SINGAPORE PRESS HOLDINGS // ANNUAL REPORT 2006 Newspapers

The Straits Times The Sunday Times The Business TimesThe New Paper on Sunday Total Paid Circulation 1.044 Million copies a day

Total Readership 14 newspapers in 2.7 four languages Million readers

Shin Min Daily News My PaperFriday Weekly Berita Harian Berita Minggu

01 Magazines

Her World Female Home & Decor Young Parents Icon Citta Bella Shape

02 More than 80 titles Number 1 magazine player in 800,000 Best-read women’s copies a month distributed magazine 200,000 readers a month

Simply Her Maxim Men’s Health FiRST Torque The Peak UW and others

03 Convergence brings exciting challenges for the media industry. To keep pace with the digital revolution, SPH has made its premier news and information accessible anywhere, anytime and across the print, mobile and online platforms. With strategic investments in Internet and outdoor media, both locally and overseas, we are poised to grow our business...

04 05 Online and New Media

Total Pageviews 100 Million a month

Unique Visitors Launched 6 ST701 March 2006 Million STOMP June 2006 a month Relaunched

AsiaOne September 2006

www..com.sg straitstimes.asiaone.com business-times.asiaone.com www.zaobao.com newpaper.asia1.com.sg

06 www.mypaper.sg cyberita.asia1.com.sg tamilmurasu.asia1.com.sg www.st701.com.sg www.stomp.com.sg

07 Outdoor Media

TOM OMG Largest outdoor billboard and unipole network in China TOM OMG Over 300,000 m2 60 of outdoor advertising major cities space in China

SPH MBO Singapore’s largest outdoor motion display network 5 large LED screens 400 plasma/LCD screens

SPH MediaBoxOffice (SPH MBO) TOM Outdoor Media Group (TOM OMG)

08 09 CONTENTS P11//GROUP FINANCIAL HIGHLIGHTS P54//VALUE ADDED STATEMENT P12//CHAIRMAN’S STATEMENT P55//INVESTOR RELATIONS P14//BOARD OF DIRECTORS P56//INVESTOR REFERENCE P18//SPH ORGANISATION STRUCTURE P57//DIRECTORS’ REPORT P19//SENIOR MANAGEMENT P62//BALANCE SHEETS P22//CEO’S OVERVIEW OF GROUP P63//CONSOLIDATED INCOME STATEMENT OPERATIONS P64//CONSOLIDATED STATEMENT P38//CORPORATE SOCIAL OF CHANGES IN TOTAL EQUITY RESPONSIBILITY P66//CONSOLIDATED CASH FLOW P40//SIGNIFICANT EVENTS STATEMENT P42//AWARDS & ACCOLADES P69//NOTES TO THE FINANCIAL STATEMENTS P43//CORPORATE GOVERNANCE P113//OVERSEAS BUREAUS P49//DAILY AVERAGE NEWSPAPER P117//PROPERTIES OF THE GROUP CIRCULATION FOR AUGUST 2006 P118//SHAREHOLDINGS STATISTICS P50//SPH NEWSPAPERS P120//NOTICE OF ANNUAL GENERAL MEETING READERSHIP TRENDS P123//PROXY FORM P51//FINANCIAL REVIEW GROUP FINANCIAL HIGHLIGHTS FOR THE YEAR ENDED AUGUST 31, 2006

2006 2005* Change S$’000 S$’000 %

Operating revenue 1,021,360 1,007,512 1.4

Profit before investment income and exceptional items 361,086 351,887 2.6

Profit before exceptional items 442,576 596,906 (25.9)

Profit before taxation 509,420 558,364 (8.8)

Profit after taxation 428,344 488,389 (12.3)

Minority interests 116 (69) NM

Profit attributable to shareholders 428,460 488,320 (12.3)

Shareholders’ interests 2,046,395 1,621,203 26.2

Total assets 3,039,549 2,629,060 15.6

Total liabilities 990,812 1,005,586 (1.5)

Minority interests 2,342 2,271 3.1

Dividends declared for the financial year 382,433 362,777 5.4

Profitability ratios % % % points

Operating margin^ 35.4 34.9 0.5

Return on operating revenue 41.9 48.5 (6.6)

Return on shareholders’ funds 20.9 30.1 (9.2)

Per share data

Net assets (S$) 1.28 1.02 25.5

Profit before taxation (S$) 0.32 0.35 (8.6)

Profit attributable to shareholders (S$) 0.27 0.31 (12.9)

Dividends declared for the financial year (cents)# 24.00 22.80 5.3

Dividend cover for the financial year (times) 1.1 1.3 (15.4)

Value added S$ S$

Per employee 205,148 201,599 1.8

Per $ employment costs 2.63 2.59 1.5

Per $ investment in property, plant and equipment (before depreciation) 0.71 0.69 2.9

Per $ operating revenue 0.71 0.71 0.0

* The comparative figures have been restated to take into account the retrospective adjustments relating to FRS 102 – Share-based Payment for share options granted to employees. ^ Computed based on profit before investment income and exceptional items and operating revenue. # Dividends for FY 2006 are tax-exempt (one-tier) while dividends for FY 2005 comprised both tax-exempt (one-tier) and taxable dividends. Net dividends for FY 2005 are presented for comparison purposes. The proposed final dividend of 17.0 cents per share, comprising a normal dividend of 8.0 cents per share and a special dividend of 9.0 cents per share is subject to approval by shareholders at the Annual General Meeting on December 5, 2006.

11 CHAIRMAN’S STATEMENT

The global digital revolution is without doubt SPH’S VISION FOR THE SECOND HALF OF the most significant trend affecting the THIS DECADE IS TO ACCELERATE OUR media industry today. Digital media was TRANSFORMATION FROM A SINGAPORE initially regarded as a threat, especially by NEWSPAPER COMPANY TO BECOME AN those in the newspaper business. But as INTERNATIONAL MULTIMEDIA GROUP WITH the industry grappled with the impact of digital media on consumer habits and A FOOTPRINT COVERING SOUTHEAST AND changing lifestyles, it became clear that EAST ASIA. WE WILL CONTINUE TO IDENTIFY new media channels like the Internet and POTENTIAL BUSINESSES TO INVEST IN TO mobile phones could create huge GROW OUR REVENUE AND PROFIT STREAMS. opportunities for media to reach out to the public in new and innovative ways.

A further trend is the convergence of fast- changing technologies and media platforms. This has affected existing business models while again throwing up opportunities to evolve new business models.

Instead of fearing these new trends or worse still, ignoring them, we must ride on the changes and seize the many good opportunities they present – to improve our product offerings, expand our readership and advertiser reach, and grow our business beyond the core print media. This is the direction which will take in the coming years – to move beyond print and beyond Singapore.

SPH is already the leading media group in Southeast Asia, with 14 newspapers – covering all four of our main languages and reaching more than 80 percent of households in Singapore – and over 80 magazines distributed locally as well as in the region.

We have also had more than 10 years of experience on the Internet, and experimented with various business models for our online newspaper sites and portals. While Interactive and Business Times Online are subscription- based, zaobao.com remains a free access site attracting more than 4 million unique visitors each month, mainly from China. Our Internet portal, AsiaOne, which was

12 relaunched with more content and SPH aims to be a major pan-Asian outdoor investments may not generate immediate interactive items, is also well-poised to advertising player. Outdoor advertising is returns but will be necessary to secure benefit from the growth of Internet a natural extension of SPH’s newspaper SPH’s long-term growth. advertising. and magazine business as we can leverage on our existing marketing relationships. To reward our loyal shareholders, the Board SPH also launched several important SPH followed up its acquisition of has recommended a final dividend of 17 initiatives in the Internet domain. We MediaBoxOffice in the domestic market cents per share, comprising a normal expanded into the online recruitment with a 35 percent stake in Tom Outdoor dividend of 8 cents per share and a special advertising business with ST701, a job Media Group, one of the largest outdoor dividend of 9 cents per share. Together search portal that offers a full array of online advertising companies in China. Outdoor with the interim dividend paid during the services at a competitive price. And we advertising is one of the fastest growing year, the total dividend payout of 24 cents introduced STOMP, a website aimed segments in the Chinese media industry represents a yield of over 5 percent for the at encouraging interactivity with readers and the acquisition will help us establish a financial year ended 31 August 2006. of The Straits Times through all three strong foothold in this Asian giant. SPH is channels – online, mobile and print. now looking at other possible acquisitions Finally, it leaves me to thank our staff, and partnerships in the region. especially Cheong Yip Seng and Arthur The group also signed joint venture Seet who will be retiring at the end of this agreements with Schibsted, the leading On the property front, Paragon, our key year, for their sterling service to the SPH Scandinavian media group headquartered commercial property asset, continues to Group. I would also like to thank all our in Oslo, Norway, to develop our online do well and increased in value after we stakeholders for their continued support classifieds and search and directories redeveloped it into a major commercial and and commitment. I am confident that, by business. Together with our existing online shopping complex. We will continue to continuing to work together, we can scale businesses in Singapore, these joint make Paragon more attractive to tenants new heights of achievement. ventures will see SPH expanding its reach and shoppers by increasing its gross floor in Asia in a significant way. area by an additional 14,500 square feet.

In addition, SPH has footprints in the In view of the sustained recovery of the local TV and radio business with its property market and our success with 20 percent stake in TV Paragon's redevelopment, we have decided Holdings and 70 percent stake in SPH to develop an up-market exclusive UnionWorks respectively. condominium on our Times Industrial Building site in Thomson. We expect this But we have not rested on our laurels. In development to yield higher returns than the financial year ended 31 August 2006, an outright sale and help enhance we made several significant new initiatives. shareholders’ value by generating an additional earnings stream for the Group. In our core print segment, the launch of ( ), our Chinese-language free SPH’s vision for the second half of this newspaper, is a crucial addition to our suite decade is to accelerate our transformation of products. My Paper is targeted at the 20 from a Singapore newspaper company to to 40 age group who are more proficient in become an international multimedia group English but keen to improve their literacy in with a footprint covering Southeast and Mandarin and knowledge of Chinese culture. East Asia. We will continue to identify potential businesses to invest in to grow In the magazine segment, SPH our revenue and profit streams. For these consolidated its position as the Number 1 ventures to bear fruit and contribute magazine player in Singapore with a significantly to the Group, we will need to KENG YAM presence in regional markets. invest substantially. Some of these CHAIRMAN

13 BOARD OF DIRECTORS

// DR TONY TAN KENG YAM // PROF CHAM TAO SOON // MR ALAN CHAN HENG LOON Dr Tan joined the SPH Board as Director Prof Cham was appointed Deputy Chairman Mr Chan was appointed a director and on 5 September 2005. He is the Deputy of SPH on 1 March 2004. He has spent Group President of SPH on 1 July 2002 Chairman and Executive Director of the more than 30 years in the academia sector and became its Chief Executive Officer on Government of Singapore Investment and currently is a Distinguished Professor 1 January 2003. He is the Chairman of the Corporation Pte Ltd. He serves as the of Nanyang Technological University. Urban Redevelopment Authority and SP Chairman of the National Research PowerAssets Ltd, and sits on the boards Foundation, Deputy Chairman of the Prof Cham is also the Chairman of NatSteel, of Singapore Power Ltd, MediaCorp Press Research, Innovation and Enterprise a director of Ltd, Ltd, MediaCorp TV Holdings Pte Ltd and Council, and Chairman of the Ministry of WBL Corporation Ltd, Robinson & Co. Ltd, INSEAD. He is a member of the Board of Education's International Academic Advisory TPA Strategic Holdings Ltd and Far Eastern Trustees, Courage Fund, the Board of Panel. He is also the Chairman of the SPH Bank Limited. Governors of the Singapore-China Foundation Limited Foundation, as well as a director of SPH In addition, he serves as a board member Foundation Limited. Dr Tan was Deputy Prime Minister and of Land Transport Authority, a member of Co-ordinating Minister for Security & the Council of Presidential Advisers and He has more than 24 years’ experience in Defence before he stepped down from the Chairman of the Singapore Symphonia Co the civil service, spanning the Civil Aviation Cabinet on 1 September 2005. He has Ltd and Singapore-China Foundation Ltd. Department, Ministries of Home Affairs, helmed the Finance, Trade & Industry, He is also a director of Singapore Defence, Foreign Affairs and the Prime Education and Defence ministries. He International Foundation and Chairman of Minister’s Office. Prior to joining SPH, he stepped down from the Cabinet in 1991 Nanyang Fine Arts Foundation Ltd and was the Permanent Secretary, Ministry of to return to the private sector as the NAFA International Pte Ltd. Transport. He was also a Director of DBS Chairman and Chief Executive Officer of Group Holdings Ltd, PSA Corporation Ltd Oversea-Chinese Banking Corporation, Prof Cham holds a Bachelor of Engineering and StarHub Pte Ltd. before rejoining the Cabinet in 1995. (Civil, Hons) from the University of Malaya, a Bachelor of Science (Mathematics, Hons) Mr Chan is a President Scholar and has Dr Tan is a Singapore Government State from the University of London and a been awarded the Public Service Medals Scholar with a First Class Honours in Doctorate of Philosophy (Fluid Mechanics), (Gold and Silver). He graduated from the Physics from the University of Singapore, from Cambridge University. Ecole Nationale de I’Aviation Civile, France an Asia Foundation scholar with a Master and holds an MBA (with distinction) from of Science (Operations Research) from the INSEAD, France. Massachusetts Institute of Technology, and a Research Scholar with a PhD in Applied Mathematics from the University of Adelaide. He was a lecturer in Mathematics in the University of Singapore before joining the Oversea-Chinese Banking Corporation in 1969.

14 // MR WILLIE CHENG JUE HIANG // DR CHEONG CHOONG KONG

Mr Cheng was appointed a director of SPH Dr Cheong was appointed a director of on 1 March 2004. He is also a director of SPH on 1 March 1997. He is also the SPH MediaBoxOffice Pte Ltd, SPH Chairman of Oversea-Chinese Banking Interactive Pte Ltd and SPH Interactive Corporation Ltd, Great Eastern Holdings International Pte Ltd. He currently sits on Ltd, The Great Eastern Life Assurance the boards of NTUC Fairprice Cooperative Co Ltd and the Overseas Assurance Ltd, NTUC Fairprice Foundation Ltd, Corporation Ltd. He was previously the SPRING Singapore and the Accounting Deputy Chairman and Chief Executive & Corporate Regulatory Authority and Officer of Ltd. Singapore Cooperation Enterprise. He is also Chairman of the Singapore Science He holds a Bachelor of Science with First Centre and the Jurong Country Club. Class Honours in Mathematics from the University of Adelaide, a Master of Science Mr Cheng holds a Bachelor of Accountancy and a PhD in Mathematics from the (First Class Honours) from the University of Australian National University in Canberra. Singapore. He is a CPA. He is also a fellow He was Associate Professor and Head of the Singapore Institute of Directors and of the Mathematics Department at the the Singapore Computer Society. University of Malaya before joining Singapore Airlines in 1974.

Dr Cheong was named outstanding Chief Executive in 1996 and Fortune magazine’s 1998 Asia’s Businessman of the Year.

15 BOARD OF DIRECTORS

// MR LEE EK TIENG // MR NGIAM TONG DOW // DR PHILIP PILLAI Mr Lee was appointed a director of SPH Mr Ngiam was appointed to the SPH Board Dr Pillai was appointed a director of SPH on 15 March 2001. He is the Group on 15 March 2001. He is the Chairman of on 5 December 2003. He is a Senior Managing Director of the Government of Surbana Corporation Pte Ltd and a director Partner in the law firm of Shook Lin & Bok, Singapore Investment Corporation Pte Ltd of United Overseas Bank Ltd, Far Eastern Singapore. He is currently a director of and a director of Fraser & Neave Ltd. He Bank Ltd, Yeo Hiap Seng Ltd and Singapore Technologies Engineering Ltd, is also a member of the Temasek Advisory International Medical Insurers Pte Ltd. Singapore Technologies Electronics Ltd, Panel, the Exchange Hotung Investment Holdings Limited and Fellowship and a director of the Lee Kuan He was formerly a director of Temasek Slab Services Private Limited. Yew Scholarship Fund. Holdings (Pte) Ltd, Overseas Union Bank Ltd and Singapore Airlines Ltd. He was formerly Chairman of the Haggai He was previously Chairman of the Public Institute International Board of Trustees, Utilities Board and Mr Ngiam has a distinguished public service Atlanta, a member of the Board of the Pte Ltd, Head of Civil Service and career, having served as Chairman of the Monetary Authority of Singapore, a member Permanent Secretary (Special Duties) in Development Bank of Singapore Ltd, of the Board of Governors, Singapore the Prime Minister’s Office, as well as Housing & Development Board, Central International Foundation and a director Deputy Chairman of the Monetary Authority Provident Fund Board, Economic of Lindeteves-Jacoberg Limited and PT of Singapore. Development Board, Telecommunications Agro Indomas. Authority of Singapore, and Deputy Mr Lee holds a Bachelor’s Degree in Chairman of the Board of Commissioners Dr Pillai holds an LLB First Class Engineering from the University of Malaya of Currency. He was also Permanent Hons (Singapore), LLM (Harvard) and (Singapore) and has a Diploma in Public Secretary of the Prime Minister’s Office, SJD (Harvard). Health Engineering from the University the Ministries of Finance, Trade & Industry, of Newscastle-Upon-Tyne (UK). He is a National Development, and member and Fellow of various professional Communications. engineering bodies in Singapore and overseas. Mr Ngiam holds a Bachelor of Arts (First Class Honors) in Economics from the University of Malaya (Singapore) and Master of Public Administration from Harvard University.

16 // MR SUM SOON LIM // DR YEO NING HONG Mr Sum was appointed to the SPH Board Dr Yeo was appointed to the SPH Board on 5 December 2003. He is currently also on 15 March 2001. He is an Advisor to Far the Chairman of a wholly owned subsidiary, East Organisation and a member of the Times Development Pte Ltd. Keppel Technology Advisory Panel. He also served on several businesses, sports and He sits on the boards of Singapore Health civic organisations, including the Singapore- Services Pte Ltd. and Singapore US Business Council, Singapore Totalisator Technologies Telemedia Pte Ltd. He is also Board/Singapore Symphony Orchestra a Commissoner of P.T. Indosat Tbk. Trust, SEA Games Federation and Singapore National Olympic Council. Mr Sum has worked with the Singapore Economic Development Board, DBS Bank Dr Yeo was a Cabinet Minister and Ltd, J.P. Morgan Inc., Overseas Union Bank served as Minister for Defence, National Ltd, Singapore Technologies, Temasek Development and Communications and Holdings and Nuri Holdings (S) Pte Ltd, a Information. He was previously the Chairman private investment holding company. He of PSA Corporation Ltd, Executive Chairman was previously a director of CapitaLand of the Singapore Technologies Group of Ltd, Chartered Semiconductor Companies, as well as a director of DBS Manufacturing Ltd, GreenDot Capital Pte Bank Ltd and DBS Group Holdings Ltd. Ltd, Chairman of CapitaCommercial Trust Management Ltd, and a member of the Dr Yeo is a Singapore State Scholar, Securities Industry Council. with a B.Sc with first class honours in Chemistry, and an MSc from Singapore Mr Sum received a B.Sc. (Honours) in University, and an MA and PhD from Production Engineering from the University Cambridge University. He also has of Nottingham, England. a distinguished academic record, having been conferred several awards and honorary positions in Singapore and overseas.

17 SPH ORGANISATION STRUCTURE

BOARD OF DIRECTORS

CHIEF EXECUTIVE OFFICER

ENGLISH & CHINESE MALAY MARKETING NEWSPAPER ADMINISTRATION NEWSPAPERS NEWSPAPERS SERVICES

The Straits Times/ Lianhe Classified CORPORATE Zaobao The Sunday Advertisement Production Times COMMUNICATIONS

Lianhe The Display Circulation CORPORATE Wanbao Business Times Advertisement DEVELOPMENT

Customer Shin Min The New Paper FINANCE Daily News Service

Research, Berita Harian/ Analysis & HUMAN My Paper Berita Minggu Planning RESOURCES Department

Product INFORMATION Friday Weekly/ Editorial Development Thumbs Up Support Unit RESOURCE & Branding CENTRE

Cultural INFORMATION Industry New Media Promotion TECHNOLOGY

Special INTERNAL Projects Unit AUDIT

PROPERTIES

SECRETARIAT/ LEGAL

18 SENIOR MANAGEMENT

//MABLE CHAN KAM MAN //CHEONG YIP SENG //MICHAEL CHIN YONG KOK SENIOR VICE-PRESIDENT, EDITOR-IN-CHIEF, ENGLISH AND MALAY EXECUTIVE VICE-PRESIDENT, CORPORATE HUMAN RESOURCES NEWSPAPERS DIVISION DEVELOPMENT & PROPERTIES

Ms Chan has been with SPH since 1997. Mr Cheong has been in journalism for over Mr Chin has been with the Group for 15 She is Senior Vice-President, Human 40 years. years. He is Executive Vice-President of Resources. Before assuming this role in June the Corporate Development Division and 2006, she was Senior Vice-President, In January 1987, he became Editor-in-Chief Properties. He started his career with SPH in Customer Service Department, Marketing of the English & Malay Newspapers Division, Corporate Planning / Business Development Division. a position he holds today. As Editor-in-Chief, Department, and then moved to the Properties he manages four newspapers – The Straits Department. He also held concurrent positions Prior to joining SPH, Ms Chan was the Times, The Business Times, Berita Harian in Production and Human Resources Divisions. Executive Director of the Marketing Institute and The New Paper. of Singapore. Prior to joining SPH, Mr Chin was an engineer He is a non-executive director of SBS Transit at the Public Works Department and a senior She holds a Bachelor of Applied Science Ltd. In 1997, Mr Cheong received the ASEAN manager at Coopers & Lybrand Management degree from the South Australian Institute of Award for Information. He is also a member Consultants. Technology and a Masters in Business of the Board of Trustees, National University Administration from the National University of Singapore. He holds a Bachelor of Science, First Class of Singapore. Honours, University of Manchester, a Master of Science, University of Manchester and a Master of Business Administration from the National University of Singapore.

//CHUA WEE PHONG //PATRICK DANIEL //LESLIE FONG YIN LEONG SENIOR VICE-PRESIDENT, CIRCULATION, MANAGING EDITOR, ENGLISH & MALAY EXECUTIVE VICE-PRESIDENT, MARKETING NEWSPAPER SERVICES DIVISION NEWSPAPERS DIVISION

Mr Chua has been with SPH for 12 years. He Mr Daniel joined SPH as a senior leader/feature Mr Fong went to Trafalgar Primary School and joined Circulation in May 1994 and was writer in 1986. Prior to assuming his current then Raffles Institution. After obtaining his appointed head of the department in May role as Managing Editor of the English & Malay Higher School Certificate, family circumstances 2005. Newspapers Division in September 2002, he made it necessary for him to start working life. was Editor of The Business Times, a position Prior to joining SPH, Mr Chua served in the he held for 10 years. He joined the media He joined The Straits Times in August 1969 Singapore Armed Forces (SAF) for a period after a stint in the Singapore Government’s and has stayed with the company ever since. of 13 years. He was promoted to the rank of Administrative Service, where his last position Between 1983 and 1986, he was seconded Colonel in 2005 and is currently the was Director in the Ministry of Trade and to , where he became commanding officer of a reserve brigade. Industry. its de-facto chief editor. He became editor of The Straits Times in 1987 at the age of 37. Mr Chua gradated from the National University He graduated from University College, Oxford He handed over editorship to Mr Han Fook of Singapore with a Bachelor of Arts (Honours) in 1976 with a Bachelor of Arts with Honours Kwang in September 2002 and became in Sociology on an SAF scholarship. in Engineering Sciences and Economics. He Editor-at-Large with special responsibilities also has a Masters in Public Administration for China. from the Kennedy School of Government, Harvard University. In April 2005, he took over as Head of Marketing Division. 19 SENIOR MANAGEMENT

//HAN FOOK KWANG //ROBIN HU YEE CHENG //ROLAND LAU SIN SOO EDITOR, THE STRAITS TIMES EXECUTIVE VICE-PRESIDENT, CHINESE EXECUTIVE VICE-PRESIDENT, PRODUCTION, NEWSPAPERS DIVISION & NEWSPAPER NEWSPAPER SERVICES DIVISION SERVICES DIVISION

Mr Han was appointed Editor of The Straits Mr Hu was Managing Director of Global Mr Lau is Executive Vice-President, Times in September 2002. Business in ’s wholly-owned National Production. He joined SPH in 1979 as Projects Computer Systems Pte Ltd before he joined Manager tasked to automate the newspaper He joined The Straits Times in February 1989, SPH in February 2004. production operations. In 1986 he held the and was made Political Editor in January position of General Manager, Engineering & 1995, in charge of political coverage in The Between 1995 and 2001, Mr Hu worked in Projects and in 1992 he assumed his role as Straits Times. China initially as EDB’s Regional Director based General Manager, Production. in Suzhou and later as Counsellor (Industry) He graduated from the University of Leeds in in the Singapore Embassy in Beijing before Over the past 27 years Mr Lau has designed, Mechanical Engineering on a Colombo Plan joining the then Nasdaq-listed internet media installed, commissioned and operated the Scholarship. He also holds a Masters in Public company Asiacontent.com Ltd as its Managing newspaper group’s production installations. Administration from Harvard University. Director for China. He began his career at the National Computer Board and held several He holds a Bachelor of Engineering from Mr Han is a member of the Bioethics Advisory management positions over a 13-year period. University of Singapore and a Master of Committee. He was awarded the Pingat Bakti Science, Industrial Engineering and Masyarakat (The Public Service Medal) in Mr Hu received his Bachelor of Science Administration from Cranfield Institute of (Honours) in Mathematics from the University August 2000. Technology, United Kingdom. of Kent at Canterbury and holds a Master of Science in Computer Science from the University of Wales, United Kingdom.

//LIM JIM KOON //GINNEY LIM MAY LING EDITOR, LIANHE ZAOBAO EXECUTIVE VICE-PRESIDENT, LEGAL AND CORPORATE COMMUNICATIONS, AND GROUP COMPANY SECRETARY

Mr Lim has been a journalist for 29 years. Ms Lim is Executive Vice-President, Legal He took over the helm of Lianhe Zaobao in and Corporate Communications, and Group December 1993 and has been its editor since Company Secretary. She is also the General January 1995. Manager of Singapore Press Holdings Foundation Limited. As the person responsible for the overall running of the SPH flagship Chinese-language She joined SPH in December 1991 and paper, he also oversees zaobao.com, the founded the Legal/Secretariat Division. Prior online edition of Lianhe Zaobao. to joining SPH, Ms Lim was heading the Legal & Secretariat and Public Relations department Mr Lim holds a Bachelor of Arts (Honours) in of NTUC Income. Government & Public Administration from Nanyang University, Singapore. Ms Lim holds a Bachelor of Law (Honours) Degree from the National University of Singapore. She is also a Fellow in both the Institute of Chartered Secretaries & Administrators and the Chartered Insurance Institute. 20 //LOH YEW SENG //LOW HUAN PING //QUEK KHIN GEOK CHIEF EXECUTIVE OFFICER, EXECUTIVE VICE-PRESIDENT, TECHNOLOGY VICE-PRESIDENT, INTERNAL AUDIT SPH MAGAZINES PTE LTD

Mr Loh was appointed Chief Executive Officer Mr Low is Executive-Vice President, Ms Quek holds a Bachelor of Accountancy of SPH Magazines Pte Ltd in June 2006. Technology. He has been with the Group for degree from the University of Singapore and He joined SPH in July 2001 and was Vice- 18 years. Previously, he was Chief Executive previously worked in Pricewaterhouse & Co, President of Finance and Chief Financial Officer of SPH AsiaOne Ltd, Chairman of Hong Leong Finance Ltd and Overseas Union Officer for the magazines business group CyberWay Pte Ltd and a director of Singapore Bank Ltd. before his current appointment. Cable Vision Limited. Mr Low is also a director of MobileOne Ltd. Prior to this, Ms Quek was the chief audit Mr Loh began his career in 1994 with Arthur executive of United Engineers Ltd for more Andersen and held notable corporate finance Mr Low started his career at the Ministry of than three years. Defence, where he subsequently headed and financial analyst positions in Banque various IT departments. International à Luxembourg, Van der Horst Apart from more than 15 years in internal Limited and Visa International. Mr Low holds a Bachelor of Arts (Honours) audit, Ms Quek has been involved in external and Master of Arts from Cambridge University, audit, credit marketing and operations, and He holds a Bachelor of Accountancy, Honours where he read Engineering and a Master of retail banking. Ms Quek is a member of the (Second Class, Upper) from Nanyang Science from the University of Singapore. Institute of Internal Auditors and a Fellow of Technological University and has been a He also graduated from Harvard’s Business three professional bodies: the Institute of Chartered Financial Analyst since 1999. School Advanced Management Program. Certified Public Accountants of Singapore (ICPAS), CPA Australia, and ACCA.

