Professional Documents
Culture Documents
INNOVATION CATALYST
T E L E C H O I C E I N T E R N AT I O N A L L I M I T E D
ANNUAL REPORT 2009
TeleChoice International Limited
5 Clementi Loop Level 2M
Singapore 129816
www.telechoice.com.sg
Tel : 65 6849 4000
Fax : 65 6849 4012
Company Registration No. 199802072R
CORPORATE PROFILE
TeleChoice International Limited (“TeleChoice”) is a regional diversified provider and enabler
of innovative communications. Incorporated in Singapore on 28 April 1998 and listed on the
Main-Board of the Singapore Exchange Securities Trading Limited (“SGX-ST”) on 25 June
2004, TeleChoice is a subsidiary of leading info-communications group, Singapore Technologies
Telemedia Pte Ltd, which operates in the Asia-Pacific, the Americas and Europe.
TeleChoice’s three business divisions collectively offer a comprehensive suite of services and
solutions for the telecommunications industry:
Personal Communications and is the first and only StarHub Services. These services are branded
Solutions Services Exclusive Partner to manage two and marketed under the recognised
full-fledge StarHub Platinum Shops at “SunPage” suite of call services
This division provides distribution, IMM shopping mall and Sembawang and solutions, including the popular
fulfilment and supply chain MRT station. “SunPage iDD 1521” which reaches
management services relating to over 300 destinations and the pre-
mobile handsets and accessories. Telecommunications paid “SunPage International Calling
It is a distributor for major principals Services Card”, distributed at retail locations
such as Nokia, Samsung, Sony throughout Singapore.
Ericsson, LG and Motorola with a This division operates under
distribution network which comprises wholly-owned subsidiary, Nexwave Network Engineering
authorised dealers, local retailers and Telecoms Pte. Ltd. (“Nexwave Services
convenience chain stores such as Telecoms”) (formerly known as
7-Eleven, NTUC and Cheers. It is a ST SunPage Pte Ltd). Nexwave This division, through wholly-owned
distributor of StarHub prepaid cards Telecoms provides next generation subsidiary, Nexwave Technologies
and the master distributor in sixteen communications and application Pte Ltd, is a regional value-add
countries for VERTIX advanced solutions. An integrated provider product aggregator and total
consumer electronic products. In of hosted IP telephony and cloud solutions provider to mobile and
addition to distribution, it offers the computing applications, it offers a fixed network operators, equipment
entire spectrum of fulfilment and suite of Unified Communications as- vendors and service providers in the
supply chain management services, a-Service (“UCaaS”) and Software- Asia-Pacific. Its network engineering
including forecasting, purchasing, as-a-Service solutions (“SaaS”) solutions and services encompass
financing, logistics, warehousing with next generation platform and radio network planning and
and inventory support to roadshow on-premises solutions supported optimisation, transmission network
management, retail customer- by leading technology partners planning, network implementation,
premises equipment (“CPE”) such as Avaya, Aruba, Aastra, HP, testing and commissioning, indoor
stocks management, and after Google and Microsoft. Aside from coverage design and implementation,
sales service. As a handsets and its enterprise-focused solutions, it network benchmarking and audit,
accessories retailer, its subsidiary, is a leading voice and data services operations, maintenance and project
Planet Telecoms, owns and operates provider offering a full range of IDD, management.
a network of stores in strategic Roaming and Callback services,
locations in Singapore. It also Conferencing solutions, SMS For more information, please visit
manages concept stores for LG, Messaging and Paging, Location our website www.telechoice.com.sg
Nokia, Samsung and Sony Ericsson Tracking and Mobile Data Network
CONTENTS
01 Financial Highlights 08 Executive Management 13 Corporate Information
02 Letter to Shareholders 10 Operations Review 14 Corporate Governance
04 Board of Directors 12 Planet Telecoms Touch-points 22 Financial Contents
FINANCIAL HIGHLIGHTS
15.4
fy2009
41.0
40.8
fy2008
21.7
354.0
patmi 10.5 1.4 2.3 14.2
fy2008
pbt 12.9 2.2 3.1 18.2
345.2
23.8
51.4
fy2007 420.4
29.9
34.4
fy2006 459.8
pbt 11.3 4.3 2.2 17.8
44.2
27.1
fy2005 569.9
fy2006
pbt 11.6 8.3 2.4 22.3
14.53 15.36
14.30
12.32 12.55
fy2005 fy2006 fy2007 fy2008 fy2009 fy2005 fy2006 fy2007 fy2008 fy2009
Shareholders’ Equity, net of Net Assets Value
PATMI Dividend declared Minority Interest (S$ million) per ordinary share (cents)
fy2009 25.0 29.2 46.6 3.8 104.6 Cash and cash equivalents
Non-current assets
Outstanding Achievement Award. This reinforces our Network Engineering Services will also likely see
position as a fully integrated provider of next generation an increase in activities and will continue to expand
communications and applications solutions. regionally. After a year of CAPEX tightening, regional
telecommunications operators will resume their
For the consumer market, we continue to provide
investments in network rollout, upgrading and capacity
innovative services under our well-known “SunPage”
enhancement initiatives.
brand. Our latest consumer offering, “Voiz Unlimited”,
is an industry-first. It is a cost-savings, buffet-style Overall, the Group plans to invest in local and regional
service which offers consumers a low subscription-based opportunities while continuing to expand our product
service to make calls to over 30 selected countries with and service offerings. We will also invest in productivity
unlimited usage. enhancements for our operations.
Network Engineering Services was adversely
Commitment to Shareholders
affected during the financial downturn as regional
telecommunications operators tightened their CAPEX In balancing the needs of investing for future growth
spending. Nonetheless, the division continued its and rewarding shareholders immediately, the Board is
concerted regional expansion effort and secured pleased to recommend a final dividend of 1.75 cents
breakthrough orders from Malaysia and Vietnam. It per ordinary share (one-tier tax exempt) for FY2009. The
expanded its suite of products as it evolved from a proposed dividend, if approved at the Company’s Annual
largely engineering services provider to a regional value- General Meeting to be held on 28 April 2010, will be paid
add product aggregator and total solutions provider. on 20 May 2010.
Bertie Cheng Past directorships in listed companies on auditing, taxation, liquidation and
Chairman and Independent Director and major appointments corporate restructuring matters. He is
First appointed on 6 May 2004 (from 1 January 2007 to 31 December also a director of Lereno Bio-Chem Ltd,
Last re-appointed on 28 April 2009 2009) serving as Chairman of its Nominating
• ST Teleport Pte Ltd Committee and member of its Audit
Mr Cheng is the Chairman of the Board. • Mobile Solutions and Payment Committee. He has also held directorships
He is also the Chairman of the Executive Services Pte Ltd in various public companies between
Committee and the Remuneration • SHC Capital Ltd 1975 and 2000, including Singapore
Committee. • Grand Pacific Properties Limited Land Limited, L&M Investments Limited
• Singapore Petroleum Company and Pan Pacific Public Company Limited.
Mr Cheng retired as Chief Executive Limited During his appointment by these
Officer of POSBank in July 1997. He companies, Mr Yap was a member of
holds and has held directorships in both Yap Boh Pin their executive committee and/or audit
listed and unlisted companies. Currently, committee, assisting in the evaluation
Independent Director
he is a director of Hong Leong Finance and recommendation of changes to their
Appointed on 6 May 2004
Limited, Singapore Petroleum Company system of internal controls as well as
Last re-elected on 28 April 2009
Ltd, Pacific Andes (Holdings) Limited, corporate governance.
Thomson Medical Centre Limited, Mr Yap is the Chairman of the Audit
CFM Holdings Limited, and Westech In March 2007, Mr Yap was appointed
Committee, and is a member of the
Electronics Limited. He is also the Non- as director of Asia Mobile Holdings Pte.
Nominating Committee.
Executive Chairman of Tee International Ltd., a private limited company which is
Limited. a subsidiary of Singapore Technologies
He is currently Managing Director
Telemedia Pte Ltd. It has investments in
of B.P.Y. Private Limited, a firm of
Mr Cheng holds a Bachelor of Arts StarHub Ltd and Shenington Investments
management consultants which provides
Degree in Economics (Honours) from Pte Ltd.
financial planning, financial accounting,
the University of Malaya in Singapore. He reviewing internal control systems as
received the Public Administration Medal Beyond the corporate sector, Mr Yap
well as corporate secretarial services.
(Silver) in 1984 and the Public Service is actively involved in various non-
Between July 1975 and January 1999,
Medal in 2001. He also received the profit, educational and social welfare
Mr Yap was a senior partner at Yap
Friend of Labour Award from the National organisations. He is a member of the
Boh Pin & Co which provided advice
Trade Union Congress (NTUC) in 2008.
Left to right: Yap Boh Pin, Yen Se-Hua Stewart, Bertie Cheng,
Tang Yew Kay Jackson, Lim Chai Hock Clive, Kwek Buck Chye
Not in photograph: Lee Theng Kiat, Sio Tat Hiang
Board of Governors of the Singapore Yen Se-Hua Stewart engineering, residential and commercial
Hokkien Huay Kuan. At end January 2008, Independent Director building projects.
Mr Yap was appointed a Director of ACS Appointed on 6 May 2004
(International). He is also a member of Last re-elected on 28 April 2007 Mr Yen is currently also an independent
the Board of Trustees of the Chinese director and member of the Audit
Development Assistance Council, as well Mr Yen is the Chairman of the Nominating Committee and Chairman of Remuneration
as, a member of its Volunteers & Social Committee, and serves as a member of Committee of Hersing Corporation
Service Committee and Audit Committee. the Remuneration Committee and the Ltd, a company listed in Singapore.
In July 2009, Mr Yap was appointed Executive Committee. Mr Yen obtained a Bachelor Degree in
member of the Board of Directors and Engineering from McMaster University
Chairman of Finance Committee of Mr Yen is currently the Chief Executive in 1972 and also holds a Diploma in
Singapore Heart Foundation. Officer of SECOM (Singapore) Pte Ltd, Financial Management from New York
a provider of security services. Mr Yen University.
Mr Yap qualified as a Chartered has held senior management positions
Accountant from the Institute of in industries such as defence marketing, Past directorships in listed companies
Chartered Accountants in England and construction and development, security, and major appointments
Wales in 1966. He is a Fellow member hospitality and aviation services. (from 1 January 2007 to 31 December
of both the Institute of Certified Public 2009)
Accountants of Singapore, and the Mr Yen began his career with the • Norfolk Development Group (Norfolk
Institute of Chartered Accountants in Singapore Ministry of Defence as a Hotel) Ltd
England and Wales. systems engineer. Mr Yen later joined • Norfolk Hotel Joint Venture Company
Chartered Industries of Singapore Pte Limited
Past directorships in listed companies Ltd, where he was part of the team • Semhotel Management Pte Ltd
and major appointments that established CDC-Construction and • Bintan Resort Management Pte Ltd
(from 1 January 2007 to 31 December Development Pte Ltd (now known as • Regional Hotel Pte Ltd
2009) Sembawang Engineers & Constructors • Ventura Development (Myanmar) Pte
• Nil Pte Ltd), a leading design-and- Ltd
build contractor in Singapore for civil • Aetos Security Management Pte Ltd
• Aetos Security Consultants Pte Ltd
Tang Yew Kay Jackson Lee Theng Kiat Under his leadership, Singapore
Independent Director Non-Executive Director Technologies Telemedia Pte Ltd has
Appointed on 1 November 2006 Appointed on 28 April 1998 evolved into a leading information-
Last re-elected on 28 April 2007 Last re-elected on 28 April 2008 communications company, with
operations and investments in Asia-
Mr Tang is a member of the Audit Mr Lee serves as a member of the Pacific, the Americas and Europe.
Committee. Executive Committee, Remuneration Currently, Singapore Technologies
Committee and Nominating Committee. Telemedia Pte Ltd’s business focus is
After three years in the Singapore in two distinct sectors, namely, wireless
Government Administrative Service, Mr Mr Lee is currently the President and and internet protocol. The Singapore
Tang spent the next 28 years in the Chief Executive Officer of Singapore Technologies Telemedia Pte Ltd group
banking and financial services industry Technologies Telemedia Pte Ltd where of companies, which include, Global
and held senior management positions he is responsible for steering the Crossing Limited and StarHub Ltd, offer
at Continental Illinois National Bank, N.M. strategic growth and development as a wide range of communications and
Rothschild & Sons (Singapore) Ltd, ST well as investments of the Singapore information services including fixed
Capital Limited and Vertex Management Technologies Telemedia Pte Ltd group and mobile communications, internet
(UK) Limited. He retired from full-time of companies. exchange and data communications,
employment in January 2005. satellite, broadband and pay television.
Mr Lee joined the Singapore Technologies
Mr Tang has held directorships in various group of companies in 1985 and held Mr Lee began his career as an officer
companies, including SGX-Main-Board senior positions overseeing legal and with the Singapore Legal Service where
listed Singapore Food Industries Limited, strategic business development. In he served for more than eight years.
where he served as a member of the 1994, recognising the potential in the He obtained a Bachelor of Laws Degree
Audit Committee. telecommunications sector, Mr Lee from the then University of Singapore
spearheaded the creation of Singapore in 1976.
Mr Tang graduated with a Bachelor of Technologies Telemedia Pte Ltd as a
Social Sciences (Economics) (Honours) new business area for the Singapore Past directorships in listed companies
(1970), and obtained a post-graduate Technologies group. Since then, and major appointments
Diploma in Business Administration he has led the company’s growth (from 1 January 2007 to 31 December
(1975), from the then University of through overseeing their investments 2009)
Singapore. in and managing infocommunications • PT Indosat Tbk
businesses.
Past directorships in listed companies
and major appointments
(from 1 January 2007 to 31 December
2009)
• Nil
Sio Tat Hiang Lim Chai Hock Clive Kwek Buck Chye
Non-Executive Director Non-Executive Director Alternate Director to Lee Theng Kiat
Appointed on 6 May 2004 Appointed on 29 September 1999 Appointed on 7 May 2004
Last re-elected on 28 April 2008 Last re-elected on 28 April 2009
Mr Kwek, who serves as an alternate
Mr Sio serves as a member of the Audit Mr Lim serves as a member of the director to Mr Lee Theng Kiat, has over
Committee. Executive Committee. 30 years of financial experience. He
joined the Singapore Technologies group
Mr Sio has over 20 years of financial Mr Lim is credited with having in 1992. He has served as Chief Financial
and management experience, and is successfully spearheaded the strategic Officer in various major operating units
currently the Executive Vice-President development and growth of the Group within the group including Chartered
of Singapore Technologies Telemedia since its inception in 1998 into a regional Semiconductor Manufacturing Ltd, ST
Pte Ltd, a position he has held since diversified provider and enabler of Assembly Test Services Ltd (now known
November 1995. innovative communications today. as STATS ChipPAC Ltd.), Vickers Capital
Limited and Singapore Technologies
In 1991, Mr Sio joined Singapore Following his retirement as Group Telemedia Pte Ltd.
Technologies Holdings Pte Ltd as President in November 2006, Mr Lim
Vice-President of Corporate Finance, continues to contribute his extensive Prior to joining the Singapore
overseeing the treasury and investment industry experience and expertise to the Technologies group, Mr Kwek spent 10
management functions of the Singapore Group, as a Non-Executive Director and a years at United Technologies Carrier Asia
Technologies group of companies. member of the Executive Committee. Pacific Operation where he assumed
Between 1993 and 1997, Mr Sio held various regional responsibilities in
the position of Director of Strategic Mr Lim, who oversaw the strategic planning, business development and joint
Investment and Group Treasurer and development and management of our venture start-ups. Mr Kwek is currently
was part of the team which formed Group as President, has over 13 years the Chief Financial Officer of StarHub Ltd,
Singapore Technologies Telemedia Pte of experience in the telecommunications a position he has held since September
Ltd as the telecommunications branch of industry, including establishing Cellstar 2002.
the Singapore Technologies group. Pacific Pte Ltd. Prior to undertaking his
appointment as our Group President in Mr Kwek obtained a Bachelor Degree in
Mr Sio obtained a Bachelor Degree January 2004, he held the position of Accountancy from the then University
in Business Administration from the Managing Director from March 1999 of Singapore in 1975. He also attended
then University of Singapore in 1970, to December 2003 where he was the Advanced Management Program
and attended the Senior Management responsible for the Group’s distribution at Harvard Business School in 1997.
Programme at the London Business business. Mr Kwek is a member of the Institute
School. of Certified Public Accountants of
Mr Lim is currently the Managing Director Singapore.
