Offering Circular Dated 29 July 2010
SINGTEL GROUP TREASURY PTE. LTD. (incorporated with limited liability in the Republic of Singapore on 7 March 2001) Company Registration Number: 200101508W S$10,000,000,000 Guaranteed Euro Medium Term Note Programme guaranteed by SINGAPORE TELECOMMUNICATIONS LIMITED (incorporated with limited liability in the Republic of Singapore on 28 March 1992) Company Registration Number: 199201624D
Under the Guaranteed Euro Medium Term Note Programme described in this Offering Circular (the “Programme”), SingTel Group Treasury Pte. Ltd. (the “Issuer”), subject to compliance with all relevant laws, regulations and directives, may from time to time issue Guaranteed Euro Medium Term Notes guaranteed by Singapore Telecommunications Limited (the “Guarantee” and the “Guarantor”, respectively) (the “Notes”). The aggregate nominal amount of Notes outstanding will not at any time exceed S$10,000,000,000 (or the equivalent in other currencies). Application has been made for permission to deal in, and for quotation of, any Notes which are agreed at the time of issue to be so listed on the Official List of the Singapore Exchange Securities Trading Limited (the “SGX-ST”). Such permission will be granted when the Notes have been admitted to the Official List of the SGX-ST. Unlisted series of Notes may also be issued pursuant to the Programme. The applicable Pricing Supplement (as defined herein) in respect of any issue of Notes will specify whether or not such Notes will be listed on the SGX-ST or any other stock exchange. There is no guarantee that the application to the SGX-ST will be approved. Listing of Notes on the SGX-ST is not to be taken as an indication of the merits of the Issuer, the Guarantor, their respective subsidiaries and associated companies (the Guarantor and its subsidiaries taken as a whole hereafter, the “SingTel Group”), the Programme or the Notes. The SGX-ST takes no responsibility for the correctness of any statement made or opinions expressed or reports contained herein. Each Series (as defined in “Overview of the Programme — Method of Issue”) of Notes in bearer form will be represented on issue by a temporary global note in bearer form (each a “temporary Global Note”), or a permanent global note in bearer form (each a“permanent Global Note” and, together with the temporary Global Notes, the “Global Notes”) and will be sold in an “offshore transaction” within the meaning of Regulation S (“Regulation S”) under the United States Securities Act of 1933 (the “Securities Act”). Interests in a temporary Global Note generally will be exchangeable for interests in a permanent Global Note, or if so stated in the relevant Pricing Supplement, definitive Notes (“Definitive Notes”), after the date falling 40 days after the later of the commencement of the offering and the relevant issue date of such Tranche upon certification as to non-U.S. beneficial ownership. Interests in permanent Global Notes will be exchangeable for Definitive Notes as described under “Summary of Provisions Relating to the Notes while in Global Form”. The Notes of each Series to be issued in registered form (“Registered Notes”) will be represented by registered certificates (each a “Certificate”), one Certificate being issued in respect of each Noteholder’s entire holding of Registered Notes of one Series. Registered Notes which are sold in an “offshore transaction” within the meaning of Regulation S (“Unrestricted Notes”), will initially be represented by a permanent registered global certificate (each an “Unrestricted Global Certificate”) without interest coupons, which may be deposited on the relevant issue date (a) with, and registered in the name of, CDP, or a common depositary for, and registered in the name of a nominee of, Euroclear and Clearstream, Luxembourg; and (b) in the case of a Series intended to be cleared through a clearing system other than, or in addition to, CDP or Euroclear and/or Clearstream, Luxembourg, or delivered outside a clearing system, as agreed between the relevant Issuer and the relevant Dealer. Registered Notes which are offered or sold in the United States to “qualified institutional buyers” (each, a “QIB”) within the meaning of Rule 144A (“Rule 144A”) under the Securities Act (“Restricted Notes”) will initially be represented by a permanent registered global certificate (each a “Restricted Global Certificate” and, together with the Unrestricted Global Certificate, the “Global Certificates”), without interest coupons, which may be deposited on the relevant issue date with a custodian (the “Custodian”) for, and registered in the name of Cede & Co. as nominee for, The Depository Trust Company (“DTC”). The provisions governing the exchange of interests in Global Notes for other Global Notes and Definitive Notes are described in “Summary of Provisions Relating to the Notes while in Global Form”. The Programme has been rated “Aa2” by Moody’s Investors Service, Inc. (“Moody’s”) and “A+” by Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc. (“Standard & Poor’s”). Tranches of Notes (as defined in “Overview of the Programme — Method of Issue”) to be issued under the Programme will be rated or unrated. Where a Tranche of Notes is to be rated, such rating will not necessarily be the same as the ratings assigned to the Programme. A security rating is not a recommendation to buy, sell or hold securities and may be subject to suspension, reduction or withdrawal at any time by the assigning rating agency. Investing in Notes issued under the Programme involves certain risks. Prospective investors should have regard to the factors described under the section headed “Risk Factors” in this Offering Circular. The Notes and the Guarantee have not been and will not be registered under the Securities Act or with any securities regulatory authority of any state or other jurisdiction of the United States, and the Notes may include bearer notes that are subject to U.S. tax law requirements. Subject to certain exceptions, the Notes may not be offered or sold or, in the case of bearer notes, delivered within the United States or to, or for the account or benefit of, U.S. persons (as defined in Regulation S).
Arrangers and Dealers HSBC Morgan Stanley This page has been intentionally left blank. TABLE OF CONTENTS
Page
PRESENTATION OF FINANCIAL AND OTHER INFORMATION ...... 8
DEFINITIONS...... 9
OVERVIEWOFTHEPROGRAMME...... 11
RISKFACTORS...... 17
TERMSANDCONDITIONSOFTHENOTESGOVERNEDBYSINGAPORELAW...... 35
TERMSANDCONDITIONSOFTHENOTESGOVERNEDBYENGLISHLAW...... 63
SUMMARY OF PROVISIONS RELATING TO THE NOTES WHILE IN GLOBAL FORM. . . . . 92
USEOFPROCEEDS...... 98
DESCRIPTIONOFTHEISSUER...... 99
DESCRIPTIONOFSINGTELANDTHESINGTELGROUP...... 100
CAPITALISATION...... 145
MANAGEMENT...... 146
CLEARINGANDSETTLEMENT...... 154
TAXATION...... 160
SUBSCRIPTIONANDSALE...... 164
TRANSFERRESTRICTIONS...... 169
FORMOFPRICINGSUPPLEMENT...... 171
GENERALINFORMATION...... 179
INDEXTO FINANCIALSTATEMENTS...... F-1
1 The Issuer and the Guarantor accept responsibility for the information contained in this Offering Circular. To the best of the knowledge of the Issuer and the Guarantor (having taken all reasonable care to ensure that such is the case) the information contained in this Offering Circular is in accordance with the facts and does not omit anything likely to affect the import of such information.
This Offering Circular is to be read in conjunction with all documents which are incorporated herein by reference (see “Documents Incorporated by Reference”).
No person has been authorised to give any information or to make any representation other than those contained in this Offering Circular in connection with the issue or sale of the Notes and, if given or made, such information or representation must not be relied upon as having been authorised by the Issuer, the Guarantor or any of the Dealers, the Arrangers, the Trustee or the Agents (as defined in “Overview of the Programme”). Neither the delivery of this Offering Circular nor any sale made in connection herewith shall, under any circumstances, create any implication that there has been no change in the affairs of the Issuer or the Guarantor since the date hereof or the date upon which this Offering Circular has been most recently amended or supplemented or that there has been no adverse change in the financial position of the Issuer or the Guarantor since the date hereof or the date upon which this Offering Circular has been most recently amended or supplemented or that any other information supplied in connection with the Programme is correct as of any time subsequent to the date on which it is supplied or, if different, the date indicated in the document containing the same.
In the case of any Notes which are to be admitted to trading on a regulated market within the European Economic Area or offered to the public in a Member State of the European Economic Area in circumstances which require the publication of a prospectus under the Prospectus Directive (2003/71/EC), the minimum specified denomination shall be C50,000 (or its equivalent in any other currency as at the date of issue of the Notes).
The distribution of this Offering Circular and the offering or sale of the Notes in certain jurisdictions may be restricted by law. Persons into whose possession this Offering Circular comes are required by the Issuer, the Guarantor, the Dealers and the Arrangers to inform themselves about and to observe any such restriction. The Notes and the Guarantee have not been and will not be registered under the Securities Act or with any securities regulatory authority of any state or other jurisdiction of the United States and the Notes may include Notes in bearer form that are subject to U.S. tax law requirements. Subject to certain exceptions, Notes may not be offered, sold or (in the case of the Notes in bearer form) delivered within the United States or to, or for the account and benefit of U.S. persons (as defined in the U.S. Internal Revenue Code of 1980 and the regulations thereunder). For a description of certain restrictions on offers and sales of Notes and on distribution of this Offering Circular, see “Subscription and Sale”.
The Notes are being offered and sold outside the United States to non-U.S. persons in reliance on Regulation S and, in the case of Registered Notes, within the United States to QIBs in reliance on Rule 144A. Prospective purchasers are hereby notified that sellers of the Notes may be relying on the exemption from the provisions of Section 5 of the Securities Act provided by Rule 144A. For a description of these and certain further restrictions on offers, sales and transfers of Notes and distribution of this Prospectus see “Subscription and Sale” and “Transfer Restrictions”.
THENOTESANDTHEGUARANTEEHAVENOTBEENAPPROVEDORDISAPPROVEDBYTHE U.S.SECURITIESANDEXCHANGECOMMISSION,ANYSTATESECURITIESCOMMISSIONIN THE UNITED STATES OR ANY OTHER U.S. REGULATORY AUTHORITY, NORHASANYOFTHE FOREGOINGAUTHORITIESPASSEDUPONORENDORSEDTHEMERITSOF THEOFFERINGOF NOTESORTHEACCURACYORTHEADEQUACYOFTHISOFFERINGCIRCULAR.ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE IN THE UNITED STATES.
2 This Offering Circular has not been registered as a prospectus with the Monetary Authority of Singapore (the “MAS”). Accordingly, this Offering Circular and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the Notes may not be circulated or distributed, nor may the Notes be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore (the “SFA”), (ii) to a relevant person pursuant to Section 275(1), or to any person pursuant to Section 275(1A), and in accordance with the conditions specified in Section 275, of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.
Where the Notes are subscribed or purchased under Section 275 of the SFA by a relevant person which is:
(a) a corporation (which is not an accredited investor (as defined in Section 4Aof the SFA)) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or
(b) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an accredited investor, securities (as defined in Section 239(1) of the SFA) of that corporation or the beneficiaries’ rights and interest (howsoever described) in that trust shall not be transferred within six months after that corporation or that trust has acquired the Notes pursuant to an offer made under Section 275 of the SFA except:
(1) to an institutional investor or to a relevant person defined in Section 275(2) of the SFA, or to any person arising from an offer referred to in Section 275(1A) or Section 276(4)(i)(B) of the SFA;
(2) where no consideration is or will be given for the transfer;
(3) where the transfer is by operation of law; or
(4) as specified in Section 276(7) of the SFA.
Neither this Offering Circular nor any Pricing Supplement constitutes an offer of, or an invitation by or on behalf of the Issuer, the Guarantor or the Dealers to subscribe for, or purchase, any Notes.
The Arrangers and the Dealers have not separately verified the information contained in this Offering Circular. To the fullest extent permitted by law, none of the Dealers, the Arrangers, the Trustee or the Agents accepts any responsibility for the contents of this Offering Circular or for any other statement, made or purported to be made by the Arrangers, the Dealers, the Trustee or the Agents or on its behalf in connection with the Issuer, the Guarantor or the issue and offering of the Notes. Each of the Arrangers and each Dealer and the Trustee and each Agent accordingly disclaims all and any liability whether arising in tort or contract or otherwise (save as referred to above) which it might otherwise have in respect of this Offering Circular or any such statement. Neither this Offering Circular nor any financial statements are intended to provide the basis of any credit or other evaluation and should not be considered as a recommendation by any of the Issuer, the Guarantor, the Arrangers, the Dealers, the Trustee or the Agents that any recipient of this Offering Circular or any financial statements should purchase the Notes. Each potential purchaser of Notes should determine for itself the relevance of the information contained in this Offering Circular and its purchase of Notes should be based upon such investigation as it deems necessary. None of the Dealers, the Arrangers, the Trustee
3 or the Agents undertakes to review the financial condition or affairs of the Issuer or the Guarantor during the life of the arrangements contemplated by this Offering Circular nor to advise any investor or potential investor in the Notes of any information coming to the attention of any of the Dealers, the Arrangers, the Trustee or the Agents.
In connection with the issue of any Tranche (as defined in “Overview of the Programme — Method of Issue”), the Dealer or Dealers (if any) named as the stabilising manager(s) (the “Stabilising Manager(s)”) (or any person acting on behalf of any Stabilising Manager(s)) in the applicable Pricing Supplement may over-allot Notes or effect transactions with a view to supporting the market price of the Notes at a level higher than that which might otherwise prevail. However, there is no assurance that the Stabilising Manager(s) (or any person acting on behalf of any Stabilising Manager) will undertake stabilisation action. Any stabilisation action may begin on or after the date on which adequate public disclosure of the terms of the offer of the relevant Tranche is made and, if begun, may be ended at any time, but it must end no later than the earlier of 30 days after the issue date of the relevant Tranche and 60 days after the date of the allotment of the relevant Tranche. Any stabilisation action or over-allotment must be conducted by the relevant Stabilising Manager(s) (or any person acting on behalf of any Stabilising Manager(s)) in accordance with all applicable laws and rules.
4 NOTICE TO NEW HAMPSHIRE RESIDENTS ONLY
NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATIONFORALICENSE HAS BEEN FILED UNDER CHAPTER 421-B OF THE NEW HAMPSHIRE REVISED STATUTES ANNOTATED, 1955 (“RSA 421-B”), WITH THE STATE OF NEW HAMPSHIRE NOR THE FACT THAT ASECURITYISEFFECTIVELYREGISTEREDORAPERSONISLICENSED IN THE STATE OF NEW HAMPSHIRE CONSTITUTES A FINDING BY THE SECRETARY OF STATE OF NEWHAMPSHIRE THAT ANY DOCUMENT FILED UNDER RSA 421-B IS TRUE, COMPLETE AND NOTMISLEADING. NEITHER ANY SUCH FACT NOR THE FACT THAT AN EXEMPTION OR EXCEPTION IS AVAILABLE FOR A SECURITY OR A TRANSACTION MEANS THAT THE SECRETARY OF STATE HAS PASSED IN ANY WAY UPON THE MERITS OR QUALIFICATIONS OF, OR RECOMMENDEDORGIVEN APPROVALTO,ANYPERSON,SECURITYORTRANSACTION.ITISUNLAWFUL TO MAKE, OR CAUSE TO BE MADE, TO ANY PROSPECTIVE PURCHASER, CUSTOMER OR CLIENT, ANY REPRESENTATION INCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This Offering Circular includes “forward-looking statements” within the meaning of Section 27Aof the Securities Act and 21E of the U.S. Securities Exchange Act of 1934 (“Exchange Act”). All statements other than statements of historical facts included in this Offering Circular, including, without limitation, those regarding the Guarantor’s or the SingTel Group’s financial position, business strategy, plans and objectives of management for future operations relating to the Guarantor’s or the SingTel Group’s products and business, are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements, or industry results of the Guarantor or the SingTel Group, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Guarantor’s or the SingTel Group’s present and future business strategies and the environment in which the Guarantor or the SingTel Group will operate in the future. Among the important factors that could cause the Guarantor’s or the SingTel Group’s actual results, performance or achievements to differ materially from those in the forward-looking statements include, among others, the condition of and changes in the local, regional or global economy that adversely affect the telecommunications industry, changes in government regulation and licensing of the business activities of the Guarantor or the SingTel Group, and increased competition in the telecommunications industry. Additional factors that could cause actual results, performance or achievements to differ materially include, but are not limited to, those discussed under “Risk Factors”. These forward-looking statements speak only as at the date of this Offering Circular. Each of the Issuer and the Guarantor expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward- looking statement contained herein to reflect any change in the Guarantor’s or the SingTel Group’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. Given the uncertainties of forward-looking statements, neither the Issuer nor the Guarantor can assure any prospective purchaser that projected results or events will be achieved and the Issuer and the Guarantor caution any prospective purchaser not to place undue reliance on these statements.
5 ENFORCEABILITYOFJUDGMENTS
The Issuer and the Guarantor are corporations organised under the laws of Singapore. Most of the directors and executive officers of the Issuer and the Guarantor are not residents of the United States, and all or a substantial portion of the assets of the Issuer and the Guarantor and such persons are located outside the United States. As a result, it may not be possible for investors to effect service of process within the United States upon the Issuer and the Guarantor or such persons or to enforce against any of them in the United States courts judgments obtained in United States courts, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any State or territory within the United States.
AVAILABLE INFORMATION
The Issuer and the Guarantor will agree that, for so long as any Notes are “restricted securities” as defined in Rule 144(a)(3) under the Securities Act, the Issuer and the Guarantor will, during any period that it is neither subject to sections 13 or 15(d) of the Exchange Act, nor exempt from reporting pursuant to Rule 12g3-2(b) thereunder furnish, upon request, to any holder or beneficial owner of such restricted securities or any prospective purchaser designated by any such holder or beneficial owner upon the request of such holder, beneficial owner, prospective purchaser, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
6 DOCUMENTSINCORPORATEDBYREFERENCE
This Offering Circular should be read and construed in conjunction with (i) the most recently published audited consolidated annual financial statements, and any interim financial statements (whether audited or unaudited) published subsequently to such annual financial statements, of the Guarantor from time to time and (ii) any announcements of the Issuer and the Guarantor made via SGXNET, which shall be deemed to be incorporated in, and to form part of, this Offering Circular and which shall be deemed to modify or supersede the contents of this Offering Circular to the extent that a statement contained in any such document is inconsistent with such contents. Such documents shall be incorporated in and form part of this Offering Circular, save that any statement contained in a document which is incorporated by reference herein shall be modified or superseded for the purpose of this Offering Circular to the extent that a statement contained herein modifies or supersedes such earlier statement (whether expressly, by implication or otherwise). Any statement so modified or superseded shall not, except as so modified or superseded, constitute a part of this Offering Circular.
Copies of documents incorporated by reference in this Offering Circular may be obtained without charge from the registered office of the Issuer.
7 PRESENTATION OF FINANCIAL AND OTHER INFORMATION
Unless otherwise stated, all financial and other data regarding the Guarantor’s business and operations presented herein is on a consolidated basis. The Guarantor has included elsewhere in this Offering Circular its consolidated balance sheets as at 31 March 2008, 2009 and 2010, its consolidated profit and loss accounts for the three years ended 31 March 2008, 2009 and 2010 and its consolidated cash flow statements for the three years ended 31 March 2008, 2009 and 2010, prepared in accordance with Singapore Financial Reporting Standards (“SFRS”) and audited by Deloitte & Touche LLP, Certified Public Accountants, as stated in their report attached thereto.
In this Offering Circular, unless otherwise specified or the context otherwise requires, all references to “Singapore” are references to the Republic of Singapore and all references to the “U.S.” and “United States” are references to the United States of America. All references to the “Government” herein are references to the government of the Republic of Singapore. References herein to “Singapore dollars” and “S$” are to the lawful currency of Singapore and all references to “U.S. dollars” and “US$” are to the lawful currency of the United States of America.
In this Offering Circular, where information has been presented in thousands or millions of units, amounts may have been rounded up or down. Accordingly, totals of columns or rows of numbers in tables may not be equal to the apparent total of the individual items and actual numbers may differ from those contained herein due to rounding.
SUPPLEMENTARY OFFERING CIRCULAR
Each of the Issuer and the Guarantor has given an undertaking to each Dealer and each Arranger that during such period from the date on which the Issuer agrees to issue any Notes pursuant to the Dealer Agreement and ending upon the date of issuance of such Notes, each of the Issuer and the Guarantor shall, among other things, prepare an amendment or supplement to this Offering Circular if at any time during such period there is a significant change to the Issuer or the Guarantor, to the extent such change has not been disclosed by way of an announcement on the website of the SGX-ST, affecting any matter contained in this Offering Circular the inclusion of which would reasonably be required by investors and their professional advisers and would reasonably be expected by them to be found in this Offering Circular, for the purpose of making an informed assessment of the assets and liabilities, financial position, profits and losses and prospects of the Issuer, the Guarantor, the SingTel Group, the rights attaching to the Notes and the Guarantee.
8 DEFINITIONS
The following definitions have, where appropriate, been used in this Offering Circular:
“2G” : Secondgenerationwirelesstelephonetechnology
“3G” : Third generation wireless technology designed to further expand the bandwidth and functionality of existing mobile telephony systems
“CDP” : TheCentralDepository(Pte)Limited
“EBITDA” : Earningsbeforeinterest,taxes,depreciationandamortisation for the Singapore and Australia businesses and includes pre-tax contributions of associated and joint venture companies
“English Law Trust Deed” : thetrustdeedgovernedunderEnglishlawdated29July2010 among the Issuer, the Guarantor and the Trustee, as amended, varied or supplemented from time to time
“FY” : FinancialYearended31March
“GSM” : Theglobalsystemformobilecommunications
“SingTel Group” : SingTeltogetherwithitssubsidiariestakenasawhole
“ICT” : Informationcommunicationstechnology
“IP” : Internetprotocol
“IPVPN” : IPvirtualprivatenetworks
“IPLC” : Internationalprivateleasedcircuit
“IT” : Informationtechnology
“LTE” : Longtermevolutiontechnology
“Mbps” : Megabitspersecond
“Mhz” : Megahertz
“Minister” : TheMinisterforInformation,CommunicationsandtheArts
“NCS Group” : NCSPte.Ltd.togetherwithitssubsidiariestakenasawhole
“NetCo” : Networkcompany
“NGNBN” : Nextgenerationnationalbroadbandnetwork
“OpCo” : Operatingcompany
“OpenNet” : OpenNetPte.Ltd.
“Operational EBITDA” : Earningsbeforeinterest,taxes,depreciationandamortisation for the Singapore and Australia businesses
9 “Optus” : SingTelOptusPtyLimitedtogetherwithitssubsidiaries taken as a whole
“Regional Mobile : Bharti Airtel Limited, PT Telekomunikasi Selular, Advanced Associates and Joint Info Service Public Company Limited, Globe Telecom, Inc., Venture Companies” Warid Telecom (Private) Limited and Pacific Bangladesh Telecom Limited
“Singapore Law Trust Deed” : the trust deed governed under Singapore law dated 29 July 2010 among the Issuer, the Guarantor and the Trustee, as amended, varied or supplemented from time to time
“SingTel” or the “Guarantor” : Singapore Telecommunications Limited
“SingTel Singapore” : TheSingTelGroupexcludingOptus
“%” : per cent.
Words importing the singular shall, where applicable, include the plural and vice versa, and words importing the masculine gender shall, where applicable, include the feminine and neuter genders. References to persons shall, where applicable, include corporations. Any reference to a time of day in this Offering Circular shall be a reference to Singapore time unless otherwise stated. Any reference in this Offering Circular to any enactment is a reference to that enactment as for the time being amended or re-enacted. Any word defined under the Companies Act, Chapter 50 of Singapore, as amended or modified from time to time (the “Companies Act”) or the Securities and Futures Act, Chapter 289 of Singapore, as amended or modified from time to time (the “SFA”) or any statutory modification thereof and used in this Offering Circular shall, where applicable, have the meaning ascribed to it under the Companies Act or, as the case may be, the SFA.
10 OVERVIEWOFTHEPROGRAMME
The following overview does not purport to be complete and is qualified in its entirety by the remainder of this Offering Circular. Words and expressions defined in “Terms and Conditions of the Notes governed by English Law”, “Terms and Conditions of the Notes governed by Singapore Law” or elsewhere in this Offering Circular have the same meanings in this overview.
Issuer : SingTel Group Treasury Pte. Ltd.
Guarantor : Singapore Telecommunications Limited
Description : Guaranteed Euro Medium Term Note Programme
Size : Up to S$10,000,000,000 (or the equivalent in other currencies at the date of issue) aggregate nominal amount of Notes outstanding at any one time
Arrangers : The Hongkong and Shanghai Banking Corporation Limited and Morgan Stanley Asia (Singapore) Pte.
Dealers : The Hongkong and Shanghai Banking Corporation Limited and Morgan Stanley Asia (Singapore) Pte.
The Issuer may from time to time terminate the appointment of any dealer under the Programme or appoint additional dealers either in respect of one or more Tranches or in respect of the whole Programme. References in this Offering Circular to “Permanent Dealers” are to the persons listed above as Dealers and to such additional persons that are appointed as dealers in respect of the whole Programme (and whose appointment has not been terminated) and references to “Dealers” are to all Permanent Dealers and all persons appointed as a dealer in respect of one or more Tranches.
Trustee : The Bank of NewYork Mellon
Issuing and Paying Agent : The Bank of NewYork Mellon
Registrar : The Bank of NewYork Mellon
Method of Issue : The Notes will be issued on a syndicated or non-syndicated basis. The Notes will be issued in series (each a “Series”) having one or more issue dates and on terms otherwise identical (or identical other than in respect of the first payment of interest), the Notes of each Series being intended to be interchangeable with all other Notes of that Series. Each Series may be issued in tranches (each a “Tranche”) on the same or different issue dates. The specific terms of each Tranche (which will be completed, where necessary, with the relevant terms and conditions and, save in respect of the issue date, issue price, first payment of interest and nominal amount of the Tranche, will be identical to the terms of other Tranches of the same Series) will be completed in the pricing supplement (the “Pricing Supplement”).
11 Issue Price : Notes may be issued at their nominal amount or at a discount or premium to their nominal amount. Partly Paid Notes may be issued, the issue price of which will be payable in two or more instalments.
Form of Notes : The Notes may be issued in bearer form (“Bearer Notes”) or in registered form (“Registered Notes”) only. Each Tranche of Bearer Notes will be represented on issue by a temporary Global Note if (i) definitive Notes are to be made available to Noteholders following the expiry of 40 days after their issue date or (ii) such Notes have an initial maturity of more than one year and are being issued in compliance with the D Rules (as defined in “Overview of the Programme — Selling Restrictions” below), otherwise such Tranche will be represented by a permanent Global Note.
Registered Notes sold in an “offshore transaction” within the meaning of Regulation S will initially be represented by an Unrestricted Global Certificate. Registered Notes sold in the United States to QIBs within the meaning of Rule 144A will initially be represented by a Restricted Global Certificate.
Clearing Systems : Clearstream, Luxembourg, Euroclear, CDP for bearer notes, Clearstream, Luxembourg, Euroclear, CDP and DTC for Registered Notes and, in relation to any Tranche, such other clearing system as may be agreed between the Issuer, the Issuing and Paying Agent, the Trustee and the relevant Dealer.
Initial Delivery of Notes : On or before the issue date for eachTranche, the Global Note representing Bearer Notes or the Global Certificate representing Registered Notes may be deposited with a common depositary for Euroclear and Clearstream, Luxembourg or with CDP. Global Notes or Global Certificates may also be deposited with any other clearing system or may be delivered outside any clearing system provided that the method of such delivery has been agreed in advance by the Issuer, the Guarantor, the Issuing and Paying Agent, the Trustee and the relevant Dealer. Registered Notes that are to be credited to one or more clearing systems on issue will be registered in the name of nominees or a common nominee for such clearing systems.
Currencies : Subject to compliance with all relevant laws, regulations and directives, Notes may be issued in any currency agreed between the Issuer, the Guarantor and the relevant Dealer.
Maturities : Subject to compliance with all relevant laws, regulations and directives, any maturity as may be agreed between the Issuer, the Guarantor and the relevant Dealer.
Specified Denomination : Definitive Notes will be in such denominations as may be specified in the relevant Pricing Supplement save that (i) in the case of any Notes which are to be admitted to trading on a regulated market within the European Economic Area or
12 offered to the public in a Member State of the European Economic Area in circumstances which require the publication of a prospectus under the Prospectus Directive, the minimum specified denomination shall be C50,000 (or its equivalent in any other currency as at the date of issue of the Notes); (ii) unless otherwise permitted by then current laws and regulations, Notes (including Notes denominated in sterling) which have a maturity of less than one year and in respect of which the issue proceeds are to be accepted by the Issuer in the United Kingdom or whose issue otherwise constitutes a contravention of section 19 of the Financial Services and Markets Act 2000 (“FSMA”) will have a minimum denomination of £100,000 (or its equivalent in other currencies); and (iii) in the case of Notes to be sold in the United States to QIBs, the minimum specified denomination shall be US$100,000.
Fixed Rate Notes : Fixed interest will be payable in arrear on the date or dates in each year specified in the relevant Pricing Supplement.
Floating Rate Notes : Floating Rate Notes will bear interest determined separately for each Series as follows:
(i) (in the case of Notes denominated in Singapore dollars) by reference to SIBOR or SWAP RATE (or such other benchmark as may be specified in the relevant Pricing Supplement), as adjusted for any applicable margin;
(ii) (in the case of Notes denominated in a currency other than in Singapore dollars) on the same basis as the floating rate under a notional interest rate swap transaction in the relevant Specified Currency governed by an agreement incorporating the 2006 ISDA Definitions, as published by the International Swaps and Derivatives Association, Inc. or
(iii) (in the case of Notes denominated in a currency other than in Singapore dollars) by reference to LIBOR, LIBID, LIMEAN or EURIBOR (or such other benchmark as may be specified in the relevant Pricing Supplement) as adjusted for any applicable margin.
Interest periods will be specified in the relevant Pricing Supplement.
Zero Coupon Notes : Zero Coupon Notes may be issued at their nominal amount or at a discount to it and will not bear interest.
Dual Currency Notes : Payments (whether in respect of principal or interest and whether at maturity or otherwise) in respect of Dual Currency Notes (as defined in “Terms and Conditions of the Notes governed by English Law” and “Terms and Conditions of the Notes governed by Singapore Law”) will be made in such currencies, and based on such rates of exchange as may be specified in the relevant Pricing Supplement.
13 Index Linked Notes : Payments of principal in respect of Index Linked Redemption Notes or of interest in respect of Index Linked Interest Notes will be calculated by reference to such index and/or formula as may be specified in the relevant Pricing Supplement.
Interest Periods and Interest : The length of the interest periods for the Notes and the Rates applicable interest rate or its method of calculation may differ from time to time or be constant for any Series. Notes may have a maximum interest rate, a minimum interest rate, or both. The use of interest accrual periods permits the Notes to bear interest at different rates in the same interest period. All such information will be set out in the relevant Pricing Supplement.
Redemption : The relevant Pricing Supplement will specify the basis for calculating the redemption amounts payable. Unless permitted by then current laws and regulations, Notes (including Notes denominated in sterling) which have a maturity of less than one year and in respect of which the issue proceeds are to be accepted by the Issuer in the United Kingdom or whose issue otherwise constitutes a contravention of section 19 of the FSMA must have a minimum redemption amount of £100,000 (or its equivalent in other currencies).
Redemption by Instalments : The Pricing Supplement issued in respect of each issue of Notes that are redeemable in two or more instalments will set out the dates on which, and the amounts in which, such Notes may be redeemed.
Other Notes : Terms applicable to high interest Notes, low interest Notes, step-up Notes, step-down Notes, reverse dual currency Notes, optional dual currency Notes, Partly Paid Notes and any other type of Note that the Issuer, the Trustee and any Dealer or Dealers may agree to issue under the Programme will be set out in the relevant Pricing Supplement and the supplementary Offering Circular.
Optional Redemption : The Pricing Supplement issued in respect of each issue of Notes will state whether such Notes may be redeemed prior to their stated maturity at the option of the Issuer (either in whole or in part) and/or the holders, and if so the terms applicable to such redemption.
Status of Notes and the : The Notes and the Guarantee will constitute unsubordinated Guarantee and unsecured obligations of the Issuer and the Guarantor, respectively all as described in “Terms and Conditions of the Notes governed by English Law — Guarantee and Status” and “Terms and Conditions of the Notes governed by Singapore Law — Guarantee and Status”.
Negative Pledge : See “Terms and Conditions of the Notes governed by English Law — Negative Pledge” and “Terms and Conditions of the Notes governed by Singapore Law — Negative Pledge”.
14 Cross Acceleration : See “Terms and Conditions of the Notes governed by English Law — Events of Default” and “Terms and Conditions of the Notes governed by Singapore Law — Events of Default”.
Ratings : TheProgrammehasbeenrated“Aa2”byMoody’sand“A+”by Standard & Poor’s.
Tranches of Notes will be rated or unrated. Where a Tranche of Notes is to be rated, such rating will be specified in the relevant Pricing Supplement.
A rating is not a recommendation to buy, sell or hold securities and may be subject to suspension, reduction or withdrawal at any time by the assigning rating agency.
Early Redemption : Except as provided in “Overview of the Programme — Optional Redemption” above, Notes will be redeemable at the option of the Issuer prior to maturity only for tax reasons. See “Terms and Conditions of the Notes governed by English Law — Redemption, Purchase and Options” and “Terms and Conditions of the Notes governed by Singapore Law — Redemption, Purchase and Options”.
Withholding Tax : All payments of principal and interest by or on behalf of the Issuer or the Guarantor in respect of the Notes, the Receipts and the Coupons or under the Guarantee shall be made free and clear of, and without withholding or deduction for, any taxes, duties, assessments or governmental charges of whatever nature imposed, levied, collected, withheld or assessed by or within Singapore or any authority therein or thereof having power to tax, unless such withholding or deduction is required by law. In that event, in relation to Singapore Dollar Notes, the Issuer or, as the case may be, the Guarantor will not be obliged to pay any additional amounts in respect of any such withholding or deduction from payments in respect of such Singapore Dollar Notes for, or on account of, any such taxes or duties, and in relation to Non-Singapore Dollar Notes, the Issuer or, as the case may be, the Guarantor shall pay such additional amounts as shall result in receipt by the Noteholders, Receiptholders and Couponholders of such amounts as would have been received by them had no such withholding or deduction been required, subject to certain conditions as set out in the Terms and Conditions of the Notes governed by English Law and the Terms and Conditions of the Notes governed by Singapore Law. (See the sections “Terms and Conditions of the Notes governed by English Law — Taxation” and “Terms and Conditions of the Notes governed by Singapore Law — Taxation” below.)
Governing Law : English law or Singapore law.
Listing of the Notes : Application has been made to the SGX-ST for permission to deal in, and for quotation of, any Notes which are agreed at the time of issue to be so listed on the SGX-ST. Such permission will be granted when such Notes have been
15 admitted to the Official List of the SGX-ST. There is no guarantee that the application to the SGX-ST will be approved. If the application to the SGX-ST to list a particular series of Notes is approved, such Notes listed on the SGX-ST will be traded on the SGX-ST in a minimum board lot size of S$200,000 or its equivalent in other currencies. Unlisted series of Notes may also be issued pursuant to the Programme. The Notes may also be listed on such other or further stock exchange(s) as may be agreed between the Issuer, the Guarantor and the relevant Dealer in relation to each series of Notes. The Pricing Supplement relating to each series of Notes will state whether or not the Notes of such series will be listed on any stock exchange(s) and, if so, on which stock exchange(s) the Notes are to be listed.
Selling Restrictions : The United States, the Public Offer Selling Restriction under the Prospectus Directive (in respect of Notes having a specified denomination of less than C50,000 or its equivalent in any other currency as at the date of issue of the Notes), the United Kingdom, Hong Kong, Singapore and Japan. See “Subscription and Sale”.
Each of the Issuer and the Guarantor is Category 2 for the purposes of Regulation S under the Securities Act, as amended.
The Notes will be issued in compliance with U.S. Treas. Reg. §1.163-5(c)(2)(i)(D) (the “D Rules”) unless (i) the relevant Pricing Supplement states that Notes are issued in compliance with U.S. Treas. Reg. §1.163-5(c)(2)(i)(C) (the “C Rules”) or (ii) the Notes are issued other than in compliance with the D Rules or the C Rules but in circumstances in which the Notes will not constitute “registration required obligations” under the United States Tax Equity and Fiscal Responsibility Act of 1982 (“TEFRA”), which circumstances will be referred to in the relevant Pricing Supplement as a transaction to which TEFRA is not applicable.
Transfer Restrictions : There are restrictions on the transfer of Notes sold pursuant to Regulation S under the Securities Act prior to the expiration of the relevant distribution compliance period and on the transfer of Registered Notes sold pursuant to Rule 144A under the Securities Act. See “Transfer Restrictions”.
16 RISK FACTORS
Each of the Issuer and the Guarantor believes that the following factors may affect its ability to fulfil its obligations under the Notes issued under the Programme. All of these factors are contingencies which may or may not occur and neither the Issuer nor the Guarantor is in a position to express a view on the likelihood of any such contingency occurring.
Factors which each of the Issuer and the Guarantor believes may be material for the purpose of assessing the market risks associated with Notes issued under the Programme are also described below.
Each of the Issuer and the Guarantor believes that the factors described below represent the principal risks inherent in investing in Notes issued under the Programme, but the Issuer or the Guarantor may be unable to pay interest, principal or other amounts on or in connection with any Notes for other reasons and the Issuer and the Guarantor do not represent that the statements below regarding the risks of holding any Notes are exhaustive. Prospective investors should also read the detailed information set out elsewhere in this Offering Circular (including any documents incorporated by reference herein) and reach their own views prior to making any investment decision.
Risks relating to the SingTel Group and its associated and joint venture companies
Changes in domestic, regional and global economic conditions may have a material adverse effect on the financial performance and operations of the SingTel Group and its associated and joint venture companies.
Changes in domestic, regional and global economic conditions may have a material adverse effect on the demand for telecommunications, IT and related services and hence, on the financial performance and operations of the SingTel Group and its associated and joint venture companies. The global credit and equity markets have recently experienced substantial dislocations, liquidity disruptions and market corrections. These and other related events have had a significant impact on the global credit and financial markets and economic growth as a whole, and consequently, consumer and business demand for telecommunications, IT and related services.
Political instability in certain countries in which the SingTel Group and its associated and joint venture companies operate may have a material adverse effect on the ownership, control and condition of their assets in such countries.
Some of the countries in which the SingTel Group and its associated and joint venture companies operate have experienced or continue to experience political instability. The continuation or re- emergence of such political instability in the future could have a material adverse effect on economic or social conditions in those countries. This could lead to outbreaks of civil unrest in the affected areas, which could have an adverse effect on results of operations and consequently the SingTel Group’s financial performance. Such political instability could also have a material adverse effect on the ownership, control and condition of the assets of the SingTel Group and its associated and joint venture companies in those areas.
The SingTel Group’s business is subject to extensive laws and regulations.
The SingTel Group’s operations in Singapore, Australia and its international operations and investments (including associated and joint venture companies) are subject to extensive government regulations which may impact or limit flexibility to respond to market conditions, competition, new technologies or changes in cost structures. Governments may alter their policies relating to the telecommunications, IT and related industries and the regulatory environment (including taxation) in which the SingTel Group and its associated and joint venture companies operate. Such changes could
17 have a material adverse effect on the SingTel Group’s financial performance and operations. The SingTel Group’s overseas investments are subject to the risk of imposition of laws restricting the level, percentage and manner of foreign ownership and investment, as well as the risk of nationalisation, any of which could materially and adversely affect the SingTel Group’s overseas investments. The SingTel Group and its associated and joint venture companies are subject to the risk of changes in foreign exchange policies or controls in countries in which they operate, which could restrict, limit or impede the flow of currencies.
The business and results of operations of the SingTel Group and its associated and joint venture companies could be materially and adversely affected by changes in law, regulation or government and regulatory policies. In particular, decisions by regulators concerning economic or business interests or goals which are inconsistent with the interests or actions of the SingTel Group and its associated and joint venture companies could materially and adversely affect their financial conditions, results of operations and investments.
In Singapore, the Info-communications Development Authority of Singapore has in its implementation of the NGNBN designed a structure aimed at levelling the playing field, allowing the benefits of the NGNBN to be available to all industry players. The introduction of the concept of network separation with the NetCo designing, building and operating the passive infrastructure and the OpCo providing wholesale network services over the active infrastructure, will significantly alter the existing cost model of the industry and increase competition in the market with potential new entrants. Another example of an ongoing regulatory change is the announced revision by the Media Development Authority of Singapore of the Media Market Conduct Code to include a Public Interest Obligation to enable mandatory cross carriage of exclusive content in the pay TV market. The new Public Interest Obligation requires subscription television licensees to make their exclusive content (acquired on or after 12 March 2010) available for cross carriage, with effect from 1 September 2010. Since these unprecedented regulatory changes in Singapore would result in the SingTel Group operating in uncharted conditions, there is uncertainty regarding the impact of such changes on the future operations and performance of the SingTel Group. Whilst the SingTel Group has, and will continue to strive to, adapt, innovate and transform its business model to meet regulatory changes, there can be no assurance that the efforts of the SingTel Group will always succeed — and any failure could have a material adverse effect on the SingTel Group’s financial performance and results of operations.
Under the Telecommunications Act, the Minister has certain discretionary powers to direct SingTel Singapore (in its capacity as a public telecommunication licensee) to undertake and provide certain services and facilities. See “Description of SingTel and the SingTel Group — 9. Regulatory Environment — Singapore Regulatory Environment — Discretionary powers of the Minister under the Telecommunications Act”. In the event the Minister exercises such powers and SingTel Singapore is required to undertake and provide such services and facilities, SingTel Singapore may incur costs that may not be fully recoverable. There may also be interruption to operations and services and a diversion of telecommunications resources for other purposes as directed.
In Australia, the operations of SingTel’s Australian subsidiary, Optus, are subject to regulatory decisions on the rates at which it purchases services from and provides services to other telecommunications companies in the country. Such decisions can significantly affect Optus’ revenues and costs as well as its competitive position, and may also not be consistent with the SingTel Group’s expectations. There is also a possibility that the Australian Government’s recent announcement on the high-speed national broadband network may ultimately lead to a sub-optimal or a negative outcome for Optus. Such changes could result in increased access and/or compliance costs and could have a material adverse effect on the SingTel Group’s financial performance and results of operations.
The businesses of the SingTel Group and its associated and joint venture companies depend upon statutory licences issued by governmental authorities. Failure to meet regulatory requirements could result in fines or other sanctions including, ultimately, revocation of the licences. There is no assurance that the SingTel Group and its associated and joint venture companies will be able to renew existing
18 licences on terms that are the same or equivalent to those that currently apply, or at all. The SingTel Group and its associated and joint venture companies may be required to obtain licences where they wish to expand into new areas of business and there can be no assurance that they will be able to obtain these licences.
The SingTel Group and its Regional Mobile Associates and Joint Venture Companies may not be able to access spectrum to support its businesses.
The SingTel Group and its Regional Mobile Associates and Joint Venture Companies may need to access additional spectrum to support both generic growth and the development of new services. Access to spectrum is of critical importance to the SingTel Group and its Regional Mobile Associates and Joint Venture Companies in order to support their businesses of providing mobile voice and broadband services. The use of spectrum in most countries in which the SingTel Group and its Regional Mobile Associates and Joint Venture Companies operate is regulated by governmental authorities and requires licences. In certain countries in which the SingTel Group’s Regional Mobile Associates and Joint Venture Companies operate, the bidding rules and processes for new or additional spectrum are unclear and ambiguous, and may be subject to significant changes. There is no guarantee that the SingTel Group and its Regional Mobile Associates and Joint Venture Companies will be able to acquire licences for additional spectrum or access such additional spectrum on favourable terms, or at all. The SingTel Group and its Regional Mobile Associates and Joint Venture Companies will need to renew their existing spectrum licences when they expire. There can be no assurance that the SingTel Group and its Regional Mobile Associates and Joint Venture Companies will be able to renew these licences on terms that are favourable or equivalent to those that apply today, or at all. Failure to acquire access to spectrum could have a material adverse effect on the businesses, financial performance and growth plans of the SingTel Group and its Regional Mobile Associates and Joint Venture Companies.
The SingTel Group operates in legal and regulatory systems where the interpretation, application and enforcement of laws and regulations may be uncertain.
The SingTel Group and its associated and joint venture companies may face difficulties when they operate in legal and regulatory systems where the interpretation, application and enforcement of laws and regulations may be uncertain or unclear and may be subject to considerable discretion. The application of the laws and regulations may depend, to a large extent, upon subjective criteria such as good faith of the parties to the transaction and principles of public policy. Judicial decisions may not be systematically and publicly available and may not constitute binding precedent. Enforcement of laws and regulations may not be well established. There may not be public consultation or notice prior to changes in interpretation, application and enforcement of laws and regulations. Where the interpretation, application and enforcement of laws and regulations may be subject to uncertainty and considerable discretion, it could in practice lead to a challenging operating environment, increasing the difficulties involved in planning and managing a business.
The SingTel Group faces competitive risks in Singapore, Australia and other markets in which it operates.
The telecommunications market in Singapore is highly competitive. As competition intensifies, new players enter the market and regulation requires SingTel Singapore to allow its competitors to have access to its networks. This has resulted in a decline in SingTel Singapore’s market share in some key segments and a significant fall in prices for certain products and services and these trends may continue. With the deployment of Singapore’s NGNBN, competition is expected to increase leading to an increased risk of market share loss in certain segments of the market and further price reductions.
In the Australia mobile market, a number of participants are subsidiaries of international groups and operators have made large investments which are now sunk costs. The SingTel Group is, therefore, exposed to the risk of irrational pricing being introduced by such competitors. The fixed line services
19 market on the other hand continues to be dominated by the incumbent provider which can leverage its market position to restrict the development of competition. With the deployment of the Australian National Broadband Network, competition is expected to increase as new entrants enter the market.
The operations of the SingTel Group’s international businesses are also subject to highly competitive market conditions. There is a regional and global market for many of the services the SingTel Group provides, particularly international voice and data communications offered to business customers. The quality of, and rates for, these services can affect a potential business customer’s decision to subscribe to the SingTel Group’s services, locate or expand its offices or communications facilities in Singapore, or use Singapore as a transit hub for its communications. Prices for some of these services have shown significant declines in recent years as a result of capacity additions and general price competition and such declines are expected to continue.
The growth of the SingTel Group’s Regional Mobile Associates and Joint Venture Companies depend in part on increases in the mobile penetration rate in the markets in which they operate. Some of these overseas markets, including Indonesia and India, have and will experience an increase in the number of competitors, any of which could lead to severe price competition in these markets and potential loss of market share for the SingTel Group’s Regional Mobile Associates and Joint Venture Companies. As these markets mature, the pace of subscriber growth may slow and there is no assurance that new customers will be as profitable as existing customers.
The disintermediation in the telecommunications industry by handset providers and non-traditional telecommunications services providers obtaining access to, and establishing a relationship with customers by providing multimedia content and services directly on demand also challenges the business models and profits of vertically-integrated providers like the SingTel Group.
The market for the provision of IT services is fragmented and characterised by numerous participants, ranging from large IT companies that operate globally to IT companies that adopt a low cost model and operate on a small scale. The introduction of irrational pricing by any such participant may result in a material adverse impact on the SingTel Group’s revenue and profitability.
The SingTel Group’s regional expansion and the regional expansion of the SingTel Group’s Regional Mobile Associates and Joint Venture Companies may not be successful.
A key element of the SingTel Group’s business strategy involves the expansion of its operations in the Asia-Pacific region. Given the limited size of the Singapore market, the future growth of the SingTel Group depends, to a large extent, on its ability to grow its existing operations in Australia and the Asia-Pacific region. There are considerable risks associated with regional expansion.
The success of the SingTel Group’s strategic investments depends, to a large extent, on its relationship with, and the strength of its associated or joint venture companies. The SingTel Group has undertaken, and will continue to undertake, international operations by entering into joint ventures and other arrangements with other parties. Such joint ventures and arrangements may involve risks associated with the possibility that the joint venture or investment partner may:
• have economic or business interests or goals that are inconsistent with the SingTel Group’s interests;
• take actions contrary to the SingTel Group’s interests;
• be unable or unwilling to fulfil its obligations under the joint venture agreement or arrangement; or
• experience financial or other difficulties such as operating in countries undergoing political, economic and/or social turmoil.
20 The value of the SingTel Group’s investments may be adversely affected if the anticipated benefits resulting from such investments do not materialise and this could result in impairment of such investments. Any impairment of investments could have a material adverse effect on the SingTel Group’s financial position or performance and results of operations.
There is no assurance that the SingTel Group will be successful in making further acquisitions due to various factors including the limited availability of opportunities, competition for available opportunities from other potential investors; foreign ownership restrictions; government and regulatory policies; political considerations and the specific preferences of sellers. In particular, other major telecommunications companies are following similar strategies or attempting to penetrate these same markets, resulting in limited opportunities and potentially higher prices. Furthermore, some of the markets the SingTel Group has entered are dominated by large incumbent telecommunications providers.
There can be no assurance that the SingTel Group can fully generate synergies from these businesses to achieve its aims of enhancing the SingTel Group’s regional competitiveness, building a competitive regional footprint and combining its complementary data networks to increase the reach and capacity of the SingTel Group’s services. Any delay or failure to achieve these and other objectives may adversely affect the financial condition and results of operations of the SingTel Group.
In addition, the business strategy of some of the SingTel Group’s Regional Mobile Associates and Joint Venture Companies involves the expansion of operations outside their home countries. These Regional Mobile Associates and Joint Venture Companies may enter into joint ventures and other arrangements with other parties. Such joint ventures and other arrangements involve risks, including but not limited to the possibility that the joint venture or investment partner may have economic or business interests or goals that are inconsistent with those of the interests of the Regional Mobile Associates and Joint Venture Companies. There can be no assurance that the SingTel Group’s Regional Mobile Associates and Joint Venture Companies can fully generate synergies and achieve their aims of regional competitiveness and building a competitive regional footprint. Any delay or failure to achieve these and other objectives may adversely affect the financial condition and results of operations of the Regional Mobile Associates and Joint Venture Companies, which could, in turn, adversely affect the financial condition and results of operations of the SingTel Group.
The SingTel Group is subject to risks inherent in investing in associated and joint venture companies which it does not control.
A significant portion of the SingTel Group’s earnings is generated by its associated and joint venture companies which are not subsidiaries, and in which the SingTel Group has a significant stake but not majority control. The performance of the SingTel Group’s associated and joint venture companies and the SingTel Group’s share of their results are subject to the same or similar risks that affect the SingTel Group as described herein, including risks that affect the SingTel Group’s general business and operations and risks relating to the countries in which the SingTel Group operates in.
The SingTel Group may seek to influence the management, operation and performance of its associated and joint venture companies, but ultimately does not have the majority control. Differences may occur between the SingTel Group, its associated and joint venture companies and/or other investors, regarding the business, strategy and operations of the SingTel Group’s associated and joint venture companies which may not be resolved amicably, or may take time to resolve, or may not result in a positive outcome for the SingTel Group. The associated and joint venture companies and/or other investors may have economic or business interests that may not be consistent with the SingTel Group, or may take actions contrary to the SingTel Group’s instructions or requests, policies or objectives, or may have financial difficulties. These factors could adversely affect the SingTel Group’s ability to deal with its investments in a manner which achieves its objectives and in turn could have a material adverse impact on the SingTel Group’s business, financial condition, results of operations and prospects.
21 The SingTel Group’s venture into new revenue streams or new businesses in non-traditional products and services may not be successful.
The SingTel Group is evolving from its traditional carriage business in Singapore and Australia to venture into new growth engines to create new revenue streams, including mobile applications and services, pay TV, managed services, content and ICT. There is no assurance that the SingTel Group will be successful in these new ventures which may require new expertise, substantial process or systems changes, on-going compliance monitoring with respect to complex legal and regulatory requirements and organisational cultural and mindset changes.
The SingTel Group faces infrastructure and project management risks.
The SingTel Group incurs substantial capital expenditure in constructing and maintaining its network and systems infrastructure projects. These projects are subject to risks associated with the construction, supply, installation and operation of equipment and systems. The projects undertaken by SingTel Singapore as sub-contractors to roll-out infrastructure, are subject to the risk of an increase in project build costs, the risk of disputes and the risk of unexpected implementation delays, any or all of which could result in an inability to meet projected roll-out completion dates. For the SingTel Group’s satellite business, the launch of any satellite is subject to the risk of launch delays, cost overruns, and the occurrence of other unforeseeable events, including but not limited to, satellite launch failure and satellite failure to enter into designated orbital locations, or any other event which is beyond the control of the SingTel Group. Satellites that are successfully launched may not operate or continue to operate successfully in space throughout their expected operational lives. The operation of any satellite is subject to the risk of technical malfunction, collision and the occurrence of other unforeseeable events, any of which could result in a partial or total loss of a successfully launched satellite. The SingTel Group’s network and systems infrastructure projects are also subject to risks associated with the sale of capacity on the completed project infrastructure, including risks of default, disputes, litigation and arbitration involving contractors, suppliers, customers and other third parties involved in construction or operation of network infrastructure projects.
The SingTel Group’s telecommunications services are currently carried through its networks and the networks of other operators, international submarine cable lines, its own switching systems, other fixed international long distance operators and the switching systems of international long distance operators, satellites, pay TV platforms and other network-related infrastructure. The provision of the SingTel Group’s services depends on the quality, stability, resilience and robustness of this integrated network. The SingTel Group faces risks of malfunction of, loss of, or damage to, network infrastructure from catastrophic events, whether natural or of man-made causes, which are outside the control of the SingTel Group. Losses and damage caused by risks of this nature may significantly disrupt its operations and may materially adversely affect its ability to deliver services to customers, notwithstanding that the SingTel Group would have put in place disaster recovery plans and/or may have taken out insurance policies with respect to some or all of these risks.
The SingTel Group is a major IT services provider to government bodies and large enterprises in the region. There could be project execution risks when projects are not accurately scoped, resulting in over-commitments to customers and inadequate resource allocation and scheduling. These could lead to cost overruns, project delays and liquidated damages. If not properly managed, these can lead to potential significant compensation to customers.
The SingTel Group is dependent on its customers to generate revenue.
The SingTel Group generates its revenues from, among others, sales of services to its customers. Certain customers have major or significant contracts with the SingTel Group. For example, the SingTel Group has entered into major contracts for the provision of telecommunications and IT services with multinational enterprises, telecommunications operators as well as channel providers. There can be no
22 assurance that customers of the SingTel Group will not reduce their demand or transfer their business to competitors of the SingTel Group. The loss of customers or reduction in demand of services from customers could have a material adverse impact on the SingTel Group’s revenue and performance.
The SingTel Group is exposed to the credit risk of its customers, which could result in financial loss to the SingTel Group. Credit risk arising from sales of services to customers may be mitigated through a stringent credit evaluation process and the regular monitoring of parties’ creditworthiness. However, adverse changes in the credit quality of the SingTel Group’s customers, or adverse changes arising from a general deterioration in local, regional or global economic conditions, could reduce recoverability from customers. There is no assurance that customers will not default on the amounts owing to the SingTel Group.
The telecommunications industry is dominated by a few key vendors.
The SingTel Group relies on third party vendors with respect to many aspects of its business. The SingTel Group has relied on and will continue to rely on third party vendors for various purposes, including but not limited to the construction of the SingTel Group’s network and the supply of handsets and equipment. The industry is dominated by a few key vendors for such services and equipment and any failure of any key vendor to provide such services or equipment, or any consolidation of the industry may significantly affect the SingTel Group’s business and operations.
The SingTel Group and its Regional Mobile Associates and Joint Venture Companies face technology risks.
Rapid and significant technological changes are typical in the telecommunications industry and these changes may materially affect the SingTel Group’s capital expenditure and operating costs as well as the demand for the SingTel Group’s products and services.
The SingTel Group has invested substantial capital and other resources in the development and modernisation of its networks and systems. Technological changes continue to reduce the costs, and expand the capacities and functions, of new infrastructure capable of delivering competing products and services, resulting in lower prices and more competitive and innovative products and services. Moreover, the SingTel Group’s Regional Mobile Associates and Joint Venture Companies operate predominantly in emerging markets where the regulatory practices including spectrum availability may not synchronise with the technology progression path and the market demand for new technologies. With the rapid advancement in technology, the SingTel Group and its Regional Mobile Associates and Joint Venture Companies may also be stranded with investments that are technologically obsolete before the end of expected useful life of these investments and the value of these investments may be impaired. These changes may require the SingTel Group to replace and upgrade its network infrastructure and as a result, may be required to incur significant additional capital expenditure in order to maintain the latest technological standards and remain competitive against these newer products and services.
The SingTel Group faces a continuing risk of market entry by new operators and services providers (including non-telecommunications players) who, by using newer or lower cost technologies, may succeed in rapidly attracting customers away from established market participants. New technologies may also enable players from adjacent industries to enter the telecommunications and IT services markets, thus increasing competition. This may result in a loss of market share and could have an adverse effect on the SingTel Group’s financial condition and results of operations.
Expected benefits from investment in new networks and technologies may not be realised.
The SingTel Group may pursue new growth opportunities in the communications industry in the future, including introducing services and products employing new technologies, for example LTE, new pay TV
23 platforms and WIMAX. The implementation of these new technologies depends on a number of factors, including developing the SingTel Group’s network and the launch of new and commercially viable products and services involving these technologies. The SingTel Group may have to incur substantial expenditure to develop its network, services and products and to gain access to related or enabling technologies in order to successfully implement these new technologies. The SingTel Group may not be successful in modifying its network infrastructure in a timely and cost-effective manner to facilitate such implementation, which could adversely affect its quality of service, financial condition and results of operations.
