Singapore Telecommunications Ltd Annual Report 2017

FY2017 Annual Report · Singapore Telecommunications Ltd

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Connecting

Your World

ANNUAL REPORT 2017

Connecting
Your World

Technology has the power to enrich lives and
draw people closer. Two friends across continents
connect in an instant, businesses reach customers
in a ﬂash, and entertainment is available round
the clock, thanks to a host of technologies
working hard behind the scenes.

As a leader in communications technology,
Singtel is proud to play a critical role in enabling
such interactivity for millions of people across
the world every day, through our investments in
network infrastructure, product innovation and
service excellence. But that’s not all. We believe
the digital revolution should beneﬁt everyone
and empower even those who may not have
ready access to digital technology.

This year’s report throws the spotlight on how our
staff and company initiatives are championing
positive change in our communities, from
training youth in digital literacy to supporting
social entrepreneurs who are innovating tech
solutions or simply helping the elderly use mobile
devices to plug into the web. Because at Singtel,
it is not simply about technology – it’s about you
and connecting your world.

CHUN HUI EN
NCS Senior Assistant, Business Development

Before she embarked on her volunteering trip in the
Philippines, Hui En was worried she wouldn't be able
to communicate with the children. As it turned out, all
it took was a hug and a smile to break the ice. Despite
the language barriers, many memorable moments were
created and friendships forged. Today, Hui En remains in
touch with her Pinoy friends via social media and looks
forward to the next overseas volunteering opportunity.

Table of Contents

Financial Highlights
Achievements in FY 2017
Chairman’s Message
GCEO Review

OVERVIEW
An overview of our businesses, our performance, key achievements
and value created, as well as our strategy moving forward
1
3
5
7
11 Who We Are
13 Our Businesses
14 Our Strategy
15
17 Board of Directors
22 Organisation Structure
23 Management Committee
28 Senior Management

The Value We Create

BUSINESS REVIEWS
Insights into each of our business units
29 Group Consumer
43 Group Enterprise
51 Group Digital Life
59 Key Awards and Accolades

GOVERNANCE AND SUSTAINABILITY
Our corporate governance, risk management and
sustainability efforts
61 Governance and Sustainability Philosophy
63 Corporate Governance
Investor Relations
91
93 Risk Management Philosophy and Approach
101 Sustainability

PERFORMANCE
Our ﬁnancial performance
110 Group Five-year Financial Summary
112 Group Value Added Statements
113 Management Discussion and Analysis

FINANCIALS
Audited ﬁnancial statements
123 Directors’ Statement
132 Independent Auditor’s Report
137 Consolidated Income Statement
138 Consolidated Statement of Comprehensive Income
139 Statements of Financial Position
140 Statements of Changes in Equity
144 Consolidated Statement of Cash Flows
147 Notes to the Financial Statements

ADDITIONAL INFORMATION
Our shareholders, transactions with interested persons and other
corporate information
228 Interested Person Transactions
229 Shareholder Information
231 Corporate Information
232 Contact Points

CHONG POH YOKE

NCS Systems Consultant

Poh Yoke is no stranger to volunteering. But when she
went to the Philippines to teach English to the street
children, she learned once again how little acts of kindness
could make a big diff erence to others. The smiles and
easy laughter of the children have not just taught her to
appreciate the simple things in life, but have brought her
out of her comfort zone. She feels this has made her a
better person.

Financial Highlights

OPERATING REVENUE (1)

2017

2016

S$16,711M

S$16,961M

-1.5%

EBITDA

2017

2016

S$4,998M

S$5,013M

STABLE

NET PROFIT

UNDERLYING NET PROFIT

2017

2016

S$3,853M

S$3,871M

STABLE

2017

2016

S$3,915M

S$3,805M

+2.9%

FREE CASH FLOW

SHAREHOLDER PAYOUT

2017

2016

S$3,054M

S$2,718M

+12.4%

2017

2016

S$2,857M

S$2,789M

+2.4%

RETURN ON EQUITY

RETURN ON INVESTED CAPITAL

2017

2016

14.5% (2)

15.6%

-1.1
percentage
points

2017

2016

11.1% (2)

11.7%

-0.6
percentage
point

Constant Currency

NET PROFIT

UNDERLYING NET PROFIT

2017

2016

S$3,832M

S$3,871M

-1.0%

2017

2016

S$3,894M

S$3,805M

+2.3%

NET PROFIT
Contribution by Geography

30%

Singapore (3)

22%

Australia

48%

Regional Associates

REVENUE BREAKDOWN
BY PRODUCTS AND SERVICES

11%

12%

18%

36%

20%

Mobile Communications
Data and Internet
ICT
Sale of Equipment
Digital Businesses
Others (4)

SHAREHOLDER PAYOUT

Singtel has a track record of generous shareholder returns.

Dividend per share (S¢)

We pay between 60% and 75% of underlying net proﬁt as
ordinary dividends.

For the ﬁnancial year ended 31 March 2017, the Board has
recommended a ﬁnal ordinary dividend of 10.7 Singapore
cents a share. Together with the interim dividend of 6.8
Singapore cents, the total ordinary dividends for the year is
17.5 Singapore cents, unchanged from the previous year. It
also represents 73% of the Group’s underlying net proﬁt.

2017

2016

2015

2014

2013

17.5

16.8

Impacted by regulated reduction in Australian mobile termination rates from 1 January 2016. Excluding this, operating revenue would be up 2.0%.

Notes:
(1)
(2) Based on enlarged equity base, as the Group issued new shares to acquire stakes in the associates.
(3) Includes losses from Trustwave and Amobee.
(4) Includes National telephone, International telephone and Pay television.

Singapore Telecommunications Limited | Annual Report 2017

Achievements in FY 2017

The Group has achieved a lot since our last annual report. We launched new products and
services, bolstered our core and digital capabilities, and deepened our relationships with
our regional associates.

Extended Global
Connectivity

Launched Cyber
Security Training for
C-Suites

The Singtel Cyber Security
Institute in Singapore is the ﬁrst
of its kind in Asia Paciﬁc to hone
cyber skills and preparedness of
businesses and governments.

Formed a strategic alliance with
Airtel in India to provide high
speed data connectivity through
370
325

points of presence in

cities worldwide.

Established
Content
Creation Arm

Launched
All-in-one
Mobile
Payments

Introduced Singtel Dash,
Singapore’s ﬁrst all-in-one mobile
payments solution for transit, retail
and money transfers.

Globe in the Philippines set up
Globe Studios and Globe Live to
create original shows and world-
class live entertainment events.

APRIL 2016

MAY 2016

JUNE 2016

OCTOBER 2016

NOVEMBER 2016

Deepened Relations
with Regional Associates

Increased effective interests in AIS and Airtel in the high-
growth Thai and Indian markets through acquisition of
shares in Intouch Holdings and Bharti Telecom.

Launched Security Operations
Centre in Australia

Optus Advanced Security Operations Centre in Australia
helps protect enterprises against cyber threats.

Launched
Cyber Security
Services in
Japan

Partnered TIS Inc to provide
Trustwave's cyber security services
in Japan to help businesses build
cyber resilience and protect critical
infrastructure.

Invested
in Cyber R&D

Established NUS-Singtel Cyber
Security R&D Lab to create
innovative cyber security solutions
for a smarter, safer Singapore.

Enhanced Digital
Content

Launched Cast OTT video portal
app offering Hollywood and Asian
content, and Singtel Newsstand
offering digital subscriptions to
leading local and international
news publications and SPH lifestyle
magazines in Singapore.

Launched 24/7
Sports Channel

Launched
International Mobile
Video Competition

Tripled the Data

Optus Sport with on-demand and
live multi-screen capability was
launched in Australia.

Launched "The 5-min Video
Challenge" across the Group to
generate original content.

Launched DataX3 mobile data
add-on to offer triple the mobile
data allowance in Singapore.

JULY 2016

AUGUST 2016

SEPTEMBER 2016

JANUARY 2017

FEBRUARY 2017

MARCH 2017

Introduced
Fastest Mobile
Network
450
mobile data speeds nationwide
in Singapore.

Launched

Mbps

Launched First
Payments Bank

Airtel India launched India’s ﬁrst
payments bank, offering customers
the convenience of cashless purchases
using mobile money at over

250,000
1m

merchants.

Airtel retail outlets
and over

Invested in
Digital Marketing
Technology

Launched Cyber
Security Services in
the Philippines

Trustwave Managed Security
Services was launched in the
Philippines with Globe to
help enterprises protect against
cyber attacks.

Amobee strengthened its
technological edge and scale with
the acquisition of Turn, a leading
data management platform and
multi-channel programmatic
media buying platform.

Singapore Telecommunications Limited | Annual Report 2017

Chairman's Message

"Transformation
is at the heart of
repositioning Singtel to
remain relevant to our
customers as well as
building new sources of
revenue for the mid to
long term."

Dear Shareholders,

FY 2017 was a challenging year as competition intensiﬁed
across markets for both our consumer and enterprise
businesses. Taken in this context, Singtel delivered
a resilient performance while continuing to make
signiﬁcant investments for the future. Our net proﬁt for
the year was stable at S$3.85 billion, underpinned by
growth in mobile data, ICT and digital services.

INVESTING FOR THE FUTURE
We continue to invest in the digital transformation we
began ﬁve years ago, transforming our core business and
investing to grow to scale new global businesses in digital
marketing and cyber security. Transformation is at the
heart of repositioning Singtel to remain relevant to our
customers as well as building new sources of revenue for
the mid to long term.

STRENGTHENING OUR NETWORKS POSITION
Network performance is a key competitive differentiator
for Singtel, and increasingly important with the growing
consumption of video and the demands that places
on network performance. We continue to invest in
networks ahead of demand to ensure a leading customer
experience.

It is notable that the technology investment cycle
is compressing – it took eight years to go from 2G
to 3G and only four years to go to 4G. We are now
implementing 4.5G and in the exploratory stage of 5G
networks.

At the same time, the cost of spectrum has soared given
it is ﬁnite in nature and required for growth. Spectrum
auctions around the region have been ﬁercely contested
by incumbents as well as new entrants. Singtel has
emerged with strong spectrum holdings, providing the
Group with competitive advantage.

BUILDING OUR LEADING POSITIONS IN THE REGION
Beyond the developed markets in Singapore and
Australia, we are making the investments needed to build
on our leading positions across the region. Last year,
we increased our effective interests in our associates
in Thailand and India by acquiring stakes in Intouch
Holdings and Bharti Telecom.

We believe both markets are favourably positioned for
mobile revenue growth given their younger population
demographics and data growth. While the entry of a new
operator in the Indian telecoms industry has triggered
unprecedented industry disruption and consolidation, we
believe this will lead to a healthier industry structure for
the long term.

CAPTURING NEW GROWTH IN DIGITAL
As the public and private sectors increasingly go digital,
demand for ICT-based solutions such as cloud, software
as a service and cyber security are providing growth
opportunities.

Cyber security is a high-growth sector where we
have established a global platform by leveraging our
acquisition of Trustwave, a US-based leading managed
security services provider. We are building out a global
cyber security business which we expect to become a
key growth driver in our future. Coupled with our existing
ICT assets and capabilities, we are well placed to provide
a comprehensive set of managed services with carriage
solutions that will create more value in the long term.

In digital marketing, Amobee’s recent acquisition of Turn,
a global technology platform for marketers and agencies,
adds programmatic capabilities and brings Amobee to
scale. Amobee is now in a stronger position to capture
the global digital marketing opportunity.

OUR WORK CONTINUES
I am encouraged to see our investments in our core
and digital transformation delivering tangible results.
It shows our efforts over the last ﬁve years are making
a difference. In fact, we are now in a much stronger
position to compete and thrive in this new economy and
are well positioned to participate in the opportunities
that will emerge around Smart Nation. Amid this fast-
changing world, our Board and management remain
committed to the highest standards of corporate
governance and sustainable long-term value creation.

I would like to thank our directors, management and
employees for their unstinting commitment to this
journey. We do realise that there is still much to do and
our work continues.

Yours sincerely,

SIMON ISRAEL
Chairman

Singapore Telecommunications Limited | Annual Report 2017

GCEO Review

"Singtel today is
markedly different from
the traditional telco
we were ﬁve years ago.
We’ve strengthened
our competitiveness,
and we’re also
more diversiﬁed
and resilient. While
our transformation
continues, I’m conﬁdent
that a strong foundation
is now in place to
evolve our business
and capture the
opportunities ahead."

A STRONG, RESILIENT FOUNDATION
In the fast-moving digital world, much has changed
for us in the past year, our ﬁfth since embarking on a
journey to transition from a traditional telco into that of
a communications technology company. I’m pleased to
inform that we’ve managed to hold our own in the new
economy by building digital capabilities to capture growth
while strengthening our core businesses. At the close of
the ﬁnancial year, our digital and cyber security businesses,
while at the early stages of value creation, now contribute
over S$1 billion, or 6% of Group revenue.

Our overall business has stayed resilient and we continue
to deliver strong core earnings despite the challenging
business environment. Our net proﬁt for FY 2017 was
stable at S$3.85 billion even with the costs of investing in
our new businesses and in network and spectrum. In terms
of Total Returns to Shareholders, we have been disciplined
with our dividend payout and outperformed the STI index
over the past ﬁve years.

DRIVING VALUE FROM THE CORE
Our core consumer businesses in Singapore and Australia
performed well amid heightened competition. Both
Optus and Singtel rolled out a host of differentiated
services to win over customers who are spending more
time on various mobile devices. Value-for-money data
plans, sports and entertainment content and smart home
services were some of the new offerings introduced.
This strategy mitigated the decline in voice and roaming
services in both markets, and saw Optus achieve its
strongest quarter of mobile handset growth in ﬁve years in
the quarter ended March 2017.

To provide our customers with the best data experience
possible, we continue to invest in network and spectrum.
Singtel successfully secured spectrum at the recent
spectrum auction which will enable us to further extend
our network leadership and support the growth of the
Internet of Things and 5G initiatives in the future. In
Australia, Optus has been enhancing the competitiveness
of its network with unprecedented plans to improve
coverage across regional and rural Australia.

While a fourth mobile network operator is set to enter
Singapore and Australia next year, neither Singtel nor
Optus are new to competition. We remain focused on our
customers and will continue to work diligently at earning
their loyalty.

DEEPENING RELATIONS WITH OUR REGIONAL
ASSOCIATES
Mobile data was also a key theme for our regional
associates in the emerging markets. They are reaping
the beneﬁts of strategic investments made in networks
and spectrum as more customers take to affordable
smartphones and digital lifestyles.

Telkomsel was the standout performer, posting its ﬁfth
straight year of double-digit growth in revenues, EBITDA
and proﬁts, boosted by higher demand for voice, data
and digital services. Its strong performance mitigated
lower contributions from Airtel which is facing intense
price competition in India. Airtel’s earnings were adversely
impacted by the entry of a new operator which offered
free voice and data, despite a better performance in Africa.
In the Philippines, Globe gained revenue market share
while in Thailand, AIS rolled out its 4G network in record
time to cover 98% of the population.

Last November, we increased our effective interests in
both AIS and Airtel, through an acquisition of shares in
Intouch Holdings and Bharti Telecom. It has always been
our intent to raise our investments in our associates under
the right terms. While there are headwinds in India now
and we recognise the need for regulatory reforms to
ensure sustainable investment, we take a long-term
view of the business. Airtel, our strategic partner of more
than 16 years, is a strong market leader in a market with
rapidly increasing smartphone penetration and mobile
data adoption.

As a Group which reaches some 640 million mobile
subscribers across the region, we enjoy great synergies,
economies of scale and collaborative innovation

Singapore Telecommunications Limited | Annual Report 2017

GCEO Review

"As a Group which reaches some 640 million mobile
subscribers across the region, we enjoy great
synergies, economies of scale and collaborative
innovation with all our associates. We work
closely with them, sharing insights from our own
transformation efforts, to drive mobile data growth
and digital empowerment in their markets."

with all our associates. We work closely with them,
sharing insights from our own transformation efforts,
to drive mobile data growth and digital empowerment
in their markets.

ICT STAYS STRONG WITH NEW GROWTH
Our enterprise business delivered a strong performance
for the year. Demand for ICT services, particularly cyber
security, remained resilient despite the subdued economic
and business environment.

As cyber security emerged as a critical issue for
governments and businesses, we were in a good
position to win new business with our cyber security arm
Trustwave. To further strengthen our cyber capabilities
and expand our cyber network globally, we launched
a new advanced security operations centre in Sydney
as well as the NUS-Singtel Cyber Security R&D Lab in
Singapore to innovate new IP and technologies. We also
formed the Singtel Cyber Security Institute to lift the
cyber security expertise and preparedness of C-suites in
the region. These investments are designed to develop a
comprehensive cyber eco-system and grow our leadership
in this space.

One key element of Singapore’s Smart Nation initiative is
the nationwide ﬁbre network which NetLink Trust owns
but operates as an independently managed business trust.
For regulatory reasons, we will divest our stake in NetLink
Trust to less than 25% through an initial public offering
in FY 2018.

ACCELERATING OUR DIGITAL STRATEGIES
Our digital strategy to focus on digital marketing, OTT
video and data analytics is paying off. These are
three areas that best leverage our telco assets and
contribute to our core business.

Amobee, our global digital marketing arm and the largest
of our digital businesses, did well for the year. In April 2017,
it acquired Turn, a leading global technology platform with
advanced data analytics capabilities for marketers and
agencies. This strategic investment strengthens Amobee’s
technological edge, allowing it to offer marketers
an independent end-to-end advertising and data
management platform across all channels, formats and
devices. We are conﬁdent this will accelerate Amobee’s
growth into a signiﬁcant global player as it expands
beyond the US and into the Asia Paciﬁc.

We made further progress in securing contracts to build
Smart Nation solutions in the areas of transportation,
security and building infrastructure. We will leverage
advanced analytics and next-generation technologies to
deliver innovative solutions that empower residents and
create vibrant and sustainable communities.

HOOQ, our mobile streaming service, launched in
Singapore and steadily added to its subscriber base in
India, Indonesia, the Philippines and Thailand.

DataSpark, our advanced analytics business, is deploying
its products beyond Singapore in markets such as
Australia, Indonesia, the Philippines and Thailand.

"We believe the digital revolution should beneﬁt and
empower everyone, not just those who can afford it or
have ready access to such technology."

THRIVING IN A DIGITAL WORLD
Singtel today is markedly different from the traditional
telco we were ﬁve years ago. We’ve strengthened
our competitiveness, and we’re also more diversiﬁed
and resilient.

I would like to thank the Board for their guidance, and our
partners and shareholders for their support. Thanks are
also very much due to the Singtel team whose unwavering
passion, dedication and hard work have propelled us here.

While our transformation continues, I’m conﬁdent that a
strong foundation is now in place to evolve our business
and capture the opportunities ahead.

Yours sincerely,

CHUA SOCK KOONG
Group Chief Executive Officer

While Amobee is on the cusp of breaking even in FY 2018,
our other businesses will take time to scale and mature.

A FUTURE-READY TEAM
As we continue our transformation, the composition of
our workforce will naturally evolve, affecting the scope
of many jobs. We have therefore placed a priority on
training and reskilling our people so they can be gainfully
redeployed within the Group. We have implemented
long-term initiatives to attract, nurture and retain talent,
especially in our new growth areas of cyber security, cloud
and analytics.

ENSURING DIGITAL BENEFITS EVERYONE
As a communications technology company which touches
millions of lives across the region, we recognise that
we are in a privileged position to create positive change
in our communities even as we grow our business. We
believe the digital revolution should beneﬁt and empower
everyone, not just those who can afford it or have ready
access to such technology.

This is why we collaborate with partners to ensure our
communities are not left behind as we all race into an
increasingly connected world. Some of the commitments
we’ve made include teaching digital literacy to particularly
vulnerable children and youth, training persons with
disabilities in new technologies so they can ﬁnd gainful
employment, and supporting social entrepreneurs who
are tapping technology to grow their businesses. We’re
encouraged that our efforts have been acknowledged
through our recent ranking among the Global 100 Most
Sustainable Companies in 2017.

Singapore Telecommunications Limited | Annual Report 2017

Who We Are

Established 138 years ago as Singapore’s ﬁrst telecommunications provider, Singtel has
grown beyond our traditional telco roots to become a global communications technology
company with a presence in Asia, Australia, Africa and the US. Together with our regional
associates, we reach 638 million mobile subscribers and derive about 70% of our earnings
from outside of Singapore. Our consumer and business customers enjoy a wide range of
essential digital services, delivered to them seamlessly and securely.

BHARTI AIRTEL
Airtel has operations
in 15 African countries

138
years

of operating experience

638

million

mobile customers in
22 countries

75
29

global offices in

countries

points of presence in

370
325

cities to serve enterprises

About

70%

of earnings from operations
outside of Singapore

47.1% of ordinary shares (1)
59m mobile customers
48% market share

No.2 in the Philippines

35.0% eff ective interest
169m mobile customers
46% market share

No.1 in Indonesia

36.5% eff ective interest
Mobile customers:
274m (India)
2m (South Asia)
80m (Africa)
23% market share (India)

No.1 in India

23.3% of ordinary shares
41m mobile customers
45% market share

No.1 in Thailand

21.0% of ordinary shares
An investor in telcos, media
and technology

4.1m mobile customers
49% market share (mobile)
0.6m broadband customers
42% market share (broadband)

No.1 in Singapore

100% subsidiary
9.7m mobile customers
27% market share (2) (mobile)
1.1m broadband customers

No.2 in Australia

Notes:
(1) Singtel has 21.5% interest in Globe’s voting shares.
(2) Revenue market share for the six months to 31 December 2016.
All ﬁ gures as at 31 March 2017 unless otherwise stated.

Singapore Telecommunications Limited | Annual Report 2017

Our Businesses

The Singtel Group is organised according to three business segments – Group
Consumer, Group Enterprise and Group Digital Life – to serve the evolving needs of our
customers. Group Consumer and Group Enterprise are our core businesses, enabling
consumers, businesses and governments to connect, communicate, collaborate and
transact. Group Digital Life is designed to develop new growth engines in the digital
space by leveraging our unique telco assets and customer knowledge.

Read more about our businesses from page 29 onwards.

GROUP BUSINESSES

GROUP CONSUMER

GROUP ENTERPRISE

GROUP DIGITAL LIFE

Off ers a range of digital services
from music, OTT video,
to mobile payments in addition
to voice, messaging, broadband
and pay-TV.

Delivers core enterprise ICT
services as well as cloud, cyber
security and smart city solutions.

Focuses on digital marketing,
data analytics and OTT video.

REGIONAL
ASSOCIATES

Our Strategy

The telco business remains the bedrock of our business, but we no longer see ourselves
as just a telco. Our vision is to be Asia Paciﬁc’s best communications technology
company. We have identiﬁed new ways to use our assets to develop new revenue
streams, especially in the digital space. This is why our transformation is dual track.

In our core consumer business, we are shifting from voice to data, expanding our pricing
plans and content mix to meet increasingly data-centric lifestyles and more demand for
entertainment on the go. In our enterprise business, we are going big on cloud, cyber
security and smart city solutions. We have identiﬁed these as the three new growth
drivers of our ICT business.

The second track of our transformation involves growing a new digital business to
take advantage of digital disruptions. The third arm to our business, Group Digital Life,
captures opportunities in digital marketing, data analytics and over-the-top (OTT) video.

VISION
To be Asia Paciﬁc’s best communications technology company

GOAL
To create sustainable long-term growth, to deliver superior returns
to shareholders and positive impact to stakeholders

TRANSFORMATION STRATEGY

Strengthen and drive growth from the core

Create innovative, differentiated digital services

STRATEGIC PRIORITIES

GROUP CONSUMER

GROUP ENTERPRISE

GROUP DIGITAL LIFE

Data

Content

Cloud

Cyber
security

Smart
cities

Digital
marketing

Data
analytics

OTT
video

STAKEHOLDERS

Customers

Investors

Staff

Communities

Singapore Telecommunications Limited | Annual Report 2017

The Value We Create

We focus not only on connecting people and businesses but also creating value for our
customers, our investors, our people and the communities in which we operate.

FOR OUR CUSTOMERS

Our 4G coverage
is the widest at

and covers

99.98% 96.10%

in Singapore

of Australia's population

12%

Our associates now have more than

220m
12%

mobile data users, a

increase from last year

Together with our associates,
our capital expenditure was

S$10.6b
12%

, a

increase from a year before

We bolstered our global cyber security capabilities with

Singtel Cyber
Security Institute

Advanced Security
Operations Centres

NUS-Singtel
Cyber Security R&D Lab

More than

2,000

Cyber Security Experts

We increased coverage for secured,
high-speed data connectivity from

160
325

cities to

globally

FOR OUR INVESTORS

We paid

S$2,816m
S$351m

in interest

in dividends and

5-YEAR TOTAL SHAREHOLDER RETURN (TSR)

Singtel

MSCI Asia Paciﬁ c
Telecommunications Index

Straits Times Index

9.4%

9.3%

4.4%

Source: Bloomberg, 2012–2017

ACCOLADES

No.1 in Singapore
Governance and
Transparency Index 2016

Best Managed Company
in Singapore at
FinanceAsia's Asia's Best
Companies Poll 2016

Best Managed Board
Award – Gold at Singapore
Corporate Awards 2016
(Companies with S$1 billion
and above in market cap)

FOR OUR PEOPLE

We have supported about

200

students through our scholarship
programmes

We invested

S$500,000

to upgrade our offi ce accessibility for
persons with disabilities

FOR OUR COMMUNITIES

We invested

S$25m

in learning and development to train staff in
Singapore and Australia and our staff clocked

665,000

learning hours

We contributed

in community investment and spent

S$17m
34,000

hours in staff volunteering

To encourage social innovation,
Singtel and Optus Future Makers supported

start-ups and non-proﬁ t
organisations with over

18
S$480,000

in cash grants

We were ranked

More than

2,500

SMEs participated in
99%SME Week 2016 to rally Singapore
consumers to buy SME products
and services, a

50%

increase from 2015

Our Digital Citizenship
programmes taught digital
literacy to

60,000

students in Australia
and Singapore

Singapore Telecommunications Limited | Annual Report 2017

Board of Directors

SIMON ISRAEL

• Non-executive and non-independent

Director

• Chairman, Singtel Board
• Chairman, Finance and Investment

Committee

• Member, Corporate Governance and

Nominations Committee

• Member, Executive Resource and

Compensation Committee

• Member, Optus Advisory Committee
• Date of appointment: Director on 4 Jul
2003 and Chairman on 29 Jul 2011

• Last re-elected: 29 Jul 2016
• Number of directorships in listed
companies (including Singtel): 3

Mr Simon Israel, 64, is the Chairman of Singapore Post Limited and a
Director of Fonterra Co-operative Group Limited and Stewardship Asia
Centre CLG Limited. He is also a member of the Governing Board of Lee
Kuan Yew School of Public Policy and Westpac’s Asia Advisory Board.
Simon is a former Director of CapitaLand Limited and Stewardship Asia
Centre Pte. Ltd.

Simon was an Executive Director and President of Temasek Holdings
(Private) Limited before retiring on 1 July 2011. Prior to that, he was
Chairman, Asia Paciﬁ c of the Danone Group. Simon also held various
positions in Sara Lee Corporation before becoming President (Household
& Personal Care), Asia Paciﬁ c.

Simon was conferred Knight in the Legion of Honour by the French
government in 2007 and awarded the Public Service Medal at the
Singapore National Day Awards 2011. He holds a Diploma in Business
Studies from The University of the South Paciﬁ c.

• Executive and non-independent

Director

• Member, Optus Advisory Committee
• Date of appointment: Director on

12 Oct 2006 and Group Chief Executive
Offi cer (CEO) on 1 Apr 2007

• Last re-elected: 21 Jul 2015
• Number of directorships in listed
companies (including Singtel): 2

Ms Chua Sock Koong, 59, was appointed Group CEO on 1 April 2007. She
has overall responsibility for the Group’s businesses.

Sock Koong joined Singtel in June 1989 as Treasurer before becoming
Chief Financial Offi cer (CFO) in April 1999. She held the positions of
Group CFO and CEO, International from February 2006 to 12 October
2006, when she was appointed Deputy Group CEO.

Sock Koong 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 Research, Innovation and Enterprise Council, the Singapore
Management University Board of Trustees and the Public Service
Commission.

Sock Koong holds a Bachelor of Accountancy (First Class Honours) from
the University of Singapore. She is a Fellow Member of the Institute of
Singapore Chartered Accountants and a CFA charterholder.

CHUA SOCK KOONG

VENKY GANESAN

LOW CHECK KIAN

• Non-executive and independent

Director

• Member, Finance and Investment

Committee

• Member, Technology Advisory Panel

• Date of appointment: 2 Feb 2015
• Last re-elected: 21 Jul 2015
• Number of directorships in listed
companies (including Singtel): 1

Mr Venkataraman (Venky) Ganesan, 43, is one of the Managing Partners
of Menlo Ventures, a 41-year-old top-tier Silicon Valley venture capital
ﬁ rm. He focuses on investments in the consumer and enterprise sectors.
Venky sits on the boards of several portfolio companies of Menlo Ventures,
namely, Avi Networks, Inc., BitSight Technologies, Inc, Breather Products
Inc., Dedrone Inc., Machine Zone, Inc., OverOps Inc. (formerly known as
Takipi, Inc.), Rover, Inc., Unravel Inc., UpCounsel Inc. and Waterline Data
Science, Inc. He is also a Board member of Amobee, Inc., a wholly-owned
subsidiary of Singtel.

Prior to joining Menlo Ventures, Venky was a Managing Director at
Globespan Capital Partners. Before Globespan, he was one of the
founders of Trigo Technologies. He also worked at McKinsey & Company
and Microsoft as a Program Manager. He is the former Chairman of the
National Venture Capital Association and a former Director of Gild, Inc.,
Handle, Inc., Palo Alto Networks Inc, Strong View, Inc and Virident Systems
(acquired by Western Digital Corporation).

Venky holds a Bachelor of Arts in Economics-Mathematics from Reed
College and a Bachelor of Science in Engineering and Applied Science
(Honours) from the California Institute of Technology in the US.

• Non-executive and Lead Independent

Director

• Chairman, Corporate Governance and

Nominations Committee

• Member, Finance and Investment

Committee

• Date of appointment: Director on 9 May
2011 and Lead Independent Director on
21 Jul 2015

• Last re-elected: 25 Jul 2014
• Number of directorships in listed
companies (including Singtel): 2

Mr Low Check Kian, 58, is a Director of Cluny Park Capital. He was
previously one of the founding partners of NewSmith Capital Partners
LLP (NewSmith), an independent partnership providing corporate ﬁ nance
advice and investment management services with its headquarters based
in London. Prior to founding NewSmith, he was a Senior Vice President
and Member of the Executive Management Committee of Merrill Lynch &
Co and its Chairman for the Asia-Paciﬁ c region.

Check Kian also sits on the boards of Broadcom Limited, Singtel
Innov8 Pte. Ltd. and Singtel Innov8 Holdings Pte. Ltd., and is a trustee
of the Singapore London School of Economics Trust and the Nanyang
Technological University. He was a Director of Neptune Orient Lines
Limited and Fullerton Fund Management Company Ltd.

Check Kian holds a B. Sc (First Class Honours) and M. Sc in Economics
from the London School of Economics.

Singapore Telecommunications Limited | Annual Report 2017

Board of Directors

PETER MASON AM

• Non-executive and independent

Director

• Chairman, Executive Resource and

Compensation Committee

• Chairman, Optus Advisory Committee

• Date of appointment: 21 Sep 2010
• Last re-elected: 29 Jul 2016
• Number of directorships in listed
companies (including Singtel): 2

Mr Peter Mason, 70, is the Chairman of AusNet Services Limited and
a Senior Advisor to UBS Australia. He is a Trustee of the Sydney Opera
House Trust and the Chairman of the Centre for Independent Studies.

Peter has more than 40 years’ experience in investment banking,
including JP Morgan and Schroders. He has been Chairman and a Director
of a number of Australian companies.

Peter is a Member of the Order of Australia. He holds a Bachelor of
Commerce (First Class Honours), an MBA and an Honorary Doctorate
from The University of New South Wales, Australia.

• Non-executive and independent

Director

• Member, Audit Committee
• Member, Corporate Governance and

Nominations Committee

• Date of appointment: 7 Apr 2014
• Last re-elected: 29 Jul 2016
• Number of directorships in listed
companies (including Singtel): 3

Mrs Christina Ong, 65, is Co-Chairman and Senior Partner of Allen &
Gledhill LLP as well as Co-Head of its Financial Services Department.
She is a Director of Oversea-Chinese Banking Corporation Limited, SIA
Engineering Company Limited, Singapore Tourism Board, Trailblazer
Foundation Ltd and Epimetheus Ltd. Christina is a member of the Catalist
Advisory Panel and also a trustee of The Stephen A. Schwarzman Scholars
Trust. She also sits on the boards of companies and entities which are
owned by Allen & Gledhill LLP.

Christina is a lawyer and she provides corporate and corporate regulatory
and compliance advice, particularly to listed companies. Her areas of
practice include banking and securities.

Christina holds a Bachelor of Laws (Second Upper Class Honours) from
the University of Singapore. She is a member of the Law Society of
Singapore and the International Bar Association.

CHRISTINA ONG

PETER ONG

TEO SWEE LIAN

• Non-executive and non-independent

Director

• Member, Audit Committee
• Member, Risk Committee

• Date of appointment: 1 Sep 2010
• Last re-elected: 25 Jul 2014
• Number of directorships in listed
companies (including Singtel): 1

Mr Peter Ong, 55, is the Head of Singapore’s Civil Service and Permanent
Secretary (Strategy) in the Prime Minister’s Offi ce. He previously held the
positions of Permanent Secretary in the Ministry of Finance, the National
Security and Intelligence Co-ordination Secretariat, Ministry of Trade and
Industry, Ministry of Transport and Ministry of Defence. Prior to that, he was
an Executive Vice President of Temasek Holdings (Private) Limited.

Peter currently sits on the boards of the Monetary Authority of Singapore,
the National Research Foundation and Calvary Community Care. He was
the Chairman of the Inland Revenue Authority of Singapore and a Director
of the ASEAN+3 Macroeconomic Research Offi ce.

Peter was conferred the Meritorious Service Medal (Pingat Jasa Gemilang)
at the Singapore National Day Awards 2010. He was also conferred the
(Honorary) Knight of the Most Distinguished Order of the Crown by the
Yang di-Pertuan Agong Malaysia XIV in June 2012 (with the title of “Tan Sri”).

Peter holds a Bachelor of Economics (Honours) from the University of
Adelaide, Australia and an MBA from Stanford University, US.

• Non-executive and independent

Director

• Chairman, Risk Committee
• Member, Audit Committee
• Member, Executive Resource and

Compensation Committee

• Date of appointment: 13 Apr 2015
• Last re-elected: 21 Jul 2015
• Number of directorships in listed
companies (including Singtel): 2

Ms Teo Swee Lian, 57, is a non-executive and independent Director of AIA
Group Ltd (AIA) and a member of AIA’s Nomination Committee and Risk
Committee. She is also a non-executive and independent Director of Avanda
Investment Management Pte Ltd (Avanda), and is Chairman of Avanda’s
Audit and Risk Committee. Swee Lian is also a member of the Corporate
Governance Council formed by the Monetary Authority of Singapore (MAS).

Swee Lian was Special Advisor in the Managing Director’s Offi ce at the MAS
until she stepped down in early June 2015. Prior to that, she was the Deputy
Managing Director in charge of Financial Supervision at the MAS, where she
oversaw macroeconomic surveillance, regulation and supervision of the
banking, insurance and capital markets industries in Singapore. During her
time with MAS, she also worked in reserves management, development,
external relations and strategic planning. Swee Lian was also a member of
the Singapore Exchange Diversity Action Committee.

Swee Lian was awarded the Public Administration Medal (Gold) (Bar) at the
Singapore National Day Awards 2012. She holds a B. Sc (First Class Honours)
in Mathematics from Imperial College, London University and a M. Sc in
Applied Statistics from Oxford University.

Singapore Telecommunications Limited | Annual Report 2017

Board of Directors

BOBBY CHIN

• Non-executive and independent

Director

• Chairman, Audit Committee
• Member, Risk Committee

• Date of appointment: 1 May 2012
• Last re-elected: 21 Jul 2015
• Number of directorships in listed
companies (including Singtel): 4

Mr Bobby Chin, 65, is a member of the Council of Presidential Advisers
and the Chairman of the Housing & Development Board, NTUC Fairprice
Co-operative Limited and NTUC Fairprice Foundation Ltd. He is the
Deputy Chairman of NTUC Enterprise Co-operative Limited. He serves on
the boards of the Singapore Labour Foundation and Temasek Holdings
(Private) Limited. He is also a Director of several listed companies, namely
Yeo Hiap Seng Limited, Ho Bee Land Limited and AV Jennings Limited.

Bobby was the Managing Partner of KPMG Singapore from 1992 until his
retirement in September 2005. He was a Director of Oversea-Chinese
Banking Corporation Limited, SembCorp Industries Ltd and Singapore
Power Limited.

Bobby holds a Bachelor of Accountancy from the University of Singapore.
He is an associate member of the Institute of Chartered Accountants in
England and Wales.

NOTE:
Bobby was appointed to the Board of Temasek Holdings (Private) Limited (Temasek),
the major shareholder of Singtel, on 10 June 2014. After due consideration, Bobby
continues to be regarded as independent as he does not represent Temasek on the
Singtel Board and he is not accustomed or under an obligation whether formal or
informal, to act in accordance with the directions, instructions or wishes of Temasek.
As Bobby has demonstrated independence in character and judgement in the discharge
of his responsibilities, the Singtel Board is satisﬁ ed that he will continue to exercise
independent judgement and act in the best interests of Singtel and its security
holders generally.

Note:
Information as at 17 May 2017.

Organisation Structure

With effect from 1 April 2017

GROUP CHIEF
EXECUTIVE OFFICER
Chua Sock Koong

GROUP
BUSINESSES

CHIEF EXECUTIVE OFFICER
CONSUMER AUSTRALIA /
CHIEF EXECUTIVE OFFICER
OPTUS

Allen Lew

CHIEF EXECUTIVE OFFICER
CONSUMER SINGAPORE

Yuen Kuan Moon

CHIEF EXECUTIVE OFFICER
GROUP ENTERPRISE /
COUNTRY CHIEF OFFICER
SINGAPORE

Bill Chang

CHIEF EXECUTIVE OFFICER
GROUP DIGITAL LIFE

Samba Natarajan

CHIEF EXECUTIVE OFFICER
INTERNATIONAL

Arthur Lang

CORPORATE
FUNCTIONS

AUDIT COMMITTEE

GROUP CHIEF
INTERNAL AUDITOR

Chor Khee Yang

GROUP CHIEF
CORPORATE OFFICER

Jeann Low

GROUP CHIEF
FINANCIAL OFFICER

Lim Cheng Cheng

GROUP CHIEF
HUMAN RESOURCES OFFICER

Aileen Tan

GROUP CHIEF
INFORMATION OFFICER

Wu Choy Peng

GROUP CHIEF
TECHNOLOGY OFFICER

Mark Chong

Singapore Telecommunications Limited | Annual Report 2017

Management Committee

CHUA SOCK KOONG

Ms Chua Sock Koong, 59, was appointed Group Chief Executive Offi cer on 1 April 2007.
She has overall responsibility for the Group’s businesses.

Sock Koong joined Singtel in June 1989 as Treasurer before becoming Chief Financial
Offi cer in April 1999. She held the positions of Group CFO and CEO, International from
February 2006 to 12 October 2006, when she was appointed Deputy Group CEO.

Sock Koong 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 Research, Innovation and
Enterprise Council, the Singapore Management University Board of Trustees and the
Public Service Commission.

Sock Koong holds a Bachelor of Accountancy (First Class Honours) from the University
of Singapore. She is a Fellow Member of the Institute of Singapore Chartered
Accountants and a CFA charterholder.

Mr Bill Chang, 50, was appointed Chief Executive Offi cer, Group Enterprise on 16 July
2012. He leads the team that provides infocomm and technology (ICT) solutions to
enterprise customers. He also assumed the role of Country Chief Offi cer Singapore on
1 October 2014, and is the principal liaison with local and regulatory bodies.

Bill joined Singtel on 15 November 2005 as Executive Vice President of Corporate
Business and later assumed the role of Managing Director, Business Group.

Bill is the Chairman of the Singapore Polytechnic Board of Governors. He also co-
chaired the Future Jobs and Skills sub-committee of the Committee on the Future
Economy of Singapore. He was conferred the Singapore Computer Society’s IT Leader
of the Year award in 2017 and the honorary Fellow of the society in 2014 for his
contributions to Singapore’s IT industry.

Bill graduated with a Bachelor of Engineering (Honours) in Electrical and Computer
Systems Engineering from Monash University, Australia.

Mr Mark Chong, 53, was appointed Group Chief Technology Offi cer on 1 April 2017.
He leads the Group’s technology strategy and innovations in the transformation of
its networks and businesses across Singapore and Australia. Prior to his appointment,
Mark was CEO, International.

Mark joined Singtel in 1997 and has held various executive positions in the company
including the roles of EVP (Networks) in Singapore and Chief Operating Offi cer of
Advanced Info Service Public Company Limited (AIS), Singtel’s associate in Thailand.

Mark has represented Singtel on the Boards of public listed companies such as Globe
Telecom, Bharti Infratel, CSLox (Thailand) and other non-listed companies such as
OpenNet. He is currently the Chairman of Bridge Alliance.

He graduated with a Bachelor of Electronics Engineering and Master in Research in
Electronic Systems from ENSERG, Grenoble, France, on a Singapore Government
scholarship. Mr Chong also obtained his MBA from the National University of
Singapore. He is a senior fellow with the Singapore Computer Society.

BILL CHANG

MARK CHONG

ARTHUR LANG

ALLEN LEW

Mr Arthur Lang, 45, joined Singtel on 9 January 2017, as Chief Executive Officer,
International (Designate) and became Chief Executive Officer, International on
1 April 2017. His main responsibilities are to oversee the growth of the Group’s
regional associates across India, Indonesia, the Philippines and Thailand, strengthen
its relationship with overseas partners, and drive regional initiatives for scale and
synergies.

Prior to joining Singtel, Arthur was Group Chief Financial Officer of CapitaLand Limited,
where he directly oversaw the functions of treasury, ﬁnancial reporting and controls,
risk management, strategic projects, tax, investor relations and private equity fund
management. As Group CFO of CapitaLand, Arthur received the Best CFO of the Year
Award for listed companies with market capitalisation of S$1 billion and above at the
Singapore Corporate Awards 2015.

Prior to CapitaLand, Arthur was at Morgan Stanley where he was co-head of the
Southeast Asia investment banking division and prior to that, Chief Operating Officer of
the Asia Paciﬁc investment banking division.

Arthur is a board member of Globe Telecom, Bharti Infratel Limited, NetLink Trust, the
Land Transport Authority of Singapore and the National Kidney Foundation.

Arthur holds an MBA from Harvard Business School and a Bachelor of Arts in
Economics (magna cum laude) from Harvard University.

Mr Allen Lew, 62, was appointed Chief Executive Officer, Consumer Australia and Chief
Executive Officer, Optus on 1 October 2014.

Prior to that, Allen was CEO, Group Digital Life and also Country Chief Officer Singapore.

Allen began his career with Singtel on 7 November 1980 and has served in various
senior management roles both in Singapore and overseas. His ﬁrst overseas posting
was to Advanced Info Service Public Company Limited (AIS), Singtel’s regional
associate. He was the Chief Operating Officer of AIS for three years before his posting
to Optus in late 2001, as Managing Director of Optus Mobile and later as Managing
Director of Optus Consumer Business. He returned to Singapore as CEO Singapore
in 2006.

Allen is the Chairman of the AIS Executive Committee.

He holds a Bachelor of Electrical Engineering from the University of Western Australia
under a Colombo Plan Scholarship and a Master of Science (Management) from the
Massachusetts Institute of Technology, US.

Singapore Telecommunications Limited | Annual Report 2017

Management Committee

LIM CHENG CHENG

Ms Lim Cheng Cheng, 45, is Group Chief Financial Offi cer. She assumed this role on
10 April 2015 and is responsible for the Singtel Group’s ﬁ nance-related functions
including tax, treasury and investor relations.

Cheng Cheng has over 23 years of experience in ﬁ nance and mergers and acquisitions.
She joined Singtel in 2012 as Vice President, Group Strategic Investment and was
appointed Deputy GCFO on 1 October 2014. Prior to that, she was Managing Director,
Group Strategic Investments.

Before joining Singtel, Cheng Cheng was Executive Vice President and CFO at SMRT
Corporation. She also worked at Singapore Power for 10 years in various corporate
planning, investments and ﬁ nance roles, the last of which was Head and Vice President
(Financial Planning and Analysis). She started her career with PricewaterhouseCoopers.

Cheng Cheng was appointed as a non-executive, non-independent director at
SingPost on 1 April 2017.

Cheng Cheng holds an MBA from the University of Chicago Booth School of Business
(formerly known as University of Chicago Graduate School of Business) and a Bachelor
of Accountancy from Nanyang Technological University. She is a Chartered Accountant
(Singapore) of the Institute of Singapore Chartered Accountants.

Ms Jeann Low, 56, was appointed Group Chief Corporate Offi cer on 10 April 2015.
She is responsible for the Group’s corporate functions including strategy, mergers and
acquisitions, corporate communications, legal, regulatory and procurement.

Prior to this role, she was Group Chief Financial Offi cer for seven years.

Jeann joined Singtel on 12 October 1998 as Group Financial Controller and has held
several management roles including Executive Vice President of Strategic Investments
and CFO of Optus.

Jeann is a member of the Governing Board of the Lee Kong Chian School of Medicine.
She is also a Director of Advanced Info Service Public Company Limited (AIS) and
Intouch Holdings Public Company Limited.

Jeann holds an Honours Degree in Accountancy from the National University of
Singapore and is a Fellow Member of the Institute of Singapore Chartered Accountants.

JEANN LOW

SAMBA NATARAJAN

Mr Samba Natarajan, 51, is Chief Executive Offi cer, Group Digital Life. He joined Singtel
in May 2014 as Managing Director of Digital Enterprise, leading a team focused on
identifying and executing on growth opportunities from emerging technology trends.

Samba has more than 25 years of corporate and consulting experience across a wide
range of senior roles in the areas of strategy, business development and ﬁ nance. He
worked for Citibank from 1988 to 1997 and McKinsey & Company from 1999 to 2014.
In his last role at McKinsey, he was the Leader of Southeast Asia Technology, Media &
Telecommunications practice.

Samba serves on the Board of Directors of Globe Telecom in the Philippines. He is also a
member of the Board of the Singapore American School.

Samba holds a Bachelor of Engineering degree in Electrical Engineering with distinction
from the Birla Institute of Technology and Science in Pilani, India; a Post Graduate
Diploma in Management from the Indian Institute of Management in Ahmedabad, India,
and an MBA from the Wharton School, University of Pennsylvania, USA where he was a
Ford Fellow and a Palmer Scholar.

AILEEN TAN

Ms Aileen Tan, 50, is Group Chief Human Resources Offi cer, responsible for the
development of human resources across the Singtel Group. She also leads its
corporate sustainability function.

Aileen joined Singtel on 2 June 2008 as Group Director, Human Resources. Prior to
that, she was Group General Manager, Human Resources at WBL Corporation Limited
and Vice President, Centres of Excellence with Abacus International Pte Ltd.

Aileen is the Chairperson of Workforce Singapore’s National HR Professional
Certiﬁ cation Taskforce and co-chairs the Ministry of Manpower’s HR Sectoral Tripartite
Committee. She is a member of the Media Literacy Council and also a member of
the Institute for Human Resource Professionals Board and the Home Nursing
Foundation Board.

Aileen graduated with a Bachelor of Arts from the National University of Singapore.
She also holds a Master of Science in Organisational Behaviour from the California
School of Professional Psychology, Alliant International University, US.

Singapore Telecommunications Limited | Annual Report 2017

Management Committee

WU CHOY PENG

Ms Wu Choy Peng, 52, joined Singtel as Group Chief Information Officer on 6 August
2012. She is responsible for driving the Group’s IT vision and roadmap to establish
excellence in technology management.

Prior to joining Singtel, Choy Peng was Group CIO of Neptune Orient Lines Group and
Chief Information Officer of the Singapore Government.

Choy Peng is a member of the National University Health System (NUHS) Board and the
Chairperson of the NUHS Information Technology (IT) Committee.

Choy Peng holds a Bachelor of Science (Honours with Highest Distinction) in
Computer/Communication Science and Mathematics, and a Master of Science in
Computer Science/Engineering, both from the University of Michigan, US.

YUEN KUAN MOON

Mr Yuen Kuan Moon, 50, was appointed Chief Executive Officer, Consumer Singapore
on 1 June 2012. He is responsible for leading the Singapore consumer business to
deliver a complete and integrated suite of services, including mobile, broadband and
TV solutions to consumers.

Moon began his career with Singtel on 1 February 1993 and has over 20 years of
experience in the consumer business, including Marketing, Business Development,
Retail and Channel Sales. He has held several leadership roles, including Vice President
of Regional Operations and Executive Vice President of Digital Consumer.

Earlier in his career, Moon was posted to PT Telekomunikasi Selular (Telkomsel),
Singtel’s regional associate, as General Manager for Product Development in 2003 and
was appointed Director of Commerce from 2005 to 2007. He has served on the Board
of Commissioners in Telkomsel since 2009.

Moon was appointed to the Board of SkillsFuture Singapore on 3 October, 2016.

Moon graduated with a First Class Honours degree in Engineering from the University
of Western Australia. He also holds a Master of Science in Management from Stanford
University, US.

Senior Management

CHIA WEE BOON
Chief Executive Offi cer
NCS
Group Enterprise

HUI WENG CHEONG
Chief Operating Offi cer
AIS

MURRAY KING
Chief Financial Offi cer
Optus

ROBERT J. MCCULLEN
Chief Executive Offi cer & President
Trustwave
Group Enterprise

JOHN PAITARIDIS
Managing Director
Optus Business
Group Enterprise

KIM PERELL
Chief Executive Offi cer
Amobee
Group Digital Life

WILLIAM WOO
Managing Director
Enterprise Data & Managed Services
Group Enterprise

Singapore Telecommunications Limited | Annual Report 2017

Group
Consumer

We are here to ensure devices come to life in your
hands. We invest in networks, spectrum and new
technologies to keep powering your digital lifestyles.
We offer new ways to access a rich variety of content
and deliver it ever faster. And we are working to furnish
your future with even more smart conveniences, just
the way you would want it. For those who need a
little help to get into the digital game, we have also
developed community programmes that extend the
beneﬁts of connectivity to everyone.

JOSHUA SIM BOON HONG
Singtel Creative Lead, Associate Director

Joshua Sim is a lead volunteer with Singtel’s Savvy Silvers
programme which is designed to enrich the lives of our
senior citizens with technology. Seniors enrol in the
programme to pick up skills such as the taking and sending
of photographs with their mobile phones. Joshua ﬁ nds
volunteering rewarding because of his own experience of
teaching his parents to plug into the digital world. When his
mother ﬁ nally learned how to play Candy Crush and watch
YouTube videos on her iPad, he could feel her joy and sense
of accomplishment. Now he wants others in her generation
to feel the same sense of empowerment.

Singapore Telecommunications Limited | Annual Report 2017

Group Consumer
Singapore

Our customers’ increasingly connected lifestyles have produced a transformation at
Singtel. Against this backdrop, we have embraced digital, coming up with new offerings
that will enhance our customers’ lives at home, at work and on the go.

We are focusing on delivering data-centric plans, innovative digital services and
differentiated content underpinned by seamless, secure and high-speed connections to
serve our customers in today’s digital world and tomorrow’s connected future.

the service from ﬁve to 31 countries
across the Asia Paciﬁc, Europe, USA
and Canada.

CREATING NEW SERVICES FOR
DIGITAL LIFESTYLES
To enrich our customers’ connected
lifestyles, we have created a range of
digital services from entertainment
and mobile payments to smart living
which can be conveniently accessed
from their smart devices.

We introduced Singtel Newsstand,
another data-free service following
the popularity of Singtel Music. Singtel
Newsstand offers digital subscriptions

to leading local and international
news publications such as The Straits
Times, The Wall Street Journal, The
Economist and 12 leading Singapore
Press Holdings lifestyle magazines.
We also brought the big screen to our
customers’ mobile devices with the
launch of CAST, our OTT video portal
app, so they can watch their favourite
shows on the go.

Singtel Dash, our all-in-one mobile
payments app, is leading the way for
mobile payments in Singapore and
has crossed 500,000 registered users.
It offers in-store and online retail
payments, transit payments and top-

IMPROVING CONNECTIVITY FOR
CUSTOMERS
We are offering our customers
ﬂexibility and greater value when
it comes to their data plans. A big
highlight was a new data add-on
called DataX3 for postpaid customers
to enjoy triple their data and a 1-for-1
data add-on offer for customers on
SIM Only plans.

As we connect customers at home
and on the go, Singtel has achieved
many ﬁrsts along the way. Last
year, our customers were the ﬁrst
in Singapore to enjoy seamless
call connectivity and crystal-clear
conversations with WiFi Calling.
We gave our ﬁbre broadband
customers extra value on their plans
by extending Singtel WiFi access
to them. Along with our mobile
customers, they now enjoy free and
unlimited data usage at more than
1,000 Singtel WiFi hotspots across
Singapore.

We introduced ReadyRoam,
Singapore’s ﬁrst multi-destination
data roaming service, offering
customers a convenient and
affordable way to stay connected
on their travels. ReadyRoam was an
instant hit and we quickly expanded

What the media said
“Simply put, there is no such thing as too much data. And
Singtel gets it, because they’ve just launched DataX3 ... which
will triple your mobile data allowance.” – Janine Lee, Stuff.tv

Gan Siok Hoon, VP, Retail & Channel Sales of Consumer Singapore (left), and Yuen Kuan Moon, Consumer Singapore CEO, launching
Singtel Dash, Singapore's ﬁrst all-in-one mobile payments solution.

What the media said
“Singtel ups the ante in fragmented mobile payment market.”
– Jacquelyn Cheok, The Business Times

ups, and secure, real-time mobile remittance
such as the service with Telkomsel which lets
customers send money to 4,500 remittance
cash-out points across Indonesia.

In the home, we introduced a smart lifestyle
solution, Singtel SmartHome, which lets
users securely monitor and manage their
home wherever they are. Powered by Singtel
ﬁbre broadband, Singtel SmartHome can
connect with over 200 compatible smart
devices, helping busy Singaporeans live more
comfortably and safely through technology.

To offer customers even more convenience
at home, HungryGoWhere, our food portal,
added online delivery and takeaway services
to its existing reservations service.

DEMONSTRATING NETWORK
SUPERIORITY
We deepened our commitment to
provide customers with faster speeds and
wider connections with the nationwide
deployment of our 450Mbps 4G LTE-
Advanced service, Singapore’s fastest mobile
network. The performance of our mobile
and ﬁbre broadband networks have come

Singapore Telecommunications Limited | Annual Report 2017

Group Consumer
Singapore

out tops in the Info-communications
Media Development Authority’s
reports. We achieved Singapore’s
widest LTE coverage for a record 10
consecutive quarters while our ﬁbre
broadband speeds are consistently
rated as one of the fastest.

We continue on our Journey to 5G,
deploying key pre-5G technology
such as Massive MIMO and NB-
IoT. We also made 5G innovation a
reality with the ﬁrst 5G showcase in
Southeast Asia last year, demonstrating
ground-breaking peak throughputs
of 27.5Gbps and latency as low as
2 milliseconds. With our successful
acquisition of spectrum in April 2017,
we will be able to expand and evolve
our network to support the growth

of the Internet of Things and 5G
initiatives in the future.

BOOSTING CUSTOMER EXPERIENCE
Recognising that many of our
customers prefer using online channels
to engage us at their convenience,
we have stepped up our digitalisation
efforts. We introduced new features
such as Visual IVR (Interactive Voice
Response) and Message Us on My
Singtel App to augment our self-help
options. We have also integrated
our online and offline channels to
provide customers with a seamless
experience no matter which channel
they choose to start interacting with
us and continue with. One innovation
is Collect@Store which enables
customers to purchase their device

on singtelshop.com and then pick the
item up at any Singtel Shop on the
same day.

We connect customers of all age
groups to activities that interest them
and give them new experiences. These
include exclusive live performances
by music stars Jessie J and Nathan
Hartono, and events for children such
as Dream Big, Princess Academy. To
help seniors to develop the skills and
conﬁdence to use digital technology,
we conduct regular Singtel Silvers
workshops and events such as the
Silver Photography Extravaganza,
which teaches them basic smartphone,
social media and photography skills
so that they can participate in the
digital world.

What the media said
"Singtel's move [to 5G] ties in with the government's 'smart
nation' vision aiming for total connectivity for a safer, more
efficient society through optimal use of data."
– Mayuko Tani, Nikkei Asian Review

From left: Martin Wiktorin, Country Head of Singapore and Brunei, Ericsson; Tay Soo Meng, Singtel Group Advisor; Khoong Hock Yun, Assistant
Chief Executive (Development), IMDA; Yuen Kuan Moon, Singtel Consumer Singapore CEO; and Magnus Ewerbring, CTO, Asia Paciﬁc, Ericsson
celebrating the opening of the 'Making 5G Innovation A Reality' showcase.

Group Consumer
Australia

Optus is responding to the evolving needs of our customers by growing our business
beyond the traditional telecommunications company model into a mobile-led multimedia
content provider. In 2016 we embarked on a transformation to deliver on this ambition,
offering game-changing experiences for customers via our products and services.

Allen Lew, Optus CEO, launching Optus Sport

Customers have watched
almost

13m

hours of Premier League and
international football content
on Optus Sport

DELIVERING BETTER PRODUCTS
AND SERVICES
Optus broke new ground as a
telecommunications provider in
Australia with the launch of Optus
Sport, a 24/7 sports channel with
on-demand and live multi-screen
capability to broadcast the Premier
League. Since the launch, customers
have watched almost 13 million hours
of Premier League and international
football content including live matches,
highlights and expert analysis.

movies and music, at home or on
the go, without worrying about their
data allowance.

With this in mind, Optus introduced
data-free music and content
streaming in selected prepaid and
postpaid plans so our customers can
enjoy their favourite entertainment
from our streaming partners,
including Netﬂix, Stan, ABC iView,
Spotify, Pandora, iHeart Radio, and
Google Play.

We are delivering more than just
sport, and we know our customers
want the freedom to stream TV,

We have seen the best half of
branded growth in eight years since
the introduction of these product

Singapore Telecommunications Limited | Annual Report 2017

Group Consumer
Australia

The Optus ﬁxed network
was rated

#1 for
19

consecutive months on the
Australian Netﬂix ISP
Speed Index

offerings, with our mobile customer
base reaching 9.72 million users.

Recognising the diverse needs of our
customers, we also have products
and plans to suit a wide range of
lifestyles, including improved Mobile
Broadband plans offering great value
and generous data inclusions, and the
Home Wireless Broadband solution
providing connectivity via the Optus
4G network.

In addition, we are continuing to ﬁnd
extra value for our customers through
innovation, with the release of Optus
Xtra by our in-house innovation team
at Yes Labs. Optus Xtra is an Android-

based app which allows prepaid
customers to earn extra data or
credit by viewing tailored ads on their
smartphone.

INVESTING IN OUR NETWORK
A quality network underpins
everything we offer. Our commitment
to continually improve our network
has received independent recognition
from leading industry benchmarks.
The 2016 P3 CommsDay Mobile
Benchmark rated the Optus network
No. 1 for voice, and the Optus ﬁxed
network was rated No. 1 for 19
consecutive months on the Australian
Netﬂix ISP Speed Index (September
2015 to March 2017).

