Singtel recognises the importance of providing the Board with accurate and relevant information on a timely basis. Hence, Board members receive monthly financial and business reports from Singtel’s Management. Such reports compare Singtel’s actual performance against the budget, and highlight key business drivers/indicators and major issues that are relevant to Singtel’s performance, position and prospects.
For the financial year ended 31 March 2013, Singtel’s Group CEO and Group CFO have provided written confirmation to the Board on the integrity of Singtel’s financial statements and on the efficiency and effectiveness of Singtel’s risk management and internal control systems, addressing financial, operational and compliance risks. This certification covers Singtel and the subsidiaries which are under Singtel’s management control.
Singtel Internal Audit comprises a team of 53 staff members, including the Group Chief Internal Auditor who reports to the AC functionally and to the Group CEO administratively. Singtel Internal Audit is a member of the Singapore chapter of the Institute of Internal Auditors (IIA) and adopts the International Standards for the Professional Practice of Internal Auditing (the IIA Standards) laid down in the International Professional Practices Framework issued by the IIA. Singtel Internal Audit successfully completed its external Quality Assurance Review in 2010 and continues to meet or exceed the IIA Standards in all key aspects.
Singtel Internal Audit adopts a risk-based approach in formulating the annual audit plan which aligns its activities to the key strategies and risks across the Group’s business. This plan is reviewed and approved by the AC. The reviews performed by Singtel Internal Audit are aimed at assisting the Board in promoting sound risk management, robust internal controls and good corporate governance, through assessing the design and operating effectiveness of controls that govern key business processes and risks identified in the overall risk framework of the Group. Singtel Internal Audit’s reviews also focus on compliance with Singtel’s policies, procedures and regulatory responsibilities, performed in the context of financial and operational, revenue assurance and information systems reviews. Singtel Internal Audit works closely with Management in its internal consulting and control advisory role to promote effective risk management, internal control and governance practices in the development of new products/services, and implementation of new/enhanced systems and processes. Singtel Internal Audit also collaborates with the internal audit functions of Singtel’s associates to promote joint reviews and the sharing of knowledge and/or best practices.
To ensure that the internal audits are performed effectively, Singtel Internal Audit recruits and employs suitably qualified professional staff with the requisite skillsets and experience. Singtel Internal Audit provides training and development opportunities for its staff to ensure their technical knowledge and skillsets remain current and relevant.
The Board is responsible for the initial appointment of external auditors. Shareholders then approve the appointment at Singtel’s AGM. The external auditors hold office until their removal or resignation. The AC assesses the external auditors based on factors such as the performance and quality of their audit and the independence of the auditors, and recommends their appointment to the Board. Pursuant to the requirements of the SGX, an audit partner may only be in charge of a maximum of five consecutive annual audits and may then return after two years. Deloitte & Touche LLP has met this requirement and the current Deloitte & Touche LLP audit partner for Singtel took over from the previous audit partner with effect from 1 April 2011. Singtel has complied with Rules 712 and 715 of the Listing Manual issued by SGX in relation to its auditors.
In order to maintain the independence of the external auditors, Singtel has developed policies regarding the types of non-audit services that the external auditors can provide to the Singtel Group and the related approval processes. The AC has also reviewed the non-audit services provided by the external auditors during the financial year and the fees paid for such services. The AC is satisfied that the independence of the external auditors has not been impaired by the provision of those services. The external auditors have also provided a confirmation of their independence to the AC.
The Board has overall responsibility for the governance of risk and exercises oversight of the material risks in the Group’s business. During the financial year ended 31 March 2013, the RC assisted the Board in the oversight of the Group’s risk profile and policies, adequacy and effectiveness of the Group’s risk management system including the identification and management of significant risks, and reports to the Board on material matters, findings and recommendations pertaining to risk management. The AC provides oversight of the financial reporting risk and the adequacy and effectiveness of the Group’s internal control and compliance systems.
The Board has approved a Group Risk Framework for the identification of key risks within the business. This Framework defines 28 categories of risks ranging from environmental to operational and management decision-making risks. The Group’s risk management and internal control framework is aligned with the ISO 31000:2009 Risk Management framework and the Committee of Sponsoring Organisations of the Treadway Commission (COSO) Internal Controls Integrated Framework. Major incidents and violations, if any, are also reported to the Board to facilitate the Board’s oversight of the effectiveness of crisis management and the adequacy of mitigating measures taken by Management to address the underlying risks.
The identification and management of risks are delegated to Management who assumes ownership and day-to-day management of these risks. Management is responsible for the effective implementation of risk management strategy, policies and processes to facilitate the achievement of business plans and goals within the risk tolerance established by the Board. Key business risks are proactively identified, addressed and reviewed on an ongoing basis.
