluding the effects of Bharti
Africa which was acquired in June 2010. Free cash flow for the
year was up a strong 19 per cent to a record S$4.04 billion, with
higher cash flows from all the three businesses.
Operational EBITDA for the Group grew 5.6 per cent from a year
ago with growth from Optus. EBITDA in Australia rose 12 per cent
in Singapore Dollar terms, driven by higher contributions from all
its business segments. The Singapore Business’ EBITDA, however,
was lower by 1.7 per cent from a year ago, reflecting higher
acquisition costs of mio Tv content and mobile connections as well
as investments made to grow new businesses.
Operating revenue grew 7.1 per cent to S$18.07 billion, led by robust
mobile performance in Singapore and Australia and further lifted
by the 3.4 per cent strengthening of the Australian Dollar from a
year ago.
In Singapore, operating revenue was up 6.8 per cent. This was
mainly driven by double-digit growth of 11 per cent in Mobile
Communications on strong postpaid customer growth and higher
postpaid average revenue per user (ARPU). Information Technology
and Engineering (IT&E) revenue also rose 8.2 per cent boosted
by higher revenue from the fibre rollout contract with OpenNet
Pte. Ltd. (OpenNet).
In Australia, Optus delivered a 3.7 per cent increase in operating
revenue, underpinned by mobile service revenue growth of 8.4
per cent with continued postpaid and wireless broadband customer
growth in a highly competitive market. Fixed revenues declined
as Optus continued to exit marginal resale services. Optus’
translated revenue in Singapore Dollars grew 7.3 per cent from the
previous year with a stronger Australian Dollar.
The Group’s share of pre-tax profits from associates declined
11 per cent to S$2.14 billion. Reflecting the economic recovery
in Thailand and strong execution, AIS’ pre-tax contribution rose
28 per cent. In South Asia, Bharti’s results had been negatively
impacted by stiff price competition in India. Stable market
conditions in the later half of the financial year led to an increase
in Bharti’s revenue and EBITDA. However, with higher depreciation
and amortisation, including the first time recognition of amortised
3G license fees, as well as lower fair value gains of S$3 million
(FY 2010: S$46 million) on mark-to-market valuations of its
foreign currency liabilities, Bharti’s pre-tax contribution from
South Asia was down 12 per cent. Including the losses from its
newly acquired Africa operations in June 2010 as well as related
acquisition financing and transaction costs, Bharti’s overall pre-
tax contribution declined 22 per cent. Both Telkomsel and Globe
reported lower profits on increased competitive pressures as well
as lower fair value gains on their foreign currency liabilities.
With lower associates’ contribution, the Group’s EBITDA was flat at
S$7.26 billion.
ANNUAL REPORT 2010/2011 27
operating and Financial review
Management Discussion and Analysis
The Group recorded a net exceptional gain of S$25 million. This
comprised mainly the net effect of a fair value gain of S$38 million
on the consideration payable for the acquisition of an additional
1.5 per cent effective equity interest in Bharti which was completed
in November 2009, a foreign exchange gain of S$19 million on
the revaluation of inter-company loans and the Group’s share of
Bharti’s one-time brand launch costs of S$30 million.
Profit before tax decreased 1.0 per cent to S$4.99 billion while tax
expense increased 3.0 per cent. The higher tax expense was due to
the higher effective tax rate of the associates. Some of the operating
companies within Bharti Africa group were profitable while no
deferred tax credit has been recognised for some of the loss-making
operating companies.
CASH FLOW
GROUP
Net cash inflow from operating activities
Net cash outflow for investing activities
Net cash outflow for financing activities
Net increase in cash balance
Exchange effects on cash balance
Cash balance at beginning of year
Cash balance at end of year
Free cash flow
Singapore
Australia
Associates (net dividends after withholding tax)
Group
Cash capital expenditure as a percentage of operating revenue
operating activities
The Group’s net cash inflow from operating activities for the year
grew 13 per cent or S$714 million to S$6.04 billion, with strong
operating cash flows from Singapore and Australia and higher
dividend received from the associates.
Investing activities
The investing cash outflow was S$2.76 billion. During the year,
payments of S$565 million were made for the acquisition of an
additional 1.5 per cent effective equity interest in Bharti which was
completed in November 2009 as well as S$79 million in respect
of open market purchases of additional shares in Bharti. Capital
expenditure totalled S$2.01 billion and represented 11 per cent of
the Group’s operating revenue, similar to a year ago. Major capital
expenditure included the expansion and enhancement of mobile
networks to support customer and data growth, and investments
in satellites and core infrastructure.
28 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Hence, the Group’s net profit was down by 2.1 per cent to S$3.83
billion and underlying net profit decreased 2.8 per cent to S$3.80
billion. Excluding the net loss and acquisition financing and
transaction costs of Bharti Africa, underlying net profit was stable.
The Group has successfully diversified its earnings base through
its expansion and investments in overseas markets. On a
proportionate basis if the associates are consolidated line-by-
line, operations outside Singapore accounted for 77 per cent
(FY 2010: 75 per cent) of the Group’s proportionate revenue and
76 per cent (FY 2010: 74 per cent) of proportionate EBITDA.
Financial Year Ended 31 March
2011
(S$ million)
2010
(S$ million)
Change (%)
6,043
(2,759)
(2,141)
1,143
(18)
1,614
2,738
1,436
1,519
1,084
4,038
11%
5,329
(2,179)
(2,634)
515
23
1,076
1,614
1,290
1,258
858
3,406
11%
13.4
26.6
-18.7
121.8
nm
50.0
69.7
11.3
20.7
26.3
18.6
Financing activities
Net cash outflow of S$2.14 billion for financing activities arose mainly
from the payment of S$1.27 billion of final dividends in respect of
the previous financial year ended 31 March 2010, and S$1.08 billion
for interim dividends in respect of the current financial year. Other
major financing cash outflows included S$348 million for interest
payments as well as S$218 million for settlement of swaps on
repayment of borrowings. These outflows were partially offset by
S$840 million of cash inflow from net borrowings during the year.
Free Cash Flow
The Group’s free cash flow grew 19 per cent to a record S$4.04 billion,
driven by higher operating cash flows from all three businesses.
Free cash flow from Singapore grew 11 per cent from a year ago on
positive working capital movements. Free cash flow from Australia
amounted to A$1.21 billion, up 19 per cent from the previous year,
driven by higher EBITDA. In Singapore Dollar terms, it was up 21
per cent. Boosted by special dividends received from AIS, the
associates’ net dividends increased 26 per cent to S$1.08 billion.
CAPITAL MANAGEMENT
GROUP
Gross Debt (S$ m)
Net Debt (1) (S$ m)
Net Debt Gearing Ratio (2) (%)
Net Debt to EBITDA (number of times)
Interest Cover (3) (number of times)
Average Maturity of Borrowings (years)
Group Debt
MAR 11
MAR 10
MAR 09
8,761
7,924
6,023
6,311
7,620
6,544
Gross Debt
Net Debt (1)
Average Maturity of Borrowings
(Years)
MAR 11
MAR 10
MAR 09
6.5
4.7
4.5
Average Maturity
notes:
(1) Net debt is defined as gross debt less cash and bank balances adjusted
for related hedging balances.
(2) Net debt gearing ratio is defined as the ratio of net debt to net capitalisation.
Net capitalisation is the aggregate of net debt, shareholders’ funds and
minority interests.
(3) Interest cover refers to the ratio of EBITDA to net interest expense.
Financial Year Ended 31 March
2011
8,761
6,023
19.8
0.8
21.8
6.5
2010
7,924
6,311
21.2
0.9
23.5
4.7
2009
7,620
6,544
24.2
1.0
19.9
4.5
(S$ m)
The Group
is committed to an optimal capital structure
and constantly reviews its capital structure to balance capital
efficiency and financial flexibility.
During the year, the Group raised new long-dated bonds and
extended its debt maturity. However, net debt fell, reflecting a
higher cash balance.
The Group has one of the strongest credit ratings among
telecommunications companies in Asia and is committed to
maintaining its investment grade credit ratings. SingTel is
currently rated A+ by Standard & Poor’s and Aa2 by Moody’s
Investors Service.
SingTel’s dividend payout ratio ranges from 55 per cent to
70 per cent of underlying net profit. Consistent with its objective
of an optimal capital structure, the Group will review on a
three-year basis its cash needs for operations and growth, as
well as strategic initiatives, with a view to returning surplus
cash to shareholders.
ANNUAL REPORT 2010/2011 29
operating and Financial review
Business in Singapore
The Singapore Business delivered strong
operating revenue growth of 6.8 per cent to
S$6.40 billion, underpinned by 6.3 per cent
growth in the Singapore Telco business and
8.2 per cent increase in the IT&E business.
REvENUE
+6.8%
S$6.40b
Notes:
(1) Numbers in above table may not
exactly add due to rounding.
(2) Prior year comparatives have been
restated to reclassify certain revenue
from “International telephone” to
“Mobile communications”, consistent
with the presentation in the current year.
(3) Include revenues from maritime &
land mobile and lease of satellite
transponders.
SINGAPORE BUSINESS
Operating revenue
Mobile communications (2)
Data and Internet
International telephone (2)
National telephone
Sale of equipment
mio Tv
Others (3)
Singapore Telco
Revenue from NCS
Fibre rollout
Information technology and
engineering (IT&E)
Total
Operational EBITDA (excluding
Group’s corporate costs)
Singapore Business
Singapore Telco business
IT&E business
Operational EBITDA margin
Financial Year Ended 31 March
2011
(S$ million)
2010
(S$ million)
Change (%)
1,788
1,612
511
375
311
79
191
4,867
1,266
268
1,534
6,401
2,253
1,986
267
1,610
1,577
519
393
268
16
194
4,578
1,236
181
1,417
5,995
2,293
2,090
203
11.1
2.2
-1.5
-4.7
15.9
390.7
-1.5
6.3
2.4
48.0
8.2
6.8
-1.7
-5.0
31.4
Singapore Business
35.2%
38.2%
30 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
EARNINGS REvIEW
The Singapore Business delivered strong operating revenue
growth of 6.8 per cent to S$6.40 billion, underpinned by
6.3 per cent growth in the Singapore Telco business and
8.2 per cent increase in the IT&E business. Free cash flow was
up strongly by 11 per cent to S$1.44 billion on positive working
capital movements.
IT&E’s EBITDA was up 31 per cent, reflecting strong cost
initiatives as well as one-off write-back of provisions no longer
required. With higher acquisition costs of mio Tv content and
mobile connections as well as investments made to grow new
businesses, the Singapore Telco’s EBITDA declined 5.0 per cent.
Overall, the Singapore Business’ EBITDA declined 1.7 per cent to
S$2.25 billion.
largest
revenue
Mobile Communications,
stream,
the
delivered double-digit growth of 11 per cent to S$1.79 billion.
This was driven by strong postpaid customer acquisitions
and higher postpaid average revenue per user (ARPU) on
the back of higher smartphone acquisitions. Total mobile
customer base grew 6.1 per cent to 3.31 million as at
31 March 2011, representing a leading market share of
44.8 per cent.
A record total number of 156,000 postpaid customers were added
in the year, bringing total postpaid base to 1.78 million as at
31 March 2011. More than 60 per cent of new postpaid customers
chose smartphones in the year, lifting overall smartphone
penetration to half of the total postpaid base as at end March
2011. Postpaid ARPU rose 2.7 per cent, and excluding ‘data only’
SIMs, was up 5.1 per cent, on higher take-up of higher rate plans
and increased mobile roaming. Acquisition cost per postpaid
customer decreased 1.7 per cent following initiatives to optimise
handset subsidies.
With robust demand for mobile broadband services, mobile data
services accounted for 39 per cent of blended ARPU, up from
34 per cent a year ago. Total number of customers on monthly
mobile broadband data subscription grew 364,000 or 72 per cent
from a year ago to 869,000 as at 31 March 2011.
In the prepaid segment, SingTel gained 35,000 customers led by
positive customer response to new prepaid initiatives such as
the 3G SIM card, Data vAS and Blackberry vAS. This brought total
prepaid base to 1.53 million as at 31 March 2011. Prepaid ARPU
was stable from a year ago.
Demand for SingTel’s digital home services continued to gain
traction. Revenue from mio Tv was S$79 million, up from
S$16 million in the previous year, with an enlarged customer
base driven by SingTel’s new offerings and exclusive sports
content including Barclays Premier League and ESPN Star
Sports channels launched during the September 2010 quarter.
Total mio Tv customer base reached 292,000 as at end
March 2011 with 101,000 net customers added in the year.
Driven by continued demand for bundled plans, a total of
54,000 customers subscribed to mio bundles (1), bringing total mio
customer base to 241,000 as at 31 March 2011, up 29 per cent
from a year ago.
Data and Internet revenue was up 2.2 per cent to S$1.61 billion
as strong growth in Managed Services mitigated intense price
competition in International Leased Circuits. Fixed Broadband
revenue rose 5.5 per cent in a competitive and higher penetrated
market, led by increased adoption of higher-tier plans in the
business segment. With higher take-up for SingTel’s home
bundles and high-speed fibre-based services
in
September 2010, total fixed broadband lines grew 15,000 in the
year to 530,000 as at 31 March 2011.
launched
IT&E revenue grew 8.2 per cent to S$1.53 billion. Revenue from
NCS group was up 2.4 per cent to S$1.27 billion, with growth in
network integration and infrastructure services in the domestic
market partially mitigating the lower overseas sales. NCS’ order
book remained strong at S$1.9 billion at end March 2011. Fibre
rollout revenue from OpenNet increased to S$268 million from
S$181 million a year ago as the pace of fibre rollout accelerated
during the year.
International telephone revenue declined 1.5 per cent to
S$511 million on lower average collection rate partially offset by
increased international call traffic.
Revenue from Fixed-line phone services declined 4.7 per cent
to S$375 million on lower usage impacted by fixed-to-mobile
substitution. Sale of equipment revenue grew 16 per cent to
S$311 million on higher smartphone volumes fuelled by SingTel’s
strong suite of smartphones.
Note:
(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).
ANNUAL REPORT 2010/2011 31
operating and Financial review
Business in Singapore
FoCUS For FY11/12
Maintain market leadership in the communications business and
develop new growth areas.
Leverage ngnbn to grow multimedia offerings, encompassing
converged voice, data, video and content-rich services.
Strengthen ICT services for enterprise customers in Singapore
and around the region.
REvENUE BY PRODUCTS AND SERvICES
Mobile Communications
Data and Internet
IT and Engineering
International Telephone
National Telephone
Sale of Equipment
mio Tv
Others
28%
25%
24%
8%
6%
5%
1%
3%
S$6.40b
2011
OPERATIONAL EBITDA
S$2.25b
2011
Telco
IT and Engineering
88%
12%
32 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
>
SingTel showcases the
power of cloud computing at
i.Luminate 2010, Asia’s largest
innovation business forum
YEAR IN REvIEW
SingTel Singapore – amazing things happen
when you dream big
In FY10/11, SingTel Singapore continued its
transformation to be the leading integrated
infocomm technology (ICT) and multimedia
solutions provider in Singapore and the region.
We energised our brand with the theme ‘Amazing
things happen when you dream big’. By daring
to dream big, we grew new businesses while
maintaining our leadership position in key markets.
ICT offerings. We
We made significant progress
in consumer
multimedia and aggressively expanded our
managed
introduced many
innovative and exciting services, applications
and content throughout the year to enrich our
lives and make our business
customers’
customers’ operations more productive. This has
helped us achieve broad-based revenue growth
for the year.
Leading, Shaping and Innovating
Consumer Services
SingTel is the driving force behind mobile data
adoption in Singapore. In the mobile internet
device space, we consistently lead with exclusive
deals and the widest range of devices available
in the market.
We were the first to bring the Apple iPhoneTM to
Singapore in 2008 and also the first to introduce
Android-powered phones
In FY10/11,
we were the first to introduce the Samsung
Galaxy S mobile phone and Galaxy Tab, a ground-
breaking feature-rich tablet. However, what really
in 2009.
differentiates us is our emphasis on developing
relevant and personalised services to leverage the
capabilities of these devices.
Our digital media businesses continue to
gain mind share and popularity among local
audiences. inSing.com is the number one local
lifestyle website and recorded 1.45 million
unique visitors in March 2011.
During the year, we brought to market a host
of exciting mobile, Tv and tablet applications.
Through in-house research and development,
we introduced successful applications including
ILoveDeals, WheresApp, Property Buddy and
De!ite – Singapore’s first multimedia lifestyle
magazine application. ILoveDeals was one of
Singapore’s top downloaded apps. WheresApp
allows users to locate their friends on a virtual
map, communicate with them through instant
messaging and group chats, and organise
meetings. Our customers who are sports fans
also got to catch world-class sporting action via
Mobile ESPN on their mobile devices.
AMPedTM, SingTel’s award-winning and unlimited
music download service, boosted its library to more
than two million songs from the world’s biggest
music providers – EMI Group, Universal Music
Group, Sony Music and Warner Music Group. Fans
made hundreds of thousands of downloads. AMPed
continues to be a real differentiator for SingTel,
thrilling customers with experiences that money
cannot buy, including getting up close and personal
with Justin Bieber, Fish Leong and the cast of Glee.
ANNUAL REPORT 2010/2011 33
operating and Financial review
Business in Singapore
As a result of our complementary strategies on
handsets and applications, SingTel acquired a record
156,000 postpaid mobile customers. Many of these
new customers are smartphone users, who now
comprise half our total postpaid customer base.
mio Tv grew stronger and became a significant
contender in Singapore. It ended the year
with 292,000 customers and in May, crossed
the 300,000-customer mark. During the year,
we delivered a series of blockbuster content
including the 2010 FIFA World Cup™, Barclays
Premier League (BPL), UEFA Champions League,
ESPN Star Sports and Bloomberg Television.
We changed the game with
locally-made
interactive Tv
BPL productions,
capabilities and were the first to offer 3D
movie content to residential homes. We are
constantly enhancing our content offerings to
meet customer needs and this strategy will
continue when the cross-carriage regulations
are introduced.
innovative
SingTel also
launched the exStream suite
of consumer fibre services. Beyond providing
customers with high-speed fibre broadband
connections,
attractive
infotainment services and applications to access
social networks, high quality video chats, Tv,
games, and email services on one personalised
portal.
exStream
offers
Continuing to Innovate and win in ICT
In FY10/11, SingTel gained market share not
only in Singapore but also in the competitive
Asia Pacific multinational data network arena.
In Internet Protocol virtual Private Network (IP
vPN), we increased our regional market share
from 19 per cent to 21.7 per cent, which is almost
<
SingTel offers a range of
in-house developed, innovative
and exciting apps to enrich
our customers’ lifestyles
^
First to offer the Samsung
Galaxy S with a special
appearance by Korean
boyband, Super Junior
2,000,000
Songs in AMPed Library
120,000
Users of the SingTel Cloud
double the nearest competitor, cementing our
position as a leading ICT provider.
SingTel is the leading telco provider of cloud
services in the region, with over 120,000 users
and over 800 enterprises on cloud services.
With our international network and unparalleled
capabilities, we are well positioned to capture
the significant opportunity for managed data
services growth in Asia Pacific.
solutions
We offer on-demand computing resources,
Software-as-a-Service
from our
mybusiness.singtel.com online portal and
PowerON Compute – Asia’s first enterprise
hybrid cloud service that allows customers
to reduce operating costs by more than 70
per cent.
In an industry breakthrough, SingTel introduced
ICT services which are on-demand and
scaleable in real time. Enterprise customers
enjoy unprecedented business agility and lower
operating costs. SingTel’s OneOffice suite, a
collaboration with Google, allows customers to
achieve cost savings of as much as 90 per cent.
In September 2010, SingTel together with its
i.Luminate 2010, Asia’s
partners presented
largest business innovation forum. It featured
more than 50 global distinguished thought-
leaders in innovation across industries and
showcased 100
ICT solutions to
intelligent
transform businesses for success. We also
hosted Accelerate 2010, bringing together one
of the largest gatherings of global and local
software
and
developers,
research institutes in the Asia Pacific.
entrepreneurs
34 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
We energised our brand with
the theme ‘Amazing things
happen when you dream big’.
By daring to dream big, we
grew new businesses while
maintaining our leadership
position in key markets.
^
SingTel’s second satellite ST-2
was successfully launched into
orbit following an impressive
lift-off from Kourou, French Guiana
to systems
SingTel’s wholly-owned
subsidiary, NCS
made significant contributions in the area of
business solutions, from growth in applications
management
integration and
business process outsourcing services. NCS
also won an
important contract from the
Ministry of Education. At S$850 million
over an eight year period, the infrastructure
management project
the biggest ever
contract for us. The win also strengthens NCS’
position in the education market.
is
robust networks and Infrastructure
Extensive network
is a key
infrastructure
differentiator for our business. Leveraging the
Next Generation National Broadband Network
deployed by OpenNet and SingTel’s own extensive
fibre infrastructure, we unleashed our high-speed
fibre offerings to consumers and businesses.
As the key subcontractor for OpenNet, we played
a critical role in the islandwide fibre rollout.
The high-speed services offer a range of
downlink speeds of up to 200 Mbps, uplink speeds
of up to 100 Mbps and international bandwidth
of up to 25 Mbps. SingTel’s fibre network is
scalable and capable of providing even higher
speeds in the future to meet the needs of retail
and wholesale customers.
We have the largest number of mobile base
stations installed with 3,000 GSM and 3G base
stations. In FY10/11, we upgraded our mobile
network to 42 Mbps. This will ensure we
continue to provide the best mobile broadband
performance in terms of coverage, quality,
consistency of connection and reliability.
SingTel’s second satellite, ST-2, was launched
successfully on 21 May 2011. SingTel is the
only homegrown company in Singapore to own
commercial satellites and ST-2 will increase
capacity to meet growing customer demand for
fixed and mobile satellite services in broadcast,
maritime and oil and gas industries in the
Middle East, Central Asia, Indian sub-continent
and Southeast Asia.
During the year, SingTel embarked on trials of
Long Term Evolution (LTE). We are exploring
several options, working closely with network
providers and handset manufacturers to ensure
alignment of network readiness and availability
of compatible devices for the commercial launch
of LTE services planned for end 2011.
International Sports action Up Close
Our close association with sports
inspired
Singaporeans to dream big as athletes and as
sports fans.
SingTel’s sponsorship of the world’s first Youth
Olympic Games held in Singapore included
support for young athletes as well as a school
engagement programme to connect students
with national athletes. As the official multimedia
services provider, we developed special services
including 3D navigational maps and social
multicultural chat platforms.
We also continued our successful partnership
with Formula One™ that was first forged in 2008,
and renewed our partnership to be the Title
Sponsor for the Formula 1 Singapore Grand Prix
in Singapore for two more years in 2011 and 2012.
Now into the fourth year of this partnership, we
will continue to act as trail-blazers to bring the
best to our customers in Singapore and around
the world.
ANNUAL REPORT 2010/2011 35
operating and Financial review
Business in Australia
REvENUE
+3.7%
a$9.28b
Optus delivered strong operating
revenue and EBITDA growth as
well as improved cash flow in a
highly competitive market.
AUStRAlIA BUSINESS
Operating revenue by division
Mobile
Fixed
Financial Year Ended 31 March
2011
(A$ million)
2010
(A$ million)
Change (%)
5,977
5,573
Business and Wholesale
1,967
2,004
Consumer and Small-Medium
Business (SMB)
Inter-divisional
Total
Operational EBITDA
Operational EBITDA margin
Net profit
1,348
(8)
9,284
2,334
25.1%
776
1,384
(11)
8,949
2,153
24.1%
676
7.2
-1.8
-2.6
-24.8
3.7
8.4
14.7
36 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
EARNINGS REvIEW
Optus, SingTel’s largest subsidiary and Australia’s number two
telecommunications operator, delivered strong operating revenue
and EBITDA growth as well as improved cash flow in a highly
competitive market.
Operating revenue grew 3.7 per cent to A$9.28 billion on the back
of robust mobile service revenue growth of 8.4 per cent. Total
mobile customer base exceeded 9 million as at 31 March 2011.
Fixed revenues, however, declined as Optus continued to exit
marginal resale services.
EBITDA for the year rose a strong 8.4 per cent to A$2.33 billion
driven by contributions from all business segments. Net profit
grew 15 per cent to A$776 million.
Optus Mobile contributed 64 per cent to Optus’ operating revenue
and 67 per cent to Optus’ EBITDA. Mobile revenue grew 7.2 per
cent over the year to A$5.98 billion, matched by EBITDA growth
of 7.4 per cent.
Optus added strong postpaid net additions of 582,000 in the year,
underpinned by robust demand for smartphones and wireless
broadband. Reflecting its success in penetrating the wireless
broadband market, a total of 1.28 million customers were
provisioned with High Speed Packet Access (HSPA) broadband
service as at end March 2011, up from 907,000 customers a
year ago. Prepaid customer base declined by 12,000 from a year
ago, impacted by a higher than average churn rate on certain
international calling cards.
postpaid
(ARPU) was stable.
Blended average revenue per user
grew
broadband,
ARPU
Excluding wireless
3.8 per cent. With
increased data usage and higher
penetration of wireless data products, SMS and other data
revenue grew to 40 per cent of ARPU, up from 36 per cent
a year ago. Reflecting continued focus on driving data growth,
non-SMS data revenue constituted 18 per cent of ARPU, up from
13 per cent in the previous year.
Business and Wholesale Fixed accounted for 21 per cent of Optus’
operating revenue and 23 per cent of Optus’ EBITDA. Revenue was
A$1.97 billion for the year, down 1.8 per cent from the previous
year. Total Business fixed revenue declined 3.0 per cent on lower
ICT and Managed Services, while Wholesale fixed revenue was
stable with continued satellite growth partly offset by lower voice
revenue.
EBITDA increased 11 per cent, driven by Optus’ on-net strategy
and careful cost management.
Consumer and Small-Medium Business Fixed contributed
15 per cent to Optus’ operating revenue and 10 per cent of
Optus’ EBITDA. Consistent with its strategy of focusing on
on-net customer growth, Optus continued to exit marginal resale
services. Accordingly, consumer fixed on-net revenue was up 2.0
per cent while off-net revenue declined 42 per cent, resulting in
an overall decline in consumer fixed revenue of 2.7 per cent to
A$1.17 billion. The proportion of on-net revenue in consumer
fixed was 94 per cent, up from 89 per cent a year ago, contributing
to the improved EBITDA.
Continuing demand for Optus’ market-leading Fusion plans and
a range of new broadband offers lifted on-net broadband
customer base by 40,000 in the year to reach 960,000 as at
31 March 2011.
EBITDA grew 10 per cent, driven by improved on-net revenue mix
and yield management initiatives.
ANNUAL REPORT 2010/2011 37
operating and Financial review
Business in Australia
FoCUS For FY11/12
Drive mobile growth by competing with differentiated mobile
value added services.
Increase depth and reach of services with ongoing network
investments.
Continue to build scale and focus on profitable on-net services
in fixed-line.
REvENUE BY BUSINESS DIvISIONS
a$9.28b
2011
Mobile
Optus Business and
Optus Wholesale Fixed
Consumer and SMB Fixed
64%
21%
15%
OPERATIONAL EBITDA BY BUSINESS DIvISIONS
a$2.33b
2011
Mobile
Optus Business and
Optus Wholesale Fixed
Consumer and SMB Fixed
67%
23%
10%
38 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Feu feu feuismodio
essim zzriustrud ea
aciduisi Cutem
YEAR IN REvIEW
Optus sustained strong growth in a highly
competitive market, by staying focused on
delivering an outstanding customer experience,
enriching our portfolio of products and services,
and investing in our network. This focus has
helped Optus deliver EBITDA growth for the
fourth consecutive year.
Differentiating to Drive Mobile growth
Optus continued to differentiate itself by offering
leading-edge devices, coupled with innovative
rate plans and personalised content and
applications to deliver more value to customers.
This enabled Optus to attract 570,000 new
mobile customers during the year and deliver
mobile revenue growth of 7.2 per cent.
Recognising it was a year that Australians
readily embraced smartphones, Optus offered
generous data allowances and free access to
popular social networking sites, and secured
exclusivity
leading handsets such as
Samsung Galaxy S at the time of launch.
for
Streak Android tablet device in Australia, as well
as introducing our own entry-level tablet for
prepaid customers, the Optus My Tab.
Building on our commitment to small and medium
businesses
(SMB), Optus partnered TrueLocal.
com.au to give SMB mobile customers a business
advertising package to promote their businesses
online.
Strengthening our presence
in the enterprise
market, Optus was selected by BMW Australia as
its whole-of-business telecommunications provider
for fixed and mobile services as part of a three-year
multimillion dollar deal. In the government sector,
the Department of Education in Western Australia
renewed its contract with Optus Business for the
provision of mobile services for another three years.
We further cemented our position as the number one
wholesale service provider for mobile and mobile
broadband services by partnering Amaysim, Tru
and iiNet.
Optus also drove innovation in the Australian
prepaid mobile market by expanding
its
offerings with the launch of Optus Dollar Days
in October 2010, allowing customers to set
their own plan limits from as little as A$1 a
day for unlimited access.
embracing a Digital world
The creation of the Optus Digital Media division
with dedicated talent resources in September
2010 has enabled Optus to deliver rich, highly
personalised digital services across a range
of devices.
the explosive demand
for wireless
With
broadband, Optus led the market by offering a
new range of mobile broadband cap plans with
different rates for peak and off-peak usage.
Optus also pushed the boundaries in the tablet
market by being the first carrier to offer the Dell
and
Leveraging the Optus Open Network (1), we
developed
introduced useful mobile
applications including Optus Trafficview and
Optus-Now. Trafficview gives customers a real-
time view of traffic conditions using anonymous
aggregated data from the Optus mobile network,
ANNUAL REPORT 2010/2011 39
^
The Optus Open Network
covers 97% of the Australian
population for voice and data
Note:
(1) The Open Network is the brand
for Optus’ combined 2G and
3G mobile networks.
operating and Financial review
Business in Australia
while Optus-Now provides the latest news,
weather and traffic information.
As the exclusive Australian Mobile Broadcaster
of the 2010 FIFA World Cup™, Optus delivered
nearly 400,000 streams of 2010 FIFA World
Cup™ games. Optus also provided its mobile
customers with exclusive content and free live
streaming of matches for the 2011 Australian
Open as the telecommunications partner. The
Australian Open mobile streaming service
was further boosted with the introduction of a
new Tv and video app for Apple iPhoneTM and
selected Android handsets and tablets.
the business market, Optus Business
In
into enterprise cloud services
expanded
with the
launch of Optus Cloud Solutions,
providing customers such as Curtin University
of Technology and Savills with virtualised
computing and storage capacity on demand.
