SPHchess-Cover 11/5/04 4:39 PM Page II

STAYING AHEAD OF THE GAME

S P H

A R PRESS HOLDINGS LIMITED 2 1000 Toa Payoh North 0 News Centre 0 Singapore 318994 4

www.sph.com.sg

Reg. No. 198402868E

SINGAPORE PRESS HOLDINGS

ANNUAL 04REPORT SPH-Corporate_Blu 11/9/04 11:54 AM Page 2

STAYING AHEAD OF THE GAME

“The most powerful weapon in chess is to have the next move.’’

– David Bronstein (b.1924), grandmaster and writer.

Benjamin Franklin (1706-1790) said that chess teaches foresight, by having to plan ahead; vigilance, by having to keep watch over the whole chess board; caution, by having to restrain ourselves from making hasty moves; and, finally, hope, by steadfastly searching for the solutions to our problems. It is no wonder that the elements of strategy associated with the world’s oldest game of skill is common to strategy in the military, political and business spheres. This is why we are using chess as the metaphor for our annual report. The theme, “Staying Ahead of the Game,” is the principal strategy and tactic of the game of chess – and of successful corporations. SPH-Corporate_Blu 11/9/04 11:54 AM Page 2

CONTENTS

6 77 96 Chairman’s Message Segmental Operating Revenue Audited Financial Statements Segmental Pre-Tax Profit 10 96 Group Financial Highlights 78 Balance Sheets After-Tax Profit Profit 12 Earnings Per Share Board of Directors / Board Committee 97 Members 79 Consolidated Income Statement Operation Margin and Return on 20 Operating Revenue 98 Executive Officers Return on Shareholders’ Funds and Consolidated Statement of Changes in Return on Assets Shareholders’ Equity 26 Review by Chief Executive Officer 80 99 Revenue Composition Consolidated Cash Flow Statement 36 Cost Composition “It is not a move, even the best move that you must seek, but a realisable plan.” Operational Review 102 81 – Eugene Alexandrovich Znosko-Borovsky, Russian professional chess player. Notes to the Financial Statements 45 Gross Dividend Per Share Operational Data Net Dividend 144 50 82 Shareholding Statistics Staff Welfare Value Added Statement 149 51 83 Overseas Bureaus Corporate Citizenry Group Half-Yearly Results 152 54 Properties of the Group Significant Events FINANCIAL REPORT AND MISCELLANEOUS 153 60 Corporate Information Corporate Governance Report 88 Financial Calendar Directors’ Report

FINANCIAL REVIEW 154 94 Notice of Annual General Meeting Statement by Directors 76 Group Simplified Financial Position 160 95 Proxy Form Auditors’ Report SPH-Corporate_Blu 11/9/04 11:54 AM Page 4

LEADING THE CHARGE

“The tactician must know what to do whenever something needs doing; the strategist must know what to do when nothing needs doing.”

– Savielly Tartakover (1887–1956), international grandmaster. SPH-Corporate_Blu 11/9/04 11:54 AM Page 6

CHAIRMAN’S MESSAGE

I am happy to report that the Company had put up a creditable performance in the past year. Profit was up sharply due to the strong showing of our newspapers which rebounded from the SARS aftermath in 2003.

We continued to divest our non-core investments and returned surplus capital to shareholders, as well as carried out a share split to make SPH shares more affordable to small investors. With the impending merger of our broadcasting subsidiary with , which will immediately stem losses, the Company is in a better position to achieve improved results in the future.

For the year ended 31 August 2004, revenue was up 8.0 per cent to $970.1 million on the back of improving consumer sentiments and contribution from the new Paragon extension. Adding income from our sale of Belgacom stake, profit from sale of Times House site, and other exceptional items, net profit was up by 44.2 per cent to $546.3 million.

Newspapers Print advertising rose 4.9% to $624.4 million, on the back of a low base the previous year due to fallout from the Iraq war and SARS on the economy. Display advertising registered growth, with banking and finance, fast- moving consumer goods, transport, petrochemical and industrial products and fashion and beauty sectors recording double-digit growth. As the job market improved, recruitment advertising was up by nearly one-fifth.

After absorption of $9.0 million in GST, circulation revenue was 6.5 per cent higher at $192.0 million as we had raised cover prices earlier in the year. Average daily circulation of our newspapers for the year dropped by 2.1 per cent in aggregate, but The Sunday Times, on Sunday, Friday Weekly and registered increases.

To stay relevant to our readers, efforts to constantly refresh and add value to our newspapers continued through the year. Improvements were made to The Sunday Times, The New Paper on Sunday, Berita Minggu, and .

The Straits Times was recently relaunched, and readers like its classy, fresh new look, more reader-friendly design and varied content, including three weekly lifestyle magazines.

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CHAIRMAN’S MESSAGE (CONT’D) CHAIRMAN’S MESSAGE (CONT’D)

Broadcasting Giving back to the community Although SPH MediaWorks maintained its share of viewers last year, its loss widened to $44.5 million, up from Demonstrating its strong community involvement, SPH contributed to a broad spectrum of programmes $40.2 million the previous year. Higher programming cost amidst a very competitive environment made it ranging from arts and culture, education, conservation, to sports and charity, as well as to the non-profit difficult for MediaWorks to continue in the small local free-to-air television market. At the close of our financial Press Foundation of Singapore, an Institution of a Public Character set up early last year to promote lifelong year, we announced that MediaWorks would merge with MediaCorp by end 2004. This merger, as well as learning. The Company believes that giving back to the society should be part of its corporate culture, and will that of our free newspaper with Mediacorp’s Today, would allow both sides to focus on developing continue to play a responsible role as a good corporate citizen to enhance the well-being of the community. Singapore into a media hub for the region. Outlook Property The recent divestment of our StarHub shares would result in an investment income of $126.3 million, before The new Paragon extension contributed to the 56.7 per cent increase in property revenue to $82.6 million last deducting the Company’s share of IPO expenses, if the over allotment option in the IPO is not exercised. year. We expect the amalgamated Paragon, which enjoys 100 per cent occupancy in its retail space, to return more than 9 per cent equity yield per annum. Riding on an improving economy, and with a more rational local media market, we look forward to a better year ahead. Barring any adverse development in the geopolitical and economic environment, the Directors Times House site in Kim Seng Road was sold with a gain of $110.1 million. Other non-core property assets, expect the Group’s operating performance to improve in the current financial year. including the Times Industrial Building site, would be divested if we receive attractive offers. Directorate Investment income Another two stalwarts of the Board have informed me of their desire to step down. Dr Michael Fam Yue Onn Total investment income for the year was $258.0 million. Excluding the Belgacom $170.5 million gain, and Mr Tang I-Fang would not seek re-election in the coming AGM. Both were appointed to the Board on 8 investment income was $87.5 million, the highest in the Group’s history. On the Group’s portfolio investment, August 1984 and have served unswervingly for the past 20 years. I thank them for their contributions and the return of 8.2 per cent is better than the annual 5.9 per cent return achieved in the past three years. invaluable counsel to the Board.

Share capital management With the appointments of Professor Cham Tao Soon as Deputy Chairman and Mr Willie Cheng Jue Hiang as As I had mentioned in my previous Chairman’s statement, the Board aims to reward shareholders who stay with a Director on 1 March 2004, the new Board aims to serve you with equal distinction. the Company for the long term. The loyal ones would have benefited from the $1.067 billion capital reduction exercise we completed this year. The exercise helped improve the Group’s return on equity to 36.9 per cent. I would also like to thank staff, readers, advertisers, vendors and business associates for their continued support.

The Board has recommended that a final gross dividend of 21.25 cents, comprising 10 cents normal and 11.25 cents special, be paid after approval has been obtained at the coming Annual General Meeting. I trust all shareholders would vote in favour of the resolution. Lim Chin Beng Chairman

8 9 SPH-Corporate_Blu 11/9/04 11:54 AM Page 10

GROUP FINANCIAL HIGHLIGHTS GROUP FINANCIAL HIGHLIGHTS (CONT’D)

2004 2003 Change S$’000 S$’000 % S$970,075,000 Operating Revenue Operating revenue 970,075 897,816 8.0 S$897,816,000

Profit from operations 337,949 290,896 16.2 Profit before exceptional items 571,514 317,144 80.2 Profit before taxation 600,191 438,904 36.7 S$337,949,000 Profit from Profit after taxation 546,277 379,135 44.1 Operations Minority interests 5 (399) NM S$290,896,000 Profit attributable to shareholders 546,282 378,736 44.2

Shareholders’ interests 1,479,119 2,247,736 (34.2) S$546,282,000 Total assets 2,591,880 3,368,245 (23.0) Profit Attributable Total liabilities 1,112,761 1,120,509 (0.7) to Shareholders S$378,736,000 Dividends declared for the financial year (net) 328,535# 375,640 (12.5)

Per share data Net tangible assets (S$) 0.93 1.22* (23.8) S$1,479,119,000 Profit before taxation (S$) 0.38 0.24* 58.3 Shareholders’ Profit attributable to shareholders (S$) 0.35 0.20* 75.0 Interest* S$2,247,736,000 Gross dividends declared for the financial year (cents) 25# 26* (2.9) Dividend cover for the financial year (times) 1.7 1.0 70

Value added S$2,591,880,000 Per employee (S$) 189,708 167,229 13.4 Total Per $ employment costs (S$) 2.49 2.49 – Assets* S$3,368,245,000 Per $ investment in fixed assets (before depreciation) (S$) 0.63 0.68 (7.4) Per $ operating revenue (S$) 0.70 0.69 1.4

Profitability ratios % points Operating margin (%) 34.8 32.4 2.4 2004 2003 Return on operating revenue (%) 56.3 42.2 14.1 * Decline in Shareholders’ Interest and Total Assets due to the Capital Reduction Exercise which took place during the financial year, as proceeds from the sale of investments and Return on shareholders’ funds (%) 36.9 16.8 20.1 fixed deposits have been utilised to finance the Capital Reduction Exercise.

* Adjusted for share split exercise completed in FY 2004. # Included proposed final dividend of 10 cents per share and final special dividend of 11.25 cents per share, less tax at 20%, to be approved by shareholders at the Annual General Meeting on December 6, 2004. NM Not meaningful

10 11 SPH-Corporate_Blu 11/9/04 11:54 AM Page 12

<< << << BOARD OF DIRECTORS/ LIM CHIN BENG CHAM TAO SOON ALAN CHAN HENG LOON BOARD COMMITTEE Chairman Deputy Chairman Director and Chief Executive Officer MEMBERS

<< << << MICHAEL FAM YUE ONN TANG I-FANG YEO NING HONG Director Director Director

<< << << << LIM KIM SAN NGIAM TONG DOW LEE EK TIENG CHEONG CHOONG KONG Senior Advisor Director Director Director

<< << << PHILIP PILLAI SUM SOON LIM WILLIE CHENG Director Director Director

12 SPH-Corporate_Blu 11/9/04 11:54 AM Page 14

DIRECTORS’ PROFILE DIRECTORS’ PROFILE (CONT’D)

LIM CHIN BENG ALAN CHAN HENG LOON Mr Lim joined the Board on 1 October 2001 and was appointed Chairman of SPH on 13 December 2002. He is also Mr Chan was appointed a director and Group President of SPH on 1 July 2002 and became its Chief Executive Officer Chairman of The Ascott Group Ltd. He is director of CapitaLand Ltd and StarHub Ltd, and companies in the Pontiac on 1 January 2003. He is also a director of Singapore Power Ltd, and Chairman of PowerGas Ltd. He is a member of the Land Group. INSEAD Singapore Council, the Board of Trustees, Courage Fund and the Board of Governors of The Singapore- Foundation. He also serves as a director of the Press Foundation of Singapore Ltd and is a member of the Public Service Commission. He has more than 24 years’ experience in the civil service, spanning the Civil Aviation Department, Ministries of Home Affairs, Defence, Foreign Affairs and the Prime Minister’s Office. Prior to joining SPH, he was the Permanent Secretary,

He was formerly the Managing Director and Deputy Chairman of Singapore Airlines Ltd, Chairman of the Singapore Ministry of Transport. He was also a director of DBS Group Holdings Ltd and PSA Corporation Ltd. Tourist Promotion Board and Singapore’s ambassador to . Mr Chan is a President Scholar and had been awarded the Public Service Medals (Gold and Silver). He graduated from

Mr Lim graduated from the University of Malaya (Singapore) in Economics, and Harvard Business School’s Advanced the Ecole Nationale de I’Aviation Civile, France and holds an MBA (with distinction) from INSEAD, France. Management Program. MICHAEL FAM YUE ONN

CHAM TAO SOON Dr Fam was appointed to the Board on 8 August 1984. He is the Executive Chairman of Fraser & Neave Ltd, Chairman Prof Cham was appointed Deputy Chairman of SPH on 1 March 2004. He has spent more than 30 years in the academia of Asia Pacific Breweries Limited and Centrepoint Properties Ltd and a director of Times Publishing Ltd. sector and currently is a Distinguished Professor of Nanyang Technological University. He was formerly Chairman of Singapore Airlines Ltd, Housing Development Board, Mass Rapid Transit Corporation and

Prof Cham is also the Chairman of NatSteel, a director of Ltd, WBL Corporation Ltd, Robinson & the Council of Nanyang Technological University, Public Transport Council and a director of Oversea-Chinese Banking Co. Ltd and TPA Strategic Holdings Ltd. In addition, he serves as a board member of , a member Corporation Limited, (Pte) Ltd, the Public Utilities Board and Economic Development Board. He also of the Council of Presidential Advisers, Chairman of the Singapore Symphonia Co Ltd and as director of Singapore served as a member of the Council of Presidential Advisers, Singapore. International Foundation. Dr Fam holds a Bachelor of Engineering (First Class Hons) in Civil Engineering from the University of Western Australia;

Prof Cham holds a Bachelor of Engineering (Civil, Hons) from the University of Malaya, a Bachelor of Science and Honorary Degrees of, Doctor of Laws from the National University of Singapore, Doctor of Engineering from the (Mathematics, Hons) from the University of London and a Doctorate of Philosophy (Fluid Mechanics) from Cambridge University of Western Australia, and Doctor of Letters from the Nanyang Technological University. He was appointed a University. member of the Order of Nila Utama, First Class, in 1990.

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DIRECTORS’ PROFILE (CONT’D) DIRECTORS’ PROFILE (CONT’D)

TANG I-FANG LIM KIM SAN Mr Tang has been a Director since 8 August 1984. He is the Executive Chairman of WBL Corporation Ltd, the Chairman Mr Lim was appointed Senior Advisor on 1 January 2003, upon stepping down as Executive Chairman after 14 years at of United Engineers Ltd, Wearnes International (1994) Ltd and the Deputy Chairman of The Straits Trading Company Ltd. the helm of the SPH Group. He is responsible for the current organisational and management structure of the Group, having He is also a director of Exchange Fellowship Ltd and OCBC, Wearnes & Walden Investments (Singapore) Ltd. transformed it into a multi-platform media organisation.

In public service, he led several UN Economic Missions for Asian countries and was Chairman of EDB; Chairman of JTC; He is also the Chairman of Times Publishing Ltd and Press Foundation of Singapore Ltd. Chairman of the Sub-Committee on Service Sector of Singapore Economic Committee (1985). He was conferred Distinguished Service Order (DUBC) in 1972. He was named the Singapore Businessman of the Year in 1989. Prior to joining the Group, Mr Lim served as Cabinet Minister in ministries as diverse as National Development, Finance, Defence, Education, Environment and Communications. He was also the Chairman of Housing & Development Board, Public

Mr Tang was previously a director of Oversea-Chinese Banking Corporation Ltd and Times Publishing Ltd. Utilities Board, Port of Singapore Authority and Managing Director of Monetary Authority of Singapore. He started his career as a banker and industrialist.

Mr Tang holds a BSc Mech. Eng. from National Central University, China and an MBA from Harvard University. Mr Lim has received several national honours and awards, including the Order of Temasek, NTUC Medal of Honour, PAP

YEO NING HONG Distinguished Service Medal and the prestigious Ramon Magsaysay Award for community leadership. He was conferred an Dr Yeo was appointed to the Board on 15 March 2001. He is the Senior Advisor of Hyflux Ltd, a member of the Temasek Honorary Degree of Doctor of Laws, National University of Singapore. Advisory Panel, and an Advisor to Far East Organisation. He also serves on several business, sports and civic organi- zations, including as Chairman of the Singapore Totalisator Board and the Singapore Symphony Orchestra Trust; NGIAM TONG DOW Honorary President of the SEA Games Federation and Patron of the Singapore National Olympic Council. He is also the Mr Ngiam was appointed to the Board on 15 March 2001. He is the Chairman of HDB Corporation Pte Ltd and a director Chairman of a couple of technology start-up companies. of Valuair Limited, United Overseas Bank Ltd, Yeo Hiap Seng Ltd and Majulah Connection Ltd. He is also a Corporate Advisor of Temasek Holdings (Pte) Ltd.

Dr Yeo is a former Cabinet Minister and has served as Minister for Defence and Minister for Communications and Information. He was previously the Chairman of PSA Corporation Ltd, Executive Chairman of the Singapore He was formerly a director of Temasek Holdings (Pte) Ltd, Overseas Union Bank Ltd, Development Bank of Singapore Technologies Group of Companies, as well as a director of DBS Bank Ltd and DBS Group Holdings Ltd. Ltd and Singapore Airlines Ltd.

Dr Yeo holds a MSc from Singapore University, and an MA and PhD from Cambridge University. He also has a Mr Ngiam has a distinguished public service career, having served as Chairman of the Housing & Development Board, distinguished academic and public record, having been conferred several awards and honorary positions in Singapore Board, Economic Development Board, Telecommunications Authority of Singapore, and Deputy

and overseas, including Honorary Fellowship of Christ’s College, Cambridge and Distinguished Service Order of the Chairman of the Board of Commissioners of Currency. He was also Permanent Secretary of the Prime Minister’s Office,

Republic of Singapore. the Ministries of Finance, Trade & Industry, National Development, and Communications.

Mr Ngiam holds a Bachelor of Arts (First Class Hons) in Economics from the University of Malaya (Singapore) and Master

of Public Administration from Harvard University.

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DIRECTORS’ PROFILE (CONT’D) DIRECTORS’ PROFILE (CONT’D)

LEE EK TIENG He is a member of the Board of Governors, Singapore International Foundation, and the Chairman of the Haggai Institute, Mr Lee was appointed as a director on 15 March 2001. He is the Group Managing Director of the Government of International Board of Trustees, Atlanta. Singapore Investment Corporation Pte Ltd and a director of Fraser & Neave Ltd. He is also a member of the Lee Kuan Yew Exchange Fellowship and a director of the Lee Kuan Yew Scholarship Fund. Dr Pillai holds an LLB First Class Hons (Singapore), LLM (Harvard) and SJD (Harvard).

He was previously Chairman of the Public Utilities Board and Temasek Holdings Pte Ltd, Head of Civil Service and SUM SOON LIM Permanent Secretary (Special Duties) in the Prime Minister’s Office, as well as Deputy Chairman of the Monetary Mr Sum was appointed to the Board on 5 December 2003. He is currently a corporate advisor to Singapore Technologies Authority of Singapore. Pte Ltd.

Mr Lee holds a Bachelor’s Degree in Engineering from the University of Malaya (Singapore) and has a Diploma in Public Mr Sum also sits on the boards of CapitaLand Ltd, Chartered Semiconductor Manufacturing Ltd, STT Communications Health Engineering from the University of Newscastle-Upon-Tyne (UK). He is a member and Fellow of various professional Ltd, Singapore Health Services Pte Ltd and Singapore Technologies Telemedia Pte Ltd. He is also a Commissioner of P.T. engineering bodies in Singapore and overseas. Indonesian Satellite Corporation (Indosat) and a member of the Securities Industry Council.

CHEONG CHOONG KONG Mr Sum has worked with the Singapore Economic Development Board, DBS Bank, J.P. Morgan Inc., Overseas Union Dr Cheong was appointed a director on 1 March 1997. He is also the Chairman of Oversea-Chinese Banking Corporation Bank and Nuri Holdings (S) Pte Ltd, a private investment holding company. Ltd and was previously the Deputy Chairman and Chief Executive Officer of Singapore Airlines Ltd. Mr Sum received his B. Sc. (Hons) in Production Engineering from the University of Nottingham, England.

He holds a Bachelor of Science with First Class Honours in Mathematics from the University of Adelaide, a Master of Science and a PhD in Mathematics from the Australian National University. He was Associate Professor and Head of the WILLIE CHENG Mathematics Department at the University of Malaya before joining Singapore Airlines in 1974. Mr Cheng was appointed a director on 1 March 2004. He is a director of Neptune Orient Lines Limited, NTUC Fairprice Cooperative Ltd, Spring Singapore and the Accounting & Corporate Regulatory Authority. He is also Chairman of the

He was named outstanding Chief Executive in 1996 and Fortune magazine’s 1998 Asia’s Businessman of the Year. Singapore Science Centre, the National Volunteer & Philanthropy Centre and the Jurong Country Club.

PHILIP PILLAI He was previously Country Managing Director of Accenture Singapore. Dr Pillai was appointed as a director on 5 December 2003. He is a Senior Partner in the law firm of Shook & Bok, Singapore. He is currently a director of the Monetary Authority of Singapore, Singapore Technologies Engineering Ltd, Mr Cheng holds a Bachelor of Accountancy (First Class Hons) from the University of Singapore. He is a CPA. He is also a fellow

Singapore Technologies Electronics Ltd, Lindeteves-Jacoberg Limited, Hotung Investment Holdings Limited and PT Agro of the Singapore Institute of Directors and the Singapore Computer Society.

Indomas.

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EXECUTIVE OFFICERS EXECUTIVE OFFICERS (CONT’D)

CHEONG YIP SENG ARTHUR SEET KEONG HOE Editor-in-Chief, English/Malay Newspapers Division Executive Vice President, Finance Mr Cheong has been in journalism for over 40 years. In January 1987, he became Editor-in-Chief of the English and Malay Mr Seet is the Executive Vice President of Finance. He held various finance positions in Times Publishing Berhad, and in Newspapers Division, a position he holds today. As Editor-in-Chief, he manages four newspapers – , Singapore Newspaper Services Pte Ltd, including Financial Controller and General Manager, Circulation. Mr Seet has The Business Times, Berita Harian and The New Paper. been with the Group for 30 years.

He is a non-executive director of SBS Transit Ltd. In 1997, Mr Cheong received the ASEAN Award for information. He also Mr Seet is a director of MobileOne Ltd. He is a Fellow of the Chartered Association of Certified Accountants and serves on the Bioethics Advisory Committee and the National University of Singapore Council. member of the Institute of Certified Public Accountants of Singapore.

THAM KHAI WOR SNG NGOI MAY Senior Executive Vice President, Marketing Executive Vice President Mr Tham is the Senior Executive Vice President of Marketing, responsible for sales and marketing of advertising in the Corporate Services & Corporate Relations English, Malay and Chinese newspapers, and heads the marketing activities of all newspapers. He has been with the Group Mrs Sng is the Executive Vice President, responsible for the Group’s Properties, Administration, Information Resource Centre,

for 33 years. Legal/ Secretariat and Corporate Relations functions. She joined the Group in 1983 as Group Editorial Manager and has served in various management positions in the Editorial Support Services and Human Resources divisions.

He was the President of Master Printers’ Association from 1983 – 1984; and Advertising Media Owners Association, Singapore, for 11 years (1986 - 1997), and is now their Honorary Advisor. Concurrently, he was Singapore’s represen- Mrs Sng is concurrently the General Manager of Press Foundation of Singapore Limited, a charity foundation set up in tative in the Asian Foundation of Advertising Associations, and Governor of the Institute of Advertising, Singapore. 2003. Prior to joining SPH, she was in the Government Administrative Service and worked in the Ministries of Health, Finance and Home Affairs. Mrs Sng holds a Master of Science from the University of Singapore.

ROBIN HU YEE CHENG Executive Vice President LOW HUAN PING Chinese Newspapers Division, Newspapers Services Division Executive Vice President, Technology Mr Hu joined the Group as Executive Vice President, Chinese Newspapers Division and Newspaper Services Division on Mr Low is the Executive Vice President, Technology. He has been with the Group for 18 years. Previously, he was Chief February 1, 2004. Before joining SPH, Mr Hu was Managing Director of global business in ’s wholly-owned Executive Officer of SPH Ltd, a subsidiary of SPH, Chairman of CyberWay Pte Ltd and a director of Singapore National Computer Systems Pte Ltd. Cable Vision Limited. Mr Low is also a director of MobileOne Ltd.

Mr Hu has extensive experience in the public and private sectors in areas such as technology and media. Between 1995 and Mr Low started his career at the Ministry of Defence, where he subsequently headed various IT departments.

2001, he worked in China initially as a member of the Economic Development Board’s pioneering team in Suzhou and later

as Counsellor (Industry and Investment) in the Singapore Embassy in Beijing before becoming a technopreneur during the Mr Low holds a Bachelor of Arts (Honours) and Master of Arts from Cambridge University, where he read Engineering and a

heydays of the dotcom era. Master of Science from the University of Singapore. He also graduated from Harvard’s Business School Advanced Management Program.