Further, the SingTel Group faces the risk of unforeseen complications in the deployment of new technologies. Any newly adopted technology may not perform as expected, and the SingTel Group may not be able to successfully or on a timely basis develop the new technology to effectively and economically deliver services based on such technology.
The telecommunications industry is capital intensive in nature. Technological changes continue to expand the capacities and functions of new infrastructure capable of delivering competing products and services. As a result, the SingTel Group may be required to incur significant additional capital expenditure in order to maintain the latest technological standards and remain competitive against these newer products and services. These changes may require the SingTel Group to replace and upgrade its network infrastructure.
The SingTel Group may be unable to obtain future financing on favourable terms, or at all, to fund the development of its business.
The SingTel Group may be required to raise additional funds for its future capital needs or to refinance its current indebtedness.
There can be no assurance that funding, if needed, will be available on terms that the SingTel Group considers favourable, or at all. Furthermore, any debt financing, if available, may involve restrictive covenants. In addition, the disruptions recently experienced in the international capital markets have also led to reduced liquidity and increased credit risk premiums for certain market participants, and have resulted in a reduction of available financing. If the SingTel Group is unable to borrow the amounts required on favourable terms, it may be unable to pursue its planned strategy, and there can be no assurance that future conditions in the financial markets, particularly if it and other telecommunications companies seek increasingly large amounts of capital financing, will not adversely affect its ability to finance its operations.
The SingTel Group is exposed to currency risk and foreign exchange risk.
The currency risk of the SingTel Group arises from its capital expenditure and operational purchases denominated in currencies other than the functional currency. Although the SingTel Group enters into foreign exchange forward contracts, cross currency swaps and other hedging instruments to hedge against currency risk in accordance with the SingTel Group’s hedging policy, the impact of future exchange rate fluctuations cannot be accurately predicted. Exchange rate fluctuations may have a material adverse impact on the SingTel Group’s cost structure.
The foreign exchange risks of the SingTel Group arise from subsidiaries and associated and joint venture companies operating in foreign countries such as Australia, Bangladesh, India, Indonesia, the Philippines, Pakistan and Thailand. Additionally, as of 8 June 2010, the SingTel Group’s joint venture company in India, Bharti, completed its acquisition of African operations in 15 African countries in addition to its operations in Sri Lanka and Bangladesh. The SingTel Group’s consolidation/equity accounting of the financial results of these overseas subsidiaries and associated and joint venture companies respectively could be materially affected by significant foreign exchange movements in such foreign currencies against the SingTel Group’s functional currency. Additionally, while the functional and reporting currencies of the associated and joint venture companies are based on their
24 respective local currencies, a significant portion of their purchases and therefore liabilities are denominated in foreign currencies such as United States Dollars, thereby giving rise to fair value gains or losses when marked to market and changes to the cost structure of such associated and joint venture companies.
The SingTel Group may face difficulties in converting and remitting foreign currencies.
The SingTel Group may operate in countries where it might face difficulties in converting and remitting foreign currencies. There could be insufficient liquidity or foreign exchange controls imposed in countries that limit conversion and remittance of currencies, which may in turn adversely affect SingTel’s ability to receive payments from, or make payments to, these countries.
The SingTel Group is exposed to interest rate risk.
The SingTel Group has cash balances placed with reputable banks and financial institutions. The SingTel Group manages its interest rate risk by placing such balances on varying maturities and interest rate terms.
The SingTel Group has incurred indebtedness to finance its operations. Where appropriate, the SingTel Group seeks to minimise its cash flow interest rate risk exposure by entering into interest rate swap contracts to swap floating interest rates for fixed interest rates over the duration of its borrowings. However, its hedging policy may not adequately cover the SingTel Group’s exposure to interest rate fluctuations and this may result in a large interest expense and an adverse effect on the SingTel Group’s financial condition and results of operations.
The SingTel Group is exposed to counter-party risk.
The SingTel Group may enter into various transactions which will expose it to the credit of its counter-parties and their ability to satisfy the terms of such contracts. For example, the SingTel Group may enter into swap arrangements, which exposes it to the risk that the counter-party may default on its obligations to perform under the relevant contract and the SingTel Group’s surplus funds are invested in interest-bearing deposits with financial institutions. In the event a counter-party, including a financial institution is declared bankrupt or becomes insolvent, this may result in delays in obtaining funds or having to liquidate the position, potentially leading to losses.
Credit ratings assigned to SingTel may be subject to change.
SingTel has been assigned an overall corporate credit rating of “Aa2” by Moody’s and “A+” by Standard & Poor’s. A credit rating is not a recommendation to buy, sell or hold the Notes. Each series of Notes issued under the Programme may be rated or unrated. Credit ratings are subject to revision, suspension or withdrawal at any time by the assigning rating agency. Rating agencies may also revise or replace entirely the methodology applied to assign credit ratings. SingTel has been assigned an overall corporate credit rating, and may additionally be issued a stand-alone credit rating. No assurance can be given that if SingTel were issued such a stand-alone credit rating, it would be the same as or would not be lower than its overall corporate credit rating. Moreover, no assurances can be given that a credit rating will remain for any given period of time or that a credit rating will not be lowered or withdrawn entirely by the relevant rating agency if in its judgment circumstances in the future so warrant or if a different methodology is applied to assign such credit ratings. Neither the Issuer nor SingTel has any obligation to inform Noteholders of any such revision, downgrade or withdrawal. A suspension, reduction or withdrawal at any time of the credit rating assigned to SingTel, the Programme or the Notes may adversely affect the market price of the Notes. Moreover, SingTel’s credit ratings do not reflect the potential impact related to market or other considerations relating to the Notes.
25 The SingTel Group is exposed to various regulatory and litigation risks.
The SingTel Group operates internationally and provides services with facilities in many countries, which means the SingTel Group is confronted with complex legal and regulatory requirements and judiciary systems in many jurisdictions. These include the risk of regulatory or litigation action by regulators or private parties. Regulatory matters or litigation actions involving the SingTel Group or restrictions on the SingTel Group in any jurisdiction may have a material adverse effect on the SingTel Group’s financial condition and results of operations. Examples of regulatory and litigation actions which the SingTel Group is exposed to are disclosed in the financial statements attached hereto, in particular the sections on “Contingent Liabilities” therein.
Labour activism and unrest may materially and adversely affect the SingTel Group’s business.
Laws permitting the formation of labour unions, combined with weak economic conditions, have resulted, and may continue to result, in labour activism and unrest in certain countries in which the SingTel Group operates. Labour activism and unrest in certain countries in which the SingTel Group operates could materially and adversely affect the SingTel Group’s business, financial condition, results of operations and prospects.
The SingTel Group may be adversely affected by the imposition and enforcement of more stringent environmental regulations.
The SingTel Group is subject to environmental laws, regulations and ordinances in certain countries in which the SingTel Group operates. Non-compliance with or changes in these environmental laws, regulations and ordinances could adversely affect the SingTel Group. There can be no assurance that environmental laws and regulations will not change in the future in a manner that could materially and adversely affect the SingTel Group. Environmental laws and regulations may impose upon the SingTel Group obligations to investigate and remedy or pay for the investigation and remediation of environmental conditions, and to compensate public and private parties for related damages. Any such liability in connection with facilities currently owned or operated by the SingTel Group could materially and adversely affect the SingTel Group. It is also possible that existing environmental laws and regulations could become more stringent in the future and consequently have a material adverse effect on the SingTel Group’s results of operations.
The SingTel Group and its Regional Mobile Associates and Joint Venture Companies face the occurrence of natural or other catastrophes, severe weather conditions or other acts of God.
Some of the countries in which the SingTel Group and its Regional Mobile Associates and Joint Venture Companies operate have experienced a number of major natural catastrophes over the years, including typhoons, droughts and earthquakes. There is no assurance that the occurrence of such natural catastrophes, severe weather conditions or other acts of God will not materially disrupt the business of the SingTel Group and its Regional Mobile Associates and Joint Venture Companies.
The SingTel Group may not be able to obtain appropriate insurance coverage on reasonable commercial terms or at all.
The SingTel Group takes out insurance policies to insure its properties, assets and projects in accordance with industry practices. Certain assets and some types of losses, such as losses resulting from wars, acts of terrorism or natural disasters, generally are not insured because they are either uninsurable or it is not economically practical to obtain insurance.
There can be no assurance that the SingTel Group will be able to obtain appropriate insurance on commercially reasonable terms, if at all. Failure to obtain insurance could reduce the SingTel Group’s ability to obtain bank loans and other financing for future construction projects and other commercial
26 activities and may cause the SingTel Group to potentially incur significant financial loss upon the occurrence of a major uninsurable event. The inability of the SingTel Group to obtain or renew insurance coverage at a reasonable cost, or at all, may cause the SingTel Group’s operating costs to increase significantly and may have an adverse effect on the financial condition and results of operations of the SingTel Group.
The SingTel Group depends on key management for the growth and successful implementation of its strategy.
The SingTel Group believes that the growth it has achieved to date, as well as its position as one of Asia’s leading telecommunications groups, are to a large extent, attributable to a strong and experienced management team. The SingTel Group believes that its continued growth and the successful implementation of its business strategy depends upon the retention of its key management executives and upon its ability to attract and retain other highly capable individuals. The loss of some or all of the SingTel Group’s senior executives, or the inability to attract or retain other key individuals, could materially and adversely affect the SingTel Group’s business.
SingTel is majority owned by a single shareholder.
As at 26 February 2010, Temasek Holdings (Private) Limited (“Temasek”) had an aggregate (direct and deemed) interest of 54.60% of SingTel’s shares. Temasek is wholly-owned by the Singapore Government. At that level of share ownership, Temasek is able to exercise control over most matters requiring shareholders’ approval, including the election of directors, approval of significant corporate transactions and approval of final dividend payments by SingTel. No assurance can be given that Temasek’s objectives will not conflict with SingTel’s business goals and objectives or that any such conflict will not have an adverse effect on the financial condition and results of operations of the SingTel Group. Temasek also holds interests in certain companies which hold licences to operate telecommunications services in Singapore and which compete with the SingTel Group, including StarHub Ltd. and M1 Limited.
There can be no assurance that Temasek will remain the majority shareholder of SingTel or that there will not be a change of ownership of the SingTel Group or the entry of another major shareholder with the ability to exert significant influence on the direction or operations of the SingTel Group, nor that the SingTel Group’s business, financial condition and results of operations would not be adversely affected by such a change in ownership or influence.
The SingTel Group is exposed to perceived risks associated with electromagnetic energy.
Concerns have been expressed relating to possible adverse health consequences associated with the operation of mobile communications devices due to potential exposure to electromagnetic energy.
While the SingTel Group is not aware of any substantiated evidence of public health effects from exposure to the levels of electromagnetic energy typically emitted from mobile communications devices, there is a risk that an actual or perceived health risk associated with mobile communications devices could result in:
• litigation against the SingTel Group;
• reduced demand for mobile communications services; and
• restrictions on the ability of the SingTel Group to deploy its mobile communications networks as a result of government environmental controls which exist or may be introduced to address these perceived risks,
27 which in turn could have a material adverse effect on the SingTel Group’s financial performance and results of operations.
The SingTel Group is exposed to potential risks relating to privacy breaches.
The SingTel Group seeks to protect the privacy of voice and information transmissions over its networks. The SingTel Group employs security mechanisms including the use of firewalls and the GSM encryption algorithm, designed to minimise the risk of privacy breaches. Significant failure of encryption and security measures resulting in consumer confidence being undermined and/or the imposition of regulatory measures to ensure the security of services may have a material adverse effect on the SingTel Group’s business, financial condition and results of operations.
Risks relating to Notes issued under the Programme
The Notes may not be a suitable investment for all investors.
Each potential investor in the Notes must determine the suitability of that investment in the light of its own circumstances. In particular, each potential investor should:
• have sufficient knowledge and experience to make a meaningful evaluation of the Notes, the merits and risks of investing in the Notes and the information contained or incorporated by reference in this Offering Circular or any applicable amendment or supplement;
• have access to, and knowledge of, appropriate analytical tools to evaluate, in the context of its particular financial situation, an investment in the Notes and the impact an investment in the Notes will have on its overall investment portfolio;
• have sufficient financial resources and liquidity to bear all of the risks of an investment in the Notes, including Notes with principal or interest payable in one or more currencies, or where the currency for principal or interest payments is different from the potential investor’s currency;
• understand thoroughly the terms of the Notes and be familiar with the behaviour of any relevant indices and financial markets; and
• be able to evaluate (either alone or with the help of a financial adviser) possible scenarios for economic, interest rate and other factors that may affect its investment and its ability to bear the applicable risks.
Some Notes are complex financial instruments. Sophisticated institutional investors generally do not purchase complex financial instruments as stand-alone investments. They purchase complex financial instruments as a way to reduce risk or enhance yield with an understood, measured, appropriate addition of risk to their overall portfolios. A potential investor should not invest in Notes which are complex financial instruments unless it has the expertise (either alone or with a financial adviser) to evaluate how the Notes will perform under changing conditions, the resulting effects on the value of the Notes and the impact this investment will have on the potential investor’s overall investment portfolio.
Risks related to the structure of a particular issue of Notes.
A wide range of Notes may be issued under the Programme. A number of these Notes may have features which contain particular risks for potential investors. Set out below is a description of certain such features:
28 Notes subject to optional redemption by the Issuer
An optional redemption feature is likely to limit the market value of Notes containing such a feature. During any period when the Issuer may elect to redeem Notes, the market value of those Notes generally will not rise substantially above the price at which they can be redeemed. This also may be true prior to any redemption period.
The Issuer may be expected to redeem Notes when its cost of borrowing is lower than the interest rate on the Notes. At those times, an investor generally would not be able to reinvest the redemption proceeds at an effective interest rate as high as the interest rate on the Notes being redeemed and may only be able to do so at a significantly lower rate. Potential investors should consider reinvestment risk in light of other investments available at that time.
Index Linked Notes and Dual Currency Notes
The Issuer may issue Notes with principal or interest determined by reference to an index or formula, to changes in the prices of securities or commodities, to movements in currency exchange rates or other factors (each, a “Relevant Factor”). In addition, the Issuer may issue Notes with principal or interest payable in one or more currencies which may be different from the currency in which the Notes are denominated. Potential investors should be aware that:
• the market price of such Notes may be volatile;
• they may receive no interest;
• payment of principal or interest may occur at a different time or in a different currency than expected;
• the amount of principal payable at redemption may be less than the nominal amount of such Notes or even zero;
• a Relevant Factor may be subject to significant fluctuations that may not correlate with changes in interest rates, currencies or other indices;
• if a Relevant Factor is applied to Notes in conjunction with a multiplier greater than one or contains some other leverage factor, the effect of changes in the Relevant Factor on principal or interest payable likely will be magnified; and
• the timing of changes in a Relevant Factor may affect the actual yield to investors, even if the average level is consistent with their expectations. In general, the earlier the change in the Relevant Factor, the greater the effect on yield.
The historical experience of an index should not be viewed as an indication of the future performance of such index during the term of any Index Linked Notes. Accordingly, each potential investor should consult its own financial and legal advisers about the risk entailed by an investment in any Index Linked Notes and the suitability of such Notes in light of its particular circumstances.
Partly Paid Notes
The Issuer may issue Notes where the issue price is payable in more than one instalment. Failure to pay any subsequent instalment on a Partly Paid Note could result in an investor losing all of his investment.
29 Variable rate Notes with a multiplier or other leverage factor
Notes with variable interest rates can be volatile investments. If they are structured to include multipliers or other leverage factors, or caps or floors, or any combination of those features or other similar related features, their market values may be even more volatile than those for securities that do not include those features.
Inverse Floating Rate Notes
Inverse Floating Rate Notes have an interest rate equal to a fixed rate minus a rate based upon a reference rate such as LIBOR. The market values of those Notes typically are more volatile than market values of other conventional floating rate debt securities based on the same reference rate (and with otherwise comparable terms). Inverse Floating Rate Notes are more volatile because an increase in the reference rate not only decreases the interest rate of the Notes, but may also reflect an increase in prevailing interest rates, which further adversely affects the market value of these Notes.
Fixed/Floating Rate Notes
Fixed/Floating Rate Notes may bear interest at a rate that converts from a fixed rate to a floating rate, or from a floating rate to a fixed rate. Where the Issuer has the right to effect such a conversion, this will affect the secondary market and the market value of the Notes since the Issuer may be expected to convert the rate when it is likely to produce a lower overall cost of borrowing. If the Issuer converts from a fixed rate to a floating rate in such circumstances, the spread on the Fixed/Floating Rate Notes may be less favourable than then prevailing spreads on comparable Floating Rate Notes tied to the same reference rate. In addition, the new floating rate at any time may be lower than the rates on other Notes. If the Issuer converts from a floating rate to a fixed rate in such circumstances, the fixed rate may be lower than then prevailing rates on its Notes.
Notes issued at a substantial discount or premium
The market values of securities issued at a substantial discount or premium from their principal amount tend to fluctuate more in relation to general changes in interest rates than do prices for conventional interest-bearing securities. Generally, the longer the remaining term of the securities, the greater the price volatility as compared to conventional interest-bearing securities with comparable maturities.
Risks related to Notes generally.
Set out below is a brief description of certain risks relating to the Notes generally:
Modification and waiver
The terms and conditions of the Notes governed by English Law and the terms and conditions of the Notes governed by Singapore Law both contain provisions for calling meetings of Noteholders to consider matters affecting their interests generally. These provisions permit defined majorities to bind all Noteholders including Noteholders who did not attend and vote at the relevant meeting and Noteholders who voted in a manner contrary to the majority.
Change of law
The conditions of the Notes are based on English or Singapore law, as the case may be, in effect as at the date of this Offering Circular. No assurance can be given as to the impact of any possible judicial decision or change to English or Singapore law, as the case may be, or administrative practice after the date of this Offering Circular.
30 Notes where denominations involve integral multiples: definitive Notes
In relation to any issue of Notes which have denominations consisting of a minimum Specified Denomination plus one or more higher integral multiples of another smaller amount, it is possible that such Notes may be traded in amounts that are not integral multiples of such minimum Specified Denomination. In such a case a holder who, as a result of trading such amounts, holds an amount which is less than the minimum Specified Denomination in his account with the relevant clearing system at the relevant time may not receive a definitive Note in respect of such holding (should definitive Notes be printed) and would need to purchase a principal amount of Notes such that its holding amounts to a Specified Denomination.
If definitive Notes are issued, holders should be aware that definitive Notes which have a denomination that is not an integral multiple of the minimum Specified Denomination may be illiquid and difficult to trade.
The Guarantee provided by the Guarantor will be subject to certain limitations on enforcement and may be limited by applicable laws or subject to certain defences that may limit its validity and enforceability
The Guarantee given by the Guarantor provides holders of Notes with a direct claim against the Guarantor in respect of the Issuer’s obligations under the Notes. Enforcement of the Guarantee would be subject to certain generally available defences. Local laws and defences may vary, and may include those that relate to corporate benefit (ultra vires), fraudulent conveyance or transfer (actio pauliana), voidable preference, financial assistance, corporate purpose, liability in tort, subordination and capital maintenance or similar laws and concepts. They may also include regulations or defences which affect the rights of creditors generally.
If a court were to find the Guarantee given by the Guarantor, or a portion thereof, void or unenforceable as a result of such local laws or defences, or to the extent that agreed limitations on guarantees apply, holders would cease to have any claim in respect of the Guarantor and would be creditors solely of the Issuer and, if payment had already been made under the Guarantee, the court could require that the recipient return the payment to the Guarantor.
Performance of contractual obligations
The ability of the Issuer or the Guarantor to make payments in respect of the Notes may depend upon the due performance by the other parties to the transaction documents of the obligations thereunder including the performance by the Issuing and Paying Agent, Transfer Agent, Registrar, and/or the Calculation Agent of their respective obligations. Whilst the non-performance of any relevant parties will not relieve the Issuer nor the Guarantor of their obligations to make payments in respect of the Notes, the Issuer and/or the Guarantor may not, in such circumstances, be able to fulfil its obligations to the Noteholders and the Couponholders.
Noteholders are exposed to financial risk
Interest payment, where applicable, and principal repayment for debts occur at specified periods regardless of the performance of the Issuer and the Guarantor. The Issuer and the Guarantor may be unable to make interest payments, where applicable, or principal repayments, under a series of Notes should they suffer serious decline in net operating cash flows.
Risk of structural subordination of the Notes
The Notes and the Guarantee are structurally subordinated to the indebtedness of SingTel’s subsidiaries (other than the Issuer). Generally, claims of creditors, including trade creditors, and other
31 claims of preferred shareholders, if any, of such subsidiaries will have priority with respect to the assets and earnings of such subsidiaries over the claims of SingTel and its creditors, including the Noteholders seeking to enforce the Guarantee.
Where the Global Notes or Global Certificates are held by or on behalf of Euroclear, Clearstream, Luxembourg and/or CDP, investors will have to rely on their procedures for transfer, payment and communication with the Issuer
Notes issued under the Programme may be represented by one or more Global Notes or Global Certificates. Such Global Notes or Global Certificates will be deposited with (i) a common depositary for Euroclear and Clearstream, Luxembourg and/or (ii) CDP. Except in the circumstances described in the relevant Global Note or Global Certificate, investors will not be entitled to receive definitive Notes or Certificates. Euroclear, Clearstream, Luxembourg or CDP (as the case may be) will maintain records of the beneficial interests in the Global Notes or Global Certificates. While the Notes are represented by one or more Global Notes or Global Certificates, investors will be able to trade their beneficial interests only through Euroclear, Clearstream, Luxembourg or CDP (as the case may be).
While the Notes are represented by one or more Global Notes or Global Certificates, the Issuer will discharge its payment obligations under the Notes by making payments to or to the order of (i) the common depositary for Euroclear and Clearstream, Luxembourg and/or (ii) CDP (as the case may be) for distribution to their account holders. A holder of a beneficial interest in a Global Note or Global Certificate must rely on the procedures of Euroclear, Clearstream, Luxembourg or CDP (as the case may be) to receive payments under the relevant Notes. The Issuer and the Guarantor have no responsibility or liability for the records relating to, or payments made in respect of, beneficial interests in the Global Notes or Global Certificates.
Holders of beneficial interests in the Global Notes or Global Certificates will not have a direct right to vote in respect of the relevant Notes. Instead, such holders will be permitted to act only to the extent that they are enabled by Euroclear, Clearstream, Luxembourg or CDP (as the case may be) to appoint appropriate proxies.
Similarly, holders of beneficial interests in the Global Notes or Global Certificates will not have a direct right under the respective Global Notes or Global Certificates to take enforcement action against the Issuer in the event of a default under the relevant Notes but will have to rely upon their rights under the English Law Trust Deed or the Singapore Law Trust Deed, as the case may be.
Singapore taxation risk
The Notes to be issued from time to time under the Programme during the period from the date of this Offering Circular to 31 December 2013 are intended to be “qualifying debt securities” for the purposes of the Income Tax Act, Chapter 134 of Singapore (“ITA”) subject to the fulfilment of certain conditions more particularly described in the section “Singapore Taxation”. However, there is no assurance that the Notes will continue to enjoy the tax concessions should the relevant tax laws be amended or revoked at any time.
If payments of interest and other income (if any) with respect to the Singapore Dollar Notes are not exempt from Singapore withholding tax under the above qualifying debt securities scheme for whatever reason, such payments to non-residents of Singapore would generally be subject to withholding of tax by the Issuer, and the Issuer is not obliged to pay any additional amounts with respect to such payments in respect of the Singapore Dollar Notes in connection with such withholding tax.
32 EU Savings Directive
Under EC Council Directive 2003/48/EC on the taxation of savings income (the “Savings Directive”), member states of the European Union (“Member States”) are required to provide to the tax authorities of another Member State details of payments of interest (or similar income) paid by a paying agent located within its jurisdiction to, or for the benefit of, an individual resident or certain entities called “residual entities” established in that other Member State. However, for a transitional period, Luxembourg and Austria are instead required (unless during that period they elect otherwise) to operate a withholding system in relation to such payments (the ending of such transitional period being dependent upon the conclusion of certain other agreements relating to information exchange with certain other countries). A number of non-EU countries and territories, including Switzerland, have adopted similar measures (a withholding system in the case of Switzerland).
If a payment were to be made or collected through a Member State which has opted for a withholding system and an amount of, or in respect of, tax were to be withheld from that payment, neither the Issuer nor any Paying Agent nor any other person would be obliged to pay additional amounts with respect to any Note as a result of the imposition of such withholding tax. The Issuer is required to maintain a Paying Agent in a Member State that is not obliged to withhold or deduct tax pursuant to the Directive.
On 15 September 2008, the European Commission issued a report to the Council of the European Union on the operation of the Savings Directive, which included the Commission’s advice on the need for changes to the Savings Directive. On 13 November 2008, the European Commission published a more detailed proposal for amendments to the Savings Directive, which included a number of suggested changes. The European Parliament approved an amended version of this proposal on 24 April 2009. If any of those proposed changes are implemented in relation to the Savings Directive, they may amend or broaden the scope of the requirements described above.
Risks related to the market generally.
There is no active trading market for the Notes
Notes may have no established trading market when issued, and one may never develop. If a market does develop, it may not be very liquid. Therefore, investors may not be able to sell their Notes easily or at prices that will provide them with a yield comparable to similar investments that have a developed secondary market. This is particularly the case for Notes that are especially sensitive to interest rate, currency or market risks, are designed for specific investment objectives or strategies or have been structured to meet the investment requirements of limited categories of investors. These types of Notes generally would have a more limited secondary market and more price volatility than conventional debt securities. Illiquidity may have an adverse effect on the market value of Notes.
Exchange rate risks and exchange controls
The Issuer will pay principal and interest on the Notes and the Guarantor will make any payments under the Guarantee in the Specified Currency. This presents certain risks relating to currency conversions if an investor’s financial activities are denominated principally in a currency or currency unit (the “Investor’s Currency”) other than the Specified Currency. These include the risk that exchange rates may significantly change (including changes due to devaluation of the Specified Currency or revaluation of the Investor’s Currency) and the risk that authorities with jurisdiction over the Investor’s Currency may impose or modify exchange controls. An appreciation in the value of the Investor’s Currency relative to the Specified Currency would decrease (1) the Investor’s Currency-equivalent yield on the Notes, (2) the Investor’s Currency-equivalent value of the principal payable on the Notes and (3) the Investor’s Currency-equivalent market value of the Notes.
33 Government and monetary authorities may impose (as some have done in the past) exchange controls that could adversely affect an applicable exchange rate. As a result, investors may receive less interest or principal than expected, or no interest or principal.
Interest rate risk
Noteholders may suffer unforeseen losses due to fluctuations in interest rates. Generally, a rise in interest rates may cause a fall in the price of the Notes, resulting in a capital loss for the Noteholders. However, the Noteholders may reinvest the interest payments at higher prevailing interest rates. Conversely, when interest rates fall, the price of the Notes may rise. The Noteholders may enjoy a capital gain but interest payments received may be reinvested at lower prevailing interest rates.
Inflation risk
Noteholders may suffer erosion on the return of their investments due to inflation. Noteholders would have an anticipated rate of return based on expected inflation rates on the purchase of the Notes. An unexpected increase in inflation could reduce the actual returns.
The market value of the Notes may fluctuate
Trading prices of the Notes are influenced by numerous factors, including the operating results, business and/or financial condition of the Issuer, the Guarantor and the SingTel Group, political, economic, financial and any other factors that can affect the capital markets, the industry, the Issuer, the Guarantor and the SingTel Group generally. Adverse economic developments, acts of war and health hazards in countries in which the SingTel Group operates could have a material adverse effect on the SingTel Group’s operations, operating results, business, financial position, and performance.
Global financial turmoil has led to volatility in international capital markets which may adversely affect the market price of any Series of Notes
Global financial turmoil has resulted in substantial and continuing volatility in international capital markets. Any further deterioration in global financial conditions could have a material adverse effect on worldwide financial markets, which may adversely affect the market price of any Series of Notes.
Legal investment considerations may restrict certain investments
The investment activities of certain investors are subject to legal investment laws and regulations, or review or regulation by certain authorities. Each potential investor should seek independent legal advice to determine whether and to what extent (1) Notes are legal investments for the potential investor, (2) Notes can be used as collateral for various types of borrowing and (3) other restrictions apply to its purchase or pledge of any Notes. Financial institutions should consult their legal advisers or the appropriate regulators to determine the appropriate treatment of Notes under any applicable risk-based capital or similar rules.
34 TERMSANDCONDITIONSOFTHENOTESGOVERNEDBYSINGAPORELAW
The following is the text of the terms and conditions that, subject to completion and amendment and as supplemented or varied in accordance with the provisions of the relevant Pricing Supplement, shall be applicable to the Notes in definitive form (if any) issued in exchange for the Global Note(s) representing each Series. Either (i) the full text of these terms and conditions together with the relevant provisions of the Pricing Supplement or (ii) these terms and conditions as so completed, amended, supplemented or varied (and subject to simplification by the deletion of non-applicable provisions), shall be endorsed on such Bearer Notes or on the Certificates relating to such Registered Notes. All capitalised terms that are not defined in these Conditions will have the meanings given to them in the relevant Pricing Supplement. Those definitions will be endorsed on the definitive Notes or Certificates, as the case may be. References in the Conditions to “Notes” are to the Notes of one Series only, not to all Notes that may be issued under the Programme.
The Notes are constituted by a Singapore Law Trust Deed (as amended or supplemented as at the date of issue of the Notes (the “Issue Date”), the “Trust Deed”) dated 29 July 2010 between the Issuer, the Guarantor and The Bank of New York Mellon (the “Trustee”, which expression shall include all persons for the time being the trustee or trustees under the Trust Deed) as trustee for the Noteholders (as defined below). These terms and conditions (the “Conditions”) include summaries of, and are subject to, the detailed provisions of the Trust Deed, which includes the form of the Bearer Notes, Certificates, Receipts, Coupons and Talons referred to below. An Agency Agreement (as amended or supplemented as at the Issue Date, the “Agency Agreement”) dated 29 July 2010 has been entered into in relation to the Notes between the Issuer, the Guarantor, the Trustee, The Bank of New York Mellon as initial issuing and paying agent and the other agents named in it. The issuing and paying agent, the other paying agents, the registrar, the transfer agents and the calculation agent(s) for the time being (if any) are referred to below respectively as the “Issuing and Paying Agent”, the “Paying Agents” (which expression shall include the Issuing and Paying Agent), the “Registrar”, the “Transfer Agents” (which expression shall include the Registrar) and the “Calculation Agent(s)”. Copies of the Trust Deed and the Agency Agreement are available for inspection during usual business hours at the principal office of the Trustee (presently at One Canada Square, 40th Floor, London E14 5AL, United Kingdom) and at the specified offices of the Paying Agents and the Transfer Agents.
Notes may be denominated in Singapore dollars (“Singapore Dollar Notes”) or in other currencies (“Non-Singapore Dollar Notes”). The Noteholders, the holders of the interest coupons (the “Coupons”) relating to interest bearing Notes in bearer form and, where applicable in the case of such Notes, talons for further Coupons (the “Talons”) (the “Couponholders”) and the holders of the receipts for the payment of instalments of principal (the “Receipts”) relating to Notes in bearer form of which the principal is payable in instalments are entitled to the benefit of, are bound by, and are deemed to have notice of all the provisions of the Trust Deed and are deemed to have notice of those provisions applicable to them of the Agency Agreement.
As used in these Conditions, “Relevant Date” in respect of any Note, Receipt or Coupon means the date on which payment in respect of it first becomes due or (if any amount of the money payable is improperly withheld or refused) the date on which payment in full of the amount outstanding is made or (if earlier) the date seven days after that on which notice is duly given to the Noteholders that, upon further presentation of the Note (or relative Certificate), Receipt or Coupon being made in accordance with the Conditions, such payment will be made, provided that payment is in fact made upon such presentation. References in these Conditions to (i) “principal” shall be deemed to include any premium payable in respect of the Notes, all Instalment Amounts, Final Redemption Amounts, Early Redemption Amounts, Optional Redemption Amounts, Amortised Face Amounts and all other amounts in the nature of principal payable pursuant to Condition 6 or any amendment or supplement to it, (ii) “interest” shall be deemed to include all InterestAmounts and all other amounts payable pursuant to Condition 5 or any amendment or supplement to it and (iii) “principal” and/or “interest” shall be deemed to include any additional amounts that may be payable under this Condition or any undertaking given in addition to or in substitution for it under the Trust Deed.
35 As used in these Conditions, “Tranche” means Notes which are identical in all respects.
1 Form, Denomination and Title
The Notes are issued in bearer form (“Bearer Notes”) or in registered form (“Registered Notes”) in each case in the Specified Denomination(s) shown hereon provided that in the case of any Notes which are to be admitted to trading on a regulated market within the European Economic Area or offered to the public in a Member State of the European Economic Area in circumstances which require the publication of a Prospectus under the Prospectus Directive, the minimum Specified Denomination shall be C50,000 (or its equivalent in any other currency as at the date of issue of the relevant Notes).
All Registered Notes shall have the same Specified Denomination. Unless otherwise permitted by the then current laws and regulations, Notes which have a maturity of less than one year and in respect of which the issue proceeds are to be accepted by the Issuer in the United Kingdom or whose issue otherwise constitutes a contravention of section 19 of the Financial Services and Markets Act 2000 (“FSMA”) will have a minimum denomination of £100,000 (or its equivalent in other currencies). Notes sold in reliance on Rule 144A will be in minimum denominations of US$100,000 (or its equivalent in another currency) and higher integral multiples of US$1,000 (or its equivalent in another currency) in excess thereof, subject to compliance with all legal and/or regulatory requirements applicable to the relevant currency. Notes which are listed on SGX-ST will be traded on the SGX-ST in a minimum board lot size of S$200,000 (or its equivalent in other currencies) or such other amount as may be allowed or required from time to time.
This Note is a Fixed Rate Note, a Floating Rate Note, a Zero Coupon Note, an Index Linked Interest Note, an Index Linked Redemption Note, an Instalment Note, a Dual Currency Note or a Partly Paid Note, a combination of any of the foregoing or any other kind of Note, depending upon the Interest and Redemption/Payment Basis shown hereon.
Bearer Notes are serially numbered and are issued with Coupons (and, where appropriate, a Talon) attached, save in the case of Zero Coupon Notes in which case references to interest (other than in relation to interest due after the Maturity Date), Coupons and Talons in these Conditions are not applicable. Instalment Notes are issued with one or more Receipts attached.
Registered Notes are represented by registered certificates (“Certificates”) and, save as provided in Condition 2(c), each Certificate shall represent the entire holding of Registered Notes by the same holder.
Title to the Bearer Notes and the Receipts, Coupons and Talons shall pass by delivery. Title to the Registered Notes shall pass by registration in the register that the Issuer shall procure to be kept by the Registrar in accordance with the provisions of the Agency Agreement (the “Register”). Except as ordered by a court of competent jurisdiction or as required by law, the holder (as defined below) of any Note, Receipt, Coupon or Talon shall be deemed to be and may be treated as its absolute owner for all purposes whether or not it is overdue and regardless of any notice of ownership, trust or an interest in it, any writing on it (or on the Certificate representing it) or its theft or loss (or that of the related Certificate) and no person shall be liable for so treating the holder.
In these Conditions, “Noteholder” means the bearer of any Bearer Note and the Receipts relating to it or the person in whose name a Registered Note is registered (as the case may be), “holder” (in relation to a Note, Receipt, Coupon or Talon) means the bearer of any Bearer Note, Receipt, Coupon or Talon or the person in whose name a Registered Note is registered (as the case may be) and capitalised terms have the meanings given to them hereon, the absence of any such meaning indicating that such term is not applicable to the Notes.
36 2 No Exchange of Notes and Transfers of Registered Notes
(a) No Exchange of Notes: Registered Notes may not be exchanged for Bearer Notes. Bearer Notes of one Specified Denomination may not be exchanged for Bearer Notes of another Specified Denomination. Bearer Notes may not be exchanged for Registered Notes.
(b) Transfer of Registered Notes: Subject to paragraph (f) (Closed Periods), one or more Registered Notes may be transferred upon the surrender (at the specified office of the Registrar or any Transfer Agent) of the Certificate representing such Registered Notes to be transferred, together with the form of transfer endorsed on such Certificate, (or another form of transfer substantially in the same form and containing the same representations and certifications (if any), unless otherwise agreed by the Issuer), duly completed and executed and any other evidence as the Registrar or Transfer Agent may require. In the case of a transfer of part only of a holding of Registered Notes represented by one Certificate, a new Certificate shall be issued to the transferee in respect of the part transferred and a further new Certificate in respect of the balance of the holding not transferred shall be issued to the transferor. All transfers of Notes and entries on the Register will be made subject to the detailed regulations concerning transfers of Notes scheduled to the Agency Agreement. The regulations may be changed by the Issuer, with the prior written approval of the Registrar and the Trustee. A copy of the current regulations will be made available by the Registrar to any Noteholder upon request.
(c) Exercise of Options or Partial Redemption in Respect of Registered Notes: In the case of an exercise of an Issuer’s or Noteholders’ option in respect of, or a partial redemption of, a holding of Registered Notes represented by a single Certificate, a new Certificate shall be issued to the holder to reflect the exercise of such option or in respect of the balance of the holding not redeemed. In the case of a partial exercise of an option resulting in Registered Notes of the same holding having different terms, separate Certificates shall be issued in respect of those Notes of that holding that have the same terms. New Certificates shall only be issued against surrender of the existing Certificates to the Registrar or any Transfer Agent. In the case of a transfer of Registered Notes to a person who is already a holder of Registered Notes, a new Certificate representing the enlarged holding shall only be issued against surrender of the Certificate representing the existing holding.
(d) Delivery of New Certificates: Each new Certificate to be issued pursuant to Conditions 2(b) or (c) shall be available for delivery within five business days of receipt of the form of transfer or Exercise Notice (as defined in Condition 6(e)) and surrender of the Certificate for transfer, exercise or redemption. Delivery of the new Certificate(s) shall be made at the specified office of the Transfer Agent or of the Registrar (as the case may be) to whom delivery or surrender of such form of transfer, Exercise Notice or Certificate shall have been made or, at the option of the holder making such delivery or surrender as aforesaid and as specified in the relevant form of transfer, Exercise Notice or otherwise in writing, be mailed by uninsured post at the risk of the holder entitled to the new Certificate to such address as may be so specified, unless such holder requests otherwise and pays in advance to the relevant Transfer Agent the costs of such other method of delivery and/or such insurance as it may specify. In this Condition 2(d), “business day” means a day, other than a Saturday or Sunday, on which banks are open for business in the place of the specified office of the relevant Transfer Agent or the Registrar (as the case may be).
(e) Transfers Free of Charge: Transfers of Notes and Certificates on registration, transfer, exercise of an option or partial redemption shall be effected without charge by or on behalf of the Issuer, the Registrar or the Transfer Agents, but upon payment of any tax or other governmental charges that may be imposed in relation to it (or the giving of such indemnity as the Registrar or the relevant Transfer Agent may require).
37 (f) Closed Periods: No Noteholder may require the transfer of a Registered Note to be registered (i) during the period of 15 days ending on the due date for redemption of, or payment of any Instalment Amount in respect of, that Note, (ii) during the period of 15 days prior to any date on which Notes may be called for redemption by the Issuer at its option pursuant to Condition 6(d), (iii) after any such Note has been called for redemption or (iv) during the period of seven days ending on (and including) any due date for the payment of interest.
3 Guarantee and Status
(a) Guarantee: The Guarantor has unconditionally and irrevocably guaranteed the due payment of all sums expressed to be payable by the Issuer under the Trust Deed, the Notes, the Receipts and the Coupons. Its obligations in that respect (the “Guarantee”) are contained in the Trust Deed.
(b) Status of Notes and Guarantee: The Notes and the Receipts and Coupons relating to them constitute (subject to Condition 4) unsecured obligations of the Issuer and shall at all times rank pari passu and without any preference among themselves. The payment obligations of the Issuer under the Notes and the Receipts and Coupons relating to them and of the Guarantor under the Guarantee shall, save for such exceptions as may be provided by applicable law and subject to Condition 4, at all times rank at least equally with all other unsecured and unsubordinated indebtedness and monetary obligations of the Issuer and the Guarantor respectively, present and future.
4 Negative Pledge
So long as any Note or Coupon remains outstanding (as defined in the Trust Deed), neither the Issuer nor the Guarantor will create, or permit to subsist, any mortgage, charge, lien, pledge or other security interest, upon the whole or any part of its present or future undertaking, assets or revenues to secure any Relevant Indebtedness of the Issuer or the Guarantor, or any guarantee or indemnity by the Issuer or the Guarantor in respect of any Relevant Indebtedness of the Issuer or the Guarantor or any of the Subsidiaries (as defined in the Trust Deed) of the Guarantor, without at the same time or prior thereto according to the Notes and the Coupons the same security as is created or subsisting to secure any such Relevant Indebtedness, guarantee or indemnity, or such other security as either (i) the Trustee shall in its absolute discretion deem not materially less beneficial to the interest of the Noteholders or (ii) shall be approved by an Extraordinary Resolution (as defined in the Trust Deed) of the Noteholders.
In this Condition, “Relevant Indebtedness” means any indebtedness which is in the form of, or represented by, bonds, notes, debentures, loan stock or other securities which for the time being are, or are capable of being, quoted, listed or ordinarily dealt in on any stock exchange or over-the-counter or other securities market having an original maturity of more than 365 days from their date of issue.
5 Interest and other Calculations
(a) Interest on Fixed Rate Notes: Each Fixed Rate Note bears interest on its outstanding nominal amount from the Interest Commencement Date at the rate per annum (expressed as a percentage) equal to the Rate of Interest, such interest being payable in arrear on each Interest Payment Date. The amount of interest payable shall be determined in accordance with Condition 5(i).
38 (b) Interest on Floating Rate Notes and Index Linked Interest Notes (for Non-Singapore Dollar Notes only):
(i) Interest Payment Dates: Each Floating Rate Note and Index Linked Interest Note bears interest on its outstanding nominal amount from the Interest Commencement Date at the rate per annum (expressed as a percentage) equal to the Rate of Interest, such interest being payable in arrear on each Interest Payment Date. The amount of interest payable shall be determined in accordance with Condition 5(i). Such Interest Payment Date(s) is/are either shown hereon as Specified Interest Payment Dates or, if no Specified Interest Payment Date(s) is/are shown hereon, Interest Payment Date shall mean each date which falls the number of months or other period shown hereon as the Interest Period after the preceding Interest Payment Date or, in the case of the first Interest Payment Date, after the Interest Commencement Date.
(ii) Business Day Convention: If any date referred to in these Conditions that is specified to be subject to adjustment in accordance with a Business Day Convention would otherwise fall on a day that is not a Business Day, then, if the Business Day Convention specified is (A) the Floating Rate Business Day Convention, such date shall be postponed to the next day that is a Business Day unless it would thereby fall into the next calendar month, in which event (x) such date shall be brought forward to the immediately preceding Business Day and (y) each subsequent such date shall be the last Business Day of the month in which such date would have fallen had it not been subject to adjustment, (B) the Following Business Day Convention, such date shall be postponed to the next day that is a Business Day, (C) the Modified Following Business Day Convention, such date shall be postponed to the next day that is a Business Day unless it would thereby fall into the next calendar month, in which event such date shall be brought forward to the immediately preceding Business Day or (D) the Preceding Business Day Convention, such date shall be brought forward to the immediately preceding Business Day.
(iii) Rate of Interest for Floating Rate Notes: The Rate of Interest in respect of Floating Rate Notes for each Interest Accrual Period shall be determined in the manner specified hereon and the provisions below relating to either ISDA Determination or Screen Rate Determination shall apply, depending upon which is specified hereon.
(A) ISDA Determination for Floating Rate Notes
Where ISDA Determination is specified hereon as the manner in which the Rate of Interest is to be determined, the Rate of Interest for each Interest Accrual Period shall be determined by the Calculation Agent as a rate equal to the relevant ISDA Rate. For the purposes of this sub-paragraph (A),“ISDA Rate” for an Interest Accrual Period means a rate equal to the Floating Rate that would be determined by the Calculation Agent under a Swap Transaction under the terms of an agreement incorporating the ISDA Definitions and under which:
(x) the Floating Rate Option is as specified hereon
(y) the Designated Maturity is a period specified hereon and
(z) the relevant Reset Date is the first day of that InterestAccrual Period unless otherwise specified hereon.
For the purposes of this sub-paragraph (A), “Floating Rate”,“Calculation Agent”,“Floating Rate Option”,“Designated Maturity”,“Reset Date” and “Swap Transaction” have the meanings given to those terms in the ISDA Definitions.
39 (B) Screen Rate Determination for Floating Rate Notes
(x) Where Screen Rate Determination is specified hereon as the manner in which the Rate of Interest is to be determined, the Rate of Interest for each Interest Accrual Period will, subject as provided below, be either:
(1) the offered quotation; or
(2) the arithmetic mean (rounded up, if necessary, to the nearest 5 decimal places) of the offered quotations,
(expressed as a percentage rate per annum) for the Reference Rate which appears or appear, as the case may be, on the Relevant Screen Page as at either 11.00 a.m. (London time in the case of LIBOR or Brussels time in the case of EURIBOR) on the Interest Determination Date in question as determined by the Calculation Agent. If five or more of such offered quotations are available on the Relevant Screen Page, the highest (or, if there is more than one such highest quotation, one only of such quotations) and the lowest (or, if there is more than one such lowest quotation, one only of such quotations) shall be disregarded by the Calculation Agent for the purpose of determining the arithmetic mean of such offered quotations.
If the Reference Rate from time to time in respect of Floating Rate Notes is specified hereon as being other than LIBOR or EURIBOR, the Rate of Interest in respect of such Notes will be determined as provided hereon.
(y) if the Relevant Screen Page is not available or if, sub-paragraph (x)(1) applies and no such offered quotation appears on the Relevant Screen Page or if sub-paragraph (x)(2) above applies and fewer than three such offered quotations appear on the Relevant Screen Page in each case as at the time specified above, subject as provided below, the Calculation Agent shall request, if the Reference Rate is LIBOR, the principal London office of each of the Reference Banks or, if the Reference Rate is EURIBOR, the principal Euro-zone office of each of the Reference Banks, to provide the Calculation Agent with its offered quotation (expressed as a percentage rate per annum) for the Reference Rate if the Reference Rate is LIBOR, at approximately 11.00 a.m. (London time), or if the Reference Rate is EURIBOR, at approximately 11.00 a.m. (Brussels time) on the Interest Determination Date in question. If two or more of the Reference Banks provide the Calculation Agent with such offered quotations, the Rate of Interest for such InterestAccrual Period shall be the arithmetic mean of such offered quotations as determined by the Calculation Agent; and
(z) if paragraph (y) above applies and the Calculation Agent determines that fewer than two Reference Banks are providing offered quotations, subject as provided below, the Rate of Interest shall be the arithmetic mean of the rates per annum (expressed as a percentage) as communicated to (and at the request of) the Calculation Agent by the Reference Banks or any two or more of them, at which such banks were offered, if the Reference Rate is LIBOR, at approximately 11.00 a.m. (London time) or, if the Reference Rate is EURIBOR, at approximately 11.00 a.m. (Brussels time) on the relevant Interest Determination Date, deposits in the Specified Currency for a period equal to that which would have been used for the Reference Rate by leading banks in, if the Reference Rate is LIBOR, the London inter-bank market or, if the Reference Rate is EURIBOR, the Euro-zone inter-bank market, as the
40 case may be, or, if fewer than two of the Reference Banks provide the Calculation Agent with such offered rates, the offered rate for deposits in the Specified Currency for a period equal to that which would have been used for the Reference Rate, or the arithmetic mean of the offered rates for deposits in the Specified Currency for a period equal to that which would have been used for the Reference Rate, at which, if the Reference Rate is LIBOR, at approximately 11.00 a.m. (London time) or, if the Reference Rate is EURIBOR, at approximately 11.00 a.m. (Brussels time), on the relevant Interest Determination Date, any one or more banks (which bank or banks is or are in the opinion of the Trustee and the Issuer suitable for such purpose) informs the Calculation Agent it is quoting to leading banks in, if the Reference Rate is LIBOR, the London inter-bank market or, if the Reference Rate is EURIBOR, the Euro-zone inter-bank market, as the case may be, provided that, if the Rate of Interest cannot be determined in accordance with the foregoing provisions of this paragraph, the Rate of Interest shall be determined as at the last preceding Interest Determination Date (though substituting, where a different Margin or Maximum or Minimum Rate of Interest is to be applied to the relevant Interest Accrual Period from that which applied to the last preceding Interest Accrual Period, the Margin or Maximum or Minimum Rate of Interest relating to the relevant Interest Accrual Period, in place of the Margin or Maximum or Minimum Rate of Interest relating to that last preceding Interest Accrual Period).
(iv) Rate of Interest for Index Linked Interest Notes: The Rate of Interest in respect of Index Linked Interest Notes for each Interest Accrual Period shall be determined in the manner specified hereon and interest will accrue by reference to an Index or Formula as specified hereon.
(c) Interest on Floating Rate Notes and Index Linked Interest Notes (for Singapore Dollar Notes only):
(i) Interest Payment Dates: Each Floating Rate Note or Index Linked Interest Note bears interest on its outstanding nominal amount from the Interest Commencement Date at the rate per annum (expressed as a percentage) equal to the Rate of Interest, such interest being payable in arrear on each Interest Payment Date. Such Interest Payment Date(s) is/are either shown hereon as Specified Interest Payment Dates or, if no Specified Interest Payment Date(s) is/are shown hereon, Interest Payment Date shall mean each date which falls the number of months or other period specified hereon as the Interest Period after the preceding Interest Payment Date or, in the case of the first Interest Payment Date, after the Interest Commencement Date.
(ii) Business Day Convention: If any date referred to in these Conditions that is specified to be subject to adjustment in accordance with a Business Day Convention would otherwise fall on a day that is not a Business Day, then if the Business Day Convention specified is (A) the Floating Rate Business Day Convention, such date shall be postponed to the next day which is a Business Day unless it would thereby fall into the next calendar month, in which event (x) such date shall be brought forward to the immediately preceding Business Day and (y) each subsequent such date shall be the last Business Day of the month in which such date would have fallen had it not been subject to adjustment, (B) the Following Business Day Convention, such date shall be postponed to the next day that is a Business Day, (C) the Modified Following Business Day Convention, such date shall be postponed to the next day that is a Business Day unless it would thereby fall into the next calendar month, in which event such date shall
41 be brought forward to the immediately preceding Business Day or (D) the Preceding Business Day Convention, such date shall be brought forward to the immediately preceding Business Day.
(iii) Rate of Interest for Floating Rate Notes: Each Floating Rate Note bears interest at a floating rate determined by reference to the Reference Rate as stated hereon, including (in the case of Singapore Dollar Notes) Swap Rate (in which case such Note will be a Swap Rate Note). A “Swap Rate Note” means a Note which bears interest calculated in the manner set out in paragraph (B) below.
(iv) Determination of Rate of Interest: The Rate of Interest payable from time to time in respect of each Floating Rate Note will be determined by the Calculation Agent on the basis of the following provisions:
(A) In the case of Floating Rate Notes which are not Swap Rate Notes, the Calculation Agent will determine the Rate of Interest in respect of any Interest Accrual Period at or about the Relevant Time on the Interest Determination Date in respect of such Interest Accrual Period as follows:
(1) Where Screen Rate Determination is specified hereon as the manner in which the Rate of Interest is to be determined, the Rate of Interest in respect of each Interest Accrual Period will, subject as provided below, be:
(aa) the Reference Rate (where such Reference Rate on the Relevant Screen Page is a composite quotation or is customarily supplied by one entity); or
(bb) the arithmetic mean (rounded up, if necessary, to the nearest 5 decimal places) of the Reference Rates of the persons whose Reference Rates appear on the Relevant Screen Page, in each case appearing on the Relevant Screen Page at the Relevant Time on the Interest Determination Date;
(2) if the Relevant Screen Page is not available or if paragraph (A)(1)(aa) above applies and no Reference Rate appears on the Relevant Screen Page at the Relevant Time on the Interest Determination Date or if paragraph (A)(1)(bb) above applies and fewer than two Reference Rates appear on the Relevant Screen Page at the Relevant Time on the Interest Determination Date, subject as provided below, the Rate of Interest shall be the rate per annum which the Calculation Agent determines to be the arithmetic mean (rounded up, if necessary, to the nearest 5 decimal places) of the Reference Rates that each of the Reference Banks is quoting to leading banks in Singapore at the Relevant Time on the Interest Determination Date; and
(3) if paragraph (A)(2) above applies and the CalculationAgent determines that fewer than two Reference Banks are so quoting Relevant Rates, the Rate of Interest shall be the Rate of Interest determined on the previous Interest Determination Date.
(B) In the case of Floating Rate Notes which are Swap Rate Notes:
(1) the Calculation Agent will, at or about the Relevant Time on the relevant Interest Determination Date in respect of each Interest Accrual Period, determine the Rate of Interest for such Interest Accrual Period which shall be the rate which appears on the Reuters Screen ABSIRFIX01 Page under the caption “ASSOCIATION OF BANKS IN SINGAPORE — SIBOR AND
42 SWAP OFFER RATES — RATES AT 11:00 A.M. SINGAPORE TIME” under the column headed “SGD SWAP OFFER” (or such replacement page thereof for the purpose of displaying the swap rates of leading reference banks) at or about the Relevant Time on such Interest Determination Date and for a period equal to the duration of such Interest Accrual Period;
(2) if on any Interest Determination Date, no such rate is quoted on the Reuters ScreenABSIRFIX01 Page (or such other replacement page as aforesaid) or the Reuters Screen ABSIRFIX01 Page (or such other replacement page as aforesaid) is unavailable for any reason, the Calculation Agent will determine the Rate of Interest (which shall be rounded up, if necessary, to the nearest 5 decimal places) for such InterestAccrual Period in accordance with the following formula:
In the case of Premium: 365 (Premium × 36500) Rate of Interest = × SIBOR + 360 (T × Spot Rate)
(SIBOR × Premium) 365 + × (Spot Rate) 360 In the case of Discount: 365 (Discount × 36500) Rate of Interest = × SIBOR − 360 (T × Spot Rate)
(SIBOR × Discount) 365 − × (Spot Rate) 360 where: SIBOR = the rate which appears under the caption “SINGAPORE INTERBANK OFFER RATES (DOLLAR DEPOSITS) AT 11:00 A.M.” and the row headed “SIBOR USD” on the Reuters Screen SIBO Page of the Reuters Monitor Money Rates Service (or such other page as may replace the Reuters Screen SIBO Page for the purpose of displaying Singapore inter-bank US Dollar offered rates of leading reference banks) at or about the Relevant Time on the relevant Interest Determination Date for a period equal to the duration of the Interest Accrual Period concerned; Spot Rate = the rate (determined by the CalculationAgent) to be the arithmetic mean (rounded up, if necessary, to the nearest 5 decimal places) of the rates quoted by the Reference Banks and which appear on the Reuters Screen ABSIRFIX06 Page under the caption “ASSOCIATIONOFBANKSINSINGAPORE—SGD SPOT AND SWAP OFFER RATES AT 11:00 A.M. SINGAPORE” and the column headed “SPOT” (or such other replacement page thereof for the purpose of displaying the spot rates and swap points of leading reference banks) at or about the Relevant Time on the relevant Interest Determination Date for a period equal to the duration of the Interest Accrual Period concerned; Premium or = the rate (determined by the Calculation Agent) to be the Discount arithmetic mean (rounded up, if necessary, to the
43 nearest 5 decimal places) of the rates quoted by the Reference Banks for a period equal to the duration of the Interest Accrual Period concerned which appear on the Reuters Screen ABSIRFIX06 Page under the caption “ASSOCIATIONOFBANKSINSINGAPORE—SGD SPOT AND SWAP OFFER RATES AT 11:00 A.M. SINGAPORE” (or such other replacement page thereof for the purpose of displaying the spot rates and swap points of leading reference banks) at or about the Relevant Time on the relevant Interest Determination Date for a period equal to the duration of the Interest Accrual Period concerned; and T = the number of days in the Interest Accrual Period concerned.