Additionally,
Optus signed an agreement
with Google in March 2011 to offer Google
Apps for Business™ as part of its new range of
cloud-based solutions for SMB customers.
expectations
Creating outstanding Customer experience
Optus continues to respond to customers’
their
changing
telecommunications providers by delivering
experience. Optus
a
interaction points by
enhanced customer
investing
information
systems, human resources, retail distribution
and internal processes.
infrastructure,
customer
superior
in our
of
Our leadership and excellence in customer
experience were recognised with multiple
awards from the Customer Service Institute
of Australia.
Optus continued to
differentiate itself by
offering leading-edge
devices, coupled with
innovative rate plans and
personalised content and
applications to deliver
more value to customers.
<
Innovative rate plans and mobile
devices attract customers
to an Optus ‘yes’ store
Feu feu feuismodio
essim zzriustrud ea
aciduisi Cutem
We continue to invest in systems to provide
customers with improved online capabilities
and self-service options. To date, more than
two million Optus customers have signed up
for online self-service while the Optus My
Account mobile app has been downloaded
more than 750,000 times, allowing customers
to manage their accounts straight from their
mobile devices. New online help and support
tools have also been recently introduced such
as Bill Estimator, a new bill forecasting tool for
selected Optus SMB mobile customers.
First-call resolution for general and billing
enquiries into call centres has improved by
15 per cent, while the number of enquiries
into our call centres from mobile postpaid
customers has halved.
As retail forms an important component of a
customer’s experience, we increased our Optus
branded stores nationally to 270. In regional
Australia, we brought 3G coverage for the first
time to regional towns such as Digby (victoria),
(New South Wales), Dingo Beach
Kyalite
(Queensland) and Carpenter Rocks
(South
Australia).
invested more
ongoing network Investments
As Australia’s only full service communications
provider with its own fixed, mobile and satellite
infrastructure, Optus
than
A$1 billion in its networks, including upgrading
the metropolitan Hybrid Fibre Coaxial (HFC)
network to DOCSIS 3.0 technology. Testament
to our ongoing network investment, the Optus
network proved to be robust and resilient
during the recent Queensland natural disasters,
despite extremely adverse weather conditions.
40 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
^
Grammy-award winner Kelly
Rowland celebrates the launch
of the iPhone 4 with Optus
>
Our people test the Optus Open
Network coverage around
Sydney to ensure a positive
customer experience
In December 2010, the Optus Open Network
reached a new milestone by covering 97 per
cent of the Australian population for both voice
and data. This positions Optus as the only
carrier capable of challenging the incumbent
on mobile network coverage and speed. To offer
more choices to Australians, Optus expanded its
mobile network footprint with the rollout of more
than 660 new base stations across Australia.
We also successfully conducted the first phase
of our Long Term Evolution technology trials.
In addition, Optus made a significant investment
in transmission and backhaul capacity, with
fibre backhaul now available at more than 80
per cent of metropolitan base stations. Optus
purchased an additional 10 MHz of paired
spectrum in the 2100 MHz band in metropolitan
Australia, which doubled our metropolitan
spectrum capacity. We were also the first carrier
to acquire new regional spectrum licences
available in the 2100 MHz band at nearly 1,000
regional sites in July 2010, and are well placed
to continue our regional network expansion.
In August 2010, Optus celebrated 25 years of
satellite communications with five satellites
currently in orbit, and further deepened our
leadership position with the announcement
of the launch of our next satellite, Optus 10,
in 2013. Optus was also awarded multiple
multimillion dollar contracts by broadcasters
to deliver digital free-to-air television services
to blackspot areas as part of the Government’s
ongoing digital switch over programme.
advocating reform for Market Innovation
and Competition
Optus remains a champion for reform to deliver
more
the
innovation and competition
telecommunications industry in Australia.
in
Over the year, there was historic regulatory reform
in the fixed-line telecommunications sector. As
a strong challenger, Optus is in a strong position
to take advantage of the Australian Government’s
planned National Broadband Network (NBN)
which has the potential to positively reshape the
country’s fixed-line sector.
With the historic milestone of the passing of the
Competition and Consumer Safeguards bill and
NBN Access Arrangements and NBN Companies
bills, Australia will have the regulatory framework
to deliver a level playing field and improve
competition in the fixed-line market. As the
Australian Government presses ahead with the
rollout of the NBN, Optus will continue to advocate
for the NBN Co. to remain true to competition to
ensure NBN’s long term success.
truly
integrated experience
Optus will continue to adopt new service models
to take advantage of the development of
applications for high-speed broadband and
for
deliver a
customers across both fixed and mobile
devices. Following our HFC cable network
upgrade, Optus customers
in Brisbane,
Melbourne and Sydney can already experience
broadband speeds of up to 100 Mbps to take
advantage of high-speed content and services.
ANNUAL REPORT 2010/2011 41
operating and Financial review
Business in the Region
The regional mobile associates
continued their strong momentum
in customer acquisitions.
SHARE OF PRE-TAx PROFIT
ASSOCIAtES
-11.2%
Share of pre-tax profit (2)
Regional mobile associates
Telkomsel
Bharti
S$2.14b
Notes:
(1) Numbers in above table
may not exactly add due to
rounding.
(2) Exclude the Group’s share
of Bharti’s one-time brand
launch cost recognised as
exceptional item of the Group.
(3) Excluding the share of net
loss, acquisition financing and
transaction costs of Bharti
Africa acquired in June 2010.
- India, Bangladesh and Sri Lanka (South Asia)
- Africa
AIS
Globe
Warid
Pacific Bangladesh Telecom
Other associates
Group share of associates’ pre-tax profit
(ex-Bharti Africa) (3)
Share of post-tax profit (2)
Regional mobile associates
Telkomsel
Bharti
- India, Bangladesh and Sri Lanka (South Asia)
- Africa
AIS
Globe
Warid
Pacific Bangladesh Telecom
Other associates
Group share of associates’ post-tax profit
(ex-Bharti Africa) (3)
Financial Year Ended 31 March
2011
(S$ million)
2010
(S$ million)
Change
(%)
855
940
-9.0
859
(93)
767
276
199
(61)
(16)
2,019
122
2,141
2,233
978
-
978
215
235
(63)
(13)
2,291
119
2,410
2,410
-12.1
nm
-21.6
28.2
-15.3
-3.5
25.4
-11.9
2.8
-11.2
-7.3
638
682
-6.4
726
(122)
604
191
138
(62)
(16)
1,492
108
1,601
1,722
848
-
848
148
165
(63)
(13)
1,766
109
1,875
1,875
-14.4
nm
-28.8
28.6
-16.3
-2.2
25.4
-15.5
-0.8
-14.6
-8.1
42 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
EARNINGS REvIEW
The Group’s share of pre-tax profits from the associates declined
11 per cent to S$2.14 billion. As a result of tax expenses from
Bharti Africa’s profitable entities, overall post-tax contributions
from the associates decreased 15 per cent from the previous
year. Excluding the losses of Bharti Africa, the pre-tax and post-
tax contributions from the associates would have been lower by
7.3 per cent and 8.1 per cent respectively. On an overall basis, the
movements in the regional currencies did not have a significant
impact on the associates’ contributions.
The regional mobile associates continued their strong momentum
in customer acquisitions. Including mobile customers across
operations in 19 countries covering India, Bangladesh, Sri Lanka
and across Africa, Bharti’s total mobile customer base across
all geographies reached 212 million as at 31 March 2011, an
increase of 66 per cent from a year ago. Telkomsel registered
21 per cent increase in its customer base to 99 million as at
31 March 2011 and crossed the significant 100 million mark
in April 2011. The Group’s combined mobile customer base
reached 403 million, an increase of 37 per cent or 110 million from
a year ago.
Telkomsel accounted for 40 per cent of the Group’s share
of total post-tax profits from associates, up from 36 per
cent last year. Operating revenue grew 2 per cent on strong
customer growth partly offset by average revenue per user
dilution from tariff pressures amid intense competition in
Indonesia. With higher marketing spend and
increased
network related costs as well as lower fair value gains
on mark-to-market valuation of
its US Dollar and Euro
denominated
liabilities, Telkomsel’s post-tax contribution
declined 6.4 per cent to S$638 million. Telkomsel is the market
leader in Indonesia with approximately 46.4 per cent subscriber
share as at 31 March 2011.
In South Asia, EBITDA increased on the back of 11 per cent growth
in operating revenue despite keen competition. Bharti launched
3G services across 7 telecom circles in the March 2011 quarter.
Consequently, post-tax contribution was down 14 per cent on
higher depreciation and amortisation, including the first time
recognition of amortised 3G license fees as well as lower fair
value gains on mark-to-market valuation of its US Dollar and
Japanese Yen denominated borrowings. Including the net loss
and related acquisition financing and transaction costs of Africa
amounting to S$122 million, Bharti’s overall post-tax contribution
declined 29 per cent to S$604 million. Bharti continued to lead
the Indian mobile market with a subscriber share of 20 per cent
as at 31 March 2011.
AIS, the leading mobile phone operator in Thailand, recorded
strong growth in profits. Post-tax contribution rose 29 per cent to
S$191 million, underpinned by the economic recovery in Thailand,
strong data revenue growth and successful cost management.
AIS maintained its lead in the Thailand mobile market with
approximately 44.3 per cent subscriber share.
Globe, the second largest mobile phone operator in the Philippines,
lower operational performance amid continued
recorded
competitive pressures. Service revenue grew 3 per cent driven
by growth in broadband and data services. With higher marketing
spend and increased network costs, Globe’s post-tax contribution
declined 16 per cent to S$138 million.
In Pakistan, Warid recorded higher operating revenue on an
enlarged customer base. Including lower fair value losses on
mark-to-market valuation of its US Dollar denominated liabilities,
the Group’s share of Warid’s net loss amounted to S$62 million,
down from S$63 million in the previous year.
Bharti contributed 38 per cent to the Group’s share of associates’
post-tax profits, 7 percentage points lower than a year ago.
The Group received gross dividends totalling S$1.19 billion from
its associates, 25 per cent higher from the previous year, boosted
by special dividends received from AIS during the year.
ANNUAL REPORT 2010/2011 43
operating and Financial review
Business in the Region
FoCUS For FY11/12
Strengthen associates’ operating and financial performance.
build associates’ capabilities to capture mobile broadband
growth in emerging markets.
SHARE OF ASSOCIATES’ PRE-TAx PROFITS
S$2.14b
2011
Telkomsel
Bharti
AIS
Globe
Warid,
40%
36%
13%
9%
2%
Pacific Bangladesh Telecom
and Others
CASH DIvIDENDS RECEIvED FROM ASSOCIATES (1)
S$1.19b
2011
Telkomsel
AIS (2)
Globe
Bharti, Southern Cross,
SingPost and Others
40%
39%
11%
10%
Notes:
(1) Cash dividends received
from overseas associates are
before related tax payments.
(2)
Include special dividends.
44 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
SingTel plays a
strategic investor
role and readily
renders assistance
and support to our
investments.
>
Bharti Airtel unveils new Wave
logo aimed at synergising
its global operations
YEAR IN REvIEW
In our regional businesses, SingTel plays a
strategic
investor role and readily renders
assistance and support to our investments. We
constantly seek ways to improve our associates’
operational performance by sharing our
expertise and leveraging our extensive networks
to drive collaboration. With
this spirit of
cooperation and collaboration, the Group is well
positioned for high performance in the region.
pursuing new engines for growth
Heralding a new era in connectivity, Bharti
debuted 3G services in India in January 2011.
Following the issuance of 3G licences, the high-
speed mobile experience was rapidly rolled
out to 21 cities across seven circles within
two months, starting with Karnataka – Bharti’s
largest circle by revenue market share.
in
This initiative redefines the mobile internet
experience
India and allows customers
to access entertainment, utility, commerce
and health services via their mobile phones.
Accompanying the service is a set of easy-to-
understand 3G tariffs, with personalised data
usage limits, so that customers can manage
their 3G data usage effectively.
We also assisted our associates with their bids
for 3G services in their respective countries.
SingTel facilitated knowledge sharing in data
profitability, network planning, branding and
marketing and structuring of price plans. We
constantly harness the experience of operators
within the Group which have already been
successful in their bids, and champion the
exchange of best practices.
Similarly, we guided AIS in their preparation
for the September 2010 3G 2.1GHz auction.
However, the auction plans by the National
Telecommunications Commission encountered
legal complications and were eventually
suspended by a court injunction. Despite this,
AIS expects that Thailand should still have 3G
2.1GHz licensing within the next two years.
The Group also collaborated on a number of
strategic and tactical marketing projects in
the year, including the joint introduction of the
Samsung Galaxy S smartphone. Drawing on the
rich experience of our operations in Singapore
and Australia, we helped our regional associates,
AIS, Globe and Telkomsel to formulate relevant
go-to-market strategies for their local markets.
widening our reach
In a globalised world, there are increasingly
fewer remaining high growth markets for
telecommunications. Africa is one such market.
In a bold move, the Group gained a significant
presence in the massive markets of Africa via
Bharti’s acquisition of mobile operations
in
16 countries. The acquisition was completed in
June 2010.
This acquisition is historic on several fronts
– it is the largest-ever telecommunications
takeover by an Indian firm and enlarges Bharti’s
presence to 19 countries, propelling it to become
the world’s fifth largest wireless company.
Shortly after, Bharti unveiled a fresh brand
identity which manifested the company’s new
international positioning with a youthful vibrancy.
ANNUAL REPORT 2010/2011 45
operating and Financial review
Business in the Region
SingTel remains
committed to leveraging
the expertise of the Group
to help our associates
improve their operations.
A catchy signature tune was also composed to
complement the new visual identity.
AIS, Globe, Telkomsel, Warid and CityCell also
continued to add more mobile customers in
the year. Including Bharti’s mobile customers
in Asia and Africa, the Group’s combined
mobile customer base grew to 403 million as at
31 March 2011, from 293 million a year ago.
Staying Competitive through Innovation
Some of our associates’ home markets
experienced intense and high levels of competition
during the year. But by being part of a larger group,
the associates are able to share experiences and
insights with one another, especially since they
are in different stages of development. These
lessons help our associates as they navigate
challenges in their own markets.
In the competitive telecommunications arena,
constant innovation is necessary.
Globe continued to operate in a very challenging
environment with mobile penetration rates
reaching over 90 per cent and increased multi-
SIM usage, leading to service providers competing
for share of spending in a declining market. In
addition, the shift towards flat-rate, unlimited
value promotions accelerated the erosion of prices
and margins.
Globe revamped its price plans and created two
popular prepaid plans, All Text Offer and Super
Unli, that helped increase net additions and
allowed the Philippine mobile operator to win
back market share from its larger competitor.
Globe also introduced the postpaid My Super
Plan which allows customers to select and
design their postpaid plan according to their
lifestyles, with a choice of consumable plans,
freebies, services and handsets.
^
Telkomsel introduces simPATI
Freedom, a mobile plan that
gives customers the freedom to
choose from a range of services
that best suit their needs
In Indonesia, Telkomsel continues to be the
market leader despite aggressive competition
in a market with 10 other operators. With
mobile penetration levels in excess of 90 per
cent and the market near saturation point,
operators have tried to increase penetration by
offering new competitive pricing promotions
with more minutes and SMS. To respond to
intensive price wars, Telkomsel introduced
simPATI Freedom, a plan that gives customers
the freedom to choose from a range of services
that best suit their needs. Recognising the
popularity of social networking, simPATI
Freedom offers a free weekly package of
Twitter messages.
The Group’s collaboration efforts also extended
beyond voice and data. One example is the
introduction of mCommerce services.
Bharti introduced India’s first mobile wallet
service by a telco, Airtel Money, which enables
customers to make secure payments for
anything from groceries to electrical bills using
their mobile phones.
CityCell launched a similar service, CityCell
Moneybag, which permits m-payment for utility
bills in Bangladesh.
46 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
>
Sharing best practices at the
SingTel Regional CEO Forum
These marked the start of a trend towards
mCommerce services as customers become
accustomed to the experience of using their
mobile phones as a convenient lifestyle device.
to
Telkomsel partnered Google
introduce
cloud
Business Connect, a world-class
computing solution for its corporate customers.
The solution brings together the Google Apps
for Business suite with Telkomsel’s national
network and broadband service, providing a
powerful toolkit of web-based applications.
Business Connect brings the latest innovations
while dramatically
and
maintenance needs associated with traditional
ICT infrastructure and enhancing productivity.
reducing
costs
adding value to regional operations
to
SingTel remains committed
leveraging
to help our
the Group
the expertise of
associates improve their operations. Regular
forums to share best practices and discuss
operational issues are held by these teams
– Sales and Marketing, Finance, Technical,
Regulatory, Corporate Services and Innovation.
The groups are also actively engaged
in
regional projects that bring scale benefits for
all operators.
One of the initiatives developed from the regional
working groups is the Long Term Evolution
(LTE) trial. LTE is the technology of the future,
enabling high-speed mobile service offerings.
SingTel embarked on regional LTE trials in
collaboration with Optus, Globe and Telkomsel
to ensure common technical standards and to
determine the best strategy for its adoption in
the respective markets.
Phase 1, to test and validate basic LTE
functionalities, involved the pairing of each of
the six trial network vendors with one of the four
companies to optimise resources and costs.
This was followed by Phase 2 which was rolled
out progressively from December 2010 and
focused on advanced LTE features. The trials
will lay the groundwork to establish a regionally
compatible LTE network to boost growth in the
mobile broadband business for the SingTel
Group.
During the year, we also introduced Lean Six-
Sigma (LSS) to our subsidiaries and associates
to help them improve efficiency by elevating
quality standards and operational excellence.
AIS and Warid started their pilot projects
while the rest of the Group embarked on some
200 LSS projects. In total, more than 3,000
individuals were LSS-certified during the year.
Our LSS efforts are also geared towards building
talents who possess good understanding of
the business needs of the region and who
can be deployed to drive regional level projects
in the future.
ANNUAL REPORT 2010/2011 47
Corporate Social Responsibility
The SingTel Group is a committed and
responsible corporate citizen. We are
passionate about making a positive impact
on the communities we operate in, beyond
delivering on our business objectives.
We are devoted to the cause of sustainable
growth. We strive to touch lives through
our community and environmental efforts.
We attract and groom talents, who embody
the ‘can-do’ spirit that challenges oneself,
and make the journey with SingTel as
we scale new heights.
intertwined. Recognising
impact of SingTel’s operations cuts
The
types of activities.
industries and
across
is
the community
Our relationship with
intricately
these
interdependencies, we embrace our role as
a committed corporate citizen and strive to
contribute towards the betterment of society
through our community and environmental
efforts.
less
Touching Lives in the Community
The SingTel Touching Lives Fund (STLF), set up
in 2002, continued to support underprivileged
and
fortunate children as well as
youths in Singapore. On 4 July 2010, about
families
500 SingTel employees and
participated in the SingTel-Singapore Cancer
Society (SCS) 2010 Race Against Cancer, to
raise funds for SCS, an STLF beneficiary this
year. Both the 7.5km competitive and 5km
fun races saw wholehearted support and
participation from SingTel’s senior management
and our business partners.
their
One of the signature events of the STLF is
Fold-A-Heart, where SingTel donates S$1
for every origami heart folded. As part of
outreach activities, the STLF team visited
Northlight School and rallied the students to
less fortunate. Some
fold hearts for the
1,000 hearts were folded by the school’s
students and teachers. In total, more than
80,000 hearts were folded.
As a result of these and other fundraising
activities, the STLF raised a record S$2.48
million during the year for our charities.
This brings the total amount contributed by the
STLF since its inception to about S$20 million
for more than 20 charities.
48 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
The SingTel Touching Lives
Fund has raised about
S$20 million for more
than 20 charities since
its inception in 2002.
>
A signature event of STLF,
SingTel donates S$1 for every
origami heart folded to help less
privileged children and youths
their
lives. Partnering
Youths represent our future and SingTel’s
Australian arm, Optus, has been leveraging
technology to help children who face challenges
in
the Starlight
Children’s Foundation, Optus has introduced
the Livewire programme in 26 metropolitan
and regional hospitals across Australia, where
young people with serious
illnesses or
disabilities can access online chat rooms,
create blogs, play games, listen to music
and watch videos. Thanks to the wireless
connectivity and computers donated under
the programme, the young people can now
interact with their peers who are going through
similar challenges, thereby reducing their social
isolation in a safe online environment.
In an additional effort to reconnect disengaged
youths
in Australian communities, Optus
awarded close to A$150,000 worth of funding
to 31 not-for-profit organisations across
Australia that focus on helping young people
reach their full potential in life and work to
build social inclusion.
for 50
Technology was also an enabler
disadvantaged children in regional Australia
with Optus partnering
the Smith Family
and
launching the mobile student2student
programme, which saw Optus donating mobile
handsets and prepaid credit. The programme,
is aimed at helping
piloted
children
literacy skills via
their
weekly reading sessions with mentors using
Optus mobile technology. Results have been
promising, with children under the programme
demonstrating improvements to their literacy
levels.
in May 2010,
improve
Doing our Part for Others
For most, donating money is easier than parting
with their time. At SingTel, we wish for all staff
to embrace the spirit of volunteerism and
experience the joy that comes with helping
others in need.
To promote this, we introduced the concept of
“VolunTeaming”, a combination of volunteering
and team building that allows colleagues
to bond over a meaningful activity. Over
the year, numerous VolunTeaming activities
were organised by enthusiastic employees.
The Business Analysis & Planning department
helped children from MINDS Lee Kong Chian
Gardens School with their art and craft, while
the Procurement & Supply Chain Management
team spent two days building bookshelves
and creating a
the
classrooms of the APSN Tanglin School. Both
are beneficiaries of the STLF.
reading corner
in
These are but two examples of the volunteering
projects
that SingTel employees engaged
themselves in. In total, more than 800 employees
from 18 departments volunteered their time for
such worthy causes during the year.
To further encourage volunteerism, we started
an online journal named My Volunteer Diary,
for staff to record their volunteering activities
and be informed of upcoming opportunities.
Employees can also key in their volunteering
interests and request to be matched with
incentive,
suitable activities. As an added
SingTel offered the three volunteers who put
in the most hours cash donations to any
STLF beneficiary of their choice.
ANNUAL REPORT 2010/2011 49
Corporate Social Responsibility
We also did our bit to support nation building
in Singapore by sending an 80-strong staff
contingent to participate in the National Day
Parade 2010. Our volunteers from across the
Singapore business spent about 20 Saturdays
rehearsing for the high profile event.
Caring for the Environment
Being green is more than a statement, it is a
business philosophy based on responsible
corporate citizenship and respect
the
environment. As a group, we do our utmost
to ensure that our operations do not disturb
the delicate balance of the natural world.
for
For the second consecutive year, SingTel
organised Plant-A-Tree Day, where staff
could directly play their part in preserving
the environment.
In July 2010 at Mandai
Reserve, some 200 employees planted
led by Group CEO Chua Sock
100 trees,
Koong and Group Director, Human Resource
Aileen Tan who also heads the Group CSR
department. To further promote the event,
we marked our 10 years of using e-cards by
pledging an extra dollar to the Plant-A-Tree
fund
in the next financial year for every
employee who sent an e-card greeting.
Eco trips were also organised to the Marina
Barrage as well as Chek Jawa, for staff to
see firsthand natural eco-systems and learn
about the importance of sustainable development
in Singapore.
On 1 March 2011, we introduced the Project
LESS campaign to encourage staff in Australia
and Singapore to adopt simple green acts to
care for our environment. Various activities
were organised, such as the submission of green
tips and an environment-themed photo contest.
<
Optus partners the Smith Family
in a mobile student2student
programme to help children
improve their literacy skills
Photo courtesy of Pilbara News
^
A record S$2.48 million
was raised for six
charities by the STLF
Also as part of Project LESS, SingTel supported
‘Recycle A Phone, Adopt A Tree’
Nokia’s
programme
in Singapore by encouraging
customers to recycle their old mobile phones,
accessories and chargers. Every customer
who mails or drops off a mobile phone for
recycling at selected SingTel retail outlets
will have a tree planted in his or her name
by Nokia.
AIS played its part for the environment by
joining hands with the Ministry of Natural
Resources and Environment to implement
the activity ‘AIS Gives Battery Back to the
World’ under the
‘Green Network’ theme
project. The activity raises awareness of the
possible dangers of disposing used mobile
phone batteries
invites
members of the public to send their used
batteries to AIS branches for recycling.
incorrectly, and
partnerships
Partnering Associates for Worthy Causes
strengthen
Synergistic
effectiveness. During
year, SingTel
supported 1GOAL – a global initiative to help
some 72 million children in the world attain
the opportunity to attend school by 2015.
the
With Optus and our associates – AIS,
Bharti and Globe, as well as other
global mobile operators and charities, we
promoted the campaign by sending SMSes
to all our mobile customers asking them to
support this worthy cause, with reply SMS
charges waived. 1GOAL’s objective was
to garner support to impress upon world
leaders that people care about and believe in
the value of education.
Another major worldwide environmental
initiative is Earth Hour. For one hour on
50 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
^
SingTel staff proudly take to
the National Day Parade grounds
in celebration of Singapore’s
45th year of independence
>
Optus hands out handsets
and prepaid SIMs to help
Queensland flood victims stay in
contact with their loved ones
26 March 2011, people and businesses around
the world stood united against climate change
by turning off their non-essential lights and
electrical appliances. SingTel, with Optus and
our associates, AIS, Globe, PBTL and Warid
Telecom, endorsed Earth Hour 2011 by publicising
the event and pledging our support.
Lending a Hand in the Face of Disaster
Mother Nature can cause torrential damage and
in the face of disaster, we have a responsibility
to help the communities. During the year,
SingTel responded to several natural disasters
across the globe with donations in cash and
kind. One of these disasters was the devastating
floods in Queensland, Victoria and northern New
South Wales in Australia.
Optus was quick to respond to the Queensland
floods. We were the first telecommunications
provider to restore services to the Lockyer Valley.
We also launched an appeal for staff in Australia
and Singapore to donate generously – matching
their donations dollar for dollar. A total of about
S$450,000 was raised. We also visited over
1,500 homes and businesses to restore services
and handed out 2,000 handsets and prepaid
SIMs to ensure people could get in contact with
their loved ones. We received and responded
to around 2,300 requests for assistance with
customers’ bills. In total, we contributed over
A$1.9 million in donations and services to the
flood and cyclone affected communities.
For the Pakistan flood victims, SingTel donated
S$80,000 through Mercy Relief, an independent
charitable organisation, and most recently,
we raised about S$50,000 for the victims of
the Japanese earthquake and tsunami with
donations from staff in Australia and Singapore.
We also went one step further by facilitating
donations. For example, in Australia, Optus
teamed up with the Red Cross to introduce
an SMS service for customers to make a
A$5 donation for the Japan and New Zealand
earthquakes. In Singapore, SingTel, together
with other mobile operators, set up a common
SMS code for customers to make donations in
aid of victims of the Japan disaster.
AIS went the extra mile by offering its customers
staying in Japan long-distance calls at special
rates, during the disaster period. A 24-hour
hotline was also set up for customers trying
to contact lost relatives or friends, and an
SMS service was made available for public
donations. Back on its home turf, AIS made a
public call for donations in aid of the devastating
floods in the southern region of Thailand in
March 2011.
It also despatched 1,000 AIS
survival kits containing blankets, drinking
water and mobile phones to the Red Cross.
Running a Sustainable Business
SingTel is committed to our long term goals
of sustainable development. In October 2010,
we published our
inaugural Sustainability
Report, marking our commitment to managing
our environmental footprint
in the markets
we operate.
Communicating SingTel’s one and
five-year
improvement plans and targets for sustainability,
the report is the first such document published
by a major player in the infocomm and multimedia
sector in Singapore. It adopts the reporting
principles from the Global Reporting Initiative
G3 Guidelines and follows the requirements
of the ‘B’ Application level. More on this report
can be found at http://info.singtel.com/about-us/
sustainability/sustainability-report.
ANNUAL REPORT 2010/2011 51
Our People
Key to the Group’s success is our ability to
attract the best and the brightest across
all levels – from emerging young talent to
strategic hires at senior levels to strengthen
existing expertise and build new capabilities.
to become
the region’s
Growing Together
leading
Our goal
multimedia and infocomm technology solutions
company can only be achieved through the
diverse expertise, capabilities, experience and
efforts of our 23,000 employees around the
world. Our people embody our core values of
Customer Focus, Challenger Spirit, Teamwork,
Integrity and Personal Excellence as we break
barriers and build bonds for our customers
and stakeholders.
The importance we place on our people is
reflected in the critical role of the People Plan
in our strategic business planning process. Our
‘Connect & Grow’ employee value proposition
underscores our commitment to building strong
relationships among our people and developing
talent across the company.
Also integral to this commitment is our strong
focus on employee engagement. We listen to our
employees to gather meaningful insights into
the drivers of employee engagement, motivation
and retention across the diverse aspects of our
workforce.
Our people programmes continued
to be
recognised in 2010. In Singapore, SingTel won
three Singapore HR Awards – for Leading
HR Leader, Leading HR Practices
in HR
Communications Branding and Leading HR
Practices in CSR – while NCS received the
Ministry of Manpower Work-Life Achiever Award.
^
Scholars of the SingTel
Group Undergraduate
Scholarship Programme enjoy
mentoring and internship
opportunities at the SingTel
Group locally and overseas
Attracting Talent
Key to the Group’s success is our ability to attract
the best and the brightest across all levels –
from emerging young talent to strategic hires at
senior levels to strengthen existing expertise and
build new capabilities.
tomorrow
We identify and engage with the workforce
of
through collaborations with
domestic and international tertiary institutions,
engagement through social media platforms,
and participation in graduate career fairs and
networking events. Our strategic internship and
cadetship programmes offer direct exposure to
the dynamic environment, people and work of
the SingTel Group.
The SingTel Group Undergraduate Scholarship
programme has been expanded to four countries
since its 2009 pilot in Thailand. This year, in
partnership with AIS, Globe and Telkomsel,
to students
we awarded 11 scholarships
in Thailand, the Philippines,
Indonesia and
Singapore. In addition to full scholarships at top
local universities, the scholars will also enjoy
mentoring and internship opportunities at the
SingTel Group of companies locally and overseas.
Due to the high calibre of the applicants, 12 book
prizes were also awarded to outstanding students
who reached the final selection interview.
Our graduate programmes, now in their 10th year
at Optus and fourth year at SingTel, identify new
graduate talent through a rigorous selection and
assessment process. Successful candidates
enjoy accelerated learning and development
opportunities such as cross-functional rotations,
52 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
We invest heavily in building leadership
capability so that our current and future
leaders can effectively lead and shape
a culture of empowerment, collaboration
and excellence, to deliver innovation and
a truly outstanding customer experience.