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EXECUTIVE OFFICERS (CONT’D) EXECUTIVE OFFICERS (CONT’D)

WEE LEONG HOW GINNEY LIM MAY LING Executive Vice President, Human Resources & Head, Legal & Group Company Secretary Executive Director, SPH MediaWorks Ltd Ms Lim is Head of the Legal/ Secretariat Department and Group Company Secretary. She has been with the Group since Mr Wee has been with the Group for 20 years, and is currently the Executive Vice President of Human Resources. He is December 1991 and founded the Legal/Secretariat Department in SPH which until her joining, had no in-house legal concurrently Executive Director of SPH’s TV subsidiary, SPH MediaWorks Ltd. department.

Mr Wee started his career in the Singapore Civil Service, first as an engineer in the Ministry of Defence followed by a Prior to joining SPH, Ms Lim was heading the Legal & Secretariat department of NTUC INCOME. She has over 20 years stint in the Foreign Service. of experience in the legal, corporate secretarial and insurance sectors.

Mr Wee holds a Master of Arts from Cambridge University, where he read Engineering under a Singapore Government Ms Lim holds a Bachelor of Law (Honours) from the National University of Singapore. She is also an Associate of the

scholarship. He also has a Master of Business Administration from the National University of Singapore. Institute of Chartered Secretaries and Administrators and an Associate of the Chartered Insurance Institute.

MICHAEL CHIN YONG KOK She is a member of the Group 8: Listed Companies Committee of the Singapore International Chamber of Commerce. Acting Executive Vice President, Corporate Development and Properties Mr Chin has been with the Group for 13 years. He is Acting Executive Vice President of the Corporate Development Division and JOYCE CHEE SIEW LUAN Properties. He started his career with SPH in Corporate Planning/Business Development Department, and then moved to the Head, Internal Audit Properties Department. He also held concurrent positions in Production and Human Resources Divisions. Mrs Chee joined SPH in 1986 as the deputy chief internal auditor and became the head of Internal Audit in 1987. She was

responsible for both internal audit functions of SPH and Times Publishing groups until 1996. Prior to joining SPH, she headed Mr Chin started his career as an engineer in the Public Works Department and later, a senior manager in Coopers & Lybrand, the internal audit function of Tan Chong Motors and was the deputy head of audit in Great Eastern Assurance. before joining SPH.

She has held the Vice President and Governor positions in the Institute of Internal Auditors (Singapore) for many terms He holds a Bachelor of Science, First Class Honours, University of Manchester, a Master of Science, University of Manchester and has actively contributed to the growth and development of the internal audit profession in Singapore. and a Master of Business Administration from the National University of Singapore.

Mrs Chee is a Certified Public Accountant (Singapore) and a Certified Internal Auditor (US).

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SEIZING THE INITIATIVE

“Only the player with the initiative has the right to attack.”

– Wilhem Steinitz (1836–1900), the first world champion SPH-Corporate_Blu 11/9/04 11:54 AM Page 26

REVIEW BY CHIEF EXECUTIVE OFFICER

Financial year 2004 was an eventful and milestone year for SPH.

More significantly, we took note of and acted decisively on what our shareholders and stakeholders wanted us to do. We were able to enhance value for our shareholders, made inroads into regional markets, strengthened our products to attract readers, and leveraged on our core capabilities and brand name to stay ahead.

It was a year of achievements as our newspapers, magazines and TV channels went on a winning streak and clinched a string of top international awards for excellence and quality. But it was also a testing time as we had to take several tough measures to stay the course. On balance, I believe we put up a good show and can look back on the past year with satisfaction.

The following gives a short review of how we measured up in the key areas.

Looking back on the year We entered FY04 when the economy was still sluggish, as it was just recovering from the adverse effects of SARS which ravaged many businesses in Singapore and the region. Terrorism continued to be a clear and present danger.

Amid the uncertainty and difficult operating environment, SPH’s core newspaper business remained soft and the Group ended the first quarter with a net profit of $83.8 million, slightly up from $82.8 million in the same quarter of the previous year. Total turnover dipped 1.1% to $240.3 million.

With a slow but steady global recovery underway, our newspaper operations improved in the second quarter and the group posted $89.3 million in net profit. Overall performance of the group was also boosted by additional rental income from the new extension to Paragon, which opened for business on 1 September 2003.

The pickup came in the third quarter as consumer sentiment improved, in tandem with the economic recovery. Newspaper and magazine revenue went up, on the back of a low post-SARS period, as did our property, broadcasting and multimedia segments. For the quarter, the Group registered a net profit of $369.5 million, of which $170.5 million came from the disposal of Belgacom and $110.1 million from the sale of Times House site, markedly up from the $63.3 million in the same period in FY03.

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REVIEW BY CHIEF EXECUTIVE OFFICER (CONT’D) REVIEW BY CHIEF EXECUTIVE OFFICER (CONT’D)

I am pleased to report that we ended the year on a very positive note, achieving a net profit of $546.3 million, Rationalisation of TV and free newspaper operations which is an increase of 44.2% from the previous financial year. In early 2004, SPH began serious negotiations with MediaCorp Pte Ltd to rationalise the Group’s free-to-air television broadcasting and free newspaper businesses, which have incurred continuing losses. Competition We have delivered on three key fronts. since media liberalisation in May 2000 has raised production and acquisition costs, as well as led to duplication of resources. Return of capital to shareholders To our shareholders, we returned nearly $1.1 billion in cash in late June 2004, following a 5-for-1 share split SPH MediaWorks, the Group’s broadcasting arm, chalked up further losses of $44.5 million in FY04, up from the and a major capital reduction exercise. The stock split was to make SPH shares more accessible to small $40.2 million a year ago. Negotiations on the merger of MediaWorks’ Channels U and i, and SPH’s free investors. The capital reduction was to return surplus cash to shareholders by way of a $2,865 cash compen- newspaper Streats with MediaCorp, were in its final stages at the close of the financial year. sation for every 1,000 shares held, with cancellation of 15 per cent of shares. The proposed transactions, which were later signed on 17 September 2004, sought to create a new TV The move was aimed at enhancing SPH’s return on equity (ROE) and earnings per share (EPS). The capital company in which SPH would have a 20% stake, and for SPH to co-own 40% of MediaCorp Press, which return demonstrated the Group’s commitment to managing the company’s capital on an ongoing basis and, publishes Today, a free newspaper. SPH will merge and Streats with MediaCorp’s Channels 5 and where appropriate, returning surplus capital to shareholders. The capital reduction exercise will not affect the 8, and Today respectively. It was agreed that the commercial viability of would be reviewed. company’s funding of immediate and long-term growth plans as it still has a substantial cash balance. The continuing losses, especially from the TV operation, were not sustainable. SPH believes rationalisation is Both the share split and capital reduction were overwhelmingly approved by shareholders at an Extraordinary in the best interest of the company, as it would immediately stem the losses and enhance shareholder value, General Meeting on 7 May 2004. The exercises were completed on 24 June 2004. while allowing the company to hold significant stakes in the TV and free newspaper businesses.

Commitment to divest non-core assets Business performance We kept our commitment to divest non-core assets. The company sold the Times House site, a 10,485 sq metre Group turnover for the year grew 8% to $970.1 million, boosted by revenue from its core newspaper and freehold land at the junction of Kim Seng Road and River Valley Road, for $118.9 million in March 2004. In April magazine operations, which rose 5.6% to $833.2 million, property segment which brought in $82.6 million, up 2004, we netted $170.5 million from the sale of our entire stake in Belgacom, Belgium’s biggest phone company. 56.7 %, and broadcasting and multimedia business which fell 2.6% to $54.3 million.

We sold a substantial part of our stake in StarHub following its recent IPO. Based on the IPO price of $0.95 Riding on improving consumer sentiment, which was dented by the SARS crisis last year, the Group’s per share, SPH would book an investment income of $126.3 million, before deduction of the Company’s IPO advertising revenue rose 4.1% to $664.5 million. Operating expenses went up 4.5% to $643.5 million. Higher expenses. This gain will be reflected in the first quarter results in FY05. prices forced newsprint costs up by 6.2%, while staff costs also rose 9% due to the higher staff variable bonus that had to be set aside in line with higher operating profits. The company remains committed to divesting the remaining non-core assets in the Group as it focuses on its core business.

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REVIEW BY CHIEF EXECUTIVE OFFICER (CONT’D) REVIEW BY CHIEF EXECUTIVE OFFICER (CONT’D)

Property Zaobao Sunday was also given a major overhaul and relaunched on 29 August 2004. It was also well received The Property segment was one of the three star performers of the year, the other two being newspaper and by readers, and sales rose by 6,000 copies to an average of 189,300. Its weekday circulation averaged magazine segment and Treasury and Investment. The new Paragon extension helped boost property turnover 185,000 copies, slightly down from last year. to $82.6 million, up 56.7%. The higher income came from rentals in the new wing and renewals of rental leases at the existing Paragon, as well as increased occupancy from the medical and office tower. The string of top international and local newspapers awards which our newspapers garnered during the year attests to their quality and excellence. These awards, given by prestigious newspapers groups such as the Society Times Properties also contributed a higher net profit of $114.6 million, with $110.1 million from the Times for News Design (SND), Society of Publishers in Asia (SOPA), IFRA’s Publish Asia and the Pacific Area Newspaper House sale. Publishers’ Association (PANPA), are a good way to benchmark our work against other papers in the world.

Newspaper sales On another platform, the online editions of our major newspapers and AsiaOne also continued to attract Against dwindling newspaper readership worldwide, competition from alternative media and pressure on more eyeballs. Both the Chinese and English online sites drew up to 300 million pageviews a month, with readers’ time, SPH newspapers managed to buck the trend and held their ground. This was borne out by the Zaobao.com alone snaring about 250 million pageviews. Our Internet business unit also reported higher Nielsen 2004 Media Index survey, which showed that overall newspaper readership stayed at 84%, with advertising revenue, in line with global trend. some titles even enjoying a surge. The survey also found that readers in Singapore were becoming more sophisticated and mature, especially among the white-collar workers and PMEBs. This trend augurs well for Reaching out to young readers paid newspapers. SPH newspapers also stepped up efforts to attract younger readers by presenting news in a more appealing way, packaged in small, entertaining bites and delivered with edge. They added youth sections and education But the total daily average circulation of the Group’s 13 paid newspapers fell by 2.1% to 1,036,836 copies pages which give young readers a forum to contribute their works and air their views. during FY04, compared to the previous financial year. This was partly due to the cover price increases for nine newspapers which came into effect on 16 January 2004, and increased competition, including from free sheets. Our Chinese newspapers also made it easier and more accessible for readers who are not as proficient in the language, with simplified Chinese and easy-to-read stories. Both flagship dailies, The Straits Times and However, readers continued to find value for money in SPH newspapers, underlining support for their on- Lianhe Zaobao, moved into schools to engage more student readers through their media and student going improvements to beef up content and design. Six newspapers in the SPH stable underwent makeovers correspondent clubs, and their efforts boosted weekly sales to schools. to stay relevant, with the most successful being the redesigned Sunday Times. Its circulation soared by 9,700 copies to 396,000 within a month after its revamp. Newspaper-in-education is an area which we will be paying more attention to grow and drive readership.

Daily average weekday circulation of The Straits Times, SPH’s English flagship daily, stayed at 380,200, SPH Magazines’ regional thrusts marginally down from the previous year. This was before the cover-to-cover makeover for the 159-year-old Not to be left out, our magazine subsidiary, SPH Magazines, also went into overdrive to make further inroads paper, which remains the newspaper of choice for Singapore readers. This new-look ST was relaunched on into regional markets and roll out new lifestyle titles. In the short span of eight months from October 2003 19 October 2004, receiving kudos all round for its classy, fresh and clean design. when it started its regional expansion drive, SPH Magazines established a beachhead for its bestseller women’s magazine in the region through joint ventures in Malaysia, Thailand and China.

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REVIEW BY CHIEF EXECUTIVE OFFICER (CONT’D) REVIEW BY CHIEF EXECUTIVE OFFICER (CONT’D)

At home, SPH Magazines continued to enlarge its stable of lifestyle titles, which included Shape, a health and Other newspapers such as The New Paper and Lianhe Zaobao continued to support the annual President’s fitness magazine for women, Maxim, a men’s lifestyle magazine, Simply Her, a lifestyle guide for busy, working Challenge fund-raising drive. women who multi-task, Young Parents pre-school guide and Young Parents Baby. For SPH, corporate giving is a way of giving back to the communities which have made it profitable and its And in a move that strengthens its foothold in the regional magazine market, it bought over the media and responsibility to forge community spirit. publishing business of Blu Inc for $32.9 million, bringing into its fold another 40 titles including Female, NuYou, Peak and Torque. With the acquisition of Blu Inc, SPH Magazines now publishes 63 in-house and Acknowledgements contract titles, making it a market leader. SPH has been able to turn in a good performance because of the collective efforts of our staff to excel at every level. Their unstinting support and talent have enabled the company to maintain its competitive edge. Corporate citizenry I want to thank all of them for their dedication and hard work and for going the distance for the company. I SPH widened its community involvement during the year and continued to contribute to a diverse range of would also like to express my deepest appreciation to our business associates, management, unions and worthy events, from education, arts and culture, conservation, sports to charity. customers for their strong support and contribution to help keep the SPH flag flying high.

In recognition of its staunch support to help keep the local arts scene thriving, SPH was given the We enter the new financial year with renewed confidence, energised by our synergy and well-positioned to Distinguished Patron of the Arts Award by the National Arts Council for the 12th year running. It was also big- tap new growth opportunities in the region. But let’s not be lulled into thinking that it will be business as usual hearted on charity, and initiated a group organised giving on 23 August 2004 with donations totalling for we have to brace ourselves for the changing market dynamics in the coming months which may upset the $200,000 for 20 charity and welfare organisations which look after the needy sick and elderly. growth momentum. These include rising interest rates, oil and newsprint prices, cooling of China’s economy, continuing conflict in the Middle East and terrorism risk in the region. SPH staff also pitched in to do their bit for charity by helping to raise funds for various charitable causes. Its hugely successful fund-raiser, The Straits Times School Pocket Money Fund met its target collection of $3.5 We must remain nimble and focused and continue to build on our competitive strengths to produce quality million to help the growing number of needy students on its list, which now stands at 11,000, as did its products and grow earnings, exploring fresh ideas, breaking new grounds to give those who believe in us Chinese TV Channel U, which raised a record $7 million from its second Ren Ci Charity Show for the Ren Ci better value for money. Hospital and Medical Centre.

Alan Chan Heng Loon Chief Executive Officer

32 33 SPH-Corporate_Blu 11/9/04 11:54 AM Page 34

POSITIONAL ADVANTAGE

“If you see a good move, look for the better one.”

– Emmaneul Lasker (1868–1941), who was world champion for 26 years, a record not likely to be broken. SPH-Corporate_Blu 11/9/04 11:54 AM Page 36

OPERATIONAL REVIEW OPERATIONAL REVIEW (CONT’D)

BETTER READS, BRIGHTER LOOKS – NEWSPAPER MAKEOVER MANIA The sunnier New Paper on Sunday SPH newspapers spared no efforts to refresh their image during the year to give better value to readers. The English, • On 1 August 2004, the Sunday edition of The New Paper emerged with a classy new look, giving readers even more Chinese and Malay Newspapers went all out to beef up their content and design in a series of makeovers. The results reason to lay their hands on the bestselling weekend tabloid. pleased readers and advertisers, and boosted sales. Here are the highlights of the key new features in the various

redesigned papers. Simple and elegant in design with impactful pictures, the extras in the redesigned New Paper on Sunday, which was launched in 1999, include a forum for readers to engage in sms and mms, a driving column for women, a Hey! Section English and Malay Newspapers that invites well-known personalities to give views on movies and TV shows. Brighter and more vibrant Sunday Times

• On 28 September 2003, readers woke up to an eye-catching Sunday Times, which was given a cover-to-cover Readers particularly like the feel-good style of a weekend magazine. makeover, including a new classy masthead.

Berita Minggu It was an immediate hit with readers, who lapped up its richer content and vibrant layout, which is organised around • On 15 August 2004, Berita Minggu, the Sunday edition of Berita Harian, a Malay language daily, was relaunched, readers’ needs and demands for weekend reading. The writing is brighter, headlines are more striking and the design with livelier content, bigger pictures and graphics. It also offers more features, covering economic and money style combines text, photos and graphics in a visually stunning way with the use of bold colours. There are more matters, a main feature called Focus BM, hot topics, lifestyle, entertainment and sports. Its weekday edition will be lifestyle, leisure and health features, as well as new sections, with each carrying a news-you-can-use anchor columns revamped in 2005. to help readers digest the news and information in a faster way.

Chinese Newspapers The Sunday Times redesign was a winner. A snap poll found that more than eight in 10 readers liked the new version Shin Min Daily News and one-third said they spent more time reading it. Sales went up by 8,000 copies weekly. • On 18 March 2004, Chinese evening daily Shin Min Daily News hit newsstands with a brand new look, with full colour in all its news pages and additional special features. This followed its very successful introduction of four new colour The successful Sunday Times revamp paved the way for a total overhaul of its mothership, The Straits Times, which pages in September 2002. was relaunched on 19 October 2004.

Positive feedback from readers and advertisers to the change in 2002 spurred the paper on to a major facelift. The The Business Times new Shin Min now gives readers deeper insights into breaking news and updates readers on trends, the hottest • On 1 September 2004, The Business Times took on a brand new look, surprising readers with a refreshing blue entertainment and sports news. masthead and a meatier paper with extra sections.

In the most radical makeover since 1995, the new features in the redesigned business daily include bigger fonts, a

friendlier layout, more features and specialty pages such as Economy Watch, a daily look at the state of the Singapore

economy; Malaysian and regional pages and Views from the Top, where CEOs give their views on current issues.

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OPERATIONAL REVIEW (CONT’D) OPERATIONAL REVIEW (CONT’D)

Lianhe Zaobao REGIONAL EXPANSION – SPH MAGAZINES • On 21 February 2004, SPH’s flagship Chinese daily Lianhe Zaobao launched Popcorn, a new education section in Financial Year 2004 marked a major milestone for SPH Magazines as it embarked on a regional expansion drive. zbNOW, to reach out to younger readers. The education pages feature topics of concern and interest to teens in a fun and lively style on every Wednesday. In a spate of months from October 2003 to May 2004, SPH Magazines established its premier Her World brand in the region. In October 2003, it launched the revamped issue of Her World Malaysia, a joint venture with Berita Publishing Sdn • On August 8, 2004, Lianhe Zaobao on Sunday unveiled its new sleek look. Brighter and more vibrant, it offers readers Bhd. In March 2004, in a joint venture with GMM Media Co., Her World Thailand made its debut. Two months later, loads of interesting features and a more leisurely read for the whole family. Stories are written in a lighter vein to – Her World, the first Chinese- language edition of the magazine, made its entry into China. Her World Indonesia was engage younger readers while the design is attractive and magazine-ish. The main news section remains a broadsheet launched in October 2000 under the banner of licence partner PT. Media Ikrar Abadi. but the lifestyle section comes in a tabloid, giving readers more appealing lifestyle and fun topics. Her World in Singapore continued to dazzle with its revamp in October 2003 and its bumper issues packaged with attractive gifts in December 2003 and July 2004. In Singapore, standalone title Her World Body was launched in November 2003, and the second issue was published in May 2004.

One of the jewels in the crown of achievement for SPH Magazines was its acquisition of the media assets of the Blu Inc Group, including all its magazine titles, among which are the popular Female and Nuyou. The group publishes a total of 40 in–house and contract titles. The acquisition of the Blu Inc Group is part of SPH Magazines’ strategy to strengthen its position in the magazine business here and in the region.

SPH Magazines continued to enlarge its stable of lifestyle publications with the launch in July 2004 of the Singapore version of Shape, the top US health and fitness magazine for women, under the licence of Weider Publications. This was SPH Magazines’ first international licensing arrangement.

Among the non–women’s titles, SPH Magazines launched the Singapore edition of Maxim in September 2004. It is the largest men’s lifestyle title in the US, which sells four million copies monthly and has 23 editions in 33 countries. Young Parents won three top international media awards – a gold at IFRA 2004 and a silver at SOPA 2004 for design and a SOPA 2004 certificate for editorial excellence. The Young Parents Pre–school Guide was launched in October 2003 and Young Parents Baby made its debut in August 2004 as a biannual publication new and first–time parents.

SPH Magazines’ stable of titles today stands at 63 in–house and contract titles, including those acquired under the Blu

Inc Group.

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OPERATIONAL REVIEW (CONT’D) OPERATIONAL REVIEW (CONT’D)

BUMPER HAUL OF AWARDS AND HONOURS • In July 2004, SPH emerged a big winner at the annual IFRA’s Publish Asia Media Awards, walking away with six awards SPH continued its winning streak in the last financial year, reaping a bumper crop of top international and local awards for best in printing, infographics and design. for newspaper excellence, broadcasting, advertising, corporate governance and supporting the arts in Singapore. And the awards went to: In the Best in Print category for newspaper with double width, The Straits Times took the silver award, while its Chinese broadsheet Lianhe Zaobao received a bronze. ST also clinched the gold and bronze awards for the Best in Newspapers and Magazines Newspaper Infographics while The Sunday Times won gold for the Best in Newspaper Design. • In September 2003, four SPH journalists clinched the top Investors’ Choice Awards for financial journalism given by the Securities Investors Association of Singapore (Sias). They are: Business Times’ Executive Money Editor Genevieve Young Parents, published by SPH Magazines, beat top magazines in the region to win the gold award for Best in Cua, named Best Financial Journalist of the Year, senior correspondent Christopher Tan of The Straits Times, who won Magazine Design. the Best Financial Story of the Year award, Straits Times correspondent Lorna Tan, given a special award, and Lianhe Zaobao’s Ang Li Ching, given The Rising Star Award. Publish Asia Media Awards is an annual event organised by IFRA, the world’s leading organisation for the newspaper and media publishing industry.

• In December 2003, two SPH journalists – Zaobao photographer Bob Lee and Streats photojournalist Edwin Koo – clinched the top two prizes in one of the categories in the ClickArt World Photojournalist Meet 2003. Advertising • In September 2003, SPH’s Product Development and Branding team won certificates for being finalists in The New

• In March 2004, The Sunday Times won two international design awards, putting it in the league of the world’s best- York Festivals’ International Design & Print Advertising Competition, a prestigious international competition that designed newspapers. The paper, which shed its old image for a bold new look and livelier, more colourful design in honours the best work in communications and media, including TV and cinema advertising, TV programming and September 2003, bagged the excellence awards given out by the prestigious Society for News Design, based in the promotion and interactive multimedia. US. Straits Times photographer Desmond Foo also received an excellence award for photography from the society. • In November 2003, SPH’s Classified Advertisements Telephone Sales (Cats) division took the top spot in the Call Centre

• In June 2004, SPH newspapers swept nine awards – in reporting, photography and design – in a publishing of the Year awards, organised by the Call Centre Council of Singapore. The awards honour organisations and competition organised by the Society of Publishers in Asia (Sopa). The Straits Times grabbed six top awards for individuals for excellent customer service, high levels of productivity, operational efficiency and profitability. business reporting, news photography, feature photography, and newspaper design in the local-newspaper and magazines category. It took the second prize for reporting and special editions. The Sunday Times, which was • In November 2003, SPH received the first patron award given by the Association of Accredited Advertising Agents redesigned in September 2003, won the top prize for newspaper design. Singapore (4AS) for making a significant contribution to the local advertising and marketing communications industry.

40 41 SPH-Corporate_Blu 11/9/04 11:54 AM Page 42

OPERATIONAL REVIEW (CONT’D) OPERATIONAL REVIEW (CONT’D)

TV accolades GROWING YOUNG READERS • Despite being a relatively newcomer to the TV scene, SPH MediaWorks’ two TV channels punched above their weight With sagging newspaper readership worldwide, especially among the younger population, SPH newspapers have spared in the region. no efforts in reaching out to younger readers and meeting their expectations and needs.

• In December 2003, Channel i News was voted the Best General News Programme at the 8th , Throughout the year, they relentlessly kept up with the young, making sure that their products appeal to them, constantly beating leading contenders CNN International's News Biz Today and Star News Asia. Channel U’s variety show, Top improving their content and design to stay relevant, with stories written in a lighter, livelier, fun and entertaining style. 10, won Best Entertainment Programme, while its host, , was named Best Entertainment Presenter. It also won Some newspapers added youth sections and education pages to give more value to younger readers. Best Art Direction for drama serial, The Romance Of The Book, and Sword. Channel U was also runner-up in the Terrestrial Channel of the Year category. And they didn’t just stop at that. Some of the mainstream newspapers went directly to schools to engage and connect with the students through various initiatives to cultivate the newspaper reading habit in them.

• In December 2003, MediaWorks again won awards at the annual Promax and BDA Asia 2003. It struck gold in the News and Current Affairs Promo category for a Channel i News trailer and another for Channel U’s current affairs Highlights of some of these activities by the four major newspapers in SPH to grow younger readers. programme Sense Of Being. A silver went to the Best Movie Promo for the show, Alive. Straits Times Media Club

• In June 2004, for its third birthday, MediaWorks won a gold and two silvers at the International Promax & BDA Awards Launched in August 2003 to promote students’ knowledge of current affairs and to improve their writing skills, 49 presented in New York, taking its total haul of international awards since its launch in 2001 to 48. secondary schools are now members of this club, with 38 of them joining during the year under review.

