Growth withSynergy

Singapore Press Holdings

igpr rs odnsAnnualReport2003 Singapore PressHoldings Annual Report 2003

Growth with Synergy

1000 Toa Payoh North, News Centre, Singapore 318994 www.sph.com.sg 1 Growth With Synergy 42 Financial Review 6 Chairman’s Statement 43 Group Simplified Financial Position 10 Group Financial Highlights 44 Segmental Operating Revenue 12 Board of Directors / Board Committee Members Segmental Pre-Tax Profit 16 Executive Officers 45 After-Tax Profit 18 Review by Chief Executive Officer Earnings Per Share 24 Operational Data Operation Margin and Return on Operating Revenue 27 Corporate Information Return on Shareholders’ Funds and Return on Assets Financial Calendar 46 Revenue Composition 28 Significant Events Cost Composition 47 Gross Dividend Per Share 32 Corporate Governance Net Dividend 48 Value Added Statement 49 Group Half-Yearly Results

50 Financial Report 52 Directors’ Report 60 Statement by Directors 61 Auditors’ Report 62 Audited Financial Statements 105 Shareholding Statistics 110 Overseas Bureaux/Offices 112 Properties of the Group 113 Notice of Annual General Meeting 119 Proxy Form Synergy

Designed by Epigram Singapore Press Holdings | Annual Report 2003 | Growth in Synergy 1

in Vision,

From the head honcho down to the journalist, sales canvasser and administrative assistant, everyone in SPH realises that by pulling their strengths together, the Company can forge ahead and remain the leading multimedia content provider in Asia and beyond.

The key to this is effective teamwork: combining diverse talents, abilities and joining forces to produce an effect greater than the sum of its parts. Teams sharing a common vision create synergy, and synergy, backed with an impressive track record, brings optimal results – and motivational satisfaction.

That is why SPH strongly believes in growth with synergy. 2 GROWTH IN SYNERGY Singapore Press Holdings | Annual Report 2003 | Growth in Synergy 3

... Expertise, By any reckoning, SPH MediaWorks has done well despite a bumpy ride in its first two years. Its Channels U and i have clawed a good chunk of the TV audience market share and ratings are set to improve with newer and better offerings – thanks to back-up from the Group’s resources, expertise and strong networking support. The recent smooth management transition testifies to the symbiotic link with headquarters and synergistic value.

Within the newsrooms, convergence is the buzzword. Many of SPH’s 1,000 journalists are “amphibious”, just as comfortable writing for newspapers as they are telling their stories in front of the camera to deliver more insightful and impactful news to its growing readership and audience.

SPH staff and journalists are the envy of many others. With a stable of 14 newspapers and six magazines, a broadcasting station offering two free-to-air channels, two joint-venture radio stations, and an Internet arm, SPH staff have more room and flexibility to venture into new fields – from journalism, marketing, finance, IT to human resources.

As the Group’s business activities grow in scope and depth, throwing up new opportunities, it can leverage on the expertise and talents from its family of some 3,500 employees.

That is its cutting edge for clinching the job to publish SilverKris, the popular in-flight magazine of Singapore Airlines, as it is able to tap some of its top journalists from various ... Front-End Operations, newsrooms as editorial consultants. This is just an example of talent-crossing which gives SPH the win-win formula over its competitors in giving value-added services. 4 GROWTH IN SYNERGY Singapore Press Holdings | Annual Report 2003 | Growth in Synergy 5

... Facilities,

SPH advertisers are getting greater value for their advertising dollar with attractive package deals for advertising across the wide spectrum of SPH print and TV products. Such cross- advertising increases the reach and visibility of the advertisers’ products and services, and enhances the effectiveness of their advertising.

Advertisers also enjoy better service at SPH with experienced sales staff who can customise packages to meet different advertising needs. Its creative talents also help to put more zing into the advertisements to drive home the message more effectively.

SPH moved its key operations to the new high-tech headquarters last year, enabling it to draw on common assets and talents, consolidate its processes and forge a common culture. Common facilities now include the Information Resource Centre – which is a merger of the English and Malay Newspapers Division library previously at Times House in Kim Seng Road, and the Chinese Newspapers Division library, formerly at the Genting Lane News Centre – a modern gym and a 300-seat Auditorium.

This has resulted in greater efficiency, smoother workflow and higher productivity. For staff working under the same roof, it feels like working for a big happy family business, all sharing the same aims to grow the Company. And having fun doing it too. ... and Service! 6 GROWTH WITH SYNERGY Singapore Press Holdings | Annual Report 2003 | Chairman’s Statement 7

It has been a difficult, but reasonably satisfactory year year under review, clearly showing that more advertisers for the Company. The modest recovery achieved in the and viewers like what they are getting on the Chinese Chairman’s Statement first half of the financial year was abruptly reversed in Channel U and English Channel i. Its innovative the second half as the adverse impact of SARS set in. programming, attractive promotions and breakthrough A tight rein on cost enabled us to realise a satisfactory ideas in local productions have pulled in more viewers. profitability in spite of the economic difficulties and We are committed to building MediaWorks into a competition. regional television powerhouse.

The Group’s net profit for the year ended August 31 Property and Investments 2003 was S$378.7 million, up 23.2 per cent from last The newly completed wing of Paragon started trading year, while operating revenue was marginally lower in September 2003. All the retail space has been leased. at S$897.8 million. If we were to adjust our share With a total of 610,000 square feet of net lettable space, of MobileOne’s profit, which has been re-classified the property is expected to yield a return on equity of under long-term investment and a one-time special more than 8 per cent. The new extension will add more contribution, the profit would have been higher. than S$20 million in revenue annually.

Newspapers Times House, a landmark press building that served as Print advertising revenue for the year fell 2.8 per cent the headquarters of The Straits Times and other English to S$595.4 million, with classified and recruitment and Malay newspapers for 45 years, has been put up advertising being the hardest hit as companies in for sale by tender as there has been a renewed buying Singapore restructured in the downturn. Display interest in freehold land by developers. We remain advertising was flat but the telecommunication, fashion committed to divesting our non-core property assets and beauty and fast moving consumer goods sectors at the right price. registered some growth. Property, banking and finance sectors were weak. Circulationrevenue of S$180.3 Investment income for the year was lower at S$39.6 million, after absorption of S$6.6 million in GST, million because of the weak investment climate. was 0.6 per cent lower than last year. Exceptional gains included a S$187.7 million recognition from the partial sale of our stake in MobileOne, partially The steady circulation revenue is due to our ongoing offset by a S$50 million provision in the valuation of efforts to improve the quality of our newspapers to the amalgamated Paragon. meet the needs of our sophisticated readers. Several of our newspapers, including The Straits Times Life! Dividends and Share Buy Backs section, Lianhe Zaobao, Shin Min Daily News and, The Board is committed to returning surplus cash more recently, The Sunday Times, were revamped to shareholders. A final dividend of 80 cents per to provide a much more substantial read. Although share, comprising 50 cents normal and 30 cents losses from Streats increased slightly, it is heartening special, has been recommended for approval at to note that its monthly revenue has doubled after the coming Annual General Meeting (AGM) on it was redesigned in November 2002. December 5. Together with the 50 cents per share paid out in April, the S$1.30 dividend per share, Broadcasting is reasonable in a difficult year such as this, and Two years on, broadcasting subsidiary SPH MediaWorks should satisfy most shareholders. Our aim is to continued to make in-roads and win market share. Its reward shareholders who stay with us for the revenue and audience reach improved markedly in the long term. 8 GROWTH WITH SYNERGY Singapore Press Holdings | Annual Report 2003 | Chairman’s Statement 9

Another way of distributing cash to shareholders The Board has decided to recommend Dr Philip N. Pillai The move into the new headquarters is through share buy backs. We bought back and Mr Sum Soon Lim as new directors. 1,050,000 shares during the year. Since the share buy back mandate was approved, we have bought They will stand for election at this AGM. I am certain back some 4,500,000 shares. that with their diverse experience and knowledge, they in Toa Payoh North in late 2001 brought will serve the Group well. Prospects Should the Singapore economy grow next year, the Finally, I would like to thank my fellow Directors for Group’s advertising revenue is expected to grow in their support and guidance during my first year as some 2,300 staff, previously scattered tandem. However, there are no clear signs yet that the Chairman of the Board. I also want to thank staff, we are on the road to higher growth. It is therefore readers, advertisers, vendors and business associates difficult to forecast the overall performance of the for their commitment during these testing times and Group in the current financial year. helping us stay ahead of the competition. I look forward in different centres, and critical front- to their continued support. Directorate The renewal process at the Board level is continuing. Mr Lee Hee Seng and Mr Wee Cho Yaw have indicated end operations and corporate services their intention not to seek re-election at the coming AGM.

Both of them have been on the Board since SPH was established in 1984, and prior to that, had served on the under one roof, for the first time... boards of the Chinese newspaper companies in the Group. On behalf of the Board, Management and staff of SPH, I would like to extend our deepest appreciation to both of them for their invaluable contributions during Lim Chin Beng their tenure with the Board. Chairman

... the extended family at Toa Payoh has led to better communication, work flow, a sense of belonging among staff – and more synergy. 10 GROWTH WITH SYNERGY Singapore Press Holdings | Annual Report 2003 | Group Financial Highlights 11

Group Financial Highlights

2003 2002 Change S$’000 S$’000 % 897,816 Operating Revenue

Operating revenue 897,816 903,525 (0.6) 903,525

Profit from operations 290,896 311,266 (6.5) Profit before exceptional items 317,144 355,271 (10.7) 290,896 Profit before taxation 438,904 357,474 22.8 Profit from Operations Profit after taxation 379,135 307,171 23.4 311,266 Minority interests (399) 226 NM Profit attributable to shareholders 378,736 307,397 23.2 378,736 Shareholders’ interests 2,247,736 2,241,538 0.3 Profit Attributable to Shareholders Total assets 3,368,245 3,352,669 0.5 307,397 Total liabilities 1,120,509 1,111,131 0.8 Annual dividends for the financial year (net) 374,739* 286,744 30.7 2,247,736 Per share data Shareholders’ Interest Net tangible assets (S$) 6.08 6.06 0.3 2,241,538 Profit before taxation (S$) 1.19 0.97 22.7 Profit attributable to shareholders (S$) 1.02 0.83 22.9 Gross annual dividends for the financial year (cents) 130* 99 30.8 3,368,245 Dividend cover for the financial year (times) 1.0 1.1 (9.1) Total Assets 3,352,669 Value added Per employee (S$) 167,229 157,548 6.1 Per $ employment costs (S$) 2.49 2.48 0.4 S$’000 Per $ investment in fixed assets (before depreciation) (S$) 0.68 0.69 (1.4) Per $ operating revenue (S$) 0.69 0.70 (1.4) Year 2003 Profitability ratios % points Operating margin (%) 32.4 34.5 (2.1) Year 2002 Return on operating revenue (%) 42.2 34.0 8.2 Return on shareholders’ funds (%) 16.8 13.7 3.1

* Included proposed final dividend of 50 cents per share and final special dividend of 30 cents per share,

less tax at 22%, to be approved by shareholders at the Annual General Meeting on December 5, 2003.

NM Not meaningful 12 GROWTH WITH SYNERGY Singapore Press Holdings | Annual Report 2003 | Board of Directors / Board Committee Members 13

Board of Directors / Board Committee Members

Lim Chin Beng / Chairman Alan Chan Heng Loon / Director and Michael Fam Yue Onn / Director Lee Hee Seng / Director Wee Cho Yaw / Director Mr Lim joined the Board on October 1, 2001 Chief Executive Officer Dr Fam was appointed to the Board on Mr Lee was appointed a director on August 4, Mr Wee was appointed director on August 8, and was appointed Chairman of SPH on Mr Chan was appointed a director and Group August 8, 1984. He is Executive Chairman 1984. He is Deputy Chairman of Overseas 1984. He is Chairman of United Overseas Bank December 13, 2002. He is also Chairman of President of SPH on July 1, 2002 and became of Fraser and Neave Limited, Chairman of Union Enterprise Ltd, Chairman of the Board of Ltd, Far Eastern Bank Ltd, United Overseas Singapore Technologies Aerospace Ltd, its Chief Executive Officer on January 1, 2003. Asia Pacific Breweries Limited and Centrepoint Trustees of the Singapore Business Federation Insurance Ltd, United International Securities The Ascott Group Ltd and, recently, Valuair He is also a director of StarHub Pte Ltd and Properties Ltd and a director of Times and Governor of the Lien Foundation. Ltd, Haw Par Corporation Ltd, Overseas Union Limited. He is a director of CapitaLand Ltd Singapore Power Ltd, and Chairman of Publishing Ltd. He is also a member of the Enterprise Ltd, United Industrial Corporation Ltd, and StarHub Pte Ltd, and companies in PowerGas Ltd. He is a member of the Council of Presidential Advisers, Singapore. Mr Lee was Chairman of Overseas Union Singapore Land Ltd, United Overseas Land the Pontiac Land Group. INSEAD Singapore Council and the Bank Ltd (OUB), and Senior Deputy Chairman and Hotel Plaza Ltd. Board of Trustees, Courage Fund. He was formerly Chairman of Singapore Airlines of United Overseas Bank Ltd after its acquisition He also serves as a director of the Press Limited, Housing Development Board, Mass of OUB. He was also a director of various major He is Honorary President of Singapore Chinese Foundation of Singapore Ltd and is a member He has more than 24 years’ experience in Rapid Transit Corporation, and the Council of public companies, including Times Publishing Ltd. Chamber of Commerce & Industry in addition of the Public Service Commission. the civil service, spanning the Civil Aviation Nanyang Technological University, and a direc- to being Chairman of the Board of Trustees, Department, the Ministries of Home Affairs, tor of Oversea-Chinese Banking Corporation Mr Lee has a distinguished public service Chinese Development Assistance Council and He was formerly Managing Director and Defence, Foreign Affairs and the Prime Limited, Temasek Holdings (Pte) Ltd, the Public record, having served as Chairman of the several other civic organizations. He is also a Deputy Chairman of Singapore Airlines Ltd, Minister’s Office. Prior to joining SPH, he Utilities Board and Economic Development Board. Housing & Development Board, the Public member of the Asia-Pacific Advisory Committee Chairman of the Singapore Tourist Promotion was the Permanent Secretary, Ministry of Service Commission, the Presidential Elections New York Stock Exchange. Board and Singapore’s ambassador to Japan. Transport. He was also a director of DBS Dr Fam holds a Bachelor of Engineering Committee and the Lee Kuan Yew Exchange Group Holdings Ltd and PSA Corporation Ltd. (First Class Hons) in Civil Engineering from Fellowship, amongst others. Mr Wee was previously a director of Times Mr Lim graduated from the University of the University of Western Australia; and Publishing Ltd. A career banker, Mr Wee Malaya (Singapore) in Economics, and Mr Chan was a President Scholar and has Honorary Degrees of, Doctor of Laws from Mr Lee is an accountant and banker by received Chinese high school education. Harvard Business School’s Advanced been awarded the Public Service Medals the National University of Singapore, Doctor qualification. He is a Fellow of various Management Program. (Gold and Silver). He graduated from the of Engineering from the University of Western professional banking and accounting bodies Ecole Nationale de l’Aviation Civile, France Australia, and Doctor of Letters from the in Singapore, UK and Australia. and holds an MBA (with distinction) from Nanyang Technological University. He was INSEAD, France. appointed a member of the Order of Nila Utama, First Class, in 1990. 14 GROWTH WITH SYNERGY Singapore Press Holdings | Annual Report 2003 | Board of Directors / Board Committee Members 15

Tang I-Fang / Director Cheong Choong Kong / Director Yeo Ning Hong / Director Lee Ek Tieng / Director Ngiam Tong Dow / Director Lim Kim San / Executive Chairman Mr Tang was appointed a Director on August 8, Dr Cheong has been a director since March 1, Dr Yeo was appointed to the Board on March 15, Mr Lee was appointed a director on March 15, Mr Ngiam was appointed to the Board on (up to December 13, 2002) / Senior Advisor 1984. He is Executive Chairman of WBL 1997. He is also Chairman and Executive 2001. He is a director of DBS Bank Ltd and DBS 2001. He is the Group Managing Director of the March 15, 2001. He is Chairman of HDB Mr Lim was appointed Senior Advisor on Corporation Ltd, Chairman of United Engineers Director of Oversea-Chinese Banking Group Holdings Ltd. He also serves on several Government of Singapore Investment Corporation Pte Ltd and a director of United January 1, 2003, upon stepping down as Ltd, Wearnes International (1994) Ltd and Deputy Corporation Ltd and Chairman of the National business, sports and civic organisations, including Corporation Pte Ltd and a director of Fraser & Overseas Bank Ltd, Yeo Hiap Seng Ltd and Executive Chairman after 14 years at the helm Chairman of The Straits Trading Company Ltd. University of Singapore. the Singapore-US Business Council, Singapore Neave Ltd. He is also a member of the Lee Kuan Majulah Connection Ltd. of the Group. He reshaped the organisational He is also a director of Lee Kuan Yew Exchange Totalisator Board, Singapore Symphony Yew Exchange Fellowship and a director of the and management structure of the Group, Fellowship Ltd, OCBC, Wearnes & Walden He was previously Deputy Chairman and Orchestra Trust, SEA Games Federation, and Lee Kuan Yew Scholarship Fund. He was formerly a director of Temasek and transformed it into a multi-platform Investments (Singapore) Ltd and several over- Chief Executive Officer of Singapore Airlines Singapore National Olympic Council. He is also Holdings Pte Ltd, Overseas Union Bank Ltd, media organisation. seas companies. He was formerly a director of Ltd, Chairman of SIA Engineering Co Ltd and a member of the Temasek Advisory Panel, and He was previously Chairman of the Public Development Bank of Singapore Ltd and Times Publishing Ltd. Singapore Airport Terminal Services Ltd and an Advisor to Far East Organisation. Utilities Board and Temasek Holdings Pte Ltd, Singapore Airlines Ltd. He is also Chairman of Times Publishing director of Air New Zealand Ltd, Ansett Head of Civil Service and Permanent Secretary Ltd, Press Foundation of Singapore Ltd and the

He was awarded the Singapore Businessman Holdings Ltd and Virgin Atlantic Airways Ltd. Dr Yeo is a former Cabinet Minister and (Special Duties) in the Prime Minister’s Office, Mr Ngiam has a distinguished public service Council of Presidential Advisors, Singapore, and of the Year in 1989. In public services, he He has also served as a member of the has served in the Ministry of Defence and as well as Deputy Chairman of the Monetary career, having served as Chairman of the President of the National Heart Council. has led several UN Economic Missions for Singapore International Foundation and Ministry of Communications and Information. Authority of Singapore. Housing & Development Board, Central Asian countries and was Chairman of the Singapore-US Business Council. Provident Fund Board, Economic Development Prior to joining the Group, Mr Lim served as Economic Development Board (1968 to 1972) He was previously Chairman of PSA Corporation Mr Lee holds a Bachelor’s Degree in Engineering Board, Telecommunications Authority of Cabinet Minister in ministries as diverse as and its Executive Committee (1975 to 1986); Dr Cheong holds a BSc (First Class Honours) Ltd, and Executive Chairman of the Singapore from the University of Malaya (Singapore) and Singapore, and Deputy Chairman of the National Development, Finance, Defence, Chairman of Jurong Town Corporation (1979 in Mathematics from the University of Adelaide, Technologies Group of Companies. has a Diploma in Public Health Engineering from Board of Commissioners of Currency. He Education, Environment and Communications. to 1986); and Chairman of the Sub-Committee a MSc and a PhD in Mathematics from the the University of Newcastle-Upon-Tyne (UK). He was also Permanent Secretary of the Prime He was also Chairman of Housing & Development on Service Sector of Singapore Economic Australian National University in Canberra. Dr Yeo holds a MSc, Singapore and a Doctorate is a member and Fellow of various professional Minister’s Office, the Ministries of Finance, Board, Public Utilities Board, Port of Singapore Committee (1985). in Philosophy, Cambridge University. He has engineering bodies in Singapore and overseas. Trade & Industry, National Development, Authority and Managing Director of Monetary a distinguished academic record, having and Communications. Authority of Singapore. He started his career

Mr Tang holds a BSc Mech Eng, from National been conferred several awards and honorary as a banker and industrialist. Central University, China, and an MBA from positions in Singapore and overseas. Mr Ngiam holds Bachelor of Arts (First Class Harvard University. Honours) in Economics from the University of Mr Lim has received several national honours, Malaya (Singapore) and Master of Public including the Order of Temasek, NTUC Medal of Administration from Harvard University. Honour, PAP Distinguished Service Medal and was conferred an Honorary Degree of Doctor of Laws, National University of Singapore. 16 GROWTH WITH SYNERGY Singapore Press Holdings | Annual Report 2003 | Executive Officers 17

