singapore press holdings limited press holdings 04 annual report staying ahead of the game s p a r 2...

S I N G A P O R E

P R E S S

H O L D I N G S

04A N N U A LR E P O R T

S T A Y I N G A H E A D O F T H E G A M E

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S I N G A P O R E P R E S S H O L D I N G S L I M I T E D

1000 Toa Payoh North

News Centre

Singapore 318994

www.sph.com.sg

Reg. No. 198402868E

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

“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.

S T A Y I N G A H E A D O F T H E G A M E

� � � � � �

SPH-Corporate_Blu 11/9/04 11:54 AM

6Chairman’s Message

10Group Financial Highlights

12Board of Directors / Board Committee

Members

20Executive Officers

26Review by Chief Executive Officer

36Operational Review

45Operational Data

50Staff Welfare

51Corporate Citizenry

54Significant Events

60Corporate Governance Report

FINANCIAL REVIEW

76Group Simplified Financial Position

77Segmental Operating Revenue

Segmental Pre-Tax Profit

78After-Tax Profit Profit

Earnings Per Share

79Operation Margin and Return on

Operating RevenueReturn on Shareholders’ Funds and

Return on Assets

80Revenue Composition

Cost Composition

81Gross Dividend Per Share

Net Dividend

82Value Added Statement

83Group Half-Yearly Results

FINANCIAL REPORT ANDMISCELLANEOUS

88Directors’ Report

94Statement by Directors

95Auditors’ Report

96Audited Financial Statements

96Balance Sheets

97Consolidated Income Statement

98Consolidated Statement of Changes in

Shareholders’ Equity

99Consolidated Cash Flow Statement

102Notes to the Financial Statements

144Shareholding Statistics

149Overseas Bureaus

152Properties of the Group

153Corporate Information

Financial Calendar

154Notice of Annual General Meeting

160Proxy Form

“It is not a move, even the best move that you must seek, but a realisable plan.”

– Eugene Alexandrovich Znosko-Borovsky, Russian professional chess player.

C O N T E N T S

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

L E A D I N G T H E C H A R G E

“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

C H A I R M A N ’ S M E S S A G E

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 MediaCorp, 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, The New Paper on Sunday, Friday Weekly and Tamil

Murasu 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,

Shin Min Daily News and Lianhe Zaobao.

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.

6


8 9

C H A I R M A N ’ S M E S S A G E ( C O N T ’ D ) C H A I R M A N ’ S M E S S A G E ( C O N T ’ D )

Giving back to the community

Demonstrating its strong community involvement, SPH contributed to a broad spectrum of programmes

ranging from arts and culture, education, conservation, to sports and charity, as well as to the non-profit

Press Foundation of Singapore, an Institution of a Public Character set up early last year to promote lifelong

learning. The Company believes that giving back to the society should be part of its corporate culture, and will

continue to play a responsible role as a good corporate citizen to enhance the well-being of the community.

Outlook

The recent divestment of our StarHub shares would result in an investment income of $126.3 million, before

deducting the Company’s share of IPO expenses, if the over allotment option in the IPO is not exercised.

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

expect the Group’s operating performance to improve in the current financial year.

Directorate

Another two stalwarts of the Board have informed me of their desire to step down. Dr Michael Fam Yue Onn

and Mr Tang I-Fang would not seek re-election in the coming AGM. Both were appointed to the Board on 8

August 1984 and have served unswervingly for the past 20 years. I thank them for their contributions and

invaluable counsel to the Board.

With the appointments of Professor Cham Tao Soon as Deputy Chairman and Mr Willie Cheng Jue Hiang as

a Director on 1 March 2004, the new Board aims to serve you with equal distinction.

I would also like to thank staff, readers, advertisers, vendors and business associates for their continued support.

Lim Chin Beng

Chairman

Broadcasting

Although SPH MediaWorks maintained its share of viewers last year, its loss widened to $44.5 million, up from

$40.2 million the previous year. Higher programming cost amidst a very competitive environment made it

difficult for MediaWorks to continue in the small local free-to-air television market. At the close of our financial

year, we announced that MediaWorks would merge with MediaCorp by end 2004. This merger, as well as

that of our free newspaper Streats with Mediacorp’s Today, would allow both sides to focus on developing

Singapore into a media hub for the region.

Property

The new Paragon extension contributed to the 56.7 per cent increase in property revenue to $82.6 million last

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.

Times House site in Kim Seng Road was sold with a gain of $110.1 million. Other non-core property assets,

including the Times Industrial Building site, would be divested if we receive attractive offers.

Investment income

Total investment income for the year was $258.0 million. Excluding the Belgacom $170.5 million gain,

investment income was $87.5 million, the highest in the Group’s history. On the Group’s portfolio investment,

the return of 8.2 per cent is better than the annual 5.9 per cent return achieved in the past three years.

Share capital management

As I had mentioned in my previous Chairman’s statement, the Board aims to reward shareholders who stay with

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.

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.


G R O U P F I N A N C I A L H I G H L I G H T S

Profit fromOperations

Profit Attributableto Shareholders

Shareholders’Interest*

OperatingRevenue

TotalAssets*

2004 2003

S$1,479,119,000

S$2,247,736,000

S$3,368,245,000

S$2,591,880,000

S$970,075,000

S$897,816,000

S$337,949,000

S$290,896,000

S$546,282,000

S$378,736,000

11

2004 2003 Change

S$’000 S$’000 %

Operating revenue 970,075 897,816 8.0

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

Profit after taxation 546,277 379,135 44.1

Minority interests 5 (399) NM

Profit attributable to shareholders 546,282 378,736 44.2

Shareholders’ interests 1,479,119 2,247,736 (34.2)

Total assets 2,591,880 3,368,245 (23.0)

Total liabilities 1,112,761 1,120,509 (0.7)

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)

Profit before taxation (S$) 0.38 0.24* 58.3

Profit attributable to shareholders (S$) 0.35 0.20* 75.0

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

Per employee (S$) 189,708 167,229 13.4

Per $ employment costs (S$) 2.49 2.49 –

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

Return on operating revenue (%) 56.3 42.2 14.1

Return on shareholders’ funds (%) 36.9 16.8 20.1

* 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 GeneralMeeting on December 6, 2004.

NM Not meaningful

10

G R O U P F I N A N C I A L H I G H L I G H T S ( C O N T ’ D )

* 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 andfixed deposits have been utilised to finance the Capital Reduction Exercise.


<<

W I L L I E C H E N G

Director

<<

T A N G I - F A N G

Director

<<

C H A M T A O S O O N

Deputy Chairman

<<

L E E E K T I E N G

Director

<<

S U M S O O N L I M

Director

<<

A L A N C H A N H E N G L O O N

Director and Chief Executive Officer

<<

C H E O N G C H O O N G K O N G

Director

12

<<

L I M C H I N B E N G

Chairman

<<

L I M K I M S A N

Senior Advisor

<<

Y E O N I N G H O N G

Director

B O A R D O F D I R E C T O R S /

B O A R D C O M M I T T E E

M E M B E R S

<<

M I C H A E L F A M Y U E O N N

Director

<<

N G I A M T O N G D O W

Director

<<

P H I L I P P I L L A I

Director


D I R E C T O R S ’ P R O F I L E D I R E C T O R S ’ P R O F I L E ( C O N T ’ D )

15

ALAN CHAN HENG LOON

Mr Chan was appointed a director and Group President of SPH on 1 July 2002 and became its Chief Executive Officer

on 1 January 2003. He is also a director of Singapore Power Ltd, and Chairman of PowerGas Ltd. He is a member of the

INSEAD Singapore Council, the Board of Trustees, Courage Fund and the Board of Governors of The Singapore-China

Foundation.

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,

Ministry of Transport. He was also a director of DBS Group Holdings Ltd and PSA Corporation Ltd.

Mr Chan is a President Scholar and had been awarded the Public Service Medals (Gold and Silver). He graduated from

the Ecole Nationale de I’Aviation Civile, France and holds an MBA (with distinction) from INSEAD, France.

MICHAEL FAM YUE ONN

Dr Fam was appointed to the Board on 8 August 1984. He is the Executive Chairman of Fraser & Neave Ltd, Chairman

of Asia Pacific Breweries Limited and Centrepoint Properties Ltd and a director of Times Publishing Ltd.

He was formerly Chairman of Singapore Airlines Ltd, Housing Development Board, Mass Rapid Transit Corporation and

the Council of Nanyang Technological University, Public Transport Council and a director of Oversea-Chinese Banking

Corporation Limited, Temasek Holdings (Pte) Ltd, the Public Utilities Board and Economic Development Board. He also

served as a member of the Council of Presidential Advisers, Singapore.

Dr Fam holds a Bachelor of Engineering (First Class Hons) in Civil Engineering from the University of Western Australia;

and Honorary Degrees of, Doctor of Laws from the National University of Singapore, Doctor of Engineering from the

University of Western Australia, and Doctor of Letters from the Nanyang Technological University. He was appointed a

member of the Order of Nila Utama, First Class, in 1990.

14

LIM CHIN BENG

Mr Lim joined the Board on 1 October 2001 and was appointed Chairman of SPH on 13 December 2002. He is also

Chairman of The Ascott Group Ltd. He is director of CapitaLand Ltd and StarHub Ltd, and companies in the Pontiac

Land Group.

He also serves as a director of the Press Foundation of Singapore Ltd and is a member of the Public

Service Commission.

He was formerly the Managing Director and Deputy Chairman of Singapore Airlines Ltd, Chairman of the Singapore

Tourist Promotion Board and Singapore’s ambassador to Japan.

Mr Lim graduated from the University of Malaya (Singapore) in Economics, and Harvard Business School’s Advanced

Management Program.

CHAM TAO SOON

Prof Cham was appointed Deputy Chairman of SPH on 1 March 2004. He has spent more than 30 years in the academia

sector and currently is a Distinguished Professor of Nanyang Technological University.

Prof Cham is also the Chairman of NatSteel, a director of United Overseas Bank Ltd, WBL Corporation Ltd, Robinson &

Co. Ltd and TPA Strategic Holdings Ltd. In addition, he serves as a board member of Land Transport Authority, a member

of the Council of Presidential Advisers, Chairman of the Singapore Symphonia Co Ltd and as director of Singapore

International Foundation.

Prof Cham holds a Bachelor of Engineering (Civil, Hons) from the University of Malaya, a Bachelor of Science

(Mathematics, Hons) from the University of London and a Doctorate of Philosophy (Fluid Mechanics) from Cambridge

University.


D I R E C T O R S ’ P R O F I L E ( C O N T ’ D ) D I R E C T O R S ’ P R O F I L E ( C O N T ’ D )

17

LIM KIM SAN

Mr Lim was appointed Senior Advisor on 1 January 2003, upon stepping down as Executive Chairman after 14 years at

the helm of the SPH Group. He is responsible for the current organisational and management structure of the Group, having

transformed it into a multi-platform media organisation.

He is also the Chairman of Times Publishing Ltd and Press Foundation of Singapore Ltd.

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

Utilities Board, Port of Singapore Authority and Managing Director of Monetary Authority of Singapore. He started his career as

a banker and industrialist.

Mr Lim has received several national honours and awards, including the Order of Temasek, NTUC Medal of Honour, PAP

Distinguished Service Medal and the prestigious Ramon Magsaysay Award for community leadership. He was conferred an

Honorary Degree of Doctor of Laws, National University of Singapore.

NGIAM TONG DOW

Mr Ngiam was appointed to the Board on 15 March 2001. He is the Chairman of HDB Corporation Pte Ltd and a director

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.

He was formerly a director of Temasek Holdings (Pte) Ltd, Overseas Union Bank Ltd, Development Bank of Singapore

Ltd and Singapore Airlines Ltd.

Mr Ngiam has a distinguished public service career, having served as Chairman of the Housing & Development Board,

Central Provident Fund Board, Economic Development Board, Telecommunications Authority of Singapore, and Deputy

Chairman of the Board of Commissioners of Currency. He was also Permanent Secretary of the Prime Minister’s Office,

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.

16

TANG I-FANG

Mr Tang has been a Director since 8 August 1984. He is the Executive Chairman of WBL Corporation Ltd, the Chairman

of United Engineers Ltd, Wearnes International (1994) Ltd and the Deputy Chairman of The Straits Trading Company Ltd.

He is also a director of Lee Kuan Yew Exchange Fellowship Ltd and OCBC, Wearnes & Walden Investments (Singapore) Ltd.

In public service, he led several UN Economic Missions for Asian countries and was Chairman of EDB; Chairman of JTC;

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.

Mr Tang was previously a director of Oversea-Chinese Banking Corporation Ltd and Times Publishing Ltd.

Mr Tang holds a BSc Mech. Eng. from National Central University, China and an MBA from Harvard University.

YEO NING HONG

Dr Yeo was appointed to the Board on 15 March 2001. He is the Senior Advisor of Hyflux Ltd, a member of the Temasek

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;

Honorary President of the SEA Games Federation and Patron of the Singapore National Olympic Council. He is also the

Chairman of a couple of technology start-up companies.

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

Technologies Group of Companies, as well as a director of DBS Bank Ltd and DBS Group Holdings Ltd.

Dr Yeo holds a MSc from Singapore University, and an MA and PhD from Cambridge University. He also has a

distinguished academic and public record, having been conferred several awards and honorary positions in Singapore

and overseas, including Honorary Fellowship of Christ’s College, Cambridge and Distinguished Service Order of the

Republic of Singapore.


D I R E C T O R S ’ P R O F I L E ( C O N T ’ D )

19

He is a member of the Board of Governors, Singapore International Foundation, and the Chairman of the Haggai Institute,

International Board of Trustees, Atlanta.

Dr Pillai holds an LLB First Class Hons (Singapore), LLM (Harvard) and SJD (Harvard).

SUM SOON LIM

Mr Sum was appointed to the Board on 5 December 2003. He is currently a corporate advisor to Singapore Technologies

Pte Ltd.

Mr Sum also sits on the boards of CapitaLand Ltd, Chartered Semiconductor Manufacturing Ltd, STT Communications

Ltd, Singapore Health Services Pte Ltd and Singapore Technologies Telemedia Pte Ltd. He is also a Commissioner of P.T.

Indonesian Satellite Corporation (Indosat) and a member of the Securities Industry Council.

Mr Sum has worked with the Singapore Economic Development Board, DBS Bank, J.P. Morgan Inc., Overseas Union

Bank and Nuri Holdings (S) Pte Ltd, a private investment holding company.

Mr Sum received his B. Sc. (Hons) in Production Engineering from the University of Nottingham, England.

WILLIE CHENG

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

Singapore Science Centre, the National Volunteer & Philanthropy Centre and the Jurong Country Club.

He was previously Country Managing Director of Accenture Singapore.

Mr Cheng holds a Bachelor of Accountancy (First Class Hons) from the University of Singapore. He is a CPA. He is also a fellow

of the Singapore Institute of Directors and the Singapore Computer Society.

18

LEE EK TIENG

Mr Lee was appointed as a director on 15 March 2001. He is the Group Managing Director of the Government of

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.

He was previously Chairman of the Public Utilities Board and Temasek Holdings Pte Ltd, Head of Civil Service and

Permanent Secretary (Special Duties) in the Prime Minister’s Office, as well as Deputy Chairman of the Monetary

Authority of Singapore.

Mr Lee holds a Bachelor’s Degree in Engineering from the University of Malaya (Singapore) and has a Diploma in Public

Health Engineering from the University of Newscastle-Upon-Tyne (UK). He is a member and Fellow of various professional

engineering bodies in Singapore and overseas.

CHEONG CHOONG KONG

Dr Cheong was appointed a director on 1 March 1997. He is also the Chairman of Oversea-Chinese Banking Corporation

Ltd and was previously the Deputy Chairman and Chief Executive Officer of Singapore Airlines Ltd.

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

Mathematics Department at the University of Malaya before joining Singapore Airlines in 1974.

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

PHILIP PILLAI

Dr Pillai was appointed as a director on 5 December 2003. He is a Senior Partner in the law firm of Shook Lin & Bok,

Singapore. He is currently a director of the Monetary Authority of Singapore, Singapore Technologies Engineering Ltd,

Singapore Technologies Electronics Ltd, Lindeteves-Jacoberg Limited, Hotung Investment Holdings Limited and PT Agro

Indomas.

D I R E C T O R S ’ P R O F I L E ( C O N T ’ D )


E X E C U T I V E O F F I C E R S E X E C U T I V E O F F I C E R S ( C O N T ’ D )

21

ARTHUR SEET KEONG HOE

Executive Vice President, Finance

Mr Seet is the Executive Vice President of Finance. He held various finance positions in Times Publishing Berhad, and in

Singapore Newspaper Services Pte Ltd, including Financial Controller and General Manager, Circulation. Mr Seet has

been with the Group for 30 years.

Mr Seet is a director of MobileOne Ltd. He is a Fellow of the Chartered Association of Certified Accountants and

member of the Institute of Certified Public Accountants of Singapore.

SNG NGOI MAY

Executive Vice President

Corporate Services & Corporate Relations

Mrs Sng is the Executive Vice President, responsible for the Group’s Properties, Administration, Information Resource Centre,

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.

Mrs Sng is concurrently the General Manager of Press Foundation of Singapore Limited, a charity foundation set up in

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.

LOW HUAN PING

Executive Vice President, Technology

Mr Low is the Executive Vice President, Technology. He has been with the Group for 18 years. Previously, he was Chief

Executive Officer of SPH AsiaOne Ltd, a subsidiary of SPH, Chairman of CyberWay Pte Ltd and a director of Singapore

Cable Vision Limited. Mr Low is also a director of MobileOne Ltd.

Mr Low started his career at the Ministry of Defence, where he subsequently headed various IT departments.

Mr Low holds a Bachelor of Arts (Honours) and Master of Arts from Cambridge University, where he read Engineering and a

Master of Science from the University of Singapore. He also graduated from Harvard’s Business School Advanced

Management Program.

20

CHEONG YIP SENG

Editor-in-Chief, English/Malay Newspapers Division

Mr Cheong has been in journalism for over 40 years. In January 1987, he became Editor-in-Chief of the English and Malay

Newspapers Division, a position he holds today. As Editor-in-Chief, he manages four newspapers – The Straits Times,

The Business Times, Berita Harian and The New Paper.

He is a non-executive director of SBS Transit Ltd. In 1997, Mr Cheong received the ASEAN Award for information. He also

serves on the Bioethics Advisory Committee and the National University of Singapore Council.

THAM KHAI WOR

Senior Executive Vice President, Marketing

Mr Tham is the Senior Executive Vice President of Marketing, responsible for sales and marketing of advertising in the

English, Malay and Chinese newspapers, and heads the marketing activities of all newspapers. He has been with the Group

for 33 years.

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-

tative in the Asian Foundation of Advertising Associations, and Governor of the Institute of Advertising, Singapore.

ROBIN HU YEE CHENG

Executive Vice President

Chinese Newspapers Division, Newspapers Services Division

Mr Hu joined the Group as Executive Vice President, Chinese Newspapers Division and Newspaper Services Division on

February 1, 2004. Before joining SPH, Mr Hu was Managing Director of global business in SingTel’s wholly-owned

National Computer Systems Pte Ltd.

Mr Hu has extensive experience in the public and private sectors in areas such as technology and media. Between 1995 and

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

heydays of the dotcom era.


E X E C U T I V E O F F I C E R S ( C O N T ’ D )

23

GINNEY LIM MAY LING

Head, Legal & Group Company Secretary

Ms Lim is Head of the Legal/ Secretariat Department and Group Company Secretary. She has been with the Group since

December 1991 and founded the Legal/Secretariat Department in SPH which until her joining, had no in-house legal

department.

