Telechoice International Limited Annual Report 2009

TeleChoiCe inTernaTional limiTed5 Clementi loop level 2m

Singapore 129816www.telechoice.com.sg

Tel : 65 6849 4000Fax : 65 6849 4012

Company registration no. 199802072r

INNOVATION CATALYSTA N N U A L R E P O R T 2 0 0 9

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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 solutions serviCes

This division provides distribution, fulfi lment 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.

t e l e C o m m u n i C a t i o n s serviCes

This division operates under wholly-owned subsidiary, nexwave Telecoms Pte. ltd. (“nexwave Telecoms”) (formerly known as ST SunPage Pte ltd). nexwave Telecoms provides next generation communications and application solutions. an integrated provider of hosted iP telephony and cloud computing applications, it offers a suite of Unified Communications as-a-Service (“UCaaS”) and Software-as-a-Service solutions (“SaaS”) with next generation platform and on-premises solutions supported by leading technology partners such as avaya, aruba, aastra, hP, Google and microsoft. aside from its enterprise-focused solutions, it is a leading voice and data services provider offering a full range of idd, roaming and Callback services, Conferencing solutions, SmS messaging and Paging, location Tracking and mobile data network

Services. These services are branded and marketed under the recognised “SunPage” suite of call services and solutions, including the popular “SunPage idd 1521” which reaches over 300 destinations and the pre-paid “SunPage international Calling Card”, distributed at retail locations throughout Singapore.

network engineering serviCes

This division, through wholly-owned subsidiary, nexwave Technologies Pte ltd, is a regional value-add product aggregator and total solutions provider to mobile and fixed network operators, equipment vendors and service providers in the asia-Pacific. its network engineering solutions and services encompass radio network planning and optimisation, transmission network planning, network implementation, testing and commissioning, indoor coverage design and implementation, network benchmarking and audit, operations, maintenance and project management.

For more information, please visit our website www.telechoice.com.sg

CONTENTS01 Financial highlights

02 letter to Shareholders

04 Board of directors

08 executive management

10 operations review

12 Planet Telecoms Touch-points

13 Corporate information

14 Corporate Governance

22 Financial Contents

FINANCIAL HIGHLIGHTS

pbt

patmi

11.6 8.3 2.4 22.3Fy2006

17.2

REVENUE (S$ mILLIoN) EARNINGS (S$ mILLIoN)

Fy2009 273.7

217.

3

15.4

41.0

291.

5

21.7

40.8 354.0Fy2008

345.

2

23.8

51.4 420.4Fy2007

395.

5

29.9

34.4 459.8Fy2006

498.

6

27.1

44.2 569.9Fy2005

pCS telecoms Engineering

ToTAL ASSETS (S$ mILLIoN)

Fy2009 104.6

48.0

25.0 29.2 46.6 3.8

42.644.918.1 3.2

62.1 25.0

6.928.948.718.9

21.4 53.7 44.6 5.3

14.7

108.8

149.8

103.4

125.0

Fy2008

Fy2007

Fy2006

Fy2005

inventories & Wip

trade and other receivables

Cash and cash equivalents

Non-current assets

8.8 6.7 1.7

pbt

patmi

10.0 6.6 4.9 21.5Fy2005

8.2 5.7 3.8 17.7

pbt

patmi

11.3 4.3 2.2 17.8Fy2007

9.0 3.5 1.7 14.2

pbt

patmi

12.9 2.2 3.1 18.2Fy2008

10.5 1.4 2.3 14.2

pbt

patmi

10.3 1.4 1.9 13.6Fy2009

8.7 1.3 11.41.4

DIVIDENDS DECLARED AGAINST PATmI(S$ mILLIoN)

SHAREHoLDERS’ EQUITy (NET oF mI)

54.9

20.1

17.2

14.2 14.2

11.4

56.5

64.6 65.969.6

Fy2009Fy2008Fy2007Fy2006Fy2005Fy2009Fy2008Fy2007Fy2006Fy2005

patmi Dividend declaredShareholders’ Equity, net of minority interest (S$ million)

Net assets Value per ordinary share (cents)

12.32 12.5514.30 14.53 15.36

17.7

11.3 11.3

9.17.9

TELECHOICE INTERNATIONAL LIMITED ANNuAL REpORT 20092

Dear Shareholders

The regional economies faced great uncertainty and recession in 2009. Globally, the outlook for the mobile handset market was gloomy with manufacturers cutting jobs at the beginning of the year due to falling consumer and business confidence. Locally, the drop in consumer demand and business spending adversely affected the mobile handset business, IDD and mobile data usage. There was also a marked decrease in spending on telecommunications and IT services amongst enterprises. Cutbacks by regional telecommunications operators on their planned capital expenditures also negatively impacted network engineering activities.

Nevertheless, TeleChoice performed credibly in 2009 despite this tough operating environment. Aided by the Government Jobs Credit Scheme, our cost control actions enabled us to remain profitable in spite of the expected severe decrease in revenue in the first half of the year. Our strong cash position was maintained as we closely managed our working capital. The second half of 2009 saw revenue and earnings steadily improve as market demand started to recover.

FY2009 Financial PerFormance

For the year ended 31 December 2009 (“FY2009”), revenue was at S$273.7 million, a 23% decrease over FY2008’s revenue. The decrease was attributed to weaker personal Communications Solutions (“pCS”) Services’ sales and lower revenue contribution from Telecommunications Services. Group pBT decreased by 25% to S$13.6 million in FY2009 on account of the lower revenue offset by lower operating expenses. Consequently, net income fell by 20% to S$11.4 million. We maintained a healthy cash position of S$46.6 million as at 31 December 2009. Earnings per share stood at 2.51 cents while net asset value per share was 15.36 cents.

exPanding, TransForming, evolving For growTh

pCS Services fortified its business relationships and expanded its product and service offerings during the course of the year. In April 2009, pCS Services was appointed to distribute StarHub prepaid cards. This has further strengthened the business partnership with StarHub as well as generated additional earnings for the business unit. pCS Services also signed a new two-year contract to continue providing StarHub with integrated fulfilment and supply chain management services.

The Group also expanded its range of product and service offerings by leveraging on opportunities in the global mobile handset accessories market. pCS Services was appointed master distributor in 16 countries by Xtreme-DSp Global pte Ltd for its advanced consumer electronic products. The first product to be distributed is the VERTIX-branded Vantage VX1, a high performance Bluetooth headset with dynamic noise cancellation capabilities.

Telecommunications Services is entering a transformation phase to be a next generation communications and application solutions provider. The economic crisis has accelerated the changes in information and communications technology spending. Enterprises are constantly looking for more efficient and flexible “pay-as-you-use” IT infrastructure models to reduce capital expenditure (“CApEX”). With the emerging trend for cloud computing services and development in next generation broadband network, there is a growing demand for hosted services and applications delivered over the internet. With this market opportunity in sight, Telecommunications Services began rolling out a suite of “Cloud Computing” solutions. Our unified Communications-as-a-Service (“uCaaS”) is an on-demand “in-the-cloud” service catered to the communications and IT needs of SMEs and MNCs. Our new website, www.nexwavetelecoms.com, the gateway to our suite of services and products, recently won the prestigious IMA1

Bertie Cheng cHAIRMAN

Andrew Loh PResIdeNt

TELECHOICE INTERNATIONAL LIMITED ANNuAL REpORT 2009 3

letter to shareholders

TeleChoice performed credibly in 2009 despite this tough operating environment. . . Our strong cash position was maintained as we closely managed our working capital. The second half of 2009 saw revenue and earnings steadily improve as market demand started to recover.

Outstanding Achievement Award. This reinforces our position as a fully integrated provider of next generation communications and applications solutions.

For the consumer market, we continue to provide innovative services under our well-known “Sunpage” brand. Our latest consumer offering, “Voiz unlimited”, is an industry-first. It is a cost-savings, buffet-style service which offers consumers a low subscription-based service to make calls to over 30 selected countries with unlimited usage.

Network Engineering Services was adversely affected during the financial downturn as regional telecommunications operators tightened their CApEX spending. Nonetheless, the division continued its concerted regional expansion effort and secured breakthrough orders from Malaysia and Vietnam. It expanded its suite of products as it evolved from a largely engineering services provider to a regional value-add product aggregator and total solutions provider.

The Year ahead and FuTure growTh

Although uncertainty still surrounds the overall economic conditions of FY2010, we are optimistic about the longer term prospects for the Group. Nokia projects that the global handset market will grow by 10% in 20102 which will benefit pCS Services. Smartphones and other feature-rich devices will help drive this segment. In anticipation of the pick-up in local consumer demand, we plan to increase the number of planet Telecoms retail outlets. pCS Services will also continue pushing the boundaries for innovative marketing, promotional activities and store layouts so as to improve customer experience and drive sales.

Telecommunications Services will intensify its activities in the enterprise segment, enhancing its suite of uCaaS and Software-as-a-Service (“SaaS”). In the consumer market, it will continue to expand its traditional voice and VOIp service offerings to leverage on the upward trend in demand for data services and applications.

Network Engineering Services will also likely see an increase in activities and will continue to expand regionally. After a year of CApEX tightening, regional telecommunications operators will resume their investments in network rollout, upgrading and capacity enhancement initiatives.

Overall, the Group plans to invest in local and regional opportunities while continuing to expand our product and service offerings. We will also invest in productivity enhancements for our operations.

commiTmenT To shareholders

In balancing the needs of investing for future growth and rewarding shareholders immediately, the Board is pleased to recommend a final dividend of 1.75 cents per ordinary share (one-tier tax exempt) for FY2009. The proposed dividend, if approved at the Company’s Annual General Meeting to be held on 28 April 2010, will be paid on 20 May 2010.

aPPreciaTion To all

In conclusion, on behalf of the Board, we would like to extend our thanks to our management and staff for another year of commitment and unceasing efforts. We are also grateful to our business partners, customers and shareholders for your continued support during these difficult times. We look forward to a new year which will bring with it opportunities for growth and continued success.

Bertie cheng andrew lohchairman President

1 Interactive Media Award presented by the Interactive Media Council

Inc of the uSA2 Source: “Nokia cuts phone prices as market growth returns”, Reuters,

February 1, 2010


BOARD OF DIRECTORS

Bertie Cheng

Chairman and Independent DirectorFirst appointed on 6 May 2004Last re-appointed on 28 April 2009

Mr Cheng is the Chairman of the Board. He is also the Chairman of the Executive Committee and the Remuneration Committee.

Mr Cheng retired as Chief Executive Officer of pOSBank in July 1997. He holds and has held directorships in both listed and unlisted companies. Currently, he is a director of Hong Leong Finance Limited, Singapore petroleum Company Ltd, pacific Andes (Holdings) Limited, Thomson Medical Centre Limited, CFM Holdings Limited, and Westech Electronics Limited. He is also the Non-Executive Chairman of Tee International Limited.

Mr Cheng holds a Bachelor of Arts Degree in Economics (Honours) from the university of Malaya in Singapore. He received the public Administration Medal (Silver) in 1984 and the public Service Medal in 2001. He also received the Friend of Labour Award from the National Trade union Congress (NTuC) in 2008.

Past directorships in listed companies and major appointments(from 1 January 2007 to 31 December 2009)• STTeleportPteLtd• Mobile Solutions and Payment

ServicesPteLtd• SHCCapitalLtd• GrandPacificPropertiesLimited• Singapore Petroleum Company

Limited

Yap Boh pin

Independent DirectorAppointed on 6 May 2004Last re-elected on 28 April 2009

Mr Yap is the Chairman of the Audit Committee, and is a member of the Nominating Committee.

He is currently Managing Director of B.p.Y. private Limited, a firm of management consultants which provides financial planning, financial accounting, reviewing internal control systems as well as corporate secretarial services. Between July 1975 and January 1999, Mr Yap was a senior partner at Yap Boh pin & Co which provided advice

on auditing, taxation, liquidation and corporate restructuring matters. He is also a director of Lereno Bio-Chem Ltd, serving as Chairman of its Nominating Committee and member of its Audit Committee. He has also held directorships in various public companies between 1975 and 2000, including Singapore Land Limited, L&M Investments Limited and pan pacific public Company Limited. During his appointment by these companies, Mr Yap was a member of their executive committee and/or audit committee, assisting in the evaluation and recommendation of changes to their system of internal controls as well as corporate governance.

In March 2007, Mr Yap was appointed as director of Asia Mobile Holdings pte. Ltd., a private limited company which is a subsidiary of Singapore Technologies Telemedia pte Ltd. It has investments in StarHub Ltd and Shenington Investments pte Ltd.

Beyond the corporate sector, Mr Yap is actively involved in various non-profit, educational and social welfare organisations. He is a member of the

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 DIRECTORS

Board of Governors of the Singapore Hokkien Huay Kuan. At end January 2008, Mr Yap was appointed a Director of ACS (International). He is also a member of the Board of Trustees of the Chinese Development Assistance Council, as well as, a member of its Volunteers & Social Service Committee and Audit Committee. In July 2009, Mr Yap was appointed member of the Board of Directors and Chairman of Finance Committee of Singapore Heart Foundation.

Mr Yap qualified as a Chartered Accountant from the Institute of Chartered Accountants in England and Wales in 1966. He is a Fellow member of both the Institute of Certified public Accountants of Singapore, and the Institute of Chartered Accountants in England and Wales.

Past directorships in listed companies and major appointments(from 1 January 2007 to 31 December 2009)• Nil

Yen Se-hua Stewart

Independent DirectorAppointed on 6 May 2004Last re-elected on 28 April 2007

Mr Yen is the Chairman of the Nominating Committee, and serves as a member of the Remuneration Committee and the Executive Committee.

Mr Yen is currently the Chief Executive Officer of SECOM (Singapore) pte Ltd, a provider of security services. Mr Yen has held senior management positions in industries such as defence marketing, construction and development, security, hospitality and aviation services.

Mr Yen began his career with the Singapore Ministry of Defence as a systems engineer. Mr Yen later joined Chartered Industries of Singapore pte Ltd, where he was part of the team that established CDC-Construction and Development pte Ltd (now known as Sembawang Engineers & Constructors pte Ltd), a leading design-and-build contractor in Singapore for civil

engineering, residential and commercial building projects.