(3) if on any Interest Determination Date any one of the components for the purposes of calculating the Rate of Interest under (B) above is not quoted on the relevant Reuters Screen Page (or such other replacement page as aforesaid) or the relevant Reuters Screen Page (or such other replacement page as aforesaid) is unavailable for any reason, the Calculation Agent will request the principal Singapore offices of the Reference Banks to provide the Calculation Agent with quotations of their Swap Rates for the Interest Accrual Period concerned at or about the Relevant Time on that Interest Determination Date and the Rate of Interest for such Interest Accrual Period shall be the rate per annum equal to the arithmetic mean (rounded up, if necessary, to the nearest 5 decimal places) of the Swap Rates quoted by the Reference Banks to the Calculation Agent. The “Swap Rate” of a Reference Bank means the rate at which that Reference Bank can generate Singapore Dollars for the Interest Accrual Period concerned in the Singapore inter-bank market at or about the Relevant Time on the relevant Interest Determination Date and shall be determined as follows:
In the case of Premium: 365 (Premium × 36500) Swap Rate = × SIBOR + 360 (T × Spot Rate)
(SIBOR × Premium) 365 + × (Spot Rate) 360 In the case of Discount: 365 (Discount × 36500) Swap Rate = × SIBOR − 360 (T × Spot Rate)
(SIBOR × Discount) 365 − × (Spot Rate) 360 where: SIBOR = the rate per annum at which US Dollar deposits for a period equal to the duration of the InterestAccrual Period concerned are being offered by that Reference Bank to prime banks in the Singapore inter-bank market at or about the Relevant Time on the relevant Interest Determination Date; Spot Rate = the rate at which that Reference Bank sells US Dollars spot in exchange for Singapore Dollars in the Singapore
44 inter-bank market at or about the Relevant Time on the relevant Interest Determination Date; Premium or = the rate (determined by the Calculation Agent) to be the Discount arithmetic mean (rounded up, if necessary, to the nearest 5 decimal places) of the rates quoted by the Reference Banks for a period equal to the duration of the Interest Accrual Period concerned which appear on the Reuters Screen ABSIRFIX06 Page under the caption “ASSOCIATIONOFBANKSINSINGAPORE—SGD SPOT AND SWAP OFFER RATES AT 11:00 A.M. SINGAPORE” (or such other replacement page thereof for the purpose of displaying the spot rates and swap points of leading reference banks) at or about the Relevant Time on the relevant Interest Determination Date for a period equal to the duration of the Interest Accrual Period concerned; and T = the number of days in the Interest Accrual Period concerned; and
(4) if on any Interest Determination Date one only or none of the Reference Banks provides the Calculation Agent with quotations of their Swap Rate(s), the Rate of Interest shall be determined by the Calculation Agent to be the rate per annum equal to the arithmetic mean (rounded up, if necessary, to the nearest 5 decimal places) of the rates quoted by the Reference Banks or those of them (being at least two in number) to the Calculation Agent at or about the Relevant Time on such Interest Determination Date as being their cost (including the cost occasioned by or attributable to complying with reserves, liquidity, deposit or other requirements imposed on them by any relevant authority or authorities) of funding an amount equal to the aggregate principal amount of the relevant Floating Rate Notes for such Interest Accrual Period by whatever means they determine to be most appropriate, or if on such Interest Determination Date one only or none of the Reference Banks provides the Calculation Agent with such quotation, the Rate of Interest for the relevant Interest Accrual Period shall be the rate per annum equal to the arithmetic mean (rounded up, if necessary, to the nearest 5 decimal places) of the prime lending rates for Singapore Dollars quoted by the Reference Banks at or about the Relevant Time on such Interest Determination Date;
(C) On the last day of each Interest Accrual Period, the Issuer will pay interest on each Floating Rate Note to which such Interest Accrual Period relates at the Rate of Interest for such Interest Accrual Period.
(v) Rate of Interest for Index Linked Interest Notes: The Rate of Interest in respect of Index Linked Interest Notes for each Interest Accrual Period shall be determined in the manner specified hereon and interest will accrue by reference to an Index or Formula as specified hereon.
(d) Zero Coupon Notes: Where a Note the Interest Basis of which is specified to be Zero Coupon is repayable prior to the Maturity Date and is not paid when due, the amount due and payable prior to the Maturity Date shall be the Early Redemption Amount of such Note. As from the Maturity Date, the Rate of Interest for any overdue principal of such a Note shall be a rate per annum (expressed as a percentage) equal to the Amortisation Yield (as described in Condition 6(b)(i)).
45 (e) Dual Currency Notes: In the case of Dual Currency Notes, if the rate or amount of interest falls to be determined by reference to a Rate of Exchange or a method of calculating Rate of Exchange, the rate or amount of interest payable shall be determined in the manner specified hereon.
(f) Partly Paid Notes: In the case of Partly Paid Notes (other than Partly Paid Notes which are Zero Coupon Notes), interest will accrue as aforesaid on the paid-up nominal amount of such Notes and otherwise as specified hereon.
(g) Accrual of Interest: Interest shall cease to accrue on each Note on the due date for redemption unless, upon due presentation, payment is improperly withheld or refused, in which event interest shall continue to accrue (both before and after judgment) at the Rate of Interest in the manner provided in this Condition 5 to the Relevant Date.
(h) Margin, Maximum/Minimum Rates of Interest, Instalment Amounts and Redemption Amounts and Rounding:
(i) If any Margin is specified hereon (either (x) generally, or (y) in relation to one or more Interest Accrual Periods), an adjustment shall be made to all Rates of Interest, in the case of (x), or the Rates of Interest for the specified Interest Accrual Periods, in the case of (y), calculated in accordance with this Condition 5 by adding (if a positive number) or subtracting the absolute value (if a negative number) of such Margin, subject always to the next paragraph.
(ii) If any Maximum or Minimum Rate of Interest, Instalment Amount or Redemption Amount is specified hereon, then any Rate of Interest, Instalment Amount or Redemption Amount shall be subject to such maximum or minimum, as the case may be.
(iii) For the purposes of any calculations required pursuant to these Conditions (unless otherwise specified), (x) all percentages resulting from such calculations shall be rounded, if necessary, to the nearest one hundred-thousandth of a percentage point (with halves being rounded up), (y) all figures shall be rounded to seven significant figures (with halves being rounded up) and (z) all currency amounts that fall due and payable shall be rounded to the nearest unit of such currency (with halves being rounded up), save in the case of yen, which shall be rounded down to the nearest yen. For these purposes “unit” means the lowest amount of such currency that is available as legal tender in the country of such currency.
(i) Calculations: The amount of interest payable per CalculationAmount in respect of any Note for any Interest Accrual Period shall be equal to the product of the Rate of Interest, the Calculation Amount specified hereon, and the Day Count Fraction for such Interest Accrual Period, unless an Interest Amount (or a formula for its calculation) is applicable to such InterestAccrual Period, in which case the amount of interest payable per Calculation Amount in respect of such Note for such Interest Accrual Period shall equal such Interest Amount (or be calculated in accordance with such formula). Where any Interest Period comprises two or more Interest Accrual Periods, the amount of interest payable per Calculation Amount in respect of such Interest Period shall be the sum of the Interest Amounts payable in respect of each of those Interest Accrual Periods. In respect of any other period for which interest is required to be calculated, the provisions above shall apply save that the Day Count Fraction shall be for the period for which interest is required to be calculated.
(j) Determination and Publication of Rates of Interest, Interest Amounts, Final Redemption Amounts, Early Redemption Amounts, Optional Redemption Amounts and Instalment Amounts: The Calculation Agent shall, as soon as practicable on each
46 Interest Determination Date, or such other time on such date as the Calculation Agent may be required to calculate any rate or amount, obtain any quotation or make any determination or calculation, determine such rate and calculate the Interest Amounts for the relevant Interest Accrual Period, calculate the Final Redemption Amount, Early Redemption Amount, Optional Redemption Amount or Instalment Amount, obtain such quotation or make such determination or calculation, as the case may be, and cause the Rate of Interest and the Interest Amounts for each Interest Accrual Period and the relevant Interest Payment Date and, if required to be calculated, the Final Redemption Amount, Early Redemption Amount, Optional Redemption Amount or any Instalment Amount to be notified to the Trustee, the Issuer, each of the Paying Agents, the Noteholders, any other Calculation Agent appointed in respect of the Notes that is to make a further calculation upon receipt of such information and, if the Notes are listed on a stock exchange and the rules of such exchange or other relevant authority so require, such exchange or other relevant authority as soon as possible after their determination but in no event later than (i) the commencement of the relevant Interest Period, if determined prior to such time, in the case of notification to such exchange of a Rate of Interest and Interest Amount, or (ii) in all other cases, the fourth Business Day after such determination. Where any Interest Payment Date or Interest Period Date is subject to adjustment pursuant to Condition 5(b)(ii), the Interest Amounts and the Interest Payment Date so published may subsequently be amended (or appropriate alternative arrangements made with the consent of the Trustee by way of adjustment) without notice in the event of an extension or shortening of the Interest Period. If the Notes become due and payable under Condition 10, the accrued interest and the Rate of Interest payable in respect of the Notes shall nevertheless continue to be calculated as previously in accordance with this Condition but no publication of the Rate of Interest or the Interest Amount so calculated need be made unless the Trustee otherwise requires. The determination of any rate or amount, the obtaining of each quotation and the making of each determination or calculation by the Calculation Agent(s) shall (in the absence of manifest error) be final and binding upon all parties.
(k) Determination or Calculation by Trustee: If the Calculation Agent does not at any time for any reason determine or calculate the Rate of Interest for an Interest Accrual Period or any Interest Amount, Instalment Amount, Final Redemption Amount, Early Redemption Amount or Optional Redemption Amount, and no replacement Calculation Agent has been appointed by the Issuer within 2 Business Days of the relevant Determination Date or Interest Determination Date, the Trustee shall do so (or shall appoint an agent on its behalf to do so) and such determination or calculation shall be deemed to have been made by the Calculation Agent. In doing so, the Trustee shall apply the foregoing provisions of this Condition, with any necessary consequential amendments, to the extent that, in its opinion, it can do so, and, in all other respects it shall do so in such manner as it shall deem fair and reasonable in all the circumstances.
(l) Definitions: In these Conditions, unless the context otherwise requires, the following defined terms shall have the meanings set out below:
“Business Day” means:
(i) in the case of Notes denominated in a currency other than Singapore Dollars or euros, a day (other than a Saturday or Sunday) on which commercial banks and foreign exchange markets settle payments in the principal financial centre for such currency and/or
(ii) in the case of Notes denominated in euros, a day on which the TARGET system is operating (a “TARGET Business Day”) and/or
47 (iii) in the case of Singapore Dollar Notes, a day (other than a Saturday, Sunday or gazetted public holiday) on which commercial banks settle payments to Singapore and/or
(iv) in the case of a currency and/or one or more Business Centres a day (other than a Saturday or a Sunday) on which commercial banks and foreign exchange markets settle payments in such currency in the Business Centre(s) or, if no currency is indicated, generally in each of the Business Centres.
“Day Count Fraction” means, in respect of the calculation of an amount of interest on any Note for any period of time (from and including the first day of such period to but excluding the last) (whether or not constituting an Interest Period or an Interest Accrual Period, the “Calculation Period”):
(i) if “Actual/Actual” or “Actual/Actual — ISDA” is specified hereon, the actual number of days in the Calculation Period divided by 365 (or, if any portion of that Calculation Period falls in a leap year, the sum of (A) the actual number of days in that portion of the Calculation Period falling in a leap year divided by 366 and (B) the actual number of days in that portion of the Calculation Period falling in a non-leap year divided by 365)
(ii) if “Actual/365 (Fixed)” is specified hereon, the actual number of days in the Calculation Period divided by 365
(iii) if “Actual/360” is specified hereon, the actual number of days in the Calculation Period divided by 360
(iv) if “30/360”,“360/360” or “Bond Basis” is specified hereon, the number of days in the Calculation Period divided by 360, calculated on a formula basis as follows:
[360 x (Y − Y )] + [30 x (M − M )] + (D − D ) Day Count Fraction = 2 1 2 1 2 1 360
where:
“Y1” is the year, expressed as a number, in which the first day of the Calculation Period falls;
“Y2” is the year, expressed as a number, in which the day immediately following the last day included in the Calculation Period falls;
“M1” is the calendar month, expressed as a number, in which the first day of the Calculation Period falls;
“M2” is the calendar month, expressed as a number, in which the day immediately following the last day included in the Calculation Period falls;
“D1” is the first calendar day, expressed as a number, of the Calculation Period, unless
such number would be 31, in which case D1 will be 30; and
“D2” is the calendar day, expressed as a number, immediately following the last day
included in the Calculation Period, unless such number would be 31 and D1 is greater
than 29, in which case D2 will be 30
48 (v) if “30E/360” or “Eurobond Basis” is specified hereon, the number of days in the Calculation Period divided by 360, calculated on a formula basis as follows:
[360 x (Y − Y )] + [30 x (M − M )] + (D − D ) Day Count Fraction = 2 1 2 1 2 1 360
where:
“Y1” is the year, expressed as a number, in which the first day of the Calculation Period falls;
“Y2” is the year, expressed as a number, in which the day immediately following the last day included in the Calculation Period falls;
“M1” is the calendar month, expressed as a number, in which the first day of the Calculation Period falls;
“M2” is the calendar month, expressed as a number, in which the day immediately following the last day included in the Calculation Period falls;
“D1” is the first calendar day, expressed as a number, of the Calculation Period, unless
such number would be 31, in which case D1 will be 30; and
“D2” is the calendar day, expressed as a number, immediately following the last day
included in the Calculation Period, unless such number would be 31, in which case D2 will be 30
(vi) if “30E/360 (ISDA)” is specified hereon, the number of days in the Calculation Period divided by 360, calculated on a formula basis as follows:
[360 x (Y − Y )] + [30 x (M − M )] + (D − D ) Day Count Fraction = 2 1 2 1 2 1 360
where:
“Y1” is the year, expressed as a number, in which the first day of the Calculation Period falls;
“Y2” is the year, expressed as a number, in which the day immediately following the last day included in the Calculation Period falls;
“M1” is the calendar month, expressed as a number, in which the first day of the Calculation Period falls;
“M2” is the calendar month, expressed as a number, in which the day immediately following the last day included in the Calculation Period falls;
“D1” is the first calendar day, expressed as a number, of the Calculation Period, unless (i) that day is the last day of February or (ii) such number would be 31, in which case
D1 will be 30; and
“D2” is the calendar day, expressed as a number, immediately following the last day included in the Calculation Period, unless (i) that day is the last day of February but not
the Maturity Date or (ii) such number would be 31, in which case D2 will be 30
(vii) if “Actual/Actual-ICMA” is specified hereon,
(a) if the Calculation Period is equal to or shorter than the Determination Period during which it falls, the number of days in the Calculation Period divided by the
49 product of (x) the number of days in such Determination Period and (y) the number of Determination Periods normally ending in any year; and
(b) if the Calculation Period is longer than one Determination Period, the sum of:
(x) the number of days in such Calculation Period falling in the Determination Period in which it begins divided by the product of (1) the number of days in such Determination Period and (2) the number of Determination Periods normally ending in any year; and
(y) the number of days in such Calculation Period falling in the next Determination Period divided by the product of (1) the number of days in such Determination Period and (2) the number of Determination Periods normally ending in any year
where:
“Determination Period” means the period from and including a Determination Date in any year to but excluding the next Determination Date; and
“Determination Date” means the date(s) specified as such hereon or, if none is so specified, the Interest Payment Date(s)
“Euro-zone” means the region comprised of member states of the European Union that adopt the single currency in accordance with the Treaty establishing the European Community, as amended.
“Interest Accrual Period” means the period beginning on (and including) the Interest Commencement Date and ending on (but excluding) the first Interest Period Date and each successive period beginning on (and including) an Interest Period Date and ending on (but excluding) the next succeeding Interest Period Date.
“Interest Amount” means:
(i) in respect of an Interest Accrual Period, the amount of interest payable per Calculation Amount for that Interest Accrual Period and which, in the case of Fixed Rate Notes, and unless otherwise specified hereon, shall mean the Fixed Coupon Amount or Broken Amount specified hereon as being payable on the Interest Payment Date ending the Interest Period of which such Interest Accrual Period forms part; and
(ii) in respect of any other period, the amount of interest payable per Calculation Amount for that period.
“Interest Commencement Date” means the Issue Date or such other date as may be specified hereon.
“Interest Determination Date” means (x) in the case of Non-Singapore Dollar Notes, with respect to a Rate of Interest and Interest Accrual Period, the date specified as such hereon or, if none is so specified, (i) the first day of such Interest Accrual Period if the Specified Currency is Sterling or (ii) the day falling two Business Days in London for the Specified Currency prior to the first day of such Interest Accrual Period if the Specified Currency is neither Sterling nor euro or (iii) the day falling two TARGET Business Days prior to the first day of such Interest Accrual Period if the Specified Currency is euro; or (y) in the case of Singapore
50 Dollar Notes, in respect of any Interest Accrual Period, that number of Business Days in Singapore prior to the first day of the Interest Accrual Period as specified hereon.
“Interest Period” means the period beginning on and including the Interest Commencement Date and ending on but excluding the first Interest Payment Date and each successive period beginning on and including an Interest Payment Date and ending on but excluding the next succeeding Interest Payment Date.
“Interest Period Date” means each Interest Payment Date unless otherwise specified hereon.
“ISDA Definitions” means the 2006 ISDA Definitions, as published by the International Swaps and Derivatives Association, Inc., unless otherwise specified hereon.
“Rate of Interest” means the rate of interest payable from time to time in respect of this Note and that is either specified or calculated in accordance with the provisions hereon.
“Reference Banks” means (i) in the case of a determination of LIBOR, the principal London office of four major banks in the London inter-bank market;(ii) in the case of a determination of EURIBOR, the principal Euro-zone office of four major banks in the Euro-zone inter-bank market; and (iii) in the case of a determination of the relevant Reference Rate, SIBOR or Swap Rate, the principal Singapore office of three major banks in the Singapore inter-bank market in each case selected by the Calculation Agent or as specified hereon.
“Reference Rate” means the rate specified as such hereon.
“Relevant Screen Page” means such page, section, caption, column or other part of a particular information service as may be specified hereon or such other page, section, caption, column or other part as may replace it on that information service or such other information service, in each case, as may be nominated by the person providing or sponsoring the information appearing there for the purpose of displaying rates or prices comparable to the Reference Rate.
“Relevant Time” means 11.00 a.m. (Singapore time).
“Specified Currency” means the currency specified as such hereon or, if none is specified, the currency in which the Notes are denominated.
“TARGET System” means the Trans-European Automated Real-Time Gross Settlement Express Transfer (known as TARGET2) System which was launched on 19 November 2007 or any successor thereto.
(m) Calculation Agent: The Issuer shall procure that there shall at all times be one or more Calculation Agents if provision is made for them hereon and for so long as any Note is outstanding (as defined in the Trust Deed). Where more than one Calculation Agent is appointed in respect of the Notes, references in these Conditions to the Calculation Agent shall be construed as each Calculation Agent performing its respective duties under the Conditions. If the Calculation Agent is unable or unwilling to act as such or if the Calculation Agent fails duly to establish the Rate of Interest for an Interest Accrual Period or to calculate any Interest Amount, Instalment Amount, Final Redemption Amount, Early Redemption Amount or Optional Redemption Amount, as the case may be, or to comply with any other requirement, the Issuer shall (with the prior approval of the Trustee or an Extraordinary
51 Resolution of holders of the Notes) appoint a leading bank or financial institution engaged in the interbank market (or, if appropriate, money, swap or over-the-counter index options market) that is most closely connected with the calculation or determination to be made by the Calculation Agent (acting through its principal London office or any other office actively involved in such market) to act as such in its place. The Calculation Agent may not resign its duties without a successor having been appointed as aforesaid.
6 Redemption, Purchase and Options
(a) Redemption by Instalments and Final Redemption:
(i) Unless previously redeemed, purchased and cancelled as provided in this Condition 6, each Note that provides for Instalment Dates and Instalment Amounts shall be partially redeemed on each Instalment Date at the related Instalment Amount specified hereon. The outstanding nominal amount of each such Note shall be reduced by the Instalment Amount (or, if such Instalment Amount is calculated by reference to a proportion of the nominal amount of such Note, such proportion) for all purposes with effect from the related Instalment Date, unless payment of the Instalment Amount is improperly withheld or refused, in which case, such amount shall remain outstanding until the Relevant Date relating to such Instalment Amount.
(ii) Unless previously redeemed, purchased and cancelled as provided in this Condition 6, each Note shall be finally redeemed on the Maturity Date specified hereon at its Final Redemption Amount (which, unless otherwise provided, is its nominal amount) or, in the case of a Note falling within paragraph (i) above, its final Instalment Amount.
(b) Early Redemption:
(i) Zero Coupon Notes:
(A) The Early Redemption Amount payable in respect of any Zero Coupon Note, the Early Redemption Amount of which is not linked to an index and/or a formula, upon redemption of such Note pursuant to Condition 6(c) or upon it becoming due and payable as provided in Condition 10 shall be the Amortised Face Amount (calculated as provided below) of such Note unless otherwise specified hereon.
(B) Subject to the provisions of sub-paragraph (C) below, the Amortised Face Amount of any such Note shall be the scheduled Final Redemption Amount of such Note on the Maturity Date discounted at a rate per annum (expressed as a percentage) equal to theAmortisation Yield (which, if none is shown hereon, shall be such rate as would produce an Amortised Face Amount equal to the issue price of the Notes if they were discounted back to their issue price on the Issue Date) compounded annually.
(C) If the Early Redemption Amount payable in respect of any such Note upon its redemption pursuant to Condition 6(c) or upon it becoming due and payable as provided in Condition 10 is not paid when due, the Early Redemption Amount due and payable in respect of such Note shall be the Amortised Face Amount of such Note as defined in sub-paragraph (B) above, except that such sub-paragraph shall have effect as though the date on which the Note becomes due and payable were the Relevant Date. The calculation of the Amortised Face Amount in accordance with this sub-paragraph shall continue to be made (both before and after judgment) until the Relevant Date, unless the Relevant Date falls on or after the Maturity Date, in which case the amount due and payable shall be the scheduled Final Redemption Amount of such Note on the Maturity Date together with any interest that may accrue in accordance with Condition 5(d).
52 Where such calculation is to be made for a period of less than one year, it shall be made on the basis of the Day Count Fraction shown hereon.
(ii) Other Notes: The Early RedemptionAmount payable in respect of any Note (other than Notes described in (i) above), upon redemption of such Note pursuant to Condition 6(c) or upon it becoming due and payable as provided in Condition 10, shall be the Final Redemption Amount unless otherwise specified hereon.
(c) Redemption for Taxation Reasons: The Notes may be redeemed at the option of the Issuer in whole, but not in part, on any Interest Payment Date (if this Note is either a Floating Rate Note or an Index Linked Note) or at any time (if this Note is neither a Floating Rate Note nor an Index Linked Note), on giving not less than 30 nor more than 60 days’ notice to the Noteholders (which notice shall be irrevocable) at their Early Redemption Amount (as described in Condition 6(b) above) (together with interest accrued to the date fixed for redemption), if (i) the Issuer (or if the Guarantee was called, the Guarantor) has or will become obliged to pay additional amounts as described under Condition 8 as a result of any change in, or amendment to, the laws or regulations of Singapore or any political subdivision or, in each case, any authority thereof or therein having power to tax, or any change in the application or official interpretation of such laws or regulations, or the Notes do not qualify as “qualifying debt securities” for the purposes of the Income Tax Act, Chapter 134 of Singapore, which change or amendment becomes effective on or after the date on which agreement is reached to issue the first Tranche of the Notes, and (ii) such obligation cannot be avoided by the Issuer (or the Guarantor, as the case may be) taking reasonable measures available to it, provided that no such notice of redemption shall be given earlier than 90 days prior to the earliest date on which the Issuer (or the Guarantor, as the case may be) would be obliged to pay such additional amounts were a payment in respect of the Notes (or Guarantee, as the case may be) then due. Prior to the publication of any notice of redemption pursuant to this Condition 6(c), the Issuer shall deliver to the Trustee a certificate signed by two Directors of the Issuer stating that the Issuer is entitled to effect such redemption and setting forth a statement of facts showing that the conditions precedent to the right of the Issuer so to redeem have occurred, and an opinion of independent legal advisers of recognised standing to the effect that the Issuer (or the Guarantor, as the case may be) has or will become obliged to pay such additional amounts as a result of such change or amendment.
(d) Redemption at the Option of the Issuer: If Call Option is specified hereon, the Issuer may, on giving not less than 15 nor more than 30 days’ irrevocable notice to the Noteholders (or such other notice period as may be specified hereon) redeem all or, if so provided, some of the Notes on any Optional Redemption Date. Any such redemption of Notes shall be at their Optional Redemption Amount together with interest accrued to the date fixed for redemption. Any such redemption or exercise must relate to Notes of a nominal amount at least equal to the Minimum Redemption Amount to be redeemed specified hereon and no greater than the Maximum Redemption Amount to be redeemed specified hereon.
All Notes in respect of which any such notice is given shall be redeemed on the date specified in such notice in accordance with this Condition.
In the case of a partial redemption the notice to Noteholders shall also contain the certificate numbers of the Bearer Notes, or in the case of Registered Notes shall specify the nominal amount of Registered Notes drawn and the holder(s) of such Registered Notes, to be redeemed, which shall have been drawn in such place as the Trustee may approve and in such manner as it deems appropriate, subject to compliance with any applicable laws and stock exchange or other relevant authority requirements.
53 (e) Redemption at the Option of Noteholders: If Put Option is specified hereon, the Issuer shall, at the option of the holder of any such Note, upon the holder of such Note giving not less than 15 nor more than 30 days’ notice to the Issuer (or such other notice period as may be specified hereon) redeem such Note on the Optional Redemption Date(s) at its Optional Redemption Amount together with interest accrued to the date fixed for redemption.
To exercise such option the holder must deposit (in the case of Bearer Notes) such Note (together with all unmatured Receipts and Coupons and unexchanged Talons) with any Paying Agent or (in the case of Registered Notes) the Certificate representing such Note(s) with the Registrar or any TransferAgent at its specified office, together with a duly completed option exercise notice (“Exercise Notice”) in the form obtainable from any PayingAgent, the Registrar or any Transfer Agent (as applicable) within the notice period. No Note or Certificate so deposited and option exercised may be withdrawn (except as provided in the Agency Agreement) without the prior consent of the Issuer.
(f) Partly Paid Notes: Partly Paid Notes will be redeemed, whether at maturity, early redemption or otherwise, in accordance with the provisions of this Condition and the provisions specified hereon.
(g) Purchases: The Issuer, the Guarantor and any of their respective Subsidiaries as defined in the Trust Deed may at any time purchase Notes (provided that all unmatured Receipts and Coupons and unexchanged Talons relating thereto are attached thereto or surrendered therewith) in the open market or otherwise at any price.
(h) Cancellation: All Notes purchased by or on behalf of the Issuer, the Guarantor or any of their respective Subsidiaries may be surrendered for cancellation, in the case of Bearer Notes, by surrendering each such Note together with all unmatured Receipts and Coupons and all unexchanged Talons to the Issuing and Paying Agent and, in the case of Registered Notes, by surrendering the Certificate representing such Notes to the Registrar and, in each case, if so surrendered, shall, together with all Notes redeemed by the Issuer, be cancelled forthwith (together with all unmatured Receipts and Coupons and unexchanged Talons attached thereto or surrendered therewith). Any Notes so surrendered for cancellation may not be reissued or resold and the obligations of the Issuer and the Guarantor in respect of any such Notes shall be discharged.
7 Payments and Talons
(a) Bearer Notes: Payments of principal and interest in respect of Bearer Notes shall, subject as mentioned below, be made against presentation and surrender of the relevant Receipts (in the case of payments of Instalment Amounts other than on the due date for redemption and provided that the Receipt is presented for payment together with its relative Note), Notes (in the case of all other payments of principal and, in the case of interest, as specified in Condition 7(f)(vi)) or Coupons (in the case of interest, save as specified in Condition 7(f)(ii)), as the case may be, at the specified office of any Paying Agent outside the United States by a cheque payable in the relevant currency drawn on, or, at the option of the holder, by transfer to an account denominated in such currency with, a Bank. “Bank” means a bank in the principal financial centre for such currency or, in the case of euro, in a city in which banks have access to the TARGET System.
(b) Registered Notes:
(i) Payments of principal (which for the purposes of this Condition 7(b) shall include final Instalment Amounts but not other Instalment Amounts) in respect of Registered Notes shall be made against presentation and surrender of the relevant Certificates at the
54 specified office of any of the Transfer Agents or of the Registrar and in the manner provided in paragraph (ii) below.
(ii) Interest (which for the purpose of this Condition 7(b) shall include all Instalment Amounts other than final Instalment Amounts) on Registered Notes shall be paid to the person shown on the Register at the close of business on the fifteenth day before the due date for payment thereof (the “Record Date”). Payments of interest on each Registered Note shall be made in the relevant currency by cheque drawn on a Bank and mailed to the holder (or to the first named of joint holders) of such Note at its address appearing in the Register. Upon application by the holder to the specified office of the Registrar or any Transfer Agent before the Record Date, such payment of interest may be made by transfer to an account in the relevant currency maintained by the payee with a Bank.
(c) Payments in the United States: Notwithstanding the foregoing, if any Bearer Notes are denominated in U.S. dollars, payments in respect thereof may be made at the specified office of any Paying Agent in New York City in the same manner as aforesaid if (i) the Issuer and the Guarantor shall have appointed Paying Agents with specified offices outside the United States with the reasonable expectation that such Paying Agents would be able to make payment of the amounts on the Notes in the manner provided above when due, (ii) payment in full of such amounts at all such offices is illegal or effectively precluded by exchange controls or other similar restrictions on payment or receipt of such amounts and (iii) such payment is then permitted by United States law, without involving, in the opinion of the Issuer, any adverse tax consequence to the Issuer.
(d) Payments subject to Fiscal Laws: All payments are subject in all cases to any applicable fiscal or other laws, regulations and directives in the place of payment, but without prejudice to the provisions of Condition 8. No commission or expenses shall be charged to the Noteholders or Couponholders in respect of such payments.
(e) Appointment of Agents: The Issuing and Paying Agent, the Paying Agents, the Registrar, the Transfer Agents and the Calculation Agent initially appointed by the Issuer and the Guarantor and their respective specified offices are listed below. The Issuing and Paying Agent, the Paying Agents, the Registrar, the Transfer Agents and the Calculation Agent(s) act solely as agents of the Issuer and the Guarantor and do not assume any obligation or relationship of agency or trust for or with any Noteholder or Couponholder. The Issuer and the Guarantor reserve the right at any time with the approval of the Trustee to vary or terminate the appointment of the Issuing and Paying Agent, any other Paying Agent, the Registrar, any Transfer Agent or the Calculation Agent(s) and to appoint additional or other Paying Agents or Transfer Agents, provided that the Issuer shall at all times maintain (i) an Issuing and Paying Agent, (ii) a Registrar in relation to Registered Notes, (iii) a Transfer Agent in relation to Registered Notes, (iv) one or more Calculation Agent(s) where the Conditions so require, (v) a Paying Agent in Singapore, where the Notes may be presented or surrendered for payment or redemption, in the event that the Global Notes are exchanged for Definitive Notes, for so long as the Notes are listed on the SGX-ST and the rules of the SGX-ST so require, (vi) such other agents as may be required by any other stock exchange on which the Notes may be listed in each case, as approved by the Trustee and (vii) a Paying Agent with a specified office in a European Union member state that will not be obliged to withhold or deduct tax pursuant to any law implementing European Council Directive 2003/48/EC or any other Directive implementing the conclusions of the ECOFIN Council meeting of 26 – 27 November 2000.
In addition, the Issuer and the Guarantor shall forthwith appoint a Paying Agent in New York City in respect of any Bearer Notes denominated in U.S. dollars in the circumstances described in paragraph (c) above.
55 Notice of any such change or any change of any specified office shall promptly be given to the Noteholders.
(f) Unmatured Coupons and Receipts and unexchanged Talons:
(i) Upon the due date for redemption of Bearer Notes which comprise Fixed Rate Notes (other than Dual Currency Notes or Index Linked Notes), such Notes should be surrendered for payment together with all unmatured Coupons (if any) relating thereto, failing which an amount equal to the face value of each missing unmatured Coupon (or, in the case of payment not being made in full, that proportion of the amount of such missing unmatured Coupon that the sum of principal so paid bears to the total principal due) shall be deducted from the Final Redemption Amount, Early Redemption Amount or Optional RedemptionAmount, as the case may be, due for payment. Any amount so deducted shall be paid in the manner mentioned above against surrender of such missing Coupon within a period of 3 years from the Relevant Date for the payment of such principal (whether or not such Coupon has become void pursuant to Condition 9).
(ii) Upon the due date for redemption of any Bearer Note comprising a Floating Rate Note, Dual Currency Note or Index Linked Note, unmatured Coupons relating to such Note (whether or not attached) shall become void and no payment shall be made in respect of them.
(iii) Upon the due date for redemption of any Bearer Note, any unexchanged Talon relating to such Note (whether or not attached) shall become void and no Coupon shall be delivered in respect of such Talon.
(iv) Upon the due date for redemption of any Bearer Note that is redeemable in instalments, all Receipts relating to such Note having an Instalment Date falling on or after such due date (whether or not attached) shall become void and no payment shall be made in respect of them.
(v) Where any Bearer Note that provides that the relative unmatured Coupons are to become void upon the due date for redemption of those Notes is presented for redemption without all unmatured Coupons, and where any Bearer Note is presented for redemption without any unexchanged Talon relating to it, redemption shall be made only against the provision of such indemnity as the Issuer may require.
(vi) If the due date for redemption of any Note is not a due date for payment of interest, interest accrued from the preceding due date for payment of interest or the Interest Commencement Date, as the case may be, shall only be payable against presentation (and surrender if appropriate) of the relevant Bearer Note or Certificate representing it, as the case may be. Interest accrued on a Note that only bears interest after its Maturity Date shall be payable on redemption of such Note against presentation of the relevant Note or Certificate representing it, as the case may be.
(g) Talons: On or after the Interest Payment Date for the final Coupon forming part of a Coupon sheet issued in respect of any Bearer Note, the Talon forming part of such Coupon sheet may be surrendered at the specified office of the Issuing and Paying Agent in exchange for a further Coupon sheet (and if necessary another Talon for a further Coupon sheet) (but excluding any Coupons that may have become void pursuant to Condition 9).
(h) Non-Business Days: If any date for payment in respect of any Note, Receipt or Coupon is not a Business Day, the holder shall not be entitled to payment until the next following Business Day nor to any interest or other sum in respect of such postponed payment.
56 8 Taxation
All payments of principal and interest by or on behalf of the Issuer or the Guarantor in respect of the Notes, the Receipts and the Coupons or under the Guarantee shall be made free and clear of, and without withholding or deduction for, any taxes, duties, assessments or governmental charges of whatever nature imposed, levied, collected, withheld or assessed by or within Singapore or any authority therein or thereof having power to tax, unless such withholding or deduction is required by law. In that event, in relation to Singapore Dollar Notes, the Issuer or, as the case may be, the Guarantor will not be obliged to pay any additional amounts in respect of any such withholding or deduction from payments in respect of such Singapore Dollar Notes for, or on account of, any such taxes or duties, and in relation to Non-Singapore Dollar Notes, the Issuer or, as the case may be, the Guarantor shall pay such additional amounts as shall result in receipt by the Noteholders, Receiptholders and Couponholders of such amounts as would have been received by them had no such withholding or deduction been required, except that no such additional amounts shall be payable with respect to any Note, Receipt or Coupon:
(a) Other connection: to, or to a third party on behalf of, a holder who is (i) treated as a resident of Singapore or as having a permanent establishment in Singapore for tax purposes or (ii) liable to such taxes, duties, assessments or governmental charges in respect of such Note, Receipt or Coupon by reason of his having some connection with Singapore other than the mere holding of the Note, Receipt or Coupon; or
(b) Presentation more than 30 days after the Relevant Date: presented (or in respect of which the Certificate representing it is presented) for payment more than 30 days after the Relevant Date except to the extent that the holder of it would have been entitled to such additional amounts on presenting it for payment on the thirtieth day; or
(c) Payment to individuals: where such withholding or deduction is imposed on a payment to an individual and is required to be made pursuant to any law implementing European Council Directive 2003/48/EC or any other Directive implementing the conclusions of the ECOFIN Council meeting of 26 – 27 November 2000; or
(d) Payment by another Paying Agent: (except in the case of Registered Notes) presented for payment by or on behalf of a holder who would have been able to avoid such withholding or deduction by presenting the relevant Note, Receipt or Coupon to another Paying Agent in a Member State of the European Union; or
(e) Failure to comply with requirements: which would not be payable or due but for the failure of the holder or beneficial owner of such Note, Receipt or Coupon to comply with any certification, identification or other reporting requirements of Singapore concerning the nationality, residence, identity or other attributes of such holder or beneficial owner required in connection with a claim, of eligibility for avoidance or reduction of withholding or deduction of tax under the laws of Singapore, if requested in writing addressed to such holder or beneficial owner by the Issuer to comply with such requirements.
9 Prescription
Claims against the Issuer and/or the Guarantor for payment in respect of the Notes, Receipts and Coupons (which, for this purpose, shall not include Talons) shall be prescribed and become void unless made within 3 years from the appropriate Relevant Date in respect of them, unless otherwise provided in the relevant Pricing Supplement.
57 10 Events of Default
If any of the following events (“Events of Default”) occurs and is continuing, the Trustee at its discretion may, and if so requested by holders of at least 25 per cent. in nominal amount of the Notes then outstanding or if so directed by an Extraordinary Resolution shall (subject in each case to being indemnified and/or secured to its satisfaction), give written notice to the Issuer that the Notes are, and they shall immediately become, due and payable at their Early Redemption Amount together (if applicable) with accrued interest:
(a) default is made (in the case of principal, for more than 7 days and in the case of interest, for more than 14 days) in the payment on the due date of interest or principal in respect of any of the Notes; or
(b) the Issuer or the Guarantor does not perform or comply with any one or more of its other obligations in the Notes or the Trust Deed which default is not remedied within 60 days after notice of such default shall have been given to the Issuer by the Trustee; or
(c) (A) any other indebtedness of the Issuer or the Guarantor in respect of borrowed money becomes due and payable prior to its stated maturity by reason of any default, event of default or any analogous event (however described), or (B) any such indebtedness of the Issuer or the Guarantor in respect of borrowed money is not paid when due or, as the case may be, within any applicable grace period, or (C) the Issuer or the Guarantor fails to pay when due or, as the case may be, within any applicable grace period, any amount payable by it under any guarantee for, or indemnity in respect of, any moneys borrowed or raised; provided that no Event of Default will occur under this Condition 10(c) unless and until the aggregate amount of the relevant indebtedness, guarantees and indemnities in respect of which one or more of the events mentioned above in this Condition 10(c) have occurred exceeds US$100,000,000 or its equivalent in other currencies; or
(d) an order is made or an effective resolution is passed for the winding-up or dissolution of the Issuer or the Guarantor; or
(e) the Issuer or the Guarantor shall apply or petition for a winding-up or judicial management order in respect of itself or through an official action or a resolution of its board of directors ceases or threatens to cease to carry on all or a material part of its business or operations (except for any cessation or proposed cessation pursuant to either (i) a reconstruction, amalgamation, reorganisation, merger or consolidation, in each case, not involving insolvency or (ii) a disposal which is neither likely to have a material adverse effect on the ability of the Issuer to perform or comply with its payment obligations under the Notes nor likely to have a material adverse effect on the ability of the Guarantor to perform or comply with its payment obligations under the Guarantee); or
(f) (i) proceedings are initiated against the Issuer or the Guarantor under any applicable liquidation, insolvency, composition or other similar laws, or an application is made (or documents filed with a court) for the appointment of a receiver, receiver and manager, judicial manager or other similar official, or a receiver, receiver and manager, judicial manager or other similar official is appointed, in relation to the Issuer or the Guarantor or, as the case may be, in relation to the whole or a substantial part of the assets of any of them, or an encumbrancer takes possession of the whole or a substantial part of the assets of any of them, or a distress, execution, attachment, sequestration or other process is levied, enforced upon, sued out or put in force against the whole or a substantial part of the assets of any of them, and (ii) in any case (other than the appointment of a judicial manager) is not discharged or stayed within 60 days; or
58 (g) the Issuer or the Guarantor initiates or consents to judicial proceedings relating to itself under any applicable liquidation, insolvency, composition or other similar laws (including the obtaining of a moratorium) in respect of or affecting all or a material part of the debts of the Issuer or the Guarantor or makes a conveyance or assignment for the benefit of, or enters into any composition or other arrangement with, its creditors generally (or any class of its creditors) in respect of or affecting all or a material part of the debts of the Issuer or the Guarantor; or
(h) any action, condition or thing (including the obtaining of any necessary consent) at any time required to be taken, fulfilled or done in order (i) to enable the Issuer and the Guarantor lawfully to enter into, exercise their respective rights and perform and comply with their respective obligations under the Notes and the Trust Deed, (ii) to ensure that those obligations are legally binding and enforceable and (iii) in the case of Notes governed under the laws of England, to make the Notes and the Trust Deed admissible in evidence in the courts of England or in the case of Notes governed under the laws of Singapore, to make such Notes admissible in the courts of Singapore, is not taken, fulfilled or done; or
(i) the Guarantee is not (or is claimed by the Guarantor not to be) in full force and effect; or
(j) it is or will become unlawful for the Issuer or the Guarantor to perform or comply with any one or more of its payment or other material obligations under any of the Notes or the Trust Deed; or
(k) any event occurs that under the laws of any relevant jurisdiction has an analogous or equivalent effect to any of the events referred to in paragraphs (d), (e), (f) or (g),
provided that in the case of paragraphs (b) and (c), the Trustee shall have certified that in its opinion such event is materially prejudicial to the interests of the Noteholders.
11 Meetings of Noteholders, Modification, Waiver and Substitution
(a) Meetings of Noteholders: The Trust Deed contains provisions for convening meetings of Noteholders to consider any matter affecting their interests, including the sanctioning by Extraordinary Resolution (as defined in the Trust Deed) of a modification of any of these Conditions or any provisions of the Trust Deed. Such a meeting may be convened by Noteholders holding not less than 10 per cent. in nominal amount of the Notes for the time being outstanding. The quorum for any meeting convened to consider an Extraordinary Resolution shall be two or more persons holding or representing a clear majority in nominal amount of the Notes for the time being outstanding, or at any adjourned meeting two or more persons being or representing Noteholders whatever the nominal amount of the Notes held or represented, unless the business of such meeting includes consideration of proposals, inter alia, (i) to amend the dates of maturity or redemption of the Notes, any Instalment Date or any date for payment of interest or Interest Amounts on the Notes, (ii) to reduce or cancel the nominal amount of, or any InstalmentAmount of, or any premium payable on redemption of, the Notes, (iii) to reduce the rate or rates of interest in respect of the Notes or to vary the method or basis of calculating the rate or rates or amount of interest or the basis for calculating any Interest Amount in respect of the Notes, (iv) if a Minimum and/or a Maximum Rate of Interest, Instalment Amount or Redemption Amount is shown hereon, to reduce any such Minimum and/or Maximum, (v) to vary any method of, or basis for, calculating the Final Redemption Amount, the Early Redemption Amount or the Optional Redemption Amount, including the method of calculating the Amortised Face Amount, (vi) to vary the currency or currencies of payment or denomination of the Notes, (vii) to modify the provisions concerning the quorum required at any meeting of Noteholders or the majority required to pass the Extraordinary Resolution, or (viii) to modify or cancel the Guarantee, in which case the necessary quorum shall be two or more persons holding or representing not less than
59 75 per cent., or at any adjourned meeting not less than 25 per cent., in nominal amount of the Notes for the time being outstanding. Any Extraordinary Resolution duly passed shall be binding on Noteholders (whether or not they were present at the meeting at which such resolution was passed) and on all Couponholders.
The Trust Deed provides that a resolution in writing signed by or on behalf of the holders of not less than 90 per cent. in nominal amount of the Notes outstanding shall for all purposes be as valid and effective as an Extraordinary Resolution passed at a meeting of Noteholders duly convened and held. Such a resolution in writing may be contained in one document or several documents in the same form, each signed by or on behalf of one or more Noteholders.
These Conditions may be amended, modified or varied in relation to any Series of Notes by the terms of the relevant Pricing Supplement in relation to such Series.
(b) Modification and Waiver of the Trust Deed: The Trustee may agree, without the consent of the Noteholders or Couponholders, to (i) any modification of any of the provisions of the Trust Deed that is of a formal, minor or technical nature or is made to correct a manifest error or to comply with mandatory provisions of applicable law or as required by Euroclear and/or Clearstream, Luxembourg and/or CDP, and (ii) any other modification (except as mentioned in the Trust Deed), and any waiver or authorisation of any breach or proposed breach, of any of the provisions of the Trust Deed that is in the opinion of the Trustee not materially prejudicial to the interests of the Noteholders. Any such modification, authorisation or waiver shall be binding on the Noteholders and the Couponholders and, if the Trustee so requires, such modification shall be notified to the Noteholders as soon as practicable.
(c) Substitution: The Trust Deed contains provisions permitting the Trustee to agree, subject to such amendment of the Trust Deed and such other conditions as the Trustee may require, but without the consent of the Noteholders or the Couponholders, to the substitution of the Issuer’s successor in business or any Subsidiary (as defined in the Trust Deed) of the Issuer or its successor in business or the substitution of the Guarantor’s successor in business or any Subsidiary of the Guarantor or its successor in business in place of the Issuer or the Guarantor, as the case may be, or of any previous substituted company, as principal debtor or guarantor under the Trust Deed and the Notes. In the case of such a substitution the Trustee may agree, without the consent of the Noteholders or the Couponholders, to a change of the law governing the Notes, the Receipts, the Coupons, the Talons and/or the Trust Deed provided that such change would not in the opinion of the Trustee be materially prejudicial to the interests of the Noteholders.
(d) Entitlement of the Trustee: In connection with the exercise of its functions (including but not limited to those referred to in this Condition) the Trustee shall have regard to the interests of the Noteholders as a class and shall not have regard to the consequences of such exercise for individual Noteholders or Couponholders and the Trustee shall not be entitled to require, nor shall any Noteholder or Couponholder be entitled to claim, from the Issuer or the Guarantor any indemnification or payment in respect of any tax consequence of any such exercise upon individual Noteholders or Couponholders.
12 Enforcement
At any time after the Notes become due and payable, the Trustee may, at its discretion and without further notice, institute such proceedings against the Issuer and/or the Guarantor as it may think fit to enforce the terms of the Trust Deed, the Notes, the Receipts and the Coupons, but it need not take any such proceedings unless (a) it shall have been so directed by an Extraordinary Resolution or so requested in writing by Noteholders holding at least 25 per cent. in nominal amount of the Notes outstanding, and (b) it shall have been indemnified and/or secured
60 to its satisfaction. No Noteholder, Receiptholder or Couponholder may proceed directly against the Issuer or the Guarantor unless the Trustee, having become bound so to proceed, fails to do so within a reasonable time and such failure is continuing.
13 Indemnification of the Trustee
The Trust Deed contains provisions for the indemnification of the Trustee and for its relief from responsibility. The Trustee is entitled to enter into business transactions with the Issuer, the Guarantor and any entity related to the Issuer or the Guarantor without accounting for any profit.
The Trustee may rely without liability to Noteholders or Couponholders on a report, confirmation or certificate or any advice of any accountants, financial advisers, financial institution or any other expert, whether or not addressed to it and whether their liability in relation thereto is limited (by its terms or by any engagement letter relating thereto entered into by the Trustee or in any other manner) by reference to a monetary cap, methodology or otherwise. The Trustee may accept and shall be entitled to rely on any such report, confirmation or certificate or advice and such report, confirmation or certificate or advice shall be binding on the Issuer, the Guarantor, the Trustee, the Noteholders and the Couponholders.
14 Replacement of Notes, Certificates, Receipts, Coupons and Talons
If a Note, Certificate, Receipt, Coupon or Talon is lost, stolen, mutilated, defaced or destroyed, it may be replaced, subject to applicable laws, regulations and stock exchange or other relevant authority regulations, at the specified office of the Issuing and PayingAgent (in the case of Bearer Notes, Receipts, Coupons or Talons) and of the Registrar (in the case of Certificates) or such other Paying Agent or Transfer Agent, as the case may be, as may from time to time be designated by the Issuer for the purpose and notice of whose designation is given to Noteholders, in each case on payment by the claimant of the fees and costs incurred in connection therewith and on such terms as to evidence, security and indemnity (which may provide, inter alia, that if the allegedly lost, stolen or destroyed Note, Certificate, Receipt, Coupon or Talon is subsequently presented for payment or, as the case may be, for exchange for further Coupons, there shall be paid to the Issuer on demand the amount payable by the Issuer in respect of such Notes, Certificates, Receipts, Coupons or further Coupons) and otherwise as the Issuer or the Guarantor may require. Mutilated or defaced Notes, Certificates, Receipts, Coupons or Talons must be surrendered before replacements will be issued.
15 Further Issues
The Issuer may from time to time without the consent of the Noteholders or Couponholders create and issue further notes either having the same terms and conditions as the Notes in all respects (or in all respects except for the first payment of interest on them) and so that such further issue shall be consolidated and form a single series with the outstanding securities of any series (including the Notes) or upon such terms as the Issuer may determine at the time of their issue. References in these Conditions to the Notes include (unless the context requires otherwise) any other securities issued pursuant to this Condition and forming a single series with the Notes. Any further securities forming a single series with the outstanding securities of any series (including the Notes) constituted by the Trust Deed or any deed supplemental to it shall, and any other securities may (with the consent of the Trustee), be constituted by the Trust Deed. The Trust Deed contains provisions for convening a single meeting of the Noteholders and the holders of securities of other series where the Trustee so decides.
61 16 Notices
Notices to the holders of Registered Notes shall be mailed to them at their respective addresses in the Register and deemed to have been given on the fourth weekday (being a day other than a Saturday or a Sunday) after the date of mailing. Notices to the holders of Bearer Notes shall be valid if published in a daily newspaper of general circulation in Singapore (which is expected to be The Business Times). If in the opinion of the Trustee any such publication is not practicable, notice shall be validly given if published in another leading daily English language newspaper with general circulation in Singapore. Any such notice shall be deemed to have been given on the date of such publication or, if published more than once or on different dates, on the first date on which publication is made, as provided above.
Couponholders shall be deemed for all purposes to have notice of the contents of any notice given to the holders of Bearer Notes in accordance with this Condition.
17 Currency Indemnity
Any amount received or recovered in a currency other than the currency in which payment under the relevant Note, Coupon or Receipt is due (whether as a result of, or of the enforcement of, a judgment or order of a court of any jurisdiction, in the insolvency, winding-up or dissolution of the Issuer or the Guarantor or otherwise) by any Noteholder or Couponholder in respect of any sum expressed to be due to it from the Issuer or the Guarantor shall only constitute a discharge to the Issuer or the Guarantor, as the case may be, to the extent of the amount in the currency of payment under the relevant Note, Coupon or Receipt that the recipient is able to purchase with the amount so received or recovered in that other currency on the date of that receipt or recovery (or, if it is not practicable to make that purchase on that date, on the first date on which it is practicable to do so). If the amount received or recovered is less than the amount expressed to be due to the recipient under any Note, Coupon or Receipt, the Issuer, failing whom the Guarantor, shall indemnify it against any loss sustained by it as a result. In any event, the Issuer, failing whom the Guarantor, shall indemnify the recipient against the cost of making any such purchase. For the purposes of this Condition, it shall be sufficient for the Noteholder or Couponholder, as the case may be, to demonstrate that it would have suffered a loss had an actual purchase been made. These indemnities constitute a separate and independent obligation from the Issuer’s and the Guarantor’s other obligations, shall give rise to a separate and independent cause of action, shall apply irrespective of any indulgence granted by any Noteholder or Couponholder and shall continue in full force and effect despite any other judgment, order, claim or proof for a liquidated amount in respect of any sum due under any Note, Coupon or Receipt or any other judgment or order.
18 Rights of Third Parties
No person shall have the right to enforce any term or condition of the Notes under the Contracts (Rights of Third Parties) Act, Chapter 53B of Singapore.
19 Governing Law and Jurisdiction
Governing Law: The Notes, the Receipts, the Coupons and the Talons are governed by, and shall be construed in accordance with, Singapore law.
Jurisdiction: The Courts of Singapore are to have exclusive jurisdiction to settle any disputes that may arise out of or in connection with any Notes, Receipts, Coupons or Talons or the Guarantee and accordingly any legal action or proceedings arising out of or in connection with any Notes, Receipts, Coupons, Talons or the Guarantee (“Proceedings”) may be brought in such courts. Each of the Issuer and the Guarantor has in the Trust Deed irrevocably submitted to the jurisdiction of the courts of Singapore and waives any objection to Proceedings in such courts on the ground of venue or on the ground that the Proceedings have been brought in an inconvenient forum.
62 TERMSANDCONDITIONSOFTHENOTESGOVERNEDBYENGLISHLAW
The following is the text of the terms and conditions that, subject to completion and amendment and as supplemented or varied in accordance with the provisions of the relevant Pricing Supplement, shall be applicable to the Notes in definitive form (if any) issued in exchange for the Global Note(s) representing each Series. Either (i) the full text of these terms and conditions together with the relevant provisions of the Pricing Supplement or (ii) these terms and conditions as so completed, amended, supplemented or varied (and subject to simplification by the deletion of non-applicable provisions), shall be endorsed on such Bearer Notes or on the Certificates relating to such Registered Notes. All capitalised terms that are not defined in these Conditions will have the meanings given to them in the relevant Pricing Supplement. Those definitions will be endorsed on the definitive Notes or Certificates, as the case may be. References in the Conditions to “Notes” are to the Notes of one Series only, not to all Notes that may be issued under the Programme.
The Notes are constituted by an English Law Trust Deed (as amended or supplemented as at the date of issue of the Notes (the “Issue Date”), the “Trust Deed”) dated 29 July 2010 between the Issuer, the Guarantor and The Bank of New York Mellon (the “Trustee”, which expression shall include all persons for the time being the trustee or trustees under the Trust Deed) as trustee for the Noteholders (as defined below). These terms and conditions (the “Conditions”) include summaries of, and are subject to, the detailed provisions of the Trust Deed, which includes the form of the Bearer Notes, Certificates, Receipts, Coupons and Talons referred to below. An Agency Agreement (as amended or supplemented as at the Issue Date, the “Agency Agreement”) dated 29 July 2010 has been entered into in relation to the Notes between the Issuer, the Guarantor, the Trustee, The Bank of New York Mellon as initial issuing and paying agent and the other agents named in it. The issuing and paying agent, the other paying agents, the registrar, the transfer agents and the calculation agent(s) for the time being (if any) are referred to below respectively as the “Issuing and Paying Agent”, the “Paying Agents” (which expression shall include the Issuing and Paying Agent), the “Registrar”, the “Transfer Agents” (which expression shall include the Registrar) and the “Calculation Agent(s)”. Copies of the Trust Deed and the Agency Agreement are available for inspection during usual business hours at the principal office of the Trustee (presently at One Canada Square, 40th Floor, London E14 5AL, United Kingdom) and at the specified offices of the Paying Agents and the Transfer Agents.
Notes may be denominated in Singapore dollars (“Singapore Dollar Notes”) or in other currencies (“Non-Singapore Dollar Notes”). The Noteholders, the holders of the interest coupons (the “Coupons”) relating to interest bearing Notes in bearer form and, where applicable in the case of such Notes, talons for further Coupons (the “Talons”) (the “Couponholders”) and the holders of the receipts for the payment of instalments of principal (the “Receipts”) relating to Notes in bearer form of which the principal is payable in instalments are entitled to the benefit of, are bound by, and are deemed to have notice of all the provisions of the Trust Deed and are deemed to have notice of those provisions applicable to them of the Agency Agreement.
As used in these Conditions, “Relevant Date” in respect of any Note, Receipt or Coupon means the date on which payment in respect of it first becomes due or (if any amount of the money payable is improperly withheld or refused) the date on which payment in full of the amount outstanding is made or (if earlier) the date seven days after that on which notice is duly given to the Noteholders that, upon further presentation of the Note (or relative Certificate), Receipt or Coupon being made in accordance with the Conditions, such payment will be made, provided that payment is in fact made upon such presentation. References in these Conditions to (i) “principal” shall be deemed to include any premium payable in respect of the Notes, all Instalment Amounts, Final Redemption Amounts, Early Redemption Amounts, Optional Redemption Amounts, Amortised Face Amounts and all other amounts in the nature of principal payable pursuant to Condition 6 or any amendment or supplement to it, (ii) “interest” shall be deemed to include all InterestAmounts and all other amounts payable pursuant to Condition 5 or any amendment or supplement to it and (iii) “principal” and/or “interest” shall be deemed to include any additional amounts that may be payable under this Condition or any undertaking given in addition to or in substitution for it under the Trust Deed.
63 As used in these Conditions, “Tranche” means Notes which are identical in all respects.
1 Form, Denomination and Title
The Notes are issued in bearer form (“Bearer Notes”) or in registered form (“Registered Notes”) in each case in the Specified Denomination(s) shown hereon provided that in the case of any Notes which are to be admitted to trading on a regulated market within the European Economic Area or offered to the public in a Member State of the European Economic Area in circumstances which require the publication of a Prospectus under the Prospectus Directive, the minimum Specified Denomination shall be C50,000 (or its equivalent in any other currency as at the date of issue of the relevant Notes).
All Registered Notes shall have the same Specified Denomination. Unless otherwise permitted by the then current laws and regulations, Notes which have a maturity of less than one year and in respect of which the issue proceeds are to be accepted by the Issuer in the United Kingdom or whose issue otherwise constitutes a contravention of section 19 of the Financial Services and Markets Act 2000 (“FSMA”) will have a minimum denomination of £100,000 (or its equivalent in other currencies). Notes sold in reliance on Rule 144A will be in minimum denominations of US$100,000 (or its equivalent in another currency) and higher integral multiples of US$1,000 (or its equivalent in another currency) in excess thereof, subject to compliance with all legal and/or regulatory requirements applicable to the relevant currency. Notes which are listed on SGX-ST will be traded on the SGX-ST in a minimum board lot size of S$200,000 (or its equivalent in other currencies) or such other amount as may be allowed or required from time to time.