Executive Officers

Cheong Yip Seng He was the President of Master Printers’ Association Low Huan Ping Ginney Lim May Ling Editor-in-Chief, English/Malay Newspapers Division from 1983-1984; and Advertising Media Owners Executive Vice President, Technology Head, Legal & Group Company Secretary Mr Cheong has been in journalism for 40 years. In Association, Singapore, for 11 years (1986-1997), and Mr Low is the Executive Vice President of Technology. Ms Lim is Head of the Legal/Secretariat Department January 1987, he became Editor-in-Chief of the English is now their Honorary Advisor. Concurrently, he was He has been with the Group for 16 years. Previously, and Group Company Secretary. She has been with the and Malay Newspapers Division, a position he holds Singapore’s representative in the Asian Federation of he was Chief Executive Officer of SPH AsiaOne Ltd, a Group since December 1991 and founded the today. As Editor-in-Chief, he manages four newspapers Advertising Associations, and Governor of the Institute subsidiary of SPH, Chairman of CyberWay Pte Ltd and Legal/Secretariat Department in SPH which until her – The Straits Times, The Business Times, The New of Advertising, Singapore. a director of Singapore Cable Vision Limited. Mr Low is joining, had no in-house legal department. Paper, Berita Harian and he also oversees Streats. a director of MobileOne Ltd. Arthur Seet Keong Hoe Prior to joining SPH, Ms Lim was heading the Legal & He is a non-executive director of SBS Transit Ltd. Executive Vice President, Finance Mr Low started his career at the Ministry of Defence, Secretariat department of NTUC INCOME. She has over In 1997, Mr Cheong received the ASEAN Award Mr Seet is the Executive Vice President of Finance. He where he subsequently headed various IT departments. 18 years of experience in the legal, corporate secretarial for Information. held various finance positions in Times Publishing and insurance matters. Berhad, and in Singapore Newspaper Services Pte Ltd, Mr Low has a Bachelor of Arts (Honours), Master Chew Keng Juea including Financial Controller and General Manager, of Arts from Cambridge University and a Master of Ms Lim holds a Bachelor of Law (Honours) Degree from Senior Executive Vice President, Chinese Newspapers Circulation. Mr Seet has been with the Group for Science from the University of Singapore. the National University of Singapore. She is also an & Newspaper Services 29 years. Associate of the Institute of Chartered Secretaries and Mr Chew joined Sin Chew Jit Poh as Senior Manager Wee Leong How Administrators and an Associate of the Chartered cum Financial Controller in 1979 and has since held Mr Seet is a director in MobileOne Ltd. He is a Fellow Executive Vice President, Human Resources & Insurance Institute. She is a member of the Group 8: various positions in the Group. He is currently Senior of the Chartered Association of Certified Accountants Executive Director, SPH MediaWorks Ltd Listed Companies Committee of the Singapore Executive Vice President in charge of the Chinese and member of the Institute of Certified Public Mr Wee has been with the Group for 19 years, and International Chamber of Commerce. Newspapers and Newspaper Services Divisions and Accountants of Singapore. is currently the Executive Vice President of Human Chairman, Editorial Committee, Chinese Newspapers. Resources. He is concurrently Executive Director of Joyce Chee Siew Luan Sng Ngoi May SPH’s TV subsidiary, SPH MediaWorks Ltd, and Head, Internal Audit Mr Chew started his career with the Economic Executive Vice President, Corporate Services & Chairman of another subsidiary, SPH Magazines Mrs Chee joined SPH in 1986 as the deputy chief Development Board in 1972 and later joined Amoco Corporate Relations Pte Ltd. internal auditor and became the head of Internal Audit Far East Oil Company before joining SPH. He is Mrs Sng is the Executive Vice President, Corporate in 1987. She was responsible for both the internal audit Chairman of the IFRA Asia Committee and sits on the Services, responsible for the Group’s Properties, Mr Wee started his career in the Singapore Civil functions of SPH and Times Publishing groups until IFRA International Board. Mr Chew is also currently Administration, Information Resource Centre, Service, first as an engineer in the Ministry of Defence 1996. Prior to joining SPH, she headed the internal serving on the boards of various civic organisations. Legal/Secretariat and Corporate Relations functions. followed by a stint in the Foreign Service. audit function of Tan Chong Motors and was the deputy She joined the Group in 1983 as Group Editorial head of audit in Great Eastern Life Assurance. Mr Chew holds a Bachelor of Science from the Manager and has served in various management Mr Wee holds a Master of Arts from Cambridge University of Illinois and a Master of Business positions in the Editorial Support Services and Human University, where he read Engineering under a She has held the Vice President and Governor positions Administration in Financial Management from Resources divisions. Singapore Government scholarship. He also has in The Institute of Internal Auditors (Singapore) for the Graduate School of Business, Loyola University a Master of Business Administration from the many terms and has actively contributed to the growth of Chicago, USA. Mrs Sng is concurrently the General Manager of Press National University of Singapore. and development of the internal audit profession in Foundation of Singapore Limited, a charity foundation Singapore. Tham Khai Wor set up this year. Prior to joining SPH, she was in the Executive Vice President, Marketing Government Administrative Service and worked in the Mrs Chee is a Certified Public Accountant (Singapore) Mr Tham is the Executive Vice President, Marketing, Ministries of Health, Finance and Home Affairs. and a Certified Internal Auditor (US). responsible for sales and marketing of advertising in the Malay, Chinese and English newspapers, and heads Mrs Sng holds a Master of Science from the University the marketing activities of all newspapers. He has been of Singapore. with the Group for 31 years. 18 GROWTH WITH SYNERGY Singapore Press Holdings | Annual Report 2003 | Review by Chief Executive Officer 19

The adverse impact of the Iraq war, terrorism, the The improved circulation figures confirm the trend SARS outbreak and a weak economy in the second that people are prepared to pay for quality newspapers Review by Chief Executive Officer half year led to a marginal drop of 0.6 per cent in despite the availability of freesheets. SPH newspapers the Group’s turnover to S$897.8 million for the full year. have held their ground largely due to the continuing Against this difficult backdrop, print advertisement efforts by our editorial teams to improve their content revenue fell by 2.8 per cent to S$595.4 million, largely and design to meet the changing needs of readers because of a decline in recruitment and classified and advertisers. advertising. Although turnover from newspapers and magazine dipped by 2.3 per cent to S$789.4 million, Revamp was the buzzword for the year. The Life! the decline was mitigated by increases in broadcasting section of The Straits Times took on a livelier image and multimedia revenue. SPH MediaWorks, the Group’s in September 2002, featuring a different lifestyle broadcasting arm, continued to garner a bigger share theme each day. In November, it was Streats’ turn, of the TV advertising market due to innovative and which helped enhance its readership profile and better programming, which pushed its advertising double its advertising revenue. Among the Chinese revenue to S$41.6 million from S$27.5 million last newspapers, Shin Min Daily News was given a year, while losses from operations narrowed to partial makeover in September 2002, with improved S$40.2 million from S$44.6 million. Operating coverage of sports and entertainment news. This losses from freesheet Streats increased sligthly to was followed by a major makeover of Lianhe Zaobao S$5.8 million from S$5.2 million. in March 2003, giving readers a lighter and more colourful read, with beefed-up coverage of China. We ran a tight ship and contained costs in all areas In August 2003, Berita Harian introduced a snazzy of operations. The cost containment measures led to lifestyle section called Ekstra, targeting the young savings of 1.1 per cent. Staff costs went down by readers. Two of our magazines were also given 2 per cent or S$4.9 million, while newsprint cost fell makeovers – Focus Publishing’s You Weekly in May, by S$20.9 million or 18.9 per cent due to lower prices. and SPH Magazines’ Young Parents in June 2003. On the television front, Channel U News also Performance of core business underwent a change in August 2003, revamping Despite competition from foreign newspapers and its content, graphics and studio sets. All these efforts freesheets, SPH newspapers held up credibly. Total have paid off, attracting more readers and viewers. daily average circulation of paid newspapers fell marginally by 0.3 per cent to 1,066,998 copies, This quest by SPH’s products to constantly refresh although several bucked the trend and continued themselves to stay ahead won The Straits Times to perform very well. the gold awards for best newspaper design and best newspaper infographics, and Lianhe Zaobao Daily average circulation of The Straits Times, SPH’s the gold award for high quality printing at the English flagship daily, for the year was 389,248 copies IFRA Publish Asia Awards in Kuala Lumpur on while that for The Sunday Times was 387,205 copies. July 30, 2003. The AC Nielsen Media Index for 2003 reaffirmed that The Straits Times remained the readers’ top choice by The online editions of the two flagship dailies also far, with the highest reach among the Professionals, continued to be highly popular, with Zaobao.com Managers, Executives and Businessmen (PMEBs). The garnering some 3 million page views daily, of which daily average circulation of the Chinese flagship daily, more than half of the viewers are from China, and Lianhe Zaobao, was 192,165, up slightly by 0.4 per cent The Straits Times Interactive enjoying a daily average over last year. of nearly 1 million page views. 20 GROWTH WITH SYNERGY Singapore Press Holdings | Annual Report 2003 | Review by Chief Executive Officer 21

On March 10, 2003, The Business Times Online four-year contract to publish Singapore Airlines’ on December 13, 2002, when Executive Chairman SPH also pitched in to set up The Courage Fund for introduced a subscription model for accessing its popular in-flight magazine SilverKris. Building on the Lim Kim San stepped down after 14 years at the needy SARS patients and their families and The online edition between 4 am and 2 pm for non-print success of its best-seller Her World, SPH Magazines helm. Lim Kim San remains with SPH as Senior Contact Bowl campaign to speed up contact tracing subscribers. To reach out to young readers, The Straits also expanded its business beyond Singapore by going Advisor, a post he assumed on January 1, 2003. of SARS victims in case of an outbreak. SPH also Times Schools Media Club programme was launched into joint ventures to publish Her World Malaysia and On the same day, I became the Chief Executive joined two other media groups to start a SARS television on August 1, 2003 and quickly attracted 20 schools, Her World Thailand. Officer. I was previously the Group President. channel as a public service. For its efforts to help the boosting The Straits Times by some 12,000 copies nation battle SARS, SPH was awarded a President’s weekly. More schools are expected to join the Redevelopment work on The Paragon was completed On September 2, 2002, there was a reshuffle of senior Certificate of Commendation on National Day. programme, which targets to raise The Straits Times’ by end of August 2003. The S$43 million new wing at editors in The Straits Times (ST) and The Business weekly subscription by 30,000 copies. the former Promenade site transforms the shopping Times (BT), as part of the move to redistribute On its part, SPH was among the first companies to roll mall at the heart of Orchard Road into a bigger and responsibilities and strengthen the capability of the out a slew of contingency plans and precautionary The KBA Commander Presses and associated Ferag trendier building and added 64 specialty shops to the English and Malay Newspapers Division (EMND). ST measures to protect staff and prevent disruption to its mailroom lines went into production during the year. existing 120. The mega complex now boasts 430,000 political editor Han Fook Kwang was appointed Editor operations if it was hit by SARS. Critical operations like The first line started in October 2002 while the other sq ft of lettable retail space. of the English daily, taking over from Leslie Fong, who newsrooms, prepress and marketing were split into three were ready by January 2003. All the four KBA is now Editor at Large in charge of the team covering two teams, with the second group working from the presses are now in the final stages of the acceptance Cost containment Asia, especially Greater China. Patrick Daniel, who was Genting Lane building. Staff had to take regular trials. When the state-of-the-art KBA presses are fully SPH management and the two unions representing editor of BT, became the Managing Editor of EMND, temperature checks while visitors to SPH facilities operational by end of 2003, SPH newspapers will SPH employees – SPH Employees’ Union and while Alvin Tay was appointed Editor of BT. This were screened. SPH also cut advertising rates in the be able to carry colour pictures and ads from cover Singapore National Union of Journalists – signed two redeployment also led to changes in other senior major newspapers to help businesses tide over the to cover. flexi-wage agreements on December 17, 2002, which positions in both the ST and BT newsrooms. difficult period. came into effect on January 1, 2003. A significant Key subsidiaries feature is the introduction of a Monthly Variable On April 1, 2003, Wee Leong How, Executive Vice Corporate citizenship It was another eventful year for SPH MediaWorks. Component (MVC), under which 2 per cent of the President of Human Resources, was appointed The Group’s support for the arts and community- Both its Chinese Channel U and English Channel i staff’s basic pay is set aside for this in the first year Executive Director of SPH MediaWorks. A new team building efforts remained unwavering during the registered the highest jumps in viewership figures of implementation in 2003, to be followed by another of five senior executives was appointed on April 7, year. SPH continued to be an active and responsible among the seven free-to-air channels from July 2002 2 per cent for every subsequent year until the target 2003 to assist him in managing SPH’s broadcasting corporate citizen, contributing S$1.5 million to arts and to June 2003, according to the AC Nielsen Media Index 10 per cent has been reached. arm. They are Man Shu Sum, who is the Chief culture, sports, community events and charity. For for 2003. Channel U’s audience of adult viewers Operating Officer (Operations Group), Nalini Naidu, the 11th consecutive year, SPH has been named the (aged 15 and above) in 2003 went up by 13.6 per cent , On January 1, 2003, the company restored wage Chief Operating Officer (Media Business Group), Distinguished Patron of the Arts by the National Arts while Channel i’s viewership rose by 65.4 per cent. cuts imposed since November 1, 2001 for executives James Ang, Senior Vice President (Finance), Kelvin Ma, Council for its support of arts programmes such as In December 2002, MediaWorks clinched the top earning over S$3,000 a month. Senior Vice President (Engineering) and Joseph Tan, the NAC-SPH Golden Point Award, Singapore Writers’ trophies at the Asian Television Awards. It was named Vice President (Information Technology). Lawrence Loh, Festival, TheatreWorks’ Writers’ Laboratory and the Broadcaster of the Year while Channel U won Difficult times demand difficult, if painful measures. On who heads SPH’s Marketing Planning and Development production of The Global Soul at the Singapore Arts Terrestrial Channel of the Year. There were more rea- June 30, 2003, the company retrenched 111 employees which provides research services, took over Nalini Festival. SPH also supported the Singapore Symphony sons to cheer on its second anniversary in May 2003 as part of a move to right-size the organisation to Naidu’s job in Display Advertisement. Orchestra and Singapore Chinese Orchestra, and was when both channels were bestowed Superbrands by match the business volume. The retrenchment cost the one of the main sponsors for River Hongbao 2003. the Superbrands Council, a leading independent company S$7.2 million in severance payments, but Role in overcoming SARS authority on branding. would save S$5.7 million a year in manpower costs. SPH also supported national efforts to overcome the SPH continued its support for wildlife conservation SARS outbreak from April to June 2003. Its newspapers efforts through the adoption of endangered animals Times Periodicals was renamed SPH Magazines Pte Ltd Management changes and two television channels played a significant role like Inuka, the polar bear, and the SPH Conservation on June 23, 2003 to better reflect the progressive and The year saw a smooth handover of leadership. Lim in educating and updating the public on the deadly Centre, where a family of rare proboscis monkeys are international corporate image of the company. Contract Chin Beng was appointed non-executive Chairman of virus and rallied Singaporeans to cooperate with the being housed and bred, at the Singapore Zoo. It also publishing took flight after the subsidiary secured a SPH at the Company’s 18th Annual General Meeting Government’s tough measures to overcome the crisis. worked closely with the Singapore Zoo to promote 22 GROWTH WITH SYNERGY Singapore Press Holdings | Annual Report 2003 | Review by Chief Executive Officer 23

conservation awareness among youths with the SPH associates – advertisers, advertising agents, news Channels U and i, which have clawed a Junior Conservationist Awards. Apart from the vendors and suppliers – and the management, staff sponsorship of the Chilean and Carribean Flamingos, and unions for their unwavering commitment and and Samson the golden eagle at the Jurong BirdPark, dedication in helping the company weather the storm. SPH also adopted the All Star BirdShow, a popular There are some signs of recovery in the global good chunk of the TV audience market tourist attraction. economy although the outlook for the year ahead remains cautious. To stay competitive, we need to The annual Straits Times School Pocket Money Fund work closely together to achieve greater operational managed to raise its targeted S$3 million to help 7,200 efficiency and synergy, as well as seize new growth share and ratings, are set to improve needy students. To promote the President’s Challenge opportunities. I am confident that our team will rise 2003, SPH contributed S$200,000 worth of advertise- to the challenge. ment space. The annual charity fundraiser also saw The New Paper and the Chinese Newspapers playing an with newer and better offerings – active role by raising a total of S$368,634 through two respective charity events – Be Yourself Day and Show You Care, Buy a Tile. The funds went to 45 beneficiaries thanks to back-up from the Group’s under the Community Chest. In August 2003, SPH donated S$20 million to the Press Foundation of Singapore, a charity body with the status resources, expertise and strong of an Institution of Public Character (IPC) Acknowledgements We have emerged from the difficult year stronger Alan Chan Heng Loon networking support. and more resilient and I want to thank our business Chief Executive Officer

It shows that we have integrated solutions and that we can develop our synergy further, and explore the vast opportunities in the market. 24 GROWTH WITH SYNERGY Singapore Press Holdings | Annual Report 2003 | Operational Data 25

Daily Average Circulation for August 2003 SPH Newspapers Gross Readership Trends

Readers (‘000)

5,000

4,500 The Straits Times 389,248

4,000 The Sunday Times 387,205

3,500 The Business Times 27,519 3,000

The New Paper 120,394 2,500

The New Paper on Sunday 152,080 2,000

Streats* 280,000 1,500

The Straits Times Weekly 2,658 1,000

500 Lianhe Zaobao (Weekday) 190,981

0 Lianhe Zaobao (Sunday) 198,326 Year 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

* Based on adults aged 15 years and above. Source: AC Nielsen. Lianhe Wanbao (Weekday) 127,021

Lianhe Wanbao (Weekend) 120,879 SPH Newspapers Net Readership Trends by Language

Readers (‘000) Shin Min Daily News (Weekday) 126,541 1,800

Shin Min Daily News (Weekend) 122,029 1,600

Friday Weekly 65,657 1,400

Thumbs Up 37,088 1,200

Berita Harian 61,177 1,000

Berita Minggu 68,209 800

Tamil Murasu (Weekday) 7,928 600

400 Tamil Murasu (Sunday) 15,119

200

0 Year 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

* Streats has a controlled circulation of 280,000. It is distributed to HDB estates, landed homes and condominiums,

offices in the CBD, business and technology parks, key public places such as educational institutions, hospitals, English Newspapers Chinese Newspapers Malay & Tamil Newspapers

selected country clubs and airlines, and available at busy commuting points.

* Based on adults aged 15 years and above. Source: AC Nielsen. 26 GROWTH WITH SYNERGY Singapore Press Holdings | Annual Report 2003 | Corporate Information 27

Corporate Information Advertising Expenditure by Media

Audit Committee 5.8% Tang I-Fang / Chairman 8.6% Cheong Choong Kong Lee Ek Tieng 35.7% Ngiam Tong Dow 4.5%

Auditor PricewaterhouseCoopers 8 Cross Street, #17-00, PWC Building, Singapore 048424 Audit Partner 26.8% Tan Boon Chok (Appointed 2003)

3.9% Company Secretaries Ginney Lim May Ling 14.7% Khor Siew Kim

FY 2003 Registered Office Total adspend: S$ 1,722,546 1000, Toa Payoh North, News Centre, Singapore 318994

6.6% Tel: (65) 6319 6319

8.4% Fax: (65) 6319 8282 Email: [email protected] 4.2% 38.9% Share Registration Office Barbinder & Co Pte Ltd 8 Cross Street, #11-00, PWC Building, 28.5% Singapore 048424

3.4% 10%

FY 2002 Financial Calendar Total adspend: S$ 1,569,064

Announcement of 2003 Half-Year Results March 28, 2003 SPH Newspapers MediaCorp TV Others (Cinema, Rediffusion, Payment of 2003 Interim Dividend April 28, 2003 Busbacks / Taxi-Tops & Posters) Financial Year-End August 31, 2003 Today Periodicals Announcement of 2003 Full-Year Results October 10, 2003 Despatch of Annual Report to Shareholders November 19, 2003 SPH MediaWorks TV Radio Annual General Meeting December 5, 2003 Payment of 2003 Proposed Final & Special Dividends December 23, 2003

* TV includes bonus air-time.

* Newspapers exclude appointments/notices and classified but include display classified for five product

categories: Automobiles, Real Estate, Banking/Finance, Leisure/Travel & Computer. Source: AC Nielsen. 28 GROWTH WITH SYNERGY Singapore Press Holdings | Annual Report 2003 | Significant Events 29

Significant Events

September 1, 2002 October 26, 2002 Life!, the well-read lifestyle section of The Straits Times, SPH was given the Corporate Gold Award by the was revamped with a new and refreshing masthead and Community Chest to acknowledge its contributions to the introduction of special daily features to engage community service. The Group contributed S$346,000 readers as part of the “Got Life!” campaign. Sunday to ComChest in the 2001/2002 financial year, including Plus was also renamed Sunday Life!. its participation in the SHARE programme, under which a monthly sum is deducted from the SPH employees’ September 1, 2002 pay, with the company matching dollar-for-dollar. To raise funds for the annual President’s Challenge, the Chinese Newspapers Division co-organised the November 11, 2002 National Treasure Hunt which drew some 14,000 people. SPH named its new building at Toa Payoh North News It also organised a Horse Sculpture Charity Auction Centre, a name transferred from its former headquarters between September 3 and 9. Together, the two events in Genting Lane, to create an identity for the high-tech raised S$445,200 for the President’s Challenge 2002. complex which now houses more than 2,600 staff.

September 2, 2002 December 4, 2002 SPH was awarded the Distinguished Patron of the SPH MediaWorks and its Chinese TV channel, Arts Award by the National Arts Council for the 10th Channel U, clinched two of the most prestigious consecutive year, in recognition of the company’s awards – Broadcaster of the Year and Terrestrial steadfast support for local arts. Channel of the Year, respectively – at the 7th Asian Television Awards. It also won awards for the Best Clockwise from left Straits Times Editor Han Fook Kwang (left) receiving the Gold Design Award from Epson Singapore Chairman Fujita Shinichiro. President S R Nathan (third from left) and CEO Alan Chan (second from left) showing support for the Show You Care Buy a Tile charity programme September 2, 2002 Talkshow, Best Youth Programme, Best Comedy organised by Chinese Newspapers Division. SPH MediaWorks celebrates its second anniversary in May 2003. The English/Malay Newspapers Division (EMND) Performance By An Actor and Best Original Song. announced changes in four top editorial positions in a move to strengthen the capability of the division to December 12, 2002 better serve readers. Patrick Daniel, former Editor of Dr Yaacob Ibrahim, Acting Minister for Community January 12, 2003 March 14, 2003 The Business Times, was appointed Managing Editor Development and Sports, presented cheques totalling Ren Ci Charity Show, SPH MediaWorks’ first major The Straits Times started the Mobile News Alert of EMND, Leslie Fong, former Editor of The Straits S$175,000, raised by the SNPL Charity Fund, to 20 charity show, was telecast “live” on Channel U. The Service, which sends out the latest news to mobile Times, became the Editor at Large, while Han Fook charity organisations from various ethnic groups at mega charity show raised S$6.5 million – the highest phones of readers who put in an SMS request at 30 Kwang and Alvin Tay were appointed Editor for The News Centre. The SNPL Charity Fund was set up in amount ever raised in a single event – for the Ren Ci cents each. Straits Times and The Business Times, respectively. 1987 to administer public donations received by the Hospital and Medicare Centre and propelled Channel Chinese Newspapers Division. U’s prime-time ratings to a high of 24.2 per cent, March 20, 2003 September 16, 2002 according to the Nielsen Media Research. Channel i inked an exclusive distribution deal with Shin Min Daily News was given a makeover, which December 13, 2002 Paramount International Television to unleash the first- added four pages of sports, entertainment, lifestyle and Lim Chin Beng was appointed the non-executive January 30 to February 5, 2003 run of Paramount programmes on its channel from other news to give readers a more colourful and Chairman of SPH at the Company’s 18th Annual The attractions of the Chinese province of Hunan were July 1, 2003. The deal is part of Channel i’s ongoing refreshing read. The revamp paid off, boosting Shin General Meeting. showcased at the River Hongbao to usher in the international alliance initiatives to build it into a leader Min’s circulation by over 7,000 copies daily. Lunar Year of the Goat. For the first time, the cultural in movie and TV content. January 1, 2003 performances were held at the Concert Hall of October 1 to December 31, 2002 Lim Kim San stepped down as Executive Chairman of The Esplanade. March 27, 2003 Launched in 2000, The Straits Times School Pocket SPH after 14 years at the helm but remains in the Lianhe Zaobao was given a total overhaul to make it Money Fund entered its third year and, despite the Company as Senior Advisor. SPH Group President Alan February 8, 2003 more trendy, lively and fun to meet the changing needs difficult times, managed to raise a record S$3 million Chan became the Chief Executive Officer. Channel U and Lianhe Zaobao were official broadcaster and expectations of its readers and advertisers. The for 7,200 needy students. and newspaper, respectively, for the Chingay Parade, redesigned Chinese daily includes the addition of three which was telecast “live” on the channel. new sections – Zaobao China, zbNow and Zaobao Sports, and more pages for expanded coverage. 30 GROWTH WITH SYNERGY Singapore Press Holdings | Annual Report 2003 | Significant Events 31