//TONY MALLEK //ARTHUR SEET KEONG HOE //SEOW CHOKE MENG EXECUTIVE VICE-PRESIDENT, FINANCE EXECUTIVE-VICE PRESIDENT, EXECUTIVE VICE-PRESIDENT, ADMINISTRATION SPECIAL DUTIES DIVISION CUM CULTURAL INDUSTRY PROMOTION, CHINESE NEWSPAPERS DIVISION

Mr Mallek joined SPH as Senior Vice- Mr Seet is Executive Vice-President, Special Mr Seow has been with the newspaper group President, Finance in June 2003. Prior to this, Duties. He was previously the Executive Vice- for the last 25 years after spending 5 years he was General Manager, Finance for Intraco President of Finance. He held various finance in the airline industry. Ltd. Originally from Hong Kong, he started positions in Times Publishing Berhad and his career in 1978 in the UK and has been Singapore Newspaper Services Pte Ltd, He has held various positions, among which were as General Manager, Human with various U.S. multinationals until 1991 including Financial Controller and General Resource Operations and General Manager, when he was posted to Singapore. Manager, Circulation. Mr Seet has been with Circulation cum General Manager of Chinese the Group for over 30 years. Newspapers Editorial Services Department. His Singapore experience has mainly been in the healthcare industry, including general Mr Seet is a director in MobileOne Ltd. He Mr Seow is currently Executive Vice-President manager positions in finance and business is a Fellow of the Chartered Association of of Administration Division and Cultural Industry development for Parkway Holdings Ltd. Certified Accountants and member of the Promotion of Chinese Newspapers. Apart Institute of Certified Public Accountants of from serving in Grassroots organisations, he Mr Mallek holds a Bachelor of Technology Singapore. is also a member of the National Arts Council and the Promote Mandarin Council. (Honours) in Operations Management from Bradford University and is a Fellow of the Mr Seow graduated from the University of Chartered Institute of Management Singapore with a Bachelor of Science Accountants. (Honours) degree. 21 CEO’S OVERVIEW OF GROUP OPERATIONS

The past year has been one of many

22 with the group achieving continued growth in its core newspaper business.

23 CEO’S OVERVIEW OF GROUP OPERATIONS

time high circulation of 425,819 copies on May 7th when the 2006 general election results were published. Tamil Murasu's weekday and Sunday editions also chalked up new records of 19,314 and 20,493 copies on May 12th and 14th respectively with reports on the Tamil Nadu elections.

The gains in average daily sales were built on editorial quality, aided by a variety of marketing efforts – from subscription campaigns to loyalty programmes. Among the significant campaigns was the schools programme, which resulted in 20 percent growth in overall school subscriptions to 300,000 copies a week to 281 schools and involving papers of all four languages. SPH reading corners were also set up at universities and polytechnics. PH’s revenue topped as a premier multimedia provider of content the billion dollar mark for and services. The special highlight in the year was the second straight year. the launch and distribution of 120,000 daily S Group operating revenue SPH newspapers and magazines won copies of My Paper ( ). To develop increased 1.4 percent to numerous awards in 2006 for editorial the paper’s branding and reader loyalty, $1,021.4 million. Revenue for the core excellence. In addition, the group won print a My Paper ( ) readership club was newspaper and magazine operations quality awards, with four of its papers – started, serving as a platform for readers grew 1.7 percent to $907 million while the The Straits Times, Lianhe Zaobao, The to interact among themselves and also property segment rose 10.4 percent Business Times and Berita Harian – earning with advertisers. to $98.7 million. the distinction of becoming members of the prestigious International Newspaper In tandem with SPH’s aim to become a More significantly, SPH strengthened Color Quality Club. leading publisher, we strengthened our its position in the newspaper market position as a one-stop distribution service by launching Singapore’s first Circulation for publishers. We distributed a monthly Chinese-language free newspaper, The average daily circulation of SPH average of 800,000 copies of magazines, My Paper ( ) on June 1st, aimed at newspapers grew by 1.2 percent to offering a full suite of value-added services Singapore’s growing number of 1.044 million, led by the group's flagship, such as telemarketing and promotional bilingual readers in the 20-40 age group. The Straits Times. This is a creditable campaigns. At the same time, The Straits Times, the achievement at a time when newspapers group’s English-language flagship, launched the world over have seen continued Sales and Marketing a new online product, STOMP (Straits shrinking sales. The group’s minority The group’s print advertising revenue hit Times Online Mobile Print), to connect, papers, Berita Harian and Tamil Murasu, $676.3 million. This was achieved despite engage and interact with a new generation turned in outstanding circulation the challenging trends in the advertising of tech-savvy readers. gains of 3.9 percent and 12.5 percent market. The performance was boosted in respectively. part by a rate increase in the financial year SPH also made several key investments for four titles – The Straits Times, The in outdoor advertising, online classifieds Several papers set new records for daily Sunday Times, Lianhe Wanbao and Shin and radio to position itself for future growth sales. The Sunday Times achieved an all- Min Daily News.

24 The top revenue contributors were the upscale residential condominium will be commitment and dedication have enabled group’s two flagships, The Straits Times launched in 2007. the group to maintain its competitive edge and Lianhe Zaobao, followed by The as we compete in a fast changing media Sunday Times, Lianhe Wanbao and The Radio landscape. I would also like to express New Paper. SPH’s radio joint venture with NTUC Media appreciation to the Board for providing was renamed SPH UnionWorks in July, strategic guidance and sound advice The Marketing Division also began to following an increase in SPH’s stake from especially in our new initiatives and overseas promote integrated marketing solutions to 50 percent to 70 percent. The two stations, investments. Also to our clients, advertisers. The aim is to offer solutions originally called UFM 100.3 (the Chinese- shareholders, business associates, readers, incorporating a wider range of the group’s language station) and WKRZ 91.3 (English- vendors and unions, a big thank you for products – newspapers, online websites, language station) were also renamed Radio the loyal support all these years. magazines, outdoor media and radio. In 100.3 and Radio 91.3 respectively. addition, several platforms were introduced We expect the coming year to be a to give greater value to advertisers, including Radio 100.3 continues to be successful, challenging one as the newspaper industry zonal tabloid supplements and the while Radio 91.3 was relaunched after a competes in a maturing market. Business New Market page in The Straits Times’ major revamp. With an exciting new lineup and consumer sentiments remain shaped Home section and in Lianhe Zaobao of radio veterans, the English-language by concerns over the geopolitical and global every Monday, covering new events and channel now has a new music selection economic environment in areas such as product launches. and a revamped format, targeted at listeners pressure on oil prices, rising interest rates, aged 25-44. threats of terrorism and an avian flu To brand our products and boost reader pandemic. Nevertheless, the healthy loyalty, events were organized for The Straits SPH UnionWorks’ stations have also begun outlook for the Singapore economy provides Times’ weekly magazines – Digital Life, to tap the group’s newsrooms, with daily good prospects for a positive boost to Urban and Mind Your Body – as well as news broadcasts from the various advertising expenditure. Shin Min Daily News’ Children’s Day newspapers and effective cross-marketing Carnival, Lianhe Wanbao’s Health and of products and events. By working closely together as a united Wellness Fair and the last The New Paper team, I am confident that we have Big Walk to be held at the National Stadium. Investment Income what it takes to bring SPH to new heights Group investment income at $81.7 million both in Singapore as well as in our Property was $166.9 million lower than last year. regional aspirations. The group’s main property asset, Paragon, Excluding one-time gain of $128.5 million continued to enjoy 100 percent occupancy which arose from the disposal of the in its retail, office and medical space and Group’s interest in StarHub and $12.8 yielded about 9 percent return on equity. million income arising from capital reduction of an investee company last year, the Together with on-going efforts to enhance balance $25.6 million of the variance was rental yields, the fundamentals of Paragon mainly attributable to decreases in remain strong. In view of this, the Directors contribution from externally-managed are committed to holding on to Paragon investments and profit on sale of internally- for the foreseeable future. managed investments partially offset by increase in dividend income received. The group also took the decision to develop the Times Industrial Building site into a 43- Acknowledgements storey up-market condominium, as this I would like to thank the management and was judged to be a more attractive financial staff for putting in their best effort in creating CHAN HENG LOON ALAN option than an outright sale of the site. The value and growing the company. Their CHIEF EXECUTIVE OFFICER

25 Newspapers THE STRAITS TIMES REMAINS OUR FLAGSHIP ENGLISH-LANGUAGE NEWSPAPER

ST MAINTAINED ITS MASS REACH OF 1.325 MILLION READERS – BY FAR THE LARGEST IN SINGAPORE – AND EXTENDED ITS MEDIAN READING TIME TO 41 MINUTES.

he Straits Times (ST), the group’s oldest and most profitable product, continued to grow in strength, despite being confronted by many new competitive T threats. ST maintained its mass reach of 1.325 million readers – by far the largest in Singapore – and extended its median reading time to 41 minutes. Sales of ST to schools, aided by its special supplements for young readers, Little Red Dot and IN, pushed up average weekday daily circulation to 389,000. The Sunday Times ended the year by crossing the 400,000 mark, again bucking the international trend of declining newspaper sales and readership.

ST built on these circulation gains by launching a bold new website, STOMP – short for Straits Times Online Mobile Print – to engage readers through all three platforms. The new free website sits alongside The Straits Times Interactive, the paper’s subscription website. With reader engagement the main aim, STOMP is rich with features like Talkback, Star Blog and Snapshots, as well as the community-building ST Foodie Club and ST Digital Club.

Our other English and Malay-language papers – The New Paper (TNP), The Business Times (BT) and Berita Harian (BH) – also revamped their products and boosted their offerings to readers. In addition to colour printing awards, these publications won awards for editorial excellence from international bodies such as IFRA, the newspaper industry association, and the Society of Publishers in

26 Asia (SOPA). The papers’ journalists were also recognised for households and at public outlets such as MRT stations. The paper public service journalism, scoops, photography and infographics. encourages readers to keep in touch with the Chinese language in an enjoyable and interactive way, allowing them to take part in The English and Malay Newspapers Division (EMND) also continued shaping its content. its diverse public service activities. The ST School Pocket Money Fund raised $3.2 million to help 10,000 needy school children with Another highlight was the launch of UW, Singapore’s first hybrid their meals and transport to school. ST and BT jointly organised news magazine encompassing entertainment, lifestyle and social ChildAid, a concert to showcase the nation’s best young musical news. This was born after the four-year old You-Weekly underwent talents and to raise money for the ST School Pocket Money Fund a revamp. and the BT Budding Artists Fund. ST Life! also presented the annual Life! Theatre Awards, while BT launched the Singapore Corporate The Chinese Newspapers Division (CND) also strengthened SPH’s Awards for listed companies. TNP, for its part, held its popular position in Chinese-language publishing by securing several new annual TNP Big Walk and TNP New Face events, while BH presented contract-publishing titles from the Economic Development Board, the Achiever of the Year in the Malay/Muslim community. Singapore Tourist Board, Ang Mo Kio Town Council, Feedback Unit and the Singapore Chinese Chamber of Commerce and Another significant project launched in the year was the migration Industry. In addition, it published several books: Lianhe Wanbao’s of EMND's editorial systems to new platforms – the Unisys – editing second volume of its “Guide to Well-Being”; Shin Min Daily News’ and layout system and IBM’s archive and photo system. The “History and Culture of Chinese Temples in Singapore”; and Lianhe implementation will continue into the new financial year. Zaobao’s “The Art of Wine Appreciation”, Singapore's first Chinese- language guide on wines. The group’s Chinese-language papers also had an exciting year. The most significant event was the June 1st launch of My Paper CND continued its active programme of events to promote the ( ), the free tabloid designed for young adults aged between appreciation of the Chinese language, culture and heritage. Aside 20 and 40 who are more proficient in English but keen to improve from the annual Singapore River Hongbao, another highlight was their level of literacy in Mandarin. Published on Tuesdays to the month-long 2006 Chinese Cultural Festival which featured 123 Saturdays, some 120,000 copies are distributed to selected events showcasing the myriad elements of Chinese culture.

27 Launch of FREE CHINESE NEWSPAPER

28 My Paper

THE LAUNCH OF THE FULL-COLOUR TABLOID COMPLEMENTS SPH’S STABLE OF CHINESE-LANGUAGE NEWSPAPERS – LIANHE ZAOBAO, THE GROUP’S CHINESE-LANGUAGE FLAGSHIP DAILY, AND THE TWO EVENING NEWSPAPERS, LIANHE WANBAO AND SHIN MIN DAILY NEWS.

ingapore’s first Chinese-language free newspaper stay in touch with the Chinese language in a relaxed and My Paper ( ), aimed at bilingual, young adults enjoyable way. aged 20-40 years who have been exposed to S Western and Chinese cultures was launched on As the name suggests, My Paper’s ( ) uniqueness lies in June 1st, 2006. embracing readers’ involvement in shaping the product. Indeed, the paper’s blue masthead was chosen by advertisers and the Published every week from Tuesdays to Saturdays except public public. They picked it from three designs, by casting more than holidays, and with a circulation of 120,000, My Paper ( ) is 36,000 votes at trade shows and via the Internet and SMS. distributed at MRT stations in the city, bus interchanges, offices, institutions, airlines, country clubs, selected households and The paper’s tagline, “My Life, My Thoughts, My Say”, encapsulates selected coffee outlets on Saturdays. the editorial philosophy of reader empowerment. Readers participate in the creation of news content. They can contribute short The launch of the full-colour tabloid complements SPH’s stable articles, join reporters in conducting interviews, share their opinions of Chinese-language newspapers – Lianhe Zaobao, the and vote for their favourite cover every week. They are also invited group’s Chinese-language flagship daily, and the two evening to correspond with the editorial team via the paper's website at newspapers, Lianhe Wanbao and Shin Min Daily News. These www.mypaper.sg. newspapers now cover different time-belts, using language suited for different target audiences. The website also carries blogs of My Paper’s editorial team, which is made up of a group of dynamic journalists with an average age The launch of My Paper ( ) also underlines SPH’s commitment of 30 years. Led by Editor Goh Sin Teck and Associate Editor to promoting and preserving multilingualism and proficiency in our Chua Chim Kang, the paper has an editorial staff of 25. mother tongues. My Paper has met with enthusiasm from readers who like it as a My Paper ( ) covers urban life-trends and entertainment, 20-minute read. Many have also commented that the paper helped as well as news, views and analyses relevant to young them to get back to reading Chinese. Indeed, one of the objectives working adults, and in a snappy, easy-to-read format. Certain of this new free paper is to incubate a new group of young readers items are presented in English to allow bilingual readers to who can become future readers of Chinese-language papers.

29 Magazines

30 Simply Irresistible SPH Magazines continues to dominate the market with flying colours

PH Magazines Women’s lifestyle magazine market. a highly successful all-women run for strengthened its position as In a subscription drive to boost its its readers. the leading magazine readership base, Simply Her, a newly S publisher in Singapore and launched women’s lifestyle title, made 2006 is also a good year for new the region. With the women’s magazine history with more magazines with Icon, Maxim and Simply acquisition of Blu Inc and Magazines Inc than 21, 000 new subscribers in less Her celebrating their first anniversaries completed and the publishing of than 2 months. with events, parties and reader several new titles into their second year, promotions. SPH Magazines also the SPH Magazines Group focused The latest MCS Circulation audit, completed integrating the operations on consolidating its operations, harnessing combined with ACNielsen Media Index of FiRST, its newly acquired movie synergy to enhance profit margins and 2005 figures, also placed Her World as magazine. further increase its revenue. Several the No.1 women’s magazine and Citta collaborative marketing activities were Bella the No.1 Chinese language women’s Overseas, SPH Magazines continued initiated within the SPH Magazines Group. magazine in Singapore. Shape, a relatively to work closely with partners to The Company also integrated certain new title that was launched just 2 years develop and expand the reach of its backend support functions with SPH ago, is Singapore’s top active lifestyle titles. SPH Magazines launched Men’s and streamlined its operating policies guide for women. Health in Thailand under its joint and procedures to also ensure good venture company, Traffic Corner corporate governance. The year also saw some significant events. Publishing Co Ltd. Her World celebrated its 45th anniversary SPH Magazines’ titles garnered with four and a half months of celebrations The year is also a significant period recognition for quality, winning awards and reader promotions. In an effort to for the SPH Magazines Group. CEO locally and internationally. Her World, reach out to a wider segment of readers, Mr David Tay retired in June 2006 Singapore’s best selling and most widely it successfully organised its first ever after 27 sterling years of service with read women’s magazine, received a Silver women’s golf event. Held in June 2006 the SPH Group, of which the last award for magazine design at the at the Sentosa Golf Club, the event 15 years was spent in building up prestigious IFRA Asia Media Awards 2006. offering attractive prizes from sponsors SPH Magazines. Her World and Shape took home a gold received overwhelming response. Nuyou, and silver award respectively at the 3rd Singapore’s leading Chinese women’s Taking over as the group’s new CEO is Asian Print Awards 2005. FiRST magazine magazine, celebrated its 30th Anniversary young and dynamic Mr Loh Yew Seng. also won a SOPA 2006 award for with a photo exhibition and charity T-shirt Mr Loh is primed and committed to take excellence in magazine front cover design. auction designed by 34 local and regional SPH Magazines to greater heights and celebrities. And in July 2006, Shape transform it into the region’s Publisher of In addition, SPH Magazines continued celebrated its 2nd anniversary by Choice. to strengthen its foothold in the local organising for the first time in Singapore,

31 Online and New Media

Online and New Media

ST701 PH’s online job portal, ST701, went live in March 2006. Its name reflects its accessibility as a one-stop location for users, seven days a week, S while at the same time, maintaining its roots in The Straits Times, which has a thriving, popular and credible newspaper-based Classified jobs marketplace.

From the first day, the site has attracted job postings and job seekers. The site has since grown at a steady rate with 20,000 registered candidates in just four months and with total page views crossing the two-million mark. More than 1,000 fresh jobs are advertised daily.

ST701’S STRENGTH IS THAT IT ALSO ST701’s strength is that it also provides a variety of services – job PROVIDES A VARIETY OF SERVICES matching, job tracking, resume building, database management – JOB MATCHING, JOB TRACKING, and human resource management tools. RESUME BUILDING, DATABASE Those who register can complete application forms online, post MANAGEMENT AND HUMAN a variety of resumes targeting different employers, be automatically RESOURCE MANAGEMENT TOOLS. matched with suitable employers, and receive alerts about new job postings.

Employers can use the site’s human resource management features and the job-matching engine, to hire more quickly and efficiently.

32 With ST701, SPH now offers an attractive dual-platform print While viewers do not have to pay to view AsiaOne content, many and online package to advertisers who wish to make an impact do so for the privilege of accessing The Straits Times Interactive in both marketplaces. (STI) and Business Times Online (BTO). The paid subscriptions for these two have crossed the 20,000 mark. Vodcasts are available Internet Business Unit on these sites too. The challenge is to continue identifying and While ST701 is a new entry into the online world, SPH’s Internet reaching individuals and organisations that find added value in Business Unit has been developing multiple revenue streams for subscribing to the online newspaper in addition to the printed some years. version.

These include online advertising, subscriptions and archival/ SPH Mobile News intellectual property licensing. SPH Mobile News is now offered to mobile phone users. This service is available on WAP-enabled mobile phones of all three Online advertising revenue has risen steadily, with a 20 percent major service providers (SingTel, and StarHub). Mobile phone increase compared to the previous year. Key Internet traffic indicators users can subscribe to The Straits Times, The Business Times, for our sites, like pageviews, unique visitors and average time Chinese News, Lifestyle News, and Breaking News, thus staying spent, are healthy and provide good incentives for advertising updated while on the move. support to continue growing. SPH News Channel New interest-specific lifestyle sites like AsiaOne Health, Since August 2006, vodcasts available on our web portals have AsiaOne Motoring, AsiaOne Travel and AsiaOne Just Woman been re-packaged as content for the SPH News Channel, a new are being developed. These augment AsiaOne’s inherent information and lifestyle channel offered on a non-exclusive basis strength in providing news, with relevant lifestyle information to players in the Broadband TV industry. The first to take advantage that fits the working executive’s needs. They also provide of this service is M2B. conducive and relevant platforms for related advertising sectors.

33 STOMP

STOMP was born out of a real desire by The Straits Times to connect, engage and interact with readers. In this day and age when information flow is hardly linear, The Straits Times is well aware that its readers want to be part of the process.

he website has made it as themselves to find out more about each An important feature that STOMP has easy for readers to reach us other. Discussion threads have sprung up set up for The Straits Times newsroom is as it is for us to reach them. on their own accord with calls to meet and what’s refered to as the ‘Straits Times T ‘STOMP’ in full says it all – for the like-minded to gather. Gateway’. It is a portal that takes in smses Straits Times Online Mobile and mmses that come in through our Print . We can connect with you and you STOMP, too, has played a conscious ‘magic’ number, 75557. The number is with us through the net, through the phone part in community building. Currently also the base of our email address and and through the newspaper. we have two online clubs,the ST Foodie hotline number. Club and the ST Digital Club, which tap With interactivity as STOMP’s key aim, it’s Singaporeans’ love for bites and bytes. The news tips and reactions to stories little wonder that the top features of the site that we’ve received through 75557 have are those which encourage just that. Among the wide offerings on the website energised us and our print colleagues. Talkback, our discussion forum segment, is STOMPcast featuring original videos Pictures, videos and text messages alerting Snapshots, our gallery with photographs (we prefer to call them e-flicks) produced us to what is happening around town, on a variety of things close to the hearts of by our own team of producers. The and what’s important to ST readers have Singaporean, and the highly popular Star majority of the e-flicks focus on the exciting been enlightening. Even as we push out Blog are constantly top of the ratings. It is ways in which young people express material to our readers, they are telling worth noting that the term ‘star blogger’ is themselves. The local indie music us the shape and form of what they’d like fast gaining currency, a great boon to us scene, Cosplay and poetry slams are all it to take. as STOMP is keen to hold some sway over about voices that want to be heard and the way Singaporeans express what's counted. STOMP is only several months old. But as important to them. a complement to ST, the 161-year-old STOMPers are able to tell us what they like grand dame, we have been able to punch The strong desire amongst ST readers to (and don’t like!) about our representation above our weight and take on an be engaged by us, and just as important, of their views as all the elements have importance to Singaporeans that would to engage us, has also gone a long way discussion threads linked to them. We get normally have taken far longer. For the in helping us build online communities. That our fair share of ‘Great work, STOMP’ and paper, where we are not a mirror, but a impulse has sparked spontaneity among ‘What are you talking about, STOMP?’ and new persona out of its parentage, we have STOMPers (as STOMP users are so fondly love them all. Nothing worse than refreshed its relevance and helped it occupy called) as they make efforts among indifference! a space that cannot be denied.

34 Nick Fang

Jaymee Ong Joe Augustin

Ju-Len

Choy

Dawn Yang

May

35 Strategic Investments in Outdoor Media

SPH MediaBoxOffice screens at the Singapore Turf Club and PH’s move into the outdoor POSBank branches. SPH is also working advertising market enjoyed hard to enlarge its share of the static a good start. SPH billboard market, despite the lack of S MediaBoxOffice (SPH MBO) exclusive sites. posted a 70 percent increase in revenues compared to the previous Events management is another area in year. New key staff were appointed, which SPH MBO made progress during and processes streamlined, to the year. It is leveraging on an increasing consolidate SPH MBO’s position as demand from advertisers for road shows the market leader. and product launches to support their advertising campaigns. It is also In addition to its large LED display screens collaborating with the Singapore Tourism at four strategic locations – Raffles Board and the Business Place, Orchard Road, and Association to market event booths along Woodlands – SPH MBO has extended its the Orchard Road walkway during the motion display network through small Christmas light-up period.

36 Outdoor Media

WITH SUBSIDIARIES IN 16 MAJOR CITIES, OMG OFFERS AN EXTENSIVE, WHOLLY-OWNED OUTDOOR MEDIA NETWORK COVERING OVER 300,000 SQUARE METRES OF ADVERTISING SPACE IN NEARLY 60 MAJOR CITIES IN CHINA AND PROVIDES AGENCY SERVICES TO MORE THAN 100 CITIES.

OMG The comprehensive range of options Nokia, IBM, Coca-Cola, Philips, Shortly after SPH’s entry into the Singapore OMG offers to clients includes unipoles, Volkswagen, etc. outdoor media market, expansion was made billboards, street furniture and bus into China with the acquisition of a 35 shelters. OMG's billboard and unipoles As a hallmark of its past performance, percent stake in TOM Outdoor Media Group network, comprising 85 percent of its OMG has successively won 247 national (OMG) in March 2006. The acquisition has total advertising space, is the largest network awards and 17 patents, making it the significant strategic value to SPH, in mainland China. top award-winning outdoor media company representing a scarce opportunity to gain on the mainland. In 2005, OMG won a scale presence into the largest outdoor A whole range of services covering outdoor the Gold Award among the Golden 10 media market in Asia, outside Japan. media coverage, innovative designs and Cases recommended by the Second Case tailor-made solutions is available to enhance Award of ADMEN China. It was also With subsidiaries in 16 major cities, OMG brand awareness and promote sales for the only Chinese company to be awarded offers an extensive, wholly-owned outdoor clients. OMG’s high service quality is as one of the Top Five Most Influential media network covering over 300,000 evidenced by the 95 percent service Advertising Company in Mainland square metres of advertising space in nearly excellence rating from its 3,000-strong China by the 2005 Influence on China 60 major cities in China and provides client base, which includes a number of Award Ceremony. agency services to more than 100 cities. international brands like Samsung, Motorola,

37 CORPORATE SOCIAL RESPONSIBILITY

12

1. The JazzKids performing at the inaugural 34ChildAid concert 2005

2. Dancers from Chongqing Song and Dance Troupe goes on show at the Singapore River Hongbao

3.The Singapore Zoo’s Wildlife Buddies helping to spread the conservation message

4. The New Paper’s Be Yourself Day at Bedok View Secondary School sees students and teachers dressed as Snow White and the seven dwarfs

Investing in Corporate Philanthropy their popular classics to the delight of residents at Seng Kang, Corporate citizenry is one of SPH’s core values because we believe Geylang Serai and Tampines. An outdoor concert featuring local that we have a responsibility to do our part in the community we bands and foreign acts was also staged at the Singapore Botanic operate in. Gardens.

To demonstrate its corporate citizenry efforts, SPH set up the The Company’s support for the local arts scene is also evident Singapore Press Holdings Foundation in 2003 with a seed from its sponsorship of the annual 24-Hour Playwriting Competition contribution of $20 million. Although it is a registered charity and and Singapore Young Dramatists Awards which are part of the an Institution of Public Character (IPC), SPH Foundation does not Writers Laboratory by TheatreWorks providing a platform for solicit for public donations, but relies solely on the returns generated aspiring scriptwriters to showcase their creativity. from investments to support a wide array of activities. Loving and Protecting the Environment around Us Building a Vibrant Community through the Arts SPH supports wildlife conservation through the adoption of In the financial year under review, SPH’s contributions to the endangered animals such as Inuka, the polar bear and sponsorship Singapore arts scene were once again recognised with the of the SPH Conservation Centre at the Singapore Zoo which Distinguished Patron of the Arts Award from the National Arts houses the endangered Proboscis Monkeys from Borneo. SPH Council. SPH has received this prestigious award consecutively also adopted the popular Birds n Buddies show, the Caribbean since 1993, which is a testimony of our commitment to nurture Flamingos and Samson the Golden Eagle at the Birds of Prey local talent and to boost Singaporeans’ appreciation of the arts. exhibit at the Jurong Bird Park.