>
The SingTel Group develops its
leaders with Game for Global
Growth, a 12-month leadership
development programme
active participation
interaction with senior management.
in projects and direct
Developing Talent
We equip our people to be the best that they
can be through an ongoing, holistic approach to
development based on education, experience
and relationships, tailored to suit the needs of
different employee segments. The relationship-
based development support is especially critical
as it helps employees build internal networks
to facilitate continuous development.
programme
New employees are welcomed with a highly
interactive, multi-faceted
to
accelerate their integration into the organisation.
This includes orientation sessions, online toolkits
and being assigned a buddy. Additional e-learning
modules help our new colleagues learn more
about the organisation at their own pace.
As they grow with the company, employees
are encouraged
their
careers and discuss development plans with
their managers. Individual career development
take charge of
to
planning is integrated into the performance
management cycle and reviewed regularly.
Online career development portals, toolkits,
talks and workshops further equip staff with the
resources to evaluate and manage their careers.
The annual Singapore Learning Fiestas and
Australia Career Expos offer engaging keynote
speakers and a wide variety of informative and
interesting bite-sized talks to reach various
employee segments. This highly successful
model for fostering a culture of learning has
been adopted by several of our associates.
We leverage the scope and diversity of the
Group’s businesses to offer unparalleled career
growth and development opportunities. Job
rotations across functions, businesses, market
segments or geographies are not only encouraged
but expected. Our Regional Talent Exchange
programme – comprising short term projects
or long term assignments at different SingTel
Group entities – provides an avenue for shared
learning, benefiting employees while contributing
to the combined capabilities of the Group.
GENDER DISTRIBUTION
Singapore
Australia
Junior Officers
Senior Officers
42.3
33.0
Middle Management
39.9
Top Management
Total Distribution
26.7
38.1
57.7
67.0
60.1
73.3
61.9
38.5
27.9
16.1
13.8
32.5
(%)
61.5
72.1
83.9
86.2
67.5
Female
Male
ANNUAL REPORT 2010/2011 53
Our People
We also sponsor our top talent for full-time
master’s degrees in business or other specialist
programmes at leading overseas universities.
Grooming Leaders
Our leadership culture is an essential part of
our business success. We invest heavily in
building leadership capability so that our current
and future leaders can effectively lead and
shape a culture of empowerment, collaboration
and excellence, to deliver innovation and a truly
outstanding customer experience.
One of our key
leadership development
investments is the Game for Global Growth
(GGG) to prepare leaders across the SingTel
Group to ascend into more significant leadership
roles. This experiential leadership development
programme spans a 12-month period and
in addition to
includes executive coaching
residence programmes and action
learning
projects guided by senior executive sponsors.
The second GGG cohort in 2010 comprised
33 participants from across the SingTel Group.
to
leaders
in Action
Another Group-wide programme, Regional
(RLA), grooms high-
Leadership
potential emerging
lead and
manage business operations in a multi-national
and multi-organisational context. Programme
highlights
intense coursework at a
leading Singapore university and working
in cross-entity teams to tackle challenging
judged by SingTel
business assignments
top management.
In total, 144 participants
have gone through the RLA since the programme
began in 2006.
include
Our management team plays an active role in
grooming the next generation of leaders. We
continually refresh, monitor and invest in the
pool of emerging potential talent to ensure a
robust leadership talent pipeline. Interventions
such as education sponsorships, job rotations,
coaching and mentoring are customised to
individuals to accelerate their development
as leaders. Two of our CEOs, Hui Weng Cheong
and Allen Lew, are testament to the success
of such development programmes. They joined the
organisation as promising young graduates and
were groomed for leadership through a variety
of challenging job rotations, company-sponsored
master’s degrees and overseas postings.
Driving and Rewarding Performance
We uphold a high performance ethic by ensuring
that each employee understands where the
is heading and how they can
organisation
contribute to achieving our corporate goals.
The strategic imperatives of our transformation
agenda are translated into actionable objectives
and cascaded throughout the organisation.
We reward and recognise individual and team
performance, as well as the embodiment of our
core values. People managers are measured on
and rewarded for not only the achievement of
business results but also how well they engage,
lead and develop their teams.
We provide integrated work-life benefits and
competitive remuneration with performance-
based
continued
excellence. Our remuneration and benefits are
regularly reviewed to ensure competitiveness
and alignment with our reward strategies.
to motivate
incentives
AGE DISTRIBUTION
Singapore
Age Demographics
Builders (Pre-1946)
Boomers (1946-1964)
Gen X (1965-1977)
Gen Y (1978 onwards)
0.01%
26%
32%
42%
Australia
Age Demographics
Builders (Pre-1946)
Boomers (1946-1964)
Gen X (1965-1977)
Gen Y (1978 onwards)
0.5%
20%
47%
33%
54 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
<
Optus people in Sydney
participate in national Ride
to Work Day, an initiative
to promote sustainable
transport while keeping fit
^
Supporting health and
well-being – physical, mental
and social – is a key component
of our people management
strategy
>
Connect & Grow – We are
committed to cultivating talent
and grooming leadership
among our people
business
performance
the Optus Reward
Breakthrough
is
recognised through prestigious awards such
as
‘yes’ and SingTel
Excellence awards. Leaders at any level who
demonstrate exemplary people management
practices are also lauded at high-profile annual
award ceremonies in Australia and Singapore.
Cultivating a Healthy Work Environment
We are committed to providing a safe and healthy
work environment conducive
to employee
wellness and work life harmony. Supporting
health and wellbeing – physical, mental and social
– is a key component of our people management
strategy. We continually promote the merits
of healthy living and encourage employees to
take control of their health.
Health clubs and gymnasiums are available
onsite at SingTel, NCS and Optus premises while
we encourage healthier food to be offered in
all staff cafeterias. Our annual Health Expos at
Optus host a range of talks, health screenings
and programmes
for health management.
SingTel and NCS offer free health screenings
to all staff, as well as disease management
programmes. Presentations and programmes
around various health and wellness themes
are conducted throughout the year in both
Singapore and Australia.
Sports and fun activities foster teamwork and
camaraderie. We organise a variety of competitive
and non-competitive events, ranging
from
exercise sessions at work and mass participation
in marathons to bowling, cooking and even
karaoke competitions.
We recognise that our people have to juggle many
priorities so we offer family-friendly policies such
as flexible work schedules, telecommuting and
various forms of family leave arrangements.
On-site childcare facilities are also provided at
Optus and NCS.
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.
In 2010, Optus won the Martin Seligman Award
for Health & Wellbeing while both SingTel and NCS
were recognised for their outstanding employee
health management practices at the biennial
Singapore HEALTH awards. NCS achieved a
Platinum award while SingTel earned Gold.
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. In
2010, SingTel signed the Employers’ Pledge of
Fair Employment Practices with the Tripartite
Alliance for Fair Employment Practices, as well
as the Memorandum of Understanding with
UTES on the Re-employment of Older Workers.
The latter formalises the re-employment policy
at SingTel, ahead of legislation in 2012 which
will require companies to offer re-employment
to their staff when they reach the current
statutory retirement age of 62.
Within Optus, close to 7,000 employees 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.
ANNUAL REPORT 2010/2011 55
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.
-
In order to have a more in-depth review and analysis of the
Board’s performance, an independent external consultant
was appointed to facilitate the evaluation of the Board and the
Board committees, as well as the Directors’ peer appraisal
exercise (see Board Performance on page 59).
As SingTel shares are listed on both the Singapore Exchange
Securities Trading Limited (SGX) and Australian Securities
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 with 2010 Amendments released on
30 June 2010 (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
enhancements to the Group’s corporate governance regime have
been made, including the following:
- SingTel has published its inaugural Sustainability Report for
the financial year ended 31 March 2010. The report covers
SingTel’s sustainability framework comprising marketplace,
people, environment and community and is available on the
SingTel corporate website. It adopts the reporting principles
from the Global Reporting Initiative (GRI) G3 Guidelines and
follows the requirements of the ‘B’ application level.
- SingTel implemented electronic poll voting at its Annual General
Meeting and Extraordinary General Meeting in July 2010 so as
to better reflect shareholders’ shareholding interests.
- The terms of reference of the Finance, Investment and Risk
Committee have been expanded to include the provision
of advisory support to the Board on the development of the
SingTel Group’s overall strategy.
- The terms of reference of the Compensation Committee have
been enhanced to specifically include succession planning and
executive development so as to facilitate a more holistic approach
to developing, strengthening and reviewing a sound and capable
management team. In line with the expansion of the Committee’s
terms of reference, the Committee’s name has been changed to
the “Executive Resource and Compensation Committee”.
- Pursuant to the new ASX listing rules on trading policies
which came into effect on 1 January 2011, SingTel’s
Securities Transactions Policy (see page 65) was enhanced
to incorporate a procedure for Directors and officers to obtain
prior written clearance for trading during a “closed period”.
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 22 to 23.
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.
56 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Directors’ Attendance at Board Meetings during the Financial Year Ended 31 March 2011
Name of Director
Chumpol NaLamlieng
Graham John Bradley AM (2)
Chua Sock Koong
Fang Ai Lian
Dominic Chiu Fai Ho
Simon Israel
Low Check Kian (3)
Peter Edward Mason AM (2)(4)
Kaikhushru Shiavax Nargolwala
Peter Ong Boon Kwee (5)
Ong Peng Tsin
Nicky Tan Ng Kuang
Heng Swee Keat (6)
John Powell Morschel (6)
Deepak S Parekh (6)
Scheduled Board Meetings (1)
Ad Hoc Board Meetings (1)
Number of
Meetings
Held
Number of
Meetings
Attended
Number of
Meetings
Held
Number of
Meetings
Attended
6
6
6
6
6
6
-
4
6
4
6
6
2
2
2
6
5
6
6
6
6
-
4
6
2
6
6
1
2
1
1
1
1
1
1
1
-
1
1
1
1
1
0
0
0
1
1
1
0
1
1
-
1
1
1
1
0
0
0
0
Notes:
(1) Refers to meetings held/attended while each Director was in office.
(2) Member of the Order of Australia.
(3) Mr Low Check Kian was appointed to the Board on 9 May 2011.
(4) Mr Peter Edward Mason was appointed to the Board on 21 September 2010.
(5) Mr Peter Ong Boon Kwee was appointed to the Board on 1 September 2010.
(6) Mr Heng Swee Keat, Mr John Powell Morschel and Mr Deepak S Parekh retired following the conclusion of the AGM held on 30 July 2010.
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 approximately
seven scheduled meetings each year, the Board meets as and
when warranted by particular circumstances. Seven Board
meetings were held in the financial year ended 31 March 2011.
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 2011 is set out above.
Directors are required to act in good faith and in the interests of
SingTel. All new Directors appointed to the Board are briefed on
the Group’s business activities, strategic direction and policies,
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.
ANNUAL REPORT 2010/2011 57
Corporate Governance
Board Composition and Balance
The size and composition of the Board are reviewed from time to
time by the Corporate Governance and Nominations Committee,
which seeks to ensure that the size of the Board is conducive to
effective discussion and decision-making, and that the Board has
an appropriate number of independent Directors. The Committee
also seeks to maintain an appropriate balance of expertise, skills
and attributes among the Directors, including relevant core
competencies in areas such as accounting and finance, business and
management, industry knowledge, strategic planning, customer-
based experience and knowledge, and regional business expertise.
Any potential conflicts of interest are taken into consideration.
Reflecting the focus of the Group’s business in the region, 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, Peter Edward Mason AM and
Kaikhushru Shiavax Nargolwala.
In order to assist in attracting high calibre international directors
to the SingTel Board, especially where candidates come from
jurisdictions where it is common practice, SingTel has adopted a
policy on the grant of Deeds of Indemnity to Directors, to provide
assurance to Directors that they are adequately covered against
personal liability incurred in the course of performing their
professional duties.
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,
Mr Simon Israel, an Executive Director and the President of
Temasek Holdings (Private) Limited (1) and Mr Peter Ong Boon
Kwee, Permanent Secretary of the Ministry of Finance, 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.
In assessing the independence of the Directors, the Corporate
Governance and Nominations Committee has examined the
different relationships identified by the 2005 Code and the
Revised ASX Code that might impair the Directors’ independence
Note:
(1) Mr Israel will retire from his executive and board roles in Temasek Holdings
(Private) Limited effective 1 July 2011.
58 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
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 per year, 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 14 to 17.
The Chairman and the Group CEO
There is a clear separation of the roles and responsibilities
of the Chairman and the Group CEO. The Chairman, who is an
independent Director, leads the Board and is responsible for
the Board’s workings and proceedings, while the Group CEO is
responsible for implementing the Group’s strategies and policies,
and for conducting the Group’s business. The Chairman and
Group CEO are not related. In line with best practices in corporate
governance, the duties and responsibilities of the Chairman have
been formalised in writing and approved by the Board.
The Lead Independent Director
Mr Kaikhushru Shiavax Nargolwala was appointed as the Lead
Independent Director of the Board in May 2009. Mr Nargolwala
independent Director on the Board since
has been an
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.
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.
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 includes the following: (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
Board Performance
The Board and the Corporate Governance and Nominations
Committee strive to ensure that Directors on the Board possess
the experience, knowledge and skills critical to the Group’s
business so as to enable the Board to make sound and well-
considered decisions.
Directors also participate in an annual offsite workshop with
Senior Management to strategise and plan the Group’s longer
term strategy. 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, an independent external consultant was appointed to
facilitate the evaluation of the Board and Board committees, as
well as the Directors’ peer appraisal exercise. Directors were
requested to complete appraisal forms to assess the overall
effectiveness of the Board and the Board committees, as well as
each individual Director’s contributions to the Board and Board
committees. The external consultant also met up with each
Director separately for greater in-depth feedback. In addition,
Senior Management participated in the review by providing
feedback on areas such as development and monitoring of
strategy, the Board’s working relationship with Management and
risk management. 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 Board composition, information management,
Board processes, corporate integrity and social responsibility,
managing the Company’s performance, strategic review, Board
Committee effectiveness, CEO performance and succession
planning, Director development and management, managing risk
adversity and overall perception of the Board.
In addition to the appraisal exercise, 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
able to identify areas for improving the effectiveness of the Board
and its Committees.
ANNUAL REPORT 2010/2011 59
Corporate Governance
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. In line with SingTel’s commitment
to conservation of the environment, as well as technology
advancement, SingTel has done away with hard copy Board
papers and Directors are instead provided with tablet devices
to enable them to access and read Board and Board Committee
papers prior to and at meetings.
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
• Executive Resource and Compensation Committee
• Corporate Governance and Nominations Committee
• Optus Advisory Committee.
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 2011 is set out on page 61.
Finance, Investment and Risk Committee
The Finance, Investment and Risk Committee (FIRC) comprises at
least three Directors, the majority of whom shall be independent
Directors. Membership of the Audit Committee and the FIRC is
mutually exclusive.
The main responsibilities of the FIRC include the provision of
advisory support on the development of the SingTel Group’s
overall strategy and on strategic issues for the Singapore and
International businesses, approval of strategic, trade and portfolio
investments and divestments of the Group, review of the Group’s
Investment and Treasury Policy, evaluation and approval of any
financial offers and banking facilities and management of the
Group liabilities in accordance with the policies and directives of
the Board. 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.
60 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Directors’ Board Committee Memberships and Attendance at Board Committee Meetings during the Financial Year Ended
31 March 2011
Finance,
Investment and
Risk Committee (1) Audit Committee (1)
Compensation
Committee (1)
(now known as
Executive Resource
and Compensation
Committee)
Corporate
Governance and
Nominations
Committee (1)
Optus Advisory
Committee (1)
Name of Director
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
Chumpol NaLamlieng
Graham John Bradley AM (2)
Chua Sock Koong (3)
Fang Ai Lian (4)
Dominic Chiu Fai Ho
Simon Israel
Low Check Kian (5)
Peter Edward Mason AM (6)
Kaikhushru Shiavax Nargolwala
Peter Ong Boon Kwee (7)
Ong Peng Tsin (8)
Nicky Tan Ng Kuang
Heng Swee Keat (9)
John Powell Morschel (9)
Deepak S Parekh (9)
1
5
5
5
5
3
1
5
5
5
5
1
7
7
4
7
7
7
7
4
7
7
4
3
4
3
3
1
1
1
4
3
4
3
3
0
1
0
3
3
3
3
3
0
3
3
3
3
1
0
2
2
2
1
2
1
2
2
2
1
1
1
Notes:
(1) Refers to meetings held/attended while each Director was in office.
(2) Mr Graham John Bradley ceased to be a member of the Audit Committee, and was appointed to the Executive Resource and Compensation Committee,
on 30 July 2010.
(3) 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.
(4) Mrs Fang Ai Lian was appointed to the Executive Resource and Compensation Committee on 30 July 2010.
(5) Mr Low Check Kian was appointed to the Board on 9 May 2011, and the Corporate Governance and Nominations Committee and the Finance,
Investment and Risk Committee on 11 May 2011.
(6) Mr Peter Edward Mason was appointed to the Board, the Finance, Investment and Risk Committee and the Optus Advisory Committee on
21 September 2010.
(7) Mr Peter Ong Boon Kwee was appointed to the Board, the Corporate Governance and Nominations Committee and the Audit Committee on
1 September 2010.
(8) Mr Ong Peng Tsin was appointed to the Executive Resource and Compensation Committee on 30 July 2010.
(9) Mr Heng Swee Keat, Mr John Powell Morschel and Mr Deepak S Parekh retired following the conclusion of the AGM held on 30 July 2010.
ANNUAL REPORT 2010/2011 61
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 Audit Committee members are
all non-executive, and the majority of the members, including
the chairman, are independent.
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.
reporting or other matters. All whistle-blower complaints 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 the quarterly financial statements prior to approving
or recommending to the Board of their release, 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.
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
independence and effectiveness of
Charter to ensure the
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 to obtain
reasonable assurance that adequate measures were put in place
to mitigate fraud risk exposure in the Group. The Audit Committee
also reviewed 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
Executive Resource and Compensation Committee
The Executive Resource and Compensation Committee (ERCC)
comprises at least three Directors, all of whom shall be non-
executive and the majority of whom shall be independent. The
ERCC is chaired by an independent non-executive Director. The
ERCC has access to expert advice inside and/or outside SingTel.
The main responsibilities of the ERCC are to approve the Group’s
policies on executive remuneration, and to administer and review
any long term incentive schemes of SingTel.
The ERCC approves or recommends to the Board the appointment,
promotion and remuneration of key management positions.
Policies and guidelines for Directors’ compensation are also
recommended by the ERCC for the Board’s endorsement.
The ERCC also ensures that appropriate recruitment, development
and succession planning programmes are in place for key
executive roles.
The Group CEO, who is not a member of the ERCC, may attend
meetings of the ERCC but does not attend discussions relating to
her own performance and remuneration.
SingTel’s remuneration policy and remuneration for Directors and
Senior Management are discussed in this report from pages 66
to 71.
Corporate Governance and Nominations Committee
The Corporate Governance and Nominations Committee comprises
at least three Directors, the majority of whom, including the
chairman, shall 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.
62 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
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 58 to 59. 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
least three
The Optus Advisory Committee comprises at
Directors, the majority of whom shall be non-executive Directors.
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 Strategy 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 2011, SingTel’s Group CEO
and Group CFO have provided written confirmation to the Board
on the integrity of SingTel’s financial statements and on SingTel’s
risk management, compliance and internal control systems.
This 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 53 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 another external Quality Assurance
Review in 2010 and continues to meet or exceed the IIA Standards
in all key aspects.
SingTel Internal Audit adopts a risk-based approach in formulating
the annual audit plan which aligns its activities to the key risks
across the Group’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, and implementation of new/enhanced systems and
processes. SingTel Internal Audit also collaborates 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.
Internal Audit provides training and development
SingTel
opportunities for its staff to ensure their technical knowledge and
skillsets remain current and relevant.
then approve
External Auditors
The Board is responsible for the initial appointment of external
auditors. Shareholders
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 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 and becomes due for rotation in the
financial year commencing from 1 April 2011.
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
ANNUAL REPORT 2010/2011 63
Corporate Governance
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 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.
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.
Communication with Shareholders
SingTel is committed to maintaining high standards of disclosure
and corporate transparency. The Investor Relations (IR) team
spearheads and facilitates communication efforts with the
investment community with an open and non-discriminatory
approach. SingTel provides consistent, relevant and timely
information regarding the Group’s performance, progress and
prospects, with the fundamental aim of assisting our shareholders
and investors in their investment decision-making.
SingTel keeps shareholders and investors updated of our
corporate activities on a timely and consistent basis. We make
64 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
timely disclosures on any new material information to SGX and
ASX to ensure fair and equal dissemination of information to
all investors.
SingTel reports quarterly financial results within six weeks after
the end of each quarter. The announcements contain detailed
financial disclosures and analyses of key value drivers and
metrics for each business. In addition, we also provide guidance
on the outlook for each business at the start of each financial
year, and update or reiterate the guidance every quarter to
accurately reflect prevailing market conditions.
is a key source of
investment community.
information
The corporate website
Investor
for shareholders and the
presentations, annual reports, webcasts of earnings presentations,
announcements to SGX and ASX are available on the IR website.
The website also hosts other relevant information, including the
investor calendar, shareholder meetings, shares and dividend
information, factsheets and financial summaries.
SingTel interacts actively with shareholders and investors around
the world. Senior Management actively participates in one-on-
one meetings, roadshows, conferences and investor events
organised by the IR team. For FY10/11, we met with more than
400 investors in over 280 meetings held around the world.
SingTel strongly encourages and support shareholder
participation at AGMs. We send out the Notice of the Meeting,
together with the meeting agenda and related information
a month ahead, providing ample time for shareholders to
receive and review the Notice and reply with their attendance.
We hold the AGM at a central location with convenient 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 each AGM, the Group CEO delivers a presentation to update
shareholders on the progress we made over the past year.
The Directors and Senior Management are in attendance to
address queries and concerns about SingTel. SingTel’s external
auditors are also invited to attend to assist the Directors to
address shareholders’ queries that are related to the conduct
of the audit and the preparation and content of the auditors’
reports. The poll voting results (are presented to the audience
during the voting process and) are filed with the stock
exchanges together with the proxy voting results. 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 strong emphasis on shareholder communications.
We are recognised for our proactive efforts and transparency
by leading financial journals and business organisations.
two weeks before
the period commencing
Securities Transactions
SingTel’s Securities Transactions Policy states that Directors
and officers of the Group should not deal in SingTel shares
during
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 and officers
of the Group wishing to deal in SingTel shares during a closed
period must secure prior written approval of the Chairman
(in the case of Directors of SingTel), the Lead Independent
Director (in the case of the Chairman) or the Group CEO
(in the case of directors of SingTel subsidiaries and Top
Management members and persons who are in attendance at
Board and Top Management meetings). Requests for written
approval must contain a full explanation of the exceptional
circumstances and proposed dealing. If approval is granted,
trading must be undertaken in accordance with the limits
set out in the written approval. 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
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.
to enhance
intended
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 workplace health
and safety, conduct
in the workplace, business conduct,
protection of SingTel’s assets, proprietary information and
intellectual property, confidentiality, conflict of interest, and
non-solicitation of customers and employees. The code is
posted on SingTel’s internal website and a summarised version
is accessible from the SingTel corporate website. Policies and
standards are clearly stipulated to guide our people in carrying
out their daily tasks.
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.
ANNUAL REPORT 2010/2011 65
Basic Retainer Fee
Board chairman
Director
Fee for Appointment to
Audit Committee
Committee chairman
Committee member
Fee for Appointment to
any other Board Committee
S$220,000 per annum
S$110,000 per annum
S$50,000 per annum
S$35,000 per annum
Committee chairman
Committee member
S$35,000 per annum
S$25,000 per annum
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$2,000
S$3,000
The proposed framework for Directors’ fees for the financial
year ending 31 March 2012 is the same as that for the financial
year ended 31 March 2011 except that, in view of the expansion
of the terms of reference of the FIRC to include advisory support
on strategic issues for the SingTel Group as a whole, it is
proposed that the fees for the FIRC be increased from S$35,000
to S$50,000 for the chairman and from S$25,000 to S$35,000
for each member.
Corporate Governance
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 ERCC 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.
In the financial year ended 31 March 2011, the Chairman’s basic
fee was increased to S$220,000 and the Director’s basic fee
was increased to S$110,000 so that the fees payable would be
more in line with comparable benchmarks. The fees for non-
executive Directors comprised a basic retainer fee, additional
fees for appointment to Board Committees, attendance fees for
ad hoc Board meetings, and a travel allowance for Directors who
were required to travel out of their country or city of residence
to attend Board meetings and Board Committee meetings which
did not coincide with Board meetings. There are no retirement
benefit schemes or share-based compensation schemes in place
for non-executive Directors. The framework for determining
non-executive Directors’ fees was as follows:
66 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Remuneration of Directors
The aggregate compensation paid to or accrued to SingTel Directors for services in all capacities for the financial year ended
31 March 2011 is set out in the table below:
Name of Director
Fixed
Component (1)
Variable
Component (2)
(S$)
(S$)
Provident
Fund (3)
(S$)
Benefits (4)
(S$)
Directors’
Fees (7)
(S$)
Total
(S$)
Chumpol NaLamlieng
Graham John Bradley AM
-
-
-
-
-
-
-
-
300,000
300,000
195,373
195,373
Chua Sock Koong (5)(6)
1,475,000
2,950,000
8,215
74,115
-
4,507,330
Fang Ai Lian
Dominic Chiu Fai Ho
Simon Israel (8)
Low Check Kian (9)
Peter Edward Mason AM (10)
Kaikhushru Shiavax Nargolwala
Peter Ong Boon Kwee (11)
Ong Peng Tsin
Nicky Tan Ng Kuang
Heng Swee Keat (12)
John Powell Morschel (12)
Deepak S Parekh (12)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
179,801
179,801
196,000
196,000
183,787
183,787
-
-
110,444
110,444
194,000
194,000
104,167
177,801
104,167
177,801
179,000
179,000
52,903
68,209
50,637
52,903
68,209
50,637
Notes:
(1) Fixed Component refers to base salary and Annual Wage Supplement earned for the year ended 31 March 2011.
(2) Variable Component refers to cash bonuses awarded for performance for the year ended 31 March 2011.
(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 were granted to Ms Chua on 2 June 2011 for performance for the year ended 31 March 2011. She received the General Award (GA) and the
Senior Management Award (SMA) based on fair values of S$1.664 and S$1.930 per share respectively. The fair values of performance share
awards granted to her are S$1,685,714 for GA and S$1,264,286 for SMA. The vesting criteria for the performance share awards are detailed on
pages 69-70.
(6) In respect of the performance shares earlier granted in 2008 to Ms Chua, 83,823 or 12.5% of the 670,584 shares under the GA (fair value of
S$1.994 per share) vested on 1 June 2011. The remaining 586,761 shares under the GA have lapsed unvested. 452,880 shares under the SMA
grant (fair value of S$2.214 per share) have lapsed unvested.
(7) Directors’ Fees are paid on a half-yearly basis in arrears.
(8) Fees are payable to Mr Simon Israel’s employer.
(9) Appointed to the Board on 9 May 2011.
(10) Appointed to the Board on 21 September 2010.
(11) Appointed to the Board on 1 September 2010. Fees for public sector Director are payable to government agencies.
(12) Retired following the conclusion of the AGM held on 30 July 2010.
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 2011.
ANNUAL REPORT 2010/2011 67
Corporate Governance
No Director decides his own fees. Directors’ fees are recommended
by the ERCC and are submitted for endorsement by the Board.
Directors’ fees are subject to the approval of shareholders at the
AGM. SingTel 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 ERCC recognises that the Group operates in a regional
environment. To remain competitive, the ERCC has established
the following objectives for its remuneration policy:
• To align the interests of Senior Management with those of
shareholders;
• To attract, motivate and retain high-performing executives,
which is necessary to sustain SingTel as a leading multimedia
and ICT solutions 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 ERCC 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.
68 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Remuneration Components
The remuneration structure for Senior Management comprises
five components – fixed component, variable component,
provident/superannuation fund, benefits and long term incentives.
The structure is designed such that the percentage of the
variable component of Senior Management’s remuneration
increases as they move up the organisation. The variable
component 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
individual
against Group, company, business unit and
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.
Individual bonus payouts are linked by way of performance
indicators and scorecards to the areas mentioned above.
The ERCC 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 ERCC 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
ERCC 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 an 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 2011.
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 ERCC – 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
in the
target benchmarked against comparable companies
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 2011 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 that of
the component stocks in the MSCI Asia Pacific Telecommunications
Index (the Index) over the three-year performance period from
1 April 2011 to 31 March 2014. In view of changing market
conditions, the vesting schedule has been refined to better align
with market practices:
•
•
•
If SingTel Group’s TSR is ranked at or above the 75th percentile
of the TSR of the component stocks in the Index, 100 per cent
of the shares under this tranche will vest.
If SingTel Group’s TSR is ranked at or above the 25th percentile
but below the 75th percentile of the TSR of the component
stocks in the Index, the percentage of the shares under this
tranche that will vest will vary.
If SingTel Group’s TSR is ranked below the 25th percentile of
the TSR of the component stocks in the Index, none of the
shares under this tranche will vest.
ANNUAL REPORT 2010/2011 69
Corporate Governance
The remaining tranche (50 per cent) of the General Award will
be subject to SingTel Group’s TSR measured against the
Index (as opposed to individual component stocks) over the
performance period from 1 April 2011 to 31 March 2014. As
with the TSR percentile ranking measure, the vesting schedule
has been refined to better align with market practice:
•
•
•
If SingTel Group’s TSR is at or exceeds 5 per cent that of the
Index, 100 per cent of the shares under this tranche will vest.
If SingTel Group’s TSR is minus 5 per cent or more but less
than 5 per cent that of the Index, the percentage of the shares
under this tranche that will vest will vary.
If SingTel Group’s TSR is less than minus 5 per cent that of
the Index, none of the shares under this tranche will vest.
For the 2011 Senior Management Award, vesting will take place
if the following criteria are met:
• Vesting of the General Award
There must be vesting of the 2011 General Award before
the 2011 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
2010.
• 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) is
the second criterion under the Senior Management Award.
Under this criterion, 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:
• 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 from entering into transactions
in associated products which
limit the economic risk of
participating in unvested entitlements under SingTel’s equity-
based remuneration schemes.