Past directorships in listed companies of Leap International Pte Ltd, a private
and major appointments investment holding company. Mr Lim Past directorships in listed companies
(from 1 January 2007 to 31 December holds an MBA from the Asian Institute and major appointments
2009) of Management, Manila, and a Master (from 1 January 2007 to 31 December
• PT Indosat Tbk of Arts (Christian Studies) from Regent 2009)
College, Vancouver. • Nil
Mr Loh joined TeleChoice in November Mr Ng joined TeleChoice in March 2008. He Mr Lee joined TeleChoice in December
2005 as Senior Vice-President of Personal is responsible for the overall management 2006, assuming responsibility for the
Communications Solutions Services of the Telecommunications Services overall growth and strategic direction
(then known as Distribution Services) business unit, including setting strategy, of the Network Engineering Services
and was appointed as Group President identifying new market opportunities division.
in December 2006. He is responsible for and developing new telecommunications
the overall management and growth of products and services. He has more than 20 years of senior
TeleChoice. business and operational experience
Mr Ng has a very broad Information and in the IT and telecommunications
Prior to joining the Group, Mr Loh was Communication Technology background industry, having worked with Singapore
Senior Vice-President, International having spent over 22 years working for Technologies Telemedia Pte Ltd,
Operations of Singapore Technologies AT&T, Gartner and other leading high-tech Chartered Electronics Industries Pte Ltd
Telemedia Pte Ltd where his companies. At AT&T, he was Managing (now known as ST Electronics (Infocomm
responsibilities included overseeing Director for ASEAN Business Markets. Systems) Pte Ltd) and CSE Systems and
the business integration of Singapore He was later seconded to Concert Global Engineering Pte Ltd (now known as
Technologies Telemedia Pte Ltd’s Networks (an AT&T and BT Global Joint CSE Global Ltd). His previous positions
global investments. This followed a Venture) as Managing Director and Vice- include Managing Director of i-STT Pte
22-year career at United Technologies President, Sales for Global Services Asia Ltd (now known as Equinix Singapore
Carrier where he held several senior Pacific, becoming one of the pioneer Pte. Ltd.) which he co-founded in 1999
management positions both in Singapore leaders in the formation of this venture. and General Manager and Board member
and internationally. His responsibilities encompassed voice, of ST Teleport Pte Ltd, a company which
data and network management solutions. he set up in 1994.
Mr Loh holds a Bachelor of Engineering Mr Ng subsequently joined Gartner as
(Electrical) Degree from the University of Managing Director and Regional Vice- Mr Lee holds a Bachelor of Engineering
Western Australia, Australia and a MBA President, overseeing its research and Degree (First Class Honours) and a
from Michigan State University, USA. consulting business across Asia. MBA from the National University of
Singapore.
Mr Ng holds a Graduate Diploma in
Marketing and a MBA from University of
Dubuque, USA.
Ms Wong was appointed to lead Personal Ms Wong was appointed Chief Financial Mr Goh is responsible for the management
Communications Solutions (“PCS”) Officer in 2007, having been Vice- of local and regional human resource
Services (then known as Distribution President, Finance, since 2005. Ms functions for the Group, including human
Services) in 2006. She oversees the Wong oversees the financial affairs and capital development, leadership and
overall management of the business unit, reporting for the Group and supports organisational development.
including its regional and retail operations. the Group’s investor relations and risk
She is also responsible for identifying and management activities. Mr Goh has more than 15 years human
developing new market opportunities to resource experience across a broad
grow the business. Ms Wong has over 20 years’ of spectrum of industries. Prior to joining
experience in finance and accounting, the Group in 2004, Mr Goh held various
Ms Wong joined our Group in December most of which were with the Singapore senior positions including Assistant Vice-
1999 as Operations Manager for PCS Technologies Telemedia Pte Ltd group of President (HR) at StarHub Pte Ltd (now
Services and has been a key contributor companies. She joined our Group in June known as StarHub Ltd) and Director (HR)
to the significant growth and success 1995 as an Accountant. She participated at i-STT Pte Ltd, a subsidiary of Singapore
of the division’s business. She was in the listing of TeleChoice on the Main- Technologies Telemedia Pte Ltd. He
previously Area Manager for Telecom Board of the SGX-ST in June 2004. was also Director (HR) for the National
Equipment Pte Ltd (a subsidiary of University Hospital.
Singapore Telecommunications Ltd). Ms Wong holds a Bachelor of
Accountancy Degree from the National Mr Goh holds a Bachelor of Mechanical
Ms Wong graduated with a Bachelor of University of Singapore and a Master in Engineering Degree from the National
Business Degree (Distinction) from the Business Administration from Heroit Watt University of Singapore.
Royal Melbourne Institute of Technology University, Edinburgh, United Kingdom.
University, Victoria, Australia, and holds Ms Wong is also a member of the
an Executive MBA (Honours) from the Institute of Certified Public Accountants
University of Chicago Booth School of of Singapore.
Business.
1 2 3
1,2 We further strengthened our close ties with our customers and principals
3 PCS Services was awarded a new distributorship agreement from StarHub for the sale of its prepaid cards
4 5 6
4, 5 Nexwave Telecoms launched a full-suite of “Cloud Computing” solutions and “Voiz Unlimited” under our well-known “SunPage” brand
6 Nexwave Technologies offers a full suite of engineering services including in-building coverage solutions
Besides further enhancing our corporate by S$0.2 million compared with the same more retail outlets in Parco Marina Bay,
telephony and network solutions offerings, period last year. The increase was from Esplanade MRT Station and Bedok Point.
we have also aligned our business to higher equipment sales in Indonesia This is in addition to renewing our lease
take advantage of the increasing demand offset by lower equipment sales in at IMM shopping mall where we operate
of corporations, both large and small, Singapore. Intense price competition as one of our two StarHub Platinum Shops.
for a more efficient and flexible “pay well as unfavourable forex movements
as you use” IT Infrastructure model. during the year impacted our FY2009 The speed at which demand is picking
Leveraging our next generation voice performance. PBT decreased by S$1.2 up for Cloud Computing solutions among
network capability and our extensive million or 39% due to lower margin enterprises, is a positive signal for
experience in usage models, we launched sales and unrealised exchange losses as Telecommunications Services. Over the
a full-suite of “Cloud Computing” compared to unrealised exchange gain next five years, IDC has forecasted that IT
solutions to meet this growing market. in the same period last year. PBT margin cloud services will grow almost threefold,
Our Unified Communications-as-a- correspondingly decreased to 4.7% in reaching US$42 billion by 2012. As one
Service (“UCaaS”), is an on-demand FY2009 compared to 7.6% in FY2008. of the few fully integrated providers of
“in-the-cloud” service catered to the hosted voice solutions and cloud computing
communication and IT needs of SMEs In 2009, we intensified our push into applications, Telecommunications Services
and MNCs. As a gateway to our suite the region, particularly into Malaysia is poised to benefit from this demand. On
of services and products, our brand new and Vietnam. We continued to build our the consumer front, strong demand for
website, www.nexwavetelecoms.com, relationship with our existing customers applications and services for feature-rich
won the prestigious IMA1 Outstanding through additional product and service phones will see us pushing out cutting edge
Achievement Award which reinforces our offerings, particularly in power systems voice and data services to complement our
position as a fully integrated provider equipment and in Operation, Maintenance enterprise-focused offerings.
of next generation communications and and Support (“OMS”) services.
applications solutions. As for Engineering Services, we are seeing
Prospects & Growth Strategies signs of a resumption in infrastructure
Equally important is our consumer capital expenditure (“CAPEX”) spending
segment, where we have continued to While the outlook for FY2010 is by the regional telcos. This is mainly
provide innovative services under our still cloudy, we are confident of the driven by various ongoing network rollout,
well-known “SunPage” brand. Our latest longer term prospects for the Group. upgrading and capacity enhancement
consumer offering is “Voiz Unlimited”, Improvement in consumer demand will initiatives. While price and competitive
a cost-savings, buffet-style service. This drive growth in the mobile handset market pressures are expected to continue,
low subscription-based offering is an once again. Market reports have indicated we see opportunities in many untapped
industry-first and enables callers to make that this market has grown 10% in the areas and will continue to strengthen our
calls to over 30 selected countries with fourth quarter of 20092, the first quarter product and service offerings to pursue
unlimited usage. of positive growth since the recession such opportunities. Going forward, the
hit. Smartphones, in particular, will see expansion of our regional presence
Network Engineering Services continued demand as manufacturers as well as our evolution into a truly
continue to roll out newer and more integrated solutions provider will remain
Revenue contribution from Network feature-laden models. This is likely to our core focus.
Engineering Services was S$41 million translate into stronger sales for us both in 1
Interactive Media Award presented by the Interactive
with PBT of S$1.9 million (15% and 14% of Singapore and the region. In anticipation Media Council Inc of the USA
total Group revenue and PBT respectively) of this pick-up, we will increase our 2
Source: “Global Handset Market Returns to 10 Per
Cent Growth in Q42009”, Cellular News, January 31,
in FY2009. Revenue increased marginally retail presence with the opening of three 2010
Our Board of Directors and Management are committed to maintaining high standards of corporate governance,
to protect the interests of our shareholders and other stakeholders.
This Report describes our corporate governance practices, with reference to the principles set out in the Singapore
Code of Corporate Governance.
Our Board is responsible for guiding our overall strategic direction, corporate governance, and providing oversight
in the proper conduct of our businesses.
The Board meets regularly to review our key activities and business strategies. Regular Board Meetings are held
quarterly to deliberate on strategic matters and policies including significant acquisitions and disposals, the annual
budget, review the performance of the business and approve the release of the quarterly and year-end reports.
Where necessary, we convene additional Board sessions to address significant transactions or developments.
Our President, Andrew Loh Sur Jin, is charged with full executive responsibility for the running of our businesses,
making operational decisions and implementing business directions, strategies and policies. The Board has also
established an Executive Committee (“EC”) to oversee major business and operational matters. The EC comprises
Bertie Cheng, Lee Theng Kiat, Lim Chai Hock Clive and Yen Se-Hua Stewart.
Management regularly consults and updates the EC on all major business and operational issues.
The Board is also supported by other Board committees which are delegated with specific responsibilities, as
described under “Principle 4: Board Membership” of this Report.
The Board, upon the recommendation of the Audit Committee (“AC”), has adopted a comprehensive set of
internal controls, which sets out authority and approval limits for capital and operating expenditure, investments
and divestments, bank borrowings and cheque signatories arrangements at Board level. Authority and approval
sub-limits are also provided at Management levels to facilitate operational efficiency.
Management monitors changes to regulations and accounting standards closely. Updates and briefings on regulatory
requirements are conducted either during Board sessions or by circulation of papers.
Newly-appointed Directors are given briefings by Management on the business activities of the Group and its
strategic directions, as well as their statutory and other duties and responsibilities as directors.
To help ensure compliance with the applicable securities and insider trading laws, including the Best Practices
Guide of the SGX-ST Listing Manual, we have adopted and implemented our Guidelines on Dealing in Securities
of TeleChoice. We send regular compliance notices to all Directors and staff. All our Directors and employees are
prohibited from dealing in our securities during the period of, two weeks before the respective announcement of
our first quarter, second quarter and third quarter financial results, and one month before the announcement of
our full year financial results. Restrictions are lifted from the date of the announcement of the respective results.
All our Directors and employees are also required to observe the applicable insider trading laws at all times.
To be effective, we believe our Board should comprise a majority of Non-Executive Directors independent
of Management, with the right core competencies and diversity of experience to enable them to contribute
effectively.
Our Board currently comprises seven (7) Directors, all of whom are Non-Executive Directors and independent
of Management. Our Board comprises a majority of Independent Directors, namely Bertie Cheng, Yap Boh Pin,
Yen Se-Hua Stewart and Tang Yew Kay Jackson, which helps ensure a strong element of independence in all our
Board’s deliberations.
The composition of our Board enables Management to benefit from an outside diverse and objective perspective of
issues that are brought before our Board. It also enables our Board to interact and work with Management through
a robust exchange of ideas and views to help shape the strategic directions. This, coupled with a clear separation
of the role of our Chairman and our President, provides a healthy professional relationship between our Board and
Management, with clarity of roles and robust oversight.
We believe there should be a clear separation of the roles and responsibilities between our Chairman and President.
Our Chairman and the President are separate persons in order to maintain an effective balance of power and
responsibilities.
Our Chairman is Bertie Cheng, an Independent Non-Executive Director. Our Chairman leads the Board and ensures
that our Board members work together with Management, with the capability and moral authority to engage and
contribute effectively and constructively on various matters, including strategic issues and business planning
processes.
Our President, Andrew Loh Sur Jin, is charged with full executive responsibility for the running of our businesses,
making operational decisions and implementing business directions, strategies and policies. Our President is
supported on major business and operational issues by the oversight of our EC.
We believe that Board renewal must be an ongoing process, to ensure good governance, and maintain relevance
to the changing needs of the company and business. As required by our Articles of Association, our Directors
are subject to retirement and re-election by shareholders as part of the Board renewal process. Nominations and
election of Board members are the prerogatives and rights of all our shareholders.
In carrying out its functions, our Board is supported by key Board committees, namely the AC, the Remuneration
Committee (“RC”), the Nominating Committee (“NC”) and the EC. Each of our Board committees has been
established with clear charters setting out their respective areas of authority, terms of reference and committee
procedures. Other Board committees can be formed from time to time to look into specific areas as and when
the need arises. Membership in the different committees is carefully managed to ensure that there is equitable
distribution of responsibilities amongst Board members, to maximise the effectiveness of the Board and foster
active participation and contribution from Board members. Diversity of experiences and appropriate skills are
also considered, along with the need to ensure appropriate checks and balances between the different Board
committees.
Details of frequency and participation at our Board, AC, RC and NC meetings for FY09 are set out in Table 1.
The EC meets regularly with Management. In FY09, there were four (4) meetings held between the EC and
Management.
Remuneration Nominating
Board Audit Committee Committee Committee
Our NC is responsible for selecting our Directors and implementing a framework for assessing our Board’s
performance. Our NC is chaired by an Independent Non-Executive Director, Yen Se-Hua Stewart and also comprises
Yap Boh Pin (Independent Non-Executive Director) and Lee Theng Kiat (Non-Executive Director). The members of
our NC (including the Chairman) are all Non-Executive Directors independent of Management.
Our RC is responsible for reviewing cash and long-term incentive compensation policies for our President, senior
Management and key staff. Our RC is chaired by an Independent Non-Executive Director, Bertie Cheng and also
comprises Yen Se-Hua Stewart (Independent Non-Executive Director) and Lee Theng Kiat (Non-Executive Director).
The members of our RC (including the Chairman) are all Non-Executive Directors independent of Management.
Our Articles of Association require one-third of our Directors to retire and subject themselves to re-election by
shareholders at every annual general meeting (“AGM”) (“one-third rotation rule”). In other words, no Director stays
in office for more than three years without being re-elected by our shareholders.
In addition, a newly-appointed Director is required to submit himself for retirement and re-election at the AGM
immediately following his appointment. Thereafter, he is subject to the one-third rotation rule.
We believe that Board performance is ultimately reflected in our business performance. Our Board should ensure
compliance with applicable laws and all Board members should act in good faith, with due diligence and care, in
our best interests and the best interests of our shareholders.
Our Board, through the delegation of its authority to the NC, has used its best efforts to ensure that our Directors
are equipped with the necessary background, experience and expertise in technology, business, finance and
management skills to make valuable contributions and that each Director brings to our Board an independent and
objective perspective to enable balanced and well-considered decisions to be made.
Our NC has implemented a framework for assessing Board performance, and undertakes regular reviews of our
Board (and each Director’s) performance, with inputs from our other Board members. The results of the Board
appraisal exercise, which is conducted at least once annually, are circulated to all Directors for information and
feedback. The information gleaned from the completed Board appraisal exercise(s) are taken into consideration by
the NC, in determining whether there are any changes needed to the appraisal system, prior to the commencement
of the next Board appraisal cycle.
We believe that our Board should be provided with timely and complete information prior to Board meetings and
as and when the need arises.
Management provides adequate and timely information to our Board, on our affairs and issues requiring our Board’s
attention, as well as monthly reports providing updates on our key operational activities and financial performance.
The monthly flow of information and reports allows our Directors to make informed decisions and also to keep
abreast of key challenges and opportunities between our Board meetings.
Frequent dialogue takes place between Management and members of our Board, and our President encourages
all Directors to interact directly with all members of our Management team.
Where a physical Board meeting is not possible, timely communication with members of our Board is effected
through electronic means, which include electronic mail and teleconference. Alternatively, Management will arrange
to personally meet and brief each Director, before seeking our Board’s approval.
Our Board has separate and independent access to our senior Management and the Company Secretary at all times.
Our Board also has access to independent professional advice where appropriate.
Likewise, our AC has separate and independent access to the external and internal auditors, without the presence
of our President and other senior Management members, in order to have free and unfettered access to information
that our AC may require.
We believe that a framework of remuneration for our senior Management and key staff should not be taken in
isolation. It should be linked to the development of our senior Management and key staff to ensure that there is
a continual development of talent and renewal of strong and sound leadership for our continued success. For this
reason, our RC oversees the compensation package for our senior Management and key staff.