The Risk Management Committee, comprising relevant members from the Senior Management team, is responsible for setting the direction of corporate risk management and monitoring the implementation of risk management policies and procedures including the adequacy of the Group’s insurance programme. The Risk Management Committee reports to the RC on a regular basis.
During the financial year, the RC established a Risk Appetite Statement and Risk Tolerance Framework to provide guidance to the Management on key risk parameters. The significant risks in the Group’s business, including mitigating measures, were also reviewed by the RC on a regular basis and reported to the Board. Risk registers are maintained by the business and operational units which identify the key risks facing the Group’s business and the internal controls in place to manage those risks.
Internal and external auditors conduct audits that involve testing the effectiveness of the material internal control systems in the Group addressing financial, operational and compliance risks. Any material non-compliance or lapses in internal controls together with remedial measures recommended by internal and external auditors are reported to the AC. The AC also reviews the adequacy and timeliness of the actions taken by Management in response to the recommendations made by the internal and external auditors. Control self-assessments in key areas of the Group’s operations are conducted by Management on a periodic basis to evaluate the adequacy and effectiveness of the risk management and internal control systems, including quarterly and annual certifications by Management to the AC and the Board respectively on the integrity of financial reporting and the adequacy and effectiveness of the risk management, internal control and compliance systems.
Based on the framework established and the reviews conducted by Management and the internal and external auditors, the Board opines, with the concurrence of the AC, that there were adequate controls in place within the Group addressing material financial, operational and compliance risks to meet the needs of Singtel in its current business environment as at 31 March 2013.
The system of internal control and risk management established by Management provides reasonable, but not absolute, assurance that Singtel will not be adversely affected by any event that can be reasonably foreseen as it strives to achieve its business objectives. However, the Board also notes that no system of internal controls and risk management can provide absolute assurance in this regard, or absolute assurance against poor judgement in decision making, human error, losses, fraud or other irregularities.
Further details of the Group’s Risk Management Philosophy and Approach can be found here.
Singtel remains committed to maintaining high standards of corporate disclosure and transparency. Singtel’s communications with shareholders, the investment community and media take an open and non-discriminatory approach. Singtel provides regular and relevant information regarding the Group’s performance, progress and prospects, to assist shareholders and investors in their investment decisions.
Singtel makes timely disclosures of any new material information to the SGX and ASX. These filings are also posted on Singtel’s Investor Relations (IR) website, allowing investors to be kept abreast of business and strategic developments.
Singtel reports financial results on a quarterly basis: within 45 days after the end of each financial quarter for its first three quarters, and within 60 days after the end of the financial year. The results announcements contain detailed financial disclosures and in-depth analyses of key value-drivers and metrics for the Group’s businesses. Singtel also provides outlook guidance for its businesses at the start of each financial year, and either affirms or updates the guidance every quarter to accurately reflect prevailing market conditions.
The Singtel IR website is the key resource of information for the investment community. In addition to the quarterly financial results materials, it contains a wealth of investor-related information on Singtel, including investor presentations, webcasts of earnings presentations, transcripts of earnings conference calls, annual reports, upcoming events, shares and dividend information and factsheets.
Singtel proactively engages shareholders and the investment community through group and one-on-one meetings, conference calls, email communications, investor conferences and roadshows. In FY2013, Singtel met with more than 400 investors in over 200 meetings and conference calls in Singapore, Australia and other global financial centres to share the Group’s business strategy, operational and financial performance and business prospects. While these meetings are largely undertaken by Singtel’s Senior Management, the Chairman and certain Board members also meet with investors every year.
To ensure a two-way flow of information, Singtel commissions an annual survey of investors’ perceptions, to solicit feedback from the investment community, including shareholders, on a range of strategic and topical issues. The survey provides invaluable insights to the Board and Management on investors’ views. It also helps us identify areas of improvement for investor communication.
Singtel strongly encourages and supports shareholder participation at AGMs. Singtel delivers the Notice of AGM and related information a month ahead, providing ample time for shareholders to review the Notice of AGM and appoint proxies to attend the AGM if they wish. The Notice of AGM is also advertised in key Singapore media for the benefit of shareholders. Singtel holds its AGM at a central location in Singapore with convenient access to public transportation. A registered shareholder who is unable to attend may choose to appoint up to two proxies to attend and vote on his behalf. Under Singtel's Articles of Association, the Central Provident Fund Board and CHESS Depositary Nominees Pty Ltd may each appoint more than two proxies.