70 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
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 2011 is set out in
the table below:
Name of Senior Executive
Fixed Component (1)
Variable
Component (2)
Provident/
Superannuation
Fund (3)
Benefits (4)
Total (5)
The following are in alphabetical order:
Bill Chang
EVP (Business)
SingTel
Hui Weng Cheong (6)
CEO (International)
SingTel
Allen Lew
CEO (Singapore)
SingTel
Jeann Low (7)
Group CFO
SingTel
Paul O’Sullivan (8)
CEO (SingTel Optus)
S$532,000
S$800,000
S$11,275
S$56,194
S$1,399,469
S$465,000
S$850,000
S$5,926
S$276,090
S$1,597,016
S$980,000
S$2,150,000
S$6,196
S$63,187
S$3,199,383
S$620,000
S$950,000
S$10,735
S$126,078
S$1,706,813
A$1,080,000
A$1,651,376
A$250,324
A$59,586
A$3,041,286
Notes:
(1) Fixed Component refers to base salary and Annual Wage Supplement (if applicable) earned for the year ended 31 March 2011.
(2) Variable Component refers to cash bonuses awarded for performance for the year ended 31 March 2011.
(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 2 June 2011 for performance for the year ended 31 March 2011. The Senior Management received the General
Award (GA) and the Senior Management Award (SMA) based on fair values of S$1.664 (A$1.275) and S$1.930 (A$1.479) per share respectively. The
vesting criteria for the performance share awards are detailed on pages 69-70. The fair values of performance share awards granted to the following
Senior Management are:
- Bill Chang: GA of S$400,000 and SMA of S$300,000
- Hui Weng Cheong: GA of S$485,714 and SMA of S$364,286
- Allen Lew: GA of S$1,171,429 and SMA of S$878,571
- Jeann Low: GA of S$542,857 and SMA of S$407,143
- Paul O’Sullivan: GA of A$1,142,857 and SMA of A$857,143
(6) Mr Hui Weng Cheong was seconded to Advanced Info Service, Thailand on expatriate terms including tax equalisation benefits, till 30 September 2010.
He was awarded performance shares (GA) equivalent to S$300,000 in fair value at the point he assumed the position of CEO (International).
(7) Benefits for Ms Jeann Low include tax equalisation in relation to her past secondment to Optus, Australia.
(8) Mr Paul O’Sullivan is based in Australia and remunerated in Australian dollars.
ANNUAL REPORT 2010/2011 71
Investor Relations
PROACTIvE COMMUNICATION wITh INvESTMENT
COMMUNITY
SingTel proactively engages investors, both institutional and retail,
through an Investor Relations (IR) programme focused on:
• delivering timely, accurate and relevant information to help
investors make decisions;
• providing active management access through a schedule of
regular meetings, roadshows and conferences; and
• meeting investors’ increasing demands for transparency and
governance and balancing it with commercial sensitivities of
the business.
In FY10/11, SingTel received strong interest from the investment
community and met more than 400 investors in over 280 meetings
in Singapore and overseas. Management shares with investors
SingTel’s business strategy, operations, financial performance and
outlook. Such regular interaction helps management build rapport
with the investment community. In addition, every year, SingTel
commissions an investor perception study to gather feedback from
investors. In the study, an independent external consultant conducts
in-depth interviews with institutional investors and analysts and
reports on the findings. This invaluable market feedback allows
management to understand investors’ views on issues and concerns,
and further strengthens the effectiveness of SingTel IR efforts.
with more than 75 per cent of proportionate EBITDA derived
from outside of Singapore, SingTel IR efforts are also geared
to create awareness and enhance understanding of SingTel’s
overseas businesses. In July 2010, SingTel IR organised the Optus
Investor Day in Sydney, which attracted more than 50 investors.
In December 2010, at SingTel’s Regional Mobile Investor Day in
Bangalore, investors and analysts interacted with management
from Bharti, Telkomsel, AIS, Globe, Optus and SingTel. They also
gained deeper insights into Bharti’s operations with a tour to key
telecommunication facilities owned by Bharti.
The IR website is a key source of relevant information and
comprehensive data, comprising investor presentations, annual
reports, webcasts of earnings presentations and announcements
to Singapore Exchange Securities Trading Limited
(SGX)
and Australian Securities Exchange (ASX). The IR website also
hosts other useful information, including the investor calendar,
shareholder meetings, shares and dividend information, factsheets
and financial summaries.
SingTel’s proactive efforts and comprehensive disclosures have
been lauded by the investment community. In FY10/11, SingTel
won recognition for its corporate governance, transparency and
IR efforts. Notwithstanding challenges arising from its diversified
operations, SingTel is fully committed to keeping shareholders
informed of its operations, strategy, corporate, social and
governance developments.
ShAREhOLDER INFORMATION
As at 29 April 2011, Temasek holdings (Temasek) remained the
largest shareholder in SingTel with a 54.6 per cent ownership
interest. Other Singapore shareholders held 19 per cent of issued
share capital. Outside of Singapore, these geographical regions
held the most number of shares – US/Canada and Europe with
14 per cent and 8 per cent of issued share capital respectively.
IR Calendar of Events
Date
Activities
Mar 2011
Dec 2010
Nov 2010
Nov 2010
Nov 2010
Sep 2010
Aug 2010
Jul 2010
Jul 2010
Jun 2010
May 2010
May 2010
May 2010
May 2010
Credit Suisse Asian Investment Conference,
hong Kong
SingTel Regional Mobile Investor Day, Bangalore
Morgan Stanley TMT Conference, Barcelona
Non-deal Equity and Bond Roadshows, Europe
Morgan Stanley Asia Pacific Summit, Singapore
CLSA Investors Forum, hong Kong
Citi Asean Investors Conference, Singapore
18th Annual General Meeting, Singapore
Optus Investor Day, Sydney
Nomura Asia Equity Forum, Singapore
UBS Pan Asian Telco Conference, Singapore
CLSA Corporate Access Forum, Singapore
Non-deal Equity Roadshow, US
Non-deal Equity and Bond Roadshows, Europe
72 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Share Ownership by Geographical Distribution
Temasek holdings
55%
Singapore ex Temasek 19%
US/Canada
14%
Europe
8%
Asia ex SG
Australia
Others
2%
1%
1%
Approximate figures based on share register analysis as at 29 April 2011.
ShARE PRICE PERFORMANCE
SingTel’s share price was down 5 per cent on the SGX and 8 per cent on the ASX between April 2010 and March 2011.
SingTel Share Price Performance – 1 April 2010 to 31 March 2011
20.0%
15.0%
10.0%
5.0%
0.0%
-5.0%
-10.0%
-15.0%
12%
5%
-5%
-8%
Apr 10
May 10
Jun 10
Jul 10
Aug 10
Sep 10
Oct 10
Nov 10
Dec 10
Jan 11
Feb 11
Mar 11
SingTel – SGX, -5%
SingTel – ASX, -8%
1. The Australian Dollar appreciated approximately 1 per cent against the
Singapore Dollar from 1 April 2010 to 31 March 2011.
MSCI Asia Pacific Telecommunications Index, 12%
Straits Times Index, 5%
Source: Bloomberg
ShAREhOLDER PAYOUT
Shareholder Payout
SingTel has a track record of generous shareholder payout. During
FY10/11, SingTel’s ordinary dividend policy was revised to 55 per
cent to 70 per cent of its underlying net profit, up from 45 per cent
to 60 per cent previously.
For FY10/11, the Board has recommended a final ordinary
dividend of 9.0 cents a share and a special dividend of 10.0 cents
a share. Together with the interim ordinary dividend of 6.8 cents
a share, total ordinary dividend for FY10/11 is 15.8 cents a share,
an increase of 11 per cent from FY09/10.
Total shareholder payout is approximately S$26 billion, or 76 per
cent of earnings over the last 10 years.
2011
2010
2009
2008
2007
2006
2005
2.5
2.3
2.0
2.0
1.8
1.7
1.3
0.8
2004
1.1
2003
2002
1.0
1.0
Ordinary Dividend
Special Dividend
Capital Reduction
(S$ b)
1.6
1.5
2.3
3.0
ANNUAL REPORT 2010/2011 73
Risk Management Philosophy and Approach
Risk management is fundamental to
effective corporate governance and the
development of a sustainable business.
The Group has adopted a risk philosophy
aimed at maximising business success
and shareholder value by effectively
balancing risk and reward.
The identification and management of risk reduce the uncertainty
associated with the execution of our business strategies and
allow the Group to maximise opportunities that may arise.
Risk takes on many forms and can have material adverse
impacts on the Group’s ability to achieve our stated objectives,
by potentially
impacting the reputation, operation, human
resources and financial performance.
The Group’s philosophy and approach towards effective risk
management is underpinned by three key principles:
• 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.
• Process
implement robust processes and systems
We seek to
for effective
identification, quantification, monitoring,
mitigating and management of risk. We seek to improve
our risk management and internal control policies and
procedures on an ongoing basis to ensure that they
remain sound and relevant by benchmarking against
global best practices.
74 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
to
Based on the above principles, the Group undertakes a continuous
identification, monitoring, management and
process of risk
reporting of risks throughout the organisation, to provide
assurance
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.
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 plans. Any
internal control weaknesses,
material non-compliance and
together with
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.
the external auditors’ recommendations
Risk assessment and mitigation strategy is an integral part of the
Group’s annual business planning and budgeting process. The
key risk management activities
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
ongoing assessment and improvement of risk management
and controls. Additionally, independent specialist 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. This provides 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, through the Finance, Investment and Risk Committee
(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 businesses. On an annual basis,
the Group CEO and Group CFO provide a written certification
to the Board confirming the integrity 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.
The work performed by SingTel Internal Audit during the financial
year and the review undertaken by the external auditors provided
reasonable assurance to the Audit Committee that there were
adequate internal controls in place within the Group.
RISk FACTORS
The Group’s financial performance and operations within and
outside Singapore are influenced by a vast range of risk factors.
Many of these risk factors affect not just our businesses but
also other businesses in and outside of the telecommunications
industry. These risks vary widely and many are beyond the
Group’s control. However, we aim to mitigate the exposures
through appropriate risk management strategies and internal
controls.
The section below sets out 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
Group’s financial performance and operations.
The global credit and equity markets have experienced substantial
dislocations, liquidity disruptions and market corrections. These
and other related events have had a significant impact on
economic growth as a whole, and consequently, consumer
and business demand for telecommunications, IT and related
services.
Our planning and management review processes involve periodic
monitoring of budgets and expenditures to minimise the risk of
over-investment. The Group has continuing cost management
programmes to drive improvements in its cost structure.
ANNUAL REPORT 2010/2011 75
Risk Management Philosophy and Approach
POLITICAL RISkS
Some of the countries in which the 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 Group’s assets in those areas.
The Group is geographically diversified with earnings from
Singapore, Australia and the emerging markets. We work
closely with the management and our partners in the countries
which the Group operates in and leverage on the local expertise,
knowledge and ability to ensure compliance with the laws as
well as implement risk mitigation measures.
REGULATORY RISkS AND LITIGATION RISkS
Regulatory Risks
The Group’s global operations are subject to extensive government
regulations, which may impact or limit our 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 as well as the
regulatory environment (including taxation) in which we operate.
Such changes could have a material adverse effect on the Group’s
financial performance and operations.
In Singapore, the Infocomm Development Authority of Singapore
(IDA) has in its implementation of the Next Generation National
Broadband Network (NGNBN) designed a structure aimed at
leveling the playing field, allowing the benefits of the NGNBN
to be available to all industry players. This has significantly
altered the existing cost model of the industry and increased
the level of competition in the market with new entrants.
Another regulatory change is the announced revision by the
Media Development Authority of Singapore (MDA) 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.
In Australia, the Government is currently undertaking a significant
reform of the fixed-line telecommunications sector, including
the rollout of a national broadband network to be operated on a
wholesale-only open access basis. It is possible the Australian
Government’s regulatory reforms
legislation and
the deployed national broadband network and commercial
transactions relating to the national broadband network could
ultimately lead to a sub-optimal or negative outcome for Optus.
In December 2010, the Parliament approved two Bills to establish
including
the regulatory and governance framework for the National
Broadband Network (NBN) Company. These Bills seek to deliver
on the Government’s commitment that the NBN will be
operated as a wholesale-only network, on open access terms with
oversight by the regulator.
Our 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 our overseas investments.
Our businesses 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 Group has access to appropriate regulatory expertise and
staffing resources in Singapore and Australia and regularly
participates in discussions and consultations with the respective
regulatory authorities and the industry to propose changes and
provide feedback on regulatory reforms and developments in
the telecommunications and media industry.
Access to Spectrum
The Group may need to access additional spectrum to support
both organic growth and the development of new services. Access
to spectrum is of critical importance to us in order to support
our business of providing mobile voice and broadband services.
The use of spectrum in most countries the Group operates in is
regulated by governmental authorities and requires licences.
Failure to acquire access to spectrum or new or additional
spectrum on reasonable terms or at all could have a material
adverse effect on the Group’s business, financial performance
and growth plans.
Litigation Risks
We are 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 our financial condition
and results of operations. Examples of such actions which
the Group is exposed to are disclosed in notes to the financial
statements under the ‘Contingent Liabilities’.
The Group has put in place standard master supply agreements
with vendors and contract policies with empowerment
framework involving management executives and the CEOs, the
Management Committee and the various Board Committees.
Any deviation from the standard policies requires approval
by the appropriate authorities defined within the established
empowerment framework.
76 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
COMPETITIVE RISkS
The Group faces competitive risks in all the markets we operate.
Singapore Business
The telecommunications market in Singapore is highly competitive.
As new players enter the market and regulation requires SingTel
Singapore to allow our competitors to have access to our networks,
our market share in some segments and prices for certain
products and services have declined. These trends may continue
and intensify for SingTel Singapore.
Australia Business
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
continues to be dominated by the incumbent provider which
can leverage its scale and 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.
International Businesses
The operations of our international businesses are also subject
to highly competitive market conditions. Business customers
enjoy a wide range of choices for many of the services the
international voice and data
Group provides, particularly
communications. The quality and prices of these services can
influence a potential business customer’s decision. Prices
for some of these services have declined significantly in recent
years as a result of capacity additions and price competition.
Such price declines are expected to continue.
The growth of our associates depends in part on increases in
the mobile penetration rate in the markets where they operate
in. Some of these overseas markets, including Indonesia and
India, have experienced and will experience an increase in the
number of competitors, leading to intense price competition
and potential loss of market share for our associates. As these
markets mature, the pace of subscriber growth may slow and
new customers may not be as profitable as existing customers.
Our business models and profits are also challenged by
disintermediation in the telecommunications industry by handset
telecommunications services
providers and non-traditional
providers who provide multimedia content, applications and
services directly on demand.
The Group continues to invest in innovation, technologies, new
products and services, transformational initiatives in processes,
new business models and customer experience to meet evolving
customer needs and to strengthen customer loyalty.
REGIONAL ExPANSION RISkS
Given the size of the Singapore and Australia market, the
future growth of the Group depends, to a large extent, on our
ability to grow our other overseas operations. This comes with
considerable risks.
Partnership Relations
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.
Acquisition Risks
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. The Group risks
not being able to generate synergies from these acquisitions
and the acquisitions become a drain on the Group’s management
and capital resources.
We continuously look for investment opportunities that can
contribute to our regional expansion strategy. Our efforts
are challenged by the limited availability of opportunities,
competition for the available opportunities from other potential
foreign ownership restrictions, government and
investors,
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 associates. There is 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.
ANNUAL REPORT 2010/2011 77
Risk Management Philosophy and Approach
The SingTel Group adopts a disciplined approach in our investment
evaluation and decision process. Members of our management
team are represented as Board directors of our associates.
Additional to sharing of network and commercial experience, in
the areas of corporate governance and financial reporting, best
practices are shared across the Group.
PROjECT RISkS
The SingTel Group incurs substantial capital expenditure in
constructing and maintaining our networks and systems
infrastructure. These projects are subject to risks associated
with the construction, supply, installation and operation of
equipment and systems.
Project Management
The projects we undertake as sub-contractors to roll out
infrastructure are subject to the risks of increased project costs,
disputes and unexpected implementation delays, any of which
can result in an inability to meet projected completion dates.
The Group is also a major IT services provider to government
and large enterprises in the region. We face potential project
execution risks when projects are not accurately scoped or
the quality of service performance is not up to customers’
specifications, resulting in over-commitments to customers and
inadequate resource allocation and scheduling. These can lead to
cost overruns, project delays and losses.
The Group has a project risk management framework in place,
with processes for regular risk assessment, performance
monitoring and reporting of key projects.
Satellite Business
The launch and operation of any satellite is subject to the risk
of launch delays, cost overruns and the occurrence of other
unforeseeable events, such as satellite launch failures, satellite
failure to enter into designated orbital locations, in-orbit failure
or any other events beyond the control of the Group.
The Group maintains and regularly reviews its business continuity
programme, including restoration plans, for implementation in
the event of a catastrophic loss of all or part of a satellite.
NEW BUSINESS RISkS
From a traditional carriage business in Singapore and Australia,
the Group is now venturing into new growth engines to create
including mobile applications and
new revenue streams,
78 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
services, pay TV, managed services, cloud services, content
and ICT. There is no assurance that the Group will be successful
in these ventures which may require new expertise, substantial
process or systems changes, as well as organisational cultural
and mindset changes.
The Group’s talent management and development programme
seeks to respond to the changing needs and new strategies of
businesses. The Group continues to invest in processes and
technologies to support the new businesses requirements.
INFRASTRUCTURE AND TECHNOLOGY RISkS
Rapid and significant technological changes are typical in the
telecommunications industry and these changes may materially
affect the SingTel Group’s capital expenditure and operating
costs as well as the demand for our products and services.
We have invested substantial capital and other resources in
the development and modernisation of our networks and
systems. Technological changes continue to reduce costs and
expand the capacities of new infrastructure able to deliver
competing products and services. Moreover, our associates
the
operate predominantly
regulatory practices including spectrum availability may not
synchronise with the technology progression path and the
market demand for new technologies.
in emerging markets where
Such rapid advancements in technology may leave the Group
stranded with investments that are technologically obsolete
before the end of their expected useful life. These changes
may require us
to replace and upgrade our network
infrastructure to remain competitive and as a result, incur
additional capital expenditure.
The SingTel Group faces a continuing risk of market entry
by new operators and service providers
(including non-
telecommunications players) that, by using newer or lower
cost technologies, may succeed in rapidly attracting customers
away from established market participants.
We may have to incur substantial development expenditure to
gain access to related or enabling technologies, so that we
may pursue new growth opportunities in the ICT industry.
is to modify our network
The challenge
in
a
facilitate such
to
implementation, failing which this could adversely affect our
quality of service, financial condition and results of operations.
timely and cost-effective manner
infrastructure
The Group continues to invest in upgrading, modernising and
equipping its systems with new capabilities.
VENDOR RISkS
The Group relies on third party vendors with respect to many
aspects of its business. We have relied on and will continue to
rely on third party vendors for various purposes, including but
not limited to the construction of the Group’s network, the
supply of handsets and equipment, systems and applications
development and services, content provision and customer
acquisition. Accordingly, our operations could be affected by
such third party vendors failing to perform their obligations.
In addition, the industry is dominated by a few key vendors for
such services and equipment and any failure or refusal of
any key vendor to provide such services or equipment, or
any consolidation of the industry may significantly affect our
business and operations.
The SingTel Group has in place security mechanisms such as
firewalls and encryption algorithm, designed to minimise the
risk of privacy breaches. We also implement and test antivirus
or intrusion prevention systems, based on established security
standards.
ELECTROMAGNETIC ENERGY RISkS
to electromagnetic energy associated with
Health concerns have been raised regarding the potential
exposure
the
operation of mobile communications devices. While there is no
substantiated evidence of public health risks from exposure
to the levels of electromagnetic energy typically emitted from
mobile communications devices, perceived health risks can
result in reduced demand for mobile communications services
or worse, litigation against the Group. In addition, government
environment controls may be
introduced to address this
perceived risk, restricting our ability to deploy our mobile
communications networks.
The Group monitors closely its relationships with strategic
vendors,
including developing new relationship to mitigate
supply risks.
The Group’s policy is to comply with regulatory and international
safety standards.
FINANCIAL RISkS
CATASTROPHIC RISkS
The main risks arising from the Group’s financial assets and
liabilities are foreign exchange, interest rate, market, liquidity,
access to financing sources and credit risks. Financial markets
continue to be volatile and this may heighten execution risk
for funding activities and credit risk premiums for certain
market participants.
Some of the countries in which the Group operates have
experienced a number of major natural catastrophes over the
years, including typhoons, droughts and earthquakes. There is
no assurance that the occurrence of such natural catastrophes,
severe weather conditions or other acts of God will not
materially disrupt the business of the Group.
The Group has established policies, guidelines and control
procedures to manage and report exposure to such risks. The
Group’s financial risk management is discussed in detail on page
174 in Note 36 to the Financial Statements.
The Group has a defined crisis management and escalation
process involving the CEOs and senior management team to
respond to emergencies and/or catastrophic events.
BREACH OF PRIVACY RISkS
The Group seeks to protect the privacy of voice and information
on networks and systems infrastructure. Significant failure
of encryption and security measures may result in customer
impact our
confidence being undermined and materially
businesses.
ANNUAL REPORT 2010/2011 79
Financial Statements
CONTENTS
81 Directors’ Report
89 Statement of Directors
90
Independent Auditors’ Report
91 Consolidated Income Statement
92 Consolidated Statement
of Comprehensive Income
93 Statements of Financial Position
95 Statements of Changes in Equity
99 Consolidated Statement
of Cash Flows
102 Notes to the Financial Statements
80
SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Directors’ Report
For the financial year ended 31 March 2011
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 2011.
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
Dominic Chiu Fai Ho
Simon Israel
Low Check Kian (appointed on 9 May 2011)
Peter Edward Mason AM* (appointed on 21 September 2010)
Kaikhushru Shiavax Nargolwala
Peter Ong Boon Kwee (appointed on 1 September 2010)
Ong Peng Tsin
Nicky Tan Ng Kuang
* Member of the Order of Australia
Heng Swee Keat, John Powell Morschel, and Deepak S Parekh, who served during the financial year, retired following the
conclusion of the Annual General Meeting on 30 July 2010.
2.
ARRANGEMENTS TO ENABLE DIRECTORS TO ACQUIRE BENEFITS BY MEANS OF THE ACQUISITION OF SHARES
AND DEBENTURES
Neither at the end of nor at any time during the financial year was the Company a party to any arrangement whose object is to
enable the Directors of the Company to acquire benefits by means of the acquisition of shares in, or debentures of, the Company
or any other body corporate, except for share options granted under the Singapore Telecom Share Option Scheme 1999 (“1999
Scheme”), and performance shares granted under the SingTel Performance Share Plan (“Share Plan 2004”).
ANNUAL REPORT 2010/2011 81
ANNUAL REPORT 2010/2011 81
Directors’ Report
For the financial year ended 31 March 2011
3.
DIRECTORS’ INTERESTS IN SHARES AND DEBENTURES
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 2010
or date of
appointment,
if later
At 31 March 2011
At 31 March 2011
At 1 April 2010
or date of
appointment,
if later
Singapore Telecommunications Limited
(Ordinary shares)
Chumpol NaLamlieng
Chua Sock Koong
Graham John Bradley AM
Fang Ai Lian
Dominic Chiu Fai Ho
Simon Israel
Peter Edward Mason AM
Kaikhushru Shiavax Nargolwala
Peter Ong Boon Kwee
Ong Peng Tsin
Nicky Tan Ng Kuang
(Options to purchase ordinary shares)
Chua Sock Koong
Singapore Airlines Limited
(Ordinary shares)
Chua Sock Koong
Simon Israel
199,500
3,690,513
40,000
91,930
-
497,820
100,000 (4)
250,000
870
150,000
150,000
199,500
2,940,513
40,000
91,930
-
179,820
100,000
250,000
870
40,000
150,000
700,000 (5)
1,450,000
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
900,000
-
13,154,576 (1)
8,000 (2)
-
-
1,360 (3)
-
-
1,537 (3)
-
-
-
-
-
-
-
13,859,950
8,000
-
-
1,360
-
-
1,537
-
-
-
-
-
-
82
SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Directors’ Report
For the financial year ended 31 March 2011
3.
DIRECTORS’ INTERESTS IN SHARES AND DEBENTURES (Cont’d)
Holdings registered in the name
of Director or nominee
Holdings in which Director is
deemed to have an interest
At 1 April 2010
or date of
appointment,
if later
At 31 March 2011
At 1 April 2010
or date of
appointment,
if later
At 31 March 2011
Singapore Technologies Engineering Limited
(Ordinary shares)
Fang Ai Lian
50,000
50,000
-
-
Notes:
(1) Chua Sock Koong’s deemed interest of 13,154,576 shares included -
(a) 8,886,828 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 4,239,611 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 Burgoyne Investments Pty Ltd as trustee for Burgoyne Superannuation Fund. Both Peter Edward Mason AM and spouse are
directors of Burgoyne Investments Pty Ltd and beneficiaries of Burgoyne Superannuation Fund.
(5) At an exercise price of S$1.41 per share (1 April 2010: between S$1.41 and S$2.12 per share).
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 2011.
4.
DIRECTORS’ CONTRACTUAL BENEFITS
Since the end of the previous financial year, no Director has received or become entitled to receive a benefit by reason of a
contract made by the Company or a related corporation with the Director or with a firm of which he is a member, or with a
company in which he has a substantial financial interest except as disclosed in the notes to the financial statements and in
this report.
5.
SHARE OPTIONS AND PERFORMANCE SHARES
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),
Graham John Bradley AM, Fang Ai Lian, and Ong Peng Tsin.
Heng Swee Keat, John Powell Morschel, and Deepak S Parekh, who served during the financial year, stepped down as members
of the Compensation Committee following the conclusion of the Annual General Meeting on 30 July 2010.
ANNUAL REPORT 2010/2011 83
Directors’ Report
For the financial year ended 31 March 2011
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
09.06.00
30.05.01
29.11.01
30.05.02
10.06.01 to 09.06.10
31.05.02 to 30.05.11
30.11.02 to 29.11.11
31.05.03 to 30.05.12
S$2.12
S$1.56
S$1.61
S$1.41
For Group Chief Executive Officer (Chua Sock Koong)
S$2.12
09.06.00
S$1.41
30.05.02
10.06.01 to 09.06.10
31.05.03 to 30.05.12
Balance
as at
1 April 2010
(’000)
Options
exercised
(’000)
Options
cancelled
(’000)
Balance
as at
31 March 2011
(’000)
1,327
1,376
2,713
5,629
11,045
750
700
1,450
(1,092)
(805)
(247)
(653)
(2,797)
(750)
-
(750)
(235)
(10)
-
(84)
(329)
-
-
-
-
561
2,466
4,892
7,919
-
700
700
Total
12,495
(3,547)
(329)
8,619
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.
84
SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Directors’ Report
For the financial year ended 31 March 2011
5.1
Share Options (Cont’d)
Details of the Directors’ share options are set out in the following table -
Granted since
commencement of
scheme to
31 March 2011
(’000)
Aggregate Options
Exercised since
commencement of
scheme to
31 March 2011
(’000)
Outstanding
as at
31 March 2011
(’000)
60
4,709
-
-
-
-
-
-
-
-
60
-
60
-
4,889
(60)
(4,009)
-
-
-
-
-
-
-
-
(60)
-
(60)
-
(4,189)
-
700
-
-
-
-
-
-
-
-
-
-
-
-
700
1999 Scheme
Chumpol NaLamlieng
Chua Sock Koong
Graham John Bradley AM
Fang Ai Lian
Dominic Chiu Fai Ho
Simon Israel
Peter Edward Mason AM
Kaikhushru Shiavax Nargolwala
Peter Ong Boon Kwee
Ong Peng Tsin
Nicky Tan Ng Kuang
Heng Swee Keat (1)
John Powell Morschel (1)
Deepak S Parekh (1)
Note:
(1) Heng Swee Keat, John Powell Morschel and Deepak S Parekh retired as Directors of the Company following the conclusion of the Annual
General Meeting on 30 July 2010.
No options were granted to the Directors during the financial year ended 31 March 2011.
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 2011, 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.
ANNUAL REPORT 2010/2011 85
Directors’ Report
For the financial year ended 31 March 2011
5.2
Performance Shares (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 2011, awards comprising an aggregate of 38,548,775
shares and 191,581,901 shares have been granted under the Share Plan 2003 and Share Plan 2004 respectively.
Performance share awards granted, vested and cancelled during the financial year, and share awards outstanding at the end
of the financial year, were as follows -
Date of grant
Performance shares (General Awards)
For staff and senior management
29.05.07
28.11.07
27.02.08
04.06.08
01.09.08
02.12.08
02.03.09
03.06.09
02.09.09
03.03.10
03.06.10
01.09.10
02.12.10
02.03.11
For Group Chief Executive Officer
(Chua Sock Koong)
29.05.07
04.06.08
03.06.09
03.06.10
Balance
as at
1 April 2010
(’000)
Share
awards
granted
(’000)
Share
awards
vested
(’000)
Share
awards
cancelled
(’000)
Balance
as at
31 March 2011
(’000)
13,303
99
98
12,056
115
893
103
20,234
177
14
-
-
-
-
47,092
592
671
922
-
2,185
-
-
-
-
-
-
-
-
-
-
18,998
53
293
350
19,694
-
-
-
934
934
(12,571)
(94)
(77)
-
-
-
-
-
-
-
-
-
-
-
(12,742)
(562)
-
-
-
(562)
(732)
(5)
(21)
(630)
-
(26)
(20)
(1,557)
-
-
(1,022)
-
-
-
(4,013)
(30)
-
-
-
(30)
-
-
-
11,426
115
867
83
18,677
177
14
17,976
53
293
350
50,031
-
671
922
934
2,527
Sub-total
49,277
20,628
(13,304)
(4,043)
52,558
86
SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Directors’ Report
For the financial year ended 31 March 2011
5.2
Performance Shares (Cont’d)
Date of grant
Performance shares
(Senior Management Awards)
For senior management
29.05.07
04.06.08
03.06.09
03.06.10
For Group Chief Executive Officer
(Chua Sock Koong)
29.05.07
04.06.08
03.06.09
03.06.10
Sub-total
Total
Balance
as at
1 April 2010
(’000)
Share
awards
granted
(’000)
Share
awards
vested
(’000)
Share
awards
cancelled
(’000)
Balance
as at
31 March 2011
(’000)
1,534
1,574
2,290
-
5,398
440
453
629
-
1,522
6,920
-
-
-
2,538
2,538
-
-
-
630
630
(1,534)
-
-
-
(1,534)
(440)
-
-
-
(440)
-
(37)
-
-
(37)
-
-
-
-
-
3,168
(1,974)
(37)
-
1,537
2,290
2,538
6,365
-
453
629
630
1,712
8,077
56,197
23,796
(15,278)
(4,080)
60,635
During the financial year, awards in respect of an aggregate of 15,277,552 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 2011, 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.
ANNUAL REPORT 2010/2011 87
Directors’ Report
For the financial year ended 31 March 2011
6.