All members of our RC are Non-Executive Directors, independent of Management. From time to time, we may
co-opt an outside member into our RC to provide additional perspectives on talent management and remuneration
practices.
Our RC has access to expert professional advice on human resource matters whenever there is a need to consult
externally. In its deliberations, our RC takes into consideration industry practices and norms in compensation. Our
President is not present during the discussions relating to his own compensation, and terms and conditions of
service, and the review of his performance. However, our President will be in attendance when our RC discusses
the policies and compensations of our senior Management and key staff, as well as major compensation and
incentive policies such as share options, stock purchase schemes, framework for bonus, staff salary and other
incentive schemes.
All decisions at any RC meeting is decided by a majority of votes of RC members present and voting (the decision
of the RC shall at all times exclude the vote, approval or recommendation of any member having a conflict of
interest in the subject matter under consideration).
We remunerate our Directors with Directors’ fees which take into account the nature of their responsibilities and
frequency of meetings. Directors’ fees for our Directors for FY09 (set out in Table 2 below) are subject to the
approval of our shareholders at the upcoming Annual General Meeting.
Notes:–
(1) These fees are subject to approval by shareholders as a lump sum at the upcoming Annual General Meeting for FY09.
(2) These fees are payable to STT Communications Ltd.
Details of remuneration paid to our top five (5) key executives for FY09 are set out below. For competitive reasons,
the Company is only disclosing the band of remuneration of each key executive for FY09, within bands of S$250,000
for FY09 in Table 3 below.
Note:–
(1) Remuneration Bands: “A” refers to remuneration from S$250,001 up to S$500,000 and “B” refers to remuneration from S$500,001 up to
S$750,000.
There is no employee who is an immediate family member of a Director or the President, whose remuneration
exceeds S$150,000 a year.
We have always believed that we should conduct ourselves in ways that deliver maximum sustainable value to
our shareholders. We promote best practices as a means to build an excellent business for our shareholders.
Our Board has overall accountability to our shareholders for our performance and in ensuring that we are well
managed. Management provides our Board members with monthly business and financial reports, comparing
actual performance with budget and highlighting key business indicators and major issues that are relevant to our
performance, position and prospects.
Our AC consists of three (3) Non-Executive Directors, the majority of whom including the Chairman are Independent
Directors. The AC members are Yap Boh Pin as Chairman, Sio Tat Hiang and Tang Yew Kay Jackson. Our AC
members bring with them invaluable professional and managerial expertise in the accounting, financial and
telecommunications sectors.
Our AC’s responsibilities include reviewing our annual audit plan, internal audit processes, the adequacy of internal
controls, Interested Party Transactions for which there is a shareholders’ mandate renewable annually. Our AC has
full authority to commission and review findings of internal investigations into matters where there is any suspected
fraud or irregularity or failure of internal controls or violation of any law likely to have a material impact on our
operating results. Our AC is also authorised to investigate any matter within its charter with the full co-operation
of Management. Our AC reviews and approves the quarterly, half-yearly and annual financial statements and the
appointment and re-appointment of auditors before recommending them to the Board for approval.
Our AC meets with the external and internal auditors, without the presence of Management, at least once during
the year, to discuss matters it believes should be raised privately.
Our AC reviews the nature and extent of non-audit services provided by the external auditors during the year
to assess the external auditors’ independence. Our AC is satisfied with the independence and objectivity of the
external auditors and has confirmed with the external auditors that the provision of non-audit services by external
auditors would not affect their independence.
In line with our commitment to a high standard of internal controls and its zero tolerance approach to fraud,
we have put in place a whistle blower policy (the “Policy”) providing employees a direct channel to the AC, for
reporting suspected fraud and possible impropriety in financial reporting, unethical conduct, dishonest practices
or other similar matters. This Policy aims at protecting employees against discrimination or retaliation as a result
of their reporting information regarding, or their participation in, inquiries, investigations or proceedings involving
TeleChoice or its agents. With such a policy in place, we are able to take swift action against any fraudulent
conduct and minimise any financial losses arising from such conduct. The Policy is available on our intranet that
is accessible by all employees.
We believe in the benefits of having in place a system of internal controls to properly safeguard our shareholders’
interests and our assets, and to better manage risks.
Our AC is delegated the full responsibility to review, with our external auditors, their evaluation of the effectiveness
and adequacy of our system of internal controls, and monitor the response to their findings and actions taken to
correct any noted deficiencies. Our AC regularly updates the Board on internal audit findings and issues.
Our AC also oversees the function of enterprise risk management. Our risk management framework is designed
to provide systems and processes to enable us to take cognizance of the various risks and hence make better
decisions. Major identified risk categories include strategic, operational, market and compliance risks. The risk
management processes are tailored to address these categories of risks.
a. oversee and ensure that our risk management policies are adequate and remain effective;
b. conduct regular reviews to ensure that our business units and key functions adequately prioritise and address
risk management issues; and
c. prepare regular updates on Risk Management issues for the AC.
Our internal audit function is carried out by TeleChoice’s internal auditor (the “Internal Auditors”) and where
necessary, we may, on an adhoc basis, engage third parties to provide certain internal audit services. The Internal
Auditors report primarily to the AC Chairman, and administratively to the President and the Chief Financial
Officer.
The Internal Auditors develop their annual internal audit plan in consultation with, but independent of Management,
and submit the plan to our AC for review and approval. Our AC meets with the Internal Auditors at least once a
year without the presence of Management to ensure independence of these functions.
Based on the work performed by our Internal Auditors, and the review undertaken by external auditors, the AC is
of the opinion that we have in place adequate internal controls and nothing has come to the Board’s attention to
cause the Board to believe that our system of internal controls and risk management is inadequate.
We believe in having regular communication with shareholders and also prompt disclosure of information to
shareholders.
Our Investor Relations team manages investor relations and has arranged a series of events during the year to
brief the media and investment analysts on our performance.
For the release of the respective quarterly and year-end results, the announcement is first released via SGXNET
together with our press release. Thereafter, the media and investor analysts meet with Management for briefing(s)
within the ambit of our SGXNET announcements to ensure that there is fair and non-selective disclosure of
information.
We support the Code’s principle to encourage shareholders’ participation. To facilitate greater shareholders’
participation, we participate in on-line Management Q&A sessions where we invite questions from the investing
public on our publicly disclosed business and financial results. A registered shareholder may appoint a proxy to
attend and vote at our general meetings. Hence, our shareholders have the opportunity to direct any queries
regarding the resolutions proposed to be passed to our Directors and Management who are present at our general
meetings. Our external auditors are also invited to be present at our AGMs to assist our Directors in answering
questions from our shareholders relating to the conduct of the audit and the preparation and content of the auditors’
report.
Financial and other information (including news releases and SGXNET announcements) are made available on our
website at http://www.telechoice.com.sg and this is regularly updated.
Personal Communication Solutions (PCS) Services contributed to 79% of group revenue in FY2009 (FY2008:
82%). Revenue declined by 25% or $74.2 million to $217.3 million compared to the previous financial year. The weak
economy in FY2009 caused a slow down in demand which resulted in lower sales to a major customer and other
channels. This was partially offset by additional revenue generated from sales of prepaid cards which commenced
in end April 2009, sales to convenience stores and commission revenue from StarHub Platinum shops.
Telecommunications Services (Telecoms) contributed to 6% of group revenue in FY2009 (FY2008: 6%). There
was an overall revenue decrease of 29% or $6.3 million to $15.4 million in FY2009. This was mainly due to lower
iDD usage attributed to the intense competitive environment and lower enterprise sales from reduced corporate
capex spending. Both the Malaysian operations and mobile data services were also discontinued before the end
of the year.
Network Engineering Services (Engineering) contributed to 15% of group revenue in FY2009 (FY2008: 12%).
There was a slight increase in revenue of $0.2 million to $41.0 million in FY2009. 52% of the revenue was
contributed by Indonesian operations (FY2008: 48%). Lower revenue was recorded from the Singapore operations
with lower transmission equipment sales partially offset by new sales of Maxcell ducts. The increase in revenue in
Indonesia were from power supply equipment sales and additional Radio Network Planning (RNP) works completed
for new customers. This was partially offset by the scale back in Civil Mechanical Engineering (CME) works.
Gross profit decreased 23% or $8.6 million to $28.6 million in FY2009 with lower gross profit reported by all the
three business segments.
Gross margins was slightly lower from 10.5% in FY2008 to 10.4% in FY2009. The improvement in margin from PCS
was offset by lower Engineering margin. Higher retail volume contributed to the better margin in PCS. Competitive
pricing, cost incurred at end of CME projects and a higher sales mix of lower margin product sales resulted in
Engineering recording a lower margin.
With the disposal of investment in TeleFortune (China) Investments Ltd (“TeleFortune”) in December 2008, there
were no profit contribution from the associate in FY2009.
Total operating expenses, including cost of sales, amounted to $261.5 million in FY2009, a decrease of 23%
compared to FY2008.
Cost of sales comprises of cost of equipment sold, carrier costs and commissions, costs of cabling and installation,
network expenses, depreciation and amortisation and attributable direct overheads. Lower revenue resulted in a
corresponding 23% or $71.7 million reduction in costs of sales to $245.1 million in FY2009.
Selling and marketing expenses were lower by 7% or $0.4 million due to lower revenue.
Administrative expenses was 28% or $3.9 million lower than the previous financial year as a result of lower salary
costs, reversal of prior year over provisions, lower depreciation and professional fees.
The increase in other expenses of $0.2 million was mainly from an unrealised exchange loss of $0.5 million in
FY2009 compared to an unrealised exchange gain of $0.2 million in FY2008. The exchange difference arose mainly
from the revaluation of the Indonesian subsidiary ‘s work-in-progress denominated in USD. The loss in exchange
was mitigated by lower amortisation expenses for the retail business and a one-time impairment loss written off
for the Telecoms business in Malaysia in FY2008.
Finance costs in FY2009 remained unchanged at $0.2 million compared to FY2008. The cost was incurred mainly
to support working capital requirements for the Engineering business.
Salary costs decreased by 8% or $1.7 million to $18.9 million mainly from lower headcount. There were also lower
bonus provisions and a wage freeze during the year.
Depreciation and amortisation cost was 35% or $0.7 million lower than previous year. Major capital expenditure
in FY2009 were incurred towards end of the year. There were also fixed assets that were fully depreciated.
Bad debts written off relates to debts from several customers in the Telecoms business.
Impairment losses on goodwill in FY2008 arose from a subsidiary in Malaysia following the scaling down of the
Telecoms operations there.
Group PBT decreased by 25% or $4.6 million to $13.6 million in FY2009. Group PBT margins decreased by 0.1
percentage point to 5.0% in FY2009. The improvement in PBT margins in PCS was offset by the decline in PBT
margin in Telecoms and Engineering.
PCS contributed to 76% of group PBT in FY2009 (FY2008: 71%). PBT for PCS decreased by 20% or $2.6 million to
$10.3 million in FY2009 due to lower revenue mitigated by higher margins, lower operating expenses and receipt
of additional economic benefits from the disposal of investment in TeleFortune.
Telecoms contributed to 10% of group PBT in FY2009 (FY2008: 12%). Lower revenue in FY2009 and the
discontinuation of mobile data services resulted in decline in PBT. These were mitigated by lower losses incurred
from the Malaysian operations, lower operating expenses in Singapore and additional share of profits from the
investment in PT Sakalaguna.
Engineering contributed to 14% of group PBT in FY2009 (FY2008: 17%). PBT for Engineering decreased by 39%
or $1.2 million to $1.9 million in FY2009 due to lower gross margin and higher unrealised exchange losses, partially
offset by lower operating expenses.
Income tax expenses were lower with lower PBT and lower effective tax rate.
The effective tax rate for FY2009 was lower than FY2008. Singapore corporate tax rate was 1% lower than previous
year at 17% in FY2009. The lower effective tax rate was mainly from Telecoms. In FY2009, there was a tax refund
coupled with a one time write-off of deferred tax asset in Malaysia in FY2008. However, Engineering recorded
a higher effective tax rate. Although Indonesia corporate tax rate was 28% in FY2009 (FY2008: 30%), there was
additional final tax computed on certain projects.
Group’s cash and cash equivalents increased by 9% or $4.0 million from $42.6 million as at 31 December 2008 to
$46.6 million as at 31 December 2009.
The Group has bank borrowings of $3.0 million at 31 December 2009 as compared to $5.0 million a year ago.
Net cash has increased by $6.0 million from $37.6 million at 31 December 2008 to $43.6 million at 31 December
2009. Net cash per share increased by 16% from 8.3 cents per share in FY2008 to 9.6 cents per share in
FY2009.
Operating Activities
Cashflow from operating activities decreased from $36.3 million in FY2008 to $5.7 million in FY2009. The reduction
in FY2009 was due to lower profits and negative changes in working capital from higher inventory and lower trade
and other payables. The positive change in working capital in FY2008 was mainly due to lower inventory holdings
in anticipation of weaker demand in FY2009.
Investing Activities
The cash inflow in FY2009 of $9.4 million was mainly due to a $10.8 million proceeds from the disposal of
investment in an associate, TeleFortune (China) Investments Ltd. Capital expenditures in FY2009 and FY2008 were
maintained at $1.6 million respectively.
Financing Activities
Net cash outflow of $11.2 million in FY2009 was lower compared to a net outflow of $17.8 million in FY2008. The
lower outflow in FY2009 was due to a lower dividend payment of $9.1 million (FY2008: $11.3 million) and a lower
net repayment of bank loans of $2.0 million (FY2008: $6.8 million).
3. Shareholders’ Returns
FY2009 FY2008 Change (%)
Net dividend per share (cents) – ordinary 1.75 2.0 -12.5
Dividend declared ($ million) 7.9 9.1 -13.2
Dividend payout ratio (%) 69.3 64.1 5.2 ppts
Dividend yield (%) 8.0 11.1 -3.1 ppts
Basic Earnings per share (cents)(1) 2.51 3.14 -20.1
Return on equity (%) 16.4% 21.5% -5.1 ppts
Return on capital employed (%) 15.9% 20.2% -4.3 ppts
Return on total assets (%) 10.9% 13.0% -2.1 ppts
Note (1) The number of shares used for the purpose of calculating the EPS for FY2009 and FY2008 were 453,134,000 and 452,408,000
respectively
For FY2009, the Company has proposed a final dividend of 1.75 cents per ordinary share or $7.9 million. This is
13% or $1.2 million lower than the 2.0 cents per ordinary share paid for FY2008.
Including the $7.9 million of dividend payout in May 2010, total dividend paid since listing in June 2004 will be
15.25 cents per share or $68.4 million.
Year on year earnings per share declined 20% from 3.14 cents to 2.51 cents.
Return on equity decreased from 21.5% to 16.4% in FY2009 with lower earnings and increased in capital base.
Lower earnings in FY2009 has also attributed to a lower return on capital employed of 15.9% (FY2008: 20.2%) and
return on total assets of 10.9% (FY2008: 13.0%).
We are pleased to submit this annual report to the members of the Company together with the audited financial
statements for the financial year ended 31 December 2009.
Directors
The directors in office at the date of this report are as follows:
Bertie Cheng
Yap Boh Pin
Yen Se-Hua Stewart
Tang Yew Kay Jackson
Lee Theng Kiat
Sio Tat Hiang
Lim Chai Hock Clive
Kwek Buck Chye (Alternate director to Lee Theng Kiat)
Directors’ interests
According to the register kept by the Company for the purposes of Section 164 of the Companies Act, Chapter
50 (the Act), particulars of interests of directors who held office at the end of the financial year (including those
held by their spouses and infant children) in shares, debentures, warrants and share options in the Company and
in related corporations (other than wholly-owned subsidiaries) are as follows:
Holdings at Holdings at
beginning of end of
the year the year
Name of director and related corporations in which interests
(fully paid ordinary shares unless otherwise stated) are held
The Company
Ordinary shares
Bertie Cheng
– Held in the name of Hong Leong Finance Nominees Pte Ltd 500,000 500,000
Yap Boh Pin 150,000 150,000
Yen Se-Hua Stewart
– Held in the name of Advanced Guard Limited 150,000 150,000
Tang Yew Kay Jackson 100,000 100,000
Sio Tat Hiang 150,000 150,000
Lim Chai Hock Clive 1,300,000 1,300,000
– Held in the name of Leap International Pte Ltd 88,198,000 88,198,000
Kwek Buck Chye 150,000 150,000
Related Corporations
Bertie Cheng
– Held in the name of Hong Leong Finance Nominees Pte Ltd – 27,000
Kwek Buck Chye 14,000 14,000
Bertie Cheng
– Exercisable between 10/02/2005 and 09/02/2009 at $2.09 each 27,000 –
– Exercisable between 11/08/2005 and 10/08/2009 at $2.12 each 27,000 –
– Exercisable between 08/02/2006 and 07/02/2010 at $2.37 each 27,000 –
– Exercisable between 11/08/2006 and 10/08/2010 at $2.57 each 27,000 27,000
– Exercisable between 10/02/2007 and 09/02/2011 at $3.01 each 27,000 27,000
– Exercisable between 11/08/2007 and 10/08/2011 at $2.84 each 27,000 27,000
– Exercisable between 16/03/2008 and 15/03/2012 at $3.23 each 27,000 27,000
– Exercisable between 11/08/2008 and 10/08/2012 at $3.61 each 27,000 27,000
1
A minimum threshold performance over the period from 1 January 2008 to 31 December 2008 is required for any restricted shares to be
released. A specific number of restricted shares to be released will depend on the extent of achievement of all performance conditions
and will be delivered in phases according to the stipulated vesting periods.