Mr Yen is currently also an independent director and member of the Audit Committee and Chairman of Remuneration Committee of Hersing Corporation Ltd, a company listed in Singapore. Mr Yen obtained a Bachelor Degree in Engineering from McMaster university in 1972 and also holds a Diploma in Financial Management from New York university.

Past directorships in listed companies and major appointments(from 1 January 2007 to 31 December 2009)• NorfolkDevelopmentGroup(Norfolk

Hotel)Ltd• NorfolkHotelJointVentureCompany

Limited• SemhotelManagementPteLtd• BintanResortManagementPteLtd• RegionalHotelPteLtd• VenturaDevelopment(Myanmar)Pte

Ltd• AetosSecurityManagementPteLtd• AetosSecurityConsultantsPteLtd


BOARD OF DIRECTORS

tang Yew KaY JaCKSon

Independent DirectorAppointedon1November2006Last re-elected on 28 April 2007

Mr Tang is a member of the Audit Committee.

After three years in the Singapore Government Administrative Service, Mr Tang spent the next 28 years in the banking and financial services industry and held senior management positions at Continental Illinois National Bank, N.M. Rothschild & Sons (Singapore) Ltd, ST Capital Limited and Vertex Management (uK) Limited. He retired from full-time employment in January 2005.

Mr Tang has held directorships in various companies, including SGX-Main-Board listed Singapore Food Industries Limited, where he served as a member of the Audit Committee.

Mr Tang graduated with a Bachelor of Social Sciences (Economics) (Honours) (1970), and obtained a post-graduate Diploma in Business Administration (1975), from the then university of Singapore.


Lee theng Kiat

Non-Executive DirectorAppointed on 28 April 1998Last re-elected on 28 April 2008

Mr Lee serves as a member of the Executive Committee, Remuneration Committee and Nominating Committee.

Mr Lee is currently the president and Chief Executive Officer of Singapore Technologies Telemedia pte Ltd where he is responsible for steering the strategic growth and development as well as investments of the Singapore Technologies Telemedia pte Ltd group of companies.

Mr Lee joined the Singapore Technologies group of companies in 1985 and held senior positions overseeing legal and strategic business development. In 1994, recognising the potential in the telecommunications sector, Mr Lee spearheaded the creation of Singapore Technologies Telemedia pte Ltd as a new business area for the Singapore Technologies group. Since then, he has led the company’s growth through overseeing their investments in and managing infocommunications businesses.

under his leadership, Singapore Technologies Telemedia pte Ltd has evolved into a leading information-communications company, with operations and investments in Asia-pacific, the Americas and Europe. Currently, Singapore Technologies Telemedia pte Ltd’s business focus is in two distinct sectors, namely, wireless and internet protocol. The Singapore Technologies Telemedia pte Ltd group of companies, which include, Global Crossing Limited and StarHub Ltd, offer a wide range of communications and information services including fixed and mobile communications, internet exchange and data communications, satellite, broadband and pay television.

Mr Lee began his career as an officer with the Singapore Legal Service where he served for more than eight years. He obtained a Bachelor of Laws Degree from the then university of Singapore in 1976.

Past directorships in listed companies and major appointments(from 1 January 2007 to 31 December 2009)• PTIndosatTbk


BOARD OF DIRECTORS

Sio tat hiang

Non-Executive DirectorAppointed on 6 May 2004Last re-elected on 28 April 2008

Mr Sio serves as a member of the Audit Committee.

Mr Sio has over 20 years of financial and management experience, and is currently the Executive Vice-president of Singapore Technologies Telemedia pte Ltd, a position he has held since November 1995.

In 1991, Mr Sio joined Singapore Technologies Holdings pte Ltd as Vice-president of Corporate Finance, overseeing the treasury and investment management functions of the Singapore Technologies group of companies. Between 1993 and 1997, Mr Sio held the position of Director of Strategic Investment and Group Treasurer and was part of the team which formed Singapore Technologies Telemedia pte Ltd as the telecommunications branch of the Singapore Technologies group.

Mr Sio obtained a Bachelor Degree in Business Administration from the then university of Singapore in 1970, and attended the Senior Management programme at the London Business School.

Past directorships in listed companies and major appointments(from 1 January 2007 to 31 December 2009)• PTIndosatTbk

Lim Chai hoCK CLive

Non-Executive DirectorAppointedon29September1999Last re-elected on 28 April 2009

Mr Lim serves as a member of the Executive Committee.

Mr Lim is credited with having successfully spearheaded the strategic development and growth of the Group since its inception in 1998 into a regional diversified provider and enabler of innovative communications today.

Following his retirement as Group president in November 2006, Mr Lim continues to contribute his extensive industry experience and expertise to the Group, as a Non-Executive Director and a member of the Executive Committee.

Mr Lim, who oversaw the strategic development and management of our Group as president, has over 13 years of experience in the telecommunications industry, including establishing Cellstar pacific pte Ltd. prior to undertaking his appointment as our Group president in January 2004, he held the position of Managing Director from March 1999 to December 2003 where he was responsible for the Group’s distribution business.

Mr Lim is currently the Managing Director of Leap International pte Ltd, a private investment holding company. Mr Lim holds an MBA from the Asian Institute of Management, Manila, and a Master of Arts (Christian Studies) from Regent College, Vancouver.


KweK BuCK ChYe

Alternate Director to Lee Theng KiatAppointed on 7 May 2004

Mr Kwek, who serves as an alternate director to Mr Lee Theng Kiat, has over 30 years of financial experience. He joined the Singapore Technologies group in 1992. He has served as Chief Financial Officer in various major operating units within the group including Chartered Semiconductor Manufacturing Ltd, ST Assembly Test Services Ltd (now known as STATS ChippAC Ltd.), Vickers Capital Limited and Singapore Technologies Telemedia pte Ltd.

prior to joining the Singapore Technologies group, Mr Kwek spent 10 years at united Technologies Carrier Asia pacific Operation where he assumed various regional responsibilities in planning, business development and joint venture start-ups. Mr Kwek is currently the Chief Financial Officer of StarHub Ltd, a position he has held since September 2002.

Mr Kwek obtained a Bachelor Degree in Accountancy from the then university of Singapore in 1975. He also attended the Advanced Management program at Harvard Business School in 1997. Mr Kwek is a member of the Institute of Certified public Accountants of Singapore.



executive management

Left to right: Andrew Loh,

Steven Ng, Pauline Wong,

Wong Loke Mei, Lee Yoong Kin,

Goh Song Puay

Andrew Lohpresident

Mr Loh joined TeleChoice in November 2005 as Senior Vice-president of personal Communications Solutions Services (then known as Distribution Services) and was appointed as Group president in December 2006. He is responsible for the overall management and growth of TeleChoice.

prior to joining the Group, Mr Loh was Senior Vice-president, International Operations of Singapore Technologies Telemedia pte Ltd where his responsibilities included overseeing the business integration of Singapore Technologies Telemedia pte Ltd’s global investments. This followed a 22-year career at united Technologies Carrier where he held several senior management positions both in Singapore and internationally.

Mr Loh holds a Bachelor of Engineering (Electrical) Degree from the university of Western Australia, Australia and a MBA from Michigan State university, uSA.

Steven ngSenior Vice-president Telecommunications Services

Mr Ng joined TeleChoice in March 2008. He is responsible for the overall management of the Telecommunications Services business unit, including setting strategy, identifying new market opportunities and developing new telecommunications products and services.

Mr Ng has a very broad Information and Communication Technology background having spent over 22 years working for AT&T, Gartner and other leading high-tech companies. At AT&T, he was Managing Director for ASEAN Business Markets. He was later seconded to Concert Global Networks (an AT&T and BT Global Joint Venture) as Managing Director and Vice-president, Sales for Global Services Asia pacific, becoming one of the pioneer leaders in the formation of this venture. His responsibilities encompassed voice, data and network management solutions. Mr Ng subsequently joined Gartner as Managing Director and Regional Vice-president, overseeing its research and consulting business across Asia.

Mr Ng holds a Graduate Diploma in Marketing and a MBA from university of Dubuque, uSA.

Lee Yoong KinSenior Vice-presidentNetwork Engineering Services

Mr Lee joined TeleChoice in December 2006, assuming responsibility for the overall growth and strategic direction of the Network Engineering Services division.

He has more than 20 years of senior business and operational experience in the IT and telecommunications industry, having worked with Singapore Technologies Telemedia pte Ltd, Chartered Electronics Industries pte Ltd (now known as ST Electronics (Infocomm Systems) pte Ltd) and CSE Systems and Engineering pte Ltd (now known as CSE Global Ltd). His previous positions include Managing Director of i-STT pte Ltd (now known as Equinix Singapore pte. Ltd.) which he co-founded in 1999 and General Manager and Board member of ST Teleport pte Ltd, a company which he set up in 1994.

Mr Lee holds a Bachelor of Engineering Degree (First Class Honours) and a MBA from the National university of Singapore.


executive management

PAuLine wongSenior Vice-presidentpersonal Communications Solutions Services

Ms Wong was appointed to lead personal Communications Solutions (“pCS”) Services (then known as Distribution Services) in 2006. She oversees the overall management of the business unit, including its regional and retail operations. She is also responsible for identifying and developing new market opportunities to grow the business.

Ms Wong joined our Group in December 1999 as Operations Manager for pCS Services and has been a key contributor to the significant growth and success of the division’s business. She was previously Area Manager for Telecom Equipment pte Ltd (a subsidiary of Singapore Telecommunications Ltd).

Ms Wong graduated with a Bachelor of Business Degree (Distinction) from the Royal Melbourne Institute of Technology university, Victoria, Australia, and holds an Executive MBA (Honours) from the university of Chicago Booth School of Business.

wong LoKe MeiChief Financial Officer

Ms Wong was appointed Chief Financial Officer in 2007, having been Vice-president, Finance, since 2005. Ms Wong oversees the financial affairs and reporting for the Group and supports the Group’s investor relations and risk management activities.

Ms Wong has over 20 years’ of experience in finance and accounting, most of which were with the Singapore Technologies Telemedia pte Ltd group of companies. She joined our Group in June 1995 as an Accountant. She participated in the listing of TeleChoice on the Main- Board of the SGX-ST in June 2004.

Ms Wong holds a Bachelor of Accountancy Degree from the National university of Singapore and a Master in Business Administration from Heroit Watt university, Edinburgh, united Kingdom. Ms Wong is also a member of the Institute of Certified public Accountants of Singapore.

goh Song PuAYVice-president Human Resource

Mr Goh is responsible for the management of local and regional human resource functions for the Group, including human capital development, leadership and organisational development.

Mr Goh has more than 15 years human resource experience across a broad spectrum of industries. prior to joining the Group in 2004, Mr Goh held various senior positions including Assistant Vice-president (HR) at StarHub pte Ltd (now known as StarHub Ltd) and Director (HR) at i-STT pte Ltd, a subsidiary of Singapore Technologies Telemedia pte Ltd. He was also Director (HR) for the National university Hospital.

Mr Goh holds a Bachelor of Mechanical Engineering Degree from the National university of Singapore.


OPERATIONS REVIEW

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

Overall PerfOrmance

TeleChoice faced a difficult year with global macroeconomic factors and the intensely competitive environment weighing in on the Group’s performance. However, we saw gradual recovery with improved earnings in the second half of the year. This was in tandem with the recovery in global economies and increased consumer confidence.

For the year ended 31 December 2009 (“FY2009”) revenue decreased by 23% or S$80.3 million from S$354.0 million in FY2008 to S$273.7 million in FY2009. The decrease in revenue was attributed to weaker personal Communications Solutions (“pCS”) Services’ sales and lower revenue contribution from Telecommunications Services.

Group pBT decreased by 25% from S$18.2 million in FY2008 to S$13.6 million in FY2009 on account of the lower revenue offset by lower operating expenses. Gross margins decreased by 0.1 percentage point due to the increase in sales mix of lower margin products. Net income for the financial year decreased to S$11.4 million, 20% lower than FY2008’s S$14.2 million. The Group maintained a healthy cash position of S$46.6 million as at 31 December 2009 due to proceeds from the disposal of investment in an associate and lower cash outflow from financing activities.

PersOnal cOmmunicatiOns sOlutiOns services

In FY2009, revenue contribution from pCS Services was S$217.3 million with pBT of S$10.3 million (79% and 76% of total Group revenue and pBT respectively). Revenue decreased by 25% or S$74.2 million as compared with FY2008. This decrease was attributed to lower consumer demand and reduced support by operators and manufacturers. pBT decreased by S$2.6 million or 20% due to lower revenue mitigated by higher margins and lower operating expenses. pBT margins, however, increased to 4.7% in FY2009 compared to 4.4% in FY2008 due to the continued focus on higher margin, value-added activities.

During the year, we expanded our product and service offerings and further strengthened our close ties with existing business partners. In the fourth quarter of FY2009, we entered into a new two-year contract with StarHub Ltd (“StarHub”) to continue providing integrated fulfilment and management services, commencing from 1 November 2009. There is an option to extend the contract for a further two years. In April 2009, pCS Services was awarded a new distributorship agreement from StarHub for the sale of its prepaid cards, further highlighting the close business partnership we enjoy with StarHub.

Our range of product offerings in the mobile handset market increased with our appointment as master distributor by Xtreme-DSp Global pte Ltd (“Xtreme”)

for its range of VERTIX-branded advanced consumer electronic products. One of the first products distributed under this agreement is the Vantage VX1, a high performance Bluetooth headset with dynamic noise cancellation capabilities.

Our chain of 11 retail outlets operated by planet Telecoms (S) pte Ltd (“planet Telecoms”) contributed positively to the division’s performance. The chain includes StarHub platinum and Exclusive partner shops, and other retail concept outlets which we operate for LG, Nokia, Samsung and Sony Ericsson.