Our 4G Plus Network expanded
further into regional Australia
using the newly acquired 1800MHz
spectrum band. The network now
reaches 96.1% of the Australian
population.

We secured A$26.4 million in funding
as part of the Federal Government’s
Mobile Black Spots Programme
and will contribute a further A$36.4
million to provide connectivity to
thousands of people across regional
and rural Australia.

Our networks also support incredible
growth for mobile virtual network
operator clients, making us the
leading mobile network wholesale
service provider in the Australian
market.

TRANSFORMING CUSTOMER
SERVICE
Just as the way our customers are
using their devices has changed,
so too have their support needs.
We have made it easier for them to
engage with us by enhancing our
online customer service platforms
such as Live Chat, My Optus App and
My Account to see and pay bills, add

social media content featuring
Australian Olympic swimmer Ian
Thorpe inside the athletes village
providing a unique look at the event
as it happened.

These campaigns proved popular
with Australians, and delivered
impressive results including
more than 44 million uses of the
#FanUpAUS hashtag and 16.4 million
content views via the Optus social
media channels.

services to their accounts, and access
support functionality including live
chat assistance.

we have also refocused on delivering
tailored small and medium business
solutions via specialist in-store and
call centre support resources.

The volume of interactions through
these channels has grown, indicating
the increasing preference for digital
engagement. This means Optus
call centres are freed up to respond
to customers with more complex
enquiries. There has been a 10%
reduction in the volume of calls to
support centres in FY 2017 as a result of
the focus on digital customer support.

With a growing customer base,
the Optus customer service teams
operate around the clock. In the
last 12 months, 79% of 134 million
customer interactions occurred in
digital channels – a 2% growth over
the previous year.

Recognising that the needs of
Australia’s more than two million
small business owners are different
to the traditional business customer,

EXCITING OUR CUSTOMERS
Optus is engaging with our customers
through the things that interest and
excite them. Through partnerships
with major sporting organisations
such as the Australian Olympic
Committee, Australian Paralympic
Committee and Swimming Australia
prior to the Rio 2016 Olympic and
Paralympic Games, we established
our credentials as a supporter of
Australian sport and are developing
strong links with the sport-loving
Australian community.

During the Games, the award-winning
#FanUpAUS campaign helped deliver
45,398 messages of support to
Australian athletes via social media.
Our Australian Olympic Committee
partnership allowed exclusive access
behind the scenes to create unique

Singapore Telecommunications Limited | Annual Report 2017

"Competition is not new to us.
To stay at the top of our game,
we keep our customers at the
centre of our strategy."

The CEO
Conversation

YUEN KUAN MOON
CEO, CONSUMER SINGAPORE

Innovating around
customer experience

In the dynamic world of telecommunications,
the only constant is change. How do Singtel
and Optus navigate the challenging terrain
and keep customers happy? Consumer
Singapore CEO Yuen Kuan Moon and Optus
CEO Allen Lew share their insights.

Allen: The impact that digital companies have had in
Australia is to increase the plethora of personal applications
for consumers and small and medium businesses on their
mobile devices. This implies that Optus has to deliver the
best mobile network quality in terms of speed and reliability.
In addition, the customer has to be at the front and centre
of everything we do and we have to deliver on our pledge
to provide them with an exceptionally good customer
experience in our stores, on the phone, online and in our
app. Engaging us through an app is becoming increasingly
important in the era of the mobile internet and it’s an area
of increasing focus for us especially with the commissioning
of our new customer care and billing system.

How has digital disruption impacted your market in
recent years?

Moon: There’s been a dramatic shift in our customers’
lifestyle needs and the way they engage us. They’re
connected all the time, wherever they are. We’re seeing
an accelerated shift from voice as they consume more
data than ever before. So we’ve been actively digitalising
our business and innovating, not just in the products and
services we off er but also in the way we sell and serve to
reﬂ ect today’s digital lifestyles. There are many exciting
opportunities for us to create value and reinvent our
relationship with customers. We want them to see us as
enablers. We want them to feel empowered through the
technology and services that we provide.

We’ve seen both Optus and Singtel make signiﬁ cant
investments in content in the last two years. Tell us
about your content strategy.

Moon: The reality is that globally, content has gone
online, and is consumed on the go. We’re no longer just
looking at linear delivery now since our customers have
a big appetite for online entertainment. The way they
experience content is now multiscreen. We’ve set out to
establish partnerships with traditional and non-traditional
content providers to off er a wider range of entertainment
options to our customers across TV and mobile devices.
There’s also CAST, our video portal app, which gives
customers the ﬂ exibility to choose individual content
packs. Besides video, we look to enrich our customers’
experience with other content such as music and news
that they want.

"Our goal is to build a
digital organisation that
provides converged ﬁ xed,
mobile and video services
by using deep insights into
customer behaviour and
business fundamentals
to create a sustainable
competitive advantage."

ALLEN LEW
CEO, OPTUS

Allen: Premium video content is important to us because
it has the power to create distinctiveness for us in a
competitive market. It has been a catalyst for the improved
performance of the consumer broadband business and
has been instrumental in elevating our brand position.
I believe the combination of good content and an
advanced network with technology that is designed and
built for the unique needs of video are essential pillars to
ensure Optus has sustained proﬁ table revenue growth.

Competition is heating up in both your markets. How
do Singtel and Optus view competition?

Moon: Competition is not new to us. To stay at the top
of our game, we keep our customers at the centre of our
strategy. We adapt to their lifestyle needs and preferences
and focus on off ering them a diff erentiated experience.
Innovation is key to set ourselves apart so we’re
continuing to invest in our ﬁ xed and mobile networks, and
in technology such as artiﬁ cial intelligence and predictive
analytics to get a better handle on what our customers
want. We’re also optimising our platform and processes to
ﬁ nd innovative and more effi cient ways of getting things
done and passing on savings to our customers.

Allen: We welcome competition because it provides choice
for customers and gives us the impetus to continually
innovate and improve our products and services and the
way we do things. Optus has a formidable set of assets,
such as our unrivalled spectrum holdings, the quality of
our people and the expertise in the Singtel Group. We will

use these, together with our focus on delivering a great
customer engagement, a high quality mobile network and
transforming our cost structure, to ensure we stay ahead in
this intensely price-competitive market.

What can consumers look forward to from Singtel and
Optus in the near future?

Moon: We’re focusing on data centricity – what else our
customers can use data for, and how we can deliver the
best mobile data experience. With our strategic investment
in spectrum at the recent spectrum auction, we’ll be able
to extend our network leadership and support the growth
of IOT and 5G initiatives in the future.

Allen: Our goal is to build a digital organisation that
provides converged ﬁ xed, mobile and video services
by using deep insights into customer behaviour and
business fundamentals to create a sustainable competitive
advantage. Customers can expect continued investment
by us in our network so we can innovatively deliver greater
capacity and faster speeds. In addition, we will raise our
standards so we can enable our customers’ digital lives
with the most personalised services, the most innovative
integrated products and the best customer experience.
In short, our goal is to deliver surprise and excitement
beyond their expectations for our customers and
proﬁ table growth for our investors.

Singapore Telecommunications Limited | Annual Report 2017

Group Consumer
Regional Associates

There is a data revolution going on in the emerging markets, fuelled by the availability of
affordable smartphone devices. Our regional associates are riding the wave by innovating
to deliver new experiences, creating new lines of business beyond traditional mobile
services, and investing in spectrum and future-ready networks. As a Group, we are
fostering closer collaboration with our associates to gain a stronger competitive edge in
the region’s rapidly evolving telco landscape.

SERVING INCREASINGLY DIGITAL
LIFESTYLES
Across our associates’ markets, the
biggest growth has been in data,
as consumers embrace connected,
digital lifestyles. The number of data
subscribers surged past 220 million
– a 12% increase from the previous
year. For many of our customers,
the mobile phone is a primary way
for them to access the internet, and
digital services are driving social and
ﬁnancial inclusion in ways that were
never possible before.

Mobile payments have proved popular
in these emerging markets, where a
large part of the population does not
have credit cards or bank accounts.
In order to capitalise on this trend,
our associates now offer a range
of banking and ﬁnancial services to
support their customers’ needs. In
India, Airtel became the ﬁrst entity to
receive a payments bank licence from
the Reserve Bank of India. In January
2017, it launched Airtel Payments
Bank to offer banking services across
the country, with 250,000 Airtel
retail outlets doubling as banking
points and a network of over 1 million
merchants accepting digital payments.

In the Philippines, Globe’s wholly
owned subsidiary, Mynt, has partnered
Ant Financial Services Group, one of
the world’s leading digital ﬁnancial
services providers, to accelerate

ﬁnancial inclusion and upgrade
payments services in the Philippines.
This includes the use of GCash, a
micropayment service, to top up
pre-paid balances, pay bills, send
money, make donations, shop online
and purchase goods without the use
of cash. By leveraging the power of
mobile and digital technology, Mynt
has been able to pioneer initiatives
that provide Filipinos with safe, secure
and convenient ﬁnancial services that
were previously not available to them.

As mobile entertainment consumption
continues to enjoy exponential
growth, our associates are offering
exclusive content to differentiate
themselves. In the Philippines, Globe
created Globe Studios and Globe
Live, which are revolutionising the
entertainment landscape in the
Philippines with the production of
original shows from top ﬁlm directors

and world-class live entertainment
events. In another ﬁrst for Globe, it
partnered Netﬂix to offer customers
access to a wide range of TV shows
and movies via their mobile or
broadband service. In Thailand,
AIS signed exclusive deals with
HBO and NBA to offer content to
customers over the AIS Play mobile
app, and AIS Playbox service for the
latter. AIS also acquired the rights
to 21 Fox channels on AIS Play
and Playbox to further strengthen
their suite of content offerings.
In Indonesia, Telkomsel launched
VideoMAX, a service which gives
customers access to thousands of
premium movies and TV series on
demand from HOOQ and Viu, directly
on their smartphones and tablets.

With more customers spending longer
hours on their smartphones each
day, our associates are also ﬁnding

innovative ways to engage their
customers by positioning their mobile
apps as lifestyle tools. In India, Airtel
re-launched its My Airtel App to offer
customers 2GB of free cloud storage
to store their data, and a dialler to
manage their calls. Globe’s Switch and
Telkomsel’s LOOPkita apps come with
data management features to improve
the data experience for ﬁrst-time
users by allowing them to control
their usage. Each app also serves as
a convenient channel for customers
to recharge their prepaid balance,
upgrade their subscription plans and
discover new content or data services.

Globe has launched Gie, a virtual
assistant available over Viber and
Facebook Messenger, to enable
one-on-one conversations with
customers. Since its launch, employee
productivity has increased threefold,
along with a 50% reduction in calls to
Globe's call centres.

Singapore Telecommunications Limited | Annual Report 2017

Group Consumer
Regional Associates

What the media said
"Singtel's Intouch, Bharti Telecom deals promise long-term
beneﬁts" – Amit Choudhury, The Business Times

INVESTING IN SPECTRUM AND
FUTURE-READY NETWORKS
To meet the growing demand for
faster and more reliable data services,
our associates are boosting their
3G and 4G network quality and
capacity. Airtel India, AIS and Globe
have acquired more spectrum to
improve network coverage and
user experience. In Thailand, AIS
has expanded its coverage to 98%
since the launch of 4G in 2016 and
introduced VoLTE for crystal clear
voice service. Airtel now has 4G
coverage in all 22 circles in India,
giving it the widest mobile broadband
footprint in the country. In the

Philippines, Globe has been expanding
its 4G coverage and capacities,
including the roll-out of 500 LTE700
sites while in Indonesia, Telkomsel
has 22 million LTE subscribers as of
March 2017.

ENHANCING GROUP
COLLABORATION
Collaboration is key to our
engagements with our associates,
and in 2016, we deepened our
relationships with Airtel and AIS
through an acquisition of shares
in Bharti Telecom and Intouch
Holdings. We work together closely
through the Centres of Excellence

framework, which provides a platform
to exchange ideas on innovations,
product strategies and operational
best practices. Some of the initiatives
include our Regional CEO Forum,
Product Innovation Fair, joint
negotiation for devices and SIM
cards, as well as our ﬁrst regional
video competition, "The 5-Min
Video Challenge".

Content is a signiﬁcant part of our
Group's strategy to connect with
our customers. "The 5-Min Video
Challenge" represents our efforts to
drive content creation and innovation
across our markets by nurturing and

giving talented ﬁlm makers a platform
for their creative vision, while giving
our mobile subscriber base new
original content. The inaugural
competition attracted a rich variety
of original content with close to 600
video submissions, and the shortlisted
entries drew over 1 million views.
We hope to work with the newly

discovered talent and their ideas on
future projects for the Group’s mobile
and video platforms, such as Globe
Studios and AIS Play.

Our collaborative efforts in the region
also extend to sharing a payment
gateway for the Group – the Singtel
Open Platform. The Singtel Open

Platform is a common payment
gateway for Singtel, Optus and
our regional associates. This one-
stop shop signiﬁcantly reduces the
integration effort and time for our
business partners. Customers can
also conveniently pay for services
through direct carrier billing and
mobile wallets.

What the media said
“Why ﬁve minutes? Because that reﬂects the current online
video trend where short-form content dominates the mobile
market. Users demand content that can be consumed on the
go. The competition was designed to represent this change.”
– Chanon Wongsatayanont, The Nation

Simon Israel, Singtel Chairman (far left), Ririek Adriansyah, Telkomsel CEO (second from left), and Chua Sock Koong, Singtel Group CEO
(right), presenting prizes to the grand winner of "The 5-Min Video Challenge", team Rotasi from Indonesia.

Singapore Telecommunications Limited | Annual Report 2017

Group
Enterprise

For most businesses today, a strong online presence
is a prerequisite for success. Singtel provides
enterprises with global connectivity 24/7 by
harnessing the powers of our core ICT services while
our focus on cyber security keeps out unwanted
connections. We have also been expanding our
cloud capabilities and devising smart city solutions
to help government agencies and companies in
their own digital transformation. Starting out small?
You can still dream big with our raft of initiatives to
encourage technology adoption and networking
opportunities that cater to the needs of small and
medium businesses.

LOW FANG LING
Sales Manager, Group Enterprise

Wei Chan, the CEO of Pine Garden, dreams of turning his
family-run chain of cake shops into what he calls “new
old-school bakeries”. After learning about the 99%SME
programme, which helps small businesses to maximise
their online potential, he placed promotions of his fresh
cream cakes on its website and was pleased with the
exposure. Fang Ling is encouraged by his experience, and
eagerly shares with other SMEs the beneﬁ ts of expanding
their customer base by moving online and tapping into the
power of e-commerce.

Singapore Telecommunications Limited | Annual Report 2017

Group Enterprise

Today’s enterprises and governments are adopting secure, high-speed uniﬁed
communications, mobility and digital solutions to improve the way they operate and
engage with their customers in the digital economy. Singtel is building successful
partnerships with enterprises, large and small, to support their digital transformation
through our core ICT services and strategic focus areas of cloud, cyber security and smart
city solutions.

STRENGTHENING OUR CORE ICT
CAPABILITIES
As ICT traffic grows, we continue to
invest in building out and enhancing
our networks to deliver seamless,
high-speed global connectivity to
our customers.

We expanded our global coverage
to 370 points of presence in 325
cities across the world through
a partnership with our regional
associate, Airtel.

The combined network is the largest
Internet Protocol Virtual Private
Network (IP VPN) in the Asia Paciﬁc.

We are also leading a consortium to
build a new 9,000-kilometre INDIGO
submarine cable (formerly known as
APX-West) linking Singapore, Jakarta
(Indonesia), and Perth and Sydney
(Australia). Once completed in mid-
2019, it will expand data connectivity
and capacity between Singapore
and Australia, providing network

redundancy and low latency. This will
allow us to meet the growing demand
for bandwidth-intensive applications
such as uniﬁed communications and
enterprise data exchange.

EXPANDING OUR CLOUD SERVICES
The demand for cloud services is
steadily growing as enterprises seek
to transform their business processes
and models for the speed, agility and
efficiency that they need in today’s
digital economy.

What the media said

“Over the past few years, Singtel has also been very shrewd in
investing in a bunch of cyber security companies, the latest
being Trustwave, and making alliances with others. This has
already had a positive impact on its Group Enterprise business
and this impact will only grow.” – Amit Choudhury,
The Business Times

We added a suite of hybrid cloud
solutions, including the Data Centre
and Cloud Connect (DC Connect)
service, to cater to enterprises
requiring both the easy scalability
afforded by the public cloud, and
the improved security and control of
a private cloud. With DC Connect,
enterprises can easily access and
seamlessly move their workloads
between multiple data centres and
various cloud services through a
single connection. This enables them
to build a hybrid cloud environment
where they can shift the mix between

public and private clouds according
to their business priorities.

cyber expertise and expanding our
global cyber network.

BOLSTERING OUR CYBER SECURITY
EXPERTISE
As enterprises and governments
transform themselves in the digital
space, they also need to protect
themselves against cyber threats
which are growing in frequency and
sophistication.

In the past year, we focused on
developing a comprehensive cyber
ecosystem by strengthening our

We established the NUS-Singtel
Cyber Security R&D Lab with the
National University of Singapore. This
collaboration allows us to conduct
research into next-generation cyber
security technologies which are based
on data analytics, machine learning
for automatic detection of cyber
attacks, and tamper-proof encryption
techniques over the next ﬁve years.
The facility, which is supported by
the National Research Foundation,
will train 120 new cyber security R&D

Singapore Telecommunications Limited | Annual Report 2017

Group Enterprise

professionals from undergraduate to
postdoctoral level. It will also develop
intellectual property that can be
commercialised through our global
network of product engineering and
development centres.

We launched the Optus Advanced
Security Operations Centre (ASOC)
in Sydney, Australia, and we will

soon operate a new ASOC in Tokyo,
Japan. The two centres add to our
existing global network of seven
ASOCs which monitor cyber threats
round the clock, help enterprises
build cyber resilience and protect
their critical infrastructure. Trustwave,
our cyber security arm, provides
managed security services, including
comprehensive threat intelligence,

threat data analytics, and advanced
security automation for incident
response, backed by its elite
SpiderLabs team. We also partnered
our regional associate Globe to
provide managed security services in
the Philippines. The services will be
delivered through Globe’s ASOC in
Manila, which will be powered
by Trustwave.

We set up the Singtel Cyber Security
Institute in Singapore. Our advanced
cyber range and educational institute
is the ﬁrst of its kind in the region to
provide holistic training for company
boards, management, and technology
and operations personnel to deal with
cyber attacks.

ENABLING THE SMART CITY VISION
As cities grow, city planners
increasingly recognise that cities
need to be smart and sustainable
to overcome the attendant
environmental, economic and social
challenges. They rely on smart
technology solutions for the efficient
and effective delivery of public
services, better traffic management,
and a safer home and living
environment.

In Singapore, we support the
country’s vision of becoming the
world’s ﬁrst Smart Nation by 2025
with our advanced capabilities in
smart city operating platforms,
data analytics and agile application
development. These capabilities
are being deployed in a number of

What the media said

“In the last two years, Singtel has accelerated efforts to
grow the business – securing partnerships with global big
names, and launching new facilities in cyber security. It is
approaching the ﬁeld of cyber security in trailblazer fashion.”
– Jacquelyn Cheok, The Business Times

What the media said

“SMEs in Singapore are getting a little digital love from DBS
Bank and major telco Singtel ... they’re launching a bunch of
resources meant to help small businesses with e-commerce
and cashless payments.” – Michael Tegos, TechInAsia

areas, including urban infrastructure,
transport, healthcare and public safety.

Following our winning bid in early
2016 to deliver a next-generation
Electronic Road Pricing system for
the Land Transport Authority, we
scored a signiﬁcant contract with
the Housing & Development Board
(HDB) to develop a blueprint for smart
HDB towns of the future under the
Smart Urban Habitat Masterplan,
and a Smart Hub intelligent analytics
and data platform. With more than
80% of Singapore’s population living
in public housing, this will help the
HDB to enhance the planning, design
and management of public housing
estates, to create a more conducive
and sustainable urban environment.

More than 120 major malls now use
these services to deliver personalised
content and improve the shopping
experience for their customers.

EQUIPPING SMES IN THE DIGITAL
ECONOMY
Small and medium enterprises (SMEs)
are the bedrock of the Singapore
economy, accounting for 99% of all
registered businesses. To help SMEs
evolve and connect with increasingly
digital-savvy consumers, we launched
99%SME in 2015, a ﬁve-year campaign
to spur the adoption of digital
technologies. Digitalisation will
enable SMEs to increase productivity,
reduce staff workload, improve
customer experience and reach
new customers.

2015. The campaign rallied consumers
across Singapore to buy SME products
and services through year-round
promotions on the dedicated 99%SME
website and shop at participating
stores during a 10-day 99%SME Week.

We partnered online shopping
website Lazada Singapore to launch
a 99%SME e-marketplace, which
provides SMEs with an online
marketing platform to reach a wider
audience. We also collaborated with
two polytechnics in Singapore –
Nanyang Polytechnic and Singapore
Polytechnic – to train SMEs in
the retail and food and beverage
sectors to use tools and resources
to get online, establish e-commerce
capabilities and to market themselves
more effectively.

In Australia, we are rolling out smart
retail WiFi services at Vicinity Centres’
81 shopping centres and six corporate
offices, as well as property group
Mirvac’s ﬂagship shopping centres.

The second year of the campaign
focused on encouraging SMEs to
adopt e-commerce and cashless
solutions. More than 2,500 SMEs
signed up in 2016, up from 1,670 in

Singapore Telecommunications Limited | Annual Report 2017

The CEO
Conversation

BILL CHANG
CEO, GROUP ENTERPRISE

Why cyber security is
a must-have

With cyber attacks on the rise, what can
companies do to protect themselves and
their assets? We talk to Group Enterprise
CEO Bill Chang about overcoming today’s
security challenges.

Cyber breaches can aff ect operations, cause the loss of
intellectual property or market-sensitive information,
reputation and even enterprise value.

How should company leaders get involved?

Bill: For starters, board members have to work closely
with top management to understand the value of the
company’s data, the associated risks and impact of losing
key data within their overall enterprise risk management
framework. They also need to understand how their data
is being protected and who has access to it. This way, they
can make accurate cyber risk assessments and implement
appropriate defence strategies.

Incidents of cyber attacks are well-reported, but far less
is known about how companies can defend themselves.
What should they be doing?

Next, they should assess cyber security capabilities within
the company to ensure there is enough bench strength
to mitigate the cyber risks. The reality is few boards and
management have such expertise.

Bill: Almost every day, the media uncovers a new massive
data breach or cyber security incident. Most cyber attacks
involve cross-border criminal activities and can take place
anytime. So it’s really a question of when a cyber breach
will occur, not if.

While everyone accepts this, many companies still
don’t quite know where to start in terms of protecting
themselves and are simply not doing enough. In fact,
many are still leaving cyber security to their technical
staff . We believe leadership from the top is essential.
Everyone needs to know what the risks are and what they
should do to manage risk eff ectively. A lot is at stake here.

Are there training sessions that can help build up such
expertise?

Bill: Yes. Company leaders need to invest in training in
areas such as risk assessment and mitigation. They also
need training in crisis management and communications,
which are crucial in today’s world of instant news and
active social media.

But classroom training can only do so much. You need
highly realistic simulations where board members, C-suites
and technical staff are made to work together to manage

"Everyone needs to know what the risks are and what they
should do to manage risk effectively. A lot is at stake here.
Cyber breaches can affect operations, cause the loss of
intellectual property or market-sensitive information,
reputation and even enterprise value."

BILL CHANG
CEO, GROUP ENTERPRISE

a cyber incident. This is the true test of a company’s cyber
preparedness. We’ve been conducting such simulations
at the Singtel Cyber Security Institute, which was set up
to educate and train companies to better handle cyber
breach incidents.

This trend of engaging MSSPs has already caught on
globally. We have seen more and more companies taking
up partnerships with cyber security ﬁrms to install, monitor
and maintain their cyber defence systems. Singtel’s cyber
security arm, Trustwave, has reported that the number of
companies worldwide that are partnering MSSPs has risen
from 24% in 2015 to 33% in 2017.

How do they foster cyber security awareness among
their staff too?

Bill: Cyber resilience requires active participation by all
members of staff. Company directors and top management
need to create a culture of cyber preparedness and sound
security practices. Given how quickly cyber threats evolve,
they also need to regularly review and update their cyber
defence strategies across all levels of their operations.
This means ensuring adequate funding and resources to
support such strategies.

Top management should also examine their organisations’
supply chain, to assess the cyber risk posed by their
contractors and suppliers. The negligence and lapses of
supply chains have been known to contribute to serious
breaches as well.

What about companies that lack the resources to focus
on cyber capabilities?

Bill: With cyber threats increasing in frequency, scale and
sophistication, the reality is no single company or country
can address these cyber threats alone. Many companies
also lack the manpower to maintain an effective 24/7
cyber defence. The good news is, they can tap on the
resources and capabilities of credible managed security
services providers (MSSPs) that are global, have highly-
trained cyber security professionals and offer real-time
intelligence on cyber threats.

MSSPs themselves collaborate with global providers of
cyber security technology solutions. This gives companies
the convenience of dealing with only one party instead of
multiple providers, each offering its solution to only one
particular form of cyber threat.

What other services can managed security services
providers provide companies with?

Bill: Our cyber security solutions and services cover
everything a company needs before, during and after
a cyber breach. Managed advanced threat prevention
and threat protection for a comprehensive range of
endpoint devices and DDoS protection are just some of
the solutions we offer. Our services include cyber security
readiness assessment, vulnerability and penetration
testing, incident response and forensic investigation.

The cyber security industry as a whole is facing a
shortage of trained professionals. What can companies
do if they need staff in this area?

Bill: It’s true that there is a severe shortage of trained
cyber security professionals around the world, not just in
Singapore. Some ways to address this is to retrain mid-
career IT staff in cyber security, or partner institutions
of higher learning to sponsor students in cyber security
studies. They can also provide internship opportunities.

But the grooming process takes time. Singtel has been
working closely with various government agencies and
educational institutions to boost our force of more than
2,000 cyber security professionals globally.

We also launched the NUS-Singtel Cyber Security R&D
Lab last year to conduct research on next-generation
cyber security technologies, a facility that will no doubt be
cultivating and attracting top security talent to Singapore.

Singapore Telecommunications Limited | Annual Report 2017

Group
Digital Life

Constant change in the data-driven digital space
affects everything we do, from how we reach our
customer base to how our movies are accessed.
Thanks to Singtel’s strides in the digital arena, help
is at hand to make sense of the evolving landscape.
Singtel provides marketers with industry-leading
digital marketing services, brand insights and a
global tech platform so they can plan more effective
campaigns for their dollar. We are also a catalyst for
innovation, thanks to special funds and programmes
we created to celebrate new ideas and facilitate R&D
in emerging technologies.

MONICA TSAI

Director, Singtel Innov8

When the chance came up to be a mentor for the Singtel
Future Makers programme, Monica’s hand shot up for
the role. The programme was launched in 2016 to fuel
tech innovation and collaboration on projects with social
impact, and Monica knew that many start-ups could
beneﬁ t from access to business workshops, partner
network and funding. Through the programme, she met
Aashish Mehta of tech start-up Medarwin, which designed
an automated drying system for the elderly and the
physically challenged to do their laundry easily.

Singapore Telecommunications Limited | Annual Report 2017

Group Digital Life

Singtel is capturing opportunities in the digital economy by leveraging our telco strengths
in three focus areas: digital marketing, premium over-the-top (OTT) video, and advanced
data analytics and intelligence. We also drive innovation through our corporate venture
capital fund Singtel Innov8, which nurtures tech start-ups and emerging technologies and
further fuels our digital expansion.

GROWING OUR DIGITAL
MARKETING CAPABILITIES
The rapid increase in the number
of digital channels, platforms and
devices has changed the way we
consume information, engage with
brands and make decisions. This
creates the need for solutions to
make sense of it all for marketers too.

Amobee, our digital marketing arm,
offers ways for companies to increase
the efficiency and effectiveness of
their advertising strategies across
multiple, disparate and competing
media platforms. The largest of
Singtel's digital subsidiaries, Amobee,
has been securing key global clients
such as Airbnb, Dell EMC and Lexus.

To strengthen its technological
edge in digital advertising, Amobee
acquired Turn, a leading data
management platform and
multi-channel programmatic
media buying platform, in the ﬁrst
half of 2017. Amobee now offers
marketers an independent end-to-
end advertising and data management

What the media said

“In the digital arena, Singtel has transformed itself into a
communications powerhouse with the ability to successfully
navigate a data-centric world. Its three-pronged focus on
digital marketing through its Amobee unit, over-the-top
video entertainment through its HOOQ mobile streaming
service, as well as data analytics via its DataSpark unit, is
complementary to its core and infocomms technology
businesses.” – Jennifer Tan, SGX Kopi-C

platform across all channels, formats
and devices, access to proprietary
Amobee Brand Intelligence insights
to inform their creative development
and media strategies, as well as
advanced analytics and media
planning capabilities.

Customers are thus empowered
to plan and buy media for speciﬁc
audiences in an integrated fashion,
which optimises their advertising
spend across the different platforms.
The acquisition will solidify Amobee’s

position as a leading global digital
marketing player and continued
expansion in Asia Paciﬁc.

Amobee also introduced innovative
solutions across mobile, social
and video. It launched Amobee
Impact, an award-winning suite
of mobile products that enables
brands and agencies to engage
customers by delivering immersive,
full-sensory ad formats and feature-
driven experiences. Amobee Video
Everywhere delivers video campaigns

across all channels and devices
from one uniﬁed platform. Amobee
Interactive Video dynamically creates
and customises the digital video
experience for each consumer, on
every device, based on demographic,
behavioural, weather, time and
location data.

Amobee also extended its social
media channels to include
Snapchat, adding to its existing Ads
API partnerships with Facebook,
Instagram, Pinterest and Twitter.

Singapore Telecommunications Limited | Annual Report 2017

Group Digital Life

This puts Amobee among an elite
group of companies globally which
have Ads API partnerships across all
major social media platforms.

streaming service is now available
in ﬁve markets: Indonesia, India,
the Philippines, Thailand and most
recently, Singapore.

WIDENING OUR CONTENT
OFFERINGS
With the continued proliferation
of affordable mobile devices, more
consumers across Asia are becoming
connected and spending more
time watching online video content
whenever they want to.

HOOQ, Singtel’s joint venture with
Sony Pictures and Warner Bros.
Entertainment, has steadily grown
its subscriber base on the back of
this soaring demand. The video

HOOQ offers affordable access to
over 30,000 hours of the best of
Hollywood and local content. A new
app design with faster loading times,
a better way to discover content,
and other enhanced features was
introduced last year.

With its aim of becoming the largest
OTT provider in the Asia Paciﬁc,
HOOQ has been forging close
collaborations with our regional
associates and other partners,
building the largest catalogue of kids

content in Asia and making a deeper
push into localisation. Signiﬁcantly, it
ventured into original, local content
creation with the announcement of a
full-length feature ﬁlm, followed by
a ﬁve-part mini-series of the critically
acclaimed crime thriller movie
On The Job in the Philippines. Both
the feature ﬁlm and mini-series
will be available exclusively on
the HOOQ platform in the second
half of 2017. HOOQ has plans for
original productions in Indonesia and
Thailand too.

HOOQ also launched a new movie
rental service which allows customers
to catch Hollywood blockbusters
such as Rogue One: A Star Wars

What the media said
“With this continued rise in mobile phone usage, HOOQ rebuilds
its app, and presents an interface that’s been redesigned for a
truly intuitive mobile experience.” – Isah V. Red, Manila Standard

Story, Passengers and Arrival from
major studios including Sony Pictures,
Warner Bros. and Disney as soon
as three months after theatrical
release. This service is now available
in the Philippines, India, Indonesia
and Thailand. Additionally, existing
customers in the Philippines,
Indonesia and Thailand can also enjoy
one free movie rental per month as
part of their monthly subscription.

SCALING OUR DATA ANALYTICS
BUSINESS
Location and mobility data is being
used to transform how government

agencies and businesses interact and
deliver services to their citizens and
customers.

With spatial elements present in
about 80% of all enterprise data, more
and more government agencies and
business are tapping into the power
of the geospatial analytics capabilities
of DataSpark, our advanced analytics
business. The useful insights
generated from anonymised and
aggregated data has drawn great
interest from a broad range of
industries, including real estate,
ﬁnancial services, marketing and

digital, and it is deploying its products
in markets beyond Singapore,
including Australia, Indonesia,
Thailand and the Philippines.

DataSpark continues to invest in
deepening its technical capabilities
to improve the availability, accuracy
and latency of its location insights
and expanding its range of mobility
intelligence products and services.
It has ﬁled four more geoanalytics
patents and started to make its
mobility intelligence accessible via
APIs and SDKs.

Upcoming plans include channel
partnerships with other analytics
companies to expand its product
coverage and establish a stronger
commercial presence in the region
and Australia.

DRIVING TECH INNOVATION
We focus relentlessly on innovation
to drive growth.

Singtel Innov8, our corporate venture
arm, connects with innovation hubs
globally for new ideas, technology,
products and services and introduces
startups with great vision, technology,
and execution ability to the Group.

Since its establishment in 2010,
Innov8 has invested in over 65
companies globally in various
verticals including cyber security,
digital marketing, mobile video and
big data. In addition, Innov8 has
been supporting local Singapore
startups including Shopback, an
online cashback rewards platform,
and Carro, Southeast Asia’s largest
car marketplace. Innov8 has also had
a number of successful exits from
its portfolio companies, the latest of
which was Tubemogul which was
acquired by Adobe last year.

Singapore Telecommunications Limited | Annual Report 2017

The CEO
Conversation

SAMBA NATARAJAN
CEO, GROUP DIGITAL LIFE

Eyeing the global digital
marketing pie

Digital marketing is seeing good growth as
marketers shift advertising online to reach
consumers with increasingly digital lifestyles.
Group Digital Life CEO Samba Natarajan
shines a light on current digital marketing
trends and how Amobee is poised to help
marketers navigate the rapidly changing
landscape.

How has the digital marketing landscape been evolving
in recent years?

How have marketers responded to these changes in
consumer behaviour?

Samba: I’ve seen many marketers start to adopt an omni-
channel and multi-screen approach to advertising, unlike
the single channel and screen approach that they've
been accustomed to. They’re also increasingly using
programmatic ad buying instead of negotiated ad buying.
What we refer to as “programmatic” is the automated
process of purchasing and running digital ad campaigns,
mainly in real-time. It helps marketers to reach the right
audience with the right message at the right time and in
the right place. That’s why programmatic is the future
of advertising.

When it comes to mobile advertising, I expect it to
continue to grow rapidly as consumers increasingly shift
their time online to mobile devices. But it is video in
particular that will grow faster than any other format over
the next few years. This will be driven by a robust demand
for mobile video as social platforms become video-centric.

Samba: Digital advertising as we know it is very diff erent
from a few years ago. Mobile devices have become
pervasive and that has changed the way we consume
information and interact. Consumers like you and I
constantly switch between several connected devices
daily to do things. It has become second nature to start
off on one device, such as picking up your smartphone to
get information on a product, then continue to another to
make a purchase. So marketers have to think diff erently
about how they engage customers with multiple devices.

These changes to the advertising ecosystem sound
complex. What can marketers do to better navigate the
challenges?

Samba: You’re right to say that the digital advertising
ecosystem is going to continue to get more complex,
especially with the ever-growing number of devices, apps,
ad formats and media channels. Marketers are already
grappling with disparate systems and budgets across
diff erent platforms, and trying to ﬁ gure out how it all adds

"No matter the channel, marketers want to know how
and where their budgets are spent, and how to do so most
effectively. Amobee will continue to be that trusted adviser
to marketers, helping them make sense of data to better
understand and reach their customers, and enhance the way
they engage them, on a global scale."

SAMBA NATARAJAN
CEO, GROUP DIGITAL LIFE

up. Few can manage it in-house because they lack the
capabilities and talent.

What they really need are experts who can serve as
consultant, strategist, media buyer and trader all rolled
into one, to distil this complicated landscape and help
them innovate and execute campaigns and react to
the data in real-time. This is the value that Amobee can
bring to marketers. Amobee, which is Singtel’s global
digital marketing arm, can empower customers to make
unbiased, data-driven decisions, and achieve a better ROI
across the entire internet and all media.

How exactly does Amobee ensure that ad campaigns
reach the right customers?

Samba: As consumers switch between devices, they
expect their information searches and viewing experiences
to keep up with them. They also want advertising that is
personally relevant – the right ad at the right time and
place. Data enables marketers to make connections
between the channels and provide these personalised
experiences to consumers. With this data, Chief Marketing
Officers can gain a much deeper understanding of real
time and historical consumer sentiment, media behaviour,
brand associations and competitive insights, all of which
are used to inform everything from strategy to media
buying, creative and content development and delivery of
digital advertising for brands.

What was the most signiﬁcant development for Amobee
customers in the past year?

Samba: Earlier this year, Amobee acquired Turn, a
global technology platform. This is an exciting, strategic
investment for us and we believe it will help marketers
solve the challenges they face and bring greater beneﬁts.

This acquisition strengthens Amobee’s existing
programmatic and data management capabilities in

the rapidly evolving market of digital advertising and
accelerates its growth into a signiﬁcant global digital
marketing player. Amobee now offers customers
an independent end-to-end advertising and data
management platform across all programmatic channels,
formats and devices. And this is over and above proprietary
Amobee Brand Intelligence insights, as well as advanced
analytics and media planning capabilities. Experienced
marketers will know that there are few independent
buy-side platforms in the world that provide such a
comprehensive range of capabilities.

What this means for marketers is that they now have
access to more resources and technical capabilities,
deeper consumer insights and media strategy, and all the
beneﬁts of a uniﬁed buying platform with expert strategists
for support. More importantly, they can think about buying
ad media holistically instead of in silos.

What lies ahead for digital marketing and Amobee in
the next three years?

Samba: Our priority is for Amobee to continue to innovate
and grow its presence across channels and expand into
the Asia Paciﬁc, where the Singtel Group reaches some
640 million customers across 22 countries. One of
Amobee’s strongest strategic assets is the independence
and objectivity that comes with not owning media, and
this signiﬁcantly differentiates it from the competition.
No matter the channel, marketers want to know how and
where their budgets are spent, and how to do so most
effectively. Amobee will continue to be that trusted adviser
to marketers, helping them make sense of data to better
understand and reach their customers, and enhance the
way they engage them, on a global scale.

Singapore Telecommunications Limited | Annual Report 2017

Key Awards and Accolades

BUSINESS EXCELLENCE

SINGTEL

2016 FROST & SULLIVAN ASIA PACIFIC ICT
AWARDS
• Telecom Group of the Year
• Telco Cloud Service Provider of the Year

2016 FROST & SULLIVAN SINGAPORE
EXCELLENCE AWARDS
• Fixed Broadband Service Provider

of the Year

• Managed Security Service Provider

of the Year

2016 SINGAPORE MEDIA AWARDS
• Best Use of Media

ASIA COMMUNICATION AWARDS 2016
• Best Customer Care: Business
• Satellite Operator of the Year

CCAM NATIONAL CONTACT CENTRE
AWARDS 2016
• Best Recruitment & Retention Programme

– Gold

HALL OF FAME AWARDS 2016
• Mobile Marketing Campaign of the Year –

PEX NETWORK GLOBAL AWARDS 2017
• Best Project Contributing to Customer

Gold (Singtel Firecracker)

Excellence – Honorary Mention

HWM + HARDWAREZONE.COM TECH
AWARDS 2017
• Best Telco (Singapore)
• Best Fibre Broadband Service Provider

(Singapore)

NETWORKWORLD ASIA INFORMATION
MANAGEMENT AWARDS
• Disaster Recovery & Business Continuity

(2014 – 2016)

• Security-as-a-Service (2012 – 2016)

NETWORKWORLD ASIA READERS’
CHOICE PRODUCT EXCELLENCE AWARDS
• Managed Infrastructure Services
(2012 – 2016)

NXT AWARDS 2016
• Readers’ Choice ‘Broadband ISP of the Year

2016’

NCS

COMPUTERWORLD SINGAPORE
CUSTOMER CARE AWARDS
• Systems Integration (2014 – 2016)

KNOWLEDGE READY ORGANISATION
AWARD 2016

MOB-EX AWARDS 2017
• Best Campaign (Informative Use of Mobile)

– Silver (BETTER mobile app)

• Best Campaign (Direct Response) – Silver

(BETTER mobile app)

AMOBEE

2016 IMEDIA ASPY AWARDS
• Best Industry Innovation – Amobee Brand

PROCESS EXCELLENCE AWARDS 2017
• Best Business Transformation Project –

Intelligence

CCAS INTERNATIONAL CONTACT CENTRE
AWARDS 2016
• Best Contact Centre Trainer of the Year –

Gold

• Innovative Productivity Solution in a

Winner

• Best Project Contributing to Customer

Excellence – Winner

• Best Technology Enabled Process
Improvement – Honorary Mention

Contact Centre (Predictive Routing) – Gold

• Best Project Under 90 Days – Honorary

2016 MEDIAPOST OMMA AWARDS
• Programmatic Creative – Lexus

Performance Mobile 3D Campaign

FORTUNE MAGAZINE TOP 10
WORKPLACES IN ADVERTISING &
MARKETING

IMA IMPACT 16 AWARDS
• Best Analytics and Measurement

Technology – Amobee Brand Intelligence

HOOQ

Mention

• Best Operational Excellence Programme

Over Two Years – Honorary Mention

PROMAXBDA ASIA AWARDS 2016
• Best Use of Design – Gold
• Best Movie Promo and Best Sports

Campaign – Silver

WORLD COMMUNICATION AWARDS 2016
• Best Enterprise Service – ConnectPlus SD-

2016 TRANSFORM AWARDS ASIA PACIFIC
• Best Visual Identity (Technology, Media and

Telecommunications) – Gold

DBA DESIGN EFFECTIVENESS
AWARDS 2017
• Media Category – Silver

WAN

OPTUS

2016 ACOMM AWARDS
• Best Mobile Solutions
• Vendor Innovation (Large Company)

AUSTRALIAN OLYMPIC COMMITTEE
INSPIRATION AWARDS 2016
• Gold Inspiration Award for Excellence in

Olympic Marketing

• Innovative Productivity Solution in a
Contact Centre (Visual IVR) – Gold

CREATIVE CIRCLE AWARDS 2016
• Best Cinematography

(Singtel Data ExStream)

• Social/Viral Video Category – Winner

(Singtel Data ExStream)

• Best in Mobile (Singtel Firecracker)
• Mobile Websites Category – Winner

(Singtel Firecracker)

COMPUTERWORLD HONG KONG
AWARDS 2016
• Global WAN Connectivity Services Provider

COMPUTERWORLD SINGAPORE
CUSTOMER CARE AWARDS
• Telecommunication Services (2008 – 2016)
• VOIP/IP Telephony Systems (2015 – 2016)

GLOBAL CARRIER AWARDS 2016
• Project of the Year – Subsea Networks

(SEA-ME-WE 5)

CORPORATE CITIZENSHIP

REGIONAL ASSOCIATES

SINGTEL

AIRTEL

BRAND EQUITY’S MOST TRUSTED
BRANDS 2016
• No. 1 Service Brand in India
• 3rd Most-Trusted Brand in India

GOLDEN PEACOCK AWARD 2016
• Excellence in Corporate Governance

CORPORATE TREASURER AWARDS 2016
• Best Hedging Strategy

AIS

IAA AWARDS 2016
• CEO Excellence Award

BEST EMPLOYEE THAILAND AWARDS 2016
• Best of the Best Employer Award

THAILAND’S TOP CORPORATE BRANDS
2016
• Telecom Sector

GLOBE

2017 ASIA-PACIFIC STEVIE AWARDS
• Innovation in Annual Reports – Gold

ASIA CORPORATE EXCELLENCE &
SUSTAINABILITY AWARDS 2016
• Top CSR Advocates in Asia

ASIAMONEY BEST MANAGED
COMPANY POLL 2016
• Best Managed Large Cap Company in

Singapore

ASIA SUSTAINABILITY REPORTING
AWARDS 2016
• Asia’s Best Community Reporting

CDP 2016

COMMUNITY CHEST AWARDS 2016
• Corporate Platinum Award
• SHARE Corporate Gold Award
• Special Events Platinum Award

EUROMONEY BEST MANAGED
COMPANIES SURVEY 2016
• Best Overall Managed Company in

Singapore

2016 FROST & SULLIVAN ASIA PACIFIC ICT
AWARDS
• Telecom Service Provider of the Year

FINANCEASIA ASIA’S BEST COMPANIES
POLL 2016
• Best Managed Company in Singapore

2016 FROST & SULLIVAN PHILIPPINES
EXCELLENCE AWARDS
• Mobile Service Provider of the Year
• Telecom Service Provider of the Year

FINANCEASIA ASIA’S BEST COMPANIES
2016
• Most Committed to Corporate Governance
• Best in Investor Relations
• Best CEO – Ernest Cu

TELKOMSEL

2016 FROST & SULLIVAN ASIA PACIFIC ICT
AWARDS
• Mobile Service Provider of the Year

2016 FROST & SULLIVAN INDONESIA
EXCELLENCE AWARDS
• m-money Service Provider of the Year
• Mobile Service Provider of the Year

WORLD COMMUNICATION AWARDS 2016
• CEO of the Year – Ririek Adriansyah

FTSE4GOOD INDEX

GLOBAL 100 MOST SUSTAINABLE
CORPORATIONS 2017
• Ranked 52nd globally

GOVERNANCE AND TRANSPARENCY
INDEX 2016
• 1st in Singapore

HR EXCELLENCE AWARDS 2016
• Graduate Recruitment & Development

– Gold

• Compensation & Beneﬁts Strategy
– Gold
• Employee Engagement – Gold
• Leadership Development – Gold
• Talent Management – Gold
• Innovative Use of HR Technology
– Bronze

IR MAGAZINE AWARDS – SOUTH EAST
ASIA 2016
• Best in Country: Singapore

NEWSWEEK GLOBAL 500 COMPANIES
GREEN RANKINGS 2016
• Ranked 141st globally (1st in Singapore)

SGX SUSTAINABILITY LEADERS INDEX

SIAS INVESTORS’ CHOICE AWARDS
2016
• Diversity Award
• Hall of Fame, Most Transparent

Company Award

SINGAPORE APEX CORPORATE
SUSTAINABILITY AWARDS 2016
• Sustainable Business (Large
Organisation) – Apex Winner

SINGAPORE CORPORATE AWARDS
2016
• Best Managed Board Award

(Companies with S$1 billion and above
in market capitalisation) – Gold

SINGAPORE HR AWARDS 2016
• Leading HR Practices in:
– Performance Management
– Learning and Development
– Talent Management, Retention &

Succession Planning

– Compensation & Rewards

Management

WORLD’S MOST ETHICAL COMPANIES
• Honoree (2011 – 2017)

OPTUS

2016 MENTAL HEALTH MATTERS
AWARDS
• Mental Health Promoting Workplace

AHRI AWARDS 2016
• AHRI Award for Talent Management

LEARNX IMPACT AWARDS 2016
• Best Learning Project (eLearning on a

Budget) – Platinum

• Best Learning Project (Wellbeing) –

Platinum

Singapore Telecommunications Limited | Annual Report 2017

Governance
and
Sustainability
Philosophy

Singtel is committed to the highest levels of corporate
governance in all that we do. Our emphasis on
responsible business practices, transparency and
integrity cuts across all levels of the organisation.
We aim for what is strategically, ﬁnancially
and operationally sustainable while protecting
our environment and contributing back to the
communities in which we operate. We strive to be an
employer of choice, and encourage our staff to initiate
and take part in programmes and activities that help
the community. The foundation of these practices is
the ﬁrm belief that good corporate governance fuels
sustainable, long-term growth for our business and
value creation for our stakeholders.

EDMUND QUEK HAN YEOW

Singtel Radio Network Quality, Director

What started off as a typical photo assignment at an elderly
home 16 years ago, quickly became a lifelong mission for
Edmund. As the then fresh graduate captured the diff erent
faces of the elderly, he was touched by their sheer joy and
gratitude. That ﬁ rst encounter inspired him to later found
the All Saints Volunteer Group which befriends the elderly
at All Saints Homes.

Singapore Telecommunications Limited | Annual Report 2017

Corporate Governance

OUR GOVERNANCE
FRAMEWORK

CHAIRMAN
SIMON ISRAEL

Key Objective
Responsible for leadership
of the Board and for creating
conditions for overall
Board, Board Committee
and individual Director
effectiveness

THE BOARD OF SINGTEL
9 DIRECTORS:
6 independent Directors and
3 non-independent Directors

Key Objective
To create value for
shareholders and to ensure
the long-term success of the
Group

AUDIT COMMITTEE

CHAIRMAN
BOBBY CHIN

3 independent Directors and
1 non-independent Director

Key Objective
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

CORPORATE GOVERNANCE & NOMINATIONS COMMITTEE

CHAIRMAN
LOW CHECK KIAN

2 independent Directors and
1 non-independent Director

Key Objectives
Establish and review the proﬁle of Board members; make
recommendations to the Board on the appointment,
re-nomination and retirement of Directors; review the
independence of Directors; assist the Board in evaluating the
performance of the Board, Board Committees and Directors;
and develop and review the Company’s corporate governance
practices

EXECUTIVE RESOURCE & COMPENSATION COMMITTEE

CHAIRMAN
PETER MASON AM

2 independent Directors and
1 non-independent Director

Key Objectives
Oversee the remuneration of the Board and Senior
Management, and set appropriate remuneration framework
and policies, including long-term incentive schemes, to deliver
annual and long-term performance of the Group

FINANCE & INVESTMENT COMMITTEE

CHAIRMAN
SIMON ISRAEL

2 independent Directors and
1 non-independent Director

Key Objectives
Provide advisory support on the development of the Group’s
overall strategy, review strategic issues, approve investments
and divestments, review the Group’s Investment and Treasury
Policies, evaluate and approve ﬁnancial offers and banking
facilities, and manage the Group’s liabilities

CHAIRMAN
TEO SWEE LIAN

2 independent Directors and
1 non-independent Director

RISK COMMITTEE

Key Objectives
Ensure that Management maintains a sound system of risk
management and internal controls to safeguard shareholders’
interests and the Group’s assets, and determine the nature and
extent of the material risks that the Board is willing to take in
achieving the Group’s strategic objectives

GROUP CHIEF EXECUTIVE OFFICER

CHUA SOCK KOONG

Key Objectives
Manage the Group’s business and implement strategy and policy

MANAGEMENT COMMITTEE

Key Objective
Direct Management on operational policies and activities

Group CEO,
CEO Group Enterprise,
CEO Consumer Australia,
CEO Consumer Singapore,
CEO International,
CEO Group Digital Life,
Group Chief Corporate Officer,
Group CFO,
Group Chief Human Resources
Officer,
Group Chief Information
Officer, and
Group Chief Technology Officer

INTRODUCTION
Singtel aspires to the highest standards of corporate
governance as we believe that good governance supports
long-term value creation. To this end, Singtel has in
place a set of well-deﬁned policies and processes to
enhance corporate performance and accountability, as
well as protect the interests of stakeholders. The Board of
Directors is responsible for Singtel’s corporate governance
standards and policies, and stresses their importance
across the Group.

Singtel is listed on the Singapore Exchange Securities
Trading Limited (SGX) and has complied in all
material respects with the principles, guidelines and
recommendations in the Singapore Code of Corporate
Governance 2012 (Singapore Code). This report sets
out Singtel’s key corporate governance practices with
reference to the Singapore Code.

Recognition of Singtel’s commitment to best
practices in corporate governance

Governance and
Transparency Index 2016

SIAS Investors' Choice
Awards 2016

Singapore Corporate
Awards 2016

in Singapore

Diversity Award

Hall of Fame,
Most Transparent
Company Award

Best Managed Board
Award – Gold
(Companies with S$1 billion and
above in market capitalisation)

DIRECTORS’ ATTENDANCE AT BOARD/GENERAL MEETINGS DURING
THE FINANCIAL YEAR ENDED 31 MARCH 2017 (1)

Name of Director

Simon Israel

Chua Sock Koong
Bobby Chin (2)
Venkataraman (Venky) Ganesan (3)
Low Check Kian
Peter Mason AM (4)
Christina Ong
Peter Ong (5)
Teo Swee Lian

Scheduled Board Meetings

Ad Hoc Board Meetings

Number of
Meetings Held

Number
of Meetings
Attended

Number of
Meetings Held

Number
of Meetings
Attended

Annual General
Meeting

7
7
7
7
7
7
7
7
7

2
2
2
2
2
2
2
2
2

2
2
1
1
2
2
2
–
2

Notes:
(1) Refers to meetings held/attended while each Director was in office.
(2)

In line with the Board’s Code of Conduct and Ethics, Mr Bobby Chin recused himself and did not participate in an ad hoc Board meeting relating to a
transaction in respect of which he was deemed to be not independent.

(3) Mr Venky Ganesan was unable to attend an ad hoc Board meeting on short notice, however he communicated his views to the Group CEO prior to the

meeting and his views were conveyed to the Board at the meeting.

(4) Member of the Order of Australia.
(5)

In line with the Board’s Code of Conduct and Ethics, Mr Peter Ong recused himself and did not participate in an ad hoc Board meeting relating to
a transaction in respect of which he was deemed to be not independent. In relation to another ad hoc Board meeting, while Mr Ong was unable to
attend the meeting on short notice, he communicated his views to the Group CEO prior to the meeting and his views were conveyed to the Board at
the meeting.

Singapore Telecommunications Limited | Annual Report 2017

Corporate Governance

BOARD MATTERS
The Board’s Conduct of Affairs
The Board aims to create value for shareholders and
ensure the long-term success of the Group by focusing on
the development of the right strategy, business model, risk
appetite, management, succession plan and compensation
framework. It also seeks to align the interests of the Board
and Management with that of shareholders and balance
the interests of all stakeholders. In addition, the Board
sets the tone for the entire organisation where ethics and
values are concerned.

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 policies and guidelines on
remuneration as well as the remuneration for the Board
and Senior Management, and approves the appointment
of Directors. In line with best practices in corporate
governance, the Board also oversees the 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. The Board approves
transactions exceeding certain threshold limits, while
delegating authority for transactions below those limits to
the Board Committees and the Management Committee
to optimise operational efficiency.

Material items that require Board approval include:

• The Group’s strategic plans
• The Group’s annual operating plan and budget
• Full-year, half-year and quarterly ﬁnancial results
• Dividend policy and payout
• Issue of shares
• Board succession plans
• Succession plans for Senior Management,

including appointment of, and compensation for,
Group CEO, CEOs, Group Chief Corporate Officer
and Group CFO

• Underlying principles of long-term incentive

schemes for employees

• The Group’s risk appetite and risk tolerance for

different categories of risk, as well as risk strategy
and the policies for management of material risks

• Acquisitions and disposals of investments

exceeding certain material limits

• Capital expenditures exceeding certain material limits

Board meetings
The Board and Board Committees meet regularly to
discuss strategy, operational matters and governance
issues. All Board and Board Committee meetings are
scheduled well in advance of each year in consultation
with the Directors. At every scheduled meeting, the
Board sets aside time for discussion without the presence
of Management (except the executive Director). The
non-executive Directors meet separately at least once
a year without any executives present. The Board holds
approximately seven scheduled meetings each year, and
may also hold ad hoc meetings as and when warranted by
particular circumstances. Nine Board meetings were held
in the ﬁnancial year ended 31 March 2017. Attendance
at Board or Board Committee meetings via telephone or
video conference is permitted by Singtel’s Constitution.

Typically, at least one Board meeting a year is held
overseas, in a country where the Group has a signiﬁcant
investment or has an interest in investing, or where Board
members can be exposed to new technology relevant
to the Group’s growth strategy. On such occasions,
the Board may meet with local business leaders and
government officials so as to help Board members gain
greater insight into such countries. The Board also meets
Singtel’s partners and key customers in those countries
to develop stronger relationships with such partners and
customers. Singtel also arranges for the Board to meet
with experts in the technology/digital space to enhance
their knowledge in new growth areas and enable the Board
to make more informed decisions. Board meetings may
include presentations by senior executives and external
consultants/experts on strategic issues relating to speciﬁc
business areas, as well as presentations by the Group’s
associates. This allows the Board to develop a good
understanding of the Group’s businesses and to promote
active engagement with the Group’s partners and key
executives. For the ﬁnancial year ended 31 March 2017,
the Board held its annual strategy session with Senior
Management in Silicon Valley, and also held a meeting at
the Optus campus in Sydney, Australia.

A record of the Directors’ attendance at Board meetings
during the ﬁnancial year ended 31 March 2017 is set out
on page 64. Directors who are unable to attend a Board
meeting are provided with the brieﬁng materials and can
discuss issues relating to the matters to be discussed at the
Board meeting with the Chairman or the Group CEO.

Director development/training
The Board values ongoing professional development and
recognises that it is important that all Directors receive
regular training so as to be able to serve effectively on, and
contribute to, the Board. The Board has therefore adopted a
policy on continuous professional development for Directors.

All new Directors appointed to the Board are briefed
by the Chairman, as well as the chairmen of the Board
Committees on which they will serve, on issues relating to
the Board and Board Committees. They are also briefed
by senior management on the Group’s business activities,
strategic direction and policies, key business risks, the
regulatory environment in which the Group operates and
governance practices, as well as their statutory and other
duties and responsibilities as Directors.

Upon appointment to the Board, each Director receives
a Directors’ Manual, which sets out the Director’s duties
and responsibilities and the Board governance policies
and practices. The Directors’ Manual is maintained by
the Company Secretary. In line with best practices in
corporate governance and the Singapore Code, new
Directors also sign a letter of appointment from the
Company stating clearly the role of the Board and non-
executive Directors, the time commitment that the
Director would be expected to allocate and other relevant
matters.

To ensure Directors can fulﬁl their obligations and to
continually improve the performance of the Board,
all Directors are encouraged to undergo continual
professional development during the term of their
appointment. Professional development may relate to
a particular subject area, committee membership, or
key developments in Singtel’s environment, market or
operations. Directors are encouraged to consult the
Chairman if they consider that they personally, or the
Board as a whole, would beneﬁt from speciﬁc education or

training regarding matters that fall within the responsibility
of the Board or relate to the business of Singtel.

During the ﬁnancial year ended 31 March 2017, the
development/training programmes for Directors included
the following:
• The Directors participated in an annual offsite workshop
in Silicon Valley with Senior Management to formulate
and plan the Group’s longer-term strategy, during
which the Directors were briefed on developments
in the markets in which the Group operates and were
introduced to new technologies and advancements
relevant to the Group. The Board also met with
representatives from start-ups and tech companies
there to keep updated on emerging trends and
technologies relevant to the Group’s business.
• The Board met with the management of Singtel’s

associate, Bharti Airtel, in India during which the Board
was updated on Airtel’s business and its operating
environment.

• The Board visited the Optus campus in Sydney, Australia,
and met with business leaders and key customers there.
The Board also toured the Michael Crouch Innovation
Centre at the University of New South Wales.

• The Board was updated on the Singapore Government’s

initiative on building a smart nation.

• Members of the Board attended forums and dialogues

with experts and senior business leaders on issues facing
boards and board practice.

• Brieﬁngs were provided by the Group’s external auditor

to Audit Committee members on new accounting
standards.

BOARD COMPOSITION, DIVERSITY AND BALANCE

11%

22%

33%

67%

Independence

Independent, non-executive directors
Non-independent, non-executive directors
Executive director / GCEO

Gender Diversity

Male directors
Female directors

Singapore Telecommunications Limited | Annual Report 2017

Corporate Governance

The Board comprises nine Directors, six of whom are non-
executive independent Directors, two of whom (including
the Chairman) are non-executive non-independent
Directors and one executive Director. The Board has
appointed a Lead Independent Director. A summary of the
role of the Lead Independent Director is set out on page
69. The proﬁles of the Directors are set out on pages 17
to 21.