2
Balance of unvested restricted shares to be released according to the stipulated vesting periods.
3
A minimum threshold performance over the period from 1 January 2009 to 31 December 2009 is required for any restricted shares to be
released. A specific number of restricted shares to be released will depend on the extent of achievement of all performance conditions
and will be delivered in phases according to the stipulated vesting periods.
StarHub Ltd
Ordinary shares
Conditional award granted under the 2006 StarHub Performance Share Plan4
4
The actual number of shares to be delivered under the award will depend on the level of achievement of set performance targets in StarHub
Ltd over a three-year period from 1 January 2006 to 31 December 2008. The conditional award lapsed in 2009.
5
The actual number of shares to be delivered under the award will depend on the level of achievement of set performance targets in StarHub
Ltd over a two-year period from 1 January 2006 to 31 December 2007. No shares will be delivered if the threshold performance targets
are not achieved, while up to 1.3 times the number of shares that are subject of the award will be delivered if the stretched performance
targets are met or exceeded. Shares will be delivered in phases according to the stipulated vesting periods.
6
Balance of unvested restricted shares to be released according to the stipulated vesting periods.
Conditional award granted under the 2007 StarHub Restricted Stock Plan7
7
The actual number of shares to be delivered under the award will depend on the level of achievement of the set performance targets in
StarHub Ltd over a three-year period from 1 January 2007 to 31 December 2009. No shares will be delivered if the threshold performance
targets are not achieved, while up to twice the number of shares that are the subject of the award will be delivered if the stretched
performance targets are met or exceeded.
Conditional award granted under the 2007 StarHub Restricted Stock Plan8
8
The actual number of shares to be delivered under the award will depend on the level of achievement of set performance targets in StarHub
Ltd over a two-year period from 1 January 2007 to 31 December 2008. No shares will be delivered if the threshold performance targets
are not achieved, while up to 1.5 times the number of shares that are subject of the award will be delivered if the stretched performance
targets are met or exceeded. Shares will be delivered in phases according to the stipulated vesting periods.
9
Balance of unvested restricted shares to be released according to the stipulated vesting periods.
Conditional award granted under the 2008 StarHub Performance Share Plan10
10
The actual number of shares to be delivered under the award will depend on the level of achievement of the set performance targets in
StarHub Ltd over a three-year period from 1 January 2008 to 31 December 2010. No shares will be delivered if the threshold performance
targets are not achieved, while up to twice the number of shares that are the subject of the award will be delivered if the stretched
performance targets are met or exceeded.
Conditional award granted under the 2008 StarHub Restricted Share Plan11
11
The actual number of shares to be delivered under the award will depend on the level of achievement of set performance targets in StarHub
Ltd over a two-year period from 1 January 2008 to 31 December 2009. No shares will be delivered if the threshold performance targets
are not achieved, while up to 1.5 times the number of shares that are subject of the award will be delivered if the stretched performance
targets are met or exceeded. Shares will be delivered in phases according to the stipulated vesting periods.
Conditional award granted under the 2009 StarHub Performance Share Plan12
12
The actual number of shares to be delivered under the award will depend on the level of achievement of the set performance targets in
StarHub Ltd over a three-year period from 1 January 2009 to 31 December 2011. No shares will be delivered if the threshold performance
targets are not achieved, while up to twice the number of shares that are the subject of the award will be delivered if the stretched
performance targets are met or exceeded.
13
The actual number of shares to be delivered under the award will depend on the level of achievement of set performance targets in StarHub
Ltd over a two-year period from 1 January 2009 to 31 December 2010. No shares will be delivered if the threshold performance targets
are not achieved, while up to 1.5 times the number of shares that are subject of the award will be delivered if the stretched performance
targets are met or exceeded. Shares will be delivered in phases according to the stipulated vesting periods.
Except as disclosed in this report, no director who held office at the end of the financial year had interests in
shares, debentures, warrants or share options of the Company, or of related corporations, either at the beginning
or at the end of the financial year.
There were no changes in any of the above mentioned interests in the Company between the end of the financial
year and 21 January 2010.
Except for salaries, bonuses and fees and those benefits that are disclosed in Notes 24 and 27 to the financial
statements, since the end of the last financial year, no director has received or become entitled to receive a benefit
by reason of a contract made by the Company or a related corporation with the director or with a firm of which he
is a member or with a company in which he has a substantial financial interest.
Pre-IPO Scheme
Information regarding the Pre-IPO Scheme is set out below:
(i) The Pre-IPO Scheme is administered by the Company’s Remuneration Committee comprising three
directors, namely Bertie Cheng, Yen Se-Hua Stewart and Lee Theng Kiat (the “Committee”).
(ii) On 18 May 2004, the Company granted share options to management and employees of the Company,
STT Communications Ltd (“STTC”), its immediate holding company, and the subsidiaries of STTC and
certain non-executive directors of the Company (collectively referred to as the “Eligible Persons”) to
subscribe for an aggregate of 20,000,000 shares of the Company.
(iii) Eligible Persons are entitled to exercise the share options subject to the following vesting periods:
(iv) The exercise price for each option is $0.2079. Options granted to non-executive directors (including
independent directors) have a life span of five years. Options granted to the Eligible Persons (other
than the non-executive directors) have a life span of ten years.
• executive and non-executive directors and employees of the Company and its subsidiaries and
associated companies.
• executive and non-executive directors and employees of STTC and its subsidiaries.
• controlling shareholders of the Company and the associates of the controlling shareholders.
(iii) The nominal amount of the aggregate number of shares over which the Committee may grant options
on any date, when aggregated with the nominal amount of the number of shares issued and issuable
in respect of all options granted under the Post-IPO Scheme and other share option schemes of the
Company, shall not exceed 15% of the issued and paid-up share capital of the Company on the day
preceding the date of the relevant grant.
(iv) Under the Post-IPO Scheme, the exercise price for each ordinary shares in respect of which an option
is exercisable is determined by the Committee in its absolute discretion on the date of grant at a
maximum discount of 20% to market price determined to be the average of the last dealt prices for
the shares on the Main Board of the Singapore Exchange Securities Trading Limited (“SGX-ST”) for
the five consecutive market days immediately preceding the relevant date of grant of the relevant
option.
(v) The vesting period of the options granted under the Post-IPO Scheme is between one and two
years.
(vi) The exercise price of the options granted under the Post-IPO Scheme shall not be less than $0.02.
Pre-IPO Scheme
Details of options granted to directors of the Company under the Schemes are as follows:
Pre-IPO Scheme
Since the commencement of the Schemes, no options have been granted to STTC or the subsidiaries of
STTC.
Since the commencement of the Schemes, no options have been granted to directors or employees of the
Company, STTC or the subsidiaries of STTC under the Scheme, except for 40 employees of the Company,
STTC and subsidiaries of STTC, who were granted options to subscribe for an aggregate of 20,000,000
ordinary shares in the Company.
Pre-IPO Scheme
The options granted by the Company do not entitle the holders of the options, by virtue of such holding, to
any rights to participate in any share issue of any other company.
Except as disclosed above, there were no unissued shares of the Company or its subsidiaries under options
granted by the Company or its subsidiaries as at the end of the financial year.
(i) The Plans were established with the objective of motivating senior executives to strive for superior
performance and sustaining long-term growth for the Company.
(iii) The following persons (collectively referred to as the “Eligible Persons”) shall be eligible to participate
in the Plans at the absolute discretion of the Committee:
a. employees and non-executive directors of the Company and/or any of its subsidiaries;
b. employees and non-executive directors of STTC and its subsidiaries, who may be seconded to
render services and contribute to the success of the Group; and
The actual number of shares given will depend on the level of achievement of the prescribed
performance targets over the performance period, currently prescribed to be a three-year period.
(v) Under the TeleChoice RSP, conditional awards vest, over a two-year period, once the Committee is,
at its sole discretion, satisfied that the performance and extended service conditions are attained.
The total number of shares to be awarded depends on the level of attainment of the performance
targets.
(vi) Since the commencement of the Plans to the financial year ended 31 December 2009, conditional
awards aggregating 7,115,000 shares have been granted under the aforesaid Plans, representing
the number of shares to be delivered if the performance targets are achieved at “on-target” level.
No shares will be delivered if the threshold performance targets are not achieved, while up to one
and a half (1.5) times the number of shares that are the subject of the award will be delivered if the
stretched performance targets are met or exceeded. 109,500 shares under the Plans were issued
during the financial year 31 December 2009 (2008:103,000 shares).
At the end of the financial year, details of the awards granted under the Plans are as follows:
Aggregate awards
granted since
Awards granted commencement Awards vested Aggregate awards
during the of Plans to during the outstanding as at
Date of grant financial year 31 December 2009 financial year 31 December 2009
TeleChoice RSP
1/06/2007 – 1,569,000 109,500 141,000
1/06/2008 – 1,471,000 – –
1/06/2009 725,000 725,000 – 725,000
TeleChoice PSP
1/06/2007 – 1,020,000 – 770,000
1/06/2008 – 1,533,000 – 1,256,000
1/06/2009 797,000 797,000 – 797,000
The vesting period of the awards granted under the Plans is between one to three years.
(i) the total number of new shares available under the Schemes and Plans collectively; and
(ii) the total number of existing shares delivered pursuant to options under the Schemes and awards
released under the Plans collectively.
Audit committee
The members of the Audit Committee during the year and at the date of this report are:
The Audit Committee performs the functions specified in Section 201B of the Act, the SGX-ST Listing Manual and
the Best Practices Guide of the SGX-ST Listing Manual, and the Code of Corporate Governance.
The Audit Committee has held five meetings since the last directors’ report. In performing its functions, the Audit
Committee met with the Company’s external and internal auditors to discuss the scope of their work, the results
of their examination and evaluation of the Company’s internal accounting control system.
• assistance provided by the Company’s officers to the internal and external auditors;
• financial statements of the Group and the Company prior to their submission to the directors of the Company
for adoption; and
• interested person transactions (as defined in Chapter 9 of the SGX-ST Listing Manual).
The Audit Committee is satisfied with the independence and objectivity of the external auditors and has
recommended to the Board of Directors that the auditors, KPMG LLP, be nominated for re-appointment as auditors
at the forthcoming Annual General Meeting of the Company.
Auditors
The auditors, KPMG LLP, have indicated their willingness to accept re-appointment.
Bertie Cheng
Director
15 March 2010
In our opinion:
(a) the financial statements set out on pages 45 to 99 are drawn up so as to give a true and fair view of the state
of affairs of the Group and of the Company as at 31 December 2009 and the results, changes in equity and
cash flows of the Group for the year ended on that date in accordance with the provisions of the Singapore
Companies Act, Chapter 50 and Singapore Financial Reporting Standards; 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.
The Board of Directors has, on the date of this statement, authorised these financial statements for issue.
Bertie Cheng
Director
15 March 2010
We have audited the accompanying financial statements of TeleChoice International Limited (the Company) and its
subsidiaries (the Group), which comprise the balance sheets of the Group and the Company as at 31 December
2009, the income statement, statement of comprehensive income, statement of changes in equity and cash
flow statement of the Group for the year then ended, and a summary of significant accounting policies and other
explanatory notes, as set out on pages 45 to 99.
(a) 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 profit and loss
accounts and balance sheets and to maintain accountability of assets;
Auditors’ responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our
audit in accordance with Singapore Standards on Auditing. Those standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are
free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of
the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of
the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made
by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
Opinion
In our opinion:
(a) the consolidated financial statements of the Group and the balance sheet of the Company are properly
drawn up in accordance with the provisions of the Act and Singapore Financial Reporting Standards to give
a true and fair view of the state of affairs of the Group and of the Company as at 31 December 2009 and
the results, changes in equity and cash flows of the Group for the year ended on that date; and
(b) the accounting and other records required by the Act to be kept by the Company and by those subsidiaries
incorporated in Singapore of which we are the auditors have been properly kept in accordance with the
provisions of the Act.
KPMG LLP
Public Accountants and
Certified Public Accountants
Singapore
15 March 2010
Group Company
2009 2008 2009 2008
Note $’000 $’000 $’000 $’000
Non-current assets
Property, plant and equipment 4 2,260 1,742 112 187
Intangible assets 5 107 262 – –
Subsidiaries 6 – – 14,031 13,071
Associate and jointly-controlled entity 7 1,248 941 955 955
Deferred tax assets 8 137 208 38 91
Total non-current assets 3,752 3,153 15,136 14,304
Current assets
Inventories 9 17,648 6,694 13,677 4,563
Work-in-progress 10 7,334 11,446 – –
Trade and other receivables 11 29,247 44,873 16,764 30,053
Cash and cash equivalents 16 46,642 42,609 29,922 25,789
Total current assets 100,871 105,622 60,363 60,405
Total assets 104,623 108,775 75,499 74,709
Equity
Share capital 17 21,707 21,066 21,707 21,066
Reserves 18 47,885 44,792 37,935 38,278
Total equity attributable to equity
holders of the Company 69,592 65,858 59,642 59,344
Minority interest 39 – – –
Total equity 69,631 65,858 59,642 59,344
Non-current liability
Deferred tax liabilities 8 241 86 – –
Current liabilities
Trade and other payables 19 27,842 33,019 11,197 9,940
Financial liabilities 20 3,000 5,000 3,000 3,000
Current tax payable 1,836 3,346 1,604 2,376
Provision for warranties 21 212 104 56 49
Deferred income 1,861 1,362 – –
Total current liabilities 34,751 42,831 15,857 15,365
Total liabilities 34,992 42,917 15,857 15,365
Group
2009 2008
Note $’000 $’000
Revenue 23 273,690 354,015
Cost of sales (245,140) (316,824)
Gross profit 28,550 37,191
Attributable to:
Equity holders of the Company 11,395 14,187
Minority interests 17 –
Profit for the year 11,412 14,187
Group
2009 2008
$’000 $’000
Profit for the year 11,412 14,187
Translation difference relating to financial statements of
foreign subsidiaries 503 (803)
Exchange differences on monetary items forming part of
net investment in a foreign operations 705 (1,244)
Income taxes on other comprehensive income – –
Total comprehensive income for the year 12,620 12,140
Attributable to:
Equity holders of the Company 12,603 12,140
Minority interests 17 –
Total comprehensive income for the year 12,620 12,140
At 1 January 2008 20,770 28,352 – 17,591 (2,105) 823 (72) (748) 64,611 – 64,611
Total comprehensive
income for the year – 14,187 – – – – – (2,047) 12,140 – 12,140
Issue of 1,423,000
ordinary shares at
exercise price of
$0.2079 per share
under share option
scheme 22 296 – – – – – – – 296 – 296
Value of employee
services received
for issue of share
options – – – – – 115 – – 115 – 115
Issue of treasury shares – – – – – (25) 25 – – – –
Final dividend of
2.5 cents per share
(one-tier tax exempt) – (11,304) – – – – – – (11,304) – (11,304)
At 31 December 2008 21,066 31,235 – 17,591 (2,105) 913 (47) (2,795) 65,858 – 65,858
At 1 January 2009 21,066 31,235 – 17,591 (2,105) 913 (47) (2,795) 65,858 – 65,858
Total comprehensive
income for the year – 11,395 – – – – – 1,208 12,603 17 12,620
Transfer to general
reserve – (27) 27 – – – – – – – –
Issue of 150,000 ordinary
shares at exercise price
of $0.2079 per share
under share option
scheme 22 31 – – – – – – – 31 – 31
Value of employee
services received for
issue of share options – – – – – 162 – – 162 – 162
Share options exercised
and lapsed 610 84 – – – (694) – – – – –
Issue of treasury shares – – – – – (26) 26 – – – –
Final dividend of
2.0 cents per share
(one-tier tax exempt) – (9,062) – – – – – – (9,062) – (9,062)
Capitalisation of
shareholder loan into
a subsidiary – – – – – – – – – 22 22
At 31 December 2009 21,707 33,625 27 17,591 (2,105) 355 (21) (1,587) 69,592 39 69,631
Group
2009 2008
Note $’000 $’000
Operating activities
Investing activities
Loan repayment from jointly-controlled entity – 464
Dividend from jointly-controlled entity 167 190
Proceeds from disposal of property, plant and equipment 8 84
Proceeds from disposal of investment in associate 10,794 –
Purchase of intangible assets and property, plant and equipment (1,642) (1,585)
Interest received 98 100
Cash flows from investing activities 9,425 (747)
Group
2009 2008
Note $’000 $’000
Financing activities
Balances with related corporations (non-trade) 14 189
Dividend paid (9,062) (11,304)
Interest paid (177) (172)
Proceeds from short-term bank loan 4,500 5,500
Repayment of short-term loan/trust receipts (unsecured) (6,500) (12,272)
Repayment of finance lease liabilities – (14)
Proceeds from issue of shares under share option scheme 31 296
The financial statements were authorised for issue by the Board of Directors on 15 March 2010.