At each AGM, the Group CEO delivers a presentation to update shareholders on Singtel’s progress over the past year. The Directors and Senior Management are in attendance to address queries and concerns about Singtel. Singtel’s external auditors also attend to help address shareholders’ queries relating to the conduct of the audit and the preparation and content of the auditors’ reports. All resolutions at Singtel’s AGM and Extraordinary General Meeting are voted on by electronic poll so as to better reflect shareholders’ shareholding interests and ensure greater transparency. The poll voting results, in addition to the proxy voting results, are presented to the audience and subsequently filed with the stock exchanges. Voting in absentia by mail, facsimile or email is currently not permitted to ensure proper authentication of the identity of shareholders and their voting intent.
Singtel has won recognition from leading business journals and investor associations for its strong emphasis and proactive approach to shareholder communication and engagement.
Singtel’s Securities Transactions Policy states that Directors and officers of the Group should not deal in Singtel shares during the period commencing two weeks before the announcement of Singtel’s financial statements for each of the first three quarters of the financial year, and during the period commencing one month before the announcement of the financial statements for the full financial year and ending on the date of the announcement of the relevant results. The policy also discourages trading on shortterm considerations and reminds Directors and officers of their obligations under insider trading laws. Directors and officers of the Group wishing to deal in Singtel shares during a closed period must secure prior written approval of the Chairman (in the case of Directors of Singtel), the Lead Independent Director (in the case of the Chairman) or the Group CEO (in the case of directors of Singtel subsidiaries, top management members and persons who are in attendance at Board and top management meetings). Requests for written approval must contain a full explanation of the exceptional circumstances and proposed dealing. If approval is granted, trading must be undertaken in accordance with the limits set out in the written approval. Directors are to consult with the Company Secretary/Group CEO before trading in Singtel shares to ensure compliance with securities laws. The Board is kept informed when a Director trades in Singtel securities. A summary of Singtel’s Securities Transactions Policy is available in the Corporate Governance section of the Singtel corporate website.
In relation to shares of other companies, Directors are to refrain from trading in shares of Singtel’s listed associates when in possession of material price-sensitive information relating to such associates. Directors are also to refrain from having any direct or indirect financial interest in Singtel’s competitors that might or might appear to create a conflict of interest or affect the decisions Directors make on behalf of Singtel.
There are formal policies and procedures to ensure that Singtel complies with its disclosure obligations under the listing rules of the SGX and ASX. A Market Disclosure Committee is responsible for Singtel’s Market Disclosure Policy. The policy contains guidelines and procedures for internal reporting and decision making with regard to the disclosure of material information.
There are no material contracts entered into by Singtel or any of its subsidiaries that involve the interests of the Group CEO, any Director, or the controlling shareholder, Temasek Holdings (Private) Limited.
Singtel has a code of internal corporate governance practices, policy statements and standards as described in this report, and makes this code available to Board members as well as employees of the Group. The processes and standards in the code are intended to enhance investor confidence and rapport, and to ensure that decision-making is properly carried out in the best interests of the Group. The code is reviewed from time to time and updated to reflect changes to the existing systems or the environment in which the Group operates.
Singtel also has a code of conduct that applies to all employees. The code sets out principles to guide employees in carrying out their duties and responsibilities to the highest standards of personal and corporate integrity when dealing with Singtel, its competitors, customers, suppliers and the community. The code of conduct covers areas such as workplace health and safety, conduct in the workplace, business conduct, protection of Singtel’s assets, proprietary information and intellectual property, confidentiality, conflict of interest, and non-solicitation of customers and employees. The code is posted on Singtel’s internal website and a summarised version is accessible from the Singtel corporate website. Policies and standards are clearly stipulated to guide employees in carrying out their daily tasks.
Singtel has established an escalation process so that the Board of Directors, Senior Management, and internal and external auditors are kept informed of corporate crises in a timely manner, according to their severity. Such crises may include violations of the code of conduct and/or applicable laws and regulations, as well as loss events which have or are expected to have a significant impact, financial or otherwise, on the Group’s business and operations.
The Group is committed to a high standard of ethical conduct and adopts a zero tolerance approach to fraud. Singtel undertakes to investigate complaints of suspected fraud in an objective manner and has put in place a whistle-blower policy and procedures which provide employees and other external parties with well-defined and accessible channels within the Group, including a direct channel to Singtel Internal Audit and a whistle-blower hotline service independently managed by an external service provider, for reporting suspected fraud, corruption, dishonest practices or other similar matters. The policy aims to encourage the reporting of such matters in good faith, with the confidence that employees making such reports will be treated fairly and, to the extent possible, protected from reprisal. On an ongoing basis, the whistle-blower policy is covered during staff training and periodic communication to all staff as part of the Group’s efforts to promote awareness of fraud control. All whistleblower complaints are investigated independently by Singtel Internal Audit or an independent investigation committee as appropriate; and the outcome of each investigation is reported to the AC for review.