Corporate Governance Schools just need to subscribe to 500 or more copies of The Straits Times a week to become a member. They can also • In January 2004, SPH came in second in a survey by Asian finance magazine, The Asset, for financial transparency invite ST editors and journalists to give talks on topical issues to their students, and during the school holidays, students and good corporate governance. The rating is the highest for a non government-linked company, up from its No. 3 can attend workshops at SPH. slot the previous year. Response from schools has been overwhelming. In less than a month, 27 schools signed up, raising weekly circulation of

• In April 2004, SPH was named The Company Most Committed to Dividend Policy by Hongkong-based FinanceAsia the ST by 20,000. Sales have since gone up to 35,500 now. At the height, 47 schools participated in the scheme with magazine. 37,000 copies of Straits Times subscribed.

The Arts Besides these efforts, The Straits Times is planning to organise a National Schools Newspaper of the Year competition

• In September 2004, SPH received the Distinguished Patron of the Arts award from the National Arts Council for the and it is beefing up its education section every Monday.

12th year running, for its continuing strong support to promote the arts in Singapore. Simpler Chinese for young readers

Readership for Chinese newspapers has eroded over the years, partly because many students are not as proficient in the

Chinese language. Realising this trend many years ago, the Chinese dailies in SPH started taking proactive steps to halt

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OPERATIONAL REVIEW (CONT’D) OPERATIONAL DATA

the shrinking readership and grow new readers. Daily Average Circulation for 2004

The Straits Times 380,197 Besides stepping up efforts to promote its Friday Weekly for secondary school students and for primary

pupils, SPH’s Chinese flagship daily, Lianhe Zaobao, has also made its content more digestible to younger readers. The Sunday Times 388,796

The Business Times 27,515 In January 2004, Lianhe Zaobao launched its Popcorn pages to make its coverage relevant to young readers, with simplicity as the key. The weekly Wednesday pages have hit off well with students, helping to push Zaobao sales to more The New Paper 115,915 than 54 schools by 29,000 copies a week. Zaobao also keeps in close touch with schools through its school sports

correspondents and student correspondents clubs. The New Paper on Sunday 154,004

Streats 280,373 The two student weeklies also pitch their articles at the students levels, with headings in Hanyu and a mini glossary

in English for uncommon Chinese phrases on each page. Both weeklies also have a newspaper in education programme Lianhe Zaobao (Weekday) 184,445 which teachers could use as supplementary teaching materials. Lianhe Zaobao (Sunday) 194,640

Friday Weekly also organises a slew of regular club events and helps schools to produce students newsletters. (Weekday) 124,134

Malay and Tamil papers keep pulse on the young Lianhe Wanbao (Weekend) 123,634 In August 2003, Berita Harian, the Malay language paper, introduced a new and more interactive page, called Expresi, for Shin Min Daily News (Weekday) 123,639 youths to express themselves on any issues close to their hearts, while Tamil Murasu carries an eight-page section called Manavar Murasu (Students’ Murasu), with contributions from students and teenagers. TM also runs a youth page, called Shin Min Daily News (Weekend) 121,234 Youth Murasu, every Tuesday and reaches out to Indian students through activities such as workshops to prepare students for exams and football tournaments. Friday Weekly 62,523

Thumbs Up 29,944 Educational visits for students to SPH facilities

At the Group level, SPH also conducts tours for students to its English and Chinese newsrooms, its TV news studio at Berita Harian 58,503 News Centre, Toa Payoh North, to give them an insight into how newspapers operate and how TV news bulletins are 66,000 produced. Berita Minggu

Tamil Murasu (Weekday) 8,504 SPH is also a partner of the Ministry of Education’s Learning Journey Programme, which gives students a learning

experience outside the classroom. Last year, a total of 43 groups or 1,720 students visited the SPH’s printing plants at Tamil Murasu (Sunday) 15,232

Print Centre in Jurong, to learn more about the media group's state-of-the-art printing facilities.

44 45 SPH-Corporate_Blu 11/9/04 11:54 AM Page 46

OPERATIONAL DATA (CONT’D) OPERATIONAL DATA (CONT’D)

Advertising Expediture by Media ( $million )

SPH Newspapers Gross Readership Trends (’000) 6,000

6.0% 5,000 9.6% 4,000 32.5% 4.7% 3,000

2,000 13.3% 1,000

0 19941995* 1996 1997 1998 19992000 2001 2002 2003 2004 4.1% Year 29.7%

SPH Newspapers Gross Readership Trends (’000) SPH Newspapers

2,000 FY2004 Today

Total adspend: S$1,973 Mediacorp TV 1,800 SPH Mediaworks TV

1,600 Periodicals

5.8% Radio 1,400 8.6% Others (Cinema, Busbacks/ Taxi-Tops and Posters) 1,200 4.5% 35.7% 1,000

14.6% 800

600

26.8% 3.9% 400

200 FY2003 0 19941995 1996 1997 1998 19992000 2001 2002 2003 2004 Total adspend: S$1,723 Year

English Chinese Malay/Tamil Note: TV includes bonus airtime, where discounts can range from 65% to 80%. Source: The Nielsen Media Research’s 2004 Media Index Survey.

46 47 SPH-Corporate_Blu 11/9/04 11:54 AM Page 48

PLAYING FOR A WIN

“Every Pawn is a potential queen.”

– James Mason (1909–1984), British actor SPH-Corporate_Blu 11/9/04 11:54 AM Page 50

STAFF WELFARE CORPORATE CITIZENRY

At SPH, human resources and talent are our most cherished assets. And we recognise that they are a critical force in the Corporate citizenry is one of SPH’s core values. Matching words with deeds, the Group, which firmly believes that it has a success of the company. That’s why we provide a stimulating and family-friendly environment to develop and retain talent, social responsibility in helping to build a better nation, continued to demonstrate its strong commitment to fostering community and a flexible and enriching workplace for staff to grow. spirit by supporting a diverse range of community and charity events. Despite a flagging economy and the aftermath of SARS, it continued to contribute generously to support arts and culture, education, conservation efforts, sports and charity. SPH believes that a happy worker is a steady and more productive worker. To help staff, especially those with young children, balance their family life and work, the company has put into place various pro-friendly measures, including flexible A staunch supporter of local arts, SPH believes in promoting home-grown talent and providing them a platform to working hours, work from home arrangement and no-pay leave for mothers who want to extend their maternity leave. showcase their works and creativity, as well as other efforts to develop Singapore into a vibrant arts and cultural hub. For its contributions to events such as SPH Homecoming SSO Series, TheatreWorks Writers’ Lab, Singapore Arts Five-day week & longer maternity leave Festival, Singapore River Hongbao, Chinese Cultural Festival, it was conferred the Distinguished Patron of the Arts Award On 1 August 2004, SPH implemented a five-day week for staff, in line with the government’s push to create a more family- by the National Arts Council for the 12th successive year. friendly environment and to maintain employment competitiveness although production staff will commence the shorter week next year. Also effective from 1 August 2004, SPH extended paid maternity leave by a month to three months for up to the It also contributed to other worthy community causes, including the SPH Geography Challenge, SPH Schools Relay fourth child as part of the pro-family measures to encourage Singaporeans to have bigger families. This move followed changes Championships and SPH Reading Room project. to the Employment Act. In addition, employees with children below seven years of age are entitled to two days of paid childcare leave each year. Both moves were welcomed by SPH staff. SPH also stepped up its corporate giving last year. As part of bringing National Day cheer to the less fortunate, it gave out $200,000 to 20 charity and welfare organisations caring for the needy sick and elderly on 23 August 2004, in an Health screening for all organised group giving. This was in addition to donations to various other charitable causes, including the Community On 1 February 2004, the company overhauled the group’s medical benefits scheme for staff, moving away from a reactive Chest Share programme and the Press Foundation of Singapore, a non-profit organisation which was set up in 2002 to approach to a proactive one emphasising early detection and preventive healthcare. Under the new medical scheme, non- promote lifelong learning. executive staff are also entitled to basic health screening, a perk previously enjoyed by executives only. This screening

was carried out between March and May 2004. SPH also encourages staff volunteerism by helping to raise funds for charitable causes. Its top fun-raiser, The Straits Times School Pocket Money Fund, now into its fifth year, managed to raise its target of $3.5 million to help 11,000 Espirit de Corps parties students from low-income homes despite the bad times. Its Chinese TV Channel U exceeded expectations when it To promote Espirit de Corps among employees, the company announced in August 2004 that the annual Dinner and collected a record $7 million from its second Ren Ci Charity Show in January for the Ren Ci Hospital and Medical Centre. Dance would be replaced by smaller and more intimate divisional parties, which are aimed at building camaraderie and Lianhe Zaobao’s ZPOP zbNOW Concert and The New Paper’s Big Walk and Be Yourself Day raised $338,000 for the 2003 bonding. Under the new scheme, each division will organise its own year-end bash. Divisions can also give out Long President’s Challenge. Tamil Murasu spearheaded the setting up of the G. Sarangapany Education Trust Fund and helped

Service Awards at such party. raised the initial seed money of $500,000.

SPH scholarships SPH believes that healthy companies need healthy communities. We see our community involvement as a way of giving SPH awarded scholarships to 14 children of SPH employees in June 2004 to help them pursue their studies at junior back to the community which has supported us.

colleges, polytechnics or a local university. The company also gave out 12 public scholarships for higher studies at univer-

sities in the US, Britain, Australia and China. 50 51 SPH-Corporate_Blu 11/9/04 11:54 AM Page 52

THE PIECES

IN ACTION

“You have to have fighting spirit. You have to force moves and take chances.”

– Bobby Fischer (b.1943), the 11th world champion (1972–75) and arguably the greatest chess player of all time. SPH-Corporate_Blu 11/9/04 11:54 AM Page 54

<< September 6, 2003

Lianhe Zaobao celebrated its 80th >> anniversary at Suntec Singapore Ballroom October 14 – 15, 2003 with then Senior Minister Lee Kuan Yew as >> the Guest of Honour. More than 800 guests October 1, 2003 For the first time, over 300 letter writers of including ministers, business, community The Straits Times Forum pages were invited SIGNIFICANT leaders and diplomats attended the gala event. ST School Pocket Money Fund launched its to a “Thank You” gathering at SPH News >> fourth fund-raising drive to support the Centre for their contribution. It was an EVENTS growing number of needy students, who opportunity for them to meet ST editors September 28, 2003 have gone up from 7,200 to 11,000 this and exchanged views. They also toured year. Despite the weak economy, $3.5 the newsroom, TV news studio and Relaunch of The Sunday Times. The eye- million was raised. Information Resource Centre and catching, more lively and vibrant Sunday exchange. ST plans to hold this edition was an instant hit with readers, event annually. especially the younger ones, boosting the weekly sales by more than 8,000 copies.

<< << << November 7, 2003 December 9 – 11, 2003 << January 7, 2004 C.A.T.S. (Classified Advertisements December, 2003 The Straits Times Media Club organised a Lianhe Zaobao launched the Popcorn Telephone Sales) of Marketing Division camp for 100 “student editors” from 32 pages, as part of its effort to attract young clinched the Call Centre of the Year Lianhe Zaobao set up its Chongqing member schools. The activities included an readers. The pages, which are published (under 50 seats) title in the Call Centre bureau, the fourth bureau in China. It is interview with Acting Education Minister every Wednesday, have been well received, Council of Singapore Awards, which the first foreign news bureau to open in Tharman Shanmugaratnam and with 30,000 copies of Zaobao being sold recognise organisations with excellent Chongqing. talks on broadcast journalism from to schools weekly. customer service, high level of productivity, ST editors and senior journalists. operational efficiency and profitability.

>> >> >> >> January 16, 2004 January 9, 2004 January 10 – 15, 2004 January 11, 2004 SPH raised cover prices of nine of its newspapers, in the first price adjustment SPH Magazines held its premier beauty The annual River Hongbao to celebrate MediaWork’s Ren Ci Charity Show, since 1995. The increase for The Straits event of the year, Her World Beauty the Lunar New Year was launched at the organised for the second year, raised $7 Times, Sunday Times, The New Paper, The Awards 2003, for the third year running, Marina Promenade by National million for Ren Ci Hospital. The live New Paper on Sunday, Berita Harian, at the Grand Hyatt Singapore. The Development Minister . charity show with MediaWorks artistes Berita Minggu, Lianhe Zaobao, Lianhe highlight of the event was the Her World The event is jointly organised by Chinese performing daredevil feats pulled in some Wanbao and Shin Min Daily News, was in Beauty Awards, which honour the best in Newspapers Division (CND) and promotes 1.25 million viewers. two stages – 16 January 2004 for the local beauty industry. Chinese culture and traditions. newsstand copies and 1 February 2004 for subscription copies.

<< << << << February 14, 2004 March 18, 2004 March 5, 2004 February, 2004 Organised by CND, the biennial Chinese Shin Min Daily News celebrated its 37th Member of Parliament Halimah Yacob You Weekly, a Chinese entertainment Cultural Festival featured a record number birthday with a revamp. The new look was named Woman of the Year 2003 and weekly, launched Yummy Guide 2004. of activities – 220 over six weeks – ranging Chinese evening daily comes with 16 extra Dr Wong Ting Hway, Young Woman Some 50,000 copies of the food guide were from Chinese opera, exhibitions, dance to colour pages, a new, bolder and more Achiever, at the annual event organised by quickly snapped up. films which draw on Chinese heritage. vibrant layout and more varied content. Her World magazine. SPH-Corporate_Blu 11/9/04 11:55 AM Page 56

>> >> >> >> March 25, 2004 May 2, 2004 March 8, 2004 May 23, 2004 Singapore Business Awards 2003, organised A New Business Unit was set up by CND Singapore’s biggest mass sports event, The Streats launched its second edition. About by The Business Times and DHL, named to complement Marketing division to New Paper Big Walk, drew some 70,000 20,000 copies of the noon edition were Ron Sim, Founder and CEO of OSIM leverage on the influence and brand of participants. The annual event, into its distributed at selected MRT stations, food International, Businessman of the Year; Lee Chinese newspapers and reach out 14th year, was organised by The New junctions and shopping malls in the Hsien , President & CEO of SingTel, to advertisers. Paper, Singapore Amateur Athletic CBD area. Outstanding Chief Executive of the Year; Association and Singapore and gave Hyflux Limited the Sports Council. Enterprise Award.

<< << June, 2004 << << June 6, 2004 June 10, 2004 May 28, 2004 Lianhe Zaobao launched its Indonesian Singapore Promising Brand Awards 2004, edition, which is printed and distributed by organised by Lianhe Zaobao and ASME, Lianhe Zaobao revamped its sports pages The 19th World Book Fair, was held at the the International Daily News in Jakarta, recognise small and medium enterprises in just before the start of the Olympics Games Suntec Singapore Ballroom. More than under licence by SPH. Under this Singapore that have shown outstanding in Athens. The new design is eye-catching, 702,000 people attended the annual fair. agreement, 5,000 copies of Zaobao are performance in communicating with vivid pictures and illustrations. printed daily, boosting the presence of the their brands. SPH Chinese flagship daily in the region.

>> >> >> >> July, 2004 July 5, 2004 July 6, 2004 August 4, 2004 SPH opened its first China business office SPH launched the SPH Ink Awards to SPH Magazines launched Shape Singapore, Veteran of social service, Haji Abu Bakar in Shanghai. Registered as New Beginnings honour excellence in print advertisements the local version of the top US health and Maidin was named the Berita Harian Management Consultancy (Shanghai) published in SPH newspapers and fitness magazine for woman. Achiever of the Year 2004. The event was Co Ltd, the office explores business magazines. This annual award culminates organised by Berita Harian and presented opportunities and developments in China. at an industry-wide gala event where by McDonald’s. winners will be announced.

<< August 28, 2004 << << << August 29, 2004 August 29, 2004 September 1, 2004 ZPop zbNOW Concert, organised by zbNOW, raised over $180,000 for the Zaobao Sunday was revamped to attract A total of 68 schools participated in Be The Business Times was relaunched with a annual President’s Challenge 2004. Over younger readers. It has a new masthead, Yourself Day, organised by The New Paper. brand new look, featuring a refreshing blue 15,000 attended Singapore’s biggest the design is sleek, brighter with more Students dressed creatively to schools to masthead, and offering movers and shakers outdoor concert at the Padang and were colour visuals and there are more features express their personalities and made a meatier content, with a minimum of 32 entertained by local and foreign artistes for leisurely reading for the whole family. donations to the President’s Challenge pages on weekdays and speciality pages. from Korea, China, Taiwan, Hong Kong 2004. The event, launched in 2002, raised Shipping Times has been integrated into and Malaysia. $140,000 this year. the main paper. SPH-Corporate_Blu 11/9/04 11:55 AM Page 58

WINNING THRUST

“Never is reason and clear thinking more necessary than when victory is in sight.”

– Eugene Alexandrovich Znosko-Borovsky (1884–1954), Russian professional chess player. SPH-Corporate_Blu 11/9/04 11:55 AM Page 60

CORPORATE GOVERNANCE REPORT CORPORATE GOVERNANCE REPORT (CONT’D)

SPH is committed to achieving high standards of corporate governance and has adopted a framework of corporate and ensures that board members are provided with complete, adequate and timely information. As a general rule, board governance policies and practices in line with the principles set out and best practices recommended in the Code of papers are sent to Directors at least one week in advance in order for Directors to be adequately prepared for the Corporate Governance (Code). meeting. Senior management staff are invited to attend board meetings to answer any queries that the Directors may have on the Group’s operations. The Directors may from time to time, also request to meet without Management’s SPH has complied with the full requirements of the Code as well as the Singapore Exchange Listing Manual requirements. presence. In the last financial year, the Board had met without the CEO and other management staff’s presence. There are other sections in this annual report which have an impact on the disclosures required. The annual report should be read in totality for SPH’s full compliance. The Company Secretary attends all Board meetings and is responsible to ensure that board procedures are followed. It is the Company Secretary’s responsibility to ensure that the Company complies with the requirements of the Companies SPH has received recognition in the form of accolades and awards from the investment community for its good corporate Act and the Singapore Exchange Listing Manual. Together with the other management staff of SPH, the Company

governance practices and transparency in management and reporting (please refer to page 42 for details). Secretary is responsible for compliance with all other statutes, rules and regulations which are applicable to the Company.

BOARD OF DIRECTORS Access to Information Board’s Conduct of its Affairs The Board is provided with quarterly financial accounts, other financial statements and progress reports of the Group’s The principal responsibilities of the Board are: business operations. The Directors may contact the Company’s senior management through the Company Secretary or 1. Reviewing and approving the corporate policies, strategies, budgets and financial plans of the Company; the CEO. 2. Monitoring financial performance including approval of the annual and interim financial reports; 3. Reviewing the processes for evaluating the adequacy of internal controls, risk management, financial reporting Should Directors, whether as a group or individually, need independent professional advice, the Company Secretary will, upon and compliance; direction by and approval of, the Chairman or the CEO appoint a professional advisor to render the advice. The cost of such

4. Approving the nominations of Directors and appointment of senior management, and determining and reviewing their professional advice will be borne by the Company. remuneration levels;

5. Approving major funding proposals, investments, acquisitions and divestment proposals; and Board Composition 6. Assuming responsibility for corporate governance. Currently, the Board comprises 12 Directors, all of whom, except for the CEO, are non-executive and independent directors.

Details of the Directors’ academic and professional qualifications and other appointments are set out on pages 14 to 19 The Board conducts regular scheduled meetings on a quarterly basis. Ad–hoc meetings are convened when circum- of the annual report. stances require. The Articles allow a board meeting to be conducted by way of a tele-conference. The attendance of the

Directors at meetings of the Board and Board Committees, as well as the frequency of such meetings, is disclosed on The Company’s Articles allow for the appointment of a maximum of 12 Directors. The size and composition of the Board

page 72. A Director will not be nominated by the Nominating Committee for re-appointment and will be deemed to have are reviewed from time to time by the Nominating Committee (NC), who is of the view that the current Board size is

resigned, if he fails to attend three Board or Board Committee meetings consecutively, without good reason. appropriate, taking into account the nature and scope of the Group’s operations.

The Chairman ensures that board meetings are held when necessary and sets the board meeting agenda in consultation The NC is also of the view that the current Board comprises persons who as a group, possesses the relevant qualifi-

with the Chief Executive Officer (CEO). The Chairman reviews all board papers before they are presented to the Board cations, experience and core competencies necessary to manage the Company.

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The independence of each Director is reviewed annually by the NC. The NC adopts the Code’s definition of what Director Training constitutes an independent director in its review. As a result of the NC’s review of the independence of each Director for Directors are kept informed about the relevant training available either inhouse or organised externally. A comprehensive this financial year, the NC is of the view that the non-executive Directors are independent directors and further, that no orientation programme will be organized for new Directors to familiarize them with the Group’s operations, organization individual or small group of individuals dominate the Board’s decision making process. structure and corporate policies. The objective of the orientation programme is to give new Directors a better understanding of SPH’s business and the media industry, and to help them settle into their new roles. Chairman and CEO The Company has a separate Chairman and CEO. The Chairman is a non-executive and independent director. Directors may also request further explanations, briefings or informal discussions on any aspect of the Group’s operations or business issues from the management. The CEO is the chief executive in the Company and bears executive responsibility for the Company’s business, while the Chairman bears responsibility for the workings of the Board. The Chairman and the CEO are not related.

Board Membership and Renewal Process The NC recommends all appointments and re-appointments of Directors to the Board and the Board Committees. As a media company, all new appointments to the Board are subject to the approval of the Media Development Authority (MDA).

New Directors are at present either appointed by way of a board resolution, after the NC approves their appointment or elected at the Annual General Meeting (AGM) of the Company. New Directors appointed by way of board resolution, must submit themselves for re-election at the next AGM.

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 over 70 years of age are also required to be re-elected every year at the AGM under Section 153(6) of the Companies Act.

Board Performance The NC evaluated the Board’s performance as a whole, and that of individual Directors, in this year based on performance criteria set by the Board. The performance criteria included an evaluation of size and composition of the Board, the Board’s access to information, Board processes, Board performance in relation to discharging its principal

functions and fiduciary duties, and communication with top management, attendance record, and intensity and quality of

participation at meetings.

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CORPORATE GOVERNANCE REPORT (CONT’D) CORPORATE GOVERNANCE REPORT (CONT’D)

BOARD COMMITTEES The AC performs the following main functions: To facilitate effective management, certain functions have been delegated by the Board to various Board Committees. 1. To review annual audit plans and audit reports of external and internal auditors; Members of the Board and each Board Committee during the financial year are set out on page 73. 2. To review the auditors’ evaluation of the system of internal accounting controls; 3. To review the balance sheet and profit and loss account of the Company and the consolidated balance sheet and profit Executive Committee (EC) and loss account of the Group before they are submitted to the Board for its approval; The EC comprises six members, four of whom are independent non-executive directors. The EC is chaired by the 4. To review the scope, results and adequacy of the internal audit function, procedures and its cost effectiveness; Chairman of the Board. 5. To review any interested person transactions as defined under the Singapore Exchange Listing Manual; 6. To review the independence, objectivity and cost effectiveness of the external auditors and the nature and extent of non- The EC’s principal responsibilities are: audit services supplied by the external auditors so as to balance the maintenance of objectivity and value for money; 1. To review, with management, and recommend to the Board the overall corporate strategy, objectives and policies of the and Group, and monitor their implementation; 7. To recommend to the Board the appointment of external auditors. 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 Company and its subsidiaries The AC has conducted an annual review of the volume of non-audit services to satisfy itself that the nature and extent of

which do not fall within the Company’s core businesses but which are considered strategic investments for the long- such services will not prejudice the independence and objectivity of the external auditors before confirming their re-nomination. term prospects of the Company;

4. To approve the affixation of the Common Seal onto any document in accordance with the Company’s Articles The AC meets with the external and internal auditors, without the presence of management, at least once year. of Association;

5. To act on behalf of the Board in urgent situations, when it is not feasible to convene a meeting of the entire Board; Internal Controls and In the course of their statutory audit, the Company’s external auditors will highlight any material internal control 6. To carry out such other functions as may be delegated to it by the Board. weaknesses which had come to their attention in carrying out their normal audit which is designed primarily to enable them to express their opinion on the financial statements. Such material internal control weaknesses noted during their Audit Committee (AC) audit, and recommendations, if any, by the external auditors are reported to the AC. The AC comprises five members, all of whom are independent non-executive directors. All the members of the AC have

many years of experience in board and senior management positions in the accounting and related financial fields. The The Internal Audit division (IAD) has an annual audit plan, which complements that of the external auditors. IAD’s plan NC is of the view that the members of the AC have sufficient financial management expertise and experience to discharge focuses on material internal control systems including financial, operational, IT and compliance controls, and risk

the AC’s functions. 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.