AUDIT COMMITTEE
At the date of this report, the Audit Committee comprises the following members, all of whom are non-executive and the
majority of whom, including the chairman, are independent -
Fang Ai Lian (Chairman of the Audit Committee)
Dominic Chiu Fai Ho
Kaikhushru Shiavax Nargolwala
Peter Ong Boon Kwee (appointed on 1 September 2010)
Graham John Bradley AM, who served during the financial year, stepped down as a member of the Audit Committee following
the conclusion of the Annual General Meeting on 30 July 2010.
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 internal and 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 2011 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, 11 May 2011
Chua Sock Koong
Director
88
SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Statement of Directors
For the financial year ended 31 March 2011
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 91 to 194 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 2011 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, 11 May 2011
Chua Sock Koong
Director
ANNUAL REPORT 2010/2011 89
Independent Auditors’ Report
To the Members of Singapore Telecommunications Limited
For the financial year ended 31 March 2011
REPORT ON THE FINANCIAL STATEMENTS
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 2011, 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 91 to 194.
MANAGEMENT’S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the provisions
of the Singapore Companies Act (the “Act”) and Singapore Financial Reporting Standards and for 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.
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 about 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 of financial statements that gives a true and fair view 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, 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 2011 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.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
In our opinion, 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, 11 May 2011
90
90
SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Consolidated Income Statement
For the financial year ended 31 March 2011
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/ (expense) (net)
Finance costs
Profit before tax
Tax expense
Profit after tax
Attributable to -
Shareholders of the Company
Non-controlling interests
Notes
2011
S$ Mil
2010
S$ Mil
4
5
6
7
8
9
18,070.6
16,870.9
(13,081.5)
(12,119.0)
130.2
94.7
5,119.3
4,846.6
(1,968.7)
55.7
(1,878.0)
4.7
3,206.3
2,973.3
1,564.1
1,862.1
4,770.4
4,835.4
10
11
43.5
(367.5)
(8.4)
(325.9)
4,446.4
4,501.1
12
(623.7)
(594.6)
3,822.7
3,906.5
3,825.3
(2.6)
3,907.3
(0.8)
3,822.7
3,906.5
Earnings per share attributable to shareholders of the Company
- basic (cents)
- diluted (cents)
13
13
24.02
23.98
24.55
24.46
The accompanying notes on pages 102 to 194 form an integral part of these financial statements.
Independent Auditors’ report – page 90
ANNUAL REPORT 2010/2011 91
Consolidated Statement of Comprehensive Income
For the financial year ended 31 March 2011
Profit after tax
Other comprehensive (loss)/ income:
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
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 (loss)/ income of associated
and joint venture companies
Other comprehensive (loss)/ income, net of tax
Total comprehensive income
Attributable to -
Shareholders of the Company
Non-controlling interests
2011
S$ Mil
2010
S$ Mil
3,822.7
3,906.5
(556.5)
1,420.9
-
(556.5)
(340.1)
1,080.8
(264.3)
(12.4)
(276.7)
144.4
38.2
182.6
(322.8)
48.1
(274.7)
370.7
(43.2)
327.5
(94.1)
52.8
34.5
-
34.5
21.5
60.9
82.4
(7.4)
4.1
(623.5)
1,220.1
3,199.2
5,126.6
3,201.8
(2.6)
5,127.4
(0.8)
3,199.2
5,126.6
The accompanying notes on pages 102 to 194 form an integral part of these financial statements.
Independent Auditors’ report – page 90
92
SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Statements of Financial Position
As at 31 March 2011
Current assets
Cash and cash equivalents
Trade and other receivables
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
2011
S$ Mil
2010
S$ Mil
2011
S$ Mil
2010
S$ Mil
Notes
15
16
25
17
18
19
20
21
22
24
25
12
26
27
28
29
30
25
2,738.0
3,449.3
68.6
299.3
6,555.2
11,112.5
10,218.3
-
172.4
10,024.5
309.1
-
764.0
126.3
32,727.1
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
223.3
5,516.7
68.6
71.7
5,880.3
1,890.8
2.0
7,734.1
24.7
34.1
38.6
22.9
-
270.8
10,018.0
201.3
3,452.5
12.8
151.8
3,818.4
1,891.8
2.3
9,942.3
24.7
34.1
31.1
182.7
-
158.5
12,267.5
39,282.3
37,951.5
15,898.3
16,085.9
4,450.1
0.3
391.7
2,672.6
26.3
999.8
8,540.8
4,649.8
17.9
338.9
1,513.1
14.9
300.2
6,834.8
1,575.5
-
248.3
2,667.4
-
988.2
5,479.4
1,999.6
-
214.0
-
-
14.4
2,228.0
The accompanying notes on pages 102 to 194 form an integral part of these financial statements.
Independent Auditors’ report – page 90
ANNUAL REPORT 2010/2011 93
Statements of Financial Position
As at 31 March 2011
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
Non-controlling interests
Notes
29
30
31
25
12
32
Group
Company
2011
S$ Mil
2010
S$ Mil
2011
S$ Mil
2010
S$ Mil
4,544.1
42.6
706.6
22.6
586.1
295.3
193.9
6,391.2
5,327.9
23.2
628.6
29.4
941.1
294.8
355.7
7,600.7
734.5
-
157.7
2.9
311.8
177.8
17.7
1,402.4
3,809.1
-
157.8
10.7
899.9
182.8
155.8
5,216.1
14,932.0
14,435.5
6,881.8
7,444.1
24,350.3
23,516.0
9,016.5
8,641.8
33
2,622.8
21,705.5
2,616.3
20,876.5
2,622.8
6,393.7
2,616.3
6,025.5
24,328.3
22.0
23,492.8
23.2
9,016.5
-
8,641.8
-
Total equity
24,350.3
23,516.0
9,016.5
8,641.8
The accompanying notes on pages 102 to 194 form an integral part of these financial statements.
Independent Auditors’ report – page 90
94
SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Statements of Changes in Equity
For the financial year ended 31 March 2011
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I
Statements of Changes in Equity
For the financial year ended 31 March 2011
Company - 2011
Capital
Reserve -
Treasury Performance
Shares
S$ Mil
Shares (1)
S$ Mil
Share
Capital
S$ Mil
Hedging
Reserve
S$ Mil
Fair Value
Reserve
S$ Mil
Retained
Earnings
S$ Mil
Total
Equity
S$ Mil
Balance as at 1 April 2010
2,616.3
-
(58.8)
(167.2)
21.5
6,230.0
8,641.8
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
Transfer of equity to liability
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 (loss)/
income for the year
Balance as at 31 March 2011
2,622.8
6.5
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(5.4)
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(1.6)
(14.3)
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(1.6)
(14.3)
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(1,274.3)
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(1,083.5)
(2,357.1)
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(30.1)
7.5
2,754.4 2,731.8
(64.6)
(197.3)
29.0
6,626.6
9,016.5
The accompanying notes on pages 102 to 194 form an integral part of these financial statements.
Independent Auditors’ report – page 90
ANNUAL REPORT 2010/2011 97
Statements of Changes in Equity
For the financial year ended 31 March 2011
Company - 2010
Capital
Reserve -
Treasury Performance
Shares
S$ Mil
Shares (1)
S$ Mil
Share
Capital
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
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shares
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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
Balance as at 31 March 2010
2,616.3
10.7
-
-
-
-
-
-
-
-
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10.7
-
(10.8)
10.8
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(7.0)
13.1
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(0.3)
(28.0)
-
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(19.9)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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10.7
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(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)
-
70.7
6.5
1,102.9
1,180.1
(58.8)
(167.2)
21.5
6,230.0
8,641.8
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 102 to 194 form an integral part of these financial statements.
Independent Auditors’ report – page 90
98
SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Consolidated Statement of Cash Flows
For the financial year ended 31 March 2011
Cash Flows From Operating Activities
Profit before tax
Adjustments for -
Depreciation and amortisation
Exceptional items
Interest and investment (income)/ expense (net)
Finance costs
Share of results of associated and joint venture companies (post-tax)
Other non-cash items
2011
S$ Mil
2010
S$ Mil
4,446.4
4,501.1
1,968.7
(55.7)
(43.5)
367.5
(1,564.1)
18.8
691.7
1,878.0
(4.7)
8.4
325.9
(1,862.1)
36.5
382.0
Operating cash flow before working capital changes
5,138.1
4,883.1
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
(134.2)
101.4
31.6
16.6
(455.7)
357.2
(63.6)
26.2
5,153.5
4,747.2
(4.0)
1,194.0
(300.5)
(2.2)
953.6
(369.8)
6,043.0
5,328.8
The accompanying notes on pages 102 to 194 form an integral part of these financial statements.
Independent Auditors’ report – page 90
ANNUAL REPORT 2010/2011 99
Consolidated Statement of Cash Flows
For the financial year ended 31 March 2011
Cash Flows From Investing Activities
Dividends received from AFS investments (net of withholding tax paid)
Interest received
Contribution from non-controlling interests
Investment in associated and joint venture companies
Loan to joint venture company
Repayment of loan by joint venture company
Net proceeds from sale of trading investments
Investment in AFS investments
Proceeds from sale of AFS investments
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
2011
S$ Mil
2010
S$ Mil
17.7
34.0
2.3
(669.6)
-
1.4
-
(20.0)
0.8
(2,004.6)
(27.9)
29.4
23.8
(26.9)
(119.5)
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)
Net cash outflow from investing activities
(2,759.1)
(2,179.2)
The accompanying notes on pages 102 to 194 form an integral part of these financial statements.
Independent Auditors’ report – page 90
100 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Consolidated Statement of Cash Flows
For the financial year ended 31 March 2011
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 borrowings/ (repayment of borrowings)
Settlement of swap for bonds repaid
Net interest paid on borrowings and swaps
Dividend paid to non-controlling interests
Final dividend paid to shareholders of the Company
Interim dividend paid to shareholders of the Company
Net loan (repayment)/ proceeds from non-controlling interests
Proceeds from issue of shares
Purchase of performance shares
Net cash outflow from financing activities
Net increase in cash and cash equivalents
Exchange effects on cash and cash equivalents
Cash and cash equivalents at beginning of year
Note
2011
S$ Mil
2010
S$ Mil
638.3
(1,958.8)
2,755.9
(573.2)
(22.3)
839.9
(217.6)
(347.8)
(0.9)
(1,273.7)
(1,082.9)
(25.1)
6.5
(39.4)
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)
(2,141.0)
(2,634.4)
1,142.9
(18.4)
1,613.5
515.2
22.5
1,075.8
Cash and cash equivalents at end of year
15
2,738.0
1,613.5
The accompanying notes on pages 102 to 194 form an integral part of these financial statements.
Independent Auditors’ report – page 90
ANNUAL REPORT 2010/2011 101
Notes to the Financial Statements
For the financial year ended 31 March 2011
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 telecommunications systems and services, and
investment holding. The principal activities of the subsidiaries are disclosed in Note 45.
Under a licence granted by the Info-communications Development Authority of Singapore (“IDA”), the Group had the exclusive
rights to provide fixed national and international telecommunications services through 31 March 2000 (with limited exceptions)
and public cellular mobile telephone services through 31 March 1997. From the expiry of the exclusive rights, the Group’s
licences for these telecommunications services continue on a non-exclusive basis to 31 March 2017.
In addition, the Group is licensed to offer Internet services and has also obtained frequency spectrum and licence rights from
IDA to install, operate and maintain 3G mobile communication systems and services respectively, as well as wireless broadband
systems and services. The Group also holds licences from the Media Development Authority of Singapore for the purpose of
providing subscription nationwide television services.
In Australia, Optus was granted telecommunication licences under the Telecommunications Act 1991. Pursuant to the
Telecommunications (Transitional Provisions and Consequential Amendments) Act 1997, the licences continued to have effect
after the deregulation of telecommunications in Australia in 1997. The licences do not have a finite term, but are of continuing
operation until cancelled under the Telecommunications Act 1997.
These financial statements were authorised and approved for issue in accordance with a Directors’ resolution dated
11 May 2011.
2.
SIGNIFICANT ACCOUNTING POLICIES
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 2010, in
particular FRS 103 (revised) Business Combinations and FRS 27 (revised) Consolidated and Separate Financial Statement, resulted
in changes to the Group’s accounting policies but has no significant impact on the financial statements of the Group or the
Company in the current financial year.
102 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
102 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Notes to the Financial Statements
For the financial year ended 31 March 2011
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. Subsidiaries are consolidated from the date that control commences until the date
that control ceases. All significant inter-company balances and transactions are eliminated on consolidation.
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.
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.
ANNUAL REPORT 2010/2011 103
Notes to the Financial Statements
For the financial year ended 31 March 2011
2.2
Group Accounting (Cont’d)
2.2.4 Special purpose entity
The Trust has been consolidated in the consolidated financial statements under INT FRS 12, Consolidation – Special
Purpose Entities.
2.2.5 Business combinations
Business combinations are accounted for using the acquisition method on and after 1 April 2010. The consideration for each
acquisition is measured at the aggregate of the fair values of assets given, liabilities incurred and equity interests issued by the
Group and any contingent consideration arrangement at acquisition date. Acquisition-related costs, other than those associated
with the issue of debt or equity, are expensed as incurred.
Any contingent consideration payable is recognised at fair value at the acquisition date. If the contingent consideration is
classified as equity, it is not re-measured and settlement is accounted for within equity. Otherwise, subsequent changes to the
fair value of the contingent consideration are recognised in the income statement.
For business combinations that are achieved in stages, any existing equity interests in the acquiree entity are re-measured to
their fair values at acquisition date and any changes are taken to the income statement.
Non-controlling interests in subsidiaries represent the equity in subsidiaries which are not attributable, directly or indirectly,
to the shareholders of the Company, and are presented separately in the consolidated statement of comprehensive income,
statement of changes in equity and within equity in the consolidated statement of financial position. The Group elects for each
individual business combination whether non-controlling interests in the acquiree entity are recognised at fair value, or at the
non-controlling interests’ proportionate share of the fair value of the acquiree entity’s identifiable net assets, at the acquisition
date. Total comprehensive income is attributed to non-controlling interests based on their respective interests in a subsidiary,
even if this results in the non-controlling interests having a debit balance.
Changes in the Group’s interest in subsidiaries that do not result in loss of control are accounted for as equity transactions.
When the Group loses control of a subsidiary, any interest retained in the former subsidiary is recorded at fair value with
re-measurement gain or loss recognised in the income statement.
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
recognised as ‘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.
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 recognised as ‘Treasury Shares’
within equity.
104 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Notes to the Financial Statements
For the financial year ended 31 March 2011
2.3
Share Capital (Cont’d)
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, Associated and Joint Venture Companies
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 recognised in the income statement of the Company.
2.5
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 Financial assets at fair value through profit or loss (“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
AFS investments are initially recognised at fair value plus directly attributable transaction costs.
They 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.
ANNUAL REPORT 2010/2011 105
Notes to the Financial Statements
For the financial year ended 31 March 2011
2.6
Derivative Financial Instruments and Hedging Activities
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.
106 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Notes to the Financial Statements
For the financial year ended 31 March 2011
2.6
Derivative Financial Instruments and Hedging Activities (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 swaps and 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 Financial Instruments
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.
ANNUAL REPORT 2010/2011 107
Notes to the Financial Statements
For the financial year ended 31 March 2011
2.7
Fair Value Estimation of Financial Instruments (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 prior to 1 April 2010 are recorded initially at fair values plus transaction costs and
amortised in the income statement over the period of the guarantee. Financial guarantees issued by the Company on or after
1 April 2010 are charged guarantee fees based on fair value and recognised in the income statement when earned.
2.9
Trade and Other Receivables
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 Payables
Trade and other payables are initially recognised at fair value and subsequently measured at amortised cost using the effective
interest method.
2.11 Borrowings
Borrowings are initially recognised at fair value of the consideration received less directly attributable transaction costs. After
initial recognition, unhedged borrowings are subsequently stated at amortised cost using the effective interest method. Hedged
borrowings are accounted for in accordance with the accounting polices set out in Note 2.6.1.
108 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Notes to the Financial Statements
For the financial year ended 31 March 2011
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 loss of control of a subsidiary, loss of significant influence of an associated company or loss of joint control of a joint
venture company, the accumulated translation differences relating to that foreign operation are reclassified from equity to the
consolidated income statement as part of gain or loss on disposal.
On partial disposal where there is no loss of control of a subsidiary, the accumulated translation differences relating to the
disposal are reclassified to non-controlling interests. For partial disposals of associated or joint venture companies, the
accumulated translation differences relating to the disposal are taken to the consolidated income statement.
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 of the foreign entity, the accumulated exchange
differences deferred in the ‘Currency Translation Reserve’ are reclassified to the consolidated income statement in a similar
manner as described in Note 2.13.3.
ANNUAL REPORT 2010/2011 109
Notes to the Financial Statements
For the financial year ended 31 March 2011
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 on acquisition of subsidiaries on and after 1 April 2010 represents the excess of the consideration transferred, the
recognised amount of any non-controlling interest in the acquiree entity and the fair value of any previous equity interest in the
acquiree entity over the fair value of the net identifiable assets acquired, including contingent liabilities, at the acquisition date.
Such goodwill is recognised separately as intangible assets and stated at cost less accumulated impairment losses.
Acquisitions completed prior to 1 April 2001
Goodwill on acquisitions of subsidiaries, associated and joint venture companies 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 of subsidiaries, associated and joint venture companies 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.
Bargain purchase gain 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.
110 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Notes to the Financial Statements
For the financial year ended 31 March 2011
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.
2.16
Impairment of Non-financial Assets
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).
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 the 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, and fibre rollout. 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.
ANNUAL REPORT 2010/2011 111
Notes to the Financial Statements
For the financial year ended 31 March 2011
2.18 Property, Plant and Equipment
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, and 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.
112 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Notes to the Financial Statements
For the financial year ended 31 March 2011
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.
ANNUAL REPORT 2010/2011 113
Notes to the Financial Statements
For the financial year ended 31 March 2011
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, and fibre rollout are 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 of annual leave and long service leave as a result of services rendered by employees up to the
end of the reporting period.
114 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Notes to the Financial Statements
For the financial year ended 31 March 2011
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 the end of each reporting period. 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 Expenses
Pre-incorporation expenses are expensed as incurred.
ANNUAL REPORT 2010/2011 115
Notes to the Financial Statements
For the financial year ended 31 March 2011
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 Exceptional Items
Exceptional items refer to items of income or expense within the income statement from ordinary activities that are of such size,
nature or incidence that their separate disclosure is considered necessary to explain the performance for the financial year.
2.27 Deferred Taxation
Deferred taxation is provided in full, using the liability method, on all temporary differences at the 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 all or part 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.
116 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Notes to the Financial Statements
For the financial year ended 31 March 2011
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 Disposal Groups) Held for Sale and Discontinued Operations
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 ESTIMATES AND JUDGEMENTS
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 23.
3.2
Impairment of Trade Receivables
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.
ANNUAL REPORT 2010/2011 117
Notes to the Financial Statements
For the financial year ended 31 March 2011
3.3
Estimated Useful Lives of Property, Plant and Equipment
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 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 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
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 2011, the Group was involved in various legal proceedings where it has been vigorously defending its claims as
disclosed in Note 40.
118 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Notes to the Financial Statements
For the financial year ended 31 March 2011
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
Group
2011
S$ Mil
7,719.8
3,486.7
1,759.1
267.5
2,026.6
1,886.4
1,557.4
852.8
184.3
356.6
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
18,070.6
16,870.9
18,070.6
130.2
53.4
16,870.9
94.7
36.1
18,254.2
17,001.7
ANNUAL REPORT 2010/2011 119
Notes to the Financial Statements
For the financial year ended 31 March 2011
5.
OPERATING EXPENSES
Selling and administrative costs (1)
Traffic expenses
Staff costs
Cost of equipment sold
Repairs and maintenance
Other cost of sales
Group
2011
S$ Mil
4,701.4
2,881.1
2,196.6
2,005.8
322.2
974.4
2010
S$ Mil
4,165.3
2,714.1
2,122.1
1,896.2
322.0
899.3
13,081.5
12,119.0
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
2011
S$ Mil
2010
S$ Mil
211.8
204.8
21.9
3.4
8.3
24.4
9.2
6.8
120 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Notes to the Financial Statements
For the financial year ended 31 March 2011
5.2
Key Management Personnel Compensation
Key management personnel compensation (1)
Directors’ fees and remuneration (2)
Other key management personnel remuneration (3)
Group
2011
S$ Mil
2010
S$ Mil
6.5
12.6
19.1
6.1
12.5
18.6
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 Executive Director was awarded up to 1,564,409 (2010: 1,551,738) 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
Executive Director computed in accordance with FRS 102, Share-based Payment, was S$2.2 million (2010: S$2.6 million).
(3) The other key management personnel were awarded up to 4,573,308 (2010: 3,953,019) ordinary shares of SingTel pursuant to Share
Plan 2004 during the year, subject to certain performance criteria including other terms and conditions being met. The performance
share expense for other key management computed in accordance with FRS 102, Share-based Payment, was S$5.8 million (2010:
S$6.9 million).
The other key management personnel of the Group comprise members of SingTel’s Management Committee.
5.3
Share-based Payments
5.3.1 Share options
In 2003, the Singapore Telecom Share Option Scheme 1999 was suspended with the implementation of Share Plan
2003. The existing share options granted continue to vest according to the terms and conditions of the scheme and the
respective grants.
The share options have a validity period of ten years from the date of grant, and are granted either without performance hurdles
(“Market Price Share Options”) or with performance hurdles (“Performance Share Options”).
Market Price Share Options are granted based on the performance of the Group and individuals. These share options vest over
three years from the date of the grant and are exercisable after the first anniversary of the date of the grant and will expire on
the tenth anniversary of the date of grant.
Performance Share Options are conditional grants where vesting is conditional on performance targets set based on medium-
term corporate objectives. At the end of the three-year performance period, the final number of Performance Share Options
awarded will depend on the level of achievement of those targets.
ANNUAL REPORT 2010/2011 121
Notes to the Financial Statements
For the financial year ended 31 March 2011
5.3.1 Share options (Cont’d)
Group and Company
Outstanding as at 1 April
Cancelled
Exercised
Number of
share options
2011
’000
2010
’000
12,495
(329)
(3,547)
18,979
(1,093)
(5,391)
Outstanding and exercisable as at 31 March
8,619
12,495
The outstanding share options have the following exercise prices -
S$2.00 to S$2.49
S$1.50 to S$1.99
S$1.40 to S$1.49
Weighted average remaining validity life
No compensation expense is recognised when the share options are issued (see Note 2.21.3).
Weighted average
exercise price
per share
2011
S$
1.59
1.92
1.83
1.48
2011
’000
2010
S$
1.75
2.40
1.97
1.59
2010
’000
-
3,027
5,592
2,077
4,088
6,330
8,619
12,495
1.0 year
1.6 years
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.
122 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Notes to the Financial Statements
For the financial year ended 31 March 2011
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
2011
Date of grant
Share Plan 2004
FY2008 (1)
29 May 2007
Sep 2007 to Feb 2008
FY2009
4 Jun 2008
Sep 2008 to Mar 2009
FY2010
3 Jun 2009
Sep 2009 to Mar 2010
FY2011
3 Jun 2010
Sep 2010 to Mar 2011
Outstanding
as at
1 April 2010
(’000)
Granted
(’000)
Vested
(’000)
Cancelled
(’000)
Outstanding
and unvested
as at
31 March 2011
(’000)
13,895
197
12,727
1,111
21,156
191
-
-
-
-
-
-
-
-
19,932
696
(13,133)
(171)
-
-
-
-
-
-
(762)
(26)
(630)
(46)
(1,557)
-
(1,022)
-
-
-
12,097
1,065
19,599
191
18,910
696
49,277
20,628
(13,304)
(4,043)
52,558
Note:
(1)
“FY2008” denotes financial year ended 31 March 2008.
ANNUAL REPORT 2010/2011 123
Notes to the Financial Statements
For the financial year ended 31 March 2011
5.3.2 Performance share plans (Cont’d)
Group and Company
2010
Date of grant
Share Plan 2004
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
FY2010
3 Jun 2009
Sep 2009 to Mar 2010
Outstanding
as at
1 April 2009
(’000)
Granted
(’000)
Vested
(’000)
Cancelled
(’000)
Outstanding
and unvested
as at
31 March 2010
(’000)
26,288
90
14,756
207
13,321
1,143
-
-
-
-
-
-
-
-
21,918
191
(24,706)
(57)
(1,582)
(33)
-
-
-
-
-
-
-
-
(861)
(10)
(594)
(32)
(762)
-
13,895
197
12,727
1,111
21,156
191
55,805
22,109
(24,763)
(3,874)
49,277
124 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Notes to the Financial Statements
For the financial year ended 31 March 2011
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 -
2011 and 2010
General Awards
Fair value at grant date
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
Date of grant
Share Plan 2004
FY2009
4 June 08
FY2010
3 June 09
FY2011
3 June 10
S$1.61
S$1.56
S$1.53
25.9%
17.6%
34.6%
23.1%
33.4%
22.7%
July 2001
June 2008
July 2001
June 2009
July 2001
June 2010
4 June 2008
3 June 2009
3 June 2010
ANNUAL REPORT 2010/2011 125
Notes to the Financial Statements
For the financial year ended 31 March 2011
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 -
2011
Senior Management Awards
Number of performance shares (’000)
Outstanding as at 1 April 2010
Granted
Vested
Cancelled
Outstanding and unvested as at
31 March 2011
Date of grant
Share Plan 2004
FY2008
29 May 07
FY2009
4 June 08
FY2010
3 June 09
FY2011
3 June 10
Group
And
Company
1,974
-
(1,974)
-
2,027
-
-
(37)
2,919
-
-
-
-
3,168
-
-
6,920
3,168
(1,974)
(37)
-
1,990
2,919
3,168
8,077
Fair value at 31 March 2011
S$2.96
S$2.49
S$2.05
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
30.5%
19.9%
30.5%
19.9%
800 days historical volatility
preceding March 2011
31 March 2011 31 March 2011
126 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Notes to the Financial Statements
For the financial year ended 31 March 2011
5.3.2 Performance share plans (Cont’d)
2010
Senior Management Awards
Number of performance shares (’000)
Outstanding as at 1 April 2009
Granted
Vested
Cancelled
Outstanding and unvested as at
31 March 2010
Date of grant
Share Plan 2004
FY2007
25 May 06
FY2008
29 May 07
FY2009
4 June 08
FY2010
3 June 09
Group
And
Company
1,980
-
(1,980)
-
2,058
-
-
(84)
2,074
-
-
(47)
-
2,919
-
-
6,112
2,919
(1,980)
(131)
-
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
ANNUAL REPORT 2010/2011 127
Notes to the Financial Statements
For the financial year ended 31 March 2011
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.
2011
PBDBS (cash-settled)
Number of performance shares (’000)
Outstanding as at 1 April 2010
Granted
Vested
Cancelled
Outstanding and unvested as at
31 March 2011
Date of grant
FY2008
29 May 07
FY2009
4 June 08
FY2010
3 June 09
FY2011
3 June 10
Group
584
-
(534)
(50)
572
-
-
(26)
589
-
-
-
-
538
-
-
1,745
538
(534)
(76)
-
546
589
538
1,673
Fair value at 31 March 2011
S$2.96
S$1.63
S$1.27
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
30.5%
19.9%
30.5%
19.9%
800 days historical volatility
preceding March 2011
31 March 2011 31 March 2011
128 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Notes to the Financial Statements
For the financial year ended 31 March 2011
5.3.3 Performance-based Deferred Bonus Scheme (“PBDBS”) (Cont’d)
2010
PBDBS (cash-settled)
Number of performance shares (’000)
Outstanding as at 1 April 2009
Granted
Vested
Cancelled
Outstanding and unvested as at
31 March 2010
Date of grant
FY2007
25 May 06
FY2008
29 May 07
FY2009
4 June 08
FY2010
3 June 09
Group
953
-
(900)
(53)
613
-
-
(29)
622
-
-
(50)
-
623
-
(34)
2,188
623
(900)
(166)
-
584
572
589
1,745
Fair value at 31 March 2010
S$3.22
S$1.46
S$1.92
Assumptions under Monte-Carlo Model
Expected volatility
SingTel
MSCI Asia Pacific Telco Index
MSCI Asia Pacific Telco Component Stocks
Risk free interest rates
Yield of Singapore Government Securities on
33.7%
22.8%
33.7%
22.8%
800 days historical volatility
preceding March 2010
31 March 2010 31 March 2010
ANNUAL REPORT 2010/2011 129
Notes to the Financial Statements
For the financial year ended 31 March 2011
5.4
Special Purpose Entity
The Trust’s purpose is to purchase the Company’s shares from the open market for delivery to the recipients upon vesting of
the awards.
As at the end of the reporting period, the Trust held the following assets -
Cash at bank
Cost of SingTel shares, net of vesting
The details of SingTel shares held by the Trust were as follows -
Group
Balance as at 1 April
Purchase of SingTel shares
Vesting of shares
Balance as at 31 March
Group
Company
2011
S$ Mil
0.6
27.1
27.7
2010
S$ Mil
0.5
30.5
31.0
2011
S$ Mil
0.5
20.4
20.9
Number of shares
Amount
2011
’000
10,125
6,985
(8,223)
2010
’000
13,303
15,276
(18,454)
2011
S$ Mil
30.5
21.5
(24.9)
8,887
10,125
27.1
2010
S$ Mil
0.4
23.6
24.0
2010
S$ Mil
43.7
41.5
(54.7)
30.5
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.
130 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Notes to the Financial Statements
For the financial year ended 31 March 2011
5.5
Other Operating Expense Items
Operating expenses included the following -
Auditors’ remuneration
- Deloitte & Touche LLP, Singapore
- Deloitte Touche Tohmatsu, Australia
- Other Deloitte & Touche offices
Non-audit fees paid to
- Deloitte & Touche LLP, Singapore (1)
- Deloitte Touche Tohmatsu, Australia (1)
Impairment of trade receivables
Allowance for inventory obsolescence
Inventory written off
(Write-back of provision)/ Provision for liquidated damages and warranties
Research and development expenses written off
Operating lease payments for properties and mobile base stations
Group
2011
S$ Mil
2010
S$ Mil
1.1
1.0
0.3
0.3
0.4
136.8
19.3
4.6
(17.4)
2.2
283.6
1.0
1.0
0.3
0.6
0.3
138.1
13.9
4.0
2.5
0.5
258.6
Note:
(1) The non-audit fees for the current financial year ended 31 March 2011 included S$0.2 million (2010: S$0.1 million) and S$0.1 million (2010:
S$0.3 million) paid to Deloitte & Touche LLP, Singapore, and Deloitte Touche Tohmatsu, Australia, respectively in respect of certification and
review for regulatory purposes.