Prior to joining SPH, Ms Lim was heading the Legal & Secretariat department of NTUC INCOME. She has over 20 years

of experience in the legal, corporate secretarial and insurance sectors.

Ms Lim holds a Bachelor of Law (Honours) from the National University of Singapore. She is also an Associate of the

Institute of Chartered Secretaries and Administrators and an Associate of the Chartered Insurance Institute.

She is a member of the Group 8: Listed Companies Committee of the Singapore International Chamber of Commerce.

JOYCE CHEE SIEW LUAN

Head, Internal Audit

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

the internal audit function of Tan Chong Motors and was the deputy head of audit in Great Eastern Assurance.

She has held the Vice President and Governor positions in the Institute of Internal Auditors (Singapore) for many terms

and has actively contributed to the growth and development of the internal audit profession in Singapore.

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

22

WEE LEONG HOW

Executive Vice President, Human Resources &

Executive Director, SPH MediaWorks Ltd

Mr Wee has been with the Group for 20 years, and is currently the Executive Vice President of Human Resources. He is

concurrently Executive Director of SPH’s TV subsidiary, SPH MediaWorks Ltd.

Mr Wee started his career in the Singapore Civil Service, first as an engineer in the Ministry of Defence followed by a

stint in the Foreign Service.

Mr Wee holds a Master of Arts from Cambridge University, where he read Engineering under a Singapore Government

scholarship. He also has a Master of Business Administration from the National University of Singapore.

MICHAEL CHIN YONG KOK

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

Properties. He started his career with SPH in Corporate Planning/Business Development Department, and then moved to the

Properties Department. He also held concurrent positions in Production and Human Resources Divisions.

Mr Chin started his career as an engineer in the Public Works Department and later, a senior manager in Coopers & Lybrand,

before joining SPH.

He holds a Bachelor of Science, First Class Honours, University of Manchester, a Master of Science, University of Manchester

and a Master of Business Administration from the National University of Singapore.

E X E C U T I V E O F F I C E R S ( C O N T ’ D )


S E I Z I N G T H E I N I T I A T I V E

“Only the player with the initiative has

the right to attack.”

– Wilhem Steinitz (1836–1900), the firstworld champion


R E V I E W B Y C H I E F E X E C U T I V E O F F I C E R

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.

27


Rationalisation of TV and free newspaper operations

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

since media liberalisation in May 2000 has raised production and acquisition costs, as well as led to

duplication of resources.

SPH MediaWorks, the Group’s broadcasting arm, chalked up further losses of $44.5 million in FY04, up from the

$40.2 million a year ago. Negotiations on the merger of MediaWorks’ Channels U and i, and SPH’s free

newspaper Streats with MediaCorp, were in its final stages at the close of the financial year.

The proposed transactions, which were later signed on 17 September 2004, sought to create a new TV

company in which SPH would have a 20% stake, and for SPH to co-own 40% of MediaCorp Press, which

publishes Today, a free newspaper. SPH will merge Channel U and Streats with MediaCorp’s Channels 5 and

8, and Today respectively. It was agreed that the commercial viability of Channel i would be reviewed.

The continuing losses, especially from the TV operation, were not sustainable. SPH believes rationalisation is

in the best interest of the company, as it would immediately stem the losses and enhance shareholder value,

while allowing the company to hold significant stakes in the TV and free newspaper businesses.

Business performance

Group turnover for the year grew 8% to $970.1 million, boosted by revenue from its core newspaper and

magazine operations, which rose 5.6% to $833.2 million, property segment which brought in $82.6 million, up

56.7 %, and broadcasting and multimedia business which fell 2.6% to $54.3 million.

Riding on improving consumer sentiment, which was dented by the SARS crisis last year, the Group’s

advertising revenue rose 4.1% to $664.5 million. Operating expenses went up 4.5% to $643.5 million. Higher

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.

28 29

R E V I E W B Y C H I E F E X E C U T I V E O F F I C E R ( C O N T ’ D )

I am pleased to report that we ended the year on a very positive note, achieving a net profit of $546.3 million,

which is an increase of 44.2% from the previous financial year.

We have delivered on three key fronts.

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

and a major capital reduction exercise. The stock split was to make SPH shares more accessible to small

investors. The capital reduction was to return surplus cash to shareholders by way of a $2,865 cash compen-

sation for every 1,000 shares held, with cancellation of 15 per cent of shares.

The move was aimed at enhancing SPH’s return on equity (ROE) and earnings per share (EPS). The capital

return demonstrated the Group’s commitment to managing the company’s capital on an ongoing basis and,

where appropriate, returning surplus capital to shareholders. The capital reduction exercise will not affect the

company’s funding of immediate and long-term growth plans as it still has a substantial cash balance.

Both the share split and capital reduction were overwhelmingly approved by shareholders at an Extraordinary

General Meeting on 7 May 2004. The exercises were completed on 24 June 2004.

Commitment to divest non-core assets

We kept our commitment to divest non-core assets. The company sold the Times House site, a 10,485 sq metre

freehold land at the junction of Kim Seng Road and River Valley Road, for $118.9 million in March 2004. In April

2004, we netted $170.5 million from the sale of our entire stake in Belgacom, Belgium’s biggest phone company.

We sold a substantial part of our stake in StarHub following its recent IPO. Based on the IPO price of $0.95

per share, SPH would book an investment income of $126.3 million, before deduction of the Company’s IPO

expenses. This gain will be reflected in the first quarter results in FY05.

The company remains committed to divesting the remaining non-core assets in the Group as it focuses on

its core business.



30 31


Zaobao Sunday was also given a major overhaul and relaunched on 29 August 2004. It was also well received

by readers, and sales rose by 6,000 copies to an average of 189,300. Its weekday circulation averaged

185,000 copies, slightly down from last year.

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

for News Design (SND), Society of Publishers in Asia (SOPA), IFRA’s Publish Asia and the Pacific Area Newspaper

Publishers’ Association (PANPA), are a good way to benchmark our work against other papers in the world.

On another platform, the online editions of our major newspapers and AsiaOne also continued to attract

more eyeballs. Both the Chinese and English online sites drew up to 300 million pageviews a month, with

Zaobao.com alone snaring about 250 million pageviews. Our Internet business unit also reported higher

advertising revenue, in line with global trend.

Reaching out to young readers

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

pages which give young readers a forum to contribute their works and air their views.

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

Lianhe Zaobao, moved into schools to engage more student readers through their media and student

correspondent clubs, and their efforts boosted weekly sales to schools.

Newspaper-in-education is an area which we will be paying more attention to grow and drive readership.

SPH Magazines’ regional thrusts

Not to be left out, our magazine subsidiary, SPH Magazines, also went into overdrive to make further inroads

into regional markets and roll out new lifestyle titles. In the short span of eight months from October 2003

when it started its regional expansion drive, SPH Magazines established a beachhead for its bestseller Her

World women’s magazine in the region through joint ventures in Malaysia, Thailand and China.

Property

The Property segment was one of the three star performers of the year, the other two being newspaper and

magazine segment and Treasury and Investment. The new Paragon extension helped boost property turnover

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.

Times Properties also contributed a higher net profit of $114.6 million, with $110.1 million from the Times

House sale.

Newspaper sales

Against dwindling newspaper readership worldwide, competition from alternative media and pressure on

readers’ time, SPH newspapers managed to buck the trend and held their ground. This was borne out by the

Nielsen 2004 Media Index survey, which showed that overall newspaper readership stayed at 84%, with

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

paid newspapers.

But the total daily average circulation of the Group’s 13 paid newspapers fell by 2.1% to 1,036,836 copies

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.

However, readers continued to find value for money in SPH newspapers, underlining support for their on-

going improvements to beef up content and design. Six newspapers in the SPH stable underwent makeovers

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.

Daily average weekday circulation of The Straits Times, SPH’s English flagship daily, stayed at 380,200,

marginally down from the previous year. This was before the cover-to-cover makeover for the 159-year-old

paper, which remains the newspaper of choice for Singapore readers. This new-look ST was relaunched on

19 October 2004, receiving kudos all round for its classy, fresh and clean design.



32 33


Other newspapers such as The New Paper and Lianhe Zaobao continued to support the annual President’s

Challenge fund-raising drive.

For SPH, corporate giving is a way of giving back to the communities which have made it profitable and its

responsibility to forge community spirit.

Acknowledgements

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.

I want to thank all of them for their dedication and hard work and for going the distance for the company. I

would also like to express my deepest appreciation to our business associates, management, unions and

customers for their strong support and contribution to help keep the SPH flag flying high.

We enter the new financial year with renewed confidence, energised by our synergy and well-positioned to

tap new growth opportunities in the region. But let’s not be lulled into thinking that it will be business as usual

for we have to brace ourselves for the changing market dynamics in the coming months which may upset the

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.

We must remain nimble and focused and continue to build on our competitive strengths to produce quality

products and grow earnings, exploring fresh ideas, breaking new grounds to give those who believe in us

better value for money.

Alan Chan Heng Loon

Chief Executive Officer

At home, SPH Magazines continued to enlarge its stable of lifestyle titles, which included Shape, a health and

fitness magazine for women, Maxim, a men’s lifestyle magazine, Simply Her, a lifestyle guide for busy, working

women who multi-task, Young Parents pre-school guide and Young Parents Baby.

And in a move that strengthens its foothold in the regional magazine market, it bought over the media and

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

contract titles, making it a market leader.

Corporate citizenry

SPH widened its community involvement during the year and continued to contribute to a diverse range of

worthy events, from education, arts and culture, conservation, sports to charity.

In recognition of its staunch support to help keep the local arts scene thriving, SPH was given the

Distinguished Patron of the Arts Award by the National Arts Council for the 12th year running. It was also big-

hearted on charity, and initiated a group organised giving on 23 August 2004 with donations totalling

$200,000 for 20 charity and welfare organisations which look after the needy sick and elderly.

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

million to help the growing number of needy students on its list, which now stands at 11,000, as did its

Chinese TV Channel U, which raised a record $7 million from its second Ren Ci Charity Show for the Ren Ci

Hospital and Medical Centre.



P O S I T I O N A LA D V A N T A G E

“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.


O P E R A T I O N A L R E V I E W

The sunnier New Paper on Sunday

• On 1 August 2004, the Sunday edition of The New Paper emerged with a classy new look, giving readers even more

reason to lay their hands on the bestselling weekend tabloid.

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

that invites well-known personalities to give views on movies and TV shows.

Readers particularly like the feel-good style of a weekend magazine.

Berita Minggu

• On 15 August 2004, Berita Minggu, the Sunday edition of Berita Harian, a Malay language daily, was relaunched,

with livelier content, bigger pictures and graphics. It also offers more features, covering economic and money

matters, a main feature called Focus BM, hot topics, lifestyle, entertainment and sports. Its weekday edition will be

revamped in 2005.

Chinese Newspapers

Shin Min Daily News

• 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

pages in September 2002.

Positive feedback from readers and advertisers to the change in 2002 spurred the paper on to a major facelift. The

new Shin Min now gives readers deeper insights into breaking news and updates readers on trends, the hottest

entertainment and sports news.

3736

BETTER READS, BRIGHTER LOOKS – NEWSPAPER MAKEOVER MANIA

SPH newspapers spared no efforts to refresh their image during the year to give better value to readers. The English,

Chinese and Malay Newspapers went all out to beef up their content and design in a series of makeovers. The results

pleased readers and advertisers, and boosted sales. Here are the highlights of the key new features in the various

redesigned papers.

English and Malay Newspapers

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

makeover, including a new classy masthead.

It was an immediate hit with readers, who lapped up its richer content and vibrant layout, which is organised around

readers’ needs and demands for weekend reading. The writing is brighter, headlines are more striking and the design

style combines text, photos and graphics in a visually stunning way with the use of bold colours. There are more

lifestyle, leisure and health features, as well as new sections, with each carrying a news-you-can-use anchor columns

to help readers digest the news and information in a faster way.

The Sunday Times redesign was a winner. A snap poll found that more than eight in 10 readers liked the new version

and one-third said they spent more time reading it. Sales went up by 8,000 copies weekly.

The successful Sunday Times revamp paved the way for a total overhaul of its mothership, The Straits Times, which

was relaunched on 19 October 2004.

The Business Times

• On 1 September 2004, The Business Times took on a brand new look, surprising readers with a refreshing blue

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.

O P E R A T I O N A L R E V I E W ( C O N T ’ D )



REGIONAL EXPANSION – SPH MAGAZINES

Financial Year 2004 marked a major milestone for SPH Magazines as it embarked on a regional expansion drive.

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

Bhd. In March 2004, in a joint venture with GMM Media Co., Her World Thailand made its debut. Two months later,

– Her World, the first Chinese- language edition of the magazine, made its entry into China. Her World Indonesia was

launched in October 2000 under the banner of licence partner PT. Media Ikrar Abadi.

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.

3938

Lianhe Zaobao

• On 21 February 2004, SPH’s flagship Chinese daily Lianhe Zaobao launched Popcorn, a new education section in

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.

• On August 8, 2004, Lianhe Zaobao on Sunday unveiled its new sleek look. Brighter and more vibrant, it offers readers

loads of interesting features and a more leisurely read for the whole family. Stories are written in a lighter vein to

engage younger readers while the design is attractive and magazine-ish. The main news section remains a broadsheet

but the lifestyle section comes in a tabloid, giving readers more appealing lifestyle and fun topics.




• In July 2004, SPH emerged a big winner at the annual IFRA’s Publish Asia Media Awards, walking away with six awards

for best in printing, infographics and design.

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

Newspaper Infographics while The Sunday Times won gold for the Best in Newspaper Design.

Young Parents, published by SPH Magazines, beat top magazines in the region to win the gold award for Best in

Magazine Design.

Publish Asia Media Awards is an annual event organised by IFRA, the world’s leading organisation for the newspaper

and media publishing industry.

Advertising

• In September 2003, SPH’s Product Development and Branding team won certificates for being finalists in The New

York Festivals’ International Design & Print Advertising Competition, a prestigious international competition that

honours the best work in communications and media, including TV and cinema advertising, TV programming and

promotion and interactive multimedia.

• In November 2003, SPH’s Classified Advertisements Telephone Sales (Cats) division took the top spot in the Call Centre

of the Year awards, organised by the Call Centre Council of Singapore. The awards honour organisations and

individuals for excellent customer service, high levels of productivity, operational efficiency and profitability.

• In November 2003, SPH received the first patron award given by the Association of Accredited Advertising Agents

Singapore (4AS) for making a significant contribution to the local advertising and marketing communications industry.

4140

BUMPER HAUL OF AWARDS AND HONOURS

SPH continued its winning streak in the last financial year, reaping a bumper crop of top international and local awards

for newspaper excellence, broadcasting, advertising, corporate governance and supporting the arts in Singapore. And

the awards went to:

Newspapers and Magazines

• 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

Cua, named Best Financial Journalist of the Year, senior correspondent Christopher Tan of The Straits Times, who won

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.

• 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.

• In March 2004, The Sunday Times won two international design awards, putting it in the league of the world’s best-

designed newspapers. The paper, which shed its old image for a bold new look and livelier, more colourful design in

September 2003, bagged the excellence awards given out by the prestigious Society for News Design, based in the

US. Straits Times photographer Desmond Foo also received an excellence award for photography from the society.

• In June 2004, SPH newspapers swept nine awards – in reporting, photography and design – in a publishing

competition organised by the Society of Publishers in Asia (Sopa). The Straits Times grabbed six top awards for

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

redesigned in September 2003, won the top prize for newspaper design.




GROWING YOUNG READERS

With sagging newspaper readership worldwide, especially among the younger population, SPH newspapers have spared

no efforts in reaching out to younger readers and meeting their expectations and needs.

Throughout the year, they relentlessly kept up with the young, making sure that their products appeal to them, constantly

improving their content and design to stay relevant, with stories written in a lighter, livelier, fun and entertaining style.

Some newspapers added youth sections and education pages to give more value to younger readers.

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.

Highlights of some of these activities by the four major newspapers in SPH to grow younger readers.

Straits Times Media Club

Launched in August 2003 to promote students’ knowledge of current affairs and to improve their writing skills, 49

secondary schools are now members of this club, with 38 of them joining during the year under review.

Schools just need to subscribe to 500 or more copies of The Straits Times a week to become a member. They can also

invite ST editors and journalists to give talks on topical issues to their students, and during the school holidays, students

can attend workshops at SPH.

Response from schools has been overwhelming. In less than a month, 27 schools signed up, raising weekly circulation of

the ST by 20,000. Sales have since gone up to 35,500 now. At the height, 47 schools participated in the scheme with

37,000 copies of Straits Times subscribed.

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

and it is beefing up its education section every Monday.

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

TV accolades

• Despite being a relatively newcomer to the TV scene, SPH MediaWorks’ two TV channels punched above their weight

in the region.

• In December 2003, Channel i News was voted the Best General News Programme at the 8th Asian Television Awards,

beating leading contenders CNN International's News Biz Today and Star News Asia. Channel U’s variety show, Top

10, won Best Entertainment Programme, while its host, Kym Ng, was named Best Entertainment Presenter. It also won

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.

• 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

programme Sense Of Being. A silver went to the Best Movie Promo for the show, Alive.

• In June 2004, for its third birthday, MediaWorks won a gold and two silvers at the International Promax & BDA Awards

presented in New York, taking its total haul of international awards since its launch in 2001 to 48.

Corporate Governance

• In January 2004, SPH came in second in a survey by Asian finance magazine, The Asset, for financial transparency

and good corporate governance. The rating is the highest for a non government-linked company, up from its No. 3

slot the previous year.

• In April 2004, SPH was named The Company Most Committed to Dividend Policy by Hongkong-based FinanceAsia

magazine.

The Arts

• In September 2004, SPH received the Distinguished Patron of the Arts award from the National Arts Council for the

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

4342



45

Daily Average Circulation for 2004

Shin Min Daily News (Weekday)

Shin Min Daily News (Weekend)

The Straits Times

The Sunday Times

The Business Times

The New Paper

The New Paper on Sunday

Streats

Lianhe Zaobao (Weekday)

Lianhe Zaobao (Sunday)

Lianhe Wanbao (Weekday)

Lianhe Wanbao (Weekend)

Friday Weekly

Thumbs Up

Berita Harian

Berita Minggu

Tamil Murasu (Weekday)

Tamil Murasu (Sunday)

380,197

388,796

27,515

115,915

154,004

280,373

58,503

66,000

8,504

15,232

184,445

194,640

124,134

123,634

123,639

121,234

62,523

29,944

O P E R A T I O N A L D A T A

44


the shrinking readership and grow new readers.

Besides stepping up efforts to promote its Friday Weekly for secondary school students and Thumbs Up for primary

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

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

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

in English for uncommon Chinese phrases on each page. Both weeklies also have a newspaper in education programme

which teachers could use as supplementary teaching materials.

Friday Weekly also organises a slew of regular club events and helps schools to produce students newsletters.

Malay and Tamil papers keep pulse on the young

In August 2003, Berita Harian, the Malay language paper, introduced a new and more interactive page, called Expresi, for

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

Youth Murasu, every Tuesday and reaches out to Indian students through activities such as workshops to prepare

students for exams and football tournaments.

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

News Centre, Toa Payoh North, to give them an insight into how newspapers operate and how TV news bulletins are

produced.

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

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


47

O P E R A T I O N A L D A T A ( C O N T ’ D )

46

O P E R A T I O N A L D A T A ( C O N T ’ D )

Year

1995* 1996 1998 1999 2001 2002 2003 20041994 1997

SPH Newspapers Gross Readership Trends (’000)

20000

1,000

2,000

3,000

4,000

5,000

6,000

Year

1995 1996 1998 1999 2001 2002 2003 20041994 1997

SPH Newspapers Gross Readership Trends (’000)

20000

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

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.