The size and composition of the Board are reviewed
from time to time by the Corporate Governance and
Nominations Committee (CGNC). The CGNC 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 CGNC
also aims to maintain a diversity of expertise, skills and
attributes among the Directors. Any potential conﬂicts of
interest are taken into consideration.

In order to ensure that Singtel continues to be able to
meet the challenges and demands of the markets in which
Singtel operates, the Board is focused on enhancing the
diversity of skills, expertise and perspectives on the Board
in a structured way by proactively mapping out Singtel’s
Board composition needs over the short and medium term
(Board Progression Planning). This is an ongoing process
facilitated by an independent consultant and is informed
by a series of detailed interviews between the consultant
and each member of the Board as well as key management
members.

Board diversity
Singtel is committed to building a diverse, inclusive and
collaborative culture. Singtel recognises and embraces the
beneﬁts of diversity on the Board, and views diversity at
the Board level as an essential element in supporting the
attainment of its strategic objectives and its sustainable
development.

The Board’s Diversity Policy provides that, in reviewing
Board composition and succession planning, the CGNC
will consider the beneﬁts of all aspects of diversity,
including diversity of skills, experience, background,
gender, age, ethnicity and other relevant factors. These
differences will be considered in determining the optimum
composition of the Board and when possible should be
balanced appropriately. All Board appointments are made
based on merit, in the context of the skills, experience,
independence and knowledge which the Board as a whole
requires to be effective. Diversity is a key criterion in the
instructions to external search consultants.

The Board is of the view that gender is an important aspect
of diversity and will strive to ensure that (a) any brief to
external search consultants to search for candidates for
appointment to the Board will include a requirement
to present female candidates, (b) female candidates are
included for consideration by the CGNC whenever it seeks
to identify a new Director for appointment to the Board,
(c) the Board appoints at least one female Director to the
CGNC, and (d) there is signiﬁcant and appropriate female
representation on the Board, recognising that the Board’s

needs will change over time taking into account the skills
and experience of the Board.

Reﬂecting the focus of the Group’s business in the region,
three of Singtel’s nine Directors are from, and have
extensive experience in, jurisdictions outside Singapore,
namely, the Chairman, Mr Simon Israel, and non-executive
Directors, Messrs Venky Ganesan and Peter Mason AM.
In relation to gender diversity, approximately 33% of the
Singtel Board, or three out of the nine Board members, are
female. Other than the Group CEO, none of the Directors
is a former or current employee of the Company or its
subsidiaries.

Independence
The Board, taking into account the views of the CGNC,
assesses the independence of each Director annually
in accordance with the guidance in the Singapore
Code. A Director is considered independent if he 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.

The Board takes into account the existence of
relationships or circumstances, including those
identiﬁed by the Singapore Code, that are relevant in its
determination as to whether a Director is independent.
Such relationships or circumstances include the
employment of a Director by the Company or any of its
related corporations during the ﬁnancial year in question
or in any of the previous three ﬁnancial years; the
acceptance by a Director of any signiﬁcant compensation
from the Company or any of its related corporations
for the provision of services during the ﬁnancial year
in question or the previous ﬁnancial year, other than
compensation for board service; and a Director being
related to any organisation to which the Company or any
of its subsidiaries made, or from which the Company or
any of its subsidiaries received, signiﬁcant payments or
material services during the ﬁnancial year in question or
the previous ﬁnancial year.

The CGNC and the Board have assessed the independence
of each of the Directors in 2017. A summary of the
outcome of that assessment is set out below.

Based on the declarations of independence provided by
the Directors and taking into account the guidance in
the Singapore Code, the Board has determined that Ms
Chua Sock Koong, Singtel’s Group CEO, Mr Simon Israel,
Chairman of the Singtel Board, and Mr Peter Ong are the
only non-independent Directors. All other members of
the Board are considered to be independent Directors. In
line with the Board’s Code of Conduct and Ethics, each
member of the CGNC and the Board recused himself or
herself from the CGNC’s and the Board’s deliberations
respectively on his or her own independence.

Mr Simon Israel is considered non-independent as he
had previously been deemed non-independent by virtue
of his previous roles as a non-executive director, and

subsequently executive director, of Temasek Holdings
(Private) Limited (Temasek). He stepped down from
Temasek in June 2011. Temasek has an interest of
approximately 52% in Singtel.

Mr Peter Ong is considered non-independent as he was
the Permanent Secretary, Ministry of Finance until 30 April
2016. The Singapore Minister for Finance is the owner of
Temasek.

Mr Bobby Chin is the chairman of the Housing and
Development Board (HDB) and NTUC Fairprice Co-
operative Limited (NTUC). HDB and NTUC purchase
telecommunication and telecommunication-related
services from the Singtel Group in the ordinary course of
business. The Singtel Group also purchases services from
NTUC in the ordinary course of business. Mr Chin’s roles as
chairman of HDB and NTUC are non-executive in nature
and he is not involved in the day-to-day conduct of the
business of those organisations. The services obtained
from, and payments made by HDB and NTUC to, the
Singtel Group are not material in the context of the Singtel
Group, HDB or NTUC for the relevant period. The services
obtained from, and payments made by the Singtel group
to, NTUC are not material in the context of Singtel or
NTUC for the relevant period.

The Board also noted that Mr Chin was appointed to the
Board of Directors of Temasek on 10 June 2014 (note:
Mr Chin was appointed to the Singtel Board on 1 May
2012). After due consideration, the Board continues to
regard Mr Chin as independent as he does not represent
Temasek on the Singtel Board and he is not accustomed
or under an obligation whether formal or informal, to act
in accordance with the directions, instructions or wishes
of Temasek. As Mr Chin has demonstrated independence
in character and judgement in the discharge of his
responsibilities as a Director, the Board is satisﬁed that
he will continue to exercise independent judgement and
act in the best interests of Singtel and its security holders
generally.

The Board noted that Mrs Christina Ong is a partner
at Allen & Gledhill LLP (A&G) and a director of Eastern
Development Private Limited (EDPL), which is wholly-
owned by A&G. Although A&G provides legal services
to, and receives fees from, the Singtel Group, and
EDPL, in the ordinary course of its business, obtains
telecommunication and telecommunication-related
services from, and makes payments to, the Singtel Group,
Mrs Ong has an interest of less than 10% in A&G. Mrs
Ong is also a non-executive independent director of SIA
Engineering Company Limited (SIAEC) (a subsidiary of
Temasek), a member of the Singapore Tourism Board (STB)
and a non-executive independent director of Oversea-
Chinese Banking Corporation (OCBC). The SIAEC group,
STB and the OCBC group purchase telecommunication
and telecommunication-related services from the Singtel
Group in the ordinary course of business. Mrs Ong’s roles
in SIAEC, STB and OCBC are non-executive in nature
and she is not involved in the day-to-day conduct of the
business of those organisations. The Board is of the view

that the above relationships do not impair Mrs Ong’s ability
to act with independent judgement in the discharge of her
responsibilities as a Director.

The Board noted that Mr Venky Ganesan is a director of
BitSight Technologies, Inc (BitSight). Singtel’s subsidiary,
Singtel Innov8 Pte Ltd has an interest of less than 2% in
BitSight. The investment in BitSight by Singtel Innov8 Pte
Ltd was made independent of Mr Ganesan’s association
with Singtel. The Board is of the view that the above
relationship does not impair Mr Ganesan’s ability to act
with independent judgement in the discharge of his
responsibilities as a Director.

Under the Board’s Code of Conduct and Ethics, Directors
must avoid situations in which their own personal or
business interests directly or indirectly conﬂict, or appear
to conﬂict, with the interests of Singtel. The Code of
Conduct and Ethics provides that where a Director
has a conﬂict of interest, or it appears that he might
have a conﬂict of interest, in relation to any matter, he
should immediately declare his interest at a meeting of
the Directors or send a written notice to the Company
containing details of his interest and the conﬂict, and
recuse himself from participating in any discussion and
decision on the matter. Where relevant, the Directors have
complied with the provisions of the Code of Conduct and
Ethics, and such compliance has been duly recorded in the
minutes of meeting.

The Chairman and the Group CEO
The Chairman of the Board is a non-executive
appointment and is separate from the office of the Group
CEO. The Chairman leads the Board and is responsible for
ensuring the effectiveness of the Board and its governance
processes, while the Group CEO is responsible for
implementing the Group’s strategies and policies, and for
conducting the Group’s business. The Chairman and the
Group CEO are not related.

Role of the Chairman
The Chairman is responsible for leadership of the Board
and is pivotal in creating the conditions for overall Board,
Board Committee and individual Director effectiveness,
both inside and outside the boardroom. This includes
setting the agenda of the Board in consultation with
the Directors and the Group CEO, and promoting active
engagement and an open dialogue among the Directors,
as well as between the Board and the Group CEO.

The Chairman ensures that the performance of the Board
is evaluated regularly, and guides the development needs
of the Board. The Chairman leads the evaluation of the
Group CEO’s performance and works with the Group CEO
in overseeing talent management to ensure that robust
succession plans are in place for the senior leadership
team.

The Chairman works with the Board, the relevant
Board Committees and Management to establish the
boundaries of risk undertaken by the Group and ensure
that governance systems and processes are in place and
regularly evaluated.

Singapore Telecommunications Limited | Annual Report 2017

Corporate Governance

The Chairman plays a signiﬁcant leadership role by
providing clear oversight, advice and guidance to the
Group CEO and Management on strategy and the drive to
transform Singtel’s businesses. This involves developing a
keen understanding of the Group’s diverse and complex
businesses, the industry, partners, regulators and
competitors.

The Chairman provides support and advice to, and acts
as a sounding board for, the Group CEO, while respecting
executive responsibility. He engages with other members
of the senior leadership regularly.

The Chairman also maintains effective communications
with large shareholders and supports the Group CEO
in engaging with a wide range of other stakeholders
such as partners, governments and regulators where the
Group operates. He travels overseas to visit the Group’s
key associates in the region and, in the process, fosters
strong relationships with the Group’s partners and gathers
valuable feedback for Management to consider and follow
up on.

The scope and extent of the Chairman’s and the Board’s
responsibilities and obligations have been expanding
due to the increased focus on corporate governance,
risk management, regulation and compliance. Given the
increased demands, the Chairman in particular spends
more time on, and is more hands-on in, the affairs of the
Group. The Board has agreed with the Chairman that he
will commit a signiﬁcant proportion of his time to his role
and will manage his other time commitments accordingly.

Role of the Lead Independent Director
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. He also assists 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 CGNC. 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
that contact through the Chairman, Group CEO or Group
CFO has failed to resolve, or where such contact is
inappropriate.

Board Membership
The CGNC establishes and reviews the proﬁle required
of Board members and makes recommendations to the
Board on the appointment, re-nomination and retirement
of Directors.

the Board. The CGNC then identiﬁes Singtel’s needs and
prepares a shortlist of candidates with the appropriate
proﬁle for nomination or re-nomination. The Board has an
ongoing process facilitated by an independent consultant
to map out these needs and to search for candidates to
join the Board.

The CGNC takes factors such as attendance, preparedness,
participation and candour into consideration when
evaluating the past performance and contributions of a
Director when making its recommendations 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 CGNC may have to
consider the need to position and shape the Board in line
with the evolving needs of Singtel and the business.

When deciding on the appointment of new Directors to
the Board, the CGNC and the Board consider a variety
of factors, including the core competencies, skills and
experience that are required on the Board and Board
Committees, diversity, independence, conﬂicts of interest
and time commitments.

In order to ensure Board renewal, the Board has in place
guidelines on the tenure of the Chairman and Directors.
The guidelines provide that Directors are appointed for an
initial term of three years, and this may be extended to a
second three-year term. As a general rule, a Director shall
step down from the Board no later than at the AGM to be
held in his sixth year of service. Where a Director is not
appointed at an AGM, the Director’s term will be deemed
to have commenced on the date of the AGM immediately
following the date on which the Director was appointed.
The Committee may, in appropriate circumstances,
recommend to the Board that a Director’s term be
extended beyond the second three-year term, for a period
of up to three years. For Chairman, the same principles
apply except that the term is determined from the point he
became Chairman.

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 CGNC decides whether or
not a Director is able to do so and whether he has been
adequately carrying 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 provides that, as a general rule, each
Director should hold no more than ﬁve directorships in
public listed companies. However, the Board recognises
that the individual circumstances and capacity of each
Director are different and there may be circumstances
in which a different limit on board appointments is
appropriate. The guideline also provides that (i) in support
of their candidature for directorship or re-election,
Directors are to provide the CGNC with details of other
commitments and an indication of the time involve, and
(ii) non-executive Directors should consult the Chairman
or chairman of the CGNC before accepting any new
appointments as Directors.

The Company’s Constitution provides that 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 will be eligible for re-election by
shareholders. If at any AGM, fewer than three Directors
would retire pursuant to the requirements set out above,
the additional Directors to retire at that AGM shall be
those who have been longest in office since their last re-
election or appointment. The Group CEO, as a Director,
is subject to the same retirement by rotation, resignation
and removal provisions as the other Directors, and such
provisions will not be subject to any contractual terms
that may have been entered into with the Company.
Shareholders are provided with relevant information in
the Annual Report on the candidates for election or re-
election.

Board Performance
Each year, the CGNC undertakes a process to assess the
effectiveness of the Board and Board Committees. For
the ﬁnancial year ended 31 March 2017, as in previous
years, an independent external consultant was appointed
to facilitate this process. The 2017 Board effectiveness
survey was designed to provide an evaluation of current
effectiveness of the Board and to support the Chairman
and Board to proactively consider what can enhance the
readiness of the Board to address emerging strategic
priorities for the Singtel Group. The Directors and Senior
Management were requested to complete an evaluation
questionnaire focused on four key areas, namely (1) how
the Board plays an effective role and adds value on critical
issues, (2) how the Board operates to deliver impact and
value, (3) Board chair effectiveness and (4) committee
evaluation. In particular, the survey looked at the Board’s
performance in shaping and adapting strategy, risk and
crisis management, overseeing the Group’s performance,
CEO performance and succession management, corporate
social responsibility and stakeholder communications, as
well as areas such as strategic alignment and prioritisation,
Board composition and structure, Board dynamics and
culture, the Board’s partnership with management,
efficiency of core Board processes, Board chair
effectiveness, and Board Committee and committee chair
effectiveness.

In addition to the appraisal exercise, the contributions and
performance of each Director were assessed by the CGNC
as part of its periodic reviews of the composition of the
Board and the various Board Committees. In the process,
the CGNC was able to identify areas for improving the
effectiveness of the Board and Board Committees. The
Board was also able to assess the Board Committees
through their regular reports to the Board on their
activities.

Access to information
Prior to each Board meeting, Singtel’s Management

provides the Board with information relevant to matters on
the agenda for the meeting. In general, such information
is provided a week in advance of the Board meeting.
The Board also receives regular reports pertaining to the
operational and ﬁnancial performance of the Group, as
well as regular updates, which include information on
the Group’s competitors, and industry and technological
developments. In addition, Directors receive analysts’
reports on Singtel and other telecommunications and
digital 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. Procedures are in place for Directors and Board
Committees, where necessary, to seek independent
professional advice, paid for by Singtel.

Role of the Company Secretary
The Company Secretary attends all Board meetings
and is accountable directly to the Board, through the
Chairman, on all matters to do with the proper functioning
of the Board, including compliance with the Company’s
Constitution, the Companies Act, the Securities and
Futures Act and the SGX Listing Manual. She assists the
Board in implementing and strengthening corporate
governance policies and processes. The Company
Secretary is the primary point of contact between the
Company and the SGX. The Company Secretary is legally
trained, with experience in legal matters and company
secretarial practices. The appointment and removal of the
Company Secretary is subject to the approval of the Board.

Board and management committees
The following Board Committees assist the Board in
executing its duties:
• Audit Committee (AC)
• Corporate Governance and Nominations Committee (CGNC)
• Executive Resource and Compensation Committee (ERCC)
• Finance and Investment Committee (FIC)
• Risk Committee (RC)

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 encourage

Singapore Telecommunications Limited | Annual Report 2017

Corporate Governance

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 2017 is
set out on page 74.

Audit Committee

MEMBERSHIP
Bobby Chin, committee chairman and independent
non-executive Director
Christina Ong, independent non-executive Director
Peter Ong, non-executive Director
Teo Swee Lian, independent non-executive Director

KEY OBJECTIVE
• 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 terms of reference of the AC provide that the AC shall
comprise at least three Directors, all of whom are non-
executive Directors and the majority of whom, including
the chairman, are independent Directors. At least two
members of the AC, including the AC chairman, must
have recent and relevant accounting or related ﬁnancial
management expertise or experience. The chairman of
the AC is a Director other than the Chairman of the Singtel
Board.

The AC 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. It
also has the authority to review its terms of reference and
its own effectiveness annually and recommend necessary
changes to the Board.

The main responsibilities of the AC 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 AC 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 adequacy
and effectiveness 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 AC 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 to
ensure that the independence of the external auditors
is not compromised. It also makes recommendations
to the Board on the appointment or re-appointment of
the external auditors. In addition, the AC reviews and
approves the Singtel Internal Audit Charter to ensure
the independence and effectiveness of the internal
audit function. At the same time, it ensures that the
internal audit function is adequately resourced and has
appropriate standing within Singtel. The AC also reviews
the performance of Internal Audit, including approving
decisions relating to appointment or removal of Group
Chief Internal Auditor and approving the performance
and compensation of the Group Chief Internal Auditor. A
copy of the charter of the AC is available on the corporate
governance page on the Company’s website at www.
singtel.com/about-us/company/corporate-governance.

During the ﬁnancial year, the AC 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 AC also reviewed the adequacy of
the whistle-blower arrangements instituted by the
Group through which staff and external parties may, in
conﬁdence, raise concerns about possible improprieties
in matters of ﬁnancial reporting or other matters. All
whistle-blower complaints were reviewed by the AC at its
quarterly meetings to ensure independent and thorough
investigation and adequate follow-up.

The AC met ﬁve times during the ﬁnancial year. At these
meetings, the Group CEO, Group Chief Corporate Officer,
Group CFO, Vice President (Group Finance), Group Chief
Internal Auditor and the respective CEOs of the businesses
were also in attendance. During the ﬁnancial year, the AC
reviewed the results of audits performed by Internal Audit
based on the approved audit plan, signiﬁcant litigation
and fraud investigations, register of interested person
transactions and non-audit services rendered by the
external auditors. The AC also met with the internal and
external auditors, without the presence of Management,
during the ﬁnancial year.

The external auditors provided regular updates and
periodic brieﬁngs to the AC on changes or amendments to
accounting standards to enable the members of the AC to
keep abreast of such changes and its corresponding impact
on the ﬁnancial statements, if any. Directors are also invited
to attend relevant seminars on changes to accounting
standards and issues by leading accounting ﬁrms.

Financial matters
The AC reviewed the ﬁnancial statements of the Group
before the announcement of the Group’s quarterly and
full-year results. In the process, the AC reviewed the key
areas of management’s estimates and judgement applied
for key ﬁnancial issues including revenue recognition,

taxation, goodwill impairment, and the joint ventures’
and associates’ contingent liabilities, critical accounting
policies and any other signiﬁcant matters that might affect
the integrity of the ﬁnancial statements. The AC also
considered the report from the external auditors, including
their ﬁndings on the key areas of audit focus. Signiﬁcant
matters that were discussed with management, internal
and external auditors have been included as key audit
matters (KAMs) in the independent auditors’ report for the
ﬁnancial year ended 31 March 2017. Refer to pages 132 to
136 of this Annual Report.

The AC took into consideration the approach and
methodology applied in the valuation of acquired
businesses, as well as the reasonableness of the estimates
and key assumptions used. In addition to the views from the
external auditors, subject matter experts including external
tax specialists and legal experts, were consulted. The AC
concluded that management’s accounting treatment and
estimates in each of the KAMs were appropriate.

The information included in the Annual Report, excluding
the Financial Statements and auditor’s report, was provided
to the external auditors after the auditor’s report date. The
external auditors have provided a written conﬁrmation to
the AC that they have completed the work in accordance
with SSA 720 (Revised) The Auditor’s Responsibilities
Relating to Other Information and they have noted no
exception.

Corporate Governance and
Nominations Committee

MEMBERSHIP
Low Check Kian, committee chairman and
independent non-executive Director
Simon Israel, non-executive Chairman of the Singtel
Board
Christina Ong, independent non-executive Director

KEY OBJECTIVES
• Establish and review the proﬁle of Board members
• Make recommendations to the Board on the

appointment, re-nomination and retirement of
Directors

• Review the independence of Directors
• Assist the Board in evaluating the performance of

the Board, Board committees and Directors
• Develop and review the Company’s corporate

governance practices, taking into account relevant
local and international developments in the area of
corporate governance

The terms of reference of the CGNC provide that the
CGNC shall comprise at least three Directors, the majority
of whom, including the chairman, shall be independent. As
part of its commitment to gender diversity, the Board will
strive to appoint at least one female Director to the CGNC.

The main activities of the CGNC are outlined in the
commentaries on “Board Composition, Diversity and
Balance”, “Board Membership” and “Board Performance”
from pages 66 to 70.

The CGNC met three times during the ﬁnancial year ended
31 March 2017, and also approved various matters by
written resolution.

Executive Resource and
Compensation Committee

MEMBERSHIP
Peter Mason AM, committee chairman and
independent non-executive Director
Simon Israel, non-executive Chairman of the Singtel
Board
Teo Swee Lian, independent non-executive Director

KEY OBJECTIVES
• Oversee the remuneration of the Board and Senior

Management

• Set appropriate remuneration framework and policies,
including long-term incentive schemes, to deliver
annual and long-term performance of the Group

The ERCC plays an important role in helping to ensure
that the Group is able to attract, recruit, motivate and
retain the best talents through competitive remuneration
and progressive and robust policies so as to achieve the
Group’s goals and deliver sustainable shareholder value.

The terms of reference of the ERCC provide that the
ERCC shall comprise 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 main responsibilities of the ERCC, as delegated by
the Board, are to oversee the remuneration of the Board
and Senior Management. It sets appropriate remuneration
framework and policies, including long-term incentive
schemes, to deliver annual and long-term performance of
the Group.

The ERCC has been tasked by the Board to approve or
recommend to the Board the appointment, promotion
and remuneration of Senior Management. The ERCC
also recommends the Directors’ compensation for the
Board’s endorsement. Directors’ compensation is subject
to the approval of shareholders at the AGM. The ERCC’s
recommendations cover all aspects of remuneration for
Directors and Senior Management, including but not
limited to Director’s fees, salaries, allowances, bonuses,
options, share-based incentives, management awards, and
beneﬁts-in-kind.

Singapore Telecommunications Limited | Annual Report 2017

Corporate Governance

The terms of reference of the FIC provide that the FIC shall
comprise at least three Directors, the majority of whom
shall be independent Directors. Membership of the AC and
the FIC is mutually exclusive.

The FIC met ﬁve times during the ﬁnancial year ended 31
March 2017.

Risk Committee

MEMBERSHIP
Teo Swee Lian, committee chairman and
independent non-executive Director
Bobby Chin, independent non-executive Director
Peter Ong, non-executive Director

Notes:
Bobby Chin stepped down as Risk Committee chairman with effect
from 1 April 2017. He remains a member of the Risk Committee.
Teo Swee Lian was appointed as Risk Committee chairman with
effect from 1 April 2017.

KEY OBJECTIVES
• Assist the Board in fulﬁlling its responsibilities in
relation to governance of material risks in the
Group’s business, which include ensuring that
Management maintains a sound system of risk
management and internal controls to safeguard
shareholders’ interests and the Group’s assets, and
determining the nature and extent of the material
risks that the Board is willing to take in achieving
the Group’s strategic objectives

The terms of reference of the RC provide that the RC
shall comprise at least three members, the majority of
whom, including the chairman, shall be independent.
Members of the RC are appointed by the Board, on the
recommendation of the CGNC. There is at least one
common member between the RC and the AC.

The RC reviews the Group’s strategy, policies, framework,
processes and procedures for the identiﬁcation,
measurement, reporting and mitigation of material risks in
the Group’s business and reports any signiﬁcant matters,
ﬁndings and recommendations in this regard to the Board.

The RC meets at least three times a year, with additional
meetings to be convened as deemed necessary by the
chairman of the RC. The RC met three times during the
ﬁnancial year ended 31 March 2017.

The ERCC seeks expert advice and views on remuneration
and governance matters from both within and outside
the Group as appropriate. The ERCC draws on a pool of
independent consultants for diversiﬁed views and speciﬁc
expertise. The ERCC will ensure that existing relationships,
if any, between the Group and its appointed remuneration
consultants will not affect the independence and
objectivity of the remuneration consultants.

The ERCC approves or recommends termination
payments, retirement payments, gratuities, ex-gratia
payments, severance payments and other similar
payments to Senior Management. The ERCC ensures that
contracts of service for Senior Management contain fair
and reasonable termination clauses that are not overly
generous.

The ERCC also ensures that appropriate recruitment,
development and succession planning programmes are in
place for key executive roles, with the objective of building
strong and sound leadership bench strength for long-
term sustainability of the business. The ERCC conducts,
on an annual basis, a succession planning review of Senior
Management.

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 79 to 84.

The ERCC met three times during the ﬁnancial year ended
31 March 2017.

Finance and Investment Committee

MEMBERSHIP
Simon Israel, committee chairman and non-
executive Chairman of the Singtel Board
Venky Ganesan, independent non-executive Director
Low Check Kian, independent non-executive
Director

KEY OBJECTIVES
• Provide advisory support on the development
of the Singtel Group’s overall strategy and on
strategic issues for the Singapore and international
businesses

• Consider and approve investments and divestments
• Review and approve changes in the Singtel Group’s

investment and treasury policies

• Evaluate and approve any ﬁnancing offers and

banking facilities and manage the Singtel Group’s
liabilities in line with the Singtel Board’s policies and
directives

• Oversee any on-market share repurchases pursuant

to Singtel’s share purchase mandate

DIRECTORS’ BOARD COMMITTEE MEMBERSHIPS AND ATTENDANCE AT BOARD COMMITTEE MEETINGS
DURING THE FINANCIAL YEAR ENDED 31 MARCH 2017 (1)

Name of Director

Simon Israel

Chua Sock Koong (2)

Bobby Chin (3)

Venky Ganesan

Low Check Kian

Peter Mason AM

Christina Ong

Peter Ong (3)

Teo Swee Lian

Audit
Commitee

Corporate Governance and
Nominations Committee

Executive Resource and
Compensation Committee

Finance and Investment
Committee

Risk
Committee

Number of
Meetings Held

Number
of Meetings
Attended

Number of
Meetings Held

Number
of Meetings
Attended

Number of
Meetings Held

Number
of Meetings
Attended

Number of
Meetings Held

Number
of Meetings
Attended

Number of
Meetings Held

Number
of Meetings
Attended

–

Notes:
(1) Refers to meetings held/attended while each Director was in office.
(2) Ms Chua Sock Koong is not a member of the Board committees, although she attended meetings of the committees as appropriate.
(3) Mr Bobby Chin and Mr Peter Ong recused themselves and did not participate at an Audit Committee meeting relating to a transaction in respect of

which they were deemed to be not independent.

Management Committee
In addition to the ﬁve Board Committees and the two
advisory bodies, Singtel has a Management Committee
that comprises the Group CEO, CEO Group Enterprise,
CEO Consumer Australia, CEO Consumer Singapore,
CEO International, CEO Group Digital Life, Group Chief
Corporate Officer, Group CFO, Group Chief Human
Resources Officer, Group Chief Information Officer
and Group Chief Technology Officer.

The Management Committee meets every week
to review and direct Management on operational
policies and activities.

Note:
The composition of the Management Committee is as at 1 April 2017.

Advisory Committee/Panel
Singtel has two advisory bodies, the Optus Advisory
Committee (OAC) and the Technology Advisory Panel
(TAP).

The OAC comprises both Board and non-Board
members, namely Mr Peter Mason AM (committee
chairman), Ms Chua Sock Koong, Mr David Gonski,
Mr Simon Israel, Mr John Morschel and Mr Paul
O’Sullivan. The OAC reviews strategic business issues
relating to the Australian business.

The TAP advises the Board on developments, issues
and emerging trends in the technology space. The
TAP comprises distinguished international members
and is chaired by Mr Koh Boon Hwee. The other
members of the Panel are Messrs Venky Ganesan,
Douglas Haynes, Lim Chuan Poh, Jonathan Miller and
Erez Ofer.

Note:
The composition of the TAP is as at 31 March 2017.

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 Management. Such reports compare
Singtel’s actual performance against the budget, and
highlight key business drivers/indicators and any major
issues that are relevant to Singtel’s performance, position
and prospects.

For the ﬁnancial year ended 31 March 2017, Singtel’s Group
CEO and Group CFO have provided a written conﬁrmation
to the Board on the integrity of Singtel’s ﬁnancial
statements and on the adequacy and effectiveness of
Singtel’s risk management and internal control systems,
addressing ﬁnancial, operational and compliance risks
including information technology risks. This certiﬁcation
covers Singtel and the subsidiaries that are under Singtel’s
management control.

Internal Audit (IA)
Singtel IA comprises a team of 55 staff members, including
the Group Chief Internal Auditor, who reports to the AC
functionally and to the Group CEO administratively. Singtel
IA 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
IA successfully completed its external Quality Assurance
Review in 2014 and continues to meet or exceed the IIA
Standards in all key aspects.

Singtel IA adopts a risk-based approach in formulating
the annual audit plan that aligns its activities to the key
strategies and risks across the Group’s business. This
plan is reviewed and approved by the AC. The reviews
performed by Singtel IA are aimed at assisting the Board

Singapore Telecommunications Limited | Annual Report 2017

Corporate Governance

in promoting sound risk management, robust internal
controls 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 IA’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 IA works closely with Management in its internal
consulting and control advisory role to promote
effective risk management, robust internal control and
good governance practices in the development of new
products/services, and implementation of new/enhanced
systems and processes. Singtel IA also collaborates with
the internal audit functions of Singtel’s regional associates
to promote joint reviews and the sharing of knowledge
and/or best practices.

To ensure that the internal audits are performed
effectively, Singtel IA recruits and employs suitably
qualiﬁed professional staff with the requisite skill sets and
experience. Singtel IA provides training and development
opportunities for its staff to ensure their technical
knowledge and skill sets remain current and relevant.

External Auditor
The Board is responsible for the initial appointment
of external auditor. Shareholders then approve the
appointment at Singtel’s AGM. The external auditor holds
office until its removal or resignation. The AC assesses the
external auditor based on factors such as the performance
and quality of its audit and the independence of the
auditor, and recommends its 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. Deloitte
& Touche LLP has met this requirement, and the current
Deloitte & Touche LLP audit partner for Singtel took
over from the previous audit partner with effect from 29
July 2016. Singtel has complied with Rules 712 and 715
of the Listing Manual issued by SGX in relation to the
appointment of its auditor.

In order to maintain the independence of the external
auditor, Singtel has developed policies regarding the
types of non-audit services that the external auditor can
provide to the Singtel Group and the related approval
processes. The AC has also reviewed the non-audit
services provided by the external auditor during the
ﬁnancial year and the fees paid for such services. The AC
is satisﬁed that the independence of the external auditor
has not been impaired by the provision of those services.
The external auditor has also provided conﬁrmation of its
independence to the AC.

Fees for Deloitte & Touche services for the
ﬁnancial year ended 31 March 2017

Audit services

Non-audit services
(including audit-related services)

(S$ Mil)

4.4

0.8

Risk Management and Internal Control
The Board has overall responsibility for the governance
of risk and exercises oversight of the material risks in
the Group’s business. During the ﬁnancial year ended
31 March 2017, the Risk Committee (RC) assisted the
Board in the oversight of the Group’s risk proﬁle and
policies, adequacy and effectiveness of the Group’s risk
management system including the framework and process
for the identiﬁcation and management of signiﬁcant risks,
and reports to the Board on material matters, ﬁndings and
recommendations pertaining to risk management. The AC
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 to operational and management decision-
making risks. The Group’s risk management and internal
control framework is aligned with the ISO 31000:2009
Risk Management framework and the Committee of
Sponsoring Organisations of the Treadway Commission
(COSO) Internal Controls Integrated Framework. Major
incidents and violations, if any, are also reported to
the Board to facilitate the Board’s oversight of the
effectiveness of crisis management and the adequacy of
mitigating measures taken by Management to address the
underlying risks.

The identiﬁcation and day-to-day management of risks
rests with Management. Management is responsible for
the effective implementation of risk management strategy,
policies and processes to facilitate the achievement
of business plans and goals within the risk tolerance
established by the Board. Key business risks are proactively
identiﬁed, addressed and reviewed on an on-going basis.

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 RC on a regular
basis.

The Board has established a Risk Appetite Statement and
Risk Tolerance Framework to provide guidance to the
Management on key risk parameters. The signiﬁcant risks
in the Group’s business, including mitigating measures,
were also reviewed by the RC on a regular basis and
reported to the Board. Risk registers are maintained by
the business and operational units which identify the key
risks facing the Group’s business and the internal controls
in place to manage those risks. The RC had reviewed the
Group’s risk management framework during the reporting
period and was satisﬁed that it continued to be sound.

Internal and external auditors conduct audits that involve
testing the effectiveness of the material internal control
systems in the Group addressing ﬁnancial, operational

and compliance risks. Any material non-compliance
or lapses in internal controls together with remedial
measures recommended by internal and external auditors
are reported to the AC. The AC also reviews the adequacy
and timeliness of the actions taken by Management
in response to the recommendations made by the
internal and external auditors. Control self-assessments
in key areas of the Group’s operations are conducted
by Management on a periodic basis to evaluate the
adequacy and effectiveness of the risk management and
internal control systems, including quarterly and annual
certiﬁcations by Management to the AC and the Board
respectively on the integrity of ﬁnancial reporting and
the adequacy and effectiveness of the risk management,
internal control and compliance systems.

The Group has put in place a Board Escalation Process
where major incidents and violations including major/
material operational loss events and potential breaches
of laws and regulations by the Company and/or its key
officers, are required to be reported by Management/
Internal Audit to the Board immediately to facilitate the
Board’s oversight of crisis management and adequacy and
effectiveness of follow-up actions taken by Management.
Through this process, the Board has been kept informed
promptly of any incidents with potential material ﬁnancial,
operational, compliance and technology risk impact.

The Board has received assurance from the Group CEO
and Group CFO on the effectiveness of the Group’s risk
management and internal control systems, and that the
ﬁnancial records have been properly maintained and
the ﬁnancial statements give a true and fair view of the
Group’s operations and ﬁnancial position.

Based on the internal controls established and maintained
by the Group, work performed by internal and external
auditors, and reviews performed by Management
and various Board Committees, the Board, with the
concurrence of the AC, is of the opinion that the Group’s
internal controls and risk management framework and
systems were adequate and effective as at 31 March 2017
to address ﬁnancial, operational and compliance risks,
including information technology risk, which the Group
considers relevant and material to its operations.

The system of internal control and risk management
established by Management provides reasonable, but
not absolute, assurance that Singtel will not be adversely
affected by any event that can be reasonably foreseen as
it strives to achieve its business objectives. However, the
Board also notes that no system of internal controls and
risk management can provide absolute assurance in this
regard, or absolute assurance against poor judgement
in decision-making, human error, losses, fraud or other
irregularities.

Further details of the Group’s Risk Management Philosophy
and Approach can be found on pages 93 to 100.

SHAREHOLDER RIGHTS AND RESPONSIBILITIES
Communication with Shareholders
Singtel remains committed to delivering high standards
of corporate disclosure and transparency in our

communications with shareholders, analysts and other
stakeholders in the investment community. Singtel
provides timely, regular and relevant information regarding
the Group’s strategy, performance and prospects to aid
shareholders and investors in their investment decisions.

Over the years, Singtel has won recognition from leading
ﬁnance publications, business schools and investor
associations for its strong emphasis on corporate
governance and proactive approach to shareholder
communication and engagement.

The Singtel Investor Relations (IR) website is a key resource
of information for the investment community. It contains
a wealth of investor-related information on Singtel,
including investor presentations, webcasts of earnings
presentations, transcripts of earnings conference calls,
annual reports, upcoming events, shares and dividend
information and investor factsheets.

Singtel makes timely disclosures of any new material
information to the SGX. These ﬁlings are also posted on
the Singtel IR website, allowing investors to keep abreast
of strategic and operational developments.

Singtel reports ﬁnancial results on a quarterly basis:
typically within 45 days from the end of each ﬁnancial
quarter. The quarterly ﬁnancial results announcements
contain detailed ﬁnancial disclosures and in-depth
analyses of key value-drivers and metrics for the Group’s
businesses.

Singtel also provides ﬁnancial guidance for its businesses
at the beginning of each ﬁnancial year and may affirm or
update the guidance every quarter to accurately reﬂect
prevailing market conditions.

Singtel proactively engages shareholders and the
investment community through group and one-on-
one meetings, conference calls, email communications,
investor conferences and roadshows. This year, Singtel
engaged over 500 investors in 280 meetings and
conference calls in Singapore, London, New York and
other global ﬁnancial centres. While these meetings are
largely undertaken by Singtel’s Senior Management, the
Chairman and certain Board members also meet with
investors every year.

To ensure a two-way ﬂow of information, Singtel
commissions an annual survey of investors’ perceptions
to solicit feedback from the investment community
on a range of strategic and topical issues. The survey
provides the Singtel Board and Management with
invaluable insights into investors’ views of the Group and
helps Singtel identify areas for improvement in investor
communication.

Shareholder Meetings
Singtel strongly encourages and supports shareholder
participation at general meetings. Singtel delivers the
Notice of AGM and related information a month ahead,
providing sufficient time for shareholders to review the

Singapore Telecommunications Limited | Annual Report 2017

Corporate Governance

Notice of AGM and appoint proxies to attend the AGM
if they wish. The Notice of AGM is also advertised in The
Straits Times for the beneﬁt of shareholders. Singtel holds
its general meetings at a central location in Singapore with
convenient access to public transportation. A registered
shareholder who is not a relevant intermediary (as deﬁned
in the Companies Act, Chapter 50) and who is unable to
attend may choose to appoint up to two proxies to attend
and vote on his behalf. Under Singtel’s Constitution and
pursuant to the Companies Act, the Central Provident
Fund Board and relevant intermediaries may appoint more
than two proxies.

At each AGM, the Group CEO delivers a presentation to
update shareholders on Singtel’s progress over the past
year. Directors and Senior Management are in attendance
to address queries and concerns about Singtel. Singtel’s
external auditor and counsel also attend to help address
shareholders’ queries relating to the conduct of the
audit and the preparation and content of the auditor’s
reports, as well as clarify any points of law, regulation
or meeting procedure that may arise. The minutes of
all general meetings are posted on Singtel’s website.
The minutes disclose the names of the Directors, Senior
Management and, where relevant, the external auditor
and advisors who attended the meetings as well as
details of the proceedings, including the questions raised
by shareholders and the answers given by the Board/
Management.

Electronic poll voting at Singtel general meetings

All resolutions at Singtel’s general meetings are
voted on by poll so as to better reﬂect shareholders’
shareholding interests and ensure greater
transparency. Singtel uses electronic poll voting
devices to register the votes of shareholders who
attend the general meetings.

Singtel appoints an independent external party as
scrutineer for the electronic poll voting process. Prior
to the general meeting, the scrutineer will review the
proxies and the electronic poll voting system, and
attends at the proxy veriﬁcation process, to ensure
that the proxy and poll voting information is compiled
correctly. During the general meeting, the scrutineer
attends to ensure that the polling process is properly
carried out.

When voting on a resolution has closed, the poll
voting results, including the number and percentage
of votes cast for and against the resolution, are
immediately presented to shareholders. The poll
voting results are promptly ﬁled with SGX on the
same day as the meeting.

Securities Transactions
Singtel has in place a Securities Transactions Policy, which
provides that Directors and Top Management members
and persons who are in attendance at Board and Top
Management meetings (Key Officers) should not deal in
Singtel securities during the period commencing two
weeks before the announcement of Singtel’s ﬁnancial
statements for each of the ﬁrst three quarters of the
ﬁnancial year, and during the period commencing
one month before the announcement of the ﬁnancial
statements for the full ﬁnancial year and ending on the
date of the announcement of the relevant results. In
addition, employees who are involved in the preparation
of the Group’s ﬁnancial statements should not deal in
Singtel securities during the period commencing six weeks
before the announcement of ﬁnancial results each quarter.
The policy also provides that any of the above persons
who is privy to any material unpublished price-sensitive
information relating to the Singtel Group should not trade
in Singtel securities until the information is appropriately
disseminated to the market, regardless of whether or
not it is during the abovementioned “closed” periods for
trading in Singtel securities. The Company Secretary sends
quarterly reminders of the requirements under the policy
and the relevant laws and regulations to the Directors and
Management.

A Director is required to notify Singtel of his interest in
Singtel securities within two business days after (a) the
date on which he becomes a Director or (b) the date
on which he acquires an interest in Singtel securities. A
Director is also required to notify Singtel of any change
in his interests in Singtel securities within two business
days after he becomes aware of such change. Singtel will
ﬁle such disclosure with SGX within one business day of
receiving notiﬁcation from the Director.

The Securities Transactions 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 securities 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 Key Officers). 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 inform the Company Secretary before
trading in Singtel securities. 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.

Pursuant to recent changes to the SGX Listing Manual,
the Singtel Group has put in place a policy relating to the
maintenance of a list(s) of persons who are privy to price
sensitive information relating to Singtel. Under the policy,
persons who are to be included in the privy persons list

will be reminded not to trade in Singtel securities while in
possession of unpublished price-sensitive information.

In relation to the shares of other companies, Directors
are prohibited 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. 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.

No Material Contracts
Since the end of the previous ﬁnancial year ended 31
March 2016, no material contracts involving the interest
of the Group CEO, any Director, or the controlling
shareholder, Temasek Holdings (Private) Limited, has been
entered into by Singtel or any of its subsidiaries, and no
such contract subsisted as at 31 March 2017, save as may
be disclosed on SGXNet or herein.

Interested Person Transactions
As required by the SGX Listing Rules, details of interested
person transactions (IPT) entered into by the Group are
disclosed in this Annual Report on page 228. Singtel
Internal Audit regularly reviews the IPT entered into by the
Singtel Group to verify the accuracy and completeness
of the IPT disclosure and to determine whether the IPT
reporting requirements under the SGX listing rules have
been adhered to. The report is submitted to the Audit
Committee for review. Under the SGX listing rules, where
any IPT requires shareholders’ approval, the interested
person will abstain from voting and the decision will be
made by disinterested shareholders.

The Board has adopted a policy that there should be no
loans to Directors, except for loans to fund expenditure
to defend Directors in legal or regulatory proceedings, as
permitted under the Companies Act. As at 31 March 2017,
there were no loans granted to Directors.

Codes of Conduct and Practice
The Board has adopted a Code of Conduct and Ethics
as a means to guide the Directors on the areas of ethical
risk, and help nurture an environment where integrity and
accountability are key. The Code of Conduct and Ethics
sets out the Board’s principles on dealing with conﬂicts
of interest, maintaining conﬁdentiality, compliance with
laws and regulations and fair dealing. The Board also
has a Directors’ Manual, which sets out speciﬁc Board
governance policies and practices and the Directors’
duties and responsibilities. In addition, Singtel has a

code of internal corporate governance practices, policy
statements and standards (Singtel Code), and makes this
code available to Board members as well as employees of
the Group. The principles, policies, standards and practices
in the Code of Conduct and Ethics, the Directors’ Manual
and the Singtel Code are intended to enhance investor
conﬁdence and rapport, and to ensure that decision-
making is properly carried out in the best interests of the
Group. The Code of Conduct and Ethics, the Directors’
Manual and the Singtel Code are maintained by the
Company Secretary and are provided to Directors when
they are appointed to the Board.

Singtel also has a strict 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
covers areas such as equal opportunity employment
practices, workplace health and safety, conduct in the
workplace, business conduct, protection of Singtel’s
assets, proprietary information and intellectual property,
data protection, 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
employees 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 that
have or are expected to have a signiﬁcant impact, ﬁnancial
or otherwise, on the Group’s business and operations.

Whistle-Blower Policy
The Group is committed to a high standard of ethical
conduct and adopts a zero tolerance approach to fraud
and corruption.

Singtel undertakes to investigate all complaints of
suspected fraud and corruption in an objective manner.
To this end, it has put in place a whistle-blower policy and
procedures that provide employees and external parties
with well-deﬁned and accessible channels within the
Group. These include a direct channel to Singtel IA and
whistle-blower hotline services independently managed
by external service providers, for reporting suspected
fraud, corruption, unethical practices or other similar
matters which may cause ﬁnancial loss to the Group or
damage the Group’s reputation. The policy is aimed at
encouraging the reporting of such matters in good faith,
with the conﬁdence that employees and other persons
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

Singapore Telecommunications Limited | Annual Report 2017

Corporate Governance

staff as part of the Group’s efforts to promote strong
ethical values and fraud and control awareness. All
whistle-blower complaints are investigated independently
by Singtel IA or an independent investigation committee
as appropriate, and the outcome of each investigation is
reported to the AC.

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.

Remuneration of Non-Executive Directors
Singtel’s Group CEO is an Executive Director and is,
therefore, remunerated as part of Senior Management. She
does not receive Directors’ fees.

The ERCC recommends the non-executive Directors’
fees for the Board’s endorsement and approval by
shareholders. As Singtel has diverse and complex
operations and investments internationally and is not just
a Singapore-based company, the fees are benchmarked
against fees paid by other comparable companies in
Singapore and Australia, as well as comparable companies
in other countries.

Singtel seeks shareholders’ approval at the AGM for
Directors’ fees for the current ﬁnancial year so that
Directors’ fees can be paid on a half-yearly basis in arrears.
No Director decides his own fees.

Save as mentioned below, there are no retirement beneﬁt
schemes or share-based compensation schemes in place
for non-executive Directors.

To align Directors with shareholders’ interests, Directors
are encouraged to acquire Singtel shares each year
from the open market 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.

Financial Year Ended 31 March 2017
For the ﬁnancial year ended 31 March 2017, the Chairman
received an all-inclusive fee of S$960,000 (excluding
car-related beneﬁts). The fee was paid approximately
two-thirds in cash and approximately one-third in
Singtel shares. No separate retainer fees, committee fees,
attendance fees or travel allowance were paid to the
Chairman.

The fees for non-executive Directors (other than the
Chairman) 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 that did not coincide with Board
meetings. The framework for determining non-executive
Directors’ fees for the ﬁnancial year ended 31 March 2017
was the same as the framework for the previous ﬁnancial
year and is set out below:

Basic Retainer Fee
Board Chairman
Director

S$960,000 per annum
S$110,000 per annum

Fee for appointment to Audit
Committee and Finance and
Investment Committee
Committee chairman
Committee member

Fee for appointment to
Executive Resource and
Compensation Committee
Committee chairman
Committee member

Fee for appointment to any
other Board Committee
Committee chairman
Committee member

Attendance Fee per Ad Hoc
Board meeting

Travel allowance for
Board meetings and Board
Committee meetings that
do not coincide with Board
meetings (per day of travel
required to attend meeting)

S$60,000 per annum
S$35,000 per annum

S$45,000 per annum
S$25,000 per annum

S$35,000 per annum
S$25,000 per annum

S$2,000

S$3,000

The aggregate Directors’ fees paid to non-executive
Directors for the ﬁnancial year ended 31 March 2017 was
S$2,398,000 (details are set out in the table below).

Name of Director

Simon Israel (1)

Bobby Chin
Venky Ganesan (2)
Low Check Kian (3)
Peter Mason AM (4)
Christina Ong
Peter Ong (5)
Teo Swee Lian
Total

Director's Fees
(S$)

960,000
225,000
195,000
214,000
195,000
204,000
188,000
217,000
2,398,000

Notes:
(1)

In addition to the Director’s fees set out above, Mr Simon Israel also
received car-related beneﬁts (S$21,611).
In addition to the Director’s fees set out above, Mr Venky Ganesan
received fees of US$50,000 for the ﬁnancial year ended 31 March 2017
in his capacity as a member of the Technology Advisory Panel.
In addition to the Director’s fees set out above, Mr Low Check Kian

(2)

(3)

(4)

received aggregate fees of S$35,000 for the ﬁnancial year ended 31
March 2017 in his capacity as a director of Singtel Innov8 Pte. Ltd.
In addition to the Director’s fees set out above, Mr Peter Mason AM
received fees of S$35,000 in his capacity as a member of the Optus
Advisory Committee for the ﬁnancial year ended 31 March 2017.
(5) Fees for the Singapore public sector Director, Mr Peter Ong, are

processed in accordance with the framework of the Singapore
Directorship and Consultancy Appointments Council.

No employee of the Group who is an immediate family
member of a Director was paid remuneration that
exceeded S$50,000 during the ﬁnancial year ended 31
March 2017.

Financial Year Ending 31 March 2018
For the ﬁnancial year ending 31 March 2018, it is proposed
that aggregate fees of up to S$2,950,000 be paid to the
Directors, which is the same as the amount approved
by shareholders for the ﬁnancial year ended 31 March
2017. The proposed framework for Directors’ fees for the
ﬁnancial year ending 31 March 2018 is the same as that for
the ﬁnancial year ended 31 March 2017.

Remuneration of Executive Director
and Senior Management

The remuneration framework and policy is designed
to support the implementation of the Group’s
strategy and to enhance shareholder value. The
following are our guiding principles for remuneration
to Senior Management:

ALIGNMENT WITH SHAREHOLDERS’ INTERESTS
• Align interests between management and

shareholders

• Select appropriate performance metrics for

annual and long-term incentive plans to support
business strategies and ongoing enhancement of
shareholder value

• Ensure targets are appropriately set for threshold,
target, stretch and exceptional performance levels
• Establish sound and structured funding to ensure

affordability

COMPETITIVE REMUNERATION
• Offer competitive packages to attract and retain

highly experienced and talented individuals
• Link a signiﬁcant proportion of remuneration to

performance, both on an annual and long-term basis

PAY-FOR-PERFORMANCE
• Measure performance based on a holistic balanced
scorecard approach, comprising both ﬁnancial and
non-ﬁnancial metrics

• Structure a signiﬁcant but appropriate proportion
of remuneration to be at risk, taking into account
the risk policies of the Group

• Build ﬂexibility into the remuneration package to
allow for performance-related clawback if long-
term performance targets are not met

EFFECTIVE IMPLEMENTATION
• Meet rigorous corporate governance requirements

The ERCC recognises that the Group operates in a
multinational and multifaceted environment and reviews
remuneration through a process that considers Group,
business unit and individual performance as well as
relevant comparative remuneration in the market. The
performance evaluation for Senior Management has been
conducted in accordance with the above considerations.

During the year, the ERCC engaged Aon Hewitt Singapore
Pte Ltd (Aon Hewitt) to provide valuation and vesting
computation for grants awarded under the Singtel
Performance Share Plan 2012. The ERCC also engaged
Mercer (Singapore) Pte Ltd (Mercer) to conduct Executive
Remuneration Benchmarking for Senior Management,
and review the overall remuneration framework and
key elements of the performance-related remuneration
components to ensure continued relevance to strategic
business objectives and alignment with market practices.
Aon Hewitt, Mercer and their consultants are independent
and not related to the Group or any of its Directors.

Singtel may, under special circumstances, compensate
Senior Management for their past contributions when
their services are no longer needed, in line with market
practice; for example, due to redundancies arising from
reorganisation or restructuring of the Group.

If an executive is involved in misconduct or fraud, resulting
in ﬁnancial loss to the company, the ERCC has the
discretion not to award and to forfeit incentive components
of the executive's remuneration, to the extent that such
award or incentive has not been released or disbursed.

Remuneration Structure
The remuneration structure is designed such that the
percentage of the performance-related components of
Senior Management’s remuneration increases as they
move up the organisation.

On an annual basis, the ERCC proposes the compensation
of the Group CEO, CEOs, Group Chief Corporate Officer
and Group CFO for the Board’s approval and approves
compensation for the other Senior Management.

The key remuneration components for Senior
Management are summarised below:

TOTAL REMUNERATION

FIXED COMPONENTS

BASE SALARY

BENEFITS & PROVIDENT /
SUPERANNUATION

PERFORMANCE-RELATED COMPONENTS

VARIABLE BONUS

LONG-TERM INCENTIVES

Singapore Telecommunications Limited | Annual Report 2017

Corporate Governance

Fixed Components

BASE SALARY
The base salary reﬂects the market worth of the job but
may vary with responsibilities, qualiﬁcations and the
experience that the individual brings to the role.

Policy
This is approved by the Board based on ERCC’s
recommendation and reviewed annually against:
(i) peers of similar ﬁnancial size and complexity to the

Group;

(ii) pay and conditions across the Group; and
(iii) the executive’s contribution and experience.

In Australia, consistent with local market practice,
executives may opt for a portion of their salaries to be
received in beneﬁts-in-kind, such as superannuation
contributions and motor vehicles, while maintaining the
same overall cost to the company.

Performance Linkage
The base salary is linked to each executive’s sustained
long-term performance.

BENEFITS & PROVIDENT/SUPERANNUATION FUND
Beneﬁts and Provident/Superannuation Fund provided
are in line with local market practices and legislative
requirements.

Policy
Singtel contributes towards the Singapore Central
Provident Fund or the Optus Superannuation Fund
or any other chosen fund, as applicable. Singtel
also provides in-company medical scheme, club
membership, employee discounts and other beneﬁts
that may incur Australian Fringe Beneﬁts Tax, where
applicable.

Participation in 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.

Performance Linkage
Beneﬁts and Provident/Superannuation Fund are not
directly linked to performance.

Performance-related Components

VARIABLE BONUS
Variable Bonus comprises the Performance Bonus and
the Value Sharing Bonus. It provides a variable level of
remuneration dependent on short-term performance
against the annual plan, as well as relevant market
remuneration benchmarks.

Policy
Performance Bonus
Performance Bonus (PB) is designed to support the
Group’s business strategy and the ongoing
enhancement of shareholder value through the delivery
of annual ﬁnancial strategy and operational objectives.
On an individual level, the PB will vary according to the
actual achievement against Group, business unit and
individual performance objectives.

Value Sharing Bonus
A portion of Senior Management’s annual remuneration
is tied to the Economic Proﬁt (EP) performance of the
Group in the form of the Value Sharing Bonus (VSB).
VSB is used to defer their bonuses over a time horizon
to ensure alignment with sustainable value creation
for the shareholders over the longer term. VSB is also
extended to Top Management executives, who are
senior executives below the Senior Management level,
holding positions equivalent to Vice President in the
organisation.

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.

Value Sharing Bonus
A “VSB bank” is created for each executive to hold the
VSB allocated to him or her in any year. One-third of the
“bank” balance would be paid out in cash provided it is
positive. The remaining balance will be carried forward
and at risk as it is subject to performance-related
clawback and could be reduced in the event of EP
underperformance in the future years.

LONG-TERM INCENTIVES
Long-term incentives reinforce the delivery of
long-term growth and shareholder value to drive
an ownership culture and retain key talent. These
are equity awards provisionally granted to Senior
Management based on performance for the year ended
31 March 2017.

The long-term incentives consist of two types of
awards – the Restricted Share Award (RSA) and the
Performance Share Award (PSA) – with grants made
at the discretion of the ERCC. The RSA is granted to a
broader group of executives while the PSA is granted to
Senior and Top Management.

Performance Linkage
Performance Bonus
The objectives are aligned to the Annual Operating Plan
and are different for each executive. They are assessed
on the same principles across two broad categories of

Policy
The number of performance shares (RSA and PSA)
awarded is determined using the valuation of the shares
based on a Monte-Carlo simulation. The share awards
are conditional upon the achievement of predetermined

performance targets over the performance period. The
performance conditions were chosen as they are key
drivers of shareholder value creation and aligned to
the Group’s business objectives. These performance
conditions and targets are approved by the ERCC at
the beginning of the performance period. The ﬁnal
number of performance shares vested to the recipient
will depend on the level of achievement of these targets
over the performance period, subject to the approval of
the ERCC.

A signiﬁcant portion of the remuneration package for
our Senior Management is delivered in Singtel shares to
ensure that their interests are aligned with shareholders.
In particular, the long-term incentives mix is more
heavily weighted toward PSA for more senior executives
to increase focus on shareholder returns. This is further
supported by signiﬁcant shareholding requirements in
which they are required to build up and retain at least
the equivalent of one to two times their annual base
salary in shares. Group CEO is expected to hold at least
the equivalent of three times her annual base salary as
shareholding.

Special provisions for vesting and lapsing of awards
apply for events such as the termination of employment,
misconduct, retirement and any other events approved
by the ERCC. Upon occurrence of any of the events,
the ERCC will consider, at its discretion, whether or
not to release any award, and will take into account
circumstances on a case-by-case basis, including (but
not limited to) the contributions made by the employee.
Singtel employees are prohibited from entering into

transactions in associated products which limit the
economic risk of participating in unvested awards under
Singtel’s equity-based remuneration schemes.

Performance Linkage
Restricted Share Award (RSA)
The RSA has a two-year performance period from
1 April 2017 to 31 March 2019. Vesting of shares is
dependent on the following performance conditions:

• 50% based on Singtel Group’s Net Proﬁt After Tax
(NPAT) – Singtel Group NPAT achieved against
predetermined targets; and

• 50% based on Singtel Group’s Free Cash Flow (FCF)

– Singtel Group FCF achieved against predetermined
targets.

Performance Share Award (PSA)
The PSA has a three-year performance period from
1 April 2017 to 31 March 2020. Vesting of shares is
dependent on the following performance conditions:

• 50% based on Singtel Group’s Relative Total

Shareholder Return (Relative TSR) – Percentile
ranking against the component stocks of the MSCI
Asia Paciﬁc Telecommunications Index; and

• 50% based on Singtel Group’s Absolute Total

Shareholder Return (Absolute TSR) – Absolute TSR
achieved against predetermined targets.

The details of the vesting schedule for RSA and PSA
granted in June 2017 are shown in Figure A and Figure B
respectively.

Figure A: Restricted Share Award (RSA) Vesting Schedule

Group NPAT (50%)

Group FCF (50%)

Performance

Vesting Level (1)

Performance

Vesting Level (1)

Exceptional
Stretch
Target
Threshold
Below Threshold

150%
130%
100%
50%
0%

Exceptional
Stretch
Target
Threshold
Below Threshold

150%
130%
100%
50%
0%

Figure B: Performance Share Award (PSA) Vesting Schedule

Relative TSR (50%)

Absolute TSR (50%)

Performance (2)

Vesting Level (1)

Performance

Vesting Level (1)

–
≥ 90th percentile
50th – 59th percentile
< 50th percentile

–
100%
50%
0%

Stretch
Target
Threshold
Below Threshold

200%
100%
30%
0%

Notes:
(1) For achievement between these performance levels, the percentage of shares that will vest under this tranche would vary accordingly.
(2) Percentile ranking performance against the component stocks of the MSCI Asia Paciﬁc Telecommunications Index. The list of component stocks is

available at www.msci.com/constituents.

Singapore Telecommunications Limited | Annual Report 2017

Corporate Governance

Remuneration of Key Management
For the ﬁnancial year ended 31 March 2017, there were no termination, retirement and post-employment beneﬁts
granted to Directors and Key Management.