The principal activities of the Company during the financial year are investment holding and those of
wholesalers, retailers, suppliers, importers, exporters, distributors, agents and dealers of mobile phones,
prepaid cards, radio and telecommunication equipment and accessories and the provision of related services.
The principal activities of the subsidiaries are set out in Note 6 to the financial statements, respectively.
The immediate and ultimate holding companies are STT Communications Ltd and Temasek Holdings (Private)
Limited, respectively. These companies are incorporated in the Republic of Singapore.
The consolidated financial statements relate to the Company and its subsidiaries (referred to as the “Group”)
and the Group’s interests in jointly-controlled entity.
2 Basis of preparation
(a) Statement of compliance
The financial statements are prepared in accordance with Singapore Financial Reporting Standards
(FRS).
In particular, information about significant areas of estimation uncertainty and critical judgements in
applying accounting policies that have the most significant effect on the amount recognised in the
financial statements are described in the following notes:
The accounting policies set out below have been applied consistently by the Group. The accounting
policies used by the Group have been applied consistently to all periods presented in these financial
statements.
Comparative segment information has been re-presented in conformity with the transitional
requirements of such standard. Since the change in accounting policy only impacts presentation
and disclosure aspects, there is no impact on earnings per share.
An operating segment is a component of the Group that engages in business activities from
which it may earn revenues and incur expenses, including revenues and expenses that
relate to transactions with any of the Group’s other components. An operating segment’s
operating results are reviewed regularly by the President to make decisions about resources
to be allocated to the segment and assess its performance, and for which discrete financial
information is available.
Segments capital expenditure is the total cost incurred during the period to acquire property,
plant and equipment, and intangible assets other than goodwill.
Comparative information has been re-presented that it also is in conformity with the revised
standard. Since the change in accounting policy only impacts presentation aspects, there is
no impact on earnings per share.
The consolidated financial statements include the financial statements of the Company and its subsidiaries
made up to the end of the financial year. The results of subsidiaries acquired or disposed of during the year
and accounted for under the purchase method are included from the effective date of acquisition or up to
the effective date of disposal.
Associates
Associates are those entities in which the Group has significant influences, but not control, over their financial
and operating policies. Significant influences are presumed to exist when the Group holds between 20%
and 50% of the voting power of another entity. Associates are accounted for using the equity method. The
consolidated financial statements include the Group’s share of the income and expenses of associates, after
adjustments to align the accounting policies with those of the Group, from the date that significant influence
commences until the date that significant influence ceases. When the Group’s share of losses exceeds the
carrying amount of the associates, the carrying amount is fully written down and recognition of further losses
is discontinued except to the extent that the Group has incurred obligations in respect of the associates.
In the Group’s financial statements, they are accounted for using the equity method of accounting. The
consolidated financial statements include the Group’s share of the income and expenses of jointly-controlled
entities, after adjustments to align the accounting policies with those of the Group, from the date that joint
control commences until the date that joint control ceases.
When the Group’s share of losses exceeds the carrying amount of the jointly-controlled entities, the carrying
amount is fully written down and recognition of further losses is discontinued except to the extent that the
Group has incurred obligations in respect of the jointly-controlled entity.
The excess of the cost of acquisition over the Group’s interest in the net fair value of the identifiable
assets, liabilities and contingent liabilities is recorded as goodwill under intangible assets. See Note 3.5 for
accounting on goodwill.
The excess of the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent
liabilities over the cost of acquisition is credited to the income statement in the period of the acquisition.
Acquisitions of subsidiaries from the holding company are accounted for as reconstructions of businesses
under common control using the historical cost method similar to the “pooling of interest” method.
Under the historical cost method, the acquired assets and liabilities are recorded at their existing carrying
amounts. The consolidated financial statements include the results of operations, and the assets and liabilities,
of the combined entities as part of the Group for the whole of the current and preceding periods.
To the extent that the par value of shares issued in consideration for these transactions exceeds the par
value of the shares held by the related corporations or holding companies, the difference is recognised as
Merger Reserve in the Group’s financial statements.
When the Group acquires additional interests in a subsidiary, the cost of the acquisition is accounted for
based on the carrying amount of the net assets acquired at the date of exchange, plus any other cost directly
attributable to the acquisition.
Foreign operations
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on
acquisition of foreign operations, are translated to Singapore Dollars for consolidation at the rates of
exchange ruling at the balance sheet date. The results of foreign operations are translated at the average
exchange rates for the year. Exchange differences arising from translation are recognised directly in equity.
On disposal, the accumulated translation differences are recognised in the consolidated income statement
as part of the gain or loss on sale.
Subsequent expenditure relating to property, plant and equipment that has already been recognised is
added to the carrying amount of the 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. All other
subsequent expenditure is recognised as an expense in the period in which it is incurred.
Gains and losses arising from the retirement or disposal of property, plant and equipment are determined
as the difference between the estimated net disposal proceeds and the carrying amount of the asset and
are recognised in the income statement on the date of retirement or disposal.
Depreciation methods, useful lives and residual values are reviewed and adjusted as appropriate, at each
reporting date.
Goodwill
Acquisitions prior to 1 January 2001
Goodwill represents the excess of the cost of the acquisition over the Group’s interest in the net fair value
of the identifiable assets and liabilities of the acquiree.
Goodwill arising on acquisitions of subsidiaries that occurred prior to 1 January 2001 was adjusted against
shareholders’ equity and has not been retrospectively capitalised and amortised.
Goodwill that has previously been adjusted against shareholders’ equity is not taken to the income statement
when the business is disposed of or when the goodwill is impaired. Similarly, negative goodwill that has
previously been taken to reserves is not taken to the income statement when the business is disposed
of.
Goodwill was stated at cost less accumulated amortisation and impairment losses. Goodwill was amortised
in the income statement using the straight-line method over its estimated useful life of not more than 20
years. On 1 January 2005, the Group discontinued amortisation of goodwill. The remaining balance is subject
to testing for impairment, as described in Note 3.11.
Goodwill is stated at cost less accumulated amortisation and impairment losses. Goodwill is tested for
impairment on an annual basis as described in Note 3.11.
Negative goodwill
Negative goodwill in a business combination represents the excess of the fair value of the identifiable net
assets acquired over the cost of acquisition. Negative goodwill is recognised immediately in the income
statement.
Prior to 1 January 2005, to the extent that negative goodwill relates to an expectation of future losses and
expenses that are identified in the plan of acquisition and can be measured reliably, but which have not yet
been recognised, it is recognised in income statement when the future losses and expenses are recognised.
Any remaining negative goodwill, but not exceeding the fair values of non-monetary assets acquired, is
recognised immediately in the income statement over the weighted average useful life of those assets that
are depreciable or amortisable.
3.6 Inventories
Inventories, including consignment stocks held for sales at convenience stores, are stated at the lower of
cost and net realisable value. Cost is determined on the first-in-first-out basis.
Net realisable value is the estimated selling price in the ordinary course of business less estimated costs
of completion and estimated costs necessary to make the sale.
Work-in-progress is measured at cost plus attributable profit recognised to date, net of progress billings
and allowances for foreseeable losses recognised, and is presented in the balance sheet as construction
work-in-progress (as an asset) or as excess of progress billings over construction work-in-progress (as a
liability), as applicable.
Costs include cost of direct materials, direct labour and costs incurred in connection with the
construction.
Progress claims not yet paid by the customer are included in the balance sheet under progress billing
receivables.
Cash and cash equivalents comprise cash balances and bank deposits.
Share capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of ordinary shares and share options are recognised as
a deduction from equity, net of any tax effects.
Where share capital recognised as equity is repurchased and held as treasury shares, the amount of the
consideration paid, including directly attributable costs, net of any tax effects, is presented as a deduction
from equity. Where such shares are subsequently reissued, sold or cancelled, the consideration received is
recognised as a change in equity. No gain or loss is recognised in the income statement.
Lease payments are apportioned between the finance charges and reduction of the lease liability so as to
achieve a constant rate of interest on the remaining balance of the liability.
Capitalised leased assets are depreciated over the shorter of the economic useful life of the asset and the
lease term.
Operating leases
Where the Group has the use of assets under operating leases, payments made under the leases are
recognised in the income statement on a straight-line basis over the term of the lease. Lease incentives
received are recognised in the income statement as an integral part of the total lease payments made.
Contingent rentals are charged to the income statement in the accounting period in which they are
incurred.
An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference
between its carrying amount, and the present value of the estimated future cash flows discounted at the
original effective interest rate.
Individually significant financial assets are tested for impairment on an individual basis. The remaining financial
assets are assessed collectively in groups that share similar credit risk characteristics.
All impairment losses are recognised in the income statement. Any impairment loss is reversed if the
reversal can be related objectively to an event occurring after the impairment loss was recognised in the
income statement.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair
value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their
present value using a pre-tax discount rate that reflects current market assessments of the time value of
money and the risks specific to the asset or cash-generating unit.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses
recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased
or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to
determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s
carrying amount does not exceed the carrying amount that would have been determined, net of depreciation
or amortisation, if no impairment loss had been recognised.
Share-based payments
Share option plans
The share option schemes allow the Group employees to acquire shares of the Company. The fair value of
options granted is recognised as an employee expense with a corresponding increase in equity. The fair value
is measured at grant date and spread over the period during which the employees become unconditionally
entitled to the options. At each balance sheet date, the Company revises its estimates of the number of
options that are expected to become exercisable. It recognises the impact of the revision of original estimates
in employee expense and in a corresponding adjustment to equity over the remaining vesting period. The
proceeds received net of any directly attributable transactions costs are credited to share capital (nominal
value) when the options are exercised.
The share option reserve is transferred to retained earnings upon cancellation or expiry of the vested option
or awards. When the options are exercised or awards are released, the share option reserve is transferred
to share capital if new shares are issued.
The fair value of the options granted to employees of its subsidiaries is recognised as an increase in the
cost of the Company’s investment in subsidiaries, with a corresponding increase recorded in equity over
the vesting period.
The provision for warranties is based on estimates made from historical warranty data associated with similar
products and services. Claims, when incurred, are charged against this provision.
Income on project work-in-progress is recognised using the percentage of completion method. When
losses are expected, full provision is made after adequate allowance has been made for estimated costs to
completion. The stage of completion is assessed by reference to surveys of work performed.
Revenue from sales of pre-paid phone cards for which services have not been rendered is deferred and
presented in the balance sheet as deferred income. Upon the expiry of pre-paid phone cards, any unutilised
value of the cards is taken to income statement.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or
substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous
years.
Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the financial statements. Temporary differences
are not recognised for goodwill not deductible for tax purposes and the initial recognition of assets or
liabilities that affect neither accounting nor taxable profit. The amount of deferred tax provided is based on
the expected manner of realisation or settlement of the carrying amounts of assets and liabilities, using tax
rates enacted or substantively enacted at the balance sheet date.
A 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.
Deferred tax is provided on temporary differences arising on investments in subsidiaries, associates and
jointly-controlled entities, except where the timing of the reversal of the temporary difference can be
controlled and it is probable that the temporary difference will not be reversed in the foreseeable future.
Segment results, assets and liabilities include items directly attributable to a segment as well as those that
can be allocated on a reasonable basis. Inter-segment pricing is determined based on terms agreed between
the segment concerned.
Segment capital expenditure comprises additions to property, plant and equipment and intangible assets.
Cost
At 1 January 2008 1,075 283 16,565 850 2,934 120 21,827
Translation differences
on consolidation (22) – (113) (7) (39) – (181)
Additions 217 – 827 73 347 8 1,472
Disposals (64) – (167) (50) (289) – (570)
Reclassification 168 – – (180) 12 – –
Accumulated depreciation
and impairment losses
At 1 January 2008 873 283 15,362 600 2,523 92 19,733
Translation differences
on consolidation (16) – (96) (6) (35) – (153)
Depreciation for the year 211 – 813 111 379 14 1,528
Impairment losses – – 163 – 12 – 175
Disposals (60) – (97) (39) (281) – (477)
Reclassification 52 – – (58) 6 – –
Carrying amount
At 1 January 2008 202 – 1,203 250 411 28 2,094
Office furniture,
Leasehold fittings and
improvements equipment Computers Total
Company $’000 $’000 $’000 $’000
Cost
At 1 January 2008 286 396 1,147 1,829
Additions – 1 133 134
Disposals – (2) (17) (19)
Accumulated depreciation
At 1 January 2008 267 350 940 1,557
Depreciation for the year 19 28 172 219
Disposals – (2) (17) (19)
Carrying amount
At 1 January 2008 19 46 207 272
5 Intangible assets
Computer Retail business
software infrastructure Goodwill Total
Group $’000 $’000 $’000 $’000
Cost
At 1 January 2008 1,942 1,304 906 4,152
Additions 88 – – 88
Translation difference – – (33) (33)
Accumulated amortisation
and impairment losses
At 1 January 2008 1,699 852 586 3,137
Amortisation charge for the year 202 319 – 521
Impairment charge – – 313 313
Translation difference – – (26) (26)
Carrying amount
At 1 January 2008 243 452 320 1,015
Group
2009 2008
$’000 $’000
Cost of sales 78 173
Administrative expenses 20 29
Other expenses 133 319
231 521
Value-in-use was determined by discounting the future cash flows generated from the Singapore PCS
business. The calculation uses cashflow projections based on actual operating results and the approved
2010 business plan using 14% growth rate. The discount rate used in the calculation of net present value
of 8.2% is the pre-tax rate that reflects the current assessment of time value for money.
As at the balance sheet date, based on the key assumptions, management believes that the recoverable
amount exceeds its carrying amount.
6 Subsidiaries
Company
2009 2008
$’000 $’000
Investments in subsidiaries 16,375 14,995
Impairment losses (4,344) (3,924)
Long-term loan due from a subsidiary 2,000 2,000
14,031 13,071
6 Subsidiaries (Cont’d)
Details of significant subsidiaries are as follows:
Effective equity
held by the Group
Country of 2009 2008
Name of subsidiary Principal activities incorporation % %
NexWave Technologies Pte Ltd Provision of network Singapore 100 100
engineering services
NexWave Solutions Pte. Ltd. Provision of public mobile Singapore 100 100
data and location tracking
services
6 Subsidiaries (Cont’d)
KPMG Singapore is the auditor of all significant Singapore-incorporated subsidiaries. For this purpose,
a subsidiary is considered significant as defined under SGX-ST Listing Manual if its net tangible assets
represents 20% or more of the Group’s consolidated net tangible assets, or if its pre-tax profits accounts
for 20% or more of the Group’s consolidated pre-tax profits.
During the financial year, the Company capitalised a loan extended to Planet Telecoms (S) Pte Ltd (“Planet
Telecom”) amounting to $900,000 to 900,000 new ordinary shares in Planet Telecoms. This resulted in an
increase in equity interest held by the Company in Planet Telecoms from 85% to 92%.
During the financial year, the Company capitalised loans due from TeleChoice (Thailand) Ltd (“TeleChoice
Thailand”) amounting to $420,000 to 400,000 new ordinary shares in TeleChoice Thailand. TeleChoice
Thailand is dormant and the recoverable amount is determined to be nil. The amount is fully impaired during
the year.
The loan to a subsidiary is unsecured, bearing interest at rates ranging from 1.75% to 2.5% (2008: 2.5% to
3.0%), and settlement is neither planned for nor likely to occur in the foreseeable future. As the amount is,
in substance, a part of the Company’s net investment in the subsidiary, it is stated at cost.
Effective equity
held by the Group
Country of 2009 2008
Name of jointly-controlled entity and associate incorporation % %
Jointly-controlled entity
PT Sakalaguna Semesta Indonesia 49 49
(audited by Johannes and Rekan)
Associate
TeleFortune (China) Investments Ltd Hong Kong – –
In the previous financial year, the Group and the Company terminated its 40% investment in TeleFortune
(China) Investments Ltd (TFI) for a consideration which comprised the cost of the investment of HK$50
million and the Group’s share of economic benefit attributable to TFI. In 2009, the Group and the Company
received the proceed of $10,794,000 from the disposal of TFI.