The Audit Committee had undertaken a review of the non-audit services provided by the auditors, Deloitte & Touche LLP, and in
the opinion of the Audit Committee, these services would not affect the independence of the auditors.
6.
OTHER INCOME
Bad trade receivables recovered
Rental income
Net foreign exchange gains/ (losses) - trade related
Net gains/ (losses) on disposal of property, plant and equipment
Others
Group
2011
S$ Mil
9.8
5.2
1.8
6.7
106.7
130.2
2010
S$ Mil
7.2
4.8
(15.4)
(4.3)
102.4
94.7
ANNUAL REPORT 2010/2011 131
Notes to the Financial Statements
For the financial year ended 31 March 2011
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 ITEMS
Exceptional gains
Fair value gain on purchase consideration payable for
a joint venture company (see Note 27)
Net foreign exchange gains on intra-group loans
Gain on disposal of non-current investments
Gain on dilution of interest in associated and joint venture companies
Others
Exceptional losses
Impairment of associated and joint venture companies
Impairment of AFS investments
Others
Group
2011
S$ Mil
1,863.6
111.9
(3.7)
(3.1)
2010
S$ Mil
1,818.5
64.3
(1.7)
(3.1)
1,968.7
1,878.0
Group
2011
S$ Mil
2010
S$ Mil
38.0
18.5
-
3.5
-
60.0
-
-
(4.3)
(4.3)
55.7
-
327.4
2.4
3.2
1.5
334.5
(260.0)
(60.9)
(8.9)
(329.8)
4.7
132 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Notes to the Financial Statements
For the financial year ended 31 March 2011
9.
SHARE OF RESULTS OF ASSOCIATED AND JOINT VENTURE COMPANIES
Share of ordinary results of
- joint venture companies
- associated companies
Group
2011
S$ Mil
2010
S$ Mil
2,143.7
6.1
2,149.8
2,426.8
(7.3)
2,419.5
Share of exceptional items (1) of associated and joint venture companies
(40.6)
(16.5)
Share of tax of
- joint venture companies
- associated companies
Note:
(1) Share of exceptional items comprised -
Brand launch costs
Transaction costs on acquisitions
Recognition of additional depreciation and finance charges
Reversal of gain on dilution of equity interest in a subsidiary
Recognition of deferred revenue
(533.6)
(11.5)
(545.1)
(535.5)
(5.4)
(540.9)
1,564.1
1,862.1
(31.5)
(9.6)
(7.0)
-
7.5
-
(9.6)
-
(6.9)
-
(40.6)
(16.5)
ANNUAL REPORT 2010/2011 133
Notes to the Financial Statements
For the financial year ended 31 March 2011
10.
INTEREST AND INVESTMENT INCOME/ (EXPENSE) (NET)
Interest income from
- bank deposits
- others
Gross dividends from AFS investments
Other revenue
Net foreign exchange losses - non-trade related
Fair value losses on hedging instruments
Fair value gains/ (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)
The interest rate applicable to the capitalised borrowings was 4.6 per cent as at 31 March 2010.
134 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Group
2011
S$ Mil
2010
S$ Mil
30.8
3.0
33.8
19.6
53.4
(5.5)
(4.4)
522.1
(522.1)
-
15.3
1.4
16.7
19.4
36.1
(26.0)
(18.5)
752.4
(752.4)
-
43.5
(8.4)
Group
2011
S$ Mil
352.5
28.1
17.7
398.3
-
398.3
(39.1)
8.3
2010
S$ Mil
302.2
56.4
21.7
380.3
(7.2)
373.1
(48.2)
1.0
367.5
325.9
Notes to the Financial Statements
For the financial year ended 31 March 2011
12.
TAXATION
12.1 Tax Expense
Current income tax
- Singapore
- Overseas
Deferred income tax
Group
2011
S$ Mil
259.8
513.4
773.2
8.5
2010
S$ Mil
253.0
502.0
755.0
(39.0)
Tax expense attributable to current year’s profit
781.7
716.0
Recognition of deferred tax asset on other temporary differences (1)
(123.8)
(120.4)
Adjustments in respect of prior year -
Current income tax
- over provision
Deferred income tax
- over provision
(17.8)
(16.4)
(0.4)
(0.6)
623.7
594.6
Note:
(1) This relates to a deferred tax asset recognised on interest expense arising from inter-company loans.
ANNUAL REPORT 2010/2011 135
Notes to the Financial Statements
For the financial year ended 31 March 2011
12.1 Tax Expense (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 (2010: 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
Group
2011
S$ Mil
4,446.4
(1,564.1)
2,882.3
2010
S$ Mil
4,501.1
(1,862.1)
2,639.0
490.0
448.6
281.5
(24.0)
28.0
1.9
(0.3)
4.6
259.4
(80.9)
88.8
2.1
(1.4)
(0.6)
Tax expense attributable to current year’s profit
781.7
716.0
136 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Notes to the Financial Statements
For the financial year ended 31 March 2011
12.2 Deferred Taxes
The movements of the deferred tax assets and liabilities (prior to offsetting of balances within the same tax jurisdiction) during
the financial year were as follows -
Group - 2011
Deferred tax assets
Provisions
S$ Mil
TWDV (1) in
excess of
NBV (2) of
depreciable
assets
S$ Mil
Tax losses
and
unutilised
capital
allowances
S$ Mil
Balance as at 1 April 2010
Credited/ (Charged) to income statement
Credited to other comprehensive income
Transfer to current tax
Translation differences
251.3
115.5
-
(233.2)
0.6
407.7
6.2
-
-
6.4
57.2
0.1
-
(54.1)
(0.9)
Others
S$ Mil
191.0
(1.8)
25.8
-
3.3
Total
S$ Mil
907.2
120.0
25.8
(287.3)
9.4
Balance as at 31 March 2011
134.2
420.3
2.3
218.3
775.1
Group - 2011
Deferred tax liabilities
Balance as at 1 April 2010
Credited/ (Charged) to income statement
Transfer from current tax
Translation differences
Balance as at 31 March 2011
Accelerated
tax
depreciation
S$ Mil
Offshore
interest and
dividend
not
remitted
S$ Mil
Others
S$ Mil
Total
S$ Mil
(293.7)
10.5
(6.3)
(0.1)
(289.6)
(5.1)
(0.1)
-
-
(5.2)
(12.9)
1.3
-
-
(311.7)
11.7
(6.3)
(0.1)
(11.6)
(306.4)
ANNUAL REPORT 2010/2011 137
Notes to the Financial Statements
For the financial year ended 31 March 2011
12.2 Deferred Taxes (Cont’d)
Group - 2010
Deferred tax assets
Provisions
S$ Mil
TWDV (1) in
excess of
NBV (2) of
depreciable
assets
S$ Mil
Tax losses
and
unutilised
capital
allowances
S$ Mil
Others
S$ Mil
Total
S$ Mil
Balance as at 1 April 2009
Credited/ (Charged) to income statement
Credited to other comprehensive income
Transfer (to)/ from current tax
Translation differences
311.1
133.0
-
(256.7)
63.9
328.5
5.5
-
-
73.7
75.3
(0.4)
-
(32.8)
15.1
104.1
25.1
4.9
31.3
25.6
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 from current tax
Translation differences
Balance as at 31 March 2010
Accelerated
tax
depreciation
S$ Mil
Offshore
interest and
dividend
not
remitted
S$ Mil
Others
S$ Mil
Total
S$ Mil
(288.7)
(4.9)
-
(0.1)
(293.7)
(5.1)
-
-
-
(5.1)
(26.7)
1.7
12.5
(0.4)
(320.5)
(3.2)
12.5
(0.5)
(12.9)
(311.7)
138 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Notes to the Financial Statements
For the financial year ended 31 March 2011
12.2 Deferred Taxes (Cont’d)
Company - 2011
Deferred tax assets
Deferred
sale and
leaseback
income
S$ Mil
Provisions
S$ Mil
Others
S$ Mil
Total
S$ Mil
Balance as at 1 April 2010
Credited/ (Charged) to income statement
Balance as at 31 March 2011
0.5
0.1
0.6
0.7
(0.2)
0.5
1.5
0.5
2.0
2.7
0.4
3.1
Total
S$ Mil
(185.5)
10.8
(6.2)
Accelerated
tax
depreciation
S$ Mil
(185.5)
10.8
(6.2)
(180.9)
(180.9)
Deferred
sale and
leaseback
income
S$ Mil
Provisions
S$ Mil
Others
S$ Mil
Total
S$ Mil
Company - 2011
Deferred tax liabilities
Balance as at 1 April 2010
Credited to income statement
Transfer from current tax
Balance as at 31 March 2011
Company - 2010
Deferred tax assets
Balance as at 1 April 2009
Credited/ (Charged) to income statement
Balance as at 31 March 2010
0.3
0.2
0.5
0.9
(0.2)
2.2
(0.7)
0.7
1.5
3.4
(0.7)
2.7
Company - 2010
Deferred tax liabilities
Balance as at 1 April 2009
Credited to income statement
Balance as at 31 March 2010
Notes:
(1) TWDV – Tax written down value
(2) NBV – Net book value
Accelerated
tax
depreciation
S$ Mil
Total
S$ Mil
(190.1)
4.6
(190.1)
4.6
(185.5)
(185.5)
ANNUAL REPORT 2010/2011 139
Notes to the Financial Statements
For the financial year ended 31 March 2011
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
2011
S$ Mil
764.0
(295.3)
2010
S$ Mil
890.3
(294.8)
2011
S$ Mil
-
(177.8)
2010
S$ Mil
-
(182.8)
468.7
595.5
(177.8)
(182.8)
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 2011, the subsidiaries of the Group had estimated unutilised income tax losses of approximately S$86 million
(2010: S$280 million), including S$3.0 million (2010: S$187 million) from the Optus Group, unutilised capital tax losses of S$137
million (2010: S$26 million) and unabsorbed capital allowances of approximately S$8.2 million (2010: S$2.1 million).
These unutilised income tax losses and unabsorbed capital allowances are available for set-off against future taxable profits,
subject to the agreement of the relevant tax authorities and compliance with certain provisions of the income tax regulations
of the respective countries in which the subsidiaries operate. The unutilised capital tax losses are available for set-off against
future capital gains of a similar nature subject to compliance with certain statutory tests in Australia.
As at the end of the reporting period, the potential tax benefits arising from the following items were not recognised in the
financial statements due to uncertainty on their recoverability -
Unutilised income tax losses and unabsorbed capital allowances
Unutilised capital tax losses
Group
2011
S$ Mil
90.6
137.0
2010
S$ Mil
95.5
25.9
140 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Notes to the Financial Statements
For the financial year ended 31 March 2011
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.
Group
2011
’000
2010
’000
15,925,839
5,013
18,456
15,918,280
7,055
44,379
15,949,308
15,969,714
‘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.
ANNUAL REPORT 2010/2011 141
Notes to the Financial Statements
For the financial year ended 31 March 2011
14.
RELATED PARTY TRANSACTIONS
Related parties consist of key management of the Group, subsidiaries of the ultimate holding company, and associated and joint
venture companies of the Group. In addition to the related party information disclosed elsewhere in the financial statements,
the Group had the following significant transactions and balances with related parties -
Revenue
Subsidiaries of ultimate holding company
Telecommunications
Rental and maintenance
Information technology and engineering
Associated and joint venture companies
Telecommunications
Expenses
Subsidiaries of ultimate holding company
Telecommunications
Utilities
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
2011
S$ Mil
2010
S$ Mil
139.7
29.8
12.6
129.5
30.0
15.7
37.1
34.0
78.4
89.3
72.9
45.4
10.3
26.0
3.2
71.4
76.5
68.3
7.3
10.9
19.0
5.6
142 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Notes to the Financial Statements
For the financial year ended 31 March 2011
15.
CASH AND CASH EQUIVALENTS
Fixed deposits
Cash and bank balances
Group
Company
2011
S$ Mil
2,049.5
688.5
2010
S$ Mil
1,175.9
437.7
2011
S$ Mil
161.8
61.5
2010
S$ Mil
142.0
59.3
2,738.0
1,613.6
223.3
201.3
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 29)
Group
2011
S$ Mil
2,049.5
688.5
-
2010
S$ Mil
1,175.9
437.7
(0.1)
2,738.0
1,613.5
Cash and cash equivalents denominated in the non-functional currencies of the Group were as follows -
USD
AUD
JPY
The maturities of the fixed deposits were as follows -
Less than three months
Over three months
Group
Company
2011
S$ Mil
167.8
45.9
28.8
2010
S$ Mil
200.9
14.2
10.6
2011
S$ Mil
122.1
45.6
7.6
Group
Company
2011
S$ Mil
2,043.4
6.1
2010
S$ Mil
1,170.9
5.0
2011
S$ Mil
161.8
-
2010
S$ Mil
150.3
13.9
0.2
2010
S$ Mil
142.0
-
As at 31 March 2011, the weighted average effective interest rates of the fixed deposits of the Group and Company were 0.4 per
cent (2010: 0.3 per cent) and 0.1 per cent (2010: 0.1 per cent) respectively.
2,049.5
1,175.9
161.8
142.0
The exposure of cash and cash equivalents to interest rate risks is disclosed in Note 36.3.
ANNUAL REPORT 2010/2011 143
Notes to the Financial Statements
For the financial year ended 31 March 2011
16.
TRADE AND OTHER RECEIVABLES
Trade receivables
Less: Allowance for impairment of
trade receivables
Group
Company
2011
S$ Mil
2010
S$ Mil
2011
S$ Mil
2,757.1
2,720.4
498.5
(280.5)
2,476.6
(294.8)
2,425.6
(75.9)
422.6
Other receivables
252.9
187.5
18.1
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
for fibre rollout
Loan to joint venture company
Interest receivable
Prepayments
Staff loans
Others
-
-
-
-
-
-
-
12.3
104.6
116.9
186.2
-
117.6
285.4
0.9
12.8
-
-
-
-
-
-
-
5.6
7.8
13.4
207.8
1.4
105.6
216.6
1.3
12.9
458.1
(12.9)
445.2
684.5
3,694.9
(45.7)
4,333.7
2.2
2.4
4.6
186.2
-
73.0
27.6
0.1
5.6
2010
S$ Mil
464.2
(88.5)
375.7
22.9
143.3
(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
As at 31 March 2011, the effective interest rate of a loan to a subsidiary was 1.2 per cent (2010: nil) per annum. The loans to
other subsidiaries and the balances with subsidiaries, associated and joint venture companies were unsecured, interest-free
and repayable on demand.
3,449.3
3,172.1
5,516.7
3,452.5
144 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Notes to the Financial Statements
For the financial year ended 31 March 2011
16.
TRADE AND OTHER RECEIVABLES (Cont’d)
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 2011, 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
2011
S$ Mil
580.8
1,895.8
2010
S$ Mil
629.4
1,796.2
2011
S$ Mil
140.7
281.9
2010
S$ Mil
173.1
202.6
2,476.6
2,425.6
422.6
375.7
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
2011
S$ Mil
2010
S$ Mil
2011
S$ Mil
2010
S$ Mil
2,338.1
2,299.7
374.6
344.2
182.8
236.2
190.7
230.0
24.7
99.2
31.1
88.9
2,757.1
2,720.4
498.5
464.2
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.
ANNUAL REPORT 2010/2011 145
Notes to the Financial Statements
For the financial year ended 31 March 2011
16.
TRADE AND OTHER RECEIVABLES (Cont’d)
The movement in the allowance for impairment of trade receivables is as follows -
Balance as at 1 April
Allowance for impairment
Utilisation
Write-back
Translation differences
Group
Company
2011
S$ Mil
294.8
161.7
(156.9)
(24.9)
5.8
2010
S$ Mil
260.6
142.0
(142.1)
(3.9)
38.2
2011
S$ Mil
88.5
31.0
(28.7)
(14.9)
-
2010
S$ Mil
82.8
26.9
(21.2)
-
-
Balance as at 31 March
280.5
294.8
75.9
88.5
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
2011
S$ Mil
24.1
(11.2)
12.9
2010
S$ Mil
24.2
(0.1)
24.1
146 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Notes to the Financial Statements
For the financial year ended 31 March 2011
17.
INVENTORIES
Equipment held for resale
Maintenance and capital works’ inventories
Work-in-progress
- fibre rollout
- others
Group
Company
2011
S$ Mil
228.7
35.9
34.7
-
34.7
2010
S$ Mil
191.1
33.2
118.9
2.6
121.5
2011
S$ Mil
1.3
35.7
34.7
-
34.7
2010
S$ Mil
-
32.9
118.9
-
118.9
299.3
345.8
71.7
151.8
ANNUAL REPORT 2010/2011 147
Notes to the Financial Statements
For the financial year ended 31 March 2011
18.
PROPERTY, PLANT AND EQUIPMENT
Group - 2011
Cost
Balance as at 1 April 2010
Additions (net of rebates)
Disposals/ Write-offs
Reclassifications /
Adjustments
Translation differences
Balance as at
31 March 2011
Accumulated depreciation
Balance as at 1 April 2010
Depreciation charge
for the year
Disposals/ Write-offs
Translation differences
Balance as at
31 March 2011
Accumulated impairment
Balance as at 1 April 2010
Disposals
Balance as at
31 March 2011
Net Book Value as at
31 March 2011
Freehold Leasehold
land
S$ Mil
land Buildings
S$ Mil
S$ Mil
Transmission
plant and Switching
Other
plant and
equipment equipment equipment
S$ Mil
S$ Mil
S$ Mil
Capital
work-in-
progress
S$ Mil
Total
S$ Mil
27.0
-
-
-
0.4
258.0
-
(8.0)
680.9
0.2
-
16,955.4
323.2
(273.4)
2,946.1
131.9
(57.0)
5,708.3
192.4
(63.4)
518.1
1,475.5
-
27,093.8
2,123.2
(401.8)
-
(1.5)
87.8
5.8
657.6
208.2
71.7
20.3
407.2
72.1
(1,209.4)
8.8
14.9
314.1
27.4
248.5
774.7
17,871.0
3,113.0
6,316.6
793.0
29,144.2
-
-
-
-
50.0
275.4
9,823.4
2,041.9
4,126.6
-
16,317.3
4.1
(1.1)
(0.8)
17.9
-
0.8
1,181.6
(268.1)
138.5
165.7
(54.2)
12.5
494.3
(59.7)
56.7
-
-
-
1,863.6
(383.1)
207.7
-
52.2
294.1
10,875.4
2,165.9
4,617.9
-
18,005.5
-
-
2.0
-
7.3
-
8.5
-
5.2
-
3.3
(0.1)
-
-
26.3
(0.1)
-
2.0
7.3
8.5
5.2
3.2
-
26.2
27.4
194.3
473.3
6,987.1
941.9
1,695.5
793.0
11,112.5
148 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Notes to the Financial Statements
For the financial year ended 31 March 2011
18.
PROPERTY, PLANT AND EQUIPMENT (Cont’d)
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
Accumulated depreciation
Balance as at 1 April 2009
Depreciation charge
for the year
Disposals/ Write-offs
Translation differences
Balance as at
31 March 2010
Accumulated impairment
Balance as at 1 April 2009
Impairment charge
for the year
Disposals
Translation differences
Balance as at
31 March 2010
Net Book Value as at
31 March 2010
Freehold Leasehold
land
S$ Mil
land Buildings
S$ Mil
S$ Mil
Transmission
plant and Switching
Other
plant and
equipment equipment equipment
S$ Mil
S$ Mil
S$ Mil
Capital
work-in-
progress
S$ Mil
Total
S$ Mil
22.1
-
-
-
4.9
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
-
-
-
-
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
-
50.0
275.4
9,823.4
2,041.9
4,126.6
-
16,317.3
-
-
-
-
2.0
7.3
-
-
-
-
-
-
2.7
5.8
-
-
4.4
10.0
3.1
(2.4)
0.1
-
(6.7)
-
-
-
-
-
26.4
8.9
(9.1)
0.1
-
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
ANNUAL REPORT 2010/2011 149
Notes to the Financial Statements
For the financial year ended 31 March 2011
18.
PROPERTY, PLANT AND EQUIPMENT (Cont’d)
Company - 2011
Cost
Balance as at 1 April 2010
Additions (net of rebates)
Disposals/ Write-offs
Balance as at
31 March 2011
Accumulated depreciation
Balance as at 1 April 2010
Depreciation charge
for the year
Disposals/ Write-offs
Balance as at
31 March 2011
Accumulated impairment
Balance as at 1 April 2010
and 31 March 2011
Net Book Value as at
31 March 2011
Freehold Leasehold
land
S$ Mil
land Buildings
S$ Mil
S$ Mil
Transmission
plant and Switching
Other
plant and
equipment equipment equipment
S$ Mil
S$ Mil
S$ Mil
Capital
work-in-
progress
S$ Mil
Total
S$ Mil
0.4
-
-
220.5
-
(8.0)
424.5
0.2
-
3,027.5
119.9
(224.0)
1,071.7
55.0
(33.0)
995.5
73.2
(43.3)
207.2
91.2
-
5,947.3
339.5
(308.3)
0.4
212.5
424.7
2,923.4
1,093.7
1,025.4
298.4
5,978.5
-
40.8
198.8
2,041.8
973.9
782.4
-
4,037.7
-
-
2.3
(1.1)
11.6
-
182.6
(206.2)
43.2
(32.4)
74.8
(42.6)
-
-
314.5
(282.3)
-
42.0
210.4
2,018.2
984.7
814.6
- 4,069.9
-
2.0
7.2
7.0
1.2
0.4
-
17.8
0.4
168.5
207.1
898.2
107.8
210.4
298.4
1,890.8
150 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Notes to the Financial Statements
For the financial year ended 31 March 2011
18.
PROPERTY, PLANT AND EQUIPMENT (Cont’d)
Company - 2010
Cost
Balance as at 1 April 2009
Additions (net of rebates)
Disposals/ Write-offs
Reclassifications
Balance as at
31 March 2010
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
Impairment charge
for the year
Disposals
Balance as at
31 March 2010
Net Book Value as at
31 March 2010
Freehold Leasehold
land
S$ Mil
land Buildings
S$ Mil
S$ Mil
Transmission
plant and Switching
Other
plant and
equipment equipment equipment
S$ Mil
S$ Mil
S$ Mil
Capital
work-in-
progress
S$ Mil
Total
S$ Mil
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)
0.4
220.5
424.5
3,027.5
1,071.7
995.5
207.2
5,947.3
-
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
-
1.3
-
11.7
-
-
-
-
5.8
-
1.2
-
-
(0.9)
-
-
7.0
(0.9)
-
2.0
7.2
7.0
1.2
0.4
-
17.8
0.4
177.7
218.5
978.7
96.6
212.7
207.2
1,891.8
Property, plant and equipment included the following -
Net book value of property, plant and equipment
- Finance lease obligations
- Held for generating operating lease income
Interest charges capitalised during the year
Group
Company
2011
S$ Mil
2010
S$ Mil
2011
S$ Mil
2010
S$ Mil
101.1
6.6
-
51.8
9.5
7.2
-
-
-
-
-
-
Staff costs capitalised during the year
192.1
175.3
14.7
11.8
In the previous financial year, an impairment charge of S$8.9 million was made at the Group on certain property, plant and
equipment to bring their carrying values to their recoverable values.
ANNUAL REPORT 2010/2011 151
Notes to the Financial Statements
For the financial year ended 31 March 2011
19.
INTANGIBLE ASSETS
Goodwill on acquisition of subsidiaries
Telecommunications and spectrum licences
Customer relationships and others
19.1 Goodwill on Acquisition of Subsidiaries
Balance as at 1 April
Translation differences
Balance as at 31 March
19.2 Telecommunications and Spectrum Licences
Balance as at 1 April
Additions
Amortisation for the year
Reclassifications
Translation differences
Balance as at 31 March
Cost
Accumulated amortisation
Accumulated impairment
2011
S$ Mil
9,657.2
541.5
19.6
Group
2010
S$ Mil
9,654.6
517.8
27.8
10,218.3
10,200.2
Company
2011
S$ Mil
2010
S$ Mil
-
2.0
-
2.0
-
2.3
-
2.3
Group
2011
S$ Mil
9,654.6
2.6
2010
S$ Mil
9,620.0
34.6
9,657.2
9,654.6
Company
2011
S$ Mil
2010
S$ Mil
2.3
-
(0.3)
-
-
2.0
8.4
(6.4)
-
2.0
2.7
-
(0.4)
-
-
2.3
8.4
(6.1)
-
2.3
2011
S$ Mil
517.8
84.2
(103.8)
37.6
5.7
Group
2010
S$ Mil
373.4
127.7
(56.5)
5.9
67.3
541.5
517.8
1,068.4
(524.6)
(2.3)
933.2
(413.1)
(2.3)
Net book value as at 31 March
541.5
517.8
152 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Notes to the Financial Statements
For the financial year ended 31 March 2011
19.3 Customer Relationships and Others
Balance as at 1 April
Amortisation for the year
Translation differences
Balance as at 31 March
Cost
Accumulated amortisation
Group
2011
S$ Mil
27.8
(8.1)
(0.1)
19.6
53.0
(33.4)
2010
S$ Mil
34.0
(7.8)
1.6
27.8
52.7
(24.9)
Net book value as at 31 March
19.6
27.8
20.
SUBSIDIARIES
Unquoted equity shares, at cost
Shareholders’ advances
Deemed investment in a subsidiary
Less: Allowance for impairment losses
Company
2011
S$ Mil
6,505.4
1,884.7
32.5
8,422.6
(688.5)
2010
S$ Mil
7,305.4
3,283.4
42.0
10,630.8
(688.5)
7,734.1
9,942.3
The advances given to subsidiaries were unsecured with settlement neither planned nor likely to occur in the foreseeable
future. The effective interest rate at the end of the reporting period was 1.0 per cent (2010: 0.6 per cent) per annum.
The deemed investment in a subsidiary, SingTel Group Treasury Pte. Ltd. (“SGT”), arose from financial guarantees provided by
the Company for loans drawn down by SGT.
The details of subsidiaries are set out in Note 45.
ANNUAL REPORT 2010/2011 153
Notes to the Financial Statements
For the financial year ended 31 March 2011
21.
ASSOCIATED COMPANIES
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
2011
S$ Mil
74.3
1,466.8
1.7
1,542.8
2010
S$ Mil
74.3
1,440.3
1.7
1,516.3
(28.3)
(28.3)
(270.3)
(480.1)
(778.7)
(224.5)
(393.0)
(645.8)
Less: Allowance for impairment losses
(591.7)
(591.7)
2011
S$ Mil
24.7
-
-
24.7
-
-
-
-
-
2010
S$ Mil
24.7
-
-
24.7
-
-
-
-
-
172.4
278.8
24.7
24.7
As at 31 March 2011,
(i) The market values of the quoted equity shares in associated companies held by the Group and Company were S$583.8
million (2010: S$532.5 million) and S$573.0 million (2010: S$518.7 million) respectively.
(ii) The Group’s shares representing 26% (2010: 26%) equity interest in an associated company are under negative liens.
(iii) The Group’s proportionate interest in the capital commitments of the associated companies was S$77.8 million (2010:
S$76.8 million).
The details of associated companies are set out in Note 45.4.
The summarised financial information of associated companies were as follows -
Group
2011
S$ Mil
2010
S$ Mil
1,363.8
1,293.2
10.6
20.7
4,614.7
4,529.6
(3,196.8)
(2,968.5)
Operating revenue
Net profit after tax
Total assets
Total liabilities
154 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Notes to the Financial Statements
For the financial year ended 31 March 2011
22.
JOINT VENTURE 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
Group
Company
2011
S$ Mil
2,466.8
3,748.1
6,214.9
2010
S$ Mil
2,388.1
3,748.1
6,136.2
2011
S$ Mil
-
34.1
34.1
2010
S$ Mil
-
34.1
34.1
(1,225.9)
(1,225.9)
6,459.0
(1,393.5)
3,839.6
5,979.1
(726.7)
4,026.5
-
-
-
-
-
-
-
-
-
-
Less: Allowance for impairment losses
(30.0)
(30.0)
10,024.5
10,132.7
34.1
34.1
As at 31 March 2011,
(i) The market value of the quoted equity shares in joint venture companies held by the Group was S$10.05 billion (2010:
S$10.03 billion).
(ii) The Group’s proportionate interest in the capital commitments of joint venture companies was S$1.61 billion (2010: S$875.9
million).
(iii) The Group’s shares representing 24.8% (2010: 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 45.5.
Optus holds a 31.25% (2010: 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% (2010: 50%) in the assets, with access to the shared network and shares
50% (2010: 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$320.8 million (2010: S$319.3 million).
ANNUAL REPORT 2010/2011 155
Notes to the Financial Statements
For the financial year ended 31 March 2011
22.
JOINT VENTURE COMPANIES (Cont’d)
The Group’s share of certain items in the income statements and statements of financial position of the joint venture companies
were as follows -
Operating revenue
Operating expenses
Net profit before tax
Net profit after tax
Non-current assets
Current assets
Current liabilities
Non-current liabilities
Net assets
Group
2011
S$ Mil
2010
S$ Mil
10,112.9
8,061.8
(5,794.4)
(4,126.6)
2,110.1
2,410.3
1,576.5
1,874.8
17,405.0
2,349.9
(5,164.6)
(7,145.7)
10,873.6
2,680.6
(3,329.7)
(2,744.5)
7,444.6
7,480.0
23.
IMPAIRMENT REVIEWS
23.1 Goodwill arising on acquisition of subsidiaries
The carrying values of the Group’s goodwill on acquisition of subsidiaries as at 31 March 2011 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
- SCS Computer
Systems Pte. Ltd.
2011
S$ Mil
2010
S$ Mil
Terminal growth
rate (1)
Pre-tax
discount rate
2011
2010
2011
2010
9,575.0
9,572.4
4.0%
4.0%
12.2%
12.1%
82.2
82.2
2.0%
2.0%
9.9%
10.0%
Note:
(1) Weighted average growth rate used to extrapolate cash flows beyond the terminal year.
156 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Notes to the Financial Statements
For the financial year ended 31 March 2011
23.1 Goodwill arising on acquisition of subsidiaries (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 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 2011, 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.
23.2 Carrying values (including goodwill) of associated and joint venture companies
The Group’s carrying values in Warid Telecom (Private) Limited (“Warid”) and Pacific Bangladesh Telecom Limited (“PBTL”) as
at 31 March 2011 were assessed for impairment.
Group
2011
S$ Mil
2010
S$ Mil
Terminal growth
rate (1)
Pre-tax
discount rate
2011
2010
2011
2010
Carrying value (including goodwill) in -
Warid and PBTL
Less: Allowance for
650.1
796.5
impairment losses
(590.0)
(590.0)
60.1
206.5
5.5%
to 7%
5.5%
to 8%
12.2%
to 18.7%
12.4%
to 17.4%
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 23.1. The cash flow projections were based on financial budgets and forecasts approved by
management covering periods of seven to nine years.