Remuneration of Executive Director
Summary compensation table for Group CEO (Chua Sock Koong) for the ﬁnancial year ended 31 March 2017:

Name

Chua Sock Koong

Fixed
Remuneration

Variable Bonus

Provident Fund

(S$) (1)

(S$) (2)

(S$) (3)

Beneﬁts

(S$) (4)

Total Cash &
Beneﬁts

(S$) (5)

Earned
Paid out

1,647,096

4,822,082
4,151,877

13,260

77,217

6,559,655
5,889,450

Performance shares granted, vested and lapsed for Ms Chua as at 31 March 2017 are as follows:

2014 Awards

2015 Awards

2016 Awards (8)

2017 Awards (8) (9)

2014 Awards

2015 Awards (8)

2016 Awards (8)

2017 Awards (8) (9)

Restricted Share Award (RSA) (6)

Granted
(no. of shares)

Vested
(no. of shares)

Lapsed
(no. of shares)

102,097

132,727

84,060

109,278

–

201,331

382,987

Released

(no. of shares)
66,364
66,363
54,639
54,639 (7)

Date

1-Jun-16
1-Jun-17
1-Jun-17
1-Jun-18
1-Jun-18
3-Jun-19
3-Jun-19
1-Jun-20

Performance Share Award (PSA) (6)

Granted
(no. of shares)

Vested
(no. of shares)

Lapsed
(no. of shares)

Released

Date

(no. of shares)

1,422,663

234,740

1,187,923

1-Jun-17

234,740

1,658,980

1,694,657

831,718

1-Jun-18

3-Jun-19

1-Jun-20

Notes:
(1) Fixed Remuneration refers to base salary earned for the ﬁnancial year ended 31 March 2017.
(2) Variable Bonus comprises Performance Bonus (PB) and Value Sharing Bonus (VSB). PB varies according to the actual achievement against Group,
business unit and individual performance objectives for the year. VSB is awarded for individual performance and Group Economic Proﬁt (EP)
performance for the year. The allocated VSB will be credited into the VSB ‘bank’ and one-third of the ‘bank’ balance is paid out in cash each year
provided it is positive. The remaining balance is carried forward to the next year and at risk as it is subject to a clawback feature. For more details,
please refer to page 81. Variable Bonus Earned is the sum of PB and VSB awarded for the ﬁnancial year ended 31 March 2017. Variable Bonus Paid Out is
the sum of PB and VSB paid out in June 2017.

(3) Provident Fund in Singapore 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) Total Cash & Beneﬁts Earned is the sum of Fixed Remuneration, Provident Fund, Beneﬁts and Variable Bonus awarded for the ﬁnancial year ended 31
March 2017. Total Cash & Beneﬁts Paid Out is the sum of Fixed Remuneration, Provident Fund, Beneﬁts and Variable Bonus paid out for the ﬁnancial
year ended 31 March 2017.

(6) Long-term Incentives are awarded in the form of Restricted Share Award (RSA) and Performance Share Award (PSA) under the Singtel Performance

Share Plan 2012.

(7) The second tranche of the vested 2015 RSA will be released in June 2018, subject to continued service of the employee.
(8) The vesting of the RSA and PSA are conditional upon the achievement of predetermined performance targets over the respective performance period,

which are a two-year period for RSA and a three-year period for PSA.

(9) The 2017 grants of RSA and PSA were made in June 2017 for performance for the ﬁnancial year ended 31 March 2017. The per unit fair values of the RSA

and PSA are S$3.479 and S$1.602 respectively. The performance conditions for the awards are detailed on page 82.

Remuneration of Other Key Management
Summary compensation table for the other top ﬁve Key Management for the ﬁnancial year ended 31 March 2017:

Name

Fixed
Remuneration

(S$) (1)

Variable
Bonus

(S$) (2)

Provident
Fund

(S$) (3)

Total Cash &
Beneﬁts

(S$) (5)

Restricted
Share Award
(RSA)
(no. of shares)

(6)

Performance
Share Award
(PSA)
(no. of shares)

(6)

Beneﬁts

(S$) (4)

The following are in alphabetical order:

Bill Chang
CEO Group Enterprise

Hui Weng Cheong (7)
COO, AIS

Allen Lew (8)
CEO Consumer Australia

Jeann Low
Group Chief Corporate
Officer

Yuen Kuan Moon
CEO Consumer
Singapore

Total

Earned

Paid Out

Earned

Paid Out

Earned

Paid Out

Earned

Paid Out

Earned

Paid Out

Earned

Paid Out

909,996

663,000

A$1,500,378

909,996

720,000

4,721,003

2,350,000

1,903,080

1,208,625

1,123,489

A$3,010,068

A$3,156,003

1,418,274

1,357,898

1,500,000

1,228,843

9,522,341

8,806,402

17,340

66,278

9,180

373,264

9,108

A$649,855

13,260

62,586

17,340

59,939

66,228

1,219,560

3,343,614

2,896,694

2,254,069

2,168,933

A$5,169,304

A$5,315,239

2,404,116

2,343,740

2,297,279

2,026,122

15,529,132

14,813,193

201,208

436,954

144,007

208,490

220,574

479,011

161,637

351,020

155,218

224,720

882,644

1,700,195

Performance shares granted, vested and lapsed for the above ﬁve executives as at 31 March 2017 are as follows:

Granted
(no. of shares)

Vested
(no. of shares)

Lapsed
(no. of shares)

Released

Date

(no. of shares)

Restricted Share Award (RSA)

2014 Awards

2015 Awards

228,654

297,253

188,260

244,741

–

2016 Awards (10)

425,487

1-Jun-16

1-Jun-17

1-Jun-18

3-Jun-19

148,628

148,625

122,373
122,368 (9)

2014 Awards

2015 Awards (10)

2016 Awards (10)

Granted
(no. of shares)

Vested
(no. of shares)

Lapsed
(no. of shares)

Released

Date

(no. of shares)

Performance Share Award (PSA)

2,421,321

399,519

2,021,802

1-Jun-17

399,519

2,823,526

3,032,763

1-Jun-18

3-Jun-19

Notes:
(1) Fixed Remuneration refers to base salary earned for the ﬁnancial year ended 31 March 2017.
(2) Variable Bonus comprises Performance Bonus (PB) and Value Sharing Bonus (VSB). PB varies according to the actual achievement against Group, business unit and
individual performance objectives for the year. VSB is awarded for individual performance and Group Economic Proﬁt (EP) performance for the year. The allocated
VSB will be credited into the VSB ‘bank’ and one-third of the ‘bank’ balance is paid out in cash each year provided it is positive. The remaining balance is carried
forward to the next year and at risk as it is subject to a clawback feature. For more details, please refer to page 81. Variable Bonus Earned is the sum of PB and VSB
awarded for the ﬁnancial year ended 31 March 2017. Variable Bonus Paid Out is the sum of PB and VSB paid out in June 2017.
(3) Provident Fund in Singapore represents payments in respect of company contributions to the Singapore Central Provident Fund.
(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 and club membership, where applicable.

(5) Total Cash & Beneﬁts Earned is the sum of Fixed Remuneration, Provident Fund, Beneﬁts and Variable Bonus awarded for the ﬁnancial year ended 31 March 2017.

Total Cash & Beneﬁts Paid Out is the sum of Fixed Remuneration, Provident Fund, Beneﬁts and Variable Bonus paid out for the ﬁnancial year ended 31 March 2017.

(6) Long-term Incentives are awarded in the form of performance shares. Grants of the Restricted Share Award (RSA) and Performance Share Award (PSA) under the
Singtel Performance Share Plan 2012 were made in June 2017 for performance for the ﬁnancial year ended 31 March 2017. The per unit fair values of the RSA and
PSA are S$3.479 and S$1.602 respectively. The performance conditions for the awards are detailed on page 82.

(7) Beneﬁts for Mr Hui Weng Cheong include tax equalisation in relation to his assignment to AIS, Thailand.
(8) All remuneration items for Mr Allen Lew are denominated in Australian Dollar, except for his Provident Fund, which is denominated in Singapore Dollar.
(9) The second tranche of the vested 2015 RSA will be released in June 2018, subject to continued service of the employee.
(10) The vesting of the RSA and PSA are conditional upon the achievement of predetermined performance targets over the respective performance period, which are a

two-year period for RSA and a three-year period for PSA.

Singapore Telecommunications Limited | Annual Report 2017

Corporate Governance

Legend
Q: Questions
A: How has the Company

complied?

Code of Corporate Governance 2012
GUIDELINES FOR DISCLOSURE

General

(a) Has the Company complied with all the

principles and guidelines of the Code?

Members of the Board
Guideline 2.6

(a) What is the Board’s policy with regard to diversity

If not, please state the speciﬁc deviations
and the alternative corporate governance
practices adopted by the Company in lieu of the
recommendations in the Code.

A: Yes, the Company has complied in all material

respects with the principles and guidelines of the
Code of Corporate Governance 2012.

(b)

In what respect do these alternative corporate
governance practices achieve the objectives of
the principles and conform to the guidelines in
the Code?

A: Not applicable.

Board Responsibility
Guideline 1.5

Q: What are the types of material transactions which

require approval from the Board?

A: Material items that require Board approval include:

• The Group’s strategic plans

• The Group’s annual operating plan and budget

• Full-year, half-year and quarterly ﬁnancial results

• Dividend policy and payout

• Issue of shares

• Board succession plans

• Succession plans for Senior Management, including
appointment of, and compensation for, Group CEO,
CEOs, Group Chief Corporate Officer and Group
CFO

• Underlying principles of long-term incentive

schemes for employees

• The Group’s risk appetite and risk tolerance for

different categories of risk, as well as risk strategy
and the policies for management of material risks

• Acquisitions and disposals of investments

exceeding certain material limits

• Capital expenditures exceeding certain material limits

in identifying director nominees?

Singtel is committed to building a diverse, inclusive
and collaborative culture. Singtel recognises and
embraces the beneﬁts of diversity on the Board,
and views diversity at the Board level as an essential
element in supporting the attainment of its strategic
objectives and its sustainable development.

The Board’s Diversity Policy provides that, in reviewing
Board composition and succession planning, the
CGNC will consider the beneﬁts of all aspects of
diversity, including diversity of skills, experience,
background, gender, age, ethnicity and other relevant
factors. These differences will be considered in
determining the optimum composition of the Board
and when possible should be balanced appropriately.
All Board appointments are made based on merit, in
the context of the skills, experience, independence
and knowledge which the Board as a whole requires
to be effective. Diversity is a key criterion in the
instructions to external search consultants.

The Board is of the view that gender is an important
aspect of diversity and will strive to ensure that (a)
any brief to external search consultants to search for
candidates for appointment to the Board will include a
requirement to present female candidates, (b) female
candidates are included for consideration by the
CGNC whenever it seeks to identify a new Director for
appointment to the Board, (c) the Board appoints at
least one female Director to the CGNC, and (d) there
is signiﬁcant and appropriate female representation
on the Board, recognising that the Board’s needs will
change over time taking into account the skills and
experience on the Board.

(b) Please state whether the current composition
of the Board provides diversity on each of
the following – skills, experience, gender and
knowledge of the Company, and elaborate with
numerical data where appropriate.

A: Reﬂecting the focus of the Group’s business in the

region, three of Singtel’s nine Directors are from, and
have extensive experience in, jurisdictions outside
Singapore, namely, the Chairman, Mr Simon Israel,
and non-executive Directors, Messrs Venky Ganesan
and Peter Mason AM. In relation to gender diversity,
approximately 33% of the Singtel Board, or three out
of the nine Board members, are female.

The individual proﬁles of the Directors, including
details of their background and qualiﬁcations, are set
out in the “Board of Directors” section of the Annual
Report.

In order to ensure that Singtel continues to be able
to meet the challenges and demands of the markets
in which Singtel operates, the Board is focused
on enhancing the diversity of skills, expertise and
perspectives on the Board in a structured way by
proactively mapping out Singtel’s Board composition
needs over the short and medium term (Board
Progression Planning). This is an ongoing process
facilitated by an independent consultant and is
informed by a series of detailed interviews between
the consultant and each member of the Board as well
as key management members.

Guideline 4.6

Q: Please describe the board nomination process for

the Company in the last ﬁnancial year for (i) selecting
and appointing new directors and (ii) re-electing
incumbent directors.

A: The CGNC establishes and reviews the proﬁle required
of Board members and makes recommendations to
the Board on the appointment, re-nomination and
retirement of Directors.

When an existing Director chooses to retire or is
required to retire from office by rotation, or the need
for a new Director arises, the CGNC reviews the
range of expertise, skills and attributes of the Board
and the composition of the Board. The CGNC then
identiﬁes Singtel’s needs and prepares a shortlist of
candidates with the appropriate proﬁle for nomination
or re-nomination. The Board has an ongoing process
facilitated by an independent consultant to map out
these needs and to search for candidates to join the
Board.

The CGNC takes factors such as attendance,
preparedness, participation and candour into
consideration when evaluating the past performance
and contributions of a Director when making its
recommendations 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 CGNC may have to
consider the need to position and shape the Board
in line with the evolving needs of Singtel and the
business.

When deciding on the appointment of new Directors
to the Board, the CGNC and the Board consider a
variety of factors, including the core competencies,
skills and experience that are required on the Board
and Board Committees, diversity, independence,
conﬂicts of interest and time commitments.

Guideline 1.6

(a) Are new directors given formal training? If not,

please explain why.

A: Yes, new directors are given formal training.

(b) What are the types of information and training

provided to (i) new directors and (ii) existing
directors to keep them up to date?

A: All new Directors appointed to the Board are briefed
by the Chairman, as well as the chairmen of the
Board Committees on which they serve, on issues
relating to the Board and Board Committees. They are
also briefed by senior management on the Group’s
business activities, strategic direction and policies, key
business risks, the regulatory environment in which
the Group operates and governance practices, as well
as their statutory and other duties and responsibilities
as Directors.

Upon appointment to the Board, each Director
receives a Directors’ Manual, which sets out the
Director’s duties and responsibilities and the Board
governance policies and practices. The Directors’
Manual is maintained by the Company Secretary. In
line with best practices in corporate governance and
the Singapore Code, new Directors also sign a letter
of appointment from the Company stating clearly
the role of the Board and non-executive Directors,
the time commitment that the Director would be
expected to allocate, and other relevant matters.

To ensure Directors can fulﬁl their obligations and to
continually improve the performance of the Board,
all Directors are encouraged to undergo continual
professional development during the term of their
appointment. Professional development may relate
to a particular subject area, committee membership,
or key developments in Singtel’s environment, market
or operations. Directors are encouraged to consult
the Chairman if they consider that they personally,
or the Board as a whole, would beneﬁt from speciﬁc
education or training regarding matters that fall
within the responsibility of the Board or relate to the
business of Singtel.

During the ﬁnancial year ended 31 March 2017, the
development/training programmes for Directors
included the following:

• The Directors participated in an annual offsite

workshop in Silicon Valley with Senior Management
to formulate and plan the Group’s longer-term
strategy, during which the Directors were briefed
on developments in the markets in which the Group
operates and were introduced to new technologies
and advancements relevant to the Group. The

Singapore Telecommunications Limited | Annual Report 2017

Corporate Governance

Board also met with representatives from start-

ups and tech companies there to keep updated on
emerging trends and technologies relevant to the
Group’s business.

• The Board met with the management of Singtel’s
associate, Bharti Airtel, in India during which the
Board was updated on Airtel’s business and its
operating environment.

• The Board visited the Optus campus in Sydney,

Australia, and met with business leaders and key
customers there. The Board also toured the Michael
Crouch Innovation Centre at the University of New
South Wales.

• The Board was updated on the Singapore

Government’s initiative on building a smart nation.

• Members of the Board attended forums and

dialogues with experts and senior business leaders
on issues facing boards and board practice.

• Brieﬁngs were provided by the Group’s external
auditors to Audit Committee members on new
accounting standards.

The Board receives regular reports pertaining to
the operational and ﬁnancial performance of the
Group, as well as regular updates, which include
information on the Group’s competitors, and industry
and technological developments. In addition,
Directors receive analysts’ reports on Singtel and
other telecommunications and digital 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.

Guideline 4.4

(a) What is the maximum number of listed company
board representations that the Company has
prescribed for its directors? What are the reasons
for this number?

A: The Board has 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 provides that, as
a general rule, each Director should hold no more
than ﬁve directorships in public listed companies.
However, the Board recognises that the individual
circumstances and capacity of each Director are
different and there may be circumstances in which a
different limit on board appointments is appropriate.

on the capacity of directors?

In support of their candidature for directorship or
re-election, Directors are to provide the CGNC with
details of their other commitments and an indication
of the time involved. The CGNC and the Board take
this into account in deciding on the capacity of
Directors.

Board Evaluation
Guideline 5.1

(a) What was the process upon which the Board

reached the conclusion on its performance for
the ﬁnancial year?

A: Each year, the CGNC undertakes a process to assess

the effectiveness of the Board and Board Committees.
For the ﬁnancial year ended 31 March 2017, as in
previous years, an independent external consultant
was appointed to facilitate this process. The 2017
Board effectiveness survey was designed to provide
an evaluation of current effectiveness of the Board
and to support the Chairman and Board to proactively
consider what can enhance the readiness of the Board
to address emerging strategic priorities for the Singtel
Group. The Directors and Senior Management were
requested to complete an evaluation questionnaire
focused on four key areas, namely (1) how the Board
plays an effective role and adds value on critical
issues, (2) how the Board operates to deliver impact
and value, (3) Board Chair effectiveness and (4)
committee evaluation. In particular, the survey looked
at the Board’s performance in shaping and adapting
strategy, risk and crisis management, overseeing
the Group’s performance, CEO performance
and succession management, corporate social
responsibility and stakeholder communications,
as well as areas such as strategic alignment and
prioritisation, Board composition and structure, Board
dynamics and culture, the Board’s partnership with
management, efficiency of core Board processes,
Board chair effectiveness, and Board Committee and
committee chair effectiveness.

In addition to the appraisal exercise, the contributions
and performance of each Director were assessed
by the CGNC as part of its periodic reviews of the
composition of the Board and the various Board
Committees. In the process, the CGNC was able to
identify areas for improving the effectiveness of the
Board and Board Committees. The Board was also
able to assess the Board Committees through their
regular reports to the Board on their activities.

(b) Has the Board met its performance objectives?

(b)

If a maximum number has not been determined,
what are the reasons?

A: Yes.

A: Not applicable.

Independence of Directors
Guideline 2.1

Q: Does the Company comply with the guideline on the

proportion of independent directors on the Board?

If not, please state the reasons for the deviation and
the remedial action taken by the Company.

A: Yes, six out of nine Directors are independent.

Guideline 2.3

(a)

Is there any director who is deemed to be
independent by the Board, notwithstanding
the existence of a relationship as stated in the
Code that would otherwise deem him not to be
independent? If so, please identify the director
and specify the nature of such relationship.

A: Please refer to the section “Board Composition,

Diversity and Balance” in the Corporate Governance
Report for details on Mrs Christina Ong, Mr Bobby
Chin and Mr Venky Ganesan.

(b) What are the Board’s reasons for considering

Guideline 9.3

(a) Has the Company disclosed each key

management personnel’s remuneration, in
bands of S$250,000 or in more detail, as well
as a breakdown (in percentage or dollar terms)
into base/ﬁxed salary, variable or performance-
related income/bonuses, beneﬁts in kind, stock
options granted, share-based incentives and
awards, and other long-term incentives? If not,
what are the reasons for not disclosing so?

A: Yes, the details of each of the top ﬁve key management

personnel’s remuneration are fully disclosed.

(b) Please disclose the aggregate remuneration paid
to the top ﬁve key management personnel (who
are not directors or the CEO).

A: The aggregate remuneration, comprising total cash

and beneﬁts, paid to the top ﬁve key management
personnel for FY 2017 amounted to S$14,813,193, as
indicated on page 84.

Guideline 9.4

him independent? Please provide a detailed
explanation.

A: Please refer to the section “Board Composition,

Diversity and Balance” in the Corporate Governance
Report for details on Mrs Christina Ong, Mr Bobby
Chin and Mr Venky Ganesan.

Guideline 2.4

A: No.

Guideline 9.6

Q: Has any independent director served on the Board

Is there any employee who is an immediate family
member of a director or the CEO, and whose
remuneration exceeds S$50,000 during the year?
If so, please identify the employee and specify the
relationship with the relevant director or the CEO.

for more than nine years from the date of his ﬁrst
appointment? If so, please identify the director and
set out the Board’s reasons for considering him
independent.

A: No.

Disclosure on Remuneration
Guideline 9.2

Q: Has the Company disclosed each director’s and

the CEO’s remuneration as well as a breakdown (in
percentage or dollar terms) into base/ﬁxed salary,
variable or performance-related income/bonuses,
beneﬁts in kind, stock options granted, share-
based incentives and awards, and other long-term
incentives? If not, what are the reasons for not
disclosing so?

A: Yes, the details of each Director’s and the Group

CEO’s remuneration are fully disclosed.

(a) Please describe how the remuneration received
by executive directors and key management
personnel has been determined by the
performance criteria.

A: The ERCC reviews remuneration through a process

that considers Group, business unit and individual
performance as well as relevant comparative
remuneration in the market.

Total remuneration for the Group CEO and
key management personnel comprise ﬁxed
components and performance-related components.
The performance-related components include
Performance Bonus, Value Sharing Bonus and
Long-term Incentives. Performance Bonus (PB) is
designed to support the Group’s business strategy
and the ongoing enhancement of shareholder value
through the delivery of annual ﬁnancial strategy
and operational objectives. Value Sharing Bonus
(VSB) is used to defer bonuses over a time horizon
to ensure alignment with sustainable value creation
for shareholders over the longer term. Long-term
Incentives refer to Restricted Share Award (RSA) and
the Performance Share Award (PSA) with performance
conditions that are tied to key drivers of shareholder
value creation and aligned to the Group’s business
objectives.

Singapore Telecommunications Limited | Annual Report 2017

Corporate Governance

(b) What were the performance conditions used to
determine their entitlement under the short-
term and long-term incentive schemes?

A: The PB will vary according to the actual achievement

against Group, business unit and individual
performance objectives, which can be grouped
into two broad categories: Business and People.
Business targets comprise ﬁnancials, strategy,
customer and business processes. People targets
comprise leadership competencies, core values,
people development and staff engagement. For
VSB, Economic Proﬁt performance of the Group is
measured. For RSA, internal performance conditions
such as the Group’s Net Proﬁt After Tax and Free Cash
Flow are selected. For PSA, performance conditions
aligned with shareholders’ interests such as Absolute
and Relative Total Shareholder Return are used.

not, what were the reasons?

A: The performance conditions were generally met,

except for total shareholder return conditions, which
were impacted by adverse share price movements.

Risk Management and Internal Controls
Guideline 6.1

Q: What types of information does the Company

provide to independent directors to enable them
to understand its business, the business and
ﬁnancial environment as well as the risks faced by
the Company? How frequently is the information
provided?

A: Prior to each Board meeting, Singtel’s Management
provides the Board with information relevant to
matters on the agenda for the meeting. In general,
such information is provided a week in advance
of the Board meeting. The Board also receives
regular reports pertaining to the operational and
ﬁnancial performance of the Group, as well as
regular updates, which include information on the
Group’s competitors, and industry and technological
developments. In addition, Directors receive analysts’
reports on Singtel and other telecommunications and
digital companies on a quarterly basis. Such reports
enable the Directors to keep abreast of key issues and
developments in the industry, as well as challenges
and opportunities for the Group.

The Board has separate and independent access to
the Senior Management and the Company Secretary
at all times. Procedures are in place for Directors
and Board Committees, where necessary, to seek
independent professional advice, paid for by Singtel.

Guideline 13.1

Q: Does the Company have an internal audit function? If

not, please explain why.

A: Yes, the Company has an internal audit function.

Guideline 11.3

(a)

In relation to the major risks faced by the
Company, including ﬁnancial, operational,
compliance, information technology and
sustainability, please state the bases for the
Board’s view on the adequacy and effectiveness
of the Company’s internal controls and risk
management system.

A: Based on the internal controls established and

maintained by the Group, work performed by internal
and external auditors, and reviews performed by
Management and various Board Committees, the
Board, with the concurrence of the AC, is of the
opinion that the Group’s internal controls and
risk management framework and systems were
adequate and effective as at 31 March 2017 to address
ﬁnancial, operational and compliance risks, including
information technology risk, which the Group
considers relevant and material to its operations.

Please refer to the section “Risk Management and
Internal Controls” in the Corporate Governance
Report for further details.

(b)

In respect of the past 12 months, has the Board
received assurance from the CEO and the CFO as
well as the internal auditor that:

(i) the ﬁnancial records have been properly
maintained and the ﬁnancial statements give a
true and fair view of the Company’s operations
and ﬁnances; and (ii) the Company’s risk
management and internal control systems are
effective? If not, how does the Board assure itself
of points (i) and (ii) above?

A: Yes.

Guideline 12.6

(a) Please provide a breakdown of the fees paid in
total to the external auditors for audit and non-
audit services for the ﬁnancial year.

A: Please refer to the section “External Auditor” in the
Corporate Governance Report for the breakdown
of fees. The Notes to the Financial Statements also
include information on the fees paid to external
auditors.

Guideline 15.5

If the Company is not paying any dividends for the
ﬁnancial year, please explain why.

A: Not applicable.

(b)

If the external auditors have supplied a
substantial volume of non-audit services to the
Company, please state the bases for the Audit
Committee’s view on the independence of the
external auditors.

A: Not applicable.

Communication with Shareholders
Guideline 15.4

(a) Does the Company regularly communicate with
shareholders and attend to their questions? How
often does the Company meet with institutional
and retail investors?

A: Yes, Singtel proactively engages shareholders

and the investment community through group
and one-on-one meetings, conference calls,
email communications, investor conferences and
roadshows. This year, Singtel engaged over 500
investors in 280 meetings and conference calls
in Singapore, London, New York and other global
ﬁnancial centres. While these meetings are largely
undertaken by Singtel’s Senior Management, the
Chairman and certain Board members also meet with
investors every year.

Singtel strongly encourages and supports shareholder
participation at general meetings. At each AGM,
the Group CEO delivers a presentation to update
shareholders on Singtel’s progress over the past year.
Directors and Senior Management are in attendance
to address queries and concerns about Singtel.
Singtel’s external auditor and counsel also attend to
help address shareholders’ queries relating to the
conduct of the audit and the preparation and content
of the auditor’s reports as well as clarify any points of
law, regulation or meeting procedure that may arise.

(b)

Is this done by a dedicated investor relations
team (or equivalent)? If not, who performs this
role?

Singtel’s Investor Relations department, has primary
responsibility for engagement with the investment
community.

informed of corporate developments, apart from
SGXNET announcements and the annual report?

A: The Singtel Investor Relations website is a key
resource of information for the investment
community. It contains a wealth of investor-
related information on Singtel, including investor
presentations, webcasts of earnings presentations,
transcripts of earnings conference calls, annual
reports, upcoming events, shares and dividend
information and investor factsheets. It can be
accessed via www.singtel.com/about-us/investor-
relations.

Singapore Telecommunications Limited | Annual Report 2017

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INVESTOR COMMUNICATION

MAINTAIN LEADERSHIP
AND SET THE BAR

to help investors make informed
and timely decisions about their
Singtel securities

through different touch points
and forums

for corporate governance
standards; champion
integrity, transparency and
accountability as a responsible
corporate citizen

PROACTIVE AND OPEN
COMMUNICATION WITH THE
INVESTMENT COMMUNITY
We are committed to help investors
better assess the performance of the
Group's diverse operations covering
multiple geographies, products
and business segments. We provide
extensive qualitative and quantitative
disclosures to demonstrate the
progress of our strategic initiatives
and our strong fundamentals.

During the ﬁnancial year ended
31 March 2017, the management
and Investor Relations (IR) team
engaged more than 500 investors
in 280 meetings and conference
calls to discuss the Group’s business
strategy, operational and ﬁnancial
performance and prospects. We also
participated in local and overseas
investor conferences and roadshows,
covering Hong Kong, Malaysia, the US
and Europe.

To give investors a better
understanding of our business and
operations, we hold an Investor
Day annually. On this day, investors
and analysts meet with the senior
management of Singtel, Optus
and our regional associates. The
event features presentations from
senior management and a question
and answer session. A record 72

participants attended last year’s event
and many of them gained a deeper
appreciation of the Group’s strategic
direction and ability to deliver a
strong performance.

We also conducted site visits to our
business facilities. Over 100 investors
toured our Singtel Innovation
Centre, a showcase of the Group’s
aspirational technologies in areas
like cyber security, smart living, data
analytics and cloud. Different exhibits
bring to life some of our ideas of
how we envision technology can
improve business processes and
consumers’ lives.

Retail investors also play an important
part of our outreach efforts and the
IR team continues to engage them
outside of our general meetings.
We have renewed our long-term
sponsorship of the Securities
Investors Association (Singapore)
(SIAS) Investor Education Programme,
hosting events such as the annual
Singtel-SIAS dialogue speciﬁcally
for retail shareholders. Retail investors
are also able to reach out directly
through email and telephone on
any issues and concerns they may
have. Through these initiatives,
we continue to promote Singtel
and sustain interaction with the
investment community.

In an Extraordinary General Meeting
in October 2016, shareholders
approved the acquisition of shares
in Intouch Holdings and Bharti
Telecom from Temasek Holdings
in a S$2.5 billion transaction. In the
period leading up to the meeting,
we conducted an extensive outreach
to investors to explain the rationale
for the investment and how it would
create long-term shareholder value.
The acquisition was successfully
completed in November 2016, with
more than 99% of shares voted in
favour of the acquisition.

MAINTAIN LEAD IN CORPORATE
GOVERNANCE, TRANSPARENCY
AND INVESTOR RELATIONS
We nurture and maintain strong
links with sell-side research analysts
and are well covered by more than
20 analysts based in Hong Kong,
Malaysia, Singapore and the UK who
issue regular reports. We monitor
analyst, industry and media reports
closely as part of our efforts to
continuously improve disclosures and
IR practices.

Each year, we commission an
independent study to gather investor
perceptions of our business. The
study, comprising in-depth interviews
with approximately 60 institutional
investors and research analysts,

on the IR website immediately after
they are released to the Singapore
Exchange to ensure fair, equal and
prompt dissemination of information.
In addition, we continuously review
the level of disclosure, to align it with
global best practices and take into
account new business initiatives.

During our quarterly ﬁnancial
results announcements, we issue
a comprehensive set of materials,
including detailed ﬁnancial
statements, management discussion
and analysis and presentation slides.
Our management responds to
questions from investors and analysts
over a conference call on the day
of the results announcement and
a transcript of the conference call
is made available on the Singtel IR
website the next work day.

SHAREHOLDER INFORMATION
As at 31 March 2017, Temasek
Holdings (Private) Limited remained
our largest shareholder, with 52% of
issued share capital. Other Singapore
shareholders held approximately 12%.
In terms of geographical distribution,
the US/Canada and Europe accounted
for approximately 14% and 10% of
issued share capital respectively.

gives our Board and management a
better understanding of our investors’
views and concerns. It also helps the
IR team identify areas of investor
focus, enabling us to tailor our
communications and disclosures
accordingly. In the latest study, Singtel
continued to be recognised for our
strong management, corporate
governance, investment appeal
and exposure to leading telcos in
the emerging markets. Investors
acknowledged the near-term
challenges of the telco industry and
agreed that the Group is deploying
the right strategies to drive growth
through investments in cyber security
and increasing stakes in the associates.

Good corporate governance also
plays a vital role in shaping investor
perceptions of the integrity,
transparency, accountability and
efficiency of a company. We keep
abreast of the latest developments
and benchmark ourselves against
best practices in key areas such
as disclosure, board structure,
shareholder rights and remuneration.

The Singtel IR website is the primary
source for corporate information,
ﬁnancial data and signiﬁcant business
developments for the investment
community. All new, material
announcements are made available

SHARE OWNERSHIP
BY GEOGRAPHY (1)

16.3B
shares (2)

Temasek Holdings (3)

US/Canada

Singapore (ex Temasek)

Europe

Others

52%

14%

12%

10%

11%

Notes:
(1) These ﬁgures do not add up to 100% due

to rounding.

(2) As at 31 March 2017.
(3)

Includes direct and deemed interest.

IR CALENDAR OF EVENTS

Mar 2016
• Investor Meeting with Chairman
and Board Members, Singapore

Apr 2016
• Credit Suisse Asian Investment

Conference, Hong Kong

May 2016
• Non-deal Equity Roadshows,
Singapore, Europe and the US
• Singtel Investor Day, Singapore
• Singtel Explorer Tour: Singtel
Innovation Centre, Singapore

• dbAccess Asia Conference

2016 site tour: NCS Centre for
Solutions for Urbanised Future,
Singapore

Jul 2016
• 24th Annual General Meeting,

Singapore

• Non-deal Equity Roadshow,
Kuala Lumpur

Aug 2016
• Non-deal Equity Roadshow,

Singapore

• Conference Calls: Proposed

acquisition of stakes in Intouch
Holdings and Bharti Telecom

Sep 2016
• CLSA Investors' Forum, Hong Kong

Oct 2016
• Extraordinary General Meeting,

Singapore

Nov 2016
• Morgan Stanley Asia Paciﬁc

Summit, Singapore

• Morgan Stanley European TMT

Conference, Barcelona

• Non-deal Equity Roadshows,

Singapore & the UK

Feb 2017
• Non-deal Equity Roadshow,

Singapore

Mar 2017
• Morgan Stanley Hong Kong

Summit, Hong Kong

Singapore Telecommunications Limited | Annual Report 2017

Risk Management
Philosophy and Approach

We identify and manage risks to reduce the uncertainty associated with executing our
business strategies and maximising opportunities that may arise. Risks can take various
forms and can have material adverse impact on our reputation, operations, human
resources and ﬁnancial performance.

We have established a comprehensive risk management framework approved by our
Risk Committee. The risk management framework sets out the governance structure
for managing risks, our risk philosophy, risk appetite and tolerance levels, our risk
management approach as well as risk factors.

In addition, our risk assessment and mitigation strategy are aligned with our Group
strategy and is an integral part of the annual business planning and budgeting process.

GOVERNANCE STRUCTURE FOR MANAGING RISKS

THE BOARD
• Instils culture and approach for risk governance
• Provides oversight of risk management systems and internal controls
• Reviews key risks and mitigation plans
• Determines risk appetite and tolerance
• Monitors exposure

RISK COMMITTEE
• Reviews and recommends risk strategy and policies
• Oversees design, implementation and monitoring of

internal controls

• Reviews adequacy and effectiveness of the Group’s

risk framework

• Monitors the implementation of risk mitigation plans

AUDIT COMMITTEE
• Reviews adequacy and effectiveness of the Group’s

internal control framework

• Oversees ﬁnancial reporting risk for the Group
• Oversees internal and external audit processes
• Monitors exposure

MANAGEMENT COMMITTEE
• Implements risk management practices within all business units and functions

RISK MANAGEMENT COMMITTEE
• Supports the Board and Risk Committee in terms of risk governance and oversight
• Sets the direction and strategies to align corporate risk management with the Group’s risk appetite and risk

tolerance

• Reviews the risk assessments carried out by the Business Units
• Reviews and assesses risk management systems and tools
• Reviews efficiency and effectiveness of mitigations and coverage of risk exposures

OUR RISK PHILOSOPHY

Our risk philosophy and risk management approach are based on three key principles:

RISK CENTRIC CULTURE
• Set the appropriate tone at

the top

• Promote awareness, ownership
and proactive management of
key risks

• Promote accountability

STRONG CORPORATE
GOVERNANCE STRUCTURE
• Promote good corporate

governance

• Provide proper segregation

of duties

• Clearly deﬁne risk-taking

responsibility and authority

• Promote ownership and

accountability for risk taking

PROACTIVE RISK MANAGEMENT
PROCESS
• Robust processes and systems
to identify, quantify, monitor,
mitigate and manage risks

• Benchmark against global best

practices

RISK APPETITE

The Board has approved the following risk appetite statement:

• The Group is committed to delivering value to our shareholders achieved through sustained proﬁtable growth.

However, we shall not compromise our integrity, values and reputation by risking brand damage, service delivery
standards, severe network disruption or regulatory non-compliance.

• The Group will defend our market leadership position in Singapore and strengthen our market position in

Australia and in Asia Paciﬁc through our regional associates. We will continue to pursue business expansion in the
emerging markets, including acquiring controlling stakes in the associates, and actively managing the risks.

• The Group is prepared to take measured risks to seek new growth in the digital space by providing global

platforms and enablers, targeted at a global footprint, while leveraging our current scale and core strengths.

• The Group targets an investment grade credit rating and dividend payout policy consistent with our stated

dividend policy and guidance.

RISK MANAGEMENT

We have established a rigorous
and systematic risk review process
to identify, monitor, manage
and report risks throughout the
organisation based on our risk
philosophy. Management has
primary responsibility for identifying,
managing and reporting to the Board
the key risks faced by the Group.
Management is also responsible for
ensuring that the risk management
framework is effectively implemented
within the business units. The
business units are supported by

specialised functions such as
Regulatory, Legal, Tax, Environment,
Insurance, Treasury and Credit
Management in the management
of risks. In addition, we regularly
assess the environmental, social
and governance risks that exist or
emerge in our broader value chain
and address them through various
corporate sustainability initiatives.
Our corporate sustainability initiatives
are discussed further on page 101.

Our key risk management activities
also include scenario planning,

business continuity/disaster recovery
management and crisis planning
and management. Close monitoring
and control processes, including
the use of appropriate key risk and
key performance indicators, are
implemented to ensure the risk
proﬁles are managed within policy
limits.

In addition, we have in place a formal
programme of risk and control self-
assessment where line personnel are
involved in the ongoing assessment
and improvement of risk management

Singapore Telecommunications Limited | Annual Report 2017

Risk Management
Philosophy and Approach

and controls. The effectiveness of
our risk management policies and
processes is reviewed on a regular
basis and, where necessary, improved.
Independent reviews are conducted
by third party consultants regularly
to ensure the appropriateness of
the risk management framework.
The consultants also report key
risks to the Board, as well as provide
periodic support and input when
undertaking speciﬁc risk assessments.
Furthermore, the risk management
processes facilitate alignment of our
strategy and annual operating plan
with the management of key risks.

Singtel’s Internal Audit (IA) carries
out reviews and internal control
advisory activities aligned to the
key risks in our businesses. This
provides independent assurance

to the Audit Committee (AC) on
the adequacy and effectiveness
of our risk management, ﬁnancial
reporting processes, and internal
control and compliance systems. In
order to provide assurance to the
Board, the CEOs of our business units
submit an annual report on the key
risks and mitigation strategies for
their respective businesses to the
Risk Committee. Our 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 every year.

In the course of their statutory audit,
external auditors review our material
internal controls to the extent of the
scope laid out in their audit plans. Any

material non-compliance and internal
control weaknesses, together with
their recommendations to address
them, are reported to the AC. Our
Management, with the assistance of
Singtel IA, follows up on the external
auditors’ recommendations as part of
their role in reviewing our system of
internal controls.

The systems that are in place are
intended to provide reasonable
but not absolute assurance against
material misstatements or loss, as
well as ensuring 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 risks.

RISK FACTORS

Our ﬁnancial performance and operations are inﬂuenced by a vast range of risk factors. Many of these affect not just our
businesses, but also other businesses in and outside the telecommunications industry. These risks vary widely and many
are beyond the Group’s control. There may also be risks that are either presently unknown or not currently assessed as
signiﬁcant, which may later prove to be material. However, we aim to mitigate the exposures through appropriate risk
management strategies and internal controls.

The section below sets out the principal risk types, which are not listed in the order of signiﬁcance.

• Economic Risks
• Political Risks
• Regulatory and Litigation Risks
• Competitive Risks
• Expansion Risks
• Project Risks

• New Business Risks
• Technology Risks
• Vendor/Supply Chain Risks
• Information Technology Risks
including Cyber Security Risks

• Breach of Privacy Risks

• Financial Risks
• Electromagnetic Energy Risks
• Network Failure and
Catastrophic Risks

• Talent Management Risks

ECONOMIC RISKS
Changes in domestic, regional and
global economic conditions may
have a material adverse effect on the
demand for telecommunications,
information technology (IT) and
related services, digital services, and
hence, on our ﬁnancial performance
and operations. As the global
headwinds intensify resulting in
uncertainty in the macro-economic

environment, this could have an
adverse effect on our overall Group
strategy and growth.

consumer and business demand for
telecommunications, IT and related
services, and digital services.

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, on

Our planning and management
review processes involve the
periodic monitoring of budgets and
expenditures to minimise the risk of
over-investment. Each of the business
units in our Group has continuing
cost management programmes to

drive improvements in their cost
structures.

POLITICAL RISKS
Some of the countries in which Group
Consumer 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 on the ownership, control and
condition of our assets in those areas.

Group Consumer is geographically
diversiﬁed with operations in
Singapore, Australia and the emerging
markets. We work closely with the
Management and our partners in
the countries where we operate
to leverage the local expertise,
knowledge and ability. This way, we
ensure compliance with the laws and
are able to implement risk mitigation
measures.

As Group Enterprise and Group
Digital Life expand their products and
services across the region and around
the world, exposure to similar political
risks may increase in the future.

REGULATORY AND
LITIGATION RISKS
Regulatory Risks
Our businesses depend on licences
issued by government authorities.
Failure to meet regulatory
requirements could result in ﬁnes or
other sanctions including, ultimately,
the revocation of licences.
Our 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, multimedia
and related industries, as well as the
regulatory environment (including
taxation) in which we operate. Such
changes could have a material
adverse effect on our ﬁnancial
performance and operations.

Our overseas investments are also
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 these factors can materially
and adversely affect our overseas
investments.

Consumer Australia, Consumer
Singapore and Group Enterprise are
impacted by the implementation of
national broadband networks in both
Australia and Singapore. In Singapore,
the Infocomm Media Development
Authority of Singapore (IMDA) has,
in its implementation of the Next
Generation Nationwide Broadband
Network (Next Gen NBN), designed
a structure to level the playing ﬁeld
to make the beneﬁts of the Next Gen
NBN available to all industry players.
Under the structural separation rules
laid down by IMDA, we have to divest
our stake in NetLink Trust (NLT),
which designs, builds, owns and
operates the passive infrastructure for
Next Gen NBN, to less than 25% by
April 2018. This industry structure has
signiﬁcantly altered the existing cost
model of the industry and increased
the level of competition from new
entrants.

In Australia, the government
is currently undertaking a
signiﬁcant reform of the ﬁxed-line
telecommunications sector, including
the rollout of a national broadband
network (NBN) to be operated on a
wholesale-only open access basis.
It is possible that the Australian
government’s regulatory reforms,
including legislation and the deployed
NBN and commercial transactions
relating to the NBN, could ultimately
lead to a sub-optimal or negative
outcome for Optus.

Our operations are also subject to
various other laws and regulations
such as those relating to customer
data privacy and protection,
anti-bribery and corruption, and
workplace safety and health. Failure
to meet these regulations may affect
our business and/or our capacity

to operate in line with our business
objectives.

We have access to appropriate
regulatory expertise and staffing
resources in Singapore and Australia
and we work closely with the
management and our partners in the
countries we operate in. We closely
monitor new developments and
regularly participate 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
Access to spectrum is critically
important for supporting our
business of providing mobile voice
and data. The use of spectrum in
most countries where we operate is
regulated by government authorities
and requires licences. Failure to
acquire access to spectrum or new
or additional spectrum on reasonable
commercial terms or at all could have
a material adverse effect on our core
communications business, ﬁnancial
performance and growth plans.

Litigation Risks
We are exposed to the risk of
regulatory or litigation action by
regulators and other parties. Such
regulatory matters or litigation
actions may have a material effect
on our ﬁnancial condition and
results of operations. Examples of
such litigation are disclosed in Notes
to the Financial Statements under
“Contingent Liabilities”.

We have put in place standard master
supply agreements with vendors and
implemented contract policies to
manage contractual arrangements
with vendors and customers. The
policies provide the necessary
empowerment framework for the
CEOs, the Management Committee
and the Board Committees to approve
any deviations from the standard
policies.

Singapore Telecommunications Limited | Annual Report 2017

Risk Management
Philosophy and Approach

COMPETITIVE RISKS
We face competitive risks in all
markets and business segments in
which we operate.

Group Consumer Business
The telecommunications market in
Singapore is highly competitive. As
competition further intensiﬁes with
the entry of a fourth mobile operator,
our market share may decline and
be exposed to more intense price
competition. The competitive
pressure in the ﬁxed-broadband
segments continues to be high
among the Retail Service Providers
(“RSPs”), with the ongoing migration
of customers from asymmetric digital
subscriber line (“ADSL”) to ﬁbre
plans. Singapore’s Next Gen NBN
regulations allow the RSPs equal and
open access to NetLink Trust’s ﬁbre
network.

In the Australian mobile market, in
addition to the incumbent operator,
a number of participants are
subsidiaries of international groups
and operators, and have made large
investments which are now sunk
costs. We are, therefore, exposed
to the risk of irrational pricing being
introduced by such competitors.
The consumer 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 NBN, competition
is expected to increase as new
operators enter the market.

The operations of our regional
associates’ businesses are also
subject to highly competitive market
conditions. Their growth depends
in part on the adoption of mobile
data services in their markets. Some
of these markets have and could
continue to experience keen price
competition for mobile data services
from smaller scale competitors,
leading to lower proﬁtability and
potential loss of market share for our
associates.

Our business models and proﬁts are
also challenged by disintermediation
in the telecommunications industry
by handset providers and non-
traditional telecommunications
service providers (including over-
the-top (“OTT”) players) who provide
multimedia content, applications and
services directly on demand.

We continue to invest in our networks
to ensure that our networks have the
coverage, capacity and speed that
will provide our customers with the
best mobile data experience. Group
Consumer is focused on driving
efficiencies and innovation, via new
technologies, products and services,
processes and business models to
meet evolving customer needs and
enhance customer experience.

Group Enterprise Business
Business customers enjoy wide
choices for many of our services,
including ﬁxed, mobile, cloud,
managed services, IT services
and consulting. Competitors
include multinational IT and
telecommunications companies,
while in Australia, the enterprise
market is dominated by the
incumbent. 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.

Group Enterprise continues to
focus on offering companies
comprehensive and integrated
infocomm technology (ICT) solutions
and initiatives to strengthen
customer engagement. This includes
broadening our solution portfolio to
cover new areas of customer need,
such as cloud computing, cyber
security and solutions for smart cities.

Group Digital Life Business
The digital products and services
we offer are primarily in the areas of
digital marketing, digital video and
data analytics. Competition is intense,

with many OTT operators offering
services over the internet and facing
low entry barriers.

Group Digital Life aspires to become a
signiﬁcant global player in these areas
by delivering distinctive products and
services in the target markets and
launching them quickly to capture
market share. We recently acquired
Turn Inc, a US-based company, to
strengthen our technological edge
and scale in digital advertising. We
will continue to harness our valuable
assets, such as extensive customer
knowledge, touch points, intelligent
networks and the scale of our
customer base.

EXPANSION RISKS
Given the size of the Singapore
and Australia markets, our future
growth depends, to a large extent,
on our ability to grow our overseas
operations in both traditional and
new digital services. 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 guarantee that
we will be able to maintain these
relationships or that our investment
partners will remain committed to
their partnerships.

Acquisition Risks
We continually look for investment
opportunities that can contribute to
our expansion strategy and develop
new revenue streams. Our efforts are
challenged by the limited availability
of opportunities, competition from
other potential investors, foreign
ownership restrictions, government
and regulatory policies, political
considerations and the speciﬁc
preferences of sellers. We face
challenges arising from integrating
newly acquired businesses with our
own operations, managing these
businesses in markets where we have
limited experience and/or resources
and ﬁnancing these acquisitions. We
also risk not being able to generate

synergies from these acquisitions,
and the acquisitions becoming a
drain on our management and capital
resources.

The business strategies of some
of our regional associates involve
expanding 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 guarantee that
the regional associates can generate
total synergies and successfully build
a competitive regional footprint.

We adopt a disciplined approach
in our investment evaluation and
decision-making process. Members
of our management team are also
directors on the boards of our
associates. In addition to sharing
network and commercial experience,
best practices in the areas of
corporate governance and ﬁnancial
reporting are also shared across the
Group.

PROJECT RISKS
We incur substantial capital
expenditure in constructing and
maintaining our networks and IT
systems infrastructure. These projects
are subject to risks associated with
the construction, supply, installation
and operation of equipment and
systems.

The projects that we undertake as
contractors to operate and maintain
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 or service levels.

Group Enterprise is a major IT service
provider to governments 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, as well as inadequate
resource allocation and scheduling.
These can lead to cost overruns,
project delays and losses.

We have a project risk management
framework in place, with processes
for regular risk assessment,
performance monitoring and
reporting of key projects.

NEW BUSINESS RISKS
Beyond our traditional carriage
business in Singapore and Australia,
we are venturing into new growth
areas to create additional revenue
streams, including mobile applications
and services, pay TV, Regional
premium OTT video, content,
managed services, cloud services,
cyber security, ICT, data analytics
and digital marketing. There is no
assurance that we will be successful
in these ventures, which may require
substantial capital, new expertise,
considerable process or systems
changes, as well as organisational,
cultural and mindset changes. These
businesses may also expose us to
new areas of risks associated with
the media and online industries such
as media regulation, content rights
disputes and customer data privacy
and protection.

As new businesses place new
demands on people, processes and
systems, we respond by continually
updating our organisation structure,
talent management and development
programme, reviewing our policies
and processes, and by investing in
new technologies to meet changing
needs.

TECHNOLOGY RISKS
Rapid and signiﬁcant technological
changes are typical in the
telecommunications and ICT industry.
Technological changes may reduce
costs, expand the capacity of new
infrastructure, bring new sources
of revenue, and/or result in shorter
periods for investment recovery, all

of which present both opportunities
as well as challenges. These changes
may materially affect the Group’s
capital expenditure and operating
costs, as well as the demand for
products and services offered by our
business divisions.

Rapid technological advances may
leave us with infrastructure and
systems that are technically 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.

In the emerging markets in which
our associates operate, regulatory
practices, including spectrum
availability, may not necessarily
synchronise with the technology
progression path and the market
demand for new technologies.

Each business group faces the
ongoing 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.
Our businesses may also incur
substantial development expenditure
to gain access to related or enabling
technologies to pursue new growth
opportunities in the businesses, e.g.
the ICT industry. The challenge is to
modify our existing infrastructure
and processes in a timely and cost-
effective manner to facilitate such
implementation, failing which this
could adversely affect our quality
of service, ﬁnancial condition and
operational performance.

We continue to invest in upgrading,
modernising and equipping our
systems with new capabilities
to ensure we are able to deliver
innovative and relevant services to
our customers.

VENDOR/SUPPLY CHAIN RISKS
We rely on third-party vendors and
their extended supply chain in many

Singapore Telecommunications Limited | Annual Report 2017

Risk Management
Philosophy and Approach

aspects of our business for various
purposes, including, but not limited
to, the construction, operations and
maintenance of our network, the
supply of handsets and equipment,
systems and application development
services, content provision and
customer acquisition. Accordingly,
our operations may be affected
by third-party vendors or their
supply chain 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 by a key vendor to
provide such services or equipment,
or any consolidation of the industry,
may signiﬁcantly affect our business
and operations.

We monitor our relationships with
key vendors closely and develop
new relationships to mitigate supply
risks. We have in place a Sustainable
Supply Chain strategy and framework
to manage risks that may exist in our
extended supply chain.

INFORMATION TECHNOLOGY RISKS
As our businesses and operations rely
heavily on information technology,
we have established the Cyber
Security Resiliency Committee
to provide oversight of all IT and
network security risks, including cyber
security threats and data privacy
breaches. The committee comprises
members from the businesses, various
IT and network domains, meets
periodically and reports directly to
the Risk Management Committee.
The committee develops appropriate
policies and frameworks to ensure
information system security, reviews
the projects and initiatives on IT
and network security, reviews any
IT security incidents, and establish
overall governance by performing
audits and cyber security drills.

We have established a Group
Information Security Policy for
managing risks associated with
information security in a holistic
manner. The policy is developed
based on industry best practices and
is aligned with international standards
such as ISO 27001. The policy covers

various aspects of IT risk governance,
including change management,
user access management, database
conﬁguration standards and disaster
recovery planning, and provides the
cornerstone for driving robust IT
security controls across the Group.

This includes training our people to
adopt a security ﬁrst mindset and be
vigilant to the latest cyber threats.
This mindset translates to a security
by design principle when we create
our products and services from idea,
inception to launch.

We have also established a Project
Management Methodology to ensure
that new systems are developed with
appropriate IT security controls and
are subject to rigorous acceptance
tests, including penetration testing,
prior to implementation.

Cyber Security Risks
The scale and level of sophistication
of cyber security threats have
increased with the changing tactics
and tools by cyber attackers,
ranging from terrorist attacks,
state-sponsored hacking, black-hat
hacking or even internal threats. As
our business is heavily dependent
on the resiliency of our network
infrastructure, and supporting
systems, we are exposed to cyber
security threats which can result
in disruptions to our network and
services provided to customers, and
leakage of sensitive and/or conﬁdential
information. The exposure is
further intensiﬁed with the growing
dependency on uninterrupted
connectivity and smart devices by our
customers, and can lead to impacts
on our reputation, litigation by
customers and/or regulatory ﬁnes
and penalties.

Group Enterprise is also growing our
cyber security business globally. The
failure to keep up with and counteract
increasing cyber security threats
can materially and adversely affect
our cyber security business and
growth strategy.

To combat these threats, we adopt a
holistic approach by keeping abreast
of the threat landscape and business
environment as well as implementing
a multi-layered security framework to
ensure there are relevant preventive,
detective and recovery measures.

We have been building our capabilities
organically, through investments as
well as partnerships with best-of-
breed technology partners. To date,
we have more than 2,000 cyber
security professionals, global security
operations and engineering centres
as well as a specialised team of
ethical hackers and forensic experts
in assisting various businesses to
manage vulnerabilities and threats,
achieve compliance with regulations
and implement secure solutions. The
Group has recently launched Cyber
Security Institute to offer/provide
training to enhance the cyber security
skills and preparedness of businesses
and governments in Asia Paciﬁc
and has invested in a research and
development lab to drive innovation
in this area.

BREACH OF PRIVACY RISKS
We seek to protect the privacy of
our customers in our networks and
systems infrastructure. Signiﬁcant
failure of security measures may
undermine customer conﬁdence and
result in litigation by customers and/
or regulatory ﬁnes and penalties. We
may also be subject to the imposition
of additional regulatory measures
relating to the security and privacy of
customer data.

We have implemented security
policies, procedures, technologies
and tools designed to minimise the
risk of privacy breaches. We have also
established an escalation process
for major incidents, which includes
security breaches, to ensure timely
response, internally and externally, to
minimise impact.

FINANCIAL RISKS
The main risks arising from our
ﬁnancial assets and liabilities are
foreign exchange, interest rate,
market, liquidity, access to ﬁnancing

sources and increased credit risks.
Financial markets continue to be
volatile and this may heighten
execution risk for funding activities
and credit risk premiums for market
participants.

We are exposed to foreign exchange
ﬂuctuations from our operations
and through subsidiaries as well
as associated and joint venture
companies operating in foreign
countries. These relate to the
translation of the foreign currency
earnings and carrying values of our
overseas operations. Additionally, a
signiﬁcant portion of associated and
joint venture company purchases
and liabilities are denominated in
foreign currencies, versus the local
currency of the respective operations.
This gives rise to changes in cost
structures and fair value gains or
losses when marked to market.

We have established policies,
guidelines and control procedures to
manage and report exposure to such
risks. Our ﬁnancial risk management is
discussed further on page 210 in Note
35 to the Financial Statements.

ELECTROMAGNETIC ENERGY RISKS
Health concerns have been raised
globally about the potential exposure
to Electromagnetic Energy (EME)
emissions through using mobile
handsets or being exposed to mobile
transmission equipment. While there
is no substantiated evidence of
public health risks from exposure to
the levels of EME typically emitted
from mobile phones, perceived
health risks can be a concern for
our customers, the community, and
regulators. The perceived health risks
can result in reduced demand for
mobile communications. Perceived
health risks in terms of environmental
exposures from mobile base station
equipment can have an impact
within local communities on the
implementation of new mobile
base stations which may impact
our mobile business and impact
revenues or may lead to litigation.
In addition, government controls
may be introduced to address this

perceived risk, restricting our ability to
deploy our mobile communications
networks.

We design and deploy our network to
comply with the relevant government
mandated standards for exposure
to EME. Our standards are based
upon those recommended by
the International Commission on
Non Ionizing Radiation Protection
(ICNIRP), which is a related agency of
the World Health Organisation (WHO).
The ICNRP standards are adopted
by many countries around the world
and are considered best practice.
We continue to monitor research
ﬁndings on EME, health risks and their
implications on relevant standards
and regulations.

NETWORK FAILURE AND
CATASTROPHIC RISKS
The telecommunications industry
faces a continuous challenge of
providing fast, secure and reliable
networks to an increasingly digital and
connected world. The provision of
our services depends on the quality,
stability, resilience and robustness of
our networks and systems. We face
the risk of malfunction of, loss of, or
damage to, network infrastructure
from natural or other uncontrollable
events such as acts of terrorism.

Some of the countries in which
we and/or our regional associates
operate have experienced a number
of major natural catastrophes over
the years, including typhoons,
droughts and earthquakes. In
addition, other events that are/are
not within our control and/or our
regional associates’ control, such
as ﬁre, deliberate acts of sabotage,
vendor failure/negligence, industrial
accidents, blackouts, terrorist attacks
or criminal acts, could damage, cause
operational interruptions or otherwise
adversely affect any of the facilities
and activities, as well as potentially
cause injury or death to personnel.
Such losses or damage may
signiﬁcantly disrupt our operations,
which may materially adversely
affect our ability to deliver services to
customers. Sustained or signiﬁcant

disruption to our services can also
signiﬁcantly impact our reputation
with our customers. Our inability to
operate our networks or customer
support systems may have a material
impact on our business.

We continue to make our networks
resilient and review our processes to
prevent any network disruptions and
have an effective communication
process for timely updates to our
stakeholders during any incidents
and/or crisis. There is a deﬁned crisis
management and escalation process
for our CEOs and senior management
to respond to emergencies and
catastrophic events. We have business
continuity plans as well as insurance
policies in place.

TALENT MANAGEMENT RISKS
As we seek new avenues of growth, a
key differentiator alongside access to
innovation will be the ability to attract
and sustain talent including new skills
and capabilities. The loss of some
or all of our key executives or the
inability to attract or retain key talent,
could materially and adversely affect
our business.

We continue to invest in the skills of
our existing workforce and build up
our current and emerging capabilities
through external professional hires
and targeted campus recruitment.
In order to develop and retain talent,
we conduct regular skill assessment
into the critical business areas and
set out structured developmental
roadmaps to ﬁll new and emerging
skills gaps. We have a targeted
development approach to develop
young, emerging and future technical
and business leaders through formal
learning activities, coaching and
mentoring as well as providing critical
experiences such as international
assignments, rotations and special
projects.

Singapore Telecommunications Limited | Annual Report 2017

100

Sustainability

At Singtel, we show how businesses can make a positive and lasting impact on the world
even as we create shareholder value. There are four pillars of sustainability where we
strive to:

• minimise our environmental footprint;
• develop and empower our people;
• connect and nurture the communities in which we operate, and
• create the best customer experience and foster ethical and responsible

business practices.

The materiality assessment we conducted and our ongoing stakeholder engagement
ensure that our strategy and programmes address what our internal and external
stakeholders want.

Our efforts have not gone unnoticed. We received recognition in leading global
sustainability listings, including the Financial Times Stock Exchange's FTSE4Good index,
which measures the performance of companies’ environmental, social and governance
practices. We were named one of the World’s Most Ethical Companies by Ethisphere
Institute for the seventh year running. And for the ﬁrst time, we were listed as one of
the world’s 100 Most Sustainable Corporations by Canadian investment advisory ﬁrm
Corporate Knights.

SUSTAINABILITY PILLAR 1
ENVIRONMENT – THE SMALLEST FOOTPRINT

As we grow our business and extend
our network and infrastructure,
we are mindful of the need to
optimise energy efficiency across
our operations, minimise our impact
on the environment and reduce
our carbon footprint. Our goal is to
create resilient networks in the face of
climate change.