The financial information of the Group’s share of associate and interest in the jointly-controlled entity are
as follows:
Charged/ Charged/
(credited) (credited)
At to income At to income At
1 January statement 31 December statement 31 December
2008 (Note 25) 2008 (Note 25) 2009
Group $’000 $’000 $’000 $’000 $’000
Company
Group Company
2009 2008 2009 2008
$’000 $’000 $’000 $’000
Deferred tax assets 137 208 38 91
Deferred tax liabilities 241 86 – –
Group
2009 2008
$’000 $’000
Unutilised tax losses 2,070 2,150
The tax losses are subject to agreement by the tax authorities and compliance with tax regulations in the
respective countries in which certain subsidiaries operate. The deductible temporary differences do not
expire under current tax legislation.
Deferred tax assets have not been recognised in respect of these items because it is not probable that
future taxable profits will be available against which the Group can utilise the benefits.
9 Inventories
Group Company
2009 2008 2009 2008
$’000 $’000 $’000 $’000
Raw materials 2,620 1,348 – –
Inventories held for resale – at cost 7,336 692 6,236 111
Inventories held for resale – at net
realisable value 7,692 4,654 7,441 4,452
17,648 6,694 13,677 4,563
10 Work-in-progress
Group
2009 2008
$’000 $’000
Contract cost 33,874 14,266
Attributable profit 7,045 3,104
40,919 17,370
Progress billing (33,585) (5,924)
Work-in-progress 7,334 11,446
The maximum exposure to credit risk for loans and receivables (excluding unbilled receivables) at the
reporting date (by type of customer) is:
Group Company
2009 2008 2009 2008
$’000 $’000 $’000 $’000
Related parties 13,608 17,825 6,071 9,033
Subsidiaries – – 5,253 5,924
Non-related parties:
– Multi-national companies 3,642 4,321 – –
– Other companies 4,740 15,850 2,076 11,861
21,990 37,996 13,400 26,818
Impairment Impairment
Gross losses Gross losses
2009 2009 2008 2008
$’000 $’000 $’000 $’000
Group
Company
The change in impairment loss in respect of trade receivables during the year is as follows:
Group
2009 2008
$’000 $’000
At 1 January 247 3,186
Impairment loss recognised 196 217
Amount written-off (116) (3,152)
Translation difference – (4)
At 31 December 327 247
The Group’s and Company’s primary exposure to credit risk arises through its trade and amount due from
related corporations. The Group’s historical experience in the collection of accounts receivable falls within
the recorded allowances. As a result, management believes that no additional credit risk beyond the amounts
provided for is inherent in the Group’s trade receivables and balances due from related corporations.
The majority of the impairment loss recognised in the previous financial year related to an export customer
who has incurred significant losses in its operations. The Group deemed the recoverability of the receivables
from this customer to be remote based on its review of the financial affairs of and discussions with this
customer. The amount due from this export customer has been written-off in 2008.
Included in 2008 other receivables of the Group and of the Company is an amount of $10,606,000 due from
a business partner, representing the proceeds from disposal of the investment in an associate (see in Note
7).
The non-trade amounts due to related corporations are unsecured and interest-free, and repayable on
demand.
Group Company
2009 2008 2009 2008
$’000 $’000 $’000 $’000
Retention sum relating to
construction work-in-progress 2,866 2,813 – –
Unbilled receivables 4,852 4,996 3,114 3,008
The non-trade amounts due from and to subsidiaries and short-term loans due from subsidiaries are
unsecured and repayable on demand. The short-term loans bear interest at rates at 2.39% (2008: 1.85% to
3.30%) per annum.
As at 31 December 2009, the Company has assessed for impairment loss on the short-term loans due from
subsidiaries. The carrying amounts of the loans were compared to the estimated future cash flows from the
repayment and no impairment loss was recorded in 2009 (2008: Nil).
The non-trade amounts due to the immediate holding company are unsecured and interest-free, and repayable
on demand.
As at 31 December 2009, the Group has cash and cash equivalents totalling $1,566,000 (2008: $1,941,000)
which are held in countries with foreign exchange controls.
17 Share capital
Group and Company
2009 2008
No. of No. of
Note shares shares
(’000) $’000 (’000) $’000
Fully paid ordinary shares with no par value:
Ordinary shares
The Group has issued share options under its Pre-IPO Share Option Scheme (see Note 22). The Group and
the Company transferred $610,000 fair value for options exercised as at 31 December 2009 from share
options reserve to share capital.
In 2007, the Company completed the buy-back of 300,000 ordinary shares under the terms of Share Purchase
Mandate approved by shareholders on 27 April 2007. The total consideration for shares bought back from
the market is $72,345, being the market price, including incidental cost. This amount was classified as a
deduction from equity under “reserve for own shares”. At 31 December 2009, the Company held 87,500
of its own uncancelled shares.
The holders of ordinary shares (excluding treasury shares) are entitled to receive dividends as declared
from time to time and are entitled to one vote per share at meetings of the Company. All shares (excluding
treasury shares) rank equally with regard to the Company’s residual assets.
The Board seeks to maintain a balance between the higher returns that might be possible with higher levels
of borrowings and the advantages and security afforded by a sound capital position. The Group’s target is
to achieve a return on capital employed of between 7% and 11%; in 2009, the return was 15.9% (2008:
20.2%). In comparison, the interest expense on interest-bearing borrowings (excluding liabilities with imputed
interest) was 1.85% to 4.50% (2008: 2.88% to 3.25%) per annum.
From time to time, the Group purchases its own shares on the market; the timing of the purchases depends
on market prices. Primarily, the shares purchased are intended to be used for issuing shares under the
Group’s long term incentive plans. Buy and sell decisions are made based on the requirements under the
plans.
The Board defines “capital” to include funds raised through the issuance of ordinary share capital,
accumulated profits and proceeds raised from debt facilities.
There were no changes in the Group’s approach to capital management during the year.
The Company and its subsidiaries are not subject to externally imposed capital requirements.
18 Reserves
Group Company
2009 2008 2009 2008
$’000 $’000 $’000 $’000
Capital reserve – – 13,300 13,300
General reserve 27 – – –
Merger reserve 17,591 17,591 – –
Reserve for own shares (21) (47) (21) (47)
Share option reserve 355 913 243 801
Goodwill written-off (2,105) (2,105) – –
Exchange translation reserve (1,587) (2,795) – –
Other reserves 14,260 13,557 13,522 14,054
Accumulated profits 33,625 31,235 24,413 24,224
47,885 44,792 37,935 38,278
18 Reserves (Cont’d)
In accordance with the merger relief provisions of Section 69 (B) of the Companies Act (Cap.50), the capital
reserve comprises reserve arising from the excess of the fair value of the Company’s share issued as
consideration for the acquisition of subsidiaries over their par value.
Group
2009 2008
$’000 $’000
Aggregate of share capital of subsidiaries acquired 23,403 23,403
Aggregate of losses of subsidiaries prior to acquisition by STTC (6,372) (6,372)
Acquisition of additional 7% equity interest in NWS by STTC 1,455 1,455
Goodwill on acquisition of subsidiaries by STTC 2,105 2,105
Cost of investment paid by STTC 20,591 20,591
Par value of shares issued for acquisition of subsidiaries (3,000) (3,000)
17,591 17,591
The Group is required to transfer 20% of the registered share capital of its Indonesian subsidiary’s net profit
in each year to general reserve if there are available retained earnings, until the general reserve reaches
20% of the registered share capital of its Indonesian subsidiary.
Reserve for own shares comprises the cost of the Company’s shares held by the Group.
The share option reserve comprises the cumulative value of the employee services received for the
outstanding share options.
The goodwill written off represents the excess of consideration paid on the acquisition of subsidiaries prior
to 1 January 2001 over the share of the fair value of net assets acquired.
The exchange translation reserve of the Group comprises foreign exchange differences arising from the
translation of the financial statements of foreign entities whose functional currency is different from that
of the Company and from the monetary items which form part of the Group’s net investment in foreign
subsidiaries.
20 Financial liabilities
Group Company
2009 2008 2009 2008
$’000 $’000 $’000 $’000
Current liabilities
Unsecured bank loans 3,000 5,000 3,000 3,000
At 31 December 3,000 5,000 3,000 3,000
2009 2008
Nominal Face Carrying Face Carrying
interest Year of value amount value amount
rate maturity $’000 $’000 $’000 $’000
Group
S$ floating rate loan 2.39% 2010 3,000 3,000 5,000 5,000
Company
S$ floating rate loan 2.39% 2010 3,000 3,000 3,000 3,000
Cash flows
Carrying Contractual Within Within
amount cashflows 1 year 1 to 5 years
Group $’000 $’000 $’000 $’000
2009
Variable interest rate loan 3,000 (3,037) (3,037) –
Trade and other payables 27,822 (27,822) (27,822) –
30,822 (30,859) (30,859) –
2008
Variable interest rate loan 5,000 (5,027) (5,027) –
Trade and other payables 32,988 (32,988) (32,988) –
37,988 (38,015) (38,015) –
Company
2009
Variable interest rate loan 3,000 (3,037) (3,037) –
Trade and other payables 11,197 (11,197) (11,197) –
14,197 (14,234) (14,234) –
2008
Variable interest rate loan 3,000 (3,022) (3,022) –
Trade and other payables 9,940 (9,940) (9,940) –
12,940 (12,962) (12,962) –
The provision made for warranty costs relates mainly to mobile phones, network engineering services,
paging devices and radio and telecommunication equipment sold during the year. The provision is based on
estimates made from historical warranty data.
Pre-IPO Scheme
Information regarding the Pre-IPO Scheme is set out below:
(i) The Pre-IPO Scheme is administered by the Company’s Remuneration Committee comprising
three directors, namely Bertie Cheng, Yen Se-Hua Stewart and Lee Theng Kiat (the
“Committee”).
(ii) On 18 May 2004, the Company granted share options to management and employees of
the Company, STT Communications Ltd (“STTC”), its immediate holding company, and the
subsidiaries of STTC and certain non-executive directors of the Company (collectively referred
to as the “Eligible Persons”) to subscribe for an aggregate of 20,000,000 shares of the
Company.
(iii) Eligible Persons are entitled to exercise the share options subject to the following vesting
periods:
Percentage of Shares
over which an option is
Vesting schedule exercisable (%)
On the date falling twelve months from 18 May 2004 25
On the date falling twenty-four months from 18 May 2004 25
On the date falling thirty-six months from 18 May 2004 25
On the date falling forty-eight months from 18 May 2004 25
(iv) The exercise price for each option is $0.2079. Options granted to non-executive directors
(including independent directors) have a life span of five years. Options granted to the Eligible
Persons (other than the non-executive directors) have a life span of ten years.
• executive and non-executive directors and employees of the Company and its subsidiaries
and associated companies.
• executive and non-executive directors and employees of STTC and its subsidiaries.
(iv) Under the Post-IPO Scheme, the exercise price for each ordinary share in respect of which an
option is exercisable is determined by the Committee in its absolute discretion on the date of
grant at a maximum discount of 20% to market price determined to be the average of the last
dealt prices for the shares on the Main Board of the Singapore Exchange Securities Trading
Limited (“SGX-ST”) for the five consecutive market days immediately preceding the relevant
date of grant of the relevant option.
(v) The vesting period of the options granted under the Post-IPO Scheme is between one and two
years.
(vi) The exercise price of the options granted under the Post-IPO Scheme shall not be less than
$0.02.
Movements in the number of share options and its exercise price are as follows:
During the financial year ended 31 December 2009, options exercised resulted in 150,000 (2008:
1,423,000) shares being issued at an exercise price of $0.2079 (2008: $0.2079) each. Options were
exercised on a regular basis throughout the year. The weighted average share price during the dates
when the share options are exercised is $0.210 (2008: $0.2465) per share.
The fair value of services received in return for share options granted are measured by reference
to the fair value of share options granted. The estimate of the fair value of the services received is
measured based on a Black-Scholes model. The expected life used in the model has been adjusted,
based on management’s best estimate, for the effects of non-transferability, exercise restrictions
and behavioral considerations.
The expected volatility is based on the historic valuation of shares based on net assets values, adjusted
for any expected changes to future volatility to those net assets values.
There are no market conditions associated with the share option grants.
(i) The Plans were established with the objective of motivating senior executives to strive for
superior performance and sustaining long-term growth for the Company.
(iii) The following persons (collectively referred to as the “Eligible Persons”) shall be eligible to
participate in the Plans at the absolute discretion of the Committee:
a. employees and non-executive directors of the Company and/or any of its subsidiaries;
b. employees and non-executive directors of STTC and its subsidiaries, who may be
seconded to render services and contribute to the success of the Group; and
(iv) Under the TeleChoice PSP, conditional awards of shares are granted. Awards represent the right
of a participant to receive fully paid shares upon the participant achieving certain pre-determined
performance targets set based on corporate objectives aimed at sustaining longer-term growth.
After the awards vest, and the shares comprised in the awards are issued at the end of the
performance and/or service period once the Committee is, at its sole discretion, satisfied that
the prescribed performance targets have been achieved.
(v) Under the TeleChoice RSP, awards granted vest only after the satisfactory completion
of time-based service conditions (time-based restricted awards) or where the award is
performance-related after a further period of service beyond the performance targets completion
date (performance-based restricted awards).
(vi) The vesting period of the shares granted under the Plans is between one to three years.
(vii) As at 31 December 2009, the initial awards of 3,350,000 (2008: 2,553,000) shares under
the TeleChoice PSP and the initial awards of 3,765,000 (2008: 3,040,000) shares under the
TeleChoice RSP were made to Eligible Persons.
The key assumptions applied in estimating the fair values under TeleChoice RSP are as follows:
The fair value of the shares is estimated using a Monte-Carlo simulation methodology at the
measurement dates, which are grant dates of these share awards. The accrual for the share expenses
under the Plans has been estimated on the basis that the Group will be on target in respect of the
performance conditions.
During the financial year, the Group expensed off $162,000 (2008: $115,000) to the income statement
based on the fair value of the PSP and RSP at the grant date.
23 Revenue
Revenue represents the invoiced value of goods sold and services rendered, less discounts, and the value
of work done on cabling and installation projects that are undertaken.
Group
2009 2008
$’000 $’000
Equipment and cards sales 212,436 288,870
Voice services 11,355 16,022
Cabling and installation project revenue 40,963 40,835
Mobile data and location tracking services 2,913 2,596
Logistic services 6,023 5,692
273,690 354,015
Group
Note 2009 2008
$’000 $’000
Amortisation of intangible assets 5 231 521
Bad debts written off/(write-back) 74 (42)
Cost of inventories recognised in profit and
loss statements 196,457 265,484
Depreciation of property, plant and equipment 4 1,070 1,528
Directors’ remuneration 383 366
Exchange loss/(gain) 493 (180)
Impairment loss on trade receivables 11 196 217
Impairment loss on goodwill 5 22 313
Impairment loss on property, plant and equipment 4 – 175
Loss on disposal of property, plant and equipment – 9
Non-audit fees paid to:
– auditors of the Company 2 12
Provision made/(written back) for warranties 21 108 (313)
Rental expenses 2,256 2,439
Loss from disposal of associate – 192
Staff costs 18,894 20,582
Contributions to defined contribution plans,
included in staff costs 1,409 1,566
Value of employee services received for equity based
compensation, included in staff costs 162 115
Writedown of inventories 857 928
Finance costs
Interest paid and payable to:
– banks and financial institutions 177 172
* The Jobs Credit Scheme was introduced in the Singapore Budget 2009 to encourage companies to preserve jobs during economic
downturn. The amount recognised in the financial year related to the 12% cash grant received on the first $2,500 of each month’s
wages for each employee at the end of each quarter. In October 2009, the Government announced that the Jobs Credit Scheme
will be extended for half a year to June 2010 at stepped-down rates.
Number of shares
2009 2008
(’000) (’000)
Issued ordinary shares at beginning of the year 452,967 451,442
Effect of share options exercised 103 907
Effect of own shares held 64 59
Weighted average number of ordinary shares at the end of year 453,134 452,408
Basic earnings per share is calculated by dividing the Group’s profit attributable to equity holders of the
Company by the weighted average number of ordinary shares in issue during the financial year.
Group
2009 2008
$’000 $’000
Diluted earnings per share is based on:
Profit attributable to equity holders of the Company 11,395 14,187
For the purpose of calculating diluted earnings per share, the weighted average number of ordinary shares
in issue is adjusted to take into account the dilutive effect arising from the dilutive share options with the
potential ordinary shares weighted for the period outstanding.
Group
Number of shares
2009 2008
(’000) (’000)
Weighted average number of shares issued, used in
calculation of basic earnings per share 453,134 452,408
Potential ordinary shares issuable under share options 28 334
Weighted average number of ordinary shares issued and
potential shares assuming full conversion 453,162 452,742
There are no anti-dilutive options for the year ended 31 December 2009 and 2008.