April 1, 2003 June 19 to 21, 2003 Wee Leong How was appointed the Executive Director SPH co-sponsored The Global Soul, a TheatreWorks of SPH MediaWorks, in addition to his portfolio as production, at the Singapore Arts Festival. Executive Vice President of Human Resources and Chairman of SPH Magazines. June 23, 2003 Times Periodicals Pte Ltd was renamed SPH Magazines April 8, 2003 Pte Ltd to better reflect the progressive and international SPH Magazines signed a four-year contract with corporate image of the company. Singapore Airlines to publish its popular in-flight magazine, SilverKris. It will leverage on the synergy June 24, 2003 and talent within SPH to produce SilverKris and The “80 Engaging Moments” photo exhibition explore new contract publishing opportunities. organised by Lianhe Zaobao and The Photographic Society of Singapore was launched at the opening May 19, 2003 of the annual World Book Fair to celebrate Lianhe The Straits Times TV News was rebranded Channel i Zaobao’s 80th anniversary. News to better align it with the channel on which it airs and to develop its own identity. July 5, 2003 Fifty aspiring playwrights took part in the SPH- May 28, 2003 sponsored TheatreWorks’ 24-hour Playwriting BG George Yeo, Minister for Trade and Industry, Competition held at the Singapore Turf Club. officiated at the launch of “Singapore Enterprises in China: Collection of 40 Success Stories” – a Chinese July 11, 2003 book co-published by Lianhe Zaobao. SPH Magazines joined hands with Berita Publishing Sdn Bhd to set up a joint venture company in Malaysia June, 2003 called Magazine World Sdn Bhd to publish and distribute Young Parents underwent a complete facelift to magazines, including Her World Malaysia, as well as emerge with brighter layout and pictures, as well as provide contract publishing services in Malaysia. new sections. July 17, 2003 June 5, 2003 SPH Magazines entered into a joint venture with Prime Minister Goh Chok Tong, accompanied by GMM Media Public Company Ltd to publish Her World Clockwise from left ST TV News is rebranded Channel i News. SPH is a co-sponsor of The Global Soul in the Singapore Arts Festival. 20,000 pop fans brave the rain to watch the ZPOP Concert organised by zbNOW. Iskandar Mirza is named the Achiever of the Year. Minister for Information, Communications and the Arts Thailand in the first quarter of next year. Dr Lee Boon Yang, visited the SPH News Centre for a discussion with SPH journalists on the current issues July 25, 2003 and long-term challenges facing Singapore. Lee Ah Bee, Executive Chairman of Amtek Engineering August 6, 2003 poetry slam and SMS haiku competition were Limited, was Businessman of the Year, Neil Montefiore Veteran composer and music arranger Iskandar Mirza introduced at the premier literary event. It culminated June 15, 2003 of MobileOne (M1) Limited was Chief Executive of the won the Achiever of the Year Award, co-organised by in the NAC-SPH Golden Point Award presentation to A birthday bash was organised to celebrate SPH’s new Year and Accord Express clinched the Enterprise Award Berita Harian and McDonald’s. recognise the best short-story writers and poets. adoption, the All Star BirdShow at the Jurong BirdPark at the Singapore Business Awards for 2002 organised turning 21. The party attracted 13,000 people to the by The Business Times and DHL. August 9, 2003 August 23, 2003 BirdPark. SPH was awarded the President’s Certificate of zbNOW organised the ZPop Concert at the Padang to July 30, 2003 Commendation for its role in helping to overcome the celebrate Lianhe Zaobao’s 80th anniversary. Some June 19, 2003 The Straits Times won the Best in Newspaper Design Sars outbreak in Singapore. The Group’s newspapers 20,000 people braved the rain and turned up for this Following its second anniversary celebration in May, (Gold), Best in Newspaper Infographics (Gold) and a and TV provided information about Sars through outdoor event. SPH MediaWorks was conferred the “Superbrand” title bronze award for Best in Digital Photography (Sports), the use of easy-to-understand comics, infomercials by the Superbrands Council, an independent arbiter of and Lianhe Zaobao clinched Best in Print (Gold) for a and programmes. August 29, 2003 branding. Companies are judged based on goodwill, newspaper printed on the bigger, double-width press, The New Paper organised the Be Yourself Day where market dominance, longevity, overall market acceptance at the prestigious IFRA Publish Asia Awards given out August 21 to 27, 2003 students made a donation to the President’s Challenge and customer loyalty. in Kuala Lumpur. SPH sponsored the biennial Singapore Writers’ 2003 to show up in their favourite attire which best Festival, organised by the National Arts Council. Apart expresses their personalities. from celebrity readings and breakfast with writers, a 32 GROWTH WITH SYNERGY Singapore Press Holdings | Annual Report 2003 | Corporate Governance 33

CORPORATE GOVERNANCE REPORT SPH is committed to high standards of corporate governance and has adopted a framework of corporate governance Corporate Governance policies and practices in line with the principles set out in the Code of Corporate Governance (“Code”).

(September 1, 2002 to August 31, 2003) SPH has complied with the full requirements of the Code as well as the Singapore Exchange Listing Manual requirements. There are other sections in this annual report which have an impact on the disclosures required. The annual report should be read in totality for SPH’s full compliance.

BOARD OF DIRECTORS Currently, the Board comprises nine non-executive and independent directors, and one executive director. Details of the Directors’ academic and professional qualifications and other appointments are set out on pages 12 to 15 of the Annual Report.

The independence of each director is reviewed annually by the Nominating Committee (“NC”). The NC adopts the Code’s definition of what constitutes an independent director in its review. As a result of the NC’s review of the independence of each director for this financial year, the NC is of the view that the non-executive directors are independent directors and further, that no individual or small group of individuals dominate the Board’s decision making process. The NC is of the view that the current Board comprises persons who as a group, possesses the relevant qualifications, experience and core competencies necessary to manage the Company.

The Company’s Articles of Association (“Articles”) allow for the appointment of a maximum of 12 directors. The NC is of the view that the current board size is appropriate, taking into account the nature and scope of the Company’s operations.

The Company has a separate Chairman and Chief Executive Officer (“CEO”). The Chairman is a non-executive and independent director.

The CEO is the chief executive in the Company and bears executive responsibility for the Company’s business, while the Chairman bears responsibility for the workings of the Board. The Chairman and the CEO are not related.

The Chairman ensures that board meetings are held when necessary and sets the board meeting agenda in consultation with the CEO. The Chairman reviews all board papers before they are presented to the Board and ensures that board members are provided with complete, adequate and timely information. As a general rule, board papers are sent to directors at least one week in advance in order for directors to be adequately prepared for the meeting. Senior management staff are invited to attend board meetings to answer any queries that the directors may have on the Company’s operations.

The principal responsibilities of the Board are: 1. Reviewing and approving the corporate policies, strategies, budgets and financial plans of the Company;

2. Monitoring financial performance including approval of the annual and interim financial reports;

3. Reviewing the processes for evaluating the adequacy of internal controls, risk management, financial reporting and compliance; 34 GROWTH WITH SYNERGY Singapore Press Holdings | Annual Report 2003 | Corporate Governance 35

4. Approving the nominations of directors and appointment of senior management, and determining and reviewing The Board is provided with quarterly financial accounts, other financial statements and progress reports of the their remuneration levels; Company’s business operations. The directors may contact the Company’s senior management through the company secretary or the CEO. 5. Approving major funding proposals, investments, acquisitions and divestment proposals; and Should directors, whether as a group or individually, need independent professional advice, the company secretary 6. Assuming responsibility for corporate governance. will, upon direction by and approval of the Chairman or the CEO appoint a professional advisor to render the advice. The cost of such professional advice will be borne by the Company. The Board conducts regular scheduled meetings on a quarterly basis. Ad-hoc meetings are convened when circumstances require. The Articles allow a board meeting to be conducted by way of a tele-conference. The attendance The company secretary attends all board meetings and is responsible to ensure that board procedures are followed. of the directors at meetings of the Board and Board committees, as well as the frequency of such meetings, is It is the company secretary’s responsibility to ensure that the Company complies with the requirements of the disclosed below. Companies Act. Together with the other management staff of SPH, the company secretary is responsible for compliance with all other statutes, rules and regulations which are applicable to the Company. Directors’ Attendance at Board and Board Committee Meetings To facilitate effective management, certain functions have been delegated by the Board to various Board committees. Executive Audit Nominating Remuneration Members of the Board and each Board Committee during the financial year are set out below: Board Committee Committee Committee Committee No of No of No of No of No of No of No of No of No of No of meetings meetings meetings meetings meetings meetings meetings meetings meetings meetings Name held attended held attended held attended held attended held attended Executive Audit Nominating Remuneration Name of Director Main Board Committee Committee Committee Committee Lim Chin Beng (Chairman) 5577––2222 Independent Alan Chan Heng Loon Lim Chin Beng Chairman Chairman – Member Member (CEO) 5577––20+ –– Cheong Choong Kong Member – Member –– Cheong Choong Kong 5 5 ––54–––– Michael Y.O. Fam Member Member – Chairman Chairman Michael Y.O. Fam 5577––2222 Lee Ek Tieng Member – Member –– Lee Ek Tieng 5 5 ––55–––– Lee Hee Seng Member ––Member Member Lee Hee Seng 5 5 ––––2222 Ngiam Tong Dow Member Member** Member Member Member* Ngiam Tong Dow 5575552021* + * Tang I-Fang Member – Chairman –– Tang I-Fang 5 5 ––55–––– Wee Cho Yaw Member –––– Wee Cho Yaw 5 4 –––––––– Yeo Ning Hong Member –––Member Yeo Ning Hong 5 4 ––––––22 Executive Notes: Lim Kim San # Executive Member – Member Member * Mr Ngiam Tong Dow attended all meetings of the Executive Committee and Remuneration Committee from the dates that he was Chairman appointed to the two committees. Alan Chan Heng Loon Member Member – Member + – + Messrs Alan Chan Heng Loon and Ngiam Tong Dow were appointed to the Nominating Committee after the two meetings for the Nominating Committee were held. Notes: # Mr Lim Kim San was the Executive Chairman of the Board and a member of the Nominating and Remuneration Committees up to December 13, 2002 when he retired as a director. Mr Lim, Senior Advisor, remains a member of the Executive Committee, although he is no longer a director. Directors are kept informed about the relevant training available either inhouse or organised externally. An orientation * Mr Ngiam Tong Dow was appointed to the Executive, Nominating and Remuneration Committees on December 13, 2002. programme will be organised for new directors to familiarise them with the Company’s operations, organisation + Mr Alan Chan Heng Loon was appointed to the Nominating Committee on December 13, 2002. structure and corporate policies.

Directors may also request further explanations, briefings or informal discussions on any aspect of the Company’s operations or business issues from the management. 36 GROWTH WITH SYNERGY Singapore Press Holdings | Annual Report 2003 | Corporate Governance 37

BOARD COMMITTEES 6. To review the independence, objectivity and cost effectiveness of the external auditors and the nature and extent of non-audit services supplied by the external auditors so as to balance the maintenance of objectivity and value Executive Committee (EC) for money; and The EC was constituted in 2002 and comprises five members, three of whom are independent non-executive directors. The EC is chaired by the Chairman of the Board. 7. To recommend to the Board the appointment of external auditors.

The EC’s principal responsibilities are: The AC has conducted an annual review of the volume of non-audit services to satisfy itself that the nature and extent 1. To review, with management, and recommend to the Board the overall corporate strategy, objectives and policies of such services will not prejudice the independence and objectivity of the external auditors before confirming their of the Group, and monitor their implementation; re-nomination.

2. To consider and recommend to the Board, the Group’s five year plan and annual operating and capital budgets; The AC meets with the external and internal auditors, without the presence of management, at least once a year.

3. To review and recommend to the Board proposed investments and acquisitions of the Company and its subsidiaries Internal Controls which do not fall within the Company’s core businesses but which are considered strategic investments for the In the course of their statutory audit, the Company’s external auditors will highlight any material internal control long-term prospects of the Company; weaknesses which had come to their attention in carrying out their normal audit which is designed primarily to enable them to express their opinion on the financial statements. Such material internal control weaknesses noted during 4. To approve the affixation of the Common Seal onto any document in accordance with the Company’s Articles of their audit, and recommendations, if any, by the external auditors are reported to the AC. Association; The Internal Audit department (“IA”) has an annual audit plan, which complements that of the external auditors. 5. To act on behalf of the Board in urgent situations, when it is not feasible to convene a meeting of the entire Board; and Amongst other things, the IA plan focuses on any internal control weaknesses highlighted in the external auditors’ report and recommends improvements to work processes to enhance operational efficiency and effectiveness. 6. To carry out such other functions as may be delegated to it by the Board. Based on the audit reports and management controls in place, the AC is satisfied that the internal control systems Audit Committee (AC) provide reasonable assurance that assets are safeguarded, that proper accounting records are maintained and financial The AC comprises four members, all of whom are independent non-executive directors. All the members of the AC statements are reliable. have many years of experience in board and senior management positions in the accounting and related financial fields. The NC is of the view that the members of the AC have sufficient financial management expertise and experience Risk Management to discharge the AC’s functions. SPH understands the need for a consistent and continuous approach to enterprise-wide risk management as a key element in steering the operations through a period of change and in protecting shareholder value. During the year, The AC performs the following main functions: SPH established a unit to oversee risk management to drive the development of an integrated risk management 1. To review annual audit plans and audit reports of external and internal auditors; framework covering all functional areas of SPH business. There is also a Business Continuity Planning Committee, chaired by the Executive Vice President of Finance, which reviews the business impact and the disaster recovery plan 2. To review the auditors’ evaluation of the system of internal accounting controls; for the critical operations in the Company.

3. To review the balance sheet and profit and loss account of the Company and the consolidated balance sheet and Internal Audit profit and loss account of the Group before they are submitted to the Board for its approval; IA is staffed with eight audit executives, including the Head of Internal Audit, who is a Certified Internal Auditor (CIA) and a Certified Public Accountant (CPA). All staff have to adhere to a set of code of ethics adopted from 4. To review the scope, results and adequacy of the internal audit function, procedures and its cost effectiveness; The Institute of Internal Auditors, US (IIA). IA reports directly to the chairman of the AC on audit matters, and to the CEO on administrative matters. IA has adopted the Standards for Professional Practice of Internal Auditing set by 5. To review any interested person transactions as defined under the Singapore Exchange Listing Manual; IIA and ensures staff competency through specialised training and direct exposure to major business and support areas. 38 GROWTH WITH SYNERGY Singapore Press Holdings | Annual Report 2003 | Corporate Governance 39

The AC reviews IA’s reports on a quarterly basis. The AC also reviews and approves IA’s annual audit plans and The performance criteria do not include the financial indicators set out in the Code as guides for the evaluation of resources to ensure that IA has the necessary resources to adequately perform its functions. Directors, as the Board is of the view that these indicators are more appropriate measures of management’s performance.

All audit reports are submitted to the AC, for deliberation and information with copies extended to the CEO, relevant The Board is of the view that it is also more appropriate to focus on collective Board performance. senior management and external auditors. The Board and the NC have strived to ensure that directors appointed to the Board possess the requisite experience, Interested Person Transactions knowledge and background critical to the Group’s business. SPH has an internal policy in respect of any transactions with interested persons and has in place a process to review and approve any interested person transactions. For this financial year, there were no interested Remuneration Committee (RC) person transactions. The RC comprises five directors, all of whom are non-executive and independent directors. Members of the RC are knowledgeable in the field of executive compensation and have access to expert advice inside and/or outside the Nominating Committee (NC) Company. The NC comprises five members, of whom four, including the Chairman, are independent non-executive directors. The head of the Human Resources Division is secretary to the RC. The NC’s principal functions are: 1. To make recommendations to the Board on all board appointments; The RC’s principal responsibilities are: 1. To recommend to the Board a framework of remuneration for the Board and key executives; 2. To be responsible for the re-nomination of directors, having regard to the director’s contribution and performance (e.g. attendance, preparedness, participation and candour) including, if applicable, as an independent director; 2. To determine specific remuneration packages for each executive director and the CEO or executive of similar rank if the CEO is not an executive director; 3. To determine annually whether or not a director is independent, bearing in mind the circumstances set forth in paragraph 2.1 of the Code of Corporate Governance, and any other salient factors; 3. To recommend to the Board for endorsement the remuneration of the CEO;

4. To decide whether or not a director is able to and has been adequately carrying out his duties as director of the 4. To consider and approve salary and bonus recommendations in respect of senior executives; Company; 5. To decide on all aspects of remuneration, including but not limited to directors’ fees, salaries, allowances, bonuses, 5. To assess the effectiveness of the Board as a whole, the contribution by each individual director to the effectiveness options, long term incentive schemes, including share schemes, and benefits in kind; and of the Board and to decide how the Board’s performance may be evaluated. 6. To administer the share option scheme(s) adopted by the Group and to decide on the allocations and grants of New directors are at present either appointed by way of a board resolution, after the NC approves their appointment options to eligible participants under the share option scheme(s). or elected at the Annual General Meeting (AGM) of the Company. New directors appointed by way of Board resolution, must submit themselves for re-election at the next AGM of the Company. The CEO’s remuneration package includes a variable bonus element which is performance-related, and also stock options which have been designed to align his interests with those of the shareholders. As an executive director, the Article 111 of the Articles requires one third of the directors, or the number nearest to one third, to retire by rotation CEO does not receive directors’ fees. at every AGM. Directors over 70 years of age are also required to be re-elected every year at the AGM under Section 153(6) of the Companies Act. Non-executive directors have no service contracts. Non-executive directors, including the Chairman, are paid directors’ fees, subject to approval at the AGM. A breakdown, showing the level and mix of each individual director’s The Nominating Committee evaluated the Board’s performance as a whole in this year based on performance criteria remuneration payable for this financial year is set out hereafter. set by the Board. The performance criteria for the Board evaluation included an evaluation of size and composition of the Board, the Board’s access to information, Board processes, Board performance in relation to discharging its principal functions and fiduciary duties and communication with top management. 40 GROWTH WITH SYNERGY Singapore Press Holdings | Annual Report 2003 | Corporate Governance 41

DISCLOSURE ON REMUNERATION The remuneration of directors and executives shown in the above tables excludes value of stock options granted Directors’ Remuneration and income derived from stock options exercised during the financial year under the Company’s relevant share Directors of the Company receiving remuneration for this financial year: option schemes.

Name of Director Directors’ Fees Base/Fixed Salary Variable or Bonuses Benefits in Kind Total The Company does not employ any immediate family member of any director or the CEO. (%) (%) (%) (%) (%) COMMUNICATIONS WITH INVESTORS AND SHAREHOLDERS The Company holds analysts’ briefings of its half-year and full-year results and a media briefing of its full-year Executive results. The half-year and full-year results are published through the MASNET, news releases and the Company’s $1,500,000 to $1,749,999 corporate website. Lim Kim San* – 62 36 2 100 $500,000 to $749,999 The Company will be adopting quarterly reporting of its results in the next financial year. Alan Chan Heng Loon (CEO) – 65.5 16.5 18 100 The Company does not practise selective disclosure. Price sensitive information is first publicly released, either Independent before the Company meets with any group of investors or analysts or simultaneously with such meetings. Below $250,000 Lim Chin Beng (Chairman) 96.4 ––3.6 100 The Company has an investor relations team which communicates with its investors on a regular basis and attends Cheong Choong Kong 100 –––100 to their queries. Shareholders or any member of the public may also post any queries via email to our corporate Michael Y.O. Fam 100 –––100 email address, [email protected], and these will be attended to by the corporate relations team in the Company. Lee Ek Tieng 100 –––100 All shareholders of the Company receive the annual report and notice of AGM. The notice is also advertised in Lee Hee Seng 100 –––100 the newspapers. Ngiam Tong Dow 100 –––100 Tang I-Fang 100 –––100 The annual report is available on the Company’s corporate website, www.sph.com.sg. At AGMs, shareholders are Wee Cho Yaw 100 –––100 given the opportunity to air their views and ask directors or management questions regarding the Company. The Yeo Ning Hong 100 –––100 Articles allow a member of the Company to appoint one or two proxies to attend and vote instead of the member. The Articles currently do not allow a member to vote in absentia. Note: * Remuneration in respect of his positions as Executive Chairman / Director up to December 13, 2002 and as Senior Advisor thereafter. CODE OF BUSINESS ETHICS The Group has adopted a Code of Business Ethics to regulate the standards and ethical conduct of its employees who are required to observe and maintain high standards of integrity. Remuneration of Executives Number of top five executives of the Company (excluding Executive Directors named in the above table) in each DEALINGS IN SECURITIES remuneration band for this financial year: The Group has adopted an internal code in conformity with the provisions of the Best Practices Guide in the Singapore Exchange Listing Manual to provide guidance to its directors and key executives in relation to the dealings Remuneration Bands No of Executives in the Company’s securities. In line with the guidelines, directors and key executives of the Group who have access to price-sensitive and confidential information are not permitted to deal in the Company’s securities during the $500,000 to $749,999 1 periods commencing one month before the announcement of the Group’s financial results and ending on the date of $250,000 to $499,999 4 the announcement of such results, or when they are in possession of unpublished price-sensitive information on the Total 5 Group. A system of reporting of securities dealings by directors to the company secretary and by key executives to the head of Human Resources Division, has also been established to effectively monitor the dealings of these parties in The Company adopts a remuneration policy for staff comprising a fixed component, a variable component and the securities of the Company. benefits in kind. The fixed component is in the form of a base salary. The variable component is in the form of a variable bonus that is linked to the Company’s and individual performance. The benefits in kind would include club and car benefits. The RC will approve the bonus for distribution to staff based on individual performance. Another element of the variable component is the grant of share options to staff under the share option scheme. This seeks to align the interests of staff with that of the shareholders. 42 GROWTH WITH SYNERGY Singapore Press Holdings | Annual Report 2003 | Financial Review 43

Financial Review Group Simplified Financial Position

2003 2002 2001 2000 1999 S$’000 S$’000 S$’000 S$’000 S$’000

Assets Property, plant and equipment 633,856 670,186 576,408 460,507 465,650 Investment properties 1,039,754 1,059,538 1,089,438 863,156 850,125 Investments 1,185,020 1,062,190 991,099 1,192,895 860,348 Cash and deposits 328,176 387,528 554,338 701,952 840,375 Trade debtors 85,352 92,484 117,948 138,004 103,868 Stocks 54,763 47,045 59,126 45,118 30,915 Other assets 41,324 33,698 33,667 28,336 28,625 Total 3,368,245 3,352,669 3,422,024 3,429,968 3,179,906

Shareholders’ Interests Capital and reserves 2,247,736 2,241,538 2,289,931 2,414,126 2,185,671

Liabilities Borrowings Current 52,900 25,000 183,500 –– Non-current 740,000 770,000 550,000 568,587 582,943 Trade creditors 58,049 59,526 40,367 66,254 55,336 Taxation Current 68,712 51,204 92,820 142,798 116,522 Deferred 85,199 83,287 73,226 52,900 65,033 Other liabilities 115,649 122,114 192,180 185,303 174,401 Total 3,368,245 3,352,669 3,422,024 3,429,968 3,179,906 44 GROWTH WITH SYNERGY Singapore Press Holdings | Annual Report 2003 | Financial Review 45

After-Tax Profit

Segmental Operating Revenue S$'M 400 350 300 S$’M 250

1,075 200

1,050 150

1,025 100 50 1,000 0 975 Year 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 950

925

900

875 Earnings Per Share #

850 S$ 1.20 825 1.00 800 0.80 0 0.60 Year 1999 2000 2001 2002 2003 0.40

0.20

Newspapers & Magazines Broadcasting & Multimedia Property 0 Year 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 # Adjusted for bonus issues in FY 1993, FY 1995 and FY 1998 and capital reduction in FY 1999.