Besides ‘greening’ our mobile
infrastructure with energy-efficient
base stations and network equipment,
we also go green with nature. We
have been working with Singapore’s
National Parks Board to plant
trees annually since 2009 to raise
environmental awareness among our

staff. To date, 2,200 staff volunteers
have planted more than 1,000 trees
across the island.

We minimise electronic waste by
redeploying, reselling or recycling our
network and office equipment, and
mobile devices. On the retail front, our
buy-back scheme allows customers
in Singapore and Australia to trade
in their used phones. Our stores also
have facilities for customers to recycle
their unwanted electronic products
and accessories.

Our green initiatives continue to
receive international recognition. We
were placed ﬁrst among Singapore

101

companies and ranked 141 globally
in the 2016 Newsweek Green
Rankings, which assesses the
performance of the 500 largest,
publicly traded global companies
according to market capitalisation.

Singtel was listed in CDP 2016, a
global environmental disclosure
system that recognises companies
for their achievements in combating
climate change. We received a
commendable B climate score for our
comprehensive carbon disclosure.

IVAN LIN RIXIN
Singtel Customer Service Offi cer

Making his way in the world hasn't been easy for Ivan.
Born with cerebral palsy, he has lived in a home all his
life. Armed with an ITE certiﬁ cate and determined to seek
independence, he tried to get a job but found working
conditions for people like him were less than ideal. In 2015,
he enrolled in the contact centre training programme at
Singtel Enabling Innovation Centre which helps persons
with disabilities to live and work independently. Today, the
29-year-old seems to have found his calling as a Customer
Service Offi cer.

SUSTAINABILITY PILLAR 2
PEOPLE – OUR GREATEST ASSET

We invested

S$25m
665,000

and

hours in staff training in
Singapore and Australia.

Our people are the most critical assets
in our bid to connect the world. We
invest in a range of training and talent
recruitment programmes as well as
activities to boost the well-being of
our staff . We also embrace diversity

and promote a collaborative work
environment.

NURTURING TALENT
We believe that our staff should be
equipped with skills needed to thrive
in a rapidly evolving industry. In
FY 2017, we invested S$25 million
and 665,000 hours in staff training in
Singapore and Australia.

Through the Singtel Cyber Cadet
Scholarship Programme, Singtel
Undergraduate Scholarship,
Management Associate Programme
and SHINE Internship Programme, we
are enlarging our pool of young talent
to drive growth in the emerging
areas of cyber security, smart cities
and data analytics.

Authority of Singapore and Cyber
Security Agency of Singapore to meet
the growing need for cyber security
talent. Targeted at new graduates
to mid-career ICT professionals, the
initiative aims to develop the right
skillsets for cyber security positions.
To date, the programme has trained
15 employees and signed on 10
fresh graduates and 24 mid-career
ICT specialists.

In the same light, Optus has also inked
a strategic partnership with Macquarie
University, where we are a sponsor of
the Macquarie University Cyber Hub.
The Cyber Hub will conduct short
courses for Optus employees and
provide a ready graduate pool for
talent recruitment.

We also launched the Cyber Security
Associates and Technologists
Programme with the Info-
communications Media Development

Our robust talent review process
identiﬁ es talents with strong potential
in the early stages of their careers to
accelerate their development.

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102

Sustainability

Over

25,000
88

employees from

different nationalities

The two-day event saw over 2,000
registered learning places. We also
held a technology fair to equip our
staff with knowledge of emerging
technologies such as cyber security,
cloud, smart cities and analytics.

We continued to organise our popular
annual training event, the Learning
Fiesta, which gives our employees
access to new business showcases
and a series of short courses and
activities that focused on learning
skillsets relevant to current and future
work. This year, we offered more than
27,000 learning places for our staff
across the Group.

To grow our talent across the region
and give them ample opportunities
to develop leadership skills, we
have ﬂagship programmes such as
Regional Leadership in Action and
Game for Global Growth. These
programmes are regularly reviewed to
align with the latest industry trends.

EMBRACING WORKFORCE
DIVERSITY
We believe that workforce diversity
helps us to build and sustain our
competitive advantage, and fosters
innovative thinking and creative
solutions to business challenges.

In support of the Singapore
government’s national SkillsFuture
movement to encourage lifelong
learning, we organised a roadshow
aimed at encouraging employees
to utilise their SkillsFuture credits.

We have good female representation
in middle and upper management
within Singtel and are working to
improve the representation in Optus.
We implemented new recruitment
standards for middle management
roles, where at least one female

candidate has to be shortlisted
and at least one female interviewer
included in the recruitment process.
We also created a gender diversity
plan for Optus Networks to better
understand the working experience
and motivation of female employees
there.

IMPROVING STAFF WELL-BEING
Singtel provides all employees with
free annual health screenings, chronic
disease management counselling and
Work Life Coaching programmes.

We also work closely with the Union
of Telecoms Employees of Singapore
(UTES) and the Employee Partnership
in Australia to ensure that the interests
and well-being of our employees are
met. Our long-standing relationship
with UTES was recognised at the
May Day Awards 2016, where our
Group CEO was presented with the
Medal of Commendation (Gold) for
being proactive in adopting policies
that improve the lives and working
conditions of Singtel staff.

EMPLOYEE DIVERSITY BY GENDER AND AGE

Gender Distribution

Age Distribution

Singtel

Optus

Singtel

Optus

Male

Female

63%

37%

Male

Female

68%

32%

< 30 years old

30-49 years old

≥ 50 years old

22%

60%

18%

< 30 years old

30-49 years old

≥ 50 years old

24%

60%

16%

103

TEO EK THONG
Singtel Voice Engineer

Ek Thong never thought that balloons would change his life.
Tired of queuing up for balloon sculptures for his children
years ago, he decided to pick up balloon sculpting, much to
their delight. As they grew out of it, he started off ering hs
skills at charities, schools and other voluntary events. Today,
he trades balloons with smiles. And he wouldn't trade that
for anything.

SUSTAINABILITY PILLAR 3
COMMUNITY – THE MOST CONNECTED COMMUNITIES

As a Group, we create positive social
impact in all our markets and are
committed to giving back through
fundraising, volunteering and
solving societal issues through
social innovation.

EMPOWERING VULNERABLE
COMMUNITIES
Our eff orts to maximise the potential
of persons with disabilities and special
needs include establishing the Singtel
Enabling Innovation Centre in 2015.
It equips participants with contact
centre and IT skills, thus enhancing
their employability and their ability to
lead independent lives.

This year, we worked with SG Enable,
Singapore’s national agency that
supports persons with special needs,

for its 12-week RISE Mentoring
Programme run together with the
Singapore Business Network on
DisAbility. Four Singtel staff members
mentored tertiary students with
special needs to help them uncover
their abilities and skills.

In a ﬁ rst for Optus and our non-
proﬁ t partner, Australian Business
and Community Network (ABCN),
we rolled out the Pathways 2
Employment Programme. An
extension of our current mentoring
and employment programmes,
Pathways 2 Employment prepares
disadvantaged young people for job
interviews and employment with
Optus. Our staff volunteers helped
56 ABCN students develop skills and
grow their conﬁ dence and by the end

of the programme, six students were
selected for roles in our Yes Optus
stores over the busy Christmas period,
with one student off ered an ongoing
regular role.

DEVELOPING GOOD
DIGITAL HABITS
We champion good digital citizenship,
where the young and vulnerable
are empowered to navigate the
online world safely. Our digital
citizenship programmes called
Digital Thumbprint Programme teach
students in Australia and Singapore
to create a positive online presence
while arming them with the facts
they need to stay safe online. This
is done through workshops, talks
and activities in ways that they can
understand, use and enjoy. The

Singapore Telecommunications Limited | Annual Report 2017

104

Sustainability

Australian Kids Helpline@School,
which was introduced in Australian
primary schools during the year,
complements the Optus Digital
Thumbprint Programme by off ering
digital literacy and education modules
which can be accessed via webstream.

In Singapore, we identiﬁ ed a gap
in the cyber wellness education
of special needs students, and
introduced the Singtel Cyber Wellness
Toolkit in special education schools
to teach students how to stay safe
online. The toolkit comprises teaching
resource materials for teachers and
workbooks that cater to students of
diff erent age groups.

We are also the strategic partner of
#DQEveryChild, a global programme
to equip children between the ages
of eight and 12 with the social,
emotional and cognitive skills
necessary for online safety, thus
improving their Digital Intelligence
Quotient or DQ. The programme,
piloted in Singapore in mid-2016,
showed that the students’ DQ
improved by 10%, indicating that they
were less likely to engage in risky
behaviour online after going through
the course.

Some of Singtel’s regional associates
are now driving digital citizenship
initiatives in their markets. In the

Philippines, Globe unveiled its
Digital Thumbprint Programme
in May 2016, while Telkomsel ran
TV and social media campaigns in
Indonesia, highlighting the dangers of
cyberspace.

DRIVING SOCIAL INNOVATION
As a global ICT player, we are in
a strong position to improve lives
through technology and innovation.
We believe that by collaborating
with our ecosystem of partners,
such as non-proﬁ t organisations,
government, corporates, social
enterprises and start-ups, we can
create bigger and more meaningful
social impact across the region.

ENRIQUE SUANA
Optus Soho Micro Category Executive

Enrique used to run alone until he came across the Achilles
Running Club which paired runners like him with people
like Stephen who have physical disabilities. While it took
them some time to get used to each other, the pair have
been running mates for three years now. Connected by a
tether, they clock a speed of 3 min/km and are regulars at
many marathons. No small feat as Stephen runs with his
eyes closed due to a rare neurological condition. Today,
Enrique can no longer imagine running alone.

105

Optus Future Makers 2016 teams celebrating their win at the pitch event.

What the media said
"Optus is again shaking its innovation rattle – this time with
a programme offering six capital injections of up to $50,000
for ideas that can 'change the social landscape' for young
Australians." – Beverley Head, iStart

The Optus and Singtel Future Makers
programmes were launched in
Australia and Singapore to address
the nascent use of technology in the
social sector and to strengthen the
holistic capacity building for social
entrepreneurs. The programmes
aim to establish a community of
support for social enterprises and
leverage technology and innovation
for social impact. Singtel staff from
our venture-capital arm Singtel
Innov8, Yes Labs, HungryGoWhere,

digital marketing, communications,
consumer, HR, strategy and legal
departments also contributed to
this community through mentoring
and volunteering at workshops to
share their experiences and insights
with the participants. Under the
programme, we funded seven
start-ups in Singapore and six in
Australia with S$20,000 and A$50,000
respectively. Following its success,
we are expanding our programme
to include Globe Future Makers in

the Philippines, and introducing a
regional element for cross-sharing
of competencies, networks and
experiences to allow change makers
with the most promising solutions
the opportunity to scale their social
impact regionally.

GIVING TIME TO WORTHY CAUSES
We encourage staff to give back to
the communities that we operate
in. They are given one day of paid
volunteer leave each year, and

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106

Sustainability

our business units are encouraged
to engage in VolunTeaming, or
department teambuilding with a
volunteering element.

Each year, our employees in
Singapore organise the Singtel
Carnival for children with special
needs. In 2016, we saw over 1,700
staff volunteers come together to set
up food and game stalls, and stage
entertainment to bring joy to over
1,000 special needs students.

In Optus, our employees actively
volunteer and mentor vulnerable
youth in high-needs schools across
Australia. Since 2005, over 3,500
volunteer and mentor roles have been

ﬁlled by Optus staff, totalling over
35,000 hours of volunteering activity
on company time.

Our employees also have the
opportunity to participate in our
annual Overseas Volunteering
Programme, which is conducted
jointly with our regional associates.
During the year, 30 staff volunteers
from Singtel, Optus and our Philippine
associate Globe undertook a
community upgrading project in
Metro Manila. 20 staff volunteers from
Singtel, Optus and our Thai associate
AIS also took part in our second
AIS-Singtel English Camp to mentor
and help 35 Thai undergraduates to
improve their conversational English.

RAISING FUNDS FOR GOOD
In Singapore, the Singtel Touching
Lives Fund has raised more than
S$36 million since 2002. In 2016,
we commemorated 15 years of STLF
by donating S$2 for every dollar
contributed by employees to the
fund. Together with other fundraising
activities like our charity golf, we
raised a total of S$3 million.

Our Optus staff donations portal
yes4Good has seen our people
contribute over A$3.4 million since
2005. In addition, we match staff
giving up to A$300 per person per
year. Our collective contributions
through our Yes4Good programme
have exceeded A$5.3 million.

A record 1,700 Singtel staff volunteers organised the 4th Singtel Carnival for students from special education schools in Singapore.

107

DANIEL LUI HONG TUCK
Singtel Senior Associate Engineer

Daniel will never forget how inadequate he felt as a child
growing up without school essentials. His parents had to
work multiple jobs to see him and his younger brother
through school right up to university. Today, the father
of one is in a far better position in life and wants to pay it
forward. He dedicates his time to the 'Ready for School'
programme organised by the Chinese Development
Assistance Council. Every December, he spends a weekend
with children from low-income families and gives out
much-needed stationery and books.

SUSTAINABILITY PILLAR 4
MARKETPLACE AND CUSTOMERS – THE BEST EXPERIENCE

Just as we hold ourselves to the
highest corporate standards, we
expect the same of our supply chain.

We require all new suppliers
to comply in key areas such as
ethical practices, environmental
management and human rights, and
are progressively working through
all our existing suppliers to evaluate
these risks and ensure compliance.

We aim to be a Sustainable Supply
Chain Management industry leader by
2020. Besides aligning our Supplier
Code of Conduct with our UN Global

Compact commitments, we are
working to adhere to the guidelines
set by the International Standard for
Sustainable Procurement (ISO 20400),
the recognised global benchmark on
responsible sourcing.

As customer data privacy and
protection is of paramount
importance to our stakeholders and
the Singtel Group, we are committed
to complying with local laws and
regulations. We also conduct frequent
audits across the Group to sustain and
reﬁ ne our customer data protection
policies as well as mitigate risk. Our

global cyber security solutions also
enable our enterprise customers
to achieve the highest level of data
security and protection.

More information on our sustainability
eff orts can be found in the Singtel
Group Sustainability Report 2017.

Singapore Telecommunications Limited | Annual Report 2017

108

Sustainability

KEY ENVIRONMENTAL AND SOCIAL PERFORMANCE INDICATORS

Singapore

Australia

2017

2016

2017

2016

Enviromental Performance (1)

Energy use (GJ)
Carbon footprint (tonnes CO2 equivalent)
Water use (cubic metres)
Hazardous and non-hazardous waste
(tonnes)

Social Performance: People

Employee turnover (%)

Employee turnover by gender (%)

– Male

– Female

Average training hours per employee

Employee health and safety (3)

– Workplace injury incidence rate

– Workplace injury frequency rate

– Workplace injury severity rate

1,404,843

1,379,633

1,702,440

173,811

814,447
4,613

174,112

756,398
4,223

418,269

82,111 (2)
1,853

1,657,262

420,827

70,254 (2)
1,503

16.4

17.0

15.4

30.4

1.3

0.6

3.3

14.5

14.7

14.3

32.5

1.3

0.6

5.9

15.4

14.3

17.6

30.9

1.3

0.8

8.7

10.7

9.1

14.1

31.7

1.3

0.8

12.9

Social Performance: Community

Community investment ($ million) (4)
Total volunteering hours

S$8.3
17,140

S$26.7 (5)
15,981

A$8.2
16,420

A$8.7
16,194

Notes:
(1) Please refer to the Singtel Group and Optus sustainability reports for the reporting scope of environmental indicators.
(2) Water use for Optus Sydney Campus only.
(3) Workplace safety and health metrics based on the International Labour Organization (ILO) deﬁnitions.
(4) Community investment has been veriﬁed by The London Benchmarking Group (LBG).
(5)

Includes a partial allocation of a one-time donation of S$20 million to National Gallery Singapore.

109

Group Five-year
Financial Summary

Income Statement (S$ million)
Group operating revenue

Singtel
Optus
Optus (A$ million)

Group EBITDA

Singtel
Optus
Optus (A$ million)

Share of associates' pre-tax profits
Group EBITDA and share of associates' pre-tax profits
Group EBIT
Net profit after tax
Underlying net profit (1)
Exchange rate (A$ against S$) (2)

Cash Flow (S$ million)
Group free cash flow (3)

Singtel
Optus
Optus (A$ million)
Associates' dividends (net of withholding tax)

Cash capital expenditure

Balance Sheet (S$ million)
Total assets
Shareholders' funds
Net debt

Key Ratios
Proportionate EBITDA from outside Singapore (%)
Return on invested capital (%) (4)
Return on equity (%)
Return on total assets (%)
Net debt to EBITDA and share of associates'

pre-tax profits (number of times)

EBITDA and share of associates' pre-tax profits
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

Financial Year ended 31 March

2017

2016

2015

2014

2013

16,711
7,928
8,784
8,425

4,998
2,213
2,784
2,669

2,942
7,939
5,701
3,853
3,915
1.043

3,054
1,040
514
500
1,500
2,261

16,961
7,663
9,298
9,115

5,013
2,187
2,825
2,771

2,791
7,804
5,655
3,871
3,805
1.020

2,718
869
631
617
1,218
1,930

17,223
7,348
9,875
8,790

5,091
2,146
2,945
2,624

2,579
7,670
5,508
3,782
3,779
1.123

3,549
1,379
1,070
976
1,100
2,238

16,848
6,912
9,936
8,466

5,155
2,223
2,932
2,502

2,201
7,357
5,224
3,652
3,610
1.174

3,249
1,181
1,020
903
1,048
2,102

18,183
6,732
11,451
8,934

5,200
2,147
3,053
2,381

2,106
7,306
5,178
3,508
3,611
1.282

3,759
1,491
1,367
1,068
900
2,059

48,294
28,214
10,384

43,566
24,989
9,142

42,067
24,733
7,963

39,320
23,868
7,534

39,984
23,965
7,477

75
11.1
14.5
8.3

1.3

23.6

23.96
24.35
173
17.5

74
11.7
15.6
9.0

1.2

25.3

24.29
23.88
157
17.5

74
12.1
15.6
9.3

1.0

29.2

23.73
23.71
155
17.5

73
11.6
15.3
9.2

1.0

28.7

22.92
22.65
150
16.8

75
11.8
14.8
8.7

1.0

24.5

22.02
22.66
150
16.8

''Singtel'' refers to the Singtel Group excluding Optus.

Notes:
(1) Underlying net profit is defined as net profit before exceptional items.
(2) Average A$ rate for translation of Optus' operating revenue.
(3) Free cash flow refers to cash flow from operating activities, including dividends from associates, less cash capital expenditure.
(4) Return on invested capital is defined as EBIT (post-tax) divided by average capital.

Singapore Telecommunications Limited | Annual Report 2017

110

Group Five-year
Financial Summary

5 YEAR FINANCIAL REVIEW

FY 2017
The Group delivered resilient earnings
amid heightened competition across all the
markets the Group operated in. Operating
revenue was S$16.71 billion, 1.5% lower
than FY 2016 but would have increased
2.0% excluding the impact of regulatory
mobile termination rates change in Australia
from 1 January 2016. EBITDA remained
stable at S$5.0 billion. The Australian Dollar

FY 2016
The Group delivered a strong performance
with resilient core business and robust
contributions from associates. Operating
revenue was S$16.96 billion, 1.5% lower
than FY 2015 with the Australian Dollar
declining a steep 9% against the Singapore
Dollar and the impact of lower mobile
termination rates in Australia from 1
January 2016. In constant currency terms,
operating revenue would have grown 4.1%
across all business units with ﬁrst time

FY 2015
The Group delivered a strong set of results.
Operating revenue was S$17.22 billion,
2.2% higher than FY 2014 with growth
across all the business units. EBITDA was
S$5.09 billion, 1.3% lower than FY 2014
with the Australian Dollar weakening 4%
against the Singapore Dollar. In constant
currency terms, revenue grew 4.8% and
EBITDA rose 1.3% despite operating losses
from the digital businesses.

FY 2014
The Group delivered a resilient
performance against industry challenges
and currency headwinds. Operating
revenue was S$16.85 billion, 7.3% lower
than FY 2013 with the Australian Dollar
weakening 8% against the Singapore
Dollar. In constant currency terms,
revenue would have declined 2.3% with
lower mobile revenue in Australia and a
cautious business climate. EBITDA was
relatively stable at S$5.16 billion but in

FY 2013
The Group delivered resilient earnings
amid signiﬁcant industry changes while
it continued to invest in transformational
initiatives to drive long-term growth.
Operating revenue was S$18.18 billion, 3.4%
lower than FY 2012 due to lower mobile
revenue in Australia. EBITDA was stable at
S$5.20 billion. In constant currency terms,
revenue declined 2.1% but EBITDA grew
1.0% on strong cost management.

111

appreciated 2% against the Singapore
Dollar from a year ago. In constant currency
terms, operating revenue and EBITDA
decreased by 2.6% and 1.5% respectively.

Telkomsel and NetLink Trust, as well as ﬁrst
time contribution from Intouch (acquired in
November 2016) was partly offset by lower
proﬁts at Airtel, AIS and Globe.

The associates’ pre-tax contributions rose
5.4% to S$2.94 billion despite weakness
in Airtel which faced intense price
competition in India. Strong growth at

Underlying net proﬁt grew 2.9% and net
proﬁt was stable at S$3.85 billion with
an exceptional loss compared to an
exceptional gain in FY 2016.

contribution from Trustwave, Inc. (a newly
acquired cyber security business). EBITDA
was S$5.01 billion, 1.5% lower than FY 2015
and in constant currency terms, would
have increased 4.1% with strong cost
management.

The associates’ pre-tax contributions rose
8.2% to S$2.79 billion and would have
increased 9.7% excluding the currency
translation impact. The regional associates

recorded strong customer growth and
robust mobile data growth, with higher
earnings from Telkomsel and Globe
offsetting the decline in Airtel.

Underlying net proﬁt was stable and
net proﬁt including exceptional items
increased 2.4% to S$3.87 billion. In
constant currency terms, underlying net
proﬁt and net proﬁt would have increased
4.0% and 5.5% respectively from FY 2015.

The associates’ pre-tax contributions
rose strongly by 17% to S$2.58 billion and
would have increased 21% excluding the
currency translation impact. The regional
associates registered strong customer
growth and increased demand for mobile
data services, with earnings growth led by
Airtel India, Telkomsel and Globe.

Underlying net proﬁt grew 4.7% and
net proﬁt including exceptional items
increased 3.5% to S$3.78 billion. In
constant currency terms, underlying net
proﬁt and net proﬁt would have increased
7.5% and 6.2% respectively from FY 2014.

constant currency terms increased 4.5% on
an improved cost structure.

The associates’ pre-tax contributions rose
4.5% to S$2.20 billion and would have
increased strongly by 13% excluding the
currency translation impact. The regional
associates registered robust demand for
mobile data services, with earnings growth
led by Airtel India.

Underlying net proﬁt was stable at S$3.61
billion and net proﬁt including exceptional
items grew 4.1% to S$3.65 billion. In
constant currency terms, underlying net
proﬁt and net proﬁt would have increased
5.9% and 10% respectively from FY 2013.

The associates’ pre-tax contributions
grew 5.0% to S$2.11 billion. Excluding the
currency translation impact, the associates’
pre-tax contributions would have
increased strongly by 12%, underpinned
by double-digit earnings growth from
Telkomsel and AIS.

Underlying net proﬁt was S$3.61 billion, a
decrease of 1.8% from FY 2012. Excluding
currency translation impact, underlying net
proﬁt rose 1.4%. Including net exceptional
losses mainly from disposal of Warid
Pakistan in FY 2013, net proﬁt declined 12%
to S$3.51 billion in FY 2013.

Group Value Added
Statements

GROUP VALUE ADDED STATEMENTS

PRODUCTIVITY DATA

Value added from:

Operating revenue
Less: Purchase of goods and services

Other income
Interest and investment income (net)
Share of results of associates (post-tax)
Exceptional items

FY 2017
S$ million

FY 2016
S$ million

16,711
(9,406)
7,306

16,961
(9,662)
7,299

215
115
2,017
(1)
2,346

148
95
2,027
(45)
2,225

Total value added

9,652

9,524

Distribution of total value added

To employees in wages, salaries and beneﬁts
To government in income and other taxes
To providers of capital on:
- Interest on borrowings
- Dividends to shareholders

2,523
684

374
2,816

2,434
723

360
2,789

Total distribution

6,398

6,306

VALUE ADDED
(S$ million)

2017

2016

9,652

9,524

+128

VALUE ADDED PER EMPLOYEE
(S$'000)

2017

2016

377

372

VALUE ADDED PER DOLLAR
OF EMPLOYEE COSTS
(S$)

2017

2016

3.82

3.91

-0.09

Retained in business

Depreciation and amortisation
Retained proﬁts
Non-controlling interests

2,239
1,037
(22)
3,254

2,149
1,082
(13)
3,218

VALUE ADDED PER DOLLAR
OF TURNOVER
(S$)

Total value added

9,652

9,524

Average number of employees

25,590

25,610

2017

2016

0.58

0.56

+0.02

Singapore Telecommunications Limited | Annual Report 2017

112

Management
Discussion and Analysis

GROUP

Operating revenue

EBITDA

EBITDA margin

Financial Year ended 31 March

2017
(S$ million)

2016
(S$ million)

Change (%)

Change in
constant
currency
(%)

(1)

16,711

16,961

4,998

5,013

29.9%

29.6%

-1.5

-0.3

5.4

0.8
-3.7

-2.0

-3.1

2.9

2.0

-0.5

-1.4

8.4

-2.6

-1.5

5.6

0.3
-4.8

-3.4

-3.2

2.3

1.4

-1.0

-1.9

8.3

Share of associates' pre-tax proﬁts

2,942

2,791

EBIT

(exclude share of associates' pre-tax proﬁts)

Net ﬁnance expense

Taxation

Underlying net proﬁt (2)

Underlying earnings per share (S cents)

Exceptional items (post-tax)

Net proﬁt

5,701
2,759

5,655
2,864

(260)

(265)

(1,548)

(1,597)

3,915

3,805

24.4

(63)

23.9

3,853

3,871

Basic earnings per share (S cents)

24.0

24.3

Share of associates' post-tax proﬁts

2,093

1,930

‘’Associate’’ refers to either an associate or a joint venture as deﬁned under Singapore Financial Reporting Standards.
“nm” denotes not meaningful.

Notes:
(1) Assuming constant exchange rates for the Australian Dollar, United States Dollar and/or regional currencies (Indian Rupee, Indonesian Rupiah,

Philippine Peso and Thai Baht) from the previous year ended 31 March 2016 (FY 2016).

(2) Underlying net proﬁt refers to net proﬁt before exceptional items.

113

The Group performed in line with its
guidance for the ﬁnancial year ended
31 March 2017.

Underlying net proﬁt grew 2.9% on
higher associates’ earnings and lower
tax expenses. With an exceptional loss
compared to an exceptional gain in FY
2016, net proﬁt was stable at S$3.85
billion. Excluding Airtel which faced
disruptive price competition in India,
net proﬁt would have grown 2.3%.

The Group’s operating revenue
declined by 1.5% due mainly to
continued declines in voice (local,
IDD, roaming) partially offset by
strong growth in data, ICT and digital
revenues. Excluding the impact of
regulatory mobile termination rates (1)
change in Australia from 1 January
2016 (“rates change”), operating
revenue would have been up 2.0%.

EBITDA remained stable with
investments in content and network
expansion, reﬂecting resilience in
the core businesses with strong cost
management.

Depreciation and amortisation
charges rose on increased network
and spectrum investments, and
higher amortisation charges on the
acquired intangibles of Trustwave, Inc.
("Trustwave").

Consequently, the Group’s EBIT
(before the associates’ contributions)
declined 3.7%.

In the emerging markets, the regional
associates continued to record strong
growth in customer base and data
usage with strategic investments
in networks and spectrum. The
customer base of the Group and its
associates reached 638 million in 22
countries as at 31 March 2017, up 5.4%
or 33 million from a year ago.

Despite weakness in Airtel India,
the associates’ post-tax underlying
proﬁt contributions rose 8.4%. The
increase was led by strong growth
at Telkomsel and NetLink Trust, and
ﬁrst time contribution from Intouch
Holdings Public Company Limited
(“Intouch”) acquired in November
2016, offsetting lower proﬁts at Airtel,
AIS and Globe.

Telkomsel continued to deliver robust
growth across voice, data and digital
services. On a consolidated basis,
Airtel’s earnings fell, even as operating
performance in Africa has improved.
In India, Airtel’s results were adversely
affected by the new operator which
offered free voice and data, as well
as higher network depreciation,
spectrum amortisation and related
ﬁnancing costs. Both AIS and Globe
recorded higher revenues but
earnings were impacted by increased
depreciation, spectrum amortisation
charges and ﬁnancing costs. NetLink
Trust’s revenue and earnings grew at
double-digit on the back of increased
ﬁbre penetration in Singapore.

Including the associates’
contributions, the Group’s EBIT was
stable at S$5.70 billion.

Net ﬁnance expense declined 2.0%
on higher dividend income from the
Southern Cross consortium partly
offset by higher interest expense on
increased borrowings and lower net
interest income from NetLink Trust
as a result of partial repayment of
unitholder’s loan by NetLink Trust in
March 2016.

The net exceptional loss mainly
comprised share of AIS’ handset
subsidy costs, share of Singapore
Post’s exceptional loss, and staff
restructuring costs partly offset by a
gain on dilution of equity interest in
Singapore Post.

The Group has successfully
diversiﬁed its earnings base through
its expansion and investments in
overseas markets. Hence, the Group
is exposed to currency movements.
On a proportionate basis if the
associates are consolidated line-by-
line, operations outside Singapore
accounted for three-quarters of both
the Group’s proportionate revenue
and EBITDA.

Note:
(1) Mobile termination rates are the fees charged by mobile operators for receiving calls and messages on their networks.

Singapore Telecommunications Limited | Annual Report 2017

114

Management
Discussion and Analysis

BUSINESS SEGMENT

Operating revenue

- Group Consumer
- Group Enterprise
Core Business
- Group Digital Life

Group

EBITDA
- Group Consumer
- Group Enterprise
Core Business
- Group Digital Life
- Corporate

Group

EBIT (before share of associates' pre-tax proﬁts)
- Group Consumer
- Group Enterprise
Core Business
- Group Digital Life
- Corporate

Group

Financial Year ended 31 March

2017
(S$ million)

2016
(S$ million)

Change (%)

Change in
constant
currency
(%)

(1)

9,572
6,600
16,172
539

10,110
6,397
16,507
454

16,711

16,961

3,295
1,913
5,208
(122)
(88)

3,266
1,959
5,225
(137)
(76)

4,998

5,013

1,771
1,268
3,039
(190)
(90)

1,811
1,337
3,148
(206)
(79)

2,759

2,864

-5.3
3.2
-2.0
18.7

-1.5

0.9
-2.3
-0.3
-10.6
16.8

-0.3

-2.2
-5.1
-3.5
-7.4
14.2

-3.7

-6.9
2.7
-3.2
18.8

-2.6

-0.9
-2.6
-1.5
-10.5
16.8

-1.5

-3.9
-5.2
-4.5
-7.3
14.2

-4.8

Note:
(1) Assuming constant exchange rates for the Australian Dollar and United States Dollar from FY 2016.

115

GROUP CONSUMER
Group Consumer contributed 57% (FY
2016: 60%) and 66% (FY 2016: 65%)
to the Group’s operating revenue
and EBITDA respectively. Operating
revenue declined by 5.3% (stable
excluding the rates change) while
EBITDA was stable and EBIT declined
2.2% on higher depreciation and
amortisation charges with increased
investments in mobile network and
spectrum.

Singapore Consumer’s operating
revenue fell 1.9% on lower voice
services and Equipment sales
partly offset by growth in mobile
data and Home services. Mobile
Communications, which contributed
55% of Singapore Consumer’s
revenue, was stable as strong data
growth mitigated the declines in
local and roaming voice. Consumer
Home revenue (comprising ﬁxed
broadband, Singtel TV and voice) rose
4.4% boosted by increased demand
for higher speed ﬁbre broadband
plans and the sub-licensing of
content rights for the Premier League
2016/2017 season. Despite lower
revenue, EBITDA grew 2.4% with
strong cost management.

In Australia Consumer, operating
revenue declined 8.4% on decline in
mobile but increased 2.8% excluding
the impacts of device repayment plan
credits and rates change. Outgoing
mobile service revenue declined 5.2%
but would be up 2.7% excluding the
impact of device repayment plan
credits, driven by strong customer
additions underpinned by a robust
and resilient mobile network. Mass
Market Fixed revenue grew 8.0%
driven by higher NBN (National
Broadband Network) revenue. With
lower revenue and investment in
content, EBITDA decreased 1.9%.

GROUP ENTERPRISE
Group Enterprise contributed 39%
(FY 2016: 38%) and 38% (FY 2016:
39%) to the Group’s operating
revenue and EBITDA respectively.
Operating revenue grew 3.2% as
strong ICT performance mainly
from cyber security and provision of
infrastructure services in Singapore
was partly offset by continued price
declines in carriage services and lower
voice. ICT which includes cloud, cyber
security, and smart city solutions,
contributed 45% of total enterprise
revenue and grew 11%. Overall
EBITDA declined 2.3% due to ongoing

investments to build ICT capabilities
and intense price competition in
Australia. EBIT decreased 5.1% after
including the amortisation of acquired
intangibles of Trustwave. Excluding
Trustwave, EBITDA and EBIT would
have declined by 1.2% and 1.8%
respectively.

GROUP DIGITAL LIFE
Group Digital Life has three main
businesses, namely digital marketing
(Amobee), regional premium OTT
video (HOOQ) and advanced
data analytics and intelligence
(DataSpark). Operating revenue was
up 19% driven mainly by Amobee’s
strong performance in social, video
and display advertising. Negative
EBITDA fell 11% due to lower losses
at Amobee on increased scale
partly offset by higher content and
marketing costs at HOOQ as it
ramped up its operations. Negative
EBIT decreased 7.4% after including
depreciation and amortisation of
acquired intangibles of Amobee.

With acquisition of Turn, Inc. on 10
April 2017, Amobee is now one of the
largest independent digital marketing
technology companies globally.

Singapore Telecommunications Limited | Annual Report 2017

116

Management
Discussion and Analysis

ASSOCIATES

Group share of associates' pre-tax proﬁts

2,942

2,791

5.4

5.6

Financial Year ended 31 March

2017
(S$ million)

2016
(S$ million)

Change (%)

Change in
constant
currency
(%)

(1)

Share of post-tax proﬁts
Telkomsel
AIS (2)
Airtel (2)
- ordinary results (India and South Asia)
- ordinary results (Africa)
- exceptional items

Globe
- ordinary results
- exceptional items

Intouch (3)
- operating results
- amortisation of acquired intangibles

1,071
323

371
(102)
-
270

208
-
208

35
(7)
28

857
370

527
(195)
(15)
316

215
20
235

-
-
-

Regional associates

1,899

1,779

NetLink Trust (4)
- operating results
- amortisation of deferred gain

Other associates (2)

73
57
130

39
56
95

Group share of associates' post-tax proﬁts

2,093

1,930

“nm” denotes not meaningful.

24.9
-12.8

-29.5
-48.0
nm
-14.7

-3.3
nm
-11.6

nm
nm
nm

6.8

90.6
1.1
37.6

12.2

8.4

22.2
-12.2

-27.1
-45.8
nm
-12.1

0.8
nm
-7.9

nm
nm
nm

6.7

90.6
1.1
37.6

12.2

8.3

Notes:
(1) Assuming constant exchange rates for the regional currencies (Indian Rupee, Indonesian Rupiah, Philippine Peso and Thai Baht) from FY 2016.
(2) Share of results of the associates as shown in the table above excluded the Group’s share of certain exceptional items of AIS, Airtel and Singapore Post

which have been classiﬁed as exceptional items of the Group in view of their materiality.
Intouch, which Singtel acquired an equity interest of 21% in November 2016, has an equity interest of 40.5% in AIS.

(3)

(4) NetLink Trust is 100% owned by Singtel and is equity accounted as an associate in the Group as Singtel does not control it. The deferred gain arose

from Singtel’s gain on disposal of assets and business to NetLink Trust in prior years, which was deferred in the Group’s balance sheet and amortised
over the useful lives of the transferred assets.

Country mobile penetration rate
Market share, 31 March 2017 (2)
Market share, 31 March 2016 (2)
Market position (2)

Mobile customers ('000)
- Aggregate
- Proportionate
Growth in mobile customers (%) (3)

Telkomsel

AIS

Airtel (1)

137%
45.8%
48.0%
#1

135%
44.8%
45.9%
#1

91%
23.3%
24.3%
#1

Globe

118%
48.1%
45.8%
#2

169,367
59,278
10%

40,648
9,479
4.4%

355,673
129,678
4.0%

58,580
27,615
2.3%

Notes:
(1) Mobile penetration rate, market share and market position pertained to India market only.
(2) Based on number of mobile customers.
(3) Compared against 31 March 2016 and based on aggregate mobile customers.

117

The regional associates continued
to record robust mobile data growth
on the back of strategic investments
in networks and spectrum. The
associates’ pre-tax and post-tax
underlying proﬁt contributions
grew 5.4% and 8.4% respectively.
The increases were underpinned by
strong performances at Telkomsel and
NetLink Trust, as well as contribution
from Intouch which was acquired in
November 2016, partly offset by lower
proﬁts at Airtel, AIS and Globe.

The Group’s combined mobile
customer base reached 638 million,
a growth of 5.4% or 33 million from
a year ago. Telkomsel registered 10%
increase in its customer base to 169
million, including 90 million of data
customers as at end of March 2017.
Airtel’s total mobile customer base
covering India, Sri Lanka and across
Africa, reached 356 million as at 31
March 2017. This represented an
increase of 4.0%, or a growth of 6.6%
excluding operations in Bangladesh,
from a year ago.

Telkomsel performed strongly and
delivered double-digit growth in
operating revenue and EBITDA of 12%
and 14% respectively. The increase
was boosted by growth across voice,
data and digital businesses on a
higher customer base, increased
smartphone penetration and
improvement in network quality. With
lower depreciation charges due to
accelerated depreciation on certain

equipment in the previous year,
Telkomsel’s post-tax contribution
grew 25%.

costs in India, Airtel’s post-tax
contribution declined 15%.

AIS’ service revenue grew 3%
on higher data usage driven by
improved 4G network coverage,
and higher postpaid and ﬁxed
broadband revenues. EBITDA
(before handset subsidy) rose 2% (2)
on lower regulatory fees partly
offset by higher network costs from
network expansion. With higher
spectrum amortisation charges and
related ﬁnancing costs, AIS’ post-tax
contribution declined 13%.

In India, the mobile industry declined
on entry of a new operator which
offered free voice and data services.
Consequently, Airtel’s operating
revenue grew only 4% in India on
growth in non-mobile segments,
while mobile revenue was stable.
EBITDA rose 5% on aggressive cost
optimisation drive. In Africa, operating
revenue fell 3% in constant currency
terms but would have increased 3%
if excluding the disposed subsidiaries
(Burkina Faso and Sierra Leone) on
growth in data customer base and
consumption. EBITDA rose 13% on
improved operational efficiency. The
depreciation of African currencies
mainly Nigerian Naira had resulted
in declines in US Dollar reported
revenue and EBITDA of 15% and 4%
respectively. With higher depreciation
from network assets and increased
spectrum amortisation and ﬁnancing

Globe’s service revenue grew 4%
driven by growth in mobile data,
broadband and corporate businesses
partially offset by lower voice. EBITDA
rose 5% despite higher network costs
to support the growing customer base
and network expansion. The growth
was offset by higher depreciation
charges from an expanded asset base
and equity accounted losses of Vega
Telecom, Inc. from May 2016, and the
acquisition-related interest expense.
In addition, certain one-off disposal
and fair value gains were recorded in
FY 2016. Consequently, Globe’s post-
tax contribution declined 12%.

In November 2016, Singtel acquired
21% equity interest in Intouch (3). The
Group’s share of Intouch’s post-
tax proﬁt was S$35 million. After
including amortisation of acquired
intangibles of S$7 million, Intouch’s
post-tax contribution was S$28
million.

NetLink Trust’s revenue and
EBITDA grew strongly at 16% and
20% respectively, while its net proﬁt
contribution (including S$57 million of
amortised gain arising from deferred
gain on disposal of assets and
business) rose 38%. The growth was
mainly driven by an increase in ﬁbre
connections.

Notes:
(2) Including 2G to 3G/4G handset subsidy costs classiﬁed as an exceptional item of the Group, EBITDA and post-tax proﬁt would have declined by 2% and

19% respectively in Thai Baht terms from FY 2016.

(3) Intouch is listed on the Stock Exchange of Thailand and has investments in telecommunications via its 40.5% equity interest in AIS, as well as in satellite,

internet, and media and advertising businesses.

Singapore Telecommunications Limited | Annual Report 2017

118

Management
Discussion and Analysis

CASH FLOW

Financial Year ended 31 March

2017
(S$ million)

2016
(S$ million)

Change (%)

Net cash inﬂow from operating activities

5,315

4,648

Net cash outﬂow for investing activities

(4,832)

(2,740)

14.4

76.4

Net cash outﬂow for ﬁnancing activities

(422)

(2,044)

-79.3

Net change in cash balance

Exchange effects on cash balance

Cash balance at beginning of year

Cash balance at end of year

Singtel (1)
Optus (2)
Associates (net dividends after withholding tax)

Group free cash ﬂow (2)
(exclude ATO tax payment)

Optus (in A$) (2)
(exclude ATO tax payment)

Cash capital expenditure as a percentage of operating revenue

“nm” denotes not meaningful.

462

534

1,040
514
1,500

3,054
3,197

500
634

14%

(136)

563

462

869
631
1,218

2,718
2,718

617
617

11%

-65.8

-17.9

15.6

19.7
-18.5
23.2

12.4
17.6

-19.0
2.7

Notes:
(1) Refers to Singtel Group excluding Optus.
(2) After S$142 million (A$134 million) paid to the Australian Taxation Office ("ATO") in FY 2017 for amended assessments under dispute relating to the

acquisition ﬁnancing of Optus.

The Group’s net cash inﬂow from
operating activities for the year grew
14% to S$5.32 billion. The increase was
due to higher dividends from associates
and working capital movements partly
offset by higher capital expenditure.
The dividends from associates grew
23% due mainly to higher dividends
from Telkomsel and Southern Cross
consortium as well as distribution
received from NetLink Trust.

The investing cash outﬂow was S$4.83
billion. In November 2016, the Group
paid S$1.59 billion and S$884 million for
the acquisitions of 21% equity interest
in Intouch and an additional 7.4% equity

interest in Bharti Telecom Limited
(“BTL”) respectively. Capital expenditure
totalled S$2.26 billion, comprising S$851
million for Singtel and S$1.41 billion
(A$1.35 billion) for Optus. In Singtel,
major capital investments in the year
included S$351 million for ﬁxed and
data infrastructure, S$168 million for
mobile networks and S$332 million for
ICT and other investments. In Optus,
capital investments in mobile networks
amounted to A$678 million with the
balance in ﬁxed and other investments.

The Group’s free cash ﬂow increased
12% to S$3.05 billion and grew 18%
excluding the tax payment to the ATO,

on higher operating cash partly offset by
higher capital expenditure.

Net cash outﬂow for ﬁnancing activities
amounted to S$422 million. Major cash
inﬂows included proceeds received
from the issuance of 386 million
ordinary shares of Singtel totalling
S$1.60 billion and net increase in
borrowings of S$1.16 billion. Financing
cash outﬂows included payments of
S$1.71 billion for ﬁnal dividends in
respect of FY 2016, and S$1.11 billion for
interim dividends in respect of FY 2017.

119

SUMMARY STATEMENTS OF FINANCIAL POSITION

Current assets

Non-current assets

Total assets

Current liabilities

Non-current liabilities

Total liabilities

Net assets

Share capital
Retained earnings
Currency translation reserve (1)
Other reserves

Equity attributable to shareholders

Non-controlling interests and other reserve

As at 31 March

2017
(S$ million)

2016
(S$ million)

5,918
42,377

5,165
38,400

48,294

43,566

9,272

10,808

6,540

12,023

20,081

18,563

28,214

25,003

4,127
29,494
(4,508)
(900)

28,214
*

2,634
28,457
(4,940)
(1,161)

24,989
13

Total equity

28,214

25,003

“*” denotes less than S$0.5 million.

Note:
(1)

'Currency translation reserve' relates mainly to the translation of the net assets of foreign
subsidiaries, associates and joint ventures of the Group denominated mainly in Australian Dollar,
Indian Rupee, Indonesian Rupiah, Philippine Peso, Thai Baht and United States Dollar.

The Group is in a strong ﬁnancial
position as at 31 March 2017.

the acquisitions of shares in Intouch
and BTL.

Total assets increased mainly due
to investments in Intouch and BTL,
while the increase in total liabilities
reﬂected increased borrowings for
investments and general corporate
purposes.

Currency translation losses fell mainly
from the translation of the Group’s
investments in Optus and Telkomsel
from stronger Australian Dollar
and Indonesian Rupiah against the
Singapore Dollar from a year ago.

The increase in share capital was due
to the issuance of 386 million new
Singtel shares to Temasek Holdings
(Private) Limited to partially ﬁnance

Singapore Telecommunications Limited | Annual Report 2017

120

Management
Discussion and Analysis

CAPITAL MANAGEMENT

Gross debt (S$ million)

Net debt (1) (S$ million)
Net debt gearing ratio (2) (%)
Net debt to EBITDA and share of associates’ pre-tax proﬁts (number of times)
Interest cover (3) (number of times)

Financial Year Ended 31 March

2017

10,918
10,384
26.9
1.3
23.6

2016

9,604
9,142
26.8
1.2
25.3

As at 31 March 2017, the Group’s net
debt was S$10.4 billion, 14% higher
than a year ago.

The Group has one of the
strongest credit ratings among
telecommunication companies in the
Asia Paciﬁc region. Singtel is currently
rated Aa3 by Moody’s and A+ by S&P
Global Ratings. The Group continues
to maintain a healthy capital structure.

Singtel maintained its dividend
payout ratio at between 60% and
75% of underlying net proﬁt. For the
ﬁnancial year ended 31 March 2017,

the total dividend payout, including
the proposed ﬁnal dividend, was 17.5
cents per share or 73% of underlying
net proﬁt. The dividend payout is
inﬂuenced by the Group’s cash ﬂow
generation, including dividends from
associates.

The Group remains committed to
an optimal capital structure and
investment grade credit ratings, while
maintaining ﬁnancial ﬂexibility to
pursue growth.

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 non-controlling
interests.
Interest cover refers to the ratio of EBITDA
and share of associates’ pre-tax proﬁts to net
interest expense.

(3)

OUTLOOK FOR THE FINANCIAL
YEAR ENDING 31 MARCH 2018
For the Group’s outlook for the
ﬁnancial year ending 31 March 2018,
please refer to pages 9 to 10 of the

Management Discussion and Analysis
for the fourth quarter and year ended
31 March 2017 announced on 18 May
2017.

121

Financial Statements

Independent Auditor’s Report

123 Directors’ Statement
132
137 Consolidated Income Statement
138 Consolidated Statement of Comprehensive Income
139 Statements of Financial Position
140 Statements of Changes in Equity
144 Consolidated Statement of Cash Flows
147 Notes to the Financial Statements

Directors’
Statement

For the financial year ended 31 March 2017

The Directors present their statement to the members together with the audited financial statements of the Company
(“Singtel”) and its subsidiaries (the “Group”) for the financial year ended 31 March 2017.

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 137 to 227 are drawn up so as to give a true and fair view of the financial
position of the Group and of the Company as at 31 March 2017, and the financial performance, changes in equity and
cash flows of the Group and changes in equity of the Company for the financial year ended on that date; 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.

DIRECTORS

The Directors of the Company in office at the date of this statement are –

Simon Claude Israel (Chairman)
Chua Sock Koong (Group Chief Executive Officer)
Bobby Chin Yoke Choong
Venkataraman Vishnampet Ganesan
Christina Hon Kwee Fong (Christina Ong)
Low Check Kian
Peter Edward Mason AM (1)
Peter Ong Boon Kwee
Teo Swee Lian

Note:
(1) Member of the Order of Australia

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 performance shares granted under
the Singtel Performance Share Plan 2012 (the “Singtel PSP 2012”) and share options granted by Amobee Group
Pte. Ltd. (“Amobee”).

123

Directors’
Statement

For the financial year ended 31 March 2017

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 31 March 2017

At 1 April 2016

At 31 March 2017

At 1 April 2016

The Company

Singapore Telecommunications Limited
(Ordinary shares)
Simon Claude Israel
Chua Sock Koong
Bobby Chin Yoke Choong
Low Check Kian
Peter Edward Mason AM
Christina Ong
Peter Ong Boon Kwee
Teo Swee Lian

(American Depositary Shares)
Venkataraman Vishnampet Ganesan

Subsidiary Corporations

Amobee Group Pte. Ltd.
(Options to subscribe for ordinary shares)
Venkataraman Vishnampet Ganesan

Optus Finance Pty Limited
(A$250,000,000 4% fixed rate notes due 2022)
Simon Claude Israel

Related Corporations

Ascendas Funds Management (S) Limited
(Unit holdings in Ascendas Real Estate

Investment Trust)

Simon Claude Israel
Chua Sock Koong

836,275 (1)
7,034,926 (3)

–
1,490
50,000 (5)

–
870
1,550

759,338
6,692,097
–
1,490
–
–
870
1,550

3,341.45 (6)

3,341.45

750,718

1,600,000 (7)

1,600,000

1,000,000 (8)
142,000

1,000,000
142,000

(S$300,000,000 4.75% subordinated perpetual
securities issued by Ascendas Real Estate
Investment Trust)

Chua Sock Koong

S$250,000
(principal amount)

1,360 (2)
5,156,191 (4)

–
–
–
–

1,537 (2)

–

–
–

–

1,360
4,777,845
–
–
–
–
1,537
–

–

–
–

–

Singapore Telecommunications Limited | Annual Report 2017

124

Directors’
Statement

For the financial year ended 31 March 2017

DIRECTORS’ INTERESTS IN SHARES AND DEBENTURES (Cont’d)

Mapletree Commercial Trust Management Ltd.
(Unit holdings in Mapletree Commercial Trust)
Simon Claude Israel
Bobby Chin Yoke Choong

Mapletree Greater China Commercial

Trust Management Ltd.

(Unit holdings in Mapletree Greater

China Commercial Trust)

Simon Claude Israel
Chua Sock Koong
Peter Ong Boon Kwee

Mapletree Industrial Trust Management Ltd.
(Unit holdings in Mapletree Industrial Trust)
Simon Claude Israel
Chua Sock Koong
Bobby Chin Yoke Choong

Mapletree Logistics Trust Management Ltd.
(Unit holdings in Mapletree Logistics Trust)
Simon Claude Israel

Mapletree Treasury Services Limited
(S$625,500,000 4.5% perpetual capital

securities)

Simon Claude Israel

Olam International Limited
(Warrants over shares)
Low Check Kian

Holdings registered in the name of
Director or nominee

Holdings in which Director is deemed
to have an interest

At 31 March 2017

At 1 April 2016

At 31 March 2017

At 1 April 2016

4,043,520 (7)

–

3,456,000
–

–

117,000 (2)

–
100,000

1,000,000 (7)
430,000
–

1,000,000
430,000
–

–

50,000 (2)
32,000 (2)

–
50,000
32,000

990,160 (7)
11,000
129,600

990,160
11,000
129,600

1,000,000 (7)

1,000,000

S$500,000
(principal amount)

–

–
–
–

–

–
–
–

–

2,008,147 (9)

1,932,805

125

Directors’
Statement

For the financial year ended 31 March 2017

DIRECTORS’ INTERESTS IN SHARES AND DEBENTURES (Cont’d)

Singapore Airlines Limited
(Ordinary shares)
Simon Claude Israel
Chua Sock Koong
Bobby Chin Yoke Choong
Low Check Kian

Holdings registered in the name of
Director or nominee

Holdings in which Director is deemed
to have an interest

At 31 March 2017

At 1 April 2016

At 31 March 2017

At 1 April 2016

9,000 (10)
2,000
–
77,550

9,000
2,000
–
5,600

–
–

2,000 (2)

–

–
–
2,000
–

Singapore Technologies Engineering Limited
(Ordinary shares)
Christina Ong

–

Notes:
(1) 831,864 ordinary shares held in the name of Citibank Nominees Singapore Pte Ltd and 4,411 ordinary shares held in the name of DBS Nominees

(Private) Limited.

(2) Held by Director’s spouse.
(3) 688,750 ordinary shares held in the name of DBS Nominees (Private) Limited.
(4) Ms Chua Sock Koong’s deemed interest of 5,156,191 shares included:

(a) 28,137 ordinary shares held by Ms Chua’s spouse; and
(b) An aggregate of up to 5,128,054 ordinary shares in Singtel awarded to Ms Chua pursuant to the Singtel PSP 2012, subject to certain performance
criteria being met and other terms and conditions. Depending on the extent of the satisfaction of the relevant minimum performance criteria,
up to an aggregate of 7,601,822 ordinary shares may be released pursuant to the conditional awards granted.

According to the Register of Directors’ Shareholdings, Ms Chua had a deemed interest in 10,836,742 shares held by DBS Trustee Limited, the trustee
of a trust established for the purposes of the Singtel Performance Share Plan and the Singtel PSP 2012 for the benefit of eligible employees of the
Group, as at 19 November 2012, being the date on which the Securities and Futures (Disclosure of Interests) Regulations 2012 (the “SFA (DOI)
Regulations”) came into operation. Under regulation 6 of the SFA (DOI) Regulations, Ms Chua is exempted from reporting interests, and changes in
interests, in shares held by the trust, with effect from 19 November 2012.

(5) Held by Burgoyne Investments Pty Ltd as trustee for Burgoyne Superannuation Fund. Both Mr Peter Edward Mason AM and spouse are directors of

Burgoyne Investments Pty Ltd and beneficiaries of Burgoyne Superannuation Fund.

(6) 1 American Depositary Share represents 10 ordinary shares in Singtel.
(7) Held in the name of Citibank Nominees Singapore Pte Ltd.
(8) 100,000 units held jointly by Mr Israel and his spouse, and 900,000 units held in the name of Citibank Nominees Singapore Pte Ltd.
(9) Held by Cluny Capital Limited. Mr Low Check Kian is the sole shareholder of Cluny Capital Limited.
(10) 6,200 ordinary shares held in the name of Citibank Nominees Singapore Pte Ltd and 2,800 ordinary shares held in the name of DBS Nominees

(Private) Limited.

According to the register of Directors’ shareholdings, there were no changes to any of the above-mentioned interests
between the end of the financial year and 21 April 2017.

PERFORMANCE SHARES

The Executive Resource and Compensation Committee (“ERCC”) is responsible for administering the Singtel PSP
2012. At the date of this statement, the members of the ERCC are Peter Edward Mason AM (Chairman of the ERCC),
Simon Claude Israel and Teo Swee Lian.

At the Extraordinary General Meeting held on 27 July 2012, the shareholders approved the adoption of the Singtel
PSP 2012. The duration of the Singtel PSP 2012 is 10 years commencing 27 July 2012. 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.

Singapore Telecommunications Limited | Annual Report 2017

126

Directors’
Statement

For the financial year ended 31 March 2017

PERFORMANCE SHARES (Cont’d)

The participants of the Singtel PSP 2012 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, except for Restricted Share Awards which
have a performance period of two years. The number of Singtel shares that will vest for 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.

Awards comprising an aggregate of 57.6 million shares have been granted under the Singtel PSP 2012 from its
commencement to 31 March 2017.

Performance share awards granted, vested and cancelled during the financial year, and share awards outstanding at
the end of the financial year, were as follows –

Balance
as at
1 April 2016
(’000)

Share
awards
granted
(’000)

Additional
share awards
from targets
exceeded
(’000)

Share
awards
vested
(’000)

Share
awards
cancelled
(’000)

Balance
as at
31 March 2017
(’000)

Date of grant

Share award for Chairman
(Simon Claude Israel)
25.08.16

–

(77)

Performance shares
(Restricted Share Awards)
For Group Chief Executive Officer
(Chua Sock Koong)
21.06.13
23.06.14
17.06.15
20.06.16

64
102
84
–
250

For other staff
21.06.13
30.09.13
23.06.14
17.09.14
23.12.14
17.06.15
28.09.15
05.01.16
20.06.16
20.03.17

2,418
8
4,412
10
4
3,909
23
7
–
–
10,791

–
–
–
201
201

–
–
–
–
–
–
–
–
5,340
87
5,427

–
30
–
–
30

–
–
1,298
4
–
2
–
–
–
–
1,304

(64)
(66)
–
–
(130)

(2,377)
(5)
(2,855)
(7)
(2)
(54)
–
–
(8)
–
(5,308)

–

–
–
–
–
–

(41)
(3)
(214)
–
–
(262)
–
–
(214)
–
(734)

–

–
66
84
201
351

–
–
2,641
7
2
3,595
23
7
5,118
87
11,480

Sub-total

11,041

5,628

1,334

(5,438)

(734)

11,831

127

Directors’
Statement

For the financial year ended 31 March 2017

PERFORMANCE SHARES (Cont’d)

Date of grant

Balance
as at
1 April 2016
(’000)

Share
awards
granted
(’000)

Additional
share awards
from targets
exceeded
(’000)

Share
awards
vested
(’000)

Share
awards
cancelled
(’000)

Balance
as at
31 March 2017
(’000)

Performance shares
(Performance Share Awards)
For Group Chief Executive Officer
(Chua Sock Koong)
21.06.13
23.06.14
17.06.15
20.06.16

1,418
1,423
1,659
–
4,500

For other staff
21.06.13
30.09.13
23.06.14
17.09.14
23.12.14
17.06.15
28.09.15
05.01.16
20.06.16
20.03.17

Sub-total

Total

–
–
–
1,695
1,695

–
–
–
–
–
–
–
–
7,438
91
7,529

6,895
15
6,746
15
6
7,562
125
32
–
–
21,396

–
–
–
–
–

–
–
–
–
–
–
–
–
–
–
–

–

(213)
–
–
–
(213)

(1,002)
(2)
–
–
–
–
–
–
–
–
(1,004)

(1,205)
–
–
–
(1,205)

(5,893)
(13)
(222)
–
–
(245)
–
–
(65)
–
(6,438)

–
1,423
1,659
1,695
4,777

–
–
6,524
15
6
7,317
125
32
7,373
91
21,483

(1,217)

(7,643)

26,260

25,896

9,224

36,937

14,929

1,334

(6,732)

(8,377)

38,091

During the financial year, awards in respect of an aggregate of 6.7 million shares granted under the Singtel PSP 2012
were vested. The awards 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 Singtel PSP 2012.

As at 31 March 2017, no participant has received shares pursuant to the vesting of awards granted under the Singtel
PSP 2012 which, in aggregate, represents five per cent or more of the aggregate of –

(i)

the total number of new shares available under the Singtel PSP 2012; and

(ii)

the total number of existing shares purchased for delivery of awards released under the Singtel PSP 2012.

Singapore Telecommunications Limited | Annual Report 2017

128

Directors’
Statement

For the financial year ended 31 March 2017

SHARE OPTION PLANS

During the financial year, there were:

(a)

no options granted by the Company to any person to take up unissued shares of the Company; and

(b)

no shares issued by virtue of any exercise of options to take up unissued shares of the Company.

There were no unissued shares of the Company under option at the end of the financial year.

The particulars of the share option plans of subsidiary corporations of the Company are as follows:

Amobee Group Pte. Ltd.