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Based on the audit reports and management controls in place, the AC is satisfied that the internal control systems provide Internal Audit reasonable assurance that assets are safeguarded, that proper accounting records are maintained and financial IAD is staffed with eight audit executives, including the Head of Internal Audit, who is a Certified Internal Auditor (CIA) statements are reliable. and a Certified Public Accountant (CPA). All staff have to adhere to a set of code of ethics adopted from The Institute of Internal Auditors, US (IIA). IAD reports directly to the chairman of the AC on audit matters, and to the CEO on administrative Enterprise Risk Management matters. IAD has adopted the Standards for Professional Practice of Internal Auditing set by IIA and ensures staff SPH recognizes the importance of enterprise risk management process (ERM) and has set up an ERM unit, which reports competency through specialized training and exposure to major business and support areas. to the EC. The AC reviews IAD’s reports on a quarterly basis. The AC also reviews and approves the annual IA plans and resources to

SPH institutionalized its risk management practices under a formal enterprise risk management framework in 2004. External ensure that IAD has the necessary resources to adequately perform its functions. consultants were appointed to advise SPH on the ERM framework. With the ERM framework, SPH aims to better manage the uncertainties and adverse threats as it realises potential opportunities and creates value. The SPH ERM framework Interested Person Transactions incorporates a continuous and iterative 4-step process for enhancing risk awareness and enabling a culture of risk SPH has an internal policy in respect of any transactions with interested persons and has in place a process to review management across the organisation: and approve any interested person transactions. For this financial year, there were no interested person transactions.

• Identification. Workshops were conducted by external ERM consultants at both management and divisional levels, Nominating Committee (NC)

to communicate the risk management objectives and approach. Significant risks, in the broad areas of strategic, The NC comprises five members, of whom four are independent non-executive directors.

regulatory, operational, and financial were systematically identified, evaluated and prioritised based on consequence and likelihood of occurrence. Key stakeholders such as shareholders, partners, customers and employees were considered. The NC’s principal functions are: 1. To make recommendations to the Board on all board appointments;

• Treatment. Risk treatment plans were determined for the prioritised risks, with appropriate risk owners identified. Cross- 2. To be responsible for the re-nomination of Directors, having regard to the Director’s contribution and performance

divisional teams were formed to drive the implementation of the treatment plans. (e.g.attendance, preparedness, participation and candour) including, if applicable, as an independent director; 3. To determine annually whether or not a Director is independent, bearing in mind the circumstances set forth in

• Monitoring. The ERM Unit provides the EC, with six-monthly reports and updates on major risks faced by SPH, and paragraph 2.1 of the Code of Corporate Governance, and any other salient factors;

progress of risk treatment plans. Any new risk of significance will be reported for review accordingly. The progress is 4. To decide whether or not a Director is able to and has been adequately carrying out his duties as Director of the Company;

reported to the Board. 5. To assess the effectiveness of the Board as a whole, the contribution by each individual Director to the effectiveness of the Board and to decide how the Board’s performance may be evaluated.

• Review. An annual review of the risks will be conducted to evaluate the risk profile, strategies and adequacy and

effectiveness of the risk treatment plans.

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Remuneration Committee (RC) DISCLOSURE ON REMUNERATION The RC comprises five Directors, all of whom are non-executive and independent directors. Members of the RC are Directors’ Remuneration knowledgeable in the field of executive compensation and have access to expert advice inside and/or outside the The CEO’s remuneration package includes a variable bonus element which is performance-related, and also stock Company. options which have been designed to align his interests with those of the shareholders. As an executive director, the CEO does not receive directors’ fees. Non-executive directors have no service contracts.

The head of the Human Resources Division is secretary to the RC, whilst the Company Secretary is the administrator of the Group’s share option schemes. 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 this financial year is as follows:

The RC’s principal responsibilities are: Directors’ Base/Fixed Variable or Benefits 1. To recommend to the Board of Directors a framework of remuneration for the Board and key executives; Fees Salary Bonuses in Kind Total Name of Director (%) (%) (%) (%) (%) 2. To determine specific remuneration packages for each executive director and the CEO or executive of similar rank if Executive Directors the CEO is not an executive director; $750,000 to $999,999 Chan Heng Loon Alan – 66.48% 29.58% 3.94% 100% 3. To recommend to the Board for endorsement the remuneration of the CEO;

4. To consider and approve salary and bonus recommendations in respect of senior executives; Independent Directors Below $250,000 5. To decide on all aspects of remuneration, including but not limited to Directors’ fees, salaries, allowances, bonuses, Lim Chin Beng options, long term incentive schemes, including share schemes, and benefits in kind; and (Chairman) 92.23% – – 7.77% 100% Cham Tao Soon 6. To administer the share option scheme(s) adopted by the Group and to decide on the allocations and grants of options to (appointed on 1.3.2004) 100%–––100% eligible participants under the share option scheme(s). Willie Cheng Jue Hiang (appointed on 1.3.2004) 100%–––100% Cheong Choong Kong 100%–––100% The RC also reviews the succession plan of key executives of the Group, including the CEO. Michael Y.O. Fam 100%–––100% Lee Ek Tieng 100%–––100% Ngiam Tong Dow 100%–––100% Philip Pillai (appointed on 5.12.2003) 100%–––100% Sum Soon Lim (appointed on 5.12.2003) 100%–––100% Tang I–Fang 100%–––100% Yeo Ning Hong 100%–––100% Lee Hee Seng (retired on 5.12.2003) 100%–––100% Wee Cho Yaw (retired on 5.12.2003) 100%–––100%

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Remuneration of Executives COMMUNICATIONS WITH INVESTORS AND SHAREHOLDERS Remuneration of top five executives of the Company (excluding the CEO in above table) in each remuneration band The Company holds analysts’ briefings of its half-year and full-year results and a media briefing of its full year results. The for this financial year: quarterly financial results are published through the MASNET, news releases and the Company’s corporate website.

Remuneration Bands No. of Executives The Company does not practise selective disclosure. Price-sensitive information is first publicly released, either before the $1,000,000 to $1,249,999 1 Company meets with any group of investors or analysts or simultaneously with such meetings. $750,000 to $999,999 – $500,000 to $749,999 1 $250,000 to $499,999 3 The Company has an investor relations team which communicates with its investors on a regular basis and attends to Total 5 their queries. Shareholders or any member of the public may also post any queries via email to our corporate email address, [email protected], and these will be attended to by the corporate relations team in the Company. All The Company adopts a remuneration policy for staff comprising a fixed component, a variable component and benefits shareholders of the Company receive the annual report and notice of AGM. The notice is also advertised in the in kind. The fixed component is in the form of a base salary. The variable component is in the form of a variable bonus newspapers. The annual report is also available on the Company’s corporate website, www.sph.com.sg. 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 All Directors, including the Chairmen of the EC, AC, NC and RC and senior management are in attendance at the AGMs component is the grant of share options to staff under the share option scheme. This seeks to align the interests of staff to allow shareholders the opportunity to air their views and ask Directors or management questions regarding the with that of the shareholders. Company. The external auditors are also invited to attend the AGMs to assist the Directors to answer any queries relating to the conduct of the audit and the preparation and content of the auditors’ report. The remuneration of Directors and Executives shown in the above tables excludes value of stock options granted and income

derived from stock options exercised during the financial year under the Company’s relevant share option schemes. Only The Articles allow a shareholder to appoint one or two proxies to attend and vote instead of the shareholder. The Articles executive directors may participate in the Company’s share option scheme. Non-executive directors are not eligible to do so currently do not allow a shareholder to vote in absentia. under the scheme rules.

The Company is in full support of shareholder participation at AGMs. For those who hold their shares through CPF nominees The Singapore Financial Reporting Standard (FRS) 102 on Share-based Payment requires an entity to reflect in its profit and who are not registered as shareholders of the Company, the Company welcomes them to attend the AGM as observers. or loss and financial position the effects of share-based transactions, including expenses associated with transactions in

which share options are granted to employees. This standard will apply to the Group from the financial year beginning 1 CODE OF BUSINESS ETHICS September 2005, whereby the value of stock options granted and income derived from stock options will be reflected in The Group has adopted a Code of Business Ethics to regulate the standards and ethical conduct of its employees who are

the Group’s financial statements and disclosures. required to observe and maintain high standards of integrity.

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

The Group has adopted an internal code in conformity with the provisions of the Best Practices Guide in the Singapore Exchange

Listing Manual to provide guidance to its Directors and key staff in relation to the dealings in the Company’s securities. In line

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with the guidelines, Directors and key staff of the Group who have access to price-sensitive and confidential information BOARD AND BOARD COMMITTEES MEMBERSHIP are not permitted to deal in the Company’s securities during the periods commencing two weeks before the Main Executive Audit Nominating Remuneration announcement of the Group’s first and third quarter financial results and one month before the announcement of the Name of Director Board Committee Committee Committee Committee Group’s half year and full year financial results, and ending on the date of the announcement of such results respectively, Independent Lim Chin Beng Chairman Chairman – Member Member or when they are in possession of unpublished price-sensitive information on the Group. A system of reporting of Cham Tao Soon Deputy securities dealings by Directors to the Company Secretary and by key staff to the Head of Human Resources Division, (appointed on 1.3.2004) Chairman Member – – – Willie Cheng Jue Hiang has also been established to effectively monitor the dealings of these parties in the securities of the Company. (appointed on 1.3.2004) Member – Member – – Cheong Choong Kong Member – Member – – Michael Y.O. Fam Member Member – Chairman Chairman DIRECTORS’ ATTENDANCE RECORD FOR BOARD AND BOARD COMMITTEE MEETINGS Lee Ek Tieng Member – Member Member1 Ngiam Tong Dow Member Member Member2 Member Member Executive Audit Nominating Remuneration Philip Pillai Name Board Committee Committee Committee Committee (appointed on 5.12.2003) Member – – – Member Lim Chin Beng (Chairman) 6 out of 6 8 out of 8 – 3 out of 3 4 out of 4 Sum Soon Lim Cham Tao Soon (Dy Chairman) (appointed on 5.12.2003) Member – Member – – [appointed on 1.3.04] 3 out of 3 5 out of 5––– Tang I-Fang Member – Chairman – – Chan Heng Loon Alan (CEO) 6 out of 6 8 out of 8 – 3 out of 3 – Yeo Ning Hong Member – – – Member Willie Cheng Lee Hee Seng [appointed on 1.3.04] 3 out of 3 – 2 out of 2 – – (retired on 5.12.2003) Member – – Member Member Cheong Choong Kong 5 out of 6 – 3 out of 4 – – Wee Cho Yaw Michael Y.O. Fam 6 out of 6 8 out of 8 – 3 out of 3 4 out of 4 (retired on 5.12.2003) Member – – – – Lee Ek Tieng 6 out of 6 – 3 out of 4 1 out of 2≈ – Ngiam Tong Dow 6 out of 6 8 out of 8 1 out of 1# 3 out of 3 4 out of 4 Executive Philip Pillai Chan Heng Loon Alan Member Member – Member3 – [appointed on 5.12.03] 5 out of 5–––3 out of 3 Lim Kim San – Member4 –– – Sum Soon Lim [appointed on 5.12.03] 5 out of 5 – 3 out of 3 – – Notes: Tang I–Fang 6 out of 6 – 4 out of 4 – – 1. Mr Lee Ek Tieng was appointed to the Nominating Committee on 5.12.2003. Yeo Ning Hong 6 out of 6–––4 out of 4 2. Mr Ngiam Tong Dow resigned from the Audit Committee on 5.12.2003. Lee Hee Seng 3. Mr Alan Chan Heng Loon will step down as a member of the Nominating Committee following the Annual General Meeting on 6 December 2004. [up to 5.12.03] 1 out of 1 – – 1 out of 1 1 out of 1 4. Mr Lim Kim San is a non-director member of the Executive Committee. Wee Cho Yaw [up to 5.12.03] 1 out of 1–––– Lim Kim San (non–director member of ExCo) – 7 out of 8–––

Notes: # Audit Committee Mr Ngiam Tong Dow resigned as member on 5.12.2003. ≈ Nominating Committee Mr Lee Ek Tieng appointed as member on 5.12.2003.

72 73 SPH-Corporate_Blu 11/9/04 11:55 AM Page 74

THE END GAME

“There are many moves but only one checkmate.”

– Russian proverb. SPH-Corporate_Blu 11/9/04 11:55 AM Page 76

FINANCIAL REVIEW FINANCIAL REVIEW (CONT’D) GROUP SIMPLIFIED FINANCIAL POSITION Segmental Operating Revenue

S$M Newspapers & Magazines 2004 2003 2002 2001 2000 850 S$’000 S$’000 S$’000 S$’000 S$’000 825 Assets Property, plant and equipment 565,531 633,856 670,186 576,408 460,507 800 Investment properties 1,045,852 1,039,754 1,059,538 1,089,438 863,156 Investments 648,982* 1,185,020 1,062,190 991,099 1,192,895 * 775 Cash and deposits 192,621 328,176 387,528 554,338 701,952 Trade debtors 86,435 85,352 92,484 117,948 138,004 Stocks 32,278 54,763 47,045 59,126 45,118 750 Other assets 20,181 41,324 33,698 33,667 28,336 Total 2,591,880 3,368,245 3,352,669 3,422,024 3,429,968 725

Shareholders’ Interests 700 Capital and reserves 1,479,119* 2,247,736 2,241,538 2,289,931 2,414,126 2002 2003 2004 0 Liabilities Year S$M Borrowings 85 Current 81,000 52,900 25,000 183,500 – Property 80 Non–current 683,000 740,000 770,000 550,000 568,587 Trade creditors 64,860 58,049 59,526 40,367 66,254 75 Taxation 70 Current 81,112 68,712 51,204 92,820 142,798 65 Deferred 72,126 85,199 83,287 73,226 52,900 60 Other liabilities 130,663 115,649 122,114 192,180 185,303 55 Total 2,591,880 3,368,245 3,352,669 3,422,024 3,429,968 50 45 * Decrease in capital and reserves due to the Capital Reduction Exercise which took place during the financial year. Consequently, proceeds from the sale of investments and fixed deposits have been utilised to finance the Capital Reduction Exercise. 40 2002 2003 2004 0 Year S$M Broadcasting & Multimedia 85 80 75 70 65 60 55 50 45 40 2002 2003 2004 0 76 Year 77 SPH-Corporate_Blu 11/9/04 11:55 AM Page 78

FINANCIAL REVIEW (CONT’D) FINANCIAL REVIEW (CONT’D)

After-Tax Profit Operating Margin and Return on Operating Revenue

S$’M 600 % 70 550

500 60

450 50 400

350 40

300

250 30

200 20 150

100 10

50

0 0 1988 1989 1990 1991 1992 19931994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 1988 1989 1990 1991 1992 19931994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Year Year Operating Margin Return on Operating Revenue

Earnings Per Share # Return on Shareholders’ Funds and Return on Assets

S$ 0.40 % 40

0.35 35

0.30 30

0.25 25

0.20 20

0.15 15

0.10 10

0.05 5

0 0 1988 1989 1990 1991 1992 19931994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 1988 1989 1990 1991 1992 19931994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Year Year # Adjusted for bonus issues in FY 1993, FY 1995 and FY 1998, capital reduction in FY 1999, capital reduction and share split in FY 2004. Return on Shareholders’ Funds Return on Assets

78 79 SPH-Corporate_Blu 11/9/04 11:55 AM Page 80

FINANCIAL REVIEW (CONT’D) FINANCIAL REVIEW (CONT’D)

Gross Dividend per Share # Revenue Composition S$ 0.40

0.35

20% 20% 0.30

0.25 6% 8% 0.20 68% 4% 4% 70% 0.15

0.10

0.05

0 1988 1989 1990 1991 1992 19931994 1995* 1996 1997 1998 19992000* 2001 2002* 2003* 2004* FY2004 FY2003 Year

Advertisements FY 2004 FY 2003 * Adjusted for bonus issues in FY 1993, FY 1995 and FY 1998, capital reduction in FY 1999 and capital reduction and share split in FY 2004. Circulation – Display 40% 40% Rental & Services – Classified,Recruit & Notices 23% 24% – Magazines 1% 1% Others – Broadcasting & Multimedia 4% 5% Net Dividend S$’M 500

450 Cost Composition 400

8% 8% 350

300

19% 21% 39% 38% 250

200 4% 4% 150

30% 29% 100

50

0 FY2004 FY2003 1988 1989 1990 1991 1992 19931994 1995* 1996 1997 1998 1999 2000* 2001 2002* 2003* 2004* Year Materials, Consumables & Broadcasting Costs Other Operating Expenses * Included special gross dividends of 20 cents per S$1 share in FY 1995, 80 cents per S$1 share in FY 2000, 30 cents per S$1 share in FY 2002, 60 cents per Staff Costs Finance Costs S$1 share in FY 2003 and 11.25 cents per 20 cents share in FY 2004. 80 Depreciation 81 SPH-Corporate_Blu 11/9/04 11:55 AM Page 82

FINANCIAL REVIEW (CONT’D) FINANCIAL REVIEW (CONT’D)

VALUE ADDED STATEMENT GROUP HALF-YEARLY RESULTS

2004 2003 2004 2003 1st Half 2nd Half Full Year 1st Half 2nd Half Full Year S$’000 S$’000 S$’000 S$’000 S$’000 S$’000 S$’000 S$’000 Sale of goods and services 970,075 897,816 Operating revenue 468,418 501,657 970,075 457,695 440,121 897,816 Purchase of materials and services (293,953) (276,561) Value added from operations 676,122 621,255 Profit from operations 175,548 162,401 337,949 146,628 144,268 290,896

Non-production income and expenses: Profit before exceptional items 201,417 370,097 571,514 166,530 150,614 317,144 Foreign exchange differences 602 639 Loss on disposal of fixed assets (305) (403) Profit before taxation 201,417 398,774 600,191 302,323 136,581 438,904 Provision for doubtful trade debts (1,644) (2,118) Bad trade debts recovered 144 202 Profit attributable to shareholders 173,024 373,258 546,282 273,472 105,264 378,736 Investment income 258,017 39,584 Share of net (losses)/profits of associates (249) 10,990 Earnings per S$0.20 share (S$)* 0.09 0.22 0.31 0.15 0.05 0.20 Exceptional items 28,677 121,760 Total value added 961,364 791,909 * Comparatives for FY 2003 were adjusted for Share Split Exercise completed in FY 2004.

Distribution: Employees’ wages, provident fund contributions and other benefits 271,357 249,494 Corporate and other taxes 62,776 63,472 Interest paid 24,203 24,326 Donation and sponsorship* 4,276 21,128 Directors’ fees 790 702 Net dividends to shareholders 290,992 375,058 Total distributed 654,394 734,180

Retained in the business: Depreciation 51,685 53,652 Minority interests (5) 399 Retained earnings 255,290 3,678 961,364 791,909

Productivity ratios: S$ S$ Value added per employee 189,708 167,229 Value added per $ employment costs 2.49 2.49 Value added per $ investment in fixed assets (before depreciation) 0.63 0.68 Value added per $ operating revenue 0.70 0.69

* Last year included a S$20 million donation to the Press Foundation of Singapore.

82 83 SPH-Corporate_Blu 11/9/04 11:55 AM Page 84

THE PIECES

ON THE BOARD

“Tactics flow from a superior position.”

– Bobby Fischer (b.1943). SPH-Financial 3/11 11/9/04 2:03 PM Page 86

88 DIRECTORS’ REPORT

94 STATEMENT BY DIRECTORS

95 AUDITORS’ REPORT

96 AUDITED FINANCIAL STATEMENTS

96 BALANCE SHEETS

97 CONSOLIDATED INCOME STATEMENT

98 CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

99 FINANCIAL REPORT AND MISCELLANEOUS CONSOLIDATED CASH FLOW STATEMENT

102 NOTES TO THE FINANCIAL STATEMENTS

144 SHAREHOLDING STATISTICS

149 OVERSEAS BUREAUS

152 PROPERTIES OF THE GROUP

153 CORPORATE INFORMATION FINANCIAL CALENDAR

154 NOTICE OF ANNUAL GENERAL MEETING

160 PROXY FORM SPH-Financial 3/11 11/9/04 2:03 PM Page 88

DIRECTORS’ REPORT DIRECTORS’ REPORT FOR THE YEAR ENDED AUGUST 31, 2004 FOR THE YEAR ENDED AUGUST 31, 2004

Direct Interests Deemed Interests The Directors present their report together with the audited financial statements of the Group and balance sheet of the Company for the year Sept 1, Aug 31, Sept 21, Sept 1, Aug 31, Sept 21, ended August 31, 2004. 2003# 2004^ 2004^ 2003# 2004^ 2004^

The Company Directors Management Shares

1. The Directors in office at the date of this report are: Lim Chin Beng 1 44– –– Lim Chin Beng Cham Tao Soon 1 44– –– Cham Tao Soon* Chan Heng Loon Alan 2 44– –– Chan Heng Loon Alan Willie Cheng Jue Hiang 1 44– –– Willie Cheng Jue Hiang* Cheong Choong Kong Cheong Choong Kong 1 44– –– Michael Fam Yue Onn Michael Fam Yue Onn 1 44– –– Lee Ek Tieng Lee Ek Tieng 1 44– –– Ngiam Tong Dow Ngiam Tong Dow 1 44– –– Philip N Pillai # Sum Soon Lim # Philip N Pillai 1 44– –– Tang I-Fang Sum Soon Lim 1 44– –– Yeo Ning Hong Tang I–Fang 1 44– –– Yeo Ning Hong 1 44– ––

* Appointed on March 1, 2004 # Appointed on December 5, 2003 Ordinary Shares Cham Tao Soon – ––2,396 10,183 10,183 Arrangements to enable Directors to acquire Benefits Willie Cheng Jue Hiang 2,000 8,500 8,500 3,000 12,750 12,750 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 Cheong Choong Kong 8,000 34,000 34,000 1,000 8,500 8,500 corporate, except as disclosed under ‘Share Options in the Company’ in paragraphs 7 and 8. Michael Fam Yue Onn 50,000 212,500 212,500 – –– Philip N Pillai 4,000 17,000 17,000 – –– Directors’ Interests in Shares Yeo Ning Hong 7,920 33,660 33,660 12,870 54,697 54,697 3. The Directors holding office as at August 31, 2004 who had interests in shares and options in the Company and its subsidiaries as recorded in the register of Directors’ shareholdings were as follows: Options for Ordinary Shares Chan Heng Loon Alan 50,000 850,000 850,000 – ––

# Or later date of appointment. Relates to Ordinary and Management Shares of S$1 each and Options to subscribe for Ordinary Shares of S$1 each.

^ Relates to subdivided Ordinary and Management Shares of S$0.20 each and Options to subscribe for Ordinary Shares of S$0.20 each, arising from the Share Split and Capital

Reduction Exercises completed on June 24, 2004. Details of the Share Split and Capital Reduction Exercises are disclosed under 'Share Split and Capital Reduction' in paragraph 6.

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

88 89 SPH-Financial 3/11 11/9/04 2:03 PM Page 90

DIRECTORS’ REPORT DIRECTORS’ REPORT FOR THE YEAR ENDED AUGUST 31, 2004 FOR THE YEAR ENDED AUGUST 31, 2004

Directors’ Contractual Benefits Share Options in the Company 4. Since the end of the previous financial year, no Director has received or become entitled to receive a benefit under a contract which Group Executives’ Share Option Scheme (“1990 Scheme”) is required to be disclosed by Section 201(8) of the Companies Act, Chapter 50. 7. (a) The 1990 Scheme was approved by shareholders on December 28, 1990 and modified pursuant to ordinary resolutions passed by shareholders at Extraordinary General Meetings held on January 7, 1995, January 6, 1996 and July 16, 1999 respectively.

Material Contracts (b) (i) Details of options granted previously have been disclosed in the Directors’ Reports for the respective years. 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 (ii) The persons to whom the options have been granted do not have the right to participate, by virtue of the options, in any the end of the previous financial year. share issue of any other company.

(c) The 1990 Scheme was replaced by the 1999 Scheme on July 16, 1999, and since then, no options have been granted under the Share Split and Capital Reduction 1990 Scheme. 6. (a) At the extraordinary general meeting of the Company held on May 7, 2004, shareholders approved the Share Split and Capital Reduction Exercises of the issued share capital of the Company in the following sequence: (d) Under the 1990 Scheme, no more options remain outstanding as at August 31, 2004.

(i) Subdivision of each share of S$1 in the capital of the Company into five shares of S$0.20 each, and Singapore Press Holdings Group (1999) Share Option Scheme (“1999 Scheme”) 8. (a) The 1999 Scheme was approved by shareholders at an Extraordinary General Meeting held on July 16, 1999 to replace the (ii) A capital reduction of approximately 15% of the issued share capital of the Company held by shareholders in proportion 1990 Scheme. to their shareholding in the Company, and making a cash distribution to the shareholders of S$3.82 for each subdivided share cancelled. (b) Details of options granted previously have been disclosed in the Directors’ Reports for the respective years.

(b) The Share Split and Capital Reduction Exercises were completed on June 24, 2004. Immediately after the Share Split Exercise, (c) During the financial year, options were granted for a total of 3,556,000 ordinary shares of S$1 each, details of which are as follows: the number of subdivided ordinary and management shares in issue was 1,842,496,340 and 18,838,830 respectively. (i) Categories of persons to whom options were granted: (c) Arising from the Capital Reduction Exercise, the number of subdivided ordinary and management shares in issue was reduced by 276,375,844 and 2,825,831 respectively. The issued share capital of the Company, immediately after the Capital Reduction Total No. of Exercise, comprised 1,566,120,496 subdivided ordinary shares and 16,012,999 subdivided management shares. Ordinary Shares of S$1 each Category No. of Persons under Options granted Executive Director 1 150,000 Employee 1,512 3,391,500 Associate 1 14,500 1,514 3,556,000

90 91 SPH-Financial 3/11 11/9/04 2:03 PM Page 92

DIRECTORS’ REPORT DIRECTORS’ REPORT FOR THE YEAR ENDED AUGUST 31, 2004 FOR THE YEAR ENDED AUGUST 31, 2004

(ii) The expiry date of these options is disclosed in Note 3 to the financial statements, provided that they have not been subsequently cancelled. Other Subsidiaries 13. No option to take up unissued shares of other subsidiaries has been granted during the financial year. (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. 14. No shares of other subsidiaries have been issued during the financial year by virtue of the exercise of options to take up unissued shares.