Segmental Pre-Tax Profit Operating Margin and Return on Operating Revenue

S$’M % 50

40 550

525 30 500 20 475

450 10

425 0 400 Year 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

375 Operating Margin Return on Operating Revenue 350

325 300 Return on Shareholders’ Funds and Return on Assets 0 % 30 -50 25 -100 20

15 Year 1999 2000 2001 2002 2003 10

5

Newspapers & Magazines Broadcasting, Multimedia & Telecommunications Treasury & Investment Property 0 Year 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Return on Shareholders’ Funds Return on Assets 46 GROWTH WITH SYNERGY Singapore Press Holdings | Annual Report 2003 | Financial Review 47

Revenue Composition Gross Dividend Per Share #

S$

4% 1.60

6% 4% 1.40 6%

70% 70% 1.20

20% 1.00 20%

0.80

0.60

0.40 FY 2003 FY 2002

0.20 Advertisements FY 2003 FY 2002 Circulation

– Display 40% 41% 0 – Classified 16% 16% Rental & Services Year 1988 1989 1990 1991 1992 1993 1994 1995* 1996 1997 1998 1999 2000* 2001 2002* 2003* – Recruit & Notices 8% 9%

– Magazines 1% 1% Others # Adjusted for bonus issues in FY 1993, FY 1995 and FY 1998 and capital reduction in FY 1999.

– Broadcasting & Multimedia 5% 3%

Net Dividend Cost Composition S$’M

500 4% 450 5% 29% 31% 21% 400 17% 350

300

39% 38% 8% 250 8% 200

150

100 FY 2003 FY 2002 50

Materials, Consumables & Broadcasting Costs Finance Costs 0 Year 1988 1989 1990 1991 1992 1993 1994 1995* 1996 1997 1998 1999 2000* 2001 2002* 2003* Staff Costs Other Operating Expenses

* Included special dividends of 20 cents in FY 1995, 80 cents in FY 2000, 30 cents in FY 2002 and 60 cents in FY 2003.

Depreciation 48 GROWTH WITH SYNERGY Singapore Press Holdings | Annual Report 2003 | Financial Review 49

Value Added Statement Group Half-Yearly Results

2003 2002 2003 2002 S$’000 S$’000 1st Half 2nd Half Full Year 1st Half 2nd Half Full Year S$’000 S$’000 S$’000 S$’000 S$’000 S$’000 Sale of goods and services 897,816 903,525 Purchase of materials and services (276,561) (271,757) Operating revenue 457,695 440,121 897,816 436,171 467,354 903,525 Value added from operations 621,255 631,768 Profit from operations 146,628 144,268 290,896 138,700 172,566 311,266 Non-production income and expenses: Foreign exchange differences 639 2,185 Profit before exceptional items 166,530 150,614 317,144 166,511 188,760 355,271 Loss on disposal of property, plant and equipment (403) (5,238) Provision for doubtful trade debts (2,118) (5,848) Profit before taxation 302,323 136,581 438,904 203,452 154,022 357,474 Bad trade debts recovered 202 321 Investment income 39,584 41,671 Profit attributable to shareholders 273,472 105,264 378,736 162,953 144,444 307,397 Share of profits less losses of associates 10,990 31,021 Exceptional items 121,760 2,203 Earnings per S$1 share (S$) 0.74 0.28 1.02 0.44 0.39 0.83 Total value added 791,909 698,083

Distribution: Employees’ wages, provident fund contributions and other benefits 249,494 254,385 Corporate and other taxes 63,472 53,650 Interest paid 24,326 28,687 Donation and sponsorship 21,128 1,227 Directors’ fees 702 637 Net dividends to shareholders 375,058 195,291 Total distributed 734,180 533,877

Retained in the business: Depreciation 53,652 52,326 Minority interests 399 (226) Retained earnings 3,678 112,106 791,909 698,083

Productivity ratios: S$ S$ Value added per employee 167,229 157,548 Value added per $ employment costs 2.49 2.48 Value added per $ investment in fixed assets (before depreciation) 0.68 0.69 Value added per $ operating revenue 0.69 0.70 50 GROWTH WITH SYNERGY

Financial Report Financial Report 52 Directors’ Report 60 Statement by Directors 61 Auditors’ Report 62 Audited Financial Statements 62 Balance Sheets 63 Income Statements 64 Statements of Changes in Shareholders’ Equity 66 Consolidated Cash Flow Statement 69 Notes to the Financial Statements 105 Shareholding Statistics 110 Overseas Bureaux/Offices 112 Properties of the Group 113 Notice of Annual General Meeting 119 Proxy Form 52 GROWTH WITH SYNERGY Singapore Press Holdings | Annual Report 2003 | Directors’ Report 53

Directors’ Report for the year ended August 31, 2003

The Directors present their report together with the audited financial statements of the Group and of the Company for the (b) The Group acquired the following subsidiary during the financial year: year ended August 31, 2003. Net tangible Effective assets at date of equity acquired Directors Consideration acquisition by the Group 1. The Directors in office at the date of this report are: S$ S$ % Lim Chin Beng Chan Heng Loon Alan TP Ventures Pte Ltd 2 2 100 Cheong Choong Kong Michael Fam Yue Onn (c) There was no disposal of subsidiaries during the financial year. Lee Ek Tieng Lee Hee Seng Ngiam Tong Dow Results Tang I-Fang 4. Group Company Wee Cho Yaw S$’000 S$’000 Yeo Ning Hong Profit after taxation 379,135 470,204 Minority interests (399) – Principal Activities Profit attributable to shareholders 378,736 470,204 2. The principal activities of the Group consist of: (a) publishing, printing and distributing newspapers, (b) publishing and distributing magazines, Reserves and Provisions (c) providing broadcasting and multimedia services, 5. Material movements in reserves and provisions are disclosed in the financial statements. (d) holding investments, and (e) holding and managing properties. Share Capital and Debentures The principal activities of the Company consist of: 6. (a) During the financial year, the following shares were issued: (a) publishing, printing and distributing newspapers, (b) distributing magazines, Class of Shares Shares Issued Purpose (c) providing multimedia content and services, (d) holding shares in subsidiaries, The Company (e) holding investments, and Management 9,098 shares of S$1 each for cash, Issue of shares in accordance with the Newspaper (f) providing management services to subsidiaries. at market prices prevailing on and Printing Presses Act. allotment dates. Following the partial disposal of interests in an associate during the financial year, the activities of this associate relating to the provision of telecommunication services ceased to be carried on by the Group. Except as disclosed, Ordinary 900,965 shares of S$1 each for cash, Issue of shares under the Singapore Press Holdings there have been no significant changes in the nature of these activities during the financial year. at exercise prices. Group Executives’ Share Option Scheme.

Acquisition and Disposal of Subsidiaries Subsidiaries 3. (a) The Group incorporated the following subsidiary during the financial year: TP Ventures Pte Ltd 99,998 ordinary shares of S$1 each To provide working capital. at par for cash. Share capital issued Effective on incorporation, equity held at par for cash by the Group (b) The newly issued shares rank pari passu in all respects with the previously issued shares. S$ %

Evol Media Pte Ltd 2 100 54 GROWTH WITH SYNERGY Singapore Press Holdings | Annual Report 2003 | Directors’ Report 55

(c) At the Annual General Meeting held on December 13, 2002, shareholders approved the renewal of a mandate (first Dividends approved by shareholders on July 16, 1999) to permit the Company to purchase or acquire issued ordinary shares S$’000 of S$1 each fully paid in the capital of the Company, not exceeding in aggregate 10 percent of the issued ordinary share 9. (a) The Directors recommend a special dividend of 30 cents per share less income tax at 22%. 86,476 capital of the Company as at December 13, 2002. During the financial year, 1,050,000 ordinary shares were repurchased. (b) In addition, the Directors recommend a final dividend of 50 cents per share less income tax (d) No debentures were issued by the Company or its subsidiaries during the financial year. at 22% in respect of the financial year. 144,128

(c) The amount of dividends payable may be increased in the event that share options set out Arrangements to enable Directors to acquire Benefits in Note 3 to the financial statements are exercised before the share transfer register is 7. Neither during nor at the end of the financial year was the Company a party to any arrangement whose object was closed for dividend entitlement. to enable the Directors of the Company to acquire benefits through the acquisition of shares in or debentures of the Company or any other body corporate, except as disclosed under ‘Share Options’ in paragraphs 19 and 22. (d) During the financial year, the following dividends were paid by the Company: (i) A final dividend of 50 cents per share less income tax at 22% in respect of the previous financial year. 144,327 Directors’ Interests in Shares (ii) A special dividend of 30 cents per share less income tax at 22% in respect of the previous 8. The Directors holding office as at August 31, 2003 who had interests in shares and options in the Company and its financial year. 86,596 subsidiaries as recorded in the register of Directors’ shareholdings were as follows: (iii) An interim dividend of 20 cents per share less income tax at 22% in respect of the financial year under review. 57,654 Shares of S$1 each (iv) A special interim dividend of 30 cents per share less income tax at 22% in respect of Direct Interests Deemed Interests the financial year under review. 86,481 Sept 1, Aug 31, Sept 21, Sept 1, Aug 31, Sept 21, 2002 2003 2003 2002 2003 2003 Bad and Doubtful Debts The Company 10. (a) Before the financial statements of the Company were made out, the Directors took reasonable steps to ascertain Management Shares the action taken in relation to the writing off of bad debts and providing for doubtful debts and have satisfied Lim Chin Beng 1 11– –– themselves that all known bad debts have been written off and that adequate provision has been made for doubtful Chan Heng Loon Alan 1 22– –– debts. Cheong Choong Kong 1 11– –– Michael Fam Yue Onn 1 11– –– (b) At the date of this report, the Directors are not aware of any circumstances which would render the amounts Lee Ek Tieng 1 11– –– written off for bad debts or provided for doubtful debts in the financial statements of the Group inadequate Lee Hee Seng 1 11– –– to any substantial extent. Ngiam Tong Dow 1 11– –– Tang I-Fang 1 11– –– Wee Cho Yaw 1 11– –– Current Assets Yeo Ning Hong 1 11– –– 11. (a) Before the financial statements of the Company were made out, the Directors took reasonable steps to ascertain that any current assets which were unlikely to realise their book values in the ordinary course of business have Ordinary Shares been written down to their estimated realisable values, or that adequate provision has been made for the diminution Cheong Choong Kong 8,000 8,000 8,000 1,000 1,000 1,000 in values of such current assets. Michael Fam Yue Onn 50,000 50,000 50,000 – –– Lee Hee Seng 113,082 113,082 113,082 – 110,000 110,000 (b) At the date of this report, the Directors are not aware of any circumstances which would render the values Wee Cho Yaw 139,043 139,043 139,043 – –– attributed to current assets in the financial statements of the Group misleading. Yeo Ning Hong 7,920 7,920 7,920 12,870 12,870 12,870

Options for Ordinary Shares Chan Heng Loon Alan – 50,000 50,000 – ––

Full detailed information regarding directors’ shareholdings can be obtained in accordance with Sections 164(8) and (9) of the Companies Act, Chapter 50. 56 GROWTH WITH SYNERGY Singapore Press Holdings | Annual Report 2003 | Directors’ Report 57

Charge on Assets and Contingent Liabilities Share Options 12. At the date of this report, there does not exist any: Share Options in the Company (a) charge on the assets of the Group or of the Company which has arisen since the end of the financial year which Singapore Press Holdings Group Executives’ Share Option Scheme (“1990 Scheme”) secures the liability of any other person, and 19. (a) The 1990 Scheme was approved by shareholders on December 28, 1990 and modified pursuant to ordinary resolutions passed by shareholders at Extraordinary General Meetings held on January 7, 1995, January 6, 1996 (b) contingent liability of the Group or of the Company which has arisen since the end of the financial year. and July 16, 1999 respectively.

(b) (i) Details of options granted previously have been disclosed in the Directors’ Reports for the respective years. Ability to meet Obligations 13. No contingent or other liability of any company in the Group or of the Company has become enforceable or is likely (ii) The persons to whom the options have been granted do not have the right to participate, by virtue of the to become enforceable within the period of twelve months after the end of the financial year which, in the opinion options, in any share issue of any other company. of the Directors, will or may substantially affect the ability of the Group or of the Company to meet their obligations as and when they fall due. (c) The 1990 Scheme was replaced by the 1999 Scheme on July 16, 1999, and since then, no options have been granted under the 1990 Scheme.

Other Statutory Information (d) The aggregate number of options granted since the commencement of the 1990 Scheme on December 28, 1990 14. As at the date of this report, the Directors are not aware of any circumstances not otherwise dealt with in their report to August 31, 1999 is 14,347,975. or the financial statements of the Group and of the Company which would render any amount stated in the financial statements misleading. 20. No shares of the Company have been issued during the financial year by virtue of the exercise of options to take up unissued shares, except as disclosed in paragraph 6(a). 15. In the opinion of the Directors, the results of the operations of the Group and of the Company for the financial year ended August 31, 2003 have not been substantially affected by any item, transaction or event of a material and 21. The unissued ordinary shares of the Company under option at the end of the financial year pursuant to the 1990 unusual nature other than the exceptional items set out in Note 26 to the financial statements. Scheme are set out in Note 3 to the financial statements.

16. In the opinion of the Directors, no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial year and the date of this report which would affect substantially the results of the Singapore Press Holdings Group (1999) Share Option Scheme (“1999 Scheme”) operations of the Group and of the Company for the current financial year. 22. (a) The 1999 Scheme was approved by shareholders at an Extraordinary General Meeting held on July 16, 1999 to replace the 1990 Scheme.

Directors’ Benefits (b) Details of options granted previously have been disclosed in the Directors’ Reports for the respective years. 17. Since the end of the previous financial year, no Director has received or become entitled to receive a benefit under a contract which is required to be disclosed by Section 201(8) of the Companies Act, Chapter 50. (c) During the financial year, options were granted for a total of 3,251,600 ordinary shares of S$1 each, details of which are as follows: (i) Categories of persons to whom options were granted: Material Contracts

18. There are no material contracts of the Group and of the Company involving the interests of the Chief Executive Total No. of Ordinary Officer, each director or controlling shareholder, either still subsisting at the end of the financial year or if not then Shares of S$1 each subsisting, entered into since the end of the previous financial year. Category No. of Persons under Options granted Executive Directors 2 275,000 Employees 1,383 2,967,100 Associates 1 9,500 1,386 3,251,600

(ii) The expiry date of these options is disclosed in Note 3 to the financial statements, provided that they have not been subsequently cancelled.

(iii) The persons to whom the options have been granted do not have the right to participate, by virtue of the options, in any share issue of any other company. 58 GROWTH WITH SYNERGY Singapore Press Holdings | Annual Report 2003 | Directors’ Report 59

(d) The aggregate number of options granted since the commencement of the 1999 Scheme on July 16, 1999 to Audit Committee August 31, 2003 is 12,717,400. 31. The Audit Committee carried out its functions in accordance with Section 201B(5) of the Companies Act, Chapter 50, and the Singapore Exchange Listing Manual. 23. No shares of the Company have been issued during the financial year by virtue of the exercise of options to take up unissued shares, pursuant to the 1999 Scheme. Its functions include reviewing the audit plans and audit reports of the internal and external auditors, the auditors’ evaluation of the internal accounting controls, and the scope and adequacy of the internal audit function; reviewing 24. The unissued ordinary shares of the Company under option at the end of the financial year pursuant to the 1999 the balance sheet and income statement of the Company and the Group before submitting them to the Board Scheme are set out in Note 3 to the financial statements. for approval; reviewing any interested person transaction; and reviewing the independence, objectivity and cost effectiveness of the external auditors and the nature and extent of non-audit services supplied by them.

Share Options in Subsidiaries It also recommends to the Board the appointment of external auditors, serves as a channel of communication SPH MediaWorks Pre-IPO Share Option Scheme (“MediaWorks Pre-IPO Scheme”) between the Board and the auditors, and performs such other functions as may be agreed by the Audit Committee 25. (a) The MediaWorks Pre-IPO Scheme was approved on February 12, 2001. and the Board.

(b) (i) Details of options granted previously have been disclosed in the Directors’ Reports for the respective years. Auditors (ii) The persons to whom the options have been granted do not have the right to participate, by virtue of the 32. The auditors, PricewaterhouseCoopers, have expressed their willingness to accept re-appointment. options, in any share issue of any other company.

(c) No options were granted during the financial year under the MediaWorks Pre-IPO Scheme. On behalf of the Directors

(d) The aggregate number of options granted since the commencement of the MediaWorks Pre-IPO Scheme on February 12, 2001 to August 31, 2003 is 65,026,000.

26. No shares of SPH MediaWorks Ltd have been issued during the financial year by virtue of the exercise of options to Lim Chin Beng Michael Fam Yue Onn take up unissued shares. Chairman Director

27. At the end of the financial year, unissued ordinary shares of SPH MediaWorks Ltd under option pursuant to the Singapore, MediaWorks Pre-IPO Scheme were as follows: October 10, 2003

Date of Expiry Exercise Balance Options Options Balance Grant Date Price 1.9.02 Exercised Cancelled 31.8.03

Feb 23, 2001 * S$0.10 51,210,000 – (22,160,000) 29,050,000

*February 23, 2011 or the fifth anniversary of the Listing Date, whichever is earlier.

Other Subsidiaries 28. No option to take up unissued shares of other subsidiaries has been granted during the financial year.

29. No shares of other subsidiaries have been issued during the financial year by virtue of the exercise of options to take up unissued shares.

30. At the end of the financial year, there were no unissued shares of other subsidiaries under option. 60 GROWTH WITH SYNERGY Singapore Press Holdings | Annual Report 2003 | Auditors’ Report 61

Statement by Directors Auditors’ Report to the members of Singapore Press Holdings Limited

In the opinion of the Directors, We have audited the financial statements of Singapore Press Holdings Limited and the consolidated financial statements of the Group for the financial year ended August 31, 2003 set out on pages 62 to 104. These financial statements are the responsibility (a) the accompanying financial statements for the year ended August 31, 2003 are drawn up so as to exhibit a true of the Company’s directors. Our responsibility is to express an opinion on these financial statements based on our audit. and fair view of: We conducted our audit in accordance with Singapore Standards on Auditing. Those Standards require that we plan and (i) the results of the business and changes in shareholders’ equity of the Group and of the Company, and the perform our audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An cash flows of the Group; and audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the directors, as well as (ii) the state of affairs of the Group and of the Company. evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

(b) at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its In our opinion, debts as and when they fall due. (a) the accompanying financial statements of the Company and consolidated financial statements of the Group are properly drawn up in accordance with the provisions of the Singapore Companies Act (“Act”) and Singapore Statements of Accounting Standard and so as to give a true and fair view of: On behalf of the Directors (i) the state of affairs of the Company and of the Group as at August 31, 2003, the profit and changes in equity of the Company and of the Group, and the cash flows of the Group for the financial year ended on that date; and

(ii) the other matters required by Section 201 of the Act to be dealt with in the financial statements of the Company Lim Chin Beng Michael Fam Yue Onn and the consolidated financial statements of the Group; and Chairman Director (b) the accounting and other records, and the registers required by the Act to be kept by the Company and by those Singapore, subsidiaries incorporated in Singapore of which we are the auditors have been properly kept in accordance with the October 10, 2003 provisions of the Act.

We have considered the financial statements and auditors’ reports of the subsidiaries of which we have not acted as auditors, being financial statements included in the consolidated financial statements. The names of these subsidiaries are stated in Note 30 to the financial statements.

We are satisfied that the financial statements of these subsidiaries that have been consolidated with the financial statements of the Company are in form and content appropriate and proper for the purposes of the preparation of the consolidated financial statements and we have received satisfactory information and explanations as required by us for those purposes.

The auditors’ reports on the financial statements of the subsidiaries were not subject to any qualification and in respect of subsidiaries incorporated in Singapore did not include any comment made under Section 207(3) of the Act.