This Note is a Fixed Rate Note, a Floating Rate Note, a Zero Coupon Note, an Index Linked Interest Note, an Index Linked Redemption Note, an Instalment Note, a Dual Currency Note or a Partly Paid Note, a combination of any of the foregoing or any other kind of Note, depending upon the Interest and Redemption/Payment Basis shown hereon.
Bearer Notes are serially numbered and are issued with Coupons (and, where appropriate, a Talon) attached, save in the case of Zero Coupon Notes in which case references to interest (other than in relation to interest due after the Maturity Date), Coupons and Talons in these Conditions are not applicable. Instalment Notes are issued with one or more Receipts attached.
Registered Notes are represented by registered certificates (“Certificates”) and, save as provided in Condition 2(c), each Certificate shall represent the entire holding of Registered Notes by the same holder.
Title to the Bearer Notes and the Receipts, Coupons and Talons shall pass by delivery. Title to the Registered Notes shall pass by registration in the register that the Issuer shall procure to be kept by the Registrar in accordance with the provisions of the Agency Agreement (the “Register”). Except as ordered by a court of competent jurisdiction or as required by law, the holder (as defined below) of any Note, Receipt, Coupon or Talon shall be deemed to be and may be treated as its absolute owner for all purposes whether or not it is overdue and regardless of any notice of ownership, trust or an interest in it, any writing on it (or on the Certificate representing it) or its theft or loss (or that of the related Certificate) and no person shall be liable for so treating the holder.
In these Conditions, “Noteholder” means the bearer of any Bearer Note and the Receipts relating to it or the person in whose name a Registered Note is registered (as the case may be), “holder” (in relation to a Note, Receipt, Coupon or Talon) means the bearer of any Bearer Note, Receipt, Coupon or Talon or the person in whose name a Registered Note is registered (as the case may be) and capitalised terms have the meanings given to them hereon, the absence of any such meaning indicating that such term is not applicable to the Notes.
64 2 No Exchange of Notes and Transfers of Registered Notes
(a) No Exchange of Notes: Registered Notes may not be exchanged for Bearer Notes. Bearer Notes of one Specified Denomination may not be exchanged for Bearer Notes of another Specified Denomination. Bearer Notes may not be exchanged for Registered Notes.
(b) Transfer of Registered Notes: Subject to paragraph (f) (Closed Periods), one or more Registered Notes may be transferred upon the surrender (at the specified office of the Registrar or any Transfer Agent) of the Certificate representing such Registered Notes to be transferred, together with the form of transfer endorsed on such Certificate, (or another form of transfer substantially in the same form and containing the same representations and certifications (if any), unless otherwise agreed by the Issuer), duly completed and executed and any other evidence as the Registrar or Transfer Agent may require. In the case of a transfer of part only of a holding of Registered Notes represented by one Certificate, a new Certificate shall be issued to the transferee in respect of the part transferred and a further new Certificate in respect of the balance of the holding not transferred shall be issued to the transferor. All transfers of Notes and entries on the Register will be made subject to the detailed regulations concerning transfers of Notes scheduled to the Agency Agreement. The regulations may be changed by the Issuer, with the prior written approval of the Registrar and the Trustee. A copy of the current regulations will be made available by the Registrar to any Noteholder upon request.
(c) Exercise of Options or Partial Redemption in Respect of Registered Notes: In the case of an exercise of an Issuer’s or Noteholders’ option in respect of, or a partial redemption of, a holding of Registered Notes represented by a single Certificate, a new Certificate shall be issued to the holder to reflect the exercise of such option or in respect of the balance of the holding not redeemed. In the case of a partial exercise of an option resulting in Registered Notes of the same holding having different terms, separate Certificates shall be issued in respect of those Notes of that holding that have the same terms. New Certificates shall only be issued against surrender of the existing Certificates to the Registrar or any Transfer Agent. In the case of a transfer of Registered Notes to a person who is already a holder of Registered Notes, a new Certificate representing the enlarged holding shall only be issued against surrender of the Certificate representing the existing holding.
(d) Delivery of New Certificates: Each new Certificate to be issued pursuant to Conditions 2(b) or (c) shall be available for delivery within five business days of receipt of the form of transfer or Exercise Notice (as defined in Condition 6(e)) and surrender of the Certificate for transfer, exercise or redemption. Delivery of the new Certificate(s) shall be made at the specified office of the Transfer Agent or of the Registrar (as the case may be) to whom delivery or surrender of such form of transfer, Exercise Notice or Certificate shall have been made or, at the option of the holder making such delivery or surrender as aforesaid and as specified in the relevant form of transfer, Exercise Notice or otherwise in writing, be mailed by uninsured post at the risk of the holder entitled to the new Certificate to such address as may be so specified, unless such holder requests otherwise and pays in advance to the relevant Transfer Agent the costs of such other method of delivery and/or such insurance as it may specify. In this Condition 2(d), “business day” means a day, other than a Saturday or Sunday, on which banks are open for business in the place of the specified office of the relevant Transfer Agent or the Registrar (as the case may be).
(e) Transfers Free of Charge: Transfers of Notes and Certificates on registration, transfer, exercise of an option or partial redemption shall be effected without charge by or on behalf of the Issuer, the Registrar or the Transfer Agents, but upon payment of any tax or other governmental charges that may be imposed in relation to it (or the giving of such indemnity as the Registrar or the relevant Transfer Agent may require).
65 (f) Closed Periods: No Noteholder may require the transfer of a Registered Note to be registered (i) during the period of 15 days ending on the due date for redemption of, or payment of any Instalment Amount in respect of, that Note, (ii) during the period of 15 days prior to any date on which Notes may be called for redemption by the Issuer at its option pursuant to Condition 6(d), (iii) after any such Note has been called for redemption or (iv) during the period of seven days ending on (and including) any due date for the payment of interest.
3 Guarantee and Status
(a) Guarantee: The Guarantor has unconditionally and irrevocably guaranteed the due payment of all sums expressed to be payable by the Issuer under the Trust Deed, the Notes, the Receipts and the Coupons. Its obligations in that respect (the “Guarantee”) are contained in the Trust Deed.
(b) Status of Notes and Guarantee: The Notes and the Receipts and Coupons relating to them constitute (subject to Condition 4) unsecured obligations of the Issuer and shall at all times rank pari passu and without any preference among themselves. The payment obligations of the Issuer under the Notes and the Receipts and Coupons relating to them and of the Guarantor under the Guarantee shall, save for such exceptions as may be provided by applicable law and subject to Condition 4, at all times rank at least equally with all other unsecured and unsubordinated indebtedness and monetary obligations of the Issuer and the Guarantor respectively, present and future.
4 Negative Pledge
So long as any Note or Coupon remains outstanding (as defined in the Trust Deed), neither the Issuer nor the Guarantor will create, or permit to subsist, any mortgage, charge, lien, pledge or other security interest, upon the whole or any part of its present or future undertaking, assets or revenues to secure any Relevant Indebtedness of the Issuer or the Guarantor, or any guarantee or indemnity by the Issuer or the Guarantor in respect of any Relevant Indebtedness of the Issuer or the Guarantor or any of the Subsidiaries (as defined in the Trust Deed) of the Guarantor, without at the same time or prior thereto according to the Notes and the Coupons the same security as is created or subsisting to secure any such Relevant Indebtedness, guarantee or indemnity, or such other security as either (i) the Trustee shall in its absolute discretion deem not materially less beneficial to the interest of the Noteholders or (ii) shall be approved by an Extraordinary Resolution (as defined in the Trust Deed) of the Noteholders.
In this Condition, “Relevant Indebtedness” means any indebtedness which is in the form of, or represented by, bonds, notes, debentures, loan stock or other securities which for the time being are, or are capable of being, quoted, listed or ordinarily dealt in on any stock exchange or over-the-counter or other securities market having an original maturity of more than 365 days from their date of issue.
5 Interest and other Calculations
(a) Interest on Fixed Rate Notes: Each Fixed Rate Note bears interest on its outstanding nominal amount from the Interest Commencement Date at the rate per annum (expressed as a percentage) equal to the Rate of Interest, such interest being payable in arrear on each Interest Payment Date. The amount of interest payable shall be determined in accordance with Condition 5(i).
66 (b) Interest on Floating Rate Notes and Index Linked Interest Notes (for Non-Singapore Dollar Notes only):
(i) Interest Payment Dates: Each Floating Rate Note and Index Linked Interest Note bears interest on its outstanding nominal amount from the Interest Commencement Date at the rate per annum (expressed as a percentage) equal to the Rate of Interest, such interest being payable in arrear on each Interest Payment Date. The amount of interest payable shall be determined in accordance with Condition 5(i). Such Interest Payment Date(s) is/are either shown hereon as Specified Interest Payment Dates or, if no Specified Interest Payment Date(s) is/are shown hereon, Interest Payment Date shall mean each date which falls the number of months or other period shown hereon as the Interest Period after the preceding Interest Payment Date or, in the case of the first Interest Payment Date, after the Interest Commencement Date.
(ii) Business Day Convention: If any date referred to in these Conditions that is specified to be subject to adjustment in accordance with a Business Day Convention would otherwise fall on a day that is not a Business Day, then, if the Business Day Convention specified is (A) the Floating Rate Business Day Convention, such date shall be postponed to the next day that is a Business Day unless it would thereby fall into the next calendar month, in which event (x) such date shall be brought forward to the immediately preceding Business Day and (y) each subsequent such date shall be the last Business Day of the month in which such date would have fallen had it not been subject to adjustment, (B) the Following Business Day Convention, such date shall be postponed to the next day that is a Business Day, (C) the Modified Following Business Day Convention, such date shall be postponed to the next day that is a Business Day unless it would thereby fall into the next calendar month, in which event such date shall be brought forward to the immediately preceding Business Day or (D) the Preceding Business Day Convention, such date shall be brought forward to the immediately preceding Business Day.
(iii) Rate of Interest for Floating Rate Notes: The Rate of Interest in respect of Floating Rate Notes for each Interest Accrual Period shall be determined in the manner specified hereon and the provisions below relating to either ISDA Determination or Screen Rate Determination shall apply, depending upon which is specified hereon.
(A) ISDA Determination for Floating Rate Notes
Where ISDA Determination is specified hereon as the manner in which the Rate of Interest is to be determined, the Rate of Interest for each Interest Accrual Period shall be determined by the Calculation Agent as a rate equal to the relevant ISDA Rate. For the purposes of this sub-paragraph (A), “ISDA Rate” for an Interest Accrual Period means a rate equal to the Floating Rate that would be determined by the Calculation Agent under a Swap Transaction under the terms of an agreement incorporating the ISDA Definitions and under which:
(x) the Floating Rate Option is as specified hereon
(y) the Designated Maturity is a period specified hereon and
(z) the relevant Reset Date is the first day of that Interest Accrual Period unless otherwise specified hereon.
For the purposes of this sub-paragraph (A), “Floating Rate”,“Calculation Agent”, “Floating Rate Option”,“Designated Maturity”,“Reset Date” and “Swap Transaction” have the meanings given to those terms in the ISDA Definitions.
67 (B) Screen Rate Determination for Floating Rate Notes
(x) Where Screen Rate Determination is specified hereon as the manner in which the Rate of Interest is to be determined, the Rate of Interest for each Interest Accrual Period will, subject as provided below, be either:
(1) the offered quotation; or
(2) the arithmetic mean (rounded up, if necessary, to the nearest 5 decimal places) of the offered quotations,
(expressed as a percentage rate per annum) for the Reference Rate which appears or appear, as the case may be, on the Relevant Screen Page as at either 11.00 a.m. (London time in the case of LIBOR or Brussels time in the case of EURIBOR) on the Interest Determination Date in question as determined by the Calculation Agent. If five or more of such offered quotations are available on the Relevant Screen Page, the highest (or, if there is more than one such highest quotation, one only of such quotations) and the lowest (or, if there is more than one such lowest quotation, one only of such quotations) shall be disregarded by the Calculation Agent for the purpose of determining the arithmetic mean of such offered quotations.
If the Reference Rate from time to time in respect of Floating Rate Notes is specified hereon as being other than LIBOR or EURIBOR, the Rate of Interest in respect of such Notes will be determined as provided hereon.
(y) if the Relevant Screen Page is not available or if, sub-paragraph (x)(1) applies and no such offered quotation appears on the Relevant Screen Page or if sub-paragraph (x)(2) above applies and fewer than three such offered quotations appear on the Relevant Screen Page in each case as at the time specified above, subject as provided below, the Calculation Agent shall request, if the Reference Rate is LIBOR, the principal London office of each of the Reference Banks or, if the Reference Rate is EURIBOR, the principal Euro-zone office of each of the Reference Banks, to provide the Calculation Agent with its offered quotation (expressed as a percentage rate per annum) for the Reference Rate if the Reference Rate is LIBOR, at approximately 11.00 a.m. (London time), or if the Reference Rate is EURIBOR, at approximately 11.00 a.m. (Brussels time) on the Interest Determination Date in question. If two or more of the Reference Banks provide the Calculation Agent with such offered quotations, the Rate of Interest for such Interest Accrual Period shall be the arithmetic mean of such offered quotations as determined by the Calculation Agent; and
(z) if paragraph (y) above applies and the Calculation Agent determines that fewer than two Reference Banks are providing offered quotations, subject as provided below, the Rate of Interest shall be the arithmetic mean of the rates per annum (expressed as a percentage) as communicated to (and at the request of) the Calculation Agent by the Reference Banks or any two or more of them, at which such banks were offered, if the Reference Rate is LIBOR, at approximately 11.00 a.m. (London time) or, if the Reference Rate is EURIBOR, at approximately 11.00 a.m. (Brussels time) on the relevant Interest Determination Date, deposits in the Specified Currency for a period equal to that which would have been used for the Reference Rate by leading banks in, if the Reference Rate is LIBOR, the London inter-bank market or, if the Reference Rate is EURIBOR, the Euro-zone inter- bank market, as the case may be, or, if fewer than two of the Reference Banks provide the CalculationAgent with such offered rates, the offered rate for deposits
68 in the Specified Currency for a period equal to that which would have been used for the Reference Rate, or the arithmetic mean of the offered rates for deposits in the Specified Currency for a period equal to that which would have been used for the Reference Rate, at which, if the Reference Rate is LIBOR, at approximately 11.00 a.m. (London time) or, if the Reference Rate is EURIBOR, at approximately 11.00 a.m. (Brussels time), on the relevant Interest Determination Date, any one or more banks (which bank or banks is or are in the opinion of the Trustee and the Issuer suitable for such purpose) informs the Calculation Agent it is quoting to leading banks in, if the Reference Rate is LIBOR, the London inter-bank market or, if the Reference Rate is EURIBOR, the Euro-zone inter-bank market, as the case may be, provided that, if the Rate of Interest cannot be determined in accordance with the foregoing provisions of this paragraph, the Rate of Interest shall be determined as at the last preceding Interest Determination Date (though substituting, where a different Margin or Maximum or Minimum Rate of Interest is to be applied to the relevant Interest Accrual Period from that which applied to the last preceding Interest Accrual Period, the Margin or Maximum or Minimum Rate of Interest relating to the relevant Interest Accrual Period, in place of the Margin or Maximum or Minimum Rate of Interest relating to that last preceding Interest Accrual Period).
(iv) Rate of Interest for Index Linked Interest Notes: The Rate of Interest in respect of Index Linked Interest Notes for each Interest Accrual Period shall be determined in the manner specified hereon and interest will accrue by reference to an Index or Formula as specified hereon.
(c) Interest on Floating Rate Notes and Index Linked Interest Notes (for Singapore Dollar Notes only):
(i) Interest Payment Dates: Each Floating Rate Note or Index Linked Interest Note bears interest on its outstanding nominal amount from the Interest Commencement Date at the rate per annum (expressed as a percentage) equal to the Rate of Interest, such interest being payable in arrear on each Interest Payment Date. Such Interest Payment Date(s) is/are either shown hereon as Specified Interest Payment Dates or, if no Specified Interest Payment Date(s) is/are shown hereon, Interest Payment Date shall mean each date which falls the number of months or other period specified hereon as the Interest Period after the preceding Interest Payment Date or, in the case of the first Interest Payment Date, after the Interest Commencement Date.
(ii) Business Day Convention: If any date referred to in these Conditions that is specified to be subject to adjustment in accordance with a Business Day Convention would otherwise fall on a day that is not a Business Day, then if the Business Day Convention specified is (A) the Floating Rate Business Day Convention, such date shall be postponed to the next day which is a Business Day unless it would thereby fall into the next calendar month, in which event (x) such date shall be brought forward to the immediately preceding Business Day and (y) each subsequent such date shall be the last Business Day of the month in which such date would have fallen had it not been subject to adjustment, (B) the Following Business Day Convention, such date shall be postponed to the next day that is a Business Day, (C) the Modified Following Business Day Convention, such date shall be postponed to the next day that is a Business Day unless it would thereby fall into the next calendar month, in which event such date shall be brought forward to the immediately preceding Business Day or (D) the Preceding Business Day Convention, such date shall be brought forward to the immediately preceding Business Day.
69 (iii) Rate of Interest for Floating Rate Notes: Each Floating Rate Note bears interest at a floating rate determined by reference to the Reference Rate as stated hereon, including (in the case of Singapore Dollar Notes) Swap Rate (in which case such Note will be a Swap Rate Note). A “Swap Rate Note” means a Note which bears interest calculated in the manner set out in paragraph (B) below.
(iv) Determination of Rate of Interest: The Rate of Interest payable from time to time in respect of each Floating Rate Note will be determined by the Calculation Agent on the basis of the following provisions:
(A) In the case of Floating Rate Notes which are not Swap Rate Notes, the Calculation Agent will determine the Rate of Interest in respect of any Interest Accrual Period at or about the Relevant Time on the Interest Determination Date in respect of such Interest Accrual Period as follows:
(1) Where Screen Rate Determination is specified hereon as the manner in which the Rate of Interest is to be determined, the Rate of Interest in respect of each Interest Accrual Period will, subject as provided below, be:
(aa) the Reference Rate (where such Reference Rate on the Relevant Screen Page is a composite quotation or is customarily supplied by one entity); or
(bb) the arithmetic mean (rounded up, if necessary, to the nearest 5 decimal places) of the Reference Rates of the persons whose Reference Rates appear on the Relevant Screen Page, in each case appearing on the Relevant Screen Page at the Relevant Time on the Interest Determination Date;
(2) if the Relevant Screen Page is not available or if paragraph (A)(1)(aa) above applies and no Reference Rate appears on the Relevant Screen Page at the Relevant Time on the Interest Determination Date or if paragraph (A)(1)(bb) above applies and fewer than two Reference Rates appear on the Relevant Screen Page at the Relevant Time on the Interest Determination Date, subject as provided below, the Rate of Interest shall be the rate per annum which the Calculation Agent determines to be the arithmetic mean (rounded up, if necessary, to the nearest 5 decimal places) of the Reference Rates that each of the Reference Banks is quoting to leading banks in Singapore at the Relevant Time on the Interest Determination Date; and
(3) if paragraph (A)(2) above applies and the CalculationAgent determines that fewer than two Reference Banks are so quoting Relevant Rates, the Rate of Interest shall be the Rate of Interest determined on the previous Interest Determination Date.
(B) In the case of Floating Rate Notes which are Swap Rate Notes:
(1) the Calculation Agent will, at or about the Relevant Time on the relevant Interest Determination Date in respect of each Interest Accrual Period, determine the Rate of Interest for such Interest Accrual Period which shall be the rate which appears on the Reuters Screen ABSIRFIX01 Page under the caption “ASSOCIATION OF BANKS IN SINGAPORE — SIBOR AND SWAP OFFER RATES — RATES AT 11:00 A.M. SINGAPORE TIME” under the column headed “SGD SWAP OFFER” (or such replacement page thereof for the purpose of displaying the swap rates of leading reference
70 banks) at or about the Relevant Time on such Interest Determination Date and for a period equal to the duration of such Interest Accrual Period;
(2) if on any Interest Determination Date, no such rate is quoted on the Reuters ScreenABSIRFIX01 Page (or such other replacement page as aforesaid) or the Reuters Screen ABSIRFIX01 Page (or such other replacement page as aforesaid) is unavailable for any reason, the Calculation Agent will determine the Rate of Interest (which shall be rounded up, if necessary, to the nearest 5 decimal places) for such InterestAccrual Period in accordance with the following formula:
In the case of Premium: 365 (Premium × 36500) Rate of Interest = × SIBOR + 360 (T × Spot Rate)
(SIBOR × Premium) 365 + × (Spot Rate) 360 In the case of Discount: 365 (Discount × 36500) Rate of Interest = × SIBOR − 360 (T × Spot Rate)
(SIBOR × Discount) 365 − × (Spot Rate) 360 where: SIBOR = the rate which appears under the caption “SINGAPORE INTERBANK OFFER RATES (DOLLAR DEPOSITS) AT 11:00 A.M.” and the row headed “SIBOR USD” on the Reuters Screen SIBO Page of the Reuters Monitor Money Rates Service (or such other page as may replace the Reuters Screen SIBO Page for the purpose of displaying Singapore inter-bank US Dollar offered rates of leading reference banks) at or about the Relevant Time on the relevant Interest Determination Date for a period equal to the duration of the Interest Accrual Period concerned; Spot Rate = the rate (determined by the CalculationAgent) to be the arithmetic mean (rounded up, if necessary, to the nearest 5 decimal places) of the rates quoted by the Reference Banks and which appear on the Reuters Screen ABSIRFIX06 Page under the caption “ASSOCIATIONOFBANKSINSINGAPORE—SGD SPOT AND SWAP OFFER RATES AT 11:00 A.M. SINGAPORE” and the column headed “SPOT” (or such other replacement page thereof for the purpose of displaying the spot rates and swap points of leading reference banks) at or about the Relevant Time on the relevant Interest Determination Date for a period equal to the duration of the Interest Accrual Period concerned; Premium or = the rate (determined by the Calculation Agent) to be the Discount arithmetic mean (rounded up, if necessary, to the nearest 5 decimal places) of the rates quoted by the Reference Banks for a period equal to the duration of the Interest Accrual Period concerned which appear on the
71 Reuters Screen ABSIRFIX06 Page under the caption “ASSOCIATIONOFBANKSINSINGAPORE—SGD SPOT AND SWAP OFFER RATES AT 11:00 A.M. SINGAPORE” (or such other replacement page thereof for the purpose of displaying the spot rates and swap points of leading reference banks) at or about the Relevant Time on the relevant Interest Determination Date for a period equal to the duration of the Interest Accrual Period concerned; and T = the number of days in the Interest Accrual Period concerned.
(3) if on any Interest Determination Date any one of the components for the purposes of calculating the Rate of Interest under (B) above is not quoted on the relevant Reuters Screen Page (or such other replacement page as aforesaid) or the relevant Reuters Screen Page (or such other replacement page as aforesaid) is unavailable for any reason, the Calculation Agent will request the principal Singapore offices of the Reference Banks to provide the Calculation Agent with quotations of their Swap Rates for the Interest Accrual Period concerned at or about the Relevant Time on that Interest Determination Date and the Rate of Interest for such Interest Accrual Period shall be the rate per annum equal to the arithmetic mean (rounded up, if necessary, to the nearest 5 decimal places) of the Swap Rates quoted by the Reference Banks to the Calculation Agent. The “Swap Rate” of a Reference Bank means the rate at which that Reference Bank can generate Singapore Dollars for the Interest Accrual Period concerned in the Singapore inter-bank market at or about the Relevant Time on the relevant Interest Determination Date and shall be determined as follows:
In the case of Premium: 365 (Premium × 36500) Swap Rate = × SIBOR + 360 (T × Spot Rate)
(SIBOR × Premium) 365 + × (Spot Rate) 360 In the case of Discount: 365 (Discount × 36500) Swap Rate = × SIBOR − 360 (T × Spot Rate)
(SIBOR × Discount) 365 − × (Spot Rate) 360 where: SIBOR = the rate per annum at which US Dollar deposits for a period equal to the duration of the InterestAccrual Period concerned are being offered by that Reference Bank to prime banks in the Singapore inter-bank market at or about the Relevant Time on the relevant Interest Determination Date; Spot Rate = the rate at which that Reference Bank sells US Dollars spot in exchange for Singapore Dollars in the Singapore inter-bank market at or about the Relevant Time on the relevant Interest Determination Date;
72 Premium or = the rate (determined by the Calculation Agent) to be the Discount arithmetic mean (rounded up, if necessary, to the nearest 5 decimal places) of the rates quoted by the Reference Banks for a period equal to the duration of the Interest Accrual Period concerned which appear on the Reuters Screen ABSIRFIX06 Page under the caption “ASSOCIATIONOFBANKSINSINGAPORE—SGD SPOT AND SWAP OFFER RATES AT 11:00 A.M. SINGAPORE” (or such other replacement page thereof for the purpose of displaying the spot rates and swap points of leading reference banks) at or about the Relevant Time on the relevant Interest Determination Date for a period equal to the duration of the Interest Accrual Period concerned; and T = the number of days in the Interest Accrual Period concerned; and
(4) if on any Interest Determination Date one only or none of the Reference Banks provides the Calculation Agent with quotations of their Swap Rate(s), the Rate of Interest shall be determined by the Calculation Agent to be the rate per annum equal to the arithmetic mean (rounded up, if necessary, to the nearest 5 decimal places) of the rates quoted by the Reference Banks or those of them (being at least two in number) to the Calculation Agent at or about the Relevant Time on such Interest Determination Date as being their cost (including the cost occasioned by or attributable to complying with reserves, liquidity, deposit or other requirements imposed on them by any relevant authority or authorities) of funding an amount equal to the aggregate principal amount of the relevant Floating Rate Notes for such Interest Accrual Period by whatever means they determine to be most appropriate, or if on such Interest Determination Date one only or none of the Reference Banks provides the Calculation Agent with such quotation, the Rate of Interest for the relevant Interest Accrual Period shall be the rate per annum equal to the arithmetic mean (rounded up, if necessary, to the nearest 5 decimal places) of the prime lending rates for Singapore Dollars quoted by the Reference Banks at or about the Relevant Time on such Interest Determination Date;
(C) On the last day of each Interest Accrual Period, the Issuer will pay interest on each Floating Rate Note to which such Interest Accrual Period relates at the Rate of Interest for such Interest Accrual Period.
(v) Rate of Interest for Index Linked Interest Notes: The Rate of Interest in respect of Index Linked Interest Notes for each Interest Accrual Period shall be determined in the manner specified hereon and interest will accrue by reference to an Index or Formula as specified hereon.
(d) Zero Coupon Notes: Where a Note the Interest Basis of which is specified to be Zero Coupon is repayable prior to the Maturity Date and is not paid when due, the amount due and payable prior to the Maturity Date shall be the Early Redemption Amount of such Note. As from the Maturity Date, the Rate of Interest for any overdue principal of such a Note shall be a rate per annum (expressed as a percentage) equal to the Amortisation Yield (as described in Condition 6(b)(i)).
73 (e) Dual Currency Notes: In the case of Dual Currency Notes, if the rate or amount of interest falls to be determined by reference to a Rate of Exchange or a method of calculating Rate of Exchange, the rate or amount of interest payable shall be determined in the manner specified hereon.
(f) Partly Paid Notes: In the case of Partly Paid Notes (other than Partly Paid Notes which are Zero Coupon Notes), interest will accrue as aforesaid on the paid-up nominal amount of such Notes and otherwise as specified hereon.
(g) Accrual of Interest: Interest shall cease to accrue on each Note on the due date for redemption unless, upon due presentation, payment is improperly withheld or refused, in which event interest shall continue to accrue (both before and after judgment) at the Rate of Interest in the manner provided in this Condition 5 to the Relevant Date.
(h) Margin, Maximum/Minimum Rates of Interest, Instalment Amounts and Redemption Amounts and Rounding:
(i) If any Margin is specified hereon (either (x) generally, or (y) in relation to one or more Interest Accrual Periods), an adjustment shall be made to all Rates of Interest, in the case of (x), or the Rates of Interest for the specified Interest Accrual Periods, in the case of (y), calculated in accordance with this Condition 5 by adding (if a positive number) or subtracting the absolute value (if a negative number) of such Margin, subject always to the next paragraph.
(ii) If any Maximum or Minimum Rate of Interest, Instalment Amount or Redemption Amount is specified hereon, then any Rate of Interest, Instalment Amount or Redemption Amount shall be subject to such maximum or minimum, as the case may be.
(iii) For the purposes of any calculations required pursuant to these Conditions (unless otherwise specified), (x) all percentages resulting from such calculations shall be rounded, if necessary, to the nearest one hundred-thousandth of a percentage point (with halves being rounded up), (y) all figures shall be rounded to seven significant figures (with halves being rounded up) and (z) all currency amounts that fall due and payable shall be rounded to the nearest unit of such currency (with halves being rounded up), save in the case of yen, which shall be rounded down to the nearest yen. For these purposes “unit” means the lowest amount of such currency that is available as legal tender in the country of such currency.
(i) Calculations: The amount of interest payable per CalculationAmount in respect of any Note for any Interest Accrual Period shall be equal to the product of the Rate of Interest, the Calculation Amount specified hereon, and the Day Count Fraction for such Interest Accrual Period, unless an Interest Amount (or a formula for its calculation) is applicable to such InterestAccrual Period, in which case the amount of interest payable per Calculation Amount in respect of such Note for such Interest Accrual Period shall equal such Interest Amount (or be calculated in accordance with such formula). Where any Interest Period comprises two or more Interest Accrual Periods, the amount of interest payable per Calculation Amount in respect of such Interest Period shall be the sum of the Interest Amounts payable in respect of each of those Interest Accrual Periods. In respect of any other period for which interest is required to be calculated, the provisions above shall apply save that the Day Count Fraction shall be for the period for which interest is required to be calculated.
(j) Determination and Publication of Rates of Interest, Interest Amounts, Final Redemption Amounts, Early Redemption Amounts, Optional Redemption Amounts and Instalment Amounts: The Calculation Agent shall, as soon as practicable on each
74 Interest Determination Date, or such other time on such date as the Calculation Agent may be required to calculate any rate or amount, obtain any quotation or make any determination or calculation, determine such rate and calculate the Interest Amounts for the relevant Interest Accrual Period, calculate the Final Redemption Amount, Early Redemption Amount, Optional Redemption Amount or Instalment Amount, obtain such quotation or make such determination or calculation, as the case may be, and cause the Rate of Interest and the Interest Amounts for each Interest Accrual Period and the relevant Interest Payment Date and, if required to be calculated, the Final Redemption Amount, Early Redemption Amount, Optional Redemption Amount or any Instalment Amount to be notified to the Trustee, the Issuer, each of the Paying Agents, the Noteholders, any other Calculation Agent appointed in respect of the Notes that is to make a further calculation upon receipt of such information and, if the Notes are listed on a stock exchange and the rules of such exchange or other relevant authority so require, such exchange or other relevant authority as soon as possible after their determination but in no event later than (i) the commencement of the relevant Interest Period, if determined prior to such time, in the case of notification to such exchange of a Rate of Interest and Interest Amount, or (ii) in all other cases, the fourth Business Day after such determination. Where any Interest Payment Date or Interest Period Date is subject to adjustment pursuant to Condition 5(b)(ii), the Interest Amounts and the Interest Payment Date so published may subsequently be amended (or appropriate alternative arrangements made with the consent of the Trustee by way of adjustment) without notice in the event of an extension or shortening of the Interest Period. If the Notes become due and payable under Condition 10, the accrued interest and the Rate of Interest payable in respect of the Notes shall nevertheless continue to be calculated as previously in accordance with this Condition but no publication of the Rate of Interest or the Interest Amount so calculated need be made unless the Trustee otherwise requires. The determination of any rate or amount, the obtaining of each quotation and the making of each determination or calculation by the Calculation Agent(s) shall (in the absence of manifest error) be final and binding upon all parties.
(k) Determination or Calculation by Trustee: If the Calculation Agent does not at any time for any reason determine or calculate the Rate of Interest for an Interest Accrual Period or any Interest Amount, Instalment Amount, Final Redemption Amount, Early Redemption Amount or Optional Redemption Amount, and no replacement Calculation Agent has been appointed by the Issuer within 2 Business Days of the relevant Determination Date or Interest Determination Date, the Trustee shall do so (or shall appoint an agent on its behalf to do so) and such determination or calculation shall be deemed to have been made by the Calculation Agent. In doing so, the Trustee shall apply the foregoing provisions of this Condition, with any necessary consequential amendments, to the extent that, in its opinion, it can do so, and, in all other respects it shall do so in such manner as it shall deem fair and reasonable in all the circumstances.
(l) Definitions: In these Conditions, unless the context otherwise requires, the following defined terms shall have the meanings set out below:
“Business Day” means:
(i) in the case of Notes denominated in a currency other than Singapore Dollars or euros, a day (other than a Saturday or Sunday) on which commercial banks and foreign exchange markets settle payments in the principal financial centre for such currency and/or
(ii) in the case of Notes denominated in euros, a day on which the TARGET system is operating (a “TARGET Business Day”) and/or
75 (iii) in the case of Singapore Dollar Notes, a day (other than a Saturday, Sunday or gazetted public holiday) on which commercial banks settle payments to Singapore and/or
(iv) in the case of a currency and/or one or more Business Centres a day (other than a Saturday or a Sunday) on which commercial banks and foreign exchange markets settle payments in such currency in the Business Centre(s) or, if no currency is indicated, generally in each of the Business Centres.
“Day Count Fraction” means, in respect of the calculation of an amount of interest on any Note for any period of time (from and including the first day of such period to but excluding the last) (whether or not constituting an Interest Period or an Interest Accrual Period, the “Calculation Period”):
(i) if “Actual/Actual” or “Actual/Actual — ISDA” is specified hereon, the actual number of days in the Calculation Period divided by 365 (or, if any portion of that Calculation Period falls in a leap year, the sum of (A) the actual number of days in that portion of the Calculation Period falling in a leap year divided by 366 and (B) the actual number of days in that portion of the Calculation Period falling in a non-leap year divided by 365)
(ii) if “Actual/365 (Fixed)” is specified hereon, the actual number of days in the Calculation Period divided by 365
(iii) if “Actual/360” is specified hereon, the actual number of days in the Calculation Period divided by 360
(iv) if “30/360”,“360/360” or “Bond Basis” is specified hereon, the number of days in the Calculation Period divided by 360, calculated on a formula basis as follows:
[360 x (Y − Y )] + [30 x (M − M )] + (D − D ) Day Count Fraction = 2 1 2 1 2 1 360
where:
“Y1” is the year, expressed as a number, in which the first day of the Calculation Period falls;
“Y2” is the year, expressed as a number, in which the day immediately following the last day included in the Calculation Period falls;
“M1” is the calendar month, expressed as a number, in which the first day of the Calculation Period falls;
“M2” is the calendar month, expressed as a number, in which the day immediately following the last day included in the Calculation Period falls;
“D1” is the first calendar day, expressed as a number, of the Calculation Period, unless
such number would be 31, in which case D1 will be 30; and
“D2” is the calendar day, expressed as a number, immediately following the last day
included in the Calculation Period, unless such number would be 31 and D1 is greater than 29, in which case D2 will be 30
76 (v) if “30E/360” or “Eurobond Basis” is specified hereon, the number of days in the Calculation Period divided by 360, calculated on a formula basis as follows:
[360 x (Y − Y )] + [30 x (M − M )] + (D − D ) Day Count Fraction = 2 1 2 1 2 1 360
where:
“Y1” is the year, expressed as a number, in which the first day of the Calculation Period falls;
“Y2” is the year, expressed as a number, in which the day immediately following the last day included in the Calculation Period falls;
“M1” is the calendar month, expressed as a number, in which the first day of the Calculation Period falls;
“M2” is the calendar month, expressed as a number, in which the day immediately following the last day included in the Calculation Period falls;
“D1” is the first calendar day, expressed as a number, of the Calculation Period, unless
such number would be 31, in which case D1 will be 30; and
“D2” is the calendar day, expressed as a number, immediately following the last day
included in the Calculation Period, unless such number would be 31, in which case D2 will be 30
(vi) if “30E/360 (ISDA)” is specified hereon, the number of days in the Calculation Period divided by 360, calculated on a formula basis as follows:
[360 x (Y −Y )] + [30 x (M − M )] + (D − D ) Day Count Fraction = 2 1 2 1 2 1 360
where:
“Y1” is the year, expressed as a number, in which the first day of the Calculation Period falls;
“Y2” is the year, expressed as a number, in which the day immediately following the last day included in the Calculation Period falls;
“M1” is the calendar month, expressed as a number, in which the first day of the Calculation Period falls;
“M2” is the calendar month, expressed as a number, in which the day immediately following the last day included in the Calculation Period falls;
“D1” is the first calendar day, expressed as a number, of the Calculation Period, unless (i) that day is the last day of February or (ii) such number would be 31, in which case
D1 will be 30; and
“D2” is the calendar day, expressed as a number, immediately following the last day included in the Calculation Period, unless (i) that day is the last day of February but not
the Maturity Date or (ii) such number would be 31, in which case D2 will be 30
77 (vii) if “Actual/Actual-ICMA” is specified hereon,
(a) if the Calculation Period is equal to or shorter than the Determination Period during which it falls, the number of days in the Calculation Period divided by the product of (x) the number of days in such Determination Period and (y) the number of Determination Periods normally ending in any year; and
(b) if the Calculation Period is longer than one Determination Period, the sum of:
(x) the number of days in such Calculation Period falling in the Determination Period in which it begins divided by the product of (1) the number of days in such Determination Period and (2) the number of Determination Periods normally ending in any year; and
(y) the number of days in such Calculation Period falling in the next Determination Period divided by the product of (1) the number of days in such Determination Period and (2) the number of Determination Periods normally ending in any year
where:
“Determination Period” means the period from and including a Determination Date in any year to but excluding the next Determination Date; and
“Determination Date” means the date(s) specified as such hereon or, if none is so specified, the Interest Payment Date(s)
“Euro-zone” means the region comprised of member states of the European Union that adopt the single currency in accordance with the Treaty establishing the European Community, as amended.
“Interest Accrual Period” means the period beginning on (and including) the Interest Commencement Date and ending on (but excluding) the first Interest Period Date and each successive period beginning on (and including) an Interest Period Date and ending on (but excluding) the next succeeding Interest Period Date.
“Interest Amount” means:
(i) in respect of an Interest Accrual Period, the amount of interest payable per Calculation Amount for that Interest Accrual Period and which, in the case of Fixed Rate Notes, and unless otherwise specified hereon, shall mean the Fixed Coupon Amount or Broken Amount specified hereon as being payable on the Interest Payment Date ending the Interest Period of which such Interest Accrual Period forms part; and
(ii) in respect of any other period, the amount of interest payable per Calculation Amount for that period.
“Interest Commencement Date” means the Issue Date or such other date as may be specified hereon.
“Interest Determination Date” means (x) in the case of Non-Singapore Dollar Notes, with respect to a Rate of Interest and Interest Accrual Period, the date specified as such hereon or, if none is so specified, (i) the first day of such Interest Accrual Period if the Specified Currency is Sterling or (ii) the day falling two Business Days in London for the Specified Currency prior to the first day of such Interest Accrual Period if the Specified Currency is neither Sterling nor euro or (iii) the day falling two TARGET Business Days prior to the first day of such Interest Accrual Period if the Specified
78 Currency is euro; or (y) in the case of Singapore Dollar Notes, in respect of any Interest Accrual Period, that number of Business Days in Singapore prior to the first day of the Interest Accrual Period as specified hereon.
“Interest Period” means the period beginning on and including the Interest Commencement Date and ending on but excluding the first Interest Payment Date and each successive period beginning on and including an Interest Payment Date and ending on but excluding the next succeeding Interest Payment Date.
“Interest Period Date” means each Interest Payment Date unless otherwise specified hereon.
“ISDA Definitions” means the 2006 ISDADefinitions, as published by the International Swaps and Derivatives Association, Inc., unless otherwise specified hereon.
“Rate of Interest” means the rate of interest payable from time to time in respect of this Note and that is either specified or calculated in accordance with the provisions hereon.
“Reference Banks” means (i) in the case of a determination of LIBOR, the principal London office of four major banks in the London inter-bank market;(ii) in the case of a determination of EURIBOR, the principal Euro-zone office of four major banks in the Euro-zone inter-bank market; and (iii) in the case of a determination of the relevant Reference Rate, SIBOR or Swap Rate, the principal Singapore office of three major banks in the Singapore inter-bank market in each case selected by the Calculation Agent or as specified hereon.
“Reference Rate” means the rate specified as such hereon.
“Relevant Screen Page” means such page, section, caption, column or other part of a particular information service as may be specified hereon or such other page, section, caption, column or other part as may replace it on that information service or such other information service, in each case, as may be nominated by the person providing or sponsoring the information appearing there for the purpose of displaying rates or prices comparable to the Reference Rate.
“Relevant Time” means 11.00 a.m. (Singapore time).
“Specified Currency” means the currency specified as such hereon or, if none is specified, the currency in which the Notes are denominated.
“TARGET System” means the Trans-European Automated Real-Time Gross Settlement Express Transfer (known as TARGET2) System which was launched on 19 November 2007 or any successor thereto.
(m) Calculation Agent: The Issuer shall procure that there shall at all times be one or more Calculation Agents if provision is made for them hereon and for so long as any Note is outstanding (as defined in the Trust Deed). Where more than one Calculation Agent is appointed in respect of the Notes, references in these Conditions to the Calculation Agent shall be construed as each Calculation Agent performing its respective duties under the Conditions. If the Calculation Agent is unable or unwilling to act as such or if the Calculation Agent fails duly to establish the Rate of Interest for an Interest Accrual Period or to calculate any Interest Amount, Instalment Amount, Final Redemption Amount, Early Redemption Amount or Optional Redemption Amount, as the case may be, or to comply with any other requirement, the Issuer shall (with the prior approval of the Trustee or an Extraordinary Resolution of holders of the Notes) appoint a leading bank or financial institution engaged
79 in the interbank market (or, if appropriate, money, swap or over-the-counter index options market) that is most closely connected with the calculation or determination to be made by the Calculation Agent (acting through its principal London office or any other office actively involved in such market) to act as such in its place. The Calculation Agent may not resign its duties without a successor having been appointed as aforesaid.
6 Redemption, Purchase and Options
(a) Redemption by Instalments and Final Redemption:
(i) Unless previously redeemed, purchased and cancelled as provided in this Condition 6, each Note that provides for Instalment Dates and Instalment Amounts shall be partially redeemed on each Instalment Date at the related Instalment Amount specified hereon. The outstanding nominal amount of each such Note shall be reduced by the Instalment Amount (or, if such Instalment Amount is calculated by reference to a proportion of the nominal amount of such Note, such proportion) for all purposes with effect from the related Instalment Date, unless payment of the Instalment Amount is improperly withheld or refused, in which case, such amount shall remain outstanding until the Relevant Date relating to such Instalment Amount.
(ii) Unless previously redeemed, purchased and cancelled as provided in this Condition 6, each Note shall be finally redeemed on the Maturity Date specified hereon at its Final Redemption Amount (which, unless otherwise provided, is its nominal amount) or, in the case of a Note falling within paragraph (i) above, its final Instalment Amount.
(b) Early Redemption:
(i) Zero Coupon Notes:
(A) The Early Redemption Amount payable in respect of any Zero Coupon Note, the Early Redemption Amount of which is not linked to an index and/or a formula, upon redemption of such Note pursuant to Condition 6(c) or upon it becoming due and payable as provided in Condition 10 shall be the Amortised Face Amount (calculated as provided below) of such Note unless otherwise specified hereon.
(B) Subject to the provisions of sub-paragraph (C) below, the Amortised Face Amount of any such Note shall be the scheduled Final Redemption Amount of such Note on the Maturity Date discounted at a rate per annum (expressed as a percentage) equal to theAmortisation Yield (which, if none is shown hereon, shall be such rate as would produce an Amortised Face Amount equal to the issue price of the Notes if they were discounted back to their issue price on the Issue Date) compounded annually.
(C) If the Early Redemption Amount payable in respect of any such Note upon its redemption pursuant to Condition 6(c) or upon it becoming due and payable as provided in Condition 10 is not paid when due, the Early Redemption Amount due and payable in respect of such Note shall be the Amortised Face Amount of such Note as defined in sub-paragraph (B) above, except that such sub-paragraph shall have effect as though the date on which the Note becomes due and payable were the Relevant Date. The calculation of the Amortised Face Amount in accordance with this sub-paragraph shall continue to be made (both before and after judgment) until the Relevant Date, unless the Relevant Date falls on or after the Maturity Date, in which case the amount due and payable shall be the scheduled Final Redemption Amount of such Note on the Maturity Date together with any interest that may accrue in accordance with Condition 5(d).
80 Where such calculation is to be made for a period of less than one year, it shall be made on the basis of the Day Count Fraction shown hereon.
(ii) Other Notes: The Early RedemptionAmount payable in respect of any Note (other than Notes described in (i) above), upon redemption of such Note pursuant to Condition 6(c) or upon it becoming due and payable as provided in Condition 10, shall be the Final Redemption Amount unless otherwise specified hereon.
(c) Redemption for Taxation Reasons: The Notes may be redeemed at the option of the Issuer in whole, but not in part, on any Interest Payment Date (if this Note is either a Floating Rate Note or an Index Linked Note) or at any time (if this Note is neither a Floating Rate Note nor an Index Linked Note), on giving not less than 30 nor more than 60 days’ notice to the Noteholders (which notice shall be irrevocable) at their Early Redemption Amount (as described in Condition 6(b) above) (together with interest accrued to the date fixed for redemption), if (i) the Issuer (or if the Guarantee was called, the Guarantor) has or will become obliged to pay additional amounts as described under Condition 8 as a result of any change in, or amendment to, the laws or regulations of Singapore or any political subdivision or, in each case, any authority thereof or therein having power to tax, or any change in the application or official interpretation of such laws or regulations, or the Notes do not qualify as “qualifying debt securities” for the purposes of the Income Tax Act, Chapter 134 of Singapore, which change or amendment becomes effective on or after the date on which agreement is reached to issue the first Tranche of the Notes, and (ii) such obligation cannot be avoided by the Issuer (or the Guarantor, as the case may be) taking reasonable measures available to it, provided that no such notice of redemption shall be given earlier than 90 days prior to the earliest date on which the Issuer (or the Guarantor, as the case may be) would be obliged to pay such additional amounts were a payment in respect of the Notes (or Guarantee, as the case may be) then due. Prior to the publication of any notice of redemption pursuant to this Condition 6(c), the Issuer shall deliver to the Trustee a certificate signed by two Directors of the Issuer stating that the Issuer is entitled to effect such redemption and setting forth a statement of facts showing that the conditions precedent to the right of the Issuer so to redeem have occurred, and an opinion of independent legal advisers of recognised standing to the effect that the Issuer (or the Guarantor, as the case may be) has or will become obliged to pay such additional amounts as a result of such change or amendment.
(d) Redemption at the Option of the Issuer: If Call Option is specified hereon, the Issuer may, on giving not less than 15 nor more than 30 days’ irrevocable notice to the Noteholders (or such other notice period as may be specified hereon) redeem all or, if so provided, some of the Notes on any Optional Redemption Date. Any such redemption of Notes shall be at their Optional Redemption Amount together with interest accrued to the date fixed for redemption. Any such redemption or exercise must relate to Notes of a nominal amount at least equal to the Minimum Redemption Amount to be redeemed specified hereon and no greater than the Maximum Redemption Amount to be redeemed specified hereon.
All Notes in respect of which any such notice is given shall be redeemed on the date specified in such notice in accordance with this Condition.
In the case of a partial redemption the notice to Noteholders shall also contain the certificate numbers of the Bearer Notes, or in the case of Registered Notes shall specify the nominal amount of Registered Notes drawn and the holder(s) of such Registered Notes, to be redeemed, which shall have been drawn in such place as the Trustee may approve and in such manner as it deems appropriate, subject to compliance with any applicable laws and stock exchange or other relevant authority requirements.
81 (e) Redemption at the Option of Noteholders: If Put Option is specified hereon, the Issuer shall, at the option of the holder of any such Note, upon the holder of such Note giving not less than 15 nor more than 30 days’ notice to the Issuer (or such other notice period as may be specified hereon) redeem such Note on the Optional Redemption Date(s) at its Optional Redemption Amount together with interest accrued to the date fixed for redemption.
To exercise such option the holder must deposit (in the case of Bearer Notes) such Note (together with all unmatured Receipts and Coupons and unexchanged Talons) with any Paying Agent or (in the case of Registered Notes) the Certificate representing such Note(s) with the Registrar or any TransferAgent at its specified office, together with a duly completed option exercise notice (“Exercise Notice”) in the form obtainable from any PayingAgent, the Registrar or any Transfer Agent (as applicable) within the notice period. No Note or Certificate so deposited and option exercised may be withdrawn (except as provided in the Agency Agreement) without the prior consent of the Issuer.
(f) Partly Paid Notes: Partly Paid Notes will be redeemed, whether at maturity, early redemption or otherwise, in accordance with the provisions of this Condition and the provisions specified hereon.
(g) Purchases: The Issuer, the Guarantor and any of their respective Subsidiaries as defined in the Trust Deed may at any time purchase Notes (provided that all unmatured Receipts and Coupons and unexchanged Talons relating thereto are attached thereto or surrendered therewith) in the open market or otherwise at any price.
(h) Cancellation: All Notes purchased by or on behalf of the Issuer, the Guarantor or any of their respective Subsidiaries may be surrendered for cancellation, in the case of Bearer Notes, by surrendering each such Note together with all unmatured Receipts and Coupons and all unexchanged Talons to the Issuing and Paying Agent and, in the case of Registered Notes, by surrendering the Certificate representing such Notes to the Registrar and, in each case, if so surrendered, shall, together with all Notes redeemed by the Issuer, be cancelled forthwith (together with all unmatured Receipts and Coupons and unexchanged Talons attached thereto or surrendered therewith). Any Notes so surrendered for cancellation may not be reissued or resold and the obligations of the Issuer and the Guarantor in respect of any such Notes shall be discharged.
7 Payments and Talons
(a) Bearer Notes: Payments of principal and interest in respect of Bearer Notes shall, subject as mentioned below, be made against presentation and surrender of the relevant Receipts (in the case of payments of Instalment Amounts other than on the due date for redemption and provided that the Receipt is presented for payment together with its relative Note), Notes (in the case of all other payments of principal and, in the case of interest, as specified in Condition 7(f)(vi)) or Coupons (in the case of interest, save as specified in Condition 7(f)(ii)), as the case may be, at the specified office of any Paying Agent outside the United States by a cheque payable in the relevant currency drawn on, or, at the option of the holder, by transfer to an account denominated in such currency with, a Bank. “Bank” means a bank in the principal financial centre for such currency or, in the case of euro, in a city in which banks have access to the TARGET System.
(b) Registered Notes:
(i) Payments of principal (which for the purposes of this Condition 7(b) shall include final Instalment Amounts but not other Instalment Amounts) in respect of Registered Notes shall be made against presentation and surrender of the relevant Certificates at the
82 specified office of any of the Transfer Agents or of the Registrar and in the manner provided in paragraph (ii) below.
(ii) Interest (which for the purpose of this Condition 7(b) shall include all Instalment Amounts other than final Instalment Amounts) on Registered Notes shall be paid to the person shown on the Register at the close of business on the fifteenth day before the due date for payment thereof (the “Record Date”). Payments of interest on each Registered Note shall be made in the relevant currency by cheque drawn on a Bank and mailed to the holder (or to the first named of joint holders) of such Note at its address appearing in the Register. Upon application by the holder to the specified office of the Registrar or any Transfer Agent before the Record Date, such payment of interest may be made by transfer to an account in the relevant currency maintained by the payee with a Bank.
(c) Payments in the United States: Notwithstanding the foregoing, if any Bearer Notes are denominated in U.S. dollars, payments in respect thereof may be made at the specified office of any Paying Agent in New York City in the same manner as aforesaid if (i) the Issuer and the Guarantor shall have appointed Paying Agents with specified offices outside the United States with the reasonable expectation that such Paying Agents would be able to make payment of the amounts on the Notes in the manner provided above when due, (ii) payment in full of such amounts at all such offices is illegal or effectively precluded by exchange controls or other similar restrictions on payment or receipt of such amounts and (iii) such payment is then permitted by United States law, without involving, in the opinion of the Issuer, any adverse tax consequence to the Issuer.
(d) Payments subject to Fiscal Laws: All payments are subject in all cases to any applicable fiscal or other laws, regulations and directives in the place of payment, but without prejudice to the provisions of Condition 8. No commission or expenses shall be charged to the Noteholders or Couponholders in respect of such payments.
(e) Appointment of Agents: The Issuing and Paying Agent, the Paying Agents, the Registrar, the Transfer Agents and the Calculation Agent initially appointed by the Issuer and the Guarantor and their respective specified offices are listed below. The Issuing and Paying Agent, the Paying Agents, the Registrar, the Transfer Agents and the Calculation Agent(s) act solely as agents of the Issuer and the Guarantor and do not assume any obligation or relationship of agency or trust for or with any Noteholder or Couponholder. The Issuer and the Guarantor reserve the right at any time with the approval of the Trustee to vary or terminate the appointment of the Issuing and Paying Agent, any other Paying Agent, the Registrar, any Transfer Agent or the Calculation Agent(s) and to appoint additional or other Paying Agents or Transfer Agents, provided that the Issuer shall at all times maintain (i) an Issuing and Paying Agent, (ii) a Registrar in relation to Registered Notes, (iii) a Transfer Agent in relation to Registered Notes, (iv) one or more Calculation Agent(s) where the Conditions so require, (v) a Paying Agent in Singapore, where the Notes may be presented or surrendered for payment or redemption, in the event that the Global Notes are exchanged for Definitive Notes, for so long as the Notes are listed on the SGX-ST and the rules of the SGX-ST so require, (vi) such other agents as may be required by any other stock exchange on which the Notes may be listed in each case, as approved by the Trustee and (vii) a Paying Agent with a specified office in a European Union member state that will not be obliged to withhold or deduct tax pursuant to any law implementing European Council Directive 2003/48/EC or any other Directive implementing the conclusions of the ECOFIN Council meeting of 26–27 November 2000.
In addition, the Issuer and the Guarantor shall forthwith appoint a Paying Agent in New York City in respect of any Bearer Notes denominated in U.S. dollars in the circumstances described in paragraph (c) above.
83 Notice of any such change or any change of any specified office shall promptly be given to the Noteholders.
(f) Unmatured Coupons and Receipts and unexchanged Talons:
(i) Upon the due date for redemption of Bearer Notes which comprise Fixed Rate Notes (other than Dual Currency Notes or Index Linked Notes), such Notes should be surrendered for payment together with all unmatured Coupons (if any) relating thereto, failing which an amount equal to the face value of each missing unmatured Coupon (or, in the case of payment not being made in full, that proportion of the amount of such missing unmatured Coupon that the sum of principal so paid bears to the total principal due) shall be deducted from the Final Redemption Amount, Early Redemption Amount or Optional RedemptionAmount, as the case may be, due for payment. Any amount so deducted shall be paid in the manner mentioned above against surrender of such missing Coupon within a period of 3 years from the Relevant Date for the payment of such principal (whether or not such Coupon has become void pursuant to Condition 9).
(ii) Upon the due date for redemption of any Bearer Note comprising a Floating Rate Note, Dual Currency Note or Index Linked Note, unmatured Coupons relating to such Note (whether or not attached) shall become void and no payment shall be made in respect of them.
(iii) Upon the due date for redemption of any Bearer Note, any unexchanged Talon relating to such Note (whether or not attached) shall become void and no Coupon shall be delivered in respect of such Talon.
(iv) Upon the due date for redemption of any Bearer Note that is redeemable in instalments, all Receipts relating to such Note having an Instalment Date falling on or after such due date (whether or not attached) shall become void and no payment shall be made in respect of them.
(v) Where any Bearer Note that provides that the relative unmatured Coupons are to become void upon the due date for redemption of those Notes is presented for redemption without all unmatured Coupons, and where any Bearer Note is presented for redemption without any unexchanged Talon relating to it, redemption shall be made only against the provision of such indemnity as the Issuer may require.
(vi) If the due date for redemption of any Note is not a due date for payment of interest, interest accrued from the preceding due date for payment of interest or the Interest Commencement Date, as the case may be, shall only be payable against presentation (and surrender if appropriate) of the relevant Bearer Note or Certificate representing it, as the case may be. Interest accrued on a Note that only bears interest after its Maturity Date shall be payable on redemption of such Note against presentation of the relevant Note or Certificate representing it, as the case may be.
(g) Talons: On or after the Interest Payment Date for the final Coupon forming part of a Coupon sheet issued in respect of any Bearer Note, the Talon forming part of such Coupon sheet may be surrendered at the specified office of the Issuing and Paying Agent in exchange for a further Coupon sheet (and if necessary another Talon for a further Coupon sheet) (but excluding any Coupons that may have become void pursuant to Condition 9).
(h) Non-Business Days: If any date for payment in respect of any Note, Receipt or Coupon is not a Business Day, the holder shall not be entitled to payment until the next following Business Day nor to any interest or other sum in respect of such postponed payment.