The share of economic benefit attributable to the Group from our investment in TeleFortune (China) Investments Ltd (“TFI”), which has since been terminated, was received in FY2009.

telecOmmunicatiOns services

In FY2009, revenue contribution from Telecommunications Services was S$15.4 million with pBT of S$1.4 million (6% and 10% of total Group revenue and pBT respectively). Revenue decreased by S$6.3 million or 29% due to a decline in IDD business, discontinuation of legacy mobile data business and the unwinding of the unprofitable Malaysian operations. pBT decreased by S$0.8 million or 36% due to lower revenue and gross margins partially offset by lower operating expenses and a higher share of profits from a jointly-controlled entity. pBT margins consequently decreased to 9.2% in FY2009.


OPERATIONS REVIEW

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

by S$0.2 million compared with the same period last year. The increase was from higher equipment sales in Indonesia offset by lower equipment sales in Singapore. Intense price competition as well as unfavourable forex movements during the year impacted our FY2009 performance. pBT decreased by S$1.2 million or 39% due to lower margin sales and unrealised exchange losses as compared to unrealised exchange gain in the same period last year. pBT margin correspondingly decreased to 4.7% in FY2009 compared to 7.6% in FY2008.

In 2009, we intensified our push into the region, particularly into Malaysia and Vietnam. We continued to build our relationship with our existing customers through additional product and service offerings, particularly in power systems equipment and in Operation, Maintenance and Support (“OMS”) services.

PrOsPects & GrOwth strateGies

While the outlook for FY2010 is still cloudy, we are confident of the longer term prospects for the Group. Improvement in consumer demand will drive growth in the mobile handset market once again. Market reports have indicated that this market has grown 10% in the fourth quarter of 20092, the first quarter of positive growth since the recession hit. Smartphones, in particular, will see continued demand as manufacturers continue to roll out newer and more feature-laden models. This is likely to translate into stronger sales for us both in Singapore and the region. In anticipation of this pick-up, we will increase our retail presence with the opening of three

more retail outlets in parco Marina Bay, Esplanade MRT Station and Bedok point. This is in addition to renewing our lease at IMM shopping mall where we operate one of our two StarHub platinum Shops.

The speed at which demand is picking up for Cloud Computing solutions among enterprises, is a positive signal for Telecommunications Services. Over the next five years, IDC has forecasted that IT cloud services will grow almost threefold, reaching uS$42 billion by 2012. As one of the few fully integrated providers of hosted voice solutions and cloud computing applications, Telecommunications Services is poised to benefit from this demand. On the consumer front, strong demand for applications and services for feature-rich phones will see us pushing out cutting edge voice and data services to complement our enterprise-focused offerings.

As for Engineering Services, we are seeing signs of a resumption in infrastructure capital expenditure (“CApEX”) spending by the regional telcos. This is mainly driven by various ongoing network rollout, upgrading and capacity enhancement initiatives. While price and competitive pressures are expected to continue, we see opportunities in many untapped areas and will continue to strengthen our product and service offerings to pursue such opportunities. Going forward, the expansion of our regional presence as well as our evolution into a truly integrated solutions provider will remain our core focus.

Besides further enhancing our corporate telephony and network solutions offerings, we have also aligned our business to take advantage of the increasing demand of corporations, both large and small, for a more efficient and flexible “pay as you use” IT Infrastructure model. Leveraging our next generation voice network capability and our extensive experience in usage models, we launched a full-suite of “Cloud Computing” solutions to meet this growing market. Our unified Communications-as-a-Service (“uCaaS”), is an on-demand “in-the-cloud” service catered to the communication and IT needs of SMEs and MNCs. As a gateway to our suite of services and products, our brand new website, www.nexwavetelecoms.com, won the prestigious IMA1 Outstanding Achievement Award which reinforces our position as a fully integrated provider of next generation communications and applications solutions.

Equally important is our consumer segment, where we have continued to provide innovative services under our well-known “Sunpage” brand. Our latest consumer offering is “Voiz unlimited”, a cost-savings, buffet-style service. This low subscription-based offering is an industry-first and enables callers to make calls to over 30 selected countries with unlimited usage.

netwOrk enGineerinG services

Revenue contribution from Network Engineering Services was S$41 million with pBT of S$1.9 million (15% and 14% of total Group revenue and pBT respectively) in FY2009. Revenue increased marginally

1 Interactive Media Award presented by the Interactive Media Council Inc of the uSA2 Source: “Global Handset Market Returns to 10 per Cent Growth in Q42009”, Cellular News, January 31, 2010


PLANET TELECOMS TOUCH-POINTS

NorthPlanet telecoms Blk 713 Ang Mo Kio Avenue 6 #01-4054 (S) 560 713Tel: 6457 4788Fax: 6452 6705Email: [email protected] MRT: NS16 Ang Mo KioOpening hours: 11am to 9pm daily

Planet telecoms Blk 183 Toa payoh Central #01-278 (S) 310 183Tel: 6356 5466Fax: 6252 5477Email: [email protected] MRT: NS19 Toa payohOpening hours: 11am to 9pm daily

LG Concept Shop Blk 183 Toa payoh Central #01-278 (S) 310 183Tel: 6250 6308Fax: 6252 5477Email: [email protected] MRT: NS19 Toa payohOpening hours: 11am to 9pm daily

Sony Ericsson Concept ShopBlk 190 Toa payoh Central #01-568 (S) 310 190Tel: 6256 4788Fax: 6256 5466Email: [email protected] MRT: NS19 Toa payohOpening hours: 11am to 9pm daily

Starhub Sembawang 11 Canberra Road #01-02 Sembawang MRT Station (S) 759 775Tel: 6499 8951Fax: 6753 6628Email: [email protected] MRT: NS11 SembawangOpening hours: 11am to 9pm daily

EaStPlanet telecoms 2 Tampines Central 5 #05-05 Century Square (S) 529 509Tel: 6785 1118Fax: 6784 1118Email: [email protected] MRT: EW2 TampinesOpening hours: 11am to 9pm daily

Samsung Mobile World2 Tampines Central 5 #04-02A Century Square (S) 529 509Tel: 6786 5466Fax: 6783 5477Email: [email protected] MRT: EW2 TampinesOpening hours: 11am to 9pm daily

WEStNokia Shop 63 Jurong West Central 3 #B1-77 Jurong point Shopping Centre (S) 648 331Tel: 6861 2539Fax: 6861 2529Email: [email protected] MRT: EW27 Boon LayOpening hours: 11am to 9pm daily

Starhub IMM2 Jurong East St 21 #01-60 to 62 IMM Building (S) 609 604Tel: 6720 2829Fax: 6720 2827Email: [email protected] MRT: NS1 Jurong EastOpening hours: 11am to 9pm daily

North-EaStPlanet telecoms11 Rivervale Crescent #01-26, Rivervale Mall (S) 545 082Tel: 6312 0686Fax: 6312 0186Email: [email protected] MRT: NE16 SengkangOpening hours: 11am to 9pm daily

NEW outLEtS oPENING SooNBedok pointparco Marina BayEsplanade MRT Station


corporate information

BOARD OF DIRECTORS

Bertie Cheng (Chairman)

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 to Lee Theng Kiat)

COMPANY SECRETARY

pek Siok Lan

REGISTERED OFFICE

51 Cuppage Road #09-01

StarHub Centre

Singapore 229469

EXTERNAL AUDITORS

KpMG LLp

Audit partner: Ong Chai Yan

(partner since financial year ended

31 December 2008)

DIRECTORY OF SUBSIDIARIES

AND JOINT VENTURE

COMPANIES

SINGAPORE

Corporate

TeleChoice International Limited

5 Clementi Loop Level 2M

Singapore 129816

Tel : 65 6849 4000

Fax : 65 6849 4012

Website : www.telechoice.com.sg

Personal Communications

Solutions Services


TeleChoice (Indonesia) pte Ltd

planet Telecoms (S) pte Ltd


Singapore 129816

Tel : 65 6849 4000

Fax : 65 6466 8820

Website : www.telechoice.com.sg

www.planet-telecoms.com.sg

Telecommunications Services

Nexwave Telecoms pte. Ltd.

Nexwave Solutions pte. Ltd.

Sunpage Communications pte Ltd


Singapore 129816

Tel : 65 6481 7666

Fax : 65 6481 0110

Website : www.nexwavetelecoms.com

Network Engineering Services

Nexwave Technologies pte Ltd


Singapore 129816

Tel : 65 6849 4040

Fax : 65 6849 4037

Website : www.nexwave.com.sg

MALAYSIA

N-Wave Technologies (Malaysia)

Sdn Bhd

N-Wave Telecoms (Malaysia) Sdn

Bhd

B808 Block B Kelana Square

Jln SS7/26 Kelana Jaya

47301 petaling Jaya

Selangor Malaysia

Tel : 60 3 7880 6611

Fax : 60 3 7880 8393

INDONESIA

pT TeleChoice Indonesia

Menara Kadin Indonesia Lt 30

Jl H R Rasuna Said Blok X-5 Kav 2-3

Jakarta 12950

Indonesia

Tel : 62 21 5289 1919

Fax : 62 21 5299 4599

pT Sakalaguna Semesta

Komplex Ruko Roxy Mas

Blok D2 No 9-10

Jalan KH. Hasyim Ashari

Jakarta 10150

Indonesia

Tel : 62 21 6385 2687

Fax : 62 21 6385 2535

Website: www.sakalaguna.com

pT NexWave

Jl. Dr. Sahardjo No. 266

Menteng Dalam

Jakarta Selatan 12870

Indonesia

Tel : 62 21 829 0809

Fax : 62 21 829 2502

THAILAND

TeleChoice (Thailand) Ltd

47th Floor, 195 Empire Tower

unit 4703

South Sathorn Road, Yannawa

Sathorn, Bangkok 10120

Tel : 66 2 686 3411

Fax : 66 2 686 3433


corporate Governance

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.

(A) Board Matters

Principle 1: Board’s Conduct of its Affairs

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.



Principle 2: Board Composition and Balance

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.

profiles of each Director are found on pages 4 to 7 of this Annual Report.

Principle 3: Chairman and President

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.

Principle 4: Board Membership

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.

Table 1 FY09 – Directors’ Attendance at Board and Board Committees Meetings

Director

Board Audit Committee

Remuneration

Committee

Nominating

Committee

No. of

Meetings

Held

No. of

Meetings

Attended

(%

Attendance)

No. of

Meetings

Held

No. of

Meetings

Attended

(%

Attendance)

No. of

Meetings

Held

No. of

Meetings

Attended

(%

Attendance)

No. of

Meetings

Held

No. of

Meetings

Attended

(%

Attendance)

Bertie Cheng 4 4 (100%) NA NA 1 1 (100%) NA NA

Yap Boh pin 4 4 (100%) 5 5 (100%) NA NA 1 1 (100%)

Yen Se-Hua Stewart 4 4 (100%) NA NA 1 1 (100%) 1 1 (100%)

Tang Yew Kay Jackson 4 4 (100%) 5 5 (100%) NA NA NA NA

Lee Theng Kiat 4 2 (50%) NA NA 1 1 (100%) 1 1 (100%)

Sio Tat Hiang 4 3 (75%) 5 4 (80%) NA NA NA NA

Lim Chai Hock Clive 4 4 (100%) NA NA NA NA NA NA

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.



Principle 5: Board Performance

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.

Principle 6: Access to Information

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.

Our Articles of Association provide for Directors to participate in meetings by teleconference or

videoconference.

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.



(B) Remuneration Matters

Principle 7: Procedures for Developing Remuneration Policies

Principle 8: Level and Mix of Remuneration

Principle 9: Disclosure on Remuneration

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.

Table 2 FY09 – Directors’ Fees

Name Fees(1) (S$)

Bertie Cheng 67,000

Yap Boh pin 62,000

Yen Se-Hua Stewart 58,000

Tang Yew Kay Jackson 52,000

Lee Theng Kiat 52,000(2)

Sio Tat Hiang 50,000(2)

Lim Chai Hock Clive 42,000

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.

Table 3 FY09 – Top Five (5) Key Executives’ Remuneration

Name Salary, Bonus & Other Benefits(1)

Andrew Loh Sur Jin B

Lee Yoong Kin A

pauline Wong Mae Sum A

Wong Loke Mei A

Ng Kwang Seng Steven A

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.

(C) Accountability and Audit

Principle 10: Accountability

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.

Principle 11: Audit Committee

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.

Principle 12: Internal Controls

Principle 13: Internal Audit

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.

The AC is supported by senior Management representatives who:–

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.

(D) Communication with Shareholders

Principle 14: Communication with Shareholders

Principle 15: Greater Shareholder Participation

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.


FINANCIAL CONTENTS

23 Group Financial Review

28 Directors’ Report

42 Statement by Directors

43 Independent Auditors’ Report

45 Statement of Financial position

46 Consolidated Income Statement

47 Consolidated Statement of Comprehensive Income

48 Consolidated Statements of Changes in Equity

49 Consolidated Cash Flow Statement

51 Notes to the Financial Statements

100 Supplementary Information

101 Shareholdings Statistics

103 Group Structure

104 Notice of Twelfth Annual General Meeting

proxy Form

GroUp financiaL revieW


1.1 OPERATING RESULTS OF THE GROUP

In $ million FY2009 FY2008 Change (%)

Revenue(1) 273.7 354.0 (22.7)

Gross profit 28.6 37.2 (23.1)

Other income 1.2 0.4 200.0

Share of profit of associates and jointly-controlled entity 0.2 1.1 (81.8)

Total operating expenses 261.5 337.3 (22.5)

Profit before taxation 13.6 18.2 (25.3)

profit after taxation 11.4 14.2 (19.7)

Profit after tax and minority interest 11.4 14.2 (19.7)

(1) Tracking revenue from Telecoms, previously classified under Other Income has been included in Revenue

Group FY2009 revenue decreased by 23% or $80.3 million to $273.7 million.

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.

1.2 GROSS PROFIT


Gross profit 28.6 37.2 (23.1)

Gross margin 10.4% 10.5% -0.1 ppt

ppt – percentage point

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.