SPH also sponsored Quest, the opening performance at this year’s As part of its conservation efforts, the SPH Conservation Singapore Arts Festival which was one of the better-received local Ambassadors and Wildlife Buddies programme initiated in 2004 productions. Quest marked the first collaboration between trains students as guides to introduce selected exhibits to zoo Singapore’s two flagship arts companies – Singapore Dance visitors. Through this programme, both visitors and student guides Theatre and Singapore Chinese Orchestra. get a chance to learn more about the importance of conservation and protecting endangered animals, and help guides boost their Back for a second season, the SPH Gift of Music (GOM) tied up self-confidence in public speaking. with the Singapore Chinese Orchestra’s Caring Series to bring concerts to the hospitals and a hospice for the first time in 2006. Other conservation efforts also include sponsorship of SPH Patients and caregivers from Tan Tock Seng Hospital, Kwong Wai Foundation Solar Innovations 2006, an annual competition for Shiu Hospital and St Luke’s Hospital were treated to light Chinese primary, secondary and tertiary students to promote and build a classical music. more environmentally-friendly Singapore through projects, prototypes or proposal papers as well as partnership with National Parks to The SPH GOM series also brought the renowned Singapore devise tailor-made nature appreciation projects for children with Symphony Orchestra (SSO) to the heartlands. The SSO played special needs.

38 5. The SSO performs at Geylang Serai in a SPH Gift of Music series concert

6. Students demonstrating their environmentally-friendly invention at the SPH Foundation Solar Innovations competition

7. SPH Chairman Dr Tony Tan receiving a token of appreciation for SPH’s donation to needy children

5 6 8. A scene from Quest – the 2006 Singapore Arts Festival’s opening act sponsored by SPH

7 8

Supporting the Community and the Underprivileged For example, the inaugural ChildAid concert in December 2005 To promote and encourage reading, SPH set up dedicated reading was a concert with a difference. In support of The Straits Times corners in tertiary institutions, and organised a conference for School Pocket Money Fund and The Business Times Budding parents on how to develop a love for reading from a young age. Artists Fund, the two newspapers rallied young performers to volunteer and raise funds for needy children through the concert, For the third consecutive year, SPH made a group donation of which received overwhelming response. $200,000 to charity. Unlike the past two years, SPH chose to focus on charities serving the disabled community as it believes Organised by SPH’s three Chinese-language newspapers, Lianhe disability does not mean inability. In addition, SPH Foundation has Zaobao, Shin Min Daily News and Lianhe Wanbao, the Singapore also been extending its support to children from low-income families River Hongbao continues to be an event to look forward to by as well as those with special needs with an annual donation of many Singaporeans, old and young, where one can learn about $200,000 for the last two years. the Chinese language, arts and culture.

Besides appealing for blood donations for the Singapore Red Riding on the World Cup fever this year, The Business Times Cross, this year’s Red Apple Day included a call for bone marrow partnered Philips to organise the BT-Philips World Cup Fund where donors. While more than half of the participants were SPH staff, senior executives from 32 organisations helped raise funds for the the event also drew encouraging response from companies and programme, Food from the Heart. residents operating and living in Toa Payoh. Staff from Orchard 290, the owner and manager of Paragon, As a strong believer of leading by example, SPH continues to became “Staff for a Day” with one of their key tenants, Marks & match its employees’ monthly contributions dollar-for-dollar for the Spencer, to raise funds for victims of the earthquake in central Community Chest SHARE programme since it was introduced in Java in May this year. 1988. SPH and its employees contribute more than $120,000 to the SHARE programme annually. In its pursuit to generate better returns for its shareholders, SPH is equally aware of the need to develop the heartware of Rallying Support for Worthy Causes the Company and its staff. With this in mind, corporate citizenry Recognising the need to increase social awareness in the will always remain a core value for SPH because we believe community, SPH leverages on its media reach and network to that it is only when the community benefits, that the Company raise funds for the President’s Challenge every year to support can continue to thrive in the highly-competitive and needy individuals through events such as the iconic The New fast-paced Singapore. Paper Be Yourself Day and zPop Charity Concert.

Apart from the contributions made at its corporate level, our newspapers and subsidiaries initiated and executed their own innovative philanthropic activities to support worthy causes.

39 SIGNIFICANT EVENTS

October 12, 2005 SPH wins the Most Transparent Company award and The Straits Times’ Lee Su Shyan clinches the Financial Journalist of the Year award at the 6th SIAS Investors’ Choice Awards 2005. The Straits Times’ Lorna Tan, Azrin Asmani and Susan Long as well as The Business Times’ Teh Hooi Ling also take home awards for financial journalism.

September 13, 2005 November 20, 2005 The National Arts Council once again A main sponsor of Asia’s premier confers the Distinguished Patron of advertising and communications the Arts award to SPH for its unstinting conference, AdAsia 2005, which returns support for the promotion and to Singapore after 25 years, SPH also organisation of artistic activities. SPH hosts the 1,200 delegates to an opening has received this award every year dinner that includes a preview of the since 1993. famous Paris cabaret Crazy Horse.

December 7 & 8, January 23, 2006 2005 About 700 of Singapore’s movers and ChildAid, the charity concert shakers from the world of the arts, organised by The Straits entertainment and lifestyle turns up for Times and The Business The Straits Times Life! party at the Times, raises over $300,000 Crazy Horse Paris in Clarke Quay. This for two charities, The Straits annual event is to thank newsmakers Times School Pocket Money and contacts for their help during the Fund and The Business Times year, and to allow guests from across Budding Artists Fund. industries to mingle.

February 24, 2006 For the third year running, Lianhe Zaobao zbNOW presents the prestigious Glamour Quest 2006, in conjunction with Shanghai International Modelling Contest, China’s biggest modelling event.

40 April 24, 2006 SPH kicks off the second season of its Gift of Music series with the Singapore Chinese March 7, 2006 Orchestra (SCO) staging The Business Times organises the a performance at the inaugural Singapore Corporate Awards Tan Tock Seng Hospital at the Raffles City Convention Centre. atrium. Besides six The event seeks to recognise excellent concerts by the SCO at hospitals and a hospice, the second season of the SPH boards, annual reports, chief financial Gift of Music also includes two Singapore Symphony Orchestra concerts in the officers and investor relations heartlands and one Latin extravaganza at the Botanic Gardens. practices.

May 10, 2006 SPH organises another record Red Apple Day blood donation drive, with an unprecedented 336 people stepping forward to help save lives. For the first time, the SPH Red Apple Day extends its helping hand beyond blood donations to include bone marrow donor registrations. 209 units of blood are collected and 154 persons register as bone marrow donors.

June 1, 2006 SPH launches Singapore’s first Chinese language freesheet – My Paper ( ) with road shows at Raffles Place Park and Caltex House. With a circulation of 120,000 copies, the publication is distributed from Tuesdays to Saturdays at MRT stations, selected office buildings, business parks, households as well as established coffee franchises across the island. July 16, 2006 SPH Magazines’ health magazine for women, Shape, organises Singapore’s August 21, 2006 first women-only race at the Marina For the third successive year, SPH Promenade. Shape Run, which donates $200,000 to 20 charities attracts more than 4,000 applications and for the first time gives its support but for safety reasons only 2,500 to programmes serving the needs runners make it to the starting line, is of the disabled. Chairman Dr Tony also a celebration of Shape’s second Tan presents the cheque to Ms anniversary in Singapore. Jennie Chua, Chairman of the Community Chest, who receives it on behalf of the more than 5,000 disabled to benefit from the donation.

41 AWARDS & ACCOLADES

OCTOBER 2005 Classified Advertising, Revenue Generating Most Effective Use of Colour (Circulation over SIAS 6th Investors’ Choice Awards Classified Event (Circulation 75,000 – 250,000 50,000) – Winner (Chinese Newspapers Division circulation) - Award of Merit (The New Paper – Children's Day Carnival Advertisement) Most Transparent Company Wedding Planner 2005) (Non-Electronics Manufacturing) Best Tactical Use of Newspaper In House (Circulation of 15,000 - 50,000) – Highly Best Financial Journalist of the Year MARCH 2006 Commended (Lianhe Zaobao – Singapore (Lee Su Shyan, The Straits Times) International Newspaper Color Quality Club Promising Brand Awards Campaign) (2006 to 2008) Best Financial Story of the Year Best Campaign (Circulation over 50,000) – Highly (Lorna Tan, The Straits Times) The Straits Times Commended (The New Paper – The New Face Call-For-Entry Advertisements) Most Promising Financial Journalist The Business Times (Azrin Asmani, The Straits Times) Advertising Feature of Supplement (Circulation Lianhe Zaobao over 50,000) – Finalist (SPH Classified Most Promising Financial Journalist Department – Young Classified) (Lim Keng Soon, Lianhe Zaobao) Berita Harian

Special Award 71st INMA Newspaper Marketing Awards (Susan Long, The Straits Times) APRIL 2006 5th IFRA Asia Media Awards Public Relations Programmes & Events Special Award (Circulation over 300,000) – First Place (The (Teh Hooi Ling, The Business Times) Asian Newspaper Colour Quality Award Straits Times – CATS New Logo Launch) (Weekday Circulation over 100,000) – Bronze (The Straits Times) NOVEMBER 2005 MAY 2006 Excellent Service Awards Asian Newspaper Colour Quality Award SOPA Awards for Editorial Excellence (Weekday Circulation below 100,000) Superstar and Star Awards – Gold (Berita Harian) Excellence in Feature Photography (Linna Tan, Classified Advertisements) – Winner (The Straits Times) Asian Newspaper Colour Quality Award Gold Award (Weekday Circulation below 100,000) Excellence in News Photography (Lynn Wong, Classified Advertisements) – Silver (The Business Times) – Honorable Mention (The Straits Times)

Best in Newspaper Infographics Excellence in Public Service Journalism DECEMBER 2005 (Non-Breaking News; Circulation over 100,000) – Honorable Mention (The Straits Times) 3rd Asian Print Awards – Bronze (The Straits Times) The Scoop Award Web Offset (Coated Stock) Best in Photography (General News) – Winner (The New Paper) – Gold (Her World) – Bronze (Wang Hui Fen, The Straits Times) Excellence in Newspaper Design Web Offset (Coated Stock) Best in Photography (Feature Photography) – Honorable Mention (The Straits Times) – Silver (Shape) – Gold (Wang Hui Fen, The Straits Times) Excellence in Magazine Front Cover Design Best in Photography (Feature Photography) – Honorable Mention (FiRST!) FEBRUARY 2006 – Silver (Terence Tan, The Straits Times) Hitwise Online Performance Awards Best in Photography (Feature Photography) AUGUST 2006 News and Media (Print) – Bronze (Mohd Ishak, The New Paper) PANPA Newspaper of the Year Awards – www.zaobao.com Best in Newspaper Infographics (Non Young Readers (Circulation over 50,000) Entertainment (Multimedia) Breaking News; Circulation over 100,000) – Highly Commended (Little Red Dot, – podcast.straitstimes.com – Silver (Simon Ang & Jonathan Roberts, The Straits Times) The New Paper) Food & Beverage (Lifestyle & Reference) Newspaper Photography of the Year – food.asiaone.com Best in Newspaper Infographics (Non Breaking – Commended (Ong Chin Kai, The Straits Times) News; Circulation below 100,000) Lifestyle (New Age) – Silver (Mohd Samad, Berita Harian) Marketeer of the Year – Highly Commended – zodiac.asiaone.com (Geoff Tan, Marketing Division) Best in Magazine Design (Circulation over ACME Awards 50,000) – Silver (Her World)

Retail & National Advertising, Home PANPA Newspaper Advertising Awards furnishing & Home Improvement (Circulation over 250,000) – Honorable Mention Best Advertising Feature or Supplement (Beautiful Homes 2004) (Circulation over 50,000) – Winner (The Straits Times – Health & You Supplement)

42 CORPORATE GOVERNANCE

SPH is committed to achieving high standards of corporate governance, to promote corporate transparency and protect shareholder interest. SPH is pleased to confirm that it has adhered to the principles and guidelines of the new Code of Corporate Governance 2005 (“Code”), ahead of its coming into effect for annual general meetings held on or after 1st January 2007.

The Annual Report should be read in totality for SPH’s full compliance.

BOARD MATTERS Board’s Conduct of its Affairs Principle 1: Effective Board to lead and control the company The Board provides leadership to the Group by setting the corporate policies and strategic aims. Matters requiring the Board’s decision and approval include:

1. Major funding proposals, investments, acquisitions and divestments including the Group’s commitment in terms of capital and other resources;

2. The annual budgets and financial plans of the Group;

3. Annual and quarterly financial reports;

4. Internal controls and risk management strategies and execution; and

5. Appointment of directors and key management staff, including review of performance and remuneration packages.

The Group has in place financial authorization limits for matters such as operating and capital expenditure, credit lines and acquisition and disposal of assets and investments, which require the approval of the Board.

To ensure that specific issues are subject to in-depth review and discussion, before the Board makes its decisions, certain functions have been delegated by the Board to various Board Committees, which would make recommendations to the Board. The Board Committees constituted by the Board are the Executive Committee, Audit Committee, Remuneration Committee and the Nominating Committee.

Executive Committee (EC) The EC meets once a month and as warranted by particular circumstances. The EC is chaired by the Chairman of the Board and comprises five members, four of whom are independent non-executive directors.

The EC’s principal responsibilities are :–

1. To review, with management, and recommend to the Board the overall corporate strategy, objectives and policies of the Group, and monitor their implementation;

2. To consider and recommend to the Board, the Group's five year plan and annual operating and capital budgets;

3. To review and recommend to the Board proposed investments and acquisitions of the Group which are considered strategic for the long-term prospects of the Group;

4. To oversee the enterprise risk management function, by ensuring the proper implementation of a formal risk management framework for the Group;

5. To approve the Company’s asset allocation strategy, appointment and termination of external fund managers and investment/divestment of securities and review investment guidelines, treasury management and investment performance;

6. To act on behalf of the Board in urgent situations, when it is not feasible to convene a meeting of the entire Board; and

7. To carry out such other functions as may be delegated to it by the Board.

43 CORPORATE GOVERNANCE

Other Board Committees are as set out below: 1. Audit Committee (principle 11); 2. Remuneration Committee (principle 7); and 3. Nominating Committee (principle 4).

Board attendance The Board meets on a quarterly basis and as warranted by particular circumstances. Board meetings may be conducted via tele- conference. The attendance of the Directors at meetings of the Board and Board Committees, and the frequency of such meetings, is disclosed on page 48. A Director who fails to attend three Board meetings consecutively, without good reason, will not be nominated by the Nominating Committee for re-appointment and will be deemed to have resigned.

Training for Directors A comprehensive orientation programme is organized for new Directors to familiarize them with the Group’s operations, organization structure and corporate policies. They are also briefed on the Company's corporate governance practices and the regulatory regime. Directors are updated from time to time on changes in relevant laws and regulations and the evolving media industry.

Directors may also request further explanations, briefings or informal discussions on any aspect of the Group’s operations or business issues from the management.

A letter is sent to all new directors, setting out matters such as the Code of Dealing in the Company’s shares as Directors are privy to price sensitive information.

Board Composition and Balance Principle 2: Strong and independent Board Currently, the Board comprises 11 Directors, all of whom, except for the CEO, are non-executive and independent directors. Each director has been appointed on the strength of his caliber and experience. Please refer to the Board of Directors section for their individual profiles.

The Board and management recognize the advantage of open and constructive debate. To facilitate this, Board members are supplied with relevant, complete and accurate information on a timely basis. Non-executive directors may challenge management's assumptions and also extend guidance to the management, in the best interest of the Group.

Chairman and Chief Executive Officer Principle 3: Clear division of responsibilities between Chairman and Chief Executive Officer to ensure a balance of power and authority The Company has a separate Chairman and CEO. The Chairman is a non-executive and independent director and also chairs the EC. He sets the agenda for Board meetings and ensures that relevant, accurate and complete information is made available to the Board. The Chairman has appointed some non-executive directors as directors in the Company’s subsidiaries so as to encourage more interaction between Directors and management and to facilitate effective contribution of non-executive directors.

The CEO bears executive responsibility for the Group’s business and implements the Board's decision. The Chairman and the CEO are not related.

Board membership Principle 4 : Formal and transparent process for appointment of new directors The Nominating Committee (NC), which comprises four independent directors, regularly reviews the balance and mix of expertise, skills and attributes of the Directors in order to meet the business and governance needs of the Group, shortlists candidates with the appropriate profile for nomination or re-nomination and recommends them to the Board for approval. The appointment of Directors is also in accordance with section 10 of the Newspapers and Printing Presses Act (Cap 206).

The NC has also ascertained that for the period under review, all non-executive Directors are independent and that Directors have devoted sufficient time and attention to the Group’s affairs.

Directors’ performance and independence is reviewed by the NC on an annual basis. Article 111 of the Articles requires one third of the Directors, or the number nearest to one third, to retire by rotation at every AGM. These Directors may offer themselves for re-election, if eligible. Directors of or over 70 years of age are required to be re-elected every year at the AGM under Section 153(6) of the Companies Act before they can continue to act as a Director.

44 Board Performance Principle 5: Formal assessment of the effectiveness of the Board and contribution of each director The NC evaluated the Board’s performance as a whole, and the performance of individual Directors, based on performance criteria set by the Board. The performance criteria include qualitative and quantitative factors such as performance of principal functions and fiduciary duties, level of participation at meetings, guidance provided to the management, and attendance record.

Access to Information Principle 6: Provision of complete, adequate and timely information prior to board meetings and on an on-going basis The Board is provided with quarterly financial accounts, other financial statements and progress reports of the Group’s business operations. The quarterly financial results and annual budget (including the forecast) is presented to the Board for approval. The monthly financial statements are made available to members of the EC.

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 attends board meetings to answer any queries from the Directors. The Directors also have unrestricted access to the Company’s senior management at all times.

The Company Secretary attends all Board meetings and ensures that board procedures are followed. The Company Secretary also organizes orientation for new directors, as well as update Directors on changes in laws and regulations. It is the Company Secretary’s responsibility to ensure that the Company complies with the requirements of the Companies Act and the Listing Manual.

The Articles provide that the appointment and removal of the Company Secretary is subject to the approval of the Board.

Should Directors, whether as a group or individually, need independent professional advice relating to the Company’s affairs, the Company Secretary will appoint a professional advisor to render the advice and keep the Audit Committee informed of such advice. The cost of such professional advice will be borne by the Company.

Remuneration Matters Principle 7: Formal and transparent procedure for fixing remuneration packages of directors. The Remuneration Committee (RC) comprises four non-executive and independent directors.

The RC sets the remuneration guidelines of the Group for each annual period. The RC reviews Directors’ remuneration, including that of the CEO, annually and submits its recommendation to the Board for endorsement.

Level and Mix of Remuneration Principle 8: Appropriate remuneration to attract, retain and motivate directors. The company engaged an external remuneration advisor to advise on the compensation strategies for SPH, taking into account the need to adapt to market conditions, as well as to inculcate values of accountability, innovation and teamwork. The level and mix of remuneration for Directors is set out under Principle 9.

In relation to Directors’ remuneration, the external remuneration advisor has confirmed that Directors’ remuneration is fair and reasonable, benchmarked against comparable companies.

Disclosure on Remuneration Principle 9: Clear disclosure on remuneration policy, level and mix.

Directors’ Remuneration For the period under review, 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 shareholders. As an executive director, the CEO does not receive Directors’ fees.

45 CORPORATE GOVERNANCE

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 remuneration payable for the financial year ended 31 August 2006 is as follows:-

Value of Share Base/ Variable or Benefits Options Name of Director Directors’ Fees Fixed Salary Bonuses in Kind Granted Total (%) (%) (%) (%) (%) (%)

Executive Director – 48.06 29.23 2.11 20.60 100 $1,250,000 to $1,499,999 Chan Heng Loon Alan

Independent Directors Below $250,000 Tony Tan Keng Yam(a) 88.46 – – 11.54 – 100 (Chairman) Lim Chin Beng(b) 84.93 – – 15.07 – 100 Cham Tao Soon 100 – – – – 100 Willie Cheng Jue Hiang 100 – – – – 100 Cheong Choong Kong 100 – – – – 100 Lee Ek Tieng 100 – – – – 100 Ngiam Tong Dow 100 – – – – 100 Philip Pillai 100 – – – – 100 Sum Soon Lim 100 – – – – 100 Yeo Ning Hong 100 – – – – 100

(a) Appointed as a Director on 5 September 2005 and as a Chairman on 2 December 2005 (b) Retired as a Director and as a Chairman on 2 December 2005

Remuneration of Executives Number of top five executives of the Company (excluding the CEO in above table) in each remuneration band (including value of share options granted*) for this financial year:– Remuneration Bands No. of Executives

$1,000,000 to $1,249,999 1 $750,000 to $999,999 1 $500,000 to $749,999 3

Total 5 * Valuation based on Black-Scholes model

The Company adopts a remuneration policy for staff comprising a fixed component, a variable component and 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. Only executive directors may participate in the share option scheme. Non-executive directors are not eligible.

The Company does not employ any immediate family member of any Director or the CEO.

Details of options granted, exercised and cancelled pursuant to the Company’s share option scheme are set out in financial report section.

Accountability Principle 10: Board to present balanced and understandable assessment of the company’s performance Management provides the EC with the monthly management accounts within 7 business days of month end. Quarterly and annual results are released via SGXNET within 45 days of the end of the quarter.

SPH is committed to discharging our obligation to provide prompt and thorough disclosures.

46 Audit Committee Principle 11: Establishment of an Audit Committee (AC) with written terms of reference.

Audit Committee (AC) The AC currently comprises five members, all of whom are independent non-executive directors.

The NC is of the view that the members of the AC have sufficient financial management expertise and experience to discharge the AC’s functions in view of their experience as directors and/or senior management in accounting and financial fields.

The AC performs the functions as set out in the Code. The AC has conducted an annual review of the performance of the external auditor and the volume of non-audit services to satisfy itself that the nature and extent of such services will not prejudice the independence and objectivity of the external auditors, before confirming their re-nomination.

The AC meets with the external and internal auditors, without the presence of management, at least once a year. The audit partner of the external auditors is rotated every five years, in accordance with the requirements of the Listing Manual.

Quarterly financial statements and the accompanying announcements are presented to the AC for approval, before endorsement by the Board, to ensure the integrity of information to be released.

The Group has an existing Code of Employee Conduct and Business Ethics Policy to regulate the ethical conduct of its employees. The Group has also put in place the Business Ethics and Fraud Reporting Policy & Procedure so that staff can, in confidence, raise concerns about possible irregularities for investigation.

Internal Controls Principle 12: Sound system of internal controls The Internal Audit division (IAD) has an annual audit plan, which complements that of the external auditors. IAD’s plan focuses on material internal control systems including financial, operational, IT and compliance controls, and risk management. IAD also provides advice on security and control in new systems development, recommends improvements to effectiveness and economy of operations, and contributes to risk management and corporate governance processes. Any material non-compliance or lapses in internal controls together with corrective measures are reported to the AC.

Based on the audit reports and management controls in place, the AC is satisfied that the internal control systems provide reasonable assurance that assets are safeguarded, that proper accounting records are maintained and financial statements are reliable.

In the course of their statutory audit, the Company’s external auditors will highlight any material internal control weaknesses which have 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 their audit, and recommendations, if any, by the external auditors are reported to the AC.

SPH has set up an Enterprise Risk Management (ERM) unit to better define and manage uncertainties and threats to the Group’s businesses. The ERM framework incorporates a continuous and iterative process for enhancing risk awareness and promoting a culture of risk management across the organization. The ERM unit updates the Executive Committee on emerging risks, as well as how current risks are being managed.

The Board is of the opinion that the internal controls, including financial, operational and compliance controls and risk management systems are adequate.

Internal Audit Principle 13: Establishment of an internal audit function that is independent of the functions it audits. IAD is staffed with eight audit executives, including the Head of Internal Audit, who is a Fellow Certified Public Accountant of the Institute of Certified Public Accountants of Singapore (ICPAS) and of CPA Australia and a Fellow of the Association of Chartered Certified Accountants. All staff have to adhere to a set of code of ethics adopted from The Institute of Internal Auditors, US (IIA). The Head of Internal Audit reports directly to the chairman of the AC on audit matters, and to the CEO on administrative matters. IAD has adopted the Standards for Professional Practice of Internal Auditing set by IIA and ensures staff competency through the recruitment of suitably qualified and experienced staff, provision of formal and on-the-job training, and appropriate resource allocation in engagement planning.

The AC reviews IAD’s reports on a quarterly basis. The AC also reviews and approves the annual IA plans and resources to ensure that IAD has the necessary resources to adequately perform its functions.

47 CORPORATE GOVERNANCE

Communication with Shareholders Principle 14: Regular, effective and fair communication with shareholders. The Company holds analysts’ briefings of its half-year and full-year results and a media briefing of its full year results. The quarterly financial results are published through the SGXNET, news releases and the Company’s corporate website.

The Company does not practice selective disclosure. Price-sensitive information is first publicly released through SGXNET, either before the Company meets with any investors or analysts or simultaneously with such meetings. All shareholders of the Company receive the summary financial report, and, on request, the full annual report, and notice of AGM, which is held within four months after the close of the financial year. The notice is also advertised in the newspapers. The summary financial report and the annual report are also available on the Company’s corporate website, www.sph.com.sg.

Principle 15: Greater shareholder participation at AGMs. The Articles allow a shareholder to appoint one or two proxies to attend and vote instead of the shareholder. The Articles currently do not allow a shareholder to vote in absentia.

Resolutions are as far as possible, structured separately and may be voted on independently.

The Company is in full support of shareholder participation at AGMs. For those who hold their shares through CPF nominees and who are not registered as shareholders of the Company, the Company welcomes them to attend the AGM as observers.

All Directors, including the Chairmen of the EC, AC, NC and RC and senior management are in attendance at the AGMs and Extraordinary General Meetings to allow shareholders the opportunity to air their views and ask Directors or management questions regarding the Company. The external auditors are also invited to attend the AGMs to assist the Directors in answering any queries relating to the conduct of the audit and the preparation and content of the auditors’ report.

DIRECTORS’ ATTENDANCE AT BOARD AND BOARD COMMITTEE MEETINGS (for the Financial Year ended 31 August 2006)

Name Board Executive Audit Remuneration Nominating Committee Committee Committee Committee

Tony Tan 5 out of 5 11 out of 11@ – 2 out of 2^ NA # (Chairman) Cham Tao Soon 4 out of 5 10 out of 11 – 2 out of 2 – (Deputy Chairman) Chan Heng Loon Alan 5 out of 5 11 out of 11 – – – (CEO) Willie Cheng 5 out of 5 – 4 out of 4 2 out of 2^ – Cheong Choong Kong 5 out of 5 – 4 out of 4 – – Lee Ek Tieng 5 out of 5 – 4 out of 4 – 1 out of 1 Ngiam Tong Dow 5 out of 5 2 out of 2@ – 2 out of 2 1 out of 1 Philip N. Pillai 5 out of 5 – – – 1 out of 1 Sum Soon Lim 5 out of 5 10 out of 11 4 out of 4 – – Yeo Ning Hong 5 out of 5 9 out of 9@ 3 out of 3+ NA^ –

Lim Chin Beng 1 out of 1 2 out of 2 – – 1 out of 1 (resigned on 2.12.2005)

Notes : @ Executive Committee Dr Tony Tan was appointed as member on 19.9.2005 Dr Yeo Ning Hong was appointed as member on 2.12.2005 Mr Ngiam Tong Dow resigned as a member on 2.12.2005

+ Audit Committee Dr Yeo Ning Hong was appointed as member on 2.12.2005

^ Remuneration Committee Dr Tony Tan was appointed as member on 19.9.2005 Mr Willie Cheng was appointed as member on 2.12.2005 Dr Yeo Ning Hong resigned as a member on 2.12.2005

# Nominating Committee Dr Tony Tan was appointed as member on 19.9.2005

48 DAILY AVERAGE NEWSPAPER CIRCULATION THE STRAITS THE SUNDAY FOR AUGUST TIMES TIMES 2006 388,500 402,600

THE LIANHE BUSINESS ZAOBAO TIMES (WEEKDAY) THE NEW THE NEW 30,400 PAPER PAPER ON 183,000 111,400 SUNDAY 145,300

LIANHE WANBAO (WEEKEND) 125,000 LIANHE LIANHE SHIN MIN ZAOBAO WANBAO DAILY NEWS (SUNDAY) (WEEKDAY) (WEEKDAY) 191,300 123,900 120,800

SHIN MIN FRIDAY THUMBS DAILY NEWS WEEKLY UP (WEEKEND) 70,000 38,400 122,600 MY PAPER 120,000

BERITA TAMIL HARIAN MURASU 62,500 (SUNDAY) BERITA TAMIL 17,600 MINGGU MURASU (WEEKDAY) 72,100 10,200

49 SPH NEWSPAPERS READERSHIP TRENDS

SPH Newspapers Net Readership Trends (’000)

3000

2500

2000

1500

1000

500

0

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005* 2006

SPH Newspapers Net Readership Trends (’000)

1800

1600

1400

1200

1000

800

600

400

200

0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005* 2006

Publications: English* Chinese Malay & Tamil

* ceased publication from January 2005 Source: Nielsen Media Research, Media Index

50 FINANCIAL REVIEW

GROUP SIMPLIFIED FINANCIAL POSITION

2006 2005 2004 2003 2002 S$’000 S$’000 S$’000 S$’000 S$’000 Assets Property, plant & equipment 501,891 530,358 565,531 633,856 670,186 Investment property 1,130,890 1,059,000 1,045,852 1,039,754 1,059,538 Investments^ 1,144,391 802,670 649,001 1,185,020 1,061,886 Cash and deposits 81,387 70,192 192,621 328,176 387,528 Trade debtors 100,342 92,660 86,435 85,352 92,484 Stocks 34,579 30,870 32,278 54,763 47,045 Other assets^ 46,069 43,310 20,181 41,324 34,003

Total 3,039,549 2,629,060 2,591,899 3,368,245 3,352,670

Shareholders’ Interests Capital and reserves 2,046,395 1,621,203 1,479,119 2,247,736 2,241,538

Minority Interests 2,342 2,271 518 1,108 709

Liabilities Borrowings Current 667 – 81,000 52,900 25,000 Non-current 610,778 650,000 683,000 740,000 770,000 Trade creditors^ 82,756 74,443 64,860 58,049 59,526 Taxation Current 104,932 88,298 81,112 68,712 51,204 Deferred 72,046 67,777 72,126 85,199 83,287 Other liabilities^ 119,633 125,068 130,164 114,541 121,406

Total 3,039,549 2,629,060 2,591,899 3,368,245 3,352,670

^ The comparative figures have been restated to conform to current year’s presentation.