Advertising Expediture by Media ( $million )

FY2003Total adspend: S$1,723

35.7%

3.9%26.8%

14.6%

4.5%

8.6%

5.8%

FY2004Total adspend: S$1,973

32.5%

4.1%

29.7%

13.3%

4.7%

9.6%

6.0%

SPH Mediaworks TV

Periodicals

Radio

Others (Cinema, Busbacks/Taxi-Tops and Posters)

Mediacorp TV

SPH Newspapers

Today


P L A Y I N G F O R A W I N

“Every Pawn is a potential queen.”

– James Mason (1909–1984), British actor


50 51

S T A F F W E L F A R E C O R P O R A T E C I T I Z E N R Y

Corporate citizenry is one of SPH’s core values. Matching words with deeds, the Group, which firmly believes that it has a

social responsibility in helping to build a better nation, continued to demonstrate its strong commitment to fostering community

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.

A staunch supporter of local arts, SPH believes in promoting home-grown talent and providing them a platform to

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

Festival, Singapore River Hongbao, Chinese Cultural Festival, it was conferred the Distinguished Patron of the Arts Award

by the National Arts Council for the 12th successive year.

It also contributed to other worthy community causes, including the SPH Geography Challenge, SPH Schools Relay

Championships and SPH Reading Room project.

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

organised group giving. This was in addition to donations to various other charitable causes, including the Community

Chest Share programme and the Press Foundation of Singapore, a non-profit organisation which was set up in 2002 to

promote lifelong learning.

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

students from low-income homes despite the bad times. Its Chinese TV Channel U exceeded expectations when it

collected a record $7 million from its second Ren Ci Charity Show in January for the Ren Ci Hospital and Medical Centre.

Lianhe Zaobao’s ZPOP zbNOW Concert and The New Paper’s Big Walk and Be Yourself Day raised $338,000 for the 2003

President’s Challenge. Tamil Murasu spearheaded the setting up of the G. Sarangapany Education Trust Fund and helped

raised the initial seed money of $500,000.

SPH believes that healthy companies need healthy communities. We see our community involvement as a way of giving

back to the community which has supported us.

At SPH, human resources and talent are our most cherished assets. And we recognise that they are a critical force in the

success of the company. That’s why we provide a stimulating and family-friendly environment to develop and retain talent,

and a flexible and enriching workplace for staff to grow.

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

working hours, work from home arrangement and no-pay leave for mothers who want to extend their maternity leave.

Five-day week & longer maternity leave

On 1 August 2004, SPH implemented a five-day week for staff, in line with the government’s push to create a more family-

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

fourth child as part of the pro-family measures to encourage Singaporeans to have bigger families. This move followed changes

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.

Health screening for all

On 1 February 2004, the company overhauled the group’s medical benefits scheme for staff, moving away from a reactive

approach to a proactive one emphasising early detection and preventive healthcare. Under the new medical scheme, non-

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.

Espirit de Corps parties

To promote Espirit de Corps among employees, the company announced in August 2004 that the annual Dinner and

Dance would be replaced by smaller and more intimate divisional parties, which are aimed at building camaraderie and

bonding. Under the new scheme, each division will organise its own year-end bash. Divisions can also give out Long

Service Awards at such party.

SPH scholarships

SPH awarded scholarships to 14 children of SPH employees in June 2004 to help them pursue their studies at junior

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.


T H E P I E C E S

I N A C T I O N

“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.


<<December 9 – 11, 2003

The Straits Times Media Club organised acamp for 100 “student editors” from 32

member schools. The activities included aninterview with Acting Education Minister

Tharman Shanmugaratnam and talks on broadcast journalism from ST editors and senior journalists.

<<January 7, 2004

Lianhe Zaobao launched the Popcornpages, as part of its effort to attract youngreaders. The pages, which are published

every Wednesday, have been well received,with 30,000 copies of Zaobao being sold

to schools weekly.

>>October 1, 2003

ST School Pocket Money Fund launched itsfourth fund-raising drive to support thegrowing number of needy students, whohave gone up from 7,200 to 11,000 thisyear. Despite the weak economy, $3.5

million was raised.

>>October 14 – 15, 2003

For the first time, over 300 letter writers ofThe Straits Times Forum pages were invitedto a “Thank You” gathering at SPH News

Centre for their contribution. It was anopportunity for them to meet ST editorsand exchanged views. They also toured

the newsroom, TV news studio andInformation Resource Centre andexchange. ST plans to hold this

event annually.

>>January 11, 2004

MediaWork’s Ren Ci Charity Show,organised for the second year, raised $7

million for Ren Ci Hospital. The livecharity show with MediaWorks artistes

performing daredevil feats pulled in some1.25 million viewers.

>>January 16, 2004

SPH raised cover prices of nine of itsnewspapers, in the first price adjustmentsince 1995. The increase for The Straits

Times, Sunday Times, The New Paper, TheNew Paper on Sunday, Berita Harian,

Berita Minggu, Lianhe Zaobao, LianheWanbao and Shin Min Daily News, was in

two stages – 16 January 2004 fornewsstand copies and 1 February 2004 for

subscription copies.

<<March 18, 2004

Shin Min Daily News celebrated its 37thbirthday with a revamp. The new look

Chinese evening daily comes with 16 extracolour pages, a new, bolder and more

vibrant layout and more varied content.

<<March 5, 2004

Member of Parliament Halimah Yacob was named Woman of the Year 2003 and

Dr Wong Ting Hway, Young WomanAchiever, at the annual event organised by

Her World magazine.

S I G N I F I C A N T

E V E N T S

<<November 7, 2003

C.A.T.S. (Classified AdvertisementsTelephone Sales) of Marketing Division

clinched the Call Centre of the Year (under 50 seats) title in the Call CentreCouncil of Singapore Awards, whichrecognise organisations with excellent

customer service, high level of productivity,operational efficiency and profitability.

<<December, 2003

Lianhe Zaobao set up its Chongqingbureau, the fourth bureau in China. It isthe first foreign news bureau to open in

Chongqing.

<<September 6, 2003

Lianhe Zaobao celebrated its 80thanniversary at Suntec Singapore Ballroom

with then Senior Minister Lee Kuan Yew asthe Guest of Honour. More than 800 guests

including ministers, business, communityleaders and diplomats attended the gala event.

>>September 28, 2003

Relaunch of The Sunday Times. The eye-catching, more lively and vibrant Sundayedition was an instant hit with readers,

especially the younger ones, boosting theweekly sales by more than 8,000 copies.

>>January 9, 2004

SPH Magazines held its premier beautyevent of the year, Her World Beauty

Awards 2003, for the third year running, at the Grand Hyatt Singapore. The

highlight of the event was the Her WorldBeauty Awards, which honour the best in

the local beauty industry.

>>January 10 – 15, 2004

The annual River Hongbao to celebrate the Lunar New Year was launched at the

Marina Promenade by NationalDevelopment Minister Mah Bow Tan.

The event is jointly organised by ChineseNewspapers Division (CND) and promotes

Chinese culture and traditions.

<<February, 2004

You Weekly, a Chinese entertainmentweekly, launched Yummy Guide 2004.

Some 50,000 copies of the food guide werequickly snapped up.

<<February 14, 2004

Organised by CND, the biennial ChineseCultural Festival featured a record numberof activities – 220 over six weeks – rangingfrom Chinese opera, exhibitions, dance to

films which draw on Chinese heritage.


>>May 23, 2004

Singapore’s biggest mass sports event, TheNew Paper Big Walk, drew some 70,000participants. The annual event, into its14th year, was organised by The New

Paper, Singapore Amateur AthleticAssociation and Singapore

Sports Council.

<<June 6, 2004

Singapore Promising Brand Awards 2004,organised by Lianhe Zaobao and ASME,recognise small and medium enterprises in

Singapore that have shown outstandingperformance in communicating

their brands.

>>May 2, 2004

A New Business Unit was set up by CNDto complement Marketing division toleverage on the influence and brand of

Chinese newspapers and reach out to advertisers.

<<June 10, 2004

Lianhe Zaobao revamped its sports pagesjust before the start of the Olympics Gamesin Athens. The new design is eye-catching,

with vivid pictures and illustrations.

>>July 6, 2004

SPH Magazines launched Shape Singapore,the local version of the top US health and

fitness magazine for woman.

>>August 4, 2004

Veteran of social service, Haji Abu BakarMaidin was named the Berita Harian

Achiever of the Year 2004. The event wasorganised by Berita Harian and presented

by McDonald’s.

<<August 29, 2004

A total of 68 schools participated in BeYourself Day, organised by The New Paper.

Students dressed creatively to schools toexpress their personalities and made

donations to the President’s Challenge2004. The event, launched in 2002, raised

$140,000 this year.

<<September 1, 2004

The Business Times was relaunched with abrand new look, featuring a refreshing bluemasthead, and offering movers and shakersa meatier content, with a minimum of 32pages on weekdays and speciality pages.Shipping Times has been integrated into

the main paper.

<<May 28, 2004

The 19th World Book Fair, was held at theSuntec Singapore Ballroom. More than

702,000 people attended the annual fair.

<<June, 2004

Lianhe Zaobao launched its Indonesianedition, which is printed and distributed by

the International Daily News in Jakarta,under licence by SPH. Under this

agreement, 5,000 copies of Zaobao areprinted daily, boosting the presence of theSPH Chinese flagship daily in the region.

>>March 8, 2004

Streats launched its second edition. About20,000 copies of the noon edition were

distributed at selected MRT stations, foodjunctions and shopping malls in the

CBD area.

>>March 25, 2004

Singapore Business Awards 2003, organisedby The Business Times and DHL, named

Ron Sim, Founder and CEO of OSIMInternational, Businessman of the Year; LeeHsien Yang, President & CEO of SingTel,Outstanding Chief Executive of the Year;

and gave Hyflux Limited the Enterprise Award.

>>July, 2004

SPH opened its first China business officein Shanghai. Registered as New Beginnings

Management Consultancy (Shanghai) Co Ltd, the office explores business

opportunities and developments in China.

>>July 5, 2004

SPH launched the SPH Ink Awards tohonour excellence in print advertisements

published in SPH newspapers andmagazines. This annual award culminates

at an industry-wide gala event wherewinners will be announced.

<<August 28, 2004

ZPop zbNOW Concert, organised byzbNOW, raised over $180,000 for the

annual President’s Challenge 2004. Over15,000 attended Singapore’s biggest

outdoor concert at the Padang and wereentertained by local and foreign artistesfrom Korea, China, Taiwan, Hong Kong

and Malaysia.

<<August 29, 2004

Zaobao Sunday was revamped to attractyounger readers. It has a new masthead,the design is sleek, brighter with more

colour visuals and there are more featuresfor leisurely reading for the whole family.


W I N N I N GT H R U S T

“Never is reason and clear thinking

more necessary than when victory is

in sight.”

– Eugene Alexandrovich Znosko-Borovsky

(1884–1954), Russian professional chess player.


60 61

C O R P O R A T E G O V E R N A N C E R E P O R T

and ensures that board members are provided with complete, adequate and timely information. As a general rule, board

papers are sent to Directors at least one week in advance in order for Directors to be adequately prepared for the

meeting. Senior management staff are invited to attend board meetings to answer any queries that the Directors may

have on the Group’s operations. The Directors may from time to time, also request to meet without Management’s

presence. In the last financial year, the Board had met without the CEO and other management staff’s presence.

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

Act and the Singapore Exchange Listing Manual. Together with the other management staff of SPH, the Company

Secretary is responsible for compliance with all other statutes, rules and regulations which are applicable to the Company.

Access to Information

The Board is provided with quarterly financial accounts, other financial statements and progress reports of the Group’s

business operations. The Directors may contact the Company’s senior management through the Company Secretary or

the CEO.

Should Directors, whether as a group or individually, need independent professional advice, the Company Secretary will, upon

direction by and approval of, the Chairman or the CEO appoint a professional advisor to render the advice. The cost of such

professional advice will be borne by the Company.

Board Composition

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

of the annual report.

The Company’s Articles allow for the appointment of a maximum of 12 Directors. The size and composition of the Board

are reviewed from time to time by the Nominating Committee (NC), who is of the view that the current Board size is

appropriate, taking into account the nature and scope of the Group’s operations.

The NC is also of the view that the current Board comprises persons who as a group, possesses the relevant qualifi-

cations, experience and core competencies necessary to manage the Company.

SPH is committed to achieving high standards of corporate governance and has adopted a framework of corporate

governance policies and practices in line with the principles set out and best practices recommended in the Code of

Corporate Governance (Code).

SPH has complied with the full requirements of the Code as well as the Singapore Exchange Listing Manual requirements.

There are other sections in this annual report which have an impact on the disclosures required. The annual report should

be read in totality for SPH’s full compliance.

SPH has received recognition in the form of accolades and awards from the investment community for its good corporate

governance practices and transparency in management and reporting (please refer to page 42 for details).

BOARD OF DIRECTORS

Board’s Conduct of its Affairs

The principal responsibilities of the Board are:

1. Reviewing and approving the corporate policies, strategies, budgets and financial plans of the Company;

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

3. Reviewing the processes for evaluating the adequacy of internal controls, risk management, financial reporting

and compliance;

4. Approving the nominations of Directors and appointment of senior management, and determining and reviewing their

remuneration levels;

5. Approving major funding proposals, investments, acquisitions and divestment proposals; and

6. Assuming responsibility for corporate governance.

The Board conducts regular scheduled meetings on a quarterly basis. Ad–hoc meetings are convened when circum-

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

page 72. A Director will not be nominated by the Nominating Committee for re-appointment and will be deemed to have

resigned, if he fails to attend three Board or Board Committee meetings consecutively, without good reason.

The Chairman ensures that board meetings are held when necessary and sets the board meeting agenda in consultation

with the Chief Executive Officer (CEO). The Chairman reviews all board papers before they are presented to the Board

C O R P O R A T E G O V E R N A N C E R E P O R T ( C O N T ’ D )


62 63


Director Training

Directors are kept informed about the relevant training available either inhouse or organised externally. A comprehensive

orientation programme will be organized for new Directors to familiarize them with the Group’s operations, organization

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.

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 independence of each Director is reviewed annually by the NC. The NC adopts the Code’s definition of what

constitutes an independent director in its review. As a result of the NC’s review of the independence of each Director for

this financial year, the NC is of the view that the non-executive Directors are independent directors and further, that no

individual or small group of individuals dominate the Board’s decision making process.

Chairman and CEO

The Company has a separate Chairman and CEO. The Chairman is a non-executive and independent director.

The CEO is the chief executive in the Company and bears executive responsibility for the Company’s business, while the

Chairman bears responsibility for the workings of the Board. The Chairman and the CEO are not related.

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.



64 65


The AC performs the following main functions:

1. To review annual audit plans and audit reports of external and internal auditors;

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

and loss account of the Group before they are submitted to the Board for its approval;

4. To review the scope, results and adequacy of the internal audit function, procedures and its cost effectiveness;

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-

audit services supplied by the external auditors so as to balance the maintenance of objectivity and value for money;

and

7. To recommend to the Board the appointment of external auditors.

The AC has conducted an annual review of the volume of non-audit services to satisfy itself that the nature and extent of

such services will not prejudice the independence and objectivity of the external auditors before confirming their re-nomination.

The AC meets with the external and internal auditors, without the presence of management, at least once year.

Internal Controls

In the course of their statutory audit, the Company’s external auditors will highlight any material internal control

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, and recommendations, if any, by the external auditors are reported to the AC.

The Internal Audit division (IAD) has an annual audit plan, which complements that of the external auditors. IAD’s plan

focuses on material internal control systems including financial, operational, IT and compliance controls, and risk

management. IAD also provides advice on security and control in new systems development, recommends improvements

to effectiveness and economy of operations, and contributes to risk management and corporate governance processes.

Any material non-compliance or lapses in internal controls together with corrective measures are reported to the AC.

BOARD COMMITTEES

To facilitate effective management, certain functions have been delegated by the Board to various Board Committees.

Members of the Board and each Board Committee during the financial year are set out on page 73.

Executive Committee (EC)

The EC comprises six members, four of whom are independent non-executive directors. The EC is chaired by the

Chairman of the Board.

The EC’s principal responsibilities are:

1. To review, with management, and recommend to the Board the overall corporate strategy, objectives and policies of the

Group, and monitor their implementation;

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

3. To review and recommend to the Board proposed investments and acquisitions of the Company and its subsidiaries

which do not fall within the Company’s core businesses but which are considered strategic investments for the long-

term prospects of the Company;

4. To approve the affixation of the Common Seal onto any document in accordance with the Company’s Articles

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;

and

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

Audit Committee (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

NC is of the view that the members of the AC have sufficient financial management expertise and experience to discharge

the AC’s functions.



66 67


Internal Audit

IAD is staffed with eight audit executives, including the Head of Internal Audit, who is a Certified Internal Auditor (CIA)

and a Certified Public Accountant (CPA). All staff have to adhere to a set of code of ethics adopted from 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

matters. IAD has adopted the Standards for Professional Practice of Internal Auditing set by IIA and ensures staff

competency through specialized training and exposure to major business and support areas.

The AC reviews IAD’s reports on a quarterly basis. The AC also reviews and approves the annual IA plans and resources to

ensure that IAD has the necessary resources to adequately perform its functions.

Interested Person Transactions

SPH has an internal policy in respect of any transactions with interested persons and has in place a process to review

and approve any interested person transactions. For this financial year, there were no interested person transactions.

Nominating Committee (NC)

The NC comprises five members, of whom four are independent non-executive directors.

The NC’s principal functions are:

1. To make recommendations to the Board on all board appointments;

2. To be responsible for the re-nomination of Directors, having regard to the Director’s contribution and performance

(e.g.attendance, preparedness, participation and candour) including, if applicable, as an independent director;

3. To determine annually whether or not a Director is independent, bearing in mind the circumstances set forth in

paragraph 2.1 of the Code of Corporate Governance, and any other salient factors;

4. To decide whether or not a Director is able to and has been adequately carrying out his duties as Director of the Company;

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.

Based on the audit reports and management controls in place, the AC is satisfied that the internal control systems provide

reasonable assurance that assets are safeguarded, that proper accounting records are maintained and financial

statements are reliable.

Enterprise Risk Management

SPH recognizes the importance of enterprise risk management process (ERM) and has set up an ERM unit, which reports

to the EC.

SPH institutionalized its risk management practices under a formal enterprise risk management framework in 2004. External

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

incorporates a continuous and iterative 4-step process for enhancing risk awareness and enabling a culture of risk

management across the organisation:

• Identification. Workshops were conducted by external ERM consultants at both management and divisional levels,

to communicate the risk management objectives and approach. Significant risks, in the broad areas of strategic,

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.

• Treatment. Risk treatment plans were determined for the prioritised risks, with appropriate risk owners identified. Cross-

divisional teams were formed to drive the implementation of the treatment plans.

• Monitoring. The ERM Unit provides the EC, with six-monthly reports and updates on major risks faced by SPH, and

progress of risk treatment plans. Any new risk of significance will be reported for review accordingly. The progress is

reported to the Board.

• 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.



68 69


DISCLOSURE ON REMUNERATION

Directors’ Remuneration

The CEO’s remuneration package includes a variable bonus element which is performance-related, and also stock

options which have been designed to align his interests with those of the shareholders. As an executive director, the CEO

does not receive directors’ fees. Non-executive directors have no service contracts.