In April 2015, Amobee, a wholly-owned subsidiary corporation of the Company, implemented the 2015 Long-Term
Incentive Plan (“Amobee LTI Plan”). Under the terms of Amobee LTI Plan, options to purchase ordinary shares of
Amobee may be granted to employees (including executive directors) and non-executive directors of Amobee
and/or any of its subsidiaries.

Options are exercisable at a price no less than 100% of the fair value of the ordinary shares of Amobee on the date
of grant.

From the commencement of the Amobee LTI Plan to 31 March 2017, options in respect of an aggregate of 68.2 million
of ordinary shares in Amobee have been granted to the employees and non-executive directors of Amobee and/or its
subsidiaries. As at 31 March 2017, options in respect of an aggregate of 36.6 million of ordinary shares in Amobee are
outstanding.

The grant dates and exercise prices of the share options were as follows –

Date of grant

For employees
13 April 2015/ 14 October 2015
20 January 2016/ 10 May 2016/ 23 June 2016/ 24 August 2016/ 25 January 2017

For non-executive directors
14 October 2015

Exercise price

US$0.54 - US$0.79
US$0.54

US$0.54

The options granted to employees and non-executive directors expire 10 years and 5 years from the date of
grant respectively.

No ordinary shares of Amobee were issued during the financial year pursuant to the exercise of options granted
under the Amobee LTI Plan. The persons to whom the options have been granted do not have the right to participate,
by virtue of the options, in any share issue of any other company.

129

Directors’
Statement

For the financial year ended 31 March 2017

SHARE OPTION PLANS (Cont’d)

Trustwave Holdings, Inc.

In December 2015, Trustwave Holdings, Inc. (“Trustwave”), a 98%-owned subsidiary corporation of the Company,
implemented the Stock Option Incentive Plan (“Trustwave ESOP’’). Under the terms of the Trustwave ESOP, options
to purchase common stock of Trustwave may be granted to employees (including executive directors) and non-
executive directors of Trustwave and/or any of its subsidiaries.

Options are exercisable at a price no less than 100% of the fair value of the common stock of Trustwave on the date
of grant.

From the commencement of the Trustwave ESOP to 31 March 2017, options in respect of an aggregate of 2.7 million
of common stock in Trustwave have been granted to the employees of Trustwave and/or its subsidiaries. As at
31 March 2017, options in respect of an aggregate of 2.5 million of common stock in Trustwave are outstanding.

The grant dates and exercise prices of the stock options were as follows –

Date of grant

1 December 2015/ 22 January 2016/ 19 May 2016/ 12 September 2016
20 January 2017

The options granted expire 10 years from the date of grant.

Exercise price

US$16.79
US$16.24

No common stock of Trustwave was issued during the financial year pursuant to the exercise of options granted
under the Trustwave ESOP. The persons to whom the options have been granted do not have the right to participate,
by virtue of the options, in any share issue of any other company.

HOOQ

In December 2015, HOOQ Digital Pte. Ltd. (“HOOQ”), a 65%-owned subsidiary corporation of the Company,
implemented the HOOQ Digital Employee Share Option Scheme (“the Scheme’’). Under the terms of the Scheme,
options to purchase ordinary shares of HOOQ may be granted to employees (including executive directors) of HOOQ
and/or any of its subsidiaries.

Options are exercisable at a price no less than 100% of the fair value of the ordinary shares of HOOQ on the date
of grant.

From the commencement of the Scheme to 31 March 2017, options in respect of an aggregate of 58.8 million of
ordinary shares in HOOQ have been granted to the employees of HOOQ and/or its subsidiaries. As at 31 March 2017,
options in respect of an aggregate of 40.7 million of ordinary shares in HOOQ are outstanding.

Options have been granted on 16 May 2016 with an exercise price of US$0.07 per share. The options expire 10 years
from the date of grant.

No ordinary shares of HOOQ were issued during the financial year pursuant to the exercise of options granted under
the Scheme. The persons to whom the options have been granted do not have the right to participate, by virtue of the
options, in any share issue of any other company.

Singapore Telecommunications Limited | Annual Report 2017

130

Directors’
Statement

For the financial year ended 31 March 2017

AUDIT COMMITTEE

At the date of this statement, the Audit Committee comprises the following members, all of whom are non-executive
and the majority of whom, including the Chairman, are independent –

Bobby Chin Yoke Choong (Chairman of the Audit Committee)
Christina Hon Kwee Fong (Christina Ong)
Peter Ong Boon Kwee
Teo Swee Lian

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 and results 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 financial statements of the Company and the Group, as well as the Independent
Auditor’s Report thereon. In the review of the financial statements of the Company and the Group, the Committee
had discussed with management the accounting principles that were applied and their judgement of items that might
affect the integrity of the financial statements.

In addition, the Committee had, with the assistance of the internal auditors, reviewed the procedures set up by the
Company and the Group 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 management and has been given the resources required
for it to discharge its function properly. It also has full discretion to invite any 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 auditor of the Company at the
forthcoming Annual General Meeting.

AUDITOR

The auditor, Deloitte & Touche LLP, has expressed its willingness to accept re-appointment.

On behalf of the Directors

Simon Claude Israel
Chairman

Singapore
17 May 2017

131

Chua Sock Koong
Director

Independent Auditor’s Report

To the Members of Singapore Telecommunications Limited
For the financial year ended 31 March 2017

REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS

OPINION

We have audited the financial statements of Singapore Telecommunications Limited (the “Company”) and its subsidiaries
(the “Group”) which comprise the consolidated statement of financial position of the Group and the statement of financial
position of the Company as at 31 March 2017, and the consolidated 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 the notes to the financial statements, including a summary of significant accounting
policies, as set out on pages 137 to 227.

In our opinion, the accompanying 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 Companies
Act, Chapter 50 (the “Act”) and Financial Reporting Standards in Singapore (“FRSs”) so as to give a true and fair view of the
consolidated financial position of the Group and the financial position of the Company as at 31 March 2017, and of the
consolidated financial performance, consolidated changes in equity and consolidated cash flows of the Group and changes
in equity of the Company for the year ended on that date.

BASIS FOR OPINION

We conducted our audit in accordance with Singapore Standards on Auditing (“SSAs”). Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report.
We are independent of the Group in accordance with the Accounting and Corporate Regulatory Authority (“ACRA”) Code
of Professional Conduct and Ethics for Public Accountants and Accounting Entities (“ACRA Code”) together with the ethical
requirements that are relevant to our audit of the financial statements in Singapore, and we have fulfilled our other ethical
responsibilities in accordance with these requirements and the ACRA Code. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
statements of the current year. These matters were addressed in the context of our audit of the financial statements as a
whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key Audit Matters

Our audit performed and responses thereon

Revenue recognition
We have identified three critical areas in relation to revenue
set out below that we consider significant either because
of the complexity of the operation of billing systems or
because of the required exercise of judgement:
• accounting for long-term contracts, particularly with
respect to Group Enterprise Infocomm Technology
(“ICT”) projects;

• accounting for new products and tariffs introduced in the

year; and

• the timing of revenue recognition.

The accounting policies for revenue recognition are set out
in Note 2.20 to the financial statements and the different
revenue streams for the Group have been disclosed in
Note 4 to the financial statements.

Our audit approach included both controls testing and
substantive procedures as follows:
• We performed procedures to identify Group Enterprise
ICT contracts which may exhibit areas of audit interest
such as low and/or significant change in margins, loss
making contracts, and accounts with high accrued
revenue amongst others. We challenged the assumptions
and
judgements underpinning forecast performance
of the identified contracts and the adequacy of contract
loss provisions.

• We evaluated the relevant IT systems and the design
and operating effectiveness of controls over the capture
and recording of revenue transactions. In doing so,
we involved our IT specialists to assist in the audit of
automated controls, including interface controls between
different IT applications.

Singapore Telecommunications Limited | Annual Report 2017

132

Independent Auditor’s Report

To the Members of Singapore Telecommunications Limited
For the financial year ended 31 March 2017

Key Audit Matters

Our audit performed and responses thereon

Revenue recognition (Cont’d)

• We evaluated the business process controls in place over
the authorisation of rate changes, the introduction of new
plans and the input of this information to billing systems.
We tested the access controls and change management
controls for the Group’s billing systems.

• We tested samples of customer bills for accuracy for new

products and tariffs introduced in the year.

• We tested key reconciliations used by management
to assess the completeness and accuracy of revenue,
including testing the period in which it is reported.

• We tested supporting evidence for manual journal entries
posted to revenue accounts to identify any unusual items.

We have validated and are satisfied with the assumptions
and key management estimates adopted where revenue is
recognised on a percentage of completion basis.

We have not noted any significant deficiency in the relevant
IT systems and business process controls of the relevant
revenue streams.

No exceptions were noted in the key reconciliations and
manual journal entries which may result in significant
misstatements in revenue recorded in the year.

We have involved our tax specialists in assessing the
judgements taken by management
in reaching their
conclusion that the specific issue audit by the ATO represents
a contingent liability of the Group and the amount paid
represents a receivable as at 31 March 2017. We have
examined the advice obtained by management from the
Group’s tax specialists to support the judgement taken, and
have discussed the merits of the case with the specialists.
Based on our procedures, we believe that the position taken
by the Group is appropriate.

We have also assessed and validated the adequacy and
appropriateness of the disclosures made in the financial
statements.

Taxation
The Group’s subsidiaries, associates and joint ventures have
operations across a large number of jurisdictions and are
subject to periodic challenges by local tax authorities.

The Group has been responding to an ongoing specific issue
audit by the Australian Taxation Office (“ATO”) in connection
with the acquisition financing of Singtel Optus Pty Limited
(“Optus”). In November 2016, the Group received amended
assessments totalling A$326 million, comprising primary tax
of A$268 million and interest of A$58 million. On 21 March
2017, further notices of assessment for penalties were
received from the ATO totalling A$67 million. In accordance
with the ATO administrative practice, the Group paid a
minimum 50% of the assessed primary tax on 21 November
2016. This payment has been recognised as a non-current
receivable and no provision has been made as at 31 March
2017.

The Group has engaged and involved external specialists to
advise management on this specific issue audit, including
raising objections to the amended assessments. Evaluation
of the outcome of the specific issue audit, and whether
the risk of loss is remote, possible or probable, requires
significant judgement given the complexities involved.

The Group has made disclosures on the above matter in
Note 39(b) to the financial statements.

133

Independent Auditor’s Report

To the Members of Singapore Telecommunications Limited
For the financial year ended 31 March 2017

Key Audit Matters

Our audit performed and responses thereon

Goodwill impairment review
Optus, Amobee, Inc. and Trustwave
Under FRSs, the Group is required to annually test goodwill
for impairment. This assessment requires the exercise of
significant judgement about future market conditions,
including growth rates and discount rates.

As at 31 March 2017, the goodwill recorded on Optus,
Amobee, Inc. and Trustwave Holdings, Inc. (“Trustwave”)
amounted to S$9.29 billion, S$729.8 million and S$1.06
billion respectively, cumulatively constituting approximately
23% of the Group’s total assets.

The key assumptions to the impairment test and the
sensitivity of changes in these assumptions to the risk
of impairment are disclosed in Note 23 to the financial
statements.

Bharti Airtel
Bharti Airtel Limited (“Airtel”), a joint venture of the Group,
has recorded significant goodwill arising from the acquisition
of Airtel Africa in June 2010, of which the Group’s share is
considered material.

This goodwill recorded by Airtel is required to be tested for
impairment at least annually. As the amount of goodwill
recorded is material, an impairment thereof may materially
affect the Group’s share of the joint venture’s results. The
impairment assessment requires the exercise of significant
judgement about future market conditions,
including
growth rates and discount rates applicable in a number of
markets in Africa. The Group’s carrying value in Airtel (which
includes the goodwill) is disclosed in Note 22 to the financial
statements.

Optus, Amobee, Inc. and Trustwave
Our audit procedures focused on evaluating and challenging
the key assumptions used by management in conducting
the impairment review. These procedures included:
• using our valuation specialists to independently develop
expectations for the key macro-economic assumptions
used in the impairment analysis, in particular the discount
rate and long-term growth rate, and comparing the
independent expectations to those used by management;
forecasts used, with
comparison to recent performance, trend analysis and
market expectations; and

the cash flow

• challenging

• by reference to prior years’ forecasts, where relevant,

assessing whether the Group has achieved them.

Based on our procedures, we noted management’s key
assumptions to be within a reasonable range of our
expectations.

We have also assessed and validated the adequacy and
appropriateness of the disclosures made in the financial
statements.

Bharti Airtel
Our audit procedures included the review of relevant
working papers of the auditors of Airtel (the “Bharti Airtel
Auditors”), with particular focus on those related to the
goodwill impairment review. We also discussed with Airtel
management, Bharti Airtel Auditors and specialists used by
them, including those engaged to assist the Bharti Airtel
Auditors
in evaluating and assessing the assumptions
adopted in the goodwill impairment model prepared by
Airtel management.

The Group’s share of Airtel’s results is calculated based on
Airtel’s audited financial statements on which the Bharti
Airtel Auditors have expressed an unmodified opinion.

Singapore Telecommunications Limited | Annual Report 2017

134

Independent Auditor’s Report

To the Members of Singapore Telecommunications Limited
For the financial year ended 31 March 2017

Key Audit Matters

Our audit performed and responses thereon

Contingent liabilities: Share of significant joint ventures’
and associate’s reported regulatory and tax disputes
The Group’s significant joint ventures and associate have
operations across a number of jurisdictions including
Africa, India, Indonesia, the Philippines and Thailand, and
are subject to periodic challenges by local regulators and
tax authorities.

joint ventures and
Management of these significant
associate have engaged and
involved specialists to
advise them on such disputes as necessary, and to
assess whether the risk of loss is remote, possible or
probable. Such assessment requires significant judgement
given the complexities
joint ventures’
contingent liabilities have been disclosed in Note 40 to
the financial statements.

involved. The

Our audit procedures included the review of relevant
working papers of the auditors of the significant joint
ventures and associate (the “Component Auditors”), with
particular focus on those related to regulatory and tax
disputes. We have also discussed with management of
these significant joint ventures and associate, and their
respective Component Auditors.

We have also reviewed legal advice received by the
Component Auditors for certain of the key contingent
liabilities that are significant to the Group and assessed
the adequacy of disclosure of the contingencies in the
financial statements.

INFORMATION OTHER THAN THE FINANCIAL STATEMENTS AND AUDITOR’S REPORT THEREON

Management is responsible for the other information. The other information comprises all the information included in the
Annual Report, excluding the Financial Statements and our auditor’s report thereon. The other information is expected to be
made available to us after the date of our auditor’s report on the Financial Statements.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance
conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information identified above
when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the
financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

When we read the other information, if we conclude that there is a material misstatement therein, we are required to
communicate the matter to those charged with governance and take appropriate actions in accordance with SSAs.

RESPONSIBILITIES OF MANAGEMENT AND DIRECTORS 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 Act and FRSs, 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 financial statements
and to maintain accountability of assets.

In preparing the financial statements, management is responsible for assessing the Group’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless
management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

The directors’ responsibilities include overseeing the Group’s financial reporting process.

AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SSAs will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually
or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of
these consolidated financial statements.

135

Independent Auditor’s Report

To the Members of Singapore Telecommunications Limited
For the financial year ended 31 March 2017

As part of an audit in accordance with SSAs, we exercise professional judgement and maintain professional scepticism
throughout the audit. We also:

•

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design
and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to
provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than
for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.

Obtain an understanding of internal control relevant to the audit 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 Group’s
internal control.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by management.

Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt
on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required
to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.

Evaluate the overall presentation, structure and content of the financial statements, including the disclosures,
and whether the financial statements represent the underlying transactions and events in a manner that achieves
fair presentation.

Obtain sufficient appropriate audit evidence regarding the financial information of the entities and business activities
within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction,
supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the directors with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear
on our independence, and where applicable, related safeguards.

From the matters communicated with the directors, we determine those matters that were of most significance in the
audit of the financial statements of the current year and are therefore the key audit matters. We describe these matters
in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should not be communicated in our report because the adverse consequences
of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

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 subsidiary
corporations incorporated in Singapore of which we are the auditors have been properly kept in accordance with the
provisions of the Act.

The engagement partner on the audit resulting in this Independent Auditor’s Report is Mr Philip Yuen Ewe Jin.

Public Accountants and
Chartered Accountants
Singapore

17 May 2017

Singapore Telecommunications Limited | Annual Report 2017

136

Consolidated
Income Statement

For the financial year ended 31 March 2017

Operating revenue

Operating expenses

Other income

Depreciation and amortisation

Exceptional items

Profit on operating activities

Share of results of associates and joint ventures

Notes

2017
S$ Mil

2016
S$ Mil

16,711.4

16,961.2

(11,929.0)

(12,096.8)

215.3

148.3

4,997.7

5,012.7

(2,238.9)

(2,148.8)

(1.2)

(44.8)

2,757.6

2,819.1

2,017.3

2,026.6

Profit before interest, investment income (net) and tax

4,774.9

4,845.7

Interest and investment income (net)
Finance costs

Profit before tax

Tax expense

Profit after tax

Attributable to -
Shareholders of the Company
Non-controlling interests

10
11

114.8
(374.3)

94.7
(359.6)

4,515.4

4,580.8

(684.4)

(722.5)

3,831.0

3,858.3

3,852.7
(21.7)

3,870.8
(12.5)

3,831.0

3,858.3

Earnings per share attributable to shareholders of the Company
- basic (cents)
- diluted (cents)

13
13

23.96
23.91

24.29
24.26

The accompanying notes on pages 147 to 227 form an integral part of these financial statements.
Independent Auditor’s Report – pages 132 to 136.

137

Consolidated Statement of
Comprehensive Income

For the financial year ended 31 March 2017

Profit after tax

Other comprehensive income/ (loss):

Items that may be reclassified subsequently to income statement:

2017
S$ Mil

2016
S$ Mil

3,831.0

3,858.3

Exchange differences arising from translation of foreign operations

and other currency translation differences

432.7

(728.0)

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

Share of other comprehensive income of associates and joint ventures

Other comprehensive income/ (loss), net of tax

Total comprehensive income

Attributable to -
Shareholders of the Company
Non-controlling interests

16.3
20.1
36.4

(1.5)
(18.8)
(20.3)

16.1

16.5

223.4

688.7

(23.3)
(10.0)
(33.3)

21.1
11.1
32.2

(1.1)

(87.5)

81.5

(735.1)

4,519.7

3,123.2

4,541.5
(21.8)

3,136.7
(13.5)

4,519.7

3,123.2

The accompanying notes on pages 147 to 227 form an integral part of these financial statements.
Independent Auditor’s Report – pages 132 to 136.

Singapore Telecommunications Limited | Annual Report 2017

138

Statements of
Financial Position

As at 31 March 2017

Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Derivative financial instruments

Non-current assets
Property, plant and equipment
Intangible assets
Subsidiaries
Associates
Joint ventures
Available-for-sale ("AFS") investments
Derivative financial instruments
Deferred tax assets
Loan to an associate
Trade and other receivables

Total assets

Current liabilities
Trade and other payables
Advance billings
Provision
Current tax liabilities
Borrowings (unsecured)
Borrowings (secured)
Derivative financial instruments
Net deferred gain

Non-current liabilities
Borrowings (unsecured)
Borrowings (secured)
Advance billings
Net deferred gain
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
Other reserve

Group

Company

Notes

2017
S$ Mil

2016
S$ Mil

2017
S$ Mil

2016
S$ Mil

15
16
17
25

18
19
20
21
22
24
25
12
26
16

29
30
25
26

29
30

26
25
12
31

533.8
4,924.2
352.2
107.3
5,917.5

11,892.9
13,072.8
–
1,952.2
12,282.9
192.9
455.2
657.8
1,100.5
769.5
42,376.7

461.8
4,366.4
319.7
17.5
5,165.4

11,154.0
12,968.4
–
356.3
10,729.9
147.5
622.6
692.3
1,100.5
628.8
38,400.3

89.2
1,673.3
23.8
107.1
1,893.4

2,326.5
–
17,441.0
603.5
23.0
37.4
284.9
–
1,100.5
155.1
21,971.9

83.7
3,029.4
21.5
9.5
3,144.1

2,171.4
0.3
14,182.3
603.5
21.2
35.1
321.0
–
1,100.5
175.4
18,610.7

48,294.2

43,565.7

23,865.3

21,754.8

4,921.3
835.4
1.1
296.3
3,046.9
86.7
15.8
68.8
9,272.3

7,852.7
199.6
245.7
1,282.7
303.1
574.6
349.9
10,808.3

4,594.0
800.2
3.1
364.4
595.5
90.2
24.6
67.9
6,539.9

9,019.0
236.0
265.5
1,323.3
316.2
585.3
278.0
12,023.3

1,602.0
74.8
–
100.6
–
1.5
110.0
–
1,888.9

746.2
157.2
138.3
–
370.0
282.2
23.7
1,717.6

1,582.2
76.2
2.2
94.1
–
1.5
13.7
–
1,769.9

747.2
158.8
139.5
–
416.7
270.5
18.4
1,751.1

20,080.6

18,563.2

3,606.5

3,521.0

28,213.6

25,002.5

20,258.8

18,233.8

4,127.3
24,086.3

28,213.6
22.4
(22.4)

2,634.0
22,355.2

24,989.2
35.7
(22.4)

4,127.3
16,131.5

20,258.8
–
–

2,634.0
15,599.8

18,233.8
–
–

Total equity

28,213.6

25,002.5

20,258.8

18,233.8

The accompanying notes on pages 147 to 227 form an integral part of these financial statements.
Independent Auditor’s Report – pages 132 to 136.

139

Statements of
Changes in Equity

For the financial year ended 31 March 2017

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Singapore Telecommunications Limited | Annual Report 2017

140

Statements of
Changes in Equity

For the financial year ended 31 March 2017

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Statements of
Changes in Equity

For the financial year ended 31 March 2017

Company – 2017

Share
Capital
S$ Mil

Treasury

Shares (1)
S$ Mil

Capital
Reserve
S$ Mil

Hedging
Reserve
S$ Mil

Fair Value
Reserve
S$ Mil

Retained
Earnings
S$ Mil

Total
Equity
S$ Mil

Balance as at 1 April 2016

2,634.0

(1.2)

(71.3)

46.7

25.5

15,600.1

18,233.8

Changes in equity for the year

Issue of new shares (net of costs) (8)
Performance shares purchased

by the Company

Performance shares vested
Equity-settled share-based payment
Transfer of liability to equity
Cash paid to employees under
performance share plans

Contribution to Trust (6)
Final dividend paid (see Note 33)
Interim dividend paid (see Note 33)

1,493.3

–

109.1

–
–
–
–

–
–
–
–
1,493.3

(1.9)
2.2
–
–

–
–
–
–
0.3

–
(2.2)
12.7
4.9

(0.3)
(14.6)
–
–
109.6

–

–
–
–
–

–
–
–
–
–

–

1,602.4

–
–
–
–

–
–
–
–
–

–
–
–
–

(1.9)
–
12.7
4.9

–
–
(1,706.0)
(1,110.4)
(2,816.4)

(0.3)
(14.6)
(1,706.0)
(1,110.4)
(1,213.2)

Total comprehensive income

for the year

–

13.6

2.2

3,222.4

3,238.2

Balance as at 31 March 2017

4,127.3

(0.9)

38.3

60.3

27.7

16,006.1

20,258.8

The accompanying notes on pages 147 to 227 form an integral part of these financial statements.
Independent Auditor’s Report – pages 132 to 136.

Singapore Telecommunications Limited | Annual Report 2017

142

Statements of
Changes in Equity

For the financial year ended 31 March 2017

Company – 2016

Share
Capital
S$ Mil

Treasury

Shares (1)
S$ Mil

Capital
Reserve
S$ Mil

Hedging
Reserve
S$ Mil

Fair Value
Reserve
S$ Mil

Retained
Earnings
S$ Mil

Total
Equity
S$ Mil

Balance as at 1 April 2015

2,634.0

(3.9)

(70.8)

12.9

34.0

14,900.4

17,506.6

Changes in equity for the year

Performance shares purchased

by the Company

Performance shares vested
Equity-settled share-based payment
Transfer of liability to equity
Cash paid to employees under
performance share plans

Contribution to Trust (6)
Final dividend paid (see Note 33)
Interim dividend paid (see Note 33)

Total comprehensive income/ (loss)

for the year

–
–
–
–

–
–
–
–
–

–

(4.8)
7.5
–
–

–
–
–
–
2.7

–
(7.5)
11.3
16.4

(0.5)
(20.2)
–
–
(0.5)

–
–
–
–

–
–
–
–
–

–
–
–
–

–
–
–
–
–

–
–
–
–

(4.8)
–
11.3
16.4

–
–
(1,705.9)
(1,084.2)
(2,790.1)

(0.5)
(20.2)
(1,705.9)
(1,084.2)
(2,787.9)

–

33.8

(8.5)

3,489.8

3,515.1

Balance as at 31 March 2016

2,634.0

(1.2)

(71.3)

46.7

25.5

15,600.1

18,233.8

Notes:
(1)

‘Treasury Shares’ are accounted for in accordance with Singapore Financial Reporting Standard (“FRS”) 32, Financial Instruments: Disclosure and
Presentation.
‘Currency Translation Reserve’ relates mainly to the translation of the net assets of foreign subsidiaries, associates and joint ventures of the Group denominated
mainly in Australian Dollar, Indian Rupee, Indonesian Rupiah, Philippine Peso, Thai Baht and United States Dollar.
In March 2016, the currency translation loss of S$55.9 million in respect of the translation of Pacific Bangladesh Telecom Limited (45%-owned joint venture)
has been transferred to the income statement upon the loss of joint control (see Note 8).
‘Other Reserves’ relate mainly to goodwill on acquisitions completed prior to 1 April 2001 and the share of other comprehensive income or loss of the
associates and joint ventures.

(2)

(3)

(4)

(5) This amount relates to a reserve for an obligation arising from a put option written with the non-controlling shareholder of Trustwave Holdings, Inc.

(“Trustwave”). When exercised under certain conditions, this will require Singtel to purchase the remaining 2% equity interest in Trustwave.

(6) DBS Trustee Limited (the “Trust”) is the trustee of a trust established to administer the performance share plans.
(7) This includes an amount of S$97.4 million arising from re-assessments of future tax benefits on certain items of property, plant and equipment in respect of

prior years (see Note 12.2).

(8) The amount credited to ‘Capital Reserve’ relates to fair value adjustment on the new shares issued on completion of the acquisitions of equity interest in

Intouch Holdings Public Company Limited and Bharti Telecom Limited.

The accompanying notes on pages 147 to 227 form an integral part of these financial statements.
Independent Auditor’s Report – pages 132 to 136.

143

Consolidated Statement
of Cash Flows

For the financial year ended 31 March 2017

Cash Flows From Operating Activities

Profit before tax

4,515.4

4,580.8

2017
S$ Mil

2016
S$ Mil

Adjustments for -
Depreciation and amortisation
Share of results of associates and joint ventures
Exceptional items (non-cash)

Interest and investment income (net)

Finance costs
Other non-cash items

2,238.9
(2,017.3)
(37.1)
(114.8)
374.3
25.8
469.8

2,148.8
(2,026.6)
(2.4)
(94.7)
359.6
34.4
419.1

Operating cash flow before working capital changes

4,985.2

4,999.9

Changes in operating assets and liabilities
Trade and other receivables
Trade and other payables
Inventories

Cash generated from operations

Dividends received from associates and joint ventures
Income tax and withholding tax paid (Note 1)
Payment to employees in cash under performance share plans

Net cash from operating activities

Cash Flows From Investing Activities

Investment in associate and joint ventures (Note 2)
Payment for purchase of property, plant and equipment
Purchase of intangible assets
Investment in AFS investments
Withholding tax paid on intra-group interest income
Payments for acquisition of subsidiaries, net of cash acquired (Note 3)
Repayment of loan by an associate
Proceeds from sale of AFS investments
Deferred proceeds/ proceeds from disposal of associates and joint ventures
Interest received
Proceeds from sale of property, plant and equipment
Contribution from non-controlling interests
Dividends received from AFS investments (net of withholding tax paid)

(561.7)
93.4
(23.6)

(610.0)
(402.7)
(28.9)

4,493.3

3,958.3

1,655.5
(833.8)
(0.3)

1,350.7
(658.2)
(3.1)

5,314.7

4,647.7

(2,471.8)
(2,260.6)
(257.7)
(34.6)
(27.3)
(4.9)
–
75.0
61.5
39.4
34.2
12.9
1.7

(215.4)
(1,930.0)
(173.3)
(38.6)
(26.9)
(1,059.4)
510.0
81.3
15.6
68.1
5.7
21.2
1.7

Net cash used in investing activities

(4,832.2)

(2,740.0)

The accompanying notes on pages 147 to 227 form an integral part of these financial statements.
Independent Auditor’s Report – pages 132 to 136.

Singapore Telecommunications Limited | Annual Report 2017

144

Consolidated Statement
of Cash Flows

For the financial year ended 31 March 2017

Cash Flows From Financing Activities

Proceeds from term loans
Repayment of term loans
Proceeds from bond issue

Repayment of bonds
Proceeds from finance lease liabilites
Finance lease payments
Net proceeds from borrowings
Proceeds from issue of shares (Note 2)
Final dividend paid to shareholders of the Company
Interim dividend paid to shareholders of the Company
Net interest paid on borrowings and swaps
Settlement of swap for bonds repaid
Purchase of performance shares
Dividend paid to non-controlling interests
Others

Net cash used in financing activities

Net change in cash and cash equivalents
Exchange effects on cash and cash equivalents
Cash and cash equivalents at beginning of year

Note

2017
S$ Mil

2016
S$ Mil

6,174.9
(5,263.7)
675.4

(404.2)
10.1
(34.9)
1,157.6
1,602.4
(1,705.5)
(1,110.0)
(351.3)
16.3
(27.2)
(5.0)
0.3

5,849.5
(6,058.2)
1,321.1

–
57.4
(41.1)
1,128.7
–
(1,705.4)
(1,083.8)
(335.6)

–

(44.1)
(4.9)
1.6

(422.4)

(2,043.5)

60.1
11.9
461.8

(135.8)
34.8
562.8

Cash and cash equivalents at end of year

533.8

461.8

The accompanying notes on pages 147 to 227 form an integral part of these financial statements.
Independent Auditor’s Report – pages 132 to 136.

145

Consolidated Statement
of Cash Flows

For the financial year ended 31 March 2017

Note 1:

Income tax and withholding tax paid

Included a payment of S$142 million (A$134 million) made to the Australian Taxation Office in November 2016
for amended assessments related to the acquisition financing of Optus. This payment has been recorded as a
receivable (see Note 16).

Note 2:

Investment in associate and joint ventures, and proceeds from issue of shares

On 17 November 2016, Singtel completed the acquisitions of 21.0% equity interest in Intouch Holdings Public
Company Limited (“Intouch”) for S$1.59 billion and an additional 7.4% equity interest in Bharti Telecom Limited
(“BTL”) for S$884 million. The acquisitions were partially financed by proceeds of S$1.60 billion from the issuance
of 385,581,351 new ordinary shares of Singtel listed on the Singapore Exchange.

Note 3: Payments for acquisition of subsidiaries

(a) During the financial year, deferred payments of S$3.4 million and S$1.5 million were made in respect of the
acquisitions of Adconion Media, Inc. and Adconion Pty Limited (together, “Adconion”) and Ensyst Pty Limited
respectively.

(b)

In the previous financial year, the Group made a payment of S$1.05 billion to acquire Trustwave Holdings,
Inc., and also made deferred payments of S$4.5 million in respect of the acquisition of Adconion.

Note 4: Non-cash transaction

In March 2016, Singtel received a dividend distribution of S$60 million from NetLink Trust, a 100%-owned associate
of Singtel, which was offset against an amount due to NetLink Trust.

The accompanying notes on pages 147 to 227 form an integral part of these financial statements.
Independent Auditor’s Report – pages 132 to 136.

Singapore Telecommunications Limited | Annual Report 2017

146

Notes to the
Financial Statements

For the financial year ended 31 March 2017

These notes form an integral part of and should be read in conjunction with the accompanying financial statements.

GENERAL

Singtel is domiciled and incorporated in Singapore and is publicly traded on the Singapore 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 significant subsidiaries are disclosed in Note 43.

In Singapore, the Group has the rights to provide fixed national and international telecommunications services to
31 March 2037, and public cellular mobile telephone services to 31 March 2032.

In addition, the Group is licensed to offer Internet services and has also obtained frequency spectrum and licence
rights to install, operate and maintain mobile communication systems and services including wireless broadband
systems and services. The Group also holds the requisite licence to provide 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
17 May 2017.

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.

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

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 were
mandatory from 1 April 2016 had no significant impact on the financial statements of the Group or the Company in
the current financial year.

147

Notes to the
Financial Statements

For the financial year ended 31 March 2017

2.2 Group Accounting

The accounting policy for investments in subsidiaries, associates and joint ventures 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 structured entities) controlled by the Group. Control exists when the Group has
power over the entity, is exposed, or has rights, to variable returns from its involvement with the entity and has
the ability to affect those returns by using its power over the entity. Power is demonstrated through existing rights
that give the Group the ability to direct activities that significantly affect the entity’s returns. The Group reassesses
whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the
elements of control listed above. 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 Associates

Associates are entities over which the Group has significant influence. Significant influence is the power to participate
in the financial and operating policy decisions of the investee but is not control or joint control over those policies.

Investments in associates are accounted for in the consolidated financial statements using the equity method of
accounting. Equity accounting involves recording the investment in associates initially at cost, and recognising the
Group’s share of the post-acquisition results of associates 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.

Where the Group’s interest in an associate reduces as a result of a deemed disposal, any gain or loss arising as a result
of the deemed disposal is taken to the income statement.

Where the Group increases its interest in its existing associate and it remains as an associate, the incremental cost of
investment is added to the existing carrying amount without considering the fair value of the associate’s identifiable
assets and liabilities.

In the consolidated statement of financial position, investments in associates 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 associates.

When the Group’s share of losses in an associate equals or exceeds its interest in the associate, 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 associate.

Unrealised gains resulting from transactions with associates are eliminated to the extent of the Group’s interest in the
associate. 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 ventures

Joint ventures are joint arrangements whereby the parties that have joint control of the arrangement have rights to the
net assets of the joint arrangements. Joint control is the contractually agreed sharing of control of an arrangement,
which exists only when decisions about the relevant activities require unanimous consent of the parties sharing
the control.

The Group’s interest in joint ventures is accounted for in the consolidated financial statements using the equity
method of accounting.

Where the Group’s interest in a joint venture reduces as a result of a deemed disposal, any gain or loss arising as a
result of the deemed disposal is taken to the income statement.

Singapore Telecommunications Limited | Annual Report 2017

148

Notes to the
Financial Statements

For the financial year ended 31 March 2017

2.2.3 Joint ventures (Cont’d)

Where the Group increases its interest in its existing joint venture and it remains as a joint venture, the incremental
cost of investment is added to the existing carrying amount without considering the fair value of the joint venture’s
identifiable assets and liabilities.

In the consolidated statement of financial position, investments in joint ventures 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 ventures.

The Group’s interest in its unincorporated joint operations is accounted for by recognising the Group’s assets and
liabilities from the joint operations, as well as expenses incurred by the Group and the Group’s share of income earned
from the joint operations, in the consolidated financial statements.

Unrealised gains resulting from transactions with joint ventures are eliminated to the extent of the Group’s interest
in the joint venture. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that
there is no evidence of impairment.

2.2.4 Dividends from associates and joint ventures

Dividends are recognised when the Group’s rights to receive payment have been established. Dividends received from
an associate or joint venture in excess of the Group’s carrying value of the equity accounted investee are recognised
as dividend income in the income statement where there is no legal or constructive obligation to refund the dividend
nor is there any commitment to provide financial support to the investee. Equity accounting is then suspended until
the investee has made sufficient profits to cover the income previously recognised for the excess cash distributions.

2.2.5 Structured entity

The Trust has been consolidated in the consolidated financial statements under FRS 110, Consolidated Financial
Statements.

2.2.6 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.

149

Notes to the
Financial Statements

For the financial year ended 31 March 2017

2.2.6 Business combinations (Cont’d)

When the Group loses control of a subsidiary, any interest retained in the former subsidiary is recorded at fair value
with the 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 Singtel 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.

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’ within equity in the consolidated
financial statements.

2.4

Investments in Subsidiaries, Associates and Joint Ventures

In the Company’s statement of financial position, investments in subsidiaries, associates and joint ventures, 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, associates and joint ventures, 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 Available-for-sale (“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 the ‘Fair Value Reserve’ within equity. AFS investments for which
fair values cannot be reliably determined are stated at cost less accumulated impairment losses.

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.

Singapore Telecommunications Limited | Annual Report 2017

150

Notes to the
Financial Statements

For the financial year ended 31 March 2017

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.

A 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 hedged 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.

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 amounts
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.

151

Notes to the
Financial Statements

For the financial year ended 31 March 2017

2.6.1 Hedge accounting (Cont’d)

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 floating or
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.

Certain cross currency swaps relate to net investment hedges for the foreign currency exchange risk on the Group’s
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 the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date, regardless of whether that price is directly observable or
estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Group takes into
account the characteristics of the asset or liability which market participants would take into account when pricing
the asset or liability at the measurement date.

The following methods and assumptions are used to estimate the fair value of each class of financial instrument –

Bank balances, receivables and payables, current 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 the net asset values of the investee companies or discounted cash
flow analysis.

Cross currency and interest rate swaps
The fair value of a cross currency or an interest rate swap is the estimated amount that the swap contract can be
exchanged for or settled with under normal market conditions. This fair value can be estimated using the discounted
cash flow method where the future cash flows of the swap contract are discounted at the prevailing market foreign
exchange rates and interest rates. Market interest rates are actively quoted interest rates or interest rates computed
by applying techniques to these actively quoted interest rates.

Forward foreign currency contracts
The fair value of forward foreign exchange contracts is determined using forward exchange market rates for contracts
with similar maturity profiles at the end of the reporting period.

Non-current borrowings
For disclosure purposes, the fair values of non-current borrowings which are traded in active markets are based on
the market quoted ask price. For other non-current borrowings, the fair values are based on valuations provided by
service providers or estimated by discounting the future contractual cash flows using discount rates based on the
borrowing rates which the Group expects would be available at the end of the reporting period.

Singapore Telecommunications Limited | Annual Report 2017

152

Notes to the
Financial Statements

For the financial year ended 31 March 2017

2.8

Financial Guarantee Contracts

Financial guarantees issued by the Company prior to 1 April 2010 are recorded initially at fair values plus transactions
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 directly charged to the subsidiary as guarantee fees based on fair values.

2.9

Trade and Other Receivables

Trade and other receivables, including loans given by the Company to subsidiaries, associates and joint ventures, are
initially recognised at fair values and 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.

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 mainly 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.

153

Notes to the
Financial Statements

For the financial year ended 31 March 2017

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 associate or loss of joint control of a joint
venture, 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 associates or joint ventures,
the proportionate 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, associates or joint ventures which form part
of the Company’s net investment in the subsidiaries, associates or joint ventures are included in ‘Currency Translation
Reserve’ in the consolidated financial statements. 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.

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 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 asset and stated at cost less accumulated
impairment losses.

Singapore Telecommunications Limited | Annual Report 2017

154

Notes to the
Financial Statements

For the financial year ended 31 March 2017

2.15.1 Goodwill (Cont’d)

Acquisitions completed prior to 1 April 2001
Goodwill on acquisitions of subsidiaries, associates and joint ventures 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, associates and joint ventures 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 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.

A bargain purchase gain is recognised directly in the consolidated income statement.

Gains or losses on disposal of subsidiaries, associates and joint ventures include the carrying amount of capitalised
goodwill relating to the entity sold.

2.15.2 Other intangible assets

Optus’ telecommunication licences are not amortised and are reviewed for impairment on an annual basis. Other
expenditure on telecommunication and spectrum licences are capitalised and amortised using the straight-line
method over their estimated useful lives of 4 to 18 years.

Other intangible assets which are acquired in business combinations are carried at fair values at the date of
acquisition, and amortised on a straight-line basis over the period of the expected benefits. Customer relationships or
customer contracts, brand, and technology have estimated useful lives of 4 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 is subject to annual impairment test or is 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 finite useful lives and are subject to amortisation, as well as property,
plant and equipment and investments in subsidiaries, associates and joint ventures, 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.

155

Notes to the
Financial Statements

For the financial year ended 31 March 2017

2.16

Impairment of Non-Financial Assets (Cont’d)

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 cost and associated profits are recognised based on projects-in-progress, less progress
payments received and receivable on uncompleted information technology projects. Costs include third party
hardware and software costs, direct labour and other direct expenses attributable to the project activity.

When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an
expense immediately.

In the consolidated statement of financial position, work-in-progress is included in “Trade and other receivables”, and
the excess of progress billings over work-in-progress is included in “Trade and other payables” as applicable.

2.18 Property, Plant and Equipment

Property, plant and equipment is 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 its
expected useful life. Property, plant and equipment under finance lease is 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 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 instalments over its remaining lease period.

In respect of capital work-in-progress, assets are depreciated from the month the asset is completed and ready
for use.

Costs of 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.

Singapore Telecommunications Limited | Annual Report 2017

156

Notes to the
Financial Statements

For the financial year ended 31 March 2017

2.18 Property, Plant and Equipment (Cont’d)

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.

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 economic useful 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 operating leases.

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.

157

Notes to the
Financial Statements

For the financial year ended 31 March 2017

2.19.5 Capacity swaps

The Group may exchange network capacity with other capacity or service providers. The exchange is regarded as a
transaction which generates revenue unless the transaction lacks commercial substance or the fair value of neither
the capacity received nor the capacity given up is reliably measurable.

2.20 Revenue Recognition

Revenue for the Group is recognised based on fair value for 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.

Revenue from subscription contract is recognised ratably over the service, maintenance or subscription period.

For mobile device repayment plans, the consideration is allocated to its separate revenue-generating activities based
on the best estimate of the price of each activity in the arrangement. Handset sales are accounted for in accordance
with the sale of equipment accounting policy (see below) of the Group. As the service credits under the device
repayment plans are provided over time for services, they are recorded as a reduction of subscription revenue.

For 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 sale of equipment is recognised upon the transfer of significant risks and rewards of ownership to
the customer which generally coincides with delivery and acceptance of the equipment sold.

Revenues for system and network installation and integration projects are recognised based on the percentage of
completion of the projects using cost-to-cost basis. Revenues from the rendering of services which involve the
procurement of computer equipment, third party software for installation and information technology professional
services are recognised upon full completion of the projects.

Revenue from sale of perpetual software licences and the related hardware are recognised when title passes to the
customer, generally upon delivery.

Revenue from digital advertising services and solutions is recognised when advertising services are delivered, and
when digital advertising impressions are delivered or click-throughs occur. Revenue from selling advertising space is
recognised when the advertising space is filled and sold to customers.

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 do not hold sufficient assets to pay all employee benefits relating to employee
services in the current and preceding financial years.

Singapore Telecommunications Limited | Annual Report 2017

158

Notes to the
Financial Statements

For the financial year ended 31 March 2017

2.21.1 Defined contribution plans (Cont’d)

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.

2.21.3 Share-based compensation

Performance shares and share options
The performance share plans of the Group are accounted for either as equity-settled share-based payments or
cash-settled share-based payments. The share option plans of the subsidiaries are accounted as equity-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 share-based payment
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 equity instruments 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 effects of the Singtel performance share plans are 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 and Retention Costs

Customer acquisition and retention 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.

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.

159

Notes to the
Financial Statements

For the financial year ended 31 March 2017

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

Income Tax

Income tax expense comprises current and deferred tax.

The current tax is based on taxable profit for the year. Taxable profit differs from profit as reported in the income
statement as it excludes items of income or expense that are taxable or deductible in other years and it further
excludes items that are not taxable or tax deductible. The Group’s liability for current tax is calculated using tax rates
(and tax laws) that have been enacted or substantively enacted in countries where the Company and its subsidiaries
operate by, at the end of the reporting period.

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/ loss, it is not recognised.
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 tax laws) enacted or substantively enacted in countries where the Company and its
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,
associates and joint ventures, 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.

2.29 Segment Reporting

An 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.

Singapore Telecommunications Limited | Annual Report 2017

160

Notes to the
Financial Statements

For the financial year ended 31 March 2017

2.30 Non-current Assets (or Disposal Groups) Held for Sale

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.

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 judgements –

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 or cash-generating units 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.

Goodwill recorded by associates and joint ventures is required to be tested for impairment at least annually. The
impairment assessment requires the exercise of significant judgement about future market conditions, including
growth rates and discount rates applicable in a number of markets where the associates and joint ventures operate.

The assumptions used by management to determine the value-in-use calculations of goodwill on acquisition of
subsidiaries are disclosed in Note 23. The carrying values of associates and joint ventures including goodwill capitalised
are stated in Note 21 and Note 22 respectively.

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.

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.

161

Notes to the
Financial Statements

For the financial year ended 31 March 2017

3.4

Investment in NetLink Trust

Based on facts and circumstances as disclosed in Note 26, although the Company holds all the units in NetLink Trust,
the Company does not control but has significant influence in the trust in accordance with FRS 28, Investments in
Associates and Joint Ventures. Therefore, NetLink Trust has been accounted for as an associate of the Group.

3.5

Taxation

3.5.1 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.

3.5.2 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, including the tax matter disclosed in Note 39(b). 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.

3.6

Fair values of derivative financial instruments

The Group uses valuation techniques to determine the fair values of financial instruments. The valuation techniques
used for different financial instruments are selected to reflect how the market would be expected to price the
instruments, using inputs that reasonably reflect the risk-return factors inherent in the instruments. Depending upon
the characteristics of the financial instruments, observable market factors are available for use in most valuations,
while others involve a greater degree of judgment and estimation.

3.7

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 equity instruments 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.

3.8

Contingent Liabilities

The Group consults with its 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 2017, the Group was involved in
various legal proceedings where it has been vigorously defending its claims as disclosed in Note 39.

The Group also reports significant contingent liabilities of its associates and joint ventures. Assessment on whether
the risk of loss is remote, possible or probable requires significant judgement given the complexities involved.
The significant contingent liabilities of the Group’s joint ventures have been disclosed in Note 40.

Singapore Telecommunications Limited | Annual Report 2017

162

Notes to the
Financial Statements

For the financial year ended 31 March 2017

3.9

Purchase Price Allocation

The Group completed the acquisition of Intouch Holdings Public Company Limited (“Intouch”) in November 2016.
Purchase price allocation exercise requires a significant amount of management estimation, particularly in relation
to the identification and valuation of intangible assets and assignment of their useful lives. The provisional purchase
price allocation of Intouch is included in the carrying amount of the investment in associate as disclosed in Note 21.

OPERATING REVENUE

Mobile communications
Data and Internet
Managed services
Business solutions
Infocomm Technology
Sale of equipment
National telephone
Digital businesses
International telephone
Pay television
Others

Operating revenue

Operating revenue
Other income
Interest and dividend income (see Note 10)

Total revenue

OPERATING EXPENSES

Selling and administrative cost (1) (2)
Staff costs (2)
Cost of equipment sold
Other cost of sales (2)
Traffic expenses
Repairs and maintenance

2017
S$ Mil

5,930.6
3,321.2
2,282.0
659.7
2,941.7
1,903.8
1,062.4
565.6
479.7
292.5
213.9

Group

2016
S$ Mil

6,713.5
3,138.1
2,013.6
636.9
2,650.5
1,801.9
1,128.1
476.2
541.9
284.9
226.1

16,711.4

16,961.2

16,711.4
215.3
99.7

16,961.2
148.3
95.7

17,026.4

17,205.2

2017
S$ Mil

2,921.9
2,523.4
2,415.9
2,115.4
1,575.6
376.8

Group

2016
S$ Mil

3,055.6
2,434.4
2,224.5
1,811.7
2,211.8
358.8

11,929.0

12,096.8

Notes:
(1)

Includes mobile and broadband subscriber acquisition and retention costs, supplies and services, as well as rentals of properties and mobile
base stations.

(2) Comparatives have been reclassified to be consistent with the current year.

163

Notes to the
Financial Statements

For the financial year ended 31 March 2017

5.1

Staff Costs

Staff costs included the following –

Contributions to defined contribution plans
Performance share and share option expenses/ (write-back of expenses)

- equity-settled arrangements
- cash-settled arrangements

5.2

Key Management Personnel Compensation

Key management personnel compensation (1)
Executive director (2)
Other key management personnel (3)

Directors’ remuneration (4)

Group

2017
S$ Mil

2016
S$ Mil

233.9

240.9

33.9
2.0

33.2
(5.1)

Group

2017
S$ Mil

6.6
20.8

27.4
2.6

30.0

2016
S$ Mil

6.4
11.3

17.7
2.6

20.3

Notes:
(1) Comprise base salary, bonus, contributions to defined contribution plans and other benefits, but exclude performance share and share option

expenses disclosed below.

(2) The Group Chief Executive Officer, an executive director of Singtel, was awarded up to 1,895,988 (2016: 1,743,040) ordinary shares of Singtel
pursuant to Singtel performance share plans during the year, subject to certain performance criteria including other terms and conditions being
met. The performance share expense computed in accordance with FRS 102, Share-based Payment, was S$2.4 million (2016: S$1.7 million).

(3) The other key management personnel of the Group comprise the Chief Executive Officers of Consumer Singapore, Consumer Australia, Group
Enterprise, Group Digital Life and International Group, as well as the Group Chief Corporate Officer, Group Chief Financial Officer, Group Chief Human
Resources Officer, Group Chief Information Officer and Group Chief Technology Officer. In the previous financial year, the other key management
personnel of the Group comprised the Group Chief Corporate Officer and the Chief Executive Officers of Consumer Australia and Group Enterprise.
The other key management personnel were awarded up to 4,331,295 (2016: 2,216,951) ordinary shares of Singtel pursuant to Singtel performance
share plans during the year, subject to certain performance criteria including other terms and conditions being met. The performance share expense
computed in accordance with FRS 102, Share-based Payment, was S$5.6 million (2016: S$2.1 million).

(4) Directors’ remuneration comprises the following:

(i) Directors’ fees of S$2.5 million (2016: S$2.6 million), including fees paid to certain directors in their capacities as members of the Optus Advisory

Committee and the Technology Advisory Panel, and as director of Singtel Innov8 Pte. Ltd.

(ii) Car-related benefits of Chairman of S$21,611 (2016: S$21,879).
In addition to the directors’ remuneration, Venkataraman Vishnampet Ganesan, a non-executive director of Singtel, was awarded 750,718 share
options pursuant to the Amobee Long-Term Incentive Plan in the previous financial year, subject to certain terms and conditions being met. No
similar share option was awarded during the financial year. The share option expense computed in accordance with FRS 102, Share-based Payment,
was S$0.1 million (2016: S$0.1 million).

Singapore Telecommunications Limited | Annual Report 2017

164

Notes to the
Financial Statements

For the financial year ended 31 March 2017

5.3

Share-based Payments

5.3.1 Performance share plans

With effect from 1 April 2012, Restricted Share Awards and Performance Share Awards are given to selected employees
of Singtel and its subsidiaries. The awards are conditional upon the achievement of predetermined performance
targets over the performance period, which is two years for the Restricted Share Awards and three years for the
Performance Share Awards. Both awards are generally settled by delivery of Singtel shares, with the awards for certain
senior executives to be 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 Executive Resource and Compensation Committee such as retirement, redundancy, illness and death while
in employment.

Though the performance shares are awarded by Singtel, the respective subsidiaries bear all costs and expenses in any
way arising out of, or connected with, the grant and vesting of the awards to their employees.

The fair values of the performance shares are estimated using a Monte-Carlo simulation methodology at the
measurement dates, which are the grant value dates for equity-settled awards, and at the end of the reporting period
for cash-settled awards.

Restricted Share Awards
The movements of the number of performance shares for the Restricted Share Awards during the financial year were
as follows –

Group and Company
2017

Date of grant

FY2014 (1)
21 June 2013
September 2013 to March 2014

FY2015
23 June 2014
September 2014 to March 2015

FY2016
17 June 2015
September 2015 to March 2016

FY2017
20 June 2016
September 2016 to March 2017

Outstanding
as at
1 April 2016
‘000

Awarded
from targets
exceeded
‘000

Granted
‘000

Vested
‘000

Cancelled
‘000

Outstanding
as at
31 March 2017
‘000

2,482
8

4,514
14

3,993
30

–
–

5,541
87

–
–

(2,441)
(5)

(41)
(3)

–
–

1,328
4

(2,921)
(9)

(214)
–

2,707
9

2
–

–
–

(54)
–

(262)
–

3,679
30

(8)
–

(214)
–

5,319
87

11,041

5,628

1,334

(5,438)

(734)

11,831

Note:
(1)

“FY2014” denotes financial year ended 31 March 2014.

165

Notes to the
Financial Statements

For the financial year ended 31 March 2017

5.3.1 Performance share plans (Cont’d)

Group and Company
2016

Date of grant

FY2013
26 June 2012
October 2012 to March 2013

FY2014
21 June 2013
September 2013 to March 2014

FY2015
23 June 2014
September 2014 to March 2015

FY2016
17 June 2015
September 2015 to March 2016

Outstanding
as at
1 April 2015
‘000

Awarded
from targets
exceeded
‘000

Granted
‘000

Vested
‘000

Cancelled
‘000

Outstanding
as at
31 March 2016
‘000

4,164
67

4,239
12

5,073
45

–
–

4,338
30

–
–

(4,068)
(67)

(96)
–

–
–

1,227
4

(2,707)
(8)

(277)
–

2,482
8

1
–

–
–

(72)
–

(488)
(31)

4,514
14

(7)
–

(338)
–

3,993
30

13,600

4,368

1,232

(6,929)

(1,230)

11,041

The fair values of the Restricted Share Awards and the assumptions of the fair value model for the grants were
as follows –

Equity-settled

23 June 2014

17 June 2015

20 June 2016

Date of grant

Fair value at grant date

S$3.48

S$3.79

S$3.46

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

“NA” denotes Not Applicable.

15.2%
9.5%
36 months
historical
volatility
preceding
May 2014

14.8%
10.2%
36 months
historical
volatility
preceding
May 2015

15.6%
NA
36 months
historical
volatility
preceding
May 2016

4 June 2014

4 June 2015

1 June 2016

Singapore Telecommunications Limited | Annual Report 2017

166

Notes to the
Financial Statements

For the financial year ended 31 March 2017

5.3.1 Performance share plans (Cont’d)

Cash-settled
2017

Date of grant

23 June 2014

17 June 2015

20 June 2016

Fair value at 31 March 2017

S$3.89

S$3.83

S$3.65

Assumptions under Monte-Carlo Model
Expected volatility

Singtel
MSCI Asia Pacific Telco Index
MSCI Asia Pacific Telco Component Stocks

14.5%
11.0%

14.5%
NA

36 months historical volatility
preceding March 2017

Risk free interest rates
Yield of Singapore Government Securities on

31 March 2017

Cash-settled
2016

Date of grant

21 June 2013

23 June 2014

17 June 2015

Fair value at 31 March 2016

S$3.82

S$3.73

S$3.55

Assumptions under Monte-Carlo Model
Expected volatility

Singtel
MSCI Asia Pacific Telco Index
MSCI Asia Pacific Telco Component Stocks

16.0%
11.4%

36 months historical volatility
preceding March 2016

Risk free interest rates

Yield of Singapore Government Securities on

31 March 2016

167

Notes to the
Financial Statements

For the financial year ended 31 March 2017

5.3.1 Performance share plans (Cont’d)

Performance Share Awards
The movements of the number of performance shares for the Performance Share Awards during the financial year
were as follows –

Group and Company
2017

Date of grant

FY2014
21 June 2013
September 2013 to March 2014

FY2015
23 June 2014
September 2014 to March 2015

FY2016
17 June 2015
September 2015 to March 2016

FY2017
20 June 2016
September 2016 to March 2017

Group and Company
2016

Date of grant

FY2013
26 June 2012
October 2012 to March 2013

FY2014
21 June 2013
September 2013 to March 2014

FY2015
23 June 2014
September 2014 to March 2015

FY2016
17 June 2015
September 2015 to March 2016

Outstanding
as at
1 April 2016
‘000

Granted
‘000

Vested
‘000

Cancelled
‘000

Outstanding
as at
31 March 2017
‘000

8,313
15

8,169
21

9,221
157

–
–

9,133
91

(1,215)
(2)

(7,098)
(13)

–
–

(222)
–

(245)
–

(65)
–

–
–

7,947
21

8,976
157

9,068
91

25,896

9,224

(1,217)

(7,643)

26,260

Outstanding
as at
1 April 2015
‘000

Granted
‘000

Vested
‘000

Cancelled
‘000

Outstanding
as at
31 March 2016
‘000

6,814
157

8,410
15

8,314
235

–
–

9,311
157

(6,795)
(157)

–
–

(19)
–

(97)
–

(145)
(214)

(90)
–

–
–

8,313
15

8,169
21

9,221
157

23,945

9,468

(6,952)

(565)

25,896

Singapore Telecommunications Limited | Annual Report 2017

168

Notes to the
Financial Statements

For the financial year ended 31 March 2017

5.3.1 Performance share plans (Cont’d)

The fair values of the Performance Share Awards and the assumptions of the fair value model for the grants were
as follows –

Equity-settled

23 June 2014

17 June 2015

20 June 2016

Date of grant

Fair value at grant date

S$2.36

S$1.17

S$1.81

Assumptions under Monte-Carlo Model
Expected volatility

Singtel
MSCI Asia Pacific Telco Index
MSCI Asia Pacific Telco Component Stocks

15.2%
9.5%
36 months
historical
volatility
preceding
May 2014

14.8%
10.2%
36 months
historical
volatility
preceding
May 2015

15.6%
NA
36 months
historical
volatility
preceding
May 2016

Risk free interest rates
Yield of Singapore Government Securities on

4 June 2014

4 June 2015

1 June 2016

Cash-settled
2017

Date of grant

23 June 2014

17 June 2015

20 June 2016

Fair value at 31 March 2017

S$0.63

S$0.53

S$2.03

Assumptions under Monte-Carlo Model
Expected volatility

Singtel
MSCI Asia Pacific Telco Index
MSCI Asia Pacific Telco Component Stocks

14.5%
11.0%

14.5%
NA

36 months historical volatility
preceding March 2017

Risk free interest rates

Yield of Singapore Government Securities on

31 March 2017

Cash-settled
2016

Date of grant

21 June 2013

23 June 2014

17 June 2015

Fair value at 31 March 2016

–

S$1.70

S$0.76

Assumptions under Monte-Carlo Model
Expected volatility

Singtel
MSCI Asia Pacific Telco Index
MSCI Asia Pacific Telco Component Stocks

16.0%
11.4%

36 months historical volatility
preceding March 2016

Risk free interest rates

Yield of Singapore Government Securities on

31 March 2016

169

Notes to the
Financial Statements

For the financial year ended 31 March 2017

5.3.2 Amobee’s share options - equity-settled arrangement

In April 2015, Amobee Group Pte. Ltd. (“Amobee”), a wholly-owned subsidiary of the Company, implemented
the 2015 Long-Term Incentive Plan (“Amobee LTI Plan”). Selected employees (including executive directors) and
non-executive directors of Amobee group are granted options to purchase ordinary shares of Amobee.

Options are exercisable at a price no less than 100% of the fair value of the ordinary shares of Amobee on the date
of grant. Options for employees are scheduled to be fully vested in either 3 years or 3.5 years from the vesting
commencement date.

The grant dates, exercise prices and fair values of the share options were as follows –

Equity-settled
Date of grant

Exercise price

Fair value at
grant/ repriced date

For employees
13 April 2015
14 October 2015
20 January 2016/ 10 May 2016/ 24 August 2016/ 25 January 2017
23 June 2016

US$0.79
US$0.54 - US$0.79
US$0.54
US$0.54

US$0.224 - US$0.261
US$0.217 - US$0.287
US$0.287
US$0.273 - US$0.287

For non-executive directors
14 October 2015

US$0.54

US$0.203

The terms of the options granted to employees and non-executive directors are 10 years and 5 years from the date
of grant respectively.