PricewaterhouseCoopers Certified Public Accountants

Singapore, October 10, 2003 62 GROWTH WITH SYNERGY Singapore Press Holdings | Annual Report 2003 | Audited Financial Statements 63

Audited Financial Statements Audited Financial Statements BALANCE SHEETS as at August 31, 2003 INCOME STATEMENTS for the year ended August 31, 2003 Group Company Group Company Note 2003 2002 2003 2002 Note 2003 2002 2003 2002 S$’000 S$’000 S$’000 S$’000 S$’000 S$’000 S$’000 S$’000 CAPITAL EMPLOYED Share capital 3 369,557 369,697 369,557 369,697 Operating revenue 21 Share premium 27,301 15,374 27,301 15,374 Newspapers and magazines 789,382 808,277 771,365 791,753 Capital redemption reserve 4,509 3,459 4,509 3,459 Broadcasting and multimedia 55,734 41,386 6,320 4,146 Capital reserve 4 2,005 2,005 – – Property 52,700 53,862 – – Retained profit 1,843,587 1,857,878 1,776,944 1,699,767 897,816 903,525 777,685 795,899 2,246,959 2,248,413 2,178,311 2,088,297 Other operating income 8,816 10,010 7,450 8,111 Exchange translation difference 777 (6,875) – – 906,632 913,535 785,135 804,010 Shareholders’ interests 2,247,736 2,241,538 2,178,311 2,088,297 Materials, consumables & Minority interests 1,108 709 – – broadcasting costs (185,989) (195,213) (119,567) (139,502) 2,248,844 2,242,247 2,178,311 2,088,297 Staff costs 22 (240,758) (245,682) (203,478) (204,347) Non-current liabilities Depreciation 7 (53,652) (52,326) (34,190) (32,553) Deferred taxation 5a 85,199 83,287 69,539 67,575 Other operating expenses (115,337) (109,048) (129,273) (117,948) Borrowings 6 740,000 770,000 – – Contribution to Press Foundation 3,074,043 3,095,534 2,247,850 2,155,872 of Singapore Limited (20,000) – (20,000) – Profit from operations 23 290,896 311,266 278,627 309,660 EMPLOYMENT OF CAPITAL Finance costs 24 (24,326) (28,687) – – Property, plant and equipment 7 633,856 670,186 365,671 375,062 Net income from investments 25 39,584 41,671 1,244 14,151 Investment property 8 1,039,754 1,059,538 – – Dividends from unquoted Interests in subsidiaries 9 – – 1,827,554 1,669,823 subsidiaries – non tax-exempt (gross) – – 13,637 240,619 Interests in associates 10 186 146,294 – – – tax-exempt (one-tier) – – 236,725 – Long-term investments 11 269,224 340,896 36,002 36,002 Share of profits less losses Other non-current assets 12 4,916 5,276 4,781 4,963 of associates 10,990 31,021 – – Profit before exceptional items 317,144 355,271 530,233 564,430 Current assets Exceptional items 26 121,760 2,203 – (142,201) Stocks 13 54,763 47,045 37,268 31,045 Profit before taxation 438,904 357,474 530,233 422,229 Prepaid content rights 14 22,227 14,275 – – Taxation 5c (59,769) (50,303) (60,029) (111,536) Trade debtors 15 85,352 92,484 76,930 81,842 Profit after taxation 379,135 307,171 470,204 310,693 Other debtors and prepayments 16 14,181 14,147 4,546 3,433 Minority interests (399) 226 – – Short-term investments 17 915,610 575,000 – – Profit attributable to shareholders 378,736 307,397 470,204 310,693 Cash on deposit 297,020 345,305 41,493 112,199 Cash and bank balances 31,156 42,223 20,595 22,332 Earnings per S$1 share (S$) 29 1,420,309 1,130,479 180,832 250,851 Basic 1.02 0.83 Current liabilities Diluted 1.02 0.83 Trade creditors 58,049 59,526 32,206 31,500 Other creditors and accrued liabilities 18 114,541 121,405 80,901 107,128 Borrowings 6 52,900 25,000 – – Current taxation 5b 68,712 51,204 53,883 42,201 294,202 257,135 166,990 180,829

Net current assets 1,126,107 873,344 13,842 70,022 3,074,043 3,095,534 2,247,850 2,155,872

The accompanying notes form part of these financial statements. The accompanying notes form part of these financial statements. 64 GROWTH WITH SYNERGY Singapore Press Holdings | Annual Report 2003 | Audited Financial Statements 65

STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY for the year ended August 31, 2003

Group Company Capital Exchange Capital Share Share Redemption Capital Retained Translation Share Share Redemption Retained Capital Premium Reserve Reserve Profit Difference Total Capital Premium Reserve Profit Total S$’000 S$’000 S$’000 S$’000 S$’000 S$’000 S$’000 S$’000 S$’000 S$’000 S$’000 S$’000

Balance as at September 1, 2002 369,697 15,374 3,459 2,005 1,857,878 (6,875) 2,241,538 Balance as at September 1, 2002 369,697 15,374 3,459 1,699,767 2,088,297

Exchange translation difference – – – – – 7,652 7,652 Profit for the financial year – – – 470,204 470,204 Gains not recognised in Issue of shares (Note 3) 910–––910 the income statement – – – – – 7,652 7,652 Premium on issue of shares – 11,927 – – 11,927 Share buy back (Note 27) (1,050) – 1,050 (17,969) (17,969) Profit for the financial year – – – – 378,736 – 378,736 Dividends (Note 28) – – – (375,058) (375,058) Issue of shares (Note 3) 910 – – – – – 910 Balance as at August 31, 2003 369,557 27,301 4,509 1,776,944 2,178,311 Premium on issue of shares – 11,927 – – – – 11,927 Share buy back (Note 27) (1,050) – 1,050 – (17,969) – (17,969) Dividends (Note 28) – – – – (375,058) – (375,058) Balance as at September 1, 2001 369,644 93,190 2,268 1,605,725 2,070,827 Balance as at August 31, 2003 369,557 27,301 4,509 2,005 1,843,587 777 2,247,736 Profit for the financial year – – – 310,693 310,693 Balance as at September 1, 2001 369,644 93,190 2,268 69,844 1,767,132 (12,147) 2,289,931 Issue of shares (Note 3) 1,244–––1,244 Premium on issue of shares – 14,548 – – 14,548 Exchange translation difference – – – – – 5,272 5,272 Share buy back (Note 27) (1,191) – 1,191 (21,360) (21,360) Gains not recognised in Capital distribution – (92,364) – – (92,364) the income statement – – – – – 5,272 5,272 Dividends (Note 28) – – – (195,291) (195,291) Balance as at August 31, 2002 369,697 15,374 3,459 1,699,767 2,088,297 Profit for the financial year – – – – 307,397 – 307,397 Issue of shares (Note 3) 1,244 – – – – – 1,244 Premium on issue of shares – 14,548 – – – – 14,548 Share buy back (Note 27) (1,191) – 1,191 – (21,360) – (21,360) Capital distribution – (92,364) – – – – (92,364) Privatisation of a subsidiary – – – (67,839) – – (67,839) Dividends (Note 28) – – – – (195,291) – (195,291) Balance as at August 31, 2002 369,697 15,374 3,459 2,005 1,857,878 (6,875) 2,241,538

The accompanying notes form part of these financial statements. 66 GROWTH WITH SYNERGY Singapore Press Holdings | Annual Report 2003 | Audited Financial Statements 67

CONS0LIDATED CASH FLOW STATEMENT for the year ended August 31, 2003

Group Group 2003 2002 2003 2002 S$’000 S$’000 S$’000 S$’000 CASH FLOWS FROM OPERATING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES

Profit before taxation 438,904 357,474 Purchase of property, plant and equipment (26,984) (183,767) Proceeds on disposal of property, plant and equipment 184 3,474 Adjustments for: Additions to investment property (30,216) (7,500) Depreciation 53,652 52,326 Acquisition of additional interests in subsidiaries and an associate (1,540) (44,535) Loss on disposal of property, plant and equipment 403 5,238 Amounts owing by associates 9 (1,311) Finance costs 24,326 28,687 Loans to associates (350) (800) Investment income (39,584) (41,671) Partial disposal of interests in an associate 277,079 – Share of profits less losses of associates (10,990) (31,021) Proceeds on completion of liquidation of subsidiaries and an associate 1,794 – Exceptional items (121,760) (2,203) Purchase of long-term investments (1,908) (32,350) Operating cash flow before working capital changes 344,951 368,830 Proceeds on disposal/redemption of long-term investments 21,954 89,395 Purchase of short-term investments (705,564) (331,494) Changes in working capital: Proceeds on disposal of short-term investments 569,449 215,669 Stocks (7,718) 12,081 Net increase in funds under management (100,103) (8,749) Prepaid content rights (7,952) (5,909) Investment income 49,534 41,671 Debtors 7,098 30,000 Repayment of loan by an associate – 60,920 Creditors (8,341) (39,195) 53,338 (199,377) 328,038 365,807 Add/(Less): Items not involving movement of funds Income tax paid (40,349) (81,821) Provision for diminution in value of internally-managed investments 18,552 17,341 Dividends paid (375,058) (195,291) Profit on sale of internally-managed investments (13,625) (8,709) Dividends paid (net) by a subsidiary to a minority shareholder – (900) Accretion of discount on bonds (57) (468) (87,369) 87,795 Amortisation of premium on bonds 1,273 385 Decrease in non-current assets 94 1,342 Net cash from/(used in) investing activities 59,481 (190,828) Net cash (used in)/from operating activities (87,275) 89,137 68 GROWTH WITH SYNERGY Singapore Press Holdings | Annual Report 2003 | Audited Financial Statements 69

CONS0LIDATED CASH FLOW STATEMENT (cont’d) NOTES TO THE FINANCIAL STATEMENTS for the year ended August 31, 2003 August 31, 2003

Group These notes form an integral part of and should be read in conjunction with the financial statements. 2003 2002 S$’000 S$’000 1. General CASH FLOWS FROM FINANCING ACTIVITIES The Company is incorporated and domiciled in Singapore. The financial statements of the Company and the consolidated financial statements of the Group are expressed in Singapore dollars. Repayment of bank loans (6,500) (180,000) Bank loans 4,400 241,500 The principal activities of the Group consist of: Finance costs (24,326) (28,687) (a) publishing, printing and distributing newspapers, Proceeds on issue of shares by Company 12,837 15,792 (b) publishing and distributing magazines, Share buy back (17,969) (21,360) (c) providing broadcasting and multimedia services, Capital distribution – (92,364) (d) holding investments, and Net cash used in financing activities (31,558) (65,119) (e) holding and managing properties.

Net decrease in cash and cash equivalents (59,352) (166,810) The principal activities of the Company consist of: Cash and cash equivalents at beginning of year 387,528 554,338 (a) publishing, printing and distributing newspapers, Cash and cash equivalents at end of year [Note (a)] 328,176 387,528 (b) distributing magazines, (c) providing multimedia content and services, (d) holding shares in subsidiaries, (a) Cash and Cash Equivalents at the end of the year comprised: (e) holding investments, and (f) providing management services to subsidiaries. Cash on deposit 297,020 345,305 Cash and bank balances 31,156 42,223 Following the partial disposal of interests in an associate during the financial year, the activities of this associate 328,176 387,528 relating to the provision of telecommunication services ceased to be carried on by the Group.

2. Significant Accounting Policies (a) Basis of Preparation The financial statements are prepared in accordance with Singapore Statements of Accounting Standard.

The financial statements are prepared in accordance with the historical cost convention.

(b) Basis of Consolidation The consolidated financial statements include the financial statements of the Company and its subsidiaries made up to the end of the financial year. The results of subsidiaries acquired or disposed of during the year are included in or excluded from the consolidated income statement from the date of their acquisition or disposal. Inter-company balances and transactions are eliminated on consolidation and the consolidated financial statements reflect external transactions only.

(c) Exchange Translation Difference On consolidation of foreign entities, the assets and liabilities are converted into Singapore dollars at the rates of exchange closely approximating to those ruling at the balance sheet date and the income statements are converted into Singapore dollars at the average rates of exchange ruling during the year. The exchange translation difference arising therefrom is reported as a separate component of shareholders’ interests.

Exchange differences arising on monetary items that, in substance, form part of the Group’s or the Company’s net investment in foreign entities are taken to the exchange translation difference account until the disposal of the net investments, at which time they will be recognised as income or expense in the income statements.

The accompanying notes form part of these financial statements. 70 GROWTH WITH SYNERGY Singapore Press Holdings | Annual Report 2003 | Audited Financial Statements 71

NOTES TO THE FINANCIAL STATEMENTS (cont’d) August 31, 2003

2. Significant Accounting Policies (cont’d) The Group’s share of the results of associates is included in the consolidated income statement. The Group’s (d) Goodwill on Consolidation share of the post-acquisition retained profits and reserves or accumulated losses of associates is added to or Goodwill on consolidation, representing the difference between the cost of acquisition of a subsidiary or an associate deducted from the cost of these investments in the consolidated balance sheet. over the fair value of net identifiable assets acquired, is amortised on a straight-line basis in the consolidated income statement over its economic useful life up to a maximum of 20 financial years. Goodwill assessed as In the Company’s balance sheet, investments in associates are stated at cost. having no continuing economic value is written off to the consolidated income statement. Where an indication of impairment exists, the carrying amount of the investment is assessed and written down (e) Deferred Taxation to its recoverable amount. The impairment loss is charged to the income statement. Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Tax rates enacted or (i) Investments substantively enacted by the balance sheet date are used to determine deferred income tax. Long-term investments in equity are stated at cost. Long-term investments in bonds are stated at cost, adjusted for amortisation of premium and accretion of discount. Where cost of these investments exceeds realisable Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available value, provision is made for diminution in value which is other than temporary, determined on an individual basis. against which the temporary differences can be utilised. Short-term investments are stated at the lower of cost and realisable value on an individual basis. (f) Property, Plant and Equipment and Depreciation (i) Property, plant and equipment are stated at cost less accumulated depreciation. Dividend income from investments other than subsidiaries is recognised on a cash basis and interest income on an accrual basis. (ii) Depreciation is calculated to write off the cost on a straight-line basis over the expected useful lives of the assets. The estimated useful lives for this purpose are: Dividend income from subsidiaries is recognised in the accounting period in which it is declared. Freehold buildings 30 years Leasehold land and buildings 30 years or life of lease if less than 30 years Profit or loss on sale of investments is recognised on completion of sale. Plant and equipment 3–20 years Furniture and fittings 5–10 years (j) Investment Properties Motor vehicles 3–5 years Investment properties are held for the primary purpose of producing rental income and are not held for resale in the ordinary course of business. (iii) No depreciation is charged on freehold land and land held on 999–year lease or in respect of major capital work-in-progress until commissioned. Investment properties are stated at cost less impairment losses. Where an indication of impairment exists, the carrying amount of the investment property is assessed and written down to its recoverable amount. The impairment (iv) It is not the Group’s policy to revalue property, plant and equipment at regular intervals. loss is charged to the income statement.

(v) The carrying amounts of the Group’s assets are reviewed at each balance sheet date to determine whether Cost of investment properties includes capitalisation of interest incurred on borrowings for the purchase, renovation there is any indication of impairment. If such indication exists, the asset’s recoverable amount is estimated. and extension of the investment properties while these activities are in progress. For this purpose, the interest An impairment loss is recognised whenever the carrying amount of the asset exceeds its recoverable rates applied to funds provided for the development are based on the actual interest rates payable on the amount. The impairment loss is charged to the income statements. borrowings for such development.

(g) Subsidiaries Interests in subsidiaries are included in the financial statements at cost less impairment losses. Where an indication of impairment exists, the carrying amount of the investment is assessed and written down to its recoverable amount. The impairment loss is charged to the income statement.

(h) Associates These are companies (not being subsidiaries) in which the Group has a substantial interest of not less than 20% of the equity and/or in whose financial and operating policy decisions the Group exercises significant influence. 72 GROWTH WITH SYNERGY Singapore Press Holdings | Annual Report 2003 | Audited Financial Statements 73

NOTES TO THE FINANCIAL STATEMENTS (cont’d) August 31, 2003

2. Significant Accounting Policies (cont’d) (l) Prepaid Content Rights (k) Stocks Advanced payments made for content rights for which the license period has not commenced, or the materials Stocks comprise raw materials and consumable stores, acquired content rights and production cost of programmes. have not been received, are classified as prepaid content rights. Provisions are made where it is unlikely that content rights acquired under such payments would be used during its license period. Such provision is charged (i) Raw materials and consumable stores to the income statement. These are stated at cost less provision for obsolete, slow moving and defective stocks. (m)Debtors Cost includes transport and handling costs, and any other directly attributable costs. Cost is determined on Bad debts are written off and specific provision is made for those debts considered to be doubtful. In addition, a the weighted average or specific identification basis. general provision is made on the balance of trade debtors to cover any unexpected losses which have not been specifically identified. (ii) Acquired content rights Prepaid content rights are reported as acquired content rights when the license period commences and (n) Dividends materials have been received. Dividends on the Company’s shares are recognised in equity in the period in which they are declared.

The cost of acquired content rights is the gross amount paid for such rights. (o) Employee Benefits (i) Short-term employee benefits (iii) Production cost of programmes All short-term employee benefits, including accumulated compensated absences, are recognised in the Production cost includes costs incurred on own production, commissioned works and co-produced programmes. income statement in the period in which the employees render their services to the Company.

Cost of own production comprises direct labour, material cost and allocated overheads capitalised based on (ii) Equity compensation benefits the normal level of activity during the term of production. The stock option programme allows selected employees of the Company and/or its subsidiaries, including Executive Directors of the Company and other selected participants, to subscribe for ordinary shares in the Commissioned works are stated at cost. Company. No compensation cost or obligation is recognised. When the options are exercised, the proceeds received are credited to share capital (nominal value) and share premium. Co-produced programmes are stated at cost less billings to co-producers. (p) Provisions Acquired content rights and production cost of programmes are expensed to the income statement based on the Provisions are recognised when the Group has a present legal or constructive obligation as a result of past estimated number of showings and the ratio that the current year’s revenue bears to the anticipated total gross events, it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate revenue from the exploitation of the films. of the amount can be made.

Acquired content rights and production cost of programmes are valued at the lower of unamortised cost and estimated (q) Foreign Currencies net realisable value. The carrying amounts of each title in stock are reviewed at each balance sheet date. Provisions Monetary assets and liabilities expressed in foreign currencies are converted to Singapore dollars at the rates of are made where the unamortised cost of each title exceeds the estimated realisable value. Such provision is charged exchange closely approximating to those ruling at the balance sheet date. Transactions during the year are to the income statement. converted to Singapore dollars at rates of exchange ruling on the transaction dates. Differences in exchange are included in the income statements. 74 GROWTH WITH SYNERGY Singapore Press Holdings | Annual Report 2003 | Audited Financial Statements 75

NOTES TO THE FINANCIAL STATEMENTS (cont’d) August 31, 2003

2. Significant Accounting Policies (cont’d) (s) Financial Risk Management (cont’d) (r) Revenue Recognition (iv) Liquidity risk Revenue from the sale of the Group’s products and services after accounting for trade discounts, returns and In the management of liquidity risk, the Group monitors and maintains a level of cash and cash equivalents goods and services tax is recognised on completion of delivery. to finance the Group’s operations and mitigate the effects of fluctuation in cash flows.

Revenue from advertisements is recognised when the advertisement is published or broadcast. (v) Credit risk The Group manages its credit risk through the application of credit approvals, credit limits and monitoring Revenue from rental and rental-related services is recognised on an accrual basis. procedures. Where appropriate, the Group obtains collateral in the form of bankers’/insurance guarantees from its customers, and imposes cash terms and/or advance payments from customers of lower credit standing. The policies relating to the recognition of revenue from investments are set out in Note 2(i) above. As at the balance sheet date, the Group has no significant concentration of credit risks. (s) Financial Risk Management The Group’s activities expose it to a variety of financial risks, particularly interest rate, currency, market, liquidity and credit risks. The Group’s risk management policies seek to, where appropriate, minimise potential adverse 3. Share Capital effects on the financial performance of the Group. The policies for managing these risks are summarised below. 2003 2002 Number Number (i) Interest rate risk of Shares of Shares The Group has cash balances placed with reputable banks and financial institutions and investments in ‘000 S$’000 ‘000 S$’000 bonds and government-related securities, which generate interest income for the Group. The Group manages its interest rate risks by placing such balances on varying maturities and interest rate terms. Authorised Management shares of S$1 each 10,000 10,000 10,000 10,000 The Group’s debt consists of bank borrowings taken up by certain subsidiaries to finance their respective Ordinary shares of S$1 each 990,000 990,000 990,000 990,000 operations. Where appropriate, the Group seeks to minimise its interest rate risk exposure by entering into 1,000,000 1,000,000 1,000,000 1,000,000 interest rate swaps over the duration of its borrowings. Issued and fully paid (ii) Currency risk Management shares of S$1 each 3,740 3,740 3,731 3,731 The currency risk of the Group arises mainly from its operational purchases of raw materials and consumable Ordinary shares of S$1 each 365,817 365,817 365,966 365,966 stores, capital expenditure and acquired content rights. The currency risk of the Group also arises from its 369,557 369,557 369,697 369,697 foreign currency cash deposits, bonds and equity investments, and from costs incurred by its overseas news bureaus.

Where appropriate, the Group hedges against its currency risk resulting from anticipated sale and purchase transactions in foreign currencies.

(iii) Market risk The Group has investments in various financial instruments (including equities, fixed income and other derivative instruments) and funds under management. The market values of these investments are affected by, amongst others, changes in market prices as a result of changes in global economic conditions, macro and micro economic factors affecting the country where the investments are quoted, and factors specific to the investee corporations.

The fluctuations in market prices due to the above factors are unforeseen and the Group monitors these changes to respond to them as and when appropriate and necessary. 76 GROWTH WITH SYNERGY Singapore Press Holdings | Annual Report 2003 | Audited Financial Statements 77

NOTES TO THE FINANCIAL STATEMENTS (cont’d) August 31, 2003

3. Share Capital (cont’d) 4. Capital Reserve

2003 2002 Group S$’000 S$’000 2003 2002 Movements during the financial year were: S$’000 S$’000 Opening balance 369,697 369,644 Cancellation of ordinary shares of S$1 each under the share Capital reserve is made up as follows: buy back mandate approved by shareholders (Note 27) (1,050) (1,191) Distributable 1,375 1,375 Issue of ordinary shares of S$1 each fully paid under the Non-Distributable 630 630 Singapore Press Holdings Group Executives’ 2,005 2,005 Share Option Scheme 901 1,232 Issue of management shares of S$1 each fully paid in accordance with the Newspaper and Printing Presses Act 9 12 5. Taxation Closing balance 369,557 369,697 (a) Deferred Taxation The movements in the Group’s deferred tax assets and liabilities (prior to offsetting of balances within the same tax jurisdiction) during the year are as follows: Details of the unissued shares of the Company under option at the end of the financial year are as follows: 2003 Group Singapore Press Holdings Group Executives’ Share Option Scheme (“1990 Scheme”) (i) Deferred Tax Liabilities Accelerated Revaluation Date of Expiry Exercise Balance Options Options Balance Tax Depreciation Surplus Others Total Grant Date Price (a) 1.9.02 Exercised Cancelled 31.8.03 S$’000 S$’000 S$’000 S$’000

Nov 19, 1997 Nov 19, 2002 S$12.76 232,278 (232,269) (9) – Opening balance 93,545 2,202 741 96,488 Nov 17, 1998 Nov 17, 2003 S$14.51 1,323,875 (668,696) – 655,179 Credited to income statement (1,177) – (67) (1,244) 1,556,153 (900,965) (9) 655,179 Closing balance 92,368 2,202 674 95,244

(a) Exercise prices were adjusted as a result of bonus shares issued during the financial year 1998 and the capital reduction exercises during the financial years 1999 and 2002. (ii) Deferred Tax Assets

Singapore Press Holdings Group (1999) Share Option Scheme (“1999 Scheme”) Provisions S$’000 Date of Expiry Exercise Balance Options Options Balance Grant Date (a) Price (b) 1.9.02 (c) Exercised Cancelled 31.8.03 Opening balance (13,201) Charged to income statement 3,156 Oct 27, 1999 Oct 27, 2009 S$28.02 2,861,700 – (213,600) 2,648,100 Closing balance (10,045) Oct 30, 2000 Oct 30, 2010 S$23.88 3,092,500 – (41,200) 3,051,300 Nov 6, 2001 Nov 6, 2011 S$15.71 3,211,900 – (34,000) 3,177,900 Oct 28, 2002 Oct 28, 2012 S$19.54 3,251,600 – (28,900) 3,222,700 12,417,700 – (317,700) 12,100,000

(a) The expiry of the exercise date in the case of options granted to an Associate shall be on the fifth anniversary of such date of grant. (b) Exercise prices were adjusted as a result of the capital reduction exercise during the financial year 2002. (c) Or later date of grant. 78 GROWTH WITH SYNERGY Singapore Press Holdings | Annual Report 2003 | Audited Financial Statements 79

NOTES TO THE FINANCIAL STATEMENTS (cont’d) August 31, 2003

5. Taxation (cont’d) 2002 (a) Deferred Taxation (cont’d) Company 2002 (i) Deferred Tax Liabilities Group Accelerated (i) Deferred Tax Liabilities Tax Accelerated Revaluation Depreciation Tax Depreciation Surplus Others Total S$’000 S$’000 S$’000 S$’000 S$’000 Opening balance 77,394 Opening balance 89,407 2,202 1,011 92,620 Charged to income statement 11,217 Charged/(credited) to income Write-back of provision in prior years due to change in tax rate (7,898) statement 12,846 – (172) 12,674 Closing balance 80,713 Write-back of provision in prior years due to change in tax rate (8,698) – (98) (8,796) (ii) Deferred Tax Assets Other adjustments (10) – – (10) Provisions Closing balance 93,545 2,202 741 96,488 S$’000

(ii) Deferred Tax Assets Opening balance (19,366) Provisions Charged to income statement 4,253 S$’000 Write-off of provision in prior years due to change in tax rate 1,975 Closing balance (13,138) Opening balance (19,394) Charged to income statement 4,218 Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets Write-off of provision in prior against current tax liabilities and when the deferred income taxes relate to the same fiscal authority. The following years due to change in tax rate 1,975 amounts, determined after appropriate offsetting, are shown in the balance sheets: Closing balance (13,201) Group Company 2003 2003 2002 2003 2002 Company S$’000 S$’000 S$’000 S$’000 (i) Deferred Tax Liabilities Accelerated Deferred tax liabilities 85,199 83,287 69,539 67,575 Tax Depreciation As at August 31, 2003, certain subsidiaries had unutilised tax losses of S$48.3 million (2002: S$51.6 million) available S$’000 for offsetting against future taxable income subject to the relevant provisions of the Income Tax Act, Chapter 134 (“Income Tax Act”). Opening balance 80,713 Credited to income statement (1,410) Closing balance 79,303