84 8 Taxation
All payments of principal and interest by or on behalf of the Issuer or the Guarantor in respect of the Notes, the Receipts and the Coupons or under the Guarantee shall be made free and clear of, and without withholding or deduction for, any taxes, duties, assessments or governmental charges of whatever nature imposed, levied, collected, withheld or assessed by or within Singapore or any authority therein or thereof having power to tax, unless such withholding or deduction is required by law. In that event, in relation to Singapore Dollar Notes, the Issuer or, as the case may be, the Guarantor will not be obliged to pay any additional amounts in respect of any such withholding or deduction from payments in respect of such Singapore Dollar Notes for, or on account of, any such taxes or duties, and in relation to Non-Singapore Dollar Notes, the Issuer or, as the case may be, the Guarantor shall pay such additional amounts as shall result in receipt by the Noteholders, Receiptholders and Couponholders of such amounts as would have been received by them had no such withholding or deduction been required, except that no such additional amounts shall be payable with respect to any Note, Receipt or Coupon:
(a) Other connection: to, or to a third party on behalf of, a holder who is (i) treated as a resident of Singapore or as having a permanent establishment in Singapore for tax purposes or (ii) liable to such taxes, duties, assessments or governmental charges in respect of such Note, Receipt or Coupon by reason of his having some connection with Singapore other than the mere holding of the Note, Receipt or Coupon; or
(b) Presentation more than 30 days after the Relevant Date: presented (or in respect of which the Certificate representing it is presented) for payment more than 30 days after the Relevant Date except to the extent that the holder of it would have been entitled to such additional amounts on presenting it for payment on the thirtieth day; or
(c) Payment to individuals: where such withholding or deduction is imposed on a payment to an individual and is required to be made pursuant to any law implementing European Council Directive 2003/48/EC or any other Directive implementing the conclusions of the ECOFIN Council meeting of 26 – 27 November 2000; or
(d) Payment by another Paying Agent: (except in the case of Registered Notes) presented for payment by or on behalf of a holder who would have been able to avoid such withholding or deduction by presenting the relevant Note, Receipt or Coupon to another Paying Agent in a Member State of the European Union; or
(e) Failure to comply with requirements: which would not be payable or due but for the failure of the holder or beneficial owner of such Note, Receipt or Coupon to comply with any certification, identification or other reporting requirements of Singapore concerning the nationality, residence, identity or other attributes of such holder or beneficial owner required in connection with a claim, of eligibility for avoidance or reduction of withholding or deduction of tax under the laws of Singapore, if requested in writing addressed to such holder or beneficial owner by the Issuer to comply with such requirements.
9 Prescription
Claims against the Issuer and/or the Guarantor for payment in respect of the Notes, Receipts and Coupons (which, for this purpose, shall not include Talons) shall be prescribed and become void unless made within 3 years from the appropriate Relevant Date in respect of them, unless otherwise provided in the relevant Pricing Supplement.
85 10 Events of Default
If any of the following events (“Events of Default”) occurs and is continuing, the Trustee at its discretion may, and if so requested by holders of at least 25 per cent. in nominal amount of the Notes then outstanding or if so directed by an Extraordinary Resolution shall (subject in each case to being indemnified and/or secured to its satisfaction), give written notice to the Issuer that the Notes are, and they shall immediately become, due and payable at their Early Redemption Amount together (if applicable) with accrued interest:
(a) default is made (in the case of principal, for more than 7 days and in the case of interest, for more than 14 days) in the payment on the due date of interest or principal in respect of any of the Notes; or
(b) the Issuer or the Guarantor does not perform or comply with any one or more of its other obligations in the Notes or the Trust Deed which default is not remedied within 60 days after notice of such default shall have been given to the Issuer by the Trustee; or
(c) (A) any other indebtedness of the Issuer or the Guarantor in respect of borrowed money becomes due and payable prior to its stated maturity by reason of any default, event of default or any analogous event (however described), or (B) any such indebtedness of the Issuer or the Guarantor in respect of borrowed money is not paid when due or, as the case may be, within any applicable grace period, or (C) the Issuer or the Guarantor fails to pay when due or, as the case may be, within any applicable grace period, any amount payable by it under any guarantee for, or indemnity in respect of, any moneys borrowed or raised; provided that no Event of Default will occur under this Condition 10(c) unless and until the aggregate amount of the relevant indebtedness, guarantees and indemnities in respect of which one or more of the events mentioned above in this Condition 10(c) have occurred exceeds US$100,000,000 or its equivalent in other currencies; or
(d) an order is made or an effective resolution is passed for the winding-up or dissolution of the Issuer or the Guarantor; or
(e) the Issuer or the Guarantor shall apply or petition for a winding-up or judicial management order in respect of itself or through an official action or a resolution of its board of directors ceases or threatens to cease to carry on all or a material part of its business or operations (except for any cessation or proposed cessation pursuant to either (i) a reconstruction, amalgamation, reorganisation, merger or consolidation, in each case, not involving insolvency or (ii) a disposal which is neither likely to have a material adverse effect on the ability of the Issuer to perform or comply with its payment obligations under the Notes nor likely to have a material adverse effect on the ability of the Guarantor to perform or comply with its payment obligations under the Guarantee); or
(f) (i) proceedings are initiated against the Issuer or the Guarantor under any applicable liquidation, insolvency, composition or other similar laws, or an application is made (or documents filed with a court) for the appointment of a receiver, receiver and manager, judicial manager or other similar official, or a receiver, receiver and manager, judicial manager or other similar official is appointed, in relation to the Issuer or the Guarantor or, as the case may be, in relation to the whole or a substantial part of the assets of any of them, or an encumbrancer takes possession of the whole or a substantial part of the assets of any of them, or a distress, execution, attachment, sequestration or other process is levied, enforced upon, sued out or put in force against the whole or a substantial part of the assets of any of them, and (ii) in any case (other than the appointment of a judicial manager) is not discharged or stayed within 60 days; or
86 (g) the Issuer or the Guarantor initiates or consents to judicial proceedings relating to itself under any applicable liquidation, insolvency, composition or other similar laws (including the obtaining of a moratorium) in respect of or affecting all or a material part of the debts of the Issuer or the Guarantor or makes a conveyance or assignment for the benefit of, or enters into any composition or other arrangement with, its creditors generally (or any class of its creditors) in respect of or affecting all or a material part of the debts of the Issuer or the Guarantor; or
(h) any action, condition or thing (including the obtaining of any necessary consent) at any time required to be taken, fulfilled or done in order (i) to enable the Issuer and the Guarantor lawfully to enter into, exercise their respective rights and perform and comply with their respective obligations under the Notes and the Trust Deed, (ii) to ensure that those obligations are legally binding and enforceable and (iii) in the case of Notes governed under the laws of England, to make the Notes and the Trust Deed admissible in evidence in the courts of England or in the case of Notes governed under the laws of Singapore, to make such Notes admissible in the courts of Singapore, is not taken, fulfilled or done; or
(i) the Guarantee is not (or is claimed by the Guarantor not to be) in full force and effect; or
(j) it is or will become unlawful for the Issuer or the Guarantor to perform or comply with any one or more of its payment or other material obligations under any of the Notes or the Trust Deed; or
(k) any event occurs that under the laws of any relevant jurisdiction has an analogous or equivalent effect to any of the events referred to in paragraphs (d), (e), (f) or (g),
provided that in the case of paragraphs (b) and (c), the Trustee shall have certified that in its opinion such event is materially prejudicial to the interests of the Noteholders.
11 Meetings of Noteholders, Modification, Waiver and Substitution
(a) Meetings of Noteholders: The Trust Deed contains provisions for convening meetings of Noteholders to consider any matter affecting their interests, including the sanctioning by Extraordinary Resolution (as defined in the Trust Deed) of a modification of any of these Conditions or any provisions of the Trust Deed. Such a meeting may be convened by Noteholders holding not less than 10 per cent. in nominal amount of the Notes for the time being outstanding. The quorum for any meeting convened to consider an Extraordinary Resolution shall be two or more persons holding or representing a clear majority in nominal amount of the Notes for the time being outstanding, or at any adjourned meeting two or more persons being or representing Noteholders whatever the nominal amount of the Notes held or represented, unless the business of such meeting includes consideration of proposals, inter alia, (i) to amend the dates of maturity or redemption of the Notes, any Instalment Date or any date for payment of interest or Interest Amounts on the Notes, (ii) to reduce or cancel the nominal amount of, or any InstalmentAmount of, or any premium payable on redemption of, the Notes, (iii) to reduce the rate or rates of interest in respect of the Notes or to vary the method or basis of calculating the rate or rates or amount of interest or the basis for calculating any Interest Amount in respect of the Notes, (iv) if a Minimum and/or a Maximum Rate of Interest, Instalment Amount or Redemption Amount is shown hereon, to reduce any such Minimum and/or Maximum, (v) to vary any method of, or basis for, calculating the Final Redemption Amount, the Early Redemption Amount or the Optional Redemption Amount, including the method of calculating the Amortised Face Amount, (vi) to vary the currency or currencies of payment or denomination of the Notes, (vii) to modify the provisions concerning the quorum required at any meeting of Noteholders or the majority required to pass the Extraordinary Resolution, or (viii) to modify or cancel the Guarantee, in which case the necessary quorum shall be two or more persons holding or representing not less than
87 75 per cent., or at any adjourned meeting not less than 25 per cent., in nominal amount of the Notes for the time being outstanding. Any Extraordinary Resolution duly passed shall be binding on Noteholders (whether or not they were present at the meeting at which such resolution was passed) and on all Couponholders.
The Trust Deed provides that a resolution in writing signed by or on behalf of the holders of not less than 90 per cent. in nominal amount of the Notes outstanding shall for all purposes be as valid and effective as an Extraordinary Resolution passed at a meeting of Noteholders duly convened and held. Such a resolution in writing may be contained in one document or several documents in the same form, each signed by or on behalf of one or more Noteholders.
These Conditions may be amended, modified or varied in relation to any Series of Notes by the terms of the relevant Pricing Supplement in relation to such Series.
(b) Modification and Waiver of the Trust Deed: The Trustee may agree, without the consent of the Noteholders or Couponholders, to (i) any modification of any of the provisions of the Trust Deed that is of a formal, minor or technical nature or is made to correct a manifest error or to comply with mandatory provisions of applicable law or as required by Euroclear and/or Clearstream, Luxembourg and/or CDP, and (ii) any other modification (except as mentioned in the Trust Deed), and any waiver or authorisation of any breach or proposed breach, of any of the provisions of the Trust Deed that is in the opinion of the Trustee not materially prejudicial to the interests of the Noteholders. Any such modification, authorisation or waiver shall be binding on the Noteholders and the Couponholders and, if the Trustee so requires, such modification shall be notified to the Noteholders as soon as practicable.
(c) Substitution: The Trust Deed contains provisions permitting the Trustee to agree, subject to such amendment of the Trust Deed and such other conditions as the Trustee may require, but without the consent of the Noteholders or the Couponholders, to the substitution of the Issuer’s successor in business or any Subsidiary (as defined in the Trust Deed) of the Issuer or its successor in business or the substitution of the Guarantor’s successor in business or any Subsidiary of the Guarantor or its successor in business in place of the Issuer or the Guarantor, as the case may be, or of any previous substituted company, as principal debtor or guarantor under the Trust Deed and the Notes. In the case of such a substitution the Trustee may agree, without the consent of the Noteholders or the Couponholders, to a change of the law governing the Notes, the Receipts, the Coupons, the Talons and/or the Trust Deed provided that such change would not in the opinion of the Trustee be materially prejudicial to the interests of the Noteholders.
(d) Entitlement of the Trustee: In connection with the exercise of its functions (including but not limited to those referred to in this Condition) the Trustee shall have regard to the interests of the Noteholders as a class and shall not have regard to the consequences of such exercise for individual Noteholders or Couponholders and the Trustee shall not be entitled to require, nor shall any Noteholder or Couponholder be entitled to claim, from the Issuer or the Guarantor any indemnification or payment in respect of any tax consequence of any such exercise upon individual Noteholders or Couponholders.
12 Enforcement
At any time after the Notes become due and payable, the Trustee may, at its discretion and without further notice, institute such proceedings against the Issuer and/or the Guarantor as it may think fit to enforce the terms of the Trust Deed, the Notes, the Receipts and the Coupons, but it need not take any such proceedings unless (a) it shall have been so directed by an Extraordinary Resolution or so requested in writing by Noteholders holding at least 25 per cent. in nominal amount of the Notes outstanding, and (b) it shall have been indemnified and/or secured
88 to its satisfaction. No Noteholder, Receiptholder or Couponholder may proceed directly against the Issuer or the Guarantor unless the Trustee, having become bound so to proceed, fails to do so within a reasonable time and such failure is continuing.
13 Indemnification of the Trustee
The Trust Deed contains provisions for the indemnification of the Trustee and for its relief from responsibility. The Trustee is entitled to enter into business transactions with the Issuer, the Guarantor and any entity related to the Issuer or the Guarantor without accounting for any profit.
The Trustee may rely without liability to Noteholders or Couponholders on a report, confirmation or certificate or any advice of any accountants, financial advisers, financial institution or any other expert, whether or not addressed to it and whether their liability in relation thereto is limited (by its terms or by any engagement letter relating thereto entered into by the Trustee or in any other manner) by reference to a monetary cap, methodology or otherwise. The Trustee may accept and shall be entitled to rely on any such report, confirmation or certificate or advice and such report, confirmation or certificate or advice shall be binding on the Issuer, the Guarantor, the Trustee, the Noteholders and the Couponholders.
14 Replacement of Notes, Certificates, Receipts, Coupons and Talons
If a Note, Certificate, Receipt, Coupon or Talon is lost, stolen, mutilated, defaced or destroyed, it may be replaced, subject to applicable laws, regulations and stock exchange or other relevant authority regulations, at the specified office of the Issuing and PayingAgent (in the case of Bearer Notes, Receipts, Coupons or Talons) and of the Registrar (in the case of Certificates) or such other Paying Agent or Transfer Agent, as the case may be, as may from time to time be designated by the Issuer for the purpose and notice of whose designation is given to Noteholders, in each case on payment by the claimant of the fees and costs incurred in connection therewith and on such terms as to evidence, security and indemnity (which may provide, inter alia, that if the allegedly lost, stolen or destroyed Note, Certificate, Receipt, Coupon or Talon is subsequently presented for payment or, as the case may be, for exchange for further Coupons, there shall be paid to the Issuer on demand the amount payable by the Issuer in respect of such Notes, Certificates, Receipts, Coupons or further Coupons) and otherwise as the Issuer or the Guarantor may require. Mutilated or defaced Notes, Certificates, Receipts, Coupons or Talons must be surrendered before replacements will be issued.
15 Further Issues
The Issuer may from time to time without the consent of the Noteholders or Couponholders create and issue further notes either having the same terms and conditions as the Notes in all respects (or in all respects except for the first payment of interest on them) and so that such further issue shall be consolidated and form a single series with the outstanding securities of any series (including the Notes) or upon such terms as the Issuer may determine at the time of their issue. References in these Conditions to the Notes include (unless the context requires otherwise) any other securities issued pursuant to this Condition and forming a single series with the Notes. Any further securities forming a single series with the outstanding securities of any series (including the Notes) constituted by the Trust Deed or any deed supplemental to it shall, and any other securities may (with the consent of the Trustee), be constituted by the Trust Deed. The Trust Deed contains provisions for convening a single meeting of the Noteholders and the holders of securities of other series where the Trustee so decides.
89 16 Notices
Notices to the holders of Registered Notes shall be mailed to them at their respective addresses in the Register and deemed to have been given on the fourth weekday (being a day other than a Saturday or a Sunday) after the date of mailing. Notices to the holders of Bearer Notes shall be valid if published in a daily newspaper of general circulation in Singapore (which is expected to be The Business Times). If in the opinion of the Trustee any such publication is not practicable, notice shall be validly given if published in another leading daily English language newspaper with general circulation in Singapore. Any such notice shall be deemed to have been given on the date of such publication or, if published more than once or on different dates, on the first date on which publication is made, as provided above.
Couponholders shall be deemed for all purposes to have notice of the contents of any notice given to the holders of Bearer Notes in accordance with this Condition.
17 Currency Indemnity
Any amount received or recovered in a currency other than the currency in which payment under the relevant Note, Coupon or Receipt is due (whether as a result of, or of the enforcement of, a judgment or order of a court of any jurisdiction, in the insolvency, winding-up or dissolution of the Issuer or the Guarantor or otherwise) by any Noteholder or Couponholder in respect of any sum expressed to be due to it from the Issuer or the Guarantor shall only constitute a discharge to the Issuer or the Guarantor, as the case may be, to the extent of the amount in the currency of payment under the relevant Note, Coupon or Receipt that the recipient is able to purchase with the amount so received or recovered in that other currency on the date of that receipt or recovery (or, if it is not practicable to make that purchase on that date, on the first date on which it is practicable to do so). If the amount received or recovered is less than the amount expressed to be due to the recipient under any Note, Coupon or Receipt, the Issuer, failing whom the Guarantor, shall indemnify it against any loss sustained by it as a result. In any event, the Issuer, failing whom the Guarantor, shall indemnify the recipient against the cost of making any such purchase. For the purposes of this Condition, it shall be sufficient for the Noteholder or Couponholder, as the case may be, to demonstrate that it would have suffered a loss had an actual purchase been made. These indemnities constitute a separate and independent obligation from the Issuer’s and the Guarantor’s other obligations, shall give rise to a separate and independent cause of action, shall apply irrespective of any indulgence granted by any Noteholder or Couponholder and shall continue in full force and effect despite any other judgment, order, claim or proof for a liquidated amount in respect of any sum due under any Note, Coupon or Receipt or any other judgment or order.
18 Rights of Third Parties
No person shall have any right to enforce any term or condition of the Notes under the Contracts (Rights of Third Parties) Act 1999.
19 Governing Law and Jurisdiction
(a) Governing Law: The Notes, the Receipts, the Coupons and the Talons and any non- contractual obligations arising out of or in connection with them are governed by, and shall be construed in accordance with, English law.
(b) Jurisdiction: The Courts of England are to have exclusive jurisdiction to settle any disputes that may arise out of or in connection with any Notes, Receipts, Coupons or Talons or the Guarantee and accordingly any legal action or proceedings arising out of or in connection with any Notes, Receipts, Coupons, Talons or the Guarantee (“Proceedings”) may be
90 brought in such courts. Each of the Issuer and the Guarantor has in the Trust Deed irrevocably submitted to the jurisdiction of the courts of England and waives any objection to Proceedings in such courts on the ground of venue or on the ground that the Proceedings have been brought in an inconvenient forum.
(c) Service of Process: Each of the Issuer and the Guarantor has in the Trust Deed irrevocably appointed SingTel (Europe) Limited of Birchin Court, 20 Birchin Lane, London EC3V 9DU, United Kingdom as their agent in England to receive, for it and on its behalf, service of process in any Proceedings in England. Such service shall be deemed completed on delivery to such process agent (whether or not, it is forwarded to and received by the Issuer or the Guarantor). If for any reason such process agent ceases to be able to act as such or no longer has an address in London, each of the Issuer and the Guarantor irrevocably agrees to appoint a substitute process agent and shall immediately notify Noteholders of such appointment in accordance with Condition 16. Nothing shall affect the right to serve process in any manner permitted by law.
91 SUMMARY OF PROVISIONS RELATING TO THE NOTES WHILEINGLOBALFORM
1 Initial Issue of Notes
Global Notes and Global Certificates may be delivered on or prior to the original issue date of the Tranche to a Common Depositary or CDP.
Upon the initial deposit of a Global Note with CDP or a common depositary for Euroclear and Clearstream, Luxembourg (the “Common Depositary”) or registration of Registered Notes in the name of CDP or any nominee for Euroclear and Clearstream, Luxembourg and delivery of the relative Global Certificate to CDP or the Common Depositary, CDP, Euroclear or Clearstream, Luxembourg, as the case may be, will credit each subscriber with a nominal amount of Notes equal to the nominal amount thereof for which it has subscribed and paid.
Upon the initial deposit of a Global Certificate in respect of, and registration of, Registered Notes in the name of a nominee for DTC and delivery of the relevant Global Certificate to the Custodian for DTC, DTC will credit each participant with a nominal amount of Notes equal to the nominal amount thereof for which it has subscribed and paid.
Notes that are initially deposited with CDP or the Common Depositary may also be credited to the accounts of subscribers with (if indicated in the relevant Pricing Supplement) other clearing systems through direct or indirect accounts with Euroclear, Clearstream, Luxembourg and/or CDP held by such other clearing systems. Conversely, Notes that are initially deposited with any other clearing system may similarly be credited to the accounts of subscribers with Euroclear, Clearstream, Luxembourg, CDP and/or other clearing systems.
2 Relationship of Accountholders with Clearing Systems
Each of the persons shown in the records of Euroclear, Clearstream, Luxembourg, DTC, CDP or any other clearing system (“Alternative Clearing System”) as the holder of a Note represented by a Global Note or a Global Certificate must look solely to Euroclear, Clearstream, Luxembourg, DTC, CDP or any such Alternative Clearing System (as the case may be) for his share of each payment made by the Issuer to the bearer of such Global Note or the holder of the underlying Registered Notes, as the case may be, and in relation to all other rights arising under the Global Notes or Global Certificates, subject to and in accordance with the respective rules and procedures of Euroclear, Clearstream, Luxembourg, DTC, CDP or such Alternative Clearing System (as the case may be). Such persons shall have no claim directly against the Issuer in respect of payments due on the Notes for so long as the Notes are represented by such Global Note or Global Certificate and such obligations of the Issuer will be discharged by payment to the bearer of such Global Note or the holder of the underlying Registered Notes, as the case may be, in respect of each amount so paid.
3 Exchange
3.1 Temporary Global Notes
Each temporary Global Note will be exchangeable, free of charge to the holder, on or after its Exchange Date:
(i) if the relevant Pricing Supplement indicates that such Global Note is issued in compliance with the C Rules or in a transaction to which TEFRA is not applicable (as to which, see “Overview of the Programme — Selling Restrictions”), in whole, but not in part, for the Definitive Notes defined and described below; and
92 (ii) otherwise, in whole or in part upon certification as to non-U.S. beneficial ownership in the form set out in the Agency Agreement for interests in a permanent Global Note or, if so provided in the relevant Pricing Supplement, for Definitive Notes.
3.2 Permanent Global Notes
Each permanent Global Note will be exchangeable, free of charge to the holder, on or after its Exchange Date in whole but not, except as provided under paragraph 3.4 below, in part for Definitive Notes if the permanent Global Note is held on behalf of Euroclear or Clearstream, Luxembourg or CDP or any other clearing system (“Alternative Clearing System”) and any such clearing system is closed for business for a continuous period of 14 days (other than by reason of holidays, statutory or otherwise) or announces an intention permanently to cease business or in fact does so.
In the event that a Global Note is exchanged for Definitive Notes, such Definitive Notes shall be issued in Specified Denomination(s) only. A Noteholder who holds a principal amount of less than the minimum Specified Denomination will not receive a Definitive Note in respect of such holding and would need to purchase a principal amount of Notes such that it holds an amount equal to one or more Specified Denominations.
3.3 Permanent Global Certificates
(a) Unrestricted Global Certificates
If the Pricing Supplement states that the Notes are to be represented by an Unrestricted Global Certificate on issue, the following will apply in respect of transfers of Notes held in Euroclear, Clearstream, Luxembourg, CDP or an Alternative Clearing System. These provisions will not prevent the trading of interests in the Notes within a clearing system whilst they are held on behalf of such clearing system, but will limit the circumstances in which the Notes may be withdrawn from the relevant clearing system.
Transfers of the holding of Notes represented by an Unrestricted Global Certificate pursuant to Condition 2(b) may only be made in whole but not in part:
(i) if the relevant clearing system is closed for business for a continuous period of 14 days (other than by reason of holidays, statutory or otherwise) or announces an intention permanently to cease business or does in fact do so; or
(ii) if principal in respect of any Notes is not paid when due; or
(iii) with the consent of the Issuer,
provided that, in the case of the first transfer of part of a holding pursuant to paragraph 3.3(i) or 3.3(ii) above, the Registered Holder has given the Registrar not less than 30 days’ notice at its specified office of the Registered Holder’s intention to effect such transfer.
(b) Restricted Global Certificates
If the Pricing Supplement states that the Restricted Notes are to be represented by a Restricted Global Certificate on issue, the following will apply in respect of transfers of Notes held in DTC. These provisions will not prevent the trading of interests in the Notes within a clearing system whilst they are held on behalf of DTC, but will limit the circumstances in which the Notes may be withdrawn from DTC. Transfers of the holding of Notes represented by that Restricted Global Certificate pursuant to Condition 2(b) may only be made:
93 (i) in whole but not in part, if such Notes are held on behalf of a Custodian for DTC and if DTC notifies the Issuer that it is no longer willing or able to discharge properly its responsibilities as depositary with respect to that Restricted Global Certificate or DTC ceases to be a “clearing agency” registered under the Exchange Act or is at any time no longer eligible to act as such, and the Issuer is unable to locate a qualified successor within 90 days of receiving notice of such ineligibility on the part of DTC; or
(ii) in whole or in part, with the Issuer’s consent,
provided that, in the case of any transfer pursuant to (i) above, the relevant Noteholder has given the relevant Registrar not less than 30 days’ notice at its specified office of the Noteholder’s intention to effect such transfer. Individual Certificates issued in exchange for a beneficial interest in a Restricted Global Certificate shall bear the legend applicable to such Notes as set out in “Transfer Restrictions”.
3.4 Partial Exchange of Permanent Global Notes
For so long as a permanent Global Note is held on behalf of a clearing system and the rules of that clearing system permit, such permanent Global Note will be exchangeable in part on one or more occasions for Definitive Notes if so provided in, and in accordance with, the Conditions (which will be set out in the relevant Pricing Supplement) relating to Partly Paid Notes.
3.5 Delivery of Notes
On or after any due date for exchange the holder of a Global Note may surrender such Global Note or, in the case of a partial exchange, present it for endorsement to or to the order of the Issuing and Paying Agent. In exchange for any Global Note, or the part thereof to be exchanged, the Issuer will (i) in the case of a temporary Global Note exchangeable for a permanent Global Note, deliver, or procure the delivery of, a permanent Global Note in an aggregate nominal amount equal to that of the whole or that part of a temporary Global Note that is being exchanged or, in the case of a subsequent exchange, endorse, or procure the endorsement of, a permanent Global Note to reflect such exchange or (ii) in the case of a Global Note exchangeable for Definitive Notes, deliver, or procure the delivery of, an equal aggregate nominal amount of duly executed and authenticated Definitive Notes. Global Notes and Definitive Notes will be delivered outside the United States and its possessions. In this Offering Circular, “Definitive Notes” means, in relation to any Global Note, the definitive Bearer Notes for which such Global Note may be exchanged (if appropriate, having attached to them all Coupons and Receipts in respect of interest or Instalment Amounts that have not already been paid on the Global Note and a Talon). Definitive Notes will be security printed in accordance with any applicable legal and stock exchange requirements in or substantially in the form set out in the Schedules to the English Law Trust Deed or the Singapore Law Trust Deed, as the case may be. On exchange in full of each permanent Global Note, the Issuer will, if the holder so requests, procure that it is cancelled and returned to the holder together with the relevant Definitive Notes.
3.6 Exchange Date
“Exchange Date” means, in relation to a temporary Global Note, the day falling after the expiry of 40 days after its issue date and, in relation to a permanent Global Note, a day falling not less than 60 days, or in the case of failure to pay principal in respect of any Notes when due 30 days, after that on which the notice requiring exchange is given and on which banks are open for business in the city in which the specified office of the Issuing and Paying Agent is located and in the city in which the relevant clearing system is located.
94 4 Amendment to Conditions
The temporary Global Notes, permanent Global Notes and Global Certificates contain provisions that apply to the Notes that they represent, some of which modify the effect of the terms and conditions of the Notes governed by English Law and the terms and conditions of the Notes governed by Singapore Law set out in this Offering Circular. The following is a summary of certain of those provisions:
4.1 Payments
No payment falling due after the Exchange Date will be made on any Global Note unless exchange for an interest in a permanent Global Note or for Definitive Notes is improperly withheld or refused. Payments on any temporary Global Note issued in compliance with the D Rules before the Exchange Date will only be made against presentation of certification as to non-U.S. beneficial ownership in the form set out in the Agency Agreement. All payments in respect of Notes represented by a Global Note will be made against presentation for endorsement and, if no further payment falls to be made in respect of the Notes, surrender of that Global Note to or to the order of the Issuing and Paying Agent or such other Paying Agent as shall have been notified to the Noteholders for such purpose. A record of each payment so made will be endorsed on each Global Note, which endorsement will be prima facie evidence that such payment has been made in respect of the Notes. Condition 7(e)(vii) and Condition 8(d) will apply to the Definitive Notes only. For the purpose of any payments made in respect of a Global Note, the relevant place of presentation shall be disregarded in the definition of “business day” set out in Condition 7(h) (Non-Business Days).
All payments in respect of Notes represented by a Global Certificate will be made to, or to the order of, the person whose name is entered on the Register at the close of business on the Clearing System Business Day immediately prior to the date for payment, where Clearing System Business Day means Monday to Friday inclusive except 25 December and 1 January.
4.2 Prescription
Claims against the Issuer and/or the Guarantor in respect of Notes that are represented by a permanent Global Note will become void unless it is presented for payment within a period of 3 years (in the case of principal) and 3 years (in the case of interest) from the appropriate Relevant Date (as defined in the Conditions).
4.3 Meetings
The holder of a permanent Global Note or of Notes represented by a Global Certificate shall (unless such permanent Global Note or Global Certificate represents only one Note) be treated as being two persons for the purposes of any quorum requirements of a meeting of Noteholders and, at any such meeting, the holder of a permanent Global Note shall be treated as having one vote in respect of each integral currency unit of the Specified Currency of the Notes. (All holders of Registered Notes are entitled to one vote in respect of each integral currency unit of the Specified Currency of the Notes comprising such Noteholder’s holding, whether or not represented by a Global Certificate.)
4.4 Cancellation
Cancellation of any Note represented by a permanent Global Note or Global Certificate that is required by the Conditions to be cancelled (other than upon its redemption) will be effected by reduction in the nominal amount of the relevant permanent Global Note or its presentation
95 to or to the order of the Issuing and Paying Agent for endorsement in the relevant schedule of such permanent Global Note or in the case of a Global Certificate, by reduction in the aggregate principal amount of the Certificates in the register of the certificateholders, whereupon the principal amount thereof shall be reduced for all purposes by the amount so cancelled and endorsed.
4.5 Purchase
Notes represented by a permanent Global Note or Global Certificate may only be purchased by the Issuer, the Guarantor or any of their respective subsidiaries if they are purchased together with the rights to receive all future payments of interest and Instalment Amounts (if any) thereon.
4.6 Issuer’s Option
Any option of the Issuer provided for in the Conditions of any Notes while such Notes are represented by a permanent Global Note or Global Certificate shall be exercised by the Issuer giving notice to the Noteholders within the time limits set out in and containing the information required by the Conditions, except that the notice shall not be required to contain the serial numbers of Notes drawn in the case of a partial exercise of an option and accordingly no drawing of Notes shall be required. In the event that any option of the Issuer is exercised in respect of some but not all of the Notes of any Series, the rights of accountholders with a clearing system in respect of the Notes will be governed by the standard procedures of Euroclear, Clearstream, Luxembourg, DTC or CDP or any other clearing system (as the case may be).
4.7 Noteholders’ Options
Any option of the Noteholders provided for in the Conditions of any Notes while such Notes are represented by a permanent Global Note or Global Certificate may be exercised by the holder of the permanent Global Note or Global Certificate giving notice to the Issuing and Paying Agent within the time limits relating to the deposit of Notes with a Paying Agent set out in the Conditions substantially in the form of the notice available from any Paying Agent, except that the notice shall not be required to contain the serial numbers of the Notes in respect of which the option has been exercised, and stating the nominal amount of Notes in respect of which the option is exercised and at the same time presenting the permanent Global Note or Global Certificate to the Issuing and Paying Agent, or to a Paying Agent acting on behalf of the Issuing and Paying Agent, for notation.
4.8 Trustee’s Powers
In considering the interests of Noteholders while any Global Note is held on behalf of, or Registered Notes are registered in the name of any nominee for, a clearing system, the Trustee may have regard to any information provided to it by such clearing system or its operator as to the identity (either individually or by category) of its accountholders with entitlements to such Global Note or Registered Notes and may consider such interests as if such accountholders were the holders of the Notes represented by such Global Note or Global Certificate.
4.9 Events of Default
Each Global Note provides that the holder may cause such Global Note, or a portion of it, to become due and repayable in the circumstances described in Condition 10 by stating in
96 the notice to the Issuing and Paying Agent the nominal amount of such Global Note that is becoming due and repayable. If principal in respect of any Note is not paid when due, the holder of a Global Note or Registered Notes represented by a Global Certificate may elect for direct enforcement rights against the Issuer and the Guarantor under the terms of a Deed of Covenant executed as a deed by the Issuer and the Guarantor on 29 July 2010 to come into effect in relation to the whole or a part of such Global Note or one or more Registered Notes in favour of the persons entitled to such part of such Global Note or such Registered Notes, as the case may be, as accountholders with a clearing system. Following any such acquisition of direct rights, the Global Note or, as the case may be, the Global Certificate and the corresponding entry in the register kept by the Registrar will become void as to the specified portion or Registered Notes, as the case may be. However, no such election may be made in respect of Notes represented by a Global Certificate unless the transfer of the whole or a part of the holding of Notes represented by that Global Certificate shall have been improperly withheld or refused.
4.10 Notices
So long as any Notes are represented by a Global Note or Global Certificate and such Global Note or Global Certificate is held on behalf of a clearing system, notices to the holders of Notes of that Series may be given by delivery of the relevant notice to that clearing system for communication by it to entitled accountholders in substitution for publication as required by the Conditions or by delivery of the relevant notice to the holder of the Global Note or Global Certificate.
5 Partly Paid Notes
The provisions relating to Partly Paid Notes are not set out in this Offering Circular, but will be contained in the relevant Pricing Supplement and thereby in the Global Notes or Global Certificates. While any instalments of the subscription moneys due from the holder of Partly Paid Notes are overdue, no interest in a Global Note representing such Notes may be exchanged for an interest in a permanent Global Note or Global Certificate or for Definitive Notes (as the case may be). If any Noteholder fails to pay any instalment due on any Partly Paid Notes within the time specified, the Issuer may forfeit such Notes and shall have no further obligation to their holder in respect of them.
97 USEOFPROCEEDS
The net proceeds from the issue of each Tranche of Notes will be applied by the Issuer to fund its ordinary course of business. If, in respect of any particular issue, there is a particular identified use of proceeds, this will be stated in the applicable Pricing Supplement.
98 DESCRIPTIONOFTHEISSUER
The Issuer, a wholly-owned subsidiary of SingTel, is a private company limited by shares incorporated under the laws of Singapore on 7 March 2001. The principal activities of the Issuer are the provision of finance and treasury services to SingTel and its related companies. The Issuer will utilise the net proceeds of the Issue, after deducting issue expenses, to refinance the Issuer’s existing bank borrowings and to fund SingTel’s and its subsidiaries’ ordinary course of business. The Issuer’s registered office is located at 31 Exeter Road, Comcentre, Singapore 239732. The issued share capital of the Issuer is S$50,000,000.00 comprising fifty million ordinary shares issued and held by SingTel.
No financial statements for the Issuer are included in this Offering Circular, and the Issuer will not publish financial statements on an interim basis or otherwise (except for such statements, if any, which the Issuer is required by Singapore law to publish). The Issuer intends to furnish to the Trustee within 180 days after the end of each financial year a copy of its audited accounts as at the end of and for that financial year. Any such information or report, if published, will be made available for inspection during normal business hours at the specified office of the Paying Agent.
The following table sets forth the name and position of each member of the Board of Directors of the Issuer:
Name Position
Ms. Chua Sock Koong...... Director
Ms. Jeann Low Ngiap Jong . . . . . Director
The establishment of the Programme was approved by the Board of Directors of the Issuer on 22 July 2010.
99 DESCRIPTIONOFSINGTELANDTHESINGTELGROUP
1. History and Background
SingTel traces its heritage, through its predecessors, to 1879 and has played an integral part in the development of the country as a major communications hub in the region.
Telecommunications services in Singapore first started in the late 19th century. Telecommunication services in Singapore were provided by the Telecommunication Authority of Singapore, a Singapore Government statutory board, from 1972 until privatisation in 1992.
SingTel was incorporated in 1992 and listed on the SGX-ST on 1 November 1993. Based on its closing price of S$3.04 on 22 June 2010, SingTel had a market capitalisation of S$48.4 billion and is the largest listed company on the SGX-ST by market capitalisation. SingTel is also listed on the Australian Securities Exchange.
The SingTel Group provides a comprehensive range of communications services and solutions, including fixed, mobile, data, internet, ICT, satellite and pay TV. The SingTel Group and its Regional Mobile Associates and Joint Venture Companies have a combined regional mobile customer base of approximately 293 million customers as at 31 March 2010.
In Singapore, SingTel Singapore is the leading mobile, broadband and fixed line operator and began offering home entertainment with the launch of mio TV in July 2007. SingTel Singapore has played an integral role in the development of the country as a major communications hub in the region. SingTel Interactive Pte. Ltd., a wholly-owned subsidiary of SingTel, is a shareholder of the OpenNet consortium, which was selected as the NetCo to design, build and operate the passive infrastructure for Singapore’s NGNBN. SingTel Singapore was also appointed as the key sub-contractor of the OpenNet consortium to roll-out the NGNBN passive infrastructure.
In Australia, Optus is the second largest provider of telecommunications services in terms of revenue. It remains Australia’s primary fully integrated fixed and mobile telecommunications competitor to Telstra. As a fully integrated telecommunications provider, Optus delivers a comprehensive range of telecommunications products and services, which include local, long distance and international, mobile and fixed line telephony services, broadband and dial-up internet services, pay TV services, satellite services and converged business telecommunications applications and solutions.
The SingTel Group has investments in key markets throughout the Asia-Pacific region. As a long term strategic investor, the SingTel Group, with its associated and joint venture companies, continues to leverage on its scale in networks and customer reach to grow its business. The SingTel Group has shareholder rights in its Regional Mobile Associates and Joint Venture Companies with Board representation.
Operations outside Singapore accounted for 73 per cent. of the SingTel Group’s proportionate1 revenue and proportionate1 EBITDA for the financial year ended 31 March 2010, respectively.
1 Proportionate presentation is not required by the Generally Accepted Accounting Principles in Singapore (“Singapore GAAP”) and is not intended to replace the financial statements prepared in accordance with Singapore GAAP. However, since the associated and joint venture companies are not consolidated on a line-by-line basis, proportionate information is provided as supplemental data to facilitate a better appreciation of the relative contribution from the SingTel Group’s operations in Singapore, Australia and the regional mobile markets. Proportionate revenue and proportionate EBITDA includes the SingTel Group’s effective interests in the respective associated and joint venture companies’ revenue and EBITDA respectively. EBITDA refers to earnings before interest, taxes, depreciation and amortisation.
100 To serve the needs of multinational corporations, the SingTel Group has 37 offices in 20 countries and territories throughout Asia-Pacific, Europe and the United States as at 31 March 2010, with a global network footprint connecting Singapore to more than 100 countries.
For the year ended 31 March 2010, the SingTel Group’s operating revenue was S$16.87 billion and net profit was S$3.91 billion.
2. Competitive Strengths of the SingTel Group
The SingTel Group believes that it possesses a number of competitive strengths that position it well to execute its business plan and strategies.
Growing mobile penetration in emerging markets and strong competitive position in key markets
The SingTel Group and its Regional Mobile Associates and Joint Venture Companies presently operate across eight markets in Asia Pacific, including Australia, Bangladesh, India, Indonesia, Pakistan, the Philippines, Singapore and Thailand as well as in 15 countries across Africa following Bharti’s acquisition of Zain Africa BV.
The operations in the emerging markets, particularly India and Indonesia, have grown significantly as demand for mobile telecommunications services increased due to a combination of rising affluence, falling network and handset costs and low availability of traditional fixed-line telecommunications infrastructure. The SingTel Group expects to take advantage of continued growth in mobile penetration in these markets, fuelled by population growth and general economic progress.
The SingTel Group and its Regional Mobile Associates and Joint Venture Companies compete from a position of strength in many of the markets they operate in, for example it is the number one or number two mobile operator in the markets of Singapore, Australia, India, Indonesia, the Philippines and Thailand. In an industry where scale is important, the SingTel Group’s market leadership confers significant cost benefits and enhanced profitability.
Operating leverage through group scale and group wide initiatives
Collectively, the SingTel Group and its Regional Mobile Associates and Joint Venture Companies served 293 million mobile customers across the region as at 31 March 2010. The SingTel Group with its Regional Mobile Associates and Joint Venture Companies will continue to leverage their combined scale in networks, customer reach and extensive operating experience to collaborate on marketing, product development and other SingTel Group-wide initiatives.
Together with its Regional Mobile Associates and Joint Venture Companies, the SingTel Group has implemented joint procurement programmes that have lowered infrastructure and equipment costs. Such initiatives have given the SingTel Group and its Regional Mobile Associates and Joint Venture Companies earlier access and exclusivity over popular handsets and mobile devices. The SingTel Group has also collaborated on innovative products and services with its Regional Mobile Associates and Joint Venture Companies across the region.
In the area of technology planning, the SingTel Group and its Regional Mobile Associates and Joint Ventures are conducting a regional trial of LTE technology across Australia, Singapore, Indonesia and the Philippines. The trial will help the SingTel Group and its Regional Mobile Associates and Joint Venture Companies better understand LTE and determine the best approach and strategy for its adoption in their respective local markets. The objective of the trials is to lay the groundwork to establish a regionally compatible LTE network to facilitate growth in the
101 mobile broadband business for the SingTel Group and its Regional Mobile Associates and Joint Venture Companies. This high-speed network will also allow the SingTel Group and its Regional Mobile Associates and Joint Venture Companies to deploy new services across the region quickly, giving customers faster access to the widest selection of mobile service offerings in these markets.
Integrated service offerings enhance customer loyalty and differentiate the SingTel Group from competitors
The SingTel Group’s operations in Singapore and Australia provide a comprehensive range of communications services and solutions, including fixed, mobile, data, internet, ICT, satellite and pay TV. Increasingly, customers have diverse needs for different services and across different locations. The SingTel Group believes the ability to meet customers’ total communications needs differentiates it from pure mobile or internet service providers. Integrated service offerings aim to enhance customer loyalty and provide the SingTel Group with some level of resilience against price competition.
The SingTel Group provides corporate customers with a single service point for a full range of services, solutions and products in multiple destinations, particularly in the Asia-Pacific region. These services are delivered through a global network of submarine cables and points-of- presence (“PoPs”), as well as five wholly-owned and one co-owned satellites. Presently, the SingTel Group is the largest provider of IP-VPN connectivity in the Asia-Pacific region (excluding — Japan2), as well as the largest IT solutions provider in Singapore.
For the consumer customers, the SingTel Group offers bundled services for their individual and home needs, comprising fixed line voice, internet, mobile and pay TV services. To meet the growing demand of consumers who increasingly rely on telecommunications for their work or social activities, the SingTel Group carefully tailors service offerings targeted at different consumer segments. The SingTel Group believes that its understanding of consumer preferences and behaviours allows it to cater effectively to the demand of its customers.
Extensive connectivity and business presence in the region
The SingTel Group has extensive infrastructure and connectivity in the region through its investment in international submarine cables, data centre facilities in the region, global network coverage, IT delivery centres and satellites. To serve its customers, the SingTel Group has 37 global offices in 20 cities around the world with a focus on the Asia-Pacific region. The NCS Group, a wholly-owned subsidiary, also operates in more than 10 countries across the Asia-Pacific and Middle-East regions.
The SingTel Group believes that its extensive network coverage and business presence in the region have enabled it to compete successfully in the ICT services markets, making it a desired solutions partner for corporate customers across Asia.
Strong cash flow and balance sheet with a disciplined approach to investing in growth opportunities
The SingTel Group generates significant cash flows across its businesses. With a strong balance sheet, the SingTel Group also has significant financial flexibility to make further investments.
2 Source: IDC, Fixed-line Telecom Base Data for second half 2009, April 2010.
102 The SingTel Group has a disciplined approach to investments and acquisitions. It continually reviews new investment opportunities in communications and adjacent businesses in Asia and emerging markets, and will be financially prudent in its evaluation of such opportunities. In its investments, the SingTel Group seeks to be a strategic investor with control or significant influence to drive synergies and lift operating performance with the rest of the SingTel Group. The SingTel Group typically seeks Board representation and appropriate rights over the business plan, key management appointments and dividend payment policy.
Experienced management team and regional talent development
The SingTel Group has an experienced management team. Many of its executives have spent many years in the telecommunications industry and possess international experience. The SingTel Group believes it has the management strength and access to talent to grow its existing operations, expand internationally and diversify into new revenue streams.
In addition, the SingTel Group has put in place regional talent management programmes to cross-deploy high-performing executives and groom future leaders. The SingTel Group’s diverse operations across eight markets provide valuable opportunities to expose emerging leaders to a variety of regulatory, economic and operational challenges. The cross-deployments also help to promote best practices from individual operators to the rest of the SingTel Group.
3. Strategy
The SingTel Group’s vision is to be the best multimedia solutions group in the Asia-Pacific region. To achieve this objective, the SingTel Group’s principal strategies are to:
• maintain market leadership position in the Singapore business;
• leverage its scale to drive profitable growth in the Australia business;
• invest in new growth engines to create new revenue streams, including mobile applications and services, content, managed services, integrated ICT services and other solutions;
• differentiate itself through superior customer experience and innovation;
• improve cost structure and drive further efficiencies from existing businesses;
• attract, train and retain talent, and build required skills for future technologies and businesses;
• leverage scale with the regional strategic investments; and
• review new investment opportunities in communications and adjacent businesses in Asia and emerging markets and be financially disciplined in its evaluation of such opportunities.
Singapore Business Strategy
SingTel Singapore is the leading integrated telecommunications service provider in Singapore and has maintained its leading market position amid market liberalisation and increased competition.
SingTel Singapore operates in a fast changing telecommunications landscape, and aims to further strengthen its competitive position and differentiate itself from competitors. To achieve this, it has embarked on a strategy to transform itself from a provider of telecommunications carriage services into a leading integrated multimedia and ICT solutions company.
103 Current initiatives of SingTel Singapore are as follows:
• Continue to lead and shape the telecommunications industry
SingTel Singapore aims to maintain its leading position in key markets and segments including mobile, broadband, domestic and international data.
In the business segment, SingTel Singapore is the leading international IP VPN service provider in Asia-Pacific excluding Japan3, and offers a comprehensive suite of services to cater to organisations’ end-to-end communications needs.
In the consumer segment, with its launch of mio TV in July 2007, SingTel Singapore aims to be the leader in offering quadruple bundle services, comprising mobile, fixed line telephony, broadband and pay TV services. As at 31 March 2010, SingTel Singapore’s total mobile customer base was approximately 3.1 million, representing a mobile market share of approximately 45 per cent. Fixed line market share was approximately 87 per cent. and broadband subscriber market share was approximately 46 per cent.
SingTel Singapore will continue to invest in new capabilities and infrastructure, and develop differentiated services and applications to increase its share of customer spend. For example, SingTel Singapore is the first in the region to conduct a LTE technology trial to showcase multiple next-generation interactive multimedia applications on the move. The 42 Mbps mobile broadband service is scheduled to be commercially available in the later half of 2010. SingTel Singapore also launched AMPed in partnership with Universal Music Group in June 2009, which is the first-of-its-kind mobile social music service in Asia that goes beyond offering unlimited music downloads and daily music news4. AMPed has won the coveted “Best Mobile Music Service” award at the GSMA’s Asia Mobile Awards 2009.
• Delivering integrated multimedia content and communication solutions
SingTel Singapore aims to be one of the largest multimedia content service providers in Singapore. It aims to deliver content-rich services over mobile devices, the personal computer, television and other mediums to increase customer loyalty and usage.
SingTel Singapore is making inroads into pay TV services, with 191,000 mio TV customers as at 31 March 2010, reflecting the positive traction of its mio home bundled plan (bundling of pay TV, fixed broadband and fixed voice) and the broad content offerings.
SingTel Singapore will continue to invest in new content and multimedia initiatives to attract customers. In September 2009, SingTel Singapore secured the exclusive rights to the Barclays Premier League for three years commencing August 2010. It aims to deliver a new social football experience across the computer, television and mobile platforms through its dedicated football channel “mio Stadium”5 that hosts football content like the UEFA Champions League, Europa League (exclusive until May 2012) and the Barclays Premier League. SingTel Singapore also secured exclusive pay TV content from ESPN STAR Sports starting from mid-2010.
3 Source: IDC, Fixed-line Telecom Base Data for second half 2009, April 2010. 4 AMPed customers can access music videos, the latest entertainment news and gossip, as well as pre-album releases. There will also be opportunities for them to meet their favourite stars and interact online with like-minded music fans. The multi-platform service is available on a wide range of 3G handsets across brands. 5 Formerly known as Football Frenzy.
104 • Leveraging telco-ICT convergence to deliver comprehensive end-to-end solutions
SingTel Singapore is the leading international IP VPN service provider in Asia-Pacific excluding Japan6, and offers a comprehensive suite of fully managed ICT services to help meet organisations’ end-to-end communications and IT needs.
Its managed IP VPN services offer one of the largest footprints in Asia, leveraging on its Global Delivery Platform, a network monitoring tool that allows seamless monitoring of network performance across both its own network nodes and partners’ nodes. Companies can utilise voice, video and data communications seamlessly and cost-effectively between different locations, including hard-to-reach Asian destinations.
SingTel Singapore has also launched ICT solutions for the healthcare, education, financial services and transport and logistics industries. Through its investments in IP infrastructure, SingTel Singapore aspires to deliver Asia’s best IP VPN service with the best coverage, network performance, reliability and value.
• Improving cost structure
SingTel Singapore continues to be focused on cost transformational initiatives to improve its cost base — including automating systems and processes based on world-class standards and best practices. It is emphasising a Lean Six Sigma mindset towards managing operational performance, practices and systems.
• Achieve competitive differentiation in customer experience, people and innovation
SingTel Singapore is investing in infrastructure, information systems and its people to develop a distinctive customer service experience. It is developing best-in-class online channels that will enhance delivery of products and services and customer care.
SingTel Singapore is also focused on innovation, in developing unique and differentiated products and services that augment customers’ lifestyle needs.
Australia Business Strategy
Optus is focused on profitable growth, investing in the expansion of its mobile and fixed networks to leverage its existing scale in the Australian telecommunications market. It continues to grow its mobile market share through innovative mobile voice and data offerings, whilst upgrading the reach and capability of its mobile network. In fixed telecommunications services, its focus is in driving traffic onto its own networks via a combination of on-net subscriber acquisition and leveraging its next generation IP network to deliver converged network solutions. Further, in the corporate and government sectors, it continues to provide end-to-end ICT capability.
Current initiatives of Optus are as follows:
• Grow mobile market share
Optus’ mobile subscriber market share was approximately 33 per cent. as at 31 December 20097, making it the second largest mobile carrier in Australia. Optus continues to leverage
6 Source: IDC, Fixed-line Telecom Base Data for second half 2009, April 2010. 7 Based on competitor carrier results as at 31 December 2009
105 its scale in the mobile market, targeting growth through increasing mobile data usage, maintaining wireless broadband customer acquisition momentum and expanding its network.
Optus has a 2G and 3G voice network covering approximately 97 per cent. of the Australian population as at 31 March 2010. Ongoing network investments are being made to grow network capacity and speed capability and to expand 3G network coverage.
• Deliver outstanding customer experience
Optus has a stated vision to deliver competitive differentiation in the Australian market by providing outstanding customer experience.
Optus has historically invested, and will continue to invest in infrastructure, information systems and human resources to maintain a high level of customer service.
Optus continually strengthens its internal processes to improve customer experience. Process redesign priorities are determined from an understanding of what customers value in their interactions with Optus.
Investments in IT capabilities are being leveraged to provide customers with improved services, particularly via the web, including online purchases and self service functions.
• Focus on growing fixed on-net business
Fixed on-net services attract a higher profit margin compared to off-net (resale) fixed line services and also enable Optus to better manage the experience of its customers. Optus intends to continue its strategy of growing on-net traffic with subscriber growth across the consumer, small and medium-sized businesses (“SMB”) and business segments.
Improved on-net margins, along with a more competitive fixed network, allows Optus to compete more effectively in acquiring and retaining these customers.
Consistent with the strategy of focusing on on-net subscriber growth and yield, Optus continues to exit unprofitable consumer fixed resale services and reduce its reliance on off-net services in the business segment.
International Business Strategy
The SingTel Group has significant investments in the region, through its strategic stakes in six regional mobile operators, in India, Indonesia, the Philippines, Thailand, Bangladesh and Pakistan as well as in Africa following Bharti’s acquisition of Zain Africa BV. The Regional Mobile Associates and Joint Venture Companies operate predominantly in emerging markets with large populations and comparatively lower penetration. These investments are key growth drivers for the SingTel Group.
With its operations in Singapore and Australia, and the six regional mobile operations, the SingTel Group and its Regional Mobile Associates and Joint Venture Companies serve approximately 293 million mobile customers as at 31 March 2010.
The SingTel Group continues to review new investment opportunities in communications and adjacent businesses in Asia and emerging markets and review opportunities to increase its stakes in existing investments, while maintaining financial discipline in its evaluation of these opportunities.
106 A summary of investments as at 31 March 2010 is listed below:
Country India Indonesia Philippines Thailand Bangladesh Pakistan Joint Venture/ Bharti Telkomsel Globe AIS PBTL Warid Associate Year of initial 2000 2001 1993 1999 2005 2007 investment Effective 32.0% 35.0% 47.3% 21.3% 45.0% 30.0% shareholding Investment as S$2.23 S$1.93 S$1.02 S$870 S$238 S$1.29 at 31 March billion billion billion million million billion 2010 Market capitalisation —Total S$36.84 NA S$4.10 S$11.01 NANA billion billion billion —SingTel’s S$11.79 NA S$1.94 S$2.34 NANA billion billion billion
NA — denotes not applicable
Map showing the SingTel Group’s presence in the region:
Current initiatives of the International Business operations are as follows:
• Driving benefits from economies of scale
The SingTel Group and its Regional Mobile Associates and Joint Venture Companies benefit from aggregating their business expertise and procurement scale when dealing with third party suppliers and business partners such as handset or device vendors, subscriber identity module (“SIM”) cards suppliers and providers of content, network equipment and infrastructure, and other services.
107 The increased size of the combined group and the larger customer base allow the SingTel Group and its Regional Mobile Associates and Joint Venture Companies to obtain competitive rates, generate significant cost savings and operating efficiencies and shorten time to market for new products, devices or services.
• Exchange of business know-how
The SingTel Group actively provides support to the management of its Regional Mobile Associates and Joint Venture Companies through various initiatives and measures such as the secondment of personnel, appointment of local officers, regular executive-level meetings with its Regional Mobile Associates and Joint Venture Companies, and exchange of technical know-how.
In addition, through its board representation in its Regional Mobile Associates and Joint Venture Companies, the SingTel Group shares its experience, skills, corporate governance guidance and knowledge of the region with such companies. The SingTel Group believes that the regular exchange of business know-how allows companies to pool their expertise, develop better initiatives, save research and development time and costs, and thus reduce the time to market for new products.
• Expanding networks and service offerings
The SingTel Group’s strategic investments enable it to provide integrated connectivity for its customers. Through the provision of integrated services that are carried over the networks of the SingTel Group, including its associated and joint venture companies, the SingTel Group is able to better control the quality of its service offerings as well as offer customised and value-added services to its customers. The SingTel Group initiated and pioneered the Bridge Alliance, Asia-Pacific’s leading mobile alliance that spans 11 countries. Bridge Alliance, an 11-member alliance which includes the SingTel Group and some of its associated and joint venture companies in India, Indonesia, the Philippines and Thailand, provides customers of its members a suite of value-added services including voice and data roaming in the region.
In anticipation of new technologies such as LTE, the SingTel Group recently announced that it will conduct regional trials of LTE together with some of its associated and joint venture companies. By coordinating the network trials, the SingTel Group aims to optimise the resources used, gain better technical insights through knowledge sharing and determine the best approach and strategy for adoption in respective local markets.
• Driving greater collaboration and innovation to further realise operational and financial synergies
The SingTel Group will drive further collaboration that leverages on the scale and strength of its combined 293 million mobile customers. This could be through the co-development of new products and services, or partnering with associated companies or joint venture companies for content or technology solutions. This will also enable the SingTel Group to increase its addressable market and expand into related markets and services for example, mobile remittance, mobile advertising, over-the-air micro prepaid top-up and software-as- a-service.
108 4. Principal Business Groups and Activities
The SingTel Group is structured along three main businesses — Singapore, Australia and International Business. The International Business comprises the SingTel Group’s Regional Mobile Associates and Joint Venture Companies.
The following charts show unaudited pro forma proportionate financial information for the year ended 31 March 2010 which has been derived from the income statements of the SingTel Group and the separate financial statements of the associated and joint venture companies prepared on a statutory basis.
Proportionate* Revenue Proportionate* EBITDA
1% Others 1% Others
Regional Mobile Associates 26% Australia 30% and Joint Regional 46% Venture 42% Mobile Associates Australia Companies and Joint 27% Venture 27% Companies Singapore Singapore
* Proportionate presentation is not required by Singapore GAAP and is not intended to replace the financial statements prepared in accordance with Singapore GAAP. However, since the associated and joint venture companies are not consolidated on a line-by-line basis, proportionate information is provided as supplemental data to facilitate a better appreciation of the relative contribution from the SingTel Group’s operations in Australia, Singapore and the regional mobile markets. Proportionate revenue and proportionate EBITDA include the SingTel Group’s effective interests in the respective associated and joint venture companies’ revenue and EBITDA respectively extracted from their financial statements. EBITDA refers to earnings before interest, taxes, depreciation and amortisation.