GROUP QUARTERLY RESULTS

2006 2005* 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Full Year 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Full Year S$’000 S$’000 S$’000 S$’000 S$’000 S$’000 S$’000 S$’000 S$’000 S$’000

Operating revenue 261,190 239,940 265,653 254,577 1,021,360 265,379 234,917 259,847 247,369 1,007,512

Profit before investment income and exceptional items 103,049 83,122 94,502 80,413 361,086 89,200 82,532 103,590 76,565 351,887

Profit before exceptional items 121,872 103,719 125,550 91,435 442,576 241,837 127,639 138,786 88,644 596,906

Profit before taxation 121,872 103,719 194,699 89,130 509,420 241,837 114,457 127,159 74,911 558,364

Profit attributable to shareholders 98,413 84,561 174,645 70,841 428,460 220,705 95,961 96,672 74,982 488,320

Earnings per share (S$) 0.06 0.05 0.11 0.05 0.27 0.14 0.06 0.06 0.05 0.31

* The comparative figures have been restated to take into account the retrospective adjustments relating to FRS 102 – Share-based Payment for share options granted to employees.

51 FINANCIAL REVIEW

Return on Operating After-Tax Profit Revenue Earnings Per Share# Return on Assets S$m % S$ %

700 70 0.35 25

600 60 0.30 20

500 50 0.25

15 400 40 0.20

300 30 0.15 10

200 20 0.10

5 100 10 0.05

0 0 0 0

2002 2003 2004 2005 2006 2002 2003 2004 2005 2006 2002 2003 2004 2005 2006 2002 2003 2004 2005 2006

# Adjusted for share split in FY 2004

Segmental Operating Revenue and Segmental Profit Margin

1,000 60% 900

800 50%

700 40% 600

500 30% 400

300 20% Operating Revenue (S$m)

200 Profit before EI & Tax Margin (%) 10% 100

0 0% 2002 2003 2004 2005 2006 Newspaper & Magazine Property Others Newspaper & Magazine Property

52 Revenue Cost Composition Composition

FY2006 FY2005 FY2006 FY2005*

4% 4% 7% 22% 10% 9% 25% 8% 3% 3% 20% 20% 66% 67% 25% 40% 27% 40%

Materials, Consumables & Broadcasting Costs Staff Costs

Advertisements Circulation Rental & Services Others Depreciation Other Operating Expenses Finance Costs

* Staff costs for FY2005 have been restated to take into account the retrospective adjustments relating to FRS 102 – Share-based Payment for share options granted to employees.

53 VALUE ADDED STATEMENT

2006 2005 Restated* S$’000 S$’000

Sale of goods and services 1,021,360 1,007,512 Purchase of materials and services (295,136) (289,215) Value added from operations 726,224 718,297

Non-production income and expenses: Net foreign exchange loss from operations (1,978) (2,231) Development expenditure written off (387) – Profit on disposal of property, plant and equipment 429 86 (Impairment)/ Write-back of impairment of trade debts (1,362) 3,047 Bad trade debts recovered 92 483 Net income from investments 81,675 248,609 Share of net losses of associates and jointly controlled entity (185) (3,590) Exceptional items 66,844 (38,542) Total value added 871,352 926,159

Distribution: Employees’ wages, provident fund contributions and other benefits 275,649 276,892 Corporate and other taxes 92,088 80,360 Interest paid 20,613 22,526 Donation and sponsorship 4,220 6,378 Directors’ fees 798 762 Net dividends to shareholders 363,186 381,270 Total distributed 756,554 768,188

Retained in the business: Depreciation and amortisation 49,640 50,852 Minority interests (116) 69 Retained earnings 65,274 107,050 871,352 926,159

Productivity ratios: S$ S$

Value added per employee 205,148 201,599 Value added per $ employment costs 2.63 2.59 Value added per $ investment in property, plant and equipment (before depreciation) 0.71 0.69 Value added per $ operating revenue 0.71 0.71

* Restated to take into account the retrospective adjustments relating to FRS 102 – Share-based Payment for share options granted to employees.

54 INVESTOR RELATIONS

SPH’s Focus: Investing in Growth for the Future SPH is gearing up to meet the exciting challenges presented by the converging media landscape. Besides ongoing efforts to improve and enhance its stable of newspapers, which included introduction of IN, Little Red Dot, ZB Popcorn, and most recently My Paper, SPH has launched exciting new media initiatives in the internet and outdoor advertising businesses. SPH is strategically positioning itself for the future by paving new paths in the internet arena through ST701, STOMP and the recently announced joint venture with Norwegian media giant, Schibsted Group. Additionally, the company broadens its outdoor media scope through SPH MediaBoxOffice in Singapore and TOM Outdoor Media Group in China.

Enhancing Shareholders’ Value To enhance shareholders’ value, SPH will continue to assess opportunities of returning excess cash generated from operations that is surplus to the Company’s requirements. The level of capital return, in the form of share buy back, dividend and capital distribution, will be determined to allow the Company to maintain sufficient capital reserves to support its business and to allow flexibility to pursue appropriate business opportunities, should such opportunities arise in the future. As part of enhancing shareholders’ value and given the positive sentiments of the Singapore property market, SPH will be developing its freehold site along Thomson Road into a 43 storey condominium which is expected to generate higher returns than an outright sale of the land.

Regular Interaction with Investing Community SPH is committed to maintaining a strong rapport with the investing community and continuously seeks to enhance and improve regular interactions with both analysts and investors.

With a good mix of global and local shareholder base, SPH recognises the importance of communicating with and providing accessibility to both our local and overseas investors. Management and Investor Relations executives conduct regular investor meetings, conference calls, press and analyst sessions and participate in conferences organised by major brokerage firms to explain to existing and potential shareholders our businesses, financial performances and growth strategies.

Investors may also post queries via our investor relations email address, [email protected], and these will be attended to by the Investor Relations team in the Company.

INVESTOR RELATIONS CALENDAR FOR FINANCIAL YEAR 2007

Date Event

12 October 2006 Announcement of FY2006 full year results cum analysts and press briefings 17 October 2006 Post results investor meeting 01 November 2006 Despatch of Summary Financial Report 2006 to Shareholders 17 November 2006 Despatch of Annual Report 2006 to Shareholders November 2006# Morgan Stanley Asia Pacific Summit 05 December 2006 Annual General Meeting 13 December 2006 Books closure date for dividend entitlement 22 December 2006 Payment of 2006 final dividends January 2007* Announcement of 1Q FY2007 results January 2007# Post results investor meeting March 2007# Credit Suisse Asia Investment Conference April 2007* Announcement of 2Q/HY FY2007 results cum analysts briefing April 2007# Post results investor meeting July 2007* Announcement of 3Q/YTD May FY2007 results July 2007# Post results investor meeting

# Tentative plans on participation in investor conferences and lunch meetings. * Please refer to SPH’s website at www.sph.com.sg under Investor Relations for the latest update.

55 INVESTOR REFERENCE

Return on Shareholders’ Funds Operating Margin#

% %40 40 4035 30 30 25 3520 20 15 3010 10 5 0 0 25 Year 2002 2003 2004 2005 2006 Year 2002 2003 2004 2005 2006

Net Dividend per Share Net Dividend S$ S$’M 0.25 400 0.23 350 0.21 300 0.19 0.17 250 0.15 200 Year 2002*^ 2003*^ 2004*^ 2005* 2006^^ Year 2002 2003 2004 2005 2006^^

# Computed based on operating revenue and profit before investment income and exceptional items. ^ Adjusted for share spilt in financial year 2004 for comparison purposes. * Reflected on a net basis for comparison purposes. ^^ Included one-tier tax exempt final dividend of 8 cents per share and one-tier tax exempt special dividend of 9 cents per share. The proposed dividends are subject to approval by shareholders at the Annual General Meeting on December 5, 2006.

Recurring Earnings@ and Dividend Payout Ratio** S$’M % 400 200

350 150

300 100

250 50

200 0 2002 2003 2004 2005 2006

@ Recurring earnings represent earnings of the media and property business on a recurring basis. Dividend Payout Ratio Recurring Earnings ** Computed based on recurring earnings.

Share Price and Volume Monthly Share Turnover Price 200 5

150 4

100 3

50 2

0 1 million ## ## ## S$ shares 2002 2003 2004 2005 2006

S$ Price Volume

2006 2005 2004## 2003## 2002## S$ S$ S$ S$ S$ Highest closing price 4.90 4.86 4.54 4.12 5.01 Lowest closing price 3.88 4.22 3.59 3.25 3.12 August 31 closing price 3.98 4.52 4.32 3.79 3.98 Price/Earnings Ratio based on August 31 closing price 14.74 14.58 14.12 18.58 23.98

## Share prices have been adjusted for the effects of the share spilt and capital reduction exercises which took place on June 24, 2004. Source: Bloomberg. 56 DIRECTORS’ REPORT FOR THE YEAR ENDED AUGUST 31, 2006

The Directors present their report to the members together with the audited financial statements of the Group for the financial year ended August 31, 2006 and the balance sheet of the Company at August 31, 2006.

Directors 1. The Directors of the Company in office at the date of this report are:

Tony Tan Keng Yam Cham Tao Soon Chan Heng Loon Alan Willie Cheng Jue Hiang Cheong Choong Kong Lee Ek Tieng Ngiam Tong Dow Philip N Pillai Sum Soon Lim Yeo Ning Hong

Arrangements to enable Directors to acquire Benefits 2. Neither during nor at the end of the financial year was the Company a party to any arrangement whose object was 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 the Company’ in paragraph 6.

Directors’ Interests in Shares 3. The Directors holding office as at August 31, 2006 who had interests in shares and options in the Company and its subsidiaries as recorded in the register of Directors’ shareholdings were as follows:

Direct Interests Deemed Interests Sept 1, Aug 31, Sept 21, Sept 1, Aug 31, Sept 21, 2005 2006 2006 2005 2006 2006

THE COMPANY

Management Shares Tony Tan Keng Yam – 4 4 – – – Cham Tao Soon 4 4 4 – – – Chan Heng Loon Alan 12 12 12 – – – Willie Cheng Jue Hiang 4 4 4 – – – Cheong Choong Kong 4 4 4 – – – Lee Ek Tieng 4 4 4 – – – Ngiam Tong Dow 4 4 4 – – – Philip N Pillai 4 4 4 – – – Sum Soon Lim 4 4 4 – – – Yeo Ning Hong 4 4 4 – – –

57 DIRECTORS’ REPORT FOR THE YEAR ENDED AUGUST 31, 2006

Directors’ Interests in Shares (CONT’D)

Direct Interests Deemed Interests Sept 1, Aug 31, Sept 21, Sept 1, Aug 31, Sept 21, 2005 2006 2006 2005 2006 2006

THE COMPANY

Ordinary Shares Tony Tan Keng Yam – 35,797 35,797 – – – Cham Tao Soon 10,000 10,000 10,000 10,183 10,183 10,183 Chan Heng Loon Alan 39,500 39,500 39,500 – – – Willie Cheng Jue Hiang 8,500 8,500 8,500 12,750 12,750 12,750 Cheong Choong Kong 34,000 34,000 34,000 8,500 8,500 8,500 Ngiam Tong Dow – – – – 12,000 12,000 Philip N Pillai 17,000 17,000 17,000 – – – Yeo Ning Hong 33,660 33,660 33,660 54,697^ 54,697^ 54,697^

Options for Ordinary Shares Chan Heng Loon Alan 1,275,000 1,912,500 1,912,500 – – –

^ Held jointly by Dr Yeo and his wife.

Full detailed information regarding Directors’ shareholdings can be obtained in accordance with Sections 164(8) and (9) of the Companies Act, Chapter 50.

Directors’ Contractual Benefits 4. 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.

Material Contracts 5. There are no material contracts of the Group and of the Company involving the interests of the Chief Executive Officer, each Director or controlling shareholder, either still subsisting at the end of the financial year or if not then subsisting, entered into since the end of the previous financial year.

Share Options in the Company Singapore Press Holdings Group (1999) Share Option Scheme (“1999 Scheme”)

6. (a) The 1999 Scheme was approved by shareholders at an Extraordinary General Meeting held on July 16, 1999.

(b) Details of options granted previously have been disclosed in the Directors’ Reports for the respective years.

(c) During the financial year, options were granted for a total of 17,412,250 ordinary shares, details of which are as follows:

(i) Categories of persons to whom options were granted:

Total No. of Ordinary Shares Category No. of Persons under option granted

Executive Director 1 637,500 Employee 1,452 16,774,750 1,453 17,412,250

(ii) The expiry date of these options is disclosed in Note 5 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 DIRECTORS’ REPORT FOR THE YEAR ENDED AUGUST 31, 2006

Share Options in the Company (CONT’D) 6. (d) The aggregate number of options granted since the commencement of the 1999 Scheme on July 16, 1999 to August 31, 2006 is 103,090,950 options to subscribe for ordinary shares.

7. The unissued ordinary shares of the Company under option at the end of the financial year pursuant to the 1999 Scheme are set out in Note 5 to the financial statements.

Share OptionS in Subsidiaries 8. No option to take up unissued shares of subsidiaries has been granted during the financial year.

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

10. At the end of the financial year, there were no unissued shares of subsidiaries under option.

Audit Committee 11. The Audit Committee carried out its functions in accordance with Section 201B(5) of the Companies Act, Chapter 50, and the Listing Manual.

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 of the internal audit function; reviewing the balance sheet of the Company and financial statements of the Group before submitting them to the Board 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; and overseeing any internal investigation into cases of fraud and irregularities.

It also recommends to the Board the appointment of external auditors, serves as a channel of communications between the Board and the auditors, and performs such other functions as may be agreed by the Audit Committee and the Board.

On behalf of the Directors

Tony Tan Keng Yam Chan Heng Loon Alan Chairman Director

Singapore, October 12, 2006

59 STATEMENT BY DIRECTORS

In the opinion of the Directors,

(a) the balance sheet of the Company and the consolidated financial statements of the Group for the year ended August 31, 2006 are drawn up so as to exhibit a true and fair view of:

(i) the results of the business, changes in equity and cash flows of the Group; and

(ii) the state of affairs of the Group and of the Company.

(b) at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due.

On behalf of the Directors

Tony Tan Keng Yam Chan Heng Loon Alan Chairman Director

Singapore, October 12, 2006

60 AUDITORS’ REPORT TO THE MEMBERS OF SINGAPORE PRESS HOLDINGS LIMITED

We have audited the balance sheet of Singapore Press Holdings Limited and the consolidated financial statements of the Group for the financial year ended August 31, 2006 set out on pages 62 to 112. These financial statements are the responsibility of the Company’s directors. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with Singapore Standards on Auditing. Those Standards require that we plan and perform our audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An 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 evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion,

(a) the accompanying balance sheet of the Company and the consolidated financial statements of the Group are properly drawn up in accordance with the provisions of the Singapore Companies Act, Cap 50 (“the Act”) and Singapore Financial Reporting Standards so as to give a true and fair view of the state of affairs of the Company and of the Group as at August 31, 2006 and the results, changes in equity and cash flows of the Group for the financial year ended on that date; and

(b) the accounting and other records required by the Act to be kept by the Company and by those subsidiaries incorporated in Singapore of which we are the auditors have been properly kept in accordance with the provisions of the Act.

PricewaterhouseCoopers Certified Public Accountants

Singapore, October 12, 2006

61 BALANCE SHEETS AS AT AUGUST 31, 2006

GROUP COMPANY Aug 31, Aug 31, Aug 31, Aug 31, 2006 2005 2006 2005 Restated* Restated* Note S$’000 S$’000 S$’000 S$’000

CAPITAL EMPLOYED Share capital 5 432,807 318,082 432,807 318,082 Share premium 5 – 89,206 – 89,206 Treasury shares 5 (12,018) – (12,018) – Reserves 6 332,424 15,678 51,012 13,451 Retained profit 1,293,182 1,198,237 653,656 768,530 Shareholders’ interests 2,046,395 1,621,203 1,125,457 1,189,269 Minority interests 2,342 2,271 – – Total equity 2,048,737 1,623,474 1,125,457 1,189,269 EMPLOYMENT OF CAPITAL Non-current assets Property, plant and equipment 9 501,891 530,358 299,578 318,543 Investment property 10 1,130,890 1,059,000 – – Interests in subsidiaries 11a – – 386,812 386,812 Interests in associates 12a 69,729 28,075 29,160 29,160 Long-term investments 14 403,466 121,005 39,273 3,362 Derivative financial instruments 21 9,855 – – – Intangible assets 15 11,554 11,029 – – Amount owing by subsidiaries 11b – – 771,291 804,379 Amount owing by associates 12b 6,051 6,029 6,020 6,012 Amount owing by jointly controlled entity 13 – 33 – – Other non-current assets 16 5,177 4,691 5,029 4,616 2,138,613 1,760,220 1,537,163 1,552,884 Current assets Stocks 17 34,579 30,870 33,935 30,591 Trade debtors 18 100,342 92,660 85,687 80,361 Other debtors and prepayments 19 11,093 21,528 4,221 7,014 Short-term investments 20 671,196 653,590 – – Derivative financial instruments 21 2,339 – – – Cash held as fixed deposits 55,297 45,373 16,047 25,360 Cash and bank balances 26,090 24,819 15,545 16,424 900,936 868,840 155,435 159,750 Total assets 3,039,549 2,629,060 1,692,598 1,712,634 Current liabilities Trade creditors 82,756 74,443 42,891 43,053 Other creditors and accrued liabilities 22 119,633 125,067 99,222 103,297 Borrowings 8 667 – – – Current taxation 104,932 88,298 69,292 55,544 307,988 287,808 211,405 201,894 Non-current liabilities Deferred taxation 7a 72,046 67,777 52,454 55,895 Borrowings 8 610,778 650,000 – – Amount owing to subsidiaries 11c – – 303,282 265,576 Amount owing to an associate 12b – 1 – – 682,824 717,778 355,736 321,471 Total liabilities 990,812 1,005,586 567,141 523,365 Net assets 2,048,737 1,623,474 1,125,457 1,189,269

* Restated to take into account the retrospective adjustments relating to FRS 102 – Share-based Payment for share options granted to employees.

The accompanying notes form part of these financial statements.

62 CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED AUGUST 31, 2006

GROUP 2006 2005 Restated* Note S$’000 S$’000

Operating revenue 24 Newspaper and Magazine 906,986 891,783 Property 98,704 89,445 Others 15,670 26,284 1,021,360 1,007,512 Other operating income 9,991 8,713 1,031,351 1,016,225 Materials, consumables & broadcasting costs (168,769) (181,647) Staff costs 25 (268,009) (268,200) Depreciation 9 (49,065) (50,300) Other operating expenses 26 (163,809) (141,665) Finance costs 27 (20,613) (22,526) Profit before investment income and exceptional items 361,086 351,887 Net income from investments 28 81,675 248,609 Share of net losses of associates and jointly controlled entity (185) (3,590) Profit before exceptional items 442,576 596,906 Exceptional items 29 66,844 (38,542) Profit before taxation 509,420 558,364 Taxation 7b (81,076) (69,975) Profit after taxation 428,344 488,389 Attributable to: Shareholders of the Company 428,460 488,320 Minority interests (116) 69 428,344 488,389

Earnings per share (S$) 31 Basic 0.27 0.31 Diluted 0.27 0.31

* Restated to take into account the retrospective adjustments relating to FRS 102 – Share-based Payment for share options granted to employees.

The accompanying notes form part of these financial statements.

63 CONSOLIDATED STATEMENT OF CHANGES IN TOTAL EQUITY FOR THE YEAR ENDED AUGUST 31, 2006

GROUP Capital Share-based Fair Exchange Share Share Redemption Treasury Capital Compensation Hedging Value Translation Retained Minority Total Capital Premium Reserve Shares Reserve Reserve Reserve Reserve Reserve Profit Interests Equity 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, 2005 318,082 89,206 4,509 – 2,005 – – – 222 1,207,179 2,271 1,623,474 Effect of adopting FRS 102 – – – – – 8,942 – – – (8,942) – – As restated 318,082 89,206 4,509 – 2,005 8,942 – – 222 1,198,237 2,271 1,623,474 Effect of adopting FRS 39 – – – – – – (4,305) 309,345 – 29,662 – 334,702 318,082 89,206 4,509 – 2,005 8,942 (4,305) 309,345 222 1,227,899 2,271 1,958,176 Net fair value changes on available-for-sale financial assets – – – – – – – (1,210) – – – (1,210) Net fair value changes on cash flow hedges – – – – – – 11,845 – – – – 11,845 Exchange translation difference – – – – – – – – (302) – – (302) Net gains/(losses) recognised directly in equity – – – – – – 11,845 (1,210) (302) – – 10,333 Profit for the financial year – – – – – – – – – 428,460 (116) 428,344 Total recognised gains/(losses) – – – – – – 11,845 (1,210) (302) 428,460 (116) 438,677 Share-based payment expenses – – – – – 7,371 – – – – – 7,371 Issue of shares from September 1, 2005 to January 30, 2006 (Note 5) 529 9,769 – – – (539) – – – – – 9,759 Issue of shares from January 31, 2006 to August 31, 2006 (Note 5) 10,712 – – – – (941) – – – – – 9,771 Transfer to/(from) 103,484 (98,975) (4,509) – – – – – – – – – Dividends (Note 30) – – – – – – – – – (363,186) (30) (363,216) Lapse of share options – – – – – (9) – – – 9 – – Share buy-back – held as treasury shares (Note 5) – – – (12,018) – – – – – – – (12,018) Purchase of additional equity interests in subsidiaries – – – – – – – – – – (165) (165) Acquisition of subsidiaries – – – – – – – – – – 382 382 Balance as at August 31, 2006 432,807 – – (12,018) 2,005 14,824 7,540 308,135 (80) 1,293,182 2,342 2,048,737

Balance as at September 1, 2004 316,527 62,319 4,509 – 2,005 – – – 4 1,093,755 518 1,479,637 Effect of adopting FRS 102 – – – – – 2,568 – – – (2,568) – – As restated 316,527 62,319 4,509 – 2,005 2,568 – – 4 1,091,187 518 1,479,637 Exchange translation difference – – – – – – – – 218 – – 218 Gains recognised directly in equity – – – – – – – – 218 – – 218 Profit for the financial year – – – – – – – – – 488,320 69 488,389 Total recognised gains – – – – – – – – 218 488,320 69 488,607 Share-based payment expenses – – – – – 6,374 – – – – – 6,374 Issue of shares (Note 5) 1,555 – – – – – – – – – – 1,555 Premium on issue of shares – 26,887 – – – – – – – – – 26,887 Dividends (Note 30) – – – – – – – – – (381,270) – (381,270) Acquisition of subsidiaries – – – – – – – – – – 1,684 1,684 Balance as at August 31, 2005 318,082 89,206 4,509 – 2,005 8,942 – – 222 1,198,237 2,271 1,623,474

The accompanying notes form part of these financial statements.

64 GROUP Capital Share-based Fair Exchange Share Share Redemption Treasury Capital Compensation Hedging Value Translation Retained Minority Total Capital Premium Reserve Shares Reserve Reserve Reserve Reserve Reserve Profit Interests Equity 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, 2005 318,082 89,206 4,509 – 2,005 – – – 222 1,207,179 2,271 1,623,474 Effect of adopting FRS 102 – – – – – 8,942 – – – (8,942) – – As restated 318,082 89,206 4,509 – 2,005 8,942 – – 222 1,198,237 2,271 1,623,474 Effect of adopting FRS 39 – – – – – – (4,305) 309,345 – 29,662 – 334,702 318,082 89,206 4,509 – 2,005 8,942 (4,305) 309,345 222 1,227,899 2,271 1,958,176 Net fair value changes on available-for-sale financial assets – – – – – – – (1,210) – – – (1,210) Net fair value changes on cash flow hedges – – – – – – 11,845 – – – – 11,845 Exchange translation difference – – – – – – – – (302) – – (302) Net gains/(losses) recognised directly in equity – – – – – – 11,845 (1,210) (302) – – 10,333 Profit for the financial year – – – – – – – – – 428,460 (116) 428,344 Total recognised gains/(losses) – – – – – – 11,845 (1,210) (302) 428,460 (116) 438,677 Share-based payment expenses – – – – – 7,371 – – – – – 7,371 Issue of shares from September 1, 2005 to January 30, 2006 (Note 5) 529 9,769 – – – (539) – – – – – 9,759 Issue of shares from January 31, 2006 to August 31, 2006 (Note 5) 10,712 – – – – (941) – – – – – 9,771 Transfer to/(from) 103,484 (98,975) (4,509) – – – – – – – – – Dividends (Note 30) – – – – – – – – – (363,186) (30) (363,216) Lapse of share options – – – – – (9) – – – 9 – – Share buy-back – held as treasury shares (Note 5) – – – (12,018) – – – – – – – (12,018) Purchase of additional equity interests in subsidiaries – – – – – – – – – – (165) (165) Acquisition of subsidiaries – – – – – – – – – – 382 382 Balance as at August 31, 2006 432,807 – – (12,018) 2,005 14,824 7,540 308,135 (80) 1,293,182 2,342 2,048,737

Balance as at September 1, 2004 316,527 62,319 4,509 – 2,005 – – – 4 1,093,755 518 1,479,637 Effect of adopting FRS 102 – – – – – 2,568 – – – (2,568) – – As restated 316,527 62,319 4,509 – 2,005 2,568 – – 4 1,091,187 518 1,479,637 Exchange translation difference – – – – – – – – 218 – – 218 Gains recognised directly in equity – – – – – – – – 218 – – 218 Profit for the financial year – – – – – – – – – 488,320 69 488,389 Total recognised gains – – – – – – – – 218 488,320 69 488,607 Share-based payment expenses – – – – – 6,374 – – – – – 6,374 Issue of shares (Note 5) 1,555 – – – – – – – – – – 1,555 Premium on issue of shares – 26,887 – – – – – – – – – 26,887 Dividends (Note 30) – – – – – – – – – (381,270) – (381,270) Acquisition of subsidiaries – – – – – – – – – – 1,684 1,684 Balance as at August 31, 2005 318,082 89,206 4,509 – 2,005 8,942 – – 222 1,198,237 2,271 1,623,474

65 CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED AUGUST 31, 2006

GROUP 2006 2005 S$’000 S$’000

CASH FLOWS FROM OPERATING ACTIVITIES Profit before taxation 509,420 558,364

Adjustments for: Amortisation of intangible assets 575 552 Depreciation 49,065 50,300 Development expenditure written off 387 – Profit on disposal of property, plant and equipment (429) (86) Finance costs 20,613 22,526 Net income from investments (81,675) (248,609) Share of net losses of associates and jointly controlled entity 185 3,590 Exceptional items (66,844) 38,542 Gain on disposal of subsidiary – (2) Share-based payment expenses* 7,371 6,374 Other non-cash items (165) – Operating cash flow before working capital changes 438,503 431,551

Changes in working capital: Stocks (3,709) (6,092) Prepaid content rights – (2,209) Debtors 5,018 (10,559) Creditors (3,204) (26,689) 436,608 386,002 Income tax paid (72,539) (67,884) Dividends paid (363,186) (381,270) Dividends paid (net) by a subsidiary to a minority shareholder (30) – 853 (63,152) (Increase)/Decrease in other assets (486) 360 Exchange translation difference (221) 250 Net cash from/(used in) operating activities 146 (62,542)

* Restated 2005 comparatives to take into account the retrospective adjustments relating to FRS 102 – Share-based Payment for share options granted to employees.