Non-executive directors, including the Chairman, are paid Directors’ fees, subject to approval at the AGM. A breakdown,

showing the level and mix of each individual Director’s remuneration payable for this financial year is as follows:

Directors’ Base/Fixed Variable or BenefitsFees Salary Bonuses in Kind Total

Name of Director (%) (%) (%) (%) (%)Executive Directors$750,000 to $999,999Chan Heng Loon Alan – 66.48% 29.58% 3.94% 100%

Independent DirectorsBelow $250,000Lim Chin Beng (Chairman) 92.23% – – 7.77% 100%Cham Tao Soon (appointed on 1.3.2004) 100% – – – 100%Willie Cheng Jue Hiang (appointed on 1.3.2004) 100% – – – 100%Cheong Choong Kong 100% – – – 100%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%

Remuneration Committee (RC)

The RC comprises five Directors, all of whom are non-executive and independent directors. Members of the RC are

knowledgeable in the field of executive compensation and have access to expert advice inside and/or outside the

Company.

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.

The RC’s principal responsibilities are:

1. To recommend to the Board of Directors a framework of remuneration for the Board and key executives;

2. To determine specific remuneration packages for each executive director and the CEO or executive of similar rank if

the CEO is not an executive director;

3. To 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;

5. To decide on all aspects of remuneration, including but not limited to Directors’ fees, salaries, allowances, bonuses,

options, long term incentive schemes, including share schemes, and benefits in kind; and

6. To administer the share option scheme(s) adopted by the Group and to decide on the allocations and grants of options to

eligible participants under the share option scheme(s).

The RC also reviews the succession plan of key executives of the Group, including the CEO.



70 71


COMMUNICATIONS WITH INVESTORS AND SHAREHOLDERS

The Company holds analysts’ briefings of its half-year and full-year results and a media briefing of its full year results. The

quarterly financial results are published through the MASNET, news releases and the Company’s corporate website.

The Company does not practise selective disclosure. Price-sensitive information is first publicly released, either before the

Company meets with any group of investors or analysts or simultaneously with such meetings.

The Company has an investor relations team which communicates with its investors on a regular basis and attends to

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

shareholders of the Company receive the annual report and notice of AGM. The notice is also advertised in the

newspapers. The annual report is also available on the Company’s corporate website, www.sph.com.sg.

All Directors, including the Chairmen of the EC, AC, NC and RC and senior management are in attendance at the AGMs

to allow shareholders the opportunity to air their views and ask Directors or management questions regarding the

Company. The external auditors are also invited to attend the AGMs to assist the Directors to answer any queries relating

to the conduct of the audit and the preparation and content of the auditors’ report.

The Articles allow a shareholder to appoint one or two proxies to attend and vote instead of the shareholder. The Articles

currently do not allow a shareholder to vote in absentia.

The Company is in full support of shareholder participation at AGMs. For those who hold their shares through CPF nominees

and who are not registered as shareholders of the Company, the Company welcomes them to attend the AGM as observers.

CODE OF BUSINESS ETHICS

The Group has adopted a Code of Business Ethics to regulate the standards and ethical conduct of its employees who are

required to observe and maintain high standards of integrity.

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

Remuneration of Executives

Remuneration of top five executives of the Company (excluding the CEO in above table) in each remuneration band

for this financial year:

Remuneration Bands No. of Executives

$1,000,000 to $1,249,999 1$750,000 to $999,999 –$500,000 to $749,999 1$250,000 to $499,999 3Total 5

The Company adopts a remuneration policy for staff comprising a fixed component, a variable component and benefits

in kind. The fixed component is in the form of a base salary. The variable component is in the form of a variable bonus

that is linked to the Company’s and individual performance. The benefits in kind would include club and car benefits. The

RC will approve the bonus for distribution to staff based on individual performance. Another element of the variable

component is the grant of share options to staff under the share option scheme. This seeks to align the interests of staff

with that of the shareholders.

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

executive directors may participate in the Company’s share option scheme. Non-executive directors are not eligible to do so

under the scheme rules.

The Singapore Financial Reporting Standard (FRS) 102 on Share-based Payment requires an entity to reflect in its profit

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

September 2005, whereby the value of stock options granted and income derived from stock options will be reflected in

the Group’s financial statements and disclosures.

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



72 73


with the guidelines, Directors and key staff of the Group who have access to price-sensitive and confidential information

are not permitted to deal in the Company’s securities during the periods commencing two weeks before the

announcement of the Group’s first and third quarter financial results and one month before the announcement of the

Group’s half year and full year financial results, and ending on the date of the announcement of such results respectively,

or when they are in possession of unpublished price-sensitive information on the Group. A system of reporting of

securities dealings by Directors to the Company Secretary and by key staff to the Head of Human Resources Division,

has also been established to effectively monitor the dealings of these parties in the securities of the Company.

DIRECTORS’ ATTENDANCE RECORD FOR BOARD AND BOARD COMMITTEE MEETINGS

Executive Audit Nominating Remuneration Name Board Committee Committee Committee Committee

Lim Chin Beng (Chairman) 6 out of 6 8 out of 8 – 3 out of 3 4 out of 4Cham Tao Soon (Dy Chairman)[appointed on 1.3.04] 3 out of 3 5 out of 5 – – –Chan Heng Loon Alan (CEO) 6 out of 6 8 out of 8 – 3 out of 3 –Willie Cheng[appointed on 1.3.04] 3 out of 3 – 2 out of 2 – –Cheong Choong Kong 5 out of 6 – 3 out of 4 – –Michael Y.O. Fam 6 out of 6 8 out of 8 – 3 out of 3 4 out of 4Lee 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 4Philip Pillai[appointed on 5.12.03] 5 out of 5 – – – 3 out of 3Sum Soon Lim[appointed on 5.12.03] 5 out of 5 – 3 out of 3 – –Tang I–Fang 6 out of 6 – 4 out of 4 – –Yeo Ning Hong 6 out of 6 – – – 4 out of 4Lee Hee Seng[up to 5.12.03] 1 out of 1 – – 1 out of 1 1 out of 1Wee 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.

BOARD AND BOARD COMMITTEES MEMBERSHIP

Main Executive Audit Nominating Remuneration Name of Director Board Committee Committee Committee Committee

IndependentLim Chin Beng Chairman Chairman – Member MemberCham Tao Soon Deputy(appointed on 1.3.2004) Chairman Member – – –Willie Cheng Jue Hiang(appointed on 1.3.2004) Member – Member – –Cheong Choong Kong Member – Member – –Michael Y.O. Fam Member Member – Chairman ChairmanLee Ek Tieng Member – Member Member1

Ngiam Tong Dow Member Member Member2 Member MemberPhilip Pillai(appointed on 5.12.2003) Member – – – MemberSum Soon Lim(appointed on 5.12.2003) Member – Member – –Tang I-Fang Member – Chairman – –Yeo Ning Hong Member – – – MemberLee Hee Seng(retired on 5.12.2003) Member – – Member MemberWee Cho Yaw(retired on 5.12.2003) Member – – – –

ExecutiveChan Heng Loon Alan Member Member – Member3 –Lim Kim San – Member4 – – –

Notes:1. Mr Lee Ek Tieng was appointed to the Nominating Committee on 5.12.2003.

2. Mr Ngiam Tong Dow resigned from the Audit Committee on 5.12.2003.

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.

4. Mr Lim Kim San is a non-director member of the Executive Committee.



T H E E N D G A M E

“There are many moves but only

one checkmate.”

– Russian proverb.


Segmental Operating Revenue

Year

Year

Newspapers & Magazines

0

S$M

800

825

850

750

775

725

700

200420032002

Property

200420032002

S$M

0

65

70

80

85

75

60

50

55

45

40

Year

Broadcasting & Multimedia

200420032002

S$M

0

65

70

80

85

75

60

50

55

45

40

7776

2004 2003 2002 2001 2000S$’000 S$’000 S$’000 S$’000 S$’000

Assets

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

Shareholders’ Interests

Capital and reserves 1,479,119* 2,247,736 2,241,538 2,289,931 2,414,126

Liabilities

BorrowingsCurrent 81,000 52,900 25,000 183,500 –Non–current 683,000 740,000 770,000 550,000 568,587

Trade creditors 64,860 58,049 59,526 40,367 66,254Taxation

Current 81,112 68,712 51,204 92,820 142,798Deferred 72,126 85,199 83,287 73,226 52,900

Other liabilities 130,663 115,649 122,114 192,180 185,303Total 2,591,880 3,368,245 3,352,669 3,422,024 3,429,968

* 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.

F I N A N C I A L R E V I E W

G R O U P S I M P L I F I E D F I N A N C I A L P O S I T I O N

F I N A N C I A L R E V I E W ( C O N T ’ D )


Return on Shareholders’ Funds and Return on Assets

Year

%

0

5

10

20

25

30

1988 1989 1990 1991 1992 1993 1995 1996 1998 1999 2000 2001 2002 2003 20041994 19971988 1989 1990 1991 1992 1993 1995 1996 1998 1999 2000 2001 2002 2003 20041994 1997

15

35

40

Return on Shareholders’ Funds Return on Assets

Operating Margin and Return on Operating Revenue

Year

%

0

10

20

40

50

60

1988 1989 1990 1991 1992 1993 1995 1996 1998 1999 2000 2001 2002 2003 20041994 19971988 1989 1990 1991 1992 1993 1995 1996 1998 1999 2000 2001 2002 2003 20041994 1997

30

70

Operating Margin Return on Operating Revenue

79

Year

S$

0.05

0.10

0.15

0.20

0.25

0.30

1988 1989 1990 1991 1992 1993 1995 1996 1998 1999 2000 2001 2002 2003 20041994 19971988 1989 1990 1991 1992 1993 1995 1996 1998 1999 2000 2001 2002 2003 20041994 1997

0.35

# 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.

Earnings Per Share #

0.40

0

Year

400

450

500

550

600

After-Tax Profit

S$’M

0

50

100

150

200

250

300

1988 1989 1990 1991 1992 1993 1995 1996 1998 1999 2000 2001 2002 2003 20041994 1997

350

78

F I N A N C I A L R E V I E W ( C O N T ’ D ) F I N A N C I A L R E V I E W ( C O N T ’ D )


Year

S$

0.05

0.10

0.15

0.20

0.25

0.30

1988 1989 1990 1991 1992 1993 1995* 1996 1998 1999 2001 2002* 2003* 2004*1994 1997

0.35

* 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.

Gross Dividend per Share #

0.40

0 2000*

Year

S$’M

0

50

100

150

200

250

300

1988 1989 1990 1991 1992 1993 1995* 1996 1998 1999 2000* 2001 2002* 2003* 2004*1994 1997

* 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 perS$1 share in FY 2003 and 11.25 cents per 20 cents share in FY 2004.

350

400

450

500

Net Dividend

81

FY2004

39%

30%

19%

8%

4%

Cost Composition

FY2003

29%

21%

8%

4%

38%

Depreciation

Other Operating Expenses

Finance Costs

Materials, Consumables & Broadcasting Costs

Staff Costs

Advertisements FY 2004 FY 2003

– Display 40% 40%

– Classified,Recruit & Notices 23% 24%

– Magazines 1% 1%

– Broadcasting & Multimedia 4% 5%

Revenue Composition

FY2003

68%

20%

8%

4%

FY2004

Circulation

Rental & Services

Others

70%

20%

6%

4%


80



83

2004 2003

1st Half 2nd Half Full Year 1st Half 2nd Half Full YearS$’000 S$’000 S$’000 S$’000 S$’000 S$’000

Operating revenue 468,418 501,657 970,075 457,695 440,121 897,816

Profit from operations 175,548 162,401 337,949 146,628 144,268 290,896

Profit before exceptional items 201,417 370,097 571,514 166,530 150,614 317,144

Profit before taxation 201,417 398,774 600,191 302,323 136,581 438,904

Profit attributable to shareholders 173,024 373,258 546,282 273,472 105,264 378,736

Earnings per S$0.20 share (S$)* 0.09 0.22 0.31 0.15 0.05 0.20

* Comparatives for FY 2003 were adjusted for Share Split Exercise completed in FY 2004.


G R O U P H A L F - Y E A R L Y R E S U L T S

82

2004 2003S$’000 S$’000

Sale of goods and services 970,075 897,816Purchase of materials and services (293,953) (276,561)Value added from operations 676,122 621,255

Non-production income and expenses:Foreign exchange differences 602 639Loss on disposal of fixed assets (305) (403)Provision for doubtful trade debts (1,644) (2,118)Bad trade debts recovered 144 202Investment income 258,017 39,584Share of net (losses)/profits of associates (249) 10,990Exceptional items 28,677 121,760

Total value added 961,364 791,909

Distribution:Employees’ wages, provident fund contributions

and other benefits 271,357 249,494Corporate and other taxes 62,776 63,472Interest paid 24,203 24,326Donation and sponsorship* 4,276 21,128Directors’ fees 790 702Net dividends to shareholders 290,992 375,058

Total distributed 654,394 734,180

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

961,364 791,909

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

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


V A L U E A D D E D S T A T E M E N T


T H E P I E C E S

O N T H E B O A R D

“Tactics flow from a

superior position.”

– Bobby Fischer (b.1943).


8 8D I R E C T O R S ’ R E P O RT

9 4S TAT E M E N T B Y D I R E C T O R S

9 5A U D I T O R S ’ R E P O RT

9 6A U D I T E D F I N A N C I A L S TAT E M E N T S

9 6B A L A N C E S H E E T S

9 7C O N S O L I D AT E D I N C O M E S TAT E M E N T

9 8C O N S O L I D AT E D S TAT E M E N T O F C H A N G E S I N S H A R E H O L D E R S ’ E Q U I T Y

9 9C O N S O L I D AT E D C A S H F L O W S TAT E M E N T

1 0 2N O T E S T O T H E F I N A N C I A L S TAT E M E N T S

1 4 4 S H A R E H O L D I N G S TAT I S T I C S

1 4 9 O V E R S E A S B U R E A U S

1 5 2P R O P E RT I E S O F T H E G R O U P

1 5 3 C O R P O R AT E I N F O R M AT I O N

F I N A N C I A L C A L E N D A R

1 5 4 N O T I C E O F A N N U A L G E N E R A L M E E T I N G

1 6 0 P R O X Y F O R M

F I N A N C I A L R E P O R T A N D M I S C E L L A N E O U S

SPH-Financial 3/11 11/9/04 2:03 PM Page 86

89

D I R E C T O R S ’ R E P O R TF O R T H E Y E A R E N D E D A U G U S T 3 1 , 2 0 0 4

88


The Directors present their report together with the audited financial statements of the Group and balance sheet of the Company for the yearended August 31, 2004.

Directors

1. The Directors in office at the date of this report are:Lim Chin BengCham Tao Soon* Chan Heng Loon AlanWillie Cheng Jue Hiang*Cheong Choong KongMichael Fam Yue OnnLee Ek TiengNgiam Tong DowPhilip N Pillai #

Sum Soon Lim #

Tang I-FangYeo Ning Hong

* Appointed on March 1, 2004# Appointed on December 5, 2003

Arrangements to enable Directors to acquire Benefits2. 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 bodycorporate, except as disclosed under ‘Share Options in the Company’ in paragraphs 7 and 8.

Directors’ Interests in Shares 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:

Direct Interests Deemed Interests

Sept 1, Aug 31, Sept 21, Sept 1, Aug 31, Sept 21,

2003# 2004^ 2004^ 2003# 2004^ 2004^

The Company

Management Shares

Lim Chin Beng 1 4 4 – – –

Cham Tao Soon 1 4 4 – – –

Chan Heng Loon Alan 2 4 4 – – –

Willie Cheng Jue Hiang 1 4 4 – – –

Cheong Choong Kong 1 4 4 – – –

Michael Fam Yue Onn 1 4 4 – – –

Lee Ek Tieng 1 4 4 – – –

Ngiam Tong Dow 1 4 4 – – –

Philip N Pillai 1 4 4 – – –

Sum Soon Lim 1 4 4 – – –

Tang I–Fang 1 4 4 – – –

Yeo Ning Hong 1 4 4 – – –

Ordinary Shares

Cham Tao Soon – – – 2,396 10,183 10,183

Willie Cheng Jue Hiang 2,000 8,500 8,500 3,000 12,750 12,750

Cheong Choong Kong 8,000 34,000 34,000 1,000 8,500 8,500

Michael Fam Yue Onn 50,000 212,500 212,500 – – –

Philip N Pillai 4,000 17,000 17,000 – – –

Yeo Ning Hong 7,920 33,660 33,660 12,870 54,697 54,697

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.


91


90


Directors’ Contractual Benefits4. Since the end of the previous financial year, no Director has received or become entitled to receive a benefit under a contract which

is required to be disclosed by Section 201(8) of the Companies Act, Chapter 50.

Material Contracts5. 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 sincethe end of the previous financial year.

Share Split and Capital Reduction6. (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:

(i) Subdivision of each share of S$1 in the capital of the Company into five shares of S$0.20 each, and

(ii) A capital reduction of approximately 15% of the issued share capital of the Company held by shareholders in proportion to their shareholding in the Company, and making a cash distribution to the shareholders of S$3.82 for each subdividedshare cancelled.

(b) The Share Split and Capital Reduction Exercises were completed on June 24, 2004. Immediately after the Share Split Exercise,the number of subdivided ordinary and management shares in issue was 1,842,496,340 and 18,838,830 respectively.

(c) Arising from the Capital Reduction Exercise, the number of subdivided ordinary and management shares in issue was reduced by276,375,844 and 2,825,831 respectively. The issued share capital of the Company, immediately after the Capital ReductionExercise, comprised 1,566,120,496 subdivided ordinary shares and 16,012,999 subdivided management shares.

Share Options in the CompanySingapore Press Holdings Group Executives’ Share Option Scheme (“1990 Scheme”)

7. (a) The 1990 Scheme was approved by shareholders on December 28, 1990 and modified pursuant to ordinary resolutions passedby shareholders at Extraordinary General Meetings held on January 7, 1995, January 6, 1996 and July 16, 1999 respectively.

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

(ii) The persons to whom the options have been granted do not have the right to participate, by virtue of the options, in anyshare 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 1990 Scheme.

(d) Under the 1990 Scheme, no more options remain outstanding as at August 31, 2004.

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

1990 Scheme.

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

(c) During the financial year, options were granted for a total of 3,556,000 ordinary shares of S$1 each, details of which are as follows:

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

Total No. ofOrdinary Shares

of S$1 eachCategory No. of Persons under Options granted

Executive Director 1 150,000Employee 1,512 3,391,500Associate 1 14,500

1,514 3,556,000


93


92


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

(iii) The persons to whom the options have been granted do not have the right to participate, by virtue of the options, in any shareissue of any other company.

(d) The aggregate number of options granted since the commencement of the 1999 Scheme on July 16, 1999 to August 31, 2004 is16,273,400 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.

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 in Note 3 to the financial statements.

Share Options in SubsidiariesSPH MediaWorks Pre-IPO Share Option Scheme (“MediaWorks Pre-IPO Scheme”)

10. (a) The MediaWorks Pre-IPO Scheme was approved on February 12, 2001.

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

(ii) The persons to whom the options have been granted do not have the right to participate, by virtue of the options, in any shareissue of any other company.

(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 toAugust 31, 2004 is 65,026,000.

11. No shares of SPH MediaWorks Ltd have been issued during the financial year by virtue of the exercise of options to take up unissuedshares.

12. At the end of the financial year, unissued ordinary shares of SPH MediaWorks Ltd under option pursuant to the MediaWorks Pre-IPOScheme were as follows:

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

Feb 23, * S$0.10 29,050,000 – (3,610,000) 25,440,0002001

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

Other Subsidiaries13. No option to take up unissued shares of other subsidiaries has been granted during the financial year.

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.

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

Audit Committee16. The Audit Committee carried out its functions in accordance with Section 201B(5) of the Companies Act, Chapter 50, and the

Singapore Exchange Listing Manual.