(ii) Deferred Tax Assets Provisions S$’000

Opening balance (13,138) Charged to income statement 3,374 Closing balance (9,764) 80 GROWTH WITH SYNERGY Singapore Press Holdings | Annual Report 2003 | Audited Financial Statements 81

NOTES TO THE FINANCIAL STATEMENTS (cont’d) August 31, 2003

5. Taxation (cont’d) (c) Tax Expense (cont’d) (b) Current Taxation The income tax expense on the results for the financial year varies from the amount of income tax determined by applying the Singapore standard rate of income tax to profit before taxation due to the following factors: Group Company 2003 2002 2003 2002 Group Company S$’000 S$’000 S$’000 S$’000 2003 2002 2003 2002 S$’000 S$’000 S$’000 S$’000 Opening balance 51,204 92,820 42,201 73,192 Income tax paid (40,349) (81,821) (36,605) (69,128) Profit before taxation 438,904 357,474 530,233 422,229 Tax deducted at source on dividends Less: Share of profits less losses of associates (10,990) (31,021) – – received from subsidiaries – – (3,000) (52,936) Adjusted profit before taxation 427,914 326,453 530,233 422,229 Provision for the year 56,538 40,899 58,065 102,914 Group relief in accordance with Tax calculated at corporate tax rate of 22% with Section 37C of the Income (2002: 22%) 94,141 71,820 116,651 92,890 Tax Act – – (6,778) (10,916) Singapore statutory stepped income exemption (134) (126) (12) (12) Under/(over) provision in prior years 1,319 (667) – (925) Effect of change in tax rate – (697) – – Other adjustments – (27) – – Income taxed at concessionary rate (1,963) (2,078) – – Closing balance 68,712 51,204 53,883 42,201 Utilisation of previously unrecognised tax losses (28) (487) – – Utilisation of previously unrecognised capital allowances (1,317) (3,476) – – (c) Tax Expense Utilisation of deferred tax assets Group Company not previously recognised (3,330) (2,763) – – 2003 2002 2003 2002 Income not subject to tax (43,729) (24,094) (52,079) (708) S$’000 S$’000 S$’000 S$’000 Expenses not deductible for tax purposes 17,584 17,868 131 26,082 Losses of subsidiaries not offset Tax expense attributable to profit against taxable income of other entities 777 1,505 – – is made up of: Deferred tax benefit not recognised 1,711 – – – Current year Double tax relief for contributions Current tax 56,538 40,899 58,065 102,914 made to Institutes of Public Character (4,478) (111) (4,478) (111) Deferred tax 2,617 16,892 1,964 15,470 Effect of different tax rates in other countries 105 182 – – 59,155 57,791 60,029 118,384 Others (184) 248 (184) 243 Prior years 59,155 57,791 60,029 118,384 Current tax 1,319 (667) – (925) Deferred tax (705) (6,821) – (5,923) 59,769 50,303 60,029 111,536 6. Borrowings Group 2003 2002 S$’000 S$’000

Transferable term loans [Note a] 700,000 700,000 Revolving credit facility [Note a] 4,400 – Term advances – unsecured [Note b] 70,000 70,000 Revolving credit facilities – unsecured [Note b] 18,500 25,000 792,900 795,000 Borrowings are repayable: Within 1 year 52,900 25,000 Between 1 – 5 years 740,000 770,000 792,900 795,000 82 GROWTH WITH SYNERGY Singapore Press Holdings | Annual Report 2003 | Audited Financial Statements 83

NOTES TO THE FINANCIAL STATEMENTS (cont’d) August 31, 2003

6. Borrowings (cont’d) (d) The fair values of the transferable term loans, term advances and revolving credit facilities as at the balance (a) A subsidiary has bank loan facilities amounting to S$714 million (2002: S$760 million), comprising a S$700 sheet date approximate their carrying values as these loans carry floating interest rates, which are repriced million (2002: S$700 million) transferable loan facility (“TLF”) and a S$14 million (2002: S$60 million) revolving frequently. credit facility (“RCF”). During the financial year, S$4.4 million (2002: Nil) was drawn under the RCF. These facilities are secured by way of a legal mortgage on the Group’s investment property [Note 8], an assignment of rental proceeds from the investment property and the insurances on the investment property, and an undertaking by 7. Property, Plant and Equipment the Company to pay all interests payable in respect of the facilities if the subsidiary fails to pay the same. (a) Group Plant Furniture After taking into account interest rate swap arrangements totalling S$645 million (2002: S$645 million) entered into by Land and Buildings and and Motor the subsidiary, the effective interest rate as at the balance sheet date on the TLF of S$700 million is 3.18% per annum Freehold Leasehold Equipment Fittings Vehicles Total (2002: S$700 million, 3.20% per annum). The loans granted under the TLF are repayable no later than January 31, 2007. S$’000 S$’000 S$’000 S$’000 S$’000 S$’000 Cost The effective interest rate as at the balance sheet date on the loan granted under the RCF is 1.04% per annum. Opening balance 46,694 236,312 617,048 16,173 2,315 918,542 Additions – 9 3,347 468 598 4,422 (b) Another subsidiary has obtained unsecured bank loan facilities from certain banks amounting to S$95 million Reclassification adjustments – (3,208) 3,259 (51) – – (2002: S$95 million) comprising S$70 million (2002: S$70 million) term advances and S$25 million (2002: S$25 Transfer in from capital million) revolving credit facilities. work-in-progress – – 1,868 2,508 – 4,376 Disposals – – (8,779) (825) (490) (10,094) After taking into account interest rate swap arrangements totalling S$22.5 million (2002: S$22.5 million), the Closing balance 46,694 233,113 616,743 18,273 2,423 917,246 effective interest rate as at the balance sheet date on the term advances of S$70 million is 2.04% per annum (2002: S$70 million, 3.09% per annum). Of the S$70 million term advances, S$30 million is repayable on July 27, Accumulated Depreciation 2004 and the balance of S$40 million is repayable on December 17, 2004. Opening balance 17,238 57,434 311,218 6,594 1,826 394,310 Charge for the year 212 8,373 43,325 1,488 254 53,652 The effective interest rate as at the balance sheet date on the loans granted under the revolving credit facilities Reclassification adjustments – (401) 417 (16) – – is 1.26% (2002: 1.65%) per annum. Impairment losses – 8,006 – – – 8,006 Disposals – – (8,391) (634) (482) (9,507) (c) In respect of bank borrowings, the Group’s policy is to, where appropriate, minimise its interest rate risk exposure Closing balance 17,450 73,412 346,569 7,432 1,598 446,461 by entering into interest rate swaps over the duration of its borrowings. Accordingly, the subsidiaries have entered into interest rate swap contracts as part of their interest rate risk management. Under the interest rate Net book value at swaps, the subsidiaries agree with other parties to exchange at specified intervals, the difference between fixed August 31, 2003 29,244 159,701 270,174 10,841 825 470,785 rate and floating rate interest amounts calculated by reference to the agreed notional principal amounts. At Capital work-in-progress – – 163,071 – – 163,071 August 31, 2003, the fixed interest rates vary from 2.55% to 3.44% (2002: 2.55% to 3.44%) per annum and floating Closing balance 29,244 159,701 433,245 10,841 825 633,856 rates are referenced to SIBOR or Singapore dollar swap offer rates, where applicable. Capital work-in-progress The notional principal amounts of the outstanding interest rate swap contracts and their corresponding fair Opening balance 984 – 144,970 – – 145,954 values as at August 31 are: Additions 85 – 19,969 2,508 – 22,562 Group Transfer out to fixed assets – – (1,868) (2,508) – (4,376) 2003 2002 Amounts written off to S$’000 S$’000 income statement (1,069) – – – – (1,069) Notional due: Closing balance – – 163,071 – – 163,071 Within 1 year 22,500 – Between 1 – 5 years 645,000 667,500 2002 Comparatives Fair values * (19,869) (20,595) Net book value at August 31, 2002 29,456 178,878 305,830 9,579 489 524,232 * The fair values of interest rate swap contracts have been calculated (using rates quoted by the Group’s bankers) assuming these Capital work-in-progress 984 – 144,970 – – 145,954 contracts are terminated at the balance sheet date. These are not recognised in the consolidated financial statements as at the Closing balance 30,440 178,878 450,800 9,579 489 670,186 balance sheet date. Depreciation for 2002 430 7,921 42,518 1,196 261 52,326 84 GROWTH WITH SYNERGY Singapore Press Holdings | Annual Report 2003 | Audited Financial Statements 85

NOTES TO THE FINANCIAL STATEMENTS (cont’d) August 31, 2003

7. Property, Plant and Equipment (cont’d) 8. Investment Property (b) Details of the investment property are as follows: Company Group Plant Furniture Freehold Land and Building and and Motor 2003 2002 Equipment Fittings Vehicles Total S$’000 S$’000 S$’000 S$’000 S$’000 S$’000 Cost Cost 923,827 923,827 Opening balance 503,418 10,576 2,053 516,047 Development expenditure at cost 167,526 137,310 Additions 1,803 164 598 2,565 Loan interest capitalised 18,935 18,935 Transfer in from capital 1,110,288 1,080,072 work-in-progress 1,624 2,508 – 4,132 Impairment losses (70,534) (20,534) Transfer in 528 – – 528 1,039,754 1,059,538 Transfer out (33) – – (33) Disposals (8,332) (363) (401) (9,096) Rental income 42,217 41,720 Closing balance 499,008 12,885 2,250 514,143 Fair value 1,050,000 1,140,000

Accumulated Depreciation Fair value of the investment property, the amalgamated Paragon on Orchard Road, was stated at Directors’ valuation Opening balance 280,453 3,671 1,708 285,832 based on an independent professional valuation, determined on an open market value basis, carried out by Knight Charge for the year 32,960 1,014 216 34,190 Frank Pte Ltd on February 28, 2003 (2002: December 20, 2001) on the basis that the construction work to build and Transfer in 188 – – 188 merge the new building with Paragon would be satisfactorily completed and the Temporary Occupation Permit and Transfer out (27) – – (27) Certificate of Statutory Completion would be obtained. The investment property is mortgaged to a bank as security Disposals (8,004) (260) (401) (8,665) for loan facilities granted to a subsidiary. Closing balance 305,570 4,425 1,523 311,518

Net book value at 9. Interests in Subsidiaries August 31, 2003 193,438 8,460 727 202,625 (a) Unquoted equities Capital work-in-progress 163,046 – – 163,046 Company Closing balance 356,484 8,460 727 365,671 2003 2002 S$’000 S$’000 Capital work-in-progress Opening balance 144,847 – – 144,847 Unquoted equities, at cost 476,083 474,843 Additions 19,943 2,508 – 22,451 Amounts owing by subsidiaries (non-trade) [Note (c)] 1,378,626 1,244,293 Transfer out to fixed assets (1,624) (2,508) – (4,132) Loan to a subsidiary [Note (c)] 40,000 15,000 Transfer out (120) – – (120) 1,894,709 1,734,136 Closing balance 163,046 – – 163,046 Amounts owing to subsidiaries (non-trade) [Note (c)] (67,155) (64,313) 1,827,554 1,669,823 2002 Comparatives Net book value at Details of subsidiaries are set out in Note 30. August 31, 2002 222,965 6,905 345 230,215 Capital work-in-progress 144,847 – – 144,847 Closing balance 367,812 6,905 345 375,062

Depreciation for 2002 31,749 596 208 32,553 86 GROWTH WITH SYNERGY Singapore Press Holdings | Annual Report 2003 | Audited Financial Statements 87

NOTES TO THE FINANCIAL STATEMENTS (cont’d) August 31, 2003

9. Interests in Subsidiaries (cont’d) 11. Long-Term Investments

(b) Goodwill arising on acquisition of subsidiaries Group Company 2003 2002 2003 2002 Group S$’000 S$’000 S$’000 S$’000 2003 2002 Quoted, at cost S$’000 S$’000 Equities 92,855 51,658 – – Bonds 48,000 150,947 – – Opening balance – – Goodwill on acquisition during the year 1,240 30,898 Unquoted, at cost Amounts written off during the year (Note 26) (1,240) (30,898) Equities 78,363 85,797 35,577 35,577 Closing balance – – Other investments 60,318 67,605 425 425 279,536 356,007 36,002 36,002 (c) The amounts owing by/to subsidiaries and the loan to a subsidiary are unsecured, interest free and have no fixed repayment terms. However, repayments are not expected within the next twelve months. Accordingly, it Accretion of discount on bonds – 16 – – is not practicable to determine the fair value of these balances. However, the Company does not anticipate the Amortisation of premium on bonds – (52) – – carrying amounts at the balance sheet date to be significantly different from the values that would eventually Provision for diminution in value be settled. of investments – Quoted – (2,050) – – – Unquoted (10,312) (13,025) – – 269,224 340,896 36,002 36,002 10. Interests in Associates (a) Unquoted equities Movements in provision Opening balance 15,075 16,683 – – Group Company Provision for the year – Unquoted 208 4,708 – – 2003 2002 2003 2002 Utilisation of provision (2,921) (8,366) – – S$’000 S$’000 S$’000 S$’000 Transfer (to)/from short-term investments (2,050) 2,050 – – Unquoted equities, at cost 44,837 93,537 2,980 2,980 Closing balance 10,312 15,075 – – Amounts owing by associates (non-trade) [Note (b)] 4 13 – – Market value of quoted investments Loans to associates [Note (b)] 650 300 – – Equities 268,930 67,907 – – 45,491 93,850 2,980 2,980 Bonds 51,432 158,091 – – Goodwill on consolidation written off (23,357) (23,357) – – 320,362 225,998 – – Share of net (losses)/profits (14,509) 75,582 – – Exchange translation difference – 219 – – Impairment losses (7,439) – (2,980) (2,980) 12. Other Non-Current Assets 186 146,294 – – Group Company 2003 2002 2003 2002 Details of associates are set out in Note 31. S$’000 S$’000 S$’000 S$’000

(b) The amounts owing by associates and loans to associates are unsecured, interest free and have no fixed repayment Staff loans 4,916 5,010 4,781 4,963 terms. However, repayments are not expected within the next twelve months. Accordingly, it is not practicable Long-term debtors – 266 – – to determine the fair value of these balances. However, the Group does not anticipate the carrying amounts at 4,916 5,276 4,781 4,963 the balance sheet date to be significantly different from the values that would eventually be settled. 88 GROWTH WITH SYNERGY Singapore Press Holdings | Annual Report 2003 | Audited Financial Statements 89

NOTES TO THE FINANCIAL STATEMENTS (cont’d) August 31, 2003

13. Stocks 16. Other Debtors and Prepayments

Group Company Group Company 2003 2002 2003 2002 2003 2002 2003 2002 S$’000 S$’000 S$’000 S$’000 S$’000 S$’000 S$’000 S$’000

Raw materials and consumable stores 38,895 32,633 38,278 32,055 Accrued interest 6,180 7,694 23 90 Acquired content rights, at unamortised cost 16,519 10,509 – – Sundry debtors 3,781 2,497 1,596 791 Production cost of programmes, at unamortised cost 7,925 7,340 – – Prepayments 2,426 2,011 1,212 698 Provision for stocks (8,576) (3,437) (1,010) (1,010) Staff loans 1,794 1,945 1,715 1,854 54,763 47,045 37,268 31,045 14,181 14,147 4,546 3,433 Made up as follows: At cost 20,636 26,987 7,670 12,443 At net realisable value 34,127 20,058 29,598 18,602 17. Short-Term Investments 54,763 47,045 37,268 31,045 (a) Internally managed Group Company Movements in provision 2003 2002 2003 2002 Opening balance 3,437 2,110 1,010 2,110 S$’000 S$’000 S$’000 S$’000 Provision/(write-back) for the year 5,139 1,327 – (1,100) Closing balance 8,576 3,437 1,010 1,010 Quoted Equities, at cost 102,198 53,844 – – 14. Prepaid Content Rights Bonds, at cost 613,734 405,326 – –

Group Accretion of discount on bonds 3,090 3,370 – – 2003 2002 Amortisation of premium on bonds (1,363) (287) – – S$’000 S$’000 Unquoted Prepaid content rights – at cost 23,694 14,361 Equities, at cost 3,480 3,480 – – Provision for prepaid content rights (1,467) (86) 721,139 465,733 – – 22,227 14,275 Provision for diminution in value of investments – Quoted (57,323) (42,424) – – Movements in provision 663,816 423,309 – – Opening balance 86 – Provision for the year 1,381 86 Movements in provision Closing balance 1,467 86 Opening balance 42,424 50,012 – – Provision for the year 18,344 12,633 – – Utilisation of provision (5,495) (19,653) – – 15. Trade Debtors Transfer from/(to) long–term Group Company investments 2,050 (2,050) – – 2003 2002 2003 2002 Transfer from funds under S$’000 S$’000 S$’000 S$’000 management – 1,482 – – Closing balance 57,323 42,424 – – Amount owing 104,942 113,507 95,120 101,542 Provision for doubtful debts (19,590) (21,023) (18,190) (19,700) 85,352 92,484 76,930 81,842

Movements in provision Opening balance 21,023 19,130 19,700 18,083 Provision for the year 2,118 5,848 1,531 5,345 Bad debts written off (3,551) (3,955) (3,041) (3,728) Closing balance 19,590 21,023 18,190 19,700 90 GROWTH WITH SYNERGY Singapore Press Holdings | Annual Report 2003 | Audited Financial Statements 91

NOTES TO THE FINANCIAL STATEMENTS (cont’d) August 31, 2003

17. Short-Term Investments (cont’d) 19. Capital and Other Commitments

(b) Funds under management Group Company Group Company 2003 2002 2003 2002 2003 2002 2003 2002 S$’000 S$’000 S$’000 S$’000 S$’000 S$’000 S$’000 S$’000 Commitments for: Quoted investments, at cost (a) Capital expenditure: Equities 85,580 – – – Authorised and contracted for 29,271 79,063 22,212 37,763 Bonds 148,870 153,227 – – Authorised but not contracted for 26,206 30,064 26,152 30,064 234,450 153,227 – – Provision for diminution in (b) Equity investments 14,101 14,685 – – value of quoted investments (1,746) (1,723) – – 232,704 151,504 – – (c) Operating leases due: Bank balances 18,520 3,202 – – Within 1 year 3,067 5,137 – – Accrued income 970 818 – – Between 1 – 5 years 5,864 8,189 – – Due to brokers (400) (3,833) – – After 5 years 44,559 47,979 – – 251,794 151,691 – – Movements in provision (d) Foreign currency forward contracts Opening balance 1,723 9,632 – 8,998 Notional due: Provision for the year 1,823 1,670 – 222 Within 1 year 18,560 45,336 4,577 5,866 Utilisation of provision (1,800) (8,097) – (7,738) Positive fair value 68 825 40 825 Transfer to internally managed Negative fair value – (120) – – short-term investments of the Group – (1,482) – (1,482) Closing balance 1,746 1,723 – – (e) Cross currency swap contracts Notional due: Total Short-Term Investments 915,610 575,000 – – After 5 years 18,400 36,800 – – Negative fair value (157) (46) – – Total market/fair value of investments Quoted – Equities 194,894 23,104 – – The fair values of foreign currency forward and cross currency swap contracts have been calculated (using rates Bonds 737,510 564,474 – – quoted by the Group’s bankers) assuming these contracts are terminated at the balance sheet date. 932,404 587,578 – –

Unquoted – Equities 3,564 4,110 – – 20. Contingent Liability (Unsecured) As at August 31, 2003, the Company provided an indemnity to a financial institution for performance guarantees Observable market prices are used as the measure of fair values of unquoted investments. issued on behalf of a subsidiary to enable the subsidiary to meet its obligations in the ordinary course of business. The performance guarantees comprised US$1 million (S$1.75 million) maturing on March 31, 2004, US$4 million (S$7 million) for period commencing April 1, 2004 to March 31, 2005, US$4 million (S$7 million) for period 18. Other Creditors and Accrued Liabilities commencing April 1, 2005 to March 31, 2006 and US$4 million (S$7 million) for period commencing April 1, 2006 to Group Company March 31, 2007 (2002: Nil). 2003 2002 2003 2002 S$’000 S$’000 S$’000 S$’000

Accrued operating expenses 91,213 100,570 69,160 77,954 Sundry creditors 18,355 16,914 7,844 25,379 Customers’ deposits and credits 4,024 3,921 3,897 3,795 Amounts due to brokers 949 – – – 114,541 121,405 80,901 107,128 92 GROWTH WITH SYNERGY Singapore Press Holdings | Annual Report 2003 | Audited Financial Statements 93

NOTES TO THE FINANCIAL STATEMENTS (cont’d) August 31, 2003

21. Operating Revenue 23. Profit from Operations

Group Company Group Company 2003 2002 2003 2002 2003 2002 2003 2002 S$’000 S$’000 S$’000 S$’000 S$’000 S$’000 S$’000 S$’000

Newspapers and Magazines Profit from operations is arrived at: Advertisements 595,370 612,683 580,808 599,000 After charging Circulation 180,336 181,384 173,482 175,217 Audit fees: Others 13,676 14,210 17,075 17,536 Company’s auditors: 789,382 808,277 771,365 791,753 Current year 299 289 161 136 Prior year – 7 – – Broadcasting and Multimedia Other auditors: Advertisements 43,131 29,870 1,567 940 Current year 23 44 – – Broadcasting and multimedia services 12,603 11,516 4,753 3,206 Prior year (1) – – – 55,734 41,386 6,320 4,146 Non-audit fees #: Property Company’s auditors Rental and rental-related services 52,700 53,862 – – Current year 36 272 33 225 897,816 903,525 777,685 795,899 Prior year (22) – – – Less: Amount included in exceptional items – (25) – (25) 22. Staff Costs 14 247 33 200 Group Company Directors’ remuneration: 2003 2002 2003 2002 Company’s Directors 2,216 3,500 2,216 3,494 S$’000 S$’000 S$’000 S$’000 Directors of subsidiaries 1,590 896 – – Net loss on disposal of fixed assets 403 5,238 330 3,924 (a) Staff costs (including Executive Directors): Provision for stocks (Note 13) 5,139 1,327 – – Salaries, bonuses and other costs 214,517 217,349 181,390 181,299 Provision for prepaid content rights (Note 14) 1,381 86 – – Employers’ contribution to defined Provision for doubtful trade debts (Note 15) 2,118 5,848 1,531 5,345 contribution plans 26,241 28,333 22,088 23,048 Rental expense 2,657 3,677 38,556 35,695 240,758 245,682 203,478 204,347 and after crediting (b) Average number of employees 3,715 4,010 3,118 3,324 Write-back of provision for stocks (Note 13) – – – 1,100 Bad trade debts recovered 202 321 201 320 Exchange gain 639 2,185 170 1,847 Interest income: Others 241 475 53 91

# Non-audit fees are mainly for services of an audit and/or review nature relating to non-statutory audit assignments and for tax compliance services. 94 GROWTH WITH SYNERGY Singapore Press Holdings | Annual Report 2003 | Audited Financial Statements 95