The accompanying notes form part of these financial statements.

66 CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED AUGUST 31, 2006

GROUP 2006 2005 S$’000 S$’000

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of property, plant and equipment (18,273) (15,677) Proceeds on disposal of property, plant and equipment 698 12,280 Additions to investment property (1,743) (13,148) Acquisition of intangible assets - magazine title (1,100) – Acquisition of business by a subsidiary (net of cash acquired) [Note (a)] (387) – Acquisition of interests in subsidiaries (net of cash acquired) [Note (b)] 97 (23,748) Acquisition of interests in associates/jointly controlled entity (42,696) (33,342) Net proceeds from divestment of interests in subsidiaries and an associate – 5,837 Amount owing by associates (23) (47) Amount owing by a jointly controlled entity (93) (33) Loan to an associate – (6,000) Loan to a minority shareholder (1,369) – Purchase of long-term investments (5,064) (2,870) Proceeds on disposal/redemption of long-term investments 16,055 198,325 Purchase of short-term investments (433,170) (264,303) Proceeds on disposal of short-term investments 354,810 182,907 Net decrease/(increase) in funds under management 133,183 (69,922) Investment income 81,675 252,163 82,600 222,422 (Less)/Add: Items not involving movement of funds Changes in fair value of financial instruments (4,450) – Impairment of internally-managed investments 4,220 – Profit on sale of internally-managed investments (20,132) (175,869) Exchange translation loss 1,090 – Allowance for diminution in value of internally-managed investments – 1,557 Accretion of discount on bonds – (2) Amortisation of premium on bonds – 89 Effective interest on bonds (623) – Net cash from investing activities 62,705 48,197

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from bank loans 2,000 22,500 Repayment of bank loans (40,555) (136,500) Finance costs (20,613) (22,526) Proceeds on issue of shares by the Company 19,530 28,442 Share buy-back (12,018) – Net cash used in financing activities (51,656) (108,084)

Net increase/(decrease) in cash and cash equivalents 11,195 (122,429) Cash and cash equivalents at beginning of year 70,192 192,621 Cash and cash equivalents at end of year [Note (c)] 81,387 70,192

The accompanying notes form part of these financial statements.

67 CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED AUGUST 31, 2006

GROUP 2006 S$’000

Notes to the Consolidated Cash Flow Statement

(a) Acquisition of business by a subsidiary

Property, plant and equipment 2,571 Current assets (including cash) 2,123 Current liabilities (2,076) Long-term loan (1,779) Minority interests (167) 672 Goodwill on consolidation 98 Total purchase consideration 770 Less: Cash and cash equivalents acquired (383) Net cash outflow on acquisition of business by a subsidiary 387

(b) Acquisition of a subsidiary

Property, plant and equipment 83 Current assets (including cash) 998 Current liabilities (366) Minority interests (215) 500 Goodwill on consolidation 257 Reclassification from an associate to a subsidiary (357) Total purchase consideration 400 Less: Cash and cash equivalents of subsidiary acquired (497) Net cash inflow on acquisition of a subsidiary (97)

(c) Cash and Cash Equivalents at the end of the year comprised:

GROUP 2006 2005 S$’000 S$’000

Cash on deposit^ 55,297 45,373 Cash and bank balances 26,090 24,819 81,387 70,192

^ The deposits with financial institutions mature on varying dates within 11 months (2005: 11 months) from the financial year end. The interest rates of these deposits as at August 31, 2006 range between 0.70% to 5.10% (2005: 0.58% to 3.45%).

The accompanying notes form part of these financial statements.

68 NOTES TO THE FINANCIAL STATEMENTS AUGUST 31, 2006

These notes form an integral part of and should be read in conjunction with the financial statements.

1. general The Company is incorporated and domiciled in Singapore and is publicly traded on the Singapore Exchange. The address of its registered office is 1000 Toa Payoh North, News Centre, Singapore 318994.

The principal activities of the Group consist of:

(a) publishing, printing and distributing newspapers, (b) publishing and distributing magazines, (c) providing multimedia content and services, (d) holding investments, (e) holding and managing properties, (f) providing outdoor advertising services, and (g) providing radio broadcasting services.

The principal activities of the Company consist of:

(a) publishing, printing and distributing newspapers, (b) distributing magazines, (c) providing multimedia content and services, (d) holding shares in subsidiaries, (e) holding investments, and (f) providing management services to subsidiaries.

2. significant Accounting Policies (a) Basis of Preparation The financial statements are prepared in accordance with Singapore Financial Reporting Standards (“FRS”) under the historical cost convention except as disclosed in the accounting policies below.

The preparation of financial statements in conformity with FRS requires management to exercise its judgement in the process of applying the Group’s accounting policies. It also requires the use of accounting estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the financial year. Although these estimates are based on management’s best knowledge of current events and actions, actual results may ultimately differ from those estimates. Critical accounting estimates and assumptions used that are significant to the financial statements, and areas involving a higher degree of judgement or complexity, are disclosed in Note 4.

The Group and the Company adopted the new or revised FRS that are applicable in the current financial year. The 2005 comparatives have been amended as required, in accordance with the relevant transitional provisions in the respective FRS. The following are the new or revised FRS that are relevant to the Group:

FRS 1 (revised 2004) Presentation of Financial Statements FRS 2 (revised 2004) Inventories FRS 8 (revised 2004) Accounting Policies, Changes in Accounting Estimates and Errors FRS 10 (revised 2004) Events after the Balance Sheet Date FRS 16 (revised 2004) Property, Plant and Equipment FRS 17 (revised 2004) Leases FRS 21 (revised 2004) The Effects of Changes in Foreign Exchange Rates FRS 24 (revised 2004) Related Party Disclosures FRS 27 (revised 2004) Consolidated and Separate Financial Statements FRS 28 (revised 2004) Investment in Associates FRS 31 (revised 2004) Interests in Joint Ventures FRS 32 (revised 2004) Financial Instruments: Disclosure and Presentation FRS 33 (revised 2004) Earnings per Share FRS 39 (revised 2004) Financial Instruments: Recognition and Measurement FRS 102 Share-based Payments FRS 105 Non-current Assets Held for Sale and Discontinued Operations

The adoption of the above FRS did not result in substantial changes to the Group’s accounting policies except as disclosed in Note 3. 69 NOTES TO THE FINANCIAL STATEMENTS AUGUST 31, 2006

2. significant Accounting Policies (CONT’D) (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 purchase method of accounting is used to account for the acquisition of subsidiaries. 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.

Minority interests is that part of the net results of operations and of net assets of a subsidiary attributable to interests which are not owned directly or indirectly by the Group. It is presented in the consolidated balance sheet within equity, separately from the parent shareholders’ equity, and is separately disclosed in the consolidated income statement.

(c) Currency Translation (i) Functional and presentation currency Items included in the financial statements of each entity in the Group are measured using the currency of the primary economic environment in which the entity operates (“the functional currency”). The financial statements are presented in Singapore Dollars, which is the Company’s functional and presentation currency.

(ii) Transactions and balances Transactions in a currency other than the functional currency (“foreign currency”) are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Currency translation gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies, are taken to the income statement except for currency translation differences on net investment in foreign entities [Note 2(c)(iv)] in the consolidated financial statements.

Currency translation differences on non-monetary items, such as equity investments held at fair value through profit or loss, are reported as part of the fair value gain or loss in the income statement. Currency translation differences on non-monetary items, such as equity investments classified as available-for-sale financial assets, are included in the fair value reserve within equity. Currency translation differences on monetary items classified as available-for-sale financial assets, are included in the income statement.

(iii) Translation of Group entities’ financial statements The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

• Assets and liabilities for each balance sheet presented are translated at the closing rate at the date of the balance sheet;

• Income and expenses for each income statement are translated at average monthly exchange rates for the financial year; and

• All resulting exchange differences are taken to the exchange translation reserve within equity.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity on or after September 1, 2005 are treated as assets and liabilities of the foreign entity and translated at the closing rate. For acquisition prior to September 1, 2005, the exchange rates at the dates of acquisition were used.

(iv) Consolidation adjustments On consolidation, currency translation differences arising from the net investment in foreign entities are taken to the exchange translation reserve. When a foreign operation is disposed of, such currency translation differences are recognised in the income statement as part of the gain or loss on disposal.

70 NOTES TO THE FINANCIAL STATEMENTS AUGUST 31, 2006

2. significant Accounting Policies (CONT’D) (d) Impairment of Assets (i) Goodwill Goodwill is tested annually for impairment, as well as when there is any indication that the goodwill may be impaired.

For the purpose of impairment testing of goodwill, goodwill is allocated to each of the Group’s cash-generating- units (CGU) expected to benefit from synergies of the business combination.

An impairment loss is recognised in the income statement when the carrying amount of the CGU, including the goodwill, exceeds the recoverable amount of the CGU. Recoverable amount of the CGU is the higher of the CGU’s fair value less cost to sell and value in use.

Impairment loss on goodwill is not reversed in a subsequent period.

(ii) Intangible assets Property, plant and equipment Interests in subsidiaries, associates and jointly controlled entities

Intangible assets, property, plant and equipment and interests in subsidiaries, associates and jointly controlled entities are reviewed for impairment whenever there is any indication that these assets may be impaired. If any such indication exists, the recoverable amount (i.e. the higher of the fair value less cost to sell and value in use) of the asset is estimated to determine the amount of impairment loss.

An impairment loss for an asset other than goodwill is reversed if, and only if, there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. The carrying amount of an asset other than goodwill is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of amortisation or depreciation) had no impairment loss been recognised for the asset in prior years. A reversal of impairment loss for an asset other than goodwill is recognised in the income statement.

(e) Property, Plant and Equipment and Depreciation (i) Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses.

(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:

Freehold buildings 30 years Leasehold land and buildings 30 years or life of lease tenure if less than 30 years Plant and equipment 3-20 years Furniture and fittings 10 years Motor vehicles 3-5 years

(iii) No depreciation is charged on freehold land and land held on 999-year lease or in respect of major capital work- in-progress.

(f) Investment Properties Investment properties are held for the primary purpose of producing rental income and are not held for resale in the ordinary course of business.

Investment properties are stated at cost less accumulated impairment losses. The cost of investment properties includes capitalisation of interest incurred on borrowings for the purchase, renovation and extension of the investment properties while these activities are in progress. For this purpose, the interest rates applied to funds provided for the development are based on the actual interest rates payable on the borrowings for such development.

71 NOTES TO THE FINANCIAL STATEMENTS AUGUST 31, 2006

2. significant Accounting Policies (CONT’D) (g) Subsidiaries Subsidiaries are entities over which the Group has power to govern the financial and operating policies, generally accompanying a shareholding of more than one half of the voting rights.

Interests in subsidiaries are included in the Company’s balance sheet at cost less accumulated impairment losses.

(h) Associates Associates are entities over which the Group has significant influence, but not control, generally accompanying a shareholding of between and including 20% and 50% of voting rights.

The Group’s interest in associates is equity accounted for in the consolidated financial statements. The Group’s share of the post-acquisition results of associates is included in its consolidated income statement. The Group’s share of the post-acquisition movements in reserves is recognised directly in equity. These post-acquisition movements are adjusted against the carrying amount of the investments in the consolidated balance sheet. When the Group’s share of losses in an associate exceeds its interest in the associate, including any unsecured receivables, the Group does not recognise further losses, unless it has obligations or has made payments on behalf of the associate.

In applying the equity method of accounting, adjustments are made to the financial statements of associates, where necessary, to ensure consistency of accounting policies with those of the Group.

In the Company’s balance sheet, interests in associates are stated at cost less accumulated impairment losses.

(i) Jointly Controlled Entities Jointly controlled entities are entities over which the Group has contractual arrangements to jointly share the control with one or more parties.

The Group’s interest in jointly controlled entities is equity accounted for in the consolidated financial statements. The Group’s share of the post-acquisition results of jointly controlled entities is included in its consolidated income statement. The Group’s share of the post-acquisition movements in reserves is recognised directly in equity. These post-acquisition movements are adjusted against the carrying amount of the investments in the consolidated balance sheet. When the Group’s share of losses in a jointly controlled entity exceeds its interest in the jointly controlled entity, including any unsecured receivables, the Group does not recognise further losses, unless it has obligations or has made payments on behalf of the jointly controlled entity.

In applying the equity method of accounting, adjustments are made to the financial statements of jointly controlled entities, where necessary, to ensure consistency of accounting policies with those of the Group.

In the Company’s balance sheet, interests in jointly controlled entities are stated at cost less accumulated impairment losses.

(j) Investments in Financial Assets (i) Classification The Group classifies its investments in financial assets in the following categories: financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, and available-for-sale financial assets. The classification depends on the purpose for which the assets were acquired. Management determines the classification of its financial assets at initial recognition and re-evaluates this designation at every reporting date, with the exception that the designation of financial assets at fair value through profit or loss is not revocable.

• Financial assets at fair value through profit or loss This category has two sub-categories: financial assets held for trading, and those designated at fair value through profit or loss at inception. A financial asset is classified in this category if acquired principally for the purpose of selling in the short term or if so designated by management. Derivatives are also categorised as held for trading unless they are designated for hedges. Assets in this category are classified as current assets if they are either held for trading or are expected to be realised within 12 months after the balance sheet date.

72 NOTES TO THE FINANCIAL STATEMENTS AUGUST 31, 2006

2. significant Accounting Policies (CONT’D) (j) Investments in Financial Assets (cont’d) (i) Classification (cont’d) • Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the Group provides money, goods or services directly to a debtor with no intention of trading the receivable. They are included in current assets, except those maturing more than 12 months after the balance sheet date. These are classified as non-current assets. Loans and receivables comprise cash on deposit, bank balances, trade and other debtors.

• Held-to-maturity investments Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturities that the Group’s management has the positive intention and ability to hold to maturity. The Group has no held-to-maturity investments at August 31, 2006.

• Available-for-sale financial assets Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless management intends to dispose of the assets within 12 months after the balance sheet date.

(ii) Recognition and derecognition Purchases and sales of investments are recognised on trade-date – the date on which the Group commits to purchase or sell the asset. Investments are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership. On sale of a financial asset, the difference between the net sales proceeds and its carrying amount is taken to the income statement. Any amount in the fair value reserve relating to the asset is also taken to the income statement.

(iii) Initial measurement Financial assets are initially recognised at fair value plus transaction costs except for financial assets at fair value through profit or loss, which are recognised at fair value. Transaction costs for financial assets at fair value through profit or loss are recognised in the income statement.

(iv) Subsequent measurement Available-for-sale financial assets and financial assets at fair value through profit or loss are subsequently carried at fair value. Loans and receivables are carried at amortised cost using the effective interest method.

Realised and unrealised gains and losses arising from changes in fair value of the ‘financial assets at fair value through profit or loss’ investment category including interest and dividend income are included in the income statement in the period in which they arise. Changes in the fair value of monetary assets denominated in a foreign currency and classified as available-for-sale are analysed into translation differences resulting from changes in amortised cost of the asset and other changes. The translation differences are recognised in the income statement, and other changes are recognised in the fair value reserve within equity. Changes in fair values of other monetary and non-monetary assets that are classified as available-for-sale are recognised in the fair value reserve within equity.

Interest on available-for-sale financial assets, calculated using the effective interest method, is recognised in the income statement. Dividends on available-for-sale equity securities are recognised in the income statement when the Group’s right to receive payment is established. When financial assets classified as available-for-sale are sold or impaired, the accumulated fair value adjustments recognised in the fair value reserve within equity are included in the income statement.

(v) Determination of fair value The fair values of quoted financial assets are based on current bid prices. If the market for a financial asset is not active, the Group establishes fair value by using valuation techniques. Such techniques include using recent arm’s length transactions and reference to the underlying net asset value of the investee companies.

73 NOTES TO THE FINANCIAL STATEMENTS AUGUST 31, 2006

2. significant Accounting Policies (CONT’D) (j) Investments in Financial Assets (cont’d) (vi) Impairment The Group assesses at each balance sheet date whether there is objective evidence that a financial asset or a group of financial assets is impaired. In the case of equity investments classified as available-for-sale, a significant or prolonged decline in the fair value of the investment below its cost is considered in determining whether the investments are impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss – measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit or loss – is removed from the fair value reserve within equity and recognised in the income statement. Impairment losses on debt instruments classified as available-for-sale financial assets are reversed in the income statement. However, impairment losses recognised in the income statement on equity investments classified as available-for-sale are not reversed through the income statement, until the equity investments are disposed of.

(k) Derivative Financial Instruments and Hedging Activities Derivative financial instruments are used to manage exposure to foreign exchange and interest rate risks arising from operational, financing and investment activities. Derivative financial instruments are not used for trading purposes.

Derivative financial instruments are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured at fair value. The method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged. The Group designates certain derivatives as either: (1) hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value hedge); or (2) hedges of highly probable forecast transactions (cash flow hedge). The Group has no fair value hedge at August 31, 2006.

The Group documents at the inception of the transaction the relationship between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. The Group also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of hedged items.

(i) Cash flow hedge The Group has entered into interest rate swaps that are cash flow hedges for the Group’s exposure to interest rate risk on its borrowings. Under these interest rate swaps, the Group agrees with another party to exchange at specified intervals, the difference between fixed rate and floating rate interest amounts calculated by reference to the agreed notional principal amounts.

The effective portion of changes in the fair value of these interest rate swaps are recognised in the hedging reserve within equity and transferred to the income statement in the periods when the interest expense on the borrowings are recognised in the income statement. The gain or loss relating to the ineffective portion is recognised immediately in the income statement.

(ii) Derivatives that do not qualify for hedge accounting Changes in the fair value of any derivative instruments that do not qualify for hedge accounting are recognised immediately in the income statement.

74 NOTES TO THE FINANCIAL STATEMENTS AUGUST 31, 2006

2. significant Accounting Policies (CONT’D) (l) Intangible Assets (i) Goodwill on Consolidation Goodwill on consolidation represents the difference between the cost of acquisition of a subsidiary or an associate/jointly controlled entity over the fair value of the Group’s share of net identifiable assets acquired at the date of acquisition. Goodwill arising from the acquisition of a subsidiary is shown on the face of the consolidated balance sheet, while goodwill arising from the acquisition of an associate or jointly controlled entity is recorded as part of the carrying value of the investment.

The gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

(ii) Trademarks and Licences Acquired trademarks and licences are stated at cost less accumulated amortisation and accumulated impairment losses. Amortisation is calculated using the straight-line method to allocate the cost of trademarks and licences over their estimated useful lives of up to 20 years.

(m) Stocks Stocks comprise raw materials and consumable stores, and are stated at the lower of cost and net realisable value.

Cost of raw materials and consumable stores includes transport and handling costs, and any other directly attributable costs, and is determined on the weighted average or specific identification basis.

(n) Debtors Debtors are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less allowance for impairment.

An allowance for impairment of debtors is recognised when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments are considered indicators that the receivable is impaired. The amount of the allowance is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. The amount of the allowance for impairment is recognised in the income statement.

(o) Borrowings Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption value is taken to the income statement over the period of the borrowings using the effective interest method.

Borrowings which are due to be settled within twelve months after the balance sheet date are included in current borrowings in the balance sheet even though the original term was for a period longer than twelve months and an agreement to refinance, or to reschedule payments, on a long-term basis is completed after the balance sheet date and before the financial statements are authorised for issue. Other borrowings due to be settled more than twelve months after the balance sheet date are included in non-current borrowings in the balance sheet.

(p) Creditors Creditors are initially measured at fair value, and subsequently measured at amortised cost, using the effective interest method.

(q) Dividends Payable Interim dividends are recorded during the financial year in which they are declared payable. Final dividends are recorded during the financial year in which the dividends are approved by the shareholders.

75 NOTES TO THE FINANCIAL STATEMENTS AUGUST 31, 2006

2. significant Accounting Policies (CONT’D) (r) Employee Benefits (i) Short-term employee benefits All short-term employee benefits, including accumulated compensated absences, are recognised in the income statement in the period in which the employees render their services to the Group.

(ii) Defined contribution plans Defined contribution plans are post-employment benefit plans under which the Group pays fixed contributions as defined by the laws of the countries in which it has operations. In particular, the Singapore companies in the Group make contributions to the Central Provident Fund. The Group’s contribution to defined contribution plans are recognised in the financial year to which they relate.

(iii) Share-based compensation benefits The share option scheme 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 Company at an agreed exercise price.

The fair value of the options granted is recognised as a share-based payment expense in the income statement with a corresponding increase in the share-based compensation reserve over the vesting period. The fair value is measured at grant date and recognised over the vesting period during which the employees become unconditionally entitled to the options. At each balance sheet date, the Company revises its estimates of the number of options that are expected to become exercisable. It recognises the impact of the revision of original estimates in the income statement and a corresponding adjustment to equity over the remaining vesting period.

The proceeds received net of any directly attributable transaction costs are credited to share capital when the options are exercised.

(s) Provisions Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount can be made.

(t) Income Taxes Current income tax liabilities (and assets) for current and prior periods are recognised at the amounts expected to be paid to (or recovered from) the tax authorities, using the tax rates (and tax laws) that have been enacted or substantially enacted by the balance sheet date.

Deferred income tax assets/liabilities are recognised for all deductible/taxable temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements, except when the deferred income tax assets/liabilities arise from the initial recognition of an asset or liability in a transaction that is not a business combination and at the time of the transaction, affects neither accounting nor taxable profit or loss.

Deferred tax is provided in full, using the liability method. Tax rates enacted or substantially enacted by the balance sheet date are used to determine deferred tax.

Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.

(u) Revenue Recognition Revenue from the sale of the Group’s products after accounting for trade discounts, returns and goods and services tax is recognised on completion of delivery.

Revenue from the provision of services is recognised over the period in which the services are rendered.

Revenue from advertisements is recognised when the advertisement is published or broadcast.

Revenue from rental and rental-related services is recognised on a straight-line basis over the lease term.

Dividend income from investments other than subsidiaries is recognised when the right to receive payment is established and interest income is recognised on a time-apportioned basis.

Profit or loss on sale of investments is recognised on completion of sale.

76 NOTES TO THE FINANCIAL STATEMENTS AUGUST 31, 2006

2. significant Accounting Policies (CONT’D) (v) Leases When the Group is the lessee: Leases where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are recognised as an expense in the income statement on a straight-line basis over the period of the lease.

When the Group is the lessor: Assets leased out under operating leases are included in investment properties and property, plant and equipment. Rental income is recognised on a straight-line basis over the lease term.

(w) Segment Reporting Different business segments are identified based on the Group’s principal activities. The significant business segments of the Group are Newspaper and Magazine, Treasury and Investment and Property. A business segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns that are different from those of other business segments.

A geographical segment is engaged in providing products or services within a particular economic environment that is subject to risks and returns that are different from those of segments operating in other economic environments.

(x) Treasury Shares The consideration paid for treasury shares, including any directly attributable incremental costs, is deducted from shareholders’ equity until the shares are cancelled, reissued or disposed of. Where such shares are subsequently disposed or reissued, any consideration received, net of any directly attributable incremental transaction costs, is included in shareholders’ equity. Realised gain or loss on disposal or reissue of treasury shares are included in retained profit of the Company.

3. effects on financial statements ON adoption of new or revised FRS (a) FRS 39 (revised 2004) Financial Instruments: Recognition and Measurement Prior to the adoption of FRS 39, long-term investments in equity securities were stated at cost less diminution in value. Long-term investments in bonds were stated at cost, adjusted for amortisation of premium, accretion of discount and diminution in value. Short-term investments were stated at the lower of cost and realisable value on an individual basis. The fair values of the forward foreign exchange contracts and interest rate swaps were not recognised in the financial statements.

With the adoption of FRS 39, long-term and short-term investments are now measured at fair values with gains or losses recognised either in the income statement or the reserves. The fair values of the forward foreign exchange contracts are now recognised in the income statement while those of the interest rate swaps designated and qualifying as cash flow hedges are recognised in the reserves. In accordance with the requirements under the standard, the comparative figures for the financial year ended August 31, 2005 are not restated. Instead, the effect of adopting FRS 39 has been adjusted one-off to the opening reserves as at September 1, 2005. The Group considers that it is not practical to disclose the effects of adopting FRS 39 on the Group financial statements for the year ended August 31, 2006.

The transitional impact on the opening reserves and balance sheet items of the Group and Company on adopting FRS 39 on September 1, 2005 is illustrated in the table below:

GROUP COMPANY S$’000 S$’000 Increase/(Decrease) in: Retained profit 29,662 99 Fair value reserve 309,345 29,138 Hedging reserve (4,305) – 334,702 29,237 Long-term investments 286,017 29,285 Short-term investments 68,724 – Derivative financial instruments (current assets) 601 – Less: Derivative financial instruments (current liabilities) 7,199 48 Deferred taxation 13,441 – 334,702 29,237

77 NOTES TO THE FINANCIAL STATEMENTS AUGUST 31, 2006

3. effects on financial statements ON adoption of new or revised FRS (CONT’D) (b) FRS 102 Share-based Payments Under FRS 102, share options granted to employees are measured at fair value at the date of grant and recognised as an expense over the vesting period. Prior to the adoption of FRS 102, share options granted to employees did not result in any expense to the income statement.

This change in accounting policy has been accounted for retrospectively and accordingly, the 2005 comparatives are restated as follows:

GROUP COMPANY S$’000 S$’000

(Decrease)/Increase: Retained profit as at August 31, 2005 (8,942) (8,942) Share-based compensation reserve as at August 31, 2005 8,942 8,942

Staff costs 6,374 Profit after taxation (6,374)

Decrease in basic earnings per share (S$) (0.004) Decrease in diluted earnings per share (S$) (0.004)

The effects on the balance sheets as at August 31, 2006 and income statement for the financial year ended August 31, 2006 are as set out below:

(i) Consolidated Balance Sheet as at August 31, 2006

Increase/(Decrease) S$’000

Consolidated Balance Sheet Items at August 31, 2006

Retained profit (8,933) Share capital 1,480 Share-based compensation reserve 14,824

(ii) Consolidated Income Statement for the year ended August 31, 2006

Increase/(Decrease) S$’000

Consolidated Income Statement Items at August 31, 2006

Staff costs 7,371 Profit after taxation (7,371) Basic earnings per share (S$) (0.005) Diluted earnings per share (S$) (0.005)

(iii) Company Balance Sheet as at August 31, 2006

Increase/(Decrease) S$’000

Company Balance Sheet Items at August 31, 2006

Retained profit (8,933) Share capital 1,480 Share-based compensation reserve 14,824

78 NOTES TO THE FINANCIAL STATEMENTS AUGUST 31, 2006

4. critical Accounting Estimates and Judgements Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

(i) Critical accounting estimates and assumptions The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

• Estimated impairment of goodwill The Group tests annually whether goodwill has suffered any impairment, in accordance with the accounting policy in Note 2(d). The recoverable amounts of CGUs have been determined based on calculations which require the use of estimates. Methods of assessing the recoverable amount include estimating the appropriate earnings multiple to the earnings of the CGUs in some cases and estimating with reference to net asset value of the CGUs in other cases. The carrying amounts of goodwill at the balance sheet date are disclosed in Notes 12 and 15.

• Fair value estimation The fair value of financial instruments traded in an active market is based on quoted market prices at the balance sheet date. The quoted market price used for financial assets held by the Group is the current bid price. The fair value of interest rate swaps is calculated as the present value of the estimated future cash flow, discounted at actively quoted interest rates. The fair value of forward foreign exchange contracts is determined using forward exchange market rates at the balance sheet date.

The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. The Group uses a variety of methods and makes assumptions that are based on market conditions existing at each balance sheet date. Methods used include estimating with reference to recent arm’s length transactions and the underlying net asset value of the investee companies.

(ii) Critical judgements in applying the entity’s accounting policies • Impairment of available-for-sale financial assets The Group follows the guidance of FRS 39 (revised 2004) on determining when an investment is other-than- temporarily impaired. This determination requires significant judgement. The Group evaluates, among other factors, the duration and extent to which the fair value of an investment is less than its cost; and the financial health of and near-term business outlook for the investee, including factors such as industry and sector performance, changes in technology and operational and financing cash flow. The fair values of available-for-sale investments are disclosed in Notes 14 and 20.