Its functions include reviewing the audit plans and audit reports of the internal and external auditors, the auditors’ evaluation of theinternal accounting controls, and the scope and adequacy of the internal audit function; reviewing the balance sheet of the Company

and financial statements of the Group before submitting them to the Board for approval; reviewing any interested person transaction;and reviewing the independence, objectivity and cost effectiveness of the external auditors and the nature and extent of non-audit services supplied by them.

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

On behalf of the Directors

Lim Chin Beng Michael Fam Yue OnnChairman Director

Singapore, October 11, 2004


9594

A U D I T O R S ' R E P O R TT O T H E M E M B E R S O F S I N G A P O R E P R E S S H O L D I N G S L I M I T E D

We have audited the balance sheet of Singapore Press Holdings Limited and the consolidated financial statements of the Group for thefinancial year ended August 31, 2004 set out on pages 96 to 143. These financial statements are the responsibility of the Company’s directors.Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with Singapore Standards on Auditing. Those Standards require that we plan and perform our auditto obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a testbasis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by the directors, as well as evaluating the overall financial statement presentation. Webelieve that our audit provides a reasonable basis for our opinion.

In our opinion,(a) the accompanying balance sheet of the Company and the consolidated financial statements of the Group are properly drawn up in

accordance with the provisions of the Singapore Companies Act, Cap 50 (“the Act”) and Singapore Financial Reporting Standards soas 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, changesin equity and cash flows of the Group for the financial year ended on that date; and

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

PricewaterhouseCoopersCertified Public Accountants


S T A T E M E N T B Y D I R E C T O R S

In the opinion of the Directors,

(a) the balance sheet of the Company and the financial statements of the Group for the year ended August 31, 2004 are drawn up so as to exhibit a true and fair view of:

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

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

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

On behalf of the Directors

Lim Chin Beng Michael Fam Yue OnnChairman Director



9796

C O N S O L I D A T E D I N C O M E S T A T E M E N TF O R T H E Y E A R E N D E D A U G U S T 3 1 , 2 0 0 4

GROUPNote 2004 2003

S$’000 S$’000

Operating revenue 21Newspaper and magazine 833,202 789,382Broadcasting and multimedia 54,301 55,734Property 82,572 52,700

970,075 897,816Other operating income 11,353 8,816

981,428 906,632Materials, consumables & broadcasting costs (202,596) (185,989)Staff costs 22 (262,369) (240,758)Depreciation 7 (51,685) (53,652)Other operating expenses (126,829) (135,337)Profit from operations 23 337,949 290,896Finance costs 24 (24,203) (24,326)Net income from investments 25 258,017 39,584Share of net (losses)/profits of associates (249) 10,990Profit before exceptional items 571,514 317,144Exceptional items 26 28,677 121,760Profit before taxation 600,191 438,904Taxation 5c (53,914) (59,769)Profit after taxation 546,277 379,135Minority interests 5 (399)Profit attributable to shareholders 546,282 378,736

Earnings per S$0.20 share (S$)Before exceptional items – Basic 28 0.29 0.14

– Diluted 0.29 0.14

After exceptional items – Basic 0.31 0.20– Diluted 0.31 0.20

The accompanying notes form part of these financial statements.

A U D I T E D F I N A N C I A L S T A T E M E N T SB A L A N C E S H E E T S A S A T A U G U S T 3 1 , 2 0 0 4

GROUP COMPANYNote 2004 2003 2004 2003

S$’000 S$’000 S$’000 S$’000

CAPITAL EMPLOYEDShare capital 3 316,527 369,557 316,527 369,557Share premium 62,319 27,301 62,319 27,301Capital redemption reserve 4,509 4,509 4,509 4,509Capital reserve 4 2,005 2,005 – –Retained profit 1,093,755 1,843,587 883,559 1,776,944

1,479,115 2,246,959 1,266,914 2,178,311Exchange translation difference 4 777 – –Shareholders’ interests 1,479,119 2,247,736 1,266,914 2,178,311Minority interests 518 1,108 – –

1,479,637 2,248,844 1,266,914 2,178,311Non–current liabilities

Deferred taxation 5a 72,126 85,199 59,210 69,539Borrowings 6 683,000 740,000 – –

2,234,763 3,074,043 1,326,124 2,247,850

EMPLOYMENT OF CAPITALProperty, plant and equipment 7 565,531 633,856 342,668 365,671Investment property 8 1,045,852 1,039,754 – –Interests in subsidiaries 9 – – 1,009,749 1,827,554Interests in associates 10 928 186 – –Long–term investments 11 174,415 269,224 36,002 36,002Other non–current assets 12 5,051 4,916 4,900 4,781

Current assetsStocks 13 32,278 54,763 23,208 37,268Prepaid content rights 14 – 22,227 – –Trade debtors 15 86,435 85,352 76,634 76,930Other debtors and prepayments 16 15,130 14,181 5,904 4,546Short–term investments 17 473,639 915,610 – –Cash on deposit 166,093 297,020 8,222 41,493Cash and bank balances 26,528 31,156 19,699 20,595

800,103 1,420,309 133,667 180,832

Current liabilitiesTrade creditors 64,860 58,049 34,784 32,206Other creditors and accrued liabilities 18 130,145 114,541 106,670 80,901Borrowings 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) 13,8422,234,763 3,074,043 1,326,124 2,247,850



9998

C O N S O L I D A T E D C A S H F L O W S T A T E M E N TF O R T H E Y E A R E N D E D A U G U S T 3 1 , 2 0 0 4

GROUP2004 2003

S$’000 S$’000

CASH FLOWS FROM OPERATING ACTIVITIES

Profit before taxation 600,191 438,904

Adjustments for:Depreciation 51,685 53,652Loss on disposal of property, plant and equipment 305 403Finance costs 24,203 24,326Investment income (258,017) (39,584)Share of net losses/(profits) of associates 249 (10,990)Exceptional items (28,677) (121,760)

Operating cash flow before working capital changes 389,939 344,951

Changes in working capital:Stocks 7,750 (7,718)Prepaid content rights (2,927) (7,952)Debtors 1,258 7,098Creditors 22,307 (8,341)

418,327 328,038Income tax paid (54,587) (40,349)Dividends paid (290,992) (375,058)Dividends paid (net) by a subsidiary to a minority shareholder (108) –

72,640 (87,369)(Increase)/Decrease in non–current assets (135) 94Net cash from/(used in) operating activities 72,505 (87,275)

C O N S O L I D A T E D S T A T E M E N T O F C H A N G E S I N S H A R E H O L D E R S ’ E Q U I T YF O R T H E Y E A R E N D E D A U G U S T 3 1 , 2 0 0 4

GROUPCapital Exchange

Share Share Redemption Capital Retained TranslationCapital Premium Reserve Reserve Profit Difference TotalS$’000 S$’000 S$’000 S$’000 S$’000 S$’000 S$’000

Balance as atSeptember 1, 2003 369,557 27,301 4,509 2,005 1,843,587 777 2,247,736

Exchange translation difference – – – – – (773) (773)

Gains not recognised inthe income statement – – – – – (773) (773)

Profit for the financial year – – – – 546,282 – 546,282Issue of shares (Note 3) 2,810 – – – – – 2,810Premium on issue of shares – 40,602 – – – – 40,602Capital reduction (Note 3)# (55,840) (5,584) – – (1,005,122) – (1,066,546)Dividends (Note 27) – – – – (290,992) – (290,992)Balance as at August 31, 2004 316,527 62,319 4,509 2,005 1,093,755 4 1,479,119

Balance as atSeptember 1, 2002 369,697 15,374 3,459 2,005 1,857,878 (6,875) 2,241,538

Exchange translation difference – – – – – 7,652 7,652

Gains not recognised inthe income statement – – – – – 7,652 7,652

Profit for the financial year – – – – 378,736 – 378,736Issue of shares (Note 3) 910 – – – – – 910Premium on issue of shares – 11,927 – – – – 11,927Share 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.



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C O N S O L I D A T E D C A S H F L O W S T A T E M E N T ( C O N T ’ D )F O R T H E Y E A R E N D E D A U G U S T 3 1 , 2 0 0 4

GROUP2004 2003

S$’000 S$’000

CASH FLOWS FROM FINANCING ACTIVITIES

Capital reduction (1,066,546) –Proceeds on issue of shares by Company 43,412 12,837Share buy back – (17,969)Repayment of bank loans (65,400) (6,500)Proceeds from bank loans 36,500 4,400Finance costs (24,203) (24,326)Net cash used in financing activities (1,076,237) (31,558)

Net decrease in cash and cash equivalents (135,555) (59,352)Cash and cash equivalents at beginning of year 328,176 387,528Cash and cash equivalents at end of year [Note (a)] 192,621 328,176

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

Cash on deposit* 166,093 297,020Cash and bank balances 26,528 31,156

192,621 328,176

* 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

31, 2004 range between 0.57% to 1.63% (2003: 0.15% to 2.06%).


C O N S O L I D A T E D C A S H F L O W S T A T E M E N T ( C O N T ’ D )F O R T H E Y E A R E N D E D A U G U S T 3 1 , 2 0 0 4

GROUP2004 2003

S$’000 S$’000

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of property, plant and equipment (33,109) (26,984)Proceeds on disposal of property, plant and equipment 118,705 184Additions to investment property (6,098) (30,216)Acquisition of interests in associates and subsidiaries (4,794) (1,540)Amounts owing to associates 19 9Loan to associate – (350)Partial disposal of interests in an associate – 277,079Proceeds on completion of liquidation of subsidiaries

and an associate – 1,794Purchase of long–term investments (5,089) (1,908)Proceeds on disposal/redemption of long–term investments 105,205 21,954Purchase of short–term investments (532,310) (705,564)Proceeds on disposal of short–term investments 1,021,045 569,449Net increase in funds under management (32,806) (100,103)Investment income 258,017 49,534

888,785 53,338Add/(Less): Items not involving movement of funds

Provision for diminution in value of internally–managed investments 4,090 18,552Profit on sale of internally–managed investments (25,025) (13,625)Exchange translation gain (773) –Accretion of discount on bonds (21) (57)Amortisation of premium on bonds 1,121 1,273

Net cash from investing activities 868,177 59,481


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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S ( C O N T ’ D )A U G U S T 3 1 , 2 0 0 4

(d) Foreign currency translation(i) Measurement currency

Items included in the financial statements of each entity in the Group are measured using the currency that best reflects theeconomic 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 themeasurement currency of the Company.

(ii) Transactions and balancesForeign currency transactions are translated into the measurement currency using the exchange rates prevailing at the date oftransactions. Any foreign exchange gains and losses resulting from the settlement of such transactions are recognised in theincome statement.

Foreign currency monetary assets and liabilities are translated into Singapore dollars at the rates of exchange prevailing at thebalance sheet date. Exchange differences arising are taken to the income statement.

(iii) Group companiesIn respect of foreign entities whose operations are not an integral part of the Company’s operations, the balance sheets are translated into Singapore dollars at the exchange rates prevailing at the balance sheet date, and the results are translated using the average monthly exchange rates for the financial year. The exchange differences arising on translation are taken directly tothe 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.

In respect of foreign entities whose operations are integral to those of the Company, all monetary assets and liabilities are translated into Singapore dollars at the exchange rates prevailing at the balance sheet date. All non-monetary assets andliabilities are recorded at the exchange rates when the relevant transactions occurred, and the results are translated using the average monthly exchange rates for the financial year. The exchange differences arising are taken to the consolidatedincome statement.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as non-monetary foreign currencyassets and liabilities of the acquirer and recorded at the exchange rate at the date of the transaction.

(e) Goodwill on ConsolidationGoodwill on consolidation, representing the difference between the cost of acquisition of a subsidiary or an associate over the fair value of net identifiable assets acquired, is amortised on a straight-line basis in the consolidated income statement over its economicuseful life up to a maximum of 20 financial years. Goodwill assessed as having no continuing economic value is written off to the consolidated income statement.

(f) Deferred TaxationDeferred tax liabilities are provided in full, using the liability method, on temporary differences arising between the tax bases ofassets 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.

N O T E S T O T H E F I N A N C I A L S T A T E M E N T SA U G U S T 3 1 , 2 0 0 4

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

1. GeneralThe Company is incorporated and domiciled in Singapore.

The principal activities of the Group consist of:(a) publishing, printing and distributing newspapers,(b) publishing and distributing magazines,(c) providing broadcasting and multimedia services,(d) holding investments, and(e) holding and managing properties.

The principal activities of the Company consist of:(a) publishing, printing and distributing newspapers,(b) distributing magazines,(c) providing multimedia content and services,(d) holding shares in subsidiaries,(e) holding investments, and(f) providing management services to subsidiaries.

2. Significant Accounting Policies(a) Effect of changes in Singapore Companies Legislation

Pursuant to the Singapore Companies (Amendment) Act 2002, with effect from financial year commencing on or after January 1, 2003,Singapore-incorporated companies are required to prepare and present their statutory accounts in accordance with the SingaporeFinancial Reporting Standards ("FRS"). Hence, these financial statements, including the comparative figures, have been prepared inaccordance with FRS.

Previously, the Company and the Group prepared their statutory accounts in accordance with Singapore Statements of AccountingStandard. The adoption of FRS does not have material impact on the accounting policies and figures presented in the statutory accounts for financial year ended August 31, 2003.

(b) Basis of PreparationThe financial statements are prepared in accordance with the historical cost convention.

(c) Basis of ConsolidationThe 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 consolidatedincome statement from the date of their acquisition or disposal. Inter-company balances and transactions are eliminated on consolidationand the consolidated financial statements reflect external transactions only.


105104


adjusted for amortisation of premium and accretion of discount and diminution in value. Where cost of these investments exceedsrealisable value, provision is made for diminution in value which is other than temporary, determined on an individual basis.

Short-term investments are stated at the lower of cost and realisable value on an individual basis.

Dividend income from investments other than subsidiaries is recognised on a cash basis and interest income on an accrual basis.

Dividend income from subsidiaries is recognised in the accounting period in which it is declared.

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

(k) Investment PropertiesInvestment properties are held for the primary purpose of producing rental income and are not held for resale in the ordinary courseof business.

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 theincome statement.

Cost of investment properties includes capitalisation of interest incurred on borrowings for the purchase, renovation and extensionof the investment properties while these activities are in progress. For this purpose, the interest rates applied to funds provided forthe development are based on the actual interest rates payable on the borrowings for such development.

(l) StocksStocks comprise raw materials and consumable stores, acquired content rights and production cost of programmes.

(i) Raw materials and consumable storesThese are stated at cost less provision for obsolete, slow moving and defective stocks.

Cost includes transport and handling costs, and any other directly attributable costs. Cost is determined on the weightedaverage or specific identification basis.

(ii) Acquired content rightsPrepaid content rights are reported as acquired content rights when the license period commences and materials have beenreceived.

The cost of acquired content rights is the gross amount paid for such rights.

(iii) Production cost of programmesProduction cost includes costs incurred on own production, commissioned works and co-produced programmes.

Cost of own production comprises direct labour, material cost and allocated overheads capitalised based on the normal level ofactivity during the term of production.

Commissioned works are stated at cost.


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

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

(ii) Depreciation is calculated to write off the cost on a straight-line basis over the expected useful lives of the assets. The estimateduseful lives for this purpose are:

Freehold buildings 30 yearsLeasehold land and buildings 30 years or life of lease if less than 30 yearsPlant and equipment 3 – 20 yearsFurniture and fittings 5 – 10 yearsMotor vehicles 3 – 5 years

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

(iv) It is not the Group's policy to revalue property, plant and equipment at regular intervals.

(v) The carrying amounts of the Group's assets are reviewed at each balance sheet date to determine whether there is any indicationof impairment. If such indication exists, the asset's recoverable amount is estimated. An impairment loss is recognised wheneverthe carrying amount of the asset exceeds its recoverable amount. The impairment loss is charged to the income statement.

(h) SubsidiariesInterests in subsidiaries are included in the Company's balance sheet at cost less impairment losses. Where an indication ofimpairment exists, the carrying amount of the investment is assessed and written down to its recoverable amount if lower. Theimpairment loss is charged to the income statement.

(i) AssociatesThese are companies (not being subsidiaries) in which the Group has a substantial interest of not less than 20% of the equity and/orin whose financial and operating policy decisions the Group exercises significant influence.

The Group’s share of the results of associates is included in its consolidated income statement. The Group’s share of the post-acquisition retained profits and reserves or accumulated losses of associates is added to or deducted from the cost of theseinvestments in the consolidated balance sheet.

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

Where an indication of impairment exists, the carrying amount of the investment is assessed and written down to its recoverableamount if lower. The impairment loss is charged to the income statement.

(j) InvestmentsLong-term investments in equity are stated at cost less diminution in value. Long-term investments in bonds are stated at cost,


107106


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

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

Revenue from rental and rental-related services is recognised on an accrual basis.

The policies relating to the recognition of revenue from investments are set out in Note 2(j) above.

(s) LeasesWhen the Group is the lessee:Leases where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases.Payments made under operating leases are taken to the income statement on a straight-line basis over the period of the lease.

When the Group is the lessor:Assets leased out under operating leases are included in investment properties and are stated at cost less impairment losses and notdepreciated. Rental income is recognised on a straight-line basis over the lease term.

(t) Financial Risk ManagementThe Group's activities expose it to a variety of financial risks, particularly interest rate, currency, market, liquidity and credit risks. The Group's risk management policies seek to, where appropriate, minimise potential adverse effects of these risks on the financialperformance of the Group. The policies for managing these risks are summarised below.

(i) Interest rate riskThe 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 suchbalances on varying maturities and interest rate terms.

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

(ii) Currency riskThe currency risk of the Group arises mainly from its operational purchases of raw materials and consumable stores, capital expenditure and acquired content rights. The currency risk of the Group also arises from its foreign currency cash deposits,bondsand equity investments, and from costs incurred by its overseas news bureaus. In addition, the Group also has investments inforeign subsidiaries and associated companies, whose net assets are exposed to currency risk.

Where appropriate, the Group hedges against its currency risk resulting from anticipated sale and purchase transactions inforeign currencies, and foreign currency exposure of the net assets of its foreign subsidiaries and associated companies.


Co-produced programmes are stated at cost less billings to co-producers.

Acquired content rights and production cost of programmes are expensed to the income statement based on the estimated numberof showings and the ratio that the current year's revenue bears to the anticipated total gross revenue from the exploitation of the films.

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 wherethe unamortised cost of each title exceeds the estimated realisable value. Such provisions are charged to the income statement.

(m) Prepaid Content RightsAdvanced payments made for content rights for which the license period has not commenced or the materials have not been received,are classified as prepaid content rights.

Prepaid content rights are valued at the lower of cost and estimated net realisable value. The carrying amounts are reviewed at eachbalance sheet date. Provisions are made where the carrying amount exceeds the estimated realisable value. Such provisions are charged to the income statement.

Provisions are also made where it is unlikely that content rights acquired under such payments would be used during its license period.Such provisions are charged to the income statement.

(n) DebtorsBad debts are written off and specific provision is made for those debts considered to be doubtful. In addition, a general provision ismade on the balance of trade debtors to cover any unexpected losses which have not been specifically identified.

(o) DividendsDividends on the Company's shares are recognised in equity in the period in which they are declared.

(p) Employee Benefits(i) Short-term employee benefits

All short-term employee benefits, including accumulated compensated absences, are recognised in the income statement in theperiod in which the employees render their services to the Group.

(ii) Equity compensation benefitsThe stock option programme allows selected employees of the Company and/or its subsidiaries including Executive Directors of the Company, and other selected participants, to subscribe for ordinary shares in the Company. No compensation cost or obligation is recognised. When the options are exercised, the proceeds received are credited to share capital (nominal value) and share premium.