Group
2009 2008
$’000 $’000
Ultimate Holding Company
Revenue from sale of products and provision of services 108 319
Related Corporations
Revenue from sale of products and provision of services 130,685 176,800
Purchase of products and services 33,318 3,209
Rental and warehouse expenses 110 178
Telecommunication services received 1,915 3,397
Key Management
Short-term employment benefits
– Directors 383 366
– Other key management personnel 1,991 2,221
Share-based payments
– Other key management personnel 162 115
2,536 2,702
28 Operating segments
The Group has 3 reportable segments, as described below, which are the Group’s strategic business units.
The strategic business units offer different products and services, and are managed separately because they
required different marketing and technical expertise. For each of the strategic business units, the Group’s
President reviews internal management reports on a monthly basis. The following describes the operations
in each of the Group’s reportable segments:
• Personal Communications Solutions Services (PCS): This division provides distribution, fulfilment
and supply chain management services relating to mobile handsets and accessories. It is a distributor
for major principals such as Nokia, Samsung, Sony Ericsson, LG and Motorola with a distribution
network which comprises authorised dealers, local retailers and convenience chain stores such as
7-Eleven, NTUC and Cheers. It is a distributor of StarHub prepaid cards and the master distributor in
sixteen countries for VERTIX advanced consumer electronic products. In addition to distribution, it
offers the entire spectrum of fulfilment and supply chain management services, including forecasting,
purchasing, financing, logistics, warehousing and inventory support to roadshow management, retail
customer-premises equipment (“CPE”) stocks management, and after sales service. As a handsets
and accessories retailer, its subsidiary, Planet Telecoms, owns and operates a network of stores in
strategic locations in Singapore. It also manages concept stores for LG, Nokia, Samsung and Sony
Ericsson and is the first and only StarHub Exclusive Partner to manage two full-fledge StarHub
Platinum Shops at IMM shopping mall and Sembawang MRT station.
In presenting information on the basis of geographical segments, segment revenue is based on the
geographical location of customers. Segment assets are based on the geographical location of assets.
Group
2009 2008
$’000 $’000
Revenue
Total revenue for reportable segments 273,709 354,037
Elimination of inter-segment revenue (19) (22)
Profit or loss
Total profit or loss for reportable segments 13,385 17,054
Share of profit of associate and jointly-controlled entity 256 1,142
Assets
Total assets for reportable segments 103,375 107,834
Investments in associate and jointly-controlled entity 1,248 941
Liabilities
Total liabilities for reportable segments 34,992 42,917
Reportable Consolidated
segment totals Adjustments totals
$’000 $’000 $’000
Government grant income from Jobs
Credit Scheme (719) – (719)
Interest income (233) 135 (98)
Interest expenses 312 (135) 177
Capital expenditure
– property, plant and equipment 1,566 – 1,566
– intangible assets 76 – 76
Impairment loss on goodwill 22 – 22
Geographical information
Non-current
Revenue Assets
$’000 $’000
31 December 2009
Singapore 220,646 1,838
Indonesia 21,511 523
Malaysia 196 6
Hong Kong 30,692 –
Dubai 266 –
Other countries 379 –
Consolidated total 273,690 2,367
31 December 2008
Singapore 300,361 1,730
Indonesia 20,208 273
Malaysia 1,511 1
Hong Kong 30,544 –
Dubai 397 –
Other countries 994 –
Consolidated total 354,015 2,004
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails
to meet its contractual obligations, and arises principally from the Group’s receivables from customers.
The Group has a credit policy under which each new customer is analysed individually for creditworthiness
before the Group’s standard payment and delivery terms and conditions are offered. The Group’s review
includes external ratings, where available, and in some cases bank references. Otherwise, the credit quality
of customers is assessed after taking account its financial position and past experience with the customers.
Credit exposure to customers is restricted by credit limits that are approved by the Credit Control Committee
at the entity level and the continuous monitoring by the Committee.
In monitoring customer credit risk, customers are grouped according to their credit characteristics, including
whether they are an individual or legal entity, whether they are a MNCs, wholesale, retail or end-user
customer, geographic location, industry, aging profile, maturity and existence of previous financial difficulties.
Trade and other receivables relate mainly to the Group’s related parties.
The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect
of trade and other receivables. The main components of this allowance are a specific loss component that
relates to individually significant exposures, and a collective loss component established for groups of similar
assets in respect of losses that have been incurred but not yet identified. The collective loss allowance is
determined based on historical data of payment statistics for similar financial assets.
There are no other significant concentrations of credit risk. The maximum exposure to credit risk is
represented by the carrying amount of each financial asset in the balance sheet.
Management monitors cash flow requirements through regular cash flow forecast carried out at the operating
companies’ level in accordance with the working capital requirement. The Group sets asset productivity
targets which vary by entity and location taking into consideration the business environment that the entity
operates in. Asset productivity targets used are debtor and inventory turnover days.
Cash and fixed deposits are placed with banks and financial institutions which are regulated. As at 31
December 2009, 49% (2008: 30%) of cash and fixed deposits are placed with a bank.
In addition, the Group maintains total lines of credit of $39 million (2008: $44 million) for short-term loans
and working capital line facilities, at a margin over cost of funds.
Effective Within
interest 1 year
% $’000
Group
2009
Financial assets
Cash at bank – 21,464
Short-term bank deposits 0.05 to 0.63 25,178
Financial liabilities
Unsecured bank loans 2.39 3,000
2008
Financial assets
Cash at bank – 14,158
Short-term bank deposits 0.25 to 0.87 28,451
Financial liabilities
Unsecured bank loans 2.88 to 3.25 5,000
2009
Financial assets
Cash at bank – 13,922
Short-term bank deposits 0.2 to 0.63 16,000
Financial liabilities
Unsecured bank loan 2.39 3,000
2008
Financial assets
Cash at bank – 5,789
Short-term bank deposits 0.33 to 0.7 20,000
Financial liabilities
Unsecured bank loan 2.88 3,000
Sensitivity analysis
The Group’s borrowings and short-term deposits at variable rates on which effective hedges have not been
entered into, are denominated mainly in Singapore Dollars. If the interest rates increase/(decrease) by 100
basis point with all other variables being held constant, the profit before tax will be higher by the amounts
shown below.
Income statement
100 bp 100 bp
increase decrease
Group $’000 $’000
31 December 2009
Short-term bank deposits 252 (252)
Borrowings (30) 30
222 (222)
31 December 2008
Short-term bank deposits 285 (285)
Borrowings (50) 50
235 (235)
The Group’s investments and long-term loan to its subsidiaries are not hedged as those currency positions
are considered to be long-term in nature.
The Group’s and Company’s exposure to foreign currency other than the functional currency of the Company
and its subsidiaries are as follows:
USD HKD
$’000 $’000
31 December 2009
Group
Trade and other receivables 2,143 –
Cash and cash equivalents 1,197 –
Trade and other payables (1,084) –
Net exposure 2,256 –
Company
Cash and cash equivalents 102 –
Net exposure 102 –
31 December 2008
Group
Trade and other receivables 4,520 10,606
Cash and cash equivalents 1,847 –
Trade and other payables (1,171) –
Net exposure 5,196 10,606
Company
Trade and other receivables – 10,606
Cash and cash equivalents 40 –
Net exposure 40 10,606
Income statement
Group Company
$’000 $’000
31 December 2009
USD 226 10
31 December 2008
USD 520 4
HKD 1,061 1,061
A 10 percent weakening of the above currencies against Singapore Dollar at 31 December would have had
the equal but opposite effect on the above currencies to the amounts shown above, on the basis that all
other variables remain constant.
30 Commitments
The Group leases an office, a warehouse and a number of retail outlets under operating leases. The leases
typically run for an initial period of two to three years, with an option to renew the lease after that date.
Lease payments are usually increased annually to reflect market rentals.
At 31 December 2009, the Group and the Company have commitments for future minimum lease payments
under non-cancellable operating leases as follows:
Group Company
2009 2008 2009 2008
$’000 $’000 $’000 $’000
Payable:
Within 1 year 1,690 2,259 802 802
After 1 year but within 5 years 647 1,980 334 1,137
2,337 4,239 1,136 1,939
31 Corporate guarantee
The Group has provided the following guarantees to third parties during the financial year:
32 Subsequent events
Subsequent to the balance sheet date, the directors proposed a final dividend of 1.75 cents per ordinary share
(one-tier tax exempt) in respect of financial year ended 31 December 2009. The final dividend amounting to
approximately $7,933,000 has not been recognised as at year end and is subject to shareholders’ approval
at the forthcoming Annual General Meeting of the Company in 2010.
• FRS 103 (revised 2008) Business Combinations and FRS 27 (amended) Separate and Consolidated
Financial Statements
Improvements to FRSs 2009 contain amendments to numerous accounting standards that result in accounting
changes for presentation, recognition or measurement and disclosure purposes. The Group is in the process
of assessing the impact of these amendments.
Other than improvements to FRSs 2009, the initial application of these standards (and its consequential
amendments) and interpretations is not expected to have any material impact on the Group’s financial
statements. The Group has not considered the impact of accounting standards issued after the balance
sheet date.
1 Directors’ Remuneration
Company’s directors receiving remuneration from the Group (other than Directors’ Fee & Benefits for
Non-Executive Directors)
Number of directors
2009 2008
$’000 $’000
Remuneration of:
3 Material Contracts
There was no material contract entered into or still subsisting at the end of the financial year, for the purpose
of Rule 1207(8) of the SGX Listing Manual.
ANALYSIS OF SHAREHOLDINGS
TOP 20 SHAREHOLDERS
* The percentage of shareholdings was computed based on the issued share capital of the Company as at 15
March 2010 of 453,227,000 shares (which excludes 87,500 shares which are held as treasury shares representing
approximately 0.02% of the total number of issued shares excluding treasury shares).
SUBSTANTIAL SHAREHOLDERS
(As recorded in the Register of Substantial Shareholders)
Notes:
(1) Lim Chai Hock Clive and his wife, Michelle Ho Li Ann own in aggregate 92% of the interest in Leap
International Pte Ltd. Lim Chai Hock Clive holds a total (direct and deemed) interest in 89,498,000 shares,
representing 19.75% of the issued share capital of the Company.
(2) Michelle Ho Li Ann is the spouse of Lim Chai Hock Clive. Accordingly, Michelle Ho Li Ann is deemed
interested in the shares held by Lim Chai Hock Clive.
(3) STT Communications Ltd (“STTC”) is a subsidiary of Singapore Technologies Telemedia Pte Ltd (“STT”),
which is a wholly-owned subsidiary of Temasek Holdings (Private) Limited (“Temasek”). Temasek and STT
are deemed to be interested in the 228,937,500 shares held by STTC by virtue of Section 7 of the Companies
Act (Cap. 50).
(4) The percentage of shareholdings was computed based on the issued share capital of the Company as at 15
March 2010 of 453,227,000 shares (which excludes 87,500 shares which are held as treasury shares as at
that date).
Based on information available to the Company, approximately 29.46% of the issued share capital of the Company
listed on the Singapore Exchange Securities Trading Limited (excluding 87,500 shares which are held as treasury
shares) were held in the hands of the public. Therefore the Company has complied with Rule 723 of the Listing
Manual.
92.1%
Planet Telecoms (S) Pte Ltd
100% 99%
TeleChoice (Indonesia) Pte Ltd PT TeleChoice (Indonesia)
1%
49%
TeleChoice (Thailand) Ltd* * 51% held in trust by Promyos Snitwongse
80%
TeleChoice Philippines Inc
Network Engineering
100% 99.99%
NexWave Technologies Pte Ltd PT NexWave
0.01%
100%
N-Wave Technologies (Malaysia) Sdn Bhd
Telecommunications
100%
SunPage Communications Pte Ltd
100%
NexWave Telecoms Pte. Ltd.
100%
N-Wave Telecoms (Malaysia) Sdn Bhd
100%
NexWave Solutions Pte. Ltd.
49%
PT Sakalaguna Semesta
* Effective interest held by TeleChoice International Limited in TeleChoice (Thailand) Ltd is 100%.
NOTICE IS HEREBY GIVEN that the Twelfth Annual General Meeting of TeleChoice International Limited (the
“Company”) will be held at Violet Room @ The Chevrons 48 Boon Lay Way 3rd Storey Singapore 609961 on 28
April 2010 at 10.30 a.m. to transact the following business:
AS ORDINARY BUSINESS
1. To receive and adopt the Audited Accounts for the financial year ended 31 December Resolution 1
2009 and the Directors’ and Auditors’ Report thereon.
2. To declare a final tax exempt (one-tier) dividend of 1.75 cents per ordinary share in the Resolution 2
capital of the Company (“Share”), for the financial year ended 31 December 2009.
3. That pursuant to Section 153(6) of the Companies Act (Cap. 50) (the “Companies Act”), Resolution 3
Mr Bertie Cheng be and is hereby re-appointed as a Director to hold such office until
the next Annual General Meeting of the Company.
4. To re-elect Mr Yen Se-Hua Stewart, who is retiring in accordance with Article 91 of the Resolution 4
Articles of Association of the Company.
5. To re-elect Mr Tang Yew Kay Jackson, who is retiring in accordance with Article 91 of Resolution 5
the Articles of Association of the Company.
6. To approve Directors’ Fees of $383,000 for the financial year ended 31 December Resolution 6
2009.
(Directors’ Fees for the financial year ended 31 December 2008: $386,000. Directors’
Fees for the financial year ended 31 December 2007: $420,000).
7. To re-appoint KPMG LLP as auditors of the Company and to authorise the Directors to Resolution 7
fix their remuneration.
AS SPECIAL BUSINESS
To consider and, if thought fit, to pass the following resolutions as Ordinary Resolutions:
(a) (i) issue Shares whether by way of rights, bonus or otherwise; and/or
at any time and upon such terms and conditions and for such purposes and to
such persons as the Directors may in their absolute discretion deem fit; and
(b) (notwithstanding the authority conferred by this Resolution may have ceased to
be in force) issue Shares in pursuance of any Instrument made or granted by the
Directors while this Resolution was in force,
provided that:
(i) the aggregate number of Shares to be issued pursuant to this Resolution (including
Shares to be issued in pursuance of Instruments made or granted pursuant to this
Resolution), does not exceed 50% of the issued Shares (excluding treasury shares)
in the capital of the Company (as calculated in accordance with sub-paragraph 8(ii)
below), of which the aggregate number of Shares to be issued other than on a
pro rata basis to shareholders of the Company (including Shares to be issued in
pursuance of Instruments made or granted pursuant to this Resolution) does not
exceed 20% of the issued Shares (excluding treasury shares) in the capital of the
Company (as calculated in accordance with sub-paragraph 8(ii) below);
(iii) in exercising the authority conferred by this Resolution, the Company shall comply
with the provisions of the Listing Manual of the SGX-ST for the time being in
force (unless such compliance has been waived by the SGX-ST) and the Articles
of Association for the time being of the Company; and
(iv) (unless revoked or varied by the Company in General Meeting) the authority
conferred by this Resolution shall continue in force until the conclusion of the next
Annual General Meeting of the Company or the date by which the next Annual
General Meeting of the Company is required by law to be held, whichever is the
earlier.
9. That authority be and is hereby given to the Directors to allot and issue from time to Resolution 9
time such number of Shares in the Company as may be required to be allotted and
issued pursuant to the exercise of options under the TeleChoice Pre-IPO Share Option
Scheme (“Pre-IPO Scheme”), provided that (i) the aggregate number of Shares to be
issued pursuant to the Pre-IPO Scheme does not exceed 20,000,000 Shares, and (ii)
the aggregate number of Shares to be issued under all of the share option plans and
share incentive schemes of the Company in force, does not exceed 15% of the total
number of issued Shares in the capital of the Company (excluding treasury shares) from
time to time.
10. That authority be and is hereby given to the Directors to: Resolution 10
(a) offer and grant options in accordance with the rules and terms of the TeleChoice
Post-IPO Employee Share Option Scheme (“Post-IPO Scheme”) and/or to grant
awards in accordance with the rules and terms of the TeleChoice Restricted Share
Plan (the “Restricted Share Plan”) and/or the TeleChoice Performance Share
Plan (the “Performance Share Plan”) (the Post-IPO Scheme, the Restricted
Share Plan and the Performance Share Plan shall collectively be referred to as
the “Share Plans”); and
(b) allot and issue from time to time such number of Shares in the capital of the
Company as may be required to be allotted and issued pursuant to the exercise
of options under the Post-IPO Scheme and/or such number of fully paid Shares in
the capital of the Company as may be required to be allotted and issued pursuant
to the vesting of the awards granted under the Restricted Share Plan and/or the
Performance Share Plan,
provided that the aggregate number of Shares to be issued under the Pre-IPO Scheme
and the Share Plans shall not exceed 15% of the total number of issued Shares in the
capital of the Company (excluding treasury shares) from time to time.