NOTES TO THE FINANCIAL STATEMENTS (cont’d) August 31, 2003

24. Finance Costs 26. Exceptional Items

Group Group Company 2003 2002 2003 2002 2003 2002 S$’000 S$’000 S$’000 S$’000 S$’000 S$’000

Interest on bank loans 24,326 28,687 Surplus on partial disposal of interests in an associate 187,720 – – – Surplus on completion of liquidation of: 25. Net Income from Investments – Subsidiaries 1,748 – – – Group Company – An associate 46 – – – 2003 2002 2003 2002 Impairment loss on investment property (50,000) – – – S$’000 S$’000 S$’000 S$’000 Impairment loss on property, plant and equipment (8,006) (27,068) – (24,264) Impairment loss on associates (7,439) – – – Deposits interest 3,636 6,007 1,244 4,653 Goodwill on consolidation written off in Interest from bonds 22,809 24,998 – – respect of acquisition of interests Dividend from equities 10,126 2,843 – – in subsidiaries (Note 9) (1,240) (30,898) – – Foreign exchange (loss)/gain (776) 2,436 – – Capital work-in-progress written off (1,069) – – – Profit on sale of investments: Realisation of capital reserves upon Short-term investments 13,493 6,583 – – privatisation of a subsidiary – 67,839 – – Long-term investments 132 2,126 – – Surplus/(loss) on disposal of an associate – 31,613 – (117,937) Other investment income 1,643 – – – Surplus on sale of property – 2,478 – – 51,063 44,993 1,244 4,653 Net book value of property, plant and Accretion of discount on bonds 57 468 – – equipment demolished – (4,361) – – Amortisation of premium on bonds (1,273) (385) – – Cost of investment property demolished – (37,400) – – Provision for diminution 121,760 2,203 – (142,201) in value of investments: Quoted (18,344) (12,633) – – Unquoted (208) (4,708) – – 27. Share Buy Back 31,295 27,735 1,244 4,653 Under the share buy back mandate approved by shareholders, the Company repurchased 1,050,000 (2002: Income from funds under management [Note 25(a)] 8,289 13,936 – 9,498 1,191,000) ordinary shares of S$1 each during the financial year at an average price of S$17.11 (2002: S$17.94) 39,584 41,671 1,244 14,151 per share, amounting to a total cost, including brokerage, of S$18.0 million (2002: S$21.4 million). The repurchase transactions were financed by internally generated funds. The amounts were adjusted against the Company’s share capital and retained profit accounts. (a) Income from funds under management Group Company 2003 2002 2003 2002 S$’000 S$’000 S$’000 S$’000

Interest on deposits and bonds 5,882 6,519 – 1,372 Profit on sale of investments 4,529 9,072 – 7,920 Dividend from quoted equities 879 334 – 334 Foreign exchange (loss)/gain (414) 188 – 285 Expenses and fees (764) (507) – (191) 10,112 15,606 – 9,720 Provision for diminution in value of quoted investments (1,823) (1,670) – (222) 8,289 13,936 – 9,498 96 GROWTH WITH SYNERGY Singapore Press Holdings | Annual Report 2003 | Audited Financial Statements 97

NOTES TO THE FINANCIAL STATEMENTS (cont’d) August 31, 2003

28. Dividends

Group and Company 30. Subsidiaries 2003 2002 Country of Effective S$’000 S$’000 Incorporation/ Class of % of Equity held Name of Subsidiary Principal Activities Operation Shares Cost of Investment by the Group Dividends paid: 2003 2002 2003 2002 – Final dividend of 50 cents per share less tax S$’000 S$’000 % % at 22% in respect of previous financial year (2002: 50 cents per share less tax at 24.5%) 144,327 139,470 Hipro Printing Pte Ltd Publishing newspapers Singapore Ord 360 360 80.00 80.00 – Special dividend of 30 cents per share less tax at 22% in respect of previous financial year Focus Publishing Ltd Publishing newspapers Singapore Mgt * * 99.96 99.96 (2002: Nil) 86,596 – and magazines Ord * * 100.00 100.00 – Interim dividend of 20 cents per share less tax at 22% (2002: 19.36 cents per share less tax at 22%) 57,654 55,821 # Singapore Press Provision of news Singapore Mgt * * 99.98 99.98 – Special interim dividend of 30 cents per share less tax Holdings (Overseas) reporting & marketing Ord * * 100.00 100.00 at 22% (2002: Nil) 86,481 – Limited services and holding 375,058 195,291 investments

(a) The Directors have proposed a special final dividend of 30 cents per share, less tax at 22%, amounting to a total # SPH (Americas) Provision of news Singapore Ord * * 100.00 100.00 of S$86,476,000 (2002: 30 cents per share, less tax at 22%, amounting to S$86,596,000). Pte Ltd reporting services

(b) In addition, the Directors have proposed a final dividend for 2003 of 50 cents per share, less tax at 22%, amounting SPH Magazines Pte Publishing magazines Singapore Ord * * 100.00 100.00 to a total of S$144,128,000 (2002: 50 cents per share, less tax at 22%, amounting to S$144,327,000). Ltd (formerly known as Times Periodicals (c) These financial statements do not reflect these proposed dividends, which will be accounted for in shareholders’ Private Limited) equity as an appropriation of retained earnings in the financial year ending August 31, 2004 (2002: August 31, 2003) when they are approved at the next annual general meeting. TP Ventures Pte Ltd Holding investments Singapore Ord * – 100.00 –

Lianhe Publishing Publishing magazines Singapore Ord * * 51.00 51.00 29. Earnings per Share Pte Ltd Group 2003 2002 @ SPH AsiaOne Ltd Provision of Internet- Singapore Ord 94,400 94,400 100.00 100.00 Basic Diluted Basic Diluted related services and S$’000 S$’000 S$’000 S$’000 holding investments

Profit attributable to shareholders 378,736 378,736 307,397 307,397 @ Zaobao.com Ltd Provision of Internet- Singapore Ord * * 100.00 100.00 related services Number of Shares Number of Shares ’000 ’000 @ Evol Media Pte Ltd Provision of Internet- Singapore Ord * – 100.00 – related services Weighted average number of shares 369,714 369,714 369,414 369,414 Adjustment for assumed conversion of share SPH MediaWorks Ltd Provision of Singapore Ord 90,000 88,760 100.00 98.62 options – 634 – 1,095 broadcasting and Weighted average number of shares broadband services used to compute earnings per share 369,714 370,348 369,414 370,509 SPH MultiMedia Holding investments Singapore Ord 8,500 8,500 100.00 100.00 Earnings per S$1 share (S$) 1.02 1.02 0.83 0.83 Private Limited Balance c/f 193,260 192,020 98 GROWTH WITH SYNERGY Singapore Press Holdings | Annual Report 2003 | Audited Financial Statements 99

NOTES TO THE FINANCIAL STATEMENTS (cont’d) August 31, 2003

30. Subsidiaries (cont’d) 30. Subsidiaries (cont’d)

Country of Effective Country of Effective Incorporation/ Class of % of Equity held Incorporation/ Class of % of Equity held Name of Subsidiary Principal Activities Operation Shares Cost of Investment by the Group Name of Subsidiary Principal Activities Operation Shares Cost of Investment by the Group 2003 2002 2003 2002 2003 2002 2003 2002 S$’000 S$’000 % % S$’000 S$’000 % % Balance b/f 193,260 192,020 Balance b/f 476,083 474,843 The Straits Times Holding investments Singapore Mgt 334 334 100.00 100.00 SPH Stop Press Pte Property development Singapore Ord * * 100.00 100.00 Press (1975) Limited Ord 33,072 33,072 100.00 100.00 Ltd

Lianhe Investments Holding investments Singapore Ord 6,335 6,335 100.00 100.00 Asia Century Dormant Singapore Ord * * 51.00 51.00 Pte. Ltd. for dealing purposes Publishing Pte Ltd

SPH Data Services Licensing of copyrights Singapore Ord * * 100.00 100.00 The Straits Times Dormant United Ord * * 100.00 100.00 Pte Ltd & trademarks Press (London) Limited Kingdom

Singapore Newspaper Holding investments Singapore Ord 50,000 50,000 100.00 100.00 + Orchard 300 Ltd Dormant Singapore Ord – * – 100.00 Services Private and properties Limited ++ SPH Asset Dormant Singapore Ord – * – 100.00 Management Limited Vinora Holdings Holding investments British Virgin Ord * * 100.00 100.00 Limited Islands ++ Mantown Dormant Hongkong Ord – * – 93.10 Enterprises Limited Futura Management Holding investments Cook Islands Ord * * 100.00 100.00 Limited ++ Solar River Dormant Hongkong Ord – * – 93.10 Investments Limited Crestville Investments Holding investments British Virgin Ord * * 100.00 100.00 Limited Islands ++ Video Post Limited Dormant Hongkong Ord – * – 93.10 476,083 474,843 Morningvista Holding investments British Virgin Ord * * 100.00 100.00 Investments Limited Islands Notes: 1. # Singapore Press Holdings (Overseas) Limited operates in Japan, Hongkong, Australia, Philippines, Thailand, China, Singapore News and Holding investments Singapore Mgt 1,153 1,153 100.00 100.00 Taiwan and Indonesia. Publications Limited and properties Ord 114,102 114,102 100.00 100.00 SPH (Americas) Pte Ltd operates in United States of America. 2. @ Companies audited by Ernst & Young, Singapore. Sin Chew Jit Poh Holding investments Singapore Mgt * * 100.00 100.00 3. * The shareholdings of these companies are held by subsidiaries of the Company. (Singapore) Limited and properties Ord * * 100.00 100.00 4. + This company has been placed under liquidation. 5. ++ The liquidation of these companies were completed during the financial year. Times Properties Letting properties and Singapore Ord 77,827 77,827 100.00 100.00 Private Limited provision of property management services

Orchard 290 Ltd Holding investments and Singapore Ord * * 100.00 100.00 managing of shopping centres & other commercial properties Balance c/f 476,083 474,843 100 GROWTH WITH SYNERGY Singapore Press Holdings | Annual Report 2003 | Audited Financial Statements 101

NOTES TO THE FINANCIAL STATEMENTS (cont’d) August 31, 2003

31. Associates 32. Segmental Information

Country of Effective 2003 Incorporation/ Class of % of Equity held Newspapers Broadcasting, Treasury Name of Associate Principal Activities Operation Shares Cost of Investment by the Group and Multimedia and and 2003 2002 2003 2002 Magazines Telecommunications Investment Property Eliminations Consolidated S$’000 S$’000 % % S$’000 S$’000 S$’000 S$’000 S$’000 S$’000

Held by the Company Operating revenue Business Day Publishing Thailand Ord 2,980 2,980 24.97 24.97 External sales 789,382 55,734 – 52,700 – 897,816 Company Limited newspapers Inter-segmental sales 2,914 21 – 2,544 (5,479) – Total operating revenue 792,296 55,755 – 55,244 (5,479) 897,816 Held by Subsidiaries American Bourses Development & Singapore Ord 6,375 6,375 20.00 20.00 Result Corporation Pte Ltd maintenance of Segment result 305,065 (53,057) 39,028 39,203 – 330,239 software & multi- Finance costs – (1,916) – (22,410) – (24,326) media works; Finance income 102 39 – 100 – 241 Business management Share of profits less losses & consultancy services of associates 86 10,904 – – – 10,990 Exceptional items Citta Bella Sdn Bhd Publishing and Malaysia Ord 248 248 24.99 24.99 – Surplus on partial disposal distributing of interests in an associate – 187,720 – – – 187,720 magazines – Impairment losses of assets (7,000) (7,439) – (51,006) – (65,445) StarEastWorks Limited Content Hongkong Ord 33,634 33,634 50.00 49.31 – Others – 540 14 (1,069) – (515) production Profit/(loss) before taxation 298,253 136,791 39,042 (35,182) – 438,904 Taxation (59,769) UnionWorks Pte Ltd Radio Singapore Ord 1,600 1,300 50.00 49.31 Profit after taxation 379,135 broadcaster Minority interests (399) Profit attributable to ^ MobileOne Ltd Providing Singapore Ord – 49,000 – 35.00 shareholders 378,736 (formerly known as telecommunication MobileOne (Asia) services Other Information Pte Ltd) Segment assets 737,067 86,974 1,462,487 1,081,531 – 3,368,059 Interests in associates 186 – – – – 186 + FantasticOne (Asia- Dormant Singapore Ord – – – 34.84 Consolidated total assets 3,368,245 Pacific) Pte Ltd 44,837 93,537 Segment liabilities 126,740 108,191 986 729,573 – 965,490 Current taxation 68,712 Notes: Deferred taxation 85,199 1. ^ The Group partially disposed of its interests in the company through the initial public offering of the company during the financial Minority interests 1,108 year. Thereafter, the remaining 14.16% stake is accounted as a long-term investment. Consolidated total liabilities 1,120,509 2. + The liquidation of the company was completed during the financial year. Capital expenditure 26,367 437 – 30,396 – 57,200 Depreciation 44,841 8,158 – 653 – 53,652 102 GROWTH WITH SYNERGY Singapore Press Holdings | Annual Report 2003 | Audited Financial Statements 103

NOTES TO THE FINANCIAL STATEMENTS (cont’d) August 31, 2003

32. Segmental Information (cont’d) 32. Segmental Information (cont’d) 2002 Notes: Newspapers Broadcasting, Treasury and Multimedia and and (a) Business segments: The Group is organised into four major operating segments, namely Newspapers and Magazines Telecommunications Investment Property Eliminations Consolidated Magazines, Broadcasting, Multimedia and Telecommunications, Treasury and Investment, and Property, and S$’000 S$’000 S$’000 S$’000 S$’000 S$’000 reports its primary segment information through direct identification. The Newspapers and Magazines segment is involved in the publishing, printing and distributing of newspapers and magazines. The Broadcasting, Operating revenue Multimedia and Telecommunications segment provides services which include provision of broadcasting, portal External sales 808,277 41,386 – 53,862 – 903,525 sites, mobile telephony and other related services. The Treasury and Investment segment manages the investment Inter-segmental sales 3,559 2,028 167 5,260 (11,014) – activities of the Group. The Property segment holds and manages properties owned by the Group. Total operating revenue 811,836 43,414 167 59,122 (11,014) 903,525 Following the partial disposal of interests in an associate during the financial year, the Telecommunication business Result ceases to be part of a major operating segment from the next financial year. Segment result 333,131 (58,529) 40,817 37,043 – 352,462 Finance costs – (1,660) – (27,027) – (28,687) (b) Geographical segments: The principal geographical area in which the Group operates is Singapore. The Finance income 203 112 – 160 – 475 Group’s overseas operations comprise mainly holding overseas investments and the provision of marketing, Share of profits less losses editorial, art and graphical services overseas. of associates 29 30,992 – – – 31,021 Exceptional items – Impairment losses of Capital assets (24,264) – – (2,804) – (27,068) Operating Revenue Segment Assets Expenditure – Others (4,361) 68,554 – (34,922) – 29,271 2003 2002 2003 2002 2003 2002 Profit/(loss) before taxation 304,738 39,469 40,817 (27,550) – 357,474 S$’000 S$’000 S$’000 S$’000 S$’000 S$’000 Taxation (50,303) Profit after taxation 307,171 Singapore 897,816 903,525 3,234,167 3,220,695 57,181 191,229 Minority interests 226 Other Countries – – 134,078 131,974 19 38 Profit attributable to 897,816 903,525 3,368,245 3,352,669 57,200 191,267 shareholders 307,397 (c) Under equity accounting, the Group’s operating revenue does not include its share of associates’ operating revenue. Other Information Segment assets 746,931 104,670 1,243,789 1,110,985 – 3,206,375 Interests in associates 99 146,195 – – – 146,294 33. Fair Value of Financial Instruments Consolidated total assets 3,352,669 The financial assets and financial liabilities of the Group and the Company for which fair values are required to be Segment liabilities 140,515 112,719 95 722,602 – 975,931 disclosed in accordance with Singapore Statements of Accounting Standard comprise the following: Current taxation 51,204 Deferred taxation 83,287 (a) long-term investments in investees other than subsidiaries and associates, Minority interests 709 Consolidated total liabilities 1,111,131 (b) non-current loans payable,

Capital expenditure 178,009 4,617 – 8,641 – 191,267 (c) non-current receivables from and payables to subsidiaries and associates, Depreciation 42,813 8,632 8 873 – 52,326 (d) other non-current receivables,

(e) current assets other than stocks, prepaid content rights and prepayments,

(f) current liabilities other than provision for taxation. 104 GROWTH WITH SYNERGY Singapore Press Holdings | Annual Report 2003 | Shareholding Statistics 105

NOTES TO THE FINANCIAL STATEMENTS (cont’d) Shareholding Statistics Share price movements for the year August 31, 2003 SHARE PRICE MOVEMENTS for the year ended August 31 ended Auguat 31, 2003 33. Fair Value of Financial Instruments (cont’d) The fair values of these financial assets and financial liabilities as at the balance sheet date approximate their Highest closing price Lowest closing price carrying values as shown in the balance sheets, with the exception of long-term and short-term investments, and S$ S$ non-current receivables from and payables to subsidiaries and associates. 40 26

The fair values of quoted long-term investments and quoted and unquoted short-term investments as at the balance 24 sheet date are as detailed in the respective notes to the financial statements. For unquoted long-term investments, 35 22 it is not practicable to determine the fair value because the assumptions used in the valuation models to value these investments cannot be reasonably determined. The unquoted long-term investments comprised investments in 20 30 venture capital companies and companies whose principal activities include the provision of telecommunication- 18 related services. Information on the fair values of non-current receivables from and payables to subsidiaries and 16 associates are set out in the respective notes to the financial statements. 25

14

34. Re-classification 20 12

Where necessary, comparative figures have been adjusted to conform with the current presentation where there are 10 changes in presentation in these financial statements. 0 0 Year 1999 2000 2001 2002 2003 Year 1999 2000 2001 2002 2003

35. Authorisation of Financial Statements On October 10, 2003, the Board of Directors of Singapore Press Holdings Limited authorised these financial statements for issue. 2003 2002 2001 2000 1999 S$ S$ S$ S$ S$

Highest closing price 20.50 24.70 29.10 37.20 34.50 Lowest closing price 15.50 15.40 18.70 25.30 12.20 August 31 closing price 18.70 19.60 19.80 27.70 28.00 Price/earnings ratio based on August 31 closing price 18.33 23.61 22.76 31.84 30.77 106 GROWTH WITH SYNERGY Singapore Press Holdings | Annual Report 2003 | Shareholding Statistics 107

SHAREHOLDERS BY SIZE OF SHAREHOLDINGS HOLDERS OF MANAGEMENT SHARES as at October 22, 2003 as at October 22, 2003

Name of Shareholder Total Holdings %

1. THE GREAT EASTERN LIFE ASSURANCE COMPANY LIMITED 846,537 22.60 0.19%

8.43% 2. OVERSEA-CHINESE BANKING CORPORATION LTD 629,203 16.80

3. NTUC INCOME INSURANCE COOPERATIVE LIMITED 612,125 16.35 42.32% 4. SINGAPORE TELECOMMUNICATIONS LIMITED 498,112 13.30

5. THE DEVELOPMENT BANK OF SINGAPORE LTD 355,793 9.50

6. UNITED OVERSEAS BANK LIMITED 301,363 8.05

49.06% 7. NATIONAL UNIVERSITY OF SINGAPORE 200,697 5.36

8. FRASER & NEAVE LIMITED 150,678 4.02

9. FULLERTON (PRIVATE) LIMITED 150,678 4.02

10. CHIEF EXECUTIVE OFFICER 2 0.00 1 – 999 1,000 – 10,000 10,001 – 1,000,000 1,000,001 and above

11. DIRECTORS (ONE EACH) 9 0.00

Size of Shareholdings No. of Shareholders % Total Holdings % TOTAL 3,745,197 100.00

1 – 999 5,594 42.32 1,691,505 0.46

1,000 – 10,000 6,485 49.06 16,494,408 4.50 Voting rights of shareholders The holders of management and ordinary shares shall be entitled either on a poll or by a show of hands to one (1) vote for 10,001 – 1,000,000 1,114 8.43 60,598,642 16.55 each share, EXCEPT that on any resolution relating to the appointment or dismissal of a director or any member of the staff of the Company, the holders of the management shares shall be entitled either on a poll or by a show of hands to two 1,000,001 and above 25 0.19 287,480,517 78.49 hundred (200) votes for each management share held.

Grand Total 13,218 100.00 366,265,072 100.00

All the ordinary shares in the Company are at all times held by the public and Rule 723 of the Singapore Exchange Listing Manual has been complied with. 108 GROWTH WITH SYNERGY Singapore Press Holdings | Annual Report 2003 109

TWENTY LARGEST ORDINARY SHAREHOLDERS as at October 22, 2003 Share Options The Singapore Press Holdings Group Executives’ Share Option Scheme (“1990 Scheme”) and the Singapore Press Holdings Name of Shareholder Total Holdings % Group (1999) Share Option Scheme (“1999 Scheme”) are administered by the Remuneration Committee comprising the following members: 1. DBS NOMINEES (PRIVATE) LIMITED 91,647,804 25.02 Michael Fam Yue Onn (Chairman) Lee Hee Seng 2. RAFFLES NOMINEES PTE LTD 62,100,868 16.96 Lim Chin Beng Ngiam Tong Dow 3. HSBC (SINGAPORE) NOMINEES PTE LTD 40,819,807 11.15 Yeo Ning Hong

4. CITIBANK NOMINEES SINGAPORE PTE LTD 21,623,727 5.90 Details of options granted to Directors and employees in the Group receiving 5% or more of the total number of options available under the 1990 Scheme are as follows: 5. UNITED OVERSEAS BANK NOMINEES (PRIVATE) LIMITED 15,097,050 4.12 Name of Number and Aggregate Aggregate Aggregate Director/Employee terms of options options options 6. DB NOMINEES (S) PTE LTD 9,787,140 2.67 Options granted granted since exercised since outstanding from 1.9.02 to commencement commencement as at 31.8.03 7. TEMASEK HOLDINGS (PTE) LTD 5,170,176 1.41 31.8.03 of Scheme on of Scheme on 28.12.90 to 28.12.90 to 8. THE ASIA LIFE ASSURANCE SOCIETY LIMITED 4,573,800 1.25 31.8.03 31.8.03

9. TAN ENG SIAN 3,863,401 1.05 Lim Kim San – 1,763,912 1,552,782 211,130

10. UNIVERSITY OF MALAYA 3,641,778 0.99 The 1990 Scheme was approved by shareholders in December 1990, and has been subsequently amended; the latest amendments were approved at the extraordinary general meeting on July 16, 1999. 11. LEE FOUNDATION STATES OF MALAYA 3,580,123 0.98 At the extraordinary general meeting on July 16, 1999, the 1999 Scheme was adopted to replace the 1990 scheme. 12. KO TECK SIANG 3,122,000 0.85 Details of options granted to Directors and employees in the Group receiving 5% or more of the total number of options 13. OVERSEA CHINESE BANK NOMINEES (PRIVATE) LIMITED 2,540,960 0.69 available under the 1999 Scheme are as follows: Name of Number and Aggregate Aggregate Aggregate 14. OVERSEAS UNION BANK NOMINEES (PRIVATE) LTD 2,290,340 0.63 Director/Employee terms* of options options options Options granted granted since exercised since outstanding 15. OVERSEAS UNION ENTERPRISE LIMITED 2,149,140 0.59 from 1.9.02 to commencement commencement as at 31.8.03 31.8.03 of Scheme on of Scheme on 16. YONG SIEW YOON 2,048,164 0.56 27.10.99 to 27.10.99 to 31.8.03 31.8.03 17. LEE FOUNDATION 1,931,986 0.53 Lim Kim San 225,000 900,000 – 900,000 18. MORGAN STANLEY ASIA (SINGAPORE) SECURITIES PTE LTD 1,641,675 0.45 *Terms: Exercise price: S$19.54 19. ROBINSON & COMPANY LIMITED 1,536,864 0.42 Expiry Date: 28.10.2012

20. UOB KAY HIAN PTE LTD 1,484,119 0.41 In respect of each of the 1990 Scheme and 1999 Scheme: 1. the Rules do not allow for options to be granted at a discount; TOTAL 280,650,922 76.63 2. there are no controlling shareholders of the Company or its associates to whom options have been granted; and 3. except as disclosed herein, no employee has received 5% or more of the total number of options available.