1.3 OTHER INCOME

Other income comprises mainly of jobs credit of $0.7 million granted by the Singapore government in FY2009,

interest income and subsidies received.

1.4 SHARE OF PROFIT OF ASSOCIATES AND JOINTLY-CONTROLLED ENTITY

There was an increase in profit contribution from the investment in pT Sakalaguna in FY2009.

With the disposal of investment in TeleFortune (China) Investments Ltd (“TeleFortune”) in December 2008, there

were no profit contribution from the associate in FY2009.

1.5 OPERATING EXPENSES


Cost of sales 245.1 316.8 (22.6)

Selling and marketing expenses 5.3 5.7 (7.0)

Administrative expenses 10.2 14.1 (27.7)

Other expenses 0.7 0.5 40.0

Finance costs 0.2 0.2 –

Total operating expenses 261.5 337.3 (22.5)

Included in total operating expenses:

Salary costs 18.9 20.6 (8.3)

Depreciation and amortisation 1.3 2.0 (35.0)

Impairment losses on goodwill – 0.3 nm

Bad debts written-off 0.1 – nm

Exchange loss/(gain) 0.5 (0.2) (350.0)

nm: not meaningful

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.

1.6 PROFIT BEFORE TAX

profit before tax margins FY2009 FY2008 Change

personal Communications Solutions (pCS) Services 4.7% 4.4% 0.3 ppt

Telecommunications Services (Telecoms) 9.2% 10.1% -0.9 ppt

Network Engineering Services (Engineering) 4.7% 7.6% -2.9 ppts

Group 5.0% 5.1% -0.1 ppt

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.

1.7 PROFIT AFTER TAX


Income tax expenses 2.2 4.0 (45.0)

Effective tax rate 16% 22% -6ppts

Profit after tax 11.4 14.2 (19.7)

profit after tax margins 4.2% 4.0% 0.2 ppt

Group PAT decreased by 20% or 2.8 million to $11.4 million in FY2009.

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.

2. LIqUIDITY AND CAPITAL RESOURCES


Cashflow from:

Operating activities 5.7 36.3 -84.3

Investing activities 9.4 (0.7) nm

Financing activities (11.2) (17.8) -37.1

Net change in cash and cash equivalents 3.9 17.8 -78.1

Cash and cash equivalents at end of year 46.6 42.6 9.4

nm: not meaningful

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%).


Directors’ report

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.

DIRECTORSThe directors in office at the date of this report are as follows:

Bertie ChengYap Boh pinYen Se-Hua StewartTang Yew Kay JacksonLee Theng KiatSio Tat HiangLim Chai Hock CliveKwek Buck Chye (Alternate director to Lee Theng Kiat)

DIRECTORS’ INTERESTSAccording 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 beginning of

the year

Holdings at end of

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

Options to subscribe for ordinary shares

Exercisable between 18/05/2005 and 17/05/2009 at $0.2079 each

Kwek Buck Chye 300,000 –


Directors’ report

DIRECTORS’ INTERESTS (Cont’d)Holdings at

beginning of the year

Holdings at end of

the year


Related Corporations

CitySpring Infrastructure Management Pte Ltd

Unitholdings in CitySpring Infrastructure Trust


Global Crossing Limited

Common stock of par value of US$0.01 each fully paid

Lee Theng Kiat 10,835 17,506

Options to subscribe for common stock of par value of US$0.01 each

Exercisable between 12/01/2005 and 12/01/2014 at uS$10.16 each


Sio Tat Hiang 80,000 80,000

Restricted stock units of common stock of par value of US$0.01 each

Lee Theng Kiat

– Vesting period from 08/03/2005 to 08/03/2009 1,500 –

– Vesting on 24/06/2009 4,176 –

– Vesting on 04/06/2010 – 2,345

i-STT Investments Pte. Ltd.

Ordinary shares

Lee Theng Kiat

– Held in trust for STT Communication Ltd 1 1

Singapore Technologies Engineering Ltd

Ordinary shares

Bertie Cheng

– Held in the name of Hong Leong Finance Nominees pte Ltd – 27,000



Directors’ report



Holdings at end of

the year


Related Corporations (Cont’d)

Singapore Technologies Engineering Ltd (Cont’d)


Bertie Cheng

– Exercisable between 10/02/2005 and 09/02/2009 at $2.09 each 27,000 –



– Exercisable between 11/08/2006 and 10/08/2010 at $2.57 each 27,000 27,000





Conditional award of restricted shares to be delivered after 20081

Bertie Cheng 15,000 –

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.

Unvested restricted shares (performance period 01/01/2008 to 31/12/2008)2

Bertie Cheng – 3,514

2 Balance of unvested restricted shares to be released according to the stipulated vesting periods.

Conditional award of restricted shares to be delivered after 20093

Bertie Cheng – 15,000

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.


Directors’ report



Holdings at end of

the year



Singapore Telecommunications Limited

Ordinary shares

Bertie Cheng 2,720 2,720

Yap Boh pin 1,550 1,550

Tang Yew Kay Jackson 2,850 2,850


Sio Tat Hiang 1,490 1,490


SMRT Corporation Ltd

Ordinary shares

Lim Chai Hock Clive

– Held in the name of Leap International pte Ltd – 800,000

StarHub Ltd

Ordinary shares




Kwek Buck Chye





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.


Directors’ report



Holdings at end of

the year



StarHub Ltd (Cont’d)

Conditional award granted under the 2006 StarHub Restricted Stock Plan5



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.


Kwek Buck Chye – 13,000




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.


Lee Theng Kiat 14,400 –







Directors’ report



Holdings at end of

the year





Lee Theng Kiat – 14,024









Conditional award granted under the 2008 StarHub Restricted Share Plan11














Directors’ report



Holdings at end of

the year




Conditional award granted under the 2009 StarHub Restricted Share Plan13

Lee Theng Kiat – 15,800






Vertex Technology Fund Ltd (Under Members’ Voluntary Liquidation)

Ordinary shares of par value of US$1.00 each fully paid

Kwek Buck Chye 20 20

– Held in the name of HSBC Institutional Trust Services (Singapore) Limited

Vertex Technology Fund (II) Ltd (Under Members’ Voluntary Liquidation)

Ordinary shares of par value of US$1.00 each fully paid

Kwek Buck Chye 80 80

– Held in the name of DBS Vickers Securities Nominees (Singapore) pte Ltd

Redeemable preference shares of US$0.01 each fully paid

Kwek Buck Chye 76.59 76.59

– Held in the name of DBS Vickers Securities Nominees (Singapore) pte Ltd

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.


Directors’ report

DIRECTORS’ INTERESTS (Cont’d)Except as disclosed under the “Share Options” section of this report, neither at the end of, nor at any time during

the financial year, was the Company a party to any arrangement whose objects are, or one of whose objects is,

to enable the directors of the Company to acquire benefits by means of the acquisition of shares in or debentures

of the Company or any other body corporate.

Except for 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.

EqUITY COMPENSATION BENEFITSa) Share options

The TeleChoice pre-IpO Share Option Scheme (the “pre-IpO Scheme”) and the TeleChoice post-IpO

Employee Share Option Scheme (the “post-IpO Scheme”) (collectively referred to as the “Schemes”),

were approved and adopted by the members at an Extraordinary General Meeting of the Company held on

7 May 2004.

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:

Vesting schedule

Percentage of Shares over which an Option is

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.


Directors’ report

EqUITY COMPENSATION BENEFITS (Cont’d)a) Share options (Cont’d)

Post – IPO Scheme

Information regarding the post-IpO Scheme is set out below:

(i) The post-IpO Scheme is administered by the Committee.

(ii) The eligible participants of the post-IpO Scheme are:

• executiveandnon-executivedirectorsandemployeesoftheCompanyanditssubsidiariesand

associated companies.

• executiveandnon-executivedirectorsandemployeesofSTTCanditssubsidiaries.

• controllingshareholdersoftheCompanyandtheassociatesofthecontrollingshareholders.

(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.


Directors’ report


At the end of the financial year, details of the option granted under the Schemes to directors on the unissued ordinary shares of the Company are as follows:

Date of grant of options

Exercise price per

share

Options outstanding at 1 January

2009Options granted

Options exercised

Options cancelled/

lapsed

Options outstanding

at 31 December 2009

Number ofoption holders at 31 December

2009Exercise period

Pre-IPO Scheme

18/05/2004 $0.2079 75,000 – – 75,000 – – 18/05/2005 to 17/05/2009

18/05/2004 $0.2079 75,000 – – 75,000 – – 18/05/2006 to 17/05/2009

18/05/2004 $0.2079 75,000 – – 75,000 – – 18/05/2007 to 17/05/2009

18/05/2004 $0.2079 75,000 – – 75,000 – – 18/05/2008 to 17/05/2009

Details of options granted to directors of the Company under the Schemes are as follows:

Name of director

Options granted for financial year ended

31 December 2009

Aggregate options granted

since commencement of Schemes to

31 December 2009

Aggregate options exercised/lapsed

since commencement of Schemes to

31 December 2009

Aggregate options

outstanding as at 31 December 2009

Pre-IPO Scheme

Bertie Cheng – 500,000 500,000 –

Kwek Buck Chye – 300,000 300,000 –

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.


Directors’ report


At the end of the financial year, details of the options granted under the Schemes to each director or employee of the Company, STTC and subsidiaries of STTC who has received 5% or more of the total number of options available to all directors and employees under the Schemes are as follows:

Date of

grant of

options

Exercise

price per

share

Options

outstanding

at 1 January

2009

Options

exercised

Options

cancelled/

lapsed

Options

outstanding

at 31 December

2009

Number of

option holders

at 31 December

2009

Exercise

period

Pre-IPO Scheme

18/05/2004 $0.2079 350,000 – 350,000 – – 18/05/2007 to

17/05/2014

18/05/2004 $0.2079 600,000 – 350,000 250,000 1 18/05/2008 to

17/05/2014

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.

b) Long Term Incentive Plans

The TeleChoice Restricted Share plan (the “TeleChoice RSp”) and TeleChoice performance Share plan (the “TeleChoice pSp”) (collectively referred to as the “plans”), were approved and adopted by the members at an Extraordinary General Meeting of the Company held on 27 April 2007.

Information regarding the plans is set out below:

(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.

(ii) The plans are administered by the Committee.

(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

c. employees of associated companies.


Directors’ report

EqUITY COMPENSATION BENEFITS (Cont’d)b) Long Term Incentive Plans (Cont’d)

(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 which are set based on corporate objectives aimed at sustaining longer-term growth. After the awards vest, 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.

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:

Date of grant

Awards granted during the

financial year

Aggregate awards granted since

commencement of Plans to

31 December 2009

Awards vested during the

financial year

Aggregate awards outstanding as at 31 December 2009

For key executives

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.


Directors’ report

EqUITY COMPENSATION BENEFITS (Cont’d)b) Long Term Incentive Plans (Cont’d)

At the end of the financial year, set out below are the details of the participants who have been granted

options under the Schemes and/or received awards granted under the plans, which in aggregate, represent

5% or more of the aggregate of:

(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.

Name of employee

Aggregate awards

granted since

commencement

of Plans to

31 December 2009

Aggregate options

granted since

commencement of

Pre-IPO Scheme to

31 December 2009

Aggregate options

exercised since

commencement of

Pre-IPO Scheme to

31 December 2009

Aggregate options

outstanding as at

31 December 2009

Andrew Loh Sur Jin 1,908,000 – – –

Lee Yoong Kin 812,500 – – –

Ng Kwang Seng Steven 734,000 – – –

pauline Wong Mae Sum 903,000 850,000 637,500 212,500

Wong Loke Mei 182,000 1,000,000 750,000 250,000

AUDIT COMMITTEEThe members of the Audit Committee during the year and at the date of this report are:

• YapBohPin(Chairman),independentnon-executivedirector

• TangYewKayJackson,independentnon-executivedirector

• SioTatHiang,non-executivedirector

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.

The Audit Committee also reviewed the following:

• assistanceprovidedbytheCompany’sofficerstotheinternalandexternalauditors;

• financialstatementsoftheGroupandtheCompanypriortotheirsubmissiontothedirectorsoftheCompany

for adoption; and

• interestedpersontransactions(asdefinedinChapter9oftheSGX-STListingManual).


Directors’ report

AUDIT COMMITTEE (Cont’d)The Audit Committee has full access to management and is given the resources required for it to discharge its

functions. It has full authority and the discretion to invite any director or executive officer to attend its meetings.

The Audit Committee also recommends the appointment of the external auditors and reviews the level of audit

and non-audit fees.

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.

AUDITORSThe auditors, KpMG LLp, have indicated their willingness to accept re-appointment.

On behalf of the Board of Directors

Bertie Cheng

Director

Yap Boh Pin

Director

15 March 2010


statement by Directors

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.

On behalf of the Board of Directors

Bertie Cheng

Director

Yap Boh Pin

Director

15 March 2010


inDepenDent aUDitors’ reportMEMBERS OF THE COMpANY TELECHOICE INTERNATIONAL LIMITED

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.

MANAGEMENT’S RESPONSIBILITY FOR THE FINANCIAL STATEMENTSManagement is responsible for the preparation and fair presentation of these financial statements in accordance

with the provisions of the Singapore Companies Act, Chapter 50 (the Act) and Singapore Financial Reporting

Standards. This responsibility includes:

(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;

(b) selecting and applying appropriate accounting policies; and

(c) making accounting estimates that are reasonable in the circumstances.