The fair values for the share options granted were estimated using the Black-Scholes pricing model.

From 1 April 2016 to 31 March 2017, options in respect of an aggregate of 50.6 million of ordinary shares in
Amobee have been granted to the employees and non-executive directors of Amobee and/or its subsidiaries. As at
31 March 2017, options in respect of an aggregate of 36.6 million of ordinary shares in Amobee are outstanding.

5.3.3 Trustwave’s share options – equity-settled arrangement

In December 2015, Trustwave Holdings, Inc. (“Trustwave”), a 98%-owned subsidiary of the Company, implemented
the Stock Option Incentive Plan (“Trustwave ESOP’’). Selected employees (including executive directors) and non-
executive directors of Trustwave and/or its subsidiaries are granted options to purchase common stock of Trustwave.

Options are exercisable at a price no less than 100% of the fair value of the common stock of Trustwave on the date
of grant, and are scheduled to be fully vested 4 years from the vesting commencement date.

The grant dates, exercise prices and fair values of the share options were as follows –

Equity-settled
Date of grant

1 December 2015
22 January 2016
19 May 2016
12 September 2016
20 January 2017

Exercise price

Fair value at grant date

US$16.79
US$16.79
US$16.79
US$16.79
US$16.24

US$6.57
US$6.28
US$6.16 - US$6.27
US$6.03 - US$6.10
US$5.93 - US$6.57

The term of each option granted is 10 years from the date of grant.

The fair values for the share options granted were estimated using the Black-Scholes pricing model.

Singapore Telecommunications Limited | Annual Report 2017

170

Notes to the
Financial Statements

For the financial year ended 31 March 2017

5.3.3 Trustwave’s share options – equity-settled arrangement (Cont’d)

From 1 April 2016 to 31 March 2017, options in respect of an aggregate of 1.2 million of common stock in Trustwave
have been granted. As at 31 March 2017, options in respect of an aggregate of 2.5 million of common stock in
Trustwave are outstanding.

5.3.4 HOOQ’s share options – equity-settled arrangement

In December 2015, HOOQ Digital Pte. Ltd. (“HOOQ”), a 65%-owned subsidiary of the Company, implemented the
HOOQ Digital Employee Share Option Scheme (the “Scheme’’). Selected employees (including executive directors)
of HOOQ and/or its subsidiaries are granted options to purchase ordinary shares of HOOQ.

Options are exercisable at a price no less than 100% of the fair value of the ordinary shares of HOOQ on the date of
grant, and are scheduled to be fully vested 4 years from the vesting commencement date.

Options have been granted on 16 May 2016 with an exercise price of US$0.07 per share. The fair values of the options
granted on that date were between US$0.0445 and US$0.0463. The term of each option granted is 10 years from
the date of grant.

The fair values for the share options granted were estimated using the Black-Scholes pricing model.

From 1 April 2016 to 31 March 2017, options in respect of an aggregate of 58.8 million of ordinary shares in HOOQ
have been granted. As at 31 March 2017, options in respect of an aggregate of 40.7 million of ordinary shares in HOOQ
are outstanding.

5.4

Structured 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 share-based payments awards.

As at the end of the reporting period, the Trust held the following assets –

Cost of Singtel shares, net of vesting
Cash at bank

The details of Singtel shares held by the Trust were as follows –

Group

Company

2017
S$ Mil

29.0
0.4

29.4

2016
S$ Mil

26.8
0.4

27.2

2017
S$ Mil

27.0
0.4

27.4

Group

Balance as at 1 April
Purchase of Singtel shares
Vesting of shares

Number of shares

Amount

2017
‘000

6,924
4,622
(4,142)

2016
‘000

8,629
5,762
(7,467)

2017
S$ Mil

26.8
18.2
(16.0)

2016
S$ Mil

24.8
0.4

25.2

2016
S$ Mil

32.7
23.5
(29.4)

Balance as at 31 March

7,404

6,924

29.0

26.8

Upon consolidation of the Trust in the consolidated financial statements, the weighted average cost of vested Singtel
shares is taken to ‘Capital Reserve’ whereas the weighted average cost of unvested shares is taken to ‘Treasury Shares’
within equity. See Note 2.3.

171

Notes to the
Financial Statements

For the financial year ended 31 March 2017

5.5 Other Operating Expense Items

Operating expenses included the following –
Auditors’ remuneration

- Deloitte & Touche LLP, Singapore
- Deloitte Touche Tohmatsu, Australia
- Other Deloitte & Touche offices

Non-audit fees paid to

- Deloitte & Touche LLP, Singapore (1)
- Deloitte Touche Tohmatsu, Australia (1)
- Other Deloitte & Touche offices

Group

2017
S$ Mil

2016
S$ Mil

1.5
1.2
1.7

0.4
0.3
0.1

1.4
1.1
2.0

0.3
0.4
*

Impairment of trade receivables

Allowance for inventory obsolescence
Operating lease payments for properties and mobile base stations

139.1
1.6
447.8

122.6
6.3
412.1

”*” denotes amount of less than S$50,000.

Note:
(1) The non-audit fees for the current financial year ended 31 March 2017 included S$0.2 million (2016: S$0.1 million) and S$0.3 million (2016: S$0.4
million) paid to Deloitte & Touche LLP, Singapore, and Deloitte Touche Tohmatsu, Australia, respectively in respect of tax services, 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 did not affect the independence of the auditors.

OTHER INCOME

Other income included the following items –

Rental income
Net gains/ (losses) on disposal of property, plant and equipment
Net foreign exchange (losses)/ gains - trade related

Group

2017
S$ Mil

3.3
3.4
(6.2)

2016
S$ Mil

3.8
(6.3)
6.0

Singapore Telecommunications Limited | Annual Report 2017

172

Notes to the
Financial Statements

For the financial year ended 31 March 2017

DEPRECIATION AND AMORTISATION

Depreciation of property, plant and equipment
Amortisation of intangible assets
Amortisation of deferred gain on sale of a joint venture

EXCEPTIONAL ITEMS

Exceptional gains
Gain on dilution of interests in associates and joint ventures
Gain on sale of AFS investments
Reversal of impairment on AFS investments
Gain on disposal of a joint venture

Exceptional losses
Ex-gratia costs on staff restructuring

Impairment of other non-current assets
Impairment of AFS investments
Loss on sale of AFS investments
Reclassification of translation loss of a joint venture from equity
Net expense from legal disputes

Impairment of carrying value of a subsidiary

173

Group

2017
S$ Mil

2016
S$ Mil

1,959.9
282.1
(3.1)

1,892.1
259.8
(3.1)

2,238.9

2,148.8

Group

2017
S$ Mil

33.3
11.5
4.8
–
49.6

(38.3)
(11.7)
(0.6)
(0.2)
–
–
–
(50.8)

2016
S$ Mil

2.2
95.9
–
1.7
99.8

(10.2)
–
(11.6)
–
(55.9)
(37.0)
(29.9)
(144.6)

(1.2)

(44.8)

Notes to the
Financial Statements

For the financial year ended 31 March 2017

SHARE OF RESULTS OF ASSOCIATES AND JOINT VENTURES

Group

2017
S$ Mil

2016
S$ Mil

Share of ordinary results
joint ventures

-
- associates

2,693.9
247.8
2,941.7

Share of net exceptional (losses)/ gains of associates and joint ventures (post-tax) (1)

(75.4)

Write-back of impairment provision on an associate

Share of tax of ordinary results

joint ventures

-
- associates

–

(804.9)
(44.1)
(849.0)

2,616.7
171.3
2,788.0

70.0

31.7

(834.7)
(28.4)
(863.1)

Note:
(1) Share of net exceptional (losses)/ gains comprised –

Impairment charges on investments and other one-off items

Handset subsidy costs

Disposal gains on subsidiaries, divestment gains on telecom tower assets,

foreign exchanges losses on currency devaluation and other items

Divestment gains on investments

2,017.3

2,026.6

(42.4)
(44.7)

11.7
–

(75.4)

–
(24.9)

69.6
25.3

70.0

Singapore Telecommunications Limited | Annual Report 2017

174

Notes to the
Financial Statements

For the financial year ended 31 March 2017

10.

INTEREST AND INVESTMENT INCOME (NET)

Interest income from
- bank deposits
- others

Dividends from joint ventures
Gross dividends from AFS investments

Net foreign exchange gains – non-trade related
Other fair value gains/ (losses)
Fair value gains/ (losses) on fair value hedges

- hedged items
- hedging instruments

Fair value (losses)/ gains on cash flow hedges

- hedged items
- hedging instruments

11.

FINANCE COSTS

Interest expense on

- bonds
- bank loans
- others

Less: Amounts capitalised

Effects of hedging using interest rate swaps
Unwinding of discounts (including adjustments)

Group

2016
S$ Mil

6.3
44.3
50.6

42.9
2.2

95.7

2.1
(1.8)

177.7
(179.0)
(1.3)

21.1
(21.1)
–

94.7

2017
S$ Mil

5.8
31.6
37.4

60.9
1.4

99.7

8.1
0.5

57.8
(51.3)
6.5

(1.5)
1.5
–

114.8

Group

2017
S$ Mil

2016
S$ Mil

305.5
36.1
28.7
370.3

–
370.3

(0.2)
4.2

283.3
45.4
31.7
360.4

(0.8)
359.6

(4.2)
4.2

374.3

359.6

The interest rate applicable to the capitalised borrowings was 5.4 per cent as at 31 March 2016.

175

Notes to the
Financial Statements

For the financial year ended 31 March 2017

12.

TAXATION

12.1 Tax Expense

Current income tax
- Singapore
- Overseas

Deferred tax credit

Tax expense attributable to current year’s profit

Adjustments in respect of prior years (1) –
Current income tax
- over provision

Deferred income tax
- under provision

Withholding and dividend distribution taxes on dividend income from associates

and joint ventures

Note:
(1) This included certain tax credits upon finalisation of earlier years’ tax assessments.

Group

2017
S$ Mil

2016
S$ Mil

235.7
299.4
535.1

239.6
356.8
596.4

(3.9)

(5.7)

531.2

590.7

(34.8)

(18.7)

26.7

6.0

161.3

144.5

684.4

722.5

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 associates and joint ventures

Tax calculated at tax rate of 17 per cent (2016: 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
Others

Group

2017
S$ Mil

2016
S$ Mil

4,515.4
(2,017.3)
2,498.1

4,580.8
(2,026.6)
2,554.2

424.7

434.2

49.6
(7.4)
30.6
47.5
(13.8)

92.0
(28.6)
39.4
42.5
11.2

Tax expense attributable to current year’s profit

531.2

590.7

Singapore Telecommunications Limited | Annual Report 2017

176

Notes to the
Financial Statements

For the financial year ended 31 March 2017

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 – 2017
Deferred tax assets

Balance as at 1 April 2016
(Charged)/ Credited to income statement
Credited to other comprehensive income
Transfer (to)/ from current tax
Translation differences

TWDV (1) in
excess of NBV (2)
of depreciable
assets
S$ Mil

Tax losses
and unutilised
capital
allowances
S$ Mil

124.9
8.5
–
–
4.4

23.4
(2.8)
–
0.1
1.0

Provisions
S$ Mil

47.0
(8.2)
–
(0.6)
2.1

Others
S$ Mil

Total
S$ Mil

507.1
(45.6)
1.3
0.2
6.6

702.4
(48.1)
1.3
(0.3)
14.1

Balance as at 31 March 2017

40.3

137.8

21.7

469.6

669.4

Group – 2017
Deferred tax liabilities

Balance as at 1 April 2016
(Charged)/ Credited to income statement
Transfer from current tax
Translation differences

Accelerated
tax
depreciation
S$ Mil

(444.7)
(13.0)
(0.1)
–

Offshore
interest and
dividend
not
remitted
S$ Mil

Others
S$ Mil

Total
S$ Mil

(5.3)
0.2
–
–

(145.4)
26.0
(1.5)
(2.4)

(595.4)
13.2
(1.6)
(2.4)

Balance as at 31 March 2017

(457.8)

(5.1)

(123.3)

(586.2)

Group – 2016
Deferred tax assets

TWDV (1) in
excess of NBV (2)
of depreciable
assets
S$ Mil

Tax losses
and unutilised
capital
allowances
S$ Mil

Provisions
S$ Mil

Others
S$ Mil

Total
S$ Mil

513.5
6.1
(9.2)
1.1
–
0.5
(4.9)

815.1
6.1
(16.2)
1.1
(97.4)
0.7
(7.0)

22.0
–
–
–
–
–
1.4

23.4

507.1

702.4

Balance as at 1 April 2015
Acquisition of a subsidiary
Charged to income statement
Credited to other comprehensive income
Transfer to retained earnings
Transfer from current tax
Translation differences

Balance as at 31 March 2016

48.3
–
(0.7)
–
–
0.2
(0.8)

47.0

231.3
–
(6.3)
–
(97.4)
–
(2.7)

124.9

177

Notes to the
Financial Statements

For the financial year ended 31 March 2017

12.2 Deferred Taxes (Cont’d)

Group – 2016
Deferred tax liabilities

Balance as at 1 April 2015
Acquisition of a subsidiary
(Charged)/ Credited to income statement
Transfer from current tax
Translation differences

Balance as at 31 March 2016

Company – 2017
Deferred tax assets

Balance as at 1 April 2016
Charged to income statement

Balance as at 31 March 2017

Company – 2017
Deferred tax liabilities

Balance as at 1 April 2016
Charged to income statement

Balance as at 31 March 2017

Company – 2016
Deferred tax assets

Balance as at 1 April 2015
Charged to income statement

Balance as at 31 March 2016

Company – 2016
Deferred tax liabilities

Balance as at 1 April 2015
Charged to income statement

Balance as at 31 March 2016

Notes:
(1) TWDV – Tax written down value
(2) NBV – Net book value

Accelerated
tax
depreciation
S$ Mil

(416.8)
–
(19.3)
(9.2)
0.6

(444.7)

Offshore
interest and
dividend
not
remitted
S$ Mil

(5.3)
–
–
–
–

Others
S$ Mil

Total
S$ Mil

(110.9)
(68.1)
23.2
–
10.4

(533.0)
(68.1)
3.9
(9.2)
11.0

(5.3)

(145.4)

(595.4)

Provisions
S$ Mil

Others
S$ Mil

0.4
(0.1)

3.3
(0.5)

Total
S$ Mil

3.7
(0.6)

0.3

2.8

3.1

Accelerated
tax
depreciation
S$ Mil

Total
S$ Mil

(274.2)
(11.1)

(285.3)

Provisions
S$ Mil

Others
S$ Mil

Total
S$ Mil

7.3
(3.6)

6.8
(3.5)

0.5
(0.1)

0.4

3.3

3.7

Accelerated
tax
depreciation
S$ Mil

Total
S$ Mil

(256.2)
(18.0)

(274.2)

Singapore Telecommunications Limited | Annual Report 2017

178

Notes to the
Financial Statements

For the financial year ended 31 March 2017

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

2017
S$ Mil

657.8
(574.6)

2016
S$ Mil

692.3
(585.3)

2017
S$ Mil

–
(282.2)

2016
S$ Mil

–
(270.5)

83.2

107.0

(282.2)

(270.5)

Deferred tax assets are recognised to the extent that realisation of the related tax benefits through future taxable
profits is probable.

As at 31 March 2017, the subsidiaries of the Group had estimated unutilised income tax losses of approximately S$1.07
billion (2016: $831 million), unutilised investment allowances of S$50 million (2016: S$51 million), unutilised capital
tax losses of S$97 million (2016: S$91 million) and unabsorbed capital allowances of approximately S$8.7 million
(2016: S$6.2 million).

These unutilised income tax losses and investment allowances, 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 investment allowances, and unabsorbed

capital allowances

Unutilised capital tax losses

13.

EARNINGS PER SHARE

Weighted average number of ordinary shares in issue for calculation of

basic earnings per share (1)

Adjustment for dilutive effects of performance share plans

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.

179

Group

2017
S$ Mil

2016
S$ Mil

1,132.4

887.9

96.5

91.2

Group

2017
‘000

2016
‘000

16,082,136
27,115

15,937,017
15,012

16,109,251

15,952,029

Notes to the
Financial Statements

For the financial year ended 31 March 2017

13.

EARNINGS PER SHARE (Cont’d)

‘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 performance shares granted by the Group were
issued. Adjustment is made to earnings for the dilutive effect arising from the associates and joint ventures’ dilutive shares.

14.

RELATED PARTY TRANSACTIONS

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 –

Income
Subsidiaries of ultimate holding company
Telecommunications
Rental and maintenance

Associates
Telecommunications
Interest on loan

Joint ventures
Telecommunications

Expenses
Subsidiaries of ultimate holding company
Telecommunications
Utilities

Associates
Telecommunications
Postal
Rental

Joint ventures
Telecommunications
Transmission capacity

Group

2017
S$ Mil

2016
S$ Mil

91.8
29.3

49.2
27.6

110.2
29.5

7.3
40.5

35.3

34.5

43.9
72.0

146.2
8.8
3.5

37.0
27.0

54.1
95.2

135.2
8.3
4.3

53.8
30.8

Acquisition of shares in an associate and joint ventures

2,471.3

214.2

Issue of new shares

Due from subsidiaries of ultimate holding company

Due to subsidiaries of ultimate holding company

1,605.1

23.8

5.2

–

24.3

13.3

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.

Singapore Telecommunications Limited | Annual Report 2017

180

Notes to the
Financial Statements

For the financial year ended 31 March 2017

15.

CASH AND CASH EQUIVALENTS

Fixed deposits
Cash and bank balances

Group

Company

2017
S$ Mil

164.1
369.7

2016
S$ Mil

79.2
382.6

2017
S$ Mil

27.6
61.6

2016
S$ Mil

18.3
65.4

533.8

461.8

89.2

83.7

The carrying amounts of the cash and cash equivalents approximate their fair values.

Cash and cash equivalents denominated in the non-functional currencies of the Group were as follows –

USD
AUD
EUR

The maturities of the fixed deposits were as follows –

Less than three months
Over three months

Group

Company

2016
S$ Mil

74.1
3.1
8.2

2017
S$ Mil

34.6
8.1
6.6

Group

Company

2016
S$ Mil

59.2
20.0

2017
S$ Mil

27.6
–

2016
S$ Mil

22.4
1.1
2.2

2016
S$ Mil

18.3
–

2017
S$ Mil

140.7
16.9
8.8

2017
S$ Mil

147.8
16.3

164.1

79.2

27.6

18.3

As at 31 March 2017, the weighted average effective interest rate of the fixed deposits of the Group and the Company
were 1.3 per cent (2016: 1.0 per cent) per annum and 1.1 per cent (2016: 0.5 per cent) per annum respectively.

The exposure of cash and cash equivalents to interest rate risks is disclosed in Note 35.3.

181

Notes to the
Financial Statements

For the financial year ended 31 March 2017

16.

TRADE AND OTHER RECEIVABLES

Current

Trade receivables (1)
Less: Allowance for impairment of trade receivables

Group

Company

2017
S$ Mil

3,826.6
(225.2)
3,601.4

2016
S$ Mil

3,408.0
(245.9)
3,162.1

2017
S$ Mil

492.3
(90.7)
401.6

2016
S$ Mil

504.0
(84.0)
420.0

Other receivables

525.0

471.5

18.9

13.1

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 associates and joint ventures
- trade
- non-trade

Prepayments
Interest receivable
Others

Non-current

Trade receivables (1)
Prepayments
Payment to the Australian Taxation Office (2)
Other receivables

–
–
–

–
–
–
–

13.6
155.2
168.8

540.2
74.9
13.9

–
–
–

–
–
–
–

16.3
159.0
175.3

477.2
68.8
11.5

127.6
(12.7)
114.9

717.0
363.3
(45.4)
1,034.9

4.4
4.0
8.4

60.2
34.4
–

890.3
(12.7)
877.6

634.6
1,058.4
(45.4)
1,647.6

7.6
–
7.6

37.8
25.7
–

4,924.2

4,366.4

1,673.3

3,029.4

Group

Company

2017
S$ Mil

417.0
194.5
143.2
14.8

2016
S$ Mil

352.7
193.0
–
83.1

2017
S$ Mil

–
155.1
–
–

2016
S$ Mil

–
175.4
–
–

769.5

628.8

155.1

175.4

Notes:
(1) This included trade receivables under device repayment plans and other handset repayment plans where repayments are made monthly over 24

(2)

months.
In the current financial year, the Group paid A$134 million to the Australian Taxation Office (“ATO”) for amended tax assessments received in respect
of the acquisition financing of Optus. This payment has been recorded as a tax recoverable from the ATO pending outcome of its objections to the
ATO (see Note 39(b)).

Singapore Telecommunications Limited | Annual Report 2017

182

Notes to the
Financial Statements

For the financial year ended 31 March 2017

16.

TRADE AND OTHER RECEIVABLES (Cont’d)

Trade receivables are non-interest bearing and are generally on 14-day to 30-day terms, while balances due from
carriers are on 60-day terms.

As at 31 March 2017, the effective interest rate of an amount due from a subsidiary of S$153.3 million (2016: S$865.4
million) was 0.01 per cent (2016: 0.01 per cent) per annum. The loans to subsidiaries and amounts due from other
subsidiaries, associates and joint ventures were unsecured, interest-free and repayable on demand.

Amounts of S$41.0 million (2016: S$30.4 million) and nil (2016: S$62.3 million) under current and non-current other
receivables of the Group respectively are guaranteed by a third party and repayable by 31 March 2018. The weighted
average effective interest rate was 5.6% (2016: 3.5%).

The maximum exposure to credit risk for trade receivables by customer type was as follows –

Individuals
Corporations and others

Group

Company

2017
S$ Mil

2016
S$ Mil

2,049.5
1,968.9

2,139.0
1,375.8

2017
S$ Mil

145.9
255.7

2016
S$ Mil

139.4
280.6

4,018.4

3,514.8

401.6

420.0

The age analysis of trade receivables (before allowance for impairment) was as follows –

Not past due or less than 60 days overdue
Past due
- 61 to 120 days
- more than 120 days

Group

Company

2017
S$ Mil

2016
S$ Mil

2017
S$ Mil

2016
S$ Mil

3,818.8

3,286.4

332.9

326.8

114.4
310.4

120.2
354.1

32.4
127.0

22.9
154.3

4,243.6

3,760.7

492.3

504.0

The movement in the allowance for impairment of trade receivables was as follows –

Balance as at 1 April
Acquisition of a subsidiary
Allowance for impairment
Utilisation of allowance for impairment
Write-back of allowance for impairment
Translation differences

Group

Company

2017
S$ Mil

245.9
–
142.0
(166.7)
(2.9)
6.9

2016
S$ Mil

236.9
7.2
128.2
(119.9)
(5.6)
(0.9)

2017
S$ Mil

84.0
–
40.0
(33.3)
–
–

2016
S$ Mil

79.7
–
37.1
(31.3)
(1.5)
–

Balance as at 31 March

225.2

245.9

90.7

84.0

183

Notes to the
Financial Statements

For the financial year ended 31 March 2017

17.

INVENTORIES

Equipment held for resale
Maintenance and capital works’ inventories

18.

PROPERTY, PLANT AND EQUIPMENT

Group

Company

2017
S$ Mil

320.1
32.1

2016
S$ Mil

299.8
19.9

2017
S$ Mil

0.2
23.6

2016
S$ Mil

2.1
19.4

352.2

319.7

23.8

21.5

Group – 2017

Cost
Balance as at 1 April 2016
Additions (net of rebates)
Disposals/ Write-offs
Reclassifications/
Adjustments

Translation differences
Balance as at

31 March 2017

Accumulated depreciation
Balance as at 1 April 2016
Depreciation charge

for the year

Disposals/ Write-offs
Reclassifications/
Adjustments

Translation differences
Balance as at

31 March 2017

Accumulated impairment
Balance as at 1 April 2016
Impairment charge

for the year

Disposals/ Write-offs
Translation differences
Balance as at

31 March 2017

Net Book Value as at
31 March 2017

Freehold
land
S$ Mil

Leasehold
land
S$ Mil

Buildings
S$ Mil

Transmission
plant and
equipment
S$ Mil

Switching
equipment
S$ Mil

Other
plant and
equipment
S$ Mil

Capital
work-in-
progress
S$ Mil

Total
S$ Mil

21.8
–
–

–
0.7

265.2
–
–

776.7
0.5
–

18,867.0
104.5
(146.9)

2,789.7
51.1
(45.2)

5,847.0
328.9
(143.6)

1,466.2 30,033.6
2,447.5
1,962.5
(338.3)
(2.6)

–
0.5

32.4
9.9

1,195.0
513.6

95.7
36.5

515.1
132.2

(1,840.4)
30.5

(2.2)
723.9

22.5

265.7

819.5

20,533.2

2,927.8

6,679.6

1,616.2

32,864.5

–

–
–

–

–
–
–

–

74.1

315.0

12,111.2

2,083.9

4,259.6

–

18,843.8

4.1
–

–
0.5

20.9
–

1,188.4
(139.4)

161.9
(44.8)

584.6
(140.9)

–
–

11.1
334.4

–
22.4

(9.1)
99.0

–
–

1,959.9
(325.1)

2.0
456.3

78.7

335.9

13,505.7

2,223.4

4,793.2

–

20,936.9

2.0

7.3

7.4

1.9

17.2

–
–
–

–
(2.0)
–

–
(1.6)
–

2.4
(0.4)
0.5

2.0

7.3

5.4

0.3

19.7

–

–
–
–

–

35.8

2.4
(4.0)
0.5

34.7

22.5

185.0

476.3

7,022.1

704.1

1,866.7

1,616.2

11,892.9

Singapore Telecommunications Limited | Annual Report 2017

184

Notes to the
Financial Statements

For the financial year ended 31 March 2017

18.

PROPERTY, PLANT AND EQUIPMENT (Cont’d)

Group – 2016

Cost
Balance as at 1 April 2015
Additions (net of rebates)
Disposals/ Write-offs
Acquisition of a subsidiary
Reclassifications/
Adjustments

Translation differences
Balance as at

31 March 2016

Accumulated depreciation
Balance as at 1 April 2015
Depreciation charge

for the year

Disposals/ Write-offs
Reclassifications/
Adjustments

Translation differences
Balance as at

31 March 2016

Accumulated impairment
Balance as at 1 April 2015
Disposals/ Write-offs
Translation differences
Balance as at

31 March 2016

Net Book Value as at
31 March 2016

Freehold
land
S$ Mil

Leasehold
land
S$ Mil

Buildings
S$ Mil

Transmission
plant and
equipment
S$ Mil

Switching
equipment
S$ Mil

Other
plant and
equipment
S$ Mil

Capital
work-in-
progress
S$ Mil

Total
S$ Mil

22.0
–
–
–

–
(0.2)

266.1
–
–
–

774.7
7.7
(5.3)
–

18,224.8
119.3
(698.4)
–

2,919.8
50.6
(248.3)
–

5,889.8
171.7
(549.4)
27.8

1,199.3
2,081.3
–
–

29,296.5
2,430.6
(1,501.4)
27.8

(0.6)
(0.3)

2.8
(3.2)

1,367.9
(146.6)

81.1
(13.5)

358.4
(51.3)

(1,818.6)
4.2

(9.0)
(210.9)

21.8

265.2

776.7

18,867.0

2,789.7

5,847.0

1,466.2

30,033.6

–

–
–

–

–
–
–

–

69.9

301.4

11,779.8

2,168.6

4,253.6

–

18,573.3

4.8
–

(0.3)
(0.3)

18.9
(5.3)

1,121.9
(692.0)

168.5
(244.5)

578.0
(536.5)

–
–

1,892.1
(1,478.3)

–
–

(0.6)
(97.9)

–
(8.7)

(8.3)
(27.2)

–
–

(9.2)
(134.1)

74.1

315.0

12,111.2

2,083.9

4,259.6

–

18,843.8

2.0
–
–

7.3
–
–

7.6
(0.2)
–

5.2
(3.3)
–

17.9
(0.4)
(0.3)

2.0

7.3

7.4

1.9

17.2

–
–
–

–

40.0
(3.9)
(0.3)

35.8

21.8

189.1

454.4

6,748.4

703.9

1,570.2

1,466.2

11,154.0

185

Notes to the
Financial Statements

For the financial year ended 31 March 2017

18.

PROPERTY, PLANT AND EQUIPMENT (Cont’d)

Company – 2017

Cost
Balance as at 1 April 2016
Additions (net of rebates)
Disposals/ Write-offs
Reclassifications
Balance as at

Freehold
land
S$ Mil

Leasehold
land
S$ Mil

Buildings
S$ Mil

Transmission
plant and
equipment
S$ Mil

Switching
equipment
S$ Mil

Other
plant and
equipment
S$ Mil

Capital
work-in-
progress
S$ Mil

Total
S$ Mil

0.4
–
–
–

228.2
–
–
–

432.9
–
–
0.1

3,188.7
46.9
(52.9)
116.4

925.2
17.3
(29.3)
17.8

1,563.9
199.7
(70.6)
119.7

525.1
231.5
–
(254.0)

6,864.4
495.4
(152.8)
–

31 March 2017

0.4

228.2

433.0

3,299.1

931.0

1,812.7

502.6

7,207.0

Accumulated depreciation
Balance as at 1 April 2016
Depreciation charge

for the year

Disposals/ Write-offs
Balance as at

31 March 2017

Accumulated impairment
Balance as at 1 April 2016
Disposals/ Write-offs
Balance as at

31 March 2017

Net Book Value as at
31 March 2017

–

–
–

–

–
–

–

53.8

268.2

2,383.1

838.8

1,132.4

–

4,676.3

2.7
–

13.6
–

131.5
(46.2)

43.2
(29.2)

144.8
(69.5)

–
–

335.8
(144.9)

56.5

281.8

2,468.4

852.8

1,207.7

–

4,867.2

2.0
–

7.2
–

5.9
(1.8)

1.2
(1.2)

0.4
(0.4)

2.0

7.2

4.1

–

–
–

–

16.7
(3.4)

13.3

0.4

169.7

144.0

826.6

78.2

605.0

502.6

2,326.5

Singapore Telecommunications Limited | Annual Report 2017

186

Notes to the
Financial Statements

For the financial year ended 31 March 2017

18.

PROPERTY, PLANT AND EQUIPMENT (Cont’d)

Company – 2016

Cost
Balance as at 1 April 2015
Additions (net of rebates)
Disposals/ Write-offs
Reclassifications
Balance as at

31 March 2016

Accumulated depreciation
Balance as at 1 April 2015
Depreciation charge

for the year

Disposals/ Write-offs
Balance as at

31 March 2016

Accumulated impairment
Balance as at 1 April 2015
Disposals/ Write-offs
Balance as at

31 March 2016

Net Book Value as at
31 March 2016

Freehold
land
S$ Mil

Leasehold
land
S$ Mil

Buildings
S$ Mil

Transmission
plant and
equipment
S$ Mil

Switching
equipment
S$ Mil

Other
plant and
equipment
S$ Mil

Capital
work-in-
progress
S$ Mil

Total
S$ Mil

0.4
–
–
–

228.2
–
–
–

431.5
–
–
1.4

3,143.5
47.6
(56.9)
54.5

998.1
12.1
(105.2)
20.2

1,486.0
55.0
(47.4)
70.3

310.0
361.5
–
(146.4)

6,597.7
476.2
(209.5)
–

0.4

228.2

432.9

3,188.7

925.2

1,563.9

525.1

6,864.4

–

–
–

–

–
–

–

51.1

256.8

2,277.6

895.3

1,052.4

–

4,533.2

2.7
–

11.4
–

156.9
(51.4)

48.7
(105.2)

125.9
(45.9)

–
–

345.6
(202.5)

53.8

268.2

2,383.1

838.8

1,132.4

–

4,676.3

2.0
–

2.0

7.2
–

7.2

6.1
(0.2)

5.9

1.2
–

1.2

0.8
(0.4)

0.4

–
–

–

17.3
(0.6)

16.7

0.4

172.4

157.5

799.7

85.2

431.1

525.1

2,171.4

Property, plant and equipment included the following –

Group

Company

2017
S$ Mil

2016
S$ Mil

2017
S$ Mil

2016
S$ Mil

Net book value of property, plant and equipment

Assets acquired under finance leases

78.6

102.0

29.2

37.7

Staff costs capitalised

235.4

236.9

35.6

33.9

187

Notes to the
Financial Statements

For the financial year ended 31 March 2017

19.

INTANGIBLE ASSETS

Goodwill on acquisition of subsidiaries
Telecommunications and spectrum licences
Technology and brand
Customer relationships and others

19.1 Goodwill on Acquisition of Subsidiaries

Balance as at 1 April
Acquisition of subsidiaries
Impairment charge for the year
Translation differences

Balance as at 31 March

19.2 Telecommunications and Spectrum Licences

Group

Company

2017
S$ Mil

2016
S$ Mil

2017
S$ Mil

2016
S$ Mil

11,164.6
1,565.5
302.5
40.2

11,090.3
1,439.8
374.1
64.2

13,072.8

12,968.4

–
–
–
–

–

–
0.3
–
–

0.3

Group

2017
S$ Mil

2016
S$ Mil

11,090.3
–
–
74.3

10,123.0
1,069.8
(29.2)
(73.3)

11,164.6

11,090.3

Group

Company

2017
S$ Mil

2016
S$ Mil

2017
S$ Mil

2016
S$ Mil

Balance as at 1 April
Additions
Amortisation for the year
Disposals/ Write-offs
Translation differences

1,439.8
271.8
(192.2)
–
46.1

1,488.2
146.6
(180.5)
(0.3)
(14.2)

Balance as at 31 March

1,565.5

1,439.8

Cost
Accumulated amortisation
Accumulated impairment

2,876.4
(1,304.7)
(6.2)

2,523.5
(1,077.5)
(6.2)

Net book value as at 31 March

1,565.5

1,439.8

0.3
–
(0.3)
–
–

–

8.4
(8.4)
–

–

0.7
–
(0.4)
–
–

0.3

8.4
(8.1)
–

0.3

Singapore Telecommunications Limited | Annual Report 2017

188

Notes to the
Financial Statements

For the financial year ended 31 March 2017

19.3 Technology and Brand

Balance as at 1 April
Acquisition of subsidiaries
Amortisation for the year
Impairment charge for the year
Adjustments
Translation differences

Balance as at 31 March

Cost
Accumulated amortisation
Accumulated impairment

Net book value as at 31 March

19.4 Customer Relationships and Others

Balance as at 1 April
Acquisition of subsidiaries
Additions
Amortisation for the year
Reclassifications/ Adjustments
Translation differences

Balance as at 31 March

Cost
Accumulated amortisation

Net book value as at 31 March

189

Group

2016
S$ Mil

296.9
171.0
(73.8)
(5.0)
–
(15.0)

2017
S$ Mil

374.1
–
(71.5)
(9.3)
(4.7)
13.9

302.5

374.1

550.4
(230.4)
(17.5)

550.6
(168.4)
(8.1)

302.5

374.1

Group

2017
S$ Mil

64.2
–
2.9
(18.4)
(9.6)
1.1

2016
S$ Mil

40.5
15.8
14.2
(5.5)
–
(0.8)

40.2

64.2

134.6
(94.4)

128.8
(64.6)

40.2

64.2

Notes to the
Financial Statements

For the financial year ended 31 March 2017

20.

SUBSIDIARIES

Unquoted equity shares, at cost
Shareholders’ advances
Deemed investment in a subsidiary

Less: Allowance for impairment losses

Company

2017
S$ Mil

2016
S$ Mil

11,001.2
6,423.3
32.5
17,457.0
(16.0)

7,742.5
6,423.3
32.5
14,198.3
(16.0)

17,441.0

14,182.3

The advances given to subsidiaries were interest-free except for an amount of S$678.3 million (2016: S$678.3 million)
where the effective interest rate for the year ended as at 31 March 2017 was 1.0 per cent (2016: 1.6 per cent) per
annum. The advances were unsecured with settlement neither planned nor likely to occur in the foreseeable future.

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 prior to 1 April 2010.

The significant subsidiaries of the Group are set out in Note 43.1 to Note 43.3.

21.

ASSOCIATES

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)

Translation differences

2017
S$ Mil

1,589.9
742.6
1.7
2,334.2

2016
S$ Mil

74.3
743.2
1.7
819.2

(28.3)

(153.7)
65.0
(117.0)

(143.2)
(17.8)
(189.3)

Reclassification to ‘Net deferred gain’ (see Note 26)

(265.0)

(273.6)

2017
S$ Mil

24.7
578.8
–
603.5

–

–
–
–

–

2016
S$ Mil

24.7
578.8
–
603.5

–

–
–
–

–

1,952.2

356.3

603.5

As at 31 March 2017,

(i)

(ii)

The market values of the quoted equity shares in associates held by the Group and the Company were
S$2,235.2 million (2016: S$862.4 million) and S$671.8 million (2016: S$807.7 million) respectively.

The Group’s proportionate interest in the capital commitments of the associates was S$227.3 million
(2016: S$154.3 million).

The details of associates are set out in Note 43.4.

Singapore Telecommunications Limited | Annual Report 2017

190

Notes to the
Financial Statements

For the financial year ended 31 March 2017

21.

ASSOCIATES (Cont’d)

The summarised financial
information of the Group’s significant associate namely Intouch (which was
acquired in November 2016), based on its financial statements and a reconciliation with the carrying amount of
the investment in the consolidated financial statements was as follows –

Group – 2017

Statement of comprehensive income
Revenue
Depreciation and amortisation
Interest income
Interest expense
Income tax expense

Profit after tax
Other comprehensive loss

Total comprehensive income

Statement of financial position
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Net assets
Less: Non-controlling interests

Net assets attributable to equity holders

Proportion of the Group’s ownership
Group’s share of net assets
Goodwill and other identifiable intangible assets
Others

Carrying amount of the investment

Other items
Cash and cash equivalents
Non-current financial liabilities excluding trade and other payables
Current financial liabilities excluding trade and other payables

Group’s share of market value

191

Intouch
S$ Mil

144.1
(41.7)
2.7
(5.5)
(21.2)

166.1
(1.6)

164.5

701.9
1,607.4
(483.6)
(395.3)
1,430.4
(411.6)

1,018.8

21.0%
213.9
1,371.7
(8.4)

1,577.2

144.3
(350.7)
(37.9)

1,525.0

Notes to the
Financial Statements

For the financial year ended 31 March 2017

21.

ASSOCIATES (Cont’d)

The aggregate information of the Group’s investments in associates which are not individually significant were
as follows –

Share of profit after tax
Share of other comprehensive income/ (loss)

Share of total comprehensive income

22.

JOINT VENTURES

Group

2017
S$ Mil

76.3
2.9

79.2

Group

Company

Quoted equity shares, at cost
Unquoted equity shares, at cost

Goodwill on consolidation adjusted against

shareholders’ equity

Share of post-acquisition reserves (net of

dividends, and accumulated amortisation
of goodwill)

Translation differences

2017
S$ Mil

2,798.4
5,240.8
8,039.2

2016
S$ Mil

2,798.4
4,393.6
7,192.0

(1,225.9)

8,715.2
(3,215.6)
4,273.7

8,431.2
(3,637.4)
3,567.9

Less: Allowance for impairment losses

(30.0)

2017
S$ Mil

–
23.0
23.0

–

–
–
–

–

2016
S$ Mil

112.2
(1.8)

110.4

2016
S$ Mil

–
21.2
21.2

–

–
–
–

–

12,282.9

10,729.9

23.0

21.2

As at 31 March 2017,

(i)

(ii)

The market value of the quoted equity shares in joint ventures held by the Group was S$19.55 billion
(2016: S$19.15 billion).

The Group’s proportionate interest in the capital commitments of joint ventures was S$1.80 billion
(2016: S$1.53 billion).

The details of joint ventures are set out in Note 43.5.

Optus has an interest in an unincorporated joint operation to share certain 3G network sites and radio infrastructure
across Australia whereby it holds an interest of 50% (2016: 50%) in the assets, with access to the shared network and
shares 50% (2016: 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 operation of S$1.03 billion (2016: S$811.0 million).

Singapore Telecommunications Limited | Annual Report 2017

192

Notes to the
Financial Statements

For the financial year ended 31 March 2017

22.

JOINT VENTURES (Cont’d)

The summarised financial information of the Group’s significant joint ventures namely Bharti Airtel Limited (“Airtel”),
PT Telekomunikasi Selular (“Telkomsel”), Globe Telecom, Inc. (“Globe”) and Advanced Info Service Public
Company Limited (“AIS”), based on their financial statements and a reconciliation with the carrying amounts of the
investments in the consolidated financial statements were as follows –

Group – 2017

Statement of comprehensive income
Revenue
Depreciation and amortisation
Interest income
Interest expense
Income tax expense

Profit after tax
Other comprehensive (loss)/ income

Airtel
S$ Mil

Telkomsel
S$ Mil

Globe
S$ Mil

AIS
S$ Mil

19,666.4
(4,073.3)
380.9
(1,945.0)
(718.9)

834.5
(1,048.7)

9,265.4
(1,352.8)
105.8
(77.0)
(1,003.5)

3,059.4
(40.6)

3,657.1
(690.8)
3.8
(128.6)
(169.5)

439.5
4.0

6,058.2
(967.5)
7.9
(188.5)
(238.4)

1,191.2
(0.1)

Total comprehensive (loss)/ income

(214.2)

3,018.8

443.5

1,191.1

Statement of financial position
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Net assets
Less: Non-controlling interests

4,378.4
45,611.2
(13,568.3)
(20,676.7)
15,744.6
(1,399.0)

3,562.2
6,169.6
(2,541.8)
(896.8)
6,293.2
–

1,490.0
5,545.0
(2,335.1)
(2,910.8)
1,789.1
0.4

1,299.5
10,041.0
(2,994.1)
(6,816.6)
1,529.8
(5.7)

Net assets attributable to equity holders

14,345.6

6,293.2

1,789.5

1,524.1

Proportion of the Group’s ownership
Group’s share of net assets
Goodwill capitalised
Others (1)

36.5%
5,230.4
1,229.0
387.6

35.0%
2,202.6
1,403.6
–

47.1%
843.6
381.7
(139.9)

23.3%
355.4
293.3
(2.3)

Carrying amount of the investment

6,847.0

3,606.2

1,085.4

646.4

Other items
Cash and cash equivalents
Non-current financial liabilities excluding

trade and other payables

Current financial liabilities excluding

trade and other payables

348.7

2,371.9

229.1

522.0

(19,774.0)

(570.2)

(2,658.7)

(3,690.1)

(3,884.7)

(76.6)

(353.6)

(187.4)

Group’s share of market value

10,995.3

3,544.1

5,013.9

Dividends received during the year

16.5

971.2

159.9

330.3

‘‘NA’’ denotes Not Applicable.

Note:
(1) Others include adjustments to align the respective local accounting standards to FRS.

193

Notes to the
Financial Statements

For the financial year ended 31 March 2017

22.

JOINT VENTURES (Cont’d)

Group – 2016

Statement of comprehensive income
Revenue
Depreciation and amortisation
Interest income
Interest expense
Income tax expense

Profit after tax
Other comprehensive loss

Airtel
S$ Mil

Telkomsel
S$ Mil

Globe
S$ Mil

AIS
S$ Mil

20,460.8
(3,697.3)
677.1
(2,136.7)
(1,259.7)

1,162.8
(175.7)

8,069.1
(1,352.6)
99.1
(90.3)
(806.4)

2,449.6
–

3,704.1
(687.3)
11.2
(102.4)
(212.4)

498.5
(11.0)

6,020.9
(758.3)
7.9
(89.2)
(331.5)

1,479.6
(20.4)

Total comprehensive income

987.1

2,449.6

487.5

1,459.2

Statement of financial position
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Net assets
Less: Non-controlling interests

4,651.5
41,075.9
(11,841.7)
(19,482.6)
14,403.1
(1,057.1)

3,823.9
5,708.6
(2,370.6)
(1,255.1)
5,906.8
–

1,381.8
4,353.6
(1,976.4)
(1,975.4)
1,783.6
0.1

1,540.1
5,864.0
(3,102.0)
(2,876.2)
1,425.9
(4.5)

Net assets attributable to equity holders

13,346.0

5,906.8

1,783.7

1,421.4

Proportion of the Group’s ownership
Group’s share of net assets
Goodwill capitalised
Others (1)

32.9%
4,390.8
805.0
282.9

35.0%
2,067.4
1,403.6
–

47.2%
841.9
386.5
(148.5)

23.3%
331.2
276.4
(1.9)

Carrying amount of the investment

5,478.7

3,471.0

1,079.9

605.7

Other items
Cash and cash equivalents
Non-current financial liabilities excluding

trade and other payables

Current financial liabilities excluding

trade and other payables

754.2

2,442.0

302.6

609.4

(18,648.4)

(1,010.5)

(1,779.0)

(1,978.6)

(1,699.9)

(66.8)

(281.7)

(163.2)

Group’s share of market value

10,244.3

4,073.9

4,827.5

Dividends received during the year

28.0

721.6

156.6

346.2

‘‘NA’’ denotes Not Applicable.

Note:
(1) Others include adjustments to align the respective local accounting standards to FRS.

Singapore Telecommunications Limited | Annual Report 2017

194

Notes to the
Financial Statements

For the financial year ended 31 March 2017

22.

JOINT VENTURES (Cont’d)

The aggregate information of the Group’s investments in joint ventures which are not individually significant were
as follows –

Share of profit after tax
Share of other comprehensive loss

Share of total comprehensive income

Aggregate carrying value

23.

IMPAIRMENT REVIEWS

Goodwill arising on acquisition of subsidiaries

Group

2017
S$ Mil

18.1
(0.1)

18.0

97.9

2016
S$ Mil

8.2
(0.4)

7.8

94.6

The carrying values of the Group’s goodwill on acquisition of subsidiaries as at 31 March 2017 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 Group is structured into three business segments, Group Consumer, Group Enterprise and Group Digital Life.
Based on the relative fair value approach, the goodwill of Optus was fully allocated to Consumer Australia included in
the Group Consumer segment for the purpose of goodwill impairment test.

Group

2017
S$ Mil

2016
S$ Mil

Terminal
growth rate (1)

Pre-tax
discount rate

2017

2016

2017

2016

Carrying value of goodwill in –

Optus Group

9,288.4

9,283.0

Trustwave Holdings, Inc.

1,064.2

1,021.8

3.0%

4.0%

3.0%

4.0%

9.3%

9.5%

13.1%

13.2%

Amobee, Inc.

729.8

703.3

4.0%

14.4%

15.1%

SCS Computer Systems Pte. Ltd.

82.2

2.0%

7.6%

7.9%

Note:
(1) Weighted average growth rate used to extrapolate cash flows beyond the terminal year.

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. The Group has used cash flow projections of five years except
for Amobee and Trustwave which were based on cash flow projections of ten years to better reflect their stages
of growth. 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.

195

Notes to the
Financial Statements

For the financial year ended 31 March 2017

23.

IMPAIRMENT REVIEWS (Cont’d)

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 2017, no impairment charge was required for goodwill arising from acquisition of subsidiaries, with
any reasonably possible change to the key assumptions applied not likely to cause the recoverable values to be below
their carrying values.

24.

AVAILABLE-FOR-SALE (“AFS”) INVESTMENTS

Balance as at 1 April
Additions
Disposals/ Write-offs
Write-back of/ (Provision for) impairment
Net fair value gains/ (losses) included in

‘Other Comprehensive Income’

Reclassified to ‘Associates’
Translation differences

Group

Company

2017
S$ Mil

147.5
39.6
(11.0)
0.9

16.5
–
(0.6)

2016
S$ Mil

268.3
38.8
(40.8)
(11.6)

(87.5)
(21.6)
1.9

2017
S$ Mil

35.1
–
–
–

2.3
–
–

Balance as at 31 March

192.9

147.5

37.4

AFS investments included the following –

Quoted equity securities

- Thailand
- United States of America
- Singapore

Unquoted
Equity securities
Others

Group

Company

2017
S$ Mil

21.4
4.2
7.7
33.3

149.4
10.2
159.6

2016
S$ Mil

18.7
14.1
8.7
41.5

95.0
11.0
106.0

2017
S$ Mil

21.4
–
7.7
29.1

8.3
–
8.3

2016
S$ Mil

43.6
–
–
–

(8.5)
–
–

35.1

2016
S$ Mil

18.7
–
8.7
27.4

7.7
–
7.7

192.9

147.5

37.4

35.1

Singapore Telecommunications Limited | Annual Report 2017

196

Notes to the
Financial Statements

For the financial year ended 31 March 2017

25. DERIVATIVE FINANCIAL INSTRUMENTS

Balance as at 1 April
Fair value (losses)/ gains

-
-

included in income statement
included in ‘Hedging Reserve’

Settlement of swaps for bonds repaid
Translation differences

Balance as at 31 March

Disclosed as –
Current asset
Non-current asset
Current liability
Non-current liability

Group

Company

2017
S$ Mil

2016
S$ Mil

2017
S$ Mil

2016
S$ Mil

299.3

489.7

(99.9)

44.2

(58.0)
13.9
(16.3)
4.7

(186.5)
(2.2)
–
(1.7)

(0.8)
12.7
–
–

(178.3)
34.2
–
–

243.6

299.3

(88.0)

(99.9)

107.3
455.2
(15.8)
(303.1)

17.5
622.6
(24.6)
(316.2)

107.1
284.9
(110.0)
(370.0)

9.5
321.0
(13.7)
(416.7)

243.6

299.3

(88.0)

(99.9)

25.1 Fair Values

The fair values of the currency and interest rate swap contracts exclude accrued interest of S$19.6 million
(2016: S$18.1 million). The accrued interest is separately disclosed in Note 16 and Note 27.

The fair values of the derivative financial instruments were as follows –

2017

Fair value and cash flow hedges
Cross currency swaps
Interest rate swaps

Forward foreign exchange contracts

Derivatives that do not qualify for hedge accounting
Cross currency swaps
Interest rate swaps

Forward foreign exchange contracts

Disclosed as –
Current
Non-current

197

Group
Fair values

Company
Fair values

Assets
S$ Mil

Liabilities
S$ Mil

Assets
S$ Mil

Liabilities
S$ Mil

529.1
31.0
2.1

–
0.1
0.2

152.2
129.3
27.0

–
10.4
–

–
–
2.1

350.4
39.5
–

72.5
7.4
10.2

350.4
39.5
–

562.5

318.9

392.0

480.0

107.3
455.2

15.8
303.1

107.1
284.9

110.0
370.0

562.5

318.9

392.0

480.0

Notes to the
Financial Statements

For the financial year ended 31 March 2017

25.1 Fair Values (Cont’d)

2016

Fair value and cash flow hedges
Cross currency swaps
Interest rate swaps

Forward foreign exchange contracts

Derivatives that do not qualify for hedge accounting
Cross currency swaps
Interest rate swaps

Forward foreign exchange contracts

Disclosed as –
Current
Non-current

Group
Fair values

Company
Fair values

Assets
S$ Mil

Liabilities
S$ Mil

Assets
S$ Mil

Liabilities
S$ Mil

579.2
47.6
10.7

–
2.6
–

121.7
158.2
46.7

–
12.7
1.5

–
–
2.7

266.4
61.4
–

72.0
8.7
21.6

266.4
61.4
0.3

640.1

340.8

330.5

430.4

17.5
622.6

24.6
316.2

9.5
321.0

13.7
416.7

640.1

340.8

330.5

430.4

The cash flow hedges are designated for foreign currency commitments and repayments of principal and interest of
foreign currency denominated bonds.

The forecast transactions for the foreign currency commitments are expected to occur in the financial year ending
31 March 2018, while the forecast transactions for the repayment of principal and interest of the foreign currency
denominated bonds will occur according to the timing disclosed in Note 29.

As at 31 March 2017, 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

2017

2016

2017

2016

3,680.9

3,484.7
1.2% to 6.2% 1.2% to 6.2%
1.8% to 2.3% 1.8% to 2.3%

4,639.6

4,336.9
1.2% to 4.5% 1.2% to 4.5%
1.1% to 2.3% 1.5% to 1.8%

6,073.3

5,327.3
1.9% to 7.5% 1.8% to 7.5%
1.5% to 3.3% 1.4% to 3.8%

7,543.6

6,208.0
0.9% to 5.2% 0.9% to 5.2%
1.5% to 3.2% 1.3% to 3.5%

1,358.2

2,122.8

713.3

611.1

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.

Singapore Telecommunications Limited | Annual Report 2017

198

Notes to the
Financial Statements

For the financial year ended 31 March 2017

26.

LOAN TO AN ASSOCIATE/ NET DEFERRED GAIN

Group

Company

2017
S$ Mil

2016
S$ Mil

2017
S$ Mil

2016
S$ Mil

Loan to an associate

1,100.5

Unamortised deferred gain
Reclassification from ‘Associates’ (see Note 21)

1,616.5
(265.0)

1,664.8
(273.6)

Net deferred gain

1,351.5

1,391.2

Classified as –
Current
Non-current

68.8
1,282.7

67.9
1,323.3

1,351.5

1,391.2

–
–

–

–
–

–

–
–

–

–
–

–

NetLink Trust is a business trust established as part of the Info-communications Media Development Authority of
Singapore’s (“IMDA”) effective open access requirements under Singapore’s Next Generation Nationwide Broadband
Network. In prior years, Singtel had sold certain infrastructure assets, namely ducts and manholes used by OpenNet
Pte. Ltd., and exchange buildings (“Assets”), and Singtel’s business of providing duct and manhole services in relation
to the Assets (“Business”) to NetLink Trust.

Singtel does not have effective control over NetLink Trust and hence it is equity accounted as an associate at
the Group.

At the consolidated level, the gain on disposal of Assets and Business recorded by Singtel is deferred in the Group’s
statement of financial position and amortised over the useful lives of the Assets. The unamortised deferred gain in
the Group’s statement of financial position will be released to the Group’s income statement when NetLink Trust is
partially or fully sold, based on the proportionate equity interest disposed. In addition, lease expenses paid to NetLink
Trust and interest income earned from NetLink Trust are not eliminated on a line-by-line basis in the Group.

The loan to NetLink Trust carries a fixed interest rate and is repayable on 22 April 2018. The loan is secured by a fixed
and floating charge over NetLink Trust’s assets and business undertakings. Under the loan agreement, unpaid interest
are included as part of the loan.

As at 31 March 2017, the loan principal was S$1.10 billion (2016: S$1.10 billion) and interest included as part of the loan
was S$5.5 million (2016: S$5.5 million).

Singtel has given an undertaking to IMDA to divest its stake in NetLink Trust to less than 25% ownership by
22 April 2018, and has since commenced preparation for an initial public offering of NetLink Trust.

199

Notes to the
Financial Statements

For the financial year ended 31 March 2017

27.

TRADE AND OTHER PAYABLES

Trade payables
Accruals
Interest payable on borrowings
Deferred income
Customers’ deposits
Due to associates and joint ventures

- trade
- non-trade

Due to subsidiaries

- trade
- non-trade

Other payables

“*” denotes amount of less than S$50,000.

Group

Company

2017
S$ Mil

3,589.6
983.4
142.7
31.3
26.2

27.9
*
27.9

–
–
–
120.2

2016
S$ Mil

3,409.9
916.1
130.5
18.4
27.2

27.8
0.1
27.9

–
–
–
64.0

2017
S$ Mil

592.9
160.4
43.6
11.5
15.8

22.3
–
22.3

263.8
458.2
722.0
33.5

2016
S$ Mil

616.6
171.5
35.8
11.8
16.5

21.3
0.1
21.4

271.8
394.9
666.7
41.9

4,921.3

4,594.0

1,602.0

1,582.2

The trade payables are non-interest bearing and are generally settled on 30 to 60 days terms, with some payables
relating to handset and network investments having payment terms of up to a year.

The interest payable on borrowings are generally settled on a half-year or annual basis except for interest payable on
certain bonds and syndicated loan facilities which are settled on quarterly and monthly basis respectively.

The amounts due to subsidiaries are repayable on demand and interest-free.

28.

PROVISION

The provision relates mainly to provision for liquidated damages and warranties. The movements were as follows –

Balance as at 1 April
Provision
Amount written off against provision

Balance as at 31 March

Group

Company

2017
S$ Mil

3.1
1.4
(3.4)

1.1

2016
S$ Mil

5.8
0.8
(3.5)

3.1

2017
S$ Mil

2.2
0.9
(3.1)

–

2016
S$ Mil

3.4
0.5
(1.7)

2.2

Singapore Telecommunications Limited | Annual Report 2017

200

Notes to the
Financial Statements

For the financial year ended 31 March 2017

29.

BORROWINGS (UNSECURED)

Current
Bonds
Bank loans

Non-current
Bonds
Bank loans

Group

Company

2017
S$ Mil

2016
S$ Mil

2017
S$ Mil

2016
S$ Mil

978.7
2,068.2

395.5
200.0

3,046.9

595.5

–
–

–

–
–

–

7,702.7
150.0

7,952.1
1,066.9

746.2
–

747.2
–

7,852.7

9,019.0

746.2

747.2

Total unsecured borrowings

10,899.6

9,614.5

746.2

747.2

29.1 Bonds

Principal amount

US$2,300 million (1) (2016: US$1,800 million)
US$500 million (1)
US$500 million (1)(2)
US$400 million

€700 million (1)(2)

A$625 million (2)

S$600 million (1)
S$550 million (2016: S$800 million)
S$150 million (2)

¥10,000 million

HK$1,000 million (2)
HK$620 million (2016: HK$1,450 million)

Classified as –
Current
Non-current

Group

Company

2017
S$ Mil

2016
S$ Mil

3,212.7
746.2
711.2
559.2

2,515.9
747.2
697.5
538.7

1,071.0

1,104.2

665.0

600.0
550.0
149.9

124.9

179.8
111.5

642.0

600.0
800.0
149.9

122.3

173.6
256.3

2017
S$ Mil

–
746.2
–
–

–

–
–
–

–

–
–

2016
S$ Mil

–
747.2
–
–

–

–
–
–

–

–
–

8,681.4

8,347.6

746.2

747.2

978.7
7,702.7

395.5
7,952.1

8,681.4

8,347.6

–
746.2

746.2

–
747.2

747.2

Notes:
(1) The bonds are listed on the Singapore Exchange.
(2) The bonds, issued by Optus Group, are subject to a negative pledge that limits the amount of secured indebtedness of certain subsidiaries of Optus.

201

Notes to the
Financial Statements

For the financial year ended 31 March 2017

29.2 Bank Loans

Current
Non-current

29.3 Maturity

Group

2017
S$ Mil

2016
S$ Mil

2,068.2
150.0

200.0
1,066.9

2,218.2

1,266.9

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

2017
S$ Mil

2016
S$ Mil

1,346.0
3,709.2
2,797.5

2,014.1
3,883.8
3,121.1

2017
S$ Mil

–
–
746.2

2016
S$ Mil

–
–
747.2

7,852.7

9,019.0

746.2

747.2

The weighted average effective interest rates at the end of the reporting period were as follows –

Bonds (fixed rate)
Bonds (floating rate)
Bank loans (floating rate)

Group

Company

2017
%

3.8
2.1
1.6

2016
%

3.8
1.7
2.3

2017
%

7.4
–
–

2016
%

7.4
–
–

Singapore Telecommunications Limited | Annual Report 2017

202

Notes to the
Financial Statements

For the financial year ended 31 March 2017

29.5 The tables below set out the maturity profile of borrowings and related swaps based on expected contractual

undiscounted cash flows.