ANNUAL REPORT 2010/2011 157
Notes to the Financial Statements
For the financial year ended 31 March 2011
24.
AVAILABLE-FOR-SALE (“AFS”) INVESTMENTS
Balance as at 1 April
Additions
Disposals
(Provision for)/ Write-back of impairment
Net fair value gains included in
other comprehensive income
2011
S$ Mil
255.8
20.0
(1.1)
(0.1)
34.5
Group
2010
S$ Mil
236.3
0.3
(6.4)
4.1
21.5
Balance as at 31 March
309.1
255.8
AFS investments included the following -
Quoted equity securities
- Taiwan
- Thailand
- Singapore and United States
Unquoted
Equity securities
Others
Quoted equity securities
- Thailand
- Singapore and United States
Unquoted equity securities
- Singapore
158 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Company
2011
S$ Mil
2010
S$ Mil
31.1
-
-
-
7.5
38.6
2011
S$ Mil
244.3
18.4
9.6
272.3
33.6
3.2
36.8
Group
24.6
-
-
-
6.5
31.1
2010
S$ Mil
217.0
12.2
8.9
238.1
13.8
3.9
17.7
309.1
255.8
Company
2011
S$ Mil
2010
S$ Mil
18.4
9.5
27.9
10.7
38.6
12.2
8.8
21.0
10.1
31.1
Notes to the Financial Statements
For the financial year ended 31 March 2011
25.
DERIVATIVE FINANCIAL INSTRUMENTS
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
Balance as at 31 March
Disclosed as -
Current asset
Non-current asset
Current liability
Non-current liability
Group
Company
2011
S$ Mil
2010
S$ Mil
2011
S$ Mil
2010
S$ Mil
(1,052.9)
(144.6)
(718.8)
(54.6)
(534.5)
(112.6)
(50.2)
217.6
15.3
(540.3)
(157.6)
(190.7)
-
(19.7)
(470.2)
(19.5)
-
-
-
(736.3)
72.1
-
-
-
(1,517.3)
(1,052.9)
(1,208.5)
(718.8)
68.6
-
(999.8)
(586.1)
12.8
175.6
(300.2)
(941.1)
68.6
22.9
(988.2)
(311.8)
12.8
182.7
(14.4)
(899.9)
(1,517.3)
(1,052.9)
(1,208.5)
(718.8)
ANNUAL REPORT 2010/2011 159
Notes to the Financial Statements
For the financial year ended 31 March 2011
25.1 Fair Values
The fair values of the currency and interest rate swap contracts excluded the accrued interest of S$44.4 million (2010: S$33.6
million). The accrued interest is separately disclosed in Note 16 and Note 27.
The fair value adjustments of the derivative financial instruments were as follows -
2011
Fair value hedges
Cross currency swaps
Interest rate swaps
Forward foreign exchange
Cash flow hedges
Cross currency swaps
Interest rate swaps
Forward foreign exchange
Derivatives that do not qualify
for hedge accounting
Cross currency swaps
Interest rate swaps
Forward foreign exchange
Disclosed as -
Current
Non-current
Group
Fair value adjustments
Liabilities
Assets
S$ Mil
S$ Mil
Company
Fair value adjustments
Liabilities
Assets
S$ Mil
S$ Mil
-
72.2
-
-
(3.6)
-
(106.0)
1.2
0.9
1,635.5
(9.5)
41.4
-
-
-
-
22.4
-
-
72.2
-
-
(2.7)
-
9.0
13.0
-
(107.2)
-
0.1
1,078.1
8.6
30.7
257.9
31.8
-
68.6
1,585.9
91.5
1,300.0
68.6
-
999.8
586.1
68.6
22.9
988.2
311.8
68.6
1,585.9
91.5
1,300.0
160 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Notes to the Financial Statements
For the financial year ended 31 March 2011
25.1 Fair Values (Cont’d)
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
Group
Fair value adjustments
Liabilities
Assets
S$ Mil
S$ Mil
Company
Fair value adjustments
Liabilities
Assets
S$ Mil
S$ Mil
-
187.8
11.8
-
(12.3)
1.1
(94.0)
-
4.5
-
187.8
11.8
1,271.2
25.9
15.9
-
-
-
-
17.8
*
-
(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
* Denotes amount less than S$50,000.
The cash flow hedges are designated for foreign currency commitments and repayments of principal and interest of the foreign
currency denominated bonds.
The forecasted transactions for the foreign currency commitments are expected to occur in the financial year ending 31 March
2012, while the forecasted transactions for the repayment of principal and interest of the foreign currency denominated bonds
will occur according to the timing disclosed in Note 29.1.
ANNUAL REPORT 2010/2011 161
Notes to the Financial Statements
For the financial year ended 31 March 2011
25.1 Fair Values (Cont’d)
As at 31 March 2011, the details of the outstanding derivative financial instruments were as follows -
Interest rate swaps
Notional principal (S$ million equivalent)
Fixed interest rates
Floating interest rates
Cross currency swaps
Notional principal (S$ million equivalent)
Fixed interest rates
Floating interest rates
Forward foreign exchange
Notional principal (S$ million equivalent)
Group
Company
2011
2010
2011
2010
7,104.4
1.8% to 6.2%
0.1% to 4.9%
5,737.5
1.8% to 7.7%
0.4% to 5.7%
5,802.0
1.8% to 4.5%
0.1% to 2.6%
5,382.1
1.8% to 3.9%
0.4% to 2.3%
7,102.8
3.5% to 7.5%
0.7% to 6.7%
5,193.5
3.9% to 8.0%
2.0% to 6.3%
4,918.0
3.9% to 5.2%
0.7% to 2.5%
3,649.7
3.9% to 5.2%
2.0% to 2.8%
710.7
1,359.3
392.6
1,020.1
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.
25.2 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).
162 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Notes to the Financial Statements
For the financial year ended 31 March 2011
25.2 Fair Value Measurements (Cont’d)
The following table presents the assets and liabilities measured at fair value as at 31 March 2011 -
Group
2011
Financial assets
AFS investments (Note 24)
- Quoted equity securities
- Unquoted
Level 1
S$ Mil
Level 2
S$ Mil
Level 3
S$ Mil
Total
S$ Mil
272.3
-
272.3
-
-
-
-
36.8
36.8
272.3
36.8
309.1
Derivative financial instruments (Note 25.1)
-
68.6
-
68.6
Financial liabilities
Derivative financial instruments (Note 25.1)
Group
2010
Financial assets
AFS investments (Note 24)
- Quoted equity securities
- Unquoted
272.3
68.6
36.8
377.7
-
-
1,585.9
1,585.9
-
-
1,585.9
1,585.9
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 25.1)
-
188.4
-
188.4
238.1
188.4
17.7
444.2
Financial liabilities
Purchase consideration payable
- Current (Note 27)
- Non-current (Note 32)
Derivative financial instruments (Note 25.1)
-
-
-
-
-
-
-
-
1,241.3
487.5
144.6
632.1
-
487.5
144.6
632.1
1,241.3
1,241.3
632.1
1,873.4
ANNUAL REPORT 2010/2011 163
Notes to the Financial Statements
For the financial year ended 31 March 2011
25.2 Fair Value Measurements (Cont’d)
Company
2011
Financial assets
AFS investments (Note 24)
- Quoted equity securities
- Unquoted equity securities
Derivative financial instruments (Note 25.1)
Financial liabilities
Derivative financial instruments (Note 25.1)
Company
2010
Financial assets
AFS investments (Note 24)
- Quoted equity securities
- Unquoted equity securities
Level 1
S$ Mil
Level 2
S$ Mil
Level 3
S$ Mil
Total
S$ Mil
27.9
-
27.9
-
27.9
-
-
-
91.5
91.5
-
10.7
10.7
-
27.9
10.7
38.6
91.5
10.7
130.1
-
-
1,300.0
1,300.0
-
-
1,300.0
1,300.0
Level 1
S$ Mil
Level 2
S$ Mil
Level 3
S$ Mil
Total
S$ Mil
21.0
-
21.0
-
-
-
-
10.1
10.1
21.0
10.1
31.1
Derivative financial instruments (Note 25.1)
-
195.5
-
195.5
21.0
195.5
10.1
226.6
Financial liabilities
Purchase consideration payable
- Current (Note 27)
- Non-current (Note 32)
Derivative financial instruments (Note 25.1)
-
-
-
-
-
-
-
-
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.
164 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Notes to the Financial Statements
For the financial year ended 31 March 2011
25.2 Fair Value Measurements (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
26.
OTHER NON-CURRENT RECEIVABLES
Prepayments
Other receivables
Group
Company
2011
S$ Mil
2010
S$ Mil
2011
S$ Mil
2010
S$ Mil
17.7
0.2
20.0
(1.1)
36.8
18.4
1.1
0.2
(2.0)
17.7
10.1
0.6
-
-
10.7
9.8
0.3
-
-
10.1
Group
Company
2011
S$ Mil
78.4
47.9
2010
S$ Mil
89.6
34.0
2011
S$ Mil
270.7
0.1
2010
S$ Mil
158.4
0.1
126.3
123.6
270.8
158.5
ANNUAL REPORT 2010/2011 165
Notes to the Financial Statements
For the financial year ended 31 March 2011
27.
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 31)
- Deferred gain on sale of a joint venture
company
- Financial guarantee contracts
Customers’ deposits
Other deferred income
Purchase consideration payable
Other payables
Group
Company
2011
S$ Mil
2,747.7
630.5
697.9
195.6
-
-
-
2010
S$ Mil
2,515.2
600.9
654.4
183.9
-
-
-
2011
S$ Mil
589.1
75.0
98.6
125.7
191.4
362.0
553.4
2010
S$ Mil
566.5
74.7
94.3
140.1
309.2
213.9
523.1
63.2
53.2
55.2
47.3
3.1
-
3.1
24.1
19.7
-
68.3
3.1
-
3.1
21.6
19.9
487.5
110.1
-
-
-
13.8
8.5
-
56.2
-
3.2
3.2
11.5
5.1
487.5
46.3
4,450.1
4,649.8
1,575.5
1,999.6
The amounts due to subsidiaries are repayable on demand and interest-free.
The trade payables are non-interest bearing and are generally settled on 30 to 60 days terms.
The interest payables on borrowings are generally settled on a half-year or annual 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 as at 31 March 2010 was in respect of the Group’s purchase of an
additional 1.5% effective equity interest in Bharti Airtel Limited (“Bharti”), a joint venture company, which was completed in
November 2009. The non-current portion was shown in Note 32. The total amount payable was 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. During the financial year, the Group recognised a realised fair value gain of S$38
million (see Note 8) on the purchase consideration payable in the income statement upon final settlement of the consideration
in January 2011.
166 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Notes to the Financial Statements
For the financial year ended 31 March 2011
28.
PROVISION
The provision mainly relates to provision for liquidated damages and warranties. The movements were as follows -
Balance as at 1 April
(Write-back of provision)/ Provision
Amount written off against provision
Balance as at 31 March
29.
BORROWINGS (UNSECURED)
Current
Bonds
Bank loans
Bank overdraft
Non-current
Bonds
Bank loans
Group
2011
S$ Mil
17.9
(17.4)
(0.2)
0.3
2010
S$ Mil
16.8
2.5
(1.4)
17.9
Group
Company
2011
S$ Mil
2010
S$ Mil
2011
S$ Mil
2010
S$ Mil
2,667.4
5.2
-
577.6
935.4
0.1
2,667.4
-
-
2,672.6
1,513.1
2,667.4
-
-
-
-
4,094.1
450.0
4,496.8
831.1
734.5
-
3,809.1
-
4,544.1
5,327.9
734.5
3,809.1
Total unsecured borrowings
7,216.7
6,841.0
3,401.9
3,809.1
ANNUAL REPORT 2010/2011 167
Notes to the Financial Statements
For the financial year ended 31 March 2011
29.1 Bonds
Principal
amount
US$393.8 million (1)
US$1,350 million (2)
US$500 million (1) (2)
US$600 million (2)
US$500 million (2)
€500 million (2)
€700 million (1) (2)
Fixed
interest
rate
%
8.00
6.38
4.63
4.50
7.38
6.00
3.50
Maturity
2010
2011
2019
2021
2031
2011
2020
Group
Company
2011
S$ Mil
-
1,755.1
628.2
748.4
734.5
2010
S$ Mil
559.9
2,024.0
687.7
-
791.2
2011
S$ Mil
-
1,755.1
-
-
734.5
2010
S$ Mil
-
2,024.0
-
-
791.2
912.3
1,221.4
993.9
-
912.3
-
993.9
-
S$600 million (2)
2020
3.49
600.0
HK$1,000 million (1)
2020
3.83
161.6
-
-
A$62.6 million
2011
6.82
-
17.7
-
-
-
-
-
-
Classified as -
Current
Non-current
6,761.5
5,074.4
3,401.9
3,809.1
2,667.4
4,094.1
577.6
4,496.8
2,667.4
734.5
-
3,809.1
6,761.5
5,074.4
3,401.9
3,809.1
Notes:
(1) The bonds, issued by Optus Group, are subject to a negative pledge that limits the amount of secured indebtedness of certain subsidiaries
of Optus.
(2) The bonds are listed on Singapore Exchange.
29.2 Bank Loans
Current
Non-current
168 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Group
2011
S$ Mil
5.2
450.0
2010
S$ Mil
935.4
831.1
455.2
1,766.5
Notes to the Financial Statements
For the financial year ended 31 March 2011
29.3 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
29.4
Interest Rates
Group
Company
2011
S$ Mil
100.0
350.0
4,094.1
2010
S$ Mil
3,017.9
831.1
1,478.9
2011
S$ Mil
-
-
734.5
2010
S$ Mil
3,017.9
-
791.2
4,544.1
5,327.9
734.5
3,809.1
The weighted average effective interest rates at the end of the reporting period were as follows -
Bonds
Bank loans
29.5 Fair Values
Carrying value
Bonds
Bank loans
Fair value
Bonds
Bank loans
Group
2011
%
2010
%
%
5.2
1.0
6.4
2.5
Company
2011
%
6.5
-
2010
6.5
-
Group
Company
2011
S$ Mil
2010
S$ Mil
2011
S$ Mil
2010
S$ Mil
6,761.5
455.2
5,074.4
1,766.5
3,401.9
-
3,809.1
-
6,860.4
455.2
5,183.7
1,766.5
3,487.3
-
3,918.4
-
See Note 2.7 on the basis of estimating the fair values and Note 25 for information on the derivative financial instruments used
for hedging the risks associated with the borrowings.
ANNUAL REPORT 2010/2011 169
Notes to the Financial Statements
For the financial year ended 31 March 2011
29.6 The tables below set out the expected contractual undiscounted cash flows of the borrowings, including the effects of hedging.
Group
As at 31 March 2011
Net-settled interest rate swaps
Borrowings
As at 31 March 2010
Net-settled interest rate swaps
Borrowings
Company
As at 31 March 2011
Net-settled interest rate swaps
Borrowings
As at 31 March 2010
Net-settled interest rate swaps
Borrowings
Financial guarantee contracts (Note 31)
Less than
1 year
S$ Mil
Between
1 and 2 years
S$ Mil
Between
2 and 5 years
S$ Mil
Over
5 years
S$ Mil
220.0
3,633.2
137.6
185.0
431.9
588.7
876.3
4,796.9
3,853.2
322.6
1,020.6
5,673.2
462.3
1,586.3
170.2
3,585.9
122.9
933.7
563.2
1,743.4
2,048.6
3,756.1
1,056.6
2,306.6
Less than
1 year
S$ Mil
Between
1 and 2 years
S$ Mil
Between
2 and 5 years
S$ Mil
Over
5 years
S$ Mil
110.1
3,544.7
21.2
-
85.2
-
415.7
881.2
3,654.8
21.2
85.2
1,296.9
160.4
-
0.5
143.7
3,528.6
-
61.3
-
9.0
474.0
881.2
-
160.9
3,672.3
70.3
1,355.2
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 40(a)(ii).
170 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Notes to the Financial Statements
For the financial year ended 31 March 2011
30.
BORROWINGS (SECURED)
30.1 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
30.2
Interest Rates
Group
2011
S$ Mil
2010
S$ Mil
29.6
47.7
77.3
(8.4)
68.9
26.3
42.6
68.9
17.1
24.8
41.9
(3.8)
38.1
14.9
23.2
38.1
The weighted average effective interest rates per annum at the end of the reporting period were as follows -
Finance lease liabilities
30.3 Fair Values
Carrying value
Finance lease liabilities
Fair value
Finance lease liabilities
Group
2011
%
7.3
2010
%
10.0
Group
2011
S$ Mil
2010
S$ Mil
68.9
38.1
68.9
38.1
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.
ANNUAL REPORT 2010/2011 171
Notes to the Financial Statements
For the financial year ended 31 March 2011
31.
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
Reclassifications
Balance as at 31 March
Classified as -
Current (see Note 27)
Non-current
Group
Company
2011
S$ Mil
2010
S$ Mil
2011
S$ Mil
2010
S$ Mil
9.6
(3.7)
5.9
22.9
(3.1)
19.8
-
-
-
-
-
11.3
(1.7)
9.6
26.0
(3.1)
22.9
-
-
-
-
-
25.7
32.5
3.1
22.6
25.7
3.1
29.4
32.5
4.4
(1.5)
2.9
-
-
-
9.5
-
-
(9.5)
-
2.9
-
2.9
2.9
5.3
(0.9)
4.4
-
-
-
12.3
17.8
(20.6)
-
9.5
13.9
3.2
10.7
13.9
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.
172 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Notes to the Financial Statements
For the financial year ended 31 March 2011
32.
OTHER NON-CURRENT LIABILITIES
Performance share liability
Other deferred income
Other payables, including purchase
consideration payable (see Note 27)
33.
SHARE CAPITAL
Group and Company
Group
Company
2011
S$ Mil
12.1
-
2010
S$ Mil
8.7
13.9
2011
S$ Mil
10.6
-
2010
S$ Mil
6.5
-
181.8
333.1
7.1
149.3
193.9
355.7
17.7
155.8
2011
2010
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
15,932.2
3.5
2,616.3
6.5
15,926.8
5.4
2,605.6
10.7
Balance as at 31 March
15,935.7
2,622.8
15,932.2
2,616.3
All issued shares are fully paid.
During the year, the Company issued 3,546,818 (2010: 5,391,400) shares upon the exercise of 3,546,818 (2010: 5,391,400) share
options under the 1999 Scheme at exercise prices between S$1.41 and S$2.12 (2010: S$1.41 and S$2.85) per share.
The newly issued shares rank pari passu in all respects with the previously issued shares.
Capital Management
The Group is committed to an optimal capital structure while maintaining financial flexibility and investment grade credit
ratings. In order to achieve an optimal capital structure, the Group may adjust the amount of dividend payment, return capital to
shareholders, issue new shares, buy back issued shares, obtain new borrowings or reduce its borrowings.
The Group monitors capital based on gross and net gearing ratios, and the dividend payout ratio ranges from 55% to 70%
of underlying net profit. Underlying net profit is defined as net profit before exceptional items and exchange differences on
capital reductions of certain overseas subsidiaries, as well as significant exceptional items of the associated and joint
venture companies.
From time to time, the Group purchases its own shares from the market. The shares purchased are primarily for delivery to
employees upon vesting of performance shares awarded under the Group’s performance share plans. The Group can also
cancel the shares which are re-purchased from the market.
There were no changes in the Group’s approach to capital management during the financial year.
The Company and its subsidiaries are not subject to any externally imposed capital requirement.
ANNUAL REPORT 2010/2011 173
Notes to the Financial Statements
For the financial year ended 31 March 2011
34.
DIVIDENDS
Final dividend of 8.0 cents (2010: 6.9 cents)
(one-tier tax exempt) per share, paid
Interim dividend of 6.8 cents (2010: 6.2 cents)
(one-tier tax exempt) per share, paid
Group
Company
2011
S$ Mil
2010
S$ Mil
2011
S$ Mil
2010
S$ Mil
1,273.7
1,097.0
1,274.3
1,097.4
1,082.9
987.0
1,083.5
987.5
2,356.6
2,084.0
2,357.8
2,084.9
During the financial year, a final one-tier tax exempt ordinary dividend of 8.0 cents per share was paid in respect of the previous
financial year ended 31 March 2010, and an interim one-tier tax exempt ordinary dividend of 6.8 cents per share was paid in
respect of the current financial year ended 31 March 2011.
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 tax exempt ordinary dividend of 9.0 cents per share and a special one-tier exempt
dividend of 10.0 cents per share, totalling approximately S$3.03 billion in respect of the current financial year ended 31 March
2011 for approval at the forthcoming Annual General Meeting.
These financial statements do not reflect the final dividend payable of approximately S$3.03 billion, which will be accounted for
in the shareholders’ equity as an appropriation of ‘Retained Earnings’ in the next financial year ending 31 March 2012.
35.
FAIR VALUES OF FINANCIAL ASSETS AND LIABILITIES
The fair values of AFS investments and borrowings are set out in Note 24, Note 29.5 and Note 30.3 respectively.
The carrying values of the other financial assets and liabilities approximate their fair values.
36.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
36.1 Financial Risk 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.
174 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Notes to the Financial Statements
For the financial year ended 31 March 2011
36.2 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 2011, 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$32.2 million (2010: S$31.8 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 for the
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.
36.3
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 2011, after taking into account
the effect of interest rate swaps, approximately 73% (2010: 67%) of the Group’s borrowings were at fixed rates of interest.
As at 31 March 2011, 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$11.8
million (2010: S$13.4 million).
ANNUAL REPORT 2010/2011 175
Notes to the Financial Statements
For the financial year ended 31 March 2011
36.4 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.
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.
36.5 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.
36.6 Market Risk
The Group has investments in quoted equity shares. The market value of these investments will fluctuate with
market conditions.
176 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Notes to the Financial Statements
For the financial year ended 31 March 2011
37.
SEGMENT INFORMATION
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 in 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 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. 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 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 2011 and
31 March 2010.
ANNUAL REPORT 2010/2011 177
Notes to the Financial Statements
For the financial year ended 31 March 2011
37.
SEGMENT INFORMATION (Cont’d)
Group
2011
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
6,400.6
11,670.0
Segment results
Other income
Profit/ (Loss) before
exceptional items
1,654.0
48.5
1,441.4
77.2
1,702.5
1,518.6
-
-
-
-
-
18,070.6
-
18,070.6
-
-
3,095.4
125.7
(75.0)
4.5
3,020.4
130.2
-
3,221.1
(70.5)
3,150.6
Exceptional items
-
-
-
-
55.7
55.7
Profit/ (Loss) on operating
activities
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
1,702.5
1,518.6
-
-
3,221.1
(14.8)
3,206.3
-
-
-
-
-
-
-
-
-
-
-
-
567.3
638.2
137.7
190.5
30.4
1,564.1
-
-
-
-
-
-
567.3
638.2
137.7
190.5
30.4
1,564.1
-
-
-
-
-
-
567.3
638.2
137.7
190.5
30.4
1,564.1
1,702.5
1,518.6
1,564.1
-
4,785.2
(14.8)
4,770.4
-
-
26.7
(157.8)
-
-
-
-
26.7
(157.8)
16.8
(209.7)
43.5
(367.5)
Profit/ (Loss) before tax
1,702.5
1,387.5
1,564.1
-
4,654.1
(207.7)
4,446.4
Segment assets
Investment in associated and
joint venture companies
- Bharti
- Telkomsel
- Globe
- AIS
- Others
Goodwill on acquisition
of subsidiaries
Other assets
-
-
-
-
-
-
-
-
-
-
-
-
5,230.8
3,274.7
1,008.9
261.6
420.9
10,196.9
-
-
-
-
-
-
5,230.8
3,274.7
1,008.9
261.6
420.9
10,196.9
-
-
-
-
-
-
5,230.8
3,274.7
1,008.9
261.6
420.9
10,196.9
81.9
5,008.3
9,575.3
15,478.3
-
-
-
(3,793.6)
9,657.2
16,693.0
-
2,735.2
9,657.2
19,428.2
5,090.2
25,053.6
10,196.9
(3,793.6)
36,547.1
2,735.2
39,282.3
Capital expenditure
842.8
1,364.5
Depreciation and amortisation
(550.5)
(1,418.2)
-
-
-
2,207.3
-
2,207.3
-
(1,968.7)
-
(1,968.7)
178 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Notes to the Financial Statements
For the financial year ended 31 March 2011
37.
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
-
-
-
-
Exceptional items
(5.0)
-
(260.0)
-
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
(265.0)
269.7
4.7
Profit/ (Loss) on operating
activities
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/ (expense) (net)
Finance costs
Segment assets
Investment in associated and
joint venture companies
- Bharti
- Telkomsel
- Globe
- AIS
- Others
Goodwill on acquisition
of subsidiaries
Other assets
1,769.7
1,263.3
(260.0)
-
2,773.0
200.3
2,973.3
-
-
-
-
-
-
-
-
-
-
-
-
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)
(30.7)
(216.8)
(8.4)
(325.9)
4,548.3
(47.2)
4,501.1
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
Profit/ (Loss) before tax
1,769.7
1,176.5
1,602.1
-
-
22.3
(109.1)
-
-
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)
-
-
-
-
-
-
-
-
-
2,294.7
-
2,294.7
-
(1,878.0)
-
(1,878.0)
-
-
(8.9)
-
(8.9)
-
(60.9)
(60.9)
-
(260.0)
-
(260.0)
-
(260.0)
ANNUAL REPORT 2010/2011 179
Notes to the Financial Statements
For the financial year ended 31 March 2011
38.
OPERATING LEASE COMMITMENTS
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
2011
S$ Mil
2010
S$ Mil
436.1
1,209.7
1,775.8
453.8
1,394.6
1,385.5
Company
2011
S$ Mil
95.5
313.7
794.6
2010
S$ Mil
158.6
215.6
515.8
3,421.6
3,233.9
1,203.8
890.0
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$39.4 million (2010: S$37.8 million) per annum under those contracts. The operating lease payments under these contracts
are subject to review every year with a general increase not exceeding the higher of 2% or Consumer Price Index percentage
of the preceding year.
39.
COMMITMENTS
39.1 The commitments for capital and operating expenditures, and investments which had not been recognised in the financial
statements, excluding the commitments shown under Note 39.2, were as follows -
Group
Company
2011
S$ Mil
2010
S$ Mil
2011
S$ Mil
2010
S$ Mil
Authorised and contracted for
1,025.1
928.7
67.0
105.3
The above included equity funding commitments for an associated company of US$51 million (S$64 million) (2010: US$66
million) and commitments to purchase capacity in the cable network of a joint venture company of A$9.2 million (S$12 million)
(2010: A$57 million).
39.2 As at 31 March 2011, the Group’s commitments for the purchase of broadcasting program rights were S$397.0 million (2010:
S$602.6 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.
180 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Notes to the Financial Statements
For the financial year ended 31 March 2011
40.
CONTINGENT LIABILITIES
(a)
Guarantees
As at 31 March 2011,
(i)
(ii)
The Group and Company provided bankers’ and other guarantees, and insurance bonds of S$583.6 million and S$389.6
million (31 March 2010: S$687.6 million and S$435.5 million) respectively.
The Company provided guarantees for loans of S$450 million (31 March 2010: S$1.28 billion) drawn down under various
loan facilities entered into by SGT. The Company also provided guarantees for SGT’s notes issue of S$600 million and
US$600 million due in 2020 and 2021 respectively.
(iii)
The Company provided a guarantee for US$90 million (S$114 million) (31 March 2010: US$94 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”)
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 within two years, (ii)
Telkomsel reduces tariffs by at least 15 per cent and (iii) each of the Parties and Telkomsel pay 25 billion rupiah (approximately
S$4 million) in fines.
SingTel and SingTel Mobile filed an appeal to the District Court of Central Jakarta on 19 December 2007. The District Court
announced its ruling on 9 May 2008 dismissing SingTel’s and SingTel Mobile’s appeal, but (i) setting aside the order that
Telkomsel reduce tariffs by at least 15 per cent; and (ii) reducing the fine for each of the Parties and Telkomsel to 15 billion
rupiah (approximately S$2 million). SingTel and SingTel Mobile appealed to the Supreme Court of the Republic of Indonesia on
22 May 2008.
By a written decision dated 9 September 2008, of which official notification was given to SingTel and SingTel Mobile on 25
November 2008, the Supreme Court dismissed the appeal.
1
Article 27(a) relates to the ownership of majority shares in several similar companies conducting business activities in the same field in the
same market.
2
Article 17(1) relates to the control of the production and or marketing of goods and or services which may result in monopolistic practices and
or unfair business competition.
ANNUAL REPORT 2010/2011 181
Notes to the Financial Statements
For the financial year ended 31 March 2011
40.
CONTINGENT LIABILITIES (Cont’d)
(b)
Appeal against the decision by Komisi Pengawas Persaingan Usaha Republik Indonesia (“KPPU”) (Republic of Indonesia
Commission for Supervision of Business Competition) (the “Commission”) (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. This application is
understood to be pending.
On 12 January 2011, SingTel and SingTel Mobile received official notification that the civil review applications have been
rejected. SingTel and SingTel Mobile maintain that they have complied with all the laws of Indonesia. However, in February 2011,
SingTel and SingTel Mobile paid the fines with due respect to the Indonesian Courts, without prejudice to their rights under
International Law.
(c)
Other commercial disputes
Optus (and certain subsidiaries) is in dispute with third parties regarding certain transactions entered into in the ordinary
course of business. Some of these disputes involve legal proceedings relating to the contractual obligations of the parties
and/ or representations made, including the amounts payable by Optus’ companies under the contracts and claims against
Optus’ companies for compensation for alleged breach of contract and/or representations. Optus is vigorously defending all
these claims.
41.
SIGNIFICANT CONTINGENT LIABILITIES OF JOINT VENTURE COMPANIES
(a)
In January 2008, TOT Public Company Limited (“TOT”) and CAT Telecom Public Company Limited (“CAT”) demanded additional
payments of revenue share from AIS and its subsidiary, Digital Phone Company Limited (“DPC”) respectively. The SingTel Group
holds an equity interest of 21.3% in AIS. CAT had submitted its case against DPC to arbitration and the relevant arbitration
tribunal has dismissed CAT’s case against DPC on 1 March 2011.
AIS’ management believes that its dispute with TOT referred to above shall have no material impact to its financial statements
because the amounts demanded are the same as the excise taxes that they have submitted to the Excise Department in prior
years and deducted from the revenue sharing, according to the resolution of the Thai Cabinet dated 11 February 2003. AIS
further stated that this matter has been submitted to arbitration and it could take several years before an arbitral award
is rendered.