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


109108


3. Share Capital2004 2003

Number Numberof Shares of Shares

‘000 S$’000 ‘000 S$’000

AuthorisedManagement shares of S$0.20 (2003: S$1) each 50,000 10,000 10,000 10,000Ordinary shares of S$0.20 (2003: S$1) each 4,950,000 990,000 990,000 990,000

5,000,000 1,000,000 1,000,000 1,000,000

Issued and fully paidManagement shares of S$0.20 (2003: S$1) each 16,018 3,204 3,740 3,740Ordinary shares of S$0.20 (2003: S$1) each 1,566,617 313,323 365,817 365,817

1,582,635 316,527 369,557 369,557

Movements during the financial year were:Opening balance 369,557 369,557 369,697 369,697Issue of ordinary shares of S$1 each fully paid

under the Singapore Press Holdings GroupExecutives’ Share Option Scheme and SingaporePress Holdings Group (1999) Share Option Scheme 2,683 2,683 901 901

Issue of management shares of S$1 each fully paidin accordance with the Newspaper and PrintingPresses Act 27 27 9 9

Cancellation of ordinary shares of S$1 each underthe 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 ShareSplit Exercise 1,861,335 372,267 369,557 369,557

Cancellation of ordinary shares of S$0.20 eachunder the Capital Reduction Exercise (276,376) (55,275) – –

Cancellation of management shares of S$0.20each under the Capital Reduction Exercise (2,826) (565) – –

Issue of ordinary shares of S$0.20 each fully paidunder the Singapore Press Holdings Group (1999)Share Option Scheme 497 99 – –

Issue of management shares of S$0.20 each fully paidin accordance with the Newspaper and PrintingPresses Act 5 1 – –

Closing balance 1,582,635 316,527 369,557 369,557


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

The fluctuations in market prices due to the above factors are unforeseen and the Group monitors these changes to respond tothem as and when appropriate and necessary.

(iv) Liquidity riskIn the management of liquidity risk, the Group monitors and maintains a level of cash and cash equivalents to finance the Group'soperations and mitigate the effects of fluctuation in cash flows.

(v) Credit riskThe Group manages its credit risk through the application of credit approvals, credit limits and monitoring procedures. Where appropriate, the Group obtains collateral in the form of bankers’/insurance guarantees from its customers, and imposes cashterms and/or advance payments from customers of lower credit standing.

As at the balance sheet date, the Group has no significant concentration of credit risks.


111110


4. Capital Reserve

GROUP2004 2003

S$'000 S$'000

Capital reserve is made up as follows:Distributable 1,375 1,375Non-Distributable 630 630

2,005 2,005

5. Taxation(a) Deferred Taxation

The movements in the Group’s deferred tax assets and liabilities (prior to offsetting of balances within the same tax jurisdiction) during the year are as follows:

2004GROUP(i) Deferred Tax Liabilities

AcceleratedTax

Depreciation Others TotalS$’000 S$’000 S$’000

Opening balance 92,368 2,876 95,244Credited to income statement (14,082) (207) (14,289)Closing balance 78,286 2,669 80,955

(ii) Deferred Tax AssetsProvisions

S$’000

Opening balance (10,045)Charged to income statement 1,216Closing balance (8,829)


3. Share Capital (cont'd)Details of the unissued shares of the Company under option at the end of the financial year are as follows:

Singapore Press Holdings Group Executives’ Share Option Scheme (“1990 Scheme”)

Date of Expiry Exercise Balance Options Options BalanceGrant Date Price(a) 1.9.03 Exercised Cancelled 31.8.04

Nov 17, 1998 Nov 17, 2003 S$14.51 655,179 (655,149) (30) –655,179 (655,149) (30) –

(a) Exercise price was adjusted as a result of bonus shares issued during the financial year 1998, and the capital reduction exercises during the financial years 1999 and 2002.

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

Date of Expiry Exercise Balance Options Options BalanceGrant Date Price(a) 1.9.03(b) Exercised Cancelled 31.8.04 (c)

Oct 27, 1999 Oct 27, 2009 S$5.60 11,254,425 – (920,550) 10,333,875Oct 30, 2000 Oct 30, 2010 S$4.78 12,968,025 – (1,742,500) 11,225,525Nov 6, 2001 Nov 6, 2011 S$3.03 13,506,075 (9,112,050) (11,050) 4,382,975Oct 28, 2002 Oct 28, 2012 S$3.91 13,696,475 – (251,175) 13,445,300Dec 16, 2003 Dec 16, 2013 S$3.69 15,028,000 – (168,725) 14,859,275Feb 1, 2004 Feb 1, 2014 S$3.83 85,000 – – 85,000

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 options granted between 1999 to 2002, the exercise prices were also adjusted as a result of the Capital Reduction Exercise during the financial year 2002.

(b) Or later date of grant.

(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.


113


112


5. Taxation (cont'd)

2003COMPANY(i) Deferred Tax Liabilities

Accelerated Tax

DepreciationS$’000

Opening balance 80,713Credited to income statement (1,410)Closing balance 79,303


S$’000


5. Taxation (cont’d)

2003GROUP(i) Deferred Tax Liabilities

AcceleratedTax

Depreciation Others TotalS$’000 S$’000 S$’000

Opening balance 93,545 2,943 96,488Credited to income statement (1,177) (67) (1,244)Closing balance 92,368 2,876 95,244


S$'000


2004COMPANY(i) Deferred Tax Liabilities

Accelerated Tax

DepreciationS$’000

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


S$’000

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


115114



(c) Tax ExpenseGROUP

2004 2003S$’000 S$'000

Tax expense attributable to profit is made up of:Current year

Current tax 69,655 56,538Deferred tax (3,746) 2,617

65,909 59,155Prior years

Current tax (2,668) 1,319Deferred tax (9,327)* (705)

53,914 59,769

* Included an adjustment of S$7.7 million arising from the change in corporate taxation rate from 22% to 20%.

The income tax expense on the results for the financial year varies from the amount of income tax determined by applying the Singaporestandard rate of income tax to profit before taxation due to the following factors:

GROUP2004 2003

S$’000 S$’000

Profit before taxation 600,191 438,904Add/(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 94,141Singapore 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 17,584Losses of subsidiaries not offset against taxable income of other entities – 777Deferred tax benefit not recognised 1,823 1,711Double tax relief for contributions made to Institutes of Public Character (456) (4,478)Effect of different tax rates in other countries 27 105Others – (184)

65,909 59,155



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

GROUP COMPANY2004 2003 2004 2003

S$’000 S$’000 S$’000 S$’000

Deferred tax liabilities 72,126 85,199 59,210 69,539

As at August 31, 2004, certain subsidiary had unutilised tax losses of S$39.2 million (2003: S$48.3 million) available for offsetting againstfuture taxable income subject to the relevant provisions of the Income Tax Act, Chapter 134 (”Income Tax Act”).

(b) Current TaxationGROUP COMPANY

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

Opening balance 68,712 51,204 53,883 42,201Income tax paid (54,587) (40,349) (45,278) (36,605)Tax deducted at source on dividends received from subsidiaries – – – (3,000)Provision for the year 69,655 56,538 61,712 58,065Group relief in accordance with Section 37C of the Income Tax Act – – (8,095) (6,778)(Over)/Under provision in prior years (2,668) 1,319 (2,814) –

Closing balance 81,112 68,712 59,408 53,883


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6. Borrowings (cont’d)

The Company has provided a guarantee and indemnity for the new loan facilities obtained by the subsidiary pertaining to its indebtedness under the loan refinancing arrangement, the maximum liability being limited to the principal sum outstanding, interests outstanding and legal costs incurred.

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,2.04% per annum). The term advances are planned for repayment by August 31, 2005.

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.

(c) In respect of bank borrowings, the Group’s policy is to, where appropriate, minimise its interest rate risk exposure by entering into interest rate swaps over the duration of its borrowings. Accordingly, the subsidiaries entered into interest rate swap contracts as partof their interest rate risk management. Under these interest rate swaps, the subsidiaries agree with other parties to exchange at specifiedintervals, the difference between fixed rate and floating rate interest amounts calculated by reference to the agreed notional principalamounts. 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 ratesare referenced to Singapore dollar swap offer rate, where applicable.

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

GROUP2004 2003

S$'000 S$'000

Notional due:Within 1 year – 22,500Between 1 - 5 years 645,000 645,000

Fair values * (17,611) (19,869)

* The fair value of interest rate swap contract has been calculated (using rates quoted by the Group's bankers) assuming the contract is terminated at the balance sheet

date. The fair value is not recognised in the consolidated financial statements as at the balance sheet date.

(d) The fair values of the TLF, term advances and RCF as at the balance sheet date approximate their carrying values as these loans carryfloating interest rates, which are repriced frequently.


6. BorrowingsGROUP

2004 2003S$’000 S$'000

Transferable term loans [Note a] 683,000 700,000Revolving credit facility [Note a] – 4,400Term advances - unsecured [Note b] 40,000 70,000Revolving credit facilities - unsecured [Note b] 41,000 18,500

764,000 792,900

Borrowings are repayable:Within 1 year 81,000 52,900Between 1 – 5 years 683,000 740,000

764,000 792,900

(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 theyear, the subsidiary has made partial repayment of S$17 million for the TLF loan on July 9, 2004.

During the financial year, the subsidiary also had a S$14 million (2003: S$14 million) revolving credit facility (“RCF”) under which S$4.4million was drawn. The RCF loan was subsequently repaid on January 9, 2004 and the RCF terminated on February 16, 2004.

The TLF facility is, and the RCF facility was secured by way of a legal mortgage on the Group's investment property [Note 8], anassignment of rental proceeds from the investment property and the insurances on the investment property, and an undertaking bythe Company to pay all interests payable in respect of the facilities if the subsidiary fails to pay the same.

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: S$700 million, 3.18% per annum). The loans granted under the TLF are repayable no later than January 31, 2007.

(b) During the financial year, another subsidiary obtained new loan facilities amounting to S$90 million, comprising S$40 million term advances and S$50 million revolving credit facility (“RCF”) to refinance its existing bank loan facilities.


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7. Property, Plant and Equipment (cont’d)(b)

COMPANYPlant Furnitureand and Motor

Equipment Fittings Vehicles TotalS$'000 S$'000 S$'000 S$'000

CostOpening balance 499,008 12,885 2,250 514,143Reclassification (5) 5 – –Additions 1,709 128 – 1,837Transfer in from capital work–in–progress 180,773 – – 180,773Transfer in 64 8 – 72Transfer out (47) – – (47)Disposals (8,349) (81) (74) (8,504)Closing balance 673,153 12,945 2,176 688,274

Accumulated Depreciation and Impairment LossesOpening balance 305,570 4,425 1,523 311,518Reclassification (5) 5 – –Charge for the year 34,339 1,105 227 35,671Transfer in 55 1 – 56Transfer out (45) – – (45)Impairment losses 18,298 – – 18,298Disposals (8,046) (66) (74) (8,186)Closing balance 350,166 5,470 1,676 357,312

Net book value at August 31, 2004 322,987 7,475 500 330,962Capital work–in–progress 11,706 – – 11,706Closing balance 334,693 7,475 500 342,668

Capital work–in–progressOpening balance 163,046 – – 163,046Additions 29,433 – – 29,433Transfer out to fixed assets (180,773) – – (180,773)Closing balance 11,706 – – 11,706

2003 ComparativesNet book value at August 31, 2003 193,438 8,460 727 202,625Capital work–in–progress 163,046 – – 163,046Closing balance 356,484 8,460 727 365,671

Depreciation for 2003 32,960 1,014 216 34,190


7. Property, Plant and Equipment(a) GROUP

Plant FurnitureLand and Buildings and and Motor

Freehold Leasehold Equipment Fittings Vehicles TotalS$'000 S$'000 S$'000 S$'000 S$'000 S$'000

Cost Opening balance 46,694 233,113 616,743 18,273 2,423 917,246Reclassification – (22) (5) 27 – –Additions – – 3,244 346 53 3,643Adjustments* – (4,461) (1,423) (8) – (5,892)Transfer in from capital work–in–progress – – 180,831 – – 180,831Disposals (17,852) – (10,957) (269) (113) (29,191)Closing balance 28,842 228,630 788,433 18,369 2,363 1,066,637

Accumulated Depreciation and Impairment LossesOpening balance 17,450 73,412 346,569 7,432 1,598 446,461Reclassification – (1) (5) 6 – –Charge for the year 212 7,614 44,266 1,597 260 53,949Adjustments* – (1,408) (854) (2) – (2,264)Impairment losses^ (Note 26) – 2,883 30,693 1,274 103 34,953Disposals (9,390) – (10,572) (227) (98) (20,287)Closing balance 8,272 82,500 410,097 10,080 1,863 512,812

Net book value at August 31, 2004 20,570 146,130 378,336 8,289 500 553,825Capital work–in–progress – – 11,706 – – 11,706Closing balance 20,570 146,130 390,042 8,289 500 565,531

Capital work–in–progressOpening balance – – 163,071 – – 163,071Additions – – 29,466 – – 29,466Transfer out to fixed assets – – (180,831) – – (180,831)Closing balance – – 11,706 – – 11,706

2003 ComparativesNet book value at August 31, 2003 29,244 159,701 270,174 10,841 825 470,785Capital work–in–progress – – 163,071 – – 163,071Closing balance 29,244 159,701 433,245 10,841 825 633,856

Depreciation for 2003 212 8,373 43,325 1,488 254 53,652

* 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.

^ Impairment charges arose from the lower-than-expected financial performance of the Group's broadcasting segment (S$19.4 million), technological obsolescence for certainplant 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 andmagazine segment (S$2.8 million). The recoverable amounts of the broadcasting assets and the newspaper and magazine segment's plant and equipment (which have noready 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 anindependent valuer.


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9. Interests in Subsidiaries (cont’d)(b) Goodwill arising on acquisition of subsidiaries

GROUP2004 2003

S$’000 S$’000

Opening balance – –Goodwill on acquisition during the year 18 1,240Amounts written off during the year (18) (1,240)Closing balance – –

(c) The amounts owing by/to subsidiaries are unsecured, interest free and have no fixed repayment terms. Repayments are not expectedwithin the next twelve months. Accordingly, it is not practicable to determine the fair value of these balances. However, the Companydoes not anticipate the carrying amounts at the balance sheet date to be significantly different from the values that would eventuallybe settled.

10. Interests in Associates(a) Unquoted equities

GROUP COMPANY2004 2003 2004 2003

S$’000 S$’000 S$’000 S$’000

Unquoted equities, at cost 12,513 44,837 2,980 2,980Amounts owing by associates (non–trade) [Note (b)] 4 4 – –Loan to an associate [Note (b)] 350 650 – –

12,867 45,491 2,980 2,980Amount owing to associates (non–trade) [Note (b)] (19) – – –Goodwill on consolidation written off (5,559) (23,357) – –Share of net losses (5,801) (14,509) – –Impairment losses (560) (7,439) (2,980) (2,980)

928 186 – –

During the year, an associate was disposed of and accordingly adjustments were made to balances relating to goodwill on consolidation written off, share of net losses and impairment losses. Details of associates are set out in Note 30.

(b) The amounts owing by/to associates, and loan to an associate 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 thesebalances. However, the Group does not anticipate the carrying amounts at the balance sheet date to be significantly different from thevalues that would eventually be settled.


8. Investment PropertyDetails of the investment property are as follows:

GROUPFreehold Land and Building

2004 2003S$’000 S$’000

Cost 923,827 923,827Development expenditure at cost 173,624 167,526Loan interest capitalised 18,935 18,935

1,116,386 1,110,288Impairment losses (70,534) (70,534)

1,045,852 1,039,754

Gross rental income 78,475 49,421Fair value 1,200,000 1,050,000

Fair value of the investment property, the amalgamated Paragon on Orchard Road was stated based on an independent professionalvaluation, determined on an open market value basis and carried out on June 24, 2004 (2003: February 28, 2003). The valuation carriedout in the previous financial year was done on the basis that the construction work for the amalgamated Paragon would be satisfactorilycompleted and the Temporary Occupation Permit and Certificate of Statutory Completion would be obtained. The investment propertyis mortgaged to a bank as security for loan facilities granted to a subsidiary.

9. Interests in Subsidiaries(a) Unquoted equities

COMPANY2004 2003

S$’000 S$’000

Unquoted equities, at cost 476,812 476,083Amounts owing by subsidiaries (non-trade) [Note (c)] 796,146 1,378,626Loan to a subsidiary 88,500 40,000

1,361,458 1,894,709Amounts owing to subsidiaries (non-trade) [Note (c)] (173,209) (67,155)

1,188,249 1,827,554Impairment losses (178,500) –

1,009,749 1,827,554

Details of subsidiaries are set out in Note 29.


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13. StocksGROUP COMPANY

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

Raw materials and consumable stores 24,489 38,895 23,908 38,278Acquired content rights, at unamortised cost 20,502 16,519 – –Production cost of programmes, at unamortised cost 11,299 7,925 – –Provision for stocks (24,012) (8,576) (700) (1,010)

32,278 54,763 23,208 37,268

Made up as follows:At cost 5,643 20,636 5,419 7,670At net realisable value 26,635 34,127 17,789 29,598

32,278 54,763 23,208 37,268

Movements in provisionOpening balance 8,576 3,437 1,010 1,010Provision/(Write–back) for the year 17,514 5,139 (310) –Stocks written off (2,078) – – –Closing balance 24,012 8,576 700 1,010

14. Prepaid Content RightsGROUP

2004 2003S$’000 S$’000

Prepaid content rights – at cost 25,617 23,694Provision for prepaid content rights (25,617) (1,467)

– 22,227

Movements in provisionOpening balance 1,467 86Provision for the year 26,091 1,381Stocks written off (1,941) –Closing balance 25,617 1,467


11. Long–Term InvestmentsGROUP COMPANY

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

Quoted, at costEquities 79,610 92,855 – –Bonds 48,000 48,000 – –

Unquoted, at costEquities 61,327 78,363 35,577 35,577Other investments 425 60,318 425 425

189,362 279,536 36,002 36,002

Provision for diminution in value of investments – Unquoted (14,947) (10,312) – –174,415 269,224 36,002 36,002

Movements in provisionOpening balance 10,312 15,075 – –Provision for the year – Unquoted 4,635 208 – –Utilisation of provision – (2,921) – –Transfer to short–term investments – (2,050) – –Closing balance 14,947 10,312 – –

Market value of quoted investmentsEquities 288,648 268,930 – –Bonds 52,086 51,432 – –

340,734 320,362 – –

12. Other Non-Current Assets

GROUP COMPANY2004 2003 2004 2003

S$’000 S$’000 S$’000 S$’000

Staff loans 5,051 4,916 4,900 4,781


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17. Short–Term Investments(a) Internally managed

GROUP2004 2003

S$’000 S$’000

QuotedEquities, at cost 53,421 102,198Bonds, at cost 150,923 613,734Accretion of discount on bonds 2,358 3,090Amortisation of premium on bonds (109) (1,363)

UnquotedEquities, at cost – 3,480

206,593 721,139Provision for diminution in value of investments – Quoted (17,554) (57,323)

189,039 663,816

Movements in provisionOpening balance 57,323 42,424(Write–back)/provision for the year (545) 18,344Utilisation of provision (39,224) (5,495)Transfer from long–term investments – 2,050Closing balance 17,554 57,323

(b) Funds under management

Quoted investments, at costEquities 95,877 85,580Bonds 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 18,520Accrued income 2,864 970Due to brokers (5,883) (400)

284,600 251,794


15. Trade DebtorsGROUP COMPANY

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

Amount owing 104,334 104,942 92,828 95,120Provision for doubtful debts (17,899) (19,590) (16,194) (18,190)

86,435 85,352 76,634 76,930

Movements in provisionOpening balance 19,590 21,023 18,190 19,700Provision for the year 1,644 2,118 640 1,531Bad debts written off (3,335) (3,551) (2,636) (3,041)Closing balance 17,899 19,590 16,194 18,190

16. Other Debtors and PrepaymentsGROUP COMPANY

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

Accrued interest 2,892 6,180 1 23Sundry debtors 6,958 3,781 2,117 1,596Prepayments 3,546 2,426 2,112 1,212Staff loans 1,734 1,794 1,674 1,715

15,130 14,181 5,904 4,546


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19. Capital and Other CommitmentsGROUP COMPANY

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

Commitments for:

(a) Capital expenditure:Authorised and contracted for 6,906 29,271 5,801 22,212Authorised but not contracted for 32,509 26,206 20,459 26,152

(b) Equity investments 53,666 14,101 – –

(c) Non–cancellable operating leases payable:Within 1 year 4,112 3,067 165 –Between 1 – 5 years 19,899 5,864 7 –After 5 years 200,463 44,559 – –

(d) Non–cancellable operating leases receivable:Within 1 year 80,177 73,995 – –Between 1 – 5 years 119,299 95,409 – –After 5 years – 978 – –

(e) Foreign currency forward contractsNotional due:

Within 1 year 112,651 18,560 1,551 4,577Positive fair value 507 68 11 40Negative fair value 430 – – –

(f) Cross currency swap contractsNotional 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.