(d) The aggregate number of options granted since the commencement of the 1999 Scheme on July 16, 1999 to August 31, 2004 is 15. At the end of the financial year, there were no unissued shares of other subsidiaries under option. 16,273,400 options to subscribe for ordinary shares of S$1 each, equivalent to 69,161,950 options to subscribe for subdivided ordinary shares of S$0.20 each. Audit Committee 16. The Audit Committee carried out its functions in accordance with Section 201B(5) of the Companies Act, Chapter 50, and the 9. The unissued ordinary shares of the Company under option at the end of the financial year pursuant to the 1999 Scheme are set out Singapore Exchange Listing Manual. in Note 3 to the financial statements. Its functions include reviewing the audit plans and audit reports of the internal and external auditors, the auditors’ evaluation of the internal accounting controls, and the scope and adequacy of the internal audit function; reviewing the balance sheet of the Company Share Options in Subsidiaries and financial statements of the Group before submitting them to the Board for approval; reviewing any interested person transaction; SPH MediaWorks Pre-IPO Share Option Scheme (“MediaWorks Pre-IPO Scheme”) and reviewing the independence, objectivity and cost effectiveness of the external auditors and the nature and extent of non-audit 10. (a) The MediaWorks Pre-IPO Scheme was approved on February 12, 2001. services supplied by them.

(b) (i) Details of options granted previously have been disclosed in the Directors’ Reports for the respective years. 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. (ii) 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. On behalf of the Directors (c) No options were granted during the financial year under the MediaWorks Pre-IPO Scheme.

(d) The aggregate number of options granted since the commencement of the MediaWorks Pre-IPO Scheme on February 12, 2001 to August 31, 2004 is 65,026,000. Lim Chin Beng Michael Fam Yue Onn 11. No shares of SPH MediaWorks Ltd have been issued during the financial year by virtue of the exercise of options to take up unissued Chairman Director shares. Singapore, 12. At the end of the financial year, unissued ordinary shares of SPH MediaWorks Ltd under option pursuant to the MediaWorks Pre-IPO October 11, 2004 Scheme were as follows:

Date of Expiry Exercise Balance Options Options Balance Grant Date Price 1.9.03 Exercised Cancelled 31.8.04

Feb 23, * S$0.10 29,050,000 – (3,610,000) 25,440,000 2001

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

92 93 SPH-Financial 3/11 11/9/04 2:03 PM Page 94

STATEMENT BY DIRECTORS AUDITORS' REPORT TO THE MEMBERS OF SINGAPORE PRESS HOLDINGS LIMITED

In the opinion of the Directors, We have audited the balance sheet of Singapore Press Holdings Limited and the consolidated financial statements of the Group for the (a) the balance sheet of the Company and the financial statements of the Group for the year ended August 31, 2004 are drawn up financial year ended August 31, 2004 set out on pages 96 to 143. These financial statements are the responsibility of the Company’s directors. so as to exhibit a true and fair view of: Our responsibility is to express an opinion on these financial statements based on our audit.

(i) the results of the business, changes in shareholders’ equity and cash flows of the Group; and 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 (ii) the state of affairs of the Group and of the Company. 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 (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 believe that our audit provides a reasonable basis for our opinion. when they fall due. In our opinion, On behalf of the Directors (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, 2004 and the results, changes in equity and cash flows of the Group for the financial year ended on that date; and

Lim Chin Beng Michael Fam Yue Onn (b) the accounting and other records required by the Act to be kept by the Company and by those subsidiaries incorporated in Singapore Chairman Director of which we are the auditors have been properly kept in accordance with the provisions of the Act.

Singapore, October 11, 2004

PricewaterhouseCoopers Certified Public Accountants

Singapore, October 11, 2004

94 95 SPH-Financial 3/11 11/9/04 2:03 PM Page 96

AUDITED FINANCIAL STATEMENTS CONSOLIDATED INCOME STATEMENT BALANCE SHEETS AS AT AUGUST 31, 2004 FOR THE YEAR ENDED AUGUST 31, 2004

GROUP COMPANY GROUP Note 2004 2003 2004 2003 Note 2004 2003 S$’000 S$’000 S$’000 S$’000 S$’000 S$’000

CAPITAL EMPLOYED Operating revenue 21 Share capital 3 316,527 369,557 316,527 369,557 Newspaper and magazine 833,202 789,382 Share premium 62,319 27,301 62,319 27,301 Broadcasting and multimedia 54,301 55,734 Capital redemption reserve 4,509 4,509 4,509 4,509 Property 82,572 52,700 Capital reserve 4 2,005 2,005 – – 970,075 897,816 Retained profit 1,093,755 1,843,587 883,559 1,776,944 Other operating income 11,353 8,816 1,479,115 2,246,959 1,266,914 2,178,311 981,428 906,632 Exchange translation difference 4 777 – – Materials, consumables & broadcasting costs (202,596) (185,989) Shareholders’ interests 1,479,119 2,247,736 1,266,914 2,178,311 Staff costs 22 (262,369) (240,758) Minority interests 518 1,108 – – Depreciation 7 (51,685) (53,652) 1,479,637 2,248,844 1,266,914 2,178,311 Other operating expenses (126,829) (135,337) Non–current liabilities Profit from operations 23 337,949 290,896 Deferred taxation 5a 72,126 85,199 59,210 69,539 Finance costs 24 (24,203) (24,326) Borrowings 6 683,000 740,000 – – Net income from investments 25 258,017 39,584 2,234,763 3,074,043 1,326,124 2,247,850 Share of net (losses)/profits of associates (249) 10,990 Profit before exceptional items 571,514 317,144 EMPLOYMENT OF CAPITAL Exceptional items 26 28,677 121,760 Property, plant and equipment 7 565,531 633,856 342,668 365,671 Profit before taxation 600,191 438,904 Investment property 8 1,045,852 1,039,754 – – Taxation 5c (53,914) (59,769) Interests in subsidiaries 9 – – 1,009,749 1,827,554 Profit after taxation 546,277 379,135 Interests in associates 10 928 186 – – Minority interests 5 (399) Long–term investments 11 174,415 269,224 36,002 36,002 Profit attributable to shareholders 546,282 378,736 Other non–current assets 12 5,051 4,916 4,900 4,781 Earnings per S$0.20 share (S$) Current assets Before exceptional items – Basic 28 0.29 0.14 Stocks 13 32,278 54,763 23,208 37,268 – Diluted 0.29 0.14 Prepaid content rights 14 – 22,227 – – Trade debtors 15 86,435 85,352 76,634 76,930 After exceptional items – Basic 0.31 0.20 Other debtors and prepayments 16 15,130 14,181 5,904 4,546 – Diluted 0.31 0.20 Short–term investments 17 473,639 915,610 – – Cash on deposit 166,093 297,020 8,222 41,493 Cash and bank balances 26,528 31,156 19,699 20,595 800,103 1,420,309 133,667 180,832

Current liabilities Trade creditors 64,860 58,049 34,784 32,206 Other creditors and accrued liabilities 18 130,145 114,541 106,670 80,901 Borrowings 6 81,000 52,900 – – Current taxation 5b 81,112 68,712 59,408 53,883 357,117 294,202 200,862 166,990

Net current assets/ (liabilities) 442,986 1,126,107 (67,195) 13,842 96 2,234,763 3,074,043 1,326,124 2,247,850 97 The accompanying notes form part of these financial statements. The accompanying notes form part of these financial statements. SPH-Financial 3/11 11/9/04 2:03 PM Page 98

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED AUGUST 31, 2004 FOR THE YEAR ENDED AUGUST 31, 2004

GROUP GROUP Capital Exchange 2004 2003 Share Share Redemption Capital Retained Translation S$’000 S$’000 Capital Premium Reserve Reserve Profit Difference Total S$’000 S$’000 S$’000 S$’000 S$’000 S$’000 S$’000 CASH FLOWS FROM OPERATING ACTIVITIES

Balance as at Profit before taxation 600,191 438,904 September 1, 2003 369,557 27,301 4,509 2,005 1,843,587 777 2,247,736 Adjustments for: Exchange translation difference –––––(773) (773) Depreciation 51,685 53,652 Loss on disposal of property, plant and equipment 305 403 Gains not recognised in Finance costs 24,203 24,326 the income statement –––––(773) (773) Investment income (258,017) (39,584) Share of net losses/(profits) of associates 249 (10,990) Profit for the financial year ––––546,282 – 546,282 Exceptional items (28,677) (121,760) Issue of shares (Note 3) 2,810–––––2,810 Operating cash flow before working capital changes 389,939 344,951 Premium on issue of shares – 40,602––––40,602 Capital reduction (Note 3)# (55,840) (5,584) – – (1,005,122) – (1,066,546) Changes in working capital: Dividends (Note 27) ––––(290,992) – (290,992) Stocks 7,750 (7,718) Balance as at August 31, 2004 316,527 62,319 4,509 2,005 1,093,755 4 1,479,119 Prepaid content rights (2,927) (7,952) Debtors 1,258 7,098 Balance as at Creditors 22,307 (8,341) September 1, 2002 369,697 15,374 3,459 2,005 1,857,878 (6,875) 2,241,538 418,327 328,038 Income tax paid (54,587) (40,349) Exchange translation difference –––––7,652 7,652 Dividends paid (290,992) (375,058) Dividends paid (net) by a subsidiary to a minority shareholder (108) – Gains not recognised in 72,640 (87,369) the income statement –––––7,652 7,652 (Increase)/Decrease in non–current assets (135) 94 Net cash from/(used in) operating activities 72,505 (87,275) Profit for the financial year ––––378,736 – 378,736 Issue of shares (Note 3) 910–––––910 Premium on issue of shares – 11,927––––11,927 Share buy back (Note 3) (1,050) – 1,050 – (17,969) – (17,969) Dividends (Note 27) ––––(375,058) – (375,058) Balance as at August 31, 2003 369,557 27,301 4,509 2,005 1,843,587 777 2,247,736

# The Capital Reduction Exercise was completed on June 24, 2004 with 276.4 million ordinary shares of S$0.20 each and 2.8 million management shares of S$0.20 each cancelled. The shareholders received S$3.82 for every ordinary/management share of S$0.20 each cancelled. Arising from the Capital Reduction Exercise, a total of S$1,066.5 million was distributed to the shareholders of the Company. The Exercise resulted in the reduction of the share capital, share premium and retained profit of the Company by S$55.8 million, S$5.6 million and S$1,005.1 million respectively.

98 99 The accompanying notes form part of these financial statements. SPH-Financial 3/11 11/9/04 2:03 PM Page 100

CONSOLIDATED CASH FLOW STATEMENT (CONT’D) CONSOLIDATED CASH FLOW STATEMENT (CONT’D) FOR THE YEAR ENDED AUGUST 31, 2004 FOR THE YEAR ENDED AUGUST 31, 2004

GROUP GROUP 2004 2003 2004 2003 S$’000 S$’000 S$’000 S$’000

CASH FLOWS FROM INVESTING ACTIVITIES CASH FLOWS FROM FINANCING ACTIVITIES

Purchase of property, plant and equipment (33,109) (26,984) Capital reduction (1,066,546) – Proceeds on disposal of property, plant and equipment 118,705 184 Proceeds on issue of shares by Company 43,412 12,837 Additions to investment property (6,098) (30,216) Share buy back – (17,969) Acquisition of interests in associates and subsidiaries (4,794) (1,540) Repayment of bank loans (65,400) (6,500) Amounts owing to associates 19 9 Proceeds from bank loans 36,500 4,400 Loan to associate – (350) Finance costs (24,203) (24,326) Partial disposal of interests in an associate – 277,079 Net cash used in financing activities (1,076,237) (31,558) Proceeds on completion of liquidation of subsidiaries and an associate – 1,794 Net decrease in cash and cash equivalents (135,555) (59,352) Purchase of long–term investments (5,089) (1,908) Cash and cash equivalents at beginning of year 328,176 387,528 Proceeds on disposal/redemption of long–term investments 105,205 21,954 Cash and cash equivalents at end of year [Note (a)] 192,621 328,176 Purchase of short–term investments (532,310) (705,564) Proceeds on disposal of short–term investments 1,021,045 569,449 (a) Cash and Cash Equivalents at the end of the year comprised: Net increase in funds under management (32,806) (100,103) Investment income 258,017 49,534 Cash on deposit* 166,093 297,020 888,785 53,338 Cash and bank balances 26,528 31,156 Add/(Less): Items not involving movement of funds 192,621 328,176 Provision for diminution in value of internally–managed investments 4,090 18,552 Profit on sale of internally–managed investments (25,025) (13,625) Exchange translation gain (773) – * The fixed deposits with financial institutions mature on varying dates within 6 months (2003: 6 months) from the financial year end. The interest rates of these deposits as at August Accretion of discount on bonds (21) (57) 31, 2004 range between 0.57% to 1.63% (2003: 0.15% to 2.06%). Amortisation of premium on bonds 1,121 1,273 Net cash from investing activities 868,177 59,481

100 101 The accompanying notes form part of these financial statements. SPH-Financial 3/11 11/9/04 2:03 PM Page 102

NOTES TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS (CONT’D) AUGUST 31, 2004 AUGUST 31, 2004

These notes form an integral part of and should be read in conjunction with the financial statements. (d) Foreign currency translation (i) Measurement currency 1. General Items included in the financial statements of each entity in the Group are measured using the currency that best reflects the The Company is incorporated and domiciled in Singapore. economic substance of the underlying events and circumstances relevant to the entity (“the measurement currency”). The consolidated financial statements of the Group and balance sheet of the Company are presented in Singapore Dollars, which is the The principal activities of the Group consist of: measurement currency of the Company. (a) publishing, printing and distributing newspapers, (b) publishing and distributing magazines, (ii) Transactions and balances (c) providing broadcasting and multimedia services, Foreign currency transactions are translated into the measurement currency using the exchange rates prevailing at the date of (d) holding investments, and transactions. Any foreign exchange gains and losses resulting from the settlement of such transactions are recognised in the (e) holding and managing properties. income statement.

The principal activities of the Company consist of: Foreign currency monetary assets and liabilities are translated into Singapore dollars at the rates of exchange prevailing at the (a) publishing, printing and distributing newspapers, balance sheet date. Exchange differences arising are taken to the income statement. (b) distributing magazines, (c) providing multimedia content and services, (iii) Group companies (d) holding shares in subsidiaries, In respect of foreign entities whose operations are not an integral part of the Company’s operations, the balance sheets are (e) holding investments, and translated into Singapore dollars at the exchange rates prevailing at the balance sheet date, and the results are translated using (f) providing management services to subsidiaries. the average monthly exchange rates for the financial year. The exchange differences arising on translation are taken directly to the exchange translation difference account, which is reported as a separate component of shareholders’ interests. On disposal, accumulated translation differences are recognised in the consolidated income statement as part of the gain or loss on sale. 2. Significant Accounting Policies (a) Effect of changes in Singapore Companies Legislation In respect of foreign entities whose operations are integral to those of the Company, all monetary assets and liabilities are Pursuant to the Singapore Companies (Amendment) Act 2002, with effect from financial year commencing on or after January 1, 2003, translated into Singapore dollars at the exchange rates prevailing at the balance sheet date. All non-monetary assets and Singapore-incorporated companies are required to prepare and present their statutory accounts in accordance with the Singapore liabilities are recorded at the exchange rates when the relevant transactions occurred, and the results are translated using Financial Reporting Standards ("FRS"). Hence, these financial statements, including the comparative figures, have been prepared in the average monthly exchange rates for the financial year. The exchange differences arising are taken to the consolidated accordance with FRS. income statement.

Previously, the Company and the Group prepared their statutory accounts in accordance with Singapore Statements of Accounting Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as non-monetary foreign currency Standard. The adoption of FRS does not have material impact on the accounting policies and figures presented in the statutory assets and liabilities of the acquirer and recorded at the exchange rate at the date of the transaction. accounts for financial year ended August 31, 2003. (e) Goodwill on Consolidation (b) Basis of Preparation Goodwill on consolidation, representing the difference between the cost of acquisition of a subsidiary or an associate over the fair The financial statements are prepared in accordance with the historical cost convention. value of net identifiable assets acquired, is amortised on a straight-line basis in the consolidated income statement over its economic useful life up to a maximum of 20 financial years. Goodwill assessed as having no continuing economic value is written off to the (c) Basis of Consolidation consolidated income statement. The consolidated financial statements include the financial statements of the Company and its subsidiaries made up to the end of the financial year. The results of subsidiaries acquired or disposed of during the year are included in or excluded from the consolidated (f) Deferred Taxation income statement from the date of their acquisition or disposal. Inter-company balances and transactions are eliminated on consolidation Deferred tax liabilities are provided in full, using the liability method, on temporary differences arising between the tax bases of and the consolidated financial statements reflect external transactions only. assets and liabilities and their carrying amounts in the financial statements. Tax rates enacted or substantively enacted by the balance sheet date are used to determine deferred income tax.

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Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the adjusted for amortisation of premium and accretion of discount and diminution in value. Where cost of these investments exceeds temporary differences can be utilised. realisable value, provision is made for diminution in value which is other than temporary, determined on an individual basis.

(g) Property, Plant and Equipment and Depreciation Short-term investments are stated at the lower of cost and realisable value on an individual basis. (i) Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. Dividend income from investments other than subsidiaries is recognised on a cash basis and interest income on an accrual basis. (ii) Depreciation is calculated to write off the cost on a straight-line basis over the expected useful lives of the assets. The estimated useful lives for this purpose are: Dividend income from subsidiaries is recognised in the accounting period in which it is declared.

Freehold buildings 30 years Profit or loss on sale of investments is recognised on completion of sale. Leasehold land and buildings 30 years or life of lease if less than 30 years Plant and equipment 3 – 20 years (k) Investment Properties Furniture and fittings 5 – 10 years Investment properties are held for the primary purpose of producing rental income and are not held for resale in the ordinary course Motor vehicles 3 – 5 years of business.

(iii) No depreciation is charged on freehold land and land held on 999-year lease or in respect of major capital work-in-progress. Investment properties are stated at cost less impairment losses. Where an indication of impairment exists, the carrying amount of the investment property is assessed and written down to its recoverable amount if lower. The impairment loss is charged to the (iv) It is not the Group's policy to revalue property, plant and equipment at regular intervals. income statement.

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

(h) Subsidiaries (l) Stocks Interests in subsidiaries are included in the Company's balance sheet at cost less impairment losses. Where an indication of Stocks comprise raw materials and consumable stores, acquired content rights and production cost of programmes. impairment exists, the carrying amount of the investment is assessed and written down to its recoverable amount if lower. The impairment loss is charged to the income statement. (i) Raw materials and consumable stores These are stated at cost less provision for obsolete, slow moving and defective stocks.

(i) Associates Cost includes transport and handling costs, and any other directly attributable costs. Cost is determined on the weighted These are companies (not being subsidiaries) in which the Group has a substantial interest of not less than 20% of the equity and/or average or specific identification basis. in whose financial and operating policy decisions the Group exercises significant influence. (ii) Acquired content rights The Group’s share of the results of associates is included in its consolidated income statement. The Group’s share of the post- Prepaid content rights are reported as acquired content rights when the license period commences and materials have been acquisition retained profits and reserves or accumulated losses of associates is added to or deducted from the cost of these received. investments in the consolidated balance sheet. The cost of acquired content rights is the gross amount paid for such rights. In the Company’s balance sheet, investments in associates are stated at cost less impairment losses. (iii) Production cost of programmes Where an indication of impairment exists, the carrying amount of the investment is assessed and written down to its recoverable Production cost includes costs incurred on own production, commissioned works and co-produced programmes. amount if lower. The impairment loss is charged to the income statement. Cost of own production comprises direct labour, material cost and allocated overheads capitalised based on the normal level of (j) Investments activity during the term of production. Long-term investments in equity are stated at cost less diminution in value. Long-term investments in bonds are stated at cost, 104 Commissioned works are stated at cost. 105 SPH-Financial 3/11 11/9/04 2:03 PM Page 106

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Co-produced programmes are stated at cost less billings to co-producers. (r) Revenue Recognition Revenue from the sale of the Group’s products and services after accounting for trade discounts, returns and goods and services Acquired content rights and production cost of programmes are expensed to the income statement based on the estimated number tax is recognised on completion of delivery. of showings and the ratio that the current year's revenue bears to the anticipated total gross revenue from the exploitation of the films. Revenue from advertisements is recognised when the advertisement is published or broadcast. Acquired content rights and production cost of programmes are valued at the lower of unamortised cost and estimated net realisable value. The carrying amounts of each title in stock are reviewed at each balance sheet date. Provisions are made where Revenue from rental and rental-related services is recognised on an accrual basis. the unamortised cost of each title exceeds the estimated realisable value. Such provisions are charged to the income statement. The policies relating to the recognition of revenue from investments are set out in Note 2(j) above. (m) Prepaid Content Rights Advanced payments made for content rights for which the license period has not commenced or the materials have not been received, (s) Leases are classified as prepaid content rights. 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. Prepaid content rights are valued at the lower of cost and estimated net realisable value. The carrying amounts are reviewed at each Payments made under operating leases are taken to the income statement on a straight-line basis over the period of the lease. balance sheet date. Provisions are made where the carrying amount exceeds the estimated realisable value. Such provisions are charged to the income statement. When the Group is the lessor: Assets leased out under operating leases are included in investment properties and are stated at cost less impairment losses and not Provisions are also made where it is unlikely that content rights acquired under such payments would be used during its license period. depreciated. Rental income is recognised on a straight-line basis over the lease term. Such provisions are charged to the income statement. (t) Financial Risk Management (n) Debtors The Group's activities expose it to a variety of financial risks, particularly interest rate, currency, market, liquidity and credit risks. The Bad debts are written off and specific provision is made for those debts considered to be doubtful. In addition, a general provision is Group's risk management policies seek to, where appropriate, minimise potential adverse effects of these risks on the financial made on the balance of trade debtors to cover any unexpected losses which have not been specifically identified. performance of the Group. The policies for managing these risks are summarised below.

(o) Dividends (i) Interest rate risk Dividends on the Company's shares are recognised in equity in the period in which they are declared. 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 (p) Employee Benefits balances on varying maturities and interest rate terms. (i) Short-term employee benefits All short-term employee benefits, including accumulated compensated absences, are recognised in the income statement in the The Group’s debt consists of bank borrowings taken up by certain subsidiaries to finance their respective operations. Where period in which the employees render their services to the Group. appropriate, the Group seeks to minimise its interest rate risk exposure by entering into interest rate swaps over the duration of its borrowings. (ii) Equity compensation benefits The stock option programme allows selected employees of the Company and/or its subsidiaries including Executive Directors of (ii) Currency risk the Company, and other selected participants, to subscribe for ordinary shares in the Company. No compensation cost or The currency risk of the Group arises mainly from its operational purchases of raw materials and consumable stores, capital obligation is recognised. When the options are exercised, the proceeds received are credited to share capital (nominal value) expenditure and acquired content rights. The currency risk of the Group also arises from its foreign currency cash deposits,bonds and share premium. and equity investments, and from costs incurred by its overseas news bureaus. In addition, the Group also has investments in foreign subsidiaries and associated companies, whose net assets are exposed to currency risk. (q) Provisions Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable that Where appropriate, the Group hedges against its currency risk resulting from anticipated sale and purchase transactions in an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount can be made. foreign currencies, and foreign currency exposure of the net assets of its foreign subsidiaries and associated companies.