On 2 February 2011, AIS received demand letters from TOT for additional payments of revenue share, penalties and surcharges
to be paid by 15 February 2011. The first demand amounted to THB 36,996 million (SingTel’s equity share: S$328 million) plus
interest at 7.5% per annum and value added tax for reduction of revenue sharing rate on prepaid services and deduction of
roaming cost from the revenue share payment to TOT. The second demand amounted to THB 36,817 million (SingTel’s equity
share: S$326 million) plus interest at 7.5% per annum and value added tax due to the deduction of excise tax from the revenue
share payment to TOT which is currently under the arbitration process as mentioned above.
AIS’ management believes that the demands shall have no material impact to its financial statements because it is not obligated
to make any additional payments as demanded by TOT. On 4 February 2011, AIS sent a letter to TOT opposing such demands.
On 11 February 2011, AIS submitted TOT’s claim for additional revenue share in relation to prepaid services and roaming cost
to arbitration.
182 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Notes to the Financial Statements
For the financial year ended 31 March 2011
41.
SIGNIFICANT CONTINGENT LIABILITIES OF JOINT VENTURE COMPANIES (Cont’d)
On 26 January 2011, TOT sent a letter demanding AIS to pay additional revenue share based on gross interconnection income
received from 2007 to 2010 of THB 17,803 million (SingTel’s equity share: S$158 million) plus interest at the rate of 1.25% per
month. AIS sent a letter opposing the said claim to TOT on 21 February 2011. On 9 March 2011, AIS submitted the dispute to arbitration.
(b)
Bharti, a 32.3% joint venture of the Group, has disputes with various government authorities in the respective jurisdictions
where its operations are based, as well as with third parties regarding certain transactions entered into in the ordinary course
of business.
As at 31 March 2011, the taxes, custom duties and demands under adjudication, appeal or disputes amounted to approximately
INR 31 billion (SingTel’s equity share: S$280 million). In respect of some of the tax issues, pending final decisions, Bharti had
deposited amounts with statutory authorities.
Bharti is defending its positions vigorously.
(c)
(d)
Globe, a 47.3% joint venture of the Group, is contingently liable for various claims arising in the ordinary conduct of business
and certain tax assessments which are either pending decision by the Courts or are being contested, the outcome of which are
not presently determinable. In the opinion of Globe’s management and legal counsel, the eventual liability under these claims,
if any, will not have a material or adverse effect on the Globe Group’s financial position and results of operations.
As at 31 March 2011, Telkomsel, a 35% joint venture of the Group, has filed appeals and cross-appeals amounting to approximately
IDR 1,030 billion (SingTel’s equity share: S$52 million) for various tax claims arising in certain tax assessments which are
pending final decisions, the outcome of which are not presently determinable.
42.
ASSOCIATED COMPANY - PROPOSED RESTRUCTURING OF LOAN FACILITIES AND OTHER MATTERS
Warid Telecom (Private) Limited (“Warid”), an associated company in which the Group has a 30% equity interest, is currently
in discussions with certain of its lenders in relation to a proposed restructuring of its loan facilities. As at 31 March 2011, the
outstanding principal under such loan facilities amounted to approximately US$757 million, and was secured by a floating
charge on Warid’s assets. In addition, US$90 million of the loan facilities was guaranteed by SingTel (see Note 40(a)(iii)) and
US$512 million was secured by guarantees of the other shareholder group of Warid.
Warid had been served winding-up petitions by Huawei International Pte. Limited, Huawei Technologies Co., Limited and
Huawei Technologies Pakistan (Private) Limited (collectively, “Huawei”) seeking payment of outstanding aggregate payable of
approximately US$140 million. China Development Bank Corporation subsequently granted loan facilities of US$160 million
to Warid and funds disbursed under such facilities have been used to pay the outstanding payable. Consequently, Huawei has
withdrawn its winding-up petitions.
43.
SUBSEQUENT EVENT
On 4 April 2011, SGT completed a HK$620 million Note issue maturing in 2018 with an annual coupon of 3.32% per annum. The
Note issue is guaranteed by the Company.
44.
EFFECTS OF FRS AND INT FRS ISSUED BUT NOT YET ADOPTED
Certain new or revised FRS and INT FRS are mandatory for adoption by the Group for financial period beginning on 1 April 2011.
The new or revised FRS and INT FRS are not expected to have a significant impact on the financial statements of the Group or
the Company in the period of initial application.
ANNUAL REPORT 2010/2011 183
Notes to the Financial Statements
For the financial year ended 31 March 2011
45.
COMPANIES IN THE 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 2011 and 31
March 2010.
45.1 Significant subsidiaries incorporated in Singapore
Name of subsidiary
Principal activities
Percentage of effective
equity interest held by the Group
1. Computer Systems Holdings Pte Ltd
Investment holding
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
2011
%
100
100
2010
%
100
100
100
100
4. NCS Pte. Ltd.
Provision of information technology and
consultancy services
100
100
5. NCSI Solutions Pte. Ltd.
Provision of information technology services
6. SCS Computer Systems Pte. Ltd.
Provision of information technology and
consultancy services
7. NCSI Holdings Pte. Ltd.
Investment holding
8. Singapore Telecom Mobile Pte Ltd (1)
Investment holding
9. SingNet Pte Ltd
Provision of internet access services
10. Singapore Telecom International
Pte Ltd
Holding of strategic investments and provision
of technical and management consultancy
services
100
100
100
100
100
100
100
100
100
100
100
100
11. SingTel Group Treasury Pte. Ltd.
Provision of finance and treasury services to
SingTel and its subsidiaries
100
100
12. SingTel Idea Factory Pte. Ltd.
(previously known as C2C Asiapac
Pte Ltd)
Engaged in research and development, products
and services development and business
partnership
100
100
13. SingTel Innov8 Pte. Ltd.
Venture capital investment holding
100
-
184 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Notes to the Financial Statements
For the financial year ended 31 March 2011
45.1 Significant subsidiaries incorporated in Singapore (Cont’d)
Name of subsidiary
Principal activities
14. SingTel Investments Private Limited
Portfolio investment holding
15. SingTel Mobile Singapore
Pte. Ltd. (1)
Operation and provision of cellular mobile
telecommunications systems and services,
resale of fixed line and broadband services
Percentage of effective
equity interest held by the Group
2011
%
100
100
2010
%
100
-
16. SingTel Ventures (Singapore)
Investment holding
100
100
Private Limited
17. SingTelSat Pte Ltd
Provision of satellite capacity for
telecommunications and video broadcasting
services
100
100
18. SingTel Singapore Pte. Ltd.
Investment holding and provision of business
and management consultancy services
100
-
19. ST-2 Satellite Ventures
Private Limited
20. Subsea Network Services Pte Ltd
Provision of satellite capacity for
telecommunications and video broadcasting
services
Ownership and chartering of barges and
provision of storage facilities for submarine
cables and related equipment
61.9
61.9
100
100
21. Sembawang Cable Depot Pte Ltd
Provision of storage facilities for submarine
cables and related equipment
60
60
22. SingTel Digital Media Pte Ltd
Development and management of on-line
internet portal
100
100
23. Telecom Equipment Pte Ltd
Engaged in the sale and maintenance of
telecommunications equipment
100
100
Note:
(1) With effect from 1 October 2010, the mobile business was transferred from Singapore Mobile Pte Ltd to SingTel Mobile Singapore Pte. Ltd.,
which was incorporated during the financial year.
ANNUAL REPORT 2010/2011 185
Notes to the Financial Statements
For the financial year ended 31 March 2011
45.2 Significant subsidiaries incorporated in Australia
Name of subsidiary
Principal activities
Percentage of effective
equity interest held by the Group
2011
%
2010
%
1. Alphawest Services Pty Ltd (1)
Provision of information technology services
2. Cable & Wireless Optus Satellites
C1 Satellite contracting party
Pty Limited (1)
3.
Inform Systems Australia Pty Ltd (1)
Provision of information technology services
4. NCSI (Australia) Pty Limited
Provision of information technology services
5. Optus Administration Pty Limited (1)
Provision of management services to the
Optus Group
100
100
100
100
100
100
100
100
100
100
6. Optus Backbone Investments Pty
Limited
Investment in telecommunications network
infrastructure in Australia
100
100
7. Optus Billing Services Pty Limited (*)
Provision of billing services to the Optus Group
100
8. Optus Broadband Pty Limited (1)
Provision of high speed residential internet
service
100
9. Optus Data Centres Pty Limited (1)
Provision of data communication services
100
10. Optus Finance Pty Limited (1)
Provision of financial services to the Optus Group
100
11. Optus Insurance Services Pty
Limited
Provision of handset insurance and related
services
100
12. Optus Internet Pty Limited (1)
Provision of internet services to retail customers
100
13. Optus Mobile Pty Limited (1)
Provision of mobile phone services
100
14. Optus Narrowband Pty Limited (*)
Provision of narrow band portal content services
100
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
100
100
100
100
100
100
100
100
100
100
100
100
100
100
186 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Notes to the Financial Statements
For the financial year ended 31 March 2011
45.2 Significant subsidiaries incorporated in Australia (Cont’d)
Name of subsidiary
Principal activities
Percentage of effective
equity interest held by the Group
18. Optus Stockco Pty Limited (*)
Purchases of Optus Group network inventory
19. Optus Superannuation Pty Limited (*)
A trustee for Optus Group’s superannuation
scheme
2011
%
100
100
2010
%
100
100
20. Optus Systems Pty Limited (1)
Provision of information technology services
to the Optus Group
100
100
21. Optus Vision Interactive Pty
Provision of interactive television service
100
100
Limited (*)
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
100
100
28. Simplus Mobile Pty Limited (1)
Provision of mobile phone services
29. SingTel Optus Pty Limited
Investment holding
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
Provision of mobile phone services
Limited (1)
100
100
100
100
100
100
100
100
100
100
33. XYZed LMDS Pty Limited (*)
Holder of telecommunications licence
100
100
ANNUAL REPORT 2010/2011 187
Notes to the Financial Statements
For the financial year ended 31 March 2011
45.2 Significant subsidiaries incorporated in Australia (Cont’d)
Name of subsidiary
Principal activities
Percentage of effective
equity interest held by the Group
2011
%
2010
%
34. XYZed Pty Limited (1)
Provision of telecommunications services
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.
45.3 Significant subsidiaries incorporated outside Singapore and Australia
Name of subsidiary
Principal activities
Country of
incorporation
Percentage of effective
equity interest held
by the Group
2011
%
2010
%
1. GB21 (Hong Kong)
Limited
Provision of telecommunications
services and products
Hong Kong
100
2. Guangzhou Zhong
Sheng Information
Technology Co., Ltd. (**) (1)
Provision of information technology
training
People’s
Republic of
China
100
3.
Information Network
Services Sdn Bhd
Provision of data communication
and value added network services
Malaysia
100
4. Lanka Communication
Services (Pvt) Limited
Provision of data communication
services
Sri Lanka
82.9
5. NCS Information Technology
(Suzhou) Co., Ltd. (1)
Software development and provision People’s
of information technology services Republic of
100
100
100
100
82.9
100
6. NCSI (Chengdu) Co., Ltd (1)
Provision of information technology
research and development, and
other information technology
related services
China
People’s
Republic of
China
100
100
7. NCSI (HK) Limited
Provision of information technology Hong Kong
services
100
100
188 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Notes to the Financial Statements
For the financial year ended 31 March 2011
45.3 Significant subsidiaries incorporated outside Singapore and Australia (Cont’d)
Name of subsidiary
Principal activities
Country of
incorporation
Percentage of effective
equity interest held
by the Group
8. NCSI (India) Private Limited
Provision of information technology
services
India
9. NCSI (Korea) Co., Limited
10. NCSI Lanka (Private) Limited
Provision of information technology South Korea
consultancy and system integration
services
Provision of information technology Sri Lanka
and communication engineering
services
11. NCSI (Malaysia) Sdn Bhd
Provision of information technology Malaysia
services
12. NCSI (ME) W.L .L.
13. NCSI (Philippines) Inc.
14. NCSI (Shanghai), Co. Ltd (1)
Provision of information technology
and communication engineering
services
Bahrain
Provision of information technology Philippines
and communication engineering
services
Provision of system integration,
People’s
software research and development Republic of
and other information technology
-related services
China
2011
%
100
100
2010
%
100
100
100
100
100
100
100
100
100
100
100
100
15. Shanghai Zhong Sheng
Information Technology
Co., Ltd. (**) (1)
Provision of information
technology training and
software resale
People’s
Republic of
China
100
100
16. NCSI Holdings (Malaysia)
Investment holding
Malaysia
100
Sdn. Bhd.
17. SingTel Global Private Limited
Provision of infotainment
products and services, and
investment holding
Mauritius
100
18. SingTel Global India Private
Limited
Provision of telecommunications
services and all related activities
India
74
19. Singapore Telecom Hong Kong
Limited
Provision of telecommunications
services and all related activities
Hong Kong
100
20. Singapore Telecom India
Private Limited
Engaged in general liaison and
support services
India
100
100
100
74
100
100
ANNUAL REPORT 2010/2011 189
Notes to the Financial Statements
For the financial year ended 31 March 2011
45.3 Significant subsidiaries incorporated outside Singapore and Australia (Cont’d)
Name of subsidiary
Principal activities
Country of
incorporation
Percentage of effective
equity interest held
by the Group
2011
%
2010
%
21. Singapore Telecom Japan
Co Ltd
Provision of telecommunications
services and all related activities
Japan
100
22. Singapore Telecom Korea
Limited
Provision of telecommunications
services and all related activities
South Korea
100
23. Singapore Telecom USA, Inc. (*)
Provision of telecommunications,
engineering and marketing services
USA
100
24. SingTel Australia Investment
Ltd (*)
Investment holding
Islands
British Virgin
100
25. SingTel (Europe) Limited
Provision of telecommunications United Kingdom
services and all related activities
100
26. SingTel (Philippines), Inc.
Engaged in general liaison and
support services
Philippines
100
27. SingTel Taiwan Limited
Provision of telecommunications
services and all related activities
Taiwan
100
28. SingTel Ventures (Cayman)
Investment holding
Cayman Islands
100
Pte Ltd (*)
29. Sudong Sdn. Bhd.
Management, provision and
operations of a call centre for
telecommunications services
Malaysia
100
All companies are audited by a member firm of Deloitte Touche Tohmatsu LLP except for the following -
(*) No statutory audit is required.
(**) Audited by another firm.
Note:
(1) Subsidiary’s financial year-end is 31 December.
100
100
100
100
100
100
100
100
100
190 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Notes to the Financial Statements
For the financial year ended 31 March 2011
45.4 Associated companies held by the Group
Name of associated company
Principal activities
Country of
incorporation
Percentage of effective
equity interest held
by the Group
2011
%
2010
%
1. ADSB Telecommunications B.V.
Dormant
Netherlands
2. APT Satellite Holdings
Investment holding
Bermuda
Limited (1)
3. APT Satellite International
Company Limited (1)
Investment holding
4.
Infoserve Technology Corp.
Dormant
5. OpenNet Pte. Ltd. (2)
To design, build and operate the
passive infrastructure for
Singapore’s Next Generation
National Broadband Network
British Virgin
Islands
Cayman Islands
Singapore
25.6
20.3
28.6
25.0
29.9
6. Singapore Post Limited (3)
Operation and provision of postal
services
Singapore
25.5
7. Telescience Singapore Pte Ltd
Sale, distribution and installation
of telecommunications equipment
Singapore
50.0
8. Viewers Choice Pte Ltd
Provision of services relating to
motor vehicle rental and retail of
general merchandise
Singapore
49.2
25.6
20.3
28.6
25.0
29.9
25.6
50.0
49.2
9. Warid Telecom (Private)
Limited (4)
Provision of mobile
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 2010,
the financial year-end of the company.
(2) Audited by Ernst & Young LLP, Singapore.
(3) Audited by PricewaterhouseCoopers LLP, Singapore.
(4) Audited by A.F. Ferguson & Co. (a member firm of PricewaterhouseCoopers).
ANNUAL REPORT 2010/2011 191
Notes to the Financial Statements
For the financial year ended 31 March 2011
45.5 Joint venture companies held by the Group
Name of joint venture company
Principal activities
Country of
incorporation
Percentage of effective
equity interest held
by the Group
2011
%
2010
%
1. Abacus Travel Systems
Pte Ltd
2. Acasia Communications
Sdn Bhd (1)
3. ACPL Marine Pte Ltd
4. Advanced Info Service Public
Company Limited (1) (2)
5. ASEAN Cableship Pte Ltd
Marketing and distributing certain
travel-related services through
on-line airline computerised
reservations systems
Provision of services relating to
telecommunications, computer,
data and information within and
outside Malaysia
Owning, operating and managing
of maintenance-cum-laying
cableships
Provision of mobile, broadband,
international telecommunications
services, call centre and data
transmission
Operation of cableships for laying,
repair and maintenance of
submarine telecommunication
cables
Singapore
30.0
30.0
Malaysia
14.3
14.3
Singapore
41.7
41.7
Thailand
21.3
21.3
Singapore
16.7
16.7
6. ASEAN Telecom Holdings
Investment holding
Malaysia
14.3
Sdn Bhd (1)
7. Asiacom Philippines, Inc. (1)
Investment holding
Philippines
8. Bharti Telecom Limited (3)
Investment holding
9. Bharti Airtel Limited (3)
Provision of mobile, long distance,
broadband and telephony
telecommunications services,
enterprise solutions, pay television
and passive infrastructure
India
India
10. Bridge Mobile Pte Ltd
Provision of regional mobile services Singapore
11. Globe Telecom, Inc. (4)
Provision of mobile, broadband,
international and fixed line
telecommunications services
Philippines
40.0
36.2
32.3
33.6
47.3
14.3
40.0
36.2
32.0
33.6
47.3
192 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Notes to the Financial Statements
For the financial year ended 31 March 2011
45.5 Joint venture companies held by the Group (Cont’d)
Name of joint venture company
Principal activities
Country of
incorporation
Percentage of effective
equity interest held
by the Group
2011
%
2010
%
12. Grid Communications
Pte Ltd (1)
Provision of public trunk radio
services
Singapore
50.0
13. Indian Ocean Cableship
Pte Ltd
Leasing, operating and managing of Singapore
maintenance-cum-laying cableship
50.0
14. International Cableship
Pte Ltd
Ownership and chartering of
cableships
Singapore
45.0
15. Main Event Television Pty
Limited
Provision of cable television
programmes
Australia
33.3
16. OPEL Networks Pty Limited
Dormant
17. Pacific Bangladesh Telecom
Limited (5)
18. Pacific Carriage Holdings
Limited
19. PT Telekomunikasi Selular (6)
Provision of mobile
telecommunications, broadband
and data transmission services
Operation and provision of
telecommunications facilities
and services utilising a network
of submarine cable systems
Provision of mobile
telecommunications and related
services
Australia
Bangladesh
50.0
45.0
Bermuda
40.0
40.0
Indonesia
35.0
35.0
50.0
50.0
45.0
33.3
50.0
45.0
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 (7)
22. TeleTech Park Pte Ltd
Operation and provision of
telecommunications facilities and
services utilising a network of
submarine cable systems
Engaged in the business of
development, construction,
operation and management of
TeleTech Park
Bermuda
40.0
40.0
Singapore
40.0
40.0
ANNUAL REPORT 2010/2011 193
Notes to the Financial Statements
For the financial year ended 31 March 2011
45.5 Joint venture companies held by the Group (Cont’d)
Name of joint venture company
Principal activities
Country of
incorporation
Percentage of effective
equity interest held
by the Group
2011
%
2010
%
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
2010, the financial year-end of the company.
(2) Audited by KPMG Phoomchai Audit Ltd, Bangkok.
(3) Audited by S.R.Batliboi & Associates, New Delhi (a member firm of Ernst & Young).
(4) Audited by SGV & Co. (a member firm of Ernst & Young).
(5) Audited by S. F. Ahmed & Co (SFACO) (an international associate firm of Ernst & Young).
(6) Audited by Tanudiredja Wibisana & Rekan (a member firm of PricewaterhouseCoopers).
(7) Audited by KPMG, Bermuda.
194 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Interested Person Transactions
The aggregate value of all interested person transactions during the financial year ended 31 March 2011 (excluding transactions less
than S$100,000) were as follows -
Name of interested person
Advanced Info Service Public Company Ltd
Aetos Security Management Pte Ltd
Capitaland Limited
Folec Communications (B) Sdn Bhd
Fullerton Fund Management Company Ltd
Grid Communications Pte Ltd
iShopAero Pte Ltd
MapleTree Investments Pte Ltd
MediaCorp TV Singapore Pte Ltd
MediaCorp Pte Ltd
Neptune Orient Lines Limited
Nucleus Connect Pte Ltd
PSA Corporation Limited
Radiance Communications Pte Ltd
SATS Ltd (formerly known as Singapore Airport Terminal Services Ltd)
SembCorp Industries Limited
Singapore Technologies Aerospace Limited
Singapore Technologies Electronics Limited
Singapore Technologies Kinetics Limited
SMRT Engineering Pte Ltd
SMRT Trains Ltd
SP Services Ltd
SPT Net Pte Ltd
StarHub Ltd
StarHub Cable Vision Ltd
StarHub Mobile Pte Ltd
ST Electronics (Info-Comm Systems) Pte Ltd
ST Electronics (Satcom & Sensor Systems) Pte Ltd
Surbana International Consultants Pte Ltd
Temasek Holdings (Private) Ltd
Trusted Source Pte Ltd
S$ mil
0.7
0.1
0.1
0.1
0.2
0.7
2.3
0.3
0.3
0.5
0.2
2.8
0.8
2.9
3.1
0.2
0.9
0.3
0.4
1.3
0.2
0.4
3.0
62.8
34.0
11.5
1.3
0.2
0.2
0.1
1.5
133.4
ANNUAL REPORT 2010/2011 195
Shareholder Information
As at 31 May 2011
ordInArY ShAreS
Number of ordinary shareholders
Number of holders of CHESS Units of Foreign Securities relating to ordinary shares in the Company
(CuFS)
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).
316,521
21,548
SubStAntIAl ShAreholderS
Temasek Holdings (Private) Limited
note:
(1) Deemed through interests of associated companies and/or subsidiaries.
MAjor ShAreholderS lISt - top 20
no.
name
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
Temasek Holdings (Pte) Ltd
DBSN Services Pte Ltd
Citibank Nominees Singapore Pte Ltd
DBS Nominees Pte Ltd
Central Provident Fund Board
HSBC (Singapore) Nominees Pte Ltd
United Overseas Bank Nominees Pte Ltd
Chess Depositary Nominees Pty Limited (3)
BNP Paribas Securities Services Singapore
Raffles Nominees (Pte) Ltd
DB Nominees (S) Pte Ltd
Merrill Lynch (Singapore) Pte Ltd
OCBC Nominees Singapore Private Limited
Bank of Singapore Nominees Pte Ltd
Royal Bank of Canada (Asia) Ltd
OCBC Securities Private Ltd
Societe Generale Singapore Branch
BNP Paribas Nominees Singapore Pte Ltd
Morgan Stanley Asia (Singapore)
Phillip Securities Pte Ltd
direct
Interest
deemed
Interest
8,671,325,982
24,173,819 (1)
no. of
shares held
% of issued
share capital (1)
8,671,325,982
1,566,946,530
1,471,586,110
1,301,550,140 (2)
941,672,910
489,780,247
292,988,407
214,006,917
200,499,014
110,791,787
26,919,840
20,591,185
18,722,719
7,779,273
7,488,601
5,852,568
4,748,652
4,522,262
3,331,765
3,178,582
15,364,283,491
54.41
9.83
9.23
8.17
5.91
3.07
1.84
1.34
1.26
0.69
0.17
0.13
0.12
0.05
0.05
0.04
0.03
0.03
0.02
0.02
96.41
notes:
(1) The percentage of issued ordinary shares is calculated based on the number of issued ordinary shares of the Company as at 31 May 2011, excluding
156,522 ordinary shares held as treasury shares as at that date.
(2) Excludes 156,522 ordinary shares held by DBS Nominees Pte Ltd as treasury shares for the account of the Company.
(3) The shares held by CHESS Depositary Nominees Pty Limited are held on behalf of the persons entered in the register of CUFS holders.
196 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
Shareholder Information
As at 31 May 2011
MAjor CuFS holderS lISt (1) - top 20
no.
name
Cogent Nominees Pty Limited
J P Morgan Nominees Australia Limited
Paul O'Sullivan
RBC Dexia Investor Services Australianominees Pty Limited
AMP Life Limited
The Australian National University
Citicorp Nominees Pty Limited
Citicorp Nominees Pty Limited
Queensland Investment Corporation
RBC Dexia Investor Services Australia Nominees Pty Limited
1. National Nominees Limited
2.
J P Morgan Nominees Australia Limited
3. HSBC Custody Nominees (Australia) Limited
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14. M F Custodians Ltd
15. HSBC Custody Nominees (Australia) Limited - A/C 3
16.
17.
18.
19.
20.
JMB Pty Limited
J P Morgan Nominees Australia Limited
Cogent Nominees Pty Limited
John Simon
Citicorp Nominees Pty Limited
no. of
CuFS held
% of issued
share capital (2)
43,217,796
32,131,790
31,554,992
10,580,016
4,104,976
3,358,663
3,319,489
3,262,979
3,000,000
2,220,000
1,973,449
942,165
878,982
811,753
770,008
760,000
698,800
601,348
522,991
521,400
145,231,597
0.27
0.20
0.20
0.07
0.03
0.02
0.02
0.02
0.02
0.01
0.01
0.01
0.01
0.01
0.01
0.00
0.00
0.00
0.00
0.00
0.91
notes:
(1) CUFS are CHESS Units of Foreign Securities relating to ordinary shares in the Company. The shares are held by CHESS Depositary Nominees Pty
Limited on behalf of the persons entered in the CUFS register.
(2) The percentage of issued ordinary shares is calculated based on the number of issued ordinary shares of the Company as at 31 May 2011, excluding
156,522 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
268,937
49,370
10,355
8,821
533
53
338,069
% of
holders
79.55
14.60
3.06
2.61
0.16
0.02
100.00
Number of holders holding less than a marketable parcel
No. of
shares/CUFS
% of issued
share capital
62,238,992
115,941,560
79,136,454
222,170,519
125,551,075
15,331,257,149
15,936,295,749
0.39
0.73
0.50
1.39
0.79
96.20
100.00
241,478
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
Limited is ignored.
(2) Based on information available to the Company as at 31 May 2011, approximately 45% 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 2011, excluding 156,522 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 2011, the number of ordinary shares held in treasury is 156,522, and the percentage of such holding against the total number of issued ordinary
shares (excluding ordinary shares held as treasury shares) is 0.001%.
ShAre purChASe MAndAte
At the Extraordinary General Meeting of the Company held on 30 July 2010 (2010 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 2010 EGM. As at 31 May 2011, there is no current on-market buy-back of shares pursuant to the mandate.
ANNUAL REPORT 2010/2011 197
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
corporate information*
company secretary
Chan Su Shan
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
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
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
in australia:
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
Board of directors
Chumpol NaLamlieng (Chairman)
Chua Sock Koong (Group CEO)
Graham John Bradley AM (1)
Fang Ai Lian
Dominic Chiu Fai Ho
Simon Israel
Low Check Kian
Peter Edward Mason AM (1)
Kaikhushru Shiavax Nargolwala
Peter Ong Boon Kwee
Ong Peng Tsin
Nicky Tan Ng Kuang
audit committee
Fang Ai Lian (Chairman)
Dominic Chiu Fai Ho
Kaikhushru Shiavax Nargolwala
Peter Ong Boon Kwee
executive resource and
compensation committee
Chumpol NaLamlieng (Chairman)
Graham John Bradley AM (1)
Fang Ai Lian
Simon Israel
Peter Edward Mason AM (1)
Kaikhushru Shiavax Nargolwala
corporate Governance and
nominations committee
Kaikhushru Shiavax Nargolwala (Chairman)
Dominic Chiu Fai Ho
Low Check Kian
Chumpol NaLamlieng
Peter Ong Boon Kwee
finance, investment
and risk committee
Nicky Tan Ng Kuang (Chairman)
Simon Israel
Low Check Kian
Ong Peng Tsin
optus advisory committee
Simon Israel (Chairman)
Graham John Bradley AM (1)
Chua Sock Koong
Peter Edward Mason AM (1)
Ong Peng Tsin
Nicky Tan Ng Kuang
notes:
* As at 11 May 2011
(1) Member of the Order of Australia
198 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
singtel contact points
sinGapore
SingTel Headquarters
31 Exeter Road, Comcentre
Singapore 239732
Republic of Singapore
Tel: +65 6838 3388
Fax: +65 6732 8428
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 3320
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 4505
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 15th Floor, South Block
50 Mohakhali C/A
Dhaka – 1212, Bangladesh
Tel: +880 2 883 5120
Fax: +880 2 988 0037
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
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
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
20/30, Paras Plaza
3rd Floor, Cathedral Garden Road,
Nungambakkam, Chennai – 600 034
Tel: +91 44 4264 9410
Fax: +91 44 4264 9414
Email: singtel-ind@singtel.com
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 Extn: 105
Fax: +91 40 2784 6955
Email: singtel-ind@singtel.com
mumbai
Sahar Plaza
111 Bonanza Wing B
Mathuradas Vasanji Road
Andheri East, Mumbai 400069, India
Tel: +91 22 2824 4999 /
+91 22 4075 7777
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 /
+91 11 4362 1199
Fax: +91 11 4152 1683
Email: singtel-ind@singtel.com
ANNUAL REPORT 2010/2011 199
san francisco
100 Marine Parkway
Suite 450
Redwood City, CA 94065, US
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 3943 2161 / 2
Fax: +84 4 3943 2163
Email: singtel-vn@singtel.com
singtel contact points
SingTel Contact Points
indonesia
philippines
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
manila
Unit 1504 Liberty Center
104 H V de la Costa Street
Salcedo Village, Makati City 1227
Philippines
Tel: +63 2 887 2791
Fax: +63 2 887 2763
Email: singtel-phil@singtel.com
Japan
taiWan
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
tokyo
Arco Tower
9F, 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
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
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: sgomals@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
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
us
chicago
8770 West Bryn Mawr Avenue
13th Floor
Chicago, IL 60631, US
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, US
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, US
Tel: +1 212 269 7920
Email: singtel-usa@singtel.com
200 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES
a C2 Design Studio production
Headquarters
Singapore Telecommunications Limited
31 Exeter Road
Comcentre
Singapore 239732
Republic of Singapore
Tel:
Fax:
Website:
+65 6838 3388
+65 6732 8428
www.singtel.com
Copyright © 2011
Singapore Telecommunications Limited
(CRN:199201624D)
All rights reserved
Printed on environmentally-friendly paper