Singapore Business
(a) Business Structure
SingTel Singapore provides its customers with a comprehensive range of services, solutions and products that meet their domestic and regional requirements through four main customer-facing business units:
(i) Consumer Group;
(ii) Business Group and SingTel Global Offices (“SGO”);
(iii) NCS Group; and
(iv) Carrier Services Group.
This allows SingTel Singapore to deliver the appropriate services, solutions and customer service that are tailored to meet the needs of each of its key customer segments.
• Consumer Group
The Consumer Group serves the Singapore retail telecommunications market. Its objective is to transform each Singapore household into a SingTel Digital Home by providing a comprehensive range of services and products including mobile voice and data, fixed voice, fixed broadband, wireless broadband and pay TV.
109 • Business Group and SGO
The Business Group and SGO serve the multinational corporations, large domestic corporations, government enterprises as well as small and medium enterprises (“SMEs”) within and outside Singapore. The unit provides its customers with one-stop ICT services ranging from voice, data, internet, managed services and cloud services to professional services to major business cities of the world with a focus in the Asia-Pacific region. With its 37 global offices in 20 cities around the world, the Business Group and SGO provide industry leading ICT solutions and services to business customers in key business cities of the world.
• NCS Group
The NCS Group is an ICT and communications engineering company with about 5,900 staff and operates in more than 10 countries across the Asia-Pacific and Middle East regions. The NCS Group serves government bodies and agencies, multinational corporations and large domestic enterprises in key markets such as Singapore, Hong Kong, China and Australia. Its comprehensive ICT service offerings include IT infrastructure and outsourcing services (including IT facility management, end-device management, business continuity planning and recovery, call centre, data centre management, network integration and IT security), communications engineering, IT consulting, applications development and maintenance, and system integration.
The NCS Group aims to be a significant ICT solutions service provider in the Asia-Pacific region. The acquisition of Singapore Computer Systems Limited (“SCS”) in 2008 provides the NCS Group the operational scale to compete locally and regionally.
• Carrier Services Group
The Carrier Services Group provides a range of wholesale communication services and solutions to local and international telecommunications carriers and other service providers with a suite of voice, data, internet and managed services.
(b) Principal Products and Services
• Mobile services and sale of equipment
SingTel Singapore provides a full suite of mobile services, including voice, Short Message Service (“SMS”), Multimedia Messaging Service (“MMS”), international roaming, data services including wireless broadband, and a wide range of value-added entertainment and information services. Mobile service revenues are supported by sales of mobile handsets and devices. Mobile services are provided on either a postpaid basis with customers receiving a monthly bill or on a prepaid basis with customers electing to prepay for their services. In most cases, postpaid mobile services are bundled with a subsidised handset. With the proliferation and wide variety of smart phones, SingTel Singapore has launched attractive mobile data plans for customers looking to access the internet on the move.
SingTel Singapore’s total mobile subscriber base was approximately 3.1 million as at 31 March 2010. Approximately 52 per cent. of SingTel Singapore’s total mobile subscriber base were postpaid customers. Mobile data services registered robust growth, constituting 34 per cent. of average revenue per mobile customer for the year ended 31 March 2010.As at 31 March 2010, the mobile broadband customer base was
110 approximately 505,000 customers (this includes customers who have a separate data SIM and those who take up a data value-added service).
SingTel Singapore will continue to invest in new mobile capabilities and infrastructure, and focus on differentiated services and applications — it was the first operator in Singapore to launch highly anticipated devices, such as the Apple iPhone, the HTC Dream, commonly known as the Google phone, and the Motorola DEXT. SingTel Singapore also launched AMPed, a revolutionary social music service which won the GSMA’s Asia Mobile Award in 2009.
• Fixed data and internet services for business customers
SingTel Singapore provides a wide range of enhanced international and domestic data, IP and internet solutions to its business customers. Key business products and services offered to its corporate, government, and SME customers include:
— ConnectPlus IP VPN which provides secure global IP connectivity and one of the most extensive IP VPN coverage in Asia and connections to key business cities around the world;
— ConnectPlus IPLC which provides dedicated point-to-point leased line connectivity to over 30 PoPs in 25 countries;
— SingTel Internet Exchange or STIX which provides internet transit services over a highly meshed international internet backbone that spans across Asia, U.S. and Europe;
— Meg@POP IP VPN which provides domestic private IP connectivity;
— MetroE which provides domestic dedicated Ethernet connectivity;
— SingNet Corporate service which provides business internet access services to businesses in Singapore.
With the implementation of NGNBN, SingTel will launch new, innovative, faster speed and higher value fibre services. SingTel Singapore will continue to deploy fibre to support the provision of these new fibre based services to business customers.
• Fixed data and internet services for consumer customers
SingTel Singapore is a major provider of internet services in Singapore with a wide range of competitively priced plans that allow residential customers to access the internet for information, communications and entertainment needs.
SingTel Singapore offers access to the internet via second generation asymmetric digital subscriber line (“ADSL2+”). SingTel Singapore currently also delivers its mio TV services over its ADSL2+ network.
From January 2007, with the launch of the brand “mio”, SingTel Singapore has continually leveraged its presence in residential fixed line to upsell a host of integrated services catering to customers’ needs for voice, internet, pay TV and mobile communications. As at 31 March 2010, SingTel had approximately 191,000 mio TV customers, and approximately 187,000 customers on mio Home (bundling of pay TV, fixed broadband and fixed voice) and mio Plan (bundling of mobile, fixed broadband and fixed voice) bundles.
111 • Fixed voice services (consumer and business)
SingTel Singapore is the largest provider of local and long distance fixed telephony service in Singapore for both personal and business communications needs. SingTel Singapore is the leading player in the country’s fixed-line sector with approximately 87 per cent. market share as at 31 March 2010.
• International telephone services
SingTel Singapore’s international telephone services have connection to over 240 destinations. Other than its IDD Services, SingTel Singapore also offers a full suite of other voice services like WorldConference, Voice over IP (“VOIP”), International Calling Cards, and International Toll-Free Services to serve both the local and regional customers.
SingTel Singapore is the major provider of international telephone services in Singapore for both residential and business customers. Revenue for international telephone service is adversely affected by customers moving towards lower cost international voice services (such as VOIP) as well as the increased “free IDD” plans offered in the market. To remain competitive, SingTel Singapore continues to improve the cost structure of this service by managing the corresponding outpayment and traffic costs.
• ICT services and managed services
SingTel Singapore provides a wide range of fully managed end-to-end ICT solutions, products and services to corporate and government customers enabling customers to outsource their ICT and communications requirements. The managed services include:
— Managed Converged Communications Services;
— Managed Application Performance Services;
— Managed Security Services;
— Managed Network Services;
— Managed Hosting Services;
— Infrastructure-As-A-Service;
— Software-As-A-Service; and
— Enterprise Wide Outsourcing Services.
These services are managed through a single Global Helpdesk and Enterprise Management Centre.
• IT and Engineering services
The NCS Group, with its industry domain knowledge, technical expertise and deployment experience amassed in serving government and large enterprises since 1981, is a leading ICT and communications engineering vendor in Singapore. It seeks
112 to build and enhance its end-to-end ICT solutions and services for its customers. The NCS Group’s key lines of services are:
— Infrastructure Management and Solutions, which provide an end-to-end suite of services such as data centre, business continuity, facilities management, customer call centre service, IT infrastructure and IT security management;
— Business Solutions, which include IT and business process consulting services; applications development and maintenance services including portal solutions; and outsourcing services such as business process outsourcing and applications off-shoring. The NCS Group has global delivery centres in China (Chengdu and Suzhou), Malaysia, and the Philippines; and
— Communications Engineering Services, which are provided through a member of the NCS Group, NCS Communications Engineering Pte. Ltd., provides services such as facilities management, airport systems, distribution services, telecommunications infrastructure, infrastructure managed services, traffic and transport engineering, multimedia and intelligent building technologies.
• Satellite services
With its vast experience in fixed satellite and mobile satellite services, SingTel Singapore is a significant provider inAsia of customised satellite solutions for corporate customers in various industries, such as banking and finance, transportation and logistics, government agencies and non-governmental organisations.
SingTel Singapore’s Fixed Satellite Services C-band beam covers the Asia-Pacific region including the Persian Gulf, the Indian sub-continent, South-East Asia and North Asia. Its Ku-band provides coverage over India, Pakistan, Bangladesh, Malaysia, the Philippines, Taiwan, Thailand, Singapore, Brunei and Indonesia.
Through strategic partnerships with Inmarsat Global Limited, Iridium Satellite LLC and Globalstar, Inc., SingTel Singapore’s satellite business also offers mobile satellite services on a global basis.
(c) Infrastructure and Networks
SingTel Singapore operates a full-service nation-wide telecommunications network. Its extensive infrastructure and facilities backbone include:
• over 1.68 million public switched telephone network (“PSTN”) fixed telephony lines;
• over 865,500 km of fibre within Singapore;
• over 3,000 mobile base stations in Singapore;
• over 3,400 digital subscriber line access multiplexer (“DSLAM”) racks installed across Singapore;
• major facilities within Singapore consisting of 22 exchanges, four satellite earth stations and state-of-the art data centres in nine locations;
• nation-wide 21 Mbps High-Speed Downlink Packet Access (“HSDPA”) coverage;
• ownership of and/or access to more than 18 international submarine cables;
113 • global network coverage to more than 100 countries worldwide including major business markets such as Asia-Pacific, USA, Europe and Middle East; and
• two secured data centre facilities located overseas in Hong Kong and Japan.
• Mobile Network
SingTel Singapore’s mobile customers enjoy superior indoor and outdoor coverage supported by approximately 3,000 base stations in Singapore. With more than 400 roaming networks in more than 200 destinations worldwide, SingTel Singapore offers its mobile customers international roaming coverage.
SingTel Singapore delivers mobile voice and data capability through its 2G and 3G/high speed packet access (“HSPA”) network. SingTel Singapore’s mobile broadband service currently enables customers to enjoy downlink speeds of up to 21.1 Mbps and uplink speeds of up to 5.7 Mbps. SingTel Singapore continues to enhance its mobile broadband network and data offerings and in March 2010, SingTel Singapore announced that its 42 Mbps mobile broadband service will be available in the second half of 2010.
SingTel Singapore’s mobile customers today enjoy wireless access to the internet via Wireless Application Protocol, High-Speed Circuit-Switched Data, General Packet Radio Service (“GPRS”), 3G/HSPA and Wi-Fi in more than 800 wireless hotspots in Singapore.
• Fixed Networks
SingTel Singapore is the leading provider of national telephone services in Singapore, with a fixed line market share of approximately 87 per cent. as at 31 March 2010.
SingTel Singapore has an extensive national fixed line network that serves residential and business premises in Singapore, and an island-wide ADSL2+ network which enables home and corporate customers to connect to the Internet at speeds of up to 25 Mbps downstream and 1 Mbps upstream on a dedicated point-to-point connection. The ADSL2+ network supports retail and wholesale broadband services under the brand names: SingNet BroadBand, SingTel B-access, mio Voice, mio Home and mio TV services.
SingTel Singapore offers business customers, internet service providers, application service providers and content providers a one-stop solution for IP-based services, virtual private networks and high-speed internet access on Meg@POP, an IP-based service platform. In October 2009, SingTel Singapore introduced Meg@POP eLite Access, a new generation high-speed, symmetrical bandwidth fibre service built on a next generation fibre optics network using the Gigabit Passive Optical Network (“GPON”) technology. With its range of bandwidth options from 64 Kbps to 1 Gbps, SingTel Meg@POP seeks to provide full flexibility for customers.
• Data Centres
SingTel Singapore has a network of data centres, with extensive regional points of presence in the Asia-Pacific. It currently has 11 robust and secured data centre facilities located in Asia-Pacific, including nine within Singapore, one in Hong Kong and one in Japan.
114 With the launch of its new Kim Chuan Telecommunications Centre (“KCTC-2”) in Singapore in January 2010, SingTel Singapore currently offers approximately 570,000 square feet of data centre space. KCTC-2 is built to Tier-4 specifications, currently the industry’s most stringent data centre standards for reliability and service availability.
• Submarine Cable Networks
SingTel Singapore’s international submarine cable network provides direct connections from Singapore to more than 100 countries. It is a major investor in many of the world’s submarine cable systems, such as South-East Asia — Middle East — Western Europe 3 Cable Network, South-East Asia — Middle East — Western Europe 4 Cable Network, Asia-Pacific Cable Network, Asia-Pacific Cable Network 2, China — U.S., Japan — U.S. and Southern Cross Cable Network.
In January 2010, SingTel Singapore announced it had signed an agreement to join a consortium to build and operate the new South-East Asia Japan Cable system (“SJC”). SJC is estimated to cost US$400 million and spans 8,300 km, initially linking Singapore, Indonesia, the Philippines, Hong Kong and Japan.
SingTel Singapore has also recently invested in Unity, a Trans-Pacific cable serving as an express link from Japan to Los Angeles, U.S. SingTel and its partners signed an agreement in February 2008 to jointly build the Unity cable system at a cost of US$300 million. A 10,000 km direct cable system linking Japan and Los Angeles, U.S., Unity has a potential design capacity of 7.68 Terabits per second. Recently commissioned in March 2010, it will provide the capacity to support growth in data and Internet traffic between Asia and the United States.
• SingTel Satellite
SingTel Singapore’s satellite business provides end-to-end satellite services through its operation of four teleports in Singapore, three overseas teleports via alliances and a fleet of geostationary satellites. Its fleet of geostationary satellites includes the ST-1 satellite through its 50 – 50 partnership with Chunghwa Telecom and leases of capacity on APSTAR V and 15 other satellites, enabling a strong coverage from Asia-Pacific to Africa and down south to New Zealand, including the Pacific Islands.
SingTel Singapore is currently constructing the ST-2 satellite, which is targeted for launch in 2011 to replace the ST-1 satellite. The ST-2 satellite will offer significantly greater capacity as well as wider coverage which includes emerging markets such as the Middle East. The ST-2 satellite will cater to the demand for fixed and mobile satellite services and IP-based solutions, such as SingTel Singapore’s innovative Office-At-Sea suite of maritime applications.
Australia Business
(a) Business Structure
Optus is the second largest provider of telecommunications services in Australia in terms of revenue. As a fully integrated telecommunications provider, Optus delivers a comprehensive range of telecommunications products and services, which includes local, long distance and international, mobile and fixed line telephony services, broadband and dial-up internet services, pay TV services, satellite services and converged business telecommunications applications and solutions.
115 Optus provides its principal products and services through the following customer-facing units:
• Optus Consumer
Optus Consumer delivers a comprehensive range of services and products to the Australian retail telecommunications market including mobile voice and data, fixed voice, fixed data internet and pay TV services.
• Virgin Mobile
Optus also distributes mobile products and services to the retail Australian telecommunications market using the Virgin Mobile brand. Both mobile voice and data services are provided under the Virgin Mobile brand.
• Optus Business
Optus Business provides advanced communications solutions to corporate and government customers. It offers a comprehensive solution suite across mobile voice and data converged IP VPN telecommunication solutions incorporating fixed voice and data as well as wireless access, call centre solutions, internet and data application management. It has a comprehensive managed services capability as well as being able to deliver on the growing demand for ICT based solutions.
• Optus SMB
Optus SMB provides small and medium-sized businesses in Australia with a suite of fixed line and mobile services and business solutions tailored to meet the needs of smaller organisations.
• Optus Wholesale and Satellite
Optus Wholesale and Satellite provides a range of wholesale communication solutions to other Australian telecommunications carriers, service providers and internet service providers (“ISPs”). Satellite products and services are provided to corporate and government customers and to a lesser extent retail customers through Optus’ satellite fleet and supplemented by capacity acquired from other satellite operators.
(b) Principal Products and Services
• Mobile voice and data services and sale of mobile equipment
Optus is the second largest mobile carrier in Australia, offering a full range of mobile services to consumer, business and wholesale customers via its 2G and 3G enabled network which provides voice coverage to approximately 97 per cent. of the Australian population.
A full suite of mobile services is provided including voice origination and termination, SMS, MMS, international roaming, data services such as wireless broadband, and a wide range of other value-added entertainment and information services. Mobile service revenues are supported by sales of mobile handsets and devices.
116 Optus offers a range of comprehensive and innovative mobile rate plans to address specific customer segment requirements. The range includes capped subscription plans which for a nominated monthly access fee provide the customer with an amount of included value which they can use within an agreed timeframe, normally one month.
Optus’ mobile subscriber base was approximately 8.5 million as at 31 March 2010. Mobile services are provided by Optus on either a postpaid basis with customers receiving a monthly bill or on a prepaid basis with customers electing to prepay for their services. As at 31 March 2010, approximately 49 per cent. of Optus’ total mobile subscriber base were postpaid customers and approximately 51 per cent. were prepaid customers.
Optus has an extensive network of exclusive and non-exclusive outlets. Optus is increasing its distribution outlets outside of metropolitan areas as Optus continues to expand its 3G network into regional Australia. Additionally, prepaid mobile products and services are distributed via a network of over 9,000 participating retail outlets located throughout Australia.
• Fixed voice services to consumer and business customers
Optus is the second largest provider of local and long distance fixed telephony services in Australia. Long distance services include international and national long distance telephony, fixed line to mobile calls, and various value-added services. Residential local telephony services are services provided within geographically defined areas and are regulated non-time based charging services.
Optus operates in the fixed voice telephony market in three ways: (i) in the residential and small business sectors, using its Hybrid Fibre Coaxial (“HFC”) and Unbundled Local Loop (“ULL”) Digital Subscriber Line (“DSL”) networks, (ii) in the residential and small business sectors through resale of services, and (iii) in the enterprise, corporate and government sectors using its Customer Access Network (“CAN”).
Delivery of fixed voice services on the Optus HFC and ULL DSL networks generally attracts a higher gross margin as compared to off-net fixed line services. Those networks also allow more direct control over the customer experience. The margins from the HFC and ULL DSL networks have allowed Optus to deliver innovative subscription-based bundled fixed voice and broadband services. These subscription plans allow an amount of included value for fixed telephony services and a nominated data allowance for broadband usage to be used within an agreed timeframe, which is normally one month.
Optus provides fixed voice services to business enterprises, corporate and government customers for their outbound and inbound call needs. Inbound voice services include freecall and local rate numbers (13, 1300 or 1800) which allow the customer to define and control the rules for distributing incoming calls to the most appropriate answer point. BusinessNet Premier and Evolve Voice services provide customers with all outbound calls and a range of call handling features, using fibre, ULL and Telstra leased access.
• Fixed data and internet services to consumer customers
Optus is a major provider of internet services in Australia with a wide range of competitively priced plans that allow residential customers to access the internet at high speeds for information, communications and entertainment needs. Fixed
117 broadband penetration of Australian households is estimated by industry analysts at 62 per cent. as at 31 December 20098.
• Fixed data and internet services to business customers
Optus provides a wide range of enhanced data and IP solutions and services for its business customers. Key business products and services offered to corporate and government customers include:
— internet access allowing organisations to connect to the internet via Optus’ IP network;
— secure private IP-based Wide Area Network (“WAN”) services, allowing customers to combine voice, video and data applications onto a single network;
— Ethernet services which provide customers with Layer 2 data network connectivity thus allowing customers to connect multiple sites across town or nationally using the simple, cost effective and flexible nature of a protocol for the transmission of packet based data at various speeds from 10 Mbps to 10 Gbps (“Ethernet”); and
— a secure and reliable global WAN connectivity, which offers the flexibility of secure remote access for users on the move or at remote sites through the use of multi-protocol label switching and IP security.
• ICT services and managed services
Optus provides a range of ICT solutions, products and services to corporate and government customers, including:
— a range of products designed specifically for organisations to manage their inbound and outbound customer calls, including special services telephone numbers, call monitoring and routing services and network based intelligent services;
— a fully managed end-to-end service on Multi-Carrier/Vendors including third party voice, data and mobile products and services;
— a scalable range of cost effective hosting solutions which include co-location, managed storage and web-hosting on a fully managed server; and
— professional and managed services for corporate and government customers to assist them to identify, plan, deploy, secure, manage and optimise their technology and communications requirements.
• Wholesale services to other carriers and service providers
Optus Wholesale is a supplier of fixed and mobile voice and data telecommunications services to Australian carriers, service providers, including ISPs, utilising Optus’ network infrastructure. Wholesale products and services include:
8 Based on competitor carrier results as at 31 December 2009.
118 — fixed voice services that allow service providers to provide local, national, fixed to mobile, international calls and Total Access Services (“TAS”) such as 1300 services that provide primary access for customers to make contact with an organisation;
— fixed data and IP products which allow service providers to provide internet access, IP VPN, transportation of voice signals using the IP protocol (“Voice Over IP”) and dedicated or multipoint data transmission services;
— mobile services providing service providers with the ability to on-sell voice and data services including wireless broadband services on Optus’ mobile network; and
— interconnection services that allow other carriers to terminate carrier services into Optus’ network.
• Satellite services
Optus is the leading provider of satellite services in Australia and New Zealand with a fleet of four geostationary satellites and one inclined orbit satellite operating in Ku-band at four geostationary orbital locations, namely 152°E, 156°E, 160°E, 164°E, as at 31 March 2010. The 156°E and 160°E orbital locations are the pre-eminent locations respectively, for the Australian and New Zealand Direct-To-Home broadcast platforms providing both subscription and free-to-air services to over two million locations in Australia and New Zealand.
Optus offers the following satellite services:
— a full suite of broadcast services which delivers broadcast television and backhaul services across Australia and New Zealand for both the free-to-air and subscription television markets;
— IP-based satellite data broadcast solutions that deliver one-way or two-way high-speed data services for internet or distribution of data, audio or video in Australia or internationally;
— handheld or vehicle-mounted mobile satellite services across a coverage footprint from Africa to Australia and its surrounding waters; and
— a range of specialist services, including satellite control, system design, provision and management of telemetry, tracking and command earth stations, provision of transfer orbit services and satellite operations.
(c) Infrastructure and Networks
Optus operates a full-service national telecommunications network. Its extensive technology, infrastructure and facilities backbone includes:
• over 10,000 km of intercity fibre providing connections from Perth through to Cairns;
• approximately 12,000 km of intra-city fibre, of which approximately 60 per cent. is aerial and 40 per cent. is in-ground;
• over 26,000 km of aerial coaxial cable with a footprint that covers approximately 1.4 million households;
119 • over 1,000 DSLAM racks installed in 371 Telstra exchanges;
• major facilities within Australia consisting of 17 exchanges (including one with hosting centre capabilities and one with data centre capabilities), six satellite earth stations and one dedicated hosting centre and data centre;
• approximately 18,000 major buildings connected (via all access types, i.e. fibre, microwave radio, ULL, copper access and leased services from third party providers); and
• 123 points of interconnect with voice service carriers around the country in central business districts (“CBD”), metro and major regional centres.
These networks provide Optus with an advanced technology platform capable of delivering leading products and services.
• Mobile Network
Optus delivers mobile voice and data capability through its 2G and 3G/HSPA network, which, as at 31 March 2010, provides voice coverage to approximately 97 per cent., of the Australian population, over 700,000 square kilometres through over 8,500 base stations, with 4,474 2G and 4,456 3G base stations. The networks supported Optus’ mobile customer base of approximately 8.5 million subscribers as at 31 March 2010.
As at 31 March 2010, Optus’ HSPA network was capable of delivering 7.2 Mbps data speeds to approximately 80 per cent. of the population.
In November 2004, pursuant to a joint venture agreement, Optus Mobile Pty Limited and Vodafone Network Pty Limited agreed to share 3G network and radio infrastructure across approximately 58 per cent. of the Australian population in metropolitan regions. The joint venture utilises co-located sites where each operator has its own equipment as well as shared sites where both operators share a single set of equipment. At co-located sites, capacity is partitioned and independently managed. Each party retains ownership of its own assets. As at 31 March 2010, out of Optus’ 4,456 3G sites, 2,639 sites were under the joint venture agreement.
• Fixed Network
Optus delivers local and long distance telephony, high speed broadband and digital pay TV services over the HFC network which has a footprint that covers approximately 1.4 million households. The HFC extends to Sydney, Melbourne and Brisbane and in general, services standalone dwellings only.
Optus’ ULL DSL network which is deployed in 371 Telstra exchanges delivers fixed voice and ADSL2+ broadband services to both residential and business customers. Optus’ ULL DSL network has a footprint that covers approximately 2.9 million premises. Both the voice and data services are provided via a single high density line card, making service bundling simple. Over 70 per cent. of the 371 exchanges are within the metro areas and provide both residential and business grade services.
Optus directly connects enterprise, corporate and government customers to its fixed transmission network via its CAN. Optus has constructed a CAN in major Australian capital cities. These comprise mainly fibre optic rings in the CBD and metropolitan areas and are supplemented by alternative access methods such as microwave radio and leased lines when required. Customers are able to connect to the CAN through
120 customer premises based equipment and gain access to the products and services offered by Optus Business and Optus Wholesale.
• IP Network
Optus’ networks have been developed for the transport of IP data. These networks make use of Optus’ physical network infrastructure, providing IP connectivity in support of a range of IP based products offered by Optus. These products include internet and intranet access for business and consumer customers as well as virtual IP networks for business customers.
• Satellite Network
Optus operates a satellite network of five satellites, with the D3 satellite launched in August 2009. This satellite network delivers pay TV to over two million households, free-to-air TV to over 115,000 households, video transmission to 600 re-transmission sites for free-to-air broadcasters and 665 free-to-air self-help transmission sites, services approximately 25,000 broadband satellite users and approximately 7,000 mobile satellite users.
International Business
The SingTel Group’s investments in the emerging markets continue to be a significant growth driver for the SingTel Group. The SingTel Group is a long term strategic investor in Bharti Airtel Limited in India, PT Telekomunikasi Selular in Indonesia, Globe Telecom, Inc. in the Philippines, Advanced Info Service Public Company Limited in Thailand, Warid Telecom (Private) Limited in Pakistan and Pacific Bangladesh Telecom Limited in Bangladesh.
(a) Bharti Airtel Limited (“Bharti”)
Bharti is a leading provider of telecommunication services in India with a presence in all the 22 licensed jurisdictions (also known as Telecom Circles) and approximately 128 million customers as at 31 March 2010. Listed on the National Stock Exchange and the Stock Exchange, Mumbai, Bharti is the largest wireless service provider in India. Besides wireless services, Bharti also provides long distance connectivity, voice and/or broadband access delivered through DSL, Direct to Home (“DTH”), IPTV services and an integrated suite of telecommunication solutions to enterprise customers.
The company deploys, owns and manages passive infrastructure pertaining to telecom operations under its subsidiary Bharti Infratel Limited, which also owns 42 per cent. of Indus Towers Limited (“Indus Towers”). Bharti Infratel and Indus Towers are the two top providers of passive infrastructure services in India. Bharti Infratel has towers in 11 Telecom Circles and Indus Towers has a portfolio of towers in 16 Telecom Circles, with four Telecom Circles in common with Bharti Infratel.
On 19 May 2010, Bharti successfully secured 3G spectrum in 13 Telecom Circles at US$2.7 billion. For the Broadband Wireless Access (BWA) spectrum auction which closed on 11 June 2010, Bharti was successful in four Telecom Circles at a cost of US$730 million.
121 Bharti is also present in Sri Lanka and Bangladesh. On 8 June 2010, Bharti announced that it had completed the acquisition of Zain Africa BV based on an enterprise value of US$10.7 billion. With this acquisition, Bharti will expand its international footprint into 15 African countries9 with an aggregated customer base acrossAsia andAfrica of over 180 million. The newly formed Bharti Group will have an estimated combined revenue of over US$12.4 billion and EBITDA of over US$4.7 billion based on the last audited results.
Bharti announced on 21 March 2010 that it had secured the entire debt financing requirement of US$8.3 billion for the acquisition.
(b) PT Telekomunikasi Selular (“Telkomsel”)
Telkomsel is the leading operator of cellular telecommunications services in Indonesia by market share and revenue share. It is 65 per cent. held by PT Telekomunikasi Indonesia Tbk (“Telkom”), the largest full-service telecommunications operator in Indonesia. Telkom is listed on the Indonesia Stock Exchange, the New York Stock Exchange and the London Stock Exchange. As at 31 March 2010, Telkomsel had approximately 82 million mobile customers, representing an estimated mobile market share of 46 per cent.
Telkomsel has the largest network coverage among the cellular operators in Indonesia. It has achieved more than 98 per cent. coverage in Java, Bali, Nusa Tenggara and Sumatra, and approximately 80 per cent. coverage in the Eastern Indonesian Region (including Kalimantan). Besides GSM and 3G, the company also offers GPRS, Wi-Fi and EDGE Technology.
The company offers two prepaid brands — simPATI and Kartu As, and the postpaid kartuHALO service, as well as a variety of value-added services and programs.
(c) Advanced Info Service Public Company Limited (“AIS”)
AIS is the leading mobile operator with the largest network coverage, market revenue and subscriber base in Thailand. It is listed on the Stock Exchange of Thailand and has a range of telecommunications businesses, including mobile GSM, international direct dialing, data communications services, call centre services and sales and distribution of handsets. As at 31 March 2010, AIS had approximately 30 million mobile customers, representing a mobile market share of about 44 per cent.
In Thailand, all mobile operators including AIS operate under concessions granted by TOT Corporation Public Company Limited (“TOT”) and/or CAT Telecom Public Company Limited (“CAT”).
AIS has a 25-year build-transfer-operate (“BTO”) concession granted by TOT, expiring in 2015. AIS also operates an 1800 MHz GSM network through its subsidiary, Digital Phone Co., Ltd. (“DPC”). DPC has a 16-year BTO concession from CAT, expiring in 2013. There is no assurance for AIS and other mobile operators in Thailand, that upon expiry of these concessions, the concessions will be renewed or converted into a telecom licence on terms that are favourable or equivalent to those which apply today, or at all.
AIS continues to maintain its position as the largest network coverage operator in Thailand and its leadership in mobile subscriber share.
9 The countries are Burkina Faso, Chad, Congo Brazzaville, Democratic Republic of Congo, Gabon, Ghana, Kenya, Madagascar, Malawi, Niger, Nigeria, Sierra Leone, Tanzania, Uganda and Zambia.
122 (d) Globe Telecom, Inc. (“Globe”)
Globe is the second largest mobile communications service provider in the Philippines and is listed on the Philippine Stock Exchange. Offering mobile, fixed line and broadband services, Globe had approximately 24 million mobile customers as at 31 March 2010.
In the mobile market, Globe is promoting brand loyalty and stimulating greater usage to grow its share of mobile spend in key customer segments. In the past year, Globe has gained traction in the broadband market with stronger subscriber take-up and higher revenues. Globe had approximately 0.8 million broadband customers as at 31 March 2010.
Globe continues to increase the depth of its network coverage, and expand its broadband footprint and capacity delivered via DSL, 3G network and Wimax to meet the growth momentum in broadband and data services.
(e) Warid Telecom (Private) Limited (“Warid”)
Warid is the fourth largest mobile operator in Pakistan, operating in a five-player market as at 31 March 2010. It launched its services in May 2005 and has licences to operate GSM-mobile services in Pakistan, Azad Jammu and Kashmir, and the Northern areas.
Warid’s total mobile customer base was approximately 16 million as at 31 March 2010, representing a mobile market share of about 17 per cent.
(f) Pacific Bangladesh Telecom Limited (“PBTL”)
PBTL, the only Code Division Multiple Access (“CDMA”) operator in Bangladesh, had a customer base of approximately 2 million as at 31 March 2010 and a network capacity of up to 3.5 million customers. PBTL has launched Evolution-Data Optimised (“EVDO”) services, which are currently available in 5 out of 6 divisions in Bangladesh.
The table below sets out the highlights of the Regional Mobile Associates and Joint Venture Companies:
Joint Venture/ Associate Bharti Telkomsel Globe AIS PBTL Warid Operational highlights as at 31 March 2010 Marketposition #1 #1 #2 #1 #5 #4 Mobilecustomers 128million 82million 24million 30million 2million 16million Marketshare 22% 46% 31%(1) 44% 4% 17%(2) Mobilepenetration 50% 75% 80%(1) 103% 33% 59% Contribution to SingTel Group’s share of post-tax profit for the year ended 31 March 2010 Profit/(loss) 848 682 165 148 (13) (63) S$ million As % of SingTel 22% 17% 4% 4% ** (2%) Group’s underlying net profit
Notes: (1) As at 31 December 2009. (2) Extrapolated using customer figures from October 2009 to February 2010. ** denotes a negligible percentage.
123 5. Employees
As at 31 March 2010, the SingTel Group employed 23,408 full-time and full-time equivalent employees. The SingTel Group also employs temporary employees from time to time.
SingTel Singapore has a collective agreement with the Union of Telecoms Employees of Singapore covering more than 4,000 employees at SingTel Singapore. Optus has entered into a collective agreement with its employees under the Employment Partnership Agreement. Approximately 6,800 employees at Optus are covered by the Employment Partnership Agreement.
6. Intellectual Property
The SingTel Group relies on a combination of patent, trademark, service mark and domain name registrations, copyright protection and contractual restrictions to protect its technologies, brand name and logos, marketing designs and Internet domain names.
SingTel Singapore is the registered owner in Singapore of, amongst others, the trademarks “SingTel”, “Hello!” and “mio Home” as well as the SingTel logo. SingTel Singapore has registered, amongst others, the Internet domain names “singtel.com”, “singnet.com.sg” and “singtelmobile.com”. SingTel Singapore has trademark applications pending in Singapore, amongst others, for the trademarks “SingTel ONEOffice”, “SuperSIM & Device” and the logos for “SINGTEL INNOVATION EXCHANGE” and “SingTel mobilep@y”. SingTel Singapore has been granted patents for “System for Routing Wireless Communications”, “Video Storage System and Method” and “Measuring Usage of Cellular Mobile Telephones”. Further, SingTel Singapore has pending patent applications for “Digital Watermarking”.
Optus owns various registered trademarks including “Optus”, “yes”, the Optus logo, and “MobileSat”. Optus is the registered owner of various Internet domain names including “optus.com.au”, “optusbusiness.com.au” and “optusnet.com.au”.
7. Litigation
Save as disclosed in this Offering Circular (and in particular the sections on “Contingent Liabilities” in the Financial Statements annexed to this Offering Circular) or otherwise announced, the Issuer, SingTel and SingTel’s subsidiaries are not and have not been involved in any legal or arbitration proceedings that may have, or have had during the 12 months preceding the date of this Offering Circular, a significant effect on their financial position and are not aware that any such proceedings are pending or threatened which are material in the context of the issue and offering of the Notes.
8. Selected Financial Information of the SingTel Group
The following tables present selected consolidated financial information of the SingTel Group as at, and for the financial years ended, 31 March 2008, 2009 and 2010. The selected consolidated financial information should be read in conjunction with the SingTel Group’s audited consolidated financial statements and the notes thereto as at, and for the financial years ended, 31 March 2008, 2009 and 2010 which are included elsewhere in this Offering Circular.
124 SingTel Group Financial Year ended 31 March
2008 2009 2010
(S$ million) (S$ million) (S$ million) (audited) (audited) (audited) Income Statement Data: Operatingrevenue...... 14,844 14,934 16,871 OperationalEBITDA...... 4,530 4,431 4,847 OperationalEBITDAmargin...... 30.5% 29.7% 28.7% Share of pre-tax profit of associates(1) ...... 2,559 2,051 2,410 EBITDA(2) ...... 7,089 6,482 7,257 Exceptional items(3) ...... 298 (56) (2) Netprofit...... 3,960 3,448 3,907 Basicearningspershare(Singaporecents) ...... 24.9 21.7 24.6 Underlying net profit(4) ...... 3,681 3,455 3,910 Underlying earnings per share (Singapore cents)...... 23.2 21.7 24.6
Notes: (1) Refers to associated or joint venture companies as defined under Singapore Financial Accounting Standards. (2) Refers to earnings before interest, taxes, depreciation and amortisation and included share of pre-tax profit of associates. (3) Exceptional items for the financial years ended 2008 and 2009 had been restated to include the foreign exchange gains from capital reductions of certain foreign subsidiaries of the SingTel Group. (4) Refers to net profit before exceptional items.
As at 31 March
2008 2009 2010
(S$ million) (S$ million) (S$ million) (audited) (audited) (audited) Balance Sheet Data: Cashandcashequivalents ...... 1,372 1,076 1,614 Othercurrentassets...... 2,678 2,718 3,531 Non-currentassets...... 30,664 29,461 32,807
Total assets ...... 34,714 33,255 37,952
Short-termborrowings(unsecured) ...... 1,874 1,427 1,513 Short-termborrowings(secured)...... * 6 15 Long-termborrowings(unsecured) ...... 5,668 6,048 5,328 Long-termborrowings(secured)...... — 14 23 Otherliabilities...... 6,170 5,260 7,557
Total liabilities ...... 13,712 12,755 14,436
Net assets ...... 21,002 20,500 23,516
Shareholders’equity...... 20,999 20,476 23,493 Minorityinterests...... 3 24 23
Total Equity ...... 21,002 20,500 23,516
* denotes less than S$0.5 million.
125 Review of the SingTel Group’s operating performance for the year ended 31 March 2010 (“FY2010”) compared with the year ended 31 March 2009 (“FY2009”)
The SingTel Group ended FY2010 with double-digit net profit growth of 13 per cent., reflecting strong performance from Singapore, Australia and significant improvement in Telkomsel’s performance. This was achieved amid a cautious economic climate. The SingTel Group outperformed the markets in Singapore and Australia and met guidance for FY2010.
The SingTel Group’s operating revenue grew a strong 13 per cent. to S$16.87 billion and operational EBITDA increased 9.4 per cent. to S$4.85 billion, benefiting from the 8 per cent. strengthening of the Australian Dollar against the Singapore Dollar from a year ago. If the Australian Dollar had remained stable from a year earlier, operating revenue would have been up 8 per cent. and operational EBITDA would have increased 5 per cent.
In Singapore, operating revenue was up 8.1 per cent. despite highly competitive market conditions and the economic slowdown. The increase was driven by strong mobile performance and IT and Engineering revenue which grew significantly by 32 per cent. with full year contribution from SCS Computer Systems Pte. Ltd. (“SCS”), a wholly-owned subsidiary acquired in August 2008, and first-time revenue from the fibre roll-out contract with OpenNet. SingTel Singapore continues to grow its telecommunications and IT businesses, and extend its lead in IP VPN in the region. It is making significant progress in its transformation to become a multimedia services solutions provider with the launch of lifestyle portal, inSing.com, mio Stadium10, AMPedTM, and SingTel Marketplace for business applications. In September 2009, a significant milestone in mio TV was achieved when SingTel Singapore won the rights to the Barclays Premier League matches for three years commencing August 2010 and a suite of ESPN STAR Sports channels.
In Australia, Optus delivered a solid 7.5 per cent. increase in operating revenue on robust mobile performance amid a highly competitive market. Mobile service revenue grew a strong 13 per cent., further strengthening Optus’ position in the Australian market. Optus continued its growth momentum in customer acquisitions led by strong demand for wireless broadband and smartphones, as well as the “Timeless” unlimited plans. Optus’ translated revenue in Singapore Dollars grew 16 per cent. from FY2009.
Despite the higher operational EBITDA, the SingTel Group’s margin fell 1.0 percentage point to 28.7 per cent., reflecting higher mobile acquisition and retention costs on strong customer connections, and higher IT and Engineering revenue mix at SingTel Singapore.
The SingTel Group’s share of associates’ pre-tax profit was up a strong 18 per cent. to S$2.41 billion. Regional currencies were relatively stable from a year ago. The growth was boosted by a strong turnaround in Telkomsel’s operational performance as well as fair value gains on mark-to-market valuations of the associates’ foreign currency liabilities compared to significant fair value losses in FY2009.
Consequently, the SingTel Group’s EBITDA grew 12 per cent. to S$7.26 billion and would have grown by 9 per cent. if the Australian Dollar and regional currencies had remained stable from a year ago.
The SingTel Group recorded additional impairment provision of S$260 million on Warid and fair value loss of S$61 million on certain available-for-sale investments, and these exceptional charges were partially offset by a realised foreign exchange gain of S$327 million arising from a loan repayment by a wholly-owned investment holding company of the SingTel Group. These one-off items do not impact the cash flows of the SingTel Group.
10 Formerly known as Football Frenzy.
126 The SingTel Group’s underlying net profit grew 13 per cent. to S$3.91 billion or 24.6 Singapore cents per share in FY2010.
Review of the SingTel Group’s operating performance for the year ended 31 March 2009 (“FY2009”) compared with the year ended 31 March 2008 (“FY2008”)
For FY2009, the SingTel Group delivered resilient operational results amid the economic slowdown. Both Singapore and Australia achieved strong growth in revenues and increased operational EBITDA. The robust business performance, however, had been negatively impacted by the weakness in the Australian Dollar and regional currencies. The SingTel Group’s operating revenue was stable at S$14.93 billion as compared to S$14.84 billion in FY2008. If the Australian Dollar and regional currencies had remained stable from FY2008, the SingTel Group’s operating revenue would have posted strong growth of 9 per cent. and the underlying net profit would have been up by 3 per cent.
In Singapore, despite the slowing domestic economy and competitive market conditions, operating revenue grew a robust 13 per cent., including first-time revenue contribution from SCS. The revenue increase was driven by strong growth in the Data, Mobile Communications and IT and Engineering businesses. SingTel Singapore achieved market share wins in the key and growth market segments. With its extensive reach in key Europe and U.S. business cities, SingTel Singapore became the leading international IP VPN service provider in Asia-Pacific11. Despite keen competition, SingTel Singapore extended its mobile market leadership and was the only operator to introduce the much-awaited Apple iPhoneTM 3G in Singapore during the year.
In Australia, operating revenue in Australian Dollars rose 7.2 per cent., driven by strong mobile performance and growth in customer base. The robust revenue growth was achieved despite Optus’ managed exit from the unprofitable consumer fixed resale market. Optus gained strong mobile customer additions, underpinned by increased demand for wireless broadband, the new “Timeless” unlimited plans and iPhone 3G where it captured the majority share of iPhone activations in Australia since its successful launch during the year. Revenue in Singapore Dollars, however, was down 5.6 per cent. due to a steep 12 per cent. depreciation of the Australian Dollar from a year ago.
Operational EBITDA for the SingTel Group was down 2.2 per cent. to S$4.43 billion and margin fell 0.8 percentage point to 29.7 per cent. The declines reflected higher mobile selling costs including iPhone 3G subsidies, which had driven strong customer growth, as well as higher content costs for mio TV in Singapore and increased contributions from the IT and Engineering businesses.
The SingTel Group’s share of associates’ pre-tax profit was S$2.05 billion, down 20 per cent. as the steep depreciation of the regional currencies eroded earnings reported in Singapore Dollars. Excluding the currency translation impact, the associates’ pre-tax profit contribution would have been down 9 per cent. attributable mainly to weaker performance from Telkomsel and share of full year losses from Warid which focused on network coverage roll-out. Overall pre-tax contribution was also impacted by the associates’ fair value losses on mark-to-market valuations of their foreign currency denominated liabilities, namely those of Bharti, Telkomsel and Warid.
Consequently, EBITDA was down 8.6 per cent. to S$6.48 billion, but would have been flat if the Australian Dollar and regional currencies had remained stable from a year ago.
The SingTel Group recorded goodwill impairment charges of S$330 million for its associates, Warid and PBTL. These were partially offset by an exceptional gain of S$225 million from Bharti’s dilution of its equity interest in a subsidiary and a realised foreign exchange gain of S$84 million
11 Source: IDC’s Asia/Pacific Semiannual Fixed-Line Telecom Services Tracker, First Half 2008 report.
127 arising from the capital reduction of a wholly-owned investment holding company of the SingTel Group. These one-off items do not impact the SingTel Group’s cash flow.
In FY2009, the SingTel Group recognised total tax savings of S$64 million arising from the one percentage point reduction in the Singapore corporate tax rate to 17 per cent. and the introduction of certain tax measures in the Singapore Budget 2009. Of this S$64 million, S$49 million related to the write-back of deferred tax liability provided at the higher tax rate in prior years had been classified as exceptional tax credit.
Net profit declined 13 per cent. to S$3.45 billion, or 21.7 cents per share. Excluding exceptional and other one-off items, the SingTel Group’s underlying net profit declined 6.1 per cent. to S$3.46 billion, or 21.7 cents per share.
Review of the SingTel Group’s Operating Performance for the year ended 31 March 2008 (“FY2008”) compared with the year ended 31 March 2007 (“FY2007”)
For FY2008, the SingTel Group reported strong earnings growth on the back of double-digit revenue growth. Operating revenue reached S$14.84 billion, up 11 per cent. from S$13.38 billion in FY2007, driven by SingTel Singapore and a strong Australian Dollar.
In Singapore, operating revenue increased 11 per cent., underpinned by strong growth in the Mobile Communications, Data and Internet and IT and Engineering businesses as the domestic economy grew a robust 7.7 per cent. in 2007. Despite operating in a highly competitive market, SingTel Singapore maintained its leadership in the postpaid mobile and broadband markets. During the year, SingTel Singapore regained its leadership in the prepaid mobile segment with record prepaid net additions as it strengthened its distribution presence, particularly in the foreign worker segment. mio TV was launched in July 2007 and though this new service is not expected to make a significant contribution to revenue and earnings in the initial years, it allowed SingTel Singapore to offer a comprehensive suite of services to customers.
In Australia, operating revenue in Australian Dollars rose 3.8 per cent. but was up 11 per cent. when translated to the Singapore Dollar due to the appreciation of the Australian Dollar by 7 per cent. from a year ago. The revenue increase was despite the mandated reduction in average interconnect mobile termination rates by the Australian Competition and Consumer Commission (“ACCC”) as well as Optus’ exit from the unprofitable consumer fixed-line resale market.
With the strong revenue growth, operational EBITDA for the SingTel Group was up 5.8 per cent., to S$4.53 billion. Margin, however, declined 1.5 percentage points to 30.5 per cent. as a result of higher mobile selling costs from strong customer additions. The decline also reflected the impact of a number of key strategic initiatives which incurred costs this year such as the launch and content costs for mio TV in Singapore.
The SingTel Group’s share of associates’ pre-tax profit was S$2.56 billion, up 24 per cent. from FY2007. This strong performance was driven largely by Bharti and Telkomsel, which reported solid operating results with rapid customer expansion.
Consequently, EBITDA was up 5.9 per cent. to S$7.09 billion.
Exceptional gains totalled S$298 million in FY2008, boosted by the SingTel Group’s share of Bharti’s gain of S$153 million on the sale of a minority stake in a subsidiary to investors and net realised foreign exchange gains of S$195 million arising from the share capital reductions of certain foreign subsidiaries.
128 Net finance expense for the SingTel Group was S$372 million, up 11 per cent. from FY2007 attributable to lower interest income from the declines in both interest rates and average cash balances.
Tax expense was S$1.17 billion, compared to S$909 million in FY2007 when the SingTel Group benefited from a one-off tax credit of S$38 million from a write-back of deferred tax liability related to prior years as a result of reduction in Singapore’s corporate tax rate.
Net profit was up 4.8 per cent. to S$3.96 billion, or 24.9 cents per share. This was despite the cessation of recognition of IDA compensation income of S$337 million with effect from 1 April 2007. Excluding IDA compensation, exceptional and other one-off items, the SingTel Group’s underlying net profit increased a robust 14 per cent. to S$3.68 billion, or 23.2 cents per share.
9. Regulatory Environment
Singapore Regulatory Environment
The following is a general summary of the Singapore laws and regulations relating to provision of telecommunications and broadcasting services in Singapore. It is for general information only, and does not purport to be an exhaustive or comprehensive description of those laws and regulations.
(a) Overview of telecommunications and broadcasting services in Singapore
The provision of telecommunications services in Singapore is regulated primarily under the Telecommunications Act, Chapter 323 of Singapore (the “Telecommunications Act”). The Info-communications Development Authority of Singapore (the “IDA”) is the regulatory authority principally responsible for administering the Telecommunications Act as well as regulating and promoting the info-communications industry in Singapore. The IDA is a statutory board that was established under the Info-communications Development Authority of Singapore Act, Chapter 137A of Singapore.
The provision of broadcasting services in Singapore is regulated primarily under the Broadcasting Act, Chapter 28 of Singapore (the “Broadcasting Act”). The Media Development Authority of Singapore (the “MDA”) is the regulatory authority principally responsible for administering the Broadcasting Act as well as regulating and promoting the broadcasting industry in Singapore. The MDA is a statutory board that was established under the Media Development Authority of Singapore Act, Chapter 172 of Singapore.
A licensee who is aggrieved by a decision of the IDA or MDA may appeal to the Minister.
(b) Telecommunications Licensing Framework
Upon full liberalisation of the telecommunications market on 1 April 2000, the IDA released guidelines with respect to the licensing framework under the Telecommunications Act to facilitate the entry of new players and the expansion of the scope of operations by existing licensees. There is no pre-determined number of licences to be awarded.
The IDA issues the following two broad categories of licences:
(i) Facilities based licence (“FBO”); and
(ii) Services based licence (“SBO”).
129 Further authorisation may be required from other government agencies for the deployment or provision of certain types of systems or services. FBOs are individually licensed while SBOs may be individually licensed or class-licensed. A class licence is a licensing scheme where the terms and conditions are published by the IDA. Anyone who provides the services within the scope of the class licence is required to comply with the terms and conditions of the class licence and register with the IDA.
There are no foreign equity limits imposed on any licensee, but a licensee must be a company incorporated under the Companies Act. Under the terms of their licences, FBOs must obtain prior approval from the IDA for any change in their management and board of directors whilst SBOs are required to notify the IDA.
(c) Broadcasting Licensing Framework
The licensable broadcasting services include free-to-air television and radio services, subscription television and radio services, specialised interest television and radio services and video-on-demand services.
Internet Service Providers and Internet Content Providers are subject to a class licence and are required to comply with the Broadcasting (Class Licence) Notification.
The Broadcasting Act imposes specific obligations on broadcasting licensees in terms of management control and shareholding control. Under the Broadcasting Act, the chief executive officer of a broadcasting company (which includes a holding company of a broadcasting company) and at least half of its directors shall be citizens of Singapore, unless otherwise approved by the MDA. No person or party is allowed to be a substantial shareholder of a broadcasting company without first obtaining the approval of the Minister. In addition, no person or party is allowed to become a 12 per cent. controller or an indirect controller of a broadcasting company without first obtaining the approval of the Minister. In addition, no person shall, without the prior consent of the MDA, receive any fund from any foreign source for the purposes of financing, directly or indirectly, wholly or in part, any broadcasting service owned or operated by any broadcasting company.
(d) Material Licences held by SingTel Singapore
SingTel Singapore has a 25-year licence expiring in 2017 to provide a range of telecommunications services including public basic international and domestic telecommunications services, cellular services and wireless broadband access services. It also has a 20-year licence expiring in 2021 to provide 3G services and a 10-year nationwide subscription television licence expiring 2017. SingTel Singapore is required to obtain the IDA’s approval prior to any assignment of its FBO licence.
SingTel Singapore has also obtained other necessary licences as well as spectrum rights in Singapore for the following purposes:
(i) to use radio frequency spectrum to operate cellular, 3G and wireless broadband services;
(ii) to hire, sell, offer or possess for sale any registered equipment or telecommunication equipment;
(iii) to offer public internet access and virtual private network services; and
(iv) to utilise the Singapore-registered satellite orbital slot and establish, install and maintain the satellite system.
130 SingTel Singapore will need to renew its existing licences when these expire. There is no assurance that SingTel Singapore will be able to renew these licences or renew these licences on terms that are the same or equivalent to those that currently apply.
SingTel Singapore is also designated a Public Telecommunication Licensee under Section 6 of the Telecommunications Act and is required to comply with specific obligations, including the provision of Basic Telephone Services to any person in Singapore who requests the provision of such a service.
(e) Code of Practice for Competition in the Provision of Telecommunication Services (the “Telecom Competition Code”)
The Telecom Competition Code sets out the IDA’s regulatory principles and contains provisions relating to duties of licensees to their end-users, required co-operation amongst licensees to promote competition, interconnection, infrastructure sharing, sector-specific competition rules and enforcement mechanisms. The IDA has the authority to review and amend the Telecom Competition Code and to grant exemptions from or suspend the Telecom Competition Code.
Classification of FBOs
The Telecom Competition Code distinguishes between licensees that are subject to competitive market forces (non-dominant licensees) and those whose conduct is not constrained adequately by competitive market forces (dominant licensees). The IDA will classify a licensee as either a dominant licensee or non-dominant licensee.
A licensee would be classified as dominant if:
(i) it is licensed to operate facilities used for the provision of telecommunication services in Singapore that are sufficiently costly or difficult to replicate such that requiring new entrants to do so would create a significant barrier to rapid and successful entry into the telecommunication market in Singapore by an efficient competitor; or
(ii) it has the ability to exercise significant market power in any market in which it provides telecommunication services pursuant to its licence.
A dominant licensee must comply with special requirements set out in the Telecom Competition Code although there are procedures by which a dominant licensee can seek reclassification or an exemption from these special requirements. The IDA has designated SingTel and StarHub Cable Vision Limited as dominant licensees since September 2000. SingTel has been granted an exemption from dominant licensee obligations in the retail international telephone services for residential and business markets, wholesale international telephone services, international managed data services, international IP transit services, satellite-based international data services, terrestrial IPLC services and backhaul services.
Neither Singapore Telecom Mobile Pte Ltd (“SingTel Mobile”), SingNet Pte Ltd (“SingNet”), nor any other SingTel subsidiary, associated company, or joint venture is a dominant licensee.
Duties to End-Users under the Telecom Competition Code
Licensees must include in their service agreements with their business and residential end-users certain provisions such as compliance with minimum quality of service standards, accurate and timely billing, fair dispute resolution procedures and protection of end-user service information.
131 In addition, dominant licensees are required to provide telecommunications services, upon reasonable request, on an unbundled basis, on prices, terms and conditions that are just, reasonable and non-discriminatory, and pursuant to tariffs approved by the IDA. Prior to offering any new end-user telecommunications service or promotion or modifying an existing telecommunications service or promotion, dominant licensees must file a tariff with the IDA and obtain the IDA’s written approval. The tariff must embody the prices and terms and conditions of the offering. The Telecom Competition Code sets out the procedure that the IDA will use to assess a dominant licensee’s tariffs.
Interconnection Obligations under the Telecom Competition Code
• Minimum interconnection duties
In order to ensure seamless any-to-any communication throughout Singapore, FBOs and SBOs that use switching or routing equipment to provide telecommunication services to the public are required to satisfy the minimum interconnection duties set out in the Telecom Competition Code (“Minimum Interconnection Duties”). The IDA will allow non-dominant licensees to interconnect, without the IDA’s prior approval, on any terms agreed between the non-dominant licensees, so long as they satisfy the Minimum Interconnection Duties. The Telecom Competition Code also specifies additional obligations that licensees must fulfil even in the absence of an interconnection agreement, such as publicly disclosing its network interfaces (necessary to allow the deployment of telecommunication services and equipment that can interconnect and inter-operate with its network), complying with mandatory technical standards, facilitating number portability and rejecting certain discriminatory preferences.
• Interconnection with dominant licensees
The Telecom Competition Code also sets out the interconnection obligations of dominant licensees. A licensee that seeks to interconnect with a dominant licensee (“Requesting Licensee”), can choose any of three options in order to enter into an interconnection agreement. First, the Requesting Licensee can accept the provisions specified in the dominant licensee’s Reference Interconnection Offer (“RIO”) which is developed by the dominant licensee and has been approved by the IDA. Second, the Requesting Licensee can “opt-in” to an existing interconnection agreement between the dominant licensee and any similarly situated licensee. Third, the Requesting Licensee can seek to negotiate an individualised interconnection agreement with the dominant licensee.
Subject to certain provisions, SingTel’s RIO (which is publicly available on the IDA’s website), provides that the prices, terms and conditions contained in any interconnection agreements arrived at by accepting the RIO will be effective for three years from the date the IDA approves the RIO.
The Telecom Competition Code contains detailed requirements regarding the terms that a dominant licensee must include in its RIO and also detailed procedures. It also contains detailed requirements regarding the negotiation process for an individualised interconnection agreement; to the extent an issue in dispute arising from the negotiation for an individualised interconnection agreement is not addressed by the RIO, the IDA will have full discretion to impose whatever solution it deems appropriate (even if neither licensee advocates that solution).
132 Once an interconnection agreement between two licensees becomes effective, the IDA will not involve itself in the implementation of the interconnection agreement. When there is a dispute arising out of implementation of their interconnection agreement with a dominant licensee, licensees are required to apply the dispute resolution provisions that are commonly provided for in their interconnection agreement. If the licensees are unable to resolve the dispute, they may (i) agree to a binding arbitration, mediation or seek relief from a court of competent jurisdiction, or (ii) refer the dispute to the IDA and the IDA, at its discretion, may impose a binding resolution on the licensees.