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(iii) Market risk 3. Share Capital The Group has investments in various financial instruments (including equities, fixed income and other derivative instruments) and 2004 2003 funds under management. The market values of these investments are affected by, amongst others, changes in market prices as Number Number a result of changes in global economic conditions, macro and micro economic factors affecting the country where the investments of Shares of Shares are quoted, and factors specific to the investee corporations. ‘000 S$’000 ‘000 S$’000

The fluctuations in market prices due to the above factors are unforeseen and the Group monitors these changes to respond to Authorised them as and when appropriate and necessary. Management shares of S$0.20 (2003: S$1) each 50,000 10,000 10,000 10,000 Ordinary shares of S$0.20 (2003: S$1) each 4,950,000 990,000 990,000 990,000 (iv) Liquidity risk 5,000,000 1,000,000 1,000,000 1,000,000 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. Issued and fully paid Management shares of S$0.20 (2003: S$1) each 16,018 3,204 3,740 3,740 (v) Credit risk Ordinary shares of S$0.20 (2003: S$1) each 1,566,617 313,323 365,817 365,817 The Group manages its credit risk through the application of credit approvals, credit limits and monitoring procedures. Where 1,582,635 316,527 369,557 369,557 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. Movements during the financial year were: Opening balance 369,557 369,557 369,697 369,697 As at the balance sheet date, the Group has no significant concentration of credit risks. Issue of ordinary shares of S$1 each fully paid under the Singapore Press Holdings Group Executives’ Share Option Scheme and Singapore Press Holdings Group (1999) Share Option Scheme 2,683 2,683 901 901 Issue of management shares of S$1 each fully paid in accordance with the Newspaper and Printing Presses Act 27 27 99 Cancellation of ordinary shares of S$1 each under the share buy back mandate approved by shareholders ––(1,050) (1,050) Balance before Share Split Exercise 372,267 372,267 369,557 369,557

Ordinary and management shares of S$0.20 each (2003: S$1) fully paid immediately after Share Split Exercise 1,861,335 372,267 369,557 369,557 Cancellation of ordinary shares of S$0.20 each under the Capital Reduction Exercise (276,376) (55,275) –– Cancellation of management shares of S$0.20 each under the Capital Reduction Exercise (2,826) (565) –– Issue of ordinary shares of S$0.20 each fully paid under the Singapore Press Holdings Group (1999) Share Option Scheme 497 99 –– Issue of management shares of S$0.20 each fully paid in accordance with the Newspaper and Printing Presses Act 51–– Closing balance 1,582,635 316,527 369,557 369,557

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NOTES TO THE FINANCIAL STATEMENTS (CONT’D) NOTES TO THE FINANCIAL STATEMENTS (CONT’D) AUGUST 31, 2004 AUGUST 31, 2004

3. Share Capital (cont'd) 4. Capital Reserve Details of the unissued shares of the Company under option at the end of the financial year are as follows: GROUP Singapore Press Holdings Group Executives’ Share Option Scheme (“1990 Scheme”) 2004 2003 S$'000 S$'000 Capital reserve is made up as follows: Date of Expiry Exercise Balance Options Options Balance Distributable 1,375 1,375 Grant Date Price(a) 1.9.03 Exercised Cancelled 31.8.04 Non-Distributable 630 630 Nov 17, 1998 Nov 17, 2003 S$14.51 655,179 (655,149) (30) – 2,005 2,005 655,179 (655,149) (30) – 5. Taxation (a) Deferred Taxation (a) Exercise price was adjusted as a result of bonus shares issued during the financial year 1998, and the capital reduction exercises The movements in the Group’s deferred tax assets and liabilities (prior to offsetting of balances within the same tax jurisdiction) during the financial years 1999 and 2002. during the year are as follows:

Singapore Press Holdings Group (1999) Share Option Scheme (“1999 Scheme”) 2004 GROUP Date of Expiry Exercise Balance Options Options Balance (i) Deferred Tax Liabilities Grant Date Price(a) 1.9.03(b) Exercised Cancelled 31.8.04 (c) Accelerated Oct 27, 1999 Oct 27, 2009 S$5.60 11,254,425 – (920,550) 10,333,875 Tax Oct 30, 2000 Oct 30, 2010 S$4.78 12,968,025 – (1,742,500) 11,225,525 Depreciation Others Total Nov 6, 2001 Nov 6, 2011 S$3.03 13,506,075 (9,112,050) (11,050) 4,382,975 S$’000 S$’000 S$’000 Oct 28, 2002 Oct 28, 2012 S$3.91 13,696,475 – (251,175) 13,445,300 Opening balance 92,368 2,876 95,244 Dec 16, 2003 Dec 16, 2013 S$3.69 15,028,000 – (168,725) 14,859,275 Credited to income statement (14,082) (207) (14,289) Feb 1, 2004 Feb 1, 2014 S$3.83 85,000 – – 85,000 Closing balance 78,286 2,669 80,955 66,538,000 (9,112,050) (3,094,000) 54,331,950

(a) Exercise prices were adjusted as a result of the Share Split and Capital Reduction Exercises during financial year 2004. For share (ii) Deferred Tax Assets options granted between 1999 to 2002, the exercise prices were also adjusted as a result of the Capital Reduction Exercise during Provisions the financial year 2002. S$’000 Opening balance (10,045) (b) Or later date of grant. Charged to income statement 1,216 Closing balance (8,829) (c) The balance of share options as at August 31, 2004 was adjusted for the effects of the Share Split and Capital Reduction Exercises during financial year 2004.

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NOTES TO THE FINANCIAL STATEMENTS (CONT’D) NOTES TO THE FINANCIAL STATEMENTS (CONT’D) AUGUST 31, 2004 AUGUST 31, 2004

5. Taxation (cont’d) 5. Taxation (cont'd) 2003 2003 COMPANY GROUP (i) Deferred Tax Liabilities (i) Deferred Tax Liabilities Accelerated Tax Accelerated Depreciation Tax S$’000 Depreciation Others Total Opening balance 80,713 S$’000 S$’000 S$’000 Credited to income statement (1,410) Closing balance 79,303 Opening balance 93,545 2,943 96,488 Credited to income statement (1,177) (67) (1,244) Closing balance 92,368 2,876 95,244 (ii) Deferred Tax Assets Provisions (ii) Deferred Tax Assets S$’000 Provisions Opening balance (13,138) S$'000 Charged to income statement 3,374 Opening balance (13,201) Closing balance (9,764) Charged to income statement 3,156 Closing balance (10,045)

2004 COMPANY (i) Deferred Tax Liabilities Accelerated Tax Depreciation S$’000

Opening balance 79,303 Credited to income statement (11,286) Closing balance 68,017

(ii) Deferred Tax Assets Provisions S$’000

Opening balance (9,764) Charged to income statement 957 Closing balance (8,807)

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NOTES TO THE FINANCIAL STATEMENTS (CONT’D) NOTES TO THE FINANCIAL STATEMENTS (CONT’D) AUGUST 31, 2004 AUGUST 31, 2004

5. Taxation (cont'd) 5. Taxation (cont'd)

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax (c) Tax Expense liabilities and when the deferred income taxes relate to the same fiscal authority. The following amounts, determined after appropriate GROUP offsetting, are shown in the balance sheets: 2004 2003 S$’000 S$'000 GROUP COMPANY 2004 2003 2004 2003 Tax expense attributable to profit is made up of: S$’000 S$’000 S$’000 S$’000 Current year Deferred tax liabilities 72,126 85,199 59,210 69,539 Current tax 69,655 56,538 Deferred tax (3,746) 2,617 65,909 59,155 As at August 31, 2004, certain subsidiary had unutilised tax losses of S$39.2 million (2003: S$48.3 million) available for offsetting against Prior years future taxable income subject to the relevant provisions of the Income Tax Act, Chapter 134 (”Income Tax Act”). Current tax (2,668) 1,319 Deferred tax (9,327)* (705) (b) Current Taxation 53,914 59,769 GROUP COMPANY 2004 2003 2004 2003 S$’000 S$’000 S$’000 S$’000 * Included an adjustment of S$7.7 million arising from the change in corporate taxation rate from 22% to 20%. Opening balance 68,712 51,204 53,883 42,201 Income tax paid (54,587) (40,349) (45,278) (36,605) The income tax expense on the results for the financial year varies from the amount of income tax determined by applying the Singapore Tax deducted at source on dividends received from subsidiaries – – – (3,000) standard rate of income tax to profit before taxation due to the following factors: Provision for the year 69,655 56,538 61,712 58,065 GROUP Group relief in accordance with Section 37C of the Income Tax Act – – (8,095) (6,778) 2004 2003 (Over)/Under provision in prior years (2,668) 1,319 (2,814) – S$’000 S$’000 Closing balance 81,112 68,712 59,408 53,883 Profit before taxation 600,191 438,904 Add/(Less): Share of net losses/(profits) of associate 249 (10,990) Adjusted profit before taxation 600,440 427,914

Tax calculated at corporate tax rate of 20% (2003: 22%) 120,088 94,141 Singapore statutory stepped income exemption (125) (134) Income taxed at concessionary rate (1,593) (1,963) Utilisation of deferred tax assets not previously recognised (4,010) (4,675) Income not subject to tax (66,025) (43,729) Expenses not deductible for tax purposes 16,180 17,584 Losses of subsidiaries not offset against taxable income of other entities – 777 Deferred tax benefit not recognised 1,823 1,711 Double tax relief for contributions made to Institutes of Public Character (456) (4,478) Effect of different tax rates in other countries 27 105 Others – (184) 65,909 59,155

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NOTES TO THE FINANCIAL STATEMENTS (CONT’D) NOTES TO THE FINANCIAL STATEMENTS (CONT’D) AUGUST 31, 2004 AUGUST 31, 2004

6. Borrowings 6. Borrowings (cont’d) GROUP 2004 2003 The Company has provided a guarantee and indemnity for the new loan facilities obtained by the subsidiary pertaining to its S$’000 S$'000 indebtedness under the loan refinancing arrangement, the maximum liability being limited to the principal sum outstanding, interests outstanding and legal costs incurred. Transferable term loans [Note a] 683,000 700,000 Revolving credit facility [Note a] – 4,400 The effective interest rate as at the balance sheet date on the term advances of S$40 million was 1.76% per annum (2003: S$70 million, Term advances - unsecured [Note b] 40,000 70,000 2.04% per annum). The term advances are planned for repayment by August 31, 2005. Revolving credit facilities - unsecured [Note b] 41,000 18,500 764,000 792,900 The effective interest rate as at the balance sheet date on the loans granted under the RCF was 1.3% (2003: 1.26%) per annum.

Borrowings are repayable: (c) In respect of bank borrowings, the Group’s policy is to, where appropriate, minimise its interest rate risk exposure by entering into Within 1 year 81,000 52,900 interest rate swaps over the duration of its borrowings. Accordingly, the subsidiaries entered into interest rate swap contracts as part Between 1 – 5 years 683,000 740,000 of their interest rate risk management. Under these interest rate swaps, the subsidiaries agree with other parties to exchange at specified 764,000 792,900 intervals, the difference between fixed rate and floating rate interest amounts calculated by reference to the agreed notional principal amounts. At August 31, 2004, the fixed interest rates vary from 2.55% to 3.44% (2003: 2.55% to 3.44%) per annum and floating rates are referenced to swap offer rate, where applicable. (a) A subsidiary has a bank loan facility in the form of a S$700 million (2003: S$700 million) transferable loan facility (“TLF”). During the year, the subsidiary has made partial repayment of S$17 million for the TLF loan on July 9, 2004. The notional principal amounts of the outstanding interest rate swap contract and its corresponding fair value as at August 31, are:

During the financial year, the subsidiary also had a S$14 million (2003: S$14 million) revolving credit facility (“RCF”) under which S$4.4 GROUP million was drawn. The RCF loan was subsequently repaid on January 9, 2004 and the RCF terminated on February 16, 2004. 2004 2003 S$'000 S$'000 The TLF facility is, and the RCF facility was secured by way of a legal mortgage on the Group's investment property [Note 8], an assignment of rental proceeds from the investment property and the insurances on the investment property, and an undertaking by Notional due: the Company to pay all interests payable in respect of the facilities if the subsidiary fails to pay the same. Within 1 year – 22,500 Between 1 - 5 years 645,000 645,000 After taking into account interest rate swap arrangements totalling S$645 million (2003: S$645 million) entered into by the subsidiary, the effective interest rate as at the balance sheet date on the outstanding TLF loan of S$683 million was 3.19% per annum (2003: Fair values * (17,611) (19,869) S$700 million, 3.18% per annum). The loans granted under the TLF are repayable no later than January 31, 2007. * 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 (b) During the financial year, another subsidiary obtained new loan facilities amounting to S$90 million, comprising S$40 million term date. The fair value is not recognised in the consolidated financial statements as at the balance sheet date. advances and S$50 million revolving credit facility (“RCF”) to refinance its existing bank loan facilities. (d) The fair values of the TLF, term advances and RCF as at the balance sheet date approximate their carrying values as these loans carry floating interest rates, which are repriced frequently.

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7. Property, Plant and Equipment (cont’d) 7. Property, Plant and Equipment (b) (a) GROUP COMPANY Plant Furniture Plant Furniture Land and Buildings and and Motor and and Motor Freehold Leasehold Equipment Fittings Vehicles Total Equipment Fittings Vehicles Total S$'000 S$'000 S$'000 S$'000 S$'000 S$'000 S$'000 S$'000 S$'000 S$'000 Cost Opening balance 46,694 233,113 616,743 18,273 2,423 917,246 Cost Reclassification – (22) (5) 27 – – Opening balance 499,008 12,885 2,250 514,143 Additions – – 3,244 346 53 3,643 Reclassification (5) 5 – – Adjustments* – (4,461) (1,423) (8) – (5,892) Additions 1,709 128 – 1,837 Transfer in from capital work–in–progress – – 180,831 – – 180,831 Transfer in from capital work–in–progress 180,773 – – 180,773 Disposals (17,852) – (10,957) (269) (113) (29,191) Transfer in 64 8 – 72 Closing balance 28,842 228,630 788,433 18,369 2,363 1,066,637 Transfer out (47) – – (47) Disposals (8,349) (81) (74) (8,504) Accumulated Depreciation and Impairment Losses Closing balance 673,153 12,945 2,176 688,274 Opening balance 17,450 73,412 346,569 7,432 1,598 446,461 Reclassification – (1) (5) 6 – – Accumulated Depreciation and Impairment Losses Charge for the year 212 7,614 44,266 1,597 260 53,949 Opening balance 305,570 4,425 1,523 311,518 Adjustments* – (1,408) (854) (2) – (2,264) Reclassification (5) 5 – – Impairment losses^ (Note 26) – 2,883 30,693 1,274 103 34,953 Charge for the year 34,339 1,105 227 35,671 Disposals (9,390) – (10,572) (227) (98) (20,287) Transfer in 55 1 – 56 Closing balance 8,272 82,500 410,097 10,080 1,863 512,812 Transfer out (45) – – (45) Impairment losses 18,298 – – 18,298 Net book value at August 31, 2004 20,570 146,130 378,336 8,289 500 553,825 Disposals (8,046) (66) (74) (8,186) Capital work–in–progress – – 11,706 – – 11,706 Closing balance 350,166 5,470 1,676 357,312 Closing balance 20,570 146,130 390,042 8,289 500 565,531 Net book value at August 31, 2004 322,987 7,475 500 330,962 Capital work–in–progress Capital work–in–progress 11,706 – – 11,706 Opening balance – – 163,071 – – 163,071 Closing balance 334,693 7,475 500 342,668 Additions – – 29,466 – – 29,466 Transfer out to fixed assets – – (180,831) – – (180,831) Capital work–in–progress Closing balance – – 11,706 – – 11,706 Opening balance 163,046 – – 163,046 Additions 29,433 – – 29,433 2003 Comparatives Transfer out to fixed assets (180,773) – – (180,773) Net book value at August 31, 2003 29,244 159,701 270,174 10,841 825 470,785 Closing balance 11,706 – – 11,706 Capital work–in–progress – – 163,071 – – 163,071 Closing balance 29,244 159,701 433,245 10,841 825 633,856 2003 Comparatives Net book value at August 31, 2003 193,438 8,460 727 202,625 Depreciation for 2003 212 8,373 43,325 1,488 254 53,652 Capital work–in–progress 163,046 – – 163,046 Closing balance 356,484 8,460 727 365,671 * During the year, the cost of leasehold land and building, and plant and equipment and furniture and fittings attached to the building previously capitalised were adjusted, as such capitalised amounts had been based on estimates made pending finalisation of billings by suppliers. Depreciation for 2003 32,960 1,014 216 34,190 ^ Impairment charges arose from the lower-than-expected financial performance of the Group's broadcasting segment (S$19.4 million), technological obsolescence for certain plant and equipment of the Group's newspaper and magazine segment (S$12.8 million) and decline in market value of a leasehold building of the Group's newspaper and magazine segment (S$2.8 million). The recoverable amounts of the broadcasting assets and the newspaper and magazine segment's plant and equipment (which have no 118 ready market) are their current market values which are expected to be minimal. The recoverable amount of the leasehold building is its market value determined by an 119 independent valuer. SPH-Financial 3/11 11/9/04 2:03 PM Page 120

NOTES TO THE FINANCIAL STATEMENTS (CONT’D) NOTES TO THE FINANCIAL STATEMENTS (CONT’D) AUGUST 31, 2004 AUGUST 31, 2004

8. Investment Property 9. Interests in Subsidiaries (cont’d) Details of the investment property are as follows: (b) Goodwill arising on acquisition of subsidiaries GROUP GROUP Freehold Land and Building 2004 2003 2004 2003 S$’000 S$’000 S$’000 S$’000 Opening balance – – Cost 923,827 923,827 Goodwill on acquisition during the year 18 1,240 Development expenditure at cost 173,624 167,526 Amounts written off during the year (18) (1,240) Loan interest capitalised 18,935 18,935 Closing balance – – 1,116,386 1,110,288 Impairment losses (70,534) (70,534) 1,045,852 1,039,754 (c) The amounts owing by/to subsidiaries are unsecured, interest free and have no fixed repayment terms. Repayments are not expected within the next twelve months. Accordingly, it is not practicable to determine the fair value of these balances. However, the Company Gross rental income 78,475 49,421 does not anticipate the carrying amounts at the balance sheet date to be significantly different from the values that would eventually Fair value 1,200,000 1,050,000 be settled.

10. Interests in Associates Fair value of the investment property, the amalgamated Paragon on Orchard Road was stated based on an independent professional (a) Unquoted equities valuation, determined on an open market value basis and carried out on June 24, 2004 (2003: February 28, 2003). The valuation carried GROUP COMPANY out in the previous financial year was done on the basis that the construction work for the amalgamated Paragon would be satisfactorily 2004 2003 2004 2003 completed and the Temporary Occupation Permit and Certificate of Statutory Completion would be obtained. The investment property S$’000 S$’000 S$’000 S$’000 is mortgaged to a bank as security for loan facilities granted to a subsidiary. Unquoted equities, at cost 12,513 44,837 2,980 2,980 9. Interests in Subsidiaries Amounts owing by associates (non–trade) [Note (b)] 4 4 – – (a) Unquoted equities Loan to an associate [Note (b)] 350 650 – – COMPANY 12,867 45,491 2,980 2,980 2004 2003 Amount owing to associates (non–trade) [Note (b)] (19) – – – S$’000 S$’000 Goodwill on consolidation written off (5,559) (23,357) – – Share of net losses (5,801) (14,509) – – Unquoted equities, at cost 476,812 476,083 Impairment losses (560) (7,439) (2,980) (2,980) Amounts owing by subsidiaries (non-trade) [Note (c)] 796,146 1,378,626 928 186 – – Loan to a subsidiary 88,500 40,000 1,361,458 1,894,709 During the year, an associate was disposed of and accordingly adjustments were made to balances relating to goodwill on Amounts owing to subsidiaries (non-trade) [Note (c)] (173,209) (67,155) consolidation written off, share of net losses and impairment losses. Details of associates are set out in Note 30. 1,188,249 1,827,554 Impairment losses (178,500) – (b) The amounts owing by/to associates, and loan to an associate are unsecured, interest free and have no fixed repayment terms. 1,009,749 1,827,554 Repayments are not expected within the next twelve months. Accordingly, it is not practicable to determine the fair value of these balances. However, the Group does not anticipate the carrying amounts at the balance sheet date to be significantly different from the Details of subsidiaries are set out in Note 29. values that would eventually be settled.

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11. Long–Term Investments 13. Stocks GROUP COMPANY GROUP COMPANY 2004 2003 2004 2003 2004 2003 2004 2003 S$’000 S$’000 S$’000 S$’000 S$’000 S$’000 S$’000 S$’000

Quoted, at cost Raw materials and consumable stores 24,489 38,895 23,908 38,278 Equities 79,610 92,855 – – Acquired content rights, at unamortised cost 20,502 16,519 – – Bonds 48,000 48,000 – – Production cost of programmes, at unamortised cost 11,299 7,925 – – Provision for stocks (24,012) (8,576) (700) (1,010) Unquoted, at cost 32,278 54,763 23,208 37,268 Equities 61,327 78,363 35,577 35,577 Other investments 425 60,318 425 425 Made up as follows: 189,362 279,536 36,002 36,002 At cost 5,643 20,636 5,419 7,670 At net realisable value 26,635 34,127 17,789 29,598 Provision for diminution in value of investments – Unquoted (14,947) (10,312) – – 32,278 54,763 23,208 37,268 174,415 269,224 36,002 36,002 Movements in provision Movements in provision Opening balance 8,576 3,437 1,010 1,010 Opening balance 10,312 15,075 – – Provision/(Write–back) for the year 17,514 5,139 (310) – Provision for the year – Unquoted 4,635 208 – – Stocks written off (2,078) – – – Utilisation of provision – (2,921) – – Closing balance 24,012 8,576 700 1,010 Transfer to short–term investments – (2,050) – – Closing balance 14,947 10,312 – – 14. Prepaid Content Rights GROUP Market value of quoted investments 2004 2003 Equities 288,648 268,930 – – S$’000 S$’000 Bonds 52,086 51,432 – – 340,734 320,362 – – Prepaid content rights – at cost 25,617 23,694 Provision for prepaid content rights (25,617) (1,467) – 22,227 12. Other Non-Current Assets Movements in provision GROUP COMPANY Opening balance 1,467 86 2004 2003 2004 2003 Provision for the year 26,091 1,381 S$’000 S$’000 S$’000 S$’000 Stocks written off (1,941) – Closing balance 25,617 1,467 Staff loans 5,051 4,916 4,900 4,781

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15. Trade Debtors 17. Short–Term Investments GROUP COMPANY (a) Internally managed 2004 2003 2004 2003 GROUP S$’000 S$’000 S$’000 S$’000 2004 2003 S$’000 S$’000 Amount owing 104,334 104,942 92,828 95,120 Provision for doubtful debts (17,899) (19,590) (16,194) (18,190) Quoted 86,435 85,352 76,634 76,930 Equities, at cost 53,421 102,198 Bonds, at cost 150,923 613,734 Movements in provision Accretion of discount on bonds 2,358 3,090 Opening balance 19,590 21,023 18,190 19,700 Amortisation of premium on bonds (109) (1,363) Provision for the year 1,644 2,118 640 1,531 Bad debts written off (3,335) (3,551) (2,636) (3,041) Unquoted Closing balance 17,899 19,590 16,194 18,190 Equities, at cost – 3,480 206,593 721,139 Provision for diminution in value of investments – Quoted (17,554) (57,323) 16. Other Debtors and Prepayments 189,039 663,816 GROUP COMPANY 2004 2003 2004 2003 Movements in provision S$’000 S$’000 S$’000 S$’000 Opening balance 57,323 42,424 (Write–back)/provision for the year (545) 18,344 Accrued interest 2,892 6,180 1 23 Utilisation of provision (39,224) (5,495) Sundry debtors 6,958 3,781 2,117 1,596 Transfer from long–term investments – 2,050 Prepayments 3,546 2,426 2,112 1,212 Closing balance 17,554 57,323 Staff loans 1,734 1,794 1,674 1,715 15,130 14,181 5,904 4,546 (b) Funds under management

Quoted investments, at cost Equities 95,877 85,580 Bonds 162,471 148,870 258,348 234,450

Provision for diminution in value of quoted investments (2,644) (1,746) 255,704 232,704 Bank balances 31,915 18,520 Accrued income 2,864 970 Due to brokers (5,883) (400) 284,600 251,794

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17. Short–Term Investments (cont’d) GROUP 19. Capital and Other Commitments 2004 2003 GROUP COMPANY S$’000 S$’000 2004 2003 2004 2003 S$’000 S$’000 S$’000 S$’000 Movements in provision Opening balance 1,746 1,723 Commitments for: Provision for the year 4,258 1,823 Utilisation of provision (3,360) (1,800) (a) Capital expenditure: Closing balance 2,644 1,746 Authorised and contracted for 6,906 29,271 5,801 22,212 Authorised but not contracted for 32,509 26,206 20,459 26,152 Total Short–Term Investments 473,639 915,610 (b) Equity investments 53,666 14,101 – –

(c) Total market/fair value of investments (c) Non–cancellable operating leases payable: Within 1 year 4,112 3,067 165 – Quoted – Equities 200,257 194,894 Between 1 – 5 years 19,899 5,864 7 – Bonds 306,710 737,510 After 5 years 200,463 44,559 – – 506,967 932,404 (d) Non–cancellable operating leases receivable: Unquoted – Equities – 3,564 Within 1 year 80,177 73,995 – – Between 1 – 5 years 119,299 95,409 – – 18. Other Creditors and Accrued Liabilities After 5 years – 978 – – GROUP COMPANY 2004 2003 2004 2003 (e) Foreign currency forward contracts S$’000 S$’000 S$’000 S$’000 Notional due: Within 1 year 112,651 18,560 1,551 4,577 Accrued operating expenses 109,058 91,213 92,981 69,160 Positive fair value 507 68 11 40 Sundry creditors 16,855 18,355 9,642 7,844 Negative fair value 430 – – – Customers' deposits and credits 4,232 4,024 4,047 3,897 Amounts due to brokers – 949 – – (f) Cross currency swap contracts 130,145 114,541 106,670 80,901 Notional due: After 5 years 14,104 18,400 – – Positive/(negative) fair value 793 (157) – –

The fair values of foreign currency forward and cross currency swap contracts have been calculated (using rates quoted by the Group's bankers) assuming these contracts are terminated at the balance sheet date.