79 NOTES TO THE FINANCIAL STATEMENTS AUGUST 31, 2006

5. share Capital and Treasury Shares

GROUP and COMPANY 2006 2005 Number Number of Shares of Shares ‘000 S$’000 ‘000 S$’000

Authorised Balance at beginning of financial year 5,000,000 1,000,000 5,000,000 1,000,000 Effect of Companies (Amendment) Act 2005* (5,000,000) (1,000,000) – – Balance at the end of financial year – – 5,000,000 1,000,000

Comprised of: Management shares – – 50,000 10,000 Ordinary shares – – 4,950,000 990,000 Balance at the end of financial year – – 5,000,000 1,000,000

Issued and fully paid Management shares 16,148 6,174 16,096 3,219 Ordinary shares 1,579,526 426,633 1,574,312 314,863 1,595,674 432,807 1,590,408 318,082 Treasury shares (3,001) (12,018) – – 1,592,673 420,789 1,590,408 318,082

Movements during the financial year were: Opening balance 1,590,408 318,082 1,582,635 316,527 Issue of ordinary shares fully paid under the Singapore Press Holdings Group (1999) Share Option Scheme 5,214 11,121 7,695 1,539 Issue of management shares fully paid in accordance with the Newspaper and Printing Presses Act 52 120 78 16 Transfer from share premium* – 98,975 – – Transfer from capital redemption reserve* – 4,509 – – 1,595,674 432,807 1,590,408 318,082 Purchase of treasury shares (3,001) (12,018) – – Closing balance 1,592,673 420,789 1,590,408 318,082

* Under The Companies (Amendment) Act 2005 that came into effect on January 30, 2006, the concept of par value and authorised share capital is abolished. Any amounts standing to the credit of the Company’s share premium account and capital redemption account shall become part of the Company’s share capital. Accordingly, the share premium account and capital redemption reserve account have been combined into the share capital account.

The holders of both management and ordinary shares rank pari passu in respect of all dividends declared by the Company and in respect of all bonus and rights issues made by the Company, as well as in the right to return of capital and to participation in all surplus assets of the Company in liquidation.

In terms of voting rights, both classes of shareholders are entitled either on a poll or by a show of hands to one vote for 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 management shares are entitled either on a poll or by a show of hands to two hundred votes for each management share held.

(i) Treasury shares The Company acquired 3,001,000 of its own shares through purchases on the Singapore Exchange during the financial year. The total amount paid to acquire the shares was S$12.0 million. The shares, held as treasury shares, were included as deduction against shareholders’ equity.

80 NOTES TO THE FINANCIAL STATEMENTS AUGUST 31, 2006

5. share Capital and Treasury Shares (CONT’D) (ii) Share options Share options are granted to good performing full-time employees on permanent tenure of employment in the Company. Employees with at least 3 years’ service but with less than 8 years’ service in the year in which the grant was made, are eligible for 2 allocations on alternate years. Employees with a minimum of 8 years of service will be eligible for allocation every year. The Remuneration Committee (the “Committee”) responsible for administering the 1999 Scheme will also take into consideration any other factor that the Committee, in its absolute discretion, considers relevant.

The exercise price of the granted options is equal to the average of the closing prices of the Company’s ordinary shares on the Singapore Exchange for the five market days immediately preceding the date of grant. The vesting of granted options is conditional on the key management or employee completing another 2 years of service.

Once the options are vested, they are exercisable for a contractual option term of 8 years from the date the options are vested. The options may be exercised in full or in part on the payment of the exercise price. The Group has no legal or constructive obligation to repurchase or settle the options in cash.

On December 16, 2005, options on 17,412,250 shares with exercise price of S$4.30 per share were granted pursuant to the 1999 Scheme. These options are exercisable from December 17, 2007 and expire on December 16, 2015.

Details of the unissued shares of the Company under option at the end of the financial year are as follows:

Singapore Press Holdings Group (1999) Share Option Scheme (“1999 Scheme”)

Date of Expiry Exercise Balance Options Options Balance Grant Date Price 1.9.05* Exercised Cancelled 31.8.06

Oct 27, 1999 Oct 27, 2009 S$5.60 9,628,375 – (439,025) 9,189,350 Oct 30, 2000 Oct 30, 2010 S$4.78 10,604,175 – (557,600) 10,046,575 Nov 6, 2001 Nov 6, 2011 S$3.03 2,072,325 (467,725) (10,975) 1,593,625 Oct 28, 2002 Oct 28, 2012 S$3.91 7,946,275 (1,666,800) (95,875) 6,183,600 Dec 16, 2003 Dec 16, 2013 S$3.69 14,431,300 (3,079,625) (74,800) 11,276,875 Feb 1, 2004 Feb 1, 2014 S$3.83 85,000 – – 85,000 Dec 21, 2004 Dec 21, 2014 S$4.54 16,147,000 – (429,675) 15,717,325 Dec 16, 2005 Dec 16, 2015 S$4.30 17,412,250 – (372,300) 17,039,950 78,326,700 (5,214,150) (1,980,250) 71,132,300

* Or later date of grant.

Out of the outstanding options on 71,132,300 shares (2005: 60,914,450), options on 38,375,025 shares (2005: 30,251,150) were exercisable. Options exercised in 2006 resulted in 5,214,150 shares (2005: 7,694,500) being issued at an average price of S$3.70 (2005: S$3.65) each.

The fair value of the share options granted on December 16, 2005 is determined using the Black-Scholes valuation model. The significant inputs into the model are shown below:

2006

Share price (S$) 4.22 Exercise price (S$) 4.30 Dividend yield (%) 5.20 Risk-free interest rate (%) 3.09 Expected volatility (%) 23.00 Expected life of option (years) 3.75

The expected volatility measured at the standard deviation of expected share price returns is based on statistical analysis of weekly closing share prices over the last two years prior to the dates of grant for the December 16, 2003, February 1, 2004 and December 21, 2004 grants. It reflects the assumption that historical volatility is indicative of future trends and took into account announcement of price-sensitive events such as capital reduction and sale of non-core assets that took place during the two years period. The expected life of the option is based on historical data and is also not necessarily indicative of exercise pattern that may occur.

81 NOTES TO THE FINANCIAL STATEMENTS AUGUST 31, 2006

6. reserves

GROUP COMPANY 2006 2005 2006 2005 Restated Restated S$’000 S$’000 S$’000 S$’000

Composition: Capital redemption reserve* – 4,509 – 4,509 Capital reserve [Note (a)] 2,005 2,005 – – Share-based compensation reserve 14,824 8,942 14,824 8,942 Hedging reserve 7,540 – – – Fair value reserve [Note (b)] 308,135 – 36,188 – Exchange translation reserve (80) 222 – – 332,424 15,678 51,012 13,451

* Under The Companies (Amendment) Act 2005 that came into effect on January 30, 2006, any amounts standing to the credit of the Company’s capital redemption account shall become part of the Company’s share capital. Accordingly, the capital redemption reserve account has been combined into the share capital account.

GROUP 2006 2005 S$’000 S$’000

(a) Capital reserve is made up as follows: Distributable 1,375 1,375 Non-distributable 630 630 2,005 2,005

GROUP COMPANY 2006 2006 S$’000 S$’000

(b) Opening balance – – Transitional adjustment on adoption of FRS 39 309,345 29,138 Net gain on fair value changes during the financial year 7,561 7,050 Recognised in income statement on sale of investments (8,771) – 308,135 36,188

7. tAxation (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 financial year are as follows:

2006 GROUP

(i) Deferred Tax Liabilities

Accelerated Tax Fair Value Depreciation Changes Others Total S$’000 S$’000 S$’000 S$’000

Opening balance 72,860 – 2,559 75,419 Effect of adoption of FRS 39 [Note 3(a)] – 13,441 – 13,441 Credited to income statement (2,682) – (311) (2,993) Credited to equity – (1,326) – (1,326) Reclassed to current taxation – (5,128) – (5,128) 70,178 6,987 2,248 79,413

82 NOTES TO THE FINANCIAL STATEMENTS AUGUST 31, 2006

7. tAxation (CONT’D) (a) Deferred Taxation (cont’d)

2006 GROUP

(ii) Deferred Tax Assets Provisions S$’000

Opening balance (7,642) Charged to income statement 256 Exchange difference 19 Closing balance (7,367)

2005 GROUP

(i) Deferred Tax Liabilities Accelerated Tax Depreciation Others Total S$’000 S$’000 S$’000

Opening balance 78,286 2,669 80,955 Credited to income statement (5,426) (110) (5,536) Closing balance 72,860 2,559 75,419

(ii) Deferred Tax Assets Provisions S$’000

Opening balance (8,829) Charged to income statement 1,359 Acquisition of subsidiaries (48) Other adjustments (124) Closing balance (7,642)

2006 COMPANY

(i) Deferred Tax Liabilities Accelerated Tax Depreciation S$’000

Opening balance 63,329 Credited to income statement (3,677) Closing balance 59,652

(ii) Deferred Tax Assets Provisions S$’000

Opening balance (7,434) Charged to income statement 236 Closing balance (7,198)

83 NOTES TO THE FINANCIAL STATEMENTS AUGUST 31, 2006

7. tAxation (CONT’D) (a) Deferred Taxation (cont’d)

2005 COMPANY

(i) Deferred Tax Liabilities

Accelerated Tax Depreciation S$’000

Opening balance 68,017 Credited to income statement (4,688) Closing balance 63,329

(ii) Deferred Tax Assets

Provisions S$’000

Opening balance (8,807) Charged to income statement 1,373 Closing balance (7,434)

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred taxes relate to the same fiscal authority. The following amounts, determined after appropriate offsetting, are shown in the balance sheets:

GROUP COMPANY 2006 2005 2006 2005 S$’000 S$’000 S$’000 S$’000

Deferred tax liabilities 72,046 67,777 52,454 55,895

Deferred tax taken to equity during the financial year is as follows:

GROUP 2006 2005 S$’000 S$’000

Fair value reserve (3,211) – Hedging reserve 1,885 – (1,326) –

Deferred tax assets are recognised for tax losses carried forward to the extent that realisation of the related tax benefits through future taxable profits is probable. The Group has unrecognised tax losses and capital allowances of S$4,049,000 (2005: Nil) and S$414,000 (2005: Nil) which can be carried forward and used to offset against future taxable income subject to meeting certain statutory requirements by those companies with unrecognised tax losses and capital allowances in their respective countries of incorporation.

84 NOTES TO THE FINANCIAL STATEMENTS AUGUST 31, 2006

7. tAxation (CONT’D) (b) Tax Expense

GROUP 2006 2005 S$’000 S$’000

Tax expense attributable to profit is made up of:

Current year Current tax 87,212 78,794 Deferred tax (3,859) (4,174) 83,353 74,620 Prior years Current tax (3,399) (4,642) Deferred tax 1,122 (3) 81,076 69,975

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 2006 2005 Restated S$’000 S$’000

Profit before taxation 509,420 558,364 Add: Share of net losses of associates and jointly controlled entity 185 3,590 Adjusted profit before taxation 509,605 561,954

Tax calculated at corporate tax rate of 20% (2005: 20%) 101,921 112,391 Singapore statutory stepped income exemption (173) (179) Income taxed at concessionary rate (721) (655) Utilisation of previously unrecognised capital allowance/tax losses – (11,034) Income not subject to tax (22,149) (35,797) Expenses not deductible for tax purposes 5,666 10,663 Deferred tax benefits not recognised 462 391 Double tax relief for contributions made to Institutes of Public Character (578) (987) Effect of different tax rates in other countries 117 150 Others (1,192) (323) 83,353 74,620

8. borrowings

GROUP 2006 2005 S$’000 S$’000

Term loans 611,445 650,000

Borrowings are repayable: Within 1 year 667 – Between 1 - 5 years 610,778 650,000 611,445 650,000

85 NOTES TO THE FINANCIAL STATEMENTS AUGUST 31, 2006

8. borrowings (CONT’D) (a) At beginning of the financial year, Times Properties Private Limited, a subsidiary of the Group, had a term loan facility available for drawdown up to the amount of S$650 million (2005: S$700 million) for a tenure of one year which ended on July 11, 2006. As at July 11, 2006, total loan drawn down amounted to S$650 million and the subsidiary had made partial repayment of S$40 million for the term loan.

On July 11, 2006, the term loan facility was refinanced under Orchard 290 Pte Ltd (“Orchard 290”), another subsidiary of the Group. The new term loan, available for drawdown up to the amount of S$610 million (2005: Nil), has a tenure of five years and was classified accordingly as non-current liability. No repayment of the new term loan was made during the financial year.

The new term loan facility was secured by way of a legal mortgage on the Group’s investment property (Note 10), a debenture over the assets of Orchard 290, an assignment of rental proceeds from the investment property and the insurances on the investment property.

After taking into account interest rate swap arrangement totalling S$500 million (2005: S$645 million), the effective interest rate as at the balance sheet date on the outstanding term loan facility of S$610 million was 3.61% per annum (2005: S$650 million, 3.23% per annum).

(b) SPH MediaBoxOffice Pte Ltd (“SPHMBO”), another subsidiary of the Group, had a term loan facility available for drawdown up to S$2 million (2005: Nil) with a tenure of three years and a fixed repayment schedule commencing September 30, 2005. Total loan drawn down on October 31, 2005 amounted to S$2 million and a total of S$555,000 had been repaid by SPHMBO during the financial year.

The term loan facility was secured by way of fixed charge on LED and plasma displays (“Secured Assets”) of SPHMBO [Note 9(a)], an assignment of all rights and benefits arising from all advertising/leasing contracts in relation to the Secured Assets and insurances on the Secured Assets.

The effective interest rate as at the balance sheet date on the outstanding term loan facility of S$1.4 million was 5% per annum (2005: Nil).

(c) In respect of bank borrowings, where appropriate, the Group’s policy is to minimise its interest rate risk exposure by entering into interest rate swaps over the duration of its borrowings. Accordingly, Orchard 290 entered into an interest rate swap contract as part of its interest rate risk management. Under the interest rate swap, Orchard 290 agreed with another party to exchange at specified intervals, the difference between fixed rate and floating rate interest amounts calculated by reference to the agreed notional principal amounts. At August 31, 2006, the fixed interest rate was 3.189% (2005: 2.55% to 3.44%) per annum and floating rates are referenced to swap offer rate, which is repriced every three months.

The notional principal amounts of the outstanding interest rate swap contract and its corresponding fair value as at August 31, are:

GROUP 2006 2005 S$’000 S$’000

Notional due: Within 1 year – 645,000 Between 1- 5 years 500,000 –

Positive/(Negative) fair values* (Note 21) 9,855 (5,094)

* The fair value of interest rate swap contract has been calculated (using rates quoted by the Group’s bankers) assuming the contract is terminated at the balance sheet date. The fair value was not recognised in the consolidated financial statements for 2005.

(d) The fair values of both term loans of S$611.4 million as at the balance sheet date approximate their carrying values as the loans carry floating interest rates.

86 NOTES TO THE FINANCIAL STATEMENTS AUGUST 31, 2006

9. property, Plant and Equipment (a) 2006

GROUP Plant Furniture Land and Buildings and and Motor Freehold Leasehold Equipment Fittings Vehicles Total S$’000 S$’000 S$’000 S$’000 S$’000 S$’000

Cost Opening balance 28,842 228,871 759,388 16,120 1,930 1,035,151 Reclassification – – (138) 138 – – Acquisition of business by a subsidiary – – 2,571 – – 2,571 Acquisition of a subsidiary – 2 80 1 – 83 Foreign exchange difference – – (131) (78) (4) (213) Additions – 23 3,947 334 501 4,805 Transfer in from capital work-in-progress – – 15,156 – – 15,156 Disposals – – (35,272) (263) (1,158) (36,693) Closing balance 28,842 228,896 745,601 16,252 1,269 1,020,860

Accumulated Depreciation and Impairment Losses Opening balance 8,484 89,072 414,452 8,503 1,362 521,873 Foreign exchange difference – – (113) (39) (1) (153) Depreciation charge for the year 212 6,129 41,223 1,268 233 49,065 Disposals – – (35,206) (210) (1,008) (36,424) Closing balance 8,696 95,201 420,356 9,522 586 534,361

Net book value at August 31, 2006 20,146 133,695 325,245 6,730 683 486,499 Capital work-in-progress – – 15,392 – – 15,392 Closing balance 20,146 133,695 340,637 6,730 683 501,891

Capital work-in-progress Opening balance – – 17,080 – – 17,080 Additions – – 13,468 – – 13,468 Transfer out to Property, Plant and Equipment – – (15,156) – – (15,156) Closing balance – – 15,392 – – 15,392

A term loan is secured on SPHMBO’s plant and equipment with a total carrying amount of S$1.6 million [Note 8(b)].

87 NOTES TO THE FINANCIAL STATEMENTS AUGUST 31, 2006

9. property, Plant and Equipment (CONT’D) (b) 2005

GROUP Plant Furniture Land and Buildings and and Motor Freehold Leasehold Equipment Fittings Vehicles Total S$’000 S$’000 S$’000 S$’000 S$’000 S$’000 S$’000 Cost Opening balance 28,842 228,630 788,433 18,369 2,363 1,066,637 Reclassification – – (884) 884 – – Acquisition of subsidiaries – – 592 269 32 893 Foreign exchange difference – – (5) (3) 2 (6) Additions – 241 3,657 1,159 362 5,419 Transfer in from capital work-in-progress – – 4,884 – – 4,884 Disposals – – (37,289) (4,558) (829) (42,676) Closing balance 28,842 228,871 759,388 16,120 1,930 1,035,151

Accumulated Depreciation and Impairment Losses Opening balance 8,272 82,500 410,097 10,080 1,863 512,812 Reclassification – – (375) 375 – – Foreign exchange difference – – 9 1 – 10 Depreciation charge for the year 212 6,572 41,694 1,560 262 50,300 Impairment charge for the year – – 298 390 – 688 Disposals – – (37,271) (3,903) (763) (41,937) Closing balance 8,484 89,072 414,452 8,503 1,362 521,873

Net book value at August 31, 2005 20,358 139,799 344,936 7,617 568 513,278 Capital work-in-progress – – 17,080 – – 17,080 Closing balance 20,358 139,799 362,016 7,617 568 530,358

Capital work-in-progress Opening balance – – 11,706 – – 11,706 Additions – – 10,258 – – 10,258 Transfer out to Property, Plant and Equipment – – (4,884) – – (4,884) Closing balance – – 17,080 – – 17,080

88 NOTES TO THE FINANCIAL STATEMENTS AUGUST 31, 2006

9. property, Plant and Equipment (CONT’D) (c) 2006

COMPANY Plant Furniture and and Motor Equipment Fittings Vehicles Total S$’000 S$’000 S$’000 S$’000

Cost Opening balance 668,548 12,633 1,892 683,073 Reclassification (138) 138 – – Additions 1,880 30 499 2,409 Transfer in from capital work-in-progress 15,156 – – 15,156 Transfer in 6 – – 6 Transfer out (68) – – (68) Disposals (34,780) (185) (1,135) (36,100) Closing balance 650,604 12,616 1,256 664,476

Accumulated Depreciation and Impairment Losses Opening balance 373,457 6,810 1,343 381,610 Depreciation charge for the year 33,484 936 228 34,648 Transfer out (67) – – (67) Disposals (34,738) (165) (998) (35,901) Closing balance 372,136 7,581 573 380,290

Net book value at August 31, 2006 278,468 5,035 683 284,186 Capital work-in-progress 15,392 – – 15,392 Closing balance 293,860 5,035 683 299,578

Capital work-in-progress Opening balance 17,080 – – 17,080 Additions 13,468 – – 13,468 Transfer out to Property, Plant and Equipment (15,156) – – (15,156) Closing balance 15,392 – – 15,392

89 NOTES TO THE FINANCIAL STATEMENTS AUGUST 31, 2006

9. property, Plant and Equipment (CONT’D) (d) 2005

COMPANY Plant Furniture and and Motor Equipment Fittings Vehicles Total S$’000 S$’000 S$’000 S$’000

Cost Opening balance 673,153 12,945 2,176 688,274 Reclassification (884) 884 – – Additions 3,047 30 297 3,374 Transfer in from capital work-in-progress 4,847 – – 4,847 Transfer in 2 – – 2 Transfer out (20) – – (20) Disposals (11,609) (1,226) (581) (13,416) Closing balance 668,536 12,633 1,892 683,061

Accumulated Depreciation and Impairment Losses Opening balance 350,166 5,470 1,676 357,312 Reclassification (375) 375 – – Depreciation charge for the year 34,996 1,187 248 36,431 Impairment charge for the year 298 390 – 688 Transfer out (9) – – (9) Disposals (11,631) (612) (581) (12,824) Closing balance 373,445 6,810 1,343 381,598

Net book value at August 31, 2005 295,091 5,823 549 301,463 Capital work-in-progress 17,080 – – 17,080 Closing balance 312,171 5,823 549 318,543

Capital work-in-progress Opening balance 11,706 – – 11,706 Additions 10,258 – – 10,258 Transfer out to Property, Plant and Equipment (4,847) – – (4,847) Transfer out to a subsidiary (37) – – (37) Closing balance 17,080 – – 17,080

90 NOTES TO THE FINANCIAL STATEMENTS AUGUST 31, 2006

10. investment Property Details of the investment property are as follows:

GROUP Freehold Land and Building 2006 2005 S$’000 S$’000

Cost 923,827 923,827 Development expenditure at cost 188,128 186,772 Loan interest capitalised 18,935 18,935 1,130,890 1,129,534 Impairment losses – (70,534) 1,130,890 1,059,000

Gross rental income 93,278 84,293

Fair value 1,520,000 1,380,000

Fair value of the investment property, the Paragon on Orchard Road was stated based on an independent professional valuation, determined on an open market value basis and carried out on June 26, 2006 (2005: June 27, 2005). The investment property is mortgaged to a bank as security for loan facilities granted to Orchard 290 (Note 8).

During the financial year, a write-back of impairment losses totalling S$70.5 million was made for the Paragon in view of the strong sustained valuation.

11. interests in Subsidiaries and Amount Owing by/to Subsidiaries (a) Unquoted equities

COMPANY 2006 2005 S$’000 S$’000

Unquoted equities, at cost 476,812 476,812 Allowance for impairment losses* (90,000) (90,000) 386,812 386,812

Details of subsidiaries are set out in Note 32.

(b) Amount owing by subsidiaries

COMPANY 2006 2005 S$’000 S$’000

Amount owing by subsidiaries (non-trade) [Note (c)] 758,986 797,999 Loans to subsidiaries 202,981 197,056 961,967 995,055 Allowance for impairment* (190,676) (190,676) 771,291 804,379

* Mainly attributable to the cost of investment in and loan extended to SPH MediaWorks Ltd (under liquidation). The provisions were made solely at entity’s level and had no impact on the Group financial statements.

(c) The amount owing by/to subsidiaries are non-trade, unsecured, interest free and have no fixed repayment terms. Repayments are not expected within the next twelve months.

91 NOTES TO THE FINANCIAL STATEMENTS AUGUST 31, 2006

12. interests in Associates and Amount Owing by/to Associates (a) Unquoted equities

GROUP COMPANY 2006 2005 2006 2005 S$’000 S$’000 S$’000 S$’000

Unquoted equities, at cost 83,138 43,183 29,160 29,160 Share of net losses (5,415) (6,369) – – Impairment losses (7,994) (8,739) – – 69,729 28,075 29,160 29,160

The summarised financial information of associates were as follows:

GROUP 2006 2005 S$’000 S$’000

Assets 346,281 166,702 Liabilities 186,401 120,318 Revenues 324,097 141,024 Net loss (3,789) (17,088)

Share of an associate’s contingent liabilities 1,517 –

The Group’s interests in associates at August 31, 2006 include goodwill of S$42.7 million (2005: S$15.1 million).

The Group has not recognised losses amounting to S$17,000 (2005: S$123,000) for Shanghai YouHer Consultancy Limited as full provision for impairment has been made. The accumulated losses not recognised were S$140,000 (2005: S$123,000).

Details of associates are set out in Note 33.

(b) Amount owing by/to associates

GROUP COMPANY 2006 2005 2006 2005 S$’000 S$’000 S$’000 S$’000

Amount owing by associate (non-trade) 51 29 20 12 Loan to an associate 6,000 6,000 6,000 6,000 6,051 6,029 6,020 6,012

Amount owing to an associate (non-trade) – (1) – –

The amount owing by/to associates are unsecured, interest free and have no fixed repayment terms. Repayments are not expected within the next twelve months.

The loan to an associate is unsecured and has a tenure of 3 years commencing May 1, 2005. The effective interest rate as at the balance sheet date was 3.82% per annum. The fair value of the loan as at the balance sheet date approximates its carrying value as the loan carries a floating interest rate referenced to the Singapore dollar swap offer rate, which is repriced every six months.

92 NOTES TO THE FINANCIAL STATEMENTS AUGUST 31, 2006

13. interests in Jointly Controlled Entity and Amount Owing by Jointly Controlled Entity The Group has an interest in a jointly controlled entity, which provides consultancy services in the People’s Republic of China. The entity is considered a joint venture because all key operational and financial decisions require the unanimous approval of its venturers.

GROUP 2006 2005 S$’000 S$’000

Unquoted equities, at cost 339 – Impairment loss# (339) – – –

Amount owing by jointly controlled entity – 33

# The Group has committed to inject a further S$789,000 into the jointly controlled entity after August 31, 2006. This has been fully provided for as impairment loss. The total impairment loss of S$1,128,000 has been classified under exceptional items in Note 29.

The Group’s interests in the jointly controlled entity are equity accounted for in the consolidated balance sheet and income statement. The following amounts represent the Group’s effective share of 50.00% (2005: 47.50%) of the assets and liabilities and income and expenses of the jointly controlled entity as at August 31, 2006 should proportionate consolidation be adopted.

GROUP 2006 2005 S$’000 S$’000

Assets Current assets 192 112 Non-current assets 33 31 225 143

Liabilities Current liabilities 769 581 769 581

Net liabilities (544) (438)

Sales 305 191 Expenses (532) (461) Net loss (227) (270)

Capital commitment in relation to interests in jointly controlled entity 789 337

Details of the jointly controlled entity are included in Note 34.

93 NOTES TO THE FINANCIAL STATEMENTS AUGUST 31, 2006

14. long-Term Investments With the adoption of FRS 39 (revised 2004) on September 1, 2005, the Group’s long-term investments classified as available-for-sale are stated at fair values. In 2005, long-term investments in equity securities were stated at cost less diminution in value while long-term investments in bonds were stated at cost, adjusted for amortisation of premium, accretion of discount and diminution in value.

Available-for-sale financial assets include the following:

GROUP COMPANY 2006 2005 2006 2005 At Fair At Fair At Fair At Fair Value Value At Cost Value Value At Cost S$’000 S$’000 S$’000 S$’000 S$’000 S$’000

Quoted securities: – Equities 346,703 337,421 59,043 39,273 32,370 3,086 – Bonds 39,142 51,043 48,000 – – – 385,845 388,464 107,043 39,273 32,370 3,086 Unquoted securities: – Equities 17,614 18,274 27,462 – – 2,980 – Other investments 7 284 453 – 277 425 Allowance for diminution in value of investments – – (13,953) – – (3,129) 403,466 407,022 121,005 39,273 32,647 3,362

15. intangible Assets

GROUP 2006 2005 S$’000 S$’000

Goodwill arising on consolidation [Note (a)] 10,075 10,075 Trademark and licences [Note (b)] 1,479 954 11,554 11,029

(a) Goodwill arising on consolidation

GROUP 2006 2005 S$’000 S$’000

Opening balance 10,075 – Acquisition of interests in subsidiaries 257 23,844 Acquisition of business by a subsidiary 98 – Divestment of interests in subsidiaries – (3,348) Impairment of goodwill (Note 29) (355) (10,421) Closing balance 10,075 10,075

94 NOTES TO THE FINANCIAL STATEMENTS AUGUST 31, 2006

15. intangible Assets (CONT’D) (b) Trademark and licences

GROUP 2006 2005 S$’000 S$’000

Opening balance 954 – Acquired during the financial year 1,100 1,506 Amortisation charge (575) (552) Closing balance 1,479 954

Cost 2,606 1,506 Accumulated amortisation (1,127) (552) 1,479 954

16. other Non-Current Assets

GROUP COMPANY 2006 2005 2006 2005 S$’000 S$’000 S$’000 S$’000

Staff loans 5,177 4,691 5,029 4,616

17. stocks

GROUP COMPANY 2006 2005 2006 2005 S$’000 S$’000 S$’000 S$’000

Raw materials and consumable stores 35,808 31,881 35,164 31,602 Allowance for stocks (1,229) (1,011) (1,229) (1,011) 34,579 30,870 33,935 30,591

During the financial year, the Group made an allowance of S$218,000 for stocks (2005: S$311,000). The allowance had been included in materials, consumables and broadcasting costs in the income statement.