Copies of the 1990 Scheme and the 1999 Scheme are available for inspection at the Company’s registered office. 110 GROWTH WITH SYNERGY Singapore Press Holdings | Annual Report 2003 | Overseas Bureaux/Offices 111

Overseas Bureaux/Offices as at November 1, 2003

Bureau/ Name/ Bureau/ Name/ Offices Address Telephone Fax Email Pub. Offices Address Telephone Fax Email Pub.

BANGKOK Nirmal Ghosh 66-2-661 6207 66-2-661 6207 [email protected] ST KUALA Brenden Pereira 02-03-2162-0011 02-03-2164 [email protected] ST Apt. 2A, Prime Residence LUMPUR Leslie Lau Kuan Chen [email protected] 6 Sukhumvit Soi 27 Reme Bin Ahmad [email protected] Klong Toey Nua, Wathana, Eddie Toh [email protected]/ BT Bangkok 10110, Thailand [email protected] Diana Oon Abdullah [email protected] BEIJING Jason Leow 86-10-6418 1577 / 86-10-6418 1580 [email protected] ST Suite 11A, Level 11, MNI Twins 86-10-6418 1578 Tower 2, No. 11 Jalan Pinang Goh Sui Noi [email protected] 50450 Kuala Lumpur, Malaysia Chua Chin Hon [email protected] Lee Huay Leng 86-10-6418 1587 86-10-6418 1584 [email protected] ZB MANILA Maria Luz Baguioro 63-2-848 7232 / 63-2-848 7235 [email protected] ST Sng Tuan Hwee [email protected] 63-2-848 7233 / 63-2-848 7234 Suite 4G, Office Tower B Unit no. 1510, 15th floor, Tower One East Gate Plaza Ayala Triangle, Avala Avenue 29 Dongzhong Street Makati City 1226, Philippines Dongcheng District Beijing 100027, P.R. China SHANGHAI Lee Eng Lock 86-21-6218 1315/16/17 86-21-6258 8723 [email protected] ZB Room 2316, Nanzheng Building HONGKONG Ching Cheong 852-2523 7675 852-2845 9934 [email protected] ST No. 580 West Nanjing Road Mary Kwang [email protected] Shanghai 200041, China Lee Chih Horng 852-2524 6191 852-2524 7394 [email protected] ZB Norman Yik TAIPEI Lawrence Chung Kuo Hsiung 886-2-2370 3727 [email protected] ST Echo Cheung 852-2877 9076 852-2522 0950 [email protected] Mktg Yap Pheng Hui 886-2-2383 2732 [email protected] ZB 1308, 13th Floor, Tower Two 130, 2nd Floor Lippo Centre, No. 89 Queensway 852-2526 9018 (General Line) Po Ai Road, Kai-Yue Building Hong Kong 852-2877 0713 (General Line) Taipei, Taiwan

JAKARTA Derwin Pereira 62-21-3983 1465 62-21-3983 1466 [email protected] ST TOKYO Kwan Weng Kin 81-3-3442 4258 81-3-3442 4258 [email protected] ST 62-21-3983 1467 2-16-49-503 Takanawa Robert Go 62-21-3983 1469 [email protected] Minato-ku, Tokyo Devi Muri Asmarani 62-21-3983 1471 [email protected] Japan 108-0074 Shoeb Kagda 62-21-3983 1465 [email protected] BT Ryo Ichi Yanagihara 81-3-3582 6259 81-3-3589 5480 Mktg Chong Tien Siong 62-21-3983-1485 6221-3983 1486 [email protected] ZB 5A, 6-28 Akasaka, 6-Chome Suite 1401, 14th Floor Minato-ku, Tokyo 107, Japan Deutsche Bank Building Jalan Imam Bonjol 80, WASHINGTON Roger Mitton 1-202 662 8726 1-202-662 8729 [email protected] ST Jakarta 10310 National Press Building Suite 916, 529 14th Street., NW Washington, DC 20045” U.S.A

Note: ST – Straits Times, ZB – Lianhe Zaobao, BT – The Business Times, Mktg – Marketing 112 GROWTH WITH SYNERGY Singapore Press Holdings | Annual Report 2003 | Notice of Annual General Meeting 113

Properties of the Group Notice of Annual General Meeting as at August 31, 2003

Expiry date Land Built-in Existing NOTICE IS HEREBY GIVEN that the Nineteenth Annual General Meeting of the Company will be held at The Auditorium, Location Tenure of Lease (sq m) (sq m) use 1000 Toa Payoh North, News Centre, 1st Storey, Annexe Block, Singapore 318994 on Friday, December 5, 2003 at 10.30 a.m. for the following business: Times House Freehold – 10,485 12,080 Industrial 390 Kim Seng Road Ordinary Business Times Industrial Building Freehold – 20,638 12,560 Industrial 1. To receive and, if approved, to adopt the Directors’ Report and Audited Accounts for the financial year ended August 31, 2003. 422 Thomson Road 2. To declare a final dividend of 50 cents, and a special dividend of 30 cents, per S$1 share less income tax in respect of 82 Genting Lane Leasehold July 16, 2040 24,892 48,922 Industrial the financial year ended August 31, 2003.

Print Centre Leasehold June 9, 2034 110,075 103,460 Industrial 3. To pass the following resolutions separately under Section 153(6) of the Companies Act, Chapter 50: “That pursuant to 2 Jurong Port Road Section 153(6) of the Companies Act, Chapter 50, be and is hereby re-appointed a Director of the Company to hold such office until the next Annual General Meeting of the Company”: News Centre Leasehold March 2, 2031 21,730 54,296 Industrial 1000 Toa Payoh North (i) Lim Chin Beng (ii) Michael Fam Yue Onn Manhattan House Leasehold October 15, 2068 – 554 Commercial (iii) Lee Ek Tieng 151 Chin Swee Road (iv) Tang I-Fang. Units #01-39 to #01-48 and #01-51 to #01-56 4. To re-elect Ngiam Tong Dow, who is retiring by rotation in accordance with the Company’s Articles of Association, and who, being eligible, offers himself for re-election. 20A Yarwood Avenue Leasehold May 6, 2878 1,721 488 Residential 5. To elect the following as new Directors in accordance with the Company’s Articles of Association: 42 Nassim Road Freehold – 1,406 686 Residential (i) Philip N. Pillai 42A Nassim Road Freehold – 1,444 645 Residential (ii) Sum Soon Lim.

42B Nassim Road Freehold – 1,418 645 Residential 6. To approve Directors’ fees of S$700,207.

Paragon Freehold – 16,657 85,182 Commercial 7. To appoint Auditors and to authorise the Directors to fix their remuneration. 290 Orchard Road 8. To transact any other business of an Annual General Meeting. MALAYSIA Awana Condominium Freehold – – 117 Residential Unit 3544 Genting Highlands

HONGKONG Tower Two, Lippo Centre Leasehold February 14, 2059 – 368 Commercial Unit 1308 13th Floor 89 Queensway, Hong Kong 114 GROWTH WITH SYNERGY Singapore Press Holdings | Annual Report 2003 | Notice of Annual General Meeting 115

Special Business (ii) “That approval be and is hereby given to the Directors to offer and grant options in accordance with the provisions of 9. To consider and, if thought fit, to pass the following Ordinary Resolutions: the Singapore Press Holdings Group (1999) Share Option Scheme (the “1999 Scheme”) and to allot and issue such shares as may be issued pursuant to the exercise of options under the 1999 Scheme, provided always that the aggre- (i) “That pursuant to Section 161 of the Companies Act, Chapter 50 and the listing rules of the Singapore Exchange gate number of shares to be issued pursuant to the 1999 Scheme shall not exceed 12 per cent of the issued share cap- Securities Trading Limited (the “SGX-ST”), and subject to the provisions of the Newspaper and Printing Presses Act, ital of the Company from time to time.” Chapter 206, authority be and is hereby given to the Directors of the Company to: (iii) “That: (a) (i) issue Shares in the capital of the Company (“Shares”) whether by way of rights, bonus or otherwise; and/or (a) for the purposes of Sections 76C and 76E of the Companies Act, Chapter 50 (the “Companies Act”), the exercise by (ii) make or grant offers, agreements or options (collectively, “Instruments”) that might or would require Shares to the Directors of the Company of all the powers of the Company to purchase or otherwise acquire issued ordinary be issued, including but not limited to the creation and issue of (as well as adjustments to) warrants, debentures shares of S$1.00 each fully paid in the capital of the Company (the “Ordinary Shares”) not exceeding in aggregate or other instruments convertible into Shares, the Prescribed Limit (as hereafter defined), at such price or prices as may be determined by the Directors from time to time up to the Maximum Price (as hereafter defined), whether by way of:- at any time and upon such terms and conditions and for such purposes and to such persons as the Directors may in their absolute discretion deem fit; and (i) market purchase(s) on the SGX-ST transacted through the Central Limit Order Book trading system; and/or

(b) (notwithstanding the authority conferred by this Resolution may have ceased to be in force) issue Shares in (ii) off-market purchase(s) (if effected otherwise than on the SGX-ST) in accordance with any equal access pursuance of any Instrument made or granted by the Directors while this Resolution was in force, scheme(s) as may be determined or formulated by the Directors as they consider fit, which scheme(s) shall satisfy all the conditions prescribed by the Companies Act; provided that: and otherwise in accordance with all other laws and regulations and rules of the SGX-ST as may for the time being (1) the aggregate number of Shares to be issued pursuant to this Resolution (including Shares to be issued in be applicable, be and is hereby authorised and approved generally and unconditionally (the “Share Buy Back Mandate”); pursuance of Instruments made or granted pursuant to this Resolution) does not exceed 50 per cent. of the issued share capital of the Company (as calculated in accordance with sub-paragraph (2) below), of which the aggregate (b) unless varied or revoked by the Company in general meeting, the authority conferred on the Directors of the number of Shares to be issued other than on a pro rata basis to shareholders of the Company (including Shares to Company pursuant to the Share Buy Back Mandate may be exercised by the Directors at any time and from time to be issued in pursuance of Instruments made or granted pursuant to this Resolution) does not exceed 20 per cent. time during the period commencing from the date of the passing of this Resolution and expiring on the earlier of: of the issued share capital of the Company (as calculated in accordance with sub-paragraph (2) below); (i) the date on which the next Annual General Meeting of the Company is held; and (2) (subject to such manner of calculation as may be prescribed by the SGX-ST) for the purpose of determining the aggregate number of Shares that may be issued under sub-paragraph (1) above, the percentage of issued share capital (ii) the date by which the next Annual General Meeting of the Company is required by law to be held; shall be based on the issued share capital of the Company at the time this Resolution is passed, after adjusting for:

(i) new Shares arising from the conversion or exercise of any convertible securities or share options or vesting of share awards which are outstanding or subsisting at the time this Resolution is passed; and

(ii) any subsequent consolidation or subdivision of Shares;

(3) in exercising the authority conferred by this Resolution, the Company shall comply with the provisions of the listing manual of the SGX-ST for the time being in force (unless such compliance has been waived by the SGX-ST) and the Articles of Association for the time being of the Company; and

(4) (unless revoked or varied by the Company in general meeting) the authority conferred by this Resolution shall continue in force until the conclusion of the next Annual General Meeting of the Company or the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is the earlier.” 116 GROWTH WITH SYNERGY Singapore Press Holdings | Annual Report 2003 | Notice of Annual General Meeting 117

(c) in this Resolution: EXPLANATORY NOTES 1. In relation to Ordinary Resolution No. 3 : “Prescribed Limit” means that number of issued Ordinary Shares representing ten per cent of the issued Ordinary Share capital of the Company as at the date of the passing of this Resolution; • Lim Chin Beng will, upon re-appointment, continue as the Chairman of the Board and of the Executive Committee, and as a member of the Nominating Committee and the Remuneration Committee. He is considered an independent “Maximum Price” in relation to Ordinary Shares to be purchased or acquired, means the purchase price (excluding Director. brokerage, commission, applicable goods and services tax and other related expenses) which shall not exceed, in the case of a market purchase of an Ordinary Share and off-market purchase pursuant to an equal access scheme, • Michael Fam Yue Onn will, upon re-appointment, continue as the Chairman of the Nominating Committee and of 105 per cent of the Average Closing Price of the Ordinary Shares; the Remuneration Committee, and a member of the Executive Committee. He is considered an independent Director.

“Average Closing Price” means the average of the last dealt prices of an Ordinary Share for the five consecutive • Lee Ek Tieng will, upon re-appointment, continue as a member of the Audit Committee and will also be appointed trading days on which the Ordinary Shares are transacted on the SGX-ST immediately preceding the date of market a member of the Nominating Committee. He is considered an independent Director. purchase by the Company or, as the case may be, the date of the making of the offer pursuant to the off-market purchase, and deemed to be adjusted, in accordance with the listing rules of the SGX-ST, for any corporate action • Tang I-Fang will, upon re-appointment, continue as the Chairman of the Audit Committee. He is considered an that occurs after the said five-day period; and independent Director.

“date of the making of the offer” means the date on which the Company announces its intention to make an offer 2. In relation to Ordinary Resolution No. 4 : for the purchase or acquisition of Ordinary Shares from holders of Ordinary Shares, stating therein the purchase price (which shall not be more than the Maximum Price calculated on the foregoing basis) for each Ordinary Share • Ngiam Tong Dow will, upon re-election, continue as a member of the Executive Committee, the Nominating and the relevant terms of the equal access scheme for effecting the off-market purchase; and Committee and the Remuneration Committee. He is considered an independent Director.

(d) the Directors of the Company and/or any of them be and are hereby authorised to complete and do all such acts 3. In relation to Ordinary Resolution No. 5, information and details on Philip N. Pillai and Sum Soon Lim are as follows: and things (including executing such documents as may be required) as they and/or he may consider expedient or necessary to give effect to the transactions contemplated and/or authorised by this Resolution.” • Philip N. Pillai is a Senior Partner in Shook Lin & Bok, Singapore. He is currently a Director of the Monetary Authority of Singapore, Singapore Technologies Engineering Ltd, Lindeteves-Jacoberg Limited and Hotung Investment Holdings Limited. Dr Pillai holds an LLB First Class hons (Singapore), LLM (Harvard) and SJD (Harvard).

By Order of the Board He will, upon election, also be appointed as a member of the Remuneration Committee. He is considered an independent Director. Ginney Lim May Ling Khor Siew Kim • Sum Soon Lim is a Director of Chartered Semiconductor Manufacturing Ltd, CapitaLand Ltd and Singapore Health Company Secretaries Services Pte Ltd. He is also Corporate Adviser to Singapore Technologies Pte Ltd and Temasek Holdings Pte Ltd. He holds directorships in various companies in the Singapore Technologies Group. He is also a member of the Singapore, Securities Industry Council. He holds a B.Sc.(Hons) in Production Engineering, University of Nottingham. November 19, 2003 He will, upon election, also be appointed as a member of the Audit Committee. He is considered an independent Director. Notes : A Member entitled to attend and vote at the General Meeting is entitled to appoint a proxy to attend and vote in his stead and the proxy need not be a Member of the Company. The instrument appointing the proxy must be lodged at the Company’s Share Registration Office, Barbinder & Co Pte Ltd, 8 Cross Street, #11-00 PWC Building, Singapore 048424 not less than 48 hours before the time fixed for the meeting. 118 GROWTH WITH SYNERGY Singapore Press Holdings | Annual Report 2003 | Proxy Form 119

Proxy Form

STATEMENT PURSUANT TO ARTICLE 72 OF THE COMPANY’S ARTICLES OF ASSOCIATION ANNUAL GENERAL MEETING The effects of the resolutions under the heading “Special Business” in the Notice of the forthcoming Annual General Singapore Press Holdings Limited (Incorporated in Singapore) Meeting are: I/We (a) Ordinary Resolution No. 9(i) is to allow the Directors of the Company from the date of that meeting until the next Annual of General Meeting to issue shares in the Company and/or make or grant Instruments, during the validity period of this being a member/members of the abovenamed Company, hereby appoint the Chairman of the Meeting, or Resolution, and to issue shares in pursuance of such Instruments subject to specified limits. Name Address NRIC/Passport Number Proportion of (b) Ordinary Resolution No. 9(ii) is to authorise the Directors to offer and grant options under the 1999 Scheme and to allot Shareholdings (%) and issue shares pursuant to the exercise of such options under the 1999 Scheme up to an amount not exceeding 12 per cent of the issued share capital of the Company from time to time.

(c) Ordinary Resolution No. 9(iii) is to renew the mandate to permit the Company to purchase or acquire issued ordinary and/or (delete as appropriate) shares in the capital of the Company on the terms and subject to conditions of the Resolution.

The Company may use internal sources of funds, or a combination of internal resources and external borrowings, to finance the purchase or acquisition of its ordinary shares. The amount of funding required for the Company to purchase or acquire its ordinary shares, and the impact on the Company’s financial position, cannot be ascertained as at the date as my/our proxy/proxies to attend and to vote for me/us on my/our behalf and, if necessary, to demand a poll, at the Annual of this Notice as these will depend on the number of ordinary shares purchased or acquired and the price at which such General Meeting of the Company to be held at The Auditorium, 1000 Toa Payoh North, News Centre, 1st Storey, Annexe ordinary shares were purchased or acquired. Block, Singapore 318994 on December 5, 2003 at 10.30 a.m. and at any adjournment thereof.

Based on the issued and paid-up ordinary share capital of the Company as at October 17, 2003 (the “Latest Practicable (Please indicate with an "X" in the spaces provided whether you wish your vote(s) to be cast for or against the Ordinary Date”), the purchase by the Company of ten per cent of its issued ordinary shares will result in the purchase or acquisition Resolutions as set out in the Notice of Annual General Meeting. In the absence of specific directions, the proxy/proxies will of 36,626,507 ordinary shares. Assuming that the Company purchases or acquires the 36,626,507 ordinary shares at the vote or abstain as he/they may think fit, as he/they will on any other matter arising at the Annual General Meeting.) maximum purchase price of S$20.92 for one ordinary share (being the price equivalent to 105 per cent of the average closing market prices of the ordinary shares for the five consecutive market days on which the ordinary shares were traded on the SGX-ST immediately preceding the Latest Practicable Date), the maximum amount of funds required for To be used on To be used in such share buy back is approximately S$766.2 million. The maximum amount of funds required for such share buy back a Show of Hands the event of a Poll is the same regardless of whether the Company effects an on-market purchase or an off-market purchase. No. of No. of No. Resolutions For Against Votes For Votes Against The financial effects of the purchase or acquisition of such ordinary shares by the Company pursuant to the proposed Ordinary Business Share Buy Back Mandate on the audited financial accounts of the Company and its subsidiaries for the financial year 1. To adopt Directors' Report and Audited Accounts ended August 31, 2003 are set out in greater detail in the letter to Shareholders dated November 19, 2003, which is 2. To declare Final and Special Dividends enclosed together with this Annual Report. 3. To re-appoint Directors pursuant to Section 153(6) of the Companies Act, Cap. 50: (i) Lim Chin Beng (ii) Michael Fam Yue Onn (iii) Lee Ek Tieng (iv) Tang I-Fang 4. To re-elect Director: – Ngiam Tong Dow 5. To elect new Directors: (i) Philip N. Pillai (ii) Sum Soon Lim 6. To approve Directors’ fees 7. To appoint Auditors and authorise Directors to fix their remuneration 8. Any other business 120 GROWTH WITH SYNERGY Singapore Press Holdings | Annual Report 2003 | Proxy Form 121

To be used on To be used in a Show of Hands the event of a Poll No. of No. of No. Resolutions For Against Votes For Votes Against Special Business 9. (i) To approve the Ordinary Resolution pursuant to Section 161 of the Companies Act, Cap. 50 (ii) To authorise Directors to offer and grant options and to issue shares in accordance with the provisions of the Singapore Press Holdings Group (1999) Share Option Scheme (iii) To renew the mandate authorising Directors to purchase the Company’s ordinary shares

Dated this day of

Total number of ordinary Total number of management shares held shares held

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

IMPORTANT Notes: 1. Please insert the total number of ordinary shares and/or management shares (“Shares”) held by you. If you have ordinary shares entered against your name in the Depository Register (as defined in Section 130A of the Companies Act, Chapter 50 of Singapore), you should insert that number of ordinary shares. If you have Shares registered in your name in the Register of Members, you should insert that number of Shares. If you have ordinary shares entered against your name in the Depository Register and Shares registered in your name in the Register of Members, you should insert the aggregate number of Shares entered against your name in the Depository Register and registered in your name in the Register of Members. If no number is inserted, the instrument appointing a proxy or proxies shall be deemed to relate to all the Shares held by you. 2. If any proxy other than the Chairman of the Meeting is to be appointed, please strike out the words “the Chairman of the Meeting” and insert the name and address of the proxy desired in the box provided. If the box is left blank or incomplete, the Chairman of the Meeting shall be deemed to be appointed as your proxy. 3. A Member of the Company entitled to attend and vote at a meeting of the Company is entitled to appoint one or two proxies to attend and vote instead of him. 4. Where a Member appoints two proxies, the appointments shall be invalid unless he specifies the proportion of his shareholding (expressed as a percentage of the whole) to be represented by each proxy. 5. The instrument appointing a proxy or proxies must be deposited at the Share Registration Office of the Company at Barbinder & Co Pte Ltd, 8 Cross Street, #11-00 PWC Building, Singapore 048424, not less than 48 hours before the time appointed for the Annual General Meeting. 6. The instrument appointing a proxy or proxies must be under the hand of the appointor or of his attorney duly authorised in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its seal or under the hand of an officer or attorney duly authorised. 7. A corporation which is a Member may authorise by resolution of its directors or other governing body such person as it thinks fit to act as its representative at the Annual General Meeting, in accordance with Section 179 of the Companies Act, Chapter 50 of Singapore. 8. The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, improperly completed or illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified in the instrument appointing a proxy or proxies. In addition, in the case of ordinary shares entered in the Depository Register, the Company may reject any instrument appointing a proxy or proxies lodged if the Member, being the appointor, is not shown to have ordinary shares entered against his name in the Depository Register as at 48 hours before the time appointed for holding the Annual General Meeting, as certified by The Central Depository (Pte) Limited to the Company.

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