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20. Contingent Liability (Unsecured) 22. Staff Costs GROUP As at August 31, 2004, the Company provided an indemnity to a financial institution for performance guarantees issued on behalf of a 2004 2003 subsidiary to enable the subsidiary to meet its obligations in the ordinary course of business. The performance guarantees comprised S$’000 S$’000 US$4 million (S$6.8 million) maturing on March 31, 2005 (2003: US$4 million), US$4 million (S$6.8 million) for period commencing April 1, 2005 to March 31, 2006 (2003: US$4 million) and US$4 million (S$6.8 million) for period commencing April 1, 2006 to March 31, 2007 (a)Staff costs (including Executive Director): (2003: US$4 million). Salaries, bonuses and other costs 237,091 214,517 Employers' contribution to defined contribution plans 25,278 26,241 21. Operating Revenue 262,369 240,758 GROUP 2004 2003 S$’000 S$’000 (b)Average number of employees 3,564 3,715

Newspaper and Magazine 23. Profit from Operations Advertisements 624,448 595,370 GROUP Circulation 192,033 180,336 2004 2003 Others 16,721 13,676 S$’000 S$’000 833,202 789,382 Profit from operations is arrived at:

After charging Broadcasting and Multimedia Audit fees: Advertisements 40,030 43,131 Company's auditors: Broadcasting and multimedia services 14,271 12,603 Current year 299 299 54,301 55,734 Other auditors: Current year 24 23 Prior year – (1) Property Rental and rental-related services 82,572 52,700 Non-audit fees#: 970,075 897,816 Company's auditors Current year 101 36 Prior year 1 (22) Less: Amount capitalised as capital work-in-progress (26) – 76 14 Directors' remuneration: Company's Directors 1,660 2,216 Directors of subsidiaries 148 1,590 Provision for stocks 3,089 5,139 Rental expense – Operating lease 2,260 2,657

and after crediting Write-back of provision for stocks (Note 13) 310 – Net exchange gain 602 639

# Non-audit fees are mainly for services of an audit and/or review nature relating to non-statutory audit assignments. 128 129 SPH-Financial 3/11 11/9/04 2:03 PM Page 130

NOTES TO THE FINANCIAL STATEMENTS (CONT’D) NOTES TO THE FINANCIAL STATEMENTS (CONT’D) AUGUST 31, 2004 AUGUST 31, 2004

24. Finance Costs 25. Net Income from Investments (cont’d) (a) Income from funds under management GROUP GROUP 2004 2003 2004 2003 S$’000 S$’000 S$’000 S$’000

Interest on bank loans 24,203 24,326 Interest on deposits and bonds 6,418 5,882 Profit on sale of investments 10,058 4,529 Dividend from quoted equities 2,131 879 25. Net Income from Investments Foreign exchange loss (3,019) (414) GROUP Expenses and fees (1,893) (764) 2004 2003 13,695 10,112 S$’000 S$’000 Provision for diminution in value of quoted investments (4,258) (1,823) 9,437 8,289 Deposits interest 3,403 3,636 Interest from bonds 23,084 22,809 Dividend from equities* 190,624 10,126 26. Exceptional Items Foreign exchange gain/(loss) 10,629 (776) GROUP Profit on sale of investments: 2004 2003 Short–term investments 15,083 13,493 S$’000 S$’000 Long–term investments 9,942 132 Other investment income 1,005 1,643 Gain on sale of property 110,106 – 253,770 51,063 Write–down of current assets and provision for obligations Accretion of discount on bonds 21 57 arising from a review of broadcasting assets (45,889) – Amortisation of premium on bonds (1,121) (1,273) Impairment loss on property, plant and equipment (Note 7) (34,953) (8,006) Write-back/(Provision) for diminution in value of investments: Surplus on partial disposal of interests in an associate – 187,720 Quoted 545 (18,344) Surplus on completion of liquidation of: Unquoted (4,635) (208) – Subsidiaries – 1,748 248,580 31,295 – An associate – 46 Income from funds under management [Note 25(a)] 9,437 8,289 Impairment loss on investment property – (50,000) 258,017 39,584 Impairment loss on associates – (7,439) Capital work–in–progress written off – (1,069) * Dividend from equities received during the year included S$168.1 million from the divestment of the Group's indirect stake in Belgacom. Others (587) (1,240) 28,677 121,760

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27. Dividends 28. Earnings per Share GROUP AND COMPANY GROUP 2004 2003 2004 2003 S$’000 S$’000 S$’000 S$’000 Basic Diluted Basic Diluted Dividends paid: – Final dividend of 50 cents per S$1 share less tax Profit attributable to shareholders 546,282 546,282 378,736 378,736 at 22% in respect of previous financial year (2003: 50 cents per S$1 share less tax at 22%) 144,691 144,327 – Special dividend of 30 cents per S$1 share less tax at 22% in respect of previous financial year Number of Shares Number of Shares* (2003: 30 cents per S$1 share less tax at 22%) 86,814 86,596 ‘000 ‘000 – Interim dividend of 20 cents per S$1 share less tax at 20% (2003: 20 cents per S$1 share less tax at 22%) 59,487 57,654 Weighted average number of shares 1,786,830 1,786,830 1,848,570 1,848,570 – Special interim dividend of nil cents per S$1 share less tax Adjustment for assumed conversion of share options – 1,987 – 3,170 at 20% (2003: 30 cents per S$1 share less tax at 22%) – 86,481 Weighted average number of shares used to compute earnings per share 1,786,830 1,788,817 1,848,570 1,851,740 290,992 375,058

(a) The Directors have proposed a final dividend for 2004 of 10 cents per S$0.20 share, less tax at 20%, amounting to a total of S$126,611,000 (2003: 50 cents per S$1 share, less tax at 22%, amounting to S$144,691,000). Earnings per S$0.20 share (S$) – before exceptional items 0.29 0.29 0.14 0.14 (b) In addition, the Directors have proposed a special final dividend of 11.25 cents per S$0.20 share, less tax at 20%, amounting to a – after exceptional items 0.31 0.31 0.20 0.20 total of S$142,437,000 (2003: 30 cents per S$1 share, less tax at 22%, amounting to S$86,814,000). * Adjusted for effect of Share Split Exercise completed in financial year 2004. (c) 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, 2005 (2003: August 31, 2004) when they are approved at the next annual general meeting.

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29. Subsidiaries 29. Subsidiaries (cont’d) Effective Effective Principal Country of Class of % of Equity held Principal Country of Class of % of Equity held Name of Subsidiary Activities Incorporation Shares Cost of Investment by the Group Name of Subsidiary Activities Incorporation Shares Cost of Investment by the Group 2004 2003 2004 2003 2004 2003 2004 2003 S$’000 S$’000 % % S$’000 S$’000 % %

Hipro Printing Pte Ltd Publishing newspapers Singapore Ord 855 360 100.00 80.00 Balance b/f 218,661 218,166

The Straits Times Holding investments Singapore Mgt 334 334 100.00 100.00 SPH MultiMedia Holding investments Singapore Ord 8,500 8,500 100.00 100.00 Press (1975) Limited Ord 33,072 33,072 100.00 100.00 Private Limited

Focus Publishing Ltd Publishing magazines Singapore Mgt * * 99.96 99.96 Lianhe Investments Holding investments Singapore Ord 6,335 6,335 100.00 100.00 Ord * * 100.00 100.00 Pte. Ltd. for dealing purposes

Singapore Press Provision of news Singapore Mgt * * 99.98 99.98 Singapore Newspaper Holding investments Singapore Ord 50,000 50,000 100.00 100.00 Holdings (Overseas) reporting & marketing Ord * * 100.00 100.00 Services Private Limited and properties Limited services and holding investments Vinora Holdings Holding investments British Virgin Ord * * 100.00 100.00 Limited Islands SPH (Americas) Pte Provision of news Singapore Ord * * 100.00 100.00 Ltd reporting services Futura Management Holding investments Cook Islands Ord * * 100.00 100.00 Limited SPH Magazines Pte Ltd Publishing magazines Singapore Ord * * 100.00 100.00 Crestville Investments Holding investments British Virgin Ord * * 100.00 100.00 TP Ventures Pte Ltd Holding investments Singapore Ord * * 100.00 100.00 Limited Islands

Lianhe Publishing Publishing magazines Singapore Ord * * 51.00 51.00 Singapore News and Holding investments Singapore Mgt 1,153 1,153 100.00 100.00 Pte Ltd Publications Limited and properties Ord 114,102 114,102 100.00 100.00

SPH Data Services Licensing of copyrights Singapore Ord * * 100.00 100.00 Sin Chew Jit Poh Holding investments Singapore Mgt * * 100.00 100.00 Pte Ltd & trademarks (Singapore) Limited and properties Ord * * 100.00 100.00

@ SPH AsiaOne Ltd Provision of Internet – Singapore Ord 94,400 94,400 100.00 100.00 Times Properties Letting properties and Singapore Ord 77,827 77,827 100.00 100.00 related services and Private Limited provision of property holding investments management services

@ Zaobao.com Ltd Provision of Internet – Singapore Ord * * 100.00 100.00 Orchard 290 Ltd Holding investments and Singapore Ord * * 100.00 100.00 related services managing of shopping centres & other @ Evol Media Pte Ltd Provision of Internet – Singapore Ord * * 100.00 100.00 commercial properties related services Balance c/f 476,578 476,083

SPH MediaWorks Ltd Provision of broadcasting Singapore Ord 90,000 90,000 100.00 100.00 and broadband services Balance c/f 218,661 218,166 134 135 SPH-Financial 3/11 11/9/04 2:03 PM Page 136

NOTES TO THE FINANCIAL STATEMENTS (CONT’D) NOTES TO THE FINANCIAL STATEMENTS (CONT’D) AUGUST 31, 2004 AUGUST 31, 2004

30. Associates Effective Principal Country of Class of % of Equity held 29. Subsidiaries (cont’d) Name of Associate Activities Incorporation Shares Cost of Investment by the Group Effective 2004 2003 2004 2003 Principal Country of Class of % of Equity held S$’000 S$’000 % % Name of Subsidiary Activities Incorporation Shares Cost of Investment by the Group 2004 2003 2004 2003 Held by the Company S$’000 S$’000 % % Business Day Publishing Thailand Ord 2,980 2,980 24.97 24.97 Balance b/f 476,578 476,083 Company Limited newspapers

New Beginnings Business management The People's Ord 234 – 100.00 – Held by Subsidiaries Management and consultancy Republic of Consulting services China American Bourses Development & Singapore Ord 6,375 6,375 20.00 20.00 (Shanghai) Company Corporation Pte Ltd maintenance of Limited software and multimedia works; SPH Stop Press Pte Ltd Dormant Singapore Ord * * 100.00 100.00 Business management and Morningvista Dormant British Virgin Ord * * 100.00 100.00 consultancy Investments Limited Islands services

Asia Century Dormant Singapore Ord * * 51.00 51.00 Citta Bella Sdn Bhd Publishing and Malaysia Ord 248 248 24.99 24.99 Publishing Pte Ltd distributing magazines The Straits Times Dormant United Kingdom Ord * * 100.00 100.00 Press (London) Limited GMM Times Co Ltd Publishing and Thailand Ord 395 – 30.00 – 476,812 476,083 distributing magazines

Notes: Magazine World Sdn Bhd Publishing and Malaysia Ord 42 – 30.00 – 1. @ Companies audited by Ernst & Young, Singapore. distributing 2. * The shareholdings of these companies are held by subsidiaries of the Company. magazines

Shanghai YouHer Consultancy The People's Ord 573 – 50.00 – Consultancy Limited services Republic of China

UnionWorks Pte Ltd Radio Singapore Ord 1,900 1,600 50.00 50.00 broadcaster

StarEastWorks Limited Content Hongkong Ord – 33,634 – 50.00 production 12,513 44,837

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31. Segmental Information 31. Segmental Information (cont’d) 2004 2003

Newspaper Treasury Newspaper Broadcasting, Treasury and Broadcasting and and Multimedia and and Magazine and Multimedia Investment Property Eliminations Consolidated Magazine Telecommunications Investment Property Eliminations Consolidated S$'000 S$'000 S$'000 S$'000 S$'000 S$'000 S$'000 S$'000 S$'000 S$'000 S$'000 S$'000

Operating revenue Operating revenue External sales 833,202 54,301 – 82,572 – 970,075 External sales 789,382 55,734 – 52,700 – 897,816 Inter–segmental sales 2,352 72 – 2,377 (4,801) – Inter–segmental sales 2,914 21 – 2,544 (5,479) – Total operating revenue 835,554 54,373 – 84,949 (4,801) 970,075 Total operating revenue 792,296 55,755 – 55,244 (5,479) 897,816

Result Result Segment result 337,774 (55,955) 252,716 61,169 – 595,704 Segment result 305,065 (53,057) 39,028 39,203 – 330,239 Finance costs (15) (1,847) – (22,341) – (24,203) Finance costs – (1,916) – (22,410) – (24,326) Finance income 131 15 – 116 – 262 Finance income 102 39 – 100 – 241 Share of net losses Share of profits less losses of associates (249) – – – – (249) of associates 86 10,904 – – – 10,990 Exceptional items (16,129) (65,300) – 110,106 – 28,677 Exceptional items (7,000) 180,821 14 (52,075) – 121,760 Profit/(loss) before taxation 321,512 (123,087) 252,716 149,050 – 600,191 Profit/(loss) before taxation 298,253 136,791 39,042 (35,182) – 438,904 Taxation (53,914) Taxation (59,769) Profit after taxation 546,277 Profit after taxation 379,135 Minority interests 5 Minority interests (399) Profit attributable to Profit attributable to shareholders 546,282 shareholders 378,736

Other Information Other Information Segment assets 696,695 22,130 780,291 1,091,836 – 2,590,952 Segment assets 737,067 86,974 1,462,487 1,081,531 – 3,368,059 Interests in associates 928 – – – – 928 Interests in associates 186 – – – – 186 Consolidated total assets 2,591,880 Consolidated total assets 3,368,245

Segment liabilities 148,076 100,906 36 709,987 – 959,005 Segment liabilities 126,740 108,191 986 729,573 – 965,490 Current taxation 81,112 Current taxation 68,712 Deferred taxation 72,126 Deferred taxation 85,199 Minority interests 518 Minority interests 1,108 Consolidated total liabilities 1,112,761 Consolidated total liabilities 1,120,509

Capital expenditure 31,628 1,183 – 6,396 – 39,207 Capital expenditure 26,367 437 – 30,396 – 57,200 Depreciation 45,360 5,798 – 527 – 51,685 Depreciation 44,841 8,158 – 653 – 53,652

138 139 SPH-Financial 3/11 11/9/04 2:03 PM Page 140

NOTES TO THE FINANCIAL STATEMENTS (CONT’D) NOTES TO THE FINANCIAL STATEMENTS (CONT’D) AUGUST 31, 2004 AUGUST 31, 2004

31. Segmental Information (cont’d) 32. Fair Value of Financial Instruments Notes: The financial assets and financial liabilities of the Group and the Company for which fair values are required to be disclosed in accordance (a) Business segments: with Singapore Financial Reporting Standard comprise the following: The Group is organised into four major operating segments, namely Newspaper and Magazine, Broadcasting and Multimedia, Treasury and Investment, and Property, and reports its primary segment information through direct identification. The Newspaper and Magazine (a) long-term investments in investees other than subsidiaries and associates, segment is involved in the publishing, printing and distributing of newspapers and magazines. The Broadcasting and Multimedia (b) non-current loans payable, segment provides services which include provision of broadcasting, portal sites and other related services. The Treasury and (c) non-current receivables from and payables to subsidiaries and associates, Investment segment manages the investment activities of the Group. The Property segment holds and manages properties owned by (d) other non-current receivables, the Group. (e) current assets other than stocks, prepaid content rights and prepayments, (f) current liabilities other than provision for taxation. Telecommunication business ceases to be part of the Broadcasting and Multimedia operating segment from financial year 2004, following the partial disposal of interests in an associate in December 2002. The fair values of these financial assets and financial liabilities as at the balance sheet date approximate their carrying values as shown in the balance sheets, with the exception of long-term and short-term investments, and non-current receivables from and payables to (b) Geographical segments: subsidiaries and associates. The principal geographical area in which the Group operates is Singapore. The Group's overseas operations comprise mainly holding overseas investments and the provision of marketing, editorial, art and graphical services overseas. The fair values of quoted long-term investments and quoted and unquoted short-term investments as at the balance sheet date are as detailed in the respective notes to the financial statements. For unquoted long-term investments, it is not practicable to determine the Capital fair value because the assumptions used in the valuation models to value these investments cannot be reasonably determined. The Operating Revenue Segment Assets Expenditure unquoted long-term investments comprised investments in venture capital companies and companies whose principal activities include 2004 2003 2004 2003 2004 2003 the provision of telecommunication-related services. Information on the fair values of non-current receivables from and payables to S$’000 S$’000 S$’000 S$’000 S$’000 S$’000 subsidiaries and associates are set out in the respective notes to the financial statements.

Singapore 970,075 897,816 2,583,798 3,234,167 39,145 57,181 33. Subsequent events Other Countries – – 8,082 134,078 62 19 (a) Acquisition of Vantage Corporation Limited's media assets 970,075 897,816 2,591,880 3,368,245 39,207 57,200 On September 1, 2004, a wholly-owned subsidiary, SPH Magazines Pte Ltd acquired from Vantage Corporation Limited (formerly (c) Under equity accounting, the Group's operating revenue does not include its share of associates' operating revenue. known as “Blu Inc Group Limited”) (“VCL”) the following for a cash consideration of S$32.9 million: (i) All magazine titles, trade names and marks owned by VCL; (ii) 100% interest in the following companies: a) Blu Inc Holdings (S) Pte Ltd; b) Blu Inc Media Pte Ltd; c) Blu Inc Publishing (S) Pte Ltd; d) Blu Inc Ventures Pte Ltd; and e) Magazines Incorporated Pte Ltd.

These companies are incorporated in Singapore and are mainly engaged in the publishing and distribution of magazines.

140 141 SPH-Financial 3/11 11/9/04 2:03 PM Page 142

NOTES TO THE FINANCIAL STATEMENTS (CONT’D) NOTES TO THE FINANCIAL STATEMENTS (CONT’D) AUGUST 31, 2004 AUGUST 31, 2004

33. Subsequent events (cont’d) 33. Subsequent events (cont’d) Blu Inc Holdings (S) Pte Ltd, Blu Inc Ventures Pte Ltd and Magazines Incorporated Pte Ltd have subsidiaries and associates that are (c) Initial Public Offer (“IPO”) of StarHub Pte Ltd (“StarHub”) incorporated in Singapore, Malaysia, Indonesia, Hongkong and The People's Republic of China. These companies are mainly engaged in the publishing and distribution of magazines. On September 17, 2004, StarHub officially launched its IPO involving the sale of up to 553.9 million vendor shares. On October 6, 2004, StarHub announced that the IPO will be priced at S$0.95 per share. The fair value of the net identifiable assets at the date of acquisition was estimated at S$10.4 million. Goodwill arising on this acquisition of about S$22.5 million will be recorded in the balance sheet and tested for impairment in accordance with FRS 103 - Business The Company holds a pre-IPO shareholding of 8.95% in StarHub which is accounted for as a long-term investment at a cost of combinations which is applicable for the Group in financial year 2005. S$35.6 million. Based on the IPO price of S$0.95 per share, the Company is expected to receive gross proceeds of between S$161.9 million and S$180.0 million, depending on the extent whereby the over-allotment option associated to the IPO is exercised.

(b) Rationalisation of free-to-air television broadcasting and free newspaper business Upon completion of this transaction, an investment income, before deducting the Company's share of IPO expenses, ranging between S$126.3 million and S$144.4 million will be reported in the first quarter of the Company's financial year, depending on the extent On September 17, 2004, the Group entered into agreements with MediaCorp Pte Ltd and certain of its subsidiaries with the whereby the over-allotment option is exercised. Accordingly, the Company's shareholding in StarHub may be reduced to between objective of rationalising the Group’s free-to-air television broadcasting and free newspaper businesses. 0% and 0.9% depending on the extent whereby the over-allotment option is exercised.

The proposed transactions comprise: (i) The subscription by the Company of 20% of the issued share capital in a new company, MediaCorp TV Holdings Pte Ltd (“MCTV 34. Re-classification Holdings") for a sum of S$10 million in cash; and Where necessary, comparative figures have been adjusted to conform with the current presentation where there are changes in presentation in these financial statements. (ii) The acquisition by the Company of 40% of the issued share capital of MediaCorp Press Ltd ("MPR") for a sum of S$19.16 million in cash. 35. Authorisation of Financial Statements These companies are incorporated in Singapore. MCTV Holdings is engaged in the business of free-to-air television broadcasting and On October 11, 2004, the Board of Directors of Singapore Press Holdings Limited authorised these financial statements for issue. content production for television broadcasting. MPR is engaged in the publishing and distribution of free newspaper.

Upon completion of the proposed transactions (expected by December 31, 2004), the Group's free-to-air television broadcasting business will be operated together with those currently operated by MediaCorp TV Pte Ltd by MCTV, and the Company’s free newspaper business will be merged with that of MPR.

Upon completion of the proposed transactions, the Company's interests in MCTV Holdings and MPR will be equity accounted for, in accordance with FRS 28 - Accounting for Investments in Associates. The Company also plans to repay the bank loan facilities of S$81 million, undertaken by a subsidiary, pertaining to the Group's television broadcasting business by August 31, 2005.

The proposed transactions are not expected to have any material impact on the net tangible assets per share and earnings per share of the Group for the financial year ending August 31, 2005.

142 143 SPH-Financial 3/11 11/9/04 2:03 PM Page 144

SHAREHOLDING STATISTICS SHAREHOLDERS BY SIZE OF SHAREHOLDINGS SHARE PRICE MOVEMENTS FOR THE YEAR ENDED AUGUST 31, 2004 AS AT OCTOBER 22, 2004

Highest closing price Lowest closing price 0.36% S$ S$ 8.81% 8 6

5.5 7 5 19.64% 5.0

4.5

6 4 4.0 71.19% 3.5

5 3 3.0

2.5

4 2

0 0 2000 2001 2002 2003 2004 2000 2001 2002 2003 2004 1 – 999 1,000 – 10,000 10,001 – 1,000,000 1,000,001 and above Year Year

2004 2003 2002 2001 2000 S$ S$ S$ S$ S$ Size of Shareholdings No. of Shareholders % Total Holdings % Highest Closing Price* 4.54 4.12 5.01 5.90 7.55 1 – 999 1,948 8.81 975,543 0.06 Lowest Closing Price* 3.59 3.25 3.12 3.79 5.13 1,000 – 10,000 15,749 71.19 57,967,852 3.70 August 31 Closing Price* 4.32 3.79 3.98 4.02 5.62 10,001 – 1,000,000 4,344 19.64 255,099,752 16.28 Price / Earnings Ratio based on August 31 Closing Price 14.12 18.58 23.98 21.85 24.87 1,000,001 and above 80 0.36 1,253,082,424 79.96

Grand Total 22,121 100.00 1,567,125,571 100.00 All prices have been adjusted for the effects of the Share Split and Capital Reduction Exercises which took place during the financial year 2004. * Source: Bloomberg

144 145 SPH-Financial 3/11 11/9/04 2:03 PM Page 146

HOLDERS OF MANAGEMENT SHARES TWENTY LARGEST ORDINARY SHAREHOLDERS AS AT OCTOBER 22, 2004 AS AT OCTOBER 22, 2004

Name of Shareholder Total Holdings % Name of Shareholder Total Holdings %

1. THE GREAT EASTERN LIFE ASSURANCE COMPANY LIMITED 3,621,757 22.60 1. DBS NOMINEES (PRIVATE) LIMITED 357,311,491 22.80

2. OVERSEA-CHINESE BANKING CORPORATION LTD 2,691,938 16.80 2. RAFFLES NOMINEES PTE LTD 227,066,792 14.49

3. NTUC INCOME INSURANCE COOPERATIVE LIMITED 2,618,873 16.34 3. CITIBANK NOMINEES SINGAPORE PTE LTD 135,079,296 8.62

4. SINGAPORE TELECOMMUNICATIONS LIMITED 2,131,082 13.30 4. HSBC (SINGAPORE) NOMINEES PTE LTD 131,170,158 8.37

5. THE DEVELOPMENT BANK OF SINGAPORE LTD 1,522,198 9.50 5. UNITED OVERSEAS BANK NOMINEES (PRIVATE) LIMITED 63,861,385 4.08

6. UNITED OVERSEAS BANK LIMITED 1,289,328 8.05 6. DB NOMINEES (S) PTE LTD 25,584,694 1.63

7. NATIONAL UNIVERSITY OF SINGAPORE 858,649 5.36 7. TEMASEK HOLDINGS (PTE) LTD 21,973,248 1.40

8. FRASER & NEAVE, LIMITED 644,640 4.02 8. THE ASIA LIFE ASSURANCE SOCIETY LTD-PAR FUND 15,590,412 1.00

9. FULLERTON (PRIVATE) LIMITED 644,640 4.02 9. UNIVERSITY OF MALAYA 15,477,556 1.00

10. CHIEF EXECUTIVE OFFICER 4 0.00 10. LEE FOUNDATION STATES OF MALAYA 15,215,522 0.97

11. DIRECTORS (FOUR EACH) 44 0.00 11. KO TECK SIANG 13,260,000 0.85

12. TAN ENG SIAN 12,750,000 0.81 TOTAL 16,023,153 100.00 13. OVERSEA CHINESE BANK NOMINEES (PRIVATE) LIMITED 12,395,039 0.79