Infrastructure Sharing under the Telecom Competition Code
The Telecom Competition Code permits an FBO licensee to request the right to share infrastructure controlled by another FBO licensee. The FBO licensees must first attempt to negotiate a voluntary sharing agreement. If they are unable to do so, the requesting FBO licensee may ask the IDA to make a determination as to whether the infrastructure must be shared — either because it constitutes Critical Support Infrastructure (as defined in the Telecom Competition Code) or because the IDA concludes that sharing it would serve the public interest. The Telecom Competition Code designates certain infrastructure that FBO licensees must share at cost-based prices — such as masts, poles and towers.
Competition Rules under the Telecom Competition Code
The Telecom Competition Code sets out rules that preclude licensees from engaging in anti-competitive conduct. A dominant licensee must not abuse its market position in a manner that unreasonably restricts competition. The Telecom Competition Code prohibits licensees from entering into agreements that unreasonably restrict competition and sets out a framework under which the IDA will assess the permissibility of such agreements. Licensees are prohibited from entering into certain types of agreements, such as price fixing arrangements or group boycotts. The permissibility of a licensee entering into other agreements, such as joint purchasing or production ventures, will be assessed based on each agreement’s likely or actual impact on competition. In addition, licensees are subject to a prohibition on engaging in unfair methods of competition such as false advertising or unnecessarily degrading the quality of a competitor’s service.
Changes in Ownership and Consolidations involving Designated Telecommunication Licensees
Each FBO licensee must notify the IDA for changes in ownership or shareholding of at least 5 per cent. but less than 12 per cent. and obtain the IDA’s prior approval for change in ownership or shareholding of more than 12 per cent. The Telecom Competition Code provides that the IDA will not approve an application by a FBO licensee for either (i) assigning, transferring, subletting or otherwise disposing its rights, duties and privileges under its licence to any other entity or (ii) implementing a change in its ownership or shareholding in connection with a proposed merger, acquisition or similar transaction, where the IDA determines that the proposed merger or consolidation is likely to unreasonably restrict competition in any telecommunications market within Singapore.
Enforcement
The IDA may enforce the provisions of the Telecom Competition Code by initiating an enforcement action either on its own initiative or in response to a request filed by a third party. Such actions must be initiated within two years after the date on which the alleged contravention occurred. In enforcing the provisions of the Telecom Competition Code, the IDA may, among others, issue warnings, directions or orders to cease and desist. The IDA
133 may also impose financial penalties and suspend or terminate a licensee’s licence. While reserving the right to impose financial penalties of up to S$1 million, the IDA will consider all relevant aggravating or mitigating factors in order to ensure that any financial penalty imposed is proportionate to the contravention.
Quality of Service Standards
The IDA regulates the performance of service operators by setting the quality of service standards. Service operators must submit quarterly reports regarding their service quality to the IDA. The IDA also conducts surveys to monitor customer satisfaction and to obtain consumer feedback on how services may be further improved. Based on these findings, service operators are instructed by the IDA to correct their areas of weakness. The findings are also used to fine-tune the IDA’s performance quality standards. Non-compliance with quality of service standards is punished by monetary fines.
(f) Code of Practice for Market Conduct in the Provision of Mass Media Services (“Media Market Conduct Code”)
The Media Market Conduct Code sets out the MDA’s regulatory principles and contains provisions relating to duties of licensees to their end-users, required co-operation amongst licensees to promote competition, sector-specific competition rules and enforcement mechanisms. The MDA has the authority to review and amend the Media Market Conduct Code and to grant exemptions from or suspend the Media Market Conduct Code.
Regulated Persons
The Media Market Conduct Code distinguishes between Regulated Persons that are able to act without significant competitive restraint from its competitors (dominant licensees) and others (non-dominant licensees). Dominant licensees are specified in the Media Development Authority (Regulated Persons) (Dominant and Non-Dominant Positions) Notification 2003.
In considering whether a Regulated Person is in a dominant position, the MDA shall have regard to whether that Regulated Person has significant market power in any relevant media market.
A dominant licensee must comply with special requirements set out in the Media Market Code although there are procedures by which a dominant licensee can seek reclassification or an exemption from these special requirements. The MDA has designated licensees within the MediaCorp group, licensees within the Singapore Press Holdings group and StarHub Cable Vision Limited as dominant licensees.
None of SingTel, its subsidiaries (including SingTel Mobile and SingNet) and the SingTel Group’s associated and joint venture companies is currently a dominant licensee under the Media Market Conduct Code.
Public Interest Obligation of Regulated Persons and Certain Affiliates
Free-to-air television broadcasters and radio broadcasters must broadcast specified events of national significance. Designated Video and Newspaper Archive Operators must take reasonable and effective action to make available to providers of Mass Media Services or Ancillary Media Services the contents of its archives on reasonable prices, terms and conditions. The MDA will also take measures to enhance the ability of the public to access certain programmes from Free-to-Air Television Licensees with its Anti-Siphoning guidelines
134 outlined in the Media Market Conduct Code. Pursuant to a revision to the Media Market Conduct Code on 12 March 2010, subscription television licensees are required to make their exclusive content (acquired on or after 12 March 2010) available for cross carriage by nationwide subscription television licensees with effect from 1 September 2010.
Regulated Persons’ Duties to their Customers
Regulated Persons must comply with minimum regulatory requirements designed to ensure that they provide their customers with quality service and accurate and timely bills, whilst not using customer information for unauthorised purposes. These obligations include certain provisions such as compliance with minimum quality of service standards, accurate and timely billing, procedures to dispute charges and protection of end-user service information.
In addition, dominant licensees are required to provide mass media services upon reasonable request, provide fair access to programme lists and provide access to advertising capacity.
Competition Rules under the Media Market Conduct Code
A Regulated Person must not engage in unfair methods of competition. Specific practices that are prohibited include the use of mass media services to disseminate false and misleading claims, degrading the availability or quality of the service of another Regulated Person, or raising the other Regulated Person’s costs, providing false and misleading information regarding its Mass Media Service to another Regulated Person and engaging in predatory price cutting. Regulated Persons are also prohibited from entering into certain types of agreements, such as price fixing arrangements or group boycotts. The permissibility of a licensee entering into other agreements, such as joint purchasing or production ventures, will be assessed based on each agreement’s likely or actual impact on competition.
Consolidations involving Regulated Persons
The Media Market Conduct Code provides that the MDA will not approve an application by a Regulated Person for a consolidation, that is, a merger, acquisition, take-over or other similar transaction that results in two entities that were previously independent economic entities becoming, as a practical matter, a single economic entity.
Enforcement
The MDA may enforce the provisions of the Media Market Conduct Code by initiating an enforcement action either on its own initiative or in response to a request filed by a third party. Such actions must be initiated within two years after the date on which the alleged contravention occurred. In enforcing the provisions of the Media Market Conduct Code, the MDA may, among others, issue warnings, directions or orders to cease and desist. The MDA may also impose financial penalties and suspend or terminate a licensee’s licence. While reserving the right to impose financial penalties of up to S$1 million, the MDA will consider all relevant aggravating or mitigating factors in order to ensure that any financial penalty imposed is proportionate to the contravention.
(g) Discretionary powers of the Minister under the Telecommunications Act
Under the Telecommunications Act, the Minister has certain discretionary powers, for example, the Minister may direct a public telecommunication licensee to undertake and
135 provide such telecommunication services and facilities as may be necessary for aeronautical, maritime, meteorological, governmental, defence or other purposes or on the occurrence of any public emergency, in the public interest or in the interests of public security, national defence, or relations with the government of another country. The Minister may issue directions to the IDA or any telecommunications licensee which may include provisions for the prohibition or regulation of such use of telecommunications in all cases or of such cases as may be considered necessary; provisions for the taking of, the control of or the usage for official purposes of, all or any such telecommunication system and equipment; and provisions for the stopping, delaying and censoring of messages and the carrying out of any other purposes which the Minister thinks necessary.
(h) Recent Developments
NGNBN
The NGNBN is the wired network of the Next Generation National Info-communications Infrastructure (“Next Gen NII”), a project under the government’s Intelligent Nation 2015 (“iN2015”) master plan.
The NGNBN’s industry structure consists of three layers:
(i) NetCo, which operates at the first layer, is responsible for the design, build and operation of the passive infrastructure, which includes the dark-fibre network and ducts;
(ii) OpCo, which operates at the second layer, will provide wholesale network services over the active infrastructure, comprising switches and transmission equipment; and
(iii) the retail service providers, which form the third layer, will offer services over the NGNBN to end-users, including businesses and consumers.
Pursuant to an open NGNBN NetCo Request-for-Proposal (“RFP”) process, the OpenNet consortium (which includes SingTel Singapore) was selected as the NGNBN NetCo on 26 September 2008. OpenNet comprises SingTel Interactive Pte. Ltd., Axia NGNetworks Asia Pte. Ltd., SPH Net Pte. Ltd. and SPT Net Pte. Ltd. As the NGNBN NetCo, OpenNet will design, build and operate the passive infrastructure of the network. OpenNet will offer OpCos fibre connections into residential and non-residential premises. The IDA will provide a grant of up to S$750 million to the NGNBN NetCo in support of the network roll-out.
The OpenNet consortium’s proposal included the formation of an independent asset company (“AssetCo”) that will own and control only the relevant underlying passive infrastructure assets that are used to support OpenNet’s fibre network deployment. These underlying assets, which include central office space, ducts and manholes will be transferred from SingTel Singapore to AssetCo. AssetCo will be established within 24 months of OpenNet’s Contractual and Financial Close (“CFC”) as a business trust and SingTel Singapore has agreed to reduce its unit holdings in the AssetCo to less than 25 per cent., within 60 months of OpenNet’s CFC subject to SingTel Singapore obtaining relevant approvals. OpenNet achieved CFC in April 2009. Further, SingTel Singapore has agreed that the management and operations of AssetCo will be undertaken by a trustee-manager, which will be an FBO licensee.
Pursuant to an open NGNBN OpCo RFP process, a Singapore company was selected as the NGNBN OpCo on 3 April 2009.
136 SingTel Singapore as well as other companies may design, build and operate their own NGNBN OpCo, subject to approval from the IDA.
In April 2010, OpenNet commenced commercial operations. SingTel Singapore has executed the OpenNet ICO to acquire wholesale services from OpenNet.
Next Generation Interactive Multimedia, Applications and Services Project (“Project NIMS”)
The IDA and MDA have initiated the Project NIMS to address the issue of delivering interactive video-based services (interactive multimedia, applications and services) over the NGNBN by the industry, community and government. The IDA has set out their immediate and long term goals for achieving a NIMS Common Featured Set Top Box as well as the proposed approaches for realising the goals. The IDA and MDA are now consulting on the feasibility of the approaches.
Mandatory Cross Carriage of Exclusive Content
On 12 March 2010, as part of ongoing efforts to enable and maintain fair market conduct and effective competition in the media industry, the MDA revised the Media Market Conduct Code to include a Public Interest Obligation to enable mandatory cross carriage of exclusive content in the pay TV market. The new Public Interest Obligation requires subscription television licensees to make their exclusive content (acquired on or after 12 March 2010) available for cross carriage by nationwide subscription television licensees with effect from 1 September 2010. The MDA is consulting with key industry players (including SingTel Singapore) on the implementation details and the MDA may fine-tune the implementation details after reviewing feedback from the industry.
Spectrum Allocation
The IDA has issued a public consultation in relation to the allocation framework for fourth generation (4G) mobile communication systems. The IDA has not determined the final framework, including matters relating to timing.
In July 2010, the IDA issued its decision and explanatory memorandum on the allocation framework for the remaining 2 x 15 MHz paired 3G spectrum. The 3G spectrum will be made available to interested parties, in three lots of 2 x 5 MHz paired spectrum each. Existing mobile telecommunication operators will have a cap of two 3G spectrum lots, whilst new entrants will have no cap. The Reserve Price is S$20 million per 3G spectrum lot (inclusive of goods and services tax). The IDA will use a simultaneous multiple rounds auction format. The Spectrum Rights will have duration of 11 years and expire together with the existing 3G Spectrum Rights on 31 December 2021.
The IDA will issue the auction rules in July 2010, with Applications and Initial Offers (if any) expected to be submitted by August 2010. The IDA expects that any allocation will be no later than November 2010.
Roaming
The IDA and the Malaysian Communications and Multimedia Commission (“MCMC”) are seeking feedback from the mobile telecommunication operators in both countries on a proposal that will allow consumers in Singapore and Malaysia to enjoy lower roaming charges when they make or receive voice calls or SMS when travelling between both countries.
137 Australia Regulatory Environment
The following is a general summary of the Australian laws and regulations relating to the provision of telecommunications services in Australia. It is for general information only, and does not purport to be an exhaustive or comprehensive description of those laws and regulations.
The Australian telecommunications market was opened up to competition on 1 July 1997. At that time, telecommunications specific provisions were introduced to the Trade PracticesAct 1974 (the “TPA”). These provisions were designed to provide a counter balance to Telstra’s position as the vertically integrated incumbent which had a dominant position in the telecommunications market. Given its ubiquity, Optus and other carriers continue to rely on access to Telstra’s fixed network. These regulatory developments have facilitated Optus and other new entrants to compete and take market share from Telstra in most telecommunications segments.
These provisions require Telstra to provide access to key input services. The ACCC is given specific powers to declare access services and, through an arbitration process, to set the terms and conditions for access to those services in the event that these cannot be commercially agreed. The ACCC is also given broad powers to investigate and take action against anti- competitive conduct.
Since 1997, the regulatory regime has been adjusted, largely to refine the powers of the ACCC. The recent announcement by the current government of Australia (the “Australian Government”) on the National Broadband Network indicates it is considering regulatory reforms that will influence how access to fixed line voice and broadband services is regulated. See also “Recent Developments” below.
(a) Overview
The regulatory regime is principally set out in the Telecommunications Act 1997 (the “TCA”) and Part XIB and Part XIC of the TPA. Key regulatory issues are dependent on the delegated powers of the Australian Minister for Broadband, Communications and the Digital Economy (the “Australian Minister”), the ACCC and the Australian Communications and Media Authority (“ACMA”).
(b) Obligations on Optus
Whilst the competition regulations seek to level the playing field in a market dominated by Telstra, many of those same regulations also apply equally to Optus. For example, Parts XIB and XIC of the TPA which set out the competition and access framework are carrier neutral. Optus offers a range of Declared Services. The terms of access to these Declared Services can be set by the ACCC in the absence of a commercial agreement.
Optus is also subject to a range of compliance regulations covering technical standards, consumer protection, service standards and privacy matters, amongst others.
(c) Access and Interconnection Declared Services
The ACCC is responsible for declaring services pursuant to Part XIC of the TPA, which sets out a telecommunications industry-specific access regime. This regime applies to those services which have been declared by the ACCC (“Declared Services”) for example:
(i) domestic PSTN originating access (“PSTNOA”);
(ii) domestic PSTN terminating access (“PSTN TA”);
138 (iii) mobile terminating access service (“MTAS”);
(iv) transmission capacity (except links between mainland capital cities and some routes between capital cities and regional centres) on various bandwidths;
(v) unconditioned local loop services (“ULLS”) allowing access seekers use of unconditioned wires which connect customer premises;
(vi) line sharing service (“LSS”) allowing an access seeker to supply broadband services to customers while the access provider supplies voice services to the customer;
(vii) local carriage services (“LCS”) (except in CBD areas of Sydney, Brisbane, Adelaide, Melbourne and Perth); and
(viii) wholesale line rental (“WLR”) (except in CBD areas of Sydney, Brisbane, Adelaide, Melbourne and Perth).
Whilst the declaration provisions are usually carrier and technology neutral and may apply to all carriers and carriage service providers, in practice some Declared Services apply only to Telstra.
Terms and conditions of access
The regulatory regime implements a “negotiate-arbitrate” model. Access seekers and access providers are encouraged to reach commercial arrangements for the supply of Declared Services. If, however, an agreement cannot be reached, Part XIC of the TPA confers power on theACCC to determine the terms and conditions of access to the Declared Service which are in dispute, having regard to specified criteria such as the long term interests of end-users. The ACCC has also published pricing principles and issued Model Terms and Conditions (price and non-price) for Declared Services such as ULLS, PSTN OA, PSTN TA and LCS.
The ACCC has also issued a series of papers on pricing principles, indicating the methodology that the ACCC would be likely to adopt when arbitrating a dispute.
An access provider may also lodge an access undertaking with the ACCC, setting out the standard terms and conditions on which it will supply access to a Declared Service. The ACCC may accept or reject the undertaking, having regard to specified criteria such as the long term interests of end-users, the interests of those who have a right to access the service, the direct costs of providing the access service, the legitimate business interests of the access provider and the operational, technical and efficiency aspects of access. If the undertaking is found to be reasonable and accepted, the ACCC must then arbitrate access disputes in a manner consistent with the accepted undertaking.
Facilities access
The TCA also contains a regime requiring carriers to provide other carriers with access to certain facilities such as exchanges, pillars, ducts and towers. If the parties are unable to agree upon the terms and conditions of access, they will be determined by an arbitrator or, if the parties cannot agree on an arbitrator, by the ACCC. The ACCC has also made a facilities access code governing access to mobile towers and underground facilities, with which carriers must comply.
139 (d) Competition Rules
The ACCC has been given specific power under Part XIB of the TPA to regulate anti-competitive conduct in breach of the competition rule. Under the competition rule, a carrier or carriage service provider with a substantial degree of power in a telecommunications market must not take advantage of that power with the effect, or likely effect, of substantially lessening competition in that or another telecommunications market.
If, after the competition notice has been issued, the carrier or carriage service provider continues to engage in the conduct, any person, including competitors, may bring proceedings in the Australian Federal Court to seek an injunction, fines or compensation for the damage suffered.
(e) Carrier Licences and Service Provider Rules
A carrier licence is required to own most transmission infrastructure which is used for the provision of telecommunications services to the public. This includes fixed network links, base stations used to supply mobile telephony, fixed radio communications transmitters and satellites. No carrier licence is required to own infrastructure such as switches, operational support systems, databases and internet servers. Breach of a licence condition by a body corporate is subject to a penalty of up to A$10 million for each contravention.
While service providers are not required to be licensed or registered, they are required to comply with the service provider rules which involve compliance with the telecommunications regulatory regime as set out in the TCA and other legislation, including any determinations made by the ACMA. Breach of a service provider rule by a body corporate is subject to a penalty of up to A$10 million for each contravention.
(f) Customer Service Guarantee
Optus is required to comply with the Telecommunications (Customer Service Guarantee) Standard 2000 (No. 2) (“CSG Standard”), which is administered by ACMA under the Telecommunications (Consumer Protection and Service Standards) Act 1999. The CSG Standard imposes on carriage service providers specific performance standards and compensation payment requirements with respect to the connection, fault rectification and making of appointments for the supply of standard fixed telephone services to consumers and small business customers. A carriage service provider is required to provide financial compensation to a customer for not meeting a performance standard. Exemptions are available in specified circumstances.
(g) Universal Service Obligation
Telstra is the national universal service provider and the general digital data service provider. As such it is required to ensure that the standard telephone services, payphones and other services prescribed by the Australian Minister are reasonably accessible to all Australians on an equitable basis, wherever they reside or carry on business.
All carriers, including Telstra and Optus, are required under the universal service obligation arrangements to contribute to, or subsidise, the costs of providing telecommunications services in loss making areas, mainly in rural Australia. Contributions to the subsidy are based on each carrier’s share of the total national pool of eligible revenue and are determined by the Australian Minister.
140 (h) Spectrum Licences
The Australian Government adopts a policy of pro-actively managing the use of spectrum. The use of spectrum requires a licence and spectrum licences are allocated to users by ACMA from time to time via auction, tender or by allocation for a pre-determined price or negotiated price. Limits may also be imposed upon the amounts of spectrum Optus or other bidders may purchase.
Access to spectrum is of critical importance to Optus in order to support its business of providing mobile voice and broadband services. Optus currently holds spectrum in the 900 MHz range under an Apparatus licence which is renewed annually. This spectrum supports both Optus’ 2G and some of its 3G network services. Optus also holds 15-year spectrum licences in the 1800 and 2100 MHz bands. Unlike Apparatus licences, Spectrum licences are issued for fixed terms and Optus’ spectrum licences for the 1800 and 2100 MHz bands expire in 2013 and 2017, respectively. Optus will need to renew its existing licences when these expire. There is no assurance that Optus will be able to renew these licences on terms that are equivalent to those that apply today or at all.
On 5 February 2010, Optus announced it has agreed to acquire spectrum licences for 10 MHz of paired spectrum in the 2100 MHz band from 3G Investments (Australia) Pty Limited, a wholly-owned subsidiary of Qualcomm Incorporated. Following approval of the purchase by the Foreign Investment Review Board and the ACCC, the spectrum has been registered to Optus by ACMA. Following this acquisition, Optus has doubled its 2100 MHz paired spectrum holdings in the eight capital cities from 10 MHz today to 20 MHz. The licences expire in 2017.
Furthermore, current uses of the spectrum continue to grow as new services are continually being developed. Optus may also need to access additional spectrum to support both generic growth and the development of new services. It is anticipated that new spectrum will become available when the transition from analogue to digital television services is progressively completed by the end of 2013, whereby some radiofrequency spectrum will be available for other uses as new digital TV services can be delivered using less spectrum than analogue services. However, there is no assurance that Optus will be able to access such spectrum on favourable terms or at all.
Recently, however, the Australian Government provided some insight into how it will address license reissue. In an announcement on 3 March 2010, the Australian Government set out that it will:
(i) invoke the public interest criteria to re-issue expiring spectrum licences to existing holders; and
(ii) negotiate the price of re-issue with individual licence holders.
Decisions, however, around pricing and timing for spectrum licence reissue are yet to be confirmed by the Australian Government.
(i) Recent Developments
National Broadband Network
On 7 April 2009, the Australian Government announced its plans to build a National Broadband Network (“NBN”) a core pledge in its election manifesto. The key details of the announcement are:
(i) the NBN will be built and operated by a new company specifically established by the Australian Government to carry out this project;
141 (ii) the network will:
• connect homes, schools and workplaces with optical fibre (fibre to the premises “FTTP”), providing broadband services to Australians in urban and regional towns with speeds of 100 Mbps;
• use next generation wireless and satellite technologies that will be able to deliver 12 Mbps or more to people living in more remote parts of rural Australia;
• provide fibre optic transmission links connecting cities, major regional centres and rural towns;
• be Australia’s first national wholesale-only, open access broadband network;
• be built and operated on a commercial basis by a company established at arm’s length from Australian Government and involve private sector investment; and
• be expected to be rolled-out, simultaneously, in metropolitan, regional, and rural areas;
(iii) the preliminary estimate is that the enhanced NBN network will cost up to A$43 billion;
(iv) the Australian Government will be the majority shareholder of this company, but significant private sector investment in the company is anticipated;
(v) the Australian Government will make an initial investment in this company but intends to sell down its interest in the company within 5 years after the network is built and fully operational, consistent with market conditions, and national and identity security considerations; and
(vi) to turn its vision into action the Australian Government will immediately:
• commence an implementation study to determine the operating arrangements, detailed network design, ways to attract private sector investment for roll-out early 2010, and ways to provide procurement opportunities for local businesses;
• fast-track negotiations with the Tasmanian Government, to begin the roll-out of a FTTP network and next generation wireless services in Tasmania as early as July;
• implement measures to address ‘black spots’ through the timely roll-out of fibre optic transmission links connecting cities, major regional centres and rural towns;
• progress legislative changes that will govern the national broadband network company and facilitate the roll-out of fibre networks, including requiring greenfields developments to use FTTP technology from 1 July 2010;
• make an initial investment in the network of A$4.7 billion; and
• commence a consultative process on necessary changes to the existing telecommunications regulatory regime.
The Australian Government has subsequently established the NBN Company (“NBN Co”). The roll-out of the network has also commenced in Tasmania.
142 On 4 December 2009, the Government announced that it had separately awarded a contract to a company in Australia to construct, operate and maintain backbone transmission links in respect of the first regional locations for its A$250 million regional “black spots” transmission initiative. The Government has also recently released the implementation study report, which was prepared by McKinsey/KPMG. The study makes a number of recommendations designed to assist the Government in the delivery of the NBN. The Australian Government released exposure drafts of two Bills for consultation on 24 February 2010: one dealing with the governance arrangements to apply to NBN Co and another setting out certain access terms to apply to NBN Co.
Reform of the existing regulatory framework
On 15 September 2009, the Australian Minister, Senator Stephen Conroy, announced fundamental reforms to existing telecommunications regulations.
The key features of the reforms are measures to:
(i) address Telstra’s high level of integration to promote greater competition and consumer benefits;
(ii) streamline and simplify the competition regime to provide more certain and quicker outcomes for telecommunications companies;
(iii) strengthen consumer safeguards to ensure services standards are maintained at a high level; and
(iv) remove redundant and inefficient regulatory red-tape.
The legislation has been introduced to Parliament and is awaiting approval of the Senate.
NBN Co/Telstra Heads of Agreement
On 20 June 2010, the Australian Government announced that Telstra and NBN Co had entered into a non-binding Financial Heads of Agreement. The Agreement between NBN Co and Telstra, worth an expected net present value of A$9 billion as estimated by Telstra, provides for:
• the reuse of suitable Telstra infrastructure, including pits, ducts and backhaul fibre, by NBN Co as it starts to roll-out its new network; and
• the progressive migration of customers from Telstra’s copper and pay-TV cable networks to the new network to be built and operated by NBN Co.
The payments by NBN Co to Telstra are to be made over a number of years as the roll-out progresses.
In support of the Agreement, the Australian Government also announced a number of public policy reforms to support the transition to NBN. It will:
• establish a new entity, USO Co with Commonwealth funding of A$50 million in 2012-13 and 2013-14, increasing to A$100 million per annum thereafter. USO Co will assume responsibility for most of Telstra’s Universal Service Obligations for the delivery of standard telephone services, payphones and emergency call handling from 1 July 2012. Any remaining funding that USO Co requires will be contributed by industry, as it is now with final arrangements subject to industry and stakeholder consultation;
143 • provide A$100 million to Telstra to assist in the retraining and redeployment of Telstra staff that will be affected by this very significant reform to the structure of the telecommunications industry; and
• require NBN Co to be the wholesale supplier of last resort for fibre connections in greenfield developments from 1 January 2011.
Telstra has estimated in its announcement that in combination, the Agreement with NBN Co and the public policy reforms will deliver it a post-tax net present value of approximately A$11 billion.
The Australian Competition and Consumer Commission will review the competition aspects of this agreement as envisaged in the Telecommunications Competition and Consumer Safeguards Bill, which the Government has indicated that it still hopes to pass to provide greater certainty to industry.
Telstra, NBN Co and the Commonwealth agencies will now seek to negotiate detailed Definitive Agreements, which is expected to take some months. When these negotiations are concluded, the Definitive Agreements will be put to Telstra’s shareholders and the Government, for final approval.
144 CAPITALISATION
The following table shows the consolidated capitalisation of the SingTel Group as at 31 March 2010.
Table 1 As at 31 March 2010
(S$ million) Short term borrowings Unsecuredbonds...... 578 Unsecuredbankloans...... 935 Securedfinanceleaseliabilities ...... 15
Long term borrowings Unsecuredbonds...... 4,497 Unsecuredbankloans...... 831 Securedfinanceleaseliabilities ...... 23
Total borrowings...... 6,879
Shareholders’ equity Sharecapital...... 2,616 Reserves ...... (2,205) Retainedprofits...... 23,082
23,493
Total capitalisation and borrowings ...... 30,372
Note: Material changes between 1 April 2010 to 30 June 2010:
(i) the SingTel Group made net repayments of S$413 million of bank loans and US$393.8 million of notes due in June 2010; (ii) the SingTel Group received S$600 million from the issue of Singapore dollar notes and HK$1 billion from the issue of notes under Optus’ C2 billion Euro Medium Term Note Programme; and (iii) other than consolidated net profits earned for the quarter and the debt movements disclosed above, there has been no material change to the consolidated capitalisation and borrowings of the SingTel Group since 31 March 2010.
145 MANAGEMENT
Board of Directors
SingTel is required by its articles of association to have at least two Directors. A Director must retire from office at the thirdAnnual General Meeting (“AGM”) after the Director was elected or last re-elected. A retiring Director is eligible for re-election by SingTel’s shareholders at the AGM.
In addition, a Director appointed by the Board to fill a casual vacancy, or appointed as an additional Director, may only hold office until the next AGM, at which time he/she will be eligible for re-election by shareholders. If at any AGM, less than three Directors would retire pursuant to the requirements set out above, the additional Directors to retire at that AGM shall be those who have been longest in office since their last re-election or appointment.
Mr Chumpol NaLamlieng
Mr NaLamlieng, 63, is a non-executive and independent Director of SingTel. He was appointed a Director on 13 June 2002 and Chairman on 29 August 2003. Mr NaLamlieng was last re-elected as a Director on 25 July 2008.
Mr NaLamlieng is a member of the Board of Directors of The Siam Cement Public Co., Ltd. (“Siam Cement”). He was President of Siam Cement for 13 years before stepping down in December 2005. His career with Siam Cement spans more than 30 years.
Mr NaLamlieng is also a non-executive Director of Siam Commercial Bank Public Co., Ltd. He was a non-executive Director of British Airways Plc from November 2005 to July 2009.
Mr NaLamlieng was conferred the Royal Decoration, Knight Grand Commander (Second Class, Higher Grade) of the Most Illustrious Order of Chula Chom Klao, Thailand in May 2002 and the Officier de l’Ordre National du Me´rite, France in July 2004. He holds a Bachelor of Science (Mechanical Engineering) from the University of Washington, U.S. and a Master of Business Administration from Harvard Business School, U.S.
Mr Graham John Bradley AM*
Mr Bradley, 61, is a non-executive and independent Director of SingTel. He was appointed a Director on 24 March 2004 and was last re-elected on 25 July 2008.
Mr Bradley is a professional company director and is also involved in various philanthropic pursuits. He practised law for six years in Australia and U.S. before joining McKinsey & Company in 1978. He was a Senior Partner of McKinsey & Company from 1984 to 1991, National Managing Partner of Blake Dawson from 1991 to 1995, and Chief Executive Officer of Perpetual Limited from 1995 to 2003.
Mr Bradley is Chairman of HSBC Bank Australia Limited, Stockland Corporation Limited, Boart Longyear Limited and Po Valley Energy Limited. He is also a Director of Brandenburg Ensemble Limited and a Director and President of the Business Council of Australia. He is the former Chairman of Film Finance Corporation Australia Limited, Garvan Research Foundation and Sydney Community Foundation and a former Director of MBF Australia Limited and Queensland Investment Corporation.
Mr Bradley holds a Bachelor of Arts and a Bachelor of Laws from The University of Sydney and a Master of Laws from Harvard Law School.
* Member of the Order of Australia.
146 Ms Chua Sock Koong
Ms Chua, 52, is an executive and non-independent Director of SingTel. She was appointed a Director on 12 October 2006 and was last re-elected on 24 July 2009.
Ms Chua joined SingTel in June 1989 as Treasurer and was promoted to Chief Financial Officer (“CFO”) in April 1999. She held the positions of Group CFO and CEO (International) from February 2006 until 12 October 2006, when she was appointed Deputy Group CEO. Ms Chua was appointed Group CEO on 1 April 2007.
Ms Chua sits on the Boards of Bharti Airtel Limited, Bharti Telecom Limited and key subsidiaries of the SingTel Group. She is also a member of the Singapore Management University Board of Trustees, the Casino Regulatory Authority, the Public Service Commission and the Corporate Governance Council of the Monetary Authority of Singapore. She was previously a Board member of JTC Corporation.
Ms Chua holds a Bachelor of Accountancy (First Class Honours) from the University of Singapore. She is a Certified Public Accountant with the Institute of Certified Public Accountants of Singapore and a CFA charterholder.
Mrs Fang Ai Lian
Mrs Fang, 60, is a non-executive and independent Director of SingTel. She was appointed a Director on 7 August 2008 and was last re-elected on 24 July 2009.
Mrs Fang has been the Chairman of Great Eastern Holdings Ltd since April 2008, as well as Chairman of its insurance subsidiaries in both Singapore and Malaysia. Prior to that, she was with Ernst & Young for over 30 years, where she was appointed Managing Partner in 1996 and Chairman in 2005.
Mrs Fang is a director of Banyan Tree Holdings Limited, MediaCorp Pte Ltd, Metro Holdings Limited and Oversea-Chinese Banking Corporation Limited. She is also the Chairman of the Charity Council and the Tax Academy of Singapore and President of the Home Nursing Foundation and the Breast Cancer Foundation. She was previously a Board member of the Public Utilities Board and International Enterprise Singapore.
Mrs Fang qualified as a Chartered Accountant in London in 1973 and is a Fellow of the Institute of Chartered Accountants in England and Wales.
Mr Heng Swee Keat
Mr Heng, 49, is a non-executive and independent Director of SingTel. He was appointed a Director on 4 July 2003 and was last re-elected on 27 July 2007.
Mr Heng is the Managing Director of the Monetary Authority of Singapore. He is also Chairman of The Institute of Banking and Finance.
Mr Heng has served in various government departments. He joined the Singapore Administrative Service in 1997 and was appointed Principal Private Secretary to the Senior Minister from 1997 to 2000. He was appointed Deputy Secretary at the Ministry of Trade and Industry in 2000 and Chief Executive Officer of the Trade Development Board in 2001. He was Permanent Secretary at the Ministry of Trade and Industry from 23 October 2001 to April 2005.
Mr Heng was conferred the Public Administration Medal (Gold) at the Singapore National Day Awards 2001. He holds a Bachelor of Arts from the University of Cambridge, UK and a Master of Public Administration from Harvard University, U.S.
147 Mr Heng is due to retire by rotation on 30 July 2010 and has given notice to SingTel that he does not wish to be re-elected to office.
Mr Dominic Chiu Fai Ho
Mr Ho, 59, is a non-executive and independent Director of SingTel. He was appointed a Director on 28 November 2007 and was last re-elected on 25 July 2008.
Mr Ho is the founder and a partner of HOPU Investment Management Co., Ltd. and a Director of Hang Lung Properties Limited and the Hong Kong Mercantile Exchange.
Mr Ho joined KPMG U.S. in Houston in 1975 and became a partner in 1985. He was transferred to Beijing, China to set up KPMG’s practice in 1984 and resided in China until 1989 when he was assigned to Hong Kong. Mr Ho became the China firm’s Senior Partner based in Beijing in 2000 and was elected Chairman of KPMG in China and Hong Kong SAR in April 2003. He retired in April 2007.
Mr Ho holds a Bachelor of Business Administration and a Master of Science in Accountancy from the University of Houston. He is a member of the American Institute of Accountants and a member of the Hong Kong Institute of Certified Public Accountants.
Mr Simon Claude Israel
Mr Israel, 57, is a non-executive and non-independent Director of SingTel. He was appointed a Director on 4 July 2003 and was last re-elected on 27 July 2007.
Mr Israel is Chairman of the Singapore Tourism Board and Asia Pacific Breweries Limited, and an Executive Director of Temasek Holdings (Private) Limited. He is also a Director of CapitaLand Limited and Neptune Orient Lines Limited.
Mr Israel was Chairman of Asia Pacific of Danone Asia, and a member of the Executive Committee of Group Danone before stepping down in June 2006. He held various positions in Sara Lee Corporation in the Asia Pacific region, including Country Manager/Zone Manager for Indonesia, the Philippines, the South Pacific and Thailand from 1974 to 1991, before becoming President (Household & Personal Care), Asia Pacific from 1992 to 1996.
Mr Israel is a former Director of Britannia Industries Ltd, Danone Asia Pte Ltd, Danone Food & Beverages India Pvt Ltd, Fraser and Neave Limited, Frucor Beverages Group Limited, Griffins Foods Pte Ltd, Hangzhou Wahaha Food Co. Ltd., PT Tirta Investama, Wuhan Dongda Brewery Co. Ltd, Wuhan Euro Dongxihu Brewery Co. Ltd, Wuhan Xingyingge Brewery Co. Ltd, Yakult Honsha Co., Ltd and Yeo Hiap Seng Ltd.
Mr Israel holds a Diploma in Business Studies from The University of the South Pacific.
Mr John Powell Morschel
Mr Morschel, 67, is a non-executive and independent Director of SingTel. He was appointed a Director on 14 September 2001 and was last re-elected on 27 July 2007.
Mr Morschel is the non-executive Chairman of Australia and New Zealand Banking Group Limited and a non-executive Director of CapitaLand Limited and Tenix Group Pty. Ltd. Prior to his present appointment, he was an Executive Director and then Managing Director and Chief Executive of Lend Lease Corporation Limited.
Mr Morschel was Chairman of Rinker Group Limited, CSR Limited and Leighton Holdings Limited. He is also a former Director of Westpac Banking Corporation, Rio Tinto plc and Rio Tinto Limited.
148 Mr Morschel holds a Diploma in Quantity Surveying from The University of New South Wales. He is a Fellow of the Australian Institute of Company Directors and a Fellow of the Australian Institute of Management.
Mr Morschel is due to retire by rotation on 30 July 2010 and has given notice to SingTel that he does not wish to be re-elected to office.
Mr Kaikhushru Shiavax Nargolwala
Mr Nargolwala, 60, is a non-executive and the Lead Independent Director of SingTel. He was appointed a Director on 29 September 2006 and Lead Independent Director on 13 May 2009. He was last re-elected on 24 July 2009.
Mr Nargolwala joined Credit Suisse in January 2008 and is the Chief Executive Officer of Credit Suisse Asia Pacific and a member of the Executive Board.
Mr Nargolwala was a Group Executive Director of Standard Chartered PLC before he stepped down on 5 September 2007. Prior to that, he was the Group Executive Vice President and Head of Asia Wholesale Banking Group for Bank of America, headquartered in Hong Kong. Mr Nargolwala was a non-executive Director of Tate & Lyle PLC from December 2004 to December 2007. He was also a non-executive Director of the Asia Pacific Region Board of Visa International until October 2007.
Mr Nargolwala holds a Bachelor degree in Economics (First Class Honours) from the University of Delhi, India. He is a Fellow of the Institute of Chartered Accountants in England and Wales.
Mr Ong Peng Tsin
Mr Ong, 47, is a non-executive and independent Director of SingTel. He was appointed a Director on 1 June 2009 and was last re-elected on 24 July 2009.
Mr Ong is Chairman of InfoComm Investments Pte Ltd and a Director of Banean Pte Ltd. He is a member of the Board of the National Research Foundation, a member of the Board of Trustees of the Singapore University of Technology and Design and a member of COMPASS (Community and Parents in Support of Schools).
Mr Ong was the founder and Chairman of Encentuate, a company providing enterprise digital identity systems. IBM acquired Encentuate in 2008. Prior to starting Encentuate, Mr Ong was the founder and Chairman of Interwoven Inc., a leading provider of content infrastructure. Before Interwoven, Mr Ong was co-founder and chief architect of Electric Classifieds, Inc., the creators of Match.com and held various engineering and management roles at Illustra (now IBM Informix), Sybase Inc., and Gensym Corporation. He is a former Director of InfoComm Development Authority of Singapore.
Mr Ong holds a Bachelor of Science in Electrical Engineering from the University of Texas, U.S. and a Master of Science in Computer Science from the University of Illinois, U.S.
Mr Deepak Shantilal Parekh
Mr Parekh, 65, is a non-executive and independent Director of SingTel. He was appointed a Director on 31 May 2004 and was last re-elected on 27 July 2007.
Mr Parekh is the Chairman of Housing Development Finance Corporation Limited (“HDFC”) in India. He joined HDFC in 1978, was its Managing Director from 1985 and Executive Chairman from 1993 until he assumed his present office in January 2010.
149 Besides HDFC and its subsidiaries, Mr Parekh is on the Boards of several leading corporations across various sectors. He is the non-executive Chairman of GlaxoSmithKline Pharmaceuticals Limited, Infrastructure Development Finance Company Limited, Lafarge India Ltd. and Siemens India Limited. He is also on the Boards of Castrol India Limited, Hindustan Unilever Limited, Mahindra & Mahindra Limited, Indian Hotels Company Limited and WNS Global Services Pvt. Ltd. Mr Parekh has also been nominated by the Civil Aviation Ministry to the Board of Airports Authority of India. Mr Parekh was a Director of Satyam Computer Services Limited from 12 January 2009 to 17 July 2009.
Mr Parekh holds a Bachelor of Commerce from Sydenham College of Commerce & Economics, Mumbai. He is a Chartered Accountant and a member of The Institute of Chartered Accountants in England and Wales.
Mr Parekh is due to retire by rotation on 30 July 2010 and has given notice to SingTel that he does not wish to be re-elected to office.
Mr Nicky Tan Ng Kuang
Mr Tan, 51, is a non-executive and independent Director of SingTel. He was appointed a Director on 12 March 2002 and was last re-elected on 25 July 2008.
Mr Tan currently manages nTan Corporate Advisory Pte Ltd, a boutique firm specialising in corporate finance and corporate restructuring. He is also a Director of Fraser and Neave Limited and a member of its Audit Committee.
Mr Tan was a Partner and Head of Global Corporate Finance at Arthur Andersen, Singapore and ASEAN region, from 1999 to 2001. Prior to that, he was a Partner and Head of Financial Advisory Services at Price Waterhouse, Singapore and Chairman of Financial Advisory Services at PricewaterhouseCoopers, Asia Pacific region.
Mr Tan is a Chartered Accountant and a member of The Institute of Chartered Accountants in England and Wales. He is also a Certified Public Accountant and a member of the Institute of Certified Public Accountants of Singapore.
The Management of SingTel
Ms Chua Sock Koong Group Chief Executive Officer, SingTel
Ms Chua, 52, was appointed Group Chief Executive Officer of SingTel on 1 April 2007. She oversees SingTel’s three key businesses — Singapore, Australia and International. Prior to this, she was the Deputy Group Chief Executive Officer from October 2006 to March 2007. She joined SingTel in June 1989 as Treasurer. In April 1999, she was promoted to CFO, responsible for the SingTel Group’s financial functions, including treasury, tax, insurance, risk management and capital management. In addition, she managed a diverse range of portfolios — from corporate development, company secretariat and legal to corporate communications and investor relations.
In February 2006, Ms Chua was appointed as Group CFO and CEO International, responsible for the key drivers of SingTel’s international business — Strategic Investments and NCS Pte. Ltd., the IT business arm. Besides overseeing the Group Information Systems and SingTel’s regional associates, she was responsible for driving strategic acquisitions and international business.
150 Ms Chua is an Executive Director of SingTel and a Board member of Bharti Airtel Limited. She is also a member of the Singapore Management University Board of Trustees, the Casino Regulatory Authority, the Public Service Commission and the Corporate Governance Council of the Monetary Authority of Singapore.
She holds a Bachelor of Accountancy (First Class Honours) from the University of Singapore and is a Certified Public Accountant and Chartered Financial Analyst.
Mr Allen Lew Chief Executive Officer (Singapore), SingTel
Mr Lew, 55, was appointed Chief Executive Officer (Singapore) in February 2006 with responsibility for the performance and operations of SingTel’s business in Singapore. He began his career with the SingTel Group in November 1980. He has served in various senior management positions, including Chief Operating Officer of Advanced Info Service Public Company Limited (“AIS”) — SingTel’s associate in Thailand, Chief Operating Officer of Singapore Telecom International Pte Ltd and Managing Director of Optus Consumer.
He is the Chairman of theAIS Executive Committee, Chairman of theAISAudit Committee and Member of the Sentosa Development Corporation and a member of the Advisory Council on the Impact of New Media on Society (AIMS), formed by the Ministry of Information, Communications and the Arts (MICA).
In 2007, Mr Lew was named Telecom CEO of the Year by Telecom Asia in recognition of his leadership role in SingTel’s reinvigorated performance in Singapore’s broadband and mobile market. He also won the Leading CEO Award in the Singapore Human Resources Awards 2009 for his active role in employee engagement initiatives.
Mr Lew holds a Bachelor of Electrical Engineering from the University of Western Australia and a Master of Science (Management) from the Massachusetts Institute of Technology, USA.
Mr Lim Chuan Poh Chief Executive Officer (International), SingTel
Mr Lim, 55, joined SingTel in October 1998. He was appointed Executive Vice President (“EVP”) Strategic Investments in February 2006. In October 2006, Mr Lim assumed the position of CEO (International). He is responsible for SingTel’s regional associates and supports the growth objectives of SingTel’s business groups through strategic investments in the region.
Mr Lim has held various senior appointments, including EVP (Consumer Business) and EVP (Corporate Business) and was CEO of SingTel Mobile between April 2004 and February 2006. He is also Chairman of Bridge Alliance, a group of leading communications companies in Asia. Mr Lim has extensive managerial experience in the public sector and was Deputy Secretary at the Ministry of Communications prior to joining SingTel.
He holds a Bachelor of Engineering Science (Honours) from Balliol College, University of Oxford, UK and a Master in Public Health Engineering from the Imperial College of Science and Technology, University of London.
On 10 June 2010, SingTel announced that Mr Lim will be retiring. Mr Lim has agreed to work until the end of 2010 to ensure a smooth transition of responsibilities.
151 Ms Jeann Low Ngiap Jong Group Chief Financial Officer, SingTel
Ms Low, 49, was appointed Group Chief Financial Officer on 1 September 2008. She oversees the SingTel Group’s financial affairs including corporate finance, procurement, taxation, treasury, risk management and capital management and investor relations and group communications. Before this appointment, she had been Chief Financial Officer of Optus since 2006.
Ms Low joined SingTel in 1998 as the Group Financial Controller, responsible for the financial functions of the SingTel Group. In 2004, she was promoted to Executive Vice President of Strategic Investments where she managed the SingTel Group’s international investments and pursued opportunities for strategic investments globally.
Prior to joining SingTel she worked for several years in both the London and Singapore practices of an international accounting firm and thereafter in a public listed electronics company in Singapore.
Ms Low has been a Council Member of the Institute of Certified Public Accountants in Singapore since April 2010 and is a Director of OpenNet Pte. Ltd. She graduated from the National University of Singapore with an Honours Degree in Accountancy and is a Certified Public Accountant in Singapore.
Mr Ng Yoke Weng Group Chief Information Officer, SingTel
Mr Ng, 54, joined SingTel in May 1997 as Chief Information Officer. He was re-designated Group Chief Information Officer in 2003 following the integration of the IT operations for SingTel’s Singapore and Australian (Optus) businesses.
Mr Ng leads and oversees the planning, development and operations of the IT infrastructure and information systems to ensure quality service delivery and operational efficiency. Since 1 April 2007, he has been covering the Group Chief Technology Officer role, responsible for driving long-term technology strategy, synergies and benchmarking.
Mr Ng holds a Bachelor of Electrical Engineering (First Class Honours) from the University of Canterbury, New Zealand. He is a Fellow of the Singapore Computer Society.
Mr Paul O’Sullivan Chief Executive Officer, SingTel Optus
Mr O’Sullivan, 49, was appointed Chief Executive of Optus in 2004. He is responsible for all aspects of the performance and operations of Optus. Under his direction, Optus has experienced five years of rapid growth, increasing revenues and growing its mobile customer base while maintaining a strong position as Australia’s second largest telecommunications company.
Mr O’Sullivan also has management responsibilities across the SingTel Group and serves on the Board of Commissioners of Telkomsel. Prior to his current role, Mr O’Sullivan held management positions within Optus including Chief Operating Officer and Managing Director of Optus Mobile, he has also held various international management roles at the Colonial Group and the Royal Dutch Shell Group.
Mr O’Sullivan is a board member of the Australian Business and Community Network (ABCN), which engages businesses to positively impact the community. In addition, he is one of the founders of TERRiA, a network of companies advocating for more competition and a level playing field in telecommunications.
He has a B.A. (Mod) Economics, Trinity College, University of Dublin and is a graduate of the Harvard Business School’s Advanced Management Program.
152 Ms Aileen Tan Group Director Human Resource, SingTel
Ms Tan, 43, joined SingTel in June 2008 as Group Director Human Resource. She oversees the development of human resource across the SingTel Group, including wholly owned subsidiaries NCS Pte. Ltd. and Optus and is also responsible for delivering the SingTel Group’s corporate social responsibility commitment.
Her role is to provide sound, well managed, responsive and efficient organisation-wide human resource programmes in support of SingTel, its subsidiaries and associates.
Ms Tan has a wealth of experience in Human Resource with many years of experience in various multinational corporations and local companies. Before joining SingTel, she was Group General Manager, Human Resources at Wearne Brothers Services Group and was Vice President of Human Resource at Invensys Process Systems.
Ms Tan graduated with a Bachelor ofArts majoring in Statistics and Japanese Studies from the National University of Singapore. She also holds a Master in Organisational Behaviour from the California School of Professional Psychology Alliant University.
She is a member of the Home Nursing Foundation Board and HR Manpower Skills & Training Council.
153 CLEARINGANDSETTLEMENT
The information set out below is subject to any change in, or reinterpretation of, the rules, regulations and procedures of CDP, DTC, Euroclear and Clearstream, Luxembourg (together, the “Clearing Systems”) currently in effect. Investors wishing to use the facilities of any of the Clearing Systems are advised to confirm the continued applicability of the rules, regulations and procedures of the relevant Clearing System. Neither the Issuer, any other party to the Agency Agreement, the Arrangers nor any Dealer will have any responsibility or liability for any aspect of the records relating to, or payments made on account of, beneficial ownership interests in the Notes held through the facilities of any Clearing System or for maintaining, supervising or reviewing any records relating to, or payments made on account of, such beneficial ownership interests.
The relevant Pricing Supplement will specify the clearing system(s) applicable for each Series.
The Clearing Systems
DTC
DTC is a limited purpose trust company organised under the laws of the State of New York, a “banking organisation” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code and a “clearing agency” registered pursuant to the provisions of Section 17A of the Exchange Act. DTC was created to hold securities for its participants and facilitate the clearance and settlement of securities transactions among participants through electronic computerised book-entry changes in accounts of its participants, thereby eliminating the need for physical movement of certificates. Direct participants include securities brokers and dealers, banks, trust companies and clearing corporations and certain other organisations. Indirect access to the DTC system is available to others such as banks, securities brokers, dealers and trust companies that clear through or maintain a custodial relationship with a DTC direct participant, either directly or indirectly (“indirect participants”). DTC makes payments only in U.S. dollars.
DTC has advised the Issuer that it will take any action permitted to be taken by a holder of Registered Notes (including, without limitation, the presentation of Restricted Global Certificates for exchange as described above) only at the direction of one or more participants in whose account with DTC interests in Restricted Global Certificates are credited and only in respect of such portion of the aggregate nominal amount of the relevant Restricted Global Certificates as to which such participant or participants has or have given such direction. However, in the circumstances described above, DTC will surrender the relevant Restricted Global Certificates for exchange for Individual Certificates (which will, in the case of Restricted Notes, bear the legend applicable to transfers pursuant to Rule 144A).
CDP
In respect of Notes which are accepted for clearance by CDP in Singapore, clearance will be effected through an electronic book-entry clearance and settlement system for the trading of debt securities (the “Depository System”) maintained by CDP. Notes that are to be listed on the SGX-ST may be cleared through CDP.
CDP, a wholly-owned subsidiary of Singapore Exchange Limited, is incorporated under the laws of Singapore and acts as a depository and clearing organisation. CDP holds securities for its accountholders and facilitates the clearance and settlement of securities transactions between accountholders through electronic book-entry changes in the securities accounts maintained by such accountholders with CDP.
154 In respect of Notes which are accepted for clearance by CDP, the entire issue of the Notes is to be held by CDP in the form of a Global Note or Global Certificate for persons holding the Notes in securities accounts with CDP (the “Depositors”). Delivery and transfer of Notes between Depositors is by electronic book-entries in the records of CDP only, as reflected in the securities accounts of Depositors. Although CDP encourages settlement on the third business day following the trade date of debt securities, market participants may mutually agree on a different settlement period if necessary.
Settlement of over-the-counter trades in the Notes through the Depository System may only be effected through certain corporate depositors (the “Depository Agents”) approved by CDP under the Companies Act, Chapter 50 of Singapore, to maintain securities sub-accounts and to hold the Notes in such securities sub-accounts for themselves and their clients. Accordingly, Notes for which trade settlement is to be effected through the Depository System must be held in securities sub-accounts with Depository Agents. Depositors holding Notes in direct securities accounts with CDP, and who wish to trade Notes through the Depository System, must transfer the Notes to be traded from such direct securities accounts to a securities sub-account with a Depository Agent for trade settlement.
CDP is not involved in money settlement between Depository Agents (or any other persons) as CDP is not a counterparty in the settlement of trades of debt securities. However, CDP will make payment of interest and repayment of principal on behalf of issuers of debt securities.
Although CDP has established procedures to facilitate transfer of interests in the Notes in global form among Depositors, it is under no obligation to perform or continue to perform such procedures, and such procedures may be discontinued at any time. Neither the Issuer, the Paying Agent in Singapore nor any other Agent will have the responsibility for the performance by CDP of its obligations under the rules and procedures governing its operations.
Euroclear and Clearstream, Luxembourg
Euroclear and Clearstream, Luxembourg each holds securities for participating organisations and facilitates the clearance and settlement of securities transactions between their respective participants through electronic book-entry changes in accounts of such participants, thereby eliminating the need for physical movements of certificates and any risks from lack of simultaneous transfer. Euroclear and Clearstream, Luxembourg provide to their respective participants, among other things, services for safekeeping, administration, clearance and settlement of internationally-traded securities and securities lending and borrowing. Euroclear and Clearstream, Luxembourg each also deals with domestic securities markets in several countries through established depository and custodial relationships. The respective systems of Euroclear and Clearstream, Luxembourg have established an electronic bridge between their two systems which enables their respective participants to settle trades with each other. Euroclear and Clearstream, Luxembourg participants are financial institutions throughout the world, including underwriters, securities brokers and dealers, banks, trust companies, clearing corporations and certain other organisations. Indirect access to Euroclear or Clearstream, Luxembourg is also available to others, such as banks, brokers, dealers and trust companies which clear through or maintain a custodial relationship with a Euroclear or Clearstream, Luxembourg participant, either directly or indirectly.
A participant’s overall contractual relations with either Euroclear or Clearstream, Luxembourg are governed by the respective rules and operating procedures of Euroclear or Clearstream, Luxembourg and any applicable laws. Both Euroclear and Clearstream, Luxembourg act under those rules and operating procedures only on behalf of their respective participants, and have no record of, or relationship with, persons holding any interests through their respective participants. Distributions of principal with respect to book-entry interests in the Notes held through Euroclear or Clearstream, Luxembourg will be credited, to the extent received by the relevant Paying Agent, to the cash accounts of Euroclear or Clearstream, Luxembourg participants in accordance with the relevant system’s rules and procedures.
155 Book-Entry Ownership
Bearer Notes
The Issuer may make applications to CDP, Euroclear and/or Clearstream, Luxembourg for acceptance in their respective book-entry systems in respect of any Series of Bearer Notes. In respect of Bearer Notes, a temporary Global Note and/or a permanent Global Note in bearer form without coupons may be deposited with CDP, or with a common depositary for Euroclear and/or Clearstream, Luxembourg or an Alternative Clearing System as agreed between the Issuer and the Dealer. Transfers of interests in such temporary Global Notes or permanent Global Notes will be made in accordance with the normal Euromarket debt securities operating procedures of CDP, Euroclear and Clearstream, Luxembourg or, if appropriate, the Alternative Clearing System.
Registered Notes
The Issuer may make applications to CDP, Euroclear and/or Clearstream, Luxembourg for acceptance in their respective book-entry systems in respect of the Notes to be represented by an Unrestricted Global Certificate. Each Unrestricted Global Certificate deposited with a common depositary for, and registered in the name of, a nominee of Euroclear and/or Clearstream, Luxembourg will have an ISIN and a Common Code.
The Issuer, and a relevant U.S. agent appointed for such purpose that is an eligible DTC participant, may make application to DTC for acceptance in its book-entry settlement system of the Registered Notes represented by a Restricted Global Certificate. Each such Restricted Global Certificate will have a CUSIP number. Each Restricted Global Certificate will be subject to restrictions on transfer contained in a legend appearing on the front of such Global Certificate, as set out under “Transfer Restrictions”. In certain circumstances, as described below in “Transfers of Registered Notes”, transfers of interests in a Restricted Global Certificate may be made as a result of which such legend may no longer be required.
In the case of a Tranche of Registered Notes to be cleared through the facilities of DTC, the Custodian, with whom the Restricted Global Certificates are deposited, and DTC, will electronically record the nominal amount of the Restricted Notes held within the DTC system. Investors may hold their beneficial interests in a Restricted Global Certificate directly through DTC if they are participants in the DTC system, or indirectly through organisations which are participants in such system.
Payments of the principal of, and interest on, each Restricted Global Certificate registered in the name of DTC’s nominee will be to, or to the order of, its nominee as the registered owner of such Restricted Global Certificate. The Issuer expects that the nominee, upon receipt of any such payment, will immediately credit DTC participants’ accounts with payments in amounts proportionate to their respective beneficial interests in the nominal amount of the relevant Restricted Global Certificate as shown on the records of DTC or the nominee. The Issuer also expects that payments by DTC participants to owners of beneficial interests in such Restricted Global Certificate held through such DTC participants will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers registered in the names of nominees for such customers. Such payments will be the responsibility of such DTC participants. Neither the Issuer nor any Paying Agent or any Transfer Agent will have any responsibility or liability for any aspect of the records relating, to or payments made on account of, ownership interests in any Restricted Global Certificate or for maintaining, supervising or reviewing any records relating to such ownership interests.