18. trade Debtors

GROUP COMPANY 2006 2005 2006 2005 S$’000 S$’000 S$’000 S$’000

Amount owing 110,166 103,349 94,125 89,695 Allowance for impairment (9,824) (10,689) (8,438) (9,334) 100,342 92,660 85,687 80,361

95 NOTES TO THE FINANCIAL STATEMENTS AUGUST 31, 2006

19. other Debtors and Prepayments

GROUP COMPANY 2006 2005 2006 2005 S$’000 S$’000 S$’000 S$’000

Accrued interest 2,044 1,775 9 11 Sundry debtors (non-trade) 1,733 2,595 873 681 Amount due from liquidator of a subsidiary 2,959 12,444 – 2,841 Prepayments 2,756 3,119 1,809 1,935 Staff loans 1,601 1,595 1,530 1,546 11,093 21,528 4,221 7,014

20. short-Term Investments With the adoption of FRS 39 (revised 2004) on September 1, 2005, the Group’s short-term investments are stated at fair values. In 2005, short-term investments were stated at the lower of cost and realisable value on an individual basis.

(a) Internally managed

(i) Available-for-sale financial assets include the following:

GROUP 2006 2005 At Fair At Fair Value Value At Cost S$’000 S$’000 S$’000

Quoted securities: – Equities 84,450 106,016 70,033 – Bonds 278,050 213,315 221,637 – Accretion of discount on bonds – – 1,386 – Amortisation of premium on bonds – – (114) 362,500 319,331 292,942 Unquoted securities: – Equities 56,166 17,132 18,744 418,666 336,463 311,686 Allowance for diminution in value of investments – Quoted – – (14,230) – Unquoted – – (2,388) 418,666 336,463 295,068

(ii) Financial assets at fair value through profit or loss include the following:

GROUP 2006 2005 At Fair At Fair Value Value At Cost S$’000 S$’000 S$’000

Quoted securities (designated at fair value on initial recognition) – Bond 4,171 4,309 4,000

96 NOTES TO THE FINANCIAL STATEMENTS AUGUST 31, 2006

20. short-Term Investments (CONT’D) (b) Funds under management

Financial assets at fair value through profit or loss include the following:

GROUP 2006 2005 At Fair At Fair Value Value At Cost S$’000 S$’000 S$’000

Quoted securities: – Equities 85,125 136,967 117,210 – Bonds 148,680 245,887 242,766 233,805 382,854 359,976 Allowance for diminution in value of quoted securities – – (4,142) 233,805 382,854 355,834 Bank balances 15,005 13,217 13,217 Accrued income 1,745 2,388 2,388 Due to brokers (2,196) (16,917) (16,917) Designated as held for trading 248,359 381,542 354,522

The funds under management are denominated in the following currencies:

GROUP 2006 2005 At Fair At Fair Value Value At Cost S$’000 S$’000 S$’000

United States Dollar 211,669 294,095 281,363 Euro 3,151 36,877 31,824 Japanese Yen 6,900 18,013 14,908 United Kingdom Pound 2,873 13,979 11,982 Others 23,766 18,578 14,445 248,359 381,542 354,522

Total Short-Term Investments Available-for-sale financial assets 418,666 336,463 295,068 Financial assets at fair value through profit or loss 252,530 385,851 358,522 671,196 722,314 653,590

97 NOTES TO THE FINANCIAL STATEMENTS AUGUST 31, 2006

21. Derivative Financial Instruments Analysed as:

GROUP 2006 Contract/ Notional Fair Value Amount Assets Liabilities S$’000 S$’000 S$’000

Cash-flow hedge – Interest-rate swap [Note 8(c)] 500,000 9,855 – Non-current portion 9,855 –

Derivatives not designated as hedges – Currency forwards 158,460 1,524 – – Cross currency swap 7,052 815 – Current portion 2,339 –

22. other Creditors and Accrued Liabilities

GROUP COMPANY 2006 2005 2006 2005 S$’000 S$’000 S$’000 S$’000

Accrued operating expenses 102,926 105,271 89,890 93,521 Sundry creditors (non-trade) 9,978 10,489 9,332 9,776 Customers’ deposits and credits – 313 – – Amounts due to brokers 6,729 8,994 – – 119,633 125,067 99,222 103,297

23. cApital and Other Commitments

GROUP COMPANY 2006 2005 2006 2005 S$’000 S$’000 S$’000 S$’000

Commitments for:

(a) Capital expenditure: Authorised and contracted for 14,470 18,193 12,908 17,878 Authorised but not contracted for 22,764 13,734 10,749 12,983

(b) Non-cancellable operating leases payable: Within 1 year 5,281 4,020 226 220 Between 1 – 5 years 14,725 14,051 14 76 After 5 years 136,079 151,467 – –

The Group leases various residential/commercial space and plant and machinery under non-cancellable operating lease agreements with varying terms and clauses.

(c) Non-cancellable operating leases receivable: Within 1 year 96,429 89,696 – – Between 1 – 5 years 143,359 97,796 – – After 5 years 800 314 – –

The Group leases to third parties various residential/commercial space under non-cancellable operating lease agreements with varying terms and clauses.

98 NOTES TO THE FINANCIAL STATEMENTS AUGUST 31, 2006

24. operating Revenue

GROUP 2006 2005 S$’000 S$’000

Newspaper and Magazine Sale of services – Advertisements 676,309 664,235 Sale of goods – Circulation 208,866 204,810 Others 21,811 22,738 906,986 891,783 Property Rental and rental-related services 98,704 89,445

Others Sale of services – Advertisements 8,014 15,365 Sale of services – Broadcasting and multimedia services 7,656 10,919 15,670 26,284

1,021,360 1,007,512

25. staff Costs

GROUP 2006 2005 Restated* S$’000 S$’000

(a) Staff costs: Salaries, bonuses and other costs 237,749 237,793 Employers’ contribution to defined contribution plans 22,889 24,033 Share options granted to employees 7,371 6,374 268,009 268,200

(b) Average number of employees 3,540 3,563

* Restated to take into account the retrospective adjustments relating to FRS 102 – Share-based Payment for share options granted to employees.

26. other Operating Expenses

GROUP 2006 2005 S$’000 S$’000

Included in other operating expenses are:

Audit fees: Company’s auditors 393 299 Other auditors 24 63

Non-audit fees#: Company’s auditors 166 198

Rental expense – Operating lease 6,275 4,737

Net foreign exchange loss from operations 1,978 2,231

Amortisation of intangible assets 575 552

# Non-audit fees are mainly for services relating to non-statutory audit/review assignments.

99 NOTES TO THE FINANCIAL STATEMENTS AUGUST 31, 2006

27. finance Costs

GROUP 2006 2005 S$’000 S$’000

Interest on bank loans 20,583 22,526 Fair value loss on cash flow hedge* 30 – Interest on bank loans 20,613 22,526

* In relation to interest rate swap arrangements in Note 8(c).

28. net Income from Investments

GROUP 2006 2005 S$’000 S$’000

Deposits interest 2,619 1,820 Interest from bonds – Available-for-sale 7,866 9,759 – Fair value through profit or loss 198 381 Dividend from equities 41,463 22,160 Foreign exchange loss (843) (715) Profit on sale of investments: Short-term investments – Available-for-sale 19,869 29,491 – Fair value through profit or loss – 1,284 Long-term investments^ – Available-for-sale 263 145,094 Other investment income# – 13,417 71,435 222,691 Fair value loss of internally-managed assets at fair value through profit or loss (138) – Fair value gain of derivative instruments 4,588 – Impairment of investments (4,220) – Accretion of discount on bonds – 2 Amortisation of premium on bonds – (89) Write-back/(Allowance) for diminution in value of investments: Quoted – 333 Unquoted – (1,890) 71,665 221,047 Income from funds under management [Note (a)] 10,010 27,562 81,675 248,609

^ Profit on sale of long-term investments during the preceding financial year included gain of S$128.5 million on disposal of a substantial portion of the Group’s interest in StarHub Limited.

# Comprised mainly income arising from capital reduction exercise undertaken by an investee company during the preceding financial year.

(a) Arising from the adoption of FRS 39 (revised 2004) in the financial year, funds under management is classified as financial assets at fair value through profit or loss. Henceforth, income from funds under management comprises realised and unrealised gains and losses arising from changes in fair value of funds under management.

100 NOTES TO THE FINANCIAL STATEMENTS AUGUST 31, 2006

29. exceptional Items

GROUP 2006 2005 S$’000 S$’000

Write-back of impairment losses on investment property (Note 10) 70,534 – Impairment loss in relation to acquisition of a subsidiary (1,369) – Impairment loss on interests in associates (1,200) (105) Impairment loss on interest in a jointly controlled entity (1,128) – Impairment loss on goodwill on acquisition of subsidiaries [Note 15(a)] (355) (10,421) Write-back of impairment loss on interest in an associate 310 – Gain on partial disposal of interest in a subsidiary 52 – Charges arising from the merger of the Group’s free-to-air television broadcasting and free newspaper business with MediaCorp Pte Ltd – (25,857) Impairment loss on goodwill on acquisition of an associate – (2,519) Gain on divestment of interests in certain subsidiaries and an associate following the restructuring of Blu Inc group of companies – 1,048 Impairment loss on property, plant and equipment – (688) 66,844 (38,542)

30. Dividends

GROUP AND COMPANY 2006 2005 S$’000 S$’000

Dividends paid: – Final dividend of 10 cents per share less tax at 20% in respect of previous financial year (2005: 10 cents per share less tax at 20%) 127,345 127,059 – Special final net dividend of 7.8 cents per share in respect of previous financial year (2005: 11.25 cents per share less tax at 20%) 124,162 142,941 – Interim tax exempt dividend of 7.0 cents per share (2005: 3.75 cents per share less tax at 20%) 111,679 47,687 – Nil special interim dividend (2005: 5 cents per share less tax at 20%) – 63,583 363,186 381,270

(a) The Directors have proposed a final tax-exempt (one-tier) dividend of 8 cents per share and a special final tax-exempt (one-tier) dividend of 9 cents per share for 2006, amounting to a total of S$270,754,000.

(b) These financial statements do not reflect these proposed dividends, which will be accounted for in shareholders’ equity as an appropriation of retained earnings in the financial year ending August 31, 2007 when they are approved at the next annual general meeting.

101 NOTES TO THE FINANCIAL STATEMENTS AUGUST 31, 2006

31. eArnings per Share

GROUP 2006 2005 Basic Diluted Basic Diluted Restated Restated S$’000 S$’000 S$’000 S$’000

Profit attributable to shareholders 428,460 428,460 488,320 488,320

Number of Shares Number of Shares ’000 ’000 ’000 ’000

Weighted average number of shares 1,592,935 1,592,935 1,587,971 1,587,971 Adjustment for assumed conversion of share options – 2,707 – 4,463 Weighted average number of shares used to compute earnings per share 1,592,935 1,595,642 1,587,971 1,592,434

2006 2005 Basic Diluted Basic Diluted Restated Restated

Earnings per share (S$) – before exceptional items 0.23 0.23 0.33 0.33 – after exceptional items 0.27 0.27 0.31 0.31

32. subsidiaries

Effective % of Country of Class of Cost of Equity held by Name of Subsidiary Principal Activities Incorporation Shares Investment the Group 2006 2005 2006 2005 S$’000 S$’000 % %

^ The Straits Times Holding investments Singapore Mgt 334 334 100.00 100.00 Press (1975) Limited Ord 33,072 33,072 100.00 100.00

^ SPH Magazines Publishing magazines Singapore Ord * * 100.00 100.00 Pte Ltd & provision of editorial services

^ Focus Publishing Ltd Publishing magazines Singapore Mgt * * 99.96 99.96 Ord * * 100.00 100.00

^ Singapore Press Servicing and holding Singapore Mgt * * 99.98 99.98 Holdings (Overseas) investments Ord * * 100.00 100.00 Limited

The Straits Times Dormant United Kingdom Ord * * 100.00 100.00 Press (London) Limited

^ Lianhe Publishing Publishing magazines Singapore Ord * * 100.00 100.00 Pte Ltd & holding investments

^ Asia Century Publishing and Singapore Ord * * 100.00 100.00 Publishing Pte Ltd distributing magazines

^ SPH Data Services Licensing of copyrights Singapore Ord * * 100.00 100.00 Pte Ltd & trademarks Balance c/f 33,406 33,406

102 NOTES TO THE FINANCIAL STATEMENTS AUGUST 31, 2006

32. subsidiaries (CONT’D)

Effective % of Country of Class of Cost of Equity held by Name of Subsidiary Principal Activities Incorporation Shares Investment the Group 2006 2005 2006 2005 S$’000 S$’000 % %

Balance b/f 33,406 33,406

^ SPH (Americas) Provision of news Singapore Ord * * 100.00 100.00 Pte Ltd reporting services

SPH Magazines Publishing & distribution, Hong Kong Ord * * 100.00 100.00 (HK) Ltd provision of editorial services and holding investments

^ TP Ventures Pte Ltd Holding investments Singapore Ord * * 100.00 100.00

^ Blu Inc Publishing Publishing & marketing Singapore Ord * * 100.00 50.00 (S) Pte Ltd of magazines & books

^ Blu Inc Ventures Holding investments Singapore Ord * * 100.00 95.00 Pte Ltd

^ Blu Inc Media Publishing magazines Singapore Ord * * 100.00 95.00 Pte Ltd & provision of editorial services

*** Blu Inc Holdings (S) Holding investments Singapore Ord – * – 100.00 Pte Ltd

^^@ Blu Inc Media Publishing & distribution Malaysia Ord * * 46.00 46.00 Sdn Bhd of magazines & books

^^@ Magazines World Publishing magazines, Malaysia Ord * * 35.00 35.00 Sdn Bhd books and periodicals

^ Magazines Publishing magazines & Singapore Ord * * 100.00 95.00 Incorporated Pte Ltd holding investments

^^ MI Publishing Media representative Malaysia Ord * * 100.00 95.00 Sdn Bhd

^^ PT MI Magazines Distribution, import and Indonesia Ord * * 70.00 95.00 media management consultant

^^ MI Publishing (HK) Publishing magazines Hong Kong Ord * * 100.00 95.00 Co Limited

The Peak Dormant Singapore Ord * * 100.00 95.00 Magazines Pte Ltd

Media Incorporated Dormant Singapore Ord * * 100.00 95.00 Pte Ltd

^ Media Investments Dormant Singapore Ord * * 100.00 95.00 Pte Ltd Balance c/f 33,406 33,406

103 NOTES TO THE FINANCIAL STATEMENTS AUGUST 31, 2006

32. subsidiaries (CONT’D)

Effective % of Country of Class of Cost of Equity held by Name of Subsidiary Principal Activities Incorporation Shares Investment the Group 2006 2005 2006 2005 S$’000 S$’000 % %

Balance b/f 33,406 33,406

^ MI Productions Dormant Singapore Ord * * 100.00 95.00 Pte Ltd

^^@ Blu Inc Holdings Holding investments Malaysia Ord * * 50.00 50.00 (Malaysia) & provision of Sdn Bhd management support services

^ Blu Inc Singapore Publishing magazines, Singapore Ord * * 100.00 95.00 Pte Ltd provision of editorial services and holding investments

^ Blu Inc Overseas Holding investments Singapore Ord * * 100.00 50.00 Pte Ltd

^ Tamil Murasu Publishing newspapers Singapore Ord 855 855 100.00 100.00 Pte Ltd

^ 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

^ Singapore News Holding investments Singapore Mgt 1,153 1,153 100.00 100.00 and Publications and properties Ord 114,102 114,102 100.00 100.00 Limited

^ Sin Chew Jit Poh Holding investments Singapore Mgt * * 100.00 100.00 (Singapore) Limited and properties Ord * * 100.00 100.00

^ Singapore Holding investments Singapore Ord 50,000 50,000 100.00 100.00 Newspaper and properties Services Private Limited

Vinora Holdings Holding investments British Virgin Ord * * 100.00 100.00 Limited Islands

Crestville Holding investments British Virgin Ord * * 100.00 100.00 Investments Limited Islands

*** Futura Management Holding investments Cook Islands Ord – * – 100.00 Limited

*** Morningvista Dormant British Virgin Ord – * – 100.00 Investments Limited Islands Balance c/f 277,343 277,343

104 NOTES TO THE FINANCIAL STATEMENTS AUGUST 31, 2006

32. subsidiaries (CONT’D)

Effective % of Country of Class of Cost of Equity held by Name of Subsidiary Principal Activities Incorporation Shares Investment the Group 2006 2005 2006 2005 S$’000 S$’000 % %

Balance b/f 277,343 277,343

^ Lianhe Investments Holding investments Singapore Ord 6,335 6,335 100.00 100.00 Pte. Ltd. for dealing purposes

^ SPH MultiMedia Holding investments Singapore Ord 8,500 8,500 100.00 100.00 Private Limited

^ SPH AsiaOne Ltd Holding investments Singapore Ord 94,400 94,400 100.00 100.00

^ Zaobao.com Ltd Provision of Internet- Singapore Ord * * 100.00 100.00 related services

^ Evol Media Pte Ltd Provision of Internet- Singapore Ord * * 100.00 100.00 related services

** SPH MediaWorks Dormant Singapore Ord 90,000 90,000 100.00 100.00 Ltd

^^ New Beginnings Business management The People’s Ord 234 234 100.00 100.00 Management and consultancy Republic of Consulting services China (Shanghai) Company Limited

^ SPH AlphaOne Holding investments Singapore Ord * * 100.00 100.00 Pte Ltd

^ SPH MediaBoxOffice Provision of advertising Singapore Ord * * 80.00 100.00 Pte Ltd services

^X SPH UnionWorks Radio broadcasting Singapore Ord * – 70.00 – Pte Ltd 476,812 476,812

Notes: 1. ^ Companies audited by PricewaterhouseCoopers, Singapore.

2. ^^ Companies audited by auditors other than PricewaterhouseCoopers, Singapore.

3. X SPH UnionWorks Pte Ltd became a subsidiary of the Group after SPH MultiMedia Private Limited raised its interests from 50% to 70% during the year.

4. * The shareholdings of these companies are held by subsidiaries of the Company.

5. ** Under liquidation.

6. *** The liquidation of these companies were completed during the year.

7. @ Accounted for as subsidiaries of the Group. The Group exercises Board and management control over the companies.

105 NOTES TO THE FINANCIAL STATEMENTS AUGUST 31, 2006

33. Associates

Effective % of Country of Class of Cost of Equity held by Name of Associate Principal Activities Incorporation Shares Investment the Group 2006 2005 2006 2005 S$’000 S$’000 % %

Held by the Company

MediaCorp TV Holding investment Singapore Ord 10,000 10,000 20.00 20.00 Holdings Pte Ltd^ in subsidiaries which provide television broadcasting and content production services

MediaCorp Press Ltd^ Publishing and Singapore Ord 19,160 19,160 40.00 40.00 distributing free newspaper

Held by Subsidiaries

American Bourses Development & Singapore Ord 6,375 6,375 20.00 20.00 Corporation Pte Ltd# maintenance of software and multimedia works; Business management and consultancy services

Citta Bella Sdn BhdX Publishing and Malaysia Ord 248 248 49.00 49.00 distributing magazines

GMM Times Co Ltd@ Publishing and Thailand Ord 395 395 30.00 30.00 distributing magazines

Shanghai YouHer Consultancy The People’s Ord 832 573 50.00 50.00 Consultancy Limited@ services Republic of China

Traffic Corner Publishing Publishing and Thailand Ord 4,767 4,032 49.00 49.00 Company Limited@ distributing magazines

TOM Outdoor Media Provision of The People’s Ord 41,361 – 35.00 – Group Limited@ outdoor advertising Republic of services China

SPH UnionWorks Radio broadcasting Singapore Ord – 2,400 – 50.00 Pte Ltd* 83,138 43,183

Notes: 1. ^ Financial year ends on March 31. Reporting period ended June 30, 2006 was used for equity accounting purposes due to time lag in receipt of financial results. 2. X Financial year ends on June 30. Reporting period ended July 31, 2006 was used for equity accounting purposes due to time lag in receipt of financial results. 3. @ Financial year ends on December 31. Reporting period ended July 31, 2006 was used for equity accounting purposes due to time lag in receipt of financial results. 4. * SPH UnionWorks Pte Ltd became a subsidiary of the Group after SPH MultiMedia Private Limited raised its interests from 50% to 70% during the year. 5. # Under liquidation.

106 NOTES TO THE FINANCIAL STATEMENTS AUGUST 31, 2006

34. Jointly Controlled Entity

Effective % of Name of Jointly Country of Class of Cost of Equity held by Controlled Entity Principal Activities Incorporation Shares Investment the Group 2006 2005 2006 2005 S$’000 S$’000 % %

Held by Subsidiary

Shanghai Blu Inc Consultancy The People’s Ord 339 – 50.00 47.50 Ventures Consultancy services Republic of Co Ltd China

35. financial Risk Management The Group’s activities expose it to a variety of financial risks, particularly interest rate, currency, market, liquidity and credit risks. Where appropriate, the Group’s risk management policies seek to minimise potential adverse effects of these risks on the financial performance of the Group. The policies for managing these risks are summarised below.

(i) Interest rate risk

The Group has cash balances placed with reputable banks and financial institutions, and investments in 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.

The Group’s debt consists of bank borrowings taken up by subsidiaries to finance its operations. Where appropriate, the Group seeks to minimise its interest rate risk exposure by entering into interest rate swaps over the duration of its borrowings.

(ii) Currency risk

The currency risk of the Group arises mainly from its operational purchases of raw materials and consumable stores and capital expenditure denominated in currencies other than the functional currency. In addition, currency risk also arises from the Group’s foreign currency cash deposits, investments, and from costs incurred by its overseas news bureaus. The Group also has investments in foreign subsidiaries and associates, whose net assets are exposed to currency risk.

Where appropriate, the Group hedges against its currency risk resulting from anticipated sale and purchase transactions in foreign currencies, its foreign currency denominated investments and net assets of its foreign subsidiaries and associates.

(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.

(iv) Liquidity risk

In the management of liquidity risk, the Group monitors and maintains a level of cash and cash equivalents to finance the Group’s operations and mitigate the effects of fluctuation in cash flows.

(v) Credit risk

The Group manages its credit risk through the application of credit approvals, credit limits and monitoring 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.

As at the balance sheet date, the Group has no significant concentration of credit risks. 107 NOTES TO THE FINANCIAL STATEMENTS AUGUST 31, 2006

36. related Party Transactions Key management personnel compensation are as follows:

GROUP 2006 2005 Restated* S$’000 S$’000

Remuneration and other short-term employee benefits 13,054 13,476 Employers’ contribution to defined contribution plans 287 314 Share options granted 2,455 2,222 15,796 16,012

Staff loan granted to key management personnel 1,531 1,490

* Restated to take into account the retrospective adjustments relating to FRS 102 – Share-based Payment for share options granted to employees.

The above includes total emoluments of the Company’s Directors of S$2,151,000 (2005: S$2,083,000).

37. segmental Information 2006

Newspaper Treasury and and Magazine Investment Property Others Eliminations Consolidated S$’000 S$’000 S$’000 S$’000 S$’000 S$’000

Operating Revenue

External sales 906,986 – 98,704 15,670 – 1,021,360 Inter-segmental sales 1,296 – 2,021 394 (3,711) – Total operating revenue 908,282 – 100,725 16,064 (3,711) 1,021,360

Result

Segment result 316,003 80,892 71,102 (5,689) – 462,308 Finance costs (1) – (20,535) (77) – (20,613) Finance income 411 – 651 4 – 1,066 Share of profit less losses of associates/jointly controlled entity 1,584 – – (1,769) – (185) Exceptional items (2,276) – 70,534 (1,414) – 66,844 Profit/(loss) before taxation 315,721 80,892 121,752 (8,945) – 509,420 Taxation (81,076) Profit after taxation 428,344 Minority interests 116 Profit attributable to shareholders 428,460

108 NOTES TO THE FINANCIAL STATEMENTS AUGUST 31, 2006

37. segmental Information (CONT’D) 2006

Newspaper Treasury and and Magazine Investment Property Others Eliminations Consolidated S$’000 S$’000 S$’000 S$’000 S$’000 S$’000

Other Information

Segment assets 661,474 1,105,479 1,186,222 16,645 – 2,969,820 Interests in associates 23,860 – – 45,869 – 69,729 Consolidated total assets 3,039,549

Segment liabilities 162,138 6,764 640,588 4,344 – 813,834 Current taxation 104,932 Deferred taxation 72,046 Consolidated total liabilities 990,812

Capital expenditure 16,939 – 2,127 950 – 20,016 Depreciation 47,368 – 458 1,239 – 49,065 Amortisation 575 – – – – 575 Impairment losses: – Goodwill on acquisition of interests in subsidiaries (Notes 15 and 29) – – – 355 – 355 – Interests in associates (Note 29) 1,200 – – – – 1,200 – Interests in jointly controlled entity (Note 29) 1,128 – – – – 1,128

2005 Restated

Newspaper Treasury and and Magazine Investment Property Others Eliminations Consolidated S$’000 S$’000 S$’000 S$’000 S$’000 S$’000

Operating Revenue External sales 891,783 – 89,445 26,284 – 1,007,512 Inter-segmental sales 1,985 – 2,141 95 (4,221) – Total operating revenue 893,768 – 91,586 26,379 (4,221) 1,007,512

Result Segment result 322,488 248,024 66,874 (14,843) – 622,543 Finance costs (51) – (22,035) (440) – (22,526) Finance income 169 – 310 – * – 479 Share of profit less losses of associates/jointly controlled entity 236 – – (3,826) – (3,590) Exceptional items (12,786) – – (25,756) – (38,542) Profit/(loss) before taxation 310,056 248,024 45,149 (44,865) – 558,364 Taxation (69,975) Profit after taxation 488,389 Minority interests (69) Profit attributable to shareholders 488,320

109 NOTES TO THE FINANCIAL STATEMENTS AUGUST 31, 2006

37. segmental Information (CONT’D) 2005 Restated

Newspaper Treasury and and Magazine Investment Property Others Eliminations Consolidated S$’000 S$’000 S$’000 S$’000 S$’000 S$’000

Other Information Segment assets 678,952 803,274 1,098,903 19,856 – 2,600,985 Interests in associates 21,751 – – 6,324 – 28,075 Consolidated total assets 2,629,060 Segment liabilities 161,734 9,056 678,256 465 – 849,511 Current taxation 88,298 Deferred taxation 67,777 Consolidated total liabilities 1,005,586 Capital expenditure 15,093 – 13,245 487 – 28,825 Depreciation 49,497 – 467 336 – 50,300 Amortisation 552 – – – – 552 Impairment loss: – Goodwill on acquisition of interests in subsidiaries (Notes 15 and 29) 10,421 – – – – 10,421 – Goodwill on acquisition of interests in an associate (Note 29) 2,519 – – – – 2,519 – Interest in an associate (Note 29) 105 – – – – 105 – Property, plant and equipment [Note 9(b)] 688 – – – – 688

* Less than S$500

Notes:

(a) Business segments: The Group is organised into three major operating segments, namely Newspaper and Magazine, Treasury and Investment, and Property, and reports its primary segment information through direct identification. The Newspaper and Magazine segment is involved in the publishing, printing and distributing of newspapers and magazines. The Treasury and Investment segment manages the investment activities of the Group while the Property segment holds and manages properties owned by the Group. Other operations under the Group, which are currently not significant to be reported separately, are included under “Others”. These comprise our businesses and investments in Internet, outdoor advertising, radio broadcasting and television broadcasting.

(b) Geographical segments: The principal geographical area in which the Group operates is Singapore. The Group’s overseas operations comprise mainly publishing and distributing magazines, holding overseas investments and the provision of marketing, editorial, art and graphical services overseas.

Capital Operating Revenue Total Assets Expenditure 2006 2005 2006 2005 2006 2005 S$’000 S$’000 S$’000 S$’000 S$’000 S$’000

Singapore 1,006,486 993,896 2,980,892 2,613,322 19,775 28,029 Other Countries 14,874 13,616 58,657 15,738 241 796 1,021,360 1,007,512 3,039,549 2,629,060 20,016 28,825

110 NOTES TO THE FINANCIAL STATEMENTS AUGUST 31, 2006

38. fAir Value of Financial Instruments The financial assets and financial liabilities of the Group and the Company for which fair values are required to be disclosed in accordance with FRS comprise the following:

(a) long-term investments in investees other than subsidiaries and associates, (b) non-current loans payable, (c) non-current receivables from and payables to subsidiaries and associates, (d) other non-current receivables, (e) current assets other than stocks and prepayments, (f) current liabilities other than provision for taxation, (g) amounts owing by/to subsidiaries and associates.