14. MERRILL LYNCH (S'PORE) PTE LTD 12,117,938 0.77 SUBSTANTIAL SHAREHOLDER AS AT OCTOBER 22, 2004 15. YONG SIEW YOON 10,000,000 0.64

16. OVERSEAS UNION BANK NOMINEES (PRIVATE) LIMITED 9,946,023 0.63 Direct Interest Deemed Interest No. of No. of 17 OVERSEAS UNION ENTERPRISE LIMITED 9,133,845 0.58 Ordinary Shares % Ordinary Shares % 18 MORGAN STANLEY ASIA (SINGAPORE) SECURITIES PTE LTD 8,375,917 0.53 SILCHESTER INTERNATIONAL INVESTORS LIMITED 74,443,000 4.703 4,783,812* 0.302 19 LEE FOUNDATION 8,210,940 0.52 * Silchester International Investors Limited is deemed to have an interest by virtue of its 49.9% ownership in Sanderson Asset Management Limited. 20 UOB KAY HIAN PTE LTD 6,595,773 0.42

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. TOTAL 1,111,116,029 70.90 146 147 SPH-Financial 3/11 11/9/04 2:03 PM Page 148

OVERSEAS BUREAUS AS AT OCTOBER 15, 2004 Share Options Bureau Name/Address Telephone Fax Email Pub. The Singapore Press Holdings Group Executives’ Share Option Scheme (”1990 Scheme”) and the Singapore Press Holdings Group (1999) Share Option Scheme (”1999 Scheme”) are administered by the Remuneration Committee comprising the following members: BANGKOK Nirmal Ghosh 66-2-661 6207 66-2-260 0893 [email protected] ST Apt 2A, Prime Residence Michael Fam Yue Onn ( Chairman) 6, Sukhumvit Soi 27 Lim Chin Beng Klong Toey Nua, Wathana Ngiam Tong Dow Bangkok 10110, Thailand Yeo Ning Hong Philip Pillai (appointed on 5.12.2003) Lee Hee Seng (retired on 5.12.2003) BEIJING Goh Sui Noi 86-10-6418 1577/ 86-10-6418 1580 [email protected] ST Tschang Chi-Chu 86-10-6418 1578 [email protected] Details of options granted to Directors and employees in the Group receiving 5% or more of the total number of options available under the Chua Chin Hon [email protected] 1990 Scheme are as follows; Lee Huay Leng 86-10-6418 1585 86-10-6418 1584 [email protected] ZB Name of Number and Aggregate Aggregate Aggregate Sng Tuan Hwee 86-10-6418 1587 [email protected] Director/Employee terms of options options options Suite 4G, Office Tower B Options granted granted since exercised since outstanding East Gate Plaza from 1.9.03 to commencement commencement as at 31.8.04 31.8.04 of Scheme on of Scheme on 29 Dongzhong Street, 28.12.90 to 31.8.04 28.12.90 to 31.8.04 Dongcheng District Beijing 100027, P.R. China Lim Kim San - 1,763,912 1,763,912 - CHONGQING Zhang Xiao Zhong 86-23-6381 1009 86-23-6381 1011 [email protected] ZB The 1990 Scheme was approved by shareholders in December 1990, and has been subsequently amended; the latest amendments were Yuzhong Qu Minquan Lu approved at the extraordinary general meeting on July 16, 1999. 51 Hengtong Yunding International Apartment At the extraordinary general meeting on July 16, 1999, the 1999 Scheme was adopted to replace the 1990 Scheme. Unit B, 16-11, Details of options granted to Directors and employees in the Group receiving 5% or more of the total number of options available under the ChongQing 400010 1999 Scheme are as follows: GUANGZHOU Lee Chih Horng 86-20-8760 5937 86-20 8731 8512 [email protected] ZB Name of Number and Aggregate Aggregate Aggregate Room 1410, 14th Floor, Director/Employee terms* of options options options South Tower Options granted granted since exercised since outstanding World Trade Centre from 1.9.03 to commencement commencement as at 31.8.04 371-375 Huanshi Donglu 31.8.04 of Scheme on of Scheme on Guangzhou 510095, China 27.10.99 to 31.8.04 27.10.99 to 31.8.04 HONGKONG Ching Cheong 852-2530 9720 852-2845 9934 [email protected] ST Lim Kim San 150,000 1,050,000 225,000 3,506,250 #

Norman Yik 852-2524 6191 852-2524 7394 [email protected] ZB * Terms: Exercise price: S$18.54 Expiry Date: 16.12.2013 Echo Cheung 852-2877 9076 852-2522 0950 [email protected] Mktg # Adjusted for the effects of the Share Split and Captal Reduction Exercises which took place during the financial year 2004. 1308, 13th Floor, 852-2526 9018 - ST General Line In respect of each of the 1990 Scheme and 1999 Scheme: Tower Two, Lippo Centre, 1. the Rules do not allow for options to be granted at a discount; No. 89 Queensway, 852-2877 0713 - ZB General Line 2. there are no controlling shareholders of the Company or its associates to whom options have been granted; and Hong Kong 3. except as disclosed herein, no employee has received 5% or more of the total number of options available.

Copies of the 1990 Scheme and the 1999 Scheme are available for inspection at the Company’s registered office. 148 149 SPH-Financial 3/11 11/9/04 2:03 PM Page 150

OVERSEAS BUREAUS (CONT’D) OVERSEAS BUREAUS (CONT’D) AS AT OCTOBER 15, 2004 AS AT OCTOBER 15, 2004

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

JAKARTA Derwin Pereira 62-21-3983 1465 62-21-3983 1466 [email protected] ST 62-21-3983 1467 TAIPEI Lawrence Chung Kuo Hsiung 886-2-2370 3727 886-2-2370 9762 [email protected] ST Yap Pheng Hui 886-2-2383 2732 886-2-2375 7822 [email protected] ZB Devi Muri Asmarani 62-21-3983 1471 [email protected] 2F., No. 130, Bo-Ai Road Salim Bin Osman Jhong Jheng District Taipei City 100, Taiwan (R.O.C.) Shoeb Kagda 62-21-3983 1474 [email protected] BT TOKYO Kwan Weng Kin 81-3-3442 4258 81-3-3442 4258 [email protected] ST Chong Tien Siong 62-21-3983 1485 62-21-3983 1486 [email protected] ZB 2-16-49-503 Takanawa Minato-ku, Tokyo Suite 1401, 14th Floor Japan 108-0074 Deutsche Bank Building Jalan Imam Bonjol 80, Ryo Ichi Yanagihara 81-3-3582 6259 81-3-3589 5480 Mktg Jakarta 10310 5A, 6-28 Akasaka, 6-Chome Minato-ku, Tokyo 107, Japan KUALA LUMPUR Reme Bin Ahmad 02-03-2162 0011 02-03-2164 6439 [email protected] ST Leslie Lau Kuan Chen [email protected] WASHINGTON Roger Mitton 1-202-662 8726 1-202-662 8729 [email protected] ST Carolyn Hong [email protected] Eugene Low [email protected] National Press Building Pauline Ng BT Suite 916, 529 14th Street., NW Washington, DC 20045 Suite 11A, Level 11, MNI Twins U.S.A Tower 2, No. 11 Jalan Pinang 50450 Kuala Lumpur Malaysia Shanghai Investment Office

MANILA Maria Luz Baguioro 63-2-848 7232 / 63-2-848 7235 [email protected] ST New Beginnings Loo Chin Wah 86-21-2890 9630 86-21-2890 9999 [email protected] Unit no. 1510, 15th floor, 63-2-848 7233 / Management 31st Floor, Jin Mao Tower Tower One 63-2-848 7234 Consulting 88 Shi Ji Avenue, Pudong Ayala Triangle, Avala Avenue (Shanghai) Shanghai 200120, PR China Makati City 1226, Philippines Company Limited

SHANGHAI Jason Leow [email protected] ST Note: ST – Straits Times, ZB – Lianhe Zaobao, BT – The Business Times, Mktg – Marketing Wong Yee Fong 86-21-6218 1315 / 86-21-6258 8723 [email protected] ZB Room 2316, 86-21-6218 1316 / Nanzheng Building 86-21-6218 1317 No. 580 West Nanjing Road Shanghai 200041, China

150 151 SPH-Financial 3/11 11/9/04 2:03 PM Page 152

PROPERTIES OF THE GROUP CORPORATE INFORMATION AS AT AUGUST 31, 2004 SINGAPORE PRESS HOLDINGS LIMITED

Expiry date Land Built-in Existing Audit Committee Location Tenure of Lease (sq m) (sq m) use Tang I-Fang / Chairman Times Industrial Building Freehold - 20,638 12,560 Industrial Willie Cheng Jue Hiang 422 Thomson Road Cheong Choong Kong Lee Ek Tieng 82 Genting Lane Leasehold July 16, 2040 24,892 48,922 Industrial Sum Soon Lim

Auditor Print Centre Leasehold June 9, 2034 110,075 103,460 Industrial PricewaterhouseCoopers 2 Jurong Port Road 8 Cross Street, #17-00, PWC Building, News Centre Leasehold March 2, 2031 21,730 54,296 Industrial Singapore 048424 1000 Toa Payoh North Audit Partner Tan Boon Chok (Appointed 2003) Manhattan House Leasehold October 15, 2068 - 554 Commercial 151 Chin Swee Road Company Secretaries Units #01-39 to #01-48 Ginney Lim May Ling and #01-51 to #01-56 Khor Siew Kim

20A Yarwood Avenue Leasehold May 6, 2878 1,721 488 Residential Registered Office 1000, Toa Payoh North, News Centre, 42 Nassim Road Freehold - 1,406 686 Residential Singapore 318994 Tel: (65) 6319 6319 42A Nassim Road Freehold - 1,444 645 Residential Fax: (65) 6319 8282 Email: [email protected] 42B Nassim Road Freehold - 1,418 645 Residential Reg. No. 198402868E

Paragon Freehold - 16,638 85,182 Commercial Share Registration Office 290 Orchard Road Barbinder & Co Pte Ltd 8 Cross Street, #17-00, MALAYSIA PWC Building, Awana Condominium Freehold - - 117 Residential Singapore 048424 Unit 3544 Genting Highlands Financial Calendar

HONGKONG Announcement of 2004 Half-Year Results April 6, 2004 Tower Two, Lippo Centre Leasehold February 14, 2059 - 368 Commercial Payment of 2004 Interim Dividend May 5, 2004 Unit 1308 13th Floor Extraordinary General Meeting May 7, 2004 89 Queensway, Hong Kong Financial Year-End August 31, 2004 Announcement of 2004 Full-Year Results October 11, 2004 Despatch of Annual Report to Shareholders November 18, 2004 Annual General Meeting December 6, 2004 Payment of 2004 Proposed Final & Special Dividends December 28, 2004 152 153 SPH-Financial 3/11 11/9/04 2:03 PM Page 154

NOTICE OF ANNUAL GENERAL MEETING NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the Twentieth Annual General Meeting of the Company will be held at The Auditorium, 1000 Toa Payoh North, Special Business News Centre, 1st Storey, Annexe Block, Singapore 318994 on Monday, December 6, 2004 at 10.30 a.m. for the following business: 8. To consider and, if thought fit, to pass the following Ordinary Resolutions: Ordinary Business (i) “That pursuant to Section 161 of the Companies Act, Chapter 50 and the listing rules of the Singapore Exchange Securities Trading Limited 1. To receive and, if approved, to adopt the Directors’ Report and Audited Accounts for the financial year ended August 31, 2004. (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: 2. To declare a final dividend of 10 cents, and a special dividend of 11.25 cents, per S$0.20 share less income tax in respect of the financial year ended August 31, 2004. (a) (i) issue Shares in the capital of the Company (“Shares”) whether by way of rights, bonus or otherwise; and/or

3. To pass the following resolutions separately under Section 153(6) of the Companies Act, Chapter 50: “That pursuant to Section 153(6) (ii) make or grant offers, agreements or options (collectively, “Instruments”) that might or would require Shares to be issued, including of the Companies Act, Chapter 50, ______be and is hereby re-appointed a Director of the Company to hold such office until the but not limited to the creation and issue of (as well as adjustments to) warrants, debentures or other instruments convertible into next Annual General Meeting of the Company”: Shares,

(i) Lim Chin Beng at any time and upon such terms and conditions and for such purposes and to such persons as the Directors may in their absolute (ii) Lee Ek Tieng. discretion deem fit; and

4. To re-elect the following Directors who are retiring in accordance with the Company’s Articles of Association, and who, being eligible, (b) (notwithstanding the authority conferred by this Resolution may have ceased to be in force) issue Shares in pursuance of any offer themselves for re-election : Instrument made or granted by the Directors while this Resolution was in force,

(i) Cheong Choong Kong provided that: (ii) Yeo Ning Hong (iii) Cham Tao Soon (1) the aggregate number of Shares to be issued pursuant to this Resolution (including Shares to be issued in pursuance of Instruments (iv) Willie Cheng Jue Hiang. made or granted pursuant to this Resolution) does not exceed 50 per cent. of the issued share capital of the Company (as calculated in accordance with sub-paragraph (2) below), of which the aggregate number of Shares to be issued other than on a prorata basis to 5. To approve Directors’ fees of S$787,500 . 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 share capital of the Company (as calculated in accordance with sub-paragraph (2) below); 6. To appoint Auditors and to authorise the Directors to fix their remuneration. (2) (subject to such manner of calculation as may be prescribed by the SGX-ST) for the purpose of determining the aggregate number of 7. To transact any other business of an Annual General Meeting. Shares that may be issued under sub-paragraph (1) above, the percentage of issued share capital shall be based on the issued share capital of the Company at the time this Resolution is passed, after adjusting for:

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

(ii) any subsequent consolidation or subdivision of Shares;

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

(4) (unless revoked or varied by the Company in general meeting) the authority conferred by this Resolution shall continue in force until the conclusion of the next Annual General Meeting of the Company or the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is the earlier.” 154 155 SPH-Financial 3/11 11/9/04 2:03 PM Page 156

NOTICE OF ANNUAL GENERAL MEETING NOTICE OF ANNUAL GENERAL MEETING

(c) in this Resolution: (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 shares as may be issued pursuant to “Prescribed Limit” means that number of issued Ordinary Shares representing ten per cent of the issued Ordinary Share capital of the the exercise of options under the 1999 Scheme, provided always that the aggregate number of shares to be issued pursuant to the 1999 Company as at the date of the passing of this Resolution; Scheme shall not exceed 12 per cent of the issued share capital of the Company from time to time.” “Maximum Price” in relation to Ordinary Shares to be purchased or acquired, means the purchase price (excluding brokerage, commission, applicable goods and services tax and other related expenses) which shall not exceed, in the case of a market purchase of (iii) “That: an Ordinary Share and off-market purchase pursuant to an equal access scheme, 105 per cent of the Average Closing Price of the Ordinary Shares; (a) for the purposes of Sections 76C and 76E of the Companies Act, Chapter 50 (the “Companies Act”), the exercise by the Directors of the Company of all the powers of the Company to purchase or otherwise acquire issued ordinary shares of S$0.20 each fully paid in the “Average Closing Price” means the average of the last dealt prices of an Ordinary Share for the five consecutive trading days on which capital of the Company (the “Ordinary Shares”) not exceeding in aggregate the Prescribed Limit (as hereafter defined), at such price or the Ordinary Shares are transacted on the SGX-ST immediately preceding the date of market purchase by the Company or, as the case prices as may be determined by the Directors from time to time up to the Maximum Price (as hereafter defined), whether by way of:- may be, the date of the making of the offer pursuant to the off-market purchase, and deemed to be adjusted, in accordance with the listing rules of the SGX-ST, for any corporate action that occurs after the said five-day period; and (i) market purchase(s) on the SGX-ST transacted through the Central Limit Order Book trading system; and/or “date of the making of the offer” means the date on which the Company announces its intention to make an offer for the purchase or (ii) off-market purchase(s) (if effected otherwise than on the SGX-ST) in accordance with any equal access scheme(s) as may be acquisition of Ordinary Shares from holders of Ordinary Shares, stating therein the purchase price (which shall not be more than the determined or formulated by the Directors as they consider fit, which scheme(s) shall satisfy all the conditions prescribed by the Maximum Price calculated on the foregoing basis) for each Ordinary Share and the relevant terms of the equal access scheme for effecting the off-market purchase; and Companies Act; (d) the Directors of the Company and/or any of them be and are hereby authorised to complete and do all such acts and things (including and otherwise in accordance with all other laws and regulations and rules of the SGX-ST as may for the time being be applicable, be and is executing such documents as may be required) as they and/or he may consider expedient or necessary to give effect to the hereby authorised and approved generally and unconditionally (the “Share Buy Back Mandate”); transactions contemplated and/or authorised by this Resolution.”

(b) unless varied or revoked by the Company in general meeting, the authority conferred on the Directors of the Company pursuant to the Share Buy Back Mandate may be exercised by the Directors at any time and from time to time during the period commencing from the date of the passing of this Resolution and expiring on the earlier of:

(i) the date on which the next Annual General Meeting of the Company is held; and By Order of the Board

Ginney Lim May Ling (ii) the date by which the next Annual General Meeting of the Company is required by law to be held; Khor Siew Kim Company Secretaries Singapore, November 18, 2004

Notes:

A Member entitled to attend and vote at the General Meeting is entitled to appoint a proxy to attend and vote in his stead and the proxy need not be a Member of the Company. The instrument appointing the proxy must be lodged at the Company’s Share Registration Office, Barbinder & Co Pte Ltd, 8 Cross Street, #11-00 PWC Building, Singapore 048424 not less than 48 hours before the time fixed for the meeting.

156 157 SPH-Financial 3/11 11/9/04 2:03 PM Page 158

NOTICE OF ANNUAL GENERAL MEETING NOTICE OF ANNUAL GENERAL MEETING

EXPLANATORY NOTES STATEMENT PURSUANT TO ARTICLE 72 OF THE COMPANY'S ARTICLES OF ASSOCIATION

1. In relation to Ordinary Resolution No. 3 :- The effects of the resolutions under the heading "Special Business" in the Notice of the forthcoming Annual General Meeting are:-

• Lim Chin Beng will, upon re-appointment, continue as the Chairman of the Board and of the Executive Committee, and as a member (a) Ordinary Resolution No. 8(i) is to allow the Directors of the Company from the date of that meeting until the next Annual General of the Nominating Committee and the Remuneration Committee. He is considered an independent Director. Meeting to issue shares in the Company and/or make or grant Instruments, during the validity period of this Resolution, and to issue shares in pursuance of such Instruments subject to specified limits. • Lee Ek Tieng will, upon re-appointment, continue as a member of the Audit Committee and of the Nominating Committee. He will also be appointed Chairman of the Nominating Committee. He is considered an independent Director. (b) Ordinary Resolution No. 8(ii) is to authorise the Directors to offer and grant options under the 1999 Scheme and to allot and issue shares pursuant to the exercise of such options under the 1999 Scheme up to an amount not exceeding 12 per cent of the issued share 2. In relation to Ordinary Resolution No. 4:- capital of the Company from time to time.

• Cheong Choong Kong will, upon re-election, continue as a member of the Audit Committee. He is considered an independent (c) Ordinary Resolution No. 8(iii) is to renew the mandate to permit the Company to purchase or acquire issued ordinary shares in the Director. capital of the Company on the terms and subject to conditions of the Resolution.

• Yeo Ning Hong will, upon re-election, continue as a member of the Remuneration Committee. He is considered an independent The Company may use internal sources of funds, or a combination of internal resources and external borrowings, to finance the Director. purchase or acquisition of its ordinary shares. The amount of funding required for the Company to purchase or acquire its ordinary shares, and the impact on the Company’s financial position, cannot be ascertained as at the date of this Notice as these will depend on • Cham Tao Soon will, upon re-election, continue as the Deputy Chairman of the Board and as a member of the Executive Committee. the number of ordinary shares purchased or acquired and the price at which such ordinary shares were purchased or acquired. He will also be appointed as a member of the Remuneration Committee. He is considered an independent Director. Based on the issued and paid-up ordinary share capital of the Company as at October 18, 2004 (the “Latest Practicable Date”), the • Willie Cheng Jue Hiang will, upon re-election, continue as a member of the Audit Committee. He is considered an independent purchase by the Company of ten per cent of its issued ordinary shares will result in the purchase or acquisition of 156,697,252 ordinary Director. shares. Assuming that the Company purchases or acquires the 156,697,252 ordinary shares at the maximum purchase price of S$4.97 for one ordinary share (being the price equivalent to 105 per cent of the average closing market prices of the ordinary shares for the five consecutive market days on which the ordinary shares were traded on the SGX-ST immediately preceding the Latest Practicable Date), the maximum amount of funds required for such share buy back is approximately S$778.8 million. The maximum amount of funds required for such share buy back is the same regardless of whether the Company effects an on-market purchase or an off-market purchase.

The financial effects of the purchase or acquisition of such ordinary shares by the Company pursuant to the proposed Share Buy Back Mandate on the audited financial accounts of the Company and its subsidiaries for the financial year ended August 31, 2004 are set out in greater detail in the letter to Shareholders dated November 18, 2004, which is enclosed together with this Annual Report.

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To be used on To be used in ANNUAL GENERAL MEETING a Show of Hands the event of a Poll Singapore Press Holdings Limited (Incorporated in Singapore) No. of Votes No. of Votes Reg. No. 198402868E No. Resolutions For Against For Against Ordinary Business I/We ______1. To adopt Directors' Report and Audited Accounts of ______2. To declare a Final Dividend 3. To re-appoint Directors pursuant to Section 153(6) being a member/members of the abovenamed Company, hereby appoint the Chairman of the Meeting, or of the Companies Act, Cap. 50:- (i) Lim Chin Beng Name Address NRIC/Passport Number Proportion of (ii) Lee Ek Tieng Shareholdings(%) 4. To re-elect Directors:- (i) Cheong Choong Kong (ii) Yeo Ning Hong (iii) Cham Tao Soon and/or (delete as appropriate) (iv) Willie Cheng Jue Hiang 5. To approve Directors’ fees 6. To appoint Auditors and authorise Directors to fix their remuneration 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 7. Any other business of the Company to be held at The Auditorium, 1000 Toa Payoh North, News Centre, 1st Storey, Annexe Block, Singapore 318994 on Special Business December 6, 2004 at 10.30 a.m. and at any adjournment thereof. 8. (i) To approve the Ordinary Resolution pursuant to (Please indicate with an "X" in the spaces provided whether you wish your vote(s) to be cast for or against the Ordinary Resolutions as set Section 161 of the Companies Act, Cap. 50 out in the Notice of Annual General Meeting. In the absence of specific directions, the proxy/proxies will vote or abstain as he/they may think (ii) To authorise Directors to offer and grant options fit, as he/they will on any other matter arising at the Annual General Meeting.) and to issue shares in accordance with the provisions of the Singapore Press Holdings Group (1999) Share Option Scheme (iii) To renew the mandate authorising Directors to purchase the Company’s ordinary shares

Dated this ______day of ______2004

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

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IMPORTANT Notes:

1. Please insert the total number of ordinary shares and/or management shares (“shares”) held by you. If you have ordinary shares entered against your name in the Depository Register (as defined in Section 130A of the Companies Act, Chapter 50 of Singapore), you should insert that number of ordinary shares. If you have Shares registered in your name in the Register of Members, you should insert that number of Shares. If you have ordinary shares entered against your name in the Depository Register and Shares registered in your name in the Register of Members, you should insert the aggregate number of Shares entered against your name in the Depository Register and registered in your name in the Register of Members. If no number is inserted, the instrument appointing a proxy or proxies shall be deemed to relate to all the Shares held by you.

2. If any proxy other than the Chairman of the Meeting is to be appointed, please strike out the words “the Chairman of the Meeting” and insert the name and address of the proxy desired in the box provided. If the box is left blank or incomplete, the Chairman of the Meeting shall be deemed to be appointed as your proxy.

3. A Member of the Company entitled to attend and vote at a meeting of the Company is entitled to appoint one or two proxies to attend and vote instead of him.

4. Where a Member appoints two proxies, the appointments shall be invalid unless he specifies the proportion of his shareholding (expressed as a percentage of the whole) to be represented by each proxy.

5. The instrument appointing a proxy or proxies must be deposited at the Share Registration Office of the Company at Barbinder & Co Pte. Ltd., 8 Cross Street, #11-00 PWC Building, Singapore 048424, not less than 48 hours before the time appointed for the Annual General Meeting.

6. The instrument appointing a proxy or proxies must be under the hand of the appointor or of his attorney duly authorised in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its seal or under the hand of an officer or attorney duly authorised.

7. A corporation which is a Member may authorise by resolution of its directors or other governing body such person as it thinks fit to act as its representative at the Annual General Meeting, in accordance with Section 179 of the Companies Act, Chapter 50 of Singapore.

8. The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, improperly completed or illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified in the instrument appointing a proxy or proxies. In addition, in the case of ordinary shares entered in the Depository Register, the Company may reject any instrument appointing a proxy or proxies lodged if the Member, being the appointor, is not shown to have ordinary shares entered against his name in the Depository Register as at 48 hours before the time appointed for holding the Annual General Meeting, as certified by The Central Depository (Pte) Limited to the Company.

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