AUDITORS’ RESPONSIBILITYOur 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.


inDepenDent aUDitors’ reportMEMBERS OF THE COMpANY TELECHOICE INTERNATIONAL LIMITED

OPINIONIn 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


statement of financiaL positionAS AT 31 DECEMBER 2009

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

Total equity and liabilities 104,623 108,775 75,499 74,709

The accompanying notes form an integral part of these financial statements.


consoLiDateD income statementYEAR ENDED 31 DECEMBER 2009

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

Other income 1,251 368

Sales and marketing expenses (5,305) (5,679)

Administrative expenses (10,187) (14,110)

Other expenses (747) (544)

Finance costs (177) (172)

Share of profit of associate and jointly-controlled entity (net of tax) 256 1,142

Profit before income tax 24 13,641 18,196

Income tax expense 25 (2,229) (4,009)

Profit for the year 11,412 14,187

Attributable to:

Equity holders of the Company 11,395 14,187

Minority interests 17 –


Earnings per share (cents)

Basic 26 2.51 3.14

Diluted 26 2.51 3.13



consoLiDateD statement of comprehensive incomeYEAR ENDED 31 DECEMBER 2009

Group

2009 2008

$’000 $’000


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



consoLiDateD statements of chanGes in eqUityYEAR ENDED 31 DECEMBER 2009

Attributable to equity holders of the Company

Note

Share

capital

Accumulated

profits

General

reserve

Merger

reserve

Goodwill

written

off

Share

option

reserve

Reserve

for own

shares

Exchange

translation

reserve Total

Minority

interest

Total

equity

Group $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

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



consoLiDateD cash fLoW statementYEAR ENDED 31 DECEMBER 2009

Group

2009 2008

Note $’000 $’000

Operating activities

profit before income tax 13,641 18,196

Adjustments for:

Accretion of deferred income (138) (322)

Amortisation of intangible assets 231 521

Depreciation of property, plant and equipment 1,070 1,528

Interest expense 177 172

Interest income (98) (100)

Loss on disposal of property, plant and equipment – 9

Loss on disposal of associate – 192

Impairment losses recognised on goodwill – 313

Impairment losses on property, plant and equipment – 175

Goodwill impairment on capitalisation of shareholder loan into a subsidiary 22 –

provision for warranties made/(written back) 108 (313)

Value of employee services received for issue of share options 162 115

Share of profits of associate/jointly-controlled entity (256) (1,142)

14,919 19,344

Changes in working capital:

Inventories and work-in-progress (6,761) 29,823

Trade and other receivables 5,260 25,727

Trade and other payables (4,243) (34,863)

Cash generated from operations 9,175 40,031

Income taxes paid (3,524) (3,698)

Cash flows from operating activities 5,651 36,333

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)

Balance carried forward 15,076 35,586



consoLiDateD cash fLoW statementYEAR ENDED 31 DECEMBER 2009

Group

2009 2008

Note $’000 $’000

Balance brought forward 15,076 35,586

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

Cash flows from financing activities (11,194) (17,777)

Net increase in cash and cash equivalents 3,882 17,809

Cash and cash equivalents at beginning of the year 42,609 25,008

Effect of exchange rate changes on balances held

in foreign currency 151 (208)

Cash and cash equivalents at end of the year 16 46,642 42,609



notes to the financiaL statements

These notes form an integral part of the financial statements.

The financial statements were authorised for issue by the Board of Directors on 15 March 2010.

1 DOMICILE AND ACTIVITIES

TeleChoice International Limited (the “Company” or “TeleChoice”) is incorporated in the Republic of

Singapore and has its place of business at 5 Clementi Loop Toll Asia Centre Level 2M, Singapore 129816.

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).

(b) Basis of measurement

The financial statements have been prepared on the historical cost basis except for certain financial

assets and liabilities, which are stated at fair values.

(c) Functional and presentation currency

These financial statements are presented in Singapore dollars, which is the Company’s functional

currency. All financial information presented in Singapore dollars has been rounded to the nearest

thousand, unless otherwise stated.

(d) Use of estimates and judgements

The preparation of financial statements in conformity with FRSs requires management to make

judgements, estimates and assumptions that affect the application of policies and reported amounts

of assets, liabilities, income and expenses. The estimates and associated assumptions are based

on historical experience and various other factors that are believed to be reasonable under the

circumstances, the results of which form the basis of making the judgements about carrying amounts

of assets and liabilities that are not readily apparent from other sources.



2 BASIS OF PREPARATION (Cont’d)(d) Use of estimates and judgements (Cont’d)

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting

estimates are recognised in the period in which the estimate is revised, if the revision affects only

that period, or in the period of the revision and future periods, if the revision affects both current

and future periods.

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:

Note 5 Assumptions of recoverable amounts relating to goodwill impairment

Note 9 Valuation of inventories

Note 11 Valuation of receivables

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.

(e) Changes in accounting policies

(i) Overview

Starting as of 1 January 2009 on adoption of new/revised FRSs, the Group has changed its

accounting policies in the following areas:

• Determinationandpresentationofoperatingsegments

• Presentationoffinancialstatements

(ii) Determination and presentation of operating segments

As of 1 January 2009, the Group determines and presents operating segments based on the

information that internally is provided to the president, who is the Group’s chief operating

decision maker. This change in accounting policy is due to the adoption of FRS 108 Operating

Segments. previously operating segments were determined and presented in accordance

with FRS 14 Segment Reporting. The new accounting policy in respect of operating segment

disclosures is presented as follows.

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.



2 BASIS OF PREPARATION (Cont’d)(e) Changes in accounting policies (Cont’d)

(ii) Determination and presentation of operating segments (Cont’d)

Segment results that are reported to the president include items directly attributable to a

segment as well as those that can be allocated on a reasonable basis. unallocated items

comprise mainly corporate assets (primarily the Company’s headquarters), head office expenses

and income tax assets and liabilities.

Segments capital expenditure is the total cost incurred during the period to acquire property,

plant and equipment, and intangible assets other than goodwill.

(iii) Presentation of financial statements

The Group applies revised FRS 1 Presentation of Financial Statements (2008), which became

effective as of 1 January 2009. As a result, the Group presents in the consolidated statement

of changes in equity all owner changes in equity, whereas all non-owner changes in equity are

presented in the consolidated statement of comprehensive income.

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.

3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESThe financial statements have been prepared in accordance with Singapore Financial Reporting Standards

(FRS).

3.1 Basis of consolidations

Subsidiaries

Subsidiaries are those companies controlled by the Company. Control exists when the Company has the

power, directly or indirectly, to govern the financial and operating policies of a company so as to obtain

benefits from its activities.

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.



3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)3.1 Basis of consolidations (Cont’d)

Jointly-controlled entities

Jointly-controlled entities are those enterprises over whose activities the Group has joint control, established

by contractual agreement and requiring unanimous consent for strategic financial and operating decisions.

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.

3.2 Business combinations

Business combinations are accounted for under the purchase method, except for reconstructions of

businesses under common control which are accounted for as described below. The cost of an acquisition is

measured at the fair value of the assets given, equity instruments issued and liabilities incurred or assumed

at the date of exchange, plus costs directly attributable to the acquisition.

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.



3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)3.2 Business combinations (Cont’d)

Eliminations on consolidation

All significant intra-group transactions, balances and unrealised gains are eliminated on consolidation.

Accounting for subsidiaries, jointly-controlled entity and associate by the Company

Investments in subsidiaries, associate and jointly-controlled entity are stated in the Company’s balance sheet

at cost less accumulated impairment losses.

3.3 Foreign currencies

Foreign currency transactions

Monetary assets and liabilities denominated in foreign currencies are translated to the respective functional

currencies of Group entities at rates of exchange closely approximated to those ruling at the balance sheet

date. The functional currencies of the Group entities comprise Singapore Dollars, Indonesian Rupiah, united

States Dollars, Malaysian Ringgit and Thai Baht. Transactions in foreign currencies are translated at rates

ruling on transaction dates. Translation differences are dealt with through the income statement.

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.

Net investment in a foreign operation

Exchange differences arising from monetary items that in substance form part of the Company’s net

investment in a foreign operation are recognised in the Company’s income statement. Such exchange

differences are reclassified to equity in the consolidated financial statements. When the hedged net

investment is disposed of, the cumulative amount in equity is transferred to the income statement as an

adjustment to the profit or loss arising on disposal.

3.4 Property, plant and equipment

Items of property, plant and equipment are stated at cost less accumulated depreciation and impairment

losses.

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.



3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)3.4 Property, plant and equipment (Cont’d)

Depreciation is provided on a straight-line basis so as to write off items of property, plant and equipment,

and major components that are accounted for separately, over their estimated useful lives, as follows:

Leasehold improvements – 2 to 5 years

Base station renovations – 5 years

plant and equipment – 1 to 5 years

Office furniture, fittings and equipment – 2 to 5 years

Computers – 2 to 3 years

Motor vehicles – 5 years

Depreciation methods, useful lives and residual values are reviewed and adjusted as appropriate, at each

reporting date.

3.5 Intangible assets

Retail business infrastructure

Retail business infrastructure acquired in a business combination represents the partnership agreement with

a major customer. The retail business infrastructure is amortised in the income statement on a straight-line

basis over 3 years, from the date of the agreement.

Customer and distributor network

Customer and distributor network acquired in a business combination represents the network of customers

and agents for the telecommunication services. Amortisation is charged to the income statement over 5

years on a straight-line basis commencing from the date of the business combination. In 2007, this has

been reclassified to goodwill.

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.



3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)3.5 Intangible assets (Cont’d)

Acquisitions occurring between 1 January 2001 and 1 January 2005


of the identifiable assets and liabilities of the acquiree.

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.

Acquisitions on and after 1 January 2005


of the identifiable assets, liabilities and contingent liabilities of the acquiree.

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.

Other intangible assets

Intangible assets are stated at cost less accumulated amortisation and impairment losses. Amortisation is

charged to the income statement over their estimated useful lives on a straight-line basis commencing from

the date the asset is available for use.

The estimated useful lives of computer software are 2 to 5 years.

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.



3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)3.6 Inventories (Cont’d)

When inventories are sold, the carrying amount of those inventories is recognised as an expense in the period

in which the related revenue is recognised. The amount of any allowance for write-down of inventories to

net realisable value and all losses of inventories are recognised as an expense in the period the write-down

or loss occurs. The amount of any reversal of any allowance for write-down of inventories, arising from an

increase in net realisable value, is recognised as a reduction in the amount of inventories recognised as an

expense in the period in which the reversal occurs.

3.7 Work in progress

Work-in-progress comprises uncompleted network engineering contracts. project work-in-progress is

accounted for under the percentage of completion method. The stage of completion is assessed by reference

to surveys of work performed.

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.

3.8 Non-derivative financial instruments

Non-derivative financial instruments comprise trade and other receivables (including balances with

related corporations), cash and cash equivalents, financial liabilities and trade and other payables. These

non-derivative financial instruments are recognised initially at fair value plus any directly attributable

transaction costs and subsequently measured at amortised cost using the effective interest method, less

allowance for impairment.

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.



3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)3.9 Leases

Finance leases

Finance leases are those leasing agreements that give rights approximating to ownership. property, plant

and equipment acquired by way of such leases is capitalised at the lower of its fair value and the present

value of the minimum lease payments at the inception of the lease, less accumulated depreciation and

impairment losses.

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.

Finance charges are charged directly to the income statement.

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.

3.10 Impairment of financial assets

A financial asset is considered to be impaired if objective evidence indicates that one or more events have

had a negative effect on the estimated future cash flows of that asset.

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.

3.11 Impairment of non-financial assets

The carrying amounts of the Company’s non-financial assets, other than inventories and deferred tax assets,

are reviewed at each reporting date to determine whether there is any indication of impairment. If any such

indication exists, the assets’ recoverable amounts are estimated. For goodwill, a recoverable amount is

estimated at each reporting date, and as and when indicators of impairment are identified.



3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)3.11 Impairment of non-financial assets (Cont’d)

An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds

its recoverable amount. A cash-generating unit is the smallest identifiable asset group that generates cash

flows that are largely independent from other assets and groups. Impairment losses are recognised in the

income statement. Impairment losses recognised in respect of cash-generating units are allocated first to

reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount

of the other assets in the unit (group of units) on a pro rata basis.

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.

3.12 Employee benefits

Defined contribution plans

Contributions to defined contribution plans are recognised as an expense in the income statement when

incurred.

Employee leave entitlements

Employees’ entitlements to annual leave are recognised when they accrue to employees. A provision is

made for the estimated liability for the annual leave as a result of services rendered by the employees up

to the balance sheet date.

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.



3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)3.12 Employee benefits (Cont’d)

Share-based payments (Cont’d)

Performance Share Plan and Restricted Stock Plan

The performance Share plan and the Restricted Stock plan are accounted as equity-settled share-based

payments. Equity-settled share-based payments are measured at fair value at the date of grant. The

share-based expense is amortised and recognised in the income statement on a straight-line basis over the

vesting period. At each balance sheet date, the Company revises its estimates of the number of shares that

the participating employees and directors are expected to receive based on non-market vesting conditions.

The difference is charged or credited to the income statement, with a corresponding adjustment to equity

over the remaining vesting period.

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.

3.13 Provision for warranties

A provision is recognised in the balance sheet when there is a legal or constructive obligation as a result of

a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation.

If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax

rate that reflects current market assessments of the time value of money and, where appropriate, the risks

specific to the liability.

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.

3.14 Revenue recognition

Revenue is recognised when goods are delivered and services rendered. Revenue for consignment goods

sold to convenience stores which have not been sold to consumers is deferred and presented in the balance

sheet as deferred income.

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.

3.15 Government grants – Jobs Credit Scheme

Cash grants received from the government in relation to the Jobs Credit Scheme are recognised as income

upon receipt.



3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)3.16 Finance cost

Interest expense and similar charges are expensed in the income statement in the period in which they are

incurred.

3.17 Income tax

Income tax on the results for the year comprises current and deferred tax. Income tax is recognised in the

income statement except for the tax effects of items recognised directly in equity, which are recognised in

the statement of changes in equity.

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.

3.18 Segment reporting

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. All operating segments’ operating results are reviewed regularly by the Group’s

president to make discussions about resources to be allocated to the segment and assess its performance,

and for which discrete financial information is available.

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.



4 PROPERTY, PLANT AND EqUIPMENT

Leasehold improvements

Base station renovations

plant and equipment

Office furniture,fittings and equipment Computers

Motor vehicles Total

Group $’000 $’000 $’000 $’000 $’000 $’000 $’000

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 – –

At 31 December 2008 1,374 283 17,112 686 2,965 128 22,548

Translation differences on consolidation 14 – 75 5 30 – 124

Additions 96 – 1,266 18 186 – 1,566

Disposals (44) – (613) (21) (79) (26) (783)

At 31 December 2009 1,440 283 17,840 688 3,102 102 23,455

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 – –

At 31 December 2008 1,060 283 16,145 608 2,604 106 20,806

Translation differences on consolidation 10 – 60 3 21 – 94

Depreciation for the year 199 – 497 55 311 8 1,070

Disposals (44) – (613) (21) (77) (20) (775)

At 31 December 2009 1,225 283 16,089 645 2,859 94 21,195

Carrying amount

At 1 January 2008 202 – 1,203 250 411 28 2,094

At 31 December 2008 314 – 967 78 361 22 1,742

At 31 December 2009 215 – 1,751 43 243 8 2,260



4 PROPERTY, PLANT AND EqUIPMENT (Cont’d)In the preceding financial year, owing to the intense price competition for its long distance call and

international calling card business in Malaysia, the Group has decided to terminate this business in

Malaysia. The Group assessed the recoverable amount of this business, based on its value in use, to be Nil.

Accordingly, an impairment loss of $175,000, representing the carrying value of the plant and machinery,

had been recognised under ‘administrative expenses’ in the income statement.

Leasehold

improvements

Office furniture,

fittings and

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)

At 31 December 2008 286 395 1,263 1,944

Additions 29 7 49 85

Disposals – – (13) (13)

At 31 December 2009 315 402 1,299 2,016

Accumulated depreciation

At 1 January 2008 267 350 940 1,557

Depreciation for the year 19 28 172 219

Disposals – (2) (17) (19)

At 31 December 2008 286 376 1,095 1,757

Depreciation for the year 12 11 136 159

Disposals – – (12) (12)

At 31 December 2009 298 387 1,219 1,904

Carrying amount

At 1 January 2008 19 46 207 272

At 31 December 2008 – 19 168 187

At 31 December 2009 17 15 80 112



5 INTANGIBLE ASSETSComputer

software

Retail business

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)

At 31 December 2008 2,030 1,304 873 4,207

Additions 76 – – 76

Acquisition of minority interest from the

capitalisation of shareholder loan – – 22 22

Disposal (13) – – (13)

At 31 December 2009 2,093 1,304 895 4,292

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)

At 31 December 2008 1,901 1,171 873 3,945

Amortisation charge for the year 98 133 – 231

Impairment charge – – 22 22

Disposal (13) – – (13)

At 31 December 2009 1,986 1,304 895 4,185

Carrying amount

At 1 January 2008 243 452 320 1,015

At 31 December 2008 129 133 – 262

At 31 December 2009 107 – – 107



5 INTANGIBLE ASSETS (Cont’d)The amortisation charge is recognised in the following line items of the income statement:

Group

2009 2008

$’000 $’000

Cost of sales 78 173

Administrative expenses 20 29

Other expenses 133 319

231 521

Impairment testing for goodwill on business combination

N-Wave Telecoms (Malaysia) Sdn. Bhd.

In the previous financial year, the Group’s management has decided to terminate the business in Malaysia

and assessed the recoverable amount from the entire customer and agent network, being the single cash

generating unit (“CGu”) to be Nil. The carrying amount of the CGu (inclusive of the goodwill) was impaired

in full and the impairment loss of $313,000 was recognised in ‘other expenses’ in the consolidated financial

statements.

Impairment testing for retail business infrastructure

The Group’s management identified Singapore’s pCS business as a cash generating unit (CGu) for purpose of

impairment testing of the retail business infrastructure. The recoverable amount of the CGu was estimated

based on its value-in-use calculation.

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 SUBSIDIARIESCompany

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:

Name of subsidiary principal activitiesCountry of incorporation

Effective equity held by the Group

2009 2008

% %

NexWave Technologies pte Ltd provision of network engineering services

Singapore 100 100

NexWave Telecoms pte. Ltd. provision of telecommunication services

Singapore 100 100

NexWave Solutions pte. Ltd. provision of public mobile data and location tracking services

Singapore 100 100

planet Telecoms (S) pte Ltd Sale of telecommunication equipment

Singapore 92 85

N-Wave Technologies (Malaysia) Sdn Bhd

provision of network engineering services

Malaysia 100 100

TeleChoice philippines Inc. Dormant philippines 80 80

TeleChoice (Indonesia) pte Ltd Dormant Singapore 100 100

TeleChoice (Thailand) Ltd Dormant Thailand 100 100

Held by TeleChoice (Indonesia) Pte Ltd:

pT TeleChoice Indonesia Dormant Indonesia 100 100

Held by NexWave Telecoms Pte. Ltd.:

Sunpage Communications pte Ltd

provision of telecommunication related services

Singapore 100 100

N-Wave Telecoms (Malaysia) Sdn Bhd

provision of telecommunication related services

Malaysia 100 100

Held by NexWave Technologies Pte Ltd:

pT NexWave provision of network engineering services

Indonesia 100 100



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.

7 ASSOCIATE AND JOINTLY-CONTROLLED ENTITYGroup Company

2009 2008 2009 2008

$’000 $’000 $’000 $’000

Interest in jointly-controlled entity 1,248 941 955 955



7 ASSOCIATE AND JOINTLY-CONTROLLED ENTITY (Cont’d)Details of jointly-controlled entity and associate are as follows:

Name of jointly-controlled entity and associateCountry of incorporation

Effective equity held by the Group

2009 2008

% %

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:

Associate Jointly-controlled entity

2009 2008 2009 2008

$’000 $’000 $’000 $’000

Results

Revenue – 147,184 38,271 48,879

Expenses – (145,965) (37,911) (48,668)

profit before taxation – 1,219 360 211

Taxation – (205) (104) (83)

profit after taxation – 1,014 256 128

Assets and liabilities

Non-current assets – – 111 87

Current assets – – 3,346 2,004

Current liabilities – – (2,131) (1,105)

Non-current liability – – (78) (45)

Net assets – – 1,248 941



8 DEFERRED TAX ASSETS AND LIABILITIESMovements in deferred tax assets and liabilities (prior to offsetting of balances) during the year are as

follows:

At1 January

2008

Charged/(credited)

to income statement

(Note 25)

At31 December

2008

Charged/(credited)

to income statement

(Note 25)

At31 December

2009

Group $’000 $’000 $’000 $’000 $’000

Deferred tax assets

property, plant and equipment (131) 8 (123) 108 (15)

Inventories (39) (56) (95) 52 (43)

Accruals (294) 102 (192) 35 (157)

unutilised tax losses (279) 279 – – –

(743) 333 (410) 195 (215)

Deferred tax liabilities

property, plant and equipment 449 (104) 345 (48) 297

Accruals (80) 23 (57) 79 22

369 (81) 288 31 319

Company

Deferred tax assets

Inventories (33) (54) (87) 61 (26)

provision for warranties (66) 57 (9) (1) (10)

Accrual for unconsumed leave (34) 7 (27) 6 (21)

(133) 10 (123) 66 (57)

Deferred tax liabilities

property, plant and equipment 43 (11) 32 (13) 19

43 (11) 32 (13) 19



8 DEFERRED TAX ASSETS AND LIABILITIES (Cont’d)Deferred tax liabilities and assets are offset when there is a legally enforceable right to offset current tax

assets against current tax liabilities and when the deferred taxes relate to the same taxation authority. The

amounts determined after appropriate offsetting are included in the balance sheet as follows:

Group Company

2009 2008 2009 2008

$’000 $’000 $’000 $’000

Deferred tax assets 137 208 38 91

Deferred tax liabilities 241 86 – –

The following deductible temporary differences have not been recognised:

Group

2009 2008

$’000 $’000

unutilised tax losses 2,070 2,150

unrecognised deferred tax assets 432 464

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 INVENTORIESGroup 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-PROGRESSGroup

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

11 TRADE AND OTHER RECEIVABLESGroup Company

Note 2009 2008 2009 2008

$’000 $’000 $’000 $’000

Trade receivables 7,957 8,647 1,849 1,289

Allowance for doubtful receivables (327) (247) (147) (42)

Net receivables 7,630 8,400 1,702 1,247

Other receivables and deposits 12 2,234 12,948 368 10,766

Amounts due from:

– related parties 13 18,456 22,821 9,181 12,038

– subsidiaries 14 – – 5,253 5,924

– holding companies 15 4 49 4 3

Loans and receivables 28,324 44,218 16,508 29,978

prepayments 923 655 256 75

29,247 44,873 16,764 30,053

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



11 TRADE AND OTHER RECEIVABLES (Cont’d)Impairment lossesThe ageing of loans and receivables (excluding unbilled receivables) at the reporting date is:

GrossImpairment

losses GrossImpairment

losses

2009 2009 2008 2008

$’000 $’000 $’000 $’000

Group

Not past due 20,019 – 30,509 25

past due 0 – 30 days 1,135 31 5,888 5

past due 31 – 120 days 464 24 1,607 34

past due 121 – 360 days 599 172 184 128

More than one year 100 100 55 55

22,317 327 38,243 247

Company

Not past due 13,270 – 24,903 –

past due 0 – 30 days – – 1,047 –

past due 31 – 120 days 130 – 857 42

past due 121 – 360 days 147 147 – –

More than one year – – 53 –

13,547 147 26,860 42

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.



12 OTHER RECEIVABLES AND DEPOSITSGroup Company

2009 2008 2009 2008

$’000 $’000 $’000 $’000

Deposits 668 570 2 2

unbilled receivables 785 457 –

Dividend receivable from joint venture entity/subsidiaries – 150 350 150

Other receivables 781 11,771 16 10,614

2,234 12,948 368 10,766

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).

13 AMOUNTS DUE FROM AND TO RELATED PARTIESGroup Company

2009 2008 2009 2008

$’000 $’000 $’000 $’000

Amounts due from related parties:

– related corporations (trade) 18,445 22,821 9,181 12,038

– related corporations (non-trade) 11 – – –

18,456 22,821 9,181 12,038

Amounts due to related parties:

– related corporations (trade) 683 487 – 113

– related corporations (non-trade) 37 4 37 4

720 491 37 117

The non-trade amounts due to related corporations are unsecured and interest-free, and repayable on

demand.

Trade amounts due from related corporations include the followings:

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



14 AMOUNTS DUE FROM AND TO SUBSIDIARIESCompany

2009 2008

$’000 $’000

Amounts due from subsidiaries:

– trade 1,365 1,864

– non-trade 888 149

– short-term loans 3,000 3,953

Allowance for doubtful receivables on short-term loans and trade balance – (42)

5,253 5,924

Amounts due to subsidiaries:

– trade 9 –

– non-trade 30 42

39 42

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).

15 AMOUNTS DUE FROM AND TO HOLDING COMPANIESGroup Company

2009 2008 2009 2008

$’000 $’000 $’000 $’000

Amounts due from immediate holding company (trade) 4 49 4 3

Amounts due to immediate holding company (non-trade) 147 200 147 200

The non-trade amounts due to the immediate holding company are unsecured and interest-free, and repayable

on demand.



16 CASH AND CASH EqUIVALENTSGroup Company

2009 2008 2009 2008

$’000 $’000 $’000 $’000

Cash at banks and in hand 21,464 14,158 13,922 5,789

Short-term bank deposits 25,178 28,451 16,000 20,000

46,642 42,609 29,922 25,789

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 CAPITALGroup and Company

2009 2008

NoteNo. of shares

No. of shares

(’000) $’000 (’000) $’000

Fully paid ordinary shares with no par value:

Ordinary shares

At 1 January 453,165 21,066 451,742 20,770

Exercise of share options 22 150 641 1,423 296

At 31 December 453,315 21,707 453,165 21,066

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.



17 SHARE CAPITAL (Cont’d)Capital management

The Board’s policy when managing capital is to safeguard the Group’s ability to continue as a going concern

and to maintain an optimal capital structure to maximise shareholder value. The Board of Directors monitors

the return on capital employed, which the Group defines as net operating income plus financing costs after

tax divided by total shareholders’ equity plus borrowings. The Board also monitors the level of dividends to

ordinary shareholders.

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 RESERVESGroup 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.

Merger reserve comprise the following:

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.



19 TRADE AND OTHER PAYABLESGroup Company

Note 2009 2008 2009 2008

$’000 $’000 $’000 $’000

Trade payables 12,794 12,290 5,310 3,046

prepayments and deposits from customers 20 31 – –

Accruals for payroll and staff related costs 4,079 3,956 2,215 2,108

Accrued expenses 10,082 16,051 3,449 4,427

Amounts due to:

– related parties 13 720 491 37 117

– subsidiaries 14 – – 39 42

– holding companies 15 147 200 147 200

27,842 33,019 11,197 9,940

20 FINANCIAL LIABILITIESGroup 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

Terms and debts repayment schedule

Terms and conditions of outstanding loans and borrowings are as follows:

2009 2008

Nominal interest Year of

Face value

Carrying amount

Face value

Carrying 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



20 FINANCIAL LIABILITIES (Cont’d)Terms and debts repayment schedule (Cont’d)

The following are the expected contractual undiscounted cash outflows of financial liabilities:

Cash flows

Carrying amount

Contractual cashflows

Within 1 year

Within 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



37,988 (38,015) (38,015) –

Company

2009



14,197 (14,234) (14,234) –

2008



12,940 (12,962) (12,962) –

21 PROVISION FOR WARRANTIESGroup Company

2009 2008 2009 2008

$’000 $’000 $’000 $’000

At 1 January 104 434 49 362

provision made/(written back) 108 (313) 7 (313)

provision utilised – (17) – –

At 31 December 212 104 56 49

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.



22 EqUITY COMPENSATION BENEFITSa) Employee share options

The TeleChoice pre-IpO Share Option Scheme (the “pre-IpO Scheme”) and the TeleChoice post-IpO Employee Share Option Scheme (the “post-IpO Scheme”) (collectively referred to as the “Schemes”), were approved and adopted by the members at an Extraordinary General Meeting of the Company held on 7 May 2004.

Pre-IPO SchemeInformation 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:

Vesting schedule

percentage of Sharesover which an option is

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.

Post – IPO SchemeInformation regarding the post-IpO Scheme is set out below:

(i) The post-IpO Scheme is administered by the Committee.

(ii) The eligible participants of the post-IpO Scheme are:

• executiveandnon-executivedirectorsandemployeesoftheCompanyanditssubsidiariesand associated companies.

• executiveandnon-executivedirectorsandemployeesofSTTCanditssubsidiaries.

• controlling shareholders of the Company and the associates of the controllingshareholders.



22 EqUITY COMPENSATION BENEFITS (Cont’d)a) Employee share options (Cont’d)

Post – IPO Scheme (Cont’d)

(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 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:

Exercise price No. of options Exercise price No. of options

2009 2009 2008 2008

$ (’000) $ (’000)

At 1 January 0.2079 2,784 0.2079 4,457

Forfeited 0.2079 (1,526) 0.2079 (250)

Exercised 0.2079 (150) 0.2079 (1,423)

At 31 December 0.2079 1,108 0.2079 2,784

Exercisable at 1 January 2,784 1,970

Exercisable at 31 December 1,108 2,784

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.



22 EqUITY COMPENSATION BENEFITS (Cont’d)a) Employee share options (Cont’d)

Share options outstanding at the end of the year have the following expiry dates and exercise

price:

Date of grant Options outstanding

of options Exercise period Exercise price 2009 2008$ (’000) (’000)

18 May 2004 18/5/2005 to 17/5/2009 0.2079 – 75

18 May 2004 18/5/2006 to 17/5/2009 0.2079 – 75

18 May 2004 18/5/2007 to 17/5/2009 0.2079 – 75

18 May 2004 18/5/2008 to 17/5/2009 0.2079 – 75

18 May 2004 18/5/2005 to 17/5/2014 0.2079 25 100

18 May 2004 18/5/2006 to 17/5/2014 0.2079 40 116

18 May 2004 18/5/2007 to 17/5/2014 0.2079 130 668

18 May 2004 18/5/2008 to 17/5/2014 0.2079 913 1,600

1,108 2,784

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.

Date of grant of options 18/05/2004 18/05/2004 18/05/2004 18/05/2004

Vesting date 18/05/2005 18/05/2006 18/05/2007 18/05/2008

Fair value of share options and assumptions:

Fair value at measurement date $0.059 $0.053 $0.048 $0.044

Share price $0.29 $0.29 $0.29 $0.29

Exercise price $0.2079 $0.2079 $0.2079 $0.2079

Expected volatility 20% 20% 20% 20%

Expected option life 2.0 years 3.0 years 4.0 years 5.0 years

Expected dividends 6.9% 6.9% 6.9% 6.9%

Risk-free interest rate 1.50% 1.75% 1.75% 2.07%

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.



22 EqUITY COMPENSATION BENEFITS (Cont’d)b) TeleChoice Restricted Share Plan and Performance Share Plan

The TeleChoice Restricted Share plan (the “TeleChoice RSp”) and TeleChoice performance Share

plan (the “TeleChoice pSp”) (collectively referred to as the “plans”), were approved and adopted by

the members at an Extraordinary General Meeting of the Company held on 27 April 2007.

Information regarding the plans is set out below:

(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.

(ii) The plans are administered by the Committee.

(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

c. employees of associated companies.

(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.



22 EqUITY COMPENSATION BENEFITS (Cont’d)b) TeleChoice Restricted Share Plan and Performance Share Plan (Cont’d)

The key assumptions applied in estimating the fair values under the TeleChoice pSp are as follows:

Date of grant of shares 1 June 2009 1 June 2008 1 June 2007

Fair value at grant date $0.144 $0.189 $0.142

Assumptions under Monte-Carlo Model Expected Volatility

TeleChoice International Limited 30.42% 26.12% 27.95%

Straits Times Index 31.38% 17.60% 10.04%

Risk-free interest rates

Singapore 3-year Government Bond yield 0.74% 1.70% 2.45%

The key assumptions applied in estimating the fair values under TeleChoice RSp are as follows:

Date of grant of shares 1 June 2009 1 June 2008 1 June 2007

Fair value at grant date:

For RSp vested 24 months from grant date $0.166 $0.199 $0.195



Assumptions under Monte-Carlo Model Expected Volatility

TeleChoice International Limited 30.42% 26.12% 27.95%

Risk-free interest rates




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 REVENUERevenue 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

24 PROFIT BEFORE INCOME TAXprofit before income tax is arrived at after including the following items:

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



24 PROFIT BEFORE INCOME TAX (Cont’d)Group

2009 2008

$’000 $’000

Other income

Service income 2 49

Interest income

– banks and financial institutions 92 97

– jointly-controlled entity 6 3

Government grant income from Jobs Credit Scheme* 719 –

Economic benefit recognised from disposal of associate 187 –

Others 245 219

1,251 368

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.

25 INCOME TAX EXPENSEGroup

Note 2009 2008

$’000 $’000

Current tax expense

Current year 2,209 3,811

Overprovision of tax expense in prior years (206) (54)

2,003 3,757

Deferred tax expense

Origination and reversal of temporary differences 226 (2)

Deferred tax assets previously recognised, now written off – 254

8 226 252

Income tax expense 2,229 4,009



25 INCOME TAX EXPENSE (Cont’d)Group

2009 2008$’000 $’000

Reconciliation of effective tax rate

profit before taxation 13,641 18,196

Income tax using Singapore tax rate of 17% (2008: 18%) 2,319 3,275Tax savings as a result of utilising tax losses not previously recognised (32) (6)Non-deductible expenses 358 426Non-taxable income (445) (292)Tax losses and other deductible temporary differences not recognised – 331Effect of different tax rates in other countries 235 75Overprovision in respect of prior years’ current tax (206) (54)Deferred tax assets previously recognised, now written off – 254

2,229 4,009

26 EARNINGS PER SHAREGroup

2009 2008$’000 $’000

Basic earnings per share is based on:profit attributable to equity holders of the Company 11,395 14,187

Number of shares2009 2008(’000) (’000)

Issued ordinary shares at beginning of the year 452,967 451,442Effect of share options exercised 103 907Effect 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.

Group2009 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.



26 EARNINGS PER SHARE (Cont’d)The effect of the exercise of share options on the weighted average number of ordinary shares in issue is as follows:

GroupNumber 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.

27 SIGNIFICANT RELATED PARTY TRANSACTIONSIn the normal course of business, the Group purchases and sells products and services to related parties. Significant transactions with related parties, other than those disclosed elsewhere in the financial statements, are as follows:

Group

2009 2008

$’000 $’000

Ultimate Holding Company

Revenue from sale of products and provision of services 108 319

Immediate Holding Company

Revenue from sale of products and provision of services 58 104

Management fees 57 33

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 SEGMENTSThe 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.

• Telecommunications Services: This division operates under wholly-owned subsidiary, Nexwave

Telecoms pte Ltd (“Nexwave Telecoms”) (formerly known as ST Sunpage pte Ltd). Nexwave

Telecoms provides next generation communications & application solutions. An integrated provider

of hosted Ip telephony and cloud computing applications, it offers a suite of unified Communications

(uC)-as-a-service and Software-as-a-service solutions with next generation platform and on-premises

solutions supported by leading technology partners such as Avaya, Aruba, Aastra, Hp, Google and

Microsoft. Aside from its enterprise-focused solutions, it is leading voice and data services provider

offering a full range of iDD, Roaming and Callback services, Conferencing Solutions, SMS Messaging

and paging, Location Tracking and Mobile Data Network Services. These services are branded and

marketed under the recognised ‘Sunpage’ suite of call services and solutions, including the popular

‘Sunpage iDD 1521’ which reaches over 300 destinations and the pre-paid ‘Sunpage International

Calling Card’, distributed at retail locations throughout Singapore.

• Network Engineering Services: This division, through wholly-owned subsidiary, Nexwave

Technologies pte Ltd, is a regional value-add product aggregator and total solutions provider to

mobile and fixed network operators, equipment vendors and service providers in the Asia-pacific.

Its network engineering solutions and services encompass radio network planning and optimisation,

transmission network planning, network implementation, testing and commissioning, indoor coverage

design and implementation, network benchmarking and audit, operations, maintenance and project

management.



28 OPERATING SEGMENTS (Cont’d)Geographical Segments

The Group has operations primarily in Singapore and Indonesia. The rest are mainly export customers in

Hong Kong.

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.

Information about Reportable Segmentspersonal

communicationssolutions services

Telecommunicationsservices

Network engineeringservices Total

2009 2008 2009 2008 2009 2008 2009 2008

$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Revenue and expenses

Total revenue from external customers 217,295 291,479 15,432 21,701 40,963 40,835 273,690 354,015

Inter-segment revenue – 7 19 15 – – 19 22

217,295 291,486 15,451 21,716 40,963 40,835 273,709 354,037

Government grant income from Jobs Credit Scheme 383 – 211 – 125 – 719 –

Interest income 209 112 23 82 1 33 233 227

Interest expenses 97 150 – – 215 149 312 299

Depreciation 358 428 395 752 317 348 1,070 1,528

Amortisation 133 319 66 149 32 53 231 521

Reportable segment profit before income tax 10,286 11,872 1,168 2,060 1,931 3,122 13,385 17,054

Share of profit of associate and jointly-controlled entity (net of tax) – 1,014 256 128 – – 256 1,142

Other material non-cash items:

– Impairment loss on property, plant and equipment – – – 175 – – – 175

– Impairment loss on goodwill 22 – – 313 – – 22 313

Reportable segment assets 59,201 58,916 14,884 14,408 29,290 34,510 103,375 107,834

Investment in associates & jointly-controlled entity 1,248 941 – – – – 1,248 941

Capital expenditure

– property, plant and equipment 135 436 932 771 499 265 1,566 1,472

– Intangible assets – – 24 74 52 14 76 88

Reportable segment liabilities 18,132 16,959 4,888 6,122 11,972 19,836 34,992 42,917



28 OPERATING SEGMENTS (Cont’d)Information about Reportable Segments (Cont’d)

Reconciliations of reportable segment revenue, profit or loss, assets and liabilities and other material

items:

Group

2009 2008

$’000 $’000

Revenue

Total revenue for reportable segments 273,709 354,037

Elimination of inter-segment revenue (19) (22)

Consolidated revenue 273,690 354,015

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

Consolidated profit before income tax 13,641 18,196

Assets

Total assets for reportable segments 103,375 107,834

Investments in associate and jointly-controlled entity 1,248 941

Consolidated total assets 104,623 108,775

Liabilities

Total liabilities for reportable segments 34,992 42,917



28 OPERATING SEGMENTS (Cont’d)Other material items 2009

Reportablesegment totals Adjustments

Consolidatedtotals

$’000 $’000 $’000

Government grant income from Jobs Credit Scheme (719) – (719)Interest income (233) 135 (98)Interest expenses 312 (135) 177Capital expenditure– property, plant and equipment 1,566 – 1,566– intangible assets 76 – 76Impairment loss on goodwill 22 – 22

Other material items 2008

Interest income (227) 127 (100)Interest expenses 299 (127) 172Capital expenditure– property, plant and equipment 1,472 – 1,472– intangible assets 88 – 88Impairment loss on property, plant and equipment 175 – 175Impairment loss on goodwill 313 – 313

Geographical information

RevenueNon-current

Assets$’000 $’000

31 December 2009

Singapore 220,646 1,838Indonesia 21,511 523Malaysia 196 6Hong Kong 30,692 –Dubai 266 –Other countries 379 –

Consolidated total 273,690 2,367

31 December 2008

Singapore 300,361 1,730Indonesia 20,208 273Malaysia 1,511 1Hong Kong 30,544 –Dubai 397 –Other countries 994 –

Consolidated total 354,015 2,004



28 OPERATING SEGMENTS (Cont’d)Major Customer

Revenue from one customer of the Group’s personal communications solution and one customer of network

engineering services segments represents approximately 52% (2008: 51%) of the Group’s total revenues.

29 FINANCIAL RISK MANAGEMENTOverview

The Group’s activities expose it to credit risk, liquidity risk and market risk (including interest rate risk and

currency risk). The Group has a system of controls in place to create an acceptable balance between the

cost of risks occurring and the cost of managing the risks. The management continually monitors the Group’s

risk management process to ensure that an appropriate balance between risk and control is achieved. Risk

management policies and systems are reviewed regularly to reflect changes in market conditions and the

Group’s activities.

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.

Trade and other receivables

The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. As

at 31 December 2009, the Group has 53% (2008: 79%) of total receivables due from two major receivables,

and approximately 52% (2008: 51%) of the Group’s revenue is attributable to sales transactions with these

two 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.



29 FINANCIAL RISK MANAGEMENT (Cont’d)Liquidity riskThe Group monitors its liquidity risk and maintains a level of cash and cash equivalents deemed adequate by management to finance the Group’s operations and to mitigate the effects of fluctuations in cash flows. The Group maintains sufficient level of cash and cash equivalent to meet its working capital. When required, the Group also obtains short-term bridging arrangement with banks to pay for their purchases of handsets equipment.

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.

Cash flow and fair value interest rate riskCash flow interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Fair value interest rate risk is the risk that the fair value of a financial instrument will fluctuate due to changes in market interest rates. The Group’s exposure to cash flow interest rate risks arises mainly from short-term floating rate borrowings.

Effective interest rate and repricing analysisIn respect of the interest-earning financial assets and interest-bearing financial liabilities, the following table indicates their effective interest rates at the balance sheet date and the periods in which they reprice:

Effectiveinterest

Within1 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




unsecured bank loans 2.88 to 3.25 5,000



29 FINANCIAL RISK MANAGEMENT (Cont’d)Effective interest rate and repricing analysis (Cont’d)

Effectiveinterest

Within1 year

% $’000

Company

2009

Financial assets




unsecured bank loan 2.39 3,000

2008

Financial assets




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 bpincrease

100 bpdecrease

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)



29 FINANCIAL RISK MANAGEMENT (Cont’d)Foreign currency risk

The Group incurs foreign currency risk in respect of bank deposits as well as sales and purchases that are

denominated in a currency other than the Group entities functional currencies. The currency giving rise to

this risk is primarily the uS dollar and the risk arises mainly from timing mismatches between such sales and

purchases denominated in uS dollars. The Group ensures that its net exposure is kept to an acceptable level

by buying or selling foreign currencies at spot rates when necessary to address short-term imbalances.

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



29 FINANCIAL RISK MANAGEMENT (Cont’d)Foreign currency risk

Sensitivity analysis

A 10 percent strengthening of the following currencies against Singapore Dollar at 31 December would have

increased (decreased) profit before tax by the amounts shown below. This analysis assumes that all other

variables, in particular interest rates, remain constant.

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.

Estimating the fair values

The notional amounts of financial assets and liabilities with a maturity of less than one year (including trade

and other receivables, cash and cash equivalents, trade and other payables and financial liabilities) are

assumed to approximate their fair values because of the short period to maturity.

30 COMMITMENTSThe 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 GUARANTEEThe Group has provided the following guarantees to third parties during the financial year:

• Performance guarantees in respect of customers and suppliers contracts projects amounting to$680,000 (2008: $1,097,000).

• Corporate guarantee amounting to $6,537,000 (2008: $872,000) in respect of purchases by twosubsidiaries.

32 SUBSEqUENT EVENTSSubsequent 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.

33 NEW ACCOUNTING STANDARDS AND INTERPRETATIONS NOT YET ADOPTEDThe Group has not applied the following accounting standards (including its consequential amendments) and interpretations that have been issued as of the balance sheet date but are not yet effective:

• AmendmentstoFRS32Financial Instruments: Presentation – Classification of Rights Issues

• Amendments to FRS 39 Financial Instruments: Recognition and Measurement – Eligible Hedged Items

• Amendment to FRS 102 Share-based Payment – Group cash-settled share-based payment transactions

• FRS103 (revised2008)Business Combinations and FRS 27 (amended) Separate and Consolidated Financial Statements

• ImprovementstoFRSs2009

• INTFRS117Distributions of Non-cash Assets to Owners

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.


sUppLementary information(SGX-ST LISTING MANuAL DISCLOSuRE REQuIREMENTS)

1 DIRECTORS’ REMUNERATIONCompany’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:

$500,000 and above – –

$250,000 to below $500,000 – –

Below $250,000 – –

– –

2 INTERESTED PERSON TRANSACTIONSAggregate value of all

transactions conducted under a shareholders’ mandate pursuant

to Rule 920 of the SGX Listing Manual

2009 2008

$’000 $’000

Transactions for the sales of goods and services 130,851 176,800

Temasek Holdings (private) Limited and its Associates 130,851 176,800

Transactions for the purchase of goods and services 35,400 6,784

Temasek Holdings (private) Limited and its Associates 35,400 6,784

Total Interested Person Transactions 166,251 183,584

3 MATERIAL CONTRACTSThere 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.


sharehoLDinGs statisticsAS AT 15 MARCH 2010

Class of shares – Ordinary shares

Voting rights – 1 vote per ordinary share

ANALYSIS OF SHAREHOLDINGS

Size of Shareholdings No. of Shareholders % No. of Shares %

1 – 999 0 0.00 0 0.00

1,000 – 10,000 1,279 51.33 6,541,500 1.44

10,001 – 1,000,000 1,197 48.03 87,046,500 19.20

1,000,001 and above 16 0.64 359,726,500 79.36

2,492 100.00 453,314,500 100.00

TOP 20 SHAREHOLDERS

No. Name of Shareholder No. of Shares %*

1 STT Communications Ltd 228,937,500 50.51

2 Leap International pte Ltd 88,198,000 19.46

3 united Overseas Bank Nominees pte Ltd 7,386,000 1.63

4 Citibank Consumer Nominees pte Ltd 7,000,000 1.54

5 Choo Soon Kiah 6,800,000 1.50

6 Ng Hian Chow 5,010,000 1.11

7 DBS Nominees pte Ltd 3,010,000 0.66

8 Tan Chwee Huat 1,880,000 0.41

9 Tan Kia Hong 1,793,000 0.40

10 DBS Vickers Securities (S) pte Ltd 1,691,000 0.37

11 OCBC Nominees Singapore pte Ltd 1,464,000 0.32

12 DB Nominees (S) pte Ltd 1,440,000 0.32

13 Tay Kiong Hong 1,317,000 0.29

14 Goh Albert @ Goh Men San Albert 1,300,000 0.29

15 Lim Chai Hock Clive 1,300,000 0.29

16 Helen Chee 1,200,000 0.26

17 Yeo Kock Tay 1,000,000 0.22

18 Raffles Nominees (pte) Ltd 890,000 0.20

19 Koh Boon Ting 888,000 0.20

20 Lim Siow Sun Nee Lau Yuen Ling 800,000 0.18

363,304,500 80.15

* 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).


sharehoLDinGs statisticsAS AT 15 MARCH 2010

SUBSTANTIAL SHAREHOLDERS(As recorded in the Register of Substantial Shareholders)

Name Direct Interest % (4) Deemed Interest % (4)

Leap International pte Ltd 89,198,000 19.46 – –

Lim Chai Hock Clive (1) 1,300,000 0.29 88,198,000 19.46

Michelle Ho Li Ann (2) – – 89,498,000 19.75

STT Communications Ltd (3) 228,937,500 50.51 – –

Singapore Technologies Telemedia pte Ltd (3) – – 228,937,500 50.51

Temasek Holdings (private) Limited (3) – – 228,937,500 50.51

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).

SHAREHOLDINGS HELD IN HANDS OF PUBLIC

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.


GroUp strUctUreP

erso

nal C

omm

unic

atio

ns S

olut

ions

Net

wor

k E

ngin

eerin

gTe

leco

mm

unic

atio

ns

100%

100%

NexWave Solutions Pte. Ltd.100%

PT Sakalaguna Semesta49%

NexWave Telecoms Pte. Ltd.100%

99%

1%

* 51% held in trust by Promyos SnitwongseTeleChoice (Thailand) Ltd*49%

TeleChoice (Indonesia) Pte Ltd100%

TeleChoice Philippines Inc80%

0.01%

99.99%

N-Wave Technologies (Malaysia) Sdn Bhd100%

Planet Telecoms (S) Pte Ltd92.1%

NexWave Technologies Pte Ltd100%

PT TeleChoice (Indonesia)

N-Wave Telecoms (Malaysia) Sdn Bhd


PT NexWave

SunPage Communications Pte Ltd

* Effective interest held by TeleChoice International Limited in TeleChoice (Thailand) Ltd is 100%.


notice of tWeLfth annUaL GeneraL meetinG

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 2009 and the Directors’ and Auditors’ Report thereon.

Resolution 1

2. To declare a final tax exempt (one-tier) dividend of 1.75 cents per ordinary share in the capital of the Company (“Share”), for the financial year ended 31 December 2009.

Resolution 2

3. That pursuant to Section 153(6) of the Companies Act (Cap. 50) (the “Companies Act”), 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.

Resolution 3

See Explanatory Note (a)

4. To re-elect Mr Yen Se-Hua Stewart, who is retiring in accordance with Article 91 of the Articles of Association of the Company.

Resolution 4

See Explanatory Note (b)

5. To re-elect Mr Tang Yew Kay Jackson, who is retiring in accordance with Article 91 of the Articles of Association of the Company.

Resolution 5

See Explanatory Note (c)

6. To approve Directors’ Fees of $383,000 for the financial year ended 31 December 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).

Resolution 6

7. To re-appoint KpMG LLp as auditors of the Company and to authorise the Directors to fix their remuneration.

Resolution 7

AS SPECIAL BUSINESSTo consider and, if thought fit, to pass the following resolutions as Ordinary Resolutions:

8. That authority be and is hereby given to the Directors to: Resolution 8

(a) (i) issue Shares whether by way of rights, bonus or otherwise; and/or

(ii) make or grant offers, agreements or options (collectively, “Instruments”) that might or would require Shares to be issued, including but not limited to the creation and issue of (as well as adjustments to) warrants, debentures or other instruments convertible into Shares,



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);

(ii) (subject to such manner of calculation as may be prescribed by the Singapore

Exchange Securities Trading Limited (the “SGX-ST”)) for the purpose of

determining the aggregate number of Shares that may be issued under

sub-paragraph 8(i) above, the percentage of issued Shares (excluding treasury

shares) shall be based on the number of issued Shares (excluding treasury shares)

in the capital of the Company at the time this Resolution is passed, and adjusting

for: (1) 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 this Resolution is passed; and (2) any subsequent bonus

issue, consolidation or subdivision of Shares;

(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.

See Explanatory Note (d)



9. That authority be and is hereby given to the Directors to allot and issue from time to

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.

Resolution 9

See Explanatory Note (e)

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.

See Explanatory Note (f)



11. That: Resolution 11

(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.

12. That: Resolution 12

(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;

(c) in this Resolution:

“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



“Maximum Price”, in relation to a Share to be purchased or acquired, means the

purchase price (excluding brokerage, commission, applicable goods and services

tax and other related expenses) which shall not exceed:

(i) in the case of a market purchase of a Share, 105% of the Average Closing

price of the Shares; and

(ii) in the case of an off-market purchase of a Share pursuant to an equal

access scheme, 110% 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 BUSINESS13. To transact any other business that may be transacted at an Annual General Meeting of the Company.

By Order Of The Board

pek Siok Lan

Company Secretary

Singapore, 13 April 2010

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.

2. A proxy need not be a member of the Company.

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.



Notice of Books Closure and Dividend Payment Dates

Subject to shareholders’ approval of the payment of the proposed final dividend at the Twelfth Annual General Meeting to be convened on 28 April 2010, the Share Transfer Books and Register of Members of the Company will be closed from 6 May 2010 to 7 May 2010 (both dates inclusive).

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.

This page has been intentionally left blank

TELECHOICE INTERNATIONAL LIMITED(Registration No. 199802072R)(Incorporated in the Republic of Singapore)

PROXY FORMTwelfth Annual General Meeting

IMPORTANT

1. For investors who have used their CpF monies to buy shares in the capital of TeleChoice International Limited, this Annual Report is forwarded to them at the request of their CpF Approved Nominees and is sent FOR INFORMATION ONLY.

2. This proxy Form is not valid for use by such CpF investors and shall be ineffective for all intents and purposes if used or purported to be used by them.

I/We (Name) NRIC/passport/Co. Reg. No.

of (Address)

being a member/members of TELECHOICE INTERNATIONAL LIMITED (the “Company”) hereby appoint:

Name AddressNRIC/Passport

Number

Proportion of Shareholdings

No. of shares %

and/or (delete as appropriate)

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.)

No. Ordinary Resolutions For Against

Ordinary Business

1. Adoption of Accounts and Reports

2. Declaration of Final Tax Exempt (one-tier) Dividend

3. Re-appointment of Mr Bertie Cheng as Director

4. Re-election of Mr Yen Se-Hua Stewart as Director

5. Re-election of Mr Tang Yew Kay Jackson as Director

6. Approval of Directors’ Fees

7. Re-appointment of KpMG LLp as Auditors

Special Business

8. Authority for Directors to issue shares

9. Authority for Directors to issue and allot shares, pursuant to the exercise of options granted under the TeleChoice pre-IpO Share Option Scheme

10. Authority for Directors to offer and grant options and/or grant awards, and allot and issue shares, pursuant to the TeleChoice post-IpO Employee Share Option Scheme, the TeleChoice Restricted Share plan and the TeleChoice performance Share plan

11. Approval of Renewal of the Shareholders’ Mandate for Interested person Transactions

12. Approval of Renewal of the Share purchase Mandate

Dated this day of 2010.

Total Number of Shares Held

Signature(s) or Common Seal of Member(s)

TELECHOICE INTERNATIONAL LIMITED51 Cuppage Road

#09-01 StarHub CentreSingapore 229469

Attn : Company Secretary

AffixpostageStamp

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.

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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 solutions serviCes

This division provides distribution, fulfi lment 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.

t e l e C o m m u n i C a t i o n s serviCes

This division operates under wholly-owned subsidiary, nexwave Telecoms Pte. ltd. (“nexwave Telecoms”) (formerly known as ST SunPage Pte ltd). nexwave Telecoms provides next generation communications and application solutions. an integrated provider of hosted iP telephony and cloud computing applications, it offers a suite of Unified Communications as-a-Service (“UCaaS”) and Software-as-a-Service solutions (“SaaS”) with next generation platform and on-premises solutions supported by leading technology partners such as avaya, aruba, aastra, hP, Google and microsoft. aside from its enterprise-focused solutions, it is a leading voice and data services provider offering a full range of idd, roaming and Callback services, Conferencing solutions, SmS messaging and Paging, location Tracking and mobile data network

Services. These services are branded and marketed under the recognised “SunPage” suite of call services and solutions, including the popular “SunPage idd 1521” which reaches over 300 destinations and the pre-paid “SunPage international Calling Card”, distributed at retail locations throughout Singapore.

network engineering serviCes

This division, through wholly-owned subsidiary, nexwave Technologies Pte ltd, is a regional value-add product aggregator and total solutions provider to mobile and fixed network operators, equipment vendors and service providers in the asia-Pacific. its network engineering solutions and services encompass radio network planning and optimisation, transmission network planning, network implementation, testing and commissioning, indoor coverage design and implementation, network benchmarking and audit, operations, maintenance and project management.

For more information, please visit our website www.telechoice.com.sg

CONTENTS01 Financial highlights

02 letter to Shareholders

04 Board of directors

08 executive management

10 operations review

12 Planet Telecoms Touch-points

13 Corporate information

14 Corporate Governance

22 Financial Contents

TeleChoiCe inTernaTional limiTed5 Clementi loop level 2m

Singapore 129816www.telechoice.com.sg

Tel : 65 6849 4000Fax : 65 6849 4012

Company registration no. 199802072r

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Telechoice International Limited Annual Report 2009

Documents

Transcript of Telechoice International Limited Annual Report 2009