17. Short–Term Investments (cont’d)GROUP

2004 2003S$’000 S$’000

Movements in provisionOpening balance 1,746 1,723Provision for the year 4,258 1,823Utilisation of provision (3,360) (1,800)Closing balance 2,644 1,746

Total Short–Term Investments 473,639 915,610

(c) Total market/fair value of investments

Quoted – Equities 200,257 194,894Bonds 306,710 737,510

506,967 932,404

Unquoted – Equities – 3,564

18. Other Creditors and Accrued LiabilitiesGROUP COMPANY

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

Accrued operating expenses 109,058 91,213 92,981 69,160Sundry creditors 16,855 18,355 9,642 7,844Customers' deposits and credits 4,232 4,024 4,047 3,897Amounts due to brokers – 949 – –

130,145 114,541 106,670 80,901


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22. Staff CostsGROUP

2004 2003S$’000 S$’000

(a)Staff costs (including Executive Director):Salaries, bonuses and other costs 237,091 214,517Employers' contribution to defined contribution plans 25,278 26,241

262,369 240,758

(b)Average number of employees 3,564 3,715

23. Profit from OperationsGROUP

2004 2003S$’000 S$’000

Profit from operations is arrived at:

After chargingAudit fees:

Company's auditors:Current year 299 299

Other auditors:Current year 24 23Prior year – (1)

Non-audit fees#:Company's auditors

Current year 101 36Prior year 1 (22)

Less: Amount capitalised as capital work-in-progress (26) –76 14

Directors' remuneration:Company's Directors 1,660 2,216Directors of subsidiaries 148 1,590

Provision for stocks 3,089 5,139Rental expense – Operating lease 2,260 2,657

and after creditingWrite-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.


20. Contingent Liability (Unsecured)

As at August 31, 2004, the Company provided an indemnity to a financial institution for performance guarantees issued on behalf of a subsidiary to enable the subsidiary to meet its obligations in the ordinary course of business. The performance guarantees comprisedUS$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(2003: US$4 million).

21. Operating RevenueGROUP

2004 2003S$’000 S$’000

Newspaper and MagazineAdvertisements 624,448 595,370Circulation 192,033 180,336Others 16,721 13,676

833,202 789,382

Broadcasting and MultimediaAdvertisements 40,030 43,131Broadcasting and multimedia services 14,271 12,603

54,301 55,734

PropertyRental and rental-related services 82,572 52,700

970,075 897,816


131130


25. Net Income from Investments (cont’d)(a) Income from funds under management

GROUP2004 2003

S$’000 S$’000

Interest on deposits and bonds 6,418 5,882Profit on sale of investments 10,058 4,529Dividend from quoted equities 2,131 879Foreign exchange loss (3,019) (414)Expenses and fees (1,893) (764)

13,695 10,112Provision for diminution in value of quoted investments (4,258) (1,823)

9,437 8,289

26. Exceptional ItemsGROUP

2004 2003S$’000 S$’000

Gain on sale of property 110,106 –Write–down of current assets and provision for obligations

arising from a review of broadcasting assets (45,889) –Impairment loss on property, plant and equipment (Note 7) (34,953) (8,006)Surplus on partial disposal of interests in an associate – 187,720Surplus on completion of liquidation of:

– Subsidiaries – 1,748– An associate – 46

Impairment loss on investment property – (50,000)Impairment loss on associates – (7,439)Capital work–in–progress written off – (1,069)Others (587) (1,240)

28,677 121,760


24. Finance Costs

GROUP2004 2003

S$’000 S$’000

Interest on bank loans 24,203 24,326

25. Net Income from InvestmentsGROUP

2004 2003S$’000 S$’000

Deposits interest 3,403 3,636Interest from bonds 23,084 22,809Dividend from equities* 190,624 10,126Foreign exchange gain/(loss) 10,629 (776)Profit on sale of investments:

Short–term investments 15,083 13,493Long–term investments 9,942 132

Other investment income 1,005 1,643253,770 51,063

Accretion of discount on bonds 21 57Amortisation of premium on bonds (1,121) (1,273)Write-back/(Provision) for diminution in value of investments:

Quoted 545 (18,344)Unquoted (4,635) (208)

248,580 31,295Income from funds under management [Note 25(a)] 9,437 8,289

258,017 39,584

* Dividend from equities received during the year included S$168.1 million from the divestment of the Group's indirect stake in Belgacom.


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28. Earnings per ShareGROUP

2004 2003S$’000 S$’000

Basic Diluted Basic Diluted

Profit attributable to shareholders 546,282 546,282 378,736 378,736

Number of Shares Number of Shares*‘000 ‘000

Weighted average number of shares 1,786,830 1,786,830 1,848,570 1,848,570Adjustment for assumed conversion of share options – 1,987 – 3,170Weighted average number of shares used to compute earnings per share 1,786,830 1,788,817 1,848,570 1,851,740

Earnings per S$0.20 share (S$)– before exceptional items 0.29 0.29 0.14 0.14– after exceptional items 0.31 0.31 0.20 0.20

* Adjusted for effect of Share Split Exercise completed in financial year 2004.


27. DividendsGROUP AND COMPANY

2004 2003S$’000 S$’000

Dividends paid:– Final dividend of 50 cents per S$1 share less tax

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(2003: 30 cents per S$1 share less tax at 22%) 86,814 86,596

– Interim dividend of 20 cents per S$1 share less taxat 20% (2003: 20 cents per S$1 share less tax at 22%) 59,487 57,654

– Special interim dividend of nil cents per S$1 share less taxat 20% (2003: 30 cents per S$1 share less tax at 22%) – 86,481

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).

(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 total of S$142,437,000 (2003: 30 cents per S$1 share, less tax at 22%, amounting to S$86,814,000).

(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 thenext annual general meeting.


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29. Subsidiaries (cont’d)Effective

Principal Country of Class of % of Equity heldName of Subsidiary Activities Incorporation Shares Cost of Investment by the Group

2004 2003 2004 2003S$’000 S$’000 % %

Balance b/f 218,661 218,166

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

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

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

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

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

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

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

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

Times Properties Letting properties and Singapore Ord 77,827 77,827 100.00 100.00Private Limited provision of property

management services

Orchard 290 Ltd Holding investments and Singapore Ord * * 100.00 100.00managing of shoppingcentres & othercommercial properties

Balance c/f 476,578 476,083


29. SubsidiariesEffective


2004 2003 2004 2003S$’000 S$’000 % %

Hipro Printing Pte Ltd Publishing newspapers Singapore Ord 855 360 100.00 80.00

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

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

Singapore Press Provision of news Singapore Mgt * * 99.98 99.98Holdings (Overseas) reporting & marketing Ord * * 100.00 100.00Limited services and holding

investments

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

SPH Magazines Pte Ltd Publishing magazines Singapore Ord * * 100.00 100.00

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

Lianhe Publishing Publishing magazines Singapore Ord * * 51.00 51.00Pte Ltd

SPH Data Services Licensing of copyrights Singapore Ord * * 100.00 100.00Pte Ltd & trademarks

@ SPH AsiaOne Ltd Provision of Internet – Singapore Ord 94,400 94,400 100.00 100.00related services andholding investments

@ Zaobao.com Ltd Provision of Internet – Singapore Ord * * 100.00 100.00related services

@ Evol Media Pte Ltd Provision of Internet – Singapore Ord * * 100.00 100.00related services

SPH MediaWorks Ltd Provision of broadcasting Singapore Ord 90,000 90,000 100.00 100.00and broadband services

Balance c/f 218,661 218,166


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30. AssociatesEffective

Principal Country of Class of % of Equity heldName of Associate Activities Incorporation Shares Cost of Investment by the Group

2004 2003 2004 2003S$’000 S$’000 % %

Held by the Company

Business Day Publishing Thailand Ord 2,980 2,980 24.97 24.97Company Limited newspapers

Held by Subsidiaries

American Bourses Development & Singapore Ord 6,375 6,375 20.00 20.00Corporation Pte Ltd maintenance of

software andmultimedia works;Businessmanagement andconsultancyservices

Citta Bella Sdn Bhd Publishing and Malaysia Ord 248 248 24.99 24.99distributingmagazines

GMM Times Co Ltd Publishing and Thailand Ord 395 – 30.00 –distributingmagazines

Magazine World Sdn Bhd Publishing and Malaysia Ord 42 – 30.00 –distributingmagazines

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 50.00broadcaster

StarEastWorks Limited Content Hongkong Ord – 33,634 – 50.00production

12,513 44,837


29. Subsidiaries (cont’d)Effective


2004 2003 2004 2003S$’000 S$’000 % %

Balance b/f 476,578 476,083

New Beginnings Business management The People's Ord 234 – 100.00 –Management and consultancy Republic ofConsulting services China(Shanghai) Company Limited

SPH Stop Press Pte Ltd Dormant Singapore Ord * * 100.00 100.00

Morningvista Dormant British Virgin Ord * * 100.00 100.00Investments Limited Islands

Asia Century Dormant Singapore Ord * * 51.00 51.00Publishing Pte Ltd

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

476,812 476,083

Notes:

1. @ Companies audited by Ernst & Young, Singapore.

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


139138


31. Segmental Information (cont’d)2003

Newspaper Broadcasting, Treasuryand Multimedia and and

Magazine Telecommunications Investment Property Eliminations ConsolidatedS$'000 S$'000 S$'000 S$'000 S$'000 S$'000

Operating revenueExternal sales 789,382 55,734 – 52,700 – 897,816Inter–segmental sales 2,914 21 – 2,544 (5,479) –Total operating revenue 792,296 55,755 – 55,244 (5,479) 897,816

ResultSegment result 305,065 (53,057) 39,028 39,203 – 330,239Finance costs – (1,916) – (22,410) – (24,326)Finance income 102 39 – 100 – 241Share of profits less losses

of associates 86 10,904 – – – 10,990Exceptional items (7,000) 180,821 14 (52,075) – 121,760Profit/(loss) before taxation 298,253 136,791 39,042 (35,182) – 438,904Taxation (59,769)Profit after taxation 379,135Minority interests (399)Profit attributable to

shareholders 378,736

Other InformationSegment assets 737,067 86,974 1,462,487 1,081,531 – 3,368,059Interests in associates 186 – – – – 186Consolidated total assets 3,368,245

Segment liabilities 126,740 108,191 986 729,573 – 965,490Current taxation 68,712Deferred taxation 85,199Minority interests 1,108Consolidated total liabilities 1,120,509

Capital expenditure 26,367 437 – 30,396 – 57,200Depreciation 44,841 8,158 – 653 – 53,652


31. Segmental Information2004

Newspaper Treasuryand Broadcasting and

Magazine and Multimedia Investment Property Eliminations ConsolidatedS$'000 S$'000 S$'000 S$'000 S$'000 S$'000

Operating revenueExternal sales 833,202 54,301 – 82,572 – 970,075Inter–segmental sales 2,352 72 – 2,377 (4,801) –Total operating revenue 835,554 54,373 – 84,949 (4,801) 970,075

ResultSegment result 337,774 (55,955) 252,716 61,169 – 595,704Finance costs (15) (1,847) – (22,341) – (24,203)Finance income 131 15 – 116 – 262Share of net losses

of associates (249) – – – – (249)Exceptional items (16,129) (65,300) – 110,106 – 28,677Profit/(loss) before taxation 321,512 (123,087) 252,716 149,050 – 600,191Taxation (53,914)Profit after taxation 546,277Minority interests 5Profit attributable to

shareholders 546,282

Other InformationSegment assets 696,695 22,130 780,291 1,091,836 – 2,590,952Interests in associates 928 – – – – 928Consolidated total assets 2,591,880

Segment liabilities 148,076 100,906 36 709,987 – 959,005Current taxation 81,112Deferred taxation 72,126Minority interests 518Consolidated total liabilities 1,112,761

Capital expenditure 31,628 1,183 – 6,396 – 39,207Depreciation 45,360 5,798 – 527 – 51,685


141140


32. Fair Value of Financial Instruments The financial assets and financial liabilities of the Group and the Company for which fair values are required to be disclosed in accordancewith Singapore Financial Reporting Standard comprise the following:

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

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 subsidiaries and associates.

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 thefair value because the assumptions used in the valuation models to value these investments cannot be reasonably determined. The unquoted long-term investments comprised investments in venture capital companies and companies whose principal activities includethe provision of telecommunication-related services. Information on the fair values of non-current receivables from and payables tosubsidiaries and associates are set out in the respective notes to the financial statements.

33. Subsequent events(a) Acquisition of Vantage Corporation Limited's media assets

On September 1, 2004, a wholly-owned subsidiary, SPH Magazines Pte Ltd acquired from Vantage Corporation Limited (formerlyknown 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; ande) Magazines Incorporated Pte Ltd.

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


31. Segmental Information (cont’d)Notes:(a) Business segments:

The Group is organised into four major operating segments, namely Newspaper and Magazine, Broadcasting and Multimedia, Treasuryand Investment, and Property, and reports its primary segment information through direct identification. The Newspaper and Magazinesegment is involved in the publishing, printing and distributing of newspapers and magazines. The Broadcasting and Multimediasegment provides services which include provision of broadcasting, portal sites and other related services. The Treasury andInvestment segment manages the investment activities of the Group. The Property segment holds and manages properties owned bythe Group.

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.

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

CapitalOperating Revenue Segment Assets Expenditure

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

Singapore 970,075 897,816 2,583,798 3,234,167 39,145 57,181Other Countries – – 8,082 134,078 62 19

970,075 897,816 2,591,880 3,368,245 39,207 57,200

(c) Under equity accounting, the Group's operating revenue does not include its share of associates' operating revenue.



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33. Subsequent events (cont’d)(c) Initial Public Offer (“IPO”) of StarHub Pte Ltd (“StarHub”)

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 Company holds a pre-IPO shareholding of 8.95% in StarHub which is accounted for as a long-term investment at a cost of 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.

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 whereby the over-allotment option is exercised. Accordingly, the Company's shareholding in StarHub may be reduced to between 0% and 0.9% depending on the extent whereby the over-allotment option is exercised.

34. Re-classificationWhere necessary, comparative figures have been adjusted to conform with the current presentation where there are changes in presentationin these financial statements.

35. Authorisation of Financial StatementsOn October 11, 2004, the Board of Directors of Singapore Press Holdings Limited authorised these financial statements for issue.


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 areincorporated in Singapore, Malaysia, Indonesia, Hongkong and The People's Republic of China. These companies are mainly engagedin the publishing and distribution of magazines.

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 - Businesscombinations which is applicable for the Group in financial year 2005.

(b) Rationalisation of free-to-air television broadcasting and free newspaper business

On September 17, 2004, the Group entered into agreements with MediaCorp Pte Ltd and certain of its subsidiaries with theobjective of rationalising the Group’s free-to-air television broadcasting and free newspaper businesses.

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

Holdings") for a sum of S$10 million in cash; and

(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 millionin cash.

These companies are incorporated in Singapore. MCTV Holdings is engaged in the business of free-to-air television broadcasting andcontent 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 broadcastingbusiness 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, inaccordance with FRS 28 - Accounting for Investments in Associates. The Company also plans to repay the bank loan facilities of S$81million, 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 shareof the Group for the financial year ending August 31, 2005.


145144

S H A R E H O L D E R S B Y S I Z E O F S H A R E H O L D I N G SA S AT O C T O B E R 2 2 , 2 0 0 4

1 – 999

71.19%

19.64%

8.81%

0.36%

1,000 – 10,000 10,001 – 1,000,000 1,000,001 and above

Size of Shareholdings No. of Shareholders % Total Holdings %

1 – 999 1,948 8.81 975,543 0.061,000 – 10,000 15,749 71.19 57,967,852 3.7010,001 – 1,000,000 4,344 19.64 255,099,752 16.281,000,001 and above 80 0.36 1,253,082,424 79.96

Grand Total 22,121 100.00 1,567,125,571 100.00

S H A R E H O L D I N G S T A T I S T I C S S H A R E P R I C E M O V E M E N T S F O R T H E Y E A R E N D E D A U G U S T 3 1 , 2 0 0 4

Year

S$

Highest closing price

0

4

5

6

7

8

2.5

3.0

3.5

4.0

4.5

5.0

5.5

Year

S$

Lowest closing price

0

2

3

4

5

6

2000 2001 2002 2003 2004 2000 2001 2002 2003 2004

2004 2003 2002 2001 2000S$ S$ S$ S$ S$

Highest Closing Price* 4.54 4.12 5.01 5.90 7.55Lowest Closing Price* 3.59 3.25 3.12 3.79 5.13August 31 Closing Price* 4.32 3.79 3.98 4.02 5.62Price / Earnings Ratio based on August 31 Closing Price 14.12 18.58 23.98 21.85 24.87

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


147146

T W E N T Y L A R G E S T O R D I N A R Y S H A R E H O L D E R SA S AT O C T O B E R 2 2 , 2 0 0 4

Name of Shareholder Total Holdings %

1. DBS NOMINEES (PRIVATE) LIMITED 357,311,491 22.80

2. RAFFLES NOMINEES PTE LTD 227,066,792 14.49

3. CITIBANK NOMINEES SINGAPORE PTE LTD 135,079,296 8.62

4. HSBC (SINGAPORE) NOMINEES PTE LTD 131,170,158 8.37

5. UNITED OVERSEAS BANK NOMINEES (PRIVATE) LIMITED 63,861,385 4.08

6. DB NOMINEES (S) PTE LTD 25,584,694 1.63

7. TEMASEK HOLDINGS (PTE) LTD 21,973,248 1.40

8. THE ASIA LIFE ASSURANCE SOCIETY LTD-PAR FUND 15,590,412 1.00

9. UNIVERSITY OF MALAYA 15,477,556 1.00

10. LEE FOUNDATION STATES OF MALAYA 15,215,522 0.97

11. KO TECK SIANG 13,260,000 0.85

12. TAN ENG SIAN 12,750,000 0.81

13. OVERSEA CHINESE BANK NOMINEES (PRIVATE) LIMITED 12,395,039 0.79

14. MERRILL LYNCH (S'PORE) PTE LTD 12,117,938 0.77

15. YONG SIEW YOON 10,000,000 0.64

16. OVERSEAS UNION BANK NOMINEES (PRIVATE) LIMITED 9,946,023 0.63

17 OVERSEAS UNION ENTERPRISE LIMITED 9,133,845 0.58

18 MORGAN STANLEY ASIA (SINGAPORE) SECURITIES PTE LTD 8,375,917 0.53

19 LEE FOUNDATION 8,210,940 0.52

20 UOB KAY HIAN PTE LTD 6,595,773 0.42

TOTAL 1,111,116,029 70.90

H O L D E R S O F M A N A G E M E N T S H A R E SA S AT O C T O B E R 2 2 , 2 0 0 4

Name of Shareholder Total Holdings %

1. THE GREAT EASTERN LIFE ASSURANCE COMPANY LIMITED 3,621,757 22.60

2. OVERSEA-CHINESE BANKING CORPORATION LTD 2,691,938 16.80

3. NTUC INCOME INSURANCE COOPERATIVE LIMITED 2,618,873 16.34

4. SINGAPORE TELECOMMUNICATIONS LIMITED 2,131,082 13.30

5. THE DEVELOPMENT BANK OF SINGAPORE LTD 1,522,198 9.50

6. UNITED OVERSEAS BANK LIMITED 1,289,328 8.05

7. NATIONAL UNIVERSITY OF SINGAPORE 858,649 5.36

8. FRASER & NEAVE, LIMITED 644,640 4.02

9. FULLERTON (PRIVATE) LIMITED 644,640 4.02

10. CHIEF EXECUTIVE OFFICER 4 0.00

11. DIRECTORS (FOUR EACH) 44 0.00

TOTAL 16,023,153 100.00

S U B S T A N T I A L S H A R E H O L D E RA S AT O C T O B E R 2 2 , 2 0 0 4

Direct Interest Deemed InterestNo. of No. of

Ordinary Shares % Ordinary Shares %

SILCHESTER INTERNATIONAL INVESTORS LIMITED 74,443,000 4.703 4,783,812* 0.302

* Silchester International Investors Limited is deemed to have an interest by virtue of its 49.9% ownership in Sanderson Asset Management Limited.