(a) approval be and is hereby given, for the purposes of Chapter 9 of the Listing
Manual (“Chapter 9”) of SGX-ST, for the Company, its subsidiaries and associated
companies that are entities at risk (as that term is used in Chapter 9), or any of
them, to enter into any of the transactions falling within the types of interested
person transactions described in the Annexure to the Appendix to the Annual
Report dated 13 April 2010 (the “Appendix”) with any party who is of the class
of interested persons described in the Annexure to the Appendix, provided that
such transactions are made on normal commercial terms and in accordance with
the review procedures for such interested person transactions;
(b) the approval given in sub-paragraph 11(a) above (the “Shareholders’ Mandate”)
shall, unless revoked or varied by the Company in general meeting, continue in
force until the conclusion of the next Annual General Meeting of the Company;
and
(c) the Directors of the Company be and are hereby authorised to complete and do all
such acts and things (including executing all such documents as may be required)
as they may consider expedient or necessary or in the interests of the Company
to give effect to the Shareholders’ Mandate and/or this Resolution.
(a) for the purposes of Sections 76C and 76E of the Companies Act, the exercise by
the Directors of the Company of all the powers of the Company to purchase or
otherwise acquire issued Shares in the capital of the Company not exceeding in
aggregate the Maximum Limit (as defined in sub-paragraph 12(c) below), at such
price or prices as may be determined by the Directors from time to time up to
the Maximum Price (as defined in sub-paragraph 12(c) below), whether by way
of:
(i) market purchase(s) on the SGX-ST through the SGX-ST’s trading system
and/or any other securities exchange (“Other Exchange”) on which the
Shares may for the time being be listed and quoted (“Market Purchases”);
and/or
(ii) off-market purchase(s) (if effected otherwise than on the SGX-ST or, as
the case may be, Other Exchange) in accordance with any equal access
scheme(s) as may be determined or formulated by the Directors as they
consider fit, which scheme(s) shall satisfy all the conditions prescribed by
the Companies Act (“Off-Market Purchases”),
and otherwise in accordance with all other laws and regulations and rules of the
SGX-ST or, as the case may be, Other Exchange as may for the time being be
applicable, be and is hereby authorised and approved generally and unconditionally
(the “Share Purchase Mandate”);
(b) unless varied or revoked by the Company in general meeting, the authority
conferred on the Directors of the Company pursuant to the Share Purchase
Mandate may be exercised by the Directors at any time and from time to time
during the period commencing from the date of the passing of this Resolution
and expiring on the earlier of:
(i) the date on which the next Annual General Meeting of the Company is
held; or
(ii) the date by which the next Annual General Meeting of the Company is
required by law to be held;
“Average Closing Price” means the average of the last dealt prices of a Share
for the last five consecutive Market Days (as defined in sub-paragraph 12(c)
below) on which the Shares are transacted on the SGX-ST or, as the case may
be, Other Exchange, immediately preceding the date of the Market Purchase by
the Company or, as the case may be, the date of the making of the offer pursuant
to the Off-Market Purchase, and deemed to be adjusted in accordance with the
listing rules of the SGX-ST, or as the case may be, Other Exchange, for any
corporate action which occurs after the relevant five Market Day period;
“date of the making of the offer” means the date on which the Company
announces its intention to make an offer for an Off-Market Purchase, stating
the purchase price (which shall not be more than 110% of the Average Closing
Price of the Shares (excluding related expenses of the purchase or acquisition))
for each Share, and the relevant terms of the equal access scheme for effecting
the Off-Market Purchase;
“Market Day” means a day on which the SGX-ST, or as the case may be, Other
Exchange is open for trading in securities;
“Maximum Limit” means that number of issued Shares representing 10% of the
issued ordinary Share in the capital of the Company as at the date of the passing
of this Resolution (excluding any Shares which are held as treasury shares as at
that date); and
(i) in the case of a market purchase of a Share, 105% of the Average Closing
Price of the Shares; and
(d) the Directors of the Company and/or any of them be and are hereby authorised to
complete and do all such acts and things (including executing such documents as
may be required) as they and/or he may consider expedient or necessary to give
effect to the transactions contemplated and/or authorised by this Resolution.
OTHER BUSINESS
13. To transact any other business that may be transacted at an Annual General Meeting of the Company.
Notes:
1. A member of the Company entitled to attend and vote at the Annual General Meeting is entitled to appoint
not more than two proxies to attend and vote in his stead.
3. The instrument appointing a proxy must be deposited at the Company’s registered office at 51 Cuppage
Road #09-01 StarHub Centre Singapore 229469 (Attention: The Company Secretary) not later than 48 hours
before the time appointed for the Annual General Meeting.
Duly completed transfers received by the Company’s Registrar, M & C Services Private Limited, 138 Robinson Road
#17-00 The Corporate Office Singapore 068906, up to 5.00 p.m. on 5 May 2010 (the “Entitlement Date”) will be
registered to determine shareholders’ entitlement to the proposed final dividend. Subject as aforesaid, persons
whose securities accounts with The Central Depository (Pte) Limited are credited with ordinary shares in the capital
of the Company as at 5.00 p.m. on the Entitlement Date, will be entitled to the proposed final dividend.
The proposed final dividend, if approved by shareholders of the Company, will be paid on 20 May 2010.
EXPLANATORY NOTES:
(a) Ordinary Resolution No. 3 is to approve the re-appointment of Mr Bertie Cheng as a Director to hold such
office until the next annual general meeting of the Company pursuant to Section 153(6) of the Companies
Act (Cap. 50). Upon his re-appointment, Mr Cheng, who is considered independent, will remain as the
Chairman of the Board of Directors of the Company and, as the Chairman of the Executive Committee and
the Remuneration Committee of the Company.
(b) Ordinary Resolution No. 4 is to approve the re-election of Mr Yen Se-Hua Stewart, who is retiring by rotation,
in accordance with Article 91 of the Articles of Association of the Company. Upon his re-election, Mr Yen,
who is considered independent, will remain as the Chairman of the Nominating Committee of the Company
and, as a member of the Remuneration Committee and the Executive Committee of the Company.
(c) Ordinary Resolution No. 5 is to approve the re-election of Mr Tang Yew Kay Jackson, who is retiring by
rotation, in accordance with Article 91 of the Articles of Association of the Company. Upon his re-election,
Mr Tang, who is considered independent for purposes of Rule 704(8) of the Listing Manual, will remain as
a member of the Audit Committee of the Company.
(d) Ordinary Resolution No. 8 is to authorise the Directors to issue Shares in the capital of the Company and to
make or grant instruments (such as warrants or debentures) convertible into Shares, and to issue Shares in
pursuance of such instruments, up to an amount not exceeding in total 50% of the issued Shares (excluding
treasury shares) in the capital of the Company, with a sub-limit of 20% for issues other than on a pro rata
basis to shareholders. For the purpose of determining the aggregate number of Shares that may be issued,
the percentage of issued share capital shall be based on the issued share capital of the Company at the
time that Ordinary Resolution No. 8 is passed, after adjusting for (a) new Shares arising from the conversion
or exercise of any convertible securities or share options or vesting of share awards which are outstanding
or subsisting at the time that Ordinary Resolution No. 8 is passed, and (b) any subsequent bonus issue,
consolidation or subdivision of Shares.
(e) Ordinary Resolution No. 9 is to authorise the Directors to allot and issue Shares in the Company pursuant to
the exercise of options granted under the TeleChoice Pre-IPO Share Option Scheme (“Pre-IPO Scheme”).
The Pre-IPO Scheme was adopted at an Extraordinary General Meeting of the Company on 7 May 2004. On
12 May 2004, pursuant to the Pre-IPO Scheme, the Company granted share options to eligible participants,
to subscribe for an aggregate of 20,000,000 Shares. Details of the Pre-IPO Scheme are set out in the
Company’s prospectus dated 16 June 2004.
(f) Ordinary Resolution No. 10 is to authorise the Directors to offer and grant options and/or grant awards and to
allot and issue Shares in the capital of the Company in accordance with the rules and terms of the TeleChoice
Post-IPO Employee Share Option Scheme (“Post-IPO Scheme”), the TeleChoice Restricted Share Plan
(the “Restricted Share Plan”) and/or the TeleChoice Performance Share Plan (the “Performance Share
Plan”) (the Post-IPO Scheme, the Restricted Share Plan and the Performance Share Plan shall collectively
be referred to as the “Share Plans”), provided that the aggregate number of Shares to be allotted and
issued pursuant to the Pre-IPO Scheme and the Share Plans shall not exceed 15% of the total number of
issued Shares in the capital of the Company (excluding treasury shares) from time to time. The Post-IPO
Scheme was adopted at the Extraordinary General Meeting of the Company held on 7 May 2004. Details
of the Post-IPO Scheme are set out in the Company’s prospectus dated 16 June 2004. The Restricted
Share Plan and the Performance Share Plan were adopted by the shareholders of the Company at the
Extraordinary General Meeting of the Company held on 27 April 2007. Details of the Restricted Share Plan
and the Performance Share Plan are set out in the Company’s circular to shareholders dated 11 April 2007.
The grant of options and/or awards under the respective Share Plans will be made in accordance with their
respective provisions.
(g) Ordinary Resolution No. 11 is to renew the mandate to allow the Company, its subsidiaries and its associated
companies that are entities at risk or any of them to enter into certain interested person transactions with
certain classes of interested persons as described in the Annexure to the Appendix to the Annual Report
dated 13 April 2010 (the “Appendix”). The authority will, unless revoked or varied by the Company in general
meeting, continue in force until the conclusion of the next annual general meeting of the Company.
(h) Ordinary Resolution No. 12 is to renew the mandate to allow the Company to purchase or acquire
issued ordinary Shares in the capital of the Company on the terms and subject to the conditions of the
Resolution.
The Company may use internal resources or external borrowings or a combination of both to fund the
purchases or acquisitions of Shares pursuant to the proposed Share Purchase Mandate. The amount of
financing required for the Company to purchase or acquire its Shares, and the impact on the financial position
of the Company, cannot be ascertained as at the date of this Notice as these will depend on the number of
Shares purchased or acquired and the price at which such Shares were purchased or acquired.
The financial effects of the purchase or acquisition of such Shares by the Company pursuant to the proposed
Share Purchase Mandate on the audited financial statements of the Company and the Company and its
subsidiaries for the financial year ended 31 December 2009, based on certain assumptions, are set out in
paragraph 3.7.3 of the Letter to Shareholders in the Appendix.
of (Address)
Proportion of Shareholdings
NRIC/Passport
Name Address Number No. of shares %
as my/our proxy/proxies to attend and to vote for me/us on my/our behalf and, if necessary, to demand a poll, at the Twelfth
Annual General Meeting of the Company to be held on 28 April 2010 at Violet Room @ The Chevrons 48 Boon Lay Way 3rd Storey
Singapore 609961 at 10.30 a.m. and at any adjournment thereof.
(Please indicate with an “X” in the spaces provided whether you wish your vote(s) to be cast for or against the Resolutions as
set out in the Notice of Annual General Meeting. In the absence of specific directions, the proxy/proxies will vote or abstain as
he/they may think fit, as he/they will on any other matter arising at the Annual General Meeting.)
Signature(s) or Common Seal of Member(s)
Notes:
1. Please insert the total number of shares held by you. If you have shares entered against your name in the Depository Register
(as defined in Section 130A of the Companies Act, Cap. 50 of Singapore), you should insert that number of shares. If you have
shares registered in your name in the Register of Members, you should insert that number of shares. If you have shares entered
against your name in the Depository Register and shares registered in your name in the Register of Members, you should insert
the aggregate number of shares entered against your name in the Depository Register and registered in your name in the Register
of Members. If no number is inserted, the instrument appointing a proxy or proxies shall be deemed to relate to all the shares
held by you.
2. A member of the Company entitled to attend and vote at a meeting of the Company is entitled to appoint one or two proxies to
attend and vote in his stead. A proxy need not be a member of the Company.
3. Where a member appoints two proxies, the appointments shall be invalid unless he specifies the proportion of his shareholding
to be represented by each proxy.
4. The instrument appointing a proxy or proxies must be deposited at the registered office of the Company at 51 Cuppage Road
#09-01, StarHub Centre, Singapore 229469 (Attn: Company Secretary) not less than 48 hours before the time appointed for the
Annual General Meeting.
5. The instrument appointing a proxy or proxies must be under the hand of the appointor or of his attorney duly authorised in
writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its
seal or under the hand of an officer or attorney duly authorised. Where an instrument appointing a proxy is signed on behalf of
the appointor by an attorney, the letter or power of attorney or a duly certified copy thereof must (failing previous registration
with the Company) be lodged with the instrument of proxy, failing which the instrument may be treated as invalid.
6. A corporation which is a member may authorise by resolution of its directors or other governing body such person as it thinks
fit to act as its representative at the Annual General Meeting, in accordance with Section 179 of the Companies Act, Cap. 50 of
Singapore.
7. The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, improperly completed
or illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified in
the instrument appointing a proxy or proxies. In addition, in the case of members whose shares are entered against their names
in the Depository Register, the Company may reject any instrument appointing a proxy or proxies lodged if such members are
not shown to have shares entered against their names in the Depository Register as at 48 hours before the time appointed for
holding the Annual General Meeting, as certified by The Central Depository (Pte) Limited to the Company.
Affix
Postage
Stamp
TeleChoice’s three business divisions collectively offer a comprehensive suite of services and
solutions for the telecommunications industry:
Personal Communications and is the first and only StarHub Services. These services are branded
Solutions Services Exclusive Partner to manage two and marketed under the recognised
full-fledge StarHub Platinum Shops at “SunPage” suite of call services
This division provides distribution, IMM shopping mall and Sembawang and solutions, including the popular
fulfilment and supply chain MRT station. “SunPage iDD 1521” which reaches
management services relating to over 300 destinations and the pre-
mobile handsets and accessories. Telecommunications paid “SunPage International Calling
It is a distributor for major principals Services Card”, distributed at retail locations
such as Nokia, Samsung, Sony throughout Singapore.
Ericsson, LG and Motorola with a This division operates under
distribution network which comprises wholly-owned subsidiary, Nexwave Network Engineering
authorised dealers, local retailers and Telecoms Pte. Ltd. (“Nexwave Services
convenience chain stores such as Telecoms”) (formerly known as
7-Eleven, NTUC and Cheers. It is a ST SunPage Pte Ltd). Nexwave This division, through wholly-owned
distributor of StarHub prepaid cards Telecoms provides next generation subsidiary, Nexwave Technologies
and the master distributor in sixteen communications and application Pte Ltd, is a regional value-add
countries for VERTIX advanced solutions. An integrated provider product aggregator and total
consumer electronic products. In of hosted IP telephony and cloud solutions provider to mobile and
addition to distribution, it offers the computing applications, it offers a fixed network operators, equipment
entire spectrum of fulfilment and suite of Unified Communications as- vendors and service providers in the
supply chain management services, a-Service (“UCaaS”) and Software- Asia-Pacific. Its network engineering
including forecasting, purchasing, as-a-Service solutions (“SaaS”) solutions and services encompass
financing, logistics, warehousing with next generation platform and radio network planning and
and inventory support to roadshow on-premises solutions supported optimisation, transmission network
management, retail customer- by leading technology partners planning, network implementation,
premises equipment (“CPE”) such as Avaya, Aruba, Aastra, HP, testing and commissioning, indoor
stocks management, and after Google and Microsoft. Aside from coverage design and implementation,
sales service. As a handsets and its enterprise-focused solutions, it network benchmarking and audit,
accessories retailer, its subsidiary, is a leading voice and data services operations, maintenance and project
Planet Telecoms, owns and operates provider offering a full range of IDD, management.
a network of stores in strategic Roaming and Callback services,
locations in Singapore. It also Conferencing solutions, SMS For more information, please visit
manages concept stores for LG, Messaging and Paging, Location our website www.telechoice.com.sg
Nokia, Samsung and Sony Ericsson Tracking and Mobile Data Network
CONTENTS
01 Financial Highlights 08 Executive Management 13 Corporate Information
02 Letter to Shareholders 10 Operations Review 14 Corporate Governance
04 Board of Directors 12 Planet Telecoms Touch-points 22 Financial Contents
TE LEC HO ICE INTERN ATION AL LIMITED AN NU AL R EPOR T 2 0 09
INNOVATION CATALYST
T E L E C H O I C E I N T E R N AT I O N A L L I M I T E D
ANNUAL REPORT 2009
TeleChoice International Limited
5 Clementi Loop Level 2M
Singapore 129816
www.telechoice.com.sg
Tel : 65 6849 4000
Fax : 65 6849 4012
Company Registration No. 199802072R