Group

As at 31 March 2017
Net-settled interest rate swaps
Cross currency interest rate swaps (gross-settled)
- Inflow
- Outflow

Borrowings

As at 31 March 2016
Net-settled interest rate swaps
Cross currency interest rate swaps (gross-settled)
- Inflow
- Outflow

Borrowings

Company

As at 31 March 2017
Net-settled interest rate swaps
Cross currency interest rate swaps (gross-settled)
- Inflow
- Outflow

Borrowings

As at 31 March 2016
Net-settled interest rate swaps
Cross currency interest rate swaps (gross-settled)
- Inflow
- Outflow

Borrowings

203

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

47.4

44.3

48.3

20.4

(208.1)
162.4
1.7
3,258.8

(191.8)
154.7
7.2
1,618.2

(410.4)
290.7
(71.4)
4,059.6

(600.9)
382.0
(198.5)
3,629.4

3,260.5

1,625.4

3,988.2

3,430.9

30.7

34.7

76.9

10.2

(191.0)
162.8
2.5
905.1

(177.0)
147.9
5.6
1,703.9

(432.2)
337.1
(18.2)
4,867.2

(559.0)
365.8
(183.0)
3,408.5

907.6

1,709.5

4,849.0

3,225.5

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

1.4

4.1

13.7

(182.9)
161.1
(20.4)
51.5

(155.4)
133.8
(20.2)
51.6

(358.9)
293.6
(61.2)
154.7

(679.0)
461.7
(203.6)
1,396.7

31.1

31.4

93.5

1,193.1

1.2

3.6

13.2

(171.7)
154.4
(16.1)
49.7

(145.7)
128.2
(16.3)
49.7

(301.7)
249.4
(48.7)
149.0

(567.3)
375.6
(178.5)
1,427.5

33.6

33.4

100.3

1,249.0

Notes to the
Financial Statements

For the financial year ended 31 March 2017

30.

BORROWINGS (SECURED)

Current
Finance lease
Bank loans

Non-current
Finance lease
Bank loans

Group

Company

2017
S$ Mil

2016
S$ Mil

2017
S$ Mil

2016
S$ Mil

29.4
57.3

30.7
59.5

86.7

90.2

1.5
–

1.5

1.5
–

1.5

168.8
30.8

189.9
46.1

157.2
–

158.8
–

199.6

236.0

157.2

158.8

Total secured borrowings

286.3

326.2

158.7

160.3

Secured borrowings of the Group and the Company comprise finance lease liabilities including lease liabilities in
respect of certain assets leased from NetLink Trust. In addition, the Group’s secured borrowings included certain bank
loans of Trustwave secured on the assets of Trustwave and shares in certain of its subsidiaries.

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
Later than five years

Group

Company

2017
S$ Mil

42.6
59.3
601.4
703.3

2016
S$ Mil

45.3
81.0
613.0
739.3

2017
S$ Mil

13.0
47.2
601.4
661.6

2016
S$ Mil

13.0
48.5
613.0
674.5

Less: Future finance charges

(505.1)

(518.7)

(502.9)

(514.2)

198.2

220.6

158.7

160.3

Singapore Telecommunications Limited | Annual Report 2017

204

Notes to the
Financial Statements

For the financial year ended 31 March 2017

30.2 Maturity

The maturity periods of the non-current secured borrowings at the end of the reporting period were as follows –

Between one and two years
Between two and five years
Over five years

30.3

Interest Rates

Group

Company

2017
S$ Mil

11.0
33.2
155.4

2016
S$ Mil

28.2
52.1
155.7

2017
S$ Mil

0.9
0.9
155.4

2016
S$ Mil

1.6
1.5
155.7

199.6

236.0

157.2

158.8

The weighted average effective interest rates per annum at the end of the reporting period were as follows –

Finance lease liabilities
Bank loans

Group

Company

2017
%

7.2
5.8

2016
%

5.9
6.2

2017
%

7.3
–

2016
%

7.3
–

30.4 The tables below set out the maturity profile of the secured bank loans based on expected contractual undiscounted

cash flows.

Group

As at 31 March 2017
Bank loans

As at 31 March 2016
Bank loans

31. OTHER NON-CURRENT LIABILITIES

Performance share liability
Other payables

Less than
1 year
S$ Mil

Between
1 and 2 years
S$ Mil

Between
2 and 5 years
S$ Mil

60.5

4.4

31.7

62.2

2.7

51.6

Group

Company

2017
S$ Mil

7.0
342.9

2016
S$ Mil

7.8
270.2

2017
S$ Mil

7.0
16.7

2016
S$ Mil

7.8
10.6

349.9

278.0

23.7

18.4

Other payables mainly relate to accruals of rental for certain network sites, long-term employee entitlements and
asset retirement obligations.

205

Notes to the
Financial Statements

For the financial year ended 31 March 2017

32.

SHARE CAPITAL

Group and Company

2017

2016

Number of
shares
Mil

Share
capital
S$ Mil

Number of
shares
Mil

Share
capital
S$ Mil

Balance as at 1 April
Issue of shares during the year (net of costs)

15,943.5
385.6

2,634.0
1,493.3

15,943.5
–

2,634.0
–

Balance as at 31 March

16,329.1

4,127.3

15,943.5

2,634.0

Singtel issued 385,581,351 new ordinary shares to Temasek Holdings (Private) Limited to partially finance the
acquisitions of shares in Intouch and BTL in November 2016.

All issued shares are fully paid and have no par value. The issued shares carry one vote per share and a right to
dividends as and when declared by the Company.

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 60% to
75% of underlying net profit. Underlying net profit is defined as net profit before exceptional and other one-off items.

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 Singtel performance share plans. The
Group can also cancel the shares which are repurchased from the market.

There were no changes in the Group’s approach to capital management during the financial year.

33.

DIVIDENDS

Final dividend of 10.7 cents

(2016: 10.7 cents) per share, paid

Interim dividend of 6.8 cents

(2016: 6.8 cents) per share, paid

Group

Company

2017
S$ Mil

2016
S$ Mil

2017
S$ Mil

2016
S$ Mil

1,705.5

1,705.4

1,706.0

1,705.9

1,110.0

1,083.8

1,110.4

1,084.2

2,815.5

2,789.2

2,816.4

2,790.1

Singapore Telecommunications Limited | Annual Report 2017

206

Notes to the
Financial Statements

For the financial year ended 31 March 2017

33.

DIVIDENDS (Cont’d)

During the financial year, a final one-tier tax exempt ordinary dividend of 10.7 cents per share, totalling S$1.71
billion was paid in respect of the previous financial year ended 31 March 2016, and an interim one-tier tax exempt
ordinary dividend of 6.8 cents per share totalling S$1.11 billion was paid in respect of the current financial year
ended 31 March 2017.

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 10.7 cents per share, totalling approximately
S$1.75 billion in respect of the current financial year ended 31 March 2017 for approval at the forthcoming Annual
General Meeting.

These financial statements do not reflect the above final dividend payable of approximately S$1.75 billion, which
will be accounted for in the Shareholders’ Equity as an appropriation of ‘Retained Earnings’ in the next financial year
ending 31 March 2018.

34.

FAIR VALUES OF FINANCIAL ASSETS AND LIABILITIES

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).

34.1 Financial assets and liabilities measured at fair value

Group – 2017

Financial assets
AFS investments (1) (Note 24)
- Quoted equity securities
- Unquoted investments

Level 1
S$ Mil

Level 2
S$ Mil

Level 3
S$ Mil

Total
S$ Mil

33.3
–
33.3

–
–
–

–
90.3
90.3

33.3
90.3
123.6

Derivative financial instruments (Note 25.1)

–

562.5

–

562.5

Financial liabilities
Derivative financial instruments (Note 25.1)

33.3

562.5

90.3

686.1

–

318.9

–

318.9

207

Notes to the
Financial Statements

For the financial year ended 31 March 2017

34.1 Financial assets and liabilities measured at fair value (Cont’d)

Group – 2016

Financial assets
AFS investments (1) (Note 24)
- Quoted equity securities
- Unquoted investments

Level 1
S$ Mil

Level 2
S$ Mil

Level 3
S$ Mil

Total
S$ Mil

41.5
–
41.5

–
–
–

–
42.9
42.9

41.5
42.9
84.4

Derivative financial instruments (Note 25.1)

–

640.1

–

640.1

Financial liabilities
Derivative financial instruments (Note 25.1)

Note:
(1) Excluded AFS investments stated at cost of S$69.3 million (2016: S$63.1 million).

41.5

640.1

42.9

724.5

–

340.8

–

340.8

Company – 2017

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

29.1
–
29.1

–
–
–

–
8.3
8.3

29.1
8.3
37.4

Derivative financial instruments (Note 25.1)

–

392.0

–

392.0

Financial liabilities
Derivative financial instruments (Note 25.1)

29.1

392.0

8.3

429.4

–

480.0

–

480.0

Singapore Telecommunications Limited | Annual Report 2017

208

Notes to the
Financial Statements

For the financial year ended 31 March 2017

34.1 Financial assets and liabilities measured at fair value (Cont’d)

Company – 2016

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

27.4
–
27.4

–
–
–

–
7.7
7.7

27.4
7.7
35.1

Derivative financial instruments (Note 25.1)

–

330.5

–

330.5

Financial liabilities
Derivative financial instruments (Note 25.1)

27.4

330.5

7.7

365.6

–

430.4

–

430.4

See Note 2.7 for the policies on fair value estimation of the financial assets and liabilities.

The fair values of the unquoted AFS investments included within Level 3 were estimated using the net asset values
as reported in the statements of financial position in the management accounts of the AFS investments or the use of
recent arm’s length transactions.

The following table presents the reconciliation for the unquoted AFS investments measured at fair value based on
unobservable inputs (Level 3) –

Group

Company

2017
S$ Mil

2016
S$ Mil

2017
S$ Mil

2016
S$ Mil

AFS investments - unquoted
Balance as at 1 April
Total gains/ (losses) included in ‘Fair Value Reserve’
Additions
Write-back of/ (Provision) for impairment
Disposals
Transfer from Level 3
Transfer to Level 3

42.9
15.5
20.7
1.5
(2.4)
(0.9)
13.0

100.5
(43.4)
1.9
(6.4)
(13.3)
–
3.6

Balance as at 31 March

90.3

42.9

7.7
0.6
–
–
–
–
–

8.3

9.5
(1.8)
–
–
–
–
–

7.7

209

Notes to the
Financial Statements

For the financial year ended 31 March 2017

34.2 Financial assets and liabilities not measured at fair value (but with fair value disclosed)

Carrying Value

Fair value

S$ Mil

Level 1
S$ Mil

Level 2
S$ Mil

Level 3
S$ Mil

Total
S$ Mil

As at 31 March 2017

Financial liabilities

Group
Bonds (Note 29.1)

Company
Bonds (Note 29.1)

As at 31 March 2016

Financial liabilities

Group
Bonds (Note 29.1)

Company
Bonds (Note 29.1)

8,681.4

6,722.9

2,402.9

–

9,125.8

746.2

957.0

–

957.0

8,347.6

6,100.1

2,746.3

–

8,846.4

747.2

969.0

–

969.0

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.

Except as disclosed in the above tables, the carrying values of other financial assets and liabilities approximate their
fair values.

35.

FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

35.1 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. For the financial year
ended 31 March 2017, the Risk Committee and Finance and Investment Committee (“FIC”), which are committees
of the Board, assisted the Directors in reviewing and establishing policies relating to financial risk management in
accordance with the policies and directives of the Directors.

Singapore Telecommunications Limited | Annual Report 2017

210

Notes to the
Financial Statements

For the financial year ended 31 March 2017

35.2 Foreign Exchange Risk

The foreign exchange risk of the Group arises from subsidiaries, associates and joint ventures operating in foreign
countries, mainly Australia, India, Indonesia, the Philippines, Thailand and United States of America. Additionally, the
Group’s joint venture in India, Bharti Airtel Limited, is primarily exposed to foreign exchange risks from its operations in
Sri Lanka and 15 countries across Africa. Translation risks of overseas net investments are not hedged unless approved
by the FIC.

The Group 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 FIC, 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 foreign exchange difference on non-trade balances is disclosed under Note 10.

35.3

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 2017, after taking into account the effect of interest rate swaps, approximately 70% (2016: 76%) of the
Group’s borrowings were at fixed rates of interest.

As at 31 March 2017, assuming that the market interest rate is 50 basis points higher or lower and with no change
to the other variables, the annualised interest expense on borrowings would be higher or lower by S$13.5 million
(2016: S$14.1 million).

35.4 Credit Risk

Financial assets that potentially subject the Group to concentrations of credit risk consist primarily of trade receivables,
cash and cash equivalents 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.

211

Notes to the
Financial Statements

For the financial year ended 31 March 2017

35.4 Credit Risk (Cont’d)

The Group places its cash and cash equivalents 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.

35.5 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 to ensure that the Group is able to meet the short-term
obligations of the Group as they fall due.

35.6 Market Risk

The Group has investments in quoted equity shares. The market value of these investments will fluctuate with
market conditions.

36.

SEGMENT INFORMATION

Segment information is presented based on the information reviewed by senior management for performance
measurement and resource allocation.

Singtel Group is organised by three business segments, Group Consumer, Group Enterprise and Group Digital Life.

Group Consumer comprises the consumer businesses across Singapore and Australia, as well as the Group’s
investments, mainly AIS and Intouch (which has an equity interest of 40.5% in AIS) in Thailand, Airtel in India, Africa and
Sri Lanka, Globe in the Philippines, and Telkomsel in Indonesia. It focuses on driving greater value and performance
from the core carriage business including mobile, pay TV, fixed broadband and voice, as well as equipment sales.

Group Enterprise comprises the business groups across Singapore, Australia, United States of America, Europe and
the region, and focuses on growing the Group’s position in the enterprise markets. Key services include mobile,
equipment sales, fixed voice and data, managed services, cloud computing, cyber security, IT and professional
consulting.

Group Digital Life (“GDL”) focuses on using the latest internet technologies and assets of the Group’s operating
companies to develop new revenue and growth engines by entering adjacent businesses where it has a competitive
advantage. It focuses on three key businesses in digital life – digital marketing (Amobee), regional premium over-the-
top video (HOOQ) and advanced analytics and intelligence capabilities (DataSpark), in addition to strengthening its
role as Singtel’s digital innovation engine through Innov8.

Corporate comprises the costs of Group functions not allocated to the business segments.

The measurement of segment results which is before exceptional items, is in line with the basis of information
presented to management for internal management reporting purposes.

The costs of shared and common infrastructure are allocated to the business segments using established
methodologies.

Singapore Telecommunications Limited | Annual Report 2017

212

Notes to the
Financial Statements

For the financial year ended 31 March 2017

36.

SEGMENT INFORMATION (Cont’d)

The Group’s reportable segments by the three business segments for the financial years ended 31 March 2017 and
31 March 2016 were as follows –

Group – 2017

Group
Consumer
S$ Mil

Group
Enterprise
S$ Mil

Group
Digital Life
S$ Mil

Corporate
S$ Mil

Group
Total
S$ Mil

Operating revenue

9,572.0

6,600.3

539.1

–

16,711.4

Operating expenses
Other income/ (expense)
Earnings before interest, tax, depreciation

and amortisation (“EBITDA”)

Share of pre-tax results of associates and

joint ventures

- Airtel
- Telkomsel
- Globe
- AIS
- Intouch
- Others

(6,453.3)
176.2

(4,732.0)
45.0

(652.6)
(8.7)

(91.1)
2.8

(11,929.0)
215.3

3,294.9

1,913.3

(122.2)

(88.3)

4,997.7

579.9
1,422.0
288.0
389.3
31.3
1.2
2,711.7

–
–
–
–
–
–
–

–
–
–
–
–
230.0
230.0

579.9
1,422.0
288.0
389.3
31.3
231.2
2,941.7

EBITDA and share of pre-tax results
of associates and joint ventures

6,006.6

1,913.3

(122.2)

141.7

7,939.4

Depreciation and amortisation

(1,524.4)

(644.9)

(68.1)

(1.5)

(2,238.9)

Earnings before interest and tax (“EBIT”)

4,482.2

1,268.4

(190.3)

140.2

5,700.5

Segment assets
Investment in associates and

joint ventures

- Airtel
- Telkomsel
- Globe
- AIS
- Intouch
- Others

6,847.0
3,606.2
1,085.4
646.4
1,577.2
25.2
13,787.4

–
–
–
–
–
–
–

–
–
–
–
–
447.7
447.7

6,847.0
3,606.2
1,085.4
646.4
1,577.2
472.9
14,235.1

Goodwill on acquisition of subsidiaries
Other assets

9,193.4
12,590.8

1,241.4
5,637.4

729.8
602.5

–
4,063.8

11,164.6
22,894.5

35,571.6

6,878.8

1,332.3

4,511.5

48,294.2

213

Notes to the
Financial Statements

For the financial year ended 31 March 2017

36.

SEGMENT INFORMATION (Cont’d)

Group – 2016

Group
Consumer
S$ Mil

Group
Enterprise
S$ Mil

Group
Digital Life
S$ Mil

Corporate
S$ Mil

Group
Total
S$ Mil

Operating revenue

10,110.2

6,396.9

454.1

–

16,961.2

Operating expenses
Other income/ (expense)
EBITDA

(6,969.7)
125.8
3,266.3

(4,466.6)
28.4
1,958.7

(587.7)
(3.1)
(136.7)

(72.8)
(2.8)
(75.6)

(12,096.8)
148.3
5,012.7

Share of pre-tax results of associates and

joint ventures

- Airtel
- Telkomsel
- Globe
- AIS
- Others

678.1
1,139.6
335.4
453.4
1.1
2,607.6

–
–
–
–
–
–

–
–
–
–
183.2
183.2

678.1
1,139.6
335.4
453.4
184.3
2,790.8

EBITDA and share of pre-tax results of

associates and joint ventures

5,873.9

1,958.7

(136.7)

107.6

7,803.5

Depreciation and amortisation

(1,455.4)

(621.6)

(68.8)

(3.0)

(2,148.8)

EBIT

4,418.5

1,337.1

(205.5)

104.6

5,654.7

Segment assets
Investment in associates and

joint ventures

- Airtel
- Telkomsel
- Globe
- AIS
- Others

5,478.7
3,471.0
1,079.9
605.7
24.7
10,660.0

–
–
–
–
–
–

–
–
–
–
426.2
426.2

5,478.7
3,471.0
1,079.9
605.7
450.9
11,086.2

Goodwill on acquisition of subsidiaries
Other assets

9,191.2
11,728.9

1,195.8
5,228.5

703.3
608.8

–
3,823.0

11,090.3
21,389.2

31,580.1

6,424.3

1,312.1

4,249.2

43,565.7

Singapore Telecommunications Limited | Annual Report 2017

214

Notes to the
Financial Statements

For the financial year ended 31 March 2017

36.

SEGMENT INFORMATION (Cont’d)

A reconciliation of the total reportable segments’ EBIT to the Group’s profit before tax was as follows –

EBIT

Share of exceptional items of associates and joint ventures (post-tax)
Share of tax expense of associates and joint ventures
Write-back of impairment provision on an associate
Exceptional items

Profit before interest, investment income (net) and tax

Interest and investment income (net)

Finance costs

Profit before tax

Group

2017
S$ Mil

2016
S$ Mil

5,700.5

5,654.7

(75.4)
(849.0)
–
(1.2)

4,774.9
114.8
(374.3)

67.2
(863.1)
31.7
(44.8)

4,845.7
94.7
(359.6)

4,515.4

4,580.8

The Group’s revenue from its major products and services are disclosed in Note 4.

The Group’s revenue is mainly derived from Singapore and Australia which respectively accounted for approximately
40% (2016: 40%) and 53% (2016: 55%) of the total revenue for the financial year ended 31 March 2017, with the
remaining 7% (2016: 5%) from the United States of America and other countries where the Group operates in.
The geographical information on the Group’s non-current assets is not presented as it is not used for segmental
reporting purposes.

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 2017
and 31 March 2016.

37. 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

Company

2017
S$ Mil

2016
S$ Mil

468.8
1,573.2
1,623.5

364.8
1,245.8
1,773.3

2017
S$ Mil

103.3
306.2
358.5

2016
S$ Mil

101.7
298.7
427.2

3,665.5

3,383.9

768.0

827.6

Sale and operating leaseback contracts were entered into for certain property, plant and equipment for a period of
20 years commencing on 2 March 2005 and 1 November 2010. The above commitments included the minimum
amounts payable of S$42.6 million (2016: S$41.8 million) per annum under those contracts. The operating lease
payments under such 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.

215

Notes to the
Financial Statements

For the financial year ended 31 March 2017

38.

COMMITMENTS

38.1 The commitments for capital and operating expenditures, and investments which had not been recognised in the

financial statements, excluding the commitments shown under Note 38.2, were as follows –

Authorised and contracted for

Group

Company

2017
S$ Mil

2016
S$ Mil

1,916.0

1,618.7

2017
S$ Mil

301.7

2016
S$ Mil

346.5

38.2 As at 31 March 2017, the Group’s commitments for the purchase of broadcasting programme rights were
S$936 million (2016: S$904 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.

39.

CONTINGENT LIABILITIES OF SINGTEL AND ITS SUBSIDIARIES

(a)

Guarantees

As at 31 March 2017,

(i)

(ii)

The Group and Company provided bankers’ and other guarantees, and insurance bonds of S$437.5
million and S$268.1 million (31 March 2016: S$264.4 million and S$480.3 million) respectively.

The Company provided guarantees for loans of S$1.16 billion (31 March 2016: S$740 million) drawn
down under various loan facilities entered into by Singtel Group Treasury Pte. Ltd. (“SGT”) with maturities
between May 2017 and September 2018.

(iii)

The Company provided guarantees for SGT’s notes issue of an aggregate equivalent amount of S$4.92
billion (31 March 2016: S$4.63 billion) due between September 2017 and October 2026.

(b)

In December 2013, Singapore Telecom Australia Investments Pty Limited (“STAI”) received a tax position paper
from the Australian Taxation Office (“ATO”) in connection with the acquisition financing of Optus, and on
22 October 2014, received a Statement of Audit Position. On 30 November 2015, STAI received the final
Statement of Audit Position from the ATO, and on 18 July 2016, received the findings and recommendations
of ATO’s Independent Review. On 25 October 2016, STAI received the determinations from the ATO and on
2 November 2016, received the amended assessments totalling A$326 million, comprising primary tax of
A$268 million and interest of A$58 million. STAI’s holding company, Singtel Australia Investment Ltd, would be
entitled to refund of withholding tax, estimated at A$89 million.

On 21 March 2017, STAI received further notices of assessment totalling A$67 million for penalties.

STAI has received advice from external experts in relation to the matter and has objected to the
amended assessments and will vigorously defend its position. Accordingly, no provision has been made as at
31 March 2017.

In accordance with the ATO administrative practice, STAI paid a minimum amount of 50% of the assessed
primary tax on 21 November 2016. This payment has been recognised as a receivable (see Note 16) as at
31 March 2017.

Singapore Telecommunications Limited | Annual Report 2017

216

Notes to the
Financial Statements

For the financial year ended 31 March 2017

39.

CONTINGENT LIABILITIES OF SINGTEL AND ITS SUBSIDIARIES (Cont’d)

(c)

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.

40.

SIGNIFICANT CONTINGENT LIABILITIES OF JOINT VENTURES

(a)

Airtel, a 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.

On 8 January 2013, the local regulator, Department of Telecommunications (“DOT”) issued a demand on Airtel
Group for Rs. 52.01 billion (S$1.12 billion) towards levy of one time spectrum charge. The demand included a
retrospective charge of Rs. 9.09 billion for holding GSM spectrum beyond 6.2 MHz for the period from 1 July
2008 to 31 December 2012 and also a prospective charge of Rs. 42.92 billion for GSM spectrum held beyond
4.4 MHz for the period from 1 January 2013, till the expiry of the initial terms of the respective licences.

In the opinion of Airtel, inter-alia, the above demand amounts to alteration of the terms of the licences issued
in the past. Airtel believes, based on independent legal opinion and its evaluation, that it is not probable that
any material part of the claim will be awarded against Airtel and therefore, pending outcome of this matter, no
provision has been recognised.

As at 31 March 2017, other taxes, custom duties and demands under adjudication, appeal or disputes amounted
to approximately Rs. 135 billion (S$2.91 billion). In respect of some of the tax issues, pending final decisions,
Airtel had deposited amounts with statutory authorities.

(b)

AIS, a joint venture of the Group, has various commercial disputes and significant litigations.

In 2008, TOT Public Company Limited (“TOT”) and CAT Telecom Public Company Limited (“CAT”) demanded
that AIS and its subsidiary, Digital Phone Company Limited (“DPC”) respectively pay additional revenue shares
of THB 31.5 billion (S$1.28 billion) and THB 3.4 billion (S$139 million) arising from the abolishment of excise tax.
These claims were dismissed by the lower tribunals and are now pending appeal by TOT and CAT before the
Supreme Administrative Court and Central Administrative Court respectively.

In 2015, TOT demanded that AIS pays additional revenue share of THB 62.8 billion (S$2.55 billion) arising
from what TOT claims to be an illegality of two amendments made to the Concession Agreement, namely,
Amendment 6 (regarding reduction in prepaid revenue share rate) made in 2001 and Amendment 7 (regarding
deduction of roaming expense from revenue share) made in 2002, which have resulted in lower revenue share.
This case is pending arbitration.

Between 2011 and 2016, TOT demanded that AIS pays additional revenue share based on gross interconnection
income from 2007 to 2015 amounting to THB 36.2 billion (S$1.47 billion) plus interest. The claims are
pending arbitration.

Between 2014 to 2016, TOT demanded that AIS pays THB 41.1 billion (S$1.67 billion) plus interest for the porting
of subscribers from 900MHz to 2100MHz network. This case is pending arbitration.

As at 31 March 2017, there are a number of other claims filed by third parties against AIS and its subsidiaries
amounting to THB 29.7 billion (S$1.21 billion) which are pending adjudication.

AIS believes that the above claims will be settled in favour of AIS and will have no material impact to its
financial statements.

217

Notes to the
Financial Statements

For the financial year ended 31 March 2017

40.

SIGNIFICANT CONTINGENT LIABILITIES OF JOINT VENTURES (Cont’d)

(c)

Globe, a 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 Globe
Group’s financial position and results of operations.

In June 2016, the Philippine Competition Commission (“PCC”) claimed that the Joint Notice (“Notice”) filed
by Globe, PLDT Inc. and San Miguel Corporation (“SMC”) on the acquisition of SMC’s telecommunications
business was deficient and cannot be claimed to be deemed approved. Globe responded that the Notice was
filed in accordance with the prevailing rules and regulations of the Philippine Competition Act. In July 2016,
Globe filed a petition with the Court of Appeals (“CA”) to stop the PCC from reviewing the acquisition, and in
August 2016, the PCC requested the CA to declare the acquisition to be void.

PLDT filed a similar petition to the CA and secured a temporary restraining order (“TRO”) in August 2016.
Thereafter, Globe’s petition was consolidated with that of PLDT’s and the consolidation effectively extended
the benefit of PLDT’s TRO to Globe.

In April 2017, the PCC filed a petition before the Supreme Court to lift the CA’s order that has prevented the
PCC on any review of the transaction. Globe then filed a motion before the Supreme Court to dismiss the
petition filed by the PCC.

(d)

As at 31 March 2017, Telkomsel, a joint venture of the Group, has filed appeals and cross-appeals amounting to
approximately IDR 828 billion (S$87 million) for various tax claims arising in certain tax assessments which are
pending final decisions, the outcome of which is not presently determinable.

41.

SUBSEQUENT EVENT

On 10 April 2017, Amobee, Inc. completed its acquisition of 100% of the share capital of Turn, Inc. for an aggregate
consideration of US$290 million after adjustments for working capital and net debt. Turn, Inc., a corporation organised
under the laws of Delaware, USA, is a leading provider of a global technology platform for marketers and agencies. The
purchase price allocation exercise for this acquisition will be performed in the financial year ending 31 March 2018.

42.

EFFECTS OF FRS AND INT FRS ISSUED BUT NOT YET ADOPTED

The following new or revised FRS are mandatory for adoption by the Group for financial year beginning on or after
1 April 2018:

FRS 115, Revenue from Contracts with Customers.

FRS 115 was issued in November 2014, which established a single comprehensive model of accounting for revenue
arising from contracts with customers. The standard requires companies to apportion revenue earned from contracts
to performance obligations, on a relative standalone selling price basis, based on a five-step model. It also requires
certain additional disclosures. FRS 115 will supersede the revenue recognition guidance under FRS 18, Revenue and
FRS 11, Construction Contracts as well as the related interpretations when it becomes effective. This will take effect
from financial year beginning on 1 April 2018, with retrospective application.

The key changes in the standard that impact the Group relate to the allocation of contract revenues between various
services and equipment, and the timing of revenue recognition and capitalisation of contract and customer acquisition
costs. The Group is currently in the process of assessing the impact, which is expected to be significant.

Singapore Telecommunications Limited | Annual Report 2017

218

Notes to the
Financial Statements

For the financial year ended 31 March 2017

42.

EFFECTS OF FRS AND INT FRS ISSUED BUT NOT YET ADOPTED (Cont’d)

FRS 109, Financial Instruments

FRS 109 was issued in December 2014 to replace FRS 39, Financial Instruments: Recognition and Measurement. The
standard introduced new requirements for classification and measurement of financial assets and financial liabilities,
general hedge accounting and impairment requirements for financial assets. It also requires certain additional
disclosures. This will take effect from financial year beginning on 1 April 2018, with retrospective application.

The standard is not expected to have a significant impact on the Group’s current accounting treatments or hedging
activities, other than classification of certain financial assets and financial liabilities.

FRS 116, Leases

FRS 116 was issued in June 2016 to replace FRS 17, Leases and its associated interpretative guidance and will take
effect from financial year beginning on 1 April 2019, with retrospective application.

The standard provides a comprehensive model for the identification of lease arrangements and their treatment in the
financial statements of both lessees and lessors. It retains substantially the lessor accounting approach under FRS 17,
but requires the recognition of right-of-use asset and liability for future payments for leases. The Group is still in the
process of assessing the impact of adoption of this standard.

The other new or revised FRS and INT FRS are not expected to have a significant impact on the financial statements
of the Group.

Convergence with International Financial Reporting Standards

On 29 May 2014, the Accounting Standards Council (ASC) announced that Singapore-incorporated companies listed
on the Singapore Exchange will be required to apply a new financial reporting framework identical to the International
Financial Reporting Standards (referred to as “SG-IFRS” in these financial statements). This will take effect from the
financial year beginning on 1 April 2018.

The Group has performed a preliminary assessment of the impact of SG-IFRS 1, First-time adoption of International
Financial Reporting Standards for transition to the new framework. The Group expects the impact on adoption of SG-
IFRS 15, Revenue from Contracts with Customers and SG-IFRS 9, Financial Instruments to be similar to the adoption
of FRS 115 and FRS 109 as described above.

The Group does not expect to change its existing accounting policies on adoption of the new framework, other than
that arising from the adoption of new or revised standards.

The Group is currently performing a detailed analysis of the available policy choices, transitional optional exemptions
and transitional mandatory exceptions under SG-IFRS 1.

43. 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 as well as associates and joint ventures as
at 31 March 2017 and 31 March 2016.

219

Notes to the
Financial Statements

For the financial year ended 31 March 2017

43.1 Significant subsidiaries incorporated in Singapore

10.

11.

12.

13.

14.

Name of subsidiary

Principal activities

Amobee Group Pte. Ltd.

Provision of digital marketing services

DataSpark Pte. Ltd.

Develop and market data analytics and insights
products and services

Group Enterprise Pte. Ltd.

Telecommunications resellers and third party
telecommunications providers

HOOQ Digital Pte. Ltd.

Provision of regional premium over-the-top
video services

NCS Communications
Engineering Pte. Ltd.

Provision of facilities management and
consultancy services, and distributor of
specialised telecommunications and
data communication products

NCS Pte. Ltd.

Provision of information technology and
consultancy services

NCSI Solutions Pte. Ltd.

Provision of information technology services

SCS Computer Systems
Pte. Ltd.

Provision of information technology and
consultancy services

SingNet Pte Ltd

Provision of internet access and pay television
services

Singtel Innov8 Ventures
Pte. Ltd.

Provision of fund management services

Singtel Mobile Singapore
Pte. Ltd.

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

2017
%

100

2016
%

100

ST-2 Satellite Ventures
Private Limited

Provision of satellite capacity for
telecommunications and video broadcasting
services

61.9

Sembawang Cable Depot
Pte Ltd

Provision of storage facilities for submarine
telecommunication cables and related equipment

Singtel Digital Media Pte Ltd Development and management of on-line
internet portal

15.

SingtelSat Pte Ltd

Provision of satellite capacity for
telecommunications and video broadcasting
services

100

Singapore Telecommunications Limited | Annual Report 2017

220

Notes to the
Financial Statements

For the financial year ended 31 March 2017

43.1 Significant subsidiaries incorporated in Singapore (Cont’d)

Name of subsidiary

Principal activities

16.

Telecom Equipment Pte Ltd Engaged in the sale and maintenance of

telecommunications equipment, and mobile
finance services

Percentage of effective equity
interest held by the Group

2017
%

100

2016
%

100

17.

Trustwave Pte. Ltd.

Provision of information security services
and products

All companies are audited by Deloitte & Touche LLP.

43.2 Significant subsidiaries incorporated in Australia

Percentage of effective equity
interest held by the Group

Name of subsidiary

Principal activities

Adconion Pty Limited

Provision of digital marketing services

Amobee ANZ Pty Ltd

Provision of digital marketing services

Alphawest Services Pty Ltd (1)

Provision of information technology services

Ensyst Pty Limited

Provision of cloud services

NCSI (Australia) Pty Limited

Provision of information technology services

Optus Administration Pty
Limited (1)

Provision of management services to the
Optus Group

Provision of carriage services

Optus ADSL Pty Limited
(formerly known as Optus
Backbone Investments
Pty Limited) (1)

Optus Billing Services
Pty Limited (*) (1)

Optus C1 Satellite
Pty Limited (1)

Provision of billing services to the Optus Group

100

C1 Satellite contracting party

10.

Optus Content Pty Limited (1)

Provision of digital content acquisition

11.

12.

Optus Data Centres Pty
Limited (1)

Optus Fixed Infrastructure
Pty Limited (1)

Provision of data communication services

Provision of telecommunications services

221

2017
%

100

2016
%

100

Notes to the
Financial Statements

For the financial year ended 31 March 2017

43.2 Significant subsidiaries incorporated in Australia (Cont’d)

Name of subsidiary

Principal activities

13.

Optus Insurance Services
Pty Limited

Provision of handset insurance and
related services

14.

Optus Internet Pty Limited (1)

Provision of services over Hybrid Fibre Co-Axial
network and National Broadband Network

15.

Optus Mobile Pty Limited (1)

Provision of mobile phone services

16.

Optus Networks Pty Limited (1) Provision of telecommunications services

17.

Optus Satellite Pty Limited (1)

Provision of satellite services to customers

18.

Optus Systems Pty Limited (1)

Provision of information technology services
to the Optus Group

19.

Optus Vision Media Pty
Limited (*) (2)

Provision of broadcasting related services

20.

Optus Vision Pty Limited (1)

Provision of telecommunications services

21.

22.

Optus Wholesale Pty
Limited (1)

Prepaid Services Pty
Limited (1)

Provision of services to wholesale customers

Distribution of prepaid mobile products

23.

Reef Networks Pty Ltd (1)

Operation and maintenance of fibre optic
network between Brisbane and Cairns

24.

TWH Australia Pty. Ltd.

Provision of information security services
and products

25.

26.

Uecomm Operations Pty
Limited (1)

Provision of data communication services

Virgin Mobile (Australia) Pty
Limited (1)

Provision of mobile phone services

27.

Vividwireless Group Limited (1) Provision of wireless broadband services

Percentage of effective equity
interest held by the Group

2017
%

100

2016
%

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 2016/785 (as amended) dated 30 March 2007.
(2) Optus Vision Media Pty Limited is deemed to be a subsidiary by virtue of control.

Singapore Telecommunications Limited | Annual Report 2017

222

Notes to the
Financial Statements

For the financial year ended 31 March 2017

43.3 Significant subsidiaries incorporated outside Singapore and Australia

Name of subsidiary

Principal activities

Country of
incorporation/
operation

Adconion EMEA Limited

Provision of digital marketing
services

United
Kingdom

Amobee, Inc. (2)

Provision of digital marketing
services

USA

GB21 (Hong Kong) Limited Provision of telecommunications

Hong Kong

services and products

Global Enterprise
International Malaysia
Sdn. Bhd.

Provision of data
communication and
value added network services

Malaysia

Percentage of effective equity
interest held by the Group

2017
%

100

2016
%

100

Lanka Communication
Services (Pvt) Limited

Provision of telecommunications
services

Sri Lanka

82.9

M86 Security
International, Ltd.

Provision of information security
services and products

United
Kingdom

NCS Information
Technology (Suzhou)
Co., Ltd. (3)

Software development and
provision of information
technology services

NCSI (Chengdu) Co., Ltd (3)

NCSI (HK) Limited

10.

NCSI (Malaysia) Sdn Bhd

11.

NCSI (Philippines) Inc.

12.

NCSI (Shanghai),
Co. Ltd (3)

13.

SCS Information
Technology Sdn Bhd

Provision of information
technology research and
development, and other
information technology
related services

Provision of information
technology services

Provision of information
technology and communication
engineering services

Provision of system integration,
software research and
development and other
information technology-related
services

Consultancy, sale of computer
equipment and software including
provision of marketing, maintenance
and other related services

People’s
Republic of
China

Hong Kong

Malaysia

Philippines

People’s
Republic of
China

100

Brunei

100

14.

Singtel Global
Private Limited

Provision of infotainment
products and services, and
investment holding

Mauritius

100

223

Notes to the
Financial Statements

For the financial year ended 31 March 2017

43.3 Significant subsidiaries incorporated outside Singapore and Australia (Cont’d)

Name of subsidiary

Principal activities

Country of
incorporation/
operation

15.

16.

17.

18.

19.

Singtel Global India
Private Limited

Provision of telecommunications
services and all related activities

India

Singapore Telecom
Hong Kong Limited

Provision of telecommunications
services and all related activities

Hong Kong

Singapore Telecom
Japan Co Ltd

Provision of telecommunications
services and all related activities

Japan

Singapore Telecom
Korea Limited

Provision of telecommunications
services and all related activities

South Korea

Singapore Telecom
USA, Inc.

Provision of telecommunications,
engineering and marketing services

USA

20.

Singtel (Europe) Limited

Provision of telecommunications
services and all related activities

United
Kingdom

21.

Singtel Taiwan Limited

Provision of telecommunications
services and all related activities

Taiwan

22.

STI Solutions (Shanghai)
Co., Ltd

Provision of telecommunications
services and all related activities

People’s
Republic of
China

Percentage of effective equity
interest held by the Group

2017
%

100

2016
%

100

23.

Sudong Sdn. Bhd.

Management, provision and
operations of a call centre for
telecommunications services

Malaysia

100

24.

Trustwave Canada, Inc.

Provision of information security
services and products

Canada

25.

Trustwave Government
Solutions, LLC

Provision of information security
services and products

26.

Trustwave Holdings, Inc.

Provision of information security
services and products

27.

Trustwave Holdings Limited Provision of information security

services and products

USA

United
Kingdom

28.

Trustwave
SecureConnect Inc.

Provision of information security
services and products

USA

All companies are audited by a member firm of Deloitte Touche Tohmatsu Limited.

Notes:
(1) The place of the business of the subsidiaries are the same as their country of incorporation, unless otherwise specified.
(2) The company has operations mainly in the USA, Israel, Singapore and the United Kingdom.
(3) Subsidiary’s financial year-end is 31 December.

Singapore Telecommunications Limited | Annual Report 2017

224

Notes to the
Financial Statements

For the financial year ended 31 March 2017

43.4 Associates of the Group

Name of associate

Principal activities

2359 Media Pte. Ltd.

Development and design of
mobile-based advertising

Country of
incorporation/
operation

Singapore

Percentage of effective equity
interest held by the Group

2017
%

28.6

2016
%

28.6

APT Satellite Holdings
Limited (2)

Investment holding

Bermuda

20.3

APT Satellite International
Company Limited (2)

Investment holding

British Virgin
Islands

28.6

HOPE Technik Pte Ltd

Provision of high performance
unique engineering solutions

Singapore

21.3

IGA Limited

Provision of online digital
advertising platform

Cayman
Islands

22.1

Intouch Holdings Public
Company Limited (3)

Kai Square

Investment holding

Thailand

21.0

–

Provision of next generation
cloud-based video surveillance
services, monitoring and analytics
based on a unified platform

Singapore

39.2

MassiveImpact
International Ltd

Provision of performance based
mobile advertising platform

British Virgin
Islands

48.9

NetLink Trust (4)

To own, install, operate and
maintain the passive infrastructure
for Singapore’s Next Generation
Nationwide Broadband Network

Singapore

100.0

10.

Sentilla Corporation

Provision of energy management
services for data centres

USA

31.0

23.4

11.

Singapore Post Limited (5)

12.

Viewers Choice Pte Ltd

Operation and provision of postal,
eCommerce logistics and retail
services

Provision of services relating to
motor vehicle rental and retail of
general merchandise

Singapore

21.7

22.8

Singapore

49.2

Notes:
(1) The place of business of the associates are the same as their country of incorporation.
(2) The company has been equity accounted for in the consolidated financial statements based on results ended, or as at, 31 December 2016,

the financial year-end of the company.

(3) Audited by Deloitte Touche Tohmatsu Jaiyos Audit Co. Ltd, Bangkok.
(4) Audited by Deloitte & Touche LLP, Singapore. NetLink Trust is regarded as an associate as Singtel does not have effective control in the trust.
(5) Audited by PricewaterhouseCoopers LLP, Singapore.

225

Notes to the
Financial Statements

For the financial year ended 31 March 2017

43.5 Joint ventures of the Group

Name of joint venture

Principal activities

Acasia Communications
Sdn Bhd (3)

Provision of networking services
to business customers operating
within and outside Malaysia

ACPL Marine Pte Ltd

Advanced Info Service
Public Company Limited (4) (5)

ASEAN Cableship Pte Ltd

To own, operate and manage
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

Country of
incorporation/
operation

Malaysia

Percentage of effective equity
interest held by the Group

2017
%

14.3

2016
%

14.3

Singapore

41.7

Thailand

23.3

Singapore

16.7

ASEAN Telecom Holdings
Sdn Bhd (3)

Investment holding

Malaysia

14.3

Asiacom Philippines, Inc. (3)

Investment holding

Philippines

Bharti Airtel Limited (6)

Provision of mobile, long distance,
broadband and telephony
telecommunications services,
enterprise solutions, pay television
and passive infrastructure

India

Bharti Telecom Limited (6)

Investment holding

India

Bridge Mobile Pte. Ltd.

Provision of regional
mobile services

Singapore

40.0

36.5

47.2

34.2

40.0

32.9

39.8

33.8

10.

Globe Telecom, Inc. (7) (8)

Provision of mobile, broadband,
international and fixed line
telecommunications services

Philippines

21.5

11.

12.

13.

Grid Communications
Pte. Ltd. (3)

Provision of public trunk radio
services

Singapore

50.0

Indian Ocean Cableship
Pte. Ltd.

Leasing, operating and
managing of maintenance-
cum-laying cableship

Singapore

50.0

International Cableship
Pte Ltd

Ownership and chartering of
cableships

Singapore

45.0

Singapore Telecommunications Limited | Annual Report 2017

226

Notes to the
Financial Statements

For the financial year ended 31 March 2017

43.5 Joint ventures of the Group (Cont’d)

Name of joint venture

Principal activities

Main Event Television
Pty Limited

Provision of cable television
programmes

Pacific Bangladesh
Telecom Limited

Pacific Carriage Holdings
Limited (9)

Provision of mobile
telecommunications, broadband
and data transmission services

Operation and provision of
telecommunications facilities and
services utilising a network of
submarine cable systems

PT Telekomunikasi
Selular (10)

Provision of mobile
telecommunications and
related services

Country of
incorporation/
operation

Australia

Percentage of effective equity
interest held by the Group

2017
%

33.3

2016
%

33.3

Bangladesh

45.0

Bermuda

39.99

Indonesia

35.0

Radiance Communications
Pte Ltd (3)

Sale, distribution, installation
and maintenance of
telecommunications equipment

Singapore

50.0

14.

15.

16.

17.

18.

19.

Southern Cross Cables
Holdings Limited (9) (11)

20.

Telescience Singapore
Pte Ltd

Operation and provision of
telecommunications facilities and
services utilising a network of
submarine cable systems

Sale, distribution and installation
of telecommunications and
information technology equipment
and services

Bermuda

39.99

Singapore

50.0

21.

VA Dynamics Sdn. Bhd. (3)

Distribution of networking cables
and related products

Malaysia

49.0

Notes:
(1) The place of business of the joint ventures are the same as their country of incorporation, unless otherwise specified.
(2) The Group holds substantive participating rights over the significant financial and operating decisions of the above joint ventures, which enables

the Group to exercise joint control with the other shareholders.

(3) The company has been equity accounted for in the consolidated financial statements based on the results ended, or as at, 31 December 2016, the

financial year-end of the company.

(4) Audited by Deloitte Touche Tohmatsu Jaiyos Audit Co. Ltd, Bangkok.
(5) This represents the Group’s direct interest in AIS.
(6) Audited by S.R.Batliboi & Associates, New Delhi (a member firm of Ernst & Young). The company has operations in India, Sri Lanka, and 15 countries

across Africa.

(7) Audited by Navarro Amper & Co. (a member firm of Deloitte Touche Tohmatsu Limited).
(8) The Group has a 47.1% effective economic interest in Globe.
(9) The Southern Cross Cable Consortium operates through two separate companies. Southern Cross Cables Holdings Limited owns a cable network

between Australia and the USA, with operations outside the USA. Pacific Carriage Holdings Limited has operations within the USA.

(10) Audited by Purwantono, Sungkoro & Surja (a member firm of Ernst & Young).
(11) Audited by KPMG, Bermuda.

227

Interested Person
Transactions

The aggregate value of all interested person transactions during the financial year ended 31 March 2017 (excluding
transactions less than S$100,000) were as follows -

Name of interested person

Advanced Info Service Public Company Limited
Aetos Security Management Pte Ltd
Aspen Holdings Limited (Note 1)
AusNet Electricity Services Pty Ltd
Bharti Telecom Limited
Business Leadership Centre Pte. Ltd.
Certis CISCO Security Pte Ltd
Fullerton Fund Management Company Ltd
Grid Communications Pte. Ltd.
MacRitchie Investments Pte. Ltd. (Note 1)
Mapletree Investments Pte Ltd
Mediacorp Pte Ltd
Mediacorp VizPro International Pte Ltd
Nucleus Connect Pte. Ltd.
Radiance Communications Pte Ltd
Singapore Technologies Aerospace Ltd
Singapore Technologies Electronics Limited
SMM Pte Ltd
SMRT Services Pte. Ltd.
SP Services Limited
ST Electronics (e-Services ) Pte Ltd
ST Electronics (Info-Security) Pte Ltd
StarHub Cable Vision Ltd
StarHub Ltd
StarHub Mobile Pte Ltd
Temasek Management Services Pte Ltd
Tembusu Capital Pte. Ltd./ Atrium Investments Pte. Ltd. (Note 1)
Trusted Source Pte. Ltd.
VT iDirect, Inc.

S$ Mil

5.4
3.1
1,585.1
1.0
0.7
0.1
0.2
0.3
1.8
884.4
0.3
0.4
0.4
4.5
0.5
0.8
5.4
2.0
0.3
7.6
0.7
0.3
29.8
15.8
3.4
0.3
1,605.1
0.1
0.2

4,160.0

Note 1:
On 18 August 2016, (i) Singtel Global Investment Pte. Ltd. which is a wholly owned subsidiary of Singtel, entered into a
conditional sale and purchase agreement with Aspen Holdings Limited (“Aspen”) to acquire approximately 21% of the issued
and paid-up shares of Intouch Holdings Public Company Limited for S$1,585.1 million; and (ii) Magenta Investments Limited,
which is a wholly-owned subsidiary of Singtel, entered into a conditional sale and purchase agreement with MacRitchie
Investments Pte. Ltd. (“MacRitchie”) to acquire approximately 7.39% of equity shares in the issued share capital of Bharti
Telecom Limited for S$884.4 million. The acquisitions were partially funded through proceeds from a share placement
of 385,581,351 new ordinary shares of Singtel to Atrium Investments Pte. Ltd. (“Atrium”), which is a nominee of Tembusu
Capital Pte. Ltd. (“Tembusu”) for S$1,605.1 million. Aspen, MacRitchie, Atrium and Tembusu are wholly-owned subsidiaries
of Temasek Holdings (Private) Limited.

The abovementioned transactions have been approved by the shareholders of Singtel at the Extraordinary General Meeting
held on 14 October 2016. The necessary regulatory approvals have been obtained and the transactions were completed
in November 2016.

Singapore Telecommunications Limited | Annual Report 2017

228

Shareholder
Information

As at 29 May 2017

ORDINARY SHARES

Number of ordinary shareholders

307,992

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 or subsidiary holdings (1))

Note:
(1)

“Subsidiary holdings” is defined in the Listing Manual to mean shares referred to in Sections 21(4), 21(4B), 21(6A) and 21(6C) of the Companies Act,
Chapter 50 of Singapore.

SUBSTANTIAL SHAREHOLDERS

No. of shares

Direct
interest

Deemed
interest

Temasek Holdings (Private) Limited

8,132,818,602

411,135,736 (1)

Note:
(1) Deemed through interests of subsidiaries and associated companies.

MAJOR SHAREHOLDERS LIST – TOP 20

No.

Name

Temasek Holdings (Private) Limited
Citibank Nominees Singapore Pte Ltd
DBS Nominees (Private) Limited
DBSN Services Pte Ltd
Central Provident Fund Board
HSBC (Singapore) Nominees Pte Ltd
Atrium Investments Pte Ltd
United Overseas Bank Nominees (Private) Limited
BNP Paribas Securities Services
Raffles Nominees (Pte) Ltd
DB Nominees (Singapore) Pte Ltd

1
2
3
4
5
6
7
8
9
10
11
12 Morgan Stanley Asia (Singapore) Securities Pte Ltd
13 OCBC Nominees Singapore Private Limited
14
Societe Generale Singapore Branch
15 Merrill Lynch (Singapore) Pte Ltd
16 OCBC Securities Private Ltd
Phillip Securities Pte Ltd
17
18 Chua Sock Koong
19 CIMB Securities (Singapore) Pte Ltd
20 Macquarie Capital Securities (Singapore) Pte Limited

No. of
shares held

% of issued
share capital (1)

8,132,818,602
1,864,090,740
1,721,860,220 (2)
1,270,296,023
856,268,488
660,626,719
385,581,351
280,613,696
174,336,426
141,132,891
65,626,118
20,371,734
19,312,470
19,059,435
18,035,718
12,130,548
7,691,271
6,344,816
6,284,493
6,251,053
15,668,732,812

49.81
11.42
10.54
7.78
5.24
4.05
2.36
1.72
1.07
0.86
0.40
0.12
0.12
0.12
0.11
0.07
0.05
0.04
0.04
0.04
95.96

Notes:
(1) The percentage of issued ordinary shares is calculated based on the number of issued ordinary shares of the Company as at 29 May 2017, excluding 645,550

ordinary shares held as treasury shares as at that date.

(2) Excludes 645,550 ordinary shares held by DBS Nominees (Private) Limited as treasury shares for the account of the Company.

229

Shareholder
Information

As at 29 May 2017

ANALYSIS OF SHAREHOLDERS

Range of holdings

1 - 99
100 - 1,000
1,001 - 10,000
10,001 - 1,000,000
1,000,001 and above

No. of
holders

% of
holders

No. of
shares

% of issued
share capital

2,815
241,887
54,012
9,227
51
307,992

0.91
78.54
17.54
2.99
0.02
100.00

112,508
59,099,267
181,587,346
343,134,748
15,745,224,431
16,329,158,300

0.00
0.36
1.11
2.10
96.43
100.00

Note:
As at 29 May 2017, the Company had 645,550 treasury shares and no subsidiary holdings. Based on information available to the Company as at 29 May 2017,
approximately 48% 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 29 May 2017, excluding 645,550 ordinary shares held as treasury shares as at that date. The percentage of such treasury
shares against the total number of issued ordinary shares (excluding ordinary shares held as treasury shares) is 0.004%.

SHARE PURCHASE MANDATE

At the 24th Annual General Meeting of the Company held on 29 July 2016 (2016 AGM), the shareholders approved the
renewal of a mandate to enable the Company to purchase or otherwise acquire not more than 5% of the issued ordinary
share capital of the Company as at the date of the 2016 AGM. As at 29 May 2017, there is no current on market buy-back of
shares pursuant to the mandate.

Singapore Telecommunications Limited | Annual Report 2017

230

Corporate Information

(1)

BOARD OF DIRECTORS

TECHNOLOGY ADVISORY PANEL

AUDITOR

Simon Israel (Chairman)
Bobby Chin
Chua Sock Koong (Group CEO)
Venkataraman (Venky) Ganesan
Low Check Kian
Peter Mason AM (2)
Christina Ong
Peter Ong
Teo Swee Lian

AUDIT COMMITTEE

Bobby Chin (Chairman)
Christina Ong
Peter Ong
Teo Swee Lian

CORPORATE GOVERNANCE AND
NOMINATIONS COMMITTEE

Low Check Kian (Chairman)
Simon Israel
Christina Ong

EXECUTIVE RESOURCE AND
COMPENSATION COMMITTEE

Peter Mason AM (2) (Chairman)
Simon Israel
Teo Swee Lian

FINANCE AND INVESTMENT
COMMITTEE

Simon Israel (Chairman)
Venky Ganesan
Low Check Kian

RISK COMMITTEE

Teo Swee Lian (Chairman)
Bobby Chin
Peter Ong

OPTUS ADVISORY COMMITTEE

Peter Mason AM (2) (Chairman)
Chua Sock Koong
David Gonski AC (3)
Simon Israel
John Morschel
Paul O’Sullivan

231

Deloitte & Touche LLP
(appointed on 28 July 2006)
6 Shenton Way
OUE Downtown 2
#33-00
Singapore 068809
Republic of Singapore
Tel: +65 6224 8288
Fax: +65 6538 6166

Audit Partner: Philip Yuen Ewe Jin

INVESTOR RELATIONS

31 Exeter Road
#19-00 Comcentre
Singapore 239732
Republic of Singapore
Tel: +65 6838 2123
Email: investor@singtel.com

Koh Boon Hwee (Chairman)
Venky Ganesan
Douglas Haynes
Lim Chuan Poh
Jonathan Miller
Erez Ofer

Note:
The composition of the Technology Advisory
Panel is as at 31 March 2017.

ASSISTANT COMPANY SECRETARY

Lim Li Ching

REGISTERED OFFICE

31 Exeter Road
Comcentre
Singapore 239732
Republic of Singapore
Tel: +65 6838 3388
Fax: +65 6732 8428
Website: www.singtel.com

SHARE REGISTRAR

M & C Services Private Limited
112 Robinson Road
#05-01
Singapore 068902
Republic of Singapore
Tel: +65 6228 0544
Fax: +65 6225 1452
Email: annualreports@mncsingapore.com
Website: www.mncsingapore.com

SINGTEL AMERICAN
DEPOSITARY RECEIPTS

Citibank Shareholder Services
PO Box 43077
Providence, Rhode Island 02940-3077
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

Notes:
(1) The information in this section is as at

29 May 2017.

(2) Member of the Order of Australia.
(3) Companion of the Order of Australia.

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 6, 108 North Terrace
Adelaide, SA 5000, Australia
Tel: +61 87328 5114
Fax: +61 1800 500 261

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
Dhaka 1212, Bangladesh
Tel: +880 2 883 5120
Fax: +880 2 988 0037
Email: SGOBLDSH@singtel.com

CHINA

Beijing
Unit 1503, Beijing Silver Tower 2
Dongsanhuanbei Road
Chaoyang District, Beijing 100027
People’s Republic of China
Tel: +86 10 6410 6193 / 4 / 5
Fax: +86 10 6410 6196
Email: singtel-beij@singtel.com

Guangzhou
Room 3615, 36F, BLK B, China Shine
No.9, Lin He Xi Road
Tian He District, Guangzhou 510610
People’s Republic of China
Tel: +86 20 3886 3887
Fax: +86 20 3882 5545

Shanghai
Unit 707, 7F, KIC Plaza No 333
Song Hu 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

HONG KONG

Quarry Bay
21/F, 1063 King’s Road
Quarry Bay, Hong Kong
Tel: +852 2877 1500
Fax: +852 2802 1500
Email: singtel-hk@singtel.com

INDIA

Bangalore
Suite No.304 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 600034, India
Tel: +91 44 4264 9410
Fax: +91 44 4264 9414
Email: singtel-ind@singtel.com

Hyderabad
Reliance Business Centre
303 Swapna Lok Complex
92 Sarojini Devi Road
Secunderabad 500003, India
Tel: +91 40 2781 2699
Fax: +91 40 2781 2724
Email: singtel-ind@singtel.com

Singapore Telecommunications Limited | Annual Report 2017

232

Contact Points

Mumbai
301-303, 3rd Floor, Midas
Sahar Plaza Complex
Mathuradas Vasanji Road,
Andheri East
Mumbai 400059, 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

INDONESIA

Jakarta
Noble House, 9th Floor
Jl. Dr. Ide Anak Agung Gde Agung
Kav. E 4.2 No. 2
Jakarta 12950, Indonesia
Tel: +62 21 2978 3058
Email: singtel-ina@singtel.com

JAPAN

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

Osaka
3F Shin-Osaka Hankyu Building
1-1-1 Miyahara
Yodogawa-ku
Osaka 532-0003, Japan
Tel: +81 6 7668 8417
Email: singtel-jpn@singtel.com

KOREA

THAILAND

Seoul
06236, 11 Flr, Capital Tower
142, Teheran-ro, Kangnam-gu
Seoul, Korea
Tel: 82 2 3287 7575
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 Building #1
#1 Floor, #110
P O Box 502430
Dubai, United Arab Emirates
Tel: +971 4363 6705
Fax: +971 4361 1063
Email: g-singtel-me@singtel.com

PHILIPPINES

Manila
Unit 1504, Liberty Center
104 H V de la Costa Street
Salcedo Village, Makati City 1227
Philippines
Tel: +63 2 887 2791
Fax: + 63 2 887 2763
Email: singtel-phil@singtel.com

TAIWAN

Taipei
2F, No 290, Section 4
Chung Hsiao East Road, Taipei
Taiwan, Republic of China
Tel: +886 2 2741 1688
Fax: +886 2 2778 6083
Email: singtel-twn@singtel.com

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: sophida@singtel.com

USA

San Francisco (Head Office)
950 Tower Lane
Suite 2050
Foster City, CA 94404, USA
Tel: +1 650 508 6800
Fax: +1 650 508 1578
Email: singtel-usa@singtel.com

Chicago
8770 West Bryn Mawr Avenue
Suite 1314
Chicago, IL 60631, USA
Tel: +1 773 867 8122
Fax: +1 773 867 8121
Email: singtel-usa@singtel.com

New York
140 Broadway
Suite 2110
New York, NY 10015, USA
Tel: +1 212 269 7920
Fax: +1 212 269 7939
Email: singtel-usa@singtel.com

VIETNAM

Hanoi
Suite 704, CMC Tower 7th Floor
Duy Tan Street
Dich Vong Hau Ward
Cau Giay District
Hanoi City, Vietnam
Tel: +84 4 3943 2161
Fax: +84 4 3943 2163
Email: singtel-vn@singtel.com

233

SINGAPORE
TELECOMMUNICATIONS
LIMITED

31 Exeter Road
Comcentre
Singapore 239732
Republic of Singapore

+65 6838 3388
+65 6732 8428
www.singtel.com

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