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.


149148

O V E R S E A S B U R E A U SA S AT O C T O B E R 1 5 , 2 0 0 4

Bureau Name/Address Telephone Fax Email Pub.

BANGKOK Nirmal Ghosh 66-2-661 6207 66-2-260 0893 [email protected] STApt 2A, Prime Residence6, Sukhumvit Soi 27Klong Toey Nua, WathanaBangkok 10110, Thailand

BEIJING Goh Sui Noi 86-10-6418 1577/ 86-10-6418 1580 [email protected] STTschang Chi-Chu 86-10-6418 1578 [email protected] Chin Hon [email protected]

Lee Huay Leng 86-10-6418 1585 86-10-6418 1584 [email protected] ZBSng Tuan Hwee 86-10-6418 1587 [email protected] 4G, Office Tower BEast Gate Plaza29 Dongzhong Street, Dongcheng DistrictBeijing 100027, P.R. China

CHONGQING Zhang Xiao Zhong 86-23-6381 1009 86-23-6381 1011 [email protected] ZBYuzhong Qu Minquan Lu51 Hengtong Yunding International ApartmentUnit B, 16-11,ChongQing 400010

GUANGZHOU Lee Chih Horng 86-20-8760 5937 86-20 8731 8512 [email protected] ZBRoom 1410, 14th Floor, South TowerWorld Trade Centre371-375 Huanshi DongluGuangzhou 510095, China

HONGKONG Ching Cheong 852-2530 9720 852-2845 9934 [email protected] ST

Norman Yik 852-2524 6191 852-2524 7394 [email protected] ZB

Echo Cheung 852-2877 9076 852-2522 0950 [email protected] Mktg

1308, 13th Floor, 852-2526 9018 - ST General LineTower Two, Lippo Centre, No. 89 Queensway, 852-2877 0713 - ZB General LineHong Kong

Share Options

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:

Michael Fam Yue Onn ( Chairman)Lim Chin BengNgiam Tong DowYeo Ning HongPhilip Pillai (appointed on 5.12.2003)Lee Hee Seng (retired on 5.12.2003)

Details of options granted to Directors and employees in the Group receiving 5% or more of the total number of options available under the1990 Scheme are as follows;

Name of Number and Aggregate Aggregate AggregateDirector/Employee terms of options options options

Options granted granted since exercised since outstandingfrom 1.9.03 to commencement commencement as at 31.8.0431.8.04 of Scheme on of Scheme on

28.12.90 to 31.8.04 28.12.90 to 31.8.04

Lim Kim San - 1,763,912 1,763,912 -

The 1990 Scheme was approved by shareholders in December 1990, and has been subsequently amended; the latest amendments wereapproved at the extraordinary general meeting on July 16, 1999.

At the extraordinary general meeting on July 16, 1999, the 1999 Scheme was adopted to replace the 1990 Scheme.

Details of options granted to Directors and employees in the Group receiving 5% or more of the total number of options available under the1999 Scheme are as follows:

Name of Number and Aggregate Aggregate AggregateDirector/Employee terms* of options options options

Options granted granted since exercised since outstandingfrom 1.9.03 to commencement commencement as at 31.8.0431.8.04 of Scheme on of Scheme on

27.10.99 to 31.8.04 27.10.99 to 31.8.04

Lim Kim San 150,000 1,050,000 225,000 3,506,250 #

* Terms: Exercise price: S$18.54Expiry Date: 16.12.2013

# Adjusted for the effects of the Share Split and Captal Reduction Exercises which took place during the financial year 2004.

In respect of each of the 1990 Scheme and 1999 Scheme:1. the Rules do not allow for options to be granted at a discount;2. there are no controlling shareholders of the Company or its associates to whom options have been granted; and3. 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.


151150

O V E R S E A S B U R E A U S ( C O N T ’ D )A S AT O C T O B E R 1 5 , 2 0 0 4


TAIPEI Lawrence Chung Kuo Hsiung 886-2-2370 3727 886-2-2370 9762 [email protected] STYap Pheng Hui 886-2-2383 2732 886-2-2375 7822 [email protected] ZB2F., No. 130, Bo-Ai RoadJhong Jheng DistrictTaipei City 100, Taiwan (R.O.C.)

TOKYO Kwan Weng Kin 81-3-3442 4258 81-3-3442 4258 [email protected] ST2-16-49-503 TakanawaMinato-ku, TokyoJapan 108-0074

Ryo Ichi Yanagihara 81-3-3582 6259 81-3-3589 5480 Mktg5A, 6-28 Akasaka, 6-ChomeMinato-ku, Tokyo 107, Japan

WASHINGTON Roger Mitton 1-202-662 8726 1-202-662 8729 [email protected] STEugene Low [email protected] Press BuildingSuite 916, 529 14th Street., NWWashington, DC 20045U.S.A

Shanghai Investment Office

New Beginnings Loo Chin Wah 86-21-2890 9630 86-21-2890 9999 [email protected] 31st Floor, Jin Mao TowerConsulting 88 Shi Ji Avenue, Pudong(Shanghai) Shanghai 200120, PR ChinaCompany Limited

Note: ST – Straits Times, ZB – Lianhe Zaobao, BT – The Business Times, Mktg – Marketing

O V E R S E A S B U R E A U S ( C O N T ’ D )A S AT O C T O B E R 1 5 , 2 0 0 4


JAKARTA Derwin Pereira 62-21-3983 1465 62-21-3983 1466 [email protected] ST62-21-3983 1467

Devi Muri Asmarani 62-21-3983 1471 [email protected] Bin Osman

Shoeb Kagda 62-21-3983 1474 [email protected] BT

Chong Tien Siong 62-21-3983 1485 62-21-3983 1486 [email protected] ZB

Suite 1401, 14th FloorDeutsche Bank BuildingJalan Imam Bonjol 80, Jakarta 10310

KUALA LUMPUR Reme Bin Ahmad 02-03-2162 0011 02-03-2164 6439 [email protected] STLeslie Lau Kuan Chen [email protected] Hong [email protected]

Pauline Ng BT

Suite 11A, Level 11, MNI TwinsTower 2, No. 11 Jalan Pinang50450 Kuala LumpurMalaysia

MANILA Maria Luz Baguioro 63-2-848 7232 / 63-2-848 7235 [email protected] STUnit no. 1510, 15th floor, 63-2-848 7233 /Tower One 63-2-848 7234

Ayala Triangle, Avala AvenueMakati City 1226, Philippines

SHANGHAI Jason Leow [email protected] ST

Wong Yee Fong 86-21-6218 1315 / 86-21-6258 8723 [email protected] ZBRoom 2316, 86-21-6218 1316 /Nanzheng Building 86-21-6218 1317No. 580 West Nanjing RoadShanghai 200041, China


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C O R P O R A T E I N F O R M A T I O NS I N G A P O R E P R E S S H O L D I N G S L I M I T E D

Audit Committee

Tang I-Fang / ChairmanWillie Cheng Jue HiangCheong Choong KongLee Ek TiengSum Soon Lim

AuditorPricewaterhouseCoopers8 Cross Street, #17-00,PWC Building,Singapore 048424Audit PartnerTan Boon Chok (Appointed 2003)

Company SecretariesGinney Lim May LingKhor Siew Kim

Registered Office1000, Toa Payoh North, News Centre,Singapore 318994Tel: (65) 6319 6319Fax: (65) 6319 8282Email: [email protected]. No. 198402868E

Share Registration OfficeBarbinder & Co Pte Ltd8 Cross Street, #17-00,PWC Building,Singapore 048424

Financial Calendar

Announcement of 2004 Half-Year Results April 6, 2004Payment of 2004 Interim Dividend May 5, 2004Extraordinary General Meeting May 7, 2004Financial Year-End August 31, 2004Announcement of 2004 Full-Year Results October 11, 2004Despatch of Annual Report to Shareholders November 18, 2004Annual General Meeting December 6, 2004Payment of 2004 Proposed Final & Special Dividends December 28, 2004

P R O P E R T I E S O F T H E G R O U PA S AT A U G U S T 3 1 , 2 0 0 4

Expiry date Land Built-in ExistingLocation Tenure of Lease (sq m) (sq m) use

Times Industrial Building Freehold - 20,638 12,560 Industrial422 Thomson Road

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

Print Centre Leasehold June 9, 2034 110,075 103,460 Industrial2 Jurong Port Road

News Centre Leasehold March 2, 2031 21,730 54,296 Industrial1000 Toa Payoh North

Manhattan House Leasehold October 15, 2068 - 554 Commercial151 Chin Swee RoadUnits #01-39 to #01-48and #01-51 to #01-56

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

42 Nassim Road Freehold - 1,406 686 Residential

42A Nassim Road Freehold - 1,444 645 Residential

42B Nassim Road Freehold - 1,418 645 Residential

Paragon Freehold - 16,638 85,182 Commercial290 Orchard Road

MALAYSIAAwana Condominium Freehold - - 117 ResidentialUnit 3544Genting Highlands

HONGKONGTower Two, Lippo Centre Leasehold February 14, 2059 - 368 CommercialUnit 1308 13th Floor89 Queensway, Hong Kong


155154

N O T I C E O F A N N U A L G E N E R A L M E E T I N G

Special Business

8. To consider and, if thought fit, to pass the following Ordinary Resolutions:

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

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

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

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

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

provided that:

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

(2) (subject to such manner of calculation as may be prescribed by the SGX-ST) for the purpose of determining the aggregate number ofShares that may be issued under sub-paragraph (1) above, the percentage of issued share capital shall be based on the issued sharecapital 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 whichare 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.”


NOTICE IS HEREBY GIVEN that the Twentieth Annual General Meeting of the Company will be held at The Auditorium, 1000 Toa Payoh North,News Centre, 1st Storey, Annexe Block, Singapore 318994 on Monday, December 6, 2004 at 10.30 a.m. for the following business:

Ordinary Business

1. To receive and, if approved, to adopt the Directors’ Report and Audited Accounts for the financial year ended August 31, 2004.

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.

3. To pass the following resolutions separately under Section 153(6) of the Companies Act, Chapter 50: “That pursuant to Section 153(6) of the Companies Act, Chapter 50, _____________be and is hereby re-appointed a Director of the Company to hold such office until the next Annual General Meeting of the Company”:

(i) Lim Chin Beng(ii) Lee Ek Tieng.

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

(i) Cheong Choong Kong(ii) Yeo Ning Hong(iii) Cham Tao Soon(iv) Willie Cheng Jue Hiang.

5. To approve Directors’ fees of S$787,500 .

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

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


157156


(c) in this Resolution:

“Prescribed Limit” means that number of issued Ordinary Shares representing ten per cent of the issued Ordinary Share capital of the Company as at the date of the passing of this Resolution;

“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 ofan Ordinary Share and off-market purchase pursuant to an equal access scheme, 105 per cent of the Average Closing Price of the Ordinary Shares;

“Average Closing Price” means the average of the last dealt prices of an Ordinary Share for the five consecutive trading days on which the Ordinary Shares are transacted on the SGX-ST immediately preceding the date of market purchase by the Company or, as the case may be, the date of the making of the offer pursuant to the off-market purchase, and deemed to be adjusted, in accordance with the listing rules of the SGX-ST, for any corporate action that occurs after the said five-day period; and

“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 acquisition of Ordinary Shares from holders of Ordinary Shares, stating therein the purchase price (which shall not be more than the Maximum Price calculated on the foregoing basis) for each Ordinary Share and the relevant terms of the equal access scheme for effecting the off-market purchase; and

(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 executing such documents as may be required) as they and/or he may consider expedient or necessary to give effect to the transactions contemplated and/or authorised by this Resolution.”

By Order of the Board

Ginney Lim May LingKhor Siew KimCompany SecretariesSingapore,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 proxyneed 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 themeeting.


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

(iii) “That:

(a) for the purposes of Sections 76C and 76E of the Companies Act, Chapter 50 (the “Companies Act”), the exercise by the Directors ofthe Company of all the powers of the Company to purchase or otherwise acquire issued ordinary shares of S$0.20 each fully paid in thecapital of the Company (the “Ordinary Shares”) not exceeding in aggregate the Prescribed Limit (as hereafter defined), at such price orprices as may be determined by the Directors from time to time up to the Maximum Price (as hereafter defined), whether by way of:-

(i) market purchase(s) on the SGX-ST transacted through the Central Limit Order Book trading system; and/or

(ii) off-market purchase(s) (if effected otherwise than on the SGX-ST) in accordance with any equal access scheme(s) as may bedetermined or formulated by the Directors as they consider fit, which scheme(s) shall satisfy all the conditions prescribed by theCompanies Act;

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 ishereby authorised and approved generally and unconditionally (the “Share Buy Back Mandate”);

(b) unless varied or revoked by the Company in general meeting, the authority conferred on the Directors of the Company pursuant to theShare Buy Back Mandate may be exercised by the Directors at any time and from time to time during the period commencing from the dateof 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

(ii) the date by which the next Annual General Meeting of the Company is required by law to be held;


159158

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

The effects of the resolutions under the heading "Special Business" in the Notice of the forthcoming Annual General Meeting are:-

(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 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.

(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 capital of the Company from time to time.

(c) Ordinary Resolution No. 8(iii) is to renew the mandate to permit the Company to purchase or acquire issued ordinary shares in the capital of the Company on the terms and subject to conditions of the Resolution.

The Company may use internal sources of funds, or a combination of internal resources and external borrowings, to finance the purchase or acquisition of its ordinary shares. The amount of funding required for the Company to purchase or acquire its ordinary shares, and the impact on the Company’s financial position, cannot be ascertained as at the date of this Notice as these will depend onthe number of ordinary shares purchased or acquired and the price at which such ordinary shares were purchased or acquired.

Based on the issued and paid-up ordinary share capital of the Company as at October 18, 2004 (the “Latest Practicable Date”), the 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 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 fiveconsecutive 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 outin greater detail in the letter to Shareholders dated November 18, 2004, which is enclosed together with this Annual Report.

N O T I C E O F A N N U A L G E N E R A L M E E T I N GN O T I C E O F A N N U A L G E N E R A L M E E T I N G

EXPLANATORY NOTES

1. In relation to Ordinary Resolution No. 3 :-

• Lim Chin Beng will, upon re-appointment, continue as the Chairman of the Board and of the Executive Committee, and as a member of the Nominating Committee and the Remuneration Committee. He is considered an independent Director.

• 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.

2. In relation to Ordinary Resolution No. 4:-

• Cheong Choong Kong will, upon re-election, continue as a member of the Audit Committee. He is considered an independent Director.

• Yeo Ning Hong will, upon re-election, continue as a member of the Remuneration Committee. He is considered an independent Director.

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

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


161160

P R O X Y F O R M

To be used on To be used ina Show of Hands the event of a Poll

No. of Votes No. of Votes No. Resolutions For Against For Against

Ordinary Business

1. To adopt Directors' Report and Audited Accounts

2. To declare a Final Dividend

3. To re-appoint Directors pursuant to Section 153(6)

of the Companies Act, Cap. 50:-

(i) Lim Chin Beng

(ii) Lee Ek Tieng

4. To re-elect Directors:-

(i) Cheong Choong Kong

(ii) Yeo Ning Hong

(iii) Cham Tao Soon

(iv) Willie Cheng Jue Hiang

5. To approve Directors’ fees

6. To appoint Auditors and authorise Directors to fix

their remuneration

7. Any other business

Special Business

8. (i) To approve the Ordinary Resolution pursuant to

Section 161 of the Companies Act, Cap. 50

(ii) To authorise Directors to offer and grant options

and to issue shares in accordance with the

provisions of the Singapore Press Holdings

Group (1999) Share Option Scheme

(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

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

ANNUAL GENERAL MEETINGSingapore Press Holdings Limited (Incorporated in Singapore)Reg. No. 198402868E

I/We _______________________________________________________________________________________

of ________________________________________________________________________________________

being a member/members of the abovenamed Company, hereby appoint the Chairman of the Meeting, or

Name Address NRIC/Passport Number Proportion ofShareholdings(%)

and/or (delete as appropriate)

as my/our proxy/proxies to attend and to vote for me/us on my/our behalf and, if necessary, to demand a poll, at the Annual General Meetingof the Company to be held at The Auditorium, 1000 Toa Payoh North, News Centre, 1st Storey, Annexe Block, Singapore 318994 onDecember 6, 2004 at 10.30 a.m. and at any adjournment thereof.

(Please indicate with an "X" in the spaces provided whether you wish your vote(s) to be cast for or against the Ordinary Resolutions as setout in the Notice of Annual General Meeting. In the absence of specific directions, the proxy/proxies will vote or abstain as he/they may thinkfit, as he/they will on any other matter arising at the Annual General Meeting.)

P R O X Y F O R M


T H I S P A G E I S I N T E N T I O N A L L Y L E F T B L A N K .

162

P R O X Y F O R M

IMPORTANTNotes:

1. Please insert the total number of ordinary shares and/or management shares (“shares”) held by you. If you have ordinary shares enteredagainst 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 insertthat number of Shares. If you have ordinary shares entered against your name in the Depository Register and Shares registered in yourname in the Register of Members, you should insert the aggregate number of Shares entered against your name in the Depository Registerand registered in your name in the Register of Members. If no number is inserted, the instrument appointing a proxy or proxies shall bedeemed 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” andinsert the name and address of the proxy desired in the box provided. If the box is left blank or incomplete, the Chairman of the Meetingshall 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 attendand 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. Wherethe instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its seal or under the hand ofan 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 asits 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 illegibleor 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 anyinstrument appointing a proxy or proxies lodged if the Member, being the appointor, is not shown to have ordinary shares entered againsthis name in the Depository Register as at 48 hours before the time appointed for holding the Annual General Meeting, as certified by TheCentral Depository (Pte) Limited to the Company.


T H I S P A G E I S I N T E N T I O N A L L Y L E F T B L A N K .


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