The financial assets and liabilities of the Group are predominantly denominated in Singapore Dollars, except for the investment funds under management. Other than the fair values of quoted and unquoted long-term and short-term investments as detailed in the respective notes to the financial statements, the fair values of the financial assets and financial liabilities as at the balance sheet date approximate their carrying values as shown in the balance sheets.

39. re-classification The comparative figures of the amounts owing by/to associates and jointly controlled entity and loan to associate, which were previously included in interests in associates and jointly controlled entity, have been reclassified and shown separately in the balance sheets. In addition, the comparative figures for deposits received from customers, which were previously included in other creditors and accrued liabilities, have been reclassified to trade creditors. The reclassifications were made to conform to current year’s presentation. The comparative amounts reclassified out of interests in associates, interests in jointly controlled entity and other creditors and accrued liabilities are as follows:

GROUP COMPANY 2005 2005 S$’000 S$’000

Interests in associates as reported on August 31, 2005 34,103 35,172 Reclassified to “Amount owing by associates” (6,029) (6,012) Reclassified to “Amount owing to an associate” 1 – Adjusted balance 28,075 29,160

Interest in jointly controlled entity as reported on August 31, 2005 33 – Reclassified to “Amount owing by jointly controlled entity” (33) – Adjusted balance – –

Other creditors and accrued liabilities as reported on August 31, 2005 129,304 107,534 Reclassified to “Trade creditors” (4,237) (4,237) Adjusted balance 125,067 103,297

Trade creditors as reported on August 31, 2005 70,206 38,816 Reclassified from “Other creditors and accrued liabilities” 4,237 4,237 Adjusted balance 74,443 43,053

111 NOTES TO THE FINANCIAL STATEMENTS AUGUST 31, 2006

40. new accounting standards and INT FRS Certain new accounting standards and INT FRS interpretation have been published that are mandatory for the Group for accounting periods beginning on or after September 1, 2006. The Group’s assessment of those standards and interpretations that are relevant to the Group are set out below.

(a) FRS 40 – Investment Property

The Group will adopt FRS 40 for the financial year ending August 31, 2008.

Currently, investment properties are accounted for under FRS 25 – Accounting for Investments as set out in Note 2(f). FRS 40 permits an entity to measure its investment properties either at fair value with fair value changes taken to the income statement (Fair value model) or at cost less accumulated depreciation and provision for impairment (Cost model). The Group will examine the implication of the standard carefully before the measurement model is selected.

(b) INT FRS 104 – Determining whether an asset contains a lease

The Group will adopt INT FRS 104 for the financial year ending August 31, 2007. Implementation of INT FRS 104 is not expected to significantly affect the financial statements for the year ending August 31, 2007.

41. Authorisation of Financial Statements On October 12, 2006, the Board of Directors of Singapore Press Holdings Limited authorised these financial statements for issue.

112 OVERSEAS BUREAUS AS AT OCTOBER 31, 2006

Location Name / Address Email Telephone Fax

AUSTRALIA ST Roger Maynard [email protected] 61-2-9973 2881 61-2-9973 2049 William Choong [email protected] 61-4-3759 1004 61-2-6125 9926 BT Mohan Kuppusamy [email protected] – – Tye Kim Khiat [email protected] – –

CHINA ST Chua Chin Hon [email protected] 86-10-6418 1577/ 86-10-6418 1580 (BEIJING) [email protected] 86-10-6418 1578 Tschang Chi-Chu [email protected] 86-10-6418 1577/ 86-10-6418 1580 86-10-6418 1578 Clarissa Oon [email protected] 86-10-6418 1577/ 86-10-6418 1580 86-10-6418 1578 Tracy Quek [email protected] 86-10-6418 1577/ 86-10-6418 1580 86-10-6418 1578 ZB Yap Pheng Hui [email protected] 86-10-6418 1585 86-10-6418 1584 Han Yong Hong [email protected] 86-10-6418 1586 86-10-6418 1584 Address 86-10-6418 1587 Suite 4G, Office Tower B (ZB General Line) East Gate Plaza 29 Dongzhong Street, Dongcheng District Beijing 100027, P.R. China

CHINA ZB Zhang Xiao Zhong [email protected] 86-23-6770 0067 86-23-6770 1097 (CHONGQING) Mktg Chen Shouzhang [email protected] 86-23-6770 0067 86-23-6770 1097 Address Beian Xingzuo Apt #25-12, Jianxin Beilu 60, Jiangbei District Chongqing 400020, China

CHINA ZB Lee Chih Horng [email protected] 86-20-8374 0537 86-20-8374 0512 (GUANGZHOU) Address Room 1106, Peace World Plaza 362-366, Huanshi Dong Road Guangzhou, Guangdong Province China 510060

CHINA ST Ching Cheong [email protected] 852-2530 9720 852-2845 9934 (HONG KONG) Vince Chong [email protected] 852-2523 7675 852-2845 9934 ZB Norman Yik [email protected] 852-2524 6191 852-2524 7394 Tai Hing Shing [email protected] 852-2877 0713 852-2524 7394 Mktg Don Li [email protected] 852-2877 9076 852-2522 0950 Echo Cheung [email protected] 852-2877 9076 852-2522 0950 Address 1308, 13th Floor, Tower Two, Lippo Centre, No. 89 Queensway, Hong Kong

113 OVERSEAS BUREAUS AS AT OCTOBER 31, 2006

Location Name / Address Email Telephone Fax

CHINA ZB Goh Sin Hwee [email protected] 86-21-6319 1992 86-21-6319 1991 (SHANGHAI) Address Room 1007, 10th Floor, Lansheng Building 8 Huaihai Road Centre Shanghai 200021, China

EUROPE ST Jonathan Eyal [email protected] 44-78-0313 8213 – Neo Hui Min [email protected] 44-79-3141 6060 – Derek Scally [email protected] 49-175-207 4516 – Susan Sachs [email protected] 33-0-6-3125 2129 – BT Neil Behrmann [email protected] – –

INDIA ST Ravi Velloor [email protected] 91-9899-622 066 (HP) – (NEW DELHI) Address C-21/A Gulmohar Park IInd Floor New Delhi 110049 P Jayaram [email protected] 91-9871-600 366 (HP) – Address [email protected] G-602 Kaveri Aprts Sector - 6, Plot No.4, Dwarka New Delhi 110075

INDONESIA ST Azhar Ghani [email protected] 62-21-3983 1467 62-21-3983 1466 (JAKARTA) (Azhar’s DID) Salim Osman [email protected] 62-21-3983 1469 62-21-3983 1466 (Salim’s DID) Devi Muri Asmarani [email protected] 62-21-3983 1471 62-21-3983 1466 [email protected] (Devi’s DID) 62-21-3983 1465 (General) BT Laurel Teo Huei Huei [email protected] 62-21-3983-1474 62-21-3983 1473 Address (Laurel’s DID) Suite 1401, 14th Floor Deutsche Bank Building Jalan Imam Bonjol 80, Jakarta 10310

JAPAN ST Kwan Weng Kin [email protected] 81-3-3442 4258 – (TOKYO) Address [email protected] 2-16-49-503 Takanawa Minato-ku, Tokyo Japan 108-0074 BT Anthony Rowley [email protected] 81-3-5467 4656 81-3-5467 4656 ZB Foo Choo Wei [email protected] – – Mktg Ryoichi Yanagihara [email protected] 81-3-3582 6259 81-3-3589 5480 Address 5A, 6-28, Akasaka 6-chome Minato-ku, Tokyo 107-0052, Japan

114 OVERSEAS BUREAUS AS AT OCTOBER 31, 2006

Location Name / Address Email Telephone Fax

KOREA ST Lee Tee Jong [email protected] 82-103357 1357 (HP) – (SEOUL) Address [email protected] 1-73, Shi Beom Apt, Yeoido, Yeong Deung Po Gu, Seoul, South Korea 150-790 ZB Kang Qwi Young [email protected] – –

MALAYSIA ST Reme Bin Ahmad [email protected] 02-03-2162 0011 02-03-2164 6439 (KUALA LUMPUR) [email protected] Leslie Lau Kuan Chen [email protected] 02-03-2162 0011 02-03-2164 6439 [email protected] Carolyn Hong [email protected] 02-03-2162 0011 02-03-2164 6439 Leslie Lopez [email protected] 02-03-2162 0011 02-03-2164 6439 BT S Jayasankaran [email protected] 02-03-2162 0011 02-03-2164 6439 Pauline Ng [email protected] 02-03-2162 0011 02-03-2164 6439 Address Suite 11A, Level 11, MNI Twins Tower 2, No. 11 Jalan Pinang 50450 Kuala Lumpur Malaysia

PHILIPPINES ST Alastair McIndoe [email protected] 63-2-896 4680 – (MANILA) Address [email protected] 63-916-489 7365 (HP) 361 Lirio Street, Palm Village, Makati, Manila, Philippines BT Al Labita [email protected] – –

TAIWAN ST Ong Hwee Hwee [email protected] 886-2-2370 3727 886-2-2370 9762 (TAIPEI) ZB Chan Cheow Pong [email protected] 886-2-2383 2732 886-2-2375 7822 Address 2F., No. 130, Bo-Ai Road Jhong Jheng District Taipei City 100, Taiwan (R.O.C.)

THAILAND ST Nirmal Ghosh [email protected] 66-9-897 0802 (HP) 66-2-260 0893 (BANGKOK) Address [email protected] Apt 2A, Prime Residence 6, Sukhumvit Soi 27 Klong Toey Nua, Wathana Bangkok 10110, Thailand

115 OVERSEAS BUREAUS AS AT OCTOBER 31, 2006

Location Name / Address Email Telephone Fax

U.S.A. BT Leon Hadar [email protected] – – (MARYLAND)

U.S.A. ST Betsy Pisik [email protected] 1-646-894 2744 – (NEW YORK)

U.S.A. (OHIO) ST Paul Zach [email protected] 1-440-212 4125 –

U.S.A. ST Derwin Pereira [email protected] 1-202-662-8726 1-202-662-8729 (WASHINGTON) Address [email protected] 1-617-412 9605 (HP) National Press Building Suite 916, 529 14th Street., NW, Washington, DC 20045 U.S.A

VIETNAM ST Roger Mitton [email protected] 84-4-942 8604 84-4-942 8964 (HANOI) Address [email protected] 84-91-901 9864 (HP) 21, Phan Boi Chau St Hoan Kiem District Hanoi, Vietnam.

SHANGHAI Loo Chin Wah [email protected] 86-21-6319 1988 86-21-6319 1991 INVESTMENT New Beginnings OFFICE Management Consulting (Shanghai) Company Limited Chan Moon Kwai [email protected] 86-21-6319 1993 86-21-6319 1991 SPH Magazines Address Room 1007, 10th Floor, Lansheng Building 8 Huaihai Road Centre Shanghai 200021, China

116 PROPERTIES OF THE GROUP AS AT AUGUST 31, 2006

Expiry Date Land Built-in Existing Location Tenure of Lease (sq m) (sq m) Use

Times Industrial Building Freehold – 20,638 12,560 Industrial 422 Thomson Road (Will be redeveloped into condominium housing)

Media Centre Leasehold July 16, 2040 24,892 48,922 Industrial 82 Genting Lane

Print Centre Leasehold June 9, 2034 110,075 103,460 Industrial 2 Jurong Port Road

News Centre Leasehold March 2, 2031 21,730 54,296 Industrial 1000 Toa Payoh North

Manhattan House Leasehold October 15, 2068 – 554 Commercial 151 Chin Swee Road Units #01-39 to #01-48 and #01-51 to #01-56

20A Yarwood Avenue Leasehold May 6, 2878 1,721 488 Residential

42 Nassim Road Freehold – 1,406 686 Residential

42A Nassim Road Freehold – 1,444 645 Residential

42B Nassim Road Freehold – 1,418 645 Residential

Paragon Freehold – 16,638 88,298 Commercial 290 Orchard Road

MALAYSIA Awana Condominium Freehold – – 117 Residential Unit 3544 Genting Highlands

HONG KONG Tower Two, Lippo Centre Leasehold February 14, 2059 – 368 Commercial Unit 1308 13th Floor 89 Queensway, Hong Kong

117 SHAREHOLDING STATISTICS AS AT OCTOBER 5, 2006

DISTRIBUTION OF ORDINARY SHAREHOLDERS BY SIZE OF SHAREHOLDINGS

No. of Total Size Of Shareholdings Shareholders % Holdings %

1 – 999 1,609 3.97 770,090 0.05 1,000 – 10,000 30,591 75.54 118,393,736 7.49 10,001 – 1,000,000 8,203 20.26 397,731,400 25.18 1,000,001 – and above 91 0.23 1,062,968,070 67.28 Total 40,494 100.00 1,579,863,296 100.00

TWENTY LARGEST ORDINARY SHAREHOLDERS

Name Of Shareholder Total Holdings %

1 DBS NOMINEES (PRIVATE) LIMITED 256,277,255 16.22 2 CITIBANK NOMINEESS SINGAPORE PTE LTD 156,139,844 9.88 3 HSBC (SINGAPORE) NOMINEES PTE LTD 106,774,796 6.76 4 RAFFLES NOMINEES PTE LTD 82,293,815 5.21 5 DBSN SERVICES PTE LTD 75,940,997 4.81 6 UNITED OVERSEAS BANK NOMINEES (PRIVATE) LIMITED 60,152,566 3.81 7 UNIVERSITY OF MALAYA 15,477,556 0.98 8 LEE FOUNDATION STATES OF MALAYA 15,215,522 0.96 9 UOB KAY HIAN PTE LTD 14,572,512 0.92 10 KO TECK SIANG PTE LTD 13,300,000 0.84 11 THE ASIA LIFE ASSURANCE SOCIETY LTD – PAR FUND 12,608,412 0.80 12 TAN ENG SIAN 12,000,000 0.76 13 MERRILL LYNCH (S’PORE) PTE LTD 11,149,855 0.71 14 DB NOMINEES (S) PTE LTD 10,019,602 0.63 15 UOB NOMINEES (2006) PTE LTD 9,397,403 0.59 16 OVERSEAS UNION ENTERPRISE LIMITED 9,133,845 0.58 17 LEE FOUNDATION 8,210,940 0.52 18 MACQUARIE SECURITIES (SINGAPORE) PTE LTD 8,002,613 0.51 19 CHAN SIEW KIM ALICE 7,000,000 0.44 20 DBS VICKERS SECURITIES (SINGAPORE) PTE LTD 6,867,144 0.43 Total: 890,534,677 56.36

All the ordinary shares in the Company were at all times held by the public and Rule 723 of the Singapore Exchange Listing Manual has been complied with.

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 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 show of hands to two hundred (200) votes for each management share held.

118 SHAREHOLDING STATISTICS AS AT OCTOBER 5, 2006

DISTRIBUTION OF MANAGEMENT SHAREHOLDERS BY SIZE OF SHAREHOLDINGS

No. of Total Size Of Shareholdings Shareholders % Holdings %

1 – 999 10 52.63 48 0.00 1,000 – 10,000 0 0.00 0 0.00 10,001 – 1,000,000 3 15.79 2,165,178 13.41 1,000,001 – and above 6 31.58 13,986,589 86.59 Total 19 100.00 16,151,815 100.00

HOLDERS OF MANAGEMENT SHARES

Name Of Shareholder Total Holdings %

1 THE GREAT EASTERN LIFE ASSURANCE COMPANY LIMITED 3,650,838 22.61 2 OVERSEA-CHINESE BANKING CORPORATION LTD 2,713,551 16.80 3 NTUC INCOME INSURANCE COOPERATIVE LIMITED 2,639,904 16.34 4 SINGAPORE TELECOMMUNICATIONS LIMITED 2,148,196 13.30 5 THE DEVELOPMENT BANK OF SINGAPORE LTD 1,534,418 9.50 6 UNITED OVERSEAS BANK LIMITED 1,299,682 8.05 7 NATIONAL UNIVERSITY OF SINGAPORE 865,544 5.36 8 FRASER & NEAVE, LIMITED 649,817 4.02 9 FULLERTON (PRIVATE) LIMITED 649,817 4.02 10 CHIEF EXECUTIVE OFFICER 12 0.00 11 DIRECTORS (FOUR EACH) 36 0.00 Total: 16,151,815 100.00

SHARE OPTIONS Details of options granted to Directors, and to employees in the Group receiving 5% or more of the total number of options available under the Singapore Press Holdings Group (1999) Share Option Scheme (“1999 Scheme”), are as follows:

Aggregate options Aggregate options granted since exercised since Number and commencement commencement terms* of Options of Scheme of Scheme Aggregate options Name of Director / granted from on 27.10.99 on 27.10.99 outstanding Employee 1.9.05 to 31.8.06 to 31.8.06 to 31.8.06 as at 31.8.06

Chan Heng Loon Alan 637,500 2,125,000 212,500 1,912,500

* Terms: Exercise Price: $4.30 Expiry Date: 16.12.2015

In respect of the 1999 Scheme: 1. the Rules do not allow for options to be granted at a discount 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.

A copy of the 1999 Scheme is available for inspection at the Company’s registered office.

119 NOTICE OF ANNUAL GENERAL MEETING Singapore Press Holdings Limited Co Reg No: 198402868E

NOTICE IS HEREBY GIVEN that the Twenty-Second Annual General Meeting of the Company will be held at The Auditorium, 1000 Toa Payoh North, News Centre, 1st Storey, Annexe Block, Singapore 318994 on Tuesday, December 5, 2006 at 10.30 a.m. for the following business:

Ordinary Business 1. To receive and adopt the Directors’ Report and Audited Accounts for the financial year ended August 31, 2006.

2. To declare a final dividend of 8 cents and a special dividend of 9 cents, per share, on a tax-exempt (one-tier) basis, in respect of the financial year ended August 31, 2006.

3. To re-appoint Lee Ek Tieng as a Director of the Company, pursuant to Section 153(6) of the Companies Act, Chapter 50, to hold such office from the date of this Annual General Meeting until the next Annual General Meeting of the Company.

4. To re-elect the following Directors who are retiring in accordance with the Company’s Articles of Association, and who, being eligible, offer themselves for re-election:

(i) Cham Tao Soon (ii) Ngiam Tong Dow (iii) Willie Cheng Jue Hiang

5. To approve Directors’ fees of S$778,750 (2005: S$760,000).

6. To appoint Auditors and to authorise the Directors to fix their remuneration.

7. To transact any other business of an Annual General Meeting.

Special Business 8. To consider and, if thought fit, to pass, with or without modifications, the following resolutions which will be proposed as Ordinary Resolutions:

(i) “That pursuant to Section 161 of the Companies Act, Chapter 50 and the listing rules of the Singapore Exchange Securities Trading Limited (the “SGX-ST”), and subject to the provisions of the Newspaper and Printing Presses Act, Chapter 206, authority be and is hereby given to the Directors of the Company to:

(a) (i) issue shares in the capital of the Company (“Shares”) whether by way of rights, bonus or otherwise; and/or

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

at any time and upon such terms and conditions and for such purposes and to such persons as the Directors may in their absolute discretion deem fit; and

(b) (notwithstanding the authority conferred by this Resolution may have ceased to be in force) issue Shares in pursuance of any Instrument made or granted by the Directors while this Resolution is in force,

120 NOTICE OF ANNUAL GENERAL MEETING Singapore Press Holdings Limited Co Reg No: 198402868E

provided that:

(1) the aggregate number of Shares to be issued pursuant to this Resolution (including Shares to be issued in pursuance of Instruments made or granted pursuant to this Resolution) does not exceed 50 per cent. of the issued Shares in the capital of the Company (as calculated in accordance with sub-paragraph (2) below), of which the aggregate number of Shares to be issued other than on a pro rata basis to shareholders of the Company (including Shares to be issued in pursuance of Instruments made or granted pursuant to this Resolution) does not exceed 20 per cent. of the issued Shares in the capital of the Company (as calculated in accordance with sub-paragraph (2) below);

(2) (subject to such manner of calculation and adjustments 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 Shares shall be based on the number of issued Shares in the 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.”

(ii) “That approval be and is hereby given to the Directors to offer and grant options in accordance with the provisions of the Singapore Press Holdings Group (1999) Share Option Scheme (the “1999 Scheme”) and to allot and issue such number of ordinary shares in the capital of the Company as may be required to be issued pursuant to the exercise of options under the 1999 Scheme, provided always that the aggregate number of ordinary shares to be issued pursuant to the 1999 Scheme shall not exceed 12 per cent of the total number of issued ordinary shares in the capital of the Company from time to time.”

By Order of the Board

GINNEY LIM MAY LING KHOR SIEW KIM Company Secretaries

Singapore, November 1, 2006

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, Tricor Barbinder Share Registration Services (A division of Tricor Singapore Pte. Ltd.), 8 Cross Street, #11-00 PWC Building, Singapore 048424 not less than 48 hours before the time fixed for the meeting.

121 NOTICE OF ANNUAL GENERAL MEETING Singapore Press Holdings Limited Co Reg No: 198402868E

EXPLANATORY NOTES & STATEMENT PURSUANT TO ARTICLE 72 OF THE COMPANY’S ARTICLES OF ASSOCIATION 1. In relation to Ordinary Resolution No. 3:

• Lee Ek Tieng will, upon re-appointment, continue as a member of the Audit Committee. He is considered an independent Director.

2. In relation to Ordinary Resolution No. 4:

• Cham Tao Soon will, upon re-election, continue as a member of the Executive Committee and Remuneration Committee. He will also be appointed as Chairman of the Nominating Committee. He is considered an independent Director.

• Ngiam Tong Dow will, upon re-election, continue as Chairman of the Remuneration Committee and a member of the Nominating Committee. He is considered an independent Director.

• Willie Cheng Jue Hiang will, upon re-election, continue as a member of the Remuneration Committee and Audit Committee. He is considered an independent Director.

3. The effects of the resolutions under the heading “Special Business” in the Notice of the Twenty-Second Annual General Meeting are:

(a) Ordinary Resolution No. 8(i) is to authorise the Directors of the Company from the date of that meeting until the next Annual General Meeting, subject to the provisions of the Newspaper and Printing Presses Act, Chapter 206, to issue shares in the Company and/or to make or grant instruments (such as warrants or debentures) convertible into shares, and to issue shares in pursuance of such instruments, up to a number not exceeding in total 50 percent of the issued shares in the capital of the Company, with a sub-limit of 20 percent for issues other than on a pro rata basis to shareholders. For the purpose of determining the aggregate number of shares that may be issued, the percentage of issued shares shall be based on the number of issued shares in the capital of the Company at the time that Ordinary Resolution No. 8(i) 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 that Ordinary Resolution 8(i) is passed, and (ii) any subsequent consolidation or sub-division of shares. For the avoidance of doubt, any consolidation or sub-division of shares in the capital of the Company will require shareholders’ approval.

(b) Ordinary Resolution No. 8(ii) is to authorise the Directors of the Company to offer and grant options under the Singapore Press Holdings Group (1999) Share Option Scheme (the “1999 Scheme”) and to allot and issue ordinary shares in the capital of the Company pursuant to the exercise of options under the 1999 Scheme, provided that the maximum number of ordinary shares which may be issued under the 1999 Scheme is limited to 12 percent of the total number of issued ordinary shares in the capital of the Company from time to time,

An Extraordinary General Meeting (“EGM”) of the Company has been convened to be held at 11 a.m. on December 5, 2006 (or as soon thereafter following the conclusion or adjournment of the Twenty-Second Annual General Meeting) at the same place for the purpose of (inter alia) approving the adoption of the new SPH Performance Share Plan. Further details on the SPH Performance Share Plan are set out in the Circular to Shareholders dated 1 November 2006.

It is intended that the 1999 Scheme will be terminated following the adoption of the SPH Performance Share Plan. However, such termination would be without prejudice to the rights of holders of options accepted and outstanding under the 1999 Scheme as at the date of its termination.

If the SPH Performance Share Plan is approved by shareholders at the EGM, the Company will administer the 1999 Scheme and the SPH Performance Share Plan so that the aggregate number of ordinary shares in the capital of the Company which may be issued pursuant to the 1999 Scheme and the SPH Performance Share Plan will be limited to 10 per cent of the total number of issued ordinary shares in the capital of the Company from time to time.

122 PROXY FORM IMPORTANT Singapore Press Holdings Limited (Incorporated in Singapore) 1. This Report is sent to investors who have used their CPF monies to buy Co Reg No: 198402868E shares of Singapore Press Holdings Limited FOR INFORMATION ONLY. 2. This proxy form is not valid for use by CPF investors and shall be ineffective for all intents and purposes if used or purported to be used by them.

I/We, ______of ______being a member/members of the above named Company, hereby appoint the Chairman of the Meeting, or

Name Address NRIC/Passport Number Proportion of Shareholdings (%)

and/or (delete as appropriate)

as my/our proxy/proxies to attend and to vote for me/us on my/our behalf and, if necessary, to demand a poll, at the Annual General Meeting of the Company to be held at The Auditorium, 1000 Toa Payoh North, News Centre, 1st Storey, Annexe Block, Singapore 318994 on December 5, 2006 at 10.30 a.m. and at any adjournment thereof.

(Please indicate with an “X” in the spaces provided whether you wish your vote(s) to be cast for or against the Resolutions as set out in the Notice of Annual General Meeting. Alternatively, please indicate the number of votes as appropriate. In the absence of specific directions, the proxy/proxies will vote or abstain as he/they may think fit, as he/they will on any other matter arising at the Annual General Meeting.

To be used on To be used in a Show of Hands the event of a Poll No. of votes No. of votes No. Resolution For Against For Against Ordinary Business 1. To adopt Directors’ Report and Audited Accounts 2. To declare a Final Dividend and a Special Dividend 3. To re-appoint Lee Ek Tieng as a Director pursuant to Section 153(6) of the Companies Act, Cap. 50 4. To re-elect Directors: (i) Cham Tao Soon (ii) Ngiam Tong Dow (iii) Willie Cheng Jue Hiang 5. To approve Directors’ fees 6. To appoint Auditors and authorise Directors to fix their remuneration 7. Any other business Special Business 8. (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

Dated this ______day of ______2006.

Total Number of Ordinary Shares held Total Number of Management Shares held

______Signature(s) of Member(s) or Common Seal IMPORTANT: PLEASE READ NOTES ON THE REVERSE

123 ImportanT

Note: 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 other 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 Tricor Barbinder Share Registration Services (A division of Tricor Singapore 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.

124 CORPORATE INFORMATION

EXECUTIVE COMMITTEE COMPANY SECRETARIES Tony Tan Keng Yam (Chairman) Ginney Lim May Ling Cham Tao Soon Khor Siew Kim Chan Heng Loon Alan REGISTERED OFFICE Sum Soon Lim 1000, Toa Payoh North Yeo Ning Hong News Centre NOMINATING COMMITTEE Singapore 318994 Lee Ek Tieng (Chairman) Tel: (65) 6319 6319 Tony Tan Keng Yam Fax: (65) 6319 8282 Philip N Pillai Email: [email protected] Ngiam Tong Dow Reg. No. 198402868E

REMUNERATION COMMITTEE SHARE REGISTRATION OFFICE Ngiam Tong Dow (Chairman) Tricor Barbinder Share Registration Services Tony Tan Keng Yam (A division of Tricor Singapore Pte. Ltd.) 8 Cross Street #11-00 Cham Tao Soon PWC Building Willie Cheng Jue Hiang Singapore 048424 AUDIT COMMITTEE Tel: (65) 6236 3333 Sum Soon Lim (Chairman) Fax: (65) 6236 3405 Willie Cheng Jue Hiang Cheong Choong Kong Lee Ek Tieng Yeo Ning Hong

AUDITORS PricewaterhouseCoopers 8 Cross Street, #17-00 PWC Building Singapore 048424 Audit Partner: Tan Boon Chok (Appointed in 2003) // DESIGN & PRODUCTION RAINDANCE A // B E Y O N D

P R I N T SINGAPORE PRESS HOLDINGS / / SINGAPORE PRESS HOLDINGS LIMITED ANNUAL REPORT 2006 1000 TOA PAYOH NORTH NEWS CENTRE SINGAPORE 318994 www.sph.com.sg CO. REG NO. 198402868E