All Registered Notes will initially be in the form of an Unrestricted Global Certificate and/or a Restricted Global Certificate. Individual Certificates will only be available, in the case of Notes initially represented by an Unrestricted Global Certificate, in amounts specified in the applicable Pricing Supplement, and, in the case of Notes initially represented by a Restricted Global Certificate, in minimum amounts of
156 US$100,000 (or its equivalent rounded upwards as agreed between the Issuer and the relevant Dealer(s)), or higher integral multiples of US$1,000, in certain limited circumstances described below.
Payments through DTC
Payments in U.S. dollars of principal and interest in respect of a Restricted Global Certificate registered in the name of a nominee of DTC will be made to the order of such nominee as the registered holder of such Note. Payments of principal and interest in a currency other than U.S. dollars in respect of Notes evidenced by a Restricted Global Certificate registered in the name of a nominee of DTC will be made or procured to be made by the Paying Agent in such currency in accordance with the following provisions. The amounts in such currency payable by the PayingAgent or its agent to DTC with respect to Notes held by DTC or its nominee will be received from the Issuer by the PayingAgent who will make payments in such currency by wire transfer of same day funds to the designated bank account in such currency of those DTC participants entitled to receive the relevant payment who have made an irrevocable election to DTC, in the case of payments of interest, on or prior to the third business day in New York City after the Record Date for the relevant payment of interest and, in the case of payments of principal, at least 12 business days in New York City prior to the relevant payment date, to receive that payment in such currency. An exchange agent will convert amounts in such currency into U.S. dollars and deliver such U.S. dollar amount to the Paying Agent in same day funds for delivery to DTC for payment through its settlement system to those DTC participants entitled to receive the relevant payment who did not elect to receive such payment in such currency. The Agency Agreement sets out the manner in which such conversions are to be made.
Transfers of Registered Notes
Transfers of interests in Global Certificates within CDP, Euroclear, Clearstream, Luxembourg and DTC will be in accordance with the usual rules and operating procedures of the relevant clearing system. The laws of some states in the United States require that certain persons take physical delivery in definitive form of securities. Consequently, the ability to transfer interests in a Restricted Global Certificate to such persons may be limited. Because DTC can only act on behalf of participants, who in turn act on behalf of indirect participants, the ability of a person having an interest in a Restricted Global Certificate to pledge such interest to persons or entities that do not participate in DTC, or otherwise take actions in respect of such interest, may be affected by the lack of a physical certificate in respect of such interest.
Beneficial interests in an Unrestricted Global Certificate may only be held through CDP, Euroclear or Clearstream, Luxembourg. In the case of Registered Notes to be cleared through Euroclear, Clearstream, Luxembourg and/or DTC, transfers may be made at any time by a holder of an interest in an Unrestricted Global Certificate to a transferee who wishes to take delivery of such interest through a Restricted Global Certificate for the same Series of Notes provided that any such transfer made on or prior to the expiration of the distribution compliance period (as used in “Subscription and Sale”) relating to the Notes represented by such Unrestricted Global Certificate will only be made upon receipt by any Transfer Agent of a written certificate from Euroclear or Clearstream, Luxembourg, as the case may be, (based on a written certificate from the transferor of such interest) to the effect that such transfer is being made to a person whom the transferor, and any person acting on its behalf, reasonably believes is a QIB within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A and in accordance with any applicable securities laws of any state of the United States. Any such transfer made thereafter of the Notes represented by such Unrestricted Global Certificate will only be made upon request through Euroclear or Clearstream, Luxembourg by the holder of an interest in the Unrestricted Global Certificate to the Issuing and Paying Agent of details of that account at DTC to be credited with the relevant interest in the Restricted Global Certificate. Transfers at any time by a holder of any interest in the Restricted Global Certificate to a transferee who takes delivery of such interest through an Unrestricted Global Certificate will only be made upon delivery to any Transfer Agent of a certificate setting forth compliance with the provisions of Regulation S and giving details of the account
157 at Euroclear or Clearstream, Luxembourg, as the case may be, and DTC to be credited and debited, respectively, with an interest in each relevant Global Certificate.
Subject to compliance with the transfer restrictions applicable to the Registered Notes described above and under “Transfer Restrictions”, cross-market transfers between DTC, on the one hand, and directly or indirectly through Euroclear or Clearstream, Luxembourg accountholders, on the other, will be effected by the relevant clearing system in accordance with its rules and through action taken by the Custodian, the Registrar and the Issuing and Paying Agent.
On or after the Issue Date for any Series, transfers of Notes of such Series between accountholders in Euroclear and/or Clearstream, Luxembourg and transfers of Notes of such Series between participants in DTC will generally have a settlement date three business days after the trade date (T+3). The customary arrangements for delivery versus payment will apply to such transfers.
Cross-market transfers between accountholders in Euroclear or Clearstream, Luxembourg and DTC participants will need to have an agreed settlement date between the parties to such transfer. As there is no direct link between DTC, on the one hand, and Euroclear and Clearstream, Luxembourg, on the other, transfers of interests in the relevant Global Certificates will be effected through the Issuing and Paying Agent, the Custodian, the relevant Registrar and any applicable Transfer Agent receiving instructions (and where appropriate certification) from the transferor and arranging for delivery of the interests being transferred to the credit of the designated account for the transferee. Transfers will be effected on the later of (i) three business days after the trade date for the disposal of the interest in the relevant Global Certificate resulting in such transfer and (ii) two business days after receipt by the Issuing and Paying Agent or the Registrar, as the case may be, of the necessary certification or information to effect such transfer. In the case of cross-market transfers, settlement between Euroclear or Clearstream, Luxembourg accountholders and DTC participants cannot be made on a delivery versus payment basis. The securities will be delivered on a free delivery basis and arrangements for payment must be made separately.
For a further description of restrictions on transfer of Registered Notes, see “Transfer Restrictions”.
DTC has advised the Issuer that it will take any action permitted to be taken by a holder of Registered Notes (including, without limitation, the presentation of Restricted Global Certificates for exchange as described above) only at the direction of one or more participants in whose account with DTC interests in Restricted Global Certificates are credited and only in respect of such portion of the aggregate nominal amount of the relevant Restricted Global Certificates as to which such participant or participants has or have given such direction. However, in the circumstances described above, DTC will surrender the relevant Restricted Global Certificates for exchange for Individual Certificates (which will, in the case of Restricted Notes, bear the legend applicable to transfers pursuant to Rule 144A).
DTC has advised the Issuer as follows: DTC is a limited purpose trust company organised under the laws of the State of New York, a “banking organisation” under the laws of the State of New York, a member of the U.S. Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code and a “clearing agency” registered pursuant to the provisions of Section 17A of the Exchange Act. DTC was created to hold securities for its participants and facilitate the clearance and settlement of securities transactions between participants through electronic computerised book-entry changes in accounts of its participants, thereby eliminating the need for physical movement of certificates. Direct participants include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organisations. Indirect access to DTC is available to others, such as banks, securities brokers, dealers and trust companies, that clear through or maintain a custodial relationship with a DTC direct participant, either directly or indirectly.
Although Euroclear, Clearstream, Luxembourg and DTC have agreed to the foregoing procedures in order to facilitate transfers of beneficial interests in the Global Certificates among participants and accountholders of DTC, Clearstream, Luxembourg and Euroclear, they are under no obligation to
158 perform or continue to perform such procedures, and such procedures may be discontinued at any time. Neither the Issuer, the Guarantor nor any Paying Agent nor any Transfer Agent will have any responsibility for the performance by CDP, Euroclear, Clearstream, Luxembourg or DTC or their respective direct or indirect participants or accountholders of their respective obligations under the rules and procedures governing their operations.
While a Restricted Global Certificate is lodged with DTC or the Custodian, Restricted Notes represented by Individual Certificates will not be eligible for clearing or settlement through Euroclear, Clearstream, Luxembourg or DTC.
Individual Certificates
Registration of title to Registered Notes in a name other than a depositary or its nominee for Clearstream, Luxembourg and Euroclear or for DTC will be permitted only (i) in the case of Restricted Global Certificates in the circumstances set forth in “Summary of Provisions Relating to the Notes while in Global Form — Exchange — Restricted Global Certificates” or (ii) in the case of Unrestricted Global Certificates in the circumstances set forth in “Summary of Provisions Relating to the Notes while in Global Form — Exchange — Unrestricted Global Certificates”. In such circumstances, the Issuer will cause sufficient individual Certificates to be executed and delivered to the Registrar for completion, authentication and despatch to the relevant Noteholder(s). A person having an interest in a Global Certificate must provide the Registrar with:
(i) a written order containing instructions and such other information as the Issuer and the Registrar may require to complete, execute and deliver such Individual Certificates; and
(ii) in the case of a Restricted Global Certificate only, a fully completed, signed certification substantially to the effect that the exchanging holder is not transferring its interest at the time of such exchange, or in the case of a simultaneous resale pursuant to Rule 144A, a certification that the transfer is being made in compliance with the provisions of Rule 144A. Individual Certificates issued pursuant to this paragraph (ii) shall bear the legends applicable to transfers pursuant to Rule 144A.
Pre-issue Trades Settlement
It is expected that delivery of Notes will be made against payment therefor on the relevant Issue Date, which could be more than three business days following the date of pricing. Under Rule 15c6-1 of the Exchange Act, trades in the US secondary market generally are required to settle within three business days (“T+3”), unless the parties to any such trade expressly agree otherwise. Accordingly, in the event that an Issue Date is more than three business days following the relevant date of pricing, purchasers who wish to trade Registered Notes in the United States between the date of pricing and the date that is three business days prior to the relevant Issue Date will be required, by virtue of the fact that such Notes initially will settle beyond T+3, to specify an alternative settlement cycle at the time of any such trade to prevent a failed settlement. Settlement procedures in other countries will vary. Purchasers of Notes may be affected by such local settlement practices and, in the event that an Issue Date is more than three business days following the relevant date of pricing, purchasers of Notes who wish to trade Notes between the date of pricing and the date that is three business days prior to the relevant Issue Date should consult their own adviser.
159 TAXATION
Singapore Taxation
The statements below are general in nature and are based on certain aspects of current tax laws in Singapore and administrative guidelines issued by Monetary Authority of Singapore (“MAS”) in force as at the date of this Offering Circular and are subject to any changes in such laws or administrative guidelines, or the interpretation of those laws or guidelines, occurring after such date, which changes could be made on a retroactive basis. Neither these statements nor any other statements in this Offering Circular are intended or are to be regarded as advice on the tax position of any holder of the Notes or of any person acquiring, selling or otherwise dealing with the Notes or on any tax implications arising from the acquisition, sale or other dealings in respect of the Notes. The statements do not purport to be a comprehensive or exhaustive description of all the tax considerations that may be relevant to a decision to subscribe for, purchase, own or dispose of the Notes and do not purport to deal with the tax consequences applicable to all categories of investors, some of which (such as dealers in securities) may be subject to special rules. It should not be regarded as advice on the tax position of any person and should be treated with appropriate caution. Prospective holders of the Notes are advised to consult their own tax advisers as to the Singapore or other tax consequences of the acquisition, ownership of or disposal of the Notes, including the effect of any foreign, state or local tax laws to which they are subject. It is emphasised that neither the Issuer, the Guarantor nor any other persons involved in the Programme accepts responsibility for any tax effects or liabilities resulting from the subscription for, purchase, holding or disposal of the Notes.
1. Interest and Other Payments
Subject to the following paragraphs, under Section 12(6) of the Income Tax Act, Chapter 134 of Singapore (“ITA”), the following payments are deemed to be derived from Singapore:
(a) any interest, commission, fee or any other payment in connection with any loan or indebtedness or with any arrangement, management, guarantee, or service relating to any loan or indebtedness which is (i) borne, directly or indirectly, by a person resident in Singapore or a permanent establishment in Singapore (except in respect of any business carried on outside Singapore through a permanent establishment outside Singapore or any immovable property situated outside Singapore) or (ii) deductible against any income accruing in or derived from Singapore; or
(b) any income derived from loans where the funds provided by such loans are brought into or used in Singapore.
Such payments, where made to a person not known to the paying party to be a resident in Singapore for tax purposes, are generally subject to withholding tax in Singapore. The rate at which tax is to be withheld for such payments (other than those subject to the 15 per cent. final withholding tax described below) to non-resident persons (other than non-resident individuals) is 17 per cent. with effect from the year of assessment 2010. The applicable rate for non-resident individuals is 20 per cent. However, if the payment is derived by a person not resident in Singapore otherwise than from any trade, business, profession or vocation carried on or exercised by such person in Singapore and is not effectively connected with any permanent establishment in Singapore of that person, the payment is subject to a final withholding tax of 15 per cent. The rate of 15 per cent. may be reduced by applicable tax treaties.
However, certain Singapore-sourced investment income derived by individuals from financial instruments is exempt from tax, including:
(a) interest from debt securities derived on or after 1 January 2004;
160 (b) discount income (not including discount income arising from secondary trading) from debt securities derived on or after 17 February 2006; and
(c) prepayment fee, redemption premium or break cost from debt securities derived on or after 15 February 2007, except where such income is derived through a partnership in Singapore or is derived from the carrying on of a trade, business or profession.
In addition, as the Programme as a whole is arranged by The Hongkong and Shanghai Banking Corporation Limited, Singapore Branch and Morgan Stanley Asia (Singapore) Pte. (each of which is a Financial Sector Incentive (Bond Market) Company (as defined in the ITA)), any tranche of the Notes issued as debt securities under the Programme during the period from the date of this Offering Circular to 31 December 2013 (“Relevant Notes”) would be “qualifying debt securities” for the purposes of the ITA, to which the following treatments shall apply:
(i) subject to certain prescribed conditions having been fulfilled (including the furnishing by the Issuer, or such other person as the Comptroller of Income Tax in Singapore (the “Comptroller”) may direct, of a return on debt securities for the Relevant Notes within such period as the Comptroller may specify and such other particulars in connection with the Relevant Notes as the Comptroller may require to the Comptroller and MAS and the inclusion by the Issuer in all offering documents relating to the Relevant Notes of a statement to the effect that where interest, discount income, prepayment fee, redemption premium or break cost is derived by a person who is not resident in Singapore and who carries on any operation in Singapore through a permanent establishment in Singapore, the tax exemption for qualifying debt securities shall not apply if the non-resident person acquires the Relevant Notes using funds from that person’s operations through the Singapore permanent establishment), interest, discount income (not including discount income arising from secondary trading), prepayment fee, redemption premium and break cost (collectively, the “Qualifying Income”) from the Relevant Notes made by the Issuer and derived by a holder who is not resident in Singapore and who (aa) does not have any permanent establishment in Singapore or (bb) carries on any operation in Singapore through a permanent establishment in Singapore but the funds used by that person to acquire the Relevant Notes are not obtained from such person’s operation through a permanent establishment in Singapore, are exempt from Singapore tax;
(ii) subject to certain conditions having been fulfilled (including the furnishing by the Issuer, or such other person as the Comptroller may direct, of a return on debt securities for the Relevant Notes within such period as the Comptroller may specify and such other particulars in connection with the Relevant Notes as the Comptroller may require to the Comptroller and MAS), Qualifying Income from the Relevant Notes made by the Issuer and derived by any company or body of persons (as defined in the ITA) in Singapore is subject to tax at a concessionary rate of 10 per cent.; and
(iii) subject to:
(aa) the Issuer including in all offering documents relating to the Relevant Notes, a statement to the effect that any person whose interest, discount income, prepayment fee, redemption premium or break cost derived from the Relevant Notes is not exempt from tax shall include such income in a return of income made under the ITA; and
(bb) the Issuer, or such other person as the Comptroller may direct, furnishing to the Comptroller and MAS a return on debt securities for the Relevant Notes within such period as the Comptroller may specify and such other particulars in connection with the Relevant Notes as the Comptroller may require,
payments of Qualifying Income derived from the Relevant Notes and made by the Issuer are not subject to withholding of tax by the Issuer.
161 However, notwithstanding the foregoing:
(A) if during the primary launch of any tranche of Relevant Notes, the Relevant Notes of such tranche are issued to fewer than four persons and 50 per cent. or more of the issue of such Relevant Notes is beneficially held or funded, directly or indirectly, by related parties of the Issuer, such Relevant Notes would not qualify as “qualifying debt securities”; and
(B) even though a particular tranche of Relevant Notes are “qualifying debt securities”, if, at any time during the tenure of such tranche of Relevant Notes, 50 per cent. or more of the issue of such Relevant Notes is held beneficially or funded, directly or indirectly, by any related party(ies) of the Issuer, Qualifying Income derived from such Relevant Notes held by:
(I) any related party of the Issuer; or
(II) any other person where the funds used by such person to acquire such Notes are obtained, directly or indirectly, from any related party of the Issuer, shall not be eligible for the tax exemption or concessionary rate of tax as described above.
The term “related party”, in relation to a person, means any other person who, directly or indirectly, controls that person, or is controlled, directly or indirectly, by that person, or where he and that other person, directly or indirectly, are under the control of a common person.
The terms “prepayment fee”,“redemption premium” and “break cost” are defined in the ITAas follows:
“prepayment fee”, in relation to debt securities and qualifying debt securities, means any fee payable by the issuer of the securities on the early redemption of the securities, the amount of which is determined by the terms of the issuance of the securities;
“redemption premium”, in relation to debt securities and qualifying debt securities, means any premium payable by the issuer of the securities on the redemption of the securities upon their maturity; and
“break cost”, in relation to debt securities and qualifying debt securities, means any fee payable by the issuer of the securities on the early redemption of the securities, the amount of which is determined by any loss or liability incurred by the holder of the securities in connection with such redemption.
References to “prepayment fee”, “redemption premium” and “break cost” in this Singapore tax disclosure have the same meaning as defined in the ITA.
Notwithstanding that the Issuer is permitted to make payments of interest, discount income, prepayment fee, redemption premium and break cost in respect of the Relevant Notes without deduction or withholding for tax under Section 45 or Section 45A of the ITA, any person whose interest, discount income, prepayment fee, redemption premium or break cost derived from the Relevant Notes is not exempt from tax is required to include such income in a return of income made under the ITA.
162 2. Capital Gains
Any gains considered to be in the nature of capital made from the sale of the Notes will not be taxable in Singapore. However, any gains from the sale of Notes which are gains from any trade, business, profession or vocation carried on by that person, if accruing in or derived from Singapore, may be taxable as such gains are considered revenue in nature.
Holders of the Notes who are adopting Singapore Financial Reporting Standard 39 (“FRS 39”) may for Singapore income tax purposes be required to recognise gains or losses (not being gains or losses in the nature of capital) on the Notes, irrespective of disposal, in accordance with FRS 39. Please see the section below on “Adoption of FRS 39 treatment for Singapore income tax purposes”.
3. Adoption of FRS 39 treatment for Singapore income tax purposes
The Inland RevenueAuthority of Singapore has issued a circular entitled “Income Tax Implications arising from the adoption of FRS 39 — Financial Instruments: Recognition and Measurement” (the “FRS 39 Circular”). The ITA has since been amended to give legislative effect to the FRS 39 Circular.
The FRS 39 Circular generally applies, subject to certain “opt-out” provisions, to taxpayers who are required to comply with FRS 39 for financial reporting purposes.
Holders of the Notes who may be subject to the tax treatment under the FRS 39 Circular should consult their own accounting and tax advisers regarding the Singapore income tax consequences of their acquisition, holding or disposal of the Notes.
4. Estate Duty
Singapore estate duty has been abolished with respect to all deaths occurring on or after 15 February 2008.
EU Directive on the Taxation of Savings Income
Under EC Council Directive 2003/48/EC on the taxation of savings income, each Member State is required to provide to the tax authorities of another Member State details of payments of interest or other similar income paid by a person within its jurisdiction to, or collected by such a person for, an individual resident or certain other residual entities of that other Member State; however, for a transitional period, Austria, Belgium and Luxembourg may instead apply a withholding system in relation to such payments, deducting tax at rates rising over time to 35.0 per cent. The transitional period is to terminate at the end of the first full fiscal year following agreement by certain non-EU countries to the exchange of information relating to such payments. Belgium has replaced this withholding tax with a regime of exchange of information to the Member State of residence as from 1 January 2010.
A number of non-EU countries, and certain dependent or associated territories of certain Member States have agreed to adopt similar measures (either provision of information or transitional withholding) in relation to payments made by a person within its jurisdiction to, or collected by such a person for, an individual resident or certain other residual entities of a Member State. In addition, the Member States have entered into reciprocal provision of information or transitional withholding arrangements with certain of those dependent or associated territories in relation to payments made by a person in a Member State to, or collected by such a person for, an individual resident or certain other residual entities of those territories.
163 SUBSCRIPTIONANDSALE
Summary of Dealer Agreement
Subject to the terms and on the conditions contained in a dealer agreement dated 29 July 2010 (the “Dealer Agreement”) between the Issuer, the Guarantor, the Permanent Dealers and the Arrangers, the Notes will be offered on a continuous basis by the Issuer to the Permanent Dealers. However, the Issuer has reserved the right to sell Notes directly on its own behalf to Dealers that are not Permanent Dealers. The Notes may be resold at prevailing market prices, or at prices related thereto, at the time of such resale, as determined by the relevant Dealer. The Notes may also be sold by the Issuer through the Dealers, acting as agents of the Issuer. The Dealer Agreement also provides for Notes to be issued in syndicated Tranches that are underwritten by two or more Dealers.
The Issuer, failing whom the Guarantor, will pay each relevant Dealer a commission as agreed between them in respect of Notes subscribed by it. The Issuer, failing whom the Guarantor, has agreed to reimburse the Arrangers for their expenses incurred in connection with the establishment of the Programme and the Dealers for certain of their activities in connection with the Programme. The commissions in respect of an issue of Notes on a syndicated basis will be stated in the relevant Pricing Supplement.
The Issuer and the Guarantor have agreed to indemnify the Dealers against certain liabilities in connection with the offer and sale of the Notes. The Dealer Agreement entitles the Dealers to terminate any agreement that they make to subscribe Notes in certain circumstances prior to payment for such Notes being made to the Issuer.
Selling Restrictions
United States
The Notes and the Guarantee have not been and will not be registered under the Securities Act and the Notes may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons, except in certain transactions exempt from the registration requirements of the Securities Act. Terms used in this paragraph have the meanings given to them by Regulation S.
Bearer Notes are subject to U.S. tax law requirements and may not be offered, sold or delivered within the United States or its possessions or to a United States person, except in certain transactions permitted by U.S. tax regulations. Terms used in this paragraph have the meanings given to them by the U.S. Internal Revenue Code and regulations thereunder.
Each Dealer has agreed and each further Dealer appointed under the Programme will be required to agree that, except as permitted by the Dealer Agreement, it will not offer, sell or, in the case of Bearer Notes, deliver Notes (i) as part of their distribution at any time or (ii) otherwise until 40 days after the completion of the distribution of an identifiable tranche of which such Notes are a part, as determined and certified to the Issuing and Paying Agent by such Dealer (or, in the case of an identifiable tranche of Notes sold to or through more than one Dealer, by each of such Dealers with respect to Notes of an identifiable tranche purchased by or through it, in which case the Issuing and Paying Agent shall notify such Dealer when all such Dealers have so certified), within the United States or to, or for the account or benefit of, U.S. persons, and it will have sent to each Dealer to which it sells Notes during the distribution compliance period (other than resales pursuant to Rule 144A) a confirmation or other notice setting out the restrictions on offers and sales of the Notes within the United States or to, or for the account or benefit of, U.S. persons. Terms used in the preceding sentence have the meanings given to them by Regulation S.
164 The Notes are being offered and sold outside the United States to non-U.S. persons in reliance on Regulation S. The Dealer Agreement provides that the Dealers may directly or through their respective U.S. broker-dealer affiliates arrange for the offer and resale of Notes within the United States only to QIBs in reliance on Rule 144A.
In addition, until 40 days after the commencement of the offering of any identifiable tranche of Notes, an offer or sale of Notes within the United States by any dealer (whether or not participating in the offering of such tranche of Notes) may violate the registration requirements of the Securities Act if such offer or sale is made otherwise than in accordance with Rule 144A.
This Offering Circular has been prepared by the Issuer and the Guarantor for use in connection with the offer and sale of the Notes outside the United States and for the resale of the Notes in the United States. The Issuer, the Guarantor and the Dealers reserve the right to reject any offer to purchase the Notes, in whole or in part, for any reason. This Offering Circular does not constitute an offer to any person in the United States or to any U.S. person, other than any QIB within the meaning of Rule 144A to whom an offer has been made directly by one of the Dealers or its U.S. broker-dealer affiliate. Distribution of this Offering Circular by any non-U.S. person outside the United States or by any QIB in the United States to any U.S. person or to any other person within the United States, other than any QIB and those persons, if any, retained to advise such non-U.S. person or QIB with respect thereto, is unauthorised and any disclosure without the prior written consent of the Issuer of any of its contents to any such U.S. person or other person within the United States, other than any QIB and those persons, if any, retained to advise such non-U.S. person or QIB, is prohibited.
Public Offer Selling Restriction Under the Prospectus Directive
In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”), each Dealer has represented and agreed, and each further Dealer appointed under the Programme will be required to represent and agree, that with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the “Relevant Implementation Date”) it has not made and will not make an offer of Notes which are the subject of the offering contemplated by this Offering Circular as completed by the pricing supplement in relation thereto to the public in that Relevant Member State except that it may, with effect from and including the Relevant Implementation Date, make an offer of such Notes to the public in that Relevant Member State:
(i) if the pricing supplement in relation to the Notes specify that an offer of those Notes may be made other than pursuant to Article 3(2) of the Prospectus Directive in that Relevant Member State (a “Non-exempt Offer”), following the date of publication of a prospectus in relation to such Notes which has been approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, provided that any such prospectus has subsequently been completed by the pricing supplement contemplating such Non-exempt Offer, in accordance with the Prospectus Directive, in the period beginning and ending on the dates specified in such prospectus or final terms, as applicable;
(ii) at any time to legal entities which are authorised or regulated to operate in the financial markets or, if not so authorised or regulated, whose corporate purpose is solely to invest in securities;
(iii) at any time to any legal entity which has two or more of (a) an average of at least 250 employees during the last financial year; (b) a total balance sheet of more than C43,000,000 and (c) an annual net turnover of more than C50,000,000, as shown in its last annual or consolidated accounts;
165 (iv) at any time to fewer than 100 natural or legal persons (other than qualified investors as defined in the Prospectus Directive) subject to obtaining the prior consent of the relevant Dealer or Dealers nominated by the Issuer for any such offer; or
(v) at any time in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of Notes referred to in (ii) to (v) above shall require the Issuer, the Guarantor or any Dealer to publish a prospectus pursuant to Article 3 of the Prospectus Directive or supplement prospectus pursuant to Article 16 of the Prospectus Directive.
For the purposes of this provision, the expression an “offer of Notes to the public” in relation to any Notes in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the Notes to be offered so as to enable an investor to decide to purchase or subscribe the Notes, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State and the expression “Prospectus Directive” means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State.
United Kingdom
Each Dealer has represented and agreed, and each further Dealer appointed under the Programme will be required to represent and agree, that:
(i) in relation to any Notes which have a maturity of less than one year, (a) it is a person whose ordinary activities involve it in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of its business and (b) it has not offered or sold and will not offer or sell any Notes other than to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their businesses or who it is reasonable to expect will acquire, hold, manage or dispose of investments (as principal or agent) for the purposes of their businesses where the issue of the Notes would otherwise constitute a contravention of section 19 of the FSMA by the Issuer;
(ii) it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of the FSMA) received by it in connection with the issue or sale of any Notes in circumstances in which section 21(1) of the FSMA does not apply to the Issuer or the Guarantor; and
(iii) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to any Notes in, from or otherwise involving the United Kingdom.
Singapore
Each Dealer has acknowledged, and each further Dealer appointed under the Programme will be required to acknowledge, that this Offering Circular has not been registered as a prospectus with the MAS. Accordingly, each Dealer has represented and agreed, and each further Dealer appointed under the Programme will be required to represent and agree, that it has not offered or sold any Notes or caused the Notes to be made the subject of an invitation for subscription or purchase and will not offer or sell any Notes or cause the Notes to be made the subject of an invitation for subscription or purchase, and has not circulated or distributed, nor will it circulate or distribute, this Offering Circular or any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the Notes, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the SFA, (ii) to a relevant person pursuant to Section 275(1), or to any person pursuant to Section 275(1A), and in accordance with the conditions specified in
166 Section 275, of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.
Where the Notes are subscribed or purchased under Section 275 of the SFAby a relevant person which is:
(a) a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or
(b) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an accredited investor, securities (as defined in Section 239(1) of the SFA) of that corporation or the beneficiaries’ rights and interest (howsoever described) in that trust shall not be transferred within six months after that corporation or that trust has acquired the Notes pursuant to an offer made under Section 275 of the SFA except:
(1) to an institutional investor or to a relevant person defined in Section 275(2) of the SFA, or to any person arising from an offer referred to in Section 275(1A) or Section 276(4)(i)(B) of the SFA;
(2) where no consideration is or will be given for the transfer;
(3) where the transfer is by operation of law; or
(4) as specified in Section 276(7) of the SFA.
Hong Kong
In relation to each Tranche of Notes issued by the Issuer, each Dealer has represented and agreed, and each further Dealer appointed under the Programme will be required to represent and agree, that:
(i) it has not offered or sold and will not offer or sell in Hong Kong, by means of any document, any Notes other than (a) to “professional investors” as defined in the Securities and Futures Ordinance (Cap. 571) of Hong Kong and any rules made under that Ordinance; or (b) in other circumstances which do not result in the document being a “prospectus” as defined in the Companies Ordinance (Cap. 32) of Hong Kong or which do not constitute an offer to the public within the meaning of that Ordinance; and
(ii) it has not issued or had in its possession for the purposes of issue, and will not issue or have in its possession for the purposes of issue, whether in Hong Kong or elsewhere, any advertisement, invitation or document relating to the Notes, which is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to Notes which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” as defined in the Securities and Futures Ordinance and any rules made under that Ordinance.
Japan
The Notes have not been and will not be registered under the Financial Instruments and Exchange Act of Japan (the “Financial Instruments and Exchange Act”). Accordingly, each of the Dealers has represented and agreed, and each further Dealer appointed under the Programme will be required to represent and agree, that it has not, directly or indirectly, offered or sold and will not, directly or indirectly, offer or sell any Notes in Japan or to, or for the benefit of, any resident of Japan (which term as used herein means any person resident in Japan, including any corporation or other entity organised
167 under the laws of Japan) or to others for re-offering or re-sale, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the Financial Instruments and Exchange Act and other relevant laws and regulations of Japan.
General
These selling restrictions may be supplemented or modified by the agreement of the Issuer and the Dealers following a change in a relevant law, regulation or directive. Any such supplement or modification will be set out in the Pricing Supplement issued in respect of the issue of Notes to which it relates or in a supplement to this Offering Circular.
No representation is made that any action has been taken in any jurisdiction that would permit a public offering of any of the Notes, or possession or distribution of this Offering Circular or any other offering material or any Pricing Supplement, in any country or jurisdiction where action for that purpose is required.
Each Dealer has agreed and each further Dealer appointed under the Programme will be required to agree that it shall, to the best of its knowledge, comply with all relevant laws, regulations and directives in each jurisdiction in which it purchases, offers, sells or delivers Notes or has in its possession or distributes the Offering Circular, any other offering material or any Pricing Supplement therefore in all cases at its own expense. Other persons into whose hands this Offering Circular or any Pricing Supplement comes are required by the Issuer, the Guarantor and the Dealers to comply with all applicable laws and regulations in each country or jurisdiction in or from which they purchase, offer, sell or deliver Notes or possess, distribute or publish this Offering Circular or any Pricing Supplement or any related offering material, in all cases at their own expense.
168 TRANSFERRESTRICTIONS
Restricted Notes
Each purchaser of Restricted Notes, by accepting delivery of this Offering Circular, will be deemed to have represented, agreed and acknowledged that:
1. It is (a) a QIB, (b) acquiring such Restricted Notes for its own account, or for the account of one or more QIBs, and (c) aware, and each beneficial owner of the Restricted Notes has been advised, that the sale of the Restricted Notes to it is being made in reliance on Rule 144A.
2. (i) The Restricted Notes and the Guarantee have not been and will not be registered under the Securities Act and may not be offered, sold, pledged or otherwise transferred except (a) in accordance with Rule 144A to a person that it, and any person acting on its behalf, reasonably believes is a QIB purchasing for its own account or for the account of one or more QIBs, (b) in an offshore transaction in accordance with Rule 903 or Rule 904 of Regulation S, or (c) pursuant to an exemption from registration under the Securities Act provided by Rule 144 thereunder (if available) in each case in accordance with any applicable securities laws of any State of the United States and (ii) it will, and each subsequent holder of the Restricted Notes is required to, notify any purchaser of the Restricted Notes from it of the resale restrictions on the Restricted Notes.
3. The Restricted Notes, unless the Issuer determines otherwise in accordance with applicable law, will bear a legend (the “Rule 144A Legend”) in or substantially in the following form:
THISNOTEANDTHEGUARANTEEINRESPECTHEREOFHAVENOTBEENANDWILLNOT BE REGISTERED UNDER THE U.S. SECURITIESACT OF 1933 (THE “SECURITIESACT”),OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD,PLEDGEDOR OTHERWISE TRANSFERRED EXCEPT (1) IN ACCORDANCE WITH RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”) TO A PERSON THAT THE HOLDER AND ANYPERSON ACTINGONITSBEHALFREASONABLYBELIEVEISAQUALIFIEDINSTITUTIONALBUYER WITHIN THE MEANING OF RULE 144A (A “QIB”) THAT IS ACQUIRING THISNOTEFORITS OWN ACCOUNT OR FOR THE ACCOUNT OF ONE OR MORE QIBS, (2) IN AN OFFSHORE TRANSACTION INACCORDANCE WITH RULE 903 OR RULE 904 OF REGULATIONSUNDER THE SECURITIES ACT, (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER RULE 144 UNDER THE SECURITIES ACT (“RULE 144”), IF AVAILABLE, OR (4) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE INACCORDANCEWITHANYAPPLICABLESECURITIESLAWSOFANYSTATEOFTHE UNITED STATES. NO REPRESENTATION CAN BE MADE AS TO THE AVAILABILITYOFTHE EXEMPTION PROVIDED BY RULE 144 FOR RESALES OF THE NOTES.
4. It understands that the Issuer, the Guarantor, each Registrar, the relevant Dealer(s) and their affiliates, and others will rely upon the truth and accuracy of the foregoing acknowledgements, representations and agreements. If it is acquiring any Notes for the account of one or more QIBs, it represents that it has sole investment discretion with respect to each of those accounts and that it has full power to make the foregoing acknowledgements, representations and agreements on behalf of each such account.
5. It understands that the Restricted Notes will be represented by a Restricted Global Certificate. Before any interest in a Restricted Global Certificate may be offered, sold, pledged or otherwise transferred to a person who takes delivery in the form of an interest in the Unrestricted Global Certificate or as the case may be, Global Note, it will be required to provide a Transfer Agent with a written certification (in the form provided in the Agency Agreement) as to compliance with applicable securities laws.
169 Prospective purchasers are hereby notified that sellers of the Notes may be relying on the exemption from the provisions of Section 5 of the Securities Act provided by Rule 144A.
Unrestricted Notes
Each purchaser of Unrestricted Notes and each subsequent purchaser of such Unrestricted Notes in resales prior to the expiration of the distribution compliance period, by accepting delivery of this Prospectus and the Unrestricted Notes, will be deemed to have represented, agreed and acknowledged that:
(i) It is, or at the time Unrestricted Notes are purchased will be, the beneficial owner of such Unrestricted Notes and (a) it is not a U.S. person and it is located outside the United States (within the meaning of Regulation S) and (b) it is not an affiliate of the Issuer or a person acting on behalf of such an affiliate.
(ii) It understands that such Unrestricted Notes and the Guarantee have not been and will not be registered under the Securities Act and that, prior to the expiration of the distribution compliance period, it will not offer, sell, pledge or otherwise transfer such Unrestricted Notes except (a) in accordance with Rule 144A under the Securities Act to a person that it and any person acting on its behalf reasonably believes is a QIB purchasing for its own account, or for the account of one or more QIBs or (b) in an offshore transaction in accordance with Rule 903 or Rule 904 of Regulation S, in each case in accordance with any applicable securities laws of any State of the United States.
(iii) It understands that the Unrestricted Notes, unless otherwise determined by the Issuer in accordance with applicable law, will bear a legend in or substantially in the following form:
“THISNOTEANDTHEGUARANTEEINRESPECTHEREOFHAVENOTBEENANDWILLNOT BE REGISTERED UNDER THE U.S. SECURITIESACT OF 1933 (THE “SECURITIESACT”),OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD,PLEDGEDOR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES EXCEPT PURSUANT TO AN EXEMPTIONFROMREGISTRATIONUNDERTHESECURITIESACT.”
(iv) It understands that the Issuer, the Guarantor, each Registrar, the relevant Dealer(s) and their affiliates, and others will rely upon the truth and accuracy of the foregoing acknowledgements, representations and agreements.
(v) It understands that the Unrestricted Notes will be represented by an Unrestricted Global Certificate, or as the case may be, a Global Note. Prior to the expiration of the distribution compliance period, before any interest in an Unrestricted Global Certificate may be offered, sold, pledged or otherwise transferred to a person who takes delivery in the form of an interest in a Restricted Global Certificate, it will be required to provide a Transfer Agent with a written certification (in the form provided in the Agency Agreement) as to compliance with applicable securities laws.
(vi) Delivery of the Notes may be made against payment thereof on or about a date which will occur more than three business days after the date of pricing of the Notes. Pursuant to Rule 15c6-1 under the Exchange Act, trades in the secondary market generally are required to settle in three business days, unless the parties to any such trade expressly agree otherwise. Accordingly, purchasers who wish to trade Notes on the date of pricing or the next succeeding business day will be required, by virtue of the fact that the Notes may initially settle on or about a date which will occur more than three business days after the date of pricing of the Notes to specify an alternate settlement cycle at the time of any such trade to prevent a failed settlement. Purchasers of Notes who wish to trade Notes on the date of pricing or the next succeeding business day should consult their own advisor.
170 FORMOFPRICINGSUPPLEMENT
The form of Pricing Supplement that will be issued in respect of each Tranche, subject only to the deletion of non-applicable provisions, is set out below:
Pricing Supplement dated [G]
SingTel Group Treasury Pte. Ltd. S$10,000,000,000 Guaranteed Euro Medium Term Note Programme
Guaranteed by Singapore Telecommunications Limited
SingTel Group Treasury Pte. Ltd. Issue of [Aggregate Nominal Amount of Tranche] [Title of Notes] under the S$10,000,000,000 Guaranteed Euro Medium Term Note Programme guaranteed by Singapore Telecommunications Limited
This document constitutes the Pricing Supplement relating to the issue of Notes described herein.
Terms used herein shall be deemed to be defined as such for the purposes of the Conditions set forth in the Offering Circular dated 29 July 2010 [and the supplemental Offering Circular dated [G]]. This Pricing Supplement contains the final terms of the Notes and must be read in conjunction with such Offering Circular [as so supplemented].
The following alternative language applies if the first tranche of an issue which is being increased was issued under an Offering Circular with an earlier date.
Terms used herein shall be deemed to be defined as such for the purposes of the Conditions (the “Conditions”) set forth in the Offering Circular dated [original date]. This Pricing Supplement contains the final terms of the Notes and must be read in conjunction with the Offering Circular dated [current date] [and the supplemental Offering Circular dated [G]], save in respect of the Conditions which are extracted from the Offering Circular dated [original date] and are attached hereto.]
Where interest, discount income, prepayment fee, redemption premium or break cost is derived from any of the Notes by any person who (i) is not resident in Singapore and (ii) carries on any operations in Singapore through a permanent establishment in Singapore, the tax exemption available for qualifying debt securities (subject to certain conditions) under the Income Tax Act, Chapter 134 of Singapore (the “Income Tax Act”), shall not apply if such person acquires such Notes using the funds and profits of such person’s operations through a permanent establishment in Singapore. Any person whose interest, discount income, prepayment fee, redemption premium or break cost derived from the Notes is not exempt from tax (including for the reasons described above) shall include such income in a return of income made under the Income Tax Act.
[Include whichever of the following apply or specify as “Not Applicable” (N/A). Note that the numbering should remain as set out below, even if “Not Applicable” is indicated for individual paragraphs or sub-paragraphs. Italics denote directions for completing the Pricing Supplement.]
1.(i)Issuer: [ ]
(ii)Guarantor: [ ]
2. [(i)]SeriesNumber: [ ]
171 [(ii) TrancheNumber: [ ]
(If fungible with an existing Series, details of that Series, including the date on which the Notes become fungible).]
3. SpecifiedCurrencyorCurrencies: [ ]
4. AggregateNominalAmount: [ ]
[(i)]Series: [ ]
[(ii)Tranche: [ ]]
5. [(i)] IssuePrice: [ ] per cent. of the Aggregate Nominal Amount [plus accrued interest from [insert date](in the case of fungible issues only, if applicable)]
[(ii)Netproceeds: [ ](Required only for listed issues)]
6. (i) SpecifiedDenominations: [ ]
(ii) CalculationAmount: [ ]
7. (i) IssueDate: [ ]
(ii) Interest Commencement Date: [Specify/Issue date/Not Applicable]
8. MaturityDate: [specify date or (for Floating Rate Notes) Interest Payment Date falling in or nearest to the relevant month and year]
9. InterestBasis: [G per cent. Fixed Rate] [[specify reference rate] +/− G per cent. Floating Rate] [Zero Coupon] [Index Linked Interest] [Other (specify)] (further particulars specified below)
10. Redemption/PaymentBasis: [Redemptionatpar] [Index Linked Redemption] [Dual Currency] [Partly Paid] [Instalment] [Other (specify)]
11. Change of Interest or Redemption/ [Specify details of any provision for convertibility of Payment Basis: Notes into another interest or redemption/payment basis]
12. Put/CallOptions: [InvestorPut] [Issuer Call] [(further particulars specified below)]
13. (i) StatusoftheNotes: [Senior]
(ii) StatusoftheGuarantee: [Senior]
172 14.Listing: [[ ](specify)/None]
15. Methodofdistribution: [Syndicated/Non-syndicated]
PROVISIONS RELATING TO INTEREST (IF ANY) PAYABLE
16. Fixed Rate Note Provisions: [Applicable/NotApplicable] (If not applicable, delete the remaining sub- paragraphs of this paragraph)
(i) Rate[(s)]ofInterest: [ ]percent.perannum[payable[annually/ semi-annually/quarterly/monthly] in arrear]
(ii) InterestPaymentDate(s): [ ]ineachyear[adjustedinaccordance with [specify Business Day Convention and any applicable Business Centre(s) for the definition of “Business Day”]/not adjusted]
(iii) FixedCouponAmount[(s)]: [ ]perCalculationAmount
(iv) BrokenAmount(s): [ ]perCalculationAmount,payableon the Interest Payment Date falling [in/on] [ ]
(v) DayCountFraction: [30/360/Actual/Actual(ICMA/ISDA)/other]
(vi) [DeterminationDates: [ ] in each year (insert regular interest payment dates, ignoring issue date or maturity date in the case of a long or short first or last coupon. N.B. only relevant where Day Count Fraction is Actual/ Actual (ICMA))]
(vii) Other terms relating to the [Not Applicable/give details] method of calculating interest for Fixed Rate Notes:
17. Floating Rate Note Provisions: [Applicable/NotApplicable] (If not applicable, delete the remaining sub- paragraphs of this paragraph.)
(i) InterestPeriod(s): [ ]
(ii) Specified Interest Payment [] Dates:
(iii) FirstInterestPeriodDate: [ ] (Not applicable unless different from Interest Payment Date)
(iv) Business Day Convention: [Floating Rate Convention/Following Business Day Convention/Modified Following Business Day Convention/Preceding Business Day Convention/ other (give details)]
(v) BusinessCentre(s): [ ]
(vi) Manner in which the Rate(s) of [Screen Rate Interest is/are to be Determination/ISDA determined: Determination/other (give details)]
173 (vii) Party responsible for [] calculating the Rate(s) of Interest and Interest Amount(s) (if not the Calculation Agent):
(viii) Screen Rate Determination:
—ReferenceRate: [ ]
— Interest Determination [] Date(s):
—RelevantScreenPage: [ ]
(ix) ISDA Determination:
—FloatingRateOption: [ ]
—DesignatedMaturity: [ ]
—ResetDate: [ ]
(x) Margin(s): [+/-][ ]percent.perannum
(xi) MinimumRateofInterest: [ ]percent.perannum
(xii) MaximumRateofInterest: [ ]percent.perannum
(xiii)DayCountFraction: [ ]
(xiv) Fall back provisions, rounding [] provisions, denominator and any other terms relating to the method of calculating interest on Floating Rate Notes, if different from those set out in the Conditions:
18. Zero Coupon Note Provisions: [Applicable/NotApplicable] (If not applicable, delete the remaining sub- paragraphs of this paragraph)
(i) AmortisationYield: [ ]percent.perannum
(ii) Any other formula/basis of [] determining amount payable:
19. Index-Linked Interest Note [Applicable/Not Applicable] Provisions: (If not applicable, delete the remaining sub- paragraphs of this paragraph)
(i) Index/Formula: [give or annex details]
(ii) Party responsible for [] calculating the Rate(s) of Interest and/or Interest Amount(s) (if not the Calculation Agent):
174 (iii) Provisions for determining [] Coupon where calculation by reference to Index and/or Formula is impossible or impracticable or otherwise disrupted:
(iv) InterestPeriod(s): [ ]
(v) Specified Interest Payment [] Dates:
(vi) Business Day Convention: [Floating Rate Convention/Following Business Day Convention/Modified Following Business Day Convention/Preceding Business Day Convention/ other (give details)]
(vii) BusinessCentre(s): [ ]
(viii) MinimumRateofInterest: [ ]percent.perannum
(ix) MaximumRateofInterest: [ ]percent.perannum
(x) DayCountFraction: [ ]
20. Dual Currency Note Provisions: [Applicable/NotApplicable] (If not applicable, delete the remaining sub- paragraphs of this paragraph)
(i) Rate of Exchange/method of [give details] calculating Rate of Exchange:
(ii) Party, if any, responsible for [] calculating the Rate(s) of Interest and Interest Amount(s) (if not the Calculation Agent):
(iii) Provisions applicable where [] calculation by reference to Rate of Exchange impossible or impracticable:
(iv) Person at whose option [] Specified Currency(ies) is/ are payable:
PROVISIONS RELATING TO REDEMPTION
21. CallOption: [Applicable/NotApplicable] (If not applicable, delete the remaining sub- paragraphs of this paragraph)
(i) OptionalRedemptionDate(s): [ ]
(ii) Optional Redemption [ ]perCalculationAmount Amount(s) of each Note and method, if any, of calculation of such amount(s):
175 (iii) If redeemable in part:
(a) Minimum Redemption [ ]perCalculationAmount Amount:
(b) Maximum Redemption [ ]perCalculationAmount Amount:
(iv)Noticeperiod: [ ]
22. PutOption: [Applicable/NotApplicable] (If not applicable, delete the remaining sub- paragraphs of this paragraph)
(i) OptionalRedemptionDate(s): [ ]
(ii) Optional Redemption [ ]perCalculationAmount Amount(s) of each Note and method, if any, of calculation of such amount(s):
(iii)Noticeperiod [ ]
23. Final Redemption Amount of each [ ]perCalculationAmount Note:
24. Early Redemption Amount
Early Redemption Amount(s) per [] Calculation Amount payable on redemption for taxation reasons or on event of default and/or the method of calculating the same (if required or if different from that set out in the Conditions):
GENERALPROVISIONSAPPLICABLETOTHENOTES
25. Form of Notes: Bearer Notes: [Temporary Global Note exchangeable for a Permanent Global Note which is exchangeable for Definitive Notes in the limited circumstances specified in the Permanent Global Note]
[Temporary Global Note exchangeable for Definitive Noteson[ ]days’notice]
[Permanent Global Note exchangeable for Definitive Notes in the limited circumstances specified in the Permanent Global Note]
[Registered Notes]
26. Financial Centre(s) or other special [Not Applicable/give details. Note that this paragraph provisions relating to Payment relates to the date and place of payment, and not Dates: interest period end dates, to which sub-paragraphs 16 (ii), 17(iv) and 19(vii) relate]
176 27. Talons for future Coupons or [Yes/No. If yes, give details] Receipts to be attached to Definitive Notes (and dates on which such Talons mature):
28. Details relating to Partly Paid Notes: [Not Applicable/give details] amount of each payment comprising the Issue Price and date on which each payment is to be made and consequences (if any) of failure to pay, including any right of the Issuer to forfeit the Notes and interest due on late payment:
29. Details relating to Instalment Notes: [Not Applicable/give details] amount of each instalment, date on which each payment is to be made:
30. Other terms or special conditions: [NotApplicable/give details]
DISTRIBUTION
31. (i) If syndicated, names of [Not Applicable/give names] Managers:
(ii) Stabilising Manager (if any): [NotApplicable/give name]
32. If non-syndicated, name of Dealer: [NotApplicable/give name]
33. Additional selling restrictions: [NotApplicable/give details]
OPERATIONAL INFORMATION
34.ISINCode: [ ]
35.CommonCode: [ ]
36. Any clearing system(s) other than [Not Applicable/give name(s) Euroclear Bank S.A./N.V. and and number(s)] Clearstream Banking socie´te´ anonyme and the relevant identification number(s):
37. Delivery: Delivery[against/freeof]payment
38. AdditionalPayingAgent(s)(ifany): [ ]
[PURPOSEOFPRICINGSUPPLEMENT
This Pricing Supplement comprises the final terms required for issue and admission to trading on the [specify relevant stock exchange/market] of the Notes described herein pursuant to the S$10,000,000,000 Euro Medium Term Note Programme of SingTel Group Treasury Pte. Ltd. guaranteed by Singapore Telecommunications Limited.]
177 RESPONSIBILITY
The Issuer and the Guarantor accept responsibility for the information contained in this Pricing Supplement.
Signed on behalf of SingTel Group Treasury Pte. Ltd.:
By: ...... Duly authorised
Signed on behalf of Singapore Telecommunications Limited:
By: ...... Duly authorised
178 GENERAL INFORMATION
(1) Application has been made for permission to deal in, and for quotation of, any Notes which are agreed at the time of issue to be listed on the Official List of the SGX-ST. There can be no assurance that the application to the SGX-ST will be approved. Such permission will be granted when such Notes have been admitted to the Official List of the SGX-ST. Admission to the Official List of the SGX-ST and quotation of any Notes on the SGX-ST is not to be taken as an indication of the merits of the Issuer, the Guarantor, their respective subsidiaries and associated companies, the Programme or such Notes. The SGX-ST assumes no responsibility for the correctness of any of the statements made, opinions expressed or reports contained herein. The Notes will trade on the SGX-ST in a minimum board lot size of S$200,000 or its equivalent in other currencies so long as any of the Notes remain listed on the SGX-ST.
(2) Each of the Issuer and the Guarantor has obtained all necessary consents, approvals and authorisations in Singapore in connection with the establishment of the Programme and the giving of the Guarantee. The establishment of the Programme was authorised by resolutions of the Board of Directors of the Issuer passed on 22 July 2010 and the giving of the Guarantee by the Guarantor was authorised by resolutions of the Board of Directors of the Guarantor passed on 16 July 2010.
(3) Except as disclosed in this Offering Circular, there has been no significant change in the financial or trading position of the Guarantor or of the SingTel Group since 31 March 2010 and no material adverse change in the prospects of the Guarantor or of the SingTel Group since 31 March 2010.
(4) Each Bearer Note having a maturity of more than one year, Receipt, Coupon and Talon will bear the following legend: “Any United States person who holds this obligation will be subject to limitations under the United States income tax laws, including the limitations provided in Sections 165(j) and 1287(a) of the Internal Revenue Code”.
(5) Notes have been accepted for clearance through the CDP, Euroclear and Clearstream, Luxembourg systems (which are the entities in charge of keeping the records). In addition, the Issuer may make an application for any Restricted Notes to be accepted for trading in book entry form by DTC. Acceptance by DTC of such Certificates will be confirmed in the relevant Pricing Supplement. The Common Code, the International Securities Identification Number (“ISIN”), the Committee on the Uniform Security Identification Procedure Number (“CUSIP”) and (where applicable) the identification number for any other relevant clearing system for each Series of Notes will be set out in the relevant Pricing Supplement.
The address of CDP is 4 Shenton Way, #02-01 SGX Centre 2, Singapore 068807. The address of Euroclear is 1 Boulevard du Roi Albert II, B-1210 Brussels, Belgium and the address of Clearstream, Luxembourg is 42 Avenue JF Kennedy, L-1855 Luxembourg. The address of DTC is 55 Water Street, New York, New York 10041, USA. The address of any alternative clearing system will be specified in the applicable Pricing Supplement.
(6) There are no material contracts entered into other than in the ordinary course of the Issuer’s or the Guarantor’s business, which could result in any member of the SingTel Group being under an obligation or entitlement that is material to the Issuer’s or the Guarantor’s ability to meet its obligations to noteholders in respect of the Notes being issued.
(7) Where information in this Offering Circular has been sourced from third parties this information has been accurately reproduced and as far as each of the Issuer and the Guarantor is aware and is able to ascertain from the information published by such third parties no facts have been omitted which would render the reproduced information inaccurate or misleading. The source of third party information is identified where used.
179 (8) The issue price and the amount of the relevant Notes will be determined, before filing of the relevant Pricing Supplement of each Tranche, based on the prevailing market conditions. The Issuer does not intend to provide any post-issuance information in relation to any issues of Notes.
(9) For so long as Notes may be issued pursuant to this Offering Circular, the following documents will be available, during usual business hours on any weekday (Saturdays and public holidays excepted), for inspection at the registered office of the Issuer:
(i) the English Law Trust Deed (which includes the form of (a) the Global Notes governed under English law, (b) the definitive Bearer Notes governed under English law and (c) the Certificates, the Coupons, the Receipts and the Talons relating to Notes governed under English law);
(ii) the Singapore Law Trust Deed (which includes the form of (a) the Global Notes governed under Singapore law, (b) the definitive Bearer Notes governed under Singapore law and (c) the Certificates, the Coupons, the Receipts and the Talons relating to Notes governed under Singapore law);
(iii) the Agency Agreement;
(iv) the Memorandum and Articles of Association of the Issuer and the Guarantor;
(v) the latest published annual report and audited accounts of the Guarantor and the SingTel Group;
(vi) each Pricing Supplement (save that the relevant Pricing Supplement relating to a Note which is neither admitted to trading on a regulated market within the European Economic Area nor offered in the European Economic Area in circumstances where a prospectus is required to be published under the Prospectus Directive will only be available for inspection by a holder of such Note and such holder must produce evidence satisfactory to the Issuer and the Issuing and Paying Agent as to its holding of Notes and identity);
(vii) a copy of this Offering Circular together with any Supplement to this Offering Circular or further Offering Circular; and
(viii) all reports, letters and other documents, balance sheets, valuations and statements by any expert any part of which is extracted or referred to in this Offering Circular.
(10) Copies of the latest annual report and consolidated accounts of the Guarantor and the latest interim consolidated accounts of the Guarantor may be obtained, and copies of the English Law Trust Deed, the Singapore Law Trust Deed and the Agency Agreement will be available for inspection, at the specified offices of each of the Paying Agents during normal business hours, so long as any of the Notes is outstanding.
(11) Deloitte & Touche LLP of 6 Shenton Way, #32-00 DBS Building Tower Two, Singapore 068809 have audited, and rendered unqualified audit reports on, the accounts of the Guarantor and the SingTel Group for the three years ended 31 March 2010.
180 INDEX TO FINANCIAL STATEMENTS
Page
Audited financial statements of SingTel Group for the financial year ended 31 March 2010
Directors’report ...... F-3
Statementofdirectors ...... F-11
Independent auditors’report ...... F-12
Consolidated income statement ...... F-13
Consolidated statement of comprehensive income ...... F-14
Statements of financial position ...... F-15
Statementsofchangesinequity ...... F-17
Consolidated statement of cash flows...... F-21
Notes to the financial statements ...... F-24
Audited financial statements of SingTel Group for the financial year ended 31 March 2009
Directors’report ...... F-118
Statementofdirectors ...... F-126
Independent auditors’report ...... F-127
Consolidated income statement ...... F-128
Balancesheets...... F-129
Statementsofchangesinequity ...... F-131
Consolidated cash flow statement ...... F-134
Notes to the consolidated cash flow statement ...... F-136
Notes to the financial statements ...... F-137
Audited financial statements of SingTel Group for the financial year ended 31 March 2008
Directors’report ...... F-226
Statementofdirectors ...... F-235
Independent auditors’report ...... F-236
Consolidated income statement ...... F-237
Balancesheets...... F-238
Statementsofchangesinequity ...... F-240
Consolidated cash flow statement ...... F-243
Notes to the financial statements ...... F-245
F-1 AUDITED FINANCIAL STATEMENTS OF SINGTEL GROUP FOR THE FINANCIAL YEAR ENDED 31 MARCH 2010
The information in this section has been reproduced from the audited fi nancial statements of SingTel Group for the fi nancial year ended 31 March 2010 and has not been specifi cally prepared for inclusion in this